UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-09255
Allspring Variable 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: December 31
Registrant is making a filing for 6 of its series: Allspring VT Discovery All Cap Growth Fund, Allspring VT Discovery SMID Cap Growth Fund, Allspring VT Index Asset Allocation Fund, Allspring VT International Equity Fund, Allspring VT Opportunity Fund and Allspring VT Small Cap Growth Fund
Date of reporting period: June 30, 2023
ITEM 1. REPORT TO STOCKHOLDERS
Allspring VT Discovery All Cap Growth Fund
(formerly, Allspring VT Omega Growth Fund)
Semi-Annual Report
June 30, 2023
Contents
The views expressed and any forward-looking statements are as of June 30, 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 VT Discovery All Cap Growth Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this semi-annual report for the Allspring VT Discovery All Cap Growth Fund for the six-month period that ended June 30, 2023. Effective May 1, 2023, the Fund changed its name from Allspring VT Omega Growth Fund to Allspring VT Discovery All Cap Growth Fund. Globally, stocks and bonds rebounded after a challenging period despite ongoing volatility. While navigating persistently high inflation and the impact of ongoing aggressive central bank rate hikes, markets rallied on signs of gradually declining inflation, anticipation of an end to the central bank monetary tightening cycle, and the positive impact of China removing its strict COVID-19 lockdowns. For the six-month period, domestic U.S. and global stocks had strong results while bonds had more muted gains. After suffering deep and broad losses through 2022, bonds now benefit from a base of higher yields that can help generate higher income. However, ongoing rate hikes were a headwind during the six-month period.
For the period, U.S. stocks, based on the S&P 500 Index,1 returned 16.89%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 gained 9.47% while the MSCI EM Index (Net) (USD)3 returned 4.89%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned 2.09%, the Bloomberg Global Aggregate ex-USD (unhedged) Index5 gained 0.83%, the Bloomberg Municipal Bond Index6 gained 2.67%, and the ICE BofA U.S. High Yield Index7 returned 5.45%.
Despite high inflation and central bank rate hikes, markets rallied.
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 Federal Reserve (Fed) and on how many more rate hikes remain in this tightening cycle. The 0.25% federal funds rate hike announced in January was the Fed’s smallest rate increase since March 2022.
Financial markets declined in February as investors responded unfavorably to resilient economic data. The takeaway: Central banks would 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 was not falling quickly enough for the Fed, which raised interest rates by 0.25% in early February. Meanwhile, the Bank of England and the European Central Bank (ECB) both raised rates by 0.50%.
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 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 (unhedged) Index 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 VT Discovery All Cap Growth Fund
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.
June featured the Fed’s first pause on interest rate hikes since March 2022, when it began its aggressive campaign to rein in inflation. However, the core U.S. Consumer Price Index (CPI)2, excluding food and energy prices, while continuing to decline, remained stubbornly high in June, at 4.8%, well above the Fed’s 2.0% target rate. With the U.S. unemployment rate still at 3.6%, near a historical low, and U.S. payrolls growing in June for the 30th consecutive month, expectations of more Fed rate hikes were reinforced. However, U.S. and global stocks had strong returns in June.
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 1-800-260-5969.
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.
2
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 VT Discovery All Cap Growth Fund | 3
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. |
4 | Allspring VT Discovery All Cap Growth Fund
Performance highlights (unaudited)
Performance highlights
Investment objective | The Fund seeks long-term capital appreciation. |
Manager | Allspring Funds Management, LLC |
Subadviser | Allspring Global Investments, LLC |
Portfolio managers | Michael T. Smith, CFA, Christopher J. Warner, CFA |
Average annual total returns (%) as of June 30, 2023 | ||||||
Expense ratios1 (%) | ||||||
Inception date | 1 year | 5 year | 10 year | Gross | Net2 | |
Class 1 | 3-6-1997 | 20.49 | 9.51 | 12.13 | 0.84 | 0.75 |
Class 2 | 7-31-2002 | 20.14 | 9.26 | 11.86 | 1.09 | 1.00 |
Russell 3000 Growth Index 3 | – | 26.60 | 14.39 | 15.26 | – | – |
Figures quoted represent past performance, which is no guarantee of future results. 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. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-800-260-5969. Performance figures of the Fund do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. If these fees and expenses had been reflected, performance would have been lower.
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.
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 April 30, 2024, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.75% for Class 1 shares and 1.00% for Class 2 shares. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense caps. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. Without these caps, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses. |
3 | The Russell 3000® Growth Index measures the performance of those Russell 3000® Index companies with higher price/book ratios and higher forecasted growth values. You cannot invest directly in an index. |
Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). 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. This fund is exposed to smaller-company securities risk. Consult the Fund’s prospectus for additional information on these and other risks.
Please refer to the prospectus provided by your participating insurance company for detailed information describing the separate accounts for information regarding surrender charges, mortality and expense risk fees, and other charges that may be assessed by the participating insurance companies.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
6 | Allspring VT Discovery All Cap Growth Fund
Performance highlights (unaudited)
Ten largest holdings (%) as of June 30, 20231 | |
Microsoft Corp. | 11.86 |
Amazon.com, Inc. | 6.22 |
Alphabet, Inc. Class A | 6.17 |
Visa, Inc. Class A | 5.12 |
UnitedHealth Group, Inc. | 3.01 |
Intuitive Surgical, Inc. | 2.36 |
Cadence Design Systems, Inc. | 2.29 |
ServiceNow, Inc. | 2.22 |
Waste Connections, Inc. | 2.15 |
Dexcom, Inc. | 2.06 |
1 | Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
Sector allocation as of June 30, 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. |
Allspring VT Discovery All Cap Growth Fund | 7
Fund expenses (unaudited)
Fund expenses
As a shareholder of the Fund, you incur ongoing costs, including management fees, distribution (12b-1) 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 January 1, 2023 to June 30, 2023.
Actual expenses
The “Actual” line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Actual” line under the heading entitled “Expenses paid during period” for your applicable class of shares to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The “Hypothetical” line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any separate account charges assessed by participating insurance companies. 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 separate account charges assessed by participating insurance companies were included, your costs would have been higher.
Beginning account value 1-1-2023 | Ending account value 6-30-2023 | Expenses paid during the period1 | Annualized net expense ratio | |
Class 1 | ||||
Actual | $1,000.00 | $1,218.40 | $4.13 | 0.75 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.08 | $3.76 | 0.75 % |
Class 2 | ||||
Actual | $1,000.00 | $1,216.90 | $5.50 | 1.00 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,019.84 | $5.01 | 1.00 % |
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 181 divided by 365 (to reflect the one-half-year period). |
8 | Allspring VT Discovery All Cap Growth Fund
Portfolio of investments—June 30, 2023 (unaudited)
Portfolio of investments
Shares | Value | |||||
Common stocks: 99.63% | ||||||
Communication services: 10.57% | ||||||
Entertainment: 3.43% | ||||||
Endeavor Group Holdings, Inc. Class A† | 22,600 | $540,592 | ||||
Spotify Technology SA† | 7,100 | 1,139,905 | ||||
Warner Music Group Corp. Class A | 25,900 | 675,731 | ||||
2,356,228 | ||||||
Interactive media & services: 7.14% | ||||||
Alphabet, Inc. Class A† | 35,400 | 4,237,380 | ||||
ZoomInfo Technologies, Inc.† | 26,200 | 665,218 | ||||
4,902,598 | ||||||
Consumer discretionary: 15.87% | ||||||
Automobile components: 1.02% | ||||||
Aptiv PLC† | 6,900 | 704,421 | ||||
Automobiles: 1.66% | ||||||
Ferrari NV | 3,500 | 1,138,235 | ||||
Broadline retail: 7.94% | ||||||
Amazon.com, Inc.† | 32,740 | 4,267,986 | ||||
MercadoLibre, Inc.† | 998 | 1,182,231 | ||||
5,450,217 | ||||||
Hotels, restaurants & leisure: 2.41% | ||||||
Chipotle Mexican Grill, Inc.† | 610 | 1,304,790 | ||||
DoorDash, Inc. Class A† | 4,600 | 351,532 | ||||
1,656,322 | ||||||
Specialty retail: 1.52% | ||||||
Home Depot, Inc. | 3,351 | 1,040,955 | ||||
Textiles, apparel & luxury goods: 1.32% | ||||||
lululemon athletica, Inc.† | 2,400 | 908,400 | ||||
Financials: 12.41% | ||||||
Capital markets: 2.59% | ||||||
Intercontinental Exchange, Inc. | 9,300 | 1,051,644 | ||||
MarketAxess Holdings, Inc. | 2,799 | 731,715 | ||||
1,783,359 | ||||||
Financial services: 8.18% | ||||||
Adyen NV ADR† | 57,000 | 985,530 | ||||
Fiserv, Inc.† | 8,860 | 1,117,689 | ||||
Visa, Inc. Class A | 14,790 | 3,512,329 | ||||
5,615,548 | ||||||
Insurance: 1.64% | ||||||
Progressive Corp. | 8,500 | 1,125,145 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery All Cap Growth Fund | 9
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Health care: 18.18% | ||||||
Biotechnology: 1.87% | ||||||
Biogen, Inc.† | 1,100 | $313,335 | ||||
Exact Sciences Corp.† | 10,300 | 967,170 | ||||
1,280,505 | ||||||
Health care equipment & supplies: 7.08% | ||||||
Align Technology, Inc.† | 2,800 | 990,192 | ||||
Dexcom, Inc.† | 11,000 | 1,413,610 | ||||
Edwards Lifesciences Corp.† | 8,900 | 839,537 | ||||
Intuitive Surgical, Inc.† | 4,740 | 1,620,796 | ||||
4,864,135 | ||||||
Health care providers & services: 3.01% | ||||||
UnitedHealth Group, Inc. | 4,296 | 2,064,829 | ||||
Health care technology: 1.53% | ||||||
Veeva Systems, Inc. Class A† | 5,300 | 1,047,969 | ||||
Life sciences tools & services: 2.91% | ||||||
Bio-Techne Corp. | 10,600 | 865,278 | ||||
Illumina, Inc.† | 2,500 | 468,725 | ||||
Waters Corp.† | 2,500 | 666,350 | ||||
2,000,353 | ||||||
Pharmaceuticals: 1.78% | ||||||
Zoetis, Inc. | 7,100 | 1,222,691 | ||||
Industrials: 8.32% | ||||||
Commercial services & supplies: 3.73% | ||||||
Tetra Tech, Inc. | 6,600 | 1,080,684 | ||||
Waste Connections, Inc. | 10,346 | 1,478,754 | ||||
2,559,438 | ||||||
Ground transportation: 1.79% | ||||||
Union Pacific Corp. | 6,000 | 1,227,720 | ||||
Machinery: 2.80% | ||||||
Deere & Co. | 2,600 | 1,053,494 | ||||
RBC Bearings, Inc.† | 4,000 | 869,880 | ||||
1,923,374 | ||||||
Information technology: 31.17% | ||||||
Communications equipment: 2.05% | ||||||
Motorola Solutions, Inc. | 4,800 | 1,407,744 | ||||
Electronic equipment, instruments & components: 2.76% | ||||||
Teledyne Technologies, Inc.† | 2,600 | 1,068,886 | ||||
Zebra Technologies Corp. Class A† | 2,800 | 828,324 | ||||
1,897,210 | ||||||
The accompanying notes are an integral part of these financial statements.
10 | Allspring VT Discovery All Cap Growth Fund
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
IT services: 3.29% | ||||||
Globant SA† | 4,000 | $718,880 | ||||
MongoDB, Inc.† | 2,200 | 904,178 | ||||
Snowflake, Inc. Class A† | 3,600 | 633,528 | ||||
2,256,586 | ||||||
Semiconductors & semiconductor equipment: 3.72% | ||||||
Advanced Micro Devices, Inc.† | 8,800 | 1,002,408 | ||||
Monolithic Power Systems, Inc. | 1,400 | 756,322 | ||||
Texas Instruments, Inc. | 4,400 | 792,088 | ||||
2,550,818 | ||||||
Software: 19.35% | ||||||
BILL Holdings, Inc.† | 5,500 | 642,675 | ||||
Cadence Design Systems, Inc.† | 6,700 | 1,571,284 | ||||
Crowdstrike Holdings, Inc. Class A† | 5,200 | 763,724 | ||||
Datadog, Inc. Class A† | 6,500 | 639,470 | ||||
Microsoft Corp. | 23,923 | 8,146,738 | ||||
ServiceNow, Inc.† | 2,710 | 1,522,939 | ||||
13,286,830 | ||||||
Materials: 1.96% | ||||||
Chemicals: 1.96% | ||||||
Sherwin-Williams Co. | 5,070 | 1,346,186 | ||||
Real estate: 1.15% | ||||||
Specialized REITs : 1.15% | ||||||
SBA Communications Corp. | 3,400 | 787,984 | ||||
Total common stocks (Cost $39,091,221) | 68,405,800 | |||||
Yield | ||||||
Short-term investments: 0.52% | ||||||
Investment companies: 0.52% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.02 % | 360,866 | 360,866 | |||
Total short-term investments (Cost $360,866) | 360,866 | |||||
Total investments in securities (Cost $39,452,087) | 100.15 % | 68,766,666 | ||||
Other assets and liabilities, net | (0.15 ) | (105,563 ) | ||||
Total net assets | 100.00 % | $68,661,103 | ||||
† | Non-income-earning security |
♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
∞ | The rate represents the 7-day annualized yield at period end. |
Abbreviations: | |
ADR | American depositary receipt |
REIT | Real estate investment trust |
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery All Cap Growth Fund | 11
Portfolio of investments—June 30, 2023 (unaudited)
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
Value, beginning of period | Purchases | Sales proceeds | Net realized gains (losses) | Net change in unrealized gains (losses) | Value, end of period | Shares, end of period | Income from affiliated securities | |
Short-term investments | ||||||||
Allspring Government Money Market Fund Select Class | $2,283,520 | $7,791,410 | $(9,714,064 ) | $0 | $0 | $360,866 | 360,866 | $26,402 |
The accompanying notes are an integral part of these financial statements.
12 | Allspring VT Discovery All Cap Growth Fund
Statement of assets and liabilities—June 30, 2023 (unaudited)
Financial statements
Statement of assets and liabilities
Assets | |
Investments in unaffiliated securities, at value (cost $39,091,221) | $68,405,800 |
Investments in affiliated securities, at value (cost $360,866) | 360,866 |
Receivable for Fund shares sold | 151,111 |
Receivable for dividends | 13,610 |
Prepaid expenses and other assets | 1,710 |
Total assets | 68,933,097 |
Liabilities | |
Payable for investments purchased | 160,075 |
Payable for Fund shares redeemed | 47,576 |
Management fee payable | 30,450 |
Distribution fee payable | 7,365 |
Administration fees payable | 4,717 |
Accrued expenses and other liabilities | 21,811 |
Total liabilities | 271,994 |
Total net assets | $68,661,103 |
Net assets consist of | |
Paid-in capital | $30,548,548 |
Total distributable earnings | 38,112,555 |
Total net assets | $68,661,103 |
Computation of net asset value per share | |
Net assets–Class 1 | $31,080,544 |
Shares outstanding–Class 11 | 1,221,784 |
Net asset value per share–Class 1 | $25.44 |
Net assets–Class 2 | $37,580,559 |
Shares outstanding–Class 21 | 1,554,095 |
Net asset value per share–Class 2 | $24.18 |
1 | The Fund has an unlimited number of authorized shares. |
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery All Cap Growth Fund | 13
Statement of operations—six months ended June 30, 2023 (unaudited)
Statement of operations
Investment income | |
Dividends (net of foreign withholdings taxes of $2,620) | $169,817 |
Income from affiliated securities | 26,402 |
Total investment income | 196,219 |
Expenses | |
Management fee | 191,182 |
Administration fees | |
Class 1 | 11,406 |
Class 2 | 14,085 |
Distribution fee | |
Class 2 | 40,002 |
Custody and accounting fees | 3,304 |
Professional fees | 27,868 |
Shareholder report expenses | 5,427 |
Trustees’ fees and expenses | 7,102 |
Other fees and expenses | 762 |
Total expenses | 301,138 |
Less: Fee waivers and/or expense reimbursements | |
Fund-level | (15,271 ) |
Class 1 | (2,812 ) |
Net expenses | 283,055 |
Net investment loss | (86,836 ) |
Realized and unrealized gains (losses) on investments | |
Net realized gains on | |
Unaffiliated securities | 2,326,401 |
Foreign currency and foreign currency translations | 62 |
Net realized gains on investments | 2,326,463 |
Net change in unrealized gains (losses) on investments | 10,441,885 |
Net realized and unrealized gains (losses) on investments | 12,768,348 |
Net increase in net assets resulting from operations | $12,681,512 |
The accompanying notes are an integral part of these financial statements.
14 | Allspring VT Discovery All Cap Growth Fund
Statement of changes in net assets
Statement of changes in net assets
Six months ended June 30, 2023 (unaudited) | Year ended December 31, 2022 | |||
Operations | ||||
Net investment loss | $(86,836 ) | $(294,454 ) | ||
Net realized gains on investments | 2,326,463 | 6,653,356 | ||
Net change in unrealized gains (losses) on investments | 10,441,885 | (44,084,645 ) | ||
Net increase (decrease) in net assets resulting from operations | 12,681,512 | (37,725,743 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class 1 | 0 | (7,399,134 ) | ||
Class 2 | 0 | (9,021,680 ) | ||
Total distributions to shareholders | 0 | (16,420,814 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class 1 | 15,389 | 353,544 | 22,220 | 566,861 |
Class 2 | 32,512 | 713,124 | 142,485 | 4,023,820 |
1,066,668 | 4,590,681 | |||
Reinvestment of distributions | ||||
Class 1 | 0 | 0 | 326,384 | 7,399,134 |
Class 2 | 0 | 0 | 417,671 | 9,021,680 |
0 | 16,420,814 | |||
Payment for shares redeemed | ||||
Class 1 | (74,852 ) | (1,705,556 ) | (187,569 ) | (5,315,386 ) |
Class 2 | (170,049 ) | (3,743,206 ) | (305,040 ) | (10,025,192 ) |
(5,448,762 ) | (15,340,578 ) | |||
Net increase (decrease) in net assets resulting from capital share transactions | (4,382,094 ) | 5,670,917 | ||
Total increase (decrease) in net assets | 8,299,418 | (48,475,640 ) | ||
Net assets | ||||
Beginning of period | 60,361,685 | 108,837,325 | ||
End of period | $68,661,103 | $60,361,685 | ||
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery All Cap Growth Fund | 15
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Six months ended June 30, 2023 (unaudited) | Year ended December 31 | |||||
Class 1 | 2022 | 2021 | 2020 | 2019 | 2018 | |
Net asset value, beginning of period | $20.88 | $43.70 | $42.28 | $31.89 | $26.27 | $28.99 |
Net investment loss | (0.02 )1 | (0.08 )1 | (0.19 )1 | (0.07 ) | (0.03 )1 | (0.03 )1 |
Net realized and unrealized gains (losses) on investments | 4.58 | (15.54 ) | 6.43 | 13.27 | 9.69 | 0.62 |
Total from investment operations | 4.56 | (15.62 ) | 6.24 | 13.20 | 9.66 | 0.59 |
Distributions to shareholders from | ||||||
Net realized gains | 0.00 | (7.20 ) | (4.82 ) | (2.81 ) | (4.04 ) | (3.31 ) |
Net asset value, end of period | $25.44 | $20.88 | $43.70 | $42.28 | $31.89 | $26.27 |
Total return2 | 21.84 % | (37.04 )% | 15.27 % | 43.41 % | 37.39 % | 0.52 % |
Ratios to average net assets (annualized) | ||||||
Gross expenses | 0.82 % | 0.84 % | 0.78 % | 0.80 % | 0.82 % | 0.81 % |
Net expenses | 0.75 % | 0.75 % | 0.75 % | 0.75 % | 0.75 % | 0.75 % |
Net investment loss | (0.13 )% | (0.29 )% | (0.43 )% | (0.27 )% | (0.08 )% | (0.10 )% |
Supplemental data | ||||||
Portfolio turnover rate | 13 % | 22 % | 25 % | 24 % | 31 % | 46 % |
Net assets, end of period (000s omitted) | $31,081 | $26,748 | $48,949 | $50,122 | $40,001 | $33,043 |
1 | Calculated based upon average shares outstanding |
2 | Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
16 | Allspring VT Discovery All Cap Growth Fund
Financial highlights
(For a share outstanding throughout each period)
Six months ended June 30, 2023 (unaudited) | Year ended December 31 | |||||
Class 2 | 2022 | 2021 | 2020 | 2019 | 2018 | |
Net asset value, beginning of period | $19.87 | $41.69 | $40.43 | $30.55 | $25.23 | $27.91 |
Net investment loss | (0.04 )1 | (0.14 )1 | (0.28 ) | (0.17 )1 | (0.10 )1 | (0.11 ) |
Net realized and unrealized gains (losses) on investments | 4.35 | (14.82 ) | 6.14 | 12.73 | 9.29 | 0.61 |
Total from investment operations | 4.31 | (14.96 ) | 5.86 | 12.56 | 9.19 | 0.50 |
Distributions to shareholders from | ||||||
Net realized gains | 0.00 | (6.86 ) | (4.60 ) | (2.68 ) | (3.87 ) | (3.18 ) |
Net asset value, end of period | $24.18 | $19.87 | $41.69 | $40.43 | $30.55 | $25.23 |
Total return2 | 21.69 % | (37.20 )% | 14.97 % | 43.18 % | 37.04 % | 0.28 % |
Ratios to average net assets (annualized) | ||||||
Gross expenses | 1.05 % | 1.04 % | 1.02 % | 1.04 % | 1.06 % | 1.06 % |
Net expenses | 1.00 % | 0.98 % | 1.00 % | 1.00 % | 1.00 % | 1.00 % |
Net investment loss | (0.38 )% | (0.51 )% | (0.68 )% | (0.52 )% | (0.33 )% | (0.35 )% |
Supplemental data | ||||||
Portfolio turnover rate | 13 % | 22 % | 25 % | 24 % | 31 % | 46 % |
Net assets, end of period (000s omitted) | $37,581 | $33,614 | $59,888 | $57,850 | $50,843 | $48,500 |
1 | Calculated based upon average shares outstanding |
2 | Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery All Cap Growth Fund | 17
Notes to financial statements (unaudited)
Notes to financial statements
1.
ORGANIZATION
Allspring Variable 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 VT Discovery All Cap Growth Fund (formerly, Allspring VT Omega Growth Fund) (the “Fund”) which is a diversified series of the Trust. The Trust offers shares of the Fund to separate accounts of various life insurance companies as funding vehicles for certain variable annuity contracts and variable life insurance policies.
2.
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Securities valuation
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value.
Investments which are not valued using 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.
Security transactions and income recognition
Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.
Dividend income is recognized on the ex-dividend date. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.
Distributions to shareholders
Distributions to shareholders from net investment income and any net realized gains are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
Federal and other taxes
The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.
The Fund’s income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns, as applicable, for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
As of June 30, 2023, the aggregate cost of all investments for federal income tax purposes was $39,460,056 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $34,107,314 |
Gross unrealized losses | (4,800,704 ) |
Net unrealized gains | $29,306,610 |
18 | Allspring VT Discovery All Cap Growth Fund
Notes to financial statements (unaudited)
Class allocations
The separate classes of shares offered by the Fund differ principally in distribution fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.
3.
FAIR VALUATION MEASUREMENTS
Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
•Level 1—quoted prices in active markets for identical securities
•Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
•Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of June 30, 2023:
Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
Assets | ||||
Investments in: | ||||
Common stocks | ||||
Communication services | $7,258,826 | $0 | $0 | $7,258,826 |
Consumer discretionary | 10,898,550 | 0 | 0 | 10,898,550 |
Financials | 8,524,052 | 0 | 0 | 8,524,052 |
Health care | 12,480,482 | 0 | 0 | 12,480,482 |
Industrials | 5,710,532 | 0 | 0 | 5,710,532 |
Information technology | 21,399,188 | 0 | 0 | 21,399,188 |
Materials | 1,346,186 | 0 | 0 | 1,346,186 |
Real estate | 787,984 | 0 | 0 | 787,984 |
Short-term investments | ||||
Investment companies | 360,866 | 0 | 0 | 360,866 |
Total assets | $68,766,666 | $0 | $0 | $68,766,666 |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the six months ended June 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, supervising the subadviser and providing fund-level administrative
Allspring VT Discovery All Cap Growth Fund | 19
Notes to financial statements (unaudited)
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 | 0.600 % |
Next $500 million | 0.550 |
Next $1 billion | 0.500 |
Next $2 billion | 0.475 |
Next $1 billion | 0.450 |
Next $5 billion | 0.440 |
Over $10 billion | 0.430 |
For the six months ended June 30, 2023, the management fee was equivalent to an annual rate of 0.60% 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 0.45% and declining to 0.30% as the average daily net assets of the Fund increase.
Administration fees
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee of 0.08% which is calculated based on the average daily net assets of each class.
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 April 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 June 30, 2023, the contractual expense caps are as follows:
EXPENSE RATIO CAPS | |
Class 1 | 0.75 % |
Class 2 | 1.00 |
Distribution fee
The Trust has adopted a distribution plan for Class 2 shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class 2 shares and paid to Allspring Funds Distributor, LLC, the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.25% of the average daily net assets of Class 2 shares.
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 six months ended June 30, 2023 were $7,917,199 and $10,369,443, respectively.
6.
BANK BORROWINGS
The Trust, Allspring Master Trust and Allspring Funds Trust (excluding the money market funds) 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
20 | Allspring VT Discovery All Cap Growth Fund
Notes to financial statements (unaudited)
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 six months ended June 30, 2023, there were no borrowings by the Fund under the agreement.
7.
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.
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 VT Discovery All Cap Growth Fund | 21
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 1-866-259-3305, 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.
22 | Allspring VT Discovery All Cap Growth Fund
Other information (unaudited)
BOARD OF TRUSTEES AND OFFICERS
Each of the Trustees and Officers listed in the table below acts in identical capacities for each fund in the Allspring family of funds, which consists of 127 mutual funds comprising the Allspring Funds Trust, Allspring Variable Trust, Allspring Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information1. The mailing address of each Trustee and Officer is 1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203. Each Trustee and Officer serves an indefinite term, however, each Trustee serves such term until reaching the mandatory retirement age established by the Trustees.
Independent Trustees
Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
William R. Ebsworth (Born 1957) | Trustee, since 2015 | Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Foundation (non-profit organization). Mr. Ebsworth is a CFA charterholder. | N/A |
Jane A. Freeman (Born 1953) | Trustee, since 2015; Chair Liaison, since 2018 | Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is also an inactive Chartered Financial Analyst. | N/A |
Isaiah Harris, Jr. (Born 1952) | Trustee, since 2009; Audit Committee Chair, since 2019 | Retired. Member of the Advisory Board of CEF of East Central Florida. Chairman of the Board of CIGNA Corporation from 2009 to 2021, and Director from 2005 to 2008. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Fellowship of Christian Athletes. Mr. Harris is a certified public accountant (inactive status). | N/A |
David F. Larcker (Born 1950) | Trustee, since 2009 | Distinguished Visiting Fellow at the Hoover Institution since 2022. James Irvin Miller Professor of Accounting at the Graduate School of Business (Emeritus), Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. | N/A |
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 calling 1-800-260-5969 or by visiting the website at allspringglobal.com.
Allspring VT Discovery All Cap Growth Fund | 23
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. |
24 | Allspring VT Discovery All Cap 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 VT Discovery All Cap Growth Fund | 25
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 Variable 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 VT Discovery All Cap Growth 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.”
26 | Allspring VT Discovery All Cap Growth 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. 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 was lower than the average investment performance of the Universe for all periods under review except the five- and ten-year periods, which was in range of the average investment performance of the Universe. The Board also noted that the investment performance of the Fund was lower than the investment performance of its benchmark index, the Russell 3000® Growth Index, for all periods 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 took note of the Fund’s outperformance relative to the Universe over the longer time 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 equal to or lower than the median net operating expense ratios of the expense Groups for each share class.
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 lower 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 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 VT Discovery All Cap Growth Fund | 27
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.
28 | Allspring VT Discovery All Cap 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 Variable 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 VT Discovery All Cap Growth Fund | 29
For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:
Allspring Funds
P.O. Box 219967
Kansas City, MO 64121-9967
P.O. Box 219967
Kansas City, MO 64121-9967
Website: allspringglobal.com
Individual investors: 1-800-260-5969
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-866-765-0778
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 1-800-260-5969 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-07052023-3tfjlwg9 08-23
SAR0578 06-23
SAR0578 06-23
Allspring VT Discovery SMID Cap Growth Fund
(formerly, Allspring VT Discovery Fund)
Semi-Annual Report
June 30, 2023
Contents
The views expressed and any forward-looking statements are as of June 30, 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 VT Discovery SMID Cap Growth Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this semi-annual report for the Allspring VT Discovery SMID Cap Growth Fund for the six-month period that ended June 30, 2023. Effective May 1, 2023, the Fund changed its name from Allspring VT Discovery Fund to Allspring VT Discovery SMID Cap Growth Fund. Globally, stocks and bonds rebounded after a challenging period despite ongoing volatility. While navigating persistently high inflation and the impact of ongoing aggressive central bank rate hikes, markets rallied on signs of gradually declining inflation, anticipation of an end to the central bank monetary tightening cycle, and the positive impact of China removing its strict COVID-19 lockdowns. For the six-month period, domestic U.S. and global stocks had strong results while bonds had more muted gains. After suffering deep and broad losses through 2022, bonds now benefit from a base of higher yields that can help generate higher income. However, ongoing rate hikes were a headwind during the six-month period.
For the period, U.S. stocks, based on the S&P 500 Index,1 returned 16.89%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 gained 9.47% while the MSCI EM Index (Net) (USD)3 returned 4.89%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned 2.09%, the Bloomberg Global Aggregate ex-USD (unhedged) Index5 gained 0.83%, the Bloomberg Municipal Bond Index6 gained 2.67%, and the ICE BofA U.S. High Yield Index7 returned 5.45%.
Despite high inflation and central bank rate hikes, markets rallied.
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 Federal Reserve (Fed) and on how many more rate hikes remain in this tightening cycle. The 0.25% federal funds rate hike announced in January was the Fed’s smallest rate increase since March 2022.
Financial markets declined in February as investors responded unfavorably to resilient economic data. The takeaway: Central banks would 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 was not falling quickly enough for the Fed, which raised interest rates by 0.25% in early February. Meanwhile, the Bank of England and the European Central Bank (ECB) both raised rates by 0.50%.
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 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 (unhedged) Index 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 VT Discovery SMID Cap Growth Fund
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.
June featured the Fed’s first pause on interest rate hikes since March 2022, when it began its aggressive campaign to rein in inflation. However, the core U.S. Consumer Price Index (CPI)2, excluding food and energy prices, while continuing to decline, remained stubbornly high in June, at 4.8%, well above the Fed’s 2.0% target rate. With the U.S. unemployment rate still at 3.6%, near a historical low, and U.S. payrolls growing in June for the 30th consecutive month, expectations of more Fed rate hikes were reinforced. However, U.S. and global stocks had strong returns in June.
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 1-800-260-5969.
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.
2
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 VT Discovery SMID Cap Growth Fund | 3
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. |
4 | Allspring VT Discovery SMID Cap Growth Fund
Performance highlights (unaudited)
Performance highlights
Investment objective | The Fund seeks long-term capital appreciation. |
Manager | Allspring Funds Management, LLC |
Subadviser | Allspring Global Investments, LLC |
Portfolio managers | Michael T. Smith, CFA, Christopher J. Warner, CFA |
Average annual total returns (%) as of June 30, 2023 | ||||||
Expense ratios1 (%) | ||||||
Inception date | 1 year | 5 year | 10 year | Gross | Net2 | |
Class 2 | 5-8-1992 | 20.82 | 6.26 | 9.32 | 1.16 | 1.15 |
Russell 2500® Growth Index3 | – | 18.58 | 7.00 | 10.38 | – | – |
Figures quoted represent past performance, which is no guarantee of future results. 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. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-800-260-5969. Performance figures of the Fund do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. If these fees and expenses had been reflected, performance would have been lower.
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.
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 prospectus. 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 April 30, 2024, 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 2 shares. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap 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 prospectus. |
3 | The Russell 2500® Growth Index measures the performance of those Russell 2500TM 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.
Please refer to the prospectus provided by your participating insurance company for detailed information describing the separate accounts for information regarding surrender charges, mortality and expense risk fees, and other charges that may be assessed by the participating insurance companies.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
6 | Allspring VT Discovery SMID Cap Growth Fund
Performance highlights (unaudited)
Ten largest holdings (%) as of June 30, 20231 | |
Teledyne Technologies, Inc. | 2.70 |
Casella Waste Systems, Inc. Class A | 2.50 |
Tetra Tech, Inc. | 2.18 |
Novanta, Inc. | 2.16 |
MercadoLibre, Inc. | 2.02 |
Globant SA | 1.98 |
Confluent, Inc. Class A | 1.96 |
WNS Holdings Ltd. | 1.91 |
Rexford Industrial Realty, Inc. | 1.89 |
Exact Sciences Corp. | 1.82 |
1 | Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
Sector allocation as of June 30, 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. |
Allspring VT Discovery SMID Cap Growth Fund | 7
Fund expenses (unaudited)
Fund expenses
As a shareholder of the Fund, you incur ongoing costs, including management fees, distribution (12b-1) 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 January 1, 2023 to June 30, 2023.
Actual expenses
The “Actual” line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Actual” line under the heading entitled “Expenses paid during period” for your applicable class of shares to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The “Hypothetical” line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any separate account charges assessed by participating insurance companies. 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 separate account charges assessed by participating insurance companies were included, your costs would have been higher.
Beginning account value 1-1-2023 | Ending account value 6-30-2023 | Expenses paid during the period1 | Annualized net expense ratio | |
Class 2 | ||||
Actual | $1,000.00 | $1,178.50 | $6.16 | 1.14 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,019.14 | $5.71 | 1.14 % |
1 | Expenses paid is equal to the annualized net expense ratio multiplied by the average account value over the period, multiplied by 181 divided by 365 (to reflect the one-half-year period). |
8 | Allspring VT Discovery SMID Cap Growth Fund
Portfolio of investments—June 30, 2023 (unaudited)
Portfolio of investments
Shares | Value | |||||
Common stocks: 98.31% | ||||||
Communication services: 6.73% | ||||||
Entertainment: 4.29% | ||||||
Endeavor Group Holdings, Inc. Class A† | 58,100 | $1,389,752 | ||||
Liberty Media Corp. Formula One Class C† | 32,900 | 2,476,712 | ||||
Warner Music Group Corp. Class A | 49,500 | 1,291,455 | ||||
World Wrestling Entertainment, Inc. Class A | 9,100 | 987,077 | ||||
6,144,996 | ||||||
Interactive media & services: 2.44% | ||||||
IAC, Inc.† | 32,272 | 2,026,682 | ||||
ZoomInfo Technologies, Inc.† | 57,600 | 1,462,464 | ||||
3,489,146 | ||||||
Consumer discretionary: 10.04% | ||||||
Broadline retail: 3.73% | ||||||
Global-E Online Ltd.† | 59,789 | 2,447,762 | ||||
MercadoLibre, Inc.† | 2,443 | 2,893,978 | ||||
5,341,740 | ||||||
Hotels, restaurants & leisure: 5.14% | ||||||
Chipotle Mexican Grill, Inc.† | 900 | 1,925,100 | ||||
Hyatt Hotels Corp. Class A | 11,200 | 1,283,296 | ||||
MGM Resorts International† | 39,600 | 1,739,232 | ||||
Wingstop, Inc. | 12,100 | 2,421,936 | ||||
7,369,564 | ||||||
Textiles, apparel & luxury goods: 1.17% | ||||||
On Holding AG Class A† | 50,600 | 1,669,800 | ||||
Consumer staples: 2.78% | ||||||
Personal care products: 2.78% | ||||||
BellRing Brands, Inc.† | 61,000 | 2,232,600 | ||||
Coty, Inc. Class A† | 141,700 | 1,741,493 | ||||
3,974,093 | ||||||
Financials: 4.72% | ||||||
Capital markets: 2.64% | ||||||
MarketAxess Holdings, Inc. | 8,300 | 2,169,786 | ||||
Morningstar, Inc. | 8,200 | 1,607,774 | ||||
3,777,560 | ||||||
Financial services: 2.08% | ||||||
Jack Henry & Associates, Inc. | 10,400 | 1,740,232 | ||||
StoneCo Ltd. Class A† | 97,919 | 1,247,488 | ||||
2,987,720 | ||||||
Health care: 21.10% | ||||||
Biotechnology: 5.72% | ||||||
Ascendis Pharma AS ADR† | 9,548 | 852,159 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery SMID Cap Growth Fund | 9
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Biotechnology (continued) | ||||||
CRISPR Therapeutics AG† | 12,527 | $703,266 | ||||
Exact Sciences Corp.† | 27,800 | 2,610,420 | ||||
Halozyme Therapeutics, Inc.† | 8,400 | 302,988 | ||||
Mirati Therapeutics, Inc.† | 9,600 | 346,848 | ||||
Natera, Inc.† | 25,800 | 1,255,428 | ||||
Sarepta Therapeutics, Inc.† | 9,900 | 1,133,748 | ||||
TG Therapeutics, Inc.† | 39,800 | 988,632 | ||||
8,193,489 | ||||||
Health care equipment & supplies: 9.23% | ||||||
Dexcom, Inc.† | 11,500 | 1,477,865 | ||||
ICU Medical, Inc.† | 11,000 | 1,960,090 | ||||
Inari Medical, Inc.† | 21,100 | 1,226,754 | ||||
Inspire Medical Systems, Inc.† | 7,800 | 2,532,192 | ||||
iRhythm Technologies, Inc.† | 14,600 | 1,523,072 | ||||
PROCEPT BioRobotics Corp.† | 19,500 | 689,325 | ||||
Shockwave Medical, Inc.† | 8,452 | 2,412,285 | ||||
TransMedics Group, Inc.† | 16,700 | 1,402,466 | ||||
13,224,049 | ||||||
Health care providers & services: 2.84% | ||||||
HealthEquity, Inc.† | 31,600 | 1,995,224 | ||||
Option Care Health, Inc.† | 63,500 | 2,063,115 | ||||
4,058,339 | ||||||
Life sciences tools & services: 3.31% | ||||||
Bio-Rad Laboratories, Inc. Class A† | 3,200 | 1,213,184 | ||||
Bio-Techne Corp. | 30,500 | 2,489,715 | ||||
Waters Corp.† | 3,900 | 1,039,506 | ||||
4,742,405 | ||||||
Industrials: 23.18% | ||||||
Aerospace & defense: 1.62% | ||||||
Axon Enterprise, Inc.† | 11,900 | 2,321,928 | ||||
Building products: 2.50% | ||||||
Advanced Drainage Systems, Inc. | 13,814 | 1,571,757 | ||||
Trex Co., Inc.† | 30,700 | 2,012,692 | ||||
3,584,449 | ||||||
Commercial services & supplies: 7.19% | ||||||
Casella Waste Systems, Inc. Class A† | 39,634 | 3,584,895 | ||||
RB Global, Inc. | 28,900 | 1,734,000 | ||||
Rollins, Inc. | 43,300 | 1,854,539 | ||||
Tetra Tech, Inc. | 19,100 | 3,127,434 | ||||
10,300,868 | ||||||
Construction & engineering: 1.02% | ||||||
Valmont Industries, Inc. | 5,000 | 1,455,250 | ||||
The accompanying notes are an integral part of these financial statements.
10 | Allspring VT Discovery SMID Cap Growth Fund
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Ground transportation: 3.04% | ||||||
J.B. Hunt Transport Services, Inc. | 9,700 | $1,755,991 | ||||
Saia, Inc.† | 7,600 | 2,602,316 | ||||
4,358,307 | ||||||
Machinery: 1.32% | ||||||
RBC Bearings, Inc.† | 8,700 | 1,891,989 | ||||
Professional services: 3.04% | ||||||
FTI Consulting, Inc.† | 8,500 | 1,616,700 | ||||
WNS Holdings Ltd. ADR† | 37,100 | 2,735,012 | ||||
4,351,712 | ||||||
Trading companies & distributors: 3.45% | ||||||
SiteOne Landscape Supply, Inc.† | 15,161 | 2,537,345 | ||||
Watsco, Inc. | 6,300 | 2,403,261 | ||||
4,940,606 | ||||||
Information technology: 24.89% | ||||||
Electronic equipment, instruments & components: 5.66% | ||||||
Novanta, Inc.† | 16,800 | 3,092,880 | ||||
Teledyne Technologies, Inc.† | 9,400 | 3,864,434 | ||||
Zebra Technologies Corp. Class A† | 3,900 | 1,153,737 | ||||
8,111,051 | ||||||
IT services: 3.56% | ||||||
Globant SA† | 15,800 | 2,839,576 | ||||
MongoDB, Inc.† | 5,500 | 2,260,445 | ||||
5,100,021 | ||||||
Semiconductors & semiconductor equipment: 4.70% | ||||||
Axcelis Technologies, Inc.† | 8,200 | 1,503,306 | ||||
Entegris, Inc. | 15,300 | 1,695,546 | ||||
Impinj, Inc.† | 18,300 | 1,640,595 | ||||
Monolithic Power Systems, Inc. | 2,400 | 1,296,552 | ||||
Wolfspeed, Inc.† | 10,800 | 600,372 | ||||
6,736,371 | ||||||
Software: 10.97% | ||||||
BILL Holdings, Inc.† | 16,966 | 1,982,477 | ||||
CCC Intelligent Solutions Holdings, Inc.† | 189,700 | 2,126,537 | ||||
Confluent, Inc. Class A† | 79,300 | 2,800,083 | ||||
Fair Isaac Corp.† | 1,900 | 1,537,499 | ||||
HubSpot, Inc.† | 4,200 | 2,234,778 | ||||
Olo, Inc. Class A† | 119,600 | 772,616 | ||||
Tyler Technologies, Inc.† | 6,100 | 2,540,467 | ||||
Zscaler, Inc.† | 11,700 | 1,711,710 | ||||
15,706,167 | ||||||
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery SMID Cap Growth Fund | 11
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Materials: 1.36% | ||||||
Metals & mining: 1.36% | ||||||
ATI, Inc.† | 44,100 | $1,950,543 | ||||
Real estate: 3.51% | ||||||
Industrial REITs : 1.89% | ||||||
Rexford Industrial Realty, Inc. | 51,800 | 2,704,996 | ||||
Residential REITs : 1.62% | ||||||
Equity LifeStyle Properties, Inc. | 34,745 | 2,324,093 | ||||
Total common stocks (Cost $127,566,397) | 140,811,252 | |||||
Yield | ||||||
Short-term investments: 2.02% | ||||||
Investment companies: 2.02% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.02 % | 2,897,975 | 2,897,975 | |||
Total short-term investments (Cost $2,897,975) | 2,897,975 | |||||
Total investments in securities (Cost $130,464,372) | 100.33 % | 143,709,227 | ||||
Other assets and liabilities, net | (0.33 ) | (473,696 ) | ||||
Total net assets | 100.00 % | $143,235,531 | ||||
† | Non-income-earning security |
♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
∞ | The rate represents the 7-day annualized yield at period end. |
Abbreviations: | |
ADR | American depositary receipt |
REIT | Real estate investment trust |
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
Value, beginning of period | Purchases | Sales proceeds | Net realized gains (losses) | Net change in unrealized gains (losses) | Value, end of period | Shares, end of period | Income from affiliated securities | |
Short-term investments | ||||||||
Allspring Government Money Market Fund Select Class | $4,203,560 | $13,680,837 | $(14,986,422 ) | $0 | $0 | $2,897,975 | 2,897,975 | $88,559 |
Investments in affiliates no longer held at end of period | ||||||||
Securities Lending Cash Investments LLC | 1,012,703 | 2,067,225 | (3,079,832 ) | (88 ) | (8 ) | 0 | 0 | 6,719 1 |
$(88 ) | $(8 ) | $2,897,975 | $95,278 |
1 | Amount shown represents income before fees and rebates. |
The accompanying notes are an integral part of these financial statements.
12 | Allspring VT Discovery SMID Cap Growth Fund
Statement of assets and liabilities—June 30, 2023 (unaudited)
Financial statements
Statement of assets and liabilities
Assets | |
Investments in unaffiliated securities, at value (cost $127,566,397) | $140,811,252 |
Investments in affiliated securities, at value (cost $2,897,975) | 2,897,975 |
Receivable for dividends | 57,943 |
Receivable for Fund shares sold | 20,622 |
Prepaid expenses and other assets | 1,171 |
Total assets | 143,788,963 |
Liabilities | |
Payable for investments purchased | 304,461 |
Payable for Fund shares redeemed | 97,452 |
Management fee payable | 92,078 |
Distribution fee payable | 30,652 |
Administration fee payable | 9,852 |
Accrued expenses and other liabilities | 18,937 |
Total liabilities | 553,432 |
Total net assets | $143,235,531 |
Net assets consist of | |
Paid-in capital | $143,783,805 |
Total distributable loss | (548,274 ) |
Total net assets | $143,235,531 |
Computation of net asset value per share | |
Net assets - Class 2 | $143,235,531 |
Shares outstanding - Class 21 | 7,135,960 |
Net asset value per share - Class 2 | $20.07 |
1 | The Fund has an unlimited number of authorized shares. |
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery SMID Cap Growth Fund | 13
Statement of operations—six months ended June 30, 2023 (unaudited)
Statement of operations
Investment income | |
Dividends (net of foreign withholdings taxes of $4,208) | $226,155 |
Income from affiliated securities | 89,077 |
Interest | 58 |
Total investment income | 315,290 |
Expenses | |
Management fee | 507,709 |
Administration fee - Class 2 | 54,156 |
Distribution fee - Class 2 | 168,149 |
Custody and accounting fees | 6,725 |
Professional fees | 23,931 |
Shareholder report expenses | 1,954 |
Trustees’ fees and expenses | 8,759 |
Other fees and expenses | 1,550 |
Total expenses | 772,933 |
Less: Fee waivers and/or expense reimbursements | |
Fund-level | (1,251 ) |
Net expenses | 771,682 |
Net investment loss | (456,392 ) |
Realized and unrealized gains (losses) on investments | |
Net realized losses on | |
Unaffiliated securities | (5,162,880 ) |
Affiliated securities | (88 ) |
Net realized losses on investments | (5,162,968 ) |
Net change in unrealized gains (losses) on | |
Unaffiliated securities | 27,922,277 |
Affiliated securities | (8 ) |
Net change in unrealized gains (losses) on investments | 27,922,269 |
Net realized and unrealized gains (losses) on investments | 22,759,301 |
Net increase in net assets resulting from operations | $22,302,909 |
The accompanying notes are an integral part of these financial statements.
14 | Allspring VT Discovery SMID Cap Growth Fund
Statement of changes in net assets
Statement of changes in net assets
Six months ended June 30, 2023 (unaudited) | Year ended December 31, 2022 | |||
Operations | ||||
Net investment loss | $(456,392 ) | $(1,349,369 ) | ||
Net realized losses on investments | (5,162,968 ) | (8,063,767 ) | ||
Net change in unrealized gains (losses) on investments | 27,922,269 | (72,996,282 ) | ||
Net increase (decrease) in net assets resulting from operations | 22,302,909 | (82,409,418 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains - Class 2 | 0 | (51,108,273 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold - Class 2 | 142,534 | 2,653,072 | 576,216 | 14,275,381 |
Reinvestment of distributions - Class 2 | 0 | 0 | 2,801,989 | 51,108,273 |
Payment for shares redeemed - Class 2 | (477,442 ) | (8,963,834 ) | (1,073,835 ) | (25,445,459 ) |
Net increase (decrease) in net assets resulting from capital share transactions | (6,310,762 ) | 39,938,195 | ||
Total increase (decrease) in net assets | 15,992,147 | (93,579,496 ) | ||
Net assets | ||||
Beginning of period | 127,243,384 | 220,822,880 | ||
End of period | $143,235,531 | $127,243,384 | ||
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery SMID Cap Growth Fund | 15
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Six months ended June 30, 2023 (unaudited) | Year ended December 31 | |||||
Class 2 | 2022 | 2021 | 2020 | 2019 | 2018 | |
Net asset value, beginning of period | $17.03 | $42.74 | $48.73 | $32.85 | $26.14 | $31.74 |
Net investment loss | (0.06 ) | (0.18 ) | (0.48 ) | (0.34 ) | (0.25 ) | (0.17 ) |
Net realized and unrealized gains (losses) on investments | 3.10 | (15.32 ) | (1.89 ) | 19.54 | 10.47 | (1.39 ) |
Total from investment operations | 3.04 | (15.50 ) | (2.37 ) | 19.20 | 10.22 | (1.56 ) |
Distributions to shareholders from | ||||||
Net realized gains | 0.00 | (10.21 ) | (3.62 ) | (3.32 ) | (3.51 ) | (4.04 ) |
Net asset value, end of period | $20.07 | $17.03 | $42.74 | $48.73 | $32.85 | $26.14 |
Total return1 | 17.85 % | (37.85 )% | (5.04 )% | 62.65 % | 39.02 % | (7.06 )% |
Ratios to average net assets (annualized) | ||||||
Gross expenses | 1.14 % | 1.16 % | 1.13 % | 1.14 % | 1.16 % | 1.16 % |
Net expenses | 1.14 % | 1.15 % | 1.13 % | 1.14 % | 1.15 % | 1.15 % |
Net investment loss | (0.67 )% | (0.91 )% | (1.03 )% | (0.93 )% | (0.79 )% | (0.55 )% |
Supplemental data | ||||||
Portfolio turnover rate | 23 % | 51 % | 57 % | 47 % | 71 % | 60 % |
Net assets, end of period (000s omitted) | $143,236 | $127,243 | $220,823 | $255,954 | $168,489 | $125,806 |
1 | Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
16 | Allspring VT Discovery SMID Cap Growth Fund
Notes to financial statements (unaudited)
Notes to financial statements
1.
ORGANIZATION
Allspring Variable 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 VT Discovery SMID Cap Growth Fund (formerly, Allspring VT Discovery Fund) (the “Fund”) which is a diversified series of the Trust. The Trust offers shares of the Fund to separate accounts of various life insurance companies as funding vehicles for certain variable annuity contracts and variable life insurance policies.
2.
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Securities valuation
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value.
Investments which are not valued using the 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.
Securities lending
During the period, the Fund participated in a program to lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. When securities were on loan, the Fund received interest or dividends on those securities. Cash collateral received in connection with its securities lending transactions was invested in Securities Lending Cash Investments, LLC (the “Securities Lending Fund”), an affiliated non-registered investment company. 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 Fund is no longer participating in the securities lending program and the Securities Lending Fund was liquidated. Securities Lending Fund was managed by Allspring Funds Management and was subadvised by Allspring Global Investments, LLC (“Allspring Investments”), an affiliate of Allspring Funds Management and wholly owned subsidiary of Allspring Global Investments Holdings, LLC. Allspring Funds Management received an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Securities Lending Fund increased. All of the fees received by Allspring Funds Management were paid to Allspring Investments for its services as subadviser.
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.
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 VT Discovery SMID Cap Growth Fund | 17
Notes to financial statements (unaudited)
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 June 30, 2023, the aggregate cost of all investments for federal income tax purposes was $130,352,214 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $27,056,370 |
Gross unrealized losses | (13,699,357 ) |
Net unrealized gains | $13,357,013 |
As of December 31, 2022, the Fund had capital loss carryforwards which consist of $6,935,996 in short-term capital losses.
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 June 30, 2023:
Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
Assets | ||||
Investments in: | ||||
Common stocks | ||||
Communication services | $9,634,142 | $0 | $0 | $9,634,142 |
Consumer discretionary | 14,381,104 | 0 | 0 | 14,381,104 |
Consumer staples | 3,974,093 | 0 | 0 | 3,974,093 |
Financials | 6,765,280 | 0 | 0 | 6,765,280 |
Health care | 30,218,282 | 0 | 0 | 30,218,282 |
Industrials | 33,205,109 | 0 | 0 | 33,205,109 |
Information technology | 35,653,610 | 0 | 0 | 35,653,610 |
Materials | 1,950,543 | 0 | 0 | 1,950,543 |
Real estate | 5,029,089 | 0 | 0 | 5,029,089 |
Short-term investments | ||||
Investment companies | 2,897,975 | 0 | 0 | 2,897,975 |
Total assets | $143,709,227 | $0 | $0 | $143,709,227 |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the six months ended June 2023, the Fund did not have transfers into/out of Level 3.
18 | Allspring VT Discovery SMID Cap Growth Fund
Notes to financial statements (unaudited)
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 | 0.750 % |
Next $500 million | 0.700 |
Next $1 billion | 0.650 |
Next $2 billion | 0.625 |
Next $1 billion | 0.600 |
Next $5 billion | 0.590 |
Over $10 billion | 0.580 |
For the six months ended June 30, 2023, the management fee was equivalent to an annual rate of 0.75% of the Fund’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Investments is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.45% and declining to 0.35% as the average daily net assets of the Fund increase.
Administration fee
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 of 0.08% which is calculated based on the average daily net assets of Class 2 shares.
Waivers and/or expense reimbursements
Allspring Funds Management has contractually committed through April 30, 2024 to waive fees and/or reimburse management and administration fees to the extent necessary to cap the Fund’s expenses at 1.15% for Class 2 shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.
Distribution fee
The Trust has adopted a distribution plan for Class 2 shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class 2 shares and paid to Allspring Funds Distributor, LLC, the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.25% of the average daily net assets of Class 2 shares.
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 six months ended June 30, 2023 were $30,296,610 and $35,376,766, respectively.
6.
BANK BORROWINGS
The Trust, Allspring Master Trust and Allspring Funds Trust (excluding the money market funds) 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 six months ended June 30, 2023, there were no borrowings by the Fund under the agreement.
Allspring VT Discovery SMID Cap Growth Fund | 19
Notes to financial statements (unaudited)
7.
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.
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.
20 | Allspring VT Discovery SMID Cap Growth Fund
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 1-866-259-3305, 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 VT Discovery SMID Cap Growth Fund | 21
Other information (unaudited)
BOARD OF TRUSTEES AND OFFICERS
Each of the Trustees and Officers listed in the table below acts in identical capacities for each fund in the Allspring family of funds, which consists of 127 mutual funds comprising the Allspring Funds Trust, Allspring Variable Trust, Allspring Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information1. The mailing address of each Trustee and Officer is 1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203. Each Trustee and Officer serves an indefinite term, however, each Trustee serves such term until reaching the mandatory retirement age established by the Trustees.
Independent Trustees
Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
William R. Ebsworth (Born 1957) | Trustee, since 2015 | Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Foundation (non-profit organization). Mr. Ebsworth is a CFA charterholder. | N/A |
Jane A. Freeman (Born 1953) | Trustee, since 2015; Chair Liaison, since 2018 | Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is also an inactive Chartered Financial Analyst. | N/A |
Isaiah Harris, Jr. (Born 1952) | Trustee, since 2009; Audit Committee Chair, since 2019 | Retired. Member of the Advisory Board of CEF of East Central Florida. Chairman of the Board of CIGNA Corporation from 2009 to 2021, and Director from 2005 to 2008. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Fellowship of Christian Athletes. Mr. Harris is a certified public accountant (inactive status). | N/A |
David F. Larcker (Born 1950) | Trustee, since 2009 | Distinguished Visiting Fellow at the Hoover Institution since 2022. James Irvin Miller Professor of Accounting at the Graduate School of Business (Emeritus), Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. | N/A |
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 calling 1-800-260-5969 or by visiting the website at allspringglobal.com.
22 | Allspring VT Discovery SMID Cap 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 VT Discovery SMID Cap Growth Fund | 23
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.
24 | Allspring VT Discovery SMID Cap Growth 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 Variable 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 VT Discovery SMID Cap Growth 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 VT Discovery SMID Cap Growth Fund | 25
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 was lower 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 lower than the investment performance of its benchmark index, the Russell 2500™ Growth Index, for all periods 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 took note of the Fund’s outperformance relative to the Universe and benchmark over the longer time periods under review.
The Board also received and considered information regarding the Fund’s net operating expense ratio and its 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 this ratio in comparison to the median ratios of funds in an expense group that was determined by Broadridge to be similar to the Fund (the “Group”). The Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Group and an explanation of how funds comprising expense group and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Board noted that the net operating expense ratio of the Fund was in range of the median net operating expense ratio of the expense Group.
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 rate payable by the Fund to Allspring Funds Management under the Management Agreement, as well as the contractual fee rate payable by the Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which includes, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rate”). The 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. 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 Rate 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 Rate of the Fund was lower than the sum of the average rates for the Fund’s expense Group.
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.
26 | Allspring VT Discovery SMID Cap Growth 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 VT Discovery SMID Cap Growth Fund | 27
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 Variable 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.
28 | Allspring VT Discovery SMID Cap 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: 1-800-260-5969
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-866-765-0778
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 1-800-260-5969 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-07052023-z5bp4enp 08-23
SAR3221 06-23
SAR3221 06-23
Contents
The views expressed and any forward-looking statements are as of June 30, 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 VT Index Asset Allocation Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this semi-annual report for the Allspring VT Index Asset Allocation Fund for the six-month period that ended June 30, 2023. Globally, stocks and bonds rebounded after a challenging period despite ongoing volatility. While navigating persistently high inflation and the impact of ongoing aggressive central bank rate hikes, markets rallied on signs of gradually declining inflation, anticipation of an end to the central bank monetary tightening cycle, and the positive impact of China removing its strict COVID-19 lockdowns. For the six-month period, domestic U.S. and global stocks had strong results while bonds had more muted gains. After suffering deep and broad losses through 2022, bonds now benefit from a base of higher yields that can help generate higher income. However, ongoing rate hikes were a headwind during the six-month period.
For the period, U.S. stocks, based on the S&P 500 Index,1 returned 16.89%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 gained 9.47% while the MSCI EM Index (Net) (USD)3 returned 4.89%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned 2.09%, the Bloomberg Global Aggregate ex-USD (unhedged) Index5 gained 0.83%, the Bloomberg Municipal Bond Index6 gained 2.67%, and the ICE BofA U.S. High Yield Index7 returned 5.45%.
Despite high inflation and central bank rate hikes, markets rallied.
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 Federal Reserve (Fed) and on how many more rate hikes remain in this tightening cycle. The 0.25% federal funds rate hike announced in January was the Fed’s smallest rate increase since March 2022.
Financial markets declined in February as investors responded unfavorably to resilient economic data. The takeaway: Central banks would 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 was not falling quickly enough for the Fed, which raised interest rates by 0.25% in early February. Meanwhile, the Bank of England and the European Central Bank (ECB) both raised rates by 0.50%.
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 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 (unhedged) Index 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 VT Index Asset Allocation Fund
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.
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.
June featured the Fed’s first pause on interest rate hikes since March 2022, when it began its aggressive campaign to rein in inflation. However, the core U.S. Consumer Price Index (CPI)2, excluding food and energy prices, while continuing to decline, remained stubbornly high in June, at 4.8%, well above the Fed’s 2.0% target rate. With the U.S. unemployment rate still at 3.6%, near a historical low, and U.S. payrolls growing in June for the 30th consecutive month, expectations of more Fed rate hikes were reinforced. However, U.S. and global stocks had strong returns in June.
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 1-800-260-5969.
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.
2
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 VT Index Asset Allocation Fund | 3
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. |
4 | Allspring VT Index Asset Allocation Fund
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, Manjunath Boraiah, John R. Campbell, CFA, Travis L. Keshemberg, CFA, CIPM, FRM, David Neal, CFA, Nick Toporkov, Ph.D., CFA, Robert M. Wicentowski, CFA, Limin Xiao, Ph.D., CFA |
Average annual total returns (%) as of June 30, 2023 | ||||||
Expense ratios1 (%) | ||||||
Inception date | 1 year | 5 year | 10 year | Gross | Net2 | |
Class 2 | 4-15-1994 | 9.39 | 7.35 | 8.55 | 1.16 | 1.00 |
Index Asset Allocation Blended Index3 | – | 10.75 | 7.88 | 9.02 | – | – |
Bloomberg U.S. Treasury Index4 | – | -2.13 | 0.44 | 0.96 | – | – |
S&P 500 Index5 | – | 19.59 | 12.31 | 12.86 | – | – |
Figures quoted represent past performance, which is no guarantee of future results. 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. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-800-260-5969. Performance figures of the Fund do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. If these fees and expenses had been reflected, performance would have been lower.
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.
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 prospectus. 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 April 30, 2024, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 1.00% for Class 2 shares. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap 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 prospectus. |
3 | Source: Allspring Funds Management, LLC. Index Asset Allocation Blended Index is composed 60% of the S&P 500 Index and 40% of the Bloomberg U.S. Treasury Index. Prior to April 1, 2015, the Index Asset Allocation Blended Index was composed 60% of the S&P 500 Index and 40% of the Bloomberg U.S. Treasury 20+ Year Index. You cannot invest directly in an index. |
4 | The Bloomberg U.S. Treasury Index is an unmanaged index of prices of U.S. Treasury bonds with maturities of 1 to 30 years. You cannot invest directly in an index. |
5 | 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. Consult the Fund’s prospectus for additional information on these and other risks.
Please refer to the prospectus provided by your participating insurance company for detailed information describing the separate accounts for information regarding surrender charges, mortality and expense risk fees, and other charges that may be assessed by the participating insurance companies.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
6 | Allspring VT Index Asset Allocation Fund
Performance highlights (unaudited)
Ten largest holdings (%) as of June 30, 20231 | |
Apple, Inc. | 4.95 |
Microsoft Corp. | 4.37 |
Amazon.com, Inc. | 2.01 |
NVIDIA Corp. | 1.81 |
U.S. Treasury Notes, 1.38%, 10-31-2028 | 1.52 |
Alphabet, Inc. Class A | 1.23 |
Tesla, Inc. | 1.22 |
U.S. Treasury Notes, 1.38%, 11-15-2031 | 1.17 |
Meta Platforms, Inc. Class A | 1.09 |
Alphabet, Inc. Class C | 1.07 |
1 | Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
Sector allocation as of June 30, 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. |
Allocation (%) as of June 30, 2023 | ||
Neutral allocation | Effective allocation1 | |
Stock Funds | 60 | 60 |
Bond Funds | 40 | 44 |
Effective Cash | 0 | (4 ) |
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. |
Allspring VT Index Asset Allocation Fund | 7
Fund expenses (unaudited)
Fund expenses
As a shareholder of the Fund, you incur ongoing costs, including management fees, distribution (12b-1) 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 January 1, 2023 to June 30, 2023.
Actual expenses
The “Actual” line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Actual” line under the heading entitled “Expenses paid during period” for your applicable class of shares to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The “Hypothetical” line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any separate account charges assessed by participating insurance companies. 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 separate account charges assessed by participating insurance companies were included, your costs would have been higher.
Beginning account value 1-1-2023 | Ending account value 6-30-2023 | Expenses paid during the period1 | Annualized net expense ratio | |
Class 2 | ||||
Actual | $1,000.00 | $1,100.30 | $5.21 | 1.00 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,019.84 | $5.01 | 1.00 % |
1 | Expenses paid is equal to the annualized net expense ratio multiplied by the average account value over the period, multiplied by 181 divided by 365 (to reflect the one-half-year period). |
8 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2023 (unaudited)
Portfolio of investments
Shares | Value | |||||
Common stocks: 64.12% | ||||||
Communication services: 5.38% | ||||||
Diversified telecommunication services: 0.46% | ||||||
AT&T, Inc. | 8,168 | $130,280 | ||||
Verizon Communications, Inc. | 4,803 | 178,623 | ||||
308,903 | ||||||
Entertainment: 0.89% | ||||||
Activision Blizzard, Inc.† | 817 | 68,873 | ||||
Electronic Arts, Inc. | 298 | 38,650 | ||||
Live Nation Entertainment, Inc.† | 164 | 14,942 | ||||
Netflix, Inc.† | 508 | 223,769 | ||||
Take-Two Interactive Software, Inc.† | 181 | 26,636 | ||||
Walt Disney Co.† | 2,088 | 186,417 | ||||
Warner Bros Discovery, Inc.† | 2,533 | 31,764 | ||||
591,051 | ||||||
Interactive media & services: 3.41% | ||||||
Alphabet, Inc. Class A† | 6,788 | 812,524 | ||||
Alphabet, Inc. Class C† | 5,839 | 706,344 | ||||
Match Group, Inc.† | 318 | 13,308 | ||||
Meta Platforms, Inc. Class A† | 2,528 | 725,485 | ||||
2,257,661 | ||||||
Media: 0.48% | ||||||
Charter Communications, Inc. Class A† | 119 | 43,717 | ||||
Comcast Corp. Class A | 4,752 | 197,446 | ||||
Fox Corp. Class A | 307 | 10,438 | ||||
Fox Corp. Class B | 156 | 4,975 | ||||
Interpublic Group of Cos., Inc. | 441 | 17,014 | ||||
News Corp. Class A | 435 | 8,483 | ||||
News Corp. Class B | 134 | 2,642 | ||||
Omnicom Group, Inc. | 228 | 21,694 | ||||
Paramount Global Class B | 579 | 9,212 | ||||
315,621 | ||||||
Wireless telecommunication services: 0.14% | ||||||
T-Mobile U.S., Inc.† | 658 | 91,396 | ||||
Consumer discretionary: 6.83% | ||||||
Automobile components: 0.07% | ||||||
Aptiv PLC† | 309 | 31,546 | ||||
BorgWarner, Inc. | 268 | 13,108 | ||||
44,654 | ||||||
Automobiles: 1.41% | ||||||
Ford Motor Co. | 4,490 | 67,934 | ||||
General Motors Co. | 1,588 | 61,233 | ||||
Tesla, Inc.† | 3,078 | 805,728 | ||||
934,895 | ||||||
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 9
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Broadline retail: 2.07% | ||||||
Amazon.com, Inc.† | 10,199 | $1,329,542 | ||||
eBay, Inc. | 611 | 27,305 | ||||
Etsy, Inc.† | 141 | 11,930 | ||||
1,368,777 | ||||||
Distributors: 0.09% | ||||||
Genuine Parts Co. | 161 | 27,246 | ||||
LKQ Corp. | 290 | 16,898 | ||||
Pool Corp. | 45 | 16,859 | ||||
61,003 | ||||||
Hotels, restaurants & leisure: 1.33% | ||||||
Booking Holdings, Inc.† | 42 | 113,414 | ||||
Caesars Entertainment, Inc.† | 246 | 12,539 | ||||
Carnival Corp.† | 1,148 | 21,617 | ||||
Chipotle Mexican Grill, Inc.† | 32 | 68,448 | ||||
Darden Restaurants, Inc. | 138 | 23,057 | ||||
Domino’s Pizza, Inc. | 40 | 13,480 | ||||
Expedia Group, Inc.† | 163 | 17,830 | ||||
Hilton Worldwide Holdings, Inc. | 302 | 43,956 | ||||
Las Vegas Sands Corp.† | 375 | 21,750 | ||||
Marriott International, Inc. Class A | 295 | 54,188 | ||||
McDonald’s Corp. | 834 | 248,874 | ||||
MGM Resorts International† | 345 | 15,152 | ||||
Norwegian Cruise Line Holdings Ltd.† | 485 | 10,558 | ||||
Royal Caribbean Cruises Ltd.† | 251 | 26,039 | ||||
Starbucks Corp. | 1,310 | 129,769 | ||||
Wynn Resorts Ltd. | 118 | 12,462 | ||||
Yum! Brands, Inc. | 320 | 44,336 | ||||
877,469 | ||||||
Household durables: 0.24% | ||||||
D.R. Horton, Inc. | 355 | 43,200 | ||||
Garmin Ltd. | 175 | 18,251 | ||||
Lennar Corp. Class A | 290 | 36,340 | ||||
Mohawk Industries, Inc.† | 60 | 6,189 | ||||
Newell Brands, Inc. | 431 | 3,750 | ||||
NVR, Inc.† | 3 | 19,052 | ||||
PulteGroup, Inc. | 255 | 19,808 | ||||
Whirlpool Corp. | 63 | 9,374 | ||||
155,964 | ||||||
Leisure products: 0.01% | ||||||
Hasbro, Inc. | 149 | 9,651 | ||||
Specialty retail: 1.34% | ||||||
Advance Auto Parts, Inc. | 68 | 4,780 | ||||
AutoZone, Inc.† | 21 | 52,361 | ||||
Bath & Body Works, Inc. | 262 | 9,825 | ||||
The accompanying notes are an integral part of these financial statements.
10 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Specialty retail (continued) | ||||||
Best Buy Co., Inc. | 222 | $18,193 | ||||
CarMax, Inc.† | 181 | 15,150 | ||||
Home Depot, Inc. | 1,157 | 359,410 | ||||
Lowe’s Cos., Inc. | 681 | 153,702 | ||||
O’Reilly Automotive, Inc.† | 70 | 66,871 | ||||
Ross Stores, Inc. | 391 | 43,843 | ||||
TJX Cos., Inc. | 1,316 | 111,584 | ||||
Tractor Supply Co. | 125 | 27,637 | ||||
Ulta Beauty, Inc.† | 57 | 26,824 | ||||
890,180 | ||||||
Textiles, apparel & luxury goods: 0.27% | ||||||
NIKE, Inc. Class B | 1,408 | 155,401 | ||||
Ralph Lauren Corp. | 47 | 5,795 | ||||
Tapestry, Inc. | 265 | 11,342 | ||||
VF Corp. | 377 | 7,197 | ||||
179,735 | ||||||
Consumer staples: 4.28% | ||||||
Beverages: 1.08% | ||||||
Brown-Forman Corp. Class B | 209 | 13,957 | ||||
Coca-Cola Co. | 4,447 | 267,798 | ||||
Constellation Brands, Inc. Class A | 184 | 45,288 | ||||
Keurig Dr Pepper, Inc. | 962 | 30,082 | ||||
Molson Coors Beverage Co. Class B | 215 | 14,156 | ||||
Monster Beverage Corp.† | 873 | 50,145 | ||||
PepsiCo, Inc. | 1,574 | 291,536 | ||||
712,962 | ||||||
Consumer staples distribution & retail: 1.17% | ||||||
Costco Wholesale Corp. | 507 | 272,959 | ||||
Dollar General Corp. | 250 | 42,445 | ||||
Dollar Tree, Inc.† | 238 | 34,153 | ||||
Kroger Co. | 746 | 35,062 | ||||
Sysco Corp. | 579 | 42,962 | ||||
Target Corp. | 527 | 69,511 | ||||
Walgreens Boots Alliance, Inc. | 818 | 23,305 | ||||
Walmart, Inc. | 1,603 | 251,959 | ||||
772,356 | ||||||
Food products: 0.67% | ||||||
Archer-Daniels-Midland Co. | 622 | 46,998 | ||||
Bunge Ltd. | 172 | 16,228 | ||||
Campbell Soup Co. | 229 | 10,467 | ||||
Conagra Brands, Inc. | 545 | 18,377 | ||||
General Mills, Inc. | 671 | 51,466 | ||||
Hershey Co. | 168 | 41,950 | ||||
Hormel Foods Corp. | 331 | 13,313 | ||||
J M Smucker Co. | 122 | 18,016 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 11
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Food products (continued) | ||||||
Kellogg Co. | 294 | $19,816 | ||||
Kraft Heinz Co. | 911 | 32,340 | ||||
Lamb Weston Holdings, Inc. | 166 | 19,082 | ||||
McCormick & Co., Inc. | 287 | 25,035 | ||||
Mondelez International, Inc. Class A | 1,556 | 113,495 | ||||
Tyson Foods, Inc. Class A | 326 | 16,639 | ||||
443,222 | ||||||
Household products: 0.88% | ||||||
Church & Dwight Co., Inc. | 279 | 27,964 | ||||
Clorox Co. | 141 | 22,425 | ||||
Colgate-Palmolive Co. | 948 | 73,034 | ||||
Kimberly-Clark Corp. | 385 | 53,153 | ||||
Procter & Gamble Co. | 2,693 | 408,636 | ||||
585,212 | ||||||
Personal care products: 0.08% | ||||||
Estee Lauder Cos., Inc. Class A | 265 | 52,041 | ||||
Tobacco: 0.40% | ||||||
Altria Group, Inc. | 2,040 | 92,412 | ||||
Philip Morris International, Inc. | 1,773 | 173,080 | ||||
265,492 | ||||||
Energy: 2.64% | ||||||
Energy equipment & services: 0.23% | ||||||
Baker Hughes Co. | 1,157 | 36,573 | ||||
Halliburton Co. | 1,031 | 34,013 | ||||
Schlumberger NV | 1,629 | 80,016 | ||||
150,602 | ||||||
Oil, gas & consumable fuels: 2.41% | ||||||
APA Corp. | 353 | 12,062 | ||||
Chevron Corp. | 1,991 | 313,284 | ||||
ConocoPhillips† | 1,383 | 143,292 | ||||
Coterra Energy, Inc. | 865 | 21,884 | ||||
Devon Energy Corp. | 733 | 35,433 | ||||
Diamondback Energy, Inc. | 207 | 27,191 | ||||
EOG Resources, Inc. | 668 | 76,446 | ||||
EQT Corp. | 413 | 16,987 | ||||
Exxon Mobil Corp. | 4,619 | 495,388 | ||||
Hess Corp. | 316 | 42,960 | ||||
Kinder Morgan, Inc. | 2,253 | 38,797 | ||||
Marathon Oil Corp. | 706 | 16,252 | ||||
Marathon Petroleum Corp. | 485 | 56,551 | ||||
Occidental Petroleum Corp. | 821 | 48,275 | ||||
ONEOK, Inc. | 511 | 31,539 | ||||
Phillips 66 | 524 | 49,979 | ||||
Pioneer Natural Resources Co. | 267 | 55,317 | ||||
The accompanying notes are an integral part of these financial statements.
12 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Oil, gas & consumable fuels (continued) | ||||||
Targa Resources Corp. | 258 | $19,634 | ||||
Valero Energy Corp. | 413 | 48,445 | ||||
Williams Cos., Inc. | 1,392 | 45,421 | ||||
1,595,137 | ||||||
Financials: 7.96% | ||||||
Banks: 1.92% | ||||||
Bank of America Corp. | 7,922 | 227,282 | ||||
Citigroup, Inc. | 2,224 | 102,393 | ||||
Citizens Financial Group, Inc. | 553 | 14,422 | ||||
Comerica, Inc. | 150 | 6,354 | ||||
Fifth Third Bancorp | 778 | 20,391 | ||||
Huntington Bancshares, Inc. | 1,649 | 17,776 | ||||
JPMorgan Chase & Co. | 3,339 | 485,624 | ||||
KeyCorp | 1,069 | 9,878 | ||||
M&T Bank Corp. | 190 | 23,515 | ||||
PNC Financial Services Group, Inc. | 456 | 57,433 | ||||
Regions Financial Corp. | 1,072 | 19,103 | ||||
Truist Financial Corp. | 1,522 | 46,193 | ||||
U.S. Bancorp | 1,594 | 52,666 | ||||
Wells Fargo & Co. | 4,287 | 182,969 | ||||
Zions Bancorp NA | 169 | 4,539 | ||||
1,270,538 | ||||||
Capital markets: 1.70% | ||||||
Ameriprise Financial, Inc. | 119 | 39,527 | ||||
Bank of New York Mellon Corp. | 820 | 36,506 | ||||
BlackRock, Inc. | 171 | 118,185 | ||||
Cboe Global Markets, Inc. | 121 | 16,699 | ||||
Charles Schwab Corp. | 1,698 | 96,243 | ||||
CME Group, Inc. | 411 | 76,154 | ||||
FactSet Research Systems, Inc. | 44 | 17,629 | ||||
Franklin Resources, Inc. | 326 | 8,708 | ||||
Goldman Sachs Group, Inc. | 380 | 122,565 | ||||
Intercontinental Exchange, Inc. | 640 | 72,371 | ||||
Invesco Ltd. | 523 | 8,792 | ||||
MarketAxess Holdings, Inc. | 43 | 11,241 | ||||
Moody’s Corp. | 180 | 62,590 | ||||
Morgan Stanley | 1,488 | 127,075 | ||||
MSCI, Inc. | 91 | 42,705 | ||||
Nasdaq, Inc. | 387 | 19,292 | ||||
Northern Trust Corp. | 238 | 17,645 | ||||
Raymond James Financial, Inc. | 218 | 22,622 | ||||
S&P Global, Inc. | 375 | 150,334 | ||||
State Street Corp. | 382 | 27,955 | ||||
T Rowe Price Group, Inc. | 257 | 28,789 | ||||
1,123,627 | ||||||
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 13
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Consumer finance: 0.33% | ||||||
American Express Co. | 679 | $118,282 | ||||
Capital One Financial Corp. | 436 | 47,685 | ||||
Discover Financial Services | 290 | 33,887 | ||||
Synchrony Financial | 490 | 16,621 | ||||
216,475 | ||||||
Financial services: 2.69% | ||||||
Berkshire Hathaway, Inc. Class B† | 2,038 | 694,958 | ||||
Fidelity National Information Services, Inc. | 677 | 37,032 | ||||
Fiserv, Inc.† | 705 | 88,936 | ||||
FleetCor Technologies, Inc.† | 84 | 21,091 | ||||
Global Payments, Inc. | 299 | 29,457 | ||||
Jack Henry & Associates, Inc. | 83 | 13,888 | ||||
Mastercard, Inc. Class A | 956 | 375,995 | ||||
PayPal Holdings, Inc.† | 1,275 | 85,081 | ||||
Visa, Inc. Class A | 1,849 | 439,100 | ||||
1,785,538 | ||||||
Insurance: 1.32% | ||||||
Aflac, Inc. | 628 | 43,834 | ||||
Allstate Corp. | 300 | 32,712 | ||||
American International Group, Inc. | 827 | 47,586 | ||||
Aon PLC Class A | 233 | 80,432 | ||||
Arch Capital Group Ltd.† | 426 | 31,886 | ||||
Arthur J Gallagher & Co. | 245 | 53,795 | ||||
Assurant, Inc. | 61 | 7,669 | ||||
Brown & Brown, Inc. | 269 | 18,518 | ||||
Chubb Ltd. | 473 | 91,081 | ||||
Cincinnati Financial Corp. | 180 | 17,518 | ||||
Everest Re Group Ltd. | 49 | 16,751 | ||||
Globe Life, Inc. | 102 | 11,181 | ||||
Hartford Financial Services Group, Inc. | 354 | 25,495 | ||||
Lincoln National Corp. | 176 | 4,534 | ||||
Loews Corp. | 216 | 12,826 | ||||
Marsh & McLennan Cos., Inc. | 565 | 106,265 | ||||
MetLife, Inc. | 735 | 41,549 | ||||
Principal Financial Group, Inc. | 258 | 19,567 | ||||
Progressive Corp. | 669 | 88,555 | ||||
Prudential Financial, Inc. | 417 | 36,788 | ||||
Travelers Cos., Inc. | 264 | 45,846 | ||||
W R Berkley Corp. | 229 | 13,639 | ||||
Willis Towers Watson PLC | 122 | 28,731 | ||||
876,758 | ||||||
Health care: 8.61% | ||||||
Biotechnology: 1.23% | ||||||
AbbVie, Inc. | 2,016 | 271,616 | ||||
Amgen, Inc. | 611 | 135,654 | ||||
Biogen, Inc.† | 165 | 47,000 | ||||
The accompanying notes are an integral part of these financial statements.
14 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Biotechnology (continued) | ||||||
Gilead Sciences, Inc. | 1,425 | $109,825 | ||||
Incyte Corp.† | 212 | 13,197 | ||||
Moderna, Inc.† | 375 | 45,562 | ||||
Regeneron Pharmaceuticals, Inc.† | 123 | 88,380 | ||||
Vertex Pharmaceuticals, Inc.† | 294 | 103,462 | ||||
814,696 | ||||||
Health care equipment & supplies: 1.86% | ||||||
Abbott Laboratories | 1,987 | 216,623 | ||||
Align Technology, Inc.† | 81 | 28,645 | ||||
Baxter International, Inc. | 578 | 26,334 | ||||
Becton Dickinson & Co. | 325 | 85,803 | ||||
Boston Scientific Corp.† | 1,643 | 88,870 | ||||
Cooper Cos., Inc. | 57 | 21,855 | ||||
Dentsply Sirona Inc. | 243 | 9,725 | ||||
Dexcom, Inc.† | 443 | 56,930 | ||||
Edwards Lifesciences Corp.† | 693 | 65,371 | ||||
GE HealthCare Technologies, Inc. | 447 | 36,314 | ||||
Hologic, Inc.† | 281 | 22,752 | ||||
IDEXX Laboratories, Inc.† | 95 | 47,712 | ||||
Insulet Corp.† | 80 | 23,067 | ||||
Intuitive Surgical, Inc.† | 400 | 136,776 | ||||
Medtronic PLC | 1,520 | 133,912 | ||||
ResMed, Inc. | 168 | 36,708 | ||||
STERIS PLC | 113 | 25,423 | ||||
Stryker Corp. | 386 | 117,765 | ||||
Teleflex, Inc. | 54 | 13,069 | ||||
Zimmer Biomet Holdings, Inc. | 238 | 34,653 | ||||
1,228,307 | ||||||
Health care providers & services: 1.85% | ||||||
AmerisourceBergen Corp. | 185 | 35,600 | ||||
Cardinal Health, Inc. | 291 | 27,520 | ||||
Centene Corp.† | 627 | 42,291 | ||||
Cigna Group | 338 | 94,843 | ||||
CVS Health Corp. | 1,465 | 101,275 | ||||
DaVita, Inc.† | 63 | 6,330 | ||||
Elevance Health, Inc. | 271 | 120,403 | ||||
HCA Healthcare, Inc. | 236 | 71,621 | ||||
Henry Schein, Inc.† | 150 | 12,165 | ||||
Humana, Inc. | 143 | 63,940 | ||||
Laboratory Corp. of America Holdings | 101 | 24,374 | ||||
McKesson Corp. | 155 | 66,233 | ||||
Molina Healthcare, Inc.† | 67 | 20,183 | ||||
Quest Diagnostics, Inc. | 128 | 17,992 | ||||
UnitedHealth Group, Inc. | 1,064 | 511,401 | ||||
Universal Health Services, Inc. Class B | 72 | 11,359 | ||||
1,227,530 | ||||||
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 15
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Life sciences tools & services: 1.01% | ||||||
Agilent Technologies, Inc. | 338 | $40,644 | ||||
Bio-Rad Laboratories, Inc. Class A† | 24 | 9,099 | ||||
Bio-Techne Corp. | 180 | 14,693 | ||||
Charles River Laboratories International, Inc.† | 58 | 12,195 | ||||
Danaher Corp. | 759 | 182,160 | ||||
Illumina, Inc.† | 181 | 33,936 | ||||
IQVIA Holdings, Inc.† | 212 | 47,651 | ||||
Mettler-Toledo International, Inc.† | 25 | 32,791 | ||||
Revvity, Inc. | 143 | 16,987 | ||||
Thermo Fisher Scientific, Inc. | 441 | 230,092 | ||||
Waters Corp.† | 67 | 17,858 | ||||
West Pharmaceutical Services, Inc. | 85 | 32,510 | ||||
670,616 | ||||||
Pharmaceuticals: 2.66% | ||||||
Bristol-Myers Squibb Co. | 2,400 | 153,480 | ||||
Catalent, Inc.† | 206 | 8,932 | ||||
Eli Lilly & Co. | 900 | 422,082 | ||||
Johnson & Johnson | 2,969 | 491,429 | ||||
Merck & Co., Inc. | 2,899 | 334,516 | ||||
Organon & Co. | 291 | 6,056 | ||||
Pfizer, Inc. | 6,450 | 236,586 | ||||
Viatris, Inc. | 1,370 | 13,672 | ||||
Zoetis, Inc. | 528 | 90,927 | ||||
1,757,680 | ||||||
Industrials: 5.51% | ||||||
Aerospace & defense: 1.07% | ||||||
Axon Enterprise, Inc.† | 80 | 15,610 | ||||
Boeing Co.† | 646 | 136,409 | ||||
General Dynamics Corp. | 257 | 55,294 | ||||
Howmet Aerospace, Inc. | 420 | 20,815 | ||||
Huntington Ingalls Industries, Inc. | 46 | 10,470 | ||||
L3Harris Technologies, Inc. | 216 | 42,286 | ||||
Lockheed Martin Corp. | 258 | 118,778 | ||||
Northrop Grumman Corp. | 163 | 74,295 | ||||
Raytheon Technologies Corp. | 1,669 | 163,495 | ||||
Textron, Inc. | 230 | 15,555 | ||||
TransDigm Group, Inc. | 60 | 53,650 | ||||
706,657 | ||||||
Air freight & logistics: 0.37% | ||||||
CH Robinson Worldwide, Inc. | 133 | 12,548 | ||||
Expeditors International of Washington, Inc. | 175 | 21,198 | ||||
FedEx Corp. | 264 | 65,446 | ||||
United Parcel Service, Inc. Class B | 828 | 148,419 | ||||
247,611 | ||||||
The accompanying notes are an integral part of these financial statements.
16 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Building products: 0.28% | ||||||
A O Smith Corp. | 142 | $10,335 | ||||
Allegion PLC | 100 | 12,002 | ||||
Carrier Global Corp. | 954 | 47,423 | ||||
Johnson Controls International PLC | 784 | 53,422 | ||||
Masco Corp. | 257 | 14,746 | ||||
Trane Technologies PLC | 261 | 49,919 | ||||
187,847 | ||||||
Commercial services & supplies: 0.33% | ||||||
Cintas Corp. | 99 | 49,211 | ||||
Copart, Inc.† | 490 | 44,693 | ||||
Republic Services, Inc. | 235 | 35,995 | ||||
Rollins, Inc. | 265 | 11,350 | ||||
Waste Management, Inc. | 423 | 73,356 | ||||
214,605 | ||||||
Construction & engineering: 0.05% | ||||||
Quanta Services, Inc. | 166 | 32,611 | ||||
Electrical equipment: 0.37% | ||||||
AMETEK, Inc. | 263 | 42,574 | ||||
Eaton Corp. PLC | 455 | 91,501 | ||||
Emerson Electric Co. | 653 | 59,025 | ||||
Generac Holdings, Inc.† | 71 | 10,588 | ||||
Rockwell Automation, Inc. | 131 | 43,158 | ||||
246,846 | ||||||
Ground transportation: 0.51% | ||||||
CSX Corp. | 2,323 | 79,214 | ||||
J.B. Hunt Transport Services, Inc. | 95 | 17,198 | ||||
Norfolk Southern Corp. | 260 | 58,958 | ||||
Old Dominion Freight Line, Inc. | 103 | 38,084 | ||||
Union Pacific Corp. | 697 | 142,620 | ||||
336,074 | ||||||
Industrial conglomerates: 0.54% | ||||||
3M Co. | 630 | 63,057 | ||||
General Electric Co. | 1,244 | 136,653 | ||||
Honeywell International, Inc. | 760 | 157,700 | ||||
357,410 | ||||||
Machinery: 1.14% | ||||||
Caterpillar, Inc. | 589 | 144,924 | ||||
Cummins, Inc. | 162 | 39,716 | ||||
Deere & Co. | 308 | 124,799 | ||||
Dover Corp. | 160 | 23,624 | ||||
Fortive Corp. | 404 | 30,207 | ||||
IDEX Corp. | 86 | 18,512 | ||||
Illinois Tool Works, Inc. | 316 | 79,051 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 17
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Machinery (continued) | ||||||
Ingersoll Rand, Inc. | 462 | $30,196 | ||||
Nordson Corp. | 61 | 15,139 | ||||
Otis Worldwide Corp. | 472 | 42,013 | ||||
PACCAR, Inc. | 597 | 49,939 | ||||
Parker-Hannifin Corp. | 147 | 57,336 | ||||
Pentair plc | 188 | 12,145 | ||||
Snap-on, Inc. | 60 | 17,291 | ||||
Stanley Black & Decker, Inc. | 175 | 16,399 | ||||
Westinghouse Air Brake Technologies Corp. | 206 | 22,592 | ||||
Xylem, Inc. | 273 | 30,745 | ||||
754,628 | ||||||
Passenger airlines: 0.15% | ||||||
Alaska Air Group, Inc.† | 146 | 7,764 | ||||
American Airlines Group, Inc.† | 746 | 13,383 | ||||
Delta Air Lines, Inc.† | 734 | 34,895 | ||||
Southwest Airlines Co. | 680 | 24,623 | ||||
United Airlines Holdings, Inc.† | 375 | 20,576 | ||||
101,241 | ||||||
Professional services: 0.53% | ||||||
Automatic Data Processing, Inc. | 472 | 103,741 | ||||
Broadridge Financial Solutions, Inc. | 135 | 22,360 | ||||
Ceridian HCM Holding, Inc.† | 177 | 11,854 | ||||
CoStar Group, Inc.† | 467 | 41,563 | ||||
Equifax, Inc. | 140 | 32,942 | ||||
Jacobs Solutions, Inc. | 145 | 17,239 | ||||
Leidos Holdings, Inc. | 157 | 13,891 | ||||
Paychex, Inc. | 367 | 41,056 | ||||
Paycom Software, Inc. | 56 | 17,990 | ||||
Robert Half International, Inc. | 123 | 9,252 | ||||
Verisk Analytics, Inc. | 165 | 37,295 | ||||
349,183 | ||||||
Trading companies & distributors: 0.17% | ||||||
Fastenal Co. | 652 | 38,462 | ||||
United Rentals, Inc. | 79 | 35,184 | ||||
WW Grainger, Inc. | 51 | 40,218 | ||||
113,864 | ||||||
Information technology: 18.12% | ||||||
Communications equipment: 0.55% | ||||||
Arista Networks, Inc.† | 285 | 46,187 | ||||
Cisco Systems, Inc. | 4,680 | 242,143 | ||||
F5, Inc.† | 69 | 10,092 | ||||
Juniper Networks, Inc. | 367 | 11,498 | ||||
Motorola Solutions, Inc. | 192 | 56,310 | ||||
366,230 | ||||||
The accompanying notes are an integral part of these financial statements.
18 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Electronic equipment, instruments & components: 0.39% | ||||||
Amphenol Corp. Class A | 680 | $57,766 | ||||
CDW Corp. | 154 | 28,259 | ||||
Corning, Inc. | 874 | 30,625 | ||||
Keysight Technologies, Inc.† | 204 | 34,160 | ||||
TE Connectivity Ltd. | 360 | 50,457 | ||||
Teledyne Technologies, Inc.† | 54 | 22,200 | ||||
Trimble, Inc.† | 283 | 14,982 | ||||
Zebra Technologies Corp. Class A† | 59 | 17,454 | ||||
255,903 | ||||||
IT services: 0.74% | ||||||
Accenture PLC Class A | 722 | 222,795 | ||||
Akamai Technologies, Inc.† | 174 | 15,637 | ||||
Cognizant Technology Solutions Corp. Class A | 580 | 37,862 | ||||
DXC Technology Co.† | 260 | 6,947 | ||||
EPAM Systems, Inc.† | 66 | 14,834 | ||||
Gartner, Inc.† | 90 | 31,528 | ||||
International Business Machines Corp. | 1,037 | 138,761 | ||||
VeriSign, Inc.† | 103 | 23,275 | ||||
491,639 | ||||||
Semiconductors & semiconductor equipment: 4.72% | ||||||
Advanced Micro Devices, Inc.† | 1,840 | 209,594 | ||||
Analog Devices, Inc. | 578 | 112,600 | ||||
Applied Materials, Inc. | 966 | 139,626 | ||||
Broadcom, Inc. | 476 | 412,897 | ||||
Enphase Energy, Inc.† | 157 | 26,294 | ||||
First Solar, Inc.† | 114 | 21,670 | ||||
Intel Corp. | 4,766 | 159,375 | ||||
KLA Corp. | 157 | 76,148 | ||||
Lam Research Corp. | 153 | 98,358 | ||||
Microchip Technology, Inc. | 626 | 56,083 | ||||
Micron Technology, Inc. | 1,250 | 78,888 | ||||
Monolithic Power Systems, Inc. | 51 | 27,552 | ||||
NVIDIA Corp. | 2,826 | 1,195,455 | ||||
NXP Semiconductors NV | 297 | 60,790 | ||||
ON Semiconductor Corp.† | 493 | 46,628 | ||||
Qorvo, Inc.† | 114 | 11,631 | ||||
QUALCOMM, Inc. | 1,273 | 151,538 | ||||
Skyworks Solutions, Inc. | 182 | 20,146 | ||||
SolarEdge Technologies, Inc.† | 64 | 17,219 | ||||
Teradyne, Inc. | 177 | 19,705 | ||||
Texas Instruments, Inc. | 1,037 | 186,681 | ||||
3,128,878 | ||||||
Software: 6.62% | ||||||
Adobe, Inc.† | 524 | 256,231 | ||||
ANSYS, Inc.† | 99 | 32,697 | ||||
Autodesk, Inc.† | 245 | 50,129 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 19
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Software (continued) | ||||||
Cadence Design Systems, Inc.† | 312 | $73,170 | ||||
Fair Isaac Corp.† | 29 | 23,467 | ||||
Fortinet, Inc.† | 745 | 56,315 | ||||
Gen Digital, Inc. | 650 | 12,058 | ||||
Intuit, Inc. | 321 | 147,079 | ||||
Microsoft Corp. | 8,495 | 2,892,887 | ||||
Oracle Corp. | 1,758 | 209,360 | ||||
Palo Alto Networks, Inc.† | 346 | 88,406 | ||||
PTC, Inc.† | 122 | 17,361 | ||||
Roper Technologies, Inc. | 122 | 58,658 | ||||
Salesforce, Inc.† | 1,119 | 236,400 | ||||
ServiceNow, Inc.† | 233 | 130,939 | ||||
Synopsys, Inc.† | 174 | 75,761 | ||||
Tyler Technologies, Inc.† | 48 | 19,991 | ||||
4,380,909 | ||||||
Technology hardware, storage & peripherals: 5.10% | ||||||
Apple, Inc. | 16,893 | 3,276,735 | ||||
Hewlett Packard Enterprise Co. | 1,481 | 24,881 | ||||
HP, Inc. | 990 | 30,403 | ||||
NetApp, Inc. | 244 | 18,642 | ||||
Seagate Technology Holdings PLC | 220 | 13,611 | ||||
Western Digital Corp.† | 366 | 13,882 | ||||
3,378,154 | ||||||
Materials: 1.60% | ||||||
Chemicals: 1.10% | ||||||
Air Products & Chemicals, Inc. | 254 | 76,081 | ||||
Albemarle Corp. | 134 | 29,894 | ||||
Celanese Corp. | 114 | 13,201 | ||||
CF Industries Holdings, Inc. | 223 | 15,481 | ||||
Corteva, Inc. | 812 | 46,527 | ||||
Dow, Inc. | 808 | 43,034 | ||||
DuPont de Nemours, Inc. | 524 | 37,434 | ||||
Eastman Chemical Co. | 136 | 11,386 | ||||
Ecolab, Inc. | 283 | 52,833 | ||||
FMC Corp. | 143 | 14,921 | ||||
International Flavors & Fragrances, Inc. | 291 | 23,161 | ||||
Linde PLC | 559 | 213,024 | ||||
LyondellBasell Industries NV Class A | 290 | 26,631 | ||||
Mosaic Co. | 379 | 13,265 | ||||
PPG Industries, Inc. | 269 | 39,893 | ||||
Sherwin-Williams Co. | 268 | 71,159 | ||||
727,925 | ||||||
Construction materials: 0.10% | ||||||
Martin Marietta Materials, Inc. | 71 | 32,780 | ||||
Vulcan Materials Co. | 152 | 34,267 | ||||
67,047 | ||||||
The accompanying notes are an integral part of these financial statements.
20 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Containers & packaging: 0.14% | ||||||
Amcor PLC | 1,681 | $16,776 | ||||
Avery Dennison Corp. | 92 | 15,806 | ||||
Ball Corp. | 359 | 20,897 | ||||
International Paper Co. | 397 | 12,629 | ||||
Packaging Corp. of America | 103 | 13,612 | ||||
Sealed Air Corp. | 165 | 6,600 | ||||
Westrock Co. | 293 | 8,518 | ||||
94,838 | ||||||
Metals & mining: 0.26% | ||||||
Freeport-McMoRan, Inc. | 1,638 | 65,520 | ||||
Newmont Corp. | 908 | 38,735 | ||||
Nucor Corp. | 287 | 47,062 | ||||
Steel Dynamics, Inc. | 183 | 19,934 | ||||
171,251 | ||||||
Real estate: 1.54% | ||||||
Health care REITs: 0.12% | ||||||
Healthpeak Properties, Inc. | 625 | 12,562 | ||||
Ventas, Inc. | 457 | 21,602 | ||||
Welltower, Inc. | 568 | 45,946 | ||||
80,110 | ||||||
Hotel & resort REITs: 0.02% | ||||||
Host Hotels & Resorts, Inc. | 813 | 13,683 | ||||
Industrial REITs : 0.20% | ||||||
Prologis, Inc. | 1,055 | 129,375 | ||||
Office REITs : 0.05% | ||||||
Alexandria Real Estate Equities, Inc. | 180 | 20,428 | ||||
Boston Properties, Inc. | 163 | 9,387 | ||||
29,815 | ||||||
Real estate management & development: 0.04% | ||||||
CBRE Group, Inc. Class A† | 355 | 28,652 | ||||
Residential REITs : 0.22% | ||||||
AvalonBay Communities, Inc. | 162 | 30,662 | ||||
Camden Property Trust | 122 | 13,282 | ||||
Equity Residential | 390 | 25,728 | ||||
Essex Property Trust, Inc. | 73 | 17,104 | ||||
Invitation Homes, Inc. | 664 | 22,842 | ||||
Mid-America Apartment Communities, Inc. | 133 | 20,197 | ||||
UDR, Inc. | 354 | 15,208 | ||||
145,023 | ||||||
Retail REITs : 0.18% | ||||||
Federal Realty Investment Trust | 84 | 8,129 | ||||
Kimco Realty Corp. | 708 | 13,962 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 21
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Retail REITs (continued) | ||||||
Realty Income Corp. | 769 | $45,978 | ||||
Regency Centers Corp. | 176 | 10,872 | ||||
Simon Property Group, Inc. | 374 | 43,189 | ||||
122,130 | ||||||
Specialized REITs : 0.71% | ||||||
American Tower Corp. | 532 | 103,176 | ||||
Crown Castle, Inc. | 495 | 56,400 | ||||
Digital Realty Trust, Inc. | 333 | 37,919 | ||||
Equinix, Inc. | 107 | 83,882 | ||||
Extra Space Storage, Inc. | 154 | 22,923 | ||||
Iron Mountain, Inc. | 333 | 18,921 | ||||
Public Storage | 181 | 52,830 | ||||
SBA Communications Corp. | 124 | 28,738 | ||||
VICI Properties, Inc. | 1,147 | 36,050 | ||||
Weyerhaeuser Co. | 837 | 28,048 | ||||
468,887 | ||||||
Utilities: 1.65% | ||||||
Electric utilities: 1.08% | ||||||
Alliant Energy Corp. | 287 | 15,062 | ||||
American Electric Power Co., Inc. | 588 | 49,510 | ||||
Constellation Energy Corp. | 371 | 33,965 | ||||
Duke Energy Corp. | 881 | 79,061 | ||||
Edison International | 438 | 30,419 | ||||
Entergy Corp. | 242 | 23,564 | ||||
Evergy, Inc. | 262 | 15,306 | ||||
Eversource Energy | 399 | 28,297 | ||||
Exelon Corp. | 1,136 | 46,281 | ||||
FirstEnergy Corp. | 622 | 24,183 | ||||
NextEra Energy, Inc. | 2,312 | 171,550 | ||||
NRG Energy, Inc. | 263 | 9,834 | ||||
PG&E Corp.† | 1,847 | 31,916 | ||||
Pinnacle West Capital Corp. | 129 | 10,508 | ||||
PPL Corp. | 842 | 22,279 | ||||
Southern Co. | 1,246 | 87,531 | ||||
Xcel Energy, Inc. | 629 | 39,105 | ||||
718,371 | ||||||
Gas utilities: 0.03% | ||||||
Atmos Energy Corp. | 165 | 19,196 | ||||
Independent power and renewable electricity producers: 0.02% | ||||||
AES Corp. | 765 | 15,858 | ||||
Multi-utilities: 0.47% | ||||||
Ameren Corp. | 300 | 24,501 | ||||
CenterPoint Energy, Inc. | 721 | 21,017 | ||||
CMS Energy Corp. | 333 | 19,564 | ||||
Consolidated Edison, Inc. | 396 | 35,798 | ||||
The accompanying notes are an integral part of these financial statements.
22 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Multi-utilities (continued) | ||||||
Dominion Energy, Inc. | 955 | $49,460 | ||||
DTE Energy Co. | 235 | 25,855 | ||||
NiSource, Inc. | 472 | 12,909 | ||||
Public Service Enterprise Group, Inc. | 570 | 35,688 | ||||
Sempra Energy | 360 | 52,412 | ||||
WEC Energy Group, Inc. | 360 | 31,766 | ||||
308,970 | ||||||
Water utilities: 0.05% | ||||||
American Water Works Co., Inc. | 222 | 31,691 | ||||
Total common stocks (Cost $20,092,426) | 42,458,861 | |||||
Interest rate | Maturity date | Principal | ||||
U.S. Treasury securities: 32.71% | ||||||
U.S. Treasury Bonds | 1.13 % | 5-15-2040 | $ | 199,000 | 129,000 | |
U.S. Treasury Bonds | 1.13 | 8-15-2040 | 145,000 | 93,230 | ||
U.S. Treasury Bonds | 1.25 | 5-15-2050 | 60,000 | 33,738 | ||
U.S. Treasury Bonds | 1.38 | 11-15-2040 | 87,000 | 58,208 | ||
U.S. Treasury Bonds | 1.38 | 8-15-2050 | 151,000 | 87,739 | ||
U.S. Treasury Bonds | 1.63 | 11-15-2050 | 87,000 | 54,028 | ||
U.S. Treasury Bonds | 1.88 | 2-15-2041 | 208,000 | 151,052 | ||
U.S. Treasury Bonds | 1.88 | 2-15-2051 | 221,000 | 146,335 | ||
U.S. Treasury Bonds | 1.88 | 11-15-2051 | 105,000 | 69,308 | ||
U.S. Treasury Bonds | 2.00 | 8-15-2051 | 629,000 | 428,776 | ||
U.S. Treasury Bonds | 2.25 | 5-15-2041 | 201,000 | 154,801 | ||
U.S. Treasury Bonds | 2.25 | 8-15-2046 | 106,000 | 77,442 | ||
U.S. Treasury Bonds | 2.25 | 8-15-2049 | 108,000 | 78,465 | ||
U.S. Treasury Bonds | 2.25 | 2-15-2052 | 70,000 | 50,586 | ||
U.S. Treasury Bonds | 2.38 | 5-15-2051 | 224,000 | 166,539 | ||
U.S. Treasury Bonds | 2.50 | 2-15-2045 | 116,000 | 89,809 | ||
U.S. Treasury Bonds | 2.50 | 2-15-2046 | 106,000 | 81,591 | ||
U.S. Treasury Bonds | 2.50 | 5-15-2046 | 105,000 | 80,739 | ||
U.S. Treasury Bonds | 2.75 | 8-15-2047 | 101,000 | 81,242 | ||
U.S. Treasury Bonds | 2.75 | 11-15-2047 | 100,000 | 80,434 | ||
U.S. Treasury Bonds | 2.88 | 8-15-2045 | 115,000 | 94,897 | ||
U.S. Treasury Bonds | 2.88 | 11-15-2046 | 154,000 | 126,924 | ||
U.S. Treasury Bonds | 3.00 | 11-15-2044 | 114,000 | 96,468 | ||
U.S. Treasury Bonds | 3.00 | 5-15-2045 | 116,000 | 97,970 | ||
U.S. Treasury Bonds | 3.00 | 11-15-2045 | 115,000 | 96,982 | ||
U.S. Treasury Bonds | 3.00 | 2-15-2047 | 106,000 | 89,247 | ||
U.S. Treasury Bonds | 3.00 | 5-15-2047 | 104,000 | 87,575 | ||
U.S. Treasury Bonds | 3.00 | 2-15-2048 | 114,000 | 96,121 | ||
U.S. Treasury Bonds | 3.00 | 8-15-2048 | 121,000 | 102,084 | ||
U.S. Treasury Bonds | 3.00 | 2-15-2049 | 140,000 | 118,393 | ||
U.S. Treasury Bonds | 3.13 | 11-15-2041 | 37,000 | 32,582 | ||
U.S. Treasury Bonds | 3.13 | 8-15-2044 | 115,000 | 99,515 | ||
U.S. Treasury Bonds | 3.13 | 5-15-2048 | 123,000 | 106,102 | ||
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 23
Portfolio of investments—June 30, 2023 (unaudited)
Interest rate | Maturity date | Principal | Value | |||
U.S. Treasury securities (continued) | ||||||
U.S. Treasury Bonds | 3.38 % | 5-15-2044 | $ | 110,000 | $99,168 | |
U.S. Treasury Bonds | 3.38 | 11-15-2048 | 135,000 | 122,001 | ||
U.S. Treasury Bonds | 3.50 | 2-15-2039 | 29,000 | 27,781 | ||
U.S. Treasury Bonds | 3.63 | 2-15-2044 | 113,000 | 105,867 | ||
U.S. Treasury Bonds | 3.75 | 8-15-2041 | 36,000 | 34,772 | ||
U.S. Treasury Bonds | 3.88 | 8-15-2040 | 37,000 | 36,712 | ||
U.S. Treasury Bonds | 4.25 | 5-15-2039 | 31,000 | 32,412 | ||
U.S. Treasury Bonds | 4.25 | 11-15-2040 | 40,000 | 41,597 | ||
U.S. Treasury Bonds | 4.38 | 2-15-2038 | 133,000 | 141,541 | ||
U.S. Treasury Bonds | 4.38 | 11-15-2039 | 35,000 | 37,056 | ||
U.S. Treasury Bonds | 4.38 | 5-15-2040 | 35,000 | 36,981 | ||
U.S. Treasury Bonds | 4.38 | 5-15-2041 | 33,000 | 34,729 | ||
U.S. Treasury Bonds | 4.50 | 2-15-2036 | 26,000 | 28,059 | ||
U.S. Treasury Bonds | 4.50 | 5-15-2038 | 21,000 | 22,612 | ||
U.S. Treasury Bonds | 4.50 | 8-15-2039 | 33,000 | 35,472 | ||
U.S. Treasury Bonds | 4.63 | 2-15-2040 | 38,000 | 41,438 | ||
U.S. Treasury Bonds | 4.75 | 2-15-2037 | 103,000 | 113,944 | ||
U.S. Treasury Bonds | 4.75 | 2-15-2041 | 44,000 | 48,574 | ||
U.S. Treasury Bonds | 5.00 | 5-15-2037 | 102,000 | 115,495 | ||
U.S. Treasury Bonds | 5.25 | 11-15-2028 | 45,000 | 47,311 | ||
U.S. Treasury Bonds | 5.25 | 2-15-2029 | 33,000 | 34,810 | ||
U.S. Treasury Bonds | 5.38 | 2-15-2031 | 31,000 | 33,940 | ||
U.S. Treasury Bonds | 5.50 | 8-15-2028 | 35,000 | 37,095 | ||
U.S. Treasury Bonds | 6.00 | 2-15-2026 | 42,000 | 43,403 | ||
U.S. Treasury Bonds | 6.13 | 11-15-2027 | 49,000 | 52,658 | ||
U.S. Treasury Bonds | 6.13 | 8-15-2029 | 25,000 | 27,752 | ||
U.S. Treasury Bonds | 6.25 | 5-15-2030 | 21,000 | 23,820 | ||
U.S. Treasury Bonds | 6.38 | 8-15-2027 | 21,000 | 22,631 | ||
U.S. Treasury Bonds | 6.50 | 11-15-2026 | 28,000 | 29,789 | ||
U.S. Treasury Bonds | 6.63 | 2-15-2027 | 108,000 | 116,037 | ||
U.S. Treasury Bonds | 6.75 | 8-15-2026 | 21,000 | 22,359 | ||
U.S. Treasury Bonds | 6.88 | 8-15-2025 | 251,000 | 261,520 | ||
U.S. Treasury Bonds | 7.63 | 2-15-2025 | 115,000 | 119,456 | ||
U.S. Treasury Notes | 0.25 | 5-15-2024 | 185,000 | 176,899 | ||
U.S. Treasury Notes | 0.25 | 5-31-2025 | 132,000 | 120,795 | ||
U.S. Treasury Notes | 0.25 | 6-30-2025 | 142,000 | 129,686 | ||
U.S. Treasury Notes | 0.25 | 7-31-2025 | 147,000 | 133,764 | ||
U.S. Treasury Notes | 0.25 | 8-31-2025 | 153,000 | 138,812 | ||
U.S. Treasury Notes | 0.25 | 10-31-2025 | 176,000 | 158,840 | ||
U.S. Treasury Notes | 0.38 | 4-30-2025 | 126,000 | 115,930 | ||
U.S. Treasury Notes | 0.38 | 11-30-2025 | 181,000 | 163,381 | ||
U.S. Treasury Notes | 0.38 | 1-31-2026 | 191,000 | 171,482 | ||
U.S. Treasury Notes | 0.38 | 7-31-2027 | 134,000 | 114,633 | ||
U.S. Treasury Notes | 0.38 | 9-30-2027 | 155,000 | 131,920 | ||
U.S. Treasury Notes | 0.50 | 3-31-2025 | 120,000 | 111,000 | ||
U.S. Treasury Notes | 0.50 | 2-28-2026 | 193,000 | 173,368 | ||
U.S. Treasury Notes | 0.50 | 4-30-2027 | 98,000 | 84,938 | ||
U.S. Treasury Notes | 0.50 | 5-31-2027 | 111,000 | 95,967 | ||
The accompanying notes are an integral part of these financial statements.
24 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2023 (unaudited)
Interest rate | Maturity date | Principal | Value | |||
U.S. Treasury securities (continued) | ||||||
U.S. Treasury Notes | 0.50 % | 6-30-2027 | $ | 122,000 | $105,187 | |
U.S. Treasury Notes | 0.50 | 8-31-2027 | 142,000 | 121,820 | ||
U.S. Treasury Notes | 0.50 | 10-31-2027 | 783,000 | 668,303 | ||
U.S. Treasury Notes | 0.63 | 3-31-2027 | 81,000 | 70,717 | ||
U.S. Treasury Notes | 0.63 | 11-30-2027 | 574,000 | 491,600 | ||
U.S. Treasury Notes | 0.63 | 5-15-2030 | 178,000 | 142,595 | ||
U.S. Treasury Notes | 0.63 | 8-15-2030 | 222,000 | 176,863 | ||
U.S. Treasury Notes | 0.75 | 4-30-2026 | 194,000 | 174,691 | ||
U.S. Treasury Notes | 0.75 | 5-31-2026 | 194,000 | 174,259 | ||
U.S. Treasury Notes | 0.88 | 11-15-2030 | 132,000 | 106,817 | ||
U.S. Treasury Notes | 1.00 | 7-31-2028 | 315,000 | 270,162 | ||
U.S. Treasury Notes | 1.13 | 2-28-2025 | 118,000 | 110,602 | ||
U.S. Treasury Notes | 1.13 | 2-28-2027 | 127,000 | 113,328 | ||
U.S. Treasury Notes | 1.25 | 8-31-2024 | 104,000 | 99,194 | ||
U.S. Treasury Notes | 1.25 | 4-30-2028 | 25,000 | 21,840 | ||
U.S. Treasury Notes | 1.25 | 9-30-2028 | 150,000 | 129,850 | ||
U.S. Treasury Notes | 1.25 | 8-15-2031 | 351,000 | 288,039 | ||
U.S. Treasury Notes | 1.38 | 1-31-2025 | 105,000 | 99,024 | ||
U.S. Treasury Notes | 1.38 | 8-31-2026 | 95,000 | 86,443 | ||
U.S. Treasury Notes | 1.38 | 10-31-2028 | 1,160,000 | 1,009,200 | ||
U.S. Treasury Notes | 1.38 | 11-15-2031 | 940,000 | 775,096 | ||
U.S. Treasury Notes | 1.50 | 11-30-2024 | 477,000 | 452,889 | ||
U.S. Treasury Notes | 1.50 | 8-15-2026 | 102,000 | 93,230 | ||
U.S. Treasury Notes | 1.50 | 1-31-2027 | 98,000 | 88,770 | ||
U.S. Treasury Notes | 1.50 | 2-15-2030 | 209,000 | 179,005 | ||
U.S. Treasury Notes | 1.63 | 2-15-2026 | 168,000 | 155,689 | ||
U.S. Treasury Notes | 1.63 | 5-15-2026 | 105,000 | 96,883 | ||
U.S. Treasury Notes | 1.63 | 10-31-2026 | 94,000 | 85,966 | ||
U.S. Treasury Notes | 1.63 | 11-30-2026 | 97,000 | 88,562 | ||
U.S. Treasury Notes | 1.63 | 8-15-2029 | 157,000 | 136,903 | ||
U.S. Treasury Notes | 1.75 | 6-30-2024 | 106,000 | 102,236 | ||
U.S. Treasury Notes | 1.75 | 7-31-2024 | 110,000 | 105,798 | ||
U.S. Treasury Notes | 1.75 | 12-31-2026 | 99,000 | 90,674 | ||
U.S. Treasury Notes | 1.75 | 11-15-2029 | 178,000 | 156,084 | ||
U.S. Treasury Notes | 1.88 | 8-31-2024 | 125,000 | 120,098 | ||
U.S. Treasury Notes | 1.88 | 6-30-2026 | 98,000 | 90,949 | ||
U.S. Treasury Notes | 1.88 | 7-31-2026 | 99,000 | 91,660 | ||
U.S. Treasury Notes | 2.00 | 5-31-2024 | 333,000 | 322,802 | ||
U.S. Treasury Notes | 2.00 | 6-30-2024 | 123,000 | 118,945 | ||
U.S. Treasury Notes | 2.00 | 2-15-2025 | 289,000 | 275,092 | ||
U.S. Treasury Notes | 2.00 | 8-15-2025 | 220,000 | 207,548 | ||
U.S. Treasury Notes | 2.00 | 11-15-2026 | 170,000 | 157,243 | ||
U.S. Treasury Notes | 2.13 | 7-31-2024 | 123,000 | 118,781 | ||
U.S. Treasury Notes | 2.13 | 11-30-2024 | 119,000 | 113,961 | ||
U.S. Treasury Notes | 2.13 | 5-15-2025 | 234,000 | 222,227 | ||
U.S. Treasury Notes | 2.13 | 5-31-2026 | 97,000 | 90,721 | ||
U.S. Treasury Notes | 2.25 | 10-31-2024 | 121,000 | 116,283 | ||
U.S. Treasury Notes | 2.25 | 11-15-2024 | 290,000 | 278,491 | ||
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 25
Portfolio of investments—June 30, 2023 (unaudited)
Interest rate | Maturity date | Principal | Value | |||
U.S. Treasury securities (continued) | ||||||
U.S. Treasury Notes | 2.25 % | 12-31-2024 | $ | 33,000 | $31,597 | |
U.S. Treasury Notes | 2.25 | 11-15-2025 | 219,000 | 206,904 | ||
U.S. Treasury Notes | 2.25 | 3-31-2026 | 99,000 | 93,157 | ||
U.S. Treasury Notes | 2.25 | 2-15-2027 | 196,000 | 182,257 | ||
U.S. Treasury Notes | 2.25 | 8-15-2027 | 101,000 | 93,366 | ||
U.S. Treasury Notes | 2.25 | 11-15-2027 | 99,000 | 91,184 | ||
U.S. Treasury Notes | 2.38 | 8-15-2024 | 289,000 | 279,664 | ||
U.S. Treasury Notes | 2.38 | 4-30-2026 | 98,000 | 92,415 | ||
U.S. Treasury Notes | 2.38 | 5-15-2027 | 164,000 | 152,712 | ||
U.S. Treasury Notes | 2.38 | 5-15-2029 | 90,000 | 82,055 | ||
U.S. Treasury Notes | 2.50 | 5-15-2024 | 281,000 | 273,953 | ||
U.S. Treasury Notes | 2.50 | 5-31-2024 | 100,000 | 97,395 | ||
U.S. Treasury Notes | 2.50 | 1-31-2025 | 116,000 | 111,328 | ||
U.S. Treasury Notes | 2.50 | 2-28-2026 | 97,000 | 91,942 | ||
U.S. Treasury Notes | 2.63 | 3-31-2025 | 114,000 | 109,427 | ||
U.S. Treasury Notes | 2.63 | 1-31-2026 | 95,000 | 90,410 | ||
U.S. Treasury Notes | 2.63 | 2-15-2029 | 181,000 | 167,715 | ||
U.S. Treasury Notes | 2.75 | 2-28-2025 | 121,000 | 116,571 | ||
U.S. Treasury Notes | 2.75 | 6-30-2025 | 119,000 | 114,166 | ||
U.S. Treasury Notes | 2.75 | 8-31-2025 | 122,000 | 116,863 | ||
U.S. Treasury Notes | 2.75 | 2-15-2028 | 189,000 | 177,623 | ||
U.S. Treasury Notes | 2.75 | 8-15-2032 | 680,000 | 623,395 | ||
U.S. Treasury Notes | 2.88 | 4-30-2025 | 114,000 | 109,778 | ||
U.S. Treasury Notes | 2.88 | 5-31-2025 | 117,000 | 112,612 | ||
U.S. Treasury Notes | 2.88 | 6-15-2025 | 100,000 | 96,191 | ||
U.S. Treasury Notes | 2.88 | 7-31-2025 | 118,000 | 113,441 | ||
U.S. Treasury Notes | 2.88 | 11-30-2025 | 96,000 | 92,010 | ||
U.S. Treasury Notes | 2.88 | 5-15-2028 | 178,000 | 167,953 | ||
U.S. Treasury Notes | 2.88 | 8-15-2028 | 190,000 | 178,971 | ||
U.S. Treasury Notes | 3.00 | 10-31-2025 | 76,000 | 73,097 | ||
U.S. Treasury Notes | 3.13 | 11-15-2028 | 226,000 | 215,291 | ||
U.S. Treasury Notes | 3.50 | 2-15-2033 | 115,000 | 112,017 | ||
U.S. Treasury Notes | 4.13 | 11-15-2032 | 110,000 | 112,406 | ||
Total U.S. Treasury securities (Cost $23,986,104) | 21,661,115 | |||||
The accompanying notes are an integral part of these financial statements.
26 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2023 (unaudited)
Yield | Shares | Value | ||||
Short-term investments: 2.89% | ||||||
Investment companies: 2.89% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.02 % | 1,915,966 | $1,915,966 | |||
Total short-term investments (Cost $1,915,966) | 1,915,966 | |||||
Total investments in securities (Cost $45,994,496) | 99.72 % | 66,035,942 | ||||
Other assets and liabilities, net | 0.28 | 183,578 | ||||
Total net assets | 100.00 % | $66,219,520 | ||||
† | 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 |
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
Value, beginning of period | Purchases | Sales proceeds | Net realized gains (losses) | Net change in unrealized gains (losses) | Value, end of period | Shares, end of period | Income from affiliated securities | |
Short-term investments | ||||||||
Allspring Government Money Market Fund Select Class | $2,238,925 | $2,980,338 | $(3,303,297 ) | $0 | $0 | $1,915,966 | 1,915,966 | $49,226 |
Futures contracts
Description | Number of contracts | Expiration date | Notional cost | Notional value | Unrealized gains | Unrealized losses |
Long | ||||||
U.S. Long Bond | 1 | 9-20-2023 | $126,831 | $126,906 | $75 | $0 |
Ultra Long Term U.S. Treasury Bond | 2 | 9-20-2023 | 272,240 | 272,438 | 198 | 0 |
2-Year U.S. Treasury Notes | 1 | 9-29-2023 | 206,034 | 203,344 | 0 | (2,690 ) |
5-Year U.S. Treasury Notes | 4 | 9-29-2023 | 435,495 | 428,375 | 0 | (7,120 ) |
10-Year U.S. Treasury Notes | 23 | 9-20-2023 | 2,626,215 | 2,582,109 | 0 | (44,106 ) |
Short | ||||||
Micro E-Mini S&P 500 Index | (118 ) | 9-15-2023 | (2,610,127 ) | (2,648,068 ) | 0 | (37,941 ) |
$273 | $(91,857 ) |
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 27
Statement of assets and liabilities—June 30, 2023 (unaudited)
Financial statements
Statement of assets and liabilities
Assets | |
Investments in unaffiliated securities, at value (cost $44,078,530) | $64,119,976 |
Investments in affiliated securities, at value (cost $1,915,966) | 1,915,966 |
Cash | 240 |
Cash at broker segregated for futures contracts | 160,731 |
Receivable for dividends and interest | 163,896 |
Receivable for daily variation margin on open futures contracts | 6,484 |
Receivable for Fund shares sold | 146 |
Prepaid expenses and other assets | 17,021 |
Total assets | 66,384,460 |
Liabilities | |
Payable for Fund shares redeemed | 77,528 |
Management fee payable | 27,026 |
Payable for daily variation margin on open futures contracts | 16,731 |
Custody and accounting fees payable | 16,010 |
Distribution fee payable | 14,044 |
Professional fees payable | 8,290 |
Administration fee payable | 4,594 |
Accrued expenses and other liabilities | 717 |
Total liabilities | 164,940 |
Total net assets | $66,219,520 |
Net assets consist of | |
Paid-in capital | $45,395,921 |
Total distributable earnings | 20,823,599 |
Total net assets | $66,219,520 |
Computation of net asset value per share | |
Net assets - Class 2 | $66,219,520 |
Shares outstanding - Class 21 | 3,634,582 |
Net asset value per share - Class 2 | $18.22 |
1 | The Fund has an unlimited number of authorized shares. |
The accompanying notes are an integral part of these financial statements.
28 | Allspring VT Index Asset Allocation Fund
Statement of operations—six months ended June 30, 2023 (unaudited)
Statement of operations
Investment income | |
Dividends (net of foreign withholdings taxes of $91) | $332,849 |
Interest | 262,593 |
Income from affiliated securities | 49,226 |
Total investment income | 644,668 |
Expenses | |
Management fee | 191,348 |
Administration fee - Class 2 | 25,513 |
Distribution fee - Class 2 | 77,861 |
Custody and accounting fees | 8,980 |
Professional fees | 26,211 |
Shareholder report expenses | 3,493 |
Trustees’ fees and expenses | 9,682 |
Other fees and expenses | 9,914 |
Total expenses | 353,002 |
Less: Fee waivers and/or expense reimbursements | |
Fund-level | (34,072 ) |
Net expenses | 318,930 |
Net investment income | 325,738 |
Realized and unrealized gains (losses) on investments | |
Net realized gains (losses) on | |
Unaffiliated securities | 406,091 |
Futures contracts | (145,732 ) |
Net realized gains on investments | 260,359 |
Net change in unrealized gains (losses) on | |
Unaffiliated securities | 5,596,091 |
Futures contracts | (50,687 ) |
Net change in unrealized gains (losses) on investments | 5,545,404 |
Net realized and unrealized gains (losses) on investments | 5,805,763 |
Net increase in net assets resulting from operations | $6,131,501 |
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 29
Statement of changes in net assets
Statement of changes in net assets
Six months ended June 30, 2023 (unaudited) | Year ended December 31, 2022 | |||
Operations | ||||
Net investment income | $325,738 | $499,771 | ||
Net realized gains on investments | 260,359 | 1,953,790 | ||
Net change in unrealized gains (losses) on investments | 5,545,404 | (16,170,071 ) | ||
Net increase (decrease) in net assets resulting from operations | 6,131,501 | (13,716,510 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains - Class 2 | (391,144 ) | (8,395,776 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold - Class 2 | 17,934 | 314,081 | 49,560 | 962,547 |
Reinvestment of distributions - Class 2 | 22,394 | 391,144 | 483,089 | 8,395,776 |
Payment for shares redeemed - Class 2 | (158,150 ) | (2,753,830 ) | (406,491 ) | (7,787,408 ) |
Net increase (decrease) in net assets resulting from capital share transactions | (2,048,605 ) | 1,570,915 | ||
Total increase (decrease) in net assets | 3,691,752 | (20,541,371 ) | ||
Net assets | ||||
Beginning of period | 62,527,768 | 83,069,139 | ||
End of period | $66,219,520 | $62,527,768 | ||
The accompanying notes are an integral part of these financial statements.
30 | Allspring VT Index Asset Allocation Fund
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Six months ended June 30, 2023 (unaudited) | Year ended December 31 | |||||
Class 2 | 2022 | 2021 | 2020 | 2019 | 2018 | |
Net asset value, beginning of period | $16.66 | $22.91 | $21.88 | $20.55 | $18.42 | $20.45 |
Net investment income | 0.09 | 0.14 | 0.10 | 0.16 | 0.22 | 0.20 |
Net realized and unrealized gains (losses) on investments | 1.58 | (3.95 ) | 3.25 | 3.04 | 3.42 | (0.70 ) |
Total from investment operations | 1.67 | (3.81 ) | 3.35 | 3.20 | 3.64 | (0.50 ) |
Distributions to shareholders from | ||||||
Net investment income | (0.11 ) | (0.12 ) | (0.13 ) | (0.17 ) | (0.22 ) | (0.20 ) |
Net realized gains | 0.00 | (2.32 ) | (2.19 ) | (1.70 ) | (1.29 ) | (1.33 ) |
Total distributions to shareholders | (0.11 ) | (2.44 ) | (2.32 ) | (1.87 ) | (1.51 ) | (1.53 ) |
Net asset value, end of period | $18.22 | $16.66 | $22.91 | $21.88 | $20.55 | $18.42 |
Total return1 | 10.03 % | (17.02 )% | 16.00 % | 16.59 % | 20.16 % | (2.90 )% |
Ratios to average net assets (annualized) | ||||||
Gross expenses | 1.11 % | 1.15 % | 1.13 % | 1.14 % | 1.05 % | 1.05 % |
Net expenses | 1.00 % | 1.00 % | 1.00 % | 1.00 % | 1.00 % | 1.00 % |
Net investment income | 1.02 % | 0.72 % | 0.46 % | 0.78 % | 1.07 % | 0.94 % |
Supplemental data | ||||||
Portfolio turnover rate | 3 % | 9 % | 7 % | 21 % | 4 % | 10 % |
Net assets, end of period (000s omitted) | $66,220 | $62,528 | $83,069 | $78,791 | $72,193 | $68,851 |
1 | Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 31
Notes to financial statements (unaudited)
Notes to financial statements
1.
ORGANIZATION
Allspring Variable 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 VT Index Asset Allocation Fund (the “Fund”) which is a diversified series of the Trust. The Trust offers shares of the Fund to separate accounts of various life insurance companies as funding vehicles for certain variable annuity contracts and variable life insurance policies.
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.
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.
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 interest rates and security values and is subject to interest rate risk and 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.
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.
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.
32 | Allspring VT Index Asset Allocation Fund
Notes to financial statements (unaudited)
Income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.
Distributions to shareholders
Distributions to shareholders are recorded on the ex-dividend date and paid from net investment income quarterly and any net realized gains are paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
Federal and other taxes
The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.
The Fund’s income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns, as applicable, for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
As of June 30, 2023, the aggregate cost of all investments for federal income tax purposes was $46,739,545 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $23,150,760 |
Gross unrealized losses | (3,945,947 ) |
Net unrealized gains | $19,204,813 |
3.
FAIR VALUATION MEASUREMENTS
Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
•Level 1—quoted prices in active markets for identical securities
•Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
•Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
Allspring VT Index Asset Allocation Fund | 33
Notes to financial statements (unaudited)
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of June 30, 2023:
Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
Assets | ||||
Investments in: | ||||
Common stocks | ||||
Communication services | $3,564,632 | $0 | $0 | $3,564,632 |
Consumer discretionary | 4,522,328 | 0 | 0 | 4,522,328 |
Consumer staples | 2,831,285 | 0 | 0 | 2,831,285 |
Energy | 1,745,739 | 0 | 0 | 1,745,739 |
Financials | 5,272,936 | 0 | 0 | 5,272,936 |
Health care | 5,698,829 | 0 | 0 | 5,698,829 |
Industrials | 3,648,577 | 0 | 0 | 3,648,577 |
Information technology | 12,001,713 | 0 | 0 | 12,001,713 |
Materials | 1,061,061 | 0 | 0 | 1,061,061 |
Real estate | 1,017,675 | 0 | 0 | 1,017,675 |
Utilities | 1,094,086 | 0 | 0 | 1,094,086 |
U.S. Treasury securities | 21,661,115 | 0 | 0 | 21,661,115 |
Short-term investments | ||||
Investment companies | 1,915,966 | 0 | 0 | 1,915,966 |
66,035,942 | 0 | 0 | 66,035,942 | |
Futures contracts | 273 | 0 | 0 | 273 |
Total assets | $66,036,215 | $0 | $0 | $66,036,215 |
Liabilities | ||||
Futures contracts | $91,857 | $0 | $0 | $91,857 |
Total liabilities | $91,857 | $0 | $0 | $91,857 |
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 six months ended June 30, 2023, the Fund did not have any transfers into/out of Level 3.
4.
TRANSACTIONS WITH AFFILIATES
Management fee
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Allspring Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Allspring Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:
Average daily net assets | Management fee |
First $500 million | 0.600 % |
Next $500 million | 0.550 |
Next $2 billion | 0.500 |
Next $2 billion | 0.475 |
Next $5 billion | 0.440 |
Over $10 billion | 0.430 |
For the six months ended June 30, 2023, the management fee was equivalent to an annual rate of 0.60% 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
34 | Allspring VT Index Asset Allocation Fund
Notes to financial statements (unaudited)
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 0.15% and declining to 0.10% as the average daily net assets of the Fund increase.
Administration fee
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 of 0.08% which is calculated based on the average daily net assets of Class 2 shares.
Waivers and/or expense reimbursements
Allspring Funds Management has contractually committed through April 30, 2024 to waive fees and/or reimburse management and administration fees to the extent necessary to cap the Fund’s expenses at 1.00% for Class 2 shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.
Distribution fee
The Trust has adopted a distribution plan for Class 2 shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class 2 shares and paid to Allspring Funds Distributor, LLC, the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.25% of the average daily net assets of Class 2 shares.
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 short-term securities, for the six months ended June 30, 2023 were as follows:
Purchases at cost | Sales proceeds | ||
U.S. government | Non-U.S. government | U.S. government | Non-U.S. government |
$1,712,639 | $349,181 | $2,730,612 | $994,728 |
6.
DERIVATIVE TRANSACTIONS
During the six months ended June 30, 2023, the Fund entered into futures contracts to manage market exposure to certain asset classes consistent with an active asset allocation strategy. The Fund had an average notional amount of $5,885,600 in long futures contracts and $1,266,126 in short futures contracts during the six months ended June 30, 2023.
The fair value of derivative instruments as of June 30, 2023 by primary risk type was as follows for the Fund:
Interest rate risk | Equity risk | Total | |
Asset derivatives | |||
Futures contracts | $273 * | $0 * | $273 |
Liability derivatives | |||
Futures contracts | $53,916 * | $37,941 * | $91,857 |
* | 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 June 30, 2023 is reported separately on the Statement of Assets and Liabilities. |
The effect of derivative instruments on the Statement of Operations for the six months ended June 30, 2023 was as follows:
Interest rate risk | Equity risk | Total | |
Net realized gains (losses) on derivatives | |||
Futures contracts | $(17,901 ) | $(127,831 ) | $(145,732 ) |
Net change in unrealized gains (losses) on derivatives | |||
Futures contracts | $(16,876 ) | $(33,811 ) | $(50,687 ) |
Allspring VT Index Asset Allocation Fund | 35
Notes to financial statements (unaudited)
7.
BANK BORROWINGS
The Trust, Allspring Master Trust and Allspring Funds Trust (excluding the money market funds) 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 six months ended June 30, 2023, there were no borrowings by the Fund under the agreement.
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.
36 | Allspring VT Index Asset Allocation Fund
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 1-866-259-3305, 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 VT Index Asset Allocation 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 127 mutual funds comprising the Allspring Funds Trust, Allspring Variable Trust, Allspring Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information1. The mailing address of each Trustee and Officer is 1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203. Each Trustee and Officer serves an indefinite term, however, each Trustee serves such term until reaching the mandatory retirement age established by the Trustees.
Independent Trustees
Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
William R. Ebsworth (Born 1957) | Trustee, since 2015 | Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Foundation (non-profit organization). Mr. Ebsworth is a CFA charterholder. | N/A |
Jane A. Freeman (Born 1953) | Trustee, since 2015; Chair Liaison, since 2018 | Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is also an inactive Chartered Financial Analyst. | N/A |
Isaiah Harris, Jr. (Born 1952) | Trustee, since 2009; Audit Committee Chair, since 2019 | Retired. Member of the Advisory Board of CEF of East Central Florida. Chairman of the Board of CIGNA Corporation from 2009 to 2021, and Director from 2005 to 2008. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Fellowship of Christian Athletes. Mr. Harris is a certified public accountant (inactive status). | N/A |
David F. Larcker (Born 1950) | Trustee, since 2009 | Distinguished Visiting Fellow at the Hoover Institution since 2022. James Irvin Miller Professor of Accounting at the Graduate School of Business (Emeritus), Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. | N/A |
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 calling 1-800-260-5969 or by visiting the website at allspringglobal.com.
38 | Allspring VT Index Asset Allocation 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 VT Index Asset Allocation 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 VT Index Asset Allocation 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 Variable 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 VT Index 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,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 VT Index Asset Allocation Fund | 41
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 was higher than the average investment performance of the Universe for all periods under review, except that the investment performance of the Fund was lower than the average investment performance of the Universe for the one-year period. The Board also noted that the investment performance of the Fund was higher than the investment performance of its benchmark index, the Index Asset Allocation Blended Index, for all periods under review, except that the investment performance of the Fund was lower than the investment performance of its benchmark index for the one-year period.
The Board also received and considered information regarding the Fund’s net operating expense ratio and its 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 this ratio in comparison to the median ratios of funds in an expense group that was determined by Broadridge to be similar to the Fund (the “Group”). The Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Group and an explanation of how funds comprising expense group and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Board noted that the net operating expense ratio of the Fund was lower than the median net operating expense ratio of the expense Group.
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 rate payable by the Fund to Allspring Funds Management under the Management Agreement, as well as the contractual fee rate payable by the Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which includes, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rate”). The 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. 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 Rate 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 Rate of the Fund was lower than the sum of the average rates for the Fund’s expense Group.
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 Fund and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
42 | Allspring VT Index Asset Allocation Fund
Other information (unaudited)
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 VT Index Asset Allocation Fund | 43
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 Variable 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.
44 | Allspring VT Index Asset Allocation 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: 1-800-260-5969
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-866-765-0778
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 1-800-260-5969 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-07052023-wcmfnwqd 08-23
SAR0360 06-23
SAR0360 06-23
Contents
The views expressed and any forward-looking statements are as of June 30, 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 VT International Equity Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this semi-annual report for the Allspring VT International Equity Fund for the six-month period that ended June 30, 2023. Globally, stocks and bonds rebounded after a challenging period despite ongoing volatility. While navigating persistently high inflation and the impact of ongoing aggressive central bank rate hikes, markets rallied on signs of gradually declining inflation, anticipation of an end to the central bank monetary tightening cycle, and the positive impact of China removing its strict COVID-19 lockdowns. For the six-month period, domestic U.S. and global stocks had strong results while bonds had more muted gains. After suffering deep and broad losses through 2022, bonds now benefit from a base of higher yields that can help generate higher income. However, ongoing rate hikes were a headwind during the six-month period.
For the period, U.S. stocks, based on the S&P 500 Index,1 returned 16.89%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 gained 9.47% while the MSCI EM Index (Net) (USD)3 returned 4.89%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned 2.09%, the Bloomberg Global Aggregate ex-USD (unhedged) Index5 gained 0.83%, the Bloomberg Municipal Bond Index6 gained 2.67%, and the ICE BofA U.S. High Yield Index7 returned 5.45%.
Despite high inflation and central bank rate hikes, markets rallied.
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 Federal Reserve (Fed) and on how many more rate hikes remain in this tightening cycle. The 0.25% federal funds rate hike announced in January was the Fed’s smallest rate increase since March 2022.
Financial markets declined in February as investors responded unfavorably to resilient economic data. The takeaway: Central banks would 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 was not falling quickly enough for the Fed, which raised interest rates by 0.25% in early February. Meanwhile, the Bank of England and the European Central Bank (ECB) both raised rates by 0.50%.
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 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 (unhedged) Index 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 VT International Equity Fund
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.
June featured the Fed’s first pause on interest rate hikes since March 2022, when it began its aggressive campaign to rein in inflation. However, the core U.S. Consumer Price Index (CPI)2, excluding food and energy prices, while continuing to decline, remained stubbornly high in June, at 4.8%, well above the Fed’s 2.0% target rate. With the U.S. unemployment rate still at 3.6%, near a historical low, and U.S. payrolls growing in June for the 30th consecutive month, expectations of more Fed rate hikes were reinforced. However, U.S. and global stocks had strong returns in June.
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 1-800-260-5969.
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.
2
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 VT International Equity Fund | 3
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. |
4 | Allspring VT International Equity Fund
Performance highlights (unaudited)
Performance highlights
Investment objective | The Fund seeks long-term capital appreciation. |
Manager | Allspring Funds Management, LLC |
Subadviser | Allspring Global Investments, LLC |
Portfolio manager | Venkateshwar (Venk) Lal, Dale A.Winner, CFA |
Average annual total returns (%) as of June 30, 2023 | ||||||
Expense ratios1 (%) | ||||||
Inception date | 1 year | 5 year | 10 year | Gross | Net2 | |
Class 1 | 8-17-1998 | 14.53 | 2.38 | 4.37 | 1.24 | 0.70 |
Class 2 | 7-31-2002 | 14.28 | 2.06 | 4.08 | 1.49 | 0.95 |
MSCI ACWI ex USA Index (Net)3 | – | 12.72 | 3.52 | 4.75 | – | – |
MSCI ACWI ex USA Value Index (Net)4 | – | 12.19 | 2.65 | 3.70 | – | – |
Figures quoted represent past performance, which is no guarantee of future results. 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. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-800-260-5969. Performance figures of the Fund do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. If these fees and expenses had been reflected, performance would have been lower.
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.
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 0.01% 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 April 30, 2024, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.69% for Class 1 shares and 0.94% for Class 2 shares. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense caps. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. Without these caps, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses. |
3 | The 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. |
4 | The MSCI ACWI ex USA Value Index (Net) captures large and mid-cap securities exhibiting overall value style characteristics across developed and emerging markets countries excluding the U.S. The value investment style characteristics for index construction are defined using three variables: book value to price, 12-month forward earnings to price, and dividend yield. You cannot invest directly in an index. |
Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. 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. 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 smaller-company securities risk. Consult the Fund’s prospectus for additional information on these and other risks.
Please refer to the prospectus provided by your participating insurance company for detailed information describing the separate accounts for information regarding surrender charges, mortality and expense risk fees, and other charges that may be assessed by the participating insurance companies.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
6 | Allspring VT International Equity Fund
Performance highlights (unaudited)
Ten largest holdings (%) as of June 30, 20231 | |
ING Groep NV | 3.43 |
ORIX Corp. | 3.28 |
Mitsubishi UFJ Financial Group, Inc. | 3.25 |
Samsung Electronics Co. Ltd. | 3.11 |
Sanofi | 3.02 |
Informa PLC | 3.00 |
Quebecor, Inc. Class B | 2.88 |
Orange SA | 2.86 |
SNC-Lavalin Group, Inc. | 2.84 |
Rheinmetall AG | 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. |
Sector allocation as of June 30, 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. |
Geographic allocation as of June 30, 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. |
Allspring VT International Equity Fund | 7
Fund expenses (unaudited)
Fund expenses
As a shareholder of the Fund, you incur ongoing costs, including management fees, distribution (12b-1) 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 January 1, 2023 to June 30, 2023.
Actual expenses
The “Actual” line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Actual” line under the heading entitled “Expenses paid during period” for your applicable class of shares to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The “Hypothetical” line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any separate account charges assessed by participating insurance companies. 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 separate account charges assessed by participating insurance companies were included, your costs would have been higher.
Beginning account value 1-1-2023 | Ending account value 6-30-2023 | Expenses paid during the period1 | Annualized net expense ratio | |
Class 1 | ||||
Actual | $1,000.00 | $1,102.40 | $3.60 | 0.69 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.37 | $3.46 | 0.69 % |
Class 2 | ||||
Actual | $1,000.00 | $1,098.80 | $4.89 | 0.94 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,020.13 | $4.71 | 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 181 divided by 365 (to reflect the one-half-year period). |
8 | Allspring VT International Equity Fund
Portfolio of investments—June 30, 2023 (unaudited)
Portfolio of investments
Shares | Value | |||||
Common stocks: 98.29% | ||||||
Australia: 1.80% | ||||||
Qantas Airways Ltd. (Industrials, Passenger airlines) | 266,850 | $1,105,857 | ||||
Brazil: 3.40% | ||||||
3R Petroleum Oleo E Gas SA (Energy, Oil, gas & consumable fuels)† | 139,800 | 871,524 | ||||
CPFL Energia SA (Utilities, Electric utilities) | 169,000 | 1,213,798 | ||||
2,085,322 | ||||||
Canada: 5.72% | ||||||
Quebecor, Inc. Class B (Communication services, Media) | 71,752 | 1,768,411 | ||||
SNC-Lavalin Group, Inc. (Industrials, Construction & engineering) | 66,300 | 1,739,140 | ||||
3,507,551 | ||||||
China: 10.68% | ||||||
China Resources Land Ltd. (Real estate, Real estate management & development) | 252,000 | 1,072,427 | ||||
Inner Mongolia Yili Industrial Group Co. Ltd. Class A (Consumer staples, Food products) | 252,600 | 985,659 | ||||
LONGi Green Energy Technology Co. Ltd. Class A (Information technology, Semiconductors & semiconductor equipment) | 152,218 | 602,266 | ||||
Midea Group Co. Ltd. Class A (Consumer discretionary, Household durables) | 199,598 | 1,622,472 | ||||
Oppein Home Group, Inc. Class A (Consumer discretionary, Household durables) | 31,440 | 415,358 | ||||
Topsports International Holdings Ltd. (Consumer discretionary, Specialty retail) | 1,070,000 | 930,925 | ||||
Xinyi Glass Holdings Ltd. (Industrials, Building products) | 591,000 | 923,921 | ||||
6,553,028 | ||||||
Denmark: 2.57% | ||||||
Danske Bank AS (Financials, Banks) | 64,788 | 1,578,002 | ||||
France: 9.51% | ||||||
CIE de Saint-Gobain (Industrials, Building products) | 4,035 | 245,676 | ||||
Orange SA (Communication services, Diversified telecommunication services) | 150,206 | 1,755,374 | ||||
Sanofi (Health care, Pharmaceuticals) | 17,175 | 1,848,988 | ||||
Sodexo SA (Consumer discretionary, Hotels, restaurants & leisure) | 12,581 | 1,385,386 | ||||
Worldline SA (Financials, Financial services) | 16,264 | 595,588 | ||||
5,831,012 | ||||||
Germany: 7.68% | ||||||
Fresenius SE & Co. KGaA (Health care, Health care providers & services) | 23,678 | 656,751 | ||||
ING Groep NV (Financials, Banks) | 156,098 | 2,104,450 | ||||
Rheinmetall AG (Industrials, Aerospace & defense) | 6,075 | 1,664,260 | ||||
Siemens AG (Industrials, Industrial conglomerates) | 1,715 | 285,892 | ||||
4,711,353 | ||||||
India: 1.09% | ||||||
Tech Mahindra Ltd. (Information technology, IT services) | 48,157 | 666,746 | ||||
Ireland: 3.13% | ||||||
Greencore Group PLC (Consumer staples, Food products)† | 423,549 | 393,210 | ||||
ICON PLC (Health care, Life sciences tools & services)† | 6,101 | 1,526,470 | ||||
1,919,680 | ||||||
The accompanying notes are an integral part of these financial statements.
Allspring VT International Equity Fund | 9
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Isle of Man (U.K.): 1.62% | ||||||
Entain PLC (Consumer discretionary, Hotels, restaurants & leisure) | 61,668 | $997,157 | ||||
Israel: 1.57% | ||||||
Check Point Software Technologies Ltd. (Information technology, Software)† | 7,654 | 961,495 | ||||
Italy: 2.50% | ||||||
Prysmian SpA (Industrials, Electrical equipment) | 4,782 | 200,001 | ||||
UniCredit SpA (Financials, Banks) | 57,368 | 1,334,011 | ||||
1,534,012 | ||||||
Japan: 15.54% | ||||||
Asahi Group Holdings Ltd. (Consumer staples, Beverages) | 40,800 | 1,583,033 | ||||
FUJIFILM Holdings Corp. (Information technology, Technology hardware, storage & peripherals) | 15,300 | 911,622 | ||||
Hitachi Ltd. (Industrials, Industrial conglomerates) | 24,300 | 1,510,889 | ||||
Mitsubishi UFJ Financial Group, Inc. (Financials, Banks) | 270,300 | 1,992,401 | ||||
ORIX Corp. (Financials, Financial services) | 110,400 | 2,013,275 | ||||
Resonac Holdings Corp. (Materials, Chemicals) | 93,500 | 1,519,020 | ||||
9,530,240 | ||||||
Luxembourg: 2.67% | ||||||
Samsonite International SA (Consumer discretionary, Textiles, apparel & luxury goods) | 580,100 | 1,640,403 | ||||
Mexico: 2.68% | ||||||
America Movil SAB de CV Series B (Communication services, Wireless telecommunication services) | 1,512,100 | 1,641,340 | ||||
Netherlands: 2.67% | ||||||
NN Group NV (Financials, Insurance) | 44,317 | 1,640,512 | ||||
South Korea: 4.35% | ||||||
Samsung Electronics Co. Ltd. GDR (Information technology, Technology hardware, storage & peripherals) | 1,377 | 1,908,827 | ||||
SK Telecom Co. Ltd. (Communication services, Wireless telecommunication services) | 21,395 | 757,078 | ||||
2,665,905 | ||||||
Switzerland: 0.07% | ||||||
Siemens Energy AG (Industrials, Electrical equipment) | 2,465 | 43,586 | ||||
Thailand: 4.07% | ||||||
Minor International PCL (Consumer discretionary, Hotels, restaurants & leisure) | 963,600 | 930,850 | ||||
SCB X PCL (Financials, Banks) | 519,300 | 1,563,553 | ||||
2,494,403 | ||||||
United Kingdom: 7.18% | ||||||
ConvaTec Group PLC (Health care, Health care equipment & supplies) | 386,633 | 1,008,365 | ||||
Informa PLC (Communication services, Media) | 199,091 | 1,838,241 | ||||
Shell PLC (Energy, Oil, gas & consumable fuels) | 52,150 | 1,555,721 | ||||
4,402,327 | ||||||
The accompanying notes are an integral part of these financial statements.
10 | Allspring VT International Equity Fund
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
United States: 7.79% | ||||||
Axalta Coating Systems Ltd. (Materials, Chemicals)† | 44,795 | $1,469,724 | ||||
Baker Hughes Co. (Energy, Energy equipment & services) | 36,130 | 1,142,069 | ||||
Gentex Corp. (Consumer discretionary, Automobile components) | 38,224 | 1,118,434 | ||||
Nomad Foods Ltd. (Consumer staples, Food products)† | 59,720 | 1,046,295 | ||||
4,776,522 | ||||||
Total common stocks (Cost $59,513,188) | 60,286,453 | |||||
Yield | ||||||
Short-term investments: 2.34% | ||||||
Investment companies: 2.34% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.02 % | 1,433,591 | 1,433,591 | |||
Total short-term investments (Cost $1,433,591) | 1,433,591 | |||||
Total investments in securities (Cost $60,946,779) | 100.63 % | 61,720,044 | ||||
Other assets and liabilities, net | (0.63 ) | (386,066 ) | ||||
Total net assets | 100.00 % | $61,333,978 | ||||
† | 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: | |
GDR | Global depositary receipt |
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
Value, beginning of period | Purchases | Sales proceeds | Net realized gains (losses) | Net change in unrealized gains (losses) | Value, end of period | Shares, end of period | Income from affiliated securities | |
Short-term investments | ||||||||
Allspring Government Money Market Fund Select Class | $1,439,313 | $13,667,635 | $(13,673,357 ) | $0 | $0 | $1,433,591 | 1,433,591 | $28,692 |
Investments in affiliates no longer held at end of period | ||||||||
Securities Lending Cash Investments LLC | 1,372,447 | 1,891,300 | (3,263,629 ) | (118 ) | 0 | 0 | 0 | 1,777 1 |
$(118 ) | $0 | $1,433,591 | $30,469 |
1 | Amount shown represents income before fees and rebates. |
The accompanying notes are an integral part of these financial statements.
Allspring VT International Equity Fund | 11
Statement of assets and liabilities—June 30, 2023 (unaudited)
Financial statements
Statement of assets and liabilities
Assets | |
Investments in unaffiliated securities, at value (cost $59,513,188) | $60,286,453 |
Investments in affiliated securities, at value (cost $1,433,591) | 1,433,591 |
Foreign currency, at value (cost $141,895) | 142,032 |
Receivable for investments sold | 291,413 |
Receivable for dividends | 273,873 |
Receivable for Fund shares sold | 1,116 |
Prepaid expenses and other assets | 1,209 |
Total assets | 62,429,687 |
Liabilities | |
Payable for investments purchased | 1,018,044 |
Payable for Fund shares redeemed | 29,991 |
Management fee payable | 15,603 |
Distribution fee payable | 10,386 |
Administration fees payable | 4,239 |
Contingent tax liability | 446 |
Accrued expenses and other liabilities | 17,000 |
Total liabilities | 1,095,709 |
Total net assets | $61,333,978 |
Net assets consist of | |
Paid-in capital | $60,911,944 |
Total distributable earnings | 422,034 |
Total net assets | $61,333,978 |
Computation of net asset value per share | |
Net assets–Class 1 | $13,260,633 |
Shares outstanding–Class 11 | 7,258,469 |
Net asset value per share–Class 1 | $1.83 |
Net assets–Class 2 | $48,073,345 |
Shares outstanding–Class 21 | 25,393,859 |
Net asset value per share–Class 2 | $1.89 |
1 | The Fund has an unlimited number of authorized shares. |
The accompanying notes are an integral part of these financial statements.
12 | Allspring VT International Equity Fund
Statement of operations—six months ended June 30, 2023 (unaudited)
Statement of operations
Investment income | |
Dividends (net of foreign withholdings taxes of $130,421) | $978,945 |
Income from affiliated securities | 28,973 |
Interest | 502 |
Total investment income | 1,008,420 |
Expenses | |
Management fee | 241,987 |
Administration fees | |
Class 1 | 5,159 |
Class 2 | 19,040 |
Distribution fee | |
Class 2 | 59,442 |
Custody and accounting fees | 30,744 |
Professional fees | 41,956 |
Shareholder report expenses | 1,868 |
Trustees’ fees and expenses | 8,219 |
Other fees and expenses | 1,738 |
Total expenses | 410,153 |
Less: Fee waivers and/or expense reimbursements | |
Fund-level | (141,939 ) |
Net expenses | 268,214 |
Net investment income | 740,206 |
Realized and unrealized gains (losses) on investments | |
Net realized gains (losses) on | |
Unaffiliated securities | 999,728 |
Affiliated securities | (118 ) |
Foreign currency and foreign currency translations | 16,058 |
Net realized gains on investments | 1,015,668 |
Net change in unrealized gains (losses) on | |
Unaffiliated securities (net of deferred foreign capital gains tax of $446) | 3,798,353 |
Foreign currency and foreign currency translations | 5,716 |
Net change in unrealized gains (losses) on investments | 3,804,069 |
Net realized and unrealized gains (losses) on investments | 4,819,737 |
Net increase in net assets resulting from operations | $5,559,943 |
The accompanying notes are an integral part of these financial statements.
Allspring VT International Equity Fund | 13
Statement of changes in net assets
Statement of changes in net assets
Six months ended June 30, 2023 (unaudited) | Year ended December 31, 2022 | |||
Operations | ||||
Net investment income | $740,206 | $1,218,499 | ||
Net realized gains on investments | 1,015,668 | 49,447 | ||
Net change in unrealized gains (losses) on investments | 3,804,069 | (9,529,985 ) | ||
Net increase (decrease) in net assets resulting from operations | 5,559,943 | (8,262,039 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class 1 | 0 | (541,184 ) | ||
Class 2 | 0 | (1,784,190 ) | ||
Total distributions to shareholders | 0 | (2,325,374 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class 1 | 328,802 | 582,716 | 333,410 | 598,170 |
Class 2 | 229,436 | 425,916 | 733,332 | 1,309,787 |
1,008,632 | 1,907,957 | |||
Reinvestment of distributions | ||||
Class 1 | 0 | 0 | 342,521 | 541,184 |
Class 2 | 0 | 0 | 1,087,921 | 1,784,190 |
0 | 2,325,374 | |||
Payment for shares redeemed | ||||
Class 1 | (582,599 ) | (1,027,616 ) | (1,347,073 ) | (2,306,169 ) |
Class 2 | (1,785,056 ) | (3,279,119 ) | (2,880,110 ) | (5,031,532 ) |
(4,306,735 ) | (7,337,701 ) | |||
Net decrease in net assets resulting from capital share transactions | (3,298,103 ) | (3,104,370 ) | ||
Total increase (decrease) in net assets | 2,261,840 | (13,691,783 ) | ||
Net assets | ||||
Beginning of period | 59,072,138 | 72,763,921 | ||
End of period | $61,333,978 | $59,072,138 | ||
The accompanying notes are an integral part of these financial statements.
14 | Allspring VT International Equity Fund
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Six months ended June 30, 2023 (unaudited) | Year ended December 31 | |||||
Class 1 | 2022 | 2021 | 2020 | 2019 | 2018 | |
Net asset value, beginning of period | $1.67 | $1.96 | $1.85 | $1.83 | $2.85 | $5.34 |
Net investment income | 0.02 1 | 0.04 | 0.04 | 0.03 1 | 0.06 1 | 0.10 1 |
Net realized and unrealized gains (losses) on investments | 0.14 | (0.26 ) | 0.10 | 0.04 | 0.34 | (0.77 ) |
Total from investment operations | 0.16 | (0.22 ) | 0.14 | 0.07 | 0.40 | (0.67 ) |
Distributions to shareholders from | ||||||
Net investment income | 0.00 | (0.07 ) | (0.03 ) | (0.05 ) | (0.13 ) | (0.61 ) |
Net realized gains | 0.00 | 0.00 | 0.00 | 0.00 | (1.29 ) | (1.21 ) |
Total distributions to shareholders | 0.00 | (0.07 ) | (0.03 ) | (0.05 ) | (1.42 ) | (1.82 ) |
Net asset value, end of period | $1.83 | $1.67 | $1.96 | $1.85 | $1.83 | $2.85 |
Total return2 | 9.58 % | (10.95 )% | 7.39 % | 4.31 % | 16.14 % | (16.86 )% |
Ratios to average net assets (annualized) | ||||||
Gross expenses | 1.16 % | 1.22 % | 1.13 % | 1.13 % | 1.13 % | 1.12 % |
Net expenses | 0.69 % | 0.69 % | 0.69 % | 0.69 % | 0.69 % | 0.69 % |
Net investment income | 2.66 % | 2.15 % | 2.07 % | 1.59 % | 2.55 % | 2.41 % |
Supplemental data | ||||||
Portfolio turnover rate | 37 % | 63 % | 65 % | 80 % | 48 % | 51 % |
Net assets, end of period (000s omitted) | $13,261 | $12,509 | $16,019 | $17,459 | $19,872 | $19,315 |
1 | Calculated based upon average shares outstanding |
2 | Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
Allspring VT International Equity Fund | 15
Financial highlights
(For a share outstanding throughout each period)
Six months ended June 30, 2023 (unaudited) | Year ended December 31 | |||||
Class 2 | 2022 | 2021 | 2020 | 2019 | 2018 | |
Net asset value, beginning of period | $1.73 | $2.03 | $1.91 | $1.89 | $2.89 | $5.38 |
Net investment income | 0.02 1 | 0.04 | 0.04 | 0.03 1 | 0.05 1 | 0.09 1 |
Net realized and unrealized gains (losses) on investments | 0.14 | (0.27 ) | 0.10 | 0.03 | 0.36 | (0.78 ) |
Total from investment operations | 0.16 | (0.23 ) | 0.14 | 0.06 | 0.41 | (0.69 ) |
Distributions to shareholders from | ||||||
Net investment income | 0.00 | (0.07 ) | (0.02 ) | (0.04 ) | (0.12 ) | (0.59 ) |
Net realized gains | 0.00 | 0.00 | 0.00 | 0.00 | (1.29 ) | (1.21 ) |
Total distributions to shareholders | 0.00 | (0.07 ) | (0.02 ) | (0.04 ) | (1.41 ) | (1.80 ) |
Net asset value, end of period | $1.89 | $1.73 | $2.03 | $1.91 | $1.89 | $2.89 |
Total return2 | 9.25 % | (11.37 )% | 7.43 % | 3.83 % | 16.10 % | (17.28 )% |
Ratios to average net assets (annualized) | ||||||
Gross expenses | 1.41 % | 1.47 % | 1.38 % | 1.38 % | 1.38 % | 1.30 % |
Net expenses | 0.94 % | 0.94 % | 0.94 % | 0.94 % | 0.94 % | 0.94 % |
Net investment income | 2.39 % | 1.90 % | 1.83 % | 1.34 % | 2.30 % | 1.82 % |
Supplemental data | ||||||
Portfolio turnover rate | 37 % | 63 % | 65 % | 80 % | 48 % | 51 % |
Net assets, end of period (000s omitted) | $48,073 | $46,563 | $56,744 | $57,167 | $61,907 | $59,004 |
1 | Calculated based upon average shares outstanding |
2 | Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
16 | Allspring VT International Equity Fund
Notes to financial statements (unaudited)
Notes to financial statements
1.
ORGANIZATION
Allspring Variable 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 VT International Equity Fund (the “Fund”) which is a diversified series of the Trust. The Trust offers shares of the Fund to separate accounts of various life insurance companies as funding vehicles for certain variable annuity contracts and variable life insurance policies.
2.
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Securities valuation
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities and exchange-traded funds that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.
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 June 30, 2023, such fair value pricing was used in pricing certain foreign securities.
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value.
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 Fund are maintained in U.S. dollars. The values of other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at rates provided by an independent foreign currency pricing source at a time each business day specified by the Valuation Committee. Purchases and sales of securities, and income and expenses are converted at the rate of exchange on the respective dates of such transactions. Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and liabilities other than investments in securities resulting from changes in exchange rates. The changes in net assets arising from changes in exchange rates of securities and the changes in net assets resulting from changes in market prices of securities are not separately presented. Such changes are included in net realized and unrealized gains or losses from investments.
Securities lending
During the period, the Fund participated in a program to lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. When securities were on loan, the Fund received interest
Allspring VT International Equity Fund | 17
Notes to financial statements (unaudited)
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 Fund is no longer participating in the securities lending program and the Securities Lending Fund was liquidated. Securities Lending Fund was managed by Allspring Funds Management and was subadvised by Allspring Global Investments, LLC (“Allspring Investments”), an affiliate of Allspring Funds Management and wholly owned subsidiary of Allspring Global Investments Holdings, LLC. Allspring Funds Management received an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Securities Lending Fund increased. All of the fees received by Allspring Funds Management were paid to Allspring Investments for its services as subadviser.
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, except for certain dividends from foreign securities, which are recorded as soon as the custodian verifies the ex-dividend date. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.
Distributions to shareholders
Distributions to shareholders from net investment income and any net realized gains are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
Federal and other taxes
The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.
The Fund’s income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns, as applicable, for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
As of June 30, 2023, the aggregate cost of all investments for federal income tax purposes was $61,508,615 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $6,127,896 |
Gross unrealized losses | (5,916,467 ) |
Net unrealized gains | $211,429 |
As of December 31, 2022, the Fund had capital loss carryforwards which consisted of $2,114,887 in short-term capital losses.
Class allocations
The separate classes of shares offered by the Fund differ principally in distribution 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.
18 | Allspring VT International Equity Fund
Notes to financial statements (unaudited)
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of June 30, 2023:
Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
Assets | ||||
Investments in: | ||||
Common stocks | ||||
Australia | $0 | $1,105,857 | $0 | $1,105,857 |
Brazil | 2,085,322 | 0 | 0 | 2,085,322 |
Canada | 3,507,551 | 0 | 0 | 3,507,551 |
China | 0 | 6,553,028 | 0 | 6,553,028 |
Denmark | 0 | 1,578,002 | 0 | 1,578,002 |
France | 0 | 5,831,012 | 0 | 5,831,012 |
Germany | 0 | 4,711,353 | 0 | 4,711,353 |
India | 0 | 666,746 | 0 | 666,746 |
Ireland | 1,919,680 | 0 | 0 | 1,919,680 |
Isle of Man (U.K.) | 0 | 997,157 | 0 | 997,157 |
Israel | 961,495 | 0 | 0 | 961,495 |
Italy | 0 | 1,534,012 | 0 | 1,534,012 |
Japan | 0 | 9,530,240 | 0 | 9,530,240 |
Luxembourg | 0 | 1,640,403 | 0 | 1,640,403 |
Mexico | 1,641,340 | 0 | 0 | 1,641,340 |
Netherlands | 0 | 1,640,512 | 0 | 1,640,512 |
South Korea | 0 | 2,665,905 | 0 | 2,665,905 |
Switzerland | 0 | 43,586 | 0 | 43,586 |
Thailand | 930,850 | 1,563,553 | 0 | 2,494,403 |
United Kingdom | 0 | 4,402,327 | 0 | 4,402,327 |
United States | 4,776,522 | 0 | 0 | 4,776,522 |
Short-term investments | ||||
Investment companies | 1,433,591 | 0 | 0 | 1,433,591 |
Total assets | $17,256,351 | $44,463,693 | $0 | $61,720,044 |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the six months ended June 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, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Allspring Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:
Average daily net assets | Management fee |
First $500 million | 0.800 % |
Next $500 million | 0.750 |
Next $1 billion | 0.700 |
Next $2 billion | 0.675 |
Next $1 billion | 0.650 |
Next $5 billion | 0.640 |
Over $10 billion | 0.630 |
For the six months ended June 30, 2023, the management fee was equivalent to an annual rate of 0.80% of the Fund’s average daily net assets.
Allspring VT International Equity Fund | 19
Notes to financial statements (unaudited)
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Investments is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.45% and declining to 0.40% as the average daily net assets of the Fund increase.
Administration fees
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee of 0.08% which is calculated based on the average daily net assets of each class.
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 April 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 June 30, 2023, the contractual expense caps are as follows:
EXPENSE RATIO CAPS | |
Class 1 | 0.69 % |
Class 2 | 0.94 |
Distribution fee
The Trust has adopted a distribution plan for Class 2 shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class 2 shares and paid to Allspring Funds Distributor, LLC, the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.25% of the average daily net assets of Class 2 shares.
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 six months ended June 30, 2023 were $21,759,192 and $23,222,945, respectively.
6.
BANK BORROWINGS
The Trust, Allspring Master Trust and Allspring Funds Trust (excluding the money market funds) 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 six months ended June 30, 2023, there were no borrowings by the Fund under the agreement.
7.
CONCENTRATION RISKS
As of the end of the period, the Fund concentrated its portfolio of investments in Asia/Pacific ex-Japan and Europe. A fund that invests a substantial portion of its assets in any geographic region may be more affected by changes in that geographic region than would be a fund whose investments are not heavily weighted in any geographic region.
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
20 | Allspring VT International Equity Fund
Notes to financial statements (unaudited)
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 VT International Equity Fund | 21
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 1-866-259-3305, 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.
22 | Allspring VT International Equity Fund
Other information (unaudited)
BOARD OF TRUSTEES AND OFFICERS
Each of the Trustees and Officers listed in the table below acts in identical capacities for each fund in the Allspring family of funds, which consists of 127 mutual funds comprising the Allspring Funds Trust, Allspring Variable Trust, Allspring Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information1. The mailing address of each Trustee and Officer is 1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203. Each Trustee and Officer serves an indefinite term, however, each Trustee serves such term until reaching the mandatory retirement age established by the Trustees.
Independent Trustees
Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
William R. Ebsworth (Born 1957) | Trustee, since 2015 | Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Foundation (non-profit organization). Mr. Ebsworth is a CFA charterholder. | N/A |
Jane A. Freeman (Born 1953) | Trustee, since 2015; Chair Liaison, since 2018 | Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is also an inactive Chartered Financial Analyst. | N/A |
Isaiah Harris, Jr. (Born 1952) | Trustee, since 2009; Audit Committee Chair, since 2019 | Retired. Member of the Advisory Board of CEF of East Central Florida. Chairman of the Board of CIGNA Corporation from 2009 to 2021, and Director from 2005 to 2008. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Fellowship of Christian Athletes. Mr. Harris is a certified public accountant (inactive status). | N/A |
David F. Larcker (Born 1950) | Trustee, since 2009 | Distinguished Visiting Fellow at the Hoover Institution since 2022. James Irvin Miller Professor of Accounting at the Graduate School of Business (Emeritus), Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. | N/A |
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 calling 1-800-260-5969 or by visiting the website at allspringglobal.com.
Allspring VT International Equity Fund | 23
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. |
24 | Allspring VT International Equity 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 VT International Equity Fund | 25
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 Variable 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 VT International Equity 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, 1a 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.”
26 | Allspring VT International Equity 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. 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 was lower than the average investment performance of the Universe for all periods under review except the 10-year period, which was in range of the 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 MSCI ACWI ex USA Index (Net), for the one-year period, lower than the average investment performance of the benchmark index for the three- and five-year periods, and in range of the investment performance of the benchmark index for the ten-year period.
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 took note of the Fund’s outperformance relative to the Universe and benchmark over the longer time 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 each share class.
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 the average rates for the Fund’s expense Group for each share 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.
Allspring VT International Equity Fund | 27
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.
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.
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.
28 | Allspring VT International Equity 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 Variable 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 VT International Equity Fund | 29
For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:
Allspring Funds
P.O. Box 219967
Kansas City, MO 64121-9967
P.O. Box 219967
Kansas City, MO 64121-9967
Website: allspringglobal.com
Individual investors: 1-800-260-5969
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-866-765-0778
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 1-800-260-5969 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-07052023-cdakepmt 08-23
SAR3008 06-23
SAR3008 06-23
Contents
The views expressed and any forward-looking statements are as of June 30, 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 VT Opportunity Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this semi-annual report for the Allspring VT Opportunity Fund for the six-month period that ended June 30, 2023. Globally, stocks and bonds rebounded after a challenging period despite ongoing volatility. While navigating persistently high inflation and the impact of ongoing aggressive central bank rate hikes, markets rallied on signs of gradually declining inflation, anticipation of an end to the central bank monetary tightening cycle, and the positive impact of China removing its strict COVID-19 lockdowns. For the six-month period, domestic U.S. and global stocks had strong results while bonds had more muted gains. After suffering deep and broad losses through 2022, bonds now benefit from a base of higher yields that can help generate higher income. However, ongoing rate hikes were a headwind during the six-month period.
For the period, U.S. stocks, based on the S&P 500 Index,1 returned 16.89%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 gained 9.47% while the MSCI EM Index (Net) (USD)3 returned 4.89%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned 2.09%, the Bloomberg Global Aggregate ex-USD (unhedged) Index5 gained 0.83%, the Bloomberg Municipal Bond Index6 gained 2.67%, and the ICE BofA U.S. High Yield Index7 returned 5.45%.
Despite high inflation and central bank rate hikes, markets rallied.
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 Federal Reserve (Fed) and on how many more rate hikes remain in this tightening cycle. The 0.25% federal funds rate hike announced in January was the Fed’s smallest rate increase since March 2022.
Financial markets declined in February as investors responded unfavorably to resilient economic data. The takeaway: Central banks would 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 was not falling quickly enough for the Fed, which raised interest rates by 0.25% in early February. Meanwhile, the Bank of England and the European Central Bank (ECB) both raised rates by 0.50%.
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 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 (unhedged) Index 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 VT Opportunity Fund
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.
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.
June featured the Fed’s first pause on interest rate hikes since March 2022, when it began its aggressive campaign to rein in inflation. However, the core U.S. Consumer Price Index (CPI)2, excluding food and energy prices, while continuing to decline, remained stubbornly high in June, at 4.8%, well above the Fed’s 2.0% target rate. With the U.S. unemployment rate still at 3.6%, near a historical low, and U.S. payrolls growing in June for the 30th consecutive month, expectations of more Fed rate hikes were reinforced. However, U.S. and global stocks had strong returns in June.
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 1-800-260-5969.
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.
2
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 VT Opportunity Fund | 3
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. |
4 | Allspring VT Opportunity Fund
Performance highlights (unaudited)
Performance highlights
Investment objective | The Fund seeks long-term capital appreciation |
Manager | Allspring Funds Management, LLC |
Subadviser | Allspring Global Investments, LLC |
Portfolio managers | Kurt Gunderson, Christopher G. Miller, CFA |
Average annual total returns (%) as of June 30, 2023 | ||||||
Expense ratios1 (%) | ||||||
Inception date | 1 year | 5 year | 10 year | Gross | Net2 | |
Class 1 | 8-26-2011 | 21.00 | 10.99 | 11.42 | 0.87 | 0.75 |
Class 2 | 5-8-1992 | 20.67 | 10.71 | 11.14 | 1.12 | 1.00 |
Russell 3000® Index3 | �� | 18.95 | 11.39 | 12.34 | – | – |
Figures quoted represent past performance, which is no guarantee of future results. 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. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-800-260-5969. Performance figures of the Fund do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. If these fees and expenses had been reflected, performance would have been lower.
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.
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 April 30, 2024, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.75% for Class 1 shares and 1.00% for Class 2 shares. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense caps. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. Without these caps, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses. |
3 | The 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. |
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.
Please refer to the prospectus provided by your participating insurance company for detailed information describing the separate accounts for information regarding surrender charges, mortality and expense risk fees, and other charges that may be assessed by the participating insurance companies.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
6 | Allspring VT Opportunity Fund
Performance highlights (unaudited)
Ten largest holdings (%) as of June 30, 20231 | |
Apple, Inc. | 5.87 |
Alphabet, Inc. Class C | 4.56 |
Amazon.com, Inc. | 4.19 |
Salesforce, Inc. | 3.40 |
Mastercard, Inc. Class A | 2.78 |
Texas Instruments, Inc. | 2.75 |
Meta Platforms, Inc. Class A | 2.65 |
Marvell Technology, Inc. | 2.18 |
Carlisle Cos., Inc. | 2.17 |
Fortive Corp. | 2.05 |
1 | Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
Sector allocation as of June 30, 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. |
Allspring VT Opportunity Fund | 7
Fund expenses (unaudited)
Fund expenses
As a shareholder of the Fund, you incur ongoing costs, including management fees, distribution (12b-1) 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 January 1, 2023 to June 30, 2023.
Actual expenses
The “Actual” line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Actual” line under the heading entitled “Expenses paid during period” for your applicable class of shares to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The “Hypothetical” line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any separate account charges assessed by participating insurance companies. 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 separate account charges assessed by participating insurance companies were included, your costs would have been higher.
Beginning account value 1-1-2023 | Ending account value 6-30-2023 | Expenses paid during the period1 | Annualized net expense ratio | |
Class 1 | ||||
Actual | $1,000.00 | $1,174.00 | $4.04 | 0.75 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,021.08 | $3.76 | 0.75 % |
Class 2 | ||||
Actual | $1,000.00 | $1,172.50 | $5.39 | 1.00 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,019.84 | $5.01 | 1.00 % |
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 181 divided by 365 (to reflect the one-half-year period). |
8 | Allspring VT Opportunity Fund
Portfolio of investments—June 30, 2023 (unaudited)
Portfolio of investments
Shares | Value | |||||
Common stocks: 98.82% | ||||||
Communication services: 7.21% | ||||||
Interactive media & services: 7.21% | ||||||
Alphabet, Inc. Class C† | 67,063 | $8,112,611 | ||||
Meta Platforms, Inc. Class A† | 16,459 | 4,723,404 | ||||
12,836,015 | ||||||
Consumer discretionary: 8.59% | ||||||
Broadline retail: 4.19% | ||||||
Amazon.com, Inc.† | 57,184 | 7,454,506 | ||||
Internet & catalog retail: 0.16% | ||||||
Farfetch Ltd. Class A† | 47,770 | 288,531 | ||||
Specialty retail: 3.23% | ||||||
Burlington Stores, Inc.† | 15,651 | 2,463,311 | ||||
Home Depot, Inc. | 10,562 | 3,280,979 | ||||
5,744,290 | ||||||
Textiles, apparel & luxury goods: 1.01% | ||||||
Deckers Outdoor Corp.† | 3,403 | 1,795,627 | ||||
Consumer staples: 4.59% | ||||||
Consumer staples distribution & retail: 3.05% | ||||||
Dollar General Corp. | 18,356 | 3,116,482 | ||||
Sysco Corp. | 31,237 | 2,317,785 | ||||
5,434,267 | ||||||
Household products: 1.54% | ||||||
Church & Dwight Co., Inc. | 27,274 | 2,733,673 | ||||
Financials: 9.44% | ||||||
Capital markets: 5.01% | ||||||
Charles Schwab Corp. | 53,449 | 3,029,489 | ||||
Intercontinental Exchange, Inc. | 23,397 | 2,645,733 | ||||
S&P Global, Inc. | 8,099 | 3,246,808 | ||||
8,922,030 | ||||||
Financial services: 2.78% | ||||||
Mastercard, Inc. Class A | 12,591 | 4,952,041 | ||||
Insurance: 1.65% | ||||||
Marsh & McLennan Cos., Inc. | 15,602 | 2,934,424 | ||||
Health care: 10.40% | ||||||
Health care equipment & supplies: 4.76% | ||||||
Align Technology, Inc.† | 5,991 | 2,118,657 | ||||
Boston Scientific Corp.† | 40,233 | 2,176,203 | ||||
LivaNova PLC† | 41,053 | 2,111,356 | ||||
Medtronic PLC | 23,313 | 2,053,875 | ||||
8,460,091 | ||||||
The accompanying notes are an integral part of these financial statements.
Allspring VT Opportunity Fund | 9
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Health care providers & services: 1.59% | ||||||
UnitedHealth Group, Inc. | 5,893 | $2,832,412 | ||||
Health care technology: 0.65% | ||||||
Schrodinger, Inc.† | 23,282 | 1,162,238 | ||||
Life sciences tools & services: 3.40% | ||||||
Agilent Technologies, Inc. | 13,181 | 1,585,015 | ||||
Bio-Rad Laboratories, Inc. Class A† | 4,907 | 1,860,342 | ||||
Thermo Fisher Scientific, Inc. | 4,987 | 2,601,967 | ||||
6,047,324 | ||||||
Industrials: 20.56% | ||||||
Aerospace & defense: 1.88% | ||||||
MTU Aero Engines AG | 12,878 | 3,340,155 | ||||
Building products: 3.59% | ||||||
AZEK Co., Inc.† | 83,539 | 2,530,396 | ||||
Carlisle Cos., Inc. | 15,083 | 3,869,242 | ||||
6,399,638 | ||||||
Commercial services & supplies: 1.64% | ||||||
Republic Services, Inc. | 19,057 | 2,918,961 | ||||
Electrical equipment: 0.83% | ||||||
Regal Rexnord Corp. | 9,586 | 1,475,285 | ||||
Machinery: 3.95% | ||||||
Fortive Corp. | 48,861 | 3,653,337 | ||||
Ingersoll Rand, Inc. | 35,202 | 2,300,803 | ||||
SPX Technologies, Inc.† | 12,663 | 1,075,975 | ||||
7,030,115 | ||||||
Professional services: 5.30% | ||||||
CoStar Group, Inc.† | 30,521 | 2,716,369 | ||||
Dun & Bradstreet Holdings, Inc. | 173,280 | 2,004,850 | ||||
Genpact Ltd. | 50,935 | 1,913,628 | ||||
TransUnion | 35,625 | 2,790,506 | ||||
9,425,353 | ||||||
Trading companies & distributors: 3.37% | ||||||
Air Lease Corp. | 61,959 | 2,592,984 | ||||
United Rentals, Inc. | 7,656 | 3,409,753 | ||||
6,002,737 | ||||||
Information technology: 24.96% | ||||||
Electronic equipment, instruments & components: 3.18% | ||||||
Amphenol Corp. Class A | 40,281 | 3,421,871 | ||||
Teledyne Technologies, Inc.† | 5,436 | 2,234,794 | ||||
5,656,665 | ||||||
The accompanying notes are an integral part of these financial statements.
10 | Allspring VT Opportunity Fund
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Semiconductors & semiconductor equipment: 4.93% | ||||||
Marvell Technology, Inc. | 64,950 | $3,882,711 | ||||
Texas Instruments, Inc. | 27,186 | 4,894,024 | ||||
8,776,735 | ||||||
Software: 10.98% | ||||||
Black Knight, Inc.† | 24,731 | 1,477,183 | ||||
Palo Alto Networks, Inc.† | 9,917 | 2,533,893 | ||||
Riskified Ltd. Class A | 64,047 | 311,268 | ||||
Salesforce, Inc.† | 28,674 | 6,057,669 | ||||
ServiceNow, Inc.† | 5,092 | 2,861,551 | ||||
Splunk, Inc.† | 29,631 | 3,143,553 | ||||
Workday, Inc. Class A† | 13,995 | 3,161,330 | ||||
19,546,447 | ||||||
Technology hardware, storage & peripherals: 5.87% | ||||||
Apple, Inc. | 53,869 | 10,448,970 | ||||
Materials: 5.55% | ||||||
Chemicals: 4.62% | ||||||
Ashland, Inc. | 28,275 | 2,457,380 | ||||
Olin Corp. | 54,134 | 2,781,946 | ||||
Sherwin-Williams Co. | 11,265 | 2,991,083 | ||||
8,230,409 | ||||||
Metals & mining: 0.93% | ||||||
Steel Dynamics, Inc. | 15,111 | 1,646,041 | ||||
Real estate: 7.52% | ||||||
Industrial REITs : 1.46% | ||||||
Prologis, Inc. | 21,133 | 2,591,540 | ||||
Residential REITs : 1.64% | ||||||
Sun Communities, Inc. | 22,388 | 2,920,739 | ||||
Specialized REITs : 4.42% | ||||||
American Tower Corp. | 12,802 | 2,482,820 | ||||
Equinix, Inc. | 3,698 | 2,899,010 | ||||
VICI Properties, Inc. | 79,131 | 2,487,087 | ||||
7,868,917 | ||||||
Total common stocks (Cost $123,855,827) | 175,876,176 | |||||
The accompanying notes are an integral part of these financial statements.
Allspring VT Opportunity Fund | 11
Portfolio of investments—June 30, 2023 (unaudited)
Yield | Shares | Value | ||||
Short-term investments: 1.67% | ||||||
Investment companies: 1.67% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.02 % | 2,980,412 | $2,980,412 | |||
Total short-term investments (Cost $2,980,412) | 2,980,412 | |||||
Total investments in securities (Cost $126,836,239) | 100.49 % | 178,856,588 | ||||
Other assets and liabilities, net | (0.49 ) | (879,047 ) | ||||
Total net assets | 100.00 % | $177,977,541 | ||||
† | 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 |
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
Value, beginning of period | Purchases | Sales proceeds | Net realized gains (losses) | Net change in unrealized gains (losses) | Value, end of period | Shares, end of period | Income from affiliated securities | |
Short-term investments | ||||||||
Allspring Government Money Market Fund Select Class | $2,607,162 | $12,006,667 | $(11,633,417 ) | $0 | $0 | $2,980,412 | 2,980,412 | $59,085 |
The accompanying notes are an integral part of these financial statements.
12 | Allspring VT Opportunity Fund
Statement of assets and liabilities—June 30, 2023 (unaudited)
Financial statements
Statement of assets and liabilities
Assets | |
Investments in unaffiliated securities, at value (cost $123,855,827) | $175,876,176 |
Investments in affiliated securities, at value (cost $2,980,412) | 2,980,412 |
Receivable for investments sold | 337,895 |
Receivable for dividends | 168,236 |
Receivable for Fund shares sold | 7,798 |
Prepaid expenses and other assets | 497 |
Total assets | 179,371,014 |
Liabilities | |
Payable for investments purchased | 1,057,183 |
Payable for Fund shares redeemed | 144,143 |
Management fee payable | 92,950 |
Distribution fee payable | 31,831 |
Administration fees payable | 12,101 |
Trustees’ fees and expenses payable | 7,258 |
Accrued expenses and other liabilities | 48,007 |
Total liabilities | 1,393,473 |
Total net assets | $177,977,541 |
Net assets consist of | |
Paid-in capital | $105,758,057 |
Total distributable earnings | 72,219,484 |
Total net assets | $177,977,541 |
Computation of net asset value per share | |
Net assets–Class 1 | $28,111,589 |
Shares outstanding–Class 11 | 1,076,545 |
Net asset value per share–Class 1 | $26.11 |
Net assets–Class 2 | $149,865,952 |
Shares outstanding–Class 21 | 5,726,337 |
Net asset value per share–Class 2 | $26.17 |
1 | The Fund has an unlimited number of authorized shares. |
The accompanying notes are an integral part of these financial statements.
Allspring VT Opportunity Fund | 13
Statement of operations—six months ended June 30, 2023 (unaudited)
Statement of operations
Investment income | |
Dividends (net of foreign withholdings taxes of $5,400) | $810,526 |
Income from affiliated securities | 59,085 |
Interest | 34 |
Total investment income | 869,645 |
Expenses | |
Management fee | 584,482 |
Administration fees | |
Class 1 | 10,513 |
Class 2 | 56,285 |
Distribution fee | |
Class 2 | 175,588 |
Custody and accounting fees | 9,893 |
Professional fees | 28,120 |
Shareholder report expenses | 2,004 |
Trustees’ fees and expenses | 2,026 |
Other fees and expenses | 2,431 |
Total expenses | 871,342 |
Less: Fee waivers and/or expense reimbursements | |
Fund-level | (69,222 ) |
Net expenses | 802,120 |
Net investment income | 67,525 |
Realized and unrealized gains (losses) on investments | |
Net realized gains (losses) on | |
Unaffiliated securities | 6,266,811 |
Foreign currency and foreign currency translations | (3,335 ) |
Net realized gains on investments | 6,263,476 |
Net change in unrealized gains (losses) on | |
Unaffiliated securities | 20,532,571 |
Foreign currency and foreign currency translations | 116 |
Net change in unrealized gains (losses) on investments | 20,532,687 |
Net realized and unrealized gains (losses) on investments | 26,796,163 |
Net increase in net assets resulting from operations | $26,863,688 |
The accompanying notes are an integral part of these financial statements.
14 | Allspring VT Opportunity Fund
Statement of changes in net assets
Statement of changes in net assets
Six months ended June 30, 2023 (unaudited) | Year ended December 31, 2022 | |||
Operations | ||||
Net investment income (loss) | $67,525 | $(176,464 ) | ||
Net realized gains on investments | 6,263,476 | 14,366,380 | ||
Net change in unrealized gains (losses) on investments | 20,532,687 | (58,993,467 ) | ||
Net increase (decrease) in net assets resulting from operations | 26,863,688 | (44,803,551 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class 1 | 0 | (5,397,089 ) | ||
Class 2 | 0 | (28,508,608 ) | ||
Total distributions to shareholders | 0 | (33,905,697 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class 1 | 17,834 | 433,007 | 19,855 | 524,201 |
Class 2 | 51,661 | 1,246,571 | 65,477 | 1,762,168 |
1,679,578 | 2,286,369 | |||
Reinvestment of distributions | ||||
Class 1 | 0 | 0 | 235,167 | 5,397,089 |
Class 2 | 0 | 0 | 1,236,279 | 28,508,608 |
0 | 33,905,697 | |||
Payment for shares redeemed | ||||
Class 1 | (72,166 ) | (1,736,272 ) | (107,448 ) | (2,803,006 ) |
Class 2 | (342,022 ) | (8,249,360 ) | (599,805 ) | (16,380,805 ) |
(9,985,632 ) | (19,183,811 ) | |||
Net increase (decrease) in net assets resulting from capital share transactions | (8,306,054 ) | 17,008,255 | ||
Total increase (decrease) in net assets | 18,557,634 | (61,700,993 ) | ||
Net assets | ||||
Beginning of period | 159,419,907 | 221,120,900 | ||
End of period | $177,977,541 | $159,419,907 | ||
The accompanying notes are an integral part of these financial statements.
Allspring VT Opportunity Fund | 15
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Six months ended June 30, 2023 (unaudited) | Year ended December 31 | |||||
Class 1 | 2022 | 2021 | 2020 | 2019 | 2018 | |
Net asset value, beginning of period | $22.24 | $34.96 | $29.48 | $26.56 | $22.76 | $27.05 |
Net investment income (loss) | 0.04 | 0.03 | (0.01 ) | 0.09 | 0.17 | 0.15 |
Net realized and unrealized gains (losses) on investments | 3.83 | (7.06 ) | 7.25 | 5.03 | 6.84 | (1.69 ) |
Total from investment operations | 3.87 | (7.03 ) | 7.24 | 5.12 | 7.01 | (1.54 ) |
Distributions to shareholders from | ||||||
Net investment income | 0.00 | 0.00 | (0.08 ) | (0.19 ) | (0.15 ) | (0.12 ) |
Net realized gains | 0.00 | (5.69 ) | (1.68 ) | (2.01 ) | (3.06 ) | (2.63 ) |
Total distributions to shareholders | 0.00 | (5.69 ) | (1.76 ) | (2.20 ) | (3.21 ) | (2.75 ) |
Net asset value, end of period | $26.11 | $22.24 | $34.96 | $29.48 | $26.56 | $22.76 |
Total return1 | 17.40 % | (20.61 )% | 25.06 % | 21.32 % | 31.81 % | (6.93 )% |
Ratios to average net assets (annualized) | ||||||
Gross expenses | 0.83 % | 0.87 % | 0.84 % | 0.86 % | 0.85 % | 0.84 % |
Net expenses | 0.75 % | 0.75 % | 0.75 % | 0.75 % | 0.75 % | 0.75 % |
Net investment income (loss) | 0.29 % | 0.11 % | (0.02 )% | 0.31 % | 0.67 % | 0.52 % |
Supplemental data | ||||||
Portfolio turnover rate | 11 % | 26 % | 27 % | 42 % | 25 % | 31 % |
Net assets, end of period (000s omitted) | $28,112 | $25,149 | $34,376 | $32,066 | $30,811 | $27,165 |
1 | Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
16 | Allspring VT Opportunity Fund
Financial highlights
(For a share outstanding throughout each period)
Six months ended June 30, 2023 (unaudited) | Year ended December 31 | |||||
Class 2 | 2022 | 2021 | 2020 | 2019 | 2018 | |
Net asset value, beginning of period | $22.32 | $35.14 | $29.63 | $26.68 | $22.85 | $27.14 |
Net investment income (loss) | 0.01 | (0.03 ) | (0.09 ) | 0.03 | 0.11 | 0.08 |
Net realized and unrealized gains (losses) on investments | 3.84 | (7.10 ) | 7.29 | 5.05 | 6.86 | (1.69 ) |
Total from investment operations | 3.85 | (7.13 ) | 7.20 | 5.08 | 6.97 | (1.61 ) |
Distributions to shareholders from | ||||||
Net investment income | 0.00 | 0.00 | (0.01 ) | (0.12 ) | (0.08 ) | (0.05 ) |
Net realized gains | 0.00 | (5.69 ) | (1.68 ) | (2.01 ) | (3.06 ) | (2.63 ) |
Total distributions to shareholders | 0.00 | (5.69 ) | (1.69 ) | (2.13 ) | (3.14 ) | (2.68 ) |
Net asset value, end of period | $26.17 | $22.32 | $35.14 | $29.63 | $26.68 | $22.85 |
Total return1 | 17.25 % | (20.81 )% | 24.78 % | 21.00 % | 31.46 % | (7.15 )% |
Ratios to average net assets (annualized) | ||||||
Gross expenses | 1.08 % | 1.12 % | 1.10 % | 1.11 % | 1.10 % | 1.09 % |
Net expenses | 1.00 % | 1.00 % | 1.00 % | 1.00 % | 1.00 % | 1.00 % |
Net investment income (loss) | 0.04 % | (0.14 )% | (0.27 )% | 0.06 % | 0.42 % | 0.27 % |
Supplemental data | ||||||
Portfolio turnover rate | 11 % | 26 % | 27 % | 42 % | 25 % | 31 % |
Net assets, end of period (000s omitted) | $149,866 | $134,271 | $186,745 | $167,338 | $158,216 | $134,972 |
1 | Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
Allspring VT Opportunity Fund | 17
Notes to financial statements (unaudited)
Notes to financial statements
1.
ORGANIZATION
Allspring Variable 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 VT Opportunity Fund (the “Fund”) which is a diversified series of the Trust. The Trust offers shares of the Fund to separate accounts of various life insurance companies as funding vehicles for certain variable annuity contracts and variable life insurance policies.
2.
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Securities valuation
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.
The values of securities denominated in foreign currencies are translated into U.S. dollars at rates provided by an independent foreign currency pricing source at a time each business day specified by the Valuation Committee 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 June 30, 2023, such fair value pricing was used in pricing certain foreign securities.
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value.
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 Fund are maintained in U.S. dollars. The values of other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at rates provided by an independent foreign currency pricing source at a time each business day specified by the Valuation Committee. Purchases and sales of securities, and income and expenses are converted at the rate of exchange on the respective dates of such transactions. Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and liabilities other than investments in securities resulting from changes in exchange rates. The changes in net assets arising from changes in exchange rates of securities and the changes in net assets resulting from changes in market prices of securities are not separately presented. Such changes are included in net realized and unrealized gains or losses from investments.
Security transactions and income recognition
Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.
Dividend income is recognized on the ex-dividend date, except for certain dividends from foreign securities, which are recorded as soon as the custodian verifies the ex-dividend date. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.
18 | Allspring VT Opportunity Fund
Notes to financial statements (unaudited)
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 June 30, 2023, the aggregate cost of all investments for federal income tax purposes was $126,799,252 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $55,912,945 |
Gross unrealized losses | (3,855,609 ) |
Net unrealized gains | $52,057,336 |
Class allocations
The separate classes of shares offered by the Fund differ principally in distribution fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.
3.
FAIR VALUATION MEASUREMENTS
Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
•Level 1—quoted prices in active markets for identical securities
•Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
��Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
Allspring VT Opportunity Fund | 19
Notes to financial statements (unaudited)
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of June 30, 2023:
Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
Assets | ||||
Investments in: | ||||
Common stocks | ||||
Communication services | $12,836,015 | $0 | $0 | $12,836,015 |
Consumer discretionary | 15,282,954 | 0 | 0 | 15,282,954 |
Consumer staples | 8,167,940 | 0 | 0 | 8,167,940 |
Financials | 16,808,495 | 0 | 0 | 16,808,495 |
Health care | 18,502,065 | 0 | 0 | 18,502,065 |
Industrials | 33,252,089 | 3,340,155 | 0 | 36,592,244 |
Information technology | 44,428,817 | 0 | 0 | 44,428,817 |
Materials | 9,876,450 | 0 | 0 | 9,876,450 |
Real estate | 13,381,196 | 0 | 0 | 13,381,196 |
Short-term investments | ||||
Investment companies | 2,980,412 | 0 | 0 | 2,980,412 |
Total assets | $175,516,433 | $3,340,155 | $0 | $178,856,588 |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the six months ended June 30, 2023, the Fund did not have any transfers into/out of Level 3.
4.
TRANSACTIONS WITH AFFILIATES
Management fee
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Allspring Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Allspring Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:
Average daily net assets | Management fee |
First $500 million | 0.700 % |
Next $500 million | 0.675 |
Next $1 billion | 0.650 |
Next $2 billion | 0.625 |
Next $1 billion | 0.600 |
Next $5 billion | 0.590 |
Over $10 billion | 0.580 |
For the six months ended June 30, 2023, the management fee was equivalent to an annual rate of 0.70% 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 0.45% and declining to 0.30% as the average daily net assets of the Fund increase.
Administration fees
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee of 0.08% which is calculated based on the average daily net assets of each class.
20 | Allspring VT Opportunity Fund
Notes to financial statements (unaudited)
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 April 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 June 30, 2023, the contractual expense caps are as follows: ���
EXPENSE RATIO CAPS | |
Class 1 | 0.75 % |
Class 2 | 1.00 |
Distribution fee
The Trust has adopted a distribution plan for Class 2 shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class 2 shares and paid to Allspring Funds Distributor, LLC, the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.25% of the average daily net assets of Class 2 shares.
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 six months ended June 30, 2023 were $18,362,266 and $26,139,073, respectively.
6.
BANK BORROWINGS
The Trust, Allspring Master Trust and Allspring Funds Trust (excluding the money market funds) 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 six months ended June 30, 2023, there were no borrowings by the Fund under the agreement.
7.
CONCENTRATION RISKS
As of the end of the period, the Fund concentrated its portfolio of investments in 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 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 VT Opportunity Fund | 21
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 1-866-259-3305, 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.
22 | Allspring VT Opportunity Fund
Other information (unaudited)
BOARD OF TRUSTEES AND OFFICERS
Each of the Trustees and Officers listed in the table below acts in identical capacities for each fund in the Allspring family of funds, which consists of 127 mutual funds comprising the Allspring Funds Trust, Allspring Variable Trust, Allspring Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information1. The mailing address of each Trustee and Officer is 1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203. Each Trustee and Officer serves an indefinite term, however, each Trustee serves such term until reaching the mandatory retirement age established by the Trustees.
Independent Trustees
Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
William R. Ebsworth (Born 1957) | Trustee, since 2015 | Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Foundation (non-profit organization). Mr. Ebsworth is a CFA charterholder. | N/A |
Jane A. Freeman (Born 1953) | Trustee, since 2015; Chair Liaison, since 2018 | Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is also an inactive Chartered Financial Analyst. | N/A |
Isaiah Harris, Jr. (Born 1952) | Trustee, since 2009; Audit Committee Chair, since 2019 | Retired. Member of the Advisory Board of CEF of East Central Florida. Chairman of the Board of CIGNA Corporation from 2009 to 2021, and Director from 2005 to 2008. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Fellowship of Christian Athletes. Mr. Harris is a certified public accountant (inactive status). | N/A |
David F. Larcker (Born 1950) | Trustee, since 2009 | Distinguished Visiting Fellow at the Hoover Institution since 2022. James Irvin Miller Professor of Accounting at the Graduate School of Business (Emeritus), Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. | N/A |
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 calling 1-800-260-5969 or by visiting the website at allspringglobal.com.
Allspring VT Opportunity Fund | 23
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. |
24 | Allspring VT Opportunity 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 VT Opportunity Fund | 25
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 Variable 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 VT Opportunity 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.”
26 | Allspring VT Opportunity 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. 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 was higher than the average investment performance of the Universe for all periods under review except the one-year period, which was lower than the average investment performance of the Universe. The Board also noted that the investment performance of the Fund was lower than the investment performance of its benchmark index, the Russell 3000® Index, for all periods 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 took note of the Fund’s outperformance relative to the Universe and benchmark over the longer time 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 in range of the median net operating expense ratios of the expense Groups for each share class.
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 the average rates for the Fund’s expense Group for Class 2, but higher than the sum of the average rates for the Fund’s expense Group for Class 1.
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 VT Opportunity Fund | 27
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.
28 | Allspring VT Opportunity 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 Variable 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 VT Opportunity Fund | 29
For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:
Allspring Funds
P.O. Box 219967
Kansas City, MO 64121-9967
P.O. Box 219967
Kansas City, MO 64121-9967
Website: allspringglobal.com
Individual investors: 1-800-260-5969
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-866-765-0778
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 1-800-260-5969 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-07052023-uikqsspz 08-23
SAR3020 06-23
SAR3020 06-23
Contents
The views expressed and any forward-looking statements are as of June 30, 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 VT Small Cap Growth Fund | 1
Letter to shareholders (unaudited)
Andrew Owen
President
Allspring Funds
Allspring Funds
Dear Shareholder:
We are pleased to offer you this semi-annual report for the Allspring VT Small Cap Growth Fund for the six-month period that ended June 30, 2023. Globally, stocks and bonds rebounded after a challenging period despite ongoing volatility. While navigating persistently high inflation and the impact of ongoing aggressive central bank rate hikes, markets rallied on signs of gradually declining inflation, anticipation of an end to the central bank monetary tightening cycle, and the positive impact of China removing its strict COVID-19 lockdowns. For the six-month period, domestic U.S. and global stocks had strong results while bonds had more muted gains. After suffering deep and broad losses through 2022, bonds now benefit from a base of higher yields that can help generate higher income. However, ongoing rate hikes were a headwind during the six-month period.
For the period, U.S. stocks, based on the S&P 500 Index,1 returned 16.89%. International stocks, as measured by the MSCI ACWI ex USA Index (Net),2 gained 9.47% while the MSCI EM Index (Net) (USD)3 returned 4.89%. Among bond indexes, the Bloomberg U.S. Aggregate Bond Index4 returned 2.09%, the Bloomberg Global Aggregate ex-USD (unhedged) Index5 gained 0.83%, the Bloomberg Municipal Bond Index6 gained 2.67%, and the ICE BofA U.S. High Yield Index7 returned 5.45%.
Despite high inflation and central bank rate hikes, markets rallied.
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 Federal Reserve (Fed) and on how many more rate hikes remain in this tightening cycle. The 0.25% federal funds rate hike announced in January was the Fed’s smallest rate increase since March 2022.
Financial markets declined in February as investors responded unfavorably to resilient economic data. The takeaway: Central banks would 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 was not falling quickly enough for the Fed, which raised interest rates by 0.25% in early February. Meanwhile, the Bank of England and the European Central Bank (ECB) both raised rates by 0.50%.
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 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 (unhedged) Index 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 VT Small Cap Growth Fund
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.
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.
June featured the Fed’s first pause on interest rate hikes since March 2022, when it began its aggressive campaign to rein in inflation. However, the core U.S. Consumer Price Index (CPI)2, excluding food and energy prices, while continuing to decline, remained stubbornly high in June, at 4.8%, well above the Fed’s 2.0% target rate. With the U.S. unemployment rate still at 3.6%, near a historical low, and U.S. payrolls growing in June for the 30th consecutive month, expectations of more Fed rate hikes were reinforced. However, U.S. and global stocks had strong returns in June.
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 1-800-260-5969.
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.
2
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 VT Small Cap Growth Fund | 3
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. |
4 | Allspring VT Small Cap Growth Fund
Performance highlights (unaudited)
Performance highlights
Investment objective | The Fund seeks long-term capital appreciation. |
Manager | Allspring Funds Management, LLC |
Subadviser | Allspring Global Investments, LLC |
Portfolio managers | Robert Gruendyke, CFA, David Nazaret, CFA, Thomas C. Ognar, CFA |
Average annual total returns (%) as of June 30, 2023 | ||||||
Expense ratios1 (%) | ||||||
Inception date | 1 year | 5 year | 10 year | Gross | Net2 | |
Class 1 | 7-16-2010 | 12.18 | 5.56 | 9.84 | 0.94 | 0.94 |
Class 2 | 5-1-1995 | 11.89 | 5.29 | 9.57 | 1.19 | 1.19 |
Russell 2000® Growth Index3 | – | 18.53 | 4.22 | 8.83 | – | – |
Figures quoted represent past performance, which is no guarantee of future results. 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. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-800-260-5969. Performance figures of the Fund do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. If these fees and expenses had been reflected, performance would have been lower.
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.
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 April 30, 2024, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.95% for Class 1 shares and 1.20% for Class 2 shares. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense caps. Prior to or after the commitment expiration date, the caps may be increased or the commitment to maintain the caps may be terminated only with the approval of the Board of Trustees. Without these caps, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses. |
3 | The Russell 2000® Growth Index measures the performance of those Russell 2000 companies with higher price/book ratios and higher forecasted growth values. You cannot invest directly in an index. |
Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Smaller-company stocks tend to be more volatile and less liquid than those of larger companies. Consult the Fund’s prospectus for additional information on these and other risks.
Please refer to the prospectus provided by your participating insurance company for detailed information describing the separate accounts for information regarding surrender charges, mortality and expense risk fees, and other charges that may be assessed by the participating insurance companies.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. |
6 | Allspring VT Small Cap Growth Fund
Performance highlights (unaudited)
Ten largest holdings (%) as of June 30, 20231 | |
SPS Commerce, Inc. | 4.38 |
TransMedics Group, Inc. | 4.20 |
Novanta, Inc. | 3.44 |
Kinsale Capital Group, Inc. | 3.27 |
elf Beauty, Inc. | 3.20 |
Casella Waste Systems, Inc. Class A | 2.51 |
SPX Technologies, Inc. | 2.32 |
Applied Industrial Technologies, Inc. | 2.26 |
Shoals Technologies Group, Inc. Class A | 2.21 |
Inspire Medical Systems, Inc. | 2.20 |
1 | Figures represent the percentage of the Fund’s net assets. Holdings are subject to change and may have changed since the date specified. |
Sector allocation as of June 30, 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. |
Allspring VT Small Cap Growth Fund | 7
Fund expenses (unaudited)
Fund expenses
As a shareholder of the Fund, you incur ongoing costs, including management fees, distribution (12b-1) 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 January 1, 2023 to June 30, 2023.
Actual expenses
The “Actual” line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Actual” line under the heading entitled “Expenses paid during period” for your applicable class of shares to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The “Hypothetical” line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any separate account charges assessed by participating insurance companies. 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 separate account charges assessed by participating insurance companies were included, your costs would have been higher.
Beginning account value 1-1-2023 | Ending account value 6-30-2023 | Expenses paid during the period1 | Annualized net expense ratio | |
Class 1 | ||||
Actual | $1,000.00 | $1,092.00 | $4.72 | 0.91 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,020.28 | $4.56 | 0.91 % |
Class 2 | ||||
Actual | $1,000.00 | $1,090.10 | $6.01 | 1.16 % |
Hypothetical (5% return before expenses) | $1,000.00 | $1,019.04 | $5.81 | 1.16 % |
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 181 divided by 365 (to reflect the one-half-year period). |
8 | Allspring VT Small Cap Growth Fund
Portfolio of investments—June 30, 2023 (unaudited)
Portfolio of investments
Shares | Value | |||||
Common stocks: 98.76% | ||||||
Communication services: 0.30% | ||||||
Media: 0.30% | ||||||
Thryv Holdings, Inc.† | 38,200 | $939,720 | ||||
Consumer discretionary: 9.05% | ||||||
Automobile components: 0.90% | ||||||
Fox Factory Holding Corp.† | 25,810 | 2,800,643 | ||||
Diversified consumer services: 1.01% | ||||||
Bright Horizons Family Solutions, Inc.† | 33,771 | 3,122,129 | ||||
Hotels, restaurants & leisure: 4.02% | ||||||
First Watch Restaurant Group, Inc.† | 155,634 | 2,630,214 | ||||
Hilton Grand Vacations, Inc.† | 129,702 | 5,893,659 | ||||
Wingstop, Inc. | 19,954 | 3,993,993 | ||||
12,517,866 | ||||||
Specialty retail: 2.29% | ||||||
Boot Barn Holdings, Inc.† | 73,300 | 6,207,777 | ||||
Leslie’s, Inc.† | 98,792 | 927,657 | ||||
7,135,434 | ||||||
Textiles, apparel & luxury goods: 0.83% | ||||||
Crocs, Inc.† | 22,946 | 2,580,048 | ||||
Consumer staples: 8.07% | ||||||
Beverages: 2.11% | ||||||
Celsius Holdings, Inc.† | 25,100 | 3,744,669 | ||||
Duckhorn Portfolio, Inc.† | 90,865 | 1,178,519 | ||||
MGP Ingredients, Inc. | 15,365 | 1,632,992 | ||||
6,556,180 | ||||||
Consumer staples distribution & retail : 1.58% | ||||||
Chefs’ Warehouse, Inc.† | 137,170 | 4,905,199 | ||||
Food products: 1.18% | ||||||
Simply Good Foods Co.† | 100,699 | 3,684,577 | ||||
Personal care products: 3.20% | ||||||
elf Beauty, Inc.† | 87,310 | 9,973,421 | ||||
Energy: 2.27% | ||||||
Energy equipment & services: 0.94% | ||||||
Helmerich & Payne, Inc. | 83,000 | 2,942,350 | ||||
Oil, gas & consumable fuels: 1.33% | ||||||
Matador Resources Co. | 29,900 | 1,564,368 | ||||
Viper Energy Partners LP | 95,800 | 2,570,314 | ||||
4,134,682 | ||||||
The accompanying notes are an integral part of these financial statements.
Allspring VT Small Cap Growth Fund | 9
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Financials: 8.33% | ||||||
Financial services: 3.81% | ||||||
Flywire Corp.† | 147,731 | $4,585,570 | ||||
I3 Verticals, Inc. Class A† | 61,653 | 1,409,387 | ||||
Shift4 Payments, Inc. Class A† | 86,169 | 5,851,737 | ||||
11,846,694 | ||||||
Insurance: 4.52% | ||||||
Goosehead Insurance, Inc. Class A† | 61,963 | 3,896,853 | ||||
Kinsale Capital Group, Inc. | 27,148 | 10,158,782 | ||||
14,055,635 | ||||||
Health care: 22.16% | ||||||
Biotechnology: 2.55% | ||||||
Apellis Pharmaceuticals, Inc.† | 25,314 | 2,306,105 | ||||
Cytokinetics, Inc.† | 4,491 | 146,496 | ||||
Immunocore Holdings PLC ADR† | 25,464 | 1,526,822 | ||||
Madrigal Pharmaceuticals, Inc.† | 1,538 | 355,278 | ||||
Vericel Corp.† | 96,049 | 3,608,561 | ||||
7,943,262 | ||||||
Health care equipment & supplies: 13.96% | ||||||
Axonics, Inc.† | 25,300 | 1,276,891 | ||||
Establishment Labs Holdings, Inc.† | 33,816 | 2,320,116 | ||||
Inari Medical, Inc.† | 30,827 | 1,792,282 | ||||
Inspire Medical Systems, Inc.† | 21,074 | 6,841,463 | ||||
iRhythm Technologies, Inc.† | 28,207 | 2,942,554 | ||||
Outset Medical, Inc.† | 93,789 | 2,051,165 | ||||
PROCEPT BioRobotics Corp.† | 36,543 | 1,291,795 | ||||
RxSight, Inc.† | 16,100 | 463,680 | ||||
Shockwave Medical, Inc.† | 9,944 | 2,838,117 | ||||
SI-BONE, Inc.† | 158,569 | 4,278,192 | ||||
TransMedics Group, Inc.† | 155,632 | 13,069,975 | ||||
Treace Medical Concepts, Inc.† | 166,520 | 4,259,582 | ||||
43,425,812 | ||||||
Health care providers & services: 2.76% | ||||||
Castle Biosciences, Inc.† | 90,733 | 1,244,857 | ||||
HealthEquity, Inc.† | 23,500 | 1,483,790 | ||||
Hims & Hers Health, Inc.† | 321,162 | 3,018,923 | ||||
RadNet, Inc.† | 86,434 | 2,819,477 | ||||
8,567,047 | ||||||
Health care technology: 1.41% | ||||||
Evolent Health, Inc. Class A† | 100,374 | 3,041,332 | ||||
Phreesia, Inc.† | 43,612 | 1,352,408 | ||||
4,393,740 | ||||||
The accompanying notes are an integral part of these financial statements.
10 | Allspring VT Small Cap Growth Fund
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Pharmaceuticals: 1.48% | ||||||
Axsome Therapeutics, Inc.† | 24,500 | $1,760,570 | ||||
Revance Therapeutics, Inc.† | 112,682 | 2,851,982 | ||||
4,612,552 | ||||||
Industrials: 20.35% | ||||||
Aerospace & defense: 1.55% | ||||||
Hexcel Corp. | 63,303 | 4,812,294 | ||||
Building products: 2.55% | ||||||
AZEK Co., Inc.† | 169,529 | 5,135,033 | ||||
Zurn Elkay Water Solutions Corp. Class C | 104,050 | 2,797,905 | ||||
7,932,938 | ||||||
Commercial services & supplies: 2.89% | ||||||
Casella Waste Systems, Inc. Class A† | 86,493 | 7,823,292 | ||||
Cimpress PLC† | 19,691 | 1,171,221 | ||||
8,994,513 | ||||||
Construction & engineering: 0.55% | ||||||
Construction Partners, Inc. Class A† | 54,851 | 1,721,773 | ||||
Electrical equipment: 2.51% | ||||||
Array Technologies, Inc.† | 13,600 | 307,360 | ||||
NEXTracker, Inc. Class A† | 15,765 | 627,604 | ||||
Shoals Technologies Group, Inc. Class A† | 269,105 | 6,878,324 | ||||
7,813,288 | ||||||
Ground transportation: 1.68% | ||||||
Marten Transport Ltd. | 115,370 | 2,480,455 | ||||
Saia, Inc.† | 8,003 | 2,740,307 | ||||
5,220,762 | ||||||
Machinery: 2.32% | ||||||
SPX Technologies, Inc.† | 84,902 | 7,214,123 | ||||
Professional services: 2.48% | ||||||
ASGN, Inc.† | 34,741 | 2,627,462 | ||||
Paycor HCM, Inc.† | 215,134 | 5,092,222 | ||||
7,719,684 | ||||||
Trading companies & distributors: 3.82% | ||||||
Applied Industrial Technologies, Inc. | 48,565 | 7,033,669 | ||||
SiteOne Landscape Supply, Inc.† | 29,001 | 4,853,607 | ||||
11,887,276 | ||||||
Information technology: 28.23% | ||||||
Communications equipment: 3.02% | ||||||
Calix, Inc.† | 125,997 | 6,288,511 | ||||
The accompanying notes are an integral part of these financial statements.
Allspring VT Small Cap Growth Fund | 11
Portfolio of investments—June 30, 2023 (unaudited)
Shares | Value | |||||
Communications equipment (continued) | ||||||
Extreme Networks, Inc.† | 30,100 | $784,105 | ||||
Harmonic, Inc.† | 144,112 | 2,330,291 | ||||
9,402,907 | ||||||
Electronic equipment, instruments & components: 3.44% | ||||||
Novanta, Inc.† | 58,057 | 10,688,294 | ||||
IT services: 2.35% | ||||||
DigitalOcean Holdings, Inc.† | 166,503 | 6,683,430 | ||||
Endava PLC ADR† | 12,234 | 633,599 | ||||
7,317,029 | ||||||
Semiconductors & semiconductor equipment: 7.29% | ||||||
Allegro MicroSystems, Inc.† | 89,916 | 4,058,808 | ||||
Diodes, Inc.† | 55,667 | 5,148,641 | ||||
Impinj, Inc.† | 50,100 | 4,491,465 | ||||
Semtech Corp.† | 24,650 | 627,589 | ||||
Silicon Laboratories, Inc.† | 24,406 | 3,849,803 | ||||
SiTime Corp.† | 38,253 | 4,512,706 | ||||
22,689,012 | ||||||
Software: 12.13% | ||||||
Clearwater Analytics Holdings, Inc. Class A† | 148,027 | 2,349,189 | ||||
CyberArk Software Ltd.† | 24,971 | 3,903,717 | ||||
EngageSmart, Inc.† | 237,147 | 4,527,136 | ||||
Five9, Inc.† | 77,634 | 6,400,923 | ||||
PowerSchool Holdings, Inc. Class A† | 76,481 | 1,463,846 | ||||
Sprout Social, Inc. Class A† | 118,769 | 5,482,377 | ||||
SPS Commerce, Inc.† | 70,890 | 13,615,133 | ||||
37,742,321 | ||||||
Total common stocks (Cost $252,968,905) | 307,293,205 | |||||
Yield | ||||||
Short-term investments: 1.89% | ||||||
Investment companies: 1.89% | ||||||
Allspring Government Money Market Fund Select Class♠∞ | 5.02 % | 5,871,520 | 5,871,520 | |||
Total short-term investments (Cost $5,871,520) | 5,871,520 | |||||
Total investments in securities (Cost $258,840,425) | 100.65 % | 313,164,725 | ||||
Other assets and liabilities, net | (0.65 ) | (2,030,282 ) | ||||
Total net assets | 100.00 % | $311,134,443 | ||||
† | Non-income-earning security |
♠ | The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
∞ | The rate represents the 7-day annualized yield at period end. |
Abbreviations: | |
ADR | American depositary receipt |
The accompanying notes are an integral part of these financial statements.
12 | Allspring VT Small Cap Growth Fund
Portfolio of investments—June 30, 2023 (unaudited)
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 | $4,239,144 | $49,404,316 | $(47,771,940 ) | $0 | $0 | $5,871,520 | 5,871,520 | $134,642 |
Investments in affiliates no longer held at end of period | ||||||||
Securities Lending Cash Investments LLC | 2,138,297 | 9,115,875 | (11,254,178 ) | 78 | (72 ) | 0 | 0 | 7,951 1 |
$78 | $(72 ) | $5,871,520 | $142,593 |
1 | Amount shown represents income before fees and rebates. |
The accompanying notes are an integral part of these financial statements.
Allspring VT Small Cap Growth Fund | 13
Statement of assets and liabilities—June 30, 2023 (unaudited)
Financial statements
Statement of assets and liabilities
Assets | |
Investments in unaffiliated securities, at value (cost $252,968,905) | $307,293,205 |
Investments in affiliated securities, at value (cost $5,871,520) | 5,871,520 |
Receivable for investments sold | 2,629,065 |
Receivable for dividends | 37,120 |
Receivable for Fund shares sold | 11,350 |
Prepaid expenses and other assets | 4,306 |
Total assets | 315,846,566 |
Liabilities | |
Payable for investments purchased | 3,741,035 |
Payable for Fund shares redeemed | 622,855 |
Management fee payable | 209,950 |
Distribution fee payable | 60,715 |
Administration fees payable | 20,995 |
Accrued expenses and other liabilities | 56,573 |
Total liabilities | 4,712,123 |
Total net assets | $311,134,443 |
Net assets consist of | |
Paid-in capital | $279,490,242 |
Total distributable earnings | 31,644,201 |
Total net assets | $311,134,443 |
Computation of net asset value per share | |
Net assets–Class 1 | $21,915,144 |
Shares outstanding–Class 11 | 2,496,785 |
Net asset value per share–Class 1 | $8.78 |
Net assets–Class 2 | $289,219,299 |
Shares outstanding–Class 21 | 35,152,381 |
Net asset value per share–Class 2 | $8.23 |
1 | The Fund has an unlimited number of authorized shares. |
The accompanying notes are an integral part of these financial statements.
14 | Allspring VT Small Cap Growth Fund
Statement of operations—six months ended June 30, 2023 (unaudited)
Statement of operations
Investment income | |
Dividends | $353,543 |
Income from affiliated securities | 135,304 |
Interest | 134 |
Total investment income | 488,981 |
Expenses | |
Management fee | 1,176,450 |
Administration fees | |
Class 1 | 8,278 |
Class 2 | 109,367 |
Distribution fee | |
Class 2 | 339,793 |
Custody and accounting fees | 9,155 |
Professional fees | 23,947 |
Shareholder report expenses | 2,352 |
Trustees’ fees and expenses | 9,365 |
Other fees and expenses | 2,559 |
Total expenses | 1,681,266 |
Net investment loss | (1,192,285 ) |
Realized and unrealized gains (losses) on investments | |
Net realized gains (losses) on | |
Unaffiliated securities | (5,275,346 ) |
Affiliated securities | 78 |
Net realized losses on investments | (5,275,268 ) |
Net change in unrealized gains (losses) on | |
Unaffiliated securities | 32,173,446 |
Affiliated securities | (72 ) |
Net change in unrealized gains (losses) on investments | 32,173,374 |
Net realized and unrealized gains (losses) on investments | 26,898,106 |
Net increase in net assets resulting from operations | $25,705,821 |
The accompanying notes are an integral part of these financial statements.
Allspring VT Small Cap Growth Fund | 15
Statement of changes in net assets
Statement of changes in net assets
Six months ended June 30, 2023 (unaudited) | Year ended December 31, 2022 | |||
Operations | ||||
Net investment loss | $(1,192,285 ) | $(2,758,598 ) | ||
Net realized losses on investments | (5,275,268 ) | (16,006,885 ) | ||
Net change in unrealized gains (losses) on investments | 32,173,374 | (135,569,670 ) | ||
Net increase (decrease) in net assets resulting from operations | 25,705,821 | (154,335,153 ) | ||
Distributions to shareholders from | ||||
Net investment income and net realized gains | ||||
Class 1 | 0 | (4,061,029 ) | ||
Class 2 | 0 | (51,742,025 ) | ||
Total distributions to shareholders | 0 | (55,803,054 ) | ||
Capital share transactions | Shares | Shares | ||
Proceeds from shares sold | ||||
Class 1 | 192,922 | 1,615,117 | 354,012 | 3,588,220 |
Class 2 | 1,749,266 | 13,785,482 | 3,506,997 | 35,910,165 |
15,400,599 | 39,498,385 | |||
Reinvestment of distributions | ||||
Class 1 | 0 | 0 | 484,032 | 4,061,029 |
Class 2 | 0 | 0 | 6,566,247 | 51,742,025 |
0 | 55,803,054 | |||
Payment for shares redeemed | ||||
Class 1 | (202,438 ) | (1,714,414 ) | (717,144 ) | (6,701,122 ) |
Class 2 | (1,691,285 ) | (13,356,190 ) | (4,508,339 ) | (43,250,183 ) |
(15,070,604 ) | (49,951,305 ) | |||
Net increase in net assets resulting from capital share transactions | 329,995 | 45,350,134 | ||
Total increase (decrease) in net assets | 26,035,816 | (164,788,073 ) | ||
Net assets | ||||
Beginning of period | 285,098,627 | 449,886,700 | ||
End of period | $311,134,443 | $285,098,627 | ||
The accompanying notes are an integral part of these financial statements.
16 | Allspring VT Small Cap Growth Fund
Financial highlights
Financial highlights
(For a share outstanding throughout each period)
(For a share outstanding throughout each period)
Six months ended June 30, 2023 (unaudited) | Year ended December 31 | |||||
Class 1 | 2022 | 2021 | 2020 | 2019 | 2018 | |
Net asset value, beginning of period | $8.04 | $14.76 | $15.35 | $10.29 | $9.66 | $10.43 |
Net investment loss | (0.02 ) | (0.07 )1 | (0.12 )1 | (0.09 ) | (0.07 )1 | (0.05 ) |
Net realized and unrealized gains (losses) on investments | 0.76 | (4.92 ) | 1.26 | 5.80 | 2.51 | 0.40 |
Total from investment operations | 0.74 | (4.99 ) | 1.14 | 5.71 | 2.44 | 0.35 |
Distributions to shareholders from | ||||||
Net realized gains | 0.00 | (1.73 ) | (1.73 ) | (0.65 ) | (1.81 ) | (1.12 ) |
Net asset value, end of period | $8.78 | $8.04 | $14.76 | $15.35 | $10.29 | $9.66 |
Total return2 | 9.20 % | (34.30 )% | 7.93 % | 58.09 % | 25.31 % | 1.48 % |
Ratios to average net assets (annualized) | ||||||
Gross expenses | 0.91 % | 0.94 % | 0.92 % | 0.93 % | 0.93 % | 0.92 % |
Net expenses | 0.91 % | 0.94 % | 0.92 % | 0.93 % | 0.93 % | 0.92 % |
Net investment loss | (0.58 )% | (0.63 )% | (0.78 )% | (0.76 )% | (0.69 )% | (0.59 )% |
Supplemental data | ||||||
Portfolio turnover rate | 45 % | 61 % | 46 % | 51 % | 62 % | 68 % |
Net assets, end of period (000s omitted) | $21,915 | $20,160 | $35,204 | $35,128 | $22,925 | $19,801 |
1 | Calculated based upon average shares outstanding |
2 | Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
Allspring VT Small Cap Growth Fund | 17
Financial highlights
(For a share outstanding throughout each period)
Six months ended June 30, 2023 (unaudited) | Year ended December 31 | |||||
Class 2 | 2022 | 2021 | 2020 | 2019 | 2018 | |
Net asset value, beginning of period | $7.55 | $14.04 | $14.72 | $9.91 | $9.38 | $10.18 |
Net investment loss | (0.03 ) | (0.09 )1 | (0.14 ) | (0.11 ) | (0.09 ) | (0.09 ) |
Net realized and unrealized gains (losses) on investments | 0.71 | (4.67 ) | 1.19 | 5.57 | 2.43 | 0.41 |
Total from investment operations | 0.68 | (4.76 ) | 1.05 | 5.46 | 2.34 | 0.32 |
Distributions to shareholders from | ||||||
Net realized gains | 0.00 | (1.73 ) | (1.73 ) | (0.65 ) | (1.81 ) | (1.12 ) |
Net asset value, end of period | $8.23 | $7.55 | $14.04 | $14.72 | $9.91 | $9.38 |
Total return2 | 9.01 % | (34.42 )% | 7.64 % | 57.78 % | 24.83 % | 1.20 % |
Ratios to average net assets (annualized) | ||||||
Gross expenses | 1.16 % | 1.19 % | 1.17 % | 1.18 % | 1.18 % | 1.17 % |
Net expenses | 1.16 % | 1.19 % | 1.17 % | 1.18 % | 1.18 % | 1.17 % |
Net investment loss | (0.83 )% | (0.87 )% | (1.03 )% | (1.00 )% | (0.95 )% | (0.84 )% |
Supplemental data | ||||||
Portfolio turnover rate | 45 % | 61 % | 46 % | 51 % | 62 % | 68 % |
Net assets, end of period (000s omitted) | $289,219 | $264,938 | $414,683 | $392,316 | $269,657 | $243,038 |
1 | Calculated based upon average shares outstanding |
2 | Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
18 | Allspring VT Small Cap Growth Fund
Notes to financial statements (unaudited)
Notes to financial statements
1.
ORGANIZATION
Allspring Variable 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 VT Small Cap Growth Fund (the “Fund”) which is a diversified series of the Trust. The Trust offers shares of the Fund to separate accounts of various life insurance companies as funding vehicles for certain variable annuity contracts and variable life insurance policies.
2.
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Securities valuation
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value.
Investments which are not valued using the methods discussed above are valued at their fair value, as determined in good faith by Allspring Funds Management, LLC (“Allspring Funds Management”), which was named the valuation designee by the Board of Trustees. As the valuation designee, Allspring Funds Management is responsible for day-to-day valuation activities for the Allspring Funds. In connection with these responsibilities, Allspring Funds Management has established a Valuation Committee and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities. On a quarterly basis, the Board of Trustees receives reports of valuation actions taken by the Valuation Committee. On at least an annual basis, the Board of Trustees receives an assessment of the adequacy and effectiveness of Allspring Funds Management’s process for determining the fair value of the portfolio of investments.
Securities lending
During the period, the Fund participated in a program to lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. When securities were on loan, the Fund received interest or dividends on those securities. Cash collateral received in connection with its securities lending transactions was invested in Securities Lending Cash Investments, LLC (the “Securities Lending Fund”), an affiliated non-registered investment company. 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 Fund is no longer participating in the securities lending program and the Securities Lending Fund was liquidated. Securities Lending Fund was managed by Allspring Funds Management and was subadvised by Allspring Global Investments, LLC (“Allspring Investments”), an affiliate of Allspring Funds Management and wholly owned subsidiary of Allspring Global Investments Holdings, LLC. Allspring Funds Management received an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Securities Lending Fund increased. All of the fees received by Allspring Funds Management were paid to Allspring Investments for its services as subadviser.
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.
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 VT Small Cap Growth Fund | 19
Notes to financial statements (unaudited)
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 June 30, 2023, the aggregate cost of all investments for federal income tax purposes was $258,605,654 and the unrealized gains (losses) consisted of:
Gross unrealized gains | $68,614,485 |
Gross unrealized losses | (14,055,414 ) |
Net unrealized gains | $54,559,071 |
As of December 31, 2022, the Fund had capital loss carryforwards which consisted of $15,475,956 in short-term capital losses.
Class allocations
The separate classes of shares offered by the Fund differ principally in distribution fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.
3.
FAIR VALUATION MEASUREMENTS
Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
•Level 1—quoted prices in active markets for identical securities
•Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
•Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of June 30, 2023:
Quoted prices (Level 1) | Other significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |
Assets | ||||
Investments in: | ||||
Common stocks | ||||
Communication services | $939,720 | $0 | $0 | $939,720 |
Consumer discretionary | 28,156,120 | 0 | 0 | 28,156,120 |
Consumer staples | 25,119,377 | 0 | 0 | 25,119,377 |
Energy | 7,077,032 | 0 | 0 | 7,077,032 |
Financials | 25,902,329 | 0 | 0 | 25,902,329 |
Health care | 68,942,413 | 0 | 0 | 68,942,413 |
Industrials | 63,316,651 | 0 | 0 | 63,316,651 |
Information technology | 87,839,563 | 0 | 0 | 87,839,563 |
Short-term investments | ||||
Investment companies | 5,871,520 | 0 | 0 | 5,871,520 |
Total assets | $313,164,725 | $0 | $0 | $313,164,725 |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
For the six months ended June 2023, the Fund did not have transfers into/out of Level 3.
20 | Allspring VT Small Cap Growth Fund
Notes to financial statements (unaudited)
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 | 0.800 % |
Next $500 million | 0.750 |
Next $1 billion | 0.700 |
Next $1 billion | 0.675 |
Next $2 billion | 0.650 |
Next $5 billion | 0.640 |
Over $10 billion | 0.630 |
For the six months ended June 30, 2023, the management fee was equivalent to an annual rate of 0.80% of the Fund’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Investments is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.55% and declining to 0.40% as the average daily net assets of the Fund increase.
Administration fees
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee of 0.08% which is calculated based on the average daily net assets of each class.
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 April 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 June 30, 2023, the contractual expense caps are as follows:
EXPENSE RATIO CAPS | |
Class 1 | 0.95 % |
Class 2 | 1.20 |
Distribution fee
The Trust has adopted a distribution plan for Class 2 shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class 2 shares and paid to Allspring Funds Distributor, LLC, the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.25% of the average daily net assets of Class 2 shares.
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 six months ended June 30, 2023 were $131,298,150 and $132,071,039, respectively.
Allspring VT Small Cap Growth Fund | 21
Notes to financial statements (unaudited)
6.
BANK BORROWINGS
The Trust, Allspring Master Trust and Allspring Funds Trust (excluding the money market funds) 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 six months ended June 30, 2023, there were no borrowings by the Fund under the agreement.
7.
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.
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.
22 | Allspring VT Small Cap Growth Fund
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 1-866-259-3305, 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 VT Small Cap Growth Fund | 23
Other information (unaudited)
BOARD OF TRUSTEES AND OFFICERS
Each of the Trustees and Officers listed in the table below acts in identical capacities for each fund in the Allspring family of funds, which consists of 127 mutual funds comprising the Allspring Funds Trust, Allspring Variable Trust, Allspring Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information1. The mailing address of each Trustee and Officer is 1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203. Each Trustee and Officer serves an indefinite term, however, each Trustee serves such term until reaching the mandatory retirement age established by the Trustees.
Independent Trustees
Name and year of birth | Position held and length of service* | Principal occupations during past five years or longer | Current other public company or investment company directorships |
William R. Ebsworth (Born 1957) | Trustee, since 2015 | Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Foundation (non-profit organization). Mr. Ebsworth is a CFA charterholder. | N/A |
Jane A. Freeman (Born 1953) | Trustee, since 2015; Chair Liaison, since 2018 | Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is also an inactive Chartered Financial Analyst. | N/A |
Isaiah Harris, Jr. (Born 1952) | Trustee, since 2009; Audit Committee Chair, since 2019 | Retired. Member of the Advisory Board of CEF of East Central Florida. Chairman of the Board of CIGNA Corporation from 2009 to 2021, and Director from 2005 to 2008. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Fellowship of Christian Athletes. Mr. Harris is a certified public accountant (inactive status). | N/A |
David F. Larcker (Born 1950) | Trustee, since 2009 | Distinguished Visiting Fellow at the Hoover Institution since 2022. James Irvin Miller Professor of Accounting at the Graduate School of Business (Emeritus), Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. | N/A |
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 calling 1-800-260-5969 or by visiting the website at allspringglobal.com.
24 | Allspring VT Small Cap 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 VT Small Cap Growth Fund | 25
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.
26 | Allspring VT Small Cap Growth 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 Variable 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 VT Small Cap Growth 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, 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 VT Small Cap Growth Fund | 27
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 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 Board also noted that the investment performance of the 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 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 each share class.
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 the 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.
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 Fund and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
28 | Allspring VT Small Cap Growth Fund
Other information (unaudited)
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 VT Small Cap Growth Fund | 29
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 Variable 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.
30 | Allspring VT Small Cap 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: 1-800-260-5969
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-866-765-0778
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 1-800-260-5969 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-07052023-lpuzwqrl 08-23
SAR3003 06-23
SAR3003 06-23
ITEM 2. CODE OF ETHICS
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. INVESTMENTS
A Portfolio of Investments for the series of Allspring Variable 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 Allspring Variable Trust disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) provide reasonable assurances that material information relating to the registrant is made known to them by the appropriate persons based on their evaluation of these controls and procedures as of a date within 90 days of the filing of this report.
(b) There were no significant changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the most recent fiscal half-year of the period covered by this report that materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
ITEM 12. DISCLOSURES OF SECURITIES LENDING ACTIVITES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 13. EXHIBITS
| (a)(1) | Not applicable. | |
| (a)(2) | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2022. | |
| (a)(3) | Not applicable. | |
| (a)(4) | Not applicable. | |
| (b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2022. | |
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 Variable Trust | ||
| By: | /s/ Andrew Owen | |
| Andrew Owen | ||
| President | ||
| Date: August 24, 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 Variable Trust | ||
| By: | /s/ Andrew Owen | |
| Andrew Owen | ||
| President | ||
| Date: August 24, 2023 | ||
| By: | /s/Jeremy DePalma | |
| Jeremy DePalma | ||
| Treasurer | ||
| Date: August 24, 2023 | ||