NMFN: IV, MF, Russell, RF, Russell Investment Grade Bond Fund

Russell Investment Grade Bond Fund

A Core Bond Investment

Class S
June 30, 2008

About the Fund
For this fund, Russell chooses money managers with expertise in selecting bonds across the maturity spectrum. By combining firms that have differing investment approaches within this arena, Russell's goal is to manage risk and increase the fund's potential to outperform its benchmark. For example, Russell may include one manager whose approach helps manage sources of risk. Another manager may provide added diversification to the portfolio through evaluating both broad economic factors and security-specific issues. This broad view helps the manager determine which market sectors to emphasize, while issue-specific research helps them determine which securities to purchase.

Investment Strategy

Seeks to provide current income and the preservation of capital
Core fixed income exposure emphasizes intermediate and longer term securities
Emphasis on broad market sector rotation/issue selection.
Investment-grade quality.

Fund Highlights

Offers a diversified portfolio of high quality bonds, including U.S. and non-U.S. securities
Blends some of the largest and most experienced bond fund managers.
Helps manage risk through diversification among managers and investment styles.
Managers employ sector rotation and modest interest-rate anticipation strategies to help enhance return.

Managing Money Differently
The Russell approach has been trusted for decades by many of the world's largest investors; Russell's mutual funds allow you to employ that same approach. Russell identifies investment managers they believe have exceptional capabilities, blending them to help manage risk through diversification, and constantly monitoring them. Regardless of market conditions, Russell's investment approach remains constant.

Allocation of Fund Assets


	% Allocated	Year Assigned

Sector Rotation


Metropolitan West Asset Management, LLC	15%	2008


Enhanced Core


Lehman Brothers Asset Management LLC	50%	1989


Fully Discretionary


Pacific Investment Management Company, LLC	20%	1984


Western Asset Management and Western Asset Management Company, Ltd.	15%	2004


Money managers listed are current as of 06/30/2008. Subject to the fund's Board approval, Russell has the right to engage or terminate a money manager at any time and without a shareholder vote, based on an exemptive order from the Securities and Exchange Commission. The investment strategies are the goals of the individual money managers; there is no assurance that the exact objective will always be met.

In general, when interest rates rise, the value of bonds held in the fund will decline. Bond investors should carefully consider risks such as interest rate, credit, repurchase and reverse repurchase transaction risks. Greater risk, such as increased volatility, limited liquidity, prepayment, non-payment and increased default risk, is inherent in portfolios that invest primarily in high yield ("junk") bonds or mortgage-backed securities, especially mortgage-backed securities, especially mortgage-backed securities with exposure to subprime mortgages.

Non-U.S. markets and emerging or developing markets entail different risks than those typically associated with U.S. markets, including currency fluctuations, political and economic instability, accounting changes, and foreign taxation. Non-U.S. securities may be less liquid and more volatile than the U.S., and emerging markets securities may be less liquid and more volatile than U.S. and longer-established non-U.S. markets.

	Quality Rating¹				As a % of market value²

	U.S. Govt & Agency				37
	AAA				38
	AA				6
	A				9
	BBB				8
	BB				0
	B				0
	Other				1
	¹Moody's Investors Service Inc. and Standard & Poor's Corporation. For additional information on quality ratings, see the Statement of Additional Information. ²Due to rounding totals may not equal 100%.

	Sector Weightings Current as of 06/30/2008				% of total Equity

	Asset-Backed				5.7
	Emerging Markets Debt				0.4
	US Government				27.6
	High Yield				1.2
	Investment Grade Credit				22.9
	Mortgage-Backed				42.2
	Non-US Dollar				0.0
	Other				0.0

Due to rounding totals may not equal 100%.

Characteristics


Total Market Value	Weighted Average Duration¹	30-Day SEC Yield²

$1.4 billion	4.9 years	4.57%


¹Duration approximates the percentage change in the price of a bond or the value of a portfolio of bonds for every one percentage point shift in interest rates. ²The fund's current yield for the 30-day period ending June 30, 2008

Performance Review

as of June 30, 2008



Fund	QTR	YTD	1 yr	3 yrs	5 yrs	10 yrs	Since Inception 10/19/07

Fixed Income I Fund Class S¹	-1.47	-1.09	4.20	2.96	3.17	5.18	8.93

	Fund Fees and Expenses


	Annual Fund and Operating Expenses

	Total		Net


	0.56%		0.56%

Growth of $10,000 - Class S shares

Performance information is historical and does not guarantee future results. Investment return and principal value will fluctuate so that redeemed shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Month-end performance for Russell mutual funds is available by choosing fund performance from the left-hand navigation.



	Class C	Class S

Cusip	782494827	782494835


Ticker	RFACX	RFATX

The fund offers other classes of shares with higher fees and expenses. These other classes may charge up to a 0.75% distribution fee and a 0.25% shareholder servicing fee which will result in a higher expense ratio and lower performance than that shown above. For a full description of other available classes, please see the prospectus.

Fund objectives, risks, charges, and expenses should be carefully considered before investing.

For more complete information, including a contract and fund prospectus that gives investment objectives, risks, charges, expenses, and other information about the investment company, contact a Northwestern Mutual Financial Network Representative, who is a Registered Representative of Northwestern Mutual Investment Services, LLC (NMIS). Read the prospectuses carefully before you invest or send money.

¹The fund first issued Class S shares on October 19, 2007. The returns shown for Class S shares are those of the fund's Class I shares through October 19, 2007. Annual returns will differ only the extent that Class S Shares do not have the same expenses as the Class I shares.

Consult the Prospectus.
Consult the Statement of Additional Information.

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