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, 2004
Date of reporting period: December 31, 2004
ITEM 1. REPORT TO SHAREHOLDERS
[LOGO]
WELLS
FARGO
FUNDS
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
DECEMBER 31, 2004
WELLS FARGO VARIABLE TRUST FUNDS
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TABLE OF CONTENTS
Letter to Contractholders ................................................. 1
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Performance Highlights
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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
Fund Expenses (Unaudited) ................................................. 20
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Portfolio of Investments
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Variable Trust Asset Allocation Fund ................................... 22
Variable Trust Equity Income Fund ...................................... 37
Variable Trust Equity Value Fund ....................................... 40
Variable Trust Growth Fund ............................................. 43
Variable Trust International Equity Fund ............................... 46
Variable Trust Large Company Growth Fund ............................... 50
Variable Trust Money Market Fund ....................................... 52
Variable Trust Small Cap Growth Fund ................................... 54
Variable Trust Total Return Bond Fund .................................. 59
Financial Statements
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Statement of Assets and Liabilities .................................... 68
Statement of Operations ................................................ 70
Statements of Changes in Net Assets .................................... 72
Financial Highlights ................................................... 76
Notes to Financial Highlights ............................................. 80
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Notes to Financial Statements ............................................. 81
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Report of Independent Registered Public Accounting Firm ................... 90
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Tax Information (Unaudited) ............................................... 91
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Other Information (Unaudited) ............................................. 92
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List of Abbreviations ..................................................... 94
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NOT FDIC INSURED-NO BANK GUARANTEE-MAY LOSE VALUE
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THIS PAGE IS INTENTIONALLY LEFT BLANK --
LETTER TO CONTRACTHOLDERS WELLS FARGO VARIABLE TRUST FUNDS
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DEAR VALUED CONTRACTHOLDER,
We are pleased to provide you with the Wells Fargo Variable Trust Funds
annual report for the 12-month period ended December 31, 2004. On the following
pages, you will find a discussion of each Fund, including performance
highlights, the Fund managers' strategic outlook and facts and figures about
each Fund's portfolio.
2004 ECONOMY REVIVES IN THE END
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Despite a stronger economy and corporate profit growth, investors remained
cautious throughout most of 2004. The S&P 500 Index returned nearly 11% over the
twelve-month period with most gains occurring in the fourth quarter of 2004,
when uncertainties of the year came to pass, as election results were known; oil
prices steadied; inflation stayed in check; the Federal Reserve Board (the Fed)
did not raise rates aggressively; new job growth became evident; corporate
profits were healthy; and consumer confidence and spending were solid. The year
ended with small and mid cap stocks significantly outperforming large cap
stocks.
The international markets experienced strong gains over the reporting
period as companies generally delivered positive operating performances and
refrained from investing profits in activities such as acquisitions and
expansions. This robust earnings environment was further enhanced by the major
European currencies gaining strength with respect to the U.S. dollar.
The rising interest-rate environment had a negative effect on bonds with
shorter maturities, since bond prices move inversely to changes in interest
rates. Overall, bonds with longer durations benefited the most during the
period.
INTEREST RATES END UPWARD
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At the end of June 2004, the Fed started raising short-term interest rates
by 0.25%, from 1% to 1.25% and continued with this "measured" approach
throughout the year, ending at 2.25% at their last meeting in December 2004.
Because so much of the economic tightening by the Fed was already priced into
the market, subsequent interest-rate increases did not have a dramatic impact on
the markets. The interest-rate outlook may continue to be affected, to some
extent, by the same low-inflation environment that helped drive rates to a
45-year low in mid-2003.
STOCKS AND BONDS END POSITIVE
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The reporting period began with concerns over disappointing job gains,
which kept bond yields low while putting a damper on the stock market. The
strong corporate earnings reports during the year pleasantly surprised investors
and helped stocks--the S&P 500 Index posted a modest 3.4% gain during the first
half of the year. Stocks then continued with back-to-back monthly gains through
the end of the year, with fourth quarter contributing the biggest gain of 9.2%
in the S&P 500 Index, enough to lift the benchmark's annual return to double
digits for a second straight year.
Disappointing inflation reports and interest-rate increases pushed bond
yields higher, with U.S. Treasuries generating a (0.2)% return for the first six
months of the year. By third quarter, though, bonds (measured by the Lehman
Aggregate Bond Index of investment-grade, taxable securities) posted their best
quarterly return in two years of 3.2% and ended the year at 4.3%. Corporate and
mortgage-backed securities led the way during the period and for the year as a
whole.
OUR COMMITMENT TO OUR SHAREHOLDERS
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One can't predict the markets, especially during periods of economic
change and uncertainty, and therefore, we believe that the best course for
investors is to invest for the long term and to periodically review and
reallocate their portfolio based on their goals and risk tolerance. As far as
economic uncertainty, we will continue to monitor how various domestic and
international influences may impact our Funds so we can potentially anticipate
opportunities as well as risks.
Thank you for choosing the 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. You may also visit our Web site at www.wellsfargofunds.com.
Sincerely,
/s/ Karla M. Rabusch
Karla M. Rabusch
President
WELLS FARGO FUNDS
1
WELLS FARGO VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS
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VARIABLE TRUST ASSET ALLOCATION FUND
INVESTMENT OBJECTIVE
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The Wells Fargo Variable Trust Asset Allocation Fund (the Fund) seeks
long-term total return, consistent with reasonable risk.
ADVISER SUB-ADVISER
Wells Fargo Funds Management, LLC Wells Capital Management Incorporated
FUND MANAGER INCEPTION DATE
Galen G. Blomster, CFA 04/15/94
Jeffrey P. Mellas
HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD?
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The Fund returned 9.34%(1) for the 12-month period ended December 31,
2004, underperforming its benchmark, the S&P 500 Index(2), which returned
10.87%, and outperforming its other benchmark, the Lehman Brothers 20+ Treasury
Index(3), which returned 8.99% for the same period. The Fund distributed $0.26
per share in dividend income and $0.40 per share in capital gains during the
period.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT
PERFORMANCE IS AVAILABLE BY CALLING 1-800-222-8222 OR BY VISITING THE FUND'S WEB
SITE AT WWW.WELLSFARGOFUNDS.COM.
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.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
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During the 12 months ended December 31, 2004, the Fund's stock holdings
outperformed its bond holdings. While the S&P 500 Index returned nearly 11% over
the 12-month period, all the gains occurred in the last three months of the
year. Both the stock and bond markets followed a volatile path that encompassed
a myriad of investor concerns throughout the year, followed by a post-election
stock market rally despite concerns over rising inflation late in the year.
Rising commodity prices and a declining U.S. dollar helped to push bond yields
higher at mid-year. However, bond yields ended the year slightly lower than they
began the year. Market volatility and the decoupling of the stock and bond
markets continued to create potential 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% shift toward stocks throughout the
12-month period.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
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In implementing the shift toward stocks, the Fund employed a hedged
futures overlay transaction, thus maintaining the portfolio's underlying assets
near their long-term strategic allocation of 60% stocks and 40% bonds. With the
shift toward stocks, the portfolio maintained a long position in S&P 500 Index
futures and was short in long-term U.S. Treasury bond futures. Throughout the
12-month period, the Fund was at a maximum equity overweighting with an
effective target allocation of 85% stocks and 15% bonds.
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
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With stocks outperforming bonds, the 25% TAA shift toward stocks helped
contribute to the returns of the portfolio over the past 12 months. The TAA
Model continues to indicate that stocks are still compellingly attractive
relative to bonds. As a result, the Fund will maintain its overweighting in
stocks until the relative valuation between stocks and bonds shifts.
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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, 2004, 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) The Fund's Adviser has committed through April 30, 2005 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 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) 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.
2
PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS
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AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF DECEMBER 31, 2004)
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6-Month* 1-Year 5-Year 10-Year
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Wells Fargo Variable Trust Asset Allocation Fund 6.91 9.34 1.81 10.03
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Benchmarks
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S&P 500 Index(2) 7.19 10.87 (2.30) 12.07
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Lehman Brothers 20+ Treasury Index(3) 9.24 8.99 10.33 9.81
* RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS(4) (AS OF DECEMBER 31, 2004)
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Beta** 0.71
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Average Coupon of Bond Portfolio 5.85%
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Average Maturity of Bond Portfolio 21.90 years
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Average Duration of Bond Portfolio 12.30 years
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Portfolio Turnover 5%
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Net Asset Value (NAV) $12.97
** A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE BENCHMARK
BETA IS 1.00 BY DEFINITION.
STRATEGIC ALLOCATION(4) (AS OF DECEMBER 31, 2004)
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Stocks 60%
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Bonds 40%
SECTOR DISTRIBUTION(4) (AS OF DECEMBER 31, 2004)
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[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Consumer Discretionary 12%
Consumer Staples 10%
Energy 7%
Financials 21%
Health Care 13%
Industrials 12%
Information Technology 16%
Materials 3%
Telecommunication Services 3%
Utilities 3%
TEN LARGEST HOLDINGS(4),(5) (AS OF DECEMBER 31, 2004)
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U.S. Treasury Bonds 6.13% 11/15/2027 2.94%
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U.S. Treasury Bonds 6.25% 05/15/2030 2.44%
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U.S. Treasury Bonds 5.38% 02/15/2031 2.18%
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U.S. Treasury Bonds 6.00% 02/15/2026 1.80%
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U.S. Treasury Bonds 6.88% 08/15/2025 1.59%
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U.S. Treasury Bonds 6.13% 08/15/2029 1.50%
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U.S. Treasury Bonds 6.50% 11/15/2026 1.49%
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U.S. Treasury Bonds 5.50% 08/15/2028 1.46%
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U.S. Treasury Bonds 7.63% 02/15/2025 1.44%
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U.S. Treasury Bonds 5.25% 02/15/2029 1.37%
EFFECTIVE ALLOCATION(4),(6) (AS OF DECEMBER 31, 2004)
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Stocks 85%
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Bonds 15%
GROWTH OF $10,000 INVESTMENT(7)
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[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Wells Fargo Variable Lehman Brothers 20+ S&P 500
Trust Asset Allocation Fund Treasury Index Index
12/31/1994 10,000 $10,000 $10,000
1/31/1995 10,268 $10,272 $10,259
2/28/1995 10,587 $10,560 $10,659
3/31/1995 10,772 $10,660 $10,973
4/30/1995 11,012 $10,852 $11,295
5/31/1995 11,555 $11,747 $11,746
6/30/1995 11,737 $11,889 $12,019
7/31/1995 11,896 $11,678 $12,417
8/31/1995 11,991 $11,958 $12,448
9/30/1995 12,299 $12,194 $12,973
10/31/1995 12,374 $12,560 $12,927
11/30/1995 12,716 $12,887 $13,494
12/31/1995 12,895 $13,258 $13,754
1/31/1996 13,135 $13,243 $14,221
2/29/1996 13,032 $12,540 $14,354
3/31/1996 13,108 $12,269 $14,491
4/30/1996 13,085 $12,052 $14,704
5/31/1996 13,200 $11,988 $15,082
6/30/1996 13,379 $12,255 $15,140
7/31/1996 13,075 $12,255 $14,470
8/31/1996 13,051 $12,080 $14,776
9/30/1996 13,551 $12,432 $15,606
10/31/1996 14,026 $12,953 $16,037
11/30/1996 14,749 $13,415 $17,248
12/31/1996 14,372 $13,065 $16,906
1/31/1997 14,649 $12,948 $17,963
2/28/1997 14,687 $12,950 $18,103
3/31/1997 14,163 $12,594 $17,361
4/30/1997 14,737 $12,915 $18,395
5/31/1997 15,234 $13,064 $19,514
6/30/1997 15,643 $13,337 $20,388
7/31/1997 16,714 $14,193 $22,009
8/31/1997 16,030 $13,754 $20,776
9/30/1997 16,634 $14,162 $21,913
10/31/1997 16,660 $14,683 $21,181
11/30/1997 17,039 $14,914 $22,162
12/31/1997 17,372 $15,178 $22,543
1/31/1998 17,633 $15,497 $22,791
2/28/1998 18,416 $15,373 $24,434
3/31/1998 19,079 $15,404 $25,685
4/30/1998 19,240 $15,455 $25,947
5/31/1998 19,138 $15,782 $25,501
6/30/1998 19,850 $16,198 $26,536
7/31/1998 19,658 $16,106 $26,255
8/31/1998 17,784 $16,893 $22,461
9/30/1998 18,783 $17,516 $23,901
10/31/1998 19,865 $17,218 $25,844
11/30/1998 20,828 $17,376 $27,410
12/31/1998 21,761 $17,336 $28,989
1/31/1999 22,505 $17,501 $30,200
2/28/1999 21,696 $16,566 $29,261
3/31/1999 22,315 $16,492 $30,432
4/30/1999 22,948 $16,506 $31,609
5/31/1999 22,461 $16,244 $30,863
6/30/1999 23,088 $16,045 $32,576
7/31/1999 22,582 $15,953 $31,559
8/31/1999 22,468 $15,879 $31,403
9/30/1999 22,143 $15,993 $30,542
10/31/1999 22,930 $15,995 $32,476
11/30/1999 23,127 $15,873 $33,135
12/31/1999 23,790 $15,593 $35,087
1/31/2000 23,296 $15,864 $33,325
2/29/2000 23,461 $16,427 $32,695
3/31/2000 25,151 $17,042 $35,893
4/30/2000 24,604 $16,873 $34,813
5/31/2000 24,189 $16,788 $34,099
6/30/2000 24,751 $17,153 $34,941
7/31/2000 24,651 $17,492 $34,396
8/31/2000 25,796 $17,919 $36,532
9/30/2000 24,786 $17,612 $34,603
10/31/2000 24,856 $17,907 $34,458
11/30/2000 23,800 $18,514 $31,743
12/31/2000 24,033 $18,947 $31,898
1/31/2001 24,641 $18,945 $33,030
2/28/2001 23,024 $19,278 $30,021
3/31/2001 21,907 $19,124 $28,121
4/30/2001 22,955 $18,524 $30,303
5/31/2001 23,113 $18,555 $30,506
6/30/2001 22,782 $18,746 $29,765
7/31/2001 22,887 $19,487 $29,473
8/31/2001 22,089 $19,954 $27,631
9/30/2001 20,989 $20,000 $25,401
10/31/2001 21,622 $21,190 $25,887
11/30/2001 22,364 $20,067 $27,872
12/31/2001 22,361 $19,634 $28,117
1/31/2002 22,198 $19,909 $27,707
2/28/2002 21,944 $20,128 $27,172
3/31/2002 22,220 $19,198 $28,194
4/30/2002 21,636 $19,985 $26,485
5/31/2002 21,545 $19,987 $26,292
6/30/2002 20,815 $20,341 $24,420
7/31/2002 19,741 $20,985 $22,518
8/31/2002 19,963 $22,081 $22,664
9/30/2002 18,270 $23,059 $20,203
10/31/2002 19,481 $22,199 $21,978
11/30/2002 20,412 $22,019 $23,271
12/31/2002 19,488 $22,972 $21,905
1/31/2003 19,057 $22,901 $21,333
2/28/2003 18,851 $23,625 $21,013
3/31/2003 18,971 $23,230 $21,215
4/30/2003 20,287 $23,528 $22,963
5/31/2003 21,302 $25,036 $24,171
6/30/2003 21,455 $24,523 $24,480
7/31/2003 21,399 $21,997 $24,911
8/31/2003 21,795 $22,476 $25,397
9/30/2003 21,741 $23,710 $25,128
10/31/2003 22,631 $22,978 $26,547
11/30/2003 22,802 $23,111 $26,781
12/31/2003 23,794 $23,386 $28,184
1/31/2004 24,212 $23,856 $28,703
2/29/2004 24,536 $24,374 $29,102
3/31/2004 24,270 $24,747 $28,662
4/30/2004 23,697 $23,200 $28,212
5/31/2004 23,926 $23,105 $28,599
6/30/2004 24,335 $23,329 $29,154
7/31/2004 23,701 $23,756 $28,189
8/31/2004 23,899 $24,739 $28,302
9/30/2004 24,124 $25,007 $28,608
10/31/2004 24,483 $25,432 $29,046
11/30/2004 25,220 $24,801 $30,221
12/31/2004 26,017 $25,485 $31,248
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(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 most recent ten years 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
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VARIABLE TRUST EQUITY INCOME FUND
INVESTMENT OBJECTIVE
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The Wells Fargo Variable Trust Equity Income Fund (the Fund) seeks
long-term capital appreciation and above-average dividend income.
ADVISER SUB-ADVISER
Wells Fargo Funds Management, LLC Wells Capital Management Incorporated
FUND MANAGERS INCEPTION DATE
David L. Roberts, CFA 05/06/96
Gary J. Dunn, CFA
HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD?
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The Fund returned 11.08%(1) for the 12-month period ended December 31,
2004, outperforming the S&P 500 Index(2), which returned 10.87%, and
underperforming the Russell 1000 Value Index(3), which returned 16.49% for the
same period. The Fund distributed $0.24 per share in dividend income and no
capital gains during the period.
The equity markets posted back-to-back gains in 2004, for the first time
since 1999. Overall, small and mid cap stocks significantly outperformed large
cap stocks.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT
PERFORMANCE IS AVAILABLE BY CALLING 1-800-222-8222 OR BY VISITING THE FUND'S WEB
SITE AT WWW.WELLSFARGOFUNDS.COM.
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.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
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Sectors that contributed to the Fund's performance during the period
included energy, utilities, consumer discretionary and consumer staples. Energy
company holdings benefited from crude oil prices that peaked at $55 per barrel
during the year, and were up 34% for the year. Our utility company holding,
Public Service Enterprise Group, was up about 20% due to a take-over bid from
Exelon. Other holdings that outperformed included Target, which was aided by
strong operating results and the sale of its Marshall Fields division;
McDonalds, which rose more than 30% for the period as the company's renewed
focus on its core business improved operating results; and Altria, up almost 20%
for the period as the litigation environment for the company's Philip Morris
division improved.
Sectors that hurt the Fund's performance during the period included
information technology, health care, materials and industrials.
Hewlett-Packard's disappointing third-quarter 2004 results had a negative impact
on the Fund. Holdings in pharmaceutical companies Merck and Pfizer were both
adversely affected by news of a connection between their COX-2 inhibitors (Vioxx
and Celebrex) and increased cardiac risks.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
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Portfolio activity throughout the year focused on diversification and
positioning for growth in, what we believed to be, a moderate-growth economy
with somewhat higher interest rates. New positions were established in
Microsoft, Baxter International, Morgan Stanley, Intel and Wyeth. Numerous buys
and sells of existing holdings were used to adjust sector and stock weightings.
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
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The Fund's focus continues to be on large cap, high-quality,
dividend-paying companies. We believe the valuation of large cap stocks is
compelling relative to small and mid cap stocks. This is because small and mid
cap stocks have outperformed large cap stocks over the past several years,
pushing valuations to historically high levels. We also believe that the
favorable tax treatment of dividends could be a positive development for
investors since dividend paying stocks could receive favorable tax treatment. We
believe that market fundamentals, such as dividend yield, valuation and expected
long-term earnings growth, are also very attractive. We believe these favorable
characteristics may mean potentially better total returns for the Fund.
- --------------------------------------------------------------------------------
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, 2004, 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) The Fund's Adviser has committed through April 30, 2005, 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 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
PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
6-Month* 1-Year 5-Year Life of Fund
- ----------------------------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust Equity Income Fund (incept. 05/06/96) 7.66 11.08 1.84 8.04
- ----------------------------------------------------------------------------------------------------------------------
Benchmarks
- ----------------------------------------------------------------------------------------------------------------------
S&P 500 Index(2) 7.19 10.87 (2.30) 9.09
- ----------------------------------------------------------------------------------------------------------------------
Russell 1000 Value Index(3) 12.08 16.49 5.27 11.09
* RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS(4) (AS OF DECEMBER 31, 2004)
- -------------------------------------------------------------
Beta** 0.86
- -------------------------------------------------------------
Price to Earnings Ratio (trailing 12 months) 16.50x
- -------------------------------------------------------------
Price to Book Ratio 2.80x
- -------------------------------------------------------------
Median Market Cap ($B) $58.50
- -------------------------------------------------------------
Portfolio Turnover 13%
- -------------------------------------------------------------
Net Asset Value (NAV) $16.33
** A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE BENCHMARK
BETA IS 1.00 BY DEFINITION.
SECTOR DISTRIBUTION(4) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Consumer Discretionary 13%
Consumer Staples 11%
Energy 11%
Financial Services 24%
Health Care 6%
Industrials 12%
Information Technology 10%
Materials 5%
Telecommunication Services 3%
Utilities 4%
Cash 1%
TEN LARGEST EQUITY HOLDINGS(4),(5) (AS OF DECEMBER 31, 2004)
- -------------------------------------------------------------
ExxonMobil Corporation 4.21%
- -------------------------------------------------------------
General Electric Company 3.98%
- -------------------------------------------------------------
US Bancorp 3.60%
- -------------------------------------------------------------
Emerson Electric Company 3.55%
- -------------------------------------------------------------
Fortune Brands Incorporated 3.48%
- -------------------------------------------------------------
JP Morgan Chase & Company 3.39%
- -------------------------------------------------------------
PepsiCo Incorporated 3.38%
- -------------------------------------------------------------
Target Corporation 3.09%
- -------------------------------------------------------------
Hewlett-Packard Company 3.09%
- -------------------------------------------------------------
McDonald's Corporation 2.95%
GROWTH OF $10,000 INVESTMENT(6)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Wells Fargo Variable Russell 1000
Trust Equity Income Fund S&P 500 Index Value Index
5/6/1996 10000 10000 10000
May-96 10000 10,442.00 10,338.00
Jun-96 10110 10,481.68 10,346.27
Jul-96 9710 10,018.39 9,955.18
Aug-96 9830 10,229.78 10,239.90
Sep-96 10250 10,804.69 10,646.42
Oct-96 10490 11,102.90 11,058.44
Nov-96 11170 11,941.17 11,860.18
Dec-96 10995 11,704.73 11,708.37
Jan-97 11540 12,436.28 12,276.22
Feb-97 11691 12,533.28 12,456.68
Mar-97 11348 12,019.42 12,008.24
Apr-97 11681 12,735.78 12,512.59
May-97 12215 13,510.11 13,212.04
Jun-97 12719 14,115.36 13,778.84
Jul-97 13535 15,237.54 14,816.39
Aug-97 12910 14,384.23 14,288.92
Sep-97 13525 15,171.05 15,151.97
Oct-97 13132 14,664.34 14,729.23
Nov-97 13716 15,343.30 15,380.27
Dec-97 13953 15,607.20 15,829.37
Jan-98 13994 15,778.88 15,606.17
Feb-98 14902 16,916.54 16,656.47
Mar-98 15647 17,782.66 17,675.85
Apr-98 15800 17,964.05 17,794.27
May-98 15585 17,655.07 17,530.92
Jun-98 15830 18,371.86 17,755.32
Jul-98 15381 18,177.12 17,441.05
Aug-98 13545 15,550.53 14,845.82
Sep-98 14290 16,547.31 15,697.97
Oct-98 15290 17,892.61 16,914.56
Nov-98 15993 18,976.90 17,702.78
Dec-98 16523 20,069.97 18,306.44
Jan-99 16472 20,908.90 18,452.90
Feb-99 16482 20,258.63 18,192.71
Mar-99 17091 21,068.98 18,569.30
Apr-99 17959 21,884.35 20,303.67
May-99 17917 21,367.88 20,080.33
Jun-99 18630 22,553.79 20,662.66
Jul-99 18145 21,849.66 20,057.24
Aug-99 17856 21,741.51 19,313.12
Sep-99 17195 21,145.57 18,639.09
Oct-99 17659 22,484.09 19,712.70
Nov-99 17814 22,940.51 19,558.95
Dec-99 17829 24,291.71 19,652.83
Jan-00 16911 23,072.27 19,012.15
Feb-00 15607 22,636.20 17,599.54
Mar-00 17163 24,850.02 19,746.69
Apr-00 17132 24,102.04 19,517.63
May-00 17435 23,607.94 19,722.56
Jun-00 17021 24,191.06 18,821.24
Jul-00 16706 23,813.68 19,056.51
Aug-00 17637 25,292.51 20,116.05
Sep-00 17459 23,957.07 20,301.12
Oct-00 17951 23,856.45 20,800.52
Nov-00 17341 21,976.56 20,028.82
Dec-00 18245 22,084.24 21,032.27
Jan-01 18202 22,868.23 21,112.19
Feb-01 17676 20,784.94 20,525.27
Mar-01 16696 19,469.25 19,800.73
Apr-01 17825 20,980.06 20,770.97
May-01 18158 21,120.63 21,238.31
Jun-01 17631 20,607.40 20,766.82
Jul-01 17459 20,405.45 20,723.21
Aug-01 17087 19,130.11 19,892.21
Sep-01 16000 17,586.31 18,491.80
Oct-01 16188 17,922.21 18,332.77
Nov-01 17065 19,296.84 19,397.90
Dec-01 17257 19,466.65 19,855.69
Jan-02 17002 19,182.44 19,702.80
Feb-02 17124 18,812.22 19,734.33
Mar-02 17712 19,519.56 20,667.76
Apr-02 17132 18,336.67 19,958.86
May-02 17121 18,202.81 20,058.65
Jun-02 16206 16,906.77 18,907.29
Jul-02 14729 15,589.74 17,148.91
Aug-02 14830 15,691.07 17,279.24
Sep-02 12868 13,987.02 15,357.79
Oct-02 13835 15,216.48 16,495.80
Nov-02 14702 16,111.21 17,535.04
Dec-02 13933 15,165.48 16,774.02
Jan-03 13571 14,769.66 16,368.08
Feb-03 13164 14,548.11 15,931.06
Mar-03 13201 14,687.78 15,958.14
Apr-03 14268 15,898.05 17,362.46
May-03 15086 16,734.29 18,484.07
Jun-03 15376 16,948.49 18,715.12
Jul-03 15652 17,246.78 18,993.98
Aug-03 15722 17,583.09 19,290.28
Sep-03 15633 17,396.71 19,101.24
Oct-03 16454 18,379.62 20,270.23
Nov-03 16630 18,541.37 20,545.91
Dec-03 17585 19,512.93 21,811.54
Jan-04 17880 19,871.97 22,195.09
Feb-04 18339 20,148.19 22,670.78
Mar-04 18136 19,843.95 22,472.34
Apr-04 17853 19,532.40 21,924.02
May-04 17876 19,800.00 22,147.64
Jun-04 18144 20,184.12 22,670.32
Jul-04 17777 19,516.22 22,351.01
Aug-04 17931 19,594.62 22,668.87
Sep-04 18082 19,806.71 23,020.26
Oct-04 18213 20,109.32 23,402.92
Nov-04 18974 20,922.78 24,586.13
Dec-04 19534 21,634.39 25,409.44
- --------------------------------------------------------------------------------
(4) Portfolio holdings and characteristics are subject to change.
(5) The Ten Largest Equity Holdings are calculated based on the market value of
the securities divided by total market value of the portfolio.
(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
- --------------------------------------------------------------------------------
VARIABLE TRUST 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 SUB-ADVISER
Wells Fargo Funds Management, LLC Wells Capital Management Incorporated
FUND MANAGERS INCEPTION DATE
David L. Roberts, CFA 05/01/98
Gary J. Dunn, CFA
HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD?
- --------------------------------------------------------------------------------
The Fund returned 11.22%(1) for the 12-month period ended December 31,
2004, outperforming the S&P 500 Index(2), which returned 10.87%, and
underperforming the Russell 1000 Value Index(3), which returned 16.49% for the
same period. The Fund distributed $0.14 per share in dividend income and no
capital gains during the period.
The equity markets posted back-to-back gains in 2004, for the first time
since 1999. Overall, small and mid cap stocks significantly outperformed large
cap stocks.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT
PERFORMANCE IS AVAILABLE BY CALLING 1-800-222-8222 OR BY VISITING THE FUND'S WEB
SITE AT WWW.WELLSFARGOFUNDS.COM.
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.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
- --------------------------------------------------------------------------------
Sectors that contributed to the Fund's performance during the period
included energy, utilities, consumer discretionary and consumer staples. Energy
company holdings benefited from crude oil prices that peaked at $55 per barrel
during the year, and were up 34% for the year. Our utility company holding,
Public Service Enterprise Group, was up about 20% due to a take-over bid from
Exelon. Other holdings that outperformed included Target, which was aided by
strong operating results and the sale of its Marshall Fields division;
McDonalds, which rose more than 30% for the period as the company's renewed
focus on its core business improved operating results; and Altria, up almost 20%
for the period as the litigation environment for the company's Philip Morris
division improved.
Sectors that hurt the Fund's performance during the period included
information technology, health care, materials and industrials.
Hewlett-Packard's disappointing third-quarter 2004 results had a negative impact
on the Fund. Holdings in pharmaceutical companies Merck and Pfizer were both
adversely affected by news of a connection between their COX-2 inhibitors (Vioxx
and Celebrex) and increased cardiac risks.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
- --------------------------------------------------------------------------------
Portfolio activity throughout the year focused on diversification and
positioning for growth in, what we believed to be, a moderate-growth economy
with somewhat higher interest rates. New positions were established in
Microsoft, Baxter International, Morgan Stanley, Intel and Wyeth. Numerous buys
and sells of existing holdings were used to adjust sector and stock weightings.
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
- --------------------------------------------------------------------------------
The Fund's focus continues to be on large cap, high-quality,
dividend-paying companies. We believe the valuation of large cap stocks is
compelling relative to small and mid cap stocks. This is because small and mid
cap stocks have outperformed large cap stocks over the past several years,
pushing valuations to historically high levels. We also believe that the
favorable tax treatment of dividends could be a positive development for
investors since dividend paying stocks could receive favorable tax treatment. We
believe that market fundamentals, such as dividend yield, valuation and expected
long-term earnings growth, are also very attractive. We believe these favorable
characteristics may mean potentially better total returns for the Fund.
- --------------------------------------------------------------------------------
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, 2004, 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) The Fund's Adviser has committed through April 30, 2005 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 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.
6
PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
6-Month* 1-Year 5-Year Life of Fund
- -------------------------------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust Equity Value Fund (incept. 05/01/98) 7.68 11.22 0.98 (0.22)
- -------------------------------------------------------------------------------------------------------------------------
Benchmarks
- -------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(2) 7.19 10.87 (2.30) 2.82
- -------------------------------------------------------------------------------------------------------------------------
Russell 1000 Value Index(3) 12.08 16.49 5.27 5.49
* RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS(4) (AS OF DECEMBER 31, 2004)
- -------------------------------------------------------------
Beta** 0.86
- -------------------------------------------------------------
Price to Earnings Ratio (trailing 12 months) 16.50x
- -------------------------------------------------------------
Price to Book Ratio 2.80x
- -------------------------------------------------------------
Median Market Cap ($B) $57.70
- -------------------------------------------------------------
Portfolio Turnover 16%
- -------------------------------------------------------------
Net Asset Value (NAV) $9.13
** A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE BENCHMARK
BETA IS 1.00 BY DEFINITION.
SECTOR DISTRIBUTION(4) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Consumer Discretionary 13%
Consumer Staples 11%
Energy 11%
Financials 25%
Health Care 6%
Industrials 12%
Information Technology 10%
Materials 5%
Telecommunication Services 3%
Utilities 4%
TEN LARGEST EQUITY HOLDINGS(4),(5) (AS OF DECEMBER 31, 2004)
- -------------------------------------------------------------
Exxon Mobil Corporation 4.24%
- -------------------------------------------------------------
General Electric Company 4.01%
- -------------------------------------------------------------
US Bancorp 3.63%
- -------------------------------------------------------------
Emerson Electric Company 3.58%
- -------------------------------------------------------------
Fortune Brands Incorporated 3.51%
- -------------------------------------------------------------
JP Morgan Chase & Company 3.42%
- -------------------------------------------------------------
PepsiCo Incorporated 3.41%
- -------------------------------------------------------------
Target Corporation 3.16%
- -------------------------------------------------------------
Hewlett-Packard Company 3.11%
- -------------------------------------------------------------
McDonald's Corporation 2.97%
GROWTH OF $10,000 INVESTMENT(6)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Wells Fargo Variable Russell 1000
Trust Equity Value Fund Value Index S&P 500 Index
05/01/98 $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
Jan-04 $ 9,008 $12,473 $11,062
Feb-04 $ 9,253 $12,740 $11,216
Mar-04 $ 9,147 $12,629 $11,046
Apr-04 $ 8,998 $12,321 $10,873
May-04 $ 9,009 $12,446 $11,022
Jun-04 $ 9,151 $12,740 $11,236
Jul-04 $ 8,969 $12,561 $10,864
Aug-04 $ 9,044 $12,739 $10,908
Sep-04 $ 9,111 $12,937 $11,026
Oct-04 $ 9,176 $13,152 $11,194
Nov-04 $ 9,562 $13,817 $11,647
Dec-04 $ 9,854 $14,280 $12,043
- --------------------------------------------------------------------------------
(4) Portfolio holdings and characteristics are subject to change.
(5) The Ten Largest Equity Holdings are calculated based on the market value of
the securities divided by total market value of the portfolio.
(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
- --------------------------------------------------------------------------------
VARIABLE TRUST GROWTH FUND
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo Variable Trust Growth Fund (the Fund) seeks long-term
capital appreciation.
ADVISER SUB-ADVISER
Wells Fargo Funds Management, LLC Wells Capital Management Incorporated
FUND MANAGERS INCEPTION DATE
Deborah Meacock, CFA 04/12/94
Stephen M. Kensinger, CFA
HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD?
- --------------------------------------------------------------------------------
The Fund returned 8.38%(1) for the 12-month period ended December 31,
2004, underperforming its benchmark, the S&P 500 Index(2), which returned 10.87%
for the same period. The Fund distributed no dividend income and no capital
gains during the period.
The equity markets remained flat throughout 2004 until the fourth quarter
when the stock market rallied once the uncertainties of the year came to
pass--election results were known, oil prices steadied, inflation stayed in
check, the Federal Reserve Board did not raise rates aggressively, new job
growth became evident, corporate profits were healthy and consumer confidence
and spending were solid. The Fund posted its strongest quarter in fourth quarter
of 2004.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT
PERFORMANCE IS AVAILABLE BY CALLING 1-800-222-8222 OR BY VISITING THE FUND'S WEB
SITE AT WWW.WELLSFARGOFUNDS.COM.
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.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
- --------------------------------------------------------------------------------
The Fund's strategy was focused on long-term growth stocks and the S&P 500
Index performance was led by value stocks. Therefore, the S&P 500 Index
benchmark outperformed the growth strategy of the Fund. In spite of that, there
were several holdings that performed well: Apple Computer, whose stock price was
driven by the phenomenal sales of iPods and crossover sales of iMac PCs;
Starbucks and eBay, which both continued their strong performance as each posted
record sales; and QualComm, who was transitioning to cell phones with new
features such as Internet access and digital photography.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
- --------------------------------------------------------------------------------
Throughout the year, we increased the Fund's exposure to manufacturing and
industrial companies that benefit from the weak U.S. dollar and strong global
economic recovery. We trimmed financial holdings and consumer staples companies
where rising commodity prices were pressuring profit margins. In the technology
sector, we trimmed exposure to chip manufacturers, as world inventories were too
high for demand, and added positions to high-growth software companies. In
health care, we continued to trim drug companies from the portfolio, instead
adding higher-growth biotech and medical device companies.
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
- --------------------------------------------------------------------------------
We continue to see evidence of economic strength as we look forward. We
believe that the weak U.S. dollar could improve exports from the U.S.
manufacturing and industrial sectors. We see many corporations entering 2005
holding very high levels of cash, which we believe could lead to a modest
increase in business spending in technology. With interest rates and inflation
at low levels, job growth on the rise and modest wage increases, we believe that
consumers could potentially keep spending. We continue to focus on the most
innovative areas of health care: cancer treatment, heart devices, orthopedics
and ways to control the cost of health care, such as drug benefit management and
new managed care programs.
- --------------------------------------------------------------------------------
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, 2004, 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) The Fund's Adviser has committed through April 30, 2005 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 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.
(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.
8
PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
6-Month* 1-Year 5-Year 10-Year
- -------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust Growth Fund 5.35 8.38 (7.06) 7.16
- -------------------------------------------------------------------------------------------------
Benchmark
- -------------------------------------------------------------------------------------------------
S&P 500 Index(2) 7.19 10.87 (2.30) 12.07
- -------------------------------------------------------------------------------------------------
* RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS(3)(AS OF DECEMBER 31, 2004)
- -------------------------------------------------------------
Beta** 0.92
- -------------------------------------------------------------
Price to Earnings Ratio (trailing 12 months) 30.30x
- -------------------------------------------------------------
Price to Book Ratio 5.10x
- -------------------------------------------------------------
Median Market Cap ($B) $25.31
- -------------------------------------------------------------
Portfolio Turnover 45%
- -------------------------------------------------------------
Net Asset Value (NAV) $13.97
** A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE BENCHMARK
BETA IS 1.00 BY DEFINITION.
SECTOR DISTRIBUTION(3) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Consumer Discretionary 15%
Consumer Staples 8%
Energy 4%
Financials 6%
Health Care 24%
Industrials 10%
Information Technology 30%
Materials 1%
Cash 2%
TEN LARGEST EQUITY HOLDINGS(3),(4) (AS OF DECEMBER 31, 2004)
- -------------------------------------------------------------
eBay Incorporated 4.51%
- -------------------------------------------------------------
Starbucks Corporation 3.96%
- -------------------------------------------------------------
Qualcomm Incorporated 3.46%
- -------------------------------------------------------------
Apple Computer Incorporated 3.22%
- -------------------------------------------------------------
Dell Incorporated 2.94%
- -------------------------------------------------------------
Microsoft Corporation 2.93%
- -------------------------------------------------------------
Target Corporation 2.46%
- -------------------------------------------------------------
Danaher Corporation 2.25%
- -------------------------------------------------------------
General Electric Company 2.24%
- -------------------------------------------------------------
Electronic Arts Incorporated 2.07%
GROWTH OF $10,000 INVESTMENT(5)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Wells Fargo Variable
Trust Equity Value Fund S&P 500 Index
Dec-94 10,000 $10,000
Jan-95 10,058 $10,259
Feb-95 10,524 $10,659
Mar-95 10,756 $10,973
Apr-95 10,903 $11,295
May-95 11,420 $11,746
Jun-95 11,687 $12,019
Jul-95 12,050 $12,417
Aug-95 12,247 $12,448
Sep-95 12,657 $12,973
Oct-95 12,253 $12,927
Nov-95 12,756 $13,494
Dec-95 12,919 $13,754
Jan-96 13,160 $14,221
Feb-96 13,650 $14,354
Mar-96 13,685 $14,491
Apr-96 14,137 $14,704
May-96 14,488 $15,082
Jun-96 14,240 $15,140
Jul-96 13,504 $14,470
Aug-96 13,897 $14,776
Sep-96 14,595 $15,606
Oct-96 14,989 $16,037
Nov-96 15,949 $17,248
Dec-96 15,818 $16,906
Jan-97 16,725 $17,963
Feb-97 16,241 $18,103
Mar-97 15,676 $17,361
Apr-97 16,307 $18,395
May-97 17,342 $19,514
Jun-97 17,715 $20,388
Jul-97 19,157 $22,009
Aug-97 18,047 $20,776
Sep-97 18,767 $21,913
Oct-97 18,174 $21,181
Nov-97 18,455 $22,162
Dec-97 18,560 $22,543
Jan-98 18,903 $22,791
Feb-98 19,920 $24,434
Mar-98 20,876 $25,685
Apr-98 21,020 $25,947
May-98 20,699 $25,501
Jun-98 21,704 $26,536
Jul-98 21,594 $26,255
Aug-98 18,588 $22,461
Sep-98 19,447 $23,901
Oct-98 21,024 $25,844
Nov-98 22,435 $27,410
Dec-98 23,907 $28,989
Jan-99 24,826 $30,200
Feb-99 23,991 $29,261
Mar-99 25,133 $30,432
Apr-99 25,897 $31,609
May-99 25,097 $30,863
Jun-99 26,500 $32,576
Jul-99 25,736 $31,559
Aug-99 25,772 $31,403
Sep-99 25,082 $30,542
Oct-99 26,551 $32,476
Nov-99 27,136 $33,135
Dec-99 28,788 $35,087
Jan-00 27,509 $33,325
Feb-00 27,139 $32,695
Mar-00 29,564 $35,893
Apr-00 28,489 $34,813
May-00 27,724 $34,099
Jun-00 28,740 $34,941
Jul-00 28,429 $34,396
Aug-00 30,211 $36,532
Sep-00 28,475 $34,603
Oct-00 27,666 $34,458
Nov-00 24,717 $31,743
Dec-00 24,873 $31,898
Jan-01 25,200 $33,030
Feb-01 22,799 $30,021
Mar-01 20,945 $28,121
Apr-01 22,642 $30,303
May-01 22,720 $30,506
Jun-01 21,911 $29,765
Jul-01 21,324 $29,473
Aug-01 19,597 $27,631
Sep-01 18,184 $25,401
Oct-01 18,783 $25,887
Nov-01 20,025 $27,872
Dec-01 20,096 $28,117
Jan-02 19,468 $27,707
Feb-02 18,840 $27,172
Mar-02 19,511 $28,194
Apr-02 18,797 $26,485
May-02 18,669 $26,292
Jun-02 17,633 $24,420
Jul-02 15,632 $22,518
Aug-02 15,661 $22,664
Sep-02 14,732 $20,203
Oct-02 15,575 $21,978
Nov-02 15,746 $23,271
Dec-02 14,903 $21,905
Jan-03 14,646 $21,333
Feb-03 14,575 $21,013
Mar-03 14,846 $21,215
Apr-03 15,618 $22,963
May-03 16,161 $24,171
Jun-03 16,175 $24,480
Jul-03 16,747 $24,911
Aug-03 17,161 $25,397
Sep-03 16,704 $25,128
Oct-03 17,861 $26,547
Nov-03 17,933 $26,781
Dec-03 18,418 $28,184
Jan-04 18,690 $28,703
Feb-04 18,790 $29,102
Mar-04 18,747 $28,662
Apr-04 18,447 $28,212
May-04 18,804 $28,599
Jun-04 18,947 $29,154
Jul-04 17,890 $28,189
Aug-04 17,704 $28,302
Sep-04 18,190 $28,608
Oct-04 18,533 $29,046
Nov-04 19,404 $30,221
Dec-04 19,962 $31,248
- --------------------------------------------------------------------------------
(3) Portfolio holdings and characteristics are subject to change.
(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) The chart compares the performance of the Wells Fargo Variable Trust Growth
Fund for the most recent 10 years 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
- --------------------------------------------------------------------------------
VARIABLE TRUST 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 SUB-ADVISER
Wells Fargo Funds Management, LLC New Star Institutional Managers
FUND MANAGERS INCEPTION DATE
Mark Beale 07/03/00
Richard Lewis
HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD?
- --------------------------------------------------------------------------------
The Fund returned 9.63%(1) for the 12-month period ended December 31,
2004, underperforming its benchmark, the Morgan Stanley Capital
International/Europe, Australasia and Far East (MSCI/EAFE) Index(2), which
returned 20.25% for the same period. The Fund distributed $0.02 per share in
dividend income and no capital gains during the period.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT
PERFORMANCE IS AVAILABLE BY CALLING 1-800-222-8222 OR BY VISITING THE FUND'S WEB
SITE AT WWW.WELLSFARGOFUNDS.COM.
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.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
- --------------------------------------------------------------------------------
The international markets experienced strong gains over the reporting
period as companies generally delivered positive operating performances and
refrained from investing profits in activities such as acquisitions and
expansions. This robust earnings environment was further enhanced by the major
European currencies gaining strength with respect to the U.S. dollar. The
favorable currency movement accounted for about 6.7% of performance of the
MSCI/EAFE benchmark over the period and the gain on the Fund was broadly in line
with this. The Fund was underweighted in the United Kingdom (UK) and Australia
investments while overweighted in investments in Europe and the Pacific.
Australia performed well and gained almost 20% in dollar terms in the final
quarter of 2004. The Pacific (excluding Japan) markets performed well in local
currency terms, but their currencies did not provide the significant gains that
were achieved in other markets.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
- --------------------------------------------------------------------------------
The geographic profile of the Fund was not altered significantly over the
period, though there were a number of changes in our sector positions that led
to higher portfolio turnover. We reduced our overweighting in the energy sector
as earnings could potentially decrease as oil prices lowered. We added a number
of companies in the media sector, which could benefit from a continued recovery
in corporate advertising spending. We purchased Mediaset and WPP Group in Europe
and the UK. We reduced our holdings of consumer staples as we feel that these
companies may struggle to pass on cost increases to consumers and face a
profit-margin squeeze. We sold Northern Foods and Cadbury Schweppes in the UK.
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.
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
- --------------------------------------------------------------------------------
We believe that the outlook for global liquidity is less positive than it
has been for the past few years and we believe that this will prove to be a
challenging environment for Asia (excluding Japan) and emerging markets. We will
look to increase our UK exposure and to reduce our overweighting in Asia
(excluding Japan).
As of September 15, 2004, the Fund changed sub-advisers from Wells Capital
Management to New Star Institutional Managers.
- --------------------------------------------------------------------------------
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, 2004, 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.
(1) The Fund's Adviser has committed through April 30, 2005, 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.
(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.
10
PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
6-Month* 1-Year Life of Fund
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust International Equity Fund (incept. 07/03/00) 10.22 9.63 (3.91)
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark
- ----------------------------------------------------------------------------------------------------------------------------
MSCI/EAFE Index(2) 15.00 20.25 (0.35)
- ----------------------------------------------------------------------------------------------------------------------------
* RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS(3) (AS OF DECEMBER 31, 2004)
- -------------------------------------------------------------
Price to Earnings Ratio (trailing 12 months) 15.80x
- -------------------------------------------------------------
Price to Book Ratio 2.33x
- -------------------------------------------------------------
Median Market Cap ($B) $15.23
- -------------------------------------------------------------
Portfolio Turnover(5) 115%
- -------------------------------------------------------------
Net Asset Value (NAV) $8.27
- -------------------------------------------------------------
PORTFOLIO COMPOSITION(3) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Continental Europe 49%
United Kingdom 19%
Japan 20%
Southeast Asia 8%
Australia/New Zealand 1%
Emerging Markets 3%
TEN LARGEST EQUITY HOLDINGS(3),(4)(AS OF DECEMBER 31, 2004)
- -------------------------------------------------------------
GlaxoSmithKline plc 2.05%
- -------------------------------------------------------------
Royal Dutch Petroleum Company 1.89%
- -------------------------------------------------------------
Total SA ADR 1.88%
- -------------------------------------------------------------
Sanofi-Synthelabo SA 1.85%
- -------------------------------------------------------------
Novartis AG 1.81%
- -------------------------------------------------------------
Nippon Oil Corporation 1.78%
- -------------------------------------------------------------
BHP Billiton plc 1.68%
- -------------------------------------------------------------
Suzuki Motor Corporation 1.67%
- -------------------------------------------------------------
HSBC Holdings plc 1.66%
- -------------------------------------------------------------
BP plc 1.63%
GROWTH OF $10,000 INVESTMENT(6)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Wells Fargo Variable
Trust International Equity Fund MSCI/EAFE INDEX
7/3/2000 $10,000 $10,000
7/31/2000 $ 9,670 $ 9,581
8/31/2000 $ 9,870 $ 9,664
9/30/2000 $ 9,280 $ 9,194
10/31/2000 $ 9,150 $ 8,977
11/30/2000 $ 8,650 $ 8,640
12/31/2000 $ 8,967 $ 8,947
1/31/2001 $ 9,187 $ 8,942
2/28/2001 $ 8,465 $ 8,272
3/31/2001 $ 7,914 $ 7,720
4/30/2001 $ 8,315 $ 8,256
5/31/2001 $ 8,255 $ 7,965
6/30/2001 $ 8,024 $ 7,639
7/31/2001 $ 7,813 $ 7,500
8/31/2001 $ 7,594 $ 7,310
9/30/2001 $ 6,882 $ 6,570
10/31/2001 $ 7,113 $ 6,738
11/30/2001 $ 7,374 $ 6,987
12/31/2001 $ 7,524 $ 7,028
1/31/2002 $ 7,193 $ 6,655
2/28/2002 $ 7,083 $ 6,701
3/31/2002 $ 7,424 $ 7,064
4/30/2002 $ 7,424 $ 7,111
5/31/2002 $ 7,313 $ 7,201
6/30/2002 $ 6,996 $ 6,914
7/31/2002 $ 6,282 $ 6,232
8/31/2002 $ 6,232 $ 6,217
9/30/2002 $ 5,508 $ 5,550
10/31/2002 $ 5,770 $ 5,848
11/30/2002 $ 6,071 $ 6,113
12/31/2002 $ 5,800 $ 5,908
1/31/2003 $ 5,538 $ 5,661
2/28/2003 $ 5,398 $ 5,531
3/31/2003 $ 5,297 $ 5,423
4/30/2003 $ 5,770 $ 5,954
5/31/2003 $ 6,111 $ 6,315
6/30/2003 $ 6,192 $ 6,468
7/31/2003 $ 6,273 $ 6,624
8/31/2003 $ 6,444 $ 6,784
9/30/2003 $ 6,585 $ 6,993
10/31/2003 $ 6,989 $ 7,429
11/30/2003 $ 7,150 $ 7,594
12/31/2003 $ 7,624 $ 8,187
1/31/2004 $ 7,634 $ 8,302
2/29/2004 $ 7,725 $ 8,494
3/31/2004 $ 7,745 $ 8,542
4/30/2004 $ 7,483 $ 8,349
5/31/2004 $ 7,483 $ 8,377
6/30/2004 $ 7,584 $ 8,561
7/31/2004 $ 7,318 $ 8,283
8/31/2004 $ 7,307 $ 8,319
9/30/2004 $ 7,439 $ 8,537
10/31/2004 $ 7,621 $ 8,828
11/30/2004 $ 8,076 $ 9,431
12/31/2004 $ 8,359 $ 9,845
- --------------------------------------------------------------------------------
(3) Portfolio holdings and characteristics are subject to change.
(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) The funds investment process may at times, result in higher than average
portfolio turnover and increased trading expenses, and may generate higher
short-term capital gains.
(6) 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
- --------------------------------------------------------------------------------
VARIABLE TRUST LARGE COMPANY GROWTH FUND
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo Variable Trust Large Company Growth Fund (the Fund) seeks
long-term capital appreciation by investing primarily in large, domestic
companies that we believe have superior growth potential.
ADVISER SUB-ADVISER
Wells Fargo Funds Management, LLC Peregrine Capital Management, Inc.
FUND MANAGERS INCEPTION DATE
John S. Dale, CFA 09/20/99
Gary E. Nussbaum, CFA
HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD?
- --------------------------------------------------------------------------------
The Fund returned 3.26%(1) for the 12-month period ended December 31,
2004, underperforming its benchmark, the S&P 500 Index(2), which returned 10.87%
for the same period. The Fund distributed no dividend income and no capital
gains during the period.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT
PERFORMANCE IS AVAILABLE BY CALLING 1-800-222-8222 OR BY VISITING THE FUND'S WEB
SITE AT WWW.WELLSFARGOFUNDS.COM.
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.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
- --------------------------------------------------------------------------------
Despite the strong economy and corporate profit growth, investors remained
cautious throughout most of 2004. This is evident in moves by investors to
short-term securities and defensive market sectors, such as oil, energy, banks
and utilities. Fund holdings that performed well include eBay, Goldman Sachs,
EMC, Apollo Group, Intel, Cisco, Dell, Genentech and Amgen. Underlying portfolio
fundamentals were generally outstanding in 2005. Fund holdings that detracted
from performance included Cardinal Health and Veritas, which were both sold near
mid-year. Value styles outperformed growth styles for the fifth year in a row.
In 2004, most of the return for value stocks came from four sectors: oil, banks,
energy and utilities. For growth stocks, most of the returns came from consumer
discretionary, while technology and health care issues detracted from returns.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
- --------------------------------------------------------------------------------
We made the following purchases in 2004: Franklin Resources (which we
believe is an excellent asset management position across asset classes and
geographies); Genentech (which we believe is a leader in the biotechnology
arena); Linear Technology (which we believe is a leader in the analog
semiconductor market); Target (potential opportunity to grow its own
mass-merchandising niche); Genzyme (which we believe is a rapidly growing,
niche-oriented biotechnology company); and Yahoo! Inc. (a leading Internet
portal).
We sold the following holdings from our portfolio in 2004: DST Systems
(better potential growth opportunities elsewhere); Cardinal Health (we believe
transformation of business poses increased risk); IMS Health (better potential
growth opportunities elsewhere); Family Dollar Stores (long-term growth and
profitability issues); Veritas Software (we believe increasing competition
reduces probability of meeting long-term expectations); and Sungard Data Systems
(better potential growth and value opportunities elsewhere).
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
- --------------------------------------------------------------------------------
We believe that corporate profit growth may moderate, widening the gap
between the Fund's earnings growth and that of the S&P 500 Index--potentially
benefiting the Fund. We believe that growth stocks may finally be on the rebound
in 2005, based on the possibility of inflation remaining in check, underlying
company fundamentals, attractive large-cap growth valuations and the longevity
of growth style underperformance.
- --------------------------------------------------------------------------------
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, 2004, 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) The Fund's Adviser has committed through April 30, 2005 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.
(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, 2004)
- --------------------------------------------------------------------------------
6-Month* 1-Year 5-Year Life of Fund
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust Large Company Growth Fund (incept. 09/20/99) 3.74 3.26 (5.89) (2.22)
- -------------------------------------------------------------------------------------------------------------------------------
Benchmark
- -------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(2) 7.19 10.87 (2.30) (0.33)
- -------------------------------------------------------------------------------------------------------------------------------
* RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS(3) (AS OF DECEMBER 31, 2004)
- -------------------------------------------------------------
Price to Earnings Ratio (trailing 12 months) 24.00x
- -------------------------------------------------------------
Price to Book Ratio 4.10x
- -------------------------------------------------------------
Median Market Cap ($B) $46.30
- -------------------------------------------------------------
Portfolio Turnover 15%
- -------------------------------------------------------------
Net Asset Value (NAV) $8.88
- -------------------------------------------------------------
SECTOR DISTRIBUTION(3) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Consumer Discretionary 21%
Consumer Staples 2%
Financials 17%
Health Care 14%
Industrials 6%
Information Technology 39%
Cash 1%
TEN LARGEST EQUITY HOLDINGS(3),(4) (AS OF DECEMBER 31, 2004)
- -------------------------------------------------------------
eBay Incorporated 10.06%
- -------------------------------------------------------------
Goldman Sachs Group Incorporated 5.79%
- -------------------------------------------------------------
Medtronic Incorporated 5.49%
- -------------------------------------------------------------
Microsoft Corporation 5.28%
- -------------------------------------------------------------
First Data Corporation 4.59%
- -------------------------------------------------------------
Intel Corporation 4.54%
- -------------------------------------------------------------
American International Group Incorporated 4.20%
- -------------------------------------------------------------
Dell Incorporated 4.05%
- -------------------------------------------------------------
Cisco Systems Incorporated 3.87%
- -------------------------------------------------------------
Paychex Incorporated 3.53%
GROWTH OF $10,000 INVESTMENT(5)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Wells Fargo Variable
Trust Large Company
Growth Fund S&P 500 Index
09/20/99 10,000 $10,000
9/30/1999 9,590 $ 9,605
10/31/1999 10,420 $10,213
11/30/1999 10,830 $10,420
12/31/1999 12,030 $11,034
1/31/2000 11,800 $10,480
2/29/2000 12,000 $10,282
3/31/2000 13,430 $11,288
4/30/2000 13,020 $10,948
5/31/2000 12,200 $10,723
6/30/2000 13,130 $10,988
7/31/2000 13,230 $10,817
8/31/2000 14,000 $11,489
9/30/2000 13,150 $10,882
10/31/2000 13,130 $10,836
11/30/2000 12,080 $ 9,982
12/31/2000 11,960 $10,031
1/31/2001 12,150 $10,387
2/28/2001 10,320 $ 9,441
3/31/2001 9,260 $ 8,844
4/30/2001 10,240 $ 9,530
5/31/2001 10,150 $ 9,594
6/30/2001 9,880 $ 9,361
7/31/2001 9,700 $ 9,269
8/31/2001 8,843 $ 8,690
9/30/2001 8,003 $ 7,988
10/31/2001 8,373 $ 8,141
11/30/2001 9,353 $ 8,765
12/31/2001 9,463 $ 8,842
1/31/2002 9,403 $ 8,713
2/28/2002 8,783 $ 8,545
3/31/2002 9,193 $ 8,866
4/30/2002 8,483 $ 8,329
5/31/2002 8,223 $ 8,268
6/30/2002 7,673 $ 7,680
7/31/2002 6,932 $ 7,081
8/31/2002 7,012 $ 7,127
9/30/2002 6,242 $ 6,353
10/31/2002 6,962 $ 6,912
11/30/2002 7,422 $ 7,318
12/31/2002 6,812 $ 6,889
1/31/2003 6,572 $ 6,709
2/28/2003 6,532 $ 6,608
3/31/2003 6,622 $ 6,672
4/30/2003 7,192 $ 7,221
5/31/2003 7,523 $ 7,601
6/30/2003 7,613 $ 7,699
7/31/2003 7,993 $ 7,834
8/31/2003 8,123 $ 7,987
9/30/2003 7,923 $ 7,902
10/31/2003 8,383 $ 8,349
11/30/2003 8,353 $ 8,422
12/31/2003 8,603 $ 8,863
1/31/2004 8,703 $ 9,026
2/29/2004 8,703 $ 9,152
3/31/2004 8,583 $ 9,014
4/30/2004 8,453 $ 8,872
5/31/2004 8,563 $ 8,994
6/30/2004 8,563 $ 9,168
7/31/2004 8,053 $ 8,865
8/31/2004 8,043 $ 8,901
9/30/2004 8,133 $ 8,997
10/31/2004 8,283 $ 9,134
11/30/2004 8,633 $ 9,504
12/31/2004 8,883 $ 9,827
- --------------------------------------------------------------------------------
(3) Portfolio holdings and characteristics are subject to change.
(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) 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
- --------------------------------------------------------------------------------
VARIABLE TRUST 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 SUB-ADVISER
Wells Fargo Funds Management, LLC Wells Capital Management Incorporated
FUND MANAGERS INCEPTION DATE
Dave Sylvester 05/19/94
Laurie White
HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD?
- --------------------------------------------------------------------------------
The Fund returned 0.70%(1) for the 12-month period ended December 31,
2004, outperforming its benchmark, the iMoneyNet First Tier Retail Money Fund
Average(2), which returned 0.65% over the same period. The Fund distributed less
than $0.01 in dividend income and no capital gains during the period.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. YIELDS WILL FLUCTUATE. THE
FUND'S YIELD FIGURES MORE CLOSELY REFLECT THE CURRENT EARNINGS OF THE FUND THAN
THE TOTAL RETURN FIGURES. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE
PERFORMANCE DATA QUOTED. CURRENT PERFORMANCE IS AVAILABLE BY CALLING
1-800-222-8222 OR BY VISITING THE FUND'S WEB SITE AT WWW.WELLSFARGOFUNDS.COM.
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.
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.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
- --------------------------------------------------------------------------------
There were three main factors that affected the Fund's performance during
the period: 1) the general level of interest rates; 2) the Fund's average
maturity; and 3) changes in the size of the Fund's total assets.
Interest rate levels increased in 2004. At the end of 2003, the Federal
funds rate stood at 1.00%, where it had been since June 2003. By the end of
2004, that rate had increased to 2.25% after being increased by 0.25% at each of
five consecutive meetings of the Federal Open Market Committee (the Fed),
beginning on June 30, 2004. Longer-term money market yields increased as well,
beginning to rise at the end of March 2004. From March 31, 2004 through December
31, 2004, the three-month LIBOR (London Interbank Offered Rate) increased from
1.15% to 2.56%. Over this same period, the 12-month LIBOR increased from 1.45%
to 3.10%.
The Fund's average maturity decreased from 51 days at the end of 2003 to
28 days by June 30, 2004. This increased the sensitivity of the Fund's yield to
changes in interest rates and greatly enhanced its performance. As rates
continued to increase, the Fund's average maturity gradually increased, further
adding incremental yield. By the end of 2004, the Fund's average maturity stood
at 46 days.
The Fund's assets decreased over the period. By the end of fourth quarter
2003, the Fund's assets totaled $81.6 million. By March 31, 2004, they had
decreased to $65.3 million. By December 31, 2004, the Fund's assets had further
contracted to $58.7 million. This had a negative impact on the Fund's yield for
two reasons. First, as rates rose, the Fund was unable to reinvest the proceeds
from maturing investments at the higher yields that were available but, instead,
had to disburse them to meet shareholder redemptions. Second, because of its
smaller size, the Fund was unable to participate in some higher-yielding
investments due to diversification restrictions.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
- --------------------------------------------------------------------------------
We have been particularly focused on the liquidity of the Fund's
investments. For this reason, there has been an increase in those sectors that
are associated with very short maturities and unquestionable liquidity, such as
commercial paper and overnight time deposits.
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
- --------------------------------------------------------------------------------
We expect to maintain a fairly high degree of interest-rate sensitivity in
order to take advantage of what we believe will be a rising interest-rate
environment in 2005. This would be balanced against the additional yield that
will potentially be available by buying investments with slightly longer
maturities. A great deal will depend on the future size of the Fund's total
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, 2004, 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.
(1) The Fund's Adviser has committed through April 30, 2005, 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 1.53%.
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.
14
PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
6-Month* 1-Year 5-Year 10-Year
- -----------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust Money Market Fund 0.51 0.70 2.37 3.62
- -----------------------------------------------------------------------------------------------------
Benchmark
- -----------------------------------------------------------------------------------------------------
iMoneyNet First Tier Retail Money Fund Average(2) 0.46 0.65 2.41 4.28
- -----------------------------------------------------------------------------------------------------
* RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND YIELD SUMMARY(1) (AS OF DECEMBER 31, 2004)
- -------------------------------------------------------------
7-Day Current Yield 1.59%
- -------------------------------------------------------------
7-Day Effective Yield 1.60%
- -------------------------------------------------------------
30-Day Simple Yield 1.52%
- -------------------------------------------------------------
30-Day Effective Yield 1.53%
PORTFOLIO ALLOCATION(3) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Variable and Floating Rate Notes 12%
Commercial Paper 48%
Certificates of Deposit 2%
Corporate Bonds and Notes 2%
Time Deposits 14%
Repurchase Agreements 22%
FUND CHARACTERISTICS(3) (AS OF DECEMBER 31, 2004)
- -------------------------------------------------------------
Weighted Average Maturity 46 days
- -------------------------------------------------------------
MATURITY DISTRIBUTION(3) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
2-14 Days 45%
15-29 Days 6%
30-59 Days 27%
60-89 Days 16%
270+ Days 6%
- --------------------------------------------------------------------------------
(3) Portfolio holdings and characteristics are subject to change.
15
WELLS FARGO VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo Variable Trust Small Cap Growth Fund (the Fund) seeks
long-term capital appreciation.
ADVISER SUB-ADVISER
Wells Fargo Funds Management, LLC Wells Capital Management Incorporated
FUND MANAGERS INCEPTION DATE
Jerome "Cam" Philpott, CFA 05/01/95
Stuart Roberts
HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD?
- --------------------------------------------------------------------------------
The Fund returned 13.77%(1) for the 12-month period ended December 31,
2004, underperforming its benchmark, the Russell 2000 Index(2), which returned
18.33% over the same period. The Fund distributed no dividend income and no
capital gains during the period.
Stocks in the technology, telecommunications, consumer staples and
industrial sectors contributed positively to the portfolio, while stocks in the
health care and materials sectors detracted from performance. Ask Jeeves, an
Internet search provider, was our top performing stock for the year. Corinthian
Colleges, a post-secondary education company, was our worst performing stock for
the year.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT
PERFORMANCE IS AVAILABLE BY CALLING 1-800-222-8222 OR BY VISITING THE FUND'S WEB
SITE AT WWW.WELLSFARGOFUNDS.COM.
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.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
- --------------------------------------------------------------------------------
Various concerns affected the markets and equity prices in 2004.
Anticipation that the Federal Reserve Board would raise interest rates caused
equity prices to slide in late winter and early spring of 2004. Rising oil
prices created anxieties over potentially lower corporate earnings, affecting
the economy and the Fund's performance. Other concerns included threats of a
terrorist attack during the Democratic National Convention, the Olympics and the
Republican National Convention--all of which did not happen. These fears drove
equity prices sharply lower in the third quarter of 2004. But as the fourth
quarter of 2004 unfolded and those fears turned out to be misplaced, investor
outlook improved dramatically. In addition, corporate earnings reported in
October 2004 were good and oil prices retreated in the fourth quarter of 2004.
The markets made another advance after the U.S. Presidential election in
November 2004.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
- --------------------------------------------------------------------------------
We reduced our positions in the consumer discretionary, energy and
technology sectors while adding to our positions in consumer staples, finance,
health care and industrial sectors. We continued to add to our position in Ask
Jeeves, an Internet search provider, while taking profits throughout the year.
Nextel Partners was also a top performing stock for the year as it has
consistently performed well marked by strong subscriber growth, better revenues
and expense control. When the stock achieved our price target, it was sold
entirely from the portfolio. Kroll Incorporated also performed well as its
diverse business lines grew revenues faster than anticipated and, additionally,
Kroll announced that Marsh & McLennan had offered to acquire the company in May
of 2004 for cash at roughly a 30% premium. We took profits in this stock and
then exited our position entirely.
We liquidated our positions in Corinthian Colleges and Par Pharmaceuticals
due to missed earnings, higher operating costs and declining revenues.
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
- --------------------------------------------------------------------------------
From our conversations with company management, we are optimistic about
potential corporate earnings in 2005. We believe businesses will play a larger
role in economic growth than consumers and, from our perspective, business
confidence already seems to be growing. The recent acceleration in merger and
acquisition activity is another encouraging signal that we may see higher
confidence in corporate boardrooms.
We are optimistic about the fundamentals of the portfolio and continue to
focus our efforts on individual stock selection driven by underlying business
fundamentals.
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. FURTHERMORE, 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.
- --------------------------------------------------------------------------------
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, 2004, 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.
(1) The Fund's Adviser has committed through April 30, 2005 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 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.
16
PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
6-Month* 1-Year 5-Year Life of Fund
- ---------------------------------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust Small Cap Growth Fund (incept. 05/01/95) 4.25 13.77 (10.15) 3.49
- ---------------------------------------------------------------------------------------------------------------------------
Benchmark
- ---------------------------------------------------------------------------------------------------------------------------
Russell 2000 Index(2) 10.83 18.33 6.61 11.18
- ---------------------------------------------------------------------------------------------------------------------------
* RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS(3) (AS OF DECEMBER 31, 2004)
- -------------------------------------------------------------
Beta** 1.38
- -------------------------------------------------------------
Price to Earnings Ratio (trailing 12 months) 53.60x
- -------------------------------------------------------------
Price to Book Ratio 3.50x
- -------------------------------------------------------------
Median Market Cap ($B) $0.89
- -------------------------------------------------------------
Portfolio Turnover(5) 175%
- -------------------------------------------------------------
Net Asset Value (NAV) $7.85
** A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENT. THE BENCHMARK BETA
IS 1.00 BY DEFINITION.
SECTOR DISTRIBUTION(3) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Consumer Discretionary 12%
Consumer Staples 2%
Energy 1%
Financials 7%
Health Care 21%
Industrials 24%
Information Technology 25%
Materials 1%
Telecommunication Services 4%
Cash 3%
TEN LARGEST EQUITY HOLDINGS(3),(4) (AS OF DECEMBER 31, 2004)
- -------------------------------------------------------------
Marvel Enterprises Incorporated 3.36%
- -------------------------------------------------------------
CB Richard Ellis Group Incorporated Class A 3.27%
- -------------------------------------------------------------
Navigant Consulting Incorporated 2.48%
- -------------------------------------------------------------
Open Solutions Incorporated 2.46%
- -------------------------------------------------------------
Advanced Medical Optics Incorporated 1.98%
- -------------------------------------------------------------
Perkinelmer Incorporated 1.95%
- -------------------------------------------------------------
iVillage Incorporated 1.95%
- -------------------------------------------------------------
Hughes Supply Incorporated 1.91%
- -------------------------------------------------------------
NII Holdings Incorporated Class B 1.90%
- -------------------------------------------------------------
Tibco Software Incorporated 1.89%
GROWTH OF $10,000 INVESTMENT(6)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Wells Fargo Variable
Trust Small Cap
Growth Fund Russell 2000 Index
5/1/1995 10000 $10,000
5/31/1995 10040 $10,172
6/30/1995 10670 $10,700
7/31/1995 11740 $11,316
8/31/1995 11970 $11,550
9/30/1995 11920 $11,757
10/31/1995 11280 $11,232
11/30/1995 11590 $11,703
12/31/1995 11595 $12,012
1/31/1996 11636 $11,999
2/29/1996 11957 $12,374
3/31/1996 12484 $12,626
4/30/1996 13891 $13,301
5/31/1996 14419 $13,826
6/30/1996 13405 $13,257
7/31/1996 12112 $12,100
8/31/1996 13177 $12,803
9/30/1996 13819 $13,304
10/31/1996 14088 $13,099
11/30/1996 14750 $13,638
12/31/1996 15243 $13,996
1/31/1997 15571 $14,276
2/28/1997 14690 $13,930
3/31/1997 13482 $13,273
4/30/1997 13087 $13,310
5/31/1997 15729 $14,791
6/30/1997 16011 $15,426
7/31/1997 17039 $16,143
8/31/1997 17468 $16,513
9/30/1997 18778 $17,721
10/31/1997 17569 $16,943
11/30/1997 16824 $16,833
12/31/1997 16735 $17,128
1/31/1998 16341 $16,857
2/28/1998 17889 $18,103
3/31/1998 18387 $18,849
4/30/1998 18427 $18,953
5/31/1998 17089 $17,931
6/30/1998 17233 $17,969
7/31/1998 15397 $16,513
8/31/1998 11817 $13,306
9/30/1998 12420 $14,348
10/31/1998 12944 $14,934
11/30/1998 13705 $15,716
12/31/1998 14312 $16,689
1/31/1999 13865 $16,911
2/28/1999 12563 $15,541
3/31/1999 12287 $15,784
4/30/1999 12984 $17,198
5/31/1999 12958 $17,449
6/30/1999 13628 $18,238
7/31/1999 13615 $17,738
8/31/1999 13707 $17,082
9/30/1999 14234 $17,085
10/31/1999 16325 $17,155
11/30/1999 19061 $18,179
12/31/1999 23797 $20,237
1/31/2000 24323 $19,911
2/29/2000 30309 $23,199
3/31/2000 26402 $21,670
4/30/2000 23179 $20,365
5/31/2000 20719 $19,178
6/30/2000 25731 $20,850
7/31/2000 24192 $20,179
8/31/2000 27369 $21,719
9/30/2000 26762 $21,080
10/31/2000 23047 $20,140
11/30/2000 17224 $18,072
12/31/2000 18424 $19,624
1/31/2001 18637 $20,646
2/28/2001 14803 $19,292
3/31/2001 12655 $18,348
4/30/2001 14732 $19,783
5/31/2001 14750 $20,270
6/30/2001 15105 $20,969
7/31/2001 14164 $19,835
8/31/2001 13046 $19,194
9/30/2001 10774 $16,611
10/31/2001 12034 $17,582
11/30/2001 12957 $18,943
12/31/2001 13933 $20,112
1/31/2002 13241 $19,903
2/28/2002 12069 $19,358
3/31/2002 13099 $20,914
4/30/2002 12495 $21,104
5/31/2002 11750 $20,167
6/30/2002 10738 $19,167
7/31/2002 8715 $16,273
8/31/2002 8679 $16,232
9/30/2002 7969 $15,067
10/31/2002 8591 $15,550
11/30/2002 9230 $16,937
12/31/2002 8608 $15,994
1/31/2003 8253 $15,551
2/28/2003 8094 $15,081
3/31/2003 8129 $15,276
4/30/2003 8963 $16,724
5/31/2003 9709 $18,518
6/30/2003 10064 $18,854
7/31/2003 10543 $20,034
8/31/2003 11040 $20,951
9/30/2003 10703 $20,564
10/31/2003 11768 $22,291
11/30/2003 12140 $23,082
12/31/2003 12247 $23,551
1/31/2004 12939 $24,573
2/29/2004 12957 $24,794
3/31/2004 13312 $25,025
4/30/2004 12691 $23,749
5/31/2004 13170 $24,126
6/30/2004 13365 $25,142
7/31/2004 11856 $23,449
8/31/2004 11359 $23,328
9/30/2004 12105 $24,424
10/31/2004 12478 $24,904
11/30/2004 13063 $27,065
12/31/2004 13933 $27,866
- --------------------------------------------------------------------------------
(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) Portfolio holdings and characteristics are subject to change.
(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) The Fund's investment process may, at times, result in higher than average
portfolio turnover and increased trading expenses, and may generate higher
short-term capital gains.
(6) 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
- --------------------------------------------------------------------------------
VARIABLE TRUST 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 SUB-ADVISER
Wells Fargo Funds Management, LLC Wells Capital Management Incorporated
FUND MANAGERS INCEPTION DATE
William Stevens 09/20/99
Marie Chandoha
Thomas O'Connor, CFA
HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD?
- --------------------------------------------------------------------------------
The Fund returned 4.39%(1) for the 12-month period ended December 31,
2004, outperforming its benchmark, the Lehman Brothers Aggregate Bond Index(2),
which returned 4.34%. The Fund distributed $0.34 per share in dividend income
and $0.68 per share in capital gains during the period.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT
PERFORMANCE IS AVAILABLE BY CALLING 1-800-222-8222 OR BY VISITING THE FUND'S WEB
SITE AT WWW.WELLSFARGOFUNDS.COM.
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.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
- --------------------------------------------------------------------------------
Security selection was the primary factor that affected the Fund's
performance. We focused on finding dislocations in the markets and value
investing, which contributed to the Fund's higher turnover.
Our overweighted position in Capital One outperformed U.S. Treasuries by
0.81% as the JP Morgan and Bank One merger raised market expectations of Capital
One being acquired. Our position in Union Planters also outperformed U.S.
Treasuries after an announcement that higher-rated Regions Financial was
acquiring the bank. Holdings in Zions Bank and PNC outperformed due to bank
merger speculation. Our overweighting in REITs and energy in the third quarter
of 2004, combined with our security selection in these industries, contributed
to performance. Our positions in Health Care Properties, Health Care REIT, Marsh
& McLennan, DaimlerChrysler, Zions Bank and PNC posted strong performance.
In mortgages, tactical trades contributed to performance, as we took
advantage of relative value shifts between Freddie Mac (FHLMC) Golds and Fannie
Maes (FNMAs), 10-year pass-throughs and low loan balance pools and balloons.
Relative value trades between Collateralized Mortgage Obligations (CMOs) and
pass-throughs also contributed to performance, particularly in the second half
of the period. An overweighting to Commercial Mortgage Backed Securities (CMBS)
in the fourth quarter of 2004 contributed to performance as we took advantage of
dislocations in relative value among CMBS, mortgage and corporate securities.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
- --------------------------------------------------------------------------------
We restructured our mortgage portfolio to have what we believe are better
risk characteristics than its benchmark. In corporates, we have been
overweighted in the sector, but have been quick to sell bonds that have become
too expensive. We moved to a neutral exposure in Agencies mid-year and remained
underweighted in U.S. Treasuries. We maintained the portfolio duration and yield
curve positioning close to the benchmark for most of the period. Portfolio
trading and turnover remained active as we took advantage of relative value
trades and dislocations in the bond markets.
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
- --------------------------------------------------------------------------------
We believe that the full impact of the Federal Reserve Board rate hikes is
going to be felt in the spring and summer of 2005, and, in our opinion, for the
first time in five years there appears to be no fiscal stimulation on the
horizon. The falling U.S. dollar and high oil prices pose uncertainties for the
markets. With foreign investors holding almost half of U.S. Treasuries and a
quarter of U.S. corporate securities, we are closely monitoring their
willingness to finance the huge U.S. trade deficit in 2005. Foreign investors
have helped keep valuation levels strong in the government bond market, but
their backing away from it could potentially move interest rates up between 1%
and 2%. Corporate profitability is still strong, but we expect a decline in
2005.
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.
- --------------------------------------------------------------------------------
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, 2004, 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) The Fund's Adviser has committed through April 30, 2005 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.
(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.
18
PERFORMANCE HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
6-Month* 1-Year 5-Year Life of Fund
- -------------------------------------------------------------------------------------------------------------------------
Wells Fargo Variable Trust Total Return Bond Fund (incept. 9/20/99) 4.11 4.39 7.62 7.16
- -------------------------------------------------------------------------------------------------------------------------
Benchmark
- -------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index(2) 4.18 4.34 7.71 7.30
- -------------------------------------------------------------------------------------------------------------------------
* RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS(3) (AS OF DECEMBER 31, 2004)
- -------------------------------------------------------------
Average Credit Quality(4) Aa1
- -------------------------------------------------------------
Weighted Average Coupon 5.04%
- -------------------------------------------------------------
Average Maturity 6.29 years
- -------------------------------------------------------------
Average Duration 4.30 years
- -------------------------------------------------------------
Portfolio Turnover(5) 773%
- -------------------------------------------------------------
Distribution Rate(6) 3.56%
- -------------------------------------------------------------
30-Day SEC Yield(7) 3.30%
- -------------------------------------------------------------
Net Asset Value (NAV) $10.08
PORTFOLIO ALLOCATION(3) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Corporate Bonds 29%
Agency Backed Mortgages 46%
U.S. Treasury Bonds 6%
U.S. Treasury Notes 14%
Repurchase Agreements 5%
GROWTH OF $10,000 INVESTMENT(8)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Wells Fargo Variable
Trust Total Return Lehman Brothers U.S.
Bond Fund Aggregate Bond Index
9/20/1999 10,000 $10,000
9/30/1999 10,005 $10,028
10/31/1999 10,060 $10,065
11/30/1999 10,030 $10,064
12/31/1999 9,984 $10,016
1/31/2000 9,958 $ 9,983
2/29/2000 10,082 $10,104
3/31/2000 10,252 $10,237
4/30/2000 10,059 $10,208
5/31/2000 10,011 $10,203
6/30/2000 10,244 $10,415
7/31/2000 10,342 $10,510
8/31/2000 10,515 $10,662
9/30/2000 10,539 $10,730
10/31/2000 10,587 $10,800
11/30/2000 10,729 $10,978
12/31/2000 11,004 $11,182
1/31/2001 11,202 $11,365
2/28/2001 11,343 $11,464
3/31/2001 11,369 $11,521
4/30/2001 11,274 $11,473
5/31/2001 11,346 $11,542
6/30/2001 11,350 $11,586
7/31/2001 11,647 $11,845
8/31/2001 11,787 $11,981
9/30/2001 11,687 $12,122
10/31/2001 11,987 $12,375
11/30/2001 11,932 $12,204
12/31/2001 11,820 $12,126
1/31/2002 11,881 $12,224
2/28/2002 11,948 $12,343
3/31/2002 11,819 $12,138
4/30/2002 12,021 $12,373
5/31/2002 12,132 $12,479
6/30/2002 12,085 $12,586
7/31/2002 12,006 $12,738
8/31/2002 12,247 $12,953
9/30/2002 12,413 $13,163
10/31/2002 12,291 $13,103
11/30/2002 12,455 $13,099
12/31/2002 12,735 $13,370
1/31/2003 12,780 $13,381
2/28/2003 13,009 $13,566
3/31/2003 13,081 $13,555
4/30/2003 13,388 $13,667
5/31/2003 13,709 $13,921
6/30/2003 13,720 $13,893
7/31/2003 13,270 $13,427
8/31/2003 13,397 $13,515
9/30/2003 13,775 $13,873
10/31/2003 13,642 $13,744
11/30/2003 13,663 $13,777
12/31/2003 13,805 $13,918
1/31/2004 13,921 $14,029
2/29/2004 14,073 $14,181
3/31/2004 14,172 $14,287
4/30/2004 13,828 $13,916
5/31/2004 13,777 $13,860
6/30/2004 13,842 $13,939
7/31/2004 13,981 $14,077
8/31/2004 14,234 $14,346
9/30/2004 14,274 $14,384
10/31/2004 14,385 $14,505
11/30/2004 14,270 $14,389
12/31/2004 14,411 $14,522
- --------------------------------------------------------------------------------
(3) Portfolio holdings and characteristics are subject to change.
(4) 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.
(5) The Fund's investment process may, at times, result in higher than average
portfolio turnover and increased trading expenses, and may generate higher
short-term capital gains.
(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 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 FUND EXPENSES (UNAUDITED)
- --------------------------------------------------------------------------------
As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, including sales charges (loads) on purchase payments,
redemption fees (if any) and exchange fees (if any); and (2) ongoing costs,
including management fees; distribution [and/or service] (12b-1) fees; and other
Fund expenses. This example is intended to help you understand your ongoing
costs (in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
sales charges (loads), redemption fees, or exchange fees. Therefore, the
"Hypothetical" line of the table is useful in comparing ongoing costs only, and
will not help you determine the relative total costs of owning different funds.
In addition, if these transactional costs were included, your costs would have
been higher.
The example is based on an investment of $1,000 invested at the beginning
of the period and held for the entire period (last six month period).
ACTUAL EXPENSES
The "Actual" line of the table below provides information about actual
account values and actual expenses. You may use the information in this line,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the "Actual" line under the heading entitled "Expenses Paid During
Period" for your applicable class of shares to estimate the expenses you paid on
your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The "Hypothetical" line of the table below provides information about
hypothetical account values and hypothetical expenses based on the Fund's actual
expense ratio and an assumed rate of return of 5% per year before expenses,
which is not the Fund's actual return. The hypothetical account values and
expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in the Fund and other funds. To do so, compare this
5% hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other funds.
Beginning Ending
Account Account Expenses Net Annual
Value Value Paid During Expense
6/30/04 12/31/04 the Period* Ratio
Wells Fargo Variable Trust Asset Allocation Fund
- ------------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,069.10 $ 5.20 1.00%
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.11 $ 5.08 1.00%
Wells Fargo Variable Trust Equity Income Fund
- ------------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,076.60 $ 5.22 1.00%
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.11 $ 5.08 1.00%
Wells Fargo Variable Trust Equity Value Fund
- ------------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,076.80 $ 5.22 1.00%
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.11 $ 5.08 1.00%
Wells Fargo Variable Trust Growth Fund
- ------------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,053.50 $ 5.16 1.00%
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.11 $ 5.08 1.00%
Wells Fargo Variable Trust International Equity Fund
- ------------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,102.20 $ 5.28 1.00%
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.11 $ 5.08 1.00%
Wells Fargo Variable Trust Large Company Growth Fund
- ------------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,037.40 $ 5.12 1.00%
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.11 $ 5.08 1.00%
Wells Fargo Variable Trust Money Market Fund
- ------------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,005.10 $ 3.78 0.75%
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,021.37 $ 3.81 0.75%
20
FUND EXPENSES (UNAUDITED) WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
Beginning Ending
Account Account Expenses Net Annual
Value Value Paid During Expense
6/30/04 12/31/04 the Period* Ratio
Wells Fargo Variable Trust Small Cap Growth Fund
- ------------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,042.50 $ 6.16 1.20%
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,019.10 $ 6.09 1.20%
Wells Fargo Variable Trust Total Return Bond Fund
- ------------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,041.10 $ 4.62 0.90%
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.61 $ 4.57 0.90%
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO MULTIPLIED BY
THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF
DAYS IN THE MOST RECENT FISCAL HALF-YEAR DIVIDED BY THE NUMBER OF DAYS IN
THE FISCAL YEAR (TO REFLECT THE ONE-HALF YEAR PERIOD).
21
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCK - 57.60%
AMUSEMENT & RECREATION SERVICES - 0.10%
1,864 HARRAH'S ENTERTAINMENT INCORPORATED $ 124,683
5,734 INTERNATIONAL GAME TECHNOLOGY<< 197,135
321,818
---------------
APPAREL & ACCESSORY STORES - 0.26%
14,588 GAP INCORPORATED 308,099
5,708 KOHL'S CORPORATION+ 280,662
6,762 LIMITED BRANDS 155,661
2,330 NORDSTROM INCORPORATED 108,881
853,303
---------------
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS - 0.08%
2,033 JONES APPAREL GROUP INCORPORATED 74,347
1,806 LIZ CLAIBORNE INCORPORATED 76,231
1,848 VF CORPORATION 102,342
252,920
---------------
AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS - 0.06%
4,402 AUTONATION INCORPORATED+ 84,563
1,327 AUTOZONE INCORPORATED+<< 121,168
205,731
---------------
AUTOMOTIVE REPAIR, SERVICES & PARKING - 0.02%
1,069 RYDER SYSTEM INCORPORATED 51,066
---------------
BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS - 0.10%
2,068 CENTEX CORPORATION 123,211
770 KB HOME 80,388
2,122 PULTE HOMES INCORPORATED 135,384
338,983
---------------
BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS - 0.74%
36,538 HOME DEPOT INCORPORATED 1,561,634
12,857 LOWE'S COMPANIES INCORPORATED 740,435
2,351 SHERWIN-WILLIAMS COMPANY 104,925
2,406,994
---------------
BUSINESS SERVICES - 4.19%
3,970 ADOBE SYSTEMS INCORPORATED 249,078
2,138 AFFILIATED COMPUTER SERVICES INCORPORATED CLASS A+ 128,686
3,818 AUTODESK INCORPORATED 144,893
9,692 AUTOMATIC DATA PROCESSING INCORPORATED 429,840
3,693 BMC SOFTWARE INCORPORATED+ 68,690
17,518 CENDANT CORPORATION 409,571
2,818 CITRIX SYSTEMS INCORPORATED+ 69,126
9,744 COMPUTER ASSOCIATES INTERNATIONAL INCORPORATED 302,649
3,149 COMPUTER SCIENCES CORPORATION+ 177,509
6,441 COMPUWARE CORPORATION+ 41,673
2,356 CONVERGYS CORPORATION+ 35,316
22
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
BUSINESS SERVICES (CONTINUED)
11,030 EBAY INCORPORATED+ $ 1,282,568
5,080 ELECTRONIC ARTS INCORPORATED+<< 313,334
8,549 ELECTRONIC DATA SYSTEMS CORPORATION<< 197,482
2,247 EQUIFAX INCORPORATED 63,141
13,807 FIRST DATA CORPORATION 587,350
3,254 FISERV INCORPORATED+ 130,778
3,859 IMS HEALTH INCORPORATED 89,567
7,036 INTERPUBLIC GROUP OF COMPANIES INCORPORATED 94,282
3,118 INTUIT INCORPORATED+ 137,223
1,404 MERCURY INTERACTIVE CORPORATION+<< 63,952
180,892 MICROSOFT CORPORATION 4,831,625
1,981 MONSTER WORLDWIDE INCORPORATED+ 66,641
1,550 NCR CORPORATION+ 107,306
6,254 NOVELL INCORPORATED+ 42,215
3,100 OMNICOM GROUP INCORPORATED 261,392
85,332 ORACLE CORPORATION+ 1,170,755
4,477 PARAMETRIC TECHNOLOGY CORPORATION+ 26,370
6,252 PEOPLESOFT INCORPORATED+ 165,553
2,884 ROBERT HALF INTERNATIONAL INCORPORATED 84,876
8,455 SIEBEL SYSTEMS INCORPORATED+ 88,778
55,958 SUN MICROSYSTEMS INCORPORATED+ 301,054
4,806 SUNGARD DATA SYSTEMS INCORPORATED+ 136,154
10,552 SYMANTEC CORPORATION+<< 271,820
5,589 UNISYS CORPORATION+ 56,896
7,023 VERITAS SOFTWARE CORPORATION+ 200,507
22,875 YAHOO! INCORPORATED+ 861,930
13,690,580
---------------
CHEMICALS & ALLIED PRODUCTS - 5.80%
25,913 ABBOTT LABORATORIES 1,208,841
3,782 AIR PRODUCTS & CHEMICALS INCORPORATED 219,243
1,514 ALBERTO-CULVER COMPANY CLASS B 73,535
21,133 AMGEN INCORPORATED+ 1,355,682
1,837 AVERY DENNISON CORPORATION 110,165
7,869 AVON PRODUCTS INCORPORATED 304,530
32,373 BRISTOL-MYERS SQUIBB COMPANY 829,396
3,108 CHIRON CORPORATION+ 103,590
2,528 CLOROX COMPANY 148,975
8,823 COLGATE PALMOLIVE COMPANY 451,385
15,690 DOW CHEMICAL COMPANY 776,812
16,525 DU PONT (E.I.) DE NEMOURS & COMPANY 810,551
1,296 EASTMAN CHEMICAL COMPANY 74,818
4,287 ECOLAB INCORPORATED 150,602
18,829 ELI LILLY & COMPANY 1,068,546
6,129 FOREST LABORATORIES INCORPORATED+<< 274,947
4,124 GENZYME CORPORATION+ 239,481
7,203 GILEAD SCIENCES INCORPORATED+ 252,033
16,519 GILLETTE COMPANY 739,721
23
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
CHEMICALS & ALLIED PRODUCTS (CONTINUED)
849 GREAT LAKES CHEMICAL CORPORATION $ 24,188
2,597 HOSPIRA INCORPORATED+ 87,000
1,568 INTERNATIONAL FLAVORS & FRAGRANCES INCORPORATED 67,173
4,019 KING PHARMACEUTICALS INCORPORATED+ 49,836
4,138 MEDIMMUNE INCORPORATED+ 112,181
36,898 MERCK & COMPANY INCORPORATED 1,185,902
4,399 MONSANTO COMPANY 244,364
4,477 MYLAN LABORATORIES INCORPORATED 79,153
125,308 PFIZER INCORPORATED 3,369,532
2,860 PPG INDUSTRIES INCORPORATED 194,938
5,403 PRAXAIR INCORPORATED 238,542
42,207 PROCTER & GAMBLE COMPANY 2,324,762
3,741 ROHM & HAAS COMPANY 165,464
24,505 SCHERING-PLOUGH CORPORATION 511,664
1,148 SIGMA-ALDRICH CORPORATION 69,408
1,822 WATSON PHARMACEUTICALS INCORPORATED+ 59,780
22,199 WYETH 945,455
18,922,195
---------------
COMMUNICATIONS - 2.42%
5,054 ALLTEL CORPORATION 296,973
13,242 AT&T CORPORATION 252,393
7,617 AVAYA INCORPORATED+ 131,012
30,478 BELLSOUTH CORPORATION 846,984
2,239 CENTURYTEL INCORPORATED<< 79,417
9,543 CLEAR CHANNEL COMMUNICATIONS INCORPORATED 319,595
36,936 COMCAST CORPORATION CLASS A+ 1,229,230
18,490 NEXTEL COMMUNICATIONS INCORPORATED CLASS A+<< 554,700
30,214 QWEST COMMUNICATIONS INTERNATIONAL INCORPORATED+ 134,150
55,165 SBC COMMUNICATIONS INCORPORATED 1,421,602
24,475 SPRINT CORPORATION-FON GROUP 608,204
5,377 UNIVISION COMMUNICATIONS INCORPORATED CLASS A+<< 157,385
46,072 VERIZON COMMUNICATIONS INCORPORATED 1,866,377
7,898,022
---------------
DEPOSITORY INSTITUTIONS - 6.08%
5,908 AMSOUTH BANCORPORATION 153,017
67,207 BANK OF AMERICA CORPORATION 3,158,057
12,926 BANK OF NEW YORK COMPANY INCORPORATED 431,987
9,190 BB&T CORPORATION 386,439
86,352 CITIGROUP INCORPORATED 4,160,439
2,837 COMERICA INCORPORATED 173,114
2,040 COMPASS BANCSHARES INCORPORATED 99,287
9,339 FIFTH THIRD BANCORP 441,548
2,048 FIRST HORIZON NATIONAL CORPORATION 88,289
5,094 GOLDEN WEST FINANCIAL CORPORATION 312,873
3,845 HUNTINGTON BANCSHARES INCORPORATED 95,279
59,275 JP MORGAN CHASE & COMPANY 2,312,318
24
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
DEPOSITORY INSTITUTIONS (CONTINUED)
6,765 KEYCORP $ 229,334
1,932 M&T BANK CORPORATION 208,347
3,717 MARSHALL & ILSLEY CORPORATION 164,291
7,047 MELLON FINANCIAL CORPORATION 219,232
11,273 NATIONAL CITY CORPORATION 423,301
7,831 NORTH FORK BANCORPORATION INCORPORATED 225,910
3,647 NORTHERN TRUST CORPORATION 177,171
4,702 PNC FINANCIAL SERVICES GROUP 270,083
7,733 REGIONS FINANCIAL CORPORATION 275,217
5,743 SOVEREIGN BANCORP INCORPORATED 129,505
5,547 STATE STREET CORPORATION 272,469
6,169 SUNTRUST BANKS INCORPORATED 455,766
5,152 SYNOVUS FINANCIAL CORPORATION 147,244
31,067 US BANCORP 973,018
26,683 WACHOVIA CORPORATION 1,403,526
14,527 WASHINGTON MUTUAL INCORPORATED 614,202
28,151 WELLS FARGO & COMPANY++ 1,749,585
1,491 ZIONS BANCORPORATION 101,433
19,852,281
---------------
EATING & DRINKING PLACES - 0.32%
2,615 DARDEN RESTAURANTS INCORPORATED 72,540
20,918 MCDONALD'S CORPORATION 670,631
1,896 WENDY'S INTERNATIONAL INCORPORATED 74,437
4,874 YUM! BRANDS INCORPORATED<< 229,956
1,047,564
---------------
EDUCATIONAL SERVICES - 0.08%
3,082 APOLLO GROUP INCORPORATED CLASS A+ 248,748
---------------
ELECTRIC, GAS & SANITARY SERVICES - 1.94%
10,795 AES CORPORATION+ 147,568
2,283 ALLEGHENY ENERGY INCORPORATED+<< 44,998
5,295 ALLIED WASTE INDUSTRIES INCORPORATED+<< 49,138
3,241 AMEREN CORPORATION 162,504
6,584 AMERICAN ELECTRIC POWER COMPANY INCORPORATED<< 226,095
8,890 CALPINE CORPORATION+<< 35,027
5,121 CENTERPOINT ENERGY INCORPORATED<< 57,867
3,015 CINERGY CORPORATION 125,514
5,581 CITIZENS COMMUNICATIONS COMPANY 76,962
3,240 CMS ENERGY CORPORATION+<< 33,858
4,026 CONSOLIDATED EDISON INCORPORATED 176,138
2,926 CONSTELLATION ENERGY GROUP INCORPORATED 127,895
5,514 DOMINION RESOURCES INCORPORATED 373,518
2,894 DTE ENERGY COMPANY 124,818
15,917 DUKE ENERGY CORPORATION<< 403,178
6,323 DYNEGY INCORPORATED CLASS A+<< 29,212
5,421 EDISON INTERNATIONAL 173,635
10,702 EL PASO CORPORATION 111,301
25
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
ELECTRIC, GAS & SANITARY SERVICES (CONTINUED)
3,719 ENTERGY CORPORATION $ 251,367
11,024 EXELON CORPORATION 485,828
5,488 FIRSTENERGY CORPORATION 216,831
3,088 FPL GROUP INCORPORATED<< 230,828
2,672 KEYSPAN CORPORATION 105,410
2,061 KINDER MORGAN INCORPORATED 150,721
733 NICOR INCORPORATED 27,077
4,498 NISOURCE INCORPORATED 102,464
626 PEOPLES ENERGY CORPORATION 27,513
6,707 PG&E CORPORATION+ 223,209
1,523 PINNACLE WEST CAPITAL CORPORATION 67,636
3,145 PPL CORPORATION 167,566
4,110 PROGRESS ENERGY INCORPORATED 185,936
3,955 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED<< 204,750
3,883 SEMPRA ENERGY<< 142,428
12,307 SOUTHERN COMPANY 412,531
3,322 TECO ENERGY INCORPORATED<< 50,959
3,997 TXU CORPORATION 258,046
9,519 WASTE MANAGEMENT INCORPORATED 284,999
9,258 WILLIAMS COMPANIES INCORPORATED<< 150,813
6,661 XCEL ENERGY INCORPORATED 121,230
6,347,368
---------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 5.67%
13,458 ADC TELECOMMUNICATIONS INCORPORATED+<< 36,068
6,421 ADVANCED MICRO DEVICES INCORPORATED+<< 141,391
6,194 ALTERA CORPORATION+ 128,216
3,182 AMERICAN POWER CONVERSION CORPORATION 68,095
6,253 ANALOG DEVICES INCORPORATED 230,861
2,675 ANDREW CORPORATION+<< 36,460
5,127 APPLIED MICRO CIRCUITS CORPORATION+ 21,585
5,475 BROADCOM CORPORATION CLASS A+ 176,733
9,513 CIENA CORPORATION+ 31,773
3,288 COMVERSE TECHNOLOGY INCORPORATED+<< 80,392
1,527 COOPER INDUSTRIES LIMITED CLASS A 103,668
6,983 EMERSON ELECTRIC COMPANY 489,508
6,486 FREESCALE SEMICONDUCTOR INCORPORATED CLASS B+ 119,083
175,910 GENERAL ELECTRIC COMPANY 6,420,715
105,208 INTEL CORPORATION 2,460,815
27,698 INTERNATIONAL BUSINESS MACHINES CORPORATION 2,730,469
3,352 JABIL CIRCUIT INCORPORATED+ 85,744
24,026 JDS UNIPHASE CORPORATION+<< 76,162
3,252 KLA-TENCOR CORPORATION+<< 151,478
1,916 L-3 COMMUNICATIONS HOLDINGS INCORPORATED 140,328
5,108 LINEAR TECHNOLOGY CORPORATION 197,986
6,404 LSI LOGIC CORPORATION+ 35,094
73,555 LUCENT TECHNOLOGIES INCORPORATED+<< 276,567
5,411 MAXIM INTEGRATED PRODUCTS INCORPORATED 229,372
26
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (CONTINUED)
1,318 MAYTAG CORPORATION $ 27,810
10,189 MICRON TECHNOLOGY INCORPORATED+<< 125,834
3,135 MOLEX INCORPORATED<< 94,050
40,506 MOTOROLA INCORPORATED 696,703
5,959 NATIONAL SEMICONDUCTOR CORPORATION 106,964
5,969 NETWORK APPLIANCE INCORPORATED+ 198,290
2,325 NOVELLUS SYSTEMS INCORPORATED+ 64,844
2,765 NVIDIA CORPORATION+ 65,143
2,965 PMC-SIERRA INCORPORATED+<< 33,356
1,396 POWER-ONE INCORPORATED+ 12,452
1,539 QLOGIC CORPORATION+ 56,528
27,272 QUALCOMM INCORPORATED 1,156,333
2,937 ROCKWELL COLLINS INCORPORATED 115,835
8,671 SANMINA-SCI CORPORATION+ 73,443
2,550 SCIENTIFIC-ATLANTA INCORPORATED 84,176
16,154 SOLECTRON CORPORATION+ 86,101
7,687 TELLABS INCORPORATED+ 66,031
28,750 TEXAS INSTRUMENTS INCORPORATED 707,825
1,105 WHIRLPOOL CORPORATION 76,477
5,795 XILINX INCORPORATED 171,822
18,488,580
---------------
ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES - 0.20%
1,394 FLUOR CORPORATION 75,987
2,460 MOODY'S CORPORATION 213,651
6,292 PAYCHEX INCORPORATED 214,431
1,683 QUEST DIAGNOSTICS INCORPORATED 160,811
664,880
---------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 0.32%
1,873 BALL CORPORATION 82,374
2,398 FORTUNE BRANDS INCORPORATED 185,078
4,919 ILLINOIS TOOL WORKS INCORPORATED 455,893
7,454 MASCO CORPORATION 272,295
957 SNAP-ON INCORPORATED 32,882
1,028,522
---------------
FINANCIAL SERVICES - 0.02%
3,931 JANUS CAPITAL GROUP INCORPORATED 66,080
---------------
FOOD & KINDRED PRODUCTS - 2.02%
622 ADOLPH COORS COMPANY CLASS B<< 47,067
13,145 ANHEUSER-BUSCH COMPANIES INCORPORATED 666,846
10,890 ARCHER-DANIELS-MIDLAND COMPANY 242,956
6,846 CAMPBELL SOUP COMPANY 204,627
40,257 COCA-COLA COMPANY 1,675,899
7,807 COCA-COLA ENTERPRISES INCORPORATED 162,776
8,557 CONAGRA FOODS INCORPORATED 252,004
6,062 GENERAL MILLS INCORPORATED 301,342
27
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
FOOD & KINDRED PRODUCTS (CONTINUED)
1,863 HERCULES INCORPORATED+ $ 27,665
4,094 HERSHEY FOODS CORPORATION 227,381
5,812 HJ HEINZ COMPANY 226,610
6,870 KELLOGG COMPANY 306,814
2,274 MCCORMICK & COMPANY INCORPORATED 87,776
4,161 PEPSI BOTTLING GROUP INCORPORATED<< 112,513
28,028 PEPSICO INCORPORATED 1,463,062
13,058 SARA LEE CORPORATION 315,220
3,734 WM WRIGLEY JR COMPANY 258,355
6,578,913
---------------
FOOD STORES - 0.24%
6,124 ALBERTSON'S INCORPORATED 146,241
12,297 KROGER COMPANY+ 215,689
6,655 STARBUCKS CORPORATION+ 415,006
776,936
---------------
FORESTRY - 0.08%
3,991 WEYERHAEUSER COMPANY<< 268,275
---------------
FURNITURE & FIXTURES - 0.06%
3,176 LEGGETT & PLATT INCORPORATED 90,293
4,572 NEWELL RUBBERMAID INCORPORATED 110,597
200,890
---------------
GENERAL MERCHANDISE STORES - 0.57%
1,877 BIG LOTS INCORPORATED+ 22,768
5,452 DOLLAR GENERAL CORPORATION 113,238
2,790 FAMILY DOLLAR STORES INCORPORATED 87,132
2,815 FEDERATED DEPARTMENT STORES INCORPORATED 162,679
4,752 JC PENNEY COMPANY INCORPORATED 196,733
4,858 MAY DEPARTMENT STORES COMPANY 142,825
3,441 SEARS ROEBUCK & COMPANY<< 175,594
14,899 TARGET CORPORATION 773,705
8,017 TJX COMPANIES INCORPORATED 201,467
1,876,141
---------------
HEALTH SERVICES - 0.40%
5,549 BIOGEN IDEC INCORPORATED+ 369,619
7,563 CAREMARK RX INCORPORATED+ 298,209
7,008 HCA INCORPORATED 280,040
4,050 HEALTH MANAGEMENT ASSOCIATION INCORPORATED CLASS A<< 92,016
2,301 LABORATORY CORPORATION OF AMERICA HOLDINGS+ 114,636
1,438 MANOR CARE INCORPORATED 50,948
7,764 TENET HEALTHCARE CORPORATION+<< 85,249
1,290,717
---------------
HOLDING & OTHER INVESTMENT OFFICES - 0.32%
1,577 APARTMENT INVESTMENT & MANAGEMENT COMPANY CLASS A 60,778
3,255 ARCHSTONE-SMITH TRUST 124,666
28
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
HOLDING & OTHER INVESTMENT OFFICES (CONTINUED)
6,709 EQUITY OFFICE PROPERTIES TRUST $ 195,366
4,704 EQUITY RESIDENTIAL<< 170,191
3,054 PLUM CREEK TIMBER COMPANY 117,396
3,059 PROLOGIS 132,546
3,680 SIMON PROPERTY GROUP INCORPORATED 237,986
1,038,929
---------------
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES - 0.20%
5,007 BED BATH & BEYOND INCORPORATED+ 199,429
5,397 BEST BUY COMPANY INCORPORATED 320,690
3,251 CIRCUIT CITY STORES INCORPORATED 50,845
2,636 RADIO SHACK CORPORATION 86,672
657,636
---------------
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES - 0.18%
6,423 HILTON HOTELS CORPORATION 146,059
3,720 MARRIOTT INTERNATIONAL INCORPORATED CLASS A 234,286
3,448 STARWOOD HOTELS & RESORTS WORLDWIDE INCORPORATED 201,363
581,708
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 2.75%
12,954 3M COMPANY 1,063,135
3,569 AMERICAN STANDARD COMPANIES INCORPORATED+ 147,471
6,689 APPLE COMPUTER INCORPORATED+ 430,772
28,256 APPLIED MATERIALS INCORPORATED+ 483,178
5,581 BAKER HUGHES INCORPORATED 238,141
1,343 BLACK & DECKER CORPORATION 118,627
5,677 CATERPILLAR INCORPORATED 553,564
109,563 CISCO SYSTEMS INCORPORATED+ 2,114,566
757 CUMMINS INCORPORATED<< 63,429
4,129 DEERE & COMPANY 307,198
41,336 DELL INCORPORATED+ 1,741,899
3,383 DOVER CORPORATION 141,883
39,871 EMC CORPORATION+ 592,882
6,218 GATEWAY INCORPORATED+ 37,370
2,865 INGERSOLL-RAND COMPANY CLASS A 230,060
2,147 LEXMARK INTERNATIONAL INCORPORATED+ 182,495
2,063 PALL CORPORATION 59,724
1,987 PARKER HANNIFIN CORPORATION 150,495
3,837 PITNEY BOWES INCORPORATED 177,576
1,368 STANLEY WORKS 67,018
4,004 SYMBOL TECHNOLOGIES INCORPORATED 69,269
8,970,752
---------------
INSURANCE AGENTS, BROKERS & SERVICE - 0.49%
4,728 ACE LIMITED 202,122
5,265 AON CORPORATION 125,623
2,652 HUMANA INCORPORATED+<< 78,738
2,271 JEFFERSON-PILOT CORPORATION 118,001
29
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
INSURANCE AGENTS, BROKERS & SERVICE (CONTINUED)
8,767 MARSH & MCLENNAN COMPANIES INCORPORATED $ 288,434
4,534 MEDCO HEALTH SOLUTIONS INCORPORATED+ 188,615
12,385 METLIFE INCORPORATED<< 501,716
4,933 UNUMPROVIDENT CORPORATION<< 88,498
1,591,747
---------------
INSURANCE CARRIERS - 2.76%
2,456 AETNA INCORPORATED 306,386
8,419 AFLAC INCORPORATED 335,413
11,417 ALLSTATE CORPORATION 590,487
1,808 AMBAC FINANCIAL GROUP INCORPORATED 148,491
43,337 AMERICAN INTERNATIONAL GROUP INCORPORATED 2,845,941
3,187 CHUBB CORPORATION<< 245,080
2,233 CIGNA CORPORATION 182,146
2,796 CINCINNATI FINANCIAL CORPORATION 123,751
4,887 HARTFORD FINANCIAL SERVICES GROUP INCORPORATED 338,718
2,905 LINCOLN NATIONAL CORPORATION 135,605
3,086 LOEWS CORPORATION 216,946
2,341 MBIA INCORPORATED 148,138
1,610 MGIC INVESTMENT CORPORATION 110,945
5,107 PRINCIPAL FINANCIAL GROUP INCORPORATED 209,081
3,331 PROGRESSIVE CORPORATION 282,602
8,535 PRUDENTIAL FINANCIAL INCORPORATED 469,084
2,110 SAFECO CORPORATION 110,226
11,139 ST. PAUL COMPANIES INCORPORATED 412,923
1,798 TORCHMARK CORPORATION 102,738
10,875 UNITEDHEALTH GROUP INCORPORATED 957,326
4,911 WELLPOINT INCORPORATED+ 564,765
2,307 XL CAPITAL LIMITED CLASS A 179,139
9,015,931
---------------
LEATHER & LEATHER PRODUCTS - 0.05%
3,143 COACH INCORPORATED+ 177,265
---------------
LUMBER & WOOD PRODUCTS, EXCEPT FURNITURE - 0.06%
4,294 GEORGIA-PACIFIC CORPORATION 160,939
1,831 LOUISIANA-PACIFIC CORPORATION 48,961
209,900
---------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 1.78%
8,080 AGILENT TECHNOLOGIES INCORPORATED+ 194,728
2,184 ALLERGAN INCORPORATED 177,057
3,261 APPLERA CORPORATION-APPLIED BIOSYSTEMS GROUP<< 68,188
889 BAUSCH & LOMB INCORPORATED 57,305
10,257 BAXTER INTERNATIONAL INCORPORATED 354,277
4,214 BECTON DICKINSON & COMPANY 239,355
4,212 BIOMET INCORPORATED 182,759
14,051 BOSTON SCIENTIFIC CORPORATION+ 499,513
1,741 C.R. BARD INCORPORATED 111,389
5,135 DANAHER CORPORATION 294,800
30
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS (CONTINUED)
4,770 EASTMAN KODAK COMPANY $ 153,832
1,951 FISHER SCIENTIFIC INTERNATIONAL INCORPORATED+<< 121,703
5,300 GUIDANT CORPORATION 382,130
20,112 MEDTRONIC INCORPORATED 998,963
827 MILLIPORE CORPORATION 41,193
2,131 PERKINELMER INCORPORATED 47,926
7,521 RAYTHEON COMPANY 292,040
3,064 ROCKWELL AUTOMATION INCORPORATED 151,821
5,949 ST. JUDE MEDICAL INCORPORATED+ 249,442
6,689 STRYKER CORPORATION 322,744
1,497 TEKTRONIX INCORPORATED 45,224
3,231 TERADYNE INCORPORATED+<< 55,153
2,661 THERMO ELECTRON CORPORATION+ 80,336
2,010 WATERS CORPORATION+ 94,048
15,866 XEROX CORPORATION+<< 269,881
4,081 ZIMMER HOLDINGS INCORPORATED+ 326,970
5,812,777
---------------
METAL MINING - 0.18%
2,970 FREEPORT-MCMORAN COPPER & GOLD INCORPORATED CLASS B 113,543
7,386 NEWMONT MINING CORPORATION 328,012
1,588 PHELPS DODGE CORPORATION<< 157,085
598,640
---------------
MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS - 0.03%
1,703 VULCAN MATERIALS COMPANY 93,001
---------------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 1.83%
2,527 EATON CORPORATION 182,854
2,945 HASBRO INCORPORATED<< 57,074
50,248 HEWLETT-PACKARD COMPANY 1,053,701
1,536 ITT INDUSTRIES INCORPORATED 129,715
49,380 JOHNSON & JOHNSON 3,131,680
6,904 MATTEL INCORPORATED 134,559
2,420 TIFFANY & COMPANY 77,367
33,471 TYCO INTERNATIONAL LIMITED 1,196,253
5,963,203
---------------
MISCELLANEOUS RETAIL - 1.72%
7,804 COSTCO WHOLESALE CORPORATION 377,792
6,656 CVS CORPORATION 299,986
1,366 DILLARDS INCORPORATED CLASS A 36,704
1,264 EXPRESS SCRIPTS INCORPORATED+ 96,620
5,198 OFFICE DEPOT INCORPORATED+ 90,237
8,284 STAPLES INCORPORATED 279,254
3,578 TOYS R US INCORPORATED+ 73,242
70,464 WAL-MART STORES INCORPORATED 3,721,909
17,004 WALGREEN COMPANY 652,443
5,628,187
---------------
31
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
MOTION PICTURES - 0.99%
43,472 NEWS CORPORATION CLASS A $ 811,188
76,212 TIME WARNER INCORPORATED+ 1,481,561
33,998 WALT DISNEY COMPANY 945,144
3,237,893
---------------
MOTOR FREIGHT TRANSPORTATION & WAREHOUSING - 0.49%
18,648 UNITED PARCEL SERVICE INCORPORATED CLASS B 1,593,658
---------------
NON-DEPOSITORY CREDIT INSTITUTIONS - 1.56%
20,885 AMERICAN EXPRESS COMPANY 1,177,287
4,038 CAPITAL ONE FINANCIAL CORPORATION 340,040
3,497 CIT GROUP INCORPORATED 160,233
9,657 COUNTRYWIDE FINANCIAL CORPORATION 357,406
16,104 FANNIE MAE<< 1,146,766
11,473 FREDDIE MAC 845,560
21,259 MBNA CORPORATION 599,291
4,877 PROVIDIAN FINANCIAL CORPORATION+ 80,324
7,151 SLM CORPORATION 381,792
5,088,699
---------------
OIL & GAS EXTRACTION - 1.14%
4,115 ANADARKO PETROLEUM CORPORATION 266,693
5,432 APACHE CORPORATION 274,696
2,687 BJ SERVICES COMPANY 125,053
6,514 BURLINGTON RESOURCES INCORPORATED 283,359
8,086 DEVON ENERGY CORPORATION 314,707
1,972 EOG RESOURCES INCORPORATED<< 140,722
7,354 HALLIBURTON COMPANY 288,571
2,524 KERR-MCGEE CORPORATION 145,862
2,487 NABORS INDUSTRIES LIMITED+<< 127,558
2,252 NOBLE CORPORATION+ 112,015
6,567 OCCIDENTAL PETROLEUM CORPORATION 383,250
1,784 ROWAN COMPANIES INCORPORATED+ 46,206
9,796 SCHLUMBERGER LIMITED<< 655,842
5,350 TRANSOCEAN INCORPORATED+ 226,787
4,379 UNOCAL CORPORATION 189,348
4,332 XTO ENERGY INCORPORATED 153,266
3,733,935
---------------
PAPER & ALLIED PRODUCTS - 0.37%
1,779 BEMIS COMPANY INCORPORATED 51,751
8,096 INTERNATIONAL PAPER COMPANY 340,032
8,115 KIMBERLY-CLARK CORPORATION 534,048
3,371 MEADWESTVACO CORPORATION 114,243
1,555 OFFICEMAX INCORPORATED 48,796
2,469 PACTIV CORPORATION+<< 62,441
931 TEMPLE-INLAND INCORPORATED 63,681
1,214,992
---------------
32
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
PERSONAL SERVICES - 0.08%
2,856 CINTAS CORPORATION $ 125,264
2,740 H & R BLOCK INCORPORATED 134,260
259,524
---------------
PETROLEUM REFINING & RELATED INDUSTRIES - 2.77%
1,525 AMERADA HESS CORPORATION<< 125,630
1,182 ASHLAND INCORPORATED 69,005
35,251 CHEVRONTEXACO CORPORATION 1,851,030
11,484 CONOCOPHILLIPS 997,156
107,343 EXXONMOBIL CORPORATION 5,502,402
5,766 MARATHON OIL CORPORATION 216,859
1,216 SUNOCO INCORPORATED 99,359
4,270 VALERO ENERGY CORPORATION 193,858
9,055,299
---------------
PRIMARY METAL INDUSTRIES - 0.24%
14,483 ALCOA INCORPORATED 455,056
1,589 ALLEGHENY TECHNOLOGIES INCORPORATED 34,433
2,034 ENGELHARD CORPORATION 62,383
2,647 NUCOR CORPORATION 138,544
1,891 UNITED STATES STEEL CORPORATION<< 96,914
787,330
---------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES - 0.71%
1,363 DOW JONES & COMPANY INCORPORATED 58,691
4,247 GANNETT COMPANY INCORPORATED 346,980
1,281 KNIGHT-RIDDER INCORPORATED 85,750
3,159 MCGRAW-HILL COMPANIES INCORPORATED 289,175
831 MEREDITH CORPORATION 45,040
2,413 NEW YORK TIMES COMPANY CLASS A<< 98,451
3,653 RR DONNELLEY & SONS COMPANY 128,914
5,286 TRIBUNE COMPANY 222,752
28,370 VIACOM INCORPORATED CLASS B 1,032,384
2,308,137
---------------
RAILROAD TRANSPORTATION - 0.30%
6,254 BURLINGTON NORTHERN SANTA FE CORPORATION 295,876
3,574 CSX CORPORATION 143,246
6,589 NORFOLK SOUTHERN CORPORATION 238,456
4,319 UNION PACIFIC CORPORATION 290,453
968,031
---------------
RUBBER & MISCELLANEOUS PLASTICS PRODUCTS - 0.18%
1,245 COOPER TIRE & RUBBER COMPANY<< 26,830
2,918 GOODYEAR TIRE & RUBBER COMPANY<< 42,778
4,367 NIKE INCORPORATED CLASS B 396,043
967 REEBOK INTERNATIONAL LIMITED<< 42,548
1,390 SEALED AIR CORPORATION+<< 74,045
582,244
---------------
33
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 1.28%
1,717 BEAR STEARNS COMPANIES INCORPORATED $ 175,666
22,412 CHARLES SCHWAB CORPORATION 268,048
6,188 E*TRADE FINANCIAL CORPORATION+ 92,511
1,787 FEDERATED INVESTORS INCORPORATED CLASS B 54,325
4,149 FRANKLIN RESOURCES INCORPORATED 288,978
8,056 GOLDMAN SACHS GROUP INCORPORATED 838,146
4,482 LEHMAN BROTHERS HOLDINGS INCORPORATED 392,085
15,497 MERRILL LYNCH & COMPANY INCORPORATED 926,256
18,212 MORGAN STANLEY 1,011,130
2,132 T ROWE PRICE GROUP INCORPORATED 132,610
4,179,755
---------------
STONE, CLAY, GLASS & CONCRETE PRODUCTS - 0.08%
23,331 CORNING INCORPORATED+ 274,606
---------------
TOBACCO PRODUCTS - 0.74%
34,152 ALTRIA GROUP INCORPORATED 2,086,687
2,455 REYNOLDS AMERICAN INCORPORATED<< 192,963
2,749 UST INCORPORATED 132,255
2,411,905
---------------
TRANSPORTATION BY AIR - 0.22%
2,153 DELTA AIR LINES INCORPORATED<< 16,104
5,001 FEDEX CORPORATION 492,549
12,971 SOUTHWEST AIRLINES COMPANY 211,168
719,821
---------------
TRANSPORTATION EQUIPMENT - 1.65%
13,970 BOEING COMPANY 723,227
1,600 BRUNSWICK CORPORATION 79,200
2,492 DANA CORPORATION 43,186
9,337 DELPHI CORPORATION 84,220
30,443 FORD MOTOR COMPANY<< 445,686
3,332 GENERAL DYNAMICS CORPORATION 348,527
9,398 GENERAL MOTORS CORPORATION<< 376,484
2,905 GENUINE PARTS COMPANY 127,994
1,978 GOODRICH CORPORATION 64,562
4,888 HARLEY-DAVIDSON INCORPORATED<< 296,946
14,312 HONEYWELL INTERNATIONAL INCORPORATED 506,788
3,167 JOHNSON CONTROLS INCORPORATED 200,915
7,365 LOCKHEED MARTIN CORPORATION 409,126
1,161 NAVISTAR INTERNATIONAL CORPORATION+ 51,061
6,126 NORTHROP GRUMMAN CORPORATION 333,009
2,890 PACCAR INCORPORATED 232,587
2,288 TEXTRON INCORPORATED 168,854
8,503 UNITED TECHNOLOGIES CORPORATION 878,785
5,371,157
---------------
34
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
TRANSPORTATION SERVICES - 0.02%
2,254 SABRE HOLDINGS CORPORATION $ 49,949
---------------
WATER TRANSPORTATION - 0.19%
10,537 CARNIVAL CORPORATION<< 607,247
---------------
WHOLESALE TRADE NON-DURABLE GOODS - 0.43%
1,749 AMERISOURCE-BERGEN CORPORATION 102,631
2,026 BROWN-FORMAN CORPORATION CLASS B 98,626
7,189 CARDINAL HEALTH INCORPORATED 418,040
4,890 MCKESSON CORPORATION 153,840
7,445 SAFEWAY INCORPORATED+ 146,964
2,233 SUPERVALU INCORPORATED 77,083
10,645 SYSCO CORPORATION 406,320
1,403,504
---------------
WHOLESALE TRADE-DURABLE GOODS - 0.04%
2,155 VISTEON CORPORATION 21,054
1,498 W.W. GRAINGER INCORPORATED 99,797
120,851
---------------
TOTAL COMMON STOCK (COST $190,912,834) 187,985,720
---------------
PRINCIPAL INTEREST RATE MATURITY DATE
US TREASURY SECURITIES - 35.81%
US TREASURY BONDS - 35.81%
$ 5,346,000 US TREASURY BOND<< 7.63% 02/15/2025 7,240,280
6,341,000 US TREASURY BOND<< 6.88 08/15/2025 7,986,933
7,885,000 US TREASURY BOND<< 6.00 02/15/2026 9,032,331
4,860,000 US TREASURY BOND<< 6.75 08/15/2026 6,062,092
6,170,000 US TREASURY BOND<< 6.50 11/15/2026 7,495,828
5,428,000 US TREASURY BOND<< 6.63 02/15/2027 6,690,645
5,104,000 US TREASURY BOND<< 6.38 08/15/2027 6,128,786
12,612,000 US TREASURY BOND<< 6.13 11/15/2027 14,729,933
6,757,000 US TREASURY BOND<< 5.50 08/15/2028 7,313,399
6,306,000 US TREASURY BOND<< 5.25 11/15/2028 6,609,476
6,538,000 US TREASURY BOND<< 5.25 02/15/2029 6,858,258
6,422,000 US TREASURY BOND<< 6.13 08/15/2029 7,539,826
10,232,000 US TREASURY BOND<< 6.25 05/15/2030 12,233,236
10,135,000 US TREASURY BOND<< 5.38 02/15/2031 10,959,259
116,880,282
---------------
TOTAL US TREASURY SECURITIES (COST $109,614,629) 116,880,282
---------------
COLLATERAL FOR SECURITIES LENDING - 38.79%
COLLATERAL INVESTED IN MONEY MARKET FUNDS 0.07%
171,396 FEDERATED INVESTORS PRIME OBLIGATIONS FUND 171,396
65,406 SHORT TERM INVESTMENTS COMPANY LIQUID ASSETS PORTFOLIO 65,406
---------------
236,802
35
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
PRINCIPAL INTEREST RATE MATURITY DATE VALUE
COLLATERAL INVESTED IN OTHER SHORT-TERM ASSETS 38.72%
4,999,995 ATLANTIC ASSET SECURITIES COMMERCIAL PAPER^ 2.28% 01/05/2005 $ 4,999,344
5,999,994 CEDAR SPRING CAPITAL COMPANY COMMERCIAL PAPER^ 2.35 01/28/2005 5,990,514
5,399,995 CORPORATION ASSET SECURITIES AUSTRALIA LIMITED COMMERCIAL PAPER^ 2.00 01/13/2005 5,396,701
4,999,995 LEGACY CAPITAL CORPORATION COMMERCIAL PAPER^ 2.36 01/26/2005 4,992,695
5,999,994 VARIABLE FUNDING CAPITAL CORPORATION COMMERCIAL PAPER^ 2.23 01/03/2005 5,999,994
47,999,952 DEUTSCHE BANK A1/P1 MONEY MARKET REPURCHASE AGREEMENT 2.30 01/03/2005 47,999,952
50,999,949 BEAR STEARNS & COMPANY AGENCY MORTGAGE REPURCHASE AGREEMENT 2.28 01/03/2005 50,999,949
126,379,149
---------------
TOTAL COLLATERAL FOR SECURITIES LENDING** (COST $126,615,951) 126,615,951
---------------
SHORT-TERM INVESTMENTS - 6.25%
MUTUAL FUND - 4.36%
14,232,898 WELLS FARGO MONEY MARKET TRUST~++ 14,232,898
---------------
US TREASURY BILLS - 1.89%
170,000 US TREASURY BILL^# 1.68 02/10/2005 169,624
110,000 US TREASURY BILL^# 1.80 02/10/2005 109,757
50,000 US TREASURY BILL^# 1.95 04/07/2005 49,707
110,000 US TREASURY BILL^# 1.99 04/07/2005 109,356
5,750,000 US TREASURY BILL^# 2.24 05/12/2005 5,700,550
20,000 US TREASURY BILL^# 2.31 05/12/2005 19,828
6,158,822
---------------
TOTAL SHORT-TERM INVESTMENTS (COST $20,395,246) 20,391,720
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $447,538,660)* 138.45% $ 451,873,673
OTHER ASSETS AND LIABILITIES, NET (38.45) (125,499,997)
------ ---------------
TOTAL NET ASSETS 100.00% $ 326,373,676
====== ===============
+ NON-INCOME EARNING SECURITIES.
++ SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $15,485,759.
~ 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.
^ ZERO COUPON/STEPPED COUPON BOND. INTEREST RATE PRESENTED IS YIELD TO
MATURITY.
# SECURITY PLEDGED AS COLLATERAL FOR FUTURES TRANSACTIONS.
<< ALL OR A PORTION OF THIS SECURITY IS ON LOAN. (SEE NOTE 2)
** SECURITIES PURCHASED WITH CASH COLLATERAL FROM SECURITIES OUT-ON-LOAN. THE
FUND HAS ALSO RECEIVED NON-CASH COLLATERAL IN THE AMOUNT OF $5,076,850.
THE TOTAL COLLATERAL RECEIVED REPRESENTS 100.90% OF THE VALUE OF THE
PORTFOLIO SECURITIES LOANED.
* COST FOR FEDERAL INCOME TAX PURPOSES IS $448,964,387 AND NET UNREALIZED
APPRECIATION (DEPRECIATION) CONSISTS OF:
GROSS UNREALIZED APPRECIATION $ 39,670,433
GROSS UNREALIZED DEPRECIATION (36,761,147)
-------------
NET UNREALIZED APPRECIATION (DEPRECIATION) $ 2,909,286
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
36
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST EQUITY INCOME FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCK - 98.81%
BUSINESS SERVICES - 1.47%
66,200 MICROSOFT CORPORATION $ 1,768,202
---------------
CHEMICALS & ALLIED PRODUCTS - 10.59%
26,850 ABBOTT LABORATORIES 1,252,552
24,660 AIR PRODUCTS & CHEMICALS INCORPORATED 1,429,540
48,390 DU PONT (E.I.) DE NEMOURS & COMPANY 2,373,530
2,525 HOSPIRA INCORPORATED+ 84,588
12,060 MERCK & COMPANY INCORPORATED 387,608
48,655 PFIZER INCORPORATED 1,308,333
47,740 PROCTER & GAMBLE COMPANY 2,629,519
59,869 ROHM & HAAS COMPANY 2,648,006
14,300 WYETH 609,037
12,722,713
---------------
COMMUNICATIONS - 3.33%
2,179 AT&T CORPORATION 41,532
30,150 SBC COMMUNICATIONS INCORPORATED 776,965
78,449 VERIZON COMMUNICATIONS INCORPORATED 3,177,969
3,996,466
---------------
DEPOSITORY INSTITUTIONS - 13.57%
55,220 BANK OF AMERICA CORPORATION 2,594,788
69,615 CITIGROUP INCORPORATED 3,354,050
104,170 JP MORGAN CHASE & COMPANY 4,063,672
138,050 US BANCORP 4,323,726
37,450 WACHOVIA CORPORATION 1,969,870
16,306,106
---------------
EATING & DRINKING PLACES - 2.94%
110,200 MCDONALD'S CORPORATION 3,533,012
---------------
ELECTRIC, GAS & SANITARY SERVICES - 3.81%
3,420 DOMINION RESOURCES INCORPORATED 231,671
13,522 FIRSTENERGY CORPORATION 534,254
16,800 FPL GROUP INCORPORATED 1,255,800
49,330 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED 2,553,814
4,575,539
---------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 12.74%
60,670 EMERSON ELECTRIC COMPANY 4,252,967
6,426 FREESCALE SEMICONDUCTOR INCORPORATED CLASS B+ 117,981
130,680 GENERAL ELECTRIC COMPANY 4,769,820
28,790 INTEL CORPORATION 673,398
35,190 INTERNATIONAL BUSINESS MACHINES CORPORATION 3,469,030
58,200 MOTOROLA INCORPORATED 1,001,040
65,350 NOKIA OYJ ADR 1,024,035
15,308,271
---------------
37
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST EQUITY INCOME FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 3.47%
54,020 FORTUNE BRANDS INCORPORATED $ 4,169,264
---------------
FOOD & KINDRED PRODUCTS - 5.86%
77,740 PEPSICO INCORPORATED 4,058,028
123,250 SARA LEE CORPORATION 2,975,255
7,033,283
---------------
GENERAL MERCHANDISE STORES - 4.86%
72,437 MAY DEPARTMENT STORES COMPANY 2,129,648
71,440 TARGET CORPORATION 3,709,879
5,839,527
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 2.39%
35,014 3M COMPANY 2,873,599
---------------
INSURANCE AGENTS, BROKERS & SERVICE - 1.19%
35,330 METLIFE INCORPORATED 1,431,218
---------------
INSURANCE CARRIERS - 5.53%
7,830 AEGON NV 107,349
29,950 ALLSTATE CORPORATION 1,549,014
39,288 AMERICAN INTERNATIONAL GROUP INCORPORATED 2,580,043
65,050 ST. PAUL COMPANIES INCORPORATED 2,411,404
6,647,810
---------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 1.70%
18,000 BAXTER INTERNATIONAL INCORPORATED 621,720
24,965 BECTON DICKINSON & COMPANY 1,418,012
2,039,732
---------------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 4.52%
176,500 HEWLETT-PACKARD COMPANY 3,701,205
27,145 JOHNSON & JOHNSON 1,721,536
5,422,741
---------------
MOTION PICTURES - 1.37%
59,350 WALT DISNEY COMPANY 1,649,930
---------------
NON-DEPOSITORY CREDIT INSTITUTIONS - 2.81%
59,870 AMERICAN EXPRESS COMPANY 3,374,872
---------------
PAPER & ALLIED PRODUCTS - 1.02%
18,350 KIMBERLY-CLARK CORPORATION 1,207,613
556 NEENAH PAPER INCORPORATED+ 18,126
1,225,739
---------------
38
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST EQUITY INCOME FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
PETROLEUM REFINING & RELATED INDUSTRIES - 10.49%
28,709 BP PLC ADR $ 1,676,606
60,450 CHEVRONTEXACO CORPORATION 3,174,229
20,200 CONOCOPHILLIPS 1,753,966
98,514 EXXONMOBIL CORPORATION 5,049,828
16,460 ROYAL DUTCH PETROLEUM COMPANY 944,475
12,599,104
---------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 1.32%
28,585 MORGAN STANLEY 1,587,039
---------------
TOBACCO PRODUCTS - 1.74%
34,270 ALTRIA GROUP INCORPORATED 2,093,897
---------------
TRANSPORTATION EQUIPMENT - 2.09%
70,933 HONEYWELL INTERNATIONAL INCORPORATED 2,511,737
---------------
TOTAL COMMON STOCK (COST $100,442,993) 118,709,801
---------------
WARRANTS - 0.00%
1,415 LUCENT TECHNOLOGIES INCORPORATED (EXPIRE ON DECEMBER 10, 2007)+ 2,236
TOTAL WARRANTS (COST $2,250) 2,236
---------------
SHORT-TERM INVESTMENTS - 1.04%
1,244,242 WELLS FARGO MONEY MARKET TRUST~++ 1,244,242
TOTAL SHORT-TERM INVESTMENTS (COST $1,244,242) 1,244,242
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $101,689,485)* 99.85% $ 119,956,279
OTHER ASSETS AND LIABILITIES, NET 0.15 181,838
------ ---------------
TOTAL NET ASSETS 100.00% $ 120,138,117
====== ===============
+ 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.
++ SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $1,244,242.
* COST FOR FEDERAL INCOME TAX PURPOSES IS $101,759,101 AND NET UNREALIZED
APPRECIATION (DEPRECIATION) CONSISTS OF:
GROSS UNREALIZED APPRECIATION $ 21,092,342
GROSS UNREALIZED DEPRECIATION (2,895,164)
------------
NET UNREALIZED APPRECIATION (DEPRECIATION) $ 18,197,178
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
39
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCK - 99.81%
BUSINESS SERVICES - 1.51%
6 COMPUTER ASSOCIATES INTERNATIONAL INCORPORATED $ 186
17,095 MICROSOFT CORPORATION 456,608
456,794
---------------
CHEMICALS & ALLIED PRODUCTS - 10.68%
6,900 ABBOTT LABORATORIES 321,885
6,270 AIR PRODUCTS & CHEMICALS INCORPORATED 363,472
12,270 DU PONT (E.I.) DE NEMOURS & COMPANY 601,843
720 HOSPIRA INCORPORATED+ 24,120
3,090 MERCK & COMPANY INCORPORATED 99,313
12,390 PFIZER INCORPORATED 333,167
12,050 PROCTER & GAMBLE COMPANY 663,714
15,200 ROHM & HAAS COMPANY 672,296
3,635 WYETH 154,815
3,234,625
---------------
COMMUNICATIONS - 3.35%
450 AT&T CORPORATION 8,577
7,675 SBC COMMUNICATIONS INCORPORATED 197,785
19,910 VERIZON COMMUNICATIONS INCORPORATED 806,554
1,012,916
---------------
DEPOSITORY INSTITUTIONS - 13.69%
13,990 BANK OF AMERICA CORPORATION 657,390
17,670 CITIGROUP INCORPORATED 851,341
26,495 JP MORGAN CHASE & COMPANY 1,033,570
35,050 US BANCORP 1,097,766
9,610 WACHOVIA CORPORATION 505,486
4,145,553
---------------
EATING & DRINKING PLACES - 2.97%
28,050 MCDONALD'S CORPORATION 899,283
---------------
ELECTRIC, GAS & SANITARY SERVICES - 3.83%
450 DOMINION RESOURCES INCORPORATED 30,483
3,400 FIRSTENERGY CORPORATION 134,334
4,350 FPL GROUP INCORPORATED 325,162
12,950 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED 670,422
1,160,401
---------------
40
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 12.84%
15,450 EMERSON ELECTRIC COMPANY $ 1,083,045
1,650 FREESCALE SEMICONDUCTOR INCORPORATED CLASS B+ 30,294
33,245 GENERAL ELECTRIC COMPANY 1,213,443
7,465 INTEL CORPORATION 174,606
8,855 INTERNATIONAL BUSINESS MACHINES CORPORATION 872,926
14,750 MOTOROLA INCORPORATED 253,700
16,660 NOKIA OYJ ADR 261,062
3,889,076
---------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 3.50%
13,745 FORTUNE BRANDS INCORPORATED 1,060,839
---------------
FOOD & KINDRED PRODUCTS - 5.90%
19,750 PEPSICO INCORPORATED 1,030,950
31,350 SARA LEE CORPORATION 756,789
1,787,739
---------------
GENERAL MERCHANDISE STORES - 4.93%
18,360 MAY DEPARTMENT STORES COMPANY 539,784
18,378 TARGET CORPORATION 954,370
1,494,154
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 2.43%
8,950 3M COMPANY 734,526
---------------
INSURANCE AGENTS, BROKERS & SERVICE - 1.21%
9,050 METLIFE INCORPORATED 366,615
---------------
INSURANCE CARRIERS - 5.60%
2,024 AEGON NV 27,749
7,700 ALLSTATE CORPORATION 398,244
10,068 AMERICAN INTERNATIONAL GROUP INCORPORATED 661,166
16,460 ST. PAUL COMPANIES INCORPORATED 610,172
1,697,331
---------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 1.72%
4,600 BAXTER INTERNATIONAL INCORPORATED 158,884
6,363 BECTON DICKINSON & COMPANY 361,418
520,302
---------------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 4.55%
44,850 HEWLETT-PACKARD COMPANY 940,505
6,910 JOHNSON & JOHNSON 438,232
1,378,737
---------------
MOTION PICTURES - 1.39%
15,150 WALT DISNEY COMPANY 421,170
---------------
NON-DEPOSITORY CREDIT INSTITUTIONS - 2.84%
15,250 AMERICAN EXPRESS COMPANY 859,642
---------------
41
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
PAPER & ALLIED PRODUCTS - 1.04%
4,700 KIMBERLY-CLARK CORPORATION $ 309,307
142 NEENAH PAPER INCORPORATED+ 4,629
313,936
---------------
PETROLEUM REFINING & RELATED INDUSTRIES - 10.58%
7,365 BP PLC ADR 430,116
15,380 CHEVRONTEXACO CORPORATION 807,604
5,150 CONOCOPHILLIPS 447,174
25,004 EXXONMOBIL CORPORATION 1,281,705
4,160 ROYAL DUTCH PETROLEUM COMPANY 238,701
3,205,300
---------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 1.33%
7,270 MORGAN STANLEY 403,630
---------------
TOBACCO PRODUCTS - 1.81%
8,950 ALTRIA GROUP INCORPORATED 546,845
---------------
TRANSPORTATION EQUIPMENT - 2.11%
18,050 HONEYWELL INTERNATIONAL INCORPORATED 639,151
---------------
TOTAL COMMON STOCK (COST $25,866,266) 30,228,565
---------------
PRINCIPAL INTEREST RATE MATURITY DATE
SHORT-TERM INVESTMENTS - 0.04%
REPURCHASE AGREEMENTS - 0.04%
$ 12,000 GOLDMAN SACHS & COMPANY - 102% COLLATERALIZED BY US
GOVERNMENT SECURITIES (MATURITY VALUE $12,002) 1.52% 01/03/2005 12,000
---------------
TOTAL SHORT-TERM INVESTMENTS (COST $12,000) 12,000
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $25,878,266)* 99.85% $ 30,240,565
OTHER ASSETS AND LIABILITIES, NET 0.15 46,119
------ ---------------
TOTAL NET ASSETS 100.00% $ 30,286,684
====== ===============
+ NON-INCOME EARNING SECURITIES.
* COST FOR FEDERAL INCOME TAX PURPOSES IS $25,970,245 AND NET UNREALIZED
APPRECIATION (DEPRECIATION) CONSISTS OF:
GROSS UNREALIZED APPRECIATION $ 4,941,027
GROSS UNREALIZED DEPRECIATION (670,707)
-----------
NET UNREALIZED APPRECIATION (DEPRECIATION) $ 4,270,320
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
42
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCK - 98.68%
BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS - 2.29%
9,290 HOME DEPOT INCORPORATED $ 397,055
8,210 LOWE'S COMPANIES INCORPORATED 472,814
869,869
---------------
BUSINESS SERVICES - 15.46%
11,580 ADOBE SYSTEMS INCORPORATED 726,529
10,510 AUTODESK INCORPORATED 398,855
7 COMPUTER ASSOCIATES INTERNATIONAL INCORPORATED 218
14,780 EBAY INCORPORATED+ 1,718,618
12,810 ELECTRONIC ARTS INCORPORATED+ 790,121
41,846 MICROSOFT CORPORATION 1,117,707
15,120 SYMANTEC CORPORATION+ 389,491
19,680 YAHOO! INCORPORATED+ 741,542
5,883,081
---------------
CHEMICALS & ALLIED PRODUCTS - 8.03%
11,340 AMGEN INCORPORATED+ 727,461
11,110 GENENTECH INCORPORATED+ 604,829
19,350 GILEAD SCIENCES INCORPORATED+ 677,057
13,280 PROCTER & GAMBLE COMPANY 731,462
10,590 TEVA PHARMACEUTICAL INDUSTRIES LIMITED ADR 316,217
3,057,026
---------------
DEPOSITORY INSTITUTIONS - 0.00%
1 CITIGROUP INCORPORATED 48
---------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 11.74%
23,350 GENERAL ELECTRIC COMPANY 852,275
30,790 INTEL CORPORATION 720,178
11,920 LINEAR TECHNOLOGY CORPORATION 462,019
9,780 MAXIM INTEGRATED PRODUCTS INCORPORATED 414,574
8,650 MOLEX INCORPORATED 259,500
13,270 NETWORK APPLIANCE INCORPORATED+ 440,830
31,090 QUALCOMM INCORPORATED 1,318,216
4,467,592
---------------
ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES - 1.94%
4,720 MOODY'S CORPORATION 409,932
9,590 PAYCHEX INCORPORATED 326,827
736,759
---------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 1.89%
7,740 ILLINOIS TOOL WORKS INCORPORATED 717,343
---------------
FOOD & KINDRED PRODUCTS - 2.62%
10,750 PEPSICO INCORPORATED 561,150
6,320 WM WRIGLEY JR COMPANY 437,281
998,431
---------------
43
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
FOOD STORES - 3.97%
24,220 STARBUCKS CORPORATION+ $ 1,510,359
---------------
GENERAL MERCHANDISE STORES - 2.46%
18,060 TARGET CORPORATION 937,856
---------------
HEALTH SERVICES - 2.96%
5,670 BIOGEN IDEC INCORPORATED+ 377,678
18,990 CAREMARK RX INCORPORATED+ 748,776
1,126,454
---------------
HOLDING & OTHER INVESTMENT OFFICES - 0.85%
4,010 ALCON INCORPORATED 323,206
---------------
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES - 1.41%
9,050 BEST BUY COMPANY INCORPORATED 537,751
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 12.31%
8,470 3M COMPANY 695,133
19,060 APPLE COMPUTER INCORPORATED+ 1,227,464
3,980 BAKER HUGHES INCORPORATED 169,826
33,027 CISCO SYSTEMS INCORPORATED+ 637,421
26,636 DELL INCORPORATED+ 1,122,441
37,400 EMC CORPORATION+ 556,138
6,370 VARIAN MEDICAL SYSTEMS INCORPORATED+ 275,439
4,683,862
---------------
INSURANCE CARRIERS - 3.36%
8,480 UNITEDHEALTH GROUP INCORPORATED 746,494
4,640 WELLPOINT INCORPORATED+ 533,600
1,280,094
---------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 10.65%
9,930 BOSTON SCIENTIFIC CORPORATION+ 353,012
14,920 DANAHER CORPORATION 856,557
6,650 GUIDANT CORPORATION 479,465
10,630 MEDTRONIC INCORPORATED 527,992
16,880 ST. JUDE MEDICAL INCORPORATED+ 707,778
8,380 STRYKER CORPORATION 404,335
9,040 ZIMMER HOLDINGS INCORPORATED+ 724,285
4,053,424
---------------
METAL MINING - 0.77%
6,570 NEWMONT MINING CORPORATION 291,774
---------------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 1.91%
11,480 JOHNSON & JOHNSON 728,062
---------------
MISCELLANEOUS RETAIL - 3.58%
13,750 WAL-MART STORES INCORPORATED 726,275
16,550 WALGREEN COMPANY 635,024
1,361,299
---------------
44
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
NON-DEPOSITORY CREDIT INSTITUTIONS - 2.03%
13,710 AMERICAN EXPRESS COMPANY $ 772,833
---------------
OIL & GAS EXTRACTION - 1.98%
11,838 APACHE CORPORATION 598,648
3,310 BJ SERVICES COMPANY 154,047
752,695
---------------
PETROLEUM REFINING & RELATED INDUSTRIES - 1.50%
16,140 SUNCOR ENERGY INCORPORATED 571,356
---------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 3.01%
6,810 GOLDMAN SACHS GROUP INCORPORATED 708,512
7,010 T ROWE PRICE GROUP INCORPORATED 436,022
1,144,534
---------------
TRANSPORTATION BY AIR - 1.96%
7,580 FEDEX CORPORATION 746,554
---------------
TOTAL COMMON STOCK (COST $29,822,252) 37,552,262
---------------
WARRANTS - 0.00%
899 LUCENT TECHNOLOGIES INCORPORATED (EXPIRE ON DECEMBER 10, 2007)+ 1,420
TOTAL WARRANTS (COST $1,430) 1,420
---------------
PRINCIPAL INTEREST RATE MATURITY DATE
REPURCHASE AGREEMENTS - 1.52%
$ 577,000 GOLDMAN SACHS & COMPANY - 102%
COLLATERALIZED BY US GOVERNMENT SECURITIES
(MATURITY VALUE $577,072) 1.52% 01/03/2005 577,000
TOTAL REPURCHASE AGREEMENTS (COST $577,000) 577,000
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $30,400,682)* 100.20% $ 38,130,682
OTHER ASSETS AND LIABILITIES, NET (0.20) (76,122)
------ ---------------
TOTAL NET ASSETS 100.00% $ 38,054,560
====== ===============
+ NON-INCOME EARNING SECURITIES.
* COST FOR FEDERAL INCOME TAX PURPOSES IS $30,470,801 AND NET UNREALIZED
APPRECIATION (DEPRECIATION) CONSISTS OF:
GROSS UNREALIZED APPRECIATION $ 7,995,041
GROSS UNREALIZED DEPRECIATION (335,160)
-----------
NET UNREALIZED APPRECIATION (DEPRECIATION) $ 7,659,881
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
45
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCK - 99.68%
AUSTRALIA - 0.70%
19,000 WESTFIELD GROUP (DEPOSITORY INSTITUTIONS)+ $ 244,710
---------------
BELGIUM - 1.39%
17,600 FORTIS (DEPOSITORY INSTITUTIONS) 486,829
---------------
DENMARK - 2.06%
11,200 DANSKE BANK A/S (DEPOSITORY INSTITUTIONS) 343,313
6,932 NOVO NORDISK A/S CLASS B (CHEMICALS & ALLIED PRODUCTS) 378,739
722,052
---------------
FINLAND - 0.79%
8,700 TIETOENATOR OYJ (BUSINESS SERVICES) 276,716
---------------
FRANCE - 11.54%
18,200 ALCATEL SA (COMMUNICATIONS)+ 283,254
13,600 AXA (INSURANCE CARRIERS) 336,072
8,600 BOUYGUES SA (ENGINEERING CONSTRUCTION) 397,445
3,800 LAFARGE SA (STONE, CLAY, GLASS & CONCRETE PRODUCTS) 366,726
2,100 RENAULT SA (TRANSPORTATION EQUIPMENT) 175,690
8,100 SANOFI-SYNTHELABO SA (CHEMICALS & ALLIED PRODUCTS)+ 647,383
11,800 SODEXHO ALLIANCE SA (BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS) 357,031
6,000 TOTAL SA ADR (OIL & GAS EXTRACTION) 659,040
2,681 VINCI SA (BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS) 360,042
14,500 VIVENDI UNIVERSAL SA (COMMUNICATIONS)+ 462,967
4,045,650
---------------
GERMANY - 5.03%
6,100 BAYERISCHE MOTOREN WERKE AG (AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS)+ 275,275
3,200 CELESIO AG (CHEMICALS & ALLIED PRODUCTS) 260,280
23,000 DEUTSCHE TELEKOM AG (COMMUNICATIONS)+ 520,525
4,600 FRESENIUS MEDICAL CARE AG (HEALTH SERVICES) 370,214
1,900 SAP AG (BUSINESS SERVICES) 339,350
1,765,644
---------------
GREECE - 1.03%
18,000 COSMOTE MOBILE COMMUNICATIONS SA (COMMUNICATIONS) 361,125
---------------
HONG KONG - 3.93%
40,000 CHEUNG KONG HOLDINGS LIMITED (REAL ESTATE) 398,832
99,000 CHINA MOBILE (HONG KONG) LIMITED (COMMUNICATIONS) 335,617
594,000 CHINA PETROLEUM AND CHEMICAL CORPORATION (SINOPEC) (OIL COMPANIES) 244,548
25,560 SUNG HUNG KAI PROPERTIES LIMITED (REAL ESTATE) 255,676
31,000 TELEVISION BROADCASTS LIMITED (MOTION PICTURES) 143,978
1,378,651
---------------
HUNGARY - 0.75%
4,300 OTP BANK GDR (DEPOSITORY INSTITUTIONS) 262,300
---------------
INDIA - 0.51%
9,000 DOCTOR REDDY'S LABORATORIES LIMITED ADR (HEALTH SERVICES) 178,470
---------------
46
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
ISRAEL - 0.88%
10,400 TEVA PHARMACEUTICAL INDUSTRIES LIMITED ADR (CHEMICALS & ALLIED PRODUCTS) $ 310,544
---------------
ITALY - 4.73%
13,607 ENI SPA (OIL & GAS EXTRACTION) 340,684
33,500 MEDIASET SPA (COMMUNICATIONS) 424,840
19,000 SANPAOLO IMI SPA (DEPOSITORY INSTITUTIONS) 273,753
25,000 TELECOMM ITALIA MOBILE SPA (COMMUNICATIONS) 186,897
75,000 UNICREDITO ITALIANO SPA (DEPOSITORY INSTITUTIONS) 431,222
1,657,396
---------------
JAPAN - 20.56%
19,000 AEON COMPANY LIMITED (GENERAL MERCHANDISE STORES) 317,068
32,000 AJINOMOTO COMPANY INCORPORATED (FOOD & KINDRED PRODUCTS) 380,990
78,000 EBARA CORPORATION (MISCELLANEOUS MANUFACTURING INDUSTRIES) 360,047
42,000 KANEKA CORPORATION (CHEMICALS & ALLIED PRODUCTS) 475,456
1,800 KEYENCE CORPORATION (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS,
EXCEPT COMPUTER EQUIPMENT) 403,318
20,000 MITSUI & COMPANY LIMITED (MISCELLANEOUS SERVICES) 179,370
8,100 MURATA MANUFACTURING COMPANY LIMITED
(ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 452,942
97,000 NIPPON OIL CORPORATION (PETROLEUM REFINING & RELATED INDUSTRIES) 621,928
218,000 NIPPON STEEL CORPORATION (PRIMARY METAL INDUSTRIES) 533,991
101 NIPPON UNIPAC HOLDING (PAPER & ALLIED PRODUCTS) 453,401
49,352 NISSAN MOTOR COMPANY LIMITED (AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS) 536,529
241 NTT DOCOMO INCORPORATED (COMMUNICATIONS) 444,511
13,000 OMRON CORPORATION (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS,
EXCEPT COMPUTER EQUIPMENT) 310,188
29,000 SEINO TRANSPORTATION COMPANY LIMITED (TRANSPORTATION BY AIR) 271,689
10,000 SHIMACHU COMPANY LIMITED (MISCELLANEOUS MANUFACTURING INDUSTRIES) 247,390
33,000 SHOWA SHELL SEKIYU KK (PETROLEUM REFINING & RELATED INDUSTRIES) 300,468
32,000 SUZUKI MOTOR CORPORATION (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 584,600
17,000 THK COMPANY LIMITED (WHOLESALE TRADE NON-DURABLE GOODS) 336,782
7,210,668
---------------
SOUTH KOREA - 0.81%
12,700 SK TELECOM COMPANY LIMITED ADR (COMMUNICATIONS) 282,575
---------------
NETHERLANDS - 7.06%
20,200 ASML HOLDING NV (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS,
EXCEPT COMPUTER EQUIPMENT)+ 324,265
17,600 ING GROEP NV (FINANCIAL SERVICES) 532,521
50,000 KONINKLIJKE AHOLD NV (FOOD STORES)+ 387,386
11,500 ROYAL DUTCH PETROLEUM COMPANY (PETROLEUM REFINING & RELATED INDUSTRIES) 661,989
2,400 UNILEVER NV CVA (FOOD & KINDRED PRODUCTS) 160,924
20,400 WOLTERS KLUWER NV (PRINTING, PUBLISHING & ALLIED INDUSTRIES) 409,553
2,476,638
---------------
RUSSIA - 0.55%
1,400 MOBILE TELESYSTEMS ADR (COMMUNICATIONS) 193,914
---------------
47
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
SINGAPORE - 2.65%
30,000 DBS GROUP HOLDINGS LIMITED (DEPOSITORY INSTITUTIONS) $ 295,883
114,000 SINGAPORE PRESS HOLDINGS LIMITED (PRINTING, PUBLISHING & ALLIED INDUSTRIES) 321,245
37,000 UNITED OVERSEAS BANK LIMITED (DEPOSITORY INSTITUTIONS) 312,791
929,919
---------------
SPAIN - 3.17%
15,700 ACTIVIDADES DE CONSTRUCCION Y SERVICIOS SA (BUILDING CONSTRUCTION-GENERAL
CONTRACTORS & OPERATIVE BUILDERS) 358,516
20,000 BANCO BILBAO VIZCAYA ARGENTARIA SA (DEPOSITORY INSTITUTIONS) 354,764
23,300 INDRA SISTEMAS SA (MISCELLANEOUS REPAIR SERVICES) 398,098
1,111,378
---------------
SWEDEN - 5.18%
8,400 AUTOLIV INCORPORATED (TRANSPORTATION EQUIPMENT) 401,962
34,100 NORDEA AB (DEPOSITORY INSTITUTIONS) 343,802
17,600 SECURITAS AB (BUSINESS SERVICES) 301,923
80,000 SKANDIA FORSAKRINGS AB (INSURANCE CARRIERS) 398,471
116,000 TELEFONAKTIEBOLAGET LM ERICSSON CLASS B (COMMUNICATIONS)+ 370,061
1,816,219
---------------
SWITZERLAND - 6.38%
27,800 ABB LIMITED (HOLDING & OTHER INVESTMENT OFFICES)+ 155,246
700 NESTLE SA (FOOD & KINDRED PRODUCTS) 183,141
12,600 NOVARTIS AG (CHEMICALS & ALLIED PRODUCTS) 634,931
4,400 ROCHE HOLDING AG (HEALTH SERVICES) 506,516
4,300 UBS AG (FINANCIAL SERVICES) 360,571
2,389 ZURICH FINANCIAL SERVICES AG (DEPOSITORY INSTITUTIONS)+ 398,342
2,238,747
---------------
THAILAND - 1.14%
140,000 ADVANCED INFORMATION SERVICE PUBLIC COMPANY LIMITED (FOREIGN REGISTERED) (COMMUNICATIONS) 400,000
---------------
UNITED KINGDOM - 18.84%
26,500 AVIVA PLC (INSURANCE CARRIERS) 319,510
46,300 BARCLAYS PLC (DEPOSITORY INSTITUTIONS) 520,904
14,300 BERKELEY GROUP HOLDINGS PLC (BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS)+ 222,108
50,100 BHP BILLITON PLC (COAL MINING)+ 587,222
58,500 BP PLC (OIL & GAS EXTRACTION) 570,556
74,000 COMPASS GROUP PLC (EATING & DRINKING PLACES) 349,854
21,290 EMAP PLC (PRINTING, PUBLISHING & ALLIED INDUSTRIES) 333,333
72,000 EMI GROUP PLC (AMUSEMENT & RECREATION SERVICES) 366,317
30,600 GLAXOSMITHKLINE PLC (CHEMICALS & ALLIED PRODUCTS) 717,912
34,400 HSBC HOLDINGS PLC (DEPOSITORY INSTITUTIONS) 580,532
195,000 LEGAL & GENERAL GROUP PLC (HOLDING & OTHER INVESTMENT OFFICES) 411,819
50,000 SCOTTISH & NEWCASTLE PLC (BUSINESS SERVICES) 418,298
56,000 SHELL TRANSPORT & TRADING COMPANY PLC (OIL & GAS EXTRACTION) 477,364
21,200 STANDARD CHARTERED PLC (DEPOSITORY INSTITUTIONS) 394,198
30,700 WPP GROUP PLC (COMMUNICATIONS) 337,732
6,607,659
---------------
TOTAL COMMON STOCK (COST $30,989,920) 34,957,804
---------------
48
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
SHORT-TERM INVESTMENTS - 0.16%
56,625 WELLS FARGO MONEY MARKET TRUST~++ $ 56,625
TOTAL SHORT-TERM INVESTMENTS (COST $56,625) 56,625
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $31,046,545)* 99.84% $ 35,014,429
OTHER ASSETS AND LIABILITIES, NET 0.16 56,976
------ ---------------
TOTAL NET ASSETS 100.00% $ 35,071,405
====== ===============
+ 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.
++ SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $56,625.
* COST FOR FEDERAL INCOME TAX PURPOSES IS $31,180,534 AND NET UNREALIZED
APPRECIATION (DEPRECIATION) CONSISTS OF:
GROSS UNREALIZED APPRECIATION $ 4,041,483
GROSS UNREALIZED DEPRECIATION (207,588)
-----------
NET UNREALIZED APPRECIATION (DEPRECIATION) $ 3,833,895
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
49
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST LARGE COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCK - 98.93%
APPAREL & ACCESSORY STORES - 2.12%
46,200 KOHL'S CORPORATION+ $ 2,271,654
---------------
BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS - 8.58%
36,700 FASTENAL COMPANY 2,259,252
83,800 HOME DEPOT INCORPORATED 3,581,612
58,400 LOWE'S COMPANIES INCORPORATED 3,363,256
9,204,120
---------------
BUSINESS SERVICES - 24.83%
22,900 AUTOMATIC DATA PROCESSING INCORPORATED 1,015,615
22 COMPUTER ASSOCIATES INTERNATIONAL INCORPORATED 684
89,900 EBAY INCORPORATED+ 10,453,572
115,700 FIRST DATA CORPORATION 4,921,878
79,400 FISERV INCORPORATED+ 3,191,086
212,200 MICROSOFT CORPORATION 5,667,862
36,500 YAHOO! INCORPORATED+ 1,375,320
26,626,017
---------------
CHEMICALS & ALLIED PRODUCTS - 8.52%
53,200 AMGEN INCORPORATED+ 3,412,780
51,200 GENENTECH INCORPORATED+ 2,787,328
20,200 GENZYME CORPORATION+ 1,173,014
65,650 PFIZER INCORPORATED 1,765,329
9,138,451
---------------
DEPOSITORY INSTITUTIONS - 0.92%
20,200 STATE STREET CORPORATION 992,224
---------------
EDUCATIONAL SERVICES - 1.60%
21,200 APOLLO GROUP INCORPORATED CLASS A+ 1,711,052
---------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 10.03%
208,300 INTEL CORPORATION 4,872,137
63,300 LINEAR TECHNOLOGY CORPORATION 2,453,508
218,800 NOKIA OYJ ADR 3,428,596
10,754,241
---------------
ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES - 3.54%
111,250 PAYCHEX INCORPORATED 3,791,400
---------------
GENERAL MERCHANDISE STORES - 2.49%
51,500 TARGET CORPORATION 2,674,395
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 9.85%
215,200 CISCO SYSTEMS INCORPORATED+ 4,153,360
103,100 DELL INCORPORATED+ 4,344,634
138,700 EMC CORPORATION+ 2,062,469
10,560,463
---------------
50
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST LARGE COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
INSURANCE CARRIERS - 4.20%
68,575 AMERICAN INTERNATIONAL GROUP INCORPORATED $ 4,503,320
---------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 5.49%
118,575 MEDTRONIC INCORPORATED 5,889,620
---------------
MISCELLANEOUS RETAIL - 2.18%
44,200 WAL-MART STORES INCORPORATED 2,334,644
---------------
PERSONAL SERVICES - 2.69%
65,800 CINTAS CORPORATION 2,885,988
---------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 11.89%
310,950 CHARLES SCHWAB CORPORATION 3,718,962
40,500 FRANKLIN RESOURCES INCORPORATED 2,820,825
59,675 GOLDMAN SACHS GROUP INCORPORATED 6,208,587
12,748,374
---------------
TOTAL COMMON STOCK (COST $108,035,636) 106,085,963
---------------
WARRANTS - 0.00%
114 LUCENT TECHNOLOGIES INCORPORATED (EXPIRE ON DECEMBER 10, 2007)+ 180
TOTAL WARRANTS (COST $181) 180
---------------
SHORT-TERM INVESTMENTS - 0.81%
862,454 WELLS FARGO MONEY MARKET TRUST~++ 862,454
TOTAL SHORT-TERM INVESTMENTS (COST $862,454) 862,454
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $108,898,271)* 99.74% $ 106,948,597
OTHER ASSETS AND LIABILITIES, NET 0.26 280,324
------ ---------------
TOTAL NET ASSETS 100.00% $ 107,228,921
====== ===============
+ NON-INCOME EARNING SECURITIES.
++ SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $862,454.
~ 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 $110,518,703 AND NET UNREALIZED
APPRECIATION (DEPRECIATION) CONSISTS OF:
GROSS UNREALIZED APPRECIATION $ 16,819,262
GROSS UNREALIZED DEPRECIATION (20,389,368)
------------
NET UNREALIZED APPRECIATION (DEPRECIATION) $ (3,570,106)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
51
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST MONEY MARKET FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
CERTIFICATES OF DEPOSIT - 1.71%
$ 1,000,000 CDC IXIS 2.45% 10/06/2005 $ 1,000,000
TOTAL CERTIFICATES OF DEPOSIT (COST $1,000,000) 1,000,000
---------------
COMMERCIAL PAPER - 46.17%
1,800,000 ALLIANCE & LEICESTER PLC^ 2.13 02/22/2005 1,794,675
1,000,000 ANZ NATIONAL (INTERNATIONAL) LIMITED^ 2.85 12/15/2005 972,608
1,700,000 BETA FINANCE INCORPORATED^ 2.34 02/25/2005 1,694,143
1,800,000 CC USA INCORPORATED^ 2.04 01/24/2005 1,797,858
1,500,000 DNB NOR BANK ASA^ 2.24 02/14/2005 1,496,080
1,500,000 GALAXY FUNDING INCORPORATED^ 2.37 03/01/2005 1,494,371
1,700,000 GOVCO INCORPORATED^ 2.33 02/28/2005 1,693,838
1,500,000 GRAMPIAN FUNDING LLC^ 2.26 02/18/2005 1,495,668
1,500,000 HBOS TREASURY SERVICES^ 2.25 02/14/2005 1,496,062
1,300,000 K2 (USA) LLC^ 2.24 02/08/2005 1,297,088
1,900,000 LEXINGTON PARKER CAPITAL CORPORATION^ 2.09 03/02/2005 1,893,618
1,430,000 PERRY GLOBAL FUNDING LLC^ 2.37 03/03/2005 1,424,446
1,900,000 SANTANDER CENTRAL HISPANO FINANCE (DELAWARE) INCORPORATED^ 2.09 03/24/2005 1,891,176
1,800,000 SCALDIS CAPITAL LLC^ 2.12 03/24/2005 1,791,520
1,700,000 SEDNA FINANCE INCORPORATED^ 2.32 02/07/2005 1,696,166
1,700,000 SPINTAB AB^ 2.32 02/24/2005 1,694,303
1,500,000 TANGO FINANCE CORPORATION^ 2.31 02/22/2005 1,495,188
TOTAL COMMERCIAL PAPER (COST $27,118,808) 27,118,808
---------------
EXTENDABLE BONDS - 5.11%
2,000,000 GENERAL ELECTRIC CAPITAL CORPORATION+/- 2.46 01/09/2006 2,000,000
1,000,000 NORTHERN ROCK PLC+/-++ 2.48 01/09/2006 1,000,000
TOTAL EXTENDABLE BONDS (COST $3,000,000) 3,000,000
---------------
MEDIUM TERM NOTES - 8.98%
500,000 BANK OF AMERICA SECURITIES+/- 2.39 01/03/2005 500,000
1,000,000 BEAR STEARNS COMPANIES+/- 2.46 01/03/2005 1,000,000
1,000,000 LIQUID FUNDING LIMITED+/-++ 2.41 09/22/2005 1,000,000
1,000,000 MARSHALL & ILSLEY BANK 5.21 12/15/2005 1,021,177
1,000,000 NATEXIS BANQUES POPULAIRES NEW YORK+/- 2.31 09/09/2005 999,760
500,000 PREMIUM ASSET TRUST+/-++ 2.43 12/15/2005 500,000
250,000 USAA CAPITAL CORPORATION++ 3.13 12/15/2005 250,671
TOTAL MEDIUM TERM NOTES (COST $5,271,608) 5,271,608
---------------
PROMISSORY NOTES - 1.70%
1,000,000 CITIGROUP GLOBAL MARKETS INCORPORATED+/- 2.38 06/06/2005 1,000,000
TOTAL PROMISSORY NOTES (COST $1,000,000) 1,000,000
---------------
52
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST MONEY MARKET FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
REPURCHASE AGREEMENTS - 22.12%
2,000,000 BEAR STEARNS COMPANIES INCORPORATED - 102% COLLATERALIZED BY
US GOVERNMENT SECURITIES (MATURITY VALUE $2,000,376) 2.29% 01/03/2005 $ 2,000,000
1,000,000 GOLDMAN SACHS & COMPANY - 102% COLLATERALIZED BY
US GOVERNMENT SECURITIES (MATURITY VALUE $1,000,189) 2.30 01/03/2005 1,000,000
1,000,000 GOLDMAN SACHS & COMPANY - 102% COLLATERALIZED BY
US GOVERNMENT SECURITIES (MATURITY VALUE $1,000,388) 2.36 01/06/2005 1,000,000
1,000,000 GOLDMAN SACHS & COMPANY - 102% COLLATERALIZED BY
US GOVERNMENT SECURITIES (MATURITY VALUE $1,000,443) 2.31 01/07/2005 1,000,000
3,000,000 GOLDMAN SACHS & COMPANY - 102% COLLATERALIZED BY
US GOVERNMENT SECURITIES (MATURITY VALUE $3,000,565) 2.29 01/03/2005 3,000,000
1,000,000 MORGAN STANLEY & COMPANY - 102% COLLATERALIZED BY
US GOVERNMENT SECURITIES (MATURITY VALUE $1,000,127) 1.55 01/03/2005 1,000,000
4,000,000 UBS SECURITIES LLC - 102% COLLATERALIZED BY
US GOVERNMENT SECURITIES (MATURITY VALUE $4,000,756) 2.30 01/03/2005 4,000,000
TOTAL REPURCHASE AGREEMENTS (COST $13,000,000) 13,000,000
---------------
TIME DEPOSITS - 13.62%
1,000,000 BANCO BILBAO VIZCAYA ARGENTARIA 2.40 01/03/2005 1,000,000
1,000,000 BARCLAYS BANK PLC LONDON 2.53 01/04/2005 1,000,000
2,000,000 DANSKE BANK A/S COPENHAGEN 2.30 01/04/2005 2,000,000
1,000,000 DEXIA CREDIT LOCAL DE FRANCE 2.38 01/03/2005 1,000,000
1,000,000 HSBC BANK LONDON PLC 2.25 01/03/2005 1,000,000
1,000,000 JP MORGAN CHASE BANK 2.00 01/03/2005 1,000,000
1,000,000 KBC BANK NV BRUSSELS 2.30 01/04/2005 1,000,000
TOTAL TIME DEPOSITS (COST $8,000,000) 8,000,000
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $58,390,416)* 99.41% $ 58,390,416
OTHER ASSETS AND LIABILITIES, NET 0.59 347,195
------ ---------------
TOTAL NET ASSETS 100.00% $ 58,737,611
====== ===============
^ ZERO COUPON/ STEPPED COUPON BOND. INTEREST RATE PRESENTED IS YIELD TO
MATURITY.
+/- VARIABLE RATE SECURITIES.
++ SECURITIES THAT MAY BE RESOLD TO "QUALIFIED INSTITUTIONAL BUYERS" UNDER
RULE 144A OR SECURITIES OFFERED PURSUANT TO SECTION 4 (2) OF THE
SECURITIES ACT OF 1933, AS AMENDED.
* 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.
53
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCK - 97.36%
AGRICULTURAL SERVICES - 0.64%
59,142 VCA ANTECH INCORPORATED+<< $ 1,159,183
---------------
AMUSEMENT & RECREATION SERVICES - 2.41%
50,465 GAYLORD ENTERTAINMENT COMPANY+ 2,095,812
20,700 PENN NATIONAL GAMING INCORPORATED+ 1,253,385
29,482 WMS INDUSTRIES INCORPORATED+<< 988,826
4,338,023
---------------
APPAREL & ACCESSORY STORES - 0.89%
43,200 THE CHILDREN'S PLACE RETAIL STORES INCORPORATED+ 1,599,696
---------------
AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS - 0.60%
66,107 RUSH ENTERPRISES INCORPORATED+ 1,072,917
---------------
BUSINESS SERVICES - 24.94%
1,948 ACCELR8 TECHNOLOGY CORPORATION+ 4,091
64,700 ALLIANCE DATA SYSTEMS CORPORATION+ 3,071,956
237,973 AUTOBYTEL INCORPORATED+ 1,437,357
291,551 CNET NETWORKS INCORPORATED+ 3,274,118
70,200 CONCUR TECHNOLOGIES INCORPORATED+ 625,482
173,100 FINDWHAT.COM+<< 3,069,063
19,562 FIRST ADVANTAGE CORPORATION+ 399,065
131,775 GEVITY HR INCORPORATED 2,709,294
405,891 HYPERCOM CORPORATION+ 2,402,875
48,000 INFOSPACE INCORPORATED+<< 2,282,400
150,232 INTERSECTIONS INCORPORATED+ 2,591,502
19,300 IPAYMENT INCORPORATED+ 955,736
566,581 IVILLAGE INCORPORATED+ 3,501,471
95,900 LABOR READY INCORPORATED+ 1,622,628
1 NETIQ CORPORATION+ 12
170,361 OPEN SOLUTIONS INCORPORATED+ 4,422,571
195,228 QUEST SOFTWARE INCORPORATED+ 3,113,887
176,100 SAPIENT CORPORATION+ 1,392,951
42,549 SI INTERNATIONAL INCORPORATED+ 1,308,807
254,968 TIBCO SOFTWARE INCORPORATED+ 3,401,273
82,391 TNS INCORPORATED+ 1,800,243
78,337 TRANSACTION SYSTEMS ARCHITECTS INCORPORATED CLASS A+ 1,554,989
44,941,771
---------------
CHEMICALS & ALLIED PRODUCTS - 11.42%
103,765 ANDRX CORPORATION+ 2,265,190
30,274 BONE CARE INTERNATIONAL INCORPORATED+ 843,131
4,090 ENCYSIVE PHARMACEUTICALS INCORPORATED+ 40,614
42,200 EYETECH PHARMACEUTICALS INCORPORATED+<< 1,920,100
53,564 FIRST HORIZON PHARMACEUTICAL CORPORATION+ 1,226,080
114,675 INSPIRE PHARMACEUTICALS INCORPORATED+ 1,923,100
23,500 MARTEK BIOSCIENCES CORPORATION+ 1,203,200
104,197 MEDICINES COMPANY+<< 3,000,873
63,700 NEKTAR THERAPEUTICS+ 1,289,288
54
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
CHEMICALS & ALLIED PRODUCTS (CONTINUED)
52,400 NEUROCRINE BIOSCIENCES INCORPORATED+ $ 2,583,320
35,203 NITROMED INCORPORATED+<< 938,160
38,200 OLIN CORPORATION 841,164
71,400 TANOX INCORPORATED+<< 1,085,280
41,500 USANA HEALTH SCIENCES INCORPORATED+<< 1,419,300
20,578,800
---------------
COMMUNICATIONS - 5.37%
110,700 ALAMOSA HOLDINGS INCORPORATED+<< 1,380,429
62,582 ALVARION LIMITED+ 831,089
30,700 J2 GLOBAL COMMUNICATIONS INCORPORATED+<< 1,059,150
72,030 NII HOLDINGS INCORPORATED CLASS B+ 3,417,823
421,048 UBIQUITEL INCORPORATED+ 2,997,862
9,686,353
---------------
CONSTRUCTION SPECIAL TRADE CONTRACTORS - 1.34%
51,317 DYCOM INDUSTRIES INCORPORATED+<< 1,566,195
106,000 QUANTA SERVICES INCORPORATED+ 848,000
2,414,195
---------------
DEPOSITORY INSTITUTIONS - 1.73%
52,500 COMMERCIAL CAPITAL BANCORPORATION INCORPORATED 1,216,950
21,500 FIDELITY BANKSHARES INCORPORATED 919,340
18,600 FIRST REPUBLIC BANK 985,800
3,122,090
---------------
EATING & DRINKING PLACES - 0.67%
37,900 RARE HOSPITALITY INTERNATIONAL INCORPORATED+ 1,207,494
---------------
EDUCATIONAL SERVICES - 1.45%
59,300 LAUREATE EDUCATION INCORPORATED+ 2,614,537
---------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 4.65%
20,737 COMTECH TELECOMMUNICATIONS CORPORATION+ 779,919
126,322 HEXEL CORPORATION+ 1,831,669
30,400 MERCURY COMPUTER SYSTEMS INCORPORATED+ 902,272
100,038 NMS COMMUNICATIONS CORPORATION+ 631,240
51,900 OMNIVISION TECHNOLOGIES INCORPORATED+<< 952,365
105,404 PIXELWORKS INCORPORATED+ 1,195,281
42,800 RAYOVAC CORPORATION+ 1,307,968
86,015 UNIVERSAL DISPLAY CORPORATION+<< 774,135
8,374,849
---------------
ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES - 4.74%
23,802 CAMBRIDGE DISPLAY TECHNOLOGY INCORPORATED+<< 270,867
26,600 CORPORATE EXECUTIVE BOARD COMPANY 1,780,604
168,054 NAVIGANT CONSULTING INCORPORATED+ 4,470,236
22,649 RESOURCES CONNECTION INCORPORATED+<< 1,230,067
32,600 RIGEL PHARMACEUTICALS INCORPORATED+<< 796,092
8,547,866
---------------
55
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
HEALTH SERVICES - 3.41%
43,832 COVANCE INCORPORATED+ $ 1,698,490
98,600 KINDRED HEALTHCARE INCORPORATED+<< 2,953,070
38,131 MATRIA HEALTHCARE INCORPORATED+<< 1,489,778
6,141,338
---------------
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES - 1.71%
16,516 CHOICE HOTELS INTERNATIONAL INCORPORATED 957,928
38,900 STATION CASINOS INCORPORATED 2,127,052
3,084,980
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 4.67%
44,149 ACTUANT CORPORATION CLASS A+ 2,302,370
34,353 ENGINEERED SUPPORT SYSTEMS INCORPORATED 2,034,385
83,800 GARDNER DENVER INCORPORATED+ 3,041,102
48,400 TRANSACT TECHNOLOGIES INCORPORATED+ 1,033,824
8,411,681
---------------
INSURANCE CARRIERS - 1.25%
70,495 PRIMUS GUARANTY LIMITED+<< 1,155,413
33,900 WELLCARE HEALTH PLANS INCORPORATED+ 1,101,750
2,257,163
---------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 5.69%
86,800 ADVANCED MEDICAL OPTICS INCORPORATED+<< 3,570,952
105,186 DJ ORTHOPEDICS INCORPORATED+ 2,253,084
156,300 PERKINELMER INCORPORATED 3,515,187
37,500 PHOTON DYNAMICS INCORPORATED+ 910,500
10,249,723
---------------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 0.45%
109,900 IDENTIX INCORPORATED+ 811,062
---------------
MISCELLANEOUS RETAIL - 4.08%
295,052 MARVEL ENTERPRISES INCORPORATED+<< 6,042,665
55,400 PRICELINE.COM INCORPORATED+<< 1,306,886
7,349,551
---------------
MOTION PICTURES - 0.89%
150,200 LIONS GATE ENTERTAINMENT CORPORATION+<< 1,595,124
---------------
MOTOR FREIGHT TRANSPORTATION & WAREHOUSING - 1.11%
104,064 SIRVA INCORPORATED+ 2,000,110
---------------
NON-DEPOSITORY CREDIT INSTITUTIONS - 1.35%
353,700 E-LOAN INCORPORATED+<< 1,195,506
27,100 WESTCORP 1,244,703
2,440,209
---------------
OIL & GAS EXTRACTION - 0.65%
31,400 PATINA OIL & GAS CORPORATION 1,177,500
---------------
56
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
PERSONAL SERVICES - 0.32%
22,501 JACKSON HEWITT TAX SERVICE INCORPORATED $ 568,150
---------------
RAILROAD TRANSPORTATION - 0.85%
54,727 GENESEE & WYOMING INCORPORATED+ 1,539,470
---------------
REAL ESTATE - 3.26%
175,275 CB RICHARD ELLIS GROUP INCORPORATED+ 5,880,476
---------------
RUBBER & MISCELLANEOUS PLASTICS PRODUCTS - 0.52%
17,849 TREX COMPANY INCORPORATED+<< 936,002
---------------
TRANSPORTATION EQUIPMENT - 0.72%
19,000 OSHKOSH TRUCK CORPORATION 1,299,220
---------------
TRANSPORTATION SERVICES - 0.63%
21,800 HUB GROUP INCORPORATED CLASS A+ 1,138,396
---------------
WHOLESALE TRADE NON-DURABLE GOODS - 0.69%
47,000 AIRGAS INCORPORATED 1,245,970
---------------
WHOLESALE TRADE-DURABLE GOODS - 4.26%
99,700 BLUELINX HOLDINGS INCORPORATED+<< 1,442,659
106,188 HUGHES SUPPLY INCORPORATED 3,435,182
99,657 PSS WORLD MEDICAL INCORPORATED+ 1,247,207
62,980 WEST MARINE INCORPORATED+<< 1,558,755
7,683,803
---------------
TOTAL COMMON STOCK (COST $151,180,070) 175,467,702
---------------
COLLATERAL FOR SECURITIES LENDING - 18.42%
COLLATERAL INVESTED IN MONEY MARKET FUNDS - 2.88%
909,957 FEDERATED INVESTORS PRIME OBLIGATIONS FUND 909,957
4,288,611 SHORT TERM INVESTMENTS COMPANY LIQUID ASSETS PORTFOLIO 4,288,611
5,198,568
---------------
PRINCIPAL INTEREST RATE MATURITY DATE
COLLATERAL INVESTED IN OTHER SHORT-TERM ASSETS - 15.54%
$ 14,000,000 MORGAN STANLEY AGENCY MORTGAGE REPURCHASE AGREEMENT 2.20% 01/03/2005 14,000,000
14,000,000 BEAR STEARNS INTERNATIONAL ABS REPURCHASE AGREEMENT 2.36 01/03/2005 14,000,000
28,000,000
---------------
TOTAL COLLATERAL FOR SECURITIES LENDING** (COST $33,198,568) 33,198,568
---------------
57
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME VALUE
SHORT-TERM INVESTMENTS - 2.46%
$ 4,447,644 WELLS FARGO MONEY MARKET TRUST~++ $ 4,447,644
TOTAL SHORT-TERM INVESTMENTS (COST $4,447,644) 4,447,644
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $188,826,282)* 118.25% $ 213,113,914
OTHER ASSETS AND LIABILITIES, NET (18.25) (32,884,343)
------ ---------------
TOTAL NET ASSETS 100.00% $ 180,229,571
====== ===============
<< ALL OR A PORTION OF THIS SECURITY IS ON LOAN. (SEE NOTE 2)
+ NON-INCOME EARNING SECURITIES.
++ SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $4,447,644.
~ 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.
** SECURITIES PURCHASED WITH CASH COLLATERAL FROM SECURITIES OUT-ON-LOAN. THE
FUND HAS ALSO RECEIVED NON-CASH COLLATERAL IN THE AMOUNT OF $3,058,800.
THE TOTAL COLLATERAL RECEIVED REPRESENTS 104.83% OF THE VALUE OF THE
PORTFOLIO SECURITIES LOANED.
* COST FOR FEDERAL INCOME TAX PURPOSES IS $189,400,518 AND NET UNREALIZED
APPRECIATION (DEPRECIATION) CONSISTS OF:
GROSS UNREALIZED APPRECIATION $ 27,521,357
GROSS UNREALIZED DEPRECIATION (3,807,961)
------------
NET UNREALIZED APPRECIATION (DEPRECIATION) $ 23,713,396
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
58
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
ASSET-BACKED SECURITIES - 7.89%
$ 266,000 AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST SERIES 2004-3
CLASS A 4.35% 12/15/2011 $ 270,375
130,000 AMERIQUEST MORTGAGE SECURITIES INCORPORATED SERIES 2004-R12
CLASS A3+/- 2.63 01/25/2035 130,000
252,000 CAPITAL AUTO RECEIVABLES ASSET TRUST SERIES 2004-1 CLASS A3 2.00 11/15/2007 248,389
229,000 CAPITAL AUTO RECEIVABLES ASSET TRUST SERIES 2004-2 CLASS A2 3.35 02/15/2008 228,678
650,000 CHASE MANHATTAN AUTO OWNER TRUST SERIES 2004-A CLASS A3 2.08 05/15/2008 641,569
497,000 CITIBANK CREDIT CARD ISSUANCE TRUST SERIES 2000-A3 CLASS A3 6.88 11/16/2009 540,892
224,000 CITIBANK CREDIT CARD ISSUANCE TRUST SERIES 2003-A10 CLASS A10 4.75 12/10/2015 225,650
35,000 CITIBANK CREDIT CARD ISSUANCE TRUST SERIES 2003-A6 CLASS A6 2.90 05/17/2010 34,076
706,000 CITIBANK CREDIT CARD ISSUANCE TRUST SERIES 2004-A1 CLASS A1 2.55 01/20/2009 693,986
213,000 CITIBANK CREDIT CARD ISSUANCE TRUST SERIES 2004-A8 CLASS A8 4.90 12/12/2016 215,463
100,000 CITIBANK CREDIT CARD ISSUANCE TRUST SERIES 2003-A3 CLASS A3 3.10 03/10/2010 98,221
180,000 COUNTRYWIDE ASSET-BACKED CERTIFICATES SERIES 2004-6
CLASS 2A2+/- 2.74 08/25/2032 180,003
187,000 COUNTRYWIDE ASSET-BACKED CERTIFICATES SERIES 2004-S1
CLASS A2^ 3.84 03/25/2020 186,883
224,000 CWL SERIES 2004-11 CLASS A2+/- 2.56 03/25/2033 224,235
302,000 DAIMLERCHRYSLER AUTO TRUST SERIES 2004-B CLASS A3 3.18 09/08/2008 301,549
124,000 GSAMP SERIES 2004-AHL CLASS A2B+/- 2.77 08/25/2034 124,172
360,000 MBNA CREDIT CARD MASTER NOTE TRUST SERIES 2001-A1 CLASS A1 5.75 10/15/2008 372,130
224,000 METRIS MASTER TRUST SERIES 2004-2 CLASS A+/- 2.20 10/20/2010 224,079
228,445 RESIDENTIAL ASSET MORTGAGE PRODUCTS INCORPORATED
SERIES 2003-RS3 CLASS AII+/- 2.78 04/25/2033 228,644
229,403 STRUCTURED ASSET INVESTMENT LOAN TRUST SERIES 2004-10
CLASS A8+/- 2.68 11/25/2034 229,376
174,000 USAA AUTO OWNER TRUST SERIES 2004-3 CLASS A3 3.16 02/17/2009 173,264
215,000 WHOLE AUTO LOAN TRUST SERIES 2003-1 CLASS A4 2.58 03/15/2010 212,008
270,000 WHOLE AUTO LOAN TRUST SERIES 2004-1 CLASS A4 3.26 03/15/2011 267,389
TOTAL ASSET-BACKED SECURITIES (COST $6,093,175) 6,051,031
---------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 5.10%
343,000 BANC OF AMERICA COMMERCIAL MORTGAGE INCORPORATED
SERIES 2004-6 CLASS A3 4.51 12/10/2042 342,933
94,000 CITIGROUP COMMERCIAL MORTGAGE TRUST SERIES 2004-C2
CLASS A2 4.10 10/15/2041 93,802
404,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATION
SERIES 2004-LB4A CLASS A2 4.05 10/15/2037 402,219
85,000 CS FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2003-C4 CLASS A2 3.91 08/15/2036 84,844
214,000 CS FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2003-CK2 CLASS A2 3.86 03/15/2036 213,785
214,000 CS FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2004-C5 CLASS A2 4.18 11/15/2037 214,067
281,000 FIRST UNION NATIONAL BANK COMMERCIAL MORTGAGES
SERIES 2000-C2 CLASS A2 7.20 10/15/2032 320,895
68,004 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION
SERIES 2004-C2 CLASS A1 3.11 03/10/2040 66,936
155,000 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION
SERIES 2004-C3 CLASS A3+/- 4.87 07/10/2039 158,217
130,000 GMAC MORTGAGE CORPORATION LOAN TRUST
SERIES 2004-HE5 CLASS A2+/- 3.69 09/25/2034 129,608
74,000 GREENWICH CAPITAL COMMERCIAL FUNDING CORPORATION
SERIES 2004-GG1 CLASS A3 4.34 06/10/2036 74,923
105,000 GREENWICH CAPITAL COMMERCIAL FUNDING CORPORATION
SERIES 2004-GG1 CLASS A7+/- 5.32 06/10/2036 109,115
86,402 GS MORTGAGE SECURITIES CORPORATION II
SERIES 2004-C1 CLASS A1 3.66 10/10/2028 85,409
202,000 LB-UBS COMMERCIAL MORTGAGE TRUST SERIES 2003-C5 CLASS A2 3.48 07/15/2027 198,816
155,000 LB-UBS COMMERCIAL MORTGAGE TRUST SERIES 2004-C6 CLASS A3 4.55 08/15/2029 156,232
216,000 LB-UBS COMMERCIAL MORTGAGE TRUST SERIES 2004-C8 CLASS A2 4.20 12/15/2029 216,508
197,265 MERRILL LYNCH MORTGAGE TRUST SERIES 2004-BPC1 CLASS A1 3.59 10/12/2041 196,190
93,617 SALOMON BROTHERS MORTGAGE SECURITIES VII
SERIES 2002-KEY2 CLASS A1 3.22 03/18/2036 93,189
379,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST
SERIES 2004-C15 CLASS A3 4.50 10/15/2041 376,781
384,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST
SERIES 2004-C15 CLASS A2 4.04 10/15/2041 380,393
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (COST $3,931,666) 3,914,862
---------------
59
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
CORPORATE BONDS & NOTES - 18.36%
APPAREL & ACCESSORY STORES - 0.23%
$ 180,000 LIMITED BRANDS INCORPORATED 5.25% 11/01/2014 $ 178,352
---------------
BUSINESS SERVICES - 0.57%
410,000 HOUSEHOLD FINANCE CORPORATION 5.88 02/01/2009 438,121
---------------
CHEMICALS & ALLIED PRODUCTS - 0.22%
165,000 LUBRIZOL CORPORATION 5.50 10/01/2014 165,972
---------------
COMMUNICATIONS - 3.35%
325,000 COMCAST CABLE COMMUNICATIONS HOLDINGS INCORPORATED 8.38 03/15/2013 400,756
430,000 COX COMMUNICATIONS INCORPORATED++ 4.63 01/15/2010 429,008
175,000 COX COMMUNICATIONS INCORPORATED<< 7.13 10/01/2012 196,151
184,000 DEUTSCHE TELEKOM INTERNATIONAL FINANCE BV 8.75 06/15/2030 242,964
189,000 FRANCE TELECOM 7.95 03/01/2006 198,443
85,000 LIBERTY MEDIA GROUP 8.25 02/01/2030 96,650
200,000 NEXTEL COMMUNICATIONS INCORPORATED 5.95 03/15/2014 207,000
115,000 SPRINT CAPITAL CORPORATION 8.75 03/15/2032 153,216
260,000 TELECOM ITALIA CAPITAL SA 5.25 11/15/2013 262,791
120,000 VERIZON GLOBAL FUNDING CORPORATION 7.25 12/01/2010 137,483
215,000 VERIZON NEW YORK INCORPORATED SERIES A 6.88 04/01/2012 241,333
2,565,795
---------------
DEPOSITORY INSTITUTIONS - 1.93%
75,000 BANK OF AMERICA CORPORATION<< 5.88 02/15/2009 80,517
140,000 BANK OF AMERICA CORPORATION 5.25 12/01/2015 143,017
125,000 CAPITAL ONE BANK 6.50 06/13/2013 136,586
145,000 PNC FUNDING CORPORATION 5.25 11/15/2015 146,907
85,000 RBS CAPITAL TRUST+/- 4.71 12/29/2049 82,807
75,000 ROYAL BANK OF SCOTLAND GROUP 5.00 11/12/2013 76,103
230,000 WACHOVIA BANK NA 4.80 11/01/2014 228,558
50,000 WACHOVIA CORPORATION 3.63 02/17/2009 49,424
105,000 WASHINGTON MUTUAL BANK FA 5.13 01/15/2015 104,287
250,000 WASHINGTON MUTUAL INCORPORATED 4.20 01/15/2010 249,014
170,000 ZIONS BANCORPORATION 6.00 09/15/2015 181,221
1,478,441
---------------
ELECTRIC, GAS & SANITARY SERVICES - 1.67%
80,000 AMERICAN ELECTRIC POWER SERIES C 5.38 03/15/2010 83,714
180,000 DUKE ENERGY CORPORATION 6.25 01/15/2012 196,228
45,000 EMPRESA NACIONAL DE ELECTRICIDAD SA CHILE 8.35 08/01/2013 52,144
136,000 PACIFIC GAS AND ELECTRIC 6.05 03/01/2034 141,252
65,000 PROGRESS ENERGY INCORPORATED 7.75 03/01/2031 78,009
120,000 PUBLIC SERVICE COMPANY OF COLORADO 7.88 10/01/2012 145,360
320,000 SOUTHERN CALIFORNIA EDISON 8.00 02/15/2007 348,474
235,000 TXU CORPORATION++ 5.55 11/15/2014 233,451
1,278,632
---------------
60
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 0.23%
$ 130,000 LOCKHEED MARTIN CORPORATION 8.50% 12/01/2029 $ 177,876
---------------
FINANCIAL SERVICES - 0.24%
165,000 CITIGROUP INCORPORATED 6.50 01/18/2011 184,248
---------------
FOOD & KINDRED PRODUCTS - 0.44%
120,000 GENERAL MILLS INCORPORATED 6.00 02/15/2012 130,216
195,000 KRAFT FOODS INCORPORATED 5.63 11/01/2011 206,494
336,710
---------------
FOOD STORES - 0.17%
110,000 KROGER COMPANY 7.50 04/01/2031 131,488
---------------
FORESTRY - 0.20%
130,000 WEYERHAEUSER COMPANY 7.38 03/15/2032 154,160
---------------
HEALTH SERVICES - 0.28%
135,000 HCA INCORPORATED 6.38 01/15/2015 135,547
80,000 HUMANA INCORPORATED 6.30 08/01/2018 82,052
217,599
---------------
INSURANCE AGENTS, BROKERS & SERVICE - 0.20%
145,000 MARSH & MCLENNAN COMPANIES INCORPORATED 6.25 03/15/2012 151,732
---------------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 0.40%
150,000 GENERAL ELECTRIC COMPANY 5.00 02/01/2013 153,895
135,000 TYCO INTERNATIONAL GROUP SA 6.38 10/15/2011 149,047
302,942
---------------
MOTION PICTURES - 0.20%
120,000 TIME WARNER ENTERTAINMENT COMPANIES LIMITED PARTNERSHIP 8.38 07/15/2033 155,031
---------------
NON-DEPOSITORY CREDIT INSTITUTIONS - 2.82%
100,000 BOEING CAPITAL CORPORATION 6.10 03/01/2011 109,076
45,000 CAPITAL ONE BANK<< 5.13 02/15/2014 45,010
230,000 FORD MOTOR CREDIT COMPANY 5.70 01/15/2010 232,094
170,000 FORD MOTOR CREDIT COMPANY 7.88 06/15/2010 187,299
260,000 FORD MOTOR CREDIT COMPANY<< 7.00 10/01/2013 275,634
495,000 GENERAL ELECTRIC CAPITAL CORPORATION 3.75 12/15/2009 487,153
325,000 GENERAL MOTORS ACCEPTANCE CORPORATION 6.88 09/15/2011 333,058
260,000 GENERAL MOTORS ACCEPTANCE CORPORATION<< 6.75 12/01/2014 260,355
135,000 MBNA AMERICA BANK NA Y SERIES BKNT 4.63 08/03/2009 137,454
97,000 SLM CORPORATION SERIES MTNA 5.00 10/01/2013 98,226
2,165,359
---------------
OIL & GAS EXTRACTION - 1.12%
125,000 CONOCOPHILLIPS 5.90 10/15/2032 130,783
100,000 ENTERPRISE PRODUCTS OPERATIONS++ 5.60 10/15/2014 100,887
170,000 HALLIBURTON COMPANY 5.50 10/15/2010 179,057
120,000 KERR-MCGEE CORPORATION 6.95 07/01/2024 132,700
75,000 KERR-MCGEE CORPORATION 7.88 09/15/2031 91,850
61
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
OIL & GAS EXTRACTION (CONTINUED)
$ 85,000 PEMEX PROJECT FUNDING MASTER TRUST 7.38% 12/15/2014 $ 94,478
130,000 TENGIZCHEVROIL LLP++ 6.12 11/15/2014 130,325
860,080
---------------
PAPER & ALLIED PRODUCTS - 0.21%
105,000 INTERNATIONAL PAPER COMPANY 6.75 09/01/2011 117,719
45,000 INTERNATIONAL PAPER COMPANY 5.50 01/15/2014 46,486
164,205
---------------
PETROLEUM REFINING & RELATED INDUSTRIES - 0.25%
120,000 ALBERTA ENERGY COMPANY LIMITED 7.38 11/01/2031 144,531
40,000 AMERADA HESS CORPORATION 7.30 08/15/2031 44,624
189,155
---------------
PIPELINES, EXCEPT NATURAL GAS - 0.13%
95,000 ENTERPRISE PRODUCTS OPERATIONS SERIES B 6.88 03/01/2033 100,972
---------------
RAILROAD TRANSPORTATION - 0.63%
230,000 CANADIAN NATIONAL RAILWAY COMPANY 7.38 10/15/2031 283,509
170,000 NORFOLK SOUTHERN CORPORATION 7.05 05/01/2037 198,776
482,285
---------------
REAL ESTATE - 0.40%
250,000 HEALTHCARE REALTY TRUST 5.13 04/01/2014 244,277
60,000 ISTAR FINANCIAL INCORPORATED SERIES B 4.88 01/15/2009 60,901
305,178
---------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 1.52%
322,000 JP MORGAN CHASE & COMPANY<< 6.75 02/01/2011 361,737
120,000 JP MORGAN CHASE & COMPANY 5.13 09/15/2014 120,787
130,000 MERRILL LYNCH & COMPANY 5.00 01/15/2015 129,491
225,000 MERRILL LYNCH & COMPANY SERIES MTN 4.13 09/10/2009 224,847
337,000 MORGAN STANLEY<< 4.75 04/01/2014 328,375
1,165,237
---------------
TELECOMMUNICATIONS - 0.32%
235,000 SPRINT CAPITAL CORPORATION<< 6.00 01/15/2007 245,950
---------------
TRANSPORTATION EQUIPMENT - 0.53%
310,000 DAIMLER CHRYSLER NA HOLDING CORPORATION 6.50 11/15/2013 336,231
70,000 GENERAL MOTORS ACCEPTANCE CORPORATION 8.00 11/01/2031 71,952
408,183
---------------
WHOLESALE TRADE-DURABLE GOODS - 0.10%
75,000 HUGHES SUPPLY INCORPORATED++ 5.50 10/15/2014 74,046
---------------
TOTAL CORPORATE BONDS & NOTES (COST $13,933,885) 14,077,749
---------------
62
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
FOREIGN GOVERNMENT BONDS - 0.84%
$ 220,000 MEXICO GOVERNMENT INTERNATIONAL BOND SERIES MTN 6.38% 01/16/2013 $ 234,300
280,000 RUSSIAN FEDERATION++ 5.00 03/31/2030 288,400
125,000 UNITED MEXICAN STATES 6.75 09/27/2034 123,438
TOTAL FOREIGN GOVERNMENT BONDS @ (COST $627,934) 646,138
---------------
US GOVERNMENT AGENCY SECURITIES - 51.43%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 31.98%
2,898,000 FHLMC 6.63 09/15/2009 $ 3,240,952
905,000 FHLMC<< 5.00 07/15/2014 934,804
119,854 FHLMC #15662 5.00 07/01/2019 121,775
115,176 FHLMC #16590 5.00 09/01/2019 117,022
1,988,251 FHLMC #90846 5.50 08/01/2024 2,033,548
70,721 FHLMC #B15604 5.00 07/01/2019 71,855
154,568 FHLMC #B15605 5.00 07/01/2019 157,045
167,312 FHLMC #B15705 5.00 07/01/2019 169,994
89,093 FHLMC #B15706 5.00 07/01/2019 90,522
58,692 FHLMC #B15762 5.00 07/01/2019 59,633
58,294 FHLMC #B16372 5.00 09/01/2019 59,228
61,661 FHLMC #B16397 5.00 09/01/2019 62,649
86,348 FHLMC #B16398 5.00 09/01/2019 87,733
94,044 FHLMC #B16399 5.00 09/01/2019 95,552
57,958 FHLMC #B16425 5.00 09/01/2019 58,887
115,499 FHLMC #B16509 5.00 09/01/2019 117,351
113,695 FHLMC #B16543 5.00 09/01/2019 115,517
28,894 FHLMC #B17291 5.00 11/01/2019 29,357
861,722 FHLMC #C90732 5.50 11/01/2023 881,589
464,156 FHLMC #C90798 5.50 02/01/2024 474,730
1,205,395 FHLMC #C90843 5.50 07/01/2024 1,232,857
1,814,696 FHLMC #C90854 5.50 09/01/2024 1,856,038
557,236 FHLMC #C90859 5.50 10/01/2024 569,931
504,854 FHLMC #G01647 4.00 01/01/2034 470,002
474,209 FHLMC #G11615 5.00 09/01/2019 481,810
303,586 FHLMC #M80925 5.00 06/01/2011 309,142
1,113,473 FHLMC #M80927 5.00 07/01/2011 1,133,850
1,123,754 FHLMC #M80928 5.00 08/01/2011 1,144,320
147,807 FHLMC SERIES 2541 CLASS BM 4.00 09/15/2026 147,951
204,559 FHLMC SERIES 2581 CLASS HV 4.50 02/15/2017 206,031
556,000 FHLMC SERIES 2631 CLASS MT 3.50 01/15/2022 550,897
356,729 FHLMC SERIES 2682 CLASS WK 3.00 01/15/2021 353,453
447,218 FHLMC SERIES 2692 CLASS YB 3.50 05/15/2016 445,386
1,153,568 FHLMC SERIES 2731 CLASS PK 3.50 05/15/2026 1,143,763
754,747 FHLMC SERIES 2736 CLASS DB 3.30 11/15/2026 743,023
129,000 FHLMC SERIES 2791 CLASS VD 5.00 02/15/2021 126,881
153,000 FHLMC SERIES 2791 CLASS VJ 5.00 02/15/2021 150,813
140,000 FHLMC SERIES 2791 CLASS VL 5.00 02/15/2021 138,177
683,047 FHLMC SERIES 2801 CLASS EH 4.50 11/15/2016 688,163
156,000 FHLMC SERIES 2804 CLASS EC 5.50 06/15/2033 158,876
314,000 FHLMC SERIES 2820 CLASS PE 5.50 03/15/2030 321,953
63
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
US GOVERNMENT AGENCY SECURITIES (CONTINUED)
$ 1,339,000 FHLMC SERIES 2825 CLASS PM 5.50% 03/15/2030 $ 1,370,678
274,000 FHLMC SERIES 2832 CLASS PD 5.50 09/15/2029 280,476
98,000 FHLMC SERIES 2833 CLASS JD 5.50 09/15/2029 100,951
141,000 FHLMC SERIES 2835 CLASS NE 5.50 06/15/2029 144,330
173,000 FHLMC SERIES 2849 CLASS PD 5.50 03/15/2030 177,114
96,000 FHLMC SERIES 2849 CLASS VB 5.00 09/15/2025 93,721
221,656 FHLMC SERIES 2860 CLASS CM 4.50 10/15/2017 223,835
195,000 FHLMC SERIES 2876 CLASS PE 5.50 04/15/2030 199,537
136,000 FHLMC SERIES 2878 CLASS QE 5.50 04/15/2030 139,177
427,000 FHLMC TBA%% 5.50 01/01/2024 436,728
24,519,607
---------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 17.56%
1,443,000 FNMA 6.63 10/15/2007 1,563,827
166,779 FNMA #255389 5.00 08/01/2011 169,727
153,302 FNMA #255440 5.00 09/01/2011 156,012
33,482 FNMA #381135 5.86 01/01/2009 35,440
120,644 FNMA #382142 7.10 12/01/2009 134,068
83,609 FNMA #382344 7.41 04/01/2010 94,317
70,641 FNMA #387024 5.05 07/01/2011 72,781
89,796 FNMA #387110 4.88 10/01/2014 91,046
81,971 FNMA #545316 5.64 12/01/2011 87,302
318,624 FNMA #725564 4.53 04/01/2009 325,307
821,711 FNMA #756196 5.50 12/01/2033 834,925
121,000 FNMA #760574 4.32 12/01/2009 121,681
111,195 FNMA #762520 4.00 11/01/2033 102,848
44,949 FNMA #800997 5.50 11/01/2034 45,660
99,000 FNMA #805874 5.50 12/01/2034 100,565
147,000 FNMA #806033 5.50 12/01/2034 149,323
93,000 FNMA #806051 5.50 12/01/2034 94,470
90,000 FNMA #806127 5.50 12/01/2034 91,423
300,168 FNMA SERIES 2002-82 CLASS XJ 4.50 09/25/2012 302,033
446,171 FNMA SERIES 2003-113 CLASS PN 3.50 02/25/2013 444,247
762,171 FNMA SERIES 2003-13 CLASS GA 4.50 06/25/2032 764,402
197,816 FNMA SERIES 2003-24 CLASS PA 4.50 11/25/2009 198,837
411,103 FNMA SERIES 2003-32 CLASS KA 5.00 07/25/2013 415,411
194,033 FNMA SERIES 2003-41 CLASS YN 4.00 05/25/2017 194,447
637,000 FNMA SERIES 2003-46 CLASS PW 4.50 11/25/2027 631,607
346,573 FNMA SERIES 2003-79 CLASS KA 3.75 05/25/2011 347,231
667,000 FNMA SERIES 2003-92 CLASS KQ 3.50 06/25/2023 660,548
123,000 FNMA SERIES 2004-95 CLASS VB 5.00 08/25/2023 119,657
152,000 FNMA SERIES 2004-96 CLASS QB 5.00 02/25/2032 153,541
255,000 FNMA SERIES 2004-96 CLASS QC 5.50 08/25/2034 260,774
1,080,000 FNMA TBA%% 5.50 01/01/2034 1,096,200
2,278,200 FNMA TBA%% 6.00 02/01/2034 2,350,105
1,265,000 FNMA TBA%% 5.00 01/01/2035 1,254,722
13,464,484
---------------
64
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004 WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 1.89%
$ 440,935 GNMA #3545 6.00% 04/20/2034 $ 456,759
576,392 GNMA #3584 6.00 07/20/2034 597,060
112,849 GNMA #3625 6.00 10/20/2034 116,899
271,334 GNMA #574763 6.00 09/15/2034 281,411
1,452,129
---------------
TOTAL US GOVERNMENT AGENCY SECURITIES (COST $39,342,593) 39,436,220
---------------
US TREASURY SECURITIES - 21.07%
US TREASURY BONDS - 6.05%
847,000 US TREASURY BOND<< 7.13 02/15/2023 1,080,819
1,054,000 US TREASURY BOND<< 6.25 08/15/2023 1,233,962
1,742,000 US TREASURY BOND<< 6.13 11/15/2027 2,034,534
264,000 US TREASURY BOND<< 5.38 02/15/2031 285,471
4,634,786
---------------
US TREASURY NOTES - 15.02%
1,297,000 US TREASURY NOTE<< 2.50 05/31/2006 1,289,553
2,416,000 US TREASURY NOTE<< 2.38 08/31/2006 2,391,934
6,208,000 US TREASURY NOTE<< 2.50 09/30/2006 6,154,406
885,000 US TREASURY NOTE 2.50 10/31/2006 876,738
168,000 US TREASURY NOTE<< 3.50 12/15/2009 167,186
639,000 US TREASURY NOTE<< 4.25 11/15/2014 640,672
11,520,489
---------------
TOTAL US TREASURY SECURITIES (COST $16,053,060) 16,155,275
---------------
REPURCHASE AGREEMENTS - 5.04%
3,863,000 COUNTRYWIDE SECURITIES - 102% COLLATERALIZED BY US GOVERNMENT
SECURITIES (MATURITY VALUE $3,863,730) 2.30 01/03/2005 3,863,000
TOTAL REPURCHASE AGREEMENTS (COST $3,863,000) 3,863,000
---------------
SHARES
COLLATERAL FOR SECURITIES LENDING - 23.29%
COLLATERAL INVESTED IN MONEY MARKET FUNDS - 2.42%
182,988 FEDERATED INVESTORS PRIME OBLIGATIONS FUND 182,988
1,673,020 SHORT TERM INVESTMENTS COMPANY LIQUID ASSETS PORTFOLIO 1,673,020
1,856,008
---------------
PRINCIPAL INTEREST RATE MATURITY DATE
COLLATERAL INVESTED IN OTHER SHORT-TERM ASSETS - 20.87%
$ 10,999,989 MORGAN STANLEY AGENCY MORTGAGE REPURCHASE AGREEMENT 2.20% 01/03/2005 10,999,989
4,999,995 BEAR STEARNS INTERNATIONAL ABS REPURCHASE AGREEMENT 2.36 01/03/2005 4,999,995
15,999,984
---------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $17,855,992) 17,855,992
---------------
65
WELLS FARGO VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
VALUE
TOTAL INVESTMENTS IN SECURITIES
(COST $101,701,305)* 133.02% $ 102,000,267
OTHER ASSETS AND LIABILITIES, NET (33.02) (25,317,575)
------ ---------------
TOTAL NET ASSETS 100.00% $ 76,682,692
====== ===============
<< ALL OR A PORTION OF THIS SECURITY IS ON LOAN. (SEE NOTE 2)
^ ZERO COUPON/STEPPED COUPON BOND. INTEREST RATE PRESENTED IS YIELD TO
MATURITY.
++ SECURITIES THAT MAY BE RESOLD TO "QUALIFIED INSTITUTIONAL BUYERS" UNDER
RULE 144A OR SECURITIES OFFERED PURSUANT TO SECTION 4 (2) OF THE
SECURITIES ACT OF 1933, AS AMENDED.
+/- VARIABLE RATE SECURITIES.
%% SECURITIES ISSUED ON A WHEN-ISSUED (TBA) BASIS, TOTAL COST $5,130,889.
(SEE NOTE 2)
@ FOREIGN BOND PRINCIPAL IS DENOMINATED IN US DOLLARS EXCEPT AS INDICATED
PARENTHETICALLY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS $101,974,169 AND NET UNREALIZED
APPRECIATION (DEPRECIATION) CONSISTS OF:
GROSS UNREALIZED APPRECIATION $ 548,496
GROSS UNREALIZED DEPRECIATION (522,398)
---------
NET UNREALIZED APPRECIATION (DEPRECIATION) $ 26,098
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
66
THIS PAGE IS INTENTIONALLY LEFT BLANK --
WELLS FARGO VARIABLE TRUST FUNDS STATEMENT OF ASSETS AND LIABILITIES
-- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST VARIABLE TRUST VARIABLE TRUST
ASSET ALLOCATION EQUITY INCOME EQUITY VALUE
FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
IN SECURITIES, AT MARKET VALUE ...................................... $ 309,275,239 $ 118,712,037 $ 30,228,565
COLLATERAL FOR SECURITIES LOANED (NOTE 2) ........................... 126,615,951 0 0
INVESTMENTS IN AFFILIATES ........................................... 15,982,483 1,244,242 0
REPURCHASE AGREEMENTS ............................................... 0 0 12,000
---------------- ---------------- ----------------
TOTAL INVESTMENT AT MARKET VALUE (SEE COST BELOW) ...................... 451,873,673 119,956,279 30,240,565
---------------- ---------------- ----------------
CASH ................................................................ 50,000 50,000 51,276
RECEIVABLE FOR FUND SHARES ISSUED ................................... 33,503 55,721 8,383
RECEIVABLE FOR INVESTMENTS SOLD ..................................... 0 0 0
RECEIVABLES FOR DIVIDENDS AND INTEREST .............................. 2,095,229 218,585 55,240
PREPAID EXPENSES AND OTHER ASSETS ................................... 19,994 0 0
---------------- ---------------- ----------------
TOTAL ASSETS ........................................................... 454,072,399 120,280,585 30,355,464
---------------- ---------------- ----------------
LIABILITIES
PAYABLE FOR DAILY VARIATION MARGIN ON FUTURES CONTRACTS ............. 563,719 0 0
PAYABLE FOR FUND SHARES REDEEMED .................................... 238,588 24,140 30,029
PAYABLE FOR INVESTMENTS PURCHASED ................................... 0 0 0
DIVIDENDS PAYABLE ................................................... 0 0 0
PAYABLE TO INVESTMENT ADVISOR AND AFFILIATES (NOTE 3) ............... 206,175 75,793 14,140
PAYABLE TO THE TRUSTEES AND DISTRIBUTOR ............................. 74,290 28,296 8,239
PAYABLE FOR SECURITIES LOANED (NOTE 2) .............................. 126,615,951 0 0
ACCRUED EXPENSES AND OTHER LIABILITIES .............................. 0 14,239 16,372
---------------- ---------------- ----------------
TOTAL LIABILITIES ...................................................... 127,698,723 142,468 68,780
---------------- ---------------- ----------------
TOTAL NET ASSETS ....................................................... $ 326,373,676 $ 120,138,117 $ 30,286,684
================ ================ ================
NET ASSETS CONSIST OF:
- -----------------------------------------------------------------------------------------------------------------------------------
PAID-IN CAPITAL ..................................................... $ 323,785,140 $ 107,506,566 $ 34,490,078
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) .......................... 28,873 8,308 0
UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS ............... (2,985,627) (5,643,551) (8,565,693)
NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS, FOREIGN
CURRENCIES AND TRANSLATION OF ASSETS AND LIABILITIES DENOMINATED IN
FOREIGN CURRENCIES ................................................ 4,335,013 18,266,794 4,362,299
NET UNREALIZED APPRECIATION (DEPRECIATION) OF FUTURES ............... 1,210,277 0 0
---------------- ---------------- ----------------
TOTAL NET ASSETS ....................................................... $ 326,373,676 $ 120,138,117 $ 30,286,684
---------------- ---------------- ----------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE(1)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS .......................................................... $ 326,373,676 $ 120,138,117 $ 30,286,684
SHARES OUTSTANDING .................................................. 25,154,215 7,355,110 3,318,513
NET ASSET VALUE AND OFFERING PRICE PER SHARE ........................ $ 12.97 $ 16.33 $ 9.13
---------------- ---------------- ----------------
INVESTMENTS AT COST .................................................... $ 447,538,660 $ 101,689,485 $ 25,878,266
================ ================ ================
SECURITIES ON LOAN, AT MARKET VALUE .................................... $ 130,523,432 $ 0 $ 0
================ ================ ================
(1) EACH FUND HAS AN UNLIMITED NUMBER OF AUTHORIZED SHARES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
68
STATEMENT OF ASSETS AND LIABILITIES WELLS FARGO VARIABLE TRUST FUNDS
- -- DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST VARIABLE TRUST VARIABLE TRUST
GROWTH INTERNATIONAL LARGE COMPANY
FUND EQUITY FUND GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
IN SECURITIES, AT MARKET VALUE ...................................... $ 37,553,682 $ 34,957,804 $ 106,086,143
COLLATERAL FOR SECURITIES LOANED (NOTE 2) ........................... 0 0 0
INVESTMENTS IN AFFILIATES ........................................... 0 56,625 862,454
REPURCHASE AGREEMENTS ............................................... 577,000 0 0
---------------- ---------------- ----------------
TOTAL INVESTMENT AT MARKET VALUE (SEE COST BELOW) ...................... 38,130,682 35,014,429 106,948,597
---------------- ---------------- ----------------
CASH ................................................................ 51,413 50,000 50,000
RECEIVABLE FOR FUND SHARES ISSUED ................................... 720 95,246 100,023
RECEIVABLE FOR INVESTMENTS SOLD ..................................... 0 0 339,224
RECEIVABLES FOR DIVIDENDS AND INTEREST .............................. 18,028 32,289 20,723
PREPAID EXPENSES AND OTHER ASSETS ................................... 0 0 0
---------------- ---------------- ----------------
TOTAL ASSETS ........................................................... 38,200,843 35,191,964 107,458,567
---------------- ---------------- ----------------
LIABILITIES
PAYABLE FOR DAILY VARIATION MARGIN ON FUTURES CONTRACTS ............. 0 0 0
PAYABLE FOR FUND SHARES REDEEMED .................................... 91,035 65,796 125,679
PAYABLE FOR INVESTMENTS PURCHASED ................................... 0 0 0
DIVIDENDS PAYABLE ................................................... 0 0 0
PAYABLE TO INVESTMENT ADVISOR AND AFFILIATES (NOTE 3) ............... 20,517 19,268 63,435
PAYABLE TO THE TRUSTEES AND DISTRIBUTOR ............................. 10,051 9,102 24,838
PAYABLE FOR SECURITIES LOANED (NOTE 2) .............................. 0 0 0
ACCRUED EXPENSES AND OTHER LIABILITIES .............................. 24,680 26,393 15,694
---------------- ---------------- ----------------
TOTAL LIABILITIES ...................................................... 146,283 120,559 229,646
---------------- ---------------- ----------------
TOTAL NET ASSETS ....................................................... $ 38,054,560 $ 35,071,405 $ 107,228,921
================ ================ ================
NET ASSETS CONSIST OF:
- -----------------------------------------------------------------------------------------------------------------------------------
PAID-IN CAPITAL ..................................................... $ 53,574,941 $ 30,084,013 $ 135,878,779
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) .......................... 0 131,647 186,876
UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS ............... (23,250,381) 886,632 (26,887,060)
NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS, FOREIGN
CURRENCIES AND TRANSLATION OF ASSETS AND LIABILITIES DENOMINATED IN
FOREIGN CURRENCIES ................................................ 7,730,000 3,969,113 (1,949,674)
NET UNREALIZED APPRECIATION (DEPRECIATION) OF FUTURES ............... 0 0 0
---------------- ---------------- ----------------
TOTAL NET ASSETS ....................................................... $ 38,054,560 $ 35,071,405 $ 107,228,921
---------------- ---------------- ----------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE(1)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS .......................................................... $ 38,054,560 $ 35,071,405 $ 107,228,921
SHARES OUTSTANDING .................................................. 2,723,088 4,242,160 12,073,922
NET ASSET VALUE AND OFFERING PRICE PER SHARE ........................ $ 13.97 $ 8.27 $ 8.88
---------------- ---------------- ----------------
INVESTMENTS AT COST .................................................... $ 30,400,682 $ 31,046,545 $ 108,898,271
================ ================ ================
SECURITIES ON LOAN, AT MARKET VALUE .................................... $ 0 $ 0 $ 0
================ ================ ================
VARIABLE TRUST VARIABLE TRUST VARIABLE TRUST
MONEY MARKET SMALL CAP TOTAL RETURN
FUND GROWTH FUND BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
IN SECURITIES, AT MARKET VALUE ...................................... $ 45,390,416 $ 175,467,702 $ 80,281,275
COLLATERAL FOR SECURITIES LOANED (NOTE 2) ........................... 0 33,198,568 17,855,992
INVESTMENTS IN AFFILIATES ........................................... 0 4,447,644 0
REPURCHASE AGREEMENTS ............................................... 13,000,000 0 3,863,000
---------------- ---------------- ----------------
TOTAL INVESTMENT AT MARKET VALUE (SEE COST BELOW) ...................... 58,390,416 213,113,914 102,000,267
---------------- ---------------- ----------------
CASH ................................................................ 491,803 50,000 78
RECEIVABLE FOR FUND SHARES ISSUED ................................... 0 23,330 19,865
RECEIVABLE FOR INVESTMENTS SOLD ..................................... 0 2,129,905 5,361,461
RECEIVABLES FOR DIVIDENDS AND INTEREST .............................. 27,261 10,672 618,638
PREPAID EXPENSES AND OTHER ASSETS ................................... 0 0 0
---------------- ---------------- ----------------
TOTAL ASSETS ........................................................... 58,909,480 215,327,821 108,000,309
---------------- ---------------- ----------------
LIABILITIES
PAYABLE FOR DAILY VARIATION MARGIN ON FUTURES CONTRACTS ............. 0 0 0
PAYABLE FOR FUND SHARES REDEEMED .................................... 0 201,776 22,235
PAYABLE FOR INVESTMENTS PURCHASED ................................... 0 1,506,550 13,353,674
DIVIDENDS PAYABLE ................................................... 81,404 0 13,966
PAYABLE TO INVESTMENT ADVISOR AND AFFILIATES (NOTE 3) ............... 22,239 141,036 39,490
PAYABLE TO THE TRUSTEES AND DISTRIBUTOR ............................. 14,887 40,914 18,552
PAYABLE FOR SECURITIES LOANED (NOTE 2) .............................. 0 33,198,568 17,855,992
ACCRUED EXPENSES AND OTHER LIABILITIES .............................. 53,339 9,406 13,708
---------------- ---------------- ----------------
TOTAL LIABILITIES ...................................................... 171,869 35,098,250 31,317,617
---------------- ---------------- ----------------
TOTAL NET ASSETS ....................................................... $ 58,737,611 $ 180,229,571 $ 76,682,692
================ ================ ================
NET ASSETS CONSIST OF:
- -----------------------------------------------------------------------------------------------------------------------------------
PAID-IN CAPITAL ..................................................... $ 58,738,110 $ 172,843,210 $ 76,302,647
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) .......................... 1 0 11,502
UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS ............... (500) (16,901,271) 69,581
NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS, FOREIGN
CURRENCIES AND TRANSLATION OF ASSETS AND LIABILITIES DENOMINATED IN
FOREIGN CURRENCIES ................................................ 0 24,287,632 298,962
NET UNREALIZED APPRECIATION (DEPRECIATION) OF FUTURES ............... 0 0 0
---------------- ---------------- ----------------
TOTAL NET ASSETS ....................................................... $ 58,737,611 $ 180,229,571 $ 76,682,692
---------------- ---------------- ----------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE(1)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS .......................................................... $ 58,737,611 $ 180,229,571 $ 76,682,692
SHARES OUTSTANDING .................................................. 58,740,966 22,968,041 7,607,447
NET ASSET VALUE AND OFFERING PRICE PER SHARE ........................ $ 1.00 $ 7.85 $ 10.08
---------------- ---------------- ----------------
INVESTMENTS AT COST .................................................... $ 58,390,416 $ 188,826,282 $ 101,701,305
================ ================ ================
SECURITIES ON LOAN, AT MARKET VALUE .................................... $ 0 $ 34,588,014 $ 17,571,767
================ ================ ================
69
WELLS FARGO VARIABLE TRUST FUNDS STATEMENT OF OPERATIONS
-- FOR THE YEAR ENDED DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST VARIABLE TRUST VARIABLE TRUST
ASSET ALLOCATION EQUITY INCOME EQUITY VALUE
FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
DIVIDENDS(1) ........................................................ $ 3,442,824 $ 2,873,711 $ 772,945
INTEREST ............................................................ 5,642,228 197 4,175
INCOME ON MORTGAGE DOLLAR ROLLS ..................................... 0 0 0
INCOME FROM AFFILIATED SECURITIES ................................... 326,244 22,536 0
SECURITIES LENDING INCOME ........................................... 79,879 788 205
---------------- ---------------- ----------------
TOTAL INVESTMENT INCOME ................................................ 9,491,175 2,897,232 777,325
---------------- ---------------- ----------------
EXPENSES
ADVISORY FEES ....................................................... 1,697,897 616,060 166,018
ADMINISTRATION FEES ................................................. 493,933 179,217 48,296
CUSTODY FEES ........................................................ 61,742 22,402 6,037
ACCOUNTING FEES ..................................................... 37,704 26,493 21,829
DISTRIBUTION FEES (NOTE 3) .......................................... 771,771 280,027 75,463
AUDIT FEES .......................................................... 18,552 16,445 15,451
LEGAL FEES .......................................................... 2,991 1,334 602
REGISTRATION FEES ................................................... 468 371 371
SHAREHOLDER REPORTS ................................................. 42,778 5,767 15,886
TRUSTEES' FEES ...................................................... 6,386 6,386 6,386
OTHER FEES AND EXPENSES ............................................. 8,211 3,432 2,031
---------------- ---------------- ----------------
TOTAL EXPENSES ......................................................... 3,142,433 1,157,934 358,370
---------------- ---------------- ----------------
LESS:
WAIVED FEES AND REIMBURSED EXPENSES (NOTE 3) ........................ (55,349) (37,664) (56,494)
NET EXPENSES ........................................................ 3,087,084 1,120,270 301,876
---------------- ---------------- ----------------
NET INVESTMENT INCOME (LOSS) ........................................... 6,404,091 1,776,962 475,449
---------------- ---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) FROM:
SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION ..... 1,164,924 (902,225) (216,943)
FUTURES TRANSACTIONS ................................................ 5,306,307 0 0
---------------- ---------------- ----------------
NET REALIZED GAIN (LOSS) FROM INVESTMENTS .............................. 6,471,231 (902,225) (216,943)
---------------- ---------------- ----------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF:
SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION ..... 16,744,647 11,028,303 2,874,230
FUTURES TRANSACTIONS ................................................ (1,811,810) 0 0
---------------- ---------------- ----------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF
INVESTMENTS .......................................................... 14,932,837 11,028,303 2,874,230
================ ================ ================
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ................. 21,404,068 10,126,078 2,657,287
---------------- ---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........ $ 27,808,159 $ 11,903,040 $ 3,132,736
================ ================ ================
(1) NET OF FOREIGN WITHHOLDING TAXES OF ............................. $ 0 $ 17,821 $ 5,051
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
70
STATEMENT OF OPERATIONS WELLS FARGO VARIABLE TRUST FUNDS
- -- FOR THE YEAR ENDED DECEMBER 31, 2004
- --------------------------------------------------------------------------------
VARIABLE TRUST VARIABLE TRUST VARIABLE TRUST
GROWTH INTERNATIONAL LARGE COMPANY
FUND EQUITY FUND GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
DIVIDENDS(1) ........................................................ $ 382,947 $ 511,928 $ 1,186,116
INTEREST ............................................................ 5,164 12 55
INCOME ON MORTGAGE DOLLAR ROLLS ..................................... 0 0 0
INCOME FROM AFFILIATED SECURITIES ................................... 8 13,250 18,541
SECURITIES LENDING INCOME ........................................... 1,248 1,619 240
---------------- ---------------- ----------------
TOTAL INVESTMENT INCOME ................................................ 389,367 526,809 1,204,952
---------------- ---------------- ----------------
EXPENSES
ADVISORY FEES ....................................................... 222,133 212,274 559,942
ADMINISTRATION FEES ................................................. 64,620 45,285 162,892
CUSTODY FEES ........................................................ 8,078 28,303 20,362
ACCOUNTING FEES ..................................................... 22,410 21,721 25,911
DISTRIBUTION FEES (NOTE 3) .......................................... 100,970 70,758 254,519
AUDIT FEES .......................................................... 22,357 10,361 16,694
LEGAL FEES .......................................................... 1,002 202 2,246
REGISTRATION FEES ................................................... 419 471 408
SHAREHOLDER REPORTS ................................................. 4,633 3,135 19,997
TRUSTEES' FEES ...................................................... 6,386 6,386 6,386
OTHER FEES AND EXPENSES ............................................. 2,959 2,141 3,635
---------------- ---------------- ----------------
TOTAL EXPENSES ......................................................... 455,967 401,037 1,072,992
---------------- ---------------- ----------------
LESS:
WAIVED FEES AND REIMBURSED EXPENSES (NOTE 3) ........................ (52,047) (118,006) (54,916)
NET EXPENSES ........................................................ 403,920 283,031 1,018,076
---------------- ---------------- ----------------
NET INVESTMENT INCOME (LOSS) ........................................... (14,553) 243,778 186,876
---------------- ---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) FROM:
SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION ..... 1,475,808 2,578,909 (1,770,467)
FUTURES TRANSACTIONS ................................................ 0 0 0
---------------- ---------------- ----------------
NET REALIZED GAIN (LOSS) FROM INVESTMENTS .............................. 1,475,808 2,578,909 (1,770,467)
---------------- ---------------- ----------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF:
SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION ..... 1,593,757 216,367 5,003,680
FUTURES TRANSACTIONS ................................................ 0 0 0
---------------- ---------------- ----------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF
INVESTMENTS .......................................................... 1,593,757 216,367 5,003,680
================ ================ ================
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ................. 3,069,565 2,795,276 3,233,213
---------------- ---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........ $ 3,055,012 $ 3,039,054 $ 3,420,089
================ ================ ================
(1) NET OF FOREIGN WITHHOLDING TAXES OF ............................. $ 1,101 $ 70,850 $ 9,614
VARIABLE TRUST VARIABLE TRUST VARIABLE TRUST
MONEY MARKET SMALL CAP TOTAL RETURN
FUND GROWTH FUND BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
DIVIDENDS(1) ........................................................ $ 0 $ 374,191 $ 0
INTEREST ............................................................ 945,968 273 3,017,473
INCOME ON MORTGAGE DOLLAR ROLLS ..................................... 0 0 78,404
INCOME FROM AFFILIATED SECURITIES ................................... 0 42,288 0
SECURITIES LENDING INCOME ........................................... 0 41,809 19,183
---------------- ---------------- ----------------
TOTAL INVESTMENT INCOME ................................................ 945,968 458,561 3,115,060
---------------- ---------------- ----------------
EXPENSES
ADVISORY FEES ....................................................... 237,834 1,188,746 331,311
ADMINISTRATION FEES ................................................. 105,633 253,599 117,799
CUSTODY FEES ........................................................ 13,204 31,700 14,725
ACCOUNTING FEES ..................................................... 23,871 29,142 24,305
DISTRIBUTION FEES (NOTE 3) .......................................... 165,051 396,248 184,062
AUDIT FEES .......................................................... 16,418 15,443 15,443
LEGAL FEES .......................................................... 970 1,654 739
REGISTRATION FEES ................................................... 18 371 468
SHAREHOLDER REPORTS ................................................. 102 25,660 7,787
TRUSTEES' FEES ...................................................... 6,386 6,386 6,386
OTHER FEES AND EXPENSES ............................................. 3,849 3,436 3,153
---------------- ---------------- ----------------
TOTAL EXPENSES ......................................................... 573,336 1,952,385 706,178
---------------- ---------------- ----------------
LESS:
WAIVED FEES AND REIMBURSED EXPENSES (NOTE 3) ........................ (77,937) (50,394) (43,289)
NET EXPENSES ........................................................ 495,399 1,901,991 662,889
---------------- ---------------- ----------------
NET INVESTMENT INCOME (LOSS) ........................................... 450,569 (1,443,430) 2,452,171
---------------- ---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) FROM:
SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION ..... (294) 14,439,078 224,000
FUTURES TRANSACTIONS ................................................ 0 0 0
---------------- ---------------- ----------------
NET REALIZED GAIN (LOSS) FROM INVESTMENTS .............................. (294) 14,439,078 224,000
---------------- ---------------- ----------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF:
SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION ..... 0 7,792,215 421,054
FUTURES TRANSACTIONS ................................................ 0 0 0
---------------- ---------------- ----------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF
INVESTMENTS .......................................................... 0 7,792,215 421,054
================ ================ ================
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ................. (294) 22,231,293 645,054
---------------- ---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........ $ 450,275 $ 20,787,863 $ 3,097,225
================ ================ ================
(1) NET OF FOREIGN WITHHOLDING TAXES OF ............................. $ 0 $ 457 $ 0
71
WELLS FARGO VARIABLE TRUST FUNDS STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
VARIABLE TRUST VARIABLE TRUST
ASSET ALLOCATION FUND EQUITY INCOME FUND
-------------------------------------- --------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 2004 DECEMBER 31, 2003 DECEMBER 31, 2004 DECEMBER 31, 2003
- -----------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS ......................... $ 290,722,925 $ 212,573,927 $ 103,157,429 $ 78,400,251
OPERATIONS:
NET INVESTMENT INCOME (LOSS) ................. 6,404,091 3,928,695 1,776,962 1,349,615
NET REALIZED GAIN (LOSS) ON INVESTMENTS ...... 6,471,231 10,716,814 (902,225) (3,780,757)
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS .............. 14,932,837 34,341,596 11,028,303 22,472,304
----------------- ----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS .............................. 27,808,159 48,987,105 11,903,040 20,041,162
----------------- ----------------- ----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME ........................ (6,364,542) (3,913,604) (1,768,654) (1,355,375)
NET REALIZED GAIN ON SALES OF INVESTMENTS .... (9,827,535) (15,130) 0 (2,166,678)
CAPITAL SHARES TRANSACTIONS:
PROCEEDS FROM SHARES SOLD .................... 49,510,435 63,415,699 35,692,523 30,443,643
REINVESTMENT OF DISTRIBUTIONS ................ 16,192,078 3,928,667 1,768,654 3,522,052
COST OF SHARES REDEEMED ...................... (41,667,844) (34,253,739) (30,614,875) (25,727,626)
----------------- ----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS .............. 24,034,669 33,090,627 6,846,302 8,238,069
================= ================= ================= =================
NET INCREASE (DECREASE) IN NET ASSETS ........... 35,650,751 78,148,998 16,980,688 24,757,178
================= ================= ================= =================
ENDING NET ASSETS ............................... $ 326,373,676 $ 290,722,925 $ 120,138,117 $ 103,157,429
----------------- ----------------- ----------------- -----------------
SHARES ISSUED AND REDEEMED:
SHARES SOLD .................................. 3,942,726 5,506,041 2,331,831 2,300,201
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS 1,327,761 342,456 113,755 261,855
SHARES REDEEMED .............................. (3,346,735) (3,031,046) (1,999,068) (2,016,317)
----------------- ----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING
RESULTING FROM CAPITAL SHARE TRANSACTIONS .... 1,923,752 2,817,451 446,518 545,739
================= ================= ================= =================
ENDING BALANCE OF UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) ................. $ 28,873 $ 3,923 $ 8,308 $ 0
================= ================= ================= =================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
72
STATEMENTS OF CHANGES IN NET ASSETS WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST VARIABLE TRUST
EQUITY VALUE FUND GROWTH FUND
-------------------------------------- --------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 2004 DECEMBER 31, 2003 DECEMBER 31, 2004 DECEMBER 31, 2003
- -----------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS ......................... $ 29,481,977 $ 25,124,073 $ 43,383,784 $ 42,644,137
OPERATIONS:
NET INVESTMENT INCOME (LOSS) ................. 475,449 416,143 (14,553) (181,547)
NET REALIZED GAIN (LOSS) ON INVESTMENTS ...... (216,943) (1,737,897) 1,475,808 (1,031,345)
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS .............. 2,874,230 7,314,821 1,593,757 9,941,477
----------------- ----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS .............................. 3,132,736 5,993,067 3,055,012 8,728,585
----------------- ----------------- ----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME ........................ (477,934) (419,582) 0 0
NET REALIZED GAIN ON SALES OF INVESTMENTS .... 0 0 0 0
CAPITAL SHARES TRANSACTIONS:
PROCEEDS FROM SHARES SOLD .................... 5,754,662 6,350,243 1,475,372 1,564,320
REINVESTMENT OF DISTRIBUTIONS ................ 477,935 419,582 0 0
COST OF SHARES REDEEMED ...................... (8,082,692) (7,985,406) (9,859,608) (9,553,258)
----------------- ----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS .............. (1,850,095) (1,215,581) (8,384,236) (7,988,938)
================= ================= ================= =================
NET INCREASE (DECREASE) IN NET ASSETS ........... 804,707 4,357,904 (5,329,224) 739,647
================= ================= ================= =================
ENDING NET ASSETS ............................... $ 30,286,684 $ 29,481,977 $ 38,054,560 $ 43,383,784
----------------- ----------------- ----------------- -----------------
SHARES ISSUED AND REDEEMED:
SHARES SOLD .................................. 670,341 879,669 113,513 135,997
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS 55,042 56,190 0 0
SHARES REDEEMED .............................. (941,885) (1,122,096) (756,914) (856,539)
----------------- ----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING
RESULTING FROM CAPITAL SHARE TRANSACTIONS .... (216,502) (186,237) (643,401) (720,542)
================= ================= ================= =================
ENDING BALANCE OF UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) ................. $ 0 $ 0 $ 0 $ 0
================= ================= ================= =================
VARIABLE TRUST
INTERNATIONAL EQUITY FUND
--------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DECEMBER 31, 2004 DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS ......................... $ 22,033,435 $ 9,315,817
OPERATIONS:
NET INVESTMENT INCOME (LOSS) ................. 243,778 94,592
NET REALIZED GAIN (LOSS) ON INVESTMENTS ...... 2,578,909 (595,589)
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS .............. 216,367 4,897,052
----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS .............................. 3,039,054 4,396,055
----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME ........................ (62,505) (50,877)
NET REALIZED GAIN ON SALES OF INVESTMENTS .... 0 0
CAPITAL SHARES TRANSACTIONS:
PROCEEDS FROM SHARES SOLD .................... 18,660,921 15,425,024
REINVESTMENT OF DISTRIBUTIONS ................ 62,505 50,877
COST OF SHARES REDEEMED ...................... (8,662,005) (7,103,461)
----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS .............. 10,061,421 8,372,440
================= =================
NET INCREASE (DECREASE) IN NET ASSETS ........... 13,037,970 12,717,618
================= =================
ENDING NET ASSETS ............................... $ 35,071,405 $ 22,033,435
----------------- -----------------
SHARES ISSUED AND REDEEMED:
SHARES SOLD .................................. 2,463,069 2,528,699
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS 8,413 8,219
SHARES REDEEMED .............................. (1,142,373) (1,237,145)
----------------- -----------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING
RESULTING FROM CAPITAL SHARE TRANSACTIONS .... 1,329,109 1,299,773
================= =================
ENDING BALANCE OF UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) ................. $ 131,647 $ 39,687
================= =================
73
WELLS FARGO VARIABLE TRUST FUNDS STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
VARIABLE TRUST
LARGE COMPANY GROWTH FUND
--------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DECEMBER 31, 2004 DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS ......................... $ 96,801,871 $ 69,107,567
OPERATIONS:
NET INVESTMENT INCOME (LOSS) ................. 186,876 (365,269)
NET REALIZED GAIN (LOSS) ON INVESTMENTS ...... (1,770,467) (3,342,593)
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS ................ 5,003,680 22,216,838
----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ................................ 3,420,089 18,508,976
----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME ........................ 0 0
NET REALIZED GAIN ON SALES OF INVESTMENTS .... 0 0
CAPITAL SHARES TRANSACTIONS:
PROCEEDS FROM SHARES SOLD .................... 24,127,276 21,803,210
REINVESTMENT OF DISTRIBUTIONS ................ 0 0
COST OF SHARES REDEEMED ...................... (17,120,315) (12,617,882)
----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS ................ 7,006,961 9,185,328
================= =================
NET INCREASE (DECREASE) IN NET ASSETS ........... 10,427,050 27,694,304
================= =================
ENDING NET ASSETS ............................... $ 107,228,921 $ 96,801,871
----------------- -----------------
SHARES ISSUED AND REDEEMED:
SHARES SOLD .................................. 2,851,399 2,852,652
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS 0 0
SHARES REDEEMED .............................. (2,038,011) (1,735,856)
================= =================
NET INCREASE (DECREASE) IN SHARES OUTSTANDING
RESULTING FROM CAPITAL SHARE TRANSACTIONS ...... 813,388 1,116,796
================= =================
ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS) .................................. $ 186,876 $ 0
================= =================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
74
STATEMENTS OF CHANGES IN NET ASSETS WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
VARIABLE TRUST VARIABLE TRUST
MONEY MARKET FUND SMALL CAP GROWTH FUND
-------------------------------------- --------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 2004 DECEMBER 31, 2003 DECEMBER 31, 2004 DECEMBER 31, 2003
- -----------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS ......................... $ 81,583,027 $ 96,274,368 $ 138,151,323 $ 68,349,298
OPERATIONS:
NET INVESTMENT INCOME (LOSS) ................. 450,569 466,690 (1,443,430) (851,703)
NET REALIZED GAIN (LOSS) ON INVESTMENTS ...... (294) 193 14,439,078 16,854,689
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS ................ 0 0 7,792,215 18,010,741
----------------- ----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ................................ 450,275 466,883 20,787,863 34,013,727
----------------- ----------------- ----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME ........................ (450,833) (466,690) 0 0
NET REALIZED GAIN ON SALES OF INVESTMENTS .... 0 0 0 0
CAPITAL SHARES TRANSACTIONS:
PROCEEDS FROM SHARES SOLD .................... 45,544,163 56,934,291 34,146,551 41,065,584
REINVESTMENT OF DISTRIBUTIONS ................ 397,542 440,781 0 0
COST OF SHARES REDEEMED ...................... (68,786,563) (72,066,606) (12,856,166) (5,277,286)
----------------- ----------------- ----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS ................ (22,844,858) (14,691,534) 21,290,385 35,788,298
================= ================= ================= =================
NET INCREASE (DECREASE) IN NET ASSETS ........... (22,845,416) (14,691,341) 42,078,248 69,802,025
================= ================= ================= =================
ENDING NET ASSETS ............................... $ 58,737,611 $ 81,583,027 $ 180,229,571 $ 138,151,323
----------------- ----------------- ----------------- -----------------
SHARES ISSUED AND REDEEMED:
SHARES SOLD .................................. 45,544,163 56,934,290 4,758,243 6,950,431
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS 397,542 440,781 0 0
SHARES REDEEMED .............................. (68,786,563) (72,066,606) (1,824,123) (1,017,021)
================= ================= ================= =================
NET INCREASE (DECREASE) IN SHARES OUTSTANDING
RESULTING FROM CAPITAL SHARE TRANSACTIONS ...... (22,844,858) (14,691,535) 2,934,120 5,933,410
================= ================= ================= =================
ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS) .................................. $ 1 $ 38 $ 0 $ 0
================= ================= ================= =================
VARIABLE TRUST
TOTAL RETURN BOND FUND
--------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DECEMBER 31, 2004 DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS ......................... $ 70,987,859 $ 68,498,801
OPERATIONS:
NET INVESTMENT INCOME (LOSS) ................. 2,452,171 2,919,344
NET REALIZED GAIN (LOSS) ON INVESTMENTS ...... 224,000 4,447,903
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS ................ 421,054 (1,750,446)
----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ................................ 3,097,225 5,616,801
----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME ........................ (2,440,669) (2,926,175)
NET REALIZED GAIN ON SALES OF INVESTMENTS .... (4,614,905) (869,815)
CAPITAL SHARES TRANSACTIONS:
PROCEEDS FROM SHARES SOLD .................... 40,374,910 19,512,548
REINVESTMENT OF DISTRIBUTIONS ................ 7,048,230 3,806,413
COST OF SHARES REDEEMED ...................... (37,769,958) (22,650,714)
----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS ................ 9,653,182 668,247
================= =================
NET INCREASE (DECREASE) IN NET ASSETS ........... 5,694,833 2,489,058
================= =================
ENDING NET ASSETS ............................... $ 76,682,692 $ 70,987,859
----------------- -----------------
SHARES ISSUED AND REDEEMED:
SHARES SOLD .................................. 3,874,408 1,836,777
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS 699,022 358,543
SHARES REDEEMED .............................. (3,625,319) (2,137,437)
================= =================
NET INCREASE (DECREASE) IN SHARES OUTSTANDING
RESULTING FROM CAPITAL SHARE TRANSACTIONS ...... 948,111 57,883
================= =================
ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS) .................................. $ 11,502 $ 0
================= =================
75
WELLS FARGO VARIABLE TRUST FUNDS FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
NET REALIZED
BEGINNING NET AND DIVIDENDS DISTRIBUTION
NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET
VALUE PER INCOME GAIN (LOSS) ON INVESTMENT REALIZED
SHARE (LOSS) INVESTMENTS INCOME GAIN
- -------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- -------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... $ 12.51 0.26 0.86 (0.26) (0.40)
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)
VARIABLE TRUST EQUITY INCOME FUND
- -------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... $ 14.93 0.24 1.40 (0.24) 0.00
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)
VARIABLE TRUST EQUITY VALUE FUND
- -------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... $ 8.34 0.14 0.79 (0.14) 0.00
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
VARIABLE TRUST GROWTH FUND
- -------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... $ 12.89 0.00 1.08 0.00 0.00
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)
VARIABLE TRUST INTERNATIONAL EQUITY FUND
- -------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... $ 7.56 0.06 0.67 (0.02) 0.00
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
VARIABLE TRUST LARGE COMPANY GROWTH FUND
- -------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... $ 8.60 0.02 0.26 0.00 0.00
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
VARIABLE TRUST MONEY MARKET FUND
- -------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... $ 1.00 0.01 0.00 (0.01) 0.00
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
VARIABLE TRUST SMALL CAP GROWTH FUND
- -------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... $ 6.90 (0.06) 1.01 0.00 0.00
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)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
76
FINANCIAL HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
ENDING RATIO TO AVERAGE NET ASSETS (ANNUALIZED)(1)
NET ASSET ----------------------------------------------------
RETURN VALUE PER NET INVESTMENT GROSS EXPENSES NET
OF CAPITAL SHARE INCOME (LOSS) EXPENSES WAIVED EXPENSES
- ----------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- ----------------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 0.00 $ 12.97 2.08% 1.02% (0.02)% 1.00%
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 0.00 $ 12.51 1.64% 1.02% (0.02)% 1.00%
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... 0.00 $ 10.41 1.90% 1.02% (0.02)% 1.00%
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... 0.00 $ 12.32 1.64% 1.04% (0.04)% 1.00%
JANUARY 1, 2000 TO DECEMBER 31, 2000 ... 0.00 $ 13.82 2.19% 1.12% (0.12)% 1.00%
VARIABLE TRUST EQUITY INCOME FUND
- ----------------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 0.00 $ 16.33 1.59% 1.03% (0.03)% 1.00%
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 0.00 $ 14.93 1.59% 1.06% (0.06)% 1.00%
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... 0.00 $ 12.32 1.46% 1.09% (0.09)% 1.00%
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... 0.00 $ 15.52 1.05% 1.23% (0.23)% 1.00%
JANUARY 1, 2000 TO DECEMBER 31, 2000 ... 0.00 $ 17.01 1.02% 1.17% (0.17)% 1.00%
VARIABLE TRUST EQUITY VALUE FUND
- ----------------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 0.00 $ 9.13 1.58% 1.19% (0.19)% 1.00%
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 0.00 $ 8.34 1.62% 1.20% (0.20)% 1.00%
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... 0.00 $ 6.75 1.19% 1.27% (0.27)% 1.00%
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... 0.00 $ 9.02 0.55% 1.16% (0.16)% 1.00%
JANUARY 1, 2000 TO DECEMBER 31, 2000 ... 0.00 $ 9.70 0.78% 1.56% (0.56)% 1.00%
VARIABLE TRUST GROWTH FUND
- ----------------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 0.00 $ 13.97 (0.03)% 1.13% (0.13)% 1.00%
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 0.00 $ 12.89 (0.44)% 1.13% (0.13)% 1.00%
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... 0.00 $ 10.43 (0.14)% 1.14% (0.14)% 1.00%
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... 0.00 $ 14.08 0.08% 1.27% (0.27)% 1.00%
JANUARY 1, 2000 TO DECEMBER 31, 2000 ... 0.00 $ 19.06 0.01% 1.23% (0.23)% 1.00%
VARIABLE TRUST INTERNATIONAL EQUITY FUND
- ----------------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 0.00 $ 8.27 0.87% 1.42% (0.42)% 1.00%
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 0.00 $ 7.56 0.69% 1.59% (0.59)% 1.00%
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... 0.00 $ 5.77 0.71% 3.26% (2.26)% 1.00%
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... 0.00 $ 7.50 0.48% 7.21% (6.21)% 1.00%
JULY 3, 2000(3) TO DECEMBER 31, 2000 ... 0.00 $ 8.94 0.98% 2.40% (1.40)% 1.00%
VARIABLE TRUST LARGE COMPANY GROWTH FUND
- ----------------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 0.00 $ 8.88 0.18% 1.05% (0.05)% 1.00%
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 0.00 $ 8.60 (0.46)% 1.06% (0.06)% 1.00%
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... 0.00 $ 6.81 (0.56)% 1.08% (0.08)% 1.00%
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... 0.00 $ 9.46 (0.47)% 1.01% (0.03)% 0.98%
JANUARY 1, 2000 TO DECEMBER 31, 2000 ... 0.00 $ 11.96 (0.42)% 1.43% (0.43)% 1.00%
VARIABLE TRUST MONEY MARKET FUND
- ----------------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 0.00 $ 1.00 0.68% 0.87% (0.12)% 0.75%
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 0.00 $ 1.00 0.51% 0.89% (0.14)% 0.75%
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... 0.00 $ 1.00 1.24% 0.73% (0.01)% 0.72%
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... 0.00 $ 1.00 3.46% 0.73% (0.00)% 0.73%
JANUARY 1, 2000 TO DECEMBER 31, 2000 ... 0.00 $ 1.00 5.64% 0.90% (0.05)% 0.85%
VARIABLE TRUST SMALL CAP GROWTH FUND
- ----------------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 0.00 $ 7.85 (0.91)% 1.24% (0.04)% 1.20%
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 0.00 $ 6.90 (0.91)% 1.25% (0.05)% 1.20%
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... 0.00 $ 4.85 (0.92)% 1.32% (0.12)% 1.20%
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... 0.00 $ 7.85 (0.85)% 1.32% (0.14)% 1.18%
JANUARY 1, 2000 TO DECEMBER 31, 2000 ... (0.77) $ 10.38 (0.72)% 2.41% (1.21)% 1.20%
PORTFOLIO NET ASSETS AT
TOTAL TURNOVER END OF PERIOD
RETURN(2) RATE (000'S OMITTED)
- --------------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 9.34% 5% $ 326,374
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 22.09% 7% $ 290,723
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... (12.85)% 16% $ 212,574
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... (6.96)% 25% $ 255,938
JANUARY 1, 2000 TO DECEMBER 31, 2000 ... 1.02% 48% $ 270,278
VARIABLE TRUST EQUITY INCOME FUND
- --------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 11.08% 13% $ 120,138
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 26.21% 15% $ 103,157
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... (19.26)% 16% $ 78,400
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... (5.41)% 5% $ 106,199
JANUARY 1, 2000 TO DECEMBER 31, 2000 ... 2.33% 4% $ 113,350
VARIABLE TRUST EQUITY VALUE FUND
- --------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 11.22% 16% $ 30,287
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 25.57% 20% $ 29,482
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... (24.09)% 98% $ 25,124
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... (6.39)% 107% $ 38,721
JANUARY 1, 2000 TO DECEMBER 31, 2000 ... 5.78% 124% $ 47,013
VARIABLE TRUST GROWTH FUND
- --------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 8.38% 45% $ 38,055
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 23.59% 58% $ 43,384
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... (25.84)% 120% $ 42,644
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... (19.21)% 50% $ 73,631
JANUARY 1, 2000 TO DECEMBER 31, 2000 ... (13.60)% 67% $ 105,248
VARIABLE TRUST INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 9.63% 115% $ 35,071
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 31.46% 90% $ 22,033
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... (22.92)% 54% $ 9,316
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... (16.09)% 41% $ 4,946
JULY 3, 2000(3) TO DECEMBER 31, 2000 ... (10.33)% 19% $ 1,620
VARIABLE TRUST LARGE COMPANY GROWTH FUND
- --------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 3.26% 15% $ 107,229
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 26.28% 10% $ 96,802
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... (28.01)% 18% $ 69,108
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... (20.88)% 14% $ 104,888
JANUARY 1, 2000 TO DECEMBER 31, 2000 ... (0.58)% 8% $ 117,885
VARIABLE TRUST MONEY MARKET FUND
- --------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 0.70% N/A $ 58,738
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 0.50% N/A $ 81,583
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... 1.25% N/A $ 96,274
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... 3.73% N/A $ 105,360
JANUARY 1, 2000 TO DECEMBER 31, 2000 ... 5.76% N/A $ 53,095
VARIABLE TRUST SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 ... 13.77% 175% $ 180,230
JANUARY 1, 2003 TO DECEMBER 31, 2003 ... 42.27% 191% $ 138,151
JANUARY 1, 2002 TO DECEMBER 31, 2002 ... (38.22)% 243% $ 68,349
JANUARY 1, 2001 TO DECEMBER 31, 2001 ... (24.37)% 218% $ 57,216
JANUARY 1, 2000 TO DECEMBER 31, 2000 ... (22.58)% 260% $ 33,610
77
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
- -------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND
- -------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004 .... $ 10.66 0.34 0.10 (0.34) (0.68)
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
THE ACCOMPANYING ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
78
FINANCIAL HIGHLIGHTS WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
ENDING RATIO TO AVERAGE NET ASSETS (ANNUALIZED)(1)
NET ASSET ------------------------------------------------------
RETURN VALUE PER NET INVESTMENT GROSS EXPENSES NET
OF CAPITAL SHARE INCOME (LOSS) EXPENSES WAIVED EXPENSE
- -----------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004..... 0.00 $ 10.08 3.34% 0.96% (0.06)% 0.90%
JANUARY 1, 2003 TO DECEMBER 31, 2003..... 0.00 $ 10.66 4.17% 0.97% (0.07)% 0.90%
JANUARY 1, 2002 TO DECEMBER 31, 2002..... 0.00 $ 10.38 5.97% 1.02% (0.12)% 0.90%
JANUARY 1, 2001 TO DECEMBER 31, 2001 .... 0.00 $ 10.24 6.20% 1.14% (0.24)% 0.90%
JANUARY 1, 2000 TO DECEMBER 31, 2000..... 0.00 $ 10.14 6.53% 1.25% (0.35)% 0.90%
PORTFOLIO NET ASSETS AT
TOTAL TURNOVER END OF PERIOD
RETURN(2) RATE (000'S OMITTED)
- -------------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND
- -------------------------------------------------------------------------------------
JANUARY 1, 2004 TO DECEMBER 31, 2004..... 4.39% 773% $ 76,683
JANUARY 1, 2003 TO DECEMBER 31, 2003..... 8.40% 619% $ 70,988
JANUARY 1, 2002 TO DECEMBER 31, 2002..... 7.75% 82% $ 68,499
JANUARY 1, 2001 TO DECEMBER 31, 2001 .... 7.41% 69% $ 72,920
JANUARY 1, 2000 TO DECEMBER 31, 2000..... 10.22% 100% $ 71,957
79
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.
80
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 9 separate funds
(each, a "Fund", collectively, the "Funds"). These financial statements present
the Variable Trust Asset Allocation Fund, Variable Trust Equity Income Fund,
Variable Trust Equity Value Fund, Variable Trust Growth Fund, Variable Trust
International Equity Fund, Variable Trust Large Company Growth Fund, Variable
Trust Money Market Fund, Variable Trust Small Cap Growth Fund, and Variable
Trust 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 in the preparation of the financial statements of the Trust, 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.
In the normal course of business, the Trust may enter into contracts that
provide certain indemnifications. The Trust's maximum exposure under these
arrangements is dependent on future claims that may be made against the Funds
and, therefore, cannot be estimated; however, based on experience, the risk of
loss from such claims is considered remote.
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 using 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.
Many securities markets and exchanges outside the U.S. close prior to the
close of the New York Stock Exchange and therefore may not fully reflect trading
or events that occur after the close of the principal exchange in which the
foreign investments are traded but before the close of the New York Stock
Exchange. If such trading or events are expected to materially affect the value
of the investments, then those investments are fair valued following procedures
approved by the Board of Trustees. These procedures take into account multiple
factors including movements in U.S. securities markets after foreign exchanges
close. Depending on market activity, such fair valuations may be frequent. In
light of the judgment involved in fair value decisions, there can be no
assurance that a fair value assigned to a particular security is accurate. Such
fair value pricing may result in NAVs that are higher or lower than NAVs based
on the closing price or latest quoted bid price.
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 daily.
81
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 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 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, 2004, as a result of permanent book-to-tax differences,
the following reclassification adjustments were made on the Statement of Assets
and Liabilities:
Undistributed Net Undistributed Net
Fund Investment Income Realized Gain/Loss Paid-in Capital
- ----------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND $ (14,599) $ 14,599 $ 0
- ----------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST EQUITY INCOME FUND 0 0 0
- ----------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND 2,485 (1) (2,484)
- ----------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST GROWTH FUND 14,553 0 (14,553)
- ----------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST INTERNATIONAL EQUITY FUND (89,313) 89,313 0
- ----------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST LARGE COMPANY GROWTH Fund 0 0 0
- ----------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST MONEY MARKET FUND 227 (227) 0
- ----------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND 1,443,430 (2) (1,443,428)
- ----------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND 0 0 0
FEDERAL INCOME TAXES
Each Fund 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, 2004.
82
NOTES TO FINANCIAL STATEMENTS WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
At December 31, 2004, estimated net capital loss carryforwards, which are
available to offset future net realized capital gains, were:
Fund Year Expires Capital Loss Carryforwards
- -------------------------------------------------------------------------------------------------------
VARIABLE TRUST EQUITY INCOME FUND 2011 $ 4,638,198
2012 634,830
- -------------------------------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND 2007 464,041
2008 1,488,881
2010 4,345,308
2011 1,929,288
2012 205,837
- -------------------------------------------------------------------------------------------------------
VARIABLE TRUST GROWTH FUND 2009 7,002,795
2010 14,395,487
2011 1,781,980
- -------------------------------------------------------------------------------------------------------
VARIABLE TRUST LARGE COMPANY GROWTH FUND 2009 6,092,101
2010 14,881,364
2011 2,858,910
2012 1,003,450
- -------------------------------------------------------------------------------------------------------
VARIABLE TRUST MONEY MARKET FUND 2012 500
- -------------------------------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND 2010 16,327,035
At December 31, 2004, current year deferred post-October capital losses,
which will be treated as realized for tax purposes on the first day of the
succeeding year, were:
Deferred Post-October
Fund Capital Loss
- --------------------------------------------------------------------------------
VARIABLE TRUST EQUITY INCOME FUND $ 300,907
- --------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND 40,359
- --------------------------------------------------------------------------------
VARIABLE TRUST LARGE COMPANY GROWTH FUND 430,803
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS
The Fund(s) may enter into forward foreign currency 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
83
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, 2004, the following Fund(s)
held futures contracts:
Net Unrealized
Appreciation
Fund Contracts Type Expiration Date Notional Amount (Depreciation)
- ----------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST ASSET
ALLOCATION FUND 13 Long S&P 500 Index March 2005 $ 3,877,900 $ 66,625
- ----------------------------------------------------------------------------------------------------------------------
268 Long S&P 500 Index March 2005 79,944,400 1,373,500
- ----------------------------------------------------------------------------------------------------------------------
1 Long S&P 500 Index March 2005 295,000 8,425
- ----------------------------------------------------------------------------------------------------------------------
53 Long U.S. T-Bonds March 2005 5,811,781 150,719
- ----------------------------------------------------------------------------------------------------------------------
5 Long U.S. T-Bonds March 2005 561,875 625
- ----------------------------------------------------------------------------------------------------------------------
4 Long U.S. T-Bonds March 2005 449,125 875
- ----------------------------------------------------------------------------------------------------------------------
2 Long U.S. T-Bonds March 2005 222,625 2,375
- ----------------------------------------------------------------------------------------------------------------------
4 Long U.S. T-Bonds March 2005 445,625 4,375
- ----------------------------------------------------------------------------------------------------------------------
3 Long U.S. T-Bonds March 2005 333,188 4,313
- ----------------------------------------------------------------------------------------------------------------------
3 Long U.S. T-Bonds March 2005 335,250 2,250
- ----------------------------------------------------------------------------------------------------------------------
703 Short U.S. T-Bonds March 2005 78,708,539 (378,961)
- ----------------------------------------------------------------------------------------------------------------------
15 Short U.S. T-Bonds March 2005 1,678,594 (8,906)
- ----------------------------------------------------------------------------------------------------------------------
15 Short U.S. T-Bonds March 2005 1,671,563 (15,938)
- ----------------------------------------------------------------------------------------------------------------------
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 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 in the form of a fee, which is recorded as
deferred income and amortized to income over the roll period, or alternatively,
by paying 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 the 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 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.
SECURITY LOANS
The Fund(s) may loan securities in return for securities and cash
collateral, which is invested in various short-term fixed income securities. A
Fund may receive compensation for lending securities in the form of fees or by
retaining a portion of interest on the investment securities or cash received as
collateral. A Fund also continues to receive payments in lieu of interest or
dividends on the securities loaned. Security loans are secured at all times by
collateral. The collateral is equal to at least 102% of the market value of the
securities loaned plus accrued interest when the transaction is entered into. If
the collateral falls to 100%, it will be brought back to 102%. Gain or loss in
the market price of the securities loaned that may occur during the term of the
loan are reflected in the value of the Fund. The risks from securities lending
are that the borrower may not provide additional collateral when required or
return the securities when due or when called for by the Fund. Wells Fargo Bank,
84
NOTES TO FINANCIAL STATEMENTS WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
N.A., the Funds' custodian, acts as the securities lending agent for the Funds
and receives for its services 35% of the revenues earned on the securities
lending activities and incurs all expenses. Prior to October 1, 2004, Wells
Fargo Bank, N.A. was entitled to receive 40% of the revenues earned on
securities lending activities. The value of the securities on loan and the value
of the related collateral at December 31, 2004 are shown on the Statement of
Assets and Liabilities.
WHEN-ISSUED TRANSACTIONS
Each Fund may purchase securities on a forward commitment or 'when-issued'
basis. A Fund 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 with Wells Fargo Funds
Management, LLC ("Funds Management"). The adviser is responsible for
implementing investment policies and guidelines and for supervising the
sub-adviser, who is responsible for day-to-day portfolio management.
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. 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
Average Daily (% of Average Average Daily (% of Average
Fund Net Assets Daily Net Assets) Sub-Adviser Net Assets Daily Net Assets)
- ------------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST $0 - $499 million 0.550 Wells $0 - $1 billion 0.15
ASSET ALLOCATION FUND $500 million - $999 million 0.500 Capital > $1 billion 0.10
$1 billion - $2.99 billion 0.450 Management
$3 billion - $4.99 billion 0.425 Incorporated
>$4.99 billion 0.400
- ------------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST $0 - $499 million 0.550 Wells $0 - $200 million 0.25
EQUITY INCOME FUND $500 million - $999 million 0.500 Capital $200 - $400 million 0.20
$1 billion - $2.99 billion 0.450 Management >$400 million 0.15
$3 billion - $4.99 billion 0.425 Incorporated
>$4.99 billion 0.400
- ------------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST $0 - $499 million 0.550 Wells $0 - $200 million 0.25
EQUITY VALUE FUND $500 million - $999 million 0.500 Capital $200 - $400 million 0.20
$1 billion - $2.99 billion 0.450 Management >$400 million 0.15
$3 billion - $4.99 billion 0.425 Incorporated
>$4.99 billion 0.400
- ------------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST $0 - $499 million 0.550 Wells $0 - $200 million 0.25
GROWTH FUND $500 million - $999 million 0.500 Capital $200 - $400 million 0.20
$1 billion - $2.99 billion 0.450 Management >$400 million 0.15
$3 billion - $4.99 billion 0.425 Incorporated
>$4.99 billion 0.400
- ------------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST $0 - $499 million 0.750 New Star $0 - $50 million 0.35
INTERNATIONAL $500 million - $999 million 0.700 Institutional $50 -$550 million 0.29
EQUITY FUND ** $1 billion - $2.99 billion 0.650 Managers >$550 million 0.20
$3 billion - $4.99 billion 0.625 Limited
>$4.99 billion 0.600
- ------------------------------------------------------------------------------------------------------------------------------------
85
WELLS FARGO VARIABLE TRUST FUNDS NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Advisory Fee* Sub-Advisory Fee
Average Daily (% of Average Average Daily (% of Average
Fund Net Assets Daily Net Assets) Sub-Adviser Net Assets Daily Net Assets)
- ------------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST $0 - $499 million 0.550 Peregrine $0 - $25 million 0.75
LARGE COMPANY $500 million - $999 million 0.500 Capital $25 - $50 million 0.60
GROWTH FUND $1 billion - $2.99 billion 0.450 Management $50 - $275 million 0.50
$3 billion - $4.99 billion 0.425 > $275 million 0.30
>$4.99 billion 0.400
- ------------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST $0 - $499 million 0.300 Wells $0 - $1 billion 0.05
MONEY MARKET FUND $500 million - $999 million 0.300 Capital > $1 billion 0.04
$1 billion - $2.99 billion 0.275 Management
$3 billion - $4.99 billion 0.275 Incorporated
>$4.99 billion 0.250
- ------------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST $0 - $499 million 0.750 Wells $0 - $200 million 0.25
SMALL CAP $500 million - $999 million 0.700 Capital > $200 million 0.20
GROWTH FUND $1 billion - $2.99 billion 0.650 Management
$3 billion - $4.99 billion 0.625 Incorporated
>$4.99 billion 0.600
- ------------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST $0 - $499 million 0.450 Wells $0 - $400 million 0.15
TOTAL RETURN $500 million - $999 million 0.400 Capital $400 - $800 million 0.125
BOND FUND $1 billion - $2.99 billion 0.350 Management > $800 million 0.10
$3 billion - $4.99 billion 0.325 Incorporated
>$4.99 billion 0.300
- ------------------------------------------------------------------------------------------------------------------------------------
* Effective August 2, 2004. Prior to August 2, 2004, Funds Management was
entitled to receive a monthly advisory fee at the following rates:
Advisory Fee
(% of Average
Fund Daily Net Assets)
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND 0.55
- --------------------------------------------------------------------------------
VARIABLE TRUST EQUITY INCOME FUND 0.55
- --------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND 0.55
- --------------------------------------------------------------------------------
VARIABLE TRUST GROWTH FUND 0.55
- --------------------------------------------------------------------------------
VARIABLE TRUST INTERNATIONAL EQUITY FUND 0.75
- --------------------------------------------------------------------------------
VARIABLE TRUST LARGE COMPANY GROWTH FUND 0.55
- --------------------------------------------------------------------------------
VARIABLE TRUST MONEY MARKET FUND 0.40
- --------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND 0.75
- --------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND 0.45
- --------------------------------------------------------------------------------
** As of September 15, 2004 New Star Institutional Managers Limited began
providing sub-advisory services to the Variable Trust International Equity Fund.
Prior to September 15, 2004, Wells Capital Management served as the Fund's
sub-advisor and received an annual fee based on the following:
Sub-Advisory Fee
(% of Average
Fund Average Daily Net Assets Daily Net Assets)
- ------------------------------------------------------------------------------------------------------
VARIABLE TRUST INTERNATIONAL EQUITY FUND $0 - $200 million 0.35
> $200 million 0.25
- ------------------------------------------------------------------------------------------------------
86
NOTES TO FINANCIAL STATEMENTS WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
ADMINISTRATION AND TRANSFER AGENT FEES
The Trust has entered into an Administration Agreement with Funds
Management. Under this Agreement, for providing administrative services, which
includes paying fees and expenses for services provided by the transfer agent,
sub-transfer agents, 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
Average Daily Net Assets Daily Net Assets*
- --------------------------------------------------------------------------------
ALL FUNDS $0 - $4.99 billion 0.16
$5 - $9.99 billion 0.15
> $9.99 billion 0.14
- --------------------------------------------------------------------------------
* Effective August 2, 2004. Prior to August 2, 2004 Funds Management was
entitled to receive fund level administration fees at the following annual
rates:
% of Average
Daily Net Assets
- --------------------------------------------------------------------------------
ALL FUNDS 0.16
- --------------------------------------------------------------------------------
The Trust has entered into an agreement with Boston Financial Data
Services ("BFDS") as the transfer agent for the Trust. BFDS is entitled to
receive fees from the administrator for its services as transfer agent.
CUSTODY FEES
The Trust has entered into a contract with Wells Fargo Bank, N.A. ("WFB"),
whereby WFB is responsible for providing custody services. Pursuant to the
contract, WFB is entitled to certain transaction charges plus a monthly fee for
custody services at the following annual rates:
% Of Average
Daily Net Assets
- --------------------------------------------------------------------------------------------
ALL FUNDS (EXCEPT VARIABLE TRUST INTERNATIONAL EQUITY FUND) 0.02
- --------------------------------------------------------------------------------------------
VARIABLE TRUST INTERNATIONAL EQUITY FUND 0.10
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 an annual rate of up to 0.25% of average daily net
assets.
For the year ended December 31, 2004, distribution fees paid are disclosed
on the Statement of Operations.
OTHER FEES PFPC, Inc. ("PFPC") serves as fund accountant for the Trust and
is entitled to receive an annual asset based fee, and an annual fixed fee from
each Fund. PFPC is also entitled to be reimbursed for all out-of-pocket expenses
reasonably incurred in providing these services.
WAIVED FEES AND REIMBURSED EXPENSES
All amounts shown as waived fees or reimbursed expenses on the Statement
of Operations, for the year ended December 31, 2004, were waived by Funds
Management, first from advisory fees, and then any remaining amount
consecutively from administration, custody and shareholder servicing fees
collected, if any. The Fund's Adviser has committed to waive fees and/or
reimburse expenses to the extent necessary to maintain a certain net operating
expense limitation for the Fund(s). Net operating expense limitations during the
period were as follows:
Net Operating
Fund Expenses Limitations
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND 1.00%
- --------------------------------------------------------------------------------
VARIABLE TRUST EQUITY INCOME FUND 1.00%
- --------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND 1.00%
- --------------------------------------------------------------------------------
VARIABLE TRUST GROWTH FUND 1.00%
- --------------------------------------------------------------------------------
VARIABLE TRUST INTERNATIONAL EQUITY FUND 1.00%
- --------------------------------------------------------------------------------
VARIABLE TRUST LARGE COMPANY FUND 1.00%
- --------------------------------------------------------------------------------
VARIABLE TRUST MONEY MARKET FUND 0.75%
- --------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND 1.20%
- --------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND 0.90%
- --------------------------------------------------------------------------------
87
WELLS FARGO VARIABLE TRUST FUNDS NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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 the year
ended December 31, 2004, were as follows:
Fund Purchases at Cost Sales Proceeds
- --------------------------------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND $ 73,369,451 $ 14,902,147
- --------------------------------------------------------------------------------------------------------
VARIABLE TRUST EQUITY INCOME FUND 24,036,207 14,398,144
- --------------------------------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND 4,590,954 5,517,074
- --------------------------------------------------------------------------------------------------------
VARIABLE TRUST GROWTH FUND 18,041,799 26,625,016
- --------------------------------------------------------------------------------------------------------
VARIABLE TRUST INTERNATIONAL EQUITY FUND 41,932,734 31,108,718
- --------------------------------------------------------------------------------------------------------
VARIABLE TRUST LARGE COMPANY FUND 23,254,061 15,118,374
- --------------------------------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND 293,736,772 270,769,233
- --------------------------------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND 567,200,878 554,131,873
The Money Market Fund, not reflected in this schedule, trades exclusively
in short-term securities.
5. BANK BORROWINGS
- --------------------------------------------------------------------------------
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. For the year ended December 31, 2004, there
were no borrowings under the agreement.
6. DISTRIBUTION TO SHAREHOLDERS
- --------------------------------------------------------------------------------
The tax character of distributions paid during the years ended December
31, 2004 and December 31, 2003 was as follows:
Ordinary Income Long-Term Capital Gain Total
Fund 2004 2003 2004 2003 2004 2003
- --------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND $ 6,364,542 $ 3,913,604 $ 9,827,535 $ 15,130 $16,192,077 $ 3,928,734
- --------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST EQUITY INCOME FUND 1,768,654 1,355,375 0 2,166,678 1,768,654 3,522,053
- --------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND 477,934 419,582 0 0 477,934 419,582
- --------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST INTERNATIONAL EQUITY FUND 62,505 50,877 0 0 62,505 50,877
- --------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST MONEY MARKET FUND 450,833 466,690 0 0 450,833 466,690
- --------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND 4,896,328 2,926,175 2,159,246 869,815 7,055,574 3,795,990
As of December 31, 2004, 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 deferred losses on wash sales, straddle
adjustments, and Section 1256 adjustments.
Undistributed Undistributed Unrealized
Ordinary Long-Term Appreciation Capital Loss
Income Gain (Depreciation) Carryforward* Total
- -------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND $ 2,769,818 $ 4,200,907 $ (4,382,189) $ 0 $ 2,588,536
- -------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST EQUITY INCOME FUND 8,308 0 18,197,178 (5,573,935) 12,631,551
- -------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND 0 0 4,270,320 (8,473,714) (4,203,394)
- -------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST GROWTH FUND 0 0 7,659,881 (23,180,262) (15,520,381)
- -------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST INTERNATIONAL EQUITY FUND 459,541 692,728 3,835,123 0 4,987,392
- -------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST LARGE COMPANY GROWTH
FUND 186,876 0 (3,570,106) (25,266,628) (28,649,858)
- -------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST MONEY MARKET FUND 1 0 0 (500) (499)
- -------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND 0 0 23,713,396 (16,327,035) 7,386,361
- -------------------------------------------------------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND 279,227 88,686 26,098 0 394,011
- -------------------------------------------------------------------------------------------------------------------------------
* This amount includes the post-October loss, which will reverse on the
first day of the following fiscal year.
88
NOTES TO FINANCIAL STATEMENTS WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
7. SUBSEQUENT EVENTS
- --------------------------------------------------------------------------------
REORGANIZATION AND MEETING OF SHAREHOLDERS
On May 25, 2004, Wells Fargo & Company and Strong Financial Corporation
reached an agreement that provided for Wells Fargo to acquire certain assets
under management from Strong. Included among those assets under management were
the Strong Funds family of mutual funds. This acquisition was consummated on
December 31, 2004.
In September 2004, the Strong Funds' Board of Directors and the WELLS
FARGO FUNDS Board of Trustees unanimously approved the reorganization of the
Strong Funds into WELLS FARGO FUNDS. In December 2004, the Strong Funds'
shareholders approved the reorganization. The reorganization is expected to be
consummated during the second quarter of 2005.
The WELLS FARGO FUNDS Board of Trustees also has approved, and recommended
that WELLS FARGO FUNDS shareholders approve, the merger of certain WELLS FARGO
FUNDS into other WELLS FARGO FUNDS. In January 2005, shareholders of the
affected WELLS FARGO FUNDS approved these mergers. The mergers are planned to
take place during the second quarter of 2005 concurrently with the
reorganization of the Strong Funds into the WELLS FARGO FUNDS.
SUB-ADVISER CHANGE
As of February 1, 2005, Matrix Asset Advisors will begin providing
sub-advisory services to the Wells Fargo Variable Trust Growth Fund, and Cooke &
Bieler L.P. will begin providing sub-advisory services to the Wells Fargo
Variable Trust Equity Value Fund. Wells Capital Management Incorporated
currently serves as the sub-adviser to both funds.
89
WELLS FARGO VARIABLE TRUST FUNDS INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF WELLS FARGO VARIABLE TRUST
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, 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, (the nine Funds constituting the Wells Fargo Variable Trust),
collectively "the Funds," as of December 31, 2004, and the related statements of
operations for the year then ended, and the statements of changes in net assets
and the financial highlights for the periods presented. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits 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 included
confirmation of securities owned as of December 31, 2004, by correspondence with
the custodian and brokers. As to securities purchased or sold but not yet
received or delivered, 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 financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the aforementioned funds of the Wells Fargo Variable Trust as of
December 31, 2004, the results of their operations for the year then ended, and
the changes in its net assets and its financial highlights for the periods
presented, in conformity with U.S. generally accepted accounting principles.
/s/ KPMG LLP
Philadelphia, Pennsylvania
February 15, 2005
90
TAX INFORMATION (UNAUDITED) WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
The following fund has elected to pass through to its shareholders the
foreign taxes paid during the tax year ended December 31, 2004. The foreign
income and taxes paid were as follows:
Foreign Foreign
Fund Income Taxes
- --------------------------------------------------------------------------------
VARIABLE TRUST INTERNATIONAL EQUITY FUND $573,728 $60,545
- --------------------------------------------------------------------------------
The country-by-country breakout is as follows:
Country Gross Income % Foreign Tax Paid %
- --------------------------------------------------------------------------------
AUSTRALIA 3.01% 1.15%
- --------------------------------------------------------------------------------
AUSTRIA 0.15% 0.23%
- --------------------------------------------------------------------------------
BRAZIL 1.04% 1.48%
- --------------------------------------------------------------------------------
CANADA 0.92% 1.30%
- --------------------------------------------------------------------------------
DENMARK 0.14% 0.03%
- --------------------------------------------------------------------------------
FINLAND 3.85% 5.47%
- --------------------------------------------------------------------------------
FRANCE 17.39% 19.85%
- --------------------------------------------------------------------------------
GERMANY 3.85% 4.28%
- --------------------------------------------------------------------------------
GREECE 0.77% 0.00%
- --------------------------------------------------------------------------------
HONG KONG 1.31% 0.00%
- --------------------------------------------------------------------------------
IRELAND 0.89% 0.99%
- --------------------------------------------------------------------------------
ISRAEL 0.07% 0.12%
- --------------------------------------------------------------------------------
ITALY 6.42% 13.60%
- --------------------------------------------------------------------------------
JAPAN 10.34% 6.83%
- --------------------------------------------------------------------------------
MEXICO 0.89% 0.00%
- --------------------------------------------------------------------------------
NETHERLANDS 6.19% 8.63%
- --------------------------------------------------------------------------------
PORTUGAL 0.68% 0.36%
- --------------------------------------------------------------------------------
SINGAPORE 2.56% 4.85%
- --------------------------------------------------------------------------------
SOUTH KOREA 2.02% 1.12%
- --------------------------------------------------------------------------------
SPAIN 2.26% 3.22%
- --------------------------------------------------------------------------------
SWEDEN 2.30% 3.27%
- --------------------------------------------------------------------------------
SWITZERLAND 6.71% 3.03%
- --------------------------------------------------------------------------------
TAIWAN 0.18% 0.00%
- --------------------------------------------------------------------------------
UNITED KINGDOM 26.06% 20.18%
- --------------------------------------------------------------------------------
SUBTOTAL 100.00% 100.00%
- --------------------------------------------------------------------------------
UNITED STATES 0.00% 0.00%
- --------------------------------------------------------------------------------
TOTAL 100.00% 100.00%
- --------------------------------------------------------------------------------
Pursuant to Section 854(b)(2) of the Internal Revenue Code, the Variable
Trust Equity Income Fund, the Variable Trust Equity Value Fund and Variable
Trust Asset Allocation Fund designate 100.00%, 100.00% and 37.72%, respectively,
of the ordinary income dividends distributed during the year as qualifying for
the corporate dividend-received deduction.
Pursuant to Section 852(b)(3) of the Internal Revenue Code, the following
funds designate capital gain dividends as follows:
Capital Gain
Fund Dividends
- --------------------------------------------------------------------------------
VARIABLE TRUST TOTAL RETURN BOND FUND $2,159,246
- --------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND 9,827,535
91
WELLS FARGO VARIABLE TRUST FUNDS OTHER INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------
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 and information
regarding the results of such voting is available without charge, upon request,
by calling 1-800-222-8222, visiting our website at www.wellsfargofunds.com or
visiting the SEC website at www.sec.gov.
PORTFOLIO HOLDINGS INFORMATION
The Fund(s) files its complete schedule of portfolio holdings with SEC for
the first and third quarters of each fiscal year on Form N-Q, which is available
without charge, by visiting the SEC website at www.sec.gov. In addition, the
Fund's Form N-Q may be reviewed and copied at the SEC's Public Reference Room in
Washington, DC, and information on the Public Reference Room may be obtained by
calling 1-800-SEC-0330.
BOARD OF TRUSTEES
The following table provides basic information about the Board of Trustees
("Trustees") of the Wells Fargo Variable Trust (the "Trust"). This table
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 102 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. None
73 since 1992
- ------------------------------------------------------------------------------------------------------------------------------
J. Tucker Morse Trustee Private Investor/Real Estate None
60 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
62 since 1987 Calloway School of Business
and Accountancy, Associate
Professor of Finance.
- ------------------------------------------------------------------------------------------------------------------------------
Peter G. Gordon Trustee Chairman, CEO, and Co- None
62 since 1998 Founder of Crystal Geyser
(Lead Trustee since Water Company and President
2001) of Crystal Geyser Roxane Water
Company.
- ------------------------------------------------------------------------------------------------------------------------------
Richard M. Leach Trustee Retired. Prior thereto, President
71 since 1987 of Richard M. Leach Associates None
(a financial consulting firm).
- ------------------------------------------------------------------------------------------------------------------------------
Timothy J. Penny Trustee Senior Counselor to the public None
53 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
64 since 1996 Willeke & Daniels.
92
OTHER INFORMATION (UNAUDITED) WELLS FARGO VARIABLE TRUST FUNDS
- --------------------------------------------------------------------------------
OFFICERS
- ------------------------------------------------------------------------------------------------------------------------------
POSITION HELD AND PRINCIPAL OCCUPATIONS DURING
NAME AND AGE LENGTH OF SERVICE *** PAST FIVE YEARS OTHER DIRECTORSHIPS
- ------------------------------------------------------------------------------------------------------------------------------
Karla M. Rabusch President, since Executive Vice President of None
45 2003 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 2001 to 2003. Vice
President of Wells Fargo Bank,
N.A. from 1997 to 2000.
- ------------------------------------------------------------------------------------------------------------------------------
Stacie D. DeAngelo Treasurer, since 2003 Senior Vice President of Wells None
36 Fargo Bank, N.A. Senior Vice
President of Operations for
Wells Fargo Funds Management,
LLC. Prior there-to,
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 Managing None
44 Senior Counsel of Wells Fargo
Bank, N.A. Senior Vice
President and Secretary of
Wells Fargo Funds Management,
LLC. Vice President and Senior
Counsel of Wells Fargo Bank,
N.A. from 1996 to 2003.
- ------------------------------------------------------------------------------------------------------------------------------
* 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.
93
WELLS FARGO VARIABLE TRUST FUNDS LIST OF ABBREVIATIONS
- --------------------------------------------------------------------------------
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
94
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MORE INFORMATION ABOUT WELLS FARGO THIS REPORT AND THE FINANCIAL STATEMENTS
FUNDS(R) IS AVAILABLE FREE UPON CONTAINED HEREIN ARE SUBMITTED FOR THE
REQUEST. TO OBTAIN LITERATURE, PLEASE GENERAL INFORMATION OF THE SHAREHOLDERS
WRITE OR CALL: OF THE WELLS FARGO FUNDS. IF THIS REPORT
IS USED FOR PROMOTIONAL PURPOSES,
WELLS FARGO FUNDS DISTRIBUTION OF THE REPORT MUST BE
PO BOX 8266 ACCOMPANIED OR PRECEDED BY A CURRENT
BOSTON, MA 02266-8266 PROSPECTUS. FOR A PROSPECTUS CONTAINING
MORE COMPLETE INFORMATION, INCLUDING
WELLS FARGO FUNDS INVESTOR SERVICES: CHARGES AND EXPENSES, CALL
1-800-222-8222 OR VISIT OUR WEB SITE 1-800-222-8222. PLEASE CONSIDER THE
AT WWW.WELLSFARGOFUNDS.COM. 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 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 INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
-----------------------------------------------------
(c)2005 Wells Fargo Funds Management, LLC. All rights reserved.
AR 016 (02/05)
ITEM 2. CODE OF ETHICS
As of the end of the period, December 31, 2004, 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, 2003 and December 31, 2004 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, 2003 and December 31, 2004, the
Audit Fees were $111,092 and $129,805, respectively.
(b)
Audit-Related Fees - There were no audit-related fees incurred for the
fiscal years ended December 31, 2003 and December 31, 2004 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, 2003 and December 31, 2004 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, 2003 and December 31, 2004, the
Tax Fees were $73,000 and $76,500, respectively. The incurred Tax Fees are
comprised of excise tax review services.
For the fiscal years ended December 31, 2003 and December 31, 2004, the
Tax Fees were $12,118 and $13,500, respectively. The incurred Tax Fees are
comprised of tax preparation and consulting services.
(d)
All Other Fees - There were no other fees incurred for the fiscal years
ended December 31, 2003 and December 31, 2004.
(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, 2003 and December 31, 2004 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, 2003 and December 31, 2004, 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, N.A., the Funds' custodian.
For the fiscal years ended December 31, 2003 and December 31, 2004, the
Registrant's investment adviser incurred non-audit fees in the amount of
$57,120 and $96,000 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
Date: February 15, 2005
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/Stacie D. DeAngelo
Stacie D. DeAngelo
Treasurer
Date: February 15, 2005