UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-09253
Allspring Funds Trust
(Exact name of registrant as specified in charter)
1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203
(Address of principal executive offices) (Zip code)
Matthew Prasse
Allspring Funds Management, LLC
1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203
(Name and address of agent for service)
Registrant’s telephone number, including area code: 800-222-8222
Date of fiscal year end: March 31
Registrant is making a filing for 7 of its series:
Allspring Small Cap Fund, Allspring Disciplined Small Cap Fund, Allspring Special Small Cap Value Fund, Allspring Discovery Small Cap Growth Fund, Allspring Precious Metals Fund, Allspring Discovery Innovation Fund and Allspring Utility and Telecommunications Fund.
Date of reporting period: March 31, 2023
| ITEM 1. | REPORT TO STOCKHOLDERS |
Annual Report
March 31, 2023
Allspring
Disciplined Small Cap Fund
Disciplined Small Cap Fund
Contents
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| 10 | |
| 11 | |
| Financial statements | |
| 21 | |
| 22 | |
| 23 | |
| 24 | |
| 28 | |
| 34 | |
| 35 |
The views expressed and any forward-looking statements are as of March 31, 2023, unless otherwise noted, and are those of the Fund's portfolio managers and/or Allspring Global Investments. Discussions of individual securities or the markets generally are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Allspring Global Investments disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.
Allspring Disciplined Small Cap Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Disciplined Small Cap Fund for the 12-month period that ended March 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. Earlier tailwinds provided by global stimulus programs, vaccination rollouts, and recovering consumer and corporate sentiment were wiped away by the highest rate of inflation in four decades as well as the impact of ongoing aggressive central bank rate hikes and the prospect of more rate hikes. Compounding these concerns were the global reverberations of the Russia-Ukraine war and the impact of China’s strict COVID-19 lockdowns, which were removed in December.
For the 12-month period, stocks and bonds––both domestic U.S. and global––suffered broad losses. For the period, U.S. stocks, based on the S&P 500 Index,1 returned -7.73%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned -5.07%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a decline of 10.70%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -4.78%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 10.72%, the Bloomberg Municipal Bond Index6 gained 0.26%, and the ICE BofA U.S. High Yield Index7 fell 3.50%.
High inflation and central bank rate hikes rocked markets.
In April 2022, market headwinds created by Russia’s invasion of Ukraine in February continued, with broad and deep losses as both the S&P 500 and MSCI ACWI (Net)8 fell 8% or more for the month and commodity shortages added to global inflation. The Chinese economy struggled through a strict lockdown as the government tried to contain a major COVID-19 outbreak. The ensuing global ripple effect compounded existing supply shortages. Meanwhile, U.S. annual inflation raged at 8.5%, its highest level since 1981, and investors braced themselves for aggressive Federal Reserve (Fed) monetary tightening moves.
Market volatility continued in May, although markets recovered ground late in the month. Value stocks continued to outperform growth stocks. The concerns that had dominated markets for months continued, including high inflation and geopolitical tensions that added to high crude oil, gasoline, and food prices. In response, the Fed raised the federal funds rate by 0.50%. Meanwhile, highly contagious COVID-19 variants persisted. However, labor markets in the U.S., the U.K., and Europe remained strong. U.S. retail sales increased for the fourth consecutive month in April—a sign of consumer resilience.
“ In April 2022, market headwinds created by Russia’s invasion of Ukraine in February continued, with broad and deep losses as both the S&P 500 Index and MSCI All Country World Index fell 8% or more for the month and commodity shortages added to global inflation.”
| 1 | The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock's weight in the index proportionate to its market value. You cannot invest directly in an index. |
| 2 | The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding the U.S. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. You cannot invest directly in an index. |
| 3 | The MSCI Emerging Markets (EM) Index (Net) (USD) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index. |
| 4 | The Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S.-dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index. |
| 5 | The Bloomberg Global Aggregate ex-USD Index (unhedged) is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S.-dollar-denominated debt market. You cannot invest directly in an index. |
| 6 | The Bloomberg Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index. |
| 7 | The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2023. ICE Data Indices, LLC. All rights reserved. |
| 8 | The MSCI ACWI (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets. You cannot invest directly in an index. |
2 | Allspring Disciplined Small Cap Fund
Letter to shareholders (unaudited)
In June, stocks posted further losses en route to their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were the familiar factors: rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Fed raised its short-term rate by another 0.75% in June. Meanwhile, the U.S. unemployment rate held firm at 3.6% and the housing market remained only marginally affected by sharply higher mortgage rates.
Markets rebounded in July, led by U.S. stocks. While U.S. economic activity showed signs of waning, the country’s labor market remained surprisingly strong: July nonfarm payrolls grew by more than 500,000 and U.S. unemployment dipped to 3.5%. Meanwhile, crude oil and retail gasoline prices, major contributors to recent overall inflation, fell substantially from earlier highs. And while U.S. home prices rose, home sales fell as houses became less affordable with mortgage rates at a 13-year high. The Fed raised the federal funds rate another 0.75% in July—to a range of 2.25% to 2.50%—and forecasts pointed to further rate hikes.
August was yet another broadly challenging month for financial markets, with more red ink flowing. High inflation persisted, cresting 9% in the eurozone on an annual basis and remaining above 8% in the U.S. despite the Fed’s aggressive monetary policy and a major drop in global crude oil and gasoline prices from their June peak. One positive note was the resilient U.S. job market. However, the Fed’s job was clearly not complete. One longer-term bright spot was the U.S. Congress’s passage of the Inflation Reduction Act. Its primary stated goals include: to reduce inflation (though not immediately) by curbing the deficit, capping health care spending by seniors, and investing in domestic sources of clean energy.
The market misery continued in September as all asset classes suffered major losses. Central banks kept up their battle against rapidly rising prices with more rate hikes. The strength of the U.S. dollar weighed on results for investors holding non-U.S.-dollar assets. U.S. mortgage rates jumped to near 7% on 30-year fixed-rate mortgages; the decreased housing affordability began to cool demand somewhat. The U.K. experienced a sharp sell-off of government bonds and the British pound in September as investors panicked in response to a new government budget that was seen as financially unsound. The Bank of England (BoE) then stepped in and bought long-dated government bonds.
Equities had a reprieve in October. Value stocks and small caps fared best. Globally, developed markets outpaced emerging market equities, which were hurt by weakness among Chinese stocks. Central banks continued to try to curtail high inflation with aggressive interest rate hikes. Geopolitical risks persisted, including the ongoing Russia-Ukraine war and economic, financial market, and political turmoil in the U.K. Concerns over Europe’s energy crisis eased thanks to unseasonably warm weather and plentiful gas on hand. The U.S. labor market continued its resilience against rising prices as unemployment remained near a record low.
Stocks and bonds rallied in November. Economic news was encouraging, driven by U.S. labor market strength. Although central banks kept raising rates, hopes rose for an easing in the pace of rate hikes and a possible end to central bank monetary tightening in 2023. Although inflation remained at record highs in the eurozone, we began to see signs of a possible decline in inflationary pressures as U.S. inflation moderated, with a 7.1% annual price rise in November and a monthly price increase of just 0.1%. China’s economic data remained weak, reflecting its zero-COVID-19 policy.
Financial markets cooled in December, with U.S. equities posting negative overall results in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever with flat overall monthly returns as markets weighed the hopes for an end to the monetary tightening cycle with the reality that central banks had not completed their jobs yet. U.S. Consumer Price Index (CPI)1 data showed a strong consistent trend downward, which brought down the 12-month CPI to 6.5% in December from 9.1% in June. Other countries and regions reported still-high but declining inflation rates as the year winded down.
“ In June, stocks posted further losses en route to their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were the familiar factors: rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation.”
| 1 | The U.S. Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. You cannot invest directly in an index. |
Allspring Disciplined Small Cap Fund | 3
Letter to shareholders (unaudited)
The year 2023 began with a rally across global equities and fixed income securities. Investor optimism rose in response to data indicating declining inflation rates and the reopening of China’s economy with the abrupt end to its zero-COVID-19 policy. The U.S. reported surprisingly strong job gains––employers added more than 500,000 jobs––and unemployment fell to 3.4%, the lowest level since 1969. Meanwhile, wage growth, seen as a potential contributor to ongoing high inflation, continued to moderate. All eyes remained fixed on the Fed and on how many more rate hikes remain in this tightening cycle. The 0.25% federal funds rate hike announced in January was the Fed’s smallest rate increase since March 2022.
Financial markets declined in February as investors responded unfavorably to resilient economic data. The takeaway: Central banks will likely continue their monetary tightening cycle for longer than markets had priced in. In this environment—where strong economic data is seen as bad news—the resilient U.S. labor market was seen as a negative while the inflation rate has not been falling quickly enough for the Fed, which raised interest rates by 0.25% in early February. Meanwhile, the BoE and the European Central Bank both raised rates by 0.50%.
The collapse of Silicon Valley Bank in March, the second-largest banking failure in U.S. history, led to a classic bank run that spread to Europe, where Switzerland’s Credit Suisse was taken over by its rival, UBS. The sudden banking industry uncertainty led some clients of regional banks to transfer deposits to a handful of U.S. banking giants while bank shareholders sold stock. The banking industry turmoil could make the job of central banks more challenging as they weigh inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. The U.S. labor market remained resilient. The euro-area composite Purchasing Managers’ Index1 rose to 53.70, indicating expansion, for March. And China’s economy continued to rebound after the removal of its COVID-19 lockdown. Inflation rates in the U.S., the U.K., and Europe all remained higher than central bank targets, leading to additional rate hikes in March.
Don’t let short-term uncertainty derail long-term investment goals.
Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Allspring Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.
Thank you for choosing to invest with Allspring Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.
Sincerely,
Andrew Owen
President
Allspring Funds
President
Allspring Funds
For further information about your fund, contact your investment professional, visit our website at allspringglobal.com, or call us directly at 1-800-222-8222.
| 1 | The Purchasing Managers' Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. You cannot invest directly in an index. |
4 | Allspring Disciplined Small Cap Fund
Performance highlights (unaudited)
| Investment objective | The Fund seeks long-term capital appreciation. |
| Manager | Allspring Funds Management, LLC |
| Subadviser | Allspring Global Investments, LLC |
| Portfolio managers | Justin P. Carr, CFA, Robert M. Wicentowski, CFA |
| Average annual total returns (%) as of March 31, 2023 | |||||||||||
| Including sales charge | Excluding sales charge | Expense ratios1 (%) | |||||||||
| Inception date | 1 year | 5 year | 10 year | 1 year | 5 year | 10 year | Gross | Net 2 | |||
| Class A (WDSAX)3 | 7-31-2018 | -12.36 | 2.93 | 7.29 | -7.01 | 4.16 | 7.93 | 1.75 | 0.93 | ||
| Class R6 (WSCJX)4 | 10-31-2016 | – | – | – | -6.98 | 4.20 | 8.07 | 1.32 | 0.50 | ||
| Administrator Class (NVSOX) | 8-1-1993 | – | – | – | -7.28 | 3.93 | 7.81 | 1.67 | 0.85 | ||
| Institutional Class (WSCOX)5 | 10-31-2014 | – | – | – | -7.09 | 4.18 | 8.04 | 1.42 | 0.60 | ||
| Russell 2000® Index6 | – | – | – | – | -11.61 | 4.71 | 8.04 | – | – | ||
Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on an investment in a fund. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, allspringglobal.com.
Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.
For Class A shares, the maximum front-end sales charge is 5.75%. Class R6, Administrator Class and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.
| 1 | Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report. |
| 2 | The manager has contractually committed through July 31, 2023, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.93% for Class A, 0.50% for Class R6, 0.85% for Administrator Class, and 0.60% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense caps. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. Without these caps, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses. |
| 3 | Historical performance shown for the Class A shares prior to their inception reflects the performance of the Administrator Class shares, and is adjusted to reflect the higher expenses and sales charges of the Class A shares. |
| 4 | Historical performance shown for the Class R6 shares prior to their inception reflects the performance of the Institutional Class shares, and includes the higher expenses applicable to the Institutional Class shares. If these expenses had not been included, returns for the Class R6 shares would be higher. |
| 5 | Historical performance shown for the Institutional Class shares prior to their inception reflects the performance of the Administrator Class shares, and includes the higher expenses applicable to the Administrator Class shares. If these expenses had not been included, returns for the Institutional Class shares would be higher. |
| 6 | The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index, which represents approximately 8% of the total market capitalization of the Russell 3000® Index. You cannot invest directly in an index. |
Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Smaller-company stocks tend to be more volatile and less liquid than those of larger companies. The use of derivatives may reduce returns and/or increase volatility. Consult the Fund’s prospectus for additional information on these and other risks.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
6 | Allspring Disciplined Small Cap Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of March 31, 20231
| 1 | The chart compares the performance of Class A shares for the most recent ten years with the Russell 2000® Index. The chart assumes a hypothetical investment of $10,000 in Class A shares and reflects all operating expenses and assumes the maximum initial sales charge of 5.75%. |
Allspring Disciplined Small Cap Fund | 7
Performance highlights (unaudited)
MANAGER'S DISCUSSION
Fund highlights
| ■ | The Fund outperformed its benchmark, the Russell 2000® Index, for the 12-month period that ended March 31, 2023. |
| ■ | Stock selection was the main contributor to Fund performance, adding value in 6 out of 11 sectors. The Fund benefited from positive stock selection within the industrials, consumer discretionary, and information technology (IT) sectors. Underweights to IT and financials contributed modestly to performance. |
| ■ | Negative stock selection within consumer staples, real estate, and materials detracted from relative performance. A slight overweight to energy detracted modestly from performance. Variations in sector weights versus the Index were relatively small, as is typical for the strategy. |
U.S. equities sold off sharply in 2022 before rebounding through year-end and into early 2023.
During 2022, U.S. markets succumbed to pressure from soaring inflation, surging food and energy prices, aggressive central bank tightening, slowing global growth, escalating geopolitical tensions, and a European energy crisis. The S&P 500 Index* fell 18.11% during 2022 while the Russell 2000® Index fell 20.44%, marking the worst calendar year for U.S. equities since 2008. The Bloomberg U.S. Aggregate Bond Index** declined 13.01%, its worst loss since inception in 1976.
| Ten largest holdings (%) as of March 31, 20231 | |
| Atkore Incorporated | 1.04 |
| Encore Wire Corporation | 0.98 |
| Mueller Industries Incorporated | 0.92 |
| EMCOR Group Incorporated | 0.91 |
| SPS Commerce Incorporated | 0.90 |
| STAG Industrial Incorporated | 0.87 |
| Commercial Metals Company | 0.83 |
| Applied Industrial Technologies Incorporated | 0.81 |
| Rambus Incorporated | 0.81 |
| Lantheus Holdings Incorporated | 0.80 |
| 1 | Figures represent the percentage of the Fund's net assets. Holdings are subject to change and may have changed since the date specified. |
However, U.S. small caps rebounded during both the fourth quarter of 2022 and the first quarter of 2023, overcoming persistent inflation, higher interest rates, weakening economic data, and rising recession risks. Despite a regional banking crisis, U.S. equity markets were supported by
oversold conditions, slightly cooler inflation data, and a slower pace of rate increases by the Federal Reserve (Fed). Over the 12-month period, large caps outperformed small caps, value outperformed growth, and low-beta (less-volatile) stocks outperformed high beta.
Changes to the Fund’s portfolio during the period were minimal.
Characteristics that are typically favored in the portfolio include attractive valuation, earnings consistency, profitability, and improving sentiment. The team’s multifactor alpha model aggregates rankings from three factor groups—value, quality, and momentum—to provide a single score that indicates a stock’s attractiveness relative to the investment universe. These quantitative rankings are an integral part of the investment decision-making process, which is augmented by portfolio manager validation and review. Our alpha model results exhibited strength during the period. The momentum factor group was positive while value and quality were very strong.
Our experience demonstrates that fundamentally weighted strategies that invest in relatively inexpensive companies with improving fundamentals typically reward long-term investors. We continue to build portfolios that adhere to this philosophy while recognizing that the current pervasive macroeconomic risks require an elevated emphasis on risk controls, particularly as it relates to industry exposures, secular growth, oil prices, inflation expectations, and credit risk. We still prefer an emphasis on quality and value over risk and beta as we enter the later phase of the economic cycle.
Stock selection was strongest in industrials, consumer discretionary, and IT.
The strategy’s risk-controlled discipline and its focus on bottom-up stock selection tend to limit the effect of sector
| * | The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index with each stock’s weight in the index proportionate to its market value. You cannot invest directly in an index. |
| ** | The Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar–denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index. |
8 | Allspring Disciplined Small Cap Fund
Performance highlights (unaudited)
allocation on relative performance, and that was true over this period. Bottom-up stock selection effects within industrials, consumer discretionary, and IT contributed to relative performance. Within industrials, Encore Wire Corp.; Atkore, Inc.; and EMCOR Group were top contributors. Vivint Smart Home* led the way within consumer discretionary while Zeta Global Holdings, Sanmina Corp., and Rambus were top contributors within IT. Underweights to IT and financials contributed modestly to performance.
| Sector allocation as of March 31, 20231 |
| 1 | Figures represent the percentage of the Fund's long-term investments. Allocations are subject to change and may have changed since the date specified. |
Stock selection was weakest in consumer staples, real estate, and materials.
Bottom-up stock selection effects within consumer staples, real estate, and materials detracted from relative performance. The Fund did not own Celsius Holdings, an energy drink distributor, which returned 68% over the period. Within real estate, two of our real estate investment trust holdings, Safehold, Inc., and NexPoint Residential Trust, sold off amid the rising rate environment. Cleveland-Cliffs, a steel and iron ore pellet manufacturer, detracted within materials and we sold it.
Recession risks are rising as economic growth weakens and credit conditions tighten.
As 2023 began, investors were buoyed by optimism that the U.S. economy would narrowly avoid a recession. However, such hopes were tempered by dread that the Fed would continue hiking rates until something broke. By March, the economic data weakened and the U.S. witnessed its first bank failures since the onset of 2008’s Global Financial Crisis. However, the generous lending facilities at central banks should contain fallout from the bank failures, which, in turn, should limit some of the overall economic damage.
The sharp rise in short-term rates appears to be taming inflation, but we believe the lagged effects of 2022’s rapid tightening cycle are increasing the likelihood of a hard economic landing. Broad segments of the global economy are showing signs of tilting toward, or already being in, a recession. Depending on the company and industry, many firms have already experienced a profit recession.
Earnings expectations will likely rebound before the economy improves. Market multiples and credit spreads may point toward a recovery even before the reality of a recession sinks in. Recessions typically trigger demand destruction, a rebalancing of markets, and lower inflation.
Given the environment of tighter financial conditions and weakening economic growth, we believe it is still prudent to emphasize higher-quality stocks. In addition to our current emphasis on quality, our longstanding focus on strong earnings and inexpensive valuations is presenting selective opportunities within cyclical value stocks.
We currently anticipate volatile and range-bound markets. While we are generally cautious, there are potential positive catalysts from Chinese economic growth, decelerating inflation, and a resilient U.S. jobs market. As we monitor the macroeconomic environment, we will continue to diligently focus on company fundamentals and disciplined portfolio risk management.
| * | This security was no longer held at the end of the reporting period. |
Allspring Disciplined Small Cap Fund | 9
Fund expenses (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, shareholder servicing fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period from October 1, 2022 to March 31, 2023.
Actual expenses
The “Actual” line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Actual” line under the heading entitled “Expenses paid during period” for your applicable class of shares to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The “Hypothetical” line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) and contingent deferred sales charges. Therefore, the “Hypothetical” line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning account value 10-1-2022 | Ending account value 3-31-2023 | Expenses paid during the period1 | Annualized net expense ratio | |
| Class A | ||||
| Actual | $1,000.00 | $1,130.78 | $4.94 | 0.93% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.29 | $4.68 | 0.93% |
| Class R6 | ||||
| Actual | $1,000.00 | $1,129.01 | $2.65 | 0.50% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,022.44 | $2.52 | 0.50% |
| Administrator Class | ||||
| Actual | $1,000.00 | $1,127.04 | $4.51 | 0.85% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.69 | $4.28 | 0.85% |
| Institutional Class | ||||
| Actual | $1,000.00 | $1,128.63 | $3.18 | 0.60% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,021.94 | $3.02 | 0.60% |
1 Expenses paid is equal to the annualized net expense ratio of each class multiplied by the average account value over the period, multiplied by 182 divided by 365 (to reflect the one-half-year period).
10 | Allspring Disciplined Small Cap Fund
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Common stocks: 97.85% | |||||
| Communication services: 2.51% | |||||
| Diversified telecommunication services: 1.12% | |||||
| Bandwidth Incorporated Class A † | 4,300 | $ 65,360 | |||
| Charge Enterprises Incorporated † | 12,829 | 14,112 | |||
| Echostar Corporation Class A † | 3,949 | 72,227 | |||
| Ooma Incorporated † | 2,895 | 36,216 | |||
| 187,915 | |||||
| Entertainment: 0.09% | |||||
| Playstudios Incorporated Class A † | 4,277 | 15,782 | |||
| Interactive media & services: 0.76% | |||||
| QuinStreet Incorporated † | 1,475 | 23,408 | |||
| Ziff Davis Incorporated † | 685 | 53,464 | |||
| Ziprecruiter Incorporated Class A † | 3,125 | 49,813 | |||
| 126,685 | |||||
| Media: 0.54% | |||||
| Entravision Communications Corporation Class A | 9,862 | 59,665 | |||
| Sinclair Broadcast Group Incorporated Class A | 852 | 14,620 | |||
| TechTarget Incorporated † | 441 | 15,929 | |||
| 90,214 | |||||
| Consumer discretionary: 11.62% | |||||
| Automobile components: 0.89% | |||||
| Dana Incorporated | 3,694 | 55,595 | |||
| Gentherm Incorporated † | 337 | 20,362 | |||
| Modine Manufacturing Company † | 3,151 | 72,631 | |||
| 148,588 | |||||
| Diversified consumer services: 1.10% | |||||
| Chegg Incorporated † | 2,523 | 41,125 | |||
| Perdoceo Education Corporation † | 3,949 | 53,035 | |||
| Stride Incorporated † | 2,304 | 90,432 | |||
| 184,592 | |||||
| Hotels, restaurants & leisure: 2.58% | |||||
| Bloomin' Brands Incorporated | 4,873 | 124,992 | |||
| Brinker International Incorporated † | 2,930 | 111,340 | |||
| Hilton Grand Vacations Incorporated † | 1,456 | 64,690 | |||
| International Game Technology plc | 3,647 | 97,740 | |||
| Wingstop Incorporated | 178 | 32,677 | |||
| 431,439 | |||||
| Household durables: 2.22% | |||||
| Helen of Troy Limited † | 276 | 26,267 | |||
| Installed Building Products Incorporated | 294 | 33,525 | |||
| KB Home Incorporated | 1,120 | 45,002 | |||
| M/I Homes Incorporated † | 967 | 61,008 | |||
| Meritage Corporation | 617 | 72,041 |
The accompanying notes are an integral part of these financial statements.
Allspring Disciplined Small Cap Fund | 11
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Household durables (continued) | |||||
| Skyline Champion Corporation † | 362 | $ 27,233 | |||
| Taylor Morrison Home Corporation † | 2,785 | 106,554 | |||
| 371,630 | |||||
| Specialty retail: 3.74% | |||||
| Academy Sports & Outdoors Corporation | 1,898 | 123,845 | |||
| Asbury Automotive Group Incorporated † | 554 | 116,340 | |||
| Group 1 Automotive Incorporated | 348 | 78,794 | |||
| Hibbett Incorporated | 1,523 | 89,827 | |||
| Revolve Group Incorporated † | 3,117 | 81,977 | |||
| TravelCenters of America Incorporated † | 1,078 | 93,247 | |||
| Zumiez Incorporated † | 2,232 | 41,158 | |||
| 625,188 | |||||
| Textiles, apparel & luxury goods: 1.09% | |||||
| Crocs Incorporated † | 629 | 79,531 | |||
| G-III Apparel Group Limited † | 2,356 | 36,636 | |||
| Steven Madden Limited | 1,828 | 65,808 | |||
| 181,975 | |||||
| Consumer staples: 3.96% | |||||
| Beverages: 0.66% | |||||
| Coca Cola Bottling Corporation | 94 | 50,298 | |||
| Duckhorn Portfolio Incorporated † | 3,813 | 60,627 | |||
| 110,925 | |||||
| Consumer staples distribution & retail: 1.04% | |||||
| SpartanNash Company | 1,110 | 27,528 | |||
| Sprouts Farmers Market Incorporated † | 725 | 25,397 | |||
| The Andersons Incorporated | 1,530 | 63,220 | |||
| The Chef's Warehouse Incorporated † | 1,667 | 56,761 | |||
| 172,906 | |||||
| Food products: 0.94% | |||||
| John B. Sanfilippo & Son Incorporated | 353 | 34,213 | |||
| Lancaster Colony Corporation | 283 | 57,415 | |||
| The Simply Good Foods Company † | 1,632 | 64,905 | |||
| 156,533 | |||||
| Personal care products: 1.32% | |||||
| Bellring Brands Incorporated † | 2,292 | 77,928 | |||
| e.l.f. Beauty Incorporated † | 320 | 26,352 | |||
| Medifast Incorporated | 494 | 51,213 | |||
| USANA Health Sciences Incorporated † | 1,043 | 65,605 | |||
| 221,098 | |||||
| Energy: 6.58% | |||||
| Energy equipment & services: 1.63% | |||||
| Nabors Industries Limited † | 337 | 41,084 | |||
| Nextier Oilfield Solutions Incorporated † | 8,676 | 68,974 | |||
| Noble Corporation plc † | 822 | 32,444 | |||
| Oceaneering International Incorporated † | 2,321 | 40,919 | |||
| Patterson-UTI Energy Incorporated | 2,787 | 32,608 |
The accompanying notes are an integral part of these financial statements.
12 | Allspring Disciplined Small Cap Fund
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Energy equipment & services (continued) | |||||
| US Silica Holdings Incorporated † | 2,437 | $ 29,098 | |||
| Weatherford International plc † | 476 | 28,251 | |||
| 273,378 | |||||
| Oil, gas & consumable fuels: 4.95% | |||||
| Arch Resources Incorporated | 274 | 36,020 | |||
| California Resources Corporation | 2,049 | 78,887 | |||
| Callon Petroleum Company † | 341 | 11,403 | |||
| Chord Energy Corporation | 320 | 43,072 | |||
| CVR Energy Incorporated | 1,760 | 57,693 | |||
| Laredo Petroleum Incorporated † | 1,219 | 55,513 | |||
| Matador Resources Company | 949 | 45,220 | |||
| Par Pacific Holdings Incorporated † | 2,266 | 66,167 | |||
| PBF Energy Incorporated Class A | 2,662 | 115,424 | |||
| Peabody Energy Corporation † | 3,799 | 97,254 | |||
| Permian Resources Corporation | 6,567 | 68,954 | |||
| Ranger Oil Corporation Class A | 2,369 | 96,750 | |||
| W&T Offshore Incorporated † | 4,247 | 21,575 | |||
| World Fuel Services Corporation | 1,300 | 33,215 | |||
| 827,147 | |||||
| Financials: 14.97% | |||||
| Banks: 7.16% | |||||
| Axos Financial Incorporated † | 2,207 | 81,482 | |||
| Bank of N.T. Butterfield & Son Limited | 1,077 | 29,079 | |||
| Brookline Bancorp Incorporated | 2,531 | 26,576 | |||
| Customers Bancorp Incorporated † | 1,502 | 27,817 | |||
| Enterprise Financial Service Corporation | 904 | 40,309 | |||
| Financial Institutions Incorporated | 1,819 | 35,070 | |||
| First Bancorp of North Carolina | 1,568 | 55,695 | |||
| First Bancorp of Puerto Rico | 5,896 | 67,332 | |||
| First Bank | 2,249 | 22,715 | |||
| First Financial Corporation | 1,510 | 56,595 | |||
| First Foundation Incorporated | 2,074 | 15,451 | |||
| Great Southern Bancorp Incorporated | 1,038 | 52,606 | |||
| Hancock Whitney Corporation | 1,535 | 55,874 | |||
| Hanmi Financial Corporation | 3,569 | 66,276 | |||
| Hilltop Holdings Incorporated | 2,325 | 68,983 | |||
| NBT Bancorp Incorporated | 1,743 | 58,757 | |||
| OFG Bancorp | 2,615 | 65,218 | |||
| Preferred Bank | 1,038 | 56,893 | |||
| RBB Bancorp | 3,013 | 46,702 | |||
| Republic Bancorp Incorporated Class A | 1,661 | 70,476 | |||
| The Bancorp Incorporated † | 2,669 | 74,332 | |||
| TriCo Bancshares | 1,449 | 60,264 | |||
| Univest Financial Corporation | 1,558 | 36,987 | |||
| Westamerica Bancorporation | 570 | 25,251 | |||
| 1,196,740 | |||||
| Capital markets: 1.70% | |||||
| Artisan Partners Asset Management Incorporated Class A | 1,219 | 38,984 | |||
| Evercore Partners Incorporated Class A | 792 | 91,381 | |||
| Open Lending Corporation Class A † | 2,448 | 17,234 | |||
| PJT Partners Incorporated Class A | 497 | 35,878 |
The accompanying notes are an integral part of these financial statements.
Allspring Disciplined Small Cap Fund | 13
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Capital markets (continued) | |||||
| Stonex Group Incorporated | 528 | $ 54,664 | |||
| Victory Capital Holding Class A | 1,595 | 46,686 | |||
| 284,827 | |||||
| Consumer finance: 0.46% | |||||
| Enova International Incorporated † | 1,084 | 48,162 | |||
| Green Dot Corporation Class A † | 1,658 | 28,484 | |||
| 76,646 | |||||
| Financial services: 2.97% | |||||
| Essent Group Limited | 2,420 | 96,921 | |||
| Evertec Incorporated | 1,342 | 45,293 | |||
| International Money Express Incorporated † | 4,150 | 106,987 | |||
| Jackson Financial Incorporation Class A | 2,292 | 85,744 | |||
| Marqeta Incorporated Class A † | 13,328 | 60,909 | |||
| MGIC Investment Corporation | 3,970 | 53,277 | |||
| Radian Group Incorporated | 2,146 | 47,427 | |||
| 496,558 | |||||
| Insurance: 2.68% | |||||
| American Equity Investment Life Holding Company | 2,428 | 88,598 | |||
| CNO Financial Group Incorporated | 4,194 | 93,065 | |||
| Employers Holdings Incorporated | 1,249 | 52,071 | |||
| Genworth Financial Incorporated Class A † | 14,257 | 71,570 | |||
| Palomar Holdings Incorporated † | 533 | 29,422 | |||
| Selective Insurance Group Incorporated | 617 | 58,819 | |||
| Stewart Information Services Corporation | 1,364 | 55,037 | |||
| 448,582 | |||||
| Health care: 15.87% | |||||
| Biotechnology: 5.21% | |||||
| Agenus Incorporated † | 8,300 | 12,616 | |||
| Alector Incorporated † | 4,631 | 28,666 | |||
| ALX Oncology Holdings Incorporated † | 3,411 | 15,414 | |||
| Amicus Therapeutics Incorporated † | 3,548 | 39,347 | |||
| Arcus Biosciences Incorporated † | 2,673 | 48,756 | |||
| Arrowhead Pharmaceuticals Incorporated † | 677 | 17,196 | |||
| Bridgebio Pharma Incorporated † | 2,308 | 38,267 | |||
| CareDx Incorporated † | 3,059 | 27,959 | |||
| Catalyst Pharmaceuticals Incorporated † | 1,935 | 32,082 | |||
| Cullinan Oncology Incorporated † | 2,228 | 22,792 | |||
| Cytokinetics Incorporated † | 901 | 31,706 | |||
| Erasca Incorporated † | 5,021 | 15,113 | |||
| Halozyme Therapeutics Incorporated † | 1,388 | 53,008 | |||
| Icosavax Incorporated † | 4,219 | 24,470 | |||
| Intellia Therapeutics Incorporated † | 661 | 24,635 | |||
| Intercept Pharmaceuticals Incorporated † | 2,985 | 40,089 | |||
| Iteos Therapeutics Incorporated † | 2,633 | 35,835 | |||
| Karuna Therapeutics Incorporated † | 316 | 57,398 | |||
| Kiniksa Pharmaceuticals Limited Class A † | 3,614 | 38,887 | |||
| Kymera Therapeutics Incorporated † | 759 | 22,489 | |||
| Prothena Corporation plc † | 803 | 38,921 | |||
| Regenxbio Incorporated † | 2,034 | 38,463 | |||
| Sana Biotechnology Incorporated † | 6,708 | 21,935 |
The accompanying notes are an integral part of these financial statements.
14 | Allspring Disciplined Small Cap Fund
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Biotechnology (continued) | |||||
| Stoke Therapeutics Incorporated † | 3,854 | $ 32,104 | |||
| Sutro Biopharma Incorporated † | 5,440 | 25,133 | |||
| Syndax Pharmaceuticals Incorporated † | 880 | 18,586 | |||
| Ultragenyx Pharmaceutical Incorporated † | 446 | 17,885 | |||
| VIR Biotechnology Incorporated † | 2,222 | 51,706 | |||
| 871,458 | |||||
| Health care equipment & supplies: 2.97% | |||||
| Axonics Incorporated † | 732 | 39,938 | |||
| Embecta Corporation | 1,751 | 49,238 | |||
| Lantheus Holdings Incorporated † | 1,624 | 134,077 | |||
| LivaNova plc † | 2,226 | 97,009 | |||
| Merit Medical Systems Incorporated † | 832 | 61,526 | |||
| Omnicell Incorporated † | 502 | 29,452 | |||
| Shockwave Medical Incorporated † | 192 | 41,631 | |||
| STAAR Surgical Company † | 685 | 43,806 | |||
| 496,677 | |||||
| Health care providers & services: 4.22% | |||||
| AMN Healthcare Services Incorporated † | 1,103 | 91,505 | |||
| Cross Country Healthcare Incorporated † | 2,429 | 54,215 | |||
| Hims & Hers Health Incorporated † | 2,505 | 24,850 | |||
| Modivcare Incorporated † | 474 | 39,854 | |||
| Neogenomics Incorporated † | 4,388 | 76,395 | |||
| Option Care Health Incorporated † | 4,122 | 130,956 | |||
| Progyny Incorporated † | 1,289 | 41,403 | |||
| Select Medical Holdings Corporation | 1,356 | 35,053 | |||
| Tenet Healthcare Corporation † | 1,729 | 102,737 | |||
| The Ensign Group Incorporated | 1,141 | 109,011 | |||
| 705,979 | |||||
| Health care technology: 0.50% | |||||
| Computer Programs & Systems Incorporated † | 1,625 | 49,075 | |||
| NextGen Healthcare Incorporated † | 1,938 | 33,741 | |||
| 82,816 | |||||
| Life sciences tools & services: 0.58% | |||||
| Abcellera Biologics Incorporated † | 3,234 | 24,384 | |||
| Adaptive Biotechnologies Corporation † | 1,967 | 17,369 | |||
| Medpace Holdings Incorporated † | 63 | 11,847 | |||
| Quanterix Corporation † | 3,878 | 43,705 | |||
| 97,305 | |||||
| Pharmaceuticals: 2.39% | |||||
| Amphastar Pharmaceuticals Incorporated | 1,627 | 61,013 | |||
| Corcept Therapeutics Incorporated † | 2,437 | 52,785 | |||
| Harmony Biosciences Holdings † | 1,376 | 44,926 | |||
| Intra-Cellular Therapies Incorporated † | 1,197 | 64,818 | |||
| Ligand Pharmaceuticals Incorporated | 260 | 19,126 | |||
| Pacira Biosciences Incorporated † | 605 | 24,690 | |||
| Prestige Consumer Healthcare Incorporated † | 1,572 | 98,454 | |||
| Tarsus Pharmaceuticals Incorporated † | 2,652 | 33,336 | |||
| 399,148 |
The accompanying notes are an integral part of these financial statements.
Allspring Disciplined Small Cap Fund | 15
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Industrials: 16.69% | |||||
| Aerospace & defense: 1.09% | |||||
| Moog Incorporated Class A | 732 | $ 73,749 | |||
| Triumph Group Incorporated † | 3,038 | 35,210 | |||
| Vectrus Incorporated † | 1,859 | 73,839 | |||
| 182,798 | |||||
| Building products: 0.90% | |||||
| Janus International Group Incorporated † | 3,776 | 37,231 | |||
| Simpson Manufacturing Company Incorporated | 540 | 59,206 | |||
| UFP Industries Incorporated | 685 | 54,437 | |||
| 150,874 | |||||
| Commercial services & supplies: 0.93% | |||||
| Ennis Incorporated | 3,502 | 73,857 | |||
| Heritage Crystal Clean Incorporated † | 1,136 | 40,453 | |||
| SP Plus Corporation † | 1,188 | 40,737 | |||
| 155,047 | |||||
| Construction & engineering: 2.54% | |||||
| Comfort Systems Incorporated | 827 | 120,709 | |||
| EMCOR Group Incorporated | 938 | 152,509 | |||
| MYR Group Incorporated † | 886 | 111,645 | |||
| Primoris Services Corporation | 1,635 | 40,319 | |||
| 425,182 | |||||
| Electrical equipment: 2.20% | |||||
| Atkore Incorporated † | 1,232 | 173,071 | |||
| Bloom Energy Corporation Class A † | 1,127 | 22,461 | |||
| Encore Wire Corporation | 880 | 163,090 | |||
| SunPower Corporation † | 626 | 8,664 | |||
| 367,286 | |||||
| Ground transportation: 0.71% | |||||
| Arcbest Corporation | 1,278 | 118,113 | |||
| Machinery: 3.11% | |||||
| Alamo Group Incorporated | 278 | 51,196 | |||
| Hillenbrand Incorporated | 2,679 | 127,333 | |||
| Mueller Industries Incorporated | 2,089 | 153,500 | |||
| Titan International Incorporated † | 3,777 | 39,583 | |||
| Wabash National Corporation | 1,914 | 47,065 | |||
| Watts Water Technologies Incorporated | 600 | 100,992 | |||
| 519,669 | |||||
| Marine transportation: 0.72% | |||||
| Matson Incorporated | 2,028 | 121,011 | |||
| Professional services: 1.51% | |||||
| CBIZ Incorporated † | 733 | 36,276 | |||
| Insperity Incorporated | 507 | 61,626 | |||
| Kelly Services Incorporated Class A | 3,991 | 66,211 | |||
| TriNet Group Incorporated † | 1,108 | 89,316 | |||
| 253,429 |
The accompanying notes are an integral part of these financial statements.
16 | Allspring Disciplined Small Cap Fund
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Trading companies & distributors: 2.98% | |||||
| Applied Industrial Technologies Incorporated | 954 | $ 135,592 | |||
| Bluelinx Holdings Incorporated † | 583 | 39,621 | |||
| Boise Cascade Company | 1,721 | 108,853 | |||
| GMS Incorporated † | 401 | 23,214 | |||
| Rush Enterprises Incorporated Class A | 1,102 | 60,169 | |||
| Titan Machinery Incorporated † | 2,612 | 79,535 | |||
| WESCO International Incorporated | 333 | 51,462 | |||
| 498,446 | |||||
| Information technology: 13.19% | |||||
| Communications equipment: 0.91% | |||||
| Calix Incorporated † | 1,983 | 106,269 | |||
| Extreme Networks Incorporated † | 2,386 | 45,620 | |||
| 151,889 | |||||
| Electronic equipment, instruments & components: 1.81% | |||||
| Advanced Energy Industries Incorporated | 545 | 53,410 | |||
| Fabrinet † | 1,031 | 122,442 | |||
| Sanmina Corporation † | 2,078 | 126,737 | |||
| 302,589 | |||||
| IT services: 0.70% | |||||
| Hackett Group Incorporated | 3,727 | 68,875 | |||
| Perficient Incorporated † | 656 | 47,357 | |||
| 116,232 | |||||
| Professional services: 0.17% | |||||
| ExlService Holdings Incorporated † | 178 | 28,806 | |||
| Semiconductors & semiconductor equipment: 4.22% | |||||
| Alpha & Omega Semiconductor † | 1,881 | 50,693 | |||
| Axcelis Technologies Incorporated † | 883 | 117,660 | |||
| Diodes Incorporated † | 1,061 | 98,418 | |||
| Maxlinear Incorporated † | 929 | 32,710 | |||
| Onto Innovation Incorporated † | 929 | 81,641 | |||
| Photronics Incorporated † | 2,488 | 41,251 | |||
| Rambus Incorporated † | 2,637 | 135,173 | |||
| Smart Global Holdings Incorporated † | 1,243 | 21,429 | |||
| Synaptics Incorporated † | 460 | 51,129 | |||
| Ultra Clean Holdings Incorporated † | 2,266 | 75,141 | |||
| 705,245 | |||||
| Software: 5.38% | |||||
| A10 Networks Incorporated | 5,780 | 89,529 | |||
| Amplitude Incorporated Class A † | 2,691 | 33,476 | |||
| Arlo Technologies Incorporated † | 6,641 | 40,244 | |||
| C3.ai Incorporated † | 1,157 | 38,840 | |||
| Clear Secure Incorporated Class A | 1,321 | 34,571 | |||
| Cvent Holding Corporation † | 13,425 | 112,233 | |||
| eGain Corporation † | 5,064 | 38,436 | |||
| InterDigital Incorporated | 1,070 | 78,003 | |||
| JFrog Limited † | 1,623 | 31,973 | |||
| Rimini Street Incorporated † | 10,843 | 44,673 | |||
| SPS Commerce Incorporated † | 992 | 151,082 |
The accompanying notes are an integral part of these financial statements.
Allspring Disciplined Small Cap Fund | 17
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Software (continued) | |||||
| Tenable Holdings Incorporated † | 767 | $ 36,440 | |||
| Workiva Incorporated † | 324 | 33,181 | |||
| XPERI Incorporated † | 1,622 | 17,728 | |||
| Zeta Global Holdings Corporation Class A † | 11,081 | 120,007 | |||
| 900,416 | |||||
| Materials: 3.98% | |||||
| Chemicals: 1.04% | |||||
| Advansix Incorporated | 1,891 | 72,369 | |||
| Futurefuel Corporation | 2,653 | 19,579 | |||
| Minerals Technologies Incorporated | 1,043 | 63,018 | |||
| Tronox Holdings plc Class A | 1,356 | 19,499 | |||
| 174,465 | |||||
| Containers & packaging: 0.83% | |||||
| Greif Incorporated Class A | 988 | 62,610 | |||
| Myers Industries Incorporated | 3,544 | 75,948 | |||
| 138,558 | |||||
| Metals & mining: 2.11% | |||||
| Arconic Corporation † | 1,406 | 36,879 | |||
| Commercial Metals Company | 2,853 | 139,512 | |||
| Ryerson Holding Corporation | 1,033 | 37,581 | |||
| Schnitzer Steel Industries Incorporated Class A | 1,531 | 47,614 | |||
| Suncoke Energy Incorporated | 6,702 | 60,184 | |||
| Warrior Met Coal Incorporated | 832 | 30,543 | |||
| 352,313 | |||||
| Real estate: 5.21% | |||||
| Diversified REITs: 0.73% | |||||
| Armada Hoffler Properties Incorporated | 2,206 | 26,053 | |||
| Global Net Lease Incorporated | 6,794 | 87,371 | |||
| Star Holdings LLC † | 549 | 9,547 | |||
| 122,971 | |||||
| Health care REITs: 0.36% | |||||
| CareTrust REIT Incorporated | 2,197 | 43,017 | |||
| National Health Investors Incorporated | 351 | 18,105 | |||
| 61,122 | |||||
| Hotel & resort REITs: 0.47% | |||||
| Braemar Hotels & Resorts Incorporated | 12,241 | 47,250 | |||
| DiamondRock Hospitality | 3,784 | 30,764 | |||
| 78,014 | |||||
| Industrial REITs: 0.87% | |||||
| STAG Industrial Incorporated | 4,287 | 144,986 | |||
| Office REITs: 0.40% | |||||
| Brandywine Realty Trust | 7,925 | 37,485 | |||
| Piedmont Office Realty Trust Incorporated Class A | 3,995 | 29,164 | |||
| 66,649 |
The accompanying notes are an integral part of these financial statements.
18 | Allspring Disciplined Small Cap Fund
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Real estate management & development: 0.32% | |||||
| Newmark Group Incorporated Class A | 7,519 | $ 53,235 | |||
| Residential REITs: 0.87% | |||||
| BRT Apartments Corporation REIT | 2,427 | 47,860 | |||
| NexPoint Residential Trust Incorporated | 2,240 | 97,821 | |||
| 145,681 | |||||
| Retail REITs: 0.97% | |||||
| Getty Realty Corporation | 1,298 | 46,767 | |||
| The Necessity Retail REIT Incorporated | 5,926 | 37,215 | |||
| Urban Edge Properties | 5,234 | 78,824 | |||
| 162,806 | |||||
| Specialized REITs: 0.22% | |||||
| Safehold Incorporated | 575 | 16,875 | |||
| Uniti Group Incorporated | 5,475 | 19,436 | |||
| 36,311 | |||||
| Utilities: 3.27% | |||||
| Electric utilities: 0.80% | |||||
| Otter Tail Corporation | 1,854 | 133,989 | |||
| Gas utilities: 1.28% | |||||
| Brookfield Infrastructure Corporation Class A | 2,538 | 116,900 | |||
| New Jersey Resources Corporation | 1,821 | 96,877 | |||
| 213,777 | |||||
| Independent power & renewable electricity producers: 0.50% | |||||
| Clearway Energy Incorporated Class A | 2,750 | 82,583 | |||
| Multi-utilities: 0.57% | |||||
| Black Hills Corporation | 528 | 33,317 | |||
| Northwestern Corporation | 1,081 | 62,547 | |||
| 95,864 | |||||
| Water utilities: 0.12% | |||||
| York Water Company | 456 | 20,383 | |||
| Total Common stocks (Cost $14,474,230) | 16,363,470 |
| Expiration date | |||||
| Rights: 0.00% | |||||
| Health care: 0.00% | |||||
| Biotechnology: 0.00% | |||||
| Aduro Biotech Incorporated ♦† | 10-2-2030 | 4,415 | 0 | ||
| OmniAb Incorporated Earnout Shares $12.50 ♦† | 11-2-2027 | 104 | 0 | ||
| OmniAb Incorporated Earnout Shares $15.00 ♦† | 11-2-2027 | 104 | 0 | ||
| Total Rights (Cost $0) | 0 |
The accompanying notes are an integral part of these financial statements.
Allspring Disciplined Small Cap Fund | 19
Portfolio of investments—March 31, 2023
| Yield | Shares | Value | |||
| Short-term investments: 1.75% | |||||
| Investment companies: 1.75% | |||||
| Allspring Government Money Market Fund Select Class ♠∞ | 4.69% | 292,998 | $ 292,998 | ||
| Total Short-term investments (Cost $292,998) | 292,998 | ||||
| Total investments in securities (Cost $14,767,228) | 99.60% | 16,656,468 | |||
| Other assets and liabilities, net | 0.40 | 66,076 | |||
| Total net assets | 100.00% | $16,722,544 |
| † | Non-income-earning security |
| ♦ | The security is fair valued in accordance with Allspring Funds Management's valuation procedures, as the Board-designated valuation designee. |
| ♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
| ∞ | The rate represents the 7-day annualized yield at period end. |
| Abbreviations: | |
| REIT | Real estate investment trust |
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
| Value, beginning of period | Purchases | Sales proceeds | Net realized gains (losses) | Net change in unrealized gains (losses) | Value, end of period | Shares, end of period | Income from affiliated securities | |||
| Short-term investments | ||||||||||
| Allspring Government Money Market Fund Select Class | $561,734 | $3,980,297 | $(4,249,033) | $ 0 | $0 | $ 292,998 | 292,998 | $ 8,937 | ||
| Investments in affiliates no longer held at end of period | ||||||||||
| Securities Lending Cash Investments LLC | 360,950 | 2,468,159 | (2,829,095) | (14) | 0 | 0 | 0 | 3,319 # | ||
| $ (14) | $0 | $292,998 | $12,256 | |||||||
| # | Amount shown represents income before fees and rebates. |
Futures contracts
| Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
| Long | ||||||
| Micro E-Mini Russell 2000 Index | 35 | 6-16-2023 | $309,679 | $317,362 | $7,683 | $0 |
The accompanying notes are an integral part of these financial statements.
20 | Allspring Disciplined Small Cap Fund
Statement of assets and liabilities—March 31, 2023
| Assets | |
Investments in unaffiliated securities, at value (cost $14,474,230) | $ 16,363,470 |
Investments in affiliated securities, at value (cost $292,998) | 292,998 |
Cash | 1,825 |
Cash at broker segregated for futures contracts | 33,640 |
Receivable from manager | 19,747 |
Receivable for dividends | 12,402 |
Receivable for daily variation margin on open futures contracts | 5,838 |
Receivable for Fund shares sold | 966 |
Receivable for securities lending income, net | 3 |
Prepaid expenses and other assets | 22,140 |
Total assets | 16,753,029 |
| Liabilities | |
Custody and accounting fees payable | 14,697 |
Shareholder report expenses payable | 4,578 |
Shareholder servicing fees payable | 3,621 |
Payable for Fund shares redeemed | 2,693 |
Administration fees payable | 2,037 |
Professional fees payable | 1,562 |
Trustees’ fees and expenses payable | 1,110 |
Accrued expenses and other liabilities | 187 |
Total liabilities | 30,485 |
Total net assets | $16,722,544 |
| Net assets consist of | |
Paid-in capital | $ 13,818,721 |
Total distributable earnings | 2,903,823 |
Total net assets | $16,722,544 |
| Computation of net asset value and offering price per share | |
Net assets – Class A | $ 578,230 |
Shares outstanding – Class A1 | 52,663 |
Net asset value per share – Class A | $10.98 |
Maximum offering price per share – Class A2 | $11.65 |
Net assets – Class R6 | $ 198,281 |
Shares outstanding – Class R61 | 18,393 |
Net asset value per share – Class R6 | $10.78 |
Net assets – Administrator Class | $ 15,054,688 |
Shares outstanding – Administrator Class1 | 1,387,315 |
Net asset value per share – Administrator Class | $10.85 |
Net assets – Institutional Class | $ 891,345 |
Shares outstanding – Institutional Class1 | 82,512 |
Net asset value per share – Institutional Class | $10.80 |
| 1 | The Fund has an unlimited number of authorized shares. |
| 2 | Maximum offering price is computed as 100/94.25 of net asset value. On investments of $50,000 or more, the offering price is reduced. |
The accompanying notes are an integral part of these financial statements.
Allspring Disciplined Small Cap Fund | 21
Statement of operations—year ended March 31, 2023
| Investment income | |
Dividends (net of foreign withholdings taxes of $1,012) | $ 213,220 |
Income from affiliated securities | 12,040 |
Interest | 911 |
Total investment income | 226,171 |
| Expenses | |
Management fee | 90,758 |
| Administration fees | |
Class A | 1,302 |
Class R6 | 63 |
Administrator Class | 21,296 |
Institutional Class | 1,223 |
| Shareholder servicing fees | |
Class A | 1,550 |
Administrator Class | 40,954 |
Custody and accounting fees | 25,151 |
Professional fees | 53,809 |
Registration fees | 61,173 |
Shareholder report expenses | 30,619 |
Trustees’ fees and expenses | 20,174 |
Other fees and expenses | 14,506 |
Total expenses | 362,578 |
| Less: Fee waivers and/or expense reimbursements | |
Fund-level | (210,840) |
Class A | (123) |
Class R6 | (21) |
Administrator Class | (83) |
Net expenses | 151,511 |
Net investment income | 74,660 |
| Realized and unrealized gains (losses) on investments | |
| Net realized gains (losses) on | |
Unaffiliated securities | 1,286,922 |
Affiliated securities | (14) |
Futures contracts | (55,512) |
Net realized gains on investments | 1,231,396 |
| Net change in unrealized gains (losses) on | |
Unaffiliated securities | (3,101,168) |
Futures contracts | (22,422) |
Net change in unrealized gains (losses) on investments | (3,123,590) |
Net realized and unrealized gains (losses) on investments | (1,892,194) |
Net decrease in net assets resulting from operations | $(1,817,534) |
The accompanying notes are an integral part of these financial statements.
22 | Allspring Disciplined Small Cap Fund
Statement of changes in net assets
| Year ended March 31, 2023 | Year ended March 31, 2022 | |||
| Operations | ||||
Net investment income | $ 74,660 | $ 35,192 | ||
Net realized gains on investments | 1,231,396 | 2,783,921 | ||
Net change in unrealized gains (losses) on investments | (3,123,590) | (2,322,678) | ||
Net increase (decrease) in net assets resulting from operations | (1,817,534) | 496,435 | ||
| Distributions to shareholders from | ||||
| Net investment income and net realized gains | ||||
Class A | (607) | 0 | ||
Class R6 | (827) | (248) | ||
Administrator Class | (36,866) | (35,284) | ||
Institutional Class | (6,230) | (9,783) | ||
Total distributions to shareholders | (44,530) | (45,315) | ||
| Capital share transactions | Shares | Shares | ||
| Proceeds from shares sold | ||||
Class A | 15,260 | 157,891 | 36,903 | 451,068 |
Class R6 | 2,502 | 25,730 | 8,565 | 101,266 |
Administrator Class | 90,405 | 976,883 | 88,246 | 1,054,709 |
Institutional Class | 8,916 | 97,686 | 11,224 | 134,580 |
| 1,258,190 | 1,741,623 | |||
| Reinvestment of distributions | ||||
Class A | 56 | 607 | 0 | 0 |
Class R6 | 78 | 827 | 21 | 248 |
Administrator Class | 3,445 | 36,618 | 2,936 | 35,233 |
Institutional Class | 590 | 6,230 | 817 | 9,783 |
| 44,282 | 45,264 | |||
| Payment for shares redeemed | ||||
Class A | (18,692) | (204,318) | (65,850) | (791,179) |
Class R6 | (4,449) | (44,697) | (1,858) | (22,060) |
Administrator Class | (493,159) | (5,220,002) | (402,466) | (4,858,565) |
Institutional Class | (28,806) | (301,809) | (57,438) | (686,236) |
| (5,770,826) | (6,358,040) | |||
Net decrease in net assets resulting from capital share transactions | (4,468,354) | (4,571,153) | ||
Total decrease in net assets | (6,330,418) | (4,120,033) | ||
| Net assets | ||||
Beginning of period | 23,052,962 | 27,172,995 | ||
End of period | $16,722,544 | $23,052,962 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Disciplined Small Cap Fund | 23
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class A | 2023 | 2022 | 2021 | 2020 | 2019 1 |
Net asset value, beginning of period | $11.82 | $11.67 | $6.12 | $8.39 | $23.70 |
Net investment income (loss) | 0.04 | 0.01 2 | (0.05) 2 | (0.00) 2,3 | 0.02 |
Net realized and unrealized gains (losses) on investments | (0.86) | 0.14 | 5.60 | (2.22) | (3.37) |
Total from investment operations | (0.82) | 0.15 | 5.55 | (2.22) | (3.35) |
| Distributions to shareholders from | |||||
Net investment income | (0.01) | 0.00 | 0.00 | (0.05) | (0.04) |
Net realized gains | (0.01) | 0.00 | 0.00 | 0.00 | (11.92) |
Total distributions to shareholders | (0.02) | 0.00 | 0.00 | (0.05) | (11.96) |
Net asset value, end of period | $10.98 | $11.82 | $11.67 | $6.12 | $8.39 |
Total return4 | (7.01)% | 1.29% | 90.69% | (26.67)% | (11.52)% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 2.10% | 1.74% | 1.81% | 1.40% | 1.14% |
Net expenses | 0.91% | 0.91% | 0.93% | 0.93% | 0.92% |
Net investment income (loss) | 0.35% | 0.05% | (0.53)% | (0.05)% | 0.16% |
| Supplemental data | |||||
Portfolio turnover rate | 53% | 39% | 48% | 67% | 176% |
Net assets, end of period (000s omitted) | $578 | $662 | $991 | $102 | $34 |
| 1 | For the period from July 31, 2018 (commencement of class operations) to March 31, 2019 |
| 2 | Calculated based upon average shares outstanding |
| 3 | Amount is more than $(0.005) |
| 4 | Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized. |
The accompanying notes are an integral part of these financial statements.
24 | Allspring Disciplined Small Cap Fund
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class R6 | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $11.64 | $11.45 | $6.15 | $8.50 | $22.63 |
Net investment income | 0.08 1 | 0.06 1 | 0.04 1 | 0.08 1 | 0.06 |
Net realized and unrealized gains (losses) on investments | (0.89) | 0.14 | 5.51 | (2.35) | (2.19) |
Total from investment operations | (0.81) | 0.20 | 5.55 | (2.27) | (2.13) |
| Distributions to shareholders from | |||||
Net investment income | (0.04) | (0.01) | (0.25) | (0.08) | (0.08) |
Net realized gains | (0.01) | 0.00 | 0.00 | 0.00 | (11.92) |
Total distributions to shareholders | (0.05) | (0.01) | (0.25) | (0.08) | (12.00) |
Net asset value, end of period | $10.78 | $11.64 | $11.45 | $6.15 | $8.50 |
Total return | (6.98)% | 1.76% | 90.71% | (27.03)% | (6.75)% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.67% | 1.32% | 1.42% | 0.89% | 0.82% |
Net expenses | 0.50% | 0.50% | 0.50% | 0.50% | 0.64% |
Net investment income | 0.76% | 0.49% | 0.51% | 0.95% | 0.48% |
| Supplemental data | |||||
Portfolio turnover rate | 53% | 39% | 48% | 67% | 176% |
Net assets, end of period (000s omitted) | $198 | $236 | $155 | $141 | $4,014 |
| 1 | Calculated based upon average shares outstanding |
The accompanying notes are an integral part of these financial statements.
Allspring Disciplined Small Cap Fund | 25
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $11.73 | $11.59 | $6.10 | $8.40 | $22.53 |
Net investment income | 0.06 | 0.02 | 0.02 | 0.02 1 | 0.03 1 |
Net realized and unrealized gains (losses) on investments | (0.91) | 0.14 | 5.47 | (2.27) | (2.21) |
Total from investment operations | (0.85) | 0.16 | 5.49 | (2.25) | (2.18) |
| Distributions to shareholders from | |||||
Net investment income | (0.02) | (0.02) | (0.00) 2 | (0.05) | (0.03) |
Net realized gains | (0.01) | 0.00 | 0.00 | 0.00 | (11.92) |
Total distributions to shareholders | (0.03) | (0.02) | (0.00) 2 | (0.05) | (11.95) |
Net asset value, end of period | $10.85 | $11.73 | $11.59 | $6.10 | $8.40 |
Total return | (7.28)% | 1.37% | 90.04% | (26.99)% | (7.01)% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 2.01% | 1.67% | 1.75% | 1.25% | 1.13% |
Net expenses | 0.85% | 0.85% | 0.85% | 0.85% | 0.95% |
Net investment income | 0.40% | 0.12% | 0.17% | 0.27% | 0.16% |
| Supplemental data | |||||
Portfolio turnover rate | 53% | 39% | 48% | 67% | 176% |
Net assets, end of period (000s omitted) | $15,055 | $20,963 | $24,318 | $17,049 | $49,911 |
| 1 | Calculated based upon average shares outstanding |
| 2 | Amount is less than $0.005. |
The accompanying notes are an integral part of these financial statements.
26 | Allspring Disciplined Small Cap Fund
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Institutional Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $11.71 | $11.60 | $6.10 | $8.48 | $22.61 |
Net investment income | 0.07 1 | 0.04 1 | 0.04 1 | 0.06 1 | 0.07 1 |
Net realized and unrealized gains (losses) on investments | (0.90) | 0.16 | 5.47 | (2.28) | (2.22) |
Total from investment operations | (0.83) | 0.20 | 5.51 | (2.22) | (2.15) |
| Distributions to shareholders from | |||||
Net investment income | (0.07) | (0.09) | (0.01) | (0.16) | (0.06) |
Net realized gains | (0.01) | 0.00 | 0.00 | 0.00 | (11.92) |
Total distributions to shareholders | (0.08) | (0.09) | (0.01) | (0.16) | (11.98) |
Net asset value, end of period | $10.80 | $11.71 | $11.60 | $6.10 | $8.48 |
Total return | (7.09)% | 1.68% | 90.34% | (26.80)% | (6.79)% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.76% | 1.42% | 1.51% | 0.94% | 0.89% |
Net expenses | 0.60% | 0.60% | 0.60% | 0.60% | 0.71% |
Net investment income | 0.65% | 0.36% | 0.47% | 0.69% | 0.41% |
| Supplemental data | |||||
Portfolio turnover rate | 53% | 39% | 48% | 67% | 176% |
Net assets, end of period (000s omitted) | $891 | $1,192 | $1,708 | $1,586 | $25,658 |
| 1 | Calculated based upon average shares outstanding |
The accompanying notes are an integral part of these financial statements.
Allspring Disciplined Small Cap Fund | 27
Notes to financial statements
1. ORGANIZATION
Allspring Funds Trust (the "Trust"), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Allspring Disciplined Small Cap Fund (the "Fund") which is a diversified series of the Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Securities valuation
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities and futures contracts that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value. Interests in non-registered investment companies that are redeemable at net asset value are fair valued normally at net asset value.
Investments which are not valued using the methods discussed above are valued at their fair value, as determined in good faith by Allspring Funds Management, LLC ("Allspring Funds Management"), which was named the valuation designee by the Board of Trustees. As the valuation designee, Allspring Funds Management is responsible for day-to-day valuation activities for the Allspring Funds. In connection with these responsibilities, Allspring Funds Management has established a Valuation Committee and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities. On a quarterly basis, the Board of Trustees receives reports of valuation actions taken by the Valuation Committee. On at least an annual basis, the Board of Trustees receives an assessment of the adequacy and effectiveness of Allspring Funds Management's process for determining the fair value of the portfolio of investments.
Securities lending
During the period, the Fund participated in a program to lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. When securities were on loan, the Fund received interest or dividends on those securities. Cash collateral received in connection with its securities lending transactions was invested in Securities Lending Cash Investments, LLC (the "Securities Lending Fund"), an affiliated non-registered investment company. Effective at the close of business on March 29, 2023, the Fund is no longer participating in the securities lending program and the Securities Lending Fund was liquidated. Securities Lending Fund was managed by Allspring Funds Management and was subadvised by Allspring Global Investments, LLC ("Allspring Investments"), an affiliate of Allspring Funds Management and wholly owned subsidiary of Allspring Global Investments Holdings, LLC. Allspring Funds Management received an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Securities Lending Fund increased. All of the fees received by Allspring Funds Management were paid to Allspring Investments for its services as subadviser.
Investments in Securities Lending Fund were valued at the evaluated bid price provided by an independent pricing service. Income earned from investment in the Securities Lending Fund (net of fees and rebates), if any, is included in income from affiliated securities on the Statement of Operations.
In a securities lending transaction, the net asset value of the Fund is affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of the instrument in which collateral is invested. The amount of securities lending activity undertaken by the Fund fluctuates from time to time. The Fund has the right under the lending agreement to recover the securities from the borrower on demand. In the event of default or bankruptcy by the borrower, the Fund may be prevented from recovering the loaned securities or gaining access to the collateral or may experience delays or costs in doing so. In such an event, the terms of the agreement allow the unaffiliated securities lending agent to use the
28 | Allspring Disciplined Small Cap Fund
Notes to financial statements
collateral to purchase replacement securities on behalf of the Fund or pay the Fund the market value of the loaned securities. The Fund bears the risk of loss with respect to depreciation of its investment of the cash collateral.
Futures contracts
Futures contracts are agreements between the Fund and a counterparty to buy or sell a specific amount of a commodity, financial instrument or currency at a specified price on a specified date. The Fund may buy and sell futures contracts in order to gain exposure to, or protect against, changes in security values and is subject to equity price risk. The primary risks associated with the use of futures contracts are the imperfect correlation between changes in market values of securities held by the Fund and the prices of futures contracts, and the possibility of an illiquid market. Futures contracts are generally entered into on a regulated futures exchange and cleared through a clearinghouse associated with the exchange. With futures contracts, there is minimal counterparty risk to the Fund since futures contracts are exchange-traded and the exchange’s clearinghouse, as the counterparty to all exchange-traded futures, guarantees the futures contracts against default.
Upon entering into a futures contract, the Fund is required to deposit either cash or securities (initial margin) with the broker in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are paid to or from the broker each day equal to the daily changes in the contract value. Such payments are recorded as unrealized gains or losses and, if any, shown as variation margin receivable (payable) in the Statement of Assets and Liabilities. Should the Fund fail to make requested variation margin payments, the broker can gain access to the initial margin to satisfy the Fund’s payment obligations. When the contracts are closed, a realized gain or loss is recorded in the Statement of Operations.
Security transactions and income recognition
Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.
Dividend income is recognized on the ex-dividend date. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.
Distributions to shareholders
Distributions to shareholders from net investment income and any net realized gains are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund's fiscal year end. Therefore, a portion of the Fund's distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
Federal and other taxes
The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.
The Fund’s income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. Management has analyzed the Fund's tax positions taken on federal, state, and foreign tax returns, as applicable, for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
As of March 31, 2023, the aggregate cost of all investments for federal income tax purposes was $14,910,046 and the unrealized gains (losses) consisted of:
| Gross unrealized gains | $ 3,427,313 |
| Gross unrealized losses | (1,673,208) |
| Net unrealized gains | $ 1,754,105 |
Class allocations
The separate classes of shares offered by the Fund differ principally in applicable sales charges, shareholder servicing and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.
Allspring Disciplined Small Cap Fund | 29
Notes to financial statements
3. FAIR VALUATION MEASUREMENTS
Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
| ■ | Level 1 – quoted prices in active markets for identical securities |
| ■ | Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) |
| ■ | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of March 31, 2023:
| Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
| Assets | ||||
| Investments in: | ||||
| Common stocks | ||||
| Communication services | $ 420,596 | $0 | $0 | $ 420,596 |
| Consumer discretionary | 1,943,412 | 0 | 0 | 1,943,412 |
| Consumer staples | 661,462 | 0 | 0 | 661,462 |
| Energy | 1,100,525 | 0 | 0 | 1,100,525 |
| Financials | 2,503,353 | 0 | 0 | 2,503,353 |
| Health care | 2,653,383 | 0 | 0 | 2,653,383 |
| Industrials | 2,791,855 | 0 | 0 | 2,791,855 |
| Information technology | 2,205,177 | 0 | 0 | 2,205,177 |
| Materials | 665,336 | 0 | 0 | 665,336 |
| Real estate | 871,775 | 0 | 0 | 871,775 |
| Utilities | 546,596 | 0 | 0 | 546,596 |
| Rights | ||||
| Health care | 0 | 0 | 0 | 0 |
| Short-term investments | ||||
| Investment companies | 292,998 | 0 | 0 | 292,998 |
| 16,656,468 | 0 | 0 | 16,656,468 | |
| Futures contracts | 7,683 | 0 | 0 | 7,683 |
| Total assets | $16,664,151 | $0 | $0 | $16,664,151 |
Futures contracts are reported at their cumulative unrealized gains (losses) at measurement date as reported in the table following the Portfolio of Investments. For futures contracts, the current day’s variation margin is reported on the Statement of Assets and Liabilities. All other assets and liabilities are reported at their market value at measurement date.
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the year ended March 31, 2023, the Fund did not have any transfers into/out of Level 3.
4. TRANSACTIONS WITH AFFILIATES
Management fee
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment
30 | Allspring Disciplined Small Cap Fund
Notes to financial statements
management agreement, Allspring Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Allspring Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:
| Average daily net assets | Management fee |
| First $1 billion | 0.500% |
| Next $4 billion | 0.475 |
| Next $5 billion | 0.440 |
| Over $10 billion | 0.430 |
For the year ended March 31, 2023, the management fee was equivalent to an annual rate of 0.50% of the Fund’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Investments is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.35% and declining to 0.25% as the average daily net assets of the Fund increase.
Administration fees
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:
| Class-level administration fee | |
| Class A | 0.21% |
| Class R6 | 0.03 |
| Administrator Class | 0.13 |
| Institutional Class | 0.13 |
Waivers and/or expense reimbursements
Allspring Funds Management has contractually committed to waive and/or reimburse management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Allspring Funds Management will waive fees and/or reimburse expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Allspring Funds Management has contractually committed through July 31, 2023 to waive fees and/or reimburse expenses to the extent necessary to cap expenses. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. As of March 31, 2023, the contractual expense caps are as follows:
| Expense ratio caps | |
| Class A | 0.93% |
| Class R6 | 0.50 |
| Administrator Class | 0.85 |
| Institutional Class | 0.60 |
Allspring Disciplined Small Cap Fund | 31
Notes to financial statements
Sales charges
Allspring Funds Distributor, LLC ("Allspring Funds Distributor"), an affiliate of Allspring Funds Management, the principal underwriter, is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Allspring Funds Distributor did not receive any front-end or contingent deferred sales charges from Class A shares for the year ended March 31, 2023.
Shareholder servicing fees
The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A and Administrator Class are charged a fee at an annual rate up to 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of the Fund.
Interfund transactions
The Fund may purchase or sell portfolio investment securities to certain affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices.
5. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the year ended March 31, 2023 were $9,386,713 and $13,346,555, respectively.
6. DERIVATIVE TRANSACTIONS
During the year ended March 31, 2023, the Fund entered into futures contracts for economic hedging purposes. The Fund had an average notional amount of $389,749 in long futures contracts during the year ended March 31, 2023.
The fair value, realized gains or losses and change in unrealized gains or losses, if any, on derivative instruments are reflected in the corresponding financial statement captions.
7. BANK BORROWINGS
The Trust (excluding the money market funds), Allspring Master Trust and Allspring Variable Trust are parties to a $350,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the Fund based on a borrowing rate equal to the higher of the Federal Funds rate or the overnight bank funding rate in effect on that day plus a spread. In addition, an annual commitment fee based on the unused balance is allocated to each participating fund.
For the year ended March 31, 2023, there were no borrowings by the Fund under the agreement.
8. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid during the years ended March 31, 2023 and March 31, 2022 were as follows:
| Year ended March 31 | ||
| 2023 | 2022 | |
| Ordinary income | $35,189 | $45,315 |
| Long-term capital gain | 9,341 | 0 |
As of March 31, 2023, the components of distributable earnings on a tax basis were as follows:
| Undistributed ordinary income | Undistributed long-term gain | Unrealized gains |
| $92,605 | $1,057,113 | $1,754,105 |
9. INDEMNIFICATION
Under the Fund's organizational documents, the officers and Trustees have been granted certain indemnification rights against certain liabilities that may arise out of performance of their duties to the Fund. The Fund has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Fund’s organizational
32 | Allspring Disciplined Small Cap Fund
Notes to financial statements
documents into contractual rights that cannot be changed in the future without the consent of the Trustee. Additionally, in the normal course of business, the Fund may enter into contracts with service providers that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.
Allspring Disciplined Small Cap Fund | 33
Report of independent registered public accounting firm
To the Shareholders of the Fund and Board of Trustees
Allspring Funds Trust:
Allspring Funds Trust:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Allspring Disciplined Small Cap Fund (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of March 31, 2023, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years or periods in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of March 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of March 31, 2023, by correspondence with the custodian, transfer agent and brokers, or by other appropriate auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have not been able to determine the specific year that we began serving as the auditor of one or more Allspring Funds investment companies; however, we are aware that we have served as the auditor of one or more Allspring Funds investment companies since at least 1955.
Boston, Massachusetts
May 25, 2023
34 | Allspring Disciplined Small Cap Fund
Other information (unaudited)
TAX INFORMATION
For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 100% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended March 31, 2023.
Pursuant to Section 852 of the Internal Revenue Code, $9,341 was designated as a 20% rate gain distribution for the fiscal year ended March 31, 2023.
Pursuant to Section 854 of the Internal Revenue Code, $35,189 of income dividends paid during the fiscal year ended March 31, 2023 has been designated as qualified dividend income (QDI).
For the fiscal year ended March 31, 2023, $3,740 has been designated as interest-related dividends for nonresident alien shareholders pursuant to Section 871 of the Internal Revenue Code.
PROXY VOTING INFORMATION
A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our website at allspringglobal.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at allspringglobal.com or by visiting the SEC website at sec.gov.
QUARTERLY PORTFOLIO HOLDINGS INFORMATION
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
Allspring Disciplined Small Cap Fund | 35
Other information (unaudited)
BOARD OF TRUSTEES AND OFFICERS
Each of the Trustees and Officers listed in the table below acts in identical capacities for each fund in the Allspring family of funds, which consists of 127 mutual funds comprising the Allspring Funds Trust, Allspring Variable Trust, Allspring Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information1. The mailing address of each Trustee and Officer is 1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203. Each Trustee and Officer serves an indefinite term, however, each Trustee serves such term until reaching the mandatory retirement age established by the Trustees.
Independent Trustees
| Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
| William R. Ebsworth (Born 1957) | Trustee, since 2015 | Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Foundation (non-profit organization). Mr. Ebsworth is a CFA® charterholder. | N/A |
| Jane A. Freeman (Born 1953) | Trustee, since 2015; Chair Liaison, since 2018 | Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is also an inactive Chartered Financial Analyst. | N/A |
| Isaiah Harris, Jr. (Born 1952) | Trustee, since 2009; Audit Committee Chair, since 2019 | Retired. Member of the Advisory Board of CEF of East Central Florida. Chairman of the Board of CIGNA Corporation from 2009 to 2021, and Director from 2005 to 2008. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Fellowship of Christian Athletes. Mr. Harris is a certified public accountant (inactive status). | N/A |
| David F. Larcker (Born 1950) | Trustee, since 2009 | Distinguished Visiting Fellow at the Hoover Institution since 2022. James Irvin Miller Professor of Accounting at the Graduate School of Business (Emeritus), Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. | N/A |
36 | Allspring Disciplined Small Cap Fund
Other information (unaudited)
| Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
| Olivia S. Mitchell (Born 1953) | Trustee, since 2006; Nominating and Governance Committee Chair, since 2018 | International Foundation of Employee Benefit Plans Professor since 1993, Wharton School of the University of Pennsylvania. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously taught at Cornell University from 1978 to 1993. | N/A |
| Timothy J. Penny (Born 1951) | Trustee, since 1996; Chair, since 2018 | President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Vice Chair of the Economic Club of Minnesota, since 2007. Co-Chair of the Committee for a Responsible Federal Budget, since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, from 2007-2022. Senior Fellow of the University of Minnesota Humphrey Institute from 1995 to 2017. | N/A |
| James G. Polisson (Born 1959) | Trustee, since 2018 | Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations. | N/A |
| Pamela Wheelock (Born 1959) | Trustee, since January 2020; previously Trustee from January 2018 to July 2019 | Retired. Executive and Senior Financial leadership positions in the public, private and nonprofit sectors. Interim President and CEO, McKnight Foundation, 2020. Interim Commissioner, Minnesota Department of Human Services, 2019. Chief Operating Officer, Twin Cities Habitat for Humanity, 2017-2019. Vice President for University Services, University of Minnesota, 2012-2016. Interim President and CEO, Blue Cross and Blue Shield of Minnesota, 2011-2012. Executive Vice-President and Chief Financial Officer, Minnesota Wild, 2002-2008. Commissioner, Minnesota Department of Finance, 1999-2002. Chair of the Board of Directors of Destination Medical Center Corporation. Board member of the Minnesota Wild Foundation. | N/A |
* Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.
Allspring Disciplined Small Cap Fund | 37
Other information (unaudited)
Officers2
| Name and year of birth | Position held and length of service | Principal occupations during past five years or longer |
| Andrew Owen (Born 1960) | President, since 2017 | President and Chief Executive Officer of Allspring Funds Management, LLC since 2017 and Head of Global Fund Governance of Allspring Global Investments since 2022. Prior thereto, co-president of Galliard Capital Management, LLC, an affiliate of Allspring Funds Management, LLC, from 2019 to 2022 and Head of Affiliated Managers, Allspring Global Investments, from 2014 to 2019 and Executive Vice President responsible for marketing, investments and product development for Allspring Funds Management, LLC, from 2009 to 2014. |
| Jeremy DePalma (Born 1974) | Treasurer, since 2012 (for certain funds in the Fund Complex); since 2021 (for the remaining funds in the Fund Complex) | Senior Vice President of Allspring Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010. |
| Christopher Baker (Born 1976) | Chief Compliance Officer, since 2022 | Global Chief Compliance Officer for Allspring Global Investments since 2022. Prior thereto, Chief Compliance Officer for State Street Global Advisors from 2018 to 2021. Senior Compliance Officer for the State Street divisions of Alternative Investment Solutions, Sector Solutions, and Global Marketing from 2015 to 2018. From 2010 to 2015 Vice President, Global Head of Investment and Marketing Compliance for State Street Global Advisors. |
| Matthew Prasse (Born 1983) | Chief Legal Officer, since 2022; Secretary, since 2021 | Senior Counsel of the Allspring Legal Department since 2021. Senior Counsel of the Wells Fargo Legal Department from 2018 to 2021. Previously, Counsel for Barings LLC from 2015 to 2018. Prior to joining Barings, Associate at Morgan, Lewis & Bockius LLP from 2008 to 2015. |
1 The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at allspringglobal.com.
2 For those Officers with tenures at Allspring Global Investments and/or Allspring Funds Management, LLC that began prior to 2021, such tenures include years of service during which these businesses/entities were known as Wells Fargo Asset Management and Wells Fargo Funds Management, LLC, respectively.
38 | Allspring Disciplined Small Cap Fund
For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Fund's website, or call:
Allspring Funds
P.O. Box 219967
Kansas City, MO 64121-9967
P.O. Box 219967
Kansas City, MO 64121-9967
Website: allspringglobal.com
Individual investors: 1-800-222-8222
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-800-260-5969
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call
1-800-222-8222 or visit the Fund's website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
1-800-222-8222 or visit the Fund's website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
Allspring Global InvestmentsTM is the trade name for the asset management firms of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management, LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind - including a recommendation for any specific investment, strategy, or plan.
© 2023 Allspring Global Investments Holdings, LLC. All rights reserved.
ALL-04052023-oupsjjdq 05-23
AR4335 03-23
AR4335 03-23
Annual Report
March 31, 2023
Allspring
Discovery Small Cap Growth Fund
Discovery Small Cap Growth Fund
Contents
| 2 | |
| 6 | |
| 10 | |
| 11 | |
| Financial statements | |
| 15 | |
| 16 | |
| 17 | |
| 18 | |
| 23 | |
| 29 | |
| 30 |
The views expressed and any forward-looking statements are as of March 31, 2023, unless otherwise noted, and are those of the Fund's portfolio managers and/or Allspring Global Investments. Discussions of individual securities or the markets generally are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Allspring Global Investments disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.
Allspring Discovery Small Cap Growth Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Discovery Small Cap Growth Fund for the 12-month period that ended March 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. Earlier tailwinds provided by global stimulus programs, vaccination rollouts, and recovering consumer and corporate sentiment were wiped away by the highest rate of inflation in four decades as well as the impact of ongoing aggressive central bank rate hikes and the prospect of more rate hikes. Compounding these concerns were the global reverberations of the Russia-Ukraine war and the impact of China’s strict COVID-19 lockdowns, which were removed in December.
For the 12-month period, stocks and bonds––both domestic U.S. and global––suffered broad losses. For the period, U.S. stocks, based on the S&P 500 Index,1 returned -7.73%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned -5.07%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a decline of 10.70%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -4.78%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 10.72%, the Bloomberg Municipal Bond Index6 gained 0.26%, and the ICE BofA U.S. High Yield Index7 fell 3.50%.
High inflation and central bank rate hikes rocked markets.
In April 2022, market headwinds created by Russia’s invasion of Ukraine in February continued, with broad and deep losses as both the S&P 500 and MSCI ACWI (Net)8 fell 8% or more for the month and commodity shortages added to global inflation. The Chinese economy struggled through a strict lockdown as the government tried to contain a major COVID-19 outbreak. The ensuing global ripple effect compounded existing supply shortages. Meanwhile, U.S. annual inflation raged at 8.5%, its highest level since 1981, and investors braced themselves for aggressive Federal Reserve (Fed) monetary tightening moves.
Market volatility continued in May, although markets recovered ground late in the month. Value stocks continued to outperform growth stocks. The concerns that had dominated markets for months continued, including high inflation and geopolitical tensions that added to high crude oil, gasoline, and food prices. In response, the Fed raised the federal funds rate by 0.50%. Meanwhile, highly contagious COVID-19 variants persisted. However, labor markets in the U.S., the U.K., and Europe remained strong. U.S. retail sales increased for the fourth consecutive month in April—a sign of consumer resilience.
“ In April 2022, market headwinds created by Russia’s invasion of Ukraine in February continued, with broad and deep losses as both the S&P 500 Index and MSCI All Country World Index fell 8% or more for the month and commodity shortages added to global inflation.”
| 1 | The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock's weight in the index proportionate to its market value. You cannot invest directly in an index. |
| 2 | The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding the U.S. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. You cannot invest directly in an index. |
| 3 | The MSCI Emerging Markets (EM) Index (Net) (USD) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index. |
| 4 | The Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S.-dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index. |
| 5 | The Bloomberg Global Aggregate ex-USD Index (unhedged) is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S.-dollar-denominated debt market. You cannot invest directly in an index. |
| 6 | The Bloomberg Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index. |
| 7 | The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2023. ICE Data Indices, LLC. All rights reserved. |
| 8 | The MSCI ACWI (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets. You cannot invest directly in an index. |
2 | Allspring Discovery Small Cap Growth Fund
Letter to shareholders (unaudited)
In June, stocks posted further losses en route to their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were the familiar factors: rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Fed raised its short-term rate by another 0.75% in June. Meanwhile, the U.S. unemployment rate held firm at 3.6% and the housing market remained only marginally affected by sharply higher mortgage rates.
Markets rebounded in July, led by U.S. stocks. While U.S. economic activity showed signs of waning, the country’s labor market remained surprisingly strong: July nonfarm payrolls grew by more than 500,000 and U.S. unemployment dipped to 3.5%. Meanwhile, crude oil and retail gasoline prices, major contributors to recent overall inflation, fell substantially from earlier highs. And while U.S. home prices rose, home sales fell as houses became less affordable with mortgage rates at a 13-year high. The Fed raised the federal funds rate another 0.75% in July—to a range of 2.25% to 2.50%—and forecasts pointed to further rate hikes.
August was yet another broadly challenging month for financial markets, with more red ink flowing. High inflation persisted, cresting 9% in the eurozone on an annual basis and remaining above 8% in the U.S. despite the Fed’s aggressive monetary policy and a major drop in global crude oil and gasoline prices from their June peak. One positive note was the resilient U.S. job market. However, the Fed’s job was clearly not complete. One longer-term bright spot was the U.S. Congress’s passage of the Inflation Reduction Act. Its primary stated goals include: to reduce inflation (though not immediately) by curbing the deficit, capping health care spending by seniors, and investing in domestic sources of clean energy.
The market misery continued in September as all asset classes suffered major losses. Central banks kept up their battle against rapidly rising prices with more rate hikes. The strength of the U.S. dollar weighed on results for investors holding non-U.S.-dollar assets. U.S. mortgage rates jumped to near 7% on 30-year fixed-rate mortgages; the decreased housing affordability began to cool demand somewhat. The U.K. experienced a sharp sell-off of government bonds and the British pound in September as investors panicked in response to a new government budget that was seen as financially unsound. The Bank of England (BoE) then stepped in and bought long-dated government bonds.
Equities had a reprieve in October. Value stocks and small caps fared best. Globally, developed markets outpaced emerging market equities, which were hurt by weakness among Chinese stocks. Central banks continued to try to curtail high inflation with aggressive interest rate hikes. Geopolitical risks persisted, including the ongoing Russia-Ukraine war and economic, financial market, and political turmoil in the U.K. Concerns over Europe’s energy crisis eased thanks to unseasonably warm weather and plentiful gas on hand. The U.S. labor market continued its resilience against rising prices as unemployment remained near a record low.
Stocks and bonds rallied in November. Economic news was encouraging, driven by U.S. labor market strength. Although central banks kept raising rates, hopes rose for an easing in the pace of rate hikes and a possible end to central bank monetary tightening in 2023. Although inflation remained at record highs in the eurozone, we began to see signs of a possible decline in inflationary pressures as U.S. inflation moderated, with a 7.1% annual price rise in November and a monthly price increase of just 0.1%. China’s economic data remained weak, reflecting its zero-COVID-19 policy.
Financial markets cooled in December, with U.S. equities posting negative overall results in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever with flat overall monthly returns as markets weighed the hopes for an end to the monetary tightening cycle with the reality that central banks had not completed their jobs yet. U.S. Consumer Price Index (CPI)1 data showed a strong consistent trend downward, which brought down the 12-month CPI to 6.5% in December from 9.1% in June. Other countries and regions reported still-high but declining inflation rates as the year winded down.
“ In June, stocks posted further losses en route to their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were the familiar factors: rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation.”
| 1 | The U.S. Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. You cannot invest directly in an index. |
Allspring Discovery Small Cap Growth Fund | 3
Letter to shareholders (unaudited)
The year 2023 began with a rally across global equities and fixed income securities. Investor optimism rose in response to data indicating declining inflation rates and the reopening of China’s economy with the abrupt end to its zero-COVID-19 policy. The U.S. reported surprisingly strong job gains––employers added more than 500,000 jobs––and unemployment fell to 3.4%, the lowest level since 1969. Meanwhile, wage growth, seen as a potential contributor to ongoing high inflation, continued to moderate. All eyes remained fixed on the Fed and on how many more rate hikes remain in this tightening cycle. The 0.25% federal funds rate hike announced in January was the Fed’s smallest rate increase since March 2022.
Financial markets declined in February as investors responded unfavorably to resilient economic data. The takeaway: Central banks will likely continue their monetary tightening cycle for longer than markets had priced in. In this environment—where strong economic data is seen as bad news—the resilient U.S. labor market was seen as a negative while the inflation rate has not been falling quickly enough for the Fed, which raised interest rates by 0.25% in early February. Meanwhile, the BoE and the European Central Bank both raised rates by 0.50%.
The collapse of Silicon Valley Bank in March, the second-largest banking failure in U.S. history, led to a classic bank run that spread to Europe, where Switzerland’s Credit Suisse was taken over by its rival, UBS. The sudden banking industry uncertainty led some clients of regional banks to transfer deposits to a handful of U.S. banking giants while bank shareholders sold stock. The banking industry turmoil could make the job of central banks more challenging as they weigh inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. The U.S. labor market remained resilient. The euro-area composite Purchasing Managers’ Index1 rose to 53.70, indicating expansion, for March. And China’s economy continued to rebound after the removal of its COVID-19 lockdown. Inflation rates in the U.S., the U.K., and Europe all remained higher than central bank targets, leading to additional rate hikes in March.
Don’t let short-term uncertainty derail long-term investment goals.
Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Allspring Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.
Thank you for choosing to invest with Allspring Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.
Sincerely,
Andrew Owen
President
Allspring Funds
President
Allspring Funds
For further information about your fund, contact your investment professional, visit our website at allspringglobal.com, or call us directly at 1-800-222-8222.
| 1 | The Purchasing Managers' Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. You cannot invest directly in an index. |
4 | Allspring Discovery Small Cap Growth Fund
Performance highlights (unaudited)
| Investment objective | The Fund seeks long-term capital appreciation. |
| Manager | Allspring Funds Management, LLC |
| Subadviser | Allspring Global Investments, LLC |
| Portfolio managers | Michael T. Smith, CFA, Christopher J. Warner, CFA |
| Average annual total returns (%) as of March 31, 2023 | |||||||||||
| Including sales charge | Excluding sales charge | Expense ratios1 (%) | |||||||||
| Inception date | 1 year | 5 year | 10 year | 1 year | 5 year | 10 year | Gross | Net 2 | |||
| Class A (EGWAX) | 6-5-1995 | -22.30 | 5.82 | 8.19 | -17.58 | 7.07 | 8.83 | 1.44 | 1.23 | ||
| Class C (EGWCX) | 7-30-2010 | -19.25 | 6.30 | 8.20 | -18.25 | 6.30 | 8.20 | 2.19 | 1.98 | ||
| Class R6 (EGWRX)3 | 5-29-2020 | – | – | – | -17.28 | 7.48 | 9.23 | 1.01 | 0.80 | ||
| Administrator Class (EGWDX) | 7-30-2010 | – | – | – | -17.39 | 7.45 | 9.12 | 1.36 | 1.15 | ||
| Institutional Class (EGRYX) | 11-19-1997 | – | – | – | -17.37 | 7.42 | 9.20 | 1.11 | 0.90 | ||
| Russell 2000® Growth Index4 | – | – | – | – | -10.60 | 4.26 | 8.49 | – | – | ||
Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on an investment in a fund. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, allspringglobal.com.
Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.
For Class A shares, the maximum front-end sales charge is 5.75%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Class R6, Administrator Class and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.
| 1 | Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report. |
| 2 | The manager has contractually committed through July 31, 2023, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 1.23% for Class A, 1.98% for Class C, 0.80% for Class R6, 1.15% for Administrator Class, and 0.90% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense caps. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. Without these caps, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses. |
| 3 | Historical performance shown for the Class R6 shares prior to their inception reflects the performance of the Institutional Class shares, and includes the higher expenses applicable to the Institutional Class shares. If these expenses had not been included, returns for the Class R6 shares would be higher. |
| 4 | The Russell 2000® Growth Index measures the performance of those Russell 2000 companies with higher price/book ratios and higher forecasted growth values. You cannot invest directly in an index. |
Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Smaller-company stocks tend to be more volatile and less liquid than those of larger companies. Consult the Fund’s prospectus for additional information on these and other risks.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
6 | Allspring Discovery Small Cap Growth Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of March 31, 20231
| 1 | The chart compares the performance of Class A shares for the most recent ten years with the Russell 2000® Growth Index. The chart assumes a hypothetical investment of $10,000 in Class A shares and reflects all operating expenses and assumes the maximum initial sales charge of 5.75%. |
Allspring Discovery Small Cap Growth Fund | 7
Performance highlights (unaudited)
MANAGER'S DISCUSSION
Fund highlights
| ■ | The Fund underperformed its benchmark, the Russell 2000® Growth Index, for the 12-month period that ended March 31, 2023. |
| ■ | Select holdings within the materials, health care, and information technology (IT) sectors detracted from performance. |
| ■ | Security selection within the consumer discretionary and industrials sectors contributed to the Fund’s performance. |
Inflation and monetary policy dominated market sentiment.
Over the past year, a continual stream of macro headlines created high volatility for investors. Market sentiment fluctuated as investors grappled with high inflation, tightening Federal Reserve (Fed) policy, supply chain disruptions, and the war in Ukraine. Amid this uncertainty, the dominant storyline was persistently high inflation as the headline year-over-year U.S. Consumer Price Index* reached the highest levels in more than 40 years. In response, the Fed monetary policy became hawkish and materially tightened financial conditions. The markets reacted swiftly and sharply. Volatility spiked over renewed concerns that the Fed may overshoot a soft landing, driving the economy into a recession. As a result, rising discount rates pressured valuations of long-duration growth stocks—those businesses with superior revenue growth projected years into the future. Additionally, investors rotated out of IT and e-commerce stocks due to concerns that a recession would reduce IT and consumer spending. For many companies with disruptive technologies, a disconnection emerged between stock prices and underlying fundamentals. By March 2023, multiple regional banks collapsed as depositors sought higher rates elsewhere. With the strain of the high rates beginning to weigh on the economy, investors shifted their focus to companies that exhibited profitability and resilient financial results.
Stock selection within the materials and IT sectors weighed on the Fund’s performance.
Within IT, BILL Holdings, Inc. (BILL), provides cloud-based software that enables small and medium-size businesses (SMBs) to digitize back-office functions. In return, BILL receives subscription fees and a portion of each transaction processed by its customers. This transactional revenue exposes BILL to the cyclicality of the underlying SMBs, which adversely affected BILL as economic concerns led many customers to reduce advertising and discretionary spending. Additionally, BILL’s new client growth slowed for the first time since becoming a public company. We are closely monitoring fundamentals. However, we believe BILL is still positioned to deliver superior growth for investors over time.
A detractor in materials, Ranpak Holdings Corp. (PACK) provides environmentally sustainable packaging materials for the e-commerce industry. Overall demand continues to grow for Ranpak products, but concerns over slowing e-commerce growth weighed on the share price. Additionally, the spike in energy costs and tight labor markets led Ranpak’s management team to reduce the company’s growth outlook. While we hold conviction in the adoption of environmentally sustainable solutions for e-commerce, near-term volatility may continue if profit margins remain compressed. We are closely monitoring fundamentals.
| Ten largest holdings (%) as of March 31, 20231 | |
| Casella Waste Systems Incorporated Class A | 2.81 |
| HealthEquity Incorporated | 2.73 |
| WNS Holdings Limited ADR | 2.63 |
| Wingstop Incorporated | 2.59 |
| Rexford Industrial Realty Incorporated | 2.57 |
| Tetra Tech Incorporated | 2.44 |
| Novanta Incorporated | 2.39 |
| Saia Incorporated | 2.24 |
| Keywords Studios plc | 2.04 |
| MGP Ingredients Incorporated | 2.02 |
| 1 | Figures represent the percentage of the Fund's net assets. Holdings are subject to change and may have changed since the date specified. |
Holdings within the consumer discretionary and industrials sectors contributed to the Fund’s performance.
A contributor within consumer discretionary, Wingstop, Inc. (WING), operates a global casual restaurant chain specializing in chicken wings and sauces. During the year, Wingstop reported strong same-store sales growth and expanding profit margins. With the vast majority of its restaurants owned by franchisees, Wingstop enjoys superior profitability compared with competitors. Over the past year, the company opened more than 200 locations, launched new menu items, joined Uber Eats, and increased advertising
| * | The U.S. Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. You cannot invest directly in an index. |
8 | Allspring Discovery Small Cap Growth Fund
Performance highlights (unaudited)
campaigns. With exceptional unit economics, Wingstop is well positioned for superior growth within the vast and highly fragmented restaurant industry.
Axon Enterprise, Inc. (AXON), a contributor within industrials, manufactures cameras, software, and devices for law enforcement. By providing smart devices that back up to the cloud, Axon is using technology to improve the safety and transparency of law enforcement. Previously, Axon operated under a legacy “bill and ship” model, where hardware sales were large but infrequent. This led to lumpy and less predictable financial results. Over time, the company shifted to a subscription model for both hardware and software, creating a steady stream of revenue. During the year, Axon reported strong growth across most segments and improved margins within software. Additionally, the company is on track to release upgraded hardware, which typically leads to an upgrade cycle from customers. With a growing international client base and expanding product lineup, Axon is poised for strong future results.
| Sector allocation as of March 31, 20231 |
| 1 | Figures represent the percentage of the Fund's long-term investments. Allocations are subject to change and may have changed since the date specified. |
The growth of a business remains our north star.
As fundamentals become a key return driver later in the business cycle, we see opportunity for growth stocks relative to cyclical businesses with greater exposure to the weakening economy. Estimates for S&P 500 Index* earnings growth in 2023 have begun to decline, which is an indication that policy tightening is starting to flow through to the real economy. As growth expectations compress downward, companies that can grow organically through a rough economic patch are harder to find. We believe this is a rather compelling case for investing in growth equities. Relative valuations of growth stocks compared with the broad market are near their long-term average and, in our view, have likely completed the bulk of their de-rating in this cycle.
Despite our bullishness for growth stocks, the range of outcomes for the economy remains very wide in 2023. Events from the past quarter—easing inflation, the banking crisis, shifting rate expectations—have created tailwinds for our investing style, but it is still important to be mindful of risks. As a result, we remain selective and favor companies with durable fundamentals and a higher certainty of meeting expectations. Furthermore, we have diligently continued to adjust portfolio construction. Exposure to idiosyncratic and resilient “core” growth holdings has increased while we maintain a balanced exposure to higher-growth “developing situations.”
Over the long term, we believe the growth of an underlying business is the dominant driver of equity returns and is the guiding principle of our investment philosophy. Therefore, we are of the opinion that the fundamental growth of our portfolios will be unlocked and reward the patience of our shareholders with strong future performance.
| * | The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock's weight in the index proportionate to its market value. You cannot invest directly in an index. |
Allspring Discovery Small Cap Growth Fund | 9
Fund expenses (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period from October 1, 2022 to March 31, 2023.
Actual expenses
The “Actual” line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Actual” line under the heading entitled “Expenses paid during period” for your applicable class of shares to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The “Hypothetical” line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) and contingent deferred sales charges. Therefore, the “Hypothetical” line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning account value 10-1-2022 | Ending account value 3-31-2023 | Expenses paid during the period1 | Annualized net expense ratio | |
| Class A | ||||
| Actual | $1,000.00 | $1,080.93 | $ 6.38 | 1.23% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.80 | $ 6.19 | 1.23% |
| Class C | ||||
| Actual | $1,000.00 | $1,077.14 | $10.25 | 1.98% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,015.06 | $ 9.95 | 1.98% |
| Class R6 | ||||
| Actual | $1,000.00 | $1,083.27 | $ 4.16 | 0.80% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.94 | $ 4.03 | 0.80% |
| Administrator Class | ||||
| Actual | $1,000.00 | $1,081.29 | $ 5.97 | 1.15% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.20 | $ 5.79 | 1.15% |
| Institutional Class | ||||
| Actual | $1,000.00 | $1,082.82 | $ 4.67 | 0.90% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.44 | $ 4.53 | 0.90% |
1 Expenses paid is equal to the annualized net expense ratio of each class multiplied by the average account value over the period, multiplied by 182 divided by 365 (to reflect the one-half-year period).
10 | Allspring Discovery Small Cap Growth Fund
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Common stocks: 96.79% | |||||
| Communication services: 2.09% | |||||
| Interactive media & services: 2.09% | |||||
| Bumble Incorporated Class A † | 36,016 | $ 704,113 | |||
| IAC/InterActiveCorp † | 31,869 | 1,644,440 | |||
| 2,348,553 | |||||
| Consumer discretionary: 8.73% | |||||
| Broadline retail: 1.11% | |||||
| Global-E Online Limited † | 38,887 | 1,253,328 | |||
| Hotels, restaurants & leisure: 4.41% | |||||
| Papa John's International Incorporated | 27,291 | 2,044,915 | |||
| Wingstop Incorporated | 15,870 | 2,913,415 | |||
| 4,958,330 | |||||
| Leisure products: 3.21% | |||||
| Callaway Golf Company † | 61,853 | 1,337,262 | |||
| Games Workshop Group plc | 19,033 | 2,267,036 | |||
| 3,604,298 | |||||
| Consumer staples: 5.23% | |||||
| Beverages: 2.02% | |||||
| MGP Ingredients Incorporated | 23,527 | 2,275,531 | |||
| Personal care products: 3.21% | |||||
| Bellring Brands Incorporated † | 61,299 | 2,084,166 | |||
| Coty Incorporated Class A † | 126,427 | 1,524,710 | |||
| 3,608,876 | |||||
| Financials: 3.47% | |||||
| Capital markets: 1.72% | |||||
| Morningstar Incorporated | 6,866 | 1,394,004 | |||
| Open Lending Corporation Class A † | 76,108 | 535,800 | |||
| 1,929,804 | |||||
| Financial services: 1.75% | |||||
| Shift4 Payments Incorporated Class A † | 25,991 | 1,970,118 | |||
| Health care: 25.99% | |||||
| Biotechnology: 4.63% | |||||
| Apellis Pharmaceuticals Incorporated † | 10,628 | 701,023 | |||
| Ascendis Pharma AS ADR † | 8,224 | 881,777 | |||
| CRISPR Therapeutics AG † | 7,430 | 336,059 | |||
| Geron Corporation † | 110,093 | 238,902 | |||
| Halozyme Therapeutics Incorporated † | 33,263 | 1,270,314 | |||
| Mirati Therapeutics Incorporated † | 5,700 | 211,926 | |||
| Natera Incorporated † | 14,903 | 827,415 | |||
| TG Therapeutics Incorporated † | 31,635 | 475,790 | |||
| Zentalis Pharmaceuticals Incorporated † | 15,363 | 264,244 | |||
| 5,207,450 |
The accompanying notes are an integral part of these financial statements.
Allspring Discovery Small Cap Growth Fund | 11
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Health care equipment & supplies: 13.31% | |||||
| Axonics Incorporated † | 16,722 | $ 912,352 | |||
| Establishment Labs Holdings Incorporated † | 8,059 | 545,917 | |||
| ICU Medical Incorporated † | 7,352 | 1,212,786 | |||
| Inari Medical Incorporated † | 18,252 | 1,126,878 | |||
| Inspire Medical Systems Incorporated † | 8,090 | 1,893,626 | |||
| iRhythm Technologies Incorporated † | 15,836 | 1,964,139 | |||
| Lantheus Holdings Incorporated † | 21,964 | 1,813,348 | |||
| Shockwave Medical Incorporated † | 6,171 | 1,338,058 | |||
| TransMedics Group Incorporated † | 14,204 | 1,075,669 | |||
| Treace Medical Concepts Incorporated † | 69,784 | 1,757,859 | |||
| UFP Technologies Incorporated † | 10,214 | 1,326,186 | |||
| 14,966,818 | |||||
| Health care providers & services: 4.60% | |||||
| HealthEquity Incorporated † | 52,394 | 3,076,048 | |||
| Option Care Health Incorporated † | 66,214 | 2,103,619 | |||
| 5,179,667 | |||||
| Life sciences tools & services: 3.08% | |||||
| Azenta Incorporated † | 20,996 | 936,842 | |||
| MaxCyte Incorporated † | 152,850 | 756,608 | |||
| Stevanato Group SpA | 68,203 | 1,766,458 | |||
| 3,459,908 | |||||
| Pharmaceuticals: 0.37% | |||||
| Arvinas Incorporated † | 15,422 | 421,329 | |||
| Industrials: 22.26% | |||||
| Aerospace & defense: 1.25% | |||||
| Axon Enterprise Incorporated † | 6,280 | 1,412,058 | |||
| Building products: 1.80% | |||||
| Advanced Drainage Systems Incorporated | 12,566 | 1,058,183 | |||
| Trex Company Incorporated † | 19,779 | 962,644 | |||
| 2,020,827 | |||||
| Commercial services & supplies: 5.25% | |||||
| Casella Waste Systems Incorporated Class A † | 38,226 | 3,159,761 | |||
| Tetra Tech Incorporated | 18,715 | 2,749,421 | |||
| 5,909,182 | |||||
| Electrical equipment: 2.32% | |||||
| Allied Motion Technologies | 40,131 | 1,551,063 | |||
| Shoals Technologies Group Class A † | 46,524 | 1,060,282 | |||
| 2,611,345 | |||||
| Ground transportation: 2.24% | |||||
| Saia Incorporated † | 9,258 | 2,518,917 | |||
| Machinery: 1.61% | |||||
| RBC Bearings Incorporated † | 7,770 | 1,808,312 | |||
| Professional services: 5.59% | |||||
| FTI Consulting Incorporated † | 8,117 | 1,601,890 |
The accompanying notes are an integral part of these financial statements.
12 | Allspring Discovery Small Cap Growth Fund
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Professional services (continued) | |||||
| ICF International Incorporated | 15,757 | $ 1,728,543 | |||
| WNS Holdings Limited ADR † | 31,705 | 2,953,955 | |||
| 6,284,388 | |||||
| Trading companies & distributors: 2.20% | |||||
| SiteOne Landscape Supply Incorporated † | 14,564 | 1,993,375 | |||
| Xometry Incorporated Class A † | 32,022 | 479,369 | |||
| 2,472,744 | |||||
| Information technology: 23.39% | |||||
| Electronic equipment, instruments & components: 5.66% | |||||
| Littelfuse Incorporated | 8,024 | 2,151,154 | |||
| Nayax Limited † | 41,887 | 711,038 | |||
| Nlight Incorporated † | 80,042 | 814,828 | |||
| Novanta Incorporated † | 16,879 | 2,685,280 | |||
| 6,362,300 | |||||
| IT services: 4.04% | |||||
| Endava plc ADR † | 18,328 | 1,231,275 | |||
| Keywords Studios plc | 67,498 | 2,296,462 | |||
| StoneCo Limited Class A † | 106,905 | 1,019,874 | |||
| 4,547,611 | |||||
| Semiconductors & semiconductor equipment: 4.63% | |||||
| Impinj Incorporated † | 14,340 | 1,943,357 | |||
| Indie Semiconductor Incorporated † | 92,903 | 980,127 | |||
| Lattice Semiconductor Corporation † | 12,295 | 1,174,173 | |||
| Sitime Corporation † | 7,806 | 1,110,247 | |||
| 5,207,904 | |||||
| Software: 9.06% | |||||
| BILL Holdings Incorporated † | 11,535 | 935,950 | |||
| CCC Intelligent Solutions † | 98,527 | 883,787 | |||
| Clearwater Analytics Holdings Incorporated Class A † | 51,891 | 828,180 | |||
| CS Disco Incorporated † | 45,033 | 299,019 | |||
| Gitlab Incorporated Class A † | 21,182 | 726,331 | |||
| Jamf Holding Corporation † | 43,695 | 848,557 | |||
| Olo Incorporated Class A † | 133,153 | 1,086,528 | |||
| Pagerduty Incorporated † | 34,391 | 1,202,997 | |||
| Sprout Social Incorporated Class A † | 26,458 | 1,610,763 | |||
| Workiva Incorporated † | 17,333 | 1,775,073 | |||
| 10,197,185 | |||||
| Materials: 2.13% | |||||
| Chemicals: 0.29% | |||||
| Aspen Aerogels Incorporated † | 44,285 | 329,923 | |||
| Containers & packaging: 0.68% | |||||
| Ranpak Holdings Corporation † | 146,299 | 763,681 | |||
| Metals & mining: 1.16% | |||||
| Allegheny Technologies Incorporated † | 32,963 | 1,300,720 |
The accompanying notes are an integral part of these financial statements.
Allspring Discovery Small Cap Growth Fund | 13
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Real estate: 3.50% | |||||
| Industrial REITs: 2.57% | |||||
| Rexford Industrial Realty Incorporated | 48,473 | $ 2,891,414 | |||
| Real estate management & development: 0.93% | |||||
| DigitalBridge Group Incorporated | 87,159 | 1,045,036 | |||
| Total Common stocks (Cost $102,338,344) | 108,867,557 |
| Yield | |||||
| Short-term investments: 3.45% | |||||
| Investment companies: 3.45% | |||||
| Allspring Government Money Market Fund Select Class ♠∞ | 4.69% | 3,883,609 | 3,883,609 | ||
| Total Short-term investments (Cost $3,883,609) | 3,883,609 | ||||
| Total investments in securities (Cost $106,221,953) | 100.24% | 112,751,166 | |||
| Other assets and liabilities, net | (0.24) | (266,210) | |||
| Total net assets | 100.00% | $112,484,956 |
| † | Non-income-earning security |
| ♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
| ∞ | The rate represents the 7-day annualized yield at period end. |
| Abbreviations: | |
| ADR | American depositary receipt |
| REIT | Real estate investment trust |
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
| Value, beginning of period | Purchases | Sales proceeds | Net realized gains (losses) | Net change in unrealized gains (losses) | Value, end of period | Shares, end of period | Income from affiliated securities | |||
| Short-term investments | ||||||||||
| Allspring Government Money Market Fund Select Class | $1,852,545 | $35,924,199 | $(33,893,135) | $ 0 | $0 | $ 3,883,609 | 3,883,609 | $ 109,845 | ||
| Investments in affiliates no longer held at end of period | ||||||||||
| Securities Lending Cash Investments LLC | 5,055,425 | 39,409,635 | (44,464,947) | (113) | 0 | 0 | 0 | 82,288 # | ||
| $ (113) | $0 | $3,883,609 | $192,133 | |||||||
| # | Amount shown represents income before fees and rebates. |
The accompanying notes are an integral part of these financial statements.
14 | Allspring Discovery Small Cap Growth Fund
Statement of assets and liabilities—March 31, 2023
| Assets | |
Investments in unaffiliated securities, at value (cost $102,338,344) | $ 108,867,557 |
Investments in affiliated securities, at value (cost $3,883,609) | 3,883,609 |
Cash | 15 |
Foreign currency, at value (cost $376) | 350 |
Receivable for dividends | 39,761 |
Receivable for Fund shares sold | 21,900 |
Prepaid expenses and other assets | 61,494 |
Total assets | 112,874,686 |
| Liabilities | |
Payable for investments purchased | 157,560 |
Payable for Fund shares redeemed | 119,083 |
Management fee payable | 64,828 |
Administration fees payable | 18,126 |
Trustees’ fees and expenses payable | 1,537 |
Distribution fee payable | 303 |
Accrued expenses and other liabilities | 28,293 |
Total liabilities | 389,730 |
Total net assets | $112,484,956 |
| Net assets consist of | |
Paid-in capital | $ 127,284,008 |
Total distributable loss | (14,799,052) |
Total net assets | $112,484,956 |
| Computation of net asset value and offering price per share | |
Net assets – Class A | $ 73,660,357 |
Shares outstanding – Class A1 | 6,526,421 |
Net asset value per share – Class A | $11.29 |
Maximum offering price per share – Class A2 | $11.98 |
Net assets – Class C | $ 433,252 |
Shares outstanding – Class C1 | 48,797 |
Net asset value per share – Class C | $8.88 |
Net assets – Class R6 | $ 1,611,677 |
Shares outstanding – Class R61 | 109,250 |
Net asset value per share – Class R6 | $14.75 |
Net assets – Administrator Class | $ 351,794 |
Shares outstanding – Administrator Class1 | 24,839 |
Net asset value per share – Administrator Class | $14.16 |
Net assets – Institutional Class | $ 36,427,876 |
Shares outstanding – Institutional Class1 | 2,477,514 |
Net asset value per share – Institutional Class | $14.70 |
| 1 | The Fund has an unlimited number of authorized shares. |
| 2 | Maximum offering price is computed as 100/94.25 of net asset value. On investments of $50,000 or more, the offering price is reduced. |
The accompanying notes are an integral part of these financial statements.
Allspring Discovery Small Cap Growth Fund | 15
Statement of operations—year ended March 31, 2023
| Investment income | |
Dividends (net of foreign withholdings taxes of $2,609) | $ 277,529 |
Income from affiliated securities | 125,751 |
Total investment income | 403,280 |
| Expenses | |
Management fee | 961,831 |
| Administration fees | |
Class A | 163,603 |
Class C | 1,068 |
Class R6 | 609 |
Administrator Class | 468 |
Institutional Class | 42,056 |
| Shareholder servicing fees | |
Class A | 194,766 |
Class C | 1,197 |
Administrator Class | 900 |
| Distribution fee | |
Class C | 3,495 |
Custody and accounting fees | 23,332 |
Professional fees | 57,261 |
Registration fees | 69,994 |
Shareholder report expenses | 46,958 |
Trustees’ fees and expenses | 20,175 |
Other fees and expenses | 11,248 |
Total expenses | 1,598,961 |
| Less: Fee waivers and/or expense reimbursements | |
Fund-level | (318,951) |
Class A | (890) |
Class R6 | (202) |
Net expenses | 1,278,918 |
Net investment loss | (875,638) |
| Realized and unrealized gains (losses) on investments | |
| Net realized losses on | |
Unaffiliated securities | (20,669,751) |
Affiliated securities | (113) |
Net realized losses on investments | (20,669,864) |
Net change in unrealized gains (losses) on investments | (2,931,845) |
Net realized and unrealized gains (losses) on investments | (23,601,709) |
Net decrease in net assets resulting from operations | $(24,477,347) |
The accompanying notes are an integral part of these financial statements.
16 | Allspring Discovery Small Cap Growth Fund
Statement of changes in net assets
| Year ended March 31, 2023 | Year ended March 31, 2022 | |||
| Operations | ||||
Net investment loss | $ (875,638) | $ (1,646,546) | ||
Net realized gains (losses) on investments | (20,669,864) | 19,377,472 | ||
Net change in unrealized gains (losses) on investments | (2,931,845) | (48,630,162) | ||
Net decrease in net assets resulting from operations | (24,477,347) | (30,899,236) | ||
| Distributions to shareholders from | ||||
| Net investment income and net realized gains | ||||
Class A | (5,519,827) | (20,423,584) | ||
Class C | (45,155) | (219,886) | ||
Class R6 | (108,808) | (261,203) | ||
Administrator Class | (20,581) | (73,953) | ||
Institutional Class | (1,746,787) | (5,596,005) | ||
Total distributions to shareholders | (7,441,158) | (26,574,631) | ||
| Capital share transactions | Shares | Shares | ||
| Proceeds from shares sold | ||||
Class A | 171,589 | 1,959,895 | 332,425 | 6,683,479 |
Class C | 3,700 | 35,148 | 9,338 | 159,600 |
Class R6 | 97,894 | 1,465,007 | 101,634 | 2,520,991 |
Administrator Class | 5,272 | 76,430 | 19,749 | 478,478 |
Institutional Class | 981,253 | 14,156,439 | 1,426,944 | 36,296,515 |
| 17,692,919 | 46,139,063 | |||
| Reinvestment of distributions | ||||
Class A | 500,006 | 5,395,069 | 1,111,624 | 20,009,223 |
Class C | 5,306 | 45,155 | 15,071 | 219,886 |
Class R6 | 7,722 | 108,808 | 11,367 | 261,203 |
Administrator Class | 1,465 | 19,840 | 3,223 | 71,474 |
Institutional Class | 124,264 | 1,744,660 | 243,402 | 5,583,641 |
| 7,313,532 | 26,145,427 | |||
| Payment for shares redeemed | ||||
Class A | (970,262) | (11,385,102) | (833,733) | (16,092,697) |
Class C | (26,378) | (253,923) | (45,052) | (778,561) |
Class R6 | (110,816) | (1,602,419) | (15,802) | (375,226) |
Administrator Class | (9,494) | (148,800) | (10,679) | (239,024) |
Institutional Class | (581,429) | (8,777,481) | (452,264) | (10,422,365) |
| (22,167,725) | (27,907,873) | |||
Net increase in net assets resulting from capital share transactions | 2,838,726 | 44,376,617 | ||
Total decrease in net assets | (29,079,779) | (13,097,250) | ||
| Net assets | ||||
Beginning of period | 141,564,735 | 154,661,985 | ||
End of period | $112,484,956 | $141,564,735 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Discovery Small Cap Growth Fund | 17
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $14.82 | $21.39 | $11.00 | $13.28 | $15.32 |
Net investment loss | (0.10) 1 | (0.21) 1 | (0.18) 1 | (0.10) 1 | (0.11) 1 |
Net realized and unrealized gains (losses) on investments | (2.55) | (2.94) | 11.09 | (1.27) | 2.17 |
Total from investment operations | (2.65) | (3.15) | 10.91 | (1.37) | 2.06 |
| Distributions to shareholders from | |||||
Net realized gains | (0.88) | (3.42) | (0.52) | (0.91) | (4.10) |
Net asset value, end of period | $11.29 | $14.82 | $21.39 | $11.00 | $13.28 |
Total return2 | (17.58)% | (17.57)% | 99.31% | (11.52)% | 17.46% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.51% | 1.44% | 1.47% | 1.52% | 1.51% |
Net expenses | 1.23% | 1.23% | 1.23% | 1.23% | 1.23% |
Net investment loss | (0.88)% | (1.03)% | (0.99)% | (0.74)% | (0.74)% |
| Supplemental data | |||||
Portfolio turnover rate | 44% | 55% | 55% | 63% | 155% |
Net assets, end of period (000s omitted) | $73,660 | $101,163 | $132,937 | $66,472 | $86,006 |
| 1 | Calculated based upon average shares outstanding |
| 2 | Total return calculations do not include any sales charges. |
The accompanying notes are an integral part of these financial statements.
18 | Allspring Discovery Small Cap Growth Fund
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $11.99 | $18.08 | $9.39 | $11.55 | $13.94 |
Net investment loss | (0.15) 1 | (0.31) 1 | (0.28) 1 | (0.18) 1 | (0.20) 1 |
Payment from affiliate | 0.00 | 0.00 | 0.01 | 0.00 | 0.00 |
Net realized and unrealized gains (losses) on investments | (2.08) | (2.36) | 9.48 | (1.07) | 1.91 |
Total from investment operations | (2.23) | (2.67) | 9.21 | (1.25) | 1.71 |
| Distributions to shareholders from | |||||
Net realized gains | (0.88) | (3.42) | (0.52) | (0.91) | (4.10) |
Net asset value, end of period | $8.88 | $11.99 | $18.08 | $9.39 | $11.55 |
Total return2 | (18.25)% | (18.16)% | 98.22% 3 | (12.30)% | 16.69% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 2.18% | 2.18% | 2.20% | 2.26% | 2.26% |
Net expenses | 1.97% | 1.98% | 1.98% | 1.98% | 1.98% |
Net investment loss | (1.62)% | (1.79)% | (1.74)% | (1.49)% | (1.48)% |
| Supplemental data | |||||
Portfolio turnover rate | 44% | 55% | 55% | 63% | 155% |
Net assets, end of period (000s omitted) | $433 | $793 | $1,569 | $395 | $349 |
| 1 | Calculated based upon average shares outstanding |
| 2 | Total return calculations do not include any sales charges. |
| 3 | During the year ended March 31, 2021, the Fund received a payment from an affiliate which had an impact of 0.09% on the total return. |
The accompanying notes are an integral part of these financial statements.
Allspring Discovery Small Cap Growth Fund | 19
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||
| Class R6 | 2023 | 2022 | 2021 1 |
Net asset value, beginning of period | $18.95 | $26.29 | $17.87 |
Net investment loss | (0.07) 2 | (0.14) 2 | (0.11) 2 |
Net realized and unrealized gains (losses) on investments | (3.25) | (3.78) | 9.05 |
Total from investment operations | (3.32) | (3.92) | 8.94 |
| Distributions to shareholders from | |||
Net realized gains | (0.88) | (3.42) | (0.52) |
Net asset value, end of period | $14.75 | $18.95 | $26.29 |
Total return3 | (17.28)% | (17.21)% | 50.11% |
| Ratios to average net assets (annualized) | |||
Gross expenses | 1.09% | 1.02% | 1.03% |
Net expenses | 0.80% | 0.80% | 0.80% |
Net investment loss | (0.45)% | (0.58)% | (0.54)% |
| Supplemental data | |||
Portfolio turnover rate | 44% | 55% | 55% |
Net assets, end of period (000s omitted) | $1,612 | $2,169 | $454 |
| 1 | For the period from May 29, 2020 (commencement of class operations) to March 31, 2021 |
| 2 | Calculated based upon average shares outstanding |
| 3 | Returns for periods of less than one year are not annualized. |
The accompanying notes are an integral part of these financial statements.
20 | Allspring Discovery Small Cap Growth Fund
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $18.26 | $25.54 | $12.91 | $15.43 | $17.14 |
Net investment loss | (0.12) 1 | (0.22) 1 | (0.20) 1 | (0.11) 1 | (0.11) 1 |
Payment from affiliate | 0.00 | 0.00 | 0.11 | 0.00 | 0.00 |
Net realized and unrealized gains (losses) on investments | (3.10) | (3.64) | 13.24 | (1.50) | 2.50 |
Total from investment operations | (3.22) | (3.86) | 13.15 | (1.61) | 2.39 |
| Distributions to shareholders from | |||||
Net realized gains | (0.88) | (3.42) | (0.52) | (0.91) | (4.10) |
Net asset value, end of period | $14.16 | $18.26 | $25.54 | $12.91 | $15.43 |
Total return | (17.39)% 2 | (17.49)% | 101.97% 3 | (11.52)% | 17.59% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.43% | 1.37% | 1.39% | 1.44% | 1.43% |
Net expenses | 1.15% | 1.15% | 1.15% | 1.15% | 1.15% |
Net investment loss | (0.79)% | (0.95)% | (0.90)% | (0.66)% | (0.62)% |
| Supplemental data | |||||
Portfolio turnover rate | 44% | 55% | 55% | 63% | 155% |
Net assets, end of period (000s omitted) | $352 | $504 | $391 | $93 | $104 |
| 1 | Calculated based upon average shares outstanding |
| 2 | During the year ended March 31, 2023, the Fund received payments from a service provider which had a 0.18% impact on the total return. |
| 3 | During the year ended March 31, 2021, the Fund received a payment from an affiliate which had an impact of 0.89% on the total return. |
The accompanying notes are an integral part of these financial statements.
Allspring Discovery Small Cap Growth Fund | 21
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Institutional Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $18.91 | $26.26 | $13.39 | $15.94 | $17.53 |
Net investment loss | (0.08) 1 | (0.17) 1 | (0.15) 1 | (0.07) 1 | (0.07) 1 |
Net realized and unrealized gains (losses) on investments | (3.25) | (3.76) | 13.54 | (1.57) | 2.58 |
Total from investment operations | (3.33) | (3.93) | 13.39 | (1.64) | 2.51 |
| Distributions to shareholders from | |||||
Net realized gains | (0.88) | (3.42) | (0.52) | (0.91) | (4.10) |
Net asset value, end of period | $14.70 | $18.91 | $26.26 | $13.39 | $15.94 |
Total return | (17.37)% | (17.27)% | 100.11% | (11.29)% | 17.85% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.18% | 1.12% | 1.14% | 1.19% | 1.18% |
Net expenses | 0.90% | 0.90% | 0.90% | 0.90% | 0.90% |
Net investment loss | (0.53)% | (0.69)% | (0.66)% | (0.41)% | (0.41)% |
| Supplemental data | |||||
Portfolio turnover rate | 44% | 55% | 55% | 63% | 155% |
Net assets, end of period (000s omitted) | $36,428 | $36,936 | $19,311 | $7,980 | $9,695 |
| 1 | Calculated based upon average shares outstanding |
The accompanying notes are an integral part of these financial statements.
22 | Allspring Discovery Small Cap Growth Fund
Notes to financial statements
1. ORGANIZATION
Allspring Funds Trust (the "Trust"), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Allspring Discovery Small Cap Growth Fund (the "Fund") which is a diversified series of the Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Securities valuation
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.
The values of securities denominated in foreign currencies are translated into U.S. dollars at rates provided by an independent foreign currency pricing source at a time each business day specified by the Valuation Committee established by Allspring Funds Management, LLC ("Allspring Funds Management").
Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore may not fully reflect trading or events that occur after the close of the principal exchange in which the foreign securities are traded, but before the close of the New York Stock Exchange. If such trading or events are expected to materially affect the value of such securities, then fair value pricing procedures implemented by Allspring Funds Management are applied. These procedures take into account multiple factors including movements in U.S. securities markets after foreign exchanges close. Foreign securities that are fair valued under these procedures are categorized as Level 2 and the application of these procedures may result in transfers between Level 1 and Level 2. Depending on market activity, such fair valuations may be frequent. Such fair value pricing may result in net asset values that are higher or lower than net asset values based on the last reported sales price or latest quoted bid price. On March 31, 2023, such fair value pricing was used in pricing certain foreign securities.
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value. Interests in non-registered investment companies that are redeemable at net asset value are fair valued normally at net asset value.
Investments which are not valued using the methods discussed above are valued at their fair value, as determined in good faith by Allspring Funds Management, which was named the valuation designee by the Board of Trustees. As the valuation designee, Allspring Funds Management is responsible for day-to-day valuation activities for the Allspring Funds. In connection with these responsibilities, Allspring Funds Management has established a Valuation Committee and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities. On a quarterly basis, the Board of Trustees receives reports of valuation actions taken by the Valuation Committee. On at least an annual basis, the Board of Trustees receives an assessment of the adequacy and effectiveness of Allspring Funds Management's process for determining the fair value of the portfolio of investments.
Foreign currency translation
The accounting records of the Fund are maintained in U.S. dollars. The values of other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at rates provided by an independent foreign currency pricing source at a time each business day specified by the Valuation Committee. Purchases and sales of securities, and income and expenses are converted at the rate of exchange on the respective dates of such transactions. Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and liabilities other than investments in securities resulting from changes in exchange rates.
Allspring Discovery Small Cap Growth Fund | 23
Notes to financial statements
The changes in net assets arising from changes in exchange rates of securities and the changes in net assets resulting from changes in market prices of securities are not separately presented. Such changes are included in net realized and unrealized gains or losses from investments.
Securities lending
During the period, the Fund participated in a program to lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. When securities were on loan, the Fund received interest or dividends on those securities. Cash collateral received in connection with its securities lending transactions was invested in Securities Lending Cash Investments, LLC (the "Securities Lending Fund"), an affiliated non-registered investment company. Effective at the close of business on March 29, 2023, the Fund is no longer participating in the securities lending program and the Securities Lending Fund was liquidated. Securities Lending Fund was managed by Allspring Funds Management and was subadvised by Allspring Global Investments, LLC ("Allspring Investments"), an affiliate of Allspring Funds Management and wholly owned subsidiary of Allspring Global Investments Holdings, LLC. Allspring Funds Management received an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Securities Lending Fund increased. All of the fees received by Allspring Funds Management were paid to Allspring Investments for its services as subadviser.
Investments in Securities Lending Fund were valued at the evaluated bid price provided by an independent pricing service. Income earned from investment in the Securities Lending Fund (net of fees and rebates), if any, is included in income from affiliated securities on the Statement of Operations.
In a securities lending transaction, the net asset value of the Fund is affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of the instrument in which collateral is invested. The amount of securities lending activity undertaken by the Fund fluctuates from time to time. The Fund has the right under the lending agreement to recover the securities from the borrower on demand. In the event of default or bankruptcy by the borrower, the Fund may be prevented from recovering the loaned securities or gaining access to the collateral or may experience delays or costs in doing so. In such an event, the terms of the agreement allow the unaffiliated securities lending agent to use the collateral to purchase replacement securities on behalf of the Fund or pay the Fund the market value of the loaned securities. The Fund bears the risk of loss with respect to depreciation of its investment of the cash collateral.
Security transactions and income recognition
Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.
Dividend income is recognized on the ex-dividend date, except for certain dividends from foreign securities, which are recorded as soon as the custodian verifies the ex-dividend date. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.
Distributions to shareholders
Distributions to shareholders from net investment income and any net realized gains are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund's fiscal year end. Therefore, a portion of the Fund's distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
Federal and other taxes
The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.
The Fund’s income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. Management has analyzed the Fund's tax positions taken on federal, state, and foreign tax returns, as applicable, for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
24 | Allspring Discovery Small Cap Growth Fund
Notes to financial statements
As of March 31, 2023, the aggregate cost of all investments for federal income tax purposes was $107,178,150 and the unrealized gains (losses) consisted of:
| Gross unrealized gains | $ 27,839,926 |
| Gross unrealized losses | (22,266,910) |
| Net unrealized gains | $ 5,573,016 |
Reclassifications are made to the Fund’s capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carryforwards) under federal income tax regulations. U.S. generally accepted accounting principles require that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The primary permanent difference causing such reclassification is due to net operating loss. At March 31, 2023, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statement of Assets and Liabilities:
| Paid-in capital | Total distributable loss |
| $(971,705) | $971,705 |
As of March 31, 2023, the Fund had capital loss carryforwards which consisted of $7,261,788 in short-term capital losses and $12,910,097 in long-term capital losses.
As of March 31, 2023, the Fund had a qualified late-year ordinary loss of $192,067 which will be recognized on the first day of the following fiscal year.
Class allocations
The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.
3. FAIR VALUATION MEASUREMENTS
Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
| ■ | Level 1 – quoted prices in active markets for identical securities |
| ■ | Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) |
| ■ | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
Allspring Discovery Small Cap Growth Fund | 25
Notes to financial statements
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of March 31, 2023:
| Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
| Assets | ||||
| Investments in: | ||||
| Common stocks | ||||
| Communication services | $ 2,348,553 | $ 0 | $0 | $ 2,348,553 |
| Consumer discretionary | 7,548,920 | 2,267,036 | 0 | 9,815,956 |
| Consumer staples | 5,884,407 | 0 | 0 | 5,884,407 |
| Financials | 3,899,922 | 0 | 0 | 3,899,922 |
| Health care | 29,235,172 | 0 | 0 | 29,235,172 |
| Industrials | 25,037,773 | 0 | 0 | 25,037,773 |
| Information technology | 25,603,962 | 711,038 | 0 | 26,315,000 |
| Materials | 2,394,324 | 0 | 0 | 2,394,324 |
| Real estate | 3,936,450 | 0 | 0 | 3,936,450 |
| Short-term investments | ||||
| Investment companies | 3,883,609 | 0 | 0 | 3,883,609 |
| Total assets | $109,773,092 | $2,978,074 | $0 | $112,751,166 |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the year ended March 31, 2023, the Fund did not have any transfers into/out of Level 3.
4. TRANSACTIONS WITH AFFILIATES
Management fee
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Allspring Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Allspring Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:
| Average daily net assets | Management fee |
| First $500 million | 0.850% |
| Next $500 million | 0.825 |
| Next $1 billion | 0.800 |
| Next $1 billion | 0.775 |
| Next $1 billion | 0.750 |
| Next $1 billion | 0.730 |
| Next $5 billion | 0.720 |
| Over $10 billion | 0.710 |
For the year ended March 31, 2023, the management fee was equivalent to an annual rate of 0.85% of the Fund’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Investments is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.55% and declining to 0.40% as the average daily net assets of the Fund increase.
26 | Allspring Discovery Small Cap Growth Fund
Notes to financial statements
Administration fees
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:
| Class-level administration fee | |
| Class A | 0.21% |
| Class C | 0.21 |
| Class R6 | 0.03 |
| Administrator Class | 0.13 |
| Institutional Class | 0.13 |
Waivers and/or expense reimbursements
Allspring Funds Management has contractually committed to waive and/or reimburse management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Allspring Funds Management will waive fees and/or reimburse expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Allspring Funds Management has contractually committed through July 31, 2023 to waive fees and/or reimburse expenses to the extent necessary to cap expenses. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. As of March 31, 2023, the contractual expense caps are as follows:
| Expense ratio caps | |
| Class A | 1.23% |
| Class C | 1.98 |
| Class R6 | 0.80 |
| Administrator Class | 1.15 |
| Institutional Class | 0.90 |
Distribution fee
The Trust has adopted a distribution plan for Class C shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Allspring Funds Distributor, LLC ("Allspring Funds Distributor"), the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.75% of the average daily net assets of Class C shares.
In addition, Allspring Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Allspring Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the year ended March 31, 2023, Allspring Funds Distributor received $215 from the sale of Class A shares. No contingent deferred sales charges were incurred by Class A and Class C shares for the year ended March 31, 2023.
Shareholder servicing fees
The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A, Class C and Administrator Class are charged a fee at an annual rate up to 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of the Fund.
Interfund transactions
The Fund may purchase or sell portfolio investment securities to certain affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices.
Allspring Discovery Small Cap Growth Fund | 27
Notes to financial statements
5. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the year ended March 31, 2023 were $48,507,086 and $55,397,113, respectively.
6. BANK BORROWINGS
The Trust (excluding the money market funds), Allspring Master Trust and Allspring Variable Trust are parties to a $350,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the Fund based on a borrowing rate equal to the higher of the Federal Funds rate or the overnight bank funding rate in effect on that day plus a spread. In addition, an annual commitment fee based on the unused balance is allocated to each participating fund.
For the year ended March 31, 2023, there were no borrowings by the Fund under the agreement.
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid during the years ended March 31, 2023 and March 31, 2022 were as follows:
| Year ended March 31 | ||
| 2023 | 2022 | |
| Ordinary income | $ 0 | $ 3,018,902 |
| Long-term capital gain | 7,441,158 | 23,555,729 |
As of March 31, 2023, the components of distributable earnings on a tax basis were as follows:
| Unrealized gains | Late-year ordinary losses deferred | Capital loss carryforward |
| $5,572,962 | $(192,067) | $(20,171,885) |
8. CONCENTRATION RISKS
As of the end of the period, the Fund concentrated its portfolio of investments in the health care and information technology sectors. A fund that invests a substantial portion of its assets in any sector may be more affected by changes in that sector than would be a fund whose investments are not heavily weighted in any sector.
9. INDEMNIFICATION
Under the Fund's organizational documents, the officers and Trustees have been granted certain indemnification rights against certain liabilities that may arise out of performance of their duties to the Fund. The Fund has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Fund’s organizational documents into contractual rights that cannot be changed in the future without the consent of the Trustee. Additionally, in the normal course of business, the Fund may enter into contracts with service providers that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.
28 | Allspring Discovery Small Cap Growth Fund
Report of independent registered public accounting firm
To the Shareholders of the Fund and Board of Trustees
Allspring Funds Trust:
Allspring Funds Trust:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Allspring Discovery Small Cap Growth Fund (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of March 31, 2023, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years or periods in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of March 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of March 31, 2023, by correspondence with the custodian, transfer agent and brokers, or by other appropriate auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have not been able to determine the specific year that we began serving as the auditor of one or more Allspring Funds investment companies; however, we are aware that we have served as the auditor of one or more Allspring Funds investment companies since at least 1955.
Boston, Massachusetts
May 25, 2023
Allspring Discovery Small Cap Growth Fund | 29
Other information (unaudited)
TAX INFORMATION
Pursuant to Section 852 of the Internal Revenue Code, $7,441,158 was designated as a 20% rate gain distribution for the fiscal year ended March 31, 2023.
PROXY VOTING INFORMATION
A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our website at allspringglobal.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at allspringglobal.com or by visiting the SEC website at sec.gov.
QUARTERLY PORTFOLIO HOLDINGS INFORMATION
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
30 | Allspring Discovery Small Cap Growth Fund
Other information (unaudited)
BOARD OF TRUSTEES AND OFFICERS
Each of the Trustees and Officers listed in the table below acts in identical capacities for each fund in the Allspring family of funds, which consists of 127 mutual funds comprising the Allspring Funds Trust, Allspring Variable Trust, Allspring Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information1. The mailing address of each Trustee and Officer is 1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203. Each Trustee and Officer serves an indefinite term, however, each Trustee serves such term until reaching the mandatory retirement age established by the Trustees.
Independent Trustees
| Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
| William R. Ebsworth (Born 1957) | Trustee, since 2015 | Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Foundation (non-profit organization). Mr. Ebsworth is a CFA® charterholder. | N/A |
| Jane A. Freeman (Born 1953) | Trustee, since 2015; Chair Liaison, since 2018 | Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is also an inactive Chartered Financial Analyst. | N/A |
| Isaiah Harris, Jr. (Born 1952) | Trustee, since 2009; Audit Committee Chair, since 2019 | Retired. Member of the Advisory Board of CEF of East Central Florida. Chairman of the Board of CIGNA Corporation from 2009 to 2021, and Director from 2005 to 2008. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Fellowship of Christian Athletes. Mr. Harris is a certified public accountant (inactive status). | N/A |
| David F. Larcker (Born 1950) | Trustee, since 2009 | Distinguished Visiting Fellow at the Hoover Institution since 2022. James Irvin Miller Professor of Accounting at the Graduate School of Business (Emeritus), Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. | N/A |
Allspring Discovery Small Cap Growth Fund | 31
Other information (unaudited)
| Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
| Olivia S. Mitchell (Born 1953) | Trustee, since 2006; Nominating and Governance Committee Chair, since 2018 | International Foundation of Employee Benefit Plans Professor since 1993, Wharton School of the University of Pennsylvania. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously taught at Cornell University from 1978 to 1993. | N/A |
| Timothy J. Penny (Born 1951) | Trustee, since 1996; Chair, since 2018 | President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Vice Chair of the Economic Club of Minnesota, since 2007. Co-Chair of the Committee for a Responsible Federal Budget, since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, from 2007-2022. Senior Fellow of the University of Minnesota Humphrey Institute from 1995 to 2017. | N/A |
| James G. Polisson (Born 1959) | Trustee, since 2018 | Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations. | N/A |
| Pamela Wheelock (Born 1959) | Trustee, since January 2020; previously Trustee from January 2018 to July 2019 | Retired. Executive and Senior Financial leadership positions in the public, private and nonprofit sectors. Interim President and CEO, McKnight Foundation, 2020. Interim Commissioner, Minnesota Department of Human Services, 2019. Chief Operating Officer, Twin Cities Habitat for Humanity, 2017-2019. Vice President for University Services, University of Minnesota, 2012-2016. Interim President and CEO, Blue Cross and Blue Shield of Minnesota, 2011-2012. Executive Vice-President and Chief Financial Officer, Minnesota Wild, 2002-2008. Commissioner, Minnesota Department of Finance, 1999-2002. Chair of the Board of Directors of Destination Medical Center Corporation. Board member of the Minnesota Wild Foundation. | N/A |
* Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.
32 | Allspring Discovery Small Cap Growth Fund
Other information (unaudited)
Officers2
| Name and year of birth | Position held and length of service | Principal occupations during past five years or longer |
| Andrew Owen (Born 1960) | President, since 2017 | President and Chief Executive Officer of Allspring Funds Management, LLC since 2017 and Head of Global Fund Governance of Allspring Global Investments since 2022. Prior thereto, co-president of Galliard Capital Management, LLC, an affiliate of Allspring Funds Management, LLC, from 2019 to 2022 and Head of Affiliated Managers, Allspring Global Investments, from 2014 to 2019 and Executive Vice President responsible for marketing, investments and product development for Allspring Funds Management, LLC, from 2009 to 2014. |
| Jeremy DePalma (Born 1974) | Treasurer, since 2012 (for certain funds in the Fund Complex); since 2021 (for the remaining funds in the Fund Complex) | Senior Vice President of Allspring Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010. |
| Christopher Baker (Born 1976) | Chief Compliance Officer, since 2022 | Global Chief Compliance Officer for Allspring Global Investments since 2022. Prior thereto, Chief Compliance Officer for State Street Global Advisors from 2018 to 2021. Senior Compliance Officer for the State Street divisions of Alternative Investment Solutions, Sector Solutions, and Global Marketing from 2015 to 2018. From 2010 to 2015 Vice President, Global Head of Investment and Marketing Compliance for State Street Global Advisors. |
| Matthew Prasse (Born 1983) | Chief Legal Officer, since 2022; Secretary, since 2021 | Senior Counsel of the Allspring Legal Department since 2021. Senior Counsel of the Wells Fargo Legal Department from 2018 to 2021. Previously, Counsel for Barings LLC from 2015 to 2018. Prior to joining Barings, Associate at Morgan, Lewis & Bockius LLP from 2008 to 2015. |
1 The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at allspringglobal.com.
2 For those Officers with tenures at Allspring Global Investments and/or Allspring Funds Management, LLC that began prior to 2021, such tenures include years of service during which these businesses/entities were known as Wells Fargo Asset Management and Wells Fargo Funds Management, LLC, respectively.
Allspring Discovery Small Cap Growth Fund | 33
For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Fund's website, or call:
Allspring Funds
P.O. Box 219967
Kansas City, MO 64121-9967
P.O. Box 219967
Kansas City, MO 64121-9967
Website: allspringglobal.com
Individual investors: 1-800-222-8222
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-800-260-5969
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call
1-800-222-8222 or visit the Fund's website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
1-800-222-8222 or visit the Fund's website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
Allspring Global InvestmentsTM is the trade name for the asset management firms of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management, LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind - including a recommendation for any specific investment, strategy, or plan.
© 2023 Allspring Global Investments Holdings, LLC. All rights reserved.
ALL-04052023-vkqbepda 05-23
AR4308 03-23
AR4308 03-23
Annual Report
March 31, 2023
Allspring Small Cap Fund
Contents
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| 10 | |
| 11 | |
| Financial statements | |
| 16 | |
| 17 | |
| 18 | |
| 19 | |
| 24 | |
| 29 | |
| 30 |
The views expressed and any forward-looking statements are as of March 31, 2023, unless otherwise noted, and are those of the Fund's portfolio managers and/or Allspring Global Investments. Discussions of individual securities or the markets generally are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Allspring Global Investments disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.
Allspring Small Cap Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Small Cap Fund for the 12-month period that ended March 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. Earlier tailwinds provided by global stimulus programs, vaccination rollouts, and recovering consumer and corporate sentiment were wiped away by the highest rate of inflation in four decades as well as the impact of ongoing aggressive central bank rate hikes and the prospect of more rate hikes. Compounding these concerns were the global reverberations of the Russia-Ukraine war and the impact of China’s strict COVID-19 lockdowns, which were removed in December.
For the 12-month period, stocks and bonds––both domestic U.S. and global––suffered broad losses. For the period, U.S. stocks, based on the S&P 500 Index,1 returned -7.73%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned -5.07%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a decline of 10.70%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -4.78%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 10.72%, the Bloomberg Municipal Bond Index6 gained 0.26%, and the ICE BofA U.S. High Yield Index7 fell 3.50%.
High inflation and central bank rate hikes rocked markets.
In April 2022, market headwinds created by Russia’s invasion of Ukraine in February continued, with broad and deep losses as both the S&P 500 and MSCI ACWI (Net)8 fell 8% or more for the month and commodity shortages added to global inflation. The Chinese economy struggled through a strict lockdown as the government tried to contain a major COVID-19 outbreak. The ensuing global ripple effect compounded existing supply shortages. Meanwhile, U.S. annual inflation raged at 8.5%, its highest level since 1981, and investors braced themselves for aggressive Federal Reserve (Fed) monetary tightening moves.
Market volatility continued in May, although markets recovered ground late in the month. Value stocks continued to outperform growth stocks. The concerns that had dominated markets for months continued, including high inflation and geopolitical tensions that added to high crude oil, gasoline, and food prices. In response, the Fed raised the federal funds rate by 0.50%. Meanwhile, highly contagious COVID-19 variants persisted. However, labor markets in the U.S., the U.K., and Europe remained strong. U.S. retail sales increased for the fourth consecutive month in April—a sign of consumer resilience.
“ In April 2022, market headwinds created by Russia’s invasion of Ukraine in February continued, with broad and deep losses as both the S&P 500 Index and MSCI All Country World Index fell 8% or more for the month and commodity shortages added to global inflation.”
| 1 | The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock's weight in the index proportionate to its market value. You cannot invest directly in an index. |
| 2 | The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding the U.S. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. You cannot invest directly in an index. |
| 3 | The MSCI Emerging Markets (EM) Index (Net) (USD) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index. |
| 4 | The Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S.-dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index. |
| 5 | The Bloomberg Global Aggregate ex-USD Index (unhedged) is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S.-dollar-denominated debt market. You cannot invest directly in an index. |
| 6 | The Bloomberg Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index. |
| 7 | The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2023. ICE Data Indices, LLC. All rights reserved. |
| 8 | The MSCI ACWI (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets. You cannot invest directly in an index. |
2 | Allspring Small Cap Fund
Letter to shareholders (unaudited)
In June, stocks posted further losses en route to their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were the familiar factors: rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Fed raised its short-term rate by another 0.75% in June. Meanwhile, the U.S. unemployment rate held firm at 3.6% and the housing market remained only marginally affected by sharply higher mortgage rates.
Markets rebounded in July, led by U.S. stocks. While U.S. economic activity showed signs of waning, the country’s labor market remained surprisingly strong: July nonfarm payrolls grew by more than 500,000 and U.S. unemployment dipped to 3.5%. Meanwhile, crude oil and retail gasoline prices, major contributors to recent overall inflation, fell substantially from earlier highs. And while U.S. home prices rose, home sales fell as houses became less affordable with mortgage rates at a 13-year high. The Fed raised the federal funds rate another 0.75% in July—to a range of 2.25% to 2.50%—and forecasts pointed to further rate hikes.
August was yet another broadly challenging month for financial markets, with more red ink flowing. High inflation persisted, cresting 9% in the eurozone on an annual basis and remaining above 8% in the U.S. despite the Fed’s aggressive monetary policy and a major drop in global crude oil and gasoline prices from their June peak. One positive note was the resilient U.S. job market. However, the Fed’s job was clearly not complete. One longer-term bright spot was the U.S. Congress’s passage of the Inflation Reduction Act. Its primary stated goals include: to reduce inflation (though not immediately) by curbing the deficit, capping health care spending by seniors, and investing in domestic sources of clean energy.
The market misery continued in September as all asset classes suffered major losses. Central banks kept up their battle against rapidly rising prices with more rate hikes. The strength of the U.S. dollar weighed on results for investors holding non-U.S.-dollar assets. U.S. mortgage rates jumped to near 7% on 30-year fixed-rate mortgages; the decreased housing affordability began to cool demand somewhat. The U.K. experienced a sharp sell-off of government bonds and the British pound in September as investors panicked in response to a new government budget that was seen as financially unsound. The Bank of England (BoE) then stepped in and bought long-dated government bonds.
Equities had a reprieve in October. Value stocks and small caps fared best. Globally, developed markets outpaced emerging market equities, which were hurt by weakness among Chinese stocks. Central banks continued to try to curtail high inflation with aggressive interest rate hikes. Geopolitical risks persisted, including the ongoing Russia-Ukraine war and economic, financial market, and political turmoil in the U.K. Concerns over Europe’s energy crisis eased thanks to unseasonably warm weather and plentiful gas on hand. The U.S. labor market continued its resilience against rising prices as unemployment remained near a record low.
Stocks and bonds rallied in November. Economic news was encouraging, driven by U.S. labor market strength. Although central banks kept raising rates, hopes rose for an easing in the pace of rate hikes and a possible end to central bank monetary tightening in 2023. Although inflation remained at record highs in the eurozone, we began to see signs of a possible decline in inflationary pressures as U.S. inflation moderated, with a 7.1% annual price rise in November and a monthly price increase of just 0.1%. China’s economic data remained weak, reflecting its zero-COVID-19 policy.
Financial markets cooled in December, with U.S. equities posting negative overall results in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever with flat overall monthly returns as markets weighed the hopes for an end to the monetary tightening cycle with the reality that central banks had not completed their jobs yet. U.S. Consumer Price Index (CPI)1 data showed a strong consistent trend downward, which brought down the 12-month CPI to 6.5% in December from 9.1% in June. Other countries and regions reported still-high but declining inflation rates as the year winded down.
“ In June, stocks posted further losses en route to their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were the familiar factors: rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation.”
| 1 | The U.S. Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. You cannot invest directly in an index. |
Allspring Small Cap Fund | 3
Letter to shareholders (unaudited)
The year 2023 began with a rally across global equities and fixed income securities. Investor optimism rose in response to data indicating declining inflation rates and the reopening of China’s economy with the abrupt end to its zero-COVID-19 policy. The U.S. reported surprisingly strong job gains––employers added more than 500,000 jobs––and unemployment fell to 3.4%, the lowest level since 1969. Meanwhile, wage growth, seen as a potential contributor to ongoing high inflation, continued to moderate. All eyes remained fixed on the Fed and on how many more rate hikes remain in this tightening cycle. The 0.25% federal funds rate hike announced in January was the Fed’s smallest rate increase since March 2022.
Financial markets declined in February as investors responded unfavorably to resilient economic data. The takeaway: Central banks will likely continue their monetary tightening cycle for longer than markets had priced in. In this environment—where strong economic data is seen as bad news—the resilient U.S. labor market was seen as a negative while the inflation rate has not been falling quickly enough for the Fed, which raised interest rates by 0.25% in early February. Meanwhile, the BoE and the European Central Bank both raised rates by 0.50%.
The collapse of Silicon Valley Bank in March, the second-largest banking failure in U.S. history, led to a classic bank run that spread to Europe, where Switzerland’s Credit Suisse was taken over by its rival, UBS. The sudden banking industry uncertainty led some clients of regional banks to transfer deposits to a handful of U.S. banking giants while bank shareholders sold stock. The banking industry turmoil could make the job of central banks more challenging as they weigh inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. The U.S. labor market remained resilient. The euro-area composite Purchasing Managers’ Index1 rose to 53.70, indicating expansion, for March. And China’s economy continued to rebound after the removal of its COVID-19 lockdown. Inflation rates in the U.S., the U.K., and Europe all remained higher than central bank targets, leading to additional rate hikes in March.
Don’t let short-term uncertainty derail long-term investment goals.
Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Allspring Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.
Thank you for choosing to invest with Allspring Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.
Sincerely,
Andrew Owen
President
Allspring Funds
President
Allspring Funds
For further information about your fund, contact your investment professional, visit our website at allspringglobal.com, or call us directly at 1-800-222-8222.
| 1 | The Purchasing Managers' Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. You cannot invest directly in an index. |
4 | Allspring Small Cap Fund
Performance highlights (unaudited)
| Investment objective | The Fund seeks long-term capital appreciation. |
| Manager | Allspring Funds Management, LLC |
| Subadviser | Allspring Global Investments, LLC |
| Portfolio managers | Christopher G. Miller, CFA, Theran Motl, CFA |
| Average annual total returns (%) as of March 31, 2023 | |||||||||||
| Including sales charge | Excluding sales charge | Expense ratios1 (%) | |||||||||
| Inception date | 1 year | 5 year | 10 year | 1 year | 5 year | 10 year | Gross | Net 2 | |||
| Class A (WFSMX) | 3-31-2008 | -13.87 | 1.98 | 6.02 | -8.62 | 3.19 | 6.65 | 1.67 | 1.23 | ||
| Class C (WSCDX) | 3-31-2008 | -10.36 | 2.40 | 6.01 | -9.36 | 2.40 | 6.01 | 2.42 | 1.98 | ||
| Class R6 (WFSJX)3 | 5-29-2020 | – | – | – | -8.27 | 3.62 | 7.07 | 1.24 | 0.80 | ||
| Administrator Class (WFSDX) | 4-8-2005 | – | – | – | -8.56 | 3.30 | 6.81 | 1.59 | 1.15 | ||
| Institutional Class (WFSSX) | 4-8-2005 | – | – | – | -8.33 | 3.53 | 7.03 | 1.34 | 0.90 | ||
| Russell 2000® Index4 | – | – | – | – | -11.61 | 4.71 | 8.04 | – | – | ||
Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on an investment in a fund. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, allspringglobal.com.
Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.
For Class A shares, the maximum front-end sales charge is 5.75%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Class R6, Administrator Class and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.
| 1 | Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report. |
| 2 | The manager has contractually committed through July 31, 2023, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 1.23% for Class A, 1.98% for Class C, 0.80% for Class R6, 1.15% for Administrator Class, and 0.90% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense caps. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. Without these caps, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses. |
| 3 | Historical performance shown for the Class R6 shares prior to their inception reflects the performance of the Institutional Class shares, and includes the higher expenses applicable to the Institutional Class shares. If these expenses had not been included, returns for the Class R6 shares would be higher. |
| 4 | The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index, which represents approximately 8% of the total market capitalization of the Russell 3000® Index. You cannot invest directly in an index. |
Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Smaller company stocks tend to be more volatile and less liquid than those of larger companies. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). Consult the Fund’s prospectus for additional information on these and other risks.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
6 | Allspring Small Cap Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of March 31, 20231
| 1 | The chart compares the performance of Class A shares for the most recent ten years with the Russell 2000® Index. The chart assumes a hypothetical investment of $10,000 in Class A shares and reflects all operating expenses and assumes the maximum initial sales charge of 5.75%. |
Allspring Small Cap Fund | 7
Performance highlights (unaudited)
MANAGER'S DISCUSSION
Fund highlights
| ■ | The Fund outperformed its benchmark, the Russell 2000® Index, for the 12-month period that ended March 31, 2023. |
| ■ | Stocks within the consumer staples, industrials, and materials sectors served as contributors during the period. |
| ■ | Consumer discretionary and health care were relative detractors during the period. |
Frenetic markets prevailed throughout the period.
Equity markets fell sharply over the trailing 12 months, as sustained inflation, an unprecedented Federal Reserve (Fed) interest-rate-hiking cycle, constricting liquidity conditions, and the unwinding of COVID-19-era economic distortions pervaded investor sentiment. Late in the period, new worries surrounding the asset and liability duration mismatch of Silicon Valley Bank and many of its peers sent regional banks into a tailspin. This caused a flight to safety into money market funds and U.S. Treasuries as well as an acute style shift out of small-cap financials into mega-cap growth stocks.
Large- and mega-cap stocks have been dominant for more than a decade. As a result, small-cap stocks are trading at multi-decade relative-low valuations. We believe this dynamic is an attractive set-up for small-cap core style on a prospective basis. While we fully acknowledge that the path forward will not be linear, we feel that valuation-centric active management will be a critical component going forward.
The consumer staples, industrials, and materials sectors aided relative performance.
Within the consumer staples sector, e.l.f Beauty Inc.,* a cosmetics beauty company, rose sharply after delivering strong earnings results buoyed by robust demand from new customers. Offering quality products at attractive price points has enabled it to gain market share from legacy prestige brand competitors. Elsewhere within the Fund, Atkore, Inc., which manufactures framing and infrastructure components to support electrical systems, performed well after generating better-than-expected pricing and volume growth. We remain attracted to its business model and propensity to exceed earnings projections via pricing power and a favorable market position.
Consumer discretionary and health care detracted.
Within consumer discretionary, National Vision Holdings, Inc., one of the largest optical retailers in the U.S., careened lower
as cyclical pressures weighed on its lower-end customers. Despite the setback, we believe the company can deliver strong revenue growth and profit margin expansion as it leverages remote medicine and electronic health record capabilities going forward. Within the health care sector, medical device company LivaNova Plc. stock retraced following a deceleration in its epilepsy portfolio and the delay in the registry of a key clinical study. Despite the weakness, we believe that its epilepsy opportunity can yield steady revenue growth with the potential to inflect higher as the firm executes a new go-to-market strategy.
| Ten largest holdings (%) as of March 31, 20231 | |
| Atkore Incorporated | 3.45 |
| Masonite International Corporation | 2.63 |
| Ashland Global Holdings Incorporated | 2.20 |
| Integer Holdings Corporation | 2.20 |
| Reliance Steel & Aluminum Company | 2.11 |
| Pagerduty Incorporated | 2.11 |
| Olin Corporation | 1.95 |
| LivaNova plc | 1.94 |
| APi Group Corporation | 1.93 |
| Stericycle Incorporated | 1.89 |
| 1 | Figures represent the percentage of the Fund's net assets. Holdings are subject to change and may have changed since the date specified. |
Several companies were acquired, validating our process.
Several companies in the portfolio were acquired in the period. Some of the notable take-outs include merchant acquirer EVO Payments Inc., acquired by Global Payments; software-as a-service company Anaplan Inc., taken over by private equity firm, Thoma Bravo; and education technology company Houghton Mifflin Harcourt Co., purchased by Veritas. Most of these deals were transacted at valuations close to our private market valuations (PMVs). While we don’t seek out acquisition candidates, real-world transactions validate our investment process.
| * | This security was no longer held at the end of the reporting period. |
8 | Allspring Small Cap Fund
Performance highlights (unaudited)
| Sector allocation as of March 31, 20231 |
| 1 | Figures represent the percentage of the Fund's long-term investments. Allocations are subject to change and may have changed since the date specified. |
Although near-term economic growth is expected to decelerate, we remain optimistic.
Within the current backdrop of a global monetary tightening cycle and geopolitical tensions, we expect near-term economic growth to decelerate. This appears to be directionally discounted by markets as investor sentiment sits at historically low levels. While timing an inflection point is always difficult, the reset in expectations illustrated by a sharp contraction in valuations gives us confidence that the market has digested much of the slowdown to come.
The Fund remains well diversified with balanced exposure to both growth and value stocks. A key outcome of our bottom-up and flexible approach is the ability to migrate to wherever the best opportunities in the market exist and our core approach enables us to adeptly navigate volatility that arises when different investment styles come in and fall out of favor.
Our PMV process, which goes back more than 30 years, has proven to be successful over many market cycles. Given the events that have transpired post the COVID-19 pandemic, it is plausible that a new paradigm of higher discount rates and elevated inflation may become a longer-term secular trend. Consequently, we believe investors should consider a valuation-centric active manager to help them navigate the changing tides.
Allspring Small Cap Fund | 9
Fund expenses (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period from October 1, 2022 to March 31, 2023.
Actual expenses
The “Actual” line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Actual” line under the heading entitled “Expenses paid during period” for your applicable class of shares to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The “Hypothetical” line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) and contingent deferred sales charges. Therefore, the “Hypothetical” line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning account value 10-1-2022 | Ending account value 3-31-2023 | Expenses paid during the period1 | Annualized net expense ratio | |
| Class A | ||||
| Actual | $1,000.00 | $1,141.92 | $ 6.57 | 1.23% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.80 | $ 6.19 | 1.23% |
| Class C | ||||
| Actual | $1,000.00 | $1,137.43 | $10.55 | 1.98% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,015.06 | $ 9.95 | 1.98% |
| Class R6 | ||||
| Actual | $1,000.00 | $1,144.14 | $ 4.28 | 0.80% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.94 | $ 4.03 | 0.80% |
| Administrator Class | ||||
| Actual | $1,000.00 | $1,142.10 | $ 6.14 | 1.15% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.20 | $ 5.79 | 1.15% |
| Institutional Class | ||||
| Actual | $1,000.00 | $1,143.56 | $ 4.81 | 0.90% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.44 | $ 4.53 | 0.90% |
1 Expenses paid is equal to the annualized net expense ratio of each class multiplied by the average account value over the period, multiplied by 182 divided by 365 (to reflect the one-half-year period).
10 | Allspring Small Cap Fund
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Common stocks: 95.89% | |||||
| Communication services: 1.79% | |||||
| Interactive media & services: 1.79% | |||||
| Bumble Incorporated Class A † | 15,165 | $ 296,476 | |||
| Eventbrite Incorporated Class A † | 47,890 | 410,896 | |||
| 707,372 | |||||
| Consumer discretionary: 9.12% | |||||
| Automobile components: 1.79% | |||||
| Dana Incorporated | 23,813 | 358,386 | |||
| Gentherm Incorporated † | 5,741 | 346,871 | |||
| 705,257 | |||||
| Diversified consumer services: 1.01% | |||||
| Service Corporation International | 5,804 | 399,199 | |||
| Hotels, restaurants & leisure: 1.99% | |||||
| Jack in the Box Incorporated | 2,861 | 250,595 | |||
| Planet Fitness Incorporated Class A † | 6,895 | 535,535 | |||
| 786,130 | |||||
| Specialty retail: 4.33% | |||||
| Leslie's Incorporated † | 48,075 | 529,306 | |||
| National Vision Holdings Incorporated † | 26,056 | 490,895 | |||
| Revolve Group Incorporated † | 26,030 | 684,589 | |||
| 1,704,790 | |||||
| Consumer staples: 4.72% | |||||
| Food products: 3.96% | |||||
| Nomad Foods Limited † | 37,729 | 707,041 | |||
| The Simply Good Foods Company † | 13,982 | 556,064 | |||
| TreeHouse Foods Incorporated † | 5,883 | 296,680 | |||
| 1,559,785 | |||||
| Personal care products: 0.76% | |||||
| The Honest Company Incorporated † | 166,750 | 300,150 | |||
| Financials: 10.03% | |||||
| Banks: 5.13% | |||||
| Ameris Bancorp | 9,977 | 364,959 | |||
| Pinnacle Financial Partners Incorporated | 6,224 | 343,316 | |||
| United Community Bank | 10,714 | 301,278 | |||
| Veritex Holdings Incorporated | 14,632 | 267,180 | |||
| Webster Financial Corporation | 13,350 | 526,257 | |||
| Wintrust Financial Corporation | 2,984 | 217,683 | |||
| 2,020,673 | |||||
| Financial services: 1.75% | |||||
| Essent Group Limited | 17,245 | 690,662 |
The accompanying notes are an integral part of these financial statements.
Allspring Small Cap Fund | 11
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Insurance: 3.15% | |||||
| Axis Capital Holdings Limited | 11,205 | $ 610,894 | |||
| Reinsurance Group of America Incorporated | 4,741 | 629,415 | |||
| 1,240,309 | |||||
| Health care: 19.59% | |||||
| Biotechnology: 2.52% | |||||
| Agios Pharmaceuticals Incorporated † | 8,022 | 184,265 | |||
| Atara Biotherapeutics Incorporated † | 9,585 | 27,797 | |||
| Coherus Biosciences Incorporated † | 7,035 | 48,119 | |||
| Insmed Incorporated † | 13,278 | 226,390 | |||
| Mirati Therapeutics Incorporated † | 1,928 | 71,683 | |||
| Neurocrine Biosciences Incorporated † | 1,646 | 166,608 | |||
| Sage Therapeutics Incorporated † | 3,628 | 152,231 | |||
| Zymeworks Incorporated † | 12,669 | 114,528 | |||
| 991,621 | |||||
| Health care equipment & supplies: 10.71% | |||||
| AngioDynamics Incorporated † | 62,035 | 641,442 | |||
| Haemonetics Corporation † | 7,450 | 616,488 | |||
| Integer Holdings Corporation † | 11,181 | 866,528 | |||
| LivaNova plc † | 17,549 | 764,785 | |||
| Neuronetics Incorporated † | 74,956 | 218,122 | |||
| Teleflex Incorporated | 2,334 | 591,226 | |||
| ViewRay Incorporated † | 151,491 | 524,159 | |||
| 4,222,750 | |||||
| Health care providers & services: 1.52% | |||||
| HealthEquity Incorporated † | 10,212 | 599,547 | |||
| Health care technology: 0.58% | |||||
| Schrodinger Incorporated † | 8,742 | 230,177 | |||
| Life sciences tools & services: 4.26% | |||||
| Azenta Incorporated † | 14,269 | 636,683 | |||
| Bruker Corporation | 8,520 | 671,717 | |||
| Codexis Incorporated † | 24,057 | 99,596 | |||
| Sotera Health Company † | 15,031 | 269,205 | |||
| 1,677,201 | |||||
| Industrials: 20.35% | |||||
| Air freight & logistics: 1.20% | |||||
| Forward Air Corporation | 4,381 | 472,097 | |||
| Building products: 6.33% | |||||
| Armstrong World Industries Incorporated | 6,702 | 477,450 | |||
| Masonite International Corporation † | 11,428 | 1,037,320 | |||
| Tecnoglass Incorporated | 7,319 | 307,105 | |||
| The AZEK Company Incorporated † | 28,566 | 672,444 | |||
| 2,494,319 | |||||
| Commercial services & supplies: 1.89% | |||||
| Stericycle Incorporated † | 17,094 | 745,469 |
The accompanying notes are an integral part of these financial statements.
12 | Allspring Small Cap Fund
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Construction & engineering: 1.93% | |||||
| APi Group Corporation † | 33,895 | $ 761,960 | |||
| Electrical equipment: 3.45% | |||||
| Atkore Incorporated † | 9,683 | 1,360,267 | |||
| Machinery: 1.29% | |||||
| SPX Technologies Incorporated † | 7,188 | 507,329 | |||
| Professional services: 1.48% | |||||
| WNS Holdings Limited ADR † | 6,261 | 583,337 | |||
| Trading companies & distributors: 2.78% | |||||
| Air Lease Corporation | 18,093 | 712,321 | |||
| Herc Holdings Incorporated | 3,372 | 384,071 | |||
| 1,096,392 | |||||
| Information technology: 13.96% | |||||
| Communications equipment: 0.61% | |||||
| Infinera Corporation † | 30,873 | 239,574 | |||
| Electronic equipment, instruments & components: 1.87% | |||||
| Littelfuse Incorporated | 2,754 | 738,320 | |||
| Semiconductors & semiconductor equipment: 1.48% | |||||
| Macom Technology Solutions Holdings Incorporated † | 8,271 | 585,918 | |||
| Software: 10.00% | |||||
| 8x8 Incorporated † | 24,052 | 100,297 | |||
| CommVault Systems Incorporated † | 9,255 | 525,129 | |||
| Instructure Holdings Incorporated † | 21,254 | 550,479 | |||
| New Relic Incorporated † | 5,142 | 387,141 | |||
| Pagerduty Incorporated † | 23,784 | 831,964 | |||
| Q2 Holdings Incorporated † | 16,145 | 397,490 | |||
| Riskified Limited Class A † | 33,628 | 189,662 | |||
| SPS Commerce Incorporated † | 3,169 | 482,639 | |||
| WalkMe Limited † | 44,728 | 475,906 | |||
| 3,940,707 | |||||
| Materials: 10.22% | |||||
| Chemicals: 7.47% | |||||
| Ashland Global Holdings Incorporated | 8,445 | 867,386 | |||
| Olin Corporation | 13,882 | 770,451 | |||
| Quaker Chemical Corporation | 3,375 | 668,081 | |||
| Westlake Chemical Corporation | 5,487 | 636,382 | |||
| 2,942,300 | |||||
| Containers & packaging: 0.64% | |||||
| Silgan Holdings Incorporated | 4,719 | 253,269 | |||
| Metals & mining: 2.11% | |||||
| Reliance Steel & Aluminum Company | 3,244 | 832,865 | |||
| Real estate: 6.11% | |||||
| Industrial REITs: 1.61% | |||||
| Terreno Realty Corporation | 9,800 | 633,080 |
The accompanying notes are an integral part of these financial statements.
Allspring Small Cap Fund | 13
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Residential REITs: 2.60% | |||||
| American Homes 4 Rent Class A | 18,138 | $ 570,440 | |||
| Apartment Income REIT Corporation | 12,696 | 454,644 | |||
| 1,025,084 | |||||
| Specialized REITs: 1.90% | |||||
| Four Corners Property Trust Incorporated | 8,943 | 240,209 | |||
| Life Storage Incorporated | 3,893 | 510,333 | |||
| 750,542 | |||||
| Total Common stocks (Cost $36,016,789) | 37,798,452 |
| Investment companies: 1.19% | |||||
| Exchange-traded funds: 1.19% | |||||
| SPDR S&P Biotech ETF | 6,183 | 471,206 | |||
| Total Investment companies (Cost $810,304) | 471,206 |
| Yield | |||||
| Short-term investments: 3.05% | |||||
| Investment companies: 3.05% | |||||
| Allspring Government Money Market Fund Select Class ♠∞ | 4.69% | 1,202,003 | 1,202,003 | ||
| Total Short-term investments (Cost $1,202,003) | 1,202,003 | ||||
| Total investments in securities (Cost $38,029,096) | 100.13% | 39,471,661 | |||
| Other assets and liabilities, net | (0.13) | (51,948) | |||
| Total net assets | 100.00% | $39,419,713 |
| † | Non-income-earning security |
| ♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
| ∞ | The rate represents the 7-day annualized yield at period end. |
| Abbreviations: | |
| ADR | American depositary receipt |
| REIT | Real estate investment trust |
The accompanying notes are an integral part of these financial statements.
14 | Allspring Small Cap Fund
Portfolio of investments—March 31, 2023
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
| Value, beginning of period | Purchases | Sales proceeds | Net realized gains (losses) | Net change in unrealized gains (losses) | Value, end of period | Shares, end of period | Income from affiliated securities | |||
| Short-term investments | ||||||||||
| Allspring Government Money Market Fund Select Class | $ 594,684 | $11,192,416 | $(10,585,097) | $ 0 | $0 | $ 1,202,003 | 1,202,003 | $ 20,705 | ||
| Investments in affiliates no longer held at end of period | ||||||||||
| Securities Lending Cash Investments LLC | 1,552,990 | 14,490,150 | (16,043,050) | (90) | 0 | 0 | 0 | 35,297 # | ||
| $ (90) | $0 | $1,202,003 | $56,002 | |||||||
| # | Amount shown represents income before fees and rebates. |
The accompanying notes are an integral part of these financial statements.
Allspring Small Cap Fund | 15
Statement of assets and liabilities—March 31, 2023
| Assets | |
Investments in unaffiliated securities, at value (cost $36,827,093) | $ 38,269,658 |
Investments in affiliated securities, at value (cost $1,202,003) | 1,202,003 |
Receivable for Fund shares sold | 47,588 |
Receivable for dividends | 23,195 |
Receivable for securities lending income, net | 25 |
Prepaid expenses and other assets | 63,409 |
Total assets | 39,605,878 |
| Liabilities | |
Payable for investments purchased | 114,062 |
Management fee payable | 17,367 |
Payable for Fund shares redeemed | 16,841 |
Administration fees payable | 7,090 |
Trustees’ fees and expenses payable | 1,121 |
Distribution fee payable | 23 |
Accrued expenses and other liabilities | 29,661 |
Total liabilities | 186,165 |
Total net assets | $39,419,713 |
| Net assets consist of | |
Paid-in capital | $ 38,252,522 |
Total distributable earnings | 1,167,191 |
Total net assets | $39,419,713 |
| Computation of net asset value and offering price per share | |
Net assets – Class A | $ 35,295,300 |
Shares outstanding – Class A1 | 1,486,179 |
Net asset value per share – Class A | $23.75 |
Maximum offering price per share – Class A2 | $25.20 |
Net assets – Class C | $ 34,101 |
Shares outstanding – Class C1 | 1,697 |
Net asset value per share – Class C | $20.09 |
Net assets – Class R6 | $ 746,496 |
Shares outstanding – Class R61 | 29,215 |
Net asset value per share – Class R6 | $25.55 |
Net assets – Administrator Class | $ 321,475 |
Shares outstanding – Administrator Class1 | 13,064 |
Net asset value per share – Administrator Class | $24.61 |
Net assets – Institutional Class | $ 3,022,341 |
Shares outstanding – Institutional Class1 | 119,331 |
Net asset value per share – Institutional Class | $25.33 |
| 1 | The Fund has an unlimited number of authorized shares. |
| 2 | Maximum offering price is computed as 100/94.25 of net asset value. On investments of $50,000 or more, the offering price is reduced. |
The accompanying notes are an integral part of these financial statements.
16 | Allspring Small Cap Fund
Statement of operations—year ended March 31, 2023
| Investment income | |
Dividends | $ 326,749 |
Income from affiliated securities | 28,641 |
Total investment income | 355,390 |
| Expenses | |
Management fee | 355,540 |
| Administration fees | |
Class A | 76,223 |
Class C | 80 |
Class R6 | 260 |
Administrator Class | 425 |
Institutional Class | 5,590 |
| Shareholder servicing fees | |
Class A | 90,741 |
Class C | 95 |
Administrator Class | 816 |
| Distribution fee | |
Class C | 286 |
Custody and accounting fees | 14,389 |
Professional fees | 48,076 |
Registration fees | 53,517 |
Shareholder report expenses | 35,452 |
Trustees’ fees and expenses | 20,175 |
Other fees and expenses | 4,204 |
Total expenses | 705,869 |
| Less: Fee waivers and/or expense reimbursements | |
Fund-level | (209,273) |
Class A | (4,476) |
Net expenses | 492,120 |
Net investment loss | (136,730) |
| Realized and unrealized gains (losses) on investments | |
| Net realized gains (losses) on | |
Unaffiliated securities | 375,573 |
Affiliated securities | (90) |
Net realized gains on investments | 375,483 |
Net change in unrealized gains (losses) on investments | (4,589,257) |
Net realized and unrealized gains (losses) on investments | (4,213,774) |
Net decrease in net assets resulting from operations | $(4,350,504) |
The accompanying notes are an integral part of these financial statements.
Allspring Small Cap Fund | 17
Statement of changes in net assets
| Year ended March 31, 2023 | Year ended March 31, 2022 | |||
| Operations | ||||
Net investment loss | $ (136,730) | $ (273,654) | ||
Net realized gains on investments | 375,483 | 8,162,825 | ||
Net change in unrealized gains (losses) on investments | (4,589,257) | (7,318,854) | ||
Net increase (decrease) in net assets resulting from operations | (4,350,504) | 570,317 | ||
| Distributions to shareholders from | ||||
| Net investment income and net realized gains | ||||
Class A | (5,888,247) | (8,202,400) | ||
Class C | (6,256) | (13,229) | ||
Class R6 | (130,174) | (166,835) | ||
Administrator Class | (57,985) | (76,156) | ||
Institutional Class | (604,568) | (1,065,163) | ||
Total distributions to shareholders | (6,687,230) | (9,523,783) | ||
| Capital share transactions | Shares | Shares | ||
| Proceeds from shares sold | ||||
Class A | 94,313 | 2,547,226 | 63,622 | 2,219,863 |
Class C | 0 | 0 | 2,679 | 92,317 |
Class R6 | 7,320 | 202,364 | 7,280 | 281,475 |
Administrator Class | 3,378 | 87,428 | 2,330 | 86,569 |
Institutional Class | 11,002 | 318,932 | 8,764 | 343,421 |
| 3,155,950 | 3,023,645 | |||
| Reinvestment of distributions | ||||
Class A | 243,085 | 5,678,444 | 241,326 | 7,944,449 |
Class C | 315 | 6,256 | 457 | 13,229 |
Class R6 | 5,186 | 130,174 | 4,790 | 166,835 |
Administrator Class | 2,033 | 49,219 | 1,824 | 61,820 |
Institutional Class | 22,664 | 564,093 | 28,785 | 996,275 |
| 6,428,186 | 9,182,608 | |||
| Payment for shares redeemed | ||||
Class A | (228,115) | (6,047,559) | (161,278) | (5,903,305) |
Class C | (826) | (20,264) | (4,193) | (145,645) |
Class R6 | (12,767) | (346,989) | (6,311) | (255,377) |
Administrator Class | (2,628) | (67,615) | (5,921) | (211,605) |
Institutional Class | (82,591) | (2,229,671) | (210,359) | (8,645,948) |
| (8,712,098) | (15,161,880) | |||
Net increase (decrease) in net assets resulting from capital share transactions | 872,038 | (2,955,627) | ||
Total decrease in net assets | (10,165,696) | (11,909,093) | ||
| Net assets | ||||
Beginning of period | 49,585,409 | 61,494,502 | ||
End of period | $ 39,419,713 | $ 49,585,409 | ||
The accompanying notes are an integral part of these financial statements.
18 | Allspring Small Cap Fund
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $31.03 | $37.77 | $19.77 | $30.27 | $31.46 |
Net investment income (loss) | (0.10) 1 | (0.20) 1 | (0.07) 1 | 0.02 1 | (0.04) 1 |
Net realized and unrealized gains (losses) on investments | (2.65) | 0.52 | 18.10 | (8.43) | (1.15) |
Total from investment operations | (2.75) | 0.32 | 18.03 | (8.41) | (1.19) |
| Distributions to shareholders from | |||||
Net investment income | 0.00 | 0.00 | (0.03) | 0.00 | 0.00 |
Net realized gains | (4.53) | (7.06) | 0.00 | (2.09) | 0.00 |
Total distributions to shareholders | (4.53) | (7.06) | (0.03) | (2.09) | 0.00 |
Net asset value, end of period | $23.75 | $31.03 | $37.77 | $19.77 | $30.27 |
Total return2 | (8.62)% | (0.22)% | 91.20% | (30.24)% | (3.78)% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.73% | 1.67% | 1.68% | 1.60% | 1.54% |
Net expenses | 1.22% | 1.21% | 1.32% | 1.33% | 1.35% |
Net investment income (loss) | (0.37)% | (0.54)% | (0.24)% | 0.05% | (0.11)% |
| Supplemental data | |||||
Portfolio turnover rate | 22% | 37% | 55% | 41% | 34% |
Net assets, end of period (000s omitted) | $35,295 | $42,732 | $46,580 | $27,115 | $44,028 |
| 1 | Calculated based upon average shares outstanding |
| 2 | Total return calculations do not include any sales charges. |
The accompanying notes are an integral part of these financial statements.
Allspring Small Cap Fund | 19
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $27.22 | $34.21 | $18.03 | $27.98 | $29.30 |
Net investment loss | (0.26) 1 | (0.43) 1 | (0.23) 1 | (0.20) 1 | (0.25) 1 |
Net realized and unrealized gains (losses) on investments | (2.34) | 0.50 | 16.41 | (7.66) | (1.07) |
Total from investment operations | (2.60) | 0.07 | 16.18 | (7.86) | (1.32) |
| Distributions to shareholders from | |||||
Net realized gains | (4.53) | (7.06) | 0.00 | (2.09) | 0.00 |
Net asset value, end of period | $20.09 | $27.22 | $34.21 | $18.03 | $27.98 |
Total return2 | (9.36)% | (1.02)% | 89.74% | (30.76)% | (4.51)% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 2.48% | 2.40% | 2.44% | 2.34% | 2.29% |
Net expenses | 1.98% | 1.98% | 2.09% | 2.10% | 2.10% |
Net investment loss | (1.13)% | (1.27)% | (0.94)% | (0.73)% | (0.85)% |
| Supplemental data | |||||
Portfolio turnover rate | 22% | 37% | 55% | 41% | 34% |
Net assets, end of period (000s omitted) | $34 | $60 | $112 | $190 | $526 |
| 1 | Calculated based upon average shares outstanding |
| 2 | Total return calculations do not include any sales charges. |
The accompanying notes are an integral part of these financial statements.
20 | Allspring Small Cap Fund
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||
| Class R6 | 2023 | 2022 | 2021 1 |
Net asset value, beginning of period | $32.88 | $39.46 | $25.43 |
Net investment income (loss) | 0.02 | (0.05) 2 | 0.03 2 |
Net realized and unrealized gains (losses) on investments | (2.82) | 0.53 | 14.09 |
Total from investment operations | (2.80) | 0.48 | 14.12 |
| Distributions to shareholders from | |||
Net investment income | 0.00 | 0.00 | (0.09) |
Net realized gains | (4.53) | (7.06) | 0.00 |
Total distributions to shareholders | (4.53) | (7.06) | (0.09) |
Net asset value, end of period | $25.55 | $32.88 | $39.46 |
Total return3 | (8.27)% | 0.23% | 55.58% |
| Ratios to average net assets (annualized) | |||
Gross expenses | 1.30% | 1.24% | 1.23% |
Net expenses | 0.80% | 0.80% | 0.88% |
Net investment income (loss) | 0.06% | (0.13)% | 0.09% |
| Supplemental data | |||
Portfolio turnover rate | 22% | 37% | 55% |
Net assets, end of period (000s omitted) | $746 | $969 | $936 |
| 1 | For the period from May 29, 2020 (commencement of class operations) to March 31, 2021 |
| 2 | Calculated based upon average shares outstanding |
| 3 | Returns for periods of less than one year are not annualized. |
The accompanying notes are an integral part of these financial statements.
Allspring Small Cap Fund | 21
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $31.95 | $38.67 | $20.23 | $30.89 | $32.06 |
Net investment income (loss) | (0.08) 1 | (0.17) 1 | (0.01) 1 | 0.05 1 | 0.01 1 |
Net realized and unrealized gains (losses) on investments | (2.73) | 0.51 | 18.51 | (8.62) | (1.18) |
Total from investment operations | (2.81) | 0.34 | 18.50 | (8.57) | (1.17) |
| Distributions to shareholders from | |||||
Net investment income | 0.00 | 0.00 | (0.06) | 0.00 | 0.00 |
Net realized gains | (4.53) | (7.06) | 0.00 | (2.09) | 0.00 |
Total distributions to shareholders | (4.53) | (7.06) | (0.06) | (2.09) | 0.00 |
Net asset value, end of period | $24.61 | $31.95 | $38.67 | $20.23 | $30.89 |
Total return | (8.56)% | (0.16)% | 91.48% | (30.15)% | (3.65)% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.65% | 1.59% | 1.61% | 1.51% | 1.46% |
Net expenses | 1.15% | 1.15% | 1.20% | 1.20% | 1.20% |
Net investment income (loss) | (0.29)% | (0.46)% | (0.02)% | 0.17% | 0.05% |
| Supplemental data | |||||
Portfolio turnover rate | 22% | 37% | 55% | 41% | 34% |
Net assets, end of period (000s omitted) | $321 | $329 | $466 | $450 | $1,165 |
| 1 | Calculated based upon average shares outstanding |
The accompanying notes are an integral part of these financial statements.
22 | Allspring Small Cap Fund
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Institutional Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $32.66 | $39.29 | $20.58 | $31.33 | $32.45 |
Net investment income (loss) | (0.01) 1 | (0.11) 1 | 0.02 1 | 0.12 1 | 0.08 1 |
Net realized and unrealized gains (losses) on investments | (2.79) | 0.54 | 18.87 | (8.78) | (1.20) |
Total from investment operations | (2.80) | 0.43 | 18.89 | (8.66) | (1.12) |
| Distributions to shareholders from | |||||
Net investment income | 0.00 | 0.00 | (0.18) | (0.00) 2 | 0.00 |
Net realized gains | (4.53) | (7.06) | 0.00 | (2.09) | 0.00 |
Total distributions to shareholders | (4.53) | (7.06) | (0.18) | (2.09) | 0.00 |
Net asset value, end of period | $25.33 | $32.66 | $39.29 | $20.58 | $31.33 |
Total return | (8.33)% | 0.09% | 91.87% | (30.00)% | (3.45)% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.40% | 1.33% | 1.35% | 1.27% | 1.21% |
Net expenses | 0.90% | 0.90% | 0.98% | 1.00% | 1.00% |
Net investment income (loss) | (0.04)% | (0.28)% | 0.08% | 0.38% | 0.24% |
| Supplemental data | |||||
Portfolio turnover rate | 22% | 37% | 55% | 41% | 34% |
Net assets, end of period (000s omitted) | $3,022 | $5,496 | $13,401 | $11,305 | $21,398 |
| 1 | Calculated based upon average shares outstanding |
| 2 | Amount is less than $0.005. |
The accompanying notes are an integral part of these financial statements.
Allspring Small Cap Fund | 23
Notes to financial statements
1. ORGANIZATION
Allspring Funds Trust (the "Trust"), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Allspring Small Cap Fund (the "Fund") which is a diversified series of the Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Securities valuation
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities and exchange-traded funds that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value. Interests in non-registered investment companies that are redeemable at net asset value are fair valued normally at net asset value.
Investments which are not valued using the methods discussed above are valued at their fair value, as determined in good faith by Allspring Funds Management, LLC ("Allspring Funds Management"), which was named the valuation designee by the Board of Trustees. As the valuation designee, Allspring Funds Management is responsible for day-to-day valuation activities for the Allspring Funds. In connection with these responsibilities, Allspring Funds Management has established a Valuation Committee and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities. On a quarterly basis, the Board of Trustees receives reports of valuation actions taken by the Valuation Committee. On at least an annual basis, the Board of Trustees receives an assessment of the adequacy and effectiveness of Allspring Funds Management's process for determining the fair value of the portfolio of investments.
Securities lending
During the period, the Fund participated in a program to lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. When securities were on loan, the Fund received interest or dividends on those securities. Cash collateral received in connection with its securities lending transactions was invested in Securities Lending Cash Investments, LLC (the "Securities Lending Fund"), an affiliated non-registered investment company. Effective at the close of business on March 29, 2023, the Fund is no longer participating in the securities lending program and the Securities Lending Fund was liquidated. Securities Lending Fund was managed by Allspring Funds Management and was subadvised by Allspring Global Investments, LLC ("Allspring Investments"), an affiliate of Allspring Funds Management and wholly owned subsidiary of Allspring Global Investments Holdings, LLC. Allspring Funds Management received an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Securities Lending Fund increased. All of the fees received by Allspring Funds Management were paid to Allspring Investments for its services as subadviser.
Investments in Securities Lending Fund were valued at the evaluated bid price provided by an independent pricing service. Income earned from investment in the Securities Lending Fund (net of fees and rebates), if any, is included in income from affiliated securities on the Statement of Operations.
In a securities lending transaction, the net asset value of the Fund is affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of the instrument in which collateral is invested. The amount of securities lending activity undertaken by the Fund fluctuates from time to time. The Fund has the right under the lending agreement to recover the securities from the borrower on demand. In the event of default or bankruptcy by the borrower, the Fund may be prevented from recovering the loaned securities or gaining access to the collateral or may experience delays or costs in doing so. In such an event, the terms of the agreement allow the unaffiliated securities lending agent to use the
24 | Allspring Small Cap Fund
Notes to financial statements
collateral to purchase replacement securities on behalf of the Fund or pay the Fund the market value of the loaned securities. The Fund bears the risk of loss with respect to depreciation of its investment of the cash collateral.
Security transactions and income recognition
Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.
Dividend income is recognized on the ex-dividend date.
Income dividends and capital gain distributions from investment companies are recorded on the ex-dividend date. Capital gain distributions from investment companies are treated as realized gains.
Distributions to shareholders
Distributions to shareholders from net investment income and any net realized gains are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund's fiscal year end. Therefore, a portion of the Fund's distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
Federal and other taxes
The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.
The Fund’s income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. Management has analyzed the Fund's tax positions taken on federal, state, and foreign tax returns, as applicable, for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
As of March 31, 2023, the aggregate cost of all investments for federal income tax purposes was $38,691,231 and the unrealized gains (losses) consisted of:
| Gross unrealized gains | $ 7,836,291 |
| Gross unrealized losses | (7,055,861) |
| Net unrealized gains | $ 780,430 |
Class allocations
The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.
3. FAIR VALUATION MEASUREMENTS
Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
| ■ | Level 1 – quoted prices in active markets for identical securities |
| ■ | Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) |
| ■ | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
Allspring Small Cap Fund | 25
Notes to financial statements
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of March 31, 2023:
| Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
| Assets | ||||
| Investments in: | ||||
| Common stocks | ||||
| Communication services | $ 707,372 | $0 | $0 | $ 707,372 |
| Consumer discretionary | 3,595,376 | 0 | 0 | 3,595,376 |
| Consumer staples | 1,859,935 | 0 | 0 | 1,859,935 |
| Financials | 3,951,644 | 0 | 0 | 3,951,644 |
| Health care | 7,721,296 | 0 | 0 | 7,721,296 |
| Industrials | 8,021,170 | 0 | 0 | 8,021,170 |
| Information technology | 5,504,519 | 0 | 0 | 5,504,519 |
| Materials | 4,028,434 | 0 | 0 | 4,028,434 |
| Real estate | 2,408,706 | 0 | 0 | 2,408,706 |
| Investment companies | 471,206 | 0 | 0 | 471,206 |
| Short-term investments | ||||
| Investment companies | 1,202,003 | 0 | 0 | 1,202,003 |
| Total assets | $39,471,661 | $0 | $0 | $39,471,661 |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the year ended March 31, 2023, the Fund did not have any transfers into/out of Level 3.
4. TRANSACTIONS WITH AFFILIATES
Management fee
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Allspring Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Allspring Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:
| Average daily net assets | Management fee |
| First $500 million | 0.850% |
| Next $500 million | 0.825 |
| Next $1 billion | 0.800 |
| Next $1 billion | 0.775 |
| Next $1 billion | 0.750 |
| Next $1 billion | 0.730 |
| Next $5 billion | 0.720 |
| Over $10 billion | 0.710 |
For the year ended March 31, 2023, the management fee was equivalent to an annual rate of 0.85% of the Fund’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Investments is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.55% and declining to 0.40% as the average daily net assets of the Fund increase.
26 | Allspring Small Cap Fund
Notes to financial statements
Administration fees
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:
| Class-level administration fee | |
| Class A | 0.21% |
| Class C | 0.21 |
| Class R6 | 0.03 |
| Administrator Class | 0.13 |
| Institutional Class | 0.13 |
Waivers and/or expense reimbursements
Allspring Funds Management has contractually committed to waive and/or reimburse management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Allspring Funds Management will waive fees and/or reimburse expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Allspring Funds Management has contractually committed through July 31, 2023 to waive fees and/or reimburse expenses to the extent necessary to cap expenses. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. As of March 31, 2023, the contractual expense caps are as follows:
| Expense ratio caps | |
| Class A | 1.23% |
| Class C | 1.98 |
| Class R6 | 0.80 |
| Administrator Class | 1.15 |
| Institutional Class | 0.90 |
Distribution fee
The Trust has adopted a distribution plan for Class C shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Allspring Funds Distributor, LLC ("Allspring Funds Distributor"), the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.75% of the average daily net assets of Class C shares.
In addition, Allspring Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Allspring Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the year ended March 31, 2023, Allspring Funds Distributor received $116 from the sale of Class A shares. No contingent deferred sales charges were incurred by Class A and Class C shares for the year ended March 31, 2023.
Shareholder servicing fees
The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A, Class C and Administrator Class are charged a fee at an annual rate up to 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of the Fund.
Interfund transactions
The Fund may purchase or sell portfolio investment securities to certain affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices.
Allspring Small Cap Fund | 27
Notes to financial statements
5. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the year ended March 31, 2023 were $9,052,654 and $15,501,961, respectively.
6. BANK BORROWINGS
The Trust (excluding the money market funds), Allspring Master Trust and Allspring Variable Trust are parties to a $350,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the Fund based on a borrowing rate equal to the higher of the Federal Funds rate or the overnight bank funding rate in effect on that day plus a spread. In addition, an annual commitment fee based on the unused balance is allocated to each participating fund.
For the year ended March 31, 2023, there were no borrowings by the Fund under the agreement.
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid during the years ended March 31, 2023 and March 31, 2022 were as follows:
| Year ended March 31 | ||
| 2023 | 2022 | |
| Ordinary income | $1,260,367 | $ 1,082,006 |
| Long-term capital gain | 5,426,863 | 8,441,777 |
As of March 31, 2023, the components of distributable earnings on a tax basis were as follows:
| Undistributed ordinary income | Undistributed long-term gain | Unrealized gains |
| $31,072 | $355,689 | $780,430 |
8. INDEMNIFICATION
Under the Fund's organizational documents, the officers and Trustees have been granted certain indemnification rights against certain liabilities that may arise out of performance of their duties to the Fund. The Fund has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Fund’s organizational documents into contractual rights that cannot be changed in the future without the consent of the Trustee. Additionally, in the normal course of business, the Fund may enter into contracts with service providers that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.
28 | Allspring Small Cap Fund
Report of independent registered public accounting firm
To the Shareholders of the Fund and Board of Trustees
Allspring Funds Trust:
Allspring Funds Trust:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Allspring Small Cap Fund (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of March 31, 2023, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years or periods in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of March 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of March 31, 2023, by correspondence with the custodian, transfer agent and brokers, or by other appropriate auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have not been able to determine the specific year that we began serving as the auditor of one or more Allspring Funds investment companies; however, we are aware that we have served as the auditor of one or more Allspring Funds investment companies since at least 1955.
Boston, Massachusetts
May 25, 2023
Allspring Small Cap Fund | 29
Other information (unaudited)
TAX INFORMATION
For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 21% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended March 31, 2023.
Pursuant to Section 852 of the Internal Revenue Code, $5,426,863 was designated as a 20% rate gain distribution for the fiscal year ended March 31, 2023.
Pursuant to Section 854 of the Internal Revenue Code, $304,147 of income dividends paid during the fiscal year ended March 31, 2023 has been designated as qualified dividend income (QDI).
For the fiscal year ended March 31, 2023, $1,260,367 has been designated as short-term capital gain dividends for nonresident alien shareholders pursuant to Section 871 of the Internal Revenue Code.
PROXY VOTING INFORMATION
A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our website at allspringglobal.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at allspringglobal.com or by visiting the SEC website at sec.gov.
QUARTERLY PORTFOLIO HOLDINGS INFORMATION
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
30 | Allspring Small Cap Fund
Other information (unaudited)
BOARD OF TRUSTEES AND OFFICERS
Each of the Trustees and Officers listed in the table below acts in identical capacities for each fund in the Allspring family of funds, which consists of 127 mutual funds comprising the Allspring Funds Trust, Allspring Variable Trust, Allspring Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information1. The mailing address of each Trustee and Officer is 1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203. Each Trustee and Officer serves an indefinite term, however, each Trustee serves such term until reaching the mandatory retirement age established by the Trustees.
Independent Trustees
| Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
| William R. Ebsworth (Born 1957) | Trustee, since 2015 | Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Foundation (non-profit organization). Mr. Ebsworth is a CFA® charterholder. | N/A |
| Jane A. Freeman (Born 1953) | Trustee, since 2015; Chair Liaison, since 2018 | Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is also an inactive Chartered Financial Analyst. | N/A |
| Isaiah Harris, Jr. (Born 1952) | Trustee, since 2009; Audit Committee Chair, since 2019 | Retired. Member of the Advisory Board of CEF of East Central Florida. Chairman of the Board of CIGNA Corporation from 2009 to 2021, and Director from 2005 to 2008. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Fellowship of Christian Athletes. Mr. Harris is a certified public accountant (inactive status). | N/A |
| David F. Larcker (Born 1950) | Trustee, since 2009 | Distinguished Visiting Fellow at the Hoover Institution since 2022. James Irvin Miller Professor of Accounting at the Graduate School of Business (Emeritus), Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. | N/A |
Allspring Small Cap Fund | 31
Other information (unaudited)
| Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
| Olivia S. Mitchell (Born 1953) | Trustee, since 2006; Nominating and Governance Committee Chair, since 2018 | International Foundation of Employee Benefit Plans Professor since 1993, Wharton School of the University of Pennsylvania. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously taught at Cornell University from 1978 to 1993. | N/A |
| Timothy J. Penny (Born 1951) | Trustee, since 1996; Chair, since 2018 | President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Vice Chair of the Economic Club of Minnesota, since 2007. Co-Chair of the Committee for a Responsible Federal Budget, since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, from 2007-2022. Senior Fellow of the University of Minnesota Humphrey Institute from 1995 to 2017. | N/A |
| James G. Polisson (Born 1959) | Trustee, since 2018 | Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations. | N/A |
| Pamela Wheelock (Born 1959) | Trustee, since January 2020; previously Trustee from January 2018 to July 2019 | Retired. Executive and Senior Financial leadership positions in the public, private and nonprofit sectors. Interim President and CEO, McKnight Foundation, 2020. Interim Commissioner, Minnesota Department of Human Services, 2019. Chief Operating Officer, Twin Cities Habitat for Humanity, 2017-2019. Vice President for University Services, University of Minnesota, 2012-2016. Interim President and CEO, Blue Cross and Blue Shield of Minnesota, 2011-2012. Executive Vice-President and Chief Financial Officer, Minnesota Wild, 2002-2008. Commissioner, Minnesota Department of Finance, 1999-2002. Chair of the Board of Directors of Destination Medical Center Corporation. Board member of the Minnesota Wild Foundation. | N/A |
* Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.
32 | Allspring Small Cap Fund
Other information (unaudited)
Officers2
| Name and year of birth | Position held and length of service | Principal occupations during past five years or longer |
| Andrew Owen (Born 1960) | President, since 2017 | President and Chief Executive Officer of Allspring Funds Management, LLC since 2017 and Head of Global Fund Governance of Allspring Global Investments since 2022. Prior thereto, co-president of Galliard Capital Management, LLC, an affiliate of Allspring Funds Management, LLC, from 2019 to 2022 and Head of Affiliated Managers, Allspring Global Investments, from 2014 to 2019 and Executive Vice President responsible for marketing, investments and product development for Allspring Funds Management, LLC, from 2009 to 2014. |
| Jeremy DePalma (Born 1974) | Treasurer, since 2012 (for certain funds in the Fund Complex); since 2021 (for the remaining funds in the Fund Complex) | Senior Vice President of Allspring Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010. |
| Christopher Baker (Born 1976) | Chief Compliance Officer, since 2022 | Global Chief Compliance Officer for Allspring Global Investments since 2022. Prior thereto, Chief Compliance Officer for State Street Global Advisors from 2018 to 2021. Senior Compliance Officer for the State Street divisions of Alternative Investment Solutions, Sector Solutions, and Global Marketing from 2015 to 2018. From 2010 to 2015 Vice President, Global Head of Investment and Marketing Compliance for State Street Global Advisors. |
| Matthew Prasse (Born 1983) | Chief Legal Officer, since 2022; Secretary, since 2021 | Senior Counsel of the Allspring Legal Department since 2021. Senior Counsel of the Wells Fargo Legal Department from 2018 to 2021. Previously, Counsel for Barings LLC from 2015 to 2018. Prior to joining Barings, Associate at Morgan, Lewis & Bockius LLP from 2008 to 2015. |
1 The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at allspringglobal.com.
2 For those Officers with tenures at Allspring Global Investments and/or Allspring Funds Management, LLC that began prior to 2021, such tenures include years of service during which these businesses/entities were known as Wells Fargo Asset Management and Wells Fargo Funds Management, LLC, respectively.
Allspring Small Cap Fund | 33
For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Fund's website, or call:
Allspring Funds
P.O. Box 219967
Kansas City, MO 64121-9967
P.O. Box 219967
Kansas City, MO 64121-9967
Website: allspringglobal.com
Individual investors: 1-800-222-8222
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-800-260-5969
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call
1-800-222-8222 or visit the Fund's website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
1-800-222-8222 or visit the Fund's website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
Allspring Global InvestmentsTM is the trade name for the asset management firms of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management, LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind - including a recommendation for any specific investment, strategy, or plan.
© 2023 Allspring Global Investments Holdings, LLC. All rights reserved.
ALL-04052023-dgwenraw 05-23
AR3327 03-23
AR3327 03-23
Annual Report
March 31, 2023
Allspring
Special Small Cap Value Fund
Special Small Cap Value Fund
Contents
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| 10 | |
| 11 | |
| Financial statements | |
| 19 | |
| 20 | |
| 21 | |
| 22 | |
| 28 | |
| 34 | |
| 35 |
The views expressed and any forward-looking statements are as of March 31, 2023, unless otherwise noted, and are those of the Fund's portfolio managers and/or Allspring Global Investments. Discussions of individual securities or the markets generally are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Allspring Global Investments disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.
Allspring Special Small Cap Value Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Special Small Cap Value Fund for the 12-month period that ended March 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. Earlier tailwinds provided by global stimulus programs, vaccination rollouts, and recovering consumer and corporate sentiment were wiped away by the highest rate of inflation in four decades as well as the impact of ongoing aggressive central bank rate hikes and the prospect of more rate hikes. Compounding these concerns were the global reverberations of the Russia-Ukraine war and the impact of China’s strict COVID-19 lockdowns, which were removed in December.
For the 12-month period, stocks and bonds––both domestic U.S. and global––suffered broad losses. For the period, U.S. stocks, based on the S&P 500 Index,1 returned -7.73%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned -5.07%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a decline of 10.70%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -4.78%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 10.72%, the Bloomberg Municipal Bond Index6 gained 0.26%, and the ICE BofA U.S. High Yield Index7 fell 3.50%.
High inflation and central bank rate hikes rocked markets.
In April 2022, market headwinds created by Russia’s invasion of Ukraine in February continued, with broad and deep losses as both the S&P 500 and MSCI ACWI (Net)8 fell 8% or more for the month and commodity shortages added to global inflation. The Chinese economy struggled through a strict lockdown as the government tried to contain a major COVID-19 outbreak. The ensuing global ripple effect compounded existing supply shortages. Meanwhile, U.S. annual inflation raged at 8.5%, its highest level since 1981, and investors braced themselves for aggressive Federal Reserve (Fed) monetary tightening moves.
Market volatility continued in May, although markets recovered ground late in the month. Value stocks continued to outperform growth stocks. The concerns that had dominated markets for months continued, including high inflation and geopolitical tensions that added to high crude oil, gasoline, and food prices. In response, the Fed raised the federal funds rate by 0.50%. Meanwhile, highly contagious COVID-19 variants persisted. However, labor markets in the U.S., the U.K., and Europe remained strong. U.S. retail sales increased for the fourth consecutive month in April—a sign of consumer resilience.
“ In April 2022, market headwinds created by Russia’s invasion of Ukraine in February continued, with broad and deep losses as both the S&P 500 Index and MSCI All Country World Index fell 8% or more for the month and commodity shortages added to global inflation.”
| 1 | The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock's weight in the index proportionate to its market value. You cannot invest directly in an index. |
| 2 | The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding the U.S. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. You cannot invest directly in an index. |
| 3 | The MSCI Emerging Markets (EM) Index (Net) (USD) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index. |
| 4 | The Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S.-dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index. |
| 5 | The Bloomberg Global Aggregate ex-USD Index (unhedged) is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S.-dollar-denominated debt market. You cannot invest directly in an index. |
| 6 | The Bloomberg Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index. |
| 7 | The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2023. ICE Data Indices, LLC. All rights reserved. |
| 8 | The MSCI ACWI (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets. You cannot invest directly in an index. |
2 | Allspring Special Small Cap Value Fund
Letter to shareholders (unaudited)
In June, stocks posted further losses en route to their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were the familiar factors: rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Fed raised its short-term rate by another 0.75% in June. Meanwhile, the U.S. unemployment rate held firm at 3.6% and the housing market remained only marginally affected by sharply higher mortgage rates.
Markets rebounded in July, led by U.S. stocks. While U.S. economic activity showed signs of waning, the country’s labor market remained surprisingly strong: July nonfarm payrolls grew by more than 500,000 and U.S. unemployment dipped to 3.5%. Meanwhile, crude oil and retail gasoline prices, major contributors to recent overall inflation, fell substantially from earlier highs. And while U.S. home prices rose, home sales fell as houses became less affordable with mortgage rates at a 13-year high. The Fed raised the federal funds rate another 0.75% in July—to a range of 2.25% to 2.50%—and forecasts pointed to further rate hikes.
August was yet another broadly challenging month for financial markets, with more red ink flowing. High inflation persisted, cresting 9% in the eurozone on an annual basis and remaining above 8% in the U.S. despite the Fed’s aggressive monetary policy and a major drop in global crude oil and gasoline prices from their June peak. One positive note was the resilient U.S. job market. However, the Fed’s job was clearly not complete. One longer-term bright spot was the U.S. Congress’s passage of the Inflation Reduction Act. Its primary stated goals include: to reduce inflation (though not immediately) by curbing the deficit, capping health care spending by seniors, and investing in domestic sources of clean energy.
The market misery continued in September as all asset classes suffered major losses. Central banks kept up their battle against rapidly rising prices with more rate hikes. The strength of the U.S. dollar weighed on results for investors holding non-U.S.-dollar assets. U.S. mortgage rates jumped to near 7% on 30-year fixed-rate mortgages; the decreased housing affordability began to cool demand somewhat. The U.K. experienced a sharp sell-off of government bonds and the British pound in September as investors panicked in response to a new government budget that was seen as financially unsound. The Bank of England (BoE) then stepped in and bought long-dated government bonds.
Equities had a reprieve in October. Value stocks and small caps fared best. Globally, developed markets outpaced emerging market equities, which were hurt by weakness among Chinese stocks. Central banks continued to try to curtail high inflation with aggressive interest rate hikes. Geopolitical risks persisted, including the ongoing Russia-Ukraine war and economic, financial market, and political turmoil in the U.K. Concerns over Europe’s energy crisis eased thanks to unseasonably warm weather and plentiful gas on hand. The U.S. labor market continued its resilience against rising prices as unemployment remained near a record low.
Stocks and bonds rallied in November. Economic news was encouraging, driven by U.S. labor market strength. Although central banks kept raising rates, hopes rose for an easing in the pace of rate hikes and a possible end to central bank monetary tightening in 2023. Although inflation remained at record highs in the eurozone, we began to see signs of a possible decline in inflationary pressures as U.S. inflation moderated, with a 7.1% annual price rise in November and a monthly price increase of just 0.1%. China’s economic data remained weak, reflecting its zero-COVID-19 policy.
Financial markets cooled in December, with U.S. equities posting negative overall results in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever with flat overall monthly returns as markets weighed the hopes for an end to the monetary tightening cycle with the reality that central banks had not completed their jobs yet. U.S. Consumer Price Index (CPI)1 data showed a strong consistent trend downward, which brought down the 12-month CPI to 6.5% in December from 9.1% in June. Other countries and regions reported still-high but declining inflation rates as the year winded down.
“ In June, stocks posted further losses en route to their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were the familiar factors: rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation.”
| 1 | The U.S. Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. You cannot invest directly in an index. |
Allspring Special Small Cap Value Fund | 3
Letter to shareholders (unaudited)
The year 2023 began with a rally across global equities and fixed income securities. Investor optimism rose in response to data indicating declining inflation rates and the reopening of China’s economy with the abrupt end to its zero-COVID-19 policy. The U.S. reported surprisingly strong job gains––employers added more than 500,000 jobs––and unemployment fell to 3.4%, the lowest level since 1969. Meanwhile, wage growth, seen as a potential contributor to ongoing high inflation, continued to moderate. All eyes remained fixed on the Fed and on how many more rate hikes remain in this tightening cycle. The 0.25% federal funds rate hike announced in January was the Fed’s smallest rate increase since March 2022.
Financial markets declined in February as investors responded unfavorably to resilient economic data. The takeaway: Central banks will likely continue their monetary tightening cycle for longer than markets had priced in. In this environment—where strong economic data is seen as bad news—the resilient U.S. labor market was seen as a negative while the inflation rate has not been falling quickly enough for the Fed, which raised interest rates by 0.25% in early February. Meanwhile, the BoE and the European Central Bank both raised rates by 0.50%.
The collapse of Silicon Valley Bank in March, the second-largest banking failure in U.S. history, led to a classic bank run that spread to Europe, where Switzerland’s Credit Suisse was taken over by its rival, UBS. The sudden banking industry uncertainty led some clients of regional banks to transfer deposits to a handful of U.S. banking giants while bank shareholders sold stock. The banking industry turmoil could make the job of central banks more challenging as they weigh inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. The U.S. labor market remained resilient. The euro-area composite Purchasing Managers’ Index1 rose to 53.70, indicating expansion, for March. And China’s economy continued to rebound after the removal of its COVID-19 lockdown. Inflation rates in the U.S., the U.K., and Europe all remained higher than central bank targets, leading to additional rate hikes in March.
Don’t let short-term uncertainty derail long-term investment goals.
Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Allspring Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.
Thank you for choosing to invest with Allspring Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.
Sincerely,
Andrew Owen
President
Allspring Funds
President
Allspring Funds
For further information about your fund, contact your investment professional, visit our website at allspringglobal.com, or call us directly at 1-800-222-8222.
| 1 | The Purchasing Managers' Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. You cannot invest directly in an index. |
4 | Allspring Special Small Cap Value Fund
Performance highlights (unaudited)
This Fund is currently closed to most new investors.*
| Investment objective | The Fund seeks long-term capital appreciation. |
| Manager | Allspring Funds Management, LLC |
| Subadviser | Allspring Global Investments, LLC |
| Portfolio managers | Brian Martin, CFA, James M. Tringas, CFA, Bryant VanCronkhite, CFA |
| Average annual total returns (%) as of March 31, 2023 | |||||||||||
| Including sales charge | Excluding sales charge | Expense ratios1 (%) | |||||||||
| Inception date | 1 year | 5 year | 10 year | 1 year | 5 year | 10 year | Gross | Net 2 | |||
| Class A (ESPAX) | 5-7-1993 | -12.74 | 3.87 | 8.30 | -7.41 | 5.11 | 8.94 | 1.24 | 1.24 | ||
| Class C (ESPCX) | 12-12-2000 | -9.11 | 4.34 | 8.30 | -8.11 | 4.34 | 8.30 | 1.99 | 1.99 | ||
| Class R (ESPHX)3 | 9-30-2015 | – | – | – | -7.63 | 4.85 | 8.68 | 1.49 | 1.49 | ||
| Class R6 (ESPRX)4 | 10-31-2014 | – | – | – | -7.02 | 5.56 | 9.41 | 0.81 | 0.81 | ||
| Administrator Class (ESPIX) | 7-23-1996 | – | – | – | -7.33 | 5.20 | 9.09 | 1.16 | 1.16 | ||
| Institutional Class (ESPNX) | 7-30-2010 | – | – | – | -7.11 | 5.46 | 9.34 | 0.91 | 0.91 | ||
| Russell 2000® Value Index5 | – | – | – | – | -12.96 | 4.55 | 7.22 | – | – | ||
Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on an investment in a fund. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, allspringglobal.com.
Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.
For Class A shares, the maximum front-end sales charge is 5.75%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Class R, Class R6, Administrator Class and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.
| 1 | Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report. |
| 2 | The manager has contractually committed through July 31, 2023, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 1.31% for Class A, 2.06% for Class C, 1.56% for Class R, 0.89% for Class R6, 1.20% for Administrator Class, and 0.94% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense caps. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. Without these caps, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses. |
| 3 | Historical performance shown for the Class R shares prior to their inception reflects the performance of the Institutional Class shares, adjusted to reflect the higher expenses applicable to the Class R shares. |
| 4 | Historical performance shown for the Class R6 shares prior to their inception reflects the performance of the Institutional Class shares, and includes the higher expenses applicable to the Institutional Class shares. If these expenses had not been included, returns for the Class R6 shares would be higher. |
| 5 | The Russell 2000® Value Index measures the performance of those Russell 2000 companies with lower price/book ratios and lower forecasted growth values. You cannot invest directly in an index. |
Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Smaller-company stocks tend to be more volatile and less liquid than those of larger companies. Consult the Fund’s prospectus for additional information on these and other risks.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
* Please see the Fund’s current Statement of Additional Information for further details.
6 | Allspring Special Small Cap Value Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of March 31, 20231
| 1 | The chart compares the performance of Class A shares for the most recent ten years with the Russell 2000® Value Index. The chart assumes a hypothetical investment of $10,000 in Class A shares and reflects all operating expenses and assumes the maximum initial sales charge of 5.75%. |
Allspring Special Small Cap Value Fund | 7
Performance highlights (unaudited)
MANAGER'S DISCUSSION
Fund highlights
| ■ | The Fund outperformed its benchmark, the Russell 2000® Value Index, for the 12-month period that ended March 31, 2023. |
| ■ | Stock selection in the industrials and materials sectors, along with overweights to these outperforming sectors, contributed to relative performance. |
| ■ | Stock selection in the consumer discretionary and energy sectors and an underweight to the consumer discretionary sector detracted from relative performance. |
The Russell 2000® Value Index returned -12.96% over the 12-month period.
Equity markets and small-cap value stocks experienced significant volatility over the past 12 months as investors digested some of the most aggressive tightening by the Federal Reserve since the early 1980s in an attempt to battle rapidly rising inflation. This led to concerns that a recession was on the horizon and a sizable drawdown in both fixed income and equity markets.
The Fund outperformed its index, over the 12-month period, as we expect our investment process to do in most market drawdowns. Our bottom-up process is designed to seek companies that can control their own destiny via clear competitive advantages, strong and sustainable free cash flows, and flexible balance sheets that can be used to grow shareholder value regardless of the macroeconomic environment.
The Fund made minor changes to sector positioning. We increased the Fund’s allocation to industrials, as we believed short-term inflationary pressures unfairly weighed on valuations. The Fund decreased its weight in the consumer discretionary sector over the period as raw material cost increases and post-COVID-19 supply chain issues caused inventory concerns and affected reward/risk levels.
| Ten largest holdings (%) as of March 31, 20231 | |
| Mueller Industries Incorporated | 3.49 |
| Innospec Incorporated | 3.35 |
| J & J Snack Foods Corporation | 2.93 |
| Franklin Electric Company Incorporated | 2.90 |
| Eagle Materials Incorporated | 2.84 |
| Avient Corporation | 2.65 |
| CSW Industrials Incorporated | 2.25 |
| Belden Incorporated | 1.94 |
| Spectrum Brands Holdings Incorporated | 1.88 |
| NewMarket Corporation | 1.73 |
| 1 | Figures represent the percentage of the Fund's net assets. Holdings are subject to change and may have changed since the date specified. |
Key contributors included stock selection in the industrials and materials sectors as well as overweights to those two sectors.
Industrials holding Mueller Industries, Inc., was the Fund’s largest contributor. Mueller manufactures goods for the plumbing and HVAC markets. Mueller has demonstrated its ability to successfully navigate higher input costs through price increases and increased market share. Mueller’s balance sheet positions it well to continue its strategy of consolidating smaller industry players.
Innospec Inc. is a specialty chemicals producer in the materials sector. Aviation fuel is Innospec’s highest-margin business, which benefited from increasing global air traffic. The company continues to possess a debt-free balance sheet with significant financial flexibility that can be used to enhance shareholder returns.
| Sector allocation as of March 31, 20231 |
| 1 | Figures represent the percentage of the Fund's long-term investments. Allocations are subject to change and may have changed since the date specified. |
The Fund’s overweight to the industrials and materials sectors contributed to relative returns. This positioning is a byproduct of our reward/risk valuation process and also serves as a counterbalance to the Fund’s underweights to other economically sensitive sectors, such as financials. These sectors were two of the better-performing sectors within the index.
8 | Allspring Special Small Cap Value Fund
Performance highlights (unaudited)
Key detractors included stock selection in the consumer discretionary and energy sectors and an underweight to consumer discretionary.
Helen of Troy Ltd. is a leading consumer products company. Shares underperformed, reflecting a difficult environment for household durables with high retailer inventories. While the past year has been challenging, we believe several headwinds should begin to abate, including retailer destocking and cost reductions. A new distribution center should allow the company’s capital expenditures to drop considerably in the coming year, leading to a substantial improvement in free cash flow and increased balance sheet flexibility.
Southwestern Energy Co. is a natural gas producer in the U.S. Several acquisitions in recent years have broadened the scale of the business and the cash stream rose meaningfully in 2022. However, the mild winter—in the U.S. and globally—pressured prices for this energy source and led to weakness in producers, including Southwestern.
An underweight to the consumer discretionary sector detracted from performance. Our underweight is driven by our reward/risk process that has found better value and superior financial flexibility in other sectors.
We expect continued market volatility over the near term as investors digest slowing economic data and higher long-term borrowing costs.
Investors’ focus on inflation and monetary policy will likely progress to increased concern around earnings deterioration. Decades of margin expansion are at risk of moving in the opposite direction as tax policy, labor challenges, broad inflation, supply chain modifications/onshoring, and an energy transition all weigh on margin potential. Pricing power at the product/service level will remain a leading indicator of business success.
As active managers, we look to take advantage of the changing interest rate dynamic and the effect it has on a company’s financial flexibility. While some companies will feel the impact from a higher cost of capital, we expect our holdings to flex their superior balance sheets and be better positioned for the future. We take comfort in the defensive capabilities of our stock selection process to protect capital as economic headwinds increase, but we also appreciate our company’s ability to “play offense” and deploy capital when accretive opportunities present themselves.
Allspring Special Small Cap Value Fund | 9
Fund expenses (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period from October 1, 2022 to March 31, 2023.
Actual expenses
The “Actual” line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Actual” line under the heading entitled “Expenses paid during period” for your applicable class of shares to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The “Hypothetical” line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) and contingent deferred sales charges. Therefore, the “Hypothetical” line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning account value 10-1-2022 | Ending account value 3-31-2023 | Expenses paid during the period1 | Annualized net expense ratio | |
| Class A | ||||
| Actual | $1,000.00 | $1,151.27 | $ 6.81 | 1.27% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.60 | $ 6.39 | 1.27% |
| Class C | ||||
| Actual | $1,000.00 | $1,147.07 | $10.76 | 2.01% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,014.91 | $10.10 | 2.01% |
| Class R | ||||
| Actual | $1,000.00 | $1,150.13 | $ 8.09 | 1.51% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,017.40 | $ 7.59 | 1.51% |
| Class R6 | ||||
| Actual | $1,000.00 | $1,153.75 | $ 4.51 | 0.84% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.74 | $ 4.23 | 0.84% |
| Administrator Class | ||||
| Actual | $1,000.00 | $1,151.75 | $ 6.33 | 1.18% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.05 | $ 5.94 | 1.18% |
| Institutional Class | ||||
| Actual | $1,000.00 | $1,153.07 | $ 4.99 | 0.93% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.29 | $ 4.68 | 0.93% |
1 Expenses paid is equal to the annualized net expense ratio of each class multiplied by the average account value over the period, multiplied by 182 divided by 365 (to reflect the one-half-year period).
10 | Allspring Special Small Cap Value Fund
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Common stocks: 93.22% | |||||
| Communication services: 0.45% | |||||
| Media: 0.45% | |||||
| DallasNews Corporation Class A ♠ | 436,597 | $ 1,929,759 | |||
| Thryv Holdings Incorporated † | 931,700 | 21,485,002 | |||
| 23,414,761 | |||||
| Consumer discretionary: 4.97% | |||||
| Automobile components: 0.29% | |||||
| Holley Incorporated | 5,500,000 | 15,070,000 | |||
| Hotels, restaurants & leisure: 2.87% | |||||
| Denny’s Corporation ♠† | 4,604,112 | 51,381,890 | |||
| Dine Brands Global Incorporated ♠ | 920,243 | 62,245,237 | |||
| Jack in the Box Incorporated ## | 420,946 | 36,870,660 | |||
| 150,497,787 | |||||
| Household durables: 1.00% | |||||
| Helen of Troy Limited †## | 525,193 | 49,982,618 | |||
| Tupperware Brands Corporation ♠† | 901,842 | 2,254,605 | |||
| 52,237,223 | |||||
| Textiles, apparel & luxury goods: 0.81% | |||||
| Delta Apparel Incorporated ♠† | 602,202 | 6,624,222 | |||
| Levi Strauss & Company Class A | 362,148 | 6,601,958 | |||
| Steven Madden Limited | 806,800 | 29,044,800 | |||
| 42,270,980 | |||||
| Consumer staples: 9.08% | |||||
| Beverages: 0.90% | |||||
| Primo Water Corporation | 3,079,389 | 47,268,621 | |||
| Food products: 4.70% | |||||
| J & J Snack Foods Corporation ♠ | 1,032,637 | 153,057,456 | |||
| Nomad Foods Limited † | 3,688,128 | 69,115,519 | |||
| Tootsie Roll Industries Incorporated | 528,111 | 23,717,474 | |||
| 245,890,449 | |||||
| Household products: 3.48% | |||||
| Central Garden & Pet Company ♠† | 803,322 | 32,984,401 | |||
| Central Garden & Pet Company Class A † | 1,295,751 | 50,624,992 | |||
| Spectrum Brands Holdings Incorporated ## | 1,485,194 | 98,349,547 | |||
| 181,958,940 | |||||
| Energy: 6.02% | |||||
| Energy equipment & services: 1.62% | |||||
| Forum Energy Technologies Incorporated † | 189,844 | 4,827,733 | |||
| Liberty Oilfield Services Class A | 1,791,771 | 22,952,587 | |||
| Patterson-UTI Energy Incorporated | 4,866,148 | 56,933,932 | |||
| 84,714,252 |
The accompanying notes are an integral part of these financial statements.
Allspring Special Small Cap Value Fund | 11
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Oil, gas & consumable fuels: 4.40% | |||||
| Alto Ingredients Incorporated † | 1,346,903 | $ 2,020,355 | |||
| Berry Corporation | 2,149,686 | 16,875,035 | |||
| Callon Petroleum Company † | 499,230 | 16,694,251 | |||
| Chord Energy Corporation ## | 375,212 | 50,503,535 | |||
| Magnolia Oil & Gas Corporation Class A | 2,229,200 | 48,774,896 | |||
| Nordic American Tankers Limited | 3,190,911 | 12,636,008 | |||
| Northern Oil and Gas Incorporated | 929,760 | 28,218,216 | |||
| SM Energy Company | 182,400 | 5,136,384 | |||
| Southwestern Energy Company † | 9,857,980 | 49,289,900 | |||
| 230,148,580 | |||||
| Financials: 15.48% | |||||
| Banks: 5.84% | |||||
| Associated Banc Corporation | 2,156,756 | 38,778,473 | |||
| CVB Financial Corporation | 893,400 | 14,901,912 | |||
| First Hawaiian Incorporated | 1,115,958 | 23,022,214 | |||
| Hancock Whitney Corporation | 1,422,788 | 51,789,483 | |||
| Renasant Corporation | 1,185,374 | 36,248,737 | |||
| South State Corporation | 781,795 | 55,710,712 | |||
| UMB Financial Corporation ## | 1,479,949 | 85,422,656 | |||
| 305,874,187 | |||||
| Capital markets: 1.10% | |||||
| Apollo Investment Corporation | 1,873,186 | 21,354,320 | |||
| Capitol Investment Corporation V | 1,250,000 | 509,375 | |||
| Glassbridge Enterprises Incorporated ♠♦† | 1,527 | 13,758 | |||
| New Mountain Finance Corporation | 2,515,550 | 30,614,244 | |||
| Pershing Square Escrow Shares ♦† | 1,415,995 | 1 | |||
| Westwood Holdings Group Incorporated ♠ | 446,683 | 5,007,316 | |||
| 57,499,014 | |||||
| Financial services: 0.84% | |||||
| Jackson Financial Incorporation Class A | 1,172,793 | 43,874,186 | |||
| Insurance: 4.62% | |||||
| Enstar Group Limited † | 324,502 | 75,216,319 | |||
| National Western Life Group Class A | 65,777 | 15,958,816 | |||
| ProAssurance Corporation | 1,230,100 | 22,732,248 | |||
| Stewart Information Services Corporation | 1,342,702 | 54,178,026 | |||
| The Hanover Insurance Group Incorporated | 573,577 | 73,704,645 | |||
| 241,790,054 | |||||
| Mortgage REITs: 3.08% | |||||
| AGNC Investment Corporation | 4,840,342 | 48,790,647 | |||
| Apollo Commercial Real Estate Finance Incorporated | 2,429,190 | 22,615,759 | |||
| New York Mortgage Trust Incorporated REIT | 2,977,701 | 29,657,902 | |||
| Two Harbors Investment Corporation | 4,089,086 | 60,150,455 | |||
| 161,214,763 |
The accompanying notes are an integral part of these financial statements.
12 | Allspring Special Small Cap Value Fund
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Health care: 4.72% | |||||
| Health care equipment & supplies: 1.12% | |||||
| Enovis Corporation | 493,100 | $ 26,375,919 | |||
| Varex Imaging Corporation † | 1,764,589 | 32,097,874 | |||
| 58,473,793 | |||||
| Health care providers & services: 1.60% | |||||
| AMN Healthcare Services Incorporated † | 128,700 | 10,676,952 | |||
| Owens & Minor Incorporated † | 1,127,934 | 16,411,440 | |||
| Patterson Companies Incorporated | 1,237,551 | 33,129,240 | |||
| Premier Incorporated Class A | 731,837 | 23,689,564 | |||
| 83,907,196 | |||||
| Life sciences tools & services: 0.94% | |||||
| Azenta Incorporated † | 1,107,141 | 49,400,631 | |||
| Pharmaceuticals: 1.06% | |||||
| Perrigo Company plc | 371,351 | 13,320,360 | |||
| Prestige Consumer Healthcare Incorporated † | 668,726 | 41,882,309 | |||
| 55,202,669 | |||||
| Industrials: 28.61% | |||||
| Aerospace & defense: 0.61% | |||||
| Parsons Corporation † | 711,516 | 31,833,226 | |||
| Air freight & logistics: 0.36% | |||||
| GXO Logistics Incorporated † | 371,957 | 18,768,950 | |||
| Building products: 7.24% | |||||
| CSW Industrials Incorporated ♠ | 846,863 | 117,654,677 | |||
| Griffon Corporation | 1,439,310 | 46,072,313 | |||
| Janus International Group Incorporated † | 2,513,602 | 24,784,116 | |||
| JELD-WEN Holding Incorporated † | 567,421 | 7,183,550 | |||
| Quanex Building Products Corporation ♠ | 2,799,480 | 60,272,804 | |||
| Simpson Manufacturing Company Incorporated | 600,831 | 65,875,111 | |||
| UFP Industries Incorporated | 681,559 | 54,163,494 | |||
| Zurn Elkay Water Solutions Corporation | 130,500 | 2,787,480 | |||
| 378,793,545 | |||||
| Commercial services & supplies: 2.04% | |||||
| ACCO Brands Corporation | 3,860,700 | 20,538,918 | |||
| Custom Truck One Source Incorporated | 3,475,000 | 23,595,250 | |||
| Ennis Incorporated ♠ | 1,253,422 | 26,434,670 | |||
| Harsco Corporation † | 680,399 | 4,647,125 | |||
| Matthews International Corporation Class A | 238,364 | 8,595,406 | |||
| Viad Corporation ♠† | 1,086,608 | 22,644,911 | |||
| 106,456,280 | |||||
| Construction & engineering: 1.56% | |||||
| APi Group Corporation † | 3,105,067 | 69,801,906 | |||
| MDU Resources Group Incorporated | 394,700 | 12,030,456 | |||
| 81,832,362 |
The accompanying notes are an integral part of these financial statements.
Allspring Special Small Cap Value Fund | 13
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Electrical equipment: 1.03% | |||||
| Atkore Incorporated †## | 327,809 | $ 46,050,608 | |||
| Babcock & Wilcox Enterprises Incorporated † | 1,261,206 | 7,642,908 | |||
| 53,693,516 | |||||
| Ground transportation: 0.79% | |||||
| Werner Enterprises Incorporated | 913,289 | 41,545,517 | |||
| Machinery: 12.04% | |||||
| Alamo Group Incorporated | 213,849 | 39,382,432 | |||
| Columbus McKinnon Corporation | 880,417 | 32,716,296 | |||
| Douglas Dynamics Incorporated ♠ | 1,880,021 | 59,953,870 | |||
| Franklin Electric Company Incorporated | 1,613,769 | 151,855,663 | |||
| Hillenbrand Incorporated | 670,557 | 31,871,574 | |||
| Hillman Group Incorporated | 3,622,900 | 30,504,818 | |||
| Hillman Solutions Corporation † | 2,378,762 | 20,029,176 | |||
| Kadant Incorporated | 268,889 | 56,068,734 | |||
| Mayville Engineering Company Incorporated ♠† | 1,649,424 | 24,609,406 | |||
| Mueller Industries Incorporated ♠ | 2,484,114 | 182,532,697 | |||
| NN Incorporated † | 686,098 | 734,125 | |||
| 630,258,791 | |||||
| Professional services: 2.02% | |||||
| CBIZ Incorporated † | 990,861 | 49,037,711 | |||
| Korn Ferry International | 1,097,937 | 56,807,260 | |||
| 105,844,971 | |||||
| Trading companies & distributors: 0.92% | |||||
| Air Lease Corporation | 989,100 | 38,940,867 | |||
| Custom Truck One Source Incorporated † | 1,323,493 | 8,986,517 | |||
| 47,927,384 | |||||
| Information technology: 5.48% | |||||
| Electronic equipment, instruments & components: 1.94% | |||||
| Belden Incorporated | 1,172,378 | 101,727,239 | |||
| Financial services: 0.32% | |||||
| Euronet Worldwide Incorporated † | 147,300 | 16,482,870 | |||
| IT services: 1.37% | |||||
| Global Blue Group Holding AG | 4,536,904 | 27,221,424 | |||
| Kyndryl Holdings Incorporated †## | 3,016,189 | 44,518,950 | |||
| 71,740,374 | |||||
| Professional services: 1.34% | |||||
| Concentrix Corporation | 202,700 | 24,638,185 | |||
| Maximus Incorporated | 579,400 | 45,598,780 | |||
| 70,236,965 | |||||
| Software: 0.51% | |||||
| E2open Parent Holding Incorporated † | 3,906,145 | 22,733,764 | |||
| Synchronoss Technologies Incorporated † | 4,327,500 | 4,067,850 | |||
| 26,801,614 |
The accompanying notes are an integral part of these financial statements.
14 | Allspring Special Small Cap Value Fund
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Materials: 16.94% | |||||
| Chemicals: 10.73% | |||||
| Avient Corporation | 3,365,084 | $ 138,506,857 | |||
| Diversey Holdings Limited † | 1,784,165 | 14,433,895 | |||
| Ecovyst Incorporated † | 4,156,614 | 45,930,585 | |||
| Element Solutions Incorporated | 523,792 | 10,114,424 | |||
| Innospec Incorporated ♠ | 1,709,094 | 175,472,681 | |||
| Mativ Holdings Inc ♠ | 3,164,910 | 67,950,618 | |||
| Minerals Technologies Incorporated | 300,956 | 18,183,762 | |||
| NewMarket Corporation | 248,493 | 90,694,975 | |||
| 561,287,797 | |||||
| Construction materials: 2.84% | |||||
| Eagle Materials Incorporated | 1,013,875 | 148,786,156 | |||
| Containers & packaging: 3.37% | |||||
| Myers Industries Incorporated | 1,707,960 | 36,601,583 | |||
| Silgan Holdings Incorporated | 1,486,165 | 79,762,476 | |||
| Trimas Corporation ♠ | 2,147,463 | 59,828,319 | |||
| 176,192,378 | |||||
| Real estate: 0.74% | |||||
| Office REITs: 0.17% | |||||
| Kilroy Realty Corporation | 279,000 | 9,039,600 | |||
| Residential REITs: 0.57% | |||||
| Washington REIT | 1,664,509 | 29,728,131 | |||
| Utilities: 0.73% | |||||
| Electric utilities: 0.73% | |||||
| Hawaiian Electric Industries Incorporated | 999,164 | 38,367,898 | |||
| Total Common stocks (Cost $4,317,104,120) | 4,878,053,650 |
| Investment companies: 0.54% | |||||
| Exchange-traded funds: 0.54% | |||||
| iShares Russell 2000 Value Index ETF | 205,000 | 28,089,100 | |||
| Total Investment companies (Cost $27,734,589) | 28,089,100 |
| Yield | |||||
| Short-term investments: 2.90% | |||||
| Investment companies: 2.90% | |||||
| Allspring Government Money Market Fund Select Class ♠∞ | 4.69% | 151,876,865 | 151,876,865 | ||
| Total Short-term investments (Cost $151,876,865) | 151,876,865 | ||||
| Total investments in securities (Cost $4,496,715,574) | 96.66% | 5,058,019,615 | |||
| Other assets and liabilities, net | 3.34 | 174,918,471 | |||
| Total net assets | 100.00% | $5,232,938,086 |
The accompanying notes are an integral part of these financial statements.
Allspring Special Small Cap Value Fund | 15
Portfolio of investments—March 31, 2023
| † | Non-income-earning security |
| ♦ | The security is fair valued in accordance with Allspring Funds Management's valuation procedures, as the Board-designated valuation designee. |
| ♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
| ∞ | The rate represents the 7-day annualized yield at period end. |
| ## | All or a portion of this security is segregated as collateral for investments in derivative instruments. |
| Abbreviations: | |
| REIT | Real estate investment trust |
The accompanying notes are an integral part of these financial statements.
16 | Allspring Special Small Cap Value Fund
Portfolio of investments—March 31, 2023
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
| Value, beginning of period | Purchases | Sales proceeds | Net realized gains (losses) | Net change in unrealized gains (losses) | Value, end of period | Shares, end of period | Income from affiliated securities | |||
| Common stocks | ||||||||||
| Central Garden & Pet Company† | $ 35,722,863 | $ 29,713 | $ (430,916) | $ (162,760) | $ (2,174,499) | $ 32,984,401 | 803,322 | $ 0 | ||
| CSW Industrials Incorporated | 100,337,313 | 2,986,656 | (4,061,225) | (67,770) | 18,459,703 | 117,654,677 | 846,863 | 583,733 | ||
| DallasNews Corporation Class A | 3,757,683 | 0 | (850,593) | (3,501,583) | 2,524,252 | 1,929,759 | 436,597 | 967,374 | ||
| Delta Apparel Incorporated† | 17,924,703 | 13,759 | 0 | 0 | (11,314,240) | 6,624,222 | 602,202 | 0 | ||
| Denny’s Corporation† | 64,584,064 | 1,586,415 | (501,952) | (88,027) | (14,198,610) | 51,381,890 | 4,604,112 | 0 | ||
| Dine Brands Global Incorporated | 81,172,687 | 375,260 | (8,802,460) | (1,468,448) | (9,031,802) | 62,245,237 | 920,243 | 2,484,987 | ||
| Douglas Dynamics Incorporated | 63,549,474 | 1,529,830 | 0 | 0 | (5,125,434) | 59,953,870 | 1,880,021 | 2,167,111 | ||
| Ennis Incorporated | 24,606,270 | 0 | (1,559,030) | (64,545) | �� | 3,451,975 | 26,434,670 | 1,253,422 | 1,276,624 | |
| Glassbridge Enterprises Incorporated† | 9,926 | 0 | 0 | 0 | 3,832 | 13,758 | 1,527 | 0 | ||
| Innospec Incorporated | 165,737,985 | 597,281 | (9,044,434) | (71,445) | 18,253,294 | 175,472,681 | 1,709,094 | 2,223,274 | ||
| J & J Snack Foods Corporation | 158,418,985 | 8,947,010 | (7,032,037) | (1,073,922) | (6,202,580) | 153,057,456 | 1,032,637 | 2,697,618 | ||
| Mativ Holdings Inc | 0 | 156,317,609 | (13,496,607) | (14,532,939) | (60,337,445) | 67,950,618 | 3,164,910 | 4,685,044 | ||
| Mayville Engineering Company Incorporated† | 8,013,580 | 7,510,978 | (631,403) | (177,954) | 9,894,205 | 24,609,406 | 1,649,424 | 0 | ||
| Mueller Industries Incorporated | 171,377,466 | 5,668,025 | (53,400,098) | 22,599,206 | 36,288,098 | 182,532,697 | 2,484,114 | 3,865,306 | ||
| Quanex Building Products Corporation | 56,833,951 | 2,235,611 | (259,601) | (19,171) | 1,482,014 | 60,272,804 | 2,799,480 | 889,281 | ||
| Trimas Corporation | 67,140,720 | 1,565,001 | (300,888) | (73,816) | (8,502,698) | 59,828,319 | 2,147,463 | 338,198 | ||
| Tupperware Brands Corporation† | 51,130,899 | 1,062,750 | (10,722,431) | (30,649,248) | (8,567,365) | 2,254,605 | 901,842 | 0 | ||
| Viad Corporation† | 42,137,421 | 1,235,320 | (5,622,052) | (2,441,330) | (12,664,448) | 22,644,911 | 1,086,608 | 0 | ||
| Westwood Holdings Group Incorporated | 6,843,184 | 0 | 0 | 0 | (1,835,868) | 5,007,316 | 446,683 | 268,010 | ||
| Short-term investments | ||||||||||
| Allspring Government Money Market Fund Select Class | 110,061,302 | 1,096,812,671 | (1,054,997,108) | 0 | 0 | 151,876,865 | 151,876,865 | 4,479,129 | ||
| Investments in affiliates no longer held at end of period | ||||||||||
| Neenah Incorporated | 61,082,785 | 76,658 | (98,150,707) | 0 | 36,991,264 | 0 | 0 | 0 | ||
| Securities Lending Cash Investments LLC | 3,452,615 | 83,594,760 | (87,048,154) | 779 | 0 | 0 | 0 | 214,081 # | ||
| $ (31,792,973) | $ (12,606,352) | $1,264,730,162 | $27,139,770 | |||||||
| † | Non-income-earning security |
| # | Amount shown represents income before fees and rebates. |
Written options
| Description | Counterparty | Number of contracts | Notional amount | Exercise price | Expiration date | Value |
| Call | ||||||
| Atkore International Incorporated | Bank of America Securities Incorporated | (250) | $(3,875,000) | $155.00 | 4-21-2023 | $ (22,499) |
The accompanying notes are an integral part of these financial statements.
Allspring Special Small Cap Value Fund | 17
Portfolio of investments—March 31, 2023
Written options (continued)
| Description | Counterparty | Number of contracts | Notional amount | Exercise price | Expiration date | Value |
| Call (continued) | ||||||
| Atkore International Incorporated | Bank of America Securities Incorporated | (200) | $(3,000,000) | $150.00 | 4-21-2023 | $ (31,000) |
| Atkore International Incorporated | Bank of America Securities Incorporated | (200) | (3,200,000) | 160.00 | 4-21-2023 | (9,500) |
| Chord Energy Corporation | Bank of America Securities Incorporated | (200) | (2,800,000) | 140.00 | 5-19-2023 | (114,000) |
| Helen of Troy Limited | Bank of America Securities Incorporated | (250) | (2,875,000) | 115.00 | 5-19-2023 | (63,125) |
| Helen of Troy Limited | Bank of America Securities Incorporated | (500) | (5,500,000) | 110.00 | 5-19-2023 | (180,000) |
| Helen of Troy Limited | Bank of America Securities Incorporated | (250) | (2,500,000) | 100.00 | 5-19-2023 | (177,500) |
| Jack In The Box Incorporated | Bank of America Securities Incorporated | (250) | (2,250,000) | 90.00 | 4-21-2023 | (38,125) |
| Kyndryl Holdings Incorporated | Bank of America Securities Incorporated | (1,000) | (1,800,000) | 18.00 | 6-16-2023 | (27,500) |
| Spectrum Brands Holdings Incorporated | Bank of America Securities Incorporated | (250) | (1,875,000) | 75.00 | 7-21-2023 | (110,000) |
| UMB Financial Corporation | Bank of America Securities Incorporated | (250) | (1,625,000) | 65.00 | 4-21-2023 | (18,750) |
| Put | ||||||
| Belden Incorporated | Bank of America Securities Incorporated | 250 | 2,000,000 | 80.00 | 4-21-2023 | (6,250) |
| Denny’s Corporation | Bank of America Securities Incorporated | 1,000 | 1,250,000 | 12.50 | 5-19-2023 | (147,500) |
| Helen of Troy Limited | Bank of America Securities Incorporated | 250 | 2,250,000 | 90.00 | 4-21-2023 | (68,125) |
| Helen of Troy Limited | Bank of America Securities Incorporated | 250 | 2,375,000 | 95.00 | 5-19-2023 | (220,000) |
| Helen of Troy Limited | Bank of America Securities Incorporated | 250 | 2,250,000 | 90.00 | 5-19-2023 | (167,500) |
| Helen of Troy Limited | Bank of America Securities Incorporated | 250 | 2,000,000 | 80.00 | 5-19-2023 | (93,750) |
| Jackson Financial Incorporation | Bank of America Securities Incorporated | 500 | 2,000,000 | 40.00 | 4-21-2023 | (162,500) |
| Quanex Building Products Corporation | Bank of America Securities Incorporated | 500 | 1,000,000 | 20.00 | 6-16-2023 | (46,250) |
| UFP Industries Incorporated | Bank of America Securities Incorporated | 500 | 4,000,000 | 80.00 | 4-21-2023 | (97,500) |
| $(1,801,374) |
The accompanying notes are an integral part of these financial statements.
18 | Allspring Special Small Cap Value Fund
Statement of assets and liabilities—March 31, 2023
| Assets | |
Investments in unaffiliated securities, at value (cost $3,380,413,185) | $ 3,793,289,453 |
Investments in affiliated securities, at value (cost $1,116,302,389) | 1,264,730,162 |
Cash | 658,506 |
Cash at broker segregated cash for written options | 19,124,952 |
Receivable for Fund shares sold | 161,581,890 |
Receivable for investments sold | 8,467,901 |
Receivable for dividends | 8,081,104 |
Receivable for securities lending income, net | 6,819 |
Prepaid expenses and other assets | 295,836 |
Total assets | 5,256,236,623 |
| Liabilities | |
Payable for investments purchased | 11,832,470 |
Payable for Fund shares redeemed | 5,337,926 |
Management fee payable | 3,537,284 |
Written options at value (premiums received $2,232,366) | 1,801,374 |
Administration fees payable | 500,007 |
Distribution fees payable | 7,810 |
Trustees’ fees and expenses payable | 5,160 |
Accrued expenses and other liabilities | 276,506 |
Total liabilities | 23,298,537 |
Total net assets | $5,232,938,086 |
| Net assets consist of | |
Paid-in capital | $ 4,711,335,830 |
Total distributable earnings | 521,602,256 |
Total net assets | $5,232,938,086 |
| Computation of net asset value and offering price per share | |
Net assets – Class A | $ 721,397,119 |
Shares outstanding – Class A1 | 20,267,733 |
Net asset value per share – Class A | $35.59 |
Maximum offering price per share – Class A2 | $37.76 |
Net assets – Class C | $ 7,115,718 |
Shares outstanding – Class C1 | 228,171 |
Net asset value per share – Class C | $31.19 |
Net assets – Class R | $ 13,092,694 |
Shares outstanding – Class R1 | 361,860 |
Net asset value per share – Class R | $36.18 |
Net assets – Class R6 | $ 1,659,114,555 |
Shares outstanding – Class R61 | 45,248,736 |
Net asset value per share – Class R6 | $36.67 |
Net assets – Administrator Class | $ 105,845,543 |
Shares outstanding – Administrator Class1 | 2,886,808 |
Net asset value per share – Administrator Class | $36.67 |
Net assets – Institutional Class | $ 2,726,372,457 |
Shares outstanding – Institutional Class1 | 74,336,691 |
Net asset value per share – Institutional Class | $36.68 |
| 1 | The Fund has an unlimited number of authorized shares. |
| 2 | Maximum offering price is computed as 100/94.25 of net asset value. On investments of $50,000 or more, the offering price is reduced. |
The accompanying notes are an integral part of these financial statements.
Allspring Special Small Cap Value Fund | 19
Statement of operations—year ended March 31, 2023
| Investment income | |
Dividends (net of foreign withholdings taxes of $133,895) | $ 82,071,306 |
Income from affiliated securities | 27,186,694 |
Total investment income | 109,258,000 |
| Expenses | |
Management fee | 40,823,850 |
| Administration fees | |
Class A | 1,548,093 |
Class C | 18,005 |
Class R | 28,364 |
Class R6 | 492,104 |
Administrator Class | 152,321 |
Institutional Class | 3,568,716 |
| Shareholder servicing fees | |
Class A | 1,842,968 |
Class C | 21,389 |
Class R | 33,766 |
Administrator Class | 283,073 |
| Distribution fees | |
Class C | 64,119 |
Class R | 33,631 |
Custody and accounting fees | 435,168 |
Professional fees | 85,726 |
Registration fees | 153,592 |
Shareholder report expenses | 456,959 |
Trustees’ fees and expenses | 29,239 |
Other fees and expenses | 159,838 |
Total expenses | 50,230,921 |
| Less: Fee waivers and/or expense reimbursements | |
Class A | (1,214) |
Class C | (1) |
Administrator Class | (811) |
Institutional Class | (26,533) |
Net expenses | 50,202,362 |
Net investment income | 59,055,638 |
| Realized and unrealized gains (losses) on investments | |
| Net realized gains (losses) on | |
Unaffiliated securities | 23,497,467 |
Affiliated securities | (31,792,973) |
Written options | 22,300,972 |
Net realized gains on investments | 14,005,466 |
| Net change in unrealized gains (losses) on | |
Unaffiliated securities | (481,107,419) |
Affiliated securities | (12,606,352) |
Written options | 716,871 |
Net change in unrealized gains (losses) on investments | (492,996,900) |
Net realized and unrealized gains (losses) on investments | (478,991,434) |
Net decrease in net assets resulting from operations | $(419,935,796) |
The accompanying notes are an integral part of these financial statements.
20 | Allspring Special Small Cap Value Fund
Statement of changes in net assets
| Year ended March 31, 2023 | Year ended March 31, 2022 | |||
| Operations | ||||
Net investment income | $ 59,055,638 | $ 27,875,748 | ||
Net realized gains on investments | 14,005,466 | 476,640,248 | ||
Net change in unrealized gains (losses) on investments | (492,996,900) | (343,672,729) | ||
Net increase (decrease) in net assets resulting from operations | (419,935,796) | 160,843,267 | ||
| Distributions to shareholders from | ||||
| Net investment income and net realized gains | ||||
Class A | (42,591,589) | (50,783,331) | ||
Class C | (463,826) | (807,798) | ||
Class R | (726,448) | (917,911) | ||
Class R6 | (100,176,931) | (114,036,990) | ||
Administrator Class | (6,550,499) | (11,844,857) | ||
Institutional Class | (155,567,068) | (204,793,322) | ||
Total distributions to shareholders | (306,076,361) | (383,184,209) | ||
| Capital share transactions | Shares | Shares | ||
| Proceeds from shares sold | ||||
Class A | 3,144,073 | 115,444,516 | 4,280,098 | 184,277,105 |
Class C | 8,201 | 261,543 | 8,749 | 336,570 |
Class R | 77,769 | 2,911,756 | 103,689 | 4,505,291 |
Class R6 | 10,101,086 | 381,018,452 | 15,549,670 | 685,689,346 |
Administrator Class | 403,179 | 15,229,744 | 885,087 | 39,305,726 |
Institutional Class | 22,900,867 | 864,224,769 | 24,127,132 | 1,060,759,280 |
| 1,379,090,780 | 1,974,873,318 | |||
| Reinvestment of distributions | ||||
Class A | 1,122,650 | 39,439,381 | 1,121,289 | 46,807,127 |
Class C | 14,894 | 457,404 | 21,112 | 778,823 |
Class R | 20,361 | 726,448 | 21,670 | 917,911 |
Class R6 | 2,638,058 | 95,564,223 | 2,465,581 | 106,043,414 |
Administrator Class | 178,990 | 6,477,362 | 273,495 | 11,744,267 |
Institutional Class | 3,335,094 | 120,823,133 | 3,574,870 | 153,704,110 |
| 263,487,951 | 319,995,652 | |||
| Payment for shares redeemed | ||||
Class A | (3,531,086) | (129,875,544) | (4,682,744) | (200,722,890) |
Class C | (94,383) | (3,023,154) | (101,436) | (3,882,504) |
Class R | (96,511) | (3,584,025) | (107,696) | (4,664,636) |
Class R6 | (9,526,745) | (365,341,881) | (12,714,796) | (559,504,556) |
Administrator Class | (933,530) | (35,066,154) | (2,444,640) | (105,093,900) |
Institutional Class | (27,975,810) | (1,063,646,250) | (22,927,729) | (1,005,623,154) |
| (1,600,537,008) | (1,879,491,640) | |||
Net increase in net assets resulting from capital share transactions | 42,041,723 | 415,377,330 | ||
Total increase (decrease) in net assets | (683,970,434) | 193,036,388 | ||
| Net assets | ||||
Beginning of period | 5,916,908,520 | 5,723,872,132 | ||
End of period | $ 5,232,938,086 | $ 5,916,908,520 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Special Small Cap Value Fund | 21
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $40.81 | $42.37 | $23.39 | $31.74 | $34.42 |
Net investment income | 0.29 | 0.07 | 0.14 1 | 0.24 | 0.22 |
Net realized and unrealized gains (losses) on investments | (3.35) | 1.07 | 18.98 | (8.00) | (0.69) |
Total from investment operations | (3.06) | 1.14 | 19.12 | (7.76) | (0.47) |
| Distributions to shareholders from | |||||
Net investment income | (0.25) | (0.10) | (0.13) | (0.28) | (0.15) |
Net realized gains | (1.91) | (2.60) | (0.01) | (0.31) | (2.06) |
Total distributions to shareholders | (2.16) | (2.70) | (0.14) | (0.59) | (2.21) |
Net asset value, end of period | $35.59 | $40.81 | $42.37 | $23.39 | $31.74 |
Total return2 | (7.41)% | 2.56% | 81.92% | (25.08)% | (0.87)% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.26% | 1.24% | 1.27% | 1.27% | 1.29% |
Net expenses | 1.26% | 1.24% | 1.27% | 1.27% | 1.29% |
Net investment income | 0.82% | 0.17% | 0.43% | 0.75% | 0.67% |
| Supplemental data | |||||
Portfolio turnover rate | 22% | 28% | 40% | 39% | 32% |
Net assets, end of period (000s omitted) | $721,397 | $797,067 | $797,193 | $381,058 | $526,656 |
| 1 | Calculated based upon average shares outstanding |
| 2 | Total return calculations do not include any sales charges. |
The accompanying notes are an integral part of these financial statements.
22 | Allspring Special Small Cap Value Fund
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $36.04 | $37.90 | $20.99 | $28.49 | $31.21 |
Net investment income (loss) | 0.02 1 | (0.22) 1 | (0.08) 1 | (0.01) 1 | (0.05) 1 |
Net realized and unrealized gains (losses) on investments | (2.96) | 0.96 | 17.00 | (7.18) | (0.61) |
Total from investment operations | (2.94) | 0.74 | 16.92 | (7.19) | (0.66) |
| Distributions to shareholders from | |||||
Net realized gains | (1.91) | (2.60) | (0.01) | (0.31) | (2.06) |
Net asset value, end of period | $31.19 | $36.04 | $37.90 | $20.99 | $28.49 |
Total return2 | (8.11)% | 1.79% | 80.71% | (25.65)% | (1.63)% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 2.01% | 1.99% | 2.01% | 2.02% | 2.04% |
Net expenses | 2.01% | 1.99% | 2.01% | 2.02% | 2.04% |
Net investment income (loss) | 0.06% | (0.58)% | (0.29)% | (0.04)% | (0.13)% |
| Supplemental data | |||||
Portfolio turnover rate | 22% | 28% | 40% | 39% | 32% |
Net assets, end of period (000s omitted) | $7,116 | $10,792 | $14,063 | $11,419 | $24,334 |
| 1 | Calculated based upon average shares outstanding |
| 2 | Total return calculations do not include any sales charges. |
The accompanying notes are an integral part of these financial statements.
Allspring Special Small Cap Value Fund | 23
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class R | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $41.44 | $43.01 | $23.73 | $32.20 | $34.94 |
Net investment income (loss) | 0.21 | (0.03) | 0.07 | 0.16 | 0.18 |
Net realized and unrealized gains (losses) on investments | (3.41) | 1.07 | 19.25 | (8.12) | (0.74) |
Total from investment operations | (3.20) | 1.04 | 19.32 | (7.96) | (0.56) |
| Distributions to shareholders from | |||||
Net investment income | (0.15) | (0.01) | (0.03) | (0.20) | (0.12) |
Net realized gains | (1.91) | (2.60) | (0.01) | (0.31) | (2.06) |
Total distributions to shareholders | (2.06) | (2.61) | (0.04) | (0.51) | (2.18) |
Net asset value, end of period | $36.18 | $41.44 | $43.01 | $23.73 | $32.20 |
Total return | (7.63)% | 2.27% | 81.50% | (25.29)% | (1.11)% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.51% | 1.49% | 1.51% | 1.52% | 1.55% |
Net expenses | 1.51% | 1.49% | 1.51% | 1.52% | 1.55% |
Net investment income (loss) | 0.57% | (0.08)% | 0.13% | 0.46% | 0.47% |
| Supplemental data | |||||
Portfolio turnover rate | 22% | 28% | 40% | 39% | 32% |
Net assets, end of period (000s omitted) | $13,093 | $14,929 | $14,733 | $5,209 | $6,656 |
The accompanying notes are an integral part of these financial statements.
24 | Allspring Special Small Cap Value Fund
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class R6 | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $41.98 | $43.51 | $24.00 | $32.55 | $35.25 |
Net investment income | 0.46 | 0.26 1 | 0.28 | 0.37 | 0.38 |
Net realized and unrealized gains (losses) on investments | (3.45) | 1.10 | 19.49 | (8.17) | (0.72) |
Total from investment operations | (2.99) | 1.36 | 19.77 | (7.80) | (0.34) |
| Distributions to shareholders from | |||||
Net investment income | (0.41) | (0.29) | (0.25) | (0.44) | (0.30) |
Net realized gains | (1.91) | (2.60) | (0.01) | (0.31) | (2.06) |
Total distributions to shareholders | (2.32) | (2.89) | (0.26) | (0.75) | (2.36) |
Net asset value, end of period | $36.67 | $41.98 | $43.51 | $24.00 | $32.55 |
Total return | (7.02)% | 2.99% | 82.77% | (24.78)% | (0.42)% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 0.83% | 0.81% | 0.84% | 0.84% | 0.86% |
Net expenses | 0.83% | 0.81% | 0.84% | 0.84% | 0.86% |
Net investment income | 1.25% | 0.59% | 0.84% | 1.12% | 1.16% |
| Supplemental data | |||||
Portfolio turnover rate | 22% | 28% | 40% | 39% | 32% |
Net assets, end of period (000s omitted) | $1,659,115 | $1,764,529 | $1,598,341 | $580,535 | $518,377 |
| 1 | Calculated based upon average shares outstanding |
The accompanying notes are an integral part of these financial statements.
Allspring Special Small Cap Value Fund | 25
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $41.96 | $43.50 | $24.00 | $32.55 | $35.22 |
Net investment income | 0.35 1 | 0.11 1 | 0.16 1 | 0.26 1 | 0.27 1 |
Net realized and unrealized gains (losses) on investments | (3.46) | 1.09 | 19.48 | (8.18) | (0.71) |
Total from investment operations | (3.11) | 1.20 | 19.64 | (7.92) | (0.44) |
| Distributions to shareholders from | |||||
Net investment income | (0.27) | (0.14) | (0.13) | (0.32) | (0.17) |
Net realized gains | (1.91) | (2.60) | (0.01) | (0.31) | (2.06) |
Total distributions to shareholders | (2.18) | (2.74) | (0.14) | (0.63) | (2.23) |
Net asset value, end of period | $36.67 | $41.96 | $43.50 | $24.00 | $32.55 |
Total return | (7.33)% | 2.62% | 82.13% | (25.03)% | (0.77)% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.17% | 1.16% | 1.19% | 1.19% | 1.21% |
Net expenses | 1.17% | 1.16% | 1.18% | 1.19% | 1.20% |
Net investment income | 0.91% | 0.26% | 0.51% | 0.79% | 0.74% |
| Supplemental data | |||||
Portfolio turnover rate | 22% | 28% | 40% | 39% | 32% |
Net assets, end of period (000s omitted) | $105,846 | $135,870 | $196,801 | $105,286 | $160,369 |
| 1 | Calculated based upon average shares outstanding |
The accompanying notes are an integral part of these financial statements.
26 | Allspring Special Small Cap Value Fund
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Institutional Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $41.98 | $43.52 | $24.01 | $32.56 | $35.27 |
Net investment income | 0.44 | 0.22 1 | 0.25 1 | 0.31 | 0.33 |
Net realized and unrealized gains (losses) on investments | (3.46) | 1.08 | 19.50 | (8.14) | (0.70) |
Total from investment operations | (3.02) | 1.30 | 19.75 | (7.83) | (0.37) |
| Distributions to shareholders from | |||||
Net investment income | (0.37) | (0.24) | (0.23) | (0.41) | (0.28) |
Net realized gains | (1.91) | (2.60) | (0.01) | (0.31) | (2.06) |
Total distributions to shareholders | (2.28) | (2.84) | (0.24) | (0.72) | (2.34) |
Net asset value, end of period | $36.68 | $41.98 | $43.52 | $24.01 | $32.56 |
Total return | (7.11)% | 2.87% | 82.59% | (24.85)% | (0.53)% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 0.93% | 0.91% | 0.94% | 0.94% | 0.96% |
Net expenses | 0.93% | 0.91% | 0.93% | 0.94% | 0.94% |
Net investment income | 1.14% | 0.49% | 0.77% | 1.07% | 1.04% |
| Supplemental data | |||||
Portfolio turnover rate | 22% | 28% | 40% | 39% | 32% |
Net assets, end of period (000s omitted) | $2,726,372 | $3,193,721 | $3,102,741 | $1,465,398 | $1,359,038 |
| 1 | Calculated based upon average shares outstanding |
The accompanying notes are an integral part of these financial statements.
Allspring Special Small Cap Value Fund | 27
Notes to financial statements
1. ORGANIZATION
Allspring Funds Trust (the "Trust"), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Allspring Special Small Cap Value Fund (the "Fund") which is a diversified series of the Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Securities valuation
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities and exchange-traded funds that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.
Options that are listed on a foreign or domestic exchange or market are valued at the closing mid-price. Non-listed options are valued at the evaluated price provided by an independent pricing service or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value. Interests in non-registered investment companies that are redeemable at net asset value are fair valued normally at net asset value.
Investments which are not valued using the methods discussed above are valued at their fair value, as determined in good faith by Allspring Funds Management, LLC ("Allspring Funds Management"), which was named the valuation designee by the Board of Trustees. As the valuation designee, Allspring Funds Management is responsible for day-to-day valuation activities for the Allspring Funds. In connection with these responsibilities, Allspring Funds Management has established a Valuation Committee and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities. On a quarterly basis, the Board of Trustees receives reports of valuation actions taken by the Valuation Committee. On at least an annual basis, the Board of Trustees receives an assessment of the adequacy and effectiveness of Allspring Funds Management's process for determining the fair value of the portfolio of investments.
Securities lending
During the period, the Fund participated in a program to lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. When securities were on loan, the Fund received interest or dividends on those securities. Cash collateral received in connection with its securities lending transactions was invested in Securities Lending Cash Investments, LLC (the "Securities Lending Fund"), an affiliated non-registered investment company. Effective at the close of business on March 29, 2023, the Fund is no longer participating in the securities lending program and the Securities Lending Fund was liquidated. Securities Lending Fund was managed by Allspring Funds Management and was subadvised by Allspring Global Investments, LLC ("Allspring Investments"), an affiliate of Allspring Funds Management and wholly owned subsidiary of Allspring Global Investments Holdings, LLC. Allspring Funds Management received an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Securities Lending Fund increased. All of the fees received by Allspring Funds Management were paid to Allspring Investments for its services as subadviser.
Investments in Securities Lending Fund were valued at the evaluated bid price provided by an independent pricing service. Income earned from investment in the Securities Lending Fund (net of fees and rebates), if any, is included in income from affiliated securities on the Statement of Operations.
In a securities lending transaction, the net asset value of the Fund is affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of the instrument in which collateral is invested. The amount of securities lending activity undertaken by the Fund fluctuates from time to time. The Fund has the right under the lending
28 | Allspring Special Small Cap Value Fund
Notes to financial statements
agreement to recover the securities from the borrower on demand. In the event of default or bankruptcy by the borrower, the Fund may be prevented from recovering the loaned securities or gaining access to the collateral or may experience delays or costs in doing so. In such an event, the terms of the agreement allow the unaffiliated securities lending agent to use the collateral to purchase replacement securities on behalf of the Fund or pay the Fund the market value of the loaned securities. The Fund bears the risk of loss with respect to depreciation of its investment of the cash collateral.
Options
The Fund may write covered call options or secured put options on individual securities and/or indexes. When the Fund writes an option, an amount equal to the premium received is recorded as a liability and is subsequently adjusted to the current market value of the written option. Premiums received from written options that expire unexercised are recognized as realized gains on the expiration date. For exercised options, the difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is treated as a realized gain or loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in calculating the realized gain or loss on the sale. If a put option is exercised, the premium reduces the cost of the security purchased. The Fund, as a writer of an option, bears the market risk of an unfavorable change in the price of the security and/or index underlying the written option.
The Fund may also purchase call or put options. Premiums paid are included in the Statement of Assets and Liabilities as investments, the values of which are subsequently adjusted based on the current market values of the options. Premiums paid for purchased options that expire are recognized as realized losses on the expiration date. Premiums paid for purchased options that are exercised or closed are added to the amount paid or offset against the proceeds received for the underlying security to determine the realized gain or loss. The risk of loss associated with purchased options is limited to the premium paid.
Options traded on an exchange are regulated and terms of the options are standardized. The Fund is subject to equity price risk. Purchased options traded over-the-counter expose the Fund to counterparty risk in the event the counterparty does not perform. This risk can be mitigated by having a master netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.
Security transactions and income recognition
Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.
Dividend income is recognized on the ex-dividend date. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.
Income dividends and capital gain distributions from investment companies are recorded on the ex-dividend date. Capital gain distributions from investment companies are treated as realized gains.
Distributions to shareholders
Distributions to shareholders from net investment income and any net realized gains are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund's fiscal year end. Therefore, a portion of the Fund's distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
Federal and other taxes
The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.
The Fund’s income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. Management has analyzed the Fund's tax positions taken on federal, state, and foreign tax returns, as applicable, for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
As of March 31, 2023, the aggregate cost of all investments for federal income tax purposes was $4,540,445,851 and the unrealized gains (losses) consisted of:
| Gross unrealized gains | $1,014,397,581 |
| Gross unrealized losses | (496,392,824) |
| Net unrealized gains | $ 518,004,757 |
Allspring Special Small Cap Value Fund | 29
Notes to financial statements
As of March 31, 2023, the Fund had current year deferred post-October capital losses consisting of $4,651,190 in long-term capital losses which will be recognized in the first day of the following fiscal year.
Class allocations
The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.
3. FAIR VALUATION MEASUREMENTS
Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
| ■ | Level 1 – quoted prices in active markets for identical securities |
| ■ | Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) |
| ■ | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of March 31, 2023:
| Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
| Assets | ||||
| Investments in: | ||||
| Common stocks | ||||
| Communication services | $ 23,414,761 | $ 0 | $0 | $ 23,414,761 |
| Consumer discretionary | 260,075,990 | 0 | 0 | 260,075,990 |
| Consumer staples | 475,118,010 | 0 | 0 | 475,118,010 |
| Energy | 314,862,832 | 0 | 0 | 314,862,832 |
| Financials | 810,238,445 | 13,759 | 0 | 810,252,204 |
| Health care | 246,984,289 | 0 | 0 | 246,984,289 |
| Industrials | 1,496,954,542 | 0 | 0 | 1,496,954,542 |
| Information technology | 286,989,062 | 0 | 0 | 286,989,062 |
| Materials | 886,266,331 | 0 | 0 | 886,266,331 |
| Real estate | 38,767,731 | 0 | 0 | 38,767,731 |
| Utilities | 38,367,898 | 0 | 0 | 38,367,898 |
| Investment companies | 28,089,100 | 0 | 0 | 28,089,100 |
| Short-term investments | ||||
| Investment companies | 151,876,865 | 0 | 0 | 151,876,865 |
| Total assets | $5,058,005,856 | $13,759 | $0 | $5,058,019,615 |
| Liabilities | ||||
| Written options | $ 1,795,124 | $ 6,250 | $0 | $ 1,801,374 |
| Total liabilities | $ 1,795,124 | $ 6,250 | $0 | $ 1,801,374 |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the year ended March 31, 2023, the Fund did not have any transfers into/out of Level 3.
30 | Allspring Special Small Cap Value Fund
Notes to financial statements
4. TRANSACTIONS WITH AFFILIATES
Management fee
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Allspring Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Allspring Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:
| Average daily net assets | Management fee |
| First $500 million | 0.850% |
| Next $500 million | 0.825 |
| Next $1 billion | 0.800 |
| Next $1 billion | 0.775 |
| Next $1 billion | 0.750 |
| Next $1 billion | 0.730 |
| Next $5 billion | 0.720 |
| Over $10 billion | 0.710 |
For the year ended March 31, 2023, the management fee was equivalent to an annual rate of 0.78% of the Fund’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Investments is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.55% and declining to 0.40% as the average daily net assets of the Fund increase.
Administration fees
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:
| Class-level administration fee | |
| Class A | 0.21% |
| Class C | 0.21 |
| Class R | 0.21 |
| Class R6 | 0.03 |
| Administrator Class | 0.13 |
| Institutional Class | 0.13 |
Waivers and/or expense reimbursements
Allspring Funds Management has contractually committed to waive and/or reimburse management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Allspring Funds Management will waive fees and/or reimburse expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Allspring Funds Management has contractually committed through July 31, 2023 to waive fees and/or reimburse expenses to the extent necessary to cap
Allspring Special Small Cap Value Fund | 31
Notes to financial statements
expenses. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. As of March 31, 2023, the contractual expense caps are as follows:
| Expense ratio caps | |
| Class A | 1.31% |
| Class C | 2.06 |
| Class R | 1.56 |
| Class R6 | 0.89 |
| Administrator Class | 1.20 |
| Institutional Class | 0.94 |
Distribution fees
The Trust has adopted a distribution plan for Class C and Class R shares pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are charged to Class C and Class R shares and paid to Allspring Funds Distributor, LLC ("Allspring Funds Distributor"), the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.75% of the average daily net assets of Class C shares and up to 0.25% of the average daily net assets of Class R shares.
In addition, Allspring Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Allspring Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the year ended March 31, 2023, Allspring Funds Distributor received $1,565 from the sale of Class A shares. No contingent deferred sales charges were incurred by Class A and Class C shares for the year ended March 31, 2023.
Shareholder servicing fees
The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A, Class C, Class R, and Administrator Class are charged a fee at an annual rate up to 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of the Fund.
Interfund transactions
The Fund may purchase or sell portfolio investment securities to certain affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices.
5. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the year ended March 31, 2023 were $1,140,586,923 and $1,420,922,023, respectively.
6. DERIVATIVE TRANSACTIONS
During the year ended March 31, 2023, the Fund entered into written options for hedging purposes and had an average of 13,823 written option contracts.
The fair value, realized gains or losses and change in unrealized gains or losses, if any, on derivative instruments are reflected in the corresponding financial statement captions.
The Fund's written option contracts are subject to a master netting arrangement. As of March 31, 2023, the Fund had written options contracts with the following counterparty which are subject to offset:
| Counterparty | Value of written options | Collateral received1 | Net amount |
| Bank of America Securities Incorporated | $1,801,374 | $(1,801,374) | $0 |
1 Collateral pledged within this table is limited to the collateral for the net transaction with the counterparty.
32 | Allspring Special Small Cap Value Fund
Notes to financial statements
7. BANK BORROWINGS
The Trust (excluding the money market funds), Allspring Master Trust and Allspring Variable Trust are parties to a $350,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the Fund based on a borrowing rate equal to the higher of the Federal Funds rate or the overnight bank funding rate in effect on that day plus a spread. In addition, an annual commitment fee based on the unused balance is allocated to each participating fund.
For the year ended March 31, 2023, there were no borrowings by the Fund under the agreement.
8. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid during the years ended March 31, 2023 and March 31, 2022 were as follows:
| Year ended March 31 | ||
| 2023 | 2022 | |
| Ordinary income | $ 59,275,487 | $175,473,103 |
| Long-term capital gain | 246,800,874 | 207,711,106 |
As of March 31, 2023, the components of distributable earnings on a tax basis were as follows:
| Undistributed ordinary income | Unrealized gains | Post-October capital losses deferred |
| $8,272,529 | $518,004,757 | $(4,651,190) |
9. CONCENTRATION RISKS
As of the end of the period, the Fund concentrated its portfolio of investments in the industrials sector. A fund that invests a substantial portion of its assets in any sector may be more affected by changes in that sector than would be a fund whose investments are not heavily weighted in any sector.
10. INDEMNIFICATION
Under the Fund's organizational documents, the officers and Trustees have been granted certain indemnification rights against certain liabilities that may arise out of performance of their duties to the Fund. The Fund has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Fund’s organizational documents into contractual rights that cannot be changed in the future without the consent of the Trustee. Additionally, in the normal course of business, the Fund may enter into contracts with service providers that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.
Allspring Special Small Cap Value Fund | 33
Report of independent registered public accounting firm
To the Shareholders of the Fund and Board of Trustees
Allspring Funds Trust:
Allspring Funds Trust:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Allspring Special Small Cap Value Fund (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of March 31, 2023, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of March 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of March 31, 2023, by correspondence with the custodian, transfer agent and brokers, or by other appropriate auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have not been able to determine the specific year that we began serving as the auditor of one or more Allspring Funds investment companies; however, we are aware that we have served as the auditor of one or more Allspring Funds investment companies since at least 1955.
Boston, Massachusetts
May 25, 2023
34 | Allspring Special Small Cap Value Fund
Other information (unaudited)
TAX INFORMATION
For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 97% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended March 31, 2023.
Pursuant to Section 852 of the Internal Revenue Code, $246,800,874 was designated as a 20% rate gain distribution for the fiscal year ended March 31, 2023.
Pursuant to Section 854 of the Internal Revenue Code, $57,419,363 of income dividends paid during the fiscal year ended March 31, 2023 has been designated as qualified dividend income (QDI).
For the fiscal year ended March 31, 2023, $2,082,006 has been designated as interest-related dividends for nonresident alien shareholders pursuant to Section 871 of the Internal Revenue Code.
For the fiscal year ended March 31, 2023, $8,494,840 has been designated as short-term capital gain dividends for nonresident alien shareholders pursuant to Section 871 of the Internal Revenue Code.
PROXY VOTING INFORMATION
A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our website at allspringglobal.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at allspringglobal.com or by visiting the SEC website at sec.gov.
QUARTERLY PORTFOLIO HOLDINGS INFORMATION
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
Allspring Special Small Cap Value Fund | 35
Other information (unaudited)
BOARD OF TRUSTEES AND OFFICERS
Each of the Trustees and Officers listed in the table below acts in identical capacities for each fund in the Allspring family of funds, which consists of 127 mutual funds comprising the Allspring Funds Trust, Allspring Variable Trust, Allspring Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information1. The mailing address of each Trustee and Officer is 1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203. Each Trustee and Officer serves an indefinite term, however, each Trustee serves such term until reaching the mandatory retirement age established by the Trustees.
Independent Trustees
| Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
| William R. Ebsworth (Born 1957) | Trustee, since 2015 | Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Foundation (non-profit organization). Mr. Ebsworth is a CFA® charterholder. | N/A |
| Jane A. Freeman (Born 1953) | Trustee, since 2015; Chair Liaison, since 2018 | Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is also an inactive Chartered Financial Analyst. | N/A |
| Isaiah Harris, Jr. (Born 1952) | Trustee, since 2009; Audit Committee Chair, since 2019 | Retired. Member of the Advisory Board of CEF of East Central Florida. Chairman of the Board of CIGNA Corporation from 2009 to 2021, and Director from 2005 to 2008. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Fellowship of Christian Athletes. Mr. Harris is a certified public accountant (inactive status). | N/A |
| David F. Larcker (Born 1950) | Trustee, since 2009 | Distinguished Visiting Fellow at the Hoover Institution since 2022. James Irvin Miller Professor of Accounting at the Graduate School of Business (Emeritus), Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. | N/A |
36 | Allspring Special Small Cap Value Fund
Other information (unaudited)
| Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
| Olivia S. Mitchell (Born 1953) | Trustee, since 2006; Nominating and Governance Committee Chair, since 2018 | International Foundation of Employee Benefit Plans Professor since 1993, Wharton School of the University of Pennsylvania. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously taught at Cornell University from 1978 to 1993. | N/A |
| Timothy J. Penny (Born 1951) | Trustee, since 1996; Chair, since 2018 | President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Vice Chair of the Economic Club of Minnesota, since 2007. Co-Chair of the Committee for a Responsible Federal Budget, since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, from 2007-2022. Senior Fellow of the University of Minnesota Humphrey Institute from 1995 to 2017. | N/A |
| James G. Polisson (Born 1959) | Trustee, since 2018 | Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations. | N/A |
| Pamela Wheelock (Born 1959) | Trustee, since January 2020; previously Trustee from January 2018 to July 2019 | Retired. Executive and Senior Financial leadership positions in the public, private and nonprofit sectors. Interim President and CEO, McKnight Foundation, 2020. Interim Commissioner, Minnesota Department of Human Services, 2019. Chief Operating Officer, Twin Cities Habitat for Humanity, 2017-2019. Vice President for University Services, University of Minnesota, 2012-2016. Interim President and CEO, Blue Cross and Blue Shield of Minnesota, 2011-2012. Executive Vice-President and Chief Financial Officer, Minnesota Wild, 2002-2008. Commissioner, Minnesota Department of Finance, 1999-2002. Chair of the Board of Directors of Destination Medical Center Corporation. Board member of the Minnesota Wild Foundation. | N/A |
* Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.
Allspring Special Small Cap Value Fund | 37
Other information (unaudited)
Officers2
| Name and year of birth | Position held and length of service | Principal occupations during past five years or longer |
| Andrew Owen (Born 1960) | President, since 2017 | President and Chief Executive Officer of Allspring Funds Management, LLC since 2017 and Head of Global Fund Governance of Allspring Global Investments since 2022. Prior thereto, co-president of Galliard Capital Management, LLC, an affiliate of Allspring Funds Management, LLC, from 2019 to 2022 and Head of Affiliated Managers, Allspring Global Investments, from 2014 to 2019 and Executive Vice President responsible for marketing, investments and product development for Allspring Funds Management, LLC, from 2009 to 2014. |
| Jeremy DePalma (Born 1974) | Treasurer, since 2012 (for certain funds in the Fund Complex); since 2021 (for the remaining funds in the Fund Complex) | Senior Vice President of Allspring Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010. |
| Christopher Baker (Born 1976) | Chief Compliance Officer, since 2022 | Global Chief Compliance Officer for Allspring Global Investments since 2022. Prior thereto, Chief Compliance Officer for State Street Global Advisors from 2018 to 2021. Senior Compliance Officer for the State Street divisions of Alternative Investment Solutions, Sector Solutions, and Global Marketing from 2015 to 2018. From 2010 to 2015 Vice President, Global Head of Investment and Marketing Compliance for State Street Global Advisors. |
| Matthew Prasse (Born 1983) | Chief Legal Officer, since 2022; Secretary, since 2021 | Senior Counsel of the Allspring Legal Department since 2021. Senior Counsel of the Wells Fargo Legal Department from 2018 to 2021. Previously, Counsel for Barings LLC from 2015 to 2018. Prior to joining Barings, Associate at Morgan, Lewis & Bockius LLP from 2008 to 2015. |
1 The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at allspringglobal.com.
2 For those Officers with tenures at Allspring Global Investments and/or Allspring Funds Management, LLC that began prior to 2021, such tenures include years of service during which these businesses/entities were known as Wells Fargo Asset Management and Wells Fargo Funds Management, LLC, respectively.
38 | Allspring Special Small Cap Value Fund
For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Fund's website, or call:
Allspring Funds
P.O. Box 219967
Kansas City, MO 64121-9967
P.O. Box 219967
Kansas City, MO 64121-9967
Website: allspringglobal.com
Individual investors: 1-800-222-8222
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-800-260-5969
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call
1-800-222-8222 or visit the Fund's website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
1-800-222-8222 or visit the Fund's website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
Allspring Global InvestmentsTM is the trade name for the asset management firms of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management, LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind - including a recommendation for any specific investment, strategy, or plan.
© 2023 Allspring Global Investments Holdings, LLC. All rights reserved.
ALL-04052023-l3s4hfm1 05-23
AR0637 03-23
AR0637 03-23
Annual Report
March 31, 2023
Allspring Precious Metals Fund
Contents
| 2 | |
| 6 | |
| 11 | |
| 12 | |
| Consolidated financial statements | |
| 15 | |
| 16 | |
| 17 | |
| 18 | |
| 22 | |
| 28 | |
| 29 |
The views expressed and any forward-looking statements are as of March 31, 2023, unless otherwise noted, and are those of the Fund's portfolio managers and/or Allspring Global Investments. Discussions of individual securities or the markets generally are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Allspring Global Investments disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.
Allspring Precious Metals Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Precious Metals Fund for the 12-month period that ended March 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. Earlier tailwinds provided by global stimulus programs, vaccination rollouts, and recovering consumer and corporate sentiment were wiped away by the highest rate of inflation in four decades as well as the impact of ongoing aggressive central bank rate hikes and the prospect of more rate hikes. Compounding these concerns were the global reverberations of the Russia-Ukraine war and the impact of China’s strict COVID-19 lockdowns, which were removed in December.
For the 12-month period, stocks and bonds––both domestic U.S. and global––suffered broad losses. For the period, U.S. stocks, based on the S&P 500 Index,1 returned -7.73%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned -5.07%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a decline of 10.70%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -4.78%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 10.72%, the Bloomberg Municipal Bond Index6 gained 0.26%, and the ICE BofA U.S. High Yield Index7 fell 3.50%.
High inflation and central bank rate hikes rocked markets.
In April 2022, market headwinds created by Russia’s invasion of Ukraine in February continued, with broad and deep losses as both the S&P 500 and MSCI ACWI (Net)8 fell 8% or more for the month and commodity shortages added to global inflation. The Chinese economy struggled through a strict lockdown as the government tried to contain a major COVID-19 outbreak. The ensuing global ripple effect compounded existing supply shortages. Meanwhile, U.S. annual inflation raged at 8.5%, its highest level since 1981, and investors braced themselves for aggressive Federal Reserve (Fed) monetary tightening moves.
Market volatility continued in May, although markets recovered ground late in the month. Value stocks continued to outperform growth stocks. The concerns that had dominated markets for months continued, including high inflation and geopolitical tensions that added to high crude oil, gasoline, and food prices. In response, the Fed raised the federal funds rate by 0.50%. Meanwhile, highly contagious COVID-19 variants persisted. However, labor markets in the U.S., the U.K., and Europe remained strong. U.S. retail sales increased for the fourth consecutive month in April—a sign of consumer resilience.
“ In April 2022, market headwinds created by Russia’s invasion of Ukraine in February continued, with broad and deep losses as both the S&P 500 Index and MSCI All Country World Index fell 8% or more for the month and commodity shortages added to global inflation.”
| 1 | The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock's weight in the index proportionate to its market value. You cannot invest directly in an index. |
| 2 | The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding the U.S. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. You cannot invest directly in an index. |
| 3 | The MSCI Emerging Markets (EM) Index (Net) (USD) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index. |
| 4 | The Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S.-dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index. |
| 5 | The Bloomberg Global Aggregate ex-USD Index (unhedged) is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S.-dollar-denominated debt market. You cannot invest directly in an index. |
| 6 | The Bloomberg Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index. |
| 7 | The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2023. ICE Data Indices, LLC. All rights reserved. |
| 8 | The MSCI ACWI (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets. You cannot invest directly in an index. |
2 | Allspring Precious Metals Fund
Letter to shareholders (unaudited)
In June, stocks posted further losses en route to their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were the familiar factors: rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Fed raised its short-term rate by another 0.75% in June. Meanwhile, the U.S. unemployment rate held firm at 3.6% and the housing market remained only marginally affected by sharply higher mortgage rates.
Markets rebounded in July, led by U.S. stocks. While U.S. economic activity showed signs of waning, the country’s labor market remained surprisingly strong: July nonfarm payrolls grew by more than 500,000 and U.S. unemployment dipped to 3.5%. Meanwhile, crude oil and retail gasoline prices, major contributors to recent overall inflation, fell substantially from earlier highs. And while U.S. home prices rose, home sales fell as houses became less affordable with mortgage rates at a 13-year high. The Fed raised the federal funds rate another 0.75% in July—to a range of 2.25% to 2.50%—and forecasts pointed to further rate hikes.
August was yet another broadly challenging month for financial markets, with more red ink flowing. High inflation persisted, cresting 9% in the eurozone on an annual basis and remaining above 8% in the U.S. despite the Fed’s aggressive monetary policy and a major drop in global crude oil and gasoline prices from their June peak. One positive note was the resilient U.S. job market. However, the Fed’s job was clearly not complete. One longer-term bright spot was the U.S. Congress’s passage of the Inflation Reduction Act. Its primary stated goals include: to reduce inflation (though not immediately) by curbing the deficit, capping health care spending by seniors, and investing in domestic sources of clean energy.
The market misery continued in September as all asset classes suffered major losses. Central banks kept up their battle against rapidly rising prices with more rate hikes. The strength of the U.S. dollar weighed on results for investors holding non-U.S.-dollar assets. U.S. mortgage rates jumped to near 7% on 30-year fixed-rate mortgages; the decreased housing affordability began to cool demand somewhat. The U.K. experienced a sharp sell-off of government bonds and the British pound in September as investors panicked in response to a new government budget that was seen as financially unsound. The Bank of England (BoE) then stepped in and bought long-dated government bonds.
Equities had a reprieve in October. Value stocks and small caps fared best. Globally, developed markets outpaced emerging market equities, which were hurt by weakness among Chinese stocks. Central banks continued to try to curtail high inflation with aggressive interest rate hikes. Geopolitical risks persisted, including the ongoing Russia-Ukraine war and economic, financial market, and political turmoil in the U.K. Concerns over Europe’s energy crisis eased thanks to unseasonably warm weather and plentiful gas on hand. The U.S. labor market continued its resilience against rising prices as unemployment remained near a record low.
Stocks and bonds rallied in November. Economic news was encouraging, driven by U.S. labor market strength. Although central banks kept raising rates, hopes rose for an easing in the pace of rate hikes and a possible end to central bank monetary tightening in 2023. Although inflation remained at record highs in the eurozone, we began to see signs of a possible decline in inflationary pressures as U.S. inflation moderated, with a 7.1% annual price rise in November and a monthly price increase of just 0.1%. China’s economic data remained weak, reflecting its zero-COVID-19 policy.
Financial markets cooled in December, with U.S. equities posting negative overall results in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever with flat overall monthly returns as markets weighed the hopes for an end to the monetary tightening cycle with the reality that central banks had not completed their jobs yet. U.S. Consumer Price Index (CPI)1 data showed a strong consistent trend downward, which brought down the 12-month CPI to 6.5% in December from 9.1% in June. Other countries and regions reported still-high but declining inflation rates as the year winded down.
“ In June, stocks posted further losses en route to their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were the familiar factors: rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation.”
| 1 | The U.S. Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. You cannot invest directly in an index. |
Allspring Precious Metals Fund | 3
Letter to shareholders (unaudited)
The year 2023 began with a rally across global equities and fixed income securities. Investor optimism rose in response to data indicating declining inflation rates and the reopening of China’s economy with the abrupt end to its zero-COVID-19 policy. The U.S. reported surprisingly strong job gains––employers added more than 500,000 jobs––and unemployment fell to 3.4%, the lowest level since 1969. Meanwhile, wage growth, seen as a potential contributor to ongoing high inflation, continued to moderate. All eyes remained fixed on the Fed and on how many more rate hikes remain in this tightening cycle. The 0.25% federal funds rate hike announced in January was the Fed’s smallest rate increase since March 2022.
Financial markets declined in February as investors responded unfavorably to resilient economic data. The takeaway: Central banks will likely continue their monetary tightening cycle for longer than markets had priced in. In this environment—where strong economic data is seen as bad news—the resilient U.S. labor market was seen as a negative while the inflation rate has not been falling quickly enough for the Fed, which raised interest rates by 0.25% in early February. Meanwhile, the BoE and the European Central Bank both raised rates by 0.50%.
The collapse of Silicon Valley Bank in March, the second-largest banking failure in U.S. history, led to a classic bank run that spread to Europe, where Switzerland’s Credit Suisse was taken over by its rival, UBS. The sudden banking industry uncertainty led some clients of regional banks to transfer deposits to a handful of U.S. banking giants while bank shareholders sold stock. The banking industry turmoil could make the job of central banks more challenging as they weigh inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. The U.S. labor market remained resilient. The euro-area composite Purchasing Managers’ Index1 rose to 53.70, indicating expansion, for March. And China’s economy continued to rebound after the removal of its COVID-19 lockdown. Inflation rates in the U.S., the U.K., and Europe all remained higher than central bank targets, leading to additional rate hikes in March.
Don’t let short-term uncertainty derail long-term investment goals.
Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Allspring Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.
Thank you for choosing to invest with Allspring Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.
Sincerely,
Andrew Owen
President
Allspring Funds
President
Allspring Funds
For further information about your fund, contact your investment professional, visit our website at allspringglobal.com, or call us directly at 1-800-222-8222.
| 1 | The Purchasing Managers' Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. You cannot invest directly in an index. |
4 | Allspring Precious Metals Fund
Performance highlights (unaudited)
| Investment objective | The Fund seeks long-term capital appreciation. |
| Manager | Allspring Funds Management, LLC |
| Subadviser | Allspring Global Investments, LLC |
| Portfolio managers | Michael Bradshaw, CFA, Oleg Makhorine |
| Average annual total returns (%) as of March 31, 2023 | |||||||||||
| Including sales charge | Excluding sales charge | Expense ratios1 (%) | |||||||||
| Inception date | 1 year | 5 year | 10 year | 1 year | 5 year | 10 year | Gross | Net 2 | |||
| Class A (EKWAX) | 1-20-1998 | -15.05 | 7.82 | -0.82 | -9.87 | 9.10 | -0.23 | 1.18 | 1.09 | ||
| Class C (EKWCX) | 1-29-1998 | -11.56 | 8.28 | -0.83 | -10.56 | 8.28 | -0.83 | 1.93 | 1.84 | ||
| Administrator Class (EKWDX) | 7-30-2010 | – | – | – | -9.75 | 9.25 | -0.09 | 1.10 | 0.95 | ||
| Institutional Class (EKWYX) | 2-29-2000 | – | – | – | -9.59 | 9.43 | 0.06 | 0.85 | 0.79 | ||
| FTSE Gold Mines Index3 | – | – | – | – | -17.24 | 8.39 | -0.30 | – | – | ||
| S&P 500 Index4 | – | – | – | – | -7.73 | 11.19 | 12.24 | – | – | ||
Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on an investment in a fund. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, allspringglobal.com.
While the S&P 500 Index is comprised of U.S. equity securities of companies diversified across ten sectors, the Fund’s holdings are concentrated primarily in precious metals related stocks. Therefore, the performance of the S&P 500 Index is displayed only to show how the concentrated Fund performed compared with a diversified selection of U.S. equity securities.
Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.
For Class A shares, the maximum front-end sales charge is 5.75%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Administrator Class and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.
| 1 | Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report. |
| 2 | The manager has contractually committed through July 31, 2023, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 1.09% for Class A, 1.84% for Class C, 0.95% for Administrator Class, and 0.79% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense caps. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. Without these caps, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses. |
| 3 | FTSE Gold Mines Index is an unmanaged, open-ended index designed to reflect the performance of the worldwide market in the shares of companies whose principal activity is the mining of gold. You cannot invest directly in an index. |
| 4 | The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index with each stock’s weight in the index proportionate to its market value. You cannot invest directly in an index. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
6 | Allspring Precious Metals Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of March 31, 20231
| 1 | The chart compares the performance of Class A shares for the most recent ten years with the FTSE Gold Mines Index and S&P 500 Index. The chart assumes a hypothetical investment of $10,000 in Class A shares and reflects all operating expenses and assumes the maximum initial sales charge of 5.75%. |
Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. Funds that concentrate their investments in limited sectors, such as gold-related investments, are more vulnerable to adverse market, economic, regulatory, political, or other developments affecting those sectors. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This fund is exposed to foreign investment risk, geographic, non-diversification risk, smaller-company securities risk, and subsidiary risk. Consult the Fund’s prospectus for additional information on these and other risks.
Allspring Precious Metals Fund | 7
Performance highlights (unaudited)
MANAGER'S DISCUSSION
Fund highlights
| ■ | The Fund outperformed its benchmark, the FTSE Gold Mines Index, for the 12-month period that ended March 31, 2023. |
| ■ | The Fund’s overweights to Lundin Gold Inc., Torex Gold Resources Inc., and Alamos Gold Inc. enhanced results, along with underweights to Newmont Corp. and Barrick Gold Corp. |
| ■ | The Fund’s overweights to SSR Mining Inc. and Centerra Gold Inc. and underweights to AngloGold Ashanti Ltd. and Newcrest Mining Ltd. detracted from results during the period. The Fund’s positions in Artemis Gold Inc. and Marathon Gold Corp. also detracted from results. |
| ■ | The price of gold rose more than 1.5% during the 12-month period, and the share prices of precious metals stocks underperformed the gold price. |
Gold prices rose modestly during the reporting period.
The price of gold fell 14.3% during the first half of the reporting period. Tight labor markets and stubbornly high inflation caused the Federal Reserve (Fed) to aggressively raise interest rates during the first half of the period. This caused the yield on the 10-year U.S. Treasury bond to rise by 149 basis points (bps; 100 bps equal 1.00%) and the trade-weighted U.S. dollar to strengthen by 14%. During the second half of the period, gold prices rose 18.5%. Gold prices were propelled higher during the fall and winter months as the Fed began to moderate the pace of its interest rate increases as the inflation rate declined and the economy began to slow.
| Ten largest holdings (%) as of March 31, 20231 | |
| Wheaton Precious Metals Corporation-U.S. Exchange Traded Shares | 5.62 |
| Franco-Nevada Corporation-Legend Shares | 5.56 |
| Barrick Gold Corporation | 5.36 |
| Endeavour Mining plc | 5.24 |
| Royal Gold Incorporated | 5.05 |
| Agnico-Eagle Mines Limited | 4.89 |
| Gold Bullion | 4.78 |
| Gold Fields Limited ADR | 4.62 |
| Alamos Gold Incorporated Class A | 4.25 |
| Lundin Gold Incorporated | 4.23 |
| 1 | Figures represent the percentage of the Fund's net assets. Holdings are subject to change and may have changed since the date specified. |
Gold-mining stocks underperformed the price of gold.
The prices of gold-mining stocks typically rise or fall more sharply than the price of gold. This was not the case during the 12-month reporting period. Companies that delivered better-than-expected operating and financial results fared
the best. Two of the Fund’s most noteworthy contributors were Lundin Gold Inc. and Torex Gold Resources Inc. Lundin outperformed on news of much better-than-expected operating results as well as an increase in its three-year production forecast. Torex outperformed on news of positive operating results at its El Limon Mine in Mexico as well as the announcement of a new discovery. The Fund’s underweights to Newmont Corp. and Barrick Gold Corp. also enhanced results as both companies reported disappointing outlooks.
| Country allocation as of March 31, 20231 |
| 1 | Figures represent the percentage of the Fund's long-term investments. Allocations are subject to change and may have changed since the date specified. |
Four of the Fund’s most noteworthy detractors were Artemis Gold Inc., Marathon Gold Corp., Centerra Gold Inc., and Pan American Silver Corp. Centerra underperformed on news that its Oksut Mine in Turkey was being temporarily closed. Both Artemis and Marathon underperformed on news of higher-than-expected capital costs at their development projects. The Fund’s underweights to Newcrest Mining Ltd. and AngloGold Ashanti Ltd. also detracted from results.
Our outlook for precious metals companies is positive.
We believe the short-term outlook for gold prices depends largely on economic data and the resulting impact on U.S. interest rates, inflation, and the U.S. dollar. With economic
Allspring Precious Metals Fund | 9
Performance highlights (unaudited)
growth decelerating during the most recent quarter and inflation expectations falling, bond yields are expected to continue to moderate over the short term. Given gold’s historical inverse relationship to real yields, we would expect the current environment to remain a tailwind for gold prices.
Over the longer term, we believe the gold price will be supported by a slowing economy and a weaker dollar brought on by the eventual start of a Fed easing cycle. Given the current gold price environment and our longer-term outlook, we believe the outlook for the gold-mining industry is positive.
We believe gold-related stocks may have better appreciation potential than the metal itself. However, stock selection will remain important because, in our view, company fundamentals tend to drive stock prices. We believe higher-quality companies with internal growth catalysts, such as effective execution of business plans and mining successes, are most likely to outperform their peers.
10 | Allspring Precious Metals Fund
Consolidated fund expenses (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period from October 1, 2022 to March 31, 2023.
Actual expenses
The “Actual” line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Actual” line under the heading entitled “Expenses paid during period” for your applicable class of shares to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The “Hypothetical” line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) and contingent deferred sales charges. Therefore, the “Hypothetical” line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning account value 10-1-2022 | Ending account value 3-31-2023 | Consolidated expenses paid during the period1 | Annualized net expense ratio | |
| Class A | ||||
| Actual | $1,000.00 | $1,355.92 | $ 6.40 | 1.09% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.50 | $ 5.49 | 1.09% |
| Class C | ||||
| Actual | $1,000.00 | $1,350.40 | $10.78 | 1.84% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,015.76 | $ 9.25 | 1.84% |
| Administrator Class | ||||
| Actual | $1,000.00 | $1,356.51 | $ 5.58 | 0.95% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.19 | $ 4.78 | 0.95% |
| Institutional Class | ||||
| Actual | $1,000.00 | $1,357.95 | $ 4.64 | 0.79% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.99 | $ 3.98 | 0.79% |
1 Consolidated expenses paid is equal to the annualized net expense ratio of each class multiplied by the average account value over the period, multiplied by 182 divided by 365 (to reflect the one-half-year period).
Allspring Precious Metals Fund | 11
Consolidated portfolio of investments—March 31, 2023
| Shares | Value | |||||
| Common stocks: 91.92% | ||||||
| Australia: 8.06% | ||||||
| Evolution Mining Limited (Materials, Metals & mining) | 800,000 | $ 1,660,990 | ||||
| Newcrest Mining Limited (Materials, Metals & mining) | 702,294 | 12,536,223 | ||||
| Northern Star Resources Limited (Materials, Metals & mining) | 1,385,412 | 11,360,596 | ||||
| 25,557,809 | ||||||
| Canada: 62.46% | ||||||
| Agnico-Eagle Mines Limited (Materials, Metals & mining) | 304,527 | 15,524,906 | ||||
| Agnico-Eagle Mines Limited-Legend Shares (Materials, Metals & mining) | 35,000 | 1,783,950 | ||||
| Agnico-Eagle Mines Limited-U.S. Exchange Traded Shares (Materials, Metals & mining) | 114,164 | 5,818,939 | ||||
| Alamos Gold Incorporated Class A (Materials, Metals & mining) | 1,103,980 | 13,478,113 | ||||
| Artemis Gold Incorporated (Materials, Metals & mining) † | 1,100,000 | 3,646,320 | ||||
| Ascot Resources Limited (Materials, Metals & mining) † | 2,650,000 | 1,352,941 | ||||
| B2Gold Corporation (Materials, Metals & mining) | 3,300,000 | 13,038,846 | ||||
| Barrick Gold Corporation (Materials, Metals & mining) | 915,723 | 17,004,976 | ||||
| Centerra Gold Incorporated (Materials, Metals & mining) | 200,000 | 1,291,898 | ||||
| Centerra Gold Incorporated-Legend Shares (Materials, Metals & mining) 144A | 250,000 | 1,614,872 | ||||
| Dundee Precious Metals Incorporated (Materials, Metals & mining) | 1,075,000 | 7,842,767 | ||||
| Franco-Nevada Corporation-Legend Shares (Materials, Metals & mining) 144A | 120,948 | 17,641,494 | ||||
| Kinross Gold Corporation (Materials, Metals & mining) | 2,732,483 | 12,858,744 | ||||
| Lundin Gold Incorporated (Materials, Metals & mining) | 1,150,000 | 13,427,303 | ||||
| MAG Silver Corporation (Materials, Metals & mining) † | 500,000 | 6,318,905 | ||||
| MAG Silver Corporation-Legend Shares (Materials, Metals & mining) | 100,000 | 1,262,301 | ||||
| Marathon Gold Corporation (Materials, Metals & mining) † | 700,000 | 414,354 | ||||
| Orla Mining Limited (Materials, Metals & mining) † | 300,000 | 1,422,863 | ||||
| Osisko Mining Incorporated (Materials, Metals & mining) † | 450,000 | 1,431,743 | ||||
| Pan American Silver Corporation (Materials, Metals & mining) | 265,000 | 4,823,000 | ||||
| SilverCrest Metals Incorporated (Materials, Metals & mining) † | 1,185,000 | 8,426,082 | ||||
| Skeena Resources Limited (Materials, Metals & mining) † | 300,000 | 1,837,958 | ||||
| SSR Mining Incorporated (Materials, Metals & mining) | 195,000 | 2,948,400 | ||||
| SSR Mining Incorporated-U.S. Exchange Traded Shares (Materials, Metals & mining) | 403,552 | 6,103,295 | ||||
| Torex Gold Resources Incorporated (Materials, Metals & mining) | 360,000 | 5,990,677 | ||||
| Torex Gold Resources Incorporated-Legend Shares (Materials, Metals & mining) 144A | 185,000 | 3,078,542 | ||||
| Torex Gold Resources Incorporated-Legend Shares (Materials, Metals & mining) | 266,250 | 4,430,605 | ||||
| Triple Flag Precious Metals Corporation (Materials, Metals & mining) | 210,000 | 3,127,858 | ||||
| Wheaton Precious Metals Corporation (Materials, Metals & mining) | 12,950 | 623,689 |
The accompanying notes are an integral part of these consolidated financial statements.
12 | Allspring Precious Metals Fund
Consolidated portfolio of investments—March 31, 2023
| Shares | Value | |||||
| Canada: (continued) | ||||||
| Wheaton Precious Metals Corporation-U.S. Exchange Traded Shares (Materials, Metals & mining) | 370,000 | $ 17,819,200 | ||||
| Yamana Gold Incorporated (Materials, Metals & mining) | 300,000 | 1,749,168 | ||||
| 198,134,709 | ||||||
| South Africa: 6.91% | ||||||
| AngloGold Ashanti Limited ADR (Materials, Metals & mining) | 300,591 | 7,271,296 | ||||
| Gold Fields Limited ADR (Materials, Metals & mining) | 1,100,000 | 14,652,000 | ||||
| 21,923,296 | ||||||
| United Kingdom: 5.24% | ||||||
| Endeavour Mining plc (Materials, Metals & mining) | 690,000 | 16,628,413 | ||||
| United States: 9.25% | ||||||
| Newmont Corporation (Materials, Metals & mining) | 140,802 | 6,902,114 | ||||
| Newmont Corporation-Toronto Exchange Traded Shares (Materials, Metals & mining) | 131,348 | 6,434,740 | ||||
| Royal Gold Incorporated (Materials, Metals & mining) | 123,436 | 16,010,884 | ||||
| 29,347,738 | ||||||
| Total Common stocks (Cost $168,150,377) | 291,591,965 |
| Expiration date | ||||||
| Rights: 0.00% | ||||||
| Canada: 0.00% | ||||||
| Kinross Gold Corporation Contingent Value Rights (Materials, Metals & mining) ♦† | 3-1-2032 | 75,000 | 0 | |||
| Total Rights (Cost $0) | 0 |
| Warrants: 0.00% | ||||||
| Canada: 0.00% | ||||||
| Marathon Gold Corporation (Materials, Metals & mining) ♦† | 9-20-2024 | 250,000 | 0 | |||
| Total Warrants (Cost $0) | 0 |
| Troy ounces | ||||||
| Commodities: 4.78% | ||||||
| Gold Bullion * | 7,690 | 15,157,203 | ||||
| Total Commodities (Cost $4,532,552) | 15,157,203 |
The accompanying notes are an integral part of these consolidated financial statements.
Allspring Precious Metals Fund | 13
Consolidated portfolio of investments—March 31, 2023
| Yield | Shares | Value | ||||
| Short-term investments: 3.08% | ||||||
| Investment companies: 3.08% | ||||||
| Allspring Government Money Market Fund Select Class ♠∞ | 4.69% | 9,767,739 | $ 9,767,739 | |||
| Total Short-term investments (Cost $9,767,739) | 9,767,739 | |||||
| Total investments in securities (Cost $182,450,668) | 99.78% | 316,516,907 | ||||
| Other assets and liabilities, net | 0.22 | 686,840 | ||||
| Total net assets | 100.00% | $317,203,747 |
| † | Non-income-earning security |
| 144A | The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933. |
| ♦ | The security is fair valued in accordance with Allspring Funds Management's valuation procedures, as the Board-designated valuation designee. |
| * | Represents an investment held in Special Investments (Cayman) SPC, the consolidated entity. |
| ♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
| ∞ | The rate represents the 7-day annualized yield at period end. |
| Abbreviations: | |
| ADR | American depositary receipt |
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
| Value, beginning of period | Purchases | Sales proceeds | Net realized gains (losses) | Net change in unrealized gains (losses) | Value, end of period | Shares, end of period | Income from affiliated securities | |
| Short-term investments | ||||||||
| Allspring Government Money Market Fund Select Class | $8,444,788 | $69,237,222 | $(67,914,271) | $0 | $0 | $9,767,739 | 9,767,739 | $134,275 |
The accompanying notes are an integral part of these consolidated financial statements.
14 | Allspring Precious Metals Fund
Consolidated statement of assets and liabilities—March 31, 2023
| Assets | |
Investments in unaffiliated securities, at value (cost $168,150,377) | $ 291,591,965 |
Investments in affiliated securities, at value (cost $9,767,739) | 9,767,739 |
Investments in commodities, at value (cost $4,532,552) | 15,157,203 |
Cash | 72,374 |
Foreign currency, at value (cost $101,702) | 101,768 |
Receivable for dividends | 499,742 |
Receivable for Fund shares sold | 406,687 |
Prepaid expenses and other assets | 87,219 |
Total assets | 317,684,697 |
| Liabilities | |
Payable for Fund shares redeemed | 178,188 |
Management fee payable | 113,125 |
Administration fees payable | 45,742 |
Shareholder servicing fees payable | 41,776 |
Transfer agent fee payable | 34,764 |
Distribution fee payable | 5,762 |
Trustees’ fees and expenses payable | 1,520 |
Accrued expenses and other liabilities | 60,073 |
Total liabilities | 480,950 |
Total net assets | $317,203,747 |
| Net assets consist of | |
Paid-in capital | $ 329,328,391 |
Total distributable loss | (12,124,644) |
Total net assets | $317,203,747 |
| Computation of net asset value and offering price per share | |
Net assets – Class A | $ 167,510,721 |
Shares outstanding – Class A1 | 3,474,009 |
Net asset value per share – Class A | $48.22 |
Maximum offering price per share – Class A2 | $51.16 |
Net assets – Class C | $ 9,252,576 |
Shares outstanding – Class C1 | 218,035 |
Net asset value per share – Class C | $42.44 |
Net assets – Administrator Class | $ 25,300,444 |
Shares outstanding – Administrator Class1 | 519,982 |
Net asset value per share – Administrator Class | $48.66 |
Net assets – Institutional Class | $ 115,140,006 |
Shares outstanding – Institutional Class1 | 2,344,574 |
Net asset value per share – Institutional Class | $49.11 |
| 1 | The Fund has an unlimited number of authorized shares. |
| 2 | Maximum offering price is computed as 100/94.25 of net asset value. On investments of $50,000 or more, the offering price is reduced. |
The accompanying notes are an integral part of these consolidated financial statements.
Allspring Precious Metals Fund | 15
Consolidated statement of operations—year ended March 31, 2023
| Investment income | |
Dividends (net of foreign withholdings taxes of $664,372) | $ 5,651,732 |
Income from affiliated securities | 134,275 |
Total investment income | 5,786,007 |
| Expenses | |
Management fee | 1,902,930 |
| Administration fees | |
Class A | 330,913 |
Class C | 18,492 |
Administrator Class | 27,010 |
Institutional Class | 137,277 |
| Shareholder servicing fees | |
Class A | 393,944 |
Class C | 22,014 |
Administrator Class | 51,943 |
| Distribution fee | |
Class C | 65,963 |
Custody and accounting fees | 36,814 |
Professional fees | 65,721 |
Registration fees | 54,470 |
Shareholder report expenses | 41,151 |
Trustees’ fees and expenses | 20,205 |
Transfer agent fees | 4,385 |
Other fees and expenses | 15,757 |
Total expenses | 3,188,989 |
| Less: Fee waivers and/or expense reimbursements | |
Fund-level | (204,371) |
Class A | (55,652) |
Class C | (2,530) |
Administrator Class | (19,405) |
Net expenses | 2,907,031 |
Net investment income | 2,878,976 |
| Realized and unrealized gains (losses) on investments | |
Net realized losses on investments | (119,568) |
| Net change in unrealized gains (losses) on | |
Unaffiliated securities | (49,636,318) |
Commodities | 263,264 |
Net change in unrealized gains (losses) on investments | (49,373,054) |
Net realized and unrealized gains (losses) on investments | (49,492,622) |
Net decrease in net assets resulting from operations | $(46,613,646) |
The accompanying notes are an integral part of these consolidated financial statements.
16 | Allspring Precious Metals Fund
Consolidated statement of changes in net assets
| Year ended March 31, 2023 | Year ended March 31, 2022 | |||
| Operations | ||||
Net investment income | $ 2,878,976 | $ 2,289,676 | ||
Net realized gains (losses) on investments | (119,568) | 11,771,865 | ||
Net change in unrealized gains (losses) on investments | (49,373,054) | 43,339,500 | ||
Net increase (decrease) in net assets resulting from operations | (46,613,646) | 57,401,041 | ||
| Distributions to shareholders from | ||||
| Net investment income and net realized gains | ||||
Class A | (2,956,684) | (2,465,823) | ||
Class C | (144,308) | (23,828) | ||
Administrator Class | (443,165) | (285,008) | ||
Institutional Class | (2,106,907) | (1,978,706) | ||
Total distributions to shareholders | (5,651,064) | (4,753,365) | ||
| Capital share transactions | Shares | Shares | ||
| Proceeds from shares sold | ||||
Class A | 584,270 | 26,451,279 | 635,264 | 31,820,827 |
Class C | 23,913 | 948,346 | 34,189 | 1,491,358 |
Administrator Class | 405,456 | 17,875,345 | 546,383 | 27,219,384 |
Institutional Class | 910,151 | 40,502,765 | 908,294 | 46,314,183 |
| 85,777,735 | 106,845,752 | |||
| Reinvestment of distributions | ||||
Class A | 66,225 | 2,743,689 | 50,693 | 2,290,305 |
Class C | 3,934 | 143,766 | 590 | 23,631 |
Administrator Class | 10,504 | 438,944 | 6,179 | 281,352 |
Institutional Class | 41,254 | 1,739,258 | 32,848 | 1,507,057 |
| 5,065,657 | 4,102,345 | |||
| Payment for shares redeemed | ||||
Class A | (994,493) | (41,172,521) | (999,369) | (48,762,130) |
Class C | (63,233) | (2,396,577) | (72,521) | (3,120,098) |
Administrator Class | (350,294) | (15,010,210) | (393,345) | (19,388,309) |
Institutional Class | (1,135,668) | (48,911,874) | (1,081,288) | (53,579,450) |
| (107,491,182) | (124,849,987) | |||
Net decrease in net assets resulting from capital share transactions | (16,647,790) | (13,901,890) | ||
Total increase (decrease) in net assets | (68,912,500) | 38,745,786 | ||
| Net assets | ||||
Beginning of period | 386,116,247 | 347,370,461 | ||
End of period | $ 317,203,747 | $ 386,116,247 | ||
The accompanying notes are an integral part of these consolidated financial statements.
Allspring Precious Metals Fund | 17
Consolidated financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $54.61 | $46.95 | $35.30 | $33.94 | $32.80 |
Net investment income (loss) | 0.38 1 | 0.27 1 | 0.08 | (0.03) 1 | (0.03) 1 |
Net realized and unrealized gains (losses) on investments | (5.91) | 8.03 | 12.35 | 1.44 | 1.17 |
Total from investment operations | (5.53) | 8.30 | 12.43 | 1.41 | 1.14 |
| Distributions to shareholders from | |||||
Net investment income | (0.86) | (0.64) | (0.78) | (0.05) | 0.00 |
Net asset value, end of period | $48.22 | $54.61 | $46.95 | $35.30 | $33.94 |
Total return2 | (9.87)% | 17.96% | 34.95% | 4.13% | 3.48% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.19% | 1.18% | 1.17% | 1.20% | 1.22% |
Net expenses | 1.09% | 1.09% | 1.09% | 1.09% | 1.09% |
Net investment income (loss) | 0.89% | 0.55% | 0.12% | (0.08)% | (0.11)% |
| Supplemental data | |||||
Portfolio turnover rate3 | 9% | 15% | 22% | 25% | 19% |
Net assets, end of period (000s omitted) | $167,511 | $208,497 | $193,949 | $147,020 | $162,860 |
| 1 | Calculated based upon average shares outstanding |
| 2 | Total return calculations do not include any sales charges. |
| 3 | Portfolio turnover rate includes the purchases and sales transactions of its wholly-owned subsidiary. |
The accompanying notes are an integral part of these consolidated financial statements.
18 | Allspring Precious Metals Fund
Consolidated financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $48.30 | $41.35 | $30.87 | $29.88 | $29.09 |
Net investment income (loss) | 0.05 1 | (0.09) 1 | (0.32) 1 | (0.29) 1 | (0.24) 1 |
Net realized and unrealized gains (losses) on investments | (5.25) | 7.13 | 10.80 | 1.28 | 1.03 |
Total from investment operations | (5.20) | 7.04 | 10.48 | 0.99 | 0.79 |
| Distributions to shareholders from | |||||
Net investment income | (0.66) | (0.09) | 0.00 | 0.00 | 0.00 |
Net asset value, end of period | $42.44 | $48.30 | $41.35 | $30.87 | $29.88 |
Total return2 | (10.56)% | 17.07% | 33.95% | 3.31% | 2.72% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.94% | 1.93% | 1.92% | 1.95% | 1.97% |
Net expenses | 1.84% | 1.84% | 1.84% | 1.84% | 1.84% |
Net investment income (loss) | 0.13% | (0.21)% | (0.68)% | (0.83)% | (0.88)% |
| Supplemental data | |||||
Portfolio turnover rate3 | 9% | 15% | 22% | 25% | 19% |
Net assets, end of period (000s omitted) | $9,253 | $12,241 | $12,039 | $11,834 | $14,908 |
| 1 | Calculated based upon average shares outstanding |
| 2 | Total return calculations do not include any sales charges. |
| 3 | Portfolio turnover rate includes the purchases and sales transactions of its wholly-owned subsidiary. |
The accompanying notes are an integral part of these consolidated financial statements.
Allspring Precious Metals Fund | 19
Consolidated financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $55.06 | $47.36 | $35.66 | $34.29 | $33.09 |
Net investment income | 0.47 1 | 0.38 1 | 0.17 1 | 0.02 1 | 0.01 1 |
Net realized and unrealized gains (losses) on investments | (5.98) | 8.05 | 12.47 | 1.45 | 1.19 |
Total from investment operations | (5.51) | 8.43 | 12.64 | 1.47 | 1.20 |
| Distributions to shareholders from | |||||
Net investment income | (0.89) | (0.73) | (0.94) | (0.10) | 0.00 |
Net asset value, end of period | $48.66 | $55.06 | $47.36 | $35.66 | $34.29 |
Total return | (9.75)% | 18.13% | 35.13% | 4.24% | 3.63% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.11% | 1.10% | 1.09% | 1.12% | 1.14% |
Net expenses | 0.95% | 0.95% | 0.95% | 0.95% | 0.95% |
Net investment income | 1.07% | 0.78% | 0.31% | 0.06% | 0.04% |
| Supplemental data | |||||
Portfolio turnover rate2 | 9% | 15% | 22% | 25% | 19% |
Net assets, end of period (000s omitted) | $25,300 | $25,016 | $13,976 | $7,994 | $8,086 |
| 1 | Calculated based upon average shares outstanding |
| 2 | Portfolio turnover rate includes the purchases and sales transactions of its wholly-owned subsidiary. |
The accompanying notes are an integral part of these consolidated financial statements.
20 | Allspring Precious Metals Fund
Consolidated financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Institutional Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $55.50 | $47.74 | $35.96 | $34.57 | $33.30 |
Net investment income | 0.64 | 0.50 | 0.24 | 0.09 1 | 0.04 |
Net realized and unrealized gains (losses) on investments | (6.11) | 8.07 | 12.59 | 1.46 | 1.23 |
Total from investment operations | (5.47) | 8.57 | 12.83 | 1.55 | 1.27 |
| Distributions to shareholders from | |||||
Net investment income | (0.92) | (0.81) | (1.05) | (0.16) | 0.00 |
Net asset value, end of period | $49.11 | $55.50 | $47.74 | $35.96 | $34.57 |
Total return | (9.59)% | 18.30% | 35.34% | 4.43% | 3.81% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 0.86% | 0.85% | 0.84% | 0.87% | 0.89% |
Net expenses | 0.79% | 0.79% | 0.79% | 0.79% | 0.79% |
Net investment income | 1.18% | 0.85% | 0.37% | 0.22% | 0.21% |
| Supplemental data | |||||
Portfolio turnover rate2 | 9% | 15% | 22% | 25% | 19% |
Net assets, end of period (000s omitted) | $115,140 | $140,363 | $127,406 | $107,907 | $95,431 |
| 1 | Calculated based upon average shares outstanding |
| 2 | Portfolio turnover rate includes the purchases and sales transactions of its wholly-owned subsidiary. |
The accompanying notes are an integral part of these consolidated financial statements.
Allspring Precious Metals Fund | 21
Notes to consolidated financial statements
1. ORGANIZATION
Allspring Funds Trust (the "Trust"), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These consolidated financial statements report on the Allspring Precious Metals Fund (the "Fund") which is a non-diversified series of the Trust.
2. INVESTMENT IN SUBSIDIARY
The Fund invests in precious metals and minerals through Special Investments (Cayman) SPC (the “Subsidiary”), a wholly owned subsidiary incorporated on May 3, 2005 under the laws of the Cayman Islands as an exempted segregated portfolio company with limited liability. As of March 31, 2023, the Subsidiary held $15,157,203 in gold bullion representing 99.62% of its net assets. The Fund is the sole shareholder of the Subsidiary. As of March 31, 2023, the Fund held $15,215,254, in the Subsidiary, representing 4.80% of the Fund’s net assets prior to consolidation.
The consolidated financial statements of the Fund include the financial results of the Subsidiary. The Consolidated Portfolio of Investments includes positions of the Fund and the Subsidiary and the consolidated financial statements include the accounts of the Fund and the Subsidiary. Accordingly, all interfund balances and transactions between the Fund and the Subsidiary have been eliminated in consolidation.
3. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the consolidated financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Securities valuation
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.
The values of securities denominated in foreign currencies are translated into U.S. dollars at rates provided by an independent foreign currency pricing source at a time each business day specified by the Valuation Committee established by Allspring Funds Management, LLC ("Allspring Funds Management").
Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore may not fully reflect trading or events that occur after the close of the principal exchange in which the foreign securities are traded, but before the close of the New York Stock Exchange. If such trading or events are expected to materially affect the value of such securities, then fair value pricing procedures implemented by Allspring Funds Management are applied. These procedures take into account multiple factors including movements in U.S. securities markets after foreign exchanges close. Foreign securities that are fair valued under these procedures are categorized as Level 2 and the application of these procedures may result in transfers between Level 1 and Level 2. Depending on market activity, such fair valuations may be frequent. Such fair value pricing may result in net asset values that are higher or lower than net asset values based on the last reported sales price or latest quoted bid price. On March 31, 2023, such fair value pricing was used in pricing certain foreign securities.
Investments in commodities are valued at their last traded price.
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value.
Investments which are not valued using the methods discussed above are valued at their fair value, as determined in good faith by Allspring Funds Management, which was named the valuation designee by the Board of Trustees. As the valuation designee, Allspring Funds Management is responsible for day-to-day valuation activities for the Allspring Funds. In connection with these responsibilities, Allspring Funds Management has established a Valuation Committee and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities. On a quarterly basis, the Board of Trustees receives reports of
22 | Allspring Precious Metals Fund
Notes to consolidated financial statements
valuation actions taken by the Valuation Committee. On at least an annual basis, the Board of Trustees receives an assessment of the adequacy and effectiveness of Allspring Funds Management's process for determining the fair value of the portfolio of investments.
Foreign currency translation
The accounting records of the Fund are maintained in U.S. dollars. The values of other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at rates provided by an independent foreign currency pricing source at a time each business day specified by the Valuation Committee. Purchases and sales of securities, and income and expenses are converted at the rate of exchange on the respective dates of such transactions. Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and liabilities other than investments in securities resulting from changes in exchange rates. The changes in net assets arising from changes in exchange rates of securities and the changes in net assets resulting from changes in market prices of securities are not separately presented. Such changes are included in net realized and unrealized gains or losses from investments.
Security transactions and income recognition
Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.
Dividend income is recognized on the ex-dividend date, except for certain dividends from foreign securities, which are recorded as soon as the custodian verifies the ex-dividend date. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.
Distributions to shareholders
Distributions to shareholders from net investment income and any net realized gains are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund's fiscal year end. Therefore, a portion of the Fund's distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
Federal and other taxes
The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.
The Subsidiary is classified as a controlled foreign corporation under Subchapter N of the Internal Revenue Code. Therefore, the Fund is required to increase its taxable income by its share of the Subsidiary’s income. Net investment losses of the Subsidiary cannot be deducted by the Fund in the current period nor carried forward to offset taxable income in future periods.
The Fund’s income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. Management has analyzed the Fund's tax positions taken on federal, state, and foreign tax returns, as applicable, for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
As of March 31, 2023, the aggregate cost of all investments for federal income tax purposes was $192,394,369 and the unrealized gains (losses) consisted of:
| Gross unrealized gains | $131,245,063 |
| Gross unrealized losses | (7,122,525) |
| Net unrealized gains | $124,122,538 |
Allspring Precious Metals Fund | 23
Notes to consolidated financial statements
Reclassifications are made to the Fund’s capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carryforwards) under federal income tax regulations. U.S. generally accepted accounting principles require that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. The primary cause of these differences was net operating loss. These reclassifications have no effect on net assets or net asset values per share. At March 31, 2023, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statement of Assets and Liabilities:
| Paid-in capital | Total distributable loss |
| $(1,087,639) | $1,087,639 |
As of March 31, 2023, the Fund had capital loss carryforwards which consisted of $38,384,096 in short-term capital losses and $97,685,156 in long-term capital losses.
As of March 31, 2023, the Fund had a qualified late-year ordinary loss of $169,332 which will be recognized on the first day of the following fiscal year.
Class allocations
The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.
4. FAIR VALUATION MEASUREMENTS
Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
| ■ | Level 1 – quoted prices in active markets for identical securities |
| ■ | Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) |
| ■ | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
24 | Allspring Precious Metals Fund
Notes to consolidated financial statements
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of March 31, 2023:
| Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
| Assets | ||||
| Investments in: | ||||
| Common stocks | ||||
| Australia | $ 0 | $ 25,557,809 | $0 | $ 25,557,809 |
| Canada | 168,322,945 | 29,811,764 | 0 | 198,134,709 |
| South Africa | 21,923,296 | 0 | 0 | 21,923,296 |
| United Kingdom | 16,628,413 | 0 | 0 | 16,628,413 |
| United States | 29,347,738 | 0 | 0 | 29,347,738 |
| Rights | ||||
| Canada | 0 | 0 | 0 | 0 |
| Warrants | ||||
| Canada | 0 | 0 | 0 | 0 |
| Commodities | 15,157,203 | 0 | 0 | 15,157,203 |
| Short-term investments | ||||
| Investment companies | 9,767,739 | 0 | 0 | 9,767,739 |
| Total assets | $261,147,334 | $55,369,573 | $0 | $316,516,907 |
Additional sector, industry or geographic detail, if any, is included in the Consolidated Portfolio of Investments.
For the year ended March 31, 2023, the Fund did not have any transfers into/out of Level 3.
5. TRANSACTIONS WITH AFFILIATES
Management fee
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Allspring Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Allspring Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:
| Average daily net assets | Management fee |
| First $500 million | 0.650% |
| Next $500 million | 0.600 |
| Next $1 billion | 0.550 |
| Next $2 billion | 0.525 |
| Next $1 billion | 0.500 |
| Next $5 billion | 0.490 |
| Over $10 billion | 0.480 |
For the year ended March 31, 2023, the management fee was equivalent to an annual rate of 0.65% of the Fund’s average daily net assets.
The Subsidiary has entered into a separate advisory contract with Allspring Funds Management to manage the investment and reinvestment of its assets in conformity with its investment objectives and restrictions. Under this agreement, the Subsidiary does not pay Allspring Funds Management a fee for its services.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Investments is the subadviser to the Fund and is
Allspring Precious Metals Fund | 25
Notes to consolidated financial statements
entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.40% and declining to 0.30% as the average daily net assets of the Fund increase.
Administration fees
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:
| Class-level administration fee | |
| Class A | 0.21% |
| Class C | 0.21 |
| Administrator Class | 0.13 |
| Institutional Class | 0.13 |
Waivers and/or expense reimbursements
Allspring Funds Management has contractually committed to waive and/or reimburse management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Allspring Funds Management will waive fees and/or reimburse expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Allspring Funds Management has contractually committed through July 31, 2023 to waive fees and/or reimburse expenses to the extent necessary to cap expenses. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. As of March 31, 2023, the contractual expense caps are as follows:
| Expense ratio caps | |
| Class A | 1.09% |
| Class C | 1.84 |
| Administrator Class | 0.95 |
| Institutional Class | 0.79 |
Distribution fee
The Trust has adopted a distribution plan for Class C shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Allspring Funds Distributor, LLC ("Allspring Funds Distributor"), the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.75% of the average daily net assets of Class C shares.
In addition, Allspring Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Allspring Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the year ended March 31, 2023, Allspring Funds Distributor received $9,223 from the sale of Class A shares. No contingent deferred sales charges were incurred by Class A and Class C shares for the year ended March 31, 2023.
Shareholder servicing fees
The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A, Class C, and Administrator Class are charged a fee at an annual rate up to 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of the Fund.
Interfund transactions
The Fund may purchase or sell portfolio investment securities to certain affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices.
26 | Allspring Precious Metals Fund
Notes to consolidated financial statements
6. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the year ended March 31, 2023 were $25,095,026 and $43,798,498, respectively. These amounts include purchase and sales transactions of the Subsidiary.
7. BANK BORROWINGS
The Trust (excluding the money market funds), Allspring Master Trust and Allspring Variable Trust are parties to a $350,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the Fund based on a borrowing rate equal to the higher of the Federal Funds rate or the overnight bank funding rate in effect on that day plus a spread. In addition, an annual commitment fee based on the unused balance is allocated to each participating fund.
For the year ended March 31, 2023, there were no borrowings by the Fund under the agreement.
8. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid was $5,651,064 and $4,753,365 of ordinary income for the years ended March 31, 2023 and March 31, 2022, respectively.
As of March 31, 2023, the components of distributable earnings on a tax basis were as follows:
| Unrealized gains | Late-year ordinary losses deferred | Capital loss carryforward |
| $124,122,336 | $(169,332) | $(136,069,252) |
9. CONCENTRATION RISKS
The Fund concentrated its portfolio of investments in precious metals and minerals with a geographic emphasis in Canada. A fund that invests a substantial portion of its assets in any sector or geographic region may be more affected by changes in that sector or geographic region than would be a fund whose investments are not heavily weighted in any sector or geographic region.
10. INDEMNIFICATION
Under the Fund's organizational documents, the officers and Trustees have been granted certain indemnification rights against certain liabilities that may arise out of performance of their duties to the Fund. The Fund has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Fund’s organizational documents into contractual rights that cannot be changed in the future without the consent of the Trustee. Additionally, in the normal course of business, the Fund may enter into contracts with service providers that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.
Allspring Precious Metals Fund | 27
Report of independent registered public accounting firm
To the Shareholders of the Fund and Board of Trustees
Allspring Funds Trust:
Allspring Funds Trust:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statement of assets and liabilities of Allspring Precious Metals Fund and subsidiary (the Fund), one of the funds constituting Allspring Funds Trust, including the consolidated portfolio of investments, as of March 31, 2023, the related consolidated statement of operations for the year then ended, the consolidated statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the consolidated financial statements) and the consolidated financial highlights for each of the years in the five-year period then ended. In our opinion, the consolidated financial statements and consolidated financial highlights present fairly, in all material respects, the financial position of the Fund as of March 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the consolidated financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These consolidated financial statements and consolidated financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these consolidated financial statements and consolidated financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements and consolidated financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements and consolidated financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements and consolidated financial highlights. Such procedures also included confirmation of securities owned as of March 31, 2023, by correspondence with the custodian and transfer agent. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements and consolidated financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have not been able to determine the specific year that we began serving as the auditor of one or more Allspring Funds investment companies; however, we are aware that we have served as the auditor of one or more Allspring Funds investment companies since at least 1955.
Boston, Massachusetts
May 25, 2023
28 | Allspring Precious Metals Fund
Other information (unaudited)
TAX INFORMATION
For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 16% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended March 31, 2023.
Pursuant to Section 854 of the Internal Revenue Code, $5,161,064 of income dividends paid during the fiscal year ended March 31, 2023 has been designated as qualified dividend income (QDI).
Pursuant to Section 853 of the Internal Revenue Code, the Fund expects to designate amounts as foreign taxes paid for the fiscal year ended March 31, 2023. Additional details will be available in the semiannual report.
| Creditable foreign taxes paid | Per share amount | Foreign income as % of ordinary income distributions |
| $654,386 | $0.0998 | 48% |
PROXY VOTING INFORMATION
A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our website at allspringglobal.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at allspringglobal.com or by visiting the SEC website at sec.gov.
QUARTERLY PORTFOLIO HOLDINGS INFORMATION
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
Allspring Precious Metals Fund | 29
Other information (unaudited)
BOARD OF TRUSTEES AND OFFICERS
Each of the Trustees and Officers listed in the table below acts in identical capacities for each fund in the Allspring family of funds, which consists of 127 mutual funds comprising the Allspring Funds Trust, Allspring Variable Trust, Allspring Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information1. The mailing address of each Trustee and Officer is 1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203. Each Trustee and Officer serves an indefinite term, however, each Trustee serves such term until reaching the mandatory retirement age established by the Trustees.
Independent Trustees
| Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
| William R. Ebsworth (Born 1957) | Trustee, since 2015 | Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Foundation (non-profit organization). Mr. Ebsworth is a CFA® charterholder. | N/A |
| Jane A. Freeman (Born 1953) | Trustee, since 2015; Chair Liaison, since 2018 | Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is also an inactive Chartered Financial Analyst. | N/A |
| Isaiah Harris, Jr. (Born 1952) | Trustee, since 2009; Audit Committee Chair, since 2019 | Retired. Member of the Advisory Board of CEF of East Central Florida. Chairman of the Board of CIGNA Corporation from 2009 to 2021, and Director from 2005 to 2008. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Fellowship of Christian Athletes. Mr. Harris is a certified public accountant (inactive status). | N/A |
| David F. Larcker (Born 1950) | Trustee, since 2009 | Distinguished Visiting Fellow at the Hoover Institution since 2022. James Irvin Miller Professor of Accounting at the Graduate School of Business (Emeritus), Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. | N/A |
30 | Allspring Precious Metals Fund
Other information (unaudited)
| Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
| Olivia S. Mitchell (Born 1953) | Trustee, since 2006; Nominating and Governance Committee Chair, since 2018 | International Foundation of Employee Benefit Plans Professor since 1993, Wharton School of the University of Pennsylvania. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously taught at Cornell University from 1978 to 1993. | N/A |
| Timothy J. Penny (Born 1951) | Trustee, since 1996; Chair, since 2018 | President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Vice Chair of the Economic Club of Minnesota, since 2007. Co-Chair of the Committee for a Responsible Federal Budget, since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, from 2007-2022. Senior Fellow of the University of Minnesota Humphrey Institute from 1995 to 2017. | N/A |
| James G. Polisson (Born 1959) | Trustee, since 2018 | Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations. | N/A |
| Pamela Wheelock (Born 1959) | Trustee, since January 2020; previously Trustee from January 2018 to July 2019 | Retired. Executive and Senior Financial leadership positions in the public, private and nonprofit sectors. Interim President and CEO, McKnight Foundation, 2020. Interim Commissioner, Minnesota Department of Human Services, 2019. Chief Operating Officer, Twin Cities Habitat for Humanity, 2017-2019. Vice President for University Services, University of Minnesota, 2012-2016. Interim President and CEO, Blue Cross and Blue Shield of Minnesota, 2011-2012. Executive Vice-President and Chief Financial Officer, Minnesota Wild, 2002-2008. Commissioner, Minnesota Department of Finance, 1999-2002. Chair of the Board of Directors of Destination Medical Center Corporation. Board member of the Minnesota Wild Foundation. | N/A |
* Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.
Allspring Precious Metals Fund | 31
Other information (unaudited)
Officers2
| Name and year of birth | Position held and length of service | Principal occupations during past five years or longer |
| Andrew Owen (Born 1960) | President, since 2017 | President and Chief Executive Officer of Allspring Funds Management, LLC since 2017 and Head of Global Fund Governance of Allspring Global Investments since 2022. Prior thereto, co-president of Galliard Capital Management, LLC, an affiliate of Allspring Funds Management, LLC, from 2019 to 2022 and Head of Affiliated Managers, Allspring Global Investments, from 2014 to 2019 and Executive Vice President responsible for marketing, investments and product development for Allspring Funds Management, LLC, from 2009 to 2014. |
| Jeremy DePalma (Born 1974) | Treasurer, since 2012 (for certain funds in the Fund Complex); since 2021 (for the remaining funds in the Fund Complex) | Senior Vice President of Allspring Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010. |
| Christopher Baker (Born 1976) | Chief Compliance Officer, since 2022 | Global Chief Compliance Officer for Allspring Global Investments since 2022. Prior thereto, Chief Compliance Officer for State Street Global Advisors from 2018 to 2021. Senior Compliance Officer for the State Street divisions of Alternative Investment Solutions, Sector Solutions, and Global Marketing from 2015 to 2018. From 2010 to 2015 Vice President, Global Head of Investment and Marketing Compliance for State Street Global Advisors. |
| Matthew Prasse (Born 1983) | Chief Legal Officer, since 2022; Secretary, since 2021 | Senior Counsel of the Allspring Legal Department since 2021. Senior Counsel of the Wells Fargo Legal Department from 2018 to 2021. Previously, Counsel for Barings LLC from 2015 to 2018. Prior to joining Barings, Associate at Morgan, Lewis & Bockius LLP from 2008 to 2015. |
1 The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at allspringglobal.com.
2 For those Officers with tenures at Allspring Global Investments and/or Allspring Funds Management, LLC that began prior to 2021, such tenures include years of service during which these businesses/entities were known as Wells Fargo Asset Management and Wells Fargo Funds Management, LLC, respectively.
32 | Allspring Precious Metals Fund
For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Fund's website, or call:
Allspring Funds
P.O. Box 219967
Kansas City, MO 64121-9967
P.O. Box 219967
Kansas City, MO 64121-9967
Website: allspringglobal.com
Individual investors: 1-800-222-8222
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-800-260-5969
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call
1-800-222-8222 or visit the Fund's website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
1-800-222-8222 or visit the Fund's website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
Allspring Global InvestmentsTM is the trade name for the asset management firms of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management, LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind - including a recommendation for any specific investment, strategy, or plan.
© 2023 Allspring Global Investments Holdings, LLC. All rights reserved.
ALL-04052023-afoirp1c 05-23
AR0654 03-23
AR0654 03-23
Annual Report
March 31, 2023
Allspring
Discovery Innovation Fund
Discovery Innovation Fund
(formerly, Allspring Specialized Technology Fund)
Contents
| 2 | |
| 6 | |
| 10 | |
| 11 | |
| Financial statements | |
| 14 | |
| 15 | |
| 16 | |
| 17 | |
| 21 | |
| 28 | |
| 29 |
The views expressed and any forward-looking statements are as of March 31, 2023, unless otherwise noted, and are those of the Fund's portfolio managers and/or Allspring Global Investments. Discussions of individual securities or the markets generally are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Allspring Global Investments disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.
Allspring Discovery Innovation Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Discovery Innovation Fund for the 12-month period that ended March 31, 2023. Effective September 6, 2022, the Fund changed its name from Allspring Specialized Technology Fund to Allspring Discovery Innovation Fund. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. Earlier tailwinds provided by global stimulus programs, vaccination rollouts, and recovering consumer and corporate sentiment were wiped away by the highest rate of inflation in four decades as well as the impact of ongoing aggressive central bank rate hikes and the prospect of more rate hikes. Compounding these concerns were the global reverberations of the Russia-Ukraine war and the impact of China’s strict COVID-19 lockdowns, which were removed in December.
For the 12-month period, stocks and bonds––both domestic U.S. and global––suffered broad losses. For the period, U.S. stocks, based on the S&P 500 Index,1 returned -7.73%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned -5.07%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a decline of 10.70%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -4.78%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 10.72%, the Bloomberg Municipal Bond Index6 gained 0.26%, and the ICE BofA U.S. High Yield Index7 fell 3.50%.
High inflation and central bank rate hikes rocked markets.
In April 2022, market headwinds created by Russia’s invasion of Ukraine in February continued, with broad and deep losses as both the S&P 500 and MSCI ACWI (Net)8 fell 8% or more for the month and commodity shortages added to global inflation. The Chinese economy struggled through a strict lockdown as the government tried to contain a major COVID-19 outbreak. The ensuing global ripple effect compounded existing supply shortages. Meanwhile, U.S. annual inflation raged at 8.5%, its highest level since 1981, and investors braced themselves for aggressive Federal Reserve (Fed) monetary tightening moves.
Market volatility continued in May, although markets recovered ground late in the month. Value stocks continued to outperform growth stocks. The concerns that had dominated markets for months continued, including high inflation and geopolitical tensions that added to high crude oil, gasoline, and food prices. In response, the Fed raised the federal funds rate by 0.50%. Meanwhile, highly contagious COVID-19 variants persisted. However, labor markets in the U.S., the U.K., and Europe remained strong. U.S. retail sales increased for the fourth consecutive month in April—a sign of consumer resilience.
“ In April 2022, market headwinds created by Russia’s invasion of Ukraine in February continued, with broad and deep losses as both the S&P 500 Index and MSCI All Country World Index fell 8% or more for the month and commodity shortages added to global inflation.”
| 1 | The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock's weight in the index proportionate to its market value. You cannot invest directly in an index. |
| 2 | The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding the U.S. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. You cannot invest directly in an index. |
| 3 | The MSCI Emerging Markets (EM) Index (Net) (USD) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index. |
| 4 | The Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S.-dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index. |
| 5 | The Bloomberg Global Aggregate ex-USD Index (unhedged) is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S.-dollar-denominated debt market. You cannot invest directly in an index. |
| 6 | The Bloomberg Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index. |
| 7 | The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2023. ICE Data Indices, LLC. All rights reserved. |
| 8 | The MSCI ACWI (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets. You cannot invest directly in an index. |
2 | Allspring Discovery Innovation Fund
Letter to shareholders (unaudited)
In June, stocks posted further losses en route to their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were the familiar factors: rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Fed raised its short-term rate by another 0.75% in June. Meanwhile, the U.S. unemployment rate held firm at 3.6% and the housing market remained only marginally affected by sharply higher mortgage rates.
Markets rebounded in July, led by U.S. stocks. While U.S. economic activity showed signs of waning, the country’s labor market remained surprisingly strong: July nonfarm payrolls grew by more than 500,000 and U.S. unemployment dipped to 3.5%. Meanwhile, crude oil and retail gasoline prices, major contributors to recent overall inflation, fell substantially from earlier highs. And while U.S. home prices rose, home sales fell as houses became less affordable with mortgage rates at a 13-year high. The Fed raised the federal funds rate another 0.75% in July—to a range of 2.25% to 2.50%—and forecasts pointed to further rate hikes.
August was yet another broadly challenging month for financial markets, with more red ink flowing. High inflation persisted, cresting 9% in the eurozone on an annual basis and remaining above 8% in the U.S. despite the Fed’s aggressive monetary policy and a major drop in global crude oil and gasoline prices from their June peak. One positive note was the resilient U.S. job market. However, the Fed’s job was clearly not complete. One longer-term bright spot was the U.S. Congress’s passage of the Inflation Reduction Act. Its primary stated goals include: to reduce inflation (though not immediately) by curbing the deficit, capping health care spending by seniors, and investing in domestic sources of clean energy.
The market misery continued in September as all asset classes suffered major losses. Central banks kept up their battle against rapidly rising prices with more rate hikes. The strength of the U.S. dollar weighed on results for investors holding non-U.S.-dollar assets. U.S. mortgage rates jumped to near 7% on 30-year fixed-rate mortgages; the decreased housing affordability began to cool demand somewhat. The U.K. experienced a sharp sell-off of government bonds and the British pound in September as investors panicked in response to a new government budget that was seen as financially unsound. The Bank of England (BoE) then stepped in and bought long-dated government bonds.
Equities had a reprieve in October. Value stocks and small caps fared best. Globally, developed markets outpaced emerging market equities, which were hurt by weakness among Chinese stocks. Central banks continued to try to curtail high inflation with aggressive interest rate hikes. Geopolitical risks persisted, including the ongoing Russia-Ukraine war and economic, financial market, and political turmoil in the U.K. Concerns over Europe’s energy crisis eased thanks to unseasonably warm weather and plentiful gas on hand. The U.S. labor market continued its resilience against rising prices as unemployment remained near a record low.
Stocks and bonds rallied in November. Economic news was encouraging, driven by U.S. labor market strength. Although central banks kept raising rates, hopes rose for an easing in the pace of rate hikes and a possible end to central bank monetary tightening in 2023. Although inflation remained at record highs in the eurozone, we began to see signs of a possible decline in inflationary pressures as U.S. inflation moderated, with a 7.1% annual price rise in November and a monthly price increase of just 0.1%. China’s economic data remained weak, reflecting its zero-COVID-19 policy.
Financial markets cooled in December, with U.S. equities posting negative overall results in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever with flat overall monthly returns as markets weighed the hopes for an end to the monetary tightening cycle with the reality that central banks had not completed their jobs yet. U.S. Consumer Price Index (CPI)1 data showed a strong consistent trend downward, which brought down the 12-month CPI to 6.5% in December from 9.1% in June. Other countries and regions reported still-high but declining inflation rates as the year winded down.
The year 2023 began with a rally across global equities and fixed income securities. Investor optimism rose in response to data indicating declining inflation rates and the reopening of China’s economy with the abrupt end to its zero-COVID-19 policy. The U.S. reported surprisingly strong job gains––employers added more than 500,000 jobs––and unemployment fell to 3.4%, the lowest level since 1969. Meanwhile, wage growth, seen as a potential contributor to ongoing high inflation, continued to moderate. All eyes remained fixed on the Fed and on how many more rate hikes remain in this tightening cycle. The 0.25% federal funds rate hike announced in January was the Fed’s smallest rate increase since March 2022.
“In June, stocks posted further losses en route to their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were the familiar factors: rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation.”
| 1 | The U.S. Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. You cannot invest directly in an index. |
Allspring Discovery Innovation Fund | 3
Letter to shareholders (unaudited)
Financial markets declined in February as investors responded unfavorably to resilient economic data. The takeaway: Central banks will likely continue their monetary tightening cycle for longer than markets had priced in. In this environment—where strong economic data is seen as bad news—the resilient U.S. labor market was seen as a negative while the inflation rate has not been falling quickly enough for the Fed, which raised interest rates by 0.25% in early February. Meanwhile, the BoE and the European Central Bank both raised rates by 0.50%.
The collapse of Silicon Valley Bank in March, the second-largest banking failure in U.S. history, led to a classic bank run that spread to Europe, where Switzerland’s Credit Suisse was taken over by its rival, UBS. The sudden banking industry uncertainty led some clients of regional banks to transfer deposits to a handful of U.S. banking giants while bank shareholders sold stock. The banking industry turmoil could make the job of central banks more challenging as they weigh inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. The U.S. labor market remained resilient. The euro-area composite Purchasing Managers’ Index1 rose to 53.70, indicating expansion, for March. And China’s economy continued to rebound after the removal of its COVID-19 lockdown. Inflation rates in the U.S., the U.K., and Europe all remained higher than central bank targets, leading to additional rate hikes in March.
Don’t let short-term uncertainty derail long-term investment goals.
Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Allspring Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.
Thank you for choosing to invest with Allspring Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.
Sincerely,
Andrew Owen
President
Allspring Funds
President
Allspring Funds
For further information about your fund, contact your investment professional, visit our website at allspringglobal.com, or call us directly at 1-800-222-8222.
| 1 | The Purchasing Managers' Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. You cannot invest directly in an index. |
4 | Allspring Discovery Innovation Fund
Performance highlights (unaudited)
| Investment objective | The Fund seeks long-term capital appreciation. |
| Manager | Allspring Funds Management, LLC |
| Subadviser | Allspring Global Investments, LLC |
| Portfolio managers | Michael T. Smith#, Christopher J. Warner, CFA# |
| Average annual total returns (%) as of March 31, 2023 | |||||||||||
| Including sales charge | Excluding sales charge | Expense ratios1 (%) | |||||||||
| Inception date | 1 year | 5 year | 10 year | 1 year | 5 year | 10 year | Gross | Net 2 | |||
| Class A (WFSTX) | 9-18-2000 | -25.94 | 8.96 | 15.02 | -21.42 | 10.26 | 15.71 | 1.28 | 1.23 | ||
| Class C (WFTCX) | 9-18-2000 | -23.09 | 9.45 | 15.03 | -22.09 | 9.45 | 15.03 | 2.03 | 1.98 | ||
| Administrator Class (WFTDX) | 7-30-2010 | – | – | – | -21.30 | 10.36 | 15.84 | 1.20 | 1.15 | ||
| Institutional Class (WFTIX)3 | 10-31-2016 | – | – | – | -21.13 | 10.62 | 16.01 | 0.95 | 0.90 | ||
| Russell 3000® Growth Index4 | – | – | – | – | -10.88 | 13.02 | 14.16 | – | – | ||
| S&P North American Technology Sector Index5 | – | – | – | – | -11.73 | 14.66 | 17.98 | – | – | ||
Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on an investment in a fund. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, allspringglobal.com.
Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.
For Class A shares, the maximum front-end sales charge is 5.75%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Administrator Class and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.
| 1 | Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report. |
| 2 | The manager has contractually committed through July 31, 2024, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 1.23% for Class A, 1.98% for Class C, 1.15% for Administrator Class, and 0.90% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense caps. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. Without these caps, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses. |
| 3 | Historical performance shown for the Institutional Class shares prior to their inception reflects the performance of the Administrator Class shares, and includes the higher expenses applicable to the Administrator Class shares. If these expenses had not been included, returns for the Institutional Class shares would be higher. |
| 4 | The Russell 3000® Growth Index measures the performance of those Russell 3000® Index companies with higher price/book ratios and higher forecasted growth values. You cannot invest directly in an index. The Fund has changed its primary benchmark from the S&P North American Technology Sector Index to the Russell 3000® Growth Index to more accurately reflect the revised strategy of the Fund. The S&P North American Technology Sector Index will remain as a secondary benchmark for the Fund. |
| 5 | The S&P North American Technology Sector Index is a modified market-capitalization-weighted index of select technology stocks. You cannot invest directly in an index |
Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Funds that concentrate their investments in limited sectors, such as information technology, are more vulnerable to adverse market, economic, regulatory, political, or other developments affecting those sectors. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This fund is exposed to convertible securities risk, foreign investment risk, non-diversification risk, and smaller-company securities risk. Consult the Fund’s prospectus for additional information on these and other risks.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
| # | Mr. Smith and Mr. Warner became portfolio managers of the Fund on July 15, 2022. |
6 | Allspring Discovery Innovation Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of March 31, 20231
| 1 | The chart compares the performance of Class A shares for the most recent ten years with the Russell 3000® Growth Index and S&P North American Technology Sector Index. The chart assumes a hypothetical investment of $10,000 in Class A shares and reflects all operating expenses and assumes the maximum initial sales charge of 5.75%. |
Allspring Discovery Innovation Fund | 7
Performance highlights (unaudited)
MANAGER'S DISCUSSION
Fund highlights
| ■ | The Discovery Growth Equity team assumed management of the Fund on September 6, 2022, at which time the Russell 3000® Growth Index replaced the S&P North American Technology Sector Index as the Fund’s primary benchmark. |
| ■ | The Fund underperformed the Russell 3000® Growth Index for the 12-month period that ended March 31, 2023. |
| ■ | Holdings within the information technology (IT) and communication services sectors detracted from performance. |
| ■ | Security selection within the consumer discretionary and financials sectors contributed to the Fund’s performance. |
Inflation and monetary policy dominated market sentiment.
Over the past year, a continual stream of macro headlines created high volatility for investors. Market sentiment fluctuated as investors grappled with high inflation, tightening Federal Reserve (Fed) policy, supply chain disruptions, and the war in Ukraine. Amid this uncertainty, the dominant storyline was persistently high inflation as the headline year-over-year U.S. Consumer Price Index* reached the highest levels in more than 40 years. In response, the Fed’s monetary policy became hawkish and materially tightened financial conditions. The markets reacted swiftly and sharply. Volatility spiked over renewed concerns that the Fed may overshoot a soft landing, driving the economy into a recession. As a result, rising discount rates pressured valuations of long-duration growth stocks—those businesses with superior revenue growth projected years into the future. Additionally, investors rotated out of IT and e-commerce stocks due to concerns that a recession would reduce IT and consumer spending. For many companies with disruptive technologies, a disconnection emerged between stock prices and underlying fundamentals. By March 2023, multiple regional banks collapsed as depositors sought higher rates elsewhere. With the strain of the high rates beginning to weigh on the economy, investors shifted their focus to companies that exhibited profitability and resilient financial results
Holdings within the IT and communication services sectors detracted from performance.
MongoDB, Inc. (MDB), provides a global cloud “database-as-a-service” that interfaces with the largest public cloud providers. During the year, MongoDB provided cautious guidance as macro headwinds paused IT spending and increased layoffs. With less than half of corporate data currently stored in the cloud, MongoDB’s addressable market remains underpenetrated, providing a long runway of potential future growth. While we hold conviction in the
long-term transition to the cloud, we are closely monitoring MongoDB’s fundamentals.
| Ten largest holdings (%) as of March 31, 20231 | |
| Microsoft Corporation | 9.56 |
| Alphabet Incorporated Class C | 7.99 |
| Visa Incorporated Class A | 6.96 |
| Teledyne Technologies Incorporated | 6.16 |
| Amazon.com Incorporated | 4.48 |
| UnitedHealth Group Incorporated | 3.90 |
| Novanta Incorporated | 3.79 |
| Chipotle Mexican Grill Incorporated | 3.50 |
| Apple Incorporated | 3.27 |
| WNS Holdings Limited ADR | 2.90 |
| 1 | Figures represent the percentage of the Fund's net assets. Holdings are subject to change and may have changed since the date specified. |
Within communication services, ZoomInfo Technologies, Inc. (ZI), hosts a global database that connects sales and marketing professionals with prospective clients. During the year, layoffs within the tech industry and economic headwinds elongated the sales cycle for ZoomInfo. The company is shifting tactics to diversify its client base and strategically target C-suite relationships. Additionally, the quality of the company’s profitability metrics is among the highest in its industry. Despite current economic uncertainties, we remain a believer in ZoomInfo’s long-term growth opportunity.
Security selection within the consumer discretionary sector contributed to the Fund’s performance.
MercadoLibre, Inc. (MELI), is the leading e-commerce provider in Latin America. While competitors have attempted to capture market share, MercadoLibre’s proprietary shipping network and extensive fulfillment centers have allowed the company to retain its edge. In addition, the company has a
| * | The U.S. Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. You cannot invest directly in an index. |
8 | Allspring Discovery Innovation Fund
Performance highlights (unaudited)
suite of payment options that provide essential banking solutions to consumers and creditors. During the year, MercadoLibre exceeded revenue estimates and improved margins, in part due to increased advertising revenue from its e-commerce platform. We continue to hold high conviction in MercadoLibre’s ability to generate long-term growth.
Also within consumer discretionary, Chipotle Mexican Grill, Inc. (CMG), reported favorable results across various key performance indicators. By focusing on employee benefits, such as competitive wages, career path development, and retirement benefits, the company has positively navigated the severe labor shortages facing the restaurant industry. Additionally, Chipotle has improved profit margins by incrementally raising prices and reducing advertising spending. With full ownership of all locations, the company has built a strong balance sheet and avoided the complexity of franchise partners. We believe Chipotle’s strong business model, loyal customers, and expanding footprint are positioning the company for superior long-term growth.
| Sector allocation as of March 31, 20231 |
| 1 | Figures represent the percentage of the Fund's long-term investments. Allocations are subject to change and may have changed since the date specified. |
The growth of a business remains our north star.
As fundamentals become a key return driver later in the business cycle, we see opportunity for growth stocks relative to cyclical businesses with greater exposure to the weakening economy. Estimates for S&P 500 Index* earnings growth in 2023 have begun to decline, which is an indication that policy tightening is starting to flow through to the real economy. As growth expectations compress downward, companies that can grow organically through a rough economic patch are harder to find. We believe this is a rather compelling case for investing in growth equities. Relative valuations of growth stocks compared with the broad market are near their long-term average and, in our view, have likely completed the bulk of their de-rating in this cycle.
Despite our bullishness for growth stocks, the range of outcomes for the economy remains very wide in 2023. We believe the events from the past quarter—easing inflation, the banking crisis, shifting rate expectations—have created tailwinds for our investing style, but it is still important to be mindful of risks. As a result, we remain selective and favor companies with durable fundamentals and a higher certainty of meeting expectations. Furthermore, we have diligently continued to adjust portfolio construction. Exposure to idiosyncratic and resilient “core” growth holdings has increased while maintaining a balanced exposure to higher-growth “developing situations.”
Over the long term, we believe the growth of an underlying business is the dominant driver of equity returns and is the guiding principle of our investment philosophy. Therefore, we are of the opinion that the fundamental growth of our portfolios will be unlocked and reward the patience of our shareholders with strong future performance.
| * | The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock's weight in the index proportionate to its market value. You cannot invest directly in an index. |
Allspring Discovery Innovation Fund | 9
Fund expenses (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period from October 1, 2022 to March 31, 2023.
Actual expenses
The “Actual” line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Actual” line under the heading entitled “Expenses paid during period” for your applicable class of shares to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The “Hypothetical” line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) and contingent deferred sales charges. Therefore, the “Hypothetical” line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning account value 10-1-2022 | Ending account value 3-31-2023 | Expenses paid during the period1 | Annualized net expense ratio | |
| Class A | ||||
| Actual | $1,000.00 | $1,100.63 | $ 6.44 | 1.23% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.80 | $ 6.19 | 1.23% |
| Class C | ||||
| Actual | $1,000.00 | $1,095.93 | $10.35 | 1.98% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,015.06 | $ 9.95 | 1.98% |
| Administrator Class | ||||
| Actual | $1,000.00 | $1,101.42 | $ 6.03 | 1.15% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.20 | $ 5.79 | 1.15% |
| Institutional Class | ||||
| Actual | $1,000.00 | $1,101.95 | $ 4.72 | 0.90% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.44 | $ 4.53 | 0.90% |
1 Expenses paid is equal to the annualized net expense ratio of each class multiplied by the average account value over the period, multiplied by 182 divided by 365 (to reflect the one-half-year period).
10 | Allspring Discovery Innovation Fund
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Common stocks: 97.89% | |||||
| Communication services: 12.92% | |||||
| Entertainment: 2.57% | |||||
| Activision Blizzard Incorporated | 38,871 | $ 3,326,969 | |||
| Spotify Technology SA † | 52,719 | 7,044,313 | |||
| 10,371,282 | |||||
| Interactive media & services: 10.35% | |||||
| Alphabet Incorporated Class C † | 309,852 | 32,224,608 | |||
| Bumble Incorporated Class A † | 109,700 | 2,144,635 | |||
| IAC/InterActiveCorp † | 71,078 | 3,667,625 | |||
| ZoomInfo Technologies Incorporated † | 150,559 | 3,720,313 | |||
| 41,757,181 | |||||
| Consumer discretionary: 10.82% | |||||
| Broadline retail: 7.32% | |||||
| Amazon.com Incorporated † | 175,179 | 18,094,239 | |||
| Global-E Online Limited † | 92,313 | 2,975,248 | |||
| MercadoLibre Incorporated † | 6,438 | 8,485,670 | |||
| 29,555,157 | |||||
| Hotels, restaurants & leisure: 3.50% | |||||
| Chipotle Mexican Grill Incorporated † | 8,257 | 14,105,351 | |||
| Financials: 16.03% | |||||
| Capital markets: 2.83% | |||||
| MSCI Incorporated | 8,897 | 4,979,562 | |||
| S&P Global Incorporated | 18,730 | 6,457,542 | |||
| 11,437,104 | |||||
| Financial services: 10.84% | |||||
| Adyen NV ADR † | 138,645 | 2,196,137 | |||
| Fiserv Incorporated † | 98,528 | 11,136,620 | |||
| MasterCard Incorporated Class A | 6,368 | 2,314,195 | |||
| Visa Incorporated Class A | 124,526 | 28,075,632 | |||
| 43,722,584 | |||||
| Insurance: 2.36% | |||||
| Progressive Corporation | 66,645 | 9,534,234 | |||
| Health care: 11.95% | |||||
| Biotechnology: 0.75% | |||||
| Exact Sciences Corporation † | 44,797 | 3,037,685 | |||
| Health care equipment & supplies: 1.30% | |||||
| Intuitive Surgical Incorporated † | 20,484 | 5,233,047 | |||
| Health care providers & services: 5.17% | |||||
| HealthEquity Incorporated † | 86,967 | 5,105,833 | |||
| UnitedHealth Group Incorporated | 33,294 | 15,734,411 | |||
| 20,840,244 |
The accompanying notes are an integral part of these financial statements.
Allspring Discovery Innovation Fund | 11
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Life sciences tools & services: 4.73% | |||||
| Bio-Rad Laboratories Incorporated Class A † | 21,280 | $ 10,193,546 | |||
| Bio-Techne Corporation | 93,677 | 6,949,897 | |||
| Illumina Incorporated † | 8,382 | 1,949,234 | |||
| 19,092,677 | |||||
| Industrials: 4.82% | |||||
| Ground transportation: 1.45% | |||||
| J.B. Hunt Transport Services Incorporated | 33,231 | 5,830,711 | |||
| Professional services: 3.37% | |||||
| Automatic Data Processing Incorporated | 8,590 | 1,912,392 | |||
| WNS Holdings Limited ADR † | 125,416 | 11,685,009 | |||
| 13,597,401 | |||||
| Information technology: 41.35% | |||||
| Communications equipment: 1.73% | |||||
| Motorola Solutions Incorporated | 24,358 | 6,969,555 | |||
| Electronic equipment, instruments & components: 9.95% | |||||
| Novanta Incorporated † | 96,029 | 15,277,254 | |||
| Teledyne Technologies Incorporated † | 55,546 | 24,849,059 | |||
| 40,126,313 | |||||
| IT services: 3.02% | |||||
| Globant SA † | 41,413 | 6,792,146 | |||
| MongoDB Incorporated † | 23,165 | 5,400,225 | |||
| 12,192,371 | |||||
| Professional services: 0.66% | |||||
| Maximus Incorporated | 33,918 | 2,669,347 | |||
| Semiconductors & semiconductor equipment: 5.90% | |||||
| Advanced Micro Devices Incorporated † | 31,697 | 3,106,623 | |||
| Enphase Energy Incorporated † | 28,806 | 6,057,326 | |||
| Impinj Incorporated † | 31,394 | 4,254,515 | |||
| Micron Technology Incorporated | 76,097 | 4,591,693 | |||
| Monolithic Power Systems Incorporated | 5,546 | 2,775,995 | |||
| Wolfspeed Incorporated † | 46,536 | 3,022,513 | |||
| 23,808,665 | |||||
| Software: 16.82% | |||||
| BILL Holdings Incorporated † | 45,438 | 3,686,839 | |||
| Crowdstrike Holdings Incorporated Class A † | 46,443 | 6,374,766 | |||
| Gen Digital | 76,407 | 1,311,144 | |||
| HubSpot Incorporated † | 20,422 | 8,755,933 | |||
| Microsoft Corporation | 133,763 | 38,563,868 | |||
| Oracle Corporation | 31,041 | 2,884,330 | |||
| Tyler Technologies Incorporated † | 17,788 | 6,308,336 | |||
| 67,885,216 | |||||
| Technology hardware, storage & peripherals: 3.27% | |||||
| Apple Incorporated | 80,064 | 13,202,554 | |||
| Total Common stocks (Cost $321,869,054) | 394,968,679 |
The accompanying notes are an integral part of these financial statements.
12 | Allspring Discovery Innovation Fund
Portfolio of investments—March 31, 2023
| Yield | Shares | Value | |||
| Short-term investments: 2.29% | |||||
| Investment companies: 2.29% | |||||
| Allspring Government Money Market Fund Select Class ♠∞ | 4.69% | 9,241,903 | $ 9,241,903 | ||
| Total Short-term investments (Cost $9,241,903) | 9,241,903 | ||||
| Total investments in securities (Cost $331,110,957) | 100.18% | 404,210,582 | |||
| Other assets and liabilities, net | (0.18) | (710,050) | |||
| Total net assets | 100.00% | $403,500,532 |
| † | Non-income-earning security |
| ♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
| ∞ | The rate represents the 7-day annualized yield at period end. |
| Abbreviations: | |
| ADR | American depositary receipt |
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
| Value, beginning of period | Purchases | Sales proceeds | Net realized gains (losses) | Net change in unrealized gains (losses) | Value, end of period | Shares, end of period | Income from affiliated securities | |||
| Short-term investments | ||||||||||
| Allspring Government Money Market Fund Select Class | $31,826,516 | $117,338,727 | $(139,923,340) | $0 | $0 | $ 9,241,903 | 9,241,903 | $ 258,429 | ||
| Investments in affiliates no longer held at end of period | ||||||||||
| Securities Lending Cash Investments LLC | 786,600 | 78,600 | (865,200) | 0 | 0 | 0 | 0 | 43 # | ||
| $0 | $0 | $9,241,903 | $258,472 | |||||||
| # | Amount shown represents income before fees and rebates. |
The accompanying notes are an integral part of these financial statements.
Allspring Discovery Innovation Fund | 13
Statement of assets and liabilities—March 31, 2023
| Assets | |
Investments in unaffiliated securities, at value (cost $321,869,054) | $ 394,968,679 |
Investments in affiliated securities, at value (cost $9,241,903) | 9,241,903 |
Receivable for Fund shares sold | 89,415 |
Receivable for dividends | 86,358 |
Prepaid expenses and other assets | 68,171 |
Total assets | 404,454,526 |
| Liabilities | |
Payable for Fund shares redeemed | 417,170 |
Management fee payable | 212,785 |
Shareholder servicing fees payable | 81,418 |
Administration fees payable | 71,263 |
Distribution fee payable | 3,538 |
Accrued expenses and other liabilities | 167,820 |
Total liabilities | 953,994 |
Total net assets | $403,500,532 |
| Net assets consist of | |
Paid-in capital | $ 375,288,254 |
Total distributable earnings | 28,212,278 |
Total net assets | $403,500,532 |
| Computation of net asset value and offering price per share | |
Net assets – Class A | $ 362,753,711 |
Shares outstanding – Class A1 | 40,474,537 |
Net asset value per share – Class A | $8.96 |
Maximum offering price per share – Class A2 | $9.51 |
Net assets – Class C | $ 5,440,555 |
Shares outstanding – Class C1 | 1,312,910 |
Net asset value per share – Class C | $4.14 |
Net assets – Administrator Class | $ 6,305,031 |
Shares outstanding – Administrator Class1 | 668,178 |
Net asset value per share – Administrator Class | $9.44 |
Net assets – Institutional Class | $ 29,001,235 |
Shares outstanding – Institutional Class1 | 2,986,322 |
Net asset value per share – Institutional Class | $9.71 |
| 1 | The Fund has an unlimited number of authorized shares. |
| 2 | Maximum offering price is computed as 100/94.25 of net asset value. On investments of $50,000 or more, the offering price is reduced. |
The accompanying notes are an integral part of these financial statements.
14 | Allspring Discovery Innovation Fund
Statement of operations—year ended March 31, 2023
| Investment income | |
Dividends (net of foreign withholdings taxes of $21,937) | $ 1,734,640 |
Income from affiliated securities | 258,475 |
Total investment income | 1,993,115 |
| Expenses | |
Management fee | 3,638,127 |
| Administration fees | |
Class A | 821,172 |
Class C | 13,711 |
Administrator Class | 9,548 |
Institutional Class | 53,308 |
| Shareholder servicing fees | |
Class A | 974,873 |
Class C | 16,206 |
Administrator Class | 18,349 |
| Distribution fee | |
Class C | 48,618 |
Custody and accounting fees | 59,137 |
Professional fees | 60,269 |
Registration fees | 70,570 |
Shareholder report expenses | 63,825 |
Trustees’ fees and expenses | 21,289 |
Other fees and expenses | 11,609 |
Total expenses | 5,880,611 |
| Less: Fee waivers and/or expense reimbursements | |
Fund-level | (286,687) |
Class A | (78,207) |
Administrator Class | (734) |
Net expenses | 5,514,983 |
Net investment loss | (3,521,868) |
| Realized and unrealized gains (losses) on investments | |
Net realized losses on investments | (34,236,670) |
Net change in unrealized gains (losses) on investments | (95,863,238) |
Net realized and unrealized gains (losses) on investments | (130,099,908) |
Net decrease in net assets resulting from operations | $(133,621,776) |
The accompanying notes are an integral part of these financial statements.
Allspring Discovery Innovation Fund | 15
Statement of changes in net assets
| Year ended March 31, 2023 | Year ended March 31, 2022 | |||
| Operations | ||||
Net investment loss | $ (3,521,868) | $ (7,037,826) | ||
Net realized gains (losses) on investments | (34,236,670) | 87,045,702 | ||
Net change in unrealized gains (losses) on investments | (95,863,238) | (66,380,714) | ||
Net increase (decrease) in net assets resulting from operations | (133,621,776) | 13,627,162 | ||
| Distributions to shareholders from | ||||
| Net investment income and net realized gains | ||||
Class A | (77,771,985) | (143,063,634) | ||
Class C | (2,125,424) | (4,200,146) | ||
Administrator Class | (1,410,630) | (2,584,254) | ||
Institutional Class | (6,753,501) | (19,099,092) | ||
Total distributions to shareholders | (88,061,540) | (168,947,126) | ||
| Capital share transactions | Shares | Shares | ||
| Proceeds from shares sold | ||||
Class A | 852,022 | 8,699,357 | 1,025,768 | 18,709,362 |
Class C | 61,306 | 290,149 | 69,766 | 881,654 |
Administrator Class | 83,471 | 914,122 | 109,867 | 2,157,542 |
Institutional Class | 348,109 | 3,826,959 | 807,805 | 15,521,449 |
| 13,730,587 | 37,270,007 | |||
| Reinvestment of distributions | ||||
Class A | 8,944,591 | 74,508,445 | 8,259,821 | 138,104,208 |
Class C | 549,256 | 2,120,127 | 429,463 | 4,200,146 |
Administrator Class | 158,499 | 1,390,039 | 146,691 | 2,550,952 |
Institutional Class | 741,739 | 6,690,485 | 1,064,445 | 18,883,248 |
| 84,709,096 | 163,738,554 | |||
| Payment for shares redeemed | ||||
Class A | (5,446,007) | (54,863,931) | (4,175,414) | (73,339,383) |
Class C | (452,426) | (2,496,526) | (295,041) | (3,224,878) |
Administrator Class | (245,670) | (2,560,384) | (88,403) | (1,634,898) |
Institutional Class | (2,392,279) | (26,303,223) | (2,000,907) | (37,260,346) |
| (86,224,064) | (115,459,505) | |||
Net increase in net assets resulting from capital share transactions | 12,215,619 | 85,549,056 | ||
Total decrease in net assets | (209,467,697) | (69,770,908) | ||
| Net assets | ||||
Beginning of period | 612,968,229 | 682,739,137 | ||
End of period | $ 403,500,532 | $ 612,968,229 | ||
The accompanying notes are an integral part of these financial statements.
16 | Allspring Discovery Innovation Fund
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $14.58 | $18.55 | $12.08 | $13.33 | $14.08 |
Net investment loss | (0.09) 1 | (0.19) 1 | (0.16) | (0.11) | (0.11) |
Net realized and unrealized gains (losses) on investments | (3.21) | 1.04 | 9.44 | (0.01) | 2.06 |
Total from investment operations | (3.30) | 0.85 | 9.28 | (0.12) | 1.95 |
| Distributions to shareholders from | |||||
Net realized gains | (2.32) | (4.82) | (2.81) | (1.13) | (2.70) |
Net asset value, end of period | $8.96 | $14.58 | $18.55 | $12.08 | $13.33 |
Total return2 | (21.42)% | 1.26% | 77.67% | (1.31)% | 16.80% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.34% | 1.34% | 1.35% | 1.39% | 1.40% |
Net expenses | 1.25% | 1.33% | 1.34% | 1.37% | 1.39% |
Net investment loss | (0.81)% | (1.02)% | (0.98)% | (0.80)% | (0.77)% |
| Supplemental data | |||||
Portfolio turnover rate | 117% | 93% | 146% | 149% | 107% |
Net assets, end of period (000s omitted) | $362,754 | $526,555 | $575,422 | $344,949 | $401,990 |
| 1 | Calculated based upon average shares outstanding |
| 2 | Total return calculations do not include any sales charges. |
The accompanying notes are an integral part of these financial statements.
Allspring Discovery Innovation Fund | 17
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $8.51 | $12.64 | $8.80 | $10.09 | $11.38 |
Net investment loss | (0.09) 1 | (0.21) 1 | (0.17) | (0.16) 1 | (0.17) 1 |
Net realized and unrealized gains (losses) on investments | (1.96) | 0.90 | 6.82 | (0.00) 2 | 1.58 |
Total from investment operations | (2.05) | 0.69 | 6.65 | (0.16) | 1.41 |
| Distributions to shareholders from | |||||
Net realized gains | (2.32) | (4.82) | (2.81) | (1.13) | (2.70) |
Net asset value, end of period | $4.14 | $8.51 | $12.64 | $8.80 | $10.09 |
Total return3 | (22.09)% | 0.51% | 76.67% | (2.15)% | 16.01% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 2.08% | 2.09% | 2.10% | 2.14% | 2.15% |
Net expenses | 2.02% | 2.09% | 2.10% | 2.13% | 2.14% |
Net investment loss | (1.57)% | (1.79)% | (1.75)% | (1.57)% | (1.52)% |
| Supplemental data | |||||
Portfolio turnover rate | 117% | 93% | 146% | 149% | 107% |
Net assets, end of period (000s omitted) | $5,441 | $9,822 | $12,017 | $8,035 | $11,615 |
| 1 | Calculated based upon average shares outstanding |
| 2 | Amount is more than $(0.005) |
| 3 | Total return calculations do not include any sales charges. |
The accompanying notes are an integral part of these financial statements.
18 | Allspring Discovery Innovation Fund
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $15.17 | $19.13 | $12.40 | $13.65 | $14.34 |
Net investment loss | (0.08) 1 | (0.18) 1 | (0.16) | (0.10) 1 | (0.09) 1 |
Net realized and unrealized gains (losses) on investments | (3.33) | 1.04 | 9.70 | (0.02) | 2.10 |
Total from investment operations | (3.41) | 0.86 | 9.54 | (0.12) | 2.01 |
| Distributions to shareholders from | |||||
Net realized gains | (2.32) | (4.82) | (2.81) | (1.13) | (2.70) |
Net asset value, end of period | $9.44 | $15.17 | $19.13 | $12.40 | $13.65 |
Total return | (21.30)% | 1.28% | 77.92% | (1.28)% | 17.02% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.26% | 1.27% | 1.27% | 1.31% | 1.32% |
Net expenses | 1.19% | 1.26% | 1.27% | 1.28% | 1.29% |
Net investment loss | (0.74)% | (0.95)% | (0.91)% | (0.71)% | (0.65)% |
| Supplemental data | |||||
Portfolio turnover rate | 117% | 93% | 146% | 149% | 107% |
Net assets, end of period (000s omitted) | $6,305 | $10,192 | $9,636 | $11,873 | $22,480 |
| 1 | Calculated based upon average shares outstanding |
The accompanying notes are an integral part of these financial statements.
Allspring Discovery Innovation Fund | 19
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Institutional Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $15.48 | $19.39 | $12.51 | $13.73 | $14.37 |
Net investment loss | (0.06) 1 | (0.13) | (0.12) | (0.07) | (0.07) |
Net realized and unrealized gains (losses) on investments | (3.39) | 1.04 | 9.81 | (0.02) | 2.13 |
Total from investment operations | (3.45) | 0.91 | 9.69 | (0.09) | 2.06 |
| Distributions to shareholders from | |||||
Net realized gains | (2.32) | (4.82) | (2.81) | (1.13) | (2.70) |
Net asset value, end of period | $9.71 | $15.48 | $19.39 | $12.51 | $13.73 |
Total return | (21.13)% | 1.53% | 78.30% | (1.05)% | 17.25% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.01% | 1.01% | 1.02% | 1.06% | 1.07% |
Net expenses | 0.95% | 1.01% | 1.02% | 1.03% | 1.04% |
Net investment loss | (0.50)% | (0.71)% | (0.66)% | (0.47)% | (0.42)% |
| Supplemental data | |||||
Portfolio turnover rate | 117% | 93% | 146% | 149% | 107% |
Net assets, end of period (000s omitted) | $29,001 | $66,399 | $85,664 | $48,504 | $51,223 |
| 1 | Calculated based upon average shares outstanding |
The accompanying notes are an integral part of these financial statements.
20 | Allspring Discovery Innovation Fund
Notes to financial statements
1. ORGANIZATION
Allspring Funds Trust (the "Trust"), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Allspring Discovery Innovation Fund (formerly, Allspring Specialized Technology Fund) (the "Fund") which is a non-diversified series of the Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Securities valuation
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.
Forward foreign currency contracts are recorded at the forward rate provided by an independent foreign currency pricing source at a time each business day specified by the Valuation Committee established by Allspring Funds Management, LLC ("Allspring Funds Management").
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value. Interests in non-registered investment companies that are redeemable at net asset value are fair valued normally at net asset value.
Investments which are not valued using the methods discussed above are valued at their fair value, as determined in good faith by Allspring Funds Management, which was named the valuation designee by the Board of Trustees. As the valuation designee, Allspring Funds Management is responsible for day-to-day valuation activities for the Allspring Funds. In connection with these responsibilities, Allspring Funds Management has established a Valuation Committee and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities. On a quarterly basis, the Board of Trustees receives reports of valuation actions taken by the Valuation Committee. On at least an annual basis, the Board of Trustees receives an assessment of the adequacy and effectiveness of Allspring Funds Management's process for determining the fair value of the portfolio of investments.
Foreign currency translation
The accounting records of the Fund are maintained in U.S. dollars. The values of other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at rates provided by an independent foreign currency pricing source at a time each business day specified by the Valuation Committee. Purchases and sales of securities, and income and expenses are converted at the rate of exchange on the respective dates of such transactions. Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and liabilities other than investments in securities resulting from changes in exchange rates. The changes in net assets arising from changes in exchange rates of securities and the changes in net assets resulting from changes in market prices of securities are not separately presented. Such changes are included in net realized and unrealized gains or losses from investments.
Securities lending
During the period, the Fund participated in a program to lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. When securities were on loan, the Fund received interest or dividends on those securities. Cash collateral received in connection with its securities lending transactions was invested in Securities Lending Cash Investments, LLC (the "Securities Lending Fund"), an
Allspring Discovery Innovation Fund | 21
Notes to financial statements
affiliated non-registered investment company. Effective at the close of business on March 29, 2023, the Fund is no longer participating in the securities lending program and the Securities Lending Fund was liquidated. Securities Lending Fund was managed by Allspring Funds Management and was subadvised by Allspring Global Investments, LLC ("Allspring Investments"), an affiliate of Allspring Funds Management and wholly owned subsidiary of Allspring Global Investments Holdings, LLC. Allspring Funds Management received an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Securities Lending Fund increased. All of the fees received by Allspring Funds Management were paid to Allspring Investments for its services as subadviser.
Investments in Securities Lending Fund were valued at the evaluated bid price provided by an independent pricing service. Income earned from investment in the Securities Lending Fund (net of fees and rebates), if any, is included in income from affiliated securities on the Statement of Operations.
In a securities lending transaction, the net asset value of the Fund is affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of the instrument in which collateral is invested. The amount of securities lending activity undertaken by the Fund fluctuates from time to time. The Fund has the right under the lending agreement to recover the securities from the borrower on demand. In the event of default or bankruptcy by the borrower, the Fund may be prevented from recovering the loaned securities or gaining access to the collateral or may experience delays or costs in doing so. In such an event, the terms of the agreement allow the unaffiliated securities lending agent to use the collateral to purchase replacement securities on behalf of the Fund or pay the Fund the market value of the loaned securities. The Fund bears the risk of loss with respect to depreciation of its investment of the cash collateral.
Forward foreign currency contracts
A forward foreign currency contract is an agreement between two parties to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund enters into forward foreign currency contracts to facilitate transactions in foreign-denominated securities and to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. Forward foreign currency contracts are recorded at the forward rate and marked-to-market daily. When the contracts are closed, realized gains and losses arising from such transactions are recorded as realized gains or losses on forward foreign currency contracts. The Fund is subject to foreign currency risk and may be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably. The Fund's maximum risk of loss from counterparty credit risk is the unrealized gains on the contracts. This risk may be mitigated if there is a master netting arrangement between the Fund and the counterparty.
Security transactions and income recognition
Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.
Dividend income is recognized on the ex-dividend date. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.
Distributions to shareholders
Distributions to shareholders from net investment income and any net realized gains are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund's fiscal year end. Therefore, a portion of the Fund's distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
Federal and other taxes
The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.
The Fund’s income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. Management has analyzed the Fund's tax positions taken on federal, state, and foreign tax returns, as applicable, for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
22 | Allspring Discovery Innovation Fund
Notes to financial statements
As of March 31, 2023, the aggregate cost of all investments for federal income tax purposes was $337,306,897 and the unrealized gains (losses) consisted of:
| Gross unrealized gains | $ 79,553,240 |
| Gross unrealized losses | (12,649,555) |
| Net unrealized gains | $ 66,903,685 |
Reclassifications are made to the Fund’s capital accounts for permanent tax differences to reflect income and gains available for
distribution (or available capital loss carryforwards) under federal income tax regulations. U.S. generally accepted accounting
principles require that certain components of net assets be adjusted to reflect permanent differences between financial and tax
reporting. These reclassifications have no effect on net assets or net asset values per share. The primary permanent difference
causing such reclassification is due to net operating loss. At March 31, 2023, as a result of permanent book-to-tax differences,
the following reclassification adjustments were made on the Statement of Assets and Liabilities:
distribution (or available capital loss carryforwards) under federal income tax regulations. U.S. generally accepted accounting
principles require that certain components of net assets be adjusted to reflect permanent differences between financial and tax
reporting. These reclassifications have no effect on net assets or net asset values per share. The primary permanent difference
causing such reclassification is due to net operating loss. At March 31, 2023, as a result of permanent book-to-tax differences,
the following reclassification adjustments were made on the Statement of Assets and Liabilities:
| Paid-in capital | Total distributable earnings |
| $(4,036,793) | $4,036,793 |
As of March 31, 2023, the Fund had capital loss carryforwards which consisted of $37,920,845 in short-term capital losses.
The Fund also had a qualified late-year ordinary loss of $769,024 which will be recognized on the first day of the following fiscal year.
The Fund also had a qualified late-year ordinary loss of $769,024 which will be recognized on the first day of the following fiscal year.
Class allocations
The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.
3. FAIR VALUATION MEASUREMENTS
Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
| ■ | Level 1 – quoted prices in active markets for identical securities |
| ■ | Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) |
| ■ | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
Allspring Discovery Innovation Fund | 23
Notes to financial statements
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of March 31, 2023:
| Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
| Assets | ||||
| Investments in: | ||||
| Common stocks | ||||
| Communication services | $ 52,128,463 | $0 | $0 | $ 52,128,463 |
| Consumer discretionary | 43,660,508 | 0 | 0 | 43,660,508 |
| Financials | 64,693,922 | 0 | 0 | 64,693,922 |
| Health care | 48,203,653 | 0 | 0 | 48,203,653 |
| Industrials | 19,428,112 | 0 | 0 | 19,428,112 |
| Information technology | 166,854,021 | 0 | 0 | 166,854,021 |
| Short-term investments | ||||
| Investment companies | 9,241,903 | 0 | 0 | 9,241,903 |
| Total assets | $404,210,582 | $0 | $0 | $404,210,582 |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the year ended March 31, 2023, the Fund did not have any transfers into/out of Level 3.
4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES
Management fee
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Allspring Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Allspring Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:
| Average daily net assets | Management fee |
| First $500 million | 0.800% |
| Next $500 million | 0.750 |
| Next $1 billion | 0.700 |
| Next $2 billion | 0.675 |
| Next $1 billion | 0.650 |
| Next $3 billion | 0.640 |
| Next $2 billion | 0.615 |
| Next $2 billion | 0.605 |
| Next $4 billion | 0.580 |
| Over $16 billion | 0.555 |
Prior to July 15, 2022, the management fee rate was as follows:
24 | Allspring Discovery Innovation Fund
Notes to financial statements
| Average daily net assets | Management fee |
| First $500 million | 0.850% |
| Next $500 million | 0.840 |
| Next $1 billion | 0.815 |
| Next $2 billion | 0.790 |
| Next $1 billion | 0.765 |
| Next $5 billion | 0.755 |
| Over $10 billion | 0.745 |
For the year ended March 31, 2023, the management fee was equivalent to an annual rate of 0.82% of the Fund’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Investments is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.45% and declining to 0.30% as the average daily net assets of the Fund increase. Prior to July 15, 2022, Allianz Global Investors U.S., LLC, which is not an affiliate of Allspring Funds Management, was the subadviser to the Fund and was entitled to receive a fee from Allspring Funds Management at an annual rate which started at 0.57% and declined to 0.50% as the average daily net assets of the Fund increased.
Administration fees
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:
| Class-level administration fee | |
| Class A | 0.21% |
| Class C | 0.21 |
| Administrator Class | 0.13 |
| Institutional Class | 0.13 |
Waivers and/or expense reimbursements
Allspring Funds Management has contractually committed to waive and/or reimburse management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Allspring Funds Management will waive fees and/or reimburse expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Allspring Funds Management has contractually committed through July 31, 2024 to waive fees and/or reimburse expenses to the extent necessary to cap expenses. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. As of March 31, 2023, the contractual expense caps are as follows:
| Expense ratio caps | |
| Class A | 1.23% |
| Class C | 1.98 |
| Administrator Class | 1.15 |
| Institutional Class | 0.90 |
Allspring Discovery Innovation Fund | 25
Notes to financial statements
Prior to July 15, 2022, the Fund's expenses were contractually capped at 1.35% for Class A shares, 2.10% for Class C shares, 1.28% for Administrator Class shares, and 1.03% for Institutional Class shares.
Distribution fee
The Trust has adopted a distribution plan for Class C shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Allspring Funds Distributor, LLC ("Allspring Funds Distributor"), the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.75% of the average daily net assets of Class C shares.
In addition, Allspring Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Allspring Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. Allspring Funds Distributor did not receive any front-end or contingent deferred sales charges from Class A or Class C shares for the year ended March 31, 2023.
Shareholder servicing fees
The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A, Class C and Administrator Class are charged a fee at an annual rate up to 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of the Fund.
Interfund transactions
The Fund may purchase or sell portfolio investment securities to certain affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices.
5. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the year ended March 31, 2023 were $503,937,764 and $558,541,244, respectively.
6. BANK BORROWINGS
The Trust (excluding the money market funds), Allspring Master Trust and Allspring Variable Trust are parties to a $350,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the Fund based on a borrowing rate equal to the higher of the Federal Funds rate or the overnight bank funding rate in effect on that day plus a spread. In addition, an annual commitment fee based on the unused balance is allocated to each participating fund.
For the year ended March 31, 2023, there were no borrowings by the Fund under the agreement.
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid during the years ended March 31, 2023 and March 31, 2022 were as follows:
| Year ended March 31 | ||
| 2023 | 2022 | |
| Ordinary income | $ 0 | $ 59,299,754 |
| Long-term capital gain | 88,061,540 | 109,647,372 |
As of March 31, 2023, the components of distributable earnings on a tax basis were as follows:
| Unrealized gains | Late-year ordinary losses deferred | Capital loss carryforward |
| $66,902,147 | $(769,024) | $(37,920,845) |
8. CONCENTRATION RISKS
The Fund concentrated its portfolio of investments in the information technology sector. A fund that invests a substantial portion of its assets in any sector may be more affected by changes in that sector than would be a fund whose investments are not heavily weighted in any sector.
26 | Allspring Discovery Innovation Fund
Notes to financial statements
9. INDEMNIFICATION
Under the Fund's organizational documents, the officers and Trustees have been granted certain indemnification rights against certain liabilities that may arise out of performance of their duties to the Fund. The Fund has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Fund’s organizational documents into contractual rights that cannot be changed in the future without the consent of the Trustee. Additionally, in the normal course of business, the Fund may enter into contracts with service providers that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.
Allspring Discovery Innovation Fund | 27
Report of independent registered public accounting firm
To the Shareholders of the Fund and Board of Trustees
Allspring Funds Trust:
Allspring Funds Trust:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Allspring Discovery Innovation Fund (formerly, Allspring Specialized Technology Fund) (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of March 31, 2023, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of March 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of March 31, 2023, by correspondence with the custodian and transfer agent. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have not been able to determine the specific year that we began serving as the auditor of one or more Allspring Funds investment companies; however, we are aware that we have served as the auditor of one or more Allspring Funds investment companies since at least 1955.
Boston, Massachusetts
May 25, 2023
28 | Allspring Discovery Innovation Fund
Other information (unaudited)
TAX INFORMATION
Pursuant to Section 852 of the Internal Revenue Code, $88,061,540 was designated as a 20% rate gain distribution for the fiscal year ended March 31, 2023.
PROXY VOTING INFORMATION
A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our website at allspringglobal.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at allspringglobal.com or by visiting the SEC website at sec.gov.
QUARTERLY PORTFOLIO HOLDINGS INFORMATION
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
Allspring Discovery Innovation Fund | 29
Other information (unaudited)
BOARD OF TRUSTEES AND OFFICERS
Each of the Trustees and Officers listed in the table below acts in identical capacities for each fund in the Allspring family of funds, which consists of 127 mutual funds comprising the Allspring Funds Trust, Allspring Variable Trust, Allspring Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information1. The mailing address of each Trustee and Officer is 1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203. Each Trustee and Officer serves an indefinite term, however, each Trustee serves such term until reaching the mandatory retirement age established by the Trustees.
Independent Trustees
| Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
| William R. Ebsworth (Born 1957) | Trustee, since 2015 | Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Foundation (non-profit organization). Mr. Ebsworth is a CFA® charterholder. | N/A |
| Jane A. Freeman (Born 1953) | Trustee, since 2015; Chair Liaison, since 2018 | Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is also an inactive Chartered Financial Analyst. | N/A |
| Isaiah Harris, Jr. (Born 1952) | Trustee, since 2009; Audit Committee Chair, since 2019 | Retired. Member of the Advisory Board of CEF of East Central Florida. Chairman of the Board of CIGNA Corporation from 2009 to 2021, and Director from 2005 to 2008. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Fellowship of Christian Athletes. Mr. Harris is a certified public accountant (inactive status). | N/A |
| David F. Larcker (Born 1950) | Trustee, since 2009 | Distinguished Visiting Fellow at the Hoover Institution since 2022. James Irvin Miller Professor of Accounting at the Graduate School of Business (Emeritus), Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. | N/A |
30 | Allspring Discovery Innovation Fund
Other information (unaudited)
| Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
| Olivia S. Mitchell (Born 1953) | Trustee, since 2006; Nominating and Governance Committee Chair, since 2018 | International Foundation of Employee Benefit Plans Professor since 1993, Wharton School of the University of Pennsylvania. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously taught at Cornell University from 1978 to 1993. | N/A |
| Timothy J. Penny (Born 1951) | Trustee, since 1996; Chair, since 2018 | President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Vice Chair of the Economic Club of Minnesota, since 2007. Co-Chair of the Committee for a Responsible Federal Budget, since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, from 2007-2022. Senior Fellow of the University of Minnesota Humphrey Institute from 1995 to 2017. | N/A |
| James G. Polisson (Born 1959) | Trustee, since 2018 | Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations. | N/A |
| Pamela Wheelock (Born 1959) | Trustee, since January 2020; previously Trustee from January 2018 to July 2019 | Retired. Executive and Senior Financial leadership positions in the public, private and nonprofit sectors. Interim President and CEO, McKnight Foundation, 2020. Interim Commissioner, Minnesota Department of Human Services, 2019. Chief Operating Officer, Twin Cities Habitat for Humanity, 2017-2019. Vice President for University Services, University of Minnesota, 2012-2016. Interim President and CEO, Blue Cross and Blue Shield of Minnesota, 2011-2012. Executive Vice-President and Chief Financial Officer, Minnesota Wild, 2002-2008. Commissioner, Minnesota Department of Finance, 1999-2002. Chair of the Board of Directors of Destination Medical Center Corporation. Board member of the Minnesota Wild Foundation. | N/A |
* Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.
Allspring Discovery Innovation Fund | 31
Other information (unaudited)
Officers2
| Name and year of birth | Position held and length of service | Principal occupations during past five years or longer |
| Andrew Owen (Born 1960) | President, since 2017 | President and Chief Executive Officer of Allspring Funds Management, LLC since 2017 and Head of Global Fund Governance of Allspring Global Investments since 2022. Prior thereto, co-president of Galliard Capital Management, LLC, an affiliate of Allspring Funds Management, LLC, from 2019 to 2022 and Head of Affiliated Managers, Allspring Global Investments, from 2014 to 2019 and Executive Vice President responsible for marketing, investments and product development for Allspring Funds Management, LLC, from 2009 to 2014. |
| Jeremy DePalma (Born 1974) | Treasurer, since 2012 (for certain funds in the Fund Complex); since 2021 (for the remaining funds in the Fund Complex) | Senior Vice President of Allspring Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010. |
| Christopher Baker (Born 1976) | Chief Compliance Officer, since 2022 | Global Chief Compliance Officer for Allspring Global Investments since 2022. Prior thereto, Chief Compliance Officer for State Street Global Advisors from 2018 to 2021. Senior Compliance Officer for the State Street divisions of Alternative Investment Solutions, Sector Solutions, and Global Marketing from 2015 to 2018. From 2010 to 2015 Vice President, Global Head of Investment and Marketing Compliance for State Street Global Advisors. |
| Matthew Prasse (Born 1983) | Chief Legal Officer, since 2022; Secretary, since 2021 | Senior Counsel of the Allspring Legal Department since 2021. Senior Counsel of the Wells Fargo Legal Department from 2018 to 2021. Previously, Counsel for Barings LLC from 2015 to 2018. Prior to joining Barings, Associate at Morgan, Lewis & Bockius LLP from 2008 to 2015. |
1 The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at allspringglobal.com.
2 For those Officers with tenures at Allspring Global Investments and/or Allspring Funds Management, LLC that began prior to 2021, such tenures include years of service during which these businesses/entities were known as Wells Fargo Asset Management and Wells Fargo Funds Management, LLC, respectively.
32 | Allspring Discovery Innovation Fund
For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Fund's website, or call:
Allspring Funds
P.O. Box 219967
Kansas City, MO 64121-9967
P.O. Box 219967
Kansas City, MO 64121-9967
Website: allspringglobal.com
Individual investors: 1-800-222-8222
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-800-260-5969
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call
1-800-222-8222 or visit the Fund's website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
1-800-222-8222 or visit the Fund's website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
Allspring Global InvestmentsTM is the trade name for the asset management firms of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management, LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind - including a recommendation for any specific investment, strategy, or plan.
© 2023 Allspring Global Investments Holdings, LLC. All rights reserved.
ALL-04062023-zm3bosur 05-23
AR1600 03-23
AR1600 03-23
Annual Report
March 31, 2023
Allspring Utility and
Telecommunications Fund
Telecommunications Fund
Contents
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| 11 | |
| Financial statements | |
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| 20 | |
| 25 | |
| 26 |
The views expressed and any forward-looking statements are as of March 31, 2023, unless otherwise noted, and are those of the Fund's portfolio managers and/or Allspring Global Investments. Discussions of individual securities or the markets generally are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Allspring Global Investments disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.
Allspring Utility and Telecommunications Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Utility and Telecommunications Fund for the 12-month period that ended March 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. Earlier tailwinds provided by global stimulus programs, vaccination rollouts, and recovering consumer and corporate sentiment were wiped away by the highest rate of inflation in four decades as well as the impact of ongoing aggressive central bank rate hikes and the prospect of more rate hikes. Compounding these concerns were the global reverberations of the Russia-Ukraine war and the impact of China’s strict COVID-19 lockdowns, which were removed in December.
For the 12-month period, stocks and bonds––both domestic U.S. and global––suffered broad losses. For the period, U.S. stocks, based on the S&P 500 Index,1 returned -7.73%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned -5.07%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a decline of 10.70%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -4.78%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 10.72%, the Bloomberg Municipal Bond Index6 gained 0.26%, and the ICE BofA U.S. High Yield Index7 fell 3.50%.
High inflation and central bank rate hikes rocked markets.
In April 2022, market headwinds created by Russia’s invasion of Ukraine in February continued, with broad and deep losses as both the S&P 500 and MSCI ACWI (Net)8 fell 8% or more for the month and commodity shortages added to global inflation. The Chinese economy struggled through a strict lockdown as the government tried to contain a major COVID-19 outbreak. The ensuing global ripple effect compounded existing supply shortages. Meanwhile, U.S. annual inflation raged at 8.5%, its highest level since 1981, and investors braced themselves for aggressive Federal Reserve (Fed) monetary tightening moves.
Market volatility continued in May, although markets recovered ground late in the month. Value stocks continued to outperform growth stocks. The concerns that had dominated markets for months continued, including high inflation and geopolitical tensions that added to high crude oil, gasoline, and food prices. In response, the Fed raised the federal funds rate by 0.50%. Meanwhile, highly contagious COVID-19 variants persisted. However, labor markets in the U.S., the U.K., and Europe remained strong. U.S. retail sales increased for the fourth consecutive month in April—a sign of consumer resilience.
“ In April 2022, market headwinds created by Russia’s invasion of Ukraine in February continued, with broad and deep losses as both the S&P 500 Index and MSCI All Country World Index fell 8% or more for the month and commodity shortages added to global inflation.”
| 1 | The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock's weight in the index proportionate to its market value. You cannot invest directly in an index. |
| 2 | The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding the U.S. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. You cannot invest directly in an index. |
| 3 | The MSCI Emerging Markets (EM) Index (Net) (USD) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index. |
| 4 | The Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S.-dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index. |
| 5 | The Bloomberg Global Aggregate ex-USD Index (unhedged) is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S.-dollar-denominated debt market. You cannot invest directly in an index. |
| 6 | The Bloomberg Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index. |
| 7 | The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2023. ICE Data Indices, LLC. All rights reserved. |
| 8 | The MSCI ACWI (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets. You cannot invest directly in an index. |
2 | Allspring Utility and Telecommunications Fund
Letter to shareholders (unaudited)
In June, stocks posted further losses en route to their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were the familiar factors: rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Fed raised its short-term rate by another 0.75% in June. Meanwhile, the U.S. unemployment rate held firm at 3.6% and the housing market remained only marginally affected by sharply higher mortgage rates.
Markets rebounded in July, led by U.S. stocks. While U.S. economic activity showed signs of waning, the country’s labor market remained surprisingly strong: July nonfarm payrolls grew by more than 500,000 and U.S. unemployment dipped to 3.5%. Meanwhile, crude oil and retail gasoline prices, major contributors to recent overall inflation, fell substantially from earlier highs. And while U.S. home prices rose, home sales fell as houses became less affordable with mortgage rates at a 13-year high. The Fed raised the federal funds rate another 0.75% in July—to a range of 2.25% to 2.50%—and forecasts pointed to further rate hikes.
August was yet another broadly challenging month for financial markets, with more red ink flowing. High inflation persisted, cresting 9% in the eurozone on an annual basis and remaining above 8% in the U.S. despite the Fed’s aggressive monetary policy and a major drop in global crude oil and gasoline prices from their June peak. One positive note was the resilient U.S. job market. However, the Fed’s job was clearly not complete. One longer-term bright spot was the U.S. Congress’s passage of the Inflation Reduction Act. Its primary stated goals include: to reduce inflation (though not immediately) by curbing the deficit, capping health care spending by seniors, and investing in domestic sources of clean energy.
The market misery continued in September as all asset classes suffered major losses. Central banks kept up their battle against rapidly rising prices with more rate hikes. The strength of the U.S. dollar weighed on results for investors holding non-U.S.-dollar assets. U.S. mortgage rates jumped to near 7% on 30-year fixed-rate mortgages; the decreased housing affordability began to cool demand somewhat. The U.K. experienced a sharp sell-off of government bonds and the British pound in September as investors panicked in response to a new government budget that was seen as financially unsound. The Bank of England (BoE) then stepped in and bought long-dated government bonds.
Equities had a reprieve in October. Value stocks and small caps fared best. Globally, developed markets outpaced emerging market equities, which were hurt by weakness among Chinese stocks. Central banks continued to try to curtail high inflation with aggressive interest rate hikes. Geopolitical risks persisted, including the ongoing Russia-Ukraine war and economic, financial market, and political turmoil in the U.K. Concerns over Europe’s energy crisis eased thanks to unseasonably warm weather and plentiful gas on hand. The U.S. labor market continued its resilience against rising prices as unemployment remained near a record low.
Stocks and bonds rallied in November. Economic news was encouraging, driven by U.S. labor market strength. Although central banks kept raising rates, hopes rose for an easing in the pace of rate hikes and a possible end to central bank monetary tightening in 2023. Although inflation remained at record highs in the eurozone, we began to see signs of a possible decline in inflationary pressures as U.S. inflation moderated, with a 7.1% annual price rise in November and a monthly price increase of just 0.1%. China’s economic data remained weak, reflecting its zero-COVID-19 policy.
Financial markets cooled in December, with U.S. equities posting negative overall results in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever with flat overall monthly returns as markets weighed the hopes for an end to the monetary tightening cycle with the reality that central banks had not completed their jobs yet. U.S. Consumer Price Index (CPI)1 data showed a strong consistent trend downward, which brought down the 12-month CPI to 6.5% in December from 9.1% in June. Other countries and regions reported still-high but declining inflation rates as the year winded down.
“ In June, stocks posted further losses en route to their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were the familiar factors: rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation.”
| 1 | The U.S. Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. You cannot invest directly in an index. |
Allspring Utility and Telecommunications Fund | 3
Letter to shareholders (unaudited)
The year 2023 began with a rally across global equities and fixed income securities. Investor optimism rose in response to data indicating declining inflation rates and the reopening of China’s economy with the abrupt end to its zero-COVID-19 policy. The U.S. reported surprisingly strong job gains––employers added more than 500,000 jobs––and unemployment fell to 3.4%, the lowest level since 1969. Meanwhile, wage growth, seen as a potential contributor to ongoing high inflation, continued to moderate. All eyes remained fixed on the Fed and on how many more rate hikes remain in this tightening cycle. The 0.25% federal funds rate hike announced in January was the Fed’s smallest rate increase since March 2022.
Financial markets declined in February as investors responded unfavorably to resilient economic data. The takeaway: Central banks will likely continue their monetary tightening cycle for longer than markets had priced in. In this environment—where strong economic data is seen as bad news—the resilient U.S. labor market was seen as a negative while the inflation rate has not been falling quickly enough for the Fed, which raised interest rates by 0.25% in early February. Meanwhile, the BoE and the European Central Bank both raised rates by 0.50%.
The collapse of Silicon Valley Bank in March, the second-largest banking failure in U.S. history, led to a classic bank run that spread to Europe, where Switzerland’s Credit Suisse was taken over by its rival, UBS. The sudden banking industry uncertainty led some clients of regional banks to transfer deposits to a handful of U.S. banking giants while bank shareholders sold stock. The banking industry turmoil could make the job of central banks more challenging as they weigh inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. The U.S. labor market remained resilient. The euro-area composite Purchasing Managers’ Index1 rose to 53.70, indicating expansion, for March. And China’s economy continued to rebound after the removal of its COVID-19 lockdown. Inflation rates in the U.S., the U.K., and Europe all remained higher than central bank targets, leading to additional rate hikes in March.
Don’t let short-term uncertainty derail long-term investment goals.
Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Allspring Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.
Thank you for choosing to invest with Allspring Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.
Sincerely,
Andrew Owen
President
Allspring Funds
President
Allspring Funds
For further information about your fund, contact your investment professional, visit our website at allspringglobal.com, or call us directly at 1-800-222-8222.
| 1 | The Purchasing Managers' Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. You cannot invest directly in an index. |
4 | Allspring Utility and Telecommunications Fund
Performance highlights (unaudited)
| Investment objective | The Fund seeks total return, consisting of current income and capital appreciation. |
| Manager | Allspring Funds Management, LLC |
| Subadviser | Allspring Global Investments, LLC |
| Portfolio managers | Kent Newcomb, CFA, Jack Spudich, CFA |
| Average annual total returns (%) as of March 31, 2023 | |||||||||||
| Including sales charge | Excluding sales charge | Expense ratios1 (%) | |||||||||
| Inception date | 1 year | 5 year | 10 year | 1 year | 5 year | 10 year | Gross | Net 2 | |||
| Class A (EVUAX) | 1-4-1994 | -13.43 | 7.36 | 7.26 | -8.15 | 8.64 | 7.89 | 1.16 | 1.05 | ||
| Class C (EVUCX) | 9-2-1994 | -9.83 | 7.82 | 7.25 | -8.83 | 7.82 | 7.25 | 1.91 | 1.80 | ||
| Administrator Class (EVUDX) | 7-30-2010 | – | – | – | -8.01 | 8.80 | 8.08 | 1.08 | 0.92 | ||
| Institutional Class (EVUYX) | 2-28-1994 | – | – | – | -7.80 | 9.01 | 8.25 | 0.83 | 0.72 | ||
| S&P 500 Utilities Index3 | – | – | – | – | -6.21 | 9.59 | 9.37 | – | – | ||
| S&P 500 Index4 | – | – | – | – | -7.73 | 11.19 | 12.24 | – | – | ||
Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on an investment in a fund. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, allspringglobal.com.
While the S&P 500 Index is comprised of U.S. equity securities of companies diversified across ten sectors, the Fund’s holdings are concentrated primarily in utilities and telecommunication services stocks. Therefore, the performance of the S&P 500 Index is displayed only to show how the concentrated Fund performed compared with a diversified selection of U.S. equity securities.
Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.
For Class A shares, the maximum front-end sales charge is 5.75%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Administrator Class and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.
| 1 | Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report. |
| 2 | The manager has contractually committed through July 31, 2023, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 1.05% for Class A, 1.80% for Class C, 0.92% for Administrator Class, and 0.72% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense caps. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. Without these caps, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses. |
| 3 | The S&P 500 Utilities Index is a market-value-weighted index that measures the performance of all stocks within the utilities sector of the S&P 500 Index. You cannot invest directly in an index. |
| 4 | The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index with each stock’s weight in the index proportionate to its market value. You cannot invest directly in an index. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
6 | Allspring Utility and Telecommunications Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of March 31, 20231
| 1 | The chart compares the performance of Class A shares for the most recent ten years with the S&P 500 Utilities Index and S&P 500 Index. The chart assumes a hypothetical investment of $10,000 in Class A shares and reflects all operating expenses and assumes the maximum initial sales charge of 5.75%. |
Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. The use of derivatives may reduce returns and/or increase volatility. Funds that concentrate their investments in limited sectors, such as utilities and telecommunication services, are more vulnerable to adverse market, economic, regulatory, political, or other developments affecting those sectors. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This fund is exposed to convertible securities risk, foreign investment risk, high-yield securities risk, smaller-company securities risk, and non-diversification risk. Consult the Fund’s prospectus for additional information on these and other risks.
Allspring Utility and Telecommunications Fund | 7
Performance highlights (unaudited)
MANAGER'S DISCUSSION
Fund highlights
| ■ | The Fund underperformed its benchmark, the S&P 500 Utilities Index, for the 12-month period that ended March 31, 2023. |
| ■ | The Fund’s utilities holdings underperformed the benchmark. |
| ■ | Holdings outside of utilities performed roughly in line with the benchmark. |
Utilities slightly outperformed the broader market.
Using the S&P 500 Index as a proxy, U.S. equity markets returned -7.73% for the 12-month period that ended March 31, 2023. Utilities slightly outperformed the broader market, declining 6.21%. Utilities declined substantially less than the broader market during the first nine months of the period. Often considered safe havens in uncertain times, we believe that for much of 2022, their stability and predictability attracted investors concerned about a possible recession, market volatility, and global geopolitical uncertainty. Through the first three months of 2023, though, utilities broadly underperformed, particularly in January, as riskier stocks rebounded on signs of slowing inflation, declining long-term interest rates, and the perception of improving prospects for an economic soft landing.
Portfolio changes were modest.
The Fund added a new non-utility holding, sold one utility holding, and adjusted other position sizes. We added Target Corp. and divested ONE Gas, Inc. We reduced weightings for several holdings based on our evaluation of their risks relative to potential returns and increased weightings in a couple of high-conviction holdings that, in our opinion, have prospects for solid dividend growth and traded at attractive valuations.
| Ten largest holdings (%) as of March 31, 20231 | |
| NextEra Energy Incorporated | 12.30 |
| Sempra Energy | 4.50 |
| American Tower Corporation | 4.44 |
| American Electric Power Company Incorporated | 4.35 |
| Duke Energy Corporation | 4.20 |
| The Southern Company | 4.15 |
| Cisco Systems Incorporated | 3.91 |
| Exelon Corporation | 3.85 |
| Xcel Energy Incorporated | 3.79 |
| Comcast Corporation Class A | 3.41 |
| 1 | Figures represent the percentage of the Fund's net assets. Holdings are subject to change and may have changed since the date specified. |
Detractors from performance included not owning several strong performers.
Among utilities, the largest detractor was the decision to not own several benchmark names that outperformed. These stocks operate in regulatory jurisdictions that we believe make it difficult to earn adequate returns. Detractors among the Fund’s non-utility holdings included telecom-related Comcast Corp., American Tower Corp., and Verizon Communications Inc. The Fund’s mandate includes investment in telecommunications companies, a weak area of the market for the past 12 months. The allocation to other sectors and industries partially offset telecommunications weakness.
| Sector allocation as of March 31, 20231 |
| 1 | Figures represent the percentage of the Fund's long-term investments. Allocations are subject to change and may have changed since the date specified. |
Contributors to performance included utilities and non-utility stocks.
The largest contributors to performance were the underweight positions in a couple of utilities that underperformed and positions in several non-utility stocks that outperformed the benchmark.
Underweight positions relative to their weights in the benchmark in Duke Energy Corp. and Dominion Energy, Inc., contributed to relative performance. The Fund also benefited from several holdings outside the utilities sector, including Amgen Inc.; Mastercard Inc.; Cisco Systems, Inc.; and Visa Inc. These stocks all outperformed the benchmark in the period.
8 | Allspring Utility and Telecommunications Fund
Performance highlights (unaudited)
Our outlook for utilities remains constructive.
Relative to the S&P 500 Index, utilities stocks currently trade at a moderate discount to their long-term average, based on estimated price/earnings ratios. Fundamentally, we continue to see a clear path for moderate yet consistent growth in utility earnings and dividends. This, combined with estimated dividend yields for the sector that exceed the broader market by approximately 1.50%, could provide investors with solid total return potential and below-average volatility. Many utilities appear to have abundant opportunities to invest in their core businesses at returns we view as attractive. The regulatory environment appears favorable for long-term utility capital spending plans to modernize the electrical grid and replace coal with natural gas and renewable forms of energy. The transition to renewables could also improve the sector’s environmental characteristics, as utilities clean up
their generation fleets. Challenges to the sector include inflation and higher interest rates, or a greater risk appetite by equity investors, which could lead to utilities underperforming the overall market. One way we mitigate that risk is by owning stocks in sectors other than utilities and telecom that have the potential for faster growth.
We have a generally mixed outlook for telecommunications companies, with the legacy local-exchange telephone business in secular decline, cable TV under pressure, and wireless steady but approaching saturation. However, internet service and emerging opportunities in 5G technology likely provide avenues for long-term growth for select companies. We believe that maintaining an allocation to telecommunications and other non-utility stocks that offer what we expect to be solid, above-average dividend growth can benefit both overall portfolio dividend growth and total return.
Allspring Utility and Telecommunications Fund | 9
Fund expenses (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period from October 1, 2022 to March 31, 2023.
Actual expenses
The “Actual” line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Actual” line under the heading entitled “Expenses paid during period” for your applicable class of shares to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The “Hypothetical” line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) and contingent deferred sales charges. Therefore, the “Hypothetical” line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning account value 10-1-2022 | Ending account value 3-31-2023 | Expenses paid during the period1 | Annualized net expense ratio | |
| Class A | ||||
| Actual | $1,000.00 | $1,056.47 | $5.38 | 1.05% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.70 | $5.29 | 1.05% |
| Class C | ||||
| Actual | $1,000.00 | $1,051.96 | $9.21 | 1.80% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,015.96 | $9.05 | 1.80% |
| Administrator Class | ||||
| Actual | $1,000.00 | $1,056.99 | $4.72 | 0.92% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.34 | $4.63 | 0.92% |
| Institutional Class | ||||
| Actual | $1,000.00 | $1,058.25 | $3.69 | 0.72% |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,021.34 | $3.63 | 0.72% |
1 Expenses paid is equal to the annualized net expense ratio of each class multiplied by the average account value over the period, multiplied by 182 divided by 365 (to reflect the one-half-year period).
10 | Allspring Utility and Telecommunications Fund
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Common stocks: 98.70% | |||||
| Communication services: 6.09% | |||||
| Diversified telecommunication services: 2.68% | |||||
| Verizon Communications Incorporated | 274,564 | $ 10,677,794 | |||
| Media: 3.41% | |||||
| Comcast Corporation Class A | 357,700 | 13,560,407 | |||
| Consumer discretionary: 1.36% | |||||
| Specialty retail: 1.36% | |||||
| The Home Depot Incorporated | 18,381 | 5,424,601 | |||
| Consumer staples: 0.92% | |||||
| Consumer staples distribution & retail: 0.92% | |||||
| Target Corporation | 22,069 | 3,655,288 | |||
| Financials: 5.05% | |||||
| Banks: 1.30% | |||||
| JPMorgan Chase & Company | 39,772 | 5,182,689 | |||
| Financial services: 3.75% | |||||
| MasterCard Incorporated Class A | 20,588 | 7,481,885 | |||
| Visa Incorporated Class A | 32,898 | 7,417,183 | |||
| 14,899,068 | |||||
| Health care: 2.72% | |||||
| Biotechnology: 1.42% | |||||
| Amgen Incorporated | 23,353 | 5,645,588 | |||
| Health care providers & services: 1.30% | |||||
| UnitedHealth Group Incorporated | 10,974 | 5,186,203 | |||
| Information technology: 3.91% | |||||
| Communications equipment: 3.91% | |||||
| Cisco Systems Incorporated | 297,717 | 15,563,156 | |||
| Real estate: 4.44% | |||||
| Specialized REITs: 4.44% | |||||
| American Tower Corporation | 86,348 | 17,644,350 | |||
| Utilities: 74.21% | |||||
| Electric utilities: 43.88% | |||||
| Alliant Energy Corporation | 137,556 | 7,345,489 | |||
| American Electric Power Company Incorporated | 190,274 | 17,313,031 | |||
| Constellation Energy Corporation | 98,341 | 7,719,769 | |||
| Duke Energy Corporation | 173,169 | 16,705,613 | |||
| Entergy Corporation | 77,022 | 8,298,350 | |||
| Evergy Incorporated | 103,291 | 6,313,146 | |||
| Eversource Energy | 86,901 | 6,800,872 | |||
| Exelon Corporation | 366,037 | 15,333,290 | |||
| FirstEnergy Corporation | 205,868 | 8,247,072 | |||
| NextEra Energy Incorporated | 635,221 | 48,962,835 |
The accompanying notes are an integral part of these financial statements.
Allspring Utility and Telecommunications Fund | 11
Portfolio of investments—March 31, 2023
| Shares | Value | ||||
| Electric utilities (continued) | |||||
| The Southern Company | 237,076 | $ 16,495,748 | |||
| Xcel Energy Incorporated | 223,699 | 15,086,261 | |||
| 174,621,476 | |||||
| Gas utilities: 2.75% | |||||
| Atmos Energy Corporation | 97,312 | 10,933,976 | |||
| Multi-utilities: 25.30% | |||||
| Ameren Corporation | 133,679 | 11,548,529 | |||
| CenterPoint Energy Incorporated | 361,174 | 10,640,186 | |||
| CMS Energy Corporation | 208,002 | 12,767,163 | |||
| Dominion Energy Incorporated | 211,988 | 11,852,249 | |||
| DTE Energy Company | 121,890 | 13,351,831 | |||
| Public Service Enterprise Group Incorporated | 158,388 | 9,891,331 | |||
| Sempra Energy | 118,368 | 17,892,507 | |||
| WEC Energy Group Incorporated | 134,050 | 12,706,600 | |||
| 100,650,396 | |||||
| Water utilities: 2.28% | |||||
| American Water Works Company Incorporated | 61,932 | 9,072,419 | |||
| Total Common stocks (Cost $267,895,383) | 392,717,411 |
| Yield | |||||
| Short-term investments: 1.00% | |||||
| Investment companies: 1.00% | |||||
| Allspring Government Money Market Fund Select Class ♠∞ | 4.69% | 3,987,005 | 3,987,005 | ||
| Total Short-term investments (Cost $3,987,005) | 3,987,005 | ||||
| Total investments in securities (Cost $271,882,388) | 99.70% | 396,704,416 | |||
| Other assets and liabilities, net | 0.30 | 1,207,389 | |||
| Total net assets | 100.00% | $397,911,805 |
| ♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
| ∞ | The rate represents the 7-day annualized yield at period end. |
| Abbreviations: | |
| REIT | Real estate investment trust |
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
| Value, beginning of period | Purchases | Sales proceeds | Net realized gains (losses) | Net change in unrealized gains (losses) | Value, end of period | Shares, end of period | Income from affiliated securities | |
| Short-term investments | ||||||||
| Allspring Government Money Market Fund Select Class | $2,507,848 | $47,123,976 | $(45,644,819) | $0 | $0 | $3,987,005 | 3,987,005 | $131,471 |
The accompanying notes are an integral part of these financial statements.
12 | Allspring Utility and Telecommunications Fund
Statement of assets and liabilities—March 31, 2023
| Assets | |
Investments in unaffiliated securities, at value (cost $267,895,383) | $ 392,717,411 |
Investments in affiliated securities, at value (cost $3,987,005) | 3,987,005 |
Receivable for investments sold | 5,142,508 |
Receivable for dividends | 377,915 |
Receivable for Fund shares sold | 66,730 |
Prepaid expenses and other assets | 39,926 |
Total assets | 402,331,495 |
| Liabilities | |
Payable for investments purchased | 3,950,321 |
Management fee payable | 171,842 |
Payable for Fund shares redeemed | 77,759 |
Administration fees payable | 68,552 |
Distribution fee payable | 2,718 |
Trustees’ fees and expenses payable | 1,764 |
Accrued expenses and other liabilities | 146,734 |
Total liabilities | 4,419,690 |
Total net assets | $397,911,805 |
| Net assets consist of | |
Paid-in capital | $ 268,981,375 |
Total distributable earnings | 128,930,430 |
Total net assets | $397,911,805 |
| Computation of net asset value and offering price per share | |
Net assets – Class A | $ 321,506,981 |
Shares outstanding – Class A1 | 18,092,539 |
Net asset value per share – Class A | $17.77 |
Maximum offering price per share – Class A2 | $18.85 |
Net assets – Class C | $ 4,182,964 |
Shares outstanding – Class C1 | 233,944 |
Net asset value per share – Class C | $17.88 |
Net assets – Administrator Class | $ 6,267,099 |
Shares outstanding – Administrator Class1 | 351,979 |
Net asset value per share – Administrator Class | $17.81 |
Net assets – Institutional Class | $ 65,954,761 |
Shares outstanding – Institutional Class1 | 3,714,138 |
Net asset value per share – Institutional Class | $17.76 |
| 1 | The Fund has an unlimited number of authorized shares. |
| 2 | Maximum offering price is computed as 100/94.25 of net asset value. On investments of $50,000 or more, the offering price is reduced. |
The accompanying notes are an integral part of these financial statements.
Allspring Utility and Telecommunications Fund | 13
Statement of operations—year ended March 31, 2023
| Investment income | |
Dividends | $ 11,845,726 |
Income from affiliated securities | 131,471 |
Total investment income | 11,977,197 |
| Expenses | |
Management fee | 2,846,346 |
| Administration fees | |
Class A | 732,891 |
Class C | 10,326 |
Administrator Class | 9,614 |
Institutional Class | 99,568 |
| Shareholder servicing fees | |
Class A | 872,346 |
Class C | 12,284 |
Administrator Class | 18,489 |
| Distribution fee | |
Class C | 36,466 |
Custody and accounting fees | 20,896 |
Professional fees | 53,135 |
Registration fees | 67,345 |
Shareholder report expenses | 18,194 |
Trustees’ fees and expenses | 20,204 |
Other fees and expenses | 10,382 |
Total expenses | 4,828,486 |
| Less: Fee waivers and/or expense reimbursements | |
Fund-level | (413,573) |
Class A | (59,952) |
Administrator Class | (4,327) |
Institutional Class | (6,676) |
Net expenses | 4,343,958 |
Net investment income | 7,633,239 |
| Realized and unrealized gains (losses) on investments | |
Net realized gains on investments | 5,466,729 |
Net change in unrealized gains (losses) on investments | (51,532,523) |
Net realized and unrealized gains (losses) on investments | (46,065,794) |
Net decrease in net assets resulting from operations | $(38,432,555) |
The accompanying notes are an integral part of these financial statements.
14 | Allspring Utility and Telecommunications Fund
Statement of changes in net assets
| Year ended March 31, 2023 | Year ended March 31, 2022 | |||
| Operations | ||||
Net investment income | $ 7,633,239 | $ 7,075,173 | ||
Net realized gains on investments | 5,466,729 | 34,747,201 | ||
Net change in unrealized gains (losses) on investments | (51,532,523) | 16,262,033 | ||
Net increase (decrease) in net assets resulting from operations | (38,432,555) | 58,084,407 | ||
| Distributions to shareholders from | ||||
| Net investment income and net realized gains | ||||
Class A | (34,647,628) | (44,877,027) | ||
Class C | (452,433) | (572,530) | ||
Administrator Class | (746,991) | (791,404) | ||
Institutional Class | (7,988,969) | (9,166,657) | ||
Total distributions to shareholders | (43,836,021) | (55,407,618) | ||
| Capital share transactions | Shares | Shares | ||
| Proceeds from shares sold | ||||
Class A | 567,314 | 11,393,388 | 1,015,898 | 22,075,851 |
Class C | 96,311 | 1,962,630 | 37,936 | 829,370 |
Administrator Class | 110,693 | 2,290,942 | 247,879 | 5,407,252 |
Institutional Class | 1,031,081 | 20,941,432 | 1,249,622 | 26,754,319 |
| 36,588,392 | 55,066,792 | |||
| Reinvestment of distributions | ||||
Class A | 1,772,009 | 32,801,515 | 2,096,156 | 42,565,818 |
Class C | 24,186 | 449,470 | 27,825 | 565,194 |
Administrator Class | 40,151 | 745,417 | 38,712 | 787,414 |
Institutional Class | 429,815 | 7,960,567 | 448,365 | 9,114,183 |
| 41,956,969 | 53,032,609 | |||
| Payment for shares redeemed | ||||
Class A | (1,902,224) | (36,626,328) | (2,391,654) | (51,265,683) |
Class C | (97,108) | (1,868,400) | (150,982) | (3,277,302) |
Administrator Class | (144,989) | (2,765,351) | (82,475) | (1,755,120) |
Institutional Class | (1,436,434) | (27,459,910) | (1,067,904) | (22,740,013) |
| (68,719,989) | (79,038,118) | |||
Net increase in net assets resulting from capital share transactions | 9,825,372 | 29,061,283 | ||
Total increase (decrease) in net assets | (72,443,204) | 31,738,072 | ||
| Net assets | ||||
Beginning of period | 470,355,009 | 438,616,937 | ||
End of period | $397,911,805 | $470,355,009 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Utility and Telecommunications Fund | 15
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $21.48 | $21.47 | $20.19 | $24.03 | $20.46 |
Net investment income | 0.33 | 0.33 | 0.34 | 0.34 | 0.32 |
Net realized and unrealized gains (losses) on investments | (2.03) | 2.40 | 3.82 | 0.02 | 3.65 |
Total from investment operations | (1.70) | 2.73 | 4.16 | 0.36 | 3.97 |
| Distributions to shareholders from | |||||
Net investment income | (0.33) | (0.32) | (0.35) | (0.34) | (0.34) |
Net realized gains | (1.68) | (2.40) | (2.53) | (3.86) | (0.06) |
Total distributions to shareholders | (2.01) | (2.72) | (2.88) | (4.20) | (0.40) |
Net asset value, end of period | $17.77 | $21.48 | $21.47 | $20.19 | $24.03 |
Total return1 | (8.15)% | 13.62% | 21.23% | 0.04% | 19.59% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.15% | 1.16% | 1.17% | 1.17% | 1.19% |
Net expenses | 1.04% | 1.04% | 1.04% | 1.09% | 1.14% |
Net investment income | 1.69% | 1.52% | 1.58% | 1.42% | 1.47% |
| Supplemental data | |||||
Portfolio turnover rate | 4% | 11% | 20% | 49% | 10% |
Net assets, end of period (000s omitted) | $321,507 | $379,164 | $363,540 | $319,200 | $337,848 |
| 1 | Total return calculations do not include any sales charges. |
The accompanying notes are an integral part of these financial statements.
16 | Allspring Utility and Telecommunications Fund
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $21.60 | $21.57 | $20.25 | $24.06 | $20.47 |
Net investment income | 0.19 1 | 0.17 1 | 0.17 1 | 0.16 1 | 0.16 1 |
Net realized and unrealized gains (losses) on investments | (2.05) | 2.40 | 3.85 | 0.01 | 3.63 |
Total from investment operations | (1.86) | 2.57 | 4.02 | 0.17 | 3.79 |
| Distributions to shareholders from | |||||
Net investment income | (0.18) | (0.14) | (0.17) | (0.12) | (0.14) |
Net realized gains | (1.68) | (2.40) | (2.53) | (3.86) | (0.06) |
Total distributions to shareholders | (1.86) | (2.54) | (2.70) | (3.98) | (0.20) |
Net asset value, end of period | $17.88 | $21.60 | $21.57 | $20.25 | $24.06 |
Total return2 | (8.83)% | 12.75% | 20.34% | (0.73)% | 18.65% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.89% | 1.90% | 1.91% | 1.92% | 1.94% |
Net expenses | 1.80% | 1.80% | 1.80% | 1.86% | 1.89% |
Net investment income | 0.94% | 0.77% | 0.80% | 0.63% | 0.74% |
| Supplemental data | |||||
Portfolio turnover rate | 4% | 11% | 20% | 49% | 10% |
Net assets, end of period (000s omitted) | $4,183 | $4,548 | $6,379 | $10,274 | $19,618 |
| 1 | Calculated based upon average shares outstanding |
| 2 | Total return calculations do not include any sales charges. |
The accompanying notes are an integral part of these financial statements.
Allspring Utility and Telecommunications Fund | 17
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $21.52 | $21.51 | $20.22 | $24.05 | $20.48 |
Net investment income | 0.35 | 0.37 | 0.37 | 0.36 | 0.36 |
Net realized and unrealized gains (losses) on investments | (2.03) | 2.39 | 3.83 | 0.04 | 3.65 |
Total from investment operations | (1.68) | 2.76 | 4.20 | 0.40 | 4.01 |
| Distributions to shareholders from | |||||
Net investment income | (0.35) | (0.35) | (0.38) | (0.37) | (0.38) |
Net realized gains | (1.68) | (2.40) | (2.53) | (3.86) | (0.06) |
Total distributions to shareholders | (2.03) | (2.75) | (2.91) | (4.23) | (0.44) |
Net asset value, end of period | $17.81 | $21.52 | $21.51 | $20.22 | $24.05 |
Total return | (8.01)% | 13.76% | 21.39% | 0.20% | 19.80% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 1.07% | 1.08% | 1.09% | 1.09% | 1.11% |
Net expenses | 0.92% | 0.92% | 0.92% | 0.94% | 0.95% |
Net investment income | 1.82% | 1.63% | 1.70% | 1.49% | 1.66% |
| Supplemental data | |||||
Portfolio turnover rate | 4% | 11% | 20% | 49% | 10% |
Net assets, end of period (000s omitted) | $6,267 | $7,447 | $3,054 | $2,449 | $5,296 |
The accompanying notes are an integral part of these financial statements.
18 | Allspring Utility and Telecommunications Fund
Financial highlights
(For a share outstanding throughout each period)
| Year ended March 31 | |||||
| Institutional Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $21.46 | $21.46 | $20.18 | $24.01 | $20.45 |
Net investment income | 0.39 | 0.40 | 0.43 | 0.44 | 0.41 |
Net realized and unrealized gains (losses) on investments | (2.02) | 2.39 | 3.80 | 0.01 | 3.62 |
Total from investment operations | (1.63) | 2.79 | 4.23 | 0.45 | 4.03 |
| Distributions to shareholders from | |||||
Net investment income | (0.39) | (0.39) | (0.42) | (0.42) | (0.41) |
Net realized gains | (1.68) | (2.40) | (2.53) | (3.86) | (0.06) |
Total distributions to shareholders | (2.07) | (2.79) | (2.95) | (4.28) | (0.47) |
Net asset value, end of period | $17.76 | $21.46 | $21.46 | $20.18 | $24.01 |
Total return | (7.80)% | 13.94% | 21.62% | 0.42% | 20.03% |
| Ratios to average net assets (annualized) | |||||
Gross expenses | 0.82% | 0.83% | 0.84% | 0.84% | 0.86% |
Net expenses | 0.72% | 0.72% | 0.72% | 0.75% | 0.78% |
Net investment income | 2.02% | 1.84% | 1.92% | 1.76% | 1.83% |
| Supplemental data | |||||
Portfolio turnover rate | 4% | 11% | 20% | 49% | 10% |
Net assets, end of period (000s omitted) | $65,955 | $79,196 | $65,644 | $45,888 | $42,427 |
The accompanying notes are an integral part of these financial statements.
Allspring Utility and Telecommunications Fund | 19
Notes to financial statements
1. ORGANIZATION
Allspring Funds Trust (the "Trust"), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Allspring Utility and Telecommunications Fund (the "Fund") which is a non-diversified series of the Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Securities valuation
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value.
Investments which are not valued using the methods discussed above are valued at their fair value, as determined in good faith by Allspring Funds Management, LLC ("Allspring Funds Management"), which was named the valuation designee by the Board of Trustees. As the valuation designee, Allspring Funds Management is responsible for day-to-day valuation activities for the Allspring Funds. In connection with these responsibilities, Allspring Funds Management has established a Valuation Committee and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities. On a quarterly basis, the Board of Trustees receives reports of valuation actions taken by the Valuation Committee. On at least an annual basis, the Board of Trustees receives an assessment of the adequacy and effectiveness of Allspring Funds Management's process for determining the fair value of the portfolio of investments.
Security transactions and income recognition
Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.
Dividend income is recognized on the ex-dividend date.
Distributions to shareholders
Distributions to shareholders are recorded on the ex-dividend date and paid from net investment income quarterly and any net realized gains are paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund's fiscal year end. Therefore, a portion of the Fund's distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
Federal and other taxes
The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.
The Fund’s income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. Management has analyzed the Fund's tax positions taken on federal, state, and foreign tax returns, as applicable, for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
20 | Allspring Utility and Telecommunications Fund
Notes to financial statements
As of March 31, 2023, the aggregate cost of all investments for federal income tax purposes was $271,905,122 and the unrealized gains (losses) consisted of:
| Gross unrealized gains | $130,601,737 |
| Gross unrealized losses | (5,802,443) |
| Net unrealized gains | $124,799,294 |
Class allocations
The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.
3. FAIR VALUATION MEASUREMENTS
Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
| ■ | Level 1 – quoted prices in active markets for identical securities |
| ■ | Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) |
| ■ | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of March 31, 2023:
| Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
| Assets | ||||
| Investments in: | ||||
| Common stocks | ||||
| Communication services | $ 24,238,201 | $0 | $0 | $ 24,238,201 |
| Consumer discretionary | 5,424,601 | 0 | 0 | 5,424,601 |
| Consumer staples | 3,655,288 | 0 | 0 | 3,655,288 |
| Financials | 20,081,757 | 0 | 0 | 20,081,757 |
| Health care | 10,831,791 | 0 | 0 | 10,831,791 |
| Information technology | 15,563,156 | 0 | 0 | 15,563,156 |
| Real estate | 17,644,350 | 0 | 0 | 17,644,350 |
| Utilities | 295,278,267 | 0 | 0 | 295,278,267 |
| Short-term investments | ||||
| Investment companies | 3,987,005 | 0 | 0 | 3,987,005 |
| Total assets | $396,704,416 | $0 | $0 | $396,704,416 |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the year ended March 31, 2023, the Fund did not have any transfers into/out of Level 3.
Allspring Utility and Telecommunications Fund | 21
Notes to financial statements
4. TRANSACTIONS WITH AFFILIATES
Management fee
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Allspring Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Allspring Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:
| Average daily net assets | Management fee |
| First $500 million | 0.650% |
| Next $500 million | 0.600 |
| Next $1 billion | 0.550 |
| Next $2 billion | 0.525 |
| Next $1 billion | 0.500 |
| Next $5 billion | 0.490 |
| Over $10 billion | 0.480 |
For the year ended March 31, 2023, the management fee was equivalent to an annual rate of 0.65% of the Fund’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Global Investments, LLC ("Allspring Investments"), an affiliate of Allspring Funds Management and a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.30% and declining to 0.20% as the average daily net assets of the Fund increase.
Administration fees
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:
| Class-level administration fee | |
| Class A | 0.21% |
| Class C | 0.21 |
| Administrator Class | 0.13 |
| Institutional Class | 0.13 |
Waivers and/or expense reimbursements
Allspring Funds Management has contractually committed to waive and/or reimburse management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Allspring Funds Management will waive fees and/or reimburse expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Allspring Funds Management has contractually committed through July 31, 2023 to waive fees and/or reimburse expenses to the extent necessary to cap expenses. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the
22 | Allspring Utility and Telecommunications Fund
Notes to financial statements
caps may be terminated only with the approval of the Board of Trustees. As of March 31, 2023, the contractual expense caps are as follows:
| Expense ratio caps | |
| Class A | 1.05% |
| Class C | 1.80 |
| Administrator Class | 0.92 |
| Institutional Class | 0.72 |
Distribution fee
The Trust has adopted a distribution plan for Class C shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Allspring Funds Distributor, LLC ("Allspring Funds Distributor"), the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.75% of the average daily net assets of Class C shares.
In addition, Allspring Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Allspring Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the year ended March 31, 2023, Allspring Funds Distributor received $6,302 from the sale of Class A shares. No contingent deferred sales charges were incurred by Class A and Class C shares for the year ended March 31, 2023.
Shareholder servicing fees
The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A, Class C and Administrator Class are charged a fee at an annual rate up to 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of the Fund.
Interfund transactions
The Fund may purchase or sell portfolio investment securities to certain affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices.
5. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the year ended March 31, 2023 were $16,992,568 and $42,020,082, respectively.
6. BANK BORROWINGS
The Trust (excluding the money market funds), Allspring Master Trust and Allspring Variable Trust are parties to a $350,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the Fund based on a borrowing rate equal to the higher of the Federal Funds rate or the overnight bank funding rate in effect on that day plus a spread. In addition, an annual commitment fee based on the unused balance is allocated to each participating fund.
For the year ended March 31, 2023, there were no borrowings by the Fund under the agreement.
7. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid during the years ended March 31, 2023 and March 31, 2022 were as follows:
| Year ended March 31 | ||
| 2023 | 2022 | |
| Ordinary income | $ 7,584,760 | $ 6,960,059 |
| Long-term capital gain | 36,251,261 | 48,447,559 |
Allspring Utility and Telecommunications Fund | 23
Notes to financial statements
As of March 31, 2023, the components of distributable earnings on a tax basis were as follows:
| Undistributed ordinary income | Undistributed long-term gain | Unrealized gains |
| $209,865 | $3,926,426 | $124,799,294 |
8. CONCENTRATION RISKS
The Fund concentrated its portfolio of investments in the utility sector. A fund that invests a substantial portion of its assets in any sector may be more affected by changes in that sector than would be a fund whose investments are not heavily weighted in any sector.
9. INDEMNIFICATION
Under the Fund's organizational documents, the officers and Trustees have been granted certain indemnification rights against certain liabilities that may arise out of performance of their duties to the Fund. The Fund has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Fund’s organizational documents into contractual rights that cannot be changed in the future without the consent of the Trustee. Additionally, in the normal course of business, the Fund may enter into contracts with service providers that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.
24 | Allspring Utility and Telecommunications Fund
Report of independent registered public accounting firm
To the Shareholders of the Fund and Board of Trustees
Allspring Funds Trust:
Allspring Funds Trust:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Allspring Utility and Telecommunications Fund (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of March 31, 2023, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of March 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of March 31, 2023, by correspondence with the custodian, transfer agent and brokers, or by other appropriate auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have not been able to determine the specific year that we began serving as the auditor of one or more Allspring Funds investment companies; however, we are aware that we have served as the auditor of one or more Allspring Funds investment companies since at least 1955.
Boston, Massachusetts
May 25, 2023
Allspring Utility and Telecommunications Fund | 25
Other information (unaudited)
TAX INFORMATION
For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 100% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended March 31, 2023.
Pursuant to Section 852 of the Internal Revenue Code, $36,251,261 was designated as a 20% rate gain distribution for the fiscal year ended March 31, 2023.
Pursuant to Section 854 of the Internal Revenue Code, $7,584,760 of income dividends paid during the fiscal year ended March 31, 2023 has been designated as qualified dividend income (QDI).
For the fiscal year ended March 31, 2023, $82,209 has been designated as interest-related dividends for nonresident alien shareholders pursuant to Section 871 of the Internal Revenue Code.
PROXY VOTING INFORMATION
A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our website at allspringglobal.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at allspringglobal.com or by visiting the SEC website at sec.gov.
QUARTERLY PORTFOLIO HOLDINGS INFORMATION
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
26 | Allspring Utility and Telecommunications Fund
Other information (unaudited)
BOARD OF TRUSTEES AND OFFICERS
Each of the Trustees and Officers listed in the table below acts in identical capacities for each fund in the Allspring family of funds, which consists of 127 mutual funds comprising the Allspring Funds Trust, Allspring Variable Trust, Allspring Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information1. The mailing address of each Trustee and Officer is 1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203. Each Trustee and Officer serves an indefinite term, however, each Trustee serves such term until reaching the mandatory retirement age established by the Trustees.
Independent Trustees
| Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
| William R. Ebsworth (Born 1957) | Trustee, since 2015 | Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Foundation (non-profit organization). Mr. Ebsworth is a CFA® charterholder. | N/A |
| Jane A. Freeman (Born 1953) | Trustee, since 2015; Chair Liaison, since 2018 | Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is also an inactive Chartered Financial Analyst. | N/A |
| Isaiah Harris, Jr. (Born 1952) | Trustee, since 2009; Audit Committee Chair, since 2019 | Retired. Member of the Advisory Board of CEF of East Central Florida. Chairman of the Board of CIGNA Corporation from 2009 to 2021, and Director from 2005 to 2008. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Fellowship of Christian Athletes. Mr. Harris is a certified public accountant (inactive status). | N/A |
| David F. Larcker (Born 1950) | Trustee, since 2009 | Distinguished Visiting Fellow at the Hoover Institution since 2022. James Irvin Miller Professor of Accounting at the Graduate School of Business (Emeritus), Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. | N/A |
Allspring Utility and Telecommunications Fund | 27
Other information (unaudited)
| Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
| Olivia S. Mitchell (Born 1953) | Trustee, since 2006; Nominating and Governance Committee Chair, since 2018 | International Foundation of Employee Benefit Plans Professor since 1993, Wharton School of the University of Pennsylvania. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously taught at Cornell University from 1978 to 1993. | N/A |
| Timothy J. Penny (Born 1951) | Trustee, since 1996; Chair, since 2018 | President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Vice Chair of the Economic Club of Minnesota, since 2007. Co-Chair of the Committee for a Responsible Federal Budget, since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, from 2007-2022. Senior Fellow of the University of Minnesota Humphrey Institute from 1995 to 2017. | N/A |
| James G. Polisson (Born 1959) | Trustee, since 2018 | Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations. | N/A |
| Pamela Wheelock (Born 1959) | Trustee, since January 2020; previously Trustee from January 2018 to July 2019 | Retired. Executive and Senior Financial leadership positions in the public, private and nonprofit sectors. Interim President and CEO, McKnight Foundation, 2020. Interim Commissioner, Minnesota Department of Human Services, 2019. Chief Operating Officer, Twin Cities Habitat for Humanity, 2017-2019. Vice President for University Services, University of Minnesota, 2012-2016. Interim President and CEO, Blue Cross and Blue Shield of Minnesota, 2011-2012. Executive Vice-President and Chief Financial Officer, Minnesota Wild, 2002-2008. Commissioner, Minnesota Department of Finance, 1999-2002. Chair of the Board of Directors of Destination Medical Center Corporation. Board member of the Minnesota Wild Foundation. | N/A |
* Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.
28 | Allspring Utility and Telecommunications Fund
Other information (unaudited)
Officers2
| Name and year of birth | Position held and length of service | Principal occupations during past five years or longer |
| Andrew Owen (Born 1960) | President, since 2017 | President and Chief Executive Officer of Allspring Funds Management, LLC since 2017 and Head of Global Fund Governance of Allspring Global Investments since 2022. Prior thereto, co-president of Galliard Capital Management, LLC, an affiliate of Allspring Funds Management, LLC, from 2019 to 2022 and Head of Affiliated Managers, Allspring Global Investments, from 2014 to 2019 and Executive Vice President responsible for marketing, investments and product development for Allspring Funds Management, LLC, from 2009 to 2014. |
| Jeremy DePalma (Born 1974) | Treasurer, since 2012 (for certain funds in the Fund Complex); since 2021 (for the remaining funds in the Fund Complex) | Senior Vice President of Allspring Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010. |
| Christopher Baker (Born 1976) | Chief Compliance Officer, since 2022 | Global Chief Compliance Officer for Allspring Global Investments since 2022. Prior thereto, Chief Compliance Officer for State Street Global Advisors from 2018 to 2021. Senior Compliance Officer for the State Street divisions of Alternative Investment Solutions, Sector Solutions, and Global Marketing from 2015 to 2018. From 2010 to 2015 Vice President, Global Head of Investment and Marketing Compliance for State Street Global Advisors. |
| Matthew Prasse (Born 1983) | Chief Legal Officer, since 2022; Secretary, since 2021 | Senior Counsel of the Allspring Legal Department since 2021. Senior Counsel of the Wells Fargo Legal Department from 2018 to 2021. Previously, Counsel for Barings LLC from 2015 to 2018. Prior to joining Barings, Associate at Morgan, Lewis & Bockius LLP from 2008 to 2015. |
1 The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at allspringglobal.com.
2 For those Officers with tenures at Allspring Global Investments and/or Allspring Funds Management, LLC that began prior to 2021, such tenures include years of service during which these businesses/entities were known as Wells Fargo Asset Management and Wells Fargo Funds Management, LLC, respectively.
Allspring Utility and Telecommunications Fund | 29
For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Fund's website, or call:
Allspring Funds
P.O. Box 219967
Kansas City, MO 64121-9967
P.O. Box 219967
Kansas City, MO 64121-9967
Website: allspringglobal.com
Individual investors: 1-800-222-8222
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-800-260-5969
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call
1-800-222-8222 or visit the Fund's website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
1-800-222-8222 or visit the Fund's website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
Allspring Global InvestmentsTM is the trade name for the asset management firms of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management, LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind - including a recommendation for any specific investment, strategy, or plan.
© 2023 Allspring Global Investments Holdings, LLC. All rights reserved.
ALL-04052023-rgd7evvk 05-23
AR0667 03-23
AR0667 03-23
| ITEM 2. | CODE OF ETHICS |
(a) As of the end of the period covered by the report, Allspring Funds Trust has adopted a code of ethics that applies to its President and Treasurer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
(c) During the period covered by this report, there were no amendments to the provisions of the code of ethics adopted in Item 2(a) above.
(d) During the period covered by this report, there were no implicit or explicit waivers to the provisions of the code of ethics adopted in Item 2(a) above.
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT |
The Board of Trustees of Allspring Funds Trust has determined that Isaiah Harris is an audit committee financial expert, as defined in Item 3 of Form N-CSR. Mr. Harris is independent for purposes of Item 3 of Form N-CSR.
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
(a), (b), (c), (d) The following table presents aggregate fees billed in each of the last two fiscal years for services rendered to the Registrant by the Registrant’s principal accountant. These fees were billed to the registrant and were approved by the Registrant’s audit committee.
| Fiscal year ended March 31, 2023 | Fiscal year ended March 31, 2022 | |||||||
Audit fees | $ | 245,380 | $ | 239,400 | ||||
Audit-related fees | — | — | ||||||
Tax fees (1) | 34,870 | 33,925 | ||||||
All other fees | — | — | ||||||
|
|
|
| |||||
| $ | 280,250 | $ | 273,325 | |||||
|
|
|
| |||||
| (1) | Tax fees consist of fees for tax compliance, tax advice, tax planning and excise tax. |
(e) The Chair of the Audit Committees is authorized to pre-approve: (1) audit services for the mutual funds of Allspring Funds Trust; (2) non-audit tax or compliance consulting or training services provided to the Funds by the independent auditors (“Auditors”) if the fees for any particular engagement are not anticipated to exceed $50,000; and (3) non-audit tax or compliance consulting or training services provided by the Auditors to a Fund’s investment adviser and its controlling entities (where pre-approval is required because the engagement relates directly to the operations and financial reporting of the Fund) if the fee to the Auditors for any particular engagement is not anticipated to exceed $50,000. For any such pre-approval sought from the Chair, Management shall prepare a brief description of the proposed services.
If the Chair approves of such service, he or she shall sign the statement prepared by Management.
Such written statement shall be presented to the full Committees at their next regularly scheduled meetings.
(f) Not applicable
(g) Not applicable
(h) Not applicable
| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS |
Not applicable.
| ITEM 6. | INVESTMENTS |
A Portfolio of Investments for each series of Allspring Funds Trust is included as part of the report to shareholders filed under Item 1 of this Form.
| ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES |
Not applicable.
| ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES |
Not applicable.
| ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS |
Not applicable.
| ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees that have been implemented since the registrant’s last provided disclosure in response to the requirements of this Item.
| ITEM 11. | CONTROLS AND PROCEDURES |
(a) The President and Treasurer have concluded that the Allspring Funds Trust disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) provide reasonable assurances that material information relating to the registrant is made known to them by the appropriate persons based on their evaluation of these controls and procedures as of a date within 90 days of the filing of this report.
(b) There were no significant changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the most recent fiscal half-year of the period covered by this report that materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
| ITEM 12. | DISCLOSURES OF SECURITIES LENDING ACTIVITES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES |
Not applicable.
| ITEM 13. | EXHIBITS |
(a)(1) Code of Ethics.
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Allspring Funds Trust | ||
| By: | /s/ Andrew Owen | |
| Andrew Owen | ||
| President | ||
| Date: May 25, 2023 | ||
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
| Allspring Funds Trust | ||
| By: | /s/ Andrew Owen | |
| Andrew Owen | ||
| President | ||
| Date: May 25, 2023 | ||
| By: | /s/Jeremy DePalma | |
| Jeremy DePalma | ||
| Treasurer | ||
| Date: May 25, 2023 | ||