UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-09255 Wells Fargo Variable Trust (Exact name of registrant as specified in charter) 525 Market St., San Francisco, CA 94105 (Address of principal executive offices) (Zip code) C. David Messman Wells Fargo Funds Management, LLC 525 Market St., San Francisco, CA 94105 (Name and address of agent for service) Registrant's telephone number, including area code: 800-643-9691 Date of fiscal year end: December 31, 2003 Date of reporting period: December 31, 2003 ITEM 1. REPORT TO SHAREHOLDERS =============================== [LOGO OMITTED] WELLS FARGO FUNDS [GRAPHIC OMITTED] Wells Fargo VARIABLE TRUST FUNDS ANNUAL REPORT WELLS FARGO VARIABLE TRUST ASSET ALLOCATION FUND WELLS FARGO VARIABLE TRUST EQUITY INCOME FUND WELLS FARGO VARIABLE TRUST EQUITY VALUE FUND WELLS FARGO VARIABLE TRUST GROWTH FUND WELLS FARGO VARIABLE TRUST INTERNATIONAL EQUITY FUND WELLS FARGO VARIABLE TRUST LARGE COMPANY GROWTH FUND WELLS FARGO VARIABLE TRUST MONEY MARKET FUND WELLS FARGO VARIABLE TRUST SMALL CAP GROWTH FUND WELLS FARGO VARIABLE TRUST TOTAL RETURN BOND FUND [GRAPHIC OMITTED] DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - ------------------------------------------------------------------------------- TABLE OF CONTENTS LETTER TO CONTRACTHOLDERS ................................................ 1 - ------------------------------------------------------------------------------ PERFORMANCE HIGHLIGHTS - ------------------------------------------------------------------------------ VARIABLE TRUST ASSET ALLOCATION FUND .................................. 2 VARIABLE TRUST EQUITY INCOME FUND ..................................... 4 VARIABLE TRUST EQUITY VALUE FUND ...................................... 6 VARIABLE TRUST GROWTH FUND ............................................ 8 VARIABLE TRUST INTERNATIONAL EQUITY FUND .............................. 10 VARIABLE TRUST LARGE COMPANY GROWTH FUND .............................. 12 VARIABLE TRUST MONEY MARKET FUND ...................................... 14 VARIABLE TRUST SMALL CAP GROWTH FUND .................................. 16 VARIABLE TRUST TOTAL RETURN BOND FUND ................................. 18 PORTFOLIO OF INVESTMENTS - ------------------------------------------------------------------------------ VARIABLE TRUST ASSET ALLOCATION FUND .................................. 20 VARIABLE TRUST EQUITY INCOME FUND ..................................... 35 VARIABLE TRUST EQUITY VALUE FUND ...................................... 38 VARIABLE TRUST GROWTH FUND ............................................ 41 VARIABLE TRUST INTERNATIONAL EQUITY FUND .............................. 44 VARIABLE TRUST LARGE COMPANY GROWTH FUND .............................. 48 VARIABLE TRUST MONEY MARKET FUND ...................................... 50 VARIABLE TRUST SMALL CAP GROWTH FUND .................................. 52 VARIABLE TRUST TOTAL RETURN BOND FUND ................................. 56 FINANCIAL STATEMENTS - ------------------------------------------------------------------------------ STATEMENTS OF ASSETS AND LIABILITIES .................................. 62 STATEMENTS OF OPERATIONS .............................................. 64 STATEMENTS OF CHANGES IN NET ASSETS ................................... 66 FINANCIAL HIGHLIGHTS .................................................. 70 NOTES TO FINANCIAL HIGHLIGHTS ............................................ 74 - ------------------------------------------------------------------------------ NOTES TO FINANCIAL STATEMENTS ............................................ 75 - ------------------------------------------------------------------------------ INDEPENDENT AUDITORS' REPORT ............................................. 82 - ------------------------------------------------------------------------------ OTHER INFORMATION ........................................................ 83 - ------------------------------------------------------------------------------ LIST OF ABBREVIATIONS .................................................... 85 - ------------------------------------------------------------------------------ NOT FDIC INSURED-NO BANK GUARANTEE-MAY LOSE VALUE THIS PAGE IS INTENTIONALLY LEFT BLANK -- WELLS FARGO VARIABLE TRUST FUNDS - ------------------------------------------------------------------------------- DEAR VALUED CONTRACTHOLDER, We are pleased to present you with this annual report for the period ended December 31, 2003. On the following pages, you will find a discussion of the Fund(s), including performance highlights, the Fund managers' strategic outlook and facts and figures about the Fund's portfolio. THE ECONOMY: RECOVERY ON TRACK - -------------------------------------------------------------------------------- Although the year started slowly, weighed down by the looming threat of war with Iraq, signs of economic recovery ultimately renewed investor interest. Thanks to the lowest interest rates in more than 45 years, tax cuts, and a weakening U.S. dollar, the economy gained momentum during the year. By the third quarter, gross domestic product growth levels reached 8.2%. Although fourth quarter growth slowed to a more moderate 3.5% - 4%, this could provide solid footing for an economic recovery into 2004. ECONOMIC RECOVERY DAMPENS THE BOND MARKET - -------------------------------------------------------------------------------- Bond returns lagged behind stock returns for the first time since 1999, finishing 2003 with a 4.1% gain for the Lehman Brothers Aggregate Bond Index. The pattern of performance in 2003 was typical for an economic expansion, with a strong rally by BBB-rated securities driving corporate debt well ahead of other investment-grade sectors of the market. High-yield securities performed even better, with the Lehman Brothers Corporate High Yield Index gaining nearly 29%, a 12-year high. Elsewhere, municipal securities outperformed taxable securities, as yield differences between the two markets narrowed. Non-U.S. Treasury securities, meanwhile, lagged behind their U.S. counterparts. Interest rate uncertainties made this an unusually difficult period in which to formulate bond strategy. Many money managers kept portfolios tilted toward those sectors of the market that are more resilient to higher interest rates, such as shorter-term paper, and corporate and mortgage-backed bonds. STOCKS RETURN TO FAVOR - -------------------------------------------------------------------------------- In a welcome break from the previous three years, the S&P 500 Index ended 2003 with a solid 28.67% gain. Performance was fairly typical for the first year of an economic recovery, with high-tech, cyclically sensitive, small-cap and generally lower-quality stocks leading the way as the recovery gathered steam. The rally in technology stocks helped drive the NASDAQ to a gain of more than 50%. International stocks outperformed domestic stocks, but only because of the U.S. dollar's steep decline in the currency market. As long as interest rates remain low, cyclicals and smaller cap stocks may continue to lead the way. Once interest rates rise, however, leadership is likely to rotate to health care, consumer staples and other defensive sectors of the market in a pattern similar to those of past economic cycles. OUR COMMITMENT TO OUR SHAREHOLDERS - -------------------------------------------------------------------------------- We recognize that there has been a great deal of unsettling news recently about inappropriate trading practices of some mutual fund companies. We share the concerns of all investors that these problems need to be addressed fully to protect the interests of all mutual fund shareholders. We will remain diligent in our efforts to operate in full compliance with all legal requirements to protect the interests of all of our shareholders. Thank you for choosing Wells Fargo Variable Trust Funds. We appreciate the confidence that you have placed in us. If you have any questions or need further information, please contact your investment professional, or call us at 1-800-222-8222. Sincerely, /S/Karla M. Rabusch President WELLS FARGO FUNDS 1 WELLS FARGO VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - ------------------------------------------------------------------------------- ASSET ALLOCATION FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Asset Allocation Fund (the Fund) seeks long-term total return, consistent with reasonable risk. ADVISER Wells Fargo Funds Management, LLC SUB-ADVISER Wells Capital Management Incorporated FUND MANAGER Galen G. Blomster, CFA INCEPTION DATE 04/15/94 PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- The Fund returned 22.09% 1 for the twelve-month period ended December 31, 2003. In comparison, the S&P 500 Index 2, a stock benchmark, returned 28.67%, while the Lehman Brothers 20+ Treasury Index 3, a bond benchmark, returned 1.80% for the period. The Fund distributed $0.18 per share in dividend income and no capital gains during the period. During the twelve months ended December 31, 2003, the Fund's stock holdings significantly outperformed its bond holdings. While the S&P 500 Index returned more than 28% during the period, both the stock and bond markets followed a volatile path that ranged from investor fears of deflation to uncertainty surrounding the war in Iraq to concerns over inflation. Rising commodity prices and a declining U.S. dollar helped to push bond yields higher during the second half of the year (bond prices move inversely to bond yields), while strong corporate earnings and increasing investor confidence about an economic recovery fueled the advance in stock prices. Market volatility and the decoupling of the stock and bond markets continued to create opportunities for the Tactical Asset Allocation (TAA) Model, which seeks to enhance portfolio returns by shifting assets between stocks and bonds when a compelling opportunity exists. As a result, the TAA Model maintained a 25% overweighting toward stocks throughout the period. To maintain the Fund's 25% overweighting toward stocks, we employed a hedged futures overlay transaction, thus keeping the portfolio's underlying assets near their long-term strategic allocation of 60% stocks and 40% bonds. Throughout the twelve-month period, the Fund was at a maximum equity overweight with an effective target allocation of 85% stocks and 15% bonds. With stocks outperforming bonds, the 25% weighting toward stocks added value to the Fund's portfolio during the reporting period. STRATEGIC OUTLOOK - -------------------------------------------------------------------------------- Although stocks significantly outperformed bonds during the year, the TAA Model continues to indicate that stocks are still attractive relative to bonds. As a result, we intend to maintain the Fund's overweight position in stocks until the relative valuation between stocks and bonds returns to a more normal environment. - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Funds are available for purchase through certain variable annuity contracts and variable life insurance policies offered by the separate accounts of participating insurance companies. The participating insurance companies and their separate accounts are the shareholders or investors in the Fund and the separate accounts of the participating insurance companies place orders to purchase and redeem shares of the Fund based on, among other things, the amount of premium payments to be invested and the amount of surrender and transfer requests to be affected that day. 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. The views expressed are as of December 31, 2003, and are those of the Fund's manager. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally, or the Wells Fargo Variable Trust Asset Allocation Fund. 1 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 is available by calling 1-800-222-8222. The Fund's Adviser has committed through April 30, 2004 to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's returns would have been lower. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. Performance shown for the Wells Fargo Variable Trust Asset Allocation Fund for periods prior to September 20, 1999, reflects performance of the Life and Annuity Trust Asset Allocation Fund, its predecessor fund. Effective at the close of business September 17, 1999, the Life and Annuity Trust and Norwest Select Funds were reorganized into the Wells Fargo Variable Trust Funds. 2 PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS - ------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2003) - ----------------------------------------------------------------------------------------------------------- 1-Year 5-Year Life of Fund WELLS FARGO VARIABLE TRUST ASSET ALLOCATION FUND 22.09 1.80 9.46 - ----------------------------------------------------------------------------------------------------------- BENCHMARKS S&P 500 INDEX 2 28.67 (0.57) 11.80 - ----------------------------------------------------------------------------------------------------------- LEHMAN BROTHERS 20+ TREASURY INDEX 3 1.80 6.17 8.89 - ----------------------------------------------------------------------------------------------------------- FUND CHARACTERISTICS 4 (AS OF DECEMBER 31, 2003) - ----------------------------------------------------- BETA * 0.68 - ----------------------------------------------------- AVERAGE COUPON OF BOND PORTFOLIO 5.69% - ----------------------------------------------------- AVERAGE MATURITY OF BOND PORTFOLIO 21.80 years - ----------------------------------------------------- AVERAGE DURATION OF BOND PORTFOLIO 11.90 years - ----------------------------------------------------- PORTFOLIO TURNOVER 7% - ----------------------------------------------------- NAV $12.51 - ----------------------------------------------------- * A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE BENCHMARK BETA IS 1.00 BY DEFINITION. TEN LARGEST HOLDINGS 4,5 (AS OF DECEMBER 31, 2003) US TREASURY BOND, 6,13%,11/15/27 1.88% - ----------------------------------------------------- US TREASURY BOND, 6.25%,5/15/30 1.56% - ----------------------------------------------------- US TREASURY BOND, 5.38%,2/15/31 1.40% - ----------------------------------------------------- US TREASURY BOND, 6.00%,2/15/26 1.16% - ----------------------------------------------------- US TREASURY BOND, 6.88%,8/15/25 1.03% - ----------------------------------------------------- GENERAL ELECTRIC COMPANY 0.97% - ----------------------------------------------------- US TREASURY BOND, 6.13%,8/15/29 0.96% - ----------------------------------------------------- US TREASURY BOND, 6.50%,11/15/26 0.96% - ----------------------------------------------------- US TREASURY BILL, 0.95%,5/13/04 0.96% - ----------------------------------------------------- US TREASURY BOND, 7.63%,2/15/25 0.93% - ----------------------------------------------------- STRATEGIC ALLOCATION 4 (AS OF DECEMBER 31, 2003) - ---------------------------------------------------- STOCKS 60% - ---------------------------------------------------- BONDS 40% - ---------------------------------------------------- EFFECTIVE ALLOCATION 4,6 (AS OF DECEMBER 31, 2003) - ----------------------------------------------------- STOCKS 85% - ----------------------------------------------------- BONDS 15% - ----------------------------------------------------- SECTOR DISTRIBUTION 4 (AS OF DECEMBER 31, 2003) - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Consumer Discretionary 6% Consumer Staples 6% Energy 3% Financials 12% Health Care 8% Industrials 6% Information Technology 10% Materials 2% Telecommunication Services 2% Utilities 2% U.S. Treasury Securities 29% Other 1% Cash 13% GROWTH OF $10,000 INVESTMENT 7 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Wells Fargo Lehman Brothers Variable Trust 20+ Treasury S & P Asset Allocation Index 500 Index Apr-94 $10,000 $10,000 $10,000 Apr-94 $ 9,950 $9,876 $10,106 May-94 $9,940 $9,795 $10,271 Jun-94 $9,796 $9,693 $10,019 Jul-94 $10,107 $10,052 $10,348 Aug-94 $10,248 $9,953 $10,772 Sep-94 $9,964 $9,613 $10,509 Oct-94 $10,055 $9,582 $10,745 Nov-94 $9,954 $9,650 $10,354 Dec-94 $10,113 $9,809 $10,507 Jan-95 $10,384 $10,075 $10,780 Feb-95 $10,707 $10,358 $11,199 Mar-95 $10,894 $10,456 $11,529 Apr-95 $11,137 $10,645 $11,868 May-95 $11,686 $11,522 $12,342 Jun-95 $11,870 $11,662 $12,628 Jul-95 $12,031 $11,455 $13,047 Aug-95 $12,127 $11,729 $13,080 Sep-95 $12,438 $11,961 $13,631 Oct-95 $12,514 $12,320 $13,583 Nov-95 $12,860 $12,641 $14,178 Dec-95 $13,041 $13,005 $14,451 Jan-96 $13,284 $12,990 $14,943 Feb-96 $13,180 $12,300 $15,082 Mar-96 $13,256 $12,035 $15,226 Apr-96 $13,233 $11,821 $15,450 May-96 $13,350 $11,758 $15,847 Jun-96 $13,531 $12,021 $15,908 Jul-96 $13,223 $12,021 $15,204 Aug-96 $13,199 $11,849 $15,525 Sep-96 $13,705 $12,194 $16,398 Oct-96 $14,185 $12,705 $16,850 Nov-96 $14,917 $13,159 $18,123 Dec-96 $14,535 $12,815 $17,764 Jan-97 $14,815 $12,700 $18,874 Feb-97 $14,853 $12,703 $19,021 Mar-97 $14,323 $12,354 $18,241 Apr-97 $14,904 $12,668 $19,328 May-97 $15,406 $12,814 $20,504 Jun-97 $15,820 $13,082 $21,422 Jul-97 $16,903 $13,921 $23,125 Aug-97 $16,211 $13,491 $21,830 Sep-97 $16,822 $13,891 $23,024 Oct-97 $16,849 $14,402 $22,255 Nov-97 $17,232 $14,628 $23,286 Dec-97 $17,569 $14,888 $23,686 Jan-98 $17,833 $15,200 $23,947 Feb-98 $18,624 $15,079 $25,673 Mar-98 $19,295 $15,109 $26,988 Apr-98 $19,458 $15,160 $27,263 May-98 $19,354 $15,480 $26,794 Jun-98 $20,075 $15,888 $27,882 Jul-98 $19,881 $15,798 $27,586 Aug-98 $17,985 $16,570 $23,600 Sep-98 $18,996 $17,181 $25,113 Oct-98 $20,090 $16,888 $27,155 Nov-98 $21,065 $17,044 $28,800 Dec-98 $22,008 $17,005 $30,459 Jan-99 $22,760 $17,166 $31,732 Feb-99 $21,942 $16,249 $30,745 Mar-99 $22,567 $16,177 $31,975 Apr-99 $23,208 $16,190 $33,213 May-99 $22,715 $15,933 $32,429 Jun-99 $23,349 $15,738 $34,229 Jul-99 $22,838 $15,648 $33,160 Aug-99 $22,723 $15,575 $32,996 Sep-99 $22,394 $15,688 $32,092 Oct-99 $23,190 $15,689 $34,123 Nov-99 $23,389 $15,570 $34,816 Dec-99 $24,060 $15,294 $36,866 Jan-00 $23,560 $15,561 $35,016 Feb-00 $23,726 $16,113 $34,354 Mar-00 $25,436 $16,716 $37,714 Apr-00 $24,882 $16,550 $36,578 May-00 $24,463 $16,467 $35,829 Jun-00 $25,031 $16,825 $36,714 Jul-00 $24,930 $17,157 $36,141 Aug-00 $26,088 $17,576 $38,385 Sep-00 $25,067 $17,276 $36,358 Oct-00 $25,137 $17,564 $36,206 Nov-00 $24,069 $18,160 $33,353 Dec-00 $24,305 $18,584 $33,516 Jan-01 $24,921 $18,583 $34,706 Feb-01 $23,285 $18,910 $31,544 Mar-01 $22,156 $18,758 $29,547 Apr-01 $23,216 $18,169 $31,840 May-01 $23,375 $18,200 $32,054 Jun-01 $23,040 $18,388 $31,275 Jul-01 $23,146 $19,114 $30,968 Aug-01 $22,339 $19,573 $29,033 Sep-01 $21,227 $19,618 $26,690 Oct-01 $21,867 $20,785 $27,200 Nov-01 $22,618 $19,683 $29,286 Dec-01 $22,614 $19,258 $29,544 Jan-02 $22,449 $19,528 $29,112 Feb-02 $22,192 $19,743 $28,550 Mar-02 $22,472 $18,831 $29,624 Apr-02 $21,881 $19,603 $27,829 May-02 $21,789 $19,605 $27,625 Jun-02 $21,051 $19,952 $25,659 Jul-02 $19,965 $20,584 $23,660 Aug-02 $20,190 $21,659 $23,814 Sep-02 $18,477 $22,618 $21,227 Oct-02 $19,702 $21,774 $23,093 Nov-02 $20,643 $21,598 $24,451 Dec-02 $19,709 $22,533 $23,016 Jan-03 $19,273 $22,463 $22,415 Feb-03 $19,065 $23,173 $22,079 Mar-03 $19,186 $22,786 $22,291 Apr-03 $20,517 $23,078 $24,128 May-03 $21,544 $24,557 $25,397 Jun-03 $21,698 $24,054 $25,722 Jul-03 $21,641 $21,576 $26,175 Aug-03 $22,042 $22,047 $26,685 Sep-03 $21,987 $23,257 $26,402 Oct-03 $22,888 $22,538 $27,894 Nov-03 $23,060 $22,669 $28,139 Dec-03 $24,063 $22,939 $29,614 - ------------------------------------------------------------------------------- 2 The S&P 500 Index is an unmanaged index of 500 widely held common stocks representing, among others, industrial, financial, utility, and transportation companies listed or traded on national exchanges or over-the-counter markets. You cannot invest directly in an index. 3 The Lehman Brothers 20+ Treasury Index is an unmanaged index composed of securities in the U.S. Treasury Index with maturities of 20 years or greater. The U.S. Treasury Index represents public obligations of the U.S. Treasury with a remaining maturity of one year or more. You cannot invest directly in an index. 4 Portfolio holdings and characteristics are subject to change. 5 The Ten Largest Holdings are calculated based on the market value of the securities divided by total market value of the portfolio. 6 The effective allocation for stocks includes positions in S&P 500 Index futures and the effective allocation for bonds includes positions in U.S. Treasury bond futures. 7 The chart compares the performance of the Wells Fargo Variable Trust Asset Allocation Fund for the life of the Fund with the S&P 500 Index and the Lehman Brothers 20+ Treasury Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 3 WELLS FARGO VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - ------------------------------------------------------------------------------- EQUITY INCOME FUND INVESTMENT OBJECTIVE - ------------------------------------------------------------------------------- The Wells Fargo Variable Trust Equity Income Fund (the Fund) seeks long-term capital appreciation and above-average dividend income. ADVISER Wells Fargo Funds Management, LLC SUB-ADVISER Wells Capital Management Incorporated FUND MANAGERS David L. Roberts, CFA Gary J. Dunn, CFA INCEPTION DATE 05/06/96 PERFORMANCE HIGHLIGHTS - ------------------------------------------------------------------------------- The Fund returned 26.21% 1 for the twelve-month period ended December 31, 2003, underperforming both the S&P 500 Index 2, which returned 28.67%, and the Russell 1000 Value Index 3, which returned 30.03%. The Fund distributed $0.21 per share in dividend income and $0.34 in capital gains during the period. The stock market (as measured by the S&P 500 Index) produced its first full year positive return since 1999, and every individual sector of the S&P 500 Index had a positive return for the first time since 1997. Sectors that contributed to the Fund's performance included consumer discretionary, industrials, utilities and financials. The value of Fund holding Sears Roebuck nearly doubled in 2003, after the sale of its credit operations to Citicorp, and as the retailing industry experienced improvement overall. Fund holding McDonalds gained more than 50%, as management refocused on company fundamentals, resulting in a significant improvement in sales. Another Fund holding, industrial company Honeywell, also performed well as the market began to take notice of its proprietary technologies, including integrated avionic and process automation software. Sectors that did not keep up with the market's strong annual performance included telecommunications, health care, and consumer staples. However, the Fund's underweight position in the telecommunications sector helped lessen the negative impact of the sector's underperformance. Telecommunications companies continued to struggle with stiff competition, as evidenced by AT&T's announcement of increased job cuts. The Fund continued to focus on large cap, well established, dividend-paying stocks, which did not do as well as small and mid-cap stocks during the period, contributing to the Fund's underperformance relative to its benchmarks. Our focus on reducing risk and improving diversification continued during the year. The Fund's positions in Sears (after capturing virtually all of the 2003 gains), Schlumberger, Eastman Kodak, Wyeth and Texas Utilities were sold based on valuation and fundamentals. The Fund established new positions in Allstate, FLP Group, ConocoPhillips, Kimberly Clark, Nokia, Wachovia, Microsoft, BankAmerica, Citigroup, MetLife, Abbott Labs, Becton Dickinson, Air Products & Chemicals, Duke Energy and FirstEnergy. STRATEGIC OUTLOOK - -------------------------------------------------------------------------------- The Fund will continue to focus on large cap, well established, dividend-paying stocks with attractive relative valuations. We believe that large cap companies, especially dividend-paying companies, may move into a leadership position in 2004. To date, small and mid-cap stocks have led the way in this stock market recovery. - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Funds are available for purchase through certain variable annuity contracts and variable life insurance policies offered by the separate accounts of participating insurance companies. The participating insurance companies and their separate accounts are the shareholders or investors in the Fund and the separate accounts of the participating insurance companies place orders to purchase and redeem shares of the Fund based on, among other things, the amount of premium payments to be invested and the amount of surrender and transfer requests to be affected that day. 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. The views expressed are as of December 31, 2003, and are those of the Fund's managers. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally, or the Wells Fargo Variable Trust Equity Income Fund. 1 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 is available by calling 1-800-222-8222. The Fund's Adviser has committed through April 30, 2004 to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's return would have been lower. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. 4 PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2003) - ---------------------------------------------------------------------------------------------------- 1-Year 5-Year Life of Fund WELLS FARGO VARIABLE TRUST EQUITY INCOME FUND 26.21 1.25 7.65 - ---------------------------------------------------------------------------------------------------- BENCHMARKS S&P 500 INDEX 2 28.67 (0.57) 8.85 - ---------------------------------------------------------------------------------------------------- RUSSELL 1000 VALUE INDEX 3 30.03 3.56 10.40 FUND CHARACTERISTICS 5 (AS OF DECEMBER 31, 2003) - --------------------------------------------------------- BETA * 0.78 - --------------------------------------------------------- PRICE TO EARNINGS RATIO (TRAILING 12 MONTHS) 17.3 - --------------------------------------------------------- PRICE TO BOOK RATIO 3.0 - --------------------------------------------------------- MEDIAN MARKET CAP ($B) $57.3 - --------------------------------------------------------- PORTFOLIO TURNOVER 15% - --------------------------------------------------------- NET ASSET VALUE (NAV) $14.93 - --------------------------------------------------------- * A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE BENCHMARK BETA IS 1.00 BY DEFINITION. TEN LARGEST EQUITY HOLDINGS 4,5 (AS OF DECEMBER 31, 2003) - --------------------------------------------------------------------------- INTERNATIONAL BUSINESS MACHINES CORPORATION 4.13% - --------------------------------------------------------------------------- FORTUNE BRANDS INCORPORATED 4.05% - --------------------------------------------------------------------------- US BANCORP 4.02% - --------------------------------------------------------------------------- EXXON MOBIL CORPORATION 3.41% - --------------------------------------------------------------------------- PEPSICO INCORPORATED 3.39% - --------------------------------------------------------------------------- 3M COMPANY 3.33% - --------------------------------------------------------------------------- HEWLETT-PACKARD COMPANY 3.25% - --------------------------------------------------------------------------- EMERSON ELECTRIC COMPANY 3.16% - --------------------------------------------------------------------------- JP MORGAN CHASE & COMPANY 3.02% - --------------------------------------------------------------------------- PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED 2.94% - --------------------------------------------------------------------------- SECTOR DISTRIBUTION 5 (AS OF DECEMBER 31, 2003) - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Consumer Discretionary 13% Consumer Staples 11% Energy 10% Financials 23% Health Care 7% Industrials 10% Information Technology 10% Materials 5% Telecommunications Services 3% Utilities 4% Cash 4% GROWTH OF $10,000 INVESTMENT 6 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Wells Fargo Variable Trust Russell 1000 Equity Income S&P 500 Index Value Index May-96 $10,000 $10,000.00 $10,000.00 May-96 $10,000 $10,257.00 $10,125.00 Jun-96 $10,110 $10,295.98 $10,133.10 Jul-96 $9,710 $9,840.89 $9,750.07 Aug-96 $9,830 $10,048.54 $10,028.92 Sep-96 $10,250 $10,613.27 $10,427.07 Oct-96 $10,490 $10,906.19 $10,830.60 Nov-96 $11,170 $11,729.61 $11,615.81 Dec-96 $10,995 $11,497.36 $11,467.13 Jan-97 $11,540 $12,215.95 $12,023.29 Feb-97 $11,691 $12,311.23 $12,200.03 Mar-97 $11,348 $11,806.47 $11,760.83 Apr-97 $11,681 $12,510.14 $12,254.78 May-97 $12,215 $13,270.75 $12,939.83 Jun-97 $12,719 $13,865.28 $13,494.95 Jul-97 $13,535 $14,967.57 $14,511.11 Aug-97 $12,910 $14,129.39 $13,994.52 Sep-97 $13,525 $14,902.27 $14,839.79 Oct-97 $13,132 $14,404.53 $14,425.76 Nov-97 $13,716 $15,071.46 $15,063.38 Dec-97 $13,953 $15,330.69 $15,503.23 Jan-98 $13,994 $15,499.33 $15,284.63 Feb-98 $14,902 $16,616.83 $16,313.29 Mar-98 $15,647 $17,467.61 $17,311.66 Apr-98 $15,800 $17,645.78 $17,427.65 May-98 $15,585 $17,342.27 $17,169.72 Jun-98 $15,830 $18,046.37 $17,389.49 Jul-98 $15,381 $17,855.08 $17,081.70 Aug-98 $13,545 $15,275.02 $14,539.94 Sep-98 $14,290 $16,254.15 $15,374.53 Oct-98 $15,290 $17,575.61 $16,566.06 Nov-98 $15,993 $18,640.69 $17,338.04 Dec-98 $16,523 $19,714.40 $17,929.27 Jan-99 $16,472 $20,538.46 $18,072.70 Feb-99 $16,482 $19,899.71 $17,817.87 Mar-99 $17,091 $20,695.70 $18,186.70 Apr-99 $17,959 $21,496.62 $19,885.34 May-99 $17,917 $20,989.30 $19,666.60 Jun-99 $18,630 $22,154.21 $20,236.94 Jul-99 $18,145 $21,462.56 $19,643.99 Aug-99 $17,856 $21,356.32 $18,915.20 Sep-99 $17,195 $20,770.94 $18,255.06 Oct-99 $17,659 $22,085.74 $19,306.55 Nov-99 $17,814 $22,534.08 $19,155.96 Dec-99 $17,829 $23,861.34 $19,247.91 Jan-00 $16,911 $22,663.50 $18,620.43 Feb-00 $15,607 $22,235.16 $17,236.93 Mar-00 $17,163 $24,409.76 $19,339.84 Apr-00 $17,132 $23,675.02 $19,115.49 May-00 $17,435 $23,189.68 $19,316.21 Jun-00 $17,021 $23,762.47 $18,433.46 Jul-00 $16,706 $23,391.78 $18,663.87 Aug-00 $17,637 $24,844.40 $19,701.59 Sep-00 $17,459 $23,532.62 $19,882.84 Oct-00 $17,951 $23,433.78 $20,371.96 Nov-00 $17,341 $21,587.20 $19,616.16 Dec-00 $18,245 $21,692.98 $20,598.93 Jan-01 $18,202 $22,463.08 $20,677.20 Feb-01 $17,676 $20,416.69 $20,102.38 Mar-01 $16,696 $19,124.32 $19,392.76 Apr-01 $17,825 $20,608.36 $20,343.01 May-01 $18,158 $20,746.44 $20,800.73 Jun-01 $17,631 $20,242.30 $20,338.95 Jul-01 $17,459 $20,043.93 $20,296.24 Aug-01 $17,087 $18,791.18 $19,482.36 Sep-01 $16,000 $17,274.73 $18,110.80 Oct-01 $16,188 $17,604.68 $17,955.05 Nov-01 $17,065 $18,954.96 $18,998.24 Dec-01 $17,257 $19,121.76 $19,446.59 Jan-02 $17,002 $18,842.58 $19,296.86 Feb-02 $17,124 $18,478.92 $19,327.73 Mar-02 $17,712 $19,173.73 $20,241.93 Apr-02 $17,132 $18,011.80 $19,547.63 May-02 $17,121 $17,880.32 $19,645.37 Jun-02 $16,206 $16,607.24 $18,517.73 Jul-02 $14,729 $15,313.53 $16,795.58 Aug-02 $14,830 $15,413.07 $16,923.23 Sep-02 $12,868 $13,739.21 $15,041.36 Oct-02 $13,835 $14,946.89 $16,155.93 Nov-02 $14,702 $15,825.77 $17,173.75 Dec-02 $13,933 $14,896.79 $16,428.41 Jan-03 $13,571 $14,507.99 $16,030.84 Feb-03 $13,164 $14,290.37 $15,602.82 Mar-03 $13,201 $14,427.55 $15,629.34 Apr-03 $14,268 $15,616.39 $17,004.73 May-03 $15,086 $16,437.81 $18,103.23 Jun-03 $15,376 $16,648.21 $18,329.52 Jul-03 $15,652 $16,941.22 $18,602.63 Aug-03 $15,722 $17,271.57 $18,892.83 Sep-03 $15,633 $17,088.49 $18,707.68 Oct-03 $16,454 $18,053.99 $19,852.59 Nov-03 $16,630 $18,212.87 $20,122.59 Dec-03 $17,585 $19,167.22 $21,362.14 - -------------------------------------------------------------------------------- Performance shown for the Wells Fargo Variable Trust Equity Income Fund for periods prior to September 20, 1999, reflects performance of the Norwest Select Income Equity Fund, its predecessor fund. Effective at the close of business September 17, 1999, the Life and Annuity Trust and Norwest Select Funds were reorganized into the Wells Fargo Variable Trust Funds. 2 The S&P 500 Index is an unmanaged index of 500 widely held common stocks representing, among others, industrial, financial, utility and transportation companies listed or traded on national exchanges or over-the-counter markets. You cannot invest directly in an index. 3 The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. You cannot invest directly in an index. 4 The Ten Largest Equity Holdings are calculated based on the market value of the securities divided by total market value of the portfolio. 5 Portfolio holdings and characteristics are subject to change. 6 The chart compares the performance of the Wells Fargo Variable Trust Equity Income Fund for the life of the Fund with the S&P 500 Index and the Russell 1000 Value Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 5 WELLS FARGO VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- EQUITY VALUE FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Equity Value Fund (the Fund) seeks long-term capital appreciation and above-average dividend income. ADVISER Wells Fargo Funds Management, LLC SUB-ADVISER Wells Capital Management Incorporated FUND MANAGERS David L. Roberts, CFA Gary J. Dunn, CFA INCEPTION DATE 05/01/98 PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- The Fund returned 25.57% 1 for the twelve-month period ended December 31, 2003, underperforming both the S&P 500 Index 2, which returned 28.67%, and the Russell 1000 Value Index 3, which returned 30.03%. The Fund distributed $0.12 per share in dividend income and no capital gains during the period. The stock market (as measured by the S&P 500 Index) produced its first full year positive return since 1999, and every individual sector of the S&P 500 Index had a positive return for the first time since 1997. Sectors that contributed to the Fund's performance included consumer discretionary, industrials, utilities and financials. The value of Fund holding Sears Roebuck nearly doubled in 2003, after the sale of its credit operations to Citicorp, and as the retailing industry experienced improvement overall. Fund holding McDonalds gained more than 50%, as management refocused on company fundamentals, resulting in a significant improvement in sales. Another Fund holding, industrial company Honeywell, also performed well as the market began to take notice of its proprietary technologies, including integrated avionic and process automation software. Sectors that did not keep up with the market's strong annual performance included telecommunications, health care, and consumer staples. However, the Fund's underweight position in the telecommunications sector helped lessen the negative impact of the sector's underperformance. Telecommunications companies continued to struggle with stiff competition, as evidenced by AT&T's announcement of increased job cuts. The Fund continued to focus on large cap, well established, dividend-paying stocks, which did not do as well as small and mid-cap stocks during the period, contributing to the Fund's underperformance relative to its benchmarks. Our focus on reducing risk and improving diversification continued during the year. The Fund's positions in Sears (after capturing virtually all of the 2003 gains), Schlumberger, Eastman Kodak, Wyeth and Texas Utilities were sold based on valuation and fundamentals. The Fund established new positions in Allstate, FLP Group, ConocoPhillips, Kimberly Clark, Nokia, Wachovia, Microsoft, BankAmerica, Citigroup, MetLife, Abbott Labs, Becton Dickinson, Air Products & Chemicals, Duke Energy and FirstEnergy. STRATEGIC OUTLOOK - -------------------------------------------------------------------------------- The Fund will continue to focus on large cap, well established, dividend-paying stocks with attractive relative valuations. We believe that large cap companies, especially dividend-paying companies, may move into a leadership position in 2004. To date, small and mid-cap stocks have led the way in this stock market recovery. - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Funds are available for purchase through certain variable annuity contracts and variable life insurance policies offered by the separate accounts of participating insurance companies. The participating insurance companies and their separate accounts are the shareholders or investors in the Fund and the separate accounts of the participating insurance companies place orders to purchase and redeem shares of the Fund based on, among other things, the amount of premium payments to be invested and the amount of surrender and transfer requests to be affected that day. 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. The views expressed are as of December 31, 2003, and are those of the Fund's managers. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally, or the Wells Fargo Variable Trust Equity Value Fund. 1 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 is available by calling 1-800-222-8222. The Fund's Adviser has committed through April 30, 2004 to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's returns would have been lower. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. 6 PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2003) - ---------------------------------------------------------------------------------------------------------- 1-Year 5-Year Life of Fund WELLS FARGO VARIABLE TRUST EQUITY VALUE FUND 25.57 (1.64) (2.11) - ---------------------------------------------------------------------------------------------------------- BENCHMARKS S&P 500 INDEX 2 28.67 (0.57) 1.47 - ---------------------------------------------------------------------------------------------------------- RUSSELL 1000 VALUE INDEX 3 30.03 3.56 3.65 FUND CHARACTERISTICS 5 (AS OF DECEMBER 31, 2003) - -------------------------------------------------------- BETA * 0.84 - -------------------------------------------------------- PRICE TO EARNINGS RATIO (TRAILING 12 MONTHS) 17.40 - -------------------------------------------------------- PRICE TO BOOK RATIO 3.00 - -------------------------------------------------------- MEDIAN MARKET CAP ($B) $57.30 - -------------------------------------------------------- PORTFOLIO TURNOVER 20% - -------------------------------------------------------- NET ASSET VALUE (NAV) $8.34 - -------------------------------------------------------- *A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE BENCHMARK BETA IS 1.00 BY DEFINITION. TEN LARGEST EQUITY HOLDINGS 4,5 (AS OF DECEMBER 31, 2003) - ---------------------------------------------------------------------- FORTUNE BRANDS INCORPORATED 4.24% - ---------------------------------------------------------------------- 3M COMPANY 3.67% - ---------------------------------------------------------------------- EXXON MOBIL CORPORATION 3.56% - ---------------------------------------------------------------------- HEWLETT-PACKARD COMPANY 3.54% - ---------------------------------------------------------------------- PEPSICO INCORPORATED 3.53% - ---------------------------------------------------------------------- INTERNATIONAL BUSINESS MACHINES CORPORATION 3.40% - ---------------------------------------------------------------------- US BANCORP 3.35% - ---------------------------------------------------------------------- EMERSON ELECTRIC COMPANY 3.30% - ---------------------------------------------------------------------- JP MORGAN CHASE & COMPANY 3.14% - ---------------------------------------------------------------------- SARA LEE CORPORATION 2.99% - ---------------------------------------------------------------------- SECTOR DISTRIBUTION 5 (AS OF DECEMBER 31, 2003) - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Consumer Discretionary 13% Consumer Staples 12% Energy 10% Financials 22% Health Care 8% Industrials 11% Information Technology 9% Materials 5% Telecommunications Services 3% Utilities 4% Cash 3% GROWTH OF $10,000 INVESTMENT 6 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Wells Fargo Variable Trust Russell 1000 Equity Value Value Index S&P 500 Index Apr-98 $10,000 $10,000 $10,000 May-98 $9,680 $9,852 $9,828 Jun-98 $9,739 $9,978 $10,227 Jul-98 $9,268 $9,801 $10,119 Aug-98 $8,156 $8,343 $8,656 Sep-98 $8,626 $8,822 $9,211 Oct-98 $9,199 $9,506 $9,960 Nov-98 $9,460 $9,949 $10,564 Dec-98 $9,624 $10,288 $11,172 Jan-99 $9,403 $10,370 $11,639 Feb-99 $9,161 $10,224 $11,277 Mar-99 $9,380 $10,436 $11,728 Apr-99 $10,188 $11,410 $12,182 May-99 $10,087 $11,285 $11,895 Jun-99 $10,399 $11,612 $12,555 Jul-99 $10,024 $11,272 $12,163 Aug-99 $9,477 $10,854 $12,103 Sep-99 $8,981 $10,475 $11,771 Oct-99 $9,285 $11,078 $12,516 Nov-99 $9,255 $10,992 $12,770 Dec-99 $9,386 $11,044 $13,522 Jan-00 $9,142 $10,684 $12,844 Feb-00 $8,715 $9,891 $12,601 Mar-00 $9,498 $11,097 $13,833 Apr-00 $9,284 $10,968 $13,417 May-00 $9,416 $11,084 $13,142 Jun-00 $9,157 $10,577 $13,466 Jul-00 $9,311 $10,709 $13,256 Aug-00 $9,974 $11,305 $14,080 Sep-00 $9,813 $11,409 $13,336 Oct-00 $10,048 $11,689 $13,280 Nov-00 $9,527 $11,256 $12,234 Dec-00 $9,929 $11,820 $12,294 Jan-01 $10,103 $11,865 $12,730 Feb-01 $9,806 $11,535 $11,570 Mar-01 $9,420 $11,128 $10,838 Apr-01 $9,953 $11,673 $11,679 May-01 $10,107 $11,935 $11,757 Jun-01 $9,824 $11,671 $11,471 Jul-01 $9,783 $11,646 $11,359 Aug-01 $9,249 $11,179 $10,649 Sep-01 $8,553 $10,392 $9,790 Oct-01 $8,738 $10,303 $9,977 Nov-01 $9,222 $10,901 $10,742 Dec-01 $9,295 $11,158 $10,836 Jan-02 $8,821 $11,073 $10,678 Feb-02 $8,769 $11,090 $10,472 Mar-02 $9,341 $11,615 $10,866 Apr-02 $8,794 $11,216 $10,207 May-02 $8,711 $11,273 $10,133 Jun-02 $8,157 $10,625 $9,411 Jul-02 $7,392 $9,637 $8,678 Aug-02 $7,423 $9,711 $8,735 Sep-02 $6,436 $8,631 $7,786 Oct-02 $6,977 $9,270 $8,471 Nov-02 $7,424 $9,854 $8,969 Dec-02 $7,056 $9,427 $8,442 Jan-03 $6,857 $9,199 $8,222 Feb-03 $6,658 $8,953 $8,098 Mar-03 $6,673 $8,968 $8,176 Apr-03 $7,197 $9,757 $8,850 May-03 $7,606 $10,388 $9,315 Jun-03 $7,745 $10,517 $9,435 Jul-03 $7,872 $10,674 $9,601 Aug-03 $7,903 $10,841 $9,788 Sep-03 $7,858 $10,734 $9,684 Oct-03 $8,292 $11,391 $10,231 Nov-03 $8,376 $11,546 $10,321 Dec-03 $8,859 $12,258 $10,862 - -------------------------------------------------------------------------------- Performance shown for the Wells Fargo Variable Trust Equity Value Fund for periods prior to September 20, 1999, reflects performance of the Life and Annuity Trust Equity Value Fund, its predecessor fund. Effective at the close of business September 17, 1999, the Life and Annuity Trust and Norwest Select Funds were reorganized into the Wells Fargo Variable Trust Funds. 2 The S&P 500 Index is an unmanaged index of 500 widely held common stocks representing, among others, industrial, financial, utility and transportation companies listed or traded on national exchanges or over-the-counter markets. You cannot invest directly in an index. 3 The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. You cannot invest directly in an index. 4 The Ten Largest Equity Holdings are calculated based on the market value of the securities divided by total market value of the portfolio. 5 Portfolio holdings and characteristics are subject to change. 6 The chart compares the performance of the Wells Fargo Variable Trust Equity Value Fund for the life of the Fund with the S&P 500 Index and the Russell 1000 Value Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 7 WELLS FARGO VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- GROWTH FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Growth Fund (the Fund) seeks long-term capital appreciation. ADVISER Wells Fargo Funds Management, LLC SUB-ADVISER Wells Capital Management Incorporated FUND MANAGERS Deborah J. Meacock, CFA Stephen M. Kensinger, CFA INCEPTION DATE 04/12/94 PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- The Fund returned 23.59% 1 for the twelve-month period ended December 31, 2003, underperforming its benchmark, the S&P 500 Index 2 (the Index), which returned 28.67%. The Fund distributed no dividend income and no capital gains during the period. The Fund's underperformance during the period relative to its benchmark resulted primarily from the second quarter. The stock market rally that began in March was led by companies with low sales growth, weak earnings and high levels of debt. The low interest rate environment and early signs of economic recovery helped the performance of lower-quality companies that may have struggled in more difficult times. Speculative money flooded into these cheaper and often smaller capitalization stocks, while companies with better fundamentals lagged behind. During this period, the Fund's holdings of relatively higher-quality companies generally underperformed their more speculative counterparts, contributing to the Fund's underperformance relative to the Index. Throughout the second half of the year, however, the Fund's performance relative to its benchmark improved. The two best contributors to Fund performance over the period were both technology stocks: Cisco Systems and Intel. The improved economic environment and cheap capital combined to raise investors' expectations for an increase in technology spending. Both companies cut costs during the technology downturn, allowing the modest improvement in sales to leverage greater profit growth. In anticipation of an economic recovery in the second half of the period, we added to the Fund's holdings in technology, biotechnology, consumer electronics, orthopedics, and industrials. Because of the continued weakness of the dollar, we also added exposure to multi-national companies later in the year. STRATEGIC OUTLOOK - -------------------------------------------------------------------------------- We believe that the market leaders early in 2004 may be strong global industrial, technology and innovative health care companies. Unlike stock performance in 2003, we believe the market may return to higher quality, larger capitalization stocks with strong earnings growth. We will continue to seek to position the Fund to benefit from this trend. We also will monitor potential increases in inflation and subsequent interest rate increases from the Federal Reserve Board. A rising interest rate environment could favor high-quality, stable companies. - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Funds are available for purchase through certain variable annuity contracts and variable life insurance policies offered by the separate accounts of participating insurance companies. The participating insurance companies and their separate accounts are the shareholders or investors in the Fund and the separate accounts of the participating insurance companies place orders to purchase and redeem shares of the Fund based on, among other things, the amount of premium payments to be invested and the amount of surrender and transfer requests to be affected that day. 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. The views expressed are as of December 31, 2003, and are those of the Fund's managers. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally, or the Wells Fargo Variable Trust Growth Fund. 1 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 is available by calling 1-800-222-8222. The Fund's Adviser has committed through April 30, 2004 to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's returns would have been lower. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. Performance shown for the Wells Fargo Variable Trust Growth Fund for periods prior to September 20, 1999, reflects performance of the Life and Annuity Trust Growth Fund, its predecessor fund. Effective at the close of business September 17, 1999, the Life and Annuity Trust and Norwest Select Funds were reorganized into the Wells Fargo Variable Trust Funds. 8 PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2003) - ---------------------------------------------------------------------------------------------------------- 1-Year 5-Year Life of Fund WELLS FARGO VARIABLE TRUST GROWTH FUND 23.59 (5.08) 6.96 - ---------------------------------------------------------------------------------------------------------- BENCHMARK S&P 500 INDEX 2 28.67 (0.57) 11.80 - ---------------------------------------------------------------------------------------------------------- FUND CHARACTERISTICS 4 (AS OF DECEMBER 31, 2003) - ------------------------------------------------------- BETA * 0.92 - ------------------------------------------------------- PRICE TO EARNINGS RATIO (TRAILING 12 MONTHS) 31.8 - ------------------------------------------------------- PRICE TO BOOK RATIO 4.9 - ------------------------------------------------------- MEDIAN MARKET CAP ($B) $32.5 - ------------------------------------------------------- PORTFOLIO TURNOVER 58% - ------------------------------------------------------- NET ASSET VALUE (NAV) $12.89 - ------------------------------------------------------- *A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE BENCHMARK BETA IS 1.00 BY DEFINITION. TEN LARGEST EQUITY HOLDINGS 3,4 (AS OF DECEMBER 31, 2003) - ------------------------------------------------------------ INTEL CORPORATION 3.92% - ------------------------------------------------------------ GENERAL ELECTRIC COMPANY 3.23% - ------------------------------------------------------------ PFIZER INCORPORATED 3.10% - ------------------------------------------------------------ CISCO SYSTEMS INCORPORATED 3.07% - ------------------------------------------------------------ MEDTRONIC INCORPORATED 2.86% - ------------------------------------------------------------ WAL-MART STORES INCORPORATED 2.63% - ------------------------------------------------------------ AMGEN INCORPORATED 2.62% - ------------------------------------------------------------ DELL INCORPORATED 2.58% - ------------------------------------------------------------ WALGREEN COMPANY 2.58% - ------------------------------------------------------------ GOLDMAN SACHS GROUP INCORPORATED 2.52% - ------------------------------------------------------------ SECTOR DISTRIBUTION 4 (AS OF DECEMBER 31, 2003) - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Consumer Discretionary 14% Consumer Staples 12% Energy 3% Financials 9% Health Care 25% Industrials 8% Information Technology 26% Materials 2% Cash 1% GROWTH OF $10,000 INVESTMENT 5 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Wells Fargo Variable Trust Growth S & P 500 Index Apr-94 $10,000 $10,000 Apr-94 $10,100 $10,075 May-94 $10,110 $10,239 Jun-94 $9,888 $9,988 Jul-94 $10,189 $10,316 Aug-94 $10,511 $10,739 Sep-94 $10,422 $10,477 Oct-94 $10,502 $10,712 Nov-94 $10,260 $10,322 Dec-94 $10,447 $10,475 Jan-95 $10,508 $10,746 Feb-95 $10,994 $11,165 Mar-95 $11,237 $11,494 Apr-95 $11,390 $11,832 May-95 $11,930 $12,304 Jun-95 $12,209 $12,590 Jul-95 $12,589 $13,007 Aug-95 $12,794 $13,039 Sep-95 $13,223 $13,589 Oct-95 $12,801 $13,541 Nov-95 $13,325 $14,135 Dec-95 $13,497 $14,407 Jan-96 $13,748 $14,897 Feb-96 $14,260 $15,035 Mar-96 $14,297 $15,180 Apr-96 $14,769 $15,403 May-96 $15,136 $15,799 Jun-96 $14,876 $15,859 Jul-96 $14,108 $15,158 Aug-96 $14,518 $15,478 Sep-96 $15,247 $16,347 Oct-96 $15,659 $16,799 Nov-96 $16,662 $18,067 Dec-96 $16,525 $17,709 Jan-97 $17,473 $18,816 Feb-97 $16,966 $18,963 Mar-97 $16,376 $18,185 Apr-97 $17,036 $19,269 May-97 $18,117 $20,441 Jun-97 $18,506 $21,356 Jul-97 $20,013 $23,054 Aug-97 $18,853 $21,763 Sep-97 $19,606 $22,954 Oct-97 $18,986 $22,187 Nov-97 $19,280 $23,214 Dec-97 $19,389 $23,614 Jan-98 $19,747 $23,873 Feb-98 $20,810 $25,595 Mar-98 $21,809 $26,905 Apr-98 $21,959 $27,179 May-98 $21,624 $26,712 Jun-98 $22,674 $27,797 Jul-98 $22,558 $27,502 Aug-98 $19,418 $23,528 Sep-98 $20,316 $25,036 Oct-98 $21,964 $27,071 Nov-98 $23,437 $28,712 Dec-98 $24,975 $30,366 Jan-99 $25,935 $31,635 Feb-99 $25,063 $30,651 Mar-99 $26,256 $31,877 Apr-99 $27,054 $33,111 May-99 $26,218 $32,329 Jun-99 $27,684 $34,124 Jul-99 $26,886 $33,058 Aug-99 $26,924 $32,895 Sep-99 $26,202 $31,993 Oct-99 $27,737 $34,018 Nov-99 $28,348 $34,709 Dec-99 $30,074 $36,753 Jan-00 $28,738 $34,908 Feb-00 $28,352 $34,248 Mar-00 $30,885 $37,598 Apr-00 $29,762 $36,466 May-00 $28,963 $35,719 Jun-00 $30,024 $36,601 Jul-00 $29,699 $36,030 Aug-00 $31,561 $38,267 Sep-00 $29,747 $36,247 Oct-00 $28,902 $36,095 Nov-00 $25,821 $33,250 Dec-00 $25,985 $33,413 Jan-01 $26,326 $34,599 Feb-01 $23,817 $31,447 Mar-01 $21,881 $29,457 Apr-01 $23,653 $31,743 May-01 $23,735 $31,955 Jun-01 $22,890 $31,179 Jul-01 $22,277 $30,873 Aug-01 $20,472 $28,944 Sep-01 $18,996 $26,608 Oct-01 $19,622 $27,116 Nov-01 $20,919 $29,196 Dec-01 $20,994 $29,453 Jan-02 $20,338 $29,023 Feb-02 $19,682 $28,463 Mar-02 $20,383 $29,533 Apr-02 $19,637 $27,743 May-02 $19,503 $27,541 Jun-02 $18,420 $25,580 Jul-02 $16,331 $23,587 Aug-02 $16,360 $23,740 Sep-02 $15,390 $21,162 Oct-02 $16,271 $23,022 Nov-02 $16,450 $24,376 Dec-02 $15,569 $22,945 Jan-03 $15,301 $22,346 Feb-03 $15,226 $22,011 Mar-03 $15,510 $22,223 Apr-03 $16,316 $24,054 May-03 $16,883 $25,319 Jun-03 $16,898 $25,643 Jul-03 $17,495 $26,094 Aug-03 $17,928 $26,603 Sep-03 $17,450 $26,321 Oct-03 $18,659 $27,808 Nov-03 $18,734 $28,053 Dec-03 $19,241 $29,523 - -------------------------------------------------------------------------------- 2 The S&P 500 Index is an unmanaged index of 500 widely held common stocks representing, among others, industrial, financial, utility and transportation companies listed or traded on national exchanges or over-the-counter markets. You cannot invest directly in an index. 3 The Ten Largest Equity Holdings are calculated based on the market value of the securities divided by total market value of the portfolio. 4 Portfolio holdings and characteristics are subject to change. 5 The chart compares the performance of the Wells Fargo Variable Trust Growth Fund for the life of the Fund with the S&P 500 Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses for the Fund. 9 WELLS FARGO VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- INTERNATIONAL EQUITY FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust International Equity Fund (the Fund) seeks total return, with an emphasis on capital appreciation, over the long-term, by investing in securities of non-U.S. companies. ADVISER Wells Fargo Funds Management, LLC SUB-ADVISER Wells Capital Management Incorporated FUND MANAGERS Josephine Jimenez, CFA Sabrina Yih, CFA INCEPTION DATE 07/03/00 PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- The Fund returned 31.46% 1 for the twelve-month period ended December 31, 2003, underperforming its benchmark, the Morgan Stanley Capital International/Europe, Australasia and Far East (MSCI/EAFE) Index 2, which returned 38.59%. The Fund distributed $0.02 per share in dividend income and no capital gains during the period. International markets posted gains in 2003, responding to falling interest rates, increasing signs of economic recovery, a weakening U.S. dollar and renewed investor interest. More speculative, lower-quality stocks drove the initial rally in the markets. In this environment, the Fund's holdings in high-quality stocks participated in the rally but to a lesser extent, causing the Fund to underperform as compared to its benchmark. However, during the second half of the period, a slight overweight exposure to Japan, especially to Japanese financial companies, contributed to the Fund's performance as the market continued to rally due to increased expectations of economic recovery. Following the end of the combat phase of the war in Iraq, we increased our positions in stocks seeking to benefit from an economic recovery in Europe and Japan. We added to our natural resource stock positions in the first half of the year, as commodity prices increased due to strong demand from China and forecasts of a tight commodity supply for 2004. During the third quarter, we increased our weighting in Japan from underweight to a slight overweight position, following company visits that revealed economic growth trends and fundamental improvement in the banking sector. In general, defensive names were replaced with holdings that appeared to be better positioned towards economic recovery. In the fourth quarter, the majority of new purchases were in European stocks in the luxury goods, industrials and retailing areas. STRATEGIC OUTLOOK - -------------------------------------------------------------------------------- We will remain positioned for global growth, which we expect to be driven by further demand from China, as well as from economic recovery in the U.S., Japan and Europe. Based on these expectations, our focus will be on companies with the potential to benefit from the recovery of consumer spending, a rising interest rate environment, higher capital expenditure spending and exports to high-growth economies. - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Funds are available for purchase through certain variable annuity contracts and variable life insurance policies offered by the separate accounts of participating insurance companies. The participating insurance companies and their separate accounts are the shareholders or investors in the Fund and the separate accounts of the participating insurance companies place orders to purchase and redeem shares of the Fund based on, among other things, the amount of premium payments to be invested and the amount of surrender and transfer requests to be affected that day. 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. The views expressed are as of December 31, 2003, and are those of the Fund's managers. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally, or the Wells Fargo Variable Trust International Equity Fund. Investing in foreign securities presents certain risks that may not be present in domestic securities. For example, investments in foreign and emerging markets present special risks including currency fluctuation, the potential for diplomatic and political instability, regulatory and liquidity risks, foreign taxation and differences in auditing and other financial standards. 1 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 is available by calling 1-800-222-8222. The Fund's Adviser has committed through April 30, 2004 to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's returns would have been lower. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. 10 PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2003) - -------------------------------------------------------------------------------------------- 1-Year Life of Fund WELLS FARGO VARIABLE TRUST INTERNATIONAL EQUITY FUND 31.46 (7.47) - -------------------------------------------------------------------------------------------- BENCHMARK MSCI/EAFE INDEX 2 38.59 (5.55) - -------------------------------------------------------------------------------------------- FUND CHARACTERISTICS 4 (AS OF DECEMBER 31, 2003) - -------------------------------------------------------- PRICE TO EARNINGS RATIO (TRAILING 12 MONTHS) 21.3 - -------------------------------------------------------- PRICE TO BOOK RATIO 2.36 - -------------------------------------------------------- MEDIAN MARKET CAP ($B) $19.77 - -------------------------------------------------------- PORTFOLIO TURNOVER 90% - -------------------------------------------------------- NET ASSET VALUE (NAV) $7.56 - -------------------------------------------------------- TEN LARGEST EQUITY HOLDINGS 3,4 (AS OF DECEMBER 31, 2003) - ------------------------------------------------------------ UFJ HOLDINGS INCORPORATED 3.25% - ------------------------------------------------------------ TOTAL SA ADR 3.21% - ------------------------------------------------------------ HSBC HOLDINGS PLC 2.74% - ------------------------------------------------------------ VODAFONE GROUP PLC ADR 2.55% - ------------------------------------------------------------ NOMURA HOLDINGS INCORPORATED 2.46% - ------------------------------------------------------------ KONINKLIJKE (ROYAL) PHILIPS ELECTRONICS NV NY SHARES 2.32% - ------------------------------------------------------------ NOVARTIS AG ADR 2.07% - ------------------------------------------------------------ GLAXOSMITHKLINE PLC ADR 1.85% - ------------------------------------------------------------ NISSAN MOTOR COMPANY LIMITED 1.83% - ------------------------------------------------------------ NESTLE SA ADR 1.77% - ------------------------------------------------------------ PORTFOLIO COMPOSITION 4 (AS OF DECEMBER 31, 2003) - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Continental Europe 44% United Kingdom 20% Japan 23% Southeast Asia 1% Australia/New Zealand 4% United States 4% Canada 2% Emerging Markets 2% GROWTH OF $10,000 INVESTMENT 5 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Wells Fargo International MSCI Equity EAFE INDEX 7/3/00 $10,000 $10,000 7/31/00 $9,670 $9,581 8/31/00 $9,870 $9,664 9/30/00 $9,280 $9,194 10/31/00 $9,150 $8,977 11/30/00 $8,650 $8,640 12/31/00 $8,967 $8,947 1/31/01 $9,187 $8,942 2/28/01 $8,465 $8,272 3/31/01 $7,914 $7,720 4/30/01 $8,315 $8,256 5/31/01 $8,255 $7,965 6/30/01 $8,024 $7,639 7/31/01 $7,813 $7,500 8/31/01 $7,594 $7,310 9/30/01 $6,882 $6,570 10/31/01 $7,113 $6,738 11/30/01 $7,374 $6,987 12/31/01 $7,524 $7,028 1/31/02 $7,193 $6,655 2/28/02 $7,083 $6,701 3/31/02 $7,424 $7,064 4/30/02 $7,424 $7,111 5/31/02 $7,313 $7,201 6/30/02 $6,996 $6,914 7/31/02 $6,282 $6,232 8/31/02 $6,232 $6,217 9/30/02 $5,508 $5,550 10/31/02 $5,770 $5,848 11/30/02 $6,071 $6,113 12/31/02 $5,800 $5,908 1/31/03 $5,538 $5,661 2/28/03 $5,398 $5,531 3/31/03 $5,297 $5,423 4/30/03 $5,770 $5,954 5/31/03 $6,111 $6,315 6/30/03 $6,192 $6,468 7/31/03 $6,273 $6,624 8/31/03 $6,444 $6,783 9/30/03 $6,585 $6,992 10/31/03 $6,989 $7,428 11/30/03 $7,150 $7,593 12/31/03 $7,624 $8,186 - -------------------------------------------------------------------------------- 2 The Morgan Stanley Capital International/Europe, Australasia and Far East Index (MSCI/EAFE) is an unmanaged group of securities widely regarded by investors to be representations of the stock markets of Europe, Australasia and the Far East. You cannot invest directly in an index. 3 The Ten Largest Equity Holdings are calculated based on the market value of the securities divided by total market value of the portfolio. 4 Portfolio holdings and characteristics are subject to change. 5 The chart compares the performance of the Wells Fargo Variable Trust International Equity Fund for the life of the Fund with the MSCI/EAFE Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 11 WELLS FARGO VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- LARGE COMPANY GROWTH FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Large Company Growth Fund (the Fund) seeks long-term capital appreciation. ADVISER Wells Fargo Funds Management, LLC SUB-ADVISER Peregrine Capital Management Inc. FUND MANAGERS John S. Dale, CFA Gary E. Nussbaum, CFA INCEPTION DATE 09/20/99 PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- The Fund returned 26.28% 1 for the twelve-month period ended December 31, 2003, underperforming the S&P 500 Index 2, which returned 28.67%. The Fund distributed no dividend income and no capital gains during the period. During the period, those investors willing and able to accept greater risk were generally rewarded with greater returns, as stocks outperformed bonds, high yield bonds outperformed U.S. Treasuries and small cap stocks outperformed large cap stocks. As economic conditions improved, large-cap value stocks actually inched ahead of large-cap growth stocks for the year. In the context of the huge drop in corporate earnings during the previous three years, the dramatic 2003 earnings rebound for many U.S. companies helped propel economically sensitive, value-oriented stocks. The Fund's more volatile and economically sensitive holdings performed the best, while the Fund's less volatile, less economically sensitive holdings performed the worst. The Fund's portfolio leaders, such as Intel, eBay, Veritas, Cisco Systems, Goldman Sachs, Fastenal, and Paychex, all benefited substantially from potential economic improvement and improving market conditions. Veritas, Intel, and eBay, in particular, each gained more than 80% for the year. On the other hand, major Fund holdings such as Medtronic, Microsoft, Wal-Mart, American International Group, and Cardinal Health were up negligibly for the year, as investors largely ignored them despite their high quality earnings growth and attractive relative valuations. STRATEGIC OUTLOOK - -------------------------------------------------------------------------------- We enter 2004 again witnessing many of the most attractive relative valuations we have seen in years. The most attractively valued stocks in the marketplace, including high quality names such as AIG and Microsoft, are selling at or below market Price/Earnings multiples despite earnings and cash flow potential at least twice that of the average U.S. company. We believe that the majority of the Fund's holdings may perform well in 2004. - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Funds are available for purchase through certain variable annuity contracts and variable life insurance policies offered by the separate accounts of participating insurance companies. The participating insurance companies and their separate accounts are the shareholders or investors in the Fund and the separate accounts of the participating insurance companies place orders to purchase and redeem shares of the Fund based on, among other things, the amount of premium payments to be invested and the amount of surrender and transfer requests to be affected that day. 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. The views expressed are as of December 31, 2003, and are those of the Fund's managers. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally, or the Wells Fargo Variable Trust Large Company Growth Fund. 1 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 is available by calling 1-800-222-8222. The Fund's Adviser has committed through April 30, 2004 to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's returns would have been lower. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. 2 The S&P 500 Index is an unmanaged index of 500 widely-held common stocks representing, among others, industrial, financial, utility and transportation companies listed or traded on national exchanges or over-the-counter markets. You cannot invest directly in an index. 12 PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2003) - --------------------------------------------------------------------------------------------- 1-Year Life of Fund WELLS FARGO VARIABLE TRUST LARGE COMPANY GROWTH FUND 26.28 (3.45) - --------------------------------------------------------------------------------------------- BENCHMARK S&P 500 INDEX 2 28.67 (1.88) - --------------------------------------------------------------------------------------------- FUND CHARACTERISTICS 4 (AS OF DECEMBER 31, 2003) - ------------------------------------------------------ PRICE TO EARNINGS RATIO (TRAILING 12 MONTHS) 26 - ------------------------------------------------------ PRICE TO BOOK RATIO 4.6 - ------------------------------------------------------ MEDIAN MARKET CAP ($B) $28.0 - ------------------------------------------------------ PORTFOLIO TURNOVER 10% - ------------------------------------------------------ NET ASSET VALUE (NAV) $8.60 - ------------------------------------------------------ TEN LARGEST EQUITY HOLDINGS 3,4 (AS OF DECEMBER 31, 2003) - -------------------------------------------------------------------- INTEL CORPORATION 6.73% - -------------------------------------------------------------------- EBAY INCORPORATED 6.20% - -------------------------------------------------------------------- GOLDMAN SACHS GROUP INCORPORATED 6.09% - -------------------------------------------------------------------- MICROSOFT CORPORATION 6.04% - -------------------------------------------------------------------- MEDTRONIC INCORPORATED 5.96% - -------------------------------------------------------------------- CISCO SYSTEMS INCORPORATED 5.23% - -------------------------------------------------------------------- FIRST DATA CORPORATION 5.01% - -------------------------------------------------------------------- AMERICAN INTERNATIONAL GROUP INCORPORATED 4.83% - -------------------------------------------------------------------- PFIZER INCORPORATED 4.63% - -------------------------------------------------------------------- AMGEN INCORPORATED 4.09% - -------------------------------------------------------------------- SECTOR DISTRIBUTION 4 (AS OF DECEMBER 31, 2003) - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Consumer Discretionary 17% Consumer Staples 2% Financials 16% Health Care 17% Industrials 19% Information Technology 27% Cash 2% GROWTH OF $10,000 INVESTMENT 5 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Wells Fargo Variable Trust Large Company Growth S&P 500 Index Sep-99 $10,000 $10,000 Sep-99 $9,590 $9,605 Oct-99 $10,420 $10,213 Nov-99 $10,830 $10,420 Dec-99 $12,030 $11,034 Jan-00 $11,800 $10,480 Feb-00 $12,000 $10,282 Mar-00 $13,430 $11,288 Apr-00 $13,020 $10,948 May-00 $12,200 $10,723 Jun-00 $13,130 $10,988 Jul-00 $13,230 $10,817 Aug-00 $14,000 $11,489 Sep-00 $13,150 $10,882 Oct-00 $13,130 $10,836 Nov-00 $12,080 $9,982 Dec-00 $11,960 $10,031 Jan-01 $12,150 $10,387 Feb-01 $10,320 $9,441 Mar-01 $9,260 $8,844 Apr-01 $10,240 $9,530 May-01 $10,150 $9,594 Jun-01 $9,880 $9,361 Jul-01 $9,700 $9,269 Aug-01 $8,843 $8,690 Sep-01 $8,003 $7,988 Oct-01 $8,373 $8,141 Nov-01 $9,353 $8,765 Dec-01 $9,463 $8,842 Jan-02 $9,403 $8,713 Feb-02 $8,783 $8,545 Mar-02 $9,193 $8,866 Apr-02 $8,483 $8,329 May-02 $8,223 $8,268 Jun-02 $7,673 $7,680 Jul-02 $6,932 $7,081 Aug-02 $7,012 $7,127 Sep-02 $6,242 $6,353 Oct-02 $6,962 $6,912 Nov-02 $7,422 $7,318 Dec-02 $6,812 $6,889 Jan-03 $6,572 $6,709 Feb-03 $6,532 $6,608 Mar-03 $6,622 $6,672 Apr-03 $7,192 $7,221 May-03 $7,523 $7,601 Jun-03 $7,613 $7,699 Jul-03 $7,993 $7,834 Aug-03 $8,123 $7,987 Sep-03 $7,923 $7,902 Oct-03 $8,383 $8,349 Nov-03 $8,353 $8,422 Dec-03 $8,603 $8,863 - -------------------------------------------------------------------------------- 3 The Ten Largest Equity Holdings are calculated based on the market value of the securities divided by total market value of the portfolio. 4 Portfolio holdings and characteristics are subject to change. 5 The chart compares the performance of the Wells Fargo Variable Trust Large Company Growth Fund for the life of the Fund with the S&P 500 Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 13 WELLS FARGO VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- MONEY MARKET FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Money Market Fund (the Fund) seeks high current income, while preserving capital and liquidity. ADVISER Wells Fargo Funds Management, LLC SUB-ADVISER Wells Capital Management Incorporated FUND MANAGERS Dave Sylvester Laurie White INCEPTION DATE 05/19/94 PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- The Fund returned 0.50% 1 for the twelve-month period ended December 31, 2003, outperforming the iMoneyNet First Tier Retail Money Fund Average 2 which returned 0.49% over the same period. The Fund distributed $0.01 per share in dividend income and no capital gains during the period. Following three quarters of sporadic economic growth, the long-awaited economic recovery appeared to be on track by the fourth quarter. Evidence of this could be seen in better-than-expected earnings reports, surging retail sales and the re-emergence of job growth. Interest rates were volatile throughout the period, as markets reacted to comments from the Federal Reserve Board (the Fed) and changing views on the outlook for economic growth. In spite of the interim volatility, the one year London Interbank Offered Rate (LIBOR) stood at 1.45% at the end of the period, which was exactly where it was at the beginning of the period. The Fund's performance during the period benefited from several factors. First, we kept the average maturity of the Fund's holdings reined in until the short-term yield curve steepened in the second half of the period. Second, we began using extendible notes, which offer holders the option to extend the note's maturity, should the terms remain favorable. And third, we increased the Fund's exposure to floating rate securities, as relatively low-priced bonds became available at the same time expectations increased for higher short-term interest rates. However, the Fund remained broadly diversified, with no more than 3% of net assets invested in any one issuer. Credit quality actually improved, and we were able to avoid any bad credit or structure exposure in spite of the fragility of the credit environment. STRATEGIC OUTLOOK - -------------------------------------------------------------------------------- One of the biggest challenges facing money market funds in 2003 was the overall decline of invested assets. We believe that this may continue into 2004, as it could still be some time before the Fed actually starts to raise interest rates. We have structured the Fund's portfolio to allow for a more even distribution of maturities across the yield curve, a strategy that we believe may work well for the Fund in an environment of rising interest rates and declining assets. - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Funds are available for purchase through certain variable annuity contracts and variable life insurance policies offered by the separate accounts of participating insurance companies. The participating insurance companies and their separate accounts are the shareholders or investors in the Fund and the separate accounts of the participating insurance companies place orders to purchase and redeem shares of the Fund based on, among other things, the amount of premium payments to be invested and the amount of surrender and transfer requests to be affected that day. 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. The views expressed are as of December 31, 2003, and are those of the Fund's managers. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally, or the Wells Fargo Variable Trust Money Market Fund. An investment in the Wells Fargo Variable Trust Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. 1 FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. Investment return will fluctuate. The Fund's yield figures more closely reflect the current earnings of the Fund than the total return figures. Current performance is available by calling 1-800-222-8222. The Fund's Adviser has committed through April 30, 2004 to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's 7-day current yield would have been 0.24%. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. 14 PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2003) - ----------------------------------------------------------------------------------------------------------- 1-Year 5-Year Life of Fund WELLS FARGO VARIABLE TRUST MONEY MARKETFUND 0.50 3.12 3.97 - ----------------------------------------------------------------------------------------------------------- BENCHMARK IMONEYNET FIRST TIER RETAIL MONEY FUND AVERAGE 2 0.49 3.33 4.84 - ----------------------------------------------------------------------------------------------------------- FUND YIELD SUMMARY (AS OF DECEMBER 31, 2003) - --------------------------------------------------- 7-DAY CURRENT YIELD 0.39% - --------------------------------------------------- 7-DAY EFFECTIVE YIELD 0.39% - --------------------------------------------------- 30-DAY SIMPLE YIELD 0.39% - --------------------------------------------------- 30-DAY EFFECTIVE YIELD 0.39% FUND CHARACTERISTICS 3 (AS OF DECEMBER 31, 2003) - --------------------------------------------------- WEIGHTED AVERAGE MATURITY 51 days - --------------------------------------------------- PORTFOLIO ALLOCATION 3 (AS OF DECEMBER 31, 2003) - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Corporate Bonds 1% Variable and Floating Rate Notes 22% Federal Agencies 1% Commercial Paper 48% Certificates of Deposit 4% Time Deposit 2% Repurchase Agreements 22% MATURITY DISTRIBUTION 3 (AS OF DECEMBER 31, 2003) - --------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: 2-14 Days 28% 15-29 Days 19% 30-59 Days 23% 60-89 Days 12% 90-179 Days 16% 180 + Days 2% - -------------------------------------------------------------------------------- Performance shown for the Wells Fargo Variable Trust Money Market Fund for periods prior to September 20, 1999, reflects performance of the Life and Annuity Trust Money Market Fund, its predecessor fund. Effective at the close of business September 17, 1999, the Life and Annuity Trust and Norwest Select Funds were reorganized into the Wells Fargo Variable Trust Funds. 2 The iMoneyNet First Tier Retail Money Fund Average is an average of non-government retail funds that do not hold any second tier securities. Portfolio holdings of first tier funds include U.S. Treasury securities, U.S. other securities, repos, time deposits, domestic bank obligations, foreign bank obligations, first tier commercial paper, floating rate notes and asset-backed commercial paper. 3 Portfolio holdings and characteristics are subject to change. 15 WELLS FARGO VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- SMALL CAP GROWTH FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Small Cap Growth Fund (the Fund) seeks long-term capital appreciation. ADVISER Wells Fargo Funds Management, LLC SUB-ADVISER Wells Capital Management Incorporated FUND MANAGERS Jerome "Cam" Philpott, CFA Stuart Roberts INCEPTION DATE 05/01/95 PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- The Fund returned 42.27% 1 for the twelve-month period ended December 31, 2003, underperforming its benchmark, the Russell 2000 Index 2, which returned 47.25%. The Fund distributed no dividend income and no capital gains during the period. Stocks generally delivered positive performance in 2003, a welcome relief from the previous three years. At the beginning of the period, investors were concerned about a pending war in Iraq, international terrorism, and economic weakness. As the international situation improved and domestic fundamentals proved better than expected, equity prices responded and rose sharply. Earnings were clearly better than anticipated, and valuations expanded as sentiment improved. Within the Fund's portfolio, positive performers included financial, technology, and telecommunications stocks. Knight Trading Group, an on-line broker, posted strong results driven by an increase in trading activity combined with market share gains in the institutional business. The Funds' technology holdings, including Integrated Devices, which designs and manufactures a broad array of semiconductors, also contributed to Fund performance. Nextel Partners, which offers Nextel service in small and mid-size markets, was another strong performer for the Fund. The Fund's weakest contributors were its holdings in transportation stocks, whose absolute returns lagged behind other holdings in the portfolio and the benchmark. Other disappointments included Hollywood Entertainment, a video rental company, and Leapfrog Entertainment, a leading manufacturer of educational toys, both of which were sold by the Fund following disappointing third quarter results. STRATEGIC OUTLOOK - -------------------------------------------------------------------------------- We are optimistic about 2004 because we believe that consensus expectations for stocks are somewhat muted given the combination of valuations and anticipated interest rate hikes. Although valuations are higher than they were, we believe that valuations are reasonable. We expect future stock performance to be a function of earnings strength rather than multiple expansion, and we continue to believe that the Fund's holdings may benefit the Fund's long-term performance. - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Funds are available for purchase through certain variable annuity contracts and variable life insurance policies offered by the separate accounts of participating insurance companies. The participating insurance companies and their separate accounts are the shareholders or investors in the Fund and the separate accounts of the participating insurance companies place orders to purchase and redeem shares of the Fund based on, among other things, the amount of premium payments to be invested and the amount of surrender and transfer requests to be affected that day. 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. The views expressed are as of December 31, 2003, and are those of the Fund's managers. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally, or the Wells Fargo Variable Trust Small Cap Growth Fund. There are additional risks associated with investments in smaller and/or newer companies because their shares tend to be less liquid than securities of larger companies. Further, shares of small and new companies are generally more sensitive to purchase and sale transactions and changes in the issuer's financial condition and, therefore, the prices of such stocks may be more volatile than those of larger company stocks. 1 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 is available by calling 1-800-222-8222. The Fund's Adviser has committed through April 30, 2004 to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's returns would have been lower. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. 16 PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2003) - ---------------------------------------------------------------------------------------------------------- 1-Year 5-Year Life of Fund WELLS FARGO VARIABLE TRUST SMALL CAP GROWTH FUND 42.27 (3.07) 2.37 - ---------------------------------------------------------------------------------------------------------- BENCHMARK RUSSELL 2000 INDEX 2 47.25 7.13 10.39 - ---------------------------------------------------------------------------------------------------------- FUND CHARACTERISTICS 4 (AS OF DECEMBER 31, 2003) - -------------------------------------------------------------------- BETA * 1.40 - -------------------------------------------------------------------- PRICE TO EARNINGS RATIO (TRAILING 12 MONTHS) 30.3 - -------------------------------------------------------------------- PRICE TO BOOK RATIO 3.2 - -------------------------------------------------------------------- MEDIAN MARKET CAP ($B) $1.2 - -------------------------------------------------------------------- PORTFOLIO TURNOVER 191% - -------------------------------------------------------------------- NET ASSET VALUE (NAV) $6.90 - -------------------------------------------------------------------- *A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENT. THE BENCHMARK BETA IS 1.00 BY DEFINITION. TEN LARGEST EQUITY HOLDINGS 3,4 (AS OF DECEMBER 31, 2003) - ---------------------------------------------------------------- MARVEL ENTERPRISES INCORPORATED 3.09% - ---------------------------------------------------------------- ALLIANCE DATA SYSTEMS CORPORATION 2.88% - ---------------------------------------------------------------- KROLL INCORPORATED 2.52% - ---------------------------------------------------------------- GTECH HOLDINGS CORPORATION 2.10% - ---------------------------------------------------------------- PERKINELMER INCORPORATED 2.09% - ---------------------------------------------------------------- MACROVISION CORPORATION 2.07% - ---------------------------------------------------------------- RADIO ONE INCORPORATED 2.06% - ---------------------------------------------------------------- UNITED ONLINE INCORPORATED 1.78% - ---------------------------------------------------------------- MESA AIR GROUP INCORPORATED 1.78% - ---------------------------------------------------------------- ANDRX CORPORATION 1.71% SECTOR DISTRIBUTION 4 (AS OF DECEMBER 31, 2003) - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Consumer Discretionary 19% Energy 2% Financials 7% Health Care 16% Industrials 15% Information Technology 30% Materials 1% Telecommunications Services 3% Cash 7% GROWTH OF $10,000 INVESTMENT 5 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Wells Fargo Variable Trust Russell Small Cap Growth 2000 Index Apr-95 $10,000 $10,000 May-95 $10,040 $10,172 Jun-95 $10,670 $10,700 Jul-95 $11,740 $11,316 Aug-95 $11,970 $11,550 Sep-95 $11,920 $11,757 Oct-95 $11,280 $11,232 Nov-95 $11,590 $11,703 Dec-95 $11,595 $12,012 Jan-96 $11,636 $11,999 Feb-96 $11,957 $12,374 Mar-96 $12,484 $12,626 Apr-96 $13,891 $13,301 May-96 $14,419 $13,826 Jun-96 $13,405 $13,257 Jul-96 $12,112 $12,100 Aug-96 $13,177 $12,803 Sep-96 $13,819 $13,304 Oct-96 $14,088 $13,099 Nov-96 $14,750 $13,638 Dec-96 $15,243 $13,996 Jan-97 $15,571 $14,276 Feb-97 $14,690 $13,930 Mar-97 $13,482 $13,273 Apr-97 $13,087 $13,310 May-97 $15,729 $14,791 Jun-97 $16,011 $15,426 Jul-97 $17,039 $16,143 Aug-97 $17,468 $16,513 Sep-97 $18,778 $17,721 Oct-97 $17,569 $16,943 Nov-97 $16,824 $16,833 Dec-97 $16,735 $17,128 Jan-98 $16,341 $16,857 Feb-98 $17,889 $18,103 Mar-98 $18,387 $18,849 Apr-98 $18,427 $18,953 May-98 $17,089 $17,931 Jun-98 $17,233 $17,969 Jul-98 $15,397 $16,513 Aug-98 $11,817 $13,306 Sep-98 $12,420 $14,348 Oct-98 $12,944 $14,934 Nov-98 $13,705 $15,716 Dec-98 $14,312 $16,689 Jan-99 $13,865 $16,911 Feb-99 $12,563 $15,541 Mar-99 $12,287 $15,784 Apr-99 $12,984 $17,198 May-99 $12,958 $17,449 Jun-99 $13,628 $18,238 Jul-99 $13,615 $17,738 Aug-99 $13,707 $17,082 Sep-99 $14,234 $17,085 Oct-99 $16,325 $17,155 Nov-99 $19,061 $18,179 Dec-99 $23,797 $20,237 Jan-00 $24,323 $19,911 Feb-00 $30,309 $23,199 Mar-00 $26,402 $21,670 Apr-00 $23,179 $20,365 May-00 $20,719 $19,178 Jun-00 $25,731 $20,850 Jul-00 $24,192 $20,179 Aug-00 $27,369 $21,719 Sep-00 $26,762 $21,080 Oct-00 $23,047 $20,140 Nov-00 $17,224 $18,072 Dec-00 $18,424 $19,624 Jan-01 $18,637 $20,646 Feb-01 $14,803 $19,292 Mar-01 $12,655 $18,348 Apr-01 $14,732 $19,783 May-01 $14,750 $20,270 Jun-01 $15,105 $20,969 Jul-01 $14,164 $19,835 Aug-01 $13,046 $19,194 Sep-01 $10,774 $16,611 Oct-01 $12,034 $17,582 Nov-01 $12,957 $18,943 Dec-01 $13,933 $20,112 Jan-02 $13,241 $19,903 Feb-02 $12,069 $19,358 Mar-02 $13,099 $20,914 Apr-02 $12,495 $21,104 May-02 $11,750 $20,167 Jun-02 $10,738 $19,167 Jul-02 $8,715 $16,273 Aug-02 $8,679 $16,232 Sep-02 $7,969 $15,067 Oct-02 $8,591 $15,550 Nov-02 $9,230 $16,937 Dec-02 $8,608 $15,994 Jan-03 $8,253 $15,551 Feb-03 $8,094 $15,081 Mar-03 $8,129 $15,276 Apr-03 $8,963 $16,724 May-03 $9,709 $18,518 Jun-03 $10,064 $18,854 Jul-03 $10,543 $20,034 Aug-03 $11,040 $20,951 Sep-03 $10,703 $20,564 Oct-03 $11,768 $22,291 Nov-03 $12,140 $23,082 Dec-03 $12,247 $23,551 - -------------------------------------------------------------------------------- Performance shown for the Wells Fargo Variable Trust Small Cap Growth Fund for periods prior to September 20, 1999, reflects performance of the Norwest Select Small Company Stock Fund (the accounting survivor of a merger of the Life and Annuity Trust Strategic Growth Fund and the Norwest Select Small Company Stock Fund), its predecessor fund. Effective at the close of business September 17, 1999, the Life and Annuity Trust and Norwest Select Funds were reorganized into the Wells Fargo Variable Trust Funds. 2 The Russell 2000 Index is an index subset of the Russell 3000 Index and includes the 2,000 smallest stocks representing approximately 8% of the U.S. equity market. You cannot invest directly in an index. 3 The Ten Largest Equity Holdings are calculated based on the market value of the securities divided by total market value of the portfolio. 4 Portfolio holdings and characteristics are subject to change. 5 The chart compares the performance of the Wells Fargo Variable Trust Small Cap Growth Fund for the life of the Fund with the Russell 2000 Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 17 WELLS FARGO VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- TOTAL RETURN BOND FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Total Return Bond Fund (the Fund) seeks total return consisting of income and capital appreciation. ADVISER Wells Fargo Funds Management, LLC SUB-ADVISER Wells Capital Management Incorporated FUND MANAGERS William Stevens Marie Chandoha INCEPTION DATE 09/20/99 PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- The Fund returned 8.40% 1 for the twelve-period ended December 31, 2003, outperforming its benchmarks, the Lehman Brothers Aggregate Bond Index 2, which returned 4.10% and the Lehman Brothers U.S. Credit Index 3, which returned 7.70%. The Fund distributed $0.45 per share in dividend income and $0.13 in capital gains during the period. On May 1, 2003, the Fund's investment objective was changed along with its name. The investment style was expanded from investments primarily in corporate debt securities, including high yield bonds, to a broad range of investment-grade bond offerings, including corporate bonds, U.S. Government obligations and mortgage- and other asset-backed securities. These changes were made in an effort to provide investors with exposure to higher quality investments while seeking lower risk and a broader exposure to the bond market. The Fund's performance reflects results from the period both prior to and after the change in investment objective. As the reporting period opened, much of the discussion surrounding the economy related to whether the recovery would continue and how strong it would be. With inflationary pressures so low, the Federal Reserve Board (the Fed) held down interest rates throughout the year, waiting to make sure the economy did indeed gain traction. The bond market's strong performance early in the period, particularly in the corporate sector, contributed to the Fund's positive overall performance. Another contributor was the Fund's overweight position in lower-quality corporate bonds during the first half of the period. In the latter part of the period, security selection was the primary driver of the Fund's performance, contributing to the Fund's high turnover. The Fund's change in investment objective in May also impacted turnover. Our security selection decisions were small and frequent. Relative value trades in the automobile sector continued to contribute to performance as relative valuation levels among the "Big Three" automakers continued to create opportunities. Our holdings in telecommunications issues (notably an overweight to wireless), cable media, and names like Sears and Halliburton also contributed to the Fund's performance. In mortgages, security selection within sectors in the agency pass-through market (such as balloons, 10-year and 20-year mortgages) contributed positively to Fund performance. Yield curve positioning and our underweight position in mortgages detracted from performance in the final three months of the period. In addition, our holdings of short collateralized mortgage obligations underperformed the overall mortgage market, particularly toward year end. Our underweight position in the utility sector detracted from performance, as this sector continued to perform well. STRATEGIC OUTLOOK - -------------------------------------------------------------------------------- Foreign demand for bonds, bank buying (low loan demand), and zero inflation have kept interest rates low. We anticipate that the Fed will eventually raise short-term interest rates, and with the actual gross domestic product (GDP) closing the gap on potential GDP and unemployment rates falling, we think that time will come in 2004. We believe that even a relatively small increase in interest rates could create opportunities that could make 2004 profitable in ways that could set the stage for continuing improvement into 2005. - -------------------------------------------------------------------------------- The Wells Fargo Variable Trust Funds are available for purchase through certain variable annuity contracts and variable life insurance policies offered by the separate accounts of participating insurance companies. The participating insurance companies and their separate accounts are the shareholders or investors in the Fund and the separate accounts of the participating insurance companies place orders to purchase and redeem shares of the Fund based on, among other things, the amount of premium payments to be invested and the amount of surrender and transfer requests to be affected that day. 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. The Fund's investment process may, at times, result in a higher than average portfolio turnover ratio and increased trading expenses, and may generate higher short-term capital gains. Investing in foreign debt obligations entails additional risks, including those related to regulatory, market or economic developments, foreign taxation and less stringent investor protection and disclosure standards. 18 PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2003) - ---------------------------------------------------------------------------------------------- 1-Year Life of Fund WELLS FARGO VARIABLE TRUST TOTAL RETURN BOND FUND 8.40 7.81 - ---------------------------------------------------------------------------------------------- BENCHMARKS LEHMAN BROTHERS AGGREGATE BOND INDEX 2 4.10 8.03 - ---------------------------------------------------------------------------------------------- LEHMAN BROTHERS U.S. CREDIT INDEX 3 7.70 8.92 FUND CHARACTERISTICS 4 (AS OF DECEMBER 31, 2003) - --------------------------------------------------- AVERAGE CREDIT QUALITY 5 AAA - --------------------------------------------------- WEIGHTED AVERAGE COUPON 6.01% - --------------------------------------------------- WEIGHTED AVERAGE MATURITY 8.79 years - --------------------------------------------------- DURATION 4.46 years - --------------------------------------------------- PORTFOLIO TURNOVER 619% - --------------------------------------------------- DISTRIBUTION RATE 6 3.36% - --------------------------------------------------- SEC YIELD 7 3.20% - --------------------------------------------------- NAV $10.66 - --------------------------------------------------- PORTFOLIO ALLOCATION 4 (AS OF DECEMBER 31, 2003) - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Asset Backed Securities 6% Corporate Bonds 21% Agency Backed Mortgages 51% US Treasury Bonds 11% US Treasury Notes 3% Repurchase Agreements 7% Collateralized Mortgage Obligations 1% GROWTH OF $10,000 INVESTMENT 8 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Wells Fargo Variable Trust Lehman Brothers Lehman Brothers Total U.S. Credit U.S. Aggregate Return Bond Index Bond Index Sep-99 $10,000 $10,000 $10,000 Sep-99 $10,005 $10,034 $10,028 Oct-99 $10,060 $10,080 $10,065 Nov-99 $10,030 $10,091 $10,064 Dec-99 $9,984 $10,038 $10,016 Jan-00 $9,958 $10,002 $9,983 Feb-00 $10,082 $10,095 $10,104 Mar-00 $10,252 $10,181 $10,237 Apr-00 $10,059 $10,091 $10,208 May-00 $10,011 $10,054 $10,203 Jun-00 $10,244 $10,306 $10,415 Jul-00 $10,342 $10,431 $10,510 Aug-00 $10,515 $10,567 $10,662 Sep-00 $10,539 $10,623 $10,730 Oct-00 $10,587 $10,633 $10,800 Nov-00 $10,729 $10,771 $10,978 Dec-00 $11,004 $10,980 $11,182 Jan-01 $11,202 $11,281 $11,365 Feb-01 $11,343 $11,379 $11,464 Mar-01 $11,369 $11,450 $11,521 Apr-01 $11,274 $11,409 $11,473 May-01 $11,346 $11,514 $11,542 Jun-01 $11,350 $11,572 $11,586 Jul-01 $11,647 $11,875 $11,845 Aug-01 $11,787 $12,034 $11,981 Sep-01 $11,687 $12,016 $12,122 Oct-01 $11,987 $12,314 $12,375 Nov-01 $11,932 $12,206 $12,204 Dec-01 $11,820 $12,122 $12,126 Jan-02 $11,881 $12,225 $12,224 Feb-02 $11,948 $12,318 $12,343 Mar-02 $11,819 $12,090 $12,138 Apr-02 $12,021 $12,258 $12,373 May-02 $12,132 $12,420 $12,479 Jun-02 $12,085 $12,440 $12,586 Jul-02 $12,006 $12,434 $12,738 Aug-02 $12,247 $12,756 $12,953 Sep-02 $12,413 $12,998 $13,163 Oct-02 $12,291 $12,847 $13,103 Nov-02 $12,455 $13,014 $13,099 Dec-02 $12,735 $13,398 $13,370 Jan-03 $12,780 $13,441 $13,381 Feb-03 $13,009 $13,710 $13,566 Mar-03 $13,081 $13,720 $13,555 Apr-03 $13,388 $13,973 $13,667 May-03 $13,709 $14,414 $13,921 Jun-03 $13,720 $14,378 $13,893 Jul-03 $13,270 $13,765 $13,427 Aug-03 $13,397 $13,872 $13,515 Sep-03 $13,775 $14,357 $13,873 Oct-03 $13,642 $14,203 $13,744 Nov-03 $13,663 $14,268 $13,777 Dec-03 $13,805 $14,427 $13,918 - -------------------------------------------------------------------------------- The views expressed are as of December 31, 2003, and are those of the Fund's managers. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally, or the Wells Fargo Variable Trust Total Return Bond Fund. 1 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 is available by calling 1-800-222-8222. The Fund's Adviser has committed through April 30, 2004 to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's returns would have been lower. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. 2 The Lehman Brothers Aggregate Bond Index is composed of the Lehman Brothers Government/Corporate Index and the Mortgage-Backed Securities Index and includes Treasury issues, agency issues, corporate bond issues and mortgage-backed securities. You cannot invest directly in an Index. The Fund changed its benchmark to the Lehman Brothers Aggregate Bond Index because it is more representative of the breadth of the Fund's holdings. 3 The Lehman Brothers U.S. Credit Index is an unmanaged index composed of publicly issued U.S. corporate and specified foreign debentures and secured notes that meet the specified maturity, liquidity, and quality requirements. To qualify, bonds must be SEC-registered. You cannot invest directly in an index. 4 Portfolio holdings and characteristics are subject to change. 5 The average credit quality is compiled from the ratings of Standard & Poor's and/or Moody's Investors Service (together "rating agencies"). Standard & Poor's is a trademark of McGraw-Hill, Inc., and has been licensed. The Fund is not sponsored, sold or promoted by these rating agencies and these rating agencies make no representation regarding the advisability of investing in the Fund. 6 The distribution rate is based on the actual distributions made by the Fund. The distribution rate is calculated by annualizing the Fund's most recent income dividend and dividing that figure by the applicable current public offering price. 7 SEC yields include the actual amount of interest earned adjusted by any gain or loss realized due to the return of principal, less expenses and the maximum offering price calculated on a 30-day month-end basis. 8 The chart compares the performance of the Wells Fargo Variable Trust Total Return Bond Fund for the life of the Fund with the Lehman Brothers U.S. Credit Index and Lehman Brothers Aggregate Bond Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 19 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCK - 52.49% AMUSEMENT & RECREATION SERVICES - 0.09% 1,638 HARRAH'S ENTERTAINMENT INCORPORATED $ 81,524 5,136 INTERNATIONAL GAME TECHNOLOGY 183,355 264,879 ------------ APPAREL & ACCESSORY STORES - 0.26% 13,290 GAP INCORPORATED 308,461 5,044 KOHLS CORPORATION + 226,677 7,665 LIMITED BRANDS 138,200 2,038 NORDSTROM INCORPORATED 69,904 743,242 ------------ APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS - 0.07% 1,874 JONES APPAREL GROUP INCORPORATED 66,021 1,618 LIZ CLAIBORNE INCORPORATED 57,374 1,603 VF CORPORATION 69,314 192,709 ------------ AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS - 0.06% 4,080 AUTONATION INCORPORATED + 74,950 1,316 AUTOZONE INCORPORATED + 112,136 187,086 ------------ AUTOMOTIVE REPAIR, SERVICES & PARKING - 0.01% 951 RYDER SYSTEM INCORPORATED 32,477 ------------ BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS - 0.08% 922 CENTEX CORPORATION 99,253 687 KB HOME 49,821 920 PULTE HOMES INCORPORATED 86,131 235,205 ------------ BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS - 0.66% 33,754 HOME DEPOT INCORPORATED 1,197,929 11,666 LOWE'S COMPANIES INCORPORATED 646,180 2,162 SHERWIN-WILLIAMS COMPANY 75,108 1,919,217 ------------ BUSINESS SERVICES - 3.76% 3,471 ADOBE SYSTEMS INCORPORATED 136,410 1,655 AUTODESK INCORPORATED 40,680 8,818 AUTOMATIC DATA PROCESSING INCORPORATED 349,281 3,356 BMC SOFTWARE INCORPORATED + 62,589 15,031 CENDANT CORPORATION + 334,740 2,434 CITRIX SYSTEMS INCORPORATED + 51,625 8,591 COMPUTER ASSOCIATES INTERNATIONAL INCORPORATED 234,878 2,778 COMPUTER SCIENCES CORPORATION + 122,871 20 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE BUSINESS SERVICES (continued) 5,698 COMPUWARE CORPORATION + $ 34,416 6,900 CONCORD EFS INCORPORATED + 102,396 2,122 CONVERGYS CORPORATION + 37,050 749 DELUXE CORPORATION 30,956 9,583 EBAY INCORPORATED + 618,966 4,419 ELECTRONIC ARTS INCORPORATED + 211,140 7,126 ELECTRONIC DATA SYSTEMS CORPORATION 174,872 2,063 EQUIFAX INCORPORATED 50,543 10,812 FIRST DATA CORPORATION 444,265 2,875 FISERV INCORPORATED + 113,591 3,552 IMS HEALTH INCORPORATED 88,303 6,151 INTERPUBLIC GROUP OF COMPANIES INCORPORATED + 95,956 2,944 INTUIT INCORPORATED + 155,767 1,335 MERCURY INTERACTIVE CORPORATION + 64,934 160,411 MICROSOFT CORPORATION 4,417,719 1,672 MONSTER WORLDWIDE INCORPORATED + 36,717 1,403 NCR CORPORATION + 54,436 5,540 NOVELL INCORPORATED + 58,281 2,818 OMNICOM GROUP INCORPORATED 246,096 77,541 ORACLE CORPORATION + 1,023,541 3,950 PARAMETRIC TECHNOLOGY CORPORATION + 15,563 5,562 PEOPLESOFT INCORPORATED + 126,814 2,540 ROBERT HALF INTERNATIONAL INCORPORATED + 59,284 7,356 SIEBEL SYSTEMS INCORPORATED + 102,028 48,464 SUN MICROSYSTEMS INCORPORATED + 217,603 4,262 SUNGARD DATA SYSTEMS INCORPORATED + 118,100 4,570 SYMANTEC CORPORATION + 158,351 4,901 UNISYS CORPORATION + 72,780 6,343 VERITAS SOFTWARE CORPORATION + 235,706 9,752 YAHOO! INCORPORATED + 440,498 10,939,746 ------------ CHEMICALS & ALLIED PRODUCTS - 6.05% 23,193 ABBOTT LABORATORIES 1,080,794 3,371 AIR PRODUCTS & CHEMICALS INCORPORATED 178,090 871 ALBERTO-CULVER COMPANY CLASS B 54,943 19,137 AMGEN INCORPORATED + 1,182,667 1,638 AVERY DENNISON CORPORATION 91,761 3,508 AVON PRODUCTS INCORPORATED 236,755 28,770 BRISTOL-MYERS SQUIBB COMPANY 822,822 2,784 CHIRON CORPORATION + 158,660 3,130 CLOROX COMPANY 151,993 7,970 COLGATE PALMOLIVE COMPANY 398,898 13,656 DOW CHEMICAL COMPANY 567,680 14,787 DU PONT (E.I.) DE NEMOURS 678,575 1,147 EASTMAN CHEMICAL COMPANY 45,341 3,822 ECOLAB INCORPORATED 104,608 16,659 ELI LILLY & COMPANY 1,171,627 21 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE CHEMICALS & ALLIED PRODUCTS (continued) 5,424 FOREST LABORATORIES INCORPORATED + $ 335,203 3,325 GENZYME CORPORATION + 164,055 15,009 GILLETTE COMPANY 551,281 750 GREAT LAKES CHEMICAL CORPORATION 20,392 1,389 INTERNATIONAL FLAVORS & FRAGRANCES INCORPORATED 48,504 3,577 KING PHARMACEUTICALS INCORPORATED + 54,585 3,672 MEDIMMUNE INCORPORATED + 93,269 33,009 MERCK & COMPANY INCORPORATED 1,525,016 3,886 MONSANTO COMPANY 111,839 113,219 PFIZER INCORPORATED 4,000,027 2,520 PPG INDUSTRIES INCORPORATED 161,330 4,824 PRAXAIR INCORPORATED 184,277 19,237 PROCTER & GAMBLE COMPANY 1,921,392 3,303 ROHM & HAAS COMPANY 141,071 21,799 SCHERING-PLOUGH CORPORATION 379,085 1,028 SIGMA-ALDRICH CORPORATION 58,781 1,601 WATSON PHARMACEUTICALS INCORPORATED + 73,646 19,758 WYETH 838,727 17,587,694 ------------ COMMUNICATIONS - 2.41% 4,629 ALLTEL CORPORATION 215,619 11,718 AT&T CORPORATION 237,875 40,271 AT&T WIRELESS SERVICES INCORPORATED + 321,765 6,181 AVAYA INCORPORATED + 79,982 27,418 BELLSOUTH CORPORATION 775,929 2,139 CENTURYTEL INCORPORATED 69,774 9,132 CLEAR CHANNEL COMMUNICATIONS INCORPORATED 427,652 33,394 COMCAST CORPORATION CLASS A + 1,097,661 16,312 NEXTEL COMMUNICATIONS INCORPORATED CLASS A + 457,715 26,234 QWEST COMMUNICATIONS INTERNATIONAL INCORPORATED + 113,331 49,116 SBC COMMUNICATIONS INCORPORATED 1,280,454 13,410 SPRINT CORPORATION-FON GROUP 220,192 15,356 SPRINT CORPORATION-PCS GROUP + 86,301 4,784 UNIVISION COMMUNICATIONS INCORPORATED CLASS A + 189,877 40,969 VERIZON COMMUNICATIONS INCORPORATED 1,437,193 7,011,320 ------------ DEPOSITORY INSTITUTIONS - 5.58% 5,208 AMSOUTH BANCORPORATION 127,596 22,043 BANK OF AMERICA CORPORATION 1,772,918 11,476 BANK OF NEW YORK COMPANY INCORPORATED 380,085 16,585 BANK ONE CORPORATION 756,110 8,109 BB&T CORPORATION 313,332 3,302 CHARTER ONE FINANCIAL INCORPORATED 114,084 76,532 CITIGROUP INCORPORATED 3,714,863 2,601 COMERICA INCORPORATED 145,812 8,441 FIFTH THIRD BANCORP 498,863 22 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE DEPOSITORY INSTITUTIONS (continued) 1,861 FIRST TENNESSEE NATIONAL CORPORATION $ 82,070 15,645 FLEETBOSTON FINANCIAL CORPORATION 682,904 2,253 GOLDEN WEST FINANCIAL CORPORATION 232,487 3,395 HUNTINGTON BANCSHARES INCORPORATED 76,387 30,268 JP MORGAN CHASE & COMPANY 1,111,744 6,218 KEYCORP 182,312 3,359 MARSHALL & ILSLEY CORPORATION 128,482 6,382 MELLON FINANCIAL CORPORATION 204,926 9,018 NATIONAL CITY CORPORATION 306,071 2,250 NORTH FORK BANCORPORATION INCORPORATED 91,058 3,269 NORTHERN TRUST CORPORATION 151,747 4,113 PNC FINANCIAL SERVICES GROUP 225,104 3,295 REGIONS FINANCIAL CORPORATION 122,574 4,922 SOUTHTRUST CORPORATION 161,097 4,958 STATE STREET CORPORATION 258,213 4,176 SUNTRUST BANKS INCORPORATED 298,584 4,476 SYNOVUS FINANCIAL CORPORATION 129,446 2,797 UNION PLANTERS CORPORATION 88,078 28,614 US BANCORP 852,125 19,638 WACHOVIA CORPORATION 914,934 13,342 WASHINGTON MUTUAL INCORPORATED 535,281 25,102 WELLS FARGO & COMPANY++ 1,478,257 1,333 ZIONS BANCORPORATION 81,753 16,219,297 ------------ EATING & DRINKING PLACES - 0.25% 2,445 DARDEN RESTAURANTS INCORPORATED 51,443 18,828 MCDONALD'S CORPORATION 467,499 1,690 WENDY'S INTERNATIONAL INCORPORATED 66,316 4,363 YUM! BRANDS INCORPORATED + 150,087 735,345 ------------ EDUCATIONAL SERVICES - 0.06% 2,616 APOLLO GROUP INCORPORATED CLASS A + 177,888 ------------ ELECTRIC, GAS & SANITARY SERVICES - 1.62% 9,238 AES CORPORATION + 87,207 1,883 ALLEGHENY ENERGY INCORPORATED + 24,027 4,751 ALLIED WASTE INDUSTRIES INCORPORATED + 65,944 2,409 AMEREN CORPORATION 110,814 5,860 AMERICAN ELECTRIC POWER COMPANY INCORPORATED 178,789 6,129 CALPINE CORPORATION + 29,480 4,540 CENTERPOINT ENERGY INCORPORATED 43,993 2,641 CINERGY CORPORATION 102,497 4,219 CITIZENS COMMUNICATIONS COMPANY + 52,400 2,390 CMS ENERGY CORPORATION + 20,363 3,344 CONSOLIDATED EDISON INCORPORATED 143,825 2,481 CONSTELLATION ENERGY GROUP INCORPORATED 97,156 23 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE ELECTRIC, GAS & SANITARY SERVICES (continued) 4,812 DOMINION RESOURCES INCORPORATED $ 307,150 2,496 DTE ENERGY COMPANY 98,342 13,463 DUKE ENERGY CORPORATION 275,318 5,592 DYNEGY INCORPORATED CLASS A + 23,934 4,833 EDISON INTERNATIONAL 105,988 9,023 EL PASO CORPORATION 73,898 3,394 ENTERGY CORPORATION 193,899 4,851 EXELON CORPORATION 321,912 4,893 FIRSTENERGY CORPORATION 172,234 2,728 FPL GROUP INCORPORATED 178,466 2,359 KEYSPAN CORPORATION 86,811 1,828 KINDER MORGAN INCORPORATED 108,035 653 NICOR INCORPORATED 22,228 3,893 NISOURCE INCORPORATED 85,412 545 PEOPLES ENERGY CORPORATION 22,912 6,153 PG&E CORPORATION + 170,869 1,354 PINNACLE WEST CAPITAL CORPORATION 54,187 2,630 PPL CORPORATION 115,063 3,635 PROGRESS ENERGY INCORPORATED 164,520 3,488 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED 152,774 3,356 SEMPRA ENERGY 100,881 10,862 SOUTHERN COMPANY 328,576 2,786 TECO ENERGY INCORPORATED 40,146 4,805 TXU CORPORATION 113,975 8,641 WASTE MANAGEMENT INCORPORATED 255,774 7,687 WILLIAMS COMPANIES INCORPORATED 75,486 5,916 XCEL ENERGY INCORPORATED 100,454 4,705,739 ------------ ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 5.41% 11,940 ADC TELECOMMUNICATIONS INCORPORATED + 35,462 5,171 ADVANCED MICRO DEVICES INCORPORATED + 77,048 5,619 ALTERA CORPORATION + 127,551 2,945 AMERICAN POWER CONVERSION CORPORATION 72,005 5,449 ANALOG DEVICES INCORPORATED + 248,747 2,278 ANDREW CORPORATION + 26,220 4,554 APPLIED MICRO CIRCUITS CORPORATION + 27,233 4,492 BROADCOM CORPORATION CLASS A + 153,132 7,029 CIENA CORPORATION + 46,673 2,860 COMVERSE TECHNOLOGY INCORPORATED + 50,307 1,384 COOPER INDUSTRIES LIMITED CLASS A 80,175 6,242 EMERSON ELECTRIC COMPANY 404,169 148,963 GENERAL ELECTRIC COMPANY 4,614,874 96,907 INTEL CORPORATION 3,120,405 25,523 INTERNATIONAL BUSINESS MACHINES CORPORATION 2,365,472 2,963 JABIL CIRCUIT INCORPORATED + 83,853 21,288 JDS UNIPHASE CORPORATION + 77,701 2,888 KLA-TENCOR CORPORATION + 169,439 24 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (continued) 4,634 LINEAR TECHNOLOGY CORPORATION $ 194,952 5,623 LSI LOGIC CORPORATION + 49,876 62,214 LUCENT TECHNOLOGIES INCORPORATED + 176,688 4,875 MAXIM INTEGRATED PRODUCTS INCORPORATED 242,775 1,165 MAYTAG CORPORATION 32,445 9,058 MICRON TECHNOLOGY INCORPORATED + 122,011 2,824 MOLEX INCORPORATED 98,529 34,534 MOTOROLA INCORPORATED 485,893 2,750 NATIONAL SEMICONDUCTOR CORPORATION + 108,378 5,118 NETWORK APPLIANCE INCORPORATED + 105,073 2,260 NOVELLUS SYSTEMS INCORPORATED + 95,033 2,405 NVIDIA CORPORATION + 55,916 2,563 PMC-SIERRA INCORPORATED + 51,644 1,235 POWER-ONE INCORPORATED + 13,375 1,401 QLOGIC CORPORATION + 72,292 11,869 QUALCOMM INCORPORATED 640,095 2,626 ROCKWELL COLLINS INCORPORATED 78,859 7,674 SANMINA-SCI CORPORATION + 96,769 2,252 SCIENTIFIC-ATLANTA INCORPORATED 61,480 12,402 SOLECTRON CORPORATION + 73,296 6,189 TELLABS INCORPORATED + 52,173 25,675 TEXAS INSTRUMENTS INCORPORATED 754,332 867 THOMAS & BETTS CORPORATION + 19,846 1,033 WHIRLPOOL CORPORATION 75,047 5,078 XILINX INCORPORATED + 196,722 15,733,965 ------------ ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES - 0.17% 1,217 FLUOR CORPORATION 48,242 2,207 MOODY'S CORPORATION 133,634 5,593 PAYCHEX INCORPORATED 208,059 1,542 QUEST DIAGNOSTICS INCORPORATED 112,736 502,671 ------------ FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 0.29% 836 BALL CORPORATION 49,801 881 CRANE COMPANY 27,082 2,164 FORTUNE BRANDS INCORPORATED 154,704 4,571 ILLINOIS TOOL WORKS INCORPORATED 383,553 6,871 MASCO CORPORATION 188,334 864 SNAP-ON INCORPORATED 27,855 831,329 ------------ FINANCIAL SERVICES - 0.02% 3,570 JANUS CAPITAL GROUP INCORPORATED 58,584 ------------ 25 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE FOOD & KINDRED PRODUCTS - 2.00% 540 ADOLPH COORS COMPANY CLASS B $ 30,294 12,087 ANHEUSER-BUSCH COMPANIES INCORPORATED 636,743 9,593 ARCHER-DANIELS-MIDLAND COMPANY 146,005 6,087 CAMPBELL SOUP COMPANY 163,132 36,370 COCA COLA COMPANY 1,845,777 6,748 COCA COLA ENTERPRISES INCORPORATED 147,579 7,965 CONAGRA FOODS INCORPORATED 210,196 5,539 GENERAL MILLS INCORPORATED 250,917 5,220 HEINZ (HJ) COMPANY 190,165 1,645 HERCULES INCORPORATED + 20,069 1,930 HERSHEY FOODS CORPORATION 148,591 6,055 KELLOGG COMPANY 230,574 2,059 MCCORMICK & COMPANY INCORPORATED 61,976 3,898 PEPSI BOTTLING GROUP INCORPORATED 94,254 25,469 PEPSICO INCORPORATED 1,187,365 11,724 SARA LEE CORPORATION 254,528 3,334 WRIGLEY (WM) JR COMPANY 187,404 5,805,569 ------------ FOOD STORES - 0.19% 5,443 ALBERTSON'S INCORPORATED 123,284 11,054 KROGER COMPANY + 204,610 5,802 STARBUCKS CORPORATION + 191,814 2,101 WINN-DIXIE STORES INCORPORATED 20,905 540,613 ------------ FORESTRY - 0.07% 3,261 WEYERHAEUSER COMPANY 208,704 ------------ FURNITURE & FIXTURES - 0.05% 2,847 LEGGETT & PLATT INCORPORATED 61,580 4,070 NEWELL RUBBERMAID INCORPORATED 92,674 154,254 ------------ GENERAL MERCHANDISE STORES - 0.49% 1,734 BIG LOTS INCORPORATED + 24,640 4,999 DOLLAR GENERAL CORPORATION 104,929 2,557 FAMILY DOLLAR STORES INCORPORATED 91,745 2,682 FEDERATED DEPARTMENT STORES INCORPORATED 126,403 4,050 JC PENNEY COMPANY INCORPORATED 106,434 4,281 MAY DEPARTMENT STORES COMPANY 124,449 3,765 SEARS ROEBUCK & COMPANY 171,270 13,522 TARGET CORPORATION 519,245 7,466 TJX COMPANIES INCORPORATED 164,625 1,433,740 ------------ 26 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE HEALTH SERVICES - 0.25% 4,860 BIOGEN IDEC INCORPORATED + $ 178,751 7,351 HCA INCORPORATED 315,799 3,557 HEALTH MANAGEMENT ASSOCIATION INCORPORATED CLASS A 85,368 1,322 MANOR CARE INCORPORATED 45,701 6,895 TENET HEALTHCARE CORPORATION + 110,665 736,284 ------------ HOLDING & OTHER INVESTMENT OFFICES - 0.22% 1,397 APARTMENT INVESTMENT & MANAGEMENT COMPANY CLASS A 48,196 5,930 EQUITY OFFICE PROPERTIES TRUST 169,895 4,086 EQUITY RESIDENTIAL 120,578 2,714 PLUM CREEK TIMBER COMPANY 82,641 2,669 PROLOGIS 85,648 2,838 SIMON PROPERTY GROUP INCORPORATED 131,513 638,471 ------------ HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES - 0.19% 4,393 BED BATH & BEYOND INCORPORATED + 190,437 4,801 BEST BUY COMPANY INCORPORATED 250,804 3,107 CIRCUIT CITY STORES INCORPORATED 31,474 2,434 RADIOSHACK CORPORATION 74,675 547,390 ------------ HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES - 0.12% 5,628 HILTON HOTELS CORPORATION 96,408 3,430 MARRIOTT INTERNATIONAL INCORPORATED CLASS A 158,466 3,000 STARWOOD HOTELS & RESORTS WORLDWIDE INCORPORATED 107,910 362,784 ------------ INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 2.68% 11,644 3M COMPANY 990,089 1,080 AMERICAN STANDARD COMPANIES INCORPORATED + 108,756 5,377 APPLE COMPUTER INCORPORATED + 114,906 24,673 APPLIED MATERIALS INCORPORATED + 553,909 4,967 BAKER HUGHES INCORPORATED 159,739 1,153 BLACK & DECKER CORPORATION 56,866 5,151 CATERPILLAR INCORPORATED 427,636 102,416 CISCO SYSTEMS INCORPORATED + 2,487,685 627 CUMMINS INCORPORATED 30,685 3,560 DEERE & COMPANY 231,578 37,985 DELL INCORPORATED + 1,289,971 3,004 DOVER CORPORATION 119,409 35,653 EMC CORPORATION + 460,637 4,812 GATEWAY INCORPORATED + 22,135 2,573 INGERSOLL-RAND COMPANY CLASS A 174,655 1,906 LEXMARK INTERNATIONAL INCORPORATED + 149,888 1,854 PALL CORPORATION 49,743 1,759 PARKER HANNIFIN CORPORATION 104,660 27 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (continued) 3,465 PITNEY BOWES INCORPORATED $ 140,748 1,202 STANLEY WORKS 45,520 3,420 SYMBOL TECHNOLOGIES INCORPORATED 57,764 7,776,979 ------------ INSURANCE AGENTS, BROKERS & SERVICE - 0.48% 4,140 ACE LIMITED 171,479 4,652 AON CORPORATION 111,369 2,389 HUMANA INCORPORATED + 54,588 2,092 JEFFERSON-PILOT CORPORATION 105,960 7,866 MARSH & MCLENNAN COMPANIES INCORPORATED 376,703 4,010 MEDCO HEALTH SOLUTIONS INCORPORATED + 136,300 11,277 METLIFE INCORPORATED 379,696 4,392 UNUMPROVIDENT CORPORATION 69,262 1,405,357 ------------ INSURANCE CARRIERS - 2.46% 2,263 AETNA INCORPORATED 152,934 7,608 AFLAC INCORPORATED 275,257 10,438 ALLSTATE CORPORATION 449,043 1,585 AMBAC FINANCIAL GROUP INCORPORATED 109,983 38,690 AMERICAN INTERNATIONAL GROUP INCORPORATED 2,564,373 2,051 ANTHEM INCORPORATED + 153,825 2,785 CHUBB CORPORATION 189,658 2,084 CIGNA CORPORATION 119,830 2,380 CINCINNATI FINANCIAL CORPORATION 99,674 4,197 HARTFORD FINANCIAL SERVICES GROUP INCORPORATED 247,749 4,292 JOHN HANCOCK FINANCIAL SERVICES INCORPORATED 160,950 2,640 LINCOLN NATIONAL CORPORATION 106,577 2,751 LOEWS CORPORATION 136,037 2,138 MBIA INCORPORATED 126,634 1,460 MGIC INVESTMENT CORPORATION 83,132 4,791 PRINCIPAL FINANCIAL GROUP INCORPORATED 158,438 3,204 PROGRESSIVE CORPORATION 267,822 8,018 PRUDENTIAL FINANCIAL INCORPORATED 334,912 2,055 SAFECO CORPORATION 80,001 3,384 ST PAUL COMPANIES INCORPORATED 134,176 1,679 TORCHMARK CORPORATION 76,462 14,907 TRAVELERS PROPERTY CASUALTY CORPORATION CLASS B 252,972 8,703 UNITEDHEALTH GROUP INCORPORATED 506,341 2,254 WELLPOINT HEALTH NETWORKS INCORPORATED + 218,615 2,036 XL CAPITAL LIMITED CLASS A 157,892 7,163,287 ------------ LUMBER & WOOD PRODUCTS, EXCEPT FURNITURE - 0.05% 3,770 GEORGIA-PACIFIC CORPORATION 115,626 1,570 LOUISIANA-PACIFIC CORPORATION + 28,071 143,697 ------------ 28 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 1.52% 7,054 AGILENT TECHNOLOGIES INCORPORATED + $ 206,259 1,935 ALLERGAN INCORPORATED 148,627 3,086 APPLERA CORPORATION-APPLIED BIOSYSTEMS GROUP 63,911 777 BAUSCH & LOMB INCORPORATED 40,326 9,054 BAXTER INTERNATIONAL INCORPORATED 276,328 3,767 BECTON DICKINSON & COMPANY 154,974 3,793 BIOMET INCORPORATED 138,103 12,152 BOSTON SCIENTIFIC CORPORATION + 446,708 769 CR BARD INCORPORATED 62,481 2,278 DANAHER CORPORATION 209,007 4,251 EASTMAN KODAK COMPANY 109,123 4,614 GUIDANT CORPORATION 277,763 17,981 MEDTRONIC INCORPORATED 874,056 724 MILLIPORE CORPORATION + 31,168 1,881 PERKINELMER INCORPORATED 32,109 6,175 RAYTHEON COMPANY 185,497 2,765 ROCKWELL AUTOMATION INCORPORATED 98,434 2,559 ST JUDE MEDICAL INCORPORATED + 156,995 2,959 STRYKER CORPORATION 251,545 1,254 TEKTRONIX INCORPORATED 39,626 2,838 TERADYNE INCORPORATED + 72,227 2,415 THERMO ELECTRON CORPORATION + 60,858 1,801 WATERS CORPORATION + 59,721 11,747 XEROX CORPORATION + 162,109 3,587 ZIMMER HOLDINGS INCORPORATED + 252,525 4,410,480 ------------ METAL MINING - 0.18% 2,708 FREEPORT-MCMORAN COPPER & GOLD INCORPORATED CLASS B 114,088 6,410 NEWMONT MINING CORPORATION 311,590 1,325 PHELPS DODGE CORPORATION + 100,819 526,497 ------------ MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS - 0.02% 1,508 VULCAN MATERIALS COMPANY 71,736 ------------ MISCELLANEOUS MANUFACTURING INDUSTRIES - 1.58% 1,127 EATON CORPORATION 121,693 2,588 HASBRO INCORPORATED 55,073 45,236 HEWLETT-PACKARD COMPANY 1,039,071 1,368 ITT INDUSTRIES INCORPORATED 101,519 44,034 JOHNSON & JOHNSON 2,274,796 6,377 MATTEL INCORPORATED 122,885 2,175 TIFFANY & COMPANY 98,310 29,658 TYCO INTERNATIONAL LIMITED 785,937 4,599,284 ------------ 29 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE MISCELLANEOUS RETAIL - 1.66% 6,791 COSTCO WHOLESALE CORPORATION + $ 252,489 5,859 CVS CORPORATION 211,627 1,235 DILLARDS INCORPORATED CLASS A 20,328 1,165 EXPRESS SCRIPTS INCORPORATED + 77,391 4,645 OFFICE DEPOT INCORPORATED + 77,618 7,345 STAPLES INCORPORATED + 200,519 3,167 TOYS R US INCORPORATED + 40,031 64,205 WAL-MART STORES INCORPORATED 3,406,075 15,209 WALGREEN COMPANY 553,303 4,839,381 ------------ MOTION PICTURES - 0.66% 67,083 TIME WARNER INCORPORATED + 1,206,823 30,344 WALT DISNEY COMPANY 707,926 1,914,749 ------------ MOTOR FREIGHT TRANSPORTATION & WAREHOUSING - 0.43% 16,678 UNITED PARCEL SERVICE INCORPORATED CLASS B 1,243,345 ------------ NON-DEPOSITORY CREDIT INSTITUTIONS - 1.31% 19,082 AMERICAN EXPRESS COMPANY 920,325 3,425 CAPITAL ONE FINANCIAL CORPORATION 209,918 2,732 COUNTRYWIDE FINANCIAL CORPORATION 207,222 14,415 FANNIE MAE 1,081,990 10,321 FREDDIE MAC 601,921 18,955 MBNA CORPORATION 471,032 4,305 PROVIDIAN FINANCIAL CORPORATION + 50,110 6,688 SLM CORPORATION 252,004 3,794,522 ------------ OIL & GAS EXTRACTION - 0.80% 3,722 ANADARKO PETROLEUM CORPORATION 189,859 2,403 APACHE CORPORATION 194,883 2,348 BJ SERVICES COMPANY + 84,293 2,946 BURLINGTON RESOURCES INCORPORATED 163,150 3,450 DEVON ENERGY CORPORATION 197,547 1,707 EOG RESOURCES INCORPORATED 78,812 6,499 HALLIBURTON COMPANY 168,974 1,496 KERR-MCGEE CORPORATION 69,549 2,174 NABORS INDUSTRIES LIMITED + 90,221 1,984 NOBLE CORPORATION + 70,988 5,713 OCCIDENTAL PETROLEUM CORPORATION 241,317 1,395 ROWAN COMPANIES INCORPORATED + 32,322 8,685 SCHLUMBERGER LIMITED 475,243 4,745 TRANSOCEAN INCORPORATED + 113,928 3,841 UNOCAL CORPORATION 141,464 2,312,550 ------------ 30 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE PAPER & ALLIED PRODUCTS - 0.35% 788 BEMIS COMPANY INCORPORATED $ 39,400 1,282 BOISE CASCADE CORPORATION 42,127 7,128 INTERNATIONAL PAPER COMPANY 307,288 7,484 KIMBERLY-CLARK CORPORATION 442,230 2,975 MEADWESTVACO CORPORATION 88,506 2,332 PACTIV CORPORATION + 55,735 805 TEMPLE-INLAND INCORPORATED 50,449 1,025,735 ------------ PERSONAL SERVICES - 0.09% 2,533 CINTAS CORPORATION 126,980 2,644 H & R BLOCK INCORPORATED 146,398 273,378 ------------ PETROLEUM REFINING & RELATED INDUSTRIES - 2.19% 1,333 AMERADA HESS CORPORATION 70,876 1,017 ASHLAND INCORPORATED 44,809 15,858 CHEVRONTEXACO CORPORATION 1,369,973 10,099 CONOCOPHILLIPS 662,191 98,061 EXXON MOBIL CORPORATION 4,020,501 4,602 MARATHON OIL CORPORATION 152,280 1,145 SUNOCO INCORPORATED 58,567 6,379,197 ------------ PRIMARY METAL INDUSTRIES - 0.24% 12,838 ALCOA INCORPORATED 487,844 1,196 ALLEGHENY TECHNOLOGIES INCORPORATED 15,811 1,861 ENGELHARD CORPORATION 55,737 1,161 NUCOR CORPORATION 65,016 1,532 UNITED STATES STEEL CORPORATION 53,651 1,277 WORTHINGTON INDUSTRIES INCORPORATED 23,024 701,083 ------------ PRINTING, PUBLISHING & ALLIED INDUSTRIES - 0.80% 986 AMERICAN GREETINGS CORPORATION CLASS A + 21,564 1,210 DOW JONES & COMPANY INCORPORATED 60,319 4,021 GANNETT COMPANY INCORPORATED 358,512 1,185 KNIGHT-RIDDER INCORPORATED 91,683 2,842 MCGRAW-HILL COMPANIES INCORPORATED 198,713 744 MEREDITH CORPORATION 36,315 2,209 NEW YORK TIMES COMPANY CLASS A 105,568 1,685 RR DONNELLEY & SONS COMPANY 50,803 4,632 TRIBUNE COMPANY 239,011 25,951 VIACOM INCORPORATED CLASS B 1,151,705 2,314,193 ------------ 31 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE RAILROAD TRANSPORTATION - 0.24% 5,507 BURLINGTON NORTHERN SANTA FE CORPORATION $ 178,151 3,175 CSX CORPORATION 114,110 5,792 NORFOLK SOUTHERN CORPORATION 136,981 3,785 UNION PACIFIC CORPORATION 262,982 692,224 ------------ RUBBER & MISCELLANEOUS PLASTICS PRODUCTS - 0.15% 1,095 COOPER TIRE & RUBBER COMPANY 23,411 2,601 GOODYEAR TIRE & RUBBER COMPANY + 20,444 3,893 NIKE INCORPORATED CLASS B 266,515 873 REEBOK INTERNATIONAL LIMITED 34,326 1,260 SEALED AIR CORPORATION + 68,216 866 TUPPERWARE CORPORATION 15,017 427,929 ------------ SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 1.18% 1,454 BEAR STEARNS COMPANIES INCORPORATED 116,247 20,126 CHARLES SCHWAB CORPORATION 238,292 1,612 FEDERATED INVESTORS INCORPORATED CLASS B 47,328 3,723 FRANKLIN RESOURCES INCORPORATED 193,820 7,024 GOLDMAN SACHS GROUP INCORPORATED 693,480 4,028 LEHMAN BROTHERS HOLDINGS INCORPORATED 311,042 14,024 MERRILL LYNCH & COMPANY INCORPORATED 822,508 16,067 MORGAN STANLEY 929,797 1,847 T ROWE PRICE GROUP INCORPORATED 87,566 3,440,080 ------------ STONE, CLAY, GLASS & CONCRETE PRODUCTS - 0.07% 19,727 CORNING INCORPORATED + 205,753 ------------ TOBACCO PRODUCTS - 0.62% 30,133 ALTRIA GROUP INCORPORATED 1,639,838 1,255 RJ REYNOLDS TOBACCO HOLDINGS INCORPORATED 72,978 2,460 UST INCORPORATED 87,797 1,800,613 ------------ TRANSPORTATION BY AIR - 0.18% 1,831 DELTA AIR LINES INCORPORATED + 21,624 4,425 FEDEX CORPORATION 298,687 11,678 SOUTHWEST AIRLINES COMPANY 188,483 508,794 ------------ TRANSPORTATION EQUIPMENT - 1.50% 12,480 BOEING COMPANY 525,907 1,357 BRUNSWICK CORPORATION 43,193 2,204 DANA CORPORATION 40,443 8,312 DELPHI CORPORATION 84,865 27,164 FORD MOTOR COMPANY 434,624 2,933 GENERAL DYNAMICS CORPORATION 265,114 32 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE TRANSPORTATION EQUIPMENT (continued) 8,319 GENERAL MOTORS CORPORATION $ 444,235 2,580 GENUINE PARTS COMPANY 85,656 1,744 GOODRICH CORPORATION 51,779 4,494 HARLEY-DAVIDSON INCORPORATED 213,600 12,789 HONEYWELL INTERNATIONAL INCORPORATED 427,536 1,339 JOHNSON CONTROLS INCORPORATED 155,485 6,689 LOCKHEED MARTIN CORPORATION 343,815 1,019 NAVISTAR INTERNATIONAL CORPORATION + 48,800 2,716 NORTHROP GRUMMAN CORPORATION 259,650 1,731 PACCAR INCORPORATED 147,343 2,017 TEXTRON INCORPORATED 115,090 6,981 UNITED TECHNOLOGIES CORPORATION 661,589 4,348,724 ------------ TRANSPORTATION SERVICES - 0.02% 2,128 SABRE HOLDINGS CORPORATION 45,943 ------------ WATER TRANSPORTATION - 0.13% 9,345 CARNIVAL CORPORATION 371,277 ------------ WHOLESALE TRADE NON-DURABLE GOODS - 0.44% 1,660 AMERISOURCEBERGEN CORPORATION 93,209 900 BROWN-FORMAN CORPORATION CLASS B 84,105 6,423 CARDINAL HEALTH INCORPORATED 392,831 4,323 MCKESSON CORPORATION 139,028 6,561 Safeway Incorporated + 143,751 1,989 SUPERVALU INCORPORATED 56,865 9,600 Sysco Corporation 357,408 1,267,197 ------------ WHOLESALE TRADE-DURABLE GOODS - 0.03% 1,939 VISTEON CORPORATION 20,185 1,353 WW GRAINGER INCORPORATED 64,119 84,304 ------------ TOTAL COMMON STOCK (COST $170,012,941) 152,594,490 ------------ PRINCIPAL INTEREST RATE MATURITY DATE VALUE US TREASURY SECURITIES - 26.07% US TREASURY BONDS - 26.07% $ 3,408,000 US TREASURY BOND 7.50% 11/15/2024 $ 4,444,911 3,377,000 US TREASURY BOND 7.63 02/15/2025 4,459,882 4,005,000 US TREASURY BOND 6.88 08/15/2025 4,899,397 4,980,000 US TREASURY BOND 6.00 02/15/2026 5,522,546 3,070,000 US TREASURY BOND 6.75 08/15/2026 3,715,418 3,897,000 US TREASURY BOND 6.50 11/15/2026 4,584,454 3,428,000 US TREASURY BOND 6.63 02/15/2027 4,094,451 3,224,000 US TREASURY BOND 6.38 08/15/2027 3,744,373 7,966,000 US TREASURY BOND 6.13 11/15/2027 8,981,044 33 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE US TREASURY BONDS (continued) $ 4,268,000 US TREASURY BOND 5.50% 08/15/2028 $ 4,445,557 3,983,000 US TREASURY BOND 5.25 11/15/2028 4,011,785 4,129,000 US TREASURY BOND 5.25 02/15/2029 4,165,451 4,056,000 US TREASURY BOND 6.13 08/15/2029 4,596,271 6,462,000 US TREASURY BOND 6.25 05/15/2030 7,457,045 6,401,000 US TREASURY BOND 5.38 02/15/2031 6,675,296 75,797,881 ------------ TOTAL US TREASURY SECURITIES (COST $70,790,103) 75,797,881 ------------ SHORT-TERM INVESTMENTS - 20.91% SHARES MUTUAL FUND - 18.34% 53,316,718 WELLS FARGO MONEY MARKET TRUST ~ 53,316,718 ------------ PRINCIPAL US TREASURY BILLS - 2.57% $ 80,000 US TREASURY BILL # 0.98 ^ 02/12/2004 79,920 215,000 US TREASURY BILL # 1.00 ^ 02/12/2004 214,785 165,000 US TREASURY BILL # 1.01 ^ 02/12/2004 164,835 430,000 US TREASURY BILL # 0.96 ^ 04/08/2004 428,943 30,000 US TREASURY BILL # 0.97 ^ 04/08/2004 29,926 85,000 US TREASURY BILL # 0.98 ^ 04/08/2004 84,791 480,000 US TREASURY BILL # 0.90 ^ 05/13/2004 478,388 265,000 US TREASURY BILL # 0.93 ^ 05/13/2004 264,110 5,665,000 US TREASURY BILL # 0.95 ^ 05/13/2004 5,645,971 90,000 US TREASURY BILL # 1.00 ^ 05/13/2004 89,698 7,481,367 ------------ TOTAL SHORT-TERM INVESTMENTS (COST $60,797,046) 60,798,085 ------------ TOTAL INVESTMENTS IN SECURITIES (COST $301,600,090) * 99.47% $289,190,456 OTHER ASSETS AND LIABILITIES, NET 0.53 1,532,469 ------ ------------ Total Net Assets 100.00% $290,722,925 ------ ------------ s + NON-INCOME EARNING SECURITIES. ++ SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $1,077,625 ^ ZERO COUPON/STEPPED COUPON BOND. INTEREST RATE PRESENTED IS YIELD TO MATURITY. ~ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND DOES NOT PAY AN INVESTMENT ADVISORY FEE FOR SUCH INVESTMENTS. # SECURITY PLEDGED AS COLLATERAL FOR FUTURES TRANSACTIONS. * COST FOR FEDERAL INCOME TAX PURPOSES IS $303,034,206 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $ 23,192,720 GROSS UNREALIZED DEPRECIATION (37,036,470) ------------ NET UNREALIZED APPRECIATION (DEPRECIATION) $(13,843,750) THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 34 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST EQUITY INCOME FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCK - 95.94% BUSINESS SERVICES - 0.67% 25,300 MICROSOFT CORPORATION $ 696,762 ------------ CHEMICALS & ALLIED PRODUCTS - 11.44% 10,700 ABBOTT LABORATORIES 498,620 18,360 AIR PRODUCTS & CHEMICALS INCORPORATED 969,959 36,690 DU PONT (E.I.) DE NEMOURS 1,683,704 39,660 MERCK & COMPANY INCORPORATED 1,832,292 56,105 PFIZER INCORPORATED 1,982,190 27,120 PROCTER & GAMBLE COMPANY 2,708,746 49,819 ROHM & HAAS COMPANY 2,127,769 11,803,280 ------------ COMMUNICATIONS - 3.04% 16,979 AT&T CORPORATION 344,674 22,100 SBC COMMUNICATIONS INCORPORATED 576,147 63,249 VERIZON COMMUNICATIONS INCORPORATED 2,218,775 3,139,596 ------------ DEPOSITORY INSTITUTIONS - 11.70% 16,860 BANK OF AMERICA CORPORATION 1,356,050 51,815 CITIGROUP INCORPORATED 2,515,100 84,520 JP MORGAN CHASE & COMPANY 3,104,419 139,050 US BANCORP 4,140,909 20,500 WACHOVIA CORPORATION 955,095 12,071,573 ------------ EATING & DRINKING PLACES - 2.67% 110,750 MCDONALD'S CORPORATION 2,749,923 ------------ ELECTRIC, GAS & SANITARY SERVICES - 4.27% 920 DOMINION RESOURCES INCORPORATED 58,724 4,470 DUKE ENERGY CORPORATION 91,412 9,972 FIRSTENERGY CORPORATION 351,014 13,400 FPL GROUP INCORPORATED 876,628 69,030 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED 3,023,514 4,401,292 ------------ ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 11.08% 50,270 EMERSON ELECTRIC COMPANY 3,254,983 72,280 GENERAL ELECTRIC COMPANY 2,239,234 45,900 INTERNATIONAL BUSINESS MACHINES CORPORATION 4,254,012 54,800 MOTOROLA INCORPORATED 771,036 53,500 NOKIA OYJ ADR 909,500 11,428,765 ------------ FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 4.04% 58,370 FORTUNE BRANDS INCORPORATED 4,172,871 ------------ 35 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST EQUITY INCOME FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE FOOD & KINDRED PRODUCTS - 6.25% 74,790 PEPSICO INCORPORATED $ 3,486,710 136,250 SARA LEE CORPORATION 2,957,987 6,444,697 ------------ GENERAL MERCHANDISE STORES - 4.57% 71,137 MAY DEPARTMENT STORES COMPANY 2,067,953 68,840 TARGET CORPORATION 2,643,456 4,711,409 ------------ INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 3.32% 40,264 3M COMPANY 3,423,648 ------------ INSURANCE AGENTS, BROKERS & SERVICE - 0.85% 25,930 METLIFE INCORPORATED 873,063 ------------ INSURANCE CARRIERS - 7.43% 122,980 AEGON NV 1,820,104 23,100 ALLSTATE CORPORATION 993,762 30,038 AMERICAN INTERNATIONAL GROUP INCORPORATED 1,990,919 72,250 ST PAUL COMPANIES INCORPORATED 2,864,712 7,669,497 ------------ MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 0.92% 23,035 BECTON DICKINSON & COMPANY 947,660 ------------ MISCELLANEOUS MANUFACTURING INDUSTRIES - 5.23% 145,600 HEWLETT-PACKARD COMPANY 3,344,432 39,620 JOHNSON & JOHNSON 2,046,769 5,391,201 ------------ MOTION PICTURES - 1.49% 66,100 WALT DISNEY COMPANY 1,542,113 ------------ NON-DEPOSITORY CREDIT INSTITUTIONS - 2.71% 57,870 AMERICAN EXPRESS COMPANY 2,791,070 ------------ PAPER & ALLIED PRODUCTS - 0.94% 16,500 KIMBERLY-CLARK CORPORATION 974,985 ------------ PETROLEUM REFINING & RELATED INDUSTRIES - 9.86% 45,159 BP PLC ADR 2,228,597 23,575 CHEVRONTEXACO CORPORATION 2,036,644 18,700 CONOCOPHILLIPS 1,226,159 85,614 EXXON MOBIL CORPORATION 3,510,174 22,260 ROYAL DUTCH PETROLEUM COMPANY 1,166,201 10,167,775 ------------ TOBACCO PRODUCTS - 1.81% 34,370 ALTRIA GROUP INCORPORATED 1,870,415 ------------ TRANSPORTATION EQUIPMENT - 1.65% 50,783 HONEYWELL INTERNATIONAL INCORPORATED 1,697,676 ------------ 36 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST EQUITY INCOME FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE TOTAL COMMON STOCK (COST $91,730,780) $ 98,969,271 ------------ SHORT-TERM INVESTMENTS - 3.83% MUTUAL FUND - 3.83% 3,949,700 WELLS FARGO MONEY MARKET TRUST ~ 3,949,700 ------------ TOTAL SHORT-TERM INVESTMENTS (COST $3,949,700) 3,949,700 ------------ TOTAL INVESTMENTS IN SECURITIES (COST $95,680,480) * 99.77% $102,918,971 OTHER ASSETS AND LIABILITIES, NET 0.23 238,458 ------ ------------ Total Net Assets 100.00% $103,157,429 ------ ------------ ~ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND DOES NOT PAY AN INVESTMENT ADVISORY FEE FOR SUCH INVESTMENTS. * COST FOR FEDERAL INCOME TAX PURPOSES IS $95,726,290 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $13,062,393 GROSS UNREALIZED DEPRECIATION (5,869,712) ----------- NET UNREALIZED APPRECIATION (DEPRECIATION) $ 7,192,681 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 37 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST EQUITY VALUE FUND - ------------------------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCK - 96.69% BUSINESS SERVICES - 0.68% 7,270 Microsoft Corporation $ 200,216 ----------- CHEMICALS & ALLIED PRODUCTS - 12.03% 3,200 ABBOTT LABORATORIES 149,120 5,520 AIR PRODUCTS & CHEMICALS INCORPORATED 291,622 11,070 DU PONT (E.I.) DE NEMOURS 508,002 11,785 MERCK & COMPANY INCORPORATED 544,467 16,690 PFIZER INCORPORATED 589,658 8,325 PROCTER & GAMBLE COMPANY 831,501 14,800 ROHM & HAAS COMPANY 632,108 3,546,478 ----------- COMMUNICATIONS - 2.98% 4,800 AT&T CORPORATION 97,440 4,475 SBC COMMUNICATIONS INCORPORATED 116,663 18,910 VERIZON COMMUNICATIONS INCORPORATED 663,363 877,466 ----------- DEPOSITORY INSTITUTIONS - 11.53% 5,695 BANK OF AMERICA CORPORATION 458,049 15,420 CITIGROUP INCORPORATED 748,486 25,145 JP MORGAN CHASE & COMPANY 923,576 33,100 US BANCORP 985,718 6,110 WACHOVIA CORPORATION 284,665 3,400,494 ----------- EATING & DRINKING PLACES - 2.65% 31,500 MCDONALD'S CORPORATION 782,145 ----------- ELECTRIC, GAS & SANITARY SERVICES - 4.10% 2,450 DOMINION RESOURCES INCORPORATED 156,383 5,850 DUKE ENERGY CORPORATION 119,633 3,900 FIRSTENERGY CORPORATION 137,280 4,000 FPL GROUP INCORPORATED 261,680 12,200 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED 534,360 1,209,336 ----------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 10.49% 15,000 EMERSON ELECTRIC COMPANY 971,250 22,000 GENERAL ELECTRIC COMPANY 681,560 10,800 INTERNATIONAL BUSINESS MACHINES CORPORATION 1,000,944 12,500 MOTOROLA INCORPORATED 175,875 15,460 NOKIA OYJ ADR 262,820 3,092,449 ----------- FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 4.23% 17,445 FORTUNE BRANDS INCORPORATED 1,247,143 ----------- 38 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST EQUITY VALUE FUND - ------------------------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE FOOD & KINDRED PRODUCTS - 6.50% 22,250 PEPSICO INCORPORATED $ 1,037,295 40,500 SARA LEE CORPORATION 879,255 1,916,550 ----------- GENERAL MERCHANDISE STORES - 4.51% 18,710 MAY DEPARTMENT STORES COMPANY 543,900 20,428 TARGET CORPORATION 784,435 1,328,335 ----------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 3.66% 12,700 3M COMPANY 1,079,881 ----------- INSURANCE AGENTS, BROKERS & SERVICE - 1.04% 9,100 METLIFE INCORPORATED 306,397 ----------- INSURANCE CARRIERS - 6.95% 37,924 AEGON NV 561,275 6,900 ALLSTATE CORPORATION 296,838 8,518 AMERICAN INTERNATIONAL GROUP INCORPORATED 564,573 15,760 ST PAUL COMPANIES INCORPORATED 624,884 2,047,570 ----------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 1.05% 7,513 BECTON DICKINSON & COMPANY 309,085 ----------- MISCELLANEOUS MANUFACTURING INDUSTRIES - 5.47% 45,250 HEWLETT-PACKARD COMPANY 1,039,392 11,100 JOHNSON & JOHNSON 573,426 1,612,818 ----------- MOTION PICTURES - 1.66% 21,000 WALT DISNEY COMPANY 489,930 ----------- NON-DEPOSITORY CREDIT INSTITUTIONS - 2.78% 17,000 AMERICAN EXPRESS COMPANY 819,910 ----------- PAPER & ALLIED PRODUCTS - 0.99% 4,950 KIMBERLY-CLARK CORPORATION 292,496 ----------- PETROLEUM REFINING & RELATED INDUSTRIES - 10.03% 13,515 BP PLC ADR 666,965 7,040 CHEVRONTEXACO CORPORATION 608,186 4,650 CONOCOPHILLIPS 304,901 25,554 EXXON MOBIL CORPORATION 1,047,714 6,260 ROYAL DUTCH PETROLEUM COMPANY 327,961 2,955,727 ----------- TOBACCO PRODUCTS - 1.89% 10,250 ALTRIA GROUP INCORPORATED 557,805 ----------- 39 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST EQUITY VALUE FUND - ------------------------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE TRANSPORTATION EQUIPMENT - 1.47% 13,000 HONEYWELL INTERNATIONAL INCORPORATED $ 434,590 ----------- TOTAL COMMON STOCK (COST $27,018,752) 28,506,821 ----------- SHORT-TERM INVESTMENTS - 3.04% PRINCIPAL INTEREST RATE MATURITY DATE REPURCHASE AGREEMENTS - 3.04% $262,000 GOLDMAN SACHS & COMPANY - 102% COLLATERALIZED BY U.S. GOVERNMENT SECURITIES 0.83 01/02/2004 262,000 634,000 MORGAN STANLEY - 102% COLLATERALIZED BY U.S. GOVERNMENT SECURITIES 0.82 01/02/2004 634,000 896,000 ----------- Total Short-Term Investments (Cost $896,000) 896,000 ----------- Total Investments in Securities (Cost $27,914,752) * 99.73% $29,402,821 Other Assets and Liabilities, Net 0.27 79,156 ------ ----------- Total Net Assets 100.00% $29,481,977 ------ ----------- * COST FOR FEDERAL INCOME TAX PURPOSES IS $28,031,412 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $ 2,840,903 GROSS UNREALIZED DEPRECIATION (1,469,494) ----------- NET UNREALIZED APPRECIATION (DEPRECIATION) $ 1,371,409 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 40 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST GROWTH FUND - ------------------------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCK - 99.32% BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS - 3.41% 11,590 HOME DEPOT INCORPORATED $ 411,329 19,320 LOWE'S COMPANIES INCORPORATED 1,070,135 1,481,464 ----------- BUSINESS SERVICES - 12.17% 15,490 EBAY INCORPORATED + 1,000,499 15,980 ELECTRONIC ARTS INCORPORATED + 763,524 15,898 FIRST DATA CORPORATION 653,249 9,840 INTUIT INCORPORATED + 520,634 37,046 MICROSOFT CORPORATION 1,020,247 27,650 ORACLE CORPORATION + 364,980 14,840 SYMANTEC CORPORATION + 514,206 11,900 VERITAS SOFTWARE CORPORATION + 442,204 5,279,543 ----------- CHEMICALS & ALLIED PRODUCTS - 13.74% 18,370 AMGEN INCORPORATED + 1,135,266 6,150 ELI LILLY & COMPANY 432,530 4,820 GENENTECH INCORPORATED + 451,007 12,060 GILEAD SCIENCES INCORPORATED + 701,168 38,067 PFIZER INCORPORATED 1,344,907 8,570 PROCTER & GAMBLE COMPANY 855,972 10,330 TEVA PHARMACEUTICAL INDUSTRIES LIMITED ADR 585,814 10,680 WYETH 453,366 5,960,030 ----------- COMMUNICATIONS - 0.82% 10,520 INTERACTIVECORP + 356,944 ----------- DEPOSITORY INSTITUTIONS - 3.47% 21,676 CITIGROUP INCORPORATED 1,052,153 7,650 FIFTH THIRD BANCORP 452,115 1,504,268 ----------- EDUCATIONAL SERVICES - 1.97% 12,560 APOLLO GROUP INCORPORATED CLASS A + 854,080 ----------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 11.81% 45,250 GENERAL ELECTRIC COMPANY 1,401,845 52,740 INTEL CORPORATION 1,698,228 14,860 LINEAR TECHNOLOGY CORPORATION 625,160 12,200 MAXIM INTEGRATED PRODUCTS INCORPORATED 607,560 17,700 NETWORK APPLIANCE INCORPORATED 363,381 14,540 TEXAS INSTRUMENTS INCORPORATED + 427,185 5,123,359 ----------- 41 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST GROWTH FUND - ------------------------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE FOOD & KINDRED PRODUCTS - 3.41% 8,780 COCA COLA COMPANY $ 445,585 9,190 PEPSICO INCORPORATED 428,438 10,750 WRIGLEY (WM) JR COMPANY 604,257 1,478,280 ----------- FOOD STORES - 2.34% 30,770 STARBUCKS CORPORATION + 1,017,256 ----------- HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES - 3.32% 19,640 BED BATH & BEYOND INCORPORATED + 851,394 11,280 BEST BUY COMPANY INCORPORATED 589,267 1,440,661 ----------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 9.67% 10,550 3M COMPANY 897,067 54,727 CISCO SYSTEMS INCORPORATED + 1,329,319 32,976 DELL INCORPORATED + 1,119,865 65,620 EMC CORPORATION + 847,810 4,194,061 ----------- INSURANCE CARRIERS - 2.76% 8,616 AMERICAN INTERNATIONAL GROUP INCORPORATED 571,069 6,480 WELLPOINT HEALTH NETWORKS INCORPORATED + 628,495 1,199,564 ----------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 10.72% 29,240 BOSTON SCIENTIFIC CORPORATION + 1,074,862 4,980 DANAHER CORPORATION 456,915 25,470 MEDTRONIC INCORPORATED 1,238,097 10,520 ST JUDE MEDICAL INCORPORATED + 645,402 5,190 STRYKER CORPORATION 441,202 11,260 ZIMMER HOLDINGS INCORPORATED + 792,704 4,649,182 ----------- METAL MINING - 1.62% 14,500 NEWMONT MINING CORPORATION 704,845 ----------- MISCELLANEOUS RETAIL - 5.20% 21,500 WAL-MART STORES INCORPORATED 1,140,575 30,720 WALGREEN COMPANY 1,117,594 2,258,169 ----------- NON-DEPOSITORY CREDIT INSTITUTIONS - 1.90% 17,120 AMERICAN EXPRESS COMPANY 825,698 ----------- OIL & GAS EXTRACTION - 1.38% 7,374 APACHE CORPORATION 598,031 ----------- PETROLEUM REFINING & RELATED INDUSTRIES - 1.81% 31,260 SUNCOR ENERGY INCORPORATED 783,376 ----------- 42 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST GROWTH FUND - ------------------------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE PRINTING, PUBLISHING & ALLIED INDUSTRIES - 1.70% 16,617 VIACOM INCORPORATED CLASS B $ 737,462 ----------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 2.52% 11,060 GOLDMAN SACHS GROUP INCORPORATED 1,091,954 ----------- WHOLESALE TRADE NON-DURABLE GOODS - 3.58% 12,990 CARDINAL HEALTH INCORPORATED 794,469 20,340 SYSCO CORPORATION 757,258 1,551,727 ----------- TOTAL COMMON STOCK (COST $36,953,711) 43,089,954 ----------- SHORT-TERM INVESTMENTS - 0.64% PRINCIPAL INTEREST RATE MATURITY DATE REPURCHASE AGREEMENTS - 0.64% $275,000 GOLDMAN SACHS & COMPANY - 102% COLLATERALIZED BY U.S. GOVERNMENT SECURITIES 0.83 01/02/2004 275,000 ----------- TOTAL SHORT-TERM INVESTMENTS (COST $275,000) 275,000 ----------- TOTAL INVESTMENTS IN SECURITIES (COST $37,228,711) * 99.96% $43,364,954 OTHER ASSETS AND LIABILITIES, NET 0.04 18,830 ------ ----------- Total Net Assets 100.00% $43,383,784 ------ ----------- + NON-INCOME EARNINGS SECURITIES. * COST FOR FEDERAL INCOME TAX PURPOSES IS $37,314,146 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $6,831,504 GROSS UNREALIZED DEPRECIATION $ (780,696) ---------- NET UNREALIZED APPRECIATION (DEPRECIATION) 6,050,808 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 43 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST INTERNATIONAL EQUITY FUND - ------------------------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCK - 96.94% AUSTRALIA - 4.08% 16,800 AMCOR LIMITED (RUBBER & MISCELLANEOUS PLASTICS PRODUCTS) $ 104,554 23,800 BHP BILLITON LIMITED (OIL & GAS EXTRACTION) 218,592 18,600 BHP BILLITON LIMITED ADR (OIL & GAS EXTRACTION) 339,636 7,700 NEWS CORPORATION LIMITED (PRINTING, PUBLISHING & ALLIED INDUSTRIES) 69,561 4,600 NEWS CORPORATION LIMITED ADR (PRINTING, PUBLISHING & ALLIED INDUSTRIES) 166,060 898,403 ----------- BRAZIL - 0.55% 4,900 UNIBANCO UNIAO DE BANCOS BRASILEIROS SA ADR (DEPOSITORY INSTITUTIONS) 122,255 ----------- CANADA - 2.42% 3,500 CANADIAN NATIONAL RAILWAY COMPANY (RAILROAD TRANSPORTATION) 222,093 2,600 ENCANA CORPORATION (OIL & GAS EXTRACTION) 102,612 4,040 LOBLAW COMPANIES LIMITED (FOOD STORES) 208,839 533,544 ----------- DENMARK - 0.52% 16 A P MOLLER - MAERSK A S (LOCAL & SUB-TRANSIT & INTERURBAN HIGHWAY PASS TRANPORTATION) 115,464 ----------- FINLAND - 2.17% 17,410 NOKIA OYJ (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 301,073 13,120 STORA ENSO OYJ (PAPER & ALLIED PRODUCTS) 176,743 477,816 ----------- FRANCE - 10.86% 2,600 ACCOR SA (METAL MINING) 117,734 5,300 ALCATEL SA (COMMUNICATIONS) + 68,255 7,810 ARCELOR SA (PRIMARY METAL INDUSTRIES) 136,143 2,160 AVENTIS SA (CHEMICALS & ALLIED PRODUCTS) 142,765 10,500 AXA (INSURANCE CARRIERS) 224,754 3,400 BNP PARIBAS SA (DEPOSITORY INSTITUTIONS) 214,087 3,400 BOUYGUES SA (ENGINEERING CONSTRUCTION) 118,880 2,100 BUSINESS OBJECTS SA ADR (BUSINESS SERVICES) + 72,807 570 CASINO GUICHARD-PERRACHON SA (FOOD STORES) 55,433 4,700 CREDIT AGRICOLE SA (DEPOSITORY INSTITUTIONS) 112,224 5,700 FRANCE TELECOM SA (COMMUNICATIONS) + 162,919 700 LVMH MOET HENNESSY LOUIS VUITTON SA (CONSUMER SERVICES) 50,946 2,230 PEUGEOT SA (AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS) 113,638 1,200 SANOFI-SYNTHELABO SA (CHEMICALS & ALLIED PRODUCTS) 90,363 7,700 TOTAL SA ADR (OIL & GAS EXTRACTION) 712,327 2,393,275 ----------- GERMANY - 6.92% 800 ALTANA AG (MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL) 48,083 2,540 BAYERISCHE MOTOREN WERKE AG (AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS) 117,741 16,600 DEUTSCHE TELEKOM AG (COMMUNICATIONS) + 303,817 3,800 E.ON AG (ELECTRIC, GAS & SANITARY SERVICES) 248,672 1,736 SAP AG (BUSINESS SERVICES) 291,559 44 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST INTERNATIONAL EQUITY FUND - ------------------------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE GERMANY (continued) 4,340 SIEMENS AG (WHOLESALE TRADE NON-DURABLE GOODS) $ 347,616 8,300 T-ONLINE INTERNATIONAL AG (BUSINESS SERVICES) + 107,833 2,980 THYSSENKRUPP AG (PRIMARY METAL INDUSTRIES) 58,901 1,524,222 ----------- HONG KONG - 0.56% 15,000 SUNG HUNG KAI PROPERTIES LIMITED (REAL ESTATE) 124,137 ----------- IRELAND - 1.47% 6,800 ANGLO IRISH BANK CORPORATION PLC (DEPOSITORY INSTITUTIONS) 107,301 11,247 BANK OF IRELAND PLC (DEPOSITORY INSTITUTIONS) 153,213 500 DEPFA BANK PLC (DEPOSITORY INSTITUTIONS) 63,131 323,645 ----------- ITALY - 3.57% 9,500 BANCO POPOLARE DI VERONA E NOVARA SCRL (DEPOSITORY INSTITUTIONS) 160,810 3,900 ENI SPA ADR (OIL & GAS EXTRACTION) 370,422 6,945 MEDIASET SPA (COMMUNICATIONS) 82,520 10,500 SNAM RETE GAS SPA (OIL & GAS EXTRACTION) 44,500 23,600 UNICREDITO ITALIANO SPA (DEPOSITORY INSTITUTIONS) 127,407 785,659 ----------- JAPAN - 23.66% 3,000 CANON INCORPORATED (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 139,685 7,480 CANON INCORPORATED ADR (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 356,347 7,000 DAIWA HOUSE INDUSTRY COMPANY LIMITED (BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS) 74,461 2,300 FANUC LIMITED (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 137,781 39 JAPAN TELECOM HOLDINGS COMPANY LIMITED (COMMUNICATIONS) 104,442 9,400 JFE HOLDINGS INCORPORATED (PRIMARY METAL INDUSTRIES) 256,555 5,600 KAO CORPORATION (CHEMICALS & ALLIED PRODUCTS) 113,912 1,200 KEYENCE CORPORATION (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 252,944 59,000 KOMATSU LIMITED (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 374,359 50 MITSUBISHI TOKYO FINANCIAL GROUP INCORPORATED (DEPOSITORY INSTITUTIONS) 390,035 10,000 MITSUI FUDOSAN COMPANY LIMITED (REAL ESTATE) 90,324 35,600 NISSAN MOTOR COMPANY LIMITED (AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS) 406,591 32,060 NOMURA HOLDINGS INCORPORATED (SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES) 545,950 73 NTT DOCOMO INCORPORATED (COMMUNICATIONS) 165,522 6,814 RICOH COMPANY LIMITED (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 134,474 2,800 RINNAI CORPORATION (BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS) 66,492 14,400 SHARP CORPORATION (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 227,213 5,100 SHIN-ETSU CHEMICAL COMPANY LIMITED (CHEMICALS & ALLIED PRODUCTS) 208,435 500 SMC CORPORATION (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 62,238 5,600 TOYOTA MOTOR CORPORATION ADR (TRANSPORTATION EQUIPMENT) 385,000 150 UFJ HOLDINGS INCORPORATED (DEPOSITORY INSTITUTIONS) 720,817 5,213,577 ----------- 45 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST INTERNATIONAL EQUITY FUND - ------------------------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE KOREA (SOUTH) - 0.28% 600 SAMSUNG ELECTRONICS (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) ! $ 61,813 ----------- MEXICO - 0.86% 3,878 CEMEX SA DE CV (STONE, CLAY, GLASS & CONCRETE PRODUCTS) 101,603 102,700 GRUPO FINANCIERO BBVA BANCOMER SA DE CV SERIES B (FINANCIAL SERVICES) + 87,737 189,340 ----------- NETHERLANDS - 5.61% 3,500 ASM HOLDING NV (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) + 69,400 2,300 EUROPEAN AERONAUTIC DEFENCE AND SPACE COMPANY (TRANSPORTATION BY AIR) 54,686 6,800 ING GROEP NV (FINANCIAL SERVICES) 158,592 20,000 KONINKLIJKE (ROYAL) KPN NV (COMMUNICATIONS) + 154,390 17,700 KONINKLIJKE (ROYAL) PHILIPS ELECTRONICS NV NY SHARES (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 514,893 5,400 ROYAL DUTCH PETROLEUM COMPANY (PETROLEUM REFINING & RELATED INDUSTRIES) 284,712 1,236,673 ----------- PORTUGAL - 0.39% 33,000 ELECTRICIDADE DE PORTUGAL SA (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 86,995 ----------- SPAIN - 0.81% 5,800 BANCO SANTANDER CENTRAL HISPANO SA (DEPOSITORY INSTITUTIONS) 68,696 5,600 REPSOL YPF SA (OIL & GAS EXTRACTION) 109,203 177,899 ----------- SWEDEN - 1.29% 4,500 AB SKF CLASS B (PRIMARY METAL INDUSTRIES) 173,864 4,600 HENNES & MAURITZ AB CLASS B (APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS) 109,321 283,185 ----------- SWITZERLAND - 10.67% 14,900 ADECCO SA ADR (MISCELLANEOUS SERVICES) 240,039 2,100 COMPAGNIE FINANCIERE RICHEMONT AG (GENERAL MERCHANDISE STORES) 50,431 5,100 CREDIT SUISSE GROUP (NON-DEPOSITORY CREDIT INSTITUTIONS) 186,598 2,370 HOLCIM LIMITED (BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS) 110,380 6,300 NESTLE SA ADR (FOOD & KINDRED PRODUCTS) 393,511 10,000 NOVARTIS AG ADR (CHEMICALS & ALLIED PRODUCTS) 458,900 160 SGS SOCIETE GENERALE DE SURVEILLANCE HOLDING SA (BUSINESS SERVICES) 100,392 10,300 STMICROELECTRONICS NV NY SHARES (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 278,203 2,200 SWISS REINSURANCE (INSURANCE CARRIERS) 148,534 5,600 UBS AG (FINANCIAL SERVICES) 383,521 2,350,509 ----------- TAIWAN - 0.42% 9,100 TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED ADR (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) + 93,184 ----------- 46 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST INTERNATIONAL EQUITY FUND - ------------------------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE UNITED KINGDOM - 19.83% 35,500 BARCLAYS PLC (DEPOSITORY INSTITUTIONS) $ 316,641 5,600 BP PLC ADR (PETROLEUM REFINING & RELATED INDUSTRIES) 276,360 10,000 BRITISH SKY BROADCASTING PLC (COMMUNICATIONS) + 125,848 35,700 CENTRICA PLC (ELECTRIC, GAS & SANITARY SERVICES) 134,847 43,400 COMPASS GROUP PLC (EATING & DRINKING PLACES) 295,233 3,300 DIAGEO PLC ADR (FOOD & KINDRED PRODUCTS) 174,438 8,800 GLAXOSMITHKLINE PLC ADR (CHEMICALS & ALLIED PRODUCTS) 410,256 38,700 HSBC HOLDINGS PLC (DEPOSITORY INSTITUTIONS) 608,270 11,400 RECKITT BENCKISER PLC (CHEMICALS & ALLIED PRODUCTS) 257,955 12,600 RIO TINTO PLC (METAL MINING) 348,039 9,000 ROYAL BANK OF SCOTLAND GROUP PLC (DEPOSITORY INSTITUTIONS) 265,194 21,800 SMITH & NEPHEW PLC (CHEMICALS & ALLIED PRODUCTS) 183,127 22,600 TESCO PLC (FOOD & KINDRED PRODUCTS) 104,279 228,800 VODAFONE GROUP PLC (COMMUNICATIONS) 567,279 3,800 VODAFONE GROUP PLC ADR (COMMUNICATIONS) 95,152 20,900 WPP GROUP PLC (COMMUNICATIONS) 205,217 4,368,135 ----------- TOTAL COMMON STOCK (COST $17,607,045) 21,359,730 ----------- SHORT-TERM INVESTMENTS - 3.83% MUTUAL FUND - 3.83% 844,111 WELLS FARGO MONEY MARKET TRUST ~ 844,111 ----------- TOTAL SHORT-TERM INVESTMENTS (COST $844,111) 844,111 ----------- TOTAL INVESTMENTS IN SECURITIES (COST $18,451,156) * 100.77% $22,203,841 OTHER ASSETS AND LIABILITIES, NET (0.77) (170,406) ------ ----------- Total Net Assets 100.00% $22,033,435 ------ ----------- + NON-INCOME EARNING SECURITIES. ! SECURITIES THAT MAY BE RESOLD TO "QUALIFIED INSTITUTIONAL BUYERS" UNDER RULE 144A OR SECURITIES OFFERED PERSUANT TO SECTION 4(2) OF THE SECURITIES ACT OF 1933, AS AMENDED. ~ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND DOES NOT PAY AN INVESTMENT ADVISORY FEE FOR SUCH INVESTMENTS. * COST FOR FEDERAL INCOME TAX PURPOSES IS $18,998,504 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $3,783,174 GROSS UNREALIZED DEPRECIATION (577,837) ---------- NET UNREALIZED APPRECIATION (DEPRECIATION) $3,205,337 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 47 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST LARGE COMPANY GROWTH FUND - ------------------------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCK - 97.85% APPAREL & ACCESSORY STORES - 2.59% 55,700 KOHLS CORPORATION + $ 2,503,158 ----------- BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS - 8.14% 35,200 FASTENAL COMPANY 1,757,888 84,500 HOME DEPOT INCORPORATED 2,998,905 56,300 LOWE'S COMPANIES INCORPORATED 3,118,457 7,875,250 ----------- BUSINESS SERVICES - 24.89% 20,000 AUTOMATIC DATA PROCESSING INCORPORATED 792,200 7,600 DST SYSTEMS INCORPORATED + 317,376 92,800 EBAY INCORPORATED + 5,993,952 118,000 FIRST DATA CORPORATION 4,848,620 70,000 FISERV INCORPORATED + 2,765,700 33,900 IMS HEALTH INCORPORATED 842,754 212,200 MICROSOFT CORPORATION 5,843,988 49,900 SUNGARD DATA SYSTEMS INCORPORATED + 1,382,729 35,200 VERITAS SOFTWARE CORPORATION + 1,308,032 24,095,351 ----------- CHEMICALS & ALLIED PRODUCTS - 8.72% 64,100 AMGEN INCORPORATED + 3,961,380 126,850 PFIZER INCORPORATED 4,481,610 8,442,990 ----------- DEPOSITORY INSTITUTIONS - 1.17% 21,800 STATE STREET CORPORATION 1,135,344 ----------- EDUCATIONAL SERVICES - 1.30% 18,500 APOLLO GROUP INCORPORATED CLASS A + 1,258,000 ----------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 9.60% 202,000 INTEL CORPORATION 6,504,400 164,000 NOKIA OYJ ADR 2,788,000 9,292,400 ----------- ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES - 3.77% 98,050 PAYCHEX INCORPORATED 3,647,460 ----------- GENERAL MERCHANDISE STORES - 0.90% 24,400 FAMILY DOLLAR STORES INCORPORATED 875,472 ----------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 10.20% 208,000 CISCO SYSTEMS INCORPORATED + 5,052,320 95,500 DELL INCORPORATED + 3,243,180 122,500 EMC CORPORATION + 1,582,700 9,878,200 ----------- 48 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST LARGE COMPANY GROWTH FUND - ------------------------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE INSURANCE CARRIERS - 4.83% 70,475 AMERICAN INTERNATIONAL GROUP INCORPORATED $ 4,671,083 ----------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 5.95% 118,575 MEDTRONIC INCORPORATED 5,763,931 ----------- MISCELLANEOUS RETAIL - 2.35% 42,800 WAL-MART STORES INCORPORATED 2,270,540 ----------- PERSONAL SERVICES - 2.69% 52,000 CINTAS CORPORATION 2,606,760 ----------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 9.45% 274,750 CHARLES SCHWAB CORPORATION 3,253,040 59,675 GOLDMAN SACHS GROUP INCORPORATED 5,891,713 9,144,753 ----------- WHOLESALE TRADE NON-DURABLE GOODS - 1.30% 20,600 CARDINAL HEALTH INCORPORATED 1,259,896 ----------- TOTAL COMMON STOCK (COST $101,673,942) 94,720,588 ----------- SHORT-TERM INVESTMENTS - 3.07% MUTUAL FUND - 3.07% 2,967,106 WELLS FARGO MONEY MARKET TRUST ~ 2,967,106 ----------- TOTAL SHORT-TERM INVESTMENTS (COST $2,967,106) 2,967,106 ----------- TOTAL INVESTMENTS IN SECURITIES (COST $104,641,048) * 100.92% $97,687,694 OTHER ASSETS AND LIABILITIES, NET (0.92) (885,823) ------ ----------- Total Net Assets 100.00% $96,801,871 ------ ----------- + NON-INCOME EARNING SECURITIES. ~ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND DOES NOT PAY AN INVESTMENT ADVISORY FEE FOR SUCH INVESTMENTS. * COST FOR FEDERAL INCOME TAX PURPOSES IS $105,925,266 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $ 10,119,642 GROSS UNREALIZED DEPRECIATION (18,357,214) ------------ NET UNREALIZED APPRECIATION (DEPRECIATION) $ (8,237,572) THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 49 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST MONEY MARKET FUND - ------------------------------------------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE CERTIFICATES OF DEPOSIT - 3.68% 1,000,000 NORDEA BANK FINLAND NEW YORK 1.34% ^ 10/08/2004 $ 999,692 2,000,000 UNICREDITO ITALIANO SPA 1.13 ^ 04/19/2004 2,000,030 TOTAL CERTIFICATES OF DEPOSIT (COST $2,999,722) 2,999,722 ----------- COMMERCIAL PAPER - 46.97% 2,500,000 AQUINAS FUNDING LLC ! 1.12 ^ 04/05/2004 2,492,689 2,500,000 DAIMLERCHRYSLER REVOLVING AUTO CONDUIT LLC 1.10 ^ 01/26/2004 2,498,167 2,000,000 DEN NORSKE BANK ASA 1.11 ^ 02/09/2004 1,997,657 2,500,000 EUREKA SECURITIZATION INCORPORATED ! 1.10 ^ 01/22/2004 2,498,472 2,500,000 GALAXY FUNDING INCORPORATED ! 1.15 ^ 06/03/2004 2,487,781 2,400,000 HOLDENBY CAPITAL COMPANY LLC ! 1.12 ^ 03/03/2004 2,395,445 2,500,000 LEGACY CAPITAL LLC ! 1.12 ^ 02/20/2004 2,496,189 2,500,000 LEXINGTON PARKER CAPITAL CORPORATION ! 1.14 ^ 02/27/2004 2,495,567 2,500,000 NATEXIS BANQUES POPULAIRES US FINANCE COMPANY LLC 1.17 ^ 04/14/2004 2,491,631 2,500,000 NATIONWIDE BUILDING SOCIETY 1.10 ^ 02/12/2004 2,496,868 2,500,000 NETWORK RAIL COMMERCIAL PAPER FINANCE PLC ! 1.10 ^ 02/17/2004 2,496,486 2,500,000 NIEUW AMSTERDAM RECEIVABLES ! 1.16 ^ 06/09/2004 2,487,192 1,500,000 NORTHERN ROCK PLC 1.13 ^ 02/11/2004 1,498,117 2,500,000 PERRY III FUNDING CORPORATION ! 1.13 ^ 03/03/2004 2,495,213 2,500,000 REGENCY MARKETS NUMBER 1 LLC ! 1.11 ^ 01/20/2004 2,498,612 2,500,000 SPINTAB-SWEDMORTGAGE AB ! 1.10 ^ 03/11/2004 2,494,681 TOTAL COMMERCIAL PAPER (COST $38,320,767) 38,320,767 ----------- EXTENDABLE BONDS - 3.68% 2,000,000 GENERAL ELECTRIC CAPITAL CORPORATION+/- 1.25 01/07/2005 2,001,923 1,000,000 NORTHERN ROCK PLC!+/- 1.18 12/09/2004 1,000,000 TOTAL EXTENDABLE BONDS (COST $3,001,923) 3,001,923 ----------- MEDIUM TERM NOTES - 18.44% 1,000,000 ABBEY NATIONAL TREASURY SERVICES PLC+/- 1.15 06/10/2004 1,000,000 2,500,000 AEGON NV+/- 1.16 07/15/2004 2,499,353 2,500,000 BANK ONE CORPORATION+/- 1.27 05/28/2004 2,501,170 2,500,000 BEAR STEARNS COMPANIES INCORPORATED+/- 1.62 10/22/2004 2,509,482 1,000,000 BELFORD US CAPITAL COMPANY!+/- 1.17 03/08/2004 1,000,000 2,500,000 CC (USA) INCORPORATED!+/- 1.12 07/01/2004 2,499,629 2,000,000 LIBERTY LIGHTHOUSE US CAPITAL COMPANY!+/- 1.13 07/19/2004 1,999,892 1,000,000 M&I MARSHALL & ILSLEY BANK 5.25 12/15/2004 1,035,339 TOTAL MEDIUM TERM NOTES (COST $15,044,865) 15,044,865 ----------- US GOVERNMENT AGENCY SECURITIES - 1.23% FEDERAL HOME LOAN BANK - 1.23% 1,000,000 FHLB 3.38 05/14/2004 1,007,410 TOTAL US GOVERNMENT AGENCY SECURITIES (COST $1,007,410) 1,007,410 ----------- 50 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST MONEY MARKET FUND - ------------------------------------------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE PROMISSORY NOTE - 1.23% 500,000 GOLDMAN SACHS GROUP INCORPORATED+/- 1.21% 07/26/2004 $ 500,000 500,000 GOLDMAN SACHS GROUP INCORPORATED+/- 1.21 07/26/2004 500,000 TOTAL PROMISSORY NOTE (COST $1,000,000) 1,000,000 ----------- REPURCHASE AGREEMENTS - 22.38% 2,000,000 BANC AMERICA SECURITIES LLC 1.03 01/02/2004 2,000,000 5,000,000 GOLDMAN SACHS AND COMPANY 1.02 01/02/2004 5,000,000 2,000,000 JP MORGAN CHASE COMPANY 1.04 01/02/2004 2,000,000 6,257,000 JP MORGAN CHASE COMPANY 1.03 01/02/2004 6,257,000 3,000,000 SOLOMON SMITH BARNEY HOLDINGS INCORPORATED 1.04 01/02/2004 3,000,000 TOTAL REPURCHASE AGREEMENTS (COST $18,257,000) 18,257,000 ----------- TIME DEPOSITS - 2.45% 2,000,000 ROYAL BANK OF SCOTLAND PLC 1.13 01/02/2004 2,000,000 TOTAL TIME DEPOSITS (COST $2,000,000) 2,000,000 ----------- TOTAL INVESTMENTS IN SECURITIES (COST $81,631,687) * 100.06% $81,631,687 OTHER ASSETS AND LIABILITIES, NET (0.06) (48,660) ------ ----------- Total Net Assets 100.00% $81,583,027 ------ ----------- ! SECURITIES THAT MAY BE RESOLD TO "QUALIFIED INSTITUTIONAL BUYERS" UNDER RULE 144A OR SECURITIES OFFERED PERSUANT TO SECTION 4 (2) OF THE SECURITIES ACT OF 1933, AS AMENDED. +/- VARIABLE RATE SECURITIES. ^ ZERO COUPON/STEPPED COUPON BOND. INTEREST RATE PRESENTED IS YIELD TO MATURITY. * COST FOR FEDERAL INCOME TAX PURPOSES IS SUBSTANTIALLY THE SAME AS FOR FINANCIAL REPORTING PURPOSES. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 51 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST SMALL CAP GROWTH FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCK - 94.31% AMUSEMENT & RECREATION SERVICES - 0.84% 28,100 Multimedia Games Incorporated + $ 1,154,910 ------------ APPAREL & ACCESSORY STORES - 1.12% 51,481 FINISH LINE INCORPORATED CLASS A + 1,542,885 ------------ AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS - 1.30% 95,373 CSK AUTO CORPORATION + 1,790,151 ------------ BUSINESS SERVICES - 24.89% 48,663 ACTIVISION INCORPORATED + 885,667 58,500 ADMINISTAFF INCORPORATED + 1,016,730 49,300 AKAMAI TECHNOLOGIES INCORPORATED + 529,975 144,300 ALLIANCE DATA SYSTEMS CORPORATION + 3,994,224 110,100 AQUANTIVE INCORPORATED + 1,128,525 35,600 ARBITRON INCORPORATED + 1,485,232 55,300 ASCENTIAL SOFTWARE CORPORATION + 1,433,929 85,400 ASK JEEVES INCORPORATED + 1,547,448 145,897 AUTOBYTEL INCORPORATED + 1,324,745 17,200 CERTEGY INCORPORATED 564,160 43,700 CHECKFREE CORPORATION + 1,208,305 203,999 CNET NETWORKS INCORPORATED + 1,391,273 70,100 DIGITAL INSIGHT CORPORATION + 1,745,490 58,862 GTECH HOLDINGS CORPORATION 2,913,080 58,600 MACROMEDIA INCORPORATED + 1,045,424 44,900 MAGMA DESIGN AUTOMATION INCORPORATED + 1,047,966 72,500 MANHATTAN ASSOCIATES INCORPORATED + 2,003,900 1 NETIQ CORPORATION + 13 49,122 OPEN SOLUTIONS INCORPORATED + 863,074 63,758 QUEST SOFTWARE INCORPORATED + 905,364 33,500 SAFENET INCORPORATED + 1,030,795 92,400 SUPPORTSOFT INCORPORATED + 1,215,060 85,500 SYKES ENTERPRISES INCORPORATED + 731,880 80,300 TIBCO SOFTWARE INCORPORATED + 543,631 59,969 TRANSACTION SYSTEMS ARCHITECTS INCORPORATED CLASS A + 1,357,098 147,050 UNITED ONLINE INCORPORATED + 2,468,969 34,381,957 ------------ CHEMICALS & ALLIED PRODUCTS - 9.52% 98,665 ANDRX CORPORATION + 2,371,907 21,300 ANGIOTECH PHARMACEUTICALS INCORPORATED + 979,800 103,575 BIOMARIN PHARMACEUTICAL INCORPORATED + 804,674 93,500 ILEX ONCOLOGY INCORPORATED + 1,986,875 138,419 INSPIRE PHARMACEUTICALS INCORPORATED + 1,960,013 48,900 MEDICINES COMPANY + 1,440,594 21,400 NEUROCRINE BIOSCIENCES INCORPORATED + 1,167,156 52 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST SMALL CAP GROWTH FUND - ------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE CHEMICALS & ALLIED PRODUCTS (continued) 48,137 NPS Pharmaceuticals Incorporated + $ 1,479,731 41,807 UNITED THERAPEUTICS CORPORATION + 959,471 13,150,221 ------------ COMMUNICATIONS - 8.56% 59,300 AMERICAN TOWER CORPORATION CLASS A + 641,626 94,170 CUMULUS MEDIA INCORPORATED CLASS A + 2,071,740 50,100 GRAY TELEVISION INCORPORATED 757,512 36,300 LIN TV CORPORATION CLASS A + 936,903 97,800 NET2PHONE INCORPORATED + 665,040 169,906 NEXTEL PARTNERS INCORPORATED CLASS A + 2,285,236 21,500 NII HOLDINGS INCORPORATED CLASS B + 1,604,545 148,300 RADIO ONE INCORPORATED CLASS D + 2,862,190 11,824,792 ------------ CONSTRUCTION SPECIAL TRADE CONTRACTORS - 0.83% 39,691 CHICAGO BRIDGE & IRON COMPANY NV 1,147,070 ------------ DEPOSITORY INSTITUTIONS - 2.77% 40,598 BANKATLANTIC BANCORP INCORPORATED CLASS A 771,362 16,000 EAST WEST BANCORP INCORPORATED 858,880 24,000 SOUTH FINANCIAL GROUP INCORPORATED 668,640 26,178 TEXAS REGIONAL BANCSHARES INCORPORATED CLASS A 968,586 18,157 UNITED BANKSHARES INCORPORATED 566,498 3,833,966 ------------ EDUCATIONAL SERVICES - 2.00% 33,800 LEARNING TREE INTERNATIONAL INCORPORATED + 587,782 75,500 SYLVAN LEARNING SYSTEMS INCORPORATED + 2,173,645 2,761,427 ------------ ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 5.60% 105,597 ARTISAN COMPONENTS INCORPORATED + 2,164,739 101,500 GRAFTECH INTERNATIONAL LIMITED + 1,370,250 94,535 INTEGRATED DEVICE TECHNOLOGY INCORPORATED + 1,623,166 136,832 MCDATA CORPORATION CLASS A + 1,304,009 29,225 VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES INCORPORATED + 1,276,840 7,739,004 ------------ ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES - 5.66% 79,595 CIPHERGEN BIOSYSTEMS INCORPORATED + 894,648 134,454 KROLL INCORPORATED + 3,495,804 38,300 LECG CORPORATION + 876,687 64,794 RESOURCES CONNECTION INCORPORATED + 1,769,524 22,309 THE ADVISORY BOARD COMPANY + 778,807 7,815,470 ------------ 53 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST SMALL CAP GROWTH FUND - ------------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE HEALTH SERVICES - 1.56% 37,200 ACCREDO HEALTH INCORPORATED + $ 1,175,892 36,700 COVANCE INCORPORATED + 983,560 2,159,452 ------------ HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES - 2.81% 37,600 FAIRMONT HOTELS & RESORTS INCORPORATED 1,020,464 66,700 STATION CASINOS INCORPORATED 2,043,021 29,500 WYNN RESORTS LIMITED + 826,295 3,889,780 ------------ INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 2.00% 31,000 ACTUANT CORPORATION CLASS A + 1,122,200 125,900 GRANT PRIDECO INCORPORATED + 1,639,218 2,761,418 ------------ INSURANCE AGENTS, BROKERS & SERVICE - 0.45% 22,700 NATIONAL FINANCIAL PARTNERS CORPORATION 625,385 ------------ INSURANCE CARRIERS - 1.49% 36,751 CENTENE CORPORATION + 1,029,396 49,767 SCOTTISH RE GROUP LIMITED 1,034,158 2,063,554 ------------ MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 4.35% 36,167 COOPER COMPANIES INCORPORATED 1,704,551 169,800 PERKINELMER INCORPORATED 2,898,486 12,339 RESPIRONICS INCORPORATED + 556,365 41,600 THERASENSE INCORPORATED + 844,480 6,003,882 ------------ MISCELLANEOUS RETAIL - 3.10% 147,200 MARVEL ENTERPRISES INCORPORATED + 4,284,992 ------------ MOTION PICTURES - 2.08% 127,300 MACROVISION CORPORATION + 2,875,707 ------------ MOTOR FREIGHT TRANSPORTATION & WAREHOUSING - 1.49% 25,500 CNF INCORPORATED 864,450 60,800 SIRVA INCORPORATED + 1,188,032 2,052,482 ------------ NON-DEPOSITORY CREDIT INSTITUTIONS - 0.75% 28,400 WESTCORP 1,038,020 ------------ OIL & GAS EXTRACTION - 0.78% 21,900 PATINA OIL & GAS CORPORATION 1,072,881 ------------ SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 2.46% 32,016 JEFFERIES GROUP INCORPORATED 1,057,168 160,100 KNIGHT TRADING GROUP INCORPORATED + 2,343,864 3,401,032 ------------ 54 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST SMALL CAP GROWTH FUND - ------------------------------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE TRANSPORTATION BY AIR - 1.79% 197,200 MESA AIR GROUP INCORPORATED + $ 2,468,944 ------------ TRANSPORTATION EQUIPMENT - 1.70% 33,400 BRUNSWICK CORPORATION 1,063,122 14,470 POLARIS INDUSTRIES INCORPORATED 1,281,753 2,344,875 ------------ TRANSPORTATION SERVICES - 1.54% 105,571 PACER INTERNATIONAL INCORPORATED + 2,134,646 ------------ WHOLESALE TRADE NON-DURABLE GOODS - 0.95% 54,707 PRIORITY HEALTHCARE CORPORATION CLASS B + 1,318,986 ------------ WHOLESALE TRADE-DURABLE GOODS - 1.92% 13,632 HUGHES SUPPLY INCORPORATED 676,420 104,800 INSIGHT ENTERPRISES INCORPORATED + 1,970,240 2,646,660 ------------ TOTAL COMMON STOCK (COST $113,789,132) 130,284,549 ------------ SHORT-TERM INVESTMENTS - 6.15% MUTUAL FUND - 6.15% 8,503,249 WELLS FARGO MONEY MARKET TRUST ~ 8,503,249 ------------ TOTAL SHORT-TERM INVESTMENTS (COST $8,503,249) 8,503,249 ------------ TOTAL INVESTMENTS IN SECURITIES (COST $122,292,381) * 100.46% $138,787,798 OTHER ASSETS AND LIABILITIES, NET (0.46) (636,475) ------ ------------ Total Net Assets 100.00% $138,151,323 ------ ------------ + NON-INCOME EARNING SECURITIES. ~ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND DOES NOT PAY AN INVESTMENT ADVISORY FEE FOR SUCH INVESTMENTS. * COST FOR FEDERAL INCOME TAX PURPOSES IS $122,706,546 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $17,888,409 GROSS UNREALIZED DEPRECIATION (1,807,157) ----------- NET UNREALIZED APPRECIATION (DEPRECIATION) $16,081,252 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 55 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST TOTAL RETURN BOND FUND - ------------------------------------------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE ASSET BACKED SECURITIES - 6.21% $ 250,000 AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST SERIES 2003-4 CLASS A 1.69% 01/15/2009 $ 245,263 250,000 BANK ONE AUTO SECURITIZATION TRUST SERIES 2003-1 CLASS A3 1.82 09/20/2007 248,452 255,000 BANK ONE ISSUANCE TRUST SERIES 2003-A7 CLASS A7 3.35 03/15/2011 253,829 355,000 CITIBANK CREDIT CARD ISSUANCE TRUST SERIES 2000-A1 CLASS A1 6.90 10/15/2007 384,629 565,000 CITIBANK CREDIT CARD ISSUANCE TRUST SERIES 2000-A3 CLASS A3 6.88 11/16/2009 643,368 275,000 CITIBANK CREDIT CARD ISSUANCE TRUST SERIES 2003-A7 CLASS A7 4.15 07/07/2017 255,290 500,000 FORD CREDIT AUTO OWNER TRUST SERIES 2003-A CLASS A3A 2.20 07/17/2006 503,226 360,000 MBNA CREDIT CARD MASTER NOTE TRUST SERIES 2001-A1 CLASS A1 5.75 10/15/2008 387,173 230,000 MBNA MASTER CREDIT CARD TRUST USA SERIES 2000-L CLASS A 6.50 04/15/2010 257,878 85,000 PECO ENERGY TRANSITION TRUST SERIES 2000-A CLASS A3 7.63 03/01/2010 99,943 50,000 TOYOTA AUTO RECEIVABLES OWNER TRUST SERIES 2002-C CLASS A3 2.65 11/15/2006 50,449 470,000 USAA AUTO OWNER TRUST SERIES 2003-1 CLASS A3 1.58 06/15/2007 467,666 621,000 VOLKSWAGEN AUTO LOAN ENHANCED TRUST SERIES 2003-1 CLASS A4 1.93 01/20/2010 608,448 TOTAL ASSET BACKED SECURITIES (COST $4,461,880) 4,405,614 ----------- COLLATERALIZED MORTGAGE OBLIGATIONS - 1.02% 650,000 NOMURA ASSET SECURITIES CORPORATION SERIES 1998-D6 CLASS A1B 6.59 03/15/2030 727,382 TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (COST $750,727) 727,382 ----------- CORPORATE BONDS & NOTES - 23.33% CHEMICALS & ALLIED PRODUCTS - 0.57% 400,000 WYETH 5.50 02/01/2014 404,566 ----------- COMMUNICATIONS - 5.99% 95,000 AT&T CORPORATION 8.75 11/15/2031 111,014 275,000 AT&T WIRELESS SERVICES INCORPORATED 8.13 05/01/2012 323,387 240,000 BRITISH SKY BROADCASTING PLC 8.20 07/15/2009 285,722 110,000 BRITISH TELECOMMUNICATIONS PLC 8.38 12/15/2010 133,856 45,000 BRITISH TELECOMMUNICATIONS PLC 8.88 12/15/2030 58,842 130,000 CITIZENS COMMUNICATIONS 9.25 05/15/2011 153,692 414,000 COMCAST CABLE COMMUNICATIONS HOLDINGS INCORPORATED 8.38 03/15/2013 506,549 176,000 DEUTSCHE TELEKOM INTERNATIONAL FINANCE BV 8.75 06/15/2030 224,827 189,000 FRANCE TELECOM 8.45 03/01/2006 211,112 145,000 INTELSAT LIMITED ! 6.50 11/01/2013 151,292 125,000 LIBERTY MEDIA CORPORATION 7.88 07/15/2009 144,797 255,000 SPRINT CAPITAL CORPORATION 8.38 03/15/2012 297,789 70,000 SPRINT CAPITAL CORPORATION 8.75 03/15/2032 82,697 220,000 TELECOM ITALIA CAPITAL ! 5.25 11/15/2013 220,438 185,000 TELEFONOS DE MEXICO SA ! 4.50 11/19/2008 185,281 645,000 TIME WARNER INCORPORATED 6.88 05/01/2012 725,822 225,000 VERIZON GLOBAL FUNDING CORPORATION 7.75 12/01/2030 264,310 170,000 VODAFONE GROUP PLC 3.95 01/30/2008 172,712 4,254,139 ----------- DEPOSITORY INSTITUTIONS - 2.41% 425,000 BANK OF AMERICA CORPORATION 3.25 08/15/2008 419,837 205,000 BANK OF AMERICA CORPORATION 5.88 02/15/2009 224,618 105,000 CAPITAL ONE BANK 5.75 09/15/2010 111,072 56 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST TOTAL RETURN BOND FUND - ------------------------------------------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE DEPOSITORY INSTITUTIONS (continued) $ 140,000 PNC FUNDING CORPORATION 5.25% 11/15/2015 $ 138,738 160,000 ROYAL BANK OF SCOTLAND GROUP 5.00 11/12/2013 160,566 210,000 UNION PLANTERS CORPORATION 4.38 12/01/2010 209,136 135,000 US BANCORP SERIES MTNN 3.13 03/15/2008 133,129 140,000 WACHOVIA BANK NA 5.00 08/15/2015 138,534 170,000 ZIONS BANCORPORATION 6.00 09/15/2015 178,246 1,713,876 ----------- ELECTRIC, GAS & SANITARY SERVICES - 1.20% 140,000 AMERICAN ELECTRIC POWER COMPANY INCORPORATED 5.25 06/01/2015 137,486 80,000 AMERICAN ELECTRIC POWER SERIES C 5.38 03/15/2010 83,820 60,000 DUKE ENERGY CORPORATION 6.25 01/15/2012 64,895 45,000 PROGRESS ENERGY INCORPORATED 7.75 03/01/2031 52,433 320,000 SOUTHERN CALIFORNIA EDISON 8.00 02/15/2007 366,000 145,000 VIRGINIA ELECTRIC AND POWER 4.50 12/15/2010 146,201 850,835 ----------- FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 0.70% 380,000 LOCKHEED MARTIN CORPORATION 8.50 12/01/2029 497,942 ----------- FINANCIAL SERVICES - 0.50% 115,000 CITIGROUP INCORPORATED 7.25 10/01/2010 134,039 230,000 GENERAL ELECTRIC CAPITAL CORPORATION SERIES MTN 3.25 06/15/2009 223,713 357,752 ----------- FOOD & KINDRED PRODUCTS - 0.85% 165,000 BOTTLING GROUP LLC 4.63 11/15/2012 164,103 263,000 KELLOGG COMPANY SERIES B 7.45 04/01/2031 310,629 125,000 KRAFT FOODS INCORPORATED 5.25 10/01/2013 126,126 600,858 ----------- FOOD STORES - 0.38% 30,000 YUM! BRANDS INCORPORATED 7.65 05/15/2008 34,050 205,000 YUM! BRANDS INCORPORATED 7.70 07/01/2012 236,006 270,056 ----------- FOREIGN GOVERNMENT - 1.36% @ 135,000 CHILE GOVERNMENT INTERNATIONAL BOND 5.50 01/15/2013 138,848 600,000 MEXICO GOVERNMENT INTERNATIONAL BOND 8.63 03/12/2008 706,500 95,000 QUEBEC PROVINCE 7.50 09/15/2029 118,329 963,677 ----------- FORESTRY - 0.24% 155,000 WEYERHAEUSER COMPANY 6.75 03/15/2012 169,096 ----------- HEALTH SERVICES - 0.50% 140,000 HUMANA INCORPORATED 6.30 08/01/2018 147,379 190,000 MEDCO HEALTH SOLUTIONS INCORPORATED 7.25 08/15/2013 207,281 354,660 ----------- 57 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST TOTAL RETURN BOND FUND - ------------------------------------------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE HOLDING & OTHER INVESTMENT OFFICES - 0.20% $ 130,000 PEMEX PROJECT FUNDING MASTER TRUST 8.63% 02/01/2022 $ 143,975 ----------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 0.48% 330,000 TYCO INTERNATIONAL GROUP SA ! 6.00 11/15/2013 339,900 ----------- METAL MINING - 0.27% 190,000 BHP BILLITON FINANCE USA BV 4.80 04/15/2013 190,484 ----------- MISCELLANEOUS MANUFACTURING INDUSTRIES - 0.56% 320,000 GENERAL ELECTRIC COMPANY 5.00 02/01/2013 323,627 60,000 TRW INCORPORATED 7.75 06/01/2029 71,939 395,566 ----------- MOTION PICTURES - 0.18% 100,000 TIME WARNER ENTERTAINMENT COMPANIES LP 8.38 07/15/2033 126,979 ----------- NON-DEPOSITORY CREDIT INSTITUTIONS - 3.16% 85,000 CITIGROUP INCORPORATED 6.00 10/31/2033 84,991 140,000 FORD MOTOR CREDIT COMPANY+/- 3.04 10/25/2004 141,322 135,000 FORD MOTOR CREDIT COMPANY 7.38 10/28/2009 148,252 265,000 FORD MOTOR CREDIT COMPANY 7.00 10/01/2013 279,490 100,000 FORD MOTOR CREDIT COMPANY+/- 1.06 08/15/2048 94,508 805,000 GENERAL MOTORS ACCEPTANCE CORPORATION 6.88 09/15/2011 867,087 180,000 HOUSEHOLD FINANCE CORPORATION 4.75 07/15/2013 175,067 150,000 MBNA AMERICA BANK NA SERIES BKNT 5.38 01/15/2008 159,487 165,000 SLM CORPORATION SERIES MTNA 5.00 10/01/2013 163,949 130,000 TOYOTA MOTOR CREDIT CORPORATION 4.35 12/15/2010 131,774 2,245,927 ----------- OIL & GAS EXTRACTION - 0.43% 170,000 ENCANA CORPORPORATION 4.75 10/15/2013 167,598 130,000 HALLIBURTON COMPANY ! 5.50 10/15/2010 135,956 303,554 ----------- PETROLEUM REFINING & RELATED INDUSTRIES - 0.18% 105,000 ALBERTA ENERGY COMPANY LIMITED 7.38 11/01/2031 124,694 ----------- PIPELINES, EXCEPT NATURAL GAS - 0.30% 190,000 CENTERPOINT ENERGY RESOURCES CORPORATION ! 7.88 04/01/2013 215,098 ----------- PRIMARY METAL INDUSTRIES - 0.23% 160,000 ALCAN INCORPORATED 5.20 01/15/2014 161,725 ----------- PRINTING, PUBLISHING & ALLIED INDUSTRIES - 0.19% 125,000 VIACOM INCORPORATED 5.63 05/01/2007 135,149 ----------- RAILROAD TRANSPORTATION - 1.11% 370,000 CANADIAN NATIONAL RAILWAY COMPANY 7.38 10/15/2031 436,518 325,000 UNION PACIFIC CORPORATION 6.13 01/15/2012 352,175 788,693 ----------- 58 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST TOTAL RETURN BOND FUND - ------------------------------------------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE REAL ESTATE - 0.55% $ 135,000 HEALTH CARE PROPERTY INVESTORS INCORPORATED 6.00% 03/01/2015 $ 139,349 250,000 HEALTH CARE REAL ESTATE INVESTMENT TRUST 6.00 11/15/2013 252,654 392,003 ----------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 0.42% 295,000 MERRILL LYNCH & COMPANY 5.30 09/30/2015 296,192 ----------- TRANSPORTATION EQUIPMENT - 0.37% 145,000 DAIMLER CHRYSLER NA HOLDING CORPORATION 6.50 11/15/2013 152,744 90,000 NORTHROP GRUMMAN CORPORATION 7.75 02/15/2031 109,440 262,184 ----------- TOTAL CORPORATE BONDS & NOTES (COST $16,340,892) 16,559,580 ----------- US GOVERNMENT AGENCY SECURITIES - 55.69% FEDERAL HOME LOAN MORTGAGE CORPORATION - 34.26% 551,000 FHLMC 4.88 11/15/2013 556,956 206,615 FHLMC #A10303 6.00 05/01/2033 213,607 343,064 FHLMC #A10419 6.00 06/01/2033 354,674 565,431 FHLMC #A10420 6.00 06/01/2033 584,566 372,726 FHLMC #A10421 6.00 06/01/2033 385,340 1,328,707 FHLMC #A10422 6.00 06/01/2033 1,373,673 162,494 FHLMC #A15108 5.50 10/01/2033 164,540 23,776 FHLMC #A15179 6.00 11/01/2033 24,580 240,000 FHLMC #A16472 5.50 12/01/2033 243,022 59,000 FHLMC #A16557 5.50 12/01/2033 59,743 198,000 FHLMC #A16676 5.50 12/01/2033 200,493 190,000 FHLMC #A16677 5.50 12/01/2033 192,393 180,000 FHLMC #A16821 5.50 12/01/2033 182,267 93,000 FHLMC #A16839 5.50 01/01/2034 94,160 63,000 FHLMC #A16888 5.50 01/01/2034 63,786 184,000 FHLMC #A16916 5.50 11/01/2033 186,317 190,000 FHLMC #A16917 5.50 11/01/2033 192,392 227,000 FHLMC #A16918 5.50 11/01/2033 229,858 173,000 FHLMC #A16947 5.50 12/01/2033 175,178 56,000 FHLMC #A17082 5.50 12/01/2033 56,705 753,755 FHLMC #C90583 6.00 10/01/2022 782,997 1,343,863 FHLMC #E97090 5.00 06/01/2013 1,375,050 434,647 FHLMC #E99204 4.50 09/01/2013 436,625 534,573 FHLMC #E99965 4.50 10/01/2013 537,007 1,837,738 FHLMC #G11470 4.50 11/01/2013 1,846,104 1,161,562 FHLMC #G11479 5.00 11/01/2013 1,192,982 1,366,000 FHLMC #M80874 5.00 12/01/2010 1,403,289 1,036,401 FHLMC SERIES 2498 CLASS DW 4.80 02/15/2029 1,045,833 925,337 FHLMC SERIES 2500 CLASS MA 4.90 02/15/2029 934,514 1,564,039 FHLMC SERIES 2509 CLASS CA 5.00 09/15/2015 1,598,045 785,004 FHLMC SERIES 2513 CLASS QK 5.00 08/15/2028 793,663 321,125 FHLMC SERIES 2516 CLASS AH 5.00 01/15/2016 328,428 795,828 FHLMC SERIES 2527 CLASS BN 5.00 02/15/2016 814,235 59 WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 - -------------------------------------------------------------------------------- VARIABLE TRUST TOTAL RETURN BOND FUND - ------------------------------------------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE FEDERAL HOME LOAN MORTGAGE CORPORATION (Continued) $ 331,863 FHLMC SERIES 2545 CLASS HT 4.50% 04/15/2018 $ 335,452 185,835 FHLMC SERIES 2714 CLASS CV 5.00 05/15/2023 179,222 1,445,000 FHLMC SERIES 2723 CLASS QC 4.50 10/15/2023 1,488,237 1,322,000 FHLMC TBA %% 5.00 01/01/2011 1,355,050 2,308,000 FHLMC TBA %% 5.50 01/01/2034 2,335,408 24,316,391 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION - 19.10% 440,000 FNMA 4.63 10/15/2013 436,901 722,632 FNMA #254765 6.50 05/01/2033 755,861 917,129 FNMA #254914 4.50 09/01/2013 934,842 839,289 FNMA #254958 4.50 10/01/2013 855,498 1,194,706 FNMA #254989 4.50 11/01/2013 1,217,779 1,144,034 FNMA #702022 6.50 05/01/2033 1,196,641 800,737 FNMA #737202 6.00 08/01/2033 828,086 125,362 FNMA #743673 6.50 11/01/2033 131,126 48,165 FNMA #743965 6.50 11/01/2033 50,380 26,248 FNMA #751568 6.00 12/01/2033 27,144 21,396 FNMA #754308 6.50 12/01/2033 22,380 1,002,185 FNMA SERIES 2002-18 CLASS PB 5.50 09/25/2013 1,012,381 890,338 FNMA SERIES 2002-55 CLASS KY 4.75 04/25/2028 896,403 373,800 FNMA SERIES 2002-93 CLASS TB 4.50 02/25/2018 377,627 1,587,312 FNMA SERIES 2003-13 CLASS GA 4.50 06/25/2032 1,621,422 650,000 FNMA SERIES 2003-92 CLASS VH 5.00 02/25/2019 628,465 741,000 FNMA TBA %% 5.50 01/01/2034 750,494 1,762,000 FNMA TBA %% 6.00 02/01/2034 1,814,860 13,558,290 ----------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 2.33% 1,594,000 GNMA TBA %% 6.00 01/01/2034 1,656,265 ----------- TOTAL US GOVERNMENT AGENCY SECURITIES (COST $39,515,960) 39,530,946 ----------- US TREASURY SECURITIES - 15.63% US TREASURY BONDS - 12.14% 3,021,000 US TREASURY BOND 12.00 08/15/2013 4,173,937 1,669,000 US TREASURY BOND 7.13 02/15/2023 2,083,056 2,093,000 US TREASURY BOND 6.13 11/15/2027 2,359,694 8,616,687 ----------- US TREASURY NOTES - 3.49% 1,419,000 US TREASURY NOTE 3.38 12/15/2008 1,428,645 1,054,000 US TREASURY NOTE 4.25 11/15/2013 1,052,847 2,481,492 ----------- TOTAL US TREASURY SECURITIES (COST $11,374,347) 11,098,179 ----------- 60 PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2003 WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VARIABLE TRUST TOTAL RETURN BOND FUND - ------------------------------------------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE SHORT-TERM INVESTMENTS - 8.25% REPURCHASE AGREEMENTS - 8.25% $ 5,857,000 GREENWICH CAPITAL - 102% COLLATERALIZED BY US GOVERNMENT SECURITIES 1.05% 01/02/2004 $ 5,857,000 ----------- TOTAL SHORT-TERM INVESTMENTS (COST $5,857,000) 5,857,000 ----------- TOTAL INVESTMENTS IN SECURITIES (COST $78,300,806) * 110.13% $78,178,701 OTHER ASSETS AND LIABILITIES, NET (10.13) (7,190,842) ------ ----------- Total Net Assets 100.00% $70,987,859 ------ ----------- ! SECURITIES THAT MAY BE RESOLD TO "QUALIFIED INSTITUTIONAL BUYERS" UNDER RULE 144A OR SECURITIES OFFERED PERSUANT TO SECTION 4 (2) OF THE SECURITIES ACT OF 1933, AS AMENDED. @ FOREIGN BOND PRINCIPAL IS DENOMINATED IN US DOLLARS EXCEPT AS INDICATED PARENTHETICALLY. +/- VARIABLE RATE SECURITIES. %% SECURITY ISSUED ON A WHEN-ISSUED (TBA) BASIS, TOTAL COST $7,866,844. (SEE NOTE 2) * COST FOR FEDERAL INCOME TAX PURPOSES IS $78,426,446 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $ 518,056 GROSS UNREALIZED DEPRECIATION $(765,801) --------- NET UNREALIZED APPRECIATION (DEPRECIATION) (247,745) THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 61 WELLS FARGO VARIABLE TRUST FUNDS STATEMENTS OF ASSETS AND LIABILITIES -- DECEMBER 31, 2003 - ------------------------------------------------------------------------------------------------------------------------------------ ASSET ALLOCATION EQUITY INCOME EQUITY VALUE FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS INVESTMENTS: IN SECURITIES, AT MARKET VALUE .................................. $234,395,481 $ 98,969,271 $28,506,821 INVESTMENTS IN AFFILIATES ....................................... 54,794,975 3,949,700 0 REPURCHASE AGREEMENTS ........................................... 0 0 896,000 ------------ ------------ ----------- TOTAL INVESTMENT AT MARKET VALUE (SEE COST BELOW) ................. 289,190,456 102,918,971 29,402,821 ------------ ------------ ----------- CASH ............................................................ 50,000 50,000 51,413 VARIATION MARGIN RECEIVABLE ON FUTURES CONTRACTS ................ 188,388 0 0 RECEIVABLE FOR FUND SHARES ISSUED ............................... 239,063 130,790 2,729 RECEIVABLE FOR INVESTMENTS SOLD ................................. 5,568 0 0 RECEIVABLES FOR DIVIDENDS AND INTEREST .......................... 1,417,686 203,697 56,545 ------------ ------------ ----------- TOTAL ASSETS ....................................................... 291,091,161 103,303,458 29,513,508 ------------ ------------ ----------- LIABILITIES PAYABLE FOR FUND SHARES REDEEMED ................................ 97,504 35,520 5,315 PAYABLE FOR INVESTMENTS PURCHASED ............................... 0 0 0 DIVIDENDS PAYABLE ............................................... 0 0 0 PAYABLE TO INVESTMENT ADVISOR AND AFFILIATES (NOTE 3) ........... 176,949 59,785 13,275 PAYABLE TO THE TRUSTEES AND DISTRIBUTOR ......................... 64,128 24,036 8,008 ACCRUED EXPENSES AND OTHER LIABILITIES .......................... 29,655 26,688 4,933 ------------ ------------ ----------- TOTAL LIABILITIES .................................................. 368,236 146,029 31,531 ------------ ------------ ----------- TOTAL NET ASSETS ................................................... $290,722,925 $103,157,429 $29,481,977 ============ ============ =========== NET ASSETS CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ PAID-IN CAPITAL ................................................. $299,750,471 $100,660,264 $36,342,657 UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ...................... 3,923 0 0 UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS ........... 356,078 (4,741,326) (8,348,749) NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS, FOREIGN CURRENCIES AND TRANSLATION OF ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES ............................. (12,409,634) 7,238,491 1,488,069 NET UNREALIZED APPRECIATION (DEPRECIATION) OF FUTURES ........... 3,022,087 0 0 ------------ ------------ ----------- TOTAL NET ASSETS ................................................... $290,722,925 $103,157,429 $29,481,977 ============ ============ =========== COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS ...................................................... $290,722,925 $103,157,429 $29,481,977 SHARES OUTSTANDING .............................................. 23,230,463 6,908,592 3,535,015 NET ASSET VALUE AND OFFERING PRICE PER SHARE .................... $ 12.51 $ 14.93 $ 8.34 ------------ ------------ ----------- INVESTMENTS AT COST ................................................ $301,600,090 $ 95,680,480 $27,914,752 ============ ============ =========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 62 WELLS FARGO VARIABLE TRUST FUNDS STATEMENTS OF ASSETS AND LIABILITIES -- DECEMBER 31, 2003 - ------------------------------------------------------------------------------------------------------------------------------------ GROWTH INTERNATIONAL LARGE COMPANY FUND EQUITY FUND GROWTH FUND - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS INVESTMENTS: IN SECURITIES, AT MARKET VALUE .................................. $43,089,954 $21,359,730 $ 94,720,588 INVESTMENTS IN AFFILIATES ....................................... 0 844,111 2,967,106 REPURCHASE AGREEMENTS ........................................... 275,000 0 0 ----------- ----------- ------------ TOTAL INVESTMENT AT MARKET VALUE (SEE COST BELOW) ................. 43,364,954 22,203,841 97,687,694 ----------- ----------- ------------ CASH ............................................................ 51,521 50,001 49,999 VARIATION MARGIN RECEIVABLE ON FUTURES CONTRACTS ................ 0 0 0 RECEIVABLE FOR FUND SHARES ISSUED ............................... 10,557 227 235,777 RECEIVABLE FOR INVESTMENTS SOLD ................................. 0 61,501 0 RECEIVABLES FOR DIVIDENDS AND INTEREST .......................... 22,009 27,687 24,786 ----------- ----------- ------------ TOTAL ASSETS ....................................................... 43,449,041 22,343,257 97,998,256 ----------- ----------- ------------ LIABILITIES PAYABLE FOR FUND SHARES REDEEMED ................................ 13,737 7,926 110,216 PAYABLE FOR INVESTMENTS PURCHASED ............................... 0 243,898 998,638 DIVIDENDS PAYABLE ............................................... 0 0 0 PAYABLE TO INVESTMENT ADVISOR AND AFFILIATES (NOTE 3) ........... 21,333 8,151 52,477 PAYABLE TO THE TRUSTEES AND DISTRIBUTOR ......................... 10,868 6,348 21,408 ACCRUED EXPENSES AND OTHER LIABILITIES .......................... 19,319 43,499 13,646 ----------- ----------- ------------ TOTAL LIABILITIES .................................................. 65,257 309,822 1,196,385 ----------- ----------- ------------ TOTAL NET ASSETS ................................................... $43,383,784 $22,033,435 $ 96,801,871 =========== =========== ============ NET ASSETS CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ PAID-IN CAPITAL ................................................. $61,973,730 $20,022,592 $128,871,818 UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ...................... 0 39,687 0 UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS ........... (24,726,189) (1,781,590) (25,116,593) NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS, FOREIGN CURRENCIES AND TRANSLATION OF ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES ............................. 6,136,243 3,752,746 (6,953,354) NET UNREALIZED APPRECIATION (DEPRECIATION) OF FUTURES ........... 0 0 0 ----------- ----------- ------------ TOTAL NET ASSETS ................................................... $43,383,784 $22,033,435 $ 96,801,871 =========== =========== ============ COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS ...................................................... $43,383,784 $22,033,435 $ 96,801,871 SHARES OUTSTANDING .............................................. 3,366,489 2,913,051 11,260,534 NET ASSET VALUE AND OFFERING PRICE PER SHARE .................... $ 12.89 $ 7.56 $ 8.60 ----------- ----------- ------------ INVESTMENTS AT COST ................................................ $37,228,711 $18,451,156 $104,641,048 =========== =========== ============ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. WELLS FARGO VARIABLE TRUST FUNDS STATEMENTS OF ASSETS AND LIABILITIES -- DECEMBER 31, 2003 - ------------------------------------------------------------------------------------------------------------------------------------ MONEY MARKET SMALL CAP TOTAL RETURN FUND GROWTH FUND BOND FUND - ----------------------------------------------------------------------------------------------------------------------------------- ASSETS INVESTMENTS: IN SECURITIES, AT MARKET VALUE .................................. $63,374,687 $130,284,549 $72,321,701 INVESTMENTS IN AFFILIATES ....................................... 0 8,503,249 0 REPURCHASE AGREEMENTS ........................................... 18,257,000 0 5,857,000 ----------- ------------ ----------- TOTAL INVESTMENT AT MARKET VALUE (SEE COST BELOW) ................. 81,631,687 138,787,798 78,178,701 ----------- ------------ ----------- CASH ............................................................ 50,193 50,006 942 VARIATION MARGIN RECEIVABLE ON FUTURES CONTRACTS ................ 0 0 0 RECEIVABLE FOR FUND SHARES ISSUED ............................... 987 26,651 185,197 RECEIVABLE FOR INVESTMENTS SOLD ................................. 0 545,630 16,505,654 RECEIVABLES FOR DIVIDENDS AND INTEREST .......................... 42,055 22,243 3,567,604 ----------- ------------ ----------- TOTAL ASSETS ....................................................... 81,724,922 139,432,328 98,438,098 ----------- ------------ ----------- LIABILITIES PAYABLE FOR FUND SHARES REDEEMED ................................ 0 135,914 125,364 PAYABLE FOR INVESTMENTS PURCHASED ............................... 0 997,155 27,249,518 DIVIDENDS PAYABLE ............................................... 28,115 0 6,531 PAYABLE TO INVESTMENT ADVISOR AND AFFILIATES (NOTE 3) ........... 31,774 99,821 32,847 PAYABLE TO THE TRUSTEES AND DISTRIBUTOR ......................... 20,311 29,829 17,620 ACCRUED EXPENSES AND OTHER LIABILITIES .......................... 61,695 18,286 18,359 ----------- ------------ ----------- TOTAL LIABILITIES .................................................. 141,895 1,281,005 27,450,239 ----------- ------------ ----------- TOTAL NET ASSETS ................................................... $81,583,027 $138,151,323 $70,987,859 =========== ============ =========== NET ASSETS CONSIST OF: - ----------------------------------------------------------------------------------------------------------------------------------- PAID-IN CAPITAL ................................................. $81,582,968 $152,996,253 $66,649,465 UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ...................... 38 0 0 UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS ........... 21 (31,340,347) 4,460,486 NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS, FOREIGN CURRENCIES AND TRANSLATION OF ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES ............................. 0 16,495,417 (122,092) NET UNREALIZED APPRECIATION (DEPRECIATION) OF FUTURES ........... 0 0 0 ----------- ------------ ----------- TOTAL NET ASSETS ................................................... $81,583,027 $138,151,323 $70,987,859 =========== ============ =========== COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ...................................................... $81,583,027 $138,151,323 $70,987,859 SHARES OUTSTANDING .............................................. 81,585,824 20,033,921 6,659,336 NET ASSET VALUE AND OFFERING PRICE PER SHARE .................... $ 1.00 $ 6.90 $ 10.66 ----------- ------------ ----------- INVESTMENTS AT COST ................................................ $81,631,687 $122,292,381 $78,300,806 =========== ============ =========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 63 WELLS FARGO VARIABLE TRUST FUNDS STATEMENTS OF OPERATIONS -- FOR THE YEAR ENDED DECEMBER 31, 2003 - ------------------------------------------------------------------------------------------------------------------------------------ ASSET ALLOCATION EQUITY INCOME EQUITY VALUE FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME DIVIDENDS (1) ................................................... $ 2,303,330 $ 2,169,888 $ 665,645 DIVIDENDS FROM AFFILIATED SECURITIES ............................ 284,216 23,843 16 INTEREST ........................................................ 3,734,214 5,222 6,979 INCOME ON MORTGAGE DOLLAR ROLLS ................................. 0 0 0 ----------- ----------- ----------- TOTAL INVESTMENT INCOME ............................................ 6,321,760 2,198,953 672,640 ----------- ----------- ----------- EXPENSES ADVISORY FEES ................................................... 1,316,108 470,575 141,048 ADMINSTRATION FEES .............................................. 380,058 135,195 40,898 CUSTODY FEES .................................................... 47,858 16,983 5,129 ACCOUNTING FEES ................................................. 34,660 25,993 22,667 DISTRIBUTION FEES (NOTE 3) ...................................... 598,231 212,291 64,113 AUDIT FEES ...................................................... 18,550 16,445 15,442 LEGAL FEES ...................................................... 3,511 1,355 603 REGISTRATION FEES ............................................... 752 752 752 SHAREHOLDER REPORTS ............................................. 21,058 11,693 6,317 TRUSTEES' FEES .................................................. 6,385 6,385 6,385 OTHER FEES AND EXPENSES ......................................... 8,421 4,172 3,445 ----------- ----------- ----------- TOTAL EXPENSES ..................................................... 2,435,592 901,839 306,799 ----------- ----------- ----------- LESS: WAIVED FEES AND REIMBURSED EXPENSES (NOTE 3) .................... (42,527) (52,501) (50,302) NET EXPENSES .................................................... 2,393,065 849,338 256,497 ----------- ----------- ----------- NET INVESTMENT INCOME (LOSS) ....................................... 3,928,695 1,349,615 416,143 ----------- ----------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS - ------------------------------------------------------------------------------------------------------------------------------------ NET REALIZED GAIN (LOSS) FROM: SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION . 913,311 (3,780,757) (1,737,897) FUTURE TRANSACTIONS ............................................. 9,803,503 0 0 ----------- ----------- ----------- NET REALIZED GAIN (LOSS) FROM INVESTMENTS .......................... 10,716,814 (3,780,757) (1,737,897) ----------- ----------- ----------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF: SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION . 28,727,162 22,472,304 7,314,821 FORWARD FOREIGN CURRENCY CONTRACTS .............................. 0 0 0 FUTURE TRANSACTIONS ............................................. 5,614,434 0 0 ----------- ----------- ----------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS 34,341,596 22,472,304 7,314,821 ----------- ----------- ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ............. 45,058,410 18,691,547 5,576,924 ----------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .... $48,987,105 $20,041,162 $ 5,993,067 ----------- ----------- ----------- (1) NET OF FOREIGN WITHHOLDING TAXES OF ........................ $ 0 $ 8,199 $ 2,295 ----------- ----------- ----------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 64 WELLS FARGO VARIABLE TRUST FUNDS STATEMENTS OF OPERATIONS -- FOR THE YEAR ENDED DECEMBER 31, 2003 - ------------------------------------------------------------------------------------------------------------------------------------ GROWTH INTERNATIONAL LARGE COMPANY FUND EQUITY FUND GROWTH FUND - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME DIVIDENDS (1) ................................................... $ 230,403 $ 221,898 $ 416,340 DIVIDENDS FROM AFFILIATED SECURITIES ............................ 0 5,160 9,602 INTEREST ........................................................ 5,023 4,782 6,113 INCOME ON MORTGAGE DOLLAR ROLLS ................................. 0 0 0 ----------- ---------- ----------- TOTAL INVESTMENT INCOME ............................................ 235,426 231,840 432,055 ----------- ---------- ----------- EXPENSES ADVISORY FEES ................................................... 229,336 102,877 438,528 ADMINSTRATION FEES .............................................. 66,544 22,293 127,016 CUSTODY FEES .................................................... 8,339 13,717 15,947 ACCOUNTING FEES ................................................. 23,565 18,305 25,706 DISTRIBUTION FEES (NOTE 3) ...................................... 104,244 34,292 199,331 AUDIT FEES ...................................................... 17,046 9,528 15,964 LEGAL FEES ...................................................... 1,004 201 1,556 REGISTRATION FEES ............................................... 752 752 752 SHAREHOLDER REPORTS ............................................. 9,297 5,484 11,424 TRUSTEES' FEES .................................................. 6,385 6,385 6,385 OTHER FEES AND EXPENSES ......................................... 3,500 3,318 3,670 ----------- ---------- ----------- TOTAL EXPENSES ..................................................... 470,012 217,152 846,279 ----------- ---------- ----------- LESS: WAIVED FEES AND REIMBURSED EXPENSES (NOTE 3) .................... (53,039) (79,904) (48,955) NET EXPENSES .................................................... 416,973 137,248 797,324 ----------- ---------- ----------- NET INVESTMENT INCOME (LOSS) ....................................... (181,547) 94,592 (365,269) ----------- ---------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS - ------------------------------------------------------------------------------------------------------------------------------------ NET REALIZED GAIN (LOSS) FROM: SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION . (1,031,345) (595,589) (3,342,593) FUTURE TRANSACTIONS ............................................. 0 0 0 ----------- ---------- ----------- NET REALIZED GAIN (LOSS) FROM INVESTMENTS .......................... (1,031,345) (595,589) (3,342,593) ----------- ---------- ----------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF: SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION . 9,941,477 4,897,114 22,216,838 FORWARD FOREIGN CURRENCY CONTRACTS .............................. 0 (62) 0 FUTURE TRANSACTIONS ............................................. 0 0 0 ----------- ---------- ----------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS 9,941,477 4,897,052 22,216,838 ----------- ---------- ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ............. 8,910,132 4,301,463 18,874,245 ----------- ---------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .... $ 8,728,585 $4,396,055 $18,508,976 ----------- ---------- ----------- (1) NET OF FOREIGN WITHHOLDING TAXES OF ........................ $ 777 $ 29,970 $ 6,107 ----------- ---------- ----------- WELLS FARGO VARIABLE TRUST FUNDS STATEMENTS OF OPERATIONS -- FOR THE YEAR ENDED DECEMBER 31, 2003 - ------------------------------------------------------------------------------------------------------------------------------------ MONEY MARKET SMALL CAP TOTAL RETURN FUND GROWTH FUND BOND FUND - -------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME DIVIDENDS (1) ................................................... $ 0 $ 214,877 $ 64,726 DIVIDENDS FROM AFFILIATED SECURITIES ............................ 0 25,338 15,277 INTEREST ........................................................ 1,159,025 27,276 3,401,710 INCOME ON MORTGAGE DOLLAR ROLLS ................................. 0 0 67,374 --------- ----------- ----------- TOTAL INVESTMENT INCOME ............................................ 1,159,025 267,491 3,549,087 --------- ----------- ----------- EXPENSES ADVISORY FEES ................................................... 369,334 699,459 314,826 ADMINSTRATION FEES .............................................. 146,677 148,675 111,354 CUSTODY FEES .................................................... 18,467 18,652 13,992 ACCOUNTING FEES ................................................. 26,402 26,479 25,153 DISTRIBUTION FEES (NOTE 3) ...................................... 230,834 233,153 174,903 AUDIT FEES ...................................................... 15,442 15,442 15,442 LEGAL FEES ...................................................... 1,806 1,305 1,305 REGISTRATION FEES ............................................... 529 752 752 SHAREHOLDER REPORTS ............................................. 6,402 7,520 7,600 TRUSTEES' FEES .................................................. 6,385 6,385 6,385 OTHER FEES AND EXPENSES ......................................... 3,362 3,812 4,454 --------- ----------- ----------- TOTAL EXPENSES ..................................................... 825,640 1,161,634 676,166 --------- ----------- ----------- LESS: WAIVED FEES AND REIMBURSED EXPENSES (NOTE 3) .................... (133,305) (42,440) (46,423) NET EXPENSES .................................................... 692,335 1,119,194 629,743 --------- ----------- ----------- NET INVESTMENT INCOME (LOSS) ....................................... 466,690 (851,703) 2,919,344 --------- ----------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS - -------------------------------------------------------------------------------------------------------------------------------- NET REALIZED GAIN (LOSS) FROM: SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION . 193 16,854,689 4,447,903 FUTURE TRANSACTIONS ............................................. 0 0 0 --------- ----------- ----------- NET REALIZED GAIN (LOSS) FROM INVESTMENTS .......................... 193 16,854,689 4,447,903 --------- ----------- ----------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF: SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION . 0 18,010,741 (1,771,550) FORWARD FOREIGN CURRENCY CONTRACTS .............................. 0 0 21,104 FUTURE TRANSACTIONS ............................................. 0 0 0 --------- ----------- ----------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS 0 18,010,741 (1,750,446) --------- ----------- ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ............. 193 34,865,430 2,697,457 --------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .... $ 466,883 $34,013,727 $ 5,616,801 --------- ----------- ----------- (1) NET OF FOREIGN WITHHOLDING TAXES OF ........................ $ 0 $ 569 $ 0 --------- ----------- ----------- 65 WELLS FARGO VARIABLE TRUST FUNDS STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ ASSET ALLOCATION FUND EQUITY INCOME FUND -------------------------------------- ------------------------------------- FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 DECEMBER 31, 2003 DECEMBER 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS BEGINNING NET ASSETS ......................... $212,573,927 $255,938,295 $ 78,400,251 $106,199,246 OPERATIONS: NET INVESTMENT INCOME (LOSS) ................. 3,928,695 4,441,221 1,349,615 1,370,421 NET REALIZED GAIN (LOSS) ON SALE OF INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS .......... 10,716,814 (244,374) (3,780,757) 1,917,609 NET REALIZED GAIN (LOSS) ON FOREIGN CURRENCY CONTRACTS .................................. 0 0 0 0 NET REALIZED GAIN (LOSS) ON FUTURES TRANSACTIONS ............................... 0 (8,131,719) 0 0 NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS AND TRANSLATION OF ASSETS AND LIABILITIES IN FOREIGN CURRENCY, OPTIONS AND SHORT SALES .................... 34,341,596 (27,107,163) 22,472,304 (23,907,607) NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF FINANCIAL FUTURES AND FORWARD TRANSACTIONS ....................... 0 (2,616,147) 0 0 ------------ ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .............................. 48,987,105 (33,658,182) 20,041,162 (20,619,577) ============ ============ ============ ============ DISTRIBUTIONS TO SHAREHOLDERS: NET INVESTMENT INCOME ........................ (3,913,604) (4,776,116) (1,355,375) (1,465,554) NET REALIZED GAIN ON SALES OF INVESTMENTS .... (15,130) (2,363,104) (2,166,678) 0 CAPITAL SHARES TRANSACTIONS: PROCEEDS FROM SHARES SOLD. ................... 63,415,699 40,530,085 30,443,643 23,505,303 REINVESTMENT OF DIVIDENDS .................... 3,928,667 7,139,219 3,522,052 1,465,554 COST OF SHARES REDEEMED ...................... (34,253,739) (50,236,270) (25,727,626) (30,684,721) ------------ ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS .............. 33,090,627 (2,566,966) 8,238,069 (5,713,864) ------------ ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS ........... 78,148,998 (43,364,368) 24,757,178 (27,798,995) ============ ============ ============ ============ NET ASSETS: ENDING NET ASSETS ............................... $290,722,925 $212,573,927 $103,157,429 $ 78,400,251 ------------ ------------ ------------ ------------ SHARES ISSUED AND REDEEMED: SHARES SOLD .................................. 5,506,041 3,594,941 2,300,201 1,697,679 SHARES ISSUED IN REINVESTMENT OF DIVIDENDS ... 342,456 646,445 261,855 111,464 SHARES REDEEMED. ............................. (3,031,046) (4,606,406) (2,016,317) (2,288,373) ------------ ------------ ------------ ------------ NET INCREASE (DECREASE) IN SHARES OUTSTANDING ... 2,817,451 (365,020) 545,739 (479,230) ------------ ------------ ------------ ------------ ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ........................ $ 3,923 $ 1,833 $ 0 $ 0 ============ ============ ============ ============ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 66 WELLS FARGO VARIABLE TRUST FUNDS STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ EQUITY VALUE FUND GROWTH FUND --------------------------------------- --------------------------------------- FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 DECEMBER 31, 2003 DECEMBER 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS BEGINNING NET ASSETS ......................... $25,124,073 $ 38,720,648 $42,644,137 $ 73,630,916 OPERATIONS: NET INVESTMENT INCOME (LOSS) ................. 416,143 371,321 (181,547) (79,534) NET REALIZED GAIN (LOSS) ON SALE OF INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS .......... (1,737,897) (3,627,221) (1,031,345) (14,614,667) NET REALIZED GAIN (LOSS) ON FOREIGN CURRENCY CONTRACTS .................................. 0 0 0 0 NET REALIZED GAIN (LOSS) ON FUTURES TRANSACTIONS ............................... 0 0 0 0 NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS AND TRANSLATION OF ASSETS AND LIABILITIES IN FOREIGN CURRENCY, OPTIONS AND SHORT SALES .................... 7,314,821 (5,902,498) 9,941,477 (2,973,458) NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF FINANCIAL FUTURES AND FORWARD TRANSACTIONS ....................... 0 0 0 0 ----------- ------------ ----------- ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .............................. 5,993,067 (9,158,398) 8,728,585 (17,667,659) =========== ============ =========== ============ DISTRIBUTIONS TO SHAREHOLDERS: NET INVESTMENT INCOME ........................ (419,582) (387,806) 0 (67,098) NET REALIZED GAIN ON SALES OF INVESTMENTS .... 0 0 0 0 CAPITAL SHARES TRANSACTIONS: PROCEEDS FROM SHARES SOLD. ................... 6,350,243 9,643,786 1,564,320 1,849,296 REINVESTMENT OF DIVIDENDS .................... 419,582 387,806 0 67,098 COST OF SHARES REDEEMED ...................... (7,985,406) (14,081,963) (9,553,258) (15,168,416) ----------- ------------ ----------- ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS .............. (1,215,581) (4,050,371) (7,988,938) (13,252,022) ----------- ------------ ----------- ------------ NET INCREASE (DECREASE) IN NET ASSETS ........... 4,357,904 (13,596,575) 739,647 (30,986,779) =========== ============ =========== ============ NET ASSETS: ENDING NET ASSETS ............................... $29,481,977 $ 25,124,073 $43,383,784 $ 42,644,137 ----------- ------------ ----------- ------------ SHARES ISSUED AND REDEEMED: SHARES SOLD .................................. 879,669 1,225,339 135,997 147,047 SHARES ISSUED IN REINVESTMENT OF DIVIDENDS ... 56,190 55,210 0 5,473 SHARES REDEEMED. ............................. (1,122,096) (1,851,580) (856,539) (1,296,120) ----------- ------------ ----------- ------------ NET INCREASE (DECREASE) IN SHARES OUTSTANDING ... (186,237) (571,031) (720,542) (1,143,600) ----------- ------------ ----------- ------------ ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ........................ $ 0 $ 0 $ 0 $ 0 =========== ============ =========== ============ WELLS FARGO VARIABLE TRUST FUNDS STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ INTERNATIONAL EQUITY FUND -------------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 - ----------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS BEGINNING NET ASSETS ......................... $ 9,315,817 $ 4,946,373 OPERATIONS: NET INVESTMENT INCOME (LOSS) ................. 94,592 50,490 NET REALIZED GAIN (LOSS) ON SALE OF INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS .......... (595,589) (1,009,844) NET REALIZED GAIN (LOSS) ON FOREIGN CURRENCY CONTRACTS .................................. 0 0 NET REALIZED GAIN (LOSS) ON FUTURES TRANSACTIONS ............................... 0 0 NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS AND TRANSLATION OF ASSETS AND LIABILITIES IN FOREIGN CURRENCY, OPTIONS AND SHORT SALES .................... 4,897,052 (861,240) NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF FINANCIAL FUTURES AND FORWARD TRANSACTIONS ....................... 0 0 ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .............................. 4,396,055 (1,820,594) =========== =========== DISTRIBUTIONS TO SHAREHOLDERS: NET INVESTMENT INCOME ........................ (50,877) (13,840) NET REALIZED GAIN ON SALES OF INVESTMENTS .... 0 0 CAPITAL SHARES TRANSACTIONS: PROCEEDS FROM SHARES SOLD. ................... 15,425,024 10,591,248 REINVESTMENT OF DIVIDENDS .................... 50,877 13,840 COST OF SHARES REDEEMED ...................... (7,103,461) (4,401,210) ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS .............. 8,372,440 6,203,878 ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS ........... 12,717,618 4,369,444 =========== =========== NET ASSETS: ENDING NET ASSETS ............................... $22,033,435 $ 9,315,817 ----------- ----------- SHARES ISSUED AND REDEEMED: SHARES SOLD .................................. 2,528,699 1,652,251 SHARES ISSUED IN REINVESTMENT OF DIVIDENDS ... 8,219 2,072 SHARES REDEEMED. ............................. (1,237,145) (700,917) ----------- ----------- NET INCREASE (DECREASE) IN SHARES OUTSTANDING ... 1,299,773 953,406 ----------- ----------- ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ........................ $ 39,687 $ 50,866 =========== =========== 67 WELLS FARGO VARIABLE TRUST FUNDS STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ LARGE COMPANY GROWTH FUND MONEY MARKET FUND -------------------------------------- -------------------------------------- FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 DECEMBER 31, 2003 DECEMBER 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS BEGINNING NET ASSETS .............................. $69,107,567 $104,888,396 $ 96,274,368 $105,359,808 OPERATIONS: NET INVESTMENT INCOME (LOSS) ...................... (365,269) (471,812) 466,690 1,247,104 NET REALIZED GAIN (LOSS) ON SALE OF INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS ... (3,342,593) (10,174,989) 193 480 NET REALIZED GAIN (LOSS) ON FOREIGN CURRENCY CONTRACTS .............................. 0 0 0 0 NET REALIZED GAIN (LOSS) ON FUTURES TRANSACTIONS .. 0 0 0 0 NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS AND TRANSLATION OF ASSETS AND LIABILITIES IN FOREIGN CURRENCY, OPTIONS AND SHORT SALES ..................................... 22,216,838 (18,800,024) 0 0 NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF FINANCIAL FUTURES AND FORWARD TRANSACTIONS ............................ 0 0 0 0 ----------- ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................................... 18,508,976 (29,446,825) 466,883 1,247,584 ----------- ------------ ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS: NET INVESTMENT INCOME ............................. 0 0 (466,690) (1,247,066) NET REALIZED GAIN ON SALES OF INVESTMENTS ......... 0 0 0 0 CAPITAL SHARES TRANSACTIONS: PROCEEDS FROM SHARES SOLD ......................... 21,803,210 15,688,780 56,934,291 56,069,482 REINVESTMENT OF DIVIDENDS ......................... 0 0 440,781 1,249,828 COST OF SHARES REDEEMED ........................... (12,617,882) (22,022,784) (72,066,606) (66,405,268) ----------- ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS .................... 9,185,328 (6,334,004) (14,691,534) (9,085,958) ----------- ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS ................ 27,694,304 (35,780,829) (14,691,341) (9,085,440) ----------- ------------ ------------ ------------ NET ASSETS: - ------------------------------------------------------------------------------------------------------------------------------------ ENDING NET ASSETS .................................... $96,801,871 $ 69,107,567 $ 81,583,027 $ 96,274,368 ----------- ------------ ------------ ------------ SHARES ISSUED AND REDEEMED: SHARES SOLD ....................................... 2,852,652 1,989,623 56,934,290 56,072,304 SHARES ISSUED IN REINVESTMENT OF DIVIDENDS ........ 0 0 440,781 1,249,828 SHARES REDEEMED ................................... (1,735,856) (2,938,753) (72,066,606) (66,405,268) ----------- ------------ ------------ ------------ NET INCREASE (DECREASE) IN SHARES OUTSTANDING ........ 1,116,796 (949,130) (14,691,535) (9,083,136) ----------- ------------ ------------ ------------ ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ........................... $ 0 $ 0 $ 38 $ 38 =========== ============ ============ ============ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 68 WELLS FARGO VARIABLE TRUST FUNDS STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ SMALL CAP GROWTH FUND TOTAL RETURN BOND FUND --------------------------------------- -------------------------------------- FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 DECEMBER 31, 2003 DECEMBER 31, 2002 - ------------------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS BEGINNING NET ASSETS .............................. $ 68,349,298 $ 57,216,449 $ 68,498,801 $ 72,920,237 OPERATIONS: NET INVESTMENT INCOME (LOSS) ...................... (851,703) (611,564) 2,919,344 4,179,579 NET REALIZED GAIN (LOSS) ON SALE OF INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS ... 16,854,689 (26,483,169) 4,447,903 914,672 NET REALIZED GAIN (LOSS) ON FOREIGN CURRENCY CONTRACTS .............................. 0 0 0 0 NET REALIZED GAIN (LOSS) ON FUTURES TRANSACTIONS .. 0 0 0 0 NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS AND TRANSLATION OF ASSETS AND LIABILITIES IN FOREIGN CURRENCY, OPTIONS AND SHORT SALES ..................................... 18,010,741 (6,352,671) (1,750,446) 12,023 NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF FINANCIAL FUTURES AND FORWARD TRANSACTIONS ............................ 0 0 0 0 ------------ ------------ ------------ ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................................... 34,013,727 (33,447,404) 5,616,801 5,106,274 ------------ ------------ ------------ ----------- DISTRIBUTIONS TO SHAREHOLDERS: NET INVESTMENT INCOME ............................. 0 0 (2,926,175) (4,180,293) NET REALIZED GAIN ON SALES OF INVESTMENTS ......... 0 0 (869,815) (117,763) CAPITAL SHARES TRANSACTIONS: PROCEEDS FROM SHARES SOLD ......................... 41,065,584 52,804,410 19,512,548 9,505,761 REINVESTMENT OF DIVIDENDS ......................... 0 0 3,806,413 4,295,347 COST OF SHARES REDEEMED ........................... (5,277,286) (8,224,157) (22,650,714) (19,030,762) ------------ ------------ ------------ ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS .................... 35,788,298 44,580,253 668,247 (5,229,654) ------------ ------------ ------------ ----------- NET INCREASE (DECREASE) IN NET ASSETS ................ 69,802,025 11,132,849 2,489,058 (4,421,436) ------------ ------------ ------------ ----------- NET ASSETS: - ------------------------------------------------------------------------------------------------------------------------------------ ENDING NET ASSETS .................................... $138,151,323 $ 68,349,298 $ 70,987,859 $ 68,498,801 ------------ ------------ ------------ ----------- SHARES ISSUED AND REDEEMED: SHARES SOLD ....................................... 6,950,431 8,329,165 1,836,777 933,382 SHARES ISSUED IN REINVESTMENT OF DIVIDENDS ........ 0 0 358,543 421,483 SHARES REDEEMED ................................... (1,017,021) (1,513,044) (2,137,437) (1,872,864) ------------ ------------ ------------ ----------- NET INCREASE (DECREASE) IN SHARES OUTSTANDING ........ 5,933,410 6,816,121 57,883 (517,999) ------------ ------------ ------------ ----------- ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ........................... $ 0 $ 0 $ 0 $ 22,575 ============ ============ ============ =========== 69 WELLS FARGO VARIABLE TRUST FUNDS FINANCIAL HIGHLIGHTS - ------------------------------------------------------------------------------------------------------------------------------------ NET REALIZED BEGINNING NET AND DIVIDENDS DISTRIBUTIONS NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET VALUE PER INCOME GAIN (LOSS) ON INVESTMENT REALIZED SHARE (LOSS) INVESTMENTS INCOME GAINS - ----------------------------------------------------------------------------------------------------------------------------------- ASSET ALLOCATION FUND JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... $10.41 0.18 2.10 (0.18) 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... $12.32 0.21 (1.78) (0.23) (0.11) JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... $13.82 0.20 (1.17) (0.20) (0.33) JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... $14.42 0.31 (0.13) (0.31) (0.47) JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... $13.45 0.27 0.97 (0.26) (0.01) EQUITY INCOME FUND - ----------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... $12.32 0.21 2.95 (0.21) (0.34) JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... $15.52 0.21 (3.19) (0.22) 0.00 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... $17.01 0.16 (1.09) (0.15) (0.41) JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... $17.09 0.17 0.21 (0.17) (0.29) JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... $16.00 0.17 1.09 (0.17) 0.00 EQUITY VALUE FUND - ----------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... $ 6.75 0.12 1.59 (0.12) 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... $ 9.02 0.10 (2.27) (0.10) 0.00 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... $ 9.70 0.06 (0.68) (0.06) 0.00 JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... $ 9.23 0.07 0.46 (0.06) 0.00 JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... $ 9.55 0.08 (0.32) (0.08) 0.00 GROWTH FUND - ----------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... $10.43 (0.05) 2.51 0.00 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... $14.08 (0.02) (3.62) (0.01) 0.00 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... $19.06 0.01 (3.65) 0.00 (1.34) JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... $24.10 0.00 (2.95) 0.00 (2.09) JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... $20.05 0.02 4.06 (0.03) 0.00 INTERNATIONAL EQUITY FUND - ----------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... $ 5.77 0.02 1.79 (0.02) 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... $ 7.50 0.02 (1.74) (0.01) 0.00 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... $ 8.94 0.02 (1.46) 0.00 0.00 JULY 3, 2000(3) TO DECEMBER 31, 2000 ...................... $10.00 0.03 (1.06) (0.03) 0.00 LARGE COMPANY GROWTH FUND - ----------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... $ 6.81 (0.03) 1.82 0.00 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... $ 9.46 (0.05) (2.60) 0.00 0.00 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... $11.96 (0.04) (2.46) 0.00 0.00 JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... $12.03 (0.04) (0.03) 0.00 0.00 SEPTEMBER 20, 1999(3) TO DECEMBER 31, 1999 ................ $10.00 (0.01) 2.04 0.00 0.00 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 70 WELLS FARGO VARIABLE TRUST FUNDS FINANCIAL HIGHLIGHTS - ------------------------------------------------------------------------------------------------------------------------------------ ENDING RATIO TO AVERAGE NET ASSSETS (ANNUALIZED) NET ASSET ------------------------------------------- RETURN VALUE PER NET INVESTMENT GROSS EXPENSES OF CAPITAL SHARE INCOME (LOSS) EXPENSES(1) WAIVED - ------------------------------------------------------------------------------------------------------------------------------------ ASSET ALLOCATION FUND JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 0.00 $12.51 1.64% 1.02% (0.02)% JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 0.00 $10.41 1.90% 1.02% (0.02)% JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 0.00 $12.32 1.64% 1.04% (0.04)% JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... 0.00 $13.82 2.19% 1.12% (0.12)% JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... 0.00 $14.42 2.05% 1.17% (0.20)% EQUITY INCOME FUND - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 0.00 $14.93 1.59% 1.06% (0.06)% JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 0.00 $12.32 1.46% 1.09% (0.09)% JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 0.00 $15.52 1.05% 1.23% (0.23)% JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... 0.00 $17.01 1.02% 1.17% (0.17)% JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... 0.00 $17.09 1.16% 1.12% (0.26)% EQUITY VALUE FUND - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 0.00 $ 8.34 1.62% 1.20% (0.20)% JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 0.00 $ 6.75 1.19% 1.27% (0.27)% JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 0.00 $ 9.02 0.55% 1.16% (0.16)% JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... 0.00 $ 9.70 0.78% 1.56% (0.56)% JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... 0.00 $ 9.23 0.96% 1.53% (0.47)% GROWTH FUND - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 0.00 $12.89 (0.44)% 1.13% (0.13)% JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 0.00 $10.43 (0.14)% 1.14% (0.14)% JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 0.00 $14.08 0.08% 1.27% (0.27)% JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... 0.00 $19.06 0.01% 1.23% (0.23)% JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... 0.00 $24.10 0.11% 1.27% (0.20)% INTERNATIONAL EQUITY FUND - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 0.00 $ 7.56 0.69% 1.59% (0.59)% JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 0.00 $ 5.77 0.71% 3.26% (2.26)% JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 0.00 $ 7.50 0.48% 7.21% (6.21)% JULY 3, 2000(3) TO DECEMBER 31, 2000 ...................... 0.00 $ 8.94 0.98% 2.40% (1.40)% LARGE COMPANY GROWTH FUND - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 0.00 $ 8.60 (0.46)% 1.06% (0.06)% JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 0.00 $ 6.81 (0.56)% 1.08% (0.08)% JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 0.00 $ 9.46 (0.47)% 1.01% (0.03)% JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... 0.00 $11.96 (0.42)% 1.43% (0.43)% SEPTEMBER 20, 1999(3) TO DECEMBER 31, 1999 ................ 0.00 $12.03 (0.47)% 1.43% (0.43)% WELLS FARGO VARIABLE TRUST FUNDS FINANCIAL HIGHLIGHTS - ------------------------------------------------------------------------------------------------------------------------------------ RATIO TO AVERAGE NET ASSSETS (ANNUALIZED) ----------------------------------------- PORTFOLIO NET ASSETS AT NET TOTAL TURNOVER END OF PERIOD EXPENSES RETURN(2) RATE (000'S OMITTED) - --------------------------------------------------------------------------------------------------------------- ASSET ALLOCATION FUND JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 1.00% 22.09% 7% $290,723 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 1.00% (12.85)% 16% $212,574 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 1.00% (6.96)% 25% $255,938 JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... 1.00% 1.02% 48% $270,278 JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... 0.97% 9.33% 30% $240,671 EQUITY INCOME FUND - --------------------------------------------------------------------------------------------------------------- JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 1.00% 26.21% 15% $103,157 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 1.00% (19.26)% 16% $ 78,400 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 1.00% (5.41)% 5% $106,199 JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... 1.00% 2.33% 4% $113,350 JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... 0.86% 7.90% 5% $127,793 EQUITY VALUE FUND - --------------------------------------------------------------------------------------------------------------- JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 1.00% 25.57% 20% $ 29,482 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 1.00% (24.09)% 98% $ 25,124 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 1.00% (6.39)% 107% $ 38,721 JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... 1.00% 5.78% 124% $ 47,013 JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... 1.06% (2.48)% 139% $ 26,567 GROWTH FUND - --------------------------------------------------------------------------------------------------------------- JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 1.00% 23.59% 58% $ 43,384 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 1.00% (25.84)% 120% $ 42,644 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 1.00% (19.21)% 50% $ 73,631 JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... 1.00% (13.60)% 67% $105,248 JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... 1.07% 20.41% 54% $128,495 INTERNATIONAL EQUITY FUND - --------------------------------------------------------------------------------------------------------------- JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 1.00% 31.46% 90% $ 22,033 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 1.00% (22.92)% 54% $ 9,316 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 1.00% (16.09)% 41% $ 4,946 JULY 3, 2000(3) TO DECEMBER 31, 2000 ...................... 1.00% (10.33)% 19% $ 1,620 LARGE COMPANY GROWTH FUND - --------------------------------------------------------------------------------------------------------------- JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 1.00% 26.28% 10% $ 96,802 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 1.00% (28.01)% 18% $ 69,108 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 0.98% (20.88)% 14% $104,888 JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... 1.00% (0.58)% 8% $117,885 SEPTEMBER 20, 1999(3) TO DECEMBER 31, 1999 ................ 1.00% 20.30% 0% $ 50,988 71 WELLS FARGO VARIABLE TRUST FUNDS FINANCIAL HIGHLIGHTS - ------------------------------------------------------------------------------------------------------------------------------------ NET REALIZED BEGINNING NET AND DIVIDENDS DISTRIBUTIONS NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET VALUE PER INCOME GAIN (LOSS) ON INVESTMENT REALIZED SHARE (LOSS) INVESTMENTS INCOME GAINS - ----------------------------------------------------------------------------------------------------------------------------------- MONEY MARKET FUND JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... $ 1.00 0.01 0.00 (0.01) 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... $ 1.00 0.01 0.00 (0.01) 0.00 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... $ 1.00 0.04 0.00 (0.04) 0.00 JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... $ 1.00 0.06 0.00 (0.06) 0.00 JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... $ 1.00 0.04 0.00 (0.04) 0.00 SMALL CAP GROWTH FUND - ----------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... $ 4.85 (0.04) 2.09 0.00 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... $ 7.85 (0.04) (2.96) 0.00 0.00 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... $10.38 (0.04) (2.49) 0.00 0.00 JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... $18.09 (0.08) (3.71) 0.00 (3.15) JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... $10.88 (0.04) 7.25 0.00 0.00 TOTAL RETURN BOND FUND - ----------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... $10.38 0.45 0.41 (0.45) (0.13) JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... $10.24 0.61 0.16 (0.61) (0.02) JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... $10.14 0.64 0.10 (0.64) 0.00 JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... $ 9.82 0.64 0.32 (0.64) 0.00 SEPTEMBER 20, 1999(3) TO DECEMBER 31, 1999 ................ $10.00 0.16 (0.18) (0.16) 0.00 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 72 WELLS FARGO VARIABLE TRUST FUNDS FINANCIAL HIGHLIGHTS - ------------------------------------------------------------------------------------------------------------------------------------ ENDING RATIO TO AVERAGE NET ASSSETS (ANNUALIZED) NET ASSET ------------------------------------------- RETURN VALUE PER NET INVESTMENT GROSS EXPENSES OF CAPITAL SHARE INCOME (LOSS) EXPENSES(1) WAIVED - ------------------------------------------------------------------------------------------------------------------------------------ MONEY MARKET FUND JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 0.00 $ 1.00 0.51% 0.89% (0.14)% JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 0.00 $ 1.00 1.24% 0.73% (0.01)% JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 0.00 $ 1.00 3.46% 0.73% (0.00)% JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... 0.00 $ 1.00 5.64% 0.90% (0.05)% JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... 0.00 $ 1.00 4.45% 1.07% (0.21)% SMALL CAP GROWTH FUND - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 0.00 $ 6.90 (0.91)% 1.25% (0.05)% JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 0.00 $ 4.85 (0.92)% 1.32% (0.12)% JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 0.00 $ 7.85 (0.85)% 1.32% (0.14)% JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... (0.77) $10.38 (0.72)% 2.41% (1.21)% JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... 0.00 $18.09 (0.37)% 1.94% (0.99)% TOTAL RETURN BOND FUND - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 0.00 $10.66 4.17% 0.97% (0.07)% JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 0.00 $10.38 5.97% 1.02% (0.12)% JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 0.00 $10.24 6.20% 1.14% (0.24)% JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... 0.00 $10.14 6.53% 1.25% (0.35)% SEPTEMBER 20, 1999(3) TO DECEMBER 31, 1999 ................ 0.00 $ 9.82 5.87% 1.25% (0.35)% WELLS FARGO VARIABLE TRUST FUNDS FINANCIAL HIGHLIGHTS - ------------------------------------------------------------------------------------------------------------------------------------ RATIO TO AVERAGE NET ASSSETS (ANNUALIZED) ----------------------------------------- PORTFOLIO NET ASSETS AT NET TOTAL TURNOVER END OF PERIOD EXPENSES RETURN(2) RATE (000'S OMITTED) - --------------------------------------------------------------------------------------------------------------- MONEY MARKET FUND JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 0.75% 0.50% N/A $ 81,583 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 0.72% 1.25% N/A $ 96,274 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 0.73% 3.73% N/A $105,360 JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... 0.85% 5.76% N/A $ 53,095 JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... 0.86% 4.46% N/A $ 42,164 SMALL CAP GROWTH FUND - --------------------------------------------------------------------------------------------------------------- JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 1.20% 42.27% 191% $138,151 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 1.20% (38.22)% 243% $ 68,349 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 1.18% (24.37)% 218% $ 57,216 JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... 1.20% (22.58)% 260% $ 33,610 JANUARY 1, 1999 TO DECEMBER 31, 1999 ...................... 0.95% 66.27% 314% $ 23,819 TOTAL RETURN BOND FUND - --------------------------------------------------------------------------------------------------------------- JANUARY 1, 2003 TO DECEMBER 31, 2003 ...................... 0.90% 8.40% 619% $ 70,988 JANUARY 1, 2002 TO DECEMBER 31, 2002 ...................... 0.90% 7.75% 82% $ 68,499 JANUARY 1, 2001 TO DECEMBER 31, 2001 ...................... 0.90% 7.41% 69% $ 72,920 JANUARY 1, 2000 TO DECEMBER 31, 2000 ...................... 0.90% 10.22% 100% $ 71,957 SEPTEMBER 20, 1999(3) TO DECEMBER 31, 1999 ................ 0.90% (0.16)% 59% $ 68,423 73 WELLS FARGO VARIABLE TRUST FUNDS NOTES TO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (1) During each period, various fees and expenses were waived and reimbursed, as indicated. The ratio of Gross Expenses to Average Net Assets reflects the expense ratio in the absence of any waivers and reimbursements (Note 3). (2) Total return calculations do not include any insurance costs, and would have been lower had certain expenses not been waived or reimbursed during the period shown. Total return figures do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. Total returns for periods less than one year are not annualized. (3) Commencement of operations. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 74 NOTES TO FINANCIAL STATEMENTS WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- 1. ORGANIZATION - -------------------------------------------------------------------------------- Wells Fargo Variable Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end series management investment company. The Trust consists of nine separate diversified funds (each, a "Fund", collectively, the "Funds") as of the end of the reporting period: the Asset Allocation Fund, Equity Income Fund, Equity Value Fund, Growth Fund, International Equity Fund, Large Company Growth Fund, Money Market Fund, Small Cap Growth Fund, and Total Return Bond Fund. The Funds are available exclusively as pooled funding vehicles for certain participating life insurance companies offering variable annuity contracts and variable life insurance policies. 2. SIGNIFICANT ACCOUNTING POLICIES - -------------------------------------------------------------------------------- The following significant accounting policies, which are consistently followed by the Trust in the preparation of its financial statements, are in conformity with accounting principles generally accepted in the United States of America ("GAAP") for investment companies. The preparation of financial statements in conformity with GAAP requires 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. SECURITY VALUATION Investments in securities are valued each business day as of the close of regular trading on the New York Stock Exchange, which is usually 4:00 p.m. (Eastern Time). Securities which are traded on a national or foreign securities exchange are valued at the last reported sales price. Securities listed on the Nasdaq Stock Market, Inc. are valued at the Nasdaq Official Closing Price ("NOCP"), and if no NOCP is available, then at the last reported sales price. In the absence of any sale of such securities, and in the case of other securities, including U.S. Government obligations, but excluding debt securities maturing in 60 days or less, the valuations are based on the latest quoted bid prices. Certain fixed income securities with maturities exceeding 60 days are valued by using a pricing service approved by the Trust's Board of Trustees. The service uses market prices as quoted by an independent pricing service or by dealers in these securities when, in the service's judgment, these prices are readily available and are representative of the securities' market values. For some securities, such prices are not readily available. These securities will generally be fair valued based on methods which may include consideration of yields or prices of securities of comparable quality, coupon rate, maturity and type of issue; indications as to values from dealers in securities, trading characteristics and general market conditions. Securities denominated in foreign currencies are translated into U.S. dollars using the closing rates of exchange in effect on the day of valuation. If trading or events occurring in other markets after the close of the principal exchange in which the foreign investments are traded are expected to materially affect the value of the investments, then those investments are fair valued following procedures approved by the Trustees. Debt securities maturing in 60 days or less generally are valued at amortized cost. The amortized cost method involves valuing a security at its cost, plus accretion of discount or minus amortization of premium over the period until maturity, which approximates market value. The Money Market Fund values its shares at 12:00 p.m. (Eastern Time) each business day. The Money Market Fund invests only in securities with remaining maturities not exceeding 397 days (13 months). Certain floating- and variable-rate instruments in the portfolio may have maturities in excess of 397 days, but carry a demand feature that permits the holder to tender the instruments back to the issuer at par value prior to maturity. The Money Market Fund uses the amortized cost method to value portfolio securities. The amortized cost method involves valuing a security at its cost, plus accretion of discount or minus amortization of premium over the period until maturity, which approximates market value. The Money Market Fund seeks to maintain a constant net asset value of $1.00 per share, although there is no assurance that it will be able to do so. Investments which are not valued using any of the methods discussed above, are valued at their fair value as determined by procedures approved by the Board of Trustees. SECURITY TRANSACTIONS AND INCOME RECOGNITION Securities transactions are recorded on a trade date basis. Realized gains or losses are reported on the basis of identified cost of securities delivered. Interest income is accrued daily and bond discounts are accreted and premiums are amortized. 75 WELLS FARGO VARIABLE TRUST FUNDS NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- Dividend income is recognized on the ex-dividend date, except for certain dividends from foreign securities, which are recorded as soon as the Fund is informed of the ex-dividend date. Dividend income from foreign securities is recorded net of foreign taxes withheld where recovery of such taxes is not assured. FOREIGN CURRENCY TRANSLATION The accounting records of the Fund(s) are maintained in U.S. dollars. Assets, including investment securities, and liabilities denominated in foreign currency are translated into U.S. dollars at the prevailing rates of exchange at the date of valuation. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. Reported 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 on the Funds' books 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, at fiscal period-end, resulting from changes in exchange rates. The changes in net assets arising from changes in exchange rates and the changes in net assets resulting from changes in market prices of securities at fiscal period-end are not separately presented. Such changes are recorded with net realized and unrealized gain from investments. Gains and losses from certain foreign currency transactions are treated as ordinary income for U.S. federal income tax purposes. DISTRIBUTIONS TO SHAREHOLDERS Net investment income, if any, for the Growth, International Equity, Large Company Growth, and Small Cap Growth Funds is declared and distributed to shareholders annually. Net investment income, if any, for the Asset Allocation, Equity Income, and Equity Value Funds is declared and distributed quarterly. Net investment income, if any, for the Money Market and Total Return Bond Funds is declared daily and distributed monthly. Distributions to shareholders from net realized capital gains, if any, are declared and distributed at least annually. Distributions are based on amounts calculated in accordance with the applicable federal income tax regulations, which may differ from GAAP. The timing and character of distributions made during the period from net investment income or net realized gains may also differ from their ultimate characterization for federal income tax purposes. To the extent that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment. Temporary differences do not require reclassifications. At December 31, 2003, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statement(s) of Assets and Liabilities: Undistributed Net Undistributed Net Fund Investment Income Realized Gain/Loss Paid-in Capital - ----------------------------------------------------------------------------------------------------------- ASSET ALLOCATION FUND $(13,001) $7,864 $5,137 - ----------------------------------------------------------------------------------------------------------- EQUITY INCOME FUND 5,760 71 (5,831) - ----------------------------------------------------------------------------------------------------------- EQUITY VALUE FUND 3,439 0 (3,439) - ----------------------------------------------------------------------------------------------------------- GROWTH FUND 181,547 0 (181,547) - ----------------------------------------------------------------------------------------------------------- INTERNATIONAL EQUITY FUND (54,894) 54,894 0 - ----------------------------------------------------------------------------------------------------------- LARGE COMPANY GROWTH FUND 365,269 0 (365,269) - ----------------------------------------------------------------------------------------------------------- MONEY MARKET FUND 0 0 0 - ----------------------------------------------------------------------------------------------------------- SMALL CAP GROWTH FUND 851,703 0 (851,703) - ----------------------------------------------------------------------------------------------------------- TOTAL RETURN BOND FUND (15,744) 15,744 0 - ----------------------------------------------------------------------------------------------------------- FEDERAL INCOME TAXES The Fund(s) is treated as a separate entity for federal income tax purposes. It is the policy of each Fund of the Trust to continue to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under subchapter M of the Internal Revenue Code (the "Code"), and to make distributions of 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 at December 31, 2003. 76 NOTES TO FINANCIAL STATEMENTS WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- At December 31, 2003, the following Fund(s) had estimated net capital loss carryforwards which are available to offset future net realized capital gains: Capital Loss Fund Year Expires Carryforwards EQUITY INCOME FUND 2011 4,638,198 - -------------------------------------------------------------------------------- EQUITY VALUE FUND 2007 464,041 2008 1,488,881 2010 4,345,308 2011 1,929,288 - -------------------------------------------------------------------------------- GROWTH FUND 2009 8,463,287 2010 14,395,487 2011 1,781,980 - -------------------------------------------------------------------------------- INTERNATIONAL EQUITY FUND 2008 3,640 2009 143,229 2010 663,493 2011 443,219 - -------------------------------------------------------------------------------- LARGE COMPANY GROWTH FUND 2009 6,092,101 2010 14,881,364 2011 2,858,910 - -------------------------------------------------------------------------------- SMALL CAP GROWTH FUND 2009 5,499,049 2010 25,427,133 - -------------------------------------------------------------------------------- At December 31, 2003, the following Fund(s) had a current year deferred post-October capital loss, which will be treated as realized for tax purposes on the first day of the succeeding year: Fund Deferred Post-October Capital Loss - -------------------------------------------------------------------------------- EQUITY INCOME FUND 57,318 - -------------------------------------------------------------------------------- EQUITY VALUE FUND 4,572 - -------------------------------------------------------------------------------- INTERNATIONAL EQUITY FUND 2,627 - -------------------------------------------------------------------------------- MONEY MARKET FUND 206 - -------------------------------------------------------------------------------- TOTAL RETURN BOND FUND 28,657 FORWARD FOREIGN CURRENCY CONTRACTS The Fund(s) may enter into foreign currency forward contracts to protect against a possible loss resulting from an adverse change in the relationship between foreign currencies and the U.S. dollar, or between foreign currencies. A forward contract is an agreement between two counterparties for future delivery or receipt of currency at a specified price. Risks arise from the possible inability of counterparties to meet the terms of their contracts and from movements in currency values. Realized gains or losses are recognized when the transaction is completed. Contracts which have been offset but have not reached their settlement date are included in unrealized gains and losses. FUTURES CONTRACTS The Fund(s) may purchase futures contracts to gain exposure to market changes, which may be more efficient or cost effective than actually buying the securities. A futures contract is an agreement between parties to buy or sell a security at a set price on a future date. Upon entering into such a contract, a Fund is required to pledge to the broker an amount of cash, U.S. Government obligations or other high-quality debt securities equal to the minimum "initial margin" requirements of the exchange on which the futures contract is traded. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as "variation margin" and are recorded by the Fund as unrealized gains or losses. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Pursuant to regulations and/or published positions of the Securities and Exchange Commission (the "SEC") for long futures positions, the 77 WELLS FARGO VARIABLE TRUST FUNDS NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- Fund is required to segregate highly liquid securities as permitted by the SEC in connection with futures transactions in an amount generally equal to the entire value of the underlying contracts. Risks of entering into futures contracts include the possibility that there may be an illiquid market and that a change in the value of the contract may not correlate with changes in the value of the underlying securities. At December 31, 2003, the following Fund(s) held futures contracts: Net Unrealized Notional Appreciation Fund Contracts Type Expiration Date Contract Value (Depreciation) - ----------------------------------------------------------------------------------------------------------- ASSET ALLOCATION 317 Long S&P 500 Index Mar-04 $88,015,050 $ 3,611,348 - ----------------------------------------------------------------------------------------------------------- ASSET ALLOCATION 297 Long U.S. T-Bonds Mar-04 32,465,813 537,469 - ----------------------------------------------------------------------------------------------------------- ASSET ALLOCATION 621 Short U.S. T-Bonds Mar-04 67,883,063 (1,126,730) - ----------------------------------------------------------------------------------------------------------- MORTGAGE DOLLAR ROLL TRANSACTIONS The Fund(s) may engage in mortgage dollar roll transactions with respect to mortgage-backed securities issued by GNMA, FNMA and FHLMC. In a mortgage dollar roll transaction, a Fund sells a mortgage-backed security to a financial institution, such as a bank or broker-dealer and simultaneously agrees to repurchase a substantially similar (i.e., same type, coupon and maturity) security from the institution at a later date at an agreed upon price. The mortgage-backed securities that are repurchased will bear the same interest rate as those sold, but generally will be collateralized by different pools of mortgages with different pre-payment histories. During the roll period, a Fund foregoes principal and interest paid on the securities. A Fund receives compensation from the interest earned on the cash proceeds of the initial sale and in the form of a fee, which is recorded as deferred income and amortized to income over the roll period, or alternatively, a lower price for the security upon its repurchase. Mortgage dollar rolls may be renewed without physical delivery of the securities subject to the contract. REPURCHASE AGREEMENTS The Fund(s) may invest in repurchase agreements and may participate in pooled repurchase agreement transactions with other funds advised by Wells Fargo Funds Management, LLC. The repurchase agreements must be fully collateralized based on values that are marked to market daily. The collateral may be held by an agent bank under a tri-party agreement. It is a Fund's custodian's responsibility to value collateral daily and to take action to obtain additional collateral as necessary to maintain market value equal to or greater than the resale price. The repurchase agreements held by a Fund are collateralized by instruments such as U.S. Treasury, federal agency, or high-grade corporate obligations. There could be potential loss to a Fund in the event that such Fund is delayed or prevented from exercising its rights to dispose of the collateral, including the risk of a possible decline in the value of the underlying obligations during the period in which a Fund seeks to assert its rights. WHEN-ISSUED TRANSACTIONS The Fund(s) records a when-issued transaction on the trade date and will segregate with the custodian qualifying assets having a value sufficient to make payment for the securities purchased. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract. 3. EXPENSES - -------------------------------------------------------------------------------- ADVISORY FEES The Trust has entered into an advisory contract on behalf of the Fund(s) with Wells Fargo Funds Management, LLC ("Funds Management"). The adviser is responsible for implementing the investment policies and guidelines for the Fund(s), and for supervising the sub-adviser who is responsible for the day-to-day portfolio management of the Fund(s). 78 NOTES TO FINANCIAL STATEMENTS WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- Pursuant to the contract, Funds Management is entitled to receive an advisory fee for its services as adviser. Funds Management may retain the services of certain investment sub-advisers to provide daily portfolio management for the Fund(s). The fees related to sub-advisory services are borne directly by the adviser and do not increase the overall fees paid by a Fund to the adviser. Funds Management and the investment sub-adviser(s) are entitled to be paid a monthly fee at the following annual rates: Advisory Fee Sub-Advisory Fee (% of Average Average Daily (% of Average Fund Daily Net Assets) Sub-Adviser Net Assets Daily Net Assets) - ---------------------------------------------------------------------------------------------------------------------- ASSET ALLOCATION FUND 0.55 Wells Capital Management $0 - 1 billion 0.15 Incorporated > $1 billion 0.10 - ---------------------------------------------------------------------------------------------------------------------- EQUITY INCOME FUND 0.55 Wells Capital Management $0 - 200 million 0.25 Incorporated $200 - 400 million 0.20 >$400 million 0.15 - ---------------------------------------------------------------------------------------------------------------------- EQUITY VALUE FUND 0.55 Wells Capital Management $0 - 200 million 0.25 Incorporated $200 - 400 million 0.20 >$400 million 0.15 - ---------------------------------------------------------------------------------------------------------------------- GROWTH FUND 0.55 Wells Capital Management $0 - 200 million 0.25 Incorporated $200 - 400 million 0.20 >$400 million 0.15 - ---------------------------------------------------------------------------------------------------------------------- INTERNATIONAL EQUITY FUND 0.75 Wells Capital Management $0 - 200 million 0.35 Incorporated > $200 million 0.25 - ---------------------------------------------------------------------------------------------------------------------- LARGE COMPANY GROWTH FUND 0.55 Peregrine Capital Management $0 - 25 million 0.75 Incorporated $25 - 50 million 0.60 $50 - 275 million 0.50 > $275 million 0.30 - ---------------------------------------------------------------------------------------------------------------------- MONEY MARKET FUND 0.40 Wells Capital Management $0 - 1 billion 0.05 Incorporated > $1 billion 0.04 - ---------------------------------------------------------------------------------------------------------------------- SMALL CAP GROWTH FUND 0.75 Wells Capital Management $0 - 200 million 0.25 Incorporated > $200 million 0.20 - ---------------------------------------------------------------------------------------------------------------------- TOTAL RETURN BOND FUND 0.45 Wells Capital Management $0 - 400 million 0.15 Incorporated $400 - 800 million 0.125 >$800 million 0.10 - ---------------------------------------------------------------------------------------------------------------------- ADMINISTRATION AND TRANSFER AGENT FEES Effective March 1, 2003, the Trust has entered into a new Administration Agreement with Funds Management on behalf of the Fund(s). Under this Agreement, for providing administrative services, which includes paying the Fund's fees and expenses for services provided by the Fund's transfer agent and various sub-transfer agents and omnibus account servicers and record-keepers out of the fees it receives as administrator, Funds Management is entitled to receive the following annual fees: % of Average Daily Net Assets - -------------------------------------------------------------------------------- ALL FUNDS 0.16% - -------------------------------------------------------------------------------- Prior to March 1, 2003, the Trust had entered into an Administration Agreement on behalf of the Fund(s) with Funds Management whereby Funds Management was entitled to receive monthly fees at the annual rate of 0.15% of each Fund's average daily net assets. The Trust had also entered into an agreement with Boston Financial Data Services ("BFDS") as the transfer agent for the Trust. Prior to March 1, 2003, BFDS was entitled to receive from the Fund(s) a per-account fee plus transaction fees, certain out-of-pocket costs and a complex based fee. Effective March 1, 2003, BFDS is entitled to receive fees from the administrator for its services as transfer agent. For financial statement presentation purposes, transfer agent fees for the period prior to March 1, 2003 have been combined with administration fees on the Statement(s) of Operations. 79 WELLS FARGO VARIABLE TRUST FUNDS NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- CUSTODY FEES The Trust has entered into a contract on behalf of the Fund(s) with Wells Fargo Bank Minnesota, N.A. ("WFB MN"), whereby WFB MN is responsible for providing custody services for the Fund(s). Pursuant to the contract, WFB MN is entitled to certain transaction charges plus a monthly fee for custody services at the annual rate of 0.02% of the average daily net assets of each Fund. For the International Equity Fund, WFB MN is entitled to receive 0.10% of the average daily net assets of the Fund. DISTRIBUTION FEES The Trust has adopted a Distribution Plan ("Plan") for the Fund(s), pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are charged and paid to Stephens Inc. at a rate of up to 0.25% of the average daily net assets of each Fund. The distribution fees paid on behalf of the Fund(s) for the year ended December 31, 2003 are disclosed on the Statement(s) of Operations. OTHER FEES Effective the first quarter of 2003, PFPC, Inc. ("PFPC") serves as fund accountant for the Fund(s). PFPC is entitled to receive an annual asset based fee, an annual fixed fee of $20,000 from each Fund and is entitled to be reimbursed for all out-of-pocket expenses reasonably incurred in providing these services. Prior to PFPC, Forum Accounting Services, LLC served as fund accountant and was entitled to receive a fixed monthly fee, a basis point fee of 0.0025% of the average daily net assets of each Fund, plus out-of-pocket expenses. WAIVED FEES AND REIMBURSED EXPENSES All amounts shown as waived fees or reimbursed expenses on the Statement(s) of Operations, for the year ended December 31, 2003, were waived by Funds Management, first from advisory fees, and then any remaining amount consecutively from administration and custody fees collected. 4. INVESTMENT PORTFOLIO TRANSACTIONS - -------------------------------------------------------------------------------- Purchases and sales of investments, exclusive of short-term securities (securities with maturities of one year or less at purchase date) for each Fund for the year ended December 31, 2003, were as follows: Fund Purchases at Cost Sales Proceeds - -------------------------------------------------------------------------------- ASSET ALLOCATION FUND $29,492,934 $14,219,433 - -------------------------------------------------------------------------------- EQUITY INCOME FUND 17,322,940 12,098,413 - -------------------------------------------------------------------------------- EQUITY VALUE FUND 4,889,331 5,839,865 - -------------------------------------------------------------------------------- GROWTH FUND 23,939,110 31,067,002 - -------------------------------------------------------------------------------- INTERNATIONAL EQUITY FUND 20,387,122 11,553,935 - -------------------------------------------------------------------------------- LARGE COMPANY FUND 15,795,550 8,056,709 - -------------------------------------------------------------------------------- SMALL CAP GROWTH FUND 199,444,791 169,546,566 - -------------------------------------------------------------------------------- TOTAL RETURN BOND FUND 431,422,554 427,984,594 The Money Market Fund, not reflected in this schedule, trades exclusively in short-term securities. 5. BANK BORROWINGS - -------------------------------------------------------------------------------- All of the Funds in the Wells Fargo Funds Trust and the Wells Fargo Variable Trust (excluding the money market funds) share in a revolving Credit Agreement with The Bank of New York, whereby the Funds are permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. The agreement permits borrowings of up to $150 million, collectively. Interest is charged to each Fund based on its borrowing at a rate equal to the Federal Funds Rate plus 0.40%. In addition, the Funds pay a quarterly commitment fee equal to 0.1% per annum of the credit line. No borrowings under the agreement occurred during the year ended December 31, 2003. 80 NOTES TO FINANCIAL STATEMENTS WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- 6. DISTRIBUTION TO SHAREHOLDERS - -------------------------------------------------------------------------------- The tax character of distributions paid during the years ended December 31, 2003 and December 31, 2002 was as follows: Ordinary Long-term Income Capital Gain Total Fund 2003 2002 2003 2002 2003 2002 - --------------------------------------------------------------------------------------------------------- ASSET ALLOCATION FUND $3,913,604 $4,776,296 $15,130 $2,362,924 $3,928,734 $7,139,220 - --------------------------------------------------------------------------------------------------------- EQUITY INCOME FUND 1,355,375 1,463,758 2,166,678 1,796 3,522,053 1,465,554 - --------------------------------------------------------------------------------------------------------- EQUITY VALUE FUND 419,582 387,806 0 0 419,582 387,806 - --------------------------------------------------------------------------------------------------------- GROWTH FUND 0 67,098 0 0 0 67,098 - --------------------------------------------------------------------------------------------------------- INTERNATIONAL EQUITY FUND 50,877 13,840 0 0 50,877 13,840 - --------------------------------------------------------------------------------------------------------- LARGE COMPANY GROWTH FUND 0 0 0 0 0 0 - --------------------------------------------------------------------------------------------------------- MONEY MARKET FUND 466,690 1,247,066 0 0 466,690 1,247,066 - --------------------------------------------------------------------------------------------------------- SMALL CAP GROWTH FUND 0 0 0 0 0 0 - --------------------------------------------------------------------------------------------------------- TOTAL RETURN BOND FUND 2,926,175 4,109,401 869,815 172,283 3,795,990 4,281,684 - --------------------------------------------------------------------------------------------------------- As of December 31, 2003, the components of distributable earnings on a tax basis are shown on the table below. The difference between book basis and tax basis appreciation is attributable to the tax deferral on wash sales. Undistributed Undistributed Unrealized Capital Ordinary Long-Term Appreciation Loss Income Gain (Depreciation) Carryforward * Total - --------------------------------------------------------------------------------------------------------- ASSET ALLOCATION FUND $0 $9,827,361 $(18,854,999) $0 $(9,027,638) - --------------------------------------------------------------------------------------------------------- EQUITY INCOME FUND 0 0 7,192,681 (4,695,516) 2,497,165 - --------------------------------------------------------------------------------------------------------- EQUITY VALUE FUND 0 0 1,371,409 (8,232,090) (6,860,681) - --------------------------------------------------------------------------------------------------------- GROWTH FUND 0 0 6,050,808 (24,640,754) (18,589,946) - --------------------------------------------------------------------------------------------------------- INTERNATIONAL EQUITY FUND 62,504 0 3,205,397 (1,256,208) 2,011,693 - --------------------------------------------------------------------------------------------------------- LARGE COMPANY GROWTH FUND 0 0 (8,237,572) (23,832,375) (32,069,947) - --------------------------------------------------------------------------------------------------------- MONEY MARKET FUND 265 0 0 (206) 59 - --------------------------------------------------------------------------------------------------------- SMALL CAP GROWTH FUND 0 0 16,081,252 (30,926,182) (14,844,930) - --------------------------------------------------------------------------------------------------------- TOTAL RETURN BOND FUND 2,455,599 2,159,186 (247,735) (28,657) 4,338,393 - --------------------------------------------------------------------------------------------------------- *THIS AMOUNT INCLUDES THE POST-OCTOBER LOSS, WHICH WILL REVERSE ON THE FIRST DAY OF THE FOLLOWING FISCAL YEAR. 81 WELLS FARGO VARIABLE TRUST FUNDS INDEPENDENT AUDITORS' REPORT - -------------------------------------------------------------------------------- TO THE BOARD OF TRUSTEES AND SHAREHOLDERS WELLS FARGO VARIABLE TRUST We have audited the accompanying statements of assets and liabilities of the Asset Allocation Fund, Equity Income Fund, Equity Value Fund, Growth Fund, International Equity Fund, Large Company Growth Fund, Money Market Fund, Small Cap Growth Fund and Total Return Bond Fund; nine funds of Wells Fargo Variable Trust (collectively called the "Funds") including the portfolios of investments as of December 31, 2003 and the related statements of operations, statements of changes in net assets and financial highlights for the periods presented on pages 64 through 74. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on this financial statement based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures include confirmation of the securities owned as of December 31, 2003, by correspondence with the custodian. As to securities purchased, but not yet received, we performed other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall balance sheet presentation. We believe that our audit of the balance sheet provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above presents fairly, in all material respects, the financial position of each of the aforementioned Funds of the Wells Fargo Variable Trust as of December 31, 2003, the results of their operations, changes in their net assets and their financial highlights for the periods indicated above in conformity with accounting principles generally accepted in the United States of America. \S\KPMG LLP February 23, 2004 82 OTHER INFORMATION (UNAUDITED) WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- PROXY VOTING INFORMATION A description of the policies and procedures that the Fund(s) uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222 or visiting our website at www.wellsfargofunds.com. TAX INFORMATION Pursuant to Section 854(b)(2) of the Internal Revenue Code, the Fund(s) designates the following percentages of their ordinary income distributions paid, as qualifying for the corporate dividend-received deduction: Fund Dividends - Received Deduction Asset Allocation Fund 58.90% Equity Income Fund 100% Equity Value Fund 100% Pursuant to Section 852(b)(3) of the Internal Revenue Code, the Fund(s) listed below designates as capital gain dividends for the year the following amounts: Fund Capital Gain Dividends - -------------------------------------------------------------------------------- ASSET ALLOCATION FUND $15,130 - -------------------------------------------------------------------------------- EQUITY INCOME FUND 2,166,678 - -------------------------------------------------------------------------------- TOTAL RETURN BOND FUND 869,815 - -------------------------------------------------------------------------------- BOARD OF TRUSTEES The following table provides basic information about the Board of Trustees ("Trustees") of the Wells Fargo Variable Trust (the "Trust") and supplements, and should be read in conjunction with, the Prospectus and the Statement of Additional Information * of each Fund. Each of the Trustees listed below acts in identical capacities for each of the 94 funds comprising the Trust, Wells Fargo Funds Trust and Wells Fargo Master Trust (collectively the "Fund Complex"). All of the non-interested Trustees are also members of the Audit and Nominating Committees of each Trust in the Fund Complex. The address of each Trustee and Officer is 525 Market Street, 12th Floor, San Francisco, CA 94105. Each Trustee and Officer serves an indefinite term, however, each Trustee serves such term until reaching the mandatory retirement age established by the Trustees. INTERESTED TRUSTEES ** - ------------------------------------------------------------------------------------------------------------------------------------ POSITION HELD AND PRINCIPAL OCCUPATIONS DURING NAME AND AGE LENGTH OF SERVICE *** PAST FIVE YEARS OTHER DIRECTORSHIPS - ------------------------------------------------------------------------------------------------------------------------------------ Robert C. Brown Trustee Retired. Director, Federal Farm None 72 since 1992 Credit Banks Funding Corporation and Farm Credit System Financial Assistance Corporation until February 1999. - ------------------------------------------------------------------------------------------------------------------------------------ J. Tucker Morse Trustee Private Investor/Real Estate None 59 since 1987 Developer; Chairman of White Point Capital, LLC. - ------------------------------------------------------------------------------------------------------------------------------------ NON-INTERESTED TRUSTEES - ------------------------------------------------------------------------------------------------------------------------------------ POSITION HELD AND PRINCIPAL OCCUPATIONS DURING NAME AND AGE LENGTH OF SERVICE *** PAST FIVE YEARS OTHER DIRECTORSHIPS - ------------------------------------------------------------------------------------------------------------------------------------ THOMAS S. GOHO Trustee Wake Forest University, None 61 since 1987 Calloway School of Business and Accountancy, Benson-Pruitt Professorship since 1999, Associate Professor of Finance 1994 - 1999. - ------------------------------------------------------------------------------------------------------------------------------------ Peter G. Gordon Trustee Chairman, CEO, and Co-Founder None 61 since 1998 of Crystal Geyser Water Company (Lead Trustee and President of Crystal Geyser since 2001) Roxane Water Company. - ------------------------------------------------------------------------------------------------------------------------------------ 83 OTHER INFORMATION (UNAUDITED) WELLS FARGO VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- NON-INTERESTED TRUSTEES - ------------------------------------------------------------------------------------------------------------------------------------ POSITION HELD AND PRINCIPAL OCCUPATIONS DURING NAME AND AGE LENGTH OF SERVICE *** PAST FIVE YEARS OTHER DIRECTORSHIPS - ------------------------------------------------------------------------------------------------------------------------------------ Richard M. Leach Trustee Retired. Prior thereto, None 70 since 1987 President of Richard M. Leach Associates (a financial consulting firm). - ------------------------------------------------------------------------------------------------------------------------------------ Timothy J. Penny Trustee Senior Counselor to the public None 52 since 1996 relations firm of Himle-Horner and Senior Fellow at the Humphrey Institute, Minneapolis, Minnesota (a public policy organization). - ------------------------------------------------------------------------------------------------------------------------------------ Donald C. Willeke Trustee Principal in the law firm of None 63 since 1996 Willeke & Daniels. - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS - ------------------------------------------------------------------------------------------------------------------------------------ POSITION HELD AND PRINCIPAL OCCUPATIONS DURING NAME AND AGE LENGTH OF SERVICE *** PAST FIVE YEARS OTHER DIRECTORSHIPS - ------------------------------------------------------------------------------------------------------------------------------------ Karla M. Rabusch President, since 2003 Executive Vice President of None 44 Wells Fargo Bank, N.A. President of Wells Fargo Funds Management, LLC. Senior Vice President and Chief Administrative Officer of Wells Fargo Funds Management, LLC from March 2001 to March 2003. Vice President of Wells Fargo Bank, N.A. from December 1997 to May 2000. - ------------------------------------------------------------------------------------------------------------------------------------ Stacie D. DeAngelo Treasurer, since 2003 Vice President of Wells Fargo None 35 Bank, N.A. Vice President of Operations for Wells Fargo Funds Management, LLC. Prior thereto, Operations Manager at Scudder Weisel Capital, LLC (2000 to 2001), Director of Shareholder Services at BISYS Fund Services (1999 to 2000) and Assistant Vice President of Operations with Nicholas-Applegate Capital Management (1993 to 1999). - ------------------------------------------------------------------------------------------------------------------------------------ C. David Messman Secretary, since 2000 Vice President and Counsel of None 43 Wells Fargo Bank, N.A. since January 1996. Vice President and Secretary of Wells Fargo Funds Management, LLC since March 2001. - ------------------------------------------------------------------------------------------------------------------------------------ * The Statement of Additional Information includes additional information about the Funds' Trustees and is available, without charge, upon request, by calling 1-800-222-8222. ** Currently, two of the seven Trustees are considered "interested persons" of the Trusts as defined in the Investment Company Act of 1940. One of the interested Trustees, Robert C. Brown, owns securities of Wells Fargo & Company, and one of the interested Trustees, J. Tucker Morse, is affiliated with a government securities dealer that is registered under the Securities Exchange Act of 1934, which is not itself affiliated with Wells Fargo Funds Management, LLC. *** Length of service dates reflects a Trustee's commencement of service with the Trust's predecessor entities. 84 THIS PAGE IS INTENTIONALLY LEFT BLANK -- THIS PAGE IS INTENTIONALLY LEFT BLANK -- LIST OF ABBREVIATIONS VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- THE FOLLOWING IS A LIST OF COMMON ABBREVIATIONS FOR TERMS AND ENTITIES WHICH MAY HAVE APPEARED IN THIS REPORT. ABAG -- ASSOCIATION OF BAY AREA GOVERNMENTS ADR -- AMERICAN DEPOSITORY RECEIPTS AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION AMT -- ALTERNATIVE MINIMUM TAX ARM -- ADJUSTABLE RATE MORTGAGES BART -- BAY AREA RAPID TRANSIT CDA -- COMMUNITY DEVELOPMENT AUTHORITY CDSC -- CONTINGENT DEFERRED SALES CHARGE CGIC -- CAPITAL GUARANTY INSURANCE COMPANY CGY -- CAPITAL GUARANTY CORPORATION CMT -- CONSTANT MATURITY TREASURY COFI -- COST OF FUNDS INDEX CONNIE LEE -- CONNIE LEE INSURANCE COMPANY COP -- CERTIFICATE OF PARTICIPATION CP -- COMMERCIAL PAPER CTF -- COMMON TRUST FUND DW&P -- DEPARTMENT OF WATER & POWER DWR -- DEPARTMENT OF WATER RESOURCES EDFA -- EDUCATION FINANCE AUTHORITY FGIC -- FINANCIAL GUARANTY INSURANCE CORPORATION FHA -- FEDERAL HOUSING AUTHORITY FHLB -- FEDERAL HOME LOAN BANK FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION FRN -- FLOATING RATE NOTES FSA -- FINANCIAL SECURITY ASSURANCE, INC GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION GO -- GENERAL OBLIGATION HFA -- HOUSING FINANCE AUTHORITY HFFA -- HEALTH FACILITIES FINANCING AUTHORITY IDA -- INDUSTRIAL DEVELOPMENT AUTHORITY LIBOR -- LONDON INTERBANK OFFERED RATE LLC -- LIMITED LIABILITY CORPORATION LOC -- LETTER OF CREDIT LP -- LIMITED PARTNERSHIP MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION MFHR -- MULTI-FAMILY HOUSING REVENUE MUD -- MUNICIPAL UTILITY DISTRICT MTN -- MEDIUM TERM NOTE PCFA -- POLLUTION CONTROL FINANCE AUTHORITY PCR -- POLLUTION CONTROL REVENUE PFA -- PUBLIC FINANCE AUTHORITY PLC -- PRIVATE PLACEMENT PSFG -- PUBLIC SCHOOL FUND GUARANTY RAW -- REVENUE ANTICIPATION WARRANTS RDA -- REDEVELOPMENT AUTHORITY RDFA -- REDEVELOPMENT FINANCE AUTHORITY R&D -- RESEARCH & DEVELOPMENT SFMR -- SINGLE FAMILY MORTGAGE REVENUE STEERS -- STRUCTURED ENHANCED RETURN TRUST TBA -- TO BE ANNOUNCED TRAN -- TAX REVENUE ANTICIPATION NOTES USD -- UNIFIED SCHOOL DISTRICT V/R -- VARIABLE RATE WEBS -- WORLD EQUITY BENCHMARK SHARES MORE INFORMATION ABOUT WELLS FARGO VARIABLE TRUST FUNDS IS AVAILABLE FREE UPON REQUEST. TO OBTAIN LITERATURE, PLEASE WRITE OR CALL: WELLS FARGO VARIABLE TRUST FUNDS PO BOX 8266 BOSTON, MA 02266-8266 WELLS FARGO FUNDS INVESTOR SERVICES: 1-800-222-8222 THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF THE CONTRACTHOLDERS OF THE WELLS FARGO VARIABLE TRUST FUNDS. IF THIS REPORT IS USED FOR PROMOTIONAL PURPOSES, DISTRIBUTION OF THE REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS. FOR A PROSPECTUS CONTAINING MORE COMPLETE INFORMATION, INCLUDING CHARGES AND EXPENSES, CALL 1-800-222-8222. PLEASE CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES OF THE INVESTMENT CAREFULLY BEFORE INVESTING. THIS AND OTHER INFORMATION ABOUT WELLS FARGO FUNDS CAN BE FOUND IN THE CURRENT PROSPECTUS. READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR SEND MONEY. WELLS FARGO FUNDS MANAGEMENT, LLC, A WHOLLY-OWNED SUBSIDIARY OF WELLS FARGO & COMPANY, PROVIDES INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES FOR THE WELLS FARGO VARIABLE TRUST FUNDS. OTHER AFFILIATES OF WELLS FARGO & COMPANY PROVIDE SUB-ADVISORY AND OTHER SERVICES FOR THE FUNDS. THE FUNDS ARE DISTRIBUTED BY STEPHENS INC., MEMBER NYSE/SIPC. WELLS FARGO & COMPANY AND ITS AFFILIATES ARE NOT AFFILIATED WITH STEPHENS INC. NOT FDIC INSURE - NO BANK GUARANTEE - MAY LOSE VALUE AR 016 (02/04) ITEM 2. CODE OF ETHICS ======================= As of the end of the period, December 31, 2003, Wells Fargo Variable Trust has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its President and Treasurer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT ========================================= The Board of Trustees of Wells Fargo Variable Trust has determined that Thomas S. Goho is an audit committee financial expert, as defined in Item 3 of Form N-CSR. Mr. Goho is independent for purposes of Item 3 of Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES =============================================== (a) Audit Fees - Provided below are the aggregate fees billed for the fiscal years ended December 31, 2002 and December 31, 2003 for professional services rendered by the principal accountant for the audit of the Registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements. For the fiscal years ended December 31, 2002 and December 31, 2003, the Audit Fees were $ 121,801 and $ 128,382, respectively. (b) Audit-Related Fees - There were no audit-related fees incurred for the fiscal years ended December 31, 2002 and December 31, 2003 for assurance and related services by the principal accountant for the Registrant. (c) Tax Fees - Provided below are the aggregate fees billed for the fiscal years ended December 31, 2002 and December 31, 2003 for professional services rendered by the principal accountant for the Registrant for tax compliance, tax advice, and tax planning. For the fiscal years ended December 31, 2002 and December 31, 2003, the Tax Fees were $ 13,437 and $ 14,149, respectively. The incurred Tax Fees are comprised of excise tax review services. (d) All Other Fees - There were no other fees incurred for the fiscal years ended December 31, 2002 and December 31, 2003. (e)(1) The Chairman of the Audit Committees is authorized to pre-approve: (1) audit services to the mutual funds of Wells Fargo Funds Trust, Wells Fargo Variable Trust and Wells Fargo Master Trust (the "Funds"); (2) non-audit tax or compliance consulting or training services provided to the Funds by the independent auditors ("Auditors") if the fees for any particular engagement are not anticipated to exceed $50,000; and (3) non-audit tax or compliance consulting or training services provided by the Auditors to a Fund's investment adviser and its controlling entities (where pre-approval is required because the engagement relates directly to the operations and financial reporting of the Fund) if the fee to the Auditors for any particular engagement is not anticipated to exceed $50,000. For any such pre-approval sought from the Chairman, Management shall prepare a brief description of the proposed services. If the Chairman approves of such service, he or she shall sign the statement prepared by Management. Such written statement shall be presented to the full Committees at their next regularly scheduled meetings. (e)(2) Not Applicable. (f) Not Applicable. (g) Provided below are the aggregate non-audit fees billed for the fiscal years ended December 31, 2002 and December 31, 2003 by the principal accountant for services rendered to the Registrant, and rendered to the Registrant's investment adviser, and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the Registrant. For the fiscal years ended December 31, 2002 and December 31, 2003, the Registrant incurred non-audit fees in the amount of $72,000 and $77,000, respectively. The non-audit fees consist of SAS70 control reviews of Wells Fargo Bank Minnesota, N.A., the Funds' custodian. For the fiscal years ended December 31, 2002 and December 31, 2003, the Registrant's investment adviser incurred non-audit fees in the amount of $15,500 and $47,000, respectively. The non-audit fees consist of procedure reviews for pending mergers associated with fund reorganizations. (h) The Registrant's audit committee of the board of directors has determined that non-audit services rendered to the registrant's investment adviser, that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of the Regulation S-X, does not compromise the independence of the principal accountant. ITEMS 5-6. [RESERVED] ====================== ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES =============================================================== Not applicable. ITEM 8. [RESERVED] =================== ITEM 9. CONTROLS AND PROCEDURES ================================ (a)(i) The President and Treasurer have concluded that the Wells Fargo Variable Trust (the "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 Trust 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. (a)(ii) There were no significant changes in the Trust's internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation referenced in (a)(i) above. ITEM 10. EXHIBITS ================= (a) Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as Exhibit 10a. (a)(2) Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT. (b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT. 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. Wells Fargo Variable Trust By: /s/ Karla M. Rabusch Karla M. Rabusch President By: /s/ Stacie D. DeAngelo Stacie D. DeAngelo Treasurer Date: February 18, 2004 CERTIFICATION I, Karla M. Rabusch, certify that: 1. I have reviewed this report on Form N-CSR of the Wells Fargo Variable Trust Asset Allocation Fund, Wells Fargo Variable Trust Equity Income Fund, Wells Fargo Variable Trust Equity Value Fund, Wells Fargo Variable Trust Growth Fund, Wells Fargo Variable Trust International Equity Fund, Wells Fargo Variable Trust Large Company Growth Fund, Wells Fargo Variable Trust Money Market Fund, Wells Fargo Variable Trust Small Cap Growth Fund, and the Wells Fargo Variable Trust Total Return Bond Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal controls over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: February 18, 2004 /s/ Karla M. Rabusch - ----------------------- Karla M. Rabusch President Wells Fargo Variable Trust Exhibit 99.CERT CERTIFICATION I, Stacie D. DeAngelo, certify that: 1. I have reviewed this report on Form N-CSR of the Wells Fargo Variable Trust Asset Allocation Fund, Wells Fargo Variable Trust Equity Income Fund, Wells Fargo Variable Trust Equity Value Fund, Wells Fargo Variable Trust Growth Fund, Wells Fargo Variable Trust International Equity Fund, Wells Fargo Variable Trust Large Company Growth Fund, Wells Fargo Variable Trust Money Market Fund, Wells Fargo Variable Trust Small Cap Growth Fund, and the Wells Fargo Variable Trust Total Return Bond Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal controls over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: February 18, 2004 /s/ Stacie D. DeAngelo - ----------------------- Stacie D. DeAngelo Treasurer Wells Fargo Variable Trust Exhibit 99.CERT SECTION 906 CERTIFICATION Pursuant to 18 U.S.C. ss. 1350, the undersigned officer of Wells Fargo Variable Trust (the "Trust"), hereby certifies, to the best of her knowledge, that the Trust's report on Form N-CSR for the period ended December 31, 2003 (the "Report") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. Date: February 18, 2004 /s/ Karla M. Rabusch Karla M. Rabusch President Wells Fargo Variable Trust SECTION 906 CERTIFICATION Pursuant to 18 U.S.C. ss. 1350, the undersigned officer of Wells Fargo Variable Trust (the "Trust"), hereby certifies, to the best of her knowledge, that the Trust's report on Form N-CSR for the period ended December 30, 2003 (the "Report") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. Date: February 18, 2004 /s/ Stacie D. DeAngelo Stacie D. DeAngelo Treasurer Wells Fargo Variable Trust