2011 ANNUAL REPORT OpenWorld plc an umbrella fund with segregated liability between sub-funds

30 June 2011 (Audited)

Euro Credit Europe Focus Equity Global Climate Change Global Dynamic Bond Global Focus Equity Global High Dividend Equity Global Listed Infrastructure Global Opportunistic Listed Property India Focus Equity Japan Focus Equity US Credit

OpenWorld plc

Contents

Administration of the Company ...... 2

Background to the Company ...... 4

Directors’ Report ...... 5

Custodian and Trustee’s Report ...... 7

Independent Auditors’ Report ...... 8

Combined Statements ...... 10

Euro Credit ...... 13

Europe Focus Equity ...... 24

Global Climate Change ...... 33

Global Dynamic Bond ...... 42

Global Focus Equity ...... 55

Global High Dividend Equity ...... 65

Global Listed Infrastructure ...... 74

Global Opportunistic Listed Property ...... 82

India Focus Equity ...... 90

Japan Focus Equity ...... 97

US Credit ...... 104

Notes to the Financial Statements ...... 116

Appendix I - Total Expense Ratio (Unaudited) ...... 165

Appendix II - Portfolio Turnover Rates (Unaudited) ...... 167

Appendix III - Publication of Performance Data (Unaudited) ...... 168

Contents OpenWorld plc

Administration of the Company

Board of Directors of the Company Company Secretary Mr. James Firn (Chairman) Bradwell Limited Mr. James Beveridge Arthur Cox Building Mr. Peter Gunning Earlsfort Centre, Earlsfort Terrace Mr. Michael Hunt Dublin 2 Mr. Paul McNaughton Ireland Mr. William Roberts Mr. Alan Schoenheimer Advisor, Distributor and U.K. Facilities Agent Mr. David Shubotham Russell Investments Limited Mr. Kenneth Willman Rex House Mr. Neil Jenkins* 10 Regent Street London SW1Y 4PE Audit Committee Members United Kingdom Mr. David Shubotham (Chairman) Mr. Paul McNaughton Money Manager for Euro Credit Mr. William Roberts Kempen Capital Management (UK) Ltd. 41 Melville Street Registered Office Edinburgh E113 3YF 78 Sir John Rogerson’s Quay Scotland Dublin 2 Ireland Money Manager for Europe Focus Equity Hermes Sourcecap Limited Manager Lloyds Chambers Russell Investments Ireland Limited 1 Portsoken Street 78 Sir John Rogerson’s Quay London E1 8HZ Dublin 2 United Kingdom Ireland Money Manager for Global Climate Change Independent Auditors Impax Asset Management Group plc PricewaterhouseCoopers Mezzanine Floor One Spencer Dock Pegasus House North Wall Quay 37-43 Sackville Street Dublin 1 London W1S 3EH Ireland United Kingdom

Legal Advisers Money Manager for Global Dynamic Bond Arthur Cox Strategic Fixed Income, LLC Earlsfort Centre 1001 19th Street North Earlsfort Terrace Suite 1400 Dublin 2 Arlington, VA 22209 Ireland United States of America

Administrator Money Manager for Global Focus Equity State Street Fund Services (Ireland) Limited Thornburg Investment Management Inc. 78 Sir John Rogerson’s Quay 2300 North Ridgetop Road Dublin 2 Santa Fe, NM 87506 Ireland United States of America

Custodian and Trustee Money Manager for Global High Dividend Equity State Street Custodial Services (Ireland) Limited Thornburg Investment Management Inc. 78 Sir John Rogerson’s Quay 2300 North Ridgetop Road Dublin 2 Santa Fe, NM 87506 Ireland United States of America

Promoter Money Manager for Global Listed Infrastructure Frank Russell Company RARE Infrastructure Limited 1301 Second Avenue, 18th Floor Level 18, 1 York Street Seattle, WA 98101 Sydney NSW 2000 United States of America Australia

* Mr. Neil Jenkins was appointed as Director on 22 September 2011. Prior to his appointment he acted as a permanent alternate Director for Mr. Peter Gunning.

2 Administration of the Company OpenWorld plc

Administration of the Company - continued

Money Manager for Global Opportunistic Listed Property Paying and Information Agent in Germany* CB Richard Ellis Global Real Estate Marcard, Stein & Co. AG 666 Third Avenue, 15th Floor Ballindamm 36 New York, NY 10017 20095 Hamburg United States of America Germany

Money Manager for India Focus Equity Paying Agent in Italy Quantum Advisors Inc. Banca Monte dei Paschi di Siena S.p.A. 2520 Douglas Blvd Piazza Salimbeni 3 Roseville, CA 95661-3992 53100 Sienna United States of America Italy

Money Manager for Japan Focus Equity Paying Agent in Italy Lindsell Train Limited Societe Generale Securities Services - SGSS S.p.A. 2 Queen Anne’s Gate Bldgs Via Benigno Crespi 19/A London SW1H 9BP 20159 Milano United Kingdom Italy

Money Manager for US Credit Representative in Italy Logan Circle Partners, L.P. BNP Paribas Securities Services, Succursale di Milano 1717 Arch Street, Suite 1500 Via Ansperto 5 Philadelphia, PA 19103 20123 Milano United States of America Italy

Paying Agent in Austria Paying Agent in Sweden UniCredit Bank Austria AG Nordea Bank AB Lassallestrasse Smalandsgarten 17 1020 Vienna 10571 Stockholm Austria Sweden

Paying Agent and Centralising Agent in France Paying Agent and Representative in Switzerland** Société Générale BNP Paribas Securities Services, Paris 29, boulevard Haussmann succursale de Zurich 75009 Paris Selnaustrasse 16 France 8002 Zürich Switzerland

* The Company’s Memorandum and Articles of Association, the prospectus and the simplified prospectuses, 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. 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 in the “Börsen-Zeitung” for information purposes only and do not constitute an invitation to subscribe for or repurchase the Company’s shares at those prices.

** The Company’s Memorandum and Articles of Association, the prospectus, the simplified prospectus, the unaudited semi-annual reports, as well as the audited annual reports can be obtained free of charge from the representative in Switzerland. Subscription and redemption prices of the shares of each Fund of the Company are published jointly and daily in Switzerland on fundinfo (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.

Administration of the Company 3 OpenWorld plc

Background to the Company

OpenWorld plc (the “Company”) was incorporated on 12 June 2008 under registration number 458665 and operates in Ireland as a public limited company under the Companies Acts, 1963 to 2009. It is authorised by the Central bank of Ireland (the “Central Bank”) and it was first authorised on 19 November 2008.

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 (the “Regulations”).

The Company is organised in the form of an umbrella fund with segregated liability between sub-funds. The umbrella comprises of twenty-nine sub-funds (each a “Fund”, collectively the “Funds”), all of which were approved by the Central Bank on 19 November 2008 except for the following Funds: Global Emerging Small Cap Equity and Global Resources, which were approved on 13 March 2009, Euro Credit and US Credit which were approved on 4 December 2009 and Global Focus Equity which was approved on 9 March 2011.

Global Focus Equity was funded on 15 March 2011.

The following Funds remain unfunded as at 30 June 2011: Asia Focus Equity, Emerging Europe Focus Equity, Emerging Markets Debt, Europe High Dividend Equity, Europe Small Cap Equity, Global Agriculture, Global Emerging Focus Equity, Global Emerging Small Cap Equity, Global Focus Growth Equity, Global Focus Value Equity, Global Resources, Japan Small Cap Equity, Middle East and North Africa Focus Equity, UK Small Cap Equity, US Focus Growth Equity, US Focus Value Equity, US High Dividend Equity and US Micro Cap Equity.

Investment Objectives Please see the Manager’s Report for details of the investment objectives of each particular Fund, which was funded during the year.

Net assets under management for the Company as at 30 June 2011 amounted to EUR 567,124,498 (30 June 2010: EUR 311,940,562).

Funded during Functional Net Assets Net Assets Fund the year ended Currency 30 June 2011 30 June 2010 Euro Credit 30 June 2010 EUR 69,772,543 54,116,719 Europe Focus Equity 30 June 2010 EUR 37,068,288 27,633,375 Global Climate Change 30 June 2010 USD 15,926,490 39,154,554 Global Dynamic Bond 30 June 2010 USD 43,556,641 34,781,563 Global Focus Equity 30 June 2011 USD 208,356,037 - Global High Dividend Equity 30 June 2010 USD 107,104,111 28,228,556 Global Listed Infrastructure 30 June 2009 USD 97,333,377 51,919,081 Global Opportunistic Listed Property 30 June 2010 USD 47,014,143 21,139,533 India Focus Equity 30 June 2010 USD 28,706,826 21,055,293 Japan Focus Equity 30 June 2010 JPY 1,586,255,213 1,615,692,860 US Credit 30 June 2010 USD 99,702,597 67,423,249

4 Background to the Company OpenWorld plc

Directors’ Report

The Directors submit their report together with the audited financial statements for the year ended 30 June 2011.

Directors’ responsibilities The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable Irish law and Generally Accepted Accounting Practice in Ireland including the accounting standards issued by the Accounting Standards Board and published by The Institute of Chartered Accountants in Ireland.

Irish company law requires the Directors to prepare financial statements for each financial year that give a true and fair view of the state of affairs of OpenWorld plc (the “Company”) and of the profit or loss of the Company for that year. In preparing the financial statements, the Directors are required to:

. Select suitable accounting policies and then apply them consistently; . Make judgements and estimates that are reasonable and prudent; and . Prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors confirm that they have complied with the above requirements in preparing the financial statements.

The Directors are responsible for the maintenance and integrity of the corporate and financial information relating to the Company which may be included on Russell Investments Limited’s (the “Distributor”) website. Legislation in Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

In carrying out the above requirements, the Directors have appointed Russell Investments Ireland Limited as manager (the “Manager”) and the Manager has appointed State Street Fund Services (Ireland) Limited to act as administrator (the “Administrator”) of the Company.

Books of account The Directors are responsible for keeping proper books of account which disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements are prepared in accordance with accounting standards generally accepted in Ireland and comply with the Irish Companies Acts, 1963 to 2009, and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (the “Regulations”). They are also responsible for safeguarding the assets of the Company. In this regard they have entrusted the assets of the Company to State Street Custodial Services (Ireland) Limited (the “Custodian and Trustee”) who has been appointed as custodian and trustee to the Company pursuant to the terms of a custodian agreement. The Directors have a general responsibility for taking such steps as are reasonably open to them to prevent and detect fraud and other irregularities. The Directors believe that they have complied with the requirements of section 202 of the Companies Act, 1990 with regard to books of account by employing an experienced administrator with appropriate expertise and by providing adequate resources to the financial function. The books of account of the Company are maintained by State Street Fund Services (Ireland) Limited at 78 Sir John Rogerson’s Quay, Dublin 2, Ireland.

Distribution policy The Company pursues a distribution policy so that it will be able to obtain certification as a “distributing fund” under the United Kingdom Income and Corporation Taxes Act, 1988 for the purposes of U.K. taxation. Each distribution shall be at least such minimal amount (if any) as shall be necessary for the Company to achieve “distributable status” for U.K. tax purposes.

The distribution policy of each Fund is to declare distributions out of net income. Distributions declared by Income Class Shares are paid in cash unless the shareholder chooses to reinvest part or all of the distributions in additional Income Class Shares. Accumulation Class Shares declare a distribution which is then reinvested in the capital of the relevant share class. Net income in relation to Euro Credit, Global Focus Equity and Global High Dividend Equity includes all interest, dividends and other amounts deemed by the Manager to be in the nature of income. Net income in relation to each of the other Funds includes all interest, dividends and other amounts deemed by the Manager to be in the nature of income less the relevant estimated Fund expenses during that dividend period. It should be noted that the declaration of distributions in those Funds which charge fees (including management and performance fees) and expenses to capital rather than income could result in the erosion of capital in those Funds and that increased income will be achieved by foregoing some of the potential for future capital growth.

Review of performance of the business and future developments of the business A detailed review of the performance of the business and future developments is included in the Manager’s Report for each Fund.

Principal risks A detailed analysis of the risks facing each Fund is included in Note 10 to the financial statements.

Directors’ Report 5 OpenWorld plc

Directors’ Report - continued

Results and dividends The results for the year are set out in the Profit and Loss Account for each Fund. Dividends were declared during the year as detailed in Note 15 to the financial statements.

Significant events during the year Significant events during the year are described in Note 16 of the financial statements.

Significant events since the year end There have been no significant events affecting the Company other than those detailed in Note 17 to the financial statements.

Directors The name and nationality of persons who were Directors at any time during the year ended 30 June 2011 are set out below. All Directors are non-executive directors. All acted as Directors for the year.

Mr. James Firn (American) (Chairman) Mr. James Beveridge (British) Mr. Peter Gunning (Australian) Mr. Michael Hunt (Irish and British resident) Mr. Paul McNaughton (Irish) Mr. William Roberts (British and Irish resident) Mr. Alan Schoenheimer (Australian) Mr. David Shubotham (Irish) Mr. Kenneth Willman (American) Mr. Neil Jenkins* (British)

Directors’ and Secretary’s interests None of the Directors or the Company Secretary hold or held any beneficial interest in the shares of the Company during the year. Each of the Directors is a member of the personnel of Russell Investments entities except for Mr. Paul McNaughton, Mr. William Roberts and Mr. David Shubotham who are independent of Russell Investments.

No Director had, at any time during the year or at the year end, a material interest in any contract of significance in relation to the business of the Company.

Independent Auditors The Auditors, PricewaterhouseCoopers, will be re-appointed in accordance with section 160(2) of the Companies Act, 1963.

On behalf of the Board Mr. James Firn Mr. James Beveridge 18 October 2011

* Mr. Neil Jenkins was appointed as Director on 22 September 2011. Prior to his appointment he acted as a permanent alternate Director for Mr. Peter Gunning.

6 Directors’ Report OpenWorld plc

Custodian and Trustee’s Report

We have enquired into the conduct of OpenWorld plc (the “Company”) for the year ended 30 June 2011, in our capacity as Custodian and Trustee to the Company.

This report including the opinion has been prepared for and solely for the shareholders in the Company in accordance with the Central Bank’s UCITS Notice 4, and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown.

Responsibilities of the Custodian and Trustee Our duties and responsibilities are outlined in the Central Bank’s UCITS Notice 4. One of those duties is to enquire into the conduct of the Company in each annual accounting year and report thereon to the shareholders.

Our report shall state whether, in our opinion, the Company has been managed in that year in accordance with the provisions of the Company’s Memorandum and Articles of Association and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2003 (as amended), (the “Regulations”). It is the overall responsibility of the Company to comply with these provisions. If the Company has not so complied, we, as the Custodian and Trustee, must state why this is the case and outline the steps which we have taken to rectify the situation.

Basis of Custodian and Trustee Opinion The Custodian and Trustee conducts such reviews as it, in its reasonable opinion, considers necessary in order to comply with its duties as outlined in UCITS Notice 4 and to ensure that, in all material respects, the Company has been managed (i) in accordance with the limitations imposed on its investment and borrowing powers by the provisions of its constitutional documentation and the appropriate regulations and (ii) otherwise in accordance with the Company’s constitutional documentation and the appropriate regulations.

Opinion In our opinion, the Company has been managed during the year, in all material respects:

(i) in accordance with the limitations imposed on the investment and borrowing powers of the Company by the Memorandum and Articles of Association and by the Regulations and

(ii) otherwise in accordance with the provisions of the Memorandum and Articles of Association and the Regulations.

State Street Custodial Services (Ireland) Limited 78 Sir John Rogerson’s Quay Dublin 2 Ireland

18 October 2011

Custodian and Trustee’s Report 7

Independent Auditors’ Report to the members of OpenWorld plc (the “Company”)

We have audited the Company’s financial statements for the year ended 30 June 2011 which comprise the Company’s Combined Balance Sheet, Combined Profit and Loss Account, Combined Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders, and related notes and, for each of the Funds, the Balance Sheet, Profit and Loss Account, Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders, the Schedule of Investments and the related notes. These financial statements have been prepared under the accounting policies set out herein.

Respective responsibilities of Directors and auditors The Directors’ responsibilities for preparing the Annual Report and the financial statements in accordance with applicable Irish law and the accounting standards issued by the Accounting Standards Board and published by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland) are set out in the Directors’ Report.

Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (U.K. and Ireland). This report, including the opinion, has been prepared for and only for the Company’s members as a body in accordance with Section 193 of the Companies Act, 1990 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

We report to you our opinion as to whether the financial statements give a true and fair view in accordance with Generally Accepted Accounting Practice in Ireland, and are properly prepared in accordance with Irish statute comprising the Companies Acts, 1963 to 2009 and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 (as amended). We state whether we have obtained all the information and explanations we consider necessary for the purposes of our audit, and whether the financial statements are in agreement with the books of account. We also report to you our opinion as to:

. whether the Company has kept proper books of account; and . whether the directors’ report is consistent with the financial statements.

We also report to you if, in our opinion, any information specified by law regarding Directors’ remuneration and Directors’ transactions is not disclosed and where practicable, include such information in our report.

We read the other information contained in the Annual Report, and consider whether it is consistent with the audited financial statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.

Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (U.K. and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion In our opinion the financial statements:

. give a true and fair view in accordance with Generally Accepted Accounting Practice in Ireland, of the state of the Company’s affairs at 30 June 2011 and of its results for the year then ended; and . have been properly prepared in accordance with the requirements of the Companies Acts, 1963 to 2009 and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 (as amended).

We have obtained all the information and explanations we consider necessary for the purposes of our audit. In our opinion proper books of account have been kept by the Company. The Company’s financial statements are in agreement with the books of account.

8 Independent Auditors’ Report

Independent Auditors’ Report to the members of OpenWorld plc (the “Company”) - continued

In our opinion the information given in the Directors’ Report is consistent with the financial statements.

Patricia Johnston for and on behalf of PricewaterhouseCoopers Chartered Accountants and Statutory Auditors Dublin Ireland

27 October 2011

Independent Auditors’ Report 9 OpenWorld plc

Combined Balance Sheet

As at 30 June 2011

Total Total 30 June 2011 30 June 2010 EUR EUR Assets Financial assets at fair value through profit or loss ...... 549,434,233 292,731,182

Cash at bank ...... 15,921,483 8,398,595 Cash held with brokers and counterparties for open derivative positions ...... 2,220,234 . 454,312

Debtors: Receivable for investments sold ...... 9,347,893 1,672,514 Receivable on fund shares issued ...... 1,493,857 34,582,936 Dividends receivable ...... 1,623,194...... 695,578 Interest receivable ...... 2,300,916...... 1,573,579 Other receivables ...... 273,787...... 179,824 582,615,597 340,288,520 Liabilities Financial liabilities at fair value through profit or loss ...... (4,188,867) (987,153)

Creditors – amounts falling due within one year: Cash due to brokers and counterparties for open derivative positions ...... (130,106) ..... - Payable for investments purchased ...... (3,777,780)...... (26,632,151) Payable on fund shares redeemed ...... (6,161,474)...... - Management fees payable ...... (342,305) ...... (154,666) Custodian and Trustee fees payable ...... (4,709) (2,141) Sub-custodian fees payable ...... (46,283) ...... (51,210) Administration fees payable ...... (9,414) .... (4,428) Audit fees payable ...... (230,613...... ) (190,416) Professional fees payable ...... (58,981) ...... (144,949) Performance fees payable ...... (1,213,712) ...... (454,841) Capital gains tax payable ...... - ...... (58,897) Miscellaneous fees payable ...... (87,511) ...... (122,556) (16,251,755) (28,803,408)

Net assets attributable to redeemable participating shareholders (at bid market prices) ...... 566,363,842 ...... 311,485,112

Adjustment from bid market prices to last traded market prices ...... 760,656 ...... 455,450

Net asset value attributable to redeemable participating shareholders (at last traded market prices) ...... 567,124,498...... 311,940,562

On behalf of the Board Mr. James Firn Mr. James Beveridge 18 October 2011

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

10 Combined Balance Sheet OpenWorld plc

Combined Profit and Loss Account

For the year ended 30 June 2011

Total Total 2011 2010 EUR EUR Income Dividends ...... 11,223,968 . 3,490,720 Bond interest ...... 5,579,602 1,638,430 Bank and short term investment interest ...... 2,045...... 1,461 Miscellaneous income ...... 24,010...... 3,698 16,829,625 5,134,309

Net gain (loss) on investment activities ...... 52,068,964...... (7,608,502)

Total investment income (expense) ...... 68,898,589...... (2,474,193)

Expenses Management fees ...... (3,043,679)...... (1,045,276) Custodian and Trustee fees ...... (53,108) ...... (14,038) Sub-custodian fees ...... (367,731)...... (79,235) Administration and transfer agency fees ...... (237,298)...... (58,111) Audit fees ...... (241,855) . (172,731) Professional fees ...... (335,047)...... (131,611) Performance fees ...... (1,32...... 4,702) (404,371) Miscellaneous fees ...... (365,821)...... (175,393) Total operating expenses ...... (5,969,241) ...... (2,080,766)

Net income (expense) ...... 62,929,348...... (4,554,959)

Finance costs Distributions ...... (7,889,306)...... (759,382) Interest expense ...... (3,060) (6,226) Profit (loss) for the financial year before taxation ...... 55,036,982 (5,320,567)

Taxation Capital gains tax ...... (36,351)...... (82,364) Withholding tax ...... (1,654,508)...... (507,411) Profit (loss) for the financial year after taxation ...... 53,346,123 (5,910,342)

Movement in adjustment from bid market prices to last traded market prices ...... 305,206...... 400,920

Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 53,651,329...... (5,509,422)

All amounts arose solely from continuing operations, with the exception of Japan Focus Equity. There are no recognised gains or losses other than those dealt within the Profit and Loss Account.

On behalf of the Board Mr. James Firn Mr. James Beveridge 18 October 2011

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

Combined Profit and Loss Account 11 OpenWorld plc

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

For the year ended 30 June 2011

Total Total 2011 2010 EUR EUR Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 53,651,329...... (5,509,422)

Share transactions Net increase (decrease) in net assets resulting from redeemable participating share transactions ...... 245,986,945...... 269,929,306 Reinvestment of deemed distributions on accumulation shares ...... 6,530,930...... 669,302

Total net increase (decrease) in net assets attributable to redeemable participating shareholders ...... 306,169,204 ...... 265,089,186

Currency translation (Note 2) ...... (50,985,268) .... 26,473,381

Net assets attributable to redeemable participating shareholders Beginning of year ...... 311,940...... ,562 20,377,995

End of year ...... 567,124,498...... 311,940,562

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

12 Combined Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders OpenWorld plc Euro Credit

Manager’s Report

Money Manager Kempen Capital Management (UK) Ltd.

Investment Objective The Fund aims to provide long-term capital appreciation from a portfolio comprised predominantly of corporate debt securities (including corporate bonds) and other credit securities and instruments that are denominated in Euro.

Fund Performance During the year ended 30 June 2011, the Fund returned 3.8 per cent on a gross of fee basis (3.0 per cent on a net of fees basis), versus a 2.4 per cent for the benchmark* (All returns are in EUR).

Market Comment July 2010 proved to be a turning point after the poor market performances in the second quarter. Better than expected corporate results, abating concerns about the sovereign debt crisis and the publication of the results of the stress test for European banks were the main reasons for the turnaround. In August 2010, investor sentiment was hit hard by a series of disappointing macroeconomic indicators. In particular the rapid slowdown of the U.S. economy reignited the fears for a double dip recession. These fears diminished somewhat in September 2010 as expectations of a new round of monetary stimulus “QEII” coupled with stronger economic data supported riskier assets. In the third quarter, credit spreads of the Barclays Capital Euro Aggregate Credit Index tightened by 27 basis points to 124 basis points over the swap rate.

QEII, sovereign debt risk, bank regulation and an improving economy set the scene for a volatile fourth quarter of 2010. Financial markets started on a positive note in an October dominated by the prospect of continued Federal Reserve intervention continuing the positive trend from September. The expected liquidity injection coupled with accommodative interest rates, encouraging corporate earnings growth and growth in emerging markets economic expansion supported the investor’s moods. Conversely widening yield spreads on peripheral European sovereign debt continued to linger and swayed the general sentiment when it became clear that Ireland needed fresh capital injections. The mood turned once again in December on better than expected economic news coming out of the emerging as well as the developed world.

The resilience of the global recovery was tried and tested in the first quarter as the sovereign debt crisis, developments in the Middle East, rising commodities prices along with the tragic events in Japan, filled the headlines. In addition, recent events in Portugal highlight the risk of further contagion in the European sovereign debt crisis, and as a consequence Spanish sovereign spreads in particular are being monitored closely.

The second quarter of the year was again positive for credits, albeit more challenging than the first quarter. In spite of the European Central Bank (the “ECB”) rate hike and Portugal’s official request for a bailout, April was a positive month for credits. As the risk-off sentiment returned in May, credit spreads widened slightly, credits underperformed government bonds but the return remained positive. Volatility continued to increase in June caused by renewed uncertainty concerning the sovereign debt crisis and a mixed menu of macro-economic news.

General Comment on the Money Manager/Performance Performance was roughly flat in the third quarter of 2010. The Fund’s performance can be attributed to several factors. The most important factor was the Fund’s overweight and positioning in subordinated financials. The overweight in Lower Tier II’s from Bank of America and Royal Bank of Scotland as well as Tier I’s from SocGen, UniCredito and Deutsche Bank contributed the third quarter performance, as did the Fund’s average overweight in the insurance sector. The Fund also had strong performance in Telecoms. The reduced sovereign debt fears supported the performance of the bonds of companies like Telefonica and OTE. However the biggest contribution to the strong performance in Telecoms was the Fund’s positioning in America Movil and SinTel Optus. All other sectors performed relatively in line, with in general positive, albeit lower, contributions to performance. The sector that had the biggest negative contribution to performance was the ABS sector. Due to the Fund’s positioning in high quality ABS with relatively short weighted average life’s, these positions did not perform as well in an environment of spread tightening.

Performance was again solid in the fourth quarter of 2010. The outperformance can be attributed to a range of factors. Credit spreads widened by 11 basis points over the quarter. Spreads had tightened in October as banking and insurance spreads came down, the Fund’s overweight positions in lower Tier II bonds from Barclays and Lloyds attributed to the October outperformance. Conversely spreads widened again in November again driven by bank spreads spurred on by the crisis in the Irish banking sector, hurting subordinated loans in particular. Spanish and Portuguese holdings including EDP and Gas Natural also contributed negatively on sovereign debt contagion fears. The Fund’s exposure to the financial sector was reduced in November. Credit markets recovered somewhat in the last month of the year as credit spreads tightened marginally. Cyclical sectors were showing good performance while banks were flat. The Money Manager’s focus on short dated and high quality ABS was rewarded over the quarter, as was the Money Manager’s high conviction overweights in the corporate sectors including Old Mutual, Lafarge, CRH, Pernod, BAA, BP and Carlsberg.

Euro Credit 13 OpenWorld plc Euro Credit

Manager’s Report - continued

The Money Manager’s positioning was fairly cautious from the onset of the first quarter of 2011, being beta underweight banks, utilities, telecommunications and cyclicals. The Money Manager took on more risk in February caused by a high level of attractive new issuance, but maintained the beta underweight in banks. In March, the Money Manager went back to a beta underweight at the portfolio level reducing its banks and insurance exposure. The Money Manager further reduced its exposure towards Portugal Telecom, EDP and OTE during the quarter and continues to favor lower Tier II and covered bonds over senior bank exposure. The Fund outperformed its benchmark during the first quarter. Performance was largely driven by individual credit selection, most notably within banks, financial services and the utilities space. The excess performance was fairly evenly spread during the first three months of the year. Overweights to Dangas (perp.), BPCEGP, Eon, Eureko, RBS and Van Lanchot were amongst the largest contributors to performance over the quarter, whereas underweight exposures towards Abertis and Hungary along with overweight exposures in Brisa and OTE along with the ABS allocation all detracted from quarter one performance.

The Money Manager de-risked the portfolio slightly over the second quarter in terms of tracking error. From a top down perspective, the Money Manager remains overweight industrials and insurance and is now underweight banks. From a country perspective, the Money Manager continues to reduce its exposure to the eurozone periphery including Italy and Spain due to the ongoing sovereign debt crisis. The Money Manager sees the sovereign theme as a big risk for the market and wants to be conservative, albeit the Money Manager is interpreting the current weakness in the markets as a soft patch rather than the beginning of a long term decline. And as such the Money Manager is buying into weakness in the industrial space. The Fund participated in and benefited from a few debut or irregular issues tapping the market. The Fund participated in new issues from Valeo, Wurth, Fonciere Lyonnaise, Brambles and Gerresheimer. The Fund performance was roughly flat for the quarter, and performance was also very balanced across sectors. The biggest contribution to performance came from the industrial and insurance sector. Within industrials the Money Manager’s allocations in the issues from Gerresheimer and Brambles supported performance. Within the insurance sector, the Fund benefited from the tender on the lower Tier II bond of Old Mutual. The banking sector exposure was fairly neutral, the Money Manager benefited from its underweight Credit Agricole and Santander, but suffered from the overweights in RBS and Barclays lower Tier II.

Outlook The Money Manager remains conservative in its positioning in the portfolio, for the moment assuming that the weakness in macro-economic data is of a temporary nature. Germany continues to act as a growth engine for Europe and much of the economic data coming out of the U.S. can be explained by external factors including commodities inflation and the repercussions of the Japanese tragedy. The sovereign debt crisis remains a key concern however, and unless there is a coordinated approach to solve the crisis the Money Manager will remain underweight the Eurozone periphery.

Past performance is no indication of current or future performance. The reference to a benchmark is used for illustrative purposes only.

* Benchmark Source: Barclays Capital Euro Aggregate Credit Index

Russell Investments Ireland Limited July 2011

14 Euro Credit OpenWorld plc Euro Credit

Balance Sheet

As at 30 June 2011

30 June 2011 30 June 2010 EUR EUR Assets Financial assets at fair value through profit or loss (Note 1) ...... 69,096,871 48,602,020

Cash at bank (Note 4) ...... 2,327,803...... 788,429 Cash held with brokers and counterparties for open derivative positions (Note 4) ...... 11,300 11,930

Debtors: Receivable for investments sold ...... 305,072 217,052 Receivable on fund shares issued ...... - 14,597,787 Interest receivable ...... 1,212,011...... 658,316 Other receivables ...... 26,708...... - 72,979,765 64,875,534 Liabilities Financial liabilities at fair value through profit or loss (Note 1) ...... (2,176,795) (990)

Creditors – amounts falling due within one year: Payable for investments purchased ...... (1,101,111)...... (10,796,101) Management fees payable ...... (30,752) ...... (15,694) Custodian and Trustee fees payable ...... (595) (295) Sub-custodian fees payable ...... (2,880) ..... (5,528) Administration fees payable ...... (1,190) .... (625) Professional fees payable ...... (5,942) ...... (14,592) Audit fees payable ...... (27,830...... ) (22,500) Miscellaneous fees payable ...... (1,041) ..... (6,817) (3,348,136) (10,863,142)

Net assets attributable to redeemable participating shareholders (at bid market prices) ...... 69,631,629 ...... 54,012,392

Adjustment from bid market prices to last traded market prices (Note 5) ...... 140,914 104,327

Net asset value attributable to redeemable participating shareholders (at last traded market prices) ...... 69,772,543...... 54,116,719

The accompanying notes are an integral part of the financial statements

Euro Credit 15 OpenWorld plc Euro Credit

Profit and Loss Account

For the year ended 30 June 2011

2011 2010* EUR EUR Income Dividends ...... - . 403 Bond interest ...... 2,296,622 606,006 Bank and short term investment interest ...... 118 280 2,296,740 606,689

Net gain (loss) on investment activities (Note 8) ...... (5,458,133) ...... 3,072,060

Total investment income (expense) ...... (3,161,393)...... 3,678,749

Expenses Management fees (Note 3) ...... (354,579) ...... (95,855) Custodian and Trustee fees (Note 3) ...... (8,056) (1,942) Sub-custodian fees (Note 3) ...... (23,125) ..... (6,419) Administration and transfer agency fees (Note 3) ...... (30,113) ... (7,185) Audit fees (Note 3) ...... (27,830)...... (22,500) Professional fees ...... (45,141)...... (14,593) Miscellaneous fees ...... (52,163)...... (14,824) Total operating expenses ...... (541,007)...... (163,318)

Net income (expense) ...... (3,702,400)...... 3,515,431

Finance costs Distributions (Note 15) ...... (2,636,204)...... (43,033) Interest expense ...... (540) (305) Profit (loss) for the financial year/period ...... (6,339,144)...... 3,472,093

Movement in adjustment from bid market prices to last traded market prices (Note 5) ...... 36,587 ...... 104,327

Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... (6,302,557)...... 3,576,420

All amounts arose solely from continuing operations. There are no gains or losses other than those dealt within the Profit and Loss Account.

* For the period from 11 December 2009 (launch date) to 30 June 2010.

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

16 Euro Credit OpenWorld plc Euro Credit

Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders

For the year ended 30 June 2011

2011 2010* EUR EUR Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... (6,302,557)...... 3,576,420

Share transactions Net increase (decrease) in net assets resulting from redeemable participating share transactions (Note 5) ...... 19,322,224...... 50,497,266 Reinvestment of deemed distributions on accumulation shares (Note 15) ...... 2,636,157 43,033

Total net increase (decrease) in net assets attributable to redeemable participating shareholders ...... 15,655,824 54,116,719

Net assets attributable to redeemable participating shareholders Beginning of year/period ...... 54,116,719 ...... -

End of year/period ...... 69,772,543...... 54,116,719

* For the period from 11 December 2009 (launch date) to 30 June 2010.

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

Euro Credit 17 OpenWorld plc Euro Credit

Schedule of Investments

30 June 2011

Principal Fair Value Fund Principal Fair Value Fund Amount EUR % Amount EUR % Transferable Securities (98.95%) France Government Bond OAT Long Term Bonds and Notes (98.95%) 1,500,000 3.250% due 25/04/16 ...... 1,539,766 2.21 Australia (1.05%) National Australia Bank Ltd 350,000 3.500% due 25/04/26 ...... 335,113 0.48 EUR 700,000 4.750% due 15/07/16 ...... 731,170 1.05 France Telecom 200,000 5.000% due 22/01/14 ...... 211,652 0.30 Belgium (0.23%) 200,000 3.875% due 09/04/20 ...... 196,285 0.28 Solvay GDF Suez 150,000 5.000% due 12/06/15 ...... 159,535 0.23 200,000 5.000% due 23/02/15 ...... 213,380 0.31 400,000 6.375% due 18/01/21 ...... 473,244 0.68 Bermuda (0.32%) Gecina Bacardi Ltd 400,000 4.250% due 03/02/16 ...... 395,006 0.57 200,000 7.750% due 09/04/14 ...... 223,646 0.32 Lafarge 425,000 5.375% due 29/11/18 ...... 422,545 0.61

Pernod-Ricard Canada (1.80%) 350,000 7.000% due 15/01/15 ...... 383,575 0.55 Province of Ontario Canada RCI Banque SA 300,000 4.750% due 23/04/19 ...... 325,376 0.47 Province of Quebec Canada 400,000 4.000% due 11/07/13 ...... 403,742 0.58 700,000 3.375% due 20/06/16 ...... 713,035 1.02 220,000 3.750% due 07/07/14 ...... 219,039 0.31 Xstrata Canada Financial RTE EDF Transport SA Corp 100,000 3.875% due 28/06/22 ...... 96,633 0.14 200,000 6.250% due 27/05/15 ...... 216,014 0.31 Societe Fonciere 1,254,425 1.80 Lyonnaise 700,000 4.625% due 25/05/16 ...... 701,307 1.00 Cayman Islands (0.30%) Societe Generale Hutchison Whampoa Finance 09 250,000 3.125% due 21/09/17 ...... 234,833 0.34 200,000 4.750% due 14/11/16 ...... 205,695 0.30 200,000 9.375% due 29/09/49 ...... 213,084 0.31 Thales 300,000 2.750% due 19/10/16 ...... 287,393 0.41 Czech Republic (0.47%) Veolia Environnement Czech Republic International 150,000 5.125% due 24/05/22 ...... 155,724 0.22 350,000 3.625% due 14/04/21 ...... 330,285 0.47 8,656,860 12.41

Germany (2.71%) Denmark (1.82%) Commerzbank AG Carlsberg Breweries 425,000 6.375% due 22/03/19 ...... 402,665 0.58 300,000 6.000% due 28/05/14 ...... 323,895 0.46 Deutsche Bank AG 400,000 3.375% due 13/10/17 ...... 387,515 0.55 300,000 3.625% due 09/03/17 ...... 294,045 0.42 Driver One GmbH Merck Financial Services GmbH 140,003 1.492% due 21/10/15 ...... 138,734 0.20 500,000 4.500% due 24/03/20 ...... 506,598 0.73 122,209 2.952% due 21/05/16 ...... 122,358 0.18 Muenchener 300,000 2.769% due 21/04/17 ...... 300,018 0.43 Rueckversicherungs 1,272,520 1.82 300,000 6.000% due 26/05/41 ...... 289,588 0.41 Fra nce (12.41%) 250,000 5.767% due 29/06/49 ...... 228,865 0.33 Banque PSA Finance ThyssenKrupp 500,000 3.500% due 17/01/14 ...... 498,523 0.71 150,000 8.000% due 18/06/14 ...... 167,790 0.24 BPCE 1,889,551 2.71 250,000 12.500% due 29/09/49 ...... 290,420 0.42 Ireland (3.98%) Casino Guichard Perrachon Caterpillar International SA Finance 600,000 5.500% due 30/01/15 ...... 636,938 0.91 400,000 2.750% due 06/06/14 ...... 401,428 0.58 300,000 4.726% due 26/05/21 ...... 293,378 0.42 Cloverie Credit Logement SA 300,000 7.500% due 24/07/39 ...... 323,289 0.46 200,000 2.627% due 31/12/49 ...... 161,916 0.23 Fastnet Securities EDF SA 161,708 1.852% due 10/03/50 ...... 158,474 0.23 100,000 4.625% due 26/04/30 ...... 92,896 0.13 FGA Capital Ireland Eutelsat 250,000 4.000% due 28/03/13 ...... 250,834 0.36 200,000 4.125% due 27/03/17 ...... 200,468 0.29 The accompanying notes are an integral part of the financial statements.

18 Euro Credit OpenWorld plc Euro Credit

Schedule of Investments - continued

30 June 2011

Principal Fair Value Fund Principal Fair Value Fund Amount EUR % Amount EUR % GE Capital European Fiat Industrial Finance Funding Europe 550,000 4.625% due 04/07/14 ...... 574,759 0.82 150,000 6.250% due 09/03/18 ...... 149,480 0.21 Finmeccanica Finance 500,000 3.750% due 04/04/16 ...... 501,435 0.72 300,000 5.250% due 21/01/22 ...... 297,066 0.43 450,000 5.375% due 23/01/20 ...... 476,941 0.68 Gaz Capital SA for Gazprom 100,000 4.625% due 22/02/27 ...... 92,138 0.13 200,000 8.125% due 04/02/15 ...... 226,637 0.32 2,779,298 3.98 Hannover Finance Luxembourg Italy (4.95%) 200,000 5.750% due 26/02/24 ...... 202,500 0.29 Edison SES SA 450,000 3.875% due 10/11/17 ...... 426,929 0.61 Enel SpA 200,000 4.375% due 21/10/13 ...... 206,535 0.30 300,000 5.250% due 20/05/24 ...... 302,529 0.43 300,000 4.750% due 11/03/21 ...... 302,033 0.43 ENI Telecom Italia Finance 400,000 3.500% due 29/01/18 ...... 389,702 0.56 125,000 7.750% due 24/01/33 ...... 131,701 0.19 Intesa Sanpaolo SpA 11,849,598 16.98 750,000 3.250% due 28/04/17 ...... 704,486 1.01 Netherlands (15.22%) 200,000 5.150% due 16/07/20 ...... 194,848 0.28 ABN Amro Bank 250,000 8.047% due 29/06/49 ...... 249,910 0.36 300,000 2.277% due 15/01/13 ...... 301,740 0.43 200,000 8.375% due 29/10/49 ...... 202,166 0.29 Adecco International Financial Services Telecom Italia 280,000 4.750% due 13/04/18 ...... 282,881 0.40 250,000 1.962% due 19/07/13 ...... 248,215 0.36 AKZO Nobel 200,000 5.125% due 25/01/16 ...... 200,660 0.29 300,000 7.250% due 27/03/15 ...... 340,442 0.49 UniCredit SpA Alliander 125,000 4.875% due 29/11/49 ...... 123,406 0.18 400,000 5.250% due 14/01/14 ...... 412,952 0.59 Allianz Finance II 125,000 6.125% due 19/04/21 ...... 121,267 0.17 200,000 6.125% due 31/05/22 ...... 202,086 0.29 3,453,664 4.95 100,000 5.750% due 08/07/41 ...... 95,723 0.14 Jersey, Channel Islands (2.35%) 200,000 4.375% due 29/12/49 ...... 174,499 0.25 ASIF III Jersey Ltd Arena 231,000 4.750% due 11/09/13 ...... 236,275 0.34 500,000 2.415% due 17/02/37 ...... 489,193 0.70 BAA Funding British American Tobacco 200,000 3.975% due 15/02/12 ...... 201,656 0.29 Holdings The Netherlands 475,000 4.125% due 12/10/16 ...... 473,465 0.68 300,000 4.000% due 07/07/20 ...... 297,387 0.43 Chester Asset Receivables Cooperatieve Centrale Dealings Raiffeisen-Boerenleenbank 250,000 2.177% due 15/09/13 ...... 249,854 0.36 BA/Netherlands HSBC Capital Funding L 300,000 4.250% due 22/04/14 ...... 312,104 0.45 150,000 8.030% due 29/12/49 ...... 154,152 0.22 CRH Finance Skye CLO I Limited 300,000 7.375% due 28/05/14 ...... 331,127 0.47 300,000 2.674% due 17/03/19 ...... 289,500 0.41 Deutsche Bahn Finance BV Volkswagen Car Lease 150,000 3.500% due 10/06/20 ...... 148,665 0.21 37,294 1.482% due 21/10/13 ...... 37,231 0.05 Deutsche Telekom International Finance BV 1,642,133 2.35 200,000 4.375% due 02/06/14 ...... 208,221 0.30 Luxembourg (16.98%) 500,000 4.250% due 13/07/22 ...... 485,702 0.70 AON Financial Services E.ON International Finance Luxembourg BV 300,000 6.250% due 01/07/14 ...... 320,053 0.46 300,000 5.500% due 19/01/16 ...... 326,904 0.47 European Investment Bank EDP Finance BV 3,200,000 3.125% due 15/04/14 ...... 3,277,236 4.70 150,000 5.875% due 01/02/16 ...... 141,315 0.20 2,000,000 2.625% due 15/03/16 ...... 1,988,277 2.85 Eureko 300,000 5.125% due 29/06/49 ...... 254,142 0.36 1,150,000 3.000% due 28/09/22 ...... 1,077,023 1.54 Fortis Bank Nederland NV 500,000 4.000% due 15/10/37 ...... 480,351 0.69 500,000 2.285% due 03/02/12 ...... 501,860 0.72 European Union Holland Euro-Denominated 1,500,000 2.375% due 22/09/17 ...... 1,438,740 2.06 Mortgage Backed Series 500,000 1.826% due 18/05/38 ...... 476,943 0.68 1,750,000 3.375% due 10/05/19 ...... 1,751,966 2.51

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

Euro Credit 19 OpenWorld plc Euro Credit

Schedule of Investments - continued

30 June 2011

Principal Fair Value Fund Principal Fair Value Fund Amount EUR % Amount EUR % ING Bank NV Telefonica Emisiones SAU 250,000 6.125% due 29/05/23 ...... 257,053 0.37 500,000 3.258% due 02/06/15 ...... 509,955 0.73 ING Groep NV 250,000 4.750% due 31/05/17 ...... 255,583 0.37 600,000 3.661% due 18/09/17 ...... 568,382 0.82 KBC Internationale 2,696,346 3.86 Financieringsmaatschappij Sweden (4.03%) NV 200,000 4.500% due 17/09/14 ...... 201,255 0.29 Nordea Bank AB Koninklijke KPN NV 400,000 3.750% due 24/02/17 ...... 398,600 0.57 100,000 5.625% due 30/09/24 ...... 104,555 0.15 200,000 4.500% due 26/03/20 ...... 191,024 0.27 Leo-Mesdag 250,000 4.000% due 29/06/20 ...... 245,423 0.35 200,000 1.623% due 29/08/19 ...... 174,848 0.25 Securitas Linde Finance 100,000 6.500% due 02/04/13 ...... 106,188 0.15 300,000 7.375% due 14/07/66 ...... 330,589 0.47 Skandinaviska Enskilda Netherlands, Kingdom of Banken AB 1,000,000 1.000% due 15/01/14 ...... 979,297 1.40 500,000 4.375% due 29/05/12 ...... 509,200 0.73 700,000 4.500% due 15/07/17 ...... 764,502 1.10 Svenska Cellulosa Rabobank Nederland 700,000 3.625% due 26/08/16 ...... 701,482 1.01 NV Svenska Handelsbanken 600,000 3.375% due 21/04/17 ...... 589,994 0.85 500,000 3.750% due 24/02/17 ...... 501,674 0.72 Repsol International Finance Volvo Treasury BV 150,000 7.875% due 01/10/12 ...... 159,815 0.23 300,000 4.625% due 08/10/14 ...... 311,266 0.45 2,813,406 4.03 SNS Bank NV Switzerland (2.55%) 575,000 3.625% due 18/07/13 ...... 567,897 0.81 Credit Suisse, London Vesteda Residential 400,000 4.750% due 05/08/19 ...... 410,224 0.59 Funding UBS AG, London 300,000 1.468% due 20/07/17 ...... 292,500 0.42 400,000 4.625% due 06/07/12 ...... 409,106 0.59 300,000 1.538% due 20/07/17 ...... 292,903 0.42 400,000 3.500% due 15/07/15 ...... 400,740 0.57 10,616,582 15.22 500,000 6.000% due 18/04/18 ...... 555,999 0.80 Norway (0.45%) 1,776,069 2.55 DnB NOR Bank ASA 300,000 4.500% due 29/05/14 ...... 313,962 0.45 United Kingdom (10.75%) Anglo American Capital Plc

100,000 4.375% due 02/12/16 ...... 101,678 0.15 Poland (2.80%) Aviva Poland Government 300,000 5.750% due 14/11/21 ...... 300,000 0.43 International Bond Bank of Scotland 900,000 4.500% due 05/02/13 ...... 927,233 1.33 400,000 5.625% due 23/05/13 ...... 414,255 0.59 1,060,000 4.200% due 15/04/20 ...... 1,026,648 1.47 Barclays Bank Plc 1,953,881 2.80 300,000 5.250% due 27/05/14 ...... 315,242 0.45 Spain (3.86%) 400,000 4.000% due 20/01/17 ...... 393,979 0.57 Banco Bilbao Vizcaya 515,000 6.625% due 30/03/22 ...... 514,150 0.74 Argentaria BP Capital Markets 300,000 4.250% due 30/03/15 ...... 296,233 0.43 400,000 3.830% due 06/10/17 ...... 400,688 0.57 Banco Espanol de Brambles Finance Credito 400,000 4.625% due 20/04/18 ...... 408,034 0.59 400,000 3.625% due 07/09/15 ...... 379,823 0.54 Eclipse Gas Natural Capital Markets 145,989 1.550% due 10/10/15 ...... 116,057 0.17 SA HSBC Holdings 300,000 5.250% due 09/07/14 ...... 307,935 0.44 300,000 6.000% due 10/06/19 ...... 315,732 0.45 Imperial Tobacco Finance 150,000 4.500% due 27/01/20 ...... 135,735 0.19 Plc Portugal Telecom 500,000 8.375% due 17/02/16 ...... 591,342 0.85 International Finance ING Verzekeringen 200,000 6.000% due 30/04/13 ...... 195,296 0.28 300,000 1.669% due 18/09/13 ...... 291,366 0.42 Red Electrica Financiaciones Unipersonal Lloyds TSB Bank 300,000 4.750% due 16/02/18 ...... 302,987 0.43 200,000 5.375% due 03/09/19 ...... 196,370 0.28

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

20 Euro Credit OpenWorld plc Euro Credit

Schedule of Investments - continued

30 June 2011

Principal Fair Value Fund Principal Fair Value Fund Amount EUR % Amount EUR % 100,000 6.500% due 24/03/20 ...... 94,660 0.14 JPMorgan Chase & Co Old Mutual Plc 200,000 3.875% due 23/09/20 ...... 189,388 0.27 350,000 4.500% due 18/01/17 ...... 348,240 0.50 Morgan Stanley Permanent Financing 300,000 4.375% due 12/10/16 ...... 293,095 0.42 250,000 1.602% due 10/06/42 ...... 249,190 0.36 200,000 5.375% due 10/08/20 ...... 195,991 0.28 Prudential Plc Pemex Project Funding 350,000 5.750% due 19/12/21 ...... 350,900 0.50 Master Trust Rexam 200,000 6.375% due 05/08/16 ...... 216,533 0.31 200,000 4.375% due 15/03/13 ...... 204,668 0.29 Pfizer Royal Bank of Scotland Plc 400,000 4.750% due 03/06/16 ...... 426,248 0.61 200,000 1.611% due 30/01/17 ...... 174,158 0.25 Philip Morris International 225,000 6.934% due 09/04/18 ...... 222,640 0.32 300,000 5.875% due 04/09/15 ...... 331,419 0.48 SLM 650,000 5.375% due 30/09/19 ...... 637,745 0.91 250,000 3.125% due 17/09/12 ...... 247,293 0.35 Standard Chartered Plc Swiss Re Treasury US 400,000 3.625% due 15/12/15 ...... 400,358 0.57 350,000 6.000% due 18/05/12 ...... 360,193 0.52 Standard Life Plc Toyota Motor Credit Corp 250,000 6.375% due 12/07/22 ...... 251,345 0.36 300,000 4.250% due 02/05/12 ...... 304,389 0.44 Vodafone Group Plc 200,000 4.650% due 20/01/22 ...... 204,644 0.29 6,468,155 9.27 7,497,441 10.75 Virgin Islands, British (0.65%) Global Switch Holdings United States (9.27%) 450,000 5.500% due 18/04/18 ...... 456,570 0.65 American International Group Total Long Term Bonds 200,000 4.375% due 26/04/16 ...... 191,710 0.27 and Notes ...... 69,040,792 98.95 Bank of America Corp Total Transferable Securities ...... 69,040,792 98.95 450,000 4.750% due 03/04/17 ...... 445,139 0.64 Number 200,000 4.750% due 23/05/17 ...... 184,000 0.26 of Shares 100,000 4.625% due 07/08/17 ...... 97,774 0.14 Collective Investment Schemes (0.00%) 500,000 4.000% due 28/03/18 ...... 459,379 0.66 Ireland (0.00%) BMW US Capital LLC Russell Investment Company 300,000 6.375% due 23/07/12 ...... 312,555 0.45 III plc Citigroup Inc The Euro Liquidity Fund - 200,000 6.400% due 27/03/13 ...... 209,693 0.30 1 Class A Shares ...... 121 0.00 250,000 4.750% due 10/02/19 ...... 235,446 0.34 Total Collective Investment Schemes ...... 121 0.00 450,000 5.000% due 02/08/19 ...... 448,098 0.64 Total Investments 100,000 4.250% due 25/02/30 ...... 79,214 0.11 excluding Financial Goldman Sachs Group Inc Derivative Instruments ..... 69,040,913 98.95 700,000 4.750% due 28/01/14 ...... 716,577 1.03 525,000 4.500% due 09/05/16 ...... 524,021 0.75

Financial Derivative Instruments ((3.04)%)

Open Futures Contracts (0.01%)

Notional Average Unrealised Amount Cost Price Gain (Loss) Fund EUR EUR EUR % 6,443,400 107.39 60 of German Euro Schatz Futures Long Futures Contracts Expiring September 2011 ...... 9,900 0.01 (874,920) (124.99) 7 of German Euro Bund Futures Short Futures Contracts Expiring September 2011 ...... (3,440) (0.00) Unrealised gain on open futures contracts ...... 9,900 0.01 Unrealised loss on open futures contracts ...... (3,440) (0.00) Net unrealised gain (loss) on open futures contracts ...... 6,460 0.01 The accompanying notes are an integral part of the financial statements.

Euro Credit 21 OpenWorld plc Euro Credit

Schedule of Investments - continued

30 June 2011

Open Forward Foreign Currency Exchange Contracts ((3.05)%)

Unrealised Settlement Amount Amount Gain (Loss) Fund Date Bought Sold EUR % 07/07/2011 EUR 1,746,800 GBP 1,549,081 31,385 0.04 07/07/2011 EUR 458,000 GBP 400,341 14,673 0.02 07/07/2011 GBP 9,049,805 EUR 10,364,797 (343,261) (0.49) 07/07/2011 GBP 9,049,504 EUR 10,364,797 (343,593) (0.49) 07/07/2011 GBP 9,049,784 EUR 10,364,797 (343,284) (0.49) 07/07/2011 GBP 9,049,712 EUR 10,364,797 (343,364) (0.49) 07/07/2011 GBP 9,049,605 EUR 10,364,798 (343,483) (0.49) 07/07/2011 GBP 1,944,461 EUR 2,227,000 (73,751) (0.11) 07/07/2011 GBP 1,066,030 EUR 1,219,900 (39,404) (0.06) 07/07/2011 GBP 9,049,846 EUR 10,364,797 (343,215) (0.49) Unrealised gain on open forward foreign currency exchange contracts ...... 46,058 0.06 Unrealised loss on open forward foreign currency exchange contracts ...... (2,173,355) (3.11) Net unrealised gain (loss) on open forward foreign currency exchange contracts ...... (2,127,297) (3.05) Total Financial Derivative Instruments ...... (2,120,837) (3.04)

Total Financial Assets at Fair Value through Profit or Loss ...... 69,096,871 99.02 Total Financial Liabilities at Fair Value through Profit or Loss ...... (2,176,795) (3.11)

Fair Value Fund EUR % Net Financial Assets at Fair Value through Profit or Loss (95.91%) ...... 66,920,076 95.91 Other Net Assets (3.89%) ...... 2,711,553 .... 3.89 Adjustment from Bid Market Prices to Last Traded Market Prices (0.20%) ...... 140,914 ...... 0.20 Net Assets (100.00%) ...... 69,772,543...... 100.00

% of Analysis of total assets (unaudited) total assets Transferable securities admitted to an official stock exchange listing or traded on a regulated market ...... 94.61 Exchange traded financial derivative instruments ...... 0.01 Over the counter financial derivative instruments ...... 0.06 Other assets ...... 5.32 100.00

The broker for the open futures contracts is Royal Bank of Scotland.

The counterparties for the open forward foreign currency exchange contracts are:

BNP Paribas Société Generale Brown Brothers Harriman State Street Bank Citibank UBS JP Morgan Chase Bank Westpac Banking Corporation Royal Bank of Scotland

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

22 Euro Credit OpenWorld plc Euro Credit

Statement of Changes in Composition of Portfolio (Unaudited)

Listed below are the 20 largest cumulative investment purchases and sales during the year ended 30 June 2011

Acquisition Cost Disposal Proceeds Portfolio Securities EUR Portfolio Securities EUR European Investment Bank European Investment Bank 3.125% due 15/04/2014 3,924,856 3.625% due 15/10/2013 (4,120,511) 3.625% due 15/10/2013 2,987,523 Bundesrepublik Deutschland Bundesrepublik Deutschland 3.750% due 04/01/2015 (3,692,592) 3.750% due 04/01/2015 2,604,212 European Investment Bank European Investment Bank 3.500% due 15/04/2016 (2,197,805) 2.625% due 15/03/2016 1,979,635 France, Government of European Union 4.250% due 25/10/2023 (1,975,896) 3.375% due 10/05/2019 1,785,473 Netherlands, Kingdom of France, Government of 5.000% due 15/07/2012 (1,718,994) 3.250% due 25/04/2016 1,542,180 GE Capital European Funding 4.250% due 25/10/2023 1,533,959 5.250% due 31/01/2013 (1,062,885) European Union Bundesrepublik Deutschland 2.375% due 22/09/2017 1,437,900 3.500% due 04/01/2016 (1,060,750) European Investment Bank Enel SpA 3.000% due 28/09/2022 1,103,163 5.250% due 14/01/2015 (847,933) Netherlands, Kingdom of Corio 5.000% due 15/07/2012 1,082,288 4.625% due 22/01/2018 (814,006) Co Op Centrale Rabobank Anheuser-Busch InBev NV 4.250% due 22/04/2014 1,073,024 4.000% due 02/06/2021 (794,656) Bundesrepublik Deutschland Co Op Centrale Rabobank 3.500% due 04/01/2016 1,053,010 4.250% due 22/04/2014 (738,484) Netherlands, Kingdom of Iberdrola Finanzas SAU 1.000% due 15/01/2014 972,630 4.625% due 07/04/2017 (710,430) ENI Barry Callebaut Services NV 3.500% due 29/01/2018 833,577 5.375% due 15/06/2021 (697,900) Corio Hammerson Plc 4.625% due 22/01/2018 797,552 4.875% due 19/06/2015 (695,363) Allianz Finance II Wendel 5.750% due 08/07/2041 795,435 6.750% due 20/04/2018 (695,175) Anheuser-Busch InBev NV Allianz Finance II 4.000% due 02/06/2021 792,192 5.750% due 08/07/2041 (691,170) Netherlands, Kingdom of Telefonica Emisiones SAU 4.500% due 15/07/2017 760,354 5.431% due 03/02/2014 (682,146) E.ON International Finance BV Intesa Sanpaolo SpA 4.125% due 26/03/2013 738,836 4.000% due 08/11/2018 (658,490) Province Of Quebec Canada Royal Bank of Scotland Plc 3.375% due 20/06/2016 730,579 6.934% due 09/04/2018 (656,913) Storm BV 1.000% due 21/10/2046 (628,259)

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.

Euro Credit 23 OpenWorld plc Europe Focus Equity

Manager’s Report

Money Manager Hermes Sourcecap Limited

Investment Objective The Fund aims to provide long-term capital appreciation from a portfolio comprised predominantly of equities and equity-related instruments.

Fund Performance During the year ended 30 June 2011, the Fund returned 22.1 per cent on a gross of fee basis (20.6 per cent on a net of fees basis), versus a 15.6 per cent for the benchmark* (All returns are in EUR).

Market Comment Materials and energy were amongst the strongest performing sectors during the third quarter of 2010 and the fourth quarter of 2010. At the back of rallying commodity prices including agricultural commodities, metals and energy. The Russian drought and global flooding was pushing agricultural commodities prices up. Financials was amongst the weakest sectors during the third quarter and the fourth quarter, as the European sovereign debt crisis continued to haunt the continent.

The European stock markets at large remained remarkably resilient in spite of the multitude of large -scale shocks to the economy during the first quarter of 2011, including the uprising in the Middle East, the disaster in Japan, rising energy prices and a continuation of the sovereign debt concerns in Europe. The volatility continued in the second quarter, as the sovereign debt crisis remained unresolved, while the end of QEII and debt ceiling negotiations in the U.S. affected investor sentiment.

General Comment on the Money Manager/Performance Thanks to its growth and pro-inflationary positioning, the Fund finished the third quarter of 2010 on a strong note as markets rallied strongly in September. Performance was primarily driven by stock selection and to a lesser extent currency gains on being overweight the Norwegian Krone and underweight the British Pound. Offshore drilling company, Seadrill was a top contributor. Not only did the stock profit from higher oil prices, it also benefited from having no exposure to the Gulf of Mexico and having the youngest offshore drilling fleet in the industry. Agricultural chemical company, Yara International, was also a strong performer, which benefited from rising soft commodity prices at the back of the Russian drought and global floods. Urea prices have also increased by around a third in the third quarter. Conversely, the Money Manager was surprised to see Randgold being a major detractor to performance in the third quarter given that the price of gold hit all-time highs. Nevertheless, he noted that the stock had done very well this year, and continues to hold it as a “blatant inflation call”. CSM was another stock that did not fare well in the third quarter as the market was concerned over the company's ability to pass on higher sugar prices.

Not surprisingly, commodity related stocks did particularly well for the Fund in the fourth quarter of 2010. Stocks like Lanxess (chemicals company that was able to raise prices 3 times during the quarter on strong demand), Petroleum Geo-Services (company gave bullish outlook on pricing), Yara International (increased grain prices, bolstered by extreme weather conditions) and BASF (strong third quarter numbers and rising oil prices) were all positive contributors to performance. ASML also did well on the back of raising order guidance and positive sentiment towards the semi-conductor market. Stock selection was also strong within financials. Although owning Ageas (ex Fortis) was a negative, having no exposure to the likes of Santander, BNP, UniCredit, and Barclays were positives. Conversely, stocks that didn't fare well in the fourth quarter included Randgold Resources (reduced profit expectations as political instability in the Ivory Coast delayed the opening of a new mine), Ageas (concern over Belgian sovereign debt and its exposure to debt in peripheral European bonds) and Hennes & Mauritz (sharp rise in cotton prices during the fourth quarter).

After a difficult January when the markets experienced significant mean-reversal from the previous three months, the Fund managed to finish flat for the first quarter of 2011. Although there were pockets of strengths and weaknesses, neither stock or sector allocation dominated attribution for the quarter as a whole. Stocks that contributed positively included Swedbank (strong domestic Swedish economy, no exposure to peripheral debt and upwards revisions to earnings), BG Group (energy prices were up, and market looked to buy liquefied natural gas names following the Japan disaster), and ING (repayment of government loan and planned disposal of insurance business). On the other hand, Yara (urea prices declined due to seasonal lack of demand and continued exports from China) and Lonmin (platinum prices fell on the back of concerns that the Japan quake would hit the auto industry) both detracted from performance.

In what was clearly a very volatile second quarter in which markets evolved between 'risk on' and 'risk off' trade on a number of occasions, it was encouraging to see the Fund perform well. In fact, the Fund didn’t disappoint in either market environment. Although sector allocation did contribute, it was stock selection that was the primary driver to performance. Key contributors to performance during the second quarter included Adidas (which raised its sales outlook for the year), Elektra (after strong first quarter results led to broker upgrades) and Yara International (as it benefitted from higher urea prices). Conversely, ASML (amid concerns over weakness in semiconductor prices and profit warnings in the sector), Lonmin (lowered production forecasts and lower platinum prices) and Petro Geo-Services (as disappointing results led to broker downgrades) proved to be a drag on performance. 24 Europe Focus Equity OpenWorld plc Europe Focus Equity

Manager’s Report - continued

Outlook The Money Manager observes that the market will remain volatile and range-bound until there is clarity on the resolution of the European sovereign debt crisis. However, the Money Manager also notes that the difficult market environment is ideal for stock picking as assets are continuously being mispriced. Finally, quality and pricing power remain the most important themes running through the portfolio.

Past performance is no indication of current or future performance. The reference to a benchmark is used for illustrative purposes only.

* Benchmark Source: Russell Developed Europe Large Cap Net Index

Russell Investments Ireland Limited July 2011

Europe Focus Equity 25 OpenWorld plc Europe Focus Equity

Balance Sheet

As at 30 June 2011

30 June 2011 30 June 2010 EUR EUR Assets Financial assets at fair value through profit or loss (Note 1) ...... 36,964,397 26,866,744

Cash at bank (Note 4) ...... 150,137...... 483,652 Cash held with brokers and counterparties for open derivative positions (Note 4) ...... 145,000...... 76,639

Debtors: Receivable for investments sold ...... - 244,219 Receivable on fund shares issued ...... 8,782 - Dividends receivable ...... 100,141...... 54,475 Other receivables ...... 28,665...... 31,855 37,397,122 27,757,584 Liabilities Financial liabilities at fair value through profit or loss (Note 1) ...... (20,842) (100,350)

Creditors – amounts falling due within one year: Cash due to brokers and counterparties for open derivative positions (Note 4) ...... (1,206) - Management fees payable ...... (18,196) ...... (11,074) Custodian and Trustee fees payable ...... (298) (203) Sub-custodian fees payable ...... (1,200) ...... - Administration fees payable ...... (597) .... (406) Professional fees payable ...... (5,942) ...... (14,593) Performance fees ...... (288,712)...... - Audit fees payable ...... (16,698...... ) (13,300) Miscellaneous fees payable ...... (8,913) ...... (12,425) (362,604) (152,351)

Net assets attributable to redeemable participating shareholders (at bid market prices) ...... 37,034,518 ...... 27,605,233

Adjustment from bid market prices to last traded market prices (Note 5) ...... 33,770 28,142

Net asset value attributable to redeemable participating shareholders (at last traded market prices) ...... 37,068,288...... 27,633,375

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

26 Europe Focus Equity OpenWorld plc Europe Focus Equity

Profit and Loss Account

For the year ended 30 June 2011

2011 2010* EUR EUR Income Dividends ...... 1,100,405 . 422,803 Bank and short term investment interest ...... 263 278 1,100,668 423,081

Net gain (loss) on investment activities (Note 8) ...... 5,512,442 ...... (1,148,147)

Total investment income (expense) ...... 6,613,110...... (725,066)

Expenses Management fees (Note 3) ...... (193,819) ...... (37,515) Custodian and Trustee fees (Note 3) ...... (3,814) (725) Sub-custodian fees (Note 3) ...... (20,747) ..... - Administration and transfer agency fees (Note 3) ...... (19,668) ... (2,871) Audit fees (Note 3) ...... (16,698)...... (13,300) Professional fees ...... (30,248)...... (14,593) Performance fees (Note 3) ...... (297,012) ...... - Miscellaneous fees ...... (30,337)...... (15,913) Total operating expenses ...... (612,343) ...... (84,917)

Net income (expense) ...... 6,000,767...... (809,983)

Finance costs Distributions (Note 15) ...... (283,586)...... - Interest expense ...... (206) (2,681) Profit (loss) for the financial year/period before taxation ...... 5,716,975...... (812,664)

Taxation Withholding tax (Note 6) ...... (141,198) ...... (59,741) Profit (loss) for the financial year/period after taxation ...... 5,575,777...... (872,405)

Movement in adjustment from bid market prices to last traded market prices (Note 5) ...... 5,628 ...... 28,142

Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 5,581,405 (844,263)

All amounts arose solely from continuing operations. There are no gains or losses other than those dealt within the Profit and Loss Account.

* For the period from 3 March 2010 (launch date) to 30 June 2010.

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

Europe Focus Equity 27 OpenWorld plc Europe Focus Equity

Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders

For the year ended 30 June 2011

2011 2010* EUR EUR Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 5,581,405...... (844,263)

Share transactions Net increase (decrease) in net assets resulting from redeemable participating share transactions (Note 5) ...... 3,753,025...... 28,477,638 Reinvestment of deemed distributions on accumulation shares (Note 15) ...... 100,483 -

Total net increase (decrease) in net assets attributable to redeemable participating shareholders ...... 9,434,913 ...... 27,633,375

Net assets attributable to redeemable participating shareholders Beginning of year/period ...... 27,633,375 ...... -

End of year/period ...... 37,068,288...... 27,633,375

* For the period from 3 March 2010 (launch date) to 30 June 2010.

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

28 Europe Focus Equity OpenWorld plc Europe Focus Equity

Schedule of Investments

30 June 2011

Number Fair Value Fund Number Fair Value Fund of Shares EUR % of Shares EUR % Transferable Securities (95.92%) Luxembourg (2.70%) Common Stock (95.92%) Communications Equipment Belgium (1.37%) 51,846 SES SA ...... 1,000,628 2.70 Insurance 271,820 Ageas ...... 508,303 1.37 Netherlands (8.18%) Food Products Bermuda (2.10%) 26,135 CSM ...... 605,548 1.63 Oil and Gas Insurance 31,885 Seadrill Ltd ...... 777,954 2.10 103,370 ING Groep ...... 877,508 2.37 Semiconductor Equipment and Products Czech Republic (1.22%) 22,951 ASM International ...... 624,382 1.68 Communications Equipment 36,438 ASML Holding ...... 925,525 2.50 Telefonica O2 Czech 3,032,963 8.18 25,194 Republic ...... 451,955 1.22 Norway (12.61%)

Banks Denmark (2.83%) 111,584 DnB NOR Bank ...... 1,076,524 2.90 Biotechnology Chemicals 12,134 Novo Nordisk ...... 1,049,275 2.83 Yara International 28,609 ASA ...... 1,116,175 3.01 France (4.11%) Communications Equipment Commercial Services and Supplies 77,722 Telenor ASA ...... 882,218 2.38 11,932 Bureau Veritas ...... 694,442 1.87 Oil and Gas Holding Companies - Diversified Operations 48,187 Statoil ASA ...... 844,920 2.28 LVMH Moet Hennessy Oil and Gas Services 6,689 Louis Vuitton ...... 829,771 2.24 Petroleum Geo-Services 1,524,213 4.11 76,191 ASA ...... 754,653 2.04 Germany (21.70%) 4,674,490 12.61 Automobiles Sweden (11.33%) Porsche Automobil Holding Banks 7,512 SE ...... 409,104 1.10 90,532 Swedbank ...... 1,051,913 2.84 Chemicals Communications Equipment 11,135 BASF SE ...... 751,835 2.03 35,351 Tele2 ...... 483,010 1.30 15,021 Bayer AG ...... 832,765 2.24 Health Care Equipment and Supplies 7,487 Lanxess ...... 421,518 1.14 27,632 Elekta ...... 902,480 2.43 8,093 Linde ...... 974,397 2.63 Multi -Line Retail Diversified Financials 37,278 Hennes & Mauritz ...... 888,287 2.40 12,996 Deutsche Boerse ...... 682,030 1.84 Tobacco Health Care Equipment and Supplies 37,668 Swedish Match ...... 873,288 2.36 11,540 Fresenius SE ...... 826,956 2.23 4,198,978 11.33 Household Durables Switzerland (6.76%) 17,488 Adidas ...... 954,145 2.58 Banks Insurance Julius Baer Muenchener 21,286 Group ...... 605,569 1.63 5,747 Rueckversicherungs ...... 606,309 1.64 Chemicals Software 4,322 Syngenta ...... 1,003,344 2.71 19,573 SAP ...... 816,683 2.20 Metals and Mining 18,587 Software ...... 766,993 2.07 59,236 Xstrata ...... 898,629 2.42 8,042,735 21.70 2,507,542 6.76 Jersey, Channel Islands (2.11%) Metals and Mining 13,470 Randgold Resources Ltd ..... 783,071 2.11

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

Europe Focus Equity 29 OpenWorld plc Europe Focus Equity

Schedule of Investments - continued

30 June 2011

Number Fair Value Fund Number Fair Value Fund of Shares EUR % of Shares EUR % United Kingdom (18.90%) Semiconductor Equipment and Products Agriculture 84,918 ARM Holdings ...... 552,436 1.49 British American 7,004,253 18.90 34,313 Tobacco ...... 1,037,659 2.80 Total Common Stock ...... 35,556,360 95.92 Beverages Total Transferable 28,304 SABMiller ...... 711,926 1.92 Securities ...... 35,556,360 95.92 Communications Equipment

759,603 Vodafone Group ...... 1,390,381 3.75 Collective Investment Schemes (3.64%) Machinery Ireland (3.64%) 23,568 Weir Group ...... 554,830 1.50 Russell Investment Company Media III plc 64,823 Pearson ...... 844,132 2.28 The Euro Liquidity Fund - Metals and Mining 1,348 Class C Shares ...... 1,347,982 3.64 42,916 Lonmin ...... 690,493 1.86 Total Collective Investment Schemes ...... 1,347,982 3.64 Oil and Gas Total Investments 78,126 BG Group ...... 1,222,396 3.30 excluding Financial Derivative Instruments ..... 36,904,342 99.56 Financial Derivative Instruments (0.10%)

Open Futures Contracts (0.13%)

Notional Average Unrealised Amount Cost Price Gain (Loss) Fund EUR EUR EUR % 850,330 2,743 31 of DJ Euro Stoxx 50 Index Futures Long Futures Contracts Expiring September 2011 ...... 32,550 0.09 572,641 6,363 9 of FTSE 100 Index Futures Long Futures Contracts Expiring September 2011 ...... 15,597 0.04 Net unrealised gain (loss) on open futures contracts ...... 48,147 0.13

Open Forward Foreign Currency Exchange Contracts ((0.03)%)

Unrealised Settlement Amount Amount Gain (Loss) Fund Date Bought Sold EUR % 21/09/2011 EUR 113,488 GBP 100,000 2,615 0.01 21/09/2011 EUR 171,022 GBP 150,000 4,714 0.02 21/09/2011 EUR 369,885 GBP 330,000 4,007 0.01 21/09/2011 EUR 33,833 GBP 30,000 572 0.00 21/09/2011 GBP 136,667 EUR 153,426 (1,901) (0.01) 21/09/2011 GBP 136,667 EUR 153,433 (1,907) (0.01) 21/09/2011 GBP 136,667 EUR 153,662 (2,136) (0.01) 21/09/2011 GBP 136,667 EUR 153,664 (2,138) (0.01) 21/09/2011 GBP 136,667 EUR 153,463 (1,937) (0.01) 21/09/2011 GBP 136,665 EUR 153,562 (2,038) (0.01) 21/09/2011 GBP 170,000 EUR 193,298 (4,816) (0.01) 21/09/2011 GBP 50,000 EUR 56,605 (1,169) 0.00

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

30 Europe Focus Equity OpenWorld plc Europe Focus Equity

Schedule of Investments - continued

30 June 2011

Unrealised Settlement Amount Amount Gain (Loss) Fund Date Bought Sold EUR % 21/09/2011 GBP 50,000 EUR 56,476 (1,040) 0.00 21/09/2011 GBP 50,000 EUR 57,196 (1,760) 0.00 Unrealised gain on open forward foreign currency exchange contracts ...... 11,908 0.04 Unrealised loss on open forward foreign currency exchange contracts ...... (20,842) (0.07) Net unrealised gain (loss) on open forward foreign currency exchange contracts ...... (8,934) (0.03) Total Financial Derivative Instruments ...... 39,213. 0.10

Total Financial Assets at Fair Value through Profit or Loss ...... 36,964,397 99.73 Total Financial Liabilities at Fair Value through Profit or Loss ...... (20,842) (0.07)

Fair Value Fund EUR % Net Financial Assets at Fair Value through Profit or Loss (99.66%) ...... 36,943,555 ...... 99.66 Other Net Assets (0.25%) ...... 90,963 ...... 0.25 Adjustment from Bid Market Prices to Last Traded Market Prices (0.09%) ...... 33,770 ...... 0.09 Net Assets (100.00%) ...... 37,068,288 ...... 100.00

% of Analysis of total assets (unaudited) total assets Transferable securities admitted to an official stock exchange listing or traded on a regulated market ...... 95.08 Collective investment schemes ...... 3.60 Exchange traded financial derivative instruments ...... 0.13 Over the counter financial derivative instruments ...... 0.03 Other assets ...... 1.16 100.00

The broker for the open futures contracts is UBS.

The counterparties for the open forward foreign currency exchange contracts are:

Credit Suisse Royal Bank of Scotland Deutsche Bank AG Société Generale HSBC Bank State Street Bank JP Morgan Chase Bank UBS Royal Bank of Canada Westpac Banking Corporation

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

Europe Focus Equity 31 OpenWorld plc Europe Focus Equity

Statement of Changes in Composition of Portfolio (Unaudited)

Listed below are the 20 largest cumulative investment purchases and sales during the year ended 30 June 2011

Acquisition Cost Disposal Proceeds Portfolio Securities EUR Portfolio Securities EUR Russell Investment Company III plc Russell Investment Company III plc The Euro Liquidity Fund The Euro Liquidity Fund Class C Shares 6,608,019 Class A Shares (6,006,019) Russell Investment Company III plc Russell Investment Company III plc The Euro Liquidity Fund The Euro Liquidity Fund Class A Shares 5,549,000 Class C Shares (5,265,000) Vodafone Group 1,557,619 ABB Ltd (1,050,626) DnB NOR Bank 1,109,767 International Power (932,269) Swedbank 991,555 Koninklijke Philips Electronics (921,102) Swedish Match 853,093 Tesco (836,904) Pearson 815,634 Parmalat SpA (770,175) Elekta 754,496 Imperial Tobacco Group (736,171) Koninklijke Philips Electronics 732,079 Reckitt Benckiser Group (651,169) Sabmiller 714,493 Russell Investment Company III plc ASM International 633,697 The Sterling Liquidity Fund Russell Investment Company III plc Class C Shares (578,915) The Sterling Liquidity Fund PostNL (545,151) Class C Shares 575,258 BASF SE (474,056) ARM Holdings 553,514 Banco Popolare (420,081) Weir Group 552,552 Lanxess (370,045) Tele2 544,428 Mediaset Espana (354,831) Telenor ASA 526,337 Seadrill Ltd (339,092) BG Group 406,763 LVMH Moet Hennessy Louis Vuitton (316,423) Porsche Automobil 360,568 Bayer AG (299,968) Yara International ASA 268,921 Syngenta (252,621) Deutsche Boerse 235,219 Linde (247,270)

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.

32 Europe Focus Equity OpenWorld plc Global Climate Change

Manager’s Report

Money Manager Impax Asset Management Group plc

Investment Objective The Fund aims to provide long-term capital appreciation from a portfolio comprised predominantly of equities and equity-related instruments.

Fund Performance During the year ended 30 June 2011, the Fund returned 32.5 per cent on a gross of fee basis (30.8 per cent on a net of fees basis), versus a 31.2 per cent for the benchmark* (All returns are in USD).

Market Comment The climate change investment space enjoyed very strong performance over the second half of 2010. Although renewable and alternative energy proved challenging performance-wise, especially wind power stocks were struggling. The wind industry as a whole has been struggling with regulatory uncertainty in key markets, low power prices and structural industry overcapacity. The “risk-on” trade took hold from November, with late cyclical stocks in the industrial sector outperforming.

Environmental markets were boosted by rising oil prices and nuclear concerns following developments in the Middle East and the earthquake in Japan, as these events led to increased focus on renewable energy and energy efficiency in the first quarter of the year.

Industrials sold off more than expected following the Fukushima dislocation. Many companies were running at a 100 per cent utilisation rate at the end of the first quarter, so on a positive note the general moderation in the second quarter may have helped deflect the risk of overheating.

General Comment on Money Manager/Performance In a volatile market environment, the Fund lagged the market in the third quarter of 2010. The two primary reasons for this were the exposure to the renewable space (more specifically, wind) and the overweight to Japanese export-oriented stocks (Horiba, Stanley Electric and Shimadzu), which clearly struggled in a rising Yen environment. Within the alternative energy space, a profit warning caused by capacity underutilisation led to poor performance from turbine manufacturer Vestas, which impacted gearbox supplier Hansen Transmissions. Hansen’s second main customer, Gamesa was also affected by quality and margin concerns. Japanese hazardous waste management company, Daiseki was a poor performer in the third quarter on market fears that Japanese industrial production (defines Daiseki’s volumes) would be weaker than anticipated. On the other hand, solar stocks such as Wacker Chemie (polysilicon, Germany), OCI (polysilicon, Korea) and Sunpower (solar cells and modules, U.S.) performed well as the expiry of the German solar feed-in-tariff brought forward demand. Finally, a Chinese government drive to use energy efficient glass in public housing projects and growth in the domestic automotive windshield market resulted in a substantial rise at Xinyi Glass.

Although the Fund was tracking its benchmark for most of the fourth quarter 2010, it broke out on the upside once the “risk on” trade took hold from the end of November. The Fund’s significant exposure to the late cyclical stocks, especially within the industrials helped it post very strong absolute and relative numbers in the fourth quarter. In terms of environmental sectors, with over a third of the Fund invested in the Energy Efficiency space, the Fund benefitted from its cyclical characteristic along with some M&A activity. Baldor Electric performed well following a takeover bid from Swiss Group, ABB. Selected late cycle, automation companies like Schneider Electric, Cooper Electric and Johnson Controls continued to perform well. An improving outlook for the technology sector along with a weaker Yen boosted Murata Manufacturing where inventory restocking in sector is leading to greater visibility on the outlook for the capacitor market. Austrian hydro power company, Andritz performed strongly following positive emerging market order growth. The Fund also benefitted from having nearly a quarter of it invested in the Water and Pollution Control space, where stocks like U.S. water treatment company, Nalco (where the highly indebted company announced the pay down of a substantial amount of debt) and Australian monitoring and testing company, Campbell Brothers (strong growth in its Australian metals and mining business) performed strongly. Investing in renewable energy has continued to prove challenging. This was particularly true for wind companies such as Vestas (wind turbines, Denmark), which underperformed due to a restatement of its accounting methodology, which reduced the company’s full year guidance. The stock was sold in December. China Longyuan (wind project developer, China) was also affected by concerns that increased Chinese interest rates would hinder their debt service. The wind industry as a whole has been struggling with regulatory uncertainty in key markets, low power prices and structural industry overcapacity. The Money Manager, however, has been reducing the weight in this area throughout the year, from 16 per cent at the start to around 6 per cent at the end.

The Fund outperformed marginally during a very eventful first quarter of the year. The Japanese holdings held up relatively well, so despite the slight overweight in the portfolio, stock selection made up for most of the shortfall. Elsewhere EDP Renovaveis (wind) and SunPower (solar) were amongst the strongest contributors to performance as they benefited from increasing energy prices and nuclear concerns. MasTec (power network efficiency) performed strongly spurred on by strong results and the general

Global Climate Change 33 OpenWorld plc Global Climate Change

Manager’s Report - continued recovery in utility spending. GEA Group (heat exchangers) was another strong performer as the company indicated good margin improvement aided by food price inflation. At the other end of the scale the performance of Nalco (water treatment) was hurt by increasing raw material costs and disappointing fourth quarter results. Stanley Electric (LEDs) were negatively impacted by the Japanese earthquake as their facilities were directly hit by the tsunami. Hansen transmission continued to struggle despite the general rebound in wind power.

The Fund underperformed in the second quarter as the Money Manager’s underperformance when markets returned to the risk-off sentiment in May was sandwiched by good performance in April and June. The Money Manager benefited significantly from its positioning within renewable energy, particularly from not having a direct exposure to solar stocks. The Money Manager also continued to benefit from its holding in Andritz AG (Austrian renewable energy equipment manufacturer). Pollution control was another positive area for the Money Manager this quarter; the Money Manager took some profits off the table following the recent strong performance of Thermo Fisher Scientific Inc. (Analytical and environmental monitoring instruments). Energy efficiency stocks gave back a bit following a strong first quarter. Yamatake (Japanese energy efficiency) ran into a profit warning and Ingersoll Rand (U.S. energy efficiency) was negatively affected by the slow U.S. construction recovery. The sovereign debt crisis weighted on Portuguese renewable energy developer EDP Renovaveis. From a country perspective, Germany and Austria contributed positively as industrial data in Germany remains positive while the Eurozone periphery continued to be plagued by the sovereign debt crisis.

Outlook The Money Manager expects growth to be stable going forward, albeit with continuing downside risk especially from the outcome of the sovereign debt crisis in Europe. Global growth will be led by emerging markets, as these markets will potentially be helped by peaked inflation. The Money Manager continues to see more value opportunities in Asia and Europe compared to the U.S. The Money Manager is increasing the concentration in the portfolio by slightly increasing the allocation towards key names and taking money out of some of the more marginal holdings in the portfolio.

Past performance is no indication of current or future performance. The reference to a benchmark is used for illustrative purposes only.

* Benchmark Source: Russell Global Index Net TR

Russell Investments Ireland Limited July 2011

34 Global Climate Change OpenWorld plc Global Climate Change

Balance Sheet

As at 30 June 2011

30 June 2011 30 June 2010 USD USD Assets Financial assets at fair value through profit or loss (Note 1) ...... 15,607,978 38,581,924

Cash at bank (Note 4) ...... 7,467...... 313,358 Cash held with brokers and counterparties for open derivative positions (Note 4) ...... 200,000...... 243,000

Debtors: Receivable for investments sold ...... 8,936,245 60,409 Receivable on fund shares issued ...... 13,773 - Dividends receivable ...... 98,512...... 92,574 Other receivables ...... 35,514...... - 24,899,489 39,291,265 Liabilities Financial liabilities at fair value through profit or loss (Note 1) ...... - (71,422)

Creditors – amounts falling due within one year: Cash due to brokers and counterparties for open derivative positions (Note 4) ...... (8,019) - Payable on fund shares redeemed ...... (8,933,207)...... - Management fees payable ...... (23,142) ...... (26,456) Custodian and Trustee fees payable ...... (265) (322) Sub-custodian fees payable ...... (2,408) ...... (18,372) Administration fees payable ...... (530) .... (664) Professional fees payable ...... (8,535) ...... (17,665) Audit fees payable ...... (22,933)...... (18,341) Miscellaneous fees payable ...... (2,783) ...... (22,163) (9,001,822) (175,405)

Net assets attributable to redeemable participating shareholders (at bid market prices) ...... 15,897,667 ...... 39,115,860

Adjustment from bid market prices to last traded market prices (Note 5) ...... 28,823 38,694

Net asset value attributable to redeemable participating shareholders (at last traded market prices) ...... 15,926,490...... 39,154,554

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

Global Climate Change 35 OpenWorld plc Global Climate Change

Profit and Loss Account

For the year ended 30 June 2011

2011 2010* USD USD Income Dividends ...... 647,807 . 544,579 Bank and short term investment interest ...... 572 521 648,379 545,100

Net gain (loss) on investment activities (Note 8) ...... 10,727,699 ...... (4,119,409)

Total investment income (expense) ...... 11,376,078...... (3,574,309)

Expenses Management fees (Note 3) ...... (323,226) ...... (269,602) Custodian and Trustee fees (Note 3) ...... (5,492) (3,558) Sub-custodian fees (Note 3) ...... (13,203) ..... (29,135) Administration and transfer agency fees (Note 3) ...... (26,276) ... (12,979) Audit fees (Note 3) ...... (22,933)...... (18,341) Professional fees ...... (43,364)...... (17,665) Performance fees (Note 3) ...... (64) ...... - Miscellaneous fees ...... (38,711)...... (45,748) Total operating expenses ...... (473,269)...... (397,028)

Net income (expense) ...... 10,902,809...... (3,971,337)

Finance costs Distributions (Note 15) ...... (98,947)...... (7,200) Interest expense ...... (271) (2,025) Profit (loss) for the financial year/period before taxation ...... 10,803,591...... (3,980,562)

Taxation Withholding tax (Note 6) ...... (94,069) ...... (79,977) Profit (loss) for the financial year/period after taxation ...... 10,709,522...... (4,060,539)

Movement in adjustment from bid market prices to last traded market prices (Note 5) ...... (9,871) ...... 38,694

Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 10,699,651...... (4,021,845)

All amounts arose solely from continuing operations. There are no gains or losses other than those dealt within the Profit and Loss Account.

* For the period from 4 August 2009 (launch date) to 30 June 2010.

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

36 Global Climate Change OpenWorld plc Global Climate Change

Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders

For the year ended 30 June 2011

2011 2010* USD USD Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 10,699,651...... (4,021,845)

Share transactions Net increase (decrease) in net assets resulting from redeemable participating share transactions (Note 5) ...... (34,026,662...... ) 43,169,199 Reinvestment of deemed distributions on accumulation shares (Note 15) ...... 98,947 7,200

Total net increase (decrease) in net assets attributable to redeemable participating shareholders ...... (23,228,064) 39,154,554

Net assets attributable to redeemable participating shareholders Beginning of year/period ...... 39,154,554 ...... -

End of year/period ...... 15,926,490...... 39,154,554

* For the period from 4 August 2009 (launch date) to 30 June 2010.

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

Global Climate Change 37 OpenWorld plc Global Climate Change

Schedule of Investments

30 June 2011

Number Fair Value Fund Number Fair Value Fund of Shares USD % of Shares USD % Transferable Securities (93.12%) Semiconductor Equipment and Products Common Stock (93.12%) 41,714 Infineon Technologies ...... 468,954 2.93 Australia (4.73%) 1,890,605 11.82 Chemicals Hong Kong (4.14%) 3,968 Campbell Brothers ...... 194,097 1.21 Chemicals Environmental Control 407,800 Yingde Gases ...... 375,242 2.35 Transpacific Industries Paper and Forest Products 184,054 Group ...... 160,594 1.01 Lee & Man Paper Other Industrial 473,500 Manufacturing ...... 286,610 1.79 21,261 Sims Metal Management ..... 401,750 2.51 661,852 4.14 756,441 4.73 Ireland (3.06%) Austria (1.93%) Building Products Machinery 15,095 Kingspan Group ...... 149,478 0.93 2,997 Andritz ...... 308,509 1.93 Miscellaneous Manufacturers 7,500 Ingersoll-Rand ...... 340,575 2.13 Belgium (0.84%) 490,053 3.06

Machinery Italy (1.45%) Hansen Transmissions 232,494 International ...... 134,373 0.84 Electrical Equipment 11,500 Prysmian ...... 231,258 1.45

China (4.48%) Electric Utilities Japan (5.05%) Hollysys Automation Commercial Services and Supplies 14,800 Technologies ...... 137,344 0.86 17,000 Daiseki ...... 341,642 2.14 Electronic Equipment and Instruments Electronic Equipment and Instruments 206,000 China Automation Group .... 143,224 0.90 4,700 Horiba ...... 150,789 0.94 Energy Equipment and Services 7,700 Yamatake ...... 169,999 1.07 China Longyuan Power Environmenta l Control 148,300 Group ...... 142,940 0.89 4,900 Kurita Water Industries ...... 144,342 0.90 Gas Utilities 806,772 5.05 86,800 ENN Energy Holdings ...... 292,261 1.83 Netherlands (1.71%) 715,769 4.48 Electronic Equipment and Instruments Denmark (0.00%) Koninklijke Philips Electrical Equipment 10,641 Electronics ...... 273,073 1.71 3 Vestas Wind Systems ...... 70 0.00 Spain (1.42%) France (6.54%) Energy Equipment and Services Building Products 34,525 EDP Renovaveis ...... 227,605 1.42 2,616 Cie de Saint-Gobain ...... 169,368 1.06 Electrical Equipment Switzerland (2.87%) 3,287 Schneider Electric ...... 549,003 3.43 Construction and Engineering Water Utilities 17,707 ABB ...... 458,447 2.87 16,448 Suez Environnement ...... 328,017 2.05 1,046,388 6.54 Taiwan (2.50%) Germany (11.82%) Electrical Equipment Chemicals 56,400 Delta Electronics ...... 206,172 1.29 2,584 Linde ...... 451,068 2.82 Semiconductor Equipment and Products Holding Companies - Diversified Operations 65,000 Epistar ...... 192,804 1.21 13,921 GEA Group ...... 498,730 3.12 398,976 2.50 Miscellaneous Manufacturers 3,437 Siemens ...... 471,853 2.95

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

38 Global Climate Change OpenWorld plc Global Climate Change

Schedule of Investments - continued

30 June 2011

Number Fair Value Fund Number Fair Value Fund of Shares USD % of Shares USD % United Kingdom (5.78%) Environmental Control Machinery 15,870 Nalco Holding ...... 440,868 2.76 18,350 IMI ...... 309,919 1.94 12,237 Republic Services ...... 377,267 2.36 Miscellaneous Manufacturers Hand and Machine Tools 61,083 Invensys ...... 315,576 1.97 7,100 Regal-Beloit ...... 474,209 2.97 Water Utilities Machinery 12,654 Severn Trent ...... 298,839 1.87 3,955 3M ...... 375,053 2.35 924,334 5.78 7,225 Pall ...... 406,117 2.54 United States (34.80%) Miscellaneous Manufacturers Auto Components 5,000 Cooper Industries ...... 298,350 1.87 9,152 Johnson Controls ...... 380,998 2.38 Water Utilities Chemicals 5,000 American Water Works ...... 147,250 0.92 Air Products & 5,563,902 34.80 1,500 Chemicals ...... 143,325 0.90 Total Common Stock ...... 14,888,427 93.12 Construction and Engineering Total Transferable 10,900 Aecom Technology ...... 298,224 1.86 Securities ...... 14,888,427 93.12 Distributors 11,400 LKQ ...... 297,426 1.86 Collective Investment Schemes (4.34%) Electrical Equipment Ireland (4.34%) 9,138 Emerson Electric ...... 513,830 3.21 Russell Investment Company Electronic Equipment and Instruments III plc 3,157 Itron ...... 152,041 0.95 The U.S. Dollar Cash Fund 69,371 II - Class C Shares ...... 693,711 4.34 10,900 PerkinElmer ...... 293,537 1.83 Total Collective Investment 6,400 Rogers ...... 295,424 1.85 Schemes ...... 693,711 4.34 3,371 Thermo Fisher Scientific ..... 216,991 1.36 Total Investments Watts Water excluding Financial 12,800 Technologies ...... 452,992 2.83 Derivative Instruments .... 15,582,138 97.46

Financial Derivative Instruments (0.16%)

Open Futures Contracts (0.16%)

Notional Average Unrealised Amount Cost Price Gain (Loss) Fund USD USD USD % 160,305 1,603.05 2 of MSCI EAFE EMINI Index Futures Long Futures Contracts Expiring September 2011 ...... 11,285...... 0.07...... 168,970 1,126.47 3 of MSCI Emerging Market EMINI Index Futures Long Futures Contracts Expiring September 2011 ...... 4,430...... 0.03...... 318,750 1,275.00 5 of S&P 500 EMINI Index Futures Long Futures Contracts Expiring September 2011 ...... 10,125...... 0.06...... Net unrealised gain (loss) on open futures contracts ...... 25,840 0.16

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

Global Climate Change 39 OpenWorld plc Global Climate Change

Schedule of Investments - continued

30 June 2011

Fair Value Fund USD % Total Financial Assets at Fair Value through Profit or Loss (97.62 %) ...... 15,607,978 ...... 97.62 Other Net Assets (2.20%) ...... 289,689 ...... 2.20 Adjustment from Bid Market Prices to Last Traded Market Prices (0.18%) ...... 28,823 ...... 0.18 Net Assets (100.00%) ...... 15,926,490 ...... 100.00

% of Analysis of total assets (unaudited) total assets Transferable securities admitted to an official stock exchange listing or traded on a regulated market ...... 59.79 Collective investment schemes ...... 2.79 Exchange traded financial derivative instruments ...... 0.10 Other assets ...... 37.32 100.00

The broker for the open futures contracts is UBS.

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

40 Global Climate Change OpenWorld plc Global Climate Change

Statement of Changes in Composition of Portfolio (Unaudited)

Listed below are the 20 largest cumulative investment purchases and largest sales during the year ended 30 June 2011

Acquisition Cost Disposal Proceeds Portfolio Securities USD Portfolio Securities USD Russell Investment Company III plc Russell Investment Company III plc The U.S. Dollar Cash Fund II The U.S. Dollar Cash Fund II Class C Shares 16,016,203 Class C Shares (15,323,544) Russell Investment Company III plc Russell Investment Company III plc The U.S. Dollar Cash Fund II The U.S. Dollar Cash Fund II Class A Shares 7,511,000 Class A Shares (9,307,203) ABB 1,588,419 Xinyi Glass Holdings (2,003,575) Siemens 1,431,403 Veolia Environnement (1,724,832) Regal-Beloit 1,377,632 MasTec (1,422,962) Invensys 1,272,282 Schneider Electric (1,391,338) Koninklijke Philips Electronics 1,239,750 Flowserve Corp (1,309,416) Flowserve Corp 1,045,671 Campbell Brothers (1,277,578) Infineon Technologies 980,722 Andritz (1,251,373) Nidec 955,492 Pall (1,228,658) Linde 908,349 GEA Group (1,226,561) Lee & Man Paper Manufacturing 862,178 Thermo Fisher Scientific (1,225,865) Nalco Holding 848,237 Danaher (1,217,979) Aecom Technology 831,378 Emerson Electric (1,167,904) Murata Manufacturing 782,140 ABB (1,111,953) Emerson Electric 781,586 California Water Service Group (1,106,292) Watts Water Technologies 775,680 Murata Manufacturing (1,102,457) Suez Environnement 747,416 Nidec (1,039,210) Andritz 695,095 Stanley Electric (1,029,344) IMI 688,352 Siemens (1,014,211)

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.

Global Climate Change 41 OpenWorld plc Global Dynamic Bond

Manager’s Report

Money Manager Strategic Fixed Income, LLC

Investment Objective The Fund aims to provide long-term capital appreciation from a portfolio comprised predominantly of fixed income securities and instruments.

Fund Performance During the year ended 30 June 2011, the Fund returned 9.5 per cent on a gross of fee basis (7.9 per cent on a net of fees basis), versus a 10.5 per cent for the benchmark* (All returns are in USD).

Market Comment Yields rose sharply in the third quarter of 2010 because some market participants felt that the Federal Reserve (the “Fed”) easing might not include additional Treasury purchases above and beyond the reinvestment of mortgage proceeds. Also, a few economic indicators were better than expected. European yields also rose, following a similar pattern to the U.S. government bond market. Several successful bond auctions and ECB purchases of peripheral government bonds reduced the flight to quality trade to some extent despite the ongoing debt concerns and the deflationary impact of a stronger Euro. The Fed’s September FOMC statement assured bond market participants that they stood ready to increase its quantitative easing, restoring harmony to the bond market.

In a volatile fourth quarter of 2010, the performance of the peripheral Eurozone was largely driven by politics rather than fundamentals. The EFSF is providing funding to cash strapped economies in the periphery of the Eurozone, but at a required rate of close to 6 per cent the spread compared to core Eurozone debt is still wide, raising doubts concerning the ability of these economies to balance their books while servicing their debt.

Financial markets faced a series of headwinds in the first quarter of 2011 including the tragedy in Japan, developments in the Middle East, rising commodities prices and the continuation of European sovereign debt concerns. Each time yields declined as risk aversion increased. The market confidence in the global recovery however appears remarkably resilient as markets quickly regained their composure each time and yields rebounded.

General Comment on Money Manager/Performance The portfolio underperformed the benchmark* in the third quarter of 2010. The portfolio entered the month of September overweight duration in the U.S. and Europe. In August, the Fed stated that proceeds from mortgage securities on the Fed's balance sheet would be reinvested in U.S. Treasury securities. On the news, yields declined and the yield curve flattened. To profit from this move toward quantitative easing, duration in the portfolio was increased and extended out the yield curve where Fed purchases would be targeted. However, in early September, in conjunction with a sharp move higher in the stock market, U.S. Treasury yields rose.

The Fund continued to underperform the benchmark*in the fourth quarter of 2010. The fixed income part of the portfolio underperformed while the Money Manager’s FX exposure outperformed. The Money Manager benefited from its underweight to peripheral Eurozone countries over the quarter, especially in November when peripherals came under renewed pressure. The Money Manager expects the current dichotomy between core and peripheral Eurozone economies to continue for the foreseeable future, but finds Italy less exposed than Spain and Portugal, and is thus re-allocating out of Germany increasing its exposure to Italy, while maintaining no direct exposure to Spain, Portugal and Belgium.

The portfolio underperformed the benchmark* in a volatile first quarter of 2011. The foreign exchange exposures detracted from performance, while the fixed income part of the portfolio held up relatively well. The Eurozone exposure was a detractor from performance as the currency allocation more than negated gains from the bond portfolio. Meanwhile, the Money Manager benefitted from its foreign exchange exposures elsewhere in other European countries including Switzerland, and from bond and foreign exchange exposure in New Zealand. The Money Manager has currently got no exposure in Portugal, Ireland and Greece, and is monitoring the Spanish and Italian sovereign yields closely as a leading indicator of contagion in the sovereign debt crisis. The U.S. bond allocation formed another significant detractor from performance over the quarter. Despite the current headwinds, yields seem destined to increase on rising food and energy inflation. The European Central Bank has begun raising interest rates and while the Fed is keeping its accommodative rates in place for the moment, there is uncertainty concerning the market impact of quantitative easing running its course in June.

The portfolio underperformed the benchmark* marginally in a volatile second quarter of 2011. The foreign exchange allocations supported performance in April, as the Money Manager benefited from being long the Swiss Franc offset against short positions in EUR and GBP. The Money Manager also benefited from being long CAD, AUS and NZD. The Money Manager however gave back these gains in May as markets reversed. The manger’s foreign exchange positions detracted marginally again in June, while the fixed income allocations contributed to performance. The overweight to Germany contributed to performance in the second quarter. The Swiss Franc remains the preferred option to express the risk-off trade. In Asia Pacific the risk of a soft landing remains, for China in particular, as authorities continue to move interest rates higher. Australia is also winding back growth 42 Global Dynamic Bond OpenWorld plc Global Dynamic Bond

Manager’s Report - continued expectations. In the U.S., the Money Manager is pretty heavily concentrated in the belly of the curve in an attempt to steer clear of short term risk concerning the debt ceiling agreement.

Outlook The Money Manager remains very negative on the Euro-bond market with regards to the periphery and remains overweight the core Eurozone and non-Eurozone economies including Germany, Norway and the U.K. Due to its strong structural financial position, Norway continues to benefit from the ongoing flight to quality trade, the Money Manager prefers the longer end of the German yield curve, but opportunistically moves into the shorter end when risks are rising. The debt ceiling discussions and the potential fiscal tightening that may materialise as a result of these discussions could potentially drive a double-dip recession in the U.S. economy. The supply crunch from Japan, as a temporary factor, is widely used as an excuse for the current weak performance, if growth does not pick up shortly however the Money Manager may interpret this as confirmation that there are other factors at play. Fiscal spending has been a key driver for U.S. GDP, if long term entitlement reforms and spending cuts are enforced it is expected to have a meaningful negative influence on the U.S. growth path.

Past performance is no indication of current or future performance. The reference to a benchmark is used for illustrative purposes only.

* Benchmark Source: Citigroup World Government Bond index (unhedged)

Russell Investments Ireland Limited July 2011

Global Dynamic Bond 43 OpenWorld plc Global Dynamic Bond

Balance Sheet

As at 30 June 2011

30 June 2011 30 June 2010 USD USD Assets Financial assets at fair value through profit or loss (Note 1) ...... 43,208,714 33,557,607

Cash at bank (Note 4) ...... 573,414...... 1,789,445

Debtors: Interest receivable ...... 345,383...... 407,878 Other receivables ...... 38,879...... - 44,166,390 35,754,930 Liabilities Financial liabilities at fair value through profit or loss (Note 1) ...... (513,711)...... (769,893)

Creditors – amounts falling due within one year: Cash due to brokers and counterparties for open derivative positions (Note 4) ...... (15,808)...... - Management fees payable ...... (19,263) ...... (14,040) Custodian and Trustee fees payable ...... (357) (271) Sub-custodian fees payable ...... (25,511) ...... - Administration fees payable ...... (714) .... (543) Professional fees payable ...... (8,535) ...... (17,665) Performance fees payable ...... - ...... (149,587) Audit fees payable ...... (42,376)...... (33,946) Miscellaneous fees payable ...... (5,461) ...... (4,522) (631,736) (990,467)

Net assets attributable to redeemable participating shareholders (at bid market prices) ...... 43,534,654 ...... 34,764,463

Adjustment from bid market prices to last traded market prices (Note 5) ...... 21,987 17,100

Net asset value attributable to redeemable participating shareholders (at last traded market prices) ...... 43,556,641...... 34,781,563

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

44 Global Dynamic Bond OpenWorld plc Global Dynamic Bond

Profit and Loss Account

For the year ended 30 June 2011

2011 2010* USD USD Income Dividends ...... 2,017 . - Bond interest ...... 845,166 181,005 Bank and short term investment interest ...... 531 - 847,714 181,005

Net gain (loss) on investment activities (Note 8) ...... 5,769,477 ...... (2,066,850)

Total investment income (expense) ...... 6,617,191...... (1,885,845)

Expenses Management fees (Note 3) ...... (207,407) ...... (49,176) Custodian and Trustee fees (Note 3) ...... (4,451) (967) Sub-custodian fees (Note 3) ...... (209,027) ..... - Administration and transfer agency fees (Note 3) ...... (22,284) ... (2,990) Audit fees (Note 3) ...... (42,376)...... (33,946) Professional fees ...... (43,229)...... (17,665) Performance fees (Note 3) ...... - ...... (150,639) Miscellaneous fees ...... (56,344...... ) (7,033) Total operating expenses ...... (585,118) ...... (262,416)

Net income (expense) ...... 6,032,073...... (2,148,261)

Finance costs Distributions (Note 15) ...... (177,094)...... - Interest expense ...... (1,759) (462) Profit (loss) for the financial year/period before taxation ...... 5,853,220...... (2,148,723)

Taxation Withholding tax (Note 6) ...... - ...... - Profit (loss) for the financial year/period after taxation ...... 5,853,220...... (2,148,723)

Movement in adjustment from bid market prices to last traded market prices (Note 5) ...... 4,887 ...... 17,100

Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 5,858,107...... (2,131,623)

All amounts arose solely from continuing operations. There are no gains or losses other than those dealt within the Profit and Loss Account.

* For the period from 23 March 2010 (launch date) to 30 June 2010.

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

Global Dynamic Bond 45 OpenWorld plc Global Dynamic Bond

Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders

For the year ended 30 June 2011

2011 2010* USD USD Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 5,858,107...... (2,131,623)

Share transactions Net increase (decrease) in net assets resulting from redeemable participating share transactions (Note 5) ...... 2,916,953...... 36,913,186 Reinvestment of deemed distributions on accumulation shares (Note 15) ...... 18 -

Total net increase (decrease) in net assets attributable to redeemable participating shareholders ...... 8,775,078 ...... 34,781,563

Net assets attributable to redeemable participating shareholders Beginning of year/period ...... 34,781,563 ...... -

End of year/period ...... 43,556,641...... 34,781,563

* For the period from 23 March 2010 (launch date) to 30 June 2010.

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

46 Global Dynamic Bond OpenWorld plc Global Dynamic Bond

Schedule of Investments

30 June 2011

Number Fair Value Fund Number Fair Value Fund of Shares USD % of Shares USD % Transferable Securities (89.41%) Sweden (0.08%) Long Term Bonds and Notes (89.41%) Sweden, Kingdom of Australia (3.55%) SEK 200,000 5.500% due 08/10/12 ...... 33,013 0.08 Australia, Government of AUD 1,390,000 5.750% due 15/05/21 ...... 1,548,284 3.55 United Kingdom (10.83%) U.K., Government of Canada (4.81%) GBP 2,730,000 3.750% due 07/09/20 ...... 4,510,861 10.35 Canada, Government of 120,000 4.750% due 07/12/38 ...... 208,105 0.48 CAD 310,000 3.000% due 01/12/15 ...... 331,614 0.76 4,718,966 10.83 1,640,000 3.500% due 01/06/20 ...... 1,762,894 4.05 United States (30.08%) 2,094,508 4.81 International Bank for Reconstruction & Denmark (3.43%) Development Denmark, Kingdom of USD 570,000 2.125% due 15/03/16 ...... 578,329 1.33 DKK 3,500,000 6.000% due 15/11/11 ...... 691,584 1.59 MXN 4,500,000 7.500% due 05/03/20 ...... 402,881 0.92 3,850,000 4.000% due 15/11/19 ...... 800,406 1.84 U.S. Treasury Bonds 1,491,990 3.43 USD 330,000 4.250% due 15/05/39 ...... 323,710 0.74 France (1.45%) 1,000,000 4.750% due 15/02/41 ...... 1,062,969 2.44 France OAT 175,000 4.375% due 15/05/41 ...... 174,727 0.40 EUR 430,000 3.500% due 25/04/20 ...... 632,413 1.45 U.S. Treasury Notes 4,100,000 0.625% due 30/04/13 ...... 4,114,719 9.45 Germany (13.36%) 1,250,000 1.250% due 15/02/14 ...... 1,268,360 2.91 Bundesrepublik 450,000 2.250% due 31/03/16 ...... 462,834 1.06 Deutschland 2,200,000 2.000% due 30/04/16 ...... 2,233,352 5.13 3,900,000 2.500% due 04/01/21 ...... 5,439,324 12.49 400,000 1.750% due 31/05/16 ...... 400,624 0.92 290,000 3.250% due 04/07/42 ...... 381,034 0.87 920,000 1.875% due 30/09/17 ...... 899,515 2.07 5,820,358 13.36 990,000 3.625% due 15/02/21 ...... 1,032,307 2.37 Italy (4.14%) 150,000 3.125% due 15/05/21 ...... 149,579 0.34 Italy Buoni Poliennali Del Tesoro 13,103,906 30.08 1,225,000 3.750% due 01/03/21 ...... 1,644,857 3.78 Total Long Term Bonds and Notes ...... 38,944,752 89.41 120,000 5.000% due 01/09/40 ...... 158,991 0.36 Total Transferable 1,803,848 4.14 Securities ...... 38,944,752 89.41 Japan (9.80%) Japan, Government of Money Market Instruments (3.12%) JPY 330,000,000 2.100% due 20/06/29 ...... 4,268,748 9.80 United States (3.12%) U.S. Treasury Bill Luxembourg (0.52%) 1,360,000 Zero Coupon due 29/09/11 1,359,932 3.12 European Investment Total Money Market Bank Instruments ...... 1,359,932 3.12 GBP 120,000 6.000% due 07/12/28 ...... 226,783 0.52 Collective Investment Schemes (5.08%) New Zealand (4.87%) Ireland (5.08%) New Zealand, Government Russell Investment Company of III plc NZD 1,400,000 6.000% due 15/04/15 ...... 1,237,430 2.84 The U.S. Dollar Cash Fund 1,000,000 6.000% due 15/05/21 ...... 881,632 2.03 220,700 II - Class C Shares ...... 2,207,001 5.07

2,119,062 4.87 Norway (2.49%) Norway, Kingdom of NOK 5,350,000 4.500% due 22/05/19 ...... 1,082,873 2.49

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

Global Dynamic Bond 47 OpenWorld plc Global Dynamic Bond

Schedule of Investments - continued

30 June 2011

Number Fair Value Fund of Shares USD % Russell Investment Company III plc The Euro Liquidity Fund - 4 Class C Shares ...... 5,868 0.01

Total Collective Investment Schemes ...... 2,212,869 5.08

Total Investments excluding Financial Derivative Instruments ..... 42,517,553 97.61

Financial Derivative Instruments (0.41%)

Open Futures Contracts ((0.04)%)

Notional Average Unrealised Amount Cost Price Gain (Loss) Fund USD USD USD % 944,577 157.43 6 of Euro BTP Italian Government Bond Futures Long Futures Contracts Expiring September 2011 ...... (6,988) (0.02) 4,380,980 182.54 24 of German Euro Bund Futures Long Futures Contracts Expiring September 2011 ...... (14,731) (0.03) 124,281 124.28 1 of 10 Year U.S. Treasury Note Futures Long Futures Contracts Expiring September 2011 ...... (1,953) (0.01) 1,920,938 120.06 16 of 5 Year U.S. Treasury Note Futures Long Futures Contracts Expiring September 2011 ...... (13,813) (0.03) 1,098,594 122.07 9 of 30 Year U.S. Treasury Bond Futures Long Futures Contracts Expiring September 2011 ...... 8,687 0.02 3,941,625 109.49 18 of 2 Year U.S. Treasury Note Futures Long Futures Contracts Expiring September 2011 ...... 6,563 0.01 4,902,389 169.05 29 of German Euro BOBL Futures Long Futures Contracts Expiring September 2011 ...... (710) (0.00) 776,846 194.21 4 of U.K. Long Gilt Bond Futures Long Futures Contracts Expiring September 2011 ...... (5,266) (0.01) 337,147 1.69 2 of 10 Year Japan Government Bond Futures TSE Long Futures Contracts Expiring September 2011 ...... 12,135 0.03 Unrealised gain on open futures contracts ...... 27,385 0.06 Unrealised loss on open futures contracts ...... (43,461) (0.10) Net unrealised gain (loss) on open futures contracts ...... (16,076) (0.04)

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

48 Global Dynamic Bond OpenWorld plc Global Dynamic Bond

Schedule of Investments - continued

30 June 2011

Open Forward Foreign Currency Exchange Contracts (0.45%)

Unrealised Settlement Amount Amount Gain (Loss) Fund Date Bought Sold USD % 07/07/2011 AUD 4,000 EUR 2,954 (1) 0.00 07/07/2011 AUD 3,600 EUR 2,655 4 0.00 28/07/2011 AUD 518,751 USD 545,000 8,757 0.02 28/07/2011 AUD 835,731 USD 880,000 12,127 0.03 28/07/2011 AUD 434,233 USD 460,000 3,535 0.01 07/07/2011 CAD 7,000 EUR 5,025 (33) 0.00 07/07/2011 CAD 9,600 EUR 6,848 19 0.00 07/07/2011 CHF 1,500 EUR 1,230 (2) 0.00 07/07/2011 CHF 7,000 EUR 5,715 29 0.00 28/07/2011 CHF 347,243 USD 415,000 (2,543) (0.01) 28/07/2011 CHF 359,695 USD 430,000 (2,752) (0.01) 28/07/2011 CHF 479,484 USD 570,000 (466) 0.00 28/07/2011 CHF 264,452 USD 315,000 (883) 0.00 28/07/2011 CHF 479,000 USD 570,000 (1,042) 0.00 28/07/2011 CHF 268,982 USD 320,000 (501) 0.00 28/07/2011 CHF 3,505,177 USD 4,161,930 1,539 0.00 28/07/2011 CHF 497,382 USD 590,000 793 0.00 07/07/2011 EUR 1,477 AUD 2,000 1 0.00 07/07/2011 EUR 2,160 AUD 2,900 27 0.00 07/07/2011 EUR 38,842 AUD 52,602 11 0.00 07/07/2011 EUR 38,877 AUD 52,603 60 0.00 07/07/2011 EUR 38,847 AUD 52,603 17 0.00 07/07/2011 EUR 38,844 AUD 52,603 12 0.00 07/07/2011 EUR 38,877 AUD 52,603 60 0.00 07/07/2011 EUR 38,845 AUD 52,603 14 0.00 07/07/2011 EUR 4,309 CAD 6,000 31 0.00 07/07/2011 EUR 5,685 CAD 7,900 57 0.00 07/07/2011 EUR 100,828 CAD 140,444 662 0.00 07/07/2011 EUR 100,821 CAD 140,444 651 0.00 07/07/2011 EUR 100,832 CAD 140,444 668 0.00 07/07/2011 EUR 100,827 CAD 140,444 660 0.00 07/07/2011 EUR 100,836 CAD 140,444 673 0.00 07/07/2011 EUR 100,833 CAD 140,444 669 0.00 07/07/2011 EUR 816 CHF 1,000 (4) 0.00 07/07/2011 EUR 18,975 CHF 23,247 (100) 0.00 07/07/2011 EUR 18,975 CHF 23,247 (100) 0.00 07/07/2011 EUR 18,976 CHF 23,247 (100) 0.00 07/07/2011 EUR 18,978 CHF 23,247 (97) 0.00 07/07/2011 EUR 18,976 CHF 23,247 (99) 0.00 07/07/2011 EUR 18,977 CHF 23,247 (97) 0.00 07/07/2011 EUR 990 CHF 1,200 10 0.00 07/07/2011 EUR 10,296 GBP 9,000 478 0.00 07/07/2011 EUR 14,683 GBP 12,900 578 0.00 07/07/2011 EUR 272,288 GBP 237,737 13,088 0.03 07/07/2011 EUR 272,281 GBP 237,734 13,083 0.03 07/07/2011 EUR 272,279 GBP 237,734 13,080 0.03 07/07/2011 EUR 272,287 GBP 237,734 13,092 0.03 07/07/2011 EUR 272,278 GBP 237,734 13,079 0.03

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

Global Dynamic Bond 49 OpenWorld plc Global Dynamic Bond

Schedule of Investments - continued

30 June 2011

Unrealised Settlement Amount Amount Gain (Loss) Fund Date Bought Sold USD % 07/07/2011 EUR 272,277 GBP 237,734 13,077 0.03 07/07/2011 EUR 55,827 JPY 6,524,000 153 0.00 07/07/2011 EUR 83,402 JPY 9,601,000 2,029 0.01 07/07/2011 EUR 87,550 JPY 10,202,000 600 0.00 07/07/2011 EUR 1,538,182 JPY 179,507,972 7,251 0.02 07/07/2011 EUR 1,538,190 JPY 179,507,970 7,262 0.02 07/07/2011 EUR 1,538,390 JPY 179,507,970 7,552 0.02 07/07/2011 EUR 1,538,219 JPY 179,507,970 7,304 0.02 07/07/2011 EUR 1,538,109 JPY 179,507,970 7,145 0.02 07/07/2011 EUR 1,538,372 JPY 179,507,970 7,526 0.02 07/07/2011 EUR 1,863 SEK 17,100 (8) 0.00 07/07/2011 EUR 1,237 SEK 11,000 51 0.00 07/07/2011 EUR 33,898 SEK 301,541 1,363 0.00 07/07/2011 EUR 33,900 SEK 301,544 1,364 0.00 07/07/2011 EUR 33,894 SEK 301,544 1,356 0.00 07/07/2011 EUR 33,898 SEK 301,544 1,362 0.00 07/07/2011 EUR 33,900 SEK 301,544 1,364 0.00 07/07/2011 EUR 33,893 SEK 301,544 1,355 0.00 07/07/2011 EUR 1,127 SGD 2,000 5 0.00 07/07/2011 EUR 1,759 SGD 3,100 24 0.00 07/07/2011 EUR 32,933 SGD 58,405 169 0.00 07/07/2011 EUR 32,933 SGD 58,405 168 0.00 07/07/2011 EUR 32,936 SGD 58,405 173 0.00 07/07/2011 EUR 32,932 SGD 58,403 168 0.00 07/07/2011 EUR 32,934 SGD 58,405 170 0.00 07/07/2011 EUR 32,937 SGD 58,405 174 0.00 07/07/2011 EUR 48,027 USD 69,000 629 0.00 07/07/2011 EUR 71,101 USD 101,500 1,580 0.00 07/07/2011 EUR 1,318,804 USD 1,894,649 17,309 0.04 07/07/2011 EUR 1,318,971 USD 1,894,649 17,552 0.04 07/07/2011 EUR 1,318,825 USD 1,894,651 17,339 0.04 07/07/2011 EUR 1,318,812 USD 1,894,649 17,321 0.04 07/07/2011 EUR 1,318,980 USD 1,894,649 17,565 0.04 07/07/2011 EUR 1,318,852 USD 1,894,649 17,378 0.04 28/07/2011 EUR 630,300 USD 908,137 5,110 0.01 28/07/2011 EUR 738,250 USD 1,065,000 4,656 0.01 28/07/2011 EUR 539,829 USD 775,000 7,162 0.02 28/07/2011 EUR 411,448 USD 590,000 6,150 0.01 28/07/2011 EUR 597,859 USD 850,000 16,242 0.04 28/07/2011 EUR 206,806 USD 295,000 4,642 0.01 28/07/2011 EUR 408,739 USD 580,000 12,224 0.03 28/07/2011 EUR 408,739 USD 580,000 12,224 0.03 28/07/2011 EUR 771,886 USD 1,100,000 18,391 0.04 28/07/2011 EUR 616,953 USD 885,000 8,907 0.02 28/07/2011 EUR 152,931 USD 220,000 1,583 0.00 28/07/2011 EUR 1,066,128 USD 1,530,000 14,719 0.03 07/07/2011 GBP 15,800 EUR 17,904 (591) 0.00 07/07/2011 GBP 33,000 EUR 37,795 (1,815) 0.00 28/07/2011 GBP 466,775 USD 750,000 (827) 0.00 28/07/2011 GBP 363,410 USD 590,000 (6,727) (0.01) The accompanying notes are an integral part of the financial statements.

50 Global Dynamic Bond OpenWorld plc Global Dynamic Bond

Schedule of Investments - continued

30 June 2011

Unrealised Settlement Amount Amount Gain (Loss) Fund Date Bought Sold USD % 28/07/2011 GBP 261,977 USD 425,000 (4,527) (0.01) 28/07/2011 GBP 595,769 USD 955,000 1,208 0.00 28/07/2011 GBP 368,711 USD 590,000 1,780 0.00 28/07/2011 GBP 269,140 USD 430,000 1,970 0.00 28/07/2011 GBP 297,157 USD 475,000 1,937 0.00 28/07/2011 GBP 258,975 USD 415,000 654 0.00 28/07/2011 GBP 532,288 USD 850,000 4,321 0.01 28/07/2011 GBP 516,568 USD 825,000 4,090 0.01 07/07/2011 JPY 11,591,000 EUR 99,544 (790) 0.00 07/07/2011 JPY 41,713,000 EUR 357,491 (1,768) 0.00 28/07/2011 JPY 1,003,031,758 USD 12,526,936 (105,664) (0.24) 28/07/2011 JPY 33,408,330 USD 415,000 (1,280) 0.00 28/07/2011 JPY 68,183,600 USD 850,000 (5,633) (0.01) 28/07/2011 MXN 5,156,072 USD 435,417 3,395 0.01 28/07/2011 NOK 2,276,014 USD 415,000 8,594 0.02 28/07/2011 NOK 2,078,904 USD 380,000 6,909 0.02 28/07/2011 NOK 4,462,207 USD 815,000 15,470 0.04 28/07/2011 NOK 4,635,943 USD 850,000 12,805 0.03 28/07/2011 NOK 4,664,205 USD 850,000 18,065 0.04 28/07/2011 NOK 1,762,528 USD 320,000 8,028 0.02 28/07/2011 NZD 540,833 USD 440,000 5,979 0.01 28/07/2011 NZD 648,762 USD 530,000 4,980 0.01 28/07/2011 PLN 682,813 USD 246,672 1,460 0.00 07/07/2011 SEK 20,700 EUR 2,264 (2) 0.00 07/07/2011 SEK 7,000 EUR 787 (32) 0.00 28/07/2011 SEK 1,114,656 USD 175,260 1,157 0.00 28/07/2011 SEK 2,724,165 USD 425,000 6,155 0.01 07/07/2011 SGD 3,800 EUR 2,135 - 0.00 07/07/2011 SGD 9,000 EUR 5,076 (27) 0.00 28/07/2011 SGD 944,216 USD 766,907 2,263 0.01 28/07/2011 USD 2,382,340 AUD 2,256,004 (25,900) (0.06) 28/07/2011 USD 440,000 AUD 418,896 (7,163) (0.02) 28/07/2011 USD 295,000 AUD 281,084 (5,051) (0.01) 28/07/2011 USD 410,000 CAD 403,932 (8,298) (0.02) 28/07/2011 USD 670,000 CHF 565,989 (2,285) (0.01) 28/07/2011 USD 1,065,000 CHF 889,073 8,955 0.02 28/07/2011 USD 380,000 CHF 317,114 3,330 0.01 28/07/2011 USD 955,000 CHF 797,358 7,894 0.02 28/07/2011 USD 580,000 CHF 484,286 4,763 0.01 28/07/2011 USD 4,939 COP 8,820,000 (33) 0.00 28/07/2011 USD 1,045,913 DKK 5,417,827 (6,647) (0.01) 07/07/2011 USD 123,000 EUR 85,031 (275) 0.00 07/07/2011 USD 410,000 EUR 285,430 (3,807) (0.01) 28/07/2011 USD 590,000 EUR 410,172 (4,301) (0.01) 28/07/2011 USD 425,000 EUR 295,760 (3,529) (0.01) 28/07/2011 USD 585,000 EUR 410,086 (9,176) (0.02) 28/07/2011 USD 290,000 EUR 204,760 (6,679) (0.01) 28/07/2011 USD 415,000 EUR 292,315 (8,538) (0.02) 28/07/2011 USD 860,000 EUR 607,225 (19,812) (0.05) 28/07/2011 USD 730,000 EUR 515,580 (17,028) (0.04) The accompanying notes are an integral part of the financial statements.

Global Dynamic Bond 51 OpenWorld plc Global Dynamic Bond

Schedule of Investments - continued

30 June 2011

Unrealised Settlement Amount Amount Gain (Loss) Fund Date Bought Sold USD % 28/07/2011 USD 415,000 EUR 292,116 (8,248) (0.02) 28/07/2011 USD 415,000 EUR 293,726 (10,582) (0.02) 28/07/2011 USD 860,000 EUR 605,928 (17,933) (0.04) 28/07/2011 USD 1,270,000 EUR 888,131 (16,818) (0.04) 28/07/2011 USD 850,000 EUR 601,251 (21,156) (0.05) 28/07/2011 USD 825,000 EUR 582,895 (19,560) (0.04) 28/07/2011 USD 545,000 EUR 381,893 (8,328) (0.02) 28/07/2011 USD 850,000 EUR 592,264 (8,136) (0.02) 28/07/2011 USD 720,000 GBP 451,323 (4,373) (0.01) 28/07/2011 USD 700,000 GBP 436,703 (908) 0.00 28/07/2011 USD 9,661,273 GBP 5,952,725 107,160 0.25 28/07/2011 USD 850,000 GBP 524,581 8,048 0.02 28/07/2011 USD 570,000 GBP 353,965 1,887 0.00 28/07/2011 USD 530,000 GBP 328,088 3,419 0.01 28/07/2011 USD 885,000 GBP 546,857 7,296 0.02 28/07/2011 USD 860,000 GBP 531,314 7,243 0.02 28/07/2011 USD 635,000 JPY 51,548,665 (3,365) (0.01) 28/07/2011 USD 775,000 JPY 62,651,775 (863) 0.00 28/07/2011 USD 590,000 JPY 47,900,920 (3,192) (0.01) 28/07/2011 USD 295,000 JPY 23,879,365 (716) 0.00 28/07/2011 USD 630,000 JPY 50,871,240 24 0.00 28/07/2011 USD 860,000 JPY 69,112,180 4,134 0.01 28/07/2011 USD 410,000 JPY 32,866,420 2,991 0.01 28/07/2011 USD 323,248 MYR 980,960 (1,065) 0.00 28/07/2011 USD 281,556 NOK 1,549,968 (6,911) (0.02) 28/07/2011 USD 415,000 NOK 2,305,450 (14,072) (0.03) 28/07/2011 USD 1,633,335 NZD 2,013,976 (27,422) (0.06) 28/07/2011 USD 705,000 NZD 881,140 (21,602) (0.05) 28/07/2011 USD 440,000 NZD 543,243 (7,967) (0.02) Unrealised gain on open forward foreign currency exchange contracts ...... 663,776 1.50 Unrealised loss on open forward foreign currency exchange contracts ...... (470,250) (1.05) Net unrealised gain (loss) on open forward foreign currency exchange contracts ...... 193,526 0.45 Total Financial Derivative Instruments ...... 177,450. 0.41

Total Financial Assets at Fair Value through Profit or Loss ...... 43,208,714 99.17 Total Financial Liabilities at Fair Value through Profit or Loss ...... (513,711) (1.15)

Fair Value Fund USD % Net Financial Assets at Fair Value through Profit or Loss (98.02%) ...... 42,695,003 ...... 98.02 Other Net Assets (1.93%) ...... 839,651 ...... 1.93 Adjustment from Bid Market Prices to Last Traded Market Prices (0.05%) ...... 21,987 ...... 0.05 Net Assets (100.00%) ...... 43,556,641 ...... 100.00

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

52 Global Dynamic Bond OpenWorld plc Global Dynamic Bond

Schedule of Investments - continued

30 June 2011

% of Analysis of total assets (unaudited) total assets Transferable securities and money market instruments admitted to an official stock exchange listing or traded on a regulated market ...... 91.26 Collective investment schemes ...... 5.01 Exchange traded financial derivative instruments ...... 0.06 Over the counter financial derivative instruments ...... 1.50 Other assets ...... 2.17 100.00

The broker for the open futures contracts is Newedge USA, LLC.

The counterparties for the open forward foreign currency exchange contracts are:

Barclays Bank Natixis BNP Paribas Royal Bank of Scotland Brown Brothers Harriman Société Generale Citibank State Street Bank Deutsche Bank UBS JP Morgan Chase Bank Westpac Banking Corporation Morgan Stanley

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

Global Dynamic Bond 53 OpenWorld plc Global Dynamic Bond

Statement of Changes in Composition of Portfolio (Unaudited)

Listed below are the 20 largest cumulative investment purchases and sales during the year ended 30 June 2011

Acquisition Cost Disposal Proceeds Portfolio Securities USD Portfolio Securities USD Russell Investment Company III plc Russell Investment Company III plc The U.S. Dollar Cash Fund II The U.S. Dollar Cash Fund II Class C Shares 28,752,000 Class C Shares (26,546,846) Germany, Government of Germany, Government of 3.250% due 04/01/2020 11,220,353 3.250% due 04/01/2020 (13,522,434) U.S. Treasury Bill U.S. Treasury Notes Zero coupon due 29/09/2011 10,701,727 0.625% due 31/12/2012 (9,773,969) U.S. Treasury Notes 0.625% due 31/01/2013 (9,417,471) 0.625% due 31/12/2012 9,801,422 U.S. Treasury Bill 0.625% due 31/01/2013 9,379,123 Zero coupon due 29/09/2011 (9,347,688) 1.250% due 30/09/2015 8,549,766 Germany, Government of Germany, Government of 2.250% due 10/04/2015 (8,673,700) 2.250% due 10/04/2015 8,295,253 U.S. Treasury Note Italy, Government of 1.250% due 30/09/2015 (8,495,271) 3.750% due 01/03/2021 6,713,599 Japan, Government of U.S. Treasury Note 1.800% due 20/09/2016 (6,460,600) 0.625% due 30/04/2013 6,018,066 Russell Investment Company III plc Japan, Government of The Sterling Liquidity Fund 2.100% due 20/06/2029 5,212,465 Class C Shares (5,169,621) Germany, Government of Italy, Government of 2.500% due 04/01/2021 5,193,331 3.750% due 01/03/2021 (5,104,036) Russell Investment Company III plc U.S. Treasury Notes The Sterling Liquidity Fund 1.000% due 30/04/2012 (4,359,150) Class C Shares 5,108,649 1.875% due 30/09/2017 (3,698,128) U.S. Treasury Notes 3.500% due 15/05/2020 (3,645,055) 1.875% due 30/09/2017 4,795,695 Russell Investment Company III plc 2.625% due 15/08/2020 3,676,148 The Euro Liquidity Fund 3.500% due 15/05/2020 3,558,520 Class A Shares (3,566,556) Russell Investment Company III plc U.S. Treasury Note The Euro Liquidity Fund 2.625% due 15/08/2020 (3,517,476) Class A Shares 3,543,245 Germany, Government of U.K. Government of 3.250%% due 04/07/2015 (3,497,606) 3.750% due 07/09/2020 3,515,293 U.S. Treasury Note U.S. Treasury Note 1.000% due 15/07/2013 (3,126,825) 1.000% due 15/07/2013 3,137,488 U.S. Treasury Bond (2,802,544) Italy, Government of 4.25% due 15/05/2039 3.000% due 15/06/2015 2,633,119 U.S. Treasury Notes U.S. Treasury Note 1.875% due 30/06/2015 (2,636,253) 1.875% due 30/06/2015 2,600,080 1.250% due 31/08/2015 (2,573,530)

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.

54 Global Dynamic Bond OpenWorld plc Global Focus Equity

Manager’s Report

Money Manager Thornburg Investment Management Inc.

Investment Objective The Fund aims to provide long-term capital appreciation from a portfolio comprised predominantly of equities and equity-related instruments.

Fund Performance During the year ended 30 June 2011, the Fund returned 1.8 per cent since inception (11 March 2011) on a gross of fee basis (1.7 per cent on a net of fees basis), versus a 1.3 per cent for the benchmark* (All returns are in USD).

Market Comment Market volatility continued as the sovereign debt crisis remained unresolved, while concerns about the U.S. debt ceiling added to the insecurity. The markets saw a small relief rally towards the end of the quarter as Greece voted in favor of austerity measures.

General Comment on Money Manager/Performance Although the sharp rebound in cyclicals at the end of the second quarter of 2011 impacted the Fund negatively, its defensive bias contributed positively for the second quarter as a whole. Clearly the Fund’s bias towards the higher yielding and lower beta areas, along with telecoms and consumer staples contributed positively. Stocks that did particularly well included McDonalds (doing well with their healthy menu and continued expansion into China), Sysco (able to pass on higher input prices to end customers) and Foster’s Group (spun off the wine business and the beer unit is now itself becoming a target for acquisition). Conversely, stocks that had a negative impact included Canadian Oil Sands (highly geared to the price of oil), Marine Harvest (excess supply of salmon in the market depressed prices more than anticipated) and KPN (lowered guidance). Although there was some portfolio activity during the quarter, it was mostly for stock specific reasons as opposed to a change in the structure of the portfolio. NWS Holdings (building rail terminals in China and also have several toll-roads in Hong Kong and China), CEZ (the Czech gas utility company to benefit from concerns over nuclear power) and Cable & Wireless (streamlining their assets by disposing of underperforming assets) were added to the portfolio. Stocks sold from the portfolio included Treasury Wine Estates (price rallied after Foster spun this wine unit out and profits were taken) and Redecard (business model expected to be impacted negatively with fierce competition entering the market). Finally, in Italy, Intesa was sold, and Telecom Italia bought as The Money Manager felt less comfortable with banking exposure in Italy in the current climate.

Outlook The supply/demand picture has certainly eased in the grain markets, but summer weather remains the most important price factor going forward.

Past performance is no indication of current or future performance. The reference to a benchmark is used for illustrative purposes only.

* Benchmark Source: MSCI World Index Net

Russell Investments Ireland Limited July 2011

Global Focus Equity 55 OpenWorld plc Global Focus Equity

Balance Sheet

As at 30 June 2011

30 June 2011 USD Assets Financial assets at fair value through profit or loss (Note 1) ...... 205,710,527

Cash at bank (Note 4) ...... 946,658 Cash held with broker and counterparties for open derivative positions (Note 4) ...... 700,000

Debtors: Receivable for investments sold ...... 346,060 Dividends receivable ...... 825,904 Other receivables ...... 7,903 208,537,052 Liabilities Financial liabilities at fair value through profit or loss (Note 1) ...... (47,562)

Creditors – amounts falling due within one year: Cash due to brokers and counterparties for open derivative positions (Note 4) ...... (103,566) Management fees payable ...... (92,729) Custodian and Trustee fees payable ...... (1,686) Sub-custodian fees payable ...... (7,287) Administration fees payable ...... (3,363) Performance fees payable ...... (70,590) Audit fees payable ...... (34,422) Miscellaneous fees payable ...... (11,787) (372,992)

Net assets attributable to redeemable participating shareholders (at bid market prices) ...... 208,164,060

Adjustment from bid market prices to last traded market prices (Note 5) ...... 191,977

Net asset value attributable to redeemable participating shareholders (at last traded market prices) ...... 208,356,037

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

56 Global Focus Equity OpenWorld plc Global Focus Equity

Profit and Loss Account

For the period ended 30 June 2011

2011* USD Income Dividends ...... 4,201,702 Bank and short term investment interest ...... 748 4,202,450

Net gain (loss) on investment activities (Note 8) ...... 6,749,126

Total investment income (expense) ...... 10,951,576

Expenses Management fees (Note 3) ...... (335,129) Custodian and Trustee fees (Note 3) ...... (6,093) Sub-custodian fees (Note 3) ...... (18,210) Administration and transfer agency fees (Note 3) ...... (14,969) Audit fees (Note 3) ...... (34,422) Professional fees ...... (17,069) Performance fees (Note 3) ...... (70,590) Miscellaneous fees ...... (10,551) Total operating expenses ...... (507,033)

Net income (expense) ...... 10,444,543

Finance costs Distributions (Note 15) ...... (188,578) Interest expense ...... (337) Profit (loss) for the financial period before taxation ...... 10,255,628

Taxation Withholding tax (Note 6) ...... (784,626) Profit (loss) for the financial period after taxation ...... 9,471,002

Adjustment from bid market prices to last traded market prices (Note 5) ...... 191,977

Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 9,662,979

All amounts arose solely from continuing operations. There are no gains or losses other than those dealt within the Profit and Loss Account.

* For the period from 15 March 2011 (launch date) to 30 June 2011.

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

Global Focus Equity 57 OpenWorld plc Global Focus Equity

Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders

For the period ended 30 June 2011

2011* USD Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 9,662,979

Share transactions Net increase (decrease) in net assets resulting from redeemable participating share transactions (Note 5) ...... 198,504,480 Reinvestment of deemed distributions on accumulation shares (Note 15) ...... 188,578

Total net increase (decrease) in net assets attributable to redeemable participating shareholders ...... 208,356,037

Net assets attributable to redeemable participating shareholders Beginning of period ...... -

End of period ...... 208,356,037

* For the period from 15 March 2011 (launch date) to 30 June 2011.

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

58 Global Focus Equity OpenWorld plc Global Focus Equity

Schedule of Investments

30 June 2011

Number Fair Value Fund Number Fair Value Fund of Shares USD % of Shares USD % Transferable Securities (94.74%) Communications Equipment Common Stock (94.74%) 270,700 China Mobile ...... 2,503,051 1.20 Australia (9.26%) Diversified Financials Beverages Hong Kong Exchanges and 161,200 Clearing ...... 3,378,855 1.62 545,480 Foster’s Group ...... 3,007,552 1.44 Holding Companies - Diversified Operations Communications Equipment 689,000 NWS Holdings ...... 913,797 0.44 1,884,751 Telstra Corporation Ltd ...... 5,831,482 2.80 Internet Software and Services 9,276,851 4.45 394,469 Seek ...... 2,715,507 1.30 Ireland (0.72%) Multi -Line Retail Airlines 627,975 David Jones ...... 2,722,855 1.31 289,086 Ryanair Holdings ...... 1,490,011 0.72 Oil and Gas 147,900 Origin Energy ...... 2,497,048 1.20 Israel (1.42%) Real Estate Biotechnology 2,693,225 Dexus Property Group ...... 2,522,945 1.21 Teva Pharmaceutical 61,200 Industries ...... 2,949,840 1.42 19,297,389 9.26

Bermuda (1.63%) Italy (6.12%) Oil and Gas Banks 95,842 Seadrill Ltd ...... 3,390,361 1.63 742,850 Intesa Sanpaolo ...... 1,976,332 0.95

Communications Equipment

Brazil (1.35%) 1,524,000 Telecom Italia ...... 2,117,873 1.02 Personal Products Electric Utilities 113,100 Natura Cosmeticos ...... 2,819,808 1.35 756,182 Enel ...... 4,922,610 2.36 Oil and Gas Canada (2.12%) 158,475 ENI ...... 3,740,571 1.79

Oil and Gas 12,757,386 6.12 Canadian Oil Sands 153,700 Trust ...... 4,424,190 2.12 Netherlands (4.01%) Communications Equipment China (1.29%) 289,796 Koninklijke KPN ...... 4,210,008 2.02 Banks Oil and Gas Industrial & Commercial 58,200 Royal Dutch Shell ...... 4,140,348 1.99 3,547,000 Bank of China ...... 2,689,452 1.29 8,350,356 4.01 Norway (1.99%) Czech Republic (0.56%) Food Products Electric Utilities 1,571,431 Marine Harvest ASA ...... 1,266,997 0.61 22,500 CEZ ...... 1,155,651 0.56 Insurance Gjensidige Forsikring France (3.85%) 232,281 ASA ...... 2,868,094 1.38 Communications Equipment 4,135,091 1.99 72,188 France Telecom ...... 1,534,864 0.74 Singapore (1.82%) Electric Utilities Communications Equipment 84,021 GDF Suez ...... 3,074,071 1.48 Singapore 1,480,000 Telecommunications ...... 3,797,654 1.82 Oil and Gas 58,934 Total ...... 3,403,718 1.63 South Africa (1.30%) 8,012,653 3.85 Metals and Mining Hong Kong (4.45%) Impala Platinum Commercial Services and Supplies 101,001 Holdings ...... 2,712,381 1.30 Hopewell Highway 3,815,500 Infrastructure ...... 2,481,148 1.19

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

Global Focus Equity 59 OpenWorld plc Global Focus Equity

Schedule of Investments - continued

30 June 2011

Number Fair Value Fund Number Fair Value Fund of Shares USD % of Shares USD % Spain (2.24%) Food Products Communicatio ns Equipment 112,900 Kraft Foods ...... 3,976,338 1.91 174,389 Telefonica ...... 4,262,844 2.04 170,700 Sysco Corp ...... 5,324,133 2.55 Diversified Financials Household Products Bolsasy Mercados 52,000 Kimberly Clark Corp ...... 3,459,560 1.66 13,752 Espanoles ...... 408,935 0.20 Metals and Mining 4,671,779 2.24 64,500 Southern Copper Corp ...... 2,120,115 1.02 Switzerland (6.91%) Other Finance Banks 132,600 Ares Capital ...... 2,130,882 1.02 Banque Cantonale KKR Financial 6,010 Vaudoise ...... 3,601,004 1.73 349,300 Holdings ...... 3,423,140 1.65 St Galler Real Estate Investment Trusts 6,357 Kantonalbank ...... 3,488,045 1.67 Annaly Capital Management Biotechnology 114,000 International ...... 2,054,280 0.98 83,022 Novartis ...... 5,073,019 2.43 Chimera Investment Food Products 335,600 Corp ...... 1,161,176 0.56 36,200 Nestle ...... 2,244,228 1.08 346,300 MFA Financial ...... 2,784,252 1.34

14,406,296 6.91 Restaurants 75,100 McDonald’s Corp ...... 6,329,428 3.04 Taiwan (1.09%) Semiconductor Equipment and Products Semiconductor Equipment and Products Taiwan Semiconductor 230,000 Intel Corp ...... 5,092,200 2.44 180,600 Manufacturing (ADR) ...... 2,273,754 1.09 Software 224,300 Microsoft ...... 5,827,314 2.80 Thailand (1.49%) Tobacco Philip Morris Communications Equipment 78,300 International ...... 5,225,742 2.51 922,800 Advanced Info Service ...... 3,108,537 1.49 73,700 Universal ...... 2,777,753 1.33

73,503,890 35.28 United Kingdom (5.84%) Total Common Stock ...... 197,392,997 94.74 Communications Equipment Cable & Wireless Total Transferable 197,392,997 94.74 1,857,400 Worldwide ...... 1,373,194 0.66 Securities ...... 2,004,901 Vodafone Group ...... 5,320,627 2.55 Oil and Gas Collective Investment Schemes (3.83%) 75,500 Ensco (ADR) ...... 4,024,905 1.93 Ireland (3.83%) Russell Investment Company Other Finance III plc 381,333 Man Group Plc ...... 1,450,941 0.70 The U.S. Dollar Cash Fund 12,169,667 5.84 797,539 II - Class C Shares ...... 7,975,388 3.83 Russell Investment Company United States (35.28%) III plc Aerospace and Defence The Euro Liquidity Fund - 32,500 Lockheed Martin ...... 2,631,525 1.26 1 Class C Shares ...... 139 0.00 Beverages Total Collective Investment 88,400 The Coca-Cola Co ...... 5,947,552 2.85 Schemes ...... 7,975,527 3.83 Biotechnology Total Investments excluding Financial 243,200 Pfizer ...... 5,007,488 2.40 Derivative Instruments ..... 205,368,524 98.57 Commercial Services and Supplies 110,400 Paychex ...... 3,389,280 1.63 Communications Equipment Verizon 53,600 Communications ...... 1,994,456 0.96 Electric Utilities 41,700 Entergy Corp ...... 2,847,276 1.37

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

60 Global Focus Equity OpenWorld plc Global Focus Equity

Schedule of Investments - continued

30 June 2011

Financial Derivative Instruments (0.14%)

Open Futures Contracts (0.14%)

Notional Average Unrealised Amount Cost Price Gain (Loss) Fund USD USD USD % 146,988 2,939.77 1 of Hang Seng Index Futures Long Futures Contracts Expiring July 2011 ...... 2,873 0.00 975,271 9,752.71 10 of FTSE 100 Index Futures Long Futures Contracts Expiring September 2011 ...... 27,654 0.01 5,166,338 1,359.56 76 of S&P 500 E Mini Index Futures Long Futures Contracts Expiring September 2011 ...... 167,438 0.08 1,671,937 4,287.02 39 of Euro Stoxx 50 Index Futures Long Futures Contracts Expiring September 2011 ...... 61,561 0.03 372,219 4,962.92 3 of ASX SPI 200 Index Futures Long Futures Contracts Expiring September 2011 ...... 2,782 0.00 483,504 805.84 3 of S&P TSE 60 Index Futures Long Futures Contracts Expiring September 2011 ...... 9,645 0.00 993,338 11.04 9 of Topix Index Futures Long Futures Contracts Expiring September 2011 ...... 46,644 0.02 366,983 7,339.67 5 of Swiss Market Index Futures Long Futures Contracts Expiring September 2011 ...... (475) 0.00 Unrealised gain on open futures contracts ...... 318,597 0.14 Unrealised loss on open futures contracts ...... (475) 0.00 Net unrealised gain (loss) on open futures contracts ...... 318,122 0.14

Open Forward Foreign Currency Exchange Contracts (0.00%)

Unrealised Settlement Amount Amount Gain (Loss) Fund Date Bought Sold USD % 21/09/2011 AUD 51,667 USD 54,261 512 0.00 21/09/2011 AUD 51,667 USD 54,256 517 0.00 21/09/2011 AUD 51,665 USD 54,234 537 0.00 21/09/2011 AUD 51,667 USD 54,236 537 0.00 21/09/2011 AUD 51,667 USD 54,235 537 0.00 21/09/2011 AUD 51,667 USD 54,210 563 0.00 21/09/2011 AUD 50,000 USD 52,125 880 0.00 21/09/2011 CAD 50,000 USD 51,198 509 0.00 21/09/2011 CAD 50,000 USD 50,896 811 0.00 21/09/2011 CAD 79,167 USD 80,837 1,033 0.00 21/09/2011 CAD 79,167 USD 80,835 1,034 0.00 21/09/2011 CAD 79,167 USD 80,835 1,035 0.00 21/09/2011 CAD 79,165 USD 80,824 1,044 0.00

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

Global Focus Equity 61 OpenWorld plc Global Focus Equity

Schedule of Investments - continued

30 June 2011

Unrealised Settlement Amount Amount Gain (Loss) Fund Date Bought Sold USD % 21/09/2011 CAD 79,167 USD 80,819 1,050 0.00 21/09/2011 CAD 79,167 USD 80,819 1,051 0.00 21/09/2011 CHF 43,335 USD 51,787 (294) 0.00 21/09/2011 CHF 43,333 USD 51,779 (288) 0.00 21/09/2011 CHF 43,333 USD 51,766 (275) 0.00 21/09/2011 CHF 43,333 USD 51,764 (273) 0.00 21/09/2011 CHF 43,333 USD 51,760 (269) 0.00 21/09/2011 CHF 43,333 USD 51,757 (266) 0.00 21/09/2011 CHF 50,000 USD 59,431 (18) 0.00 21/09/2011 EUR 100,000 USD 143,006 1,659 0.00 21/09/2011 EUR 200,000 USD 283,146 6,183 0.00 21/09/2011 EUR 168,335 USD 245,530 (2,010) 0.00 21/09/2011 EUR 168,333 USD 245,497 (1,980) 0.00 21/09/2011 EUR 168,333 USD 245,481 (1,964) 0.00 21/09/2011 EUR 168,333 USD 245,481 (1,963) 0.00 21/09/2011 EUR 168,333 USD 245,480 (1,962) 0.00 21/09/2011 EUR 168,333 USD 245,442 (1,924) 0.00 21/09/2011 EUR 100,000 USD 144,732 (68) 0.00 21/09/2011 GBP 100,000 USD 159,662 728 0.00 21/09/2011 GBP 87,500 USD 143,051 (2,710) 0.00 21/09/2011 GBP 87,500 USD 143,028 (2,687) 0.00 21/09/2011 GBP 87,500 USD 143,025 (2,683) 0.00 21/09/2011 GBP 87,500 USD 143,017 (2,675) 0.00 21/09/2011 GBP 87,500 USD 143,007 (2,666) 0.00 21/09/2011 GBP 87,500 USD 143,007 (2,666) 0.00 21/09/2011 GBP 50,000 USD 81,739 (1,544) 0.00 21/09/2011 GBP 50,000 USD 81,043 (848) 0.00 21/09/2011 HKD 198,333 USD 25,500 1 0.00 21/09/2011 HKD 198,333 USD 25,504 (3) 0.00 21/09/2011 HKD 198,335 USD 25,504 (3) 0.00 21/09/2011 HKD 198,333 USD 25,502 (1) 0.00 21/09/2011 HKD 198,333 USD 25,502 (1) 0.00 21/09/2011 HKD 198,333 USD 25,502 (1) 0.00 21/09/2011 JPY 4,750,000 USD 59,572 (730) 0.00 21/09/2011 JPY 4,750,000 USD 59,564 (723) 0.00 21/09/2011 JPY 4,750,000 USD 59,563 (721) 0.00 21/09/2011 JPY 4,750,000 USD 59,557 (715) 0.00 21/09/2011 JPY 4,750,000 USD 59,549 (708) 0.00 21/09/2011 JPY 4,750,000 USD 59,532 (690) 0.00 21/09/2011 JPY 5,000,000 USD 62,318 (380) 0.00 21/09/2011 JPY 10,000,000 USD 124,221 (344) 0.00 21/09/2011 USD 163,575 GBP 100,000 3,185 0.00 21/09/2011 USD 213,713 EUR 150,000 (3,284) 0.00 21/09/2011 USD 287,730 EUR 200,000 (1,599) 0.00 21/09/2011 USD 70,847 CAD 70,000 (1,543) 0.00 21/09/2011 USD 143,132 EUR 100,000 (1,532) 0.00 05/07/2011 USD 344,633 NOK 1,856,766 (1,427) 0.00

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

62 Global Focus Equity OpenWorld plc Global Focus Equity

Schedule of Investments - continued

30 June 2011

Unrealised Settlement Amount Amount Gain (Loss) Fund Date Bought Sold USD % 21/09/2011 USD 111,779 GBP 70,000 (494) 0.00 21/09/2011 USD 185,660 JPY 15,000,000 (155) 0.00 Unrealised gain on open forward foreign currency exchange contracts ...... 23,406 0.00 Unrealised loss on open forward foreign currency exchange contracts ...... (47,087) 0.00 Net unrealised gain (loss) on open forward foreign currency exchange contracts ...... (23,681) 0.00 Total Financial Derivative Instruments ...... 294,441. 0.14

Total Financial Assets at Fair Value through Profit or Loss ...... 205,710,527 98.71 Total Financial Liabilities at Fair Value through Profit or Loss ...... (47,562) 0.00

Fair Value Fund USD % Net Financial Assets at Fair Value through Profit or Loss (98.71%) ...... 205,662,965...... 98.71 Other Net Assets (1.20%) ...... 2,501,095 ...... 1.20 Adjustment from Bid Market Prices to Last Traded Market Prices (0.09%) ...... 191,977 ...... 0.09 Net Assets (100.00%) ...... 208,356,037 ...... 100.00

% of Analysis of total assets (unaudited) total assets Transferable securities admitted to an official stock exchange listing or traded on a regulated market ...... 94.70 Collective investment schemes ...... 3.83 Exchange traded financial derivative instruments ...... 0.15 Over the counter financial derivative instruments ...... (0.01) Other assets ...... 1.33 100.00

The broker for the open futures contracts is UBS.

The counterparties for the open forward foreign currency exchange contracts are:

Bank of America Mellon Bank BNP Paribas SA Royal Bank of Scotland Brown Brothers Harriman Société Generale Credit Suisse State Street Bank Deutsche Bank AG UBS HSBC Bank Westpac Banking Corporation JP Morgan Chase Bank

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

Global Focus Equity 63 OpenWorld plc Global Focus Equity

Statement of Changes in Composition of Portfolio (Unaudited)

Listed below are the 20 largest cumulative investment purchases and total sales during the period from 11 March 2011 to 30 June 2011

Acquisition Cost Disposal Proceeds Portfolio Securities USD Portfolio Securities USD Russell Investment Company III plc Russell Investment Company III plc The U.S. Dollar Cash Plus Fund II The U.S. Dollar Cash Plus Fund II Class C Shares 38,158,000 Class C Shares (30,184,968) The Coca-Cola Co 5,788,448 Russell Investment Company III plc Microsoft Corp 5,698,790 The Euro Liquidity Fund McDonald’s Corp 5,642,789 Class C Shares (4,814,882) Vodafone Group 5,563,056 Marine Harvest ASA (1,700,833) Telstra Corporation Ltd 5,375,811 Bolsasy Mercados Espanoles (1,561,847) Pfizer 5,355,846 Lockheed Martin (1,203,906) Philip Morris International 4,910,741 Foster’s Group (1,174,366) Russell Investment Company III plc France Telecom (1,089,263) The Euro Liquidity Fund Redecard (1,006,974) Class C Shares 4,805,016 Treasury Wine Estates Ltd (933,473) Sysco Corp 4,776,086 Entergy Corp (714,828) Koninklijke KPN 4,715,020 Gjensidige Forsikring (700,389) Canadian Oil Sands Trust 4,705,035 Telstra Corporation Ltd (550,619) Intel Corp 4,645,310 Pfizer (542,719) Novartis 4,497,471 Natura Cosmeticos (403,996) Enel 4,295,246 Taiwan Semiconductor Manufacturing (ADR) (319,773) Ensco Plc (ADR) 4,232,803 Industrial & Commercial Bank of China (289,072) Telefonica SA 4,203,591 The Coca-Cola Co (213,347) Foster’s Group 4,133,501 Intesa Sanpaolo (132,037) Royal Dutch Shell Plc (ADR) 3,939,722 Hopewell Highway Infrastructure (43,559) Lockheed Martin 3,804,866

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.

64 Global Focus Equity OpenWorld plc Global High Dividend Equity

Manager’s Report

Money Manager Thornburg Investment Management, Inc.

Investment Objective The Fund aims to provide long-term capital appreciation from a portfolio comprised predominantly of equities and equity-related instruments.

Fund Performance During the year ended 30 June 2011, the Fund returned 28.4 per cent on a gross of fee basis (27.1 per cent on a net of fees basis), versus a 31.2 per cent for the benchmark* (All returns are in USD).

Market Comment The recovery in the global economy continued in the second half of 2010, although its momentum moderated somewhat. The pace of the recovery remains uneven across regions. The growth rate in most advanced economies remains subdued in an environment of weak credit and labour markets. In contrast emerging economies, most notably China, continue to pace ahead. The Federal Reserve easing plans, the Eurozone sovereign debt crisis along with increasing signs of inflation especially in the emerging world including China set the scene for increased market volatility in the fourth quarter. Various international leaders expressed their concerns regarding the continuation of measures quantitative easing in the U.S. as energy and agricultural commodity prices continued their upward trajectory pushing inflation rates higher.

Although the markets continued to rally into the new year on the back of optimism over an economic recovery (and of course thanks to QEII), they came under pressure first by the Middle East uprisings in mid-February, and then by the Japanese tragedy in March, only to rebound in the last two weeks to end the first quarter marginally up. The market volatility carried over into the second quarter as the sovereign debt crisis remained unresolved, while concerns about the U.S. debt ceiling added to the insecurity. The markets saw a small relief rally towards the end of the quarter as Greece voted in favour of austerity measures.

General Comment on Money Manager/Performance Had it not been for the strong market rally in September 2010, the Fund would have posted another strong quarter in the third quarter of 2010. Instead, its defensive nature meant it finished the quarter slightly behind. Offshore drilling company, Seadrill, a stock they only bought in the previous quarter, performed well for the Fund. The company not only benefited from having no exposure to the Gulf of Mexico, but also boasts the youngest fleet of deep-sea offshore drilling rigs in the industry. Southern Copper was another strong performer at the back of higher copper prices and an increase in restocking of inventories. The company is also set to benefit from higher production, now that production in one of their Mexican mines has come back on stream after years of falling victim to labour strikes that turned violent. Positions that did not perform well included the Australian telecom incumbent, Telstra (uncertainty with regards to the National Broadband Network and ultimate revenue sharing arrangement despite progress in its wireless and broadband distribution), and U.S. food distribution company, Sysco Corp (expectations of continued weak demand in the primary restaurant delivery services).

Given the market’s preference for the more cyclical areas of the market towards the latter half of the fourth quarter of 2010, it came as little surprise that the Fund underperformed. On the whole, both higher dividend yielding and lower beta stocks - areas that this Fund will typically be overweight - underperformed. Commodity related stocks performed well for the Fund. Southern Copper, which has one of the world’s largest copper reserves, was once again a top contributor to the Fund’s performance. It benefited not only from higher copper prices, but also from the market anticipating much higher production from the company as one of its four mines comes back on-line after some operational issues for more than a year. Impala Platinum Holdings, which operates mines and refineries primarily for Platinum Group Metals (PGMs) such as palladium, rhodium and nickel, was another strong performer. With its significant scale, reserves, and refinery capacity the company operates at the lower end of the cost curve, which allows for strong operating leverage with higher PGM prices. A stock that did not perform well for the Fund was Brazilian card company, Redecard. Although its “volumes for payment processing and merchant acquiring maintains double digit growth rates, competitive pressures have continued to drive the per transaction pricing lower.” Although this pricing trend is expected to remain for several quarters, the Money Manager observes that the company should be able to remain profitable given it is the second largest in its industry in Brazil – an industry in which companies rely on economies of scale and high volumes for profitability.

The defensively biased Fund finished the first quarter of 2011 flat after trailing in the first few weeks when the more cyclical and higher beta areas of the market performed strongly. Stocks that did particularly well for the Fund included Canadian Oil Sands (benefitted from higher oil prices and producing in safe jurisdiction), Enel (Italian utility benefiting from higher electricity prices in Europe, a better strategic plan and an improving balance sheet), and Pfizer (new management continued to communicate plans for improvement such as divesting non-pharmaceutical business units and restructuring its R&D processes to improve the pipeline). Conversely, two of the three largest detractors were stocks that were top contributors in the fourth quarter of 2010. Both Impala Platinum and Southern Copper were impacted negatively due to political reasons. The former by a perceived threat of the Zimbabwean government taking a 51 per cent control in mineral extraction companies, and the latter by Peru’s leading presidential candidate wanting to increase mining taxes from 30 per cent to 45 per cent. Impala’s production levels also came in Global High Dividend Equity 65 OpenWorld plc Global High Dividend Equity

Manager’s Report - continued lower than expectations. Microsoft was another detractor as the PC refresh cycle remains weak and excitement over tablet PCs continue to concern investors.

Although the sharp rebound in cyclicals at the end of the second quarter of 2011 impacted the Fund negatively, its defensive bias contributed positively for the quarter as a whole. Clearly the Fund’s bias towards the higher yielding and lower beta areas, along with telecoms and consumer staples contributed positively. Stocks that did particularly well included McDonalds (doing well with their healthy menu and continued expansion into China), Sysco (able to pass on higher input prices to end customers) and Foster’s Group (spun off the wine business and the beer unit is now itself becoming a target for acquisition). Conversely, stocks that had a negative impact included Canadian Oil Sands (highly geared to the price of oil), Marine Harvest (excess supply of salmon in the market depressed prices more than anticipated) and KPN (lowered guidance). Although there was some portfolio activity during the quarter, it was mostly for stock specific reasons as opposed to a change in the structure of the portfolio. NWS Holdings (building rail terminals in China and also have several toll-roads in Hong Kong and China), CEZ (the Czech gas utility company to benefit from concerns over nuclear power) and Cable & Wireless (streamlining their assets by disposing of underperforming assets) were added to the portfolio. Stocks sold from the portfolio included Treasury Wine Estates (price rallied after Foster spun this wine unit out and profits were taken) and Redecard (business model expected to be impacted negatively with fierce competition entering the market). Finally, in Italy, Intesa was sold, and Telecom Italia bought as the Money Manager felt less comfortable with banking exposure in Italy in the current climate.

Outlook Although the Money Manager remains concerned about developments in Europe, they are not getting overly cautious in their outlook. They do observe inflation in the system and their exposure to energy and strong franchise companies in consumer staples (companies that can pass on higher input prices) reflects that. Furthermore, they remain positive on emerging markets as they expect the most growth opportunities arising from these markets.

Past performance is no indication of current or future performance. The reference to a benchmark is used for illustrative purposes only.

* Benchmark Source: Russell Global Index Net TR

Russell Investments Ireland Limited July 2011

66 Global High Dividend Equity OpenWorld plc Global High Dividend Equity

Balance Sheet

As at 30 June 2011

30 June 2011 30 June 2010 USD USD Assets Financial assets at fair value through profit or loss (Note 1) ...... 106,016,848 27,599,408

Cash at bank (Note 4) ...... 454,142...... 316,465 Cash held with brokers and counterparties for open derivative positions (Note 4) ...... 595,000...... 152,500

Debtors: Receivable for investments sold ...... 163,563 170,019 Receivable on fund shares issued ...... 2,084,567 - Dividends receivable ...... 414,515...... 152,450 Other receivables ...... 39,040...... - 109,767,675 28,390,842 Liabilities Financial liabilities at fair value through profit or loss (Note 1) ...... - (58,533)

Creditors – amounts falling due within one year: Cash due to brokers and counterparties for open derivative positions (Note 4) ...... (52,717)...... - Payable for investments purchased ...... (2,577,506)...... (43,653) Management fees payable ...... (103,889) ...... (13,159) Custodian and Trustee fees payable ...... (833) (231) Sub-custodian fees payable ...... (3,914) ...... - Administration fees payable ...... (1,665) .... (463) Professional fees payable ...... (8,535) ...... (17,665) Performance fees payable ...... - ...... (20,321) Audit fees payable ...... (32,406)...... (26,201) Miscellaneous fees payable ...... (5,186) ...... (9,565) (2,786,651) (189,791)

Net assets attributable to redeemable participating shareholders (at bid market prices) ...... 106,981,024 ...... 28,201,051

Adjustment from bid market prices to last traded market prices (Note 5) ...... 123,087 27,505

Net asset value attributable to redeemable participating shareholders (at last traded market prices) ...... 107,104,111...... 28,228,556

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

Global High Dividend Equity 67 OpenWorld plc Global High Dividend Equity

Profit and Loss Account

For the year ended 30 June 2011

2011 2010* USD USD Income Dividends ...... 3,419,904 . 747,545 Bank and short term investment interest ...... 311 747 3,420,215 748,292

Net gain (loss) on investment activities (Note 8) ...... 8,040,229 ...... (2,140,001)

Total investment income (expense) ...... 11,460,444...... (1,391,709)

Expenses Management fees (Note 3) ...... (663,191) ...... (60,761) Custodian and Trustee fees (Note 3) ...... (7,590) (1,090) Sub-custodian fees (Note 3) ...... (42,037) ..... - Administration and transfer agency fees (Note 3) ...... (45,201) ... (3,235) Audit fees (Note 3) ...... (32,406)...... (26,201) Professional fees ...... (44,771)...... (17,665) Performance fees (Note 3) ...... (377) ...... (20,321) Miscellaneous fees ...... (58,688)...... (15,654) Total operating expenses ...... (894,261) ...... (144,927)

Net income (expense) ...... 10,566,183...... (1,536,636)

Finance costs Distributions (Note 15) ...... (1,712,784)...... (124,221) Interest expense ...... (286) (770) Profit (loss) for the financial year/period before taxation ...... 8,853,113...... (1,661,627)

Taxation Withholding tax (Note 6) ...... (577,153) ...... (138,560) Profit (loss) for the financial year/period after taxation ...... 8,275,960...... (1,800,187)

Movement in adjustment from bid market prices to last traded market prices (Note 5) ...... 95,582 ...... 27,505

Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 8,371,542...... (1,772,682)

All amounts arose solely from continuing operations. There are no gains or losses other than those dealt within the Profit and Loss Account.

* For the period from 19 February 2010 (launch date) to 30 June 2010.

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

68 Global High Dividend Equity OpenWorld plc Global High Dividend Equity

Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders

For the year ended 30 June 2011

2011 2010* USD USD Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 8,371,542...... (1,772,682)

Share transactions Net increase (decrease) in net assets resulting from redeemable participating share transactions (Note 5) ...... 70,217,800...... 30,001,238 Reinvestment of deemed distributions on accumulation shares (Note 15) ...... 286,213 -

Total net increase (decrease) in net assets attributable to redeemable participating shareholders ...... 78,875,555 ...... 28,228,556

Net assets attributable to redeemable participating shareholders Beginning of year/period ...... 28,228,556 ...... -

End of year/period ...... 107,104,111...... 28,228,556

* For the period from 19 February 2010 (launch date) to 30 June 2010.

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

Global High Dividend Equity 69 OpenWorld plc Global High Dividend Equity

Schedule of Investments

30 June 2011

Number Fair Value Fund Number Fair Value Fund of Shares USD % of Shares USD % Transferable Securities (95.33%) Communications Equipment Common Stock (95.33%) 134,998 China Mobile ...... 1,248,271 1.17 Australia (9.29%) Diversified Financials Beverages Hong Kong Exchanges and 79,100 Clearing ...... 1,657,987 1.55 270,049 Foster's Group ...... 1,488,939 1.39 Holding Companies - Diversified Operations Communications Equipment 480,000 NWS Holdings ...... 636,607 0.59 1,026,339 Telstra ...... 3,175,527 2.96 Real Estate Construction and Engineering 231,000 Hopewell Holdings ...... 724,356 0.68 106,011 MAP Group ...... 377,939 0.35 Internet Software and Services 5,450,262 5.09 173,745 Seek ...... 1,196,053 1.12 Ireland (0.49%) Multi -Line Retail Airl ines 305,245 David Jones ...... 1,323,520 1.24 102,900 Ryanair Holdings ...... 530,369 0.49 Oil and Gas 73,619 Origin Energy ...... 1,242,936 1.16 Israel (1.79%) Real Estate Biotechnology 1,228,155 Dexus Property Group ...... 1,150,505 1.07 Teva Pharmaceutical 39,740 Industries ...... 1,915,468 1.79 9,955,419 9.29

Bermuda (1.52%) Italy (6.03%) Oil and Gas Banks 46,000 Seadrill Ltd ...... 1,627,226 1.52 333,160 Intesa Sanpaolo ...... 886,363 0.83

Communications Equipment

Brazil (1.35%) 762,200 Telecom Italia ...... 1,059,214 0.99 Personal Products Electric Utilities 58,211 Natura Cosmeticos ...... 1,451,316 1.35 364,172 Enel ...... 2,370,695 2.21 Oil and Gas Canada (2.24%) 90,976 ENI ...... 2,147,356 2.00

Oil and Gas 6,463,628 6.03 83,300 Canadian Oil Sands Trust .... 2,397,756 2.24 Korea, Republic of (1.42%)

Communications Equipment

China (1.58%) 10,103 SK Telecom ...... 1,523,517 1.42 Banks Industrial & Commercial 2,226,000 Bank of China ...... 1,687,826 1.58 Malaysia (0.23%) Entertainment Berjaya Sports Toto

Czech Republic (0.61%) 165,000 BHD ...... 244,262 0.23 Electric Utilities

12,700 CEZ ...... 652,301 0.61 Netherlands (3.58%)

Communications Equipment

France (4.01%) 135,750 Koninklijke KPN ...... 1,972,106 1.84 Communications Equipment Oil and Gas 36,088 France Telecom ...... 767,304 0.72 26,110 Royal Dutch Shell ...... 1,857,466 1.74 Electric Utilities 3,829,572 3.58 41,200 GDF Suez ...... 1,507,382 1.41 Norway (1.86%) Oil and Gas Food Products 34,954 Total ...... 2,018,759 1.88 719,707 Marine Harvest ASA ...... 580,278 0.54 4,293,445 4.01 Insurance Hong Kong (5.09%) Gjensidige Forsikring Commercial Services and Supplies 114,740 ASA ...... 1,416,754 1.32 Hopewell Highway 1,997,032 1.86 1,819,276 Infrastructure ...... 1,183,041 1.10 The accompanying notes are an integral part of the financial statements.

70 Global High Dividend Equity OpenWorld plc Global High Dividend Equity

Schedule of Investments - continued

30 June 2011

Number Fair Value Fund Number Fair Value Fund of Shares USD % of Shares USD % Singapore (1.69%) Beverages Communications Equipment 43,496 Coca-Cola ...... 2,926,411 2.73 Singapore Biotechnology 712,373 Telecommunications ...... 1,810,528 1.69 119,060 Pfizer ...... 2,451,445 2.29 Commercial Services and Supplies South Africa (1.39%) 57,051 Paychex ...... 1,751,466 1.64 Metals and Mining Communications Equipment Impala Platinum 21,000 Verizon Communications ... 781,410 0.73 55,267 Holdings ...... 1,484,195 1.39 Diversified Financials Och-Ziff Capital Spain (2.26%) 59,570 Management Group LLC .... 826,832 0.77 Communications Equipment Electric Utilities 90,776 Telefonica ...... 2,218,970 2.07 20,326 Entergy Corp ...... 1,387,859 1.30 Diversified Financials Food Products Bolsas y Mercados 53,770 Kraft Foods ...... 1,893,780 1.77 6,800 Espanoles ...... 202,207 0.19 73,880 Sysco Corp ...... 2,304,317 2.15 2,421,177 2.26 Household Products Switzerland (5.82%) 26,280 Kimberly Clark Corp ...... 1,748,408 1.63 Banks Metals and Mining 2,526 Banque Cantonale Vaudoise 1,513,500 1.41 39,497 Southern Copper Corp ...... 1,298,266 1.21 2,120 St Galler Kantonalbank ...... 1,163,230 1.09 Other Finance Biotechnology 61,210 Ares Capital ...... 983,645 0.92 41,037 Novartis ...... 2,507,546 2.34 164,483 KKR Financial Holdings .... 1,611,933 1.50 Food Products Real Estate Investment Trusts 16,900 Nestle ...... 1,047,720 0.98 Annaly Capital Management 6,231,996 5.82 50,423 International ...... 908,622 0.85 Taiwan (1.06%) 240,369 Chimera Investment Corp ... 831,677 0.78 Semiconductor Equipment and Products 173,087 MFA Financial ...... 1,391,620 1.30 Taiwan Semiconductor Restaurants 89,823 Manufacturing (ADR) ...... 1,130,872 1.06 36,081 McDonald's Corp ...... 3,040,907 2.84 Savings and Loans Thailand (1.39%) 76,600 Capitol Federal Financial .... 900,816 0.84 Communications Equipment Semiconductor Equipment and Products 442,879 Advanced Info Service ...... 1,491,879 1.39 116,654 Intel Corp ...... 2,582,719 2.41 Software United Kingdom (5.63%) 111,050 Microsoft ...... 2,885,079 2.69 Communications Equipment 37,488,123 35.00 Cable & Wireless Total Common Stock ...... 102,109,768 95.33 931,300 Worldwide ...... 688,520 0.65 Total Transferable 1,014,047 Vodafone Group ...... 2,691,088 2.51 Securities ...... 102,109,768 95.33 Oil and Gas 38,230 Ensco (ADR) ...... 2,038,041 1.90 Collective Investment Schemes (3.48%) Other Finance Ireland (3.48%) 161,357 Man Group Plc ...... 613,950 0.57 Russell Investment Company 6,031,599 5.63 III plc The U.S. Dollar Cash United States (35.00%) 372,439 Fund II - Class C Shares ... 3,724,390 3.48 Aerospace and Defence Total Collective Investment 15,966 Lockheed Martin ...... 1,292,767 1.21 Schemes ...... 3,724,390 3.48 Agriculture Total Investments 38,097 Philip Morris International .. 2,542,594 2.37 excluding Financial Derivative Instruments ..... 105,834,158 98.81 30,394 Universal ...... 1,145,550 1.07

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

Global High Dividend Equity 71 OpenWorld plc Global High Dividend Equity

Schedule of Investments - continued

30 June 2011

Financial Derivative Instruments (0.17%)

Open Futures Contracts (0.17%)

Notional Average Unrealised Amount Cost Price Gain (Loss) Fund USD USD USD % 665,483 1,109.14 12 of MSCI Emerging Market EMINI Futures Long Futures Contracts Expiring September 2011 ...... 28,117 0.03 2,035,225 1,272.02 32 of S&P 500 E Mini Index Futures Long Futures Contracts Expiring September 2011 ...... 69,575 0.06 1,716,697 1,634.95 21 of MSCI EAFE EMINI Index Futures Long Futures Contracts Expiring September 2011 ...... 84,998 0.08 Net unrealised gain (loss) on open futures contracts ...... 182,690 0.17 Total Financial Derivative Instruments ...... 182,690 0.17

Fair Value Fund USD % Total Financial Assets at Fair Value through Profit or Loss (98.98%) ...... 106,016,848...... 98.98 Other Net Assets (0.90%) ...... 964,176 ...... 0.90 Adjustment from Bid Market Prices to Last Traded Market Prices (0.12%) ...... 123,087 ...... 0.12 Net Assets (100.00%) ...... 107,104,111 ...... 100.00

% of Analysis of total assets (unaudited) total assets Transferable securities admitted to an official stock exchange listing or traded on a regulated market ...... 93.02 Collective investment schemes ...... 3.39 Exchange traded financial derivative instruments ...... 0.17 Other assets ...... 3.42 100.00

The broker for the open futures contracts is UBS.

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

72 Global High Dividend Equity OpenWorld plc Global High Dividend Equity

Statement of Changes in Composition of Portfolio (Unaudited)

Listed below are the 20 largest cumulative investment purchases and sales during the year ended 30 June 2011

Acquisition Cost Disposal Proceeds Portfolio Securities USD Portfolio Securities USD Russell Investment Company III plc Russell Investment Company III plc The U.S. Dollar Cash Fund II The U.S. Dollar Cash Fund II Class C Shares 64,123,000 Class C Shares (60,401,639) Russell Investment Company III plc Russell Investment Company III plc The U.S. Dollar Cash Fund II The U.S. Dollar Cash Fund II Class A Shares 16,271,000 Class A Shares (17,217,000) Pfizer 2,422,290 Eli Lilly & Co (981,993) Microsoft 2,334,192 Redecard (953,927) Telstra 2,253,293 Russell Investment Company III plc Teva Pharmaceutical Industries 1,985,340 The Euro Liquidity Fund Coca-Cola 1,924,265 Class A Shares (948,421) McDonald’s Corp 1,890,631 Dominion Resources (831,481) Telefonica 1,870,789 EI du Pont de Nemours & Co (820,599) Vodafone Group 1,831,970 Lorillard (808,974) Royal Dutch Shell 1,749,176 Qwest Communications International (738,467) Novartis 1,736,546 Bolsas y Mercados Espanoles (713,702) Koninklijke KPN 1,723,721 Metcash Ltd (692,210) Intel Corp 1,702,523 AllianceBernstein Holding (679,235) Singapore Telecommunications 1,684,562 Berjaya Sports Toto BHD (639,073) Kraft Foods 1,675,748 CenturyLink (530,655) Kimberly Clark Corp 1,669,175 France Telecom (526,342) GDF Suez 1,580,820 Marine Harvest ASA (480,976) SK Telecom 1,549,916 Russell Investment Company III plc Ensco (ADR) 1,540,398 The Euro Liquidity Fund Class C Shares (426,146) Treasury Wine Estates Ltd (417,439) Foster’s Group (383,500) Huntington Bancshares Inc (343,489)

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.

Global High Dividend Equity 73 OpenWorld plc Global Listed Infrastructure

Manager’s Report

Money Manager RARE Infrastructure Limited

Investment Objective The Fund aims to provide long-term capital appreciation from a portfolio comprised predominantly of equities, equity-related instruments and trust units.

Fund Performance During the year ended 30 June 2011, the Fund returned 42.2 per cent on a gross of fee basis (39.7 per cent on a net of fees basis), versus a 30.8 per cent for the benchmark* (All returns are in USD).

Market Comment The recovery in the global economy continued in the second half of 2010, although its momentum moderated somewhat. The pace of the recovery remains uneven across regions. The growth rate in most advanced economies remains subdued in an environment of weak credit and labour markets. In contrast emerging economies, most notably China, continue to pace ahead. The Federal Reserve easing plans, the Eurozone sovereign debt crisis along with increasing signs of inflation especially in the emerging World including China set the scene for increased market volatility in the fourth quarter. Various international leaders expressed their concerns regarding the continuation of quantitative easing measures in the U.S. as energy and agricultural commodity prices continued their upward trajectory pushing inflation rates higher.

Markets continued to be volatile in the first quarter, as the Japanese tragedy and the ongoing sovereign debt crisis had a profound effect on markets in the first quarter, the volatility continued into the second quarter as the sovereign debt crisis remained un- resolved while the QEII programme reached it conclusion and speculation concerning the outcome of the U.S. debt ceiling negotiations intensified.

General Comment on Money Manager/Performance By positing its fourth consecutive quarter of outperformance in the third quarter of 2010, the Fund is now comfortably ahead of its benchmark since inception in April of last year. Although a very strong quarter for the markets, it was not smooth sailing as a very weak August was sandwiched between two very strong months as investors swayed between being optimistic and pessimistic in regards to global economic growth. Although the Fund benefitted from sector allocation, it was really stock selection that drove performance for the quarter. It was particularly strong in electric utilities and Highways and Railtracks. Within the former Red Electrica benefitted from the Spain bounce and Australian company, SP Ausnet profited from the market getting comfortable with a couple of extraneous risks such as liability for recent bush fires and the tax audit being conducted. Within the latter, Intoll Group and Abertis performed strongly as both were subject to take over bids by Canada Pension Plan and CVC Capital Partners respectively. A position in the logistics company, Shenzhen International (toll roads and logistics parks in South East China) was also a strong performer as the market felt that China would be able to engineer a soft landing and export growth will be fine. Stock selection was also strong in the U.S. with investors preferring the comfort of defensive names with good dividend yields such as ITC Holdings and Northeast Utilities. The Money Manager is taking some profits in the former at the back of very strong performance in the last nine months or so. A stock that did not do well was Chinese airport company, Beijing Capital International Airport. The stock was affected by on-going uncertainty pertaining to treatment of taxes from the airport’s retail outlets.

With yet another quarter of outperformance in the fourth quarter of 2010, its fifth consecutive one, the Fund delivered very strong numbers for the year as a whole. By maintaining a relatively balanced portfolio throughout the year between the defensive, regulated assets (utilities) and the more cyclical, transport assets (toll roads, rail tracks, airports and ports), the Money Managers let stock selection drive performance. It was particularly strong within electric utilities (ITC and Northeast), Highways and Railtracks (Abertis and Ecorodovias Infraestrutura), and Marine Ports and Services (Dubai Ports World). A position of nearly 10 per cent in Brazil was also a strong contributor. For the fourth quarter, Vinci performed strongly on the back of good traffic volumes on its toll roads and after concerns over European debt subsided somewhat, which was impacting infrastructure stocks. Dubai Ports World was also strong as volumes at their ports were encouraging, and concerns over its parent company’s debt look to be abating. A listing in London this year has also been driving the stock higher. On-going concerns over Portuguese and Spanish debt affected the electric utilities companies Energias de Portugal (EDP) and Red Electrica. The former has now been sold out of the portfolio as RARE Infrastructure Limited increased the discount rate applied to Portuguese stocks. Other stocks sold out of the portfolio included China Merchants Holdings, CEZ and Wisconsin (on valuation). Beijing Capital International was also sold as the Money Manager could not get comfortable with the ongoing uncertainty regarding the treatment of taxes from the airport’s retail outlets. Stocks purchased for the portfolio included All America Latina Logistics, Westar Energy and Atlantia.

After lagging for the first half of the first quarter of 2011, the Fund rebounded strongly in the second to finish the quarter up - its sixth consecutive one. Although the Fund was already rebounding before the Japan tragedy, the event provided a further boost to relative performance as it had no exposure to Japan (poor regulatory environment and weak returns) and especially none to the operator of the Fukushima nuclear plant, TEPCO. Along with TEPCO, stock selection was particularly strong within electric 74 Global Listed Infrastructure OpenWorld plc Global Listed Infrastructure

Manager’s Report - continued utilities with exposure to Spanish and Portuguese companies, Red Electrica and EDP respectively. Whereas both benefitted from a bounce in Iberian stocks, the former was also positively impacted by a good set of full year results. Based on their concerns over Portugal, RARE Infrastructure Limited took profits on the EDP bounce and sold their holding in January. Other stocks to contribute positively included Vinci (strong 2010, and company in good healthy position with lower debt and good cash flows), and Abertis (traffic on French toll-roads was strong on the back of a strong German economy). Conversely, the primary drag on performance was being underweight the Oil and Gas Storage and Transportation sector, and also not owning big constituents Williams and El Paso within it, which RARE Infrastructure Limited believe are more oil E&P stocks than infrastructure stocks.

In what was clearly a volatile period for the markets, the Fund continued on its strong run and outperformed strongly. Although country allocation and currency effect had a positive impact on performance, it was stock selection across various sectors and countries that was the primary driver for performance. Airport Services company, MAp Group did particularly well at the back of their agreement to swap their stakes in Bruxelles and Copenhagen airports for Sydney airport plus cash with Ontario Teachers. Investors see this as a good deal especially as MAp could pay a special dividend (with the cash received) once the deal goes through. RARE Infrastructure Limited also view the Sydney Airport asset favourably. Northumbrian Water was another strong performer at the back of strong U.K. RPI numbers (positive impact on their cash flows as linked to this inflation measure) and a takeover bid by CKI Holdings of Hong Kong for the company towards the end of the second quarter of 2011. Finally, Australian utility company, Spark Infrastructure benefited from the company buying out the management contract for the assets (from a third party) and taking the management in-house. Conversely, Shenzhen International detracted from performance due to rumours that the Chinese government was worried about rising costs of logistics (moving goods across the country), which would impact toll roads negatively.

Outlook Although they are less certain now than they were last quarter, RARE Infrastructure Limited feel this is a soft patch from an economic perspective and they expect us to muddle through and recover in the second half of the year. They will change this base case if they do not see improvements in U.S. housing market, consumer (employment) and the ISM numbers by early in the fourth quarter. The portfolio continues to offer a very attractive dividend yield of over 4 per cent.

Past performance is no indication of current or future performance. The reference to a benchmark is used for illustrative purposes only.

* Benchmark Source: S&P Global Infrastructure Index Net

Russell Investments Ireland Limited July 2011

Global Listed Infrastructure 75 OpenWorld plc Global Listed Infrastructure

Balance Sheet

As at 30 June 2011

30 June 2011 30 June 2010 USD USD Assets Financial assets at fair value through profit or loss (Note 1) ...... 97,816,132 44,387,912

Cash at bank (Note 4) ...... 568,563...... 181,737

Debtors: Receivable for investments sold ...... 22,566 1,339 Receivable on fund shares issued ...... 40,378 6,876,527 Dividends receivable ...... 579,265...... 366,292 Other receivables ...... 35,851...... 181,247 99,062,755 51,995,054 Liabilities Creditors – amounts falling due within one year: Payable for investments purchased ...... (537,533)...... - Management fees payable ...... (70,025) ...... (38,865) Custodian and Trustee fees payable ...... (771) (317) Sub-custodian fees payable ...... (6,768) ...... (12,065) Administration fees payable ...... (1,543) .... (748) Professional fees payable ...... (8,535) ...... (17,665) Performance fees payable ...... (1,255,497) ...... (80,461) Audit fees payable ...... (22,933...... ) (18,341) Miscellaneous fees payable ...... (62,564) ...... (17,908) (1,966,169) (186,370)

Net assets attributable to redeemable participating shareholders (at bid market prices) ...... 97,096,586 ...... 51,808,684

Adjustment from bid market prices to last traded market prices (Note 5) ...... 236,791 110,397

Net asset value attributable to redeemable participating shareholders (at last traded market prices) ...... 97,333,377...... 51,919,081

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

76 Global Listed Infrastructure OpenWorld plc Global Listed Infrastructure

Profit and Loss Account

For the year ended 30 June 2011

2011 2010 USD USD Income Dividends ...... 3,408,439 . 2,220,386 Bank and short term investment interest ...... 29 120 3,408,468 2,220,506

Net gain (loss) on investment activities (Note 8) ...... 21,666,964 ...... (458,226)

Total investment income (expense) ...... 25,075,432...... 1,762,280

Expenses Management fees (Note 3) ...... (678,189) ...... (471,196) Custodian and Trustee fees (Note 3) ...... (11,301)...... (4,365) Sub-custodian fees (Note 3) ...... (43,867) ..... (34,090) Administration and transfer agency fees (Note 3) ...... (50,106) ... (23,097) Audit fees (Note 3) ...... (22,933)...... (18,341) Professional fees ...... (53,493)...... (17,711) Performance fees (Note 3) ...... (1,314,899) ...... (80,461) Miscellaneous fees ...... (78,437)...... (33,190) Total operating expenses ...... (2,253,225) ...... (682,451)

Net income (expense) ...... 22,822,207...... 1,079,829

Finance costs Distributions (Note 15) ...... (1,247,982)...... (712,361) Interest expense ...... (356) (689) Profit (loss) for the financial year before taxation ...... 21,573,869 366,779

Taxation Capital gains tax ...... - (458) Withholding tax (Note 6) ...... (384,753) ...... (286,268) Profit (loss) for the financial year after taxation ...... 21,189,116 80,053

Movement in adjustment from bid market prices to last traded market prices (Note 5) ...... 126,394 ...... 33,911

Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 21,315,510...... 113,964

All amounts arose solely from continuing operations. There are no gains or losses other than those dealt within the Profit and Loss Account.

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

Global Listed Infrastructure 77 OpenWorld plc Global Listed Infrastructure

Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders

For the year ended 30 June 2011

2011 2010 USD USD Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 21,315,510...... 113,964

Share transactions Net increase (decrease) in net assets resulting from redeemable participating share transactions (Note 5) ...... 22,850,804...... 22,509,554 Reinvestment of deemed distributions on accumulation shares (Note 15) ...... 1,247,982 712,361

Total net increase (decrease) in net assets attributable to redeemable participating shareholders ...... 45,414,296 ...... 23,335,879

Net assets attributable to redeemable participating shareholders Beginning of year ...... 51,919,081...... 28,583,202

End of year ...... 97,333,377 51,919,081

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

78 Global Listed Infrastructure OpenWorld plc Global Listed Infrastructure

Schedule of Investments

30 June 2011

Number Fair Value Fund Number Fair Value Fund of Shares USD % of Shares USD % Transferable Securities (97.25%) Electric Utilities Common Stock (97.25%) 63,297 GDF Suez ...... 2,315,843 2.38 Australia (15.68%) Transportation Equipment Commercial Services and Supplies 135,600 Groupe Eurotunnel ...... 1,514,603 1.55 2,816,173 ConnectEast Group ...... 1,371,822 1.41 11,460,364 11.77 502,205 Transurban Group ...... 2,806,588 2.89 Germany (2.02%) Construction and Engineering Construction and Engineering 1,438,603 MAp Group ...... 5,128,759 5.27 Fraport Frankfurt Airport Electric Utilities 24,484 Services Worldwide ...... 1,967,660 2.02 1,596,813 SP AusNet ...... 1,606,974 1.65 Utilities Hong Kong (3.36%) 386,657 APA Group ...... 1,684,796 1.73 Commercial Services and Supplies Spark Infrastructure Shenzhen International 1,924,969 Group ...... 2,658,524 2.73 42,369,382 Holdings ...... 3,267,037 3.36 15,257,463 15.68 Brazil (9.78%) India (0.98%) Commercial Services and Supplies Gas Utilities Cia de Concessoes 96,525 GAIL India ...... 948,677 0.98 18,900 Rodoviarias ...... 561,949 0.58 EcoRodovias Infraestrutura 226,900 e Logistica ...... 1,931,682 1.98 Italy (1.84%) Electric Utilities Commercial Services and Supplies Cia Energetica de Minas 84,345 Atlantia SPA ...... 1,793,958 1.84 65,700 Gerais ...... 1,325,565 1.36 67,240 Light SA ...... 1,256,782 1.29 Luxembourg (3.81%) 131,700 Tractebel Energia SA ...... 2,309,861 2.38 Communications Equipment Transportation Equipment 132,582 SES SA ...... 3,709,921 3.81 All America Latina 254,300 Logistica ...... 2,137,276 2.19 Mexico (1.37%) 9,523,115 9.78 Commercial Services and Supplies Canada (4.51%) 671,200 OHL Mexico SAB de CV ... 1,330,735 1.37 Electric Utilities

100,285 TransCanada Corp ...... 4,385,066 4.51 New Zealand (1.94%)

Construction and Engineering Chile (2.30%) Auckland International Water Utilities 1,033,634 Airport ...... 1,892,300 1.94 4,139,960 Aguas Andinas ...... 2,235,428 2.30 Portugal (0.58%) Cyprus (0.63%) Commercial Services and Supplies Transportation Services Brisa Auto-Estradas de Global Ports 92,733 Portugal ...... 565,492 0.58 35,000 Investments ...... 610,400 0.63 Singapore (1.43%) Czech Republic (0.52%) Transportation Equipment Electric Utilities 1,489,749 Singapore Post Inc ...... 1,395,578 1.43 9,789 CEZ ...... 502,785 0.52 Spain (11.15%) France (11.77%) Commercial Services and Supplies Construction and Engineering 202,598 Abertis Infraestructuras ...... 4,525,011 4.65 20,567 Aeroports de Paris ...... 1,932,871 1.99 Electric Utilities 88,961 Vinci ...... 5,697,047 5.85 53,977 Red Electrica Corp ...... 3,248,902 3.34

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

Global Listed Infrastructure 79 OpenWorld plc Global Listed Infrastructure

Schedule of Investments - continued

30 June 2011

Number Fair Value Fund Number Fair Value Fund of Shares USD % of Shares USD % Gas Utilities 42,029 Pinnacle West Capital ...... 1,871,972 1.92 127,162 Enagas ...... 3,078,907 3.16 88,589 Southern Co ...... 3,576,338 3.67 10,852,820 11.15 108,409 Spectra Energy Corp ...... 2,970,406 3.05 United Arab Emirates (2.05%) 22,003 Westar Energy ...... 592,101 0.61 Commercial Services and Supplies Water Utilities 163,488 DP World Ltd ...... 1,994,553 2.05 78,900 American Water Works ...... 2,323,605 2.39 14,583,274 14.98 United Kingdom (6.55%) Total Common Stock ...... 94,652,159 97.25 Electric Utilities Total Transferable Securities ...... 94,652,159 97.25 364,900 National Grid ...... 3,588,203 3.69 Water Utilities 204,189 Northumbrian Water Group 1,362,401 1.40 Collective Investment Schemes (3.25%) 60,337 Severn Trent ...... 1,424,929 1.46 Ireland (3.25%) Russell Investment Company 6,375,533 6.55 III plc United States (14.98%) The U.S. Dollar Cash Fund Electric Utilities 316,397 II - Class C Shares ...... 3,163,973 3.25 38,782 ITC Holdings Inc ...... 2,784,160 2.86 Total Collective Investment Schemes ...... 3,163,973 3.25 13,209 Northeast Utilities ...... 464,692 0.48

Fair Value Fund USD % Total Financial Assets at Fair Value through Profit or Loss (100.50%) ...... 97,816,132 ...... 100.50 Other Net Liabilities ((0.74)%) ...... (719,546)...... (0.74) Adjustment from Bid Market Prices to Last Traded Market Prices (0.24%) ...... 236,791 ...... 0.24 Net Assets (100.00%) ...... 97,333,377...... 100.00

% of Analysis of total assets (unaudited) total assets Transferable securities admitted to an official stock exchange listing or traded on a regulated market ...... 95.55 Collective investment schemes ...... 3.19 Other assets ...... 1.26 100.00

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

80 Global Listed Infrastructure OpenWorld plc Global Listed Infrastructure

Statement of Changes in Composition of Portfolio (Unaudited)

Listed below are the 20 largest cumulative investment purchases and sales during the year ended 30 June 2011

Acquisition Cost Disposal Proceeds Portfolio Securities USD Portfolio Securities USD Russell Investment Company III plc Russell Investment Company III plc The U.S. Dollar Cash Fund II The U.S. Dollar Cash Fund II Class C Shares 47,177,044 Class C Shares (44,015,521) Russell Investment Company III plc Russell Investment Company III plc The U.S. Dollar Cash Fund II The U.S. Dollar Cash Fund II Class A Shares 18,888,000 Class A Shares (20,212,044) MAp Group 3,071,302 Northeast Utilities (3,264,312) Abertis Infraestructuras 2,886,498 Energias de Portugal (2,682,775) Vinci 2,751,311 Edison International (2,392,129) Enagas 2,721,919 ITC Holdings Inc (2,105,146) TransCanada Corp 2,498,527 Abertis Infraestructuras (2,014,535) American Water Works Co Inc 2,343,060 Union Pacific Corp (2,003,675) Aguas Andinas SA 2,215,541 Intoll Group (1,876,924) All America Latina Logistica 2,202,323 Spectra Energy Corp (1,565,358) Spectra Energy Corp 2,150,450 Red Electrica Corp (1,511,119) Southern Co 2,128,006 Cia Energetica de Minas Gerais (1,258,924) Spark Infrastructure Group 2,120,772 Westar Energy (1,177,894) Pinnacle West Capital 1,814,024 Eletropaulo Metropolitana Eletricidade Atlantia SPA 1,729,319 de Sao Paulo (1,134,235) Transurban Group 1,723,012 National Grid (1,123,098) Fraport Frankfurt Airport Services Worldwide 1,678,897 Singapore Post Inc (953,380) Westar Energy 1,661,462 Northumbrian Water Group (923,879) SES SA 1,632,629 TransCanada Corp (812,036) APA Group 1,564,178 QR National (809,678) Snam Rete Gas (773,277)

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.

Global Listed Infrastructure 81 OpenWorld plc Global Opportunistic Listed Property

Manager’s Report

Money Manager CB Richard Ellis Global Real Estate

Investment Objective The Fund aims to provide long-term capital appreciation from a portfolio comprised predominantly of equities, equity-related instruments and trust units.

Fund Performance During the year ended 30 June 2011, the Fund returned 29.9 per cent on a gross of fee basis (27.1 per cent on a net of fees basis), versus a 32.5 per cent for the benchmark* (All returns are in USD).

Market Comment The recovery in the global economy continued in the second half of 2010, although its momentum was moderating somewhat. The pace of the recovery remains uneven across regions. The growth rate in most advanced economies remains subdued in an environment of weak credit and labour markets. In contrast emerging economies, most notably China, continue to pace ahead. The Federal Reserve easing plans, the Eurozone sovereign debt crisis along with increasing signs of inflation especially in the emerging world including China set the scene for increased market volatility in the fourth quarter. Various international leaders expressed their concerns regarding the continuation of quantitative easing measures in the U.S. as energy and agricultural commodity prices continued their upward trajectory pushing inflation rates higher.

Real Estate Investment Trust performance remained remarkably resilient in spite of multiple large-scale shocks to the economy during the first quarter of 2011, including the uprising in the Middle East, the disaster in Japan, rising energy prices and a continuation of the sovereign debt concerns in Europe. The volatility continued in the second quarter. Real Estate Investment Trust performance continued to run up in April, before reaching a plateau and reversing in May and June, before finally rebounding again in the last week of the second quarter, in line with the general market sentiment.

General Comment on Manager/Performance Although the Fund delivered a strong absolute return in the third quarter of 2010, CB Richard Ellis Global Real Estate’s quality bias caused the Fund to trail relative to the rallying benchmark as the market sentiment changed once again. Currency movements had a big impact on the quarterly returns as the USD depreciated against most major currencies. Thus the combined currency effect of the Fund’s overweight to Australia and underweight to the U.S. contributed significantly to performance for the quarter. Australia and Singapore remains the Fund’s two largest overweights. Stock selection was particularly strong in Australia, where the ING Office Fund outperformed as the company renewed its home market focus after selling off its Canadian allocation. In Europe performance was supported by the performance of Eurocommercial N.V. one of the Money Manager’s favourite regional picks due to its relatively attractive valuation and yield characteristics, in addition Norwegian Property rebounded after a weak second quarter. U.K. homebuilder St. Modwen Properties Plc. suffered based on their house-building exposure and liquidity concerns. In the U.S., Digital Realty Trust detracted from performance following a nice run. The Money Manager is confident that the fundamental value drivers for the company are still intact, given the growing global demand for data centers, and that recent developments were purely caused by contagion from the share price tumble of struggling competitor Equinix Inc. The Money Manager’s underweight allocation to the Japanese market was detrimental to performance, as the Money Manager did not anticipate the sentiment change caused by government intervention. The Money Manager is however determined to stick to its fundamental strategy of picking quality companies, rather than attempting to play the short term momentum game.

The Fund continued to deliver strong absolute returns in a volatile fourth quarter of 2010, but the Money Manager’s quality bias caused the Fund to underperform relative to the rising benchmark*. Global sales and pricing has rebounded with the FTSE Global Real Estate Index outperforming global bond and equity markets in 2010. Prices are however still trailing well below their pre- crisis peak levels. From a regional perspective the U.S. is still trading at relatively high cap rates compared to EMEA and Asia Pacific. Real Estate Investment Trusts are currently trading at a modest premium to NAV. Dividend yields are increasingly appealing and the current cash flow growth rebound is likely to continue to drive dividend growth. There is a strong demand for prime assets in the market place, as they are to some extent seen as bond equivalents, offering relatively attractive yields. Digital realty trust was the largest detractor from performance in the fourth quarter. Issues related to a specific tenant was interpreted to have sector wide negative implications, as markets factored in perceived growth in supply, but failed to appreciate the even faster pace of demand growth. Stock selection in the U.S. was generally a key detractor from performance in the fourth quarter. The Money Manager’s underweight to Japan hurt performance over the quarter as Japan took quantitative easing to the next level buying Real Estate Investment Trusts with the intention of inflating the economy via increasing real estate prices. The Money Manager remains underweight the Japanese market as they deem the rally to be based on short-term sentiment rather than long- term valuations. On a positive note the Money Manager benefited from being underweight Hong Kong, and from its overweight allocation and stock selection in the Netherlands.

The Fund posted strong returns from its European holdings as core Eurozone economies (France in particular) performed strongly on the back of the strengthening Euro. In Singapore, new capital raisings weighed on the market in the first quarter of 2011, and as a consequence CapitaLand and Global Logistic Properties (GLP) were amongst the largest detractors from performance over 82 Global Opportunistic Listed Property OpenWorld plc Global Opportunistic Listed Property

Manager’s Report - continued the quarter. GLP’s underperformance was partly driven by the company’s significant exposure in Japan. On a positive note, the Money Manager benefited from not holding some of the largest Japanese ROECs as their performance was hampered by the effects of the Japanese earthquake. The Money Manager reduced their exposure to the Australian and Canadian markets over the first quarter and used some of the proceeds to reduce their underweight in the strong performing U.S. market. In the U.S., the Money Manager added exposure to SL Green Realty Corp. The stock is expected to benefit from limited supply in the New York Office market.

The Fund underperformed its benchmark marginally during a volatile second quarter of 2011. From a sector perspective, the Fund performance was mainly driven by stock selection over the quarter. Allgreen Properties (Singapore, diversified) was the biggest contributor to performance as the stock gained more than 50 per cent due to surprisingly buoyant results. The Money Manager is anticipating government measures to curb demand in the booming Singaporean real estate market as investments from speculators are driving up prices. The Money Manager has now taken profits from this stock off the table. Global Logistic Properties (The Money Manager’s largest Singaporean holding) also performed strongly. In Brazil, the CEO of Gafisa (residential) stepped down unexpectedly in May causing a drop in the stock price. Despite this, the Money Manager remains confident in the long term prospects of the company. Stockland (Australia, residential) was another key detractor from returns.

Outlook The Money Manager remains rather upbeat and maintains expectation for double-digit global real estate stock performance in 2011, albeit returns are anticipated to moderate somewhat from the 2009-2010 levels. Drivers for this positive outlook include accelerating real estate earnings growth, attractive and growing dividends, reasonable stock valuations, M&A activity and improving quality of the IPO pipeline. On the downside, the Money Manager is wary of the implications of the sovereign debt crisis- including potential dislocations in the funding market, risk of a double dip recession in mature economies and uncontrolled inflation in emerging markets - to derail this positive outlook.

Past performance is no indication of current or future performance. The reference to a benchmark is used for illustrative purposes only.

* Benchmark Source: FTSE EPRA/NAREIT Developed Index Net

Russell Investments Ireland Limited July 2011

Global Opportunistic Listed Property 83 OpenWorld plc Global Opportunistic Listed Property

Balance Sheet

As at 30 June 2011

30 June 2011 30 June 2010 USD USD Assets Financial assets at fair value through profit or loss (Note 1) ...... 46,279,947 19,326,759

Cash at bank (Note 4) ...... 548,622...... 233,734

Debtors: Receivable for investments sold ...... - 81,299 Receivable on fund share issued ...... - 1,523,850 Dividends receivable ...... 168,113...... 67,927 Other receivables ...... 35,210...... - 47,031,892 21,233,569 Liabilities Creditors – amounts falling due within one year: Payable for investments purchased ...... - (20,081) Management fees payable ...... (35,673) ...... (19,316) Custodian and Trustee fees payable ...... (380) (163) Sub-custodian fees payable ...... (2,459) ...... (16,554) Administration fees payable ...... (760) .... (326) Professional fees payable ...... (8,535) ...... (17,665) Audit fees payable ...... (22,933...... ) (18,341) Miscellaneous fees payable ...... (2,796) ...... (27,079) (73,536) (119,525)

Net assets attributable to redeemable participating shareholders (at bid market prices) ...... 46,958,356 ...... 21,114,044

Adjustment from bid market prices to last traded market prices (Note 5) ...... 55,787 25,489

Net asset value attributable to redeemable participating shareholders (at last traded market prices) ...... 47,014,143...... 21,139,533

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

84 Global Opportunistic Listed Property OpenWorld plc Global Opportunistic Listed Property

Profit and Loss Account

For the year ended 30 June 2011

2011 2010* USD USD Income Dividends ...... 1,303,094 . 594,526 Bank and short term investment interest ...... 65 - 1,303,159 594,526

Net gain (loss) on investment activities (Note 8) ...... 7,233,618 ...... 1,046,675

Total investment income (expense) ...... 8,536,777 1,641,201

Expenses Management fees (Note 3) ...... (370,707) ...... (190,399) Custodian and Trustee fees (Note 3) ...... (5,548) (2,011) Sub-custodian fees (Note 3) ...... (16,726) ..... (26,778) Administration and transfer agency fees (Note 3) ...... (33,165) ... (10,835) Audit fees (Note 3) ...... (22,933)...... (18,341) Professional fees ...... (31,577)...... (17,665) Miscellaneous fees ...... (34,699)...... (41,531) Total operating expenses ...... (515,355)...... (307,560)

Net income (expense) ...... 8,021,422...... 1,333,641

Finance costs Distributions (Note 15) ...... (378,463)...... (62,153) Interest expense ...... (81) (98) Profit (loss) for the financial year/period before taxation ...... 7,642,8...... 78 1,271,390

Taxation Withholding tax (Note 6) ...... (181,888) . (107,122) Profit (loss) for the financial year/period after taxation ...... 7,460,990...... 1,164,268

Movement in adjustment from bid market prices to last traded market prices (Note 5) ...... 30,298 ...... 25,489

Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 7,491,288...... 1,189,757

All amounts arose solely from continuing operations. There are no gains or losses other than those dealt within the Profit and Loss Account.

* For the period from 29 July 2009 (launch date) to 30 June 2010.

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

Global Opportunistic Listed Property 85 OpenWorld plc Global Opportunistic Listed Property

Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders

For the year ended 30 June 2011

2011 2010* USD USD Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 7,491,288...... 1,189,757

Share transactions Net increase (decrease) in net assets resulting from redeemable participating share transactions (Note 5) ...... 18,004,859...... 19,887,623 Reinvestment of deemed distributions on accumulation shares (Note 15) ...... 378,463 62,153

Total net increase (decrease) in net assets attributable to redeemable participating shareholders ...... 25,874,610 ...... 21,139,533

Net assets attributable to redeemable participating shareholders Beginning of year/period ...... 21,139,533 ...... -

End of year/period ...... 47,014,143...... 21,139,533

* For the period from 29 July 2009 (launch date) to 30 June 2010.

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

86 Global Opportunistic Listed Property OpenWorld plc Global Opportunistic Listed Property

Schedule of Investments

30 June 2011

Number Fair Value Fund Number Fair Value Fund of Shares USD % of Shares USD % Transferable Securities (96.34%) Japan (6.69%) Common Stock (96.34%) Real Estate Australia (9.72%) Japan Prime Realty 73 Investment Corp ...... 191,991 0.41 Real Estate 78,000 Mitsubishi Estate Co Ltd .... 1,356,984 2.89 163,428 Charter Hall Retail REIT ..... 559,891 1.19 35 Mori Trust Sogo Reit Inc .... 340,639 0.73 262,637 Dexus Property Group ...... 246,032 0.52 53 Nippon Building Fund ...... 514,512 1.09 816,064 ING Office Fund ...... 559,154 1.19 NTT Urban Development 371,310 Stockland ...... 1,355,558 2.88 505 Corp ...... 429,588 0.91 121,102 Westfield Group ...... 1,121,488 2.39 272 United Urban Investment .... 311,203 0.66 252,170 Westfield Retail Trust ...... 728,927 1.55 3,144,917 6.69 4,571,050 9.72 Jersey, Channel Islands (0.49%) Brazil (0.75%) Real Estate Real Estate Atrium European Real 37,292 Gafisa SA ...... 352,036 0.75 35,109 Estate ...... 229,826 0.49

Canada (2.61%) Norway (0.53%) Real Estate Real Estate Allied Properties Real Estate Norwegian Property 15,043 Investment Trust ...... 370,503 0.79 119,007 ASA ...... 248,419 0.53 Dundee Real Estate 6,470 Investment Trust ...... 216,806 0.46 Philippines (0.54%) RioCan Real Estate 23,791 Investment Trust ...... 637,483 1.36 Real Estate 944,501 SM Prime Holdings ...... 254,134 0.54 1,224,792 2.61

China (0.92%) Singapore (8.78%) Real Estate Longfor Properties Co Lodging 281,137 Ltd ...... 431,393 0.92 Overseas Union 140,866 Enterprise ...... 327,035 0.70

Real Estate Fr ance (4.64%) 307,000 CapitaCommercial Trust ..... 362,618 0.77 Real Estate 366,000 CapitaLand Ltd ...... 864,614 1.84 3,484 ICADE ...... 429,510 0.91 389,000 CapitaMall Trust ...... 592,563 1.26 12,106 Klepierre ...... 498,999 1.06 703,299 Global Logistic Properties .. 1,174,457 2.50 5,419 Unibail-Rodamco SE ...... 1,252,756 2.67 Mapletree Commercial 2,181,265 4.64 551,773 Trust ...... 388,794 0.82 Germany (1.60%) Perennial China Retail 401,117 Trust ...... 200,950 0.43 Diversified Financials 220,000 Yanlord Land Group Ltd .... 215,054 0.46 10,179 GSW Immobilien AG ...... 345,928 0.74 4,126,085 8.78 Real Estate 27,160 Alstria Office REIT ...... 406,970 0.86 Sweden (0.92%)

752,898 1.60 Real Estate 45,738 Kungsleden ...... 434,906 0.92 Hong Kong (9.75%)

Real Estate

245,000 China Resources Land Ltd .. 440,803 0.94 United Kingdom (7.15%)

193,000 Hang Lung Properties Ltd ... 791,223 1.68 Real Estate 48,770 Big Yellow Group Plc ...... 240,922 0.51 164,500 Kerry Properties Ltd ...... 788,543 1.68 114,770 British Land Co Plc ...... 1,121,208 2.38 171,291 Link REIT ...... 585,554 1.25 Poly Hong Kong 17,605 Derwent London Plc ...... 514,969 1.10 304,350 Investments ...... 199,869 0.42 61,080 Great Portland Estates Plc ... 427,546 0.91 122,000 Sun Hung Kai Properties Ltd 1,776,398 3.78 70,830 Hammerson ...... 546,737 1.16 4,582,390 9.75 177,037 Hansteen Holdings ...... 248,270 0.53

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

Global Opportunistic Listed Property 87 OpenWorld plc Global Opportunistic Listed Property

Schedule of Investments - continued

30 June 2011

Number Fair Value Fund Number Fair Value Fund of Shares USD % of Shares USD % 493 Helical Bar Plc ...... 2,008 0.00 23,123 Health Care REIT Inc ...... 1,212,339 2.58 87,993 ST Modwen Properties Plc .. 260,923 0.56 69,119 Hersha Hospitality Trust ..... 384,993 0.82 3,362,583 7.15 47,465 Kite Realty Group Trust ..... 235,426 0.50 26,472 ProLogis ...... 947,433 2.01 United States (41.25%) 5,750 Public Storage ...... 655,328 1.39 Health Care Providers and Services Brookdale Senior Living 17,296 Simon Property Group Inc .. 2,010,487 4.28 13,545 Inc ...... 328,737 0.70 9,283 SL Green Realty ...... 769,375 1.64 Lodging 8,200 Taubman Centers ...... 485,440 1.03 9,753 Hyatt Hotels ...... 397,630 0.84 15,023 Vornado Realty Trust ...... 1,399,843 2.98 12,207 Marriott International Inc .... 433,226 0.92 19,395,442 41.25 Real Estate Total Common Stock ...... 45,292,136 96.34 Alexandria Real Estate Total Transferable 7,890 Equities Inc ...... 610,844 1.30 Securities ...... 45,292,136 96.34 American Campus 19,655 Communities Inc ...... 697,949 1.48 AvalonBay Communities Collective Investment Schemes (2.10%) 8,240 Inc ...... 1,058,016 2.25 Ireland (2.10%) 3,300 Boston Properties ...... 350,328 0.75 Russell Investment Company 50,360 Brookfield Properties ...... 971,444 2.07 III plc 15,176 Camden Property Trust ...... 965,497 2.05 The Euro Liquidity Fund - 25 Class C Shares ...... 36,313 0.08 15,602 Coresite Realty ...... 255,249 0.54 Russell Investment Company Corporate Office Properties III plc 6,816 Trust ...... 211,910 0.45 The U.S. Dollar Cash Fund 74,484 DiamondRock Hospitality ... 797,724 1.70 93,538 II - Class C Shares ...... 935,381 1.99 18,730 Digital Realty Trust Inc ...... 1,157,139 2.46 Russell Investment Company 46,920 Duke Realty Corp ...... 656,411 1.40 III The Sterling Liquidity 20,334 Equity One ...... 379,229 0.81 10 Fund - Class C Shares ...... 16,117 0.03 12,336 Equity Residential ...... 740,160 1.57 Total Collective Investment 3,740 Essex Property Trust ...... 505,648 1.08 Schemes ...... 987,811 2.10 46,593 General Growth Properties .. 777,637 1.65

Fair Value Fund USD % Total Financial Assets at Fair Value through Profit or Loss (98.44%) ...... 46,279,947 98.44 Other Net Assets (1.44%) ...... 678,409 1.44 Adjustment from Bid Market Prices to Last Traded Market Prices (0.12%) ...... 55,787 0.12 Net Assets (100.00%) ...... 47,014,143 100.00

% of Analysis of total assets (unaudited) total assets Transferable securities admitted to an official stock exchange listing or traded on a regulated market ...... 96.30 Collective investment schemes ...... 2.10 Other assets ...... 1.60 100.00

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

88 Global Opportunistic Listed Property OpenWorld plc Global Opportunistic Listed Property

Statement of Changes in Composition of Portfolio (Unaudited)

Listed below are the 20 largest cumulative investment purchases and largest sales during the year ended 30 June 2011

Acquisition Cost Disposal Proceeds Portfolio Securities USD Portfolio Securities USD Russell Investment Company III plc Russell Investment Company III plc The U.S. Dollar Cash Fund II The U.S. Dollar Cash Fund II Class C Shares 16,829,481 Class C Shares (15,894,823) Russell Investment Company III plc Russell Investment Company III plc The U.S. Dollar Cash Fund II The U.S. Dollar Cash Fund II Class A Shares 11,015,000 Class A Shares (11,528,775) Russell Investment Company III plc Russell Investment Company III plc The Euro Liquidity Fund The Euro Liquidity Fund Class A Shares 1,568,728 Class A Shares (1,603,523) Russell Investment Company III plc Russell Investment Company III plc The Euro Liquidity Fund The Euro Liquidity Fund Class C Shares 1,374,080 Class C Shares (1,338,255) Global Logistic Properties 1,310,663 Russell Investment Company III plc Sun Hung Kai Properties 1,242,192 The Sterling Liquidity Fund Simon Property Group Inc 1,041,295 Class C Shares (770,947) Health Care REIT Inc 912,899 UDR Inc (627,028) Stockland 870,367 HCP Inc (626,676) Brookfield Properties 863,699 Federal Realty Investment Trust (617,119) General Growth Properties 850,199 Simon Property Group Inc (541,012) Camden Property Trust 831,443 Public Storage (529,686) DiamondRock Hospitality 820,959 Unibail-Rodamco SE (506,063) Unibail-Rodamco SE 790,260 Corio NV (503,610) Russell Investment Company III plc Douglas Emmett Inc (487,062) The Sterling Liquidity Fund Equity Lifestyle Properties (452,153) Class C Shares 788,855 Eurocommercial Properties NV (441,067) ProLogis 751,058 BRE Properties Inc (407,993) Digital Realty Trust Inc 718,136 Russell Investment Company III plc Equity Residential 704,431 The Sterling Liquidity Fund Westfield Group 698,858 Class A Shares (405,781) Vornado Realty Trust 678,832 Brookdale Senior Living Inc (388,491) Allgreen Properties (375,603) Biomed Realty Trust Inc (364,386)

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.

Global Opportunistic Listed Property 89 OpenWorld plc India Focus Equity

Manager’s Report

Money Manager Quantum Advisors Inc.

Investment Objective The Fund aims to provide long-term capital appreciation from a portfolio comprised predominantly of equities and equity-related instruments.

Fund Performance During the year ended 30 June 2011, the Fund returned 11.0 per cent on a gross of fee basis (8.8 per cent on a net of fees basis), versus a 8.0 per cent for the benchmark* (All returns are in USD).

Market Comment The recovery in the global economy continued in the second half of 2010, although its momentum was moderating somewhat. The pace of the recovery remained uneven across regions. The growth rate in most advanced economies remains subdued in an environment of weak credit and labour markets. In contrast emerging economies, including India, continue to pace ahead. Materials were amongst the strongest performing sectors in the third quarter and the fourth quarter, as rising commodities prices spilled through.

Indian markets marched to their own tune for much of the first quarter and even after a rally in the last couple of weeks, ended down. Disappointing corporate results, inflationary concerns and on-going corporate scams meant that the market was down by over 15 per cent by mid-February. Markets rebounded in March as foreign institutional money flowed back, helping the larger caps in the process.

The market was down in the second quarter despite positive flows of USD 1.3 billion from foreign institutional investors (FII’s) and domestic institutions and prediction of a good monsoon. Fears of rising input and borrowing costs, as well as some stock- specific issues, all played a part in influencing market performance.

General Comment on Money Manager/Performance In spite of not fully participating in the strong beta rally in September 2010, the Fund posted another strong quarter at the back of strong stock selection across most sectors in the third quarter of 2010. A stock that did particularly well was the textile company, Raymond. Although a strong brand and company in its own right, Quantum Advisors Inc.’s primary reason for holding this stock was for the value of its land assets, which they analysed not to be reflected appropriately in the stock price. With the company management showing intent to sell some land to unlock some of this value, the Money Manager has been able to take profits and reduce their position. Not holding the large index constituent energy company, Reliance Industries was also a positive. Quantum Advisors Inc. does not invest in any of the Reliance Group of companies as they fail their integrity test of treating minority shareholders fairly. Another two stocks that did well were Tata Steel (market was surprised by their cost cutting and efficient operations) and Titan Industries (great demand for their jewelry and watches business). Conversely, Indian Hotels (the largest hotel chain in India) detracted from performance. The market was concerned about the company’s increasing debt levels (used for capex to increase capacity) and the cyclical nature of its industry.

Although our value conscious Money Manager was ahead for most of the fourth quarter of 2010, the return of the “risk-on” trade by the market from the end of November dashed any hopes of another positive relative quarter for the Fund. Nevertheless, the Fund’s performance since launch has been extremely strong. Stock selection within the IT sector was mixed. Although both Tata Consultancy Services (TCS) and Infosys performed strongly against the index during the quarter at the back of higher expectations for global growth, the underweight (of around 5 per cent) in Infosys detracted from relative performance. Nonetheless, TCS outperformed Infosys as it is better diversified geographically and also has higher exposure to the financial sector, where tech spending is expected to be higher. Holding Bharat Petroleum Corp (BPC), and not Reliance Industries, was a negative as the former is in the distribution business, which remains mostly regulated (unable to pass on higher oil prices to consumers). Conversely, Reliance Group is in the un-regulated refinery business, which meant they did benefit from higher energy prices. Although the government does compensate BPC for these losses, the size and timing of these remain uncertain. A delay in diesel distribution de-regulation in the final quarter (due to inflationary pressure) also contributed to the stock lagging Reliance Group. It is noteworthy that BPC outperformed Reliance Group in the previous quarter when petrol distribution was deregulated.

Although the Fund underperformed during the first quarter of 2011, its performance since launch remains very impressive. The performance differential was primarily driven by its bias against the larger cap companies and sector allocation and less so by stock selection. Stocks that performed poorly included utility company PTC India which came under pressure after debtor days were increasing and some delays in projects are expected. The Money Manager is convinced these are just transitory issues and that long term trade volumes are still growing. Reliance Group is a stock that is not held (primarily for Quantum Advisors Inc.’s integrity screen), which performed well on the back of higher oil prices and also for bringing in BP into their E&P business as minority stakeholder. Conversely, cement companies ACC and UltraTech Cement were amongst the top contributors as cement prices remained high after fears over excess supply receded as producers controlled production. Although the Money Manager 90 India Focus Equity OpenWorld plc India Focus Equity

Manager’s Report - continued acknowledges the cyclical element in these investments, they are very comfortable with their valuations and current weights. On India’s largest car manufacturer, Maruti, the Money Manager observes, “car penetration is still low in India and increasing availability of finance augurs well for the sector. The major competitive advantages of Maruti are strong and well-entrenched distribution network, broad range of products with significant presence in small cars, superior after sales and a very strong balance sheet with no debt.”

The Fund managed to outperform marginally in the declining, albeit volatile, market in the second quarter of 2011. In contrast with previous periods of outperformance, sector allocation trumped stock selection for this quarter. Within energy, owning Bharat Petroleum and not Reliance Industries proved beneficial for the Fund as the former benefited from rising diesel prices (government had been postponing it) and the latter was impacted negatively by falling oil prices and some issues surrounding its E&P business. Other key contributors included Hindustan Unilever (defensive stock with a strong franchise and the ability to pass on higher input costs to customers), Zee Entertainment (which bounced back after the end of the Cricket World Cup and due to some improvements in the economics of their distribution), and Bharti Airtel (not caught up in the telecoms scandals). On the other hand, stocks that contributed negatively included Power Finance (as the government is expected to take measures to improve profitability of the power industry), Ultratech and ACC (amid the monsoon season which meant lower demand and consequently lower prices for cement) and Container Corporation (as it may have to pay higher prices due to higher fuel costs on railways).

Outlook The Money Manager remains optimistic on outlook with GDP growth for this year looking healthy at around 8.5 per cent and corporate capital expenditure likely to compensate for any slack in consumption (due to higher rates). Although they are watching inflation, they do not expect it to be as big a threat as last year. Furthermore, although short-end rates may increase by another 25 basis points, long-end remains unchanged, which is clearly beneficial for long term projects. The portfolio is currently trading with an upside of over 30 per cent.

Past performance is no indication of current or future performance. The reference to a benchmark is used for illustrative purposes only.

* Benchmark Source: MSCI India Net

Russell Investments Ireland Limited July 2011

India Focus Equity 91 OpenWorld plc India Focus Equity

Balance Sheet

As at 30 June 2011

30 June 2011 30 June 2010 USD USD Assets Financial assets at fair value through profit or loss (Note 1) ...... 27,715,586 20,333,285

Cash at bank (Note 4) ...... 967,056...... 971,736

Debtors: Receivable for investments sold ...... 27,525 20,409 Receivable on fund shares issued ...... 14,417 - Dividends receivable ...... 96,842...... 53,690 Other receivables ...... 38,995...... - 28,860,421 21,379,120 Liabilities Creditors – amounts falling due within one year: Payable for investments purchased ...... (69,107) - Management fees payable ...... (29,101) ...... (15,843) Custodian and Trustee fees payable ...... (231) (161) Sub-custodian fees payable ...... (7,051) ...... - Administration fees payable ...... (462) .... (323) Professional fees payable ...... (8,535) ...... (17,665) Performance fees payable ...... (15,023) ...... (212,413) Capital gains tax payable ...... - ...... (72,143) Audit fees payable ...... (32,406)...... (26,201) Miscellaneous fees payable ...... (4,925) ...... (8,484) (166,841) (353,233)

Net assets attributable to redeemable participating shareholders (at bid market prices) ...... 28,693,580 21,025,887

Adjustment from bid market prices to last traded market prices (Note 5) ...... 13,246 29,406

Net asset value attributable to redeemable participating shareholders (at last traded market prices) ...... 28,706,826 21,055,293

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

92 India Focus Equity OpenWorld plc India Focus Equity

Profit and Loss Account

For the year ended 30 June 2011

2011 2010* USD USD Income Dividends ...... 367,099 . 68,686 Bank and short term investment interest ...... 9 - 367,108 68,686

Net gain (loss) on investment activities (Note 8) ...... 1,814,518 ...... 1,401,386

Total investment income (expense) ...... 2,181,626 1,470,072

Expenses Management fees (Note 3) ...... (284,557) ...... (61,403) Custodian and Trustee fees (Note 3) ...... (2,899) (639) Sub-custodian fees (Note 3) ...... (55,824) ..... - Administration and transfer agency fees (Note 3) ...... (18,640) ... (1,989) Audit fees (Note 3) ...... (32,406...... ) (26,201) Professional fees ...... (31,327)...... (17,664) Performance fees (Note 3) ...... (16,421) ...... (212,414) Miscellaneous fees ...... (33,176)...... (11,989) Total operating expenses ...... (475,250) ...... (332,299)

Profit (loss) for the financial year/period before taxation ...... 1,706,376...... 1,137,773

Taxation Capital gains tax (Note 6) ...... (49,604) ...... (113,124) Profit (loss) for the financial year/period after taxation ...... 1,656,772...... 1,024,649

Movement in adjustment from bid market prices to last traded market prices (Note 5) ...... (16,160) ...... 29,406

Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 1,640,612...... 1,054,055

All amounts arose solely from continuing operations. There are no gains or losses other than those dealt within the Profit and Loss Account.

* For the period from 8 March 2010 (launch date) to 30 June 2010.

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

India Focus Equity 93 OpenWorld plc India Focus Equity

Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders

For the year ended 30 June 2011

2011 2010* USD USD Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 1,640,612...... 1,054,055

Share transactions Net increase (decrease) in net assets resulting from redeemable participating share transactions (Note 5) ...... 6,010,921...... 20,001,238

Total net increase (decrease) in net assets attributable to redeemable participating shareholders ...... 7,651,533 ...... 21,055,293

Net assets attributable to redeemable participating shareholders Beginning of year/period ...... 21,055,293 ...... -

End of year/period ...... 28,706,826...... 21,055,293

* For the period from 8 March 2010 (launch date) to 30 June 2010.

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

94 India Focus Equity OpenWorld plc India Focus Equity

Schedule of Investments

30 June 2011

Number Fair Value Fund Number Fair Value Fund of Shares USD % of Shares USD % Transferable Securities (92.06%) Electrical Equipment Common Stock (92.06%) 189,913 Crompton Greaves ...... 1,099,055 3.83 India (92.06%) Household Products Automobiles 185,656 Hindustan Unilever ...... 1,416,015 4.93 29,842 Maruti Suzuki India ...... 771,710 2.69 Iron and Steel Banks 66,726 Tata Steel ...... 913,513 3.18 19,645 Axis Bank ...... 564,334 1.97 Leisure Equipment and Products 30,198 HDFC Bank ...... 1,689,811 5.89 55,602 Bajaj Auto ...... 1,747,571 6.09 91,658 ING Vysya Bank ...... 700,827 2.44 Lodging 16,513 State Bank of India ...... 885,557 3.08 682,438 Indian Hotels ...... 1,180,842 4.11 Beverages Media 418,437 Tata Tea ...... 905,159 3.15 Zee Entertainment 440,632 Enterprises ...... 1,329,215 4.63 Biotechnology Oil and Gas 8,515 Dr Reddys Laboratories ...... 291,503 1.02 34,007 Bharat Petroleum ...... 492,922 1.72 Building Products 159,864 Oil and Natural Gas ...... 979,872 3.41 37,035 ACC ...... 787,467 2.74 Textile and Apparel 36,436 Ultratech Cement Ltd ...... 748,282 2.61 43,682 Raymond ...... 357,303 1.24 Communications Equipment Transportation Equipment 109,709 Bharti Airtel ...... 965,360 3.36 50,165 Container of India ...... 1,162,596 4.05 Computers and Peripherals 324,776 3i Infotech ...... 337,472 1.18 Total Common Stock ...... 26,427,821 92.06 23,496 Infosys Technologies ...... 1,525,893 5.31 Total Transferable Securities ...... 26,427,821 92.06 64,775 Tata Consultancy Services .. 1,709,848 5.96

Construction and Engineering Collective Investment Schemes (4.49%) 237,365 Voltas Ltd ...... 848,519 2.96 Ireland (4.49%) Divers ified Financials Russell Investment Company Housing Development III plc 110,305 Finance ...... 1,732,703 6.04 The U.S. Dollar Cash Fund 136,066 Power Finance Corp ...... 560,214 1.95 128,777 II - Class C Shares ...... 1,287,765 4.49 Electric Utilities Total Collective Investment 406,480 PTC India ...... 724,258 2.52 Schemes ...... 1,287,765 4.49

Fair Value Fund USD % Total Financial Assets at Fair Value through Profit or Loss (96.55%) ...... 27,715,586 ...... 96.55 Other Net Assets (3.40%) ...... 977,994 ...... 3.40 Adjustment from Bid Market Prices to Last Traded Market Prices (0.05%) ...... 13,246 ...... 0.05 Net Assets (100.00%) ...... 28,706,826 ...... 100.00

% of Analysis of total assets (unaudited) total assets Transferable securities admitted to an official stock exchange listing or traded on a regulated market ...... 91.57 Collective investment schemes ...... 4.46 Other assets ...... 3.97 100.00

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

India Focus Equity 95 OpenWorld plc India Focus Equity

Statement of Changes in Composition of Portfolio (Unaudited)

Listed below are the 20 largest cumulative investment purchases and total sales during the year ended 30 June 2011

Acquisition Cost Disposal Proceeds Portfolio Securities USD Portfolio Securities USD Russell Investment Company III plc Russell Investment Company III plc The U.S. Dollar Cash Fund II The U.S. Dollar Cash Fund II Class C Shares 10,503,000 Class C Shares (9,216,114) Voltas Ltd 957,277 Russell Investment Company III plc Power Finance Corp 837,570 The U.S. Dollar Cash Fund II Maruti Suzuki India 804,402 Class A Shares (1,269,000) Ultratech Cement Ltd 778,699 Dr Reddys Laboratories (756,145) Container of India 598,955 Titan Industries (619,427) Russell Investment Company III plc Bharat Petroleum (588,933) The U.S. Dollar Cash Fund II Raymond (281,563) Class A Shares 587,000 Cummins India (241,039) Indian Hotels 583,532 State Bank of India (231,661) Zee Entertainment Enterprises 479,639 Hindustan Unilever (206,237) Tata Global Beverages Ltd 469,445 Tata Consultancy Services (165,110) Infosys Technologies 337,748 Zee Entertainment Enterprises (78,697) Bajaj Auto 324,314 Infosys Technologies (54,885) PTC India 309,988 Tata Steel (27,220) State Bank of India 301,193 Zee Learn Ltd (25,067) Oil and Natural Gas 213,298 Crompton Greaves (24,989) Crompton Greaves 196,520 Bajaj Auto (12,496) HDFC Bank 172,332 ACC 163,595 Housing Development Finance 141,169 Tata Steel 136,047

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.

96 India Focus Equity OpenWorld plc Japan Focus Equity

Manager’s Report

Money Manager Lindsell Train Limited

Investment Objective The Fund aim was to provide long-term capital appreciation from a portfolio comprised predominantly of equities and equity- related instruments.

Fund Performance During the year ended 30 June 2011, the Fund returned -0.5 per cent on a gross of fee basis (-1.8 per cent on a net of fees basis), versus a 3.1 per cent for the benchmark* (All returns are in JPY).

Market Comment The recovery in the global economy continued in the second half of 2010, although its momentum moderated somewhat. The pace of the recovery remained uneven across regions. The growth rate in most advanced economies including Japan remained subdued in an environment of weak credit and labour markets. In contrast emerging economies, most notably China, continued to pace ahead. The Federal Reserve easing plans, the Eurozone sovereign debt crisis along with increasing signs of inflation especially in the emerging World including China set the scene for increased market volatility in the fourth quarter of 2010. Various international leaders expressed their concerns regarding the continuation of measures quantitative easing in the U.S. as energy and agricultural commodity prices continued their upward trajectory pushing inflation rates higher. Materials and Energy were the leading sectors for much of the third and fourth quarters of 2010, caused by rising commodities prices.

General Comment on Money Managers/Performance During the third quarter of 2010, September in particular proved to be difficult for this defensive, value conscious Money Manager as the markets rallied. Performance was primarily driven by specific stocks as opposed to any particular factor or area of the market. Canon was by far the top contributor to performance. Not only is its copiers and printers business picking up, its camera business is also posting better margins. The company also announced share buybacks, which is testament to things improving at the company. The fact that this export oriented company (75 per cent of the business) has performed so well in a rising Yen environment makes the performance even more impressive. Conversely, Nintendo was the largest detractor to performance due to poor numbers on the Wii software sales, the operating margin coming in at the low end of the 20-30 per cent range, and a delay in the launch of the new 3DS (a handheld console that has 3-D functionality without the need for glasses). After speaking to management, Michael Lindsell remains convinced that there is potential for improvement in the Wii software sales and for the new DS product to deliver. He observes that the “shares have been looking exceptionally cheap all year at prices 70 per cent below its peak with its enterprise value at ~1.2x sales versus our target of 4x sales. Also, at current levels, ~50 per cent of the current market capitalisation is accounted for by net cash alone which should provide downside protection.” A stock that Lindsell Train Limited has been adding to recently is the medical products company, Hogy Medical, which is growing well with high margins. With a market share of 60-70 per cent, the company is a dominant player in the Japanese medical equipment industry. Lindsell Train Limited is also excited by the new, growing business of providing complete packaged kits for specific medical procedures to hospitals.

The fourth quarter of 2010 proved a difficult environment for the value conscious Money Manager as pro-cyclical sectors, especially the financials and energy performed strongly. Conversely, many of the Money Manager‟s more defensive positions in the consumer staples and health care sector appreciated at a more even pace. Nintendo rebounded strongly after a weak third quarter. Nintendo continues to have a relatively strong cash position and is due a couple of pivotal product launches that should spell out the direction for the stock in the coming months. Nomura also had a strong fourth quarter as it was riding the beta rally. The Money Manager is bullish on the stock but slightly concerned about the bank‟s exposure to international investment banking. Conversely some of the consumer names including Kirin and Nissin foods underperformed. This was more caused by the general risk appetite in the market rather than stock specific factors, as neither of the stocks are very economically sensitive. In the Money Manager‟s appreciation Kirin remains strongly undervalued at current price levels. Obic Business Consultants also detracted from performance. The company is struggling to grow organically, and is sitting on a cash pile that could potentially be used for acquisitions. The Money Manager has been adding to their position in Meiko Networks. The company is growing its market share through.

A Japanese market rally that started early November 2010 came to an abrupt end in March when the tragedy struck. Whereas the cyclical areas of the market outshone the defensive ones during the rally, the trend was reversed in March. Our defensive, value conscious Money Manager finished the quarter marginally up after being over 4 per cent behind before the earthquake and tsunami struck. Although sector allocation overall was a negative, stock selection more than compensated for this. Stocks that did particularly well included Obic Business Consultants (benefitting from existing customers upgrading software) and Ito En (moved up mainly on back of fears about contaminated water, as its bottled drinks are assumed to be clear of radiation). On the other hand, the big allocation in Canon proved to be the largest detractor as this export-oriented company continued to get impacted by the strong Yen. Although “there is also some concern about perceived „paperless life‟, we think Canon‟s core business is well underpinned by growth in emerging markets, replacements of small scale copiers with printers and increased accessibility of high

Japan Focus Equity 97 OpenWorld plc Japan Focus Equity

Manager’s Report - continued print quality.” In terms of portfolio activity, Meiko Network was added to as they took advantage of its lower share price after the earthquake.

The Fund outperformed marginally against the declining index in April 2011. Performance was driven by stock selection within healthcare as well as the Money Manager‟s defensive positioning with a large underweight towards industrials. The strong performance continued into May as the Fund outperformed the declining index. Performance was again driven by the Money Manager‟s defensive positioning as the Money Manager‟s large overweight to consumer staples coupled with the Money Manager‟s underweight towards industrials contributed to performance. The Money Manager underperformed as the market bounced back in June and the portfolio was wound down and liquidated on 4 July 2011.

The Fund closed down on 4 July 2011.

Past performance is no indication of current or future performance. The reference to a benchmark is used for illustrative purposes only.

*Benchmark Source: Russell / Nomura Prime Net

Russell Investments Ireland Limited July 2011

98 Japan Focus Equity OpenWorld plc Japan Focus Equity

Balance Sheet

As at 30 June 2011

30 June 2011 30 June 2010 JPY JPY Assets Financial assets at fair value through profit or loss (Note 1) ...... 44,591,000 1,565,644,300

Cash at bank (Note 4) ...... 1,235,986,345...... 57,054,027 Cash held with brokers and counterparties for open derivative positions (Note 4) ...... 120,929,403...... 1,575,000

Debtors: Receivable for investments sold ...... 183,209,949...... - Dividends receivable ...... 2,022,750...... 4,632,888 Other receivables ...... 3,681,613...... - 1,590,421,060 1,628,906,215 Liabilities Financial liabilities at fair value through profit or loss (Note 1) ...... - (920,000)

Creditors – amounts falling due within one year: Payable for investments purchased ...... - (1,870,043) Management fees payable ...... (704,981) ...... (750,539) Custodian and Trustee fees payable ...... (12,818) (13,192) Sub-custodian fees payable ...... (48,176) ...... - Administration fees payable ...... (25,636) .... (26,383) Professional fees payable ...... (689,484) ...... (1,605,616) Performance fees payable ...... - ...... (8,583,158) Audit fees payable ...... (1,709,115)...... (1,503,491) Miscellaneous fees payable ...... (975,637) ...... (1,923,333) (4,165,847) (17,195,755)

Net assets attributable to redeemable participating shareholders (at bid market prices) ...... 1,586,255,213 1,611,710,460

Adjustment from bid market prices to last traded market prices (Note 5) ...... - 3,982,400

Net asset value attributable to redeemable participating shareholders (at last traded market prices) ...... 1,586,255,213 1,615,692,860

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

Japan Focus Equity 99 OpenWorld plc Japan Focus Equity

Profit and Loss Account

For the year ended 30 June 2011

2011 2010* JPY JPY Income Dividends ...... 38,443,150 . 4,981,600

Net gain (loss) on investment activities (Note 8) ...... (45,566,558) ...... (243,465,665)

Total investment income (expense) ...... (7,123,408) (238,484,065)

Expenses Management fees (Note 3) ...... (8,892,687) ...... (2,095,536) Custodian and Trustee fees (Note 3) ...... (173,609)...... (37,440) Sub-custodian fees (Note 3) ...... (566,971) ..... - Administration and transfer agency fees (Note 3) ...... (665,625) ... (107,510) Audit fees (Note 3) ...... (1,709,115)...... (1,503,491) Professional fees ...... (2,335,059)...... (1,605,616) Performance fees (Note 3) ...... - ...... (8,583,158) Miscellaneous fees ...... (1,307,091)...... (2,023,543) Total operating expenses ...... (15,650,157) (15,956,294)

Net income (expense) ...... (22,773,565) (254,440,359)

Finance costs Distributions (Note 15) ...... (13,095,789)...... - Interest expense ...... (126) (468) Profit (loss) for the financial year/period before taxation ...... (35,869,480) (254,440,827)

Taxation Withholding tax (Note 6) ...... (2,691,021) . (348,713) Profit (loss) for the financial year/period after taxation ...... (38,560,501) (254,789,540)

Movement in adjustment from bid market prices to last traded market prices (Note 5) ...... (3,982,400) 3,982,400

Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... (42,542,901) (250,807,140)

All amounts arose solely from terminating activities. There are no gains or losses other than those dealt within the Profit and Loss Account.

* For the period from 12 April 2010 (launch date) to 30 June 2010.

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

100 Japan Focus Equity OpenWorld plc Japan Focus Equity

Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders

For the year ended 30 June 2011

2011 2010* JPY JPY Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... (42,542,901) (250,807,140)

Share transactions Net increase (decrease) in net assets resulting from redeemable participating share transactions (Note 5) ...... 9,46...... 5 1,866,500,000 Reinvestment of deemed distributions on accumulation shares (Note 15) ...... 13,095,789 -

Total net increase (decrease) in net assets attributable to redeemable participating shareholders ...... (29,437,647) 1,615,692,860

Net assets attributable to redeemable participating shareholders Beginning of year/period ...... 1,615,692,860 ...... -

End of year/period ...... 1,586,255,213...... 1,615,692,860

* For the period from 12 April 2010 (launch date) to 30 June 2010.

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

Japan Focus Equity 101 OpenWorld plc Japan Focus Equity

Schedule of Investments

30 June 2011

Open Futures Contracts (2.81%)

Notional Average Unrealised Amount Cost Price Gain (Loss) Fund JPY JPY JPY % 1,467,519,000 824 178 of TOPIX Index Futures Long Futures Contracts Expiring September 2011 ...... 44,591,000 2.81 Net unrealised gain (loss) on open futures contracts ...... 44,591,000 2.81 Total Financial Derivative Instruments ...... 44,591,000 2.81

Fair Value Fund JPY % Total Financial Assets at Fair Value through Profit or Loss (2.81%) ...... 44,591,000 2.81 Other Net Assets (97.19%) ...... 1,541,664,213.... 97.19 Net Assets (100.00%) ...... 1,586,255,213 100.00

% of Analysis of total assets (unaudited) total assets Exchange traded financial derivative instruments ...... 2.80 Other assets ...... 97.20 100.00

The broker for the open futures contracts is Morgan Stanley.

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

102 Japan Focus Equity OpenWorld plc Japan Focus Equity

Statement of Changes in Composition of Portfolio (Unaudited)

Listed below are the total investment purchases and 20 largest cumulative investment sales during the year ended 30 June 2011

Acquisition Cost* Disposal Proceeds Portfolio Securities JPY Portfolio Securities JPY Meiko Network Japan 26,155,792 Canon (135,826,169) Nintendo 13,989,639 Kao (133,345,514) Hogy Medical 10,539,389 Astellas Pharma (122,252,808) Aderans Holdings 10,159,402 Nintendo (100,404,640) Ryoyo Electro 7,301,432 ITO EN (86,635,278) Osaka Securities Exchange 4,225,311 Kirin Holdings (84,226,783) ITO EN 1,960,781 OBIC Business Consultants (79,073,679) Takeda Pharmaceutical (72,376,439) Nissin Foods Holdings (68,543,755) Namco Bandai Holdings (65,766,396) Osaka Securities Exchange (63,845,726) Taisho Pharmaceutical (55,134,618) Aderans Holdings (49,692,612) Meiko Network Japan (47,163,002) Earth Chemical (45,548,406) Hogy Medical (45,464,877) Mandom (44,258,784) Ryoyo Electro (43,678,399) Milbon (39,108,349) Mabuchi Motor (34,709,448)

* Represents total purchases during the year.

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.

Japan Focus Equity 103 OpenWorld plc US Credit

Manager’s Report

Money Manager Logan Circle Partners, L.P.

Investment Objective The Fund aims to provide long-term capital appreciation from a portfolio comprised predominantly of corporate debt securities (including corporate bonds) and other credit securities and instruments that are denominated in USD.

Fund Performance During the year ended 30 June 2011, the Fund returned 8.5 per cent on a gross of fee basis (6.7 per cent on a net of fees basis), versus a 6.2 per cent for the benchmark* (All returns are in USD).

Market Comment With each passing quarter, the market seems to be captivated by new stories as investors search for opportunities in an “unusually uncertain” world. From sustainable recovery in the first quarter of 2010, to double-dip recession and deflation in the second quarter of 2010, the market again shifted focus in the third quarter of 2010 to euphoria regarding the prospect of further accommodation from the Federal Reserve (the “Fed”) along with increased political pressure to extend the Bush tax cuts. This perceived backstop encouraged investors to move out the risk spectrum. High yield bonds outperformed all aggregate sectors of the market, returning 6.71 per cent. Issuance bounced back after a lull in the second quarter. The market for investment grade credit likewise rebounded. Over the past three months, investment grade credit tightened 19 basis points versus similar-duration Treasuries and outperformed by 1.44 per cent. With respect to sectors; financials outperformed the broader market generating excess returns of 2.16 per cent, as prior fears about financial regulation subsided with the passage of a bill deemed less onerous than initially feared.

U.S. investment grade credit generated excess returns of 1.4 per cent in the fourth quarter of 2010, helped by another positive earnings season in which 70 per cent of S&P 500 companies beat street estimates. Financials and BBB rate bonds drove performance outperforming similar duration treasuries by 2.1 and 2.0 per cent respectively. Local municipal and foreign based issuers considerably lagged their corporate and U.S. counterparts. The potential removal of federal financing combined with a more fiscally conservative Congress and long term structural budget problems weighted on the municipal market. Similarly, continued funding pressure on European sovereign nations, including the bailout of Ireland, put pressure on credit spreads across the Eurozone. In addition the capital injections provided to prevent the failure of Anglo Irish Bank did not help the credibility of the ECB bank stress tests, which the bailed out bank passed earlier in the year. From a maturity perspective, long end corporates, aided by both a lack of supply and higher yields, performed strongly, generating excess returns of 4.0 per cent.

Risk assets had another solid quarter in the first quarter of 2011 boosted by strong corporate fundamentals along with monetary and fiscal stimulus. Markets proved remarkably resilient in spite of the developments in the Middle East, the disaster in Japan, continued sovereign debt concerns in Europe and the sustained rise in commodity prices. Credit had another strong quarter outperforming similar duration treasuries by 1.05 per cent. Lower quality, higher beta credit sectors generally outperformed. Financials were boosted by the out-come of the Fed capital review that stated “significant improvement in both economic conditions and capital positions of financial institutions”. Municipals surged returning 3.29 per cent better than similar duration treasuries, driven largely by a lack of supply. High yield bonds continued to outperform all aggregate sectors of the market.

Investment grade corporates underperformed similar duration Treasuries in the second quarter of 2011 as inflation and debt ceiling concerns, along with the end of QEII and the unresolved sovereign debt crisis, all weighed on sentiment. The Greek parliament’s decision to pass austerity measures provided a brief relief for risk assets towards the end of June, however not sufficiently to prevent spreads from widening over the quarter. As a general theme credits with exposure to the Eurozone periphery including financials, underperformed the general market. Fundamentally, corporate balance sheets remain strong, although the effects of inflation and a struggling U.S. consumer are beginning to put pressure on margins. Shareholder-friendly activity is also gaining momentum, with increasing share-buybacks and dividends.

General Comment on Money Manager/Performance The Fund underperformed its benchmark marginally in the third quarter of 2010. In spite of the Fund reducing its government bond exposure over the quarter, the sector still formed the largest drag on performance. The allocation was hurt by the change in investor sentiment, as investor appetite for riskier assets increased in a reversal of the scenario observed in the previous quarter. Meanwhile, the Fund’s overweight to the financials, industrials and high yield sectors were among the largest contributors to performance. The Fund’s maintenance of a 5 per cent high yield exposure enabled the Fund to gain on the reversal in investor sentiment compared to the previous quarter.

The Fund outperformed its benchmark in the fourth quarter of 2010. Subordinated financials boasted strong results, with outsized returns generated by holdings in Ameriprise Financial and Zurich Insurance. In addition, overweight positions in brokers Goldman Sachs and Morgan Stanley, Wells Fargo Bank, and health insurer Humana Inc. were among the best performers within the financials space. Within industrials, significant excess return was generated by overweight positions in Hasbro and Mattel. Among the worst performing positions during the quarter were holdings in European telecom firms Telefonica and Telecom 104 US Credit OpenWorld plc US Credit

Manager’s Report - continued

Italia. High Yield exposure contributed roughly 15 basis point of excess return over the quarter. The Money Manager’s duration positioning had a negligible impact on performance based on a very slight short bias.

The Fund outperformed the benchmark* during the first quarter of 2011, having benefited from its exposure to high yield debt, financials and industrials. The Money Manager’s holdings in Barclays, Lloyds and RBS in the bank space contributed to performance, as did core holdings in less liquid mutual insurance companies including Mutual of Omaha, Farmers Insurance and Liberty Mutual that all outperformed against more liquid names. Credit selection was the key contributor in the industrial and utilities sectors, as a number of core holdings including the following performed well: Transocean and Anadarko (Energy), Motorola and Symantec (Technology), BT, United Business Media and Crown Castle Towers (Communications), Lorillard and Watson Pharmaceuticals (Non-cyclicals), Williams Partners and Rockie Pipeline (Pipe-lines). At the other end of the scale allocations in the new issue markets including News Corp, ArcellorMittal and Best Buy were amongst the largest detractors from performance.

The Money Manager underperformed the benchmark* marginally in the second quarter. Apart from being underweight the rallying municipal market, performance was largely driven by security selection and sector rotation. Despite financials being one of the worst performing sectors for the quarter, it is from that sector that the Money Manager generated its best returns, driven by its security selection within its overweight position. The Money Manager also added value within industrials, with performance originating from oil spill names (Anadarko and Transocean) which were boosted by the BP settlement. The Money Manager remained active in the primary market, adding exposure in Barrick Gold, Amgen and Ford. Sector positioning did not change dramatically over the quarter however the Money Manager raised cash by reducing its government bond exposure, along with positions in BNP Paribas, Comcast, Goldman Sachs, Hasbro, Mutual of Omaha and Time Warner. Conversely, the Money Manager added exposure to names including Simon Property, Nokia, Barrick Gold, Caterpillar and Hewlett Packard.

Outlook The Money Manager remains somewhat cautious in the short term, not because of credit specific catalysts but due to macro headwinds. From a systemic standpoint, the lack of a resolution to the sovereign debt crisis is weighing on sentiment. Fundamentals remain solid as corporate credit metrics hover near their strongest levels in a decade. Technicals also remain strong with limited competing spread products, continuing mutual fund inflows and a robust new issue demand. The Money Manager however observes that the positive aspects are probably more priced in than the negatives, and as such the Money Manager is maintaining their defensive positioning. In this scenario it pays to be nimble, and research efforts continue to aim at identifying credits with positive catalysts, the new issue market will remain a source of attractive entry points.

Past performance is no indication of current or future performance. The reference to a benchmark is used for illustrative purposes only.

* Benchmark Source: Barclays Capital US Aggregate Credit Index

Russell Investments Ireland Limited July 2011

US Credit 105 OpenWorld plc US Credit

Balance Sheet

As at 30 June 2011

30 June 2011 30 June 2010 USD USD Assets Financial assets at fair value through profit or loss (Note 1) ...... 99,915,977 64,644,949

Cash at bank (Note 4) ...... 120,748...... 4,278,041 Cash held with brokers and counterparties for open derivative positions (Note 4) ...... - 34,700

Debtors: Receivable for investments sold ...... 1,346,193 1,150,176 Receivable on fund share issued ...... - 16,079,432 Interest receivable ...... 1,233,365...... 713,228 Other receivables ...... 39,688...... - 102,655,971 86,900,526 Liabilities Financial liabilities at fair value through profit or loss (Note 1) ...... (2,325,710) (174,788)

Creditors – amounts falling due within one year: Cash due to brokers and counterparties for open derivative positions (Note 4) ...... (6,775)...... - Payable for investments purchased ...... (696,620)...... (19,312,710) Management fees payable ...... (42,772) ...... (20,502) Custodian and Trustee fees payable ...... (852) (398) Sub-custodian fees payable ...... (5,194) ...... (8,965) Administration fees payable ...... (1,704) .... (796) Professional fees payable ...... (8,535) ...... (17,664) Audit fees payable ...... (38,222...... ) (31,028) Miscellaneous fees payable ...... (4,863) ..... (12,450) (3,131,247) (19,579,301)

Net assets attributable to redeemable participating shareholders (at bid market prices) ...... 99,524,724 ...... 67,321,225

Adjustment from bid market prices to last traded market prices (Note 5) ...... 177,873 102,024

Net asset value attributable to redeemable participating shareholders (at last traded market prices) ...... 99,702,597...... 67,423,249

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

106 US Credit OpenWorld plc US Credit

Profit and Loss Account

For the year ended 30 June 2011

2011 2010* USD USD Income Bond interest ...... 3,634,772 1,242,585 Miscellaneous income ...... 32,763...... 5,100 3,667,535 1,247,685

Net gain (loss) on investment activities (Note 8) ...... 9,526,121 ...... (4,148,252)

Total investment income (expense) ...... 13,193,656...... (2,900,567)

Expenses Management fees (Note 3) ...... (435,207) ...... (132,098) Custodian and Trustee fees (Note 3) ...... (10,802)...... (2,641) Sub-custodian fees (Note 3) ...... (36,188) ..... (10,412) Administration and transfer agency fees (Note 3) ...... (37,202) ... (9,969) Audit fees (Note 3) ...... (38,222)...... (31,028) Professional fees ...... (61,298)...... (17,664) Miscellaneous fees ...... (60,227)...... (22,223) Total operating expenses ...... (679,146) ...... (226,035)

Net income (expense) ...... 12,514,510...... (3,126,602)

Finance costs Distributions (Note 15) ...... (2,819,283)...... (81,924) Interest expense ...... (66) (418) Profit (loss) for the financial year/period before taxation ...... 9,695,161...... (3,208,944)

Taxations Withholding tax (Note 6) ...... (10,035) ...... (1,609) Profit (loss) for the financial year/period after taxation ...... 9,685,126...... (3,210,553)

Movement in adjustment from bid market prices to last traded market prices (Note 5) ...... 75,849 ...... 102,024

Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 9,760,975...... (3,108,529)

All amounts arose solely from continuing operations. There are no gains or losses other than those dealt within the Profit and Loss Account.

* For the period from 11 December 2009 (launch date) to 30 June 2010.

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

US Credit 107 OpenWorld plc US Credit

Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders

For the year ended 30 June 2011

2011 2010* USD USD Net increase (decrease) in net assets attributable to redeemable participating shareholders resulting from operations ...... 9,760,975...... (3,108,529)

Share transactions Net increase (decrease) in net assets resulting from redeemable participating share transactions (Note 5) ...... 19,699,120...... 70,449,854 Reinvestment of deemed distributions on accumulation shares (Note 15) ...... 2,819,253 81,924

Total net increase (decrease) in net assets attributable to redeemable participating shareholders ...... 32,279,348 ..... 67,423,249

Net assets attributable to redeemable participating shareholders Beginning of year/period ...... 67,423,249 ...... -

End of year/period ...... 99,702,597...... 67,423,249

* For the period from 11 December 2009 (launch date) to 30 June 2010.

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

108 US Credit OpenWorld plc US Credit

Schedule of Investments

30 June 2011

Principal Fair Value Fund Principal Fair Value Fund Amount USD % Amount USD % Transferable Securities (98.60%) France (0.39%) Long Term Bonds and Notes (97.03%) Total Capital 370,000 3.000% due 24/06/15 ...... 384,946 0.39 USD Australia (0.18%) Rio Tinto Finance USA 175,000 2.500% due 20/05/16 ..... 175,341 0.18 Ireland (0.39%) Smurfit Kappa Treasury Funding Belgium (0.54%) 110,000 7.500% due 20/11/25 ...... 106,150 0.11 Delhaize Group Willis Group Holdings 465,000 6.500% due 15/06/17 ...... 536,087 0.54 275,000 4.125% due 15/03/16 ...... 280,372 0.28

386,522 0.39 Bermuda (1.84%) Jersey, Channel Islands (0.29%) Corp Andina de Fomento United Business Media 140,000 3.750% due 15/01/16 ...... 141,938 0.14 290,000 5.750% due 03/11/20 ...... 288,138 0.29 150,000 8.125% due 04/06/19 ...... 182,964 0.19 Ingersoll-Rand Global Holding Korea, Republic of (0.50%) 575,000 9.500% due 15/04/14 ...... 690,431 0.69 POSCO Montpelier Re Holdings 495,000 5.250% due 14/04/21 ...... 500,241 0.50 520,000 6.125% due 15/08/13 ...... 537,048 0.54 White Mountains Re Luxembourg (3.80%) Group ArcelorMittal 295,000 7.506% due 29/05/49 ...... 281,456 0.28 430,000 3.750% due 01/03/16 ...... 434,805 0.44 1,833,837 1.84 915,000 6.125% due 01/06/18 ...... 980,036 0.98 Brazil (0.28%) 415,000 5.500% due 01/03/21 ...... 415,648 0.42 OGX Petroleo e Gas Covidien International Participacoes Finance 275,000 8.500% due 01/06/18 ...... 282,838 0.28 660,000 6.000% due 15/10/17 ...... 771,339 0.77 Eurasian Development Canada (1.30%) Bank Barrick Gold 100,000 7.375% due 29/09/14 ...... 110,280 0.11 795,000 2.900% due 30/05/16 ...... 794,374 0.80 Tyco Electronics Group Cenovus Energy 275,000 6.000% due 01/10/12 ...... 291,595 0.29 300,000 4.500% due 15/09/14 ...... 325,592 0.32 260,000 6.550% due 01/10/17 ...... 306,345 0.31 TransCanada PipeLines Tyco International 145,000 7.625% due 15/01/39 ...... 179,552 0.18 Finance 1,299,518 1.30 210,000 8.500% due 15/01/19 ...... 266,220 0.27 Cayman Islands (1.94%) Wind Acquisition Finance Petrobras International 200,000 7.250% due 15/02/18 ...... 208,000 0.21 Finance Co 3,784,268 3.80 710,000 5.375% due 27/01/21 ...... 729,034 0.73 Mexico (0.96%) Transocean America Movil SAB de 85,000 4.950% due 15/11/15 ...... 91,949 0.09 CV 945,000 6.000% due 15/03/18 ...... 1,046,287 1.05 335,000 5.000% due 16/10/19 ...... 349,789 0.35 Vale Overseas Kansas City Southern de 60,000 6.875% due 10/11/39 ...... 65,207 0.07 Mexico de CV 75,000 6.625% due 15/12/20 ...... 78,000 0.08 1,932,477 1.94 Petroleos Mexicanos Croatia (0.21%) 100,000 6.500% due 02/06/41 ...... 101,465 0.10 Croatia Government Sigma Alimentos de CV International Bond 160,000 5.625% due 14/04/18 ...... 163,200 0.16 200,000 6.375% due 24/03/21 ...... 208,000 0.21 Telefonos de Mexico SAB de CV Finland (0.34%) 200,000 5.500% due 27/01/15 ...... 218,044 0.22 Nokia 45,000 5.500% due 15/11/19 ...... 47,436 0.05 355,000 5.375% due 15/05/19 ...... 341,058 0.34 957,934 0.96

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

US Credit 109 OpenWorld plc US Credit

Schedule of Investments - continued

30 June 2011

Principal Fair Value Fund Principal Fair Value Fund Amount USD % Amount USD % Netherlands (2.35%) AmerisourceBergen Cooperatieve Centrale 395,000 5.875% due 15/09/15 ...... 448,598 0.45 Raiffeisen-Boerenleenbank Amgen BA/Netherlands 255,000 2.300% due 15/06/16 ...... 252,796 0.25 665,000 4.500% due 11/01/21 ...... 679,044 0.68 310,000 5.650% due 15/06/42 ...... 310,502 0.31 360,000 5.250% due 24/05/41 ...... 356,813 0.36 Anadarko Petroleum 950,000 6.375% due 15/09/17 ...... 1,089,017 1.09 Deutsche Telekom Anheuser-Busch InBev International Finance Worldwide 355,000 4.875% due 08/07/14 ..... 387,452 0.39 1,165,000 5.500% due 15/01/18 ...... 1,297,848 1.30 Shell International Finance 215,000 7.750% due 15/01/19 ...... 270,479 0.27 470,000 3.100% due 28/06/15 ...... 491,196 0.49 Applied Materials 255,000 4.300% due 15/06/21 ...... 255,851 0.26 405,000 4.375% due 25/03/20 ...... 425,566 0.43 Archer-Daniels-Midland 2,340,071 2.35 190,000 4.479% due 01/03/21 ...... 198,650 0.20 Poland (0.39%) AT&T Inc Poland Government 435,000 5.100% due 15/09/14 ...... 478,040 0.48 International Bond 1,185,000 8.000% due 15/11/31 ...... 1,568,093 1.57 380,000 5.125% due 21/04/21 ..... 392,825 0.39 Bank of America 2,545,000 5.000% due 13/05/21 ...... 2,514,073 2.52 Spain (0.81%) Bank One Capital III Telefonica Emisiones SAU 265,000 8.750% due 01/09/30 ...... 335,943 0.34 Barrick North America 570,000 2.582% due 26/04/13 ...... 575,896 0.58 Finance LLC 230,000 5.462% due 16/02/21 ...... 233,491 0.23 265,000 4.400% due 30/05/21 ...... 263,771 0.26 809,387 0.81 285,000 5.700% due 30/05/41 ...... 276,669 0.28 Sweden (0.09%) BB&T Volvo Treasury 175,000 2.050% due 28/04/14 ...... 176,953 0.18 85,000 5.950% due 01/04/15 ..... 94,027 0.09 145,000 4.900% due 30/06/17 ...... 155,331 0.16 BB&T Capital Trust I Switzerland (0.55%) 200,000 5.850% due 18/08/35 ...... 197,000 0.20 Credit Suisse Bear Stearns LLC 545,000 5.400% due 14/01/20 ..... 551,746 0.55 1,575,000 5.550% due 22/01/17 ...... 1,722,546 1.73 Bemis 165,000 5.650% due 01/08/14 ...... 181,501 0.18 United Kingdom (0.58%) Vodafone Group Best Buy 320,000 3.375% due 24/11/15 ..... 331,996 0.33 535,000 6.750% due 15/07/13 ...... 584,466 0.59 WPP Finance UK 190,000 3.750% due 15/03/16 ...... 190,910 0.19 210,000 8.000% due 15/09/14 ..... 246,338 0.25 Black & Decker 578,334 0.58 510,000 8.950% due 15/04/14 ...... 603,482 0.61 Boston Scientific United States (79.30%) 440,000 4.500% due 15/01/15 ...... 463,924 0.47 Abbott Laboratories Burlington Northern Santa 345,000 5.125% due 01/04/19 ..... 379,547 0.38 Fe LLC Albemarle 145,000 5.650% due 01/05/17 ...... 164,741 0.17 385,000 4.500% due 15/12/20 ..... 389,453 0.39 CareFusion Alta Wind Holdings LLC 350,000 5.125% due 01/08/14 ...... 383,289 0.38 192,596 7.000% due 30/06/35 ..... 204,370 0.20 Carolina Power & Light Altria Group 500,000 6.300% due 01/04/38 ...... 574,217 0.58 380,000 4.125% due 11/09/15 ...... 402,681 0.40 Caterpillar 225,000 4.750% due 05/05/21 ...... 224,846 0.23 610,000 5.200% due 27/05/41 ...... 610,057 0.61 Cellco Partnership / Verizon 325,000 10.200% due 06/02/39 ...... 466,136 0.47 Wireless Capital LLC American Express Credit 430,000 8.500% due 15/11/18 ...... 558,382 0.56 1,160,000 2.750% due 15/09/15 ..... 1,159,654 1.16 CF Industries American International 435,000 6.875% due 01/05/18 ...... 493,181 0.49 Group Church & Dwight 950,000 5.600% due 18/10/16 ..... 994,627 1.00 90,000 3.350% due 15/12/15 ...... 92,554 0.09 Ameriprise Financial 430,000 7.518% due 01/06/66 ..... 448,275 0.45 The accompanying notes are an integral part of the financial statements.

110 US Credit OpenWorld plc US Credit

Schedule of Investments - continued

30 June 2011

Principal Fair Value Fund Principal Fair Value Fund Amount USD % Amount USD % Cintas No 2 FUEL Trust 395,000 2.850% due 01/06/16 ..... 398,092 0.40 315,000 3.984% due 15/06/16 ...... 312,441 0.31 Citigroup Gap 2,620,000 3.953% due 15/06/16 ..... 2,682,115 2.69 425,000 5.950% due 12/04/21 ...... 408,301 0.41 Comcast General Electric Capital 275,000 5.700% due 15/05/18 ...... 306,834 0.31 305,000 1.875% due 16/09/13 ...... 308,482 0.31 195,000 6.400% due 01/03/40 ...... 208,694 0.21 270,000 5.625% due 15/09/17 ...... 298,086 0.30 Commonwealth Edison 1,560,000 5.300% due 11/02/21 ...... 1,623,246 1.63 595,000 5.800% due 15/03/18 ..... 667,008 0.67 345,000 5.875% due 14/01/38 ...... 348,991 0.35 Continental Airlines Georgia-Pacific LLC 190,000 6.563% due 15/08/2013 .. 193,325 0.19 345,000 8.875% due 15/05/31 ...... 435,873 0.44 Continental Airlines 2006-1 Class G Pass Through Trust Goldman Sachs Group 161,272 0.603% due 02/06/13 ..... 152,402 0.15 495,000 5.625% due 15/01/17 ...... 524,026 0.53 Coventry Health Care 555,000 6.000% due 15/06/20 ...... 597,173 0.60 265,000 5.450% due 15/06/21 ..... 271,150 0.27 125,000 6.750% due 01/10/37 ...... 124,998 0.13 Credit Suisse New York 325,000 5.000% due 15/05/13 ..... 346,910 0.35 285,000 6.250% due 01/02/41 ...... 287,329 0.29 Crown Castle Towers LLC Goodrich 200,000 3.214% due 15/08/15 ..... 203,077 0.20 160,000 6.290% due 01/07/16 ...... 186,327 0.19 CSX Great Plains Energy 210,000 5.500% due 01/08/13 ..... 227,784 0.23 315,000 4.850% due 01/06/21 ...... 316,009 0.32 HCA CVS Caremark 245,000 7.875% due 15/02/20 ...... 265,825 0.27 440,000 3.250% due 18/05/15 ...... 456,653 0.46 Health Care REIT 985,000 5.750% due 15/05/41 ...... 968,487 0.97 475,000 6.500% due 15/03/41 ...... 465,219 0.47 Delta Air Lines 2002-1 Class Hewlett-Packard G-2 Pass Through Trust 210,000 3.750% due 01/12/20 ...... 204,179 0.20 295,000 6.417% due 02/07/12 ..... 303,850 0.30 DirecTV Holdings LLC / 740,000 4.300% due 01/06/21 ...... 747,235 0.75 DirecTV Financing Home Depot 555,000 3.550% due 15/03/15 ..... 579,868 0.58 425,000 5.875% due 16/12/36 ...... 434,966 0.44 Discover Financial Services HSBC Finance 460,000 10.250% due 15/07/19 ... 594,389 0.60 330,000 6.676% due 15/01/21 ...... 338,584 0.34 Dominion Resources Humana 230,000 1.800% due 15/03/14 ..... 232,176 0.23 525,000 8.150% due 15/06/38 ...... 636,844 0.64 Dow Chemical ICI Wilmington 445,000 7.600% due 15/05/14 ..... 516,038 0.52 105,000 5.625% due 01/12/13 ...... 113,883 0.11 Duke Energy Carolinas LLC IDEX 305,000 4.300% due 15/06/20 ..... 316,276 0.32 220,000 4.500% due 15/12/20 ...... 221,544 0.22 E*Trade Financial International Lease Finance 200,000 12.500% due 30/11/17 ... 234,000 0.23 205,000 6.500% due 01/09/14 ...... 217,300 0.22 El Passo Natural Gas Jabil Circuit 55,000 7.500% due 15/11/26 ..... 64,298 0.06 115,000 7.750% due 15/07/16 ...... 127,363 0.13 Energizer Holdings JC Penney 445,000 4.700% due 19/05/21 ..... 439,515 0.44 275,000 6.375% due 15/10/36 ...... 246,125 0.25 Enterprise Products JPMorgan Chase & Co Operating LLC 745,000 3.150% due 05/07/16 ...... 749,558 0.75 Kinder Morgan Energy 620,000 3.200% due 01/02/16 ...... 629,812 0.63 Partners 600,000 5.250% due 31/01/20 ...... 638,345 0.64 385,000 5.125% due 15/11/14 ...... 422,591 0.42 285,000 5.950% due 01/02/41 ...... 283,059 0.28 135,000 3.500% due 01/03/16 ...... 138,991 0.14 145,000 7.034% due 15/01/68 ...... 152,431 0.15 Kraft Foods Express Scripts 740,000 6.250% due 15/06/14 ..... 833,331 0.84 740,000 4.125% due 09/02/16 ...... 791,280 0.79 First Union Capital II 530,000 5.375% due 10/02/20 ...... 579,395 0.58 200,000 7.950% due 15/11/29 ..... 220,120 0.22 Lorillard Tobacco Ford Motor Credit LLC 390,000 6.875% due 01/05/20 ...... 423,123 0.42 305,000 7.500% due 01/08/12 ...... 319,153 0.32 175,000 8.125% due 01/05/40 ...... 192,492 0.19 200,000 5.000% due 15/05/18 ...... 199,316 0.20 Marsh & McLennan FPL Group Capital 240,000 9.250% due 15/04/19 ...... 307,549 0.31 325,000 5.350% due 15/06/13 ..... 347,592 0.35 The accompanying notes are an integral part of the financial statements.

US Credit 111 OpenWorld plc US Credit

Schedule of Investments - continued

30 June 2011

Principal Fair Value Fund Principal Fair Value Fund Amount USD % Amount USD % Mattel Sempra Energy 475,000 4.350% due 01/10/20 ..... 477,920 0.48 865,000 2.000% due 15/03/14 ...... 873,160 0.88 MBNA Capital Simon Property Group 120,000 8.278% due 01/12/26 ..... 122,700 0.12 185,000 10.350% due 01/04/19 .... 256,079 0.26 Medco Health Solutions South Carolina Electric & Gas 135,000 6.125% due 15/03/13 ...... 145,576 0.15 290,000 5.450% due 01/02/41 ...... 291,305 0.29 290,000 7.250% due 15/08/13 ...... 322,881 0.32 Southern Copper Merck & Co Inc 190,000 6.375% due 27/07/15 ...... 209,610 0.21 645,000 3.875% due 15/01/21 ..... 640,272 0.64 Southern Natural Gas / MetLife Southern Natural Issuing 770,000 2.375% due 06/02/14 ...... 784,645 0.79 405,000 4.400% due 15/06/21 ...... 398,331 0.40 570,000 4.750% due 08/02/21 ...... 581,067 0.58 Staples 200,000 9.750% due 15/01/14 ...... 238,098 0.24 515,000 10.750% due 01/08/39 ...... 724,863 0.73 Symantec Morgan Stanley 155,000 2.750% due 15/09/15 ...... 153,553 0.15 1,705,000 6.625% due 01/04/18 ...... 1,878,216 1.88 TC Pipelines 95,000 5.750% due 25/01/21 ...... 96,124 0.10 365,000 4.650% due 15/06/21 ...... 363,040 0.36 TD Ameritrade Holding 205,000 6.250% due 09/08/26 ...... 215,849 0.22 610,000 4.150% due 01/12/14 ...... 645,900 0.65 Motorola Time Warner 280,000 5.375% due 15/11/12 ...... 294,939 0.30 460,000 4.750% due 29/03/21 ...... 467,936 0.47 760,000 6.000% due 15/11/17 ...... 864,787 0.87 450,000 7.625% due 15/04/31 ...... 539,900 0.54 230,000 7.500% due 15/05/25 ...... 269,081 0.27 Time Warner Cable Municipal Electric Authority of Georgia 385,000 3.500% due 01/02/15 ...... 401,588 0.40 705,000 6.637% due 01/04/57 ...... 675,855 0.68 510,000 8.750% due 14/02/19 ...... 649,847 0.65 Timken 280,000 7.055% due 01/04/57 ...... 261,654 0.26 145,000 6.000% due 15/09/14 ...... 160,328 0.16 Nalco Travelers 260,000 8.250% due 15/05/17 ..... 284,050 0.28 605,000 5.900% due 02/06/19 ...... 671,922 0.67 National Rural Utilities Cooperative Finance U.S. Treasury Bonds 390,000 1.900% due 01/11/15 ..... 384,454 0.39 60,000 4.250% due 15/11/40* ...... 58,650 0.06 Nationwide Mutual 565,000 4.750% due 15/02/41 ...... 600,578 0.60 Insurance U.S. Treasury Notes 355,000 9.375% due 15/08/39 ..... 440,445 0.44 NB Capital Trust IV 25,000 1.750% due 31/05/16 ...... 25,039 0.03 230,000 8.250% due 15/04/27 ..... 234,888 0.24 270,000 3.125% due 15/05/21 ...... 269,241 0.27 NBC Universal UnitedHealth Group 620,000 3.650% due 30/04/15 ..... 650,946 0.65 315,000 6.625% due 15/11/37 ...... 349,437 0.35 New Jersey State Turnpike Ventas Realty / Ventas Authority Capital 680,000 7.102% due 01/01/41 ..... 790,677 0.79 485,000 4.750% due 01/06/21 ...... 473,435 0.47 News America Verizon Communications 405,000 4.500% due 15/02/21 ..... 399,699 0.40 650,000 3.000% due 01/04/16 ...... 663,918 0.67 ONEOK Partners 245,000 4.600% due 01/04/21 ...... 252,790 0.25 145,000 3.250% due 01/02/16 ..... 147,485 0.15 Philip Morris International 585,000 8.950% due 01/03/39 ...... 825,823 0.83 880,000 5.650% due 16/05/18 ..... 989,714 0.99 Virginia Electric and Power PSEG Power LLC 390,000 5.400% due 15/01/16 ...... 443,164 0.44 110,000 5.500% due 01/12/15 ..... 121,418 0.12 340,000 5.000% due 30/06/19 ...... 368,889 0.37 Reed Elsevier Capital Wachovia Capital Trust III 255,000 7.750% due 15/01/14 ..... 292,355 0.29 540,000 5.570% due 29/03/49 ...... 494,100 0.50 Reynolds American 80,000 7.625% due 01/06/16 ..... 95,954 0.10 Waste Management Rockies Express Pipeline 290,000 6.375% due 11/03/15 ...... 331,829 0.33 LLC 465,000 6.100% due 15/03/18 ...... 527,405 0.53 295,000 6.850% due 15/07/18 ..... 330,764 0.33 210,000 7.375% due 15/05/29 ...... 248,127 0.25 Seminole Indian Tribe of Watson Pharmaceuticals Florida 350,000 5.000% due 15/08/14 ...... 380,161 0.38 275,000 7.750% due 01/10/17 ..... 284,625 0.29

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

112 US Credit OpenWorld plc US Credit

Schedule of Investments - continued

30 June 2011

Principal Fair Value Fund Principal Fair Value Fund Amount USD % Amount USD % Wells Fargo & Co Sprint Capital 1,595,000 4.600% due 01/04/21 ..... 1,603,855 1.61 255,000 8.375% due 15/03/12 ...... 265,200 0.27 Williams Partners Total Short Term 745,000 7.250% due 01/02/17 ..... 878,341 0.88 Investments ...... 1,561,755 1.57 Willis North America Total Transferable 210,000 5.625% due 15/07/15 ..... 227,215 0.23 Securities ...... 98,310,051 98.60 Yum! Brands Number 615,000 4.250% due 15/09/15 ..... 652,823 0.65 of Shares ZFS Finance USA Trust II 500,000 6.450% due 15/12/65 ..... 507,500 0.51 Collective Investment Schemes (1.41%) Ireland (1.41%) 79,070,701 79.30 Russell Investment Company Total Long Term Bonds III plc and Notes ...... 96,748,296 97.03 The U.S. Dollar Cash Fund 140,376 II - Class C Shares ...... 1,403,757 1.41 Short Term Investments (1.57%) Total Collective Investment United States (1.57%) Schemes ...... 1,403,757 1.41 CIGNA Total Investments 505,000 6.375% due 15/10/11 ..... 513,144 0.51 excluding Financial Fortune Brands Derivative Instruments ..... 99,713,808 100.01 520,000 3.000% due 01/06/12 ..... 527,290 0.53 National City Bank 250,000 6.200% due 15/12/11 ..... 256,121 0.26

Financial Derivative Instruments ((2.13)%)

Open Futures Contracts (0.03%)

Notional Average Unrealised Amount Cost Price Gain (Loss) Fund USD USD USD % (5,082,141) (123.95) 41 of 10 Year U.S. Treasury Note Futures Short Futures Contracts Expiring September 2011 ...... 66,688 0.07 1,113,539 123.74 9 of 30 Year U.S. Treasury Bond Futures Long Futures Contracts Expiring September 2011 ...... (6,258) (0.01) 914,594 130.66 7 of Ultra Long U.S. Treasury Bond Futures Long Futures Contracts Expiring September 20011 ...... (30,844) (0.03) Unrealised gain on open futures contracts ...... 66,688 0.07 Unrealised loss on open futures contracts ...... (37,102) (0.04) Net unrealised gain (loss) on open futures contracts ...... 29,586 0.03

Open Forward Foreign Currency Exchange Contracts ((2.16)%)

Unrealised Settlement Amount Amount Gain (Loss) Fund Date Bought Sold USD % 07/07/2011 EUR 1,282,492 USD 1,842,249 17,066 0.02 07/07/2011 EUR 1,282,330 USD 1,842,249 16,831 0.02 07/07/2011 EUR 1,282,376 USD 1,842,249 16,898 0.01 07/07/2011 EUR 1,282,501 USD 1,842,249 17,079 0.02 07/07/2011 EUR 1,282,338 USD 1,842,249 16,842 0.02 07/07/2011 EUR 1,282,352 USD 1,842,252 16,859 0.02 07/07/2011 EUR 57,772 USD 83,000 756 0.00 07/07/2011 GBP 164,109 USD 270,000 (6,538) (0.01)

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

US Credit 113 OpenWorld plc US Credit

Schedule of Investments - continued

30 June 2011

Unrealised Settlement Amount Amount Gain (Loss) Fund Date Bought Sold USD % 07/07/2011 GBP 9,489,157 USD 15,612,131 (378,129) (0.38) 07/07/2011 GBP 9,488,356 USD 15,612,131 (379,416) (0.38) 07/07/2011 GBP 9,488,333 USD 15,612,131 (379,453) (0.38) 07/07/2011 GBP 9,488,927 USD 15,612,131 (378,499) (0.38) 07/07/2011 GBP 9,488,310 USD 15,612,132 (379,490) (0.38) 07/07/2011 GBP 9,488,338 USD 15,612,131 (379,444) (0.38) 07/07/2011 USD 229,000 EUR 159,423 (2,126) 0.00 07/07/2011 USD 364,800 EUR 253,961 (3,385) (0.01) 07/07/2011 USD 300,000 EUR 208,398 (2,128) 0.00 07/07/2011 USD 3,000,100 GBP 1,848,093 33,150 0.03 Unrealised gain on forward foreign currency exchange contracts ...... 135,481 0.14 Unrealised loss on forward foreign currency exchange contracts ...... (2,288,608) (2.30) Net unrealised gain (loss) on open forward foreign currency exchange contracts ...... (2,153,127) (2.16) Total Financial Derivative Instruments ...... (2,123,541) (2.13)

Total Financial Assets at Fair Value through Profit or Loss ...... 99,915,977 100.22 Total Financial Liabilities at Fair Value through Profit or Loss ...... (2,325,710) (2.34)

Fair Value Fund USD % Net Financial Assets at Fair Value through Profit or Loss (97.88%) ...... 97,590,267 97.88 Other Net Assets (1.94%) ...... 1,934,457 1.94 Adjustment from Bid Market Prices to Last Traded Market Prices (0.18%) ...... 177,873 0.18 Net Assets (100.00%) ...... 99,702,597 100.00

% of Analysis of total assets (unaudited) total assets Transferable securities admitted to an official stock exchange listing or traded on a regulated market ...... 95.77 Collective investment schemes ...... 1.37 Exchange traded financial derivative instruments ...... 0.06 Over the counter financial derivative instruments ...... 0.13 Other assets ...... 2.67 100.00

* Held as collateral by the brokers in connection with the margin requirements for futures contracts held by the Fund.

The broker for the open futures contracts is HSBC.

The counterparties for the open forward foreign currency exchange contracts are:

BNP Paribas Société Generale Brown Brothers Harriman State Street Bank Citibank UBS JP Morgan Chase Bank Westpac Banking Corporation Royal Bank of Scotland

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

114 US Credit OpenWorld plc US Credit

Statement of Changes in Composition of Portfolio (Unaudited)

Listed below are the 20 largest cumulative investment purchases and sales during the year ended 30 June 2011

Acquisition Cost Disposal Proceeds Portfolio Securities USD Portfolio Securities USD U.S. Treasury Notes U.S. Treasury Notes 3.625% due 15/02/2021 19,750,755 3.625% due 15/02/2021 (19,778,581) 2.625% due 15/11/2020 19,250,076 2.625% due 15/11/2020 (19,277,595) 3.500% due 15/05/2020 13,793,757 3.500% due 15/05/2020 (13,827,051) 2.625% due 15/08/2020 13,202,901 2.625% due 15/08/2020 (13,139,223) Russell Investment Company III plc 1.875% due 30/06/2015 (10,778,762) The U.S. Dollar Cash Fund II Russell Investment Company III plc Class C Shares 11,569,000 The U.S. Dollar Cash Fund II U.S. Treasury Notes Class C Shares (10,165,322) 1.875% due 30/06/2015 10,639,396 U.S. Treasury Notes 2.000% due 31/01/2016 7,717,350 2.000% due 31/01/2016 (7,719,631) 2.250% due 31/03/2016 7,416,499 2.250% due 31/03/2016 (7,444,259) U.S. Treasury Bonds U.S. Treasury Bonds 4.250% due 15/11/2040 6,386,356 4.250% due 15/11/2040 (6,430,198) 4.375% due 15/05/2040 6,185,681 4.375% due 15/05/2040 (6,377,704) U.S. Treasury Notes U.S. Treasury Notes 2.000% due 30/04/2016 6,027,962 2.000% due 30/04/2016 (6,042,951) 1.250% due 31/08/2015 5,410,702 1.250% due 31/08/2015 (5,414,820) U.S. Treasury Bond U.S. Treasury Bond 3.875% due 15/08/2040 4,538,252 3.875% due 15/08/2040 (4,510,935) U.S. Treasury Notes U.S. Treasury Note 2.125% due 29/02/2016 4,488,380 2.125% due 29/02/2016 (4,490,334) 3.125% due 15/05/2021 4,388,512 U.S. Treasury Bond 2.125% due 31/12/2015 3,548,347 4.625% due 15/02/2040 (4,199,482) U.S. Treasury Bond U.S. Treasury Notes 4.625% due 15/02/2040 3,187,495 3.125% due 15/05/2021 (4,121,581) U.S. Treasury Notes 2.125% due 31/12/2015 (3,554,793) 0.625% due 30/06/2012 3,000,586 0.625% due 30/06/2012 (3,000,213) 0.625% due 31/01/2013 2,874,596 Bank Of America 1.250% due 30/09/2015 2,845,938 5.625% due 01/07/2020 (2,915,385) U.S. Treasury Note 0.625% due 31/01/2013 (2,880,875)

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.

US Credit 115 OpenWorld plc

Notes to the Financial Statements

30 June 2011

1. Accounting Policies The significant accounting policies adopted by the Company for the year ended 30 June 2011 are as follows:

Basis of Accounting The financial statements are prepared under the historical cost convention as modified by the revaluation of financial assets and financial liabilities held at fair value through profit or loss.

The financial statements are prepared in accordance with the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 (as amended) and in accordance with Irish statute comprising the Companies Acts, 1963 to 2009. Accounting standards generally accepted in Ireland for preparing financial statements are those published by the Institute of Chartered Accountants in Ireland and issued by the Accounting Standards Board (the “ASB”).

The Company has adopted the amendment to FRS 25, effective for accounting periods beginning on or after 1 January 2010. The amended standard requires entities to classify puttable financial instruments, or components of instruments that impose on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation, as equity, provided the financial instruments have particular features and meet specific conditions. As the Company has subscriber shares in issue the redeemable participating shares do not meet the criteria, as set out in the amendment, to meet the equity classification and have therefore remained classified as liabilities.

All references to “net assets” throughout this document refer to net assets attributable to holders of redeemable participating shares unless otherwise stated.

Certain prior year comparatives have been reclassified to conform with current year presentation.

Financial Instruments at Fair Value through Profit or Loss This category has two sub-categories: financial assets and liabilities held for trading and those designated by the Directors at fair value through profit and loss at inception. All instruments on each Fund‟s Schedule of Investments are classified at fair value through profit or loss. Subsequent to initial recognition, all instruments classified at fair value through profit or loss, are measured at fair value with changes in their fair value recognised in the Profit and Loss Account.

Investments Securities listed on a recognised stock exchange or traded on any other organised market are valued at the current bid price on the stock exchange or market which constitutes the principal market for such securities. If for specific assets the current bid prices does not, in the opinion of the Directors, reflect their fair value or are not available, the price of the most recent transaction provides evidence of the current fair value as long as there has not been a significant change in economic circumstances since the time of the transaction. This valuation methodology differs to that detailed in the prospectus; please refer to Note 5 for details of same.

In the case of any security not listed, quoted or dealt in on a regulated market or for which no quotation or value is available which would provide a fair valuation, or in respect of which the price is unrepresentative, the fair value of such security is determined on the basis of the probable realisation value and is determined by a competent person appointed by the Directors and approved for the purpose by the Custodian and Trustee, using valuation techniques. There was no requirement during the current or prior year for the Directors to appoint a competent person for such purposes.

Investments in open-ended collective investment schemes are valued at the latest available net asset value for the shares or units as published by that collective investment scheme. The change in the daily net asset value of these shares is recognised as net gain (loss) on investment activities at fair value through profit or loss.

Forward and Spot Foreign Currency Exchange Contracts The fair value of open forward foreign currency exchange contracts and open foreign currency exchange spot contracts is calculated as the difference between the contracted rate and the current forward rate that would close out the contract on the balance sheet date. For each relevant Fund, gains or losses on open foreign currency exchange spot contracts are included in cash at bank in the Balance Sheet and gains or losses on open forward foreign currency exchange contracts are included in financial assets or liabilities at fair value through profit or loss, as appropriate, on the Balance Sheet and are shown in the Schedule of Investments of each relevant Fund.

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Futures Contracts Initial margin deposits are made upon entering into futures contracts and are generally made in cash or cash equivalents. The fair value of futures contracts is based upon their quoted daily settlement prices. Changes in the value of open futures contracts are recognised as unrealised gains or losses on futures contracts until the contracts are terminated, at which time realised gains and losses are recognised. Gains or losses on open futures contracts are shown in the Schedule of Investments of each relevant Fund and as appropriate, on the Balance Sheet as financial assets or liabilities at fair value through profit or loss.

Net Gain (Loss) on Investment Activities In respect of each instrument type classified as financial instruments at fair value through profit or loss, the movement in unrealised gains (losses) since the prior year end and realised gains (losses) are included in net gain (loss) on investment activities in the Profit and Loss Account for each relevant Fund.

See Note 8 for details of realised gains (losses) and movement in unrealised gains (losses) since the prior year end for each relevant Fund. Gains and losses on foreign currency exchange contracts are included in derivatives and foreign currencies gains (losses).

Accounting for Investment Transactions, Income and Expenses Purchases and sales of investments are recognised on trade date, the date on which the Fund commits to purchase or sell the asset, provided the trade instructions have been received by the Custodian and Trustee prior to the calculation of the Fund‟s Net Asset Value, being 2.30pm (Irish time) on each valuation day (the “Valuation Point”). Any trade instructions received by the Custodian and Trustee after the Valuation Point will be recognised on the next dealing day. Investments are initially recognised at fair value and transaction costs for all financial assets and financial liabilities carried at fair value through profit or loss are expensed as incurred.

Investments are recognised when the right to receive cash flows from the investments are transferred to the Fund or the Fund has exposure to substantially all risks and rewards of ownership. Investments are de-recognised when the right to receive cash flows from the investments have expired or the Fund has transferred substantially all risks and rewards of ownership.

Realised gains and losses on investment transactions are calculated using the average cost method. Realised gains and losses on investments transactions in debt instruments are calculated as the difference between sales proceeds and the amortised cost of the instrument.

Interest income and expenses are arrived at using the effective interest method.

Gains and losses realised on the sale of all financial assets and financial liabilities carried at fair value through profit or loss are recognised in the Profit and Loss Account.

Dividends are credited to the Profit and Loss Account on the dates on which the relevant securities are listed as “ex- dividend”. Income is accounted for gross of any non-reclaimable/irrecoverable withholding taxes and net of any tax credits. The withholding tax is shown separately in the Profit and Loss Account.

Each Fund shall pay all of its expenses and such proportion of the Company‟s expenses as is allocated to that Fund, other than those expressly assumed by the Manager. The costs and gains (losses) of any hedging transactions will be attributable to the relevant share class. To the extent that expenses are attributable to a specific Share Class of the Fund, that Share Class shall bear such expenses. All expenses are accrued on a daily basis.

Foreign Currency Transactions In accordance with FRS 23, items included in an individual Fund‟s financial statements are measured using the currency of the primary economic environment in which it operates (functional currency). The Directors‟ selection of the functional currency is attributable to the functional currency being: (a) the major component of the Fund‟s benchmark; or (b) the common currency of monies received on subscriptions and paid out on redemptions of shares for most clients in the Fund‟s varied client base. The functional currency assessment was done on a Fund by Fund basis. Each Fund‟s base currency equated to its functional currency when assessed under FRS 23. The functional currency of the Company is the Euro.

Each individual Fund has also adopted its functional currency as the presentation currency. Foreign currency transactions are translated to the functional currency of the relevant Fund at the rate of exchange ruling on the date of the transaction.

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30 June 2011

For each relevant Fund:

(i) Currency gains and losses can arise where there is a difference between the amounts of foreign dividends and interest recorded on the Fund‟s books and the Fund‟s functional currency equivalent to the amounts actually received or paid. These gains or losses are included where appropriate in the dividend and interest income figure in the Fund‟s Profit and Loss Account;

(ii) Currency gains and losses realised on securities purchase and sales transactions are included in net gain (loss) on investment activities in the Fund‟s Profit and Loss Account;

(iii) Unrealised currency gains and losses on securities held at year end are included in net gain (loss) on investment activities in the Fund‟s Profit and Loss Account; and

(iv) Monetary assets and liabilities denominated in currencies other than the Fund‟s functional currency are translated at the rate of exchange ruling at the close of business on the relevant reporting date and exchange differences are included in net gain (loss) on investment activities in the Fund‟s Profit and Loss Account.

(v) Share transactions which are settled in a currency other than the functional currency of a Fund are settled using the applicable foreign currency exchange rate as of the trade date. As a result there is no foreign currency impact on the Funds for such transactions.

Redeemable Participating Shares Redeemable shares are redeemable at the shareholder‟s option and are classified as financial liabilities. The redeemable shares can be put back to the Company at any time for cash equal to a proportionate share of the Company‟s net asset value. A redeemable share is carried at the redemption amount that is payable at the balance sheet date if a shareholder exercised its right to put the share back to the Company. In accordance with the prospectus the Company is contractually obliged to redeem shares at dealing prices and the liability to redeemable participating shareholders has been adjusted to reflect this.

Distributions Distributions on Income Class Shares and deemed distributions on Accumulation Class Shares with an ex-date during the financial year are included as a finance cost in the Profit and Loss Account. The reinvestment of the deemed distribution on the Accumulation Class Shares are included as a share transaction in the Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders. Please refer to the Directors‟ Report for details of the Company‟s distribution policy.

Dilution Adjustments The dilution adjustment is applied to a Fund once net subscriptions or redemptions exceed certain pre-determined percentage thresholds relating to a Fund‟s net asset value for a given dealing day as determined by the Administrator. In calculating the dilution adjustment, the net asset value of a Fund is swung by a „swing factor‟ on the following basis:

Net subscriptions - the price used to process all transactions is adjusted upwards by the swing factor to a notional offer price.

Net redemptions - the price used to process all transactions is adjusted downwards by the swing factor to a notional bid price.

If the net asset value of a Fund is swung on a specific dealing day the official price for a Fund will be the derived swing price. In addition all dealing activity for this dealing date will be dealt at the swing price. Dilution adjustments applied to a Fund during the year under review are recognised within the share transactions figure on the Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders.

The range of swing factors applied to each Fund is disclosed in Note 5 to the financial statements.

118 Notes to the Financial Statements OpenWorld plc

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30 June 2011

2. Basis of Preparation The Company has availed of the exemption available to open-ended investment funds under FRS 1 (revised) not to prepare a cash flow statement.

The information required by Financial Reporting Standard No 3 “Reporting Financial Performance” to be included in a Statement of Total Recognised Gains and Losses and a Reconciliation of Movements in Shareholders‟ Funds is, in the opinion of the Directors, contained in the Profit and Loss Account and the Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders. In arriving at the results for the financial year under review, all amounts in the Profit and Loss Account with the exception of Japan Focus Equity relate to continuing operations.

The financial statements of the individual Funds are prepared in the functional currency of the respective Fund. The functional currency of each Fund is U.S. Dollars with the exception of Japan Focus Equity, where the functional currency is Japanese Yen and Euro Credit and Europe Focus Equity, where the functional currency is Euro. Details as to the functional currency of Funds unfunded during the year ended 30 June 2011 are omitted.

The combined financial statements of the Company are measured using Euro. The Company has also adopted Euro as the presentation currency. The accounts of the individual Funds are translated into Euro using exchange rates as at 30 June 2011 and 30 June 2010 respectively and accumulated for the preparation of the combined financial statements.

For the purpose of producing the combined Balance Sheet, financial year end exchange rates are used. For the purpose of producing the combined Profit and Loss Account and the combined Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders, the average exchange rates for the year are used. The currency gain or loss on retranslation of opening net assets, and the average rate difference arising on the translation of the Profit and Loss Account and the combined Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders, is included in the combined Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders. This translation adjustment does not impact the net asset value per share of any of the individual Funds.

Estimates and judgements The preparation of financial statements in conformity with Irish GAAP requires the use of certain critical accounting estimates. It also requires the Board of Directors, based on the advice of the Advisor, to exercise its judgement in the process of applying the Company‟s accounting policies. Management also makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed below. a) Fair value of derivative financial instruments Each Fund may, from time to time, hold financial instruments that are not quoted in active markets, such as over-the-counter derivatives. Fair values of such instruments are determined by using valuation techniques. Where valuation techniques (for example, models) are used to determine fair values, they are validated and periodically reviewed by experienced personnel at the Administrator, independent of the party that created them.

Models use observable data, to the extent practicable. However, areas such as credit risk (both own and counterparty), volatilities and correlations may require management to make estimates. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Each Fund‟s financial assets and financial liabilities are held for the purpose of being traded or are expected to be realised within one year. b) Critical judgements Functional currency The Board of Directors considers the Euro the currency that most faithfully represents the economic effect of the underlying transactions, events and conditions of the Company. The Euro is the currency in which the Company measures its performance and reports its results, as well as the currency in which it receives subscriptions from its investors.

Each Fund‟s functional currency has been determined using the same rationale as that used for the Company as a whole and the Board of Directors considers the currency used for each respective Fund in these financial statements to be the currency that most faithfully represents the economic effect of the underlying transactions, events and conditions of that Fund.

Notes to the Financial Statements 119 OpenWorld plc

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30 June 2011

3. Significant Agreements and Transactions with Related Parties

Manager Russell Investments Ireland Limited, a wholly owned subsidiary of Frank Russell Company, which in turn is a 95 per cent owned subsidiary of The Northwestern Mutual Life Insurance Company, is the Manager of the Company. The Manager is engaged in the business of providing investment management and administrative services to collective investment schemes. The Manager has: (a) appointed the Advisor to advise it on the Funds‟ investments; (b) delegated the administration of the Company to the Administrator; and (c) appointed the Advisor to market and promote the shares of the Funds.

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.

Euro Credit Europe Focus Equity Global Climate Change Global Dynamic Bond Class B EURO 1.40% Class B EURO 1.85% Class A STG£ 1.70% Class B EURO Income 1.40% Class B Euro Income 1.40% Class B STG£ 1.85% Class B US$ 2.00% Class B STG£ Income 1.40% Class B STG£ Income 1.40% Class C EURO 2.60% Class C EURO 2.90% Class B US$ 1.40% Class C EURO 1.80% Class I EURO 0.65% Class I STG£ 0.90% Class I STG£ 0.60% Class I EURO 0.60% Class I STG£ 0.65% Class I US$ 0.90% Class I US$ 0.60% Class P EURO-NV 0.45% Class P EURO 0.50% Class P US$-NV 0.75% Class P EURO H Income 0.50% Class P STG£ H 0.50% Class P US$ Income 0.50%

Global Global High Global Listed Global Opportunistic Focus Equity* Dividend Equity Infrastructure Listed Property Class P JP¥ 0.55% Class B EURO Income 1.90% Class A STG£ 1.60% Class A STG£ 1.60% Class B STG£ Income 1.90% Class A US$ 1.60% Class A US$ 1.60% Class B US$ Income 1.90% Class B US$ 2.00% Class B EURO 2.20% Class C EURO 2.60% Class C EURO 2.90% Class B US$ 2.20% Class I STG£ 0.70% Class I STG£ 0.80% Class C EURO 2.75% Class I US$ 0.70% Class I US$ 0.80% Class I STG£ 0.80% Class P JP¥ 0.55% Class I US$-NV 0.80% Class I US$ 0.80% Class P US$ Income 0.55% Class P US$ 0.70% Class I US$-NV 0.80% Class P US$ 0.65%

India Focus Equity Japan Focus Equity US Credit Class B EURO 2.50% Class I JP¥ 0.70% Class B STG£ Income 1.40% Class B STG£ 2.50% Class P JP¥ 0.55% Class B US$ 1.40% Class B US$ 2.50% Class I STG£ 0.60% Class I STG£ 1.15% Class I US$ 0.60% Class I US$ 1.15% Class P EURO H-NV 0.50% Class P US$ Income 0.95% Class P STG£ H-NV 0.50%

* The Fund launched 15 March 2011.

Rates for classes of shares not yet funded as at 30 June 2011 are not listed.

Performance Fees In addition to the applicable management fee, a performance fee may be payable from the assets of a Fund (other than in respect of Euro Credit and US Credit).

A performance fee may accrue for each relevant Fund on each business day. The change in the cumulative performance fee accruing in respect of the Manager and a Money Manager‟s performance on each business day will never exceed 20 per cent of Positive Daily Performance (as defined below).

Positive Daily Performance means the daily added value generated by the daily outperformance of a Fund above either:

(i) a benchmark plus any agreed hurdle during each Manager Performance Period (as defined in the Prospectus) and Money Manager Performance Period (as defined in the Prospectus), such benchmark being based on an index that is:

- agreed upon by the Manager and the Money Manager from time to time; and

- relevant to the investment strategies of the particular Fund; or

120 Notes to the Financial Statements OpenWorld plc

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30 June 2011

(ii) a cash benchmark or absolute return target plus any agreed hurdle during each Manager Performance Period and Money Manager Performance Period, such benchmark or target being one:

- agreed upon by the Manager and the Money Manager from time to time; and

- that is more relevant than a recognised index to the investment approach of the relevant Money Manager (or Manager during those times where no Money Manager has been appointed) given that the Money Manager (or the Manager) is seeking to generate an absolute return.

The Manager‟s portion of a performance fee will relate to the performance of the relevant Fund while the Money Manager‟s portion will relate to its own performance during its term of appointment, i.e. a Money Manager‟s portion of the fee will not relate to the performance of any previous Money Managers. Any performance fee will be paid from the relevant assets of the relevant Fund to the Manager who will then share that performance fee between it and the relevant Money Manager using an agreed ratio.

The calculation of any performance fee must be verified by the Custodian and Trustee.

The below table lists the performance fee hurdle rates as of 30 June 2011 and 30 June 2010:

Fund Benchmark Hurdle Rates % Global Listed Infrastructure S&P Global Infrastructure Index Net 0.80 Global Opportunistic Listed Property FTSE EPRA/NAREIT Developed Index Net 0.80 Global Climate Change Russell Global Index Net* 0.90 Global High Dividend Equity Russell Global Index Net* 0.70 Europe Focus Equity Russell Europe Developed Large Cap Index Net* 0.95 India Focus Equity MSCI India Index Net 1.15 Global Dynamic Bond Fund Citi WGBI 0.60 Japan Focus Equity Russell Nomura Prime Index Net* 0.70 Global Focus Equity Fund MSCI World Index Net 1.00

* Russell indices are managed and licensed by Russell Indexes, a division of Frank Russell Company.

Advisor and Money Managers Subject to the supervision and guidance of the Manager, the Money Managers determine the investments to be purchased and sold by a Fund. The Manager discharges all fees payable to the Money Managers, other than performance fees payable to the Money Managers as previously described out of its management fee. The Manager discharges all fees payable to the Advisor and Distributor out of its management fee.

Fund Recharges Russell Investments Limited as Advisor and Distributor to the Company, paid non-net asset value based fees of EUR 700,868 (30 June 2010: EUR 307,004). Non-net asset value based fees are typically legal and professional fees, registration fees and other fees which are in relation to the operational costs of the Funds. These fees were recharged to the relevant sub- funds during the year.

Support Services Agreement The Manager has also appointed the Advisor to provide certain operational support services pursuant to a support services agreement dated 13 March 2009 (“Support Services Agreement”). These services include assisting the Manager in relation to the registration of the Funds for distribution, attending to compliance matters, organising the preparation of the financial statements and the preparation of materials for meetings of the Board of Directors. EUR 44,573 (year ended 30 June 2010: EUR 13,478) was paid by the Company as part of the Fund recharges in relation to these services during the year.

Transfer Agency Shareholder services are provided for all principal fund support functions. Transfer agency fees are charged based on the number of Funds in the umbrella structure and are subject to adequate minimum thresholds. The fee is based on the number of shareholders, number of statements issued, number of share classes and volume of trading in a period. Transfer agency fees are included in Administration and transfer agency Fees and are disclosed on the face of the Profit and Loss Account for each Fund.

Notes to the Financial Statements 121 OpenWorld plc

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30 June 2011

Custodian and Trustee State Street Custodial Services (Ireland) Limited is the Custodian and Trustee. The Custodian and Trustee has appointed its parent State Street Bank and Trust Company, Boston 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 are accrued and paid at 0.01 per cent on the first USD 375 million, 0.0875 per cent on the next USD 375 million, 0.075 per cent on the next USD 375 million, 0.0625 per cent on the on the next USD 375 million and 0.05 per cent on any excess balance. Custodian and Trustee fees accrue daily and are paid monthly in arrears.

Included in the custodian agreement is a right of set off for fees owing to and monies lent by the Custodian and Trustee.

Administrator State Street Fund Services (Ireland) Limited is the 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 pays to the Administrator out of the assets of the Funds a fee of 0.02 per cent on the first USD 375 million, 0.01875 per cent on the next USD 375 million, 0.0175 per cent on the next USD 375 million, 0.01625 per cent on the next USD 375 million and 0.015 per cent on any excess balance. 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 fees are stated net of discount, when the assets of Funds promoted or co-promoted by Russell Investments and administrated by the Administrator exceed a total value of USD 70 billion. The standard discount rate applicable here is 0.01 per cent. The discount rate increases to 0.015 per cent where such total value is in excess of USD 100 billion. 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.

The Custodian, Trustee and Administration fees disclosed in the Profit and Loss Account include minimum fees. If the total of the minimum fees is in excess of the combined administration and trustee percentage charges, the share class fee, the reporting service fee and the shareholder service fee, after the deduction of any discount, then this minimum will apply. The minimum fee for new Funds will be waived for one year from the launch of the new Fund.

The maximum aggregate Custodian and Trustee fee and Administration fee shall not be greater than 0.50 per cent of the NAV of a Fund.

Auditors’ Remuneration The remuneration for all work carried out by the statutory audit firm in respect of the financial year is as follows:

2011 2010 EUR EUR Statutory audit of accounts ...... 199,880 142,753...... Tax advisory services ...... 1,164 ...... - ...... Total* ...... 201,044 142,753......

* The fees for statutory audit of the accounts disclosed in the table above are exclusive of VAT. The audit fees recognised in the Profit and Loss Account are inclusive of VAT.

There were no fees for other assurance services or audit services during the year ended 30 June 2011 (30 June 2010: Nil).

Related Party Transactions

Directors None of the Directors affiliated to Frank Russell Company, the Manager, the Money Manager, the Administrator or the Custodian and Trustee receive a Director‟s fee. Directors‟ fees charged during the year were EUR 8,508 (year ended 30 June 2010: EUR 3,675), these amounts are included in miscellaneous fees in the Profit and Loss Account. Directors‟ fees are paid to non-executive directors. 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. The prospectus dated 9 March 2011 provides that the Directors‟ remuneration will not exceed EUR 25,000 for the calendar year ended 31 December 2011. In addition to such fees the Directors shall be entitled to be reimbursed out of the assets of the Company for all travelling, hotel and other reasonable out-of pocket expenses properly incurred by them in attending and returning from meetings of the Directors or any meetings in connection with the business of the Company. 122 Notes to the Financial Statements OpenWorld plc

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30 June 2011

Directors’ fees charged during the year by the Funds, were as follows:

Year ended Year ended Fund Currency 30 June 2011 30 June 2010 Euro Credit ...... EUR ...... 1,169...... 366 ...... Europe Focus Equity ...... EUR ...... 618 ...... 307 ...... Global Climate Change ...... USD ...... 807 ...... 840 ...... Global Dynamic Bond ...... USD ...... 745 ...... 389 ...... Global Focus Equity* ...... USD ...... 1,408 ...... - ...... Global High Dividend Equity ...... USD...... 1,161...... 345...... Global Listed Infrastructure ...... USD...... 1,397...... 914...... Global Opportunistic Listed Property ...... USD ...... 760 ...... 454 ...... India Focus Equity ...... USD ...... 687 ...... 345 ...... Japan Focus Equity ...... JPY ...... 56,702 ...... 31,546 ...... US Credit ...... USD ...... 1,579...... 511......

* The Fund launched 15 March 2011.

All of the Directors of the Company are also directors of Russell Investment Company III plc.

All of the Directors of the Company are also directors of the Manager.

The following Directors of the Company are employed by the Advisor and Distributor: Mr. James Firn, Mr. James Beveridge, Mr. Michael Hunt and Mr. Alan Schoenheimer.

The following Directors of the Company are employed by Frank Russell Company in Seattle: Mr. Peter Gunning and Mr. Kenneth Willman.

Promoter Frank Russell Company acts as Promoter to the Company (the “Promoter”). During the year, the Promoter earned no fees (30 June 2010: Nil) in its capacity as Promoter to the Company.

Currency Trading Russell Implementation Services Inc. is engaged by the Company to carry out currency trading for which a fee of 0.02 per cent per trade is included in individual transactions. For the year ended 30 June 2011, this fee was EUR 57,055 (year ended 30 June 2010: EUR 15,280).

Investment in other Russell Funds

Investment in Russell Investment Company III plc The Funds may invest in funds of Russell Investment Company III plc (“RIC III plc”) which is also managed by the Manager. RIC III plc is organised as a UCITS umbrella fund with segregated liability between sub-funds. The investment objective of the RIC III plc Funds (in which the Funds invest) is to provide the maximum current income that is consistent with the preservation of capital and liquidity by investing in short term, high-grade debt and debt-related instruments. Uninvested cash in the Funds is swept daily to Funds of RIC III plc, as appropriate, to maximise the earnings of cash held. A management fee which varies from 0.05 per cent to 1.80 per cent of the underlying net asset value is incurred depending on the Fund/share class of RIC III plc in which a Fund invests.

Related Party Shareholders As of 30 June 2011, The Northwestern Mutual Life Insurance Company, via its holding company Hollenberg 1, Inc. held redeemable participating shares in the Company, the value of which amounted to EUR 36,799,462 (30 June 2010: EUR 70,224,091) of the Company‟s net asset value, at last traded market prices, as of that date.

During the years ended 30 June 2011 and 30 June 2010, certain Funds of open-ended collective investment schemes also managed by the Manager and administered by the Administrator were invested in the Funds.

30 June 2011 Company 30 June 2010 Company Related Party Shareholder EUR % EUR % Russell Multi-Manager Funds plc ...... 18,931,896 ...... 3.34 ...... 19,762,871 6.34 Russell Institutional Funds plc ...... 176,929,196 ...... 31.19 ...... 130,615,351 41.87 195,861,092 34.53 150,378,222 48.21

Notes to the Financial Statements 123 OpenWorld plc

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30 June 2011

Directed Transactions The Advisor retains the right to request that the Money Managers participate in Russell‟s soft commission and commission recapture program (the “Program”) by executing a portion of their securities transactions through various brokers (the “Correspondent Broker Network”). The Program, including the Correspondent Broker Network, is administered by Recapture Services, division of BNY ConvergEx Execution Solutions LLC (“BNY”). At the Advisor‟s direction, Money Managers execute a portion of their securities transactions through the Correspondent Broker Network. As a result of this trading activity, BNY will set aside a portion of these commissions as “credits”. Credits can be earmarked for research (soft commission) or commission recapture. Research credits will be used by the Advisor to purchase third party research that will aid the Advisor in its investment decision-making process. Research purchased through the Program is obtained from unaffiliated third parties at market rates. 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 will establish an annual soft commission research budget. Once the soft commission research budget has been met Russell will instruct BNY to recapture future commission credits. Commission recapture credits are rebated directly back to the relevant Fund from which the commission was generated. The Advisor does not receive any revenue (directly or indirectly from BNY or any broker) from the commission recapture component of the Program. Money Manager participation in the Program 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. Participation in the Program is always subject to a Money Manager‟s ability to obtain best execution. The gross amount of commission traded through the broker network operated by BNY, on behalf of the Program for the year ended 30 June 2011 amounted to EUR 5,275 (year ended 30 June 2010: EUR 2,063).

Soft Commission Arrangements The Advisor has the right under the terms of its agreements with the Money Managers to request that the Money Manager, subject to a requirement of best execution, execute transactions that enable it or its advisors to purchase brokerage and research services that assist in the provision of investment services to the Company and are in the best interests of the Company‟s shareholders. Brokerage and research services include (1) advice either directly or indirectly through publications or writings as to the value of securities, the advisability of investing in, purchasing or selling securities and the availability of securities or of purchasers or sellers of securities, (2) analysis and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy and the performance of accounts; and/or (3) effecting securities transactions and performing functions incidental thereto (such as clearance and settlement) or that are required in connection therewith.

The Advisor has received the following goods and services from brokers and dealers over the year covered by these accounts: written and oral research reports from brokers or dealers; computer based financial systems together with their associated software and servicing support; and statistical analyses relating to markets, companies, industries, business and economic factors, market trends and portfolio strategies. All goods and services received comply with the requirements of the U.K. Financial Services Authority.

4. Cash at Bank and Cash Held with/due to Brokers and Counterparties

Cash at Bank Cash at bank balances are comprised of cash balances held by State Street Bank and Trust Company, London and unrestricted margin accounts held by brokers and counterparties for financial derivative positions held by the Funds as at the respective balance sheet dates and are detailed in the tables below. Margin cash may also be covered by the Funds to brokers and counterparties for financial derivative positions held by the Funds as at balance sheet date and any such monies are disclosed as a liability on the relevant Funds‟ Balance Sheet and are also detailed in the tables below.

All cash at bank balances are held with State Street Bank & Trust Company, London for those Funds not listed below.

Cash held in U.S. Dollar bank accounts with State Street Bank and Trust Company, London automatically transfer into overnight deposit accounts held by State Street Cayman Trust Company Ltd., Cayman Islands.

124 Notes to the Financial Statements OpenWorld plc

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30 June 2011

As at 30 June 2011 Europe Global Global Global High Focus Climate Dynamic Global Focus Dividend Equity Change Bond Equity* Equity Held with Location EUR USD USD USD USD State Street Bank & Trust Company ...... London, United Kingdom 150,137 7,467 573,414 946,658 454,142 HSBC Securities (USA) Inc...... New York,...... U.S.A. - - - - - Newedge USA, LLC ...... Chicago, U.S.A. - - (15,808) - - UBS Securities LLC ...... Jersey City, U.S.A. (1,206) (8,019) - (103,566) (52,717) 148,931 (552) 557,606 843,092 401,425

* The Fund launched 15 March 2011.

US Credit Total Held with Location USD EUR State Street Bank & Trust Company ...... London, United Kingdom 120,748 1,600,239 HSBC Securities (USA) Inc...... New York,...... U.S.A. (6,775) (4,673) Newedge USA, LLC ...... Chicago, U.S.A. - (10,903) UBS Securities LLC ...... Jersey City, U.S.A . - (114,530) 113,973 1,470,133

As at 30 June 2010 Europe Global Global High Euro Focus Climate Dividend Japan Focus Credit Equity Change Equity Equity Held with Location EUR EUR USD USD JPY State Street Bank & Trust Company ...... London, United Kingdom 787,814 54,872 264,666 223,127 56,183,584 HSBC Securities (USA) Inc...... New York,...... U.S.A. - - - - - Morgan Stanley & Co Incorporated ...... New York, U.S.A. - - - - 870,443 The Royal Bank of Scotland plc ...... London, United.... Kingdom 615 - - - - UBS Securities LLC ...... Jersey City, U.S.A. - 428,780 48,692 93,338 - 788,429 483,652 313,358 316,465 57,054,027

US Credit Total Held with Location USD EUR State Street Bank & Trust Company ...... London, United Kingdom 4,214,550 5,199,984 HSBC Securities (USA) Inc...... New York,...... U.S.A. 63,491 51,834 Morgan Stanley & Co Incorporated ...... New York, U.S.A. - 8,033 The Royal Bank of Scotland plc ...... London, United.... Kingdom - 615 UBS Securities LLC ...... Jersey City, U.S.A. - 544,732 4,278,041 5,805,198

Cash held with broker and counterparties for open financial derivative positions Cash is also deposited by or on behalf of the Funds for initial margin purposes with brokers for futures contracts held on the Funds as at 30 June 2011 and 30 June 2010 respectively as detailed in the tables below. As this amount is the minimum deemed by the brokers for collateral requirements the cash is as such restricted and is reported separately to the unrestricted cash on the Funds‟ Balance Sheets.

As at 30 June 2011 Europe Global Euro Focus Climate Global Focus Credit Equity Change Equity* Held with Location EUR EUR USD USD Morgan Stanley & Co Incorporated ...... New York, U.S.A. - - - - The Royal Bank of Scotland plc ...... London, United.... Kingdom 11,300 - - - UBS Securities LLC ...... Jersey City, U.S.A. - 145,000 200,000 700,000 11,300 145,000 200,000 700,000

* The Fund launched 15 March 2011.

Notes to the Financial Statements 125 OpenWorld plc

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30 June 2011

Global High Dividend Japan Focus Equity Equity Total Held with Location USD JPY EUR Morgan Stanley & Co Incorporated ...... New York, U.S.A. - 120,929,403 1,032,792 The Royal Bank of Scotland plc ...... London, United.... Kingdom - - 11,300 UBS Securities LLC ...... Jersey City, U.S.A. 595,000 - 1,176,142 595,000 120,929,403 2,220,234

As at 30 June 2010 Europe Global Global High Euro Focus Climate Dividend Credit Equity Change Equity Held with Location EUR EUR USD USD HSBC Securities (USA) Inc...... New York,...... U.S.A. - - - - Morgan Stanley & Co Incorporated ...... Broadway, U.S.A. - - - - The Royal Bank of Scotland plc ...... London, United.... Kingdom 11,930 - - - UBS Securities LLC ...... Jersey City, U.S.A. - 76,639 243,000 152,500 11,930 76,639 243,000 152,500

Japan Focus Equity US Credit Total Held with Location JPY USD EUR HSBC Securities (USA) Inc...... New York,...... U.S.A. - 34,700 28,329 Morgan Stanley & Co Incorporated ...... Broadway, U.S.A. 1,575,000 - 14,530 The Royal Bank of Scotland plc ...... London, United.... Kingdom - - 11,930 UBS Securities LLC ...... Jersey City, U.S.A . - - 399,523 1,575,000 34,700 454,312

5. Number of Shares in Issue and Net Assets Attributable to Redeemable Participating Shareholders

Authorised Share Capital The authorised share capital of the Company is 39,000 subscriber shares of no par value and 500 billion participating shares of no par value. Subscriber shares 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 Frank Russell Company and the Advisor.

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 of 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.

Listed investments and investments with prices quoted in over the counter markets or by market makers are stated at the last traded price as at the close of business on the relevant dealing day for the purpose of determining the net asset value per share for subscriptions and redemptions and for various fee calculations. However, as stated in Note 1, the accounting policy of the Company for the purpose of compliance with FRS 26 and for financial statement reporting purposes is to value its investments at the relevant bid market prices on the balance sheet date.

Net assets attributable to shareholders represent a liability in 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. Consequently, the differences described above adjust the carrying amount of the net assets attributable to the shareholders.

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30 June 2011

Participating Share Transactions for the year ended 30 June 2011 All cash amounts are in the functional currency of the relevant Fund not the currency of the class. Net asset value per share may not recalculate due to rounding of fractional shares.

Euro Credit

Class B Class B EURO Class B STG£ Class C Class I Class P EURO Income Income EURO EURO EURO-NV Shares Shares Shares Shares Shares Shares At beginning of year ...... 1 ...... - - 1 - 8,646 Shares issued ...... 10,243...... 3 1 1,081 1 280 Shares redeemed ...... (9,830)...... - - (50) - (2,253) At end of year ...... 414 3 1 1,032 1 6,673

Class B Class B EURO Class B STG£ Class C Class I Class P EURO Income Income EURO EURO EURO-NV EUR EUR EUR EUR EUR EUR Subscriptions during the year ...... 10,696,007...... 3,425 1,219 1,092,762 1,000 272,587 Redemptions during the year ...... (10,357,843)...... - - (50,106) - (2,355,005)

Euro Credit

Class P STG£ H Shares At beginning of year ...... 35,881 ...... Shares issued ...... 25,938...... Shares redeemed ...... (9,710)...... At end of year ...... 52,109......

Class P STG£ H Total EUR EUR Subscriptions during the year ...... 31,872,809...... 43,939,809 Redemptions during the year ...... (11,854,631)...... (24,617,585) 19,322,224

Europe Focus Equity

Class B Class C Class I Class P EURO Class B STG£ EURO EURO Class I STG£ EURO Shares Shares Shares Shares Shares Shares At beginning of year ...... 1 ...... - 1 8,131 - 2,402 Shares issued ...... 1,136 444 14 2,190 1 990 Shares redeemed ...... (48)...... - - - - (1,267) At end of year ...... 1,089...... 444 15 10,321 1 2,125

Class B Class C Class I Class I Class P EURO Class B STG£ EURO EURO STG£ EURO EUR EUR EUR EUR EUR EUR Subscriptions during the year ...... 1,342,732 559,608 17,000 2,182,783 1,184 1,161,006 Redemptions during the year ...... (55,000) - - - - (1,456,288)

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30 June 2011

Europe Focus Equity

Class P US$ Income Shares At beginning of year ...... 25,000 ...... Shares issued ...... - Shares redeemed ...... - At end of year ...... 25,000......

Class P US$ Income Total EUR EUR Subscriptions during the year ...... - 5,264,313 Redemptions during the year ...... - (1,511,288) 3,753,025

Global Climate Change

Class A Class C STG£ Class B US$ EURO Class I STG£ Class I US$ Shares Shares Shares Shares Shares At beginning of year ...... - ...... 242 1 - 10,334 Shares issued ...... 1 15 95 1 26,222 Shares redeemed ...... - (95) (5) - (23,413) At end of year ...... 1 162 91 1 13,143

Class C Class A STG£ Class B US$ EURO Class I STG£ Class I US$ USD USD USD USD USD Subscriptions during the year ...... 1,554 15,402 135,170 1,554 28,776,859 Redemptions during the year ...... - (88,621) (7,364) - (26,296,728)

Global Climate Change

Class P US$-NV Shares At beginning of year ...... 32,500 ...... Shares issued ...... - Shares redeemed ...... (32,500)...... At end of year ...... -

Class P US$-NV Total USD USD Subscriptions during the year ...... - 28,930,539 Redemptions during the year ...... (36,564,488)...... (62,957,201) (34,026,662)

Global Dynamic Bond

Class B EURO Class B STG£ Income Income Class B US$ Class I STG£ Class I US$ Shares Shares Shares Shares Shares At beginning of year ...... - ...... - - - 1 Shares issued ...... 518 1,041 1 1 - Shares redeemed ...... (27)...... (219) - - - At end of year ...... 491 822 1 1 1

Class B EURO Income Class I STG£ Class B US$ Class I STG£ Class I US$ USD USD USD GBP USD Subscriptions during the year ...... 670,845 1,666,067 1,000 1,554 - Redemptions during the year ...... (35,370) (347,893) - - -

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30 June 2011

Global Dynamic Bond

Class P EURO H Income Shares At beginning of year ...... 27,260 ...... Shares issued ...... 4,248 Shares redeemed ...... (3,554)...... At end of year ...... 27,954......

Class P EURO H Income Total USD USD Subscriptions during the year ...... 5,845,546 8,185,012 Redemptions during the year ...... (4,884,7...... 96) (5,268,059) 2,916,953

Global Focus Equity*

Class P JP¥ Shares At beginning of period ...... - .... Shares issued ...... 160,500...... Shares redeemed ...... (8...... ) At end of period ...... 160,492......

Class P JP¥ Total USD USD Subscriptions during the period ...... 198,515,276...... 198,515,276 Redemptions during the period ...... (10,796) (10,796) 198,504,480

* The Fund launched 15 March 2011.

Global High Dividend Equity

Class B EURO Class B STG£ Class B US$ Class C Income Income Income EURO Class I STG£ Class I US$ Shares Shares Shares Shares Shares Shares At beginning of year ...... - ...... - - 1 - - Shares issued ...... 14,504...... 19,289 1,771 444 1 4,683 Shares redeemed ...... (518)...... (137) (657) (222) - - At end of year ...... 13,986...... 19,152 1,114 223 1 4,683

Class B EURO Class B STG£ Class B US$ Class C Income Income Income EURO Class I STG£ Class I US$ USD USD USD USD USD USD Subscriptions during the year ...... 20,595,691...... 32,686,585 1,782,148 627,293 1,554 4,826,624 Redemptions during the year ...... (747,096) (235,699) (670,154) (316,458) - -

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30 June 2011

Global High Dividend Equity

Class P US$ Class P JP¥ Income Shares Shares At beginning of year ...... - ...... 30,000 Shares issued ...... 36,595...... 1 Shares redeemed ...... - (30,000) At end of year ...... 36,595...... 1

Class P US$ Class P JP¥ Income Total USD USD USD Subscriptions during the year ...... 45,545,822...... 1,005 106,066,722 Redemptions during the year ...... - (33,879,515) (35,848,922) 70,217,800

Global Listed Infrastructure

Class C Class A STG£ Class A US$ Class B US$ EURO Class I STG£ Class I US$ Shares Shares Shares Shares Shares Shares At beginning of year ...... - ...... 12,271 314 1.00 - 8,348 Shares issued ...... 1 119 276 398 183 7,264 Shares redeemed ...... - (2,294) (73) (11) - (4,489) At end of year ...... 1 10,096 517 388 183 11,123

Class C Class A STG£ Class A US$ Class B US$ EURO Class I STG£ Class I US$ USD USD USD USD USD USD Subscriptions during the year ...... 1,554 179,563 332,750 600,435 319,718 11,913,505 Redemptions during the year ...... - (3,454,498) (81,026) (16,409) - (6,653,173)

Global Listed Infrastructure

Class I US$-NV Class P US$ Shares Shares At beginning of year ...... - ...... 21,236 Shares issued ...... 5,545 10,652 Shares redeemed ...... - (1,648) At end of year ...... 5,545...... 30,240

Class I US$-NV Class P US$ Total USD USD USD Subscriptions during the year ...... 5,845,365 16,474,100 35,666,990 Redemptions during the year ...... - (2,611,080) (12,816,186) 22,850,804 Global Opportunistic Listed Property

Class B Class C Class A STG£ Class A US$ EURO Class B US$ EURO Class I STG£ Shares Shares Shares Shares Shares Shares At beginning of year ...... - ...... 9,051 218 - 1 - Shares issued ...... 1 242 322 346 64 1 Shares redeemed ...... - (1,347) (159) (49) (29) - At end of year ...... 1 7,946 381 297 36 1

Class B Class C Class A STG£ Class A US$ EURO Class B US$ EURO Class I STG£ USD USD USD USD USD USD Subscriptions during the year ...... 1,554 337,677 540,927 347,150 93,956 1,554 Redemptions during the year ...... - (1,791,720) (273,050) (50,438) (41,721) -

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30 June 2011

Global Opportunistic Listed Property

Class I Class I US$ US$-NV Class P US$ Shares Shares Shares At beginning of year ...... - ...... - 9,292 Shares issued ...... 1 5,647 10,607 Shares redeemed ...... - (3) (831) At end of year ...... 1 5,644 19,068

Class I Class I US$ US$-NV Class P US$ Total USD USD USD USD Subscriptions during the year ...... 1,000 5,939,947 14,085,263 21,349,028 Redemptions during the year ...... - (3,050) (1,184,190) (3,344,169) 18,004,859

India Focus Equity

Class B EURO Class B STG£ Class B US$ Class I STG£ Class I US$ Shares Shares Shares Shares Shares At beginning of year ...... 1 ...... - - - - Shares issued ...... 2,115 1,987 222 1 1 Shares redeemed ...... (156)...... (4) (222) - - At end of year ...... 1,960...... 1,983 - 1 1

Class B EURO Class B STG£ Class B US$ Class I STG£ Class I US$ USD USD USD USD USD Subscriptions during the year ...... 2,935,003 3,264,299 218,639 1,554 1,000 Redemptions during the year ...... (215,233) (5,017) (189,324) - -

India Focus Equity

Class P US$ Income Shares At beginning of year ...... 20,000 ...... Shares issued ...... - Shares redeemed ...... - At end of year ...... 20,000......

Class P US$ Income Total USD USD Subscriptions during the year ...... - 6,420,495 Redemptions during the year ...... - (409,574) 6,010,921

Japan Focus Equity

Class I JP¥ Class P JP¥ Shares Shares At beginning of year ...... - ...... 18,665 Shares issued ...... 1 - Shares redeemed ...... (...... 1) - At end of year ...... - 18,665

Class I JP¥ Class P JP¥ Total JPY JPY JPY Subscriptions during the year ...... 100,000 - 100,000 Redemptions during the year ...... (90,535) - (90,535) 9,465

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30 June 2011

US Credit

Class B STG£ Class P Income Class B US$ Class I STG£ Class I US$ EURO H-NV Shares Shares Shares Shares Shares At beginning of year ...... - ...... 8 - 900 8,545 Shares issued ...... 1 801 1 235 157 Shares redeemed ...... - (755) - (94) (2,402) At end of year ...... 1 54 1 1,041 6,300

Class B STG£ Class P Income Class B US$ Class I STG£ Class I US$ EURO H-NV USD USD USD USD USD Subscriptions during the year ...... 1,586 862,969 1,554 245,000 222,441 Redemptions during the year ...... - (811,637) - (103,419) (3,604,962)

US Credit

Class P STG£ H-NV Shares At beginning of year ...... 35,605 ...... Shares issued ...... 21,425...... Shares redeemed ...... (8,177)...... At end of year ...... 48,853......

Class P STG£ H-NV Total USD USD Subscriptions during the year ...... 37,248,606...... 38,582,156 Redemptions during the year ...... (14,363,018)...... (18,883,036) 19,699,120

Participating Share Transactions for the year ended 30 June 2010 All cash amounts are in the functional currency of the relevant Fund not the currency of the class.

Euro Credit

Class B Class C Class P Class P EURO EURO EURO-NV STG£ H Shares Shares Shares Shares At beginning of period ...... - .... - - - Shares issued ...... 1 1 9,081 37,457 Shares redeemed ...... - - (435) (1,576) At end of period ...... 1 1 8,646 35,881

Class B Class C Class P Class P EURO EURO EURO-NV STG£ H Total EUR EUR EUR EUR EUR Subscriptions during the period ...... 1,003 1,002 9,145,136 43,674,949 52,822,090 Redemptions during the period ...... - - (447,995) (1,876,829) (2,324,824) 50,497,266

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30 June 2011

Europe Focus Equity

Class B Class C Class I Class P Class P US$ EURO EURO EURO EURO Income Shares Shares Shares Shares Shares At beginning of period ...... - .... - - - - Shares issued ...... 1 1 8,131 2,402 25,000 Shares redeemed ...... - - - - - At end of period ...... 1 1 8,131 2,402 25,000

Class B Class C Class I Class P Class P US$ EURO EURO EURO EURO Income Total EUR EUR EUR EUR EUR EUR Subscriptions during the period ...... 1,001 1,001 7,728,490 2,435,467 18,311,679 28,477,638 Redemptions during the period ...... ------28,477,638

Global Climate Change

Class C Class P Class B US$ EURO Class I US$ US$-NV Shares Shares Shares Shares At beginning of period ...... - .... - - - Shares issued ...... 252 1 10,680 32,500 Shares redeemed ...... (10...... ) - (346) - At end of period ...... 242...... 1 10,334 32,500

Class C Class P Class B US$ EURO Class I US$ US$-NV Total USD USD USD USD USD Subscriptions during the period ...... 239,764 1,238 10,766,211 32,500,000 43,507,213 Redemptions during the period ...... (9,939) - (328,075) - (338,014) 43,169,199

Global Dynamic Bond

Class P EURO Class I US$ H Income Shares Shares At beginning of period ...... - .... - Shares issued ...... 1 27,849 Shares redeemed ...... - (589) At end of period ...... 1 27,260

Class P EURO Class I US$ H Income Total USD USD USD Subscriptions during the period ...... 1,000 37,689,845 37,690,845 Redemptions during the period ...... - (777,659) (777,659) 36,913,186

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30 June 2011

Global High Dividend Equity

Class C Class P US$ EURO Income Shares Shares At beginning of period ...... - .... - Shares issued ...... 1 30,000 Shares redeemed ...... - - At end of period ...... 1 30,000

Class C Class P US$ EURO Income Total USD USD USD Subscriptions during the period ...... 1,238 30,000,000 30,001,238 Redemptions during the period ...... - - - 30,001,238

Global Listed Infrastructure

Class C Class A US$ Class B US$ EURO Class I US$ Class P US$ Shares Shares Shares Shares Shares At beginning of year ...... 12,378 ...... - - 8,132 4,700 Shares issued ...... 3,850...... 352 1 5,427 23,669 Shares redeemed ...... (3,957)...... (38) - (5,211) (7,133) At end of year ...... 12,271...... 314 1 8,348 21,236

Class C Class A US$ Class I US$ EURO Class I US$ Class P US$ Total USD USD USD USD USD USD Subscriptions during the year ...... 4,783,403 361,194 1,243 7,361,831 31,469,426 43,977,097 Redemptions during the year ...... (5,182,998)...... (37,802) - (6,591,807) (9,654,936) (21,467,543) 22,509,554

Global Opportunistic Listed Property

Class C Class A US$ Class B EURO EURO Class P US$ Shares Shares Shares Shares At beginning of period ...... - .... - - - Shares issued ...... 10,392...... 274 1 12,924 Shares redeemed ...... (1,341)...... (56) - (3,632) At end of period ...... 9,051...... 218 1 9,292

Class C Class A US$ Class B EURO EURO Class P US$ Total USD USD USD USD USD Subscriptions during the period ...... 10,736,585...... 412,957 1,242 14,799,207 25,949,991 Redemptions during the period ...... (1,562,609)...... (79,695) - (4,420,064) (6,062,368) 19,887,623

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India Focus Equity

Class B Class P US$ EURO Income Shares Shares At beginning of period ...... - .... - Shares issued ...... 1 20,000 Shares redeemed ...... - - At end of period ...... 1 20,000

Class B Class P US$ EURO Income Total USD USD USD Subscriptions during the period ...... 1,238 20,000,000 20,001,238 Redemptions during the period ...... - - - 20,001,238

Japan Focus Equity

Class P JP¥ Shares At beginning of period ...... - .... Shares issued ...... 18,665...... Shares redeemed ...... - At end of period ...... 18,665......

Class P JP¥ Total JPY JPY Subscriptions during the period ...... 1,866,500,000...... 1,866,500,000 Redemptions during the period ...... - - 1,866,500,000

US Credit

Class P Class P Class B US$ Class I US$ EURO H-NV STG£ H-NV Shares Shares Shares Shares At beginning of period ...... - .... - - - Shares issued ...... 8 900 9,269 37,178 Shares redeemed ...... - - (724) (1,573) At end of period ...... 8 900 8,545 35,605

Class P Class P Class B US$ Class I US$ EURO H-NV STG£ H-NV Total USD USD EUR GBP USD Subscriptions during the period ...... 8,669 903,419 13,481,472 59,544,500 73,938,060 Redemptions during the period ...... (2) - (992,759) (2,495,445) (3,488,206) 70,449,854

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30 June 2011

Dilution Adjustments As disclosed in Note 1 to the Financial Statements, since 19 January 2011, the anti-dilution levy process has been replaced by the application of dilution adjustments.

The range of swing factors applied is disclosed in the table below:

Swing Factor Rate Swing Factor Rate As at 30 June 2010 As at 30 June 2011 On Subscriptions On On Fund Name and Redemptions Subscriptions Redemptions Euro Credit ...... 0.25% 0.20% 0.20% Europe Focus Equity ...... 0.30% ...... 0.30% 0.15% Global Climate Change ...... 0.40% ... 0.25% 0.25% Global Dynamic Bond ...... 0.05% ..... 0.05% 0.05% Global Focus Equity* ...... N/A ...... 0.15% 0.15% Global High Dividend Equity...... 0.40% 0.15% 0.15% Global Listed Infrastructure ...... 0.40% 0.40% 0.40% Global Opportunistic Listed Property ...... 0.30%...... 0.30% 0.25% India Focus Equity ...... 0.65% ...... 0.35% 0.35% Japan Focus Equity ...... 0.20% ...... 0.20% 0.20% US Credit ...... 0.30% 0.30% 0.30%

* The Fund launched 15 March 2011.

The rates are reviewed quarterly by Russell Investments.

Significant Shareholders* The following table details the number of shareholders with significant holdings of at least 20 per cent of the relevant Fund‟s and the aggregate value and percentage of that holding as at 30 June 2011.

Number of Aggregate Significant Value Shareholding as Fund Shareholders of Holding a % of the Fund Euro Credit ...... 1 EUR...... 61,194,492 87.71% Europe Focus Equity ...... 2 ...... EUR 32,674,712...... 88.15% Global Climate Change ...... 1 ...... USD 10,852,093.... 67.87% Global Focus Equity ...... 1 ...... USD 208,356,036...... 100.00% Global High Dividend Equity ...... 2 US...... D 78,440,178 73.23% Global Listed Infrastructure ...... 1 USD...... 35,752,244 36.73% Global Dynamic Bond Fund ...... 1 USD...... 41,564,604 95.43% Global Opportunities Listed Property ...... 1 USD ...... 17,354,030 36.91% India Focus Equity ...... 1...... USD 22,914,420...... 79.82% Japan Focus Equity ...... 1 ...... JPY 1,586,255,213...... 100.00% US Credit ...... 1 USD...... 88,213,346 88.48%

The following table details the number of shareholders with significant holdings of at least 20 per cent of the relevant Fund‟s and the aggregate value and percentage of that holding as at 30 June 2010.

Number of Aggregate Significant Value Shareholding as Fund Shareholders of Holding a % of the Fund Euro Credit ...... 1 EUR...... 45,224,733 83.57% Europe Focus Equity ...... 2 ...... EUR 25,281,857...... 91.49% Global Climate Change ...... 1 ...... USD 22,736,250.... 58.07% Global High Dividend Equity ...... 1 USD...... 28,228,556 100.00% Global Listed Infrastructure ...... 1 USD...... 17,228,686 33.18% Global Dynamic Bond Fund ...... 1 USD...... 34,780,548 99.99% Global Opportunities Listed Property ...... 2 USD ...... 10,051,450 47.55% India Focus Equity ...... 1...... USD 21,054,034...... 99.99% Japan Focus Equity ...... 1 ...... JPY 1,615,692,861...... 100.00% US Credit ...... 1 USD...... 55,571,089 82.42%

* Shareholders who individually hold at least of 20 per cent of the relevant Funds.

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6. 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. On that basis, it is not chargeable to Irish tax on its income or gains.

However, Irish tax may arise on the happening of a “chargeable event”. A chargeable event includes any distribution payments to shareholders, any encashment, redemption, cancellation or transfer of shares and the holding of shares at the end of each eight year period beginning with the acquisition of such shares.

No Irish tax will arise on the Company in respect of chargeable events in respect of:

a) a shareholder who is neither Irish resident nor ordinarily resident in Ireland for tax purposes, at the time of the chargeable event, provided appropriate valid declarations in accordance with the provisions of the Taxes Consolidation Act, 1997, as amended, are held by the Company or the Company has been authorised by the Irish Revenue to make gross payments in the absence of appropriate declarations; and b) certain exempted Irish tax resident shareholders who have provided the Company with the necessary signed statutory declarations.

Dividends, interest and capital gains (if any) received on investments made by the Company may be subject to taxes imposed by the country from which the investment income/gains are received and such taxes may not be recoverable by the Company or its shareholders.

7. Collateral Each Fund‟s assets may be pledged as collateral to and held by the brokers for open futures contracts. Details of non cash collateral held at year end by brokers are asterisked within the Schedule of Investments of each relevant Fund. Securities held as collateral are typically U.S. Treasury Bills, or other international equivalents. Amounts of cash held as collateral at year end by brokers are disclosed on the Balance Sheet of each relevant Fund and included in Note 4 to the financial statements.

The collateral is held by the agent to the ISDA agreement entered into between the relevant Money Manager and the broker. The collateral must be immediately available to the Fund by the agent without recourse to the broker in the event of a default by that entity.

8. Net Gain (Loss) on Investment Activities

Year ended 30 June 2011

Net realised gain (loss)

Global Global High Europe Focus Global Climate Dynamic Global Focus Dividend Euro Credit Equity Change Bond Equity* Equity EUR EUR USD USD USD USD Investments ...... 662,767 666,954 4,148,663 1,375,845 802,564 975,175 Derivatives and foreign currencies ...... (2,523,097) (91,733) 517,516 2,783,591 998,984 710,020 (1,860,330) 575,221 4,666,179 4,159,436 1,801,548 1,685,195

Global Global Listed Opportunistic India Focus Japan Focus Infrastructure Listed Property Equity Equity US Credit USD USD USD JPY USD Investments ...... 5,316,855 2,476,129 964,009 (318,786,907) 2,299,312 Derivatives and foreign currencies ...... (42,684) (3,855) 9,506 (1,299,963) 9,303,233 5,274,171 2,472,274 973,515 (320,086,870) 11,602,545

* The Fund launched 15 March 2011.

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Net change in unrealised gain (loss) on:

Global Global High Europe Focus Global Climate Dynamic Global Focus Dividend Euro Credit Equity Change Bond Equity* Equity EUR EUR USD USD USD USD Investments ...... (535,907) 4,832,064 5,957,624 1,265,632 4,654,247 6,114,461 Derivatives and foreign currencies ...... (3,061,896) 105,157 103,896 344,409 293,331 240,573 (3,597,803) 4,937,221 6,061,520 1,610,041 4,947,578 6,355,034

Global Global Listed Opportunistic India Focus Japan Focus Infrastructure Listed Property Equity Equity US Credit USD USD USD JPY USD Investments ...... 16,380,222 4,750,983 821,088 229,009,313 1,049,856 Derivatives and foreign currencies ...... 12,571 10,361 19,915 45,510,999 (3,126,280) 16,392,793 4,761,344 841,003 274,520,312 (2,076,424)

* The Fund launched 15 March 2011.

Net gain (loss) on investment activities

Global Global High Europe Focus Global Climate Dynamic Global Focus Dividend Euro Credit Equity Change Bond Equity* Equity EUR EUR USD USD USD USD Net realised gain (loss) ...... (1,860,330) 575,221 4,666,179 4,159,436 1,801,548 1,685,195 Net unrealised gain (loss) ...... (3,597,803) 4,937,221 6,061,520 1,610,041 4,947,578 6,355,034 Net gain (loss) on investment activities ...... (5,458,133) 5,512,442 10,727,699 5,769,477 6,749,126 8,040,229

Global Global Listed Opportunistic India Focus Japan Focus Infrastructure Listed Property Equity Equity US Credit USD USD USD JPY USD Net realised gain (loss) ...... 5,274,171 2,472,274 973,515 (320,086,870) 11,602,545 Net change in unrealised gain (loss) ...... 16,392,793 4,761,344 841,003 274,520,312 (2,076,424) Net gain (loss) on investment activities ...... 21,666,964 7,233,618 1,814,518 (45,566,558) 9,526,121

* The Fund launched 15 March 2011.

Year ended 30 June 2010

Net realised gain (loss)

Global Global High Europe Focus Global Climate Dynamic Dividend Global Listed Euro Credit Equity Change Bond Equity Infrastructure EUR EUR USD USD USD USD Investments ...... 125,566 (110,074) 571,260 (808,722) (83,353) 4,214,146 Derivatives and foreign currencies ...... 1,803,250 37,948 278,627 (1,233,322) 14,051 (91,143) 1,928,816 (72,126) 849,887 (2,042,044) (69,302) 4,123,003

Global Opportunistic Listed India Focus Japan Focus Property Equity Equity US Credit USD USD JPY USD Investments ...... 938,550 270,978 (396,966) 140,060 Derivatives and foreign currencies ...... 11,719 (14,053) (13,139,415) (6,134,935) 950,269 256,925 (13,536,381) (5,994,875)

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Net change in unrealised gain (loss) on:

Global Global High Europe Focus Global Climate Dynamic Dividend Global Listed Euro Credit Equity Change Bond Equity Infrastructure EUR EUR USD USD USD USD Investments ...... 202,185 (1,009,251) (4,898,719) 137,839 (2,010,919) (4,572,948) Derivatives and foreign currencies ...... 941,059 (66,770) (70,577) (162,645) (59,780) (8,281) 1,143,244 (1,076,021) (4,969,296) (24,806) (2,070,699) (4,581,229)

Global Opportunistic Listed India Focus Japan Focus Property Equity Equity US Credit USD USD JPY USD Investments ...... 99,331 1,157,944 (229,009,313) 843,884 Derivatives and foreign currencies ...... (2,925) (13,483) (919,971) 1,002,739 96,406 1,144,461 (229,929,284) 1,846,623

Net gain (loss) on investment activities

Global Global High Europe Focus Global Climate Dynamic Dividend Global Listed Euro Credit Equity Change Bond Equity Infrastructure EUR EUR USD USD USD USD Net realised gain (loss) ...... 1,928,816 (72,126) 849,887 (2,042,044) (69,302) 4,123,003 Net unrealised gain (loss) ...... 1,143,244 (1,076,021) (4,969,296) (24,806) (2,070,699) (4,581,229) Net gain (loss) on investment activities ...... 3,072,060 (1,148,147) (4,119,409) (2,066,850) (2,140,001) (458,226)

Global Opportunistic Listed India Focus Japan Focus Property Equity Equity US Credit USD USD JPY USD Net realised gain (loss) ...... 950,269 256,925 (13,536,381) (5,994,875) Net unrealised gain (loss) ...... 96,406 1,144,461 (229,929,284) 1,846,623 1,046,675 1,401,386 (243,465,665) (4,148,252)

9. Efficient Portfolio Management Each of the Funds may employ investment techniques and financial derivative instruments for efficient portfolio management and/or investment purposes subject to the conditions and within the limits from time to time set forth in the prospectus as follows:

Futures are contracts to buy or sell a standard quantity of a specific asset (or, in some cases, receive or pay cash based on the performance of an underlying asset, instrument or index) at a pre-determined future date and at a price agreed through a transaction undertaken on an exchange. Futures contracts allow investors to hedge against market risk or gain exposure to the underlying market. Since these contracts are marked-to-market daily, investors can, by closing out their position, exit from their obligation to buy or sell the underlying assets prior to the contract‟s delivery date. Futures may also be used to equitise cash balances, both pending investment of a cash flow and with respect to fixed cash targets. Frequently, using futures to achieve a particular strategy instead of using the underlying or related security or index results in lower transaction costs being incurred.

A forward contract locks-in the price an index or asset may be purchased or sold on a future date. In currency forward contracts, the contract holders are obligated to buy or sell the currency at a specified price, at a specified quantity and on a specified future date, whereas an interest rate forward determines an interest rate to be paid or received on an obligation beginning at a start date sometime in the future. Forward contracts may be cash settled on a gross or a net basis. These contracts cannot be transferred. The Funds‟ use of forward foreign exchange contracts may include, but is not be limited to, altering the currency exposure of securities held, hedging against exchange risks, increasing exposure to a currency, and shifting exposure to currency fluctuations from one currency to another.

There were no other financial derivative instruments other than those described above held during the year.

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10. Financial Risks

Strategy in using Financial Instruments The activities of each Fund expose it to various financial risks such as market risk (including market price risk, interest rate risk, and currency risk), credit risk and liquidity risk. The Funds‟ overall risk management process focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on a Fund‟s financial performance.

The policies documented below are standard operational practices and are reviewed on a continuous basis. In certain market conditions, the Manager may apply additional risk procedures to minimise potential adverse affects on the Fund‟s financial performance.

These additional procedures include, but are not exclusive to, the meeting of a special Securities Valuation Committee whose tasks include a daily review of various impaired securities or markets. The Advisor will receive daily exposure reporting from the Administrator and Money Managers, with which it can review various event exposure on the Funds.

Each Fund delegates some of the management of its portfolio to external Money Managers. The risk management process operates at a number of levels. In addition to monitoring investment activity and exposure at the point of execution by a Money Manager, the Russell Investments associate responsible for ensuring a Fund is managed according to its guidelines and objectives (the “Russell Portfolio Manager”) oversees and monitors the overall level of risk in a Fund. The Custodian and Trustee also provides an independent analysis of financial instrument exposure by monitoring investment limits in accordance with the Regulations and the prospectus.

Market Price Risk Market price risk is defined in FRS 29 as the risk that the fair value of a financial instrument or its future cash flows will fluctuate because of changes in market prices other than those caused by interest rate risk or currency risk.

All investments present a risk of loss of capital. The Funds‟ investments are susceptible to other price risk arising from uncertainties about future prices of the instruments. Except for other derivatives, maximum risk resulting from financial instruments is determined by fair value of the financial instruments. Possible losses from certain derivatives can be unlimited. The Advisor moderates this risk by diversifying the management of its assets by allocating them between one or more Money Managers. The Funds‟ Money Manager monitors its portfolio holdings on a daily basis.

The Advisor monitors each Fund‟s characteristics in detail with the Money Manager at least quarterly and in some cases monthly. The Advisor also reviews the portfolio characteristic of each Fund in its entirety. This review may include as appropriate a review of country allocations, country weights, capitalisation, distribution, industry sector weights, price/book levels, currency exposure, portfolio maturity, portfolio duration, sector exposure and quality exposure and other key risk measures.

The Funds may employ investment techniques and financial derivative instruments for efficient portfolio management and/or investment purposes within the limits set forth in Schedule 2 of the Prospectus “Financial Derivative Investments”. The Funds 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. Derivative contracts entered into during the year are discussed in Note 9 to the financial statements.

The Funds may use any of the above derivatives to (i) hedge an exposure (ii) gain a positive or negative exposure to an underlying market, asset, currency, commodity, deposit, reference rate or index, provided that the Funds may not have an indirect exposure to an instrument, issuer or currency to which it cannot have a direct exposure.

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Change in NAV due to Increase or Decrease in Benchmark Return The following market rate sensitivity information is a relative estimate of risk and is not intended to be a precise and accurate number. The calculations are based on historical data. Future price movements and the correlations between the Funds and their benchmarks could vary significantly from those experienced in the past and the past performance is not necessarily an indicator of future performance. This is the best estimate based on the information available at the time the financial statements were prepared. Euro Credit, Global Dynamic Bond and US Credit are not included in the chart below as the majority of those Funds‟ assets are in long-term bonds and notes. As a result, those Funds are not subject to significant amounts of other price risk. It is not possible to produce a meaningful benchmark sensitivity analysis due to insufficient historical performance data for Funds with less than 12 months trading history. Consequently Global Focus Equity has not been included in the table below.

As at 30 June 2011 Change in Net Assets Fund Name Benchmark Currency 5% Increase 5% Decrease Europe Focus Equity Russell Developed Europe Large Cap Net Index EUR 206,859 (125,875) Global Climate Change Russell Global Index Net TR USD 84,518 (87,000) Global High Dividend Equity Russell Global Index Net USD 508,198 (569,133) Global Listed Infrastructure S&P Global Listed Infrastructure Index Net USD 529,152 (222,375) Global Opportunistic Listed Property FTSE EPRA/NAREIT Developed Index Net USD 225,969 (256,291) India Focus Equity MSCI India Net USD 117,200 (103,822) Japan Focus Equity Russell/Nomura Prime Index Net JPY 4,399,479 (5,658,172)

As at 30 June 2010 Change in Net Assets Fund Name Benchmark Currency 5% Increase 5% Decrease Europe Focus Equity Russell Developed Europe Large Cap Net Index EUR 131,690 (131,690) Global Climate Change Russell Global Index Net TR USD 155,136 (220,456) Global High Dividend Equity Russell Global Index Net USD 113,731 (113,731) Global Listed Infrastructure S&P Global Infrastructure Index USD 257,766 (208,028) Global Opportunistic Listed Property FTSE EPRA/NAREIT Developed Index Net USD 92,160 (89,476) India Focus Equity MSCI India Net USD 162,871 (85,023) Japan Focus Equity Russell/Nomura Prime Index Net JPY 6,794,552 (6,794,552)

The Funds‟ other price risk is managed through rigorous Money Manager selection and diversification in accordance with the Regulations and the limits set in the section of the Prospectus entitled “Investment Objectives” and “Investment Strategies”.

Fair value estimation Fair value of securities is defined as the price that the Funds would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. To increase consistency and comparability in fair value measurement, the fair value hierarchy was established to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including a pricing model and/or risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity‟s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Fair valuation hierarchy The amendment to FRS 29 „Improving Disclosures about Financial Instruments‟, effective 1 January 2009, requires the Company to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements.

The fair value hierarchy of inputs is summarised in the three broad levels listed below.

. Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. . Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). . Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

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The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability.

The determination of what constitutes „observable‟ requires significant judgement by the Company. The Company considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The following tables analyse within the fair value hierarchy each Fund‟s financial assets and liabilities (by class) measured at fair value at 30 June 2011:

No transfers occurred between the levels during the year or the prior year under review.

Euro Credit Level 1 Level 2 Level 3 Total Assets EUR EUR EUR EUR Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... - 68,300,318 740,474 69,040,792 Collective Investment Schemes ...... - 121 - 121 Unrealised gain on open futures contracts ...... 9,900 - - 9,900 Unrealised gain on forward foreign currency exchange contracts ...... - 46,058 - 46,058 Total assets ...... 9,900 68,346,497 740,474 69,096,871

Liabilities Financial liabilities at fair value through profit or loss: Unrealised loss on open futures contracts ...... (3,440) - - (3,440) Unrealised loss on forward foreign currency exchange contracts ...... - (2,173,355) - (2,173,355) Total liabilities ...... (3,440) (2,173,355) - (2,176,795)

Level 3 Reconciliation The following table presents the movement in Level 3 instruments for Euro Credit for the year ended 30 June 2011 by class of financial instrument.

Total EUR Opening balance ...... - Gains and losses recognised in profit and loss ...... (80,771) Purchases ...... 821,245 Sales ...... - Transfers out of Level 3 ...... - Transfers into Level 3 ...... - Closing balance ...... 740,474

Europe Focus Equity Level 1 Level 2 Level 3 Total Assets EUR EUR EUR EUR Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 35,556,360 - - 35,556,360 Collective Investment Schemes ...... - 1,347,982 - 1,347,982 Unrealised gain on open futures contracts ...... 48,147 - - 48,147 Unrealised gain on forward foreign currency exchange contracts ...... - 11,908 - 11,908 Total assets ...... 35,604,507 1,359,890 - 36,964,397

Liabilities Financial liabilities at fair value through profit or loss: Unrealised loss on forward foreign currency exchange contracts ...... - (20,842) - (20,842) Total liabilities ...... - (20,842) - (20,842)

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Global Climate Change Level 1 Level 2 Level 3 Total Assets USD USD USD USD Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 14,888,427 - - 14,888,427 Collective Investment Schemes ...... - 693,711 - 693,711 Unrealised gain on open futures contracts ...... 25,840 - - 25,840 Total assets ...... 14,914,267 693,711 - 15,607,978

Global Dynamic Bond Level 1 Level 2 Level 3 Total Assets USD USD USD USD Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 11,722,071 27,222,681 - 38,944,752 Collective Investment Schemes ...... - 2,212,869 - 2,212,869 Money Market Instruments ...... 1,359,932 - - 1,359,932 Unrealised gain on open futures contracts ...... 27,385 - - 27,385 Unrealised gain on forward foreign currency exchange contracts ...... - 663,776 - 663,776 Total assets ...... 13,109,388 30,099,326 - 43,208,714

Liabilities Financial liabilities at fair value through profit or loss: Unrealised loss on open futures contracts ...... (43,461)...... - - (43,461) Unrealised loss on forward foreign currency exchange contracts ...... - (470,250) - (470,250) Total liabilities ...... (43,461) (470,250) - (513,711)

Global Focus Equity* Level 1 Level 2 Level 3 Total Assets USD USD USD USD Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 197,392,997 - - 197,392,997 Collective Investment Schemes ...... - 7,975,527 - 7,975,527 Unrealised gain on open futures contracts ...... 318,597...... - - 318,597 Unrealised gain on forward foreign currency exchange contracts ...... - 23,406 - 23,406 Total assets ...... 197,711,594 7,998,933 - 205,710,527

Liabilities Financial liabilities at fair value through profit or loss: Unrealised loss on open futures contracts ...... (475) - - (475) Unrealised loss on forward foreign currency exchange contracts ...... - (47,087) - (47,087) Total liabilities ...... (475) (47,087) - (47,562)

* The Fund launched 15 March 2011.

Global High Dividend Equity Level 1 Level 2 Level 3 Total Assets USD USD USD USD Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 102,109,768 - - 102,109,768 Collective Investment Schemes ...... - 3,724,390 - 3,724,390 Unrealised gain on open futures contracts ...... 182,690...... - - 182,690 Total assets ...... 102,292,458 3,724,390 - 106,016,848

Global Listed Infrastructure Level 1 Level 2 Level 3 Total Assets USD USD USD USD Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 94,652,159 - - 94,652,159 Collective Investment Schemes ...... - 3,163,973 - 3,163,973 Total assets ...... 94,652,159 3,163,973 - 97,816,132

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Global Opportunistic Listed Property Level 1 Level 2 Level 3 Total Assets USD USD USD USD Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 45,292,136 - - 45,292,136 Collective Investment Schemes ...... - 987,811 - 987,811 Total assets ...... 45,292,136 987,811 - 46,279,947

India Focus Equity Level 1 Level 2 Level 3 Total Assets USD USD USD USD Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 26,427,821 - - 26,427,821 Collective Investment Schemes ...... - 1,287,765 - 1,287,765 Total assets ...... 26,427,821 1,287,765 - 27,715,586

Japan Focus Equity Level 1 Level 2 Level 3 Total Assets JPY JPY JPY JPY Financial assets at fair value through profit or loss: Unrealised gain on open futures contracts ...... 44,591,000...... - - 44,591,000 Total assets ...... 44,591,000 - - 44,591,000

US Credit Level 1 Level 2 Level 3 Total Assets USD USD USD USD Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 928,469 97,381,582 - 98,310,051 Collective Investment Schemes ...... - 1,403,757 - 1,403,757 Unrealised gain on open futures contracts ...... 66,688 - - 66,688 Unrealised gain on forward foreign currency exchange contracts ...... - 135,481 - 135,481 Total assets ...... 995,157 98,920,820 - 99,915,977

Liabilities Financial liabilities at fair value through profit or loss: Unrealised loss on open futures contracts ...... (37,102)...... - - (37,102) Unrealised loss on forward foreign currency exchange contracts ...... - (2,288,608) - (2,288,608) Total liabilities ...... (37,102) (2,288,608) - (2,325,710)

The following tables analyse within the fair value hierarchy the Company‟s financial assets (by class) measured at fair value at the period ended 30 June 2010:

Euro Credit Level 1 Level 2 Level 3 Total Assets EUR EUR EUR EUR Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... - 47,659,850 - 47,659,850 Collective Investment Schemes ...... - 121 - 121 Unrealised gain on open futures contracts ...... 730 - - 730 Unrealised gain on forward foreign currency exchange contracts ...... - 941,319 - 941,319 Total assets ...... 730 48,601,290 - 48,602,020

Liabilities Financial liabilities at fair value through profit or loss: Unrealised loss on open futures contracts ...... (990) - - (990) Total liabilities ...... (990) - - (990)

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Europe Focus Equity Level 1 Level 2 Level 3 Total Assets EUR EUR EUR EUR Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 26,376,117 - - 26,376,117 Collective Investment Schemes ...... - 458,240 - 458,240 Unrealised gain on forward foreign currency exchange contracts ...... - 32,387 - 32,387 Total assets ...... 26,376,117 490,627 - 26,866,744

Liabilities Financial liabilities at fair value through profit or loss: Unrealised loss on open futures contracts ...... (58,857)...... - - (58,857) Unrealised loss on forward foreign currency exchange contracts ...... - (41,493) - (41,493) Total liabilities ...... (58,857) (41,493) - (100,350)

Global Climate Change Level 1 Level 2 Level 3 Total Assets USD USD USD USD Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 36,735,839 - - 36,735,839 Collective Investment Schemes ...... - 1,846,085 - 1,846,085 Unrealised gain on open futures contracts ...... - - - - Unrealised gain on forward foreign currency exchange contracts ...... - - - - Total assets ...... 36,735,839 1,846,085 - 38,581,924

Liabilities Financial liabilities at fair value through profit or loss: Unrealised loss on open futures contracts ...... (71,422)...... - - (71,422) Total liabilities ...... (71,422) - - (71,422)

Global Dynamic Bond Level 1 Level 2 Level 3 Total Assets USD USD USD USD Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 10,184,426 22,754,763 - 32,939,189 Unrealised gain on forward foreign currency exchange contracts ...... - 618,418 - 618,418 Total assets ...... 10,184,426 23,373,181 - 33,557,607

Liabilities Financial liabilities at fair value through profit or loss: Unrealised loss on forward foreign currency exchange contracts ...... - (769,893) - (769,893) Total liabilities ...... - (769,893) - (769,893)

Global High Dividend Equity Level 1 Level 2 Level 3 Total Assets USD USD USD USD Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 26,638,709 - - 26,638,709 Collective Investment Schemes ...... - 960,699 - 960,699 Total assets ...... 26,638,709 960,699 - 27,599,408

Liabilities Financial liabilities at fair value through profit or loss: Unrealised loss on open futures contracts ...... (58,533)...... - - (58,533) Total liabilities ...... (58,533) - - (58,533)

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Global Listed Infrastructure Level 1 Level 2 Level 3 Total Assets USD USD USD USD Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 43,064,048 - - 43,064,048 Collective Investment Schemes ...... - 1,323,864 - 1,323,864 Total assets ...... 43,064,048 1,323,864 - 44,387,912

Global Opportunistic Listed Property Level 1 Level 2 Level 3 Total Assets USD USD USD USD Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 18,770,570 - - 18,770,570 Collective Investment Schemes ...... - 556,189 - 556,189 Total assets ...... 18,770,570 556,189 - 19,326,759

India Focus Equity Level 1 Level 2 Level 3 Total Assets USD USD USD USD Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 19,651,285 - - 19,651,285 Collective Investment Schemes ...... - 682,000 - 682,000 Total assets ...... 19,651,285 682,000 - 20,333,285 Japan Focus Equity Level 1 Level 2 Level 3 Total Assets JPY JPY JPY JPY Financial assets at fair value through profit or loss: Investments at fair value: Transferable securities ...... 1,565,644,300...... - - 1,565,644,300 Total assets ...... 1,565,644,300 - - 1,565,644,300

Liabilities Financial liabilities at fair value through profit or loss: Unrealised loss on open futures contracts ...... (920,000)...... - - (920,000) Total liabilities ...... (920,000) - - (920,000)

US Credit Level 1 Level 2 Level 3 Total Assets USD USD USD USD Financial assets at fair value through profit or loss: Investments at fair value: Transferable Securities ...... 2,980,523 60,486,895 - 63,467,418 Unrealised gain on forward foreign currency exchange contracts ...... - 1,177,531 - 1,177,531 Total assets ...... 2,980,523 61,664,426 - 64,644,949

Liabilities Financial liabilities at fair value through profit or loss: Unrealised loss on open futures contracts ...... (75,500)...... - - (75,500) Unrealised loss on forward foreign currency exchange contracts ...... - (99,288) - (99,288) Total liabilities ...... (75,500) (99,288) - (174,788)

Investments, whose values are based on quoted market prices in active markets, and therefore classified within Level 1, include active listed equities, U.S. Treasury Bills and exchange traded derivatives. The Funds do not adjust the quoted price for these instruments.

Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. These include bond instruments, collective investment schemes and over-the-counter derivatives.

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Investments classified within Level 3 have significant unobservable inputs, as they trade infrequently and are made up of corporate debt securities. As observable prices are not available for these securities, the Funds have used valuation techniques to derive the fair value.

Level 3 securities are securities that may be priced by a single pricing vendor or may have prolonged stale prices or may have no valid market information (indications or comparable security types) is available. When the use of the Company‟s financial information or other market indicators are used to calculate valuation, such fair value process will need to be approved by the Investment Advisors Securities Valuation Committee.

Interest Rate Risk The Funds‟ interest bearing financial assets and liabilities expose it to risks associated with the effects of fluctuations in the prevailing level of interest rates. As discussed in Note 9 to the financial statements, the Funds may employ investment techniques and financial derivative instruments in order to hedge against interest rate risk or gain exposure to the underlying market. In addition, mortgage and asset backed securities are also subject to prepayment risk, which is the risk that borrowers pay off the debt underlying the MBS/ABS securities sooner than anticipated and therefore shorten the average maturity of the Funds. Each Fund‟s Money Manager monitors their interest rate sensitivity on a daily basis utilising quantitative and fundamental models. The Advisor monitors each Fund‟s characteristics in detail with the Money Manager at least quarterly and in some cases monthly. The Advisor also reviews a Fund‟s portfolio characteristics in its entirety. This review may include as appropriate a review of country allocations, country weights, distribution, industry sector weights, currency exposure, portfolio maturity, portfolio duration, sector exposure and quality exposure and other key risk measures.

The tables below summarise each relevant Fund‟s exposure to interest rate risks. It includes each relevant Fund‟s assets and trading liabilities at fair values, categorised by the earlier of contractual re-pricing or maturity dates. Europe Focus Equity, Global Climate Change, Global Focus Equity, Global High Dividend Equity, Global Listed Infrastructure, Global Opportunistic Listed Property, India Focus Equity and Japan Focus Equity are not included in the tables below as the majority of the financial assets and liabilities of those Funds are non-interest bearing or have a very short time to maturity. As a result, those Funds are not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates.

As at 30 June 2011

Euro Credit Up to 1 to Over Non-interest 1 year 5 years 5 years bearing Total EUR EUR EUR EUR EUR Assets Transferable securities ...... 1,675,642 29,922,627 37,442,523 - 69,040,792 Collective investment schemes ...... - - - 121 121 Financial derivative instruments ...... - - - 55,958 55,958 Cash and bank balances ...... 2,327,803 - - - 2,327,803 Cash held with brokers and counterparties for open derivative contracts ...... 11,300 - - - 11,300 Other assets ...... - - - 1,543,791 1,543,791 Total assets ...... 4,014,745 29,922,627 37,442,523 1,599,870 72,979,765

Liabilities Financial derivative instruments ...... - - - (2,176,795) (2,176,795) Creditors ...... - - - (1,171,341) (1,171,341) Total liabilities ...... - - - (3,348,136) (3,348,136)

Total net assets 69,631,629

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Global Dynamic Bond Up to 1 to Over Non-interest 1 year 5 years 5 years bearing Total USD USD USD USD USD Assets Transferable securities ...... 2,051,516 10,660,275 27,592,893 - 40,304,684 Collective investment schemes ...... - - - 2,212,869 2,212,869 Financial derivative instruments ...... - - - 691,161 691,161 Cash and bank balances ...... 573,414 - - - 573,414 Other assets ...... - - - 384,262 384,262 Total assets ...... 2,624,930 10,660,275 27,592,893 3,288,292 44,166,390

Liabilities Financial derivative instruments ...... - - - (513,711) (513,711) Cash due to brokers and counterparties for open derivative positions ...... (15,808) - - - (15,808) Creditors ...... - - - (102,217) (102,217) Total liabilities ...... (15,808) - - (615,928) (631,736)

Total net assets 43,534,654

US Credit Up to 1 to Over Non-interest 1 year 5 years 5 years bearing Total USD USD USD USD USD Assets Transferable securities ...... 1,561,755 31,396,656 65,351,640 - 98,310,051 Collective investment schemes ...... - - - 1,403,757 1,403,757 Financial derivative instruments ...... - - - 202,169 202,169 Cash and bank balances ...... 120,748 - - - 120,748 Other assets ...... - - - 2,619,246 2,619,246 Total assets ...... 1,682,503 31,396,656 65,351,640 4,225,172 102,655,971

Liabilities Financial derivative instruments ...... - - - (2,325,710) (2,325,710) Cash due to brokers and counterparties for open derivative positions ...... (6,775) - - - (6,775) Creditors ...... - - - (798,762) (798,762) Total liabilities ...... (6,775) - - (3,124,472) (3,131,247)

Total net assets 99,524,724

As at 30 June 2010

Euro Credit Up to 1 to Over Non-interest 1 year 5 years 5 years bearing Total EUR EUR EUR EUR EUR Assets Transferable securities ...... 1,246,560 24,623,654 21,789,636 - 47,659,850 Collective investment schemes ...... - - - 121 121 Financial derivative instruments ...... - - - 942,049 942,049 Cash and bank balances ...... 788,429 - - - 788,429 Cash held with brokers and counterparties for open derivative contracts ...... 11,930 - - - 11,930 Other assets ...... - - - 15,473,155 15,473,155 Total assets ...... 2,046,919 24,623,654 21,789,636 16,415,325 64,875,534

Liabilities Financial derivative instruments ...... - - - (990) (990) Creditors ...... - - - (10,862,152) (10,862,152) Total liabilities ...... - - - (10,863,142) (10,863,142)

Total net assets 54,012,392

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Global Dynamic Bond Up to 1 to Over Non-interest 1 year 5 years 5 years bearing Total USD USD USD USD USD Assets Transferable securities ...... - 6,700,622 26,238,567 - 32,939,189 Financial derivative instruments ...... - - - 618,418 618,418 Cash and bank balances ...... 1,789,445 - - - 1,789,445 Other assets ...... - - - 407,878 407,878 Total assets ...... 1,789,445 6,700,622 26,238,567 1,026,296 35,754,930

Liabilities Financial derivative instruments ...... - - - (769,893) (769,893) Creditors ...... - - - (220,574) (220,574) Total liabilities ...... - - - (990,467) (990,467)

Total net assets 34,764,463

US Credit Up to 1 to Over Non-interest 1 year 5 years 5 years bearing Total USD USD USD USD USD Assets Transferable securities ...... 568,952 23,761,062 39,137,404 - 63,467,418 Financial derivative instruments ...... - - - 1,177,531 1,177,531 Cash and bank balances ...... 4,278,041 - - - 4,278,041 Cash held with brokers and counterparties for open derivative contracts ...... 34,700 - - - 34,700 Other assets ...... - - - 17,942,836 17,942,836 Total assets ...... 4,881,693 23,761,062 39,137,404 19,120,367 86,900,526

Liabilities Financial derivative instruments ...... - - - (174,788) (174,788) Creditors ...... - - - (19,404,513) (19,404,513) Total liabilities ...... - - - (19,579,301) (19,579,301)

Total net assets 67,321,225

The below interest rate sensitivity information is a relative estimate of risk and is not intended to be a precise and accurate number. The calculations are based on historical data. Future price movements and correlations between securities could vary significantly from those experienced in the past.

Approximate increase or decrease in net asset value due to a 1% change in market interest rates

Change in Net Asset Value Fund Name Currency As at 30 June 2011 As at 30 June 2010 Euro Credit ...... EUR ...... 3,153,719 .. 2,289,137 Global Dynamic Bond ...... USD ...... 2,935,718...... 2,222,542 US Credit ...... USD ...... 5,912,364 ..... 4,004,941

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Currency Risk The Funds may hold assets denominated in currencies other than the functional currency of the Fund. They are therefore exposed to currency risk, as the value of the securities denominated in other currencies will fluctuate due to changes in exchange rates. A Fund may utilise financial instruments to hedge against fluctuations in the relative values of their portfolio positions in addition to making active currency selections.

The following tables detail Funds with material currency exposures at the balance sheet date. Funds containing currencies which have immaterial exposure have been amalgamated for the purposes of presentation. Funds not listed below do not have any material currency exposures as of balance sheet date.

Year ended 30 June 2011

Euro Credit Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure EUR EUR EUR British Pound ...... (2,127,297) - (2,127,297) (2,127,297) - (2,127,297)

Europe Focus Equity Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure EUR EUR EUR British Pound ...... 39,017 8,685,953 8,724,970 Norwegian Krone ...... - 5,452,444 5,452,444 Swedish Krona ...... - 4,198,978 4,198,978 All other foreign currencies ...... 2,055 3,110,143 3,112,198 41,072 21,447,518 21,488,590

Global Climate Change Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure USD USD USD British Pound ...... 117,321 1,058,707 1,176,028 Euro ...... 31,021 4,126,916 4,157,937 Hong Kong Dollar ...... 44,121 1,240,277 1,284,398 All other foreign currencies ...... 750,980 2,420,707 3,171,687 943,443 8,846,607 9,790,050

Global Dynamic Bond Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure USD USD USD British Pound ...... 5,189,445 - 5,189,445 Euro ...... 8,495,746 5,869 8,501,615 Japanese Yen ...... 4,107,955 - 4,107,955 All other foreign currencies ...... 8,898,801 - 8,898,801 26,691,947 5,869 26,697,816

Global Focus Equity* Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure USD USD USD Australian Dollar ...... 113,454 19,297,389 19,410,843 Euro ...... 165,636 31,141,976 31,307,612 Swiss Franc ...... 169,163 14,406,296 14,575,459 All other foreign currencies ...... 1,439,409 45,654,739 47,094,148 1,887,662 110,500,400 112,388,062

* The Fund launched 15 March 2011.

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Global High Dividend Equity Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure USD USD USD Australian Dollar ...... (202,232) 9,955,419 9,753,187 Euro ...... (736,913) 15,680,726 14,943,813 Hong Kong Dollar ...... - 7,138,089 7,138,089 All other foreign currencies ...... (95,382) 24,905,566 24,810,184 (1,034,527) 57,679,800 56,645,273

Global Listed Infrastructure Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure USD USD USD Australian Dollar ...... (339,683) 17,149,763 16,810,080 Brazilian Real ...... 75,620 9,523,115 9,598,735 Euro ...... 149,222 30,350,214 30,499,436 All other foreign currencies ...... 409,204 20,440,840 20,850,044 294,363 77,463,932 77,758,295

Global Opportunistic Listed Property Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure USD USD USD Australian Dollar ...... 159,754 4,571,050 4,730,804 Hong Kong Dollar ...... 19,944 5,013,782 5,033,726 Singapore Dollar ...... 166,247 4,126,085 4,292,332 All other foreign currencies ...... 216,877 11,886,171 12,103,048 562,822 25,597,088 26,159,910

India Focus Equity Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure USD USD USD Indian Rupee ...... 894,527 26,427,821 27,322,348 894,527 26,427,821 27,322,348

US Credit Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure USD USD USD British Pound ...... (2,247,819) - (2,247,819) Euro ...... 94,692 - 94,692 (2,153,127) - (2,153,127)

Year ended 30 June 2010

Euro Credit Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure EUR EUR EUR British Pound ...... 1,071,453 - 1,071,453 1,071,453 - 1,071,453

Europe Focus Equity Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure EUR EUR EUR British Pound ...... (1,771) 6,628,959 6,627,188 Norwegian Krone ...... - 2,813,884 2,813,884 Swiss Franc ...... - 2,253,583 2,253,583 All other foreign currencies ...... 17,855 1,749,845 1,767,700 16,084 13,446,271 13,462,355

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Global Climate Change Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure USD USD USD Euro ...... 30,324 6,802,903 6,833,227 Hong Kong Dollar ...... 33,163 2,833,430 2,866,593 Japanese Yen ...... 32,204 5,368,207 5,400,411 All other foreign currencies ...... 116,484 6,280,635 6,397,119 212,175 21,285,175 21,497,350

Global Dynamic Bond Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure USD USD USD Euro ...... 10,868,293 - 10,868,293 Japanese Yen ...... 5,495,624 - 5,495,624 Norwegian Krone ...... 2,214,714 - 2,214,714 All other foreign currencies ...... 4,375,753 - 4,375,753 22,954,384 - 22,954,384

Global High Dividend Equity Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure USD USD USD Australian Dollar ...... 30,732 2,743,500 2,774,232 Euro ...... 10,067 3,333,677 3,343,744 Hong Kong Dollar ...... 17,842 1,677,999 1,695,841 All other foreign currencies ...... 159,850 4,763,365 4,923,215 218,491 12,518,541 12,737,032

Global Listed Infrastructure Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure USD USD USD Australian Dollar ...... 73,472 4,431,611 4,505,083 Brazilian Real ...... 104,703 4,344,053 4,448,756 Euro ...... 6,299 12,625,539 12,631,838 All other foreign currencies ...... 182,195 10,905,232 11,087,427 366,669 32,306,435 32,673,104

Global Opportunistic Listed Property Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure USD USD USD Australian Dollar ...... 57,476 2,278,665 2,336,141 Hong Kong Dollar ...... 20,943 2,503,410 2,524,353 Singapore Dollar ...... 3,585 1,534,852 1,538,437 All other foreign currencies ...... 225,278 5,233,543 5,458,821 307,282 11,550,470 11,857,752

India Focus Equity Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure USD USD USD Indian Rupee ...... 977,474 19,651,285 20,628,759 977,474 19,651,285 20,628,759

US Credit Monetary Net Non-Monetary Net Financial Assets/(Liabilities) Net Assets Assets/(Liabilities) Foreign Currency Exposure USD USD USD British Pound ...... 1,101,098 - 1,101,098 Euro ...... (22,830) - (22,830) 1,078,268 - 1,078,268

There was no material currency risk in relation to Japan Focus Equity Fund.

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Currency Sensitivity Analysis The tables below detail the approximate increase or decrease in net assets attributable to redeemable participating shareholders if the exchange rate between the base currency of the relevant Fund and the relevant foreign currency increased by 5% (or 10% of emerging market countries‟ currencies). Only those Funds where the overall net increase/(decrease) is greater than 0.50% of the respective Fund's net asset value as at either 30 June 2011 or 30 June 2010 are listed.

Emerging market countries are those that have low or middle per capita income as determined by the World Bank for at least two consecutive years based on data lagging one year, or those countries that either had restructured external/local debt during the past 10 years or currently have restructured external/local debt outstanding. Investments denominated in currencies of emerging market countries may experience more volatility, can be subject to significant depreciation, and may not be freely convertible. Emerging market currencies are identified (where applicable) by an asterisk in the tables below.

Approximate increase or decrease in net assets due to a change in currency exchange rates

Global Dynamic Bond 30 June 2011 30 June 2010 Currency Sensitivity Analysis USD USD British Pound ...... (247,116) - Euro ...... (404,559) (517,538) Japanese Yen ...... (195,617) (261,696) Norwegian Krone ...... - (105,463) All other foreign currencies ...... (441,793) (223,414) (1,289,085) (1,108,111)

There were no other Funds where the overall net increase/(decrease) is greater than 0.50 per cent of the respective Fund‟s net asset value as at either 30 June 2011 or 20 June 2010 and therefore considered insignificant and not listed.

Each Fund‟s Money Manager monitors their currency positions on a daily basis using quantitative and fundamental models. The Advisor monitors the Fund‟s portfolio characteristics in detail with the Money Managers at least quarterly and in some cases monthly.

Credit Risk The Funds take on credit risk which is the risk that a counterparty or issuer will be unable to pay amounts in full when due. Impairment provisions are provided for losses that have been incurred by the balance sheet date, if any.

The Funds‟ main credit risk concentrations arise from trading, collective investment schemes and financial derivative instruments in addition to cash balances and investments held at the Custodian and Trustee.

The Funds are exposed to credit risk on the counterparties with which it trades in relation to derivatives that are not traded on a recognised exchange (OTC derivatives). Such instruments are not afforded the same protections as may apply to participants trading on organised exchanges, such as the performance guarantee of an exchange clearing house.

The relevant Funds will also be subject to the possibility of the insolvency, bankruptcy or default of counterparties with which that Fund trades financial derivatives which could result in losses to the Company.

The Funds minimise concentrations of credit risk by undertaking transactions with a large number of counterparties. The Company‟s prospectus and the UCITS Regulations list various investment restrictions with regard to issuer and counterparty concentration limits and minimum counterparty credit ratings. A Fund‟s exposure to counterparty risk is further reduced where a counterparty provides collateral in respect of financial derivatives.

The Advisor employs a credit research team that performs robust quantitative and qualitative analysis on banks, insurance companies, and other counterparties. The credit research analyst assigned to a particular counterparty will perform full credit analysis and will write a credit research report and will subsequently set investment parameters on OTC counterparty ratings and exposures where appropriate.

The credit research team only reviews counterparties for those assets directly managed by Russell investments. The individual Money Managers have their own research process for the assets under their management.

A variety of monitoring activities take place to ensure that, in addition to exposures resulting from direct investment in debt or equity issued by a company, exposures relating to securities trading, foreign exchange and hedging activities and derivatives are within the guidelines. Notes to the Financial Statements 153 OpenWorld plc

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All assets as disclosed on each Fund‟s Balance Sheets are exposed to credit risk.

Certain Funds in the Company invest in debt securities which are rated by a well-known rating agency. For un-rated investments a rating is assigned using an approach that is consistent with investment grade rating agencies. The tables below detail the Schedule of Investments by rating category for all Funds which invest in debt securities.

Euro Credit Global Dynamic Bond % of Investments % of Investments % of Investments % of Investments Portfolio by rating category As at 30 June 2011 As at 30 June 2010 As at 30 June 2011 As at 30 June 2010 A ...... 38.76% 39.24% - - AA ...... 10.17% 11.95% 15.07% 19.07% AAA ...... 22.45% 22.19% 52.48% 77.49% B ...... 3.03% 6.09% - - BB ...... 1.63% - - - BBB ...... 23.30% 19.85% - - C ...... - - - - CCC ...... - - - - NR/Other ...... 0.66% 0.68% 32.45% 3.44% Total ...... 100.00% 100.00% 100.00% 100.00%

US Credit % of Investments % of Investments Portfolio by rating category As at 30 June 2011 As at 30 June 2010 A ...... 41.08% 28.26% AA ...... 6.62% 5.60% AAA ...... 1.39% 2.49% B ...... 0.53% 0.39% BB ...... 4.52% 3.58% BBB ...... 44.92% 32.50% C ...... - 0.27% CCC ...... - 0.08% NR/Other ...... 0.94% 26.83% Total ...... 100.00% 100.00%

In addition, over-the-counter financial derivative contracts have an exposure to counterparty risk such that the counterparty may become insolvent or otherwise incapable of meeting its obligations under an FDI contract. This includes the legal risk arising from a contract being unenforceable.

The names of brokers and counterparties used by each individual Fund can be found at the base of each relevant Schedule of Investments.

Collateral may be pledged, generally by way of cash or cash equivalents, and held by the counterparty for open futures contracts. Amounts of cash collateral held at year-end by counterparties are disclosed on the Balance Sheet of the Funds. Cash collateral can sometimes be included in the relevant Fund valuation if explicitly requested by the Money Manager. See Note 4 to the financial statements for full details of cash collateral pledged to or by the relevant Funds as at 30 June 2011 and 30 June 2010.

Each relevant Fund‟s Money Manager conducts periodic reviews of the counterparties with whom they conduct transactions. The Advisor also monitors each Fund‟s counterparty exposures. In addition, risk exposure to a counterparty may be reduced by collateral provided to the Fund by the counterparty in accordance with the UCITS Regulations.

All securities, cash at bank balances and bank overdrafts are held by the Custodian and Trustee through its affiliate, State Street Bank and Trust Company (“State Street”) or through a sub-custodian. Bankruptcy or insolvency of the Custodian and Trustee, State Street or State Street Cayman Trust Company Ltd., Cayman Islands, may cause the Company‟s rights with respect to cash and securities held by these entities to be delayed or limited and the Company would be treated as a general creditor of that entity in respect of its cash balances. Periodic monitoring and an annual credit review are performed on the Custodian and Trustee by a credit research team. This review may include as appropriate an assessment of the Custodian and Trustee‟s liquidity position, income streams, asset quality and credit ratings. The long term credit rating of the Custodian and Trustee as of 30 June 2011 was A1, as rated by Moody‟s rating agency.

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Contract and/or margin or similar monies or other investments deposited by or on behalf of the Company for margin purposes with a counterparty, futures and options exchange, clearing broker or other party are not the responsibility of the Custodian and Trustee and the Custodian and Trustee shall not be liable in any way for the default of any counterparty, futures and options exchange, clearing broker or other party in respect of such margin and similar monies or other investments or for sums deducted from such margin or similar monies or other investments deposited as collateral for margin purposes. Similarly, contract and/or margin or similar monies or other investments received by the Company for margin purposes with the counterparty are held within the custodial network of the Custodian and Trustee.

As the Company may invest in markets where custodial and/or settlement systems are not fully developed, the assets of the Company which are traded in such markets and which have been entrusted to sub-custodians, in circumstances where the use of sub-custodians is necessary, may be exposed to risk in circumstances where the Custodian and Trustee will have no liability. Details of the potential risks to investors in such markets are set out in full in the Company‟s prospectus.

Each Fund‟s Money Manager‟s monitors each credit position on a daily basis. The Advisor monitors each Fund‟s portfolio characteristics (such as counterparty exposure, credit rating weights, and other key measures as appropriate) in detail with the Money Managers at least quarterly and in some cases monthly. The Advisor also reviews each Fund‟s portfolio characteristics in its entirety.

Liquidity Risk Generally, the Funds‟ assets are comprised of actively traded and highly liquid securities. The liquidity risks associated with the need to satisfy shareholders‟ requests for redemptions are mitigated by maintaining a pool of cash to satisfy usual levels of demand. In addition, the Funds may restrict redemptions and borrow monies on a temporary basis as detailed in the Company‟s prospectus. In highly volatile market conditions, the Funds may not easily liquidate assets needed for redemption or settlement. In such conditions, the Advisor may adjust the levels of cash held by the Funds.

The Funds avoid entering into derivative contractual arrangements that produce an exposure not covered by sufficient liquid assets or a total investment exposure in excess of total net assets. The risk management guidelines adopted by the Money Manager require that coverage be composed of cash reserves or physical securities.

At 30 June 2011 and 2010, substantially all of the Funds‟ liabilities including net assets attributable to redeemable participating shareholders were payable within three months.

The tables below analyse each Fund‟s financial derivative instruments that will be settled on a gross basis into relevant maturity groupings based on the remaining period at the Balance Sheet to the contractual maturity date.

As at 30 June 2011

Euro Credit Less than Currency 3 months Inflows ...... EUR 65,667,128 Outflows ...... EUR 67,794,425

Europe Focus Equity Less than Currency 3 months Inflows ...... EUR 1,952,171 Outflows ...... EUR 1,961,105

Global Dynamic Bond Fund Less than Currency 3 months Inflows ...... USD 133,116,815 Outflows ...... USD 132,923,289

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Global Focus Equity Less than Currency 3 months Inflows ...... USD 6,760,161 Outflows ...... USD 6,783,842

US Credit Less than Currency 3 months Inflows ...... USD 106,794,546 Outflows ...... USD 108,947,673

As at 30 June 2010

Euro Credit Less than Currency 3 months Inflows ...... EUR 30,567,002 Outflows ...... EUR 29,625,683

Europe Focus Equity Less than Currency 3 months Inflows ...... EUR 4,506,231 Outflows ...... EUR 4,515,337

Global Dynamic Bond Fund Less than Currency 3 months Inflows ...... USD 110,048,252 Outflows ...... USD 110,199,727

US Credit Less than Currency 3 months Inflows ...... USD 56,791,074 Outflows ...... USD 55,712,831

The Funds‟ Money Managers monitor their liquidity positions on a daily basis. The Advisor monitors the Fund‟s portfolio characteristics of each Fund (such as daily cash balances, average maturity, duration, and other key measures as appropriate) in detail with the Money Managers at least quarterly and in some cases monthly. The Advisor also reviews each Fund‟s portfolio characteristics in its entirety.

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11. Launch of New Funds and Classes of Shares

Year ended 30 June 2011

Global Focus Equity was funded on 15 March 2011.

The following classes of shares were launched during the year ended 30 June 2011:

Share Class Launch Date Launch Price Euro Credit Class B EURO Income ...... 11/03/2011 EUR 1,000.00 Class B STG£ Income ...... 21/09/2010 GBP 1,000.00 Class I EURO ...... 22/12/2010 EUR 1,000.00 Europe Focus Equity Class B STG£ ...... 21/09/2010 GBP 1,000.00 Class I STG£ ...... 21/09/2010 GBP 1,000.00 Global Climate Change Class A STG£ ...... 21/09/2010 GBP 1,000.00 Class I STG£ 21/09/2010 GBP 1,000.00 Global Dynamic Bond Class B EURO Income ...... 20/08/2010 EUR 1,000.00 Class B STG£ Income ...... 28/07/2010 GBP 1,000.00 Class B US$ ...... 20/08/2010 USD 1,000.00 Class I STG£ ...... 21/09/2010 GBP 1,000.00 Global Focus Equity Class P JP¥ ...... 15/03/2011 JPY 100,000 Global High Dividend Equity Class B EURO Income ...... 28/07/2010 EUR 1,000.00 Class B STG£ Income ...... 27/07/2010 GBP 1,000.00 Class B US$ Income ...... 12/11/2010 USD 1,000.00 Class I STG£ ...... 21/09/2010 GBP 1,000.00 Class I US$ ...... 17/09/2010 USD 1,000.00 Class P JP¥ ...... 23/03/2011 JPY 100,000 Global Listed Infrastructure Class A STG£ ...... 21/09/2010 GBP 1,000.00 Class I STG£ ...... 21/09/2010 GBP 1,000.00 Class I US$ NV ...... 03/08/2010 USD 1,000.00 Global Opportunistic Listed Property Class A STG£ ...... 21/09/2010 GBP 1,000.00 Class B US$ ...... 12/11/2010 USD 1,000.00 Class I STG£ ...... 21/09/2010 GBP 1,000.00 Class I US$ ...... 22/12/2010 USD 1,000.00 Class I US$ NV ...... 03/08/2010 USD 1,000.00 India Focus Equity Class B STG£ ...... 20/08/2010 GBP 1,000.00 Class B US$ ...... 11/11/2010 USD 1,000.00 Class I STG£ ...... 21/09/2010 GBP 1,000.00 Class I US$ ...... 22/12/2010 USD 1,000.00 Japan Focus Equity Class I JP¥ ...... 21/12/2010 JPY 100,000 US Credit Class B STG£ Income ...... 21/09/2010 GBP 1,000.00 Class I STG£ ...... 21/09/2010 GBP 1,000.00

Notes to the Financial Statements 157 OpenWorld plc

Notes to the Financial Statements - continued

30 June 2011

The following classes of shares were launched during the year ended 30 June 2010:

Share Class Launch Date Launch Price Euro Credit Class B EURO ...... 23/12/2009...... EUR 1,000.00 Class C EURO ...... 14/05/2010...... EUR 1,000.00 Class P EURO-NV ...... 11/12/2009 . EUR 1,000.00 Class P STG£ H ...... 11/12/2009..... GBP 1,000.00 Europe Focus Equity Class B EURO ...... 14/05/2010...... EUR 1,000.00 Class C EURO ...... 14/05/2010...... EUR 1,000.00 Class I EURO ...... 14/04/2010...... EUR 1,000.00 Class P EURO ...... 03/03/2010...... EUR 1,000.00 Class P US$ Income ...... 03/03/2010 USD 1,000.00 Global Climate Change Class B US$ ...... 20/09/2009...... USD 1,000.00 Class C EURO ...... 14/05/2010...... EUR 1,000.00 Class I US$ ...... 04/08/2009...... USD 1,000.00 Class P US$-NV ...... 04/08/2009..... USD 1,000.00 Global Dynamic Bond Class I US$ ...... 23/03/2010...... USD 1,000.00 Class P EURO H Income ...... 23/03/2010 EUR 1,000.00 Global High Dividend Equity Class C EURO ...... 14/05/2010...... EUR 1,000.00 Class P US$ Income ...... 19/02/2010 USD 1,000.00 Global Listed Infrastructure Class B US$ ...... 20/09/2009...... USD 1,000.00 Class C EURO ...... 14/05/2010...... EUR 1,000.00 Global Opportunistic Listed Property Class A US$ ...... 29/07/2009...... USD 1,000.00 Class B EURO ...... 20/09/2009...... EUR 1,000.00 Class C EURO ...... 14/05/2010...... EUR 1,000.00 Class P US$ ...... 29/07/2009...... USD 1,000.00 India Focus Equity Class B EURO ...... 14/05/2010...... EUR 1,000.00 Class P US$ Income ...... 08/03/2010 USD 1,000.00 Japan Focus Equity Class P JP¥ ...... 12/04/2010...... JPY 100,000 US Credit Class B US$ ...... 23/12/2009...... USD 1,000.00 Class I US$ ...... 25/03/2010...... USD 1,000.00 Class P EURO H-NV ...... 11/12/2009 EUR 1,000.00 Class P STG£ H-NV ...... 11/12/2009 GBP 1,000.00

12. Exchange Rates Where applicable, the Administrator used the exchange rates listed below to translate foreign currency amounts, market value of investments and other assets and liabilities into Euro at the following rates for each EUR 1.

30 June 2011 30 June 2011 30 June 2011 Australian Dollar AUD 1.35424 Ind ian Rupee INR 64.81187 South African Rand ZAR 9.82853 Brazilian Real BRL 2.26503 Indonesian Rupiah IDR 12,433.18000 South Korean Won KRW 1547.93128 British Pound GBP 0.90308 Japanese Yen JPY 117.08981 Swedish Krona SEK 9.14862 Canadian Dollar CAD 1.39925 Malaysian Ringgit MYR 4.37782 Swiss Franc CHF 1.22077 Chilean Peso CLP 679.32675 Mexican Peso MXN 17.00223 Taiwan Dollar TWD 41.64474 Chinese Yuan Renminbi CNY 9.37182 Norwegian Krone NOK 7.77909 Thailand Baht THB 44.54661 Czech Republic Koruna CZK 24.33245 Philippine Peso PHP 62.82921 U.S. Dollar USD 1.44985 Danish Krone DKK 7.45889 Polish Zloty PLN 3.98027 Hong Kong Dollar HKD 11.28164 Singapore Dollar SGD 1.77983

30 June 2010 30 June 2010 30 June 2010 Australian Dollar AUD 1.45019 Hong Kong Dollar HKD 9.53848 Singapore Dollar SGD 1.71008 Brazilian Real BRL 2.20788 Indian Rupee INR 56.89040 South African Rand ZAR 9.38984 British Pound GBP 0.81873 Indonesian Rupiah IDR 11,103.72088 South Korean Won KRW 1,496.78525 Canadian Dollar CAD 1.30164 Japanese Yen JPY 108.39142 Swedish Krona SEK 9.53217 Chinese Yuan Renminbi CNY 8.30654 Malaysian Ringgit MYR 3.96561 Swiss Franc CHF 1.32087 Czech Republic Koruna CZK 25.68499 Norwegian Krone NOK 7.96571 Taiwan Dollar TWD 39.35788 Danish Krone DKK 7.44905 Philippine Peso PHP 56.78025 U.S. Dollar USD 1.22490

158 Notes to the Financial Statements OpenWorld plc

Notes to the Financial Statements - continued

30 June 2011

The Administrator used the yearly average exchange rates listed below to translate the foreign currency amounts in the combined statements for the Profit and Loss Account and the Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders into Euro at the following rates for each EUR 1.

30 June 2011 30 June 2010 Japanese Yen JPY 113.0181 Japanese Yen JPY 126.18565 U.S. Dollar USD 1.3646 U.S. Dollar USD 1.37902

13. Comparative Dealing Net Assets

As at 30 June 2011

Euro Credit

Class B Class B EURO Class B STG Class C Class I Class P EURO Income £ Income EURO EURO EURO-NV EUR EUR GBP EUR EUR EUR Total net asset value 30 June 2011 ...... 433,564 3,427 1,068 1,047,594 1,021 7,091,187 30 June 2010 ...... 1,027.51 - - 997.75 - 8,919,732 Net asset value per share 30 June 2011 ...... 1,047.96 1,000.78 1,035.67 1,014.62 1,020.56 1,062.61 30 June 2010 ...... 1,027.51 - - 997.75 - 1,031.66

Euro Credit

Class P STG£ H GBP Total net asset value 30 June 2011 ...... 55,263,468 30 June 2010 ...... 37,026,465 Net asset value per share 30 June 2011 ...... 1,060.54 30 June 2010 ...... 1,031.92

Europe Focus Equity

Class B Class C EURO Class B STG£ EURO Class I EURO Class I STG£ EUR GBP EUR EUR GBP Total net asset value 30 June 2011 ...... 1,298,467 514,151 17,614 11,373,773 1,166 30 June 2010 ...... 1,002.05 - 1,001.00 7,440,924 - Net asset value per share 30 June 2011 ...... 1,192.86 1,156.73 1,182.59 1,102.00 1,166.06 30 June 2010 ...... 1,002.05 - 1,001.00 915.13 -

Europe Focus Equity

Class P Class P EURO US$ Income EUR USD Total net asset value 30 June 2011 ...... 2,505, 773 30,884,740 30 June 2010 ...... 2,348,892 21,854,479 Net asset value per share 30 June 2011 ...... 1,179.36 1,235.39 30 June 2010 ...... 977.89 874.18

Notes to the Financial Statements 159 OpenWorld plc

Notes to the Financial Statements - continued

30 June 2011

Global Climate Change

Class A Class B Class C Class I Class P STG£ US$ EURO Class I STG£ US$ US$-NV GBP USD EUR GBP USD USD Total net asset value 30 June 2011 ...... 1,146 182,662 90,982 1,150 15,608,231 - 30 June 2010 ...... - 210,611 929.07 - 9,385,480 29,557,263 Net asset value per share 30 June 2011 ...... 1,145.96 1,126.33 1,005.06 1,150.00 1,187.58 - 30 June 2010 ...... - 870.80 929.07 - 908.21 909.45

Global Dynamic Bond

Class B EURO Class B STG£ Class I Class P EURO Income Income Class B US$ Class I STG£ US$ H Income EUR GBP USD GBP USD EUR Total net asset value 30 June 2011 ...... 442,500 838,856 1,036 1,004 1,089 28,668,230 30 June 2010 ...... - - - - 1,009.38 28,395,000 Net asset value per share 30 June 2011 ...... 901.29 1,020.44 1,036.10 1,004.19 1,089.23 1,025.53 30 June 2010 ...... - - - - 1,009.38 1,041.64

Global Focus Equity*

Class P JP¥ JPY Total net asset value 30 June 2011 ...... 16,826,832,..... 888 Net asset value per share 30 June 2011 ...... 104,846.58

* The Fund launched 15 March 2011.

Global High Dividend Equity

Class B EURO Class B STG£ Class B US$ Class C Income Income Income EURO Class I STG£ EUR GBP USD EUR GBP Total net asset value 30 June 2011 ...... 14,110,308 20,736,810 1,145,651 225,328 1,083 30 June 2010 ...... - - - 961.29 - Net asset value per share 30 June 2011 ...... 1,008.86 1,082.74 1,028.43 1,008.49 1,083.24 30 June 2010 ...... - - - 961.29 -

Global High Dividend Equity

Class P Class I US$ Class P US$ Income USD JPY USD Total net asset value 30 June 2011 ...... 5,300,486 3,761,702,029 1,019 30 June 2010 ...... - - 28,227,379 Net asset value per share 30 June 2011 ...... 1,131.76 102,793.00 1,155.20 30 June 2010 ...... - - 940.91

160 Notes to the Financial Statements OpenWorld plc

Notes to the Financial Statements - continued

30 June 2011

Global Listed Infrastructure

Class A Class A Class B Class C Class I STG£ US$ US$ EURO Class I STG£ US$ GBP USD USD EUR GBP USD Total net asset value 30 June 2011 ...... 1,159 17,128,002 661,147 434,900 212,717 19,213,185 30 June 2010 ...... - 15,018,968 290,943 969.39 - 10,320,215 30 June 2009 ...... - 14,018,972 - - - 9,228,548 Net asset value per share 30 June 2011 ...... 1,158.53 1,696.51 1,279.71 1,120.01 1,164.11 1,727.33 30 June 2010 ...... - 1,223.94 926.89 969.39 - 1,236.25 30 June 2009 ...... - 1,132.62 - - - 1,134.85

Global Listed Infrastructure

Class I Class P US$-NV US$ USD USD Total net asset value 30 June 2011 ...... 7,000, 973 52,356,163 30 June 2010 ...... - 26,287,832 30 June 2009 ...... - 5,335,682 Net asset value per share 30 June 2011 ...... 1,262.50 1,731.38 30 June 2010 ...... - 1,237.89 30 June 2009 ...... - 1,135.13

Global Opportunistic Listed Property

Class A Class A Class B Class C STG£ US$ EURO Class B US$ EURO Class I STG£ GBP USD EUR USD EUR GBP Total net asset value 30 June 2011 ...... 1,068 11,421,110 470,512 312,203 37,522 1,072 30 June 2010 ...... - 10,232,427 252,682 - 965.63 - Net asset value per share 30 June 2011 ...... 1,067.78 1,437.26 1,235.29 1,049.63 1,028.67 1,071.94 30 June 2010 ...... - 1,130.53 1,158.35 - 965.63 -

Global Opportunistic Listed Property

Class I Class I Class P US$ US$-NV US$ USD USD USD Total net asset value 30 June 2011 ...... 1,079 6,628,787 27,910,957 30 June 2010 ...... - - 10,597,433 Net asset value per share 30 June 2011 ...... 1,079.21 1,174.48 1,463.77 30 June 2010 ...... - - 1,140.49

India Focus Equity

Class B Class B Class P EURO STG£ Class I STG£ Class I US$ US$ Income EUR GBP GBP USD USD Total net asset value 30 June 2011 ...... 1, 824,019 1,959,235 911 938 22,914,420 30 June 2010 ...... 1,027.89 - - - 21,054,034 Net asset value per share 30 June 2011 ...... 930.79 987.77 910.61 937.67 1,145.72 30 June 2010 ...... 1,027.89 - - - 1,052.70

Notes to the Financial Statements 161 OpenWorld plc

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30 June 2011

Japan Focus Equity

Class P JP¥ JPY Total net asset value 30 June 2011 ...... 1,586,..... 255,213 30 June 2010 ...... 1,615,692,860..... Net asset value per share 30 June 2011 ...... 84,986 30 June 2010 ...... 86,563

US Credit

Class B Class B Class I Class I Class P Class P STG£ Income US$ STG£ US$ EURO H-NV STG£ H-NV GBP USD GBP USD EUR GBP Total net asset value 30 June 2011 ...... 975 59,978 999 1,148,198 7,088,926 54,946,152 30 June 2010 ...... - 8,714.23 - 922,842 8,910,299 37,144,026 Net asset value per share - 30 June 2011 ...... 974.99 1,113.29 999.34 1,102.73 1,125.24 1,124.73 30 June 2010 ...... - 1,043.62 - 1,025.38 1,042.75 1,043.23

14. Segregated Liability Each Fund will be responsible for paying its fees and expenses regardless of the level of its profitability. The Company has availed of the segregated liability provisions of the Investment Funds, Companies and Miscellaneous Provisions Act, 2005. The adoption of segregated liability ensures that liability incurred on behalf of a Fund will generally be discharged solely out of the assets of that Fund and there can generally be no recourse to other Funds to satisfy these liabilities. Notwithstanding the foregoing there can be no guarantee that should an action be brought against the Company in the court of another jurisdiction that the segregated nature of the Funds would necessarily be upheld.

15. Distributions

Total distributions for the year ended 30 June 2011

Global Global Global High Global Europe Focus Climate Dynamic Global Focus Dividend Listed Euro Credit Equity Change Bond Equity* Equity Infrastructure EUR EUR USD USD USD USD USD Class A STG£ ...... ------(10) Class A US$ ...... ------(342,367) Class B EURO ...... (7,120) (10) - - - - - Class B EURO Income ...... (12) - - (2,295) - (175,219) - Class B STG£ ...... ------Class B STG£ Income ...... (35) - - (5,033) - (266,977) - Class B US$ ...... - - (526) (5) - - (6,695) Class B US$ Income ...... - - - - - (4,765) - Class C EURO ...... (22,476) (10) (3) - - (7,075) (1,023) Class I EURO ...... (31) (76,360) - - - - Class I EURO Income ...... ------Class I JP¥ ...... ------Class I STG£ ...... - - - (8) - (38) (893) Class I US$ ...... - - (24,617) (5) - (86,875) (192,192) Class I US$-NV ...... ------(34,238) Class P EURO ...... - (24,103) - - - - - Class P EURO H Income ...... - - - (169,748) - - - Class P EURO H-NV ...... ------Class P EURO-NV ...... (344,174) ------Class P JP¥ ...... - - - - (188,578) (192,225) - Class P STG£ H ...... ------Class P STG£ H-NV ...... (2,262,356) ------Class P US$ ...... ------(670,564) Class P US$ Income ...... - (183,103) - - - (979,610) - Class P US$-NV ...... - - (73,801) - - - - Total ...... (2,636,204) (283,586) (98,947) (177,094) (188,578) (1,712,784) (1,247,982) Distributions paid on income shares ...... (47) (183,103) - (177,076) - (1,426,571) - Distributions deemed on accumulation shares ...... 2,636,157 100,483 98,947 18 188,578 286,213 1,247,982

* The Fund launched 15 March 2011.

162 Notes to the Financial Statements OpenWorld plc

Notes to the Financial Statements - continued

30 June 2011

Global Opportunistic Listed Japan Focus Property Equity US Credit USD JPY USD Class A STG£ ...... (10) - - Class A US$ ...... (136,190) - - Class B EURO ...... (6,294) - - Class B EURO Income ...... - - - Class B STG£ ...... - - - Class B STG£ Income ...... - - (30) Class B US$ ...... (1,914) - (2,127) Class B US$ Income ...... - - - Class C EURO ...... (54) - - Class I EURO ...... - - - Class I EURO Income ...... - - - Class I JP¥ ...... - (777) - Class I STG£ ...... (10) - (31) Class I US$ ...... (6) - (38,354) Class I US$-NV ...... (34,712) - - Class P EURO ...... - - - Class P EURO H Income ...... - - - Class P EURO H-NV ...... - - (408,880) Class P EURO-NV ...... - - - Class P JP¥ ...... - (13,095,012) - Class P STG£ H ...... - - - Class P STG£ H-NV ...... - - (2,369,861) Class P US$ ...... (199,273) - - Class P US$ Income ...... - - - Class P US$-NV ...... - - - Total ...... (378,463) (13,095,789) (2,819,283) Distributions paid on income shares ...... - - (30) Distributions deemed on accumulation shares ...... 378,463 13,095,789 2,819,253

Total distributions for the year ended 30 June 2010

Global Global Global High Opportunistic Climate Dividend Global Listed Listed Euro Credit Change Equity Infrastructure Property US Credit EUR USD USD USD USD USD Class A US$ ...... - - - (273,308) (27,428) - Class B EURO ...... (1) - - - (730) - Class B US$ ...... - (13) - (615) - (2) Class I US$ ...... - (1,149) - (202,535) - - Class P EURO ...... (10,650) - - - - (20,355) Class P STG£ ...... (32,382) - - - - (61,567) Class P US$ ...... - (6,038) - (235,903) (33,995) - Class P US$ Income ...... - - (124,221) - - - Total ...... (43,033) (7,200) (124,221) (712,361) (62,153) (81,924) Distributions paid on income shares ...... - - (124,221) - - - Distributions deemed on accumulation shares ...... 43,033 7,200 - 712,361 62,153 81,924

16. Significant Events During the Year

Revised Prospectus A revised prospectus and simplified prospectus were issued on 12 November 2010 and a further revised prospectus and simplified prospectus was issued on 9 March 2011.

The main changes to the prospectus dated 12 November 2010 were as follows: (i) to reflect the charging of fees and expenses to capital in respect of Euro Credit; (ii) to reflect the creation of two new share classes in Europe Focus Equity and Global Dynamic Bond; (iii) to provide an increase in the aggregate Directors‟ fees from EUR 1,500 to EUR 25,000; (iv) to reflect increases in the minimum subscription levels.

The main changes to the prospectus dated 9 March 2011 related to the creation of a new sub-fund, namely Global Focus Equity. A revised simplified prospectus was filed on the same date.

Notes to the Financial Statements 163 OpenWorld plc

Notes to the Financial Statements - continued

30 June 2011

Amended memorandum and articles of association of the Company as adopted by special resolution dated 22 December 2010 (the “Articles of Association”) were filed with the Central Bank on 23 December 2010. The revised Articles of Association was amended primarily to provide that the list of regulated markets in which the Company may invest shall be drawn from the list contained in the prospectus of the Company.

Fund Launches Global Focus Equity launched on 15 March 2011.

U.K. Reporting Fund Status With effect from 1 July 2010, the Company is certified as a Reporting Fund under Regulation 51 of The Offshore Funds (Tax) Regulations 2009.

17. Significant Events Since the Year End On 1 July 2011, the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 came into operation in Ireland giving effect to Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009. The Company has adopted specific policies and procedures in order to comply with its obligations under these Regulations.

Mr. Neil Jenkins was appointed as Director on 22 September 2011. Prior to his appointment he acted as permanent alternate Director to Mr. Peter Gunning.

Fund Closures Japan Focus Equity ceased trading on the 4 July 2011. It is expected that Global Climate Change and Global Dynamic Bond will be closed later this year.

18. Approval of the Financial Statements The financial statements were approved by the Directors on 18 October 2011.

164 Notes to the Financial Statements OpenWorld plc

Appendix I - Total Expense Ratio (Unaudited)

For the year ended 30 June 2011

The average Total Expense Ratio (“TER”) table shows the actual expenses incurred by each Fund over the preceding twelve month period (with the exception of the unfunded Funds detailed in the Background to the Company), expressed as a percentage of the average (avg.) net asset values (“NAV”) of that Fund for the corresponding period.

Expense % (excluding Expense Performance % of avg. Fees) of avg. NAV of NAV of share class Fund Euro Credit Class B EURO ...... 1.69% 1.69% Class B EURO Income ...... 1.69% 1.69% Class B STG£ Income ...... 1.68% 1.68% Class C EURO ...... 2.08% 2.08% Class I EURO ...... 0.89% . 0.89% Class P EURO-NV ...... 0.74% 0.74% Class P STG£ H ...... 0.79% 0.79% Europe Focus Equity Class B EURO ...... 3.08% 2.19% Class B STG£ ...... 3.08% . 2.12 % Class C EURO ...... 3.83% 2.91 % Class I EURO ...... 1.88% . 0.99 % Class I STG£ ...... 1.88% ... 0.90 % Class P EURO ...... 1.73% 0.74 % Class P US$ Income ...... 1.73% 0.88 % Global Climate Change Class A STG£ ...... 2.09% . 2.09% Class B US$ ...... 2.39% .... 2.39% Class C EURO ...... 3.28% 3.32% Class I STG£ ...... 1.29% ... 1.29% Class I US$ ...... 1.29% ..... 1.29% Class P US$-NV ...... 1.14% 1.14% Global Focus Equity Class P JP¥ ...... 0.63% ...... 0.60% Global Dynamic Bond Class B EURO Income ...... 2.35% 2.35% Class B STG£ Income ...... 2.35% 2.35% Class B US$ ...... 2.36% .... 2.36% Class I STG£ ...... 1.55% ... 1.55% Class I US$ ...... 1.55% ..... 1.55% Class P EURO H Income ...... 1.45...... % 1.45% Global High Dividend Equity Class B EURO Income ...... 2.13% 2.15% Class B STG£ Income ...... 2.13% 2.15% Class B US$ Income ...... 2.12% 2.21% Class C EURO ...... 2.82% 2.73% Class I STG£ ...... 0.93% ... 1.02% Class I US$ ...... 0.93% ..... 0.93% Class P JPY ...... 0.78% ..... 0.78% Class P US$ Income ...... 0.79% 0.77%

Total Expense Ratio 165 OpenWorld plc

Appendix I - Total Expense Ratio (Unaudited) - continued

For the year ended 30 June 2011

Expense % (excluding Expense Performance % of avg. Fees) of avg. NAV of NAV of share class Fund Global Listed Infrastructure Class A STG£ ...... 3.77% . 2.17 % Class A US$ ...... 3.77% .... 2.10 % Class B US$ ...... 4.17% .... 2.32 % Class C EURO ...... 5.07% 2.79 % Class I STG£ ...... 2.97% ... 0.71 % Class I US$ ...... 2.97% ..... 0.77 % Class I US$ NV ...... 2.97% 1.34 % Class P US$ ...... 2.87% .... 1.06 % Global Opportunistic Listed Property Class A STG£ ...... 1.98% . 1.98% Class A US$ ...... 1.98% .... 1.98% Class B EURO ...... 2.58% 2.58% Class B US$ ...... 2.58% .... 2.58% Class C EURO ...... 3.12% 3.12% Class I STG£ ...... 1.18% ... 1.18% Class I US$ ...... 1.18% ..... 1.18% Class I US$-NV ...... 1.18% 1.18% Class P US$ ...... 1.03% .... 1.03% India Focus Equity Class B EURO ...... 3.26% 3.83% Class B STG£ ...... 3.26% . 3.77% Class B US$ ...... 3.26% .... 2.81% Class I STG£ ...... 1.91% ... 2.13% Class I US$ ...... 1.91% ..... 2.29% Class P US$ Income ...... 1.71% 1.58% Japan Focus Equity Class P JP¥ ...... 0.99% ...... 0.99% US Credit Class B STG£ Income ...... 1.69% 1.69% Class B US$ ...... 1.69% .... 1.69% Class I STG£ ...... 0.89% ... 0.89% Class I US$ ...... 0.89% ..... 0.89% Class P EURO H-NV ...... 0.79% 0.79% Class P STG£ H-NV ...... 0.79% 0.79%

166 Total Expense Ratio OpenWorld plc

Appendix II - Portfolio Turnover Rates (Unaudited)

For the year ended 30 June 2011

The Portfolio Turnover rate (“PTR”) shows the turnover incurred by each Fund, whose redeemable participating shares are registered for sale in Switzerland during the reporting period, expressed as an unaudited percentage of the average net asset value of that Fund for the corresponding period. A PTR is not available for any of the Funds that remained unfunded during the reporting period.

PTR Euro Credit ...... 202%

Europe Focus Equity ...... 131%

Global Climate Change ...... 128%

Global Dynamic Bond ...... 889%

Global Focus Equity ...... 174%

Global High Dividend Equity ...... 195%

Global Listed Infrastructure ...... 281%

Global Opportunistic Listed Property ...... 262%

India Focus Equity ...... 103%

Japan Focus Equity ...... 100%

US Credit ...... 692%

* Turnover being a Fund’s aggregate value of total cost of securities purchased plus total disposal proceeds of securities sold less the aggregate value of that Fund’s redeemable participating shares’ subscriptions plus redemptions during the reporting period. All values in the turnover calculation are in the functional currency of the respective Fund.

Portfolio Turnover Rates 167 OpenWorld plc

Appendix III - Publication of Performance Data (Unaudited)

For the year ended 30 June 2011

Below is the historical performance data for Swiss registered Funds for the year ended 30 June 2011 and the prior two financial periods:

For the Year ended 30 June 2011 Return % Benchmark % Euro Credit ...... 3.8% .... 2.4% Europe Focus Equity ...... 22.1% 15.6% Global Climate Change ...... 32.5...... % 31.2% Global Dynamic Bond ...... 9.5% 10.5% Global Focus Equity ...... 1.8% 1.3% Global High Dividend Equity ...... 28.4%...... 31.2% Global Listed Infrastructure ...... 42.2...... % 30.8% Global Opportunistic Listed Property ...... 29.9% 32.5% India Focus Equity ...... 11.0% 8.0% Japan Focus Equity ...... (0.5)% 3.1% US Credit ...... 8.5% ...... 6.2%

For the Year ended 30 June 2010 Return % Benchmark % Euro Credit ...... 3.6% .... 2.9% Europe Focus Equity ...... (3.8)% (4.1)% Global Climate Change ...... (3.5)%...... 5.1% Global Dynamic Bond ...... 1.2% (0.8)% Global High Dividend Equity ...... (5.5)%...... 6.6% Global Listed Infrastructure ...... 10.2%...... 5.6% Global Opportunistic Listed Property ...... 7.2% 7.7% India Focus Equity ...... 5.7% 0.1% Japan Focus Equity ...... (13.0)% (15.4)% US Credit ...... 5.3% ...... 5.5%

For the Period from 12 June 2008 to 30 June 2009 Return % Benchmark % Global Listed Infrastructure ...... 9.8%...... 12.4%

168 Publication of Performance Data Russell Investments Rex House tel +44 (0) 20 7024 6000 10 Regent Street fax +44 (0) 20 7024 6001 London, SW1Y 4PE www.russell.com