NASDAQ's Closing Cross to be Used in Annual
Reconstitution of Russell Indexes

New York, NY Tacoma, Wash., May 12, 2004 —The Nasdaq Stock Market, Inc. (NASDAQ^® ) and Russell Investment Group announced that the NASDAQ Closing Cross will be used to price NASDAQ-listed securities for the annual reconstitution of Russell's 21 U.S. stock indexes on June 25.

"Russell once again is addressing institutional demand and making their indexes even more effective for investors," said Matt Johnson, Managing Director, Lehman Brothers. "In this case, the adoption of NASDAQ's Closing Cross improves the quality and transparency of the annual reconstitution process which benefits investors."

The NASDAQ Closing Cross, the first electronic closing auction order facility of its kind in the United States, brings together the buy and sell interest in specific NASDAQ stocks and executes all shares for each stock at a single price reflecting the true supply and demand for the security.

“The use of Russell indexes has grown significantly and our objective is to assist market participants by adopting pricing that offers equal access and a high level of transparency at reconstitution,” said Lori Richards, senior product manager for Russell indexes. “NASDAQ's Closing Cross provides a deep, orderly market and certainty of price at the close. It is the only market to provide detailed and continuous information on order imbalances in the minutes leading to the Closing Cross, creating a level playing field for market participants.”

Russell reconstitutes its U.S. indexes annually in order to rank accurately the 3,000 largest companies in the U.S. stock market by market capitalization. This realignment allows the indexes to provide a truer reflection of stock market activity and performance. The process has been analyzed by Russell's Index Client advisory board which concluded that annual frequency results in the best balance between market representation and turnover. Ongoing review of the process is increasingly important as passive funds based on Russell indexes have grown 186% in the past five years, totaling $362.5 billion at the end of 2003.

“The NASDAQ Closing Cross will provide Russell with an essential means of determining their index valuations during this critically important liquidity event,” said Adena Friedman, executive vice president of NASDAQ Corporate Strategy and Data Products. “Index providers, mutual funds and other users of the Closing Cross will receive a highly transparent and accurate closing price that provides them even greater certainty in pricing major transactions.”

As part of the Closing Cross, NASDAQ disseminates detailed information about order imbalances and likely clearing prices leading up to the close. At 4 p.m. EST, the NASDAQ market center then executes the market-on-close, limit-on-close orders, and offsetting orders at a single price that allows the maximum number of shares to execute. That closing price is then used as the industry benchmark for index valuations, derivative trades, and mutual fund net-asset-valuations.

NASDAQ launched the Closing Cross on April 12. A total of 130 NASDAQ securities – all of the NASDAQ-100 Index issues plus other major NASDAQ issues– have been subsequently phased into the Closing Cross.

For more information about the NASDAQ Closing Cross, please visit

http://www.nasdaqtrader.com/trader/openclose/ccfactsheet.pdf

About Russell Investment Group

Russell Investment Group, a global leader in multi-manager investment services, provides investment products and services in more than 35 countries. Russell manages more than $107 billion in assets and advises clients worldwide representing more than $1.8 trillion. Founded in 1936, Russell is a subsidiary of Northwestern Mutual and is headquartered in Tacoma, Wash., with additional offices in New York, Toronto, London, Paris, Singapore, Sydney, Auckland and Tokyo. For more information, visit www.russell.com.

About NASDAQ
NASDAQ^® is the largest U.S. electronic stock market. With approximately 3,300 companies, it lists more companies and, on average, trades more shares per day than any other U.S. market. It is home to category-defining companies that are leaders across all areas of business including technology, retail, communications, financial services, transportation, media and biotechnology. NASDAQ is the primary market for trading NASDAQ-listed stocks. Approximately 51% of NASDAQ-listed shares traded are reported to NASDAQ systems. For more information about NASDAQ, visit the NASDAQ Web site at http://www.nasdaq.com/ or the NASDAQ Newsroom^SM at http://www.nasdaq.com/newsroom/.

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Indexes and benchmarks are unmanaged and cannot be invested in directly.

Russell Investment Group is a registered trade name of Frank Russell Company, a Washington, USA corporation, which operates through subsidiaries worldwide. Frank Russell Company is a subsidiary of The Northwestern Mutual Life Insurance Company.

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