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