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: May 31
Registrant is making a filing for 15 of its series: Allspring Asset Allocation Fund, Allspring C&B Large Cap Value Fund, Allspring Core Bond Fund, Allspring Emerging Growth Fund, Allspring Growth Balanced Fund, Allspring Index Fund, Allspring Moderate Balanced Fund, Allspring Real Return Fund, Allspring Small Company Growth Fund, Allspring Small Company Value Fund, Allspring Spectrum Aggressive Growth Fund, Allspring Spectrum Conservative Growth Fund, Allspring Spectrum Growth Fund, Allspring Spectrum Income Allocation Fund, and Allspring Spectrum Moderate Growth Fund
Date of reporting period: May 31, 2023
ITEM 1. REPORT TO STOCKHOLDERS
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Contents
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The views expressed and any forward-looking statements are as of May 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 Asset Allocation Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Asset Allocation Fund for the 12-month period that ended May 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. The market was focused on persistently high inflation 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. Markets received a boost in December with the removal of China’s strict COVID-19 lockdowns. In March 2023, a new wave of market anxiety resulted from several bank failures and unease over the possibility of more rate hikes. However, investors regained confidence and markets finished the period in relative calm.
For the 12-month period, stocks and bonds—both domestic U.S. and global—had mixed results. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 2.92%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 lost 1.41%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a return of -8.49%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -2.14%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 6.49%, the Bloomberg Municipal Bond Index6 gained 0.49%, and the ICE BofA U.S. High Yield Index7 returned -0.09%.
High inflation and central bank rate hikes rocked markets.
In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Federal Reserve (Fed) raised its short-term rate by 0.75% in June. Meanwhile, the U.S. unemployment rate remained historically low 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 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, 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.
“ In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring 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 the 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.
2 | Allspring Asset Allocation Fund
Letter to shareholders (unaudited)
August was yet another broadly challenging month for financial markets. 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 was the resilient U.S. jobs 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.
In September, all asset classes suffered further 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. 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 increasing 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 declining overall in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever, with generally flat 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 wound 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.
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 had 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 (ECB) both raised rates by 0.50%.
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 Asset Allocation Fund | 3
Letter to shareholders (unaudited)
“ 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 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 banking industry turmoil created an additional challenge for central banks in balancing inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. 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.
Economic data released in April pointed to global resilience, as Purchasing Managers Indexes1 in the U.S., U.K., and eurozone beat expectations, and China reported first-quarter annualized economic growth of 4.5%. Despite banking industry stress, developed market stocks had monthly gains. The U.S. labor market remained strong, with a 3.5% jobless rate and monthly payroll gains above 200,000. However, uncertainty and inflationary concerns weighed on investors in the U.S. and abroad.
May was marked by a divergence between expanding activity in services and an overall contraction in manufacturing activity in the U.S., U.K., and eurozone. Core inflation remained elevated in the U.S. and Europe, despite the ongoing efforts of the Fed and ECB, which included rate hikes of 0.25% by both in May. Stubborn inflation and the resilient U.S. labor market led to expectations of further interest rate hikes, overall monthly declines across bond indexes, and mixed results for stocks in May. Investor worries over a U.S. debt ceiling impasse were modest, and market confidence was buoyed by a deal in late May to avert a potential U.S. debt default.
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 Asset Allocation Fund
Letter to shareholders (unaudited)
Notice to Shareholders |
Beginning in July 2024, the Fund will be required by the Securities and Exchange Commission to send shareholders a paper copy of a new tailored shareholder report in place of the full shareholder report that you are now receiving. The tailored shareholder report will contain concise information about the Fund, including certain expense and performance information and fund statistics. If you wish to receive this new tailored shareholder report electronically, please follow the instructions on the back cover of this report. |
Other information that is currently included in the shareholder report, such as the Fund’s financial statements, will be available online and upon request, free of charge, in paper or electronic format. |
Allspring Asset Allocation Fund | 5
Performance highlights (unaudited)
Performance highlights
Investment objective | The Fund seeks long-term total return, consisting of capital appreciation and current income. |
Manager | Allspring Funds Management, LLC |
Subadviser | Allspring Global Investments, LLC |
Portfolio managers | Kandarp R. Acharya, CFA, FRM, Petros N. Bocray, CFA, FRM, Travis L. Keshemberg, CFA, CIPM, FRM |
Average annual total returns (%) as of May 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 | Net2 | |
Class A (EAAFX) | 7-29-1996 | -7.22 | 3.10 | 3.36 | -1.54 | 4.32 | 3.97 | 1.18 | 1.12 |
Class C (EACFX) | 10-3-2002 | -3.34 | 3.66 | 3.42 | -2.34 | 3.66 | 3.42 | 1.93 | 1.87 |
Class R (EAXFX) | 10-10-2003 | – | – | – | -1.81 | 4.13 | 3.76 | 1.44 | 1.38 |
Administrator Class (EAIFX) | 10-3-2002 | – | – | – | -0.39 | 4.87 | 4.35 | 1.11 | 0.95 |
Institutional Class (EAAIX) | 11-30-2012 | – | – | – | -1.21 | 4.67 | 4.36 | 0.86 | 0.80 |
Asset Allocation Blended Index3 | – | – | – | – | 0.20 | 5.51 | 6.03 | – | – |
Bloomberg U.S. Aggregate Bond Index4 | – | – | – | – | -2.14 | 0.81 | 1.39 | – | – |
MSCI ACWI ex USA Index (Net)5 | – | – | – | – | -1.41 | 2.22 | 3.83 | – | – |
Russell 3000® Index6 | – | – | – | – | 2.03 | 10.07 | 11.45 | – | – |
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, 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, which include the impact of 0.43% in acquired fund fees and expenses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report, which do not include acquired fund fees and expenses. |
2 | The manager has contractually committed through September 30, 2023 (September 30, 2024 for Class A and Class C), to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 1.12% for Class A, 1.87% for Class C, 1.38% for Class R, 0.95% for Administrator Class and 0.80% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any) from funds in which the affiliated master portfolios and funds invest and from money market funds, and extraordinary expenses are excluded from the expense caps. All other acquired fund fees and expenses from the affiliated master portfolios and funds are included in 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 | Source: Allspring Funds Management, LLC. The Asset Allocation Blended Index is composed 45% of the Russell 3000® Index, 35% of the Bloomberg U.S. Aggregate Bond Index and 20% of the MSCI ACWI ex USA Index (Net). Prior to June 16, 2018, it was comprised of 65% of the MSCI ACWI Index (Net) and 35% of the Bloomberg U.S. Aggregate Bond Index. 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 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. |
6 | The Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
6 | Allspring Asset Allocation Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of May 31, 20231 |
1 | The chart compares the performance of Class A shares for the most recent ten years with the Asset Allocation Blended Index, Bloomberg U.S. Aggregate Bond Index, MSCI ACWI ex USA Index (Net) and Russell 3000® 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%. |
Balanced funds may invest in stocks and bonds. 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. Foreign investments are especially volatile and can rise or fall dramatically due to differences in the political and economic conditions of the host country. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This fund is exposed to high-yield securities risk, mortgage-and asset-backed securities risk, geographic risk, and smaller-company securities risk. Consult the Fund’s prospectus for additional information on these and other risks.
Allspring Asset Allocation Fund | 7
Performance highlights (unaudited)
MANAGER’S DISCUSSION
Fund highlights
•The Fund underperformed the Asset Allocation Fund Blended Index for the 12-month period that ended May 31, 2023.
•The Tactical Asset Allocation (TAA) overlay was the largest single detractor from relative performance over the period. Poor stock selection among several actively managed equity strategies also detracted.
•Strong relative performance within fixed income investments had the largest positive impact on performance.
Slow growth, rising rates lead to muted market returns.
The trailing 12-month period featured slowing economic growth, rising interest rates, persistently high inflation, and geopolitical uncertainty. The broad equity market posted a small gain despite volatile markets, while bonds posted negative returns over the period.
The 12-month period that ended May 31, 2023, saw a small gain in the broad U.S. equity markets, as illustrated by the Russell 3000® Index’s return of +2.03%. Broad foreign markets did worse, as reflected by the MSCI ACWI ex USA Index (Net)’s return of -1.41%. While these return numbers seem modest, they reflect a recovery from some severe double-digit declines. The broad U.S. fixed income market, as represented by the Bloomberg U.S. Aggregate Bond Index, posted a return of -2.14%.
Ten largest holdings (%) as of May 31, 20231 | |
Allspring Managed Fixed Income Portfolio | 22.38 |
Allspring Disciplined U.S. Core Fund Class R6 | 13.86 |
Allspring Large Company Value Portfolio | 11.49 |
Allspring Diversified Large Cap Growth Portfolio | 11.23 |
Allspring Disciplined International Developed Markets Portfolio | 8.49 |
Allspring Core Bond Portfolio | 6.27 |
iShares Core MSCI EAFE ETF | 3.87 |
Allspring Real Return Portfolio | 3.48 |
Allspring C&B Large Cap Value Portfolio | 3.42 |
Allspring Factor Enhanced International Equity Portfolio | 3.14 |
1 | Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
Investment-grade exposure reduced; small high yield bond position added.
The allocations among the portfolio’s core holdings remained stable over the period. However, in February, we reduced exposure to investment-grade fixed income and established a small position in high yield bonds. In contrast, the Fund’s TAA overlay was active throughout the year. The overlay had a distinctly defensive posturing at the start of the period, which became less defensive as both stock and bond markets recovered in the second half of the period.
The TAA overlay detracted from relative performance along with poor stock selection.
The TAA overlay was the largest detractor from relative performance, reducing performance by about 50 basis points (bps; 100 bps equal 1.00%) over the entire period. Early on, the overlay was defensively postured.
However, even some of the classic defensive trades detracted from performance. Since the beginning of 2023, we have selectively added risk. Our base case suggests a globally synchronized slowdown in economic activity with inflation more persistent than many local central banks may want it to be. We continue to prefer relative-value trades as opposed to directional trades amid much uncertainty.
Poor stock selection, particularly within U.S. large-cap growth, detracted from performance. The recovery from the market lows since the end of 2022 has been led by a small group of very large growth stocks. Failing to hold the winners in weights equal to the index resulted in underperformance.
Strong relative performance from all fixed income mandates added to performance.
While the broad fixed income markets, as reflected by the Bloomberg U.S. Aggregate Bond Index posted a return of -2.14%, in total, our fixed income portfolio outperformed by about 40 bps. An overweight to credit within the investment-grade portfolio and exposure to growth-sensitive assets within the inflation-sensitive portfolio contributed.
Allocation (%) as of May 31, 2023 | ||
Neutral allocation | Effective allocation1 | |
Stock Funds | 65 | 45 |
Bond Funds | 35 | 38 |
International Equity Funds | 0 | 20 |
Effective Cash | 0 | (3 ) |
1 | Effective allocation reflects the effect of the tactical futures overlay that may be in place. Effective cash, if any, represents the net offset to such future positions. Effective allocations are subject to change and may have changed since the date specified. |
Looking ahead, we are still somewhat guarded.
While U.S. lending standards are tightening and the impact of higher rates is just starting to be felt within the banking sector, the contagion from bank failures in the U.S. has been limited so far. The Federal Reserve (Fed) is likely to be more data dependent from this point forward and the pattern of consistently hiking every quarter should end. However, with real yields on the rise and the U.S. dollar stabilizing, the combination of further Fed balance sheet shrinkage and tighter fiscal policy affected by the debt limit negotiations should put downward pressure on growth. The household sector balance sheet remains healthy and supported by a strong labor market. Negative real wages and fading government support are likely to lead to lower spending going forward.
8 | Allspring Asset Allocation Fund
Performance highlights (unaudited)
Our base case is that we have an early onset recession with the first quarter of 2023 being the peak of economic activity. It is likely that the second quarter will show sequential weakness. Credit spreads remain wider, the yield curve remains inverted, and the housing recession continues. The market continues to expect meaningful rate cuts in the second half of this year. This is likely to put pressure on equity and bond valuations.
Allspring Asset Allocation Fund | 9
Fund expenses (unaudited)
Fund expenses
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 December 1, 2022 to May 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 the 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 12-1-2022 | Ending account value 5-31-2023 | Expenses paid during the period1, 2 | Annualized net expense ratio2 | |
Class A | ||||
Actual | $1,000.00 | $1,000.06 | $5.19 | 1.04 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,019.75 | $5.24 | 1.04 % |
Class C | ||||
Actual | $1,000.00 | $1,000.01 | $8.93 | 1.79 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,016.01 | $9.00 | 1.79 % |
Class R | ||||
Actual | $1,000.00 | $1,000.05 | $6.43 | 1.29 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,018.50 | $6.49 | 1.29 % |
Administrator Class | ||||
Actual | $1,000.00 | $1,000.07 | $4.29 | 0.86 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,020.64 | $4.33 | 0.86 % |
Institutional Class | ||||
Actual | $1,000.00 | $1,000.08 | $3.54 | 0.71 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.39 | $3.58 | 0.71 % |
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).
2 Amounts reflect net expenses allocated from the affiliated Master Portfolios in which the Fund invests.
10 | Allspring Asset Allocation Fund
Portfolio of investments—May 31, 2023
Portfolio of investments
Shares | Value | |||||
Investment companies: 99.14% | ||||||
Affiliated master portfolios: 76.05% | ||||||
Allspring C&B Large Cap Value Portfolio | $44,382,560 | |||||
Allspring Core Bond Portfolio | 81,323,807 | |||||
Allspring Disciplined International Developed Markets Portfolio | 110,037,004 | |||||
Allspring Diversified Large Cap Growth Portfolio | 145,527,744 | |||||
Allspring Emerging Growth Portfolio | 14,178,374 | |||||
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 17,058,202 | |||||
Allspring Factor Enhanced International Equity Portfolio | 40,700,105 | |||||
Allspring Large Company Value Portfolio | 148,899,874 | |||||
Allspring Managed Fixed Income Portfolio | 290,030,242 | |||||
Allspring Real Return Portfolio | 45,059,059 | |||||
Allspring Small Company Growth Portfolio | 14,465,011 | |||||
Allspring Small Company Value Portfolio | 33,943,623 | |||||
985,605,605 | ||||||
Exchange-traded funds: 6.62% | ||||||
iShares Core MSCI EAFE ETF | 760,397 | 50,209,014 | ||||
iShares iBoxx High Yield Corporate Bond ETF | 480,729 | 35,626,826 | ||||
85,835,840 | ||||||
Stock funds: 16.47% | ||||||
Allspring Disciplined U.S. Core Fund Class R6♠ | 9,565,794 | 179,645,604 | ||||
Allspring Emerging Markets Equity Fund Class R6♠ | 710,851 | 16,968,005 | ||||
Allspring Emerging Markets Equity Income Fund Class R6♠ | 1,670,152 | 16,835,136 | ||||
213,448,745 | ||||||
Total investment companies (Cost $1,242,655,262) | 1,284,890,190 | |||||
Total investments in securities (Cost $1,242,655,262) | 99.14 % | 1,284,890,190 | ||||
Other assets and liabilities, net | 0.86 | 11,209,438 | ||||
Total net assets | 100.00 % | $1,296,099,628 | ||||
♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
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) on affiliated Underlying Funds | Net change in unrealized gains (losses) on affiliated Underlying Funds | Value, end of period | |
Investment companies | ||||||
Allspring Disciplined U.S. Core Fund Class R6 | $211,238,729 | $24,836,722 | $(35,322,762 ) | $(7,065,914 ) | $(14,041,171 ) | $179,645,604 |
Allspring Emerging Markets Equity Fund Class R6 | 19,242,347 | 1,718,321 | (2,715,595 ) | (285,994 ) | (991,074 ) | 16,968,005 |
Allspring Emerging Markets Equity Income Fund Class R6 | 21,014,247 | 982,899 | (2,681,684 ) | (174,098 ) | (2,306,228 ) | 16,835,136 |
$(7,526,006 ) | $(17,338,473 ) | $213,448,745 |
The accompanying notes are an integral part of these financial statements.
Allspring Asset Allocation Fund | 11
Portfolio of investments—May 31, 2023
Shares, end of period | Dividends from affiliated Underlying Funds | Net realized gains on capital gain distributions from affiliated Underlying Funds | |
Investment companies | |||
Allspring Disciplined U.S. Core Fund Class R6 | 9,565,794 | $2,588,623 | $20,934,054 |
Allspring Emerging Markets Equity Fund Class R6 | 710,851 | 230,112 | 0 |
Allspring Emerging Markets Equity Income Fund Class R6 | 1,670,152 | 571,632 | 0 |
$3,390,367 | $20,934,054 |
Transactions with the affiliated Master Portfolios were as follows:
% of ownership, beginning of period | % of ownership, end of period | Net realized gains (losses) on investments allocated from affiliated Master Portfolios | Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolios | Interest allocated from affiliated Master Portfolios | Dividends allocated from affiliated Master Portfolios | Affiliated Income Allocated from affiliated Master Portfolios | Value, end of period | |
Allspring C&B Large Cap Value Portfolio | 16.61 % | 17.53 % | $4,233,534 | $(7,086,441 ) | $1,125 | $1,067,976 | $31,098 | $44,382,560 |
Allspring Core Bond Portfolio | 1.96 | 1.74 | (6,191,912 ) | 1,548,543 | 2,867,207 | 0 | 71,118 | 81,323,807 |
Allspring Disciplined International Developed Markets Portfolio | 86.56 | 85.71 | (3,195,187 ) | 2,888,699 | 2,325 | 3,713,986 | 75,097 | 110,037,004 |
Allspring Diversified Large Cap Growth Portfolio | 84.39 | 83.71 | 8,551,480 | (1,507,539 ) | 3,598 | 1,556,113 | 64,836 | 145,527,744 |
Allspring Emerging Growth Portfolio | 3.85 | 4.37 | 898,357 | (912,590 ) | 348 | 34,578 | 13,968 | 14,178,374 |
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 15.23 | 16.43 | (2,228,382 ) | 172,106 | 430 | 687,737 | 21,682 | 17,058,202 |
Allspring Factor Enhanced International Equity Portfolio | 9.49 | 9.71 | (3,196,449 ) | 2,124,540 | 0 | 1,376,116 | 39,673 | 40,700,105 |
Allspring Large Company Value Portfolio | 84.92 | 84.18 | (8,754,890 ) | (6,094,349 ) | 4,183 | 3,713,014 | 124,020 | 148,899,874 |
Allspring Managed Fixed Income Portfolio | 81.56 | 81.08 | (5,434,635 ) | (10,507,909 ) | 11,151,001 | 0 | 116,721 | 290,030,242 |
Allspring Real Return Portfolio | 22.84 | 21.28 | 360,620 | (4,050,399 ) | 2,164,760 | 166,494 | 16,474 | 45,059,059 |
Allspring Small Company Growth Portfolio | 2.03 | 2.02 | 533,479 | (343,309 ) | 361 | 62,503 | 14,646 | 14,465,011 |
Allspring Small Company Value Portfolio | 7.28 | 6.72 | (256,414 ) | (3,904,040 ) | 837 | 676,832 | 35,490 | 33,943,623 |
$(14,680,399 ) | $(27,672,688 ) | $16,196,175 | $13,055,349 | $624,823 | $985,605,605 |
Futures contracts
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Long | ||||||
10-Year Euro BUND Index | 241 | 6-8-2023 | $34,574,976 | $35,047,154 | $472,178 | $0 |
TOPIX | 218 | 6-8-2023 | 32,387,737 | 33,265,243 | 877,506 | 0 |
E-Mini NASDAQ 100 Index | 177 | 6-16-2023 | 43,454,607 | 50,623,770 | 7,169,163 | 0 |
E-Mini Russell 1000 Growth Index | 222 | 6-16-2023 | 27,590,138 | 28,876,650 | 1,286,512 | 0 |
The accompanying notes are an integral part of these financial statements.
12 | Allspring Asset Allocation Fund
Portfolio of investments—May 31, 2023
Futures contracts (continued)
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Long (continued) | ||||||
Japanese Yen Futures | 550 | 6-16-2023 | $51,568,979 | $49,500,000 | $0 | $(2,068,979 ) |
10-Year U.S. Treasury Notes | 601 | 9-20-2023 | 68,632,504 | 68,795,719 | 163,215 | 0 |
Short | ||||||
2-Year Euro SCHATZ | (1,341 ) | 6-8-2023 | (150,916,226 ) | (151,395,203 ) | 0 | (478,977 ) |
E-Mini Russell 1000 Value Index | (357 ) | 6-16-2023 | (27,329,849 ) | (26,121,690 ) | 1,208,159 | 0 |
E-Mini S&P 500 Index | (222 ) | 6-16-2023 | (43,559,254 ) | (46,514,550 ) | 0 | (2,955,296 ) |
Euro STOXX 50 Index | (693 ) | 6-16-2023 | (32,044,044 ) | (31,237,338 ) | 806,706 | 0 |
$11,983,439 | $(5,503,252 ) |
The accompanying notes are an integral part of these financial statements.
Allspring Asset Allocation Fund | 13
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in affiliated Master Portfolio, at value (cost $952,202,035) | $985,605,605 |
Investments in unaffiliated securities, at value (cost $92,664,247) | 85,835,840 |
Investments in affiliated Underlying Funds, at value (cost $197,788,980) | 213,448,745 |
Cash | 1,103,459 |
Cash at broker segregated for futures contracts | 11,359,102 |
Receivable for daily variation margin on open futures contracts | 1,694,104 |
Receivable for Fund shares sold | 45,277 |
Prepaid expenses and other assets | 63,282 |
Total assets | 1,299,155,414 |
Liabilities | |
Payable for daily variation margin on open futures contracts | 1,280,468 |
Payable for Fund shares redeemed | 745,206 |
Management fee payable | 416,748 |
Shareholder servicing fees payable | 241,678 |
Administration fees payable | 220,926 |
Distribution fees payable | 12,555 |
Trustees’ fees and expenses payable | 1,711 |
Accrued expenses and other liabilities | 136,494 |
Total liabilities | 3,055,786 |
Total net assets | $1,296,099,628 |
Net assets consist of | |
Paid-in capital | $1,298,666,201 |
Total distributable loss | (2,566,573 ) |
Total net assets | $1,296,099,628 |
The accompanying notes are an integral part of these financial statements.
14 | Allspring Asset Allocation Fund
Statement of assets and liabilities—May 31, 2023
Computation of net asset value and offering price per share | |
Net assets–Class A | $1,095,066,167 |
Shares outstanding–Class A1 | 87,359,482 |
Net asset value per share–Class A | $12.54 |
Maximum offering price per share – Class A2 | $13.31 |
Net assets–Class C | $18,773,752 |
Shares outstanding–Class C1 | 1,482,524 |
Net asset value per share–Class C | $12.66 |
Net assets–Class R | $2,222,515 |
Shares outstanding–Class R1 | 177,724 |
Net asset value per share–Class R | $12.51 |
Net assets–Administrator Class | $12,949,418 |
Shares outstanding–Administrator Class1 | 998,481 |
Net asset value per share–Administrator Class | $12.97 |
Net assets–Institutional Class | $167,087,776 |
Shares outstanding–Institutional Class1 | 13,296,716 |
Net asset value per share–Institutional Class | $12.57 |
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 Asset Allocation Fund | 15
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Interest allocated from affiliated Master Portfolios | $16,196,175 |
Dividends allocated from affiliated Master Portfolios (net of foreign withholding taxes of $792,352) | 13,055,349 |
Dividends from affiliated Underlying Funds | 3,390,367 |
Dividends from unaffiliated securities | 2,831,731 |
Affiliated income allocated from affiliated Master Portfolios | 624,823 |
Interest | 178,042 |
Expenses allocated from affiliated Master Portfolios | (5,387,349 ) |
Waivers allocated from affiliated Master Portfolios | 621,670 |
Total investment income | 31,510,808 |
Expenses | |
Management fee | 3,877,758 |
Administration fees | |
Class A | 2,413,958 |
Class C | 49,327 |
Class R | 4,773 |
Administrator Class | 19,707 |
Institutional Class | 241,327 |
Shareholder servicing fees | |
Class A | 2,869,585 |
Class C | 58,443 |
Class R | 5,548 |
Administrator Class | 37,522 |
Distribution fees | |
Class C | 174,713 |
Class R | 5,414 |
Custody and accounting fees | 38,379 |
Professional fees | 21,301 |
Registration fees | 74,577 |
Shareholder report expenses | 76,106 |
Trustees’ fees and expenses | 21,213 |
Other fees and expenses | 21,600 |
Total expenses | 10,011,251 |
Less: Fee waivers and/or expense reimbursements | |
Fund-level | (688,020 ) |
Class A | (192,135 ) |
Class C | (2,001 ) |
Administrator Class | (17,337 ) |
Institutional Class | (30,853 ) |
Net expenses | 9,080,905 |
Net investment income | 22,429,903 |
The accompanying notes are an integral part of these financial statements.
16 | Allspring Asset Allocation Fund
Statement of operations—year ended May 31, 2023
Realized and unrealized gains (losses) on investments | |
Net realized gains (losses) on | |
Investments allocated from affiliated Master Portfolios | $(14,680,399 ) |
Unaffiliated securities | (8,776,157 ) |
Affiliated securities | (7,526,006 ) |
Foreign currency and foreign currency translations | (33,635 ) |
Futures contracts | (9,923,487 ) |
Capital gain distributions from affiliated Underlying Funds | 20,934,054 |
Net realized losses on investments | (20,005,630 ) |
Net change in unrealized gains (losses) on | |
Investments allocated from affiliated Master Portfolios | (27,672,688 ) |
Affiliated Underlying Funds | (17,338,473 ) |
Unaffiliated securities | 6,805,373 |
Foreign currency and foreign currency translations | (1,883 ) |
Futures contracts | 6,282,467 |
Net change in unrealized gains (losses) on investments | (31,925,204 ) |
Net realized and unrealized gains (losses) on investments | (51,930,834 ) |
Net decrease in net assets resulting from operations | $(29,500,931 ) |
The accompanying notes are an integral part of these financial statements.
Allspring Asset Allocation Fund | 17
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $22,429,903 | $21,071,267 | ||
Net realized gains (losses) on investments | (20,005,630 ) | 83,811,245 | ||
Net change in unrealized gains (losses) on investments | (31,925,204 ) | (226,564,977 ) | ||
Net decrease in net assets resulting from operations | (29,500,931 ) | (121,682,465 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class A | (59,268,484 ) | (202,891,728 ) | ||
Class C | (417,954 ) | (5,423,558 ) | ||
Class R | (104,644 ) | (467,417 ) | ||
Administrator Class | (824,492 ) | (3,106,447 ) | ||
Institutional Class | (9,997,099 ) | (36,625,295 ) | ||
Tax basis return of capital | ||||
Class A | (10,824,660 ) | 0 | ||
Class C | (221,191 ) | 0 | ||
Class R | (21,404 ) | 0 | ||
Administrator Class | (142,749 ) | 0 | ||
Institutional Class | (1,748,098 ) | 0 | ||
Total distributions to shareholders | (83,570,775 ) | (248,514,445 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class A | 1,813,537 | 23,018,937 | 2,611,398 | 40,863,057 |
Class C | 124,931 | 1,564,255 | 182,136 | 2,833,723 |
Class R | 22,912 | 291,574 | 12,849 | 202,101 |
Administrator Class | 26,450 | 347,283 | 52,285 | 846,945 |
Institutional Class | 1,188,690 | 15,093,300 | 1,834,135 | 29,224,220 |
40,315,349 | 73,970,046 | |||
Reinvestment of distributions | ||||
Class A | 5,117,002 | 63,358,699 | 12,001,744 | 182,452,406 |
Class C | 49,303 | 621,218 | 357,553 | 5,298,942 |
Class R | 9,646 | 119,256 | 29,730 | 449,906 |
Administrator Class | 68,903 | 881,772 | 183,747 | 2,863,149 |
Institutional Class | 736,589 | 9,131,361 | 1,858,632 | 28,382,924 |
74,112,306 | 219,447,327 | |||
The accompanying notes are an integral part of these financial statements.
18 | Allspring Asset Allocation Fund
Statement of changes in net assets
Shares | Shares | |||
Payment for shares redeemed | ||||
Class A | (13,420,146 ) | $(169,645,607 ) | (12,061,446 ) | $(190,070,003 ) |
Class C | (1,018,638 ) | (12,896,313 ) | (1,380,131 ) | (21,542,495 ) |
Class R | (66,642 ) | (856,905 ) | (32,919 ) | (483,592 ) |
Administrator Class | (417,160 ) | (5,415,295 ) | (366,341 ) | (5,897,327 ) |
Institutional Class | (4,693,101 ) | (59,574,954 ) | (3,378,156 ) | (52,642,800 ) |
(248,389,074 ) | (270,636,217 ) | |||
Net increase (decrease) in net assets resulting from capital share transactions | (133,961,419 ) | 22,781,156 | ||
Total decrease in net assets | (247,033,125 ) | (347,415,754 ) | ||
Net assets | ||||
Beginning of period | 1,543,132,753 | 1,890,548,507 | ||
End of period | $1,296,099,628 | $1,543,132,753 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Asset Allocation Fund | 19
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Year ended May 31 | Year ended April 30 | |||||
Class A | 2023 | 2022 | 2021 | 20201 | 2020 | 2019 |
Net asset value, beginning of period | $13.56 | $16.90 | $13.57 | $13.12 | $13.49 | $14.33 |
Net investment income | 0.20 2 | 0.18 2 | 0.18 2 | 0.02 | 0.21 2 | 0.15 2 |
Payment from affiliate | 0.00 | 0.00 | 0.00 3 | 0.00 | 0.00 | 0.00 |
Net realized and unrealized gains (losses) on investments | (0.43 ) | (1.20 ) | 3.75 | 0.43 | (0.36 ) | 0.04 |
Total from investment operations | (0.23 ) | (1.02 ) | 3.93 | 0.45 | (0.15 ) | 0.19 |
Distributions to shareholders from | ||||||
Net investment income | (0.30 ) | (0.18 ) | (0.41 ) | 0.00 | (0.06 ) | (0.06 ) |
Net realized gains | (0.37 ) | (2.14 ) | (0.19 ) | 0.00 | (0.16 ) | (0.97 ) |
Tax basis return of capital | (0.12 ) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (0.79 ) | (2.32 ) | (0.60 ) | 0.00 | (0.22 ) | (1.03 ) |
Net asset value, end of period | $12.54 | $13.56 | $16.90 | $13.57 | $13.12 | $13.49 |
Total return4 | (1.54 )% | (7.42 )% | 29.45 %5 | 3.43 % | (1.26 )% | 1.96 % |
Ratios to average net assets (annualized) | ||||||
Gross expenses | 1.11 %* | 1.09 %* | 1.14 %* | 1.21 %* | 1.22 %* | 1.18 %*,6 |
Net expenses | 1.04 %* | 1.04 %* | 1.04 %* | 1.05 %* | 1.05 %* | 1.04 %*,6 |
Net investment income | 1.60 %* | 1.15 %* | 1.19 %* | 1.22 %* | 1.54 %* | 1.08 %*,6 |
Supplemental data | ||||||
Portfolio turnover rate7 | 106 % | 111 % | 137 % | 13 % | 109 % | 189 % |
Net assets, end of period (000s omitted) | $1,095,066 | $1,272,420 | $1,542,707 | $1,287,856 | $1,253,699 | $1,472,484 |
* | Ratios include only the net expenses allocated from the affiliated Master Portfolios and do not include expenses from any other affiliated Underlying Funds. Net expenses allocated from the affiliated Master Portfolios included in the ratios were as follows: |
Year ended May 31, 2023 | 0.35% |
Year ended May 31, 2022 | 0.34% |
Year ended May 31, 2021 | 0.38% |
Year ended May 31, 20201 | 0.45% |
Year ended April 30, 2020 | 0.45% |
Year ended April 30, 2019 | 0.40% |
1 | For the one month ended May 31, 2020. The Fund changed its fiscal year end from April 30 to May 31, effective May 31, 2020. |
2 | Calculated based upon average shares outstanding |
3 | Amount is less than $0.005. |
4 | Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized. |
5 | For year ended May 31, 2021, the Fund received a payment from an affiliate that had an impact of less than 0.005% on total return. |
6 | Ratios did not include any expenses from Asset Allocation Trust or its investments in underlying funds. Asset Allocation Trust did not have any net expenses. |
7 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the affiliated Underlying Funds and unaffiliated securities and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
20 | Allspring Asset Allocation Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | Year ended April 30 | |||||
Class C | 2023 | 2022 | 2021 | 20201 | 2020 | 2019 |
Net asset value, beginning of period | $13.34 | $16.60 | $13.01 | $12.58 | $12.99 | $13.87 |
Net investment income | 0.11 2 | 0.06 2 | 0.06 2 | 0.01 2 | 0.11 2 | 0.03 2 |
Payment from affiliate | 0.00 | 0.00 | 0.17 | 0.00 | 0.00 | 0.00 |
Net realized and unrealized gains (losses) on investments | (0.42 ) | (1.18 ) | 3.54 | 0.42 | (0.36 ) | 0.06 |
Total from investment operations | (0.31 ) | (1.12 ) | 3.77 | 0.43 | (0.25 ) | 0.09 |
Distributions to shareholders from | ||||||
Net realized gains | (0.25 ) | (2.14 ) | (0.18 ) | 0.00 | (0.16 ) | (0.97 ) |
Tax basis return of capital | (0.12 ) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (0.37 ) | (2.14 ) | (0.18 ) | 0.00 | (0.16 ) | (0.97 ) |
Net asset value, end of period | $12.66 | $13.34 | $16.60 | $13.01 | $12.58 | $12.99 |
Total return3 | (2.34 )% | (8.08 )% | 29.19 %4 | 3.42 % | (2.02 )% | 1.21 % |
Ratios to average net assets (annualized) | ||||||
Gross expenses | 1.85 %* | 1.83 %* | 1.89 %* | 1.96 %* | 1.97 %* | 1.92 %*,5 |
Net expenses | 1.79 %* | 1.78 %* | 1.79 %* | 1.79 %* | 1.80 %* | 1.78 %*,5 |
Net investment income | 0.83 %* | 0.38 %* | 0.43 %* | 0.47 %* | 0.82 %* | 0.23 %*,5 |
Supplemental data | ||||||
Portfolio turnover rate6 | 106 % | 111 % | 137 % | 13 % | 109 % | 189 % |
Net assets, end of period (000s omitted) | $18,774 | $31,038 | $52,586 | $118,081 | $120,029 | $237,096 |
* | Ratios include only the net expenses allocated from the affiliated Master Portfolios and do not include expenses from any other affiliated Underlying Funds. Net expenses allocated from the affiliated Master Portfolios included in the ratios were as follows: |
Year ended May 31, 2023 | 0.35% |
Year ended May 31, 2022 | 0.34% |
Year ended May 31, 2021 | 0.39% |
Year ended May 31, 20201 | 0.44% |
Year ended April 30, 2020 | 0.45% |
Year ended April 30, 2019 | 0.38% |
1 | For the one month ended May 31, 2020. The Fund changed its fiscal year end from April 30 to May 31, effective May 31, 2020. |
2 | Calculated based upon average shares outstanding |
3 | Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized. |
4 | For year ended May 31, 2021, the Fund received a payment from an affiliate which had a 1.29% impact on the total return. |
5 | Ratios did not include any expenses from Asset Allocation Trust or its investments in underlying funds. Asset Allocation Trust did not have any net expenses. |
6 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the affiliated Underlying Funds and unaffiliated securities and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
Allspring Asset Allocation Fund | 21
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | Year ended April 30 | |||||
Class R | 2023 | 2022 | 2021 | 20201 | 2020 | 2019 |
Net asset value, beginning of period | $13.52 | $16.86 | $13.47 | $13.02 | $13.37 | $14.20 |
Net investment income | 0.17 2 | 0.14 2 | 0.14 2 | 0.01 2 | 0.18 2 | 0.11 2 |
Payment from affiliate | 0.00 | 0.00 | 0.07 | 0.00 | 0.00 | 0.00 |
Net realized and unrealized gains (losses) on investments | (0.44 ) | (1.19 ) | 3.71 | 0.44 | (0.37 ) | 0.05 |
Total from investment operations | (0.27 ) | (1.05 ) | 3.92 | 0.45 | 0.19 | 0.16 |
Distributions to shareholders from | ||||||
Net investment income | (0.25 ) | (0.15 ) | (0.34 ) | 0.00 | 0.00 | (0.02 ) |
Net realized gains | (0.37 ) | (2.14 ) | (0.19 ) | 0.00 | (0.16 ) | (0.97 ) |
Tax basis return of capital | (0.12 ) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (0.74 ) | (2.29 ) | (0.53 ) | 0.00 | (0.16 ) | (0.99 ) |
Net asset value, end of period | $12.51 | $13.52 | $16.86 | $13.47 | $13.02 | $13.37 |
Total return3 | (1.81 )% | (7.57 )% | 29.44 %4 | 3.46 % | (1.51 )% | 1.73 % |
Ratios to average net assets (annualized) | ||||||
Gross expenses | 1.34 %* | 1.33 %* | 1.37 %* | 1.44 %* | 1.47 %* | 1.42 %*,5 |
Net expenses | 1.29 %* | 1.28 %* | 1.28 %* | 1.27 %* | 1.30 %* | 1.29 %*,5 |
Net investment income | 1.36 %* | 0.91 %* | 0.95 %* | 0.99 %* | 1.32 %* | 0.77 %*,5 |
Supplemental data | ||||||
Portfolio turnover rate6 | 106 % | 111 % | 137 % | 13 % | 109 % | 189 % |
Net assets, end of period (000s omitted) | $2,223 | $2,863 | $3,407 | $4,318 | $4,106 | $7,619 |
* | Ratios include only the net expenses allocated from the affiliated Master Portfolios and do not include expenses from any other affiliated Underlying Funds. Net expenses allocated from the affiliated Master Portfolios included in the ratios were as follows: |
Year ended May 31, 2023 | 0.35% |
Year ended May 31, 2022 | 0.34% |
Year ended May 31, 2021 | 0.38% |
Year ended May 31, 20201 | 0.45% |
Year ended April 30, 2020 | 0.45% |
Year ended April 30, 2019 | 0.39% |
1 | For the one month ended May 31, 2020. The Fund changed its fiscal year end from April 30 to May 31, effective May 31, 2020. |
2 | Calculated based upon average shares outstanding |
3 | Returns for periods of less than one year are not annualized. |
4 | For year ended May 31, 2021, the Fund received a payment from an affiliate which had a 0.51% impact on the total return. |
5 | Ratios did not include any expenses from Asset Allocation Trust or its investments in underlying funds. Asset Allocation Trust did not have any net expenses. |
6 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the affiliated Underlying Funds and unaffiliated securities and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
22 | Allspring Asset Allocation Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | Year ended April 30 | |||||
Administrator Class | 2023 | 2022 | 2021 | 20201 | 2020 | 2019 |
Net asset value, beginning of period | $13.89 | $17.25 | $13.75 | $13.29 | $13.66 | $14.49 |
Net investment income | 0.23 2 | 0.21 2 | 0.21 2 | 0.02 2 | 0.24 2 | 0.16 2 |
Payment from affiliate | 0.00 | 0.00 | 0.12 | 0.00 | 0.00 | 0.00 |
Net realized and unrealized gains (losses) on investments | (0.31 ) | (1.22 ) | 3.81 | 0.44 | (0.37 ) | 0.06 |
Total from investment operations | (0.08 ) | (1.01 ) | 4.14 | 0.46 | (0.13 ) | 0.22 |
Distributions to shareholders from | ||||||
Net investment income | (0.33 ) | (0.21 ) | (0.45 ) | 0.00 | (0.08 ) | (0.08 ) |
Net realized gains | (0.39 ) | (2.14 ) | (0.19 ) | 0.00 | (0.16 ) | (0.97 ) |
Tax basis return of capital | (0.12 ) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (0.84 ) | (2.35 ) | (0.64 ) | 0.00 | (0.24 ) | (1.05 ) |
Net asset value, end of period | $12.97 | $13.89 | $17.25 | $13.75 | $13.29 | $13.66 |
Total return3 | (0.39 )%4 | (7.21 )% | 30.62 %5 | 3.46 % | (1.08 )% | 2.18 % |
Ratios to average net assets (annualized) | ||||||
Gross expenses | 1.02 %* | 1.01 %* | 1.06 %* | 1.13 %* | 1.14 %* | 1.08 %*,6 |
Net expenses | 0.86 %* | 0.86 %* | 0.87 %* | 0.86 %* | 0.86 %* | 0.86 %*,6 |
Net investment income | 1.78 %* | 1.32 %* | 1.36 %* | 1.40 %* | 1.74 %* | 1.17 %*,6 |
Supplemental data | ||||||
Portfolio turnover rate7 | 106 % | 111 % | 137 % | 13 % | 109 % | 189 % |
Net assets, end of period (000s omitted) | $12,949 | $18,332 | $25,026 | $21,628 | $21,316 | $31,610 |
* | Ratios include only the net expenses allocated from the affiliated Master Portfolios and do not include expenses from any other affiliated Underlying Funds. Net expenses allocated from the affiliated Master Portfolios included in the ratios were as follows: |
Year ended May 31, 2023 | 0.35% |
Year ended May 31, 2022 | 0.34% |
Year ended May 31, 2021 | 0.38% |
Year ended May 31, 20201 | 0.45% |
Year ended April 30, 2020 | 0.44% |
Year ended April 30, 2019 | 0.38% |
1 | For the one month ended May 31, 2020. The Fund changed its fiscal year end from April 30 to May 31, effective May 31, 2020. |
2 | Calculated based upon average shares outstanding |
3 | Returns for periods of less than one year are not annualized. |
4 | During the year ended May 31, 2023, the Fund received payments from a service provider which had a 1.28% impact on the total return. |
5 | For year ended May 31, 2021, the Fund received a payment from an affiliate which had a 0.90% impact on the total return. |
6 | Ratios did not include any expenses from Asset Allocation Trust or its investments in underlying funds. Asset Allocation Trust did not have any net expenses. |
7 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the affiliated Underlying Funds and unaffiliated securities and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
Allspring Asset Allocation Fund | 23
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | Year ended April 30 | |||||
Institutional Class | 2023 | 2022 | 2021 | 20201 | 2020 | 2019 |
Net asset value, beginning of period | $13.60 | $16.94 | $13.61 | $13.14 | $13.52 | $14.36 |
Net investment income | 0.25 2 | 0.24 2 | 0.24 | 0.02 2 | 0.26 2 | 0.19 2 |
Net realized and unrealized gains (losses) on investments | (0.44 ) | (1.20 ) | 3.74 | 0.45 | (0.38 ) | 0.05 |
Total from investment operations | (0.19 ) | (0.96 ) | 3.98 | 0.47 | (0.12 ) | 0.24 |
Distributions to shareholders from | ||||||
Net investment income | (0.35 ) | (0.24 ) | (0.46 ) | 0.00 | (0.10 ) | (0.11 ) |
Net realized gains | (0.37 ) | (2.14 ) | (0.19 ) | 0.00 | (0.16 ) | 0.97 |
Tax basis return of capital | (0.12 ) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (0.84 ) | (2.38 ) | (0.65 ) | 0.00 | (0.26 ) | (1.08 ) |
Net asset value, end of period | $12.57 | $13.60 | $16.94 | $13.61 | $13.14 | $13.52 |
Total return3 | (1.21 )% | (7.10 )% | 29.76 % | 3.58 % | (1.01 )% | 2.39 % |
Ratios to average net assets (annualized) | ||||||
Gross expenses | 0.78 %* | 0.76 %* | 0.81 %* | 0.88 %* | 0.89 %* | 0.84 %*,4 |
Net expenses | 0.71 %* | 0.71 %* | 0.71 %* | 0.72 %* | 0.72 %* | 0.69 %*,4 |
Net investment income | 1.92 %* | 1.48 %* | 1.52 %* | 1.55 %* | 1.88 %* | 1.34 %*,4 |
Supplemental data | ||||||
Portfolio turnover rate5 | 106 % | 111 % | 137 % | 13 % | 109 % | 189 % |
Net assets, end of period (000s omitted) | $167,088 | $218,479 | $266,822 | $231,652 | $227,529 | $311,958 |
* | Ratios include only the net expenses allocated from the affiliated Master Portfolios and do not include expenses from any other affiliated Underlying Funds. Net expenses allocated from the affiliated Master Portfolios included in the ratios were as follows: |
Year ended May 31, 2023 | 0.35% |
Year ended May 31, 2022 | 0.34% |
Year ended May 31, 2021 | 0.38% |
Year ended May 31, 20201 | 0.45% |
Year ended April 30, 2020 | 0.45% |
Year ended April 30, 2019 | 0.38% |
1 | For the one month ended May 31, 2020. The Fund changed its fiscal year end from April 30 to May 31, effective May 31, 2020. |
2 | Calculated based upon average shares outstanding |
3 | Returns for periods of less than one year are not annualized. |
4 | Ratios did not include any expenses from Asset Allocation Trust or its investments in underlying funds. Asset Allocation Trust did not have any net expenses. |
5 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the affiliated Underlying Funds and unaffiliated securities and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
24 | Allspring Asset Allocation Fund
Notes to financial statements
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 Asset Allocation Fund (the “Fund”) which is a diversified series of the Trust.
The Fund is a fund-of-funds that invests in various affiliated mutual funds (“Underlying Funds”) employing a multi-asset, multi-style investment approach designed to reduce the price and return volatility of the Fund and to provide more consistent returns. The Fund may also invest directly in securities. The Underlying Funds incur separate expenses in seeking to achieve their investment objectives. Investments in affiliated Underlying Funds may also include investments in one or more separate diversified portfolios (collectively, the “affiliated Master Portfolios”) of Allspring Master Trust, a registered open-end management investment company. Each affiliated Master Portfolio directly acquires portfolio securities and the Fund acquires an indirect interest in those securities. The Fund accounts for its investments in the affiliated Master Portfolios as partnership investments and records on a daily basis its share of the affiliated Master Portfolio’s income, expense and realized and unrealized gains and losses. The financial statements of the affiliated Master Portfolios are presented in separate financial statements and may be obtained free of charge by contacting Investor Services or by visiting the SEC website at sec.gov. The financial statements of the affiliated Master Portfolios are filed with the SEC under Allspring Master Trust. The financial statements for all other affiliated Underlying Funds are also publicly available on the SEC website at sec.gov.
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.
Investments in the affiliated Master Portfolios are valued daily based on the Fund’s proportionate share of each affiliated Master Portfolio’s net assets, which are also valued daily.
Equity securities, exchange-traded funds 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 underlying mutual funds (other than those listed on a foreign or domestic exchange or market) are valued at net asset per share as reported by the Underlying Funds as of the close of the regular trading on the New York Stock Exchange on each day the exchange is open for trading.
Investments which are not valued using any of 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.
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 and on a specified date. The Fund may buy and sell futures contracts in order to gain exposure to, or protect against, changes in interest rates, security values and foreign exchange rates and is subject to interest rate risk, equity price risk and foreign currency 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 received 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
Allspring Asset Allocation Fund | 25
Notes to financial statements
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.
Investment transactions, income and expenses
Investments in the affiliated Master Portfolios are recorded on a trade date basis. The Fund records daily its proportionate share of the affiliated Master Portfolio’s income, expenses and realized and unrealized gains or losses. The Fund also accrues its own expenses.
Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.
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 May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $1,264,526,977 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $49,940,846 |
Gross unrealized losses | (23,097,446 ) |
Net unrealized gains | $26,843,400 |
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. At May 31, 2023, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statements of Assets and Liabilities:
Paid-in capital | Total distributable loss |
$(7,538 ) | $7,538 |
As of May 31, 2023, the Fund had capital loss carryforwards which consist of $29,344,768 in short-term capital losses.
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.
26 | Allspring Asset Allocation Fund
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 May 31, 2023:
Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
Assets | ||||
Investments in: | ||||
Investment companies | $299,284,585 | $0 | $0 | $299,284,585 |
Investments measured at net asset value* | 985,605,605 | |||
299,284,585 | 0 | 0 | 1,284,890,190 | |
Futures contracts | 11,983,439 | 0 | 0 | 11,983,439 |
Total assets | $311,268,024 | $0 | $0 | $1,296,873,629 |
Liabilities | ||||
Futures contracts | $5,503,252 | $0 | $0 | $5,503,252 |
Total liabilities | $5,503,252 | $0 | $0 | $5,503,252 |
* | Investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been categorized in the fair value hierarchy. The fair value amount presented in the table is intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Statement of Assets and Liabilities. The Fund’s investments in the affiliated Master Portfolios are valued at $985,605,605. Each affiliated Master Portfolio does not have a redemption period notice, can be redeemed daily and does not have any unfunded commitments. |
Futures contracts are reported at their cumulative unrealized gains (losses) at measurement date as reported in the tables 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.
For the year ended May 31, 2023, the Fund did not have any transfers into/out of Level 3.
The investment objective of each affiliated Master Portfolio is as follows:
Affiliated Master Portfolio | Investment objective |
Allspring C&B Large Cap Value Portfolio | Seeks maximum long-term total return (current income and capital appreciation), consistent with minimizing risk to principal |
Allspring Core Bond Portfolio | Seeks total return, consisting of income and capital appreciation |
Allspring Disciplined International Developed Markets Portfolio | Seeks long-term capital appreciation |
Allspring Diversified Large Cap Growth Portfolio | Seeks long-term capital appreciation |
Allspring Emerging Growth Portfolio | Seeks long-term capital appreciation |
Allspring Factor Enhanced Emerging Markets Equity Portfolio | Seeks long-term capital appreciation |
Allspring Factor Enhanced International Equity Portfolio | Seeks long-term capital appreciation |
Allspring Large Company Value Portfolio | Seeks long-term capital appreciation |
Allspring Managed Fixed Income Portfolio | Seeks consistent fixed-income returns |
Allspring Real Return Portfolio | Seeks returns that exceed the rate of inflation over the long-term |
Allspring Small Company Growth Portfolio | Seeks long-term capital appreciation |
Allspring Small Company Value Portfolio | Seeks long-term capital appreciation |
Allspring Asset Allocation Fund | 27
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 | 0.300 % |
Next $500 million | 0.280 |
Next $2 billion | 0.260 |
Next $2 billion | 0.240 |
Next $5 billion | 0.230 |
Over $10 billion | 0.220 |
For the year ended May 31, 2023, the advisory fee was equivalent to an annual rate of 0.28% 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 0.10% and declining to 0.05% as the average daily net assets of the Fund increase.
Allspring Funds Management also serves as the adviser to each affiliated Master Portfolio and is entitled to receive a fee from each affiliated Master Portfolio for those services.
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 |
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. Net expenses from the affiliated Master Portfolios are included in the expense caps. Allspring Funds Management has contractually committed through September 30, 2023 to waive fees and/or reimburse expenses to the extent necessary to cap expenses. Prior to or after the commitment expiration date,
28 | Allspring Asset Allocation Fund
Notes to financial statements
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 May 31, 2023, the contractual expense caps are as follows:
EXPENSE RATIO CAPS | |
Class A | 1.13 % |
Class C | 1.88 |
Class R | 1.38 |
Administrator Class | 0.95 |
Institutional Class | 0.80 |
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 May 31, 2023, Allspring Funds Distributor received $12,443 from the sale of Class A shares and $3 in contingent deferred sales charges from redemptions of Class C shares. No contingent deferred sales charges were incurred by Class A shares for the year ended May 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.
5.
INVESTMENT PORTFOLIO TRANSACTIONS
The Fund seeks to achieve its investment objective by investing in various affiliated Master Portfolios. Purchases and sales related to these investments have been calculated by aggregating the results of multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio at the end of the period by the corresponding affiliated Master Portfolio’s purchases and sales. Purchase and sales in affiliated Underlying Funds and unaffiliated securities in which the Fund invests are actual purchases and sales of those investments. Purchases and sales of investments, excluding short-term securities, for the year ended May 31, 2023 were as follows:
Purchases at cost | Sales proceeds | ||
U.S. government | Non-U.S. government | U.S. government | Non-U.S. government |
$257,512,113 | $1,170,878,198 | $261,898,706 | $1,300,949,694 |
6.
DERIVATIVE TRANSACTIONS
During the year ended May 31, 2023, the Fund entered into futures contracts for hedging purposes. The Fund had an average notional amount of $253,435,396 in long futures contracts and $204,261,057 in short futures contracts during the year ended May 31, 2023.
A summary of the location of derivative instruments on the financial statements by primary risk exposure is outlined in the following tables.
The fair value of derivative instruments as of May 31, 2023 by primary risk type on the Statement of Assets and Liabilities was as follows for the Fund:
Interest rate risk | Equity risk | Foreign currency risk | Total | |
Asset derivatives | ||||
Futures contracts | $635,393 * | $11,348,046 * | $0 * | $11,983,439 |
Liability derivatives | ||||
Futures contracts | $478,977 * | $2,955,296 * | $2,068,979 * | $5,503,252 |
* | Amount represents the cumulative unrealized gains (losses) as reported in the table following the Portfolio of Investments. For futures contracts, only the current day’s variation margin as of May 31, 2023 is reported separately on the Statement of Assets and Liabilities. |
Allspring Asset Allocation Fund | 29
Notes to financial statements
The effect of derivative instruments on the Statement of Operations for the year ended May 31, 2023 was as follows:
Interest rate risk | Equity risk | Foreign currency risk | Total | |
Net realized gains (losses) on derivatives | ||||
Futures contracts | $(145,110 ) | $(3,851,601 ) | $(5,926,776 ) | $(9,923,487 ) |
Net change in unrealized gains (losses) on derivatives | ||||
Futures contracts | $108,058 | $8,630,221 | $(2,455,812 ) | $6,282,467 |
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 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 May 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 May 31, 2023 and May 31, 2022 were as follows:
Year ended May 31 | ||
2023 | 2022 | |
Ordinary income | $31,441,236 | $145,194,955 |
Long-term capital gain | 39,171,437 | 103,319,490 |
Tax basis return of capital | 12,958,102 | 0 |
As of May 31, 2023, the components of distributable earnings on a tax basis were as follows:
Unrealized gains | Capital loss carryforward |
$26,843,400 | $(29,344,768 ) |
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.
30 | Allspring Asset Allocation 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 Asset Allocation Fund (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of May 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 three-year period then ended May 31, 2023, the period from May 1, 2020 to May 31, 2020, and for each of the years in the two-year period ended April 30, 2020. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of May 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 three-year period then ended May 31, 2023, the period from May 1, 2020 to May 31, 2020, and for each of the years in the two-year period ended April 30, 2020, 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 May 31, 2023, by correspondence with the custodian, transfer agents and brokers. 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
July 27, 2023
Allspring Asset Allocation Fund | 31
Other information (unaudited)
Other information
Tax information
For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 32% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended May 31, 2023.
Pursuant to Section 852 of the Internal Revenue Code, $39,171,437 was designated as a 20% rate gain distribution for the fiscal year ended May 31, 2023.
Pursuant to Section 854 of the Internal Revenue Code, $18,854,311 of income dividends paid during the fiscal year ended May 31, 2023 has been designated as qualified dividend income (QDI).
For the fiscal year ended May 31, 2023, $13,097,035 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 May 31, 2023, 9% of the ordinary income distributed was derived from interest on U.S. government securities.
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.
32 | Allspring Asset Allocation 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 128 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 |
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 |
1
The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by call 1-800-222-8222 or by visiting the website at allspringglobal.com.
Allspring Asset Allocation Fund | 33
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 |
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. |
34 | Allspring Asset Allocation Fund
Other information (unaudited)
Officers1
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 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 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 Asset Allocation Fund | 35
Other information (unaudited)
Board consideration of investment management and sub-advisory agreements:
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (the “Board”) of Allspring Funds Trust (the “Trust”) must determine annually whether to approve the continuation of the Trust’s investment management and sub-advisory agreements. In this regard, at a Board meeting held on May 15-17, 2023 (the “Meeting”), the Board, all the members of which have no direct or indirect interest in the investment management and sub-advisory agreements and are not “interested persons” of the Trust, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for the Allspring Asset Allocation Fund (the “Fund”): (i) an investment management agreement (the “Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Allspring Global Investments, LLC (the “Sub-Adviser”), an affiliate of Allspring Funds Management. The Management Agreement and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
At the Meeting, the Board considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at a Board meeting held in April 2023, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Board has adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Board in the discharge of its duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
The Board noted that it initially approved the Advisory Agreements at a Board meeting held in May 2021, each for a two-year term, in advance of the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. (the “Transaction”). The Trustees also noted that, while they did not specifically consider the continuation of the Advisory Agreements in 2022 as a result of the two-year term that was approved in 2021, the Trustees received and considered certain information at a Board meeting held in April 2022 that was applicable to the Advisory Agreements, including an overview and financial review of the Allspring Global Investments business, information regarding certain ancillary agreements that were approved by the Board at the April 2022 Board meeting, and comparative data regarding Fund fees and expenses.
In providing information to the Board, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Board’s annual contract renewal process earlier in 2023. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Board considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Board reviewed reports of Allspring Funds Management at each of its quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Board and the teams mentioned above confer with portfolio managers at various times throughout the year. The Board did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term. The Board considered the approval of the Advisory Agreements for the Fund as part of its consideration of agreements for funds across the complex, but its approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Board in support of its approvals.
Nature, Extent, and Quality of Services
The Board received and considered various information regarding the nature, extent, and quality of services provided to the Fund by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business. The Board also considered information about retention arrangements with respect to key personnel of Allspring Global Investments that were put in place in connection with the Transaction. The Board took into account information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the Transaction under a transition services agreement and the anticipated timeline for exiting the transition services agreement. In addition, the Board received and considered information about the full range of services provided to the Fund by Allspring Funds Management and its affiliates.
The Board considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Fund. The Board evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
36 | Allspring Asset Allocation Fund
Other information (unaudited)
The Board further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Board received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, and Allspring Funds Management’s role as administrator of the Fund’s liquidity risk management program, and the Fund’s derivatives risk management program. The Board also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund Investment Performance and Expenses
The Board considered the investment performance results for the Fund over various time periods ended December 31, 2022. The Board considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to the Fund (the “Universe”), and in comparison to the Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the mutual funds in the performance Universe. The Board noted that the investment performance of the Fund (Administrator Class) was higher than the average investment performance of the Universe for the one- and three-year periods under review and lower than the average investment performance of the Universe for the five- and ten-year periods under review. The Board also noted that the investment performance of the Fund was higher than the investment performance of its benchmark index, the Asset Allocation Blended Index, for the one- and three-year periods under review, in range of the investment performance of its benchmark index for the five-year period under review and lower than the investment performance of its benchmark index for the ten-year period under review. The Board received information concerning, and discussed factors contributing to, the underperformance of the Fund relative to the Universe and benchmark for the periods identified above. The Board took note of the explanations for the relative underperformance during these periods, including with respect to investment decisions and market factors that affected the Fund’s investment performance.
The Board also received and considered information regarding the Fund’s net operating expense ratios and their various components, including actual management fees, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Board considered these ratios in comparison to the median ratios of funds in class-specific expense groups that were determined by Broadridge to be similar to the Fund (the “Groups”). The Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Groups and an explanation of how funds comprising expense groups and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Board noted that the net operating expense ratios of the Fund were lower than the median net operating expense ratios of the expense Groups for the Administrator Class, in range of the median net operating expense ratios of the expense Groups for the Institutional Class and higher than the median net operating expense ratios of the expense Groups for the Class R shares and the Class A shares. The Board noted that Allspring Funds Management had agreed to reduce the net operating expense caps for the Fund’s Class A shares.
The Board took into account the Fund’s investment performance and expense information provided to it among the factors considered in deciding to re-approve the Advisory Agreements.
Investment Management and Sub-Advisory Fee Rates
The Board reviewed and considered the contractual fee rates payable by the Fund to Allspring Funds Management under the Management Agreement, as well as the contractual fee rates payable by the Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which include, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rates”). The Board also reviewed and considered the contractual investment sub-advisory fee rates that are payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services. It was noted that advisory fee waivers, if any, are at the fund level and not class level.
Among other information reviewed by the Board was a comparison of the Fund’s Management Rates with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Board noted that the Management Rates of the Fund were in range of the sum of these average rates for the Fund’s expense Groups for all share classes, except that the Management Rates of the Fund were higher than the sum of these average rates for the Fund’s expense Groups for the Class A shares.
The Board also received and considered information about the portion of the total management fee that was retained by Allspring Funds Management after payment of the fee to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of this amount, the Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services. Given the affiliation between Allspring Funds Management and the Sub-Adviser, the Board ascribed limited relevance to the allocation of fees between them.
The Board also received and considered information about the nature and extent of services offered and fee rates charged by Allspring Funds Management and the Sub-Adviser to other types of clients with investment strategies similar to those of the Fund. In this regard, the Board received information about the significantly greater scope of services, and compliance, reporting and other legal burdens and risks of managing proprietary mutual funds compared with those associated with managing assets of other types of clients, including third-party sub-advised fund clients and non-mutual fund clients such as institutional separate accounts.
Allspring Asset Allocation Fund | 37
Other information (unaudited)
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board determined that the compensation payable to Allspring Funds Management under the Management Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
Profitability
The Board received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole. The Board noted that the Sub-Adviser’s profitability information with respect to providing services to the Fund and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses and differences in how Allspring Global Investments calculates its pre-tax profit metric versus the methodology used when Allspring Funds Management was part of Wells Fargo. It was noted that the impact of such differences had only minor impact on the financial results presented. Among other things, the Board noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Based on its review, the Board did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Fund to be at a level that would prevent it from approving the continuation of the Advisory Agreements.
Economies of Scale
The Board received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Fund, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with Fund shareholders. The Board noted the existence of breakpoints in the Fund’s management fee structure, which operate generally to reduce the Fund’s expense ratios as the Fund grows in size, and the size of the Fund in relation to such breakpoints. The Board considered that in addition to management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways, including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
The Board concluded that Allspring Funds Management’s arrangements with respect to the Fund, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Fund and its shareholders.
Other Benefits to Allspring Funds Management and the Sub-Adviser
The Board received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, as a result of their relationships with the Fund. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Fund and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Fund. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it.
The Board also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser and fees earned in the past by Allspring Funds Management and the Sub-Adviser from managing a private investment vehicle for the fund complex’s securities lending collateral.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board did not find that any ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, were unreasonable.
Conclusion
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term.
38 | Allspring Asset Allocation Fund
Other information (unaudited)
Liquidity risk management program
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Allspring Funds Trust (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) on behalf of each of its series (other than the series that operate as money market funds), including the Fund, which is reasonably designed to assess and manage the Fund’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund. The Trust’s Board of Trustees (the “Board”) previously approved the designation of Allspring Funds Management, LLC (“Allspring Funds Management”), the Fund’s investment manager, to administer the Program, and Allspring Funds Management has established a Liquidity Risk Management Council (the “Council”) composed of personnel from multiple departments within Allspring Funds Management and its affiliates to assist Allspring Funds Management in the administration of the Program.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent the Fund does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if the Fund has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s “highly liquid investments” below its HLIM; and (6) periodic reporting to the Board.
At a meeting of the Board held on May 16-17, 2023, the Board received and reviewed a written report (the “Report”) from Allspring Funds Management that, among other things, addressed the operation of the Program and assessed its adequacy and effectiveness for the period from January 1, 2022 through December 31, 2022 (the “Reporting Period”). The Report noted significant liquidity events impacting the Funds related to extended foreign market holidays as well as the difficulty of trading and settlement of most Russia-related securities due to sanctions activity. The Report noted that there were no material changes to the Program during the Reporting Period.
Allspring Funds Management determined in the Report that the Program has been implemented and operates effectively to manage the Fund’s, including the Fund’s, liquidity risk, and Allspring Funds Management continues to believe that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s liquidity developments.
There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other risks to which an investment in the Fund may be subject.
Allspring Asset Allocation Fund | 39
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.
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-06072023-fn6cvcmd 07-23
AR4312 05-23
AR4312 05-23
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The views expressed and any forward-looking statements are as of May 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 C&B Large Cap Value Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring C&B Large Cap Value Fund for the 12-month period that ended May 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. The market was focused on persistently high inflation 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. Markets received a boost in December with the removal of China’s strict COVID-19 lockdowns. In March 2023, a new wave of market anxiety resulted from several bank failures and unease over the possibility of more rate hikes. However, investors regained confidence and markets finished the period in relative calm.
For the 12-month period, stocks and bonds—both domestic U.S. and global—had mixed results. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 2.92%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 lost 1.41%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a return of -8.49%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -2.14%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 6.49%, the Bloomberg Municipal Bond Index6 gained 0.49%, and the ICE BofA U.S. High Yield Index7 returned -0.09%.
High inflation and central bank rate hikes rocked markets.
In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Federal Reserve (Fed) raised its short-term rate by 0.75% in June. Meanwhile, the U.S. unemployment rate remained historically low 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 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, 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.
“ In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring 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 the 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.
2 | Allspring C&B Large Cap Value Fund
Letter to shareholders (unaudited)
August was yet another broadly challenging month for financial markets. 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 was the resilient U.S. jobs 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.
In September, all asset classes suffered further 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. 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 increasing 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 declining overall in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever, with generally flat 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 wound 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.
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 had 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 (ECB) both raised rates by 0.50%.
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 C&B Large Cap Value Fund | 3
Letter to shareholders (unaudited)
“ 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 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 banking industry turmoil created an additional challenge for central banks in balancing inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. 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.
Economic data released in April pointed to global resilience, as Purchasing Managers Indexes1 in the U.S., U.K., and eurozone beat expectations, and China reported first-quarter annualized economic growth of 4.5%. Despite banking industry stress, developed market stocks had monthly gains. The U.S. labor market remained strong, with a 3.5% jobless rate and monthly payroll gains above 200,000. However, uncertainty and inflationary concerns weighed on investors in the U.S. and abroad.
May was marked by a divergence between expanding activity in services and an overall contraction in manufacturing activity in the U.S., U.K., and eurozone. Core inflation remained elevated in the U.S. and Europe, despite the ongoing efforts of the Fed and ECB, which included rate hikes of 0.25% by both in May. Stubborn inflation and the resilient U.S. labor market led to expectations of further interest rate hikes, overall monthly declines across bond indexes, and mixed results for stocks in May. Investor worries over a U.S. debt ceiling impasse were modest, and market confidence was buoyed by a deal in late May to avert a potential U.S. debt default.
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 C&B Large Cap Value Fund
Letter to shareholders (unaudited)
Notice to Shareholders |
Beginning in July 2024, the Fund will be required by the Securities and Exchange Commission to send shareholders a paper copy of a new tailored shareholder report in place of the full shareholder report that you are now receiving. The tailored shareholder report will contain concise information about the Fund, including certain expense and performance information and fund statistics. If you wish to receive this new tailored shareholder report electronically, please follow the instructions on the back cover of this report. |
Other information that is currently included in the shareholder report, such as the Fund’s financial statements, will be available online and upon request, free of charge, in paper or electronic format. |
Allspring C&B Large Cap Value Fund | 5
Performance highlights (unaudited)
Performance highlights
Investment objective | The Fund seeks maximum long-term total return (current income and capital appreciation), consistent with minimizing risk to principal. |
Manager | Allspring Funds Management, LLC |
Subadviser for the affiliated master portfolio* | Cooke & Bieler, L.P. |
Portfolio managers | Andrew B. Armstrong, CFA, Wesley Lim, CFA, Steve Lyons, CFA, Michael M. Meyer, CFA, Edward W. O’ Connor, CFA, R.James O’Neil, CFA, Mehul Trivedi, CFA, William Weber, CFA |
Average annual total returns (%) as of May 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 | Net2 | |
Class A (CBEAX) | 7-26-2004 | -9.67 | 6.43 | 8.27 | -4.19 | 7.70 | 8.92 | 1.18 | 1.07 |
Class C (CBECX) | 7-26-2004 | -5.85 | 6.89 | 8.27 | -4.85 | 6.89 | 8.27 | 1.93 | 1.82 |
Class R6 (CBEJX)3 | 10-31-2016 | – | – | – | -3.75 | 8.16 | 9.34 | 0.76 | 0.65 |
Administrator Class (CBLLX) | 7-26-2004 | – | – | – | -4.18 | 7.77 | 9.04 | 1.11 | 1.00 |
Institutional Class (CBLSX) | 7-26-2004 | – | – | – | -3.92 | 8.03 | 9.30 | 0.86 | 0.75 |
Russell 1000® Value Index4 | – | – | – | – | -4.55 | 6.78 | 8.42 | – | – |
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 September 30, 2023 (September 30, 2024 for Class A and Class C), to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 1.07% for Class A, 1.82% for Class C, 0.65% for Class R6, 1.00% for Administrator Class and 0.75% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any) from funds in which the affiliated master portfolio invests, and extraordinary expenses are excluded from the expense caps. Net expenses from the affiliated master portfolio are included in 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 1000® Value Index measures the performance of those Russell 1000 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. Consult the Fund’s prospectus for additional information on these and other risks.
* | The Fund is a feeder fund in a master-feeder structure that invests substantially all of its assets in a single affiliated master portfolio of the Allspring Master Trust with a substantially identical investment objective and substantially similar investment strategies. References to the investment activities of the Fund are intended to refer to the investment activities of the affiliated master portfolio in which it invests. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. | |
6 | Allspring C&B Large Cap Value Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of May 31, 20231 |
1 | The chart compares the performance of Class A shares for the most recent ten years with the Russell 1000® 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 C&B Large Cap Value Fund | 7
Performance highlights (unaudited)
MANAGER’S DISCUSSION
Fund highlights
•The Fund (Class A, excluding sales charges) outperformed its benchmark, the Russell 1000 Value Index, for the 12-month period that ended May 31, 2023.
•Stock selection in financials and health care, as well as an overweight to communication services, added to relative performance.
•Stock selection in consumer discretionary and communication services, as well as an overweight position in financials, detracted from relative performance.
Portfolio overview and updates
The 12-month period that ended May 31, 2023, was another volatile one, with chaotic macroeconomic challenges, such as ever-present recession worries, significant Federal Reserve (Fed) rate hikes, continued inflation concerns, and a banking crisis, leading the Russell 1000 Value Index lower over the period. At the start of 2023, investors indulged the bullish peak inflation and soft-landing narratives that emerged in late 2022, fueling a broad initial rally. Higher-than-expected inflation reports in February, though, spurred a retreat when hawkish Fed commentary pushed interest rates higher. By March, that retreat further deteriorated into a deeper sell-off when several regional banks unexpectedly failed. Almost as quickly, fear gave way to optimism that the crisis would not be systemic. The Fed injected substantial liquidity into the banking system and investors embraced the possibility that central banks would change policy course sooner than later. Amid that backdrop, the strategy outperformed the benchmark. The sector allocation was significantly positive, while poor stock selection partially offset those results.
Ten largest holdings (%) as of May 31, 20231 | |
Brookfield Corp. Class A | 3.35 |
Arrow Electronics, Inc. | 3.21 |
AerCap Holdings NV | 3.17 |
Open Text Corp. | 3.12 |
TE Connectivity Ltd. | 2.86 |
State Street Corp. | 2.77 |
Medtronic PLC | 2.72 |
Omnicom Group, Inc. | 2.69 |
London Stock Exchange Group PLC | 2.68 |
Johnson & Johnson | 2.60 |
1 | Each holding represents the Fund’s allocable portion of the affiliated master portfolio security. Figures represent each holding as a percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
Over the course of the period, turnover was consistent with historical averages. Stock initiations occurred across multiple sectors and included Alphabet Inc.; Bank of America Corp.; Synchrony Financial; CBRE Group, Inc.; ConocoPhillips; Discover Financial Services; EOG Resources, Inc.; LKQ Corp.; Open Text Corp.; and Warner Music Group Corp.
Making room for these holdings, we also eliminated positions across multiple sectors, including 3M Co.; Amdocs Ltd.; General Mills, Inc.; Leidos Holdings, Inc.; PACCAR Inc.; Progressive Corp.; UnitedHealth Group Inc.; Brookfield Asset Management; Alleghany Corp.; Synchrony Financial; and Wells Fargo & Company.
Contributors included financials stock selection and an overweight to communication services.
While stock selection was negative as a whole, a number of bright spots within different sectors contributed to performance. The overweight to financials was the biggest contributor, with insurance company Arch Capital Group performing best within the sector and the portfolio overall. Progressive Corp. and London Stock Exchange also added to results within financials. Health care and consumer staples companies were additional tailwinds, particularly HCA Healthcare and General Mills, respectively. Allocation effect was broadly positive, with 10 out of 11 sectors adding to relative performance. Best among these sectors was an overweight to communication services, one of the top-performing sectors within the benchmark, followed by an underweight to energy and real estate, two of the weaker performers within the benchmark.
Detractors included stock selection in the consumer discretionary sector.
Stock selection detracted from relative performance over the course of the trailing 12-month period. Consumer discretionary holdings were by far the most significant headwind to results, with Hanesbrands detracting the most within the sector and the portfolio. Also, within the consumer discretionary sector, CarMax and Hasbro were additional detractors from performance as investors grappled with recession concerns amid mixed economic data. Stock selection within communication services and energy also hurt results, particularly Verizon Communications and Williams Companies*. From an allocation perspective, the overweight to financials posed a headwind as the sector saw instances of indiscriminate selling following the collapse of multiple regional banks. While the portfolio is significantly overweight financials, it is only modestly overweight banks, and we believe those in the portfolio are better capitalized and more conservatively positioned than the broader industry.
*
This security was no longer held at the end of the reporting period.
8 | Allspring C&B Large Cap Value Fund
Performance highlights (unaudited)
Sector allocation as of May 31, 20231 |
1 | Figures represent the sector allocation of the affiliated master portfolio as a percentage of the long-term investments of the affiliated master portfolio. These amounts are subject to change and may have changed since the date specified. |
Outlook
Having shrugged off the failure of several regional banks and the forced consolidation of a large Swiss banking house, markets ended the period showing strong momentum. For the moment, investors seem inclined to take a constructive view of most developments, with strong data taken as a sign of economic resilience and weak data, or signs of financial stress seen as evidence that the Fed will soon end its yearlong series of rate increases. There are clearly risks to this buoyant mood, however, as the effects of the Fed’s dramatic tightening program are still materializing, and we think more negative surprises seem likely. That said, we have long maintained that it is more productive to focus on company-specific fundamentals than to guess at macroeconomic outcomes. As always, we believe competitively advantaged businesses that create value for their customers, are conservatively managed, and are appropriately financed will generate attractive returns for their shareholders over time if purchased judiciously. Viewed in this light, we believe economic dislocation creates more opportunities than risks for patient and disciplined investors.
Allspring C&B Large Cap Value Fund | 9
Fund expenses (unaudited)
Fund expenses
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 December 1, 2022 to May 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 the 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 12-1-2022 | Ending account value 5-31-2023 | Expenses paid during the period1, 2 | Annualized net expense ratio2 | |
Class A | ||||
Actual | $1,000.00 | $999.62 | $5.38 | 1.08 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,019.55 | $5.44 | 1.08 % |
Class C | ||||
Actual | $1,000.00 | $999.59 | $9.12 | 1.83 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,015.81 | $9.20 | 1.83 % |
Class R6 | ||||
Actual | $1,000.00 | $999.64 | $3.24 | 0.65 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.69 | $3.28 | 0.65 % |
Administrator Class | ||||
Actual | $1,000.00 | $999.62 | $4.99 | 1.00 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,019.95 | $5.04 | 1.00 % |
Institutional Class | ||||
Actual | $1,000.00 | $999.63 | $3.74 | 0.75 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.19 | $3.78 | 0.75 % |
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).
2 Amounts reflect net expenses allocated from the affiliated Master Portfolio in which the Fund invests.
10 | Allspring C&B Large Cap Value Fund
Portfolio of investments—May 31, 2023
Portfolio of investments
Value | ||||||
Investment companies: 99.94% | ||||||
Affiliated master portfolio: 99.94% | ||||||
Allspring C&B Large Cap Value Portfolio | $199,030,307 | |||||
Total investment companies (Cost $173,821,522) | 199,030,307 | |||||
Total investments in securities (Cost $173,821,522) | 99.94 % | 199,030,307 | ||||
Other assets and liabilities, net | 0.06 | 119,203 | ||||
Total net assets | 100.00 % | $199,149,510 | ||||
Transactions with the affiliated Master Portfolio were as follows:
% of ownership, beginning of period | % of ownership, end of period | Net realized gains (losses) on investments allocated from affiliated Master Portfolio | Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolio | Dividends allocated from affiliated Master Portfolio | Interest allocated from affiliated Master Portfolio | Affiliated Income Allocated from affiliated Master Portfolio | Value, end of period | |
Allspring C&B Large Cap Value Portfolio | 79.89 % | 78.60 % | $19,848,834 | $(33,458,109 ) | $4,755,544 | $201 | $148,872 | $199,030,307 |
The accompanying notes are an integral part of these financial statements.
Allspring C&B Large Cap Value Fund | 11
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in affiliated Master Portfolio, at value (cost $173,821,522) | $199,030,307 |
Receivable for Fund shares sold | 182,695 |
Receivable from manager | 25,062 |
Prepaid expenses and other assets | 81,799 |
Total assets | 199,319,863 |
Liabilities | |
Payable for Fund shares redeemed | 102,030 |
Administration fees payable | 26,895 |
Shareholder servicing fees payable | 18,575 |
Distribution fee payable | 2,359 |
Trustees’ fees and expenses payable | 504 |
Accrued expenses and other liabilities | 19,990 |
Total liabilities | 170,353 |
Total net assets | $199,149,510 |
Net assets consist of | |
Paid-in capital | $164,340,365 |
Total distributable earnings | 34,809,145 |
Total net assets | $199,149,510 |
Computation of net asset value and offering price per share | |
Net assets–Class A | $77,198,227 |
Shares outstanding–Class A1 | 6,703,862 |
Net asset value per share–Class A | $11.52 |
Maximum offering price per share – Class A2 | $12.22 |
Net assets–Class C | $3,471,192 |
Shares outstanding–Class C1 | 306,763 |
Net asset value per share–Class C | $11.32 |
Net assets–Class R6 | $15,504,522 |
Shares outstanding–Class R61 | 1,338,256 |
Net asset value per share–Class R6 | $11.59 |
Net assets–Administrator Class | $4,292,230 |
Shares outstanding–Administrator Class1 | 371,511 |
Net asset value per share–Administrator Class | $11.55 |
Net assets–Institutional Class | $98,683,339 |
Shares outstanding–Institutional Class1 | 8,513,433 |
Net asset value per share–Institutional Class | $11.59 |
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.
12 | Allspring C&B Large Cap Value Fund
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Dividends allocated from affiliated Master Portfolio (net of foreign withholding taxes of $107,495) | $4,755,544 |
Affiliated income allocated from affiliated Master Portfolio | 148,872 |
Interest allocated from affiliated Master Portfolio | 201 |
Expenses allocated from affiliated Master Portfolio | (1,571,119 ) |
Waivers allocated from affiliated Master Portfolio | 145,978 |
Total investment income | 3,479,476 |
Expenses | |
Management fee | 111,328 |
Administration fees | |
Class A | 178,189 |
Class C | 8,343 |
Class R6 | 5,862 |
Administrator Class | 6,606 |
Institutional Class | 141,971 |
Shareholder servicing fees | |
Class A | 212,130 |
Class C | 9,930 |
Administrator Class | 12,703 |
Distribution fee | |
Class C | 29,772 |
Custody and accounting fees | 7,535 |
Professional fees | 45,318 |
Registration fees | 36,664 |
Shareholder report expenses | 30,584 |
Trustees’ fees and expenses | 21,908 |
Other fees and expenses | 4,517 |
Total expenses | 863,360 |
Less: Fee waivers and/or expense reimbursements | |
Fund-level | (290,386 ) |
Class A | (8,079 ) |
Class C | (226 ) |
Administrator Class | (484 ) |
Institutional Class | (6,438 ) |
Net expenses | 557,747 |
Net investment income | 2,921,729 |
Realized and unrealized gains (losses) on investments | |
Net realized gains on investments allocated from affiliated Master Portfolio | 19,848,834 |
Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolio | (33,458,109 ) |
Net realized and unrealized gains (losses) on investments | (13,609,275 ) |
Net decrease in net assets resulting from operations | $(10,687,546 ) |
The accompanying notes are an integral part of these financial statements.
Allspring C&B Large Cap Value Fund | 13
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $2,921,729 | $2,669,791 | ||
Net realized gains on investments | 19,848,834 | 47,346,569 | ||
Net change in unrealized gains (losses) on investments | (33,458,109 ) | (53,785,190 ) | ||
Net decrease in net assets resulting from operations | (10,687,546 ) | (3,768,830 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class A | (16,304,617 ) | (12,919,436 ) | ||
Class C | (740,826 ) | (535,250 ) | ||
Class R6 | (3,797,016 ) | (6,057,662 ) | ||
Administrator Class | (1,047,406 ) | (841,849 ) | ||
Institutional Class | (21,328,025 ) | (17,599,026 ) | ||
Total distributions to shareholders | (43,217,890 ) | (37,953,223 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class A | 415,820 | 5,265,311 | 989,891 | 15,969,277 |
Class C | 96,897 | 1,168,445 | 43,159 | 682,181 |
Class R6 | 123,974 | 1,716,518 | 349,706 | 5,728,171 |
Administrator Class | 3,961 | 50,313 | 55,766 | 954,376 |
Institutional Class | 1,322,276 | 17,070,664 | 1,764,097 | 28,100,206 |
25,271,251 | 51,434,211 | |||
Reinvestment of distributions | ||||
Class A | 1,348,065 | 16,067,784 | 845,770 | 12,689,368 |
Class C | 63,426 | 740,826 | 36,313 | 535,250 |
Class R6 | 148,681 | 1,785,702 | 80,021 | 1,208,696 |
Administrator Class | 53,517 | 639,939 | 34,924 | 525,330 |
Institutional Class | 1,765,170 | 21,195,384 | 1,158,450 | 17,489,868 |
40,429,635 | 32,448,512 | |||
Payment for shares redeemed | ||||
Class A | (1,910,541 ) | (24,861,078 ) | (946,956 ) | (15,053,324 ) |
Class C | (134,315 ) | (1,653,300 ) | (76,840 ) | (1,207,888 ) |
Class R6 | (510,778 ) | (6,892,525 ) | (1,596,640 ) | (24,419,329 ) |
Administrator Class | (89,944 ) | (1,125,103 ) | (34,305 ) | (524,769 ) |
Institutional Class | (3,362,511 ) | (44,116,398 ) | (3,201,272 ) | (51,615,218 ) |
(78,648,404 ) | (92,820,528 ) | |||
Net decrease in net assets resulting from capital share transactions | (12,947,518 ) | (8,937,805 ) | ||
Total decrease in net assets | (66,852,954 ) | (50,659,858 ) | ||
Net assets | ||||
Beginning of period | 266,002,464 | 316,662,322 | ||
End of period | $199,149,510 | $266,002,464 | ||
The accompanying notes are an integral part of these financial statements.
14 | Allspring C&B Large Cap Value Fund
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $14.82 | $17.16 | $11.49 | $13.01 | $13.91 |
Net investment income | 0.15 1 | 0.11 | 0.10 | 0.12 | 0.11 |
Net realized and unrealized gains (losses) on investments | (0.71 ) | (0.34 ) | 6.29 | (0.33 ) | 0.02 |
Total from investment operations | (0.56 ) | (0.23 ) | 6.39 | (0.21 ) | 0.13 |
Distributions to shareholders from | |||||
Net investment income | (0.14 ) | (0.11 ) | (0.11 ) | (0.13 ) | (0.12 ) |
Net realized gains | (2.60 ) | (2.00 ) | (0.61 ) | (1.18 ) | (0.91 ) |
Total distributions to shareholders | (2.74 ) | (2.11 ) | (0.72 ) | (1.31 ) | (1.03 ) |
Net asset value, end of period | $11.52 | $14.82 | $17.16 | $11.49 | $13.01 |
Total return2 | (4.19 )% | (1.37 )% | 56.98 % | (3.61 )% | 1.33 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.22 % | 1.19 % | 1.24 % | 1.27 % | 1.23 % |
Net expenses | 1.08 % | 1.07 % | 1.07 % | 1.07 % | 1.08 % |
Net investment income | 1.13 % | 0.69 % | 0.73 % | 0.92 % | 0.83 % |
Supplemental data | |||||
Portfolio turnover rate3 | 29 % | 32 % | 38 % | 33 % | 47 % |
Net assets, end of period (000s omitted) | $77,198 | $101,496 | $102,332 | $70,680 | $79,172 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.64% |
Year ended May 31, 2022 | 0.64% |
Year ended May 31, 2021 | 0.64% |
Year ended May 31, 2020 | 0.64% |
Year ended May 31, 2019 | 0.65% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring C&B Large Cap Value Fund | 15
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $14.61 | $16.97 | $11.36 | $12.87 | $13.75 |
Net investment income (loss) | 0.05 1 | (0.01 ) | (0.03 ) | 0.02 1 | 0.01 1 |
Net realized and unrealized gains (losses) on investments | (0.69 ) | (0.35 ) | 6.25 | (0.35 ) | 0.03 |
Total from investment operations | (0.64 ) | (0.36 ) | 6.22 | (0.33 ) | 0.04 |
Distributions to shareholders from | |||||
Net investment income | (0.05 ) | 0.00 | 0.00 | 0.00 | (0.01 ) |
Net realized gains | (2.60 ) | (2.00 ) | (0.61 ) | (1.18 ) | (0.91 ) |
Total distributions to shareholders | (2.65 ) | (2.00 ) | (0.61 ) | (1.18 ) | (0.92 ) |
Net asset value, end of period | $11.32 | $14.61 | $16.97 | $11.36 | $12.87 |
Total return2 | (4.85 )% | (2.22 )% | 55.94 % | (4.41 )% | 0.61 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.97 % | 1.94 % | 1.99 % | 2.02 % | 1.97 % |
Net expenses | 1.83 % | 1.83 % | 1.83 % | 1.83 % | 1.83 % |
Net investment income (loss) | 0.36 % | (0.08 )% | (0.04 )% | 0.16 % | 0.07 % |
Supplemental data | |||||
Portfolio turnover rate3 | 29 % | 32 % | 38 % | 33 % | 47 % |
Net assets, end of period (000s omitted) | $3,471 | $4,103 | $4,719 | $3,576 | $5,098 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.64% |
Year ended May 31, 2022 | 0.64% |
Year ended May 31, 2021 | 0.64% |
Year ended May 31, 2020 | 0.64% |
Year ended May 31, 2019 | 0.65% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
16 | Allspring C&B Large Cap Value Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class R6 | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $14.90 | $17.24 | $11.53 | $13.06 | $13.97 |
Net investment income | 0.20 1 | 0.18 1 | 0.16 1 | 0.18 1 | 0.18 1 |
Net realized and unrealized gains (losses) on investments | (0.70 ) | (0.34 ) | 6.32 | (0.33 ) | 0.00 2 |
Total from investment operations | (0.50 ) | (0.16 ) | 6.48 | (0.15 ) | 0.18 |
Distributions to shareholders from | |||||
Net investment income | (0.21 ) | (0.18 ) | (0.16 ) | (0.20 ) | (0.18 ) |
Net realized gains | (2.60 ) | (2.00 ) | (0.61 ) | (1.18 ) | (0.91 ) |
Total distributions to shareholders | (2.81 ) | (2.18 ) | (0.77 ) | (1.38 ) | (1.09 ) |
Net asset value, end of period | $11.59 | $14.90 | $17.24 | $11.53 | $13.06 |
Total return | (3.75 )% | (0.98 )% | 57.75 % | (3.25 )% | 1.74 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 0.78 % | 0.76 % | 0.82 % | 0.84 % | 0.79 % |
Net expenses | 0.65 % | 0.65 % | 0.65 % | 0.65 % | 0.65 % |
Net investment income | 1.55 % | 1.11 % | 1.14 % | 1.33 % | 1.27 % |
Supplemental data | |||||
Portfolio turnover rate3 | 29 % | 32 % | 38 % | 33 % | 47 % |
Net assets, end of period (000s omitted) | $15,505 | $23,487 | $47,301 | $37,859 | $68,366 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.64% |
Year ended May 31, 2022 | 0.64% |
Year ended May 31, 2021 | 0.64% |
Year ended May 31, 2020 | 0.64% |
Year ended May 31, 2019 | 0.65% |
1 | Calculated based upon average shares outstanding |
2 | Amount is less than $0.005. |
3 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring C&B Large Cap Value Fund | 17
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $14.86 | $17.20 | $11.51 | $13.03 | $13.92 |
Net investment income | 0.16 1 | 0.12 1 | 0.11 1 | 0.13 1 | 0.12 1 |
Net realized and unrealized gains (losses) on investments | (0.72 ) | (0.33 ) | 6.30 | (0.33 ) | 0.02 |
Total from investment operations | (0.56 ) | (0.21 ) | 6.41 | (0.20 ) | 0.14 |
Distributions to shareholders from | |||||
Net investment income | (0.15 ) | (0.13 ) | (0.11 ) | (0.14 ) | (0.12 ) |
Net realized gains | (2.60 ) | (2.00 ) | (0.61 ) | (1.18 ) | (0.91 ) |
Total distributions to shareholders | (2.75 ) | (2.13 ) | (0.72 ) | (1.32 ) | (1.03 ) |
Net asset value, end of period | $11.55 | $14.86 | $17.20 | $11.51 | $13.03 |
Total return | (4.18 )% | (1.29 )% | 57.12 % | (3.56 )% | 1.44 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.14 % | 1.11 % | 1.17 % | 1.19 % | 1.15 % |
Net expenses | 1.00 % | 0.99 % | 0.99 % | 0.99 % | 1.00 % |
Net investment income | 1.21 % | 0.76 % | 0.81 % | 1.00 % | 0.90 % |
Supplemental data | |||||
Portfolio turnover rate2 | 29 % | 32 % | 38 % | 33 % | 47 % |
Net assets, end of period (000s omitted) | $4,292 | $6,001 | $5,980 | $6,167 | $9,274 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.64% |
Year ended May 31, 2022 | 0.64% |
Year ended May 31, 2021 | 0.64% |
Year ended May 31, 2020 | 0.64% |
Year ended May 31, 2019 | 0.65% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
18 | Allspring C&B Large Cap Value Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Institutional Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $14.90 | $17.24 | $11.53 | $13.05 | $13.96 |
Net investment income | 0.19 1 | 0.16 | 0.15 | 0.16 | 0.14 |
Net realized and unrealized gains (losses) on investments | (0.71 ) | (0.34 ) | 6.32 | (0.33 ) | 0.02 |
Total from investment operations | (0.52 ) | (0.18 ) | 6.47 | (0.17 ) | 0.16 |
Distributions to shareholders from | |||||
Net investment income | (0.19 ) | (0.16 ) | (0.15 ) | (0.17 ) | (0.16 ) |
Net realized gains | (2.60 ) | (2.00 ) | (0.61 ) | (1.18 ) | (0.91 ) |
Total distributions to shareholders | (2.79 ) | (2.16 ) | (0.76 ) | (1.35 ) | (1.07 ) |
Net asset value, end of period | $11.59 | $14.90 | $17.24 | $11.53 | $13.05 |
Total return | (3.92 )% | (1.08 )% | 57.58 % | (3.33 )% | 1.64 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 0.89 % | 0.86 % | 0.91 % | 0.94 % | 0.90 % |
Net expenses | 0.75 % | 0.75 % | 0.75 % | 0.75 % | 0.75 % |
Net investment income | 1.45 % | 1.01 % | 1.05 % | 1.25 % | 1.17 % |
Supplemental data | |||||
Portfolio turnover rate2 | 29 % | 32 % | 38 % | 33 % | 47 % |
Net assets, end of period (000s omitted) | $98,683 | $130,915 | $156,330 | $96,838 | $108,613 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.64% |
Year ended May 31, 2022 | 0.64% |
Year ended May 31, 2021 | 0.64% |
Year ended May 31, 2020 | 0.64% |
Year ended May 31, 2019 | 0.65% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring C&B Large Cap Value Fund | 19
Notes to financial statements
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 C&B Large Cap Value Fund (the “Fund”) which is a diversified series of the Trust.
The Fund is a feeder fund in a master-feeder structure that invests substantially all of its assets in a single master portfolio with a substantially identical investment objective and substantially similar investment strategies. The Fund invests in Allspring C&B Large Cap Value Portfolio, a separate diversified portfolio (the “affiliated Master Portfolio”) of Allspring Master Trust, a registered open-end management investment company. As of May 31, 2023, the Fund owned 78.60% of Allspring C&B Large Cap Value Portfolio. The affiliated Master Portfolio directly acquires portfolio securities and the Fund acquires an indirect interest in those securities. The Fund accounts for its investment in the affiliated Master Portfolio as a partnership investment and records on a daily basis its share of the affiliated Master Portfolio’s income, expense and realized and unrealized gains and losses. The financial statements of the affiliated Master Portfolio for the year ended May 31, 2023 are included in this report and should be read in conjunction with the Fund’s financial statements.
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.
Investments in the affiliated Master Portfolio are valued daily based on the Fund’s proportionate share of the affiliated Master Portfolio’s net assets, which are also valued daily.
Investments which are not valued using the method 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.
Investment transactions, income and expenses
Investments in the affiliated Master Portfolio are recorded on a trade date basis. The Fund records daily its proportionate share of the affiliated Master Portfolio’s income, expenses and realized and unrealized gains or losses. The Fund also accrues its own expenses.
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.
20 | Allspring C&B Large Cap Value Fund
Notes to financial statements
As of May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $176,679,344 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $22,350,963 |
Gross unrealized losses | 0 |
Net unrealized gains | $22,350,963 |
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
At May 31, 2023, the Fund’s investment in the affiliated Master Portfolio was measured at fair value using the net asset value per share (or its equivalent) as a practical expedient. The investment objective and fair value of the affiliated Master Portfolio is as follows:
Affiliated Master Portfolio | Investment objective | Fair value of affiliated Master Portfolio |
Allspring C&B Large Cap Value Portfolio | Seeks maximum long-term total return (current income and capital appreciation), consistent with minimizing risk to principal | $199,030,307 |
The affiliated Master Portfolio does not have a redemption period notice, can be redeemed daily and does not have any unfunded commitments.
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 $5 billion | 0.050 % |
Next $5 billion | 0.040 |
Over $10 billion | 0.030 |
For the year ended May 31, 2023, the management fee was equivalent to an annual rate of 0.05% of the Fund’s average daily net assets.
Allspring Funds Management also serves as the adviser to the affiliated Master Portfolio and is entitled to receive a fee from the affiliated Master Portfolio for those services.
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 |
Allspring C&B Large Cap Value Fund | 21
Notes to financial statements
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. Net expenses from the affiliated Master Portfolio are included in the expense caps. Allspring Funds Management has contractually committed through September 30, 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 May 31, 2023, the contractual expense caps are as follows:
EXPENSE RATIO CAPS | |
Class A | 1.08 % |
Class C | 1.83 |
Class R6 | 0.65 |
Administrator Class | 1.00 |
Institutional Class | 0.75 |
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 May 31, 2023, Allspring Funds Distributor received $562 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 May 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.
5.
INVESTMENT PORTFOLIO TRANSACTIONS
The Fund seeks to achieve its investment objective by investing substantially all of its assets in the affiliated Master Portfolio. Purchases and sales have been calculated by multiplying the Fund’s ownership percentage of the affiliated Master Portfolio at the end of the period by the affiliated Master Portfolio’s purchases and sales. Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the year ended May 31, 2023 were $63,776,516 and $107,293,152, 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 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 May 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 May 31, 2023 and May 31, 2022 were as follows:
Year ended May 31 | ||
2023 | 2022 | |
Ordinary income | $4,141,234 | $4,587,798 |
Long-term capital gain | 39,076,656 | 33,365,425 |
22 | Allspring C&B Large Cap Value Fund
Notes to financial statements
As of May 31, 2023, the components of distributable earnings on a tax basis were as follows:
Undistributed ordinary income | Undistributed long-term gain | Unrealized gains |
$917,292 | $11,540,890 | $22,350,963 |
8.
CONCENTRATION RISKS
Concentration risks result from exposure to a limited number of sectors. Through its investment in the affiliated Master Portfolio which may invest a substantial portion of its assets in any sector, the Fund may in turn be more affected by changes in that sector than a fund whose investments are not heavily weighted in any sector. As of the end of the period, the affiliated Master Portfolio concentrated its portfolio in investments related to the financials 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.
Allspring C&B Large Cap Value Fund | 23
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 C&B Large Cap Value Fund (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of May 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 May 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 interests held as of May 31, 2023, by correspondence with the transfer agent of the master portfolio. 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
July 27, 2023
24 | Allspring C&B Large Cap Value Fund
Portfolio of investments—May 31, 2023
Portfolio of investments
Shares | Value | |||||
Common stocks: 97.86% | ||||||
Communication services: 9.58% | ||||||
Diversified telecommunication services: 1.89% | ||||||
Verizon Communications, Inc. | 134,000 | $4,774,420 | ||||
Entertainment: 3.54% | ||||||
Activision Blizzard, Inc. | 50,530 | 4,052,506 | ||||
Warner Music Group Corp. Class A | 200,700 | 4,907,115 | ||||
8,959,621 | ||||||
Interactive media & services: 1.46% | ||||||
Alphabet, Inc. Class A† | 30,180 | 3,708,217 | ||||
Media: 2.69% | ||||||
Omnicom Group, Inc. | 77,350 | 6,821,496 | ||||
Consumer discretionary: 9.77% | ||||||
Distributors: 0.98% | ||||||
LKQ Corp. | 46,940 | 2,476,085 | ||||
Household durables: 1.32% | ||||||
Whirlpool Corp. | 25,800 | 3,335,682 | ||||
Leisure products: 2.39% | ||||||
Hasbro, Inc. | 102,120 | 6,060,822 | ||||
Specialty retail: 2.21% | ||||||
CarMax, Inc.† | 77,420 | 5,590,498 | ||||
Textiles, apparel & luxury goods: 2.87% | ||||||
Gildan Activewear, Inc. | 199,900 | 5,451,273 | ||||
Hanesbrands, Inc.† | 442,800 | 1,819,908 | ||||
7,271,181 | ||||||
Consumer staples: 6.83% | ||||||
Food products: 2.83% | ||||||
Ingredion, Inc. | 28,760 | 3,008,296 | ||||
Kraft Heinz Co. | 108,580 | 4,149,928 | ||||
7,158,224 | ||||||
Personal care products: 2.21% | ||||||
Unilever PLC ADR | 112,050 | 5,595,777 | ||||
Tobacco: 1.79% | ||||||
Philip Morris International, Inc. | 50,500 | 4,545,505 | ||||
Energy: 5.28% | ||||||
Oil, gas & consumable fuels: 5.28% | ||||||
ConocoPhillips | 43,530 | 4,322,529 | ||||
EOG Resources, Inc. | 43,310 | 4,646,730 | ||||
Williams Cos., Inc. | 153,750 | 4,406,475 | ||||
13,375,734 | ||||||
The accompanying notes are an integral part of these financial statements.
Allspring C&B Large Cap Value Portfolio | 25
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Financials: 29.84% | ||||||
Banks: 6.72% | ||||||
Bank of America Corp. | 94,700 | $2,631,713 | ||||
JPMorgan Chase & Co. | 44,650 | 6,059,452 | ||||
PNC Financial Services Group, Inc. | 35,980 | 4,167,563 | ||||
U.S. Bancorp | 139,230 | 4,162,977 | ||||
17,021,705 | ||||||
Capital markets: 10.80% | ||||||
Brookfield Corp. Class A | 282,260 | 8,479,090 | ||||
Charles Schwab Corp. | 96,250 | 5,071,413 | ||||
London Stock Exchange Group PLC ADR | 251,700 | 6,785,832 | ||||
State Street Corp. | 102,920 | 7,000,618 | ||||
27,336,953 | ||||||
Consumer finance: 1.48% | ||||||
Discover Financial Services | 36,520 | 3,752,065 | ||||
Financial services: 2.06% | ||||||
Berkshire Hathaway, Inc. Class B† | 16,220 | 5,207,918 | ||||
Insurance: 8.78% | ||||||
Allstate Corp. | 35,410 | 3,840,214 | ||||
Arch Capital Group Ltd.† | 54,330 | 3,786,801 | ||||
Chubb Ltd. | 25,690 | 4,773,202 | ||||
Fidelity National Financial, Inc. | 155,400 | 5,305,356 | ||||
Globe Life, Inc. | 43,900 | 4,529,602 | ||||
22,235,175 | ||||||
Health care: 13.21% | ||||||
Health care equipment & supplies: 6.67% | ||||||
Becton Dickinson & Co. | 19,720 | 4,767,507 | ||||
Dentsply Sirona, Inc. | 144,690 | 5,226,203 | ||||
Medtronic PLC | 83,200 | 6,885,632 | ||||
16,879,342 | ||||||
Health care providers & services: 3.94% | ||||||
HCA Healthcare, Inc. | 18,630 | 4,921,860 | ||||
Laboratory Corp. of America Holdings | 23,830 | 5,064,590 | ||||
9,986,450 | ||||||
Pharmaceuticals: 2.60% | ||||||
Johnson & Johnson | 42,400 | 6,574,544 | ||||
Industrials: 10.59% | ||||||
Aerospace & defense: 1.31% | ||||||
Woodward, Inc. | 31,519 | 3,322,418 | ||||
Commercial services & supplies: 1.50% | ||||||
RB Global, Inc. | 72,729 | 3,787,726 | ||||
The accompanying notes are an integral part of these financial statements.
26 | Allspring C&B Large Cap Value Portfolio
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Electrical equipment: 2.05% | ||||||
AMETEK, Inc. | 35,840 | $5,199,309 | ||||
Machinery: 2.56% | ||||||
Esab Corp. | 36,993 | 2,172,229 | ||||
Stanley Black & Decker, Inc. | 57,510 | 4,311,524 | ||||
6,483,753 | ||||||
Trading companies & distributors: 3.17% | ||||||
AerCap Holdings NV† | 140,500 | 8,019,740 | ||||
Information technology: 9.19% | ||||||
Electronic equipment, instruments & components: 6.07% | ||||||
Arrow Electronics, Inc.† | 64,130 | 8,121,423 | ||||
TE Connectivity Ltd. | 59,185 | 7,248,979 | ||||
15,370,402 | ||||||
Software: 3.12% | ||||||
Open Text Corp. | 189,660 | 7,893,649 | ||||
Real estate: 1.99% | ||||||
Real estate management & development: 1.99% | ||||||
CBRE Group, Inc. Class A† | 67,190 | 5,033,875 | ||||
Utilities: 1.58% | ||||||
Gas utilities: 1.58% | ||||||
Atmos Energy Corp. | 34,800 | 4,011,744 | ||||
Total common stocks (Cost $207,997,734) | 247,790,030 | |||||
Yield | ||||||
Short-term investments: 2.00% | ||||||
Investment companies: 2.00% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.01 % | 5,079,661 | 5,079,661 | |||
Total short-term investments (Cost $5,079,661) | 5,079,661 | |||||
Total investments in securities (Cost $213,077,395) | 99.86 % | 252,869,691 | ||||
Other assets and liabilities, net | 0.14 | 345,457 | ||||
Total net assets | 100.00 % | $253,215,148 | ||||
† | Non-income-earning security |
♠ | The issuer of the security is an affiliated person of the Portfolio 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 |
The accompanying notes are an integral part of these financial statements.
Allspring C&B Large Cap Value Portfolio | 27
Portfolio of investments—May 31, 2023
Investments in affiliates
An affiliated investment is an investment in which the Portfolio owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Portfolio and the issuer having the same adviser or investment manager. Transactions with issuers that were affiliates of the Portfolio 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 | $12,217,232 | $89,436,532 | $(96,574,103 ) | $0 | $0 | $5,079,661 | 5,079,661 | $185,997 |
Investments in affiliates no longer held at end of period | ||||||||
Securities Lending Cash Investments LLC | 0 | 7,758,270 | (7,758,254 ) | (16 ) | 0 | 0 | 0 | 5,117 1 |
$(16 ) | $0 | $5,079,661 | $191,114 |
1 | Amount shown represents income before fees and rebates. |
The accompanying notes are an integral part of these financial statements.
28 | Allspring C&B Large Cap Value Portfolio
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in unaffiliated securities, at value (cost $207,997,734) | $247,790,030 |
Investments in affiliated securities, at value (cost $5,079,661) | 5,079,661 |
Receivable for dividends | 486,925 |
Prepaid expenses and other assets | 1,026 |
Total assets | 253,357,642 |
Liabilities | |
Advisory fee payable | 122,787 |
Custody and accounting fees payable | 13,067 |
Trustees’ fees and expenses payable | 504 |
Accrued expenses and other liabilities | 6,136 |
Total liabilities | 142,494 |
Total net assets | $253,215,148 |
The accompanying notes are an integral part of these financial statements.
Allspring C&B Large Cap Value Portfolio | 29
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Dividends (net of foreign withholdings taxes of $135,740) | $6,000,256 |
Income from affiliated securities | 188,085 |
Interest | 254 |
Total investment income | 6,188,595 |
Expenses | |
Advisory fee | 1,827,068 |
Custody and accounting fees | 29,694 |
Professional fees | 62,168 |
Interest holder report expenses | 19,945 |
Trustees’ fees and expenses | 25,708 |
Other fees and expenses | 18,697 |
Total expenses | 1,983,280 |
Less: Fee waivers and/or expense reimbursements | (184,321 ) |
Net expenses | 1,798,959 |
Net investment income | 4,389,636 |
Realized and unrealized gains (losses) on investments | |
Net realized gains (losses) on | |
Unaffiliated securities | 24,842,175 |
Affiliated securities | (16 ) |
Net realized gains on investments | 24,842,159 |
Net change in unrealized gains (losses) on investments | (41,838,078 ) |
Net realized and unrealized gains (losses) on investments | (16,995,919 ) |
Net decrease in net assets resulting from operations | $(12,606,283 ) |
The accompanying notes are an integral part of these financial statements.
30 | Allspring C&B Large Cap Value Portfolio
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $4,389,636 | $4,228,372 | ||
Net realized gains on investments | 24,842,159 | 59,295,012 | ||
Net change in unrealized gains (losses) on investments | (41,838,078 ) | (67,362,442 ) | ||
Net decrease in net assets resulting from operations | (12,606,283 ) | (3,839,058 ) | ||
Capital transactions | ||||
Transactions in investors’ beneficial interests | ||||
Contributions | 9,137,304 | 20,407,586 | ||
Withdrawals | (76,376,645 ) | (94,906,626 ) | ||
Net decrease in net assets resulting from capital transactions | (67,239,341 ) | (74,499,040 ) | ||
Total decrease in net assets | (79,845,624 ) | (78,338,098 ) | ||
Net assets | ||||
Beginning of period | 333,060,772 | 411,398,870 | ||
End of period | $253,215,148 | $333,060,772 | ||
The accompanying notes are an integral part of these financial statements.
Allspring C&B Large Cap Value Portfolio | 31
Financial highlights
Financial highlights
Year ended May 31 | |||||
2023 | 2022 | 2021 | 2020 | 2019 | |
Total return | (3.77 )% | (1.05 )% | 57.96 % | (3.40 )% | 1.80 % |
Ratios to average net assets (annualized) | |||||
Gross expenses | 0.71 % | 0.69 % | 0.68 % | 0.68 % | 0.67 % |
Net expenses1 | 0.64 % | 0.64 % | 0.64 % | 0.64 % | 0.67 % |
Net investment income | 1.56 % | 1.12 % | 1.16 % | 1.36 % | 1.27 % |
Supplemental data | |||||
Portfolio turnover rate | 29 % | 32 % | 38 % | 33 % | 47 % |
1 | Net expense ratios reflect voluntary waivers, if any. |
The accompanying notes are an integral part of these financial statements.
32 | Allspring C&B Large Cap Value Portfolio
Notes to financial statements
Notes to financial statements
1.
ORGANIZATION
Allspring Master 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 C&B Large Cap Value Portfolio (the “Portfolio”) which is a diversified series of the Trust.
Interests in the Portfolio are available solely through private placement transactions that do not involve any “public offering” within the meaning of Section 4(a)(2) of the Securities Act of 1933.
2.
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Portfolio, 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 Portfolio 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 any of 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 Portfolio 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 Portfolio 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. Interests in the non-registered investment company that were redeemable at net asset value were fair valued normally at net asset value. Effective at the close of business on March 29, 2023, the Portfolio 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.
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.
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.
Federal and other taxes
The Portfolio is not required to pay federal income taxes on its net investment income and net capital gains as it is treated as a partnership for federal income tax purposes. All income, gains and losses of the Portfolio are deemed to have been “passed through” to the interest holders in proportion to their holdings of the Portfolio regardless of whether income and gains have been distributed by the Portfolio.
Allspring C&B Large Cap Value Portfolio | 33
Notes to financial statements
The Portfolio’s income tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal revenue authority. Management has analyzed the Portfolio’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 May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $218,659,192 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $60,390,773 |
Gross unrealized losses | (26,180,274 ) |
Net unrealized gains | $34,210,499 |
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 Portfolio’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 Portfolio’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 Portfolio’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 Portfolio’s assets and liabilities as of May 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 | $24,263,754 | $0 | $0 | $24,263,754 |
Consumer discretionary | 24,734,268 | 0 | 0 | 24,734,268 |
Consumer staples | 17,299,506 | 0 | 0 | 17,299,506 |
Energy | 13,375,734 | 0 | 0 | 13,375,734 |
Financials | 75,553,816 | 0 | 0 | 75,553,816 |
Health care | 33,440,336 | 0 | 0 | 33,440,336 |
Industrials | 26,812,946 | 0 | 0 | 26,812,946 |
Information technology | 23,264,051 | 0 | 0 | 23,264,051 |
Real estate | 5,033,875 | 0 | 0 | 5,033,875 |
Utilities | 4,011,744 | 0 | 0 | 4,011,744 |
Short-term investments | ||||
Investment companies | 5,079,661 | 0 | 0 | 5,079,661 |
Total assets | $252,869,691 | $0 | $0 | $252,869,691 |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the year ended May 31, 2023, the Portfolio did not have any transfers into/out of Level 3.
4.
TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES
Advisory fee
The Trust has entered into an advisory contract with 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. The adviser is responsible for implementing investment policies and guidelines and for supervising the subadviser, who is responsible for day-to-day portfolio management of the
34 | Allspring C&B Large Cap Value Portfolio
Notes to financial statements
Portfolio. Pursuant to the contract, Allspring Funds Management is entitled to receive an advisory fee at the following annual rate based on the Portfolio’s average daily net assets:
Average daily net assets | Advisory fee |
First $500 million | 0.650 % |
Next $500 million | 0.625 |
Next $1 billion | 0.600 |
Next $2 billion | 0.575 |
Next $4 billion | 0.550 |
Next $4 billion | 0.525 |
Next $4 billion | 0.500 |
Over $16 billion | 0.475 |
For the year ended May 31, 2023, the advisory fee was equivalent to an annual rate of 0.65% of the Portfolio’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Portfolio. The fee for subadvisory services is borne by Allspring Funds Management. Cooke & Bieler, L.P., which is not an affiliate of Allspring Funds Management, is the subadviser to the Portfolio and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.38% and declining to 0.30% as the average daily net assets of the Fund increase.
Allspring Funds Management has voluntarily waived and/or reimbursed advisory fees to reduce the net operating expense ratio of the Portfolio. These voluntary waivers may be discontinued at any time.
Interfund transactions
The Portfolio 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 May 31, 2023 were $80,502,374 and $135,439,281, respectively.
6.
BANK BORROWINGS
The Trust, along with Allspring Variable Trust and Allspring Funds Trust (excluding the money market funds), are parties to a $350,000,000 revolving credit agreement whereby the Portfolio is permitted to use bank borrowings for temporary or emergency purposes, such as to fund interest holders withdrawal requests. Interest under the credit agreement is charged to the Portfolio based on 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 May 31, 2023, there were no borrowings by the Portfolio under the agreement.
7.
CONCENTRATION RISKS
As of the end of the period, the Portfolio concentrated its portfolio of investments in the financials 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.
8.
INDEMNIFICATION
Under the Portfolio’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 Portfolio. The Portfolio has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Portfolio’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 Portfolio may enter into contracts with service providers that contain a variety of indemnification clauses. The Portfolio’s maximum exposure under these arrangements is dependent on future claims that may be made against the Portfolio and, therefore, cannot be estimated.
Allspring C&B Large Cap Value Portfolio | 35
Report of independent registered public accounting firm
To the Interest Holders of the Portfolio and Board of Trustees
Allspring Master Trust:
Allspring Master Trust:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Allspring C&B Large Cap Value Portfolio (the Portfolio), one of the portfolios constituting Allspring Master Trust, including the portfolio of investments, as of May 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 Portfolio as of May 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 Portfolio’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 Portfolio 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 May 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
July 27, 2023
36 | Allspring C&B Large Cap Value Portfolio
Other information (unaudited)
Other information
Tax information
For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 99% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended May 31, 2023.
Pursuant to Section 852 of the Internal Revenue Code, $39,076,656 was designated as a 20% rate gain distribution for the fiscal year ended May 31, 2023.
Pursuant to Section 854 of the Internal Revenue Code, $3,066,425 of income dividends paid during the fiscal year ended May 31, 2023 has been designated as qualified dividend income (QDI).
For the fiscal year ended May 31, 2023, $90,336 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 May 31, 2023, $1,074,809 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 and Portfolio file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. Shareholders and Interest holders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
Allspring C&B Large Cap Value Fund | 37
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 128 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 |
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 |
1
The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by call 1-800-222-8222 or by visiting the website at allspringglobal.com.
38 | Allspring C&B Large 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 |
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 C&B Large Cap Value Fund | 39
Other information (unaudited)
Officers1
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 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 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.
40 | Allspring C&B Large Cap Value Fund
Other information (unaudited)
Board consideration of investment management, advisory, and sub-advisory agreements:
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (each, a “Board” and collectively, the “Boards”) of each of Allspring Funds Trust (“Funds Trust”) and Allspring Master Trust (“Master Trust”, and collectively, the “Trusts”) must determine annually whether to approve the continuation of the Trusts’ investment management, advisory, and sub-advisory agreements, as applicable. In this regard, at a Board meeting held on May 15-17, 2023 (the “Meeting”), the Funds Trust Board, all the members of which have no direct or indirect interest in the investment management agreement and are not “interested persons” of the Trusts, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for the Allspring C&B Large Cap Value Fund, a portfolio of Funds Trust (the “Feeder Fund”), an investment management agreement (the “Feeder Fund Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”).
At the Meeting, the Master Trust Board, all the members of which have no direct or indirect interest in the investment advisory and sub-advisory agreements and are Independent Trustees, reviewed and approved: (i) an investment advisory agreement (the “Master Portfolio Advisory Agreement”) with Allspring Funds Management for the Allspring C&B Large Cap Value Portfolio, a portfolio of Master Trust (the “Master Portfolio”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Cooke & Bieler, L.P. (the “Sub-Adviser”) for the Master Portfolio.
The Feeder Fund and the Master Portfolio are collectively referred to as the “Funds.” The Feeder Fund Management Agreement, the Master Portfolio Advisory Agreement, and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
The Feeder Fund is a feeder fund that invest substantially all of its assets in the Master Portfolio. The Master Portfolio has a substantially similar investment objective and substantially similar investment strategies to the Feeder Fund. Information provided to the Boards regarding the Feeder Fund is also applicable to the Master Portfolio, as relevant.
At the Meeting, the Boards considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at meeting of the Boards held in April 2023, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Boards have adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Boards in the discharge of their duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
The Boards noted that they initially approved the Advisory Agreements at a meeting of the Boards held in May 2021, all for a two-year term, in advance of the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC,1 a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. (the “Transaction”). The Trustees also noted that, while they did not specifically consider the continuation of the Advisory Agreements in 2022 as a result of the two-year term that was approved in 2021, the Trustees received and considered certain information at a meeting of the Boards held in April 2022 that was applicable to the Advisory Agreements, including an overview and financial review of the Allspring Global Investments business, information regarding certain ancillary agreements that were approved by the Boards at the April 2022 Board meeting, and comparative data regarding Fund fees and expenses.
In providing information to the Boards, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Boards’ annual contract renewal process earlier in 2023. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Boards considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Boards reviewed reports of Allspring Funds Management at each of their quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Boards and the teams mentioned above confer with portfolio managers at various times throughout the year. The Boards did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Funds Trust Board unanimously determined that the compensation payable to Allspring Funds Management was reasonable, and approved the continuation of the Feeder Fund Management Agreement for a one-year term. Additionally, after its deliberations, the Master Trust Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser was reasonable, and approved the continuation of the Master Portfolio Advisory Agreement and the Sub-Advisory Agreement, each for a one-year term. The Boards considered the approval of the Advisory Agreements for the Funds as part of their consideration of agreements for funds across the complex, but their approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Boards in support of their approvals.
1
The trade name for the asset management firm that includes Allspring Funds Management and the Sub-Adviser is “Allspring Global Investments.”
Allspring C&B Large Cap Value Fund | 41
Other information (unaudited)
Nature, Extent, and Quality of Services
The Boards received and considered various information regarding the nature, extent, and quality of services provided to the Feeder Fund and the Master Portfolio, as applicable, by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Feeder Fund Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business. The Boards also considered information about retention arrangements with respect to key personnel of Allspring Global Investments that were put in place in connection with the Transaction. The Boards took into account information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the Transaction under a transition services agreement and the anticipated timeline for exiting the transition services agreement. In addition, the Boards received and considered information about the full range of services provided to the Fund and the Master Portfolio by Allspring Funds Management and its affiliates.
The Boards considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Master Portfolio. The Boards evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
The Boards further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Boards received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, and Allspring Funds Management’s role as administrator of the Funds’ liquidity risk management programs. The Boards also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund Investment Performance and Expenses
The Boards considered the investment performance results for each of the Funds over various time periods ended December 31, 2022. The Boards considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to the Feeder Fund (the “Universe”), and in comparison to the Feeder Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Boards received a description of the methodology used by Broadridge to select the mutual funds in the performance Universe. The Funds Trust Board noted that the investment performance of the Feeder Fund (Administrator Class) was higher than the average investment performance of its Universe for all periods under review, except the three-year period was lower than the average investment performance of the Universe. The Funds Trust Board also noted that the investment performance of the Feeder Fund was higher than its benchmark index, the Russell 1000® Value Index, for all periods under review.
The Master Trust Board took note of the investment performance of the Master Portfolio in the context of reviewing the investment performance of the Feeder Fund.
The Funds Trust Board received information concerning, and discussed factors contributing to, the underperformance of the Feeder Fund relative to the Universe for the period identified above. The Funds Trust Board took note of the explanations for the relative underperformance during this period, including with respect to investment decisions and market factors that affected the Feeder Fund’s investment performance.
The Funds Trust Board also received and considered information regarding the Feeder Fund’s net operating expense ratios, which include fees and expenses of the Master Portfolio, and their various components, including actual management fees assessed at the Feeder Fund and Master Portfolio levels, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Funds Trust Board considered these ratios in comparison to the median ratios of funds in class-specific expense groups that were determined by Broadridge to be similar to the Feeder Fund (the “Groups”). The Funds Trust Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Groups and an explanation of how funds comprising expense groups and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Funds Trust Board noted that the net operating expense ratios of the Feeder Fund were lower than or in range of the median net operating expense ratios of the expense Groups for all share classes. The Funds Trust Board noted that Allspring Funds Management had agreed to reduce the net operating expense caps for the Feeder Fund’s Class A shares.
With respect to the Master Portfolio, the Master Trust Board reviewed the fee rates that are payable to Allspring Funds Management for investment advisory services (as discussed below), which are the only fees charged at the Master Portfolio level, relative to a corresponding expense Group.
The Boards took into account the Funds’ investment performance and expense information provided to them among the factors considered in deciding to re-approve the Advisory Agreements.
Investment Management, Advisory, and Sub-Advisory Fee Rates
The Funds Trust Board noted that Allspring Funds Management receives no advisory fees from the Feeder Fund as long as the Feeder Fund continues to invest all (or substantially all) of its assets in a single master portfolio. If the Feeder Fund were to change its investment structure so that it began investing
42 | Allspring C&B Large Cap Value Fund
Other information (unaudited)
in two or more master portfolios (a fund-of-funds), Allspring Funds Management would be entitled to receive an annual fee of 0.25% of the Feeder Fund’s average daily net assets for providing investment advisory services to the Feeder Fund, including allocating the Feeder Fund’s assets to the Master Portfolio.
The Funds Trust Board reviewed and considered the contractual fee rates that are payable by the Feeder Fund to Allspring Funds Management under the Feeder Fund Management Agreement for management services (other than investment advisory services), as well as the contractual fee rates payable by the Feeder Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which include, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rates”).
The Master Trust Board reviewed and considered the contractual investment advisory fee rate that is payable by the Master Portfolio to Allspring Funds Management for investment advisory services under the Master Portfolio Advisory Agreement (the “Advisory Agreement Rate”). The Master Trust Board also reviewed and considered the contractual investment sub-advisory fee rate that is payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services (the “Sub-Advisory Agreement Rate”).
Among other information reviewed by the Funds Trust Board was a comparison of the Feeder Fund’s Management Rate, which, for this purpose, includes the advisory fees paid at the Master Portfolio level, with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Funds Trust Board noted that the Management Rates of the Feeder Fund were in range of the sum of these average rates for the Feeder Fund’s expense Groups for Institutional Class and Class R6 shares and higher than the sum of these average rates for the Feeder Fund’s expense Groups for Class A and Administrator Class shares.
The Master Trust Board reviewed a comparison of the Advisory Agreement Rate of the Master Portfolio with those of other funds in the Master Portfolio’s expense Group at a common asset level. The Master Trust Board noted that the Advisory Agreement Rate of the Master Portfolio was equal to the median rate for the Master Portfolio’s expense Group.
The Master Trust Board also received and considered information about the portions of the total management fees that were retained by Allspring Funds Management after payment of the fees to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of these amounts, the Master Trust Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services.
The Boards also received and considered information about the nature and extent of services offered and fee rates charged by Allspring Funds Management and the Sub-Adviser to other types of clients with investment strategies similar to those of the Funds. In this regard, the Boards received information about the significantly greater scope of services, and compliance, reporting and other legal burdens and risks of managing proprietary mutual funds compared with those associated with managing assets of other types of clients, including third-party sub-advised fund clients and non-mutual fund clients such as institutional separate accounts.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Funds Trust Board determined that the compensation payable to Allspring Funds Management under the Feeder Fund Management Agreement was reasonable, and the Master Trust Board determined that the compensation payable to Allspring Funds Management under the Master Portfolio Advisory Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
Profitability
The Boards received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses and differences in how Allspring Global Investments calculates its pre-tax profit metric versus the methodology used when Allspring Funds Management was part of Wells Fargo. It was noted that the impact of such differences had only minor impact on the financial results presented. Among other things, the Boards noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Based on their review, the Boards did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Funds to be at a level that would prevent the Boards from approving the continuation of the Advisory Agreements.
Economies of Scale
The Boards received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Funds, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders of the Funds. The Boards noted the existence of breakpoints in the Master Portfolio’s advisory fee structure and the Feeder Fund’s management fee structure, which operate generally to reduce the Funds’ expense ratios as the Funds grow in size, and the size of the Master Portfolio and the Feeder Fund, respectively, in relation to such breakpoints. The Boards considered that, in addition to advisory fee and management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways,
Allspring C&B Large Cap Value Fund | 43
Other information (unaudited)
including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
The Boards concluded that Allspring Funds Management’s arrangements with respect to each Fund, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Funds and their shareholders.
Other Benefits to Allspring Funds Management and the Sub-Adviser
The Boards received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management, the Sub-Adviser, and their affiliates as a result of their relationships with the Funds. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Funds and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Funds. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it.
The Boards also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser and fees earned in the past by Allspring Funds Management and its affiliate from managing a private investment vehicle for the fund complex’s securities lending collateral.
Based on their consideration of the factors and information they deemed relevant, including those described here, the Boards did not find that any ancillary benefits received by Allspring Funds Management, the Sub-Adviser, and their affiliates were unreasonable.
Conclusion
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Funds Trust Board unanimously determined that the compensation payable to Allspring Funds Management was reasonable, and approved the continuation of the Feeder Fund Management Agreement for a one-year term. Additionally, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Master Trust Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser was reasonable, and approved the continuation of the Master Portfolio Advisory Agreement and the Sub-Advisory Agreement, each for a one-year term.
44 | Allspring C&B Large Cap Value Fund
Other information (unaudited)
Liquidity risk management program
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Allspring Funds Trust (“Funds Trust”) has adopted and implemented a liquidity risk management program (the “Program”) on behalf of each of its series (other than the series that operate as money market funds), including the Fund, and Allspring Master Trust (“Master Trust” and together with Funds Trust, the “Trusts”) has adopted and implemented the Program on behalf of each of its series, including the Portfolio, which is reasonably designed to assess and manage the Fund’s and the Portfolio’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund or Portfolio is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund or Portfolio. The Trusts’ Boards of Trustees (the “Boards”) previously approved the designation of Allspring Funds Management, LLC (“Allspring Funds Management”), the Fund’s investment manager and the Portfolio’s investment adviser, to administer the Program, and Allspring Funds Management has established a Liquidity Risk Management Council (the “Council”) composed of personnel from multiple departments within Allspring Funds Management and its affiliates to assist Allspring Funds Management in the administration of the Program.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s and the Portfolio’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s and the Portfolio’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent the Fund or the Portfolio does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s or Portfolio’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if the Fund or the Portfolio has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s or the Portfolio’s “highly liquid investments” below its HLIM; and (6) periodic reporting to the Boards.
At a meeting of the Boards held on May 16-17, 2023, the Boards received and reviewed a written report (the “Report”) from Allspring Funds Management that, among other things, addressed the operation of the Program and assessed its adequacy and effectiveness for the period from January 1, 2022 through December 31, 2022 (the “Reporting Period”). The Report noted significant liquidity events impacting the Funds and Portfolios related to extended foreign market holidays as well as the difficulty of trading and settlement of most Russia-related securities due to sanctions activity. The Report noted that there were no material changes to the Program during the Reporting Period.
Allspring Funds Management determined in the Report that the Program has been implemented and operates effectively to manage each Fund’s and Portfolio’s, including the Fund’s and the Portfolio’s, liquidity risk, and Allspring Funds Management continues to believe that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s and the Portfolio’s liquidity developments.
There can be no assurance that the Program will achieve its objectives under all circumstances in the future. With respect to the Fund, please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other risks to which an investment in the Fund may be subject.
Allspring C&B Large Cap Value Fund | 45
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.
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.
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The views expressed and any forward-looking statements are as of May 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 Core Bond Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Core Bond Fund for the 12-month period that ended May 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. The market was focused on persistently high inflation 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. Markets received a boost in December with the removal of China’s strict COVID-19 lockdowns. In March 2023, a new wave of market anxiety resulted from several bank failures and unease over the possibility of more rate hikes. However, investors regained confidence and markets finished the period in relative calm.
For the 12-month period, stocks and bonds—both domestic U.S. and global—had mixed results. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 2.92%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 lost 1.41%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a return of -8.49%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -2.14%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 6.49%, the Bloomberg Municipal Bond Index6 gained 0.49%, and the ICE BofA U.S. High Yield Index7 returned -0.09%.
High inflation and central bank rate hikes rocked markets.
In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Federal Reserve (Fed) raised its short-term rate by 0.75% in June. Meanwhile, the U.S. unemployment rate remained historically low 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 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, 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.
“ In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring 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 the 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.
2 | Allspring Core Bond Fund
Letter to shareholders (unaudited)
August was yet another broadly challenging month for financial markets. 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 was the resilient U.S. jobs 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.
In September, all asset classes suffered further 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. 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 increasing 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 declining overall in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever, with generally flat 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 wound 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.
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 had 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 (ECB) both raised rates by 0.50%.
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 Core Bond Fund | 3
Letter to shareholders (unaudited)
“ 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 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 banking industry turmoil created an additional challenge for central banks in balancing inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. 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.
Economic data released in April pointed to global resilience, as Purchasing Managers Indexes1 in the U.S., U.K., and eurozone beat expectations, and China reported first-quarter annualized economic growth of 4.5%. Despite banking industry stress, developed market stocks had monthly gains. The U.S. labor market remained strong, with a 3.5% jobless rate and monthly payroll gains above 200,000. However, uncertainty and inflationary concerns weighed on investors in the U.S. and abroad.
May was marked by a divergence between expanding activity in services and an overall contraction in manufacturing activity in the U.S., U.K., and eurozone. Core inflation remained elevated in the U.S. and Europe, despite the ongoing efforts of the Fed and ECB, which included rate hikes of 0.25% by both in May. Stubborn inflation and the resilient U.S. labor market led to expectations of further interest rate hikes, overall monthly declines across bond indexes, and mixed results for stocks in May. Investor worries over a U.S. debt ceiling impasse were modest, and market confidence was buoyed by a deal in late May to avert a potential U.S. debt default.
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 Core Bond Fund
Letter to shareholders (unaudited)
Notice to Shareholders |
Beginning in July 2024, the Fund will be required by the Securities and Exchange Commission to send shareholders a paper copy of a new tailored shareholder report in place of the full shareholder report that you are now receiving. The tailored shareholder report will contain concise information about the Fund, including certain expense and performance information and fund statistics. If you wish to receive this new tailored shareholder report electronically, please follow the instructions on the back cover of this report. |
Other information that is currently included in the shareholder report, such as the Fund’s financial statements, will be available online and upon request, free of charge, in paper or electronic format. |
Allspring Core Bond Fund | 5
Performance highlights (unaudited)
Performance highlights
Investment objective | The Fund seeks total return, consisting of income and capital appreciation. |
Manager | Allspring Funds Management, LLC |
Subadviser for the affiliated master portfolio* | Allspring Global Investments, LLC |
Portfolio managers | Maulik Bhansali, CFA, Jarad Vasquez |
Average annual total returns (%) as of May 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 | Net2 | |
Class A (MBFAX) | 10-31-2001 | -6.76 | -0.35 | 0.64 | -2.33 | 0.57 | 1.10 | 0.81 | 0.70 |
Class C (MBFCX) | 10-31-2001 | -4.03 | -0.19 | 0.49 | -3.03 | -0.19 | 0.49 | 1.56 | 1.45 |
Class R (WTRRX) | 7-9-2010 | – | – | – | -2.35 | 0.43 | 0.90 | 1.07 | 0.96 |
Class R4 (MBFRX) | 11-30-2012 | – | – | – | -1.95 | 0.85 | 1.38 | 0.59 | 0.48 |
Class R6 (WTRIX) | 11-30-2012 | – | – | – | -1.90 | 0.98 | 1.52 | 0.44 | 0.33 |
Administrator Class (MNTRX) | 6-30-1997 | – | – | – | -2.22 | 0.64 | 1.18 | 0.76 | 0.65 |
Institutional Class (MBFIX) | 10-31-2001 | – | – | – | -1.95 | 0.94 | 1.47 | 0.49 | 0.38 |
Bloomberg U.S. Aggregate Bond Index3 | – | – | – | – | -2.14 | 0.81 | 1.39 | – | – |
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 4.50%. 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 R4, 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 September 30, 2024, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.70% for Class A, 1.45% for Class C, 0.96% for Class R, 0.48% for Class R4, 0.33% for Class R6, 0.65% for Administrator Class and 0.38% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any) from funds in which the affiliated master portfolio invests, and extraordinary expenses are excluded from the expense caps. Net expenses from the affiliated master portfolio are included in 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 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. |
* | The Fund is a feeder fund in a master-feeder structure that invests substantially all of its assets in a single affiliated master portfolio of the Allspring Master Trust with a substantially identical investment objective and substantially similar investment strategies. References to the investment activities of the Fund are intended to refer to the investment activities of the affiliated master portfolio in which it invests. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. | |
6 | Allspring Core Bond Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of May 31, 20231 |
1 | The chart compares the performance of Class A shares for the most recent ten years with the Bloomberg U.S. Aggregate Bond 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 4.50%. |
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. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). Securities issued by U.S. government agencies or government sponsored entities may not be guaranteed by the U.S. Treasury. This fund is exposed to foreign investment risk and mortgage-and asset-backed securities risk. Consult the Fund’s prospectus for additional information on these and other risks.
Allspring Core Bond Fund | 7
Performance highlights (unaudited)
MANAGER’S DISCUSSION
Fund highlights
•The Fund (Class A, excluding sales charges) underperformed its benchmark, the Bloomberg U.S. Aggregate Bond Index, for the 12-month period that ended May 31, 2023.
•Overweights to the credit sector and asset-backed securities (ABS) detracted from performance.
•Security selection within credit and mortgage-backed securities (MBS) was positive along with an underweight to MBS and, to a lesser extent, commercial mortgage-backed securities (CMBS) versus the benchmark.
U.S. economic growth appears to have stabilized, yet downside risks seem likely to persist.
Data reported suggests there’s ongoing strength in consumer spending, especially in services categories and autos, and a bounce back in nonresidential fixed investment and government spending, offsetting weakness in residential investment and exports. Manufacturing surveys indicate that a decline in activity is underway, demonstrated in contracting new orders and low order backlogs amid rising customer inventories. Services surveys have softened, especially affecting wholesale trade, mining and agriculture, and real estate, with lodging and food categories remaining strong.
Ten largest holdings (%) as of May 31, 20231 | |
U.S. Treasury Bonds, 1.38%, 11-15-2040 | 2.22 |
U.S. Treasury Notes, 3.50%, 4-30-2028 | 2.19 |
U.S. Treasury Notes, 1.50%, 8-15-2026 | 2.01 |
U.S. Treasury Bonds, 1.75%, 8-15-2041 | 1.91 |
U.S. Treasury Bonds, 3.63%, 2-15-2053 | 1.55 |
FNMA, 6.00%, 8-14-2053 | 1.48 |
U.S. Treasury Notes, 3.63%, 5-31-2028 | 1.36 |
U.S. Treasury Bonds, 1.13%, 5-15-2040 | 1.21 |
U.S. Treasury Bonds, 1.13%, 8-15-2040 | 1.18 |
U.S. Treasury Notes, 3.63%, 5-15-2026 | 1.13 |
1 | Each holding represents the Fund’s allocable portion of the affiliated master portfolio security. Figures represent each holding as a percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
Despite the decline in residential investment, existing and new homes sales have been more resilient than expected. Coastal markets of U.S. retail sales have remained strong, supported by the shift toward services and entertainment and away from goods and general merchandise, though retailers have cautioned that stronger same-store sales could be at risk of weakening as near-term consumption needs have been met.
Despite layoff announcements, particularly within technology, hiring in sectors like leisure and entertainment, business services, and health care and government continues, though there are growing signs that employers are filling open positions, as labor productivity is weakening.
A credit contraction is likely to unfold as regional banks scale back lending activity following outflows of lower-cost deposits in favor of high-yielding CDs and money market funds. Consumer confidence has remained on the weak side, suggesting a difficult outlook for the economy relative to good current conditions, attributed to concerns around negative real wage growth and a widening gap in spending growth relative to income growth.
Internationally, the outlook for China’s economy is weaker, with the expected emergence from zero-COVID-19 policies being weighed down by trade tensions and debt overhangs in housing and real estate. An expected rebound in U.S. exports has been slow to materialize, leading to a high current account deficit. On balance, while growth has been firmer than expected over the past three quarters, a more challenging environment should emerge as the effects of removal of expansionary fiscal and monetary policy, and tight financial conditions, work through a U.S. economy that appears to be performing above medium-term potential.
Portfolio allocation as of May 31, 20231 |
1 | Figures represent the portfolio allocation of the affiliated master portfolio as a percentage of the long-term investments of the affiliated master portfolio. Allocations are subject to change and may have changed since the date specified. |
Financial markets stabilized as shocks emanating from the banking sector subsided and incoming data on the economy remained solid. Nonetheless, caution remains warranted given concerns around inflation, growth, and financial stability. While measures of expected volatility have fallen to some of the lowest readings post-COVID, there’s a sense that concerns around economic growth and inflation have been pushed out into the future and an event-driven environment is likely to continue.
8 | Allspring Core Bond Fund
Performance highlights (unaudited)
For investors, valuations on higher-quality assets are more attractive following policy tightening. For example, the front end of the Treasury curve is pricing in yields not seen since 2007, offering value on that basis as the Federal Reserve (Fed) looks to be at or near the end of its rate hikes, yet there’s also risk that inflation could remain elevated, suggesting that term and spread premiums could remain volatile. In short, higher volatility seems likely to persist as adverse biases of risk—in inflation, growth, and tightening financial conditions—show more sustainable signs of bottoming out, which would better inform the direction of financial markets.
Consistent with our bottom-up process, we maintain a neutral duration. We have maintained an overweight to ABS, seeing value in the higher-quality segments of the market following recent spread widening. Similarly, we have decreased our underweight to agency MBS as we found a few opportunities to add in front of the Fed’s reduction of its balance sheet at more attractive spreads. We have reduced our overweight to credit, especially as new issue supply slowed and as spreads performed, and within credit, we have positioned for somewhat higher overall quality. We remain lightly positioned in CMBS, favoring other spread sectors and anticipating some dislocations in commercial real estate valuations as we move forward. We remain nimble and agile, and we stand ready to take advantage of security selection opportunities where they arise.
Allspring Core Bond Fund | 9
Fund expenses (unaudited)
Fund expenses
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 December 1, 2022 to May 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 the 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 12-1-2022 | Ending account value 5-31-2023 | Expenses paid during the period1, 2 | Annualized net expense ratio2 | |
Class A | ||||
Actual | $1,000.00 | $1,000.21 | $3.79 | 0.76 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.14 | $3.83 | 0.76 % |
Class C | ||||
Actual | $1,000.00 | $1,000.17 | $7.53 | 1.51 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,017.40 | $7.59 | 1.51 % |
Class R | ||||
Actual | $1,000.00 | $1,000.21 | $4.64 | 0.93 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,020.29 | $4.68 | 0.93 % |
Class R4 | ||||
Actual | $1,000.00 | $1,000.23 | $2.54 | 0.51 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,022.39 | $2.57 | 0.51 % |
Class R6 | ||||
Actual | $1,000.00 | $1,000.23 | $1.80 | 0.36 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,023.14 | $1.82 | 0.36 % |
Administrator Class | ||||
Actual | $1,000.00 | $1,000.21 | $3.44 | 0.69 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.49 | $3.48 | 0.69 % |
Institutional Class | ||||
Actual | $1,000.00 | $1,000.23 | $2.04 | 0.41 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,022.89 | $2.07 | 0.41 % |
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).
2 Amounts reflect net expenses allocated from the affiliated Master Portfolio in which the Fund invests.
10 | Allspring Core Bond Fund
Portfolio of investments—May 31, 2023
Portfolio of investments
Value | ||||||
Investment companies: 100.00% | ||||||
Affiliated master portfolio: 100.00% | ||||||
Allspring Core Bond Portfolio | $4,465,317,904 | |||||
Total investment companies (Cost $4,706,276,613) | 4,465,317,904 | |||||
Total investments in securities (Cost $4,706,276,613) | 100.00 % | 4,465,317,904 | ||||
Other assets and liabilities, net | 0.00 | 92,978 | ||||
Total net assets | 100.00 % | $4,465,410,882 | ||||
Transactions with the affiliated Master Portfolio were as follows:
% of ownership, beginning of period | % of ownership, end of period | Net realized gains (losses) on investments allocated from affiliated Master Portfolio | Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolio | Affiliated Income Allocated from affiliated Master Portfolio | Interest allocated from affiliated Master Portfolio | Value, end of period | |
Allspring Core Bond Portfolio | 94.49 % | 95.76 % | $(312,035,594 ) | $85,016,436 | $3,703,917 | $144,333,199 | $4,465,317,904 |
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Fund | 11
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in affiliated Master Portfolio, at value (cost $4,706,276,613) | $4,465,317,904 |
Receivable for Fund shares sold | 5,883,260 |
Receivable from manager | 310,352 |
Prepaid expenses and other assets | 179,449 |
Total assets | 4,471,690,965 |
Liabilities | |
Payable for Fund shares redeemed | 4,734,681 |
Dividends payable | 977,360 |
Administration fees payable | 255,598 |
Distribution fees payable | 4,550 |
Trustees’ fees and expenses payable | 504 |
Accrued expenses and other liabilities | 307,390 |
Total liabilities | 6,280,083 |
Total net assets | $4,465,410,882 |
Net assets consist of | |
Paid-in capital | $5,214,802,062 |
Total distributable loss | (749,391,180 ) |
Total net assets | $4,465,410,882 |
The accompanying notes are an integral part of these financial statements.
12 | Allspring Core Bond Fund
Statement of assets and liabilities—May 31, 2023
Computation of net asset value and offering price per share | |
Net assets–Class A | $273,980,036 |
Shares outstanding–Class A1 | 23,982,754 |
Net asset value per share–Class A | $11.42 |
Maximum offering price per share – Class A2 | $11.96 |
Net assets–Class C | $6,863,390 |
Shares outstanding–Class C1 | 607,190 |
Net asset value per share–Class C | $11.30 |
Net assets–Class R | $1,314,195 |
Shares outstanding–Class R1 | 118,021 |
Net asset value per share–Class R | $11.14 |
Net assets–Class R4 | $829,420 |
Shares outstanding–Class R41 | 74,480 |
Net asset value per share–Class R4 | $11.14 |
Net assets–Class R6 | $1,476,551,029 |
Shares outstanding–Class R61 | 132,745,577 |
Net asset value per share–Class R6 | $11.12 |
Net assets–Administrator Class | $70,352,385 |
Shares outstanding–Administrator Class1 | 6,318,209 |
Net asset value per share–Administrator Class | $11.13 |
Net assets–Institutional Class | $2,635,520,427 |
Shares outstanding–Institutional Class1 | 237,003,930 |
Net asset value per share–Institutional Class | $11.12 |
1 | The Fund has an unlimited number of authorized shares. |
2 | Maximum offering price is computed as 100/95.50 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 Core Bond Fund | 13
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Interest allocated from affiliated Master Portfolio (net of foreign withholding taxes of $5,742) | $144,333,199 |
Affiliated income allocated from affiliated Master Portfolio | 3,703,917 |
Expenses allocated from affiliated Master Portfolio | (15,654,739 ) |
Waivers allocated from affiliated Master Portfolio | 314,456 |
Total investment income | 132,696,833 |
Expenses | |
Management fee | 2,150,423 |
Administration fees | |
Class A | 464,295 |
Class C | 11,044 |
Class R | 2,175 |
Class R4 | 1,322 |
Class R6 | 435,096 |
Administrator Class | 100,773 |
Institutional Class | 1,959,724 |
Shareholder servicing fees | |
Class A | 725,461 |
Class C | 17,256 |
Class R | 2,398 |
Class R4 | 1,650 |
Administrator Class | 237,099 |
Distribution fees | |
Class C | 51,767 |
Class R | 2,406 |
Custody and accounting fees | 140,021 |
Professional fees | 45,094 |
Registration fees | 135,647 |
Shareholder report expenses | 283,230 |
Trustees’ fees and expenses | 23,208 |
Other fees and expenses | 42,453 |
Total expenses | 6,832,542 |
Less: Fee waivers and/or expense reimbursements | |
Fund-level | (2,586,221 ) |
Class R4 | (412 ) |
Class R6 | (385,379 ) |
Institutional Class | (676,805 ) |
Net expenses | 3,183,725 |
Net investment income | 129,513,108 |
Realized and unrealized gains (losses) on investments | |
Net realized losses on investments allocated from affiliated Master Portfolio | (312,035,594 ) |
Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolio | 85,016,436 |
Net realized and unrealized gains (losses) on investments | (227,019,158 ) |
Net decrease in net assets resulting from operations | $(97,506,050 ) |
The accompanying notes are an integral part of these financial statements.
14 | Allspring Core Bond Fund
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $129,513,108 | $62,869,235 | ||
Net realized losses on investments | (312,035,594 ) | (160,127,410 ) | ||
Net change in unrealized gains (losses) on investments | 85,016,436 | (336,112,120 ) | ||
Net decrease in net assets resulting from operations | (97,506,050 ) | (433,370,295 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class A | (7,675,142 ) | (6,433,689 ) | ||
Class C | (131,223 ) | (110,382 ) | ||
Class R | (34,090 ) | (26,649 ) | ||
Class R4 | (48,723 ) | (36,787 ) | ||
Class R6 | (44,157,011 ) | (39,431,641 ) | ||
Administrator Class | (2,554,745 ) | (4,031,398 ) | ||
Institutional Class | (74,306,035 ) | (58,058,159 ) | ||
Total distributions to shareholders | (128,906,969 ) | (108,128,705 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class A | 3,547,996 | 40,597,860 | 3,702,453 | 48,486,367 |
Class C | 203,641 | 2,319,261 | 108,019 | 1,407,245 |
Class R | 9,751 | 109,924 | 34,646 | 423,424 |
Class R4 | 81,024 | 891,840 | 28,978 | 375,499 |
Class R6 | 48,253,518 | 536,236,583 | 35,298,112 | 443,259,488 |
Administrator Class | 1,484,991 | 16,856,217 | 2,796,248 | 36,167,197 |
Institutional Class | 95,825,733 | 1,072,136,843 | 81,429,382 | 1,025,963,187 |
1,669,148,528 | 1,556,082,407 | |||
Reinvestment of distributions | ||||
Class A | 629,058 | 7,205,833 | 459,521 | 6,030,239 |
Class C | 11,516 | 130,427 | 8,369 | 109,235 |
Class R | 2,140 | 23,904 | 1,429 | 18,254 |
Class R4 | 4,370 | 48,723 | 2,874 | 36,727 |
Class R6 | 3,183,589 | 35,516,927 | 2,565,625 | 32,770,856 |
Administrator Class | 207,042 | 2,323,885 | 297,680 | 3,811,913 |
Institutional Class | 6,456,679 | 72,012,292 | 4,290,277 | 54,802,544 |
117,261,991 | 97,579,768 | |||
Payment for shares redeemed | ||||
Class A | (7,212,437 ) | (82,273,020 ) | (4,763,948 ) | (62,340,443 ) |
Class C | (264,946 ) | (3,003,853 ) | (467,425 ) | (6,084,370 ) |
Class R | (17,679 ) | (198,692 ) | (43,328 ) | (536,185 ) |
Class R4 | (144,850 ) | (1,619,238 ) | (33,896 ) | (428,263 ) |
Class R6 | (59,239,090 ) | (658,796,705 ) | (48,563,677 ) | (619,916,699 ) |
Administrator Class | (10,522,094 ) | (119,107,953 ) | (4,352,230 ) | (55,087,181 ) |
Institutional Class | (74,572,722 ) | (831,757,832 ) | (86,745,436 ) | (1,095,982,497 ) |
(1,696,757,293 ) | (1,840,375,638 ) | |||
Net increase (decrease) in net assets resulting from capital share transactions | 89,653,226 | (186,713,463 ) | ||
Total decrease in net assets | (136,759,793 ) | (728,212,463 ) | ||
Net assets | ||||
Beginning of period | 4,602,170,675 | 5,330,383,138 | ||
End of period | $4,465,410,882 | $4,602,170,675 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Fund | 15
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $12.01 | $13.43 | $14.17 | $13.28 | $12.86 |
Net investment income | 0.31 1 | 0.12 | 0.12 1 | 0.25 | 0.32 |
Net realized and unrealized gains (losses) on investments | (0.59 ) | (1.30 ) | (0.06 ) | 0.93 | 0.42 |
Total from investment operations | (0.28 ) | (1.18 ) | 0.06 | 1.18 | 0.74 |
Distributions to shareholders from | |||||
Net investment income | (0.30 ) | (0.12 ) | (0.15 ) | (0.26 ) | (0.32 ) |
Net realized gains | (0.01 ) | (0.12 ) | (0.65 ) | (0.03 ) | 0.00 |
Total distributions to shareholders | (0.31 ) | (0.24 ) | (0.80 ) | (0.29 ) | (0.32 ) |
Net asset value, end of period | $11.42 | $12.01 | $13.43 | $14.17 | $13.28 |
Total return2 | (2.33 )% | (8.95 )% | 0.31 % | 9.03 % | 5.87 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 0.83 % | 0.82 % | 0.82 % | 0.82 % | 0.83 % |
Net expenses | 0.77 % | 0.78 % | 0.78 % | 0.78 % | 0.78 % |
Net investment income | 2.66 % | 0.91 % | 0.87 % | 1.85 % | 2.50 % |
Supplemental data | |||||
Portfolio turnover rate3 | 384 % | 432 % | 457 % | 603 % | 577 % |
Net assets, end of period (000s omitted) | $273,980 | $324,431 | $370,882 | $299,642 | $302,246 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.36% |
Year ended May 31, 2022 | 0.36% |
Year ended May 31, 2021 | 0.35% |
Year ended May 31, 2020 | 0.35% |
Year ended May 31, 2019 | 0.35% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
16 | Allspring Core Bond Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $11.88 | $13.29 | $14.03 | $13.15 | $12.74 |
Net investment income | 0.22 1 | 0.05 | 0.03 | 0.15 | 0.23 |
Net realized and unrealized gains (losses) on investments | (0.58 ) | (1.32 ) | (0.07 ) | 0.92 | 0.40 |
Total from investment operations | (0.36 ) | (1.27 ) | (0.04 ) | 1.07 | 0.63 |
Distributions to shareholders from | |||||
Net investment income | (0.21 ) | (0.02 ) | (0.05 ) | (0.16 ) | (0.22 ) |
Net realized gains | (0.01 ) | (0.12 ) | (0.65 ) | (0.03 ) | 0.00 |
Total distributions to shareholders | (0.22 ) | (0.14 ) | (0.70 ) | (0.19 ) | (0.22 ) |
Net asset value, end of period | $11.30 | $11.88 | $13.29 | $14.03 | $13.15 |
Total return2 | (3.03 )% | (9.65 )% | (0.45 )% | 8.22 % | 5.04 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.58 % | 1.57 % | 1.57 % | 1.57 % | 1.58 % |
Net expenses | 1.52 % | 1.53 % | 1.53 % | 1.53 % | 1.53 % |
Net investment income | 1.92 % | 0.13 % | 0.16 % | 1.11 % | 1.75 % |
Supplemental data | |||||
Portfolio turnover rate3 | 384 % | 432 % | 457 % | 603 % | 577 % |
Net assets, end of period (000s omitted) | $6,863 | $7,806 | $13,399 | $27,971 | $34,494 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.36% |
Year ended May 31, 2022 | 0.36% |
Year ended May 31, 2021 | 0.35% |
Year ended May 31, 2020 | 0.35% |
Year ended May 31, 2019 | 0.35% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Fund | 17
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class R | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $11.70 | $13.09 | $13.83 | $12.96 | $12.55 |
Net investment income | 0.28 1 | 0.10 1 | 0.11 1 | 0.22 1 | 0.28 1 |
Net realized and unrealized gains (losses) on investments | (0.55 ) | (1.27 ) | (0.06 ) | 0.90 | 0.41 |
Total from investment operations | (0.27 ) | (1.17 ) | 0.05 | 1.12 | 0.69 |
Distributions to shareholders from | |||||
Net investment income | (0.28 ) | (0.10 ) | (0.14 ) | (0.22 ) | (0.28 ) |
Net realized gains | (0.01 ) | (0.12 ) | (0.65 ) | (0.03 ) | 0.00 |
Total distributions to shareholders | (0.29 ) | (0.22 ) | (0.79 ) | (0.25 ) | (0.28 ) |
Net asset value, end of period | $11.14 | $11.70 | $13.09 | $13.83 | $12.96 |
Total return | (2.35 )% | (9.09 )% | 0.22 % | 8.80 % | 5.61 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 0.94 % | 0.92 % | 0.87 % | 1.05 % | 1.07 % |
Net expenses | 0.92 % | 0.90 % | 0.86 % | 1.02 % | 1.03 % |
Net investment income | 2.52 % | 0.79 % | 0.81 % | 1.66 % | 2.25 % |
Supplemental data | |||||
Portfolio turnover rate2 | 384 % | 432 % | 457 % | 603 % | 577 % |
Net assets, end of period (000s omitted) | $1,314 | $1,449 | $1,716 | $3,241 | $8,565 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.36% |
Year ended May 31, 2022 | 0.36% |
Year ended May 31, 2021 | 0.35% |
Year ended May 31, 2020 | 0.35% |
Year ended May 31, 2019 | 0.35% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
18 | Allspring Core Bond Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class R4 | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $11.70 | $13.09 | $13.83 | $12.95 | $12.55 |
Net investment income | 0.33 1 | 0.15 | 0.16 1 | 0.29 1 | 0.35 |
Net realized and unrealized gains (losses) on investments | (0.56 ) | (1.27 ) | (0.06 ) | 0.91 | 0.40 |
Total from investment operations | (0.23 ) | (1.12 ) | 0.10 | 1.20 | 0.75 |
Distributions to shareholders from | |||||
Net investment income | (0.32 ) | (0.15 ) | (0.19 ) | (0.29 ) | (0.35 ) |
Net realized gains | (0.01 ) | (0.12 ) | (0.65 ) | (0.03 ) | 0.00 |
Total distributions to shareholders | (0.33 ) | (0.27 ) | (0.84 ) | (0.32 ) | (0.35 ) |
Net asset value, end of period | $11.14 | $11.70 | $13.09 | $13.83 | $12.95 |
Total return | (1.95 )% | (8.74 )% | 0.55 % | 9.34 % | 6.07 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 0.60 % | 0.59 % | 0.59 % | 0.59 % | 0.60 % |
Net expenses | 0.52 % | 0.52 % | 0.52 % | 0.52 % | 0.52 % |
Net investment income | 2.94 % | 1.17 % | 1.16 % | 2.19 % | 2.76 % |
Supplemental data | |||||
Portfolio turnover rate2 | 384 % | 432 % | 457 % | 603 % | 577 % |
Net assets, end of period (000s omitted) | $829 | $1,567 | $1,780 | $4,549 | $10,805 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.36% |
Year ended May 31, 2022 | 0.36% |
Year ended May 31, 2021 | 0.35% |
Year ended May 31, 2020 | 0.35% |
Year ended May 31, 2019 | 0.35% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Fund | 19
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class R6 | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $11.69 | $13.08 | $13.82 | $12.95 | $12.54 |
Net investment income | 0.34 1 | 0.17 | 0.18 1 | 0.30 | 0.37 |
Net realized and unrealized gains (losses) on investments | (0.56 ) | (1.27 ) | (0.06 ) | 0.91 | 0.41 |
Total from investment operations | (0.22 ) | (1.10 ) | 0.12 | 1.21 | 0.78 |
Distributions to shareholders from | |||||
Net investment income | (0.34 ) | (0.17 ) | (0.21 ) | (0.31 ) | (0.37 ) |
Net realized gains | (0.01 ) | (0.12 ) | (0.65 ) | (0.03 ) | 0.00 |
Total distributions to shareholders | (0.35 ) | (0.29 ) | (0.86 ) | (0.34 ) | (0.37 ) |
Net asset value, end of period | $11.12 | $11.69 | $13.08 | $13.82 | $12.95 |
Total return | (1.90 )% | (8.61 )% | 0.70 % | 9.42 % | 6.31 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 0.45 % | 0.44 % | 0.44 % | 0.44 % | 0.45 % |
Net expenses | 0.37 % | 0.37 % | 0.37 % | 0.37 % | 0.37 % |
Net investment income | 3.06 % | 1.32 % | 1.29 % | 2.26 % | 2.92 % |
Supplemental data | |||||
Portfolio turnover rate2 | 384 % | 432 % | 457 % | 603 % | 577 % |
Net assets, end of period (000s omitted) | $1,476,551 | $1,643,353 | $1,978,164 | $2,545,332 | $2,513,644 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.36% |
Year ended May 31, 2022 | 0.36% |
Year ended May 31, 2021 | 0.35% |
Year ended May 31, 2020 | 0.35% |
Year ended May 31, 2019 | 0.35% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
20 | Allspring Core Bond Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $11.70 | $13.09 | $13.83 | $12.96 | $12.56 |
Net investment income | 0.29 1 | 0.13 | 0.13 | 0.26 | 0.33 1 |
Net realized and unrealized gains (losses) on investments | (0.55 ) | (1.27 ) | (0.06 ) | 0.90 | 0.40 |
Total from investment operations | (0.26 ) | (1.14 ) | 0.07 | 1.16 | 0.73 |
Distributions to shareholders from | |||||
Net investment income | (0.30 ) | (0.13 ) | (0.16 ) | (0.26 ) | (0.33 ) |
Net realized gains | (0.01 ) | (0.12 ) | (0.65 ) | (0.03 ) | 0.00 |
Total distributions to shareholders | (0.31 ) | (0.25 ) | (0.81 ) | (0.29 ) | (0.33 ) |
Net asset value, end of period | $11.13 | $11.70 | $13.09 | $13.83 | $12.96 |
Total return | (2.22 )% | (8.90 )% | 0.37 % | 9.14 % | 5.87 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 0.76 % | 0.74 % | 0.76 % | 0.76 % | 0.76 % |
Net expenses | 0.70 % | 0.69 % | 0.70 % | 0.70 % | 0.70 % |
Net investment income | 2.60 % | 0.99 % | 0.95 % | 1.92 % | 2.58 % |
Supplemental data | |||||
Portfolio turnover rate2 | 384 % | 432 % | 457 % | 603 % | 577 % |
Net assets, end of period (000s omitted) | $70,352 | $177,305 | $214,796 | $218,522 | $205,825 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.36% |
Year ended May 31, 2022 | 0.36% |
Year ended May 31, 2021 | 0.35% |
Year ended May 31, 2020 | 0.35% |
Year ended May 31, 2019 | 0.35% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Fund | 21
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Institutional Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $11.69 | $13.07 | $13.82 | $12.94 | $12.54 |
Net investment income | 0.34 1 | 0.16 | 0.17 | 0.29 | 0.36 |
Net realized and unrealized gains (losses) on investments | (0.57 ) | (1.26 ) | (0.07 ) | 0.92 | 0.40 |
Total from investment operations | (0.23 ) | (1.10 ) | 0.10 | 1.21 | 0.76 |
Distributions to shareholders from | |||||
Net investment income | (0.33 ) | (0.16 ) | (0.20 ) | (0.30 ) | (0.36 ) |
Net realized gains | (0.01 ) | (0.12 ) | (0.65 ) | (0.03 ) | 0.00 |
Total distributions to shareholders | (0.34 ) | (0.28 ) | (0.85 ) | (0.33 ) | (0.36 ) |
Net asset value, end of period | $11.12 | $11.69 | $13.07 | $13.82 | $12.94 |
Total return | (1.95 )% | (8.59 )% | 0.58 % | 9.45 % | 6.18 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 0.50 % | 0.49 % | 0.49 % | 0.49 % | 0.50 % |
Net expenses | 0.41 % | 0.42 % | 0.42 % | 0.42 % | 0.42 % |
Net investment income | 3.05 % | 1.27 % | 1.22 % | 2.21 % | 2.86 % |
Supplemental data | |||||
Portfolio turnover rate2 | 384 % | 432 % | 457 % | 603 % | 577 % |
Net assets, end of period (000s omitted) | $2,635,520 | $2,446,260 | $2,749,647 | $2,365,421 | $2,343,238 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.36% |
Year ended May 31, 2022 | 0.36% |
Year ended May 31, 2021 | 0.35% |
Year ended May 31, 2020 | 0.35% |
Year ended May 31, 2019 | 0.35% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
22 | Allspring Core Bond Fund
Notes to financial statements
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 Core Bond Fund (the “Fund”) which is a diversified series of the Trust.
The Fund is a feeder fund in a master-feeder structure that invests substantially all of its assets in a single master portfolio with a substantially identical investment objective and substantially similar investment strategies. The Fund invests in Allspring Core Bond Portfolio, a separate diversified portfolio (the “affiliated Master Portfolio”) of Allspring Master Trust, a registered open-end management investment company. As of May 31, 2023, the Fund owned 95.76% of Allspring Core Bond Portfolio. The affiliated Master Portfolio directly acquires portfolio securities and the Fund acquires an indirect interest in those securities. The Fund accounts for its investment in the affiliated Master Portfolio as a partnership investment and records on a daily basis its share of the affiliated Master Portfolio’s income, expense and realized and unrealized gains and losses. The financial statements of the affiliated Master Portfolio for the year ended May 31, 2023 are included in this report and should be read in conjunction with the Fund’s financial statements.
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.
Investments in the affiliated Master Portfolio are valued daily based on the Fund’s proportionate share of the affiliated Master Portfolio’s net assets, which are also valued daily.
Investments which are not valued using the method 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.
Investment transactions, income and expenses
Investments in the affiliated Master Portfolio are recorded on a trade date basis. The Fund records daily its proportionate share of the affiliated Master Portfolio’s income, expenses and realized and unrealized gains or losses. The Fund also accrues its own expenses.
Distributions to shareholders
Distributions to shareholders from net investment income are declared daily and paid monthly. Distributions from net realized gains, if any, 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.
Allspring Core Bond Fund | 23
Notes to financial statements
As of May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $4,724,644,500 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $0 |
Gross unrealized losses | (259,326,596 ) |
Net unrealized losses | $(259,326,596 ) |
As of May 31, 2023, the Fund had capital loss carryforwards which consist of $289,890,334 in short-term capital losses and $202,741,889 in long-term capital losses.
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
At May 31, 2023, the affiliated Master Portfolio was measured at fair value using the net asset value per share (or its equivalent) as a practical expedient. The investment objective and fair value of the affiliated Master Portfolio is as follows:
Affiliated Master Portfolio | Investment objective | Fair value of affiliated Master Portfolio |
Allspring Core Bond Portfolio | Seeks total return, consisting of income and capital appreciation | $4,465,317,904 |
The affiliated Master Portfolio does not have a redemption period notice, can be redeemed daily and does not have any unfunded commitments.
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 and providing fund-level administrative services in connection with the Fund’s operations. As long as the Fund continues to invest substantially all of its assets in a single affiliated Master Portfolio, the Fund pays Allspring Funds Management an investment management fee only for fund-level administrative services at the following annual rate based on the Fund’s average daily net assets:
Average daily net assets | Management fee |
First $5 billion | 0.050 % |
Next $5 billion | 0.040 |
Over $10 billion | 0.030 |
For the year ended May 31, 2023, the management fee was equivalent to an annual rate of 0.05% of the Fund’s average daily net assets.
Allspring Funds Management also serves as the adviser to the affiliated Master Portfolio and is entitled to receive a fee from the affiliated Master Portfolio for those services.
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
24 | Allspring Core Bond Fund
Notes to financial statements
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 | 0.16 % |
Class C | 0.16 |
Class R | 0.16 |
Class R4 | 0.08 |
Class R6 | 0.03 |
Administrator Class | 0.10 |
Institutional Class | 0.08 |
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. Net expenses from the affiliated Master Portfolio are included in the expense caps. Allspring Funds Management has contractually committed through September 30, 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 May 31, 2023, the contractual expense caps are as follows:
EXPENSE RATIO CAPS | ||
Current | Prior to April 17, 2023 | |
Class A | 0.71 % | 0.78 % |
Class C | 1.46 | 1.53 |
Class R | 0.96 | 1.03 |
Class R4 | 0.48 | 0.52 |
Class R6 | 0.33 | 0.37 |
Administrator Class | 0.65 | 0.70 |
Institutional Class | 0.38 | 0.42 |
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 May 31, 2023, Allspring Funds Distributor received $782 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 May 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. Class R4 is charged a fee at an annual rate up to 0.10% of its average daily net assets. A portion of these total shareholder servicing fees were paid to affiliates of the Fund.
Allspring Core Bond Fund | 25
Notes to financial statements
5.
INVESTMENT PORTFOLIO TRANSACTIONS
The Fund seeks to achieve its investment objective by investing substantially all of its assets in a single affiliated Master Portfolio. Purchases and sales have been calculated by multiplying the Fund’s ownership percentage of the affiliated Master Portfolio at the end of the period by the affiliated Master Portfolio’s purchases and sales. Purchases and sales of investments, excluding short-term securities, for the year ended May 31, 2023 were as follows:
Purchases at cost | Sales proceeds | ||
U.S. government | Non-U.S. government | U.S. government | Non-U.S. government |
$10,190,491,365 | $7,095,020,558 | $10,258,158,874 | $6,737,323,863 |
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 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 May 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 May 31, 2023 and May 31, 2022 were as follows:
Year ended May 31 | ||
2023 | 2022 | |
Ordinary income | $128,906,969 | $80,688,093 |
Long-term capital gain | 0 | 27,440,612 |
As of May 31, 2023, the components of distributable earnings on a tax basis were as follows:
Undistributed ordinary income | Unrealized losses | Capital loss carryforward |
$3,615,041 | $(259,326,596 ) | $(492,632,223 ) |
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.
26 | Allspring Core Bond 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 Core Bond Fund (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of May 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 May 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 interests held as of May 31, 2023, by correspondence with the transfer agent of the master portfolio. 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
July 27, 2023
Allspring Core Bond Fund | 27
Portfolio of investments—May 31, 2023
Portfolio of investments
Interest rate | Maturity date | Principal | Value | |||
Agency securities: 37.26% | ||||||
FHLB | 1.00 % | 9-30-2031 | $ | 8,020,000 | $6,648,135 | |
FHLMC¤ | 0.00 | 12-14-2029 | 6,390,000 | 4,948,872 | ||
FHLMC Series 5119 Class AB | 1.50 | 8-25-2049 | 3,261,933 | 2,598,114 | ||
FHLMC Series 5091 Class AB | 1.50 | 3-25-2051 | 6,177,784 | 4,989,288 | ||
FHLMC Series 4205 Class PA | 1.75 | 5-15-2043 | 1,680,108 | 1,443,663 | ||
FHLMC | 2.00 | 6-1-2040 | 9,290,954 | 8,058,700 | ||
FHLMC | 2.00 | 7-1-2040 | 9,549,503 | 8,282,915 | ||
FHLMC | 2.00 | 8-1-2040 | 9,898,696 | 8,578,132 | ||
FHLMC | 2.00 | 11-1-2040 | 13,123,313 | 11,342,077 | ||
FHLMC | 2.00 | 12-1-2040 | 3,238,471 | 2,786,549 | ||
FHLMC | 2.00 | 1-1-2041 | 2,509,931 | 2,166,140 | ||
FHLMC | 2.00 | 2-1-2041 | 2,570,218 | 2,216,417 | ||
FHLMC | 2.00 | 4-1-2041 | 2,832,652 | 2,437,448 | ||
FHLMC | 2.00 | 7-1-2041 | 4,313,195 | 3,703,384 | ||
FHLMC | 2.00 | 11-1-2041 | 4,969,707 | 4,249,559 | ||
FHLMC | 2.00 | 12-1-2041 | 12,511,274 | 10,695,817 | ||
FHLMC | 2.00 | 1-1-2042 | 3,282,865 | 2,806,489 | ||
FHLMC | 2.00 | 2-1-2042 | 18,198,456 | 15,551,698 | ||
FHLMC | 2.00 | 4-1-2042 | 9,635,448 | 8,241,994 | ||
FHLMC Series 2015-8 Class AP | 2.00 | 3-25-2045 | 4,783,635 | 4,191,123 | ||
FHLMC | 2.00 | 2-1-2047 | 2,138,080 | 1,768,309 | ||
FHLMC Series 5300 Class C | 2.00 | 9-25-2047 | 5,582,908 | 5,118,412 | ||
FHLMC Series 5143 Class GA | 2.00 | 6-25-2049 | 1,957,631 | 1,624,565 | ||
FHLMC | 2.00 | 12-1-2051 | 1,509,421 | 1,248,115 | ||
FHLMC Series 4446 Class CP | 2.25 | 3-15-2045 | 2,250,263 | 1,989,308 | ||
FHLMC (12 Month LIBOR +1.64%)± | 2.30 | 8-1-2043 | 459,988 | 467,259 | ||
FHLMC (12 Month LIBOR +1.64%)± | 2.38 | 7-1-2043 | 254,795 | 258,428 | ||
FHLMC | 2.50 | 4-1-2042 | 1,432,148 | 1,253,170 | ||
FHLMC | 2.50 | 5-1-2042 | 6,298,424 | 5,468,749 | ||
FHLMC | 2.50 | 6-1-2042 | 2,219,081 | 1,941,306 | ||
FHLMC Series 5201 Class CA | 2.50 | 7-25-2048 | 4,064,577 | 3,623,599 | ||
FHLMC Series 5203 Class G | 2.50 | 11-25-2048 | 1,842,361 | 1,618,344 | ||
FHLMC Series 5178 Class TP | 2.50 | 4-25-2049 | 4,607,542 | 4,006,186 | ||
FHLMC Series 5182 Class M | 2.50 | 5-25-2049 | 2,817,810 | 2,470,077 | ||
FHLMC Series 5202 Class LA | 2.50 | 5-25-2049 | 4,160,404 | 3,636,947 | ||
FHLMC Series 5217 Class CD | 2.50 | 7-25-2049 | 3,489,917 | 3,150,364 | ||
FHLMC | 2.50 | 9-1-2051 | 10,791,855 | 9,349,852 | ||
FHLMC | 2.50 | 2-1-2052 | 1,163,732 | 1,001,755 | ||
FHLMC | 2.50 | 3-1-2052 | 3,717,548 | 3,192,846 | ||
FHLMC (12 Month LIBOR +1.63%)± | 2.51 | 11-1-2043 | 511,293 | 515,596 | ||
FHLMC (12 Month LIBOR +1.61%)± | 2.56 | 9-1-2043 | 243,972 | 246,817 | ||
FHLMC (12 Month LIBOR +1.61%)± | 2.69 | 10-1-2043 | 532,360 | 537,187 | ||
FHLMC (12 Month LIBOR +1.65%)± | 2.81 | 10-1-2043 | 853,816 | 868,632 | ||
FHLMC (12 Month LIBOR +1.64%)± | 2.82 | 5-1-2049 | 1,811,480 | 1,759,489 | ||
FHLMC | 3.00 | 4-1-2040 | 2,862,545 | 2,633,770 | ||
FHLMC | 3.00 | 4-1-2043 | 3,384,636 | 3,080,753 | ||
FHLMC | 3.00 | 8-1-2043 | 5,108,270 | 4,649,623 | ||
FHLMC | 3.00 | 9-1-2046 | 5,244,853 | 4,761,977 | ||
The accompanying notes are an integral part of these financial statements.
28 | Allspring Core Bond Portfolio
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Agency securities (continued) | ||||||
FHLMC | 3.00 % | 1-1-2047 | $ | 4,195,270 | $3,802,965 | |
FHLMC | 3.00 | 2-1-2047 | 3,864,453 | 3,501,592 | ||
FHLMC Series 4719 Class LM | 3.00 | 9-15-2047 | 1,900,505 | 1,732,033 | ||
FHLMC Series 4742 Class PA | 3.00 | 10-15-2047 | 3,945,941 | 3,608,502 | ||
FHLMC Series 4880 Class DA | 3.00 | 5-15-2050 | 3,236,893 | 2,972,423 | ||
FHLMC (12 Month LIBOR +1.72%)± | 3.16 | 1-1-2044 | 1,005,697 | 1,020,678 | ||
FHLMC | 3.50 | 6-1-2046 | 2,303,237 | 2,147,624 | ||
FHLMC | 3.50 | 10-1-2046 | 1,888,498 | 1,765,334 | ||
FHLMC (12 Month LIBOR +1.64%)± | 3.83 | 3-1-2049 | 2,409,026 | 2,394,149 | ||
FHLMC (30 Day Average U.S. SOFR +2.13%)± | 3.91 | 7-1-2052 | 2,201,349 | 2,107,217 | ||
FHLMC (30 Day Average U.S. SOFR +2.14%)± | 3.99 | 8-1-2052 | 3,078,802 | 2,921,408 | ||
FHLMC | 4.00 | 4-1-2037 | 1,190,314 | 1,161,256 | ||
FHLMC | 4.00 | 7-1-2049 | 7,585,780 | 7,340,827 | ||
FHLMC (30 Day Average U.S. SOFR +2.38%)± | 4.12 | 9-1-2052 | 1,747,991 | 1,680,771 | ||
FHLMC | 4.20 | 5-1-2053 | 9,241,076 | 8,965,070 | ||
FHLMC (30 Day Average U.S. SOFR +2.13%)± | 4.30 | 7-1-2052 | 2,603,268 | 2,517,093 | ||
FHLMC (12 Month LIBOR +1.64%)± | 4.35 | 9-1-2045 | 4,640,108 | 4,729,998 | ||
FHLMC (12 Month LIBOR +1.64%)± | 4.47 | 4-1-2048 | 5,522,535 | 5,521,132 | ||
FHLMC | 4.50 | 6-1-2039 | 185,646 | 183,952 | ||
FHLMC | 4.50 | 7-1-2039 | 223,126 | 222,321 | ||
FHLMC (12 Month LIBOR +1.69%)± | 4.80 | 9-1-2047 | 4,853,873 | 4,927,924 | ||
FHLMC Series 5119 Class QF (30 Day Average U.S. SOFR +0.20%)± | 5.02 | 6-25-2051 | 3,924,699 | 3,728,361 | ||
FHLMC Series 4793 Class FD (1 Month LIBOR +0.30%)± | 5.41 | 6-15-2048 | 697,968 | 669,173 | ||
FHLMC Series 4826 Class KF (1 Month LIBOR +0.30%)± | 5.41 | 9-15-2048 | 1,450,792 | 1,391,689 | ||
FHLMC Series 2017-78 Class FC | 5.49 | 10-25-2047 | 2,847,403 | 2,748,823 | ||
FHLMC Series 5004 Class FM (1 Month LIBOR +0.35%)± | 5.49 | 8-25-2050 | 2,780,183 | 2,655,232 | ||
FHLMC (12 Month LIBOR +1.77%)± | 5.50 | 9-1-2042 | 415,619 | 424,953 | ||
FHLMC Series 4122 Class FP | 5.51 | 10-15-2042 | 3,546,737 | 3,462,460 | ||
FHLMC Series 4993 Class KF (1 Month LIBOR +0.45%)± | 5.59 | 7-25-2050 | 12,992,454 | 12,418,733 | ||
FHLMC Series 4240 Class FA (1 Month LIBOR +0.50%)± | 5.61 | 8-15-2043 | 4,739,133 | 4,637,109 | ||
FHLMC Series 4248 Class FT | 5.61 | 9-15-2043 | 1,764,220 | 1,719,474 | ||
FHLMC Series 4631 Class FA | 5.61 | 11-15-2046 | 3,356,019 | 3,251,131 | ||
FHLMC (12 Month LIBOR +1.69%)± | 6.28 | 2-1-2043 | 674,773 | 684,589 | ||
FHLMC Series 1897 Class K | 7.00 | 9-15-2026 | 92 | 92 | ||
FHLMC (12 Month LIBOR +1.65%)± | 7.04 | 3-1-2043 | 408,974 | 415,000 | ||
FHLMC STRIPS Series 264 Class 30 | 3.00 | 7-15-2042 | 5,333,221 | 4,895,832 | ||
FHLMC STRIPS Series 271 Class F5 (1 Month LIBOR +0.50%)± | 5.61 | 8-15-2042 | 1,642,440 | 1,601,329 | ||
FHLMC STRIPS Series 272 Class F1 (1 Month LIBOR +0.50%)± | 5.61 | 8-15-2042 | 2,529,025 | 2,473,896 | ||
FHLMC STRIPS Series 280 Class F1 (1 Month LIBOR +0.50%)± | 5.61 | 9-15-2042 | 2,604,757 | 2,548,135 | ||
FNMA | 1.50 | 10-1-2041 | 14,102,057 | 11,506,409 | ||
FNMA | 1.50 | 11-1-2041 | 39,487,949 | 32,203,376 | ||
FNMA Series 2012-151 Class NX | 1.50 | 1-25-2043 | 1,968,567 | 1,672,016 | ||
FNMA Series 2013-11 Class AP | 1.50 | 1-25-2043 | 6,317,527 | 5,614,527 | ||
FNMA Series 2021-27 Class EC | 1.50 | 5-25-2051 | 9,971,519 | 7,971,203 | ||
FNMA | 1.50 | 7-1-2051 | 16,947,921 | 13,207,877 | ||
FNMA Series 2021-78 Class ND | 1.50 | 11-25-2051 | 5,673,560 | 4,694,934 | ||
FNMA | 1.52 | 8-21-2035 | 8,018,000 | 5,731,867 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Portfolio | 29
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Agency securities (continued) | ||||||
FNMA (30 Day Average U.S. SOFR +2.21%)± | 1.60 % | 12-1-2051 | $ | 1,367,952 | $1,226,117 | |
FNMA Series 2015-84 Class PA | 1.70 | 8-25-2033 | 7,244,834 | 6,545,803 | ||
FNMA Series 2013-43 Class BP | 1.75 | 5-25-2043 | 2,319,805 | 1,995,890 | ||
FNMA Series 2016-57 Class PC | 1.75 | 6-25-2046 | 14,800,419 | 12,436,546 | ||
FNMA | 1.90 | 1-25-2036 | 7,437,000 | 5,512,703 | ||
FNMA Series 2016-48 Class MA | 2.00 | 6-25-2038 | 7,276,445 | 6,575,139 | ||
FNMA | 2.00 | 6-1-2040 | 3,122,071 | 2,708,016 | ||
FNMA | 2.00 | 7-1-2040 | 9,435,615 | 8,184,243 | ||
FNMA | 2.00 | 9-1-2040 | 10,569,730 | 9,151,604 | ||
FNMA | 2.00 | 10-1-2040 | 11,606,090 | 9,987,934 | ||
FNMA | 2.00 | 11-1-2040 | 10,278,449 | 8,882,951 | ||
FNMA | 2.00 | 12-1-2040 | 57,809,526 | 49,919,402 | ||
FNMA | 2.00 | 1-1-2041 | 19,796,730 | 17,085,380 | ||
FNMA | 2.00 | 2-1-2041 | 11,154,183 | 9,589,842 | ||
FNMA | 2.00 | 4-1-2041 | 1,820,274 | 1,569,946 | ||
FNMA | 2.00 | 5-1-2041 | 21,077,451 | 18,133,790 | ||
FNMA | 2.00 | 6-1-2041 | 1,265,840 | 1,087,757 | ||
FNMA | 2.00 | 7-1-2041 | 19,976,730 | 17,153,465 | ||
FNMA | 2.00 | 8-1-2041 | 1,440,108 | 1,235,606 | ||
FNMA | 2.00 | 10-1-2041 | 7,350,869 | 6,316,151 | ||
FNMA | 2.00 | 11-1-2041 | 3,648,001 | 3,120,351 | ||
FNMA | 2.00 | 1-1-2042 | 7,911,025 | 6,762,055 | ||
FNMA | 2.00 | 2-1-2042 | 59,925,135 | 51,262,317 | ||
FNMA | 2.00 | 3-1-2042 | 20,428,849 | 17,448,139 | ||
FNMA | 2.00 | 4-1-2042 | 3,783,074 | 3,238,175 | ||
FNMA | 2.00 | 5-1-2042 | 2,287,910 | 1,959,426 | ||
FNMA | 2.00 | 8-1-2042 | 4,243,799 | 3,626,597 | ||
FNMA | 2.00 | 4-1-2046 | 10,912,591 | 9,061,955 | ||
FNMA | 2.00 | 1-1-2047 | 1,988,089 | 1,646,716 | ||
FNMA | 2.00 | 3-1-2047 | 14,435,281 | 11,952,869 | ||
FNMA Series 2022-28 Class CA | 2.00 | 1-25-2048 | 3,364,826 | 2,987,525 | ||
FNMA Series 2020-48 Class AB | 2.00 | 7-25-2050 | 3,425,106 | 2,851,785 | ||
FNMA Series 2020-48 Class DA | 2.00 | 7-25-2050 | 7,648,837 | 6,432,398 | ||
FNMA | 2.50 | 12-1-2035 | 12,158,044 | 11,255,727 | ||
FNMA | 2.50 | 5-1-2036 | 6,362,879 | 5,882,826 | ||
FNMA | 2.50 | 6-1-2036 | 7,571,080 | 7,000,023 | ||
FNMA | 2.50 | 12-1-2040 | 6,692,380 | 5,947,340 | ||
FNMA | 2.50 | 5-1-2041 | 7,071,057 | 6,249,557 | ||
FNMA | 2.50 | 8-1-2041 | 3,943,812 | 3,442,938 | ||
FNMA | 2.50 | 2-1-2042 | 4,073,812 | 3,616,065 | ||
FNMA | 2.50 | 4-1-2042 | 8,127,868 | 7,112,104 | ||
FNMA | 2.50 | 5-1-2042 | 5,166,221 | 4,520,606 | ||
FNMA | 2.50 | 6-1-2042 | 4,778,874 | 4,180,673 | ||
FNMA | 2.50 | 5-1-2046 | 1,980,284 | 1,723,109 | ||
FNMA Series 2018-8 Class KL | 2.50 | 3-25-2047 | 2,551,358 | 2,250,178 | ||
FNMA Series 2022-11 Class A | 2.50 | 7-25-2047 | 9,349,742 | 8,437,202 | ||
FNMA | 2.50 | 12-1-2047 | 9,692,070 | 8,650,572 | ||
FNMA | 2.50 | 10-1-2050 | 6,344,188 | 5,496,731 | ||
The accompanying notes are an integral part of these financial statements.
30 | Allspring Core Bond Portfolio
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Agency securities (continued) | ||||||
FNMA Series 2021-78 Class PA | 2.50 % | 11-25-2051 | $ | 3,632,361 | $3,164,934 | |
FNMA | 2.50 | 3-1-2052 | 4,644,147 | 3,994,277 | ||
FNMA%% | 2.50 | 6-13-2053 | 47,800,000 | 40,862,465 | ||
FNMA (12 Month LIBOR +1.56%)± | 2.80 | 6-1-2043 | 328,008 | 335,393 | ||
FNMA (12 Month LIBOR +1.60%)± | 2.98 | 3-1-2050 | 5,551,758 | 5,391,894 | ||
FNMA | 3.00 | 5-1-2040 | 6,630,866 | 6,083,890 | ||
FNMA Series 2020-45 Class JL | 3.00 | 7-25-2040 | 4,204,686 | 3,829,593 | ||
FNMA | 3.00 | 11-1-2042 | 3,569,883 | 3,249,053 | ||
FNMA | 3.00 | 1-1-2043 | 4,302,045 | 3,919,103 | ||
FNMA | 3.00 | 2-1-2043 | 17,435,563 | 15,716,706 | ||
FNMA | 3.00 | 7-1-2043 | 2,767,069 | 2,518,343 | ||
FNMA | 3.00 | 8-1-2043 | 3,844,921 | 3,499,314 | ||
FNMA | 3.00 | 9-1-2043 | 3,016,050 | 2,745,284 | ||
FNMA | 3.00 | 12-1-2043 | 3,617,891 | 3,293,031 | ||
FNMA | 3.00 | 2-1-2044 | 3,700,618 | 3,368,357 | ||
FNMA Series 2014-25 Class EL | 3.00 | 5-25-2044 | 2,387,682 | 2,176,289 | ||
FNMA | 3.00 | 10-1-2044 | 18,722,653 | 16,884,761 | ||
FNMA | 3.00 | 2-1-2045 | 5,953,142 | 5,412,824 | ||
FNMA Series 2017-13 Class PA | 3.00 | 8-25-2046 | 2,076,105 | 1,919,645 | ||
FNMA | 3.00 | 10-1-2046 | 10,781,393 | 9,793,878 | ||
FNMA | 3.00 | 11-1-2046 | 10,877,359 | 9,876,981 | ||
FNMA | 3.00 | 12-1-2046 | 15,023,059 | 13,659,667 | ||
FNMA | 3.00 | 1-1-2047 | 10,716,475 | 9,702,603 | ||
FNMA | 3.00 | 2-1-2047 | 15,216,050 | 13,803,920 | ||
FNMA | 3.00 | 3-1-2047 | 2,165,963 | 1,960,456 | ||
FNMA | 3.00 | 2-1-2048 | 2,612,085 | 2,369,989 | ||
FNMA Series 2018-14 Class KC | 3.00 | 3-25-2048 | 2,541,381 | 2,370,907 | ||
FNMA | 3.00 | 4-1-2048 | 11,867,373 | 10,801,924 | ||
FNMA Series 2019-25 Class PA | 3.00 | 5-25-2048 | 5,421,082 | 4,967,332 | ||
FNMA | 3.00 | 2-1-2049 | 6,396,940 | 5,797,095 | ||
FNMA | 3.00 | 10-1-2049 | 45,406,064 | 41,329,105 | ||
FNMA | 3.00 | 2-1-2050 | 36,016,606 | 32,693,216 | ||
FNMA | 3.00 | 5-1-2050 | 11,039,427 | 10,067,272 | ||
FNMA | 3.00 | 2-1-2055 | 2,023,291 | 1,821,421 | ||
FNMA | 3.00 | 7-1-2060 | 25,755,588 | 22,163,570 | ||
FNMA (12 Month LIBOR +1.58%)± | 3.29 | 10-1-2043 | 1,168,359 | 1,185,912 | ||
FNMA | 3.50 | 3-1-2042 | 2,333,860 | 2,202,302 | ||
FNMA | 3.50 | 4-1-2042 | 4,883,122 | 4,607,850 | ||
FNMA | 3.50 | 11-1-2042 | 1,941,162 | 1,831,721 | ||
FNMA | 3.50 | 12-1-2043 | 9,337,676 | 8,767,595 | ||
FNMA | 3.50 | 2-1-2046 | 5,072,345 | 4,757,096 | ||
FNMA | 3.50 | 7-1-2047 | 23,866,102 | 22,521,712 | ||
FNMA | 3.50 | 7-1-2048 | 1,648,435 | 1,531,413 | ||
FNMA Series 2018-85 Class EA | 3.50 | 12-25-2048 | 2,042,034 | 1,943,271 | ||
FNMA | 3.50 | 4-1-2050 | 13,350,907 | 12,463,477 | ||
FNMA (30 Day Average U.S. SOFR +2.37%)± | 3.68 | 8-1-2052 | 3,389,796 | 3,235,082 | ||
FNMA (30 Day Average U.S. SOFR +2.12%)± | 3.97 | 8-1-2052 | 2,239,051 | 2,129,713 | ||
FNMA | 4.00 | 1-1-2027 | 9,208,935 | 9,044,781 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Portfolio | 31
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Agency securities (continued) | ||||||
FNMA | 4.00 % | 9-1-2033 | $ | 1,354,190 | $1,326,191 | |
FNMA | 4.00 | 3-1-2035 | 22,344,366 | 21,945,215 | ||
FNMA | 4.00 | 10-1-2037 | 982,374 | 964,631 | ||
FNMA | 4.00 | 6-1-2038 | 1,843,617 | 1,810,367 | ||
FNMA | 4.00 | 9-1-2045 | 586,593 | 570,714 | ||
FNMA | 4.00 | 1-1-2046 | 4,204,784 | 4,090,964 | ||
FNMA | 4.00 | 4-1-2047 | 1,072,082 | 1,032,527 | ||
FNMA | 4.00 | 10-1-2047 | 895,670 | 870,728 | ||
FNMA | 4.00 | 7-1-2048 | 13,238,239 | 12,768,835 | ||
FNMA | 4.00 | 12-1-2048 | 2,119,854 | 2,065,623 | ||
FNMA | 4.00 | 5-1-2049 | 2,210,777 | 2,137,966 | ||
FNMA (12 Month LIBOR +1.58%)± | 4.04 | 6-1-2045 | 1,516,698 | 1,523,293 | ||
FNMA (30 Day Average U.S. SOFR +2.12%)± | 4.14 | 9-1-2052 | 4,581,338 | 4,462,492 | ||
FNMA (30 Day Average U.S. SOFR +2.13%)± | 4.15 | 10-1-2052 | 11,446,063 | 11,130,632 | ||
FNMA (30 Day Average U.S. SOFR +2.12%)± | 4.17 | 7-1-2052 | 5,457,918 | 5,230,235 | ||
FNMA (12 Month LIBOR +1.58%)± | 4.18 | 1-1-2046 | 3,760,890 | 3,779,126 | ||
FNMA (30 Day Average U.S. SOFR +2.37%)± | 4.23 | 9-1-2052 | 1,673,583 | 1,618,371 | ||
FNMA (30 Day Average U.S. SOFR +2.13%)± | 4.25 | 11-1-2052 | 3,871,798 | 3,776,422 | ||
FNMA (30 Day Average U.S. SOFR +2.13%)± | 4.31 | 8-1-2052 | 6,195,463 | 6,017,794 | ||
FNMA (30 Day Average U.S. SOFR +2.12%)± | 4.36 | 7-1-2052 | 5,799,334 | 5,639,898 | ||
FNMA | 4.50 | 6-1-2041 | 173,703 | 172,750 | ||
FNMA | 4.50 | 3-1-2043 | 2,242,280 | 2,229,982 | ||
FNMA | 4.50 | 10-1-2045 | 3,499,348 | 3,458,512 | ||
FNMA | 4.50 | 2-1-2046 | 90,265 | 89,107 | ||
FNMA | 4.50 | 7-1-2048 | 3,459,304 | 3,416,971 | ||
FNMA | 4.50 | 11-1-2048 | 1,517,127 | 1,512,466 | ||
FNMA (30 Day Average U.S. SOFR +2.13%)± | 4.62 | 8-1-2052 | 6,683,648 | 6,548,371 | ||
FNMA (30 Day Average U.S. SOFR +2.12%)± | 4.64 | 8-1-2052 | 5,157,796 | 5,034,630 | ||
FNMA (30 Day Average U.S. SOFR +2.13%)± | 4.66 | 8-1-2052 | 5,058,711 | 4,962,563 | ||
FNMA Series 2015-32 Class FA (1 Month LIBOR +0.30%)± | 5.44 | 5-25-2045 | 2,283,043 | 2,208,097 | ||
FNMA Series 2015-26 Class GF (1 Month LIBOR +0.30%)± | 5.44 | 5-25-2045 | 3,775,534 | 3,667,879 | ||
FNMA Series 2015-48 Class FB (1 Month LIBOR +0.30%)± | 5.44 | 7-25-2045 | 2,830,482 | 2,741,851 | ||
FNMA Series 2018-85 Class FE (1 Month LIBOR +0.30%)± | 5.44 | 12-25-2048 | 6,350,690 | 6,152,985 | ||
FNMA Series 2012-133 Class JF (1 Month LIBOR +0.35%)± | 5.49 | 12-25-2042 | 2,167,937 | 2,107,256 | ||
FNMA Series 2013-15 Class FA (1 Month LIBOR +0.35%)± | 5.49 | 3-25-2043 | 2,632,441 | 2,561,487 | ||
FNMA Series 2015-20 Class EF (1 Month LIBOR +0.35%)± | 5.49 | 4-25-2045 | 6,060,111 | 5,879,177 | ||
FNMA | 5.50 | 9-1-2052 | 4,321,643 | 4,457,115 | ||
FNMA%% | 5.50 | 6-13-2053 | 16,000,000 | 15,990,000 | ||
FNMA Series 2019-43 Class FC (1 Month LIBOR +0.40%)± | 5.54 | 8-25-2049 | 2,896,330 | 2,794,550 | ||
FNMA Series 2019-67 Class FB (1 Month LIBOR +0.45%)± | 5.59 | 11-25-2049 | 1,427,804 | 1,380,990 | ||
FNMA Series 2020-34 Class F (1 Month LIBOR +0.45%)± | 5.59 | 6-25-2050 | 1,989,081 | 1,917,876 | ||
FNMA Series 2019-15 Class FA (1 Month LIBOR +0.50%)± | 5.64 | 4-25-2049 | 1,439,267 | 1,396,060 | ||
FNMA | 6.00 | 2-1-2029 | 1,125 | 1,139 | ||
FNMA | 6.00 | 3-1-2033 | 15,156 | 15,637 | ||
FNMA | 6.00 | 11-1-2033 | 5,231 | 5,406 | ||
FNMA%% | 6.00 | 6-13-2053 | 36,900,000 | 37,332,422 | ||
FNMA%% | 6.00 | 7-13-2053 | 50,300,000 | 50,881,594 | ||
FNMA%% | 6.00 | 8-14-2053 | 68,100,000 | 68,834,203 | ||
The accompanying notes are an integral part of these financial statements.
32 | Allspring Core Bond Portfolio
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Agency securities (continued) | ||||||
FNMA (12 Month LIBOR +1.64%)± | 6.13 % | 1-1-2043 | $ | 247,831 | $251,640 | |
FNMA | 6.50 | 11-1-2052 | 1,850,900 | 1,960,146 | ||
FNMA | 6.50 | 12-1-2052 | 1,337,452 | 1,419,809 | ||
FNMA | 6.50 | 2-1-2053 | 981,567 | 1,042,011 | ||
FNMA (12 Month LIBOR +1.56%)± | 6.95 | 3-1-2043 | 57,068 | 56,598 | ||
FNMA | 7.00 | 2-1-2053 | 3,745,930 | 3,871,638 | ||
FNMA Interest STRIPS Series 414 Class A35 | 3.50 | 10-25-2042 | 4,856,395 | 4,582,533 | ||
FNMA Principal STRIPS¤ | 0.00 | 11-15-2030 | 18,777,000 | 13,840,124 | ||
GNMA Series 2021-23 Class MG | 1.50 | 2-20-2051 | 7,521,143 | 6,214,892 | ||
GNMA Series 2022-205 Class A | 2.00 | 9-20-2051 | 4,350,884 | 3,546,300 | ||
GNMA Series 2017-167 Class BQ | 2.50 | 8-20-2044 | 2,516,847 | 2,303,486 | ||
GNMA Series 2022-31 Class GH | 2.50 | 12-20-2049 | 7,909,274 | 7,025,070 | ||
GNMA Series 2022-107 Class C | 2.50 | 6-20-2051 | 11,846,710 | 10,106,939 | ||
GNMA Series 2022-50 Class DC | 2.50 | 8-20-2051 | 3,606,518 | 3,108,751 | ||
GNMA Series 2022-84 Class A | 2.50 | 1-20-2052 | 4,187,758 | 3,595,282 | ||
GNMA | 3.00 | 6-20-2043 | 4,233,969 | 3,832,267 | ||
GNMA | 3.00 | 8-20-2043 | 1,332,693 | 1,206,249 | ||
GNMA | 3.00 | 10-20-2046 | 608,149 | 544,198 | ||
GNMA | 3.00 | 12-20-2046 | 2,149,652 | 1,923,784 | ||
GNMA | 3.00 | 1-20-2047 | 2,445,552 | 2,187,735 | ||
GNMA | 3.00 | 3-20-2047 | 2,376,967 | 2,126,404 | ||
GNMA | 3.00 | 4-20-2047 | 3,297,581 | 2,949,974 | ||
GNMA | 3.00 | 5-20-2047 | 575,078 | 514,455 | ||
GNMA | 3.00 | 7-20-2047 | 2,397,176 | 2,144,475 | ||
GNMA | 3.00 | 9-20-2047 | 1,823,430 | 1,631,197 | ||
GNMA | 3.00 | 11-15-2047 | 11,042,226 | 10,207,911 | ||
GNMA | 3.00 | 11-20-2047 | 871,520 | 779,641 | ||
GNMA | 3.00 | 12-20-2047 | 236,318 | 211,404 | ||
GNMA | 3.00 | 1-20-2048 | 1,402,836 | 1,254,944 | ||
GNMA | 3.00 | 2-20-2048 | 1,059,784 | 948,809 | ||
GNMA | 3.00 | 3-20-2048 | 362,557 | 324,336 | ||
GNMA | 3.00 | 10-20-2050 | 9,557,438 | 8,625,093 | ||
GNMA | 3.50 | 1-20-2048 | 2,315,603 | 2,176,792 | ||
GNMA | 4.00 | 3-20-2048 | 633,079 | 604,330 | ||
GNMA | 4.00 | 4-20-2048 | 2,312,800 | 2,207,878 | ||
GNMA | 4.50 | 8-15-2047 | 401,327 | 401,596 | ||
GNMA | 4.50 | 6-20-2048 | 2,485,462 | 2,447,085 | ||
GNMA | 4.50 | 2-20-2049 | 2,849,868 | 2,734,088 | ||
GNMA Series 2012-141 Class WA±± | 4.52 | 11-16-2041 | 797,704 | 783,362 | ||
GNMA Series 2021-8 Class CY | 5.00 | 1-20-2051 | 931,452 | 929,861 | ||
GNMA Series 2021-27 Class CW±± | 5.00 | 2-20-2051 | 1,410,482 | 1,407,895 | ||
GNMA Series 2021-27 Class BD | 5.00 | 2-20-2051 | 2,370,876 | 2,401,432 | ||
GNMA Series 2021-27 Class Q | 5.00 | 2-20-2051 | 2,498,704 | 2,456,912 | ||
GNMA Series 2021-27 Class NT | 5.00 | 2-20-2051 | 2,877,815 | 2,821,535 | ||
GNMA Series 2022-197 Class LF (30 Day Average U.S. SOFR +0.70%)± | 5.63 | 11-20-2052 | 10,270,943 | 10,216,231 | ||
GNMA | 6.00 | 1-20-2053 | 4,902,916 | 5,026,090 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Portfolio | 33
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Agency securities (continued) | ||||||
GNMA%% | 6.00 % | 6-20-2053 | $ | 39,400,000 | $39,775,531 | |
GNMA%% | 6.00 | 7-20-2053 | 39,000,000 | 39,353,437 | ||
Total agency securities (Cost $1,790,403,880) | 1,737,506,349 | |||||
Asset-backed securities: 10.93% | ||||||
Ally Auto Receivables Trust Series 2022-3 Class A4 | 5.07 | 6-15-2031 | 1,860,000 | 1,868,092 | ||
American Express Credit Account Master Trust Series 2022-3 Class A | 3.75 | 8-15-2027 | 2,972,000 | 2,903,055 | ||
Americredit Automobile Receivables Trust Series 2023-1 Class A3 | 5.62 | 11-18-2027 | 4,948,000 | 4,961,911 | ||
AmeriCredit Automobile Receivables Trust Series 2022-1 Class A3 | 2.45 | 11-18-2026 | 1,432,000 | 1,381,058 | ||
AmeriCredit Automobile Receivables Trust Series 2022-2 Class A3 | 4.38 | 4-18-2028 | 3,567,000 | 3,506,537 | ||
Avis Budget Rental Car Funding AESOP LLC Series 2021-2A Class A144A | 1.66 | 2-20-2028 | 3,391,000 | 2,985,654 | ||
Avis Budget Rental Car Funding AESOP LLC Series 2019-3A Class A144A | 2.36 | 3-20-2026 | 3,825,000 | 3,613,401 | ||
Avis Budget Rental Car Funding AESOP LLC Series 2022-4A Class A144A | 4.77 | 2-20-2029 | 1,924,000 | 1,878,219 | ||
Avis Budget Rental Car Funding AESOP LLC Series 2023-2A Class A144A | 5.20 | 10-20-2027 | 4,141,000 | 4,110,009 | ||
Avis Budget Rental Car Funding AESOP LLC Series 2023-1A Class A144A | 5.25 | 4-20-2029 | 7,384,000 | 7,324,448 | ||
Avis Budget Rental Car Funding AESOP LLC Series 2023-4A Class A144A | 5.49 | 6-20-2029 | 8,703,000 | 8,681,048 | ||
Avis Budget Rental Car Funding AESOP LLC Series 2023-6A Class A144A%% | 5.81 | 12-20-2029 | 7,132,000 | 7,102,469 | ||
Barclays Dryrock Issuance Trust Series 2023-1 Class A | 4.72 | 2-15-2029 | 4,148,000 | 4,130,034 | ||
BMW Vehicle Lease Trust Series 2023-1 Class A4 | 5.07 | 6-25-2026 | 2,481,000 | 2,470,502 | ||
Capital One Multi-Asset Execution Trust Series 2022-A2 Class A | 3.49 | 5-15-2027 | 5,110,000 | 4,973,109 | ||
Capital One Multi-Asset Execution Trust Series 2023-A1 Class A | 4.42 | 5-15-2028 | 8,407,000 | 8,356,298 | ||
Capital One Prime Auto Receivables Trust Series 2023-1 Class A4 | 4.76 | 8-15-2028 | 3,423,000 | 3,414,336 | ||
Capital One Prime Auto Receivables Trust Series 2023-1 Class A3 | 4.87 | 2-15-2028 | 10,269,000 | 10,241,672 | ||
Chase Auto Owner Trust Series 2022-AA Class A4144A | 3.99 | 3-27-2028 | 2,419,000 | 2,365,830 | ||
College Avenue Student Loans LLC Series 2019-A Class A2144A | 3.28 | 12-28-2048 | 2,005,001 | 1,845,553 | ||
College Avenue Student Loans LLC Series 2018-A Class A2144A | 4.13 | 12-26-2047 | 1,193,743 | 1,129,613 | ||
College Avenue Student Loans LLC Series 2017-A Class A1 (1 Month LIBOR +1.65%)144A± | 6.79 | 11-26-2046 | 1,425,501 | 1,421,563 | ||
Discover Card Execution Note Trust Series 2022-A3 Class A3 | 3.56 | 7-15-2027 | 10,261,000 | 9,988,904 | ||
Discover Card Execution Note Trust Series 2023-A1 Class A | 4.31 | 3-15-2028 | 8,282,000 | 8,187,360 | ||
Discover Card Execution Note Trust Series 2022-A4 Class A | 5.03 | 10-15-2027 | 1,476,000 | 1,482,542 | ||
Enterprise Fleet Financing LLC Series 2023-1 Class A3144A | 5.42 | 10-22-2029 | 3,036,000 | 3,056,367 | ||
Enterprise Fleet Financing LLC Series 2023-1 Class A2144A | 5.51 | 1-22-2029 | 4,926,000 | 4,910,959 | ||
Ford Credit Auto Lease Trust Series 2023-A Class A4 | 4.83 | 5-15-2026 | 2,649,000 | 2,628,038 | ||
Ford Credit Auto Owner Trust Series 2022-1 Class A144A | 3.88 | 11-15-2034 | 11,752,000 | 11,329,486 | ||
Ford Credit Auto Owner Trust Series 2022-C Class A4 | 4.59 | 12-15-2027 | 4,273,000 | 4,237,645 | ||
Ford Credit Auto Owner Trust Series 2023-A Class A3 | 4.65 | 2-15-2028 | 7,598,000 | 7,564,317 | ||
Ford Credit Auto Owner Trust Series 2023-1 Class A144A | 4.85 | 8-15-2035 | 12,829,000 | 12,782,816 | ||
Ford Credit Auto Owner Trust Series 2022-D Class A4 | 5.30 | 3-15-2028 | 1,673,000 | 1,688,278 | ||
The accompanying notes are an integral part of these financial statements.
34 | Allspring Core Bond Portfolio
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Asset-backed securities (continued) | ||||||
Ford Credit Floorplan Master Owner Trust A Series 2023-1 Class A1144A | 4.92 % | 5-15-2028 | $ | 10,176,000 | $10,115,669 | |
GM Financial Automobile Leasing Trust Series 2023-2 Class A3 | 5.05 | 7-20-2026 | 4,944,000 | 4,928,570 | ||
GM Financial Automobile Leasing Trust Series 2023-2 Class A4 | 5.09 | 5-20-2027 | 2,343,000 | 2,339,856 | ||
GM Financial Automobile Leasing Trust Series 2023-1 Class A4 | 5.16 | 1-20-2027 | 3,702,000 | 3,698,882 | ||
GM Financial Consumer Automobile Receivables Trust Series 2022-2 Class A3 | 3.10 | 2-16-2027 | 8,146,000 | 7,888,691 | ||
GM Financial Consumer Automobile Receivables Trust Series 2022-2 Class A4 | 3.25 | 4-17-2028 | 5,291,000 | 5,078,288 | ||
GM Financial Consumer Automobile Receivables Trust Series 2022-4 Class A3 | 4.82 | 8-16-2027 | 3,022,000 | 3,004,644 | ||
GM Financial Revolving Receivables Trust Series 2023-1 Class A144A | 5.12 | 4-11-2035 | 6,953,000 | 6,988,334 | ||
GM Financial Revolving Receivables Trust Series 2022-1 Class A144A | 5.91 | 10-11-2035 | 4,422,000 | 4,601,009 | ||
Hertz Vehicle Financing III LLC Series 2022-1A Class A144A | 1.99 | 6-25-2026 | 8,169,000 | 7,612,127 | ||
Hertz Vehicle Financing III LLC Series 2023-2A Class A144A | 5.57 | 9-25-2029 | 8,139,000 | 8,250,454 | ||
Hertz Vehicle Financing III LP Series 2021-2A Class A144A | 1.68 | 12-27-2027 | 4,377,000 | 3,851,517 | ||
Hertz Vehicle Financing LLC Series 2022-4A Class A144A | 3.73 | 9-25-2026 | 1,924,000 | 1,846,475 | ||
Honda Auto Receivables Owner Trust Series 2022-2 Class A4 | 3.76 | 12-18-2028 | 2,317,000 | 2,252,220 | ||
Honda Auto Receivables Owner Trust Series 2023-2 Class A4 | 4.91 | 9-17-2029 | 1,358,000 | 1,360,739 | ||
Honda Auto Receivables Owner Trust Series 2023-1 Class A4 | 4.97 | 6-21-2029 | 4,278,000 | 4,304,429 | ||
Honda Auto Receivables Owner Trust Series 2023-1 Class A3 | 5.04 | 4-21-2027 | 8,900,000 | 8,905,207 | ||
Hyundai Auto Lease Securitization Trust Series 2022-C Class A4144A | 4.48 | 8-17-2026 | 4,938,000 | 4,863,839 | ||
Hyundai Auto Lease Securitization Trust Series 2023-B Class A4144A | 5.17 | 4-15-2027 | 3,749,000 | 3,727,943 | ||
Hyundai Auto Receivables Trust Series 2021-C Class A4 | 1.03 | 12-15-2027 | 2,976,000 | 2,732,863 | ||
Hyundai Auto Receivables Trust Series 2022-A Class A3 | 2.22 | 10-15-2026 | 5,544,000 | 5,320,583 | ||
Hyundai Auto Receivables Trust Series 2022-A Class A4 | 2.35 | 4-17-2028 | 1,708,000 | 1,605,217 | ||
Hyundai Auto Receivables Trust Series 2023-A Class A4 | 4.48 | 7-17-2028 | 3,320,000 | 3,291,650 | ||
Mercedes-Benz Auto Lease Trust Series 2023-A Class A3 | 4.74 | 1-15-2027 | 5,034,000 | 4,980,925 | ||
Mercedes-Benz Auto Receivables Trust Series 2023-1 Class A4 | 4.31 | 4-16-2029 | 2,935,000 | 2,897,323 | ||
Mercedes-Benz Auto Receivables Trust Series 2022-1 Class A4 | 5.25 | 2-15-2029 | 3,874,000 | 3,922,603 | ||
Navient Private Education Loan Trust Series 2014-AA Class A3 (1 Month LIBOR +1.60%)144A± | 6.71 | 10-15-2031 | 2,117,175 | 2,114,065 | ||
Navient Private Education Loan Trust Series 2016-AA Class A2B (1 Month LIBOR +2.15%)144A± | 7.26 | 12-15-2045 | 954,007 | 958,138 | ||
Navient Private Education Refinance Loan Trust Series 2021-A Class A144A | 0.84 | 5-15-2069 | 855,847 | 750,216 | ||
Navient Private Education Refinance Loan Trust Series 2021-BA Class A144A | 0.94 | 7-15-2069 | 1,309,506 | 1,141,554 | ||
Navient Private Education Refinance Loan Trust Series 2021-EA Class A144A | 0.97 | 12-16-2069 | 7,397,512 | 6,313,037 | ||
Navient Private Education Refinance Loan Trust Series 2021-CA Class A144A | 1.06 | 10-15-2069 | 5,416,248 | 4,718,790 | ||
Navient Private Education Refinance Loan Trust Series 2021-FA Class A144A | 1.11 | 2-18-2070 | 4,763,832 | 4,049,568 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Portfolio | 35
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Asset-backed securities (continued) | ||||||
Navient Private Education Refinance Loan Trust Series 2020-GA Class A144A | 1.17 % | 9-16-2069 | $ | 2,596,547 | $2,316,283 | |
Navient Private Education Refinance Loan Trust Series 2020-IA Class A1A144A | 1.33 | 4-15-2069 | 1,509,410 | 1,341,938 | ||
Navient Private Education Refinance Loan Trust Series 2020-BA Class A2144A | 2.12 | 1-15-2069 | 2,103,706 | 1,924,294 | ||
Navient Private Education Refinance Loan Trust Series 2022-A Class A144A | 2.23 | 7-15-2070 | 3,417,366 | 3,001,850 | ||
Navient Private Education Refinance Loan Trust Series 2019-FA Class A2144A | 2.60 | 8-15-2068 | 3,179,636 | 2,946,372 | ||
Navient Private Education Refinance Loan Trust Series 2019-D Class A2A144A | 3.01 | 12-15-2059 | 5,877,094 | 5,486,769 | ||
Navient Private Education Refinance Loan Trust Series 2019-CA Class A2144A | 3.13 | 2-15-2068 | 2,416,863 | 2,294,850 | ||
Navient Private Education Refinance Loan Trust Series 2019-A Class A2A144A | 3.42 | 1-15-2043 | 2,764,127 | 2,663,800 | ||
Navient Private Education Refinance Loan Trust Series 2018-CA Class A2144A | 3.52 | 6-16-2042 | 162,709 | 159,539 | ||
Navient Private Education Refinance Loan Trust Series 2018-DA Class A2A144A | 4.00 | 12-15-2059 | 2,866,334 | 2,748,821 | ||
Navient Student Loan Trust Series 2021-3A Class A1A144A | 1.77 | 8-25-2070 | 5,090,727 | 4,472,064 | ||
Navient Student Loan Trust Series 2019-BA Class A2A144A | 3.39 | 12-15-2059 | 4,478,159 | 4,255,449 | ||
Nelnet Student Loan Trust Series 2005-2 Class A5 (3 Month LIBOR +0.10%)± | 5.05 | 3-23-2037 | 9,695,221 | 9,470,098 | ||
Nelnet Student Loan Trust Series 2005-3 Class A5 (3 Month LIBOR +0.12%)± | 5.07 | 12-24-2035 | 7,334,224 | 7,176,363 | ||
Nelnet Student Loan Trust Series 2005-4 Class A4 (3 Month LIBOR +0.18%)± | 5.13 | 3-22-2032 | 1,872,848 | 1,806,450 | ||
Nelnet Student Loan Trust Series 2005-1 Class A5 (3 Month LIBOR +0.11%)± | 5.37 | 10-25-2033 | 9,841,267 | 9,507,574 | ||
Nelnet Student Loan Trust Series 2004-4 Class A5 (3 Month LIBOR +0.16%)± | 5.42 | 1-25-2037 | 3,461,912 | 3,401,873 | ||
Nelnet Student Loan Trust Series 2004-3 Class A5 (3 Month LIBOR +0.18%)± | 5.44 | 10-27-2036 | 1,184,399 | 1,153,972 | ||
Nissan Auto Receivables Owner Trust Series 2022-B Class A4 | 4.45 | 11-15-2029 | 2,437,000 | 2,410,392 | ||
Nissan Auto Receivables Owner Trust Series 2023-A Class A4 | 4.85 | 6-17-2030 | 1,724,000 | 1,749,306 | ||
PenFed Auto Receivables Owner Trust Series 2022-A Class A3144A | 3.96 | 4-15-2026 | 3,548,000 | 3,483,534 | ||
PenFed Auto Receivables Owner Trust Series 2022-A Class A4144A | 4.18 | 12-15-2028 | 1,743,000 | 1,707,687 | ||
Santander Drive Auto Receivables Trust Series 2022-2 Class A3 | 2.98 | 10-15-2026 | 8,571,108 | 8,459,130 | ||
Santander Drive Auto Receivables Trust Series 2022-3 Class A3 | 3.40 | 12-15-2026 | 3,524,000 | 3,469,847 | ||
Santander Drive Auto Receivables Trust Series 2022-5 Class A3 | 4.11 | 8-17-2026 | 4,588,000 | 4,533,007 | ||
Santander Drive Auto Receivables Trust Series 2022-4 Class A3 | 4.14 | 2-16-2027 | 5,140,000 | 5,065,039 | ||
Santander Drive Auto Receivables Trust Series 2022-6 Class A3 | 4.49 | 11-16-2026 | 8,785,000 | 8,671,475 | ||
Santander Drive Auto Receivables Trust Series 2022-7 Class A3 | 5.75 | 4-15-2027 | 1,964,000 | 1,965,591 | ||
SMB Private Education Loan Trust Series 2021-A Class APT1144A | 1.07 | 1-15-2053 | 6,801,045 | 5,965,292 | ||
SMB Private Education Loan Trust Series 2020-B Class A1A144A | 1.29 | 7-15-2053 | 2,573,697 | 2,301,060 | ||
SMB Private Education Loan Trust Series 2021-B Class A144A | 1.31 | 7-17-2051 | 2,488,094 | 2,208,053 | ||
The accompanying notes are an integral part of these financial statements.
36 | Allspring Core Bond Portfolio
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Asset-backed securities (continued) | ||||||
SMB Private Education Loan Trust Series 2021-D Class A1A144A | 1.34 % | 3-17-2053 | $ | 6,837,204 | $6,080,052 | |
SMB Private Education Loan Trust Series 2020-PTA Class A2A144A | 1.60 | 9-15-2054 | 4,005,688 | 3,588,966 | ||
SMB Private Education Loan Trust Series 2020-PTB Class A2A144A | 1.60 | 9-15-2054 | 11,530,624 | 10,309,320 | ||
SMB Private Education Loan Trust Series 2021-E Class A1A144A | 1.68 | 2-15-2051 | 5,479,444 | 4,927,125 | ||
SMB Private Education Loan Trust Series 2016-B Class A2A144A | 2.43 | 2-17-2032 | 943,673 | 906,918 | ||
SMB Private Education Loan Trust Series 2019-A Class A2A144A | 3.44 | 7-15-2036 | 2,492,027 | 2,387,323 | ||
SMB Private Education Loan Trust Series 2018-C Class A2A144A | 3.63 | 11-15-2035 | 1,773,585 | 1,695,158 | ||
SMB Private Education Loan Trust Series 2016-C Class A2B (1 Month LIBOR +1.10%)144A± | 6.21 | 9-15-2034 | 823,605 | 820,569 | ||
SMB Private Education Loan Trust Series 2016-B Class A2B (1 Month LIBOR +1.45%)144A± | 6.56 | 2-17-2032 | 735,631 | 735,196 | ||
SMB Private Education Loan Trust Series 2023-B Class A1B144A | 6.79 | 10-16-2056 | 4,329,000 | 4,332,896 | ||
SoFi Professional Loan Program LLC Series 2021-A Class AFX144A | 1.03 | 8-17-2043 | 1,615,306 | 1,371,296 | ||
SoFi Professional Loan Program LLC Series 2021-B Class AFX144A | 1.14 | 2-15-2047 | 3,750,291 | 3,158,869 | ||
SoFi Professional Loan Program LLC Series 2020-C Class AFX144A | 1.95 | 2-15-2046 | 444,451 | 401,032 | ||
SoFi Professional Loan Program LLC Series 2017-D Class A2FX144A | 2.65 | 9-25-2040 | 99,713 | 95,100 | ||
SoFi Professional Loan Program LLC Series 2017-E Class A2B144A | 2.72 | 11-26-2040 | 16,892 | 16,844 | ||
Synchrony Card Funding LLC Series 2022-A2 Class A | 3.86 | 7-15-2028 | 2,737,000 | 2,677,227 | ||
T-Mobile U.S. Trust Series 2022-1A Class A144A | 4.91 | 5-22-2028 | 3,719,000 | 3,703,101 | ||
Toyota Auto Receivables Owner Trust Series 2022-B Class A4 | 3.11 | 8-16-2027 | 3,985,000 | 3,806,220 | ||
Toyota Auto Receivables Owner Trust Series 2022-C Class A4 | 3.77 | 2-15-2028 | 3,857,000 | 3,742,803 | ||
Toyota Auto Receivables Owner Trust Series 2023-A Class A4 | 4.42 | 8-15-2028 | 2,768,000 | 2,741,876 | ||
Toyota Auto Receivables Owner Trust Series 2023-B Class A3 | 4.71 | 2-15-2028 | 4,376,000 | 4,363,904 | ||
Toyota Auto Receivables Owner Trust Series 2022-D Class A4 | 5.43 | 4-17-2028 | 2,132,000 | 2,168,987 | ||
Verizon Master Trust Series 2022-2 Class A | 1.53 | 7-20-2028 | 3,146,000 | 2,961,435 | ||
Verizon Master Trust Series 2022-4 Class A | 3.40 | 11-20-2028 | 6,886,000 | 6,678,041 | ||
Verizon Master Trust Series 2022-6 Class A | 3.67 | 1-22-2029 | 6,257,000 | 6,088,608 | ||
Verizon Master Trust Series 2023-1 Class A | 4.49 | 1-22-2029 | 6,417,000 | 6,355,352 | ||
Verizon Master Trust Series 2023-2 Class A | 4.89 | 4-13-2028 | 2,391,000 | 2,382,218 | ||
World Omni Select Auto Trust Series 2023-A Class A2A | 5.92 | 3-15-2027 | 4,126,000 | 4,125,898 | ||
Total asset-backed securities (Cost $527,432,912) | 509,676,654 | |||||
Corporate bonds and notes: 18.87% | ||||||
Basic materials: 0.17% | ||||||
Chemicals: 0.10% | ||||||
Dow Chemical Co. | 6.90 | 5-15-2053 | 1,654,000 | 1,843,252 | ||
Rohm & Haas Co. | 7.85 | 7-15-2029 | 2,735,000 | 3,091,520 | ||
4,934,772 | ||||||
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Portfolio | 37
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Mining: 0.07% | ||||||
Glencore Funding LLC144A | 2.63 % | 9-23-2031 | $ | 764,000 | $615,145 | |
Glencore Funding LLC144A | 5.70 | 5-8-2033 | 2,532,000 | 2,507,257 | ||
3,122,402 | ||||||
Communications: 1.63% | ||||||
Internet: 0.14% | ||||||
Meta Platforms, Inc. | 5.60 | 5-15-2053 | 3,340,000 | 3,337,861 | ||
Meta Platforms, Inc. | 5.75 | 5-15-2063 | 3,340,000 | 3,325,060 | ||
6,662,921 | ||||||
Media: 0.31% | ||||||
Charter Communications Operating LLC/Charter Communications Operating Capital | 3.50 | 6-1-2041 | 910,000 | 600,491 | ||
Charter Communications Operating LLC/Charter Communications Operating Capital | 3.50 | 3-1-2042 | 5,744,000 | 3,751,057 | ||
Comcast Corp. | 2.99 | 11-1-2063 | 1,982,000 | 1,228,563 | ||
Comcast Corp. | 4.05 | 11-1-2052 | 1,708,000 | 1,398,812 | ||
Comcast Corp. | 5.35 | 11-15-2027 | 3,481,000 | 3,580,402 | ||
Comcast Corp. | 5.50 | 11-15-2032 | 876,000 | 918,460 | ||
Discovery Communications LLC | 4.00 | 9-15-2055 | 1,852,000 | 1,176,104 | ||
Paramount Global | 4.95 | 5-19-2050 | 2,139,000 | 1,591,739 | ||
14,245,628 | ||||||
Telecommunications: 1.18% | ||||||
AT&T, Inc. | 3.50 | 6-1-2041 | 1,693,000 | 1,291,983 | ||
AT&T, Inc. | 3.65 | 9-15-2059 | 1,658,000 | 1,135,549 | ||
AT&T, Inc. | 3.80 | 12-1-2057 | 4,769,000 | 3,393,156 | ||
AT&T, Inc.%% | 5.40 | 2-15-2034 | 9,976,000 | 9,993,806 | ||
T-Mobile USA, Inc. | 1.50 | 2-15-2026 | 1,186,000 | 1,077,098 | ||
T-Mobile USA, Inc. | 2.25 | 2-15-2026 | 3,699,000 | 3,428,666 | ||
T-Mobile USA, Inc. | 2.55 | 2-15-2031 | 2,648,000 | 2,215,038 | ||
T-Mobile USA, Inc. | 2.88 | 2-15-2031 | 45,000 | 38,450 | ||
T-Mobile USA, Inc. | 3.50 | 4-15-2031 | 27,000 | 24,050 | ||
T-Mobile USA, Inc. | 3.75 | 4-15-2027 | 5,635,000 | 5,353,240 | ||
T-Mobile USA, Inc. | 4.80 | 7-15-2028 | 3,518,000 | 3,471,821 | ||
T-Mobile USA, Inc. | 4.95 | 3-15-2028 | 3,514,000 | 3,500,944 | ||
T-Mobile USA, Inc. | 5.05 | 7-15-2033 | 4,397,000 | 4,335,614 | ||
T-Mobile USA, Inc. | 5.65 | 1-15-2053 | 5,383,000 | 5,375,558 | ||
Verizon Communications, Inc. | 2.36 | 3-15-2032 | 4,399,000 | 3,547,649 | ||
Verizon Communications, Inc. | 2.65 | 11-20-2040 | 2,219,000 | 1,523,245 | ||
Verizon Communications, Inc. | 5.05 | 5-9-2033 | 5,278,000 | 5,223,825 | ||
54,929,692 | ||||||
Consumer, cyclical: 1.32% | ||||||
Auto manufacturers: 0.61% | ||||||
Ford Motor Credit Co. LLC | 2.90 | 2-10-2029 | 2,838,000 | 2,307,085 | ||
Ford Motor Credit Co. LLC | 6.80 | 5-12-2028 | 2,066,000 | 2,044,573 | ||
General Motors Co. | 5.20 | 4-1-2045 | 1,414,000 | 1,176,140 | ||
The accompanying notes are an integral part of these financial statements.
38 | Allspring Core Bond Portfolio
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Auto manufacturers (continued) | ||||||
General Motors Financial Co., Inc. | 3.10 % | 1-12-2032 | $ | 1,183,000 | $953,561 | |
General Motors Financial Co., Inc. | 5.85 | 4-6-2030 | 2,645,000 | 2,618,881 | ||
Hyundai Capital America144A | 0.80 | 1-8-2024 | 1,393,000 | 1,351,062 | ||
Hyundai Capital America144A | 1.30 | 1-8-2026 | 3,340,000 | 2,995,210 | ||
Hyundai Capital America144A | 5.50 | 3-30-2026 | 4,412,000 | 4,412,514 | ||
Hyundai Capital America144A | 5.60 | 3-30-2028 | 5,511,000 | 5,530,055 | ||
Toyota Motor Credit Corp. | 4.55 | 5-17-2030 | 5,282,000 | 5,211,629 | ||
28,600,710 | ||||||
Entertainment: 0.20% | ||||||
Warnermedia Holdings, Inc. | 5.05 | 3-15-2042 | 3,477,000 | 2,813,143 | ||
Warnermedia Holdings, Inc. | 5.14 | 3-15-2052 | 6,185,000 | 4,827,015 | ||
Warnermedia Holdings, Inc. | 5.39 | 3-15-2062 | 2,193,000 | 1,705,872 | ||
9,346,030 | ||||||
Leisure time: 0.06% | ||||||
Harley-Davidson Financial Services, Inc. Series CO144A | 6.50 | 3-10-2028 | 2,645,000 | 2,652,871 | ||
Retail: 0.45% | ||||||
Lowe’s Cos., Inc. | 4.25 | 4-1-2052 | 3,322,000 | 2,657,617 | ||
Lowe’s Cos., Inc. | 5.15 | 7-1-2033 | 4,858,000 | 4,846,803 | ||
Lowe’s Cos., Inc. | 5.63 | 4-15-2053 | 4,303,000 | 4,201,330 | ||
Lowe’s Cos., Inc. | 5.75 | 7-1-2053 | 1,767,000 | 1,751,067 | ||
Lowe’s Cos., Inc. | 5.85 | 4-1-2063 | 883,000 | 859,239 | ||
Walmart, Inc. | 4.10 | 4-15-2033 | 4,419,000 | 4,325,244 | ||
Walmart, Inc. | 4.50 | 4-15-2053 | 2,652,000 | 2,541,742 | ||
21,183,042 | ||||||
Consumer, non-cyclical: 3.82% | ||||||
Agriculture: 0.71% | ||||||
Bunge Ltd. Finance Corp. | 1.63 | 8-17-2025 | 1,817,000 | 1,677,192 | ||
Philip Morris International, Inc. | 4.88 | 2-13-2026 | 2,855,000 | 2,849,299 | ||
Philip Morris International, Inc. | 4.88 | 2-15-2028 | 7,637,000 | 7,609,977 | ||
Philip Morris International, Inc. | 5.00 | 11-17-2025 | 3,740,000 | 3,745,880 | ||
Philip Morris International, Inc. | 5.13 | 11-17-2027 | 5,609,000 | 5,666,747 | ||
Philip Morris International, Inc. | 5.13 | 2-15-2030 | 5,741,000 | 5,681,738 | ||
Philip Morris International, Inc. | 5.38 | 2-15-2033 | 4,775,000 | 4,743,252 | ||
Philip Morris International, Inc. | 5.75 | 11-17-2032 | 898,000 | 920,328 | ||
32,894,413 | ||||||
Beverages: 0.40% | ||||||
Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide, Inc. | 4.70 | 2-1-2036 | 9,769,000 | 9,569,427 | ||
Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide, Inc. | 4.90 | 2-1-2046 | 2,552,000 | 2,423,621 | ||
Anheuser-Busch InBev Worldwide, Inc. | 4.38 | 4-15-2038 | 4,697,000 | 4,402,513 | ||
Constellation Brands, Inc. | 4.90 | 5-1-2033 | 2,550,000 | 2,505,197 | ||
18,900,758 | ||||||
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Portfolio | 39
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Biotechnology: 0.67% | ||||||
Amgen, Inc. | 5.15 % | 3-2-2028 | $ | 5,283,000 | $5,326,695 | |
Amgen, Inc. | 5.25 | 3-2-2025 | 8,796,000 | 8,820,470 | ||
Amgen, Inc. | 5.25 | 3-2-2033 | 881,000 | 884,112 | ||
Amgen, Inc. | 5.65 | 3-2-2053 | 9,986,000 | 9,989,743 | ||
Gilead Sciences, Inc. | 1.65 | 10-1-2030 | 1,584,000 | 1,293,254 | ||
Gilead Sciences, Inc. | 2.60 | 10-1-2040 | 2,741,000 | 1,958,834 | ||
Gilead Sciences, Inc. | 4.00 | 9-1-2036 | 1,410,000 | 1,281,970 | ||
Gilead Sciences, Inc. | 4.60 | 9-1-2035 | 2,002,000 | 1,931,913 | ||
31,486,991 | ||||||
Commercial services: 0.06% | ||||||
Quanta Services, Inc. | 0.95 | 10-1-2024 | 3,148,000 | 2,946,809 | ||
Cosmetics/Personal Care: 0.30% | ||||||
Kenvue, Inc.144A | 4.90 | 3-22-2033 | 7,049,000 | 7,177,915 | ||
Kenvue, Inc.144A | 5.05 | 3-22-2028 | 3,524,000 | 3,599,420 | ||
Kenvue, Inc.144A | 5.05 | 3-22-2053 | 2,202,000 | 2,216,560 | ||
Kenvue, Inc.144A | 5.20 | 3-22-2063 | 881,000 | 884,829 | ||
13,878,724 | ||||||
Healthcare-products: 0.13% | ||||||
Abbott Laboratories | 1.40 | 6-30-2030 | 3,964,000 | 3,257,550 | ||
Abbott Laboratories | 4.75 | 11-30-2036 | 2,646,000 | 2,663,435 | ||
5,920,985 | ||||||
Healthcare-services: 0.72% | ||||||
HCA, Inc.144A | 4.63 | 3-15-2052 | 1,688,000 | 1,359,448 | ||
HCA, Inc. | 5.20 | 6-1-2028 | 8,161,000 | 8,110,538 | ||
HCA, Inc. | 5.90 | 6-1-2053 | 3,992,000 | 3,847,687 | ||
Roche Holdings, Inc.144A | 2.08 | 12-13-2031 | 4,610,000 | 3,846,444 | ||
UnitedHealth Group, Inc. | 3.05 | 5-15-2041 | 829,000 | 636,106 | ||
UnitedHealth Group, Inc. | 3.25 | 5-15-2051 | 2,617,000 | 1,909,209 | ||
UnitedHealth Group, Inc. | 4.00 | 5-15-2029 | 3,351,000 | 3,240,191 | ||
UnitedHealth Group, Inc. | 4.50 | 4-15-2033 | 2,737,000 | 2,685,374 | ||
UnitedHealth Group, Inc. | 5.05 | 4-15-2053 | 1,641,000 | 1,611,152 | ||
UnitedHealth Group, Inc. | 5.20 | 4-15-2063 | 1,821,000 | 1,782,714 | ||
UnitedHealth Group, Inc. | 5.88 | 2-15-2053 | 4,208,000 | 4,601,044 | ||
33,629,907 | ||||||
Pharmaceuticals: 0.83% | ||||||
AbbVie, Inc. | 4.05 | 11-21-2039 | 1,871,000 | 1,604,647 | ||
AbbVie, Inc. | 4.25 | 11-21-2049 | 8,986,000 | 7,611,212 | ||
AbbVie, Inc. | 4.30 | 5-14-2036 | 1,146,000 | 1,056,146 | ||
AbbVie, Inc. | 4.45 | 5-14-2046 | 1,166,000 | 1,005,016 | ||
AbbVie, Inc. | 4.55 | 3-15-2035 | 2,641,000 | 2,517,419 | ||
Astrazeneca Finance LLC | 4.88 | 3-3-2028 | 3,862,000 | 3,911,132 | ||
Astrazeneca Finance LLC | 4.90 | 3-3-2030 | 5,278,000 | 5,357,346 | ||
Cigna Group | 5.40 | 3-15-2033 | 2,197,000 | 2,240,638 | ||
The accompanying notes are an integral part of these financial statements.
40 | Allspring Core Bond Portfolio
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Pharmaceuticals (continued) | ||||||
CVS Health Corp. | 4.88 % | 7-20-2035 | $ | 518,000 | $493,512 | |
CVS Health Corp.%% | 5.88 | 6-1-2053 | 2,098,000 | 2,107,147 | ||
Eli Lilly & Co. | 4.70 | 2-27-2033 | 1,762,000 | 1,794,223 | ||
Eli Lilly & Co. | 4.88 | 2-27-2053 | 2,641,000 | 2,660,595 | ||
Eli Lilly & Co. | 4.95 | 2-27-2063 | 1,232,000 | 1,223,334 | ||
Merck & Co., Inc. | 4.50 | 5-17-2033 | 1,784,000 | 1,780,106 | ||
Merck & Co., Inc. | 5.00 | 5-17-2053 | 1,784,000 | 1,795,539 | ||
Merck & Co., Inc. | 5.15 | 5-17-2063 | 1,338,000 | 1,349,950 | ||
38,507,962 | ||||||
Energy: 0.97% | ||||||
Oil & gas: 0.39% | ||||||
BP Capital Markets America, Inc. | 4.81 | 2-13-2033 | 9,666,000 | 9,557,661 | ||
Exxon Mobil Corp. | 3.45 | 4-15-2051 | 4,432,000 | 3,400,770 | ||
Exxon Mobil Corp. | 4.33 | 3-19-2050 | 5,833,000 | 5,214,132 | ||
18,172,563 | ||||||
Pipelines: 0.58% | ||||||
Energy Transfer LP | 4.40 | 3-15-2027 | 781,000 | 753,849 | ||
Energy Transfer LP | 4.95 | 5-15-2028 | 5,833,000 | 5,695,001 | ||
Energy Transfer LP | 5.30 | 4-15-2047 | 4,562,000 | 3,864,070 | ||
Energy Transfer LP | 5.40 | 10-1-2047 | 1,340,000 | 1,151,985 | ||
Energy Transfer LP | 5.75 | 2-15-2033 | 6,414,000 | 6,431,453 | ||
Energy Transfer LP | 6.13 | 12-15-2045 | 1,410,000 | 1,313,935 | ||
MPLX LP | 4.95 | 3-14-2052 | 3,270,000 | 2,691,860 | ||
MPLX LP | 5.00 | 3-1-2033 | 5,302,000 | 5,101,120 | ||
27,003,273 | ||||||
Financial: 5.45% | ||||||
Banks: 3.25% | ||||||
Bank of America Corp. (U.S. SOFR +0.96%)± | 1.73 | 7-22-2027 | 8,776,000 | 7,826,458 | ||
Bank of America Corp. (3 Month LIBOR +1.04%)± | 3.42 | 12-20-2028 | 15,869,000 | 14,593,009 | ||
Bank of America Corp. (U.S. SOFR +1.29%)± | 5.08 | 1-20-2027 | 7,776,000 | 7,717,527 | ||
Bank of America Corp. (U.S. SOFR +1.63%)± | 5.20 | 4-25-2029 | 7,763,000 | 7,735,782 | ||
Bank of America Corp. (U.S. SOFR +1.91%)± | 5.29 | 4-25-2034 | 16,110,000 | 16,007,762 | ||
Bank of New York Mellon Corp. (U.S. SOFR +1.03%)± | 4.95 | 4-26-2027 | 10,565,000 | 10,530,227 | ||
Bank of New York Mellon Corp. Series J (U.S. SOFR +1.61%)± | 4.97 | 4-26-2034 | 9,684,000 | 9,628,328 | ||
Citigroup, Inc. | 6.17 | 5-25-2034 | 10,498,000 | 10,646,525 | ||
Goldman Sachs Group, Inc. (U.S. SOFR +0.91%)± | 1.95 | 10-21-2027 | 3,923,000 | 3,493,836 | ||
KeyBank NA | 5.00 | 1-26-2033 | 5,524,000 | 4,854,680 | ||
M&T Bank Corp. (U.S. SOFR +1.85%)± | 5.05 | 1-27-2034 | 3,251,000 | 2,999,997 | ||
Manufacturers & Traders Trust Co. | 4.70 | 1-27-2028 | 2,346,000 | 2,195,309 | ||
Morgan Stanley (U.S. SOFR +1.73%)± | 5.12 | 2-1-2029 | 1,749,000 | 1,740,257 | ||
Morgan Stanley (U.S. SOFR +1.59%)± | 5.16 | 4-20-2029 | 1,749,000 | 1,743,289 | ||
Morgan Stanley (U.S. SOFR +1.87%)± | 5.25 | 4-21-2034 | 5,282,000 | 5,245,303 | ||
Morgan Stanley (U.S. SOFR +2.56%)± | 6.34 | 10-18-2033 | 6,020,000 | 6,446,819 | ||
National Securities Clearing Corp. | 5.00 | 5-30-2028 | 2,746,000 | 2,756,713 | ||
Santander Holdings USA, Inc. (U.S. SOFR +2.36%)± | 6.50 | 3-9-2029 | 7,197,000 | 7,296,294 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Portfolio | 41
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Banks (continued) | ||||||
Wells Fargo & Co. (U.S. SOFR +2.10%)± | 4.90 % | 7-25-2033 | $ | 14,664,000 | $14,145,522 | |
Wells Fargo & Co. (U.S. SOFR +2.02%)± | 5.39 | 4-24-2034 | 13,973,000 | 13,991,419 | ||
151,595,056 | ||||||
Diversified financial services: 0.46% | ||||||
American Express Co. (U.S. SOFR +1.84%)± | 5.04 | 5-1-2034 | 7,917,000 | 7,815,727 | ||
Antares Holdings LP144A | 3.75 | 7-15-2027 | 4,042,000 | 3,389,434 | ||
Charles Schwab Corp. | 5.64 | 5-19-2029 | 7,132,000 | 7,139,661 | ||
Charles Schwab Corp. | 5.85 | 5-19-2034 | 3,170,000 | 3,213,255 | ||
21,558,077 | ||||||
Insurance: 0.25% | ||||||
American International Group, Inc. | 5.13 | 3-27-2033 | 1,636,000 | 1,603,042 | ||
Brighthouse Financial, Inc. | 3.85 | 12-22-2051 | 1,564,000 | 959,347 | ||
Progressive Corp. | 4.95 | 6-15-2033 | 4,403,000 | 4,393,770 | ||
SBL Holdings, Inc.144A | 5.00 | 2-18-2031 | 5,480,000 | 4,454,810 | ||
11,410,969 | ||||||
REITS: 1.49% | ||||||
Agree LP | 2.00 | 6-15-2028 | 3,303,000 | 2,779,600 | ||
Agree LP | 2.60 | 6-15-2033 | 751,000 | 580,846 | ||
Agree LP | 4.80 | 10-1-2032 | 1,656,000 | 1,546,580 | ||
American Homes 4 Rent LP | 3.63 | 4-15-2032 | 3,041,000 | 2,628,809 | ||
American Homes 4 Rent LP | 4.30 | 4-15-2052 | 1,362,000 | 1,028,507 | ||
American Tower Corp. | 2.95 | 1-15-2051 | 881,000 | 543,900 | ||
American Tower Corp. | 3.13 | 1-15-2027 | 1,490,000 | 1,383,130 | ||
American Tower Corp. | 5.50 | 3-15-2028 | 3,518,000 | 3,554,686 | ||
American Tower Corp. | 5.55 | 7-15-2033 | 4,373,000 | 4,401,627 | ||
Boston Properties LP | 6.50 | 1-15-2034 | 703,000 | 685,116 | ||
Brixmor Operating Partnership LP | 2.50 | 8-16-2031 | 2,907,000 | 2,263,004 | ||
Crown Castle, Inc. | 1.05 | 7-15-2026 | 4,738,000 | 4,170,359 | ||
Crown Castle, Inc. | 2.90 | 3-15-2027 | 2,545,000 | 2,350,502 | ||
Crown Castle, Inc. | 2.90 | 4-1-2041 | 1,760,000 | 1,217,137 | ||
Crown Castle, Inc. | 5.00 | 1-11-2028 | 7,040,000 | 6,982,844 | ||
Essex Portfolio LP | 2.55 | 6-15-2031 | 1,567,000 | 1,278,529 | ||
Federal Realty Investment Trust | 3.95 | 1-15-2024 | 2,102,000 | 2,078,961 | ||
Invitation Homes Operating Partnership LP | 2.00 | 8-15-2031 | 524,000 | 399,303 | ||
Invitation Homes Operating Partnership LP | 4.15 | 4-15-2032 | 3,026,000 | 2,715,992 | ||
Mid-America Apartments LP | 4.30 | 10-15-2023 | 1,558,000 | 1,548,944 | ||
Realty Income Corp. | 2.20 | 6-15-2028 | 1,629,000 | 1,424,167 | ||
Realty Income Corp. | 2.85 | 12-15-2032 | 2,200,000 | 1,803,344 | ||
Realty Income Corp. | 4.85 | 3-15-2030 | 2,112,000 | 2,066,087 | ||
Realty Income Corp. | 4.90 | 7-15-2033 | 2,935,000 | 2,820,952 | ||
Realty Income Corp. | 5.63 | 10-13-2032 | 3,076,000 | 3,130,801 | ||
Regency Centers LP | 2.95 | 9-15-2029 | 4,164,000 | 3,621,227 | ||
STORE Capital Corp. | 2.70 | 12-1-2031 | 1,057,000 | 726,600 | ||
STORE Capital Corp. | 2.75 | 11-18-2030 | 2,689,000 | 1,948,675 | ||
STORE Capital Corp. | 4.50 | 3-15-2028 | 4,064,000 | 3,506,625 | ||
The accompanying notes are an integral part of these financial statements.
42 | Allspring Core Bond Portfolio
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
REITS (continued) | ||||||
STORE Capital Corp. | 4.63 % | 3-15-2029 | $ | 1,939,000 | $1,670,908 | |
Sun Communities Operating LP | 4.20 | 4-15-2032 | 3,041,000 | 2,653,975 | ||
69,511,737 | ||||||
Industrial: 1.27% | ||||||
Aerospace/defense: 0.60% | ||||||
Boeing Co. | 2.20 | 2-4-2026 | 5,990,000 | 5,574,174 | ||
Boeing Co. | 3.25 | 2-1-2035 | 1,939,000 | 1,561,128 | ||
Boeing Co. | 3.75 | 2-1-2050 | 3,461,000 | 2,549,822 | ||
Boeing Co. | 5.93 | 5-1-2060 | 2,676,000 | 2,608,350 | ||
Lockheed Martin Corp. | 4.75 | 2-15-2034 | 6,314,000 | 6,313,854 | ||
Northrop Grumman Corp. | 4.40 | 5-1-2030 | 2,026,000 | 1,988,705 | ||
Raytheon Technologies Corp. | 5.15 | 2-27-2033 | 4,578,000 | 4,655,863 | ||
Raytheon Technologies Corp. | 5.38 | 2-27-2053 | 2,839,000 | 2,873,207 | ||
28,125,103 | ||||||
Environmental control: 0.12% | ||||||
Republic Services, Inc. | 4.88 | 4-1-2029 | 2,648,000 | 2,654,068 | ||
Republic Services, Inc. | 5.00 | 4-1-2034 | 2,648,000 | 2,651,343 | ||
5,305,411 | ||||||
Machinery-construction & mining: 0.11% | ||||||
Caterpillar Financial Services Corp. | 4.35 | 5-15-2026 | 5,278,000 | 5,252,095 | ||
Machinery-diversified: 0.27% | ||||||
John Deere Capital Corp. | 4.15 | 9-15-2027 | 8,315,000 | 8,203,529 | ||
John Deere Capital Corp. | 4.90 | 3-3-2028 | 4,397,000 | 4,468,481 | ||
12,672,010 | ||||||
Transportation: 0.17% | ||||||
Burlington Northern Santa Fe LLC | 4.45 | 1-15-2053 | 705,000 | 639,584 | ||
Crowley Conro LLC | 4.18 | 8-15-2043 | 2,377,138 | 2,267,699 | ||
Union Pacific Corp. | 2.38 | 5-20-2031 | 1,678,000 | 1,426,125 | ||
Union Pacific Corp. | 2.80 | 2-14-2032 | 2,278,000 | 1,974,393 | ||
Union Pacific Corp. | 3.38 | 2-14-2042 | 1,895,000 | 1,509,293 | ||
7,817,094 | ||||||
Technology: 2.33% | ||||||
Computers: 0.44% | ||||||
Apple, Inc. | 2.38 | 2-8-2041 | 1,284,000 | 942,608 | ||
Apple, Inc. | 2.40 | 8-20-2050 | 11,000 | 7,238 | ||
Apple, Inc. | 2.65 | 5-11-2050 | 2,432,000 | 1,673,069 | ||
Apple, Inc. | 2.65 | 2-8-2051 | 1,081,000 | 739,124 | ||
Apple, Inc. | 3.95 | 8-8-2052 | 2,478,000 | 2,161,018 | ||
Apple, Inc. | 4.00 | 5-10-2028 | 5,278,000 | 5,255,621 | ||
Apple, Inc. | 4.10 | 8-8-2062 | 1,257,000 | 1,090,390 | ||
Apple, Inc. | 4.15 | 5-10-2030 | 2,639,000 | 2,637,252 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Portfolio | 43
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Computers (continued) | ||||||
Apple, Inc. | 4.30 % | 5-10-2033 | $ | 3,518,000 | $3,525,997 | |
Apple, Inc. | 4.85 | 5-10-2053 | 2,287,000 | 2,300,984 | ||
20,333,301 | ||||||
Semiconductors: 1.08% | ||||||
Broadcom, Inc.144A | 2.45 | 2-15-2031 | 2,761,000 | 2,229,399 | ||
Broadcom, Inc. | 3.15 | 11-15-2025 | 2,069,000 | 1,974,657 | ||
Broadcom, Inc.144A | 3.42 | 4-15-2033 | 2,269,000 | 1,884,481 | ||
Broadcom, Inc.144A | 3.47 | 4-15-2034 | 1,771,000 | 1,445,060 | ||
Broadcom, Inc.144A | 4.93 | 5-15-2037 | 2,522,000 | 2,268,196 | ||
Intel Corp. | 2.80 | 8-12-2041 | 4,129,000 | 2,901,689 | ||
Intel Corp. | 5.63 | 2-10-2043 | 1,012,000 | 1,011,806 | ||
Intel Corp. | 5.70 | 2-10-2053 | 1,754,000 | 1,732,686 | ||
Intel Corp. | 5.90 | 2-10-2063 | 2,461,000 | 2,449,526 | ||
KLA Corp. | 3.30 | 3-1-2050 | 1,445,000 | 1,070,404 | ||
KLA Corp. | 4.95 | 7-15-2052 | 1,469,000 | 1,417,836 | ||
Micron Technology, Inc. | 3.48 | 11-1-2051 | 864,000 | 554,229 | ||
Micron Technology, Inc. | 5.38 | 4-15-2028 | 8,840,000 | 8,721,505 | ||
Micron Technology, Inc. | 5.88 | 2-9-2033 | 1,038,000 | 1,033,342 | ||
QUALCOMM, Inc. | 6.00 | 5-20-2053 | 3,977,000 | 4,304,332 | ||
Texas Instruments, Inc. | 4.90 | 3-14-2033 | 7,049,000 | 7,227,278 | ||
Texas Instruments, Inc. | 5.00 | 3-14-2053 | 4,406,000 | 4,396,515 | ||
Texas Instruments, Inc. | 5.05 | 5-18-2063 | 2,641,000 | 2,582,653 | ||
Xilinx, Inc. | 2.38 | 6-1-2030 | 1,351,000 | 1,168,916 | ||
50,374,510 | ||||||
Software: 0.81% | ||||||
Fiserv, Inc. | 5.45 | 3-2-2028 | 4,238,000 | 4,303,244 | ||
Fiserv, Inc. | 5.60 | 3-2-2033 | 901,000 | 922,995 | ||
Oracle Corp. | 4.00 | 7-15-2046 | 3,065,000 | 2,296,609 | ||
Oracle Corp. | 4.38 | 5-15-2055 | 1,064,000 | 822,484 | ||
Oracle Corp. | 4.90 | 2-6-2033 | 897,000 | 866,444 | ||
Oracle Corp. | 5.55 | 2-6-2053 | 2,348,000 | 2,192,654 | ||
Oracle Corp. | 6.90 | 11-9-2052 | 5,729,000 | 6,235,263 | ||
VMware, Inc. | 0.60 | 8-15-2023 | 7,728,000 | 7,648,868 | ||
VMware, Inc. | 1.00 | 8-15-2024 | 5,487,000 | 5,181,447 | ||
VMware, Inc. | 1.40 | 8-15-2026 | 5,134,000 | 4,546,216 | ||
VMware, Inc. | 4.70 | 5-15-2030 | 3,172,000 | 3,015,799 | ||
38,032,023 | ||||||
Utilities: 1.91% | ||||||
Electric: 1.91% | ||||||
American Transmission Systems, Inc.144A | 2.65 | 1-15-2032 | 1,097,000 | 910,068 | ||
Baltimore Gas & Electric Co. | 2.25 | 6-15-2031 | 2,356,000 | 1,968,398 | ||
Baltimore Gas & Electric Co. | 5.40 | 6-1-2053 | 2,639,000 | 2,643,689 | ||
CenterPoint Energy Houston Electric LLC Series AH | 3.60 | 3-1-2052 | 1,740,000 | 1,338,840 | ||
Commonwealth Edison Co. | 5.30 | 2-1-2053 | 707,000 | 709,110 | ||
Consolidated Edison Co. of New York, Inc. | 5.20 | 3-1-2033 | 4,930,000 | 5,005,602 | ||
The accompanying notes are an integral part of these financial statements.
44 | Allspring Core Bond Portfolio
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Electric (continued) | ||||||
Consumers Energy Co. | 2.50 % | 5-1-2060 | $ | 1,432,000 | $817,125 | |
DTE Electric Co. | 2.95 | 3-1-2050 | 2,750,000 | 1,868,490 | ||
DTE Electric Co. Series B | 3.65 | 3-1-2052 | 1,258,000 | 967,941 | ||
Duke Energy Carolinas LLC | 2.55 | 4-15-2031 | 1,603,000 | 1,375,394 | ||
Duke Energy Carolinas LLC | 2.85 | 3-15-2032 | 2,926,000 | 2,505,574 | ||
Duke Energy Carolinas LLC | 3.55 | 3-15-2052 | 2,130,000 | 1,613,730 | ||
Duke Energy Carolinas LLC | 5.35 | 1-15-2053 | 3,531,000 | 3,531,871 | ||
Duke Energy Corp. | 2.55 | 6-15-2031 | 1,725,000 | 1,427,406 | ||
Duke Energy Corp. | 3.50 | 6-15-2051 | 487,000 | 344,457 | ||
Duke Energy Florida LLC | 2.40 | 12-15-2031 | 2,348,000 | 1,934,280 | ||
Duke Energy Progress LLC | 2.50 | 8-15-2050 | 2,376,000 | 1,453,628 | ||
Duke Energy Progress LLC | 5.25 | 3-15-2033 | 2,465,000 | 2,516,143 | ||
Entergy Arkansas LLC | 2.65 | 6-15-2051 | 2,121,000 | 1,312,623 | ||
Entergy Arkansas LLC | 5.15 | 1-15-2033 | 3,533,000 | 3,570,807 | ||
Eversource Energy Series R | 1.65 | 8-15-2030 | 2,676,000 | 2,137,661 | ||
Exelon Corp. | 5.30 | 3-15-2033 | 2,659,000 | 2,677,908 | ||
Exelon Corp. | 5.60 | 3-15-2053 | 2,115,000 | 2,089,893 | ||
Jersey Central Power & Light Co.144A | 2.75 | 3-1-2032 | 2,587,000 | 2,150,619 | ||
Metropolitan Edison Co.144A | 4.30 | 1-15-2029 | 2,768,000 | 2,647,571 | ||
Metropolitan Edison Co.144A | 5.20 | 4-1-2028 | 2,650,000 | 2,670,121 | ||
MidAmerican Energy Co. | 2.70 | 8-1-2052 | 2,041,000 | 1,312,942 | ||
Mississippi Power Co. Series B | 3.10 | 7-30-2051 | 2,824,000 | 1,875,531 | ||
Mississippi Power Co. Series 12-A | 4.25 | 3-15-2042 | 1,083,000 | 900,765 | ||
NSTAR Electric Co. | 3.10 | 6-1-2051 | 1,453,000 | 999,278 | ||
NSTAR Electric Co. | 4.55 | 6-1-2052 | 1,914,000 | 1,717,730 | ||
Pacific Gas & Electric Co. | 2.10 | 8-1-2027 | 1,260,000 | 1,090,454 | ||
Pacific Gas & Electric Co. | 3.95 | 12-1-2047 | 5,363,000 | 3,632,679 | ||
Pacific Gas & Electric Co. | 4.20 | 6-1-2041 | 1,368,000 | 1,017,155 | ||
Pacific Gas & Electric Co. | 4.50 | 7-1-2040 | 811,000 | 628,667 | ||
Pacific Gas & Electric Co. | 4.75 | 2-15-2044 | 792,000 | 604,740 | ||
Pacific Gas & Electric Co. | 4.95 | 7-1-2050 | 7,530,000 | 5,863,162 | ||
PacifiCorp. | 5.50 | 5-15-2054 | 2,817,000 | 2,846,082 | ||
PECO Energy Co. | 2.85 | 9-15-2051 | 2,841,000 | 1,864,965 | ||
Pennsylvania Electric Co.144A | 3.25 | 3-15-2028 | 2,295,000 | 2,107,728 | ||
Pennsylvania Electric Co.144A | 5.15 | 3-30-2026 | 1,767,000 | 1,755,947 | ||
Public Service Co. of Oklahoma Series K | 3.15 | 8-15-2051 | 1,593,000 | 1,063,439 | ||
Public Service Electric & Gas Co. | 1.90 | 8-15-2031 | 3,159,000 | 2,563,811 | ||
Public Service Electric & Gas Co. | 2.05 | 8-1-2050 | 653,000 | 370,807 | ||
Public Service Electric & Gas Co. | 2.70 | 5-1-2050 | 1,286,000 | 845,877 | ||
Southern California Edison Co. Series C | 4.13 | 3-1-2048 | 1,775,000 | 1,428,322 | ||
Virginia Electric & Power Co. | 2.95 | 11-15-2051 | 2,356,000 | 1,542,143 | ||
Virginia Electric & Power Co. | 5.45 | 4-1-2053 | 796,000 | 780,664 | ||
89,001,837 | ||||||
Total corporate bonds and notes (Cost $925,671,931) | 880,009,676 | |||||
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Portfolio | 45
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Municipal obligations: 0.35% | ||||||
Nevada: 0.09% | ||||||
Airport revenue: 0.09% | ||||||
County of Clark Department of Aviation Series C | 6.82 % | 7-1-2045 | $ | 3,365,000 | $4,097,847 | |
New York: 0.10% | ||||||
Airport revenue: 0.10% | ||||||
Port Authority of New York & New Jersey | 4.46 | 10-1-2062 | 5,505,000 | 4,978,819 | ||
Ohio: 0.04% | ||||||
Education revenue: 0.04% | ||||||
Ohio State University Series A | 4.80 | 6-1-2111 | 1,957,000 | 1,776,585 | ||
Texas: 0.12% | ||||||
Education revenue: 0.02% | ||||||
Board of Regents of the University of Texas System Series B | 2.44 | 8-15-2049 | 1,695,000 | 1,114,570 | ||
Transportation revenue: 0.10% | ||||||
North Texas Tollway Authority Series B | 6.72 | 1-1-2049 | 3,609,000 | 4,462,153 | ||
5,576,723 | ||||||
Total municipal obligations (Cost $17,137,602) | 16,429,974 | |||||
Non-agency mortgage-backed securities: 3.19% | ||||||
Angel Oak Mortgage Trust Series 2020-5 Class A1144A±± | 1.37 | 5-25-2065 | 495,046 | 454,120 | ||
Angel Oak Mortgage Trust Series 2020-2 Class A1A144A±± | 2.53 | 1-26-2065 | 1,270,133 | 1,166,037 | ||
Angel Oak Mortgage Trust Series 2021-6 Class A1144A±± | 1.46 | 9-25-2066 | 2,630,971 | 2,108,405 | ||
BANK5 Series 2023-5YR1 Class A3±± | 6.26 | 4-15-2056 | 2,182,000 | 2,259,066 | ||
BBCMS Mortgage Trust Series 2018-C2 Class ASB | 4.24 | 12-15-2051 | 1,158,926 | 1,127,218 | ||
Bunker Hill Loan Depositary Trust Series 2019-2 Class A1144A | 2.88 | 7-25-2049 | 1,835,867 | 1,710,713 | ||
Bunker Hill Loan Depositary Trust Series 2019-3 Class A1144A | 2.72 | 11-25-2059 | 1,122,037 | 1,074,336 | ||
BX Commercial Mortgage Trust Series 2021-XL2 Class A (1 Month LIBOR +0.69%)144A± | 5.80 | 10-15-2038 | 4,496,421 | 4,344,222 | ||
BX Commercial Mortgage Trust Series 2021-VOLT Class A (1 Month LIBOR +0.70%)144A± | 5.81 | 9-15-2036 | 10,912,000 | 10,544,811 | ||
CFCRE Commercial Mortgage Trust Series 2017-C8 Class ASB | 3.37 | 6-15-2050 | 1,266,455 | 1,213,826 | ||
COLT Mortgage Loan Trust Series 2021-2 Class A1144A±± | 0.92 | 8-25-2066 | 3,602,827 | 2,790,127 | ||
COLT Mortgage Loan Trust Series 2021-4 Class A1144A±± | 1.40 | 10-25-2066 | 3,749,363 | 2,953,933 | ||
COMM Mortgage Trust Series 2014-UBS4 Class A4 | 3.42 | 8-10-2047 | 3,937,000 | 3,811,495 | ||
COMM Mortgage Trust Series 2013-CR11 Class A4 | 4.26 | 8-10-2050 | 12,086,257 | 12,043,167 | ||
COMM Mortgage Trust Series 2015-LC23 Class A3 | 3.52 | 10-10-2048 | 1,982,000 | 1,915,309 | ||
COMM Mortgage Trust Series 2013-CR13 Class A4±± | 4.19 | 11-10-2046 | 1,746,000 | 1,719,918 | ||
CSAIL Commercial Mortgage Trust Series 2019-C16 Class A2 | 3.07 | 6-15-2052 | 1,924,000 | 1,704,777 | ||
EQUS Mortgage Trust Series 2021-EQAZ Class A (1 Month LIBOR +0.75%)144A± | 5.86 | 10-15-2038 | 4,122,917 | 3,988,144 | ||
GS Mortgage Securities Trust Series 2013-GC14 Class A5 | 4.24 | 8-10-2046 | 1,899,566 | 1,895,344 | ||
GS Mortgage Securities Trust Series 2014-GC18 Class A4 | 4.07 | 1-10-2047 | 5,471,323 | 5,375,883 | ||
GS Mortgage Securities Trust Series 2020-GSA2 Class A4 | 1.72 | 12-12-2053 | 5,595,000 | 4,443,571 | ||
GS Mortgage Securities Trust Series 2015-GC32 Class A3 | 3.50 | 7-10-2048 | 1,889,446 | 1,806,661 | ||
The accompanying notes are an integral part of these financial statements.
46 | Allspring Core Bond Portfolio
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Non-agency mortgage-backed securities (continued) | ||||||
Impact Funding Affordable Multifamily Housing Mortgage Loan Trust Series 2010-1 Class A1144A | 5.31 % | 1-25-2051 | $ | 2,954,105 | $2,872,960 | |
JP Morgan Chase Commercial Mortgage Securities Trust Series 2013-C16 Class A4 | 4.17 | 12-15-2046 | 4,973,000 | 4,932,572 | ||
JP Morgan Chase Commercial Mortgage Securities Trust Series 2016-JP4 Class A3 | 3.39 | 12-15-2049 | 1,080,000 | 1,007,368 | ||
JPMBB Commercial Mortgage Securities Trust Series 2013-C17 Class A4 | 4.20 | 1-15-2047 | 1,095,000 | 1,079,447 | ||
JPMBB Commercial Mortgage Securities Trust Series 2014-C23 Class A4 | 3.67 | 9-15-2047 | 1,623,137 | 1,575,219 | ||
JPMBB Commercial Mortgage Securities Trust Series 2015-C28 Class A3 | 2.91 | 10-15-2048 | 6,279,918 | 5,984,181 | ||
JPMBB Commercial Mortgage Securities Trust Series 2015-C30 Class A5 | 3.82 | 7-15-2048 | 3,008,000 | 2,855,149 | ||
Med Trust Series 2021-MDLN Class A (1 Month LIBOR +0.95%)144A± | 6.06 | 11-15-2038 | 6,630,180 | 6,426,013 | ||
MFA Trust Series 2021-NQM2 Class A1144A±± | 1.03 | 11-25-2064 | 1,492,607 | 1,236,566 | ||
Morgan Stanley Capital I Trust Series 2020-HR8 Class A3 | 1.79 | 7-15-2053 | 3,030,000 | 2,427,271 | ||
New Residential Mortgage Loan Trust Series 2019-NQM4 Class A1144A±± | 2.49 | 9-25-2059 | 783,096 | 714,450 | ||
NewRez Warehouse Securitization Trust Series 2021-1 Class A (1 Month LIBOR +0.75%)144A± | 5.89 | 5-25-2055 | 8,916,267 | 8,836,534 | ||
STAR Trust Series 2021-1 Class A1144A±± | 1.22 | 5-25-2065 | 1,335,195 | 1,149,569 | ||
Starwood Mortgage Residential Trust Series 2020-1 Class A1144A±± | 2.28 | 2-25-2050 | 265,389 | 250,751 | ||
Starwood Mortgage Residential Trust Series 2020-INV1 Class A1144A±± | 1.03 | 11-25-2055 | 1,081,461 | 949,930 | ||
Starwood Mortgage Residential Trust Series 2020-3 Class A1144A±± | 1.49 | 4-25-2065 | 1,249,433 | 1,151,308 | ||
Starwood Mortgage Residential Trust Series 2021-4 Class A1144A±± | 1.16 | 8-25-2056 | 3,398,574 | 2,856,739 | ||
Verus Securitization Trust Series 2020-1 Class A1144A | 2.42 | 1-25-2060 | 279,440 | 261,766 | ||
Verus Securitization Trust Series 2019-INV2 Class A1144A±± | 2.91 | 7-25-2059 | 632,409 | 609,512 | ||
Verus Securitization Trust Series 2019-4 Class A1144A | 2.64 | 11-25-2059 | 1,281,698 | 1,228,767 | ||
Verus Securitization Trust Series 2019-INV3 Class A1144A±± | 2.69 | 11-25-2059 | 538,436 | 516,576 | ||
Verus Securitization Trust Series 2021-1 Class A1144A±± | 0.82 | 1-25-2066 | 1,844,090 | 1,570,337 | ||
Verus Securitization Trust Series 2020-2 Class A1144A±± | 2.23 | 5-25-2060 | 826,989 | 795,628 | ||
Verus Securitization Trust Series 2021-R1 Class A1144A±± | 0.82 | 10-25-2063 | 1,578,392 | 1,411,188 | ||
Verus Securitization Trust Series 2020-5 Class A1144A | 1.22 | 5-25-2065 | 561,861 | 508,513 | ||
Verus Securitization Trust Series 2021-R3 Class A1144A±± | 1.02 | 4-25-2064 | 1,556,192 | 1,377,979 | ||
Verus Securitization Trust Series 2021-2 Class A1144A±± | 1.03 | 2-25-2066 | 3,350,658 | 2,861,426 | ||
Verus Securitization Trust Series 2021-8 Class A1144A±± | 1.82 | 11-25-2066 | 3,321,449 | 2,826,401 | ||
Verus Securitization Trust Series 2021-4 Class A1144A±± | 0.94 | 7-25-2066 | 3,146,220 | 2,501,882 | ||
Verus Securitization Trust Series 2021-5 Class A1144A±± | 1.01 | 9-25-2066 | 9,974,738 | 8,076,155 | ||
Verus Securitization Trust Series 2021-7 Class A1144A±± | 1.83 | 10-25-2066 | 4,687,400 | 3,967,769 | ||
Verus Securitization Trust Series 2021-3 Class A1144A±± | 1.05 | 6-25-2066 | 2,502,074 | 2,084,124 | ||
Visio Trust Series 2020-1R Class A1144A | 1.31 | 11-25-2055 | 1,229,026 | 1,105,822 | ||
Total non-agency mortgage-backed securities (Cost $162,276,444) | 148,460,955 | |||||
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Portfolio | 47
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
U.S. Treasury securities: 28.49% | ||||||
U.S. Treasury Bonds | 1.13 % | 5-15-2040 | $ | 87,097,000 | $56,602,843 | |
U.S. Treasury Bonds | 1.13 | 8-15-2040 | 85,421,000 | 55,026,473 | ||
U.S. Treasury Bonds## | 1.38 | 11-15-2040 | 154,317,000 | 103,458,699 | ||
U.S. Treasury Bonds## | 1.75 | 8-15-2041 | 126,129,000 | 88,965,287 | ||
U.S. Treasury Bonds | 1.88 | 2-15-2041 | 6,755,000 | 4,922,442 | ||
U.S. Treasury Bonds | 1.88 | 11-15-2051 | 7,074,000 | 4,654,471 | ||
U.S. Treasury Bonds | 2.00 | 8-15-2051 | 22,967,000 | 15,620,252 | ||
U.S. Treasury Bonds | 2.25 | 2-15-2052 | 11,829,000 | 8,531,666 | ||
U.S. Treasury Bonds | 2.88 | 5-15-2052 | 13,255,000 | 10,975,761 | ||
U.S. Treasury Bonds | 3.00 | 8-15-2052 | 40,262,000 | 34,217,982 | ||
U.S. Treasury Bonds | 3.38 | 8-15-2042 | 2,564,000 | 2,342,755 | ||
U.S. Treasury Bonds | 3.63 | 2-15-2053 | 75,155,000 | 72,184,029 | ||
U.S. Treasury Bonds | 3.88 | 2-15-2043 | 4,976,000 | 4,884,255 | ||
U.S. Treasury Bonds | 3.88 | 5-15-2043 | 45,892,000 | 45,060,208 | ||
U.S. Treasury Bonds | 5.25 | 11-15-2028 | 2,064,000 | 2,206,868 | ||
U.S. Treasury Notes | 0.38 | 7-31-2027 | 43,509,000 | 37,681,174 | ||
U.S. Treasury Notes | 1.13 | 2-29-2028 | 12,507,000 | 11,054,038 | ||
U.S. Treasury Notes | 1.13 | 8-31-2028 | 8,274,000 | 7,231,993 | ||
U.S. Treasury Notes | 1.25 | 9-30-2028 | 1,117,000 | 980,822 | ||
U.S. Treasury Notes | 1.38 | 10-31-2028 | 17,559,000 | 15,497,875 | ||
U.S. Treasury Notes## | 1.50 | 8-15-2026 | 101,332,000 | 93,712,309 | ||
U.S. Treasury Notes | 1.50 | 11-30-2028 | 11,372,000 | 10,092,206 | ||
U.S. Treasury Notes | 1.63 | 5-15-2026 | 35,760,000 | 33,350,391 | ||
U.S. Treasury Notes | 1.75 | 12-31-2026 | 8,357,000 | 7,750,465 | ||
U.S. Treasury Notes | 1.88 | 2-28-2029 | 10,985,000 | 9,913,963 | ||
U.S. Treasury Notes | 2.00 | 11-15-2026 | 32,604,000 | 30,536,957 | ||
U.S. Treasury Notes | 2.13 | 5-15-2025 | 10,160,000 | 9,720,263 | ||
U.S. Treasury Notes | 2.63 | 2-15-2029 | 50,196,000 | 47,225,416 | ||
U.S. Treasury Notes | 2.63 | 7-31-2029 | 8,779,000 | 8,237,514 | ||
U.S. Treasury Notes | 2.75 | 5-31-2029 | 15,424,000 | 14,588,333 | ||
U.S. Treasury Notes | 2.88 | 4-30-2025 | 16,500,000 | 16,014,668 | ||
U.S. Treasury Notes | 2.88 | 6-15-2025 | 705,000 | 684,153 | ||
U.S. Treasury Notes | 2.88 | 8-15-2028 | 8,219,000 | 7,860,703 | ||
U.S. Treasury Notes | 2.88 | 4-30-2029 | 14,700,000 | 14,005,195 | ||
U.S. Treasury Notes | 3.00 | 7-15-2025 | 9,339,000 | 9,082,907 | ||
U.S. Treasury Notes | 3.25 | 6-30-2029 | 28,783,000 | 27,980,224 | ||
U.S. Treasury Notes | 3.38 | 5-15-2033 | 26,881,000 | 26,305,579 | ||
U.S. Treasury Notes## | 3.50 | 4-30-2028 | 103,337,000 | 102,021,067 | ||
U.S. Treasury Notes | 3.63 | 5-15-2026 | 53,493,000 | 52,870,308 | ||
U.S. Treasury Notes | 3.63 | 3-31-2028 | 15,721,000 | 15,600,636 | ||
U.S. Treasury Notes | 3.63 | 5-31-2028 | 64,000,000 | 63,635,000 | ||
U.S. Treasury Notes | 3.88 | 3-31-2025 | 25,751,000 | 25,453,254 | ||
U.S. Treasury Notes | 3.88 | 4-30-2025 | 49,527,000 | 48,987,233 | ||
U.S. Treasury Notes | 4.00 | 12-15-2025 | 10,348,000 | 10,306,365 | ||
U.S. Treasury Notes | 4.00 | 2-15-2026 | 270,000 | 269,114 | ||
U.S. Treasury Notes | 4.13 | 1-31-2025 | 2,792,000 | 2,768,224 | ||
U.S. Treasury Notes | 4.25 | 5-31-2025 | 47,314,000 | 47,180,929 | ||
U.S. Treasury Notes | 4.25 | 10-15-2025 | 9,006,000 | 9,004,593 | ||
The accompanying notes are an integral part of these financial statements.
48 | Allspring Core Bond Portfolio
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
U.S. Treasury securities (continued) | ||||||
U.S. Treasury Notes | 4.38 % | 10-31-2024 | $ | 1,068,000 | $1,061,158 | |
U.S. Treasury Notes | 4.50 | 11-30-2024 | 224,000 | 223,055 | ||
Total U.S. Treasury securities (Cost $1,440,198,202) | 1,328,542,075 | |||||
Yankee corporate bonds and notes: 4.34% | ||||||
Basic materials: 0.37% | ||||||
Mining: 0.37% | ||||||
Anglo American Capital PLC144A | 4.75 | 3-16-2052 | 3,474,000 | 2,824,201 | ||
Anglo American Capital PLC144A | 5.50 | 5-2-2033 | 2,483,000 | 2,424,129 | ||
BHP Billiton Finance USA Ltd. | 4.88 | 2-27-2026 | 8,803,000 | 8,839,735 | ||
Glencore Finance Canada Ltd.144A | 5.55 | 10-25-2042 | 792,000 | 732,654 | ||
Glencore Finance Canada Ltd.144A | 6.00 | 11-15-2041 | 644,000 | 639,165 | ||
Glencore Finance Canada Ltd.144A | 6.90 | 11-15-2037 | 1,821,000 | 1,969,716 | ||
17,429,600 | ||||||
Consumer, cyclical: 0.19% | ||||||
Airlines: 0.19% | ||||||
Delta Air Lines, Inc./SkyMiles IP Ltd.144A | 4.75 | 10-20-2028 | 9,320,000 | 9,003,335 | ||
Consumer, non-cyclical: 0.89% | ||||||
Commercial services: 0.02% | ||||||
Adani International Container Terminal Pvt Ltd.144A | 3.00 | 2-16-2031 | 1,310,280 | 1,038,972 | ||
Healthcare-products: 0.09% | ||||||
DH Europe Finance II Sarl | 2.20 | 11-15-2024 | 4,334,000 | 4,153,008 | ||
Pharmaceuticals: 0.78% | ||||||
Pfizer Investment Enterprises Pte. Ltd. | 4.45 | 5-19-2026 | 8,809,000 | 8,763,644 | ||
Pfizer Investment Enterprises Pte. Ltd. | 4.45 | 5-19-2028 | 4,404,000 | 4,387,698 | ||
Pfizer Investment Enterprises Pte. Ltd. | 4.75 | 5-19-2033 | 12,245,000 | 12,294,108 | ||
Pfizer Investment Enterprises Pte. Ltd. | 5.30 | 5-19-2053 | 5,774,000 | 5,944,182 | ||
Pfizer Investment Enterprises Pte. Ltd. | 5.34 | 5-19-2063 | 2,643,000 | 2,646,499 | ||
Shire Acquisitions Investments Ireland DAC | 2.88 | 9-23-2023 | 1,299,000 | 1,287,447 | ||
Takeda Pharmaceutical Co. Ltd. | 4.40 | 11-26-2023 | 986,000 | 979,445 | ||
36,303,023 | ||||||
Energy: 0.26% | ||||||
Oil & gas: 0.08% | ||||||
Aker BP ASA144A | 3.10 | 7-15-2031 | 504,000 | 419,626 | ||
Aker BP ASA144A | 4.00 | 1-15-2031 | 647,000 | 579,983 | ||
Petroleos Mexicanos | 2.38 | 4-15-2025 | 725,800 | 700,650 | ||
Petroleos Mexicanos | 2.46 | 12-15-2025 | 2,419,500 | 2,333,809 | ||
4,034,068 | ||||||
Pipelines: 0.18% | ||||||
Galaxy Pipeline Assets Bidco Ltd.144A | 1.75 | 9-30-2027 | 2,590,720 | 2,397,462 | ||
Galaxy Pipeline Assets Bidco Ltd.144A | 2.16 | 3-31-2034 | 3,232,593 | 2,751,265 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Portfolio | 49
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Pipelines (continued) | ||||||
Galaxy Pipeline Assets Bidco Ltd.144A | 2.63 % | 3-31-2036 | $ | 2,354,000 | $1,909,069 | |
Galaxy Pipeline Assets Bidco Ltd.144A | 2.94 | 9-30-2040 | 1,467,518 | 1,182,399 | ||
8,240,195 | ||||||
Financial: 2.40% | ||||||
Banks: 1.99% | ||||||
Barclays PLC (U.S. SOFR +2.21%)± | 5.83 | 5-9-2027 | 10,458,000 | 10,434,845 | ||
Barclays PLC (U.S. SOFR +2.98%)± | 6.22 | 5-9-2034 | 5,396,000 | 5,447,776 | ||
Barclays PLC (1 Year Treasury Constant Maturity +3.50%)± | 7.44 | 11-2-2033 | 6,947,000 | 7,572,987 | ||
Cooperatieve Rabobank UA (1 Year Treasury Constant Maturity +1.40%)144A± | 5.56 | 2-28-2029 | 12,323,000 | 12,350,978 | ||
Credit Suisse Group AG (U.S. SOFR +1.73%)144A± | 3.09 | 5-14-2032 | 1,185,000 | 952,580 | ||
Credit Suisse Group AG (U.S. SOFR +3.73%)144A± | 4.19 | 4-1-2031 | 4,092,000 | 3,596,418 | ||
Credit Suisse Group AG144A | 4.28 | 1-9-2028 | 2,665,000 | 2,436,210 | ||
Credit Suisse Group AG (U.S. SOFR +3.70%)144A± | 6.44 | 8-11-2028 | 5,102,000 | 5,083,072 | ||
Credit Suisse Group AG144A | 6.54 | 8-12-2033 | 1,101,000 | 1,123,648 | ||
Deutsche Bank AG (U.S. SOFR +2.26%)± | 3.74 | 1-7-2033 | 6,840,000 | 4,952,715 | ||
Deutsche Bank AG | 7.08 | 2-10-2034 | 611,000 | 558,883 | ||
HSBC Holdings PLC (U.S. SOFR +1.97%)± | 6.16 | 3-9-2029 | 7,036,000 | 7,174,065 | ||
HSBC Holdings PLC (U.S. SOFR +2.39%)± | 6.25 | 3-9-2034 | 8,130,000 | 8,363,036 | ||
HSBC Holdings PLC (U.S. SOFR +2.65%)± | 6.33 | 3-9-2044 | 2,940,000 | 3,043,532 | ||
Mitsubishi UFJ Financial Group, Inc. (1 Year Treasury Constant Maturity +1.97%)± | 5.41 | 4-19-2034 | 3,629,000 | 3,645,386 | ||
Mitsubishi UFJ Financial Group, Inc. (1 Year Treasury Constant Maturity +1.38%)± | 5.42 | 2-22-2029 | 3,612,000 | 3,618,720 | ||
Mitsubishi UFJ Financial Group, Inc. (1 Year Treasury Constant Maturity +1.63%)± | 5.44 | 2-22-2034 | 3,958,000 | 3,986,786 | ||
Mitsubishi UFJ Financial Group, Inc. (1 Year Treasury Constant Maturity +1.53%)± | 5.48 | 2-22-2031 | 2,079,000 | 2,098,570 | ||
Mizuho Financial Group, Inc. (1 Year Treasury Constant Maturity +1.65%)± | 5.74 | 5-27-2031 | 3,614,000 | 3,673,217 | ||
UBS Group AG (1 Year Treasury Constant Maturity +2.20%)144A± | 5.96 | 1-12-2034 | 2,711,000 | 2,719,092 | ||
92,832,516 | ||||||
Diversified financial services: 0.38% | ||||||
AerCap Ireland Capital DAC/AerCap Global Aviation Trust | 1.15 | 10-29-2023 | 17,877,000 | 17,527,486 | ||
REITS: 0.03% | ||||||
Trust Fibra Uno144A | 6.39 | 1-15-2050 | 1,883,000 | 1,388,806 | ||
Industrial: 0.10% | ||||||
Transportation: 0.10% | ||||||
Canadian Pacific Railway Co. | 1.35 | 12-2-2024 | 3,923,000 | 3,693,661 | ||
Canadian Pacific Railway Co. | 1.75 | 12-2-2026 | 759,000 | 688,603 | ||
4,382,264 | ||||||
Technology: 0.10% | ||||||
Semiconductors: 0.10% | ||||||
NXP BV/NXP Funding LLC/NXP USA, Inc. | 2.50 | 5-11-2031 | 1,758,000 | 1,433,155 | ||
The accompanying notes are an integral part of these financial statements.
50 | Allspring Core Bond Portfolio
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Semiconductors (continued) | ||||||
NXP BV/NXP Funding LLC/NXP USA, Inc. | 3.25 % | 5-11-2041 | $ | 1,730,000 | $1,236,842 | |
NXP BV/NXP Funding LLC/NXP USA, Inc. | 4.40 | 6-1-2027 | 1,912,000 | 1,860,460 | ||
4,530,457 | ||||||
Utilities: 0.03% | ||||||
Electric: 0.03% | ||||||
Israel Electric Corp. Ltd.144A | 3.75 | 2-22-2032 | 1,561,000 | 1,343,977 | ||
Total yankee corporate bonds and notes (Cost $207,421,223) | 202,207,707 | |||||
Yankee government bonds: 0.83% | ||||||
Bank Gospodarstwa Krajowego144A | 5.38 | 5-22-2033 | 2,424,000 | 2,422,381 | ||
Bermuda144A | 5.00 | 7-15-2032 | 2,063,000 | 2,027,071 | ||
Canada | 3.25 | 6-8-2027 | 2,400,000 | 2,309,605 | ||
Export Finance & Insurance Corp.144A | 4.63 | 10-26-2027 | 5,920,000 | 6,014,719 | ||
Israel | 4.50 | 1-17-2033 | 6,209,000 | 6,096,766 | ||
Mexico | 3.50 | 2-12-2034 | 7,367,000 | 6,188,198 | ||
Mexico | 3.75 | 4-19-2071 | 3,462,000 | 2,262,844 | ||
Mexico | 3.77 | 5-24-2061 | 1,217,000 | 808,737 | ||
Mexico | 6.34 | 5-4-2053 | 5,117,000 | 5,131,250 | ||
Panama | 6.85 | 3-28-2054 | 1,655,000 | 1,696,249 | ||
Paraguay 144A | 5.40 | 3-30-2050 | 821,000 | 687,423 | ||
Peru | 3.60 | 1-15-2072 | 931,000 | 606,284 | ||
Poland | 5.50 | 4-4-2053 | 2,541,000 | 2,552,435 | ||
Total yankee government bonds (Cost $40,288,713) | 38,803,962 | |||||
Yield | Shares | |||||
Short-term investments: 2.52% | ||||||
Investment companies: 2.52% | ||||||
Allspring Government Money Market Fund Select Class♠∞## | 5.01 | 117,290,523 | 117,290,523 | |||
Total short-term investments (Cost $117,290,523) | 117,290,523 | |||||
Total investments in securities (Cost $5,228,121,430) | 106.78 % | 4,978,927,875 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Portfolio | 51
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Shares | Value | |||
Securities sold short: (0.26)% | ||||||
Agency securities: (0.26)% | ||||||
FNMA | 3.50 % | 6-13-2053 | (13,100,000 ) | $(12,035,113 ) | ||
Total agency securities (Cost $(12,239,801)) | (12,035,113 ) | |||||
Total securities sold short (Proceeds $(12,239,801)) | (0.26 )% | (12,035,113 ) | ||||
Other assets and liabilities, net | (6.52 ) | (303,909,521 ) | ||||
Total net assets | 100.00 % | $4,662,983,241 | ||||
¤ | The security is issued in zero coupon form with no periodic interest payments. |
± | Variable rate investment. The rate shown is the rate in effect at period end. |
%% | The security is purchased on a when-issued basis. |
±± | The coupon of the security is adjusted based on the principal and/or interest payments received from the underlying pool of mortgages as well as the credit quality and the actual prepayment speed of the underlying mortgages. The rate shown is the rate in effect at period end. |
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. |
## | All or a portion of this security is segregated for when-issued securities. |
♠ | The issuer of the security is an affiliated person of the Portfolio as defined in the Investment Company Act of 1940. |
∞ | The rate represents the 7-day annualized yield at period end. |
Abbreviations: | |
FHLB | Federal Home Loan Bank |
FHLMC | Federal Home Loan Mortgage Corporation |
FNMA | Federal National Mortgage Association |
GNMA | Government National Mortgage Association |
LIBOR | London Interbank Offered Rate |
REIT | Real estate investment trust |
SOFR | Secured Overnight Financing Rate |
STRIPS | Separate trading of registered interest and principal securities |
Investments in affiliates
An affiliated investment is an investment in which the Portfolio owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Portfolio and the issuer having the same adviser or investment manager. Transactions with issuers that were affiliates of the Portfolio 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 | $114,848,590 | $2,617,686,181 | $(2,615,244,248 ) | $0 | $0 | $117,290,523 | 117,290,523 | $3,850,778 |
Investments in affiliates no longer held at end of period | ||||||||
Securities Lending Cash Investments LLC | 10,235,000 | 224,349,956 | (234,584,875 ) | (81 ) | 0 | 0 | 0 | 188,630 1 |
$(81 ) | $0 | $117,290,523 | $4,039,408 |
1 | Amount shown represents income before fees and rebates. |
The accompanying notes are an integral part of these financial statements.
52 | Allspring Core Bond Portfolio
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in unaffiliated securities, at value (cost $5,110,830,907) | $4,861,637,352 |
Investments in affiliated securities, at value (cost $117,290,523) | 117,290,523 |
Cash | 2,267,865 |
Cash due from broker | 270,000 |
Segregated cash for when-issued securities | 1,438,202 |
Receivable for investments sold | 268,769,159 |
Receivable for interest | 22,690,600 |
Principal paydown receivable | 1,316,371 |
Prepaid expenses and other assets | 71,840 |
Total assets | 5,275,751,912 |
Liabilities | |
Payable for when-issued transactions | 456,739,540 |
Payable for investments purchased | 141,993,969 |
Securities sold short, at value (proceeds $12,239,801) | 12,035,113 |
Advisory fee payable | 1,202,087 |
Cash collateral due to broker | 670,396 |
Trustees’ fees and expenses payable | 504 |
Accrued expenses and other liabilities | 127,062 |
Total liabilities | 612,768,671 |
Total net assets | $4,662,983,241 |
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Portfolio | 53
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Interest (net of foreign withholding taxes of $5,992) | $151,508,682 |
Income from affiliated securities | 3,887,580 |
Total investment income | 155,396,262 |
Expenses | |
Advisory fee | 15,815,926 |
Custody and accounting fees | 288,524 |
Professional fees | 134,101 |
Interest holder report expenses | 33,891 |
Trustees’ fees and expenses | 27,688 |
Other fees and expenses | 137,594 |
Total expenses | 16,437,724 |
Less: Fee waivers and/or expense reimbursements | (329,616 ) |
Net expenses | 16,108,108 |
Net investment income | 139,288,154 |
Realized and unrealized gains (losses) on investments | |
Net realized losses on | |
Unaffiliated securities | (329,727,799 ) |
Affiliated securities | (81 ) |
Net realized losses on investments | (329,727,880 ) |
Net change in unrealized gains (losses) on | |
Unaffiliated securities | 89,960,355 |
Securities sold short | 204,688 |
Net change in unrealized gains (losses) on investments | 90,165,043 |
Net realized and unrealized gains (losses) on investments | (239,562,837 ) |
Net decrease in net assets resulting from operations | $(100,274,683 ) |
The accompanying notes are an integral part of these financial statements.
54 | Allspring Core Bond Portfolio
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $139,288,154 | $71,113,325 | ||
Net realized losses on investments | (329,727,880 ) | (167,999,743 ) | ||
Net change in unrealized gains (losses) on investments | 90,165,043 | (357,074,109 ) | ||
Net decrease in net assets resulting from operations | (100,274,683 ) | (453,960,527 ) | ||
Capital transactions | ||||
Transactions in investors’ beneficial interests | ||||
Contributions | 747,955,348 | 733,615,538 | ||
Withdrawals | (843,243,755 ) | (1,063,241,380 ) | ||
Net decrease in net assets resulting from capital transactions | (95,288,407 ) | (329,625,842 ) | ||
Total decrease in net assets | (195,563,090 ) | (783,586,369 ) | ||
Net assets | ||||
Beginning of period | 4,858,546,331 | 5,642,132,700 | ||
End of period | $4,662,983,241 | $4,858,546,331 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Core Bond Portfolio | 55
Financial highlights
Financial highlights
Year ended May 31 | |||||
2023 | 2022 | 2021 | 2020 | 2019 | |
Total return | (1.88 )% | (8.55 )% | 0.65 % | 9.49 % | 6.30 % |
Ratios to average net assets (annualized) | |||||
Gross expenses | 0.36 % | 0.36 % | 0.35 % | 0.35 % | 0.35 % |
Net expenses1 | 0.36 % | 0.36 % | 0.35 % | 0.35 % | 0.35 % |
Net investment income | 3.08 % | 1.33 % | 1.30 % | 2.28 % | 2.93 % |
Supplemental data | |||||
Portfolio turnover rate | 384 % | 432 % | 457 % | 603 % | 577 % |
1 | Net expense ratios reflect voluntary waivers, if any. |
The accompanying notes are an integral part of these financial statements.
56 | Allspring Core Bond Portfolio
Notes to financial statements
Notes to financial statements
1.
ORGANIZATION
Allspring Master 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 Core Bond Portfolio (the “Portfolio”) which is a diversified series of the Trust.
Interests in the Portfolio are available solely through private placement transactions that do not involve any “public offering” within the meaning of Section 4(a)(2) of the Securities Act of 1933.
2.
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Portfolio, 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 Portfolio may deviate from this calculation time under unusual or unexpected circumstances.
Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.
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 at 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.
Investments which are not valued using any of 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 Portfolio 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 Portfolio 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 Portfolio 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. Interests in the non-registered investment company that were redeemable at net asset value were fair valued normally at net asset value. Effective at the close of business on March 29, 2023, the Portfolio 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.
Allspring Core Bond Portfolio | 57
Notes to financial statements
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.
When-issued transactions
The Portfolio may purchase securities on a forward commitment or when-issued basis. The Portfolio records a when-issued transaction on the trade date and will segregate assets in an amount at least equal in value to the Portfolio’s commitment to purchase when-issued securities. Securities purchased on a when-issued basis are marked-to-market daily and the Portfolio begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.
TBA sale commitments
The Portfolio may enter into To Be Announced (“TBA”) sale commitments to hedge its portfolio positions or to sell mortgage-backed securities it owns under delayed delivery arrangements. Proceeds of TBA sale commitments are not received until the contractual settlement date. During the time a TBA sale commitment is outstanding, equivalent deliverable securities or offsetting TBA purchase commitments, which are deliverable on or before the sale commitment date, are held as “cover” for the transaction. Unsettled TBA sale commitments are valued at the current market value of the underlying securities, according to the procedures described under “Securities valuation”. The contract is marked-to-market daily and the change in market value is recorded by the Portfolio as an unrealized gain or loss. If the TBA sale commitment is closed through the acquisition of an offsetting purchase commitment, the Portfolio realizes a gain or loss. If the Portfolio delivers securities under the commitment, the Portfolio realizes a gain or a loss from the sale of the securities based upon the unit price established at the date the commitment was entered into.
Mortgage dollar roll transactions
The Portfolio may engage in mortgage dollar roll transactions through TBA mortgage-backed securities issued by Government National Mortgage Association (GNMA), Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC). In a mortgage dollar roll transaction, the Portfolio sells a mortgage-backed security to a financial institution, such as a bank or broker-dealer and simultaneously agrees to repurchase a substantially similar security from the institution at a later date at an agreed upon price. The mortgage-backed securities that are repurchased will bear the same interest rate as those sold, but generally will be collateralized by different pools of mortgages with different pre-payment histories. During the roll period, the Portfolio foregoes principal and interest paid on the securities. The Portfolio is compensated by the difference between the current sales price and the forward price for the future purchase as well as by the earnings on the cash proceeds of the initial sale. Mortgage dollar rolls may be renewed without physical delivery of the securities subject to the contract. The Portfolio accounts for TBA dollar roll transactions as purchases and sales which, as a result, may increase its portfolio turnover rate.
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.
Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. To the extent debt obligations are placed on non-accrual status, any related interest income may be reduced by writing off interest receivables when the collection of all or a portion of interest has been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status. Interest income is recorded net of foreign taxes withheld where recovery of such taxes is not assured. Paydown gains and losses are included in interest income.
Federal and other taxes
The Portfolio is not required to pay federal income taxes on its net investment income and net capital gains as it is treated as a partnership for federal income tax purposes. All income, gains and losses of the Portfolio are deemed to have been “passed through” to the interest holders in proportion to their holdings of the Portfolio regardless of whether income and gains have been distributed by the Portfolio.
The Portfolio’s income tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal revenue authority. Management has analyzed the Portfolio’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 May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $5,252,416,811 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $18,981,173 |
Gross unrealized losses | (292,470,108 ) |
Net unrealized losses | $(273,488,935 ) |
58 | Allspring Core Bond Portfolio
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 Portfolio’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 Portfolio’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 Portfolio’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 Portfolio’s assets and liabilities as of May 31, 2023:
Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
Assets | ||||
Investments in: | ||||
Agency securities | $0 | $1,737,506,349 | $0 | $1,737,506,349 |
Asset-backed securities | 0 | 509,676,654 | 0 | 509,676,654 |
Corporate bonds and notes | 0 | 880,009,676 | 0 | 880,009,676 |
Municipal obligations | 0 | 16,429,974 | 0 | 16,429,974 |
Non-agency mortgage-backed securities | 0 | 148,460,955 | 0 | 148,460,955 |
U.S. Treasury securities | 1,328,542,075 | 0 | 0 | 1,328,542,075 |
Yankee corporate bonds and notes | 0 | 202,207,707 | 0 | 202,207,707 |
Yankee government bonds | 0 | 38,803,962 | 0 | 38,803,962 |
Short-term investments | ||||
Investment companies | 117,290,523 | 0 | 0 | 117,290,523 |
Total assets | $1,445,832,598 | $3,533,095,277 | $0 | $4,978,927,875 |
Liabilities | ||||
Securities sold short | ||||
Agency securities | $0 | $12,035,113 | $0 | $12,035,113 |
Total liabilities | $0 | $12,035,113 | $0 | $12,035,113 |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the year ended May 31, 2023, the Portfolio did not have transfers into/out of Level 3.
4.
TRANSACTIONS WITH AFFILIATES
Advisory fee
The Trust has entered into an advisory contract with 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. The adviser is responsible for implementing investment policies and guidelines and for supervising the subadviser, who is responsible for day-to-day portfolio management of the Portfolio. Pursuant to the contract, Allspring Funds Management is entitled to receive an advisory fee at the following annual rate based on the Portfolio’s average daily net assets:
Average daily net assets | Advisory fee |
First $500 million | 0.400 % |
Next $500 million | 0.375 |
Next $2 billion | 0.350 |
Next $2 billion | 0.325 |
Next $5 billion | 0.300 |
Over $10 billion | 0.290 |
Allspring Core Bond Portfolio | 59
Notes to financial statements
For the year ended May 31, 2023, the advisory fee was equivalent to an annual rate of 0.35% of the Portfolio’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Portfolio. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Investments is the subadviser to the Portfolio and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.20% and declining to 0.10% as the average daily net assets of the Portfolio increase.
Allspring Funds Management has voluntarily waived and/or reimbursed advisory fees to reduce the net operating expense ratio of the Portfolio. These voluntary waivers may be discontinued at any time.
Interfund transactions
The Portfolio 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 short-term securities, for the year ended May 31, 2023 were as follows:
Purchases at cost | Sales proceeds | ||
U.S. government | Non-U.S. government | U.S. government | Non-U.S. government |
$10,700,380,474 | $7,437,782,992 | $10,771,433,780 | $7,064,558,280 |
6.
BANK BORROWINGS
The Trust, along with Allspring Variable Trust and Allspring Funds Trust (excluding the money market funds), are parties to a $350,000,000 revolving credit agreement whereby the Portfolio is permitted to use bank borrowings for temporary or emergency purposes, such as to fund interest holders withdrawal requests. Interest under the credit agreement is charged to the Portfolio based on 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 May 31, 2023, there were no borrowings by the Portfolio under the agreement.
7.
INDEMNIFICATION
Under the Portfolio’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 Portfolio. The Portfolio has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Portfolio’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 Portfolio may enter into contracts with service providers that contain a variety of indemnification clauses. The Portfolio’s maximum exposure under these arrangements is dependent on future claims that may be made against the Portfolio and, therefore, cannot be estimated.
60 | Allspring Core Bond Portfolio
Report of independent registered public accounting firm
To the Interest Holders of the Portfolio and Board of Trustees
Allspring Master Trust:
Allspring Master Trust:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Allspring Core Bond Portfolio (the Portfolio), one of the portfolios constituting Allspring Master Trust, including the portfolio of investments, as of May 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 Portfolio as of May 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 Portfolio’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 Portfolio 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 May 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
July 27, 2023
Allspring Core Bond Portfolio | 61
Other information (unaudited)
Other information
Tax information
For the fiscal year ended May 31, 2023, $115,862,469 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 May 31, 2023, $2,341,913 has been designated as short-term capital gain dividends for nonresident alien shareholders pursuant to Section 871 of the Internal Revenue Code.
For the fiscal year ended May 31, 2023, 25% of the ordinary income distributed was derived from interest on U.S. government securities.
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 and Portfolio file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. Shareholders and Interest holders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
62 | Allspring Core Bond 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 128 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 |
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 |
1
The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by call 1-800-222-8222 or by visiting the website at allspringglobal.com.
Allspring Core Bond Fund | 63
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 |
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. |
64 | Allspring Core Bond Fund
Other information (unaudited)
Officers1
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 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 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 Core Bond Fund | 65
Other information (unaudited)
Board consideration of investment management, advisory, and sub-advisory agreements:
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (each, a “Board” and collectively, the “Boards”) of each of Allspring Funds Trust (“Funds Trust”) and Allspring Master Trust (“Master Trust”, and collectively, the “Trusts”) must determine annually whether to approve the continuation of the Trusts’ investment management, advisory, and sub-advisory agreements, as applicable. In this regard, at a Board meeting held on May 15-17, 2023 (the “Meeting”), the Funds Trust Board, all the members of which have no direct or indirect interest in the investment management agreement and are not “interested persons” of the Trusts, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for the Allspring Core Bond Fund, a portfolio of Funds Trust (the “Feeder Fund”), an investment management agreement (the “Feeder Fund Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”).
At the Meeting, the Master Trust Board, all the members of which have no direct or indirect interest in the investment advisory and sub-advisory agreements and are Independent Trustees, reviewed and approved: (i) an investment advisory agreement (the “Master Portfolio Advisory Agreement”) with Allspring Funds Management for the Allspring Core Bond Portfolio, a portfolio of Master Trust (the “Master Portfolio”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Allspring Global Investments, LLC (the “Sub-Adviser”), an affiliate of Allspring Funds Management, for the Master Portfolio.
The Feeder Fund and the Master Portfolio are collectively referred to as the “Funds.” The Feeder Fund Management Agreement, the Master Portfolio Advisory Agreement, and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
The Feeder Fund is a feeder fund that invest substantially all of its assets in the Master Portfolio. The Master Portfolio has a substantially similar investment objective and substantially similar investment strategies to the Feeder Fund. Information provided to the Boards regarding the Feeder Fund is also applicable to the Master Portfolio, as relevant.
At the Meeting, the Boards considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at meeting of the Boards held in April 2023, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Boards have adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Boards in the discharge of their duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
The Boards noted that they initially approved the Advisory Agreements at a meeting of the Boards held in May 2021, all for a two-year term, in advance of the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC,1 a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. (the “Transaction”). The Trustees also noted that, while they did not specifically consider the continuation of the Advisory Agreements in 2022 as a result of the two-year term that was approved in 2021, the Trustees received and considered certain information at a meeting of the Boards held in April 2022 that was applicable to the Advisory Agreements, including an overview and financial review of the Allspring Global Investments business, information regarding certain ancillary agreements that were approved by the Boards at the April 2022 Board meeting, and comparative data regarding Fund fees and expenses.
In providing information to the Boards, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Boards’ annual contract renewal process earlier in 2023. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Boards considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Boards reviewed reports of Allspring Funds Management at each of their quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Boards and the teams mentioned above confer with portfolio managers at various times throughout the year. The Boards did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Funds Trust Board unanimously determined that the compensation payable to Allspring Funds Management was reasonable, and approved the continuation of the Feeder Fund Management Agreement for a one-year term. Additionally, after its deliberations, the Master Trust Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser was reasonable, and approved the continuation of the Master Portfolio Advisory Agreement and the Sub-Advisory Agreement, each for a one-year term. The Boards considered the approval of the Advisory Agreements for the Funds as part of their consideration of agreements for funds across the complex, but their approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Boards in support of their approvals.
1
The trade name for the asset management firm that includes Allspring Funds Management and the Sub-Adviser is “Allspring Global Investments.”
66 | Allspring Core Bond Fund
Other information (unaudited)
Nature, Extent, and Quality of Services
The Boards received and considered various information regarding the nature, extent, and quality of services provided to the Feeder Fund and the Master Portfolio, as applicable, by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Feeder Fund Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business. The Boards also considered information about retention arrangements with respect to key personnel of Allspring Global Investments that were put in place in connection with the Transaction. The Boards took into account information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the Transaction under a transition services agreement and the anticipated timeline for exiting the transition services agreement. In addition, the Boards received and considered information about the full range of services provided to the Fund and the Master Portfolio by Allspring Funds Management and its affiliates.
The Boards considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Master Portfolio. The Boards evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
The Boards further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Boards received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, Allspring Funds Management’s role as administrator of the Funds’ liquidity risk management programs. The Boards also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund Investment Performance and Expenses
The Boards considered the investment performance results for each of the Funds over various time periods ended December 31, 2022. The Boards considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to the Feeder Fund (the “Universe”), and in comparison to the Feeder Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Boards received a description of the methodology used by Broadridge to select the mutual funds in the performance Universe. The Funds Trust Board noted that the investment performance of the Feeder Fund (Administrator Class) was in range of the average investment performance of the Universe for the one- and ten-year period under review and lower than the average investment performance of the Universe for the three- and five-year periods under review. The Funds Trust Board also noted that the investment performance of the Feeder Fund was in range of the investment performance of its benchmark index, the Bloomberg U.S. Aggregate Bond Index, for the three-year period under review and lower than its benchmark index for all other periods under review.
The Master Trust Board took note of the investment performance of the Master Portfolio in the context of reviewing the investment performance of the Feeder Fund.
The Funds Trust Board also received and considered information regarding the Feeder Fund’s net operating expense ratios, which include fees and expenses of the Master Portfolio, and their various components, including actual management fees assessed at the Feeder Fund and Master Portfolio levels, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Funds Trust Board considered these ratios in comparison to the median ratios of funds in class-specific expense groups that were determined by Broadridge to be similar to the Feeder Fund (the “Groups”). The Funds Trust Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Groups and an explanation of how funds comprising expense groups and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Funds Trust Board noted that the net operating expense ratios of the Feeder Fund were lower than or in range of the median net operating expense ratios of the expense Groups for all share classes. The Funds Trust Board noted that Allspring Funds Management had agreed to reduce the net operating expense caps for the Feeder Fund’s Class A shares.
With respect to the Master Portfolio, the Master Trust Board reviewed the fee rates that are payable to Allspring Funds Management for investment advisory services (as discussed below), which are the only fees charged at the Master Portfolio level, relative to a corresponding expense Group.
The Boards took into account the Funds’ investment performance and expense information provided to them among the factors considered in deciding to re-approve the Advisory Agreements.
Investment Management, Advisory, and Sub-Advisory Fee Rates
The Funds Trust Board noted that Allspring Funds Management receives no advisory fees from the Feeder Fund as long as the Feeder Fund continues to invest all (or substantially all) of its assets in a single master portfolio. If the Feeder Fund were to change its investment structure so that it began investing
Allspring Core Bond Fund | 67
Other information (unaudited)
in two or more master portfolios (a fund-of-funds), Allspring Funds Management would be entitled to receive an annual fee of 0.25% of the Feeder Fund’s average daily net assets for providing investment advisory services to the Feeder Fund, including allocating the Feeder Fund’s assets to the Master Portfolio.
The Funds Trust Board reviewed and considered the contractual fee rates that are payable by the Feeder Fund to Allspring Funds Management under the Feeder Fund Management Agreement for management services (other than investment advisory services), as well as the contractual fee rates payable by the Feeder Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which include, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rates”).
The Master Trust Board reviewed and considered the contractual investment advisory fee rate that is payable by the Master Portfolio to Allspring Funds Management for investment advisory services under the Master Portfolio Advisory Agreement (the “Advisory Agreement Rate”). The Master Trust Board also reviewed and considered the contractual investment sub-advisory fee rate that is payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services (the “Sub-Advisory Agreement Rate”).
Among other information reviewed by the Funds Trust Board was a comparison of the Feeder Fund’s Management Rate, which, for this purpose, includes the advisory fees paid at the Master Portfolio level, with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Funds Trust Board noted that the Management Rates of the Feeder Fund were in range of the sum of these average rates for the Feeder Fund’s expense Groups for all share classes.
The Master Trust Board reviewed a comparison of the Advisory Agreement Rate of the Master Portfolio with those of other funds in the Master Portfolio’s expense Group at a common asset level. The Master Trust Board noted that the Advisory Agreement Rate of the Master Portfolio was in range of the median rate for the Master Portfolio’s expense Group.
The Master Trust Board also received and considered information about the portions of the total management fees that were retained by Allspring Funds Management after payment of the fees to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of these amounts, the Master Trust Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services. Given the affiliation between Allspring Funds Management and the Sub-Adviser, the Master Trust Board ascribed limited relevance to the allocation of fees between them.
The Boards also received and considered information about the nature and extent of services offered and fee rates charged by Allspring Funds Management and the Sub-Adviser to other types of clients with investment strategies similar to those of the Funds. In this regard, the Boards received information about the significantly greater scope of services, and compliance, reporting and other legal burdens and risks of managing proprietary mutual funds compared with those associated with managing assets of other types of clients, including third-party sub-advised fund clients and non-mutual fund clients such as institutional separate accounts.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Funds Trust Board determined that the compensation payable to Allspring Funds Management under the Feeder Fund Management Agreement was reasonable, and the Master Trust Board determined that the compensation payable to Allspring Funds Management under the Master Portfolio Advisory Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
Profitability
The Boards received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole. The Master Trust Board noted that the Sub-Adviser’s profitability information with respect to providing services to the Master Portfolio and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses and differences in how Allspring Global Investments calculates its pre-tax profit metric versus the methodology used when Allspring Funds Management was part of Wells Fargo. It was noted that the impact of such differences had only minor impact on the financial results presented. Among other things, the Boards noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Based on their review, the Boards did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Funds to be at a level that would prevent the Boards from approving the continuation of the Advisory Agreements.
Economies of Scale
The Boards received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Funds, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders of the Funds. The Boards noted the existence of breakpoints in the Master Portfolio’s advisory fee structure and the Feeder Fund’s management fee structure, which operate generally to reduce the Funds’ expense ratios as the Funds grow in size, and the size of the
68 | Allspring Core Bond Fund
Other information (unaudited)
Master Portfolio and the Feeder Fund, respectively, in relation to such breakpoints. The Boards considered that, in addition to advisory fee and management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways, including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
The Boards concluded that Allspring Funds Management’s arrangements with respect to each Fund, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Funds and their shareholders.
Other Benefits to Allspring Funds Management and the Sub-Adviser
The Boards received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, as a result of their relationships with the Funds. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Funds and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Funds. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it.
The Boards also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser and fees earned in the past by Allspring Funds Management and the Sub-Adviser from managing a private investment vehicle for the fund family’s securities lending collateral.
Based on their consideration of the factors and information they deemed relevant, including those described here, the Boards did not find that any ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, were unreasonable.
Conclusion
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Funds Trust Board unanimously determined that the compensation payable to Allspring Funds Management was reasonable, and approved the continuation of the Feeder Fund Management Agreement for a one-year term. Additionally, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Master Trust Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser was reasonable, and approved the continuation of the Master Portfolio Advisory Agreement and the Sub-Advisory Agreement, each for a one-year term.
Allspring Core Bond Fund | 69
Other information (unaudited)
Liquidity risk management program
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Allspring Funds Trust (“Funds Trust”) has adopted and implemented a liquidity risk management program (the “Program”) on behalf of each of its series (other than the series that operate as money market funds), including the Fund, and Allspring Master Trust (“Master Trust” and together with Funds Trust, the “Trusts”) has adopted and implemented the Program on behalf of each of its series, including the Portfolio, which is reasonably designed to assess and manage the Fund’s and the Portfolio’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund or Portfolio is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund or Portfolio. The Trusts’ Boards of Trustees (the “Boards”) previously approved the designation of Allspring Funds Management, LLC (“Allspring Funds Management”), the Fund’s investment manager and the Portfolio’s investment adviser, to administer the Program, and Allspring Funds Management has established a Liquidity Risk Management Council (the “Council”) composed of personnel from multiple departments within Allspring Funds Management and its affiliates to assist Allspring Funds Management in the administration of the Program.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s and the Portfolio’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s and the Portfolio’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent the Fund or the Portfolio does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s or Portfolio’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if the Fund or the Portfolio has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s or the Portfolio’s “highly liquid investments” below its HLIM; and (6) periodic reporting to the Boards.
At a meeting of the Boards held on May 16-17, 2023, the Boards received and reviewed a written report (the “Report”) from Allspring Funds Management that, among other things, addressed the operation of the Program and assessed its adequacy and effectiveness for the period from January 1, 2022 through December 31, 2022 (the “Reporting Period”). The Report noted significant liquidity events impacting the Funds and Portfolios related to extended foreign market holidays as well as the difficulty of trading and settlement of most Russia-related securities due to sanctions activity. The Report noted that there were no material changes to the Program during the Reporting Period.
Allspring Funds Management determined in the Report that the Program has been implemented and operates effectively to manage each Fund’s and Portfolio’s, including the Fund’s and the Portfolio’s, liquidity risk, and Allspring Funds Management continues to believe that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s and the Portfolio’s liquidity developments.
There can be no assurance that the Program will achieve its objectives under all circumstances in the future. With respect to the Fund, please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other risks to which an investment in the Fund may be subject.
70 | Allspring Core Bond 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.
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-06072023-4hjjedjb 07-23
AR0940 05-23
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Contents
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The views expressed and any forward-looking statements are as of May 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 Emerging Growth Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Emerging Growth Fund for the 12-month period that ended May 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. The market was focused on persistently high inflation 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. Markets received a boost in December with the removal of China’s strict COVID-19 lockdowns. In March 2023, a new wave of market anxiety resulted from several bank failures and unease over the possibility of more rate hikes. However, investors regained confidence and markets finished the period in relative calm.
For the 12-month period, stocks and bonds—both domestic U.S. and global—had mixed results. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 2.92%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 lost 1.41%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a return of -8.49%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -2.14%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 6.49%, the Bloomberg Municipal Bond Index6 gained 0.49%, and the ICE BofA U.S. High Yield Index7 returned -0.09%.
High inflation and central bank rate hikes rocked markets.
In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Federal Reserve (Fed) raised its short-term rate by 0.75% in June. Meanwhile, the U.S. unemployment rate remained historically low 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 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, 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.
“ In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring 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 the 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.
2 | Allspring Emerging Growth Fund
Letter to shareholders (unaudited)
August was yet another broadly challenging month for financial markets. 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 was the resilient U.S. jobs 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.
In September, all asset classes suffered further 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. 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 increasing 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 declining overall in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever, with generally flat 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 wound 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.
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 had 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 (ECB) both raised rates by 0.50%.
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 Emerging Growth Fund | 3
Letter to shareholders (unaudited)
“ 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 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 banking industry turmoil created an additional challenge for central banks in balancing inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. 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.
Economic data released in April pointed to global resilience, as Purchasing Managers Indexes1 in the U.S., U.K., and eurozone beat expectations, and China reported first-quarter annualized economic growth of 4.5%. Despite banking industry stress, developed market stocks had monthly gains. The U.S. labor market remained strong, with a 3.5% jobless rate and monthly payroll gains above 200,000. However, uncertainty and inflationary concerns weighed on investors in the U.S. and abroad.
May was marked by a divergence between expanding activity in services and an overall contraction in manufacturing activity in the U.S., U.K., and eurozone. Core inflation remained elevated in the U.S. and Europe, despite the ongoing efforts of the Fed and ECB, which included rate hikes of 0.25% by both in May. Stubborn inflation and the resilient U.S. labor market led to expectations of further interest rate hikes, overall monthly declines across bond indexes, and mixed results for stocks in May. Investor worries over a U.S. debt ceiling impasse were modest, and market confidence was buoyed by a deal in late May to avert a potential U.S. debt default.
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 Emerging Growth Fund
Letter to shareholders (unaudited)
Notice to Shareholders |
Beginning in July 2024, the Fund will be required by the Securities and Exchange Commission to send shareholders a paper copy of a new tailored shareholder report in place of the full shareholder report that you are now receiving. The tailored shareholder report will contain concise information about the Fund, including certain expense and performance information and fund statistics. If you wish to receive this new tailored shareholder report electronically, please follow the instructions on the back cover of this report. |
Other information that is currently included in the shareholder report, such as the Fund’s financial statements, will be available online and upon request, free of charge, in paper or electronic format. |
Allspring Emerging Growth Fund | 5
Performance highlights (unaudited)
Performance highlights
Investment objective | The Fund seeks long-term capital appreciation. |
Manager | Allspring Funds Management, LLC |
Subadviser for the affiliated master portfolio* | Allspring Global Investments, LLC |
Portfolio managers | Robert Gruendyke, CFA, David Nazaret, CFA, Thomas C. Ognar, CFA |
Average annual total returns (%) as of May 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 | Net2 | |
Class A (WEMAX) | 3-31-2008 | -7.76 | 2.68 | 8.13 | -2.13 | 3.90 | 8.77 | 1.35 | 1.27 |
Class C (WEMCX) | 3-31-2008 | -3.88 | 3.15 | 8.13 | -2.88 | 3.15 | 8.13 | 2.10 | 2.02 |
Class R6 (WEGRX)3 | 7-31-2018 | – | – | – | -1.67 | 4.39 | 9.27 | 0.93 | 0.85 |
Administrator Class (WFGDX) | 1-31-2007 | – | – | – | -1.98 | 4.00 | 8.90 | 1.28 | 1.20 |
Institutional Class (WEMIX) | 3-31-2008 | – | – | – | -1.68 | 4.30 | 9.22 | 1.03 | 0.90 |
Russell 2000® Growth Index4 | – | – | – | – | 2.68 | 2.74 | 7.90 | – | – |
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 September 30, 2023 (September 30, 2024 for Class A and Class C), to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 1.27% for Class A, 2.02% for Class C, 0.85% for Class R6, 1.20% for Administrator Class and 0.90% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any) from funds in which the affiliated master portfolio invests, and extraordinary expenses are excluded from the expense caps. Net expenses from the affiliated master portfolio are included in 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. 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. Consult the Fund’s prospectus for additional information on these and other risks.
* | The Fund is a feeder fund in a master-feeder structure that invests substantially all of its assets in a single affiliated master portfolio of the Allspring Master Trust with a substantially identical investment objective and substantially similar investment strategies. References to the investment activities of the Fund are intended to refer to the investment activities of the affiliated master portfolio in which it invests. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. | |
6 | Allspring Emerging Growth Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of May 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 Emerging Growth Fund | 7
Performance highlights (unaudited)
MANAGER’S DISCUSSION
Fund highlights
•The Fund underperformed the Russell 2000® Growth Index for the 12-month period that ended May 31, 2023.
•Stocks within the health care, information technology (IT), and industrials sectors were leading detractors from the Fund’s relative performance.
•The biggest relative outperformers came from the financials sector.
Small caps lagged the overall equity market.
Over the past year, investors continued to deal with high inflation and rising interest rates that dramatically compressed equity valuations for high-growth stocks, particularly among small caps. Notable bank failures during the period steered capital toward the relative safety of large caps, leading them to significantly outperform small caps. The recovery in U.S. equities, in particular growth stocks, has been uneven and highly concentrated in a handful of mega-cap stocks. If the economy can steady amid the likely end of the interest-rate-hiking cycle, we expect to see market breadth improve and broader market participation, including improved performance out of small caps.
Ten largest holdings (%) as of May 31, 20231 | |
SPS Commerce, Inc. | 3.95 |
TransMedics Group, Inc. | 3.68 |
elf Beauty, Inc. | 3.10 |
Novanta, Inc. | 3.04 |
Kinsale Capital Group, Inc. | 2.76 |
Casella Waste Systems, Inc. Class A | 2.49 |
Inspire Medical Systems, Inc. | 2.22 |
SPX Technologies, Inc. | 2.08 |
Shoals Technologies Group, Inc. Class A | 1.99 |
DigitalOcean Holdings, Inc. | 1.93 |
1 | Each holding represents the Fund’s allocable portion of the affiliated master portfolio security. Figures represent each holding as a percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
Health care and IT stocks were leading detractors from relative performance.
Weakness in the Fund’s relative performance came from the portfolio’s health care and IT holdings. Within health care, Arcutis Biotherapeutics was the biggest detractor, with shares down more than 60% as the launch of ZORYVE, a topical treatment of plaque psoriasis, got off to a slower-than-expected start. This was a pivotal catalyst for shares that underperformed, so we exited the position. Within IT, Rapid7 Inc. and Semtech Corp. were notable detractors during the period. Rapid7 Inc. is a cybersecurity company that reduced guidance and cited slower spending by customers. The company specializes in vulnerability management, and questions about the size of its addressable market and poor company execution led us to exit the position. Semtech Corp. is a semiconductor company whose shares fell sharply after reporting disappointing sequential quarterly bookings. It cited inflationary pressures and supply-chain challenges as culprits. Semtech’s challenges appear to be mostly industry-related, but nonetheless, we aggressively trimmed the position during the period.
Financial services was a bright spot for the portfolio.
Within financial services, specialty insurance holding Kinsale Capital Group, Inc., continued to shine and gained another 38% during the period. Kinsale is a pure-play excess and surplus insurer—a segment that has relatively little competition. The company has a home-grown technology system that allows for better underwriting and pays out lower commissions to independent brokers. It continued to increase gross written premiums and deliver strong earnings growth during the period. We remain attracted to the growth profile of the company due to its favorable cost structure over its peers, and we view it as a sustainable growth franchise over the long term. The Fund avoided any investments in banks, which mitigated losses seen across the regional bank sector.
Sector allocation as of May 31, 20231 |
1 | Figures represent the sector allocation of the affiliated master portfolio as a percentage of the long-term investments of the affiliated master portfolio. Allocations are subject to change and may have changed since the date specified. |
Small caps have underperformed, but they are attractive on a relative basis.
The pausing of interest rate hikes could be a key catalyst for valuations to stabilize. At the stock-specific level, we continue to put greater emphasis on companies that can sustainably generate earnings and cash flow in the present versus years down the road, factoring in the current interest rate environment. Investors are no longer paying just for growth. There’s greater scrutiny around sustainability of growth. The portfolio also has an intentional tilt toward diversification. We continue to look for proven business models that are less dependent on capital markets to fund
8 | Allspring Emerging Growth Fund
Performance highlights (unaudited)
profitless growth over the long term. We believe that companies that can grow, and do so profitably, will emerge as long-term winners.
Relative valuations for small growth stocks are attractive after years of underperformance relative to large growth. Small caps have endured a fair amount of pain over an extended period. Given how much compression we’ve seen among small caps, particularly growth stocks, we think the setup going forward looks much more favorable. Investors would be well served to take a longer perspective, stay invested in sustainable growth businesses, and allow long-term compounding to drive returns. We truly believe that the prospects for our companies are setting up a strong base for improved performance in the periods ahead.
Allspring Emerging Growth Fund | 9
Fund expenses (unaudited)
Fund expenses
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 December 1, 2022 to May 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 the 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 12-1-2022 | Ending account value 5-31-2023 | Expenses paid during the period1, 2 | Annualized net expense ratio2 | |
Class A | ||||
Actual | $1,000.00 | $999.39 | $6.38 | 1.28 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,018.55 | $6.44 | 1.28 % |
Class C | ||||
Actual | $1,000.00 | $999.35 | $10.12 | 2.03 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,014.81 | $10.20 | 2.03 % |
Class R6 | ||||
Actual | $1,000.00 | $999.41 | $4.24 | 0.85 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,020.69 | $4.28 | 0.85 % |
Administrator Class | ||||
Actual | $1,000.00 | $999.40 | $5.98 | 1.20 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,018.95 | $6.04 | 1.20 % |
Institutional Class | ||||
Actual | $1,000.00 | $999.41 | $4.49 | 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).
2 Amounts reflect net expenses allocated from the affiliated Master Portfolio in which the Fund invests.
10 | Allspring Emerging Growth Fund
Portfolio of investments—May 31, 2023
Portfolio of investments
Value | ||||||
Investment companies: 100.26% | ||||||
Affiliated master portfolio: 100.26% | ||||||
Allspring Emerging Growth Portfolio | $290,401,028 | |||||
Total investment companies (Cost $221,959,366) | 290,401,028 | |||||
Total investments in securities (Cost $221,959,366) | 100.26 % | 290,401,028 | ||||
Other assets and liabilities, net | (0.26 ) | (741,598 ) | ||||
Total net assets | 100.00 % | $289,659,430 | ||||
Transactions with the affiliated Master Portfolio were as follows:
% of ownership, beginning of period | % of ownership, end of period | Net realized gains (losses) on investments allocated from affiliated Master Portfolio | Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolio | Dividends allocated from affiliated Master Portfolio | Securities lending income allocated from affiliated Master Portfolio | Affiliated income allocated from affiliated Master Portfolio | Value, end of period | |
Allspring Emerging Growth Portfolio | 90.11 % | 89.59 % | $(5,001,838 ) | $1,055,644 | $725,681 | $94,322 | $205,658 | $290,401,028 |
The accompanying notes are an integral part of these financial statements.
Allspring Emerging Growth Fund | 11
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in affiliated Master Portfolio, at value (cost $221,959,366) | $290,401,028 |
Receivable for Fund shares sold | 146,901 |
Receivable from manager | 28,672 |
Prepaid expenses and other assets | 90,287 |
Total assets | 290,666,888 |
Liabilities | |
Payable for Fund shares redeemed | 871,125 |
Administration fees payable | 38,360 |
Trustees’ fees and expenses payable | 666 |
Distribution fee payable | 608 |
Accrued expenses and other liabilities | 96,699 |
Total liabilities | 1,007,458 |
Total net assets | $289,659,430 |
Net assets consist of | |
Paid-in capital | $237,996,038 |
Total distributable earnings | 51,663,392 |
Total net assets | $289,659,430 |
Computation of net asset value and offering price per share | |
Net assets–Class A | $121,018,891 |
Shares outstanding–Class A1 | 13,875,779 |
Net asset value per share–Class A | $8.72 |
Maximum offering price per share – Class A2 | $9.25 |
Net assets–Class C | $955,889 |
Shares outstanding–Class C1 | 157,145 |
Net asset value per share–Class C | $6.08 |
Net assets–Class R6 | $28,457,644 |
Shares outstanding–Class R61 | 2,681,664 |
Net asset value per share–Class R6 | $10.61 |
Net assets–Administrator Class | $15,417,877 |
Shares outstanding–Administrator Class1 | 1,641,961 |
Net asset value per share–Administrator Class | $9.39 |
Net assets–Institutional Class | $123,809,129 |
Shares outstanding–Institutional Class1 | 11,746,668 |
Net asset value per share–Institutional Class | $10.54 |
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.
12 | Allspring Emerging Growth Fund
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Dividends allocated from affiliated Master Portfolio | $725,681 |
Affiliated income allocated from affiliated Master Portfolio | 205,658 |
Securities lending income allocated from affiliated Master Portfolio | 94,322 |
Expenses allocated from affiliated Master Portfolio | (2,655,116 ) |
Waivers allocated from affiliated Master Portfolio | 10,637 |
Total investment income | (1,618,818 ) |
Expenses | |
Management fee | 157,446 |
Administration fees | |
Class A | 271,091 |
Class C | 2,885 |
Class R6 | 8,036 |
Administrator Class | 22,046 |
Institutional Class | 182,888 |
Shareholder servicing fees | |
Class A | 322,288 |
Class C | 3,412 |
Administrator Class | 42,191 |
Distribution fee | |
Class C | 10,235 |
Custody and accounting fees | 18,500 |
Professional fees | 39,056 |
Registration fees | 48,327 |
Shareholder report expenses | 27,128 |
Trustees’ fees and expenses | 21,093 |
Other fees and expenses | 6,519 |
Total expenses | 1,183,141 |
Less: Fee waivers and/or expense reimbursements | |
Fund-level | (346,428 ) |
Class A | (20,861 ) |
Class R6 | (3,152 ) |
Administrator Class | (1,664 ) |
Institutional Class | (84,913 ) |
Net expenses | 726,123 |
Net investment loss | (2,344,941 ) |
Realized and unrealized gains (losses) on investments | |
Net realized losses on investments allocated from affiliated Master Portfolio | (5,001,838 ) |
Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolio | 1,055,644 |
Net realized and unrealized gains (losses) on investments | (3,946,194 ) |
Net decrease in net assets resulting from operations | $(6,291,135 ) |
The accompanying notes are an integral part of these financial statements.
Allspring Emerging Growth Fund | 13
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment loss | $(2,344,941 ) | $(5,137,253 ) | ||
Net realized gains (losses) on investments | (5,001,838 ) | 232,050,592 | ||
Net change in unrealized gains (losses) on investments | 1,055,644 | (327,135,019 ) | ||
Net decrease in net assets resulting from operations | (6,291,135 ) | (100,221,680 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class A | 0 | (62,681,311 ) | ||
Class C | 0 | (1,233,291 ) | ||
Class R6 | 0 | (5,898,804 ) | ||
Administrator Class | 0 | (7,999,256 ) | ||
Institutional Class | 0 | (61,664,834 ) | ||
Total distributions to shareholders | 0 | (139,477,496 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class A | 411,868 | 3,634,624 | 422,522 | 6,066,711 |
Class C | 4,232 | 26,812 | 97,992 | 1,394,743 |
Class R6 | 728,487 | 8,110,513 | 1,375,088 | 22,705,246 |
Administrator Class | 169,603 | 1,635,469 | 159,434 | 2,285,979 |
Institutional Class | 1,811,034 | 19,525,541 | 5,047,859 | 87,194,049 |
32,932,959 | 119,646,728 | |||
Reinvestment of distributions | ||||
Class A | 0 | 0 | 4,788,131 | 60,617,734 |
Class C | 0 | 0 | 138,107 | 1,233,291 |
Class R6 | 0 | 0 | 125,710 | 1,924,617 |
Administrator Class | 0 | 0 | 585,228 | 7,964,955 |
Institutional Class | 0 | 0 | 4,040,376 | 61,494,520 |
0 | 133,235,117 | |||
Payment for shares redeemed | ||||
Class A | (1,671,745 ) | (14,944,143 ) | (1,754,937 ) | (23,706,994 ) |
Class C | (127,934 ) | (770,829 ) | (117,521 ) | (1,197,540 ) |
Class R6 | (270,345 ) | (2,758,578 ) | (330,224 ) | (6,538,508 ) |
Administrator Class | (372,127 ) | (3,604,407 ) | (413,854 ) | (5,802,034 ) |
Institutional Class | (4,697,411 ) | (50,099,244 ) | (26,013,236 ) | (552,947,062 ) |
(72,177,201 ) | (590,192,138 ) | |||
Net decrease in net assets resulting from capital share transactions | (39,244,242 ) | (337,310,293 ) | ||
Total decrease in net assets | (45,535,377 ) | (577,009,469 ) | ||
Net assets | ||||
Beginning of period | 335,194,807 | 912,204,276 | ||
End of period | $289,659,430 | $335,194,807 | ||
The accompanying notes are an integral part of these financial statements.
14 | Allspring Emerging Growth Fund
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $8.91 | $18.05 | $14.71 | $13.51 | $17.04 |
Net investment loss | (0.08 )1 | (0.16 )1 | (0.20 )1 | (0.17 ) | (0.16 )1 |
Net realized and unrealized gains (losses) on investments | (0.11 ) | (3.47 ) | 7.69 | 2.13 | (0.19 ) |
Total from investment operations | (0.19 ) | (3.63 ) | 7.49 | 1.96 | (0.35 ) |
Distributions to shareholders from | |||||
Net realized gains | 0.00 | (5.51 ) | (4.15 ) | (0.76 ) | (3.18 ) |
Net asset value, end of period | $8.72 | $8.91 | $18.05 | $14.71 | $13.51 |
Total return2 | (2.13 )% | (29.16 )% | 53.22 % | 14.97 % | (0.84 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.40 % | 1.36 % | 1.35 % | 1.36 % | 1.35 % |
Net expenses | 1.27 % | 1.26 % | 1.27 % | 1.27 % | 1.29 % |
Net investment loss | (0.95 )% | (1.10 )% | (1.12 )% | (1.08 )% | (1.06 )% |
Supplemental data | |||||
Portfolio turnover rate3 | 70 % | 51 % | 48 % | 55 % | 71 % |
Net assets, end of period (000s omitted) | $121,019 | $134,825 | $210,838 | $148,866 | $145,898 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.84% |
Year ended May 31, 2022 | 0.82% |
Year ended May 31, 2021 | 0.81% |
Year ended May 31, 2020 | 0.81% |
Year ended May 31, 2019 | 0.81% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Emerging Growth Fund | 15
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $6.26 | $14.41 | $12.40 | $11.58 | $15.19 |
Net investment loss | (0.11 )1 | (0.20 )1 | (0.28 )1 | (0.21 )1 | (0.25 )1 |
Net realized and unrealized gains (losses) on investments | (0.07 ) | (2.44 ) | 6.44 | 1.79 | (0.18 ) |
Total from investment operations | (0.18 ) | (2.64 ) | 6.16 | 1.58 | (0.43 ) |
Distributions to shareholders from | |||||
Net realized gains | 0.00 | (5.51 ) | (4.15 ) | (0.76 ) | (3.18 ) |
Net asset value, end of period | $6.08 | $6.26 | $14.41 | $12.40 | $11.58 |
Total return2 | (2.88 )% | (29.71 )% | 52.19 % | 14.16 % | (1.55 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 2.14 % | 2.10 % | 2.10 % | 2.11 % | 2.10 % |
Net expenses | 2.03 % | 2.03 % | 2.03 % | 2.03 % | 2.04 % |
Net investment loss | (1.70 )% | (1.86 )% | (1.89 )% | (1.84 )% | (1.78 )% |
Supplemental data | |||||
Portfolio turnover rate3 | 70 % | 51 % | 48 % | 55 % | 71 % |
Net assets, end of period (000s omitted) | $956 | $1,758 | $2,338 | $1,599 | $1,761 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.84% |
Year ended May 31, 2022 | 0.82% |
Year ended May 31, 2021 | 0.81% |
Year ended May 31, 2020 | 0.81% |
Year ended May 31, 2019 | 0.81% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
16 | Allspring Emerging Growth Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class R6 | 2023 | 2022 | 2021 | 2020 | 20191 |
Net asset value, beginning of period | $10.79 | $20.64 | $16.34 | $14.86 | $18.70 |
Net investment loss | (0.06 )2 | (0.10 ) | (0.14 ) | (0.10 )2 | (0.07 )2 |
Net realized and unrealized gains (losses) on investments | (0.12 ) | (4.24 ) | 8.59 | 2.34 | (0.59 ) |
Total from investment operations | (0.18 ) | (4.34 ) | 8.45 | 2.24 | (0.66 ) |
Distributions to shareholders from | |||||
Net realized gains | 0.00 | (5.51 ) | (4.15 ) | (0.76 ) | (3.18 ) |
Net asset value, end of period | $10.61 | $10.79 | $20.64 | $16.34 | $14.86 |
Total return3 | (1.67 )% | (28.91 )% | 53.85 % | 15.51 % | (2.35 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 0.97 % | 0.94 % | 0.92 % | 0.93 % | 0.92 % |
Net expenses | 0.85 % | 0.85 % | 0.85 % | 0.85 % | 0.85 % |
Net investment loss | (0.52 )% | (0.68 )% | (0.68 )% | (0.67 )% | (0.51 )% |
Supplemental data | |||||
Portfolio turnover rate4 | 70 % | 51 % | 48 % | 55 % | 71 % |
Net assets, end of period (000s omitted) | $28,458 | $23,999 | $21,729 | $19,458 | $22 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.84% |
Year ended May 31, 2022 | 0.83% |
Year ended May 31, 2021 | 0.81% |
Year ended May 31, 2020 | 0.81% |
Year ended May 31, 20191 | 0.81% |
1 | For the period from July 31, 2018 (commencement of class operations) to May 31, 2019 |
2 | Calculated based upon average shares outstanding |
3 | Returns for periods of less than one year are not annualized. |
4 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Emerging Growth Fund | 17
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $9.58 | $18.98 | $15.31 | $14.02 | $17.54 |
Net investment loss | (0.08 )1 | (0.17 )1 | (0.20 )1 | (0.14 )1 | (0.15 )1 |
Net realized and unrealized gains (losses) on investments | (0.11 ) | (3.72 ) | 8.02 | 2.19 | (0.19 ) |
Total from investment operations | (0.19 ) | (3.89 ) | 7.82 | 2.05 | (0.34 ) |
Distributions to shareholders from | |||||
Net realized gains | 0.00 | (5.51 ) | (4.15 ) | (0.76 ) | (3.18 ) |
Net asset value, end of period | $9.39 | $9.58 | $18.98 | $15.31 | $14.02 |
Total return | (1.98 )% | (29.09 )% | 53.31 % | 15.07 % | (0.75 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.32 % | 1.28 % | 1.27 % | 1.28 % | 1.27 % |
Net expenses | 1.20 % | 1.20 % | 1.20 % | 1.20 % | 1.20 % |
Net investment loss | (0.87 )% | (1.04 )% | (1.05 )% | (1.01 )% | (0.94 )% |
Supplemental data | |||||
Portfolio turnover rate2 | 70 % | 51 % | 48 % | 55 % | 71 % |
Net assets, end of period (000s omitted) | $15,418 | $17,676 | $28,730 | $21,250 | $23,549 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.84% |
Year ended May 31, 2022 | 0.82% |
Year ended May 31, 2021 | 0.81% |
Year ended May 31, 2020 | 0.81% |
Year ended May 31, 2019 | 0.81% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
18 | Allspring Emerging Growth Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Institutional Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $10.72 | $20.55 | $16.29 | $14.83 | $18.30 |
Net investment loss | (0.06 )1 | (0.14 )1 | (0.15 ) | (0.11 )1 | (0.13 ) |
Net realized and unrealized gains (losses) on investments | (0.12 ) | (4.18 ) | 8.56 | 2.33 | (0.16 ) |
Total from investment operations | (0.18 ) | (4.32 ) | 8.41 | 2.22 | (0.29 ) |
Distributions to shareholders from | |||||
Net realized gains | 0.00 | (5.51 ) | (4.15 ) | (0.76 ) | (3.18 ) |
Net asset value, end of period | $10.54 | $10.72 | $20.55 | $16.29 | $14.83 |
Total return | (1.68 )% | (28.95 )% | 53.75 % | 15.40 % | (0.42 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.07 % | 1.02 % | 1.02 % | 1.03 % | 1.02 % |
Net expenses | 0.90 % | 0.90 % | 0.90 % | 0.90 % | 0.90 % |
Net investment loss | (0.57 )% | (0.75 )% | (0.75 )% | (0.71 )% | (0.67 )% |
Supplemental data | |||||
Portfolio turnover rate2 | 70 % | 51 % | 48 % | 55 % | 71 % |
Net assets, end of period (000s omitted) | $123,809 | $156,936 | $648,569 | $471,512 | $578,073 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.84% |
Year ended May 31, 2022 | 0.82% |
Year ended May 31, 2021 | 0.81% |
Year ended May 31, 2020 | 0.81% |
Year ended May 31, 2019 | 0.81% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Emerging Growth Fund | 19
Notes to financial statements
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 Emerging Growth Fund (the “Fund”) which is a diversified series of the Trust.
The Fund is a feeder fund in a master-feeder structure that invests substantially all of its assets in a single master portfolio with a substantially identical investment objective and substantially similar investment strategies. The Fund invests in Allspring Emerging Growth Portfolio, a separate diversified portfolio (the “affiliated Master Portfolio”) of Allspring Master Trust, a registered open-end management investment company. As of May 31, 2023, the Fund owned 89.59% of Allspring Emerging Growth Portfolio. The affiliated Master Portfolio directly acquires portfolio securities and the Fund acquires an indirect interest in those securities. The Fund accounts for its investment in the affiliated Master Portfolio as a partnership investment and records on a daily basis its share of the affiliated Master Portfolio’s income, expense and realized and unrealized gains and losses. The financial statements of the affiliated Master Portfolio for the year ended May 31, 2023 are included in this report and should be read in conjunction with the Fund’s financial statements.
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.
Investments in the affiliated Master Portfolio are valued daily based on the Fund’s proportionate share of the affiliated Master Portfolio’s net assets, which are also valued daily.
Investments which are not valued using the method 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.
Investment transactions, income and expenses
Investments in the affiliated Master Portfolio are recorded on a trade date basis. The Fund records daily its proportionate share of the affiliated Master Portfolio’s income, expenses and realized and unrealized gains or losses. The Fund also accrues its own expenses.
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 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 Emerging Growth Fund
Notes to financial statements
As of May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $221,163,028 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $69,238,000 |
Gross unrealized losses | 0 |
Net unrealized gains | $69,238,000 |
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 difference causing such reclassification is due to net operating losses. At May 31, 2023, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statements of Assets and Liabilities:
Paid-in capital | Total distributable earnings |
$(1,393,484 ) | $1,393,484 |
As of May 31, 2023, the Fund had capital loss carryforwards which consist of $16,623,151 in short-term capital losses and a qualified late-year ordinary loss of $951,457 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
At May 31, 2023, the Fund’s investment in the affiliated Master Portfolio was measured at fair value using the net asset value per share (or its equivalent) as a practical expedient. The investment objective and fair value of the affiliated Master Portfolio is as follows:
Affiliated Master Portfolio | Investment objective | Fair value of affiliated Master Portfolio |
Allspring Emerging Growth Portfolio | Seek long-term capital appreciation | $290,401,028 |
The affiliated Master Portfolio does not have a redemption period notice, can be redeemed daily and does not have any unfunded commitments.
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 $5 billion | 0.050 % |
Next $5 billion | 0.040 |
Over $10 billion | 0.030 |
For the year ended May 31, 2023, the management fee was equivalent to an annual rate of 0.05% of the Fund’s average daily net assets.
Allspring Funds Management also serves as the adviser to the affiliated Master Portfolio and is entitled to receive a fee from the affiliated Master Portfolio for those services.
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
Allspring Emerging Growth Fund | 21
Notes to financial statements
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. Net expenses from the affiliated Master Portfolio are included in the expense caps. Allspring Funds Management has contractually committed through September 30, 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 May 31, 2023, the contractual expense caps are as follows:
EXPENSE RATIO CAPS | |
Class A | 1.28 % |
Class C | 2.03 |
Class R6 | 0.85 |
Administrator Class | 1.20 |
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 May 31, 2023, Allspring Funds Distributor received $1,268 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 May 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.
5.
INVESTMENT PORTFOLIO TRANSACTIONS
The Fund seeks to achieve its investment objective by investing substantially all of its assets in the affiliated Master Portfolio. Purchases and sales have been calculated by multiplying the Fund’s ownership percentage of the affiliated Master Portfolio at the end of the period by the affiliated Master Portfolio’s purchases and sales. Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the year ended May 31, 2023 were $217,547,806 and $262,456,982, 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 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 May 31, 2023, there were no borrowings by the Fund under the agreement.
22 | Allspring Emerging Growth Fund
Notes to financial statements
7.
DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid was $0 and $139,477,496 of long-term capital gains for the years ended May 31, 2023 and May 31, 2022, respectively.
As of May 31, 2023, the components of distributable earnings on a tax basis were as follows:
Unrealized gains | Late-year ordinary losses deferred | Capital loss carryforward |
$69,238,000 | $(951,457 ) | $(16,623,151 ) |
8.
CONCENTRATION RISKS
Concentration risks result from exposure to a limited number of sectors. Through its investment in the affiliated Master Portfolio which may invest a substantial portion of its assets in any sector, the Fund may in turn be more affected by changes in that sector than a fund whose investments are not heavily weighted in any sector. As of the end of the period, the affiliated Master Portfolio concentrated its portfolio in investments related to the information technology 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.
10.
REDEMPTIONS IN-KIND
During the year ended May 31, 2022, the Fund redeemed assets through in-kind redemptions for shareholders in the Institutional Class. These redemption transactions are reflected on the Statement of Changes in Net Assets. The date of the redemption transaction, value of securities issued from the redemption, cash paid, realized gains (losses) and the percentage of the Fund redeemed by the shareholder was as follows:
Date | Value of securities issued | Cash | Realized gains (losses) | % of the Fund |
08-27-2021 | $348,404,897 | $1,817,058 | $176,872,468 | 39.45 % |
Allspring Emerging Growth Fund | 23
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 Emerging Growth Fund (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of May 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 May 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 interests held as of May 31, 2023, by correspondence with the transfer agent of the master portfolio. 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
July 27, 2023
24 | Allspring Emerging Growth Fund
Portfolio of investments—May 31, 2023
Portfolio of investments
Shares | Value | |||||
Common stocks: 95.23% | ||||||
Consumer discretionary: 8.78% | ||||||
Automobile components: 0.76% | ||||||
Fox Factory Holding Corp.† | 27,718 | $2,464,684 | ||||
Diversified consumer services: 0.70% | ||||||
Bright Horizons Family Solutions, Inc.† | 26,600 | 2,276,960 | ||||
Hotels, restaurants & leisure: 4.36% | ||||||
First Watch Restaurant Group, Inc.† | 152,563 | 2,692,737 | ||||
Hilton Grand Vacations, Inc.† | 136,300 | 5,826,825 | ||||
Papa John’s International, Inc. | 21,665 | 1,518,933 | ||||
Wingstop, Inc. | 20,447 | 4,076,314 | ||||
14,114,809 | ||||||
Specialty retail: 1.90% | ||||||
Boot Barn Holdings, Inc.† | 74,450 | 5,034,309 | ||||
Leslie’s, Inc.† | 117,714 | 1,115,929 | ||||
6,150,238 | ||||||
Textiles, apparel & luxury goods: 1.06% | ||||||
Crocs, Inc.† | 30,675 | 3,444,189 | ||||
Consumer staples: 8.36% | ||||||
Beverages: 2.38% | ||||||
Celsius Holdings, Inc.† | 29,285 | 3,676,146 | ||||
Duckhorn Portfolio, Inc.† | 192,971 | 2,514,412 | ||||
MGP Ingredients, Inc. | 16,000 | 1,520,960 | ||||
7,711,518 | ||||||
Consumer staples distribution & retail : 1.69% | ||||||
Chefs’ Warehouse, Inc.† | 176,143 | 5,479,809 | ||||
Food products: 1.19% | ||||||
Simply Good Foods Co.† | 106,420 | 3,851,340 | ||||
Personal care products: 3.10% | ||||||
elf Beauty, Inc.† | 96,831 | 10,072,360 | ||||
Energy: 2.96% | ||||||
Energy equipment & services: 1.12% | ||||||
Helmerich & Payne, Inc. | 117,500 | 3,628,400 | ||||
Oil, gas & consumable fuels: 1.84% | ||||||
Matador Resources Co. | 68,700 | 3,020,739 | ||||
Viper Energy Partners LP | 113,700 | 2,931,186 | ||||
5,951,925 | ||||||
Financials: 7.87% | ||||||
Financial services: 4.02% | ||||||
Flywire Corp.† | 182,906 | 5,494,497 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring Emerging Growth Portfolio | 25
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Financial services (continued) | ||||||
I3 Verticals, Inc. Class A† | 62,900 | $1,437,265 | ||||
Shift4 Payments, Inc. Class A† | 97,100 | 6,090,112 | ||||
13,021,874 | ||||||
Insurance: 3.85% | ||||||
Goosehead Insurance, Inc. Class A† | 64,100 | 3,537,038 | ||||
Kinsale Capital Group, Inc. | 29,593 | 8,966,087 | ||||
12,503,125 | ||||||
Health care: 22.97% | ||||||
Biotechnology: 3.68% | ||||||
Apellis Pharmaceuticals, Inc.† | 28,200 | 2,420,970 | ||||
Arcutis Biotherapeutics, Inc.† | 108,256 | 813,003 | ||||
Cytokinetics, Inc.† | 52,600 | 1,982,494 | ||||
Immunocore Holdings PLC ADR† | 27,100 | 1,495,378 | ||||
Madrigal Pharmaceuticals, Inc.† | 11,700 | 3,257,397 | ||||
Vericel Corp.† | 60,913 | 1,956,525 | ||||
11,925,767 | ||||||
Health care equipment & supplies: 13.40% | ||||||
Axonics, Inc.† | 45,750 | 2,213,842 | ||||
Establishment Labs Holdings, Inc.† | 34,100 | 2,200,132 | ||||
Inari Medical, Inc.† | 31,900 | 1,926,760 | ||||
Inspire Medical Systems, Inc.† | 24,565 | 7,185,017 | ||||
iRhythm Technologies, Inc.† | 31,300 | 3,576,651 | ||||
Outset Medical, Inc.† | 95,611 | 1,991,577 | ||||
PROCEPT BioRobotics Corp.† | 31,900 | 1,067,055 | ||||
Shockwave Medical, Inc.† | 11,301 | 3,108,792 | ||||
SI-BONE, Inc.† | 162,093 | 4,081,502 | ||||
Silk Road Medical, Inc.† | 10,577 | 319,320 | ||||
TransMedics Group, Inc.† | 163,942 | 11,912,026 | ||||
Treace Medical Concepts, Inc.† | 144,700 | 3,849,020 | ||||
43,431,694 | ||||||
Health care providers & services: 2.40% | ||||||
Castle Biosciences, Inc.† | 100,056 | 2,444,368 | ||||
HealthEquity, Inc.† | 25,200 | 1,380,960 | ||||
Hims & Hers Health, Inc.† | 333,200 | 2,978,808 | ||||
RadNet, Inc.† | 33,429 | 967,435 | ||||
7,771,571 | ||||||
Health care technology: 1.77% | ||||||
Certara, Inc.† | 67,700 | 1,406,806 | ||||
Evolent Health, Inc. Class A† | 102,515 | 2,987,287 | ||||
Phreesia, Inc.† | 45,300 | 1,359,906 | ||||
5,753,999 | ||||||
The accompanying notes are an integral part of these financial statements.
26 | Allspring Emerging Growth Portfolio
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Pharmaceuticals: 1.72% | ||||||
Amylyx Pharmaceuticals, Inc.† | 52,600 | $1,298,694 | ||||
Revance Therapeutics, Inc.† | 139,519 | 4,263,701 | ||||
5,562,395 | ||||||
Industrials: 18.21% | ||||||
Aerospace & defense: 1.40% | ||||||
Hexcel Corp. | 65,700 | 4,532,643 | ||||
Building products: 1.82% | ||||||
AZEK Co., Inc.† | 146,269 | 3,400,754 | ||||
Zurn Elkay Water Solutions Corp. Class C | 111,484 | 2,509,505 | ||||
5,910,259 | ||||||
Commercial services & supplies: 2.49% | ||||||
Casella Waste Systems, Inc. Class A† | 89,641 | 8,082,033 | ||||
Construction & engineering: 0.50% | ||||||
Construction Partners, Inc. Class A† | 58,285 | 1,612,746 | ||||
Electrical equipment: 2.31% | ||||||
Array Technologies, Inc.† | 16,100 | 356,937 | ||||
NEXTracker, Inc. Class A† | 18,056 | 690,642 | ||||
Shoals Technologies Group, Inc. Class A† | 274,662 | 6,451,810 | ||||
7,499,389 | ||||||
Ground transportation: 1.72% | ||||||
Marten Transport Ltd. | 118,000 | 2,495,700 | ||||
Saia, Inc.† | 10,911 | 3,100,470 | ||||
5,596,170 | ||||||
Machinery: 2.39% | ||||||
SPX Technologies, Inc.† | 88,208 | 6,735,563 | ||||
Xylem, Inc. | 10,012 | 1,003,202 | ||||
7,738,765 | ||||||
Professional services: 2.32% | ||||||
ASGN, Inc.† | 39,801 | 2,604,180 | ||||
Paycor HCM, Inc.† | 223,295 | 4,910,257 | ||||
7,514,437 | ||||||
Trading companies & distributors: 3.26% | ||||||
Applied Industrial Technologies, Inc. | 50,500 | 6,209,480 | ||||
SiteOne Landscape Supply, Inc.† | 31,527 | 4,347,258 | ||||
10,556,738 | ||||||
Information technology: 26.08% | ||||||
Communications equipment: 2.40% | ||||||
Calix, Inc.† | 117,000 | 5,453,370 | ||||
Harmonic, Inc.† | 132,900 | 2,340,369 | ||||
7,793,739 | ||||||
The accompanying notes are an integral part of these financial statements.
Allspring Emerging Growth Portfolio | 27
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Electronic equipment, instruments & components: 3.04% | ||||||
Novanta, Inc.† | 59,405 | $9,837,468 | ||||
IT services: 2.79% | ||||||
DigitalOcean Holdings, Inc.† | 159,971 | 6,262,865 | ||||
Endava PLC ADR† | 57,214 | 2,792,043 | ||||
9,054,908 | ||||||
Semiconductors & semiconductor equipment: 7.41% | ||||||
Allegro MicroSystems, Inc.† | 103,012 | 4,051,462 | ||||
Diodes, Inc.† | 57,886 | 5,200,478 | ||||
Impinj, Inc.† | 53,700 | 5,495,658 | ||||
Semtech Corp.† | 78,056 | 1,696,937 | ||||
Silicon Laboratories, Inc.† | 25,874 | 3,639,696 | ||||
SiTime Corp.† | 39,700 | 3,937,049 | ||||
24,021,280 | ||||||
Software: 10.44% | ||||||
Clearwater Analytics Holdings, Inc. Class A† | 153,293 | 2,471,083 | ||||
CyberArk Software Ltd.† | 11,615 | 1,797,189 | ||||
EngageSmart, Inc.† | 242,281 | 4,598,493 | ||||
Five9, Inc.† | 80,400 | 5,315,244 | ||||
Jamf Holding Corp.† | 50,490 | 928,006 | ||||
PowerSchool Holdings, Inc. Class A† | 87,582 | 1,658,803 | ||||
Sprout Social, Inc. Class A† | 98,428 | 4,262,917 | ||||
SPS Commerce, Inc.† | 82,096 | 12,790,557 | ||||
33,822,292 | ||||||
Total common stocks (Cost $244,350,208) | 308,689,524 | |||||
Investment companies: 1.25% | ||||||
Exchange-traded funds: 1.25% | ||||||
iShares Russell 2000 Growth ETF | 18,011 | 4,044,911 | ||||
Total investment companies (Cost $4,059,866) | 4,044,911 | |||||
Yield | ||||||
Short-term investments: 3.02% | ||||||
Investment companies: 3.02% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.01 % | 9,781,514 | 9,781,514 | |||
Total short-term investments (Cost $9,781,514) | 9,781,514 | |||||
Total investments in securities (Cost $258,191,588) | 99.50 % | 322,515,949 | ||||
Other assets and liabilities, net | 0.50 | 1,623,886 | ||||
Total net assets | 100.00 % | $324,139,835 | ||||
† | Non-income-earning security |
♠ | The issuer of the security is an affiliated person of the Portfolio 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 |
The accompanying notes are an integral part of these financial statements.
28 | Allspring Emerging Growth Portfolio
Portfolio of investments—May 31, 2023
Investments in affiliates
An affiliated investment is an investment in which the Portfolio owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Portfolio and the issuer having the same adviser or investment manager. Transactions with issuers that were affiliates of the Portfolio 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 | $6,288,467 | $116,992,429 | $(113,499,382 ) | $0 | $0 | $9,781,514 | 9,781,514 | $228,871 |
Investments in affiliates no longer held at end of period | ||||||||
Securities Lending Cash Investments LLC | 3,803,495 | 57,536,680 | (61,340,357 ) | 182 | 0 | 0 | 0 | 89,402 1 |
$182 | $0 | $9,781,514 | $318,273 |
1 | Amount shown represents income before fees and rebates. |
The accompanying notes are an integral part of these financial statements.
Allspring Emerging Growth Portfolio | 29
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in unaffiliated securities, at value (cost $248,410,074) | $312,734,435 |
Investments in affiliated securities, at value (cost $9,781,514) | 9,781,514 |
Receivable for investments sold | 4,081,943 |
Receivable for dividends | 119,692 |
Prepaid expenses and other assets | 9,425 |
Total assets | 326,727,009 |
Liabilities | |
Payable for investments purchased | 2,325,715 |
Advisory fee payable | 221,403 |
Trustees’ fees and expenses payable | 505 |
Accrued expenses and other liabilities | 39,551 |
Total liabilities | 2,587,174 |
Total net assets | $324,139,835 |
The accompanying notes are an integral part of these financial statements.
30 | Allspring Emerging Growth Portfolio
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Dividends | $807,272 |
Income from affiliated securities | 228,871 |
Securities lending income (including from affiliate), net | 104,981 |
Interest | 38 |
Total investment income | 1,141,162 |
Expenses | |
Advisory fee | 2,803,445 |
Custody and accounting fees | 57,825 |
Professional fees | 50,291 |
Interest holder report expenses | 10,561 |
Trustees’ fees and expenses | 24,280 |
Other fees and expenses | 8,846 |
Total expenses | 2,955,248 |
Less: Fee waivers and/or expense reimbursements | (11,837 ) |
Net expenses | 2,943,411 |
Net investment loss | (1,802,249 ) |
Realized and unrealized gains (losses) on investments | |
Net realized gains on | |
Unaffiliated securities | 5,257,703 |
Affiliated securities | 182 |
Net realized gains on investments | 5,257,885 |
Net change in unrealized gains (losses) on investments | (9,158,116 ) |
Net realized and unrealized gains (losses) on investments | (3,900,231 ) |
Net decrease in net assets resulting from operations | $(5,702,480 ) |
The accompanying notes are an integral part of these financial statements.
Allspring Emerging Growth Portfolio | 31
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment loss | $(1,802,249 ) | $(4,149,201 ) | ||
Net realized gains on investments | 5,257,885 | 254,745,270 | ||
Net change in unrealized gains (losses) on investments | (9,158,116 ) | (361,893,191 ) | ||
Net decrease in net assets resulting from operations | (5,702,480 ) | (111,297,122 ) | ||
Capital transactions | ||||
Transactions in investors’ beneficial interests | ||||
Contributions | 16,642,379 | 75,769,980 | ||
Withdrawals | (58,772,131 ) | (550,022,954 ) | ||
Net decrease in net assets resulting from capital transactions | (42,129,752 ) | (474,252,974 ) | ||
Total decrease in net assets | (47,832,232 ) | (585,550,096 ) | ||
Net assets | ||||
Beginning of period | 371,972,067 | 957,522,163 | ||
End of period | $324,139,835 | $371,972,067 | ||
The accompanying notes are an integral part of these financial statements.
32 | Allspring Emerging Growth Portfolio
Financial highlights
Financial highlights
Year ended May 31 | |||||
2023 | 2022 | 2021 | 2020 | 2019 | |
Total return | (1.62 )% | (28.85 )% | 53.94 % | 15.49 % | (0.28 )% |
Ratios to average net assets (annualized) | |||||
Gross expenses | 0.84 % | 0.82 % | 0.81 % | 0.81 % | 0.81 % |
Net expenses1 | 0.84 % | 0.82 % | 0.81 % | 0.81 % | 0.81 % |
Net investment loss | (0.51 )% | (0.67 )% | (0.66 )% | (0.62 )% | (0.57 )% |
Supplemental data | |||||
Portfolio turnover rate | 70 % | 51 % | 48 % | 55 % | 71 % |
1 | Net expense ratios reflect voluntary waivers, if any. |
The accompanying notes are an integral part of these financial statements.
Allspring Emerging Growth Portfolio | 33
Notes to financial statements
Notes to financial statements
1.
ORGANIZATION
Allspring Master 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 Emerging Growth Portfolio (the “Portfolio”) which is a diversified series of the Trust.
Interests in the Portfolio are available solely through private placement transactions that do not involve any “public offering” within the meaning of Section 4(a)(2) of the Securities Act of 1933.
2.
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Portfolio, 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 Portfolio 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.
Investments which are not valued using any of 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 Portfolio 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 Portfolio 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. Interests in the non-registered investment company that were redeemable at net asset value were fair valued normally at net asset value. Effective at the close of business on March 29, 2023, the Portfolio 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.
Income earned from investment in the Securities Lending Fund, if any, is included in securities lending income (including from affiliate) (net of fees and rebates) on 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.
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.
34 | Allspring Emerging Growth Portfolio
Notes to financial statements
Federal and other taxes
The Portfolio is not required to pay federal income taxes on its net investment income and net capital gains as it is treated as a partnership for federal income tax purposes. All income, gains and losses of the Portfolio are deemed to have been “passed through” to the interest holders in proportion to their holdings of the Portfolio regardless of whether income and gains have been distributed by the Portfolio.
The Portfolio’s income tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal revenue authority. Management has analyzed the Portfolio’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 May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $258,999,240 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $84,812,884 |
Gross unrealized losses | (21,296,175 ) |
Net unrealized gains | $63,516,709 |
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 Portfolio’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 Portfolio’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 Portfolio’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 Portfolio’s assets and liabilities as of May 31, 2023:
Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
Assets | ||||
Investments in: | ||||
Common stocks | ||||
Consumer discretionary | $28,450,880 | $0 | $0 | $28,450,880 |
Consumer staples | 27,115,027 | 0 | 0 | 27,115,027 |
Energy | 9,580,325 | 0 | 0 | 9,580,325 |
Financials | 25,524,999 | 0 | 0 | 25,524,999 |
Health care | 74,445,426 | 0 | 0 | 74,445,426 |
Industrials | 59,043,180 | 0 | 0 | 59,043,180 |
Information technology | 84,529,687 | 0 | 0 | 84,529,687 |
Investment companies | 4,044,911 | 0 | 0 | 4,044,911 |
Short-term investments | ||||
Investment companies | 9,781,514 | 0 | 0 | 9,781,514 |
Total assets | $322,515,949 | $0 | $0 | $322,515,949 |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the year ended May 31, 2023, the Portfolio did not have any transfers into/out of Level 3.
4.
TRANSACTIONS WITH AFFILIATES
Advisory fee
The Trust has entered into an advisory contract with 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. The adviser is responsible for implementing investment policies and guidelines and for supervising the subadviser, who is responsible for day-to-day portfolio management of the
Allspring Emerging Growth Portfolio | 35
Notes to financial statements
Portfolio. Pursuant to the contract, Allspring Funds Management is entitled to receive an advisory fee at the following annual rate based on the Portfolio’s average daily net assets:
Average daily net assets | Advisory fee |
First $500 million | 0.800 % |
Next $500 million | 0.775 |
Next $1 billion | 0.750 |
Next $1 billion | 0.725 |
Next $1 billion | 0.700 |
Over $4 billion | 0.680 |
For the year ended May 31, 2023, the advisory fee was equivalent to an annual rate of 0.80% of the Portfolio’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Portfolio. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Investments is the subadviser to the Portfolio 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 Portfolio increase.
Allspring Funds Management has voluntarily waived and/or reimbursed advisory fees to reduce the net operating expense ratio of the Portfolio. These voluntary waivers may be discontinued at any time.
Interfund transactions
The Portfolio 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 May 31, 2023 were $242,177,035 and $292,196,577, respectively.
6.
BANK BORROWINGS
The Trust, along with Allspring Variable Trust and Allspring Funds Trust (excluding the money market funds), are parties to a $350,000,000 revolving credit agreement whereby the Portfolio is permitted to use bank borrowings for temporary or emergency purposes, such as to fund interest holders withdrawal requests. Interest under the credit agreement is charged to the Portfolio based on 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 May 31, 2023, there were no borrowings by the Portfolio under the agreement.
7.
CONCENTRATION RISKS
As of the end of the period, the Portfolio 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.
8.
INDEMNIFICATION
Under the Portfolio’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 Portfolio. The Portfolio has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Portfolio’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 Portfolio may enter into contracts with service providers that contain a variety of indemnification clauses. The Portfolio’s maximum exposure under these arrangements is dependent on future claims that may be made against the Portfolio and, therefore, cannot be estimated.
36 | Allspring Emerging Growth Portfolio
Report of independent registered public accounting firm
To the Interest Holders of the Portfolio and Board of Trustees
Allspring Master Trust:
Allspring Master Trust:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Allspring Emerging Growth Portfolio (the Portfolio), one of the portfolios constituting Allspring Master Trust, including the portfolio of investments, as of May 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 Portfolio as of May 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 Portfolio’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 Portfolio 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 May 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
July 27, 2023
Allspring Emerging Growth Portfolio | 37
Other information (unaudited)
Other information
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 and Portfolio file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. Shareholders and Interest holders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
38 | Allspring Emerging 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 128 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 |
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 |
1
The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by call 1-800-222-8222 or by visiting the website at allspringglobal.com.
Allspring Emerging Growth Fund | 39
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 |
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. |
40 | Allspring Emerging Growth Fund
Other information (unaudited)
Officers1
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 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 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 Emerging Growth Fund | 41
Other information (unaudited)
Board consideration of investment management, advisory, and sub-advisory agreements:
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (each, a “Board” and collectively, the “Boards”) of each of Allspring Funds Trust (“Funds Trust”) and Allspring Master Trust (“Master Trust”, and collectively, the “Trusts”) must determine annually whether to approve the continuation of the Trusts’ investment management, advisory, and sub-advisory agreements, as applicable. In this regard, at a Board meeting held on May 15-17, 2023 (the “Meeting”), the Funds Trust Board, all the members of which have no direct or indirect interest in the investment management agreement and are not “interested persons” of the Trusts, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for the Allspring Emerging Growth Fund, a portfolio of Funds Trust (the “Feeder Fund”), an investment management agreement (the “Feeder Fund Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”).
At the Meeting, the Master Trust Board, all the members of which have no direct or indirect interest in the investment advisory and sub-advisory agreements and are Independent Trustees, reviewed and approved: (i) an investment advisory agreement (the “Master Portfolio Advisory Agreement”) with Allspring Funds Management for the Allspring Emerging Growth Portfolio, a portfolio of Master Trust (the “Master Portfolio”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Allspring Global Investments, LLC (the “Sub-Adviser”), an affiliate of Allspring Funds Management, for the Master Portfolio.
The Feeder Fund and the Master Portfolio are collectively referred to as the “Funds.” The Feeder Fund Management Agreement, the Master Portfolio Advisory Agreement, and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
The Feeder Fund is a feeder fund that invest substantially all of its assets in the Master Portfolio. The Master Portfolio has a substantially similar investment objective and substantially similar investment strategies to the Feeder Fund. Information provided to the Boards regarding the Feeder Fund is also applicable to the Master Portfolio, as relevant.
At the Meeting, the Boards considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at meeting of the Boards held in April 2023, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Boards have adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Boards in the discharge of their duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
The Boards noted that they initially approved the Advisory Agreements at a meeting of the Boards held in May 2021, all for a two-year term, in advance of the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC,1 a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. (the “Transaction”). The Trustees also noted that, while they did not specifically consider the continuation of the Advisory Agreements in 2022 as a result of the two-year term that was approved in 2021, the Trustees received and considered certain information at a meeting of the Boards held in April 2022 that was applicable to the Advisory Agreements, including an overview and financial review of the Allspring Global Investments business, information regarding certain ancillary agreements that were approved by the Boards at the April 2022 Board meeting, and comparative data regarding Fund fees and expenses.
In providing information to the Boards, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Boards’ annual contract renewal process earlier in 2023. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Boards considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Boards reviewed reports of Allspring Funds Management at each of their quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Boards and the teams mentioned above confer with portfolio managers at various times throughout the year. The Boards did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Funds Trust Board unanimously determined that the compensation payable to Allspring Funds Management was reasonable, and approved the continuation of the Feeder Fund Management Agreement for a one-year term. Additionally, after its deliberations, the Master Trust Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser was reasonable, and approved the continuation of the Master Portfolio Advisory Agreement and the Sub-Advisory Agreement, each for a one-year term. The Boards considered the approval of the Advisory Agreements for the Funds as part of their consideration of agreements for funds across the complex, but their approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Boards in support of their approvals.
1
The trade name for the asset management firm that includes Allspring Funds Management and the Sub-Adviser is “Allspring Global Investments.”
42 | Allspring Emerging Growth Fund
Other information (unaudited)
Nature, Extent, and Quality of Services
The Boards received and considered various information regarding the nature, extent, and quality of services provided to the Feeder Fund and the Master Portfolio, as applicable, by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Feeder Fund Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business. The Boards also considered information about retention arrangements with respect to key personnel of Allspring Global Investments that were put in place in connection with the Transaction. The Boards took into account information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the Transaction under a transition services agreement and the anticipated timeline for exiting the transition services agreement. In addition, the Boards received and considered information about the full range of services provided to the Fund and the Master Portfolio by Allspring Funds Management and its affiliates.
The Boards considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Master Portfolio. The Boards evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
The Boards further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Boards received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, Allspring Funds Management’s role as administrator of the Funds’ liquidity risk management programs. The Boards also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund Investment Performance and Expenses
The Boards considered the investment performance results for each of the Funds over various time periods ended December 31, 2022. The Boards considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to the Feeder Fund (the “Universe”), and in comparison to the Feeder Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Boards received a description of the methodology used by Broadridge to select the mutual funds in the performance Universe. The Funds Trust Board noted that the investment performance of the Feeder Fund (Administrator Class) was higher than the average investment performance of its Universe for all periods under review, except the one-year period was lower than the average investment performance of the Universe. The Funds Trust Board also noted that the investment performance of the Feeder Fund was higher than its benchmark index, the Russell 2000® Growth Index, for all periods under review except the one-year period, which was lower than its benchmark index.
The Master Trust Board took note of the investment performance of the Master Portfolio in the context of reviewing the investment performance of the Feeder Fund.
The Funds Trust Board also received and considered information regarding the Feeder Fund’s net operating expense ratios, which include fees and expenses of the Master Portfolio, and their various components, including actual management fees assessed at the Feeder Fund and Master Portfolio levels, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Funds Trust Board considered these ratios in comparison to the median ratios of funds in class-specific expense groups that were determined by Broadridge to be similar to the Feeder Fund (the “Groups”). The Funds Trust Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Groups and an explanation of how funds comprising expense groups and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Funds Trust Board noted that the net operating expense ratios of the Feeder Fund were lower than or in range of the median net operating expense ratios of the expense Groups for all share classes. The Funds Trust Board noted that Allspring Funds Management had agreed to reduce the net operating expense caps for the Feeder Fund’s Class A shares.
With respect to the Master Portfolio, the Master Trust Board reviewed the fee rates that are payable to Allspring Funds Management for investment advisory services (as discussed below), which are the only fees charged at the Master Portfolio level, relative to a corresponding expense Group.
The Boards took into account the Funds’ investment performance and expense information provided to them among the factors considered in deciding to re-approve the Advisory Agreements.
Investment Management, Advisory, and Sub-Advisory Fee Rates
The Funds Trust Board noted that Allspring Funds Management receives no advisory fees from the Feeder Fund as long as the Feeder Fund continues to invest all (or substantially all) of its assets in a single master portfolio. If the Feeder Fund were to change its investment structure so that it began investing in two or more master portfolios (a fund-of-funds), Allspring Funds Management would be entitled to receive an annual fee of 0.25% of the Feeder Fund’s average daily net assets for providing investment advisory services to the Feeder Fund, including allocating the Feeder Fund’s assets to the Master Portfolio.
Allspring Emerging Growth Fund | 43
Other information (unaudited)
The Funds Trust Board reviewed and considered the contractual fee rates that are payable by the Feeder Fund to Allspring Funds Management under the Feeder Fund Management Agreement for management services (other than investment advisory services), as well as the contractual fee rates payable by the Feeder Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which include, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rates”).
The Master Trust Board reviewed and considered the contractual investment advisory fee rate that is payable by the Master Portfolio to Allspring Funds Management for investment advisory services under the Master Portfolio Advisory Agreement (the “Advisory Agreement Rate”). The Master Trust Board also reviewed and considered the contractual investment sub-advisory fee rate that is payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services (the “Sub-Advisory Agreement Rate”).
Among other information reviewed by the Funds Trust Board was a comparison of the Feeder Fund’s Management Rate, which, for this purpose, includes the advisory fees paid at the Master Portfolio level, with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Funds Trust Board noted that the Management Rates of the Feeder Fund were in range of the sum of these average rates for the Feeder Fund’s expense Groups for all share classes.
The Master Trust Board reviewed a comparison of the Advisory Agreement Rate of the Master Portfolio with those of other funds in the Master Portfolio’s expense Group at a common asset level. The Master Trust Board noted that the Advisory Agreement Rate of the Master Portfolio was in range of the median rate for the Master Portfolio’s expense Group.
The Master Trust Board also received and considered information about the portions of the total management fees that were retained by Allspring Funds Management after payment of the fees to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of these amounts, the Master Trust Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services. Given the affiliation between Allspring Funds Management and the Sub-Adviser, the Master Trust Board ascribed limited relevance to the allocation of fees between them.
The Boards also received and considered information about the nature and extent of services offered and fee rates charged by Allspring Funds Management and the Sub-Adviser to other types of clients with investment strategies similar to those of the Funds. In this regard, the Boards received information about the significantly greater scope of services, and compliance, reporting and other legal burdens and risks of managing proprietary mutual funds compared with those associated with managing assets of other types of clients, including third-party sub-advised fund clients and non-mutual fund clients such as institutional separate accounts.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Funds Trust Board determined that the compensation payable to Allspring Funds Management under the Feeder Fund Management Agreement was reasonable, and the Master Trust Board determined that the compensation payable to Allspring Funds Management under the Master Portfolio Advisory Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
Profitability
The Boards received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole. The Master Trust Board noted that the Sub-Adviser’s profitability information with respect to providing services to the Master Portfolio and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses and differences in how Allspring Global Investments calculates its pre-tax profit metric versus the methodology used when Allspring Funds Management was part of Wells Fargo. It was noted that the impact of such differences had only minor impact on the financial results presented. Among other things, the Boards noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Based on their review, the Boards did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Funds to be at a level that would prevent the Boards from approving the continuation of the Advisory Agreements.
Economies of Scale
The Boards received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Funds, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders of the Funds. The Boards noted the existence of breakpoints in the Master Portfolio’s advisory fee structure and the Feeder Fund’s management fee structure, which operate generally to reduce the Funds’ expense ratios as the Funds grow in size, and the size of the Master Portfolio and the Feeder Fund, respectively, in relation to such breakpoints. The Boards considered that, in addition to advisory fee and management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways,
44 | Allspring Emerging Growth Fund
Other information (unaudited)
including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
The Boards concluded that Allspring Funds Management’s arrangements with respect to each Fund, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Funds and their shareholders.
Other Benefits to Allspring Funds Management and the Sub-Adviser
The Boards received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, as a result of their relationships with the Funds. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Funds and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Funds. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it.
The Boards also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser and fees earned in the past by Allspring Funds Management and the Sub-Adviser from managing a private investment vehicle for the fund family’s securities lending collateral.
Based on their consideration of the factors and information they deemed relevant, including those described here, the Boards did not find that any ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, were unreasonable.
Conclusion
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Funds Trust Board unanimously determined that the compensation payable to Allspring Funds Management was reasonable, and approved the continuation of the Feeder Fund Management Agreement for a one-year term. Additionally, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Master Trust Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser was reasonable, and approved the continuation of the Master Portfolio Advisory Agreement and the Sub-Advisory Agreement, each for a one-year term.
Allspring Emerging Growth Fund | 45
Other information (unaudited)
Liquidity risk management program
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Allspring Funds Trust (“Funds Trust”) has adopted and implemented a liquidity risk management program (the “Program”) on behalf of each of its series (other than the series that operate as money market funds), including the Fund, and Allspring Master Trust (“Master Trust” and together with Funds Trust, the “Trusts”) has adopted and implemented the Program on behalf of each of its series, including the Portfolio, which is reasonably designed to assess and manage the Fund’s and the Portfolio’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund or Portfolio is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund or Portfolio. The Trusts’ Boards of Trustees (the “Boards”) previously approved the designation of Allspring Funds Management, LLC (“Allspring Funds Management”), the Fund’s investment manager and the Portfolio’s investment adviser, to administer the Program, and Allspring Funds Management has established a Liquidity Risk Management Council (the “Council”) composed of personnel from multiple departments within Allspring Funds Management and its affiliates to assist Allspring Funds Management in the administration of the Program.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s and the Portfolio’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s and the Portfolio’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent the Fund or the Portfolio does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s or Portfolio’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if the Fund or the Portfolio has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s or the Portfolio’s “highly liquid investments” below its HLIM; and (6) periodic reporting to the Boards.
At a meeting of the Boards held on May 16-17, 2023, the Boards received and reviewed a written report (the “Report”) from Allspring Funds Management that, among other things, addressed the operation of the Program and assessed its adequacy and effectiveness for the period from January 1, 2022 through December 31, 2022 (the “Reporting Period”). The Report noted significant liquidity events impacting the Funds and Portfolios related to extended foreign market holidays as well as the difficulty of trading and settlement of most Russia-related securities due to sanctions activity. The Report noted that there were no material changes to the Program during the Reporting Period.
Allspring Funds Management determined in the Report that the Program has been implemented and operates effectively to manage each Fund’s and Portfolio’s, including the Fund’s and the Portfolio’s, liquidity risk, and Allspring Funds Management continues to believe that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s and the Portfolio’s liquidity developments.
There can be no assurance that the Program will achieve its objectives under all circumstances in the future. With respect to the Fund, please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other risks to which an investment in the Fund may be subject.
46 | Allspring Emerging Growth 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.
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.
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Contents
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The views expressed and any forward-looking statements are as of May 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 Growth Balanced Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Growth Balanced Fund for the 12-month period that ended May 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. The market was focused on persistently high inflation 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. Markets received a boost in December with the removal of China’s strict COVID-19 lockdowns. In March 2023, a new wave of market anxiety resulted from several bank failures and unease over the possibility of more rate hikes. However, investors regained confidence and markets finished the period in relative calm.
For the 12-month period, stocks and bonds—both domestic U.S. and global—had mixed results. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 2.92%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 lost 1.41%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a return of -8.49%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -2.14%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 6.49%, the Bloomberg Municipal Bond Index6 gained 0.49%, and the ICE BofA U.S. High Yield Index7 returned -0.09%.
High inflation and central bank rate hikes rocked markets.
In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Federal Reserve (Fed) raised its short-term rate by 0.75% in June. Meanwhile, the U.S. unemployment rate remained historically low 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 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, 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.
�� In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring 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 the 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.
2 | Allspring Growth Balanced Fund
Letter to shareholders (unaudited)
August was yet another broadly challenging month for financial markets. 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 was the resilient U.S. jobs 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.
In September, all asset classes suffered further 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. 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 increasing 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 declining overall in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever, with generally flat 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 wound 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.
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 had 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 (ECB) both raised rates by 0.50%.
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 Growth Balanced Fund | 3
Letter to shareholders (unaudited)
“ 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 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 banking industry turmoil created an additional challenge for central banks in balancing inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. 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.
Economic data released in April pointed to global resilience, as Purchasing Managers Indexes1 in the U.S., U.K., and eurozone beat expectations, and China reported first-quarter annualized economic growth of 4.5%. Despite banking industry stress, developed market stocks had monthly gains. The U.S. labor market remained strong, with a 3.5% jobless rate and monthly payroll gains above 200,000. However, uncertainty and inflationary concerns weighed on investors in the U.S. and abroad.
May was marked by a divergence between expanding activity in services and an overall contraction in manufacturing activity in the U.S., U.K., and eurozone. Core inflation remained elevated in the U.S. and Europe, despite the ongoing efforts of the Fed and ECB, which included rate hikes of 0.25% by both in May. Stubborn inflation and the resilient U.S. labor market led to expectations of further interest rate hikes, overall monthly declines across bond indexes, and mixed results for stocks in May. Investor worries over a U.S. debt ceiling impasse were modest, and market confidence was buoyed by a deal in late May to avert a potential U.S. debt default.
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 Growth Balanced Fund
Letter to shareholders (unaudited)
Notice to Shareholders |
Beginning in July 2024, the Fund will be required by the Securities and Exchange Commission to send shareholders a paper copy of a new tailored shareholder report in place of the full shareholder report that you are now receiving. The tailored shareholder report will contain concise information about the Fund, including certain expense and performance information and fund statistics. If you wish to receive this new tailored shareholder report electronically, please follow the instructions on the back cover of this report. |
Other information that is currently included in the shareholder report, such as the Fund’s financial statements, will be available online and upon request, free of charge, in paper or electronic format. |
Allspring Growth Balanced Fund | 5
Performance highlights (unaudited)
Performance highlights
Investment objective | The Fund seeks total return, consisting of capital appreciation and current income. |
Manager | Allspring Funds Management, LLC |
Subadviser | Allspring Global Investments, LLC |
Portfolio managers | Kandarp R. Acharya, CFA, FRM, Petros N. Bocray, CFA, FRM, Travis L. Keshemberg, CFA, CIPM, FRM |
Average annual total returns (%) as of May 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 | Net2 | |
Class A (WFGBX) | 10-14-1998 | -7.18 | 3.31 | 5.65 | -1.52 | 4.53 | 6.28 | 1.23 | 1.12 |
Class C (WFGWX) | 10-1-1998 | -3.26 | 3.75 | 5.64 | -2.26 | 3.75 | 5.64 | 1.98 | 1.87 |
Administrator Class (NVGBX) | 11-11-1994 | – | – | – | -1.34 | 4.72 | 6.51 | 1.16 | 0.95 |
Growth Balanced Blended Index3 | – | – | – | – | 0.20 | 5.57 | 6.94 | – | – |
Bloomberg U.S. Aggregate Bond Index4 | – | – | – | – | -2.14 | 0.81 | 1.39 | – | – |
MSCI ACWI ex USA Index (Net)5 | – | – | – | – | -1.41 | 2.22 | 3.83 | – | – |
Russell 3000® Index6 | – | – | – | – | 2.03 | 10.07 | 11.45 | – | – |
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 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, which include the impact of 0.43% in acquired fund fees and expenses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report, which do not include acquired fund fees and expenses. |
2 | The manager has contractually committed through September 30, 2023 (September 30, 2024 for Class A and Class C), to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 1.12% for Class A, 1.87% for Class C and 0.95% for Administrator Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any) from funds in which the affiliated master portfolios and funds invest and from money market funds, and extraordinary expenses are excluded from the expense caps. All other acquired fund fees and expenses from the affiliated master portfolios and funds are included in 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 | Source: Allspring Funds Management, LLC. The Growth Balanced Blended Index is composed 45% of the Russell 3000® Index, 35% of the Bloomberg U.S. Aggregate Bond Index, and 20% of the MSCI ACWI ex USA Index (Net). Prior to November 30, 2017, the Growth Balanced Blended Index was composed 35% of the Bloomberg U.S. Aggregate Bond Index, 16.25% of the Russell 1000® Growth Index, 16.25% of the Russell 1000® Value Index, 16.25% of the S&P 500 Index, 9.75% of the MSCI EAFE Index (Net), and 6.50% of the Russell 2000® Index. 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 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. |
6 | The Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
6 | Allspring Growth Balanced Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of May 31, 20231 |
1 | The chart compares the performance of Class A shares for the most recent ten years with the Growth Balanced Blended Index, Bloomberg U.S. Aggregate Bond Index, MSCI ACWI ex USA Index (Net) and Russell 3000® 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%. |
Balanced funds may invest in stocks and bonds. Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). 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. This fund is exposed to foreign investment risk, mortgage- and asset-backed securities risk, and smaller-company securities risk. Consult the Fund’s prospectus for additional information on these and other risks.
Allspring Growth Balanced Fund | 7
Performance highlights (unaudited)
MANAGER’S DISCUSSION
Fund highlights
•The Fund underperformed the Growth Balanced Blended Index for the 12-month period that ended May 31, 2023.
•The Tactical Asset Allocation (TAA) overlay was the largest single detractor from relative performance over the period. Poor stock selection among several actively managed equity strategies also detracted.
•Strong relative performance within fixed income investments had the largest positive impact on performance.
Slow growth, rising rates lead to muted market returns.
The trailing 12-month period featured slowing economic growth, rising interest rates, persistently high inflation, and geopolitical uncertainty. The broad equity market posted a small gain despite volatile markets while bonds posted negative returns over the period.
The 12-month period that ended May 31, 2023, saw a small gain in broad U.S. equity markets, as illustrated by the Russell 3000® Index’s return of +2.03%. Broad foreign markets did worse, as reflected by the MSCI ACWI ex USA Index (Net)’s return of -1.41%. While these return numbers seem modest, they reflect a recovery from some severe double-digit declines. The broad U.S. fixed income market, as represented by the Bloomberg U.S. Aggregate Bond Index, posted a return of -2.14%.
Ten largest holdings (%) as of May 31, 20231 | |
Allspring Managed Fixed Income Portfolio | 21.77 |
Allspring Disciplined U.S. Core Fund Class R6 | 14.00 |
Allspring Large Company Value Portfolio | 11.45 |
Allspring Diversified Large Cap Growth Portfolio | 11.36 |
Allspring Disciplined International Developed Markets Portfolio | 8.54 |
Allspring Core Bond Portfolio | 6.77 |
iShares Core MSCI EAFE ETF | 3.90 |
Allspring Real Return Portfolio | 3.46 |
Allspring C&B Large Cap Value Portfolio | 3.43 |
Allspring Factor Enhanced International Equity Portfolio | 3.16 |
1 | Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
Investment-grade exposure reduced; small high yield bond position added.
The allocations among the portfolio’s core holdings remained stable over the period. However, in February, we reduced exposure to investment-grade fixed income and established a small position in high yield bonds. In contrast, the Fund’s TAA overlay was active throughout the year. The overlay had a distinctly defensive posturing at the start of the period, which became less defensive as both stock and bond markets recovered in the second half of the period.
The TAA overlay detracted from relative performance along with poor stock selection.
The TAA overlay was the largest detractor from relative performance, reducing performance by about 50 basis points (bps; 100 bps equal 1.00%)
over the entire period. Early on, the overlay was defensively postured but even some of the classic defensive trades detracted from performance. Since the beginning of 2023, we have selectively added risk. Our base case suggests a globally synchronized slowdown in economic activity with inflation more persistent than many local central banks may want it to be. We continue to prefer relative-value trades as opposed to directional trades amid much uncertainty.
Strong relative performance from all fixed income mandates added to performance.
While the broad fixed income markets, as reflected by the Bloomberg U.S. Aggregate Bond Index posted a return of -2.14%, in total our fixed income portfolio outperformed by about 40 bps. An overweight to credit within the investment-grade portfolio and exposure to growth-sensitive assets within the inflation-sensitive portfolio contributed.
Allocation (%) as of May 31, 2023 | ||
Neutral allocation | Effective allocation1 | |
Stock Funds | 65 | 65 |
Bond Funds | 35 | 38 |
Effective Cash | 0 | (3 ) |
1 | Effective allocation reflects the effect of the tactical futures overlay that may be in place. Effective cash, if any, represents the net offset to such future positions. Effective allocations are subject to change and may have changed since the date specified. |
Poor stock selection, particularly within U.S. large-cap growth, detracted from performance. The recovery from the market lows since the end of 2022 has been led by a small group of very large growth stocks; failing to hold the winners in weights equal to the index resulted in underperformance.
Looking ahead, we are still somewhat guarded.
While U.S. lending standards are tightening and the impact of higher rates is just starting to be felt within the banking sector, the contagion from bank failures in the U.S. has been limited so far. The Federal Reserve (Fed) is likely to be more data dependent from this point forward and the pattern of consistently hiking every quarter should end. However, with real yields on the rise and the U.S. dollar stabilizing, the combination of further Fed balance sheet shrinkage and tighter fiscal policy affected by the debt limit negotiations should put downward pressure on growth. The household sector balance sheet remains healthy and supported by a strong labor market. Negative real wages and fading government support are likely to lead to lower spending going forward.
8 | Allspring Growth Balanced Fund
Performance highlights (unaudited)
Our base case is that we have an early onset recession, with the first quarter of 2023 being the peak of economic activity. It is likely that the second quarter will show sequential weakness. Credit spreads remain wider, the yield curve remains inverted, and the housing recession continues. The market continues to expect meaningful rate cuts in the second half of this year. This is likely to put pressure on equity and bond valuations.
Allspring Growth Balanced Fund | 9
Fund expenses (unaudited)
Fund expenses
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 December 1, 2022 to May 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 the 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 12-1-2022 | Ending account value 5-31-2023 | Expenses paid during the period1, 2 | Annualized net expense ratio2 | |
Class A | ||||
Actual | $1,000.00 | $1,000.06 | $5.24 | 1.05 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,019.70 | $5.29 | 1.05 % |
Class C | ||||
Actual | $1,000.00 | $1,000.02 | $8.98 | 1.80 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,015.96 | $9.05 | 1.80 % |
Administrator Class | ||||
Actual | $1,000.00 | $1,000.07 | $4.34 | 0.87 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,020.59 | $4.38 | 0.87 % |
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).
2 Amounts reflect net expenses allocated from the affiliated Master Portfolios in which the Fund invests.
10 | Allspring Growth Balanced Fund
Portfolio of investments—May 31, 2023
Portfolio of investments
Shares | Value | |||||
Investment companies: 99.18% | ||||||
Affiliated master portfolios: 75.97% | ||||||
Allspring C&B Large Cap Value Portfolio | $6,229,478 | |||||
Allspring Core Bond Portfolio | 12,310,175 | |||||
Allspring Disciplined International Developed Markets Portfolio | 15,541,745 | |||||
Allspring Diversified Large Cap Growth Portfolio | 20,665,570 | |||||
Allspring Emerging Growth Portfolio | 1,960,435 | |||||
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 2,387,753 | |||||
Allspring Factor Enhanced International Equity Portfolio | 5,750,133 | |||||
Allspring Large Company Value Portfolio | 20,820,051 | |||||
Allspring Managed Fixed Income Portfolio | 39,612,232 | |||||
Allspring Real Return Portfolio | 6,300,507 | |||||
Allspring Small Company Growth Portfolio | 2,006,909 | |||||
Allspring Small Company Value Portfolio | 4,627,355 | |||||
138,212,343 | ||||||
Exchange-traded funds: 6.62% | ||||||
iShares Core MSCI EAFE ETF | 107,476 | 7,096,640 | ||||
iShares iBoxx High Yield Corporate Bond ETF | 66,714 | 4,944,175 | ||||
12,040,815 | ||||||
Stock funds: 16.59% | ||||||
Allspring Disciplined U.S. Core Fund Class R6♠ | 1,355,876 | 25,463,359 | ||||
Allspring Emerging Markets Equity Fund Class R6♠ | 99,104 | 2,365,598 | ||||
Allspring Emerging Markets Equity Income Fund Class R6♠ | 233,607 | 2,354,761 | ||||
30,183,718 | ||||||
Total investment companies (Cost $168,461,966) | 180,436,876 | |||||
Total investments in securities (Cost $168,461,966) | 99.18 % | 180,436,876 | ||||
Other assets and liabilities, net | 0.82 | 1,500,658 | ||||
Total net assets | 100.00 % | $181,937,534 | ||||
♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
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 adviser or 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) on affiliated Underlying Funds | Net change in unrealized gains (losses) on affiliated Underlying Funds | Value, end of period | |
Investment companies | ||||||
Allspring Disciplined U.S. Core Fund Class R6 | $27,300,335 | $3,803,915 | $(2,917,197 ) | $(129,234 ) | $(2,594,460 ) | $25,463,359 |
Allspring Emerging Markets Equity Fund Class R6 | 2,608,804 | 178,518 | (255,624 ) | (76,081 ) | (90,019 ) | 2,365,598 |
Allspring Emerging Markets Equity Income Fund Class R6 | 2,716,244 | 176,544 | (220,914 ) | (13,532 ) | (303,581 ) | 2,354,761 |
$(218,847 ) | $(2,988,060 ) | $30,183,718 |
The accompanying notes are an integral part of these financial statements.
Allspring Growth Balanced Fund | 11
Portfolio of investments—May 31, 2023
Shares, end of period | Dividends from affiliated Underlying Funds | Net realized gains on capital gain distributions from affiliated Underlying Funds | |
Investment companies | |||
Allspring Disciplined U.S. Core Fund Class R6 | 1,355,876 | $353,327 | $2,833,053 |
Allspring Emerging Markets Equity Fund Class R6 | 99,104 | 31,969 | 0 |
Allspring Emerging Markets Equity Income Fund Class R6 | 233,607 | 76,712 | 0 |
$462,008 | $2,833,053 |
Transactions with the affiliated Master Portfolios were as follows:
% of ownership, beginning of period | % of ownership, end of period | Net realized gains (losses) on investments allocated from affiliated Master Portfolios | Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolios | Interest allocated from affiliated Master Portfolios | Dividends allocated from affiliated Master Portfolios | Affiliated Income Allocated from affiliated Master Portfolios | Value, end of period | |
Allspring C&B Large Cap Value Portfolio | 2.15 % | 2.46 % | $589,077 | $(1,000,236 ) | $155 | $144,990 | $4,273 | $6,229,478 |
Allspring Core Bond Portfolio | 0.28 | 0.26 | (865,869 ) | 124,673 | 423,950 | 0 | 10,506 | 12,310,175 |
Allspring Disciplined International Developed Markets Portfolio | 11.21 | 12.11 | (474,273 ) | 440,997 | 371 | 510,356 | 10,316 | 15,541,745 |
Allspring Diversified Large Cap Growth Portfolio | 11.13 | 11.89 | 1,662,916 | (761,985 ) | 500 | 211,948 | 8,803 | 20,665,570 |
Allspring Emerging Growth Portfolio | 0.54 | 0.60 | 147,354 | (157,655 ) | 47 | 4,712 | 1,906 | 1,960,435 |
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 2.00 | 2.30 | (293,904 ) | 17,787 | 59 | 92,883 | 2,974 | 2,387,753 |
Allspring Factor Enhanced International Equity Portfolio | 1.23 | 1.37 | (467,889 ) | 324,176 | 136 | 188,853 | 5,442 | 5,750,133 |
Allspring Large Company Value Portfolio | 10.96 | 11.77 | (911,082 ) | (1,205,342 ) | 575 | 502,491 | 17,063 | 20,820,051 |
Allspring Managed Fixed Income Portfolio | 10.40 | 11.07 | (634,861 ) | (1,663,005 ) | 1,482,900 | 0 | 15,610 | 39,612,232 |
Allspring Real Return Portfolio | 2.98 | 2.98 | 48,184 | (579,994 ) | 291,760 | 22,565 | 2,266 | 6,300,507 |
Allspring Small Company Growth Portfolio | 0.27 | 0.28 | 70,548 | (57,755 ) | 49 | 8,509 | 2,011 | 2,006,909 |
Allspring Small Company Value Portfolio | 0.94 | 0.92 | (43,148 ) | (550,560 ) | 111 | 91,554 | 4,767 | 4,627,355 |
$(1,172,947 ) | $(5,068,899 ) | $2,200,613 | $1,778,861 | $85,937 | $138,212,343 |
Futures contracts
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Long | ||||||
10-Year Euro BUND Index | 34 | 6-8-2023 | $4,877,797 | $4,944,412 | $66,615 | $0 |
TOPIX | 31 | 6-8-2023 | 4,605,596 | 4,730,379 | 124,783 | 0 |
E-Mini NASDAQ 100 Index | 25 | 6-16-2023 | 6,147,715 | 7,150,250 | 1,002,535 | 0 |
E-Mini Russell 1000 Growth Index | 31 | 6-16-2023 | 3,852,677 | 4,032,325 | 179,648 | 0 |
Japanese Yen Futures | 77 | 6-16-2023 | 7,220,846 | 6,930,000 | 0 | (290,846 ) |
10-Year U.S. Treasury Notes | 84 | 9-20-2023 | 9,592,563 | 9,615,375 | 22,812 | 0 |
The accompanying notes are an integral part of these financial statements.
12 | Allspring Growth Balanced Fund
Portfolio of investments—May 31, 2023
Futures contracts (continued)
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Short | ||||||
2-Year Euro SCHATZ | (188 ) | 6-8-2023 | $(21,157,532 ) | $(21,224,682 ) | $0 | $(67,150 ) |
E-Mini Russell 1000 Value Index | (50 ) | 6-16-2023 | (3,827,710 ) | (3,658,500 ) | 169,210 | 0 |
E-Mini S&P 500 Index | (31 ) | 6-16-2023 | (6,086,129 ) | (6,495,275 ) | 0 | (409,146 ) |
Euro STOXX 50 Index | (98 ) | 6-16-2023 | (4,531,481 ) | (4,417,401 ) | 114,080 | 0 |
$1,679,683 | $(767,142 ) |
The accompanying notes are an integral part of these financial statements.
Allspring Growth Balanced Fund | 13
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in affiliated Master Portfolio, at value (cost $127,801,089) | $138,212,343 |
Investments in unaffiliated securities, at value (cost $12,927,793) | 12,040,815 |
Investments in affiliated Underlying Funds, at value (cost $27,733,084) | 30,183,718 |
Cash | 181,617 |
Cash at broker segregated for futures contracts | 1,595,894 |
Receivable for daily variation margin on open futures contracts | 238,080 |
Receivable for Fund shares sold | 41,591 |
Prepaid expenses and other assets | 42,380 |
Total assets | 182,536,438 |
Liabilities | |
Payable for Fund shares redeemed | 297,326 |
Payable for daily variation margin on open futures contracts | 180,869 |
Shareholder servicing fees payable | 38,960 |
Administration fees payable | 24,947 |
Management fee payable | 12,824 |
Distribution fee payable | 2,686 |
Trustees’ fees and expenses payable | 504 |
Accrued expenses and other liabilities | 40,788 |
Total liabilities | 598,904 |
Total net assets | $181,937,534 |
Net assets consist of | |
Paid-in capital | $173,798,155 |
Total distributable earnings | 8,139,379 |
Total net assets | $181,937,534 |
Computation of net asset value and offering price per share | |
Net assets–Class A | $63,023,323 |
Shares outstanding–Class A1 | 1,455,529 |
Net asset value per share–Class A | $43.30 |
Maximum offering price per share – Class A2 | $45.94 |
Net assets–Class C | $4,182,676 |
Shares outstanding–Class C1 | 117,301 |
Net asset value per share–Class C | $35.66 |
Net assets–Administrator Class | $114,731,535 |
Shares outstanding–Administrator Class1 | 3,120,293 |
Net asset value per share–Administrator Class | $36.77 |
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 Growth Balanced Fund
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Interest allocated from affiliated Master Portfolios | $2,200,613 |
Dividends allocated from affiliated Master Portfolios (net of foreign withholding taxes of $109,349) | 1,778,861 |
Dividends from affiliated Underlying Funds | 462,008 |
Dividends from unaffiliated securities | 377,282 |
Affiliated income allocated from affiliated Master Portfolios | 85,937 |
Interest | 24,352 |
Expenses allocated from affiliated Master Portfolios | (731,411 ) |
Waivers allocated from affiliated Master Portfolios | 83,880 |
Total investment income | 4,281,522 |
Expenses | |
Management fee | 561,134 |
Administration fees | |
Class A | 138,258 |
Class C | 9,973 |
Administrator Class | 151,396 |
Shareholder servicing fees | |
Class A | 164,584 |
Class C | 11,824 |
Administrator Class | 289,750 |
Distribution fee | |
Class C | 35,471 |
Custody and accounting fees | 13,630 |
Professional fees | 41,016 |
Registration fees | 49,074 |
Shareholder report expenses | 14,316 |
Trustees’ fees and expenses | 21,911 |
Other fees and expenses | 5,313 |
Total expenses | 1,507,650 |
Less: Fee waivers and/or expense reimbursements | |
Fund-level | (243,230 ) |
Class A | (4,428 ) |
Administrator Class | (126,287 ) |
Net expenses | 1,133,705 |
Net investment income | 3,147,817 |
Realized and unrealized gains (losses) on investments | |
Net realized gains (losses) on | |
Investments allocated from affiliated Master Portfolios | (1,172,947 ) |
Affiliated Underlying Funds | (218,847 ) |
Unaffiliated securities | (1,153,011 ) |
Foreign currency and foreign currency translations | (4,834 ) |
Futures contracts | (1,341,030 ) |
Capital gain distributions from affiliated Underlying Funds | 2,833,053 |
Net realized losses on investments | (1,057,616 ) |
The accompanying notes are an integral part of these financial statements.
Allspring Growth Balanced Fund | 15
Statement of operations—year ended May 31, 2023
Net change in unrealized gains (losses) on | |
Investments allocated from affiliated Master Portfolios | $(5,068,899 ) |
Affiliated Underlying Funds | (2,988,060 ) |
Unaffiliated securities | 1,903,512 |
Futures contracts | 881,074 |
Net change in unrealized gains (losses) on investments | (5,272,373 ) |
Net realized and unrealized gains (losses) on investments | (6,329,989 ) |
Net decrease in net assets resulting from operations | $(3,182,172 ) |
The accompanying notes are an integral part of these financial statements.
16 | Allspring Growth Balanced Fund
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $3,147,817 | $2,828,206 | ||
Net realized gains (losses) on investments | (1,057,616 ) | 10,787,930 | ||
Net change in unrealized gains (losses) on investments | (5,272,373 ) | (29,404,828 ) | ||
Net decrease in net assets resulting from operations | (3,182,172 ) | (15,788,692 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class A | (2,238,971 ) | (10,097,006 ) | ||
Class C | (167,153 ) | (1,172,850 ) | ||
Administrator Class | (5,153,565 ) | (20,615,474 ) | ||
Tax basis return of capital | ||||
Class A | (574,402 ) | 0 | ||
Class C | (41,435 ) | 0 | ||
Administrator Class | (1,016,059 ) | 0 | ||
Total distributions to shareholders | (9,191,585 ) | (31,885,330 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class A | 46,479 | 2,019,440 | 87,465 | 4,683,432 |
Class C | 6,286 | 223,738 | 12,808 | 560,338 |
Administrator Class | 124,823 | 4,624,730 | 133,987 | 6,154,188 |
6,867,908 | 11,397,958 | |||
Reinvestment of distributions | ||||
Class A | 65,342 | 2,767,810 | 192,468 | 9,901,778 |
Class C | 5,939 | 208,588 | 27,531 | 1,172,634 |
Administrator Class | 170,907 | 6,151,007 | 464,785 | 20,538,888 |
9,127,405 | 31,613,300 | |||
Payment for shares redeemed | ||||
Class A | (208,672 ) | (9,031,494 ) | (201,168 ) | (10,553,283 ) |
Class C | (52,269 ) | (1,900,944 ) | (82,846 ) | (3,614,242 ) |
Administrator Class | (322,117 ) | (11,894,570 ) | (413,340 ) | (18,657,031 ) |
(22,827,008 ) | (32,824,556 ) | |||
Net increase (decrease) in net assets resulting from capital share transactions | (6,831,695 ) | 10,186,702 | ||
Total decrease in net assets | (19,205,452 ) | (37,487,320 ) | ||
Net assets | ||||
Beginning of period | 201,142,986 | 238,630,306 | ||
End of period | $181,937,534 | $201,142,986 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Growth Balanced Fund | 17
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $45.95 | $56.39 | $46.33 | $45.15 | $47.12 |
Net investment income | 0.69 1 | 0.61 | 0.61 1 | 0.65 1 | 0.72 1 |
Net realized and unrealized gains (losses) on investments | (1.45 ) | (4.08 ) | 12.62 | 1.80 | (0.60 ) |
Total from investment operations | (0.76 ) | (3.47 ) | 13.23 | 2.45 | 0.12 |
Distributions to shareholders from | |||||
Net investment income | (0.86 ) | (0.53 ) | (0.50 ) | (0.47 ) | (1.26 ) |
Net realized gains | (0.69 ) | (6.44 ) | (2.67 ) | (0.80 ) | (0.83 ) |
Tax basis return of capital | (0.34 ) | 0.00 | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (1.89 ) | (6.97 ) | (3.17 ) | (1.27 ) | (2.09 ) |
Net asset value, end of period | $43.30 | $45.95 | $56.39 | $46.33 | $45.15 |
Total return2 | (1.52 )% | (7.41 )% | 29.31 % | 5.31 % | 0.53 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.18 % | 1.15 % | 1.22 % | 1.32 % | 1.33 % |
Net expenses | 1.05 % | 1.04 % | 1.05 % | 1.04 % | 1.07 % |
Net investment income | 1.59 % | 1.14 % | 1.18 % | 1.40 % | 1.55 % |
Supplemental data | |||||
Portfolio turnover rate3 | 108 % | 113 % | 140 % | 116 % | 149 % |
Net assets, end of period (000s omitted) | $63,023 | $71,327 | $83,102 | $68,581 | $68,832 |
* | Ratios include only the net expenses allocated from the affiliated Master Portfolios and do not include expenses from any other affiliated Underlying Funds. Net expenses allocated from the affiliated Master Portfolios included in the ratios were as follows: |
Year ended May 31, 2023 | 0.35% |
Year ended May 31, 2022 | 0.34% |
Year ended May 31, 2021 | 0.38% |
Year ended May 31, 2020 | 0.45% |
Year ended May 31, 2019 | 0.47% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the affiliated Underlying Funds and unaffiliated securities and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
18 | Allspring Growth Balanced Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $38.14 | $47.98 | $39.81 | $38.95 | $40.86 |
Net investment income | 0.30 1 | 0.17 1 | 0.19 1 | 0.26 1 | 0.37 1 |
Net realized and unrealized gains (losses) on investments | (1.20 ) | (3.37 ) | 10.80 | 1.54 | (0.56 ) |
Total from investment operations | (0.90 ) | (3.20 ) | 10.99 | 1.80 | (0.19 ) |
Distributions to shareholders from | |||||
Net investment income | (0.55 ) | (0.20 ) | (0.15 ) | (0.14 ) | (0.89 ) |
Net realized gains | (0.69 ) | (6.44 ) | (2.67 ) | (0.80 ) | (0.83 ) |
Tax basis return of capital | (0.34 ) | 0.00 | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (1.58 ) | (6.64 ) | (2.82 ) | (0.94 ) | (1.72 ) |
Net asset value, end of period | $35.66 | $38.14 | $47.98 | $39.81 | $38.95 |
Total return2 | (2.26 )% | (8.09 )% | 28.35 % | 4.52 % | (0.23 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.93 % | 1.89 % | 1.97 % | 2.07 % | 2.08 % |
Net expenses | 1.80 % | 1.78 % | 1.80 % | 1.79 % | 1.82 % |
Net investment income | 0.83 % | 0.38 % | 0.43 % | 0.64 % | 0.93 % |
Supplemental data | |||||
Portfolio turnover rate3 | 108 % | 113 % | 140 % | 116 % | 149 % |
Net assets, end of period (000s omitted) | $4,183 | $6,001 | $9,588 | $10,108 | $11,434 |
* | Ratios include only the net expenses allocated from the affiliated Master Portfolios and do not include expenses from any other affiliated Underlying Funds. Net expenses allocated from the affiliated Master Portfolios included in the ratios were as follows: |
Year ended May 31, 2023 | 0.35% |
Year ended May 31, 2022 | 0.34% |
Year ended May 31, 2021 | 0.38% |
Year ended May 31, 2020 | 0.45% |
Year ended May 31, 2019 | 0.48% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the affiliated Underlying Funds and unaffiliated securities and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
Allspring Growth Balanced Fund | 19
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $39.35 | $49.28 | $40.83 | $39.93 | $42.04 |
Net investment income | 0.66 1 | 0.61 1 | 0.68 | 0.84 | 1.05 |
Net realized and unrealized gains (losses) on investments | (1.26 ) | (3.46 ) | 11.03 | 1.41 | (0.90 ) |
Total from investment operations | (0.60 ) | (2.85 ) | 11.71 | 2.25 | 0.15 |
Distributions to shareholders from | |||||
Net investment income | (0.95 ) | (0.64 ) | (0.59 ) | (0.55 ) | (1.43 ) |
Net realized gains | (0.69 ) | (6.44 ) | (2.67 ) | (0.80 ) | (0.83 ) |
Tax basis return of capital | (0.34 ) | 0.00 | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (1.98 ) | (7.08 ) | (3.26 ) | (1.35 ) | (2.26 ) |
Net asset value, end of period | $36.77 | $39.35 | $49.28 | $40.83 | $39.93 |
Total return | (1.34 )% | (7.25 )% | 29.56 % | 5.51 % | 0.70 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.10 % | 1.07 % | 1.14 % | 1.24 % | 1.25 % |
Net expenses | 0.86 % | 0.86 % | 0.86 % | 0.86 % | 0.89 % |
Net investment income | 1.77 % | 1.33 % | 1.37 % | 1.57 % | 1.72 % |
Supplemental data | |||||
Portfolio turnover rate2 | 108 % | 113 % | 140 % | 116 % | 149 % |
Net assets, end of period (000s omitted) | $114,732 | $123,815 | $145,940 | $129,531 | $138,788 |
* | Ratios include only the net expenses allocated from the affiliated Master Portfolios and do not include expenses from any other affiliated Underlying Funds. Net expenses allocated from the affiliated Master Portfolios included in the ratios were as follows: |
Year ended May 31, 2023 | 0.35% |
Year ended May 31, 2022 | 0.34% |
Year ended May 31, 2021 | 0.38% |
Year ended May 31, 2020 | 0.45% |
Year ended May 31, 2019 | 0.47% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the affiliated Underlying Funds and unaffiliated securities and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
20 | Allspring Growth Balanced Fund
Notes to financial statements
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 Growth Balanced Fund (the “Fund”) which is a diversified series of the Trust.
The Fund is a fund-of-funds that invests in various affiliated mutual funds (“Underlying Funds”) employing a multi-asset, multi-style investment approach designed to reduce the price and return volatility of the Fund and to provide more consistent returns. The Fund may also invest directly in securities. The Underlying Funds incur separate expenses in seeking to achieve their investment objectives. Investments in affiliated Underlying Funds may also include investments in one or more separate diversified portfolios (collectively, the “affiliated Master Portfolios”) of Allspring Master Trust, a registered open-end management investment company. Each affiliated Master Portfolio directly acquires portfolio securities and the Fund acquires an indirect interest in those securities. The Fund accounts for its investments in the affiliated Master Portfolios as partnership investments and records on a daily basis its share of the affiliated Master Portfolio’s income, expense and realized and unrealized gains and losses. The financial statements of the affiliated Master Portfolios are presented in separate financial statements and may be obtained free of charge by contacting Investor Services or by visiting the SEC website at sec.gov. The financial statements of the affiliated Master Portfolios are filed with the SEC under Allspring Master Trust. The financial statements for all other affiliated Underlying Funds are also publicly available on the SEC website at sec.gov.
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.
Investments in the affiliated Master Portfolios are valued daily based on the Fund’s proportionate share of each affiliated Master Portfolio’s net assets, which are also valued daily.
Equity securities, exchange-traded funds 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 underlying mutual funds (other than those listed on a foreign or domestic exchange or market) are valued at net asset per share as reported by the Underlying Funds as of the close of the regular trading on the New York Stock Exchange on each day the exchange is open for trading.
Investments which are not valued using any of 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.
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.
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 and on a specified date. The Fund may buy and sell futures contracts in order to gain exposure to, or protect against, changes in
Allspring Growth Balanced Fund | 21
Notes to financial statements
interest rates, security values and foreign exchange rates and is subject to interest rate risk, equity price risk and foreign currency 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 received 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.
Investment transactions, income and expenses
Investments in the affiliated Master Portfolios are recorded on a trade date basis. The Fund records daily its proportionate share of the affiliated Master Portfolio’s income, expenses and realized and unrealized gains or losses. The Fund also accrues its own expenses.
Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.
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 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 May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $169,718,854 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $14,007,086 |
Gross unrealized losses | (2,376,523 ) |
Net unrealized gains | $11,630,563 |
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. At May 31, 2023, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statements of Assets and Liabilities:
Paid-in capital | Total distributable earnings |
$(295 ) | $295 |
As of May 31, 2023, the Fund had capital loss carryforwards which consist of $3,491,184 in short-term capital losses.
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.
22 | Allspring Growth Balanced Fund
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 May 31, 2023:
Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
Assets | ||||
Investments in: | ||||
Investment companies | $42,224,533 | $0 | $0 | $42,224,533 |
Investments measured at net asset value* | 138,212,343 | |||
42,224,533 | 0 | 0 | 180,436,876 | |
Futures contracts | 1,679,683 | 0 | 0 | 1,679,683 |
Total assets | $43,904,216 | $0 | $0 | $182,116,559 |
Liabilities | ||||
Futures contracts | $767,142 | $0 | $0 | $767,142 |
Total liabilities | $767,142 | $0 | $0 | $767,142 |
* | Investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been categorized in the fair value hierarchy. The fair value amount presented in the table is intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Statement of Assets and Liabilities. The Fund’s investments in the affiliated Master Portfolios are valued at $138,212,343. Each affiliated Master Portfolio does not have a redemption period notice, can be redeemed daily and does not have any unfunded commitments. |
Futures contracts are reported at their cumulative unrealized gains (losses) at measurement date as reported in the tables 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.
For the year ended May 31, 2023, the Fund did not have any transfers into/out of Level 3.
The investment objective of each affiliated Master Portfolio is as follows:
Affiliated Master Portfolio | Investment objective |
Allspring C&B Large Cap Value Portfolio | Seeks maximum long-term total return (current income and capital appreciation), consistent with minimizing risk to principal |
Allspring Core Bond Portfolio | Seeks total return, consisting of income and capital appreciation |
Allspring Disciplined International Developed Markets Portfolio | Seeks long-term capital appreciation |
Allspring Diversified Large Cap Growth Portfolio | Seeks long-term capital appreciation |
Allspring Emerging Growth Portfolio | Seeks long-term capital appreciation |
Allspring Factor Enhanced Emerging Markets Equity Portfolio | Seeks long-term capital appreciation |
Allspring Factor Enhanced International Equity Portfolio | Seeks long-term capital appreciation |
Allspring Large Company Value Portfolio | Seeks long-term capital appreciation |
Allspring Managed Fixed Income Portfolio | Seeks consistent fixed-income return |
Allspring Real Return Portfolio | Seeks returns that exceed the rate of inflation over the long-term |
Allspring Small Company Growth Portfolio | Seeks long-term capital appreciation |
Allspring Small Company Value Portfolio | Seeks long-term capital appreciation |
Allspring Growth Balanced Fund | 23
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 | Advisory fee |
First $500 million | 0.300 % |
Next $500 million | 0.280 |
Next $2 billion | 0.260 |
Next $2 billion | 0.240 |
Next $5 billion | 0.230 |
Over $10 billion | 0.220 |
For the year ended May 31, 2023, the advisory fee was equivalent to an annual rate of 0.30% 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 0.10% and declining to 0.05% as the average daily net assets of the Fund increase.
Allspring Funds Management also serves as the adviser to each affiliated Master Portfolio and is entitled to receive a fee from each affiliated Master Portfolio for those services.
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 |
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. Net expenses from the affiliated Master Portfolios are included in the expense caps. Allspring Funds Management has contractually committed through September 30, 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 May 31, 2023, the contractual expense caps are as follows:
EXPENSE RATIO CAPS | |
Class A | 1.13 % |
Class C | 1.88 |
Administrator Class | 0.95 |
24 | Allspring Growth Balanced Fund
Notes to financial statements
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 May 31, 2023, Allspring Funds Distributor received $1,985 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 May 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.
5.
INVESTMENT PORTFOLIO TRANSACTIONS
The Fund seeks to achieve its investment objective by investing in various affiliated Master Portfolios. Purchases and sales related to these investments have been calculated by aggregating the results of multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio at the end of the period by the corresponding affiliated Master Portfolio’s purchases and sales. Purchase and sales in affiliated Underlying Funds and unaffiliated securities in which the Fund invests are actual purchases and sales of those investments. Purchases and sales of investments, excluding short-term securities, for the year ended May 31, 2023 were as follows:
Purchases at cost | Sales proceeds | ||
U.S. government | Non-U.S. government | U.S. government | Non-U.S. government |
$37,065,707 | $161,678,666 | $37,666,821 | $175,894,292 |
6.
DERIVATIVE TRANSACTIONS
During the year ended May 31, 2023, the Fund entered into futures contracts to gain market exposure to certain asset classes consistent with its asset allocation strategy. The Fund had an average notional amount of $33,903,649 in long futures contracts and $27,383,743 in short futures contracts during the year ended May 31, 2023.
A summary of the location of derivative instruments on the financial statements by primary risk exposure is outlined in the following tables.
The fair value of derivative instruments as of May 31, 2023 by primary risk type on the Statement of Assets and Liabilities was as follows for the Fund:
Interest rate risk | Equity risk | Foreign currency risk | Total | |
Asset derivatives | ||||
Futures contracts | $89,427 * | $1,590,256 * | $0 * | $1,679,683 |
Liability derivatives | ||||
Futures contracts | $67,150 * | $409,146 * | $290,846 * | $767,142 |
* | Amount represents the cumulative unrealized gains (losses) as reported in the table following the Portfolio of Investments. For futures contracts, only the current day’s variation margin as of May 31, 2023 is reported separately on the Statement of Assets and Liabilities. |
The effect of derivative instruments on the Statement of Operations for the year ended May 31, 2023 was as follows:
Interest rate risk | Equity risk | Foreign currency risk | Total | |
Net realized gains (losses) on derivatives | ||||
Futures contracts | $(31,112 ) | $(507,573 ) | $(802,345 ) | $(1,341,030 ) |
Net change in unrealized gains (losses) on derivatives | ||||
Futures contracts | $16,463 | $1,206,207 | $(341,596 ) | $881,074 |
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
Allspring Growth Balanced Fund | 25
Notes to financial statements
requests. Interest under the credit agreement is charged to the Fund based on 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 May 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 May 31, 2023 and May 31, 2022 were as follows:
Year ended May 31 | ||
2023 | 2022 | |
Ordinary income | $4,320,678 | $18,667,572 |
Long-term capital gain | 3,239,011 | 13,217,758 |
Tax basis return of capital | 1,631,896 | 0 |
As of May 31, 2023, the components of distributable earnings on a tax basis were as follows:
Unrealized gains | Capital loss carryforward |
$11,630,563 | $(3,491,184 ) |
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.
26 | Allspring Growth Balanced 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 Growth Balanced Fund (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of May 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 May 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 May 31, 2023, by correspondence with the custodian, transfer agents and brokers. 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
July 27, 2023
Allspring Growth Balanced Fund | 27
Other information (unaudited)
Other information
Tax information
For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 31% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended May 31, 2023.
Pursuant to Section 852 of the Internal Revenue Code, $3,239,011 was designated as a 20% rate gain distribution for the fiscal year ended May 31, 2023.
Pursuant to Section 854 of the Internal Revenue Code, $2,469,088 of income dividends paid during the fiscal year ended May 31, 2023 has been designated as qualified dividend income (QDI).
For the fiscal year ended May 31, 2023, $1,814,584 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 May 31, 2023, 9% of the ordinary income distributed was derived from interest on U.S. government securities.
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.
28 | Allspring Growth Balanced 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 128 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 |
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 |
1
The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by call 1-800-222-8222 or by visiting the website at allspringglobal.com.
Allspring Growth Balanced Fund | 29
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 |
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. |
30 | Allspring Growth Balanced Fund
Other information (unaudited)
Officers1
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 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 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 Growth Balanced Fund | 31
Other information (unaudited)
Board consideration of investment management and sub-advisory agreements:
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (the “Board”) of Allspring Funds Trust (the “Trust”) must determine annually whether to approve the continuation of the Trust’s investment management and sub-advisory agreements. In this regard, at a Board meeting held on May 15-17, 2023 (the “Meeting”), the Board, all the members of which have no direct or indirect interest in the investment management and sub-advisory agreements and are not “interested persons” of the Trust, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for the Allspring Growth Balanced Fund (the “Fund”): (i) an investment management agreement (the “Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Allspring Global Investments, LLC (the “Sub-Adviser”), an affiliate of Allspring Funds Management. The Management Agreement and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
At the Meeting, the Board considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at a Board meeting held in April 2023, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Board has adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Board in the discharge of its duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
The Board noted that it initially approved the Advisory Agreements at a Board meeting held in May 2021, each for a two-year term, in advance of the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC,1 a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. (the “Transaction”). The Trustees also noted that, while they did not specifically consider the continuation of the Advisory Agreements in 2022 as a result of the two-year term that was approved in 2021, the Trustees received and considered certain information at a Board meeting held in April 2022 that was applicable to the Advisory Agreements, including an overview and financial review of the Allspring Global Investments business, information regarding certain ancillary agreements that were approved by the Board at the April 2022 Board meeting, and comparative data regarding Fund fees and expenses.
In providing information to the Board, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Board’s annual contract renewal process earlier in 2023. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Board considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Board reviewed reports of Allspring Funds Management at each of its quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Board and the teams mentioned above confer with portfolio managers at various times throughout the year. The Board did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term. The Board considered the approval of the Advisory Agreements for the Fund as part of its consideration of agreements for funds across the complex, but its approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Board in support of its approvals.
Nature, Extent, and Quality of Services
The Board received and considered various information regarding the nature, extent, and quality of services provided to the Fund by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business. The Board also considered information about retention arrangements with respect to key personnel of Allspring Global Investments that were put in place in connection with the Transaction. The Board took into account information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the Transaction under a transition services agreement and the anticipated timeline for exiting the transition services agreement. In addition, the Board received and considered information about the full range of services provided to the Fund by Allspring Funds Management and its affiliates.
1
The trade name for the asset management firm that includes Allspring Funds Management and the Sub-Adviser is “Allspring Global Investments.”
32 | Allspring Growth Balanced Fund
Other information (unaudited)
The Board considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Fund. The Board evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
The Board further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Board received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, and Allspring Funds Management’s role as administrator of the Fund’s liquidity risk management program, and the Fund’s derivatives risk management program. The Board also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund Investment Performance and Expenses
The Board considered the investment performance results for the Fund over various time periods ended December 31, 2022. The Board considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to the Fund (the “Universe”), and in comparison to the Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the mutual funds in the performance Universe. The Board noted that the investment performance of the Fund (Administrator Class) was lower than the average investment performance of the Universe for all periods under review except the ten-year period, which was higher than the average investment performance of the Universe. The Board also noted that the investment performance of the Fund was higher than the investment performance of its benchmark index, the Growth Balanced Blended Index, for the one-and three-year periods under review, in range of its benchmark index for the ten-year period under review and lower than the investment performance of its benchmark index for the five-year period under review. The Board received information concerning, and discussed factors contributing to, the underperformance of the Fund relative to the Universe for the periods identified above. The Board took note of the explanations for the relative underperformance during these periods, and took note of the fact that Allspring Funds Management will continue to monitor the Fund’s performance.
The Board also received and considered information regarding the Fund’s net operating expense ratios and their various components, including actual management fees, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Board considered these ratios in comparison to the median ratios of funds in class-specific expense groups that were determined by Broadridge to be similar to the Fund (the “Groups”). The Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Groups and an explanation of how funds comprising expense groups and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Board noted that the net operating expense ratios of the Fund were in range of the median net operating expense ratios of the expense Groups for the Class A shares and lower than the median net operating expense ratios of the expense Groups for the Administrator Class. The Board noted that Allspring Funds Management had agreed to reduce the net operating expense caps for the Fund’s Class A shares.
The Board took into account the Fund’s investment performance and expense information provided to it among the factors considered in deciding to re-approve the Advisory Agreements.
Investment Management and Sub-Advisory Fee Rates
The Board reviewed and considered the contractual fee rates payable by the Fund to Allspring Funds Management under the Management Agreement, as well as the contractual fee rates payable by the Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which include, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rates”). The Board also reviewed and considered the contractual investment sub-advisory fee rates that are payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services. It was noted that advisory fee waivers, if any, are at the fund level and not class level.
Among other information reviewed by the Board was a comparison of the Fund’s Management Rates with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Board noted that the Management Rates of the Fund were higher than the sum of these average rates for the Fund’s expense Groups for all share classes.
The Board also received and considered information about the portion of the total management fee that was retained by Allspring Funds Management after payment of the fee to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of this amount, the Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services. Given the affiliation between Allspring Funds Management and the Sub-Adviser, the Board ascribed limited relevance to the allocation of fees between them.
The Board also received and considered information about the nature and extent of services offered and fee rates charged by Allspring Funds Management and the Sub-Adviser to other types of clients with investment strategies similar to those of the Fund. In this regard, the Board received
Allspring Growth Balanced Fund | 33
Other information (unaudited)
information about the significantly greater scope of services, and compliance, reporting and other legal burdens and risks of managing proprietary mutual funds compared with those associated with managing assets of other types of clients, including third-party sub-advised fund clients and non-mutual fund clients such as institutional separate accounts.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board determined that the compensation payable to Allspring Funds Management under the Management Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
Profitability
The Board received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole. The Board noted that the Sub-Adviser’s profitability information with respect to providing services to the Fund and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses and differences in how Allspring Global Investments calculates its pre-tax profit metric versus the methodology used when Allspring Funds Management was part of Wells Fargo. It was noted that the impact of such differences had only minor impact on the financial results presented. Among other things, the Board noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Based on its review, the Board did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Fund to be at a level that would prevent it from approving the continuation of the Advisory Agreements.
Economies of Scale
The Board received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Fund, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with Fund shareholders. The Board noted the existence of breakpoints in the Fund’s management fee structure, which operate generally to reduce the Fund’s expense ratios as the Fund grows in size, and the size of the Fund in relation to such breakpoints. The Board considered that in addition to management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways, including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
The Board concluded that Allspring Funds Management’s arrangements with respect to the Fund, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Fund and its shareholders.
Other Benefits to Allspring Funds Management and the Sub-Adviser
The Board received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, as a result of their relationships with the Fund. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Fund and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Fund. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it.
The Board also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser and fees earned in the past by Allspring Funds Management and the Sub-Adviser from managing a private investment vehicle for the fund complex’s securities lending collateral.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board did not find that any ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, were unreasonable.
Conclusion
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term.
34 | Allspring Growth Balanced Fund
Other information (unaudited)
Liquidity risk management program
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Allspring Funds Trust (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) on behalf of each of its series (other than the series that operate as money market funds), including the Fund, which is reasonably designed to assess and manage the Fund’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund. The Trust’s Board of Trustees (the “Board”) previously approved the designation of Allspring Funds Management, LLC (“Allspring Funds Management”), the Fund’s investment manager, to administer the Program, and Allspring Funds Management has established a Liquidity Risk Management Council (the “Council”) composed of personnel from multiple departments within Allspring Funds Management and its affiliates to assist Allspring Funds Management in the administration of the Program.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent the Fund does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if the Fund has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s “highly liquid investments” below its HLIM; and (6) periodic reporting to the Board.
At a meeting of the Board held on May 16-17, 2023, the Board received and reviewed a written report (the “Report”) from Allspring Funds Management that, among other things, addressed the operation of the Program and assessed its adequacy and effectiveness for the period from January 1, 2022 through December 31, 2022 (the “Reporting Period”). The Report noted significant liquidity events impacting the Funds related to extended foreign market holidays as well as the difficulty of trading and settlement of most Russia-related securities due to sanctions activity. The Report noted that there were no material changes to the Program during the Reporting Period.
Allspring Funds Management determined in the Report that the Program has been implemented and operates effectively to manage the Fund’s, including the Fund’s, liquidity risk, and Allspring Funds Management continues to believe that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s liquidity developments.
There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other risks to which an investment in the Fund may be subject.
Allspring Growth Balanced Fund | 35
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.
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.
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Contents
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The views expressed and any forward-looking statements are as of May 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 Index Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Index Fund for the 12-month period that ended May 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. The market was focused on persistently high inflation 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. Markets received a boost in December with the removal of China’s strict COVID-19 lockdowns. In March 2023, a new wave of market anxiety resulted from several bank failures and unease over the possibility of more rate hikes. However, investors regained confidence and markets finished the period in relative calm.
For the 12-month period, stocks and bonds—both domestic U.S. and global—had mixed results. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 2.92%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 lost 1.41%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a return of -8.49%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -2.14%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 6.49%, the Bloomberg Municipal Bond Index6 gained 0.49%, and the ICE BofA U.S. High Yield Index7 returned -0.09%.
High inflation and central bank rate hikes rocked markets.
In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Federal Reserve (Fed) raised its short-term rate by 0.75% in June. Meanwhile, the U.S. unemployment rate remained historically low 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 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, 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.
“ In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring 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 the 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.
2 | Allspring Index Fund
Letter to shareholders (unaudited)
August was yet another broadly challenging month for financial markets. 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 was the resilient U.S. jobs 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.
In September, all asset classes suffered further 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. 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 increasing 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 declining overall in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever, with generally flat 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 wound 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.
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 had 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 (ECB) both raised rates by 0.50%.
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 Index Fund | 3
Letter to shareholders (unaudited)
“ 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 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 banking industry turmoil created an additional challenge for central banks in balancing inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. 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.
Economic data released in April pointed to global resilience, as Purchasing Managers Indexes1 in the U.S., U.K., and eurozone beat expectations, and China reported first-quarter annualized economic growth of 4.5%. Despite banking industry stress, developed market stocks had monthly gains. The U.S. labor market remained strong, with a 3.5% jobless rate and monthly payroll gains above 200,000. However, uncertainty and inflationary concerns weighed on investors in the U.S. and abroad.
May was marked by a divergence between expanding activity in services and an overall contraction in manufacturing activity in the U.S., U.K., and eurozone. Core inflation remained elevated in the U.S. and Europe, despite the ongoing efforts of the Fed and ECB, which included rate hikes of 0.25% by both in May. Stubborn inflation and the resilient U.S. labor market led to expectations of further interest rate hikes, overall monthly declines across bond indexes, and mixed results for stocks in May. Investor worries over a U.S. debt ceiling impasse were modest, and market confidence was buoyed by a deal in late May to avert a potential U.S. debt default.
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 Index Fund
Letter to shareholders (unaudited)
Notice to Shareholders |
Beginning in July 2024, the Fund will be required by the Securities and Exchange Commission to send shareholders a paper copy of a new tailored shareholder report in place of the full shareholder report that you are now receiving. The tailored shareholder report will contain concise information about the Fund, including certain expense and performance information and fund statistics. If you wish to receive this new tailored shareholder report electronically, please follow the instructions on the back cover of this report. |
Other information that is currently included in the shareholder report, such as the Fund’s financial statements, will be available online and upon request, free of charge, in paper or electronic format. |
Allspring Index Fund | 5
Performance highlights (unaudited)
Performance highlights
Investment objective | The Fund seeks to replicate the total returns of the S&P 500 Index, before fees and expenses. |
Manager | Allspring Funds Management, LLC |
Subadviser | Allspring Global Investments, LLC |
Portfolio managers | John R. Campbell, CFA, David Neal, CFA, Robert M. Wicentowski, CFA |
Average annual total returns (%) as of May 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 | Net2 | |
Class A (WFILX) | 11-4-1998 | -3.45 | 9.16 | 10.78 | 2.45 | 10.46 | 11.43 | 0.62 | 0.44 |
Class C (WFINX) | 4-30-1999 | 0.69 | 9.65 | 10.78 | 1.69 | 9.65 | 10.78 | 1.37 | 1.19 |
Administrator Class (WFIOX) | 2-14-1985 | – | – | – | 2.65 | 10.67 | 11.68 | 0.40 | 0.25 |
S&P 500 Index3 | – | – | – | – | 2.92 | 11.01 | 11.99 | – | – |
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 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 September 30, 2023 (September 30, 2024 for Class A and Class C), to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.44% for Class A, 1.19% for Class C and 0.25% for Administrator Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any) from funds in which the affiliated master portfolio invests, and extraordinary expenses are excluded from the expense caps. Net expenses from the affiliated master portfolio are included in 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 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. |
Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. 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 Index Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of May 31, 20231 |
1 | The chart compares the performance of Class A shares for the most recent ten years with the 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%. |
Allspring Index Fund | 7
Performance highlights (unaudited)
MANAGER’S DISCUSSION
Fund highlights
•The Fund underperformed its benchmark, the S&P 500 Index, for the 12-month period that ended May 31, 2023.
•During the period, the Fund experienced negative returns in 7 out of the 11 Global Industry Classification Standard economic sectors, while it benefited from positive returns in the information technology (IT), communication services, industrials, and consumer staples sectors.
•Real estate and materials were the Fund’s lowest-performing sectors, while IT was by far the best-performing sector.
U.S. equities sold off sharply in 2022 before rebounding through year-end and into the spring of 2023.
During 2022, U.S. markets succumbed to pressure from soaring inflation, particularly surging food and energy prices, aggressive central bank tightening, slowing global growth, a European energy crisis, and Russia’s ongoing invasion of Ukraine. 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.
However, U.S. large 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 softer inflation data, oversold conditions, and optimism over a potential pause in rate hikes by the Federal Reserve. Over the 12-month period, large caps outperformed small caps and growth significantly outperformed value.
Ten largest holdings (%) as of May 31, 20231 | |
Apple, Inc. | 7.46 |
Microsoft Corp. | 6.91 |
Amazon.com, Inc. | 3.04 |
NVIDIA Corp. | 2.63 |
Alphabet, Inc. Class A | 2.07 |
Alphabet, Inc. Class C | 1.81 |
Meta Platforms, Inc. Class A | 1.67 |
Berkshire Hathaway, Inc. Class B | 1.64 |
Tesla, Inc. | 1.55 |
UnitedHealth Group, Inc. | 1.29 |
1 | Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
The Fund’s periodic rebalancing aligned with the changing weights and constituents of the S&P 500 Index.
The objective of the Fund is to replicate the performance of the S&P 500 Index before fees and expenses. The portfolio management team uses an investment process designed with the goal of controlling trading and implementation costs and reducing tracking error as much as possible. The portfolio holdings will be highly reflective of the index composition, and the strategy’s performance should closely align with that of the index. Periodic rebalancing takes place to reflect the frequently changing
weights and constituents of the index. Consistent with its objective, during the period, the Fund performed closely in line with the return of the benchmark before fees and expenses.
Sector allocation as of May 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 real estate and materials sectors produced the lowest returns.
Within real estate, 71% of the holdings (22 out of 31) were down double digits and only 4 stocks finished with gains over the 12-month period. Real estate investment trusts (REITs), particularly office REITS such as Boston Properties, Vornado Realty Trust*, and Alexandria Real Estate Equities, struggled amid an environment of rising interest rates and tightening credit conditions. Within materials, 69% of companies (20 out of 29) also suffered double-digit losses as commodity prices normalized and macroeconomic conditions deteriorated. A significant decline in Tesla, Inc., one of the S&P 500 Index’s largest constituents, was the largest detractor from the overall index over the 12-month period.
*
This security was no longer held at the end of the reporting period.
8 | Allspring Index Fund
Performance highlights (unaudited)
The IT sector led the S&P 500 Index.
Within the IT sector, although only 58% of companies (38 out of 65) finished with gains, 25 companies were up double digits, and NVIDIA Corp. generated a triple-digit return. After 2022’s rising-rate-driven sell-off, many mega-cap IT and semiconductor-related stocks have rallied sharply in 2023 over optimism about artificial intelligence/machine learning.
Recession risks are rising as economic growth weakens and credit conditions tighten.
As 2023 began, investors were buoyed by optimism that most developed economies would narrowly avoid a recession. However, such hopes were tempered by dread that central banks 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, we believe 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 interest rates appears to be taming inflation, but the lagged effects of 2022’s rapid tightening cycle are increasing the likelihood of a hard landing for many developed economies. Depending on the company and industry, many firms have already experienced a profits recession.
Earnings expectations will likely rebound before the economy improves. Market valuations 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, the U.S. economy has held up surprisingly well thus far. However, we currently anticipate volatile and range-bound markets.
Allspring Index Fund | 9
Fund expenses (unaudited)
Fund expenses
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 December 1, 2022 to May 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 the 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 12-1-2022 | Ending account value 5-31-2023 | Expenses paid during the period1 | Annualized net expense ratio | |
Class A | ||||
Actual | $1,000.00 | $1,000.31 | $2.24 | 0.45 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,022.69 | $2.27 | 0.45 % |
Class C | ||||
Actual | $1,000.00 | $1,000.27 | $5.98 | 1.20 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,018.95 | $6.04 | 1.20 % |
Administrator Class | ||||
Actual | $1,000.00 | $1,000.32 | $1.25 | 0.25 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,023.69 | $1.26 | 0.25 % |
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 Index Fund
Portfolio of investments—May 31, 2023
Portfolio of investments
Shares | Value | |||||
Common stocks: 98.88% | ||||||
Communication services: 8.67% | ||||||
Diversified telecommunication services: 0.74% | ||||||
AT&T, Inc. | 218,895 | $3,443,219 | ||||
Verizon Communications, Inc. | 128,975 | 4,595,379 | ||||
8,038,598 | ||||||
Entertainment: 1.37% | ||||||
Activision Blizzard, Inc. | 21,871 | 1,754,054 | ||||
Electronic Arts, Inc. | 8,000 | 1,024,000 | ||||
Live Nation Entertainment, Inc.† | 4,378 | 349,977 | ||||
Netflix, Inc.† | 13,676 | 5,405,166 | ||||
Take-Two Interactive Software, Inc.† | 4,869 | 670,608 | ||||
Walt Disney Co.† | 56,100 | 4,934,556 | ||||
Warner Bros Discovery, Inc.† | 67,862 | 765,483 | ||||
14,903,844 | ||||||
Interactive media & services: 5.58% | ||||||
Alphabet, Inc. Class A† | 182,904 | 22,473,414 | ||||
Alphabet, Inc. Class C† | 159,447 | 19,670,976 | ||||
Match Group, Inc.† | 8,577 | 295,907 | ||||
Meta Platforms, Inc. Class A† | 68,351 | 18,093,877 | ||||
60,534,174 | ||||||
Media: 0.75% | ||||||
Charter Communications, Inc. Class A† | 3,235 | 1,055,095 | ||||
Comcast Corp. Class A | 129,182 | 5,083,312 | ||||
DISH Network Corp. Class A† | 7,719 | 49,633 | ||||
Fox Corp. Class A | 9,118 | 284,481 | ||||
Fox Corp. Class B | 4,233 | 123,646 | ||||
Interpublic Group of Cos., Inc. | 11,931 | 443,714 | ||||
News Corp. Class A | 11,742 | 214,996 | ||||
News Corp. Class B | 3,620 | 66,898 | ||||
Omnicom Group, Inc. | 6,225 | 548,983 | ||||
Paramount Global Class B | 15,509 | 235,892 | ||||
8,106,650 | ||||||
Wireless telecommunication services: 0.23% | ||||||
T-Mobile U.S., Inc.† | 18,189 | 2,496,440 | ||||
Consumer discretionary: 10.05% | ||||||
Automobile components: 0.10% | ||||||
Aptiv PLC† | 8,321 | 732,913 | ||||
BorgWarner, Inc. | 7,190 | 318,733 | ||||
1,051,646 | ||||||
Automobiles: 1.81% | ||||||
Ford Motor Co. | 120,237 | 1,442,844 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring Index Fund | 11
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Automobiles (continued) | ||||||
General Motors Co. | 42,828 | $1,388,055 | ||||
Tesla, Inc.† | 82,592 | 16,842,987 | ||||
19,673,886 | ||||||
Broadline retail: 3.14% | ||||||
Amazon.com, Inc.† | 273,776 | 33,011,910 | ||||
eBay, Inc. | 16,665 | 708,929 | ||||
Etsy, Inc.† | 3,860 | 312,853 | ||||
34,033,692 | ||||||
Distributors: 0.13% | ||||||
Genuine Parts Co. | 4,329 | 644,718 | ||||
LKQ Corp. | 7,794 | 411,133 | ||||
Pool Corp. | 1,199 | 379,160 | ||||
1,435,011 | ||||||
Hotels, restaurants & leisure: 2.04% | ||||||
Booking Holdings, Inc.† | 1,191 | 2,987,945 | ||||
Caesars Entertainment, Inc.† | 6,589 | 270,215 | ||||
Carnival Corp.† | 30,775 | 345,603 | ||||
Chipotle Mexican Grill, Inc.† | 848 | 1,760,864 | ||||
Darden Restaurants, Inc. | 3,737 | 592,389 | ||||
Domino’s Pizza, Inc. | 1,087 | 315,067 | ||||
Expedia Group, Inc.† | 4,540 | 434,523 | ||||
Hilton Worldwide Holdings, Inc. | 8,182 | 1,113,734 | ||||
Las Vegas Sands Corp.† | 10,092 | 556,372 | ||||
Marriott International, Inc. Class A | 8,263 | 1,386,449 | ||||
McDonald’s Corp. | 22,492 | 6,412,694 | ||||
MGM Resorts International† | 9,662 | 379,620 | ||||
Norwegian Cruise Line Holdings Ltd.† | 12,941 | 192,174 | ||||
Royal Caribbean Cruises Ltd.† | 6,741 | 545,819 | ||||
Starbucks Corp. | 35,294 | 3,446,106 | ||||
Wynn Resorts Ltd. | 3,167 | 312,583 | ||||
Yum! Brands, Inc. | 8,599 | 1,106,605 | ||||
22,158,762 | ||||||
Household durables: 0.35% | ||||||
D.R. Horton, Inc. | 9,596 | 1,025,237 | ||||
Garmin Ltd.† | 4,709 | 485,733 | ||||
Lennar Corp. Class A | 7,786 | 834,036 | ||||
Mohawk Industries, Inc.† | 1,619 | 149,013 | ||||
Newell Brands, Inc. | 11,558 | 96,047 | ||||
NVR, Inc.† | 93 | 516,543 | ||||
PulteGroup, Inc. | 6,928 | 457,802 | ||||
Whirlpool Corp. | 1,674 | 216,431 | ||||
3,780,842 | ||||||
Leisure products: 0.02% | ||||||
Hasbro, Inc. | 3,987 | 236,629 | ||||
The accompanying notes are an integral part of these financial statements.
12 | Allspring Index Fund
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Specialty retail: 2.03% | ||||||
Advance Auto Parts, Inc. | 1,820 | $132,660 | ||||
AutoZone, Inc.† | 576 | 1,374,820 | ||||
Bath & Body Works, Inc. | 7,014 | 247,173 | ||||
Best Buy Co., Inc. | 6,047 | 439,436 | ||||
CarMax, Inc.† | 4,853 | 350,435 | ||||
Home Depot, Inc. | 31,298 | 8,871,418 | ||||
Lowe’s Cos., Inc. | 18,570 | 3,734,984 | ||||
O’Reilly Automotive, Inc.† | 1,915 | 1,729,839 | ||||
Ross Stores, Inc. | 10,575 | 1,095,782 | ||||
TJX Cos., Inc. | 35,485 | 2,724,893 | ||||
Tractor Supply Co. | 3,392 | 710,929 | ||||
Ulta Beauty, Inc.† | 1,563 | 640,564 | ||||
22,052,933 | ||||||
Textiles, apparel & luxury goods: 0.43% | ||||||
NIKE, Inc. Class B | 38,253 | 4,026,511 | ||||
Ralph Lauren Corp. | 1,262 | 134,163 | ||||
Tapestry, Inc. | 7,250 | 290,145 | ||||
VF Corp. | 10,145 | 174,697 | ||||
4,625,516 | ||||||
Consumer staples: 6.82% | ||||||
Beverages: 1.75% | ||||||
Brown-Forman Corp. Class B | 5,616 | 346,900 | ||||
Coca-Cola Co. | 119,522 | 7,130,683 | ||||
Constellation Brands, Inc. Class A | 4,986 | 1,211,449 | ||||
Keurig Dr Pepper, Inc. | 26,095 | 812,076 | ||||
Molson Coors Beverage Co. Class B | 5,773 | 357,060 | ||||
Monster Beverage Corp.† | 23,392 | 1,371,239 | ||||
PepsiCo, Inc. | 42,294 | 7,712,311 | ||||
18,941,718 | ||||||
Consumer staples distribution & retail: 1.85% | ||||||
Costco Wholesale Corp. | 13,627 | 6,971,028 | ||||
Dollar General Corp. | 6,866 | 1,380,684 | ||||
Dollar Tree, Inc.† | 6,385 | 861,209 | ||||
Kroger Co. | 20,004 | 906,781 | ||||
Sysco Corp. | 15,588 | 1,090,381 | ||||
Target Corp. | 14,136 | 1,850,826 | ||||
Walgreens Boots Alliance, Inc. | 21,984 | 667,654 | ||||
Walmart, Inc. | 43,065 | 6,324,957 | ||||
20,053,520 | ||||||
Food products: 1.11% | ||||||
Archer-Daniels-Midland Co. | 16,800 | 1,186,920 | ||||
Bunge Ltd. | 4,600 | 426,144 | ||||
Campbell Soup Co. | 6,162 | 311,489 | ||||
Conagra Brands, Inc. | 14,637 | 510,392 | ||||
General Mills, Inc. | 18,106 | 1,523,801 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring Index Fund | 13
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Food products (continued) | ||||||
Hershey Co. | 4,513 | $1,172,026 | ||||
Hormel Foods Corp. | 8,894 | 340,196 | ||||
J M Smucker Co. | 3,275 | 480,082 | ||||
Kellogg Co. | 7,860 | 524,812 | ||||
Kraft Heinz Co. | 24,451 | 934,517 | ||||
Lamb Weston Holdings, Inc. | 4,418 | 491,282 | ||||
McCormick & Co., Inc. | 7,699 | 660,035 | ||||
Mondelez International, Inc. Class A | 41,866 | 3,073,383 | ||||
Tyson Foods, Inc. Class A | 8,771 | 444,164 | ||||
12,079,243 | ||||||
Household products: 1.37% | ||||||
Church & Dwight Co., Inc. | 7,489 | 692,358 | ||||
Clorox Co. | 3,793 | 599,977 | ||||
Colgate-Palmolive Co. | 25,649 | 1,907,773 | ||||
Kimberly-Clark Corp. | 10,365 | 1,391,812 | ||||
Procter & Gamble Co. | 72,447 | 10,323,697 | ||||
14,915,617 | ||||||
Personal care products: 0.12% | ||||||
Estee Lauder Cos., Inc. Class A | 7,115 | 1,309,373 | ||||
Tobacco: 0.62% | ||||||
Altria Group, Inc. | 54,832 | 2,435,638 | ||||
Philip Morris International, Inc. | 47,606 | 4,285,016 | ||||
6,720,654 | ||||||
Energy: 4.13% | ||||||
Energy equipment & services: 0.32% | ||||||
Baker Hughes Co. | 30,893 | 841,834 | ||||
Halliburton Co. | 27,764 | 795,438 | ||||
Schlumberger NV | 43,613 | 1,867,945 | ||||
3,505,217 | ||||||
Oil, gas & consumable fuels: 3.81% | ||||||
APA Corp. | 9,873 | 313,764 | ||||
Chevron Corp. | 54,630 | 8,228,371 | ||||
ConocoPhillips | 37,584 | 3,732,091 | ||||
Coterra Energy, Inc. | 24,213 | 562,952 | ||||
Devon Energy Corp. | 20,075 | 925,458 | ||||
Diamondback Energy, Inc. | 5,644 | 717,635 | ||||
EOG Resources, Inc. | 18,038 | 1,935,297 | ||||
EQT Corp. | 11,272 | 391,927 | ||||
Exxon Mobil Corp. | 126,461 | 12,921,785 | ||||
Hess Corp. | 8,521 | 1,079,355 | ||||
Kinder Morgan, Inc. | 60,750 | 978,682 | ||||
Marathon Oil Corp. | 19,502 | 432,164 | ||||
Marathon Petroleum Corp. | 13,942 | 1,462,655 | ||||
Occidental Petroleum Corp. | 22,330 | 1,287,548 | ||||
The accompanying notes are an integral part of these financial statements.
14 | Allspring Index Fund
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Oil, gas & consumable fuels (continued) | ||||||
ONEOK, Inc. | 13,726 | $777,715 | ||||
Phillips 66 | 14,310 | 1,310,939 | ||||
Pioneer Natural Resources Co. | 7,296 | 1,455,114 | ||||
Targa Resources Corp. | 6,952 | 473,084 | ||||
Valero Energy Corp. | 11,839 | 1,267,247 | ||||
Williams Cos., Inc. | 37,404 | 1,071,999 | ||||
41,325,782 | ||||||
Financials: 12.34% | ||||||
Banks: 2.99% | ||||||
Bank of America Corp. | 214,335 | 5,956,370 | ||||
Citigroup, Inc. | 59,479 | 2,636,109 | ||||
Citizens Financial Group, Inc. | 15,124 | 389,897 | ||||
Comerica, Inc. | 4,022 | 145,194 | ||||
Fifth Third Bancorp | 20,986 | 509,330 | ||||
Huntington Bancshares, Inc. | 44,315 | 456,888 | ||||
JPMorgan Chase & Co. | 90,076 | 12,224,214 | ||||
KeyCorp | 28,662 | 267,703 | ||||
M&T Bank Corp. | 5,199 | 619,513 | ||||
PNC Financial Services Group, Inc. | 12,314 | 1,426,331 | ||||
Regions Financial Corp. | 28,682 | 495,338 | ||||
Truist Financial Corp. | 40,746 | 1,241,531 | ||||
U.S. Bancorp | 42,784 | 1,279,241 | ||||
Wells Fargo & Co. | 117,017 | 4,658,447 | ||||
Zions Bancorp NA | 4,595 | 125,397 | ||||
32,431,503 | ||||||
Capital markets: 2.66% | ||||||
Ameriprise Financial, Inc. | 3,234 | 965,252 | ||||
Bank of New York Mellon Corp. | 22,588 | 908,038 | ||||
BlackRock, Inc. | 4,599 | 3,024,072 | ||||
Cboe Global Markets, Inc. | 3,258 | 431,424 | ||||
Charles Schwab Corp. | 46,841 | 2,468,052 | ||||
CME Group, Inc. | 11,047 | 1,974,651 | ||||
FactSet Research Systems, Inc. | 1,175 | 452,246 | ||||
Franklin Resources, Inc. | 8,758 | 210,280 | ||||
Goldman Sachs Group, Inc. | 10,399 | 3,368,236 | ||||
Intercontinental Exchange, Inc. | 17,162 | 1,818,314 | ||||
Invesco Ltd. | 13,967 | 200,845 | ||||
MarketAxess Holdings, Inc. | 1,156 | 314,906 | ||||
Moody’s Corp. | 4,838 | 1,533,065 | ||||
Morgan Stanley | 40,122 | 3,280,375 | ||||
MSCI, Inc. | 2,456 | 1,155,622 | ||||
Nasdaq, Inc. | 10,410 | 576,194 | ||||
Northern Trust Corp. | 6,401 | 460,360 | ||||
Raymond James Financial, Inc. | 5,952 | 537,763 | ||||
S&P Global, Inc. | 10,109 | 3,714,350 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring Index Fund | 15
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Capital markets (continued) | ||||||
State Street Corp. | 10,718 | $729,038 | ||||
T Rowe Price Group, Inc. | 6,888 | 738,118 | ||||
28,861,201 | ||||||
Consumer finance: 0.49% | ||||||
American Express Co. | 18,283 | 2,898,953 | ||||
Capital One Financial Corp. | 11,709 | 1,220,195 | ||||
Discover Financial Services | 8,199 | 842,365 | ||||
Synchrony Financial | 13,421 | 415,514 | ||||
5,377,027 | ||||||
Financial services: 4.17% | ||||||
Berkshire Hathaway, Inc. Class B† | 55,329 | 17,765,035 | ||||
Fidelity National Information Services, Inc. | 18,222 | 994,375 | ||||
Fiserv, Inc.† | 19,501 | 2,187,817 | ||||
FleetCor Technologies, Inc.† | 2,265 | 513,136 | ||||
Global Payments, Inc. | 8,079 | 789,238 | ||||
Jack Henry & Associates, Inc. | 2,241 | 342,626 | ||||
Mastercard, Inc. Class A | 25,910 | 9,457,668 | ||||
PayPal Holdings, Inc.† | 34,744 | 2,153,781 | ||||
Visa, Inc. Class A | 49,901 | 11,029,618 | ||||
45,233,294 | ||||||
Insurance: 2.03% | ||||||
Aflac, Inc. | 17,194 | 1,104,027 | ||||
Allstate Corp. | 8,077 | 875,951 | ||||
American International Group, Inc. | 22,816 | 1,205,369 | ||||
Aon PLC Class A | 6,308 | 1,944,693 | ||||
Arch Capital Group Ltd.† | 11,359 | 791,722 | ||||
Arthur J Gallagher & Co. | 6,513 | 1,304,749 | ||||
Assurant, Inc. | 1,622 | 194,624 | ||||
Brown & Brown, Inc. | 7,218 | 449,898 | ||||
Chubb Ltd. | 12,746 | 2,368,207 | ||||
Cincinnati Financial Corp. | 4,827 | 465,806 | ||||
Everest Re Group Ltd. | 1,317 | 447,806 | ||||
Globe Life, Inc. | 2,778 | 286,634 | ||||
Hartford Financial Services Group, Inc. | 9,676 | 663,000 | ||||
Lincoln National Corp. | 4,729 | 98,931 | ||||
Loews Corp. | 5,990 | 335,440 | ||||
Marsh & McLennan Cos., Inc. | 15,201 | 2,632,509 | ||||
MetLife, Inc. | 20,239 | 1,002,842 | ||||
Principal Financial Group, Inc. | 6,988 | 457,435 | ||||
Progressive Corp. | 17,962 | 2,297,519 | ||||
Prudential Financial, Inc. | 11,301 | 889,276 | ||||
Travelers Cos., Inc. | 7,097 | 1,201,096 | ||||
W R Berkley Corp. | 6,255 | 348,278 | ||||
Willis Towers Watson PLC | 3,278 | 717,390 | ||||
22,083,202 | ||||||
The accompanying notes are an integral part of these financial statements.
16 | Allspring Index Fund
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Health care: 13.57% | ||||||
Biotechnology: 2.03% | ||||||
AbbVie, Inc. | 54,309 | $7,492,470 | ||||
Amgen, Inc. | 16,398 | 3,618,219 | ||||
Biogen, Inc.† | 4,422 | 1,310,725 | ||||
Gilead Sciences, Inc. | 38,294 | 2,946,340 | ||||
Incyte Corp.† | 5,683 | 349,789 | ||||
Moderna, Inc.† | 10,146 | 1,295,746 | ||||
Regeneron Pharmaceuticals, Inc.† | 3,301 | 2,428,083 | ||||
Vertex Pharmaceuticals, Inc.† | 7,895 | 2,554,585 | ||||
21,995,957 | ||||||
Health care equipment & supplies: 2.80% | ||||||
Abbott Laboratories | 53,544 | 5,461,488 | ||||
Align Technology, Inc.† | 2,231 | 630,614 | ||||
Baxter International, Inc. | 15,498 | 631,079 | ||||
Becton Dickinson & Co. | 8,718 | 2,107,664 | ||||
Boston Scientific Corp.† | 43,985 | 2,264,348 | ||||
Cooper Cos., Inc. | 1,516 | 563,239 | ||||
Dentsply Sirona, Inc. | 6,600 | 238,392 | ||||
Dexcom, Inc.† | 11,866 | 1,391,407 | ||||
Edwards Lifesciences Corp.† | 18,986 | 1,599,191 | ||||
GE HealthCare Technologies, Inc.† | 11,150 | 886,537 | ||||
Hologic, Inc.† | 7,571 | 597,276 | ||||
IDEXX Laboratories, Inc.† | 2,543 | 1,181,910 | ||||
Insulet Corp.† | 2,133 | 584,975 | ||||
Intuitive Surgical, Inc.† | 10,760 | 3,312,358 | ||||
Medtronic PLC | 40,849 | 3,380,663 | ||||
ResMed, Inc. | 4,511 | 950,874 | ||||
STERIS PLC | 3,049 | 609,709 | ||||
Stryker Corp. | 10,354 | 2,853,355 | ||||
Teleflex, Inc. | 1,440 | 338,040 | ||||
Zimmer Biomet Holdings, Inc. | 6,444 | 820,579 | ||||
30,403,698 | ||||||
Health care providers & services: 2.97% | ||||||
AmerisourceBergen Corp. | 4,969 | 845,475 | ||||
Cardinal Health, Inc. | 7,912 | 651,158 | ||||
Centene Corp.† | 16,913 | 1,055,540 | ||||
Cigna Group | 9,172 | 2,269,245 | ||||
CVS Health Corp. | 39,434 | 2,682,695 | ||||
DaVita, Inc.† | 1,688 | 158,115 | ||||
Elevance Health, Inc. | 7,334 | 3,284,312 | ||||
HCA Healthcare, Inc. | 6,512 | 1,720,405 | ||||
Henry Schein, Inc.† | 4,163 | 307,646 | ||||
Humana, Inc. | 3,838 | 1,926,177 | ||||
Laboratory Corp. of America Holdings | 2,721 | 578,294 | ||||
McKesson Corp. | 4,205 | 1,643,482 | ||||
Molina Healthcare, Inc.† | 1,793 | 491,103 | ||||
Quest Diagnostics, Inc. | 3,409 | 452,204 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring Index Fund | 17
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Health care providers & services (continued) | ||||||
UnitedHealth Group, Inc. | 28,693 | $13,980,377 | ||||
Universal Health Services, Inc. Class B | 1,970 | 260,296 | ||||
32,306,524 | ||||||
Life sciences tools & services: 1.60% | ||||||
Agilent Technologies, Inc. | 9,086 | 1,050,978 | ||||
Bio-Rad Laboratories, Inc. Class A† | 661 | 246,784 | ||||
Bio-Techne Corp. | 4,830 | 395,046 | ||||
Charles River Laboratories International, Inc.† | 1,562 | 302,059 | ||||
Danaher Corp. | 20,129 | 4,622,021 | ||||
Illumina, Inc.† | 4,831 | 950,016 | ||||
IQVIA Holdings, Inc.† | 5,703 | 1,122,978 | ||||
Mettler-Toledo International, Inc.† | 679 | 897,550 | ||||
Revvity, Inc. | 3,879 | 447,326 | ||||
Thermo Fisher Scientific, Inc. | 12,044 | 6,123,892 | ||||
Waters Corp.† | 1,824 | 458,225 | ||||
West Pharmaceutical Services, Inc. | 2,273 | 760,614 | ||||
17,377,489 | ||||||
Pharmaceuticals: 4.17% | ||||||
Bristol-Myers Squibb Co. | 65,293 | 4,207,481 | ||||
Catalent, Inc.† | 5,530 | 205,882 | ||||
Eli Lilly & Co. | 24,219 | 10,401,092 | ||||
Johnson & Johnson | 80,289 | 12,449,612 | ||||
Merck & Co., Inc. | 77,860 | 8,596,523 | ||||
Organon & Co. | 7,811 | 151,455 | ||||
Pfizer, Inc. | 172,380 | 6,553,888 | ||||
Viatris, Inc. | 37,241 | 340,755 | ||||
Zoetis, Inc. | 14,313 | 2,333,162 | ||||
45,239,850 | ||||||
Industrials: 8.15% | ||||||
Aerospace & defense: 1.65% | ||||||
Axon Enterprise, Inc.† | 2,076 | 400,481 | ||||
Boeing Co.† | 17,269 | 3,552,233 | ||||
General Dynamics Corp. | 6,911 | 1,411,088 | ||||
Howmet Aerospace, Inc. | 11,307 | 483,374 | ||||
Huntington Ingalls Industries, Inc. | 1,224 | 246,489 | ||||
L3Harris Technologies, Inc. | 5,847 | 1,028,604 | ||||
Lockheed Martin Corp. | 6,978 | 3,098,302 | ||||
Northrop Grumman Corp. | 4,418 | 1,923,995 | ||||
Raytheon Technologies Corp. | 44,988 | 4,145,194 | ||||
Textron, Inc. | 6,411 | 396,649 | ||||
TransDigm Group, Inc. | 1,593 | 1,232,425 | ||||
17,918,834 | ||||||
Air freight & logistics: 0.57% | ||||||
CH Robinson Worldwide, Inc. | 3,615 | 341,762 | ||||
Expeditors International of Washington, Inc. | 4,887 | 539,085 | ||||
The accompanying notes are an integral part of these financial statements.
18 | Allspring Index Fund
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Air freight & logistics (continued) | ||||||
FedEx Corp. | 7,131 | $1,554,415 | ||||
United Parcel Service, Inc. Class B | 22,412 | 3,742,804 | ||||
6,178,066 | ||||||
Building products: 0.40% | ||||||
A O Smith Corp. | 3,896 | 249,110 | ||||
Allegion PLC | 2,698 | 282,589 | ||||
Carrier Global Corp. | 25,617 | 1,047,735 | ||||
Johnson Controls International PLC | 21,104 | 1,259,909 | ||||
Masco Corp. | 6,916 | 334,181 | ||||
Trane Technologies PLC | 7,035 | 1,148,323 | ||||
4,321,847 | ||||||
Commercial services & supplies: 0.50% | ||||||
Cintas Corp. | 2,653 | 1,252,587 | ||||
Copart, Inc.† | 13,164 | 1,153,035 | ||||
Republic Services, Inc. | 6,308 | 893,402 | ||||
Rollins, Inc. | 7,108 | 279,487 | ||||
Waste Management, Inc. | 11,406 | 1,846,859 | ||||
5,425,370 | ||||||
Construction & engineering: 0.07% | ||||||
Quanta Services, Inc. | 4,388 | 779,221 | ||||
Electrical equipment: 0.53% | ||||||
AMETEK, Inc. | 7,052 | 1,023,034 | ||||
Eaton Corp. PLC | 12,213 | 2,148,267 | ||||
Emerson Electric Co. | 17,547 | 1,363,051 | ||||
Generac Holdings, Inc.† | 1,946 | 211,958 | ||||
Rockwell Automation, Inc. | 3,525 | 982,065 | ||||
5,728,375 | ||||||
Ground transportation: 0.77% | ||||||
CSX Corp. | 64,563 | 1,980,147 | ||||
JB Hunt Transport Services, Inc. | 2,549 | 425,607 | ||||
Norfolk Southern Corp. | 6,995 | 1,456,219 | ||||
Old Dominion Freight Line, Inc. | 2,782 | 863,644 | ||||
Union Pacific Corp. | 18,790 | 3,617,451 | ||||
8,343,068 | ||||||
Industrial conglomerates: 0.82% | ||||||
3M Co. | 16,905 | 1,577,405 | ||||
General Electric Co. | 33,451 | 3,396,280 | ||||
Honeywell International, Inc. | 20,518 | 3,931,249 | ||||
8,904,934 | ||||||
Machinery: 1.60% | ||||||
Caterpillar, Inc. | 15,981 | 3,288,091 | ||||
Cummins, Inc. | 4,339 | 886,935 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring Index Fund | 19
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Machinery (continued) | ||||||
Deere & Co. | 8,304 | $2,873,018 | ||||
Dover Corp. | 4,290 | 571,986 | ||||
Fortive Corp. | 10,837 | 705,597 | ||||
IDEX Corp. | 2,316 | 461,255 | ||||
Illinois Tool Works, Inc. | 8,525 | 1,864,673 | ||||
Ingersoll Rand, Inc. | 12,435 | 704,567 | ||||
Nordson Corp. | 1,651 | 359,802 | ||||
Otis Worldwide Corp. | 12,740 | 1,012,957 | ||||
PACCAR, Inc. | 16,030 | 1,102,543 | ||||
Parker-Hannifin Corp. | 3,939 | 1,262,213 | ||||
Pentair plc | 5,052 | 280,234 | ||||
Snap-on, Inc. | 1,631 | 405,891 | ||||
Stanley Black & Decker, Inc. | 4,543 | 340,589 | ||||
Westinghouse Air Brake Technologies Corp. | 5,585 | 517,339 | ||||
Xylem, Inc. | 7,337 | 735,167 | ||||
17,372,857 | ||||||
Passenger airlines: 0.20% | ||||||
Alaska Air Group, Inc.† | 3,916 | 175,946 | ||||
American Airlines Group, Inc.† | 19,981 | 295,319 | ||||
Delta Air Lines, Inc.† | 19,692 | 715,410 | ||||
Southwest Airlines Co. | 18,250 | 545,128 | ||||
United Airlines Holdings, Inc.† | 10,040 | 476,549 | ||||
2,208,352 | ||||||
Professional services: 0.80% | ||||||
Automatic Data Processing, Inc. | 12,724 | 2,659,189 | ||||
Broadridge Financial Solutions, Inc. | 3,614 | 530,246 | ||||
Ceridian HCM Holding, Inc.† | 4,725 | 292,241 | ||||
CoStar Group, Inc.† | 12,489 | 991,627 | ||||
Equifax, Inc. | 3,762 | 784,828 | ||||
Jacobs Solutions, Inc. | 3,891 | 426,454 | ||||
Leidos Holdings, Inc. | 4,198 | 327,696 | ||||
Paychex, Inc. | 9,852 | 1,033,770 | ||||
Paycom Software, Inc. | 1,481 | 414,873 | ||||
Robert Half International, Inc. | 3,307 | 215,021 | ||||
Verisk Analytics, Inc. | 4,803 | 1,052,385 | ||||
8,728,330 | ||||||
Trading companies & distributors: 0.24% | ||||||
Fastenal Co. | 17,530 | 943,990 | ||||
United Rentals, Inc. | 2,130 | 710,973 | ||||
WW Grainger, Inc. | 1,381 | 896,297 | ||||
2,551,260 | ||||||
Information technology: 27.73% | ||||||
Communications equipment: 0.88% | ||||||
Arista Networks, Inc.† | 7,601 | 1,264,351 | ||||
Cisco Systems, Inc. | 126,157 | 6,266,218 | ||||
The accompanying notes are an integral part of these financial statements.
20 | Allspring Index Fund
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Communications equipment (continued) | ||||||
F5, Inc.† | 1,846 | $272,433 | ||||
Juniper Networks, Inc. | 9,949 | 302,151 | ||||
Motorola Solutions, Inc. | 5,135 | 1,447,659 | ||||
9,552,812 | ||||||
Electronic equipment, instruments & components: 0.57% | ||||||
Amphenol Corp. Class A | 18,260 | 1,377,717 | ||||
CDW Corp. | 4,158 | 713,887 | ||||
Corning, Inc. | 23,377 | 720,245 | ||||
Keysight Technologies, Inc.† | 5,477 | 886,179 | ||||
TE Connectivity Ltd. | 9,718 | 1,190,261 | ||||
Teledyne Technologies, Inc.† | 1,439 | 559,267 | ||||
Trimble, Inc.† | 7,574 | 353,479 | ||||
Zebra Technologies Corp. Class A† | 1,586 | 416,436 | ||||
6,217,471 | ||||||
IT services: 1.20% | ||||||
Accenture PLC Class A | 19,339 | 5,916,187 | ||||
Akamai Technologies, Inc.† | 4,829 | 444,848 | ||||
Cognizant Technology Solutions Corp. Class A | 15,631 | 976,781 | ||||
DXC Technology Co.† | 6,992 | 175,010 | ||||
EPAM Systems, Inc.† | 1,766 | 453,191 | ||||
Gartner, Inc.† | 2,427 | 832,121 | ||||
International Business Machines Corp. | 27,765 | 3,570,301 | ||||
VeriSign, Inc.† | 2,813 | 628,199 | ||||
12,996,638 | ||||||
Semiconductors & semiconductor equipment: 7.19% | ||||||
Advanced Micro Devices, Inc.† | 49,514 | 5,853,050 | ||||
Analog Devices, Inc. | 15,565 | 2,765,745 | ||||
Applied Materials, Inc. | 25,890 | 3,451,137 | ||||
Broadcom, Inc. | 12,833 | 10,368,551 | ||||
Enphase Energy, Inc.† | 4,174 | 725,775 | ||||
First Solar, Inc.† | 3,045 | 618,013 | ||||
Intel Corp. | 127,044 | 3,994,263 | ||||
KLA Corp. | 4,253 | 1,884,036 | ||||
Lam Research Corp. | 4,144 | 2,555,605 | ||||
Microchip Technology, Inc. | 16,822 | 1,266,024 | ||||
Micron Technology, Inc. | 33,509 | 2,285,314 | ||||
Monolithic Power Systems, Inc. | 1,374 | 673,136 | ||||
NVIDIA Corp. | 75,545 | 28,581,695 | ||||
NXP Semiconductors NV | 7,958 | 1,425,278 | ||||
ON Semiconductor Corp.† | 13,265 | 1,108,954 | ||||
Qorvo, Inc.† | 3,068 | 298,394 | ||||
QUALCOMM, Inc. | 34,241 | 3,883,272 | ||||
Skyworks Solutions, Inc. | 4,882 | 505,336 | ||||
SolarEdge Technologies, Inc.† | 1,716 | 488,768 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring Index Fund | 21
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Semiconductors & semiconductor equipment (continued) | ||||||
Teradyne, Inc. | 4,783 | $479,209 | ||||
Texas Instruments, Inc. | 27,829 | 4,838,906 | ||||
78,050,461 | ||||||
Software: 10.20% | ||||||
Adobe, Inc.† | 14,059 | 5,873,710 | ||||
ANSYS, Inc.† | 2,675 | 865,603 | ||||
Autodesk, Inc.† | 6,626 | 1,321,158 | ||||
Cadence Design Systems, Inc.† | 8,424 | 1,945,186 | ||||
Fair Isaac Corp.† | 772 | 608,081 | ||||
Fortinet, Inc.† | 19,913 | 1,360,655 | ||||
Gen Digital, Inc. | 17,468 | 306,389 | ||||
Intuit, Inc. | 8,627 | 3,615,748 | ||||
Microsoft Corp. | 228,593 | 75,067,655 | ||||
Oracle Corp. | 47,196 | 4,999,944 | ||||
PTC, Inc.† | 3,269 | 439,354 | ||||
Roper Technologies, Inc. | 3,257 | 1,479,395 | ||||
Salesforce, Inc.† | 30,709 | 6,859,776 | ||||
ServiceNow, Inc.† | 6,234 | 3,396,158 | ||||
Synopsys, Inc.† | 4,681 | 2,129,668 | ||||
Tyler Technologies, Inc.† | 1,279 | 507,712 | ||||
110,776,192 | ||||||
Technology hardware, storage & peripherals: 7.69% | ||||||
Apple, Inc. | 456,727 | 80,954,861 | ||||
Hewlett Packard Enterprise Co. | 39,364 | 567,629 | ||||
HP, Inc. | 26,542 | 771,310 | ||||
NetApp, Inc. | 6,620 | 439,237 | ||||
Seagate Technology Holdings PLC | 5,897 | 354,410 | ||||
Western Digital Corp.† | 9,806 | 379,786 | ||||
83,467,233 | ||||||
Materials: 2.38% | ||||||
Chemicals: 1.65% | ||||||
Air Products & Chemicals, Inc. | 6,820 | 1,835,535 | ||||
Albemarle Corp. | 3,598 | 696,321 | ||||
Celanese Corp. | 3,063 | 318,613 | ||||
CF Industries Holdings, Inc. | 6,025 | 370,598 | ||||
Corteva, Inc. | 21,890 | 1,170,896 | ||||
Dow, Inc. | 21,646 | 1,055,892 | ||||
DuPont de Nemours, Inc. | 14,069 | 945,296 | ||||
Eastman Chemical Co. | 3,648 | 281,224 | ||||
Ecolab, Inc. | 7,610 | 1,256,031 | ||||
FMC Corp. | 3,868 | 402,581 | ||||
International Flavors & Fragrances, Inc. | 7,830 | 605,181 | ||||
Linde PLC | 15,125 | 5,349,107 | ||||
LyondellBasell Industries NV Class A | 7,800 | 667,212 | ||||
Mosaic Co. | 10,456 | 334,174 | ||||
The accompanying notes are an integral part of these financial statements.
22 | Allspring Index Fund
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Chemicals (continued) | ||||||
PPG Industries, Inc. | 7,217 | $947,520 | ||||
Sherwin-Williams Co. | 7,242 | 1,649,583 | ||||
17,885,764 | ||||||
Construction materials: 0.14% | ||||||
Martin Marietta Materials, Inc. | 1,907 | 759,062 | ||||
Vulcan Materials Co. | 4,081 | 797,836 | ||||
1,556,898 | ||||||
Containers & packaging: 0.22% | ||||||
Amcor PLC | 45,627 | 439,844 | ||||
Avery Dennison Corp. | 2,486 | 400,569 | ||||
Ball Corp. | 9,640 | 493,182 | ||||
International Paper Co. | 10,922 | 321,544 | ||||
Packaging Corp. of America | 2,842 | 352,493 | ||||
Sealed Air Corp. | 4,442 | 168,130 | ||||
Westrock Co. | 7,820 | 219,038 | ||||
2,394,800 | ||||||
Metals & mining: 0.37% | ||||||
Freeport-McMoRan, Inc. | 43,893 | 1,507,286 | ||||
Newmont Corp. | 24,375 | 988,406 | ||||
Nucor Corp. | 7,769 | 1,025,974 | ||||
Steel Dynamics, Inc. | 5,122 | 470,712 | ||||
3,992,378 | ||||||
Real estate: 2.39% | ||||||
Health care REITs: 0.18% | ||||||
Healthpeak Properties, Inc. | 16,791 | 335,148 | ||||
Ventas, Inc. | 12,283 | 529,889 | ||||
Welltower, Inc. | 14,511 | 1,082,666 | ||||
1,947,703 | ||||||
Hotel & resort REITs: 0.03% | ||||||
Host Hotels & Resorts, Inc. | 21,958 | 364,503 | ||||
Industrial REITs : 0.32% | ||||||
Prologis, Inc. | 28,347 | 3,530,619 | ||||
Office REITs : 0.07% | ||||||
Alexandria Real Estate Equities, Inc. | 4,837 | 548,806 | ||||
Boston Properties, Inc. | 4,381 | 213,223 | ||||
762,029 | ||||||
Real estate management & development: 0.07% | ||||||
CBRE Group, Inc. Class A† | 9,703 | 726,949 | ||||
Residential REITs : 0.34% | ||||||
AvalonBay Communities, Inc. | 4,296 | 747,418 | ||||
Camden Property Trust | 3,382 | 353,317 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring Index Fund | 23
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Residential REITs (continued) | ||||||
Equity Residential | 10,459 | $635,907 | ||||
Essex Property Trust, Inc. | 1,984 | 428,663 | ||||
Invitation Homes, Inc. | 17,837 | 604,318 | ||||
Mid-America Apartment Communities, Inc. | 3,546 | 521,475 | ||||
UDR, Inc. | 9,497 | 376,746 | ||||
3,667,844 | ||||||
Retail REITs : 0.28% | ||||||
Federal Realty Investment Trust | 2,248 | 198,274 | ||||
Kimco Realty Corp. | 18,993 | 349,091 | ||||
Realty Income Corp. | 19,259 | 1,144,755 | ||||
Regency Centers Corp. | 4,730 | 266,157 | ||||
Simon Property Group, Inc. | 10,040 | 1,055,706 | ||||
3,013,983 | ||||||
Specialized REITs : 1.10% | ||||||
American Tower Corp. | 14,298 | 2,637,123 | ||||
Crown Castle, Inc. | 13,297 | 1,505,353 | ||||
Digital Realty Trust, Inc. | 8,830 | 904,722 | ||||
Equinix, Inc. | 2,842 | 2,118,853 | ||||
Extra Space Storage, Inc. | 4,113 | 593,383 | ||||
Iron Mountain, Inc. | 8,928 | 476,934 | ||||
Public Storage | 4,854 | 1,375,138 | ||||
SBA Communications Corp. | 3,316 | 735,422 | ||||
VICI Properties, Inc. | 30,823 | 953,355 | ||||
Weyerhaeuser Co. | 22,504 | 644,965 | ||||
11,945,248 | ||||||
Utilities: 2.65% | ||||||
Electric utilities: 1.74% | ||||||
Alliant Energy Corp. | 7,709 | 396,705 | ||||
American Electric Power Co., Inc. | 15,780 | 1,311,634 | ||||
Constellation Energy Corp. | 10,042 | 843,729 | ||||
Duke Energy Corp. | 23,646 | 2,111,351 | ||||
Edison International | 11,727 | 791,807 | ||||
Entergy Corp. | 6,249 | 613,652 | ||||
Evergy, Inc. | 7,049 | 407,785 | ||||
Eversource Energy | 10,696 | 740,484 | ||||
Exelon Corp. | 30,517 | 1,209,999 | ||||
FirstEnergy Corp. | 16,680 | 623,665 | ||||
NextEra Energy, Inc. | 61,024 | 4,482,823 | ||||
NRG Energy, Inc. | 7,075 | 239,064 | ||||
PG&E Corp.† | 49,443 | 837,564 | ||||
Pinnacle West Capital Corp. | 3,474 | 268,471 | ||||
PPL Corp. | 22,612 | 592,434 | ||||
Southern Co. | 33,432 | 2,331,882 | ||||
Xcel Energy, Inc. | 16,806 | 1,097,264 | ||||
18,900,313 | ||||||
The accompanying notes are an integral part of these financial statements.
24 | Allspring Index Fund
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Gas utilities: 0.04% | ||||||
Atmos Energy Corp. | 4,396 | $506,771 | ||||
Independent power and renewable electricity producers: 0.04% | ||||||
AES Corp. | 20,512 | 404,907 | ||||
Multi-utilities: 0.75% | ||||||
Ameren Corp. | 7,939 | 643,615 | ||||
CenterPoint Energy, Inc. | 19,333 | 545,384 | ||||
CMS Energy Corp. | 8,944 | 518,573 | ||||
Consolidated Edison, Inc. | 10,898 | 1,016,783 | ||||
Dominion Energy, Inc. | 25,589 | 1,286,615 | ||||
DTE Energy Co. | 5,950 | 640,220 | ||||
NiSource, Inc. | 12,472 | 335,372 | ||||
Public Service Enterprise Group, Inc. | 15,322 | 915,490 | ||||
Sempra Energy | 9,653 | 1,385,495 | ||||
WEC Energy Group, Inc. | 9,687 | 846,159 | ||||
8,133,706 | ||||||
Water utilities: 0.08% | ||||||
American Water Works Co., Inc. | 5,926 | 856,011 | ||||
Total common stocks (Cost $304,914,927) | 1,073,401,239 | |||||
Yield | ||||||
Short-term investments: 0.84% | ||||||
Investment companies: 0.84% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.01 % | 9,092,232 | 9,092,232 | |||
Total short-term investments (Cost $9,092,232) | 9,092,232 | |||||
Total investments in securities (Cost $314,007,159) | 99.72 % | 1,082,493,471 | ||||
Other assets and liabilities, net | 0.28 | 3,038,210 | ||||
Total net assets | 100.00 % | $1,085,531,681 | ||||
† | 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: | |
REIT | Real estate investment trust |
The accompanying notes are an integral part of these financial statements.
Allspring Index Fund | 25
Portfolio of investments—May 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 | $0 | $104,009,056 | $(94,916,824 ) | $0 | $0 | $9,092,232 | 9,092,232 | $557,908 |
Futures contracts
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Long | ||||||
E-Mini S&P 500 Index | 58 | 6-16-2023 | $11,328,662 | $12,152,450 | $823,788 | $0 |
The accompanying notes are an integral part of these financial statements.
26 | Allspring Index Fund
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in unaffiliated securities, at value (cost $304,914,927) | $1,073,401,239 |
Investments in affiliated securities, at value (cost $9,092,232) | 9,092,232 |
Cash at broker segregated for futures contracts | 1,664,201 |
Receivable for dividends | 1,740,372 |
Receivable for Fund shares sold | 597,591 |
Receivable from manager | 114,197 |
Prepaid expenses and other assets | 260,749 |
Total assets | 1,086,870,581 |
Liabilities | |
Payable for Fund shares redeemed | 746,877 |
Shareholder servicing fee payable | 182,654 |
Administration fees payable | 168,777 |
Payable for daily variation margin on open futures contracts | 71,050 |
Distribution fee payable | 5,162 |
Trustees’ fees and expenses payable | 504 |
Accrued expenses and other liabilities | 163,876 |
Total liabilities | 1,338,900 |
Total net assets | $1,085,531,681 |
Net assets consist of | |
Paid-in capital | $221,905,005 |
Total distributable earnings | 863,626,676 |
Total net assets | $1,085,531,681 |
Computation of net asset value and offering price per share | |
Net assets–Class A | $727,313,781 |
Shares outstanding–Class A1 | 17,182,652 |
Net asset value per share–Class A | $42.33 |
Maximum offering price per share – Class A2 | $44.91 |
Net assets–Class C | $7,779,888 |
Shares outstanding–Class C1 | 179,095 |
Net asset value per share–Class C | $43.44 |
Net assets–Administrator Class | $350,438,012 |
Shares outstanding–Administrator Class1 | 8,037,086 |
Net asset value per share–Administrator Class | $43.60 |
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 Index Fund | 27
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Dividends (net of foreign withholdings taxes of $5,566) | $18,032,298 |
Income from affiliated securities | 557,908 |
Interest | 39,238 |
Total investment income | 18,629,444 |
Expenses | |
Management fee | 1,585,708 |
Administration fees | |
Class A | 1,504,230 |
Class C | 18,193 |
Administrator Class | 446,686 |
Shareholder servicing fees | |
Class A | 1,790,750 |
Class C | 21,610 |
Administrator Class | 313,525 |
Distribution fee | |
Class C | 64,607 |
Custody and accounting fees | 42,743 |
Professional fees | 82,895 |
Registration fees | 44,023 |
Shareholder report expenses | 73,693 |
Trustees’ fees and expenses | 24,093 |
Other fees and expenses | 34,792 |
Total expenses | 6,047,548 |
Less: Fee waivers and/or expense reimbursements | |
Fund-level | (1,597,422 ) |
Class A | (285,888 ) |
Class C | (2,686 ) |
Administrator Class | (503 ) |
Net expenses | 4,161,049 |
Net investment income | 14,468,395 |
Realized and unrealized gains (losses) on investments | |
Net realized gains (losses) on | |
Unaffiliated securities | 45,332,839 |
Futures contracts | (870,611 ) |
Net realized gains on investments | 44,462,228 |
Net change in unrealized gains (losses) on | |
Unaffiliated securities | (36,262,143 ) |
Futures contracts | 823,788 |
Net change in unrealized gains (losses) on investments | (35,438,355 ) |
Net realized and unrealized gains (losses) on investments | 9,023,873 |
Net increase in net assets resulting from operations | $23,492,268 |
The accompanying notes are an integral part of these financial statements.
28 | Allspring Index Fund
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $14,468,395 | $12,547,735 | ||
Net realized gains on investments | 44,462,228 | 112,329,479 | ||
Net change in unrealized gains (losses) on investments | (35,438,355 ) | (127,015,918 ) | ||
Net increase (decrease) in net assets resulting from operations | 23,492,268 | (2,138,704 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class A | (66,804,712 ) | (77,882,126 ) | ||
Class C | (709,270 ) | (1,006,598 ) | ||
Administrator Class | (31,911,691 ) | (38,543,455 ) | ||
Total distributions to shareholders | (99,425,673 ) | (117,432,179 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class A | 343,612 | 14,395,854 | 434,540 | 22,338,966 |
Class C | 14,778 | 630,451 | 20,668 | 1,096,073 |
Administrator Class | 630,351 | 27,092,159 | 541,048 | 28,070,542 |
42,118,464 | 51,505,581 | |||
Reinvestment of distributions | ||||
Class A | 1,593,378 | 64,771,802 | 1,474,352 | 75,486,719 |
Class C | 14,928 | 622,969 | 16,134 | 841,241 |
Administrator Class | 714,595 | 29,898,702 | 682,313 | 35,905,912 |
95,293,473 | 112,233,872 | |||
Payment for shares redeemed | ||||
Class A | (1,723,965 ) | (72,102,795 ) | (1,599,593 ) | (81,454,786 ) |
Class C | (77,218 ) | (3,317,859 ) | (54,965 ) | (2,849,529 ) |
Administrator Class | (1,224,463 ) | (52,955,693 ) | (1,365,467 ) | (70,021,494 ) |
(128,376,347 ) | (154,325,809 ) | |||
Net increase in net assets resulting from capital share transactions | 9,035,590 | 9,413,644 | ||
Total decrease in net assets | (66,897,815 ) | (110,157,239 ) | ||
Net assets | ||||
Beginning of period | 1,152,429,496 | 1,262,586,735 | ||
End of period | $1,085,531,681 | $1,152,429,496 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Index Fund | 29
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $45.49 | $50.17 | $41.27 | $49.48 | $63.35 |
Net investment income | 0.55 1 | 0.46 | 0.48 | 0.65 | 0.82 |
Net realized and unrealized gains (losses) on investments | 0.36 | (0.33 ) | 14.92 | 5.82 | 0.54 |
Total from investment operations | 0.91 | 0.13 | 15.40 | 6.47 | 1.36 |
Distributions to shareholders from | |||||
Net investment income | (0.53 ) | (0.46 ) | (0.57 ) | (0.67 ) | (0.90 ) |
Net realized gains | (3.54 ) | (4.35 ) | (5.93 ) | (14.01 ) | (14.33 ) |
Total distributions to shareholders | (4.07 ) | (4.81 ) | (6.50 ) | (14.68 ) | (15.23 ) |
Net asset value, end of period | $42.33 | $45.49 | $50.17 | $41.27 | $49.48 |
Total return2 | 2.45 % | (0.74 )% | 39.71 % | 12.02 % | 3.32 % |
Ratios to average net assets (annualized) | |||||
Gross expenses | 0.64 % | 0.63 %* | 0.65 %* | 0.67 %* | 0.65 %* |
Net expenses | 0.45 % | 0.44 %* | 0.44 %* | 0.44 %* | 0.45 %* |
Net investment income | 1.30 % | 0.92 %* | 1.08 %* | 1.47 %* | 1.51 %* |
Supplemental data | |||||
Portfolio turnover rate | 2 % | 2 %3 | 4 %3 | 3 %3 | 4 %3 |
Net assets, end of period (000s omitted) | $727,314 | $771,925 | $835,781 | $660,101 | $676,511 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2022 | 0.11% |
Year ended May 31, 2021 | 0.11% |
Year ended May 31, 2020 | 0.12% |
Year ended May 31, 2019 | 0.11% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
30 | Allspring Index Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $46.50 | $51.19 | $41.90 | $50.02 | $63.67 |
Net investment income | 0.23 1 | 0.08 1 | 0.16 1 | 0.30 | 0.46 1 |
Net realized and unrealized gains (losses) on investments | 0.40 | (0.37 ) | 15.21 | 5.84 | 0.52 |
Total from investment operations | 0.63 | (0.29 ) | 15.37 | 6.14 | 0.98 |
Distributions to shareholders from | |||||
Net investment income | (0.15 ) | (0.05 ) | (0.15 ) | (0.25 ) | (0.30 ) |
Net realized gains | (3.54 ) | (4.35 ) | (5.93 ) | (14.01 ) | (14.33 ) |
Total distributions to shareholders | (3.69 ) | (4.40 ) | (6.08 ) | (14.26 ) | (14.63 ) |
Net asset value, end of period | $43.44 | $46.50 | $51.19 | $41.90 | $50.02 |
Total return2 | 1.69 % | (1.48 )% | 38.83 % | 11.17 % | 2.54 % |
Ratios to average net assets (annualized) | |||||
Gross expenses | 1.38 % | 1.37 %* | 1.40 %* | 1.42 %* | 1.39 %* |
Net expenses | 1.20 % | 1.20 %* | 1.20 %* | 1.20 %* | 1.20 %* |
Net investment income | 0.54 % | 0.16 %* | 0.34 %* | 0.72 %* | 0.77 %* |
Supplemental data | |||||
Portfolio turnover rate | 2 % | 2 %3 | 4 %3 | 3 %3 | 4 %3 |
Net assets, end of period (000s omitted) | $7,780 | $10,538 | $12,530 | $16,103 | $19,146 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2022 | 0.11% |
Year ended May 31, 2021 | 0.11% |
Year ended May 31, 2020 | 0.12% |
Year ended May 31, 2019 | 0.11% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Index Fund | 31
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $46.73 | $51.41 | $42.15 | $50.24 | $64.04 |
Net investment income | 0.65 1 | 0.58 | 0.58 | 0.81 | 1.02 1 |
Net realized and unrealized gains (losses) on investments | 0.37 | (0.36 ) | 15.26 | 5.85 | 0.48 |
Total from investment operations | 1.02 | 0.22 | 15.84 | 6.66 | 1.50 |
Distributions to shareholders from | |||||
Net investment income | (0.61 ) | (0.55 ) | (0.65 ) | (0.74 ) | (0.97 ) |
Net realized gains | (3.54 ) | (4.35 ) | (5.93 ) | (14.01 ) | (14.33 ) |
Total distributions to shareholders | (4.15 ) | (4.90 ) | (6.58 ) | (14.75 ) | (15.30 ) |
Net asset value, end of period | $43.60 | $46.73 | $51.41 | $42.15 | $50.24 |
Total return | 2.65 % | (0.55 )% | 39.97 % | 12.25 % | 3.52 % |
Ratios to average net assets (annualized) | |||||
Gross expenses | 0.40 % | 0.37 %* | 0.42 %* | 0.44 %* | 0.41 %* |
Net expenses | 0.25 % | 0.25 %* | 0.25 %* | 0.25 %* | 0.25 %* |
Net investment income | 1.49 % | 1.11 %* | 1.28 %* | 1.67 %* | 1.72 %* |
Supplemental data | |||||
Portfolio turnover rate | 2 % | 2 %2 | 4 %2 | 3 %2 | 4 %2 |
Net assets, end of period (000s omitted) | $350,438 | $369,967 | $414,276 | $343,609 | $460,934 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2022 | 0.11% |
Year ended May 31, 2021 | 0.11% |
Year ended May 31, 2020 | 0.12% |
Year ended May 31, 2019 | 0.11% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
32 | Allspring Index Fund
Notes to financial statements
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 Index (the “Fund”) which is a diversified series of the Trust.
On June 1, 2022, the Fund began to invest substantially all of its assets directly in a portfolio of securities after restructuring the master-feeder structure under which the Fund invested 100% of its assets in the Allspring Index Portfolio (the “affiliated Master Portfolio”). After the close of business on May 31, 2022, the Fund redeemed its investment in the affiliated Master Portfolio. The Fund received its redemption proceeds in the form of an in-kind distribution of the securities held by the affiliated Master Portfolio along with acquiring the assets and assuming the liabilities of the affiliated Master Portfolio. Immediately after this transaction, the Fund began operating as a stand-alone fund.
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.
Investments which are not valued using any of 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.
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 and 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 received 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.
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.
Allspring Index Fund | 33
Notes to financial statements
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 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 May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $314,917,447 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $782,510,897 |
Gross unrealized losses | (14,280,096 ) |
Net unrealized gains | $768,230,801 |
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 difference causing such reclassification is due to the Fund’s restructure as a master-feeder structure into single fund structure. At May 31, 2023, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statements of Assets and Liabilities:
Paid-in capital | Total distributable earnings |
$(3,785,267 ) | $3,785,267 |
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.
34 | Allspring Index Fund
Notes to financial statements
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of May 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 | $94,079,706 | $0 | $0 | $94,079,706 |
Consumer discretionary | 109,048,917 | 0 | 0 | 109,048,917 |
Consumer staples | 74,020,125 | 0 | 0 | 74,020,125 |
Energy | 44,830,999 | 0 | 0 | 44,830,999 |
Financials | 133,986,227 | 0 | 0 | 133,986,227 |
Health care | 147,323,518 | 0 | 0 | 147,323,518 |
Industrials | 88,460,514 | 0 | 0 | 88,460,514 |
Information technology | 301,060,807 | 0 | 0 | 301,060,807 |
Materials | 25,829,840 | 0 | 0 | 25,829,840 |
Real estate | 25,958,878 | 0 | 0 | 25,958,878 |
Utilities | 28,801,708 | 0 | 0 | 28,801,708 |
Short-term investments | ||||
Investment companies | 9,092,232 | 0 | 0 | 9,092,232 |
1,082,493,471 | 0 | 0 | 1,082,493,471 | |
Futures contracts | 823,788 | 0 | 0 | 823,788 |
Total assets | $1,083,317,259 | $0 | $0 | $1,083,317,259 |
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 May 2023, the Fund did not have 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 and providing fund-level administrative services in connection with the Fund’s operations. As long as the Fund continues to invest substantially all of its assets in a single affiliated Master Portfolio, the Fund pays Allspring Funds Management an investment management fee only for fund-level administrative services at the following annual rate based on the Fund’s average daily net assets:
Average daily net assets | Management fee |
First $1 Billion | 0.150 % |
Next $4 billion | 0.125 |
Next $5 billion | 0.090 |
Over $10 billion | 0.080 |
For the year ended May 31, 2023, the management fee was equivalent to an annual rate of 0.15% 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, 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 0.05% and declining to 0.02% 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
Allspring Index Fund | 35
Notes to financial statements
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 |
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 September 30, 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 May 31, 2023, the contractual expense caps are as follows:
EXPENSE RATIO CAPS | |
Class A | 0.45 % |
Class C | 1.20 |
Administrator Class | 0.25 |
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 May 31, 2023, Allspring Funds Distributor received $1,715 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 May 31, 2023.
Shareholder servicing fees
The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A and Class C shares are charged a fee at an annual rate up to 0.25% of the average daily net assets of each respective class. Administrator Class is charged a fee at an annual rate up to 0.10% of its average daily net assets. 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 May 31, 2023 were $20,605,236 and $86,120,557, respectively.
6.
DERIVATIVE TRANSACTIONS
During the year ended May 31, 2023, the Fund entered into futures contracts to gain market exposure. The Fund had an average notional amount of $16,951,827 in long futures contracts during the year ended May 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
36 | Allspring Index Fund
Notes to financial statements
requests. Interest under the credit agreement is charged to the Fund based on 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 May 31, 2023, there were no borrowings by the Fund under the agreement.
Year ended May 31 | ||
2023 | 2022 | |
Ordinary income | $14,252,909 | $18,177,161 |
Long-term capital gain | 85,172,764 | 99,255,018 |
As of May 31, 2023, the components of distributable earnings on a tax basis were as follows:
Undistributed ordinary income | Undistributed long-term gain | Unrealized gains |
$5,680,963 | $30,404,233 | $768,230,801 |
8.
CONCENTRATION RISKS
As of the end of the period, 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.
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.
10.
FUND STRUCTURE CHANGE
At the February 23-24, 2022 Board meeting, the Board of Trustees approved restructuring the Fund and Allspring Index Portfolio master-feeder structure into a single-level fund structure. After the close of business on May 31, 2022, in connection with this transaction, the Fund redeemed in-kind its entire investment in Allspring Index Portfolio. As a result, the Fund received investments in securities with a value of $1,131,078,831 (cost $321,968,549), cash and cash at broker in the amount of $20,803,889 and $1,678,632 in receivable for dividends. Additionally, $214,122,139 was reclassified from distributable earnings to paid in capital on the Statement of Assets and Liabilities due to the restructuring. The restructuring of the master-feeder structure did not have any impact on the net assets of the Fund.
Allspring Index Fund | 37
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 Index Fund (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of May 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 May 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 May 31, 2023, by correspondence with the custodian, transfer agent and brokers. 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
July 27, 2023
38 | Allspring Index Fund
Other information (unaudited)
Other information
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 May 31, 2023.
Pursuant to Section 852 of the Internal Revenue Code, $85,172,764 was designated as a 20% rate gain distribution for the fiscal year ended May 31, 2023.
Pursuant to Section 854 of the Internal Revenue Code, $14,252,909 of income dividends paid during the fiscal year ended May 31, 2023 has been designated as qualified dividend income (QDI).
For the fiscal year ended May 31, 2023, $266,324 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 Index Fund | 39
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 128 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 |
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 |
1
The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by call 1-800-222-8222 or by visiting the website at allspringglobal.com.
40 | Allspring Index 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 |
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 Index Fund | 41
Other information (unaudited)
Officers1
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 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 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.
42 | Allspring Index Fund
Other information (unaudited)
Board consideration of investment management and sub-advisory agreements:
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (the “Board”) of Allspring Funds Trust (the “Trust”) must determine annually whether to approve the continuation of the Trust’s investment management and sub-advisory agreements. In this regard, at a Board meeting held on May 15-17, 2023 (the “Meeting”), the Board, all the members of which have no direct or indirect interest in the investment management and sub-advisory agreements and are not “interested persons” of the Trust, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for the Allspring Index Fund (the “Fund”): (i) an investment management agreement (the “Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Allspring Global Investments, LLC (the “Sub-Adviser”), an affiliate of Allspring Funds Management. The Management Agreement and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
At the Meeting, the Board considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at a Board meeting held in April 2023, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Board has adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Board in the discharge of its duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
The Board noted that it initially approved the Advisory Agreements at a Board meeting held in May 2021, each for a two-year term, in advance of the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC,1 a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. (the “Transaction”). The Trustees also noted that, while they did not specifically consider the continuation of the Advisory Agreements in 2022 as a result of the two-year term that was approved in 2021, the Trustees received and considered certain information at a Board meeting held in April 2022 that was applicable to the Advisory Agreements, including an overview and financial review of the Allspring Global Investments business, information regarding certain ancillary agreements that were approved by the Board at the April 2022 Board meeting, and comparative data regarding Fund fees and expenses.
In providing information to the Board, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Board’s annual contract renewal process earlier in 2023. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Board considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Board reviewed reports of Allspring Funds Management at each of its quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Board and the teams mentioned above confer with portfolio managers at various times throughout the year. The Board did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term. The Board considered the approval of the Advisory Agreements for the Fund as part of its consideration of agreements for funds across the complex, but its approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Board in support of its approvals.
Nature, Extent, and Quality of Services
The Board received and considered various information regarding the nature, extent, and quality of services provided to the Fund by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business. The Board also considered information about retention arrangements with respect to key personnel of Allspring Global Investments that were put in place in connection with the Transaction. The Board took into account information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the Transaction under a transition services agreement and the anticipated timeline for exiting the transition services agreement. In addition, the Board received and considered information about the full range of services provided to the Fund by Allspring Funds Management and its affiliates.
1
The trade name for the asset management firm that includes Allspring Funds Management and the Sub-Adviser is “Allspring Global Investments.”
Allspring Index Fund | 43
Other information (unaudited)
The Board considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Fund. The Board evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
The Board further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Board received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, and Allspring Funds Management’s role as administrator of the Fund’s liquidity risk management program. The Board also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund Investment Performance and Expenses
The Board considered the investment performance results for the Fund over various time periods ended December 31, 2022. The Board considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to the Fund (the “Universe”), and in comparison to the Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the mutual funds in the performance Universe. The Board noted that the investment performance of the Fund (Administrator Class) was higher than the average investment performance of the Universe for all periods under review. The Board also noted that the investment performance of the Fund was in range of the investment performance of its benchmark index, the S&P 500 Index, for all periods under review.
The Board also received and considered information regarding the Fund’s net operating expense ratios and their various components, including actual management fees, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Board considered these ratios in comparison to the median ratios of funds in class-specific expense groups that were determined by Broadridge to be similar to the Fund (the “Groups”). The Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Groups and an explanation of how funds comprising expense groups and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Board noted that the net operating expense ratios of the Fund were lower than the median net operating expense ratios of the expense Groups for all share classes. The Board noted that Allspring Funds Management had agreed to reduce the net operating expense caps for the Fund’s Class A shares.
The Board took into account the Fund’s investment performance and expense information provided to it among the factors considered in deciding to re-approve the Advisory Agreements.
Investment Management and Sub-Advisory Fee Rates
The Board reviewed and considered the contractual fee rates payable by the Fund to Allspring Funds Management under the Management Agreement, as well as the contractual fee rates payable by the Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which include, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rates”). The Board also reviewed and considered the contractual investment sub-advisory fee rates that are payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services. It was noted that advisory fee waivers, if any, are at the fund level and not class level.
Among other information reviewed by the Board was a comparison of the Fund’s Management Rates with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Board noted that the Management Rates of the Fund were in range of the sum of these average rates for the Fund’s expense Groups for Class A shares and higher than the sum of these average rates for the Fund’s expense Groups for Administrator Class shares.
The Board also received and considered information about the portion of the total management fee that was retained by Allspring Funds Management after payment of the fee to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of this amount, the Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services. Given the affiliation between Allspring Funds Management and the Sub-Adviser, the Board ascribed limited relevance to the allocation of fees between them.
The Board also received and considered information about the nature and extent of services offered and fee rates charged by Allspring Funds Management and the Sub-Adviser to other types of clients with investment strategies similar to those of the Fund. In this regard, the Board received information about the significantly greater scope of services, and compliance, reporting and other legal burdens and risks of managing proprietary mutual funds compared with those associated with managing assets of other types of clients, including third-party sub-advised fund clients and non-mutual fund clients such as institutional separate accounts.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board determined that the compensation payable to Allspring Funds Management under the Management Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
44 | Allspring Index Fund
Other information (unaudited)
Profitability
The Board received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole. The Board noted that the Sub-Adviser’s profitability information with respect to providing services to the Fund and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses and differences in how Allspring Global Investments calculates its pre-tax profit metric versus the methodology used when Allspring Funds Management was part of Wells Fargo. It was noted that the impact of such differences had only minor impact on the financial results presented. Among other things, the Board noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Based on its review, the Board did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Fund to be at a level that would prevent it from approving the continuation of the Advisory Agreements.
Economies of Scale
The Board received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Fund, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with Fund shareholders. The Board noted the existence of breakpoints in the Fund’s management fee structure, which operate generally to reduce the Fund’s expense ratios as the Fund grows in size, and the size of the Fund in relation to such breakpoints. The Board considered that in addition to management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways, including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
The Board concluded that Allspring Funds Management’s arrangements with respect to the Fund, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Fund and its shareholders.
Other Benefits to Allspring Funds Management and the Sub-Adviser
The Board received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, as a result of their relationships with the Fund. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Fund and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Fund. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it.
The Board also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser and fees earned in the past by Allspring Funds Management and the Sub-Adviser from managing a private investment vehicle for the fund complex’s securities lending collateral.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board did not find that any ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, were unreasonable.
Conclusion
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term.
Allspring Index Fund | 45
Other information (unaudited)
Liquidity risk management program
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Allspring Funds Trust (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) on behalf of each of its series (other than the series that operate as money market funds), including the Fund, which is reasonably designed to assess and manage the Fund’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund. The Trust’s Board of Trustees (the “Board”) previously approved the designation of Allspring Funds Management, LLC (“Allspring Funds Management”), the Fund’s investment manager, to administer the Program, and Allspring Funds Management has established a Liquidity Risk Management Council (the “Council”) composed of personnel from multiple departments within Allspring Funds Management and its affiliates to assist Allspring Funds Management in the administration of the Program.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent the Fund does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if the Fund has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s “highly liquid investments” below its HLIM; and (6) periodic reporting to the Board.
At a meeting of the Board held on May 16-17, 2023, the Board received and reviewed a written report (the “Report”) from Allspring Funds Management that, among other things, addressed the operation of the Program and assessed its adequacy and effectiveness for the period from January 1, 2022 through December 31, 2022 (the “Reporting Period”). The Report noted significant liquidity events impacting the Funds related to extended foreign market holidays as well as the difficulty of trading and settlement of most Russia-related securities due to sanctions activity. The Report noted that there were no material changes to the Program during the Reporting Period.
Allspring Funds Management determined in the Report that the Program has been implemented and operates effectively to manage the Fund’s, including the Fund’s, liquidity risk, and Allspring Funds Management continues to believe that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s liquidity developments.
There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other risks to which an investment in the Fund may be subject.
46 | Allspring Index 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.
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.
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Contents
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The views expressed and any forward-looking statements are as of May 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 Moderate Balanced Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Moderate Balanced Fund for the 12-month period that ended May 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. The market was focused on persistently high inflation 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. Markets received a boost in December with the removal of China’s strict COVID-19 lockdowns. In March 2023, a new wave of market anxiety resulted from several bank failures and unease over the possibility of more rate hikes. However, investors regained confidence and markets finished the period in relative calm.
For the 12-month period, stocks and bonds—both domestic U.S. and global—had mixed results. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 2.92%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 lost 1.41%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a return of -8.49%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -2.14%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 6.49%, the Bloomberg Municipal Bond Index6 gained 0.49%, and the ICE BofA U.S. High Yield Index7 returned -0.09%.
High inflation and central bank rate hikes rocked markets.
In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Federal Reserve (Fed) raised its short-term rate by 0.75% in June. Meanwhile, the U.S. unemployment rate remained historically low 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 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, 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.
“ In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring 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 the 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.
2 | Allspring Moderate Balanced Fund
Letter to shareholders (unaudited)
August was yet another broadly challenging month for financial markets. 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 was the resilient U.S. jobs 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.
In September, all asset classes suffered further 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. 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 increasing 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 declining overall in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever, with generally flat 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 wound 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.
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 had 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 (ECB) both raised rates by 0.50%.
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 Moderate Balanced Fund | 3
Letter to shareholders (unaudited)
“ 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 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 banking industry turmoil created an additional challenge for central banks in balancing inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. 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.
Economic data released in April pointed to global resilience, as Purchasing Managers Indexes1 in the U.S., U.K., and eurozone beat expectations, and China reported first-quarter annualized economic growth of 4.5%. Despite banking industry stress, developed market stocks had monthly gains. The U.S. labor market remained strong, with a 3.5% jobless rate and monthly payroll gains above 200,000. However, uncertainty and inflationary concerns weighed on investors in the U.S. and abroad.
May was marked by a divergence between expanding activity in services and an overall contraction in manufacturing activity in the U.S., U.K., and eurozone. Core inflation remained elevated in the U.S. and Europe, despite the ongoing efforts of the Fed and ECB, which included rate hikes of 0.25% by both in May. Stubborn inflation and the resilient U.S. labor market led to expectations of further interest rate hikes, overall monthly declines across bond indexes, and mixed results for stocks in May. Investor worries over a U.S. debt ceiling impasse were modest, and market confidence was buoyed by a deal in late May to avert a potential U.S. debt default.
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 Moderate Balanced Fund
Letter to shareholders (unaudited)
Notice to Shareholders |
Beginning in July 2024, the Fund will be required by the Securities and Exchange Commission to send shareholders a paper copy of a new tailored shareholder report in place of the full shareholder report that you are now receiving. The tailored shareholder report will contain concise information about the Fund, including certain expense and performance information and fund statistics. If you wish to receive this new tailored shareholder report electronically, please follow the instructions on the back cover of this report. |
Other information that is currently included in the shareholder report, such as the Fund’s financial statements, will be available online and upon request, free of charge, in paper or electronic format. |
Allspring Moderate Balanced Fund | 5
Performance highlights (unaudited)
Performance highlights
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 | Kandarp R. Acharya, CFA, FRM, Petros N. Bocray, CFA, FRM, Travis L. Keshemberg, CFA, CIPM, FRM |
Average annual total returns (%) as of May 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 | Net2 | |
Class A (WFMAX) | 1-30-2004 | -7.05 | 2.22 | 3.96 | -1.38 | 3.44 | 4.57 | 1.25 | 1.14 |
Class C (WFBCX) | 1-30-2004 | -3.13 | 2.67 | 3.95 | -2.13 | 2.67 | 3.95 | 2.00 | 1.89 |
Administrator Class (NVMBX) | 11-11-1994 | – | – | – | -1.17 | 3.70 | 4.83 | 1.18 | 0.90 |
Institutional Class (WFMYX)3 | 7-31-2018 | – | – | – | -1.04 | 3.80 | 4.88 | 0.93 | 0.80 |
Moderate Balanced Blended Index4 | – | – | – | – | 0.47 | 4.43 | 5.08 | – | – |
Bloomberg U.S. Aggregate Bond Index5 | – | – | – | – | -2.14 | 0.81 | 1.39 | – | – |
Bloomberg U.S. Short Treasury 9-12 Months Index6 | – | – | – | – | 1.69 | 1.40 | 0.96 | – | – |
MSCI EAFE Index (Net)7 | – | – | – | – | 3.06 | 3.21 | 4.56 | – | – |
Russell 1000® Growth Index8 | – | – | – | – | 9.55 | 13.84 | 14.76 | – | – |
Russell 1000® Value Index9 | – | – | – | – | -4.55 | 6.78 | 8.42 | – | – |
Russell 2000® Index10 | – | – | – | – | -4.68 | 2.74 | 7.36 | – | – |
S&P 500 Index11 | – | – | – | – | 2.92 | 11.01 | 11.99 | – | – |
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, which include the impact of 0.39% in acquired fund fees and expenses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report, which do not include acquired fund fees and expenses. |
2 | The manager has contractually committed through September 30, 2023 (September 30, 2024 for Class A and Class C), to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 1.14% for Class A, 1.89% for Class C, 0.90% for Administrator Class and 0.80% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any) from funds in which the affiliated master portfolios and funds invest and from money market funds, and extraordinary expenses are excluded from the expense caps. All other acquired fund fees and expenses from the affiliated master portfolios and funds are included in 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 | Source: Allspring Funds Management, LLC. The Moderate Balanced Blended Index is composed 45% of the Bloomberg U.S. Aggregate Bond Index, 15% of the Bloomberg U.S. Short Treasury 9-12 Months Index, 10% of the Russell 1000® Growth Index, 10% of the Russell 1000® Value Index, 10% of the S&P 500 Index, 6% of the MSCI EAFE Index (Net), and 4% of the Russell 2000® Index. You cannot invest directly in an index. |
5 | 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. |
6 | The Bloomberg U.S. Short Treasury 9–12 Months Index is an unmanaged index that includes aged U.S. Treasury bills, notes, and bonds with a remaining maturity from 9 up to (but not including) 12 months. It excludes zero-coupon STRIPS. You cannot invest directly in an index. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
6 | Allspring Moderate Balanced Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of May 31, 20231 |
1 | The chart compares the performance of Class A shares for the most recent ten years with the Moderate Balanced Blended Index, Bloomberg U.S. Aggregate Bond Index, Bloomberg U.S. Short Treasury 9-12 Months Index, MSCI EAFE Index (Net), Russell 1000® Growth Index, Russell 1000® Value Index, Russell 2000® 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%. |
Footnotes continued from previous page | |
7 | The Morgan Stanley Capital International (MSCI) Europe, Australasia, Far East (EAFE) Index (Net) is a free-float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. Source: MSCI. MSCI makes no express or implied 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. |
8 | The Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price/book ratios and higher forecasted growth values. You cannot invest directly in an index. |
9 | The Russell 1000® Value Index measures the performance of those Russell 1000 companies with lower price/book ratios and lower forecasted growth values. You cannot invest directly in an index. |
10 | 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. |
11 | 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. |
Balanced funds may invest in stocks and bonds. 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. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This fund is exposed to mortgage- and asset-backed securities risk. Consult the Fund’s prospectus for additional information on these and other risks.
Allspring Moderate Balanced Fund | 7
Performance highlights (unaudited)
MANAGER’S DISCUSSION
Fund highlights
•The Fund underperformed the Moderate Balanced Fund Blended Index for the 12-month period that ended May 31, 2023.
•The Tactical Asset Allocation (TAA) overlay was the largest single detractor from relative performance over the period. Poor stock selection among several actively managed equity strategies also detracted.
•Strong relative performance within fixed income investments had the largest positive impact on performance.
Slow growth, rising rates lead to muted market returns.
The trailing 12-month period featured slowing economic growth, rising interest rates, persistently high inflation, and geopolitical uncertainty. The broad equity market posted a small gain despite volatile markets while bonds posted losses over the period.
The 12-month period that ended May 31, 2023, saw a small gain in broad U.S. equity markets, as illustrated by the Russell 3000® Index’s* return of +2.03%. Broad foreign markets did worse, as reflected by the MSCI ACWI ex USA Index (Net)’s** return of -1.41%. While these return numbers seem modest, they reflect a recovery from some severe double-digit declines. The broad U.S. fixed income market, as represented by the Bloomberg U.S. Aggregate Bond Index, posted a return of -2.14%.
Ten largest holdings (%) as of May 31, 20231 | |
Allspring Managed Fixed Income Portfolio | 28.95 |
Allspring Conservative Income Fund Institutional Class | 15.02 |
Allspring Core Bond Portfolio | 8.45 |
Allspring Disciplined Large Cap Portfolio | 8.37 |
Allspring Diversified Large Cap Growth Portfolio | 7.89 |
Allspring Large Company Value Portfolio | 7.40 |
Allspring Real Return Portfolio | 4.43 |
Allspring C&B Large Cap Value Portfolio | 3.68 |
Allspring Disciplined International Developed Markets Portfolio | 2.89 |
iShares iBoxx High Yield Corporate Bond ETF | 2.71 |
1 | Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
Investment-grade exposure reduced; small high yield bond position added.
The allocations among the portfolio’s core holdings remained stable over the period. However, in February, we reduced exposure to investment-grade fixed income and established a small position in high yield bonds. In contrast, the Fund’s TAA overlay was active throughout the year. The overlay had a distinctly defensive posturing at the start of the period, which became less defensive as both stock and bond markets recovered in the second half of the period.
The TAA overlay detracted from relative performance along with poor stock selection.
The TAA overlay was the largest detractor from relative performance, reducing performance by about 52 basis points (bps; 100 bps equal 1.00%) over the entire period. Early on, the overlay was defensively postured but even some of the classic defensive trades detracted from performance. Since the beginning of 2023, we have selectively added risk. Our base case suggests a globally synchronized slowdown in economic activity with inflation more persistent than many local central banks may want it to be. We continue to prefer relative-value trades as opposed to directional trades amid much uncertainty.
Poor stock selection, particularly within U.S. large-cap growth, detracted from performance. The recovery from the market lows since the end of 2022 has been led by a small group of very large growth stocks; failing to hold the winners in weights equal to the index resulted in underperformance.
Strong relative performance from all fixed income mandates added to performance.
While the broad fixed income markets, as reflected by the Bloomberg U.S. Aggregate Bond Index posted a return of -2.14%, in total, our fixed income portfolio outperformed by about 40 bps. An overweight to credit within the investment-grade portfolio and exposure to growth-sensitive assets within the inflation-sensitive portfolio contributed.
Allocation (%) as of May 31, 2023 | ||
Neutral allocation | Effective allocation1 | |
Bond Funds | 60 | 63 |
Stock Funds | 40 | 40 |
Effective Cash | 0 | (3 ) |
1 | Effective allocation reflects the effect of the tactical futures overlay that may be in place. Effective cash, if any, represents the net offset to such future positions. Effective allocations are subject to change and may have changed since the date specified. |
Looking ahead, we are still somewhat guarded.
While U.S. lending standards are tightening and the impact of higher rates is just starting to be felt within the banking sector, the contagion from bank
*
The Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index.
**
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. You cannot invest directly in an index.
8 | Allspring Moderate Balanced Fund
Performance highlights (unaudited)
failures in the U.S. has been limited so far. The Federal Reserve (Fed) is likely to be more data dependent from this point forward and the pattern of consistently hiking every quarter should end. However, with real yields on the rise and the U.S. dollar stabilizing, the combination of further Fed balance sheet shrinkage and tighter fiscal policy affected by the debt limit negotiations should put downward pressure on growth. The household sector balance sheet remains healthy and supported by a strong labor market. Negative real wages and fading government support are likely to lead to lower spending going forward.
Our base case is that we have an early-onset recession, with the first quarter of 2023 being the peak of economic activity. It is likely that the second quarter will show sequential weakness. Credit spreads remain wider, the yield curve remains inverted, and the housing recession continues. The market continues to expect meaningful rate cuts in the second half of this this year. This is likely to put pressure on equity and bond valuations.
Allspring Moderate Balanced Fund | 9
Fund expenses (unaudited)
Fund expenses
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 December 1, 2022 to May 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 the 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 12-1-2022 | Ending account value 5-31-2023 | Expenses paid during the period1, 2 | Annualized net expense ratio2 | |
Class A | ||||
Actual | $1,000.00 | $1,000.06 | $5.24 | 1.05 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,019.70 | $5.29 | 1.05 % |
Class C | ||||
Actual | $1,000.00 | $1,000.02 | $8.98 | 1.80 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,015.96 | $9.05 | 1.80 % |
Administrator Class | ||||
Actual | $1,000.00 | $1,000.07 | $3.99 | 0.80 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,020.94 | $4.03 | 0.80 % |
Institutional Class | ||||
Actual | $1,000.00 | $1,000.08 | $3.49 | 0.70 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.44 | $3.53 | 0.70 % |
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).
2 Amounts reflect net expenses allocated from the affiliated Master Portfolios in which the Fund invests.
10 | Allspring Moderate Balanced Fund
Portfolio of investments—May 31, 2023
Portfolio of investments
Shares | Value | |||||
Investment companies: 99.05% | ||||||
Affiliated master portfolios: 77.77% | ||||||
Allspring C&B Large Cap Value Portfolio | $3,571,327 | |||||
Allspring Core Bond Portfolio | 8,189,797 | |||||
Allspring Disciplined International Developed Markets Portfolio | 2,800,295 | |||||
Allspring Disciplined Large Cap Portfolio | 8,118,858 | |||||
Allspring Diversified Large Cap Growth Portfolio | 7,644,868 | |||||
Allspring Emerging Growth Portfolio | 955,417 | |||||
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 798,354 | |||||
Allspring Factor Enhanced International Equity Portfolio | 928,478 | |||||
Allspring Large Company Value Portfolio | 7,169,605 | |||||
Allspring Managed Fixed Income Portfolio | 28,060,767 | |||||
Allspring Real Return Portfolio | 4,292,542 | |||||
Allspring Small Company Growth Portfolio | 963,320 | |||||
Allspring Small Company Value Portfolio | 1,897,241 | |||||
75,390,869 | ||||||
Bond funds: 15.02% | ||||||
Allspring Conservative Income Fund Institutional Class♠ | 1,478,565 | 14,563,862 | ||||
Exchange-traded funds: 4.63% | ||||||
iShares Core MSCI EAFE ETF | 28,202 | 1,862,178 | ||||
iShares iBoxx High Yield Corporate Bond ETF | 35,516 | 2,632,091 | ||||
4,494,269 | ||||||
Stock funds: 1.63% | ||||||
Allspring Emerging Markets Equity Fund Class R6♠ | 33,206 | 792,641 | ||||
Allspring Emerging Markets Equity Income Fund Class R6♠ | 77,793 | 784,154 | ||||
1,576,795 | ||||||
Total investment companies (Cost $92,730,774) | 96,025,795 | |||||
Total investments in securities (Cost $92,730,774) | 99.05 % | 96,025,795 | ||||
Other assets and liabilities, net | 0.95 | 917,278 | ||||
Total net assets | 100.00 % | $96,943,073 | ||||
♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
The accompanying notes are an integral part of these financial statements.
Allspring Moderate Balanced Fund | 11
Portfolio of investments—May 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) on affiliated Underlying Funds | Net change in unrealized gains (losses) on affiliated Underlying Funds | Value, end of period | |
Investment companies | ||||||
Allspring Conservative Income Fund Institutional Class | $18,019,461 | $1,127,133 | $(4,494,272 ) | $(60,418 ) | $(28,042 ) | $14,563,862 |
Allspring Emerging Markets Equity Fund Class R6 | 963,943 | 93,684 | (202,403 ) | (40,611 ) | (21,972 ) | 792,641 |
Allspring Emerging Markets Equity Income Fund Class R6 | 994,083 | 99,732 | (194,568 ) | (7,076 ) | (108,017 ) | 784,154 |
$(108,105 ) | $(158,031 ) | $16,140,657 |
Shares, end of period | Dividends from affiliated Underlying Funds | |
Investment companies | ||
Allspring Conservative Income Fund Institutional Class | 1,478,565 | $486,190 |
Allspring Emerging Markets Equity Fund Class R6 | 33,206 | 11,300 |
Allspring Emerging Markets Equity Income Fund Class R6 | 77,793 | 26,925 |
$524,415 |
The accompanying notes are an integral part of these financial statements.
12 | Allspring Moderate Balanced Fund
Portfolio of investments—May 31, 2023
Transactions with the affiliated Master Portfolios were as follows:
% of ownership, beginning of period | % of ownership, end of period | Net realized gains (losses) on investments allocated from affiliated Master Portfolios | Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolios | Interest allocated from affiliated Master Portfolios | Dividends allocated from affiliated Master Portfolios | Affiliated Income Allocated from affiliated Master Portfolios | Value, end of period | |
Allspring C&B Large Cap Value Portfolio | 1.35 % | 1.41 % | $379,067 | $(560,828 ) | $74 | $86,778 | $2,531 | $3,571,327 |
Allspring Core Bond Portfolio | 0.20 | 0.18 | (620,429 ) | 217,276 | 292,680 | 0 | 7,282 | 8,189,797 |
Allspring Disciplined International Developed Markets Portfolio | 2.23 | 2.18 | (87,248 ) | 118,002 | 56 | 94,598 | 1,934 | 2,800,295 |
Allspring Disciplined Large Cap Portfolio | 3.61 | 3.75 | 465,625 | (375,826 ) | 173 | 148,271 | 5,145 | 8,118,858 |
Allspring Diversified Large Cap Growth Portfolio | 4.48 | 4.40 | 765,926 | (308,997 ) | 155 | 82,184 | 3,474 | 7,644,868 |
Allspring Emerging Growth Portfolio | 0.27 | 0.29 | 83,178 | (69,793 ) | 19 | 2,326 | 957 | 955,417 |
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 0.73 | 0.77 | (106,549 ) | 17,619 | 17 | 32,474 | 1,021 | 798,354 |
Allspring Factor Enhanced International Equity Portfolio | 0.22 | 0.22 | (77,078 ) | 65,011 | 18 | 31,454 | 915 | 928,478 |
Allspring Large Company Value Portfolio | 4.12 | 4.05 | (336,153 ) | (285,982 ) | 169 | 180,226 | 6,009 | 7,169,605 |
Allspring Managed Fixed Income Portfolio | 8.04 | 7.84 | (483,059 ) | (835,054 ) | 1,093,467 | 0 | 11,602 | 28,060,767 |
Allspring Real Return Portfolio | 2.24 | 2.03 | 39,011 | (358,576 ) | 209,167 | 16,153 | 1,612 | 4,292,542 |
Allspring Small Company Growth Portfolio | 0.14 | 0.13 | 39,597 | (15,942 ) | 20 | 4,163 | 977 | 963,320 |
Allspring Small Company Value Portfolio | 0.40 | 0.38 | (12,841 ) | (190,044 ) | 39 | 37,258 | 1,951 | 1,897,241 |
$49,047 | $(2,583,134 ) | $1,596,054 | $715,885 | $45,410 | $75,390,869 |
Futures contracts
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Long | ||||||
10-Year Euro BUND Index | 18 | 6-8-2023 | $2,582,363 | $2,617,630 | $35,267 | $0 |
TOPIX | 16 | 6-8-2023 | 2,377,082 | 2,441,486 | 64,404 | 0 |
E-Mini NASDAQ 100 Index | 13 | 6-16-2023 | 3,195,252 | 3,718,130 | 522,878 | 0 |
E-Mini Russell 1000 Growth Index | 14 | 6-16-2023 | 1,739,919 | 1,821,050 | 81,131 | 0 |
Japanese Yen Futures | 40 | 6-16-2023 | 3,749,100 | 3,600,000 | 0 | (149,100 ) |
10-Year U.S. Treasury Notes | 44 | 9-20-2023 | 5,024,676 | 5,036,625 | 11,949 | 0 |
Short | ||||||
2-Year Euro SCHATZ | (98 ) | 6-8-2023 | (11,028,926 ) | (11,063,930 ) | 0 | (35,004 ) |
E-Mini Russell 1000 Value Index | (23 ) | 6-16-2023 | (1,760,747 ) | (1,682,910 ) | 77,837 | 0 |
E-Mini S&P 500 Index | (16 ) | 6-16-2023 | (3,140,692 ) | (3,352,400 ) | 0 | (211,708 ) |
Euro STOXX 50 Index | (51 ) | 6-16-2023 | (2,358,220 ) | (2,298,852 ) | 59,368 | 0 |
$852,834 | $(395,812 ) |
The accompanying notes are an integral part of these financial statements.
Allspring Moderate Balanced Fund | 13
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in affiliated Master Portfolio, at value (cost $71,768,202) | $75,390,869 |
Investments in unaffiliated securities, at value (cost $4,719,247) | 4,494,269 |
Investments in affiliated Underlying Funds, at value (cost $16,243,325) | 16,140,657 |
Cash | 69,197 |
Cash at broker segregated for futures contracts | 816,937 |
Receivable for daily variation margin on open futures contracts | 122,788 |
Receivable for dividends | 54,475 |
Receivable for Fund shares sold | 52,233 |
Receivable from manager | 2,418 |
Receivable for investments sold | 2,086 |
Prepaid expenses and other assets | 55,655 |
Total assets | 97,201,584 |
Liabilities | |
Payable for daily variation margin on open futures contracts | 92,028 |
Payable for Fund shares redeemed | 62,648 |
Payable for investments purchased | 58,254 |
Administration fees payable | 13,328 |
Distribution fee payable | 2,812 |
Trustees’ fees and expenses payable | 504 |
Accrued expenses and other liabilities | 28,937 |
Total liabilities | 258,511 |
Total net assets | $96,943,073 |
Net assets consist of | |
Paid-in capital | $95,143,793 |
Total distributable earnings | 1,799,280 |
Total net assets | $96,943,073 |
Computation of net asset value and offering price per share | |
Net assets–Class A | $33,393,333 |
Shares outstanding–Class A1 | 1,785,052 |
Net asset value per share–Class A | $18.71 |
Maximum offering price per share – Class A2 | $19.85 |
Net assets–Class C | $4,393,146 |
Shares outstanding–Class C1 | 242,380 |
Net asset value per share–Class C | $18.13 |
Net assets–Administrator Class | $16,367,567 |
Shares outstanding–Administrator Class1 | 862,713 |
Net asset value per share–Administrator Class | $18.97 |
Net assets–Institutional Class | $42,789,027 |
Shares outstanding–Institutional Class1 | 2,250,135 |
Net asset value per share–Institutional Class | $19.02 |
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 Moderate Balanced Fund
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Interest allocated from affiliated Master Portfolios | $1,596,054 |
Dividends allocated from affiliated Master Portfolios (net of foreign withholding taxes of $24,234) | 715,885 |
Dividends from affiliated Underlying Funds | 524,415 |
Dividends from unaffiliated securities | 154,485 |
Affiliated income allocated from affiliated Master Portfolios | 45,410 |
Interest | 13,809 |
Expenses allocated from affiliated Master Portfolios | (392,151 ) |
Waivers allocated from affiliated Master Portfolios | 44,237 |
Total investment income | 2,702,144 |
Expenses | |
Management fee | 310,820 |
Administration fees | |
Class A | 69,600 |
Class C | 10,565 |
Administrator Class | 24,861 |
Institutional Class | 60,202 |
Shareholder servicing fees | |
Class A | 82,858 |
Class C | 12,545 |
Administrator Class | 39,861 |
Distribution fee | |
Class C | 37,633 |
Custody and accounting fees | 16,523 |
Professional fees | 48,377 |
Registration fees | 68,361 |
Shareholder report expenses | 18,873 |
Trustees’ fees and expenses | 21,807 |
Other fees and expenses | 1,725 |
Total expenses | 824,611 |
Less: Fee waivers and/or expense reimbursements | |
Fund-level | (228,941 ) |
Class A | (191 ) |
Administrator Class | (25,415 ) |
Institutional Class | (10,175 ) |
Net expenses | 559,889 |
Net investment income | 2,142,255 |
Realized and unrealized gains (losses) on investments | |
Net realized gains (losses) on | |
Investments allocated from affiliated Master Portfolios | 49,047 |
Affiliated Underlying Funds | (108,105 ) |
Unaffiliated securities | (624,424 ) |
Foreign currency and foreign currency translations | (2,443 ) |
Futures contracts | (755,909 ) |
Net realized losses on investments | (1,441,834 ) |
The accompanying notes are an integral part of these financial statements.
Allspring Moderate Balanced Fund | 15
Statement of operations—year ended May 31, 2023
Net change in unrealized gains (losses) on | |
Investments allocated from affiliated Master Portfolios | $(2,583,134 ) |
Affiliated Underlying Funds | (158,031 ) |
Unaffiliated securities | (84,233 ) |
Futures contracts | 431,563 |
Net change in unrealized gains (losses) on investments | (2,393,835 ) |
Net realized and unrealized gains (losses) on investments | (3,835,669 ) |
Net decrease in net assets resulting from operations | $(1,693,414 ) |
The accompanying notes are an integral part of these financial statements.
16 | Allspring Moderate Balanced Fund
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $2,142,255 | $1,488,209 | ||
Net realized gains (losses) on investments | (1,441,834 ) | 4,657,358 | ||
Net change in unrealized gains (losses) on investments | (2,393,835 ) | (14,729,750 ) | ||
Net decrease in net assets resulting from operations | (1,693,414 ) | (8,584,183 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class A | (1,151,963 ) | (3,868,924 ) | ||
Class C | (139,090 ) | (643,902 ) | ||
Administrator Class | (700,211 ) | (7,300,294 ) | ||
Institutional Class | (1,697,536 ) | (1,611,488 ) | ||
Total distributions to shareholders | (3,688,800 ) | (13,424,608 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class A | 310,013 | 5,806,889 | 194,763 | 4,339,052 |
Class C | 56,696 | 1,025,542 | 77,990 | 1,716,267 |
Administrator Class | 66,828 | 1,269,796 | 186,756 | 4,236,804 |
Institutional Class | 241,134 | 4,600,528 | 2,280,595 | 47,694,894 |
12,702,755 | 57,987,017 | |||
Reinvestment of distributions | ||||
Class A | 60,007 | 1,110,556 | 171,433 | 3,722,882 |
Class C | 7,711 | 139,090 | 30,756 | 643,772 |
Administrator Class | 36,951 | 692,619 | 330,130 | 7,273,495 |
Institutional Class | 90,222 | 1,697,536 | 72,918 | 1,611,488 |
3,639,801 | 13,251,637 | |||
Payment for shares redeemed | ||||
Class A | (325,414 ) | (6,089,533 ) | (289,386 ) | (6,396,781 ) |
Class C | (119,276 ) | (2,156,378 ) | (139,167 ) | (3,030,276 ) |
Administrator Class | (465,681 ) | (9,020,334 ) | (2,328,139 ) | (48,484,933 ) |
Institutional Class | (717,706 ) | (13,648,919 ) | (475,121 ) | (10,947,858 ) |
(30,915,164 ) | (68,859,848 ) | |||
Net increase (decrease) in net assets resulting from capital share transactions | (14,572,608 ) | 2,378,806 | ||
Total decrease in net assets | (19,954,822 ) | (19,629,985 ) | ||
Net assets | ||||
Beginning of period | 116,897,895 | 136,527,880 | ||
End of period | $96,943,073 | $116,897,895 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Moderate Balanced Fund | 17
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $19.65 | $23.45 | $20.87 | $20.35 | $22.73 |
Net investment income | 0.36 1 | 0.23 | 0.25 | 0.30 | 0.36 1 |
Net realized and unrealized gains (losses) on investments | (0.65 ) | (1.64 ) | 3.62 | 0.86 | 0.11 |
Total from investment operations | (0.29 ) | (1.41 ) | 3.87 | 1.16 | 0.47 |
Distributions to shareholders from | |||||
Net investment income | (0.33 ) | (0.20 ) | (0.24 ) | (0.35 ) | (0.42 ) |
Net realized gains | (0.32 ) | (2.19 ) | (1.05 ) | (0.29 ) | (2.43 ) |
Total distributions to shareholders | (0.65 ) | (2.39 ) | (1.29 ) | (0.64 ) | (2.85 ) |
Net asset value, end of period | $18.71 | $19.65 | $23.45 | $20.87 | $20.35 |
Total return2 | (1.38 )% | (6.93 )% | 18.90 % | 5.65 % | 2.68 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.27 % | 1.20 % | 1.24 % | 1.30 % | 1.31 % |
Net expenses | 1.04 % | 1.07 % | 1.09 % | 1.08 % | 1.12 % |
Net investment income | 1.91 % | 0.99 % | 0.93 % | 1.43 % | 1.65 % |
Supplemental data | |||||
Portfolio turnover rate3 | 96 % | 110 % | 119 % | 119 % | 191 % |
Net assets, end of period (000s omitted) | $33,393 | $34,201 | $39,005 | $31,334 | $30,132 |
* | Ratios include only the net expenses allocated from the affiliated Master Portfolios and do not include expenses from any other affiliated Underlying Funds. Net expenses allocated from the affiliated Master Portfolios included in the ratios were as follows: |
Year ended May 31, 2023 | 0.34% |
Year ended May 31, 2022 | 0.33% |
Year ended May 31, 2021 | 0.34% |
Year ended May 31, 2020 | 0.37% |
Year ended May 31, 2019 | 0.40% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the affiliated Underlying Funds and unaffiliated securities and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
18 | Allspring Moderate Balanced Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $19.04 | $22.78 | $20.30 | $19.80 | $22.20 |
Net investment income | 0.21 1 | 0.05 1 | 0.04 1 | 0.09 | 0.12 |
Net realized and unrealized gains (losses) on investments | (0.62 ) | (1.58 ) | 3.55 | 0.88 | 0.18 |
Total from investment operations | (0.41 ) | (1.53 ) | 3.59 | 0.97 | 0.30 |
Distributions to shareholders from | |||||
Net investment income | (0.18 ) | (0.02 ) | (0.06 ) | (0.18 ) | (0.27 ) |
Net realized gains | (0.32 ) | (2.19 ) | (1.05 ) | (0.29 ) | (2.43 ) |
Total distributions to shareholders | (0.50 ) | (2.21 ) | (1.11 ) | (0.47 ) | (2.70 ) |
Net asset value, end of period | $18.13 | $19.04 | $22.78 | $20.30 | $19.80 |
Total return2 | (2.13 )% | (7.60 )% | 18.01 % | 4.89 % | 1.90 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 2.01 % | 1.94 % | 1.99 % | 2.05 % | 2.06 % |
Net expenses | 1.79 % | 1.83 % | 1.84 % | 1.84 % | 1.87 % |
Net investment income | 1.14 % | 0.23 % | 0.19 % | 0.69 % | 0.89 % |
Supplemental data | |||||
Portfolio turnover rate3 | 96 % | 110 % | 119 % | 119 % | 191 % |
Net assets, end of period (000s omitted) | $4,393 | $5,658 | $7,463 | $7,935 | $8,509 |
* | Ratios include only the net expenses allocated from the affiliated Master Portfolios and do not include expenses from any other affiliated Underlying Funds. Net expenses allocated from the affiliated Master Portfolios included in the ratios were as follows: |
Year ended May 31, 2023 | 0.34% |
Year ended May 31, 2022 | 0.33% |
Year ended May 31, 2021 | 0.34% |
Year ended May 31, 2020 | 0.37% |
Year ended May 31, 2019 | 0.40% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the affiliated Underlying Funds and unaffiliated securities and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
Allspring Moderate Balanced Fund | 19
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $19.92 | $23.73 | $21.10 | $20.56 | $22.94 |
Net investment income | 0.41 1 | 0.27 1 | 0.38 | 0.35 1 | 0.41 1 |
Net realized and unrealized gains (losses) on investments | (0.66 ) | (1.64 ) | 3.59 | 0.88 | 0.12 |
Total from investment operations | (0.25 ) | (1.37 ) | 3.97 | 1.23 | 0.53 |
Distributions to shareholders from | |||||
Net investment income | (0.38 ) | (0.25 ) | (0.29 ) | (0.40 ) | (0.48 ) |
Net realized gains | (0.32 ) | (2.19 ) | (1.05 ) | (0.29 ) | (2.43 ) |
Total distributions to shareholders | (0.70 ) | (2.44 ) | (1.34 ) | (0.69 ) | (2.91 ) |
Net asset value, end of period | $18.97 | $19.92 | $23.73 | $21.10 | $20.56 |
Total return | (1.17 )% | (6.67 )% | 19.19 % | 5.94 % | 2.95 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.14 % | 1.11 % | 1.17 % | 1.22 % | 1.23 % |
Net expenses | 0.79 % | 0.83 % | 0.84 % | 0.83 % | 0.87 % |
Net investment income | 2.14 % | 1.19 % | 1.21 % | 1.69 % | 1.88 % |
Supplemental data | |||||
Portfolio turnover rate2 | 96 % | 110 % | 119 % | 119 % | 191 % |
Net assets, end of period (000s omitted) | $16,368 | $24,391 | $72,033 | $78,538 | $78,209 |
* | Ratios include only the net expenses allocated from the affiliated Master Portfolios and do not include expenses from any other affiliated Underlying Funds. Net expenses allocated from the affiliated Master Portfolios included in the ratios were as follows: |
Year ended May 31, 2023 | 0.34% |
Year ended May 31, 2022 | 0.33% |
Year ended May 31, 2021 | 0.34% |
Year ended May 31, 2020 | 0.37% |
Year ended May 31, 2019 | 0.41% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the affiliated Underlying Funds and unaffiliated securities and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
20 | Allspring Moderate Balanced Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Institutional Class | 2023 | 2022 | 2021 | 2020 | 20191 |
Net asset value, beginning of period | $19.97 | $23.78 | $21.14 | $20.60 | $23.24 |
Net investment income | 0.43 2 | 0.31 2 | 0.42 | 0.37 2 | 0.37 2 |
Net realized and unrealized gains (losses) on investments | (0.66 ) | (1.66 ) | 3.58 | 0.88 | (0.12 ) |
Total from investment operations | (0.23 ) | (1.35 ) | 4.00 | 1.25 | 0.25 |
Distributions to shareholders from | |||||
Net investment income | (0.40 ) | (0.27 ) | (0.31 ) | (0.42 ) | (0.46 ) |
Net realized gains | (0.32 ) | (2.19 ) | (1.05 ) | (0.29 ) | (2.43 ) |
Total distributions to shareholders | (0.72 ) | (2.46 ) | (1.36 ) | (0.71 ) | (2.89 ) |
Net asset value, end of period | $19.02 | $19.97 | $23.78 | $21.14 | $20.60 |
Total return3 | (1.04 )% | (6.61 )% | 19.35 % | 6.02 % | 1.72 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 0.93 % | 0.88 % | 0.91 % | 0.97 % | 0.98 % |
Net expenses | 0.69 % | 0.72 % | 0.74 % | 0.74 % | 0.75 % |
Net investment income | 2.25 % | 1.43 % | 1.27 % | 1.78 % | 2.15 % |
Supplemental data | |||||
Portfolio turnover rate4 | 96 % | 110 % | 119 % | 119 % | 191 % |
Net assets, end of period (000s omitted) | $42,789 | $52,647 | $18,028 | $10,504 | $8,871 |
* | Ratios include only the net expenses allocated from the affiliated Master Portfolios and do not include expenses from any other affiliated Underlying Funds. Net expenses allocated from the affiliated Master Portfolios included in the ratios were as follows: |
Year ended May 31, 2023 | 0.34% |
Year ended May 31, 2022 | 0.33% |
Year ended May 31, 2021 | 0.34% |
Year ended May 31, 2020 | 0.37% |
Year ended May 31, 20191 | 0.38% |
1 | For the period from July 31, 2018 (commencement of class operations) to May 31, 2019 |
2 | Calculated based upon average shares outstanding |
3 | Returns for periods of less than one year are not annualized. |
4 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the affiliated Underlying Funds and unaffiliated securities and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
Allspring Moderate Balanced Fund | 21
Notes to financial statements
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 Moderate Balanced Fund (the “Fund”) which is a diversified series of the Trust.
The Fund is a fund-of-funds that invests in various affiliated mutual funds (“Underlying Funds”) employing a multi-asset, multi-style investment approach designed to reduce the price and return volatility of the Fund and to provide more consistent returns. The Fund may also invest directly in securities. The Underlying Funds incur separate expenses in seeking to achieve their investment objectives. Investments in affiliated Underlying Funds may also include investments in one or more separate diversified portfolios (collectively, the “affiliated Master Portfolios”) of Allspring Master Trust, a registered open-end management investment company. Each affiliated Master Portfolio directly acquires portfolio securities and the Fund acquires an indirect interest in those securities. The Fund accounts for its investments in the affiliated Master Portfolios as partnership investments and records on a daily basis its share of the affiliated Master Portfolio’s income, expense and realized and unrealized gains and losses. The financial statements of the affiliated Master Portfolios are presented in separate financial statements and may be obtained free of charge by contacting Investor Services or by visiting the SEC website at sec.gov. The financial statements of the affiliated Master Portfolios are filed with the SEC under Allspring Master Trust. The financial statements for all other affiliated Underlying Funds are also publicly available on the SEC website at sec.gov.
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 Funds may deviate from this calculation time under unusual or unexpected circumstances.
Investments in the affiliated Master Portfolios are valued daily based on the Fund’s proportionate share of each affiliated Master Portfolio’s net assets, which are also valued daily.
Equity securities, exchange-traded funds 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 underlying mutual funds (other than those listed on a foreign or domestic exchange or market) are valued at net asset per share as reported by the Underlying Funds as of the close of the regular trading on the New York Stock Exchange on each day the exchange is open for trading.
Investments which are not valued using any of 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.
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.
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 and on a specified date. The Fund may buy and sell futures contracts in order to gain exposure to, or protect against, changes in
22 | Allspring Moderate Balanced Fund
Notes to financial statements
interest rates, security values and foreign exchange rates and is subject to interest rate risk, equity price risk and foreign currency 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 received 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.
Investment transactions, income and expenses
Investments in the affiliated Master Portfolios are recorded on a trade date basis. The Fund records daily its proportionate share of the affiliated Master Portfolio’s income, expenses and realized and unrealized gains or losses. The Fund also accrues its own expenses.
Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.
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 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 May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $93,098,413 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $3,784,943 |
Gross unrealized losses | (400,539 ) |
Net unrealized gains | $3,384,404 |
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. At May 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 |
$(201 ) | $201 |
As of May 31, 2023, the Fund had capital loss carryforwards which consist of $2,429,656 in short-term capital losses
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.
Allspring Moderate Balanced Fund | 23
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 May 31, 2023:
Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
Assets | ||||
Investments in: | ||||
Investment companies | $20,634,926 | $0 | $0 | $20,634,926 |
Investments measured at net asset value* | 75,390,869 | |||
20,634,926 | 0 | 0 | 96,025,795 | |
Futures contracts | 852,834 | 0 | 0 | 852,834 |
Total assets | $21,487,760 | $0 | $0 | $96,878,629 |
Liabilities | ||||
Futures contracts | $395,812 | $0 | $0 | $395,812 |
Total liabilities | $395,812 | $0 | $0 | $395,812 |
* | Investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been categorized in the fair value hierarchy. The fair value amount presented in the table is intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Statement of Assets and Liabilities. The Fund’s investments in the affiliated Master Portfolios are valued at $75,390,869. Each affiliated Master Portfolio does not have a redemption period notice, can be redeemed daily and does not have any unfunded commitments. |
Futures contracts are reported at their cumulative unrealized gains (losses) at measurement date as reported in the tables 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.
For the year ended May 31, 2023, the Fund did not have any transfers into/out of Level 3.
24 | Allspring Moderate Balanced Fund
Notes to financial statements
The investment objective of each affiliated Master Portfolio is as follows:
Affiliated Master Portfolio | Investment objective |
Allspring C&B Large Cap Value Portfolio | Seeks maximum long-term total return (current income and capital appreciation), consistent with minimizing risk to principal |
Allspring Core Bond Portfolio | Seeks total return, consisting of income and capital appreciation |
Allspring Disciplined International Developed Markets Portfolio | Seeks long-term capital appreciation |
Allspring Disciplined Large Cap Portfolio | Seeks long-term capital appreciation |
Allspring Diversified Large Cap Growth Portfolio | Seeks long-term capital appreciation |
Allspring Emerging Growth Portfolio | Seeks long-term capital appreciation |
Allspring Factor Enhanced Emerging Markets Equity Portfolio | Seeks long-term capital appreciation |
Allspring Factor Enhanced International Equity Portfolio | Seeks long-term capital appreciation |
Allspring Large Company Value Portfolio | Seeks long-term capital appreciation |
Allspring Managed Fixed Income Portfolio | Seeks consistent fixed-income return |
Allspring Real Return Portfolio | Seeks returns that exceed the rate of inflation over the long-term |
Allspring Small Company Growth Portfolio | Seeks long-term capital appreciation |
Allspring Small Company Value Portfolio | Seeks long-term capital appreciation |
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 | 0.300 % |
Next $500 million | 0.280 |
Next $2 billion | 0.260 |
Next $2 billion | 0.240 |
Next $5 billion | 0.230 |
Over $10 billion | 0.220 |
For the year ended May 31, 2023, the management fee was equivalent to an annual rate of 0.30% 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, 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 0.10% and declining to 0.05% as the average daily net assets of the Fund increase.
Allspring Funds Management also serves as the adviser to each affiliated Master Portfolio and is entitled to receive a fee from each affiliated Master Portfolio for those services.
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
Allspring Moderate Balanced Fund | 25
Notes to financial statements
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. Net expenses from the affiliated Master Portfolios are included in the expense caps. Allspring Funds Management has contractually committed through September 30, 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 May 31, 2023, the contractual expense caps are as follows:
EXPENSE RATIO CAPS | |
Class A | 1.15 % |
Class C | 1.90 |
Administrator Class | 0.90 |
Institutional Class | 0.80 |
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 May 31, 2023, Allspring Funds Distributor received $3,343 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 May 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.
5.
INVESTMENT PORTFOLIO TRANSACTIONS
The Fund seeks to achieve its investment objective by investing in various affiliated Master Portfolios. Purchases and sales related to these investments have been calculated by aggregating the results of multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio at the end of the period by the corresponding affiliated Master Portfolio’s purchases and sales. Purchase and sales in affiliated Underlying Funds and unaffiliated securities in which the Fund invests are actual purchases and sales of those investments. Purchases and sales of investments, excluding short-term securities, for the year ended May 31, 2023 were as follows:
Purchases at cost | Sales proceeds | ||
U.S. government | Non-U.S. government | U.S. government | Non-U.S. government |
$26,097,790 | $71,897,257 | $26,533,695 | $83,226,153 |
6.
DERIVATIVE TRANSACTIONS
During the year ended May 31, 2023, the Fund entered into futures contracts to gain market exposure to certain asset classes consistent with its asset allocation strategy. The Fund had an average notional amount of $18,910,144 in long futures contracts and $15,380,165 in short futures contracts during the year ended May 31, 2023.
26 | Allspring Moderate Balanced Fund
Notes to financial statements
A summary of the location of derivative instruments on the financial statements by primary risk exposure is outlined in the following tables.
The fair value of derivative instruments as of May 31, 2023 by primary risk type on the Statement of Assets and Liabilities was as follows for the Fund:
Interest rate risk | Equity risk | Foreign currency risk | Total | |
Asset derivatives | ||||
Futures contracts | $47,216 * | $805,618 * | $0 * | $852,834 |
Liability derivatives | ||||
Futures contracts | $35,004 * | $211,708 * | $149,100 * | $395,812 |
* | Amount represents the cumulative unrealized gains (losses) as reported in the table following the Portfolio of Investments. For futures contracts, only the current day’s variation margin as of May 31, 2023 is reported separately on the Statement of Assets and Liabilities. |
The effect of derivative instruments on the Statement of Operations for the year ended May 31, 2023 was as follows:
Interest rate risk | Equity risk | Foreign currency risk | Total | |
Net realized gains (losses) on derivatives | ||||
Futures contracts | $1,014 | $(303,551 ) | $(453,372 ) | $(755,909 ) |
Net change in unrealized gains (losses) on derivatives | ||||
Futures contracts | $8,284 | $600,624 | $(177,345 ) | $431,563 |
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 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 May 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 May 31, 2023 and May 31, 2022 were as follows:
Year ended May 31 | ||
2023 | 2022 | |
Ordinary income | $1,909,185 | $8,410,470 |
Long-term capital gain | 1,779,615 | 5,014,138 |
As of May 31, 2023, the components of distributable earnings on a tax basis were as follows:
Undistributed ordinary income | Unrealized gains | Capital loss carryforward |
$844,532 | $3,384,404 | $(2,429,656 ) |
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 Moderate Balanced 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 Moderate Balanced Fund (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of May 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 period 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 May 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 period 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 May 31, 2023, by correspondence with the custodian, transfer agents 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
July 27, 2023
28 | Allspring Moderate Balanced Fund
Other information (unaudited)
Other information
Tax information
For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 29% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended May 31, 2023.
Pursuant to Section 852 of the Internal Revenue Code, $1,779,615 was designated as a 20% rate gain distribution for the fiscal year ended May 31, 2023.
Pursuant to Section 854 of the Internal Revenue Code, $737,344 of income dividends paid during the fiscal year ended May 31, 2023 has been designated as qualified dividend income (QDI).
For the fiscal year ended May 31, 2023, $1,061,763 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 May 31, 2023, 11% of the ordinary income distributed was derived from interest on U.S. government securities.
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 Moderate Balanced 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 128 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 |
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 |
1
The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by call 1-800-222-8222 or by visiting the website at allspringglobal.com.
30 | Allspring Moderate Balanced 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 |
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 Moderate Balanced Fund | 31
Other information (unaudited)
Officers1
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 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 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 Moderate Balanced Fund
Other information (unaudited)
Board consideration of investment management and sub-advisory agreements:
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (the “Board”) of Allspring Funds Trust (the “Trust”) must determine annually whether to approve the continuation of the Trust’s investment management and sub-advisory agreements. In this regard, at a Board meeting held on May 15-17, 2023 (the “Meeting”), the Board, all the members of which have no direct or indirect interest in the investment management and sub-advisory agreements and are not “interested persons” of the Trust, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for the Allspring Moderate Balanced Fund (the “Fund”): (i) an investment management agreement (the “Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Allspring Global Investments, LLC (the “Sub-Adviser”), an affiliate of Allspring Funds Management. The Management Agreement and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
At the Meeting, the Board considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at a Board meeting held in April 2023, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Board has adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Board in the discharge of its duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
The Board noted that it initially approved the Advisory Agreements at a Board meeting held in May 2021, each for a two-year term, in advance of the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC,1 a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. (the “Transaction”). The Trustees also noted that, while they did not specifically consider the continuation of the Advisory Agreements in 2022 as a result of the two-year term that was approved in 2021, the Trustees received and considered certain information at a Board meeting held in April 2022 that was applicable to the Advisory Agreements, including an overview and financial review of the Allspring Global Investments business, information regarding certain ancillary agreements that were approved by the Board at the April 2022 Board meeting, and comparative data regarding Fund fees and expenses.
In providing information to the Board, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Board’s annual contract renewal process earlier in 2023. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Board considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Board reviewed reports of Allspring Funds Management at each of its quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Board and the teams mentioned above confer with portfolio managers at various times throughout the year. The Board did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term. The Board considered the approval of the Advisory Agreements for the Fund as part of its consideration of agreements for funds across the complex, but its approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Board in support of its approvals.
Nature, Extent, and Quality of Services
The Board received and considered various information regarding the nature, extent, and quality of services provided to the Fund by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business. The Board also considered information about retention arrangements with respect to key personnel of Allspring Global Investments that were put in place in connection with the Transaction. The Board took into account information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the Transaction under a transition services agreement and the anticipated timeline for exiting the transition services agreement. In addition, the Board received and considered information about the full range of services provided to the Fund by Allspring Funds Management and its affiliates.
1
The trade name for the asset management firm that includes Allspring Funds Management and the Sub-Adviser is “Allspring Global Investments.”
Allspring Moderate Balanced Fund | 33
Other information (unaudited)
The Board considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Fund. The Board evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
The Board further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Board received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, and Allspring Funds Management’s role as administrator of the Fund’s liquidity risk management program, and the Fund’s derivatives risk management program. The Board also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund Investment Performance and Expenses
The Board considered the investment performance results for the Fund over various time periods ended December 31, 2022. The Board considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to the Fund (the “Universe”), and in comparison to the Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the mutual funds in the performance Universe. The Board noted that the investment performance of the Fund (Administrator Class) was higher than the average investment performance of the Universe for the one- and ten-year periods under review, and in range of the average investment performance of the Universe for the three- and five-year periods under review. The Board also noted that the investment performance of the Fund was higher than the investment performance of its benchmark index, the Moderate Balanced Blended Index, for the three- and ten-year periods under review, in range of the average investment performance of its benchmark index for the one-year period under review and lower than the average investment performance of its benchmark index for the five-year period under review.
The Board also received and considered information regarding the Fund’s net operating expense ratios and their various components, including actual management fees, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Board considered these ratios in comparison to the median ratios of funds in class-specific expense groups that were determined by Broadridge to be similar to the Fund (the “Groups”). The Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Groups and an explanation of how funds comprising expense groups and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Board noted that the net operating expense ratios of the Fund were lower than the median net operating expense ratios of the expense Groups for all share classes, except that the net operating expense ratios of the Fund were in range of the median net operating expense ratios of the expense Groups for the Class A shares. The Board noted that Allspring Funds Management had agreed to reduce the net operating expense caps for the Fund’s Class A shares.
The Board took into account the Fund’s investment performance and expense information provided to it among the factors considered in deciding to re-approve the Advisory Agreements.
Investment Management and Sub-Advisory Fee Rates
The Board reviewed and considered the contractual fee rates payable by the Fund to Allspring Funds Management under the Management Agreement, as well as the contractual fee rates payable by the Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which include, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rates”). The Board also reviewed and considered the contractual investment sub-advisory fee rates that are payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services. It was noted that advisory fee waivers, if any, are at the fund level and not class level.
Among other information reviewed by the Board was a comparison of the Fund’s Management Rates with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Board noted that the Management Rates of the Fund were higher than the sum of these average rates for the Fund’s expense Groups for all share classes, except that the Management Rates of the fund were in range of the sum of these average rates for the Fund’s expense Groups for the Institutional Class.
The Board also received and considered information about the portion of the total management fee that was retained by Allspring Funds Management after payment of the fee to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of this amount, the Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services. Given the affiliation between Allspring Funds Management and the Sub-Adviser, the Board ascribed limited relevance to the allocation of fees between them.
The Board also received and considered information about the nature and extent of services offered and fee rates charged by Allspring Funds Management and the Sub-Adviser to other types of clients with investment strategies similar to those of the Fund. In this regard, the Board received information about the significantly greater scope of services, and compliance, reporting and other legal burdens and risks of managing proprietary mutual funds compared with those associated with managing assets of other types of clients, including third-party sub-advised fund clients and non-mutual fund clients such as institutional separate accounts.
34 | Allspring Moderate Balanced Fund
Other information (unaudited)
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board determined that the compensation payable to Allspring Funds Management under the Management Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
Profitability
The Board received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole. The Board noted that the Sub-Adviser’s profitability information with respect to providing services to the Fund and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses and differences in how Allspring Global Investments calculates its pre-tax profit metric versus the methodology used when Allspring Funds Management was part of Wells Fargo. It was noted that the impact of such differences had only minor impact on the financial results presented. Among other things, the Board noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Based on its review, the Board did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Fund to be at a level that would prevent it from approving the continuation of the Advisory Agreements.
Economies of Scale
The Board received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Fund, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with Fund shareholders. The Board noted the existence of breakpoints in the Fund’s management fee structure, which operate generally to reduce the Fund’s expense ratios as the Fund grows in size, and the size of the Fund in relation to such breakpoints. The Board considered that in addition to management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways, including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
The Board concluded that Allspring Funds Management’s arrangements with respect to the Fund, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Fund and its shareholders.
Other Benefits to Allspring Funds Management and the Sub-Adviser
The Board received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, as a result of their relationships with the Fund. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Fund and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Fund. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it.
The Board also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser and fees earned in the past by Allspring Funds Management and the Sub-Adviser from managing a private investment vehicle for the fund complex’s securities lending collateral.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board did not find that any ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, were unreasonable.
Conclusion
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term.
Allspring Moderate Balanced Fund | 35
Other information (unaudited)
Liquidity risk management program
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Allspring Funds Trust (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) on behalf of each of its series (other than the series that operate as money market funds), including the Fund, which is reasonably designed to assess and manage the Fund’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund. The Trust’s Board of Trustees (the “Board”) previously approved the designation of Allspring Funds Management, LLC (“Allspring Funds Management”), the Fund’s investment manager, to administer the Program, and Allspring Funds Management has established a Liquidity Risk Management Council (the “Council”) composed of personnel from multiple departments within Allspring Funds Management and its affiliates to assist Allspring Funds Management in the administration of the Program.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent the Fund does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if the Fund has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s “highly liquid investments” below its HLIM; and (6) periodic reporting to the Board.
At a meeting of the Board held on May 16-17, 2023, the Board received and reviewed a written report (the “Report”) from Allspring Funds Management that, among other things, addressed the operation of the Program and assessed its adequacy and effectiveness for the period from January 1, 2022 through December 31, 2022 (the “Reporting Period”). The Report noted significant liquidity events impacting the Funds related to extended foreign market holidays as well as the difficulty of trading and settlement of most Russia-related securities due to sanctions activity. The Report noted that there were no material changes to the Program during the Reporting Period.
Allspring Funds Management determined in the Report that the Program has been implemented and operates effectively to manage the Fund’s, including the Fund’s, liquidity risk, and Allspring Funds Management continues to believe that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s liquidity developments.
There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other risks to which an investment in the Fund may be subject.
36 | Allspring Moderate Balanced 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.
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-06072023-iekwcnps 07-23
AR1854 05-23
AR1854 05-23
Contents
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The views expressed and any forward-looking statements are as of May 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 Real Return Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Real Return Fund for the 12-month period that ended May 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. The market was focused on persistently high inflation 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. Markets received a boost in December with the removal of China’s strict COVID-19 lockdowns. In March 2023, a new wave of market anxiety resulted from several bank failures and unease over the possibility of more rate hikes. However, investors regained confidence and markets finished the period in relative calm.
For the 12-month period, stocks and bonds—both domestic U.S. and global—had mixed results. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 2.92%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 lost 1.41%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a return of -8.49%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -2.14%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 6.49%, the Bloomberg Municipal Bond Index6 gained 0.49%, and the ICE BofA U.S. High Yield Index7 returned -0.09%.
High inflation and central bank rate hikes rocked markets.
In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Federal Reserve (Fed) raised its short-term rate by 0.75% in June. Meanwhile, the U.S. unemployment rate remained historically low 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 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, 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.
“ In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring 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 the 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.
2 | Allspring Real Return Fund
Letter to shareholders (unaudited)
August was yet another broadly challenging month for financial markets. 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 was the resilient U.S. jobs 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.
In September, all asset classes suffered further 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. 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 increasing 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 declining overall in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever, with generally flat 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 wound 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.
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 had 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 (ECB) both raised rates by 0.50%.
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 Real Return Fund | 3
Letter to shareholders (unaudited)
“ 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 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 banking industry turmoil created an additional challenge for central banks in balancing inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. 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.
Economic data released in April pointed to global resilience, as Purchasing Managers Indexes1 in the U.S., U.K., and eurozone beat expectations, and China reported first-quarter annualized economic growth of 4.5%. Despite banking industry stress, developed market stocks had monthly gains. The U.S. labor market remained strong, with a 3.5% jobless rate and monthly payroll gains above 200,000. However, uncertainty and inflationary concerns weighed on investors in the U.S. and abroad.
May was marked by a divergence between expanding activity in services and an overall contraction in manufacturing activity in the U.S., U.K., and eurozone. Core inflation remained elevated in the U.S. and Europe, despite the ongoing efforts of the Fed and ECB, which included rate hikes of 0.25% by both in May. Stubborn inflation and the resilient U.S. labor market led to expectations of further interest rate hikes, overall monthly declines across bond indexes, and mixed results for stocks in May. Investor worries over a U.S. debt ceiling impasse were modest, and market confidence was buoyed by a deal in late May to avert a potential U.S. debt default.
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 Real Return Fund
Letter to shareholders (unaudited)
Notice to Shareholders |
At a meeting held on May 16-17, 2023, the Board of Trustees approved a number of changes to the principal investment strategy of the Real Return Portfolio, the master portfolio in which the Fund invests substantially all of its assets. These changes include: |
• A reduction in the amount the Real Return Portfolio invests in fixed income securities, from a minimum of 80% to a maximum of 70%; |
• An increase in the amount the Real Return Portfolio may invest in equity securities, from a maximum of 20% to a maximum of 70%; |
• The introduction of a Cayman subsidiary, in which the Portfolio may invest up to 25% of its assets in order to gain exposure to commodity investments; |
• The incorporation of certain derivatives overlay strategies to attempt to manage short-term volatility, mitigate risk and/or improve returns under certain market conditions; |
• The addition of Allspring Global Investments (UK) Limited as an additional sub-adviser to the Real Return Portfolio. |
These changes are expected to become effective on or about December 1, 2023. |
Notice to Shareholders |
Beginning in July 2024, the Fund will be required by the Securities and Exchange Commission to send shareholders a paper copy of a new tailored shareholder report in place of the full shareholder report that you are now receiving. The tailored shareholder report will contain concise information about the Fund, including certain expense and performance information and fund statistics. If you wish to receive this new tailored shareholder report electronically, please follow the instructions on the back cover of this report. |
Other information that is currently included in the shareholder report, such as the Fund’s financial statements, will be available online and upon request, free of charge, in paper or electronic format. |
Allspring Real Return Fund | 5
Performance highlights (unaudited)
Performance highlights
Investment objective | The Fund seeks returns that exceed the rate of inflation over the long-term. |
Manager | Allspring Funds Management, LLC |
Subadviser for the affiliated master portfolio* | Allspring Global Investments, LLC |
Portfolio managers | Kandarp R. Acharya, CFA, FRM, Petros N. Bocray, CFA, FRM, Michael Bradshaw, CFA, Travis L. Keshemberg, CFA, CIPM, FRM, Garth B. Newport, CFA, Michael Schueller, CFA, Michal Stanczy |
Average annual total returns (%) as of May 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 | Net2 | |
Class A (IPBAX) | 2-28-2003 | -7.46 | 1.68 | 1.33 | -3.10 | 2.62 | 1.80 | 1.36 | 0.77 |
Class C (IPBCX) | 2-28-2003 | -4.89 | 1.85 | 1.19 | -3.89 | 1.85 | 1.19 | 2.11 | 1.52 |
Class R6 (IPBJX)3 | 10-31-2016 | – | – | – | -2.68 | 3.03 | 2.16 | 0.69 | 0.40 |
Administrator Class (IPBIX) | 2-28-2003 | – | – | – | -2.87 | 2.82 | 2.02 | 1.01 | 0.60 |
Institutional Class (IPBNX)4 | 10-31-2016 | – | – | – | -2.83 | 2.94 | 2.11 | 0.74 | 0.45 |
Bloomberg U.S. TIPS Index5 | – | – | – | – | -4.20 | 2.64 | 1.75 | – | – |
CPI6 | – | – | – | – | 4.05 | 3.87 | 2.70 | – | – |
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 4.50%. 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 September 30, 2023 (September 30, 2024 for Class A and Class C), to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.77% for Class A, 1.52% for Class C, 0.40% for Class R6, 0.60% for Administrator Class and 0.45% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any) from funds in which the affiliated master portfolio invests, and extraordinary expenses are excluded from the expense caps. Net expenses from the affiliated master portfolio are included in 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 Administrator Class shares, and is not adjusted to reflect the Class R6 expenses. If these expenses had been included, returns for the Class R6 shares would be higher. |
4 | 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. |
5 | The Bloomberg U.S. Treasury Inflation-Protected Securities (TIPS) Index is an index of inflation-indexed-linked U.S. Treasury securities. You cannot invest directly in an index. |
6 | 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. |
* | The Fund is a feeder fund in a master-feeder structure that invests substantially all of its assets in a single affiliated master portfolio of the Allspring Master Trust with a substantially identical investment objective and substantially similar investment strategies. References to the investment activities of the Fund are intended to refer to the investment activities of the affiliated master portfolio in which it invests. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. | |
6 | Allspring Real Return Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of May 31, 20231 |
1 | The chart compares the performance of Class A shares for the most recent ten years with the Bloomberg U.S. TIPS Index and CPI. 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 4.50%. |
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. Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. High-yield securities have a greater risk of default and tend to be more volatile than higher-rated debt securities. Loans are subject to risks similar to those associated with other below-investment-grade bond investments, such as credit risk (for example, risk of issuer default), below-investment-grade bond risk (for example, risk of greater volatility in value), and risk that the loan may become illiquid or difficult to price. The use of derivatives may reduce returns and/or increase volatility. Foreign investments are especially volatile and can rise or fall dramatically due to differences in the political and economic conditions of the host country. These risks are generally intensified in emerging markets. Securities issued by U.S. government agencies or government-sponsored entities may not be guaranteed by the U.S. Treasury. This fund is exposed to mortgage- and asset-backed securities risk and small-company securities risk. Consult the Fund’s prospectus for additional information on these and other risks.
Allspring Real Return Fund | 7
Performance highlights (unaudited)
MANAGER’S DISCUSSION
Fund highlights
•The Fund outperformed its benchmark, the Bloomberg U.S. Treasury Inflation-Protected Securities (TIPS) Index, for the 12-month period that ended May 31, 2023.
•Strong relative performance from the underlying investment sleeves had the largest positive impact on relative performance.
•Poor absolute performance from the investment in TIPS was the largest detractor from performance.
Slow growth, rising rates lead to muted market returns.
The trailing 12-month period featured slowing economic growth, rising interest rates, persistently high inflation, and geopolitical uncertainty. The broad equity market posted a small gain despite volatile markets while bonds posted losses over the period.
The 12-month period that ended May 31, 2023, saw a small gain in broad U.S. equity markets, as illustrated by the Russell 3000 Index’s* return of +2.03%. Broad foreign markets did worse, as reflected by the MSCI ACWI ex USA Index (Net)’s** return of -1.41%. While these return numbers seem modest, they reflect a recovery from some severe double-digit declines. The broad U.S. fixed income market, as represented by the Bloomberg U.S. Aggregate Bond Index***, posted a return of -2.14%. Inflation-sensitive bonds experienced worse returns, as represented by the Bloomberg U.S. TIPS Index’s return of -4.20%. Commodity prices moved significantly lower as the Bloomberg Commodity Index† declined 22.48%.
Ten largest holdings (%) as of May 31, 20231 | |
TIPS, 0.13%, 4-15-2025 | 4.09 |
TIPS, 0.13%, 4-15-2026 | 2.85 |
TIPS, 0.13%, 1-15-2032 | 2.43 |
TIPS, 0.13%, 4-15-2027 | 2.36 |
TIPS, 0.63%, 7-15-2032 | 2.34 |
TIPS, 0.63%, 1-15-2026 | 2.28 |
TIPS, 0.13%, 1-15-2031 | 2.14 |
TIPS, 0.13%, 1-15-2030 | 2.12 |
TIPS, 0.13%, 10-15-2024 | 1.99 |
TIPS, 1.63%, 10-15-2027 | 1.97 |
1 | Each holding represents the Fund’s allocable portion of the affiliated master portfolio security. Figures represent each holding as a percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
Few changes in the underlying portfolio.
There were no material changes in the portfolio over the trailing 12 months.
The Fund uses a multi-asset-class strategy to target inflation protection.
During the 12-month period, we maintained allocations to TIPS as well as other inflation-sensitive sectors, such as real estate investment trusts (REITs), short-term high yield bonds, and inflation-sensitive equities. We used this multi-asset-class strategy to target greater inflation protection and real returns than a traditional inflation-hedged strategy might while seeking to achieve similar levels of volatility.
The largest allocation within the Fund is our investment in U.S. TIPS. Due to some duration positioning, this sleeve outperformed its benchmark by about 20 basis points (bps; 100 bps equal 1.00%). The other inflation-sensitive assets also did well. Three of four sleeves outperformed the Bloomberg U.S. TIPS Index outright while all four outperformed their underlying style-specific benchmarks by between 41 bps and 1,096 bps.
Portfolio allocation as of May 31, 20231 |
1 | Figures represent the portfolio allocation of the affiliated master portfolio as a percentage of the long-term investments of the affiliated master portfolio. Allocations are subject to change and may have changed since the date specified. |
*
The Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index.
**
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. 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.
†
The Bloomberg Commodity Index (BCOM) provides broad-based exposure to commodities, and no single commodity or commodity sector dominates the index. Rather than being driven by micro-economic events affecting one commodity market or sector, the diversified commodity exposure of BCOM potentially reduces volatility in comparison with non-diversified commodity investments. You cannot invest directly in an index.
8 | Allspring Real Return Fund
Performance highlights (unaudited)
Looking ahead, we are still somewhat guarded.
While U.S. lending standards are tightening and the impact of higher rates is just starting to be felt within the banking sector, the contagion from bank failures in the U.S. has been limited so far. The Federal Reserve (Fed) is likely to be more data dependent from this point forward and the pattern of consistently hiking every quarter should end. However, with real yields on the rise and the U.S. dollar stabilizing, the combination of further Fed balance sheet shrinkage and tighter fiscal policy affected the debt limit negotiations should put downward pressure on growth. The household sector balance sheet remains healthy and supported by a strong labor
market. Negative real wages and fading government support are likely to lead to lower spending going forward.
Our base case is that we have an early-onset recession, with the first quarter of 2023 being the peak of economic activity. It is likely that the second quarter will show sequential weakness. Credit spreads remain wider, the yield curve remains inverted, and the housing recession continues. The market continues to expect meaningful rate cuts in the second half of this year. This is likely to put pressure on equity and bond valuations. We believe that inflation will remain persistent, and we believe the Fund is well positioned for such an environment.
Allspring Real Return Fund | 9
Fund expenses (unaudited)
Fund expenses
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 December 1, 2022 to May 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 the 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 12-1-2022 | Ending account value 5-31-2023 | Expenses paid during the period1, 2 | Annualized net expense ratio2 | |
Class A | ||||
Actual | $1,000.00 | $1,000.06 | $3.89 | 0.78 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.04 | $3.93 | 0.78 % |
Class C | ||||
Actual | $1,000.00 | $1,000.01 | $7.63 | 1.53 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,017.30 | $7.70 | 1.53 % |
Class R6 | ||||
Actual | $1,000.00 | $1,000.08 | $1.99 | 0.40 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,022.94 | $2.02 | 0.40 % |
Administrator Class | ||||
Actual | $1,000.00 | $1,000.07 | $2.99 | 0.60 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.94 | $3.02 | 0.60 % |
Institutional Class | ||||
Actual | $1,000.00 | $1,000.07 | $2.24 | 0.45 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,022.69 | $2.27 | 0.45 % |
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).
2 Amounts reflect net expenses allocated from the affiliated Master Portfolio in which the Fund invests.
10 | Allspring Real Return Fund
Portfolio of investments—May 31, 2023
Portfolio of investments
Value | ||||||
Investment companies: 99.96% | ||||||
Affiliated master portfolio: 99.96% | ||||||
Allspring Real Return Portfolio | $79,762,485 | |||||
Total investment companies (Cost $83,976,426) | 79,762,485 | |||||
Total investments in securities (Cost $83,976,426) | 99.96 % | 79,762,485 | ||||
Other assets and liabilities, net | 0.04 | 27,933 | ||||
Total net assets | 100.00 % | $79,790,418 | ||||
Transactions with the affiliated Master Portfolio were as follows:
% of ownership, beginning of period | % of ownership, end of period | Net realized gains (losses) on investments allocated from affiliated Master Portfolio | Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolio | Interest allocated from affiliated Master Portfolio | Dividends allocated from affiliated Master Portfolio | Affiliated Income Allocated from affiliated Master Portfolio | Value, end of period | |
Allspring Real Return Portfolio | 40.08 % | 37.67 % | $(569,850 ) | $(5,808,663 ) | $3,684,700 | $284,403 | $26,614 | $79,762,485 |
The accompanying notes are an integral part of these financial statements.
Allspring Real Return Fund | 11
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in affiliated Master Portfolio, at value (cost $83,976,426) | $79,762,485 |
Receivable for Fund shares sold | 79,829 |
Receivable from manager | 26,479 |
Prepaid expenses and other assets | 50,627 |
Total assets | 79,919,420 |
Liabilities | |
Payable for Fund shares redeemed | 97,348 |
Shareholder report expenses payable | 13,595 |
Administration fees payable | 6,034 |
Distribution fee payable | 893 |
Trustees’ fees and expenses payable | 504 |
Accrued expenses and other liabilities | 10,628 |
Total liabilities | 129,002 |
Total net assets | $79,790,418 |
Net assets consist of | |
Paid-in capital | $85,158,434 |
Total distributable loss | (5,368,016 ) |
Total net assets | $79,790,418 |
Computation of net asset value and offering price per share | |
Net assets–Class A | $12,861,489 |
Shares outstanding–Class A1 | 1,339,678 |
Net asset value per share–Class A | $9.60 |
Maximum offering price per share – Class A2 | $10.05 |
Net assets–Class C | $1,380,346 |
Shares outstanding–Class C1 | 146,632 |
Net asset value per share–Class C | $9.41 |
Net assets–Class R6 | $15,796,423 |
Shares outstanding–Class R61 | 1,625,707 |
Net asset value per share–Class R6 | $9.72 |
Net assets–Administrator Class | $13,226,891 |
Shares outstanding–Administrator Class1 | 1,348,813 |
Net asset value per share–Administrator Class | $9.81 |
Net assets–Institutional Class | $36,525,269 |
Shares outstanding–Institutional Class1 | 3,760,416 |
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 100/95.50 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.
12 | Allspring Real Return Fund
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Interest allocated from affiliated Master Portfolio | $3,684,700 |
Dividends allocated from affiliated Master Portfolio (net of foreign withholding taxes of $4,059) | 284,403 |
Affiliated income allocated from affiliated Master Portfolio | 26,614 |
Expenses allocated from affiliated Master Portfolio | (400,943 ) |
Waivers allocated from affiliated Master Portfolio | 83,606 |
Total investment income | 3,678,380 |
Expenses | |
Management fee | 40,736 |
Administration fees | |
Class A | 24,441 |
Class C | 2,525 |
Class R6 | 3,739 |
Administrator Class | 14,170 |
Institutional Class | 30,386 |
Shareholder servicing fees | |
Class A | 38,189 |
Class C | 3,945 |
Administrator Class | 34,344 |
Distribution fee | |
Class C | 11,834 |
Custody and accounting fees | 3,858 |
Professional fees | 51,170 |
Registration fees | 74,500 |
Shareholder report expenses | 35,425 |
Trustees’ fees and expenses | 22,896 |
Other fees and expenses | 6,558 |
Total expenses | 398,716 |
Less: Fee waivers and/or expense reimbursements | |
Fund-level | (251,381 ) |
Class A | (174 ) |
Administrator Class | (15,591 ) |
Net expenses | 131,570 |
Net investment income | 3,546,810 |
Realized and unrealized gains (losses) on investments | |
Net realized losses on investments allocated from affiliated Master Portfolio | (569,850 ) |
Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolio | (5,808,663 ) |
Net realized and unrealized gains (losses) on investments | (6,378,513 ) |
Net decrease in net assets resulting from operations | $(2,831,703 ) |
The accompanying notes are an integral part of these financial statements.
Allspring Real Return Fund | 13
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $3,546,810 | $4,090,448 | ||
Net realized gains (losses) on investments | (569,850 ) | 935,582 | ||
Net change in unrealized gains (losses) on investments | (5,808,663 ) | (6,398,528 ) | ||
Net decrease in net assets resulting from operations | (2,831,703 ) | (1,372,498 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class A | (686,543 ) | (836,596 ) | ||
Class C | (58,742 ) | (65,210 ) | ||
Class R6 | (631,554 ) | (755,640 ) | ||
Administrator Class | (629,068 ) | (640,606 ) | ||
Institutional Class | (1,775,616 ) | (1,520,901 ) | ||
Total distributions to shareholders | (3,781,523 ) | (3,818,953 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class A | 216,818 | 2,123,638 | 791,258 | 8,668,328 |
Class C | 20,544 | 198,706 | 91,579 | 986,457 |
Class R6 | 737,592 | 7,332,284 | 486,424 | 5,304,807 |
Administrator Class | 314,479 | 3,161,931 | 894,909 | 9,920,837 |
Institutional Class | 1,603,544 | 15,812,126 | 4,023,778 | 44,177,808 |
28,628,685 | 69,058,237 | |||
Reinvestment of distributions | ||||
Class A | 58,661 | 574,829 | 63,937 | 691,464 |
Class C | 6,058 | 58,298 | 6,087 | 64,531 |
Class R6 | 63,670 | 631,451 | 60,586 | 663,004 |
Administrator Class | 60,525 | 604,578 | 55,532 | 610,960 |
Institutional Class | 179,364 | 1,775,461 | 139,813 | 1,520,105 |
3,644,617 | 3,550,064 | |||
Payment for shares redeemed | ||||
Class A | (646,932 ) | (6,291,558 ) | (408,579 ) | (4,414,389 ) |
Class C | (48,172 ) | (457,734 ) | (40,714 ) | (429,356 ) |
Class R6 | (539,506 ) | (5,392,372 ) | (2,460,305 ) | (27,125,717 ) |
Administrator Class | (472,903 ) | (4,663,703 ) | (691,012 ) | (7,672,910 ) |
Institutional Class | (2,205,751 ) | (21,830,616 ) | (956,389 ) | (10,220,364 ) |
(38,635,983 ) | (49,862,736 ) | |||
Net increase (decrease) in net assets resulting from capital share transactions | (6,362,681 ) | 22,745,565 | ||
Total increase (decrease) in net assets | (12,975,907 ) | 17,554,114 | ||
Net assets | ||||
Beginning of period | 92,766,325 | 75,212,211 | ||
End of period | $79,790,418 | $92,766,325 | ||
The accompanying notes are an integral part of these financial statements.
14 | Allspring Real Return Fund
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $10.35 | $10.93 | $10.22 | $9.89 | $9.87 |
Net investment income | 0.40 1 | 0.56 1 | 0.22 | 0.12 | 0.15 |
Net realized and unrealized gains (losses) on investments | (0.72 ) | (0.60 ) | 0.70 | 0.42 | 0.09 |
Total from investment operations | (0.32 ) | (0.04 ) | 0.92 | 0.54 | 0.24 |
Distributions to shareholders from | |||||
Net investment income | (0.43 ) | (0.54 ) | (0.21 ) | (0.21 ) | (0.19 ) |
Net realized gains | 0.00 | 0.00 | 0.00 | 0.00 | (0.03 ) |
Total distributions to shareholders | (0.43 ) | (0.54 ) | (0.21 ) | (0.21 ) | (0.22 ) |
Net asset value, end of period | $9.60 | $10.35 | $10.93 | $10.22 | $9.89 |
Total return2 | (3.10 )% | (0.52 )% | 9.10 % | 5.48 % | 2.56 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.09 % | 1.07 % | 1.29 % | 1.43 % | 1.16 % |
Net expenses | 0.78 % | 0.78 % | 0.78 % | 0.78 % | 0.77 % |
Net investment income | 4.12 % | 5.13 % | 2.09 % | 1.79 % | 1.95 % |
Supplemental data | |||||
Portfolio turnover rate3 | 22 % | 31 % | 20 % | 24 % | 39 % |
Net assets, end of period (000s omitted) | $12,861 | $17,713 | $13,825 | $13,196 | $17,716 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.39% |
Year ended May 31, 2022 | 0.39% |
Year ended May 31, 2021 | 0.39% |
Year ended May 31, 2020 | 0.39% |
Year ended May 31, 2019 | 0.39% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Real Return Fund | 15
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $10.16 | $10.74 | $10.06 | $9.73 | $9.73 |
Net investment income | 0.32 1 | 0.47 1 | 0.12 1 | 0.11 1 | 0.10 1 |
Net realized and unrealized gains (losses) on investments | (0.71 ) | (0.59 ) | 0.71 | 0.35 | 0.07 |
Total from investment operations | (0.39 ) | (0.12 ) | 0.83 | 0.46 | 0.17 |
Distributions to shareholders from | |||||
Net investment income | (0.36 ) | (0.46 ) | (0.15 ) | (0.13 ) | (0.14 ) |
Net realized gains | 0.00 | 0.00 | 0.00 | 0.00 | (0.03 ) |
Total distributions to shareholders | (0.36 ) | (0.46 ) | (0.15 ) | (0.13 ) | (0.17 ) |
Net asset value, end of period | $9.41 | $10.16 | $10.74 | $10.06 | $9.73 |
Total return2 | (3.89 )% | (1.26 )% | 8.27 % | 4.77 % | 1.79 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.84 % | 1.81 % | 2.06 % | 2.18 % | 1.91 % |
Net expenses | 1.53 % | 1.53 % | 1.53 % | 1.53 % | 1.52 % |
Net investment income | 3.32 % | 4.42 % | 1.17 % | 1.09 % | 1.08 % |
Supplemental data | |||||
Portfolio turnover rate3 | 22 % | 31 % | 20 % | 24 % | 39 % |
Net assets, end of period (000s omitted) | $1,380 | $1,709 | $1,195 | $1,714 | $2,553 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.39% |
Year ended May 31, 2022 | 0.39% |
Year ended May 31, 2021 | 0.39% |
Year ended May 31, 2020 | 0.39% |
Year ended May 31, 2019 | 0.39% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
16 | Allspring Real Return Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class R6 | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $10.47 | $11.05 | $10.33 | $9.99 | $9.96 |
Net investment income | 0.46 1 | 0.63 1 | 0.29 | 0.22 | 0.23 1 |
Net realized and unrealized gains (losses) on investments | (0.74 ) | (0.63 ) | 0.69 | 0.37 | 0.06 |
Total from investment operations | (0.28 ) | 0.00 | 0.98 | 0.59 | 0.29 |
Distributions to shareholders from | |||||
Net investment income | (0.47 ) | (0.58 ) | (0.26 ) | (0.25 ) | (0.23 ) |
Net realized gains | 0.00 | 0.00 | 0.00 | 0.00 | (0.03 ) |
Total distributions to shareholders | (0.47 ) | (0.58 ) | (0.26 ) | (0.25 ) | (0.26 ) |
Net asset value, end of period | $9.72 | $10.47 | $11.05 | $10.33 | $9.99 |
Total return | (2.68 )% | (0.15 )% | 9.52 % | 5.94 % | 2.99 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 0.71 % | 0.68 % | 0.85 % | 1.05 % | 0.82 % |
Net expenses | 0.40 % | 0.40 % | 0.40 % | 0.40 % | 0.39 % |
Net investment income | 4.68 % | 5.68 % | 2.70 % | 2.08 % | 2.34 % |
Supplemental data | |||||
Portfolio turnover rate2 | 22 % | 31 % | 20 % | 24 % | 39 % |
Net assets, end of period (000s omitted) | $15,796 | $14,282 | $36,202 | $18,224 | $14,358 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.39% |
Year ended May 31, 2022 | 0.39% |
Year ended May 31, 2021 | 0.39% |
Year ended May 31, 2020 | 0.39% |
Year ended May 31, 2019 | 0.39% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Real Return Fund | 17
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $10.55 | $11.12 | $10.38 | $10.03 | $9.99 |
Net investment income | 0.42 1 | 0.60 1 | 0.25 1 | 0.20 1 | 0.21 1 |
Net realized and unrealized gains (losses) on investments | (0.72 ) | (0.63 ) | 0.71 | 0.36 | 0.06 |
Total from investment operations | (0.30 ) | (0.03 ) | 0.96 | 0.56 | 0.27 |
Distributions to shareholders from | |||||
Net investment income | (0.44 ) | (0.54 ) | (0.22 ) | (0.21 ) | (0.20 ) |
Net realized gains | 0.00 | 0.00 | 0.00 | 0.00 | (0.03 ) |
Total distributions to shareholders | (0.44 ) | (0.54 ) | (0.22 ) | (0.21 ) | (0.23 ) |
Net asset value, end of period | $9.81 | $10.55 | $11.12 | $10.38 | $10.03 |
Total return | (2.87 )% | (0.36 )% | 9.31 % | 5.67 % | 2.78 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.02 % | 0.99 % | 1.23 % | 1.37 % | 1.10 % |
Net expenses | 0.60 % | 0.60 % | 0.60 % | 0.60 % | 0.59 % |
Net investment income | 4.24 % | 5.42 % | 2.26 % | 1.92 % | 2.15 % |
Supplemental data | |||||
Portfolio turnover rate2 | 22 % | 31 % | 20 % | 24 % | 39 % |
Net assets, end of period (000s omitted) | $13,227 | $15,267 | $13,203 | $13,544 | $13,562 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.39% |
Year ended May 31, 2022 | 0.39% |
Year ended May 31, 2021 | 0.39% |
Year ended May 31, 2020 | 0.39% |
Year ended May 31, 2019 | 0.39% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
18 | Allspring Real Return Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Institutional Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $10.47 | $11.05 | $10.33 | $9.99 | $9.97 |
Net investment income | 0.44 1 | 0.63 1 | 0.26 | 0.21 | 0.22 |
Net realized and unrealized gains (losses) on investments | (0.74 ) | (0.64 ) | 0.71 | 0.37 | 0.05 |
Total from investment operations | (0.30 ) | (0.01 ) | 0.97 | 0.58 | 0.27 |
Distributions to shareholders from | |||||
Net investment income | (0.46 ) | (0.57 ) | (0.25 ) | (0.24 ) | (0.22 ) |
Net realized gains | 0.00 | 0.00 | 0.00 | 0.00 | (0.03 ) |
Total distributions to shareholders | (0.46 ) | (0.57 ) | (0.25 ) | (0.24 ) | (0.25 ) |
Net asset value, end of period | $9.71 | $10.47 | $11.05 | $10.33 | $9.99 |
Total return | (2.83 )% | (0.19 )% | 9.46 % | 5.88 % | 2.84 % |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 0.76 % | 0.74 % | 0.95 % | 1.10 % | 0.84 % |
Net expenses | 0.45 % | 0.45 % | 0.45 % | 0.45 % | 0.44 % |
Net investment income | 4.42 % | 5.76 % | 2.37 % | 2.09 % | 2.20 % |
Supplemental data | |||||
Portfolio turnover rate2 | 22 % | 31 % | 20 % | 24 % | 39 % |
Net assets, end of period (000s omitted) | $36,525 | $43,796 | $10,787 | $10,587 | $11,094 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.39% |
Year ended May 31, 2022 | 0.39% |
Year ended May 31, 2021 | 0.39% |
Year ended May 31, 2020 | 0.39% |
Year ended May 31, 2019 | 0.39% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Real Return Fund | 19
Notes to financial statements
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 Real Return Fund (the “Fund”) which is a diversified series of the Trust.
The Fund is a feeder fund in a master-feeder structure that invests substantially all of its assets in a single master portfolio with a substantially identical investment objective and substantially similar investment strategies. The Fund invests in Allspring Real Return Portfolio, a separate diversified portfolio (the “affiliated Master Portfolio”) of Allspring Master Trust, a registered open-end management investment company. As of May 31, 2023, the Fund owned 37.67% of Allspring Real Return Portfolio. The affiliated Master Portfolio directly acquires portfolio securities and the Fund acquires an indirect interest in those securities. The Fund accounts for its investment in the affiliated Master Portfolio as a partnership investment and records on a daily basis its share of the affiliated Master Portfolio’s income, expense and realized and unrealized gains and losses. The financial statements of the affiliated Master Portfolio for the year ended May 31, 2023 are included in this report and should be read in conjunction with the Fund’s financial statements.
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 Funds may deviate from this calculation time under unusual or unexpected circumstances.
Investments in the affiliated Master Portfolio are valued daily based on the Fund’s proportionate share of the affiliated Master Portfolio’s net assets, which are also valued daily.
Investments which are not valued using the method 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.
Investment transactions, income and expenses
Investments in the affiliated Master Portfolio are recorded on a trade date basis. The Fund records daily its proportionate share of the affiliated Master Portfolio’s income, expenses and realized and unrealized gains or losses. The Fund also accrues its own expenses.
Distributions to shareholders
Distributions to shareholders are recorded on the ex-dividend date and paid from net investment income monthly 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 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 Real Return Fund
Notes to financial statements
As of May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $84,021,549 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $0 |
Gross unrealized losses | (4,259,064 ) |
Net unrealized losses | $(4,259,064 ) |
As of May 31, 2023, the Fund had capital loss carryforwards which consist of $1,240,076 in short-term capital losses and $151,059 in long-term capital losses.
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
At May 31, 2023, the Fund’s investment in the affiliated Master Portfolio was measured at fair value using the net asset value per share (or its equivalent) as a practical expedient. The investment objective and fair value of the affiliated Master Portfolio is as follows:
Affiliated Master Portfolio | Investment objective | Fair value of affiliated Master Portfolio |
Allspring Real Return Portfolio | Seeks returns that exceed the rate inflation over the long-term | $79,762,485 |
The affiliated Master Portfolio does not have a redemption period notice, can be redeemed daily and does not have any unfunded commitments.
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 and providing fund-level administrative services in connection with the Fund’s operations. As long as the Fund continues to invest substantially all of its assets in a single affiliated Master Portfolio, the Fund pays Allspring Funds Management an investment management fee only for fund-level administrative services at the following annual rate based on the Fund’s average daily net assets:
Average daily net assets | Management fee |
First $5 billion | 0.050 % |
Next $5 billion | 0.040 |
Over $10 billion | 0.030 |
For the year ended May 31, 2023, the management fee was equivalent to an annual rate of 0.05% of the Fund’s average daily net assets.
Allspring Funds Management also serves as the adviser to the affiliated Master Portfolio and is entitled to receive a fee from the affiliated Master Portfolio for those services.
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 | 0.16 % |
Class C | 0.16 |
Class R6 | 0.03 |
Administrator Class | 0.10 |
Institutional Class | 0.08 |
Allspring Real Return Fund | 21
Notes to financial statements
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. Net expenses from the affiliated Master Portfolio are included in the expense caps. Allspring Funds Management has contractually committed through September 30, 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 May 31, 2023, the contractual expense caps are as follows:
EXPENSE RATIO CAPS | |
Class A | 0.78 % |
Class C | 1.53 |
Class R6 | 0.40 |
Administrator Class | 0.60 |
Institutional Class | 0.45 |
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 May 31, 2023, Allspring Funds Distributor received $1,358 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 May 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.
5.
INVESTMENT PORTFOLIO TRANSACTIONS
The Fund seeks to achieve its investment objective by investing substantially all of its assets in the affiliated Master Portfolio. Purchases and sales have been calculated by multiplying the Fund’s ownership percentage of the affiliated Master Portfolio at the end of the period by the affiliated Master Portfolio’s purchases and sales. Purchases and sales of investments, excluding short-term securities, for the year ended May 31, 2023 were as follows:
Purchases at cost | Sales proceeds | ||
U.S. government | Non-U.S. government | U.S. government | Non-U.S. government |
$10,575,401 | $6,686,365 | $10,805,388 | $8,588,668 |
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 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 May 31, 2023, there were no borrowings by the Fund under the agreement.
7.
DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid was $3,781,523 and $3,818,953 of ordinary income for the years ended May 31, 2023 and May 31, 2022, respectively.
22 | Allspring Real Return Fund
Notes to financial statements
As of May 31, 2023, the components of distributable earnings on a tax basis were as follows:
Undistributed ordinary income | Unrealized losses | Capital loss carryforward |
$282,183 | $(4,259,064 ) | $(1,391,135 ) |
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.
Allspring Real Return Fund | 23
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 Real Return Fund (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of May 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 May 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 interests held as of May 31, 2023, by correspondence with the transfer agent of the master portfolio. 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
July 27, 2023
24 | Allspring Real Return Fund
Portfolio of investments—May 31, 2023
Portfolio of investments
Shares | Value | |||||
Common stocks: 12.87% | ||||||
Consumer staples: 3.09% | ||||||
Beverages: 0.56% | ||||||
PepsiCo, Inc. | 6,473 | $1,180,352 | ||||
Consumer staples distribution & retail: 1.03% | ||||||
Costco Wholesale Corp. | 1,803 | 922,343 | ||||
Sysco Corp. | 4,908 | 343,314 | ||||
Walmart, Inc. | 6,275 | 921,609 | ||||
2,187,266 | ||||||
Food products: 0.37% | ||||||
Mondelez International, Inc. Class A | 7,377 | 541,546 | ||||
Nomad Foods Ltd.† | 13,986 | 238,461 | ||||
780,007 | ||||||
Household products: 1.02% | ||||||
Church & Dwight Co., Inc. | 6,192 | 572,451 | ||||
Clorox Co. | 1,163 | 183,963 | ||||
Procter & Gamble Co. | 9,846 | 1,403,055 | ||||
2,159,469 | ||||||
Personal care products: 0.06% | ||||||
Estee Lauder Cos., Inc. Class A | 672 | 123,668 | ||||
Tobacco: 0.05% | ||||||
Philip Morris International, Inc. | 1,302 | 117,193 | ||||
Energy: 1.63% | ||||||
Oil, gas & consumable fuels: 1.63% | ||||||
Chevron Corp. | 11,635 | 1,752,464 | ||||
EOG Resources, Inc. | 6,573 | 705,217 | ||||
Phillips 66 | 10,918 | 1,000,198 | ||||
3,457,879 | ||||||
Materials: 3.08% | ||||||
Chemicals: 1.19% | ||||||
Ashland, Inc. | 3,172 | 269,239 | ||||
Ecolab, Inc. | 1,947 | 321,352 | ||||
Linde PLC | 3,073 | 1,086,797 | ||||
Olin Corp. | 4,644 | 219,708 | ||||
Sherwin-Williams Co. | 1,161 | 264,453 | ||||
Westlake Corp. | 3,525 | 366,424 | ||||
2,527,973 | ||||||
Construction materials: 0.15% | ||||||
Martin Marietta Materials, Inc. | 766 | 304,899 | ||||
Containers & packaging: 0.11% | ||||||
Crown Holdings, Inc. | 3,113 | 237,304 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring Real Return Portfolio | 25
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Metals & mining: 1.63% | ||||||
Agnico Eagle Mines Ltd. | 2,700 | $137,106 | ||||
Agnico Eagle Mines Ltd. | 2,401 | 122,181 | ||||
Alamos Gold, Inc. Class A | 11,000 | 135,808 | ||||
AngloGold Ashanti Ltd. ADR | 2,900 | 70,180 | ||||
Artemis Gold, Inc.† | 8,000 | 26,578 | ||||
B2Gold Corp. | 32,500 | 120,424 | ||||
Barrick Gold Corp. | 10,356 | 174,809 | ||||
Centerra Gold, Inc. | 3,000 | 18,077 | ||||
Dundee Precious Metals, Inc. | 7,800 | 53,724 | ||||
Endeavour Mining plc | 7,480 | 197,152 | ||||
Evolution Mining Ltd. | 5,000 | 11,188 | ||||
Franco-Nevada Corp. | 1,300 | 188,924 | ||||
Gold Fields Ltd. ADR | 10,500 | 158,760 | ||||
Kinross Gold Corp. | 25,500 | 120,221 | ||||
Lundin Gold, Inc. | 12,000 | 152,044 | ||||
MAG Silver Corp.† | 4,800 | 58,307 | ||||
Newcrest Mining Ltd. | 7,500 | 125,325 | ||||
Newmont Corp. | 3,490 | 141,519 | ||||
Northern Star Resources Ltd. | 14,000 | 117,562 | ||||
OceanaGold Corp. | 7,000 | 15,212 | ||||
Osisko Gold Royalties Ltd. | 1,000 | 15,875 | ||||
Osisko Mining, Inc.† | 4,000 | 9,547 | ||||
Pan American Silver Corp. | 3,000 | 45,690 | ||||
Pan American Silver Corp. | 479 | 7,301 | ||||
Royal Gold, Inc. | 2,534 | 313,811 | ||||
SilverCrest Metals, Inc.† | 11,000 | 72,361 | ||||
SSR Mining, Inc. | 4,950 | 73,112 | ||||
SSR Mining, Inc. | 1,572 | 23,230 | ||||
Steel Dynamics, Inc. | 4,596 | 422,372 | ||||
Torex Gold Resources, Inc.† | 6,000 | 93,790 | ||||
Triple Flag Precious Metals Corp. | 2,000 | 28,435 | ||||
Wheaton Precious Metals Corp. | 4,200 | 190,338 | ||||
3,440,963 | ||||||
Real estate: 5.07% | ||||||
Health care REITs: 0.27% | ||||||
Welltower, Inc. | 7,714 | 575,541 | ||||
Industrial REITs : 0.84% | ||||||
Prologis, Inc. | 10,361 | 1,290,463 | ||||
Terreno Realty Corp. | 7,867 | 482,483 | ||||
1,772,946 | ||||||
Office REITs : 0.15% | ||||||
Alexandria Real Estate Equities, Inc. | 2,791 | 316,667 | ||||
Residential REITs : 1.21% | ||||||
American Homes 4 Rent Class A | 12,659 | 433,951 | ||||
Apartment Income REIT Corp. | 8,799 | 305,237 | ||||
Camden Property Trust | 3,121 | 326,051 | ||||
The accompanying notes are an integral part of these financial statements.
26 | Allspring Real Return Portfolio
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Residential REITs (continued) | ||||||
Invitation Homes, Inc. | 13,872 | $469,983 | ||||
Mid-America Apartment Communities, Inc. | 2,418 | 355,591 | ||||
Sun Communities, Inc. | 5,338 | 675,951 | ||||
2,566,764 | ||||||
Retail REITs : 0.23% | ||||||
Federal Realty Investment Trust | 2,644 | 233,201 | ||||
Simon Property Group, Inc. | 2,376 | 249,836 | ||||
483,037 | ||||||
Specialized REITs : 2.37% | ||||||
American Tower Corp. | 5,467 | 1,008,333 | ||||
Equinix, Inc. | 1,845 | 1,375,540 | ||||
Four Corners Property Trust, Inc. | 17,464 | 448,825 | ||||
Gaming & Leisure Properties, Inc. | 6,985 | 336,258 | ||||
Life Storage, Inc. | 5,149 | 655,931 | ||||
SBA Communications Corp. | 2,968 | 658,243 | ||||
VICI Properties, Inc. | 17,071 | 528,006 | ||||
5,011,136 | ||||||
Total common stocks (Cost $19,065,430) | 27,243,064 | |||||
Interest rate | Maturity date | Principal | ||||
Corporate bonds and notes: 13.69% | ||||||
Basic materials: 0.41% | ||||||
Chemicals: 0.32% | ||||||
Avient Corp.144A | 5.75 % | 5-15-2025 | $ | 50,000 | 49,755 | |
Celanese U.S. Holdings LLC | 6.05 | 3-15-2025 | 615,000 | 617,487 | ||
667,242 | ||||||
Iron/steel: 0.09% | ||||||
Cleveland-Cliffs, Inc.144A | 6.75 | 3-15-2026 | 195,000 | 197,230 | ||
Communications: 0.82% | ||||||
Internet: 0.38% | ||||||
Gen Digital, Inc.144A | 5.00 | 4-15-2025 | 285,000 | 278,370 | ||
Uber Technologies, Inc.144A | 7.50 | 5-15-2025 | 525,000 | 531,114 | ||
809,484 | ||||||
Media: 0.44% | ||||||
Gray Television, Inc.144A | 5.88 | 7-15-2026 | 460,000 | 395,384 | ||
Sirius XM Radio, Inc.144A | 5.00 | 8-1-2027 | 375,000 | 339,999 | ||
Townsquare Media, Inc.144A | 6.88 | 2-1-2026 | 215,000 | 199,348 | ||
934,731 | ||||||
Consumer, cyclical: 3.41% | ||||||
Airlines: 0.58% | ||||||
Hawaiian Airlines Pass-Through Certificates Series 2013-1 Class 1A | 3.90 | 7-15-2027 | 170,031 | 150,685 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Real Return Portfolio | 27
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Airlines (continued) | ||||||
Hawaiian Brand Intellectual Property Ltd./HawaiianMiles Loyalty Ltd.144A | 5.75 % | 1-20-2026 | $ | 390,000 | $362,535 | |
Mileage Plus Holdings LLC/Mileage Plus Intellectual Property Assets Ltd.144A | 6.50 | 6-20-2027 | 161,500 | 161,223 | ||
Spirit Loyalty Cayman Ltd./Spirit IP Cayman Ltd.144A | 8.00 | 9-20-2025 | 545,000 | 550,186 | ||
1,224,629 | ||||||
Apparel: 0.05% | ||||||
Michael Kors USA, Inc.144A | 4.25 | 11-1-2024 | 110,000 | 106,288 | ||
Auto manufacturers: 0.19% | ||||||
Ford Motor Credit Co. LLC | 5.58 | 3-18-2024 | 400,000 | 398,190 | ||
Auto parts & equipment: 0.10% | ||||||
Adient Global Holdings Ltd.144A | 4.88 | 8-15-2026 | 220,000 | 208,250 | ||
Distribution/wholesale: 0.16% | ||||||
G-III Apparel Group Ltd.144A | 7.88 | 8-15-2025 | 365,000 | 344,925 | ||
Entertainment: 0.91% | ||||||
CCM Merger, Inc.144A | 6.38 | 5-1-2026 | 145,000 | 140,052 | ||
Cedar Fair LP/Canada’s Wonderland Co./Magnum Management Corp./Millennium Op144A | 5.50 | 5-1-2025 | 375,000 | 372,171 | ||
Cinemark USA, Inc.144A | 8.75 | 5-1-2025 | 252,000 | 256,410 | ||
Live Nation Entertainment, Inc.144A | 4.88 | 11-1-2024 | 190,000 | 186,612 | ||
Live Nation Entertainment, Inc.144A | 6.50 | 5-15-2027 | 335,000 | 335,569 | ||
SeaWorld Parks & Entertainment, Inc.144A | 8.75 | 5-1-2025 | 250,000 | 254,453 | ||
Six Flags Theme Parks, Inc.144A | 7.00 | 7-1-2025 | 380,000 | 382,859 | ||
1,928,126 | ||||||
Food service: 0.28% | ||||||
Aramark Services, Inc.144A | 6.38 | 5-1-2025 | 590,000 | 585,575 | ||
Home builders: 0.25% | ||||||
Tri Pointe Group, Inc./Tri Pointe Homes, Inc. | 5.88 | 6-15-2024 | 535,000 | 529,254 | ||
Housewares: 0.13% | ||||||
Newell Brands, Inc. | 4.70 | 4-1-2026 | 300,000 | 278,253 | ||
Leisure time: 0.08% | ||||||
NCL Corp. Ltd.144A | 8.38 | 2-1-2028 | 165,000 | 170,654 | ||
Lodging: 0.47% | ||||||
Hilton Domestic Operating Co., Inc.144A | 5.38 | 5-1-2025 | 280,000 | 278,220 | ||
Las Vegas Sands Corp. | 3.20 | 8-8-2024 | 550,000 | 530,439 | ||
MGM Resorts International | 6.75 | 5-1-2025 | 195,000 | 195,743 | ||
1,004,402 | ||||||
The accompanying notes are an integral part of these financial statements.
28 | Allspring Real Return Portfolio
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Retail: 0.21% | ||||||
Bath & Body Works, Inc.144A | 9.38 % | 7-1-2025 | $ | 294,000 | $312,329 | |
Penske Automotive Group, Inc. | 3.50 | 9-1-2025 | 140,000 | 133,083 | ||
445,412 | ||||||
Consumer, non-cyclical: 1.44% | ||||||
Commercial services: 0.70% | ||||||
Allied Universal Holdco LLC/Allied Universal Finance Corp.144A | 6.63 | 7-15-2026 | 310,000 | 291,173 | ||
Block, Inc. | 2.75 | 6-1-2026 | 85,000 | 76,491 | ||
CoreCivic, Inc. | 8.25 | 4-15-2026 | 335,000 | 335,086 | ||
Prime Security Services Borrower LLC/Prime Finance, Inc.144A | 5.75 | 4-15-2026 | 245,000 | 239,689 | ||
Sabre Global, Inc.144A | 9.25 | 4-15-2025 | 350,000 | 334,250 | ||
Sabre Global, Inc.144A | 11.25 | 12-15-2027 | 265,000 | 203,705 | ||
1,480,394 | ||||||
Food: 0.34% | ||||||
Performance Food Group, Inc.144A | 6.88 | 5-1-2025 | 355,000 | 355,788 | ||
U.S. Foods, Inc.144A | 6.25 | 4-15-2025 | 370,000 | 369,228 | ||
725,016 | ||||||
Healthcare-services: 0.40% | ||||||
IQVIA, Inc.144A | 5.00 | 10-15-2026 | 250,000 | 243,144 | ||
Tenet Healthcare Corp. | 4.88 | 1-1-2026 | 610,000 | 590,066 | ||
833,210 | ||||||
Energy: 2.77% | ||||||
Energy-alternate sources: 0.27% | ||||||
Enviva Partners LP/Enviva Partners Finance Corp.144A | 6.50 | 1-15-2026 | 720,000 | 570,182 | ||
Oil & gas: 0.70% | ||||||
Aethon United BR LP/Aethon United Finance Corp.144A | 8.25 | 2-15-2026 | 145,000 | 140,313 | ||
Antero Resources Corp.144A | 8.38 | 7-15-2026 | 390,000 | 404,480 | ||
EQT Corp. | 6.13 | 2-1-2025 | 405,000 | 405,308 | ||
Murphy Oil Corp. | 5.75 | 8-15-2025 | 200,000 | 196,772 | ||
Range Resources Corp. | 4.88 | 5-15-2025 | 225,000 | 220,564 | ||
Range Resources Corp. | 8.25 | 1-15-2029 | 90,000 | 93,733 | ||
Southwestern Energy Co. | 5.70 | 1-23-2025 | 32,000 | 31,797 | ||
1,492,967 | ||||||
Oil & gas services: 0.35% | ||||||
Oceaneering International, Inc. | 4.65 | 11-15-2024 | 650,000 | 632,560 | ||
USA Compression Partners LP/USA Compression Finance Corp. | 6.88 | 4-1-2026 | 115,000 | 109,370 | ||
741,930 | ||||||
Pipelines: 1.45% | ||||||
Antero Midstream Partners LP/Antero Midstream Finance Corp.144A | 7.88 | 5-15-2026 | 105,000 | 106,427 | ||
Buckeye Partners LP144A | 4.13 | 3-1-2025 | 35,000 | 33,258 | ||
Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp. | 5.75 | 4-1-2025 | 605,000 | 593,396 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Real Return Portfolio | 29
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Pipelines (continued) | ||||||
DCP Midstream Operating LP | 5.38 % | 7-15-2025 | $ | 455,000 | $449,982 | |
EnLink Midstream Partners LP | 4.15 | 6-1-2025 | 232,000 | 223,880 | ||
EQM Midstream Partners LP | 4.00 | 8-1-2024 | 65,000 | 63,284 | ||
Rockies Express Pipeline LLC144A | 3.60 | 5-15-2025 | 529,000 | 501,222 | ||
Tallgrass Energy Partners LP/Tallgrass Energy Finance Corp.144A | 6.00 | 3-1-2027 | 360,000 | 336,612 | ||
Venture Global LNG, Inc.144A | 8.13 | 6-1-2028 | 380,000 | 381,900 | ||
Western Midstream Operating LP | 4.65 | 7-1-2026 | 385,000 | 371,346 | ||
3,061,307 | ||||||
Financial: 2.41% | ||||||
Diversified financial services: 1.49% | ||||||
Enact Holdings, Inc.144A | 6.50 | 8-15-2025 | 810,000 | 795,763 | ||
LFS TopCo LLC144A | 5.88 | 10-15-2026 | 120,000 | 104,610 | ||
Navient Corp. | 5.88 | 10-25-2024 | 590,000 | 576,765 | ||
Navient Corp. | 7.25 | 9-25-2023 | 87,000 | 86,806 | ||
OneMain Finance Corp. | 3.50 | 1-15-2027 | 120,000 | 99,911 | ||
OneMain Finance Corp. | 6.13 | 3-15-2024 | 475,000 | 464,029 | ||
PRA Group, Inc.144A | 7.38 | 9-1-2025 | 290,000 | 270,425 | ||
Rocket Mortgage LLC/Rocket Mortgage Co.-Issuer, Inc.144A | 2.88 | 10-15-2026 | 165,000 | 144,174 | ||
United Wholesale Mortgage LLC144A | 5.50 | 11-15-2025 | 650,000 | 608,595 | ||
3,151,078 | ||||||
REITS: 0.92% | ||||||
HAT Holdings I LLC/HAT Holdings II LLC144A | 3.38 | 6-15-2026 | 245,000 | 214,375 | ||
HAT Holdings I LLC/HAT Holdings II LLC144A | 6.00 | 4-15-2025 | 270,000 | 261,218 | ||
Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp.144A | 5.25 | 10-1-2025 | 475,000 | 444,752 | ||
Service Properties Trust | 4.35 | 10-1-2024 | 95,000 | 91,113 | ||
Service Properties Trust | 7.50 | 9-15-2025 | 210,000 | 205,928 | ||
Starwood Property Trust, Inc.144A | 3.75 | 12-31-2024 | 110,000 | 103,209 | ||
Starwood Property Trust, Inc. | 4.75 | 3-15-2025 | 495,000 | 464,427 | ||
Starwood Property Trust, Inc.144A | 5.50 | 11-1-2023 | 150,000 | 148,515 | ||
Vornado Realty LP | 2.15 | 6-1-2026 | 20,000 | 16,420 | ||
1,949,957 | ||||||
Industrial: 1.48% | ||||||
Aerospace/defense: 0.40% | ||||||
Spirit AeroSystems, Inc.144A | 7.50 | 4-15-2025 | 185,000 | 182,689 | ||
TransDigm, Inc.144A | 6.25 | 3-15-2026 | 670,000 | 665,413 | ||
848,102 | ||||||
Electrical components & equipment: 0.27% | ||||||
WESCO Distribution, Inc.144A | 7.13 | 6-15-2025 | 575,000 | 579,210 | ||
Environmental control: 0.10% | ||||||
Stericycle, Inc.144A | 5.38 | 7-15-2024 | 215,000 | 212,565 | ||
Packaging & containers: 0.31% | ||||||
Clearwater Paper Corp.144A | 5.38 | 2-1-2025 | 315,000 | 306,337 | ||
The accompanying notes are an integral part of these financial statements.
30 | Allspring Real Return Portfolio
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Packaging & containers (continued) | ||||||
Sealed Air Corp.144A | 5.13 % | 12-1-2024 | $ | 50,000 | $49,553 | |
Sealed Air Corp.144A | 5.50 | 9-15-2025 | 300,000 | 297,817 | ||
653,707 | ||||||
Trucking & leasing: 0.40% | ||||||
DAE Funding LLC144A | 2.63 | 3-20-2025 | 370,000 | 349,511 | ||
Fortress Transportation & Infrastructure Investors LLC144A | 6.50 | 10-1-2025 | 505,000 | 490,462 | ||
839,973 | ||||||
Technology: 0.05% | ||||||
Computers: 0.05% | ||||||
NCR Corp.144A | 5.75 | 9-1-2027 | 98,000 | 97,468 | ||
Utilities: 0.90% | ||||||
Electric: 0.90% | ||||||
NextEra Energy Operating Partners LP144A | 4.25 | 7-15-2024 | 755,000 | 740,768 | ||
NSG Holdings LLC/NSG Holdings, Inc.144A | 7.75 | 12-15-2025 | 380,291 | 376,488 | ||
Vistra Operations Co. LLC144A | 5.63 | 2-15-2027 | 825,000 | 793,493 | ||
1,910,749 | ||||||
Total corporate bonds and notes (Cost $30,203,839) | 28,980,460 | |||||
Loans: 0.93% | ||||||
Communications: 0.04% | ||||||
Media: 0.04% | ||||||
Gray Television, Inc. (U.S. SOFR 1 Month +2.50%)± | 7.61 | 1-2-2026 | $ | 100,000 | 95,813 | |
Consumer, cyclical: 0.54% | ||||||
Airlines: 0.27% | ||||||
Mileage Plus Holdings LLC (3 Month LIBOR +5.25%)± | 10.21 | 6-21-2027 | 361,250 | 373,630 | ||
SkyMiles IP Ltd. (U.S. SOFR 3 Month +3.75%)± | 8.80 | 10-20-2027 | 193,500 | 200,139 | ||
573,769 | ||||||
Entertainment: 0.23% | ||||||
Live Nation Entertainment, Inc. (U.S. SOFR 1 Month +1.75%)± | 6.93 | 10-17-2026 | 121,496 | 118,914 | ||
SeaWorld Parks & Entertainment, Inc. (1 Month LIBOR +3.00%)± | 8.19 | 8-25-2028 | 368,413 | 364,040 | ||
482,954 | ||||||
Leisure time: 0.04% | ||||||
Carnival Corp. (1 Month LIBOR +3.00%)± | 8.15 | 6-30-2025 | �� | 78,020 | 77,264 | |
Energy: 0.07% | ||||||
Pipelines: 0.07% | ||||||
GIP II Blue Holding LP (3 Month LIBOR +4.50%)± | 9.66 | 9-29-2028 | 139,710 | 139,186 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Real Return Portfolio | 31
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Financial: 0.10% | ||||||
Diversified financial services: 0.10% | ||||||
Resolute Investment Managers, Inc. (3 Month LIBOR +4.25%)± | 9.41 % | 4-30-2024 | 92,635 | $67,624 | ||
Russell Investments U.S. Institutional Holdco, Inc. (U.S. SOFR 1 Month +3.50%)± | 8.75 | 5-30-2025 | 148,277 | 140,269 | ||
207,893 | ||||||
Industrial: 0.00% | ||||||
Machinery-diversified: 0.00% | ||||||
Vertical U.S. Newco, Inc. (6 Month LIBOR +3.50%)± | 8.60 | 7-30-2027 | 851 | 820 | ||
Technology: 0.05% | ||||||
Software: 0.05% | ||||||
SS&C European Holdings Sarl (1 Month LIBOR +1.75%)± | 6.90 | 4-16-2025 | 54,363 | 54,009 | ||
SS&C Technologies, Inc. (1 Month LIBOR +1.75%)± | 6.90 | 4-16-2025 | 61,303 | 60,905 | ||
114,914 | ||||||
Utilities: 0.13% | ||||||
Electric: 0.13% | ||||||
ExGen Renewables IV LLC (U.S. SOFR 3 Month +2.50%)± | 7.76 | 12-15-2027 | 289,241 | 286,665 | ||
Total loans (Cost $2,025,555) | 1,979,278 | |||||
U.S. Treasury securities: 68.26% | ||||||
TIPS | 0.13 | 7-15-2024 | $ | 2,897,971 | 2,812,843 | |
TIPS | 0.13 | 10-15-2024 | 4,352,384 | 4,207,956 | ||
TIPS | 0.13 | 4-15-2025 | 9,043,571 | 8,659,484 | ||
TIPS | 0.13 | 10-15-2025 | 2,303,057 | 2,200,994 | ||
TIPS | 0.13 | 4-15-2026 | 6,387,051 | 6,044,495 | ||
TIPS | 0.13 | 7-15-2026 | 4,274,577 | 4,052,708 | ||
TIPS | 0.13 | 10-15-2026 | 3,313,410 | 3,131,140 | ||
TIPS | 0.13 | 4-15-2027 | 5,345,149 | 5,004,395 | ||
TIPS | 0.13 | 1-15-2030 | 4,926,768 | 4,481,691 | ||
TIPS | 0.13 | 7-15-2030 | 4,449,514 | 4,041,294 | ||
TIPS | 0.13 | 1-15-2031 | 5,020,072 | 4,522,248 | ||
TIPS | 0.13 | 7-15-2031 | 3,068,486 | 2,754,955 | ||
TIPS | 0.13 | 1-15-2032 | 5,770,375 | 5,145,101 | ||
TIPS | 0.13 | 2-15-2051 | 3,106,710 | 2,059,439 | ||
TIPS | 0.13 | 2-15-2052 | 1,891,859 | 1,248,775 | ||
TIPS | 0.25 | 7-15-2029 | 2,424,633 | 2,244,135 | ||
TIPS | 0.25 | 2-15-2050 | 4,296,474 | 2,991,672 | ||
TIPS | 0.38 | 7-15-2025 | 2,965,298 | 2,858,559 | ||
TIPS | 0.38 | 1-15-2027 | 3,329,651 | 3,157,706 | ||
TIPS | 0.38 | 7-15-2027 | 4,071,441 | 3,860,593 | ||
TIPS | 0.50 | 4-15-2024 | 1,453,918 | 1,417,929 | ||
TIPS | 0.50 | 1-15-2028 | 3,132,237 | 2,963,420 | ||
TIPS | 0.63 | 1-15-2026 | 5,010,781 | 4,826,743 | ||
TIPS | 0.63 | 7-15-2032 | 5,323,542 | 4,954,170 | ||
TIPS | 0.63 | 2-15-2043 | 2,408,804 | 1,974,373 | ||
TIPS | 0.75 | 7-15-2028 | 4,099,945 | 3,933,332 | ||
The accompanying notes are an integral part of these financial statements.
32 | Allspring Real Return Portfolio
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
U.S. Treasury securities (continued) | ||||||
TIPS | 0.75 % | 2-15-2042 | $ | 3,252,308 | $2,761,031 | |
TIPS | 0.75 | 2-15-2045 | 1,864,801 | 1,539,080 | ||
TIPS | 0.88 | 1-15-2029 | 3,370,605 | 3,234,793 | ||
TIPS | 0.88 | 2-15-2047 | 1,844,133 | 1,544,966 | ||
TIPS | 1.00 | 2-15-2046 | 1,821,434 | 1,579,614 | ||
TIPS | 1.00 | 2-15-2048 | 1,401,343 | 1,203,444 | ||
TIPS | 1.00 | 2-15-2049 | 1,601,159 | 1,372,446 | ||
TIPS | 1.13 | 1-15-2033 | 3,343,527 | 3,241,948 | ||
TIPS | 1.38 | 2-15-2044 | 2,628,789 | 2,475,246 | ||
TIPS | 1.63 | 10-15-2027 | 4,192,444 | 4,182,905 | ||
TIPS | 1.75 | 1-15-2028 | 2,758,787 | 2,761,535 | ||
TIPS | 2.00 | 1-15-2026 | 3,421,350 | 3,413,198 | ||
TIPS | 2.13 | 2-15-2040 | 1,452,194 | 1,562,271 | ||
TIPS | 2.13 | 2-15-2041 | 1,853,625 | 1,995,495 | ||
TIPS | 2.38 | 1-15-2025 | 3,522,442 | 3,510,013 | ||
TIPS | 2.38 | 1-15-2027 | 2,536,669 | 2,580,144 | ||
TIPS | 2.50 | 1-15-2029 | 2,656,773 | 2,775,498 | ||
TIPS | 3.38 | 4-15-2032 | 1,071,189 | 1,235,605 | ||
TIPS | 3.63 | 4-15-2028 | 2,155,207 | 2,344,545 | ||
TIPS | 3.88 | 4-15-2029 | 2,827,224 | 3,172,041 | ||
U.S. Treasury Notes | 3.38 | 5-15-2033 | 530,000 | 518,655 | ||
Total U.S. Treasury securities (Cost $158,460,886) | 144,554,623 | |||||
Yankee corporate bonds and notes: 2.31% | ||||||
Basic materials: 0.28% | ||||||
Mining: 0.28% | ||||||
Constellium SE144A | 5.88 | 2-15-2026 | 300,000 | 295,552 | ||
FMG Resources August 2006 Pty. Ltd.144A | 5.13 | 5-15-2024 | 300,000 | 299,797 | ||
595,349 | ||||||
Communications: 0.17% | ||||||
Media: 0.17% | ||||||
Videotron Ltd.144A | 5.38 | 6-15-2024 | 360,000 | 356,278 | ||
Consumer, cyclical: 1.04% | ||||||
Airlines: 0.26% | ||||||
Air Canada Pass-Through Trust Series 2020-1 Class C144A | 10.50 | 7-15-2026 | 370,000 | 398,120 | ||
American Airlines, Inc./AAdvantage Loyalty IP Ltd.144A | 5.50 | 4-20-2026 | 170,000 | 166,838 | ||
564,958 | ||||||
Auto parts & equipment: 0.23% | ||||||
Clarios Global LP144A | 6.75 | 5-15-2025 | 282,000 | 282,586 | ||
Clarios Global LP/Clarios U.S. Finance Co.144A | 6.25 | 5-15-2026 | 201,000 | 198,868 | ||
481,454 | ||||||
Leisure time: 0.39% | ||||||
Carnival Corp.144A | 10.50 | 2-1-2026 | 285,000 | 296,151 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Real Return Portfolio | 33
Portfolio of investments—May 31, 2023
Interest rate | Maturity date | Principal | Value | |||
Leisure time (continued) | ||||||
Royal Caribbean Cruises Ltd.144A | 5.38 % | 7-15-2027 | $ | 320,000 | $294,867 | |
Royal Caribbean Cruises Ltd.144A | 11.50 | 6-1-2025 | 221,000 | 233,586 | ||
824,604 | ||||||
Retail: 0.16% | ||||||
1011778 BC ULC/New Red Finance, Inc.144A | 5.75 | 4-15-2025 | 335,000 | 334,013 | ||
Consumer, non-cyclical: 0.18% | ||||||
Pharmaceuticals: 0.18% | ||||||
Teva Pharmaceutical Finance Netherlands III BV | 6.00 | 4-15-2024 | 379,000 | 376,135 | ||
Energy: 0.25% | ||||||
Pipelines: 0.25% | ||||||
Northriver Midstream Finance LP144A | 5.63 | 2-15-2026 | 580,000 | 540,734 | ||
Financial: 0.30% | ||||||
Diversified financial services: 0.30% | ||||||
Macquarie Airfinance Holdings Ltd. | 8.38 | 5-1-2028 | 225,000 | 221,654 | ||
Park Aerospace Holdings Ltd.144A | 5.50 | 2-15-2024 | 415,000 | 410,505 | ||
632,159 | ||||||
Industrial: 0.09% | ||||||
Packaging & containers: 0.09% | ||||||
Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc.144A | 5.25 | 4-30-2025 | 200,000 | 195,981 | ||
Total yankee corporate bonds and notes (Cost $5,021,310) | 4,901,665 | |||||
Yield | Shares | |||||
Short-term investments: 1.20% | ||||||
Investment companies: 1.20% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.01 | 2,535,840 | 2,535,840 | |||
Total short-term investments (Cost $2,535,840) | 2,535,840 | |||||
Total investments in securities (Cost $217,312,860) | 99.26 % | 210,194,930 | ||||
Other assets and liabilities, net | 0.74 | 1,565,598 | ||||
Total net assets | 100.00 % | $211,760,528 | ||||
† | 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. |
± | Variable rate investment. The rate shown is the rate in effect at period end. |
♠ | The issuer of the security is an affiliated person of the Portfolio 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 |
LIBOR | London Interbank Offered Rate |
REIT | Real estate investment trust |
SOFR | Secured Overnight Financing Rate |
TIPS | Treasury Inflation-Protected Securities |
The accompanying notes are an integral part of these financial statements.
34 | Allspring Real Return Portfolio
Portfolio of investments—May 31, 2023
Investments in affiliates
An affiliated investment is an investment in which the Portfolio owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Portfolio and the issuer having the same adviser or investment manager. Transactions with issuers that were affiliates of the Portfolio 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 | $2,766,670 | $58,678,262 | $(58,909,092 ) | $0 | $0 | $2,535,840 | 2,535,840 | $69,210 |
Investments in affiliates no longer held at end of period | ||||||||
Securities Lending Cash Investments LLC | 0 | 3,611,368 | (3,611,332 ) | (36 ) | 0 | 0 | 0 | 9,311 1 |
$(36 ) | $0 | $2,535,840 | $78,521 |
1 | 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 | ||||||
Ultra 10-Year U.S. Treasury Notes | 4 | 9-20-2023 | $478,724 | $481,812 | $3,088 | $0 |
2-Year U.S. Treasury Notes | 36 | 9-29-2023 | 7,420,839 | 7,409,813 | 0 | (11,026 ) |
Short | ||||||
Ultra Long Term U.S. Treasury Bond | (12 ) | 9-20-2023 | (1,615,665 ) | (1,642,500 ) | 0 | (26,835 ) |
5-Year U.S. Treasury Notes | (13 ) | 9-29-2023 | (1,417,205 ) | (1,418,016 ) | 0 | (811 ) |
$3,088 | $(38,672 ) |
The accompanying notes are an integral part of these financial statements.
Allspring Real Return Portfolio | 35
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in unaffiliated securities, at value (cost $214,777,020) | $207,659,090 |
Investments in affiliated securities, at value (cost $2,535,840) | 2,535,840 |
Cash at broker segregated for futures contracts | 336,000 |
Foreign currency, at value (cost $17,665) | 17,455 |
Receivable for dividends and interest | 929,828 |
Receivable for investments sold | 372,365 |
Receivable for daily variation margin on open futures contracts | 13,969 |
Prepaid expenses and other assets | 1,413 |
Total assets | 211,865,960 |
Liabilities | |
Advisory fee payable | 56,127 |
Payable for daily variation margin on open futures contracts | 17,969 |
Custody and accounting fees payable | 14,840 |
Interest holder report expenses payable | 13,613 |
Trustees’ fees and expenses payable | 505 |
Accrued expenses and other liabilities | 2,378 |
Total liabilities | 105,432 |
Total net assets | $211,760,528 |
The accompanying notes are an integral part of these financial statements.
36 | Allspring Real Return Portfolio
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Interest | $9,622,312 |
Dividends (net of foreign withholdings taxes of $10,736) | 753,157 |
Income from affiliated securities | 71,486 |
Total investment income | 10,446,955 |
Expenses | |
Advisory fee | 864,264 |
Custody and accounting fees | 31,990 |
Professional fees | 101,129 |
Interest holder report expenses | 25,112 |
Trustees’ fees and expenses | 27,209 |
Other fees and expenses | 13,684 |
Total expenses | 1,063,388 |
Less: Fee waivers and/or expense reimbursements | (220,731 ) |
Net expenses | 842,657 |
Net investment income | 9,604,298 |
Realized and unrealized gains (losses) on investments | |
Net realized gains (losses) on | |
Unaffiliated securities | 219,406 |
Affiliated securities | (36 ) |
Foreign currency and foreign currency translations | (727 ) |
Futures contracts | 311,107 |
Net realized gains on investments | 529,750 |
Net change in unrealized gains (losses) on | |
Unaffiliated securities | (15,915,117 ) |
Foreign currency and foreign currency translations | (287 ) |
Futures contracts | (90,057 ) |
Net change in unrealized gains (losses) on investments | (16,005,461 ) |
Net realized and unrealized gains (losses) on investments | (15,475,711 ) |
Net decrease in net assets resulting from operations | $(5,871,413 ) |
The accompanying notes are an integral part of these financial statements.
Allspring Real Return Portfolio | 37
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $9,604,298 | $12,910,301 | ||
Net realized gains on investments | 529,750 | 2,843,667 | ||
Net change in unrealized gains (losses) on investments | (16,005,461 ) | (16,501,133 ) | ||
Net decrease in net assets resulting from operations | (5,871,413 ) | (747,165 ) | ||
Capital transactions | ||||
Transactions in investors’ beneficial interests | ||||
Contributions | 41,232,899 | 73,678,375 | ||
Withdrawals | (55,196,249 ) | (80,677,859 ) | ||
Net decrease in net assets resulting from capital transactions | (13,963,350 ) | (6,999,484 ) | ||
Total decrease in net assets | (19,834,763 ) | (7,746,649 ) | ||
Net assets | ||||
Beginning of period | 231,595,291 | 239,341,940 | ||
End of period | $211,760,528 | $231,595,291 | ||
The accompanying notes are an integral part of these financial statements.
38 | Allspring Real Return Portfolio
Financial highlights
Financial highlights
Year ended May 31 | |||||
2023 | 2022 | 2021 | 2020 | 2019 | |
Total return | (2.73 )% | (0.14 )% | 9.58 % | 5.92 % | 2.99 % |
Ratios to average net assets (annualized) | |||||
Gross expenses | 0.49 % | 0.48 % | 0.47 % | 0.45 % | 0.45 % |
Net expenses1 | 0.39 % | 0.39 % | 0.39 % | 0.39 % | 0.40 % |
Net investment income | 4.45 % | 5.54 % | 2.57 % | 2.16 % | 2.29 % |
Supplemental data | |||||
Portfolio turnover rate | 22 % | 31 % | 20 % | 24 % | 39 % |
1 | Net expense ratios reflect voluntary waivers, if any. |
The accompanying notes are an integral part of these financial statements.
Allspring Real Return Portfolio | 39
Notes to financial statements
Notes to financial statements
1.
ORGANIZATION
Allspring Master 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 Real Return Portfolio (the “Portfolio”) which is a diversified series of the Trust.
Interests in the Portfolio are available solely through private placement transactions that do not involve any “public offering” within the meaning of Section 4(a)(2) of the Securities Act of 1933.
2.
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Portfolio, 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 Portfolio may deviate from this calculation time under unusual or unexpected circumstances.
Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.
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.
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 at 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 May 31, 2023, such fair value pricing was not 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.
Investments which are not valued using any of 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 Portfolio 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.
40 | Allspring Real Return Portfolio
Notes to financial statements
Securities lending
During the period, the Portfolio 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 Portfolio 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. Interests in the non-registered investment company that were redeemable at net asset value were fair valued normally at net asset value. Effective at the close of business on March 29, 2023, the Portfolio 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.
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.
Loans
The Portfolio may invest in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. The loans pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. Investments in loans may be in the form of participations in loans or assignments of all or a portion of loans from third parties. When the Portfolio purchases participations, it generally has no rights to enforce compliance with the terms of the loan agreement with the borrower. As a result, the Portfolio assumes the credit risk of both the borrower and the lender that is selling the participation. When the Portfolio purchases assignments from lenders, it acquires direct rights against the borrower on the loan and may enforce compliance by the borrower with the terms of the loan agreement. Loans may include fully funded term loans or unfunded loan commitments, which are contractual obligations for future funding.
Futures contracts
Futures contracts are agreements between the Portfolio and a counterparty to buy or sell a specific amount of a commodity, financial instrument or currency at a specified price and on a specified date. The Portfolio may buy and sell futures contracts in order to gain exposure to, or protect against, changes in interest rates and is subject to interest rate 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 Portfolio 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 Portfolio 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 Portfolio 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 received 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 Portfolio fail to make requested variation margin payments, the broker can gain access to the initial margin to satisfy the Portfolio’s payment obligations. When the contracts are closed, a realized gain or loss is recorded in the Statement of Operations.
Inflation-indexed bonds and TIPS
The Portfolio may invest in inflation-indexed bonds, including Treasury inflation-protected securities (TIPS). Inflation-indexed bonds are fixed income securities whose principal value is periodically adjusted according to the rate of inflation. If the index measuring inflation falls, the principal value of inflation-indexed bonds (other than municipal inflation-indexed bonds and certain corporate inflation-indexed bonds) will be adjusted downward, and consequently the interest payable on these securities (calculated with respect to a smaller principal amount) will be reduced. Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds. For bonds that do not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original principal. The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates are tied to the relationship between nominal interest rates and the rate of inflation. If nominal interest rates increase at a faster rate than inflation, real interest rates may rise, leading to a decrease in value of inflation-indexed bonds. Inflation-indexed bonds, including TIPS, decline in value when real interest rates rise. In certain interest rate environments, such as when real interest rates are rising faster than nominal interest rates, inflation-indexed bonds may experience greater losses than other fixed income securities with similar durations.
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.
Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. To the extent debt obligations are placed on non-accrual status, any related interest income may be reduced by writing off interest receivables when the collection of all or a portion of interest has
Allspring Real Return Portfolio | 41
Notes to financial statements
been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status. Paydown gains and losses are included in interest income.
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.
Income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.
Federal and other taxes
The Portfolio is not required to pay federal income taxes on its net investment income and net capital gains as it is treated as a partnership for federal income tax purposes. All income, gains and losses of the Portfolio are deemed to have been “passed through” to the interest holders in proportion to their holdings of the Portfolio regardless of whether income and gains have been distributed by the Portfolio.
The Portfolio’s income tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal revenue authority. Management has analyzed the Portfolio’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 May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $217,570,237 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $8,813,215 |
Gross unrealized losses | (16,224,106 ) |
Net unrealized losses | $(7,410,891 ) |
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 Portfolio’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 Portfolio’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 Portfolio’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 Portfolio’s assets and liabilities as of May 31, 2023:
Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
Assets | ||||
Investments in: | ||||
Common stocks | ||||
Consumer staples | $6,547,955 | $0 | $0 | $6,547,955 |
Energy | 3,457,879 | 0 | 0 | 3,457,879 |
Materials | 6,511,139 | 0 | 0 | 6,511,139 |
Real estate | 10,726,091 | 0 | 0 | 10,726,091 |
Corporate bonds and notes | 0 | 28,980,460 | 0 | 28,980,460 |
Loans | 0 | 1,979,278 | 0 | 1,979,278 |
U.S. Treasury securities | 144,554,623 | 0 | 0 | 144,554,623 |
Yankee corporate bonds and notes | 0 | 4,901,665 | 0 | 4,901,665 |
Short-term investments | ||||
Investment companies | 2,535,840 | 0 | 0 | 2,535,840 |
174,333,527 | 35,861,403 | 0 | 210,194,930 | |
Futures contracts | 3,088 | 0 | 0 | 3,088 |
Total assets | $174,336,615 | $35,861,403 | $0 | $210,198,018 |
42 | Allspring Real Return Portfolio
Notes to financial statements
Liabilities | ||||
Futures contracts | $38,672 | $0 | $0 | $38,672 |
Total liabilities | $38,672 | $0 | $0 | $38,672 |
Futures contracts are reported at their cumulative unrealized gains (losses) at measurement date as reported in the tables 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 May 31, 2023, the Portfolio did not have any material transfers into/out of Level 3.
4.
TRANSACTIONS WITH AFFILIATES
Advisory fee
The Trust has entered into an advisory contract with 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. The adviser is responsible for implementing investment policies and guidelines and for supervising the subadviser, who is responsible for day-to-day portfolio management of the Portfolio. Pursuant to the contract, Allspring Funds Management is entitled to receive an advisory fee at the following annual rate based on the Portfolio’s average daily net assets:
Average daily net assets | Advisory fee |
First $500 million | 0.400 % |
Next $500 million | 0.375 |
Next $2 billion | 0.350 |
Next $2 billion | 0.325 |
Next $5 billion | 0.300 |
Over $10 billion | 0.290 |
For the year ended May 31, 2023, the advisory fee was equivalent to an annual rate of 0.40% of the Portfolio’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Portfolio. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Investments is the subadviser to the Portfolio and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.28% and declining to 0.18% as the average daily net assets of the Portfolio increase.
Allspring Funds Management has voluntarily waived and/or reimbursed advisory fees to reduce the net operating expense ratio of the Portfolio. These voluntary waivers may be discontinued at any time.
Interfund transactions
The Portfolio 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. Pursuant to these procedures, the Fund had $0, $1,381,653 and $(71,440) in interfund purchases, sales and net realized gains (losses), respectively, during the year ended May 31, 2023.
5.
INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the year ended May 31, 2023 were as follows:
Purchases at cost | Sales proceeds | ||
U.S. government | Non-U.S. government | U.S. government | Non-U.S. government |
$28,075,861 | $18,535,675 | $28,686,438 | $23,052,071 |
6.
DERIVATIVE TRANSACTIONS
During the year ended May 31, 2023, the Portfolio entered into futures contracts to speculate on interest rates and to help manage the duration of the portfolio. The Portfolio had an average notional amount of $4,037,920 in long futures contracts and $2,830,168 in short futures contracts during the year ended May 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.
Allspring Real Return Portfolio | 43
Notes to financial statements
7.
BANK BORROWINGS
The Trust, along with Allspring Variable Trust and Allspring Funds Trust (excluding the money market funds), are parties to a $350,000,000 revolving credit agreement whereby the Portfolio is permitted to use bank borrowings for temporary or emergency purposes, such as to fund interest holders withdrawal requests. Interest under the credit agreement is charged to the Portfolio based on 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 May 31, 2023, there were no borrowings by the Portfolio under the agreement.
8.
INDEMNIFICATION
Under the Portfolio’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 Portfolio. The Portfolio has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Portfolio’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 Portfolio may enter into contracts with service providers that contain a variety of indemnification clauses. The Portfolio’s maximum exposure under these arrangements is dependent on future claims that may be made against the Portfolio and, therefore, cannot be estimated.
44 | Allspring Real Return Portfolio
Report of independent registered public accounting firm
To the Interest Holders of the Portfolio and Board of Trustees
Allspring Master Trust:
Allspring Master Trust:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Allspring Real Return Portfolio (the Portfolio), one of the portfolios constituting Allspring Master Trust, including the portfolio of investments, as of May 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 Portfolio as of May 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 Portfolio’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 Portfolio 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 May 31, 2023, by correspondence with the custodian, transfer agent, agent banks 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
July 27, 2023
Allspring Real Return Portfolio | 45
Other information (unaudited)
Other information
Tax information
For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 6% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended May 31, 2023.
Pursuant to Section 854 of the Internal Revenue Code, $218,444 of income dividends paid during the fiscal year ended May 31, 2023 has been designated as qualified dividend income (QDI).
For the fiscal year ended May 31, 2023, $3,404,900 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 May 31, 2023, 4% of the ordinary income distributed was derived from interest on U.S. government securities.
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 and Portfolio file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. Shareholders and Interest holders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
46 | Allspring Real Return 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 128 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 |
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 |
1
The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by call 1-800-222-8222 or by visiting the website at allspringglobal.com.
Allspring Real Return Fund | 47
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 |
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. |
48 | Allspring Real Return Fund
Other information (unaudited)
Officers1
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 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 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 Real Return Fund | 49
Other information (unaudited)
Board consideration of investment management, advisory, and sub-advisory agreements:
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (each, a “Board” and collectively, the “Boards”) of each of Allspring Funds Trust (“Funds Trust”) and Allspring Master Trust (“Master Trust”, and collectively, the “Trusts”) must determine annually whether to approve the continuation of the Trusts’ investment management, advisory, and sub-advisory agreements, as applicable. In this regard, at a Board meeting held on May 15-17, 2023 (the “Meeting”), the Funds Trust Board, all the members of which have no direct or indirect interest in the investment management agreement and are not “interested persons” of the Trusts, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for the Allspring Real Return Fund, a portfolio of Funds Trust (the “Feeder Fund”), an investment management agreement (the “Feeder Fund Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”).
At the Meeting, the Master Trust Board, all the members of which have no direct or indirect interest in the investment advisory and sub-advisory agreements and are Independent Trustees, reviewed and approved: (i) an investment advisory agreement (the “Master Portfolio Advisory Agreement”) with Allspring Funds Management for the Allspring Real Return Portfolio, a portfolio of Master Trust (the “Master Portfolio”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Allspring Global Investments, LLC (the “Sub-Adviser”), an affiliate of Allspring Funds Management, for the Master Portfolio.
The Feeder Fund and the Master Portfolio are collectively referred to as the “Funds.” The Feeder Fund Management Agreement, the Master Portfolio Advisory Agreement, and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
The Feeder Fund is a feeder fund that invest substantially all of its assets in the Master Portfolio. The Master Portfolio has a substantially similar investment objective and substantially similar investment strategies to the Feeder Fund. Information provided to the Boards regarding the Feeder Fund is also applicable to the Master Portfolio, as relevant.
At the Meeting, the Boards considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at meeting of the Boards held in April 2023, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Boards have adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Boards in the discharge of their duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
The Boards noted that they initially approved the Advisory Agreements at a meeting of the Boards held in May 2021, all for a two-year term, in advance of the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC,1 a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. (the “Transaction”). The Trustees also noted that, while they did not specifically consider the continuation of the Advisory Agreements in 2022 as a result of the two-year term that was approved in 2021, the Trustees received and considered certain information at a meeting of the Boards held in April 2022 that was applicable to the Advisory Agreements, including an overview and financial review of the Allspring Global Investments business, information regarding certain ancillary agreements that were approved by the Boards at the April 2022 Board meeting, and comparative data regarding Fund fees and expenses.
In providing information to the Boards, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Boards’ annual contract renewal process earlier in 2023. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Boards considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Boards reviewed reports of Allspring Funds Management at each of their quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Boards and the teams mentioned above confer with portfolio managers at various times throughout the year. The Boards did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Funds Trust Board unanimously determined that the compensation payable to Allspring Funds Management was reasonable, and approved the continuation of the Feeder Fund Management Agreement for a one-year term. Additionally, after its deliberations, the Master Trust Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser was reasonable, and approved the continuation of the Master Portfolio Advisory Agreement and the Sub-Advisory Agreement, each for a one-year term. The Boards considered the approval of the Advisory Agreements for the Funds as part of their consideration of agreements for funds across the complex, but their approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Boards in support of their approvals.
1
The trade name for the asset management firm that includes Allspring Funds Management and the Sub-Adviser is “Allspring Global Investments.”
50 | Allspring Real Return Fund
Other information (unaudited)
Nature, Extent, and Quality of Services
The Boards received and considered various information regarding the nature, extent, and quality of services provided to the Feeder Fund and the Master Portfolio, as applicable, by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Feeder Fund Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business. The Boards also considered information about retention arrangements with respect to key personnel of Allspring Global Investments that were put in place in connection with the Transaction. The Boards took into account information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the Transaction under a transition services agreement and the anticipated timeline for exiting the transition services agreement. In addition, the Boards received and considered information about the full range of services provided to the Fund and the Master Portfolio by Allspring Funds Management and its affiliates.
The Boards considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Master Portfolio. The Boards evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
The Boards further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Boards received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, and Allspring Funds Management’s role as administrator of the Funds’ liquidity risk management programs. The Boards also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund Investment Performance and Expenses
The Boards considered the investment performance results for each of the Funds over various time periods ended December 31, 2022. The Boards considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to the Feeder Fund (the “Universe”), and in comparison to the Feeder Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Boards received a description of the methodology used by Broadridge to select the mutual funds in the performance Universe. The Funds Trust Board noted that the investment performance of the Feeder Fund (Administrator Class) was lower than the average investment performance of its Universe for all periods under review. The Funds Trust Board also noted that the investment performance of the Feeder Fund was higher than its benchmark index, the Bloomberg U.S. TIPS Index, for all periods under review.
The Master Trust Board took note of the investment performance of the Master Portfolio in the context of reviewing the investment performance of the Feeder Fund.
The Funds Trust Board received information concerning, and discussed factors contributing to, the underperformance of the Feeder Fund relative to the Universe for the periods identified above. The Funds Trust Board took note of the explanations for the relative underperformance during these periods, including with respect to investment decisions and market factors that affected the Feeder Fund’s investment performance.
The Funds Trust Board also received and considered information regarding the Feeder Fund’s net operating expense ratios, which include fees and expenses of the Master Portfolio, and their various components, including actual management fees assessed at the Feeder Fund and Master Portfolio levels, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Funds Trust Board considered these ratios in comparison to the median ratios of funds in class-specific expense groups that were determined by Broadridge to be similar to the Feeder Fund (the “Groups”). The Funds Trust Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Groups and an explanation of how funds comprising expense groups and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Funds Trust Board noted that the net operating expense ratios of the Feeder Fund were lower than the median net operating expense ratios of the expense Groups for all share classes. The Funds Trust Board noted that Allspring Funds Management had agreed to reduce the net operating expense caps for the Feeder Fund’s Class A shares.
With respect to the Master Portfolio, the Master Trust Board reviewed the fee rates that are payable to Allspring Funds Management for investment advisory services (as discussed below), which are the only fees charged at the Master Portfolio level, relative to a corresponding expense Group.
The Boards took into account the Funds’ investment performance and expense information provided to them among the factors considered in deciding to re-approve the Advisory Agreements.
Investment Management, Advisory, and Sub-Advisory Fee Rates
The Funds Trust Board noted that Allspring Funds Management receives no advisory fees from the Feeder Fund as long as the Feeder Fund continues to invest all (or substantially all) of its assets in a single master portfolio. If the Feeder Fund were to change its investment structure so that it began investing
Allspring Real Return Fund | 51
Other information (unaudited)
in two or more master portfolios (a fund-of-funds), Allspring Funds Management would be entitled to receive an annual fee of 0.25% of the Feeder Fund’s average daily net assets for providing investment advisory services to the Feeder Fund, including allocating the Feeder Fund’s assets to the Master Portfolio.
The Funds Trust Board reviewed and considered the contractual fee rates that are payable by the Feeder Fund to Allspring Funds Management under the Feeder Fund Management Agreement for management services (other than investment advisory services), as well as the contractual fee rates payable by the Feeder Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which include, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rates”).
The Master Trust Board reviewed and considered the contractual investment advisory fee rate that is payable by the Master Portfolio to Allspring Funds Management for investment advisory services under the Master Portfolio Advisory Agreement (the “Advisory Agreement Rate”). The Master Trust Board also reviewed and considered the contractual investment sub-advisory fee rate that is payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services (the “Sub-Advisory Agreement Rate”).
Among other information reviewed by the Funds Trust Board was a comparison of the Feeder Fund’s Management Rate, which, for this purpose, includes the advisory fees paid at the Master Portfolio level, with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Funds Trust Board noted that the Management Rates of the Feeder Fund were lower than the sum of these average rates for the Feeder Fund’s expense Groups for all share classes.
The Master Trust Board reviewed a comparison of the Advisory Agreement Rate of the Master Portfolio with those of other funds in the Master Portfolio’s expense Group at a common asset level. The Master Trust Board noted that the Advisory Agreement Rate of the Master Portfolio was lower than the median rate for the Master Portfolio’s expense Group.
The Master Trust Board also received and considered information about the portions of the total management fees that were retained by Allspring Funds Management after payment of the fees to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of these amounts, the Master Trust Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services. Given the affiliation between Allspring Funds Management and the Sub-Adviser, the Master Trust Board ascribed limited relevance to the allocation of fees between them.
The Boards also received and considered information about the nature and extent of services offered and fee rates charged by Allspring Funds Management and the Sub-Adviser to other types of clients with investment strategies similar to those of the Funds. In this regard, the Boards received information about the significantly greater scope of services, and compliance, reporting and other legal burdens and risks of managing proprietary mutual funds compared with those associated with managing assets of other types of clients, including third-party sub-advised fund clients and non-mutual fund clients such as institutional separate accounts.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Funds Trust Board determined that the compensation payable to Allspring Funds Management under the Feeder Fund Management Agreement was reasonable, and the Master Trust Board determined that the compensation payable to Allspring Funds Management under the Master Portfolio Advisory Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
Profitability
The Boards received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole. The Master Trust Board noted that the Sub-Adviser’s profitability information with respect to providing services to the Master Portfolio and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses and differences in how Allspring Global Investments calculates its pre-tax profit metric versus the methodology used when Allspring Funds Management was part of Wells Fargo. It was noted that the impact of such differences had only minor impact on the financial results presented. Among other things, the Boards noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Based on their review, the Boards did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Funds to be at a level that would prevent the Boards from approving the continuation of the Advisory Agreements.
Based on their review, the Boards did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Funds to be at a level that would prevent the Boards from approving the continuation of the Advisory Agreements.
Economies of Scale
The Boards received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Funds, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders of the Funds. The Boards noted the existence of breakpoints in the Master Portfolio’s advisory fee structure and the Feeder Fund’s management fee structure, which operate generally to reduce the Funds’ expense ratios as the Funds grow in size, and the size of the
52 | Allspring Real Return Fund
Other information (unaudited)
Master Portfolio and the Feeder Fund, respectively, in relation to such breakpoints. The Boards considered that, in addition to advisory fee and management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways, including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
The Boards concluded that Allspring Funds Management’s arrangements with respect to each Fund, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Funds and their shareholders.
Other Benefits to Allspring Funds Management and the Sub-Adviser
The Boards received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, as a result of their relationships with the Funds. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Funds and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Funds. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it.
The Boards also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser and fees earned in the past by Allspring Funds Management and the Sub-Adviser from managing a private investment vehicle for the fund family’s securities lending collateral.
Based on their consideration of the factors and information they deemed relevant, including those described here, the Boards did not find that any ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, were unreasonable.
Conclusion
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Funds Trust Board unanimously determined that the compensation payable to Allspring Funds Management was reasonable, and approved the continuation of the Feeder Fund Management Agreement for a one-year term. Additionally, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Master Trust Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser was reasonable, and approved the continuation of the Master Portfolio Advisory Agreement and the Sub-Advisory Agreement, each for a one-year term.
Allspring Real Return Fund | 53
Other information (unaudited)
Liquidity risk management program
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Allspring Funds Trust (“Funds Trust”) has adopted and implemented a liquidity risk management program (the “Program”) on behalf of each of its series (other than the series that operate as money market funds), including the Fund, and Allspring Master Trust (“Master Trust” and together with Funds Trust, the “Trusts”) has adopted and implemented the Program on behalf of each of its series, including the Portfolio, which is reasonably designed to assess and manage the Fund’s and the Portfolio’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund or Portfolio is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund or Portfolio. The Trusts’ Boards of Trustees (the “Boards”) previously approved the designation of Allspring Funds Management, LLC (“Allspring Funds Management”), the Fund’s investment manager and the Portfolio’s investment adviser, to administer the Program, and Allspring Funds Management has established a Liquidity Risk Management Council (the “Council”) composed of personnel from multiple departments within Allspring Funds Management and its affiliates to assist Allspring Funds Management in the administration of the Program.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s and the Portfolio’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s and the Portfolio’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent the Fund or the Portfolio does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s or Portfolio’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if the Fund or the Portfolio has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s or the Portfolio’s “highly liquid investments” below its HLIM; and (6) periodic reporting to the Boards.
At a meeting of the Boards held on May 16-17, 2023, the Boards received and reviewed a written report (the “Report”) from Allspring Funds Management that, among other things, addressed the operation of the Program and assessed its adequacy and effectiveness for the period from January 1, 2022 through December 31, 2022 (the “Reporting Period”). The Report noted significant liquidity events impacting the Funds and Portfolios related to extended foreign market holidays as well as the difficulty of trading and settlement of most Russia-related securities due to sanctions activity. The Report noted that there were no material changes to the Program during the Reporting Period.
Allspring Funds Management determined in the Report that the Program has been implemented and operates effectively to manage each Fund’s and Portfolio’s, including the Fund’s and the Portfolio’s, liquidity risk, and Allspring Funds Management continues to believe that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s and the Portfolio’s liquidity developments.
There can be no assurance that the Program will achieve its objectives under all circumstances in the future. With respect to the Fund, please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other risks to which an investment in the Fund may be subject.
54 | Allspring Real Return 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.
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-06072023-xnnhxyxi 07-23
AR1753 05-23
AR1753 05-23
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The views expressed and any forward-looking statements are as of May 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 Company Growth Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Small Company Growth Fund for the 12-month period that ended May 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. The market was focused on persistently high inflation 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. Markets received a boost in December with the removal of China’s strict COVID-19 lockdowns. In March 2023, a new wave of market anxiety resulted from several bank failures and unease over the possibility of more rate hikes. However, investors regained confidence and markets finished the period in relative calm.
For the 12-month period, stocks and bonds—both domestic U.S. and global—had mixed results. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 2.92%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 lost 1.41%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a return of -8.49%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -2.14%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 6.49%, the Bloomberg Municipal Bond Index6 gained 0.49%, and the ICE BofA U.S. High Yield Index7 returned -0.09%.
High inflation and central bank rate hikes rocked markets.
In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Federal Reserve (Fed) raised its short-term rate by 0.75% in June. Meanwhile, the U.S. unemployment rate remained historically low 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 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, 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.
“ In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring 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 the 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.
2 | Allspring Small Company Growth Fund
Letter to shareholders (unaudited)
August was yet another broadly challenging month for financial markets. 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 was the resilient U.S. jobs 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.
In September, all asset classes suffered further 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. 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 increasing 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 declining overall in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever, with generally flat 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 wound 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.
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 had 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 (ECB) both raised rates by 0.50%.
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 Company Growth Fund | 3
Letter to shareholders (unaudited)
“ 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 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 banking industry turmoil created an additional challenge for central banks in balancing inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. 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.
Economic data released in April pointed to global resilience, as Purchasing Managers Indexes1 in the U.S., U.K., and eurozone beat expectations, and China reported first-quarter annualized economic growth of 4.5%. Despite banking industry stress, developed market stocks had monthly gains. The U.S. labor market remained strong, with a 3.5% jobless rate and monthly payroll gains above 200,000. However, uncertainty and inflationary concerns weighed on investors in the U.S. and abroad.
May was marked by a divergence between expanding activity in services and an overall contraction in manufacturing activity in the U.S., U.K., and eurozone. Core inflation remained elevated in the U.S. and Europe, despite the ongoing efforts of the Fed and ECB, which included rate hikes of 0.25% by both in May. Stubborn inflation and the resilient U.S. labor market led to expectations of further interest rate hikes, overall monthly declines across bond indexes, and mixed results for stocks in May. Investor worries over a U.S. debt ceiling impasse were modest, and market confidence was buoyed by a deal in late May to avert a potential U.S. debt default.
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 Company Growth Fund
Letter to shareholders (unaudited)
Notice to Shareholders |
Beginning in July 2024, the Fund will be required by the Securities and Exchange Commission to send shareholders a paper copy of a new tailored shareholder report in place of the full shareholder report that you are now receiving. The tailored shareholder report will contain concise information about the Fund, including certain expense and performance information and fund statistics. If you wish to receive this new tailored shareholder report electronically, please follow the instructions on the back cover of this report. |
Other information that is currently included in the shareholder report, such as the Fund’s financial statements, will be available online and upon request, free of charge, in paper or electronic format. |
Allspring Small Company Growth Fund | 5
Performance highlights (unaudited)
Performance highlights
Investment objective | The Fund seeks long-term capital appreciation. |
Manager | Allspring Funds Management, LLC |
Subadviser for the affiliated master portfolio* | Peregrine Capital Management, LLC |
Portfolio managers | William A. Grierson, CFA, Paul E. von Kuster, CFA, Allison Lewis, CFA†, Ryan H. Smith, CFA, Samuel D. Smith, CFA |
Average annual total returns (%) as of May 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 | Net2 | |
Class A (WFSAX) | 1-30-2004 | -5.96 | 3.27 | 8.12 | -0.22 | 4.50 | 8.76 | 1.33 | 1.28 |
Class C (WSMCX) | 1-30-2004 | -1.92 | 3.75 | 8.13 | -0.92 | 3.75 | 8.13 | 2.08 | 2.03 |
Class R6 (WSCRX)3 | 10-31-2014 | – | – | – | 0.21 ♠ | 4.95 | 9.24 | 0.91 | 0.86 |
Administrator Class (NVSCX) | 11-11-1994 | – | – | – | -0.11 | 4.61 | 8.91 | 1.26 | 1.19 |
Institutional Class (WSCGX) | 3-31-2008 | – | – | – | 0.16 | 4.88 | 9.18 | 1.01 | 0.94 |
Russell 2000® Growth Index4 | – | – | – | – | 2.68 | 2.74 | 7.90 | – | – |
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.
♠ | Total return differs from the return in the Financial Highlights in this report. The total return presented is calculated based on the NAV at which the shareholder transactions were processed. The NAV and total return presented in the Financial Highlights reflects certain adjustments made to the net assets of the Fund that are necessary under U.S. generally accepted accounting principles. |
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 September 30, 2023 (September 30, 2024 for Class A and Class C), to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 1.28% for Class A, 2.03% for Class C, 0.86% for Class R6, 1.19% for Administrator Class and 0.94% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any) from funds in which the affiliated master portfolio invests, and extraordinary expenses are excluded from the expense caps. Net expenses from the affiliated master portfolio are included in 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. 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. Consult the Fund’s prospectus for additional information on these and other risks.
* | The Fund is a feeder fund in a master-feeder structure that invests substantially all of its assets in a single affiliated master portfolio of the Allspring Master Trust with a substantially identical investment objective and substantially similar investment strategies. References to the investment activities of the Fund are intended to refer to the investment activities of the affiliated master portfolio in which it invests. |
† | Ms. Lewis became a portfolio manager of the Fund on June 30, 2023. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. | |
6 | Allspring Small Company Growth Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of May 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 Small Company 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 May 31, 2023.
•Stock selection within the health care and industrials sectors were the largest detractors from performance.
•Positive stock selection in the consumer staples and consumer discretionary sectors were the largest contributors to performance in the period.
The Fed, inflation, and the economic outlook have dominated the market narrative.
Early in the period, investors were skeptical of the Federal Reserve’s (Fed’s) hawkish position that aimed to curb 40-year-high inflation as it had lost credibility by insisting that inflation was only transitory. As the Fed realized its error, the increased pace and magnitude of the tightening of financial conditions in order to tame inflation “by any means necessary” was a persistent headwind to market returns. As a result, rate increases, weakening economic indicators, compression of stock valuations, and downward earnings revisions caused a significant sell-off in financial markets. Asset correlations also neared 40-year-highs as equity and fixed income correlations turned positive for the first time in more than 20 years. To make matters worse, the failures of SVB Financial Group and Signature Bank, two prominent regional lenders, were additional unforeseen shocks that further muddied forward visibility in March 2023.
Ten largest holdings (%) as of May 31, 20231 | |
PTC, Inc. | 1.81 |
ICON PLC | 1.64 |
elf Beauty, Inc. | 1.61 |
KBR, Inc. | 1.46 |
International Game Technology PLC | 1.45 |
Box, Inc. Class A | 1.38 |
Element Solutions, Inc. | 1.37 |
Ciena Corp. | 1.36 |
SS&C Technologies Holdings, Inc. | 1.35 |
FTI Consulting, Inc. | 1.31 |
1 | Each holding represents the Fund’s allocable portion of the affiliated master portfolio security. Figures represent each holding as a percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
The Fund was overweight industrials, information technology (IT), and financials and underweight consumer discretionary and energy.
The Fund remained consistent with its long-term discipline of investing in rapidly growing companies purchased at attractive valuations. Relative to the benchmark, the Fund’s largest overweight positions were in the industrials, IT, and financials sectors, where valuations remain attractive. Conversely, the Fund was most underweight the consumer discretionary and energy sectors.
Stock selection in health care and industrials were the leading detractors.
Health care and industrials were the leading detracting sectors for the fiscal year. Underperformance in health care was driven by negative stock selection in biotechnology and life science tools and services. An underweight to biotechnology also detracted, as the group outperformed meaningfully after bottoming in June 2022. Within biotechnology, precommercial and speculative companies, which the Fund is under-indexed to, drove outsized returns. Additionally, headwinds within the life sciences industry hurt Syneos Health, Inc.;* Avantor, Inc.; Azenta, Inc.; and ICON Plc.
Underperformance in industrials was driven by weakness in the building products, construction, and engineering (C&E), and aerospace and defense industries. Building products and C&E holdings underperformed as recession fears began to mount while the Fund’s aerospace and defense holdings were affected by company-specific program delays.
Sector allocation as of May 31, 20231 |
1 | Figures represent the sector allocation of the affiliated master portfolio as a percentage of the long-term investments of the affiliated master portfolio. Allocations are subject to change and may have changed since the date specified. |
*
This security was no longer held at the end of the reporting period.
8 | Allspring Small Company Growth Fund
Performance highlights (unaudited)
Consumer staples and consumer discretionary were leading contributors.
Consumer staples and consumer discretionary were the top-contributing sectors for the fiscal year. Strong performance in consumer staples was driven by stock selection in personal care products and food products. Notable stock contributors included elf Beauty, Inc., a cosmetic and beauty products company, and Lamb Weston Holdings, Inc., a leading producer of frozen potato products. Outperformance in the consumer discretionary sector was driven by stock selection within broadline and specialty retail. Positive returns were generated from exposure to value/off-price retailers such as Academy Sports and Outdoors Inc.; Five Below, Inc.; and Ollie’s Bargain Outlet Holdings Inc., which benefited from consumers trading down in response to rising inflation and economic uncertainty.
Small-cap growth stocks continue to trade at reasonable valuations.
The Fed, an increased potential for a recession, and newly surfaced regional bank issues are risk factors worthy of heightened scrutiny when evaluating company fundamental trajectories. This is true in every market
environment, where known risks are incorporated into company valuations. However, in macro-focused and risk-averse environments like the ones seen over the past year, these known risks can overshoot, creating excellent opportunities for information gaps. The Fund has seen many market environments with myriad different risks. Through the diligent implementation of our discipline, in the long-term we have not only survived, we also thrived by reliably sourcing high-growth companies at attractive valuations. We see many favorable opportunities in the current market environment and we are excited to capitalize on a growing number of large information gaps.
Allspring Small Company Growth Fund | 9
Fund expenses (unaudited)
Fund expenses
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 December 1, 2022 to May 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 the 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 12-1-2022 | Ending account value 5-31-2023 | Expenses paid during the period1, 2 | Annualized net expense ratio2 | |
Class A | ||||
Actual | $1,000.00 | $1,000.02 | $6.43 | 1.29 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,018.50 | $6.49 | 1.29 % |
Class C | ||||
Actual | $1,000.00 | $999.99 | $10.17 | 2.04 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,014.76 | $10.25 | 2.04 % |
Class R6 | ||||
Actual | $1,000.00 | $1,000.04 | $4.29 | 0.86 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,020.64 | $4.33 | 0.86 % |
Administrator Class | ||||
Actual | $1,000.00 | $1,000.03 | $5.93 | 1.19 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,019.00 | $5.99 | 1.19 % |
Institutional Class | ||||
Actual | $1,000.00 | $1,000.04 | $4.69 | 0.94 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,020.24 | $4.73 | 0.94 % |
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).
2 Amounts reflect net expenses allocated from the affiliated Master Portfolio in which the Fund invests.
10 | Allspring Small Company Growth Fund
Portfolio of investments—May 31, 2023
Portfolio of investments
Value | ||||||
Investment companies: 99.84% | ||||||
Affiliated master portfolio: 99.84% | ||||||
Allspring Small Company Growth Portfolio | $700,121,306 | |||||
Total investment companies (Cost $581,049,760) | 700,121,306 | |||||
Total investments in securities (Cost $581,049,760) | 99.84 % | 700,121,306 | ||||
Other assets and liabilities, net | 0.16 | 1,154,003 | ||||
Total net assets | 100.00 % | $701,275,309 | ||||
Transactions with the affiliated Master Portfolio were as follows:
% of ownership, beginning of period | % of ownership, end of period | Net realized gains (losses) on investments allocated from affiliated Master Portfolio | Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolio | Dividends allocated from affiliated Master Portfolio | Interest allocated from affiliated Master Portfolio | Affiliated Income Allocated from affiliated Master Portfolio | Value, end of period | |
Allspring Small Company Growth Portfolio | 97.57 % | 97.57 % | $29,634,010 | $(31,050,649 ) | $2,933,185 | $398 | $707,998 | $700,121,306 |
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Growth Fund | 11
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in affiliated Master Portfolio, at value (cost $581,049,760) | $700,121,306 |
Receivable for Fund shares sold | 1,826,686 |
Receivable from manager | 17,412 |
Prepaid expenses and other assets | 39,307 |
Total assets | 702,004,711 |
Liabilities | |
Payable for Fund shares redeemed | 576,992 |
Administration fees payable | 61,034 |
Distribution fee payable | 1,464 |
Trustees’ fees and expenses payable | 693 |
Accrued expenses and other liabilities | 89,219 |
Total liabilities | 729,402 |
Total net assets | $701,275,309 |
Net assets consist of | |
Paid-in capital | $579,540,596 |
Total distributable earnings | 121,734,713 |
Total net assets | $701,275,309 |
Computation of net asset value and offering price per share | |
Net assets–Class A | $28,813,262 |
Shares outstanding–Class A1 | 1,035,172 |
Net asset value per share–Class A | $27.83 |
Maximum offering price per share – Class A2 | $29.53 |
Net assets–Class C | $2,304,628 |
Shares outstanding–Class C1 | 124,933 |
Net asset value per share–Class C | $18.45 |
Net assets–Class R6 | $218,784,751 |
Shares outstanding–Class R61 | 6,511,205 |
Net asset value per share–Class R6 | $33.60 |
Net assets–Administrator Class | $40,292,544 |
Shares outstanding–Administrator Class1 | 1,305,982 |
Net asset value per share–Administrator Class | $30.85 |
Net assets–Institutional Class | $411,080,124 |
Shares outstanding–Institutional Class1 | 12,360,491 |
Net asset value per share–Institutional Class | $33.26 |
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.
12 | Allspring Small Company Growth Fund
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Dividends allocated from affiliated Master Portfolio (net of foreign withholding taxes of $6,617) | $2,933,185 |
Affiliated income allocated from affiliated Master Portfolio | 707,998 |
Interest allocated from affiliated Master Portfolio | 398 |
Expenses allocated from affiliated Master Portfolio | (5,827,191 ) |
Total investment income | (2,185,610 ) |
Expenses | |
Management fee | 356,726 |
Administration fees | |
Class A | 64,801 |
Class C | 7,587 |
Class R6 | 66,248 |
Administrator Class | 54,011 |
Institutional Class | 541,590 |
Shareholder servicing fees | |
Class A | 77,145 |
Class C | 8,958 |
Administrator Class | 103,719 |
Distribution fee | |
Class C | 26,648 |
Custody and accounting fees | 24,275 |
Professional fees | 42,482 |
Registration fees | 40,234 |
Shareholder report expenses | 65,109 |
Trustees’ fees and expenses | 21,093 |
Other fees and expenses | 8,608 |
Total expenses | 1,509,234 |
Less: Fee waivers and/or expense reimbursements | |
Fund-level | (356,704 ) |
Class A | (4,859 ) |
Class R6 | (33,037 ) |
Administrator Class | (14,446 ) |
Institutional Class | (146,183 ) |
Net expenses | 954,005 |
Net investment loss | (3,139,615 ) |
Realized and unrealized gains (losses) on investments | |
Net realized gains on investments allocated from affiliated Master Portfolio | 29,634,010 |
Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolio | (31,050,649 ) |
Net realized and unrealized gains (losses) on investments | (1,416,639 ) |
Net decrease in net assets resulting from operations | $(4,556,254 ) |
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Growth Fund | 13
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment loss | $(3,139,615 ) | $(5,624,754 ) | ||
Net realized gains on investments | 29,634,010 | 234,292,155 | ||
Net change in unrealized gains (losses) on investments | (31,050,649 ) | (380,610,924 ) | ||
Net decrease in net assets resulting from operations | (4,556,254 ) | (151,943,523 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class A | (2,956,608 ) | (25,935,297 ) | ||
Class C | (524,720 ) | (5,561,323 ) | ||
Class R6 | (18,290,276 ) | (100,466,883 ) | ||
Administrator Class | (3,736,177 ) | (21,521,432 ) | ||
Institutional Class | (31,910,643 ) | (248,029,970 ) | ||
Total distributions to shareholders | (57,418,424 ) | (401,514,905 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class A | 226,653 | 6,618,593 | 600,158 | 33,843,292 |
Class C | 8,202 | 151,573 | 89,397 | 4,393,866 |
Class R6 | 939,968 | 32,682,134 | 837,876 | 41,916,286 |
Administrator Class | 179,672 | 5,855,715 | 132,770 | 6,666,051 |
Institutional Class | 5,808,569 | 199,389,086 | 8,331,378 | 426,789,587 |
244,697,101 | 513,609,082 | |||
Reinvestment of distributions | ||||
Class A | 94,538 | 2,624,367 | 643,072 | 23,980,172 |
Class C | 27,185 | 501,841 | 206,792 | 5,422,079 |
Class R6 | 535,212 | 17,897,479 | 2,119,772 | 93,248,751 |
Administrator Class | 121,376 | 3,732,301 | 525,535 | 21,483,861 |
Institutional Class | 460,271 | 15,239,567 | 3,043,545 | 132,759,448 |
39,995,555 | 276,894,311 | |||
Payment for shares redeemed | ||||
Class A | (637,477 ) | (18,452,346 ) | (611,917 ) | (25,389,359 ) |
Class C | (188,144 ) | (3,694,553 ) | (200,817 ) | (6,158,661 ) |
Class R6 | (1,131,878 ) | (39,699,243 ) | (2,783,941 ) | (175,259,458 ) |
Administrator Class | (242,658 ) | (7,818,670 ) | (366,235 ) | (17,779,520 ) |
Institutional Class | (7,571,990 ) | (262,535,497 ) | (9,833,729 ) | (544,346,151 ) |
(332,200,309 ) | (768,933,149 ) | |||
Net increase (decrease) in net assets resulting from capital share transactions | (47,507,653 ) | 21,570,244 | ||
Total decrease in net assets | (109,482,331 ) | (531,888,184 ) | ||
Net assets | ||||
Beginning of period | 810,757,640 | 1,342,645,824 | ||
End of period | $701,275,309 | $810,757,640 | ||
The accompanying notes are an integral part of these financial statements.
14 | Allspring Small Company Growth Fund
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $30.93 | $61.44 | $46.62 | $48.98 | $56.66 |
Net investment loss | (0.23 )1 | (0.47 )1 | (0.47 )1 | (0.34 )1 | (0.36 ) |
Net realized and unrealized gains (losses) on investments | 0.15 | (5.55 ) | 24.27 | 2.49 | (3.22 ) |
Total from investment operations | (0.08 ) | (6.02 ) | 23.80 | 2.15 | (3.58 ) |
Distributions to shareholders from | |||||
Net realized gains | (3.02 ) | (24.49 ) | (8.98 ) | (4.51 ) | (4.10 ) |
Net asset value, end of period | $27.83 | $30.93 | $61.44 | $46.62 | $48.98 |
Total return2 | (0.22 )% | (16.59 )% | 53.84 % | 3.70 % | (6.13 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.36 % | 1.34 % | 1.33 % | 1.32 % | 1.31 % |
Net expenses | 1.29 % | 1.29 % | 1.29 % | 1.32 % | 1.31 % |
Net investment loss | (0.78 )% | (1.04 )% | (0.85 )% | (0.69 )% | (0.63 )% |
Supplemental data | |||||
Portfolio turnover rate3 | 37 % | 61 % | 44 % | 41 % | 54 % |
Net assets, end of period (000s omitted) | $28,813 | $41,795 | $44,249 | $36,534 | $64,182 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.82% |
Year ended May 31, 2022 | 0.81% |
Year ended May 31, 2021 | 0.79% |
Year ended May 31, 2020 | 0.78% |
Year ended May 31, 2019 | 0.78% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Growth Fund | 15
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $21.67 | $50.65 | $39.84 | $42.75 | $50.38 |
Net investment loss | (0.32 )1 | (0.60 )1 | (0.75 )1 | (0.61 )1 | (0.66 )1 |
Net realized and unrealized gains (losses) on investments | 0.12 | (3.89 ) | 20.54 | 2.21 | (2.87 ) |
Total from investment operations | (0.20 ) | (4.49 ) | 19.79 | 1.60 | (3.53 ) |
Distributions to shareholders from | |||||
Net realized gains | (3.02 ) | (24.49 ) | (8.98 ) | (4.51 ) | (4.10 ) |
Net asset value, end of period | $18.45 | $21.67 | $50.65 | $39.84 | $42.75 |
Total return2 | (0.92 )% | (17.25 )% | 52.86 % | 2.92 % | (6.82 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 2.09 % | 2.08 % | 2.08 % | 2.07 % | 2.06 % |
Net expenses | 2.04 % | 2.04 % | 2.04 % | 2.07 % | 2.06 % |
Net investment loss | (1.56 )% | (1.71 )% | (1.60 )% | (1.44 )% | (1.38 )% |
Supplemental data | |||||
Portfolio turnover rate3 | 37 % | 61 % | 44 % | 41 % | 54 % |
Net assets, end of period (000s omitted) | $2,305 | $6,018 | $9,235 | $9,336 | $13,968 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.82% |
Year ended May 31, 2022 | 0.81% |
Year ended May 31, 2021 | 0.79% |
Year ended May 31, 2020 | 0.78% |
Year ended May 31, 2019 | 0.78% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
16 | Allspring Small Company Growth Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class R6 | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $36.55 | $67.95 | $50.64 | $52.65 | $60.31 |
Net investment loss | (0.12 )1 | (0.26 )1 | (0.17 ) | (0.14 )1 | (0.12 ) |
Net realized and unrealized gains (losses) on investments | 0.19 | (6.65 ) | 26.46 | 2.64 | (3.44 ) |
Total from investment operations | 0.07 | (6.91 ) | 26.29 | 2.50 | (3.56 ) |
Distributions to shareholders from | |||||
Net realized gains | (3.02 ) | (24.49 ) | (8.98 ) | (4.51 ) | (4.10 ) |
Net asset value, end of period | $33.60 | $36.55 | $67.95 | $50.64 | $52.65 |
Total return | 0.24 % | (16.24 )% | 54.53 % | 4.12 % | (5.73 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 0.92 % | 0.91 % | 0.90 % | 0.90 % | 0.88 % |
Net expenses | 0.86 % | 0.86 % | 0.86 % | 0.89 % | 0.88 % |
Net investment loss | (0.35 )% | (0.48 )% | (0.41 )% | (0.27 )% | (0.20 )% |
Supplemental data | |||||
Portfolio turnover rate2 | 37 % | 61 % | 44 % | 41 % | 54 % |
Net assets, end of period (000s omitted) | $218,785 | $225,464 | $407,311 | $462,050 | $564,516 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.82% |
Year ended May 31, 2022 | 0.81% |
Year ended May 31, 2021 | 0.79% |
Year ended May 31, 2020 | 0.78% |
Year ended May 31, 2019 | 0.78% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Growth Fund | 17
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $33.92 | $64.98 | $48.87 | $51.10 | $58.85 |
Net investment loss | (0.22 )1 | (0.47 )1 | (0.44 )1 | (0.29 )1 | (0.29 )1 |
Net realized and unrealized gains (losses) on investments | 0.17 | (6.10 ) | 25.53 | 2.57 | (3.36 ) |
Total from investment operations | (0.05 ) | (6.57 ) | 25.09 | 2.28 | (3.65 ) |
Distributions to shareholders from | |||||
Net realized gains | (3.02 ) | (24.49 ) | (8.98 ) | (4.51 ) | (4.10 ) |
Net asset value, end of period | $30.85 | $33.92 | $64.98 | $48.87 | $51.10 |
Total return | (0.11 )% | (16.52 )% | 54.02 % | 3.80 % | (6.02 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.27 % | 1.26 % | 1.25 % | 1.24 % | 1.23 % |
Net expenses | 1.19 % | 1.19 % | 1.19 % | 1.20 % | 1.20 % |
Net investment loss | (0.68 )% | (0.93 )% | (0.74 )% | (0.57 )% | (0.51 )% |
Supplemental data | |||||
Portfolio turnover rate2 | 37 % | 61 % | 44 % | 41 % | 54 % |
Net assets, end of period (000s omitted) | $40,293 | $42,317 | $62,092 | $55,917 | $87,850 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.82% |
Year ended May 31, 2022 | 0.81% |
Year ended May 31, 2021 | 0.79% |
Year ended May 31, 2020 | 0.78% |
Year ended May 31, 2019 | 0.78% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
18 | Allspring Small Company Growth Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Institutional Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $36.24 | $67.62 | $50.47 | $52.51 | $60.20 |
Net investment loss | (0.15 )1 | (0.27 )1 | (0.29 ) | (0.17 )1 | (0.15 ) |
Net realized and unrealized gains (losses) on investments | 0.19 | (6.62 ) | 26.42 | 2.64 | (3.44 ) |
Total from investment operations | 0.04 | (6.89 ) | 26.13 | 2.47 | (3.59 ) |
Distributions to shareholders from | |||||
Net realized gains | (3.02 ) | (24.49 ) | (8.98 ) | (4.51 ) | (4.10 ) |
Net asset value, end of period | $33.26 | $36.24 | $67.62 | $50.47 | $52.51 |
Total return | 0.16 % | (16.31 )% | 54.39 % | 4.07 % | (5.77 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.03 % | 1.01 % | 1.00 % | 1.00 % | 0.98 % |
Net expenses | 0.94 % | 0.94 % | 0.94 % | 0.95 % | 0.95 % |
Net investment loss | (0.43 )% | (0.51 )% | (0.49 )% | (0.32 )% | (0.26 )% |
Supplemental data | |||||
Portfolio turnover rate2 | 37 % | 61 % | 44 % | 41 % | 54 % |
Net assets, end of period (000s omitted) | $411,080 | $495,163 | $819,760 | $793,581 | $1,047,883 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.82% |
Year ended May 31, 2022 | 0.81% |
Year ended May 31, 2021 | 0.79% |
Year ended May 31, 2020 | 0.78% |
Year ended May 31, 2019 | 0.78% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Growth Fund | 19
Notes to financial statements
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 Company Growth Fund (the “Fund”) which is a diversified series of the Trust.
The Fund is a feeder fund in a master-feeder structure that invests substantially all of its assets in a single master portfolio with a substantially identical investment objective and substantially similar investment strategies. The Fund invests in Allspring Small Company Growth Portfolio, a separate diversified portfolio (the “affiliated Master Portfolio”) of Allspring Master Trust, a registered open-end management investment company. As of May 31, 2023, the Fund owned 97.57% of Allspring Small Company Growth Portfolio. The affiliated Master Portfolio directly acquires portfolio securities and the Fund acquires an indirect interest in those securities. The Fund accounts for its investment in the affiliated Master Portfolio as a partnership investment and records on a daily basis its share of the affiliated Master Portfolio’s income, expense and realized and unrealized gains and losses. The financial statements of the affiliated Master Portfolio for the year ended May 31, 2023 are included in this report and should be read in conjunction with the Fund’s financial statements.
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.
Investments in the affiliated Master Portfolio are valued daily based on the Fund’s proportionate share of the affiliated Master Portfolio’s net assets, which are also valued daily.
Investments which are not valued using the method 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.
Investment transactions, income and expenses
Investments in the affiliated Master Portfolio are recorded on a trade date basis. The Fund records daily its proportionate share of the affiliated Master Portfolio’s income, expenses and realized and unrealized gains or losses. The Fund also accrues its own expenses.
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.
20 | Allspring Small Company Growth Fund
Notes to financial statements
As of May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $596,456,632 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $103,664,674 |
Gross unrealized losses | 0 |
Net unrealized gains | $103,664,674 |
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 difference causing such reclassification is due to net operating losses. At May 31, 2023, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statements of Assets and Liabilities:
Paid-in capital | Total distributable earnings |
$(4,248,166 ) | $4,248,166 |
As of May 31, 2023, the Fund had a qualified late-year ordinary loss of $950,497 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
At May 31, 2023, the Fund’s investment in the affiliated Master Portfolio was measured at fair value using the net asset value per share (or its equivalent) as a practical expedient. The investment objective and fair value of the affiliated Master Portfolio is as follows:
Affiliated Master Portfolio | Investment objective | Fair value of affiliated Master Portfolio |
Allspring Small Company Growth Portfolio | Seek long-term capital appreciation | $700,121,306 |
The affiliated Master Portfolio does not have a redemption period notice, can be redeemed daily and does not have any unfunded commitments.
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 $5 billion | 0.050 % |
Next $5 billion | 0.040 |
Over $10 billion | 0.030 |
For the year ended May 31, 2023, the management fee was equivalent to an annual rate of 0.05% of the Fund’s average daily net assets.
Allspring Funds Management also serves as the adviser to the affiliated Master Portfolio and is entitled to receive a fee from the affiliated Master Portfolio for those services.
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
Allspring Small Company Growth Fund | 21
Notes to financial statements
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. Net expenses from the affiliated Master Portfolio are included in the expense caps. Allspring Funds Management has contractually committed through September 30, 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 May 31, 2023, the contractual expense caps are as follows:
EXPENSE RATIO CAPS | |
Class A | 1.29 % |
Class C | 2.04 |
Class R6 | 0.86 |
Administrator Class | 1.19 |
Institutional Class | 0.94 |
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 May 31, 2023, Allspring Funds Distributor received $1,035 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 May 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.
5.
INVESTMENT PORTFOLIO TRANSACTIONS
The Fund seeks to achieve its investment objective by investing substantially all of its assets in the affiliated Master Portfolio. Purchases and sales have been calculated by multiplying the Fund’s ownership percentage of the affiliated Master Portfolio at the end of the period by the affiliated Master Portfolio’s purchases and sales. Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the year ended May 31, 2023 were $259,301,554 and $348,989,594, 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 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 May 31, 2023, there were no borrowings by the Fund under the agreement.
22 | Allspring Small Company Growth Fund
Notes to financial statements
7.
DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid during the years ended May 31, 2023 and May 31, 2022 were as follows:
Year ended May 31 | ||
2023 | 2022 | |
Ordinary income | $0 | $41,089,472 |
Long-term capital gain | 57,418,424 | 360,425,433 |
As of May 31, 2023, the components of distributable earnings on a tax basis were as follows:
Undistributed long-term gain | Unrealized gains | Late-year ordinary losses deferred |
$19,020,536 | $103,664,674 | $(950,497 ) |
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.
Allspring Small Company Growth Fund | 23
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 Company Growth Fund (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of May 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 May 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 interests held as of May 31, 2023, by correspondence with the transfer agent of the master portfolio. 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
July 27, 2023
24 | Allspring Small Company Growth Fund
Portfolio of investments—May 31, 2023
Portfolio of investments
Shares | Value | |||||
Common stocks: 96.66% | ||||||
Communication services: 0.41% | ||||||
Entertainment: 0.41% | ||||||
Lions Gate Entertainment Corp. Class B† | 303,834 | $2,944,151 | ||||
Consumer discretionary: 8.66% | ||||||
Automobile components: 0.54% | ||||||
Fox Factory Holding Corp.† | 43,818 | 3,896,296 | ||||
Broadline retail: 0.79% | ||||||
Ollie’s Bargain Outlet Holdings, Inc.† | 103,239 | 5,690,534 | ||||
Hotels, restaurants & leisure: 2.51% | ||||||
Bowlero Corp.† | 194,783 | 2,232,213 | ||||
International Game Technology PLC | 423,538 | 10,389,387 | ||||
Papa John’s International, Inc. | 76,582 | 5,369,164 | ||||
17,990,764 | ||||||
Household durables: 1.08% | ||||||
Skyline Champion Corp.† | 103,362 | 6,008,433 | ||||
Sonos, Inc.† | 119,588 | 1,737,614 | ||||
7,746,047 | ||||||
Leisure products: 0.63% | ||||||
Topgolf Callaway Brands Corp.† | 262,116 | 4,474,320 | ||||
Specialty retail: 3.11% | ||||||
Academy Sports & Outdoors, Inc. | 116,120 | 5,685,235 | ||||
Boot Barn Holdings, Inc.† | 58,228 | 3,937,377 | ||||
Burlington Stores, Inc.† | 24,980 | 3,758,491 | ||||
Five Below, Inc.† | 35,822 | 6,180,012 | ||||
Monro, Inc. | 66,873 | 2,766,536 | ||||
22,327,651 | ||||||
Consumer staples: 4.69% | ||||||
Consumer staples distribution & retail : 1.11% | ||||||
Performance Food Group Co.† | 144,391 | 7,983,378 | ||||
Food products: 1.97% | ||||||
Lamb Weston Holdings, Inc. | 73,337 | 8,155,075 | ||||
TreeHouse Foods, Inc.† | 125,881 | 5,960,465 | ||||
14,115,540 | ||||||
Personal care products: 1.61% | ||||||
elf Beauty, Inc.† | 111,207 | 11,567,752 | ||||
Energy: 1.92% | ||||||
Energy equipment & services: 0.77% | ||||||
ChampionX Corp. | 219,102 | 5,534,517 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Growth Portfolio | 25
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Oil, gas & consumable fuels: 1.15% | ||||||
Callon Petroleum Co.† | 120,498 | $3,690,853 | ||||
Ranger Oil Corp. Class A | 124,265 | 4,566,739 | ||||
8,257,592 | ||||||
Financials: 9.19% | ||||||
Banks: 0.81% | ||||||
Triumph Financial, Inc.† | 111,966 | 5,813,274 | ||||
Capital markets: 3.03% | ||||||
Evercore, Inc. Class A | 54,811 | 5,916,848 | ||||
Focus Financial Partners, Inc. Class A† | 84,435 | 4,398,219 | ||||
Stifel Financial Corp. | 140,992 | 7,834,925 | ||||
Virtu Financial, Inc. Class A | 201,849 | 3,550,524 | ||||
21,700,516 | ||||||
Financial services: 1.78% | ||||||
Essent Group Ltd. | 163,586 | 7,225,594 | ||||
WEX, Inc.† | 33,597 | 5,572,062 | ||||
12,797,656 | ||||||
Insurance: 3.57% | ||||||
BRP Group, Inc. Class A† | 376,410 | 7,550,785 | ||||
Palomar Holdings, Inc.† | 92,949 | 5,080,592 | ||||
Ryan Specialty Holdings, Inc.† | 211,219 | 8,615,623 | ||||
Skyward Specialty Insurance Group, Inc.† | 186,103 | 4,393,892 | ||||
25,640,892 | ||||||
Health care: 23.31% | ||||||
Biotechnology: 5.87% | ||||||
Amicus Therapeutics, Inc.† | 453,926 | 5,111,207 | ||||
Avid Bioservices, Inc.† | 232,070 | 3,585,482 | ||||
Blueprint Medicines Corp.† | 82,757 | 4,677,426 | ||||
Cytokinetics, Inc.† | 105,274 | 3,967,777 | ||||
Insmed, Inc.† | 208,850 | 3,974,415 | ||||
Ionis Pharmaceuticals, Inc.† | 86,081 | 3,520,713 | ||||
Myriad Genetics, Inc.† | 12,773 | 281,772 | ||||
Neurocrine Biosciences, Inc.† | 53,861 | 4,822,175 | ||||
Sarepta Therapeutics, Inc.† | 20,825 | 2,573,970 | ||||
SpringWorks Therapeutics, Inc.† | 97,790 | 2,677,490 | ||||
Syndax Pharmaceuticals, Inc.† | 134,602 | 2,688,002 | ||||
Ultragenyx Pharmaceutical, Inc.† | 85,710 | 4,230,646 | ||||
42,111,075 | ||||||
Health care equipment & supplies: 8.05% | ||||||
Axonics, Inc.† | 135,828 | 6,572,717 | ||||
CONMED Corp. | 67,474 | 8,184,596 | ||||
Glaukos Corp.† | 97,114 | 5,537,440 | ||||
Haemonetics Corp.† | 74,297 | 6,285,526 | ||||
iRhythm Technologies, Inc.† | 38,136 | 4,357,801 | ||||
The accompanying notes are an integral part of these financial statements.
26 | Allspring Small Company Growth Portfolio
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Health care equipment & supplies (continued) | ||||||
Novocure Ltd.† | 23,174 | $1,664,125 | ||||
Omnicell, Inc.† | 89,583 | 6,577,184 | ||||
Silk Road Medical, Inc.† | 207,698 | 6,270,403 | ||||
Tandem Diabetes Care, Inc.† | 109,905 | 2,856,431 | ||||
TransMedics Group, Inc.† | 70,601 | 5,129,869 | ||||
Treace Medical Concepts, Inc.† | 161,262 | 4,289,569 | ||||
57,725,661 | ||||||
Health care providers & services: 2.22% | ||||||
HealthEquity, Inc.† | 99,179 | 5,435,009 | ||||
Privia Health Group, Inc.† | 142,343 | 3,551,458 | ||||
U.S. Physical Therapy, Inc. | 68,190 | 6,965,609 | ||||
15,952,076 | ||||||
Health care technology: 2.08% | ||||||
Evolent Health, Inc. Class A† | 180,942 | 5,272,650 | ||||
Phreesia, Inc.† | 181,505 | 5,448,780 | ||||
Veradigm, Inc.† | 357,475 | 4,211,055 | ||||
14,932,485 | ||||||
Life sciences tools & services: 4.18% | ||||||
Adaptive Biotechnologies Corp.† | 267,808 | 1,863,944 | ||||
Avantor, Inc.† | 422,077 | 8,416,215 | ||||
Azenta, Inc.† | 69,092 | 2,988,229 | ||||
BioLife Solutions, Inc.† | 210,988 | 4,926,570 | ||||
ICON PLC† | 55,431 | 11,808,466 | ||||
30,003,424 | ||||||
Pharmaceuticals: 0.91% | ||||||
Axsome Therapeutics, Inc.† | 61,632 | 4,547,209 | ||||
Ventyx Biosciences, Inc.† | 57,884 | 1,995,261 | ||||
6,542,470 | ||||||
Industrials: 23.05% | ||||||
Aerospace & defense: 1.24% | ||||||
Kratos Defense & Security Solutions, Inc.† | 321,075 | 4,218,926 | ||||
Mercury Systems, Inc.† | 115,380 | 4,683,274 | ||||
8,902,200 | ||||||
Air freight & logistics: 0.71% | ||||||
GXO Logistics, Inc.† | 91,593 | 5,121,881 | ||||
Building products: 3.26% | ||||||
Advanced Drainage Systems, Inc. | 68,825 | 6,660,195 | ||||
AZEK Co., Inc.† | 197,151 | 4,583,761 | ||||
Masonite International Corp.† | 85,370 | 7,518,536 | ||||
Zurn Elkay Water Solutions Corp. Class C | 205,910 | 4,635,034 | ||||
23,397,526 | ||||||
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Growth Portfolio | 27
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Commercial services & supplies: 0.90% | ||||||
Openlane, Inc.† | 252,499 | $3,792,535 | ||||
RB Global, Inc. | 50,430 | 2,626,394 | ||||
6,418,929 | ||||||
Construction & engineering: 1.73% | ||||||
Dycom Industries, Inc.† | 64,675 | 6,559,985 | ||||
MYR Group, Inc.† | 45,745 | 5,832,488 | ||||
12,392,473 | ||||||
Electrical equipment: 1.46% | ||||||
Atkore, Inc.† | 51,262 | 5,985,863 | ||||
Vicor Corp.† | 81,528 | 4,512,575 | ||||
10,498,438 | ||||||
Ground transportation: 1.65% | ||||||
Knight-Swift Transportation Holdings, Inc. | 110,599 | 6,081,839 | ||||
Schneider National, Inc. Class B | 221,279 | 5,735,552 | ||||
11,817,391 | ||||||
Machinery: 2.71% | ||||||
Chart Industries, Inc.† | 51,161 | 5,613,897 | ||||
SPX Technologies, Inc.† | 109,442 | 8,356,991 | ||||
Wabash National Corp. | 234,222 | 5,492,506 | ||||
19,463,394 | ||||||
Professional services: 7.82% | ||||||
ASGN, Inc.† | 108,792 | 7,118,260 | ||||
Clarivate PLC† | 421,304 | 3,286,171 | ||||
FTI Consulting, Inc.† | 50,262 | 9,449,759 | ||||
ICF International, Inc. | 78,083 | 8,744,515 | ||||
KBR, Inc. | 177,491 | 10,475,519 | ||||
SS&C Technologies Holdings, Inc. | 175,924 | 9,668,783 | ||||
Verra Mobility Corp.† | 419,227 | 7,390,972 | ||||
56,133,979 | ||||||
Trading companies & distributors: 1.57% | ||||||
Boise Cascade Co. | 72,833 | 5,230,866 | ||||
Core & Main, Inc. Class A† | 225,050 | 6,017,837 | ||||
11,248,703 | ||||||
Information technology: 21.89% | ||||||
Communications equipment: 2.14% | ||||||
Ciena Corp.† | 208,236 | 9,732,951 | ||||
Lumentum Holdings, Inc.† | 105,830 | 5,598,407 | ||||
15,331,358 | ||||||
Electronic equipment, instruments & components: 2.06% | ||||||
Itron, Inc.† | 80,466 | 5,449,962 | ||||
The accompanying notes are an integral part of these financial statements.
28 | Allspring Small Company Growth Portfolio
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Electronic equipment, instruments & components (continued) | ||||||
PAR Technology Corp.† | 109,625 | $3,789,736 | ||||
Rogers Corp.† | 35,134 | 5,532,551 | ||||
14,772,249 | ||||||
Semiconductors & semiconductor equipment: 2.56% | ||||||
Onto Innovation, Inc.† | 51,386 | 5,516,287 | ||||
Silicon Motion Technology Corp. ADR | 72,626 | 4,447,616 | ||||
Synaptics, Inc.† | 34,224 | 2,944,633 | ||||
Teradyne, Inc. | 54,791 | 5,489,511 | ||||
18,398,047 | ||||||
Software: 14.51% | ||||||
Bills Holdings, Inc.† | 38,509 | 3,988,762 | ||||
Black Knight, Inc.† | 132,341 | 7,646,663 | ||||
Box, Inc. Class A† | 350,827 | 9,882,797 | ||||
Confluent, Inc. Class A† | 194,260 | 6,165,812 | ||||
CyberArk Software Ltd.† | 55,130 | 8,530,265 | ||||
DoubleVerify Holdings, Inc.† | 171,265 | 5,972,011 | ||||
HashiCorp, Inc. Class A† | 155,825 | 5,351,030 | ||||
Jamf Holding Corp.† | 296,031 | 5,441,050 | ||||
JFrog Ltd.† | 261,369 | 6,366,949 | ||||
LiveRamp Holdings, Inc.† | 161,368 | 3,927,697 | ||||
Nutanix, Inc. Class A† | 231,409 | 6,854,335 | ||||
PagerDuty, Inc.† | 248,154 | 6,752,270 | ||||
PTC, Inc.† | 96,568 | 12,978,739 | ||||
Sprout Social, Inc. Class A† | 114,844 | 4,973,894 | ||||
Varonis Systems, Inc.† | 182,122 | 4,786,166 | ||||
Zuora, Inc. Class A† | 416,271 | 4,491,564 | ||||
104,110,004 | ||||||
Technology hardware, storage & peripherals: 0.62% | ||||||
Pure Storage, Inc. Class A† | 156,108 | 4,494,349 | ||||
Materials: 2.76% | ||||||
Chemicals: 2.16% | ||||||
Element Solutions, Inc. | 547,875 | 9,823,399 | ||||
Orion Engineered Carbons SA | 245,908 | 5,702,606 | ||||
15,526,005 | ||||||
Metals & mining: 0.60% | ||||||
Steel Dynamics, Inc. | 46,685 | 4,290,352 | ||||
Real estate: 0.78% | ||||||
Hotel & resort REITs: 0.78% | ||||||
Ryman Hospitality Properties, Inc. | 60,761 | 5,573,607 | ||||
Total common stocks (Cost $523,369,035) | 693,638,956 | |||||
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Growth Portfolio | 29
Portfolio of investments—May 31, 2023
Yield | Shares | Value | ||||
Short-term investments: 3.18% | ||||||
Investment companies: 3.18% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.01 % | 22,796,664 | $22,796,664 | |||
Total short-term investments (Cost $22,796,664) | 22,796,664 | |||||
Total investments in securities (Cost $546,165,699) | 99.84 % | 716,435,620 | ||||
Other assets and liabilities, net | 0.16 | 1,120,926 | ||||
Total net assets | 100.00 % | $717,556,546 | ||||
† | Non-income-earning security |
♠ | The issuer of the security is an affiliated person of the Portfolio 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 Portfolio owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Portfolio and the issuer having the same adviser or investment manager. Transactions with issuers that were affiliates of the Portfolio 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 | $32,660,804 | $232,852,801 | $(242,716,941 ) | $0 | $0 | $22,796,664 | 22,796,664 | $706,851 |
Investments in affiliates no longer held at end of period | ||||||||
Securities Lending Cash Investments LLC | 2,594,900 | 81,499,530 | (84,094,991 ) | 561 | 0 | 0 | 0 | 115,044 1 |
$561 | $0 | $22,796,664 | $821,895 |
1 | Amount shown represents income before fees and rebates. |
The accompanying notes are an integral part of these financial statements.
30 | Allspring Small Company Growth Portfolio
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in unaffiliated securities, at value (cost $523,369,035) | $693,638,956 |
Investments in affiliated securities, at value (cost $22,796,664) | 22,796,664 |
Receivable for investments sold | 2,771,892 |
Receivable for dividends | 759,243 |
Prepaid expenses and other assets | 17,346 |
Total assets | 719,984,101 |
Liabilities | |
Payable for investments purchased | 1,895,032 |
Advisory fee payable | 483,645 |
Trustees’ fees and expenses payable | 504 |
Accrued expenses and other liabilities | 48,374 |
Total liabilities | 2,427,555 |
Total net assets | $717,556,546 |
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Growth Portfolio | 31
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Dividends (net of foreign withholdings taxes of $6,787) | $3,008,361 |
Income from affiliated securities | 726,054 |
Interest | 408 |
Total investment income | 3,734,823 |
Expenses | |
Advisory fee | 5,792,866 |
Custody and accounting fees | 45,908 |
Professional fees | 61,872 |
Interest holder report expenses | 16,477 |
Trustees’ fees and expenses | 22,389 |
Other fees and expenses | 38,269 |
Total expenses | 5,977,781 |
Net investment loss | (2,242,958 ) |
Realized and unrealized gains (losses) on investments | |
Net realized gains on | |
Unaffiliated securities | 29,813,537 |
Affiliated securities | 561 |
Net realized gains on investments | 29,814,098 |
Net change in unrealized gains (losses) on investments | (30,986,997 ) |
Net realized and unrealized gains (losses) on investments | (1,172,899 ) |
Net decrease in net assets resulting from operations | $(3,415,857 ) |
The accompanying notes are an integral part of these financial statements.
32 | Allspring Small Company Growth Portfolio
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment loss | $(2,242,958 ) | $(4,263,313 ) | ||
Net realized gains on investments | 29,814,098 | 238,329,906 | ||
Net change in unrealized gains (losses) on investments | (30,986,997 ) | (388,267,734 ) | ||
Net decrease in net assets resulting from operations | (3,415,857 ) | (154,201,141 ) | ||
Capital transactions | ||||
Transactions in investors’ beneficial interests | ||||
Contributions | 99,599,958 | 222,703,095 | ||
Withdrawals | (207,887,653 ) | (617,532,776 ) | ||
Net decrease in net assets resulting from capital transactions | (108,287,695 ) | (394,829,681 ) | ||
Total decrease in net assets | (111,703,552 ) | (549,030,822 ) | ||
Net assets | ||||
Beginning of period | 829,260,098 | 1,378,290,920 | ||
End of period | $717,556,546 | $829,260,098 | ||
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Growth Portfolio | 33
Financial highlights
Financial highlights
Year ended May 31 | |||||
2023 | 2022 | 2021 | 2020 | 2019 | |
Total return | 0.24 % | (16.28 )% | 54.64 % | 4.08 % | (5.64 )% |
Ratios to average net assets (annualized) | |||||
Gross expenses | 0.82 % | 0.81 % | 0.79 % | 0.78 % | 0.78 % |
Net expenses1 | 0.82 % | 0.81 % | 0.79 % | 0.78 % | 0.78 % |
Net investment loss | (0.31 )% | (0.42 )% | (0.34 )% | (0.16 )% | (0.09 )% |
Supplemental data | |||||
Portfolio turnover rate | 37 % | 61 % | 44 % | 41 % | 54 % |
1 | Net expense ratios reflect voluntary waivers, if any. |
The accompanying notes are an integral part of these financial statements.
34 | Allspring Small Company Growth Portfolio
Notes to financial statements
Notes to financial statements
1.
ORGANIZATION
Allspring Master 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 Company Growth Portfolio (the “Portfolio”) which is a diversified series of the Trust.
Interests in the Portfolio are available solely through private placement transactions that do not involve any “public offering” within the meaning of Section 4(a)(2) of the Securities Act of 1933.
2.
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Portfolio, 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 Portfolio 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 any of 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 Portfolio 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 Portfolio 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. Interests in the non-registered investment company that were redeemable at net asset value were fair valued normally at net asset value. Effective at the close of business on March 29, 2023, the Portfolio 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.
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.
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.
Federal and other taxes
The Portfolio is not required to pay federal income taxes on its net investment income and net capital gains as it is treated as a partnership for federal income tax purposes. All income, gains and losses of the Portfolio are deemed to have been “passed through” to the interest holders in proportion to their holdings of the Portfolio regardless of whether income and gains have been distributed by the Portfolio.
Allspring Small Company Growth Portfolio | 35
Notes to financial statements
The Portfolio’s income tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal revenue authority. Management has analyzed the Portfolio’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 May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $568,929,833 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $217,313,843 |
Gross unrealized losses | (69,808,056 ) |
Net unrealized gains | $147,505,787 |
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 Portfolio’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 Portfolio’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 Portfolio’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 Portfolio’s assets and liabilities as of May 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 | $2,944,151 | $0 | $0 | $2,944,151 |
Consumer discretionary | 62,125,612 | 0 | 0 | 62,125,612 |
Consumer staples | 33,666,670 | 0 | 0 | 33,666,670 |
Energy | 13,792,109 | 0 | 0 | 13,792,109 |
Financials | 65,952,338 | 0 | 0 | 65,952,338 |
Health care | 167,267,191 | 0 | 0 | 167,267,191 |
Industrials | 165,394,914 | 0 | 0 | 165,394,914 |
Information technology | 157,106,007 | 0 | 0 | 157,106,007 |
Materials | 19,816,357 | 0 | 0 | 19,816,357 |
Real estate | 5,573,607 | 0 | 0 | 5,573,607 |
Short-term investments | ||||
Investment companies | 22,796,664 | 0 | 0 | 22,796,664 |
Total assets | $716,435,620 | $0 | $0 | $716,435,620 |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the year ended May 31, 2023, the Portfolio did not have any transfers into/out of Level 3.
4.
TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES
Advisory fee
The Trust has entered into an advisory contract with 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. The adviser is responsible for implementing investment policies and guidelines and for supervising the subadviser, who is responsible for day-to-day portfolio management of the
36 | Allspring Small Company Growth Portfolio
Notes to financial statements
Portfolio. Pursuant to the contract, Allspring Funds Management is entitled to receive an advisory fee at the following annual rate based on the Portfolio’s average daily net assets:
Average daily net assets | Advisory fee |
First $500 million | 0.800 % |
Next $500 million | 0.775 |
Next $1 billion | 0.750 |
Next $1 billion | 0.725 |
Next $1 billion | 0.700 |
Over $4 billion | 0.680 |
For the year ended May 31, 2023, the advisory fee was equivalent to an annual rate of 0.79% of the Portfolio’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Portfolio. The fee for subadvisory services is borne by Allspring Funds Management. Peregrine Capital Management, LLC, which is not an affiliate of Allspring Funds Management, is the subadviser to the Portfolio and is entitled to receive a fee from Allspring Funds Management at an annual rate of 0.38% of the Portfolio’s average daily net assets.
Interfund transactions
The Portfolio 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 May 31, 2023 were $265,968,778 and $358,187,796, respectively.
6.
BANK BORROWINGS
The Trust, along with Allspring Variable Trust and Allspring Funds Trust (excluding the money market funds), are parties to a $350,000,000 revolving credit agreement whereby the Portfolio is permitted to use bank borrowings for temporary or emergency purposes, such as to fund interest holders withdrawal requests. Interest under the credit agreement is charged to the Portfolio based on 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 May 31, 2023, there were no borrowings by the Portfolio under the agreement.
7.
INDEMNIFICATION
Under the Portfolio’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 Portfolio. The Portfolio has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Portfolio’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 Portfolio may enter into contracts with service providers that contain a variety of indemnification clauses. The Portfolio’s maximum exposure under these arrangements is dependent on future claims that may be made against the Portfolio and, therefore, cannot be estimated.
Allspring Small Company Growth Portfolio | 37
Report of independent registered public accounting firm
To the Interest Holders of the Portfolio and Board of Trustees
Allspring Master Trust:
Allspring Master Trust:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Allspring Small Company Growth Portfolio (the Portfolio), one of the portfolios constituting Allspring Master Trust, including the portfolio of investments, as of May 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 Portfolio as of May 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 Portfolio’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 Portfolio 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 May 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
July 27, 2023
38 | Allspring Small Company Growth Portfolio
Other information (unaudited)
Other information
Tax information
Pursuant to Section 852 of the Internal Revenue Code, $57,418,424 was designated as a 20% rate gain distribution for the fiscal year ended May 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 and Portfolio file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. Shareholders and Interest holders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
Allspring Small Company Growth Fund | 39
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 128 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 |
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 |
1
The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by call 1-800-222-8222 or by visiting the website at allspringglobal.com.
40 | Allspring Small Company Growth 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 |
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 Small Company Growth Fund | 41
Other information (unaudited)
Officers1
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 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 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.
42 | Allspring Small Company Growth Fund
Other information (unaudited)
Board consideration of investment management, advisory, and sub-advisory agreements:
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (each, a “Board” and collectively, the “Boards”) of each of Allspring Funds Trust (“Funds Trust”) and Allspring Master Trust (“Master Trust”, and collectively, the “Trusts”) must determine annually whether to approve the continuation of the Trusts’ investment management, advisory, and sub-advisory agreements, as applicable. In this regard, at a Board meeting held on May 15-17, 2023 (the “Meeting”), the Funds Trust Board, all the members of which have no direct or indirect interest in the investment management agreement and are not “interested persons” of the Trusts, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for the Allspring Small Company Growth Fund, a portfolio of Funds Trust (the “Feeder Fund”), an investment management agreement (the “Feeder Fund Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”).
At the Meeting, the Master Trust Board, all the members of which have no direct or indirect interest in the investment advisory and sub-advisory agreements and are Independent Trustees, reviewed and approved: (i) an investment advisory agreement (the “Master Portfolio Advisory Agreement”) with Allspring Funds Management for the Allspring Small Company Growth Portfolio, a portfolio of Master Trust (the “Master Portfolio”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Peregrine Capital Management, LLC (the “Sub-Adviser”) for the Master Portfolio.
The Feeder Fund and the Master Portfolio are collectively referred to as the “Funds.” The Feeder Fund Management Agreement, the Master Portfolio Advisory Agreement, and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
The Feeder Fund is a feeder fund that invest substantially all of its assets in the Master Portfolio. The Master Portfolio has a substantially similar investment objective and substantially similar investment strategies to the Feeder Fund. Information provided to the Boards regarding the Feeder Fund is also applicable to the Master Portfolio, as relevant.
At the Meeting, the Boards considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at meeting of the Boards held in April 2023, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Boards have adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Boards in the discharge of their duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
The Boards noted that they initially approved the Advisory Agreements at a meeting of the Boards held in May 2021, all for a two-year term, in advance of the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC, 1 a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. (the “Transaction”). The Trustees also noted that, while they did not specifically consider the continuation of the Advisory Agreements in 2022 as a result of the two-year term that was approved in 2021, the Trustees received and considered certain information at a meeting of the Boards held in April 2022 that was applicable to the Advisory Agreements, including an overview and financial review of the Allspring Global Investments business, information regarding certain ancillary agreements that were approved by the Boards at the April 2022 Board meeting, and comparative data regarding Fund fees and expenses.
In providing information to the Boards, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Boards’ annual contract renewal process earlier in 2023. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Boards considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Boards reviewed reports of Allspring Funds Management at each of their quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Boards and the teams mentioned above confer with portfolio managers at various times throughout the year. The Boards did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Funds Trust Board unanimously determined that the compensation payable to Allspring Funds Management was reasonable, and approved the continuation of the Feeder Fund Management Agreement for a one-year term. Additionally, after its deliberations, the Master Trust Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser was reasonable, and approved the continuation of the Master Portfolio Advisory Agreement and the Sub-Advisory Agreement, each for a one-year term. The Boards considered the approval of the Advisory Agreements for the Funds as part of their consideration of agreements for funds across the complex, but their approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Boards in support of their approvals.
1
The trade name for the asset management firm that includes Allspring Funds Management and the Sub-Adviser is “Allspring Global Investments.”
Allspring Small Company Growth Fund | 43
Other information (unaudited)
Nature, Extent, and Quality of Services
The Boards received and considered various information regarding the nature, extent, and quality of services provided to the Feeder Fund and the Master Portfolio, as applicable, by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Feeder Fund Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business. The Boards also considered information about retention arrangements with respect to key personnel of Allspring Global Investments that were put in place in connection with the Transaction. The Boards took into account information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the Transaction under a transition services agreement and the anticipated timeline for exiting the transition services agreement. In addition, the Boards received and considered information about the full range of services provided to the Fund and the Master Portfolio by Allspring Funds Management and its affiliates.
The Boards considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Master Portfolio. The Boards evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
The Boards further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Boards received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, Allspring Funds Management’s role as administrator of the Funds’ liquidity risk management programs. The Boards also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund Investment Performance and Expenses
The Boards considered the investment performance results for each of the Funds over various time periods ended December 31, 2022. The Boards considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to the Feeder Fund (the “Universe”), and in comparison to the Feeder Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Boards received a description of the methodology used by Broadridge to select the mutual funds in the performance Universe. The Funds Trust Board noted that the investment performance of the Feeder Fund (Administrator Class) was higher than the average investment performance of its Universe for all periods under review. The Funds Trust Board also noted that the investment performance of the Feeder Fund was higher than its benchmark index, the Russell 2000® Growth Index, for all periods under review.
The Master Trust Board took note of the investment performance of the Master Portfolio in the context of reviewing the investment performance of the Feeder Fund.
The Funds Trust Board also received and considered information regarding the Feeder Fund’s net operating expense ratios, which include fees and expenses of the Master Portfolio, and their various components, including actual management fees assessed at the Feeder Fund and Master Portfolio levels, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Funds Trust Board considered these ratios in comparison to the median ratios of funds in class-specific expense groups that were determined by Broadridge to be similar to the Feeder Fund (the “Groups”). The Funds Trust Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Groups and an explanation of how funds comprising expense groups and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Funds Trust Board noted that the net operating expense ratios of the Feeder Fund were lower than, equal to or in range of the median net operating expense ratios of the expense Groups for all share classes. The Funds Trust Board noted that Allspring Funds Management had agreed to reduce the net operating expense caps for the Feeder Fund’s Class A shares.
With respect to the Master Portfolio, the Master Trust Board reviewed the fee rates that are payable to Allspring Funds Management for investment advisory services (as discussed below), which are the only fees charged at the Master Portfolio level, relative to a corresponding expense Group.
The Boards took into account the Funds’ investment performance and expense information provided to them among the factors considered in deciding to re-approve the Advisory Agreements.
Investment Management, Advisory, and Sub-Advisory Fee Rates
The Funds Trust Board noted that Allspring Funds Management receives no advisory fees from the Feeder Fund as long as the Feeder Fund continues to invest all (or substantially all) of its assets in a single master portfolio. If the Feeder Fund were to change its investment structure so that it began investing in two or more master portfolios (a fund-of-funds), Allspring Funds Management would be entitled to receive an annual fee of 0.25% of the Feeder Fund’s average daily net assets for providing investment advisory services to the Feeder Fund, including allocating the Feeder Fund’s assets to the Master Portfolio.
44 | Allspring Small Company Growth Fund
Other information (unaudited)
The Funds Trust Board reviewed and considered the contractual fee rates that are payable by the Feeder Fund to Allspring Funds Management under the Feeder Fund Management Agreement for management services (other than investment advisory services), as well as the contractual fee rates payable by the Feeder Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which include, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rates”).
The Master Trust Board reviewed and considered the contractual investment advisory fee rate that is payable by the Master Portfolio to Allspring Funds Management for investment advisory services under the Master Portfolio Advisory Agreement (the “Advisory Agreement Rate”). The Master Trust Board also reviewed and considered the contractual investment sub-advisory fee rate that is payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services (the “Sub-Advisory Agreement Rate”).
Among other information reviewed by the Funds Trust Board was a comparison of the Feeder Fund’s Management Rate, which, for this purpose, includes the advisory fees paid at the Master Portfolio level, with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Funds Trust Board noted that the Management Rates of the Feeder Fund were in range of the sum of these average rates for the Feeder Fund’s expense Groups for all share classes.
The Master Trust Board reviewed a comparison of the Advisory Agreement Rate of the Master Portfolio with those of other funds in the Master Portfolio’s expense Group at a common asset level. The Master Trust Board noted that the Advisory Agreement Rate of the Master Portfolio was lower than the median rate for the Master Portfolio’s expense Group.
The Master Trust Board also received and considered information about the portions of the total management fees that were retained by Allspring Funds Management after payment of the fees to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of these amounts, the Master Trust Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services.
The Boards also received and considered information about the nature and extent of services offered and fee rates charged by Allspring Funds Management and the Sub-Adviser to other types of clients with investment strategies similar to those of the Funds. In this regard, the Boards received information about the significantly greater scope of services, and compliance, reporting and other legal burdens and risks of managing proprietary mutual funds compared with those associated with managing assets of other types of clients, including third-party sub-advised fund clients and non-mutual fund clients such as institutional separate accounts.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Funds Trust Board determined that the compensation payable to Allspring Funds Management under the Feeder Fund Management Agreement was reasonable, and the Master Trust Board determined that the compensation payable to Allspring Funds Management under the Master Portfolio Advisory Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
Profitability
The Boards received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses and differences in how Allspring Global Investments calculates its pre-tax profit metric versus the methodology used when Allspring Funds Management was part of Wells Fargo. It was noted that the impact of such differences had only minor impact on the financial results presented. Among other things, the Boards noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Based on their review, the Boards did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Funds to be at a level that would prevent the Boards from approving the continuation of the Advisory Agreements.
Economies of Scale
The Boards received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Funds, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders of the Funds. The Boards noted the existence of breakpoints in the Master Portfolio’s advisory fee structure and the Feeder Fund’s management fee structure, which operate generally to reduce the Funds’ expense ratios as the Funds grow in size, and the size of the Master Portfolio and the Feeder Fund, respectively, in relation to such breakpoints. The Boards considered that, in addition to advisory fee and management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways, including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
The Boards concluded that Allspring Funds Management’s arrangements with respect to each Fund, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Funds and their shareholders.
Allspring Small Company Growth Fund | 45
Other information (unaudited)
Other Benefits to Allspring Funds Management and the Sub-Adviser
The Boards received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management, the Sub-Adviser, and their affiliates as a result of their relationships with the Funds. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Funds and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Funds. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it.
The Boards also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser and fees earned in the past by Allspring Funds Management and its affiliate from managing a private investment vehicle for the fund complex’s securities lending collateral.
Based on their consideration of the factors and information they deemed relevant, including those described here, the Boards did not find that any ancillary benefits received by Allspring Funds Management, the Sub-Adviser, and their affiliates were unreasonable.
Conclusion
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Funds Trust Board unanimously determined that the compensation payable to Allspring Funds Management was reasonable, and approved the continuation of the Feeder Fund Management Agreement for a one-year term. Additionally, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Master Trust Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser was reasonable, and approved the continuation of the Master Portfolio Advisory Agreement and the Sub-Advisory Agreement, each for a one-year term.
46 | Allspring Small Company Growth Fund
Other information (unaudited)
Liquidity risk management program
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Allspring Funds Trust (“Funds Trust”) has adopted and implemented a liquidity risk management program (the “Program”) on behalf of each of its series (other than the series that operate as money market funds), including the Fund, and Allspring Master Trust (“Master Trust” and together with Funds Trust, the “Trusts”) has adopted and implemented the Program on behalf of each of its series, including the Portfolio, which is reasonably designed to assess and manage the Fund’s and the Portfolio’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund or Portfolio is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund or Portfolio. The Trusts’ Boards of Trustees (the “Boards”) previously approved the designation of Allspring Funds Management, LLC (“Allspring Funds Management”), the Fund’s investment manager and the Portfolio’s investment adviser, to administer the Program, and Allspring Funds Management has established a Liquidity Risk Management Council (the “Council”) composed of personnel from multiple departments within Allspring Funds Management and its affiliates to assist Allspring Funds Management in the administration of the Program.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s and the Portfolio’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s and the Portfolio’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent the Fund or the Portfolio does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s or Portfolio’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if the Fund or the Portfolio has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s or the Portfolio’s “highly liquid investments” below its HLIM; and (6) periodic reporting to the Boards.
At a meeting of the Boards held on May 16-17, 2023, the Boards received and reviewed a written report (the “Report”) from Allspring Funds Management that, among other things, addressed the operation of the Program and assessed its adequacy and effectiveness for the period from January 1, 2022 through December 31, 2022 (the “Reporting Period”). The Report noted significant liquidity events impacting the Funds and Portfolios related to extended foreign market holidays as well as the difficulty of trading and settlement of most Russia-related securities due to sanctions activity. The Report noted that there were no material changes to the Program during the Reporting Period.
Allspring Funds Management determined in the Report that the Program has been implemented and operates effectively to manage each Fund’s and Portfolio’s, including the Fund’s and the Portfolio’s, liquidity risk, and Allspring Funds Management continues to believe that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s and the Portfolio’s liquidity developments.
There can be no assurance that the Program will achieve its objectives under all circumstances in the future. With respect to the Fund, please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other risks to which an investment in the Fund may be subject.
Allspring Small Company Growth Fund | 47
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.
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-06072023-03ygle59 07-23
AR1848 05-23
AR1848 05-23
Contents
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The views expressed and any forward-looking statements are as of May 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 Company Value Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Small Company Value Fund for the 12-month period that ended May 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. The market was focused on persistently high inflation 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. Markets received a boost in December with the removal of China’s strict COVID-19 lockdowns. In March 2023, a new wave of market anxiety resulted from several bank failures and unease over the possibility of more rate hikes. However, investors regained confidence and markets finished the period in relative calm.
For the 12-month period, stocks and bonds—both domestic U.S. and global—had mixed results. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 2.92%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 lost 1.41%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a return of -8.49%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -2.14%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 6.49%, the Bloomberg Municipal Bond Index6 gained 0.49%, and the ICE BofA U.S. High Yield Index7 returned -0.09%.
High inflation and central bank rate hikes rocked markets.
In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Federal Reserve (Fed) raised its short-term rate by 0.75% in June. Meanwhile, the U.S. unemployment rate remained historically low 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 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, 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.
“ In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring 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 the 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.
2 | Allspring Small Company Value Fund
Letter to shareholders (unaudited)
August was yet another broadly challenging month for financial markets. 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 was the resilient U.S. jobs 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.
In September, all asset classes suffered further 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. 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 increasing 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 declining overall in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever, with generally flat 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 wound 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.
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 had 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 (ECB) both raised rates by 0.50%.
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 Company Value Fund | 3
Letter to shareholders (unaudited)
“ 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 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 banking industry turmoil created an additional challenge for central banks in balancing inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. 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.
Economic data released in April pointed to global resilience, as Purchasing Managers Indexes1 in the U.S., U.K., and eurozone beat expectations, and China reported first-quarter annualized economic growth of 4.5%. Despite banking industry stress, developed market stocks had monthly gains. The U.S. labor market remained strong, with a 3.5% jobless rate and monthly payroll gains above 200,000. However, uncertainty and inflationary concerns weighed on investors in the U.S. and abroad.
May was marked by a divergence between expanding activity in services and an overall contraction in manufacturing activity in the U.S., U.K., and eurozone. Core inflation remained elevated in the U.S. and Europe, despite the ongoing efforts of the Fed and ECB, which included rate hikes of 0.25% by both in May. Stubborn inflation and the resilient U.S. labor market led to expectations of further interest rate hikes, overall monthly declines across bond indexes, and mixed results for stocks in May. Investor worries over a U.S. debt ceiling impasse were modest, and market confidence was buoyed by a deal in late May to avert a potential U.S. debt default.
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 Company Value Fund
Letter to shareholders (unaudited)
Notice to Shareholders |
Beginning in July 2024, the Fund will be required by the Securities and Exchange Commission to send shareholders a paper copy of a new tailored shareholder report in place of the full shareholder report that you are now receiving. The tailored shareholder report will contain concise information about the Fund, including certain expense and performance information and fund statistics. If you wish to receive this new tailored shareholder report electronically, please follow the instructions on the back cover of this report. |
Other information that is currently included in the shareholder report, such as the��Fund’s financial statements, will be available online and upon request, free of charge, in paper or electronic format. |
Allspring Small Company Value Fund | 5
Performance highlights (unaudited)
Performance highlights
Investment objective | The Fund seeks long-term capital appreciation. |
Manager | Allspring Funds Management, LLC |
Subadviser for the affiliated master portfolio* | Allspring Global Investments, LLC |
Portfolio managers | Jeff Goverman, Gustaf Little, Garth R. Nisbet, CFA, Craig Pieringer, CFA |
Average annual total returns (%) as of May 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 | Net2 | |
Class A (SCVAX) | 1-31-2002 | -15.46 | 1.82 | 6.28 | -10.31 | 3.04 | 6.92 | 1.32 | 1.15 |
Class C (SCVFX) | 8-30-2002 | -11.94 | 2.30 | 6.29 | -10.94 | 2.30 | 6.29 | 2.07 | 1.90 |
Class R6 (SCVJX)3 | 10-31-2016 | – | – | – | -9.95 | 3.44 | 7.25 | 0.89 | 0.75 |
Administrator Class (SCVIX) | 1-31-2002 | – | – | – | -10.20 | 3.13 | 7.05 | 1.24 | 1.05 |
Institutional Class (SCVNX) | 7-30-2010 | – | – | – | -10.03 | 3.34 | 7.27 | 0.99 | 0.85 |
Russell 2000® Value Index4 | – | – | – | – | -11.50 | 2.09 | 6.43 | – | – |
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 September 30, 2023, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 1.15% for Class A, 1.90% for Class C, 0.75% for Class R6, 1.05% for Administrator Class and 0.85% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any) from funds in which the affiliated master portfolio invests, and extraordinary expenses are excluded from the expense caps. Net expenses from the affiliated master portfolio are included in 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® 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. 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.
* | The Fund is a feeder fund in a master-feeder structure that invests substantially all of its assets in a single affiliated master portfolio of the Allspring Master Trust with a substantially identical investment objective and substantially similar investment strategies. References to the investment activities of the Fund are intended to refer to the investment activities of the affiliated master portfolio in which it invests. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. | |
6 | Allspring Small Company Value Fund
Performance highlights (unaudited)
Growth of $10,000 investment as of May 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 Small Company 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 May 31, 2023.
•The industrials and consumer staples sectors were the primary contributors to relative performance. Within the industrials sector, favorable stock selection was driven by construction and engineering, machinery, and building product stocks. A beverage bottling and distribution company was the primary contributor within consumer staples.
•The energy and consumer discretionary sectors detracted from relative performance. Within energy, weakness in the Fund’s oil and gas drilling stocks detracted from performance, while declines in leisure products and specialty retail stocks led to underperformance in consumer discretionary.
Market review
The 12 months that ended May 31, 2023, saw multiple headlines affecting the stock market and the economy, including:
•Interest rate volatility
•Persistent inflation and low unemployment
•Anxiety over geopolitical events
•Regional bank concerns
•Possibility of a recession
•U.S. debt ceiling debate
During the 12-month period, total nonfarm payroll employment increased by 4.1 million, and the U.S. unemployment rate ended the period at 3.7%, according to the U.S. Bureau of Labor Statistics.
Ultimately, events in California and New York upset the market. In mid-March, the first bank run since 2008 emerged rather quickly. In quick succession came the collapse of three American banks, the industry bailout of a fourth, and heightened concern about a run on smaller banks as depositors shifted their money to larger “too big to fail” institutions. Almost simultaneously, the long-running troubles facing Credit Suisse also ignited questions about European banks. By period-end, U.S. regional bank stocks had recovered a portion of their year-to-date losses.
Ten largest holdings (%) as of May 31, 20231 | |
Sterling Infrastructure, Inc. | 1.49 |
Eagle Materials, Inc. | 1.49 |
Diamondback Energy, Inc. | 1.48 |
STAG Industrial, Inc. | 1.47 |
Unum Group | 1.44 |
American Equity Investment Life Holding Co. | 1.43 |
Standex International Corp. | 1.33 |
Annaly Capital Management, Inc. | 1.29 |
AGNC Investment Corp. | 1.26 |
Hawkins, Inc. | 1.20 |
1 | Each holding represents the Fund’s allocable portion of the affiliated master portfolio security. Figures represent each holding as a percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
The industrials and consumer staples sectors were the primary contributors to relative performance.
The Fund’s infrastructure-related stocks within the construction and engineering, machinery, and building products industries were the main drivers of outperformance in the industrials sector. Woodlands, Texas–based Sterling Infrastructure, Inc., which provides specialty infrastructure construction services, was the top-performing stock in the sector. The company continued to experience healthy demand and record backlogs due to strength in its E-infrastructure, building, and transportation divisions. Coca-Cola Consolidated, Inc. led the outperformance in the consumer staples sector. The Charlotte, NC-based company bottles and distributes beverages of The Coca-Cola Company and is the largest Coca-Cola bottler in the United States. Over the last year, the company benefited from solid volume gains and improved pricing, resulting in higher margins and profitability.
Sector allocation as of May 31, 20231 |
1 | Figures represent the sector allocation of the affiliated master portfolio as a percentage of the long-term investments of the affiliated master portfolio. These amounts are subject to change and may have changed since the date specified. |
8 | Allspring Small Company Value Fund
Performance highlights (unaudited)
The energy and consumer discretionary sectors detracted from relative performance.
The energy sector was the main detractor from performance over the past year. Houston, Texas–based Patterson-UTI Energy, Inc., has been under pressure due to lower commodity prices, forcing the company to lower expectations. The consumer discretionary sector detracted from performance due to pressure on leisure products and specialty retail stocks. Underperformance from Funko, Inc.,* weighed on the sector’s returns as the company faced numerous operational challenges, including difficulties implementing new warehouse and enterprise resource planning systems.
Outlook: Conditions could favor small-cap stocks.
Investing is challenging during regular times, especially during periods of extreme volatility such as we are witnessing now. There are myriad issues to consider: inflation, interest rates, the economy, oil prices, geopolitics, elections, accounting changes, and regulations, among others. Our experience has taught us that well-managed companies with good
balance sheets can take advantage of the opportunities as they present themselves. Stock prices are not linear in the short term, and bouts of volatility should be embraced.
We believe we might be beginning a long, durable small-cap robust performance cycle—driven by attractive relative valuations, a breakdown in large-cap tech leadership, a more supportive macroeconomic environment, and improving small-cap fundamentals. Current conditions remain consistent with those at the start of prior small-cap cycles, specifically given relative valuation and the disinflation trend since last year’s peak. While there is plenty of fear and volatility right now, there remains reason to believe conditions are potentially setting up for a new long-term small-cap cycle.
Our strategy does not mirror or replicate a benchmark. We are fundamentals-driven and dedicated to small-cap value. We believe investing in companies with the following characteristics will produce long-term results: value, quality partner, and contrarian. At purchase, companies we buy fall into one or more of the following purchase conditions: neglected, oversold, theme, and earnings turnaround.
*
This security was no longer held at the end of the reporting period.
Allspring Small Company Value Fund | 9
Fund expenses (unaudited)
Fund expenses
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 December 1, 2022 to May 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 the 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 12-1-2022 | Ending account value 5-31-2023 | Expenses paid during the period1, 2 | Annualized net expense ratio2 | |
Class A | ||||
Actual | $1,000.00 | $998.94 | $5.73 | 1.15 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,019.20 | $5.79 | 1.15 % |
Class C | ||||
Actual | $1,000.00 | $998.91 | $9.47 | 1.90 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,015.46 | $9.55 | 1.90 % |
Class R6 | ||||
Actual | $1,000.00 | $998.96 | $3.74 | 0.75 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.19 | $3.78 | 0.75 % |
Administrator Class | ||||
Actual | $1,000.00 | $998.94 | $5.23 | 1.05 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,019.70 | $5.29 | 1.05 % |
Institutional Class | ||||
Actual | $1,000.00 | $998.95 | $4.24 | 0.85 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,020.69 | $4.28 | 0.85 % |
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).
2 Amounts reflect net expenses allocated from the affiliated Master Portfolio in which the Fund invests.
10 | Allspring Small Company Value Fund
Portfolio of investments—May 31, 2023
Portfolio of investments
Value | ||||||
Investment companies: 99.99% | ||||||
Affiliated master portfolio: 99.99% | ||||||
Allspring Small Company Value Portfolio | $448,713,630 | |||||
Total investment companies (Cost $388,845,602) | 448,713,630 | |||||
Total investments in securities (Cost $388,845,602) | 99.99 % | 448,713,630 | ||||
Other assets and liabilities, net | 0.01 | 45,766 | ||||
Total net assets | 100.00 % | $448,759,396 | ||||
Transactions with the affiliated Master Portfolio were as follows:
% of ownership, beginning of period | % of ownership, end of period | Net realized gains (losses) on investments allocated from affiliated Master Portfolio | Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolio | Dividends allocated from affiliated Master Portfolio | Interest allocated from affiliated Master Portfolio | Affiliated Income Allocated from affiliated Master Portfolio | Value, end of period | |
Allspring Small Company Value Portfolio | 88.09 % | 88.78 % | $(12,161,642 ) | $(44,270,421 ) | $9,127,734 | $133 | $485,764 | $448,713,630 |
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Value Fund | 11
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in affiliated Master Portfolio, at value (cost $388,845,602) | $448,713,630 |
Receivable for Fund shares sold | 436,433 |
Receivable from manager | 84,850 |
Prepaid expenses and other assets | 53,520 |
Total assets | 449,288,433 |
Liabilities | |
Payable for Fund shares redeemed | 268,146 |
Administration fees payable | 71,633 |
Shareholder servicing fees payable | 71,415 |
Trustees’ fees and expenses payable | 1,024 |
Distribution fee payable | 914 |
Accrued expenses and other liabilities | 115,905 |
Total liabilities | 529,037 |
Total net assets | $448,759,396 |
Net assets consist of | |
Paid-in capital | $410,844,177 |
Total distributable earnings | 37,915,219 |
Total net assets | $448,759,396 |
Computation of net asset value and offering price per share | |
Net assets–Class A | $304,600,572 |
Shares outstanding–Class A1 | 10,313,491 |
Net asset value per share–Class A | $29.53 |
Maximum offering price per share – Class A2 | $31.33 |
Net assets–Class C | $1,307,060 |
Shares outstanding–Class C1 | 51,673 |
Net asset value per share–Class C | $25.30 |
Net assets–Class R6 | $14,572,862 |
Shares outstanding–Class R61 | 474,928 |
Net asset value per share–Class R6 | $30.68 |
Net assets–Administrator Class | $17,742,771 |
Shares outstanding–Administrator Class1 | 585,028 |
Net asset value per share–Administrator Class | $30.33 |
Net assets–Institutional Class | $110,536,131 |
Shares outstanding–Institutional Class1 | 3,622,421 |
Net asset value per share–Institutional Class | $30.51 |
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.
12 | Allspring Small Company Value Fund
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Dividends allocated from affiliated Master Portfolio (net of foreign withholding taxes of $15,292) | $9,127,734 |
Affiliated income allocated from affiliated Master Portfolio | 485,764 |
Interest allocated from affiliated Master Portfolio | 133 |
Interest | 14 |
Expenses allocated from affiliated Master Portfolio | (4,192,386 ) |
Waivers allocated from affiliated Master Portfolio | 465,726 |
Total investment income | 5,886,985 |
Expenses | |
Management fee | 251,887 |
Administration fees | |
Class A | 728,667 |
Class C | 4,101 |
Class R6 | 3,652 |
Administrator Class | 26,461 |
Institutional Class | 159,002 |
Shareholder servicing fees | |
Class A | 867,460 |
Class C | 4,882 |
Administrator Class | 50,692 |
Distribution fee | |
Class C | 14,647 |
Custody and accounting fees | 14,329 |
Professional fees | 52,398 |
Registration fees | 72,113 |
Shareholder report expenses | 106,566 |
Trustees’ fees and expenses | 21,093 |
Other fees and expenses | 83,933 |
Total expenses | 2,461,883 |
Less: Fee waivers and/or expense reimbursements | |
Fund-level | (705,463 ) |
Class A | (118,237 ) |
Class C | (525 ) |
Administrator Class | (9,829 ) |
Net expenses | 1,627,829 |
Net investment income | 4,259,156 |
Realized and unrealized gains (losses) on investments | |
Net realized losses on investments allocated from affiliated Master Portfolio | (12,161,642 ) |
Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolio | (44,270,421 ) |
Net realized and unrealized gains (losses) on investments | (56,432,063 ) |
Net decrease in net assets resulting from operations | $(52,172,907 ) |
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Value Fund | 13
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $4,259,156 | $1,997,250 | ||
Net realized gains (losses) on investments | (12,161,642 ) | 55,806,887 | ||
Net change in unrealized gains (losses) on investments | (44,270,421 ) | (68,307,228 ) | ||
Net decrease in net assets resulting from operations | (52,172,907 ) | (10,503,091 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class A | (14,333,053 ) | (23,780,784 ) | ||
Class C | (93,570 ) | (208,181 ) | ||
Class R6 | (506,589 ) | (352,499 ) | ||
Administrator Class | (798,183 ) | (1,952,485 ) | ||
Institutional Class | (5,228,302 ) | (4,608,431 ) | ||
Total distributions to shareholders | (20,959,697 ) | (30,902,380 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class A | 398,977 | 12,672,302 | 656,676 | 24,000,526 |
Class C | 6,555 | 180,325 | 19,681 | 658,109 |
Class R6 | 357,751 | 11,911,540 | 189,729 | 7,081,211 |
Administrator Class | 196,183 | 6,527,787 | 415,003 | 15,666,878 |
Institutional Class | 1,630,016 | 54,246,836 | 2,016,490 | 74,654,109 |
85,538,790 | 122,060,833 | |||
Reinvestment of distributions | ||||
Class A | 437,444 | 14,076,915 | 658,773 | 23,358,988 |
Class C | 3,383 | 93,570 | 6,753 | 208,181 |
Class R6 | 15,179 | 506,589 | 9,588 | 352,499 |
Administrator Class | 23,252 | 768,015 | 52,212 | 1,898,392 |
Institutional Class | 156,571 | 5,199,039 | 124,652 | 4,555,015 |
20,644,128 | 30,373,075 | |||
Payment for shares redeemed | ||||
Class A | (1,488,263 ) | (47,166,763 ) | (1,505,117 ) | (54,479,971 ) |
Class C | (34,738 ) | (926,078 ) | (53,609 ) | (1,691,679 ) |
Class R6 | (124,227 ) | (4,060,442 ) | (208,117 ) | (7,991,882 ) |
Administrator Class | (311,874 ) | (10,266,220 ) | (651,213 ) | (24,288,201 ) |
Institutional Class | (1,435,391 ) | (47,534,257 ) | (761,649 ) | (28,166,610 ) |
(109,953,760 ) | (116,618,343 ) | |||
Net increase (decrease) in net assets resulting from capital share transactions | (3,770,842 ) | 35,815,565 | ||
Total decrease in net assets | (76,903,446 ) | (5,589,906 ) | ||
Net assets | ||||
Beginning of period | 525,662,842 | 531,252,748 | ||
End of period | $448,759,396 | $525,662,842 | ||
The accompanying notes are an integral part of these financial statements.
14 | Allspring Small Company Value Fund
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $34.30 | $37.11 | $20.91 | $24.22 | $28.60 |
Net investment income | 0.24 1 | 0.12 1 | 0.09 | 0.18 1 | 0.09 |
Net realized and unrealized gains (losses) on investments | (3.66 ) | (0.71 ) | 16.22 | (3.35 ) | (4.31 ) |
Total from investment operations | (3.42 ) | (0.59 ) | 16.31 | (3.17 ) | (4.22 ) |
Distributions to shareholders from | |||||
Net investment income | 0.00 | (0.08 ) | (0.11 ) | (0.14 ) | (0.16 ) |
Net realized gains | (1.35 ) | (2.14 ) | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (1.35 ) | (2.22 ) | (0.11 ) | (0.14 ) | (0.16 ) |
Net asset value, end of period | $29.53 | $34.30 | $37.11 | $20.91 | $24.22 |
Total return2 | (10.31 )% | (1.77 )% | 77.80 % | (13.25 )% | (14.72 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.32 % | 1.32 % | 1.32 % | 1.32 % | 1.49 % |
Net expenses | 1.14 % | 1.14 % | 1.14 % | 1.13 % | 1.15 % |
Net investment income | 0.76 % | 0.33 % | 0.33 % | 0.74 % | 0.38 % |
Supplemental data | |||||
Portfolio turnover rate3 | 87 % | 70 % | 62 % | 78 % | 168 % |
Net assets, end of period (000s omitted) | $304,601 | $376,072 | $414,013 | $262,574 | $11,902 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.74% |
Year ended May 31, 2022 | 0.74% |
Year ended May 31, 2021 | 0.74% |
Year ended May 31, 2020 | 0.74% |
Year ended May 31, 2019 | 0.75% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Value Fund | 15
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $29.79 | $32.69 | $18.43 | $21.48 | $25.38 |
Net investment income (loss) | 0.00 1,2 | (0.12 )2 | (0.07 )2 | 0.01 2 | (0.08 )2 |
Net realized and unrealized gains (losses) on investments | (3.14 ) | (0.64 ) | 14.33 | (3.00 ) | (3.82 ) |
Total from investment operations | (3.14 ) | (0.76 ) | 14.26 | (2.99 ) | (3.90 ) |
Distributions to shareholders from | |||||
Net investment income | 0.00 | 0.00 | 0.00 | (0.06 ) | 0.00 |
Net realized gains | (1.35 ) | (2.14 ) | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (1.35 ) | (2.14 ) | 0.00 | (0.06 ) | 0.00 |
Net asset value, end of period | $25.30 | $29.79 | $32.69 | $18.43 | $21.48 |
Total return3 | (10.94 )% | (2.56 )% | 76.80 % | (13.98 )% | (15.37 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 2.07 % | 2.07 % | 2.06 % | 2.08 % | 2.22 % |
Net expenses | 1.90 % | 1.90 % | 1.90 % | 1.90 % | 1.90 % |
Net investment income (loss) | 0.00 % | (0.39 )% | (0.29 )% | 0.02 % | (0.35 )% |
Supplemental data | |||||
Portfolio turnover rate4 | 87 % | 70 % | 62 % | 78 % | 168 % |
Net assets, end of period (000s omitted) | $1,307 | $2,278 | $3,388 | $4,431 | $1,099 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.74% |
Year ended May 31, 2022 | 0.74% |
Year ended May 31, 2021 | 0.74% |
Year ended May 31, 2020 | 0.74% |
Year ended May 31, 2019 | 0.75% |
1 | Amount is less than $0.005. |
2 | Calculated based upon average shares outstanding |
3 | Total return calculations do not include any sales charges. |
4 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
16 | Allspring Small Company Value Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class R6 | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $35.46 | $38.33 | $21.56 | $24.92 | $29.44 |
Net investment income | 0.37 1 | 0.33 | 0.20 | 0.31 | 0.21 1 |
Net realized and unrealized gains (losses) on investments | (3.79 ) | (0.80 ) | 16.78 | (3.50 ) | (4.45 ) |
Total from investment operations | (3.42 ) | (0.47 ) | 16.98 | (3.19 ) | (4.24 ) |
Distributions to shareholders from | |||||
Net investment income | (0.01 ) | (0.26 ) | (0.21 ) | (0.17 ) | (0.28 ) |
Net realized gains | (1.35 ) | (2.14 ) | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (1.36 ) | (2.40 ) | (0.21 ) | (0.17 ) | (0.28 ) |
Net asset value, end of period | $30.68 | $35.46 | $38.33 | $21.56 | $24.92 |
Total return | (9.95 )% | (1.41 )% | 78.63 % | (12.97 )% | (14.38 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 0.89 % | 0.89 % | 0.89 % | 0.90 % | 1.09 % |
Net expenses | 0.75 % | 0.75 % | 0.75 % | 0.75 % | 0.75 % |
Net investment income | 1.11 % | 0.71 % | 0.73 % | 1.22 % | 0.77 % |
Supplemental data | |||||
Portfolio turnover rate2 | 87 % | 70 % | 62 % | 78 % | 168 % |
Net assets, end of period (000s omitted) | $14,573 | $8,021 | $9,007 | $6,491 | $731 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.74% |
Year ended May 31, 2022 | 0.74% |
Year ended May 31, 2021 | 0.74% |
Year ended May 31, 2020 | 0.74% |
Year ended May 31, 2019 | 0.75% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Value Fund | 17
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Administrator Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $35.15 | $37.98 | $21.40 | $24.80 | $29.23 |
Net investment income | 0.28 1 | 0.17 1 | 0.10 1 | 0.21 1 | 0.14 1 |
Net realized and unrealized gains (losses) on investments | (3.75 ) | (0.75 ) | 16.62 | (3.43 ) | (4.43 ) |
Total from investment operations | (3.47 ) | (0.58 ) | 16.72 | (3.22 ) | (4.29 ) |
Distributions to shareholders from | |||||
Net investment income | 0.00 | (0.11 ) | (0.14 ) | (0.18 ) | (0.14 ) |
Net realized gains | (1.35 ) | (2.14 ) | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (1.35 ) | (2.25 ) | (0.14 ) | (0.18 ) | (0.14 ) |
Net asset value, end of period | $30.33 | $35.15 | $37.98 | $21.40 | $24.80 |
Total return | (10.20 )% | (1.71 )% | 77.91 % | (13.18 )% | (14.65 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 1.24 % | 1.24 % | 1.24 % | 1.32 % | 1.35 % |
Net expenses | 1.05 % | 1.05 % | 1.05 % | 1.05 % | 1.05 % |
Net investment income | 0.86 % | 0.45 % | 0.35 % | 0.82 % | 0.49 % |
Supplemental data | |||||
Portfolio turnover rate2 | 87 % | 70 % | 62 % | 78 % | 168 % |
Net assets, end of period (000s omitted) | $17,743 | $23,813 | $32,721 | $15,581 | $13,905 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.74% |
Year ended May 31, 2022 | 0.74% |
Year ended May 31, 2021 | 0.74% |
Year ended May 31, 2020 | 0.74% |
Year ended May 31, 2019 | 0.75% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
18 | Allspring Small Company Value Fund
Financial highlights
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Institutional Class | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $35.30 | $38.13 | $21.46 | $24.86 | $29.40 |
Net investment income | 0.35 1 | 0.20 1 | 0.15 1 | 0.25 | 0.19 1 |
Net realized and unrealized gains (losses) on investments | (3.78 ) | (0.71 ) | 16.70 | (3.43 ) | (4.45 ) |
Total from investment operations | (3.43 ) | (0.51 ) | 16.85 | (3.18 ) | (4.26 ) |
Distributions to shareholders from | |||||
Net investment income | (0.01 ) | (0.18 ) | (0.18 ) | (0.22 ) | (0.28 ) |
Net realized gains | (1.35 ) | (2.14 ) | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (1.36 ) | (2.32 ) | (0.18 ) | (0.22 ) | (0.28 ) |
Net asset value, end of period | $30.51 | $35.30 | $38.13 | $21.46 | $24.86 |
Total return | (10.03 )% | (1.53 )% | 78.39 % | (13.03 )% | (14.46 )% |
Ratios to average net assets (annualized)* | |||||
Gross expenses | 0.99 % | 0.99 % | 0.99 % | 1.07 % | 1.14 % |
Net expenses | 0.85 % | 0.85 % | 0.85 % | 0.85 % | 0.85 % |
Net investment income | 1.06 % | 0.54 % | 0.52 % | 1.04 % | 0.68 % |
Supplemental data | |||||
Portfolio turnover rate2 | 87 % | 70 % | 62 % | 78 % | 168 % |
Net assets, end of period (000s omitted) | $110,536 | $115,479 | $72,123 | $33,600 | $33,116 |
* | Ratios include net expenses allocated from the affiliated Master Portfolio which were as follows: |
Year ended May 31, 2023 | 0.74% |
Year ended May 31, 2022 | 0.74% |
Year ended May 31, 2021 | 0.74% |
Year ended May 31, 2020 | 0.74% |
Year ended May 31, 2019 | 0.75% |
1 | Calculated based upon average shares outstanding |
2 | Portfolio turnover rate is calculated by multiplying the affiliated Master Portfolio’s percentage of the Fund’s total investment in securities at the end of the period by the affiliated Master Portfolio’s portfolio turnover rate. |
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Value Fund | 19
Notes to financial statements
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 Company Value Fund (the “Fund”) which is a diversified series of the Trust.
The Fund is a feeder fund in a master-feeder structure that invests substantially all of its assets in a single master portfolio with a substantially identical investment objective and substantially similar investment strategies. The Fund invests in Allspring Small Company Value Portfolio, a separate diversified portfolio (the “affiliated Master Portfolio”) of Allspring Master Trust, a registered open-end management investment company. As of May 31, 2023, the Fund owned 88.78% of Allspring Small Company Value Portfolio. The affiliated Master Portfolio directly acquires portfolio securities and the Fund acquires an indirect interest in those securities. The Fund accounts for its investment in the affiliated Master Portfolio as a partnership investment and records on a daily basis its share of the affiliated Master Portfolio’s income, expense and realized and unrealized gains and losses. The financial statements of the affiliated Master Portfolio for the year ended May 31, 2023 are included in this report and should be read in conjunction with the Fund’s financial statements.
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.
Investments in the affiliated Master Portfolio are valued daily based on the Fund’s proportionate share of the affiliated Master Portfolio’s net assets, which are also valued daily.
Investments which are not valued using the method 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.
Investment transactions, income and expenses
Investments in the affiliated Master Portfolio are recorded on a trade date basis. The Fund records daily its proportionate share of the affiliated Master Portfolio’s income, expenses and realized and unrealized gains or losses. The Fund also accrues its own expenses.
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.
20 | Allspring Small Company Value Fund
Notes to financial statements
As of May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $402,852,494 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $45,861,136 |
Gross unrealized losses | 0 |
Net unrealized gains | $45,861,136 |
As of May 31, 2023, the Fund had capital loss carryforwards which consist of $12,204,996 in short-term capital losses.
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
At May 31, 2023, the Fund’s investment in the affiliated Master Portfolio was measured at fair value using the net asset value per share (or its equivalent) as a practical expedient. The investment objective and fair value of the affiliated Master Portfolio is as follows:
Affiliated Master Portfolio | Investment objective | Fair value of affiliated Master Portfolio |
Allspring Small Company Value Portfolio | Seeks long-term capital appreciation | $448,713,630 |
The affiliated Master Portfolio does not have a redemption period notice, can be redeemed daily and does not have any unfunded commitments.
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 $5 billion | 0.050 % |
Next $5 billion | 0.040 |
Over $10 billion | 0.030 |
For the year ended May 31, 2023, the management fee was equivalent to an annual rate of 0.05% of the Fund’s average daily net assets.
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
Allspring Small Company Value Fund | 21
Notes to financial statements
classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Net expenses from the affiliated Master Portfolio are included in the expense caps. Allspring Funds Management has contractually committed through September 30, 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 May 31, 2023, the contractual expense caps are as follows:
EXPENSE RATIO CAPS | |
Class A | 1.15 % |
Class C | 1.90 |
Class R6 | 0.75 |
Administrator Class | 1.05 |
Institutional Class | 0.85 |
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 May 31, 2023, Allspring Funds Distributor received $1,048 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 May 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.
5.
INVESTMENT PORTFOLIO TRANSACTIONS
The Fund seeks to achieve its investment objective by investing substantially all of its assets in the affiliated Master Portfolio. Purchases and sales have been calculated by multiplying the Fund’s ownership percentage of the affiliated Master Portfolio at the end of the period by the affiliated Master Portfolio’s purchases and sales. Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the year ended May 31, 2023 were $432,601,513 and $448,907,364, 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 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 May 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 May 31, 2023 and May 31, 2022 were as follows:
Year ended May 31 | ||
2023 | 2022 | |
Ordinary income | $62,215 | $11,642,015 |
Long-term capital gain | 20,897,482 | 19,260,365 |
As of May 31, 2023, the components of distributable earnings on a tax basis were as follows:
Undistributed ordinary income | Unrealized gains | Capital loss carryforward |
$4,259,079 | $45,861,136 | $(12,204,996 ) |
22 | Allspring Small Company Value Fund
Notes to financial statements
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.
Allspring Small Company Value Fund | 23
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 Company Value Fund (the Fund), one of the funds constituting Allspring Funds Trust, including the portfolio of investments, as of May 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 May 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 interests held as of May 31, 2023, by correspondence with the transfer agent of the master portfolio. 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
July 27, 2023
24 | Allspring Small Company Value Fund
Portfolio of investments—May 31, 2023
Portfolio of investments
Shares | Value | |||||
Common stocks: 98.96% | ||||||
Communication services: 0.24% | ||||||
Interactive media & services: 0.24% | ||||||
Cargurus, Inc.† | 65,313 | $1,227,231 | ||||
Consumer discretionary: 11.09% | ||||||
Automobile components: 0.80% | ||||||
Patrick Industries, Inc. | 61,343 | 4,019,807 | ||||
Diversified consumer services: 0.75% | ||||||
Carriage Services, Inc. | 145,137 | 3,796,784 | ||||
Hotels, restaurants & leisure: 1.55% | ||||||
Dine Brands Global, Inc. | 49,400 | 2,955,602 | ||||
Wyndham Hotels & Resorts, Inc. | 71,675 | 4,891,819 | ||||
7,847,421 | ||||||
Household durables: 3.16% | ||||||
Cavco Industries, Inc.† | 9,156 | 2,279,661 | ||||
Century Communities, Inc. | 63,674 | 4,051,576 | ||||
Ethan Allen Interiors, Inc. | 86,628 | 2,168,299 | ||||
GoPro, Inc. Class A† | 117,475 | 493,395 | ||||
Helen of Troy Ltd.† | 31,094 | 2,993,730 | ||||
Meritage Homes Corp. | 34,787 | 4,011,985 | ||||
15,998,646 | ||||||
Leisure products: 1.87% | ||||||
Johnson Outdoors, Inc. Class A | 80,316 | 4,558,736 | ||||
Malibu Boats, Inc. Class A† | 93,399 | 4,898,778 | ||||
9,457,514 | ||||||
Specialty retail: 2.60% | ||||||
1-800-Flowers.com, Inc. Class A† | 339,566 | 2,757,276 | ||||
American Eagle Outfitters, Inc. | 129,717 | 1,319,222 | ||||
Dick’s Sporting Goods, Inc. | 33,997 | 4,334,957 | ||||
Shoe Carnival, Inc. | 171,325 | 3,352,830 | ||||
Williams-Sonoma, Inc. | 12,141 | 1,378,125 | ||||
13,142,410 | ||||||
Textiles, apparel & luxury goods: 0.36% | ||||||
Rocky Brands, Inc. | 94,640 | 1,808,570 | ||||
Consumer staples: 4.06% | ||||||
Beverages: 0.82% | ||||||
Coca-Cola Consolidated, Inc. | 6,274 | 4,151,757 | ||||
Consumer staples distribution & retail: 1.62% | ||||||
Grocery Outlet Holding Corp.† | 146,397 | 4,204,522 | ||||
Sprouts Farmers Market, Inc.† | 114,553 | 3,958,951 | ||||
8,163,473 | ||||||
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Value Portfolio | 25
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Food products: 1.62% | ||||||
Flowers Foods, Inc. | 84,046 | $2,099,469 | ||||
Hostess Brands, Inc.† | 112,479 | 2,798,478 | ||||
Post Holdings, Inc.† | 38,592 | 3,278,776 | ||||
8,176,723 | ||||||
Energy: 4.13% | ||||||
Energy equipment & services: 1.92% | ||||||
Helmerich & Payne, Inc. | 160,027 | 4,941,634 | ||||
Patterson-UTI Energy, Inc. | 487,887 | 4,752,019 | ||||
9,693,653 | ||||||
Oil, gas & consumable fuels: 2.21% | ||||||
Diamondback Energy, Inc. | 58,775 | 7,473,242 | ||||
W&T Offshore, Inc.† | 954,152 | 3,692,568 | ||||
11,165,810 | ||||||
Financials: 22.33% | ||||||
Banks: 10.93% | ||||||
Ameris Bancorp | 171,577 | 5,414,970 | ||||
Atlantic Union Bankshares Corp. | 203,316 | 5,196,757 | ||||
Axos Financial, Inc.† | 157,464 | 5,955,288 | ||||
Banner Corp. | 111,333 | 4,817,379 | ||||
Customers Bancorp, Inc.† | 136,122 | 3,133,528 | ||||
FB Financial Corp. | 117,424 | 3,130,524 | ||||
Great Southern Bancorp, Inc. | 106,528 | 5,180,457 | ||||
Heritage Financial Corp. | 169,166 | 2,765,864 | ||||
Independent Bank Corp. | 293,144 | 4,792,904 | ||||
OceanFirst Financial Corp. | 87,541 | 1,243,082 | ||||
OFG Bancorp | 229,304 | 5,562,915 | ||||
Synovus Financial Corp. | 196,962 | 5,335,701 | ||||
Univest Financial Corp. | 153,950 | 2,729,534 | ||||
55,258,903 | ||||||
Capital markets: 2.79% | ||||||
Donnelley Financial Solutions, Inc.† | 96,906 | 4,297,781 | ||||
Piper Sandler Cos., | 44,692 | 5,692,420 | ||||
Stifel Financial Corp. | 73,835 | 4,103,011 | ||||
14,093,212 | ||||||
Financial services: 2.06% | ||||||
Cass Information Systems, Inc. | 43,947 | 1,697,233 | ||||
Euronet Worldwide, Inc.† | 23,769 | 2,647,867 | ||||
Jackson Financial, Inc. Class A | 40,588 | 1,124,288 | ||||
WEX, Inc.† | 29,985 | 4,973,012 | ||||
10,442,400 | ||||||
Insurance: 4.00% | ||||||
American Equity Investment Life Holding Co. | 182,757 | 7,209,763 | ||||
Brighthouse Financial, Inc.† | 30,303 | 1,219,999 | ||||
The accompanying notes are an integral part of these financial statements.
26 | Allspring Small Company Value Portfolio
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Insurance (continued) | ||||||
Genworth Financial, Inc. Class A† | 844,677 | $4,519,022 | ||||
Unum Group† | 166,846 | 7,249,459 | ||||
20,198,243 | ||||||
Mortgage real estate investment trusts (REITs): 2.55% | ||||||
AGNC Investment Corp. | 691,638 | 6,356,153 | ||||
Annaly Capital Management, Inc. | 345,500 | 6,523,040 | ||||
12,879,193 | ||||||
Health care: 12.11% | ||||||
Biotechnology: 1.41% | ||||||
CRISPR Therapeutics AG† | 59,604 | 3,817,040 | ||||
Protagonist Therapeutics, Inc.† | 126,017 | 3,285,263 | ||||
7,102,303 | ||||||
Health care equipment & supplies: 4.83% | ||||||
Dentsply Sirona, Inc. | 96,419 | 3,482,654 | ||||
EDAP TMS SA ADR† | 324,801 | 3,231,770 | ||||
Figs, Inc. Class A† | 209,344 | 1,724,995 | ||||
Masimo Corp.† | 13,806 | 2,234,363 | ||||
Merit Medical Systems, Inc.† | 55,148 | 4,544,195 | ||||
QuidelOrtho Corp.† | 64,046 | 5,452,877 | ||||
UFP Technologies, Inc.† | 24,145 | 3,733,541 | ||||
24,404,395 | ||||||
Health care providers & services: 5.21% | ||||||
Addus HomeCare Corp.† | 56,872 | 5,127,011 | ||||
AMN Healthcare Services, Inc.† | 57,362 | 5,447,095 | ||||
Ensign Group, Inc. | 38,564 | 3,417,156 | ||||
Fulgent Genetics, Inc.† | 112,069 | 4,456,984 | ||||
Joint Corp.† | 34,081 | 483,269 | ||||
Option Care Health, Inc.† | 79,323 | 2,185,349 | ||||
Pediatrix Medical Group, Inc.† | 72,468 | 963,824 | ||||
U.S. Physical Therapy, Inc. | 41,638 | 4,253,322 | ||||
26,334,010 | ||||||
Pharmaceuticals: 0.66% | ||||||
Prestige Consumer Healthcare, Inc.† | 50,192 | 2,872,488 | ||||
Supernus Pharmaceuticals, Inc.† | 14,738 | 488,418 | ||||
3,360,906 | ||||||
Industrials: 21.31% | ||||||
Building products: 2.50% | ||||||
CSW Industrials, Inc. | 27,083 | 3,838,203 | ||||
UFP Industries, Inc. | 57,234 | 4,469,975 | ||||
Zurn Elkay Water Solutions Corp. Class C | 191,068 | 4,300,941 | ||||
12,609,119 | ||||||
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Value Portfolio | 27
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Commercial services & supplies: 1.47% | ||||||
ABM Industries, Inc. | 95,031 | $4,196,569 | ||||
ACCO Brands Corp. | 287,348 | 1,390,764 | ||||
Healthcare Services Group, Inc.† | 134,882 | 1,822,256 | ||||
7,409,589 | ||||||
Construction & engineering: 3.52% | ||||||
Comfort Systems USA, Inc. | 29,027 | 4,295,415 | ||||
MYR Group, Inc.† | 46,861 | 5,974,778 | ||||
Sterling Infrastructure, Inc.† | 163,694 | 7,541,383 | ||||
17,811,576 | ||||||
Electrical equipment: 2.09% | ||||||
Atkore, Inc.† | 20,812 | 2,430,217 | ||||
Generac Holdings, Inc.† | 36,565 | 3,982,660 | ||||
Regal Rexnord Corp. | 31,832 | 4,134,659 | ||||
10,547,536 | ||||||
Ground transportation: 0.82% | ||||||
ArcBest Corp. | 49,704 | 4,164,201 | ||||
Machinery: 7.01% | ||||||
Federal Signal Corp. | 107,760 | 5,710,202 | ||||
Hillenbrand, Inc. | 125,552 | 6,022,730 | ||||
Hillman Solutions Corp.† | 59,020 | 478,062 | ||||
Kadant, Inc. | 25,994 | 4,931,582 | ||||
Miller Industries, Inc. | 101,669 | 3,340,843 | ||||
Shyft Group, Inc. | 183,737 | 4,319,657 | ||||
Standex International Corp. | 49,198 | 6,700,276 | ||||
Timken Co. | 55,208 | 3,950,132 | ||||
35,453,484 | ||||||
Passenger airlines: 0.66% | ||||||
Alaska Air Group, Inc.† | 74,486 | 3,346,656 | ||||
Professional services: 1.71% | ||||||
CBIZ, Inc.† | 93,816 | 4,730,203 | ||||
First Advantage Corp.† | 141,999 | 1,918,406 | ||||
TTEC Holdings, Inc. | 62,574 | 1,984,847 | ||||
8,633,456 | ||||||
Trading companies & distributors: 1.53% | ||||||
Air Lease Corp. | 39,487 | 1,501,295 | ||||
Boise Cascade Co. | 78,818 | 5,660,709 | ||||
Hudson Technologies, Inc.† | 65,789 | 574,996 | ||||
7,737,000 | ||||||
The accompanying notes are an integral part of these financial statements.
28 | Allspring Small Company Value Portfolio
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Information technology: 10.92% | ||||||
Communications equipment: 1.20% | ||||||
Aviat Networks, Inc.† | 61,517 | $1,883,651 | ||||
Harmonic, Inc.† | 238,933 | 4,207,610 | ||||
6,091,261 | ||||||
Electronic equipment, instruments & components: 4.77% | ||||||
Belden, Inc. | 23,636 | 2,067,914 | ||||
ePlus, Inc.† | 82,103 | 4,055,067 | ||||
Insight Enterprises, Inc.† | 28,325 | 3,830,107 | ||||
Methode Electronics, Inc. | 107,868 | 4,643,717 | ||||
PC Connection, Inc. | 79,597 | 3,579,477 | ||||
Richardson Electronics Ltd. | 89,763 | 1,489,168 | ||||
Sanmina Corp.† | 84,203 | 4,466,127 | ||||
24,131,577 | ||||||
IT services: 1.42% | ||||||
EPAM Systems, Inc.† | 15,552 | 3,990,954 | ||||
Hackett Group, Inc. | 40,885 | 792,760 | ||||
Kyndryl Holdings, Inc.† | 190,442 | 2,391,952 | ||||
7,175,666 | ||||||
Semiconductors & semiconductor equipment: 2.73% | ||||||
Cirrus Logic, Inc.† | 29,787 | 2,313,854 | ||||
Diodes, Inc.† | 26,999 | 2,425,590 | ||||
FormFactor, Inc.† | 101,768 | 3,184,321 | ||||
Ichor Holdings Ltd.† | 75,486 | 2,287,226 | ||||
Onto Innovation, Inc.† | 33,244 | 3,568,743 | ||||
13,779,734 | ||||||
Software: 0.80% | ||||||
Mitek Systems, Inc.† | 73,524 | 766,120 | ||||
Verint Systems, Inc.† | 90,995 | 3,264,901 | ||||
4,031,021 | ||||||
Materials: 5.86% | ||||||
Chemicals: 3.24% | ||||||
AdvanSix, Inc. | 149,312 | 4,912,365 | ||||
Hawkins, Inc. | 128,923 | 6,051,645 | ||||
Ingevity Corp.† | 14,635 | 690,626 | ||||
Minerals Technologies, Inc. | 58,129 | 3,232,554 | ||||
Stepan Co. | 15,938 | 1,465,499 | ||||
16,352,689 | ||||||
Construction materials: 1.49% | ||||||
Eagle Materials, Inc. | 46,192 | 7,526,062 | ||||
Containers & packaging: 0.19% | ||||||
Greif, Inc. Class A | 15,839 | 951,924 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Value Portfolio | 29
Portfolio of investments—May 31, 2023
Shares | Value | |||||
Metals & mining: 0.94% | ||||||
Schnitzer Steel Industries, Inc. Class A | 173,055 | $4,760,743 | ||||
Real estate: 6.36% | ||||||
Diversified REITs: 0.90% | ||||||
Armada Hoffler Properties, Inc. | 294,336 | 3,249,469 | ||||
One Liberty Properties, Inc. | 65,967 | 1,320,000 | ||||
4,569,469 | ||||||
Health care REITs: 0.30% | ||||||
Global Medical REIT, Inc. | 174,513 | 1,521,753 | ||||
Industrial REITs : 2.71% | ||||||
LXP Industrial Trust | 236,095 | 2,441,222 | ||||
Plymouth Industrial REIT, Inc. | 175,303 | 3,840,889 | ||||
STAG Industrial, Inc. | 212,648 | 7,400,150 | ||||
13,682,261 | ||||||
Office REITs : 0.22% | ||||||
Vornado Realty Trust | 81,364 | 1,103,296 | ||||
Retail REITs : 1.16% | ||||||
Agree Realty Corp. | 63,659 | 4,105,369 | ||||
Retail Opportunity Investments Corp. | 145,291 | 1,772,550 | ||||
5,877,919 | ||||||
Specialized REITs : 1.07% | ||||||
Outfront Media, Inc. | 131,722 | 1,886,259 | ||||
PotlatchDeltic Corp. | 75,767 | 3,525,439 | ||||
5,411,698 | ||||||
Utilities: 0.55% | ||||||
Electric utilities: 0.37% | ||||||
IDACORP, Inc. | 5,914 | 615,470 | ||||
Pinnacle West Capital Corp. | 8,639 | 667,622 | ||||
Portland General Electric Co. | 11,559 | 563,270 | ||||
1,846,362 | ||||||
Water utilities: 0.18% | ||||||
California Water Service Group | 10,864 | 618,270 | ||||
Middlesex Water Co. | 3,800 | 309,168 | ||||
927,438 | ||||||
Total common stocks (Cost $412,203,683) | 500,176,854 | |||||
The accompanying notes are an integral part of these financial statements.
30 | Allspring Small Company Value Portfolio
Portfolio of investments—May 31, 2023
Expiration date | Shares | Value | ||||
Warrants: 0.00% | ||||||
Energy: 0.00% | ||||||
Energy equipment & services: 0.00% | ||||||
Parker Drilling Co.† | 9-16-2024 | 8,457 | $211 | |||
Total warrants (Cost $0) | 211 | |||||
Yield | ||||||
Short-term investments: 0.94% | ||||||
Investment companies: 0.94% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.01 % | 4,743,595 | 4,743,595 | |||
Total short-term investments (Cost $4,743,595) | 4,743,595 | |||||
Total investments in securities (Cost $416,947,278) | 99.90 % | 504,920,660 | ||||
Other assets and liabilities, net | 0.10 | 528,144 | ||||
Total net assets | 100.00 % | $505,448,804 | ||||
† | Non-income-earning security |
♠ | The issuer of the security is an affiliated person of the Portfolio 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 Portfolio owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Portfolio and the issuer having the same adviser or investment manager. Transactions with issuers that were affiliates of the Portfolio 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 | $5,144,446 | $86,990,939 | $(87,391,790 ) | $0 | $0 | $4,743,595 | 4,743,595 | $176,646 |
Investments in affiliates no longer held at end of period | ||||||||
Securities Lending Cash Investments LLC | 8,022,300 | 73,268,132 | (81,290,232 ) | (200 ) | 0 | 0 | 0 | 107,340 1 |
$(200 ) | $0 | $4,743,595 | $283,986 |
1 | Amount shown represents income before fees and rebates. |
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Value Portfolio | 31
Statement of assets and liabilities—May 31, 2023
Financial statements
Statement of assets and liabilities
Assets | |
Investments in unaffiliated securities, at value (cost $412,203,683) | $500,177,065 |
Investments in affiliated securities, at value (cost $4,743,595) | 4,743,595 |
Cash | 156,255 |
Receivable for investments sold | 5,012,357 |
Receivable for dividends | 784,246 |
Prepaid expenses and other assets | 6,610 |
Total assets | 510,880,128 |
Liabilities | |
Payable for investments purchased | 5,098,711 |
Advisory fee payable | 303,338 |
Trustees’ fees and expenses payable | 504 |
Accrued expenses and other liabilities | 28,771 |
Total liabilities | 5,431,324 |
Total net assets | $505,448,804 |
The accompanying notes are an integral part of these financial statements.
32 | Allspring Small Company Value Portfolio
Statement of operations—year ended May 31, 2023
Statement of operations
Investment income | |
Dividends (net of foreign withholdings taxes of $17,167) | $10,250,490 |
Income from affiliated securities | 545,814 |
Interest | 150 |
Total investment income | 10,796,454 |
Expenses | |
Advisory fee | 4,507,550 |
Custody and accounting fees | 61,434 |
Professional fees | 67,178 |
Interest holder report expenses | 18,862 |
Trustees’ fees and expenses | 27,365 |
Other fees and expenses | 25,377 |
Total expenses | 4,707,766 |
Less: Fee waivers and/or expense reimbursements | (523,137 ) |
Net expenses | 4,184,629 |
Net investment income | 6,611,825 |
Realized and unrealized gains (losses) on investments | |
Net realized losses on | |
Unaffiliated securities | (12,010,256 ) |
Affiliated securities | (200 ) |
Net realized losses on investments | (12,010,456 ) |
Net change in unrealized gains (losses) on investments | (51,512,308 ) |
Net realized and unrealized gains (losses) on investments | (63,522,764 ) |
Net decrease in net assets resulting from operations | $(56,910,939 ) |
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Value Portfolio | 33
Statement of changes in net assets
Statement of changes in net assets
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $6,611,825 | $4,422,079 | ||
Net realized gains (losses) on investments | (12,010,456 ) | 64,991,534 | ||
Net change in unrealized gains (losses) on investments | (51,512,308 ) | (80,777,394 ) | ||
Net decrease in net assets resulting from operations | (56,910,939 ) | (11,363,781 ) | ||
Capital transactions | ||||
Transactions in investors’ beneficial interests | ||||
Contributions | 41,481,218 | 74,799,145 | ||
Withdrawals | (75,314,113 ) | (87,265,392 ) | ||
Net decrease in net assets resulting from capital transactions | (33,832,895 ) | (12,466,247 ) | ||
Total decrease in net assets | (90,743,834 ) | (23,830,028 ) | ||
Net assets | ||||
Beginning of period | 596,192,638 | 620,022,666 | ||
End of period | $505,448,804 | $596,192,638 | ||
The accompanying notes are an integral part of these financial statements.
34 | Allspring Small Company Value Portfolio
Financial highlights
Financial highlights
Year ended May 31 | |||||
2023 | 2022 | 2021 | 2020 | 2019 | |
Total return | (9.95 )% | (1.78 )% | 78.76 % | (13.74 )% | (14.51 )% |
Ratios to average net assets (annualized) | |||||
Gross expenses | 0.83 % | 0.83 % | 0.83 % | 0.82 % | 0.86 % |
Net expenses1 | 0.74 % | 0.74 % | 0.74 % | 0.74 % | 0.75 % |
Net investment income | 1.17 % | 0.72 % | 0.71 % | 1.15 % | 0.80 % |
Supplemental data | |||||
Portfolio turnover rate | 87 % | 70 % | 62 % | 78 % | 168 % |
1 | Net expense ratios reflect voluntary waivers, if any. |
The accompanying notes are an integral part of these financial statements.
Allspring Small Company Value Portfolio | 35
Notes to financial statements
Notes to financial statements
1.
ORGANIZATION
Allspring Master 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 Company Value Portfolio (the “Portfolio”) which is a diversified series of the Trust.
Interests in the Portfolio are available solely through private placement transactions that do not involve any “public offering” within the meaning of Section 4(a)(2) of the Securities Act of 1933.
2.
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Portfolio, 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 Portfolio 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 any of 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 Portfolio 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 Portfolio 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. Interests in the non-registered investment company that were redeemable at net asset value were fair valued normally at net asset value. Effective at the close of business on March 29, 2023, the Portfolio 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.
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.
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.
Federal and other taxes
The Portfolio is not required to pay federal income taxes on its net investment income and net capital gains as it is treated as a partnership for federal income tax purposes. All income, gains and losses of the Portfolio are deemed to have been “passed through” to the interest holders in proportion to their holdings of the Portfolio regardless of whether income and gains have been distributed by the Portfolio.
36 | Allspring Small Company Value Portfolio
Notes to financial statements
The Portfolio’s income tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal revenue authority. Management has analyzed the Portfolio’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 May 31, 2023, the aggregate cost of all investments for federal income tax purposes was $429,288,754 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $105,377,395 |
Gross unrealized losses | (29,745,489 ) |
Net unrealized gains | $75,631,906 |
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 Portfolio’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 Portfolio’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 Portfolio’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 Portfolio’s assets and liabilities as of May 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 | $1,227,231 | $0 | $0 | $1,227,231 |
Consumer discretionary | 56,071,152 | 0 | 0 | 56,071,152 |
Consumer staples | 20,491,953 | 0 | 0 | 20,491,953 |
Energy | 20,859,463 | 0 | 0 | 20,859,463 |
Financials | 112,871,951 | 0 | 0 | 112,871,951 |
Health care | 61,201,614 | 0 | 0 | 61,201,614 |
Industrials | 107,712,617 | 0 | 0 | 107,712,617 |
Information technology | 55,209,259 | 0 | 0 | 55,209,259 |
Materials | 29,591,418 | 0 | 0 | 29,591,418 |
Real estate | 32,166,396 | 0 | 0 | 32,166,396 |
Utilities | 2,773,800 | 0 | 0 | 2,773,800 |
Warrants | ||||
Energy | 0 | 211 | 0 | 211 |
Short-term investments | ||||
Investment companies | 4,743,595 | 0 | 0 | 4,743,595 |
Total assets | $504,920,449 | $211 | $0 | $504,920,660 |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the year ended May 31, 2023, the Portfolio did not have any transfers into/out of Level 3.
4.
TRANSACTIONS WITH AFFILIATES
Advisory fee
The Trust has entered into an advisory contract with 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. The adviser is responsible for implementing investment policies and guidelines and for supervising the subadviser, who is responsible for day-to-day portfolio management of the
Allspring Small Company Value Portfolio | 37
Notes to financial statements
Portfolio. Pursuant to the contract, Allspring Funds Management is entitled to receive an advisory fee at the following annual rate based on the Portfolio’s average daily net assets:
Average daily net assets | Advisory fee |
First $500 million | 0.800 % |
Next $500 million | 0.775 |
Next $1 billion | 0.750 |
Next $1 billion | 0.725 |
Next $1 billion | 0.700 |
Over $4 billion | 0.680 |
For the year ended May 31, 2023, the advisory fee was equivalent to an annual rate of 0.80% of the Portfolio’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Portfolio. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Investments is the subadviser to the Portfolio 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 Portfolio increase.
Allspring Funds Management has voluntarily waived and/or reimbursed advisory fees to reduce the net operating expense ratio of the Portfolio. These voluntary waivers may be discontinued at any time.
Interfund transactions
The Portfolio 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 May 31, 2023 were $485,998,766 and $504,206,386, respectively.
6.
BANK BORROWINGS
The Trust, along with Allspring Variable Trust and Allspring Funds Trust (excluding the money market funds), are parties to a $350,000,000 revolving credit agreement whereby the Portfolio is permitted to use bank borrowings for temporary or emergency purposes, such as to fund interest holders withdrawal requests. Interest under the credit agreement is charged to the Portfolio based on 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 May 31, 2023, there were no borrowings by the Portfolio under the agreement.
7.
INDEMNIFICATION
Under the Portfolio’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 Portfolio. The Portfolio has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Portfolio’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 Portfolio may enter into contracts with service providers that contain a variety of indemnification clauses. The Portfolio’s maximum exposure under these arrangements is dependent on future claims that may be made against the Portfolio and, therefore, cannot be estimated.
38 | Allspring Small Company Value Portfolio
Report of independent registered public accounting firm
To the Interest Holders of the Portfolio and Board of Trustees
Allspring Master Trust:
Allspring Master Trust:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Allspring Small Company Value Portfolio (the Portfolio), one of the portfolios constituting Allspring Master Trust, including the portfolio of investments, as of May 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 Portfolio as of May 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 Portfolio’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 Portfolio 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 May 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
July 27, 2023
Allspring Small Company Value Portfolio | 39
Other information (unaudited)
Other information
Tax information
For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 51% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended May 31, 2023.
Pursuant to Section 852 of the Internal Revenue Code, $20,897,482 was designated as a 20% rate gain distribution for the fiscal year ended May 31, 2023.
Pursuant to Section 854 of the Internal Revenue Code, $31,370 of income dividends paid during the fiscal year ended May 31, 2023 has been designated as qualified dividend income (QDI).
For the fiscal year ended May 31, 2023, $144 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 and Portfolio file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. Shareholders and Interest holders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
40 | Allspring Small Company Value 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 128 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 |
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 |
1
The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by call 1-800-222-8222 or by visiting the website at allspringglobal.com.
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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 |
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. |
42 | Allspring Small Company Value Fund
Other information (unaudited)
Officers1
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 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 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.
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Other information (unaudited)
Board consideration of investment management, advisory, and sub-advisory agreements:
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (each, a “Board” and collectively, the “Boards”) of each of Allspring Funds Trust (“Funds Trust”) and Allspring Master Trust (“Master Trust”, and collectively, the “Trusts”) must determine annually whether to approve the continuation of the Trusts’ investment management, advisory, and sub-advisory agreements, as applicable. In this regard, at a Board meeting held on May 15-17, 2023 (the “Meeting”), the Funds Trust Board, all the members of which have no direct or indirect interest in the investment management agreement and are not “interested persons” of the Trusts, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for the Allspring Small Company Value Fund, a portfolio of Funds Trust (the “Feeder Fund”), an investment management agreement (the “Feeder Fund Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”).
At the Meeting, the Master Trust Board, all the members of which have no direct or indirect interest in the investment advisory and sub-advisory agreements and are Independent Trustees, reviewed and approved: (i) an investment advisory agreement (the “Master Portfolio Advisory Agreement”) with Allspring Funds Management for the Allspring Small Company Value Portfolio, a portfolio of Master Trust (the “Master Portfolio”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Allspring Global Investments, LLC 1(the “Sub-Adviser”), an affiliate of Allspring Funds Management, for the Master Portfolio.
The Feeder Fund and the Master Portfolio are collectively referred to as the “Funds.” The Feeder Fund Management Agreement, the Master Portfolio Advisory Agreement, and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
The Feeder Fund is a feeder fund that invest substantially all of its assets in the Master Portfolio. The Master Portfolio has a substantially similar investment objective and substantially similar investment strategies to the Feeder Fund. Information provided to the Boards regarding the Feeder Fund is also applicable to the Master Portfolio, as relevant.
At the Meeting, the Boards considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at meeting of the Boards held in April 2023, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Boards have adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Boards in the discharge of their duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
The Boards noted that they initially approved the Advisory Agreements at a meeting of the Boards held in May 2021, all for a two-year term, in advance of the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. (the “Transaction”). The Trustees also noted that, while they did not specifically consider the continuation of the Advisory Agreements in 2022 as a result of the two-year term that was approved in 2021, the Trustees received and considered certain information at a meeting of the Boards held in April 2022 that was applicable to the Advisory Agreements, including an overview and financial review of the Allspring Global Investments business, information regarding certain ancillary agreements that were approved by the Boards at the April 2022 Board meeting, and comparative data regarding Fund fees and expenses.
In providing information to the Boards, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Boards’ annual contract renewal process earlier in 2023. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Boards considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Boards reviewed reports of Allspring Funds Management at each of their quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Boards and the teams mentioned above confer with portfolio managers at various times throughout the year. The Boards did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Funds Trust Board unanimously determined that the compensation payable to Allspring Funds Management was reasonable, and approved the continuation of the Feeder Fund Management Agreement for a one-year term. Additionally, after its deliberations, the Master Trust Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser was reasonable, and approved the continuation of the Master Portfolio Advisory Agreement and the Sub-Advisory Agreement, each for a one-year term. The Boards considered the approval of the Advisory Agreements for the Funds as part of their consideration of agreements for funds across the complex, but their approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Boards in support of their approvals.
1
The trade name for the asset management firm that includes Allspring Funds Management and the Sub-Adviser is “Allspring Global Investments.”
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Other information (unaudited)
Nature, Extent, and Quality of Services
The Boards received and considered various information regarding the nature, extent, and quality of services provided to the Feeder Fund and the Master Portfolio, as applicable, by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Feeder Fund Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business. The Boards also considered information about retention arrangements with respect to key personnel of Allspring Global Investments that were put in place in connection with the Transaction. The Boards took into account information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the Transaction under a transition services agreement and the anticipated timeline for exiting the transition services agreement. In addition, the Boards received and considered information about the full range of services provided to the Fund and the Master Portfolio by Allspring Funds Management and its affiliates.
The Boards considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Master Portfolio. The Boards evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
The Boards further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Boards received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, and Allspring Funds Management’s role as administrator of the Funds’ liquidity risk management programs. The Boards also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund Investment Performance and Expenses
The Boards considered the investment performance results for each of the Funds over various time periods ended December 31, 2022. The Boards considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to the Feeder Fund (the “Universe”), and in comparison to the Feeder Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Boards received a description of the methodology used by Broadridge to select the mutual funds in the performance Universe. The Funds Trust Board noted that the investment performance of the Feeder Fund (Administrator Class) was higher than the average investment performance of its Universe for all periods under review. The Funds Trust Board also noted that the investment performance of the Feeder Fund was higher than its benchmark index, the Russell 2000® Value Index, for all periods under review.
The Master Trust Board took note of the investment performance of the Master Portfolio in the context of reviewing the investment performance of the Feeder Fund.
The Funds Trust Board also received and considered information regarding the Feeder Fund’s net operating expense ratios, which include fees and expenses of the Master Portfolio, and their various components, including actual management fees assessed at the Feeder Fund and Master Portfolio levels, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Funds Trust Board considered these ratios in comparison to the median ratios of funds in class-specific expense groups that were determined by Broadridge to be similar to the Feeder Fund (the “Groups”). The Funds Trust Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Groups and an explanation of how funds comprising expense groups and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Funds Trust Board noted that the net operating expense ratios of the Feeder Fund were lower than the median net operating expense ratios of the expense Groups for all share classes.
With respect to the Master Portfolio, the Master Trust Board reviewed the fee rates that are payable to Allspring Funds Management for investment advisory services (as discussed below), which are the only fees charged at the Master Portfolio level, relative to a corresponding expense Group.
The Boards took into account the Funds’ investment performance and expense information provided to them among the factors considered in deciding to re-approve the Advisory Agreements.
Investment Management, Advisory, and Sub-Advisory Fee Rates
The Funds Trust Board noted that Allspring Funds Management receives no advisory fees from the Feeder Fund as long as the Feeder Fund continues to invest all (or substantially all) of its assets in a single master portfolio. If the Feeder Fund were to change its investment structure so that it began investing in two or more master portfolios (a fund-of-funds), Allspring Funds Management would be entitled to receive an annual fee of 0.25% of the Feeder Fund’s average daily net assets for providing investment advisory services to the Feeder Fund, including allocating the Feeder Fund’s assets to the Master Portfolio.
The Funds Trust Board reviewed and considered the contractual fee rates that are payable by the Feeder Fund to Allspring Funds Management under the Feeder Fund Management Agreement for management services (other than investment advisory services), as well as the contractual fee rates payable by
Allspring Small Company Value Fund | 45
Other information (unaudited)
the Feeder Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which include, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rates”).
The Master Trust Board reviewed and considered the contractual investment advisory fee rate that is payable by the Master Portfolio to Allspring Funds Management for investment advisory services under the Master Portfolio Advisory Agreement (the “Advisory Agreement Rate”). The Master Trust Board also reviewed and considered the contractual investment sub-advisory fee rate that is payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services (the “Sub-Advisory Agreement Rate”).
Among other information reviewed by the Funds Trust Board was a comparison of the Feeder Fund’s Management Rate, which, for this purpose, includes the advisory fees paid at the Master Portfolio level, with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Funds Trust Board noted that the Management Rates of the Feeder Fund were in range of the sum of these average rates for the Feeder Fund’s expense Groups for all share classes, except the Institutional Class shares were higher than the sum of these average rates for the Feeder Fund’s expense Groups.
The Master Trust Board reviewed a comparison of the Advisory Agreement Rate of the Master Portfolio with those of other funds in the Master Portfolio’s expense Group at a common asset level. The Master Trust Board noted that the Advisory Agreement Rate of the Master Portfolio was in range of the median rate for the Master Portfolio’s expense Group.
The Master Trust Board also received and considered information about the portions of the total management fees that were retained by Allspring Funds Management after payment of the fees to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of these amounts, the Master Trust Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services. Given the affiliation between Allspring Funds Management and the Sub-Adviser, the Master Trust Board ascribed limited relevance to the allocation of fees between them.
The Boards also received and considered information about the nature and extent of services offered and fee rates charged by Allspring Funds Management and the Sub-Adviser to other types of clients with investment strategies similar to those of the Funds. In this regard, the Boards received information about the significantly greater scope of services, and compliance, reporting and other legal burdens and risks of managing proprietary mutual funds compared with those associated with managing assets of other types of clients, including third-party sub-advised fund clients and non-mutual fund clients such as institutional separate accounts.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Funds Trust Board determined that the compensation payable to Allspring Funds Management under the Feeder Fund Management Agreement was reasonable, and the Master Trust Board determined that the compensation payable to Allspring Funds Management under the Master Portfolio Advisory Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
Profitability
The Boards received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole. The Master Trust Board noted that the Sub-Adviser’s profitability information with respect to providing services to the Master Portfolio and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses and differences in how Allspring Global Investments calculates its pre-tax profit metric versus the methodology used when Allspring Funds Management was part of Wells Fargo. It was noted that the impact of such differences had only minor impact on the financial results presented. Among other things, the Boards noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Based on their review, the Boards did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Funds to be at a level that would prevent the Boards from approving the continuation of the Advisory Agreements.
Economies of Scale
The Boards received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Funds, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders of the Funds. The Boards noted the existence of breakpoints in the Master Portfolio’s advisory fee structure and the Feeder Fund’s management fee structure, which operate generally to reduce the Funds’ expense ratios as the Funds grow in size, and the size of the Master Portfolio and the Feeder Fund, respectively, in relation to such breakpoints. The Boards considered that, in addition to advisory fee and management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways, including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
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Other information (unaudited)
The Boards concluded that Allspring Funds Management’s arrangements with respect to each Fund, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Funds and their shareholders.
Other Benefits to Allspring Funds Management and the Sub-Adviser
The Boards received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, as a result of their relationships with the Funds. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Funds and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Funds. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it.
The Boards also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser and fees earned in the past by Allspring Funds Management and the Sub-Adviser from managing a private investment vehicle for the fund family’s securities lending collateral.
Based on their consideration of the factors and information they deemed relevant, including those described here, the Boards did not find that any ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, were unreasonable.
Conclusion
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Funds Trust Board unanimously determined that the compensation payable to Allspring Funds Management was reasonable, and approved the continuation of the Feeder Fund Management Agreement for a one-year term. Additionally, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Master Trust Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser was reasonable, and approved the continuation of the Master Portfolio Advisory Agreement and the Sub-Advisory Agreement, each for a one-year term.
Allspring Small Company Value Fund | 47
Other information (unaudited)
Liquidity risk management program
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Allspring Funds Trust (“Funds Trust”) has adopted and implemented a liquidity risk management program (the “Program”) on behalf of each of its series (other than the series that operate as money market funds), including the Fund, and Allspring Master Trust (“Master Trust” and together with Funds Trust, the “Trusts”) has adopted and implemented the Program on behalf of each of its series, including the Portfolio, which is reasonably designed to assess and manage the Fund’s and the Portfolio’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund or Portfolio is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund or Portfolio. The Trusts’ Boards of Trustees (the “Boards”) previously approved the designation of Allspring Funds Management, LLC (“Allspring Funds Management”), the Fund’s investment manager and the Portfolio’s investment adviser, to administer the Program, and Allspring Funds Management has established a Liquidity Risk Management Council (the “Council”) composed of personnel from multiple departments within Allspring Funds Management and its affiliates to assist Allspring Funds Management in the administration of the Program.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s and the Portfolio’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s and the Portfolio’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent the Fund or the Portfolio does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s or Portfolio’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if the Fund or the Portfolio has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s or the Portfolio’s “highly liquid investments” below its HLIM; and (6) periodic reporting to the Boards.
At a meeting of the Boards held on May 16-17, 2023, the Boards received and reviewed a written report (the “Report”) from Allspring Funds Management that, among other things, addressed the operation of the Program and assessed its adequacy and effectiveness for the period from January 1, 2022 through December 31, 2022 (the “Reporting Period”). The Report noted significant liquidity events impacting the Funds and Portfolios related to extended foreign market holidays as well as the difficulty of trading and settlement of most Russia-related securities due to sanctions activity. The Report noted that there were no material changes to the Program during the Reporting Period.
Allspring Funds Management determined in the Report that the Program has been implemented and operates effectively to manage each Fund’s and Portfolio’s, including the Fund’s and the Portfolio’s, liquidity risk, and Allspring Funds Management continues to believe that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s and the Portfolio’s liquidity developments.
There can be no assurance that the Program will achieve its objectives under all circumstances in the future. With respect to the Fund, please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other risks to which an investment in the Fund may be subject.
48 | Allspring Small Company 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.
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-06072023-uglas5w9 07-23
AR1815 05-23
AR1815 05-23
Multi-Asset Funds
Spectrum Aggressive Growth Fund |
Spectrum Conservative Growth Fund |
Spectrum Growth Fund |
Spectrum Income Allocation Fund |
Spectrum Moderate Growth Fund |
Annual Report
May 31, 2023
Contents
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The views expressed and any forward-looking statements are as of May 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.
Multi-Asset Funds | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this annual report for the Allspring Spectrum Funds for the 12-month period that ended May 31, 2023. Globally, stocks and bonds experienced heightened volatility and poor performance through the challenging period. The market was focused on persistently high inflation 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. Markets received a boost in December with the removal of China’s strict COVID-19 lockdowns. In March 2023, a new wave of market anxiety resulted from several bank failures and unease over the possibility of more rate hikes. However, investors regained confidence and markets finished the period in relative calm.
For the 12-month period, stocks and bonds—both domestic U.S. and global—had mixed results. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 2.92%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 lost 1.41%, while the MSCI EM Index (Net) (USD)3 had weaker performance, with a return of -8.49%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned -2.14%, the Bloomberg Global Aggregate ex-USD Index (unhedged)5 fell 6.49%, the Bloomberg Municipal Bond Index6 gained 0.49%, and the ICE BofA U.S. High Yield Index7 returned -0.09%.
High inflation and central bank rate hikes rocked markets.
In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring inflation. The Federal Reserve (Fed) raised its short-term rate by 0.75% in June. Meanwhile, the U.S. unemployment rate remained historically low 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 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, 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.
“ In June 2022, stocks posted losses after a turbulent few months following Russia’s invasion of Ukraine, resulting in their worst first half of a year in 50 years. Bonds didn’t fare much better. Driving the losses were rising global inflation and fears of recession as central banks increased rates to try to curb soaring 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 the 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.
2 | Multi-Asset Funds
Letter to shareholders (unaudited)
August was yet another broadly challenging month for financial markets. 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 was the resilient U.S. jobs 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.
In September, all asset classes suffered further 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. 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 increasing 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 declining overall in response to a weakening U.S. dollar. Fixed income securities ended one of their worst years ever, with generally flat 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 wound 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.
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 had 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 (ECB) both raised rates by 0.50%.
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.
Multi-Asset Funds | 3
Letter to shareholders (unaudited)
“ 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 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 banking industry turmoil created an additional challenge for central banks in balancing inflationary concerns against potential economic weakening. Meanwhile, recent data pointed to economic strength in the U.S., Europe, and China. 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.
Economic data released in April pointed to global resilience, as Purchasing Managers Indexes1 in the U.S., U.K., and eurozone beat expectations, and China reported first-quarter annualized economic growth of 4.5%. Despite banking industry stress, developed market stocks had monthly gains. The U.S. labor market remained strong, with a 3.5% jobless rate and monthly payroll gains above 200,000. However, uncertainty and inflationary concerns weighed on investors in the U.S. and abroad.
May was marked by a divergence between expanding activity in services and an overall contraction in manufacturing activity in the U.S., U.K., and eurozone. Core inflation remained elevated in the U.S. and Europe, despite the ongoing efforts of the Fed and ECB, which included rate hikes of 0.25% by both in May. Stubborn inflation and the resilient U.S. labor market led to expectations of further interest rate hikes, overall monthly declines across bond indexes, and mixed results for stocks in May. Investor worries over a U.S. debt ceiling impasse were modest, and market confidence was buoyed by a deal in late May to avert a potential U.S. debt default.
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 | Multi-Asset Funds
Letter to shareholders (unaudited)
Notice to Shareholders |
Beginning in July 2024, each Fund will be required by the Securities and Exchange Commission to send shareholders a paper copy of a new tailored shareholder report in place of the full shareholder report that you are now receiving. The tailored shareholder report will contain concise information about the Fund, including certain expense and performance information and fund statistics. If you wish to receive this new tailored shareholder report electronically, please follow the instructions on the back cover of this report. |
Other information that is currently included in the shareholder report, such as each Fund’s financial statements, will be available online and upon request, free of charge, in paper or electronic format. |
Multi-Asset Funds | 5
Performance highlights (unaudited)
Performance highlights
Allspring Spectrum Aggressive Growth Fund
Allspring Spectrum Aggressive Growth Fund
Investment objective | The Fund seeks long-term capital appreciation with no emphasis on income. |
Manager | Allspring Funds Management, LLC |
Subadviser | Allspring Global Investments, LLC |
Portfolio managers | Kandarp R. Acharya, CFA, FRM, Petros N. Bocray, CFA, FRM, Travis L. Keshemberg, CFA, CIPM, FRM |
Average annual total returns (%) as of May 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 | Net2 | |
Class A (WEAFX)3 | 2-10-2017 | -5.94 | 5.87 | 7.47 | -0.20 | 7.13 | 8.11 | 1.02 | 0.74 |
Class C (WEACX)4 | 10-1-1997 | -1.96 | 6.34 | 7.76 | -0.96 | 6.34 | 7.76 | 1.77 | 1.49 |
Administrator Class 5 | 2-4-2022 | – | – | – | -0.10 | 7.27 | 8.17 | 0.95 | 0.67 |
Institutional Class (WEAYX)6 | 7-31-2018 | – | – | – | 0.18 | 7.49 | 8.28 | 0.70 | 0.42 |
Spectrum Aggressive Growth Blended Index7 | – | – | – | – | 1.14 | 7.74 | 9.18 | – | – |
MSCI ACWI ex USA Index (Net)8 | – | – | – | – | -1.41 | 2.22 | 3.83 | – | – |
Russell 3000® Index9 | – | – | – | – | 2.03 | 10.07 | 11.45 | – | – |
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, which include the impact of 0.27% in acquired fund fees and expenses. Net expenses from affiliated master portfolios are included in the acquired fund fees and expense amount. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report, which do not include acquired fund fees and expenses. |
2 | The manager has contractually committed through September 30, 2023 (September 30, 2024 for Class A and C), to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.74% for Class A, 1.49% for Class C, 0.67% for Administrator Class and 0.42% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), net expenses from affiliated master portfolios, 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 for the Class A shares prior to their inception reflects the performance of the Class C shares and includes the higher expenses applicable to the Class C shares. If these expenses had not been included, returns for the Class A shares would be higher. |
4 | Prior to February 13, 2017, historical performance shown for the Class C shares reflects the performance of the Fund’s predecessor WealthBuilder Portfolio share class and does not reflect the front-end sales load previously attributable to the predecessor class. The expenses for the Class C shares and the predecessor share class are similar. |
5 | Historical performance shown for the Administrator Class shares prior to their inception reflects the performance of the Institutional Class shares, adjusted to reflect the higher expenses applicable to the Administrator Class shares. |
6 | Historical performance shown for the Institutional Class shares prior to their inception reflects the performance of the Class A shares adjusted to reflect that the Institutional Class shares adjusted to reflect that the Institutional Class shares do not have a sales load but not adjusted to reflect the Institutional Class expenses. If these expenses had been included, returns for the Institutional Class shares would be higher. |
7 | Source: Allspring Funds Management, LLC. The Spectrum Aggressive Growth Blended Index is composed 70% of the Russell 3000® Index and 30% of the MSCI ACWI ex USA Index (Net). Effective November 2, 2020, the WealthBuilder Equity Blended Index was renamed the Spectrum Aggressive Growth Blended Index. You cannot invest directly in an index. |
8 | 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. |
9 | The Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
6 | Multi-Asset Funds
Performance highlights (unaudited)
Performance highlights (continued)
Allspring Spectrum Aggressive Growth Fund (continued)
Allspring Spectrum Aggressive Growth Fund (continued)
Growth of $10,000 investment as of May 31, 20231 |
1 | The chart compares the performance of Class A shares for the most recent ten years with the Spectrum Aggressive Growth Blended Index, MSCI ACWI ex USA Index (Net) and Russell 3000® 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. The Fund will indirectly be exposed to all of the risks of an investment in the underlying funds and will indirectly bear expenses of the underlying funds. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This fund is exposed to alternative investment risk, foreign investment risk and smaller-company investment risk. Consult the Fund’s prospectus for additional information on these and other risks.
Multi-Asset Funds | 7
Performance highlights (unaudited)
Performance highlights (continued)
Allspring Spectrum Aggressive Growth Fund (continued)
Allspring Spectrum Aggressive Growth Fund (continued)
MANAGER’S DISCUSSION
Fund highlights
•The Fund underperformed the Spectrum Aggressive Growth Blended Index for the 12-month period that ended May 31, 2023.
•Dynamic Risk Hedging (DRH) and poor relative performance by our U.S. growth equity strategies were the largest detractors from performance over the period.
•Strong relative performance from emerging market holdings generated the largest contributors to relative performance.
Slow growth, rising rates lead to muted market returns.
The trailing 12-month period featured slowing economic growth, rising interest rates, persistently high inflation, and geopolitical uncertainty. The broad equity market posted a small gain despite volatile markets.
The 12-month period that ended May 31, 2023, saw a small gain in broad U.S. equity markets, as illustrated by the Russell 3000® Index’s return of +2.03%. Large-cap U.S. stocks, as measured by the Russell 1000® Index*, fared better (+2.45%) than small-cap U.S. stocks, as represented by the Russell 2000® Index**, which declined 4.68%.
While these return numbers seem modest, they reflect a recovery from multiple double-digit declines that occurred over the period. Non-U.S. equities also declined. The MSCI ACWI ex USA Index (Net) posted a -1.41% return over the period. Developed markets, as represented by the MSCI EAFE Index (Net)***, advanced 3.06%, while emerging markets, as represented by the MSCI EM Index (Net)†, declined 8.49%. Core holdings remained stable.
The allocations among the portfolio’s core holdings remained stable over the period.
In contrast, the Fund’s Tactical Asset Allocation (TAA) overlay was active throughout the year. The overlay had a distinctly defensive posturing at the start of the period, which became less defensive as both stock and bond markets recovered in the second half of the period. The DRH process was very active throughout most of 2022, with activity subsiding as markets recovered after December. For the trailing 12 months, DRH detracted about 32 basis points (bps; 100 bps equal 1.00%) from performance.
Ten largest holdings (%) as of May 31, 20231 | |
Allspring Disciplined Large Cap Portfolio | 24.31 |
Allspring Factor Enhanced International Equity Portfolio | 19.36 |
iShares Core S&P 500 ETF | 13.16 |
Allspring Factor Enhanced U.S. Large Cap Equity Portfolio | 11.12 |
Allspring Discovery Large Cap Growth Fund Class R6 | 4.07 |
Allspring Premier Large Company Growth Fund Class R6 | 4.06 |
Allspring Special Large Cap Value Fund Class R6 | 3.96 |
Allspring Emerging Markets Equity Fund Class R6 | 2.96 |
Allspring Factor Enhanced U.S. Small Cap Equity Portfolio | 2.93 |
iShares Core S&P Small-Cap ETF | 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. |
DRH was the largest detractor from relative performance along with poor stock selection among U.S. growth equity strategies.
Last year saw a high level of market volatility, with lows reached in June, September into October, and again near year-end. These lows were followed by subsequent recoveries. Hedge levels tend to rise with increased volatility. In these types of seesaw markets, it can be difficult for DRH to consistently add to performance. While the September/October correction added to hedge performance, it was not large enough to compensate for hedge losses earlier in the period.
Poor stock selection, particularly within U.S. large-cap growth and U.S. small-cap growth, detracted from performance. The recovery from market lows since the end of 2022 was led by a narrow group of growth stocks. Failing to hold the winners in weights equal to the index resulted in underperformance.
Strong performance from emerging market holdings made the largest contribution to relative performance.
Although emerging markets posted negative absolute returns, both of our actively managed emerging strategies outperformed their market
*
The Russell 1000® Index measures the performance of the 1,000 largest companies in the Russell 3000® Index, which represents approximately 92% of the total market capitalization of the Russell 3000® Index. You cannot invest directly in an index.
**
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.
***
The Morgan Stanley Capital International (MSCI) Europe, Australasia, Far East (EAFE) Index (Net) is a free-float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. You cannot invest directly in an index.
†
The MSCI Emerging Markets (EM) Index (Net) 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.
8 | Multi-Asset Funds
Performance highlights (unaudited)
Performance highlights (continued)
Allspring Spectrum Aggressive Growth Fund (continued)
Allspring Spectrum Aggressive Growth Fund (continued)
benchmark on a relative basis. Stock selection and country allocation drove strong relative performance.
Allocation (%) as of May 31, 2023 | ||
Neutral allocation | Effective allocation1 | |
Large Cap Funds | 60 | 60 |
International Developed Funds | 23 | 23 |
Small Cap Funds | 10 | 10 |
Emerging Markets Funds | 7 | 7 |
1 | Effective allocation includes the effect of any tactical futures overlay that may be in place. Effective cash, if any, represents the net offset to such futures positions. The effective allocation does not reflect futures positions held in dynamic risk hedging strategies. Effective allocations are subject to change and may have changed since the date specified. |
Looking ahead, we are still somewhat guarded.
While U.S. lending standards are tightening and the impact of higher rates is just starting to be felt within the banking sector, the contagion from bank
failures in the U.S. has been limited so far. The Federal Reserve (Fed) is likely to be more data dependent from this point forward and the pattern of consistently hiking every quarter should end. However, with real yields on the rise and the U.S. dollar stabilizing, the combination of further Fed balance sheet shrinkage and tighter fiscal policy affected by the debt limit negotiations should put downward pressure on growth. The household sector balance sheet remains healthy and supported by a strong labor market. Negative real wages and fading government support are likely to lead to lower spending going forward.
Our base case is that we have an early-onset recession, with the first quarter of 2023 being the peak of economic activity. It is likely that the second quarter will show sequential weakness. Credit spreads remain wider, the yield curve remains inverted, and the housing recession continues. The market continues to expect meaningful rate cuts in the second half of this year. This is likely to put pressure on equity and bond valuations.
Multi-Asset Funds | 9
Performance highlights (unaudited)
Performance highlights
Allspring Spectrum Conservative Growth Fund
Allspring Spectrum Conservative Growth Fund
Investment objective | The Fund seeks a combination of current income and capital appreciation. |
Manager | Allspring Funds Management, LLC |
Subadviser | Allspring Global Investments, LLC |
Portfolio managers | Kandarp R. Acharya, CFA, FRM, Petro N. Bocray, CFA, Travis L. Keshemberg, CFA, CIPM, FRM |
Average annual total returns (%) as of May 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 | Net2 | |
Class A (WMBGX)3 | 2-10-2017 | -8.68 | 2.20 | 3.29 | -3.11 | 3.42 | 3.90 | 1.12 | 0.74 |
Class C (WMBFX)4 | 9-30-2004 | -4.83 | 2.66 | 3.57 | -3.83 | 2.66 | 3.57 | 1.87 | 1.49 |
Institutional Class (WMBZX)5 | 7-31-2018 | – | – | – | -2.87 | 3.74 | 4.06 | 0.80 | 0.42 |
Spectrum Conservative Growth Blended Index6 | – | – | – | – | -1.01 | 3.83 | 4.66 | – | – |
Bloomberg U.S. Aggregate Bond Index7 | – | – | – | – | -2.14 | 0.81 | 1.39 | – | – |
Bloomberg U.S. TIPS Index8 | – | – | – | – | -4.20 | 2.64 | 1.75 | – | – |
ICE BofA U.S. High Yield Constrained Index9 | – | – | – | – | -0.09 | 2.92 | 3.89 | – | – |
MSCI ACWI ex USA Index (Net)10 | – | – | – | – | -1.41 | 2.22 | 3.83 | – | – |
Russell 3000® Index11 | – | – | – | – | 2.03 | 10.07 | 11.45 | – | – |
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. 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, which include the impact of 0.35% in acquired fund fees and expenses. Net expenses from affiliated master portfolios are included in the acquired fund fees and expense amount. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report, which do not include acquired fund fees and expenses. |
2 | The manager has contractually committed through September 30, 2023 (September 30, 2024 for Class A and C), to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.74% for Class A, 1.49% for Class C and 0.42% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), net expenses from affiliated master portfolios, 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 for the Class A shares prior to their inception reflects the performance of the Class C shares and includes the higher expenses applicable to the Class C shares. If these expenses had not been included, returns for the Class A shares would be higher. |
4 | Prior to February 13, 2017, historical performance shown for the Class C shares reflects the performance of the Fund’s predecessor WealthBuilder Portfolio share class and does not reflect the front-end sales load previously attributable to the predecessor class. The expenses for the Class C shares and the predecessor share class are similar. |
5 | Historical performance shown for the Institutional Class shares prior to their inception reflects the performance of the Class A shares adjusted to reflect that the Institutional Class shares adjusted to reflect that the Institutional Class shares do not have a sales load but not adjusted to reflect the Institutional Class expenses. If these expenses had been included, returns for the Institutional Class shares would be higher. |
6 | Source: Allspring Funds Management, LLC. Spectrum Conservative Growth Blended Index is composed 41% of the Bloomberg U.S. Aggregate Bond Index, 20% of the Russell 3000® Index, 15% of the Bloomberg U.S. TIPS Index, 15% of ICE BofA U.S. High Yield Constrained Index, and 9% of the MSCI ACWI ex USA Index (Net). Effective November 2, 2020, the WealthBuilder Moderate Balanced Blended Index, which was composed 60% of the Bloomberg U.S. Aggregate Bond Index, 28% of the Russell 3000® Index, and 12% of the MSCI ACWI ex USA Index (Net), was renamed the Spectrum Conservative Growth Blended Index. You cannot invest directly in an index. |
7 | 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 | The Bloomberg U.S. Treasury Inflation-Protected Securities (TIPS) Index is an index of inflation-indexed-linked U.S. Treasury securities. You cannot invest directly in an index. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
10 | Multi-Asset Funds
Performance highlights (unaudited)
Performance highlights (continued)
Allspring Spectrum Conservative Growth Fund (continued)
Allspring Spectrum Conservative Growth Fund (continued)
Growth of $10,000 investment as of May 31, 20231 |
1 | The chart compares the performance of Class A shares for the most recent ten years with the Spectrum Conservative Growth Blended Index, Bloomberg U.S. Aggregate Bond Index, Bloomberg U.S. TIPS Index, ICE BofA U.S. High Yield Constrained Index, MSCI ACWI ex USA Index (Net) and Russell 3000® 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%. |
Footnotes continued from previous page | |
9 | The ICE BofA U.S. High Yield Constrained Index is a market-value-weighted index of all domestic and Yankee high-yield bonds, including deferred interest bonds and payment-in-kind securities. Issues included in the index have maturities of one year or more and have a credit rating lower than BBB–/Baa3, but are not in default. The ICE BofA U.S. High Yield Constrained Index limits any individual issuer to a maximum of 2% benchmark exposure. You cannot invest directly in an index. Copyright 2023. ICE Data Indices, LLC. All rights reserved. |
10 | 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. |
11 | The Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index. |
Balanced funds may invest in stocks and bonds. 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 Fund will indirectly be exposed to all of the risks of an investment in the underlying funds and will indirectly bear expenses of the underlying funds. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This fund is exposed to alternative investment risk, foreign investment risk, high-yield securities risk, mortgage- and asset-backed securities risk, and smaller-company investment risk. Consult the Fund’s prospectus for additional information on these and other risks.
Multi-Asset Funds | 11
Performance highlights (unaudited)
Performance highlights (continued)
Allspring Spectrum Conservative Growth Fund (continued)
Allspring Spectrum Conservative Growth Fund (continued)
MANAGER’S DISCUSSION
Fund highlights
•The Fund underperformed the Spectrum Conservative Growth Blended Index for the 12-month period that ended May 31, 2023.
•The Tactical Asset Allocation (TAA) overlay was the largest detractor from relative performance over the period. The allocation to commodity investments also detracted from performance.
•Strong relative performance from the fixed income managers was the largest contributor to relative performance.
Slow growth, rising rates lead to muted market returns.
The trailing 12-month period featured slowing economic growth, rising interest rates, persistently high inflation, and geopolitical uncertainty. The broad equity market posted a small gain despite volatile markets while bonds posted losses over the period.
The 12-month period that ended May 31, 2023, saw a small gain in broad U.S. equity markets, as illustrated by the Russell 3000® Index’s return of +2.03%. Broad foreign markets did worse, as reflected by the MSCI ACWI ex USA Index (Net)’s return of -1.41%. While these return numbers are modest, they reflect a recovery from some severe double-digit declines. The broad U.S. fixed income market, as represented by the Bloomberg U.S. Aggregate Bond Index, posted a return of -2.14%. Commodity prices moved significantly lower as the Bloomberg Commodity Index* declined 22.48%.
Ten largest holdings (%) as of May 31, 20231 | |
Allspring Bloomberg US Aggregate ex-Corporate Portfolio | 13.36 |
Allspring Core Bond Portfolio | 12.06 |
Allspring Income Plus Fund Institutional Class | 11.46 |
Allspring Real Return Portfolio | 7.85 |
Allspring Disciplined Large Cap Portfolio | 7.02 |
Allspring High Yield Bond Fund Institutional Class | 7.02 |
Allspring Factor Enhanced International Equity Portfolio | 5.60 |
Allspring Diversified Income Builder Fund Class R6 | 4.70 |
iShares Core U.S. Aggregate Bond ETF | 4.51 |
iShares Core S&P 500 ETF | 3.81 |
1 | Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
The portfolio reduced exposure to commodities.
Portfolio management made one change to the underlying portfolio.
The allocations among the portfolio’s core holdings remained stable over the period. However, in November 2022, we reduced exposure to commodities from 4.5% to 2.0%, after commodities had performed incredibly well.
In contrast, the Fund’s TAA overlay was active throughout the year. The overlay had a distinctly defensive posturing at the start of the period, which became less defensive as both stock and bond markets recovered in the second half of the period. The Dynamic Risk Hedging (DRH) process was very active throughout most of 2022, with activity subsiding as the market recovered after December. For the trailing 12 months, DRH detracted a small amount from performance.
The TAA overlay detracted from relative performance along with the allocation to commodities.
The TAA overlay was the largest detractor from relative performance over the period, reducing performance by about 40 basis points (bps; 100 bps equal 1.00%) over the entire period. Early on, the overlay was defensively postured. However, even some of the classic defensive trades detracted from performance. Since the beginning of 2023, we have been selectively adding risk. Our base case suggests a globally synchronized slowdown in economic activity with inflation more persistent than many local central banks may want it to be. We continue to prefer relative-value trades as opposed to directional trades amid much uncertainty.
Over the latest trailing 12 months, the Bloomberg Commodity Index declined 22.48%, making it one of the worst-performing assets over the period. This stands in stark contrast to the year-earlier period, when the same index was up more than 41%. As stated above, in November 2022, we made a considerable reduction in our exposure to commodities.
Strong performance from active fixed income managers was the largest contributor to relative performance.
Although the broad fixed income market posted losses, nearly all of our actively managed fixed income strategies outperformed their respective market benchmarks. Credit sector allocation and lower-than-market duration drove performance.
*
The Bloomberg Commodity Index (BCOM) provides broad-based exposure to commodities, and no single commodity or commodity sector dominates the index. Rather than being driven by micro-economic events affecting one commodity market or sector, the diversified commodity exposure of BCOM potentially reduces volatility in comparison with non-diversified commodity investments. You cannot invest directly in an index.
12 | Multi-Asset Funds
Performance highlights (unaudited)
Performance highlights (continued)
Allspring Spectrum Conservative Growth Fund (continued)
Allspring Spectrum Conservative Growth Fund (continued)
Allocation (%) as of May 31, 2023 | ||
Neutral allocation | Effective allocation1 | |
Bond Funds | 54 | 60 |
Stock Funds | 28 | 29 |
Inflation Sensitive Funds | 14 | 10 |
Alternative Funds | 4 | 3 |
Effective Cash | 0 | (2 ) |
1 | Effective allocation includes the effect of any tactical futures overlay that may be in place. Effective cash, if any, represents the net offset to such futures positions. The effective allocation does not reflect futures positions held in dynamic risk hedging strategies. Effective allocations are subject to change and may have changed since the date specified. |
Looking ahead, we are still somewhat guarded.
While U.S. lending standards are tightening and the impact of higher rates is just starting to be felt within the banking sector, the contagion from bank
failures in the U.S. has been limited, so far. The Federal Reserve (Fed) is likely to be more data dependent from this point forward and the pattern of consistently hiking every quarter should end. However, with real yields on the rise and the U.S. dollar stabilizing, the combination of further Fed balance sheet shrinkage and tighter fiscal policy affected by the debt limit negotiations should put downward pressure on growth. The household sector balance sheet remains healthy and supported by a strong labor market. Negative real wages and fading government support are likely to lead to lower spending going forward.
Our base case is that we have an early-onset recession, with the first quarter of 2023 being the peak of economic activity. It is likely that the second quarter will show sequential weakness. Credit spreads remain wider, the yield curve remains inverted, and the housing recession continues. The market continues to expect meaningful rate cuts in the second half of this year. This is likely to put pressure on equity and bond valuations.
Multi-Asset Funds | 13
Performance highlights (unaudited)
Performance highlights
Allspring Spectrum Growth Fund
Allspring Spectrum Growth Fund
Investment objective | The Fund seeks capital appreciation with a secondary emphasis on current income. |
Manager | Allspring Funds Management, LLC |
Subadviser | Allspring Global Investments, LLC |
Portfolio managers | Kandarp R. Acharya, CFA, FRM, Petros N. Bocray, CFA, Travis L. Keshemberg, CFA, CIPM, FRM |
Average annual total returns (%) as of May 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 | Net2 | |
Class A (WGAFX)3 | 2-10-2017 | -8.13 | 4.18 | 5.97 | -2.53 | 5.42 | 6.60 | 1.08 | 0.74 |
Class C (WGCFX)4 | 9-30-2004 | -4.22 | 4.66 | 6.27 | -3.22 | 4.66 | 6.27 | 1.83 | 1.49 |
Institutional Class (WGAYX)5 | 7-31-2018 | – | – | – | -2.17 | 5.72 | 6.75 | 0.76 | 0.42 |
Spectrum Growth Blended Index6 | – | – | – | – | -0.08 | 5.66 | 7.29 | – | – |
Bloomberg U.S. Aggregate Bond Index7 | – | – | – | – | -2.14 | 0.81 | 1.39 | – | – |
Bloomberg U.S. TIPS Index8 | – | – | – | – | -4.20 | 2.64 | 1.75 | – | – |
ICE BofA U.S. High Yield Constrained Index9 | – | – | – | – | -0.09 | 2.92 | 3.89 | – | – |
MSCI ACWI ex USA Index (Net)10 | – | – | – | – | -1.41 | 2.22 | 3.83 | – | – |
Russell 3000® Index11 | – | – | – | – | 2.03 | 10.07 | 11.45 | – | – |
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. 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, which include the impact of 0.29% in acquired fund fees and expenses. Net expenses from affiliated master portfolios are included in the acquired fund fees and expense amount. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report, which do not include acquired fund fees and expenses. |
2 | The manager has contractually committed through September 30, 2023 (September 30, 2024 for Class A and C), to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.74% for Class A, 1.49% for Class C and 0.42% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), net expenses from affiliated master portfolios, 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 for the Class A shares prior to their inception reflects the performance of the Class C shares and includes the higher expenses applicable to the Class C shares. If these expenses had not been included, returns for the Class A shares would be higher. |
4 | Prior to February 13, 2017, historical performance shown for the Class C shares reflects the performance of the Fund’s predecessor WealthBuilder Portfolio share class and does not reflect the front-end sales load previously attributable to the predecessor class. The expenses for the Class C shares and the predecessor share class are similar. |
5 | Historical performance shown for the Institutional Class shares prior to their inception reflects the performance of the Class A shares adjusted to reflect that the Institutional Class shares adjusted to reflect that the Institutional Class shares do not have a sales load but not adjusted to reflect the Institutional Class expenses. If these expenses had been included, returns for the Institutional Class shares would be higher. |
6 | Source: Allspring Funds Management, LLC. Spectrum Growth Blended Index is composed 40% of the Russell 3000® Index, 17% of the MSCI ACWI ex USA Index (Net), 15% of the Bloomberg U.S. Aggregate Bond Index, 14% of the Bloomberg U.S. TIPS Index, and 14% of ICE BofA U.S. High Yield Constrained Index. Effective November 2, 2020, the WealthBuilder Growth Allocation Blended Index, which was composed 56% of the Russell 3000® Index, 24% of the MSCI ACWI ex USA Index (Net), and 20% of the Bloomberg U.S. Aggregate Bond Index, was renamed the Spectrum Growth Blended Index. You cannot invest directly in an index. |
7 | 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 | The Bloomberg U.S. Treasury Inflation-Protected Securities (TIPS) Index is an index of inflation-indexed-linked U.S. Treasury securities. You cannot invest directly in an index. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
14 | Multi-Asset Funds
Performance highlights (unaudited)
Performance highlights (continued)
Allspring Spectrum Growth Fund (continued)
Allspring Spectrum Growth Fund (continued)
Growth of $10,000 investment as of May 31, 20231 |
1 | The chart compares the performance of Class A shares for the most recent ten years with the Spectrum Growth Blended Index, Bloomberg U.S. Aggregate Bond Index, Bloomberg U.S. TIPS Index, ICE BofA U.S. High Yield Constrained Index, MSCI ACWI ex USA Index (Net) and Russell 3000® 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%. |
Footnotes continued from previous page | |
9 | The ICE BofA U.S. High Yield Constrained Index is a market-value-weighted index of all domestic and Yankee high-yield bonds, including deferred interest bonds and payment-in-kind securities. Issues included in the index have maturities of one year or more and have a credit rating lower than BBB–/Baa3, but are not in default. The ICE BofA U.S. High Yield Constrained Index limits any individual issuer to a maximum of 2% benchmark exposure. You cannot invest directly in an index. Copyright 2023. ICE Data Indices, LLC. All rights reserved. |
10 | 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. |
11 | The Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index. |
Balanced funds may invest in stocks and bonds. 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 Fund will indirectly be exposed to all of the risks of an investment in the underlying funds and will indirectly bear expenses of the underlying funds. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This fund is exposed to alternative investment risk, foreign investment risk, high-yield securities risk, mortgage- and asset-backed securities risk, and smaller-company investment risk. Consult the Fund’s prospectus for additional information on these and other risks.
Multi-Asset Funds | 15
Performance highlights (unaudited)
Performance highlights (continued)
Allspring Spectrum Growth Fund (continued)
Allspring Spectrum Growth Fund (continued)
MANAGER’S DISCUSSION
Fund highlights
•The Fund underperformed the Spectrum Growth Blended Index for the 12-month period that ended May 31, 2023.
•The allocation to commodities and performance from the Tactical Asset Allocation (TAA) overlay were the largest detractors from relative performance over the period.
•Strong relative performance from both the emerging market equity and fixed income managers were the largest contributors to relative performance.
Slow growth, rising rates lead to muted market returns.
The trailing 12-month period featured slowing economic growth, rising interest rates, persistently high inflation, and geopolitical uncertainty. The broad equity market posted a small gain despite volatile markets, while bonds posted losses over the period.
The 12-month period that ended May 31, 2023, saw a small gain in broad U.S. equity markets, as illustrated by the Russell 3000® Index’s return of +2.03%. Broad foreign markets did worse, as reflected by the MSCI ACWI ex USA Index (Net)’s return of -1.41%. While these return numbers seem modest, they reflect a recovery from some severe double-digit declines. The broad U.S. fixed income market, as represented by the Bloomberg U.S. Aggregate Bond Index, posted a return of -2.14%. Commodity prices moved significantly lower and the Bloomberg Commodity Index* declined 22.48%.
Ten largest holdings (%) as of May 31, 20231 | |
Allspring Disciplined Large Cap Portfolio | 14.97 |
Allspring Factor Enhanced International Equity Portfolio | 11.63 |
Allspring Real Return Portfolio | 8.13 |
Allspring High Yield Bond Fund Institutional Class | 7.61 |
Allspring Factor Enhanced U.S. Large Cap Equity Portfolio | 6.86 |
Allspring Diversified Income Builder Fund Class R6 | 5.74 |
iShares Core S&P 500 ETF | 5.05 |
iShares Core U.S. Aggregate Bond ETF | 4.49 |
Allspring Core Bond Portfolio | 3.98 |
Allspring Bloomberg US Aggregate ex-Corporate Portfolio | 3.48 |
1 | Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
We reduced exposure to commodities.
The allocations among the portfolio’s core holdings remained stable over the period. However, in November 2022, we reduced exposure to commodities from 4.5% to 2.0%, after commodities had performed incredibly well.
In contrast, the Fund’s TAA overlay was active throughout the year. The overlay had a distinctly defensive posturing at the start of the period, which became less defensive as both stock and bond markets recovered in the second half of the period. The Dynamic Risk Hedging (DRH) process was very active throughout most of 2022, with activity subsiding as markets recovered after December. For the trailing 12 months, DRH detracted a small amount from performance.
The TAA overlay detracted from relative performance along with the allocation to commodities.
The TAA overlay was the largest detractor from relative performance, reducing performance by about 41 basis points (bps; 100 bps equals 1.00%) over the entire period. Early on, the overlay was defensively postured. However, even some of the classic defensive trades detracted from performance. Since the beginning of 2023, we have been selectively adding risk. Our base case suggests a globally synchronized slowdown in economic activity with inflation more persistent than many local central banks may want it to be. We continue to prefer relative-value trades as opposed to directional trades amid much uncertainty.
Over the latest trailing 12 months, the Bloomberg Commodity Index declined 22.48%, making it one of the worst-performing assets over the period. This stands in stark contrast to the year-earlier period, when the same index was up more than 41%. As stated above, in November 2022, we made a considerable reduction in our exposure to commodities.
Strong performance from emerging market equity and fixed income managers contributed to relative performance.
Although emerging markets posted negative absolute returns, both of our actively managed emerging strategies outperformed their market benchmark on a relative basis. Stock selection and country allocation drove relative performance. Likewise, although the broad fixed income market posted losses, nearly all of our actively managed fixed income strategies outperformed their respective market benchmark. Credit sector allocation and lower-than-market duration drove performance.
*
The Bloomberg Commodity Index (BCOM) provides broad-based exposure to commodities, and no single commodity or commodity sector dominates the index. Rather than being driven by micro-economic events affecting one commodity market or sector, the diversified commodity exposure of BCOM potentially reduces volatility in comparison with non-diversified commodity investments. You cannot invest directly in an index.
16 | Multi-Asset Funds
Performance highlights (unaudited)
Performance highlights (continued)
Allspring Spectrum Growth Fund (continued)
Allspring Spectrum Growth Fund (continued)
Allocation (%) as of May 31, 2023 | ||
Neutral allocation | Effective allocation1 | |
Stock Funds | 58 | 57 |
Bond Funds | 24 | 33 |
Inflation Sensitive Funds | 15 | 10 |
Alternative Funds | 3 | 2 |
Effective Cash | 0 | (2 ) |
1 | Effective allocation includes the effect of any tactical futures overlay that may be in place. Effective cash, if any, represents the net offset to such futures positions. The effective allocation does not reflect futures positions held in dynamic risk hedging strategies. Effective allocations are subject to change and may have changed since the date specified. |
Looking ahead, we are still somewhat guarded.
While U.S. lending standards are tightening and the impact of higher rates is just starting to be felt within the banking sector, the contagion from bank
failures in the U.S. has been limited so far. The Federal Reserve (Fed) is likely to be more data dependent from this point forward and the pattern of consistently hiking every quarter should end. However, with real yields on the rise and the U.S. dollar stabilizing, the combination of further Fed balance sheet shrinkage and tighter fiscal policy affected by the debt limit negotiations should put downward pressure on growth. The household sector balance sheet remains healthy and supported by a strong labor market. Negative real wages and fading government support are likely to lead to lower spending going forward.
Our base case is that we have an early-onset recession, with the first quarter of 2023 being the peak of economic activity. It is likely that the second quarter will show sequential weakness. Credit spreads remain wider, the yield curve remains inverted, and the housing recession continues. The market continues to expect meaningful rate cuts in the second half of this year. This is likely to put pressure on equity and bond valuations.
Multi-Asset Funds | 17
Performance highlights (unaudited)
Performance highlights
Allspring Spectrum Income Allocation Fund
Allspring Spectrum Income Allocation Fund
Investment objective | The Fund seeks current income with a secondary emphasis on capital appreciation. |
Manager | Allspring Funds Management, LLC |
Subadviser | Allspring Global Investments, LLC |
Portfolio managers | Kandarp R. Acharya, CFA, FRM, Petros N. Bocray, CFA, Travis L. Keshemberg, CFA, CIPM, FRM |
Average annual total returns (%) as of May 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 | Net2 | |
Class A (WCAFX)3 | 2-10-2017 | -8.88 | 0.64 | 1.47 | -3.32 | 1.84 | 2.07 | 1.10 | 0.74 |
Class C (WCCFX)4 | 9-30-2004 | -5.07 | 1.05 | 1.72 | -4.07 | 1.05 | 1.72 | 1.85 | 1.49 |
Institutional Class (WCYFX)5 | 7-31-2018 | – | – | – | -2.99 | 2.16 | 2.23 | 0.78 | 0.42 |
Spectrum Income Allocation Blended Index6 | – | – | – | – | -1.60 | 2.32 | 3.03 | – | – |
Bloomberg U.S. Aggregate Bond Index7 | – | – | – | – | -2.14 | 0.81 | 1.39 | – | – |
Bloomberg U.S. TIPS Index8 | – | – | – | – | -4.20 | 2.64 | 1.75 | – | – |
ICE BofA U.S. High Yield Constrained Index9 | – | – | – | – | -0.09 | 2.92 | 3.89 | – | – |
MSCI ACWI ex USA Index (Net)10 | – | – | – | – | -1.41 | 2.22 | 3.83 | – | – |
Russell 3000® Index11 | – | – | – | – | 2.03 | 10.07 | 11.45 | – | – |
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. 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, which include the impact of 0.30% in acquired fund fees and expenses. Net expenses from affiliated master portfolios are included in the acquired fund fees and expense amount. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report, which do not include acquired fund fees and expenses. |
2 | The manager has contractually committed through September 30, 2023 (September 30, 2024 for Class A and C), to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.74% for Class A, 1.49% for Class C and 0.42% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), net expenses from affiliated master portfolios, 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 for the Class A shares prior to their inception reflects the performance of the Class C shares and includes the higher expenses applicable to the Class C shares. If these expenses had not been included, returns for the Class A shares would be higher. |
4 | Prior to February 13, 2017, historical performance shown for the Class C shares reflects the performance of the Fund’s predecessor WealthBuilder Portfolio share class and does not reflect the front-end sales load previously attributable to the predecessor class. The expenses for the Class C shares and the predecessor share class are similar. |
5 | Historical performance shown for the Institutional Class shares prior to their inception reflects the performance of the Class A shares adjusted to reflect that the Institutional Class shares adjusted to reflect that the Institutional Class shares do not have a sales load but not adjusted to reflect the Institutional Class expenses. If these expenses had been included, returns for the Institutional Class shares would be higher. |
6 | Source: Allspring Funds Management, LLC. Spectrum Income Allocation Blended Index is composed 65% of the Bloomberg U.S. Aggregate Bond Index, 15% of ICE BofA U.S. High Yield Constrained Index, 10% of the Bloomberg U.S. TIPS Index, 7% of the Russell 3000® Index, and 3% of the MSCI ACWI ex USA Index (Net). Effective November 2, 2020, the WealthBuilder Growth Allocation Blended Index, which was composed 80% of the Bloomberg U.S. Aggregate Bond Index, 14% of the Russell 3000® Index, and 6% of the MSCI ACWI ex USA Index (Net), was renamed the Spectrum Income Allocation Blended Index. You cannot invest directly in an index. |
7 | 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 | The Bloomberg U.S. Treasury Inflation-Protected Securities (TIPS) Index is an index of inflation-indexed-linked U.S. Treasury securities. You cannot invest directly in an index. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
18 | Multi-Asset Funds
Performance highlights (unaudited)
Performance highlights (continued)
Allspring Spectrum Income Allocation Fund (continued)
Allspring Spectrum Income Allocation Fund (continued)
Growth of $10,000 investment as of May 31, 20231 |
1 | The chart compares the performance of the Fund for the most recent ten years with the Spectrum Income Allocation Blended Index, Bloomberg U.S. Aggregate Bond Index, Bloomberg U.S. TIPS Index, ICE BofA U.S. High Yield Constrained Index, MSCI ACWI ex USA Index (Net) and Russell 3000® Index. The chart assumes a hypothetical investment of $10,000 investment and reflects all operating expenses of the Fund. |
Footnotes continued from previous page | |
9 | The ICE BofA U.S. High Yield Constrained Index is a market-value-weighted index of all domestic and Yankee high-yield bonds, including deferred interest bonds and payment-in-kind securities. Issues included in the index have maturities of one year or more and have a credit rating lower than BBB–/Baa3, but are not in default. The ICE BofA U.S. High Yield Constrained Index limits any individual issuer to a maximum of 2% benchmark exposure. You cannot invest directly in an index. Copyright 2023. ICE Data Indices, LLC. All rights reserved. |
10 | 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. |
11 | The Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index. |
Balanced funds may invest in stocks and bonds. 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 Fund will indirectly be exposed to all of the risks of an investment in the underlying funds and will indirectly bear expenses of the underlying funds. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This fund is exposed to alternative investment risk, foreign investment risk, high-yield securities risk, mortgage- and asset-backed securities risk, and smaller-company investment risk. Consult the Fund’s prospectus for additional information on these and other risks.
Multi-Asset Funds | 19
Performance highlights (unaudited)
Performance highlights (continued)
Allspring Spectrum Income Allocation Fund (continued)
Allspring Spectrum Income Allocation Fund (continued)
MANAGER’S DISCUSSION
Fund highlights
•The Fund underperformed the Spectrum Income Allocation Blended Index for the 12-month period that ended May 31, 2023.
•The Tactical Asset Allocation (TAA) overlay was the largest detractor from relative performance over the period. The allocation to commodity investments also detracted from performance.
•Strong relative performance from fixed income was the largest contributor to relative performance.
Slow growth, rising rates lead to muted market returns.
The trailing 12-month period featured slowing economic growth, rising interest rates, persistently high inflation, and geopolitical uncertainty. The broad equity market posted a small gain despite volatile markets, while bonds posted losses over the period.
The 12-month period that ended May 31, 2023, saw a small gain in broad U.S. equity markets, as illustrated by the Russell 3000® Index’s return of +2.03%. Broad foreign markets did worse, as reflected by the MSCI ACWI ex USA Index (Net)’s return of -1.41%. While these return numbers seem modest, they reflect a recovery from some severe double-digit declines. The broad U.S. fixed income market, as represented by the Bloomberg U.S. Aggregate Bond Index, posted a return of -2.14%. Commodity prices moved significantly lower and the Bloomberg Commodity Index* declined 22.48%.
Ten largest holdings (%) as of May 31, 20231 | |
Allspring Bloomberg US Aggregate ex-Corporate Portfolio | 24.28 |
Allspring Core Bond Portfolio | 23.91 |
Allspring Income Plus Fund Institutional Class | 9.93 |
Allspring Real Return Portfolio | 7.13 |
Allspring High Yield Bond Fund Institutional Class | 6.38 |
iShares Core U.S. Aggregate Bond ETF | 4.49 |
Allspring Diversified Income Builder Fund Class R6 | 4.18 |
Allspring Alternative Risk Premia Fund Class R6 | 3.20 |
Allspring Global Investment Grade Credit Fund Class R6 | 3.01 |
Allspring Disciplined Large Cap Portfolio | 2.59 |
1 | Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
The portfolio reduced exposure to commodities.
Portfolio management made one change to the underlying portfolio.
The allocations among the portfolio’s core holdings remained stable over the period. However, in November 2022, we reduced exposure to commodities from 4.5% to 2.0% after commodities had performed incredibly well.
In contrast, the Fund’s TAA overlay was active throughout the year. The overlay had a distinctly defensive posturing at the start of the period, which became less defensive as both stock and bond markets recovered in the second half of the period. The Dynamic Risk Hedging (DRH) process was very active throughout most of 2022, with activity subsiding as the market recovered after December. For the trailing 12 months, DRH added a small amount to performance.
The TAA overlay detracted from relative performance along with the allocation to commodities.
The TAA overlay was the largest detractor from relative performance over the period, reducing performance by about 45 basis points (bps; 100 bps equal 1.00%) over the entire period. Early on, the overlay was defensively postured, but even some of the classic defensive trades detracted from performance. Since the beginning of 2023, we have selectively added risk. Our base case suggests a globally synchronized slowdown in economic activity with inflation more persistent than many local central banks may want it to be. We continue to prefer relative-value trades as opposed to directional trades amid much uncertainty.
Over the latest trailing 12 months, the Bloomberg Commodity Index declined 22.48%, making it one of the worst-performing assets over the period. This stands in stark contrast to the year-earlier period, when the same index was up more than 41%. As stated above, in November 2022, we made a considerable reduction in our exposure to commodities.
Strong relative performance from active fixed income was the largest contributor to relative performance.
Although the broad fixed income market posted losses, nearly all of our actively managed fixed income strategies outperformed their respective market benchmarks. Credit sector allocation and lower-than-market duration drove performance.
*
The Bloomberg Commodity Index (BCOM) provides broad-based exposure to commodities, and no single commodity or commodity sector dominates the index. Rather than being driven by micro-economic events affecting one commodity market or sector, the diversified commodity exposure of BCOM potentially reduces volatility in comparison with non-diversified commodity investments. You cannot invest directly in an index.
20 | Multi-Asset Funds
Performance highlights (unaudited)
Performance highlights (continued)
Allspring Spectrum Income Allocation Fund (continued)
Allspring Spectrum Income Allocation Fund (continued)
Allocation (%) as of May 31, 2023 | ||
Neutral allocation | Effective allocation1 | |
Bond Funds | 77 | 80 |
Inflation Sensitive Funds | 10 | 10 |
Stock Funds | 10 | 10 |
Alternative Funds | 3 | 3 |
Effective Cash | 0 | (3 ) |
1 | Effective allocation includes the effect of any tactical futures overlay that may be in place. Effective cash, if any, represents the net offset to such futures positions. The effective allocation does not reflect futures positions held in dynamic risk hedging strategies. Effective allocations are subject to change and may have changed since the date specified. |
Looking ahead, we are still somewhat guarded.
While U.S. lending standards are tightening and the impact of higher rates is just starting to be felt within the banking sector, the contagion from bank
failures in the U.S. has been limited so far. The Federal Reserve (Fed) is likely to be more data dependent from this point forward and the pattern of consistently hiking every quarter should end. However, with real yields on the rise and the U.S. dollar stabilizing, the combination of further Fed balance sheet shrinkage and tighter fiscal policy affected by the debt limit negotiations should put downward pressure on growth. The household sector balance sheet remains healthy and supported by a strong labor market. Negative real wages and fading government support are likely to lead to lower spending going forward.
Our base case is that we have an early-onset recession, with the first quarter of 2023 being the peak of economic activity. It is likely that the second quarter will show sequential weakness. Credit spreads remain wider, the yield curve remains inverted, and the housing recession continues. The market continues to expect meaningful rate cuts in the second half of this year. This is likely to put pressure on equity and bond valuations.
Multi-Asset Funds | 21
Performance highlights (unaudited)
Performance highlights
Allspring Spectrum Moderate Growth Fund
Allspring Spectrum Moderate Growth Fund
Investment objective | The Fund seeks a combination of capital appreciation and current income. |
Manager | Allspring Funds Management, LLC |
Subadviser | Allspring Global Investments, LLC |
Portfolio managers | Kandarp R. Acharya, CFA, FRM, Petro N. Bocray, CFA, Travis L. Keshemberg, CFA, CIPM, FRM |
Average annual total returns (%) as of May 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 | Net2 | |
Class A (WGBAX)3 | 2-10-2017 | -8.35 | 3.41 | 4.87 | -2.76 | 4.64 | 5.49 | 1.04 | 0.74 |
Class C (WGBFX)4 | 10-1-1997 | -4.46 | 3.88 | 5.16 | -3.46 | 3.88 | 5.16 | 1.79 | 1.49 |
Institutional Class (WGBIX)5 | 7-31-2018 | – | – | – | -2.40 | 4.96 | 5.65 | 0.72 | 0.42 |
Spectrum Moderate Growth Blended Index6 | – | – | – | – | -0.43 | 4.98 | 6.10 | – | – |
Bloomberg U.S. Aggregate Bond Index7 | – | – | – | – | -2.14 | 0.81 | 1.39 | – | – |
Bloomberg U.S. TIPS Index8 | – | – | – | – | -4.20 | 2.64 | 1.75 | – | – |
ICE BofA U.S. High Yield Constrained Index9 | – | – | – | – | -0.09 | 2.92 | 3.89 | – | – |
MSCI ACWI ex USA Index (Net)10 | – | – | – | – | -1.41 | 2.22 | 3.83 | – | – |
Russell 3000® Index11 | – | – | – | – | 2.03 | 10.07 | 11.45 | – | – |
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. 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, which include the impact of 0.31% in acquired fund fees and expenses. Net expenses from affiliated master portfolios are included in the acquired fund fees and expense amount. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report, which do not include acquired fund fees and expenses. |
2 | The manager has contractually committed through September 30, 2023 (September 30, 2024 for Class A and C), to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.74% for Class A, 1.49% for Class C and 0.42% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), net expenses from affiliated master portfolios, 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 for the Class A shares prior to their inception reflects the performance of the Class C shares and includes the higher expenses applicable to the Class C shares. If these expenses had not been included, returns for the Class A shares would be higher. |
4 | Prior to February 13, 2017, historical performance shown for the Class C shares reflects the performance of the Fund’s predecessor WealthBuilder Portfolio share class and does not reflect the front-end sales load previously attributable to the predecessor class. The expenses for the Class C shares and the predecessor share class are similar. |
5 | Historical performance shown for the Institutional Class shares prior to their inception reflects the performance of the Class A shares adjusted to reflect that the Institutional Class shares adjusted to reflect that the Institutional Class shares do not have a sales load but not adjusted to reflect the Institutional Class expenses. If these expenses had been included, returns for the Institutional Class shares would be higher. |
6 | Source: Allspring Funds Management, LLC. Spectrum Moderate Growth Blended Index is composed 32% of the Russell 3000® Index, 26% of the Bloomberg U.S. Aggregate Bond Index, 14% of the Bloomberg U.S. TIPS Index, 14% of ICE BofA U.S. High Yield Constrained Index, and 14% of the MSCI ACWI ex USA Index (Net). Effective November 2, 2020, the WealthBuilder Growth Balanced Blended Index, which was composed of 42% of the Russell 3000® Index, 40% of the Bloomberg U.S. Aggregate Bond Index, and 18% of the MSCI ACWI ex USA Index (Net), was renamed the Spectrum Moderate Growth Blended Index. You cannot invest directly in an index. |
7 | 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. |
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
22 | Multi-Asset Funds
Performance highlights (unaudited)
Performance highlights (continued)
Allspring Spectrum Moderate Growth Fund (continued)
Allspring Spectrum Moderate Growth Fund (continued)
Growth of $10,000 investment as of May 31, 20231 |
1 | The chart compares the performance of Class A shares for the most recent ten years with the Spectrum Moderate Growth Blended Index, Bloomberg U.S. Aggregate Bond Index, Bloomberg U.S. TIPS Index, ICE BofA U.S. High Yield Constrained Index, MSCI ACWI ex USA Index (Net) and Russell 3000® 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%. |
Footnotes continued from previous page | |
8 | The Bloomberg U.S. Treasury Inflation-Protected Securities (TIPS) Index is an index of inflation-indexed-linked U.S. Treasury securities. You cannot invest directly in an index. |
9 | The ICE BofA U.S. High Yield Constrained Index is a market-value-weighted index of all domestic and Yankee high-yield bonds, including deferred interest bonds and payment-in-kind securities. Issues included in the index have maturities of one year or more and have a credit rating lower than BBB–/Baa3, but are not in default. The ICE BofA U.S. High Yield Constrained Index limits any individual issuer to a maximum of 2% benchmark exposure. You cannot invest directly in an index. Copyright 2023. ICE Data Indices, LLC. All rights reserved. |
10 | 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. |
11 | The Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index. |
Balanced funds may invest in stocks and bonds. 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 Fund will indirectly be exposed to all of the risks of an investment in the underlying funds and will indirectly bear expenses of the underlying funds. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This fund is exposed to alternative investment risk, foreign investment risk, high-yield securities risk, mortgage- and asset-backed securities risk, and smaller-company investment risk. Consult the Fund’s prospectus for additional information on these and other risks.
Multi-Asset Funds | 23
Performance highlights (unaudited)
Performance highlights (continued)
Allspring Spectrum Moderate Growth Fund (continued)
Allspring Spectrum Moderate Growth Fund (continued)
MANAGER’S DISCUSSION
Fund highlights
•The Fund underperformed the Spectrum Moderate Growth Blended Index for the 12-month period that ended May 31, 2023.
•The Tactical Asset Allocation (TAA) overlay was the largest detractor from relative performance over the period; the allocation to commodity investments also detracted.
•Strong relative performance from both the emerging market equity and fixed income managers were the largest contributors to relative performance.
Slow growth, rising rates lead to muted market returns.
The trailing 12-month period featured slowing economic growth, rising interest rates, persistently high inflation, and geopolitical uncertainty. The broad equity market posted a small gain despite volatile markets, while bonds posted losses over the period.
The 12-month period that ended May 31, 2023, saw a small gain in broad U.S. equity markets, as illustrated by the Russell 3000® Index’s return of +2.03%. Broad foreign markets did worse, as reflected by the MSCI ACWI ex USA Index (Net)’s return of -1.41%. While these return numbers seem modest, they reflect a recovery from some severe double-digit declines. The broad U.S. fixed income market, as represented by the Bloomberg U.S. Aggregate Bond Index, posted a return of -2.14%. Commodity prices moved significantly lower and the Bloomberg Commodity Index* declined 22.48%.
Ten largest holdings (%) as of May 31, 20231 | |
Allspring Disciplined Large Cap Portfolio | 12.07 |
Allspring Factor Enhanced International Equity Portfolio | 9.66 |
Allspring Income Plus Fund Institutional Class | 7.88 |
Allspring Real Return Portfolio | 7.75 |
Allspring High Yield Bond Fund Institutional Class | 6.61 |
Allspring Core Bond Portfolio | 6.18 |
Allspring Factor Enhanced U.S. Large Cap Equity Portfolio | 6.03 |
Allspring Bloomberg US Aggregate ex-Corporate Portfolio | 5.98 |
Allspring Diversified Income Builder Fund Class R6 | 5.01 |
iShares Core U.S. Aggregate Bond ETF | 4.50 |
1 | Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
The portfolio reduced exposure to commodities.
The allocations among the portfolio’s core holdings remained stable over the period. However, in November 2022, we reduced exposure to commodities from 4.5% to 2.0%, after commodities had performed incredibly well.
In contrast, the Fund’s TAA overlay was active throughout the year. The overlay had a distinctly defensive posturing at the start of the period, which became less defensive as both stock and bond markets recovered in the second half of the period. The Dynamic Risk Hedging (DRH) process was very active throughout most of 2022, with activity subsiding as the market recovered after December. For the trailing 12 months, DRH detracted a small amount from performance.
The TAA overlay detracted along with the allocation to commodities.
The TAA overlay was the largest detractor from relative performance over the period, reducing performance by about 41 basis points (bps; 100 bps equal 1.00%) over the entire period. Early on, the overlay was defensively postured. However, even some of the classic defensive trades detracted from performance. Since the beginning of 2023, we have been selectively adding risk. Our base case suggests a globally synchronized slowdown in economic activity with inflation more persistent than many local central banks may want it to be. We continue to prefer relative-value trades as opposed to directional trades amid much uncertainty.
Over the latest trailing 12 months, the Bloomberg Commodity Index declined 22.48%, making it one of the worst-performing assets over the period. This stands in stark contrast to the year-earlier period, when the same index was up more than 41%. As stated above, in November 2022, we made a considerable reduction in our exposure to commodities.
Strong performance from emerging market equity and fixed income managers contributed to relative performance.
Although emerging markets posted losses over the period, both of our actively managed emerging strategies outperformed their market benchmark on a relative basis. Stock selection and country allocation drove strong relative performance. Likewise, although the broad fixed income market posted losses, nearly all of our actively managed fixed income strategies outperformed their respective market benchmarks. Credit sector allocation and lower-than-market duration drove performance.
*
The Bloomberg Commodity Index (BCOM) provides broad-based exposure to commodities, and no single commodity or commodity sector dominates the index. Rather than being driven by micro-economic events affecting one commodity market or sector, the diversified commodity exposure of BCOM potentially reduces volatility in comparison with non-diversified commodity investments. You cannot invest directly in an index.
24 | Multi-Asset Funds
Performance highlights (unaudited)
Performance highlights (continued)
Allspring Spectrum Moderate Growth Fund (continued)
Allspring Spectrum Moderate Growth Fund (continued)
Allocation (%) as of May 31, 2023 | ||
Neutral allocation | Effective allocation1 | |
Stock Funds | 45 | 46 |
Bond Funds | 37 | 43 |
Inflation Sensitive Funds | 14 | 10 |
Alternative Funds | 4 | 4 |
Effective Cash | 0 | (3 ) |
1 | Effective allocation includes the effect of any tactical futures overlay that may be in place. Effective cash, if any, represents the net offset to such futures positions. The effective allocation does not reflect futures positions held in dynamic risk hedging strategies. Effective allocations are subject to change and may have changed since the date specified. |
Looking ahead, we are still somewhat guarded.
While U.S. lending standards are tightening and the impact of higher rates is just starting to be felt within the banking sector, the contagion from bank
failures in the U.S. has been limited so far. The Federal Reserve (Fed) is likely to be more data dependent from this point forward and the pattern of consistently hiking every quarter should end. However, with real yields on the rise and the U.S. dollar stabilizing, the combination of further Fed balance sheet shrinkage and tighter fiscal policy affected by the debt limit negotiations should put downward pressure on growth. The household sector balance sheet remains healthy and supported by a strong labor market. Negative real wages and fading government support are likely to lead to lower spending going forward.
Our base case is that we have an early-onset recession, with the first quarter of 2023 being the peak of economic activity. It is likely that the second quarter will show sequential weakness. Credit spreads remain wider, the yield curve remains inverted, and the housing recession continues. The market continues to expect meaningful rate cuts in the second half of this year. This is likely to put pressure on equity and bond valuations.
Multi-Asset Funds | 25
Fund expenses (unaudited)
Fund expenses
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 December 1, 2022 to May 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 the 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 12-1-2022 | Ending account value 5-31-2023 | Expenses paid during the period1, 2 | Annualized net expense ratio2 | |
Spectrum Aggressive Growth Fund | ||||
Class A | ||||
Actual | $1,000.00 | $1,000.08 | $3.74 | 0.75 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.19 | $3.78 | 0.75 % |
Class C | ||||
Actual | $1,000.00 | $1,000.04 | $7.48 | 1.50 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,017.45 | $7.54 | 1.50 % |
Administrator Class | ||||
Actual | $1,000.00 | $1,000.09 | $3.34 | 0.67 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.59 | $3.38 | 0.67 % |
Institutional Class | ||||
Actual | $1,000.00 | $1,000.10 | $2.09 | 0.42 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,022.84 | $2.12 | 0.42 % |
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).
2 Amounts do not reflect net expenses allocated from the affiliated Master Portfolios in which the Fund invests.
26 | Multi-Asset Funds
Fund expenses (unaudited)
Beginning account value 12-1-2022 | Ending account value 5-31-2023 | Expenses paid during the period1, 2 | Annualized net expense ratio2 | |
Spectrum Conservative Growth Fund | ||||
Class A | ||||
Actual | $1,000.00 | $1,000.08 | $3.74 | 0.75 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.19 | $3.78 | 0.75 % |
Class C | ||||
Actual | $1,000.00 | $1,000.04 | $7.48 | 1.50 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,017.45 | $7.54 | 1.50 % |
Institutional Class | ||||
Actual | $1,000.00 | $1,000.10 | $2.09 | 0.42 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,022.84 | $2.12 | 0.42 % |
Spectrum Growth Fund | ||||
Class A | ||||
Actual | $1,000.00 | $1,000.07 | $3.74 | 0.75 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.19 | $3.78 | 0.75 % |
Class C | ||||
Actual | $1,000.00 | $1,000.03 | $7.48 | 1.50 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,017.45 | $7.54 | 1.50 % |
Institutional Class | ||||
Actual | $1,000.00 | $1,000.08 | $2.09 | 0.42 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,022.84 | $2.12 | 0.42 % |
Spectrum Income Allocation Fund | ||||
Class A | ||||
Actual | $1,000.00 | $1,000.07 | $3.74 | 0.75 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.19 | $3.78 | 0.75 % |
Class C | ||||
Actual | $1,000.00 | $1,000.04 | $7.48 | 1.50 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,017.45 | $7.54 | 1.50 % |
Institutional Class | ||||
Actual | $1,000.00 | $1,000.09 | $2.09 | 0.42 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,022.84 | $2.12 | 0.42 % |
Spectrum Moderate Growth Fund | ||||
Class A | ||||
Actual | $1,000.00 | $1,000.07 | $3.74 | 0.75 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.19 | $3.78 | 0.75 % |
Class C | ||||
Actual | $1,000.00 | $1,000.03 | $7.48 | 1.50 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,017.45 | $7.54 | 1.50 % |
Institutional Class | ||||
Actual | $1,000.00 | $1,000.09 | $2.09 | 0.42 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,022.84 | $2.12 | 0.42 % |
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).
2 Amounts do not reflect net expenses allocated from the affiliated Master Portfolios in which the Fund invests.
Multi-Asset Funds | 27
Portfolio of investments—May 31, 2023
Portfolio of investments
Spectrum Aggressive Growth Fund
Spectrum Aggressive Growth Fund
Shares | Value | |||||
Investment companies: 99.53% | ||||||
Affiliated master portfolios: 64.03% | ||||||
Allspring Disciplined Large Cap Portfolio | $109,635,379 | |||||
Allspring Emerging Growth Portfolio | 8,784,314 | |||||
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 11,076,857 | |||||
Allspring Factor Enhanced International Equity Portfolio | 87,322,245 | |||||
Allspring Factor Enhanced U.S. Large Cap Equity Portfolio | 50,154,595 | |||||
Allspring Factor Enhanced U.S. Small Cap Equity Portfolio | 13,230,860 | |||||
Allspring Small Company Value Portfolio | 8,609,999 | |||||
288,814,249 | ||||||
Exchange-traded funds: 20.45% | ||||||
iShares Core MSCI EAFE ETF | 165,710 | 10,941,832 | ||||
iShares Core MSCI Emerging Markets ETF | 186,283 | 8,863,345 | ||||
iShares Core S&P 500 ETF | 141,521 | 59,358,153 | ||||
iShares Core S&P Small-Cap ETF | 141,512 | 13,079,954 | ||||
92,243,284 | ||||||
Stock funds: 15.05% | ||||||
Allspring Discovery Large Cap Growth Fund Class R6♠† | 2,067,196 | 18,356,702 | ||||
Allspring Emerging Markets Equity Fund Class R6♠ | 559,143 | 13,346,748 | ||||
Allspring Premier Large Company Growth Fund Class R6♠† | 1,413,366 | 18,317,214 | ||||
Allspring Special Large Cap Value Fund Class R6♠ | 1,644,037 | 17,854,244 | ||||
67,874,908 | ||||||
Total investment companies (Cost $388,871,981) | 448,932,441 | |||||
Yield | ||||||
Short-term investments: 0.07% | ||||||
Investment companies: 0.07% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.01 % | 300,000 | 300,000 | |||
Total short-term investments (Cost $300,000) | 300,000 | |||||
Total investments in securities (Cost $389,171,981) | 99.60 % | 449,232,441 | ||||
Other assets and liabilities, net | 0.40 | 1,792,582 | ||||
Total net assets | 100.00 % | $451,025,023 | ||||
♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
† | Non-income-earning security |
∞ | The rate represents the 7-day annualized yield at period end. |
The accompanying notes are an integral part of these financial statements.
28 | Multi-Asset Funds
Portfolio of investments—May 31, 2023
Spectrum Aggressive Growth Fund
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) on affiliated Underlying Funds | Net change in unrealized gains (losses) on affiliated Underlying Funds | Value, end of period | |
Investment companies | ||||||
Allspring Discovery Large Cap Growth Fund Class R6† | $20,058,723 | $6,482,772 | $(7,955,366 ) | $(1,588,284 ) | $1,358,857 | $18,356,702 |
Allspring Emerging Markets Equity Fund Class R6 | 15,314,331 | 3,352,231 | (4,398,738 ) | (1,261,898 ) | 340,822 | 13,346,748 |
Allspring Premier Large Company Growth Fund Class R6† | 20,066,524 | 4,152,886 | (6,784,488 ) | (1,365,217 ) | 2,247,509 | 18,317,214 |
Allspring Special Large Cap Value Fund Class R6 | 19,984,560 | 3,537,995 | (4,321,173 ) | (538,644 ) | (808,494 ) | 17,854,244 |
Short-term investments | ||||||
Allspring Government Money Market Fund Select Class | 2,400,005 | 50,187,108 | (52,287,113 ) | 0 | 0 | 300,000 |
$(4,754,043 ) | $3,138,694 | $68,174,908 |
Shares, end of period | Dividends from affiliated Underlying Funds | Net realized gains on capital gain distributions from affiliated Underlying Funds | |
Investment companies | |||
Allspring Discovery Large Cap Growth Fund Class R6† | 2,067,196 | $0 | $1,780,764 |
Allspring Emerging Markets Equity Fund Class R6 | 559,143 | 175,964 | 0 |
Allspring Premier Large Company Growth Fund Class R6† | 1,413,366 | 0 | 0 |
Allspring Special Large Cap Value Fund Class R6 | 1,644,037 | 243,674 | 1,437,910 |
Short-term investments | |||
Allspring Government Money Market Fund Select Class | 300,000 | 56,512 | 0 |
$476,150 | $3,218,674 |
† | Non-income-earning security |
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 29
Portfolio of investments—May 31, 2023
Spectrum Aggressive Growth Fund
Transactions with the affiliated Master Portfolios were as follows:
% of ownership, beginning of period | % of ownership, end of period | Net realized gains (losses) on investments allocated from affiliated Master Portfolios | Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolios | Dividends allocated from affiliated Master Portfolios | Interest allocated from affiliated Master Portfolios | Affiliated Income Allocated from affiliated Master Portfolios | Value, end of period | |
Allspring Disciplined Large Cap Portfolio | 44.89 % | 50.69 % | $5,138,324 | $(4,787,420 ) | $1,894,997 | $7,972 | $60,916 | $109,635,379 |
Allspring Emerging Growth Portfolio | 2.67 | 2.71 | 801,005 | (833,731 ) | 20,682 | 628 | 7,908 | 8,784,314 |
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 9.37 | 10.67 | (484,675 ) | (755,581 ) | 424,637 | 800 | 13,190 | 11,076,857 |
Allspring Factor Enhanced International Equity Portfolio | 18.40 | 20.84 | (9,532,300 ) | 7,417,017 | 2,855,344 | 2,043 | 77,970 | 87,322,245 |
Allspring Factor Enhanced U.S. Large Cap Equity Portfolio | 9.31 | 10.67 | 8,085 | 148,583 | 819,703 | 3,594 | 52,489 | 50,154,595 |
Allspring Factor Enhanced U.S. Small Cap Equity Portfolio | 9.95 | 11.27 | (443,411 ) | (488,766 ) | 179,147 | 2,542 | 17,491 | 13,230,860 |
Allspring Small Company Value Portfolio | 1.68 | 1.70 | (83,438 ) | (1,006,809 ) | 163,866 | 618 | 8,031 | 8,609,999 |
$(4,596,410 ) | $(306,707 ) | $6,358,376 | $18,197 | $237,995 | $288,814,249 |
Futures contracts
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Long | ||||||
TOPIX | 76 | 6-8-2023 | $11,291,138 | $11,597,057 | $305,919 | $0 |
Japanese Yen Futures | 191 | 6-16-2023 | 17,915,724 | 17,190,000 | 0 | (725,724 ) |
Short | ||||||
E-Mini Russell 2000 Index | (1 ) | 6-16-2023 | (86,629 ) | (87,590 ) | 0 | (961 ) |
E-Mini S&P 500 Index | (2 ) | 6-16-2023 | (416,532 ) | (419,050 ) | 0 | (2,518 ) |
Euro STOXX 50 Index | (241 ) | 6-16-2023 | (11,143,744 ) | (10,863,201 ) | 280,543 | 0 |
MSCI EAFE Index | (1 ) | 6-16-2023 | (106,300 ) | (102,670 ) | 3,630 | 0 |
MSCI Emerging Markets Index | (1 ) | 6-16-2023 | (49,780 ) | (47,840 ) | 1,940 | 0 |
$592,032 | $(729,203 ) |
The accompanying notes are an integral part of these financial statements.
30 | Multi-Asset Funds
Portfolio of investments—May 31, 2023
Spectrum Conservative Growth Fund
Shares | Value | |||||
Investment companies: 99.36% | ||||||
Affiliated master portfolios: 52.00% | ||||||
Allspring Bloomberg US Aggregate ex-Corporate Portfolio | $34,384,645 | |||||
Allspring Core Bond Portfolio | 31,039,773 | |||||
Allspring Disciplined Large Cap Portfolio | 18,065,252 | |||||
Allspring Emerging Growth Portfolio | 1,497,313 | |||||
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 1,767,265 | |||||
Allspring Factor Enhanced International Equity Portfolio | 14,409,867 | |||||
Allspring Factor Enhanced U.S. Large Cap Equity Portfolio | 8,504,726 | |||||
Allspring Factor Enhanced U.S. Small Cap Equity Portfolio | 2,511,436 | |||||
Allspring Real Return Portfolio | 20,195,986 | |||||
Allspring Small Company Value Portfolio | 1,467,601 | |||||
133,843,864 | ||||||
Alternative investment funds: 5.55% | ||||||
Allspring Alternative Risk Premia Fund Class R6♠ | 1,160,639 | 9,540,449 | ||||
PIMCO CommodityRealReturn Strategy Fund Institutional Class | 383,033 | 4,749,615 | ||||
14,290,064 | ||||||
Bond funds: 21.49% | ||||||
Allspring Global Investment Grade Credit Fund Class R6♠ | 908,875 | 7,752,710 | ||||
Allspring High Yield Bond Fund Institutional Class♠ | 6,249,629 | 18,061,427 | ||||
Allspring Income Plus Fund Institutional Class♠ | 3,446,483 | 29,501,895 | ||||
55,316,032 | ||||||
Exchange-traded funds: 11.25% | ||||||
iShares Core MSCI EAFE ETF | 30,144 | 1,990,408 | ||||
iShares Core MSCI Emerging Markets ETF | 21,259 | 1,011,503 | ||||
iShares Core S&P 500 ETF | 23,379 | 9,805,854 | ||||
iShares Core S&P Small-Cap ETF | 21,422 | 1,980,036 | ||||
iShares Core U.S. Aggregate Bond ETF | 117,679 | 11,599,619 | ||||
iShares iBoxx High Yield Corporate Bond ETF | 34,699 | 2,571,543 | ||||
28,958,963 | ||||||
Multi-asset funds: 4.70% | ||||||
Allspring Diversified Income Builder Fund Class R6♠ | 2,304,525 | 12,098,756 | ||||
Stock funds: 4.37% | ||||||
Allspring Discovery Large Cap Growth Fund Class R6♠† | 349,948 | 3,107,539 | ||||
Allspring Emerging Markets Equity Fund Class R6♠ | 84,891 | 2,026,357 | ||||
Allspring Premier Large Company Growth Fund Class R6♠† | 238,991 | 3,097,321 | ||||
Allspring Special Large Cap Value Fund Class R6♠ | 279,169 | 3,031,770 | ||||
11,262,987 | ||||||
Total investment companies (Cost $265,049,010) | 255,770,666 | |||||
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 31
Portfolio of investments—May 31, 2023
Spectrum Conservative Growth Fund
Yield | Shares | Value | ||||
Short-term investments: 0.08% | ||||||
Investment companies: 0.08% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.01 % | 200,000 | $200,000 | |||
Total short-term investments (Cost $200,000) | 200,000 | |||||
Total investments in securities (Cost $265,249,010) | 99.44 % | 255,970,666 | ||||
Other assets and liabilities, net | 0.56 | 1,436,371 | ||||
Total net assets | 100.00 % | $257,407,037 | ||||
♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
† | Non-income-earning security |
∞ | The rate represents the 7-day annualized yield at period end. |
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) on affiliated Underlying Funds | Net change in unrealized gains (losses) on affiliated Underlying Funds | Value, end of period | |
Investment companies | ||||||
Allspring Alternative Risk Premia Fund Class R6 | $5,907,585 | $6,386,466 | $(1,904,633 ) | $(225,363 ) | $(623,606 ) | $9,540,449 |
Allspring Discovery Large Cap Growth Fund Class R6† | 3,720,335 | 856,200 | (1,425,880 ) | (246,193 ) | 203,077 | 3,107,539 |
Allspring Diversified Income Builder Fund Class R6 | 10,795,571 | 3,910,897 | (2,132,894 ) | (220,170 ) | (254,648 ) | 12,098,756 |
Allspring Emerging Markets Equity Fund Class R6 | 2,548,936 | 207,844 | (571,117 ) | (281,738 ) | 122,432 | 2,026,357 |
Allspring Global Investment Grade Credit Fund Class R6 | 9,264,236 | 317,264 | (1,386,918 ) | (310,660 ) | (131,212 ) | 7,752,710 |
Allspring High Yield Bond Fund Institutional Class | 13,050,676 | 9,249,336 | (3,643,462 ) | (574,664 ) | (20,459 ) | 18,061,427 |
Allspring Income Plus Fund Institutional Class | 35,290,646 | 2,418,641 | (6,661,830 ) | (719,236 ) | (826,326 ) | 29,501,895 |
Allspring Premier Large Company Growth Fund Class R6† | 3,721,531 | 476,782 | (1,257,373 ) | (235,556 ) | 391,937 | 3,097,321 |
Allspring Special Large Cap Value Fund Class R6 | 3,706,054 | 441,046 | (889,946 ) | (89,709 ) | (135,675 ) | 3,031,770 |
Short-term investments | ||||||
Allspring Government Money Market Fund Select Class | 1,280,702 | 22,891,907 | (23,972,609 ) | 0 | 0 | 200,000 |
$(2,903,289 ) | $(1,274,480 ) | $88,418,224 |
The accompanying notes are an integral part of these financial statements.
32 | Multi-Asset Funds
Portfolio of investments—May 31, 2023
Spectrum Conservative Growth Fund
Shares, end of period | Dividends from affiliated Underlying Funds | Net realized gains on capital gain distributions from affiliated Underlying Funds | |
Investment companies | |||
Allspring Alternative Risk Premia Fund Class R6 | 1,160,639 | $928,972 | $423,388 |
Allspring Discovery Large Cap Growth Fund Class R6† | 349,948 | 0 | 318,194 |
Allspring Diversified Income Builder Fund Class R6 | 2,304,525 | 587,797 | 0 |
Allspring Emerging Markets Equity Fund Class R6 | 84,891 | 27,921 | 0 |
Allspring Global Investment Grade Credit Fund Class R6 | 908,875 | 255,775 | 0 |
Allspring High Yield Bond Fund Institutional Class | 6,249,629 | 966,180 | 0 |
Allspring Income Plus Fund Institutional Class | 3,446,483 | 1,307,621 | 0 |
Allspring Premier Large Company Growth Fund Class R6† | 238,991 | 0 | 0 |
Allspring Special Large Cap Value Fund Class R6 | 279,169 | 42,904 | 251,724 |
Short-term investments | |||
Allspring Government Money Market Fund Select Class | 200,000 | 30,004 | 0 |
$4,147,174 | $993,306 |
† | Non-income-earning security |
Transactions with the affiliated Master Portfolios were as follows:
% of ownership, beginning of period | % of ownership, end of period | Net realized gains (losses) on investments allocated from affiliated Master Portfolios | Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolios | Interest allocated from affiliated Master Portfolios | Dividends allocated from affiliated Master Portfolios | Affiliated Income Allocated from affiliated Master Portfolios | Value, end of period | |
Allspring Bloomberg US Aggregate ex-Corporate Portfolio | 9.86 % | 13.57 % | $(1,459,591 ) | $(354,924 ) | $899,358 | $0 | $44,899 | $34,384,645 |
Allspring Core Bond Portfolio | 0.94 | 0.67 | (2,808,370 ) | 428,166 | 1,181,162 | 0 | 29,328 | 31,039,773 |
Allspring Disciplined Large Cap Portfolio | 11.17 | 8.35 | 1,395,374 | (2,362,405 ) | 636 | 374,414 | 12,071 | 18,065,252 |
Allspring Emerging Growth Portfolio | 0.49 | 0.46 | 377,494 | (369,642 ) | 51 | 3,697 | 1,503 | 1,497,313 |
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 1.64 | 1.70 | 112,948 | (324,048 ) | 62 | 72,224 | 2,267 | 1,767,265 |
Allspring Factor Enhanced International Equity Portfolio | 3.32 | 3.44 | (469,219 ) | 128,692 | 487 | 488,235 | 13,978 | 14,409,867 |
Allspring Factor Enhanced U.S. Large Cap Equity Portfolio | 1.72 | 1.81 | 386,144 | (348,868 ) | 291 | 146,751 | 9,697 | 8,504,726 |
Allspring Factor Enhanced U.S. Small Cap Equity Portfolio | 2.05 | 2.14 | 91,141 | (252,330 ) | 392 | 35,774 | 3,552 | 2,511,436 |
Allspring Real Return Portfolio | 7.88 | 9.54 | 135,998 | (1,204,682 ) | 850,304 | 68,466 | 7,006 | 20,195,986 |
Allspring Small Company Value Portfolio | 0.31 | 0.29 | (27,592 ) | (148,401 ) | 50 | 29,394 | 1,528 | 1,467,601 |
$(2,265,673 ) | $(4,808,442 ) | $2,932,793 | $1,218,955 | $125,829 | $133,843,864 |
Futures contracts
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Long | ||||||
10-Year Euro BUND Index | 49 | 6-8-2023 | $7,029,767 | $7,125,770 | $96,003 | $0 |
TOPIX | 43 | 6-8-2023 | 6,388,407 | 6,561,493 | 173,086 | 0 |
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 33
Portfolio of investments—May 31, 2023
Spectrum Conservative Growth Fund
Futures contracts (continued)
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Long (continued) | ||||||
E-Mini NASDAQ 100 Index | 36 | 6-16-2023 | $8,844,392 | $10,296,360 | $1,451,968 | $0 |
Japanese Yen Futures | 110 | 6-16-2023 | 10,312,881 | 9,900,000 | 0 | (412,881 ) |
10-Year U.S. Treasury Notes | 35 | 9-20-2023 | 3,996,901 | 4,006,406 | 9,505 | 0 |
Short | ||||||
2-Year Euro SCHATZ | (270 ) | 6-8-2023 | (30,385,817 ) | (30,482,256 ) | 0 | (96,439 ) |
E-Mini S&P 500 Index | (19 ) | 6-16-2023 | (3,768,912 ) | (3,980,975 ) | 0 | (212,063 ) |
Euro STOXX 50 Index | (138 ) | 6-16-2023 | (6,381,065 ) | (6,220,422 ) | 160,643 | 0 |
$1,891,205 | $(721,383 ) |
The accompanying notes are an integral part of these financial statements.
34 | Multi-Asset Funds
Portfolio of investments—May 31, 2023
Spectrum Growth Fund
Shares | Value | |||||
Investment companies: 99.32% | ||||||
Affiliated master portfolios: 54.71% | ||||||
Allspring Bloomberg US Aggregate ex-Corporate Portfolio | $7,272,270 | |||||
Allspring Core Bond Portfolio | 8,305,672 | |||||
Allspring Disciplined Large Cap Portfolio | 31,246,256 | |||||
Allspring Emerging Growth Portfolio | 2,413,169 | |||||
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 3,078,250 | |||||
Allspring Factor Enhanced International Equity Portfolio | 24,264,371 | |||||
Allspring Factor Enhanced U.S. Large Cap Equity Portfolio | 14,322,202 | |||||
Allspring Factor Enhanced U.S. Small Cap Equity Portfolio | 3,989,464 | |||||
Allspring Real Return Portfolio | 16,974,383 | |||||
Allspring Small Company Value Portfolio | 2,323,389 | |||||
114,189,426 | ||||||
Alternative investment funds: 4.31% | ||||||
Allspring Alternative Risk Premia Fund Class R6♠ | 638,769 | 5,250,684 | ||||
PIMCO CommodityRealReturn Strategy Fund Institutional Class | 302,704 | 3,753,531 | ||||
9,004,215 | ||||||
Bond funds: 11.71% | ||||||
Allspring Global Investment Grade Credit Fund Class R6♠ | 491,493 | 4,192,441 | ||||
Allspring High Yield Bond Fund Institutional Class♠ | 5,497,809 | 15,888,667 | ||||
Allspring Income Plus Fund Institutional Class♠ | 510,393 | 4,368,966 | ||||
24,450,074 | ||||||
Exchange-traded funds: 13.43% | ||||||
iShares Core MSCI EAFE ETF | 24,548 | 1,620,904 | ||||
iShares Core MSCI Emerging Markets ETF | 38,811 | 1,846,627 | ||||
iShares Core S&P 500 ETF | 25,151 | 10,549,084 | ||||
iShares Core S&P Small-Cap ETF | 27,529 | 2,544,506 | ||||
iShares Core U.S. Aggregate Bond ETF | 95,077 | 9,371,740 | ||||
iShares iBoxx High Yield Corporate Bond ETF | 28,183 | 2,088,642 | ||||
28,021,503 | ||||||
Multi-asset funds: 5.74% | ||||||
Allspring Diversified Income Builder Fund Class R6♠ | 2,280,414 | 11,972,172 | ||||
Stock funds: 9.42% | ||||||
Allspring Discovery Large Cap Growth Fund Class R6♠† | 597,942 | 5,309,722 | ||||
Allspring Emerging Markets Equity Fund Class R6♠ | 163,579 | 3,904,640 | ||||
Allspring Premier Large Company Growth Fund Class R6♠† | 408,447 | 5,293,465 | ||||
Allspring Special Large Cap Value Fund Class R6♠ | 474,397 | 5,151,954 | ||||
19,659,781 | ||||||
Total investment companies (Cost $200,841,115) | 207,297,171 | |||||
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 35
Portfolio of investments—May 31, 2023
Spectrum Growth Fund
Yield | Shares | Value | ||||
Short-term investments: 0.10% | ||||||
Investment companies: 0.10% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.01 % | 200,000 | $200,000 | |||
Total short-term investments (Cost $200,000) | 200,000 | |||||
Total investments in securities (Cost $201,041,115) | 99.42 % | 207,497,171 | ||||
Other assets and liabilities, net | 0.58 | 1,211,234 | ||||
Total net assets | 100.00 % | $208,708,405 | ||||
♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
† | Non-income-earning security |
∞ | The rate represents the 7-day annualized yield at period end. |
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) on affiliated Underlying Funds | Net change in unrealized gains (losses) on affiliated Underlying Funds | Value, end of period | |
Investment companies | ||||||
Allspring Alternative Risk Premia Fund Class R6 | $3,138,549 | $3,510,499 | $(951,846 ) | $21,504 | $(468,022 ) | $5,250,684 |
Allspring Discovery Large Cap Growth Fund Class R6† | 6,069,094 | 1,348,455 | (2,022,171 ) | (451,304 ) | 365,648 | 5,309,722 |
Allspring Diversified Income Builder Fund Class R6 | 9,642,438 | 4,260,860 | (1,521,372 ) | (206,063 ) | (203,691 ) | 11,972,172 |
Allspring Emerging Markets Equity Fund Class R6 | 4,728,342 | 420,293 | (948,877 ) | (458,347 ) | 163,229 | 3,904,640 |
Allspring Global Investment Grade Credit Fund Class R6 | 4,811,276 | 341,863 | (729,251 ) | (199,025 ) | (32,422 ) | 4,192,441 |
Allspring High Yield Bond Fund Institutional Class | 11,640,635 | 8,585,440 | (3,768,139 ) | (540,852 ) | (28,417 ) | 15,888,667 |
Allspring Income Plus Fund Institutional Class | 5,010,516 | 816,444 | (1,234,464 ) | (106,030 ) | (117,500 ) | 4,368,966 |
Allspring Premier Large Company Growth Fund Class R6† | 6,071,093 | 694,722 | (1,719,584 ) | (321,135 ) | 568,369 | 5,293,465 |
Allspring Special Large Cap Value Fund Class R6 | 6,051,349 | 696,795 | (1,208,875 ) | (127,743 ) | (259,572 ) | 5,151,954 |
Short-term investments | ||||||
Allspring Government Money Market Fund Select Class | 966,952 | 21,332,206 | (22,099,158 ) | 0 | 0 | 200,000 |
$(2,388,995 ) | $(12,378 ) | $61,532,711 |
The accompanying notes are an integral part of these financial statements.
36 | Multi-Asset Funds
Portfolio of investments—May 31, 2023
Spectrum Growth Fund
Shares, end of period | Dividends from affiliated Underlying Funds | Net realized gains on capital gain distributions from affiliated Underlying Funds | |
Investment companies | |||
Allspring Alternative Risk Premia Fund Class R6 | 638,769 | $490,064 | $223,351 |
Allspring Discovery Large Cap Growth Fund Class R6† | 597,942 | 0 | 529,139 |
Allspring Diversified Income Builder Fund Class R6 | 2,280,414 | 557,017 | 0 |
Allspring Emerging Markets Equity Fund Class R6 | 163,579 | 52,451 | 0 |
Allspring Global Investment Grade Credit Fund Class R6 | 491,493 | 134,613 | 0 |
Allspring High Yield Bond Fund Institutional Class | 5,497,809 | 840,562 | 0 |
Allspring Income Plus Fund Institutional Class | 510,393 | 188,628 | 0 |
Allspring Premier Large Company Growth Fund Class R6† | 408,447 | 0 | 0 |
Allspring Special Large Cap Value Fund Class R6 | 474,397 | 71,376 | 420,256 |
Short-term investments | |||
Allspring Government Money Market Fund Select Class | 200,000 | 22,373 | 0 |
$2,357,084 | $1,172,746 |
† | Non-income-earning security |
Transactions with the affiliated Master Portfolios were as follows:
% of ownership, beginning of period | % of ownership, end of period | Net realized gains (losses) on investments allocated from affiliated Master Portfolios | Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolios | Dividends allocated from affiliated Master Portfolios | Interest allocated from affiliated Master Portfolios | Affiliated Income Allocated from affiliated Master Portfolios | Value, end of period | |
Allspring Bloomberg US Aggregate ex-Corporate Portfolio | 1.60 % | 2.87 % | $(198,797 ) | $(41,955 ) | $0 | $176,351 | $8,181 | $7,272,270 |
Allspring Core Bond Portfolio | 0.19 | 0.18 | (576,172 ) | 132,223 | 0 | 289,194 | 6,847 | 8,305,672 |
Allspring Disciplined Large Cap Portfolio | 14.75 | 14.45 | 2,109,717 | (2,474,060 ) | 574,834 | 1,886 | 18,525 | 31,246,256 |
Allspring Emerging Growth Portfolio | 0.77 | 0.74 | 417,952 | (414,008 ) | 5,890 | 142 | 2,307 | 2,413,169 |
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 2.74 | 2.96 | 114,149 | (465,197 ) | 122,236 | 185 | 3,779 | 3,078,250 |
Allspring Factor Enhanced International Equity Portfolio | 5.38 | 5.79 | (868,039 ) | 372,674 | 807,837 | 1,432 | 22,427 | 24,264,371 |
Allspring Factor Enhanced U.S. Large Cap Equity Portfolio | 2.79 | 3.05 | 781,931 | (722,892 ) | 240,569 | 849 | 15,544 | 14,322,202 |
Allspring Factor Enhanced U.S. Small Cap Equity Portfolio | 3.21 | 3.40 | 98,120 | (370,242 ) | 56,738 | 730 | 5,536 | 3,989,464 |
Allspring Real Return Portfolio | 7.69 | 8.02 | 74,039 | (1,229,432 ) | 59,737 | 762,295 | 5,460 | 16,974,383 |
Allspring Small Company Value Portfolio | 0.49 | 0.46 | (48,760 ) | (235,736 ) | 46,566 | 138 | 2,349 | 2,323,389 |
$1,904,140 | $(5,448,625 ) | $1,914,407 | $1,233,202 | $90,955 | $114,189,426 |
Futures contracts
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Long | ||||||
10-Year Euro BUND Index | 39 | 6-8-2023 | $5,595,120 | $5,671,531 | $76,411 | $0 |
TOPIX | 35 | 6-8-2023 | 5,199,866 | 5,340,750 | 140,884 | 0 |
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 37
Portfolio of investments—May 31, 2023
Spectrum Growth Fund
Futures contracts (continued)
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Long (continued) | ||||||
E-Mini NASDAQ 100 Index | 29 | 6-16-2023 | $7,131,869 | $8,294,290 | $1,162,421 | $0 |
Japanese Yen Futures | 89 | 6-16-2023 | 8,346,261 | 8,010,000 | 0 | (336,261 ) |
10-Year U.S. Treasury Notes | 28 | 9-20-2023 | 3,197,521 | 3,205,125 | 7,604 | 0 |
Short | ||||||
2-Year Euro SCHATZ | (216 ) | 6-8-2023 | (24,308,653 ) | (24,385,804 ) | 0 | (77,151 ) |
E-Mini S&P 500 Index | (15 ) | 6-16-2023 | (3,032,126 ) | (3,142,875 ) | 0 | (110,749 ) |
Euro STOXX 50 Index | (112 ) | 6-16-2023 | (5,178,836 ) | (5,048,459 ) | 130,377 | 0 |
$1,517,697 | $(524,161 ) |
The accompanying notes are an integral part of these financial statements.
38 | Multi-Asset Funds
Portfolio of investments—May 31, 2023
Spectrum Income Allocation Fund
Shares | Value | |||||
Investment companies: 99.28% | ||||||
Affiliated master portfolios: 61.59% | ||||||
Allspring Bloomberg US Aggregate ex-Corporate Portfolio | $33,653,133 | |||||
Allspring Core Bond Portfolio | 33,140,221 | |||||
Allspring Disciplined Large Cap Portfolio | 3,586,418 | |||||
Allspring Emerging Growth Portfolio | 269,142 | |||||
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 271,183 | |||||
Allspring Factor Enhanced International Equity Portfolio | 2,529,088 | |||||
Allspring Factor Enhanced U.S. Large Cap Equity Portfolio | 1,378,016 | |||||
Allspring Factor Enhanced U.S. Small Cap Equity Portfolio | 408,173 | |||||
Allspring Real Return Portfolio | 9,882,719 | |||||
Allspring Small Company Value Portfolio | 268,979 | |||||
85,387,072 | ||||||
Alternative investment funds: 5.05% | ||||||
Allspring Alternative Risk Premia Fund Class R6♠ | 539,670 | 4,436,084 | ||||
PIMCO CommodityRealReturn Strategy Fund Institutional Class | 207,211 | 2,569,416 | ||||
7,005,500 | ||||||
Bond funds: 19.32% | ||||||
Allspring Global Investment Grade Credit Fund Class R6♠ | 488,436 | 4,166,365 | ||||
Allspring High Yield Bond Fund Institutional Class♠ | 3,057,735 | 8,836,854 | ||||
Allspring Income Plus Fund Institutional Class♠ | 1,608,798 | 13,771,308 | ||||
26,774,527 | ||||||
Exchange-traded funds: 7.66% | ||||||
iShares Core MSCI EAFE ETF | 6,053 | 399,680 | ||||
iShares Core MSCI Emerging Markets ETF | 8,563 | 407,427 | ||||
iShares Core S&P 500 ETF | 3,945 | 1,654,651 | ||||
iShares Core S&P Small-Cap ETF | 5,876 | 543,119 | ||||
iShares Core U.S. Aggregate Bond ETF | 63,173 | 6,226,963 | ||||
iShares iBoxx High Yield Corporate Bond ETF | 18,611 | 1,379,261 | ||||
10,611,101 | ||||||
Multi-asset funds: 4.18% | ||||||
Allspring Diversified Income Builder Fund Class R6♠ | 1,104,045 | 5,796,240 | ||||
Stock funds: 1.48% | ||||||
Allspring Discovery Large Cap Growth Fund Class R6♠† | 62,190 | 552,243 | ||||
Allspring Emerging Markets Equity Fund Class R6♠ | 17,091 | 407,955 | ||||
Allspring Premier Large Company Growth Fund Class R6♠† | 42,489 | 550,660 | ||||
Allspring Special Large Cap Value Fund Class R6♠ | 49,796 | 540,791 | ||||
2,051,649 | ||||||
Total investment companies (Cost $148,251,251) | 137,626,089 | |||||
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 39
Portfolio of investments—May 31, 2023
Spectrum Income Allocation Fund
Yield | Shares | Value | ||||
Short-term investments: 0.14% | ||||||
Investment companies: 0.14% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.01 % | 200,000 | $200,000 | |||
Total short-term investments (Cost $200,000) | 200,000 | |||||
Total investments in securities (Cost $148,451,251) | 99.42 % | 137,826,089 | ||||
Other assets and liabilities, net | 0.58 | 805,550 | ||||
Total net assets | 100.00 % | $138,631,639 | ||||
♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
† | Non-income-earning security |
∞ | The rate represents the 7-day annualized yield at period end. |
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) on affiliated Underlying Funds | Net change in unrealized gains (losses) on affiliated Underlying Funds | Value, end of period | |
Investment companies | ||||||
Allspring Alternative Risk Premia Fund Class R6 | $2,785,846 | $3,420,090 | $(1,350,705 ) | $(147,492 ) | $(271,655 ) | $4,436,084 |
Allspring Discovery Large Cap Growth Fund Class R6† | 698,564 | 153,868 | (290,953 ) | 12,115 | (21,351 ) | 552,243 |
Allspring Diversified Income Builder Fund Class R6 | 6,126,706 | 1,463,044 | (1,496,694 ) | (244,068 ) | (52,748 ) | 5,796,240 |
Allspring Emerging Markets Equity Fund Class R6 | 538,374 | 51,404 | (148,193 ) | (58,509 ) | 24,879 | 407,955 |
Allspring Global Investment Grade Credit Fund Class R6 | 5,201,022 | 180,517 | (963,303 ) | (222,367 ) | (29,504 ) | 4,166,365 |
Allspring High Yield Bond Fund Institutional Class | 8,791,749 | 3,358,218 | (2,858,320 ) | (440,603 ) | (14,190 ) | 8,836,854 |
Allspring Income Plus Fund Institutional Class | 17,365,555 | 1,370,849 | (4,197,209 ) | (415,695 ) | (352,192 ) | 13,771,308 |
Allspring Premier Large Company Growth Fund Class R6† | 698,985 | 90,230 | (265,839 ) | (49,397 ) | 76,681 | 550,660 |
Allspring Special Large Cap Value Fund Class R6 | 349,550 | 391,853 | (196,385 ) | (20,398 ) | 16,171 | 540,791 |
Short-term investments | ||||||
Allspring Government Money Market Fund Select Class | 1,100,002 | 12,044,820 | (12,944,822 ) | 0 | 0 | 200,000 |
$(1,586,414 ) | $(623,909 ) | $39,258,500 |
The accompanying notes are an integral part of these financial statements.
40 | Multi-Asset Funds
Portfolio of investments—May 31, 2023
Spectrum Income Allocation Fund
Shares, end of period | Dividends from affiliated Underlying Funds | Net realized gains on capital gain distributions from affiliated Underlying Funds | |
Investment companies | |||
Allspring Alternative Risk Premia Fund Class R6 | 539,670 | $453,412 | $206,644 |
Allspring Discovery Large Cap Growth Fund Class R6† | 62,190 | 0 | 57,682 |
Allspring Diversified Income Builder Fund Class R6 | 1,104,045 | 297,223 | 0 |
Allspring Emerging Markets Equity Fund Class R6 | 17,091 | 5,756 | 0 |
Allspring Global Investment Grade Credit Fund Class R6 | 488,436 | 140,968 | 0 |
Allspring High Yield Bond Fund Institutional Class | 3,057,735 | 529,233 | 0 |
Allspring Income Plus Fund Institutional Class | 1,608,798 | 628,348 | 0 |
Allspring Premier Large Company Growth Fund Class R6† | 42,489 | 0 | 0 |
Allspring Special Large Cap Value Fund Class R6 | 49,796 | 7,841 | 46,000 |
Short-term investments | |||
Allspring Government Money Market Fund Select Class | 200,000 | 28,137 | 0 |
$2,090,918 | $310,326 |
† | Non-income-earning security |
Transactions with the affiliated Master Portfolios were as follows:
% of ownership, beginning of period | % of ownership, end of period | Net realized gains (losses) on investments allocated from affiliated Master Portfolios | Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolios | Interest allocated from affiliated Master Portfolios | Dividends allocated from affiliated Master Portfolios | Affiliated Income Allocated from affiliated Master Portfolios | Value, end of period | |
Allspring Bloomberg US Aggregate ex- Corporate Portfolio | 10.18 % | 13.28 % | $(1,399,864 ) | $(580,212 ) | $903,980 | $0 | $46,333 | $33,653,133 |
Allspring Core Bond Portfolio | 1.06 | 0.71 | (3,053,598 ) | 197,920 | 1,300,252 | 0 | 33,151 | 33,140,221 |
Allspring Disciplined Large Cap Portfolio | 2.80 | 1.66 | 336,286 | (696,437 ) | 50 | 82,882 | 2,645 | 3,586,418 |
Allspring Emerging Growth Portfolio | 0.09 | 0.08 | 135,959 | (133,258 ) | 3 | 669 | 285 | 269,142 |
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 0.26 | 0.26 | 30,465 | (65,525 ) | 3 | 11,392 | 360 | 271,183 |
Allspring Factor Enhanced International Equity Portfolio | 0.61 | 0.60 | (84,151 ) | 8,216 | 32 | 87,312 | 2,559 | 2,529,088 |
Allspring Factor Enhanced U.S. Large Cap Equity Portfolio | 0.29 | 0.29 | 109,351 | (104,829 ) | 17 | 24,391 | 1,638 | 1,378,016 |
Allspring Factor Enhanced U.S. Small Cap Equity Portfolio | 0.35 | 0.35 | 35,722 | (60,727 ) | 54 | 5,911 | 591 | 408,173 |
Allspring Real Return Portfolio | 1.86 | 4.67 | 175,083 | (217,529 ) | 316,242 | 28,386 | 3,491 | 9,882,719 |
Allspring Small Company Value Portfolio | 0.06 | 0.05 | 2,709 | (31,764 ) | 3 | 5,400 | 288 | 268,979 |
$(3,712,038 ) | $(1,684,145 ) | $2,520,636 | $246,343 | $91,341 | $85,387,072 |
Futures contracts
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Long | ||||||
10-Year Euro BUND Index | 26 | 6-8-2023 | $3,730,081 | $3,781,021 | $50,940 | $0 |
TOPIX | 23 | 6-8-2023 | 3,417,055 | 3,509,636 | 92,581 | 0 |
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 41
Portfolio of investments—May 31, 2023
Spectrum Income Allocation Fund
Futures contracts (continued)
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Long (continued) | ||||||
E-Mini NASDAQ 100 Index | 19 | 6-16-2023 | $4,664,986 | $5,434,190 | $769,204 | $0 |
Japanese Yen Futures | 59 | 6-16-2023 | 5,529,294 | 5,310,000 | 0 | (219,294 ) |
10-Year U.S. Treasury Notes | 19 | 9-20-2023 | 2,169,746 | 2,174,906 | 5,160 | 0 |
Short | ||||||
2-Year Euro SCHATZ | (146 ) | 6-8-2023 | (16,430,849 ) | (16,482,997 ) | 0 | (52,148 ) |
E-Mini S&P 500 Index | (10 ) | 6-16-2023 | (1,975,801 ) | (2,095,250 ) | 0 | (119,449 ) |
Euro STOXX 50 Index | (74 ) | 6-16-2023 | (3,421,731 ) | (3,335,589 ) | 86,142 | 0 |
$1,004,027 | $(390,891 ) |
The accompanying notes are an integral part of these financial statements.
42 | Multi-Asset Funds
Portfolio of investments—May 31, 2023
Spectrum Moderate Growth Fund
Shares | Value | |||||
Investment companies: 99.35% | ||||||
Affiliated master portfolios: 52.23% | ||||||
Allspring Bloomberg US Aggregate ex-Corporate Portfolio | $22,616,698 | |||||
Allspring Core Bond Portfolio | 23,355,142 | |||||
Allspring Disciplined Large Cap Portfolio | 45,645,325 | |||||
Allspring Emerging Growth Portfolio | 3,680,643 | |||||
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 4,461,529 | |||||
Allspring Factor Enhanced International Equity Portfolio | 36,517,506 | |||||
Allspring Factor Enhanced U.S. Large Cap Equity Portfolio | 22,787,561 | |||||
Allspring Factor Enhanced U.S. Small Cap Equity Portfolio | 5,541,294 | |||||
Allspring Real Return Portfolio | 29,292,117 | |||||
Allspring Small Company Value Portfolio | 3,596,987 | |||||
197,494,802 | ||||||
Alternative investment funds: 5.86% | ||||||
Allspring Alternative Risk Premia Fund Class R6♠ | 1,849,597 | 15,203,693 | ||||
PIMCO CommodityRealReturn Strategy Fund Institutional Class | 562,101 | 6,970,049 | ||||
22,173,742 | ||||||
Bond funds: 17.51% | ||||||
Allspring Global Investment Grade Credit Fund Class R6♠ | 1,336,150 | 11,397,364 | ||||
Allspring High Yield Bond Fund Institutional Class♠ | 8,653,833 | 25,009,576 | ||||
Allspring Income Plus Fund Institutional Class♠ | 3,481,373 | 29,800,554 | ||||
66,207,494 | ||||||
Exchange-traded funds: 11.26% | ||||||
iShares Core MSCI EAFE ETF | 16,621 | 1,097,485 | ||||
iShares Core MSCI Emerging Markets ETF | 54,689 | 2,602,102 | ||||
iShares Core S&P 500 ETF | 32,643 | 13,691,453 | ||||
iShares Core S&P Small-Cap ETF | 47,294 | 4,371,384 | ||||
iShares Core U.S. Aggregate Bond ETF | 172,710 | 17,024,025 | ||||
iShares iBoxx High Yield Corporate Bond ETF | 50,998 | 3,779,462 | ||||
42,565,911 | ||||||
Multi-asset funds: 5.01% | ||||||
Allspring Diversified Income Builder Fund Class R6♠ | 3,609,225 | 18,948,431 | ||||
Stock funds: 7.48% | ||||||
Allspring Discovery Large Cap Growth Fund Class R6♠† | 859,798 | 7,635,012 | ||||
Allspring Emerging Markets Equity Fund Class R6♠ | 234,252 | 5,591,586 | ||||
Allspring Premier Large Company Growth Fund Class R6♠† | 587,880 | 7,618,922 | ||||
Allspring Special Large Cap Value Fund Class R6♠ | 684,727 | 7,436,131 | ||||
28,281,651 | ||||||
Total investment companies (Cost $377,208,834) | 375,672,031 | |||||
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 43
Portfolio of investments—May 31, 2023
Spectrum Moderate Growth Fund
Yield | Shares | Value | ||||
Short-term investments: 0.07% | ||||||
Investment companies: 0.07% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.01 % | 250,000 | $250,000 | |||
Total short-term investments (Cost $250,000) | 250,000 | |||||
Total investments in securities (Cost $377,458,834) | 99.42 % | 375,922,031 | ||||
Other assets and liabilities, net | 0.58 | 2,197,389 | ||||
Total net assets | 100.00 % | $378,119,420 | ||||
♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
† | Non-income-earning security |
∞ | The rate represents the 7-day annualized yield at period end. |
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) on affiliated Underlying Funds | Net change in unrealized gains (losses) on affiliated Underlying Funds | Value, end of period | |
Investment companies | ||||||
Allspring Alternative Risk Premia Fund Class R6 | $9,053,738 | $10,585,559 | $(3,088,562 ) | $(356,652 ) | $(990,390 ) | $15,203,693 |
Allspring Discovery Large Cap Growth Fund Class R6† | 9,057,449 | 1,814,290 | (3,098,519 ) | (756,145 ) | 617,937 | 7,635,012 |
Allspring Diversified Income Builder Fund Class R6 | 15,800,480 | 6,992,250 | (3,183,249 ) | (434,087 ) | (226,963 ) | 18,948,431 |
Allspring Emerging Markets Equity Fund Class R6 | 6,975,576 | 492,863 | (1,433,190 ) | (728,736 ) | 285,073 | 5,591,586 |
Allspring Global Investment Grade Credit Fund Class R6 | 13,518,921 | 658,310 | (2,133,374 ) | (531,802 ) | (114,691 ) | 11,397,364 |
Allspring High Yield Bond Fund Institutional Class | 19,995,524 | 11,803,779 | (5,796,560 ) | (918,781 ) | (74,386 ) | 25,009,576 |
Allspring Income Plus Fund Institutional Class | 35,340,494 | 3,558,006 | (7,539,301 ) | (769,972 ) | (788,673 ) | 29,800,554 |
Allspring Premier Large Company Growth Fund Class R6† | 9,060,356 | 885,467 | (2,685,963 ) | (490,792 ) | 849,854 | 7,618,922 |
Allspring Special Large Cap Value Fund Class R6 | 9,056,281 | 1,033,704 | (2,095,543 ) | (214,798 ) | (343,513 ) | 7,436,131 |
Short-term investments | ||||||
Allspring Government Money Market Fund Select Class | 2,652,135 | 37,958,612 | (40,360,747 ) | 0 | 0 | 250,000 |
$(5,201,765 ) | $(785,752 ) | $128,891,269 |
The accompanying notes are an integral part of these financial statements.
44 | Multi-Asset Funds
Portfolio of investments—May 31, 2023
Spectrum Moderate Growth Fund
Shares, end of period | Dividends from affiliated Underlying Funds | Net realized gains on capital gain distributions from affiliated Underlying Funds | |
Investment companies | |||
Allspring Alternative Risk Premia Fund Class R6 | 1,849,597 | $1,461,670 | $666,169 |
Allspring Discovery Large Cap Growth Fund Class R6† | 859,798 | 0 | 783,803 |
Allspring Diversified Income Builder Fund Class R6 | 3,609,225 | 899,740 | 0 |
Allspring Emerging Markets Equity Fund Class R6 | 234,252 | 75,831 | 0 |
Allspring Global Investment Grade Credit Fund Class R6 | 1,336,150 | 372,536 | 0 |
Allspring High Yield Bond Fund Institutional Class | 8,653,833 | 1,369,900 | 0 |
Allspring Income Plus Fund Institutional Class | 3,481,373 | 1,309,778 | 0 |
Allspring Premier Large Company Growth Fund Class R6† | 587,880 | 0 | 0 |
Allspring Special Large Cap Value Fund Class R6 | 684,727 | 105,051 | 620,306 |
Short-term investments | |||
Allspring Government Money Market Fund Select Class | 250,000 | 64,672 | 0 |
$5,659,178 | $2,070,278 |
† | Non-income-earning security |
Transactions with the affiliated Master Portfolios were as follows:
% of ownership, beginning of period | % of ownership, end of period | Net realized gains (losses) on investments allocated from affiliated Master Portfolios | Net change in unrealized gains (losses) on investments allocated from affiliated Master Portfolios | Dividends allocated from affiliated Master Portfolios | Interest allocated from affiliated Master Portfolios | Affiliated Income Allocated from affiliated Master Portfolios | Value, end of period | |
Allspring Bloomberg US Aggregate ex-Corporate Portfolio | 6.43 % | 8.92 % | $(903,256 ) | $(268,461 ) | $0 | $587,345 | $28,850 | $22,616,698 |
Allspring Core Bond Portfolio | 0.56 | 0.50 | (1,671,925 ) | 393,965 | 0 | 826,540 | 19,748 | 23,355,142 |
Allspring Disciplined Large Cap Portfolio | 22.77 | 21.10 | 3,405,503 | (4,121,825 ) | 866,909 | 2,484 | 28,065 | 45,645,325 |
Allspring Emerging Growth Portfolio | 1.20 | 1.14 | 699,737 | (688,788 ) | 9,071 | 195 | 3,597 | 3,680,643 |
Allspring Factor Enhanced Emerging Markets Equity Portfolio | 4.09 | 4.30 | 156,635 | (688,417 ) | 180,414 | 241 | 5,566 | 4,461,529 |
Allspring Factor Enhanced International Equity Portfolio | 8.37 | 8.72 | (1,469,477 ) | 640,397 | 1,234,461 | 1,939 | 34,542 | 36,517,506 |
Allspring Factor Enhanced U.S. Large Cap Equity Portfolio | 4.58 | 4.85 | 900,367 | (808,069 ) | 391,331 | 1,217 | 25,410 | 22,787,561 |
Allspring Factor Enhanced U.S. Small Cap Equity Portfolio | 4.49 | 4.72 | 218,026 | (586,031 ) | 78,813 | 971 | 7,698 | 5,541,294 |
Allspring Real Return Portfolio | 14.43 | 13.83 | 183,792 | (2,405,067 ) | 106,952 | 1,379,268 | 9,813 | 29,292,117 |
Allspring Small Company Value Portfolio | 0.76 | 0.71 | (55,274 ) | (380,056 ) | 71,887 | 192 | 3,658 | 3,596,987 |
$1,464,128 | $(8,912,352 ) | $2,939,838 | $2,800,392 | $166,947 | $197,494,802 |
Futures contracts
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Long | ||||||
10-Year Euro BUND Index | 71 | 6-8-2023 | $10,185,988 | $10,325,095 | $139,107 | $0 |
TOPIX | 64 | 6-8-2023 | 9,508,327 | 9,765,943 | 257,616 | 0 |
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 45
Portfolio of investments—May 31, 2023
Spectrum Moderate Growth Fund
Futures contracts (continued)
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Long (continued) | ||||||
E-Mini NASDAQ 100 Index | 52 | 6-16-2023 | $12,768,014 | $14,872,520 | $2,104,506 | $0 |
Japanese Yen Futures | 162 | 6-16-2023 | 15,191,968 | 14,580,000 | 0 | (611,968 ) |
10-Year U.S. Treasury Notes | 51 | 9-20-2023 | 5,824,056 | 5,837,906 | 13,850 | 0 |
Short | ||||||
2-Year Euro SCHATZ | (395 ) | 6-8-2023 | (44,453,325 ) | (44,594,411 ) | 0 | (141,086 ) |
E-Mini S&P 500 Index | (29 ) | 6-16-2023 | (5,759,046 ) | (6,076,225 ) | 0 | (317,179 ) |
Euro STOXX 50 Index | (203 ) | 6-16-2023 | (9,386,639 ) | (9,150,331 ) | 236,308 | 0 |
$2,751,387 | $(1,070,233 ) |
The accompanying notes are an integral part of these financial statements.
46 | Multi-Asset Funds
Statements of assets and liabilities—May 31, 2023
Financial statements
Statements of assets and liabilities
Spectrum Aggressive Growth Fund | Spectrum Conservative Growth Fund | |
Assets | ||
Investments in affiliated Master Portfolios, at value (see cost below) | $288,814,249 | $133,843,864 |
Investments in unaffiliated Underlying Funds, at value (see cost below) | 92,243,284 | 33,708,578 |
Investments in affiliated Underlying Funds, at value (see cost below) | 68,174,908 | 88,418,224 |
Cash at broker segregated for futures contracts | 2,241,847 | 1,901,808 |
Receivable for daily variation margin on open futures contracts | 275,158 | 239,155 |
Receivable for investments sold | 100,174 | 23,017 |
Receivable for Fund shares sold | 92,775 | 8,156 |
Receivable for dividends | 0 | 107,539 |
Prepaid expenses and other assets | 96,518 | 58,007 |
Total assets | 452,038,913 | 258,308,348 |
Liabilities | ||
Payable for Fund shares redeemed | 267,069 | 252,587 |
Payable for daily variation margin on open futures contracts | 190,921 | 219,168 |
Distribution fee payable | 162,625 | 136,534 |
Shareholder servicing fees payable | 95,618 | 52,407 |
Administration fees payable | 76,045 | 45,462 |
Overdraft due to custodian bank | 73,725 | 2,751 |
Management fee payable | 59,272 | 30,338 |
Payable for investments purchased | 26,333 | 134,741 |
Trustees’ fees and expenses payable | 1,290 | 504 |
Accrued expenses and other liabilities | 60,992 | 26,819 |
Total liabilities | 1,013,890 | 901,311 |
Total net assets | $451,025,023 | $257,407,037 |
Net assets consist of | ||
Paid-in capital | $421,537,176 | $282,092,391 |
Total distributable earnings (loss) | 29,487,847 | (24,685,354 ) |
Total net assets | $451,025,023 | $257,407,037 |
Computation of net asset value and offering price per share | ||
Net assets–Class A | $120,576,072 | $31,509,450 |
Shares outstanding–Class A1 | 7,000,089 | 3,484,662 |
Net asset value per share–Class A | $17.22 | $9.04 |
Maximum offering price per share – Class A2 | $18.27 | $9.59 |
Net assets–Class C | $254,614,966 | $213,452,336 |
Shares outstanding–Class C1 | 14,911,713 | 22,951,409 |
Net asset value per share–Class C | $17.07 | $9.30 |
Net assets–Administrator Class | $71,010,159 | N/A |
Shares outstanding–Administrator Class1 | 4,110,074 | N/A |
Net asset value per share–Administrator Class | $17.28 | N/A |
Net assets–Institutional Class | $4,823,826 | $12,445,251 |
Shares outstanding–Institutional Class1 | 278,914 | 1,373,310 |
Net asset value per share–Institutional Class | $17.30 | $9.06 |
Investments in affiliated Master Portfolios, at cost | $235,700,748 | $138,161,523 |
Investments in unaffiliated Underlying Funds, at cost | $82,603,950 | $31,629,506 |
Investments in affiliated Underlying Funds, at cost | $70,867,283 | $95,457,981 |
1 | Each 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.
Multi-Asset Funds | 47
Statements of assets and liabilities—May 31, 2023
Spectrum Growth Fund | Spectrum Income Allocation Fund | Spectrum Moderate Growth Fund | |
Assets | |||
Investments in affiliated Master Portfolios, at value (see cost below) | $114,189,426 | $85,387,072 | $197,494,802 |
Investments in unaffiliated Underlying Funds, at value (see cost below) | 31,775,034 | 13,180,517 | 49,535,960 |
Investments in affiliated Underlying Funds, at value (see cost below) | 61,532,711 | 39,258,500 | 128,891,269 |
Cash | 0 | 35,947 | 0 |
Cash at broker segregated for futures contracts | 1,579,862 | 1,001,887 | 2,832,735 |
Receivable for daily variation margin on open futures contracts | 192,674 | 127,869 | 351,063 |
Receivable for investments sold | 34,660 | 5,404 | 36,839 |
Receivable for Fund shares sold | 145,006 | 1,650 | 10,957 |
Receivable for dividends | 94,592 | 52,654 | 149,065 |
Prepaid expenses and other assets | 54,059 | 54,302 | 64,648 |
Total assets | 209,598,024 | 139,105,802 | 379,367,338 |
Liabilities | |||
Payable for Fund shares redeemed | 313,600 | 91,603 | 282,876 |
Payable for daily variation margin on open futures contracts | 177,227 | 116,982 | 322,096 |
Distribution fee payable | 115,967 | 73,961 | 209,320 |
Shareholder servicing fees payable | 44,388 | 28,381 | 79,534 |
Administration fees payable | 37,466 | 24,525 | 67,636 |
Overdraft due to custodian bank | 8,794 | 0 | 13,229 |
Management fee payable | 31,446 | 15,041 | 53,443 |
Payable for investments purchased | 126,569 | 97,379 | 182,323 |
Trustees’ fees and expenses payable | 504 | 504 | 504 |
Accrued expenses and other liabilities | 33,658 | 25,787 | 36,957 |
Total liabilities | 889,619 | 474,163 | 1,247,918 |
Total net assets | $208,708,405 | $138,631,639 | $378,119,420 |
Net assets consist of | |||
Paid-in capital | $212,587,154 | $161,411,558 | $398,563,849 |
Total distributable loss | (3,878,749 ) | (22,779,919 ) | (20,444,429 ) |
Total net assets | $208,708,405 | $138,631,639 | $378,119,420 |
Computation of net asset value and offering price per share | |||
Net assets–Class A | $25,802,700 | $17,127,973 | $44,965,628 |
Shares outstanding–Class A1 | 2,406,767 | 2,018,647 | 4,277,986 |
Net asset value per share–Class A | $10.72 | $8.48 | $10.51 |
Maximum offering price per share – Class A2 | $11.37 | $9.00 | $11.15 |
Net assets–Class C | $181,270,167 | $115,932,491 | $326,438,393 |
Shares outstanding–Class C1 | 16,432,822 | 13,670,012 | 30,222,980 |
Net asset value per share–Class C | $11.03 | $8.48 | $10.80 |
Net assets–Institutional Class | $1,635,538 | $5,571,175 | $6,715,399 |
Shares outstanding–Institutional Class1 | 152,548 | 658,059 | 638,904 |
Net asset value per share–Institutional Class | $10.72 | $8.47 | $10.51 |
Investments in affiliated Master Portfolios, at cost | $105,828,491 | $92,419,921 | $190,726,719 |
Investments in unaffiliated Underlying Funds, at cost | $29,692,771 | $13,476,207 | $48,135,043 |
Investments in affiliated Underlying Funds, at cost | $65,519,853 | $42,555,123 | $138,597,072 |
1 | Each 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.
48 | Multi-Asset Funds
Statements of operations—year ended May 31, 2023
Statements of operations
Spectrum Aggressive Growth Fund | Spectrum Conservative Growth Fund | |
Investment income | ||
Dividends allocated from affiliated Master Portfolios* | $6,358,376 | $1,218,955 |
Dividends from unaffiliated Underlying Funds | 1,753,912 | 3,879,490 |
Dividends from affiliated Underlying Funds | 476,150 | 4,147,174 |
Affiliated income allocated from affiliated Master Portfolios | 237,995 | 125,829 |
Interest | 68,479 | 39,295 |
Interest allocated from affiliated Master Portfolios** | 18,197 | 2,932,793 |
Expenses allocated from affiliated Master Portfolios | (830,142 ) | (418,689 ) |
Waivers allocated from affiliated Master Portfolios | 99,488 | 58,447 |
Total investment income | 8,182,455 | 11,983,294 |
Expenses | ||
Management fee | 1,157,441 | 690,978 |
Administration fees | ||
Class A | 247,685 | 67,984 |
Class C | 564,495 | 486,514 |
Administrator Class | 92,418 | N/A |
Institutional Class | 6,673 | 16,048 |
Shareholder servicing fees | ||
Class A | 294,843 | 80,933 |
Class C | 670,826 | 578,185 |
Administrator Class | 176,721 | N/A |
Distribution fee | ||
Class C | 2,004,079 | 1,732,150 |
Custody and accounting fees | 51,206 | 47,464 |
Professional fees | 59,173 | 45,899 |
Registration fees | 75,867 | 56,528 |
Shareholder report expenses | 92,125 | 49,401 |
Trustees’ fees and expenses | 21,099 | 23,125 |
Other fees and expenses | 12,192 | 7,408 |
Total expenses | 5,526,843 | 3,882,617 |
Less: Fee waivers and/or expense reimbursements | ||
Fund-level | (100,100 ) | (112,872 ) |
Class A | (9,463 ) | (41 ) |
Class C | (129 ) | (33 ) |
Administrator Class | (4,499 ) | N/A |
Institutional Class | (350 ) | 0 |
Net expenses | 5,412,302 | 3,769,671 |
Net investment income | 2,770,153 | 8,213,623 |
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 49
Statements of operations—year ended May 31, 2023
Spectrum Aggressive Growth Fund | Spectrum Conservative Growth Fund | |
Realized and unrealized gains (losses) on investments | ||
Net realized gains (losses) on | ||
Investments allocated from affiliated Master Portfolios | $(4,596,410 ) | $(2,265,673 ) |
Affiliated Underlying Funds | (4,754,043 ) | (2,903,289 ) |
Unaffiliated Underlying Funds | (334,875 ) | (4,139,748 ) |
Foreign currency and foreign currency translations | (11,814 ) | (6,896 ) |
Futures contracts | (3,263,971 ) | (3,651,844 ) |
Capital gain distributions from affiliated Underlying Funds | 3,218,674 | 993,306 |
Net realized losses on investments | (9,742,439 ) | (11,974,144 ) |
Net change in unrealized gains (losses) on | ||
Investments allocated from affiliated Master Portfolios | (306,707 ) | (4,808,442 ) |
Affiliated Underlying Funds | 3,138,693 | (1,274,480 ) |
Unaffiliated Underlying Funds | (435,576 ) | (3,609,512 ) |
Foreign currency and foreign currency translations | 6 | 3 |
Futures contracts | (274,628 ) | 1,474,290 |
Net change in unrealized gains (losses) on investments | 2,121,788 | (8,218,141 ) |
Net realized and unrealized gains (losses) on investments | (7,620,651 ) | (20,192,285 ) |
Net decrease in net assets resulting from operations | $(4,850,498 ) | $(11,978,662 ) |
*Net of foreign dividend withholding taxes allocated from affiliated Master Portfolios in the amount of | $478,567 | $82,701 |
**Net of foreign interest withholding taxes allocated from affiliated Master Portfolios in the amount of | 0 | 137 |
The accompanying notes are an integral part of these financial statements.
50 | Multi-Asset Funds
Statements of operations—year ended May 31, 2023
Spectrum Growth Fund | Spectrum Income Allocation Fund | Spectrum Moderate Growth Fund | |
Investment income | |||
Dividends allocated from affiliated Master Portfolios* | $1,914,407 | $246,343 | $2,939,838 |
Dividends from unaffiliated Underlying Funds | 3,214,898 | 2,011,436 | 5,723,485 |
Dividends from affiliated Underlying Funds | 2,357,084 | 2,090,918 | 5,659,178 |
Affiliated income allocated from affiliated Master Portfolios | 90,955 | 91,341 | 166,947 |
Interest | 34,096 | 20,557 | 60,326 |
Interest allocated from affiliated Master Portfolios** | 1,233,202 | 2,520,636 | 2,800,392 |
Expenses allocated from affiliated Master Portfolios | (367,443 ) | (252,350 ) | (636,947 ) |
Waivers allocated from affiliated Master Portfolios | 50,653 | 32,311 | 88,914 |
Total investment income | 8,527,852 | 6,761,192 | 16,802,133 |
Expenses | |||
Management fee | 547,847 | 382,856 | 1,011,786 |
Administration fees | |||
Class A | 52,395 | 39,943 | 91,503 |
Class C | 403,725 | 269,867 | 744,739 |
Institutional Class | 2,521 | 7,298 | 8,455 |
Shareholder servicing fees | |||
Class A | 62,354 | 47,552 | 108,914 |
Class C | 479,867 | 320,588 | 885,066 |
Distribution fee | |||
Class C | 1,435,533 | 960,662 | 2,651,764 |
Custody and accounting fees | 38,671 | 34,315 | 42,393 |
Professional fees | 50,693 | 43,375 | 46,843 |
Registration fees | 53,896 | 48,385 | 36,697 |
Shareholder report expenses | 42,687 | 34,724 | 48,611 |
Trustees’ fees and expenses | 23,426 | 22,208 | 22,203 |
Other fees and expenses | 8,124 | 7,855 | 9,688 |
Total expenses | 3,201,739 | 2,219,628 | 5,708,662 |
Less: Fee waivers and/or expense reimbursements | |||
Fund-level | (122,730 ) | (124,643 ) | (46,858 ) |
Class A | (93 ) | (955 ) | (18 ) |
Class C | (64 ) | (18 ) | (52 ) |
Institutional Class | 0 | (301 ) | 0 |
Net expenses | 3,078,852 | 2,093,711 | 5,661,734 |
Net investment income | 5,449,000 | 4,667,481 | 11,140,399 |
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 51
Statements of operations—year ended May 31, 2023
Spectrum Growth Fund | Spectrum Income Allocation Fund | Spectrum Moderate Growth Fund | |
Realized and unrealized gains (losses) on investments | |||
Net realized gains (losses) on | |||
Investments allocated from affiliated Master Portfolios | $1,904,140 | $(3,712,038 ) | $1,464,128 |
Affiliated Underlying Funds | (2,388,995 ) | (1,586,414 ) | (5,201,765 ) |
Unaffiliated Underlying Funds | (3,752,393 ) | (1,430,246 ) | (7,094,139 ) |
Foreign currency and foreign currency translations | (5,335 ) | (3,692 ) | (10,045 ) |
Futures contracts | (2,826,492 ) | (1,302,521 ) | (5,290,918 ) |
Capital gain distributions from affiliated Underlying Funds | 1,172,746 | 310,326 | 2,070,278 |
Net realized losses on investments | (5,896,329 ) | (7,724,585 ) | (14,062,461 ) |
Net change in unrealized gains (losses) on | |||
Investments allocated from affiliated Master Portfolios | (5,448,625 ) | (1,684,145 ) | (8,912,352 ) |
Affiliated Underlying Funds | (12,378 ) | (623,909 ) | (785,752 ) |
Unaffiliated Underlying Funds | (3,738,833 ) | (2,292,100 ) | (5,993,481 ) |
Foreign currency and foreign currency translations | 1,167 | 307 | 2,542 |
Futures contracts | 1,342,099 | 699,300 | 2,251,067 |
Net change in unrealized gains (losses) on investments | (7,856,570 ) | (3,900,547 ) | (13,437,976 ) |
Net realized and unrealized gains (losses) on investments | (13,752,899 ) | (11,625,132 ) | (27,500,437 ) |
Net decrease in net assets resulting from operations | $(8,303,899 ) | $(6,957,651 ) | $(16,360,038 ) |
*Net of foreign dividend withholding taxes allocated from affiliated Master Portfolios in the amount of | $136,502 | $14,847 | $207,701 |
**Net of foreign interest withholding taxes allocated from affiliated Master Portfolios in the amount of | 31 | 139 | 94 |
The accompanying notes are an integral part of these financial statements.
52 | Multi-Asset Funds
Statements of changes in net assets
Statements of changes in net assets
Spectrum Aggressive Growth Fund | ||||
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $2,770,153 | $925,743 | ||
Net realized gains (losses) on investments | (9,742,439 ) | 26,183,999 | ||
Net change in unrealized gains (losses) on investments | 2,121,788 | (77,972,191 ) | ||
Net decrease in net assets resulting from operations | (4,850,498 ) | (50,862,449 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class A | (5,360,320 ) | (10,049,605 ) | ||
Class C | (10,294,513 ) | (46,652,606 ) | ||
Administrator Class | (3,317,435 ) | 0 1 | ||
Institutional Class | (249,706 ) | (874,349 ) | ||
Tax basis return of capital | ||||
Class A | (583,510 ) | 0 | ||
Class C | (1,329,868 ) | 0 | ||
Administrator Class | (351,709 ) | 0 1 | ||
Institutional Class | (25,395 ) | 0 | ||
Total distributions to shareholders | (21,512,456 ) | (57,576,560 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class A | 721,959 | 12,361,279 | 816,312 | 18,171,153 |
Class C | 309,768 | 5,239,508 | 343,193 | 7,214,990 |
Administrator Class | 95,193 | 1,618,791 | 45,122 1 | 865,939 1 |
Institutional Class | 158,844 | 2,731,633 | 634,500 | 14,278,622 |
21,951,211 | 40,530,704 | |||
Reinvestment of distributions | ||||
Class A | 352,466 | 5,923,710 | 480,525 | 10,028,952 |
Class C | 692,911 | 11,606,677 | 2,264,481 | 46,540,235 |
Administrator Class | 215,782 | 3,634,990 | 0 1 | 0 1 |
Institutional Class | 16,341 | 275,101 | 41,686 | 874,349 |
21,440,478 | 57,443,536 | |||
Payment for shares redeemed | ||||
Class A | (964,265 ) | (16,433,611 ) | (680,485 ) | (14,517,658 ) |
Class C | (2,892,486 ) | (48,988,220 ) | (2,606,924 ) | (55,520,562 ) |
Administrator Class | (409,693 ) | (7,043,597 ) | (563,869 )1 | (10,089,956 )1 |
Institutional Class | (213,905 ) | (3,636,097 ) | (706,658 ) | (16,276,740 ) |
(76,101,525 ) | (96,404,916 ) | |||
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 53
Statements of changes in net assets
Spectrum Aggressive Growth Fund | ||||
Shares | Shares | |||
Net asset value of shares issued in acquisition | ||||
Class A | 0 | $0 | 3,370,579 | $67,600,166 |
Class C | 0 | 0 | 57,632 | 1,147,568 |
Administrator Class | 0 | 0 | 4,727,539 | 95,077,457 |
0 | 163,825,191 | |||
Net increase (decrease) in net assets resulting from capital share transactions | (32,709,836 ) | 165,394,515 | ||
Total increase (decrease) in net assets | (59,072,790 ) | 56,955,506 | ||
Net assets | ||||
Beginning of period | 510,097,813 | 453,142,307 | ||
End of period | $451,025,023 | $510,097,813 | ||
1 | For the period from February 4, 2022 (commencement of class operations) to May 31, 2022 |
The accompanying notes are an integral part of these financial statements.
54 | Multi-Asset Funds
Statements of changes in net assets
Spectrum Conservative Growth Fund | ||||
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $8,213,623 | $6,806,428 | ||
Net realized gains (losses) on investments | (11,974,144 ) | 8,220,605 | ||
Net change in unrealized gains (losses) on investments | (8,218,141 ) | (36,062,340 ) | ||
Net decrease in net assets resulting from operations | (11,978,662 ) | (21,035,307 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class A | (2,099,930 ) | (4,026,983 ) | ||
Class C | (12,875,159 ) | (28,133,207 ) | ||
Institutional Class | (844,294 ) | (1,743,701 ) | ||
Total distributions to shareholders | (15,819,383 ) | (33,903,891 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class A | 579,071 | 5,351,457 | 405,172 | 4,537,206 |
Class C | 528,590 | 4,942,351 | 390,078 | 4,442,312 |
Institutional Class | 210,943 | 1,927,887 | 1,635,750 | 19,304,397 |
12,221,695 | 28,283,915 | |||
Reinvestment of distributions | ||||
Class A | 231,125 | 2,091,844 | 362,796 | 4,006,426 |
Class C | 1,381,228 | 12,866,079 | 2,485,248 | 28,094,921 |
Institutional Class | 93,167 | 844,294 | 158,208 | 1,742,918 |
15,802,217 | 33,844,265 | |||
Payment for shares redeemed | ||||
Class A | (751,253 ) | (6,888,334 ) | (782,754 ) | (8,635,241 ) |
Class C | (4,683,836 ) | (44,241,657 ) | (5,251,986 ) | (60,023,029 ) |
Institutional Class | (218,887 ) | (2,000,907 ) | (770,543 ) | (8,351,769 ) |
(53,130,898 ) | (77,010,039 ) | |||
Net decrease in net assets resulting from capital share transactions | (25,106,986 ) | (14,881,859 ) | ||
Total decrease in net assets | (52,905,031 ) | (69,821,057 ) | ||
Net assets | ||||
Beginning of period | 310,312,068 | 380,133,125 | ||
End of period | $257,407,037 | $310,312,068 | ||
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 55
Statements of changes in net assets
Spectrum Growth Fund | ||||
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $5,449,000 | $5,149,272 | ||
Net realized gains (losses) on investments | (5,896,329 ) | 14,558,737 | ||
Net change in unrealized gains (losses) on investments | (7,856,570 ) | (36,266,865 ) | ||
Net decrease in net assets resulting from operations | (8,303,899 ) | (16,558,856 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class A | (1,789,005 ) | (4,137,271 ) | ||
Class C | (12,249,697 ) | (30,888,748 ) | ||
Institutional Class | (154,866 ) | (338,432 ) | ||
Total distributions to shareholders | (14,193,568 ) | (35,364,451 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class A | 437,991 | 4,760,622 | 246,428 | 3,515,326 |
Class C | 344,996 | 3,865,363 | 465,805 | 6,529,020 |
Institutional Class | 174,644 | 1,899,496 | 204,168 | 2,791,934 |
10,525,481 | 12,836,280 | |||
Reinvestment of distributions | ||||
Class A | 168,220 | 1,784,634 | 307,722 | 4,128,480 |
Class C | 1,117,113 | 12,232,792 | 2,251,455 | 30,852,298 |
Institutional Class | 14,625 | 154,866 | 25,184 | 338,432 |
14,172,292 | 35,319,210 | |||
Payment for shares redeemed | ||||
Class A | (450,613 ) | (4,944,924 ) | (467,843 ) | (6,436,687 ) |
Class C | (2,771,943 ) | (31,050,525 ) | (2,997,181 ) | (42,147,744 ) |
Institutional Class | (245,195 ) | (2,657,387 ) | (199,958 ) | (2,769,747 ) |
(38,652,836 ) | (51,354,178 ) | |||
Net decrease in net assets resulting from capital share transactions | (13,955,063 ) | (3,198,688 ) | ||
Total decrease in net assets | (36,452,530 ) | (55,121,995 ) | ||
Net assets | ||||
Beginning of period | 245,160,935 | 300,282,930 | ||
End of period | $208,708,405 | $245,160,935 | ||
The accompanying notes are an integral part of these financial statements.
56 | Multi-Asset Funds
Statements of changes in net assets
Spectrum Income Allocation Fund | ||||
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $4,667,481 | $3,406,997 | ||
Net realized losses on investments | (7,724,585 ) | (547,741 ) | ||
Net change in unrealized gains (losses) on investments | (3,900,547 ) | (16,587,889 ) | ||
Net decrease in net assets resulting from operations | (6,957,651 ) | (13,728,633 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class A | (864,868 ) | (1,594,768 ) | ||
Class C | (4,811,187 ) | (10,477,880 ) | ||
Institutional Class | (271,477 ) | (790,454 ) | ||
Total distributions to shareholders | (5,947,532 ) | (12,863,102 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class A | 361,848 | 3,108,477 | 287,235 | 2,920,363 |
Class C | 208,362 | 1,804,859 | 367,054 | 3,613,412 |
Institutional Class | 53,807 | 469,980 | 1,272,557 | 13,383,942 |
5,383,316 | 19,917,717 | |||
Reinvestment of distributions | ||||
Class A | 101,327 | 863,269 | 157,714 | 1,593,948 |
Class C | 563,218 | 4,801,488 | 1,036,351 | 10,471,257 |
Institutional Class | 31,957 | 271,477 | 78,749 | 789,993 |
5,936,234 | 12,855,198 | |||
Payment for shares redeemed | ||||
Class A | (692,795 ) | (5,923,735 ) | (498,067 ) | (5,053,056 ) |
Class C | (3,260,095 ) | (28,066,319 ) | (3,981,333 ) | (39,973,681 ) |
Institutional Class | (68,847 ) | (596,639 ) | (818,687 ) | (7,694,286 ) |
(34,586,693 ) | (52,721,023 ) | |||
Net decrease in net assets resulting from capital share transactions | (23,267,143 ) | (19,948,108 ) | ||
Total decrease in net assets | (36,172,326 ) | (46,539,843 ) | ||
Net assets | ||||
Beginning of period | 174,803,965 | 221,343,808 | ||
End of period | $138,631,639 | $174,803,965 | ||
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 57
Statements of changes in net assets
Spectrum Moderate Growth Fund | ||||
Year ended May 31, 2023 | Year ended May 31, 2022 | |||
Operations | ||||
Net investment income | $11,140,399 | $9,720,875 | ||
Net realized gains (losses) on investments | (14,062,461 ) | 22,358,842 | ||
Net change in unrealized gains (losses) on investments | (13,437,976 ) | (62,757,073 ) | ||
Net decrease in net assets resulting from operations | (16,360,038 ) | (30,677,356 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class A | (2,975,461 ) | (6,498,756 ) | ||
Class C | (21,472,598 ) | (50,916,068 ) | ||
Institutional Class | (475,492 ) | (1,255,455 ) | ||
Total distributions to shareholders | (24,923,551 ) | (58,670,279 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class A | 695,034 | 7,405,345 | 437,749 | 5,871,568 |
Class C | 508,539 | 5,636,312 | 525,068 | 7,193,590 |
Institutional Class | 367,124 | 3,944,823 | 861,717 | 11,938,967 |
16,986,480 | 25,004,125 | |||
Reinvestment of distributions | ||||
Class A | 283,302 | 2,949,491 | 496,494 | 6,478,082 |
Class C | 1,998,615 | 21,442,402 | 3,817,523 | 50,833,512 |
Institutional Class | 45,741 | 475,492 | 96,014 | 1,255,455 |
24,867,385 | 58,567,049 | |||
Payment for shares redeemed | ||||
Class A | (712,515 ) | (7,636,466 ) | (945,140 ) | (12,411,416 ) |
Class C | (6,098,542 ) | (67,180,571 ) | (5,676,098 ) | (76,893,468 ) |
Institutional Class | (407,494 ) | (4,406,072 ) | (571,340 ) | (7,428,017 ) |
(79,223,109 ) | (96,732,901 ) | |||
Net decrease in net assets resulting from capital share transactions | (37,369,244 ) | (13,161,727 ) | ||
Total decrease in net assets | (78,652,833 ) | (102,509,362 ) | ||
Net assets | ||||
Beginning of period | 456,772,253 | 559,281,615 | ||
End of period | $378,119,420 | $456,772,253 | ||
The accompanying notes are an integral part of these financial statements.
58 | Multi-Asset Funds
Financial highlights
Financial highlights
Spectrum Aggressive Growth Fund
(For a share outstanding throughout each period)
Spectrum Aggressive Growth Fund
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $18.17 | $22.82 | $18.59 | $16.52 | $20.55 |
Net investment income | 0.17 1 | 0.25 | 0.14 | 0.19 | 0.17 1 |
Net realized and unrealized gains (losses) on investments | (0.24 ) | (1.74 ) | 6.65 | 2.11 | (0.81 ) |
Total from investment operations | (0.07 ) | (1.49 ) | 6.79 | 2.30 | (0.64 ) |
Distributions to shareholders from | |||||
Net investment income | (0.20 ) | (0.18 ) | (0.22 ) | (0.19 ) | (0.26 ) |
Net realized gains | (0.60 ) | (2.98 ) | (2.34 ) | (0.04 ) | (3.13 ) |
Tax basis return of capital | (0.08 ) | 0.00 | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (0.88 ) | (3.16 ) | (2.56 ) | (0.23 ) | (3.39 ) |
Net asset value, end of period | $17.22 | $18.17 | $22.82 | $18.59 | $16.52 |
Total return2 | (0.20 )% | (8.22 )% | 38.53 % | 13.91 % | (2.35 )% |
Ratios to average net assets (annualized) | |||||
Gross expenses* | 0.78 % | 0.76 % | 0.77 % | 0.77 % | 0.76 % |
Net expenses* | 0.75 % | 0.75 % | 0.75 % | 0.75 % | 0.75 % |
Net investment income | 1.02 % | 0.76 % | 0.63 % | 1.08 % | 0.97 % |
Supplemental data | |||||
Portfolio turnover rate3 | 38 % | 62 % | 82 % | 71 % | 78 % |
Net assets, end of period (000s omitted) | $120,576 | $125,195 | $66,239 | $44,714 | $42,588 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.16% |
Year ended May 31, 2022 | 0.16% |
Year ended May 31, 2021 | 0.15% |
Year ended May 31, 2020 | 0.18% |
Year ended May 31, 2019 | 0.18% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 59
Financial highlights
Spectrum Aggressive Growth Fund
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $18.00 | $22.63 | $18.45 | $16.39 | $20.33 |
Net investment income (loss) | 0.04 1 | (0.01 ) | (0.03 ) | 0.07 | 0.06 |
Net realized and unrealized gains (losses) on investments | (0.24 ) | (1.63 ) | 6.62 | 2.07 | (0.82 ) |
Total from investment operations | (0.20 ) | (1.64 ) | 6.59 | 2.14 | (0.76 ) |
Distributions to shareholders from | |||||
Net investment income | (0.05 ) | (0.01 ) | (0.07 ) | (0.04 ) | (0.05 ) |
Net realized gains | (0.60 ) | (2.98 ) | (2.34 ) | (0.04 ) | (3.13 ) |
Tax basis return of capital | (0.08 ) | 0.00 | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (0.73 ) | (2.99 ) | (2.41 ) | (0.08 ) | (3.18 ) |
Net asset value, end of period | $17.07 | $18.00 | $22.63 | $18.45 | $16.39 |
Total return2 | (0.96 )% | (8.87 )% | 37.57 % | 13.06 % | (3.16 )% |
Ratios to average net assets (annualized) | |||||
Gross expenses* | 1.52 % | 1.50 % | 1.52 % | 1.52 % | 1.51 % |
Net expenses* | 1.50 % | 1.50 % | 1.50 % | 1.50 % | 1.50 % |
Net investment income (loss) | 0.27 % | (0.03 )% | (0.12 )% | 0.33 % | 0.32 % |
Supplemental data | |||||
Portfolio turnover rate3 | 38 % | 62 % | 82 % | 71 % | 78 % |
Net assets, end of period (000s omitted) | $254,615 | $302,402 | $378,941 | $323,778 | $355,837 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.16% |
Year ended May 31, 2022 | 0.16% |
Year ended May 31, 2021 | 0.15% |
Year ended May 31, 2020 | 0.18% |
Year ended May 31, 2019 | 0.18% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
60 | Multi-Asset Funds
Financial highlights
Spectrum Aggressive Growth Fund
(For a share outstanding throughout each period)
Year ended May 31 | ||
Administrator Class | 2023 | 20221 |
Net asset value, beginning of period | $18.23 | $20.11 |
Net investment income | 0.19 2 | 0.06 |
Net realized and unrealized gains (losses) on investments | (0.25 ) | (1.94 ) |
Total from investment operations | (0.06 ) | (1.88 ) |
Distributions to shareholders from | ||
Net investment income | (0.21 ) | 0.00 |
Net realized gains | (0.60 ) | 0.00 |
Tax basis return of capital | (0.08 ) | 0.00 |
Total distributions to shareholders | (0.89 ) | 0.00 |
Net asset value, end of period | $17.28 | $18.23 |
Total return3 | (0.10 )% | (9.35 )% |
Ratios to average net assets (annualized) | ||
Gross expenses* | 0.70 % | 0.67 % |
Net expenses* | 0.67 % | 0.67 % |
Net investment income | 1.10 % | 0.98 % |
Supplemental data | ||
Portfolio turnover rate4 | 38 % | 62 % |
Net assets, end of period (000s omitted) | $71,010 | $76,706 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.16% |
Year ended May 31, 20221 | 0.15% |
1 | For the period from February 4, 2022 (commencement of class operations) to May 31, 2022 |
2 | Calculated based upon average shares outstanding |
3 | Returns for periods of less than one year are not annualized. |
4 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 61
Financial highlights
Spectrum Aggressive Growth Fund
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Institutional Class | 2023 | 2022 | 2021 | 2020 | 20191 |
Net asset value, beginning of period | $18.24 | $22.87 | $18.62 | $16.55 | $21.08 |
Net investment income | 0.23 2 | 0.27 | 0.22 | 0.29 | 0.14 |
Net realized and unrealized gains (losses) on investments | (0.24 ) | (1.69 ) | 6.65 | 2.07 | (1.26 ) |
Total from investment operations | (0.01 ) | (1.42 ) | 6.87 | 2.36 | (1.12 ) |
Distributions to shareholders from | |||||
Net investment income | (0.25 ) | (0.23 ) | (0.28 ) | (0.25 ) | (0.28 ) |
Net realized gains | (0.60 ) | (2.98 ) | (2.34 ) | (0.04 ) | (3.13 ) |
Tax basis return of capital | (0.08 ) | 0.00 | 0.00 | 0.00 | 0.00 |
Total distributions to shareholders | (0.93 ) | (3.21 ) | (2.62 ) | (0.29 ) | (3.41 ) |
Net asset value, end of period | $17.30 | $18.24 | $22.87 | $18.62 | $16.55 |
Total return3 | 0.18 % | (7.89 )% | 38.96 % | 14.26 % | (4.54 )% |
Ratios to average net assets (annualized) | |||||
Gross expenses* | 0.45 % | 0.43 % | 0.43 % | 0.44 % | 0.43 % |
Net expenses* | 0.42 % | 0.42 % | 0.42 % | 0.42 % | 0.42 % |
Net investment income | 1.35 % | 1.00 % | 0.96 % | 1.40 % | 1.40 % |
Supplemental data | |||||
Portfolio turnover rate4 | 38 % | 62 % | 82 % | 71 % | 78 % |
Net assets, end of period (000s omitted) | $4,824 | $5,794 | $7,962 | $2,281 | $1,172 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.16% |
Year ended May 31, 2022 | 0.16% |
Year ended May 31, 2021 | 0.15% |
Year ended May 31, 2020 | 0.18% |
Year ended May 31, 20191 | 0.18% |
1 | For the period from July 31, 2018 (commencement of class operations) to May 31, 2019 |
2 | Calculated based upon average shares outstanding |
3 | Returns for periods of less than one year are not annualized. |
4 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
62 | Multi-Asset Funds
Financial highlights
Spectrum Conservative Growth Fund
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $9.97 | $11.73 | $10.92 | $10.30 | $10.90 |
Net investment income | 0.33 1 | 0.28 | 0.14 | 0.15 | 0.19 1 |
Net realized and unrealized gains (losses) on investments | (0.65 ) | (0.85 ) | 1.56 | 0.76 | 0.03 |
Total from investment operations | (0.32 ) | (0.57 ) | 1.70 | 0.91 | 0.22 |
Distributions to shareholders from | |||||
Net investment income | (0.38 ) | (0.29 ) | (0.11 ) | (0.21 ) | (0.18 ) |
Net realized gains | (0.23 ) | (0.90 ) | (0.78 ) | (0.08 ) | (0.64 ) |
Total distributions to shareholders | (0.61 ) | (1.19 ) | (0.89 ) | (0.29 ) | (0.82 ) |
Net asset value, end of period | $9.04 | $9.97 | $11.73 | $10.92 | $10.30 |
Total return2 | (3.11 )% | (5.69 )% | 16.04 % | 8.95 % | 2.40 % |
Ratios to average net assets (annualized) | |||||
Gross expenses* | 0.79 % | 0.78 % | 0.77 % | 0.77 % | 0.76 % |
Net expenses* | 0.75 % | 0.75 % | 0.75 % | 0.75 % | 0.75 % |
Net investment income | 3.58 % | 2.52 % | 1.07 % | 1.47 % | 1.81 % |
Supplemental data | |||||
Portfolio turnover rate3 | 93 % | 137 % | 152 % | 162 % | 155 % |
Net assets, end of period (000s omitted) | $31,509 | $34,171 | $40,354 | $31,965 | $34,104 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.13% |
Year ended May 31, 2022 | 0.14% |
Year ended May 31, 2021 | 0.15% |
Year ended May 31, 2020 | 0.16% |
Year ended May 31, 2019 | 0.16% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 63
Financial highlights
Spectrum Conservative Growth Fund
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $10.23 | $11.98 | $11.14 | $10.50 | $11.10 |
Net investment income | 0.27 1 | 0.21 | 0.04 | 0.09 | 0.12 1 |
Net realized and unrealized gains (losses) on investments | (0.67 ) | (0.88 ) | 1.61 | 0.77 | 0.02 |
Total from investment operations | (0.40 ) | (0.67 ) | 1.65 | 0.86 | 0.14 |
Distributions to shareholders from | |||||
Net investment income | (0.30 ) | (0.18 ) | (0.03 ) | (0.14 ) | (0.10 ) |
Net realized gains | (0.23 ) | (0.90 ) | (0.78 ) | (0.08 ) | (0.64 ) |
Total distributions to shareholders | (0.53 ) | (1.08 ) | (0.81 ) | (0.22 ) | (0.74 ) |
Net asset value, end of period | $9.30 | $10.23 | $11.98 | $11.14 | $10.50 |
Total return2 | (3.83 )% | (6.38 )% | 15.17 % | 8.24 % | 1.58 % |
Ratios to average net assets (annualized) | |||||
Gross expenses* | 1.54 % | 1.53 % | 1.52 % | 1.52 % | 1.51 % |
Net expenses* | 1.50 % | 1.50 % | 1.50 % | 1.50 % | 1.50 % |
Net investment income | 2.84 % | 1.80 % | 0.31 % | 0.73 % | 1.13 % |
Supplemental data | |||||
Portfolio turnover rate3 | 93 % | 137 % | 152 % | 162 % | 155 % |
Net assets, end of period (000s omitted) | $213,452 | $263,264 | $336,665 | $339,482 | $393,207 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.13% |
Year ended May 31, 2022 | 0.14% |
Year ended May 31, 2021 | 0.15% |
Year ended May 31, 2020 | 0.16% |
Year ended May 31, 2019 | 0.17% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
64 | Multi-Asset Funds
Financial highlights
Spectrum Conservative Growth Fund
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Institutional Class | 2023 | 2022 | 2021 | 2020 | 20191 |
Net asset value, beginning of period | $10.00 | $11.77 | $10.94 | $10.32 | $11.06 |
Net investment income | 0.36 2 | 0.34 | 0.17 | 0.20 | 0.14 |
Net realized and unrealized gains (losses) on investments | (0.66 ) | (0.87 ) | 1.57 | 0.74 | (0.04 ) |
Total from investment operations | (0.30 ) | (0.53 ) | 1.74 | 0.94 | 0.10 |
Distributions to shareholders from | |||||
Net investment income | (0.41 ) | (0.34 ) | (0.13 ) | (0.24 ) | (0.20 ) |
Net realized gains | (0.23 ) | (0.90 ) | (0.78 ) | (0.08 ) | (0.64 ) |
Total distributions to shareholders | (0.64 ) | (1.24 ) | (0.91 ) | (0.32 ) | (0.84 ) |
Net asset value, end of period | $9.06 | $10.00 | $11.77 | $10.94 | $10.32 |
Total return3 | (2.87 )% | (5.36 )% | 16.44 % | 9.26 % | 1.28 % |
Ratios to average net assets (annualized) | |||||
Gross expenses* | 0.46 % | 0.45 % | 0.44 % | 0.44 % | 0.43 % |
Net expenses* | 0.42 % | 0.42 % | 0.42 % | 0.42 % | 0.42 % |
Net investment income | 3.89 % | 2.24 % | 1.39 % | 1.80 % | 1.37 % |
Supplemental data | |||||
Portfolio turnover rate4 | 93 % | 137 % | 152 % | 162 % | 155 % |
Net assets, end of period (000s omitted) | $12,445 | $12,877 | $3,114 | $2,678 | $1,817 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.13% |
Year ended May 31, 2022 | 0.14% |
Year ended May 31, 2021 | 0.15% |
Year ended May 31, 2020 | 0.16% |
Year ended May 31, 20191 | 0.16% |
1 | For the period from July 31, 2018 (commencement of class operations) to May 31, 2019 |
2 | Calculated based upon average shares outstanding |
3 | Returns for periods of less than one year are not annualized. |
4 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 65
Financial highlights
Spectrum Growth Fund
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $11.87 | $14.46 | $12.70 | $11.57 | $13.88 |
Net investment income | 0.34 1 | 0.34 1 | 0.13 | 0.15 | 0.14 1 |
Net realized and unrealized gains (losses) on investments | (0.67 ) | (1.00 ) | 3.24 | 1.17 | (0.30 ) |
Total from investment operations | (0.33 ) | (0.66 ) | 3.37 | 1.32 | (0.16 ) |
Distributions to shareholders from | |||||
Net investment income | (0.41 ) | (0.33 ) | (0.13 ) | (0.18 ) | (0.23 ) |
Net realized gains | (0.41 ) | (1.60 ) | (1.48 ) | (0.01 ) | (1.92 ) |
Total distributions to shareholders | (0.82 ) | (1.93 ) | (1.61 ) | (0.19 ) | (2.15 ) |
Net asset value, end of period | $10.72 | $11.87 | $14.46 | $12.70 | $11.57 |
Total return2 | (2.53 )% | (5.83 )% | 27.87 % | 11.34 % | (0.38 )% |
Ratios to average net assets (annualized) | |||||
Gross expenses* | 0.81 % | 0.80 % | 0.79 % | 0.79 % | 0.78 % |
Net expenses* | 0.75 % | 0.75 % | 0.75 % | 0.75 % | 0.75 % |
Net investment income | 3.12 % | 2.46 % | 0.90 % | 1.14 % | 1.20 % |
Supplemental data | |||||
Portfolio turnover rate3 | 57 % | 61 % | 100 % | 98 % | 97 % |
Net assets, end of period (000s omitted) | $25,803 | $26,717 | $31,295 | $25,089 | $23,420 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.14% |
Year ended May 31, 2022 | 0.14% |
Year ended May 31, 2021 | 0.14% |
Year ended May 31, 2020 | 0.16% |
Year ended May 31, 2019 | 0.17% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
66 | Multi-Asset Funds
Financial highlights
Spectrum Growth Fund
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $12.17 | $14.78 | $12.96 | $11.78 | $14.02 |
Net investment income | 0.27 1 | 0.24 | 0.02 | 0.06 | 0.08 |
Net realized and unrealized gains (losses) on investments | (0.68 ) | (1.03 ) | 3.30 | 1.20 | (0.33 ) |
Total from investment operations | (0.41 ) | (0.79 ) | 3.32 | 1.26 | (0.25 ) |
Distributions to shareholders from | |||||
Net investment income | (0.32 ) | (0.22 ) | (0.02 ) | (0.07 ) | (0.07 ) |
Net realized gains | (0.41 ) | (1.60 ) | (1.48 ) | (0.01 ) | (1.92 ) |
Total distributions to shareholders | (0.73 ) | (1.82 ) | (1.50 ) | (0.08 ) | (1.99 ) |
Net asset value, end of period | $11.03 | $12.17 | $14.78 | $12.96 | $11.78 |
Total return2 | (3.22 )% | (6.53 )% | 26.86 % | 10.67 % | (1.12 )% |
Ratios to average net assets (annualized) | |||||
Gross expenses* | 1.56 % | 1.55 % | 1.54 % | 1.53 % | 1.52 % |
Net expenses* | 1.50 % | 1.50 % | 1.50 % | 1.50 % | 1.50 % |
Net investment income | 2.39 % | 1.73 % | 0.15 % | 0.40 % | 0.56 % |
Supplemental data | |||||
Portfolio turnover rate3 | 57 % | 61 % | 100 % | 98 % | 97 % |
Net assets, end of period (000s omitted) | $181,270 | $215,969 | $266,399 | $241,980 | $261,722 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.14% |
Year ended May 31, 2022 | 0.14% |
Year ended May 31, 2021 | 0.15% |
Year ended May 31, 2020 | 0.16% |
Year ended May 31, 2019 | 0.17% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 67
Financial highlights
Spectrum Growth Fund
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Institutional Class | 2023 | 2022 | 2021 | 2020 | 20191 |
Net asset value, beginning of period | $11.87 | $14.46 | $12.70 | $11.57 | $14.20 |
Net investment income | 0.39 2 | 0.42 | 0.22 | 0.16 | 0.18 |
Net realized and unrealized gains (losses) on investments | (0.68 ) | (1.03 ) | 3.19 | 1.20 | (0.65 ) |
Total from investment operations | (0.29 ) | (0.61 ) | 3.41 | 1.36 | (0.47 ) |
Distributions to shareholders from | |||||
Net investment income | (0.45 ) | (0.38 ) | (0.17 ) | (0.22 ) | (0.24 ) |
Net realized gains | (0.41 ) | (1.60 ) | (1.48 ) | (0.01 ) | (1.92 ) |
Total distributions to shareholders | (0.86 ) | (1.98 ) | (1.65 ) | (0.23 ) | (2.16 ) |
Net asset value, end of period | $10.72 | $11.87 | $14.46 | $12.70 | $11.57 |
Total return3 | (2.17 )% | (5.55 )% | 28.25 % | 11.71 % | (2.47 )% |
Ratios to average net assets (annualized) | |||||
Gross expenses* | 0.48 % | 0.47 % | 0.46 % | 0.46 % | 0.45 % |
Net expenses* | 0.42 % | 0.42 % | 0.42 % | 0.42 % | 0.42 % |
Net investment income | 3.53 % | 2.85 % | 1.24 % | 1.44 % | 1.84 % |
Supplemental data | |||||
Portfolio turnover rate4 | 57 % | 61 % | 100 % | 98 % | 97 % |
Net assets, end of period (000s omitted) | $1,636 | $2,475 | $2,589 | $1,016 | $699 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.14% |
Year ended May 31, 2022 | 0.14% |
Year ended May 31, 2021 | 0.14% |
Year ended May 31, 2020 | 0.16% |
Year ended May 31, 20191 | 0.17% |
1 | For the period from July 31, 2018 (commencement of class operations) to May 31, 2019 |
2 | Calculated based upon average shares outstanding |
3 | Returns for periods of less than one year are not annualized. |
4 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
68 | Multi-Asset Funds
Financial highlights
Spectrum Income Allocation Fund
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $9.18 | $10.50 | $10.40 | $9.82 | $10.05 |
Net investment income | 0.32 1 | 0.23 | 0.11 | 0.16 | 0.18 |
Net realized and unrealized gains (losses) on investments | (0.63 ) | (0.83 ) | 0.71 | 0.59 | 0.18 |
Total from investment operations | (0.31 ) | (0.60 ) | 0.82 | 0.75 | 0.36 |
Distributions to shareholders from | |||||
Net investment income | (0.31 ) | (0.25 ) | (0.14 ) | (0.17 ) | (0.19 ) |
Net realized gains | (0.08 ) | (0.47 ) | (0.58 ) | 0.00 | (0.40 ) |
Total distributions to shareholders | (0.39 ) | (0.72 ) | (0.72 ) | (0.17 ) | (0.59 ) |
Net asset value, end of period | $8.48 | $9.18 | $10.50 | $10.40 | $9.82 |
Total return2 | (3.32 )% | (6.28 )% | 8.07 % | 7.72 % | 3.84 % |
Ratios to average net assets (annualized) | |||||
Gross expenses* | 0.83 % | 0.81 % | 0.80 % | 0.80 % | 0.79 % |
Net expenses* | 0.75 % | 0.75 % | 0.75 % | 0.75 % | 0.75 % |
Net investment income | 3.67 % | 2.26 % | 1.04 % | 1.61 % | 2.15 % |
Supplemental data | |||||
Portfolio turnover rate3 | 148 % | 225 % | 206 % | 197 % | 183 % |
Net assets, end of period (000s omitted) | $17,128 | $20,647 | $24,170 | $21,256 | $16,242 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.14% |
Year ended May 31, 2022 | 0.16% |
Year ended May 31, 2021 | 0.16% |
Year ended May 31, 2020 | 0.15% |
Year ended May 31, 2019 | 0.16% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 69
Financial highlights
Spectrum Income Allocation Fund
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $9.18 | $10.46 | $10.36 | $9.81 | $10.06 |
Net investment income | 0.25 1 | 0.15 | 0.03 | 0.09 | 0.14 1 |
Net realized and unrealized gains (losses) on investments | (0.62 ) | (0.82 ) | 0.71 | 0.58 | 0.13 |
Total from investment operations | (0.37 ) | (0.67 ) | 0.74 | 0.67 | 0.27 |
Distributions to shareholders from | |||||
Net investment income | (0.25 ) | (0.14 ) | (0.06 ) | (0.12 ) | (0.12 ) |
Net realized gains | (0.08 ) | (0.47 ) | (0.58 ) | 0.00 | (0.40 ) |
Total distributions to shareholders | (0.33 ) | (0.61 ) | (0.64 ) | (0.12 ) | (0.52 ) |
Net asset value, end of period | $8.48 | $9.18 | $10.46 | $10.36 | $9.81 |
Total return2 | (4.07 )% | (6.91 )% | 7.25 % | 6.90 % | 2.89 % |
Ratios to average net assets (annualized) | |||||
Gross expenses* | 1.58 % | 1.56 % | 1.55 % | 1.55 % | 1.54 % |
Net expenses* | 1.50 % | 1.50 % | 1.50 % | 1.50 % | 1.50 % |
Net investment income | 2.92 % | 1.53 % | 0.30 % | 0.89 % | 1.41 % |
Supplemental data | |||||
Portfolio turnover rate3 | 148 % | 225 % | 206 % | 197 % | 183 % |
Net assets, end of period (000s omitted) | $115,932 | $148,281 | $196,035 | $212,465 | $237,153 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.14% |
Year ended May 31, 2022 | 0.16% |
Year ended May 31, 2021 | 0.16% |
Year ended May 31, 2020 | 0.15% |
Year ended May 31, 2019 | 0.16% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
70 | Multi-Asset Funds
Financial highlights
Spectrum Income Allocation Fund
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Institutional Class | 2023 | 2022 | 2021 | 2020 | 20191 |
Net asset value, beginning of period | $9.17 | $10.50 | $10.39 | $9.80 | $10.15 |
Net investment income | 0.34 2 | 0.20 2 | 0.19 | 0.21 | 0.15 |
Net realized and unrealized gains (losses) on investments | (0.62 ) | (0.77 ) | 0.68 | 0.57 | 0.12 |
Total from investment operations | (0.28 ) | (0.57 ) | 0.87 | 0.78 | 0.27 |
Distributions to shareholders from | |||||
Net investment income | (0.34 ) | (0.29 ) | (0.18 ) | (0.19 ) | (0.22 ) |
Net realized gains | (0.08 ) | (0.47 ) | (0.58 ) | 0.00 | (0.40 ) |
Total distributions to shareholders | (0.42 ) | (0.76 ) | (0.76 ) | (0.19 ) | (0.62 ) |
Net asset value, end of period | $8.47 | $9.17 | $10.50 | $10.39 | $9.80 |
Total return3 | (2.99 )% | (5.93 )% | 8.51 % | 8.07 % | 2.95 % |
Ratios to average net assets (annualized) | |||||
Gross expenses* | 0.51 % | 0.48 % | 0.47 % | 0.47 % | 0.46 % |
Net expenses* | 0.42 % | 0.42 % | 0.42 % | 0.42 % | 0.42 % |
Net investment income | 3.98 % | 1.98 % | 1.33 % | 1.96 % | 1.61 % |
Supplemental data | |||||
Portfolio turnover rate4 | 148 % | 225 % | 206 % | 197 % | 183 % |
Net assets, end of period (000s omitted) | $5,571 | $5,876 | $1,139 | $710 | $434 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.14% |
Year ended May 31, 2022 | 0.16% |
Year ended May 31, 2021 | 0.16% |
Year ended May 31, 2020 | 0.15% |
Year ended May 31, 20191 | 0.16% |
1 | For the period from July 31, 2018 (commencement of class operations) to May 31, 2019 |
2 | Calculated based upon average shares outstanding |
3 | Returns for periods of less than one year are not annualized. |
4 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 71
Financial highlights
Spectrum Moderate Growth Fund
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class A | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $11.63 | $13.92 | $12.64 | $11.64 | $13.27 |
Net investment income | 0.36 1 | 0.32 | 0.14 | 0.15 | 0.18 1 |
Net realized and unrealized gains (losses) on investments | (0.71 ) | (0.95 ) | 2.59 | 1.07 | (0.14 ) |
Total from investment operations | (0.35 ) | (0.63 ) | 2.73 | 1.22 | 0.04 |
Distributions to shareholders from | |||||
Net investment income | (0.44 ) | (0.32 ) | (0.15 ) | (0.21 ) | (0.23 ) |
Net realized gains | (0.33 ) | (1.34 ) | (1.30 ) | (0.01 ) | (1.44 ) |
Total distributions to shareholders | (0.77 ) | (1.66 ) | (1.45 ) | (0.22 ) | (1.67 ) |
Net asset value, end of period | $10.51 | $11.63 | $13.92 | $12.64 | $11.64 |
Total return2 | (2.76 )% | (5.66 )% | 22.56 % | 10.49 % | 1.02 % |
Ratios to average net assets (annualized) | |||||
Gross expenses* | 0.76 % | 0.74 % | 0.75 % | 0.76 % | 0.76 % |
Net expenses* | 0.75 % | 0.74 % | 0.75 % | 0.75 % | 0.75 % |
Net investment income | 3.38 % | 2.49 % | 0.96 % | 1.31 % | 1.51 % |
Supplemental data | |||||
Portfolio turnover rate3 | 65 % | 89 % | 120 % | 131 % | 126 % |
Net assets, end of period (000s omitted) | $44,966 | $46,650 | $56,004 | $46,133 | $46,380 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.14% |
Year ended May 31, 2022 | 0.14% |
Year ended May 31, 2021 | 0.15% |
Year ended May 31, 2020 | 0.16% |
Year ended May 31, 2019 | 0.17% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
72 | Multi-Asset Funds
Financial highlights
Spectrum Moderate Growth Fund
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Class C | 2023 | 2022 | 2021 | 2020 | 2019 |
Net asset value, beginning of period | $11.91 | $14.22 | $12.87 | $11.85 | $13.40 |
Net investment income | 0.29 1 | 0.24 1 | 0.03 | 0.08 | 0.11 |
Net realized and unrealized gains (losses) on investments | (0.72 ) | (1.00 ) | 2.66 | 1.06 | (0.14 ) |
Total from investment operations | (0.43 ) | (0.76 ) | 2.69 | 1.14 | (0.03 ) |
Distributions to shareholders from | |||||
Net investment income | (0.35 ) | (0.21 ) | (0.04 ) | (0.11 ) | (0.08 ) |
Net realized gains | (0.33 ) | (1.34 ) | (1.30 ) | (0.01 ) | (1.44 ) |
Total distributions to shareholders | (0.68 ) | (1.55 ) | (1.34 ) | (0.12 ) | (1.52 ) |
Net asset value, end of period | $10.80 | $11.91 | $14.22 | $12.87 | $11.85 |
Total return2 | (3.46 )% | (6.39 )% | 21.79 % | 9.58 % | 0.31 % |
Ratios to average net assets (annualized) | |||||
Gross expenses* | 1.51 % | 1.49 % | 1.50 % | 1.51 % | 1.50 % |
Net expenses* | 1.50 % | 1.49 % | 1.50 % | 1.50 % | 1.50 % |
Net investment income | 2.66 % | 1.76 % | 0.21 % | 0.57 % | 0.84 % |
Supplemental data | |||||
Portfolio turnover rate3 | 65 % | 89 % | 120 % | 131 % | 126 % |
Net assets, end of period (000s omitted) | $326,438 | $402,753 | $499,835 | $477,998 | $539,352 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.14% |
Year ended May 31, 2022 | 0.14% |
Year ended May 31, 2021 | 0.15% |
Year ended May 31, 2020 | 0.16% |
Year ended May 31, 2019 | 0.17% |
1 | Calculated based upon average shares outstanding |
2 | Total return calculations do not include any sales charges. |
3 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
Multi-Asset Funds | 73
Financial highlights
Spectrum Moderate Growth Fund
(For a share outstanding throughout each period)
Year ended May 31 | |||||
Institutional Class | 2023 | 2022 | 2021 | 2020 | 20191 |
Net asset value, beginning of period | $11.63 | $13.93 | $12.64 | $11.65 | $13.52 |
Net investment income | 0.40 2 | 0.31 2 | 0.23 | 0.25 | 0.15 |
Net realized and unrealized gains (losses) on investments | (0.71 ) | (0.90 ) | 2.55 | 1.01 | (0.33 ) |
Total from investment operations | (0.31 ) | (0.59 ) | 2.78 | 1.26 | (0.18 ) |
Distributions to shareholders from | |||||
Net investment income | (0.48 ) | (0.37 ) | (0.19 ) | (0.26 ) | (0.25 ) |
Net realized gains | (0.33 ) | (1.34 ) | (1.30 ) | (0.01 ) | (1.44 ) |
Total distributions to shareholders | (0.81 ) | (1.71 ) | (1.49 ) | (0.27 ) | (1.69 ) |
Net asset value, end of period | $10.51 | $11.63 | $13.93 | $12.64 | $11.65 |
Total return3 | (2.40 )% | (5.40 )% | 22.99 % | 10.78 % | (0.62 )% |
Ratios to average net assets (annualized) | |||||
Gross expenses* | 0.43 % | 0.41 % | 0.42 % | 0.43 % | 0.43 % |
Net expenses* | 0.42 % | 0.41 % | 0.42 % | 0.42 % | 0.42 % |
Net investment income | 3.73 % | 2.38 % | 1.32 % | 1.63 % | 1.38 % |
Supplemental data | |||||
Portfolio turnover rate4 | 65 % | 89 % | 120 % | 131 % | 126 % |
Net assets, end of period (000s omitted) | $6,715 | $7,369 | $3,443 | $1,945 | $1,067 |
* | Including net expenses allocated from the affiliated Master Portfolios, the expense ratios would be increased by the following amounts: |
Year ended May 31, 2023 | 0.14% |
Year ended May 31, 2022 | 0.14% |
Year ended May 31, 2021 | 0.15% |
Year ended May 31, 2020 | 0.16% |
Year ended May 31, 20191 | 0.16% |
1 | For the period from July 31, 2018 (commencement of class operations) to May 31, 2019 |
2 | Calculated based upon average shares outstanding |
3 | Returns for periods of less than one year are not annualized. |
4 | Portfolio turnover rate is calculated by multiplying the Fund’s ownership percentage in the respective affiliated Master Portfolio by the corresponding affiliated Master Portfolio’s purchases and sales. These purchases and sales amounts are aggregated with the direct purchases and sales in the Underlying Funds and included in the portfolio turnover calculation. |
The accompanying notes are an integral part of these financial statements.
74 | Multi-Asset Funds
Notes to financial statements
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 Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the following funds: Allspring Spectrum Aggressive Growth Fund (“Spectrum Aggressive Growth Fund”), Allspring Spectrum Conservative Growth Fund (“Spectrum Conservative Growth Fund”), Allspring Spectrum Growth Fund (“Spectrum Growth Fund”), Allspring Spectrum Income Allocation Fund (“Spectrum Income Allocation Fund”), Allspring Spectrum Moderate Growth Fund (“Spectrum Moderate Growth Fund”) (each, a “Fund”, collectively, the “Funds”). Each Fund is a diversified series of the Trust.
Each Fund is a fund-of-funds that may invest in various affiliated and unaffiliated mutual funds and exchange-traded funds (collectively, the “Underlying Funds”) to pursue its investment objective. The Underlying Funds incur separate expenses in seeking to achieve their investment objectives. Investments in affiliated mutual funds may also include investments in one or more separate diversified portfolios (each, an “affiliated Master Portfolio”, collectively, the “affiliated Master Portfolios”) of Allspring Master Trust, a registered open-end management investment company. Each affiliated Master Portfolio directly acquires portfolio securities, and each Fund investing in an affiliated Master Portfolio acquires an indirect interest in those securities. Each Fund accounts for its investments in the affiliated Master Portfolios as partnership investments and records on a daily basis its share of each affiliated Master Portfolio’s income, expense and realized and unrealized gains and losses. The financial statements for the Underlying Funds are presented in separate financial statements and may be obtained by contacting Investor Services for the affiliated mutual funds or by contacting the servicing agent of the unaffiliated mutual funds and exchange-traded funds. The financial statements of the affiliated Master Portfolios are available by visiting the SEC website at sec.gov and are filed with the SEC under Allspring Master Trust. The financial statements for all other affiliated Underlying Funds are also publicly available on the SEC website at sec.gov.
2.
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Funds, 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 Funds may deviate from this calculation time under unusual or unexpected circumstances.
Investments in the affiliated Master Portfolios are valued daily based on each Fund’s proportionate share of each affiliated Master Portfolio’s net assets, which are also valued daily.
Equity securities, exchange-traded funds 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.
Investments in underlying mutual funds (other than those listed on a foreign or domestic exchange or market) are valued at net asset per share as reported by the Underlying Funds as of the close of the regular trading on the New York Stock Exchange on each day the exchange is open for trading.
Investments which are not valued using any of 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.
Futures contracts
Futures contracts are agreements between each Fund and a counterparty to buy or sell a specific amount of a commodity, financial instrument or currency at a specified price and on a specified date. Each Fund may buy and sell futures contracts in order to gain exposure to, or protect against, changes in interest rates, security values and foreign exchange rates and is subject to interest rate risk, equity price risk and foreign currency 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
Multi-Asset Funds | 75
Notes to financial statements
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 received 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 Statements 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 Statements of Operations.
Investment transactions, income and expenses
Investments in affiliated Master Portfolios and securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.
Each Fund records on a daily basis its proportionate share of each affiliated Master Portfolio’s income, expenses and realized and unrealized gains and losses. Income from foreign securities in each affiliated Master Portfolio is recorded net of foreign taxes withheld where recovery of such taxes is not assured. Each Fund also accrues its own expenses.
Income dividends and capital gain distributions from Underlying Funds are recorded on the ex-dividend date. Capital gain distributions from Underlying Funds 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 for each Fund as follows:
Net investment income | Net realized gains | |
Spectrum Aggressive Growth Fund | Annually | Annually |
Spectrum Conservative Growth Fund | Quarterly | Annually |
Spectrum Growth Fund | Annually | Annually |
Spectrum Income Allocation Fund | Monthly | Annually |
Spectrum Moderate Growth Fund | Annually | Annually |
Federal and other taxes
Each Fund is treated as a separate entity for federal income tax purposes. Each 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.
Each 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 each 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 May 31, 2023, the aggregate cost of all investments for federal income tax purposes and the unrealized gains (losses) were as follows:
Tax cost | Gross unrealized gains | Gross unrealized losses | Net unrealized gains (losses) | |
Spectrum Aggressive Growth Fund | $408,753,985 | $60,503,551 | $(20,162,266 ) | $40,341,285 |
Spectrum Conservative Growth Fund | 270,593,118 | 187,873 | (13,640,503 ) | (13,452,630 ) |
Spectrum Growth Fund | 207,229,067 | 8,501,819 | (7,240,179 ) | 1,261,640 |
Spectrum Income Allocation Fund | 151,095,398 | 92,581 | (12,748,754 ) | (12,656,173 ) |
Spectrum Moderate Growth Fund | 384,485,179 | 7,025,699 | (13,907,693 ) | (6,881,994 ) |
Reclassifications are made to each 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
76 | Multi-Asset Funds
Notes to financial statements
assets or net asset values per share. At May 31, 2023, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statements of Assets and Liabilities:
Paid-in capital | Total distributable earnings (loss) | |
Spectrum Aggressive Growth Fund | $(28,225 ) | $28,225 |
Spectrum Conservative Growth Fund | (18,479 ) | 18,479 |
Spectrum Growth Fund | (17,523 ) | 17,523 |
Spectrum Income Allocation Fund | (9,842 ) | 9,842 |
Spectrum Moderate Growth Fund | (28,222 ) | 28,222 |
As of May 31, 2023, the following Funds had capital loss carryforwards which consist of short-term and long-term capital losses.
No expiration | ||
Short-term | Long-term | |
Spectrum Aggressive Growth Fund | $10,853,438 | $0 |
Spectrum Conservative Growth Fund | 11,468,639 | 1,157,760 |
Spectrum Growth Fund | 5,785,670 | 0 |
Spectrum Income Allocation Fund | 7,598,403 | 2,937,135 |
Spectrum Moderate Growth Fund | 14,442,031 | 0 |
Class allocations
The separate classes of shares offered by each 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 each 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). Each 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 each Fund’s assets and liabilities as of May 31, 2023:
Spectrum Aggressive Growth Fund | Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total |
Assets | ||||
Investments in: | ||||
Investment companies | $160,118,192 | $0 | $0 | $160,118,192 |
Short-term investments | ||||
Investment companies | 300,000 | 0 | 0 | 300,000 |
Investments measured at net asset value* | 288,814,249 | |||
160,418,192 | 0 | 0 | 449,232,441 | |
Futures contracts | 592,032 | 0 | 0 | 592,032 |
Total assets | $161,010,224 | $0 | $0 | $449,824,473 |
Multi-Asset Funds | 77
Notes to financial statements
Liabilities | ||||
Futures contracts | $729,203 | $0 | $0 | $729,203 |
Total liabilities | $729,203 | $0 | $0 | $729,203 |
* | Investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been categorized in the fair value hierarchy. The fair value amount presented in the table is intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Statements of Assets and Liabilities. The Fund’s investments in the affiliated Master Portfolios are valued at $288,814,249. Each affiliated Master Portfolio does not have a redemption period notice, can be redeemed daily and does not have any unfunded commitments. |
Spectrum Conservative Growth Fund | Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total |
Assets | ||||
Investments in: | ||||
Investment companies | $121,926,802 | $0 | $0 | $121,926,802 |
Short-term investments | ||||
Investment companies | 200,000 | 0 | 0 | 200,000 |
Investments measured at net asset value* | 133,843,864 | |||
122,126,802 | 0 | 0 | 255,970,666 | |
Futures contracts | 1,891,205 | 0 | 0 | 1,891,205 |
Total assets | $124,018,007 | $0 | $0 | $257,861,871 |
Liabilities | ||||
Futures contracts | $721,383 | $0 | $0 | $721,383 |
Total liabilities | $721,383 | $0 | $0 | $721,383 |
* | Investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been categorized in the fair value hierarchy. The fair value amount presented in the table is intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Statements of Assets and Liabilities. The Fund’s investments in the affiliated Master Portfolios are valued at $133,843,864. Each affiliated Master Portfolio does not have a redemption period notice, can be redeemed daily and does not have any unfunded commitments. |
Spectrum Growth Fund | Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total |
Assets | ||||
Investments in: | ||||
Investment companies | $93,107,745 | $0 | $0 | $93,107,745 |
Short-term investments | ||||
Investment companies | 200,000 | 0 | 0 | 200,000 |
Investments measured at net asset value* | 114,189,426 | |||
93,307,745 | 0 | 0 | 207,497,171 | |
Futures contracts | 1,517,697 | 0 | 0 | 1,517,697 |
Total assets | $94,825,442 | $0 | $0 | $209,014,868 |
Liabilities | ||||
Futures contracts | $524,161 | $0 | $0 | $524,161 |
Total liabilities | $524,161 | $0 | $0 | $524,161 |
* | Investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been categorized in the fair value hierarchy. The fair value amount presented in the table is intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Statements of Assets and Liabilities. The Fund’s investments in the affiliated Master Portfolios are valued at $114,189,426. Each affiliated Master Portfolio does not have a redemption period notice, can be redeemed daily and does not have any unfunded commitments. |
78 | Multi-Asset Funds
Notes to financial statements
Spectrum Income Allocation Fund | Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total |
Assets | ||||
Investments in: | ||||
Investment companies | $52,239,017 | $0 | $0 | $52,239,017 |
Short-term investments | ||||
Investment companies | 200,000 | 0 | 0 | 200,000 |
Investments measured at net asset value* | 85,387,072 | |||
52,439,017 | 0 | 0 | 137,826,089 | |
Futures contracts | 1,004,027 | 0 | 0 | 1,004,027 |
Total assets | $53,443,044 | $0 | $0 | $138,830,116 |
Liabilities | ||||
Futures contracts | $390,891 | $0 | $0 | $390,891 |
Total liabilities | $390,891 | $0 | $0 | $390,891 |
* | Investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been categorized in the fair value hierarchy. The fair value amount presented in the table is intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Statements of Assets and Liabilities. The Fund’s investments in the affiliated Master Portfolios are valued at $85,387,072. Each affiliated Master Portfolio does not have a redemption period notice, can be redeemed daily and does not have any unfunded commitments. |
Spectrum Moderate Growth Fund | Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total |
Assets | ||||
Investments in: | ||||
Investment companies | $178,177,229 | $0 | $0 | $178,177,229 |
Short-term investments | ||||
Investment companies | 250,000 | 0 | 0 | 250,000 |
Investments measured at net asset value* | 197,494,802 | |||
178,427,229 | 0 | 0 | 375,922,031 | |
Futures contracts | 2,751,387 | 0 | 0 | 2,751,387 |
Total assets | $181,178,616 | $0 | $0 | $378,673,418 |
Liabilities | ||||
Futures contracts | $1,070,233 | $0 | $0 | $1,070,233 |
Total liabilities | $1,070,233 | $0 | $0 | $1,070,233 |
* | Investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been categorized in the fair value hierarchy. The fair value amount presented in the table is intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Statements of Assets and Liabilities. The Fund’s investments in the affiliated Master Portfolios are valued at $197,494,802. Each affiliated Master Portfolio does not have a redemption period notice, can be redeemed daily and does not have any unfunded commitments. |
Futures contracts are reported at their cumulative unrealized gains (losses) at measurement date as reported in the table following each Portfolio of Investments. For futures contracts, the current day’s variation margin is reported on the Statements of Assets and Liabilities. All other assets and liabilities are reported at their market value at measurement date.
For the year ended May 31, 2023, the Funds did not have any transfers into/out of Level 3.
Multi-Asset Funds | 79
Notes to financial statements
The investment objective of each affiliated Master Portfolio is as follows:
Affiliated Master Portfolio | Investment objective |
Allspring Bloomberg US Aggregate ex-Corporate Portfolio | Seeks to replicate the total return of the Bloomberg U.S. Aggregate ex-Corporate Index, before fee and expenses |
Allspring Core Bond Portfolio | Seeks total return, consisting of income and capital appreciation |
Allspring Disciplined Large Cap Portfolio | Seeks long-term capital appreciation |
Allspring Emerging Growth Portfolio | Seeks long-term capital appreciation |
Allspring Factor Enhanced Emerging Markets Equity Portfolio | Seeks long-term capital appreciation |
Allspring Factor Enhanced International Equity Portfolio | Seeks long-term capital appreciation |
Allspring Factor Enhanced U.S. Large Cap Equity Portfolio | Seeks long-term capital appreciation |
Allspring Factor Enhanced U.S. Small Cap Equity Portfolio | Seeks long-term capital appreciation |
Allspring Real Return Portfolio | Seeks returns that exceed the rate of inflation over the long-term |
Allspring Small Company Value Portfolio | Seeks long-term capital appreciation |
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 each 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 each Fund, supervising the subadviser and providing fund-level administrative services in connection with each 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 each Fund’s average daily net assets:
Average daily net assets | Management fee |
First $1 billion | 0.250 % |
Next $4 billion | 0.225 |
Next $5 billion | 0.190 |
Over $10 billion | 0.180 |
For the year ended May 31, 2023, the management fee was equivalent to an annual rate of 0.25% of each Fund’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to each Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Global Investments, LLC, an affiliate of Allspring Funds Management and a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, is the subadviser to each Fund and is entitled to receive an annual rate of 0.15% of each Fund average daily net assets.
Allspring Funds Management also serves as the adviser to each affiliated Master Portfolio and is entitled to receive a fee from each affiliated Master Portfolio for those services.
Administration fees
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to each 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 each Fund. When each class of each Fund has exceeded its expense cap, Allspring Funds Management
80 | Multi-Asset Funds
Notes to financial statements
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 September 30, 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 May 31, 2023, the contractual expense caps are as follows:
EXPENSE RATIO CAPS | |
Class A | 0.75 % |
Class C | 1.50 |
Administrator Class | 0.67 |
Institutional Class | 0.42 |
Distribution fee
The Trust has adopted a Distribution Plan for Class C shares of the applicable Funds 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 of each Fund, 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 May 31, 2023, Allspring Funds Distributor received front-end sales charges and/or contingent deferred sales charges from the following Funds:
Front end sales-charges | Contingent Deferred Sales Charges | ||
Class A | Class A | Class C | |
Spectrum Aggressive Growth Fund | $3,816 | $36 | $25 |
Spectrum Conservative Growth Fund | 673 | 0 | 17 |
Spectrum Growth Fund | 2,670 | 0 | 46 |
Spectrum Income Allocation Fund | 999 | 0 | 0 |
Spectrum Moderate Growth Fund | 2,004 | 0 | 19 |
Shareholder servicing fees
The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A, Class C and Administrator Class of each applicable Fund 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.
5.
INVESTMENT PORTFOLIO TRANSACTIONS
Each Fund seeks to achieve its investment objective by investing in various affiliated Master Portfolios and Underlying Funds. Purchases and sales related to these investments have been calculated by aggregating the results of multiplying each Fund’s ownership percentage in the respective affiliated Master Portfolio at the end of the period by the corresponding affiliated Master Portfolio’s purchases and sales. Purchases and sales in Underlying Funds in which the Fund invests are actual aggregate purchases and sales of those investments. Purchases and sales of investments, excluding short-term securities, for the year ended May 31, 2023 were as follows:
Purchases at cost | Sales proceeds | |||
U.S. government | Non-U.S. government | U.S. government | Non-U.S. government | |
Spectrum Aggressive Growth Fund | $0 | $170,899,334 | $0 | $234,826,554 |
Spectrum Conservative Growth Fund | 121,202,496 | 131,560,528 | 137,660,602 | 141,147,334 |
Spectrum Growth Fund | 29,178,817 | 92,950,360 | 32,431,289 | 112,293,898 |
Spectrum Income Allocation Fund | 129,235,858 | 94,740,708 | 145,903,702 | 97,788,262 |
Spectrum Moderate Growth Fund | 84,528,471 | 173,230,571 | 95,325,124 | 206,075,252 |
Multi-Asset Funds | 81
Notes to financial statements
6.
DERIVATIVE TRANSACTIONS
During the year ended May 31, 2023, the following Fund entered into futures contracts to gain market exposure to certain asset classes consistent with an active asset allocation strategy. The volume of each Fund’s futures contracts during the year ended May 31, 2023 was as follows:
Long contracts | Short contracts | |
Spectrum Aggressive Growth Fund | $34,047,300 | $65,656,534 |
Spectrum Conservative Growth Fund | 48,920,716 | 45,203,220 |
Spectrum Growth Fund | 37,493,631 | 40,669,757 |
Spectrum Income Allocation Fund | 27,116,656 | 23,790,303 |
Spectrum Moderate Growth Fund | 74,180,330 | 75,339,281 |
A summary of the location of derivative instruments on the financial statements by primary risk exposure is outlined in the following tables.
The fair value of derivative instruments as of May 31, 2023 by primary risk type on the Statements of Assets and Liabilities was as follows for the Spectrum Aggressive Growth Fund:
Equity risk | Foreign currency risk | Total | |
Asset derivatives | |||
Futures contracts | $592,032 * | $0 * | $592,032 |
Liability derivatives | |||
Futures contracts | $3,479 * | $725,724 * | $729,203 |
* | Amount represents the cumulative unrealized gains (losses) as reported in the table following the Portfolio of Investments. For futures contracts, only the current day’s variation margin as of May 31, 2023 is reported separately on the Statements of Assets and Liabilities. |
The effect of derivative instruments on the Statements of Operations for the year ended May 31, 2023 was as follows:
Equity risk | Foreign currency risk | Total | |
Net realized gains (losses) on derivatives | |||
Futures contracts | $(1,295,265 ) | $(1,968,706 ) | $(3,263,971 ) |
Net change in unrealized gains (losses) on derivatives | |||
Futures contracts | $579,641 | $(854,269 ) | $(274,628 ) |
The fair value of derivative instruments as of May 31, 2023 by primary risk type on the Statements of Assets and Liabilities was as follows for Spectrum Conservative Growth Fund:
Interest rate risk | Equity risk | Foreign currency risk | Total | |
Asset derivatives | ||||
Futures contracts | $105,508 * | $1,785,697 * | $0 * | $1,891,205 |
Liability derivatives | ||||
Futures contracts | $96,439 * | $212,063 * | $412,881 * | $721,383 |
* | Amount represents the cumulative unrealized gains (losses) as reported in the table following the Portfolio of Investments. For futures contracts, only the current day’s variation margin as of May 31, 2023 is reported separately on the Statements of Assets and Liabilities. |
The effect of derivative instruments on the Statements of Operations for the year ended May 31, 2023 was as follows:
Interest rate risk | Equity risk | Foreign currency risk | Total | |
Net realized gains (losses) on derivatives | ||||
Futures contracts | $(933,608 ) | $(1,513,752 ) | $(1,204,484 ) | $(3,651,844 ) |
Net change in unrealized gains (losses) on derivatives | ||||
Futures contracts | $(1,772 ) | $1,966,738 | $(490,676 ) | $1,474,290 |
82 | Multi-Asset Funds
Notes to financial statements
The fair value of derivative instruments as of May 31, 2023 by primary risk type on the Statements of Assets and Liabilities was as follows for Spectrum Growth Fund:
Interest rate risk | Equity risk | Foreign currency risk | Total | |
Asset derivatives | ||||
Futures contracts | $84,015 * | $1,433,682 * | $0 * | $1,517,697 |
Liability derivatives | ||||
Futures contracts | $77,151 * | $110,749 * | $336,261 * | $524,161 |
* | Amount represents the cumulative unrealized gains (losses) as reported in the table following the Portfolio of Investments. For futures contracts, only the current day’s variation margin as of May 31, 2023 is reported separately on the Statements of Assets and Liabilities. |
The effect of derivative instruments on the Statements of Operations for the year ended May 31, 2023 was as follows:
Interest rate risk | Equity risk | Foreign currency risk | Total | |
Net realized gains (losses) on derivatives | ||||
Futures contracts | $(334,356 ) | $(1,557,953 ) | $(934,183 ) | $(2,826,492 ) |
Net change in unrealized gains (losses) on derivatives | ||||
Futures contracts | $127 | $1,741,433 | $(399,461 ) | $1,342,099 |
The fair value of derivative instruments as of May 31, 2023 by primary risk type on the Statements of Assets and Liabilities was as follows for Spectrum Income Allocation Fund:
Interest rate risk | Equity risk | Foreign currency risk | Total | |
Asset derivatives | ||||
Futures contracts | $56,100 * | $947,927 * | $0 * | $1,004,027 |
Liability derivatives | ||||
Futures contracts | $52,148 * | $119,449 * | $219,294 * | $390,891 |
* | Amount represents the cumulative unrealized gains (losses) as reported in the table following the Portfolio of Investments. For futures contracts, only the current day’s variation margin as of May 31, 2023 is reported separately on the Statements of Assets and Liabilities. |
The effect of derivative instruments on the Statements of Operations for the year ended May 31, 2023 was as follows:
Interest rate risk | Equity risk | Foreign currency risk | Total | |
Net realized gains (losses) on derivatives | ||||
Futures contracts | $70,014 | $(715,868 ) | $(656,667 ) | $(1,302,521 ) |
Net change in unrealized gains (losses) on derivatives | ||||
Futures contracts | $(1,390 ) | $967,864 | $(267,174 ) | $699,300 |
The fair value of derivative instruments as of May 31, 2023 by primary risk type on the Statements of Assets and Liabilities was as follows for Spectrum Moderate Growth Fund:
Interest rate risk | Equity risk | Foreign currency risk | Total | |
Asset derivatives | ||||
Futures contracts | $152,957 * | $2,598,430 * | $0 * | $2,751,387 |
Liability derivatives | ||||
Futures contracts | $141,086 * | $317,179 * | $611,968 * | $1,070,233 |
* | Amount represents the cumulative unrealized gains (losses) as reported in the table following the Portfolio of Investments. For futures contracts, only the current day’s variation margin as of May 31, 2023 is reported separately on the Statements of Assets and Liabilities. |
Multi-Asset Funds | 83
Notes to financial statements
The effect of derivative instruments on the Statements of Operations for the year ended May 31, 2023 was as follows:
Interest rate risk | Equity risk | Foreign currency risk | Total | |
Net realized gains (losses) on derivatives | ||||
Futures contracts | $(894,995 ) | $(2,664,963 ) | $(1,730,960 ) | $(5,290,918 ) |
Net change in unrealized gains (losses) on derivatives | ||||
Futures contracts | $(2,801 ) | $2,982,654 | $(728,786 ) | $2,251,067 |
7.
ACQUISITION
After the close of business on February 4, 2022, Spectrum Aggressive Growth Fund acquired the net assets of Allspring Diversified Equity Fund. The purpose of the transaction was to combine two funds with similar investment objectives and strategies. Shareholders holding Class A, Class C and Administrator Class shares of Allspring Diversified Equity Fund received Class A, Class C and Administrator Class shares, respectively, of Spectrum Aggressive Growth Fund in the reorganization. The acquisition was accomplished by a tax-free exchange of all of the shares of Allspring Diversified Equity Fund for 8,155,750 shares of Spectrum Aggressive Growth Fund valued at $163,825,191 at an exchange ratio of 0.78, 0.56 and 0.79 for Class A, Class C, and Administrator Class shares, respectively. The investment portfolio of Allspring Diversified Equity Fund with a fair value of $112,534,752, identified cost of $82,610,160 and unrealized gains (losses) of $29,924,592 at February 4, 2022 were the principal assets acquired by Spectrum Aggressive Growth Fund. The aggregate net assets of Allspring Diversified Equity Fund and Spectrum Aggressive Growth Fund immediately prior to the acquisition were $163,825,191 and $426,061,071, respectively. The aggregate net assets of Spectrum Aggressive Growth Fund immediately after the acquisition were $589,886,262. For financial reporting purposes, assets received and shares issued by Spectrum Aggressive Growth Fund were recorded at fair value; however, the cost basis of the investments received from Allspring Diversified Equity Fund was carried forward to align with ongoing reporting of Spectrum Aggressive Growth Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.
Assuming the acquisition had been completed June 1, 2021, the beginning of the annual reporting period for Spectrum Aggressive Growth Fund, the pro forma results of operations for the year ended May 31, 2022 would have been as follows (unaudited):
Net investment income | $1,889,609 |
Net realized and unrealized losses on investments | (64,314,900 ) |
Net decrease in net assets resulting from operations | $(62,425,291 ) |
8.
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 each 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 each 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 May 31, 2023, there were no borrowings by each Fund under the agreement.
9.
DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid during the years ended May 31, 2023 and May 31, 2022 were as follows:
Ordinary income | Long-term capital gain | Tax basis return of capital | ||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
Spectrum Aggressive Growth Fund | $3,192,434 | $26,022,522 | $16,029,540 | $31,554,038 | $2,290,482 | $0 |
Spectrum Conservative Growth Fund | 9,254,849 | 20,737,292 | 6,564,534 | 13,166,727 | 0 | 0 |
Spectrum Growth Fund | 6,400,314 | 19,119,343 | 7,793,254 | 16,245,108 | 0 | 0 |
Spectrum Income Allocation Fund | 4,605,526 | 8,811,314 | 1,342,006 | 4,051,788 | 0 | 0 |
Spectrum Moderate Growth Fund | 13,035,610 | 29,731,201 | 11,887,941 | 28,939,078 | 0 | 0 |
84 | Multi-Asset Funds
Notes to financial statements
As of May 31, 2023, the components of distributable earnings on a tax basis were as follows:
Undistributed ordinary income | Unrealized gains (losses) | Capital loss carryforward | |
Spectrum Aggressive Growth Fund | $0 | $40,341,285 | $(10,853,438 ) |
Spectrum Conservative Growth Fund | 1,393,675 | (13,452,630 ) | (12,626,399 ) |
Spectrum Growth Fund | 645,281 | 1,261,640 | (5,785,670 ) |
Spectrum Income Allocation Fund | 411,792 | (12,656,173 ) | (10,535,538 ) |
Spectrum Moderate Growth Fund | 879,596 | (6,881,994 ) | (14,442,031 ) |
10.
INDEMNIFICATION
Under each 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 each Fund. Each Fund has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under each 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, each Fund may enter into contracts with service providers that contain a variety of indemnification clauses. Each Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against each Fund and, therefore, cannot be estimated.
Multi-Asset Funds | 85
Report of independent registered public accounting firm
To the Shareholders of the Funds and Board of Trustees
Allspring Funds Trust:
Allspring Funds Trust:
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of Allspring Spectrum Aggressive Growth Fund, Allspring Spectrum Conservative Growth Fund, Allspring Spectrum Growth Fund, Allspring Spectrum Income Allocation Fund and Allspring Spectrum Moderate Growth Fund (collectively, the Funds), five of the funds constituting Allspring Funds Trust, including the portfolios of investments, as of May 31, 2023, the related statements 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 Funds as of May 31, 2023, the results of their operations for the year then ended, the changes in their 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 Funds’ 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 Funds 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 May 31, 2023, by correspondence with the custodian, transfer agents 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
July 27, 2023
86 | Multi-Asset Funds
Other information (unaudited)
Other information
Tax information
For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, the percentage of ordinary income dividends qualifying for the corporate dividends-received deduction was as follows for the fiscal year ended May 31, 2023:
Dividends-received deduction | |
Spectrum Aggressive Growth Fund | 69 % |
Spectrum Conservative Growth Fund | 9 |
Spectrum Growth Fund | 19 |
Spectrum Income Allocation Fund | 4 |
Spectrum Moderate Growth Fund | 15 |
Pursuant to Section 852 of the Internal Revenue Code, the following amounts were designated as a 20% rate gain distribution for the fiscal year ended May 31, 2023:
20% rate gain distribution | |
Spectrum Aggressive Growth Fund | $16,029,540 |
Spectrum Conservative Growth Fund | 6,564,534 |
Spectrum Growth Fund | 7,793,254 |
Spectrum Income Allocation Fund | 1,342,006 |
Spectrum Moderate Growth Fund | 11,887,941 |
Pursuant to Section 854 of the Internal Revenue Code, the following amounts of income dividends paid during the fiscal year ended May 31, 2023 have been designated as qualified dividend income (QDI):
QDI | |
Spectrum Aggressive Growth Fund | $4,416,020 |
Spectrum Conservative Growth Fund | 1,504,671 |
Spectrum Growth Fund | 2,235,149 |
Spectrum Income Allocation Fund | 300,668 |
Spectrum Moderate Growth Fund | 3,598,625 |
For the fiscal year ended May 31, 2023, the following amounts have been designated as interest-related dividends for nonresident alien shareholders pursuant to Section 871 of the Internal Revenue Code:
Interest-related dividends | |
Spectrum Aggressive Growth Fund | $45,971 |
Spectrum Conservative Growth Fund | 1,728,869 |
Spectrum Growth Fund | 835,052 |
Spectrum Income Allocation Fund | 1,079,869 |
Spectrum Moderate Growth Fund | 1,824,368 |
For the fiscal year ended May 31, 2023, the percentage of ordinary income distributed which was derived from interest on U.S. government securities was as follows:
% of U.S. government income | |
Spectrum Aggressive Growth Fund | 2 % |
Spectrum Conservative Growth Fund | 8 |
Spectrum Growth Fund | 8 |
Spectrum Income Allocation Fund | 9 |
Spectrum Moderate Growth Fund | 8 |
Multi-Asset Funds | 87
Other information (unaudited)
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
Each 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.
88 | Multi-Asset Funds
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 128 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 |
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 |
1
The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by call 1-800-222-8222 or by visiting the website at allspringglobal.com.
Multi-Asset Funds | 89
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 |
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. |
90 | Multi-Asset Funds
Other information (unaudited)
Officers1
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 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 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.
Multi-Asset Funds | 91
Other information (unaudited)
Board consideration of investment management and sub-advisory agreements:
Allspring Spectrum Aggressive Growth Fund, Allspring Spectrum Conservative Growth Fund, Allspring Spectrum Growth Fund, Allspring Spectrum Income Allocation Fund, and Allspring Spectrum Moderate Growth Fund
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (the “Board”) of Allspring Funds Trust (the “Trust”) must determine annually whether to approve the continuation of the Trust’s investment management and sub-advisory agreements. In this regard, at a Board meeting held on May 15-17, 2023 (the “Meeting”), the Board, all the members of which have no direct or indirect interest in the investment management and sub-advisory agreements and are not “interested persons” of the Trust, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for each of the funds of the Trust identified above (each, a “Fund” and collectively, the “Funds”): (i) an investment management agreement (the “Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Allspring Global Investments, LLC (the “Sub-Adviser”), an affiliate of Allspring Funds Management. The Management Agreement and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
At the Meeting, the Board considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at a Board meeting held in April 2023, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Board has adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Board in the discharge of its duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
The Board noted that it initially approved the Advisory Agreements at a Board meeting held in May 2021, each for a two-year term, in advance of the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC,1 a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. (the “Transaction”). The Trustees also noted that, while they did not specifically consider the continuation of the Advisory Agreements in 2022 as a result of the two-year term that was approved in 2021, the Trustees received and considered certain information at a Board meeting held in April 2022 that was applicable to the Advisory Agreements, including an overview and financial review of the Allspring Global Investments business, information regarding certain ancillary agreements that were approved by the Board at the April 2022 Board meeting, and comparative data regarding Fund fees and expenses.
In providing information to the Board, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Board’s annual contract renewal process earlier in 2023. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Board considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Board reviewed reports of Allspring Funds Management at each of its quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Board and the teams mentioned above confer with portfolio managers at various times throughout the year. The Board did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term. The Board considered the approval of the Advisory Agreements for the Funds as part of its consideration of agreements for funds across the complex, but its approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Board in support of its approvals.
Nature, Extent, and Quality of Services
The Board received and considered various information regarding the nature, extent, and quality of services provided to the Funds by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary
1
The trade name for the asset management firm that includes Allspring Funds Management and the Sub-Adviser is “Allspring Global Investments.”
92 | Multi-Asset Funds
Other information (unaudited)
of investments made in the Allspring Global Investments business. The Board also considered information about retention arrangements with respect to key personnel of Allspring Global Investments that were put in place in connection with the Transaction. The Board took into account information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the Transaction under a transition services agreement and the anticipated timeline for exiting the transition services agreement. In addition, the Board received and considered information about the full range of services provided to the Funds by Allspring Funds Management and its affiliates.
The Board considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Funds. The Board evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
The Board further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Board received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, and Allspring Funds Management’s role as administrator of the Funds’ liquidity risk management program, and the Funds’ derivatives risk management program. The Board also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund Investment Performance and Expenses
The Board considered the investment performance results for each of the Funds over various time periods ended December 31, 2022. The Board considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to each respective Fund (each, a “Universe”), and in comparison to each Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the mutual funds in each performance Universe.
The Board noted that the investment performance of each Fund (Class A) relative to its respective Universe was as follows: (i) the investment performance of the Allspring Spectrum Aggressive Growth Fund was higher than the average investment performance of its Universe for all periods under review, except the one-year period was lower than the average investment performance of the Universe; (ii) the investment performance of the Allspring Spectrum Conservative Growth Fund was lower than the average investment performance of the Universe for all periods under review, except the three-year period was in-range of the average investment performance of the Universe; (iii) the investment performance of the Allspring Spectrum Growth Fund was higher than the average investment performance of the Universe for all periods under review, except the one-year period was lower than the average investment performance of the Universe; (iv) the investment performance of the Allspring Spectrum Income Allocation Fund was higher than or in range of the average investment performance of the Universe for all periods under review, except the ten-year period was lower than the average investment performance of the Universe; and (v) the investment performance of the Allspring Spectrum Moderate Growth Fund was in range of the average investment performance of the Universe for the one- and three-year periods under review and lower than the average investment performance of the Universe for the five- and ten-year periods under review.
The Board also noted that investment performance of each Fund (Class A) relative to its respective benchmark index was as follows: (i) the investment performance of the Allspring Spectrum Aggressive Growth Fund was higher than or in range of its benchmark index, the Spectrum Aggressive Growth Blended Index, for the three- and five-year periods under review and lower than its benchmark index for the one- and ten-year periods under review; (ii) the investment performance of the Allspring Spectrum Conservative Growth Fund was higher than or in range of its benchmark index, the Spectrum Conservative Growth Blended Index, for the three- and five-year periods under review and lower than its benchmark index for the one- and ten-year periods under review; (iii) the investment performance of the Allspring Spectrum Growth Fund was higher than or in range of its benchmark index, the Spectrum Growth Blended Index, for all periods under review, except the one-year period was lower than the investment performance of the benchmark index; (iv) the investment performance of the Allspring Spectrum Income Allocation Fund was higher than or in range of its benchmark index, the Spectrum Income Allocation Blended Index, for all periods under review, except the ten-year period was lower than the investment performance of the benchmark index; and (v) the investment performance of the Allspring Spectrum Moderate Growth Fund was higher than or in range of its benchmark index, the Spectrum Moderate Growth Blended Index, for all periods under review, except the one-year period was lower than the investment performance of the benchmark index.
The Board received information concerning, and discussed factors contributing to, the underperformance of the Allspring Spectrum Income Allocation Fund for the periods identified above. The Board took note of the explanations for the underperformance relative to the Universe and benchmark index for the periods identified above, including with respect to investment decisions and market factors that affected the Fund’s investment performance.
The Board also received and considered information regarding each Fund’s net operating expense ratios and their various components, including actual management fees, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Board considered these ratios for each Fund in comparison to the median ratios of funds in class-specific expense groups that were determined by Broadridge to be similar to each Fund (the “Groups”). The Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Groups and an explanation of how funds comprising expense groups and their expense ratios may vary from year-to-year.
Multi-Asset Funds | 93
Other information (unaudited)
Based on the Broadridge reports, the Board noted that the net operating expense ratios of each of the Funds were lower than, equal to, or in range of the median net operating expense ratio of each Fund’s respective expense Group for each share class. The Board noted that the Funds invest in both affiliated and unaffiliated underlying mutual funds, while most of the funds included in each expense Group, and all of the funds identified by Allspring Funds Management as being in a competitor sub-group, invest only in affiliated funds. The Board also considered that the Funds are designed to offer exposure to a wide range of investment styles, including alternatives, while maintaining a low investment minimum. The Board also noted that Allspring Funds Management had agreed to reduce the net operating expense caps for the Funds’ Class A shares.
The Board took into account each Fund’s investment performance and expense information provided to it among the factors considered in deciding to re-approve the Advisory Agreements.
Investment Management and Sub-Advisory Fee Rates
The Board reviewed and considered the contractual fee rates payable by each Fund to Allspring Funds Management under the Management Agreement, as well as the contractual fee rates payable by each Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which include, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rates”). The Board also reviewed and considered the contractual investment sub-advisory fee rates that are payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services. It was noted that advisory fee waivers, if any, are at the fund level and not class level.
Among other information reviewed by the Board was a comparison of each Fund’s Management Rates with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Board noted that the Management Rates of each Fund were in range of or equal to the sum of these average rates for the Fund’s expense Groups for all share classes except for the Class A shares of the Allspring Spectrum Conservative Growth Fund, the Allspring Spectrum Growth Fund, and the Allspring Spectrum Moderate Growth Fund, which were higher than the sum of the average rates.
The Board also received and considered information about the portion of the total management fee that was retained by Allspring Funds Management after payment of the fee to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of this amount, the Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services. Given the affiliation between Allspring Funds Management and the Sub-Adviser, the Board ascribed limited relevance to the allocation of fees between them.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board determined that the compensation payable to Allspring Funds Management under the Management Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
Profitability
The Board received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole. The Board noted that the Sub-Adviser’s profitability information with respect to providing services to the Funds and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses and differences in how Allspring Global Investments calculates its pre-tax profit metric versus the methodology used when Allspring Funds Management was part of Wells Fargo. It was noted that the impact of such differences had only minor impact on the financial results presented. Among other things, the Board noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Based on its review, the Board did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Funds to be at a level that would prevent it from approving the continuation of the Advisory Agreements.
Economies of Scale
The Board received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Funds, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with Fund shareholders. The Board noted the existence of breakpoints in each Fund’s management fee structure, which operate generally to reduce the Fund’s expense ratios as the Fund grows in size, and the size of each Fund in relation to such breakpoints. The Board considered that in addition to management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways, including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
94 | Multi-Asset Funds
Other information (unaudited)
The Board concluded that Allspring Funds Management’s arrangements with respect to the Funds, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Funds and their shareholders.
Other Benefits to Allspring Funds Management and the Sub-Adviser
The Board received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, as a result of their relationships with the Funds. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Funds and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Funds. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it.
The Board also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser and fees earned in the past by Allspring Funds Management and the Sub-Adviser from managing a private investment vehicle for the fund complex’s securities lending collateral.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board did not find that any ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, were unreasonable.
Conclusion
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term.
Multi-Asset Funds | 95
Other information (unaudited)
Liquidity risk management program
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Allspring Funds Trust (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) on behalf of each of its series (other than the series that operate as money market funds), including each Fund, which is reasonably designed to assess and manage each Fund’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that each Fund is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund. The Trust’s Board of Trustees (the “Board”) previously approved the designation of Allspring Funds Management, LLC (“Allspring Funds Management”), each Fund’s investment manager, to administer the Program, and Allspring Funds Management has established a Liquidity Risk Management Council (the “Council”) composed of personnel from multiple departments within Allspring Funds Management and its affiliates to assist Allspring Funds Management in the administration of the Program.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence each Fund’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of each Fund’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent each Fund does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of each Fund’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if each Fund has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of each Fund’s “highly liquid investments” below its HLIM; and (6) periodic reporting to the Board.
At a meeting of the Board held on May 16-17, 2023, the Board received and reviewed a written report (the “Report”) from Allspring Funds Management that, among other things, addressed the operation of the Program and assessed its adequacy and effectiveness for the period from January 1, 2022 through December 31, 2022 (the “Reporting Period”). The Report noted significant liquidity events impacting the Funds related to extended foreign market holidays as well as the difficulty of trading and settlement of most Russia-related securities due to sanctions activity. The Report noted that there were no material changes to the Program during the Reporting Period.
Allspring Funds Management determined in the Report that the Program has been implemented and operates effectively to manage each Fund’s, including the Fund’s, liquidity risk, and Allspring Funds Management continues to believe that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to each Fund’s liquidity developments.
There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to each Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other risks to which an investment in the Fund may be subject.
96 | Multi-Asset Funds
For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Funds’ 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 Allspring Funds. 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 Funds’ 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-06072023-vbb3a7wv 07-23
AR4330 05-23
AR4330 05-23
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 May 31, 2023 | Fiscal year ended May 31, 2022 | |||||||
Audit fees | $ | 374,180 | $ | 339,920 | ||||
Audit-related fees (1,2) | — | 12,800 | ||||||
Tax fees (3) | 71,900 | 69,950 | ||||||
All other fees | — | — | ||||||
|
|
|
| |||||
| $ | 446,080 | $ | 422,670 | |||||
| (1) | Amount represents fees related to the merger of Allspring International Value Fund into Allspring International Equity Fund on April 23, 2021. |
| (2) | Amount represents fees related to the merger of Allspring Diversified Equity Fund into Allspring Spectrum Aggressive Growth Fund on February 4, 2022. |
| (3) | 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.
3
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.
(i) Not applicable.
(j) Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. INVESTMENTS
A Portfolio of Investments for the 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.
4
(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. | |
| (a)(3) | Not applicable. | |
| (a)(4) | Not applicable. | |
| (b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
5
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: July 27, 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: July 27, 2023 | ||
| By: | /s/ Jeremy DePalma | |
| Jeremy DePalma | ||
| Treasurer | ||
| Date: July 27, 2023 | ||