UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-09253
Wells Fargo Funds 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: June 30, 2005
Date of reporting period: December 31, 2004
ITEM 1. REPORT TO SHAREHOLDERS
[LOGO]
WELLS
FARGO
FUNDS
Wells Fargo TAX-FREE FUNDS
SEMI-ANNUAL REPORT
WELLS FARGO CALIFORNIA LIMITED TERM TAX-FREE FUND
WELLS FARGO CALIFORNIA TAX-FREE FUND
WELLS FARGO COLORADO TAX-FREE FUND
WELLS FARGO MINNESOTA TAX-FREE FUND
WELLS FARGO NATIONAL LIMITED TERM TAX-FREE FUND
WELLS FARGO NATIONAL TAX-FREE FUND
WELLS FARGO NEBRASKA TAX-FREE FUND
DECEMBER 31, 2004
WELLS FARGO TAX-FREE FUNDS
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TABLE OF CONTENTS
Letter to Shareholders .................................................... 1
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Performance Highlights
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California Limited Term Tax-Free Fund .................................. 2
California Tax-Free Fund ............................................... 4
Colorado Tax-Free Fund ................................................. 6
Minnesota Tax-Free Fund ................................................ 8
National Limited Term Tax-Free Fund .................................... 10
National Tax-Free Fund ................................................. 12
Nebraska Tax-Free Fund ................................................. 14
Fund Expenses ............................................................. 16
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Portfolio of Investments
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California Limited Term Tax-Free Fund .................................. 19
California Tax-Free Fund ............................................... 23
Colorado Tax-Free Fund ................................................. 32
Minnesota Tax-Free Fund ................................................ 36
National Limited Term Tax-Free Fund .................................... 41
National Tax-Free Fund ................................................. 48
Nebraska Tax-Free Fund ................................................. 57
Financial Statements
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Statement of Assets and Liabilities .................................... 60
Statement of Operations ................................................ 62
Statements of Changes in Net Assets .................................... 64
Financial Highlights ................................................... 68
Notes to Financial Highlights ............................................. 74
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Notes to Financial Statements ............................................. 75
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Other Information ......................................................... 81
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List of Abbreviations ..................................................... 83
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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 SHAREHOLDERS WELLS FARGO TAX-FREE FUNDS
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DEAR VALUED SHAREHOLDER,
We are pleased to provide you with this Wells Fargo Tax-Free Funds
semi-annual report for the six-month period ending 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.
THE ECONOMY REGAINS ITS MOMENTUM
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The economy regained momentum in the third quarter of 2004 that led to the
market rallies in the fourth quarter of 2004. By the end of the period, the
uncertainties of the year subsided as the U.S. presidential election was over,
interest rates rose gradually and without market incident and the terrorist
event that was feared never materialized. Consumer spending was on the increase
during the reporting period, supported by solid gains in household wealth, an
improving job market and a boost in purchasing power when fuel costs declined in
the fourth quarter. In addition, rising home values and continued mortgage
refinance activity, triggered by declining mortgage rates, helped consumer
spending. Economic growth during the period averaged around 4%, up from the 3%
growth average during the first two quarters of 2004.
INTEREST RATES RISE AT A MEASURED PACE
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Investors and analysts closely followed the actions by the Federal Reserve
Board (the Fed) on interest rates. The Fed pushed short-term rates higher by
raising its Fed funds target rate a quarter point at each of its two policy
meetings during the third quarter, to 1.75% as of September 21, 2004. Two
additional quarter-point interest-rate hikes in mid-November and mid-December
2004 followed. This pushed intermediate yields (in the one- to five-year
maturity range) higher, however, long-term rates were largely unchanged during
the period and for the year as a whole. This narrowed the gap between short- and
long-term rates (a "flattening" of the U.S. Treasury "yield curve," or the path
traced by interest rates at various maturities). 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.
BONDS CONTINUE TO OUTPERFORM
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In the third quarter of 2004, bonds posted their best quarter return in
two years with a solid 3.2% gain, leaving the benchmark Lehman Aggregate Bond
Index (the Index) of investment-grade, taxable bonds with a year-end return of
4.3%. Throughout the period, the Fed continued to raise short-term interest
rates, which in turn, led to rising short-term bond yields in the one- to
three-year maturity range. Overall, bonds with longer durations benefited the
most from stable long-term rates. Corporate and mortgage-backed securities led
the way in performance 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. We will
continue to monitor how various domestic and international influences may impact
our Funds and strive to anticipate opportunities as well as risks.
Thank you for choosing the Wells Fargo Tax-Free 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 TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
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WELLS FARGO CALIFORNIA LIMITED TERM TAX-FREE FUND
INVESTMENT OBJECTIVE
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The Wells Fargo California Limited Term Tax-Free Fund (the Fund) seeks a
high level of current income exempt from federal income tax and California
individual income tax, while preserving capital.
ADVISER SUB-ADVISER
Wells Fargo Funds Management, LLC Wells Capital Management Incorporated
FUND MANAGER INCEPTION DATE
Stephen Galiani 11/18/92
HOW DID THE FUND PERFORM OVER THE SIX-MONTH REPORTING PERIOD?
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The Fund's Class A shares returned 3.08%(1) for the six-month period ended
December 31, 2004, excluding sales charges, outperforming its benchmark, the
Lehman Brothers 3-Year Municipal Bond Index(2), which returned 2.10% for the
same period. The Fund's Class A shares distributed $0.14 per share in dividend
income and $0.02 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. PERFORMANCE
WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT
MONTH-END PERFORMANCE IS AVAILABLE AT THE FUNDS' WEB SITE -
WWW.WELLSFARGOFUNDS.COM.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 3.00%. FOR CLASS
C SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 1.00%. PERFORMANCE
INCLUDING SALES CHARGE ASSUMES THE MAXIMUM SALES CHARGE FOR THE PERIOD SHOWN.
INSTITUTIONAL CLASS SHARES ARE SOLD WITHOUT SALES CHARGES.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
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During the six-month reporting period, short-term interest rates rose and
intermediate rates fell. The Fund benefited from holdings of bonds with
durations longer than that of its benchmark, with more than 60% of its positions
having maturities beyond five years, where performance was strongest.
At the beginning of the period, over 25% of the portfolio was represented
by lower investment-grade paper (bonds rated "A" or "BBB"), which benefited from
the spread tightening between higher-quality and lower-quality bonds that took
place during the period. Halfway through the period, approximately 15% of the
Fund's portfolio was moved into ultra short-maturity floating-rate paper, which
provided somewhat sub-par returns. This portion of the portfolio underperformed
and, therefore, was a drag on the overall performance of the Fund.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
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Generally, we remained fully invested during the first half of the
six-month period. Early in the period, we extended the Fund's duration by adding
a number of positions with maturities of seven-years to ten-years. Then, during
the last week of September 2004, we began reducing the Fund's long-term exposure
and increasing liquidity positions in anticipation of rising short-term rates.
We also eliminated a number of positions with lower yields and focused on new
purchases in the seven-year to nine-year maturity range.
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
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We anticipate that the Federal Reserve Board may continue to raise
short-term interest rates for at least the first half of 2005, while we believe
the intermediate portion of the maturity spectrum is likely to remain within its
recent trading range, with possibly a slight uptick. In this environment, we are
emphasizing short-term floating rate securities that can take advantage of
rising interest rates and also positions in four-year to seven-year maturities,
while reducing positions in the ten-year range. We are also reducing exposure to
lower investment-grade credits in favor of higher-quality positions.
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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 California Limited Term Tax-Free Fund.
A portion of the Fund's income may be subject to federal,state and/or
local income taxes or the alternative minimum tax (AMT).Any capital gains
distributions may be taxable.
(1) The Fund's Adviser has committed through October 31,2005,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 Class A and Institutional Class shares of the Wells
Fargo California Limited Term Tax-Free Fund for periods prior to November
8,1999,reflects performance of the Class A and Institutional Class shares of the
Stagecoach California Tax-Free Income Fund, its predecessor fund. Performance
shown for the Class C shares of the Wells Fargo California Limited Term Tax-Free
Fund for the periods shown prior to August 30, 2002, reflects the performance of
the Class A shares of the Wells Fargo California Limited Term Tax-Free
Fund,adjusted to reflect the Class C sales charges and expenses.Effective at the
close of business November 5,1999, the Stagecoach and Norwest Advantage Funds
were reorganized into the WELLS FARGO FUNDS.
(2) The Lehman Brothers 3-Year Municipal Bond Index is an unmanaged index
composed of municipal bonds with an approximate maturity of three years.The
total return of the Index does not include the effect of sales charges,and you
cannot invest directly in an index.Had the Index incurred operating expenses,its
performance would have been lower.
2
PERFORMANCE HIGHLIGHTS WELLS FARGO TAX-FREE FUNDS
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AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF DECEMBER 31, 2004)
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Including Sales Charge Excluding Sales Charge
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6-Month* 1-Year 5-Year 10-Year 6-Month* 1-Year 5-Year 10-Year
Wells Fargo California Limited Term Tax-Free Fund - 0.02 (0.57) 3.74 4.21 3.08 2.51 4.37 4.53
Class A
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Wells Fargo California Limited Term Tax-Free Fund - 1.60 0.75 3.49 3.65 2.60 1.75 3.49 3.65
Class C
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Wells Fargo California Limited Term Tax-Free Fund -
Institutional Class 3.27 2.82 4.59 4.66
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Benchmark
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Lehman Brothers 3-Year Municipal Bond Index(2) 2.10 1.78 4.78 4.97
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*RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS(3) (AS OF DECEMBER 31, 2004)
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Average Credit Quality(4) AA+
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Weighted Average Coupon 4.49%
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Weighted Average Maturity 4.7 years
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Estimated Average Duration 3.6 years
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Portfolio Turnover 50%
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Net Asset Value (NAV) (Class A, C, I) $10.62, $10.61, $10.45
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30-Day SEC Yield(5) (Class A, C, I) 2.15%, 1.47%, 2.47%
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Distribution Rate(6) (Class A, C, I) 2.43%, 1.77%, 2.82%
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30-Day Taxable Equivalent Yield(7) (Class A, C, I) 3.65%, 2.49%, 4.19%
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Alternative Minimum Tax (AMT)(8) 11.51%
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GROWTH OF $10,000 INVESTMENT(9)
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[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Wells Fargo California Lehman Brothers Wells Fargo California
Limited Term Tax-Free 3-Year Municipal Limited Term Tax-Free-
Fund - Class A Bond Index Institutional Class
Dec-94 9,700 $10,000 10,000
Jan-95 9,814 $10,083 10,113
Feb-95 9,951 $10,189 10,254
Mar-95 10,035 $10,280 10,341
Apr-95 10,054 $10,315 10,360
May-95 10,196 $10,473 10,507
Jun-95 10,199 $10,498 10,510
Jul-95 10,288 $10,609 10,602
Aug-95 10,361 $10,692 10,676
Sep-95 10,403 $10,722 10,720
Oct-95 10,464 $10,774 10,783
Nov-95 10,537 $10,843 10,859
Dec-95 10,591 $10,887 10,914
Jan-96 10,676 $10,972 11,002
Feb-96 10,667 $10,975 10,992
Mar-96 10,598 $10,948 10,921
Apr-96 10,601 $10,961 10,924
May-96 10,598 $10,971 10,921
Jun-96 10,650 $11,036 10,975
Jul-96 10,726 $11,098 11,053
Aug-96 10,734 $11,114 11,061
Sep-96 10,804 $11,182 11,134
Oct-96 10,888 $11,260 11,211
Nov-96 11,007 $11,365 11,347
Dec-96 10,998 $11,370 11,338
Jan-97 11,047 $11,420 11,378
Feb-97 11,101 $11,475 11,434
Mar-97 11,017 $11,416 11,357
Apr-97 11,063 $11,465 11,394
May-97 11,164 $11,559 11,511
Jun-97 11,230 $11,627 11,580
Jul-97 11,385 $11,765 11,731
Aug-97 11,358 $11,742 11,702
Sep-97 11,425 $11,826 11,773
Oct-97 11,464 $11,878 11,814
Nov-97 11,487 $11,912 11,837
Dec-97 11,562 $11,993 11,916
Jan-98 11,667 $12,073 12,026
Feb-98 11,678 $12,098 12,037
Mar-98 11,669 $12,117 12,028
Apr-98 11,638 $12,101 11,996
May-98 11,742 $12,213 12,104
Jun-98 11,777 $12,254 12,142
Jul-98 11,828 $12,298 12,194
Aug-98 11,987 $12,417 12,361
Sep-98 12,126 $12,496 12,494
Oct-98 12,142 $12,557 12,523
Nov-98 12,178 $12,587 12,561
Dec-98 12,193 $12,618 12,574
Jan-99 12,313 $12,732 12,700
Feb-99 12,278 $12,746 12,663
Mar-99 12,305 $12,757 12,703
Apr-99 12,310 $12,797 12,696
May-99 12,263 $12,778 12,647
Jun-99 12,111 $12,702 12,500
Jul-99 12,186 $12,765 12,566
Aug-99 12,164 $12,780 12,543
Sep-99 12,213 $12,828 12,607
Oct-99 12,180 $12,830 12,573
Nov-99 12,242 $12,886 12,627
Dec-99 12,197 $12,866 12,592
Jan-00 12,236 $12,889 12,634
Feb-00 12,288 $12,929 12,689
Mar-00 12,381 $12,996 12,788
Apr-00 12,352 $12,998 12,758
May-00 12,375 $13,011 12,783
Jun-00 12,557 $13,176 12,975
Jul-00 12,653 $13,282 13,076
Aug-00 12,787 $13,383 13,218
Sep-00 12,758 $13,387 13,189
Oct-00 12,818 $13,462 13,253
Nov-00 12,878 $13,517 13,316
Dec-00 13,027 $13,667 13,474
Jan-01 13,184 $13,875 13,627
Feb-01 13,209 $13,928 13,654
Mar-01 13,249 $14,026 13,711
Apr-01 13,135 $14,006 13,592
May-01 13,237 $14,134 13,700
Jun-01 13,311 $14,197 13,779
Jul-01 13,424 $14,313 13,900
Aug-01 13,577 $14,461 14,061
Sep-01 13,584 $14,534 14,057
Oct-01 13,683 $14,627 14,175
Nov-01 13,611 $14,582 14,087
Dec-01 13,575 $14,568 14,063
Jan-02 13,729 $14,753 14,214
Feb-02 13,840 $14,864 14,332
Mar-02 13,586 $14,642 14,079
Apr-02 13,791 $14,857 14,295
May-02 13,904 $14,943 14,402
Jun-02 13,977 $15,072 14,494
Jul-02 14,088 $15,190 14,613
Aug-02 14,214 $15,287 14,732
Sep-02 14,403 $15,407 14,934
Oct-02 14,179 $15,323 14,713
Nov-02 14,194 $15,327 14,732
Dec-02 14,399 $15,547 14,936
Jan-03 14,361 $15,596 14,898
Feb-03 14,482 $15,697 15,029
Mar-03 14,456 $15,678 15,019
Apr-03 14,523 $15,721 15,079
May-03 14,671 $15,842 15,239
Jun-03 14,639 $15,817 15,208
Jul-03 14,388 $15,675 14,960
Aug-03 14,466 $15,754 15,032
Sep-03 14,694 $15,991 15,277
Oct-03 14,651 $15,915 15,235
Nov-03 14,704 $15,930 15,294
Dec-03 14,736 $15,964 15,329
Jan-04 14,791 $16,019 15,391
Feb-04 14,914 $16,155 15,524
Mar-04 14,858 $16,112 15,469
Apr-04 14,649 $15,949 15,266
May-04 14,624 $15,886 15,228
Jun-04 14,654 $15,914 15,263
Jul-04 14,770 $16,032 15,389
Aug-04 14,958 $16,202 15,591
Sep-04 15,005 $16,220 15,645
Oct-04 15,067 $16,265 15,714
Nov-04 14,971 $16,187 15,615
Dec-04 15,106 $16,250 15,762
CREDIT QUALITY(3),(4) (as of December 31, 2004)
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[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
AAA 57%
AA 2%
A 11%
BBB 13%
SP1 11%
Cash 6%
MATURITY DISTRIBUTION(3) (as of December 31, 2004)
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[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
0-1 Year 25%
2-5 years 33%
6-10 Years 42%
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(3) Portfolio holdings and characteristics are subject to change.
(4) The average credit rating is compiled from ratings from 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) SEC yields include the actual amount of interest earned adjusted by any gain
or loss realized due to the return of principal, less expenses, calculated on a
30-day month-end basis.
(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) A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable equivalent
yield is based on the combined federal and state income tax rate of 41.05%. Any
capital gains distributions may be taxable.
(8) The value of the securities subject to the AMT is represented as a
percentage of net assets.
(9) The chart compares the performance of the Wells Fargo California Limited
Term Tax-Free Fund Class A and Institutional Class shares for the most recent
ten years with the Lehman Brothers 3-Year Municipal Bond Index. The chart
assumes a hypothetical $10,000 investment in Class A and Institutional Class
shares and reflects all operating expenses and, for Class A shares, assumes the
maximum initial sales charge of 3.00%.
3
WELLS FARGO TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
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WELLS FARGO CALIFORNIA TAX-FREE FUND
INVESTMENT OBJECTIVE
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The Wells Fargo California Tax-Free Fund (the Fund) seeks to provide
investors with a high level of current income exempt from federal income tax and
California individual income tax, while preserving capital, by investing in
intermediate- to long-term investment-grade municipal securities.
ADVISER SUB-ADVISER
Wells Fargo Funds Management, LLC Wells Capital Management Incorporated
FUND MANAGER INCEPTION DATE
Stephen Galiani 10/06/88
HOW DID THE FUND PERFORM OVER THE SIX-MONTH REPORTING PERIOD?
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The Fund's Class A shares returned 5.72%(1) for the six-month period ended
December 31, 2004, excluding sales charges, outperforming its benchmark, the
Lehman Brothers Municipal Bond Index(2), which returned 5.19% during the same
period. The Fund's Class A shares distributed $0.25 per share in dividend income
and $0.06 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. PERFORMANCE
WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT
MONTH-END PERFORMANCE IS AVAILABLE AT THE FUNDS' WEB SITE -
WWW.WELLSFARGOFUNDS.COM.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 4.50%. THE
MAXIMUM CONTINGENT DEFERRED SALES CHARGE (CDSC) FOR CLASS B SHARES IS 5.00%. FOR
CLASS C SHARES, THE MAXIMUM CDSC IS 1.00%. PERFORMANCE INCLUDING SALES CHARGE
ASSUMES THE MAXIMUM SALES CHARGE FOR THE PERIOD SHOWN. INSTITUTIONAL CLASS
SHARES ARE SOLD WITHOUT SALES CHARGES.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
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During the six-month reporting period, short-term interest rates rose and
intermediate rates fell. From July 2004 through September 2004, the Fund
benefited from holdings of bonds with durations longer than that of its
benchmark, with more than 75% of its positions having maturities beyond 12
years, where performance was strongest. However, we shifted the portfolio to a
more defensive posture midway through the period--a premature move since longer
maturities continued to outperform through the year-end.
At the beginning of the period, approximately 40% of the portfolio was
represented by lower investment-grade paper (bonds rated "A" or "BBB"), which
benefited from the spread tightening between higher-quality and lower-quality
bonds that took place during the period. In the middle of the six-month period,
approximately 5% of the Fund's portfolio was moved into ultra-short maturity
floating-rate paper, which provided somewhat sub-par returns. This portion of
the portfolio underperformed and, therefore, detracted from the Fund's overall
performance.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
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Generally, we remained fully invested during the first three months of the
semi-annual period, occasionally selling holdings to maintain enough liquidity
to meet redemptions. However, during the last week of September 2004, we began
reducing the Fund's long exposure and increasing liquidity positions. We
maintained this more defensive posture through the year-end.
Another change we instituted during the period was a reallocation of the
Fund's exposure to zero-coupon bonds. We replaced a number of conventional
"AAA"-insured zero-coupon bonds with "escrowed-to-maturity" (E-T-M) zero-coupon
bonds--bonds that are secured by portfolios of U.S. Treasury securities held in
trust. This was done because we anticipate a spread widening between these two
types of "zero's," resulting in potential outperformance by E-T-M securities.
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
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We anticipate that the Federal Reserve Board will continue to raise
short-term rates for at least the first half of 2005, while we believe
intermediate and long maturities are likely to remain within their recent
trading ranges, with possibly a slight uptick. In this environment, we expect to
use a "barbell" strategy, focusing on investments on the short and long ends of
the maturity spectrum while reducing exposure to the intermediate area, which we
view as vulnerable.
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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 California Tax-Free Fund.
A portion of the Fund's income may be subject to federal, state and/or
local income taxes or the alternative minimum tax (AMT). Any capital gains
distributions may be taxable.
(1) The Fund's Adviser has committed through October 31, 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.
4
PERFORMANCE HIGHLIGHTS WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (as of December 31, 2004)
- --------------------------------------------------------------------------------
Including Sales Charge Excluding Sales Charge
------------------------------------ ---------------------------------
6-Month* 1-Year 5-Year 10-Year 6-Month* 1-Year 5-Year 10-Year
- --------------------------------------------------------------------------------------------------------------------------------
Wells Fargo California Tax-Free Fund - Class A 0.95 0.17 5.93 6.12 5.72 4.85 6.91 6.61
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo California Tax-Free Fund - Class B 0.31 (1.03) 5.76 5.80 5.31 3.97 6.07 5.80
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo California Tax-Free Fund - Class C 4.40 3.06 6.07 5.81 5.40 4.06 6.07 5.81
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo California Tax-Free Fund -
Institutional Class 5.84 5.10 7.10 6.72
- -------------------------------------------------------------------------------------------------------------------------------
Benchmark
- -------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index(2) 5.19 4.48 7.20 7.06
- -------------------------------------------------------------------------------------------------------------------------------
*RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS(3) (as of December 31, 2004)
- -----------------------------------------------------------------------------
Average Credit Quality(4) AA
- -----------------------------------------------------------------------------
Weighted Average Coupon 4.34%
- -----------------------------------------------------------------------------
Weighted Average Maturity 16.1 years
- -----------------------------------------------------------------------------
Estimated Average Duration 6.0 years
- -----------------------------------------------------------------------------
Portfolio Turnover 14%
- -----------------------------------------------------------------------------
Net Asset Value (NAV) (Class A, B, C, I) $11.33, $11.55, $11.56, $11.35
- -----------------------------------------------------------------------------
30-Day SEC Yield(5) (Class A, B, C, I) 3.53%, 2.94%, 2.94%, 3.94%
- -----------------------------------------------------------------------------
Distribution Rate(6) (Class A, B, C, I) 4.14%, 3.48%, 3.48%, 4.57%
- -----------------------------------------------------------------------------
30-Day Taxable Equivalent Yield(7)
(Class A, B, C, I) 5.99%, 4.99%, 4.99%, 6.68%
- -----------------------------------------------------------------------------
Alternative Minimum Tax (AMT)(8) 6.90%
- -----------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENT(9)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Wells Fargo California Wells Fargo California
Tax-Free Tax-Free Lehman Brothers
Class A Institutional Class Municipal Bond Index
12/31/1994 9,550 10,000 $10,000
1/31/1995 9,816 10,277 $10,286
2/28/1995 10,054 10,527 $10,585
3/31/1995 10,142 10,619 $10,707
4/30/1995 10,144 10,622 $10,720
5/31/1995 10,451 10,943 $11,062
6/30/1995 10,309 10,794 $10,966
7/31/1995 10,372 10,860 $11,070
8/31/1995 10,506 11,001 $11,210
9/30/1995 10,593 11,092 $11,281
10/31/1995 10,786 11,293 $11,445
11/30/1995 10,989 11,506 $11,635
12/31/1995 11,115 11,638 $11,746
1/31/1996 11,172 11,698 $11,836
2/29/1996 11,072 11,593 $11,755
3/31/1996 10,902 11,415 $11,605
4/30/1996 10,855 11,365 $11,572
5/31/1996 10,863 11,374 $11,568
6/30/1996 10,990 11,507 $11,694
7/31/1996 11,111 11,634 $11,799
8/31/1996 11,119 11,642 $11,797
9/30/1996 11,290 11,821 $11,962
10/31/1996 11,412 11,949 $12,097
11/30/1996 11,633 12,180 $12,318
12/31/1996 11,564 12,108 $12,267
1/31/1997 11,584 12,129 $12,290
2/28/1997 11,696 12,246 $12,403
3/31/1997 11,532 12,074 $12,238
4/30/1997 11,635 12,182 $12,341
5/31/1997 11,810 12,365 $12,527
6/30/1997 11,913 12,473 $12,661
7/31/1997 12,301 12,880 $13,012
8/31/1997 12,159 12,732 $12,890
9/30/1997 12,297 12,876 $13,043
10/31/1997 12,373 12,955 $13,126
11/30/1997 12,429 13,014 $13,204
12/31/1997 12,600 13,194 $13,397
1/31/1998 12,763 13,365 $13,535
2/28/1998 12,764 13,355 $13,539
3/31/1998 12,756 13,359 $13,551
4/30/1998 12,704 13,305 $13,490
5/31/1998 12,912 13,512 $13,703
6/30/1998 12,961 13,563 $13,757
7/31/1998 12,980 13,596 $13,791
8/31/1998 13,197 13,824 $14,005
9/30/1998 13,406 14,043 $14,180
10/31/1998 13,401 14,038 $14,180
11/30/1998 13,448 14,087 $14,229
12/31/1998 13,459 14,100 $14,265
1/31/1999 13,627 14,264 $14,435
2/28/1999 13,554 14,201 $14,371
3/31/1999 13,605 14,243 $14,391
4/30/1999 13,610 14,261 $14,427
5/31/1999 13,490 14,137 $14,344
6/30/1999 13,264 13,901 $14,137
7/31/1999 13,306 13,946 $14,188
8/31/1999 13,151 13,784 $14,074
9/30/1999 13,166 13,788 $14,080
10/31/1999 12,975 13,591 $13,928
11/30/1999 13,125 13,763 $14,076
12/31/1999 12,967 13,600 $13,970
1/31/2000 12,898 13,530 $13,909
2/29/2000 13,125 13,756 $14,070
3/31/2000 13,456 14,117 $14,377
4/30/2000 13,335 13,980 $14,292
5/31/2000 13,279 13,937 $14,218
6/30/2000 13,676 14,341 $14,594
7/31/2000 13,899 14,576 $14,797
8/31/2000 14,199 14,906 $15,025
9/30/2000 14,114 14,806 $14,947
10/31/2000 14,212 14,924 $15,110
11/30/2000 14,334 15,054 $15,225
12/31/2000 14,743 15,472 $15,601
1/31/2001 14,804 15,551 $15,755
2/28/2001 14,859 15,611 $15,806
3/31/2001 14,946 15,691 $15,948
4/30/2001 14,729 15,466 $15,776
5/31/2001 14,894 15,655 $15,946
6/30/2001 14,979 15,746 $16,053
7/31/2001 15,213 15,994 $16,290
8/31/2001 15,554 16,354 $16,559
9/30/2001 15,505 16,306 $16,503
10/31/2001 15,660 16,471 $16,699
11/30/2001 15,544 16,337 $16,559
12/31/2001 15,362 16,163 $16,402
1/31/2002 15,562 16,376 $16,685
2/28/2002 15,716 16,539 $16,886
3/31/2002 15,378 16,187 $16,555
4/30/2002 15,620 16,443 $16,878
5/31/2002 15,739 16,557 $16,980
6/30/2002 15,828 16,667 $17,160
7/31/2002 15,992 16,842 $17,382
8/31/2002 16,213 17,077 $17,590
9/30/2002 16,602 17,489 $17,976
10/31/2002 16,243 17,113 $17,677
11/30/2002 16,222 17,080 $17,603
12/31/2002 16,521 17,413 $17,974
1/31/2003 16,438 17,315 $17,930
2/28/2003 16,654 17,545 $18,181
3/31/2003 16,658 17,553 $18,191
4/30/2003 16,820 17,727 $18,311
5/31/2003 17,161 18,105 $18,740
6/30/2003 17,058 17,985 $18,659
7/31/2003 16,441 17,339 $18,006
8/31/2003 16,577 17,486 $18,141
9/30/2003 17,024 17,960 $18,675
10/31/2003 16,955 17,891 $18,581
11/30/2003 17,169 18,120 $18,775
12/31/2003 17,270 18,231 $18,930
1/31/2004 17,334 18,302 $19,038
2/29/2004 17,654 18,643 $19,326
3/31/2004 17,565 18,553 $19,258
4/30/2004 17,090 18,056 $18,802
5/31/2004 17,048 18,015 $18,734
6/30/2004 17,128 18,103 $18,802
7/31/2004 17,381 18,374 $19,050
8/31/2004 17,744 18,761 $19,431
9/30/2004 17,872 18,900 $19,534
10/31/2004 18,032 19,073 $19,702
11/30/2004 17,874 18,911 $19,540
12/31/2004 18,107 19,161 $19,778
CREDIT QUALITY(3),(4) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
AAA 48%
AA 6%
A 12%
BBB 17%
SP1 4%
Unrated 13%
MATURITY DISTRIBUTION(3) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
0-1 Year 7%
2-5 Years 7%
6-10 Years 11%
11-20 Years 45%
21+ Years 30%
- --------------------------------------------------------------------------------
Performance shown for Class A, Class B, Class C and Institutional Class
shares of the California Tax-Free Fund for periods prior to November 8, 1999,
reflects performance of the Class A, Class B, Class C and Institutional Class
shares of the Stagecoach California Tax-Free Bond Fund, its predecessor fund.
Effective at the close of business November 5, 1999, the Stagecoach and Norwest
Advantage Funds were reorganized into the WELLS FARGO FUNDS. Performance shown
for the Class A shares for periods prior to December 12, 1997, reflects
performance of the Class A shares of the Overland Express California Tax-Free
Bond Fund (the accounting survivor of a merger of the Stagecoach and Overland
Funds on December 12, 1997). Performance shown for the Class C shares of the
Fund reflects performance of the Class D shares of the Overland Fund.
Performance shown for the Class B shares of the Fund for periods prior to
December 12, 1997, reflects performance of the Class D shares of the Overland
Fund.
(2) The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The total return of the Index does not include the effect of
sales charges, and you cannot invest directly in an index. Had the Index
incurred operating expenses, its performance would have been lower.
(3) Portfolio holdings and characteristics are subject to change.
(4) The average credit rating is compiled from ratings from 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) SEC yields include the actual amount of interest earned adjusted by any gain
or loss realized due to the return of principal, less expenses, calculated on a
30-day month-end basis.
(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) A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable equivalent
yield is based on the combined federal and state income tax rate of 41.05%. Any
capital gains distributions may be taxable.
(8) The value of the securities subject to the AMT is represented as a
percentage of net assets.
(9) The chart compares the performance of the Wells Fargo California Tax-Free
Fund Class A and Institutional Class shares for the most recent ten years with
the Lehman Brothers Municipal Bond Index. The chart assumes a hypothetical
$10,000 investment in Class A and Institutional Class shares and reflects all
operating expenses and, for Class A shares, assumes the maximum initial sales
charge of 4.50%.
5
WELLS FARGO TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
WELLS FARGO COLORADO TAX-FREE FUND
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo Colorado Tax-Free Fund (the Fund) seeks a high level of
current income exempt from federal income tax and Colorado individual income
tax, consistent with the preservation of capital.
ADVISER SUB-ADVISER
Wells Fargo Funds Management, LLC Wells Capital Management Incorporated
FUND MANAGERS INCEPTION DATE
Arthur C. Evans 06/01/93
Stephen Galiani
HOW DID THE FUND PERFORM OVER THE SIX-MONTH REPORTING PERIOD?
- --------------------------------------------------------------------------------
The Fund's Class A shares returned 4.65%(1) during the six-month period
ended December 31, 2004, excluding sales charges, underperforming its benchmark,
the Lehman Brothers Municipal Bond Index(2), which returned 5.19% for the same
period. The Fund's Class A shares distributed $0.23 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. PERFORMANCE
WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT
MONTH-END PERFORMANCE IS AVAILABLE AT THE FUNDS' WEB SITE -
WWW.WELLSFARGOFUNDS.COM.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 4.50%. THE
MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS B SHARES IS 5.00%.
PERFORMANCE INCLUDING SALES CHARGE ASSUMES THE MAXIMUM SALES CHARGE FOR THE
PERIOD SHOWN. INSTITUTIONAL CLASS SHARES ARE SOLD WITHOUT SALES CHARGES.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
- --------------------------------------------------------------------------------
The major factor that impacted the Fund's performance during the period
was the short duration of its holdings versus the benchmark. The Fund had much
lighter exposure to the 20- to 30-year sector of the yield curve compared to the
benchmark, and this range generated the best total returns for the period.
In general, the Fund's holdings in the health care sector and other low
investment-grade issues performed well. High-coupon bonds with good call
protection and longer maturities also performed well, as long-term interest
rates dropped by more than 0.40% and interest rates and bond prices have an
inverse relationship. Additionally, one position was pre-refunded during the
period, leading to a significant one-time total-return event.
The Fund's holdings of single-family mortgage revenue bonds
underperformed, as their price levels were virtually unchanged in spite of the
rally in municipal rates. One multi-family housing revenue bond was downgraded
from "BBB" to "BB" during the period, which led to a price adjustment that
negatively impacted the Fund's performance.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
- --------------------------------------------------------------------------------
Though several bond purchases were made in the 20- to 25-year maturity
range, the Fund still ended the period with less exposure to long-dated assets
than its benchmark. Shareholder redemption activity during the fourth quarter of
2004 triggered some selling, so the Fund focused mainly on the 2- to 12-year
sector to raise cash. Additionally, we added one higher-yielding, non-rated
water and sewer revenue bond to the Fund's portfolio that we felt was priced at
an attractive level.
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
- --------------------------------------------------------------------------------
We anticipate that the Federal Reserve Board will continue to raise
short-term rates for at least the first half of 2005, while we believe the
intermediate- and long-term maturities are likely to remain within recent
trading ranges with some potential for higher rate levels. In this environment,
we are reducing our exposure to lower investment-grade credits in favor of
higher-quality positions. We will also look for ways to reduce our exposure to
short maturity bonds while seeking to preserve assets with higher yields.
- --------------------------------------------------------------------------------
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 Colorado Tax-Free Fund.
A portion of the Fund's income may be subject to federal,state and/or
local income taxes or the alternative minimum tax (AMT). Any capital gains
distributions may be taxable.
(1) The Fund's Adviser has committed through October 31,2005,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 Class A, Class B and Institutional Class shares of
the Wells Fargo Colorado Tax-Free Fund for periods prior to November 8, 1999,
reflects performance of the Class A, Class B and Institutional Class shares of
the Norwest Advantage Colorado Tax-Free Fund, its predecessor fund. Effective at
the close of business November 5, 1999, the Stagecoach and Norwest Advantage
Funds were reorganized into the WELLS FARGO FUNDS.
(2) The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds.The total return of the Index does not include the effect of
sales charges, and you cannot invest directly in an index. Had the Index
incurred operating expenses, its performance would have been lower.
6
PERFORMANCE HIGHLIGHTS WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
Including Sales Charge Excluding Sales Charge
--------------------------------- ---------------------------------
6-Month* 1-Year 5-Year 10-Year 6-Month* 1-Year 5-Year 10-Year
- -----------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Colorado Tax-Free Fund - Class A (0.06) (0.90) 6.49 6.40 4.65 3.77 7.48 6.89
- -----------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Colorado Tax-Free Fund - Class B (0.75) (2.01) 6.34 6.09 4.25 2.99 6.65 6.09
- -----------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Colorado Tax-Free Fund - Institutional Class 4.78 4.03 7.57 6.95
- -----------------------------------------------------------------------------------------------------------------------------------
Benchmark
- -----------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index(2) 5.19 4.48 7.20 7.06
- -----------------------------------------------------------------------------------------------------------------------------------
*RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS(3) (AS OF DECEMBER 31, 2004)
- -----------------------------------------------------------------------------
Average Credit Quality(4) AA+
- -----------------------------------------------------------------------------
Weighted Average Coupon 5.67%
- -----------------------------------------------------------------------------
Weighted Average Maturity 12.0 years
- -----------------------------------------------------------------------------
Estimated Average Duration 4.9 years
- -----------------------------------------------------------------------------
Portfolio Turnover 10%
- -----------------------------------------------------------------------------
Net Asset Value (NAV) (Class A, B, I) $10.90, $10.91, $10.90
- -----------------------------------------------------------------------------
30-Day SEC Yield(5) (Class A, B, I) 3.97%, 3.41%, 4.41%
- -----------------------------------------------------------------------------
Distribution Rate(6) (Class A, B, I) 4.07%, 3.51%, 4.51%
- -----------------------------------------------------------------------------
30-Day Taxable Equivalent Yield(7)
(Class A, B, I) 6.40%, 5.50%, 7.11%
- -----------------------------------------------------------------------------
Alternative Minimum Tax (AMT)(8) 7.67%
- -----------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENT(9)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Wells Fargo Colorado Wells Fargo Colorado
Tax-Free Tax-Free- Lehman Brothers
Class A Institutional Class Municipal Bond Index
Dec-94 9,550 10,000 $10,000
Jan-95 9,744 10,203 $10,286
Feb-95 10,000 10,483 $10,585
Mar-95 10,088 10,575 $10,707
Apr-95 10,118 10,594 $10,720
May-95 10,446 10,939 $11,062
Jun-95 10,367 10,855 $10,966
Jul-95 10,483 10,977 $11,070
Aug-95 10,636 11,137 $11,210
Sep-95 10,695 11,198 $11,281
Oct-95 10,848 11,359 $11,445
Nov-95 11,035 11,566 $11,635
Dec-95 11,173 11,699 $11,746
Jan-96 11,254 11,784 $11,836
Feb-96 11,168 11,706 $11,755
Mar-96 11,031 11,563 $11,605
Apr-96 10,972 11,500 $11,572
May-96 11,005 11,524 $11,568
Jun-96 11,142 11,667 $11,694
Jul-96 11,273 11,804 $11,799
Aug-96 11,252 11,782 $11,797
Sep-96 11,436 11,974 $11,962
Oct-96 11,568 12,113 $12,097
Nov-96 11,723 12,275 $12,318
Dec-96 11,718 12,270 $12,267
Jan-97 11,783 12,339 $12,290
Feb-97 11,865 12,424 $12,403
Mar-97 11,705 12,256 $12,238
Apr-97 11,814 12,371 $12,341
May-97 11,996 12,561 $12,527
Jun-97 12,117 12,688 $12,661
Jul-97 12,511 13,101 $13,012
Aug-97 12,316 12,896 $12,890
Sep-97 12,486 13,087 $13,043
Oct-97 12,612 13,206 $13,126
Nov-97 12,688 13,298 $13,204
Dec-97 12,924 13,533 $13,397
Jan-98 13,040 13,667 $13,535
Feb-98 13,040 13,655 $13,539
Mar-98 13,045 13,660 $13,551
Apr-98 12,927 13,549 $13,490
May-98 13,190 13,812 $13,703
Jun-98 13,243 13,867 $13,757
Jul-98 13,260 13,885 $13,791
Aug-98 13,489 14,124 $14,005
Sep-98 13,691 14,336 $14,180
Oct-98 13,580 14,220 $14,180
Nov-98 13,681 14,326 $14,229
Dec-98 13,718 14,364 $14,265
Jan-99 13,861 14,515 $14,435
Feb-99 13,744 14,392 $14,371
Mar-99 13,736 14,383 $14,391
Apr-99 13,777 14,440 $14,427
May-99 13,690 14,335 $14,344
Jun-99 13,420 14,053 $14,137
Jul-99 13,438 14,072 $14,188
Aug-99 13,274 13,900 $14,074
Sep-99 13,174 13,795 $14,080
Oct-99 12,997 13,609 $13,928
Nov-99 13,134 13,753 $14,076
Dec-99 12,965 13,590 $13,970
Jan-00 12,826 13,431 $13,909
Feb-00 13,073 13,689 $14,070
Mar-00 13,391 14,036 $14,377
Apr-00 13,303 13,930 $14,292
May-00 13,161 13,781 $14,218
Jun-00 13,537 14,189 $14,594
Jul-00 13,765 14,428 $14,797
Aug-00 14,036 14,697 $15,025
Sep-00 13,931 14,602 $14,947
Oct-00 14,106 14,771 $15,110
Nov-00 14,226 14,896 $15,225
Dec-00 14,747 15,442 $15,601
Jan-01 14,846 15,560 $15,755
Feb-01 14,939 15,643 $15,806
Mar-01 15,064 15,774 $15,948
Apr-01 14,797 15,494 $15,776
May-01 14,948 15,667 $15,946
Jun-01 15,099 15,826 $16,053
Jul-01 15,396 16,122 $16,290
Aug-01 15,723 16,464 $16,559
Sep-01 15,639 16,392 $16,503
Oct-01 15,822 16,568 $16,699
Nov-01 15,679 16,418 $16,559
Dec-01 15,540 16,272 $16,402
Jan-02 15,758 16,501 $16,685
Feb-02 15,955 16,707 $16,886
Mar-02 15,647 16,400 $16,555
Apr-02 15,923 16,689 $16,878
May-02 16,020 16,790 $16,980
Jun-02 16,207 16,986 $17,160
Jul-02 16,550 17,346 $17,382
Aug-02 16,772 17,562 $17,590
Sep-02 17,178 17,987 $17,976
Oct-02 16,830 17,623 $17,677
Nov-02 16,753 17,546 $17,603
Dec-02 17,132 17,946 $17,974
Jan-03 17,042 17,856 $17,930
Feb-03 17,274 18,102 $18,181
Mar-03 17,260 18,092 $18,191
Apr-03 17,385 18,227 $18,311
May-03 17,749 18,612 $18,740
Jun-03 17,604 18,464 $18,659
Jul-03 17,045 17,881 $18,006
Aug-03 17,222 18,071 $18,141
Sep-03 17,658 18,532 $18,675
Oct-03 17,578 18,452 $18,581
Nov-03 17,772 18,659 $18,775
Dec-03 17,918 18,817 $18,930
Jan-04 17,966 18,872 $19,038
Feb-04 18,240 19,162 $19,326
Mar-04 18,106 19,026 $19,258
Apr-04 17,673 18,592 $18,802
May-04 17,654 18,558 $18,734
Jun-04 17,768 18,682 $18,802
Jul-04 18,018 18,949 $19,050
Aug-04 18,352 19,304 $19,431
Sep-04 18,433 19,393 $19,534
Oct-04 18,548 19,519 $19,702
Nov-04 18,375 19,340 $19,540
Dec-04 18,595 19,576 $19,778
CREDIT QUALITY(3),(4) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
AAA 52%
AA 19%
A 7%
BBB 10%
BB 1%
B 1%
Cash 3%
Unrated 7%
MATURITY DISTRIBUTION(3) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
0-1 Year 8%
2-5 Years 9%
6-10 Years 18%
11-20 Years 57%
21+ Years 8%
- --------------------------------------------------------------------------------
(3) Portfolio holdings and characteristics are subject to change.
(4) The average credit rating is compiled from ratings from 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) SEC yields include the actual amount of interest earned adjusted by any gain
or loss realized due to the return of principal, less expenses, calculated on a
30-day month-end basis.
(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) A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable equivalent
yield is based on the combined federal and state income tax rate of 38.01%. Any
capital gains distributions may be taxable.
(8) The value of the securities subject to the AMT is represented as a
percentage of net assets.
(9) The chart compares the performance of the Wells Fargo Colorado Tax-Free Fund
Class A and Institutional Class shares for the most recent 10 years with the
Lehman Brothers Municipal Bond Index. The chart assumes a hypothetical $10,000
investment in Class A and Institutional Class shares and reflects all operating
expenses and, for Class A shares, assumes the maximum initial sales charge of
4.50%.
7
WELLS FARGO TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
WELLS FARGO MINNESOTA TAX-FREE FUND
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo Minnesota Tax-Free Fund (the Fund) seeks a high level of
current income exempt from federal income tax and Minnesota individual income
tax, without assuming undue risk.
ADVISER SUB-ADVISER
Wells Fargo Funds Management, LLC Wells Capital Management Incorporated
FUND MANAGERS INCEPTION DATE
Stephen Galiani 01/12/88
Arthur C. Evans
HOW DID THE FUND PERFORM OVER THE SIX-MONTH REPORTING PERIOD?
- --------------------------------------------------------------------------------
The Fund's Class A shares returned 4.59%(1) for the six-month period ended
December 31, 2004, excluding sales charges, underperforming its benchmark, the
Lehman Brothers Municipal Bond Index(2), which returned 5.19% for the same
period. The Fund's Class A shares distributed $0.22 per share in dividend income
and $0.05 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. PERFORMANCE
WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT
MONTH-END PERFORMANCE IS AVAILABLE AT THE FUNDS' WEB SITE -
WWW.WELLSFARGOFUNDS.COM.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 4.50%. THE
MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS B SHARES IS 5.00%.
PERFORMANCE INCLUDING SALES CHARGE ASSUMES THE MAXIMUM SALES CHARGE FOR THE
PERIOD SHOWN. INSTITUTIONAL CLASS SHARES ARE SOLD WITHOUT SALES CHARGES.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
- --------------------------------------------------------------------------------
The major factor that impacted the Fund's performance was the short
duration of its holdings. Since rising interest rates are usually negative for
bonds, the worst performing securities were those with shorter maturities. The
Fund's duration was 5% to 10% shorter than that of its benchmark for the period.
The housing sector stands out as the worst performing sector for the
period. The premium risk associated with these bonds being called limited their
potential appreciation, and several bonds that were called saw negative returns
for the period.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
- --------------------------------------------------------------------------------
During the period, we sold positions with lower yields and maintained
those with longer durations. We added some higher-yielding bonds to the Fund's
portfolio during the period when potential opportunities presented themselves.
The Fund experienced a large number of redemptions during the early part of the
period, which led us to maintain a larger than normal liquidity position.
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
- --------------------------------------------------------------------------------
We anticipate that the Federal Reserve Board may continue to raise
short-term rates for at least the first half of 2005, while we believe bonds
with intermediate and long maturities are likely to remain within their recent
trading ranges, with potential for a slight increase.
We are seeking to improve the Fund's performance by reducing exposure in
the 10- to 15-year range, which we view as vulnerable, while selectively adding
positions in the 25-year maturity range, which we believe to potentially be more
promising in a rising short-term interest rate environment.
- --------------------------------------------------------------------------------
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 Minnesota Tax-Free Fund.
A portion of the Fund's income may be subject to federal, state and/or
local income taxes or the alternative minimum tax (AMT).Any capital gains
distributions may be taxable.
(1) The Fund's Adviser has committed through October 31,2005,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 Class A, Class B and Institutional Class shares of
the Wells Fargo Minnesota Tax-Free Fund for periods prior to November 8, 1999,
reflects performance of the Class A, Class B and Institutional Class shares of
the Norwest Advantage Minnesota Tax-Free Fund, its predecessor fund. Effective
at the close of business November 5, 1999, the Stagecoach and Norwest Advantage
Funds were reorganized into the WELLS FARGO FUNDS.
(2) The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds.The total return of the Index does not include the effect of
sales charges, and you cannot invest directly in an index. Had the Index
incurred operating expenses, its performance would have been lower.
8
PERFORMANCE HIGHLIGHTS WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
Including Sales Charge Excluding Sales Charge
----------------------------------- -------------------------------
6-Month* 1-Year 5-Year 10-Year 6-Month* 1-Year 5-Year 10-Year
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Minnesota Tax-Free Fund - Class A (0.12) (0.86) 6.07 5.94 4.59 3.81 7.05 6.43
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Minnesota Tax-Free Fund - Class B (0.81) (1.96) 5.94 5.64 4.19 3.04 6.26 5.64
- -------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Minnesota Tax-Free Fund - Institutional Class 4.72 4.07 7.17 6.48
- -------------------------------------------------------------------------------------------------------------------------------
Benchmark
- -------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index(2) 5.19 4.48 7.20 7.06
- -------------------------------------------------------------------------------------------------------------------------------
*RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS(3) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
Average Credit Quality(4) AA+
- --------------------------------------------------------------------------------
Weighted Average Coupon 4.93%
- --------------------------------------------------------------------------------
Weighted Average Maturity 12.3 years
- --------------------------------------------------------------------------------
Estimated Average Duration 4.9 years
- --------------------------------------------------------------------------------
Portfolio Turnover 6%
- --------------------------------------------------------------------------------
Net Asset Value (NAV) (Class A, B, I) $11.11, $11.11, $11.11
- --------------------------------------------------------------------------------
30-Day SEC Yield(5) (Class A, B, I) 3.48%, 2.89%, 3.90%
- --------------------------------------------------------------------------------
Distribution Rate(6) (Class A, B, I) 3.81%, 3.24%, 4.24%
- --------------------------------------------------------------------------------
30-Day Taxable Equivalent Yield(7) (Class A, B, I) 5.81%, 4.82%, 6.51%
- --------------------------------------------------------------------------------
Alternative Minimum Tax (AMT)(8) 0.72%
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENT(9)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Wells Fargo Minnesota Wells Fargo Minnesota
Tax-Free- Tax-Free- Lehman Brothers
Class A Institutional Class Municipal Bond Index
12/31/1994 9550 10,000 $10,000
1/31/1995 9830 10,282 $10,286
2/28/1995 10121 10,587 $10,585
3/31/1995 10203 10,673 $10,707
4/30/1995 10208 10,679 $10,720
5/31/1995 10539 11,024 $11,062
6/30/1995 10439 10,920 $10,966
7/31/1995 10496 10,980 $11,070
8/31/1995 10618 11,107 $11,210
9/30/1995 10678 11,170 $11,281
10/31/1995 10859 11,360 $11,445
11/30/1995 11062 11,571 $11,635
12/31/1995 11193 11,709 $11,746
1/31/1996 11260 11,779 $11,836
2/29/1996 11159 11,684 $11,755
3/31/1996 10997 11,503 $11,605
4/30/1996 10959 11,464 $11,572
5/31/1996 10957 11,462 $11,568
6/30/1996 11097 11,608 $11,694
7/31/1996 11187 11,703 $11,799
8/31/1996 11154 11,668 $11,797
9/30/1996 11338 11,861 $11,962
10/31/1996 11463 11,991 $12,097
11/30/1996 11665 12,203 $12,318
12/31/1996 11617 12,152 $12,267
1/31/1997 11614 12,149 $12,290
2/28/1997 11704 12,244 $12,403
3/31/1997 11543 12,074 $12,238
4/30/1997 11669 12,207 $12,341
5/31/1997 11832 12,377 $12,527
6/30/1997 11947 12,497 $12,661
7/31/1997 12312 12,879 $13,012
8/31/1997 12148 12,720 $12,890
9/30/1997 12311 12,878 $13,043
10/31/1997 12407 12,979 $13,126
11/30/1997 12480 13,055 $13,204
12/31/1997 12681 13,265 $13,397
1/31/1998 12813 13,404 $13,535
2/28/1998 12814 13,404 $13,539
3/31/1998 12819 13,409 $13,551
4/30/1998 12729 13,316 $13,490
5/31/1998 12981 13,579 $13,703
6/30/1998 13031 13,632 $13,757
7/31/1998 13048 13,649 $13,791
8/31/1998 13278 13,902 $14,005
9/30/1998 13471 14,092 $14,180
10/31/1998 13380 13,997 $14,180
11/30/1998 13442 14,062 $14,229
12/31/1998 13470 14,091 $14,265
1/31/1999 13595 14,222 $14,435
2/28/1999 13533 14,157 $14,371
3/31/1999 13538 14,161 $14,391
4/30/1999 13577 14,202 $14,427
5/31/1999 13495 14,117 $14,344
6/30/1999 13275 13,887 $14,137
7/31/1999 13267 13,879 $14,188
8/31/1999 13050 13,651 $14,074
9/30/1999 12930 13,525 $14,080
10/31/1999 12698 13,283 $13,928
11/30/1999 12816 13,407 $14,076
12/31/1999 12671 13,255 $13,970
1/31/2000 12563 13,142 $13,909
2/29/2000 12822 13,413 $14,070
3/31/2000 13162 13,768 $14,377
4/30/2000 13051 13,653 $14,292
5/31/2000 12943 13,539 $14,218
6/30/2000 13273 13,885 $14,594
7/31/2000 13476 14,097 $14,797
8/31/2000 13680 14,310 $15,025
9/30/2000 13607 14,234 $14,947
10/31/2000 13759 14,393 $15,110
11/30/2000 13858 14,496 $15,225
12/31/2000 14252 14,923 $15,601
1/31/2001 14314 14,974 $15,755
2/28/2001 14411 15,075 $15,806
3/31/2001 14527 15,196 $15,948
4/30/2001 14356 15,018 $15,776
5/31/2001 14527 15,197 $15,946
6/30/2001 14642 15,317 $16,053
7/31/2001 14883 15,569 $16,290
8/31/2001 15124 15,821 $16,559
9/30/2001 15046 15,740 $16,503
10/31/2001 15219 15,920 $16,699
11/30/2001 15083 15,778 $16,559
12/31/2001 15005 15,696 $16,402
1/31/2002 15177 15,876 $16,685
2/28/2002 15373 16,081 $16,886
3/31/2002 15109 15,805 $16,555
4/30/2002 15369 16,077 $16,878
5/31/2002 15460 16,172 $16,980
6/30/2002 15606 16,326 $17,160
7/31/2002 15812 16,541 $17,382
8/31/2002 15990 16,727 $17,590
9/30/2002 16311 17,078 $17,976
10/31/2002 16052 16,791 $17,677
11/30/2002 15962 16,701 $17,603
12/31/2002 16343 17,088 $17,974
1/31/2003 16284 17,045 $17,930
2/28/2003 16542 17,319 $18,181
3/31/2003 16555 17,336 $18,191
4/30/2003 16715 17,491 $18,311
5/31/2003 17085 17,883 $18,740
6/30/2003 16931 17,741 $18,659
7/31/2003 16313 17,097 $18,006
8/31/2003 16492 17,288 $18,141
9/30/2003 16957 17,779 $18,675
10/31/2003 16848 17,668 $18,581
11/30/2003 17027 17,859 $18,775
12/31/2003 17161 18,004 $18,930
1/31/2004 17219 18,069 $19,038
2/29/2004 17504 18,372 $19,326
3/31/2004 17408 18,258 $19,258
4/30/2004 16999 17,849 $18,802
5/31/2004 16963 17,815 $18,734
6/30/2004 17035 17,894 $18,802
7/31/2004 17234 18,107 $19,050
8/31/2004 17560 18,453 $19,431
9/30/2004 17633 18,534 $19,534
10/31/2004 17755 18,650 $19,702
11/30/2004 17590 18,497 $19,540
12/31/2004 17816 18,737 $19,778
CREDIT QUALITY(3),(4) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
AAA 45%
AA 25%
A 10%
BBB 9%
SP1 2%
Unrated 8%
Cash 1%
MATURITY DISTRIBUTION(3) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
0-1 Year 3%
2-5 Years 12%
6-10 Years 15%
11-20 Years 62%
21+ Years 8%
- --------------------------------------------------------------------------------
(3) Portfolio holdings and characteristics are subject to change.
(4) The average credit rating is compiled from ratings from 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) SEC yields include the actual amount of interest earned adjusted by any gain
or loss realized due to the return of principal, less expenses, calculated on a
30-day month-end basis.
(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) A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable equivalent
yield is based on the combined federal and state income tax rate of 40.10%. Any
capital gains distributions may be taxable.
(8) The value of the securities subject to the AMT is represented as a
percentage of net assets.
(9) The chart compares the performance of the Wells Fargo Minnesota Tax-Free
Fund Class A and Institutional Class shares for the most recent ten years with
the Lehman Brothers Municipal Bond Index. The chart assumes a hypothetical
$10,000 investment in Class A and Institutional Class shares and reflects all
operating expenses and, for Class A shares, assumes the maximum initial sales
charge of 4.50%.
9
WELLS FARGO TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
WELLS FARGO NATIONAL LIMITED TERM TAX-FREE FUND
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo National Limited Term Tax-Free Fund (the Fund) seeks
current income exempt from federal income taxes.
ADVISER SUB-ADVISER
Wells Fargo Funds Management, LLC Wells Capital Management Incorporated
FUND MANAGERS INCEPTION DATE
Arthur C. Evans 10/01/96
Stephen Galiani
HOW DID THE FUND PERFORM OVER THE SIX-MONTH REPORTING PERIOD?
- --------------------------------------------------------------------------------
The Fund's Class A shares returned 2.29%(1), excluding sales charges, for
the six-month period ended December 31, 2004, outperforming its benchmark, the
Lehman Brothers 3-Year Municipal Bond Index(2), which returned 2.10% for the
same period. The Fund distributed $0.14 per share in dividend income and no
capital gains during the period.
High-grade municipal bond yields rose by about 0.10% for two-year
maturities, but dropped by over 0.40% from the five- to ten-year portion of the
yield curve, with longer maturities generating the highest total returns.
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. PERFORMANCE
WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT
MONTH-END PERFORMANCE IS AVAILABLE AT THE FUNDS' WEB SITE -
WWW.WELLSFARGOFUNDS.COM.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 3.00%. THE
MAXIMUM CONTINGENT DEFERRED SALES CHARGE (CDSC) FOR CLASS B SHARES IS 3.00%. FOR
CLASS C SHARES, THE MAXIMUM CDSC IS 1.00%. PERFORMANCE INCLUDING SALES CHARGE
ASSUMES THE MAXIMUM SALES CHARGE FOR THE PERIOD SHOWN. INSTITUTIONAL CLASS
SHARES ARE SOLD WITHOUT SALES CHARGES.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
- --------------------------------------------------------------------------------
The biggest factor that impacted the Fund's performance during the period
was a shift to a shorter duration profile versus its benchmark. While the Fund
still outperformed, this shift was premature as yields dropped from July 2004
through September 2004.
In general, the Fund's holdings of long-duration assets, such as
zero-coupon bonds and insured bonds with good call protection in the seven- to
ten-year range, were the best performing. The sector exposure to low
investment-grade issues also performed well, as credit spread premiums (when the
difference in value of one issue sold exceeds the value of another issue bought)
narrowed during the period.
The performance of pre-refunded bonds with one- and two-year effective
maturities lagged the rest of the portfolio holdings. Redemption of bonds with
active sinking funds (money accumulated in a regular basis in a separate
custodial account that is used to redeem debt securities) also negatively
impacted the Fund's performance. These types of securities typically trade at
large premium prices, and the regularly scheduled amortization can create a drag
on total returns, in spite of their very attractive yield spreads.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
- --------------------------------------------------------------------------------
During the middle of the period, we began reducing the Fund's duration,
from 3.0 years in October 2004 to 2.6 years by the end of December 2004. The
Fund's purchases included several Alternative Minimum Tax (AMT) revenue bonds
that were attractively priced. The Fund maintained a larger than normal
liquidity position for most of the period. Shareholder redemption activity began
to accelerate in mid-November 2004, which reduced the Fund's liquidity position.
Heavy redemptions during the last week of the year were the catalyst for a
modest portfolio restructuring approximating its benchmark. We continue to
maintain a healthy liquidity position.
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
- --------------------------------------------------------------------------------
We anticipate that the Federal Reserve Board will continue to raise
short-term rates for at least the first half of 2005, while we believe
intermediate- and long-term maturities are likely to remain within recent
trading ranges with some potential for higher rate levels. In this environment,
we are reducing exposure to lower investment-grade credits in favor of
higher-quality positions. Since we believe that the yield curve will continue
flattening (short-term rates rise while long-term rates decline), we will look
for ways to reduce exposure to issues with short-term maturities while seeking
to preserve assets with higher yields.
- --------------------------------------------------------------------------------
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 National Limited Term Tax-Free Fund.
A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT).Any capital gains
distributions may be taxable.
(1) The Fund's Adviser has committed through October 31, 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.
10
PERFORMANCE HIGHLIGHTS WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
Including Sales Charge Excluding Sales Charge
------------------------------------ -----------------------------------
Life of Life of
6-Month* 1-Year 5-Year Fund 6-Month* 1-Year 5-Year Fund
- --------------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Limited Term Tax-Free Fund -
Class A (incept. 01/30/2004) (0.78) (1.52) 4.18 4.49 2.29 1.52 4.81 4.88
- --------------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Limited Term Tax-Free Fund -
Class B (incept. 01/30/2004) (1.09) (2.29) 4.02 4.09 1.91 0.71 4.02 4.09
- --------------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Limited Term Tax-Free Fund -
Class C (incept. 01/30/2004) 0.92 (0.41) 4.00 4.08 1.92 0.59 4.00 4.08
- --------------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Limited Term Tax-Free Fund -
Institutional Class (incept. 10/01/1996) 2.42 1.71 5.06 5.13
- --------------------------------------------------------------------------------------------------------------------------------
Benchmark
- --------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers 3-Year Municipal Bond Index(2) 2.10 1.78 4.78 4.63
- --------------------------------------------------------------------------------------------------------------------------------
*RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS(3) (as of December 31, 2004)
- -----------------------------------------------------------------------------
Average Credit Quality(4) AA+
- -----------------------------------------------------------------------------
Weighted Average Coupon 5.01%
- -----------------------------------------------------------------------------
Weighted Average Maturity 3.5 years
- -----------------------------------------------------------------------------
Estimated Average Duration 2.6 years
- -----------------------------------------------------------------------------
Portfolio Turnover 8%
- -----------------------------------------------------------------------------
Net Asset Value (NAV) (Class A, B, C, I) $10.92, $10.91, $10.90, $10.92
- -----------------------------------------------------------------------------
30-Day SEC Yield(5) (Class A, B, C, I) 2.17%, 1.49%, 1.49%, 2.48%
- -----------------------------------------------------------------------------
Distribution Rate(6) (Class A, B, C, I) 2.54%, 1.87%, 1.87%, 2.86%
- -----------------------------------------------------------------------------
30-Day Taxable Equivalent Yield(7)
(Class A, B, C, I) 3.34%, 2.29%, 2.29%, 3.82%
- -----------------------------------------------------------------------------
Alternative Minimum Tax (AMT)(8) 5.12%
- -----------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENT(9)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Wells Fargo National
Wells Fargo National Limited Term
Limited Term Tax-Free- Tax-Free- Lehman Brothers 3-Year
Class A Institutional Class Municipal Bond Index
Sep-96 9,700 10,000 $10,000
Oct-96 10,073 10,387 $10,070
Nov-96 10,216 10,537 $10,164
Dec-96 10,193 10,515 $10,169
Jan-97 10,230 10,555 $10,213
Feb-97 10,292 10,621 $10,263
Mar-97 10,237 10,566 $10,210
Apr-97 10,283 10,616 $10,253
May-97 10,361 10,699 $10,337
Jun-97 10,437 10,780 $10,398
Jul-97 10,626 10,977 $10,521
Aug-97 10,554 10,905 $10,501
Sep-97 10,641 10,998 $10,576
Oct-97 10,710 11,071 $10,623
Nov-97 10,737 11,101 $10,653
Dec-97 10,837 11,207 $10,726
Jan-98 10,906 11,281 $10,797
Feb-98 10,910 11,287 $10,819
Mar-98 10,949 11,330 $10,837
Apr-98 10,904 11,285 $10,822
May-98 11,026 11,414 $10,922
Jun-98 11,064 11,455 $10,959
Jul-98 11,093 11,488 $10,998
Aug-98 11,216 11,619 $11,105
Sep-98 11,307 11,715 $11,176
Oct-98 11,325 11,736 $11,230
Nov-98 11,342 11,756 $11,257
Dec-98 11,381 11,799 $11,284
Jan-99 11,473 11,896 $11,386
Feb-99 11,453 11,879 $11,399
Mar-99 11,448 11,875 $11,409
Apr-99 11,473 11,904 $11,444
May-99 11,435 11,867 $11,428
Jun-99 11,309 11,739 $11,359
Jul-99 11,370 11,805 $11,416
Aug-99 11,344 11,780 $11,430
Sep-99 11,350 11,789 $11,473
Oct-99 11,325 11,765 $11,474
Nov-99 11,387 11,832 $11,524
Dec-99 11,362 11,808 $11,506
Jan-00 11,337 11,785 $11,526
Feb-00 11,388 11,841 $11,563
Mar-00 11,464 11,922 $11,623
Apr-00 11,450 11,909 $11,624
May-00 11,436 11,898 $11,636
Jun-00 11,579 12,049 $11,783
Jul-00 11,701 12,179 $11,878
Aug-00 11,801 12,285 $11,969
Sep-00 11,796 12,283 $11,972
Oct-00 11,862 12,354 $12,039
Nov-00 11,903 12,399 $12,088
Dec-00 12,073 12,579 $12,223
Jan-01 12,209 12,723 $12,409
Feb-01 12,248 12,767 $12,457
Mar-01 12,338 12,863 $12,544
Apr-01 12,285 12,810 $12,526
May-01 12,397 12,930 $12,640
Jun-01 12,461 12,999 $12,697
Jul-01 12,586 13,132 $12,800
Aug-01 12,723 13,278 $12,933
Sep-01 12,775 13,335 $12,998
Oct-01 12,852 13,419 $13,081
Nov-01 12,759 13,324 $13,041
Dec-01 12,703 13,269 $13,028
Jan-02 12,853 13,427 $13,194
Feb-02 12,986 13,570 $13,293
Mar-02 12,735 13,310 $13,095
Apr-02 12,994 13,583 $13,287
May-02 13,058 13,654 $13,364
Jun-02 13,196 13,800 $13,479
Jul-02 13,333 13,947 $13,584
Aug-02 13,446 14,068 $13,671
Sep-02 13,632 14,265 $13,779
Oct-02 13,472 14,100 $13,704
Nov-02 13,446 14,077 $13,707
Dec-02 13,708 14,354 $13,904
Jan-03 13,693 14,342 $13,948
Feb-03 13,850 14,508 $14,038
Mar-03 13,821 14,481 $14,021
Apr-03 13,891 14,557 $14,060
May-03 14,100 14,779 $14,168
Jun-03 14,066 14,747 $14,146
Jul-03 13,768 14,437 $14,018
Aug-03 13,862 14,540 $14,089
Sep-03 14,135 14,828 $14,301
Oct-03 14,088 14,783 $14,233
Nov-03 14,142 14,842 $14,246
Dec-03 14,156 14,860 $14,277
Jan-04 14,222 14,933 $14,326
Feb-04 14,374 15,085 $14,448
Mar-04 14,298 15,021 $14,409
Apr-04 14,102 14,806 $14,264
May-04 14,037 14,740 $14,207
Jun-04 14,049 14,756 $14,232
Jul-04 14,142 14,857 $14,338
Aug-04 14,313 15,026 $14,490
Sep-04 14,330 15,061 $14,506
Oct-04 14,374 15,110 $14,546
Nov-04 14,287 15,022 $14,476
Dec-04 14,371 15,113 $14,533
CREDIT QUALITY(3),(4) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
AAA 56%
AA 15%
A 13%
BBB 8%
SP1 1%
Cash 5%
Unrated 2%
MATURITY DISTRIBUTION(3) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
0-1 Year 11%
2-5 Years 80%
6-10 Years 9%
- --------------------------------------------------------------------------------
Performance shown for Class A, Class B and Class C shares of the Wells
Fargo National Limited Term Tax-Free Fund for periods prior to January 30, 2004,
reflects the performance of the Institutional Class shares of the Fund, adjusted
to reflect applicable sales charges and expenses. Performance shown for the
Institutional Class shares of the Fund for periods prior to November 8, 1999,
reflects performance of the Institutional Class shares of the Norwest Advantage
Limited Term Tax-Free Fund, its predecessor fund. Effective at the close of
business November 5, 1999, the Stagecoach and Norwest Advantage Funds were
reorganized into the WELLS FARGO FUNDS.
(2) The Lehman Brothers 3-Year Municipal Bond Index is an unmanaged index
composed of municipal bonds with approximate maturities of three years. You
cannot invest directly in an index. Had the index incurred operating expenses,
its performance would have been lower.
(3) Portfolio holdings and characteristics are subject to change.
(4) The average credit rating is compiled from ratings from 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) SEC yields include the actual amount of interest earned adjusted by any gain
or loss realized due to the return of principal, less expenses, calculated on a
30-day month-end basis.
(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) A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable equivalent
yield is based on the combined federal and state income tax rate of 35.00%. Any
capital gains distributions may be taxable.
(8) The value of the securities subject to the AMT is represented as a
percentage of net assets.
(9) The chart compares the performance of the Wells Fargo National Limited Term
Tax-Free Fund Class A and Institutional Class shares for the life of the Fund
with the Lehman Brothers 3-Year Municipal Bond Index. The chart assumes a
hypothetical $10,000 investment in Class A and Institutional Class shares and
reflects all operating expenses and for Class A, assumes the maximum initial
sales charge of 3.00%.
11
WELLS FARGO TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
WELLS FARGO NATIONAL TAX-FREE FUND
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo National Tax-Free Fund (the Fund) seeks current income
exempt from federal income tax.
ADVISER SUB-ADVISER
Wells Fargo Funds Management, LLC Wells Capital Management Incorporated
FUND MANAGERS INCEPTION DATE
Arthur C. Evans 08/01/89
Stephen Galiani
HOW DID THE FUND PERFORM OVER THE SIX-MONTH REPORTING PERIOD?
- --------------------------------------------------------------------------------
The Fund's Class A shares returned 5.31%(1) during the six-month period
ended December 31, 2004, excluding sales charges, outperforming its benchmark,
the Lehman Brothers Municipal Bond Index(2), which returned 5.19% for the same
period. The Fund's Class A shares distributed $0.23 per share in dividend income
and no capital gains during the period.
High-grade municipal bond yields rose by about 0.10% for two-year
maturities, but dropped by over 0.40% from the five- to ten-year portion of the
yield curve, with longer maturities generating the highest total returns.
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. PERFORMANCE
WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT
MONTH-END PERFORMANCE IS AVAILABLE AT THE FUNDS' WEB SITE -
WWW.WELLSFARGOFUNDS.COM.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 4.50%. THE
MAXIMUM CONTINGENT DEFERRED SALES CHARGE (CDSC) FOR CLASS B SHARES IS 5.00%. FOR
CLASS C SHARES, THE MAXIMUM CDSC IS 1.00%. PERFORMANCE INCLUDING SALES CHARGE
ASSUMES THE MAXIMUM SALES CHARGE FOR THE PERIOD SHOWN. INSTITUTIONAL CLASS
SHARES ARE SOLD WITHOUT SALES CHARGES.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
- --------------------------------------------------------------------------------
The major factor that impacted the Fund's performance during the period
was its repositioning to a shorter duration versus its benchmark. While the Fund
still outperformed, this repositioning was premature as yields dropped from July
2004 through September 2004. The Fund had limited exposure to the 20- to 30-year
sector, which benefited from lower yields and generated the best total returns
for the period.
In general, the Fund's holdings of long-duration securities, such as
zero-coupon bonds and long non-callable bonds, were the best performing. The
Fund's holdings of municipal closed-end funds also generated positive returns.
The sector exposure to low investment-grade issues performed well, as credit
spread premiums narrowed during the period. Additionally, one distressed
multi-family housing bond was liquidated during the period at a significantly
improved market price.
The Fund's holdings of single-family mortgage revenue bonds
underperformed, as their price levels were virtually unchanged in spite of the
rally in municipal rates. Several multi-family housing revenue bonds posted low
returns as their high-dollar premiums capped their potential for further price
appreciation. Pre-refunded bonds with two- to four-year effective maturities
also underperformed, as this part of the yield curve generated the lowest total
returns.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
- --------------------------------------------------------------------------------
At the beginning of the period, we began reducing the Fund's duration,
from 6.4 years in July 2004 to 5.6 years by the end of October 2004. This was
accomplished by liquidating most of the Fund's holdings of zero-coupon bonds and
several long-maturity 5% coupon bonds. The Fund maintained a larger than normal
liquidity position for most of the period, adding some bonds in the 20- to
25-year sector during November 2004 to help increase its underweighted position.
The Fund still ended the period with less exposure to long-dated assets than the
benchmark, however, shareholder redemption activity during December 2004
triggered some selling, and the Fund focused mainly on the 2- to 12-year sector
to raise cash.
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
- --------------------------------------------------------------------------------
We anticipate that the Federal Reserve Board may continue to raise
short-term rates for at least the first half of 2005, while we believe that
securities with intermediate- and long-term maturities will remain within recent
trading ranges with some potential for higher rate levels. We intend to reduce
our exposure to lower investment-grade credits in favor of higher-quality
positions. We expect the yield curve may continue to flatten. The yield curve,
which measures bond yields against maturity, is usually upward sloping, which
means that yields on short-term bonds are typically lower than on long-term
bonds. In recent months, however, short-term yields rose significantly while
long-term yields were virtually unchanged, causing the curve to flatten.
Therefore, we will look for ways to reduce exposure to the short end of the
curve while seeking to preserve assets with higher yields.
- --------------------------------------------------------------------------------
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 National Tax-Free Fund.
A portion of the Fund's income may be subject to federal,state and/or
local income taxes or the alternative minimum tax (AMT).Any capital gains
distributions may be taxable.
12
PERFORMANCE HIGHLIGHTS WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (as of December 31, 2004)
- --------------------------------------------------------------------------------
Including Sales Charge Excluding Sales Charge
------------------------------- --------------------------------
6-Month* 1-Year 5-Year 10-Year 6-Month* 1-Year 5-Year 10-Year
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Tax-Free Fund - Class A 0.57 (0.05) 5.89 6.11 5.31 4.66 6.87 6.60
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Tax-Free Fund - Class B (0.09) (1.22) 5.75 5.80 4.91 3.78 6.07 5.80
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Tax-Free Fund - Class C 3.81 2.79 6.05 5.79 4.81 3.79 6.05 5.79
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Tax-Free Fund - Institutional Class 5.44 4.82 7.10 6.71
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark
- ----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index(2) 5.19 4.48 7.20 7.06
- ----------------------------------------------------------------------------------------------------------------------------
*RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS(3) (as of December 31, 2004)
- --------------------------------------------------------------------------------
Average Credit Quality(4) AA
- --------------------------------------------------------------------------------
Weighted Average Coupon 5.34%
- --------------------------------------------------------------------------------
Weighted Average Maturity 13.8 years
- --------------------------------------------------------------------------------
Estimated Average Duration 5.9 years
- --------------------------------------------------------------------------------
Portfolio Turnover 30%
- --------------------------------------------------------------------------------
Net Asset Value (NAV) (Class A, B, C, I) $10.47, $10.47, $10.46, $10.47
- --------------------------------------------------------------------------------
30-Day SEC Yield(5) (Class A, B, C, I) 3.91%, 3.35%, 3.35%, 4.35%
- --------------------------------------------------------------------------------
Distribution Rate(6) (Class A, B, C, I) 4.01%, 3.45%, 3.45%, 4.45%
- --------------------------------------------------------------------------------
30-Day Taxable Equivalent Yield(7)
(Class A, B, C, I) 6.02%, 5.15%, 5.15%, 6.69%
- --------------------------------------------------------------------------------
Alternative Minimum Tax (AMT)(8) 14.29%
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENT(9)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Wells Fargo National
Wells Fargo National Tax-Free
Tax-Free Institutional Lehman Brothers
Class A Class Municipal Bond Index
12/31/1994 9,550 10,000 $10,000
1/31/1995 9,804 10,255 $10,286
2/28/1995 10,046 10,519 $10,585
3/31/1995 10,109 10,585 $10,707
4/30/1995 10,133 10,599 $10,720
5/31/1995 10,458 10,939 $11,062
6/30/1995 10,360 10,836 $10,966
7/31/1995 10,449 10,930 $11,070
8/31/1995 10,563 11,059 $11,210
9/30/1995 10,623 11,122 $11,281
10/31/1995 10,769 11,275 $11,445
11/30/1995 11,021 11,528 $11,635
12/31/1995 11,161 11,674 $11,746
1/31/1996 11,256 11,785 $11,836
2/29/1996 11,173 11,687 $11,755
3/31/1996 11,027 11,534 $11,605
4/30/1996 11,000 11,518 $11,572
5/31/1996 11,011 11,518 $11,568
6/30/1996 11,104 11,626 $11,694
7/31/1996 11,247 11,775 $11,799
8/31/1996 11,223 11,739 $11,797
9/30/1996 11,372 11,907 $11,962
10/31/1996 11,528 12,070 $12,097
11/30/1996 11,719 12,257 $12,318
12/31/1996 11,690 12,227 $12,267
1/31/1997 11,710 12,261 $12,290
2/28/1997 11,816 12,360 $12,403
3/31/1997 11,643 12,179 $12,238
4/30/1997 11,767 12,308 $12,341
5/31/1997 11,940 12,501 $12,527
6/30/1997 12,063 12,630 $12,661
7/31/1997 12,438 13,023 $13,012
8/31/1997 12,288 12,853 $12,890
9/30/1997 12,448 13,033 $13,043
10/31/1997 12,538 13,115 $13,126
11/30/1997 12,640 13,234 $13,204
12/31/1997 12,890 13,482 $13,397
1/31/1998 12,994 13,604 $13,535
2/28/1998 12,983 13,592 $13,539
3/31/1998 13,001 13,612 $13,551
4/30/1998 12,882 13,487 $13,490
5/31/1998 13,174 13,779 $13,703
6/30/1998 13,228 13,836 $13,757
7/31/1998 13,246 13,855 $13,791
8/31/1998 13,491 14,125 $14,005
9/30/1998 13,697 14,340 $14,180
10/31/1998 13,624 14,264 $14,180
11/30/1998 13,715 14,346 $14,229
12/31/1998 13,719 14,364 $14,265
1/31/1999 13,864 14,502 $14,435
2/28/1999 13,773 14,406 $14,371
3/31/1999 13,764 14,411 $14,391
4/30/1999 13,818 14,468 $14,427
5/31/1999 13,706 14,336 $14,344
6/30/1999 13,473 14,093 $14,137
7/31/1999 13,467 14,087 $14,188
8/31/1999 13,276 13,901 $14,074
9/30/1999 13,202 13,824 $14,080
10/31/1999 12,996 13,608 $13,928
11/30/1999 13,151 13,758 $14,076
12/31/1999 12,982 13,583 $13,970
1/31/2000 12,812 13,422 $13,909
2/29/2000 13,032 13,640 $14,070
3/31/2000 13,381 14,022 $14,377
4/30/2000 13,306 13,931 $14,292
5/31/2000 13,189 13,826 $14,218
6/30/2000 13,541 14,197 $14,594
7/31/2000 13,800 14,455 $14,797
8/31/2000 14,018 14,701 $15,025
9/30/2000 13,911 14,591 $14,947
10/31/2000 14,060 14,736 $15,110
11/30/2000 14,165 14,863 $15,225
12/31/2000 14,643 15,366 $15,601
1/31/2001 14,738 15,454 $15,755
2/28/2001 14,798 15,519 $15,806
3/31/2001 14,907 15,651 $15,948
4/30/2001 14,728 15,450 $15,776
5/31/2001 14,866 15,614 $15,946
6/30/2001 15,017 15,759 $16,053
7/31/2001 15,274 16,031 $16,290
8/31/2001 15,545 16,319 $16,559
9/30/2001 15,504 16,278 $16,503
10/31/2001 15,659 16,460 $16,699
11/30/2001 15,498 16,294 $16,559
12/31/2001 15,326 16,100 $16,402
1/31/2002 15,516 16,302 $16,685
2/28/2002 15,683 16,496 $16,886
3/31/2002 15,417 16,220 $16,555
4/30/2002 15,636 16,437 $16,878
5/31/2002 15,749 16,558 $16,980
6/30/2002 15,907 16,742 $17,160
7/31/2002 16,143 16,994 $17,382
8/31/2002 16,319 17,182 $17,590
9/30/2002 16,632 17,514 $17,976
10/31/2002 16,337 17,191 $17,677
11/30/2002 16,258 17,111 $17,603
12/31/2002 16,560 17,449 $17,974
1/31/2003 16,452 17,322 $17,930
2/28/2003 16,702 17,589 $18,181
3/31/2003 16,672 17,561 $18,191
4/30/2003 16,800 17,699 $18,311
5/31/2003 17,123 18,043 $18,740
6/30/2003 17,052 17,972 $18,659
7/31/2003 16,546 17,443 $18,006
8/31/2003 16,673 17,581 $18,141
9/30/2003 17,078 18,011 $18,675
10/31/2003 16,983 17,914 $18,581
11/30/2003 17,159 18,104 $18,775
12/31/2003 17,288 18,261 $18,930
1/31/2004 17,383 18,348 $19,038
2/29/2004 17,705 18,691 $19,326
3/31/2004 17,616 18,618 $19,258
4/30/2004 17,123 18,085 $18,802
5/31/2004 17,103 18,085 $18,734
6/30/2004 17,182 18,154 $18,802
7/31/2004 17,417 18,406 $19,050
8/31/2004 17,757 18,769 $19,431
9/30/2004 17,922 18,948 $19,534
10/31/2004 18,036 19,091 $19,702
11/30/2004 17,858 18,888 $19,540
12/31/2004 18,094 19,142 $19,778
CREDIT QUALITY(3),(4) (as of December 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
AAA 41%
AA 18%
A 13%
BBB 6%
BB 2%
SP1 5%
Unrated 15%
MATURITY DISTRIBUTION(3) (as of December 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
0-1 Year 7%
2-5 Years 10%
6-10 Years 13%
11-20 Years 51%
21+ Years 19%
(1) The Fund's Adviser has committed through October 31, 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 returns to shareholders. Without these reductions, the Fund's
returns would have been lower.
Performance shown for the Class A, Class B and Institutional Class shares
of the Wells Fargo National Tax-Free Fund for periods prior to November 8, 1999,
reflects performance of the Class A, Class B, and Institutional Class shares of
the Norwest Advantage Tax-Free Income Fund (the accounting survivor of a merger
of the Norwest Advantage Tax-Free Income Fund and the Stagecoach National
Tax-Free Fund), its predecessor fund. Effective at the close of business
November 5, 1999, the Stagecoach and Norwest Advantage Funds were reorganized
into the WELLS FARGO FUNDS. Performance of the Class B shares for periods prior
to August 6, 1993 reflects performance of the Class A shares of the Norwest
Advantage Fund adjusted to reflect Class B shares sales charges and expenses.
Performance shown for Class C shares for periods prior to November 8, 1999
reflects performance of the Class B shares of the Norwest Advantage Fund
adjusted for Class C shares sales charges and expenses.
(2) The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The total return of the Index does not include the effect of
sales charges, and you cannot invest directly in an index. Had the Index
incurred operating expenses, its performance would have been lower.
(3) Portfolio holdings and characteristics are subject to change.
(4) The average credit rating is compiled from ratings from 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) SEC yields include the actual amount of interest earned adjusted by any gain
or loss realized due to the return of principal, less expenses, calculated on a
30-day month-end basis.
(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) A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable equivalent
yield is based on the combined federal and state income tax rate of 35.00%. Any
capital gains distributions may be taxable.
(8) The value of the securities subject to the AMT is represented as a
percentage of net assets.
(9) The chart compares the performance of the Wells Fargo National Tax-Free Fund
Class A and Institutional Class shares for the most recent ten years with the
Lehman Brothers Municipal Bond Index. The chart assumes a hypothetical $10,000
investment in Class A and Institutional Class shares and reflects all operating
expenses and, for Class A shares, assumes the maximum initial sales charge of
4.50%.
13
WELLS FARGO TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
WELLS FARGO NEBRASKA TAX-FREE FUND
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo Nebraska Tax-Free Fund (the Fund) seeks current income
exempt from federal income tax and Nebraska individual income tax.
ADVISER SUB-ADVISER
Wells Fargo Funds Management, LLC Wells Capital Management Incorporated
FUND MANAGERS INCEPTION DATE
Arthur C. Evans 8/31/89
Mary Jo Sebrell
HOW DID THE FUND PERFORM OVER THE SIX-MONTH REPORTING PERIOD?
- --------------------------------------------------------------------------------
The Fund returned 3.66%(1) for the six-month period ended December 31,
2004, underperforming its benchmark, the Lehman Brothers Municipal Bond
Index(2), which returned 5.19% during the period. The Fund distributed $0.20 per
share in dividend income and $0.15 per share in capital gains during the period.
High-grade municipal bond yields rose by about 0.10% for two-year
maturities, but dropped by over 0.40% on municipal securities maturing within
the 5- to 30-year range, with longer maturities generating the highest total
returns.
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
MONTH-END PERFORMANCE IS AVAILABLE AT THE FUNDS' WEB SITE -
WWW.WELLSFARGOFUNDS.COM.
INSTITUTIONAL CLASS SHARES ARE SOLD WITHOUT SALES CHARGE OR OTHER FEES AND
EXPENSES.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
- --------------------------------------------------------------------------------
The major factor that impacted the Fund's performance during the period
was a consistent short-duration profile of its securities versus the benchmark.
For example, the high number of Nebraska bonds with five-year calls that are
held in the Fund's portfolio limited the portfolio's returns because of
increasing short-term interest rates throughout the period.
In general, the Fund's holdings of insured bonds with good call protection
(the length of time a security cannot be redeemed by the issuer) in the 15- to
25-year range were the best performing. Low investment-grade issues and health
care bonds held in the portfolio also performed well, as the difference between
the value of a bond sold exceeding that of another bond bought (credit spread)
narrowed during the period.
The performance of pre-refunded bonds with one- and two-year maturities
lagged the rest of the portfolio holdings, as this part of the yield curve
generated the lowest total returns. In addition, single-family housing revenue
bonds also underperformed, as their prices generally did not appreciate in a
period of declining interest rates. Prepayment activity can create a drag on
total returns, in spite of its attractive yield spreads.
WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD?
- --------------------------------------------------------------------------------
The Fund maintained a conservative liquidity position for most of the
period. We did one extension swap during the period, selling a bond maturing in
2008 in favor of one maturing in 2009 for a yield pick-up of 0.35%. We also
purchased two positions in the 15- to 18-year maturity range with 10-year call
protection, to add sensitivity to the Fund during a period of rising interest
rates.
LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK?
- --------------------------------------------------------------------------------
We anticipate that the Federal Reserve Board may continue to raise
short-term rates for at least the first half of 2005, while we believe that the
intermediate and long portions of the maturity spectrum are likely to remain
within recent trading ranges with some potential for higher levels. As a result,
we will look for ways to reduce exposure to the short end of the maturity
spectrum while seeking to preserve assets with higher book yields.
- --------------------------------------------------------------------------------
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 Nebraska Tax-Free Fund.
A portion of the Fund's income may be subject to federal,state and/or
local income taxes or the alternative minimum tax (AMT).Any capital gains
distributions may be taxable.
(1) The Fund's Adviser has committed through October 31,2005,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 Institutional class shares of the Wells Fargo
Nebraska Tax-Free Fund for the periods from September 29, 1997, to September 8,
2000, reflects the performance of the Institutional class shares of the Great
Plains Tax-Free Bond Fund.
(2) The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds.You cannot invest directly in an index. Had the Index incurred
operating expenses, its performance would have been lower.
14
PERFORMANCE HIGHLIGHTS WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
Excluding Sales Charge
-------------------------------------
6-Month* 1-Year 5-Year 10-Year
- ---------------------------------------------------------------------------------------------------------
Wells Fargo Nebraska Tax-Free Fund - Institutional Class 3.66 2.80 5.86 5.39
- ---------------------------------------------------------------------------------------------------------
Benchmark
- ---------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index(2) 5.19 4.48 7.20 7.06
- ---------------------------------------------------------------------------------------------------------
* RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS(3) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
Average Credit Quality(4) AA+
- --------------------------------------------------------------------------------
Weighted Average Coupon 5.29%
- --------------------------------------------------------------------------------
Weighted Average Maturity 11.2 years
- --------------------------------------------------------------------------------
Estimated Average Duration 4.4 years
- --------------------------------------------------------------------------------
Portfolio Turnover 8%
- --------------------------------------------------------------------------------
Net Asset Value (NAV) $10.04
- --------------------------------------------------------------------------------
30-Day SEC Yield(5) 3.64%
- --------------------------------------------------------------------------------
Distribution Rate(6) 3.92%
- --------------------------------------------------------------------------------
30-Day Taxable Equivalent Yield(7) 6.01%
- --------------------------------------------------------------------------------
Alternative Minimum Tax (AMT)(8) 5.21%
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENT(9)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Wells Fargo Nebraska
Tax Free - Lehman Brothers
Institutional Class Municipal Bond Index
12/31/1994 10,000 $10,000
1/31/1995 10,160 $10,286
2/28/1995 10,352 $10,585
3/31/1995 10,462 $10,707
4/30/1995 10,492 $10,720
5/31/1995 10,716 $11,062
6/30/1995 10,694 $10,966
7/31/1995 10,806 $11,070
8/31/1995 10,897 $11,210
9/30/1995 10,937 $11,281
10/31/1995 11,008 $11,445
11/30/1995 11,110 $11,635
12/31/1995 11,160 $11,746
1/31/1996 11,263 $11,836
2/29/1996 11,251 $11,755
3/31/1996 11,143 $11,605
4/30/1996 11,109 $11,572
5/31/1996 11,107 $11,568
6/30/1996 11,169 $11,694
7/31/1996 11,253 $11,799
8/31/1996 11,272 $11,797
9/30/1996 11,346 $11,962
10/31/1996 11,420 $12,097
11/30/1996 11,581 $12,318
12/31/1996 11,535 $12,267
1/31/1997 11,588 $12,290
2/28/1997 11,674 $12,403
3/31/1997 11,572 $12,238
4/30/1997 11,592 $12,341
5/31/1997 11,712 $12,527
6/30/1997 11,822 $12,661
7/31/1997 12,009 $13,012
8/31/1997 11,939 $12,890
9/30/1997 12,053 $13,043
10/31/1997 12,095 $13,126
11/30/1997 12,137 $13,204
12/31/1997 12,280 $13,397
1/31/1998 12,372 $13,535
2/28/1998 12,376 $13,539
3/31/1998 12,371 $13,551
4/30/1998 12,316 $13,490
5/31/1998 12,472 $13,703
6/30/1998 12,489 $13,757
7/31/1998 12,521 $13,791
8/31/1998 12,690 $14,005
9/30/1998 12,808 $14,180
10/31/1998 12,815 $14,180
11/30/1998 12,846 $14,229
12/31/1998 12,890 $14,265
1/31/1999 13,012 $14,435
2/28/1999 12,950 $14,371
3/31/1999 12,945 $14,391
4/30/1999 12,977 $14,427
5/31/1999 12,908 $14,344
6/30/1999 12,746 $14,137
7/31/1999 12,804 $14,188
8/31/1999 12,759 $14,074
9/30/1999 12,751 $14,080
10/31/1999 12,666 $13,928
11/30/1999 12,777 $14,076
12/31/1999 12,718 $13,970
1/31/2000 12,646 $13,909
2/29/2000 12,784 $14,070
3/31/2000 12,980 $14,377
4/30/2000 12,906 $14,292
5/31/2000 12,847 $14,218
6/30/2000 13,150 $14,594
7/31/2000 13,307 $14,797
8/31/2000 13,452 $15,025
9/30/2000 13,378 $14,947
10/31/2000 13,511 $15,110
11/30/2000 13,588 $15,225
12/31/2000 13,910 $15,601
1/31/2001 14,018 $15,755
2/28/2001 14,079 $15,806
3/31/2001 14,173 $15,948
4/30/2001 14,041 $15,776
5/31/2001 14,162 $15,946
6/30/2001 14,254 $16,053
7/31/2001 14,419 $16,290
8/31/2001 14,598 $16,559
9/30/2001 14,562 $16,503
10/31/2001 14,701 $16,699
11/30/2001 14,580 $16,559
12/31/2001 14,484 $16,402
1/31/2002 14,669 $16,685
2/28/2002 14,819 $16,886
3/31/2002 14,582 $16,555
4/30/2002 14,839 $16,878
5/31/2002 14,936 $16,980
6/30/2002 15,062 $17,160
7/31/2002 15,265 $17,382
8/31/2002 15,438 $17,590
9/30/2002 15,773 $17,976
10/31/2002 15,483 $17,677
11/30/2002 15,400 $17,603
12/31/2002 15,784 $17,974
1/31/2003 15,687 $17,930
2/28/2003 15,904 $18,181
3/31/2003 15,927 $18,191
4/30/2003 16,025 $18,311
5/31/2003 16,373 $18,740
6/30/2003 16,254 $18,659
7/31/2003 15,685 $18,006
8/31/2003 15,847 $18,141
9/30/2003 16,268 $18,675
10/31/2003 16,162 $18,581
11/30/2003 16,338 $18,775
12/31/2003 16,448 $18,930
1/31/2004 16,470 $19,038
2/29/2004 16,760 $19,326
3/31/2004 16,621 $19,258
4/30/2004 16,237 $18,802
5/31/2004 16,242 $18,734
6/30/2004 16,310 $18,802
7/31/2004 16,461 $19,050
8/31/2004 16,743 $19,431
9/30/2004 16,779 $19,534
10/31/2004 16,899 $19,702
11/30/2004 16,705 $19,540
12/31/2004 16,908 $19,778
CREDIT QUALITY(3),(4) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
AAA 49%
AA 37%
A 7%
SP1 1%
Cash 2%
Unrated 4%
MATURITY DISTRIBUTION(3) (AS OF DECEMBER 31, 2004)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
0-1 Year 4%
2-5 Years 14%
6-10 Years 28%
11-20 Years 51%
21+ Years 3%
- --------------------------------------------------------------------------------
(3) Portfolio holdings and characteristics are subject to change.
(4) The average credit rating is compiled from ratings from 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) SEC yields include the actual amount of interest earned adjusted by any gain
or loss realized due to the return of principal, less expenses, calculated on a
30-day month-end basis.
(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) A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable equivalent
yield is based on the combined federal and state income tax rate of 39.45%. Any
capital gains distributions may be taxable.
(8) The value of the securities subject to the AMT is represented as a
percentage of net assets.
(9) The chart compares the performance of the Wells Fargo Nebraska Tax-Free Fund
Institutional Class shares for the most recent ten years with the Lehman
Brothers Municipal Bond Index. The chart assumes a hypothetical $10,000
investment in Institutional Class shares and reflects all operating expenses.
15
WELLS FARGO TAX-FREE 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(1) Ratio
Wells Fargo California Limited Term Tax-Free Fund
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo California Limited Term Tax-Free Fund - Class A
Actual $1,000.00 $1,030.80 $ 4.35 0.85%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,020.92 $ 4.33 0.85%
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo California Limited Term Tax-Free Fund - Class C
Actual $1,000.00 $1,026.00 $ 8.17 1.60%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,017.14 $ 8.13 1.60%
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo California Limited Term Tax-Free Fund - Institutional Class
Actual $1,000.00 $1,032.70 $ 3.07 0.60%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,022.18 $ 3.06 0.60%
Wells Fargo California Tax-Free Fund
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo California Tax-Free Fund - Class A
Actual $1,000.00 $1,057.20 $ 4.15 0.80%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,021.17 $ 4.08 0.80%
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo California Tax-Free Fund - Class B
Actual $1,000.00 $1,053.10 $ 8.02 1.55%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,017.39 $ 7.88 1.55%
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo California Tax-Free Fund - Class C
Actual $1,000.00 $1,054.00 $ 8.02 1.55%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,017.39 $ 7.88 1.55%
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo California Tax-Free Fund - Institutional Class
Actual $1,000.00 $1,058.40 $ 2.85 0.55%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,022.43 $ 2.80 0.55%
16
FUND EXPENSES (UNAUDITED) WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
Beginning Ending
Account Account Expenses Net Annual
Value Value Paid During Expense
6/30/04 12/31/04 the Period(1) Ratio
Wells Fargo Colorado Tax-Free Fund
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo Colorado Tax-Free Fund - Class A
Actual $1,000.00 $1,046.50 $ 4.38 0.85%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,020.92 $ 4.33 0.85%
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo Colorado Tax-Free Fund - Class B
Actual $1,000.00 $1,042.50 $ 8.24 1.60%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,017.14 $ 8.13 1.60%
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo Colorado Tax-Free Fund- Institutional Class
Actual $1,000.00 $1,047.80 $ 3.10 0.60%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,022.18 $ 3.06 0.60%
Wells Fargo Minnesota Tax-Free Fund
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo Minnesota Tax-Free Fund - Class A
Actual $1,000.00 $1,045.90 $ 4.38 0.85%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,020.92 $ 4.33 0.85%
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo Minnesota Tax-Free Fund - Class B
Actual $1,000.00 $1,041.90 $ 8.23 1.60%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,017.14 $ 8.13 1.60%
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo Minnesota Tax-Free Fund - Institutional Class
Actual $1,000.00 $1,047.20 $ 3.10 0.60%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,022.18 $ 3.06 0.60%
Wells Fargo National Limited Term Tax-Free Fund
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Limited Term Tax-Free Fund - Class A
Actual $1,000.00 $1,022.90 $ 4.33 0.85%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,020.92 $ 4.33 0.85%
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Limited Term Tax-Free Fund - Class B
Actual $1,000.00 $1,019.10 $ 8.14 1.60%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,017.14 $ 8.13 1.60%
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Limited Term Tax-Free Fund - Class C
Actual $1,000.00 $1,019.20 $ 8.14 1.60%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,017.14 $ 8.13 1.60%
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Limited Term Tax-Free Fund - Institutional Class
Actual $1,000.00 $1,024.20 $ 3.06 0.60%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,022.18 $ 3.06 0.60%
17
WELLS FARGO TAX-FREE FUNDS FUND EXPENSES (UNAUDITED)
- --------------------------------------------------------------------------------
Beginning Ending
Account Account Expenses Net Annual
Value Value Paid During Expense
6/30/04 12/31/04 the Period(1) Ratio
Wells Fargo National Tax-Free Fund
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Tax-Free Fund - Class A
Actual $1,000.00 $1,053.10 $ 4.40 0.85%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,020.92 $ 4.33 0.85%
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Tax-Free Fund - Class B
Actual $1,000.00 $1,049.10 $ 8.26 1.60%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,017.14 $ 8.13 1.60%
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Tax-Free Fund - Class C
Actual $1,000.00 $1,048.10 $ 8.26 1.60%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,017.14 $ 8.13 1.60%
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo National Tax-Free Fund - Institutional Class
Actual $1,000.00 $1,054.40 $ 3.11 0.60%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,022.18 $ 3.06 0.60%
Wells Fargo Nebraska Tax-Free Fund
- ----------------------------------------------------------------------------------------------------------------------------
Wells Fargo Nebraska Tax-Free Fund - Institutional Class
Actual $1,000.00 $1,036.60 $ 4.06 0.79%
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000.00 $1,021.22 $ 4.02 0.79%
(1) 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).
18
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
MUNICIPAL BONDS & NOTES - 92.56%
CALIFORNIA - 91.59%
$ 600,000 ABAG FINANCIAL AUTHORITY CALIFORNIA REVENUE ODD FELLOWS HOME OF
CALIFORNIA-SERIES A (HEALTH FACILITIES FINANCING AUTHORITY REVENUE LOC) 5.00% 11/15/2009 $ 650,178
180,000 ABAG FINANCIAL AUTHORITY FOR NONPROFIT CORPORATIONS CA STANFORD
UNIVERSITY HOSPITAL (OTHER REVENUE LOC)SS. 5.50 11/01/2005 184,279
250,000 ABAG FINANCIAL AUTHORITY FOR NONPROFIT CORPORATIONS EPISCOPAL HOMES
FOUNDATION PROJECT (HEALTHCARE FACILITIES REVENUE LOC) 5.00 07/01/2005 252,512
1,100,000 ABAG FINANCIAL AUTHORITY FOR NONPROFIT CORPORATIONS EPISCOPAL HOMES
FOUNDATION PROJECT (HEALTHCARE FACILITIES REVENUE LOC) 5.00 07/01/2007 1,145,870
1,105,000 ABAG FINANCIAL AUTHORITY FOR NONPROFIT CORPORATIONS EPISCOPAL HOMES
FOUNDATION PROJECT (HEALTHCARE FACILITIES REVENUE LOC) 5.00 07/01/2008 1,157,300
840,000 ABAG FINANCIAL AUTHORITY FOR NONPROFIT CORPORATIONS SAN DIEGO
ASSOCIATES- SERIES C (HEALTHCARE FACILITIES REVENUE LOC) 4.00 03/01/2008 856,346
1,245,000 BAY AREA CA GOVERNMENTS ASSOCIATION BART SAN FRANCISCO EXTENSION
FTA CAPITAL GRANT SERIES A AMBAC INSURED (STATE & LOCAL
GOVERNMENTS LOC) 4.88 06/15/2009 1,247,739
500,000 BAY AREA CA TOLL AUTHORITY SAN FRANCISCO BAY AREA SERIES C AMBAC
INSURED (TOLL ROAD REVENUE LOC)+/-SS. 1.96 04/01/2025 500,000
480,000 CALIFORNIA EDUCATIONAL FACILITIES AUTHORITY POOLED COLLEGE &
UNIVERSITY PROJECT SERIES B (COLLEGE AND UNIVERSITY REVENUE LOC) 4.50 04/01/2006 492,744
505,000 CALIFORNIA EDUCATIONAL FACILITIES AUTHORITY UNIVERSITY OF THE PACIFIC
(COLLEGE AND UNIVERSITY REVENUE LOC) 4.10 11/01/2010 528,993
1,000,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY CATHOLIC HEALTHCARE
WEST SERIES H (HEALTHCARE FACILITIES REVENUE LOC)+/- 4.45 07/01/2026 1,028,420
1,000,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY PRESBYTERIAN HOSPITAL
MBIA INSURED (HEALTHCARE FACILITIES REVENUE LOC) 5.50 05/01/2007 1,074,960
385,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY REVENUE PARADISE
VALLEY ESTATES (HEALTHCARE FACILITIES REVENUE LOC) 4.50 01/01/2007 399,318
490,000 CALIFORNIA HEALTH FACILITIES FINANCING CATHOLIC WEST SERIES A
(HEALTHCARE FACILITIES REVENUE LOC) 5.00 07/01/2006 509,326
360,000 CALIFORNIA HEALTH FACILITIES FINANCING CATHOLIC WEST SERIES A
(HEALTHCARE FACILITIES REVENUE LOC) 5.00 07/01/2006 371,714
1,000,000 CALIFORNIA HOUSING FINANCE AGENCY REVENUE HOME MORTGAGE-SERIES L
(HOUSING REVENUE LOC) 5.35 08/01/2017 1,051,740
1,000,000 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY SOLID WASTE DISPOSAL
REVENUE REPUBLIC SERVICES INCORPORATED PROJECT (INDUSTRIAL DEVELOPMENT
REVENUE LOC)+/- 2.85 12/01/2033 1,000,150
1,000,000 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY SOLID WASTE DISPOSAL
REVENUE WASTE MANAGEMENT PROJECT SERIES A REMARKETED (POLLUTION CONTROL
REVENUE LOC)+/- 5.13 07/01/2031 1,044,520
950,000 CALIFORNIA STATE CONSUMER POWER & CONSERVATIVE FINANCING AUTHORITY
SERIES A (OTHER REVENUE LOC) 5.00 03/01/2010 1,047,451
3,000,000 CALIFORNIA STATE DEPARTMENT OF WATER RESOURCES SERIES C-7 FSA INSURED
(WATER REVENUE LOC)+/-SS. 2.00 05/01/2022 3,000,000
600,000 CALIFORNIA STATE FACILITIES FINANCING AUTHORITY CASA COLINA PROJECT
(HEALTHCARE FACILITIES REVENUE LOC) 5.50 04/01/2013 640,164
3,000,000 CALIFORNIA STATE FSA-CR INSURED (PROPERTY TAX REVENUE LOC) 5.25 12/01/2012 3,396,300
3,000,000 CALIFORNIA STATE MBIA-IBC INSURED (PROPERTY TAX REVENUE LOC) 5.00 12/01/2011 3,349,950
1,250,000 CALIFORNIA STATE PUBLIC WORKS BOARD DEPARTMENT OF CORRECTIONS
SERIES C (LEASE REVENUE LOC) 5.25 11/01/2008 1,360,062
100,000 CALIFORNIA STATE PUBLIC WORKS BOARD OF TRUSTEES CALIFORNIA STATE
UNIVERSITY SERIES A (LEASE REVENUE LOC) 5.50 10/01/2010 112,210
19
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
CALIFORNIA (CONTINUED)
$ 1,140,000 CALIFORNIA STATE SERIES 27 MBIA INSURED (GENERAL OBLIGATION - STATES,
TERRITORIES LOC)^ 3.58% 09/01/2011 $ 900,030
745,000 CALIFORNIA STATE UNIVERSITY FRESNO ASSOCIATION INCORPORATED AUXILIARY
ORGANIZATION EVENT CENTER (COLLEGE AND UNIVERSITY REVENUE LOC) 5.00 07/01/2010 792,226
1,000,000 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY DISPOSAL
REPUBLIC SERVICES SERIES A (SOLID WASTE REVENUE LOC) 4.95 12/01/2012 1,059,080
1,000,000 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY IRVINE
APARTMENT COMMUNITIES SERIES A3 (HOUSING REVENUE LOC)+/- 5.10 05/15/2025 1,054,630
500,000 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY KAISER
PERMANENTE SERIES E (HEALTHCARE FACILITIES REVENUE LOC)+/- 4.70 11/01/2036 530,650
2,500,000 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY KAISER
PERMANENTE SERIES I (HEALTHCARE FACILITIES REVENUE LOC)+/- 3.45 04/01/2035 2,461,025
1,065,000 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY QUAIL RIDGE
APARTMENTS SERIES E1 (HOUSING REVENUE LOC) 4.25 07/01/2012 1,069,079
1,390,000 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY SHERMAN OAKS
PROJECT SERIES A AMBAC CA MTG INSURED (OTHER REVENUE LOC) 5.50 08/01/2011 1,558,746
1,000,000 CENTRAL VALLEY FINANCING AUTHORITY CARSON ICE GENERAL PROJECT MBIA
INSURED (ELECTRIC REVENUE LOC) 5.25 07/01/2010 1,094,780
240,000 CITY OF FREMONT CA ELECTION OF 2002 SERIES A MBIA INSURED
(PROPERTY TAX REVENUE LOC) 6.75 08/01/2010 287,443
610,000 CITY OF VERNON CA MALBURG GENERATING STATION PROJECT
(ELECTRIC REVENUE LOC)SS. 5.00 04/01/2012 661,667
2,035,000 CLOVIS CA UNIFIED SCHOOL DISTRICT ELECTION 2004 SERIES A FGIC INSURED
(GENERAL OBLIGATION - SCHOOL DISTRICTS LOC)^ 4.03 08/01/2015 1,292,937
1,000,000 CONTRA COSTA COUNTY CA MERRITHEW MEMORIAL HOSPITAL PROJECT MBIA
INSURED (LEASE REVENUE LOC) 5.25 11/01/2010 1,092,390
1,500,000 CONTRA COSTA COUNTY CA WATER DISTRICT SERIES K FSA INSURED
(WATER REVENUE LOC) 5.00 10/01/2009 1,664,070
235,000 DALY CITY CA HOUSING DEVELOPMENT FINANCE AGENCY SERIES A FRANCISCAN
ACQUISITION PROJECT (HOUSING REVENUE LOC) 5.00 12/15/2010 248,820
650,000 EAST BAY DELTA CA HOUSING & FINANCE AGENCY LEASE PURCHASE PROJECT
SERIES A MBIA CAHLIF (HOUSING REVENUE LOC) 4.25 06/01/2005 655,252
300,000 IRVINE CA IMPROVEMENT BOND ACT OF 1915 (SPECIAL TAX REVENUE LOC)+/-SS. 2.15 09/02/2022 300,000
500,000 LAKE ELSINORE CA SCHOOL FINANCING AUTHORITY SPECIAL TAX HORSETHIEF
CANYON (SPECIAL TAX REVENUE LOC) 5.35 09/01/2010 535,505
2,000,000 LOS ANGELES CA CONVENTION & EXHIBITION CENTER AUTHORITY LEASE REVENUE
SERIES D AMBAC INSURED (LEASE REVENUE LOC)+/-SS. 1.95 08/15/2021 2,000,000
230,000 LOS ANGELES CA DEPARTMENT OF WATER & POWER PREREFUNDED MBIA IBC BANK
OF NEW YORK INSURED ESCROWED TO MATURITY (ELECTRIC REVENUE LOC) 4.75 08/15/2011 232,955
300,000 LOS ANGELES CA WATER & POWER REVENUE SUBSERIES B-2 (WATER REVENUE
LOC)+/-SS. 2.15 07/01/2035 300,000
920,000 LOS ANGELES COUNTY CA PUBLIC WORKS FINANCING AUTHORITY SERIES A REGULAR
PARK & OPEN SPACE DISTRICT (SPECIAL TAX REVENUE LOC) 5.50 10/01/2010 999,663
1,000,000 METROPOLITAN WATER DISTRICT SOUTHERN CALIFORNIA WATERWORKS REVENUE
SERIES BJPM INSURED (WATER REVENUE LOC)+/-SS. 1.95 07/01/2027 1,000,000
1,000,000 MORENO VALLEY CA UNIFIED SCHOOL DISTRICT FSA INSURED (LEASE REVENUE LOC) 5.25 03/01/2011 1,025,010
1,000,000 NAPA VALLEJO CA WASTE MANAGEMENT AUTHORITY SOLID WASTE TRANSFER
FACILITY (SOLID WASTE REVENUE LOC) 5.10 02/15/2011 1,047,930
1,500,000 NEW HAVEN CA UNIFIED SCHOOL DISTRICT FSA INSURED
(PROPERTY TAX REVENUE LOC) 12.00 08/01/2013 2,425,725
1,400,000 NORTHERN CA TRANSMISSION REVENUE CALIFORNIA-OREGON TRANSMISSION PROJECT
SERIES A (POWER REVENUE LOC) 7.00 05/01/2013 1,709,890
20
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
CALIFORNIA (CONTINUED)
$ 1,000,000 OAKLAND CA JOINT POWERS FINANCING AUTHORITY OAKLAND CONVENTION
CENTERS AMBAC INSURED (LEASE REVENUE LOC) 5.00% 10/01/2005 $ 1,022,720
590,000 ONTARIO CA REDEVELOPMENT FINANCING AUTHORITY REVENUE ONTARIO
REDEVELOPMENT PROJECT NO.1 MBIA INSURED (TAX INCREMENTAL
REVENUE LOC) 6.90 08/01/2010 709,139
900,000 ORANGE COUNTY CA IMPROVEMENT BOND ACT OF 1915 SERIES A
(SPECIAL FACILITIES REVENUE LOC)+/-SS. 2.15 09/02/2033 900,000
1,000,000 ORANGE COUNTY CA SANITATION DISTRICT SERIES A DEXIA PUBLIC FINANCE
INSURED (SEWER REVENUE LOC)+/-SS. 2.15 08/01/2029 1,000,000
1,000,000 ORANGE COUNTY CA SERIES A MBIA INSURED (LEASE REVENUE LOC) 5.60 07/01/2009 1,067,250
100,000 PALO ALTO CA SERIES A (SEWER REVENUE LOC) 5.80 06/01/2005 101,576
100,000 PLEASANT VALLEY SCHOOL DISTRICT VENTURA COUNTY CA TIERRA LINDA
SCHOOL MBIA INSURED (LEASE REVENUE LOC) 5.10 08/01/2006 100,247
515,000 PORT OF OAKLAND CA SERIES H MBIA INSURED (HARBOR DEPARTMENT
REVENUE LOC) 5.00 11/01/2005 527,690
1,000,000 PORT OF OAKLAND CA SERIES K FGIC INSURED (HARBOR DEPARTMENT
REVENUE LOC) 5.50 11/01/2009 1,113,850
820,000 RIALTO CA REDEVELOPMENT AGENCY MERGED PROJECT AREA SERIES A
(TAX INCREMENTAL REVENUE LOC) 4.00 09/01/2005 830,078
825,000 RIALTO CA REDEVELOPMENT AGENCY MERGED PROJECT AREA SERIES A
(TAX INCREMENTAL REVENUE LOC) 4.50 09/01/2012 853,949
1,300,000 SACRAMENTO CA COGENERATION AUTHORITY PROCTER AND GAMBLE PROJECT
PREREFUNDED (ELECTRIC REVENUE LOC)SS. 6.50 07/01/2005 1,354,899
1,000,000 SACRAMENTO CA MUNICIPAL UTILITY DISTRICT ELECTRIC REVENUE SERIES S
(ELECTRIC PLANT REVENUE LOC) 5.00 11/15/2011 1,119,580
1,000,000 SACRAMENTO COUNTY CA SANITATION DISTRICT FINANCING AUTHORITY
REGIONAL COUNTY SERIES B-4 AMBAC INSURED (SEWER REVENUE LOC)+/-SS. 1.85 12/01/2039 1,000,000
985,000 SALINAS VALLEY CA SOLID WASTE AUTHORITY AMBAC INSURED (SOLID
WASTE REVENUE LOC) 5.00 08/01/2012 1,067,139
5,050,000 SAN DIEGO CA REDEVELOPMENT AGENCY TAX ALLOCATION CENTRE CITY
SERIES A XLCA INSURED (TAX INCREMENTAL REVENUE LOC) 5.00 09/01/2014 5,603,934
1,000,000 SAN DIEGO CA UNIFIED SCHOOL DISTRICT ELECTION 1998 SERIES D FGIC
INSURED (GENERAL OBLIGATION - SCHOOL DISTRICTS LOC) 5.25 07/01/2022 1,132,170
1,000,000 SAN DIEGO CA UNIFIED SCHOOL DISTRICT ELECTION 1998 SERIES D FGIC
INSURED (PROPERTY TAX REVENUE LOC) 5.25 07/01/2024 1,132,170
1,040,000 SAN DIEGO CA UNIFIED SCHOOL DISTRICT ELECTION 1998 SERIES E FSA
INSURED (COLLEGE AND UNIVERSITY REVENUE LOC) 5.25 07/01/2018 1,173,193
1,090,000 SAN FRANCISCO CITY & COUNTY CA AIRPORT COMMISSION SECOND SERIES
ISSUE 13B MBIA INSURED (AIRPORT REVENUE LOC) 8.00 05/01/2005 1,111,353
650,000 SAN FRANCISCO CITY & COUNTY CA AIRPORT COMMISSION SECOND SERIES
ISSUE 14A MBIA INSURED (AIRPORT REVENUE LOC) 8.00 05/01/2005 662,733
1,110,000 SAN FRANCISCO CITY & COUNTY CA AIRPORT COMMISSION SECOND SERIES ISSUE
14A MBIA INSURED (AIRPORT REVENUE LOC) 8.00 05/01/2007 1,199,078
680,000 SAN FRANCISCO CITY & COUNTY CA SERIES 1 FGIC INSURED (PROPERTY TAX
REVENUE LOC) 5.75 06/15/2007 738,392
270,000 SAN JACINTO CA COMMUNITY FACILITIES DISTRICT NO.2 SERIES A (SPECIAL TAX
REVENUE LOC) 3.85 09/01/2009 274,212
825,000 SANTA MONICA CA REDEVELOPMENT AGENCY OCEAN PARK REDEVELOPMENT PROJECT
(TAX INCREMENTAL REVENUE LOC) 4.70 07/01/2012 883,064
1,250,000 SOUTH ORANGE COUNTY CA PUBLIC FINANCING AUTHORITY FOOTHILL AREA
SERIES C FGIC INSURED (SALES TAX REVENUE LOC) 7.50 08/15/2006 1,354,650
21
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
CALIFORNIA (CONTINUED)
$ 300,000 STATE OF CALIFORNIA VETERANS BONDS SERIES AN (PROPERTY TAX REVENUE LOC) 9.00% 04/01/2009 $ 373,473
1,000,000 STATE OF CALIFORNIA XLCA-ICR INSURED (OTHER REVENUE LOC) 5.75 10/01/2010 1,141,930
1,310,000 SUNNYVALE CA AMBAC INSURED (SOLID WASTE REVENUE LOC) 5.00 10/01/2010 1,422,490
415,000 TRINITY COUNTY CA PUBLIC UTILITIES DISTRICT ELECTRIC DISTRIBUTION
FACILITIES AMBAC INSURED (LEASE REVENUE LOC) 5.00 04/01/2012 452,869
245,000 WHITTIER PUBLIC FINANCING AUTHORITY CA SERIES A GREENLEAF AVE WHITTIER
REDEVELOPMENT (LEASE REVENUE LOC) 5.00 11/01/2012 260,354
86,085,931
------------
PUERTO RICO - 0.97%
805,000 PUERTO RICO COMMONWEALTH PUBLIC IMPROVEMENTS ECON DEFEASED TO CALL
DATE MBIA INSURED (PROPERTY TAX REVENUE LOC) 5.75 07/01/2020 913,852
------------
TOTAL MUNICIPAL BONDS & NOTES (COST $85,290,546) 86,999,783
------------
SHARES
SHORT-TERM INVESTMENTS - 6.39%
3,289,900 FEDERATED CALIFORNIA MUNI CASH TRUST FUND 3,289,900
2,717,000 WELLS FARGO CALIFORNIA TAX-FREE MONEY MARKET TRUST~++ 2,717,000
6,006,900
------------
TOTAL SHORT-TERM INVESTMENTS (COST $6,006,900) 6,006,900
------------
TOTAL INVESTMENTS IN SECURITIES
(COST $91,297,446)* 98.95% $ 93,006,683
OTHER ASSETS AND LIABILITIES, NET 1.05 985,801
------ ------------
TOTAL NET ASSETS 100.00% $ 93,992,484
====== ============
+/- VARIABLE RATE SECURITIES.
SS. THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE
EFFECTIVE MATURITY.
^ ZERO COUPON/ STEPPED COUPON BOND. INTEREST RATE PRESENTED IS YIELD TO
MATURITY.
~ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY
PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND DOES NOT PAY AN
INVESTMENT ADVISORY FEE FOR SUCH INVESTMENTS.
++ SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $2,717,000.
* 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.
22
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
INVESTMENT COMPANIES - 2.71%
64,600 BLACKROCK CALIFORNIA INSURED MUNICIPAL TRUST $ 1,051,688
314,300 MUNIYIELD CALIFORNIA FUND 4,463,060
414,378 MUNIYIELD CALIFORNIA INSURED FUND II 5,523,659
30,000 PUTNAM CA INVESTMENT GRADE MUNICIPAL TRUST 402,000
100,000 VAN KAMPEN CA QUALITY MUNICIPAL TRUST 1,601,000
60,100 VAN KAMPEN CA VALUE MUNICIPAL TRUST 887,076
13,928,483
------------
TOTAL INVESTMENT COMPANIES (COST $12,996,148) 13,928,483
------------
PRINCIPAL INTEREST RATE MATURITY DATE
MUNICIPAL BONDS & NOTES - 96.39%
CALIFORNIA - 95.54%
$ 2,180,000 ABAG FINANCE AUTHORITY FOR NONPROFIT CORPORATION CA SCHOOL OF MECHANIC
ARTS (EDUCATIONAL FACILITIES REVENUE LOC) 5.30% 10/01/2032 2,241,694
6,700,000 ABAG FINANCE AUTHORITY FOR NONPROFIT CORPORATIONS CA CHANNING HOUSE
(NURSING HOME REVENUE LOC) 5.50 02/15/2029 6,772,293
2,000,000 ABAG FINANCIAL AUTHORITY FOR NONPROFIT CORPORATIONS CA REVENUE SAN
DIEGO HOSPITAL ASSOCIATION SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 6.13 08/15/2020 2,158,160
1,800,000 ABAG FINANCIAL AUTHORITY FOR NONPROFIT CORPORATIONS CA REVENUE SAN DIEGO
HOSPITAL ASSOCIATION SERIES C (HEALTHCARE FACILITIES REVENUE LOC) 5.38 03/01/2021 1,843,038
2,000,000 ABAG FINANCIAL AUTHORITY FOR NONPROFIT CORPORATIONS CA STANFORD
UNIVERSITY HOSPITAL (OTHER REVENUE LOC)SS. 5.50 11/01/2005 2,047,540
1,500,000 ABC UNIFIED SCHOOL DISTRICT CAPITAL APPRECIATION SERIES B (PROPERTY TAX
REVENUE LOC)^ 4.65 08/01/2018 803,385
1,500,000 ANAHEIM PUBLIC FINANCING AUTHORITY PUBLIC IMPROVEMENTS PROJECT SERIES C
(LEASE REVENUE LOC)^ 4.97 09/01/2022 630,120
1,750,000 ANTELOPE VALLEY CA UNIFIED HIGH SCHOOL DISTRICT ELECTION 2002 SERIES B
MBIA INSURED (PROPERTY TAX REVENUE LOC) 4.38 08/01/2023 1,748,845
4,345,000 AZTEC SHOPS LIMITED CA SAN DIEGO STATE UNIVERSITY (COLLEGE AND
UNIVERSITY REVENUE LOC) 5.88 09/01/2020 4,600,573
4,455,000 AZTEC SHOPS LIMITED CA SAN DIEGO STATE UNIVERSITY (COLLEGE AND
UNIVERSITY REVENUE LOC) 6.00 09/01/2031 4,635,472
200,000 BAY AREA CA TOLL AUTHORITY SAN FRANCISCO BAY AREA SERIES C AMBAC
INSURED (TOLL ROAD REVENUE LOC)+/-SS. 1.96 04/01/2025 200,000
3,190,000 BELMONT CA COMMUNITY FACILITIES SPECIAL TAX DISTRICT #2000-1 LIBRARY
PROJECT SERIES A AMBAC INSURED (TAX INCREMENTAL REVENUE LOC) 5.75 08/01/2030 3,743,561
5,000,000 BERKELEY CA UNIFIED SCHOOL DISTRICT ELECTION 2000 FSA INSURED
(PROPERTY TAX REVENUE LOC) 5.00 08/01/2027 5,171,900
2,000,000 BRENTWOOD CA INFRASTRUCTURE FINANCING AUTHORITY FSA INSURED
(LEASE REVENUE LOC) 4.75 09/02/2024 2,041,880
1,300,000 BURBANK GLENDALE PASADENA AIRPORT AUTHORITY CA (AIRPORT REVENUE LOC) 6.40 06/01/2010 1,304,277
1,195,000 BUTTE GLENN COMMUNITY COLLEGE SERIES A (PROPERTY TAX REVENUE LOC) 5.50 08/01/2019 1,342,200
1,500,000 CABRILLO CA UNIFIED SCHOOL DISTRICT SERIES A AMBAC INSURED
(PROPERTY TAX REVENUE LOC)^ 4.87 08/01/2021 675,390
2,000,000 CALIFORNIA EDUCATION FACILITIES AUTHORITY KECK GRADUATE INSTITUTE
(COLLEGE AND UNIVERSITY REVENUE LOC) 6.75 06/01/2030 2,170,080
1,000,000 CALIFORNIA EDUCATION FACILITIES AUTHORITY POOLED COLLEGE & UNIVERSITY
PROJECTS SERIES B (COLLEGE AND UNIVERSITY REVENUE LOC) 5.25 04/01/2024 1,010,520
23
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
CALIFORNIA (CONTINUED)
$ 1,500,000 CALIFORNIA EDUCATION FACILITIES AUTHORITY POOLED COLLEGE AND
UNIVERSITY PROJECTS SERIES B (COLLEGE AND UNIVERSITY REVENUE LOC) 5.13% 04/01/2017 $ 1,535,295
5,000,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY ADVENTIST HEALTH
SYSTEMS SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 5.00 03/01/2028 5,015,300
3,000,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY CASA COLINA
(HEALTHCARE FACILITIES REVENUE LOC) 6.00 04/01/2022 3,167,220
2,000,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY INSURED DE LAS
COMPANAS SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 5.75 07/01/2015 2,073,960
2,000,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY INSURED SCRIPPS
MEMORIAL HOSPITAL SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 6.40 10/01/2012 2,020,040
1,795,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY INSURED SCRIPPS
MEMORIAL HOSPITAL SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 6.25 10/01/2013 1,812,465
2,750,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY INSURED SUTTER HEALTH
SERIES C (HEALTHCARE FACILITIES REVENUE LOC) 5.13 08/15/2022 2,853,400
2,000,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY SCRIPPS RESEARCH
INSTITUTION SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 6.63 07/01/2014 2,045,940
315,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY SMALL FACILITY LOAN
SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 6.75 03/01/2020 316,030
1,000,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY ST. FRANCIS MEMORIAL
HOSPITAL SERIES C (HEALTHCARE FACILITIES REVENUE LOC) 5.88 11/01/2023 1,202,520
6,000,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY SUTTER HEALTH SERIES A
(HEALTHCARE FACILITIES REVENUE LOC) 6.25 08/15/2031 6,733,680
2,000,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY THE EPISCOPAL HOME
(HEALTHCARE FACILITIES REVENUE LOC) 5.25 02/01/2021 2,098,700
520,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY VALLEYCARE PROJECT
SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 6.50 05/01/2005 521,789
500,000 CALIFORNIA HOUSING FINANCE AGENCY MULTI UNIT RENTAL HOUSING SERIES B II
(HOUSING REVENUE LOC) 6.70 08/01/2015 500,745
1,000,000 CALIFORNIA HOUSING FINANCING AGENCY HOME MORTGAGE SERIES G FSA INSURED
(HOUSING REVENUE LOC)+/-SS. 1.90 08/01/2031 1,000,000
5,000,000 CALIFORNIA INFRASTRUCTURE & ECONOMIC DEVELOPMENT BANK (LEASE REVENUE LOC) 5.50 06/01/2025 5,460,900
6,850,000 CALIFORNIA INFRASTRUCTURE & ECONOMIC DEVELOPMENT BANK J DAVID GLADSTONE
INSTITUTE PROJECT (HEALTHCARE FACILITIES REVENUE LOC) 5.25 10/01/2034 6,950,010
1,275,000 CALIFORNIA INFRASTRUCTURE & ECONOMIC DEVELOPMENT BANK SCRIPPS RESEARCH
INSTITUTE SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 5.75 07/01/2030 1,349,192
1,425,000 CALIFORNIA PUBLIC WORKS BOARD DEPARTMENT OF GENERAL SERVICES TEALE DATA
CENTER SERIES B (LEASE REVENUE LOC) 5.25 03/01/2019 1,543,261
350,000 CALIFORNIA RURAL HOME MORTGAGE FINANCE AUTHORITY SERIES B
(HOUSING REVENUE LOC) 6.25 12/01/2031 354,109
405,000 CALIFORNIA RURAL HOME MORTGAGE FINANCE AUTHORITY SERIES B-5
(HOUSING REVENUE LOC)+/- 6.35 12/01/2029 409,382
1,090,000 CALIFORNIA SPECIAL DISTRICT ASSOCIATION FINANCE CORPORATION SERIES MM
(LEASE REVENUE LOC) 5.50 06/01/2021 1,130,755
5,000,000 CALIFORNIA STATE AMBAC TCRS BANK OF NEW YORK (GENERAL OBLIGATION -
STATES, TERRITORIES LOC) 5.25 12/01/2024 5,275,000
3,000,000 CALIFORNIA STATE DEPARTMENT OF VETERAN AFFAIRS SERIES A AMBAC INSURED
(OTHER REVENUE LOC) 5.30 12/01/2021 3,201,150
5,000,000 CALIFORNIA STATE DEPARTMENT OF WATER RESOURCES CENTRAL VALLEY PROJECT
SERIES AC MBIA INSURED (WATER REVENUE LOC) 5.00 12/01/2027 5,214,300
600,000 CALIFORNIA STATE DEPARTMENT OF WATER RESOURCES SERIES B-2
(ELECTRIC REVENUE LOC)+/-SS. 2.25 05/01/2022 600,000
24
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
CALIFORNIA (CONTINUED)
$ 8,000,000 CALIFORNIA STATE DEPARTMENT OF WATER RESOURCES SERIES C-7 FSA INSURED
(WATER REVENUE LOC)+/-SS. 2.00% 05/01/2022 $ 8,000,000
5,000,000 CALIFORNIA STATE DEPARTMENT OF WATER RESOURCES SERIES J-2
(WATER REVENUE LOC) 6.00 12/01/2007 5,529,650
1,000,000 CALIFORNIA STATE DEPARTMENT OF WATER RESOURCES POWER SUPPLY REVENUE
SERIES B-6 (WATER & WASTEWATER AUTHORITY REVENUE LOC)+/-SS. 2.15 05/01/2022 1,000,000
4,000,000 CALIFORNIA STATE SERIES A-8 CITIBANK INSURED
(PROPERTY TAX REVENUE LOC)+/-SS. 1.97 05/01/2034 4,000,000
3,500,000 CALIFORNIA STATE UNIVERSITY FRESNO ASSOCIATION INCORPORATED SR-AUX
ORGANIZATION EVENT CENTER (COLLEGE AND UNIVERSITY REVENUE LOC) 6.00 07/01/2022 3,700,340
7,830,000 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY CATHOLIC
HEALTHCARE WEST (HEALTHCARE FACILITIES REVENUE LOC) 6.50 07/01/2020 8,740,003
3,070,000 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY CEDARS SINAI
MEDICAL CENTER (HEALTHCARE FACILITIES REVENUE LOC) 6.50 08/01/2012 3,445,860
2,000,000 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY CHILDRENS
HOSPITAL LOS ANGELES MBIA IBC (HEALTHCARE FACILITIES REVENUE LOC) 5.25 08/15/2029 2,108,220
2,000,000 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY CHILDRENS
HOSPITAL LOS ANGELES MBIA (HEALTHCARE FACILITIES REVENUE LOC) 5.25 08/15/2029 2,108,220
2,010,000 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY PIONEER PARK
PROJECT SERIES T (HOUSING REVENUE LOC) 6.10 12/20/2035 2,113,656
4,210,000 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY SERIES B
(WATER & WASTEWATER AUTHORITY REVENUE LOC) 5.25 10/01/2027 4,464,158
5,000,000 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY THE INTERNEXT
GROUP (HEALTHCARE FACILITIES REVENUE LOC) 5.38 04/01/2017 5,121,550
1,000,000 CAMPBELL CA UNION HIGH SCHOOL DISTRICT ELECTION OF 1999 FGIC INSURED
(PROPERTY TAX REVENUE LOC) 5.00 08/01/2032 1,027,640
200,000 CAPITOL AREA DEVELOPMENT AUTHORITY SERIES A (LEASE REVENUE LOC) 6.50 04/01/2012 200,704
1,080,000 CARSON CA REDEVELOPMENT AGENCY TAX ALLOCATION SERIES A
(TAX INCREMENTAL REVENUE LOC) 5.25 10/01/2019 1,198,238
1,140,000 CARSON CA REDEVELOPMENT AGENCY TAX ALLOCATION SERIES A
(TAX INCREMENTAL REVENUE LOC) 5.25 10/01/2020 1,260,327
5,000,000 CENTER UNIFIED SCHOOL DISTRICT CA CAPITAL APPRECIATION SERIES C
(PROPERTY TAX REVENUE LOC)^ 4.87 09/01/2021 2,242,300
2,645,000 CENTRAL VALLEY SCHOOL DISTRICT FINANCING AUTHORITY SERIES A
(EDUCATIONAL FACILITIES REVENUE LOC) 6.45 02/01/2018 3,244,595
3,000,000 CHICO PUBLIC FINANCING AUTHORITY TAX ALLOCATION MERGED REDEVELOPMENT
AREA PROJECT (TAX INCREMENTAL REVENUE LOC) 5.13 04/01/2021 3,190,980
1,800,000 CHINO BASIN REGIONAL FINANCING AUTHORITY CA MUNICIPAL WATER DISTRICT
SEWER SYSTEM PROJECT (SEWER REVENUE LOC) 6.00 08/01/2016 1,841,580
3,440,000 CLOVIS CA UNIFIED SCHOOL DISTRICT ELECTION 2001 SERIES B FGIC INSURED
(PROPERTY TAX REVENUE LOC)^ 5.07 08/01/2024 1,290,413
1,000,000 COLTON JOINT UNIFIED SCHOOL DISTRICT SERIES A (PROPERTY TAX REVENUE LOC) 5.38 08/01/2017 1,114,940
885,000 CONTRA COSTA COUNTY CA PUBLIC FINANCING AUTHORITY PLEASANT HILL
(TAX ALLOCATION REVENUE LOC)SS. 5.25 08/01/2028 996,368
4,615,000 CONTRA COSTA COUNTY CA PUBLIC FINANCING AUTHORITY PLEASANT HILL
(TAX ALLOCATION REVENUE LOC) 5.25 08/01/2028 4,696,962
270,000 CONTRA COSTA COUNTY CA GNMA (HOUSING REVENUE LOC) 7.75 05/01/2022 363,393
3,000,000 CONTRA COSTA TRANSPORTATION AUTHORITY CA SERIES A
(SALES TAX REVENUE LOC)SS. 5.50 03/01/2005 3,017,640
2,755,000 CONTRA COSTA TRANSPORTATION AUTHORITY CA SERIES A (SALES TAX REVENUE LOC) 6.50 03/01/2009 3,089,237
805,000 COUNTY OF MERCED CA REFUNDED CONSTRUCTION (LEASE REVENUE LOC) 6.00 10/01/2012 827,902
1,035,000 DALY CITY HOUSING DEVELOPMENT FINANCE AGENCY CA FRANCISCAN ACQUISITION
PROJECT SERIES A (HOUSING REVENUE LOC) 5.65 12/15/2019 1,114,560
25
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
CALIFORNIA (CONTINUED)
$ 1,095,000 DINUBA CA UNIFORM SCHOOL DISTRICT FINANCING PROJECT AMBAC INSURED
(LEASE REVENUE LOC) 4.50% 02/01/2024 $ 1,096,577
5,250,000 DUARTE CA SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 5.25 04/01/2024 5,268,427
2,000,000 DUARTE CA SERIES A ACA (HEALTHCARE FACILITIES REVENUE LOC) 5.25 04/01/2019 2,076,200
4,000,000 DUARTE REDEVELOPMENT AGENCY CA MERGED REDEVELOPMENT PROJECT
(TAX INCREMENTAL REVENUE LOC)^ 5.34 12/01/2016 2,133,600
3,300,000 EAST PALO ALTO REDEVELOPMENT AGENCY TAX ALLOCATION UNIVERSITY CIRCLE
GATEWAY 101 CORRIDOR PROJECT (TAX INCREMENTAL REVENUE LOC) 6.63 10/01/2029 3,533,772
4,430,000 EAST SIDE UNION HIGH SCHOOL DISTRICT SANTA CLARA COUNTY CA SERIES A
(PROPERTY TAX REVENUE LOC)^ 5.46 09/01/2018 2,263,819
5,185,000 EAST SIDE UNION HIGH SCHOOL DISTRICT SANTA CLARA COUNTY CA SERIES A
(PROPERTY TAX REVENUE LOC)^ 5.09 09/01/2019 2,481,437
5,420,000 EAST SIDE UNION HIGH SCHOOL DISTRICT SANTA CLARA COUNTY CA SERIES A
(PROPERTY TAX REVENUE LOC)^ 5.18 09/01/2020 2,430,491
2,500,000 EL MONTE CA DEPARTMENT OF PUBLIC SERVICES FACILITIES PROJECT PHASE II
(LEASE REVENUE LOC) 5.25 01/01/2034 2,594,975
500,000 EMERYVILLE PUBLIC FINANCING AUTHORITY CA ASSESSMENT DISTRIBUTION
REFINANCING (SPECIAL FACILITIES REVENUE LOC) 5.75 09/02/2014 510,505
1,750,000 EMERYVILLE PUBLIC FINANCING AUTHORITY CA ASSESSMENT DISTRIBUTION
REFINANCING (SPECIAL FACILITIES REVENUE LOC) 5.90 09/02/2021 1,785,822
1,500,000 ENCINITAS UNION SCHOOL DISTRICT CA CAPITAL APPRECIATION
(PROPERTY TAX REVENUE LOC)^ 4.47 08/01/2018 803,385
2,125,000 ESCONDIDO JOINT POWERS FINANCING AUTHORITY CA CENTER FOR THE ARTS
PROJECT (LEASE REVENUE LOC) 6.00 09/01/2018 2,220,242
2,000,000 ESCONDIDO JOINT POWERS FINANCING AUTHORITY CA CIVIC CENTER PROJECT
SERIES B (LEASE REVENUE LOC) 6.13 09/01/2011 2,283,380
1,595,000 FOLSOM CORDOVA UNION SCHOOL DISTRICT FACILITIES IMPROVEMENT DISTRICT
NO.2 CAPITAL APPRECIATION SERIES A (PROPERTY TAX REVENUE LOC)^ 4.73 10/01/2019 800,371
3,905,000 FONTANA REDEVELOPEMENT AGENCY CA TAX ALLOCATION SIERRA CORRIDOR
COMMERCIAL REDEVELOPEMENT PROJECT (TAX ALLOCATION REVENUE LOC) 5.50 09/01/2034 4,008,639
1,285,000 FONTANA REDEVELOPMENT AGENCY CA JURUPA HILLS REDEVELOPMENT PROJECT
SERIES A (TAX INCREMENTAL REVENUE LOC) 5.50 10/01/2017 1,366,713
5,040,000 FONTANA REDEVELOPMENT AGENCY CA JURUPA HILLS REDEVELOPMENT
PROJECT SERIES A (TAX INCREMENTAL REVENUE LOC) 5.50 10/01/2027 5,192,158
4,785,000 FONTANA REDEVELOPMENT AGENCY CA JURUPA HILLS REDEVELOPMENT PROJECT
SERIES A (TAX INCREMENTAL REVENUE LOC) 5.60 10/01/2027 4,987,836
3,000,000 FONTANA UNIFIED SCHOOL DISTRICT CA SERIES C
(PROPERTY TAX REVENUE LOC)SS. 6.15 05/01/2020 3,327,390
1,000,000 FRESNO CA STREET IMPROVEMENT PROJECT (LEASE REVENUE LOC) 6.63 12/01/2011 1,016,250
1,250,000 FRESNO COUNTY FINANCING AUTHORITY CA AMERICAN AVENUE LANDFILL PROJECT
(SPECIAL FACILITIES REVENUE LOC) 5.75 05/15/2014 1,291,587
1,550,000 GILROY CA BONAFONTE GARDENS PARK PROJECT (RECREATIONAL FACILITIES
REVENUE LOC) 8.15 11/01/2015 1,162,996
1,030,000 GLENDALE CA UNIFORM SCHOOL DISTRICT SERIES G FSA INSURED (PROPERTY
TAX REVENUE LOC) 4.50 09/01/2021 1,046,913
2,420,000 GOLDEN WEST SCHOOLS FINANCING AUTHORITY CA CAPITAL APPRECIATION
SERIES A (OTHER REVENUE LOC)^ 4.34 08/01/2015 1,535,950
2,500,000 HAWAIIAN GARDENS REDEVELOPMENT AGENCY CA (TAX INCREMENTAL REVENUE LOC) 6.00 12/01/2013 2,776,475
4,500,000 HAWTHORNE SCHOOL DISTRICT CA (LEASE REVENUE LOC)^ 5.38 11/01/2025 4,743,900
1,340,000 HOLLISTER CA REDEVELOPMENT AGENCY TAX ALLOCATION COMMUNITY
DEVELOPMENT PROJECT (TAX ALLOCATION REVENUE LOC) 5.25 10/01/2019 1,470,851
26
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
CALIFORNIA (CONTINUED)
$ 3,750,000 INDUSTRY URBAN DEVELOPMENT AGENCY CA TAX ALLOCATION CIVIC RECREATION
SERIES A (TAX INCREMENTAL REVENUE LOC) 5.00% 05/01/2017 $ 3,975,375
1,555,000 INGLEWOOD CA REDEVELOPMENT AGENCY SERIES A MERGED REDEVELOPMENT
PROJECT (TAX INCREMENTAL REVENUE LOC) 5.25 05/01/2017 1,755,642
2,300,000 IRVINE RANCH CA WATER DISTRICT BANK OF AMERICA INSURED
(WATER & SEWER REVENUE LOC)+/-SS. 2.15 04/01/2033 2,300,000
270,000 JAMUL-DULZURA UNION SCHOOL DISTRICT SERIES C (PROPERTY TAX REVENUE LOC) 6.40 08/01/2016 270,840
2,000,000 KERN HIGH SCHOOL DISTRICT SERIES D (PROPERTY TAX REVENUE LOC) 5.60 08/01/2012 2,025,020
2,000,000 LAGUNA SALADA UNION SCHOOL DISTRICT CA CAPITAL APPRECIATION SERIES B
(PROPERTY TAX REVENUE LOC)^ 4.79 08/01/2020 956,480
3,010,000 LAKE ELSINORE CA SCHOOL FINANCING AUTHORITY REVENUE SPECIAL TAX
HORSETHIEF CANYON (SPECIAL TAX REVENUE LOC) 5.63 09/01/2016 3,177,386
4,000,000 LAKE ELSINORE PUBLIC FINANCING AUTHORITY CA SERIES A
(TAX INCREMENTAL REVENUE LOC) 5.50 09/01/2030 4,055,960
1,310,000 LANCASTER CA FINANCING AUTHORITY TAX ALLOCATION REVENUE PROJECT
NUMBER 5 AND 6 REDEVELOPMENT PROJECTS (TAX REVENUE LOC) 5.25 02/01/2018 1,476,920
2,965,000 LANCASTER CA SCHOOL DISTRICT (GENERAL OBLIGATION -
SCHOOL DISTRICTS LOC)^ 5.07 08/01/2024 1,112,231
3,000,000 LONG BEACH FINANCING AUTHORITY CA (LEASE REVENUE LOC) 6.00 11/01/2008 3,391,500
1,500,000 LONG BEACH FINANCING AUTHORITY CA (LEASE REVENUE LOC) 6.00 11/01/2017 1,772,355
2,900,000 LOS ALTOS SCHOOL DISTRICT CA ELECTION OF 1998 SERIES B CAPITAL
APPRECIATION (PROPERTY TAX REVENUE LOC)^ 5.29 08/01/2021 1,220,726
400,000 LOS ANGELES CA WATER & POWER REVENUE SUBSERIES B-2
(WATER REVENUE LOC)+/-SS. 2.15 07/01/2035 400,000
1,025,000 LOS ANGELES COUNTY CA CAPITAL APPRECIATION AMBAC INSURED
(LEASE REVENUE LOC)^ 4.79 09/01/2020 488,269
2,000,000 LOS ANGELES COUNTY CA (LEASE REVENUE LOC) 6.00 12/01/2015 2,410,380
2,700,000 LOS ANGELES COUNTY CAPITAL ASSET LEASING CORPORATION CA SERIES B
(LEASE REVENUE LOC) 6.00 12/01/2014 3,239,298
2,900,000 LOS ANGELES DEPARTMENT OF AIRPORTS CA SERIES A (AIRPORT REVENUE LOC)SS. 5.50 05/15/2008 2,966,642
2,750,000 LOS ANGELES DEPARTMENT OF WATER & POWER CA REFUNDED BALANCE SECOND
ISSUE MBIA (ELECTRIC REVENUE LOC)SS. 5.00 10/15/2017 2,784,402
4,745,000 LOS ANGELES HARBOR DEPARTMENT CA SERIES B (AIRPORT REVENUE LOC) 5.38 11/01/2015 4,945,951
2,465,000 LOS ANGELES HARBOR DEPARTMENT CA SERIES B (AIRPORT REVENUE LOC) 5.38 11/01/2023 2,576,122
2,200,000 LOS ANGELES UNIFIED SCHOOL DISTRICT CA MULTIPLE PROPERTY PROJECTS
SERIES A (LEASE REVENUE LOC) 5.50 10/01/2010 2,359,500
2,500,000 MERCED CA UNION HIGH SCHOOL DISTRICT CAPITAL APPRECIATION SERIES A
FGIC INSURED (PROPERTY TAX REVENUE LOC)^ 4.99 08/01/2023 1,000,350
2,555,000 MERCED CA UNION HIGH SCHOOL DISTRICT CAPITAL APPRECIATION SERIES A
FGIC INSURED (PROPERTY TAX REVENUE LOC)^ 5.07 08/01/2024 958,432
2,235,000 MERCED CA UNION HIGH SCHOOL DISTRICT CAPITAL APPRECIATION SERIES A
(PROPERTY TAX REVENUE LOC)^ 4.65 08/01/2018 1,197,044
1,055,000 MERCED CA UNION HIGH SCHOOL DISTRICT CAPITAL APPRECIATION SERIES A
(PROPERTY TAX REVENUE LOC)^ 4.87 08/01/2021 475,024
845,000 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT CA PROMISSORY NOTES
(PROPERTY TAX REVENUE LOC) 7.00 09/01/2014 859,940
4,375,000 MONROVIA REDEVELOPMENT AGENCY CA CENTRAL REDEVELOPMENT PROJECT AREA 1
(TAX INCREMENTAL REVENUE LOC) 5.00 05/01/2021 4,640,825
1,260,000 MOUNTAIN VIEW LOS ALTOS UNION HIGH SCHOOL DISTRICT CA SERIES D
(PROPERTY TAX REVENUE LOC)^ 4.73 08/01/2019 637,220
1,080,000 NAPA VALLEJO CA WASTE MANAGEMENT AUTHORITY SOLID WASTE TRANSFER
FACILITY (SOLID WASTE REVENUE LOC) 5.50 02/15/2013 1,133,752
720,000 NATOMAS UNIFIED SCHOOL DISTRICT CA SERIES A (PROPERTY TAX REVENUE LOC) 5.75 09/01/2012 736,531
27
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
CALIFORNIA (CONTINUED)
$ 5,000,000 NORTHERN CA TRANSMISSION REVENUE CALIFORNIA-OREGON TRANSMISSION
PROJECT SERIES A (POWER REVENUE LOC) 7.00% 05/01/2013 $ 6,106,750
1,465,000 OAKLAND CA (PROPERTY TAX REVENUE LOC) 6.00 06/15/2012 1,469,556
1,305,000 OCEANSIDE CA COMMUNITY DEVELOPEMENT TAX ALLOCATION DOWNTOWN R
EDEVELOPEMENT PROJECT XLCA INSURED (TAX ALLOCATION REVENUE LOC) 4.50 09/01/2020 1,333,697
1,500,000 ONTARIO REDEVELOPMENT FINANCING AUTHORITY CA ONTARIO REDEVELOPMENT
PROJECT NO.1 (SPECIAL TAX REVENUE LOC) 6.00 08/01/2015 1,527,975
1,300,000 ORANGE COUNTY CA SANITATION DISTRICT SERIES A DEXIA PUBLIC FINANCE
INSURED (SEWER REVENUE LOC)+/-SS. 2.15 08/01/2029 1,300,000
2,160,000 ORCHARD SCHOOL DISTRICT CA CAPITAL APPRECIATION ELECTION OF 2000
SERIES A (PROPERTY TAX REVENUE LOC)^ 5.07 08/01/2024 810,259
2,000,000 OXNARD CA FINANCING AUTHORITY AMBAC INSURED
(WATER & SEWER REVENUE LOC)+/-SS. 2.00 06/01/2034 2,000,000
1,000,000 PARAMOUNT UNIFIED SCHOOL DISTRICT CA CAPITAL APPRECIATION SERIES A
(PROPERTY TAX REVENUE LOC)^ 4.87 09/01/2021 448,460
1,000,000 PARAMOUNT UNIFIED SCHOOL DISTRICT CA CAPITAL APPRECIATION SERIES A
(PROPERTY TAX REVENUE LOC)^ 4.93 09/01/2022 422,990
1,915,000 PASADENA CA OLD PASADENA PARKING FACILITIES PROJECT (LEASE REVENUE LOC) 6.25 01/01/2018 2,245,835
1,030,000 PERRIS PUBLIC FINANCING AUTHORITY CA TAX ALLOCATION SERIES A
(TAX INCREMENTAL REVENUE LOC) 5.25 10/01/2020 1,132,341
2,045,000 PERRIS PUBLIC FINANCING AUTHORITY CA TAX ALLOCATION SERIES A
(TAX INCREMENTAL REVENUE LOC) 5.75 10/01/2031 2,150,972
2,000,000 PICO RIVERA CA WATER AUTHORITY REVENUE WATER SYSTEM PROJECT SERIES A
(WATER REVENUE LOC) 5.50 05/01/2019 2,289,580
7,000,000 PICO RIVERA CA WATER AUTHORITY SERIES A (WATER REVENUE LOC) 6.25 12/01/2032 7,148,120
2,515,000 PLACENTIA REDEVELOPMENT AUTHORITY CA SERIES A
(TAX INCREMENTAL REVENUE LOC) 5.85 08/01/2032 2,657,550
2,680,000 PONOMA UNIFIED SCHOOL DISTRICT CA SERIES A (PROPERTY TAX REVENUE LOC) 6.55 08/01/2029 3,444,524
2,000,000 PORT OF OAKLAND CA SERIES L (HARBOR DEPARTMENT REVENUE LOC) 5.50 11/01/2020 2,193,600
5,000,000 PORT OF OAKLAND CA SERIES L (HARBOR DEPARTMENT REVENUE LOC) 5.00 11/01/2021 5,189,950
3,600,000 PORT REDWOOD CITY CA (HARBOR DEPARTMENT REVENUE LOC) 5.13 06/01/2030 3,468,636
1,000,000 REDLANDS CA REDEVELOPMENT AGENCY TAX ALLOCATION REVENUE REDEVELOPMENT
PROJECT AREA CLASS A (TAX REVENUE LOC) 4.63 08/01/2022 1,015,910
1,345,000 RIALTO REDEVELOPMENT AGENCY CA MERGED PROJECT AREA SERIES A
(TAX INCREMENTAL REVENUE LOC) 4.88 09/01/2018 1,371,201
1,000,000 RIALTO REDEVELOPMENT AGENCY CA MERGED PROJECT AREA SERIES A
(TAX INCREMENTAL REVENUE LOC) 5.00 09/01/2021 1,022,290
3,115,000 RICHMOND CA WASTEWATER REVENUE (SEWER REVENUE LOC) 5.80 08/01/2018 3,523,127
1,100,000 RICHMOND JOINT POWERS FINANCING AUTHORITY CA LEASE & GAS TAX SERIES A
(LEASE REVENUE LOC) 5.25 05/15/2013 1,102,684
8,595,000 RIVERSIDE COUNTY ASSET LEASING CORPORATION CA RIVERSIDE COUNTY
HOSPITAL PROJECT (HEALTHCARE FACILITIES REVENUE LOC)^ 5.21 06/01/2026 2,856,634
15,000 RIVERSIDE COUNTY CA GNMA SERIES A (HOUSING REVENUE LOC) 6.85 10/01/2016 15,449
4,560,000 RIVERSIDE COUNTY PUBLIC FINANCING AUTHORITY CA REDEVELOPMENT
PROJECTS SERIES A (TAX ALLOCATION REVENUE LOC) 5.50 10/01/2022 4,671,127
3,990,000 ROCKLIN REDEVELOPMENT AGENCY CA ROCKLIN REDEVELOPMENT PROJECT SERIES A
(TAX INCREMENTAL REVENUE LOC) 5.50 09/01/2031 4,140,543
5,000 SACRAMENTO CITY FINANCING AUTHORITY CA UNREFUNDED BALANCE
(OTHER REVENUE LOC) 6.70 11/01/2011 5,018
2,085,000 SACRAMENTO COUNTY CA SANITATION DISTRICT FINANCING AUTHORITY
(SEWER REVENUE LOC)SS. 4.75 12/01/2023 2,117,693
28
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
CALIFORNIA (CONTINUED)
$ 3,000,000 SACRAMENTO COUNTY CA SANITATION DISTRICT FINANCING AUTHORITY REGIONAL
COUNTY SERIES B-4 AMBAC INSURED (SEWER REVENUE LOC)+/-SS. 1.85% 12/01/2039 $ 3,000,000
2,870,000 SACRAMENTO COUNTY HOUSING AUTHORITY VERANDAS APARTMENTS PROJECT
SERIES H (HOUSING REVENUE LOC) 5.70 03/01/2034 2,973,119
300,000 SACRAMENTO MUNICIPAL UTILITY DISTRICT CA ESCROWED TO MATURITY SERIES C
(ELECTRIC REVENUE LOC) 5.75 11/15/2008 306,744
2,500,000 SACRAMENTO MUNICIPAL UTILITY DISTRICT SERIES A (ELECTRIC REVENUE LOC) 6.25 08/15/2010 2,871,700
1,000,000 SAN DIEGO CA PUBLIC FACILITIES FINANCE AUTHORITY SERIES A
(LEASE REVENUE LOC) 5.25 05/15/2020 1,007,830
3,200,000 SAN DIEGO COUNTY CA BURNHAM INSTITUTE PROJECT (LEASE REVENUE LOC) 6.25 09/01/2029 3,319,488
4,500,000 SAN DIEGO COUNTY REGIONAL TRANSPORTATION COMMISSION CA SERIES A
(SALES TAX REVENUE LOC) 6.00 04/01/2008 4,885,200
3,910,000 SAN DIEGO REDEVELOPMENT AGENCY CA CAPITAL APPRECIATION TAX ALLOCATION
CENTRE (TAX INCREMENTAL REVENUE LOC)^ 5.03 09/01/2023 1,546,835
1,060,000 SAN DIEGO REDEVELOPMENT AGENCY CA CENTRE CITY SUB PARKING SERIES B
(PARKING FACILITIES REVENUE LOC) 5.30 09/01/2020 1,094,927
1,000,000 SAN ELIJO CA JOINT POWERS AUTHORITY REVENUE SAN ELIJO WASTEWATER
FACILITIES FSA INSURED (SEWER REVENUE LOC) 5.00 03/01/2020 1,069,030
2,500,000 SAN FRANCISCO CITY & COUNTY AIRPORT COMMISSION CA SECOND SERIES 27B
(AIRPORT REVENUE LOC) 5.00 05/01/2019 2,652,600
2,390,000 SAN FRANCISCO CITY & COUNTY AIRPORT COMMISSION SECOND SERIES ISSUE 15A
(AIRPORT REVENUE LOC) 5.00 05/01/2017 2,471,069
5,055,000 SAN JOAQUIN HILLS CA TRANSPORTATION CORRIDOR AGENCY
(TOLL ROAD REVENUE LOC)^ 4.76 01/01/2023 2,167,584
6,000,000 SAN JOAQUIN HILLS CA TRANSPORTATION CORRIDOR AGENCY TOLL ROAD REVENUE
(TOLL ROAD REVENUE LOC)^ 4.84 01/01/2024 2,418,420
5,000,000 SAN JOAQUIN HILLS CA TRANSPORTATION CORRIDOR AGENCY TOLL ROAD REVENUE
(TOLL ROAD REVENUE LOC)^ 4.90 01/01/2025 1,898,850
5,510,000 SAN JOAQUIN HILLS CA TRANSPORTATION CORRIDOR AGENCY TOLL ROAD
SENIOR LIEN - CABS (TOLL ROAD REVENUE LOC)^ 4.57 01/01/2019 2,926,967
4,000,000 SAN JOAQUIN HILLS TRANSPORTATION CORRIDOR AGENCY CA SENIOR LIEN
(TOLL ROAD REVENUE LOC)SS. 7.55 01/01/2008 4,696,760
2,300,000 SAN JOSE CA CAPITAL ACCUMULATOR (HOUSING REVENUE LOC)^ 4.38 04/01/2016 1,412,660
3,300,000 SAN JOSE CA EL PARADOR APARTMENTS PROJECT SERIES A (HOUSING REVENUE LOC) 6.20 01/01/2041 3,464,439
1,205,000 SAN JOSE UNIFIED SCHOOL DISTRICT (LEASE REVENUE LOC)^ 4.88 01/01/2021 557,132
1,170,000 SAN JUAN UNIFIED SCHOOL DISTRICT (GENERAL OBLIGATION -
SCHOOL DISTRICTS LOC) 5.25 08/01/2018 1,287,211
5,020,000 SAN MARCOS CA PUBLIC FINANCING AUTHORITY REVENUE SERIES A
(GENERAL OBLIGATION - STATES, TERRITORIES LOC) 6.25 09/02/2022 6,068,778
1,310,000 SAN MARCOS CA PUBLIC FACILITIES AUTHORITY ESCROWED TO MATURITY
(STATE & LOCAL GOVERNMENTS LOC)^ 4.16 01/01/2015 867,875
1,000,000 SAN MATEO REDEVELOPMENT AGENCY (TAX INCREMENTAL REVENUE LOC) 5.40 08/01/2018 1,066,820
3,365,000 SAN RAFAEL CA CITY HIGH SCHOOL DISTRICT ELECTION OF 2002 SERIES B
FSA INSURED (GENERAL OBLIGATION - SCHOOL DISTRICTS LOC)^ 4.73 08/01/2019 1,701,781
29
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
CALIFORNIA (CONTINUED)
$ 3,000,000 SANTA ANA CA FINANCING AUTHORITY INNER CITY COMMUTER SERIES C
(LEASE REVENUE LOC) 5.60% 09/01/2019 $ 3,184,230
3,000,000 SANTA CLARA COUNTY HOUSING AUTHORITY CA BLOSSOM RIVER APARTMENTS
SERIES A (HOUSING REVENUE LOC) 6.50 09/01/2039 2,907,450
4,284,000 SANTA CLARA COUNTY HOUSING AUTHORITY CA THE WILLOWS APARTMENTS SERIES A
(HOUSING REVENUE LOC) 6.40 06/01/2030 3,933,012
1,750,000 SIMI VALLEY UNIFIED SCHOOL DISTRICT CAPITAL IMPROVEMENT PROJECTS
(LEASE REVENUE LOC) 5.25 08/01/2022 1,976,782
1,000,000 SONOMA VALLEY UNIFIED SCHOOL DISTRICT (PROPERTY TAX REVENUE LOC) 6.00 07/15/2021 1,066,150
1,765,000 SOUTH GATE PUBLIC FINANCING AUTHORITY CA SOUTH GATE REDEVELOPMENT
PROJECT NO.1 (TAX INCREMENTAL REVENUE LOC) 5.25 09/01/2019 1,923,144
25,000 SOUTHERN CALIFORNIA HOME FINANCING AUTHORITY GNMA & FNMA SERIES A
(HOUSING REVENUE LOC) 6.75 09/01/2022 25,009
1,270,000 SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY (ELECTRIC REVENUE LOC) 6.75 07/01/2011 1,512,989
10,000 STOCKTON CA MORTGAGE BACKED SECURITIES PROGRAM SERIES A
(HOUSING REVENUE LOC) 7.50 02/01/2023 10,394
5,690,000 SULPHUR SPRINGS UNION SCHOOL DISTRICT CA INTEREST ACCRUAL SERIES A
(PROPERTY TAX REVENUE LOC)^ 4.07 09/01/2013 4,013,954
410,000 TORRANCE CA AMBAC INSURED (LEASE REVENUE LOC)SS. 5.75 04/01/2016 422,029
2,295,000 TORRANCE CA AMBAC INSURED (LEASE REVENUE LOC) 5.75 04/01/2016 2,362,335
5,650,000 UNION CITY COMMUNITY REDEVELOPMENT AGENCY SERIES A COMMUNITY
REDEVELOPMENT PROJECT (SPECIAL FACILITIES REVENUE LOC) 5.38 10/01/2034 5,981,429
3,275,000 VALLEJO CA WATER IMPROVEMENT PROJECT SERIES A (WATER REVENUE LOC) 5.70 05/01/2016 3,483,454
2,595,000 VERNON CA MALBURG GENERATING STATION PROJECT
(ELECTRIC REVENUE LOC)SS. 5.50 04/01/2021 2,855,227
2,500,000 VISTA COMMUNITY DEVELOPMENT COMMISSION CA VISTA REDEVELOPMENT
PROJECT AREA (TAX INCREMENTAL REVENUE LOC) 5.88 09/01/2037 2,598,225
1,135,000 WALNUT VALLEY UNIFIED SCHOOL DISTRICT CA SERIES C
(PROPERTY TAX REVENUE LOC) 5.75 08/01/2015 1,149,744
900,000 WESTMINSTER REDEVELOPMENT AGENCY CA ROSE GARDENS APARTMENT PROJECT
SERIES A (HOUSING REVENUE LOC) 6.50 08/01/2010 908,397
2,395,000 WINDSOR JOINT POWERS FINANCING AUTHORITY CA WINDSOR CIVIC CENTER
SERIES A LEASE REVENUE LOC) 5.38 10/01/2018 2,654,738
1,600,000 YORBA LINDA REDEVELOPMENT AGENCY CA SERIES A CAPITAL APPRECIATION
YORBA LINDA REDEVELOPMENT (SPECIAL TAX REVENUE LOC)^ 4.88 09/01/2019 789,136
2,270,000 YUBA CITY CA REDEVELOPEMENT AGENCY REDEVELOPEMENT PROJECT
(TAX INCREMENTAL REVENUE LOC) 5.70 09/01/2024 2,303,505
------------
491,063,908
PUERTO RICO - 0.85%
3,800,000 CHILDRENS TRUST FUND PUERTO RICO TOBACCO SETTLEMENT
(OTHER REVENUE LOC)SS. 6.00 07/01/2010 4,359,512
------------
TOTAL MUNICIPAL BONDS & NOTES (COST $461,912,964) 495,423,420
------------
30
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
SHORT-TERM INVESTMENTS - 1.09%
5,631,000 WELLS FARGO CALIFORNIA TAX-FREE MONEY MARKET TRUST~++ $ 5,631,000
------------
TOTAL SHORT-TERM INVESTMENTS (COST $5,631,000) 5,631,000
------------
TOTAL INVESTMENTS IN SECURITIES
(COST $480,540,112)* 100.19% $514,982,903
OTHER ASSETS AND LIABILITIES, NET (0.19) (987,150)
------ ------------
TOTAL NET ASSETS 100.00% $513,995,753
====== ============
+/- VARIABLE RATE SECURITIES.
^ ZERO COUPON/ STEPPED COUPON BOND. INTEREST RATE PRESENTED IS YIELD TO
MATURITY.
~ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY
PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND DOES NOT PAY AN
INVESTMENT ADVISORY FEE FOR SUCH INVESTMENTS.
++ SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $5,631,000.
SS. THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE
EFFECTIVE MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS SUBSTANTIALLY THE SAME AS FOR
FINANCIAL REPORTING PURPOSES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
31
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
COLORADO TAX-FREE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
INVESTMENT COMPANIES - 2.63%
8,248 BLACKROCK STRATEGIC MUNICIPAL TRUST $ 119,761
50,096 DREYFUS MUNICIPAL INCOME FUND 500,960
27,791 DREYFUS STRATEGIC MUNICIPAL BOND FUND 236,502
17,748 MUNICIPAL ADVANTAGE FUND INCORPORATED 230,724
15,692 NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 233,340
25,652 NUVEEN INSURED MUNICIPAL OPPORTUNITY FUND 402,736
18,339 NUVEEN PREMIUM INCOME MUNICIPAL FUND 254,729
15,188 SALOMON BROTHERS MUNICIPAL PARTNERS FUND INCORPORATED 204,279
12,543 SELIGMAN SELECT MUNICIPAL FUND 129,820
7,778 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST 113,014
8,528 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II 114,872
12,032 VAN KAMPEN TRUST FOR INVESTMENT GRADE MUNICIPALS 179,878
2,720,615
------------
TOTAL INVESTMENT COMPANIES (COST $2,277,546) 2,720,615
------------
PRINCIPAL INTEREST RATE MATURITY DATE
MUNICIPAL BONDS & NOTES - 93.15%
COLORADO - 92.05%
$ 1,380,000 ADAMS & WELD COUNTIES CO SCHOOL DISTRICT #27J BRIGHTON, CO
(PROPERTY TAX REVENUE LOC) 5.00% 12/01/2015 1,511,624
1,250,000 ADAMS & WELD COUNTIES CO SCHOOL DISTRICT #27J BRIGHTON, CO
(PROPERTY TAX REVENUE LOC) 5.50 12/01/2019 1,404,812
1,100,000 ADAMS COUNTY CO SCHOOL DISTRICT #012 SERIES A FSA INSURED
(PROPERTY TAX REVENUE LOC) 5.00 12/15/2016 1,199,385
1,500,000 AURORA HOUSING AUTHORITY CO RIVER FALLS PROJECT SERIES A
(HOUSING REVENUE LOC) 5.60 07/01/2019 1,292,235
680,000 BLACK HAWK CO BUSINESS IMPROVEMENT DISTRICT SPECIAL IMPROVEMENTS
DISTRICT #98-1 (SPECIAL TAX REVENUE LOC) 7.00 12/01/2011 686,514
645,000 BLACK HAWK CO BUSINESS IMPROVEMENT REVENUE DISTRICT #97-1 PROJECT
(SPECIAL TAX REVENUE LOC) 6.00 12/01/2009 649,541
1,000,000 BOULDER CO WATER & SEWER REVENUE (WATER REVENUE LOC) 5.60 12/01/2017 1,118,120
1,235,000 BOULDER COUNTY CO IDR UNIVERSITY CORPORATION FOR ATMOSPHERIC PROJECT
(OTHER REVENUE LOC) 5.50 09/01/2020 1,383,015
1,000,000 BOULDER COUNTY CO OPEN SPACE CAP (SALES TAX REVENUE LOC) 5.00 07/15/2017 1,076,840
500,000 CENTENNIAL 25 METROPOLITAN DISTRICT CO ARAPAHOE COUNTY GO
(PROPERTY TAX REVENUE LOC) 6.38 12/01/2016 511,680
1,250,000 COLORADO EDUCATIONAL & CULTURAL FACILITIES AUTHORITY (OTHER REVENUE LOC) 5.25 06/01/2021 1,308,787
1,000,000 COLORADO EDUCATIONAL & CULTURAL FACILITIES AUTHORITY ACADEMY CHARTER
SCHOOL PROJECT (PRIVATE SCHOOL REVENUE LOC) 6.25 12/15/2012 1,104,800
1,000,000 COLORADO EDUCATIONAL & CULTURAL FACILITIES AUTHORITY ACADEMY CHARTER
SCHOOL PROJECT (PRIVATE SCHOOL REVENUE LOC) 7.13 12/15/2030 1,081,910
3,750,000 COLORADO EDUCATIONAL & CULTURAL FACILITIES AUTHORITY ALEXANDER DAWSON
SCHOOL CO PROJECT (PRIVATE SCHOOL REVENUE LOC) 5.30 02/15/2029 3,876,450
500,000 COLORADO EDUCATIONAL & CULTURAL FACILITIES AUTHORITY CHARTER SCHOOL
CORE KNOWLEDGE PROJECT (LEASE REVENUE LOC)SS. 7.00 11/01/2029 592,300
600,000 COLORADO EDUCATIONAL & CULTURAL FACILITIES AUTHORITY CHARTER SCHOOL
RENAISSANCE SCHOOL PROJECT (LEASE REVENUE LOC) 6.75 06/01/2029 578,448
32
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
COLORADO TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLORADO (CONTINUED)
$ 1,000,000 COLORADO EDUCATIONAL & CULTURAL FACILITIES AUTHORITY CHARTER SCHOOL
UNIVERSITY LAB SCHOOL PROJECT (PRIVATE SCHOOL REVENUE LOC)SS. 5.75% 06/01/2016 $ 1,141,600
1,500,000 COLORADO EDUCATIONAL & CULTURAL FACILITIES AUTHORITY PINNACLE CHARTER
SCHOOL PROJECT (LEASE REVENUE LOC)SS. 6.00 12/01/2021 1,744,560
1,040,000 COLORADO EDUCATIONAL & CULTURAL FACILITIES AUTHORITY REVENUE CHARTER
SCHOOL COLLEGIATE PROJECT XLCA INSURED (EDUCATIONAL FACILITIES
REVENUE LOC) 5.00 06/15/2019 1,113,580
1,445,000 COLORADO EDUCATIONAL & CULTURAL FACILITIES AUTHORITY REVENUE PARKER
CORE CHARTER XLCA INSURED (EDUCATIONAL FACILITIES REVENUE LOC) 5.00 11/01/2024 1,504,144
100,000 COLORADO EDUCATIONAL & CULTURAL FACILITIES AUTHORITY SERIES A JOHNSON &
WALES UNIVERSITY PROJECT (COLLEGE AND UNIVERSITY REVENUE LOC) 5.00 04/01/2023 104,318
1,165,000 COLORADO EDUCATIONAL & CULTURAL FACILITIES CHARTER SCHOOL COLLEGIATE
PROJECT XLCA INSURED (EDUCATIONAL FACILITIES REVENUE LOC) 5.25 06/15/2024 1,257,734
2,000,000 COLORADO HEALTH FACILITIES AUTHORITY CATHOLIC HEALTH INITIATIVES
(HEALTHCARE FACILITIES REVENUE LOC) 5.25 09/01/2021 2,101,900
1,040,000 COLORADO HEALTH FACILITIES AUTHORITY EXEMPLA INCORPORATED SERIES A
(HEALTHCARE FACILITIES REVENUE LOC) 5.50 01/01/2023 1,097,782
415,000 COLORADO HEALTH FACILITIES AUTHORITY NATIONAL JEWISH MEDICAL & RESEARCH
(HEALTHCARE FACILITIES REVENUE LOC) 5.00 01/01/2008 430,185
2,000,000 COLORADO HEALTH FACILITIES AUTHORITY PARKVIEW MEDICAL CENTER PROJECT
(HEALTHCARE FACILITIES REVENUE LOC) 6.50 09/01/2020 2,199,880
1,250,000 COLORADO HEALTH FACILITIES AUTHORITY SISTERS OF CHARITY SERIES A
(HEALTHCARE FACILITIES REVENUE LOC) 6.25 05/15/2011 1,475,725
500,000 COLORADO HEALTH FACILITIES AUTHORITY STEAMBOAT SPRINGS HEALTH PROJECT
(HEALTHCARE FACILITIES REVENUE LOC) 5.75 09/15/2022 509,635
700,000 COLORADO HOUSING & FINANCE AUTHORITY AMT SINGLE FAMILY PROJECT
(HOUSING REVENUE LOC) 6.10 08/01/2023 701,547
605,000 COLORADO HOUSING & FINANCE AUTHORITY AMT SINGLE FAMILY PROJECT
(HOUSING REVENUE LOC) 6.50 08/01/2031 614,849
270,000 COLORADO HOUSING & FINANCE AUTHORITY SERIES A-3 SINGLE FAMILY PROJECT
(HOUSING REVENUE LOC) 6.50 05/01/2016 272,851
10,000 COLORADO HOUSING & FINANCE AUTHORITY SERIES B-2 SINGLE FAMILY PROJECT
(HOUSING REVENUE LOC) 7.50 12/01/2016 10,067
2,515,000 COLORADO HOUSING & FINANCE AUTHORITY SERIES B-3 SINGLE FAMILY PROJECT
(HOUSING REVENUE LOC)+/- 6.70 08/01/2017 2,561,905
575,000 COLORADO HOUSING & FINANCE AUTHORITY SERIES B-3 SINGLE FAMILY PROJECT
(HOUSING REVENUE LOC) 6.55 08/01/2033 585,333
70,000 COLORADO HOUSING & FINANCE AUTHORITY SERIES C-2 SINGLE FAMILY PROJECT
(HOUSING REVENUE LOC) 7.45 06/01/2017 70,228
705,000 COLORADO HOUSING & FINANCE AUTHORITY SERIES C-3 SINGLE FAMILY PROJECT
(HOUSING REVENUE LOC) 6.38 08/01/2033 717,105
120,000 COLORADO HOUSING & FINANCE AUTHORITY SERIES D-2 SINGLE FAMILY PROJECT
(HOUSING REVENUE LOC) 7.10 06/01/2014 120,628
2,755,000 COLORADO HOUSING & FINANCE AUTHORITY SERIES E-3 (HOUSING REVENUE LOC)+/- 10.52 04/01/2011 2,929,722
700,000 COLORADO HOUSING & FINANCE AUTHORITY SERIES E-3 (HOUSING REVENUE LOC) 6.60 08/01/2017 701,834
1,000,000 COLORADO HOUSING AND FINANCIAL AUTHORITY SINGLE FAMILY MORTGAGE SERIES
A-3 CLASS III (HOUSING REVENUE LOC) 5.25 05/01/2032 1,043,270
1,320,000 COLORADO MOUNTAIN JUNIOR COLLEGE DISTRICT STUDENT HOUSING FACILITES
ENTERPRISE MBIA (COLLEGE AND UNIVERSITY REVENUE LOC) 5.00 06/01/2023 1,387,478
2,255,000 COLORADO WATER RESOURCES & POWER DEVELOPMENT AUTHORITY SERIES A
(OTHER REVENUE LOC) 5.25 09/01/2015 2,515,024
33
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
COLORADO TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLORADO (CONTINUED)
$ 1,000,000 COLORADO WATER RESOURCES & POWER DEVELOPMENT AUTHORITY SERIES A
(OTHER REVENUE LOC) 5.63% 09/01/2015 $ 1,135,510
1,000,000 COLORADO WATER RESOURCES & POWER DEVELOPMENT AUTHORITY SERIES A
(OTHER REVENUE LOC) 5.13 09/01/2018 1,077,190
1,810,000 COLORADO WATER RESOURCES & POWER DEVELOPMENT AUTHORITY SERIES A
(WATER REVENUE LOC) 4.88 09/01/2017 1,925,297
1,000,000 COLORADO WATER RESOURCES & POWER DEVELOPMENT AUTHORITY SERIES A
(WATER REVENUE LOC) 5.00 09/01/2019 1,067,630
1,000,000 COLORADO WATER RESOURCES & POWER DEVELOPMENT AUTHORITY SERIES B
(OTHER REVENUE LOC) 5.00 09/01/2019 1,065,690
2,000,000 DENVER CITY & COUNTY BOARD OF WATER COMMISSION (LEASE REVENUE LOC) 5.00 11/15/2016 2,158,000
1,000,000 DENVER CITY & COUNTY CO CONVENTION CENTER PROJECT SERIES A
(SALES TAX REVENUE LOC) 5.50 09/01/2016 1,111,780
2,000,000 DENVER CITY & COUNTY CO CONVENTION CENTER PROJECT SERIES A FSA INSURED
(SALES TAX REVENUE LOC) 5.50 09/01/2017 2,223,560
1,000,000 DENVER CITY & COUNTY CO HELEN G BONFILS FOUNDATION PROJECT SERIES B
(RECREATIONAL FACILITIES REVENUE LOC) 5.13 12/01/2017 1,062,640
1,000,000 DENVER CITY & COUNTY CO SCHOOL DISTRICT #1 FSA INSURED
(PROPERTY TAX REVENUE LOC) 5.00 12/01/2016 1,091,590
2,000,000 DENVER CITY & COUNTY CO SERIES B (AIRPORT REVENUE LOC) 5.50 11/15/2015 2,234,600
1,000,000 DENVER CITY & COUNTY CO SERIES C (AIRPORT REVENUE LOC) 5.60 11/15/2010 1,058,670
865,000 DENVER CO GATEWAY CENTER METROPOLITAN DISTRICT CO
(PROPERTY TAX REVENUE LOC) 6.40 12/01/2018 874,818
1,475,000 DOUGLAS COUNTY CO PARKER HILLTOP PROJECT (HOUSING REVENUE LOC) 5.35 08/01/2018 1,549,458
1,000,000 DOUGLAS COUNTY CO SCHOOL DISTRICT #1 DOUGLAS & ELBERT COUNTIES
FGIC INSURED (PROPERTY TAX REVENUE LOC) 5.75 12/15/2022 1,155,870
2,500,000 EL PASO COUNTY CO SCHOOL DISTRICT #11 COLORADO SPRINGS
(PROPERTY TAX REVENUE LOC) 7.10 12/01/2017 3,265,075
1,160,000 EL PASO COUNTY CO SCHOOL DISTRICT #49 FALCON PROJECT
(PROPERTY TAX REVENUE LOC) 5.63 12/01/2016 1,315,568
1,500,000 ENGLEWOOD CO MFHR MARKS APARTMENTS PROJECT
(HOUSING REVENUE LOC) 6.65 12/01/2026 1,547,715
1,000,000 FORT COLLINS CO LEASE REVENUE SERIES A AMBAC INSURED
(LEASE REVENUE LOC) 5.38 06/01/2025 1,091,390
1,200,000 GARFIELD COUNTY CO BUILDING CORPORATION LEASE REVENUE
(LEASE REVENUE LOC) 5.75 12/01/2019 1,351,320
1,395,000 GARFIELD COUNTY CO SCHOOL DISTRICT REVENUE-2 GARFIELD
(PROPERTY TAX REVENUE LOC) 5.25 12/01/2021 1,519,657
1,000,000 GOLDEN COLORADO SERIES B (SALES TAX REVENUE LOC) 5.25 12/01/2016 1,104,710
1,165,000 GREEN VALLEY CO METROPOLITAN DISTRICT (PROPERTY TAX REVENUE LOC) 5.75 12/01/2019 1,305,883
1,000,000 HIGHLANDS RANCH CO METROPOLITAN DISTRICT #2 (PROPERTY TAX REVENUE LOC) 6.50 06/15/2011 1,192,170
1,990,000 JEFFERSON COUNTY CO CERTIFICATES OF PARTICIPATION MBIA INSURED
(LEASE REVENUE LOC) 4.50 12/01/2020 2,033,084
3,000,000 JEFFERSON COUNTY CO SCHOOL DISTRICT #R001 (PROPERTY TAX REVENUE LOC) 6.50 12/15/2011 3,613,740
500,000 LA JUNTA CO HOSPITAL REVENUE ARK VALLEY REGIONAL MEDICAL CENTER
PROJECT (HEALTHCARE FACILITIES REVENUE LOC) 6.00 04/01/2019 526,665
2,000,000 METEX METROPOLITAN DISTRICT CO SERIES A (PROPERTY TAX REVENUE LOC) 5.80 12/01/2016 2,199,520
825,000 NORTHERN METROPOLITAN DISTRICT ADAMS COUNTY CO (OTHER REVENUE LOC) 6.50 12/01/2016 833,209
265,000 PUEBLO CO COP PUBLIC PARKING LEASE PURCHASE & SUBLEASE REVENUE
(LEASE REVENUE LOC) 6.90 07/01/2015 268,705
34
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
COLORADO TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLORADO (CONTINUED)
$ 600,000 SUMMIT COUNTY CO KEYSTONE RESORTS MANAGEMENT PROJECT
(OTHER REVENUE LOC) 7.38% 09/01/2010 $ 720,444
500,000 TODD CREEK FARMS METROPOLITAN DISTRICT #1 COLORADO WATER &
WASTEWATER REVENUE (WATER REVENUE LOC) 6.13 12/01/2019 493,010
1,730,000 UNIVERSITY OF NORTHERN COLORADO REVENUE AUXILIARY FACILITIES SYSTEM
(COLLEGE AND UNIVERSITY REVENUE LOC) 5.50 06/01/2019 1,926,217
95,389,730
------------
1,000,000 CHILDRENS TRUST FUND PUERTO RICO TOBACCO SETTLEMENT (OTHER REVENUE LOC)SS. 6.00 07/01/2026 1,147,240
------------
TOTAL MUNICIPAL BONDS & NOTES (COST $90,441,350) 96,536,970
------------
SHARES
SHORT-TERM INVESTMENTS - 3.58%
3,713,000 WELLS FARGO NATIONAL TAX-FREE MONEY MARKET TRUST~++ 3,713,000
------------
TOTAL SHORT-TERM INVESTMENTS (COST $3,713,000) 3,713,000
------------
TOTAL INVESTMENTS IN SECURITIES
(COST $96,431,896)* 99.36% $102,970,585
OTHER ASSETS AND LIABILITIES, NET 0.64 660,524
------ ------------
TOTAL NET ASSETS 100.00% $103,631,109
====== ============
+/- VARIABLE RATE SECURITIES.
++ SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $3,713,000.
SS. THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE
EFFECTIVE MATURITY.
~ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY
PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND DOES NOT PAY AN
INVESTMENT ADVISORY FEE FOR SUCH INVESTMENTS.
* 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.
35
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
MUNICIPAL BONDS & NOTES - 98.08%
MINNESOTA - 96.82%
$ 2,845,000 ANOKA-HENNEPIN MN INDEPENDENT SCHOOL DISTRICT #11 SCHOOL DISTRICT
CENTER FOR ENHANCEMENT PROGRAM SERIES A FSA SCHOOL DISTRICT CREDIT
PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.00% 02/01/2018 $ 3,057,664
2,395,000 ARDEN HILLS MN HOUSING AND HEALTHCARE FACILITIES PRESBYTERIAN HOMES
SERIES A UNITED STATES BANK INSURED (HOUSING REVENUE LOC)+/-SS. 2.27 09/01/2029 2,395,000
1,500,000 AUSTIN MN HOUSING & REDEVELOPMENT AUTHORITY COURTYARD RESIDENCE
PROJECT SERIES A (HOUSING REVENUE LOC) 7.25 01/01/2032 1,589,250
650,000 AUSTIN MN HOUSING & REDEVELOPMENT AUTHORITY COURTYARD RESIDENCE PROJECT
SERIES A (HOUSING REVENUE LOC) 7.15 01/01/2020 691,665
1,055,000 BEMIDJI MN FIRST MORTGAGE NORTH COUNTRY HEALTH (HEALTHCARE FACILITIES
REVENUE LOC) 5.63 09/01/2021 1,098,751
3,000,000 BLOOMINGTON MN INDEPENDENT SCHOOL DISTRICT #271 BUILDING SERIES B
SCHOOL DISTRICT CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.00 02/01/2016 3,206,370
3,000,000 BLOOMINGTON MN INDEPENDENT SCHOOL DISTRICT #271 BUILDING SERIES B
SCHOOL DISTRICT CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.00 02/01/2019 3,200,370
4,805,000 BURNSVILLE MN FAIRVIEW COMMUNITY HOSPITALS ESCROWED TO MATURITY
(HEALTHCARE FACILITIES REVENUE LOC)^ 5.53 05/01/2012 3,219,782
750,000 CHASKA MN INDEPENDENT SCHOOL DISTRICT #112 SERIES A FSA SCHOOL DISTRICT
CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.70 02/01/2017 824,835
1,250,000 CHASKA MN INDEPENDENT SCHOOL DISTRICT #112 SERIES B SCHOOL DISTRICT
CREDIT PROGRAM INSURED SUBJECT TO CROSSOVER REFUNDING (PROPERTY TAX
REVENUE LOC) 5.75 02/01/2007 1,295,350
1,000,000 CHASKA MN INDEPENDENT SCHOOL DISTRICT #112 SERIES B SCHOOL DISTRICT
CREDIT PROGRAM INSURED SUBJECT TO CROSSOVER REFUNDING
(PROPERTY TAX REVENUE LOC) 5.75 02/01/2009 1,036,280
500,000 CHASKA MN INDEPENDENT SCHOOL DISTRICT #112 SERIES B SCHOOL DISTRICT
CREDIT PROGRAM INSURED SUBJECT TO CROSSOVER REFUNDING (PROPERTY TAX
REVENUE LOC) 6.00 02/01/2013 519,470
210,000 CITY OF BLOOMINGTON MN TAX INCREMENTAL BONDS PREREFUNDED
(PROPERTY TAX REVENUE LOC)SS. 9.75 02/01/2005 211,338
290,000 CITY OF BLOOMINGTON MN TAX INCREMENTAL BONDS PREREFUNDED
(PROPERTY TAX REVENUE LOC)SS. 9.75 02/01/2005 291,847
945,000 CITY OF CHASKA MN SERIES A (ELECTRIC REVENUE LOC) 5.63 10/01/2014 1,022,868
995,000 CITY OF CHASKA MN SERIES A (ELECTRIC REVENUE LOC) 5.70 10/01/2015 1,075,486
145,000 CITY OF MINNEAPOLIS MN ABBOTT NORTHWESTERN HOSPITAL INCORPORATED
ESCROWED TO MATURITY (HEALTHCARE FACILITIES REVENUE LOC) 6.50 12/01/2006 152,412
1,000,000 CITY OF MINNEAPOLIS MN ALLINA HEALTH SYSTEMS SERIES A
(HEALTHCARE FACILITIES REVENUE LOC) 6.00 11/15/2023 1,085,410
575,000 CITY OF MINNEAPOLIS MN WALKER METHODIST SENIOR SERVICES SERIES A
(HEALTHCARE FACILITIES REVENUE LOC) 5.50 11/15/2012 512,842
710,000 CITY OF MINNEAPOLIS MN WALKER METHODIST SENIOR SERVICES SERIES A
(HEALTHCARE FACILITIES REVENUE LOC) 5.88 11/15/2018 601,178
1,000,000 CITY OF NEW HOPE MN MASONIC HOME NORTH RIDGE
(HEALTHCARE FACILITIES REVENUE LOC) 5.90 03/01/2019 1,029,640
180,000 CITY OF ST. CLOUD MN (LEASE REVENUE LOC) 5.20 12/01/2005 184,383
185,000 CITY OF ST. CLOUD MN (LEASE REVENUE LOC) 5.30 12/01/2006 189,174
400,000 CITY OF ST. CLOUD MN (LEASE REVENUE LOC) 5.90 12/01/2017 405,576
1,335,000 CITY OF ST. CLOUD MN ST. CLOUD HOSPITAL OBLIGATION GROUP SERIES A
FSA INSURED (HEALTHCARE FACILITIES REVENUE LOC) 5.75 05/01/2010 1,508,590
1,750,000 CITY OF ST. CLOUD MN ST. CLOUD HOSPITAL OBLIGATION GROUP SERIES A
FSA INSURED (HEALTHCARE FACILITIES REVENUE LOC) 5.38 05/01/2011 1,942,045
36
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
MINNESOTA (CONTINUED)
$ 4,875,000 CITY OF ST. CLOUD MN ST. CLOUD HOSPITAL OBLIGATION GROUP SERIES A
FSA INSURED (HEALTHCARE FACILITIES REVENUE LOC) 5.75% 05/01/2026 $ 5,419,537
1,890,000 COUNTY OF RAMSEY MN CAPITAL IMPROVEMENT PLAN SERIES A
(PROPERTY TAX REVENUE LOC) 5.00 02/01/2017 2,045,320
1,000,000 CUYUNA MN RANGE HOSPITAL DISTRICT SERIES A
(HEALTHCARE FACILITIES REVENUE LOC) 5.75 06/01/2014 1,005,820
1,000,000 CUYUNA MN RANGE HOSPITAL DISTRICT SERIES A
(HEALTHCARE FACILITIES REVENUE LOC) 6.00 06/01/2019 1,006,310
695,000 DULUTH MN ECONOMIC DEVELOPMENT AUTHORITY HEALTH CARE FACILITIES
BENEDICTINE HEALTH SYSTEMS - ST. MARY'S (HEALTH FACILITIES FINANCING
AUTHORITY REVENUE LOC) 5.25 02/15/2021 719,401
155,000 EAST GRAND FORKS MN (ELECTRIC REVENUE LOC) 5.90 02/01/2015 161,595
255,000 EAST GRAND FORKS MN (ELECTRIC REVENUE LOC) 6.00 02/01/2018 264,805
300,000 EAST GRAND FORKS MN (ELECTRIC REVENUE LOC) 6.10 02/01/2021 308,889
1,000,000 ELK RIVER MN INDEPENDENT SCHOOL DISTRICT # 728 SERVICE A FGIC INSURED
(PROPERTY TAX REVENUE LOC) 5.00 02/01/2019 1,082,230
1,000,000 ELK RIVER MN INDEPENDENT SCHOOL DISTRICT #728 SERIES A MBIA SCHOOL
DISTRICT CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.00 02/01/2018 1,074,750
580,000 FERGUS FALLS MN HOUSING & REDEVELOPMENT AUTHORITY LAKE REGION
HEALTHCARE (HEALTHCARE FACILITIES REVENUE LOC) 5.10 09/01/2014 609,342
605,000 FERGUS FALLS MN HOUSING & REDEVELOPMENT AUTHORITY LAKE REGION
HEALTHCARE (HEALTHCARE FACILITIES REVENUE LOC) 5.20 09/01/2015 635,970
560,000 FERGUS FALLS MN HOUSING & REDEVELOPMENT AUTHORITY LAKE REGION
HEALTHCARE (HEALTHCARE FACILITIES REVENUE LOC) 5.30 09/01/2016 588,930
670,000 FERGUS FALLS MN HOUSING & REDEVELOPMENT AUTHORITY LAKE REGION
HEALTHCARE (HEALTHCARE FACILITIES REVENUE LOC) 5.40 09/01/2017 704,210
700,000 GLENCOE MN REGIONAL HEALTH SERVICES PROJECT (LEASE REVENUE LOC) 7.20 04/01/2016 759,213
600,000 GLENCOE MN REGIONAL HEALTH SERVICES PROJECT (LEASE REVENUE LOC) 7.40 04/01/2021 652,632
585,000 GLENCOE MN REGIONAL HEALTH SERVICES PROJECT (LEASE REVENUE LOC) 7.50 04/01/2031 629,524
1,075,000 HIBBING MN THE DULUTH CLINIC LIMITED FSA INSURED PREREFUNDED
(HEALTHCARE FACILITIES REVENUE LOC)SS. 5.50 11/01/2013 1,234,455
2,785,000 ITASCA COUNTY MN INDEPENDENT SCHOOL DISTRICT #318 FSA SCHOOL DISTRICT
CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.00 02/01/2017 2,997,356
1,735,000 LAKE SUPERIOR MN INDEPENDENT SCHOOL DISTRICT #381 BUILDING SERIES A
FSA SCHOOL DISTRICT CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.00 04/01/2019 1,864,622
1,080,000 LINO LAKES MN ECONOMIC DEVELOPMENT AUTHORITY SERIES A
(LEASE REVENUE LOC) 5.25 02/01/2016 1,090,368
500,000 LINO LAKES MN ECONOMIC DEVELOPMENT AUTHORITY SERIES A
(LEASE REVENUE LOC) 5.35 02/01/2019 504,625
850,000 MARSHALL MN WEINER MEMORIAL MEDICAL CENTER PROJECT SERIES A
(HEALTHCARE FACILITIES REVENUE LOC) 5.85 11/01/2023 894,812
500,000 MINNEAPOLIS & ST PAUL MN HOUSING & REDEVELOPMENT AUTHORITY HEALTH CARE
SYSTEM HEALTH PARTNERS OBLIGATION GROUP PROJECT
(HEALTHCARE FACILITIES REVENUE LOC) 5.63 12/01/2022 519,685
500,000 MINNEAPOLIS & ST PAUL MN HOUSING & REDEVELOPMENT AUTHORITY HEALTH CARE
SYSTEM HEALTH PARTNERS OBLIGATION GROUP PROJECT
(HEALTHCARE FACILITIES REVENUE LOC) 5.88 12/01/2029 521,640
500,000 MINNEAPOLIS & ST PAUL MN HOUSING & REDEVELOPMENT AUTHORITY HEALTHCARE
SYSTEM HEALTH PARTNERS OBLIGATION GROUP PROJECT
(HEALTHCARE FACILITIES REVENUE LOC) 5.25 12/01/2016 517,650
4,660,000 MINNEAPOLIS & ST PAUL MN METROPOLITAN AIRPORTS COMMISSION SUBORDINATED
SERIES C FGIC INSURED (AIRPORT REVENUE LOC) 5.25 01/01/2021 5,044,497
1,130,000 MINNESOTA AGRICULTURAL & ECONOMIC DEVELOPMENT BOARD EVANGELICAL
LUTHERAN PROJECT (HEALTHCARE FACILITIES REVENUE LOC) 6.00 02/01/2022 1,224,298
5,360,000 MINNESOTA AGRICULTURAL & ECONOMIC DEVELOPMENT BOARD HEALTH CARE SYSTEM
FAIRVIEW HOSPITAL SERIES A MBIA INSURED
(HEALTHCARE FACILITIES REVENUE LOC) 5.50 11/15/2017 5,857,086
37
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
MINNESOTA (CONTINUED)
$ 2,025,000 MINNESOTA AGRICULTURAL & ECONOMIC DEVELOPMENT BOARD HEALTH CARE
SYSTEMS SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 5.88% 11/15/2010 $ 2,287,480
2,000,000 MINNESOTA AGRICULTURAL & ECONOMIC DEVELOPMENT BOARD HEALTH CARE SYSTEMS
SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 6.38 11/15/2022 2,212,360
2,000,000 MINNESOTA HIGHER EDUCATION FACILITIES AUTHORITY COLLEGE AT ST. BENEDICT
SERIES 4-T (COLLEGE AND UNIVERSITY REVENUE LOC) 5.35 03/01/2020 2,032,280
700,000 MINNESOTA HIGHER EDUCATION FACILITIES AUTHORITY MACALESTER COLLEGE
SERIES 4-C GENERAL OBLIGATION OF INSTITUTION INSURED
(COLLEGE AND UNIVERSITY REVENUE LOC)SS. 5.55 03/01/2016 703,654
600,000 MINNESOTA HIGHER EDUCATION FACILITIES AUTHORITY NORTHWESTERN COLLEGE
SERIES 4-Z (COLLEGE AND UNIVERSITY REVENUE LOC) 5.20 10/01/2013 614,418
1,000,000 MINNESOTA HIGHER EDUCATION FACILITIES AUTHORITY ST. JOHNS UNIVERSITY
SERIES 4-L (COLLEGE AND UNIVERSITY REVENUE LOC) 5.35 10/01/2017 1,048,850
895,000 MINNESOTA HIGHER EDUCATION FACILITIES AUTHORITY ST. MARY'S UNIVERSITY
SERIES 5-E (COLLEGE AND UNIVERSITY REVENUE LOC) 6.75 03/01/2019 985,109
500,000 MINNESOTA HOUSING FINANCE AGENCY RENTAL HOUSING SERIES C
(HOUSING REVENUE LOC) 4.40 02/01/2022 492,895
1,755,000 MINNESOTA HOUSING FINANCE AGENCY RENTAL HOUSING SERIES D MBIA GENERAL
OBLIGATION OF AGENCY INSURED (HOUSING REVENUE LOC) 5.80 08/01/2011 1,792,504
750,000 MINNESOTA HOUSING FINANCE AGENCY RENTAL HOUSING SERIES D MBIA GENERAL
OBLIGATION OF AGENCY INSURED (HOUSING REVENUE LOC) 5.90 08/01/2015 765,885
140,000 MINNESOTA HOUSING FINANCE AGENCY SINGLE FAMILY MORTGAGE SERIES A
GENERAL OBLIGATION OF AGENCY INSURED (HOUSING REVENUE LOC) 5.75 07/01/2018 141,698
840,000 MINNESOTA HOUSING FINANCE AGENCY SINGLE FAMILY MORTGAGE SERIES A
GENERAL OBLIGATION OF AGENCY INSURED (HOUSING REVENUE LOC) 5.85 07/01/2020 850,517
1,160,000 MINNESOTA HOUSING FINANCE AGENCY SINGLE FAMILY MORTGAGE SERIES A
MBIA INSURED (HOUSING REVENUE LOC) 5.35 07/01/2017 1,214,474
1,325,000 MINNESOTA HOUSING FINANCE AGENCY SINGLE FAMILY MORTGAGE SERIES D
AMBAC GENERAL OBLIGATION OF AGENCY INSURED (HOUSING REVENUE LOC) 5.80 07/01/2021 1,325,000
105,000 MINNESOTA HOUSING FINANCE AGENCY SINGLE FAMILY MORTGAGE SERIES D-2
REMARKET 3/24/93 GENERAL OBLIGATION OF AGENCY INSURED
(HOUSING REVENUE LOC)+/- 5.60 01/01/2006 106,294
790,000 MINNESOTA HOUSING FINANCE AGENCY SINGLE FAMILY MORTGAGE SERIES I
REMARKET 8/12/92 GENERAL OBLIGATION OF AGENCY INSURED
(HOUSING REVENUE LOC)+/- 6.25 01/01/2015 791,304
1,260,000 MINNESOTA HOUSING FINANCE AGENCY SINGLE FAMILY MORTGAGE SERIES M
REMARKET 12/12/96 GENERAL OBLIGATION OF AGENCY INSURED
(HOUSING REVENUE LOC)+/- 5.88 01/01/2017 1,287,707
4,490,000 MINNESOTA PUBLIC FACILITIES AUTHORITY SERIES A (OTHER REVENUE LOC) 5.00 03/01/2018 4,803,222
2,000,000 MINNESOTA PUBLIC FACILITIES AUTHORITY SERIES B (WATER REVENUE LOC)SS. 5.13 03/01/2015 2,193,480
1,000,000 MINNESOTA STATE IRON RANGE RESOURCES & REHABILITATION GIANTS RIDGE
RECREATIONAL AREA (RECREATIONAL FACILITIES REVENUE LOC) 7.25 11/01/2016 1,037,590
1,100,000 MINNETONKA MN INDEPENDENT SCHOOL DISTRICT #276 SERIES B SCHOOL DISTRICT
CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.65 02/01/2010 1,201,948
1,650,000 MINNETONKA MN INDEPENDENT SCHOOL DISTRICT #276 SERIES B SCHOOL DISTRICT
CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.75 02/01/2022 1,807,790
505,000 MONTICELLO BIG LAKE MN COMMUNITY HOSPITAL DISTRICT HEALTHCARE FACILITIES
SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 5.20 12/01/2009 530,800
725,000 MONTICELLO BIG LAKE MN COMMUNITY HOSPITAL DISTRICT HEALTHCARE FACILITIES
SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 5.40 12/01/2011 753,239
825,000 MONTICELLO BIG LAKE MN COMMUNITY HOSPITAL DISTRICT HEALTHCARE FACILITIES
SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 5.45 12/01/2012 850,971
500,000 MONTICELLO BIG LAKE MN COMMUNITY HOSPITAL DISTRICT HEALTHCARE FACILITIES
SERIES A (HOUSING REVENUE LOC) 5.30 12/01/2010 521,185
38
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
MINNESOTA (CONTINUED)
$ 700,000 MONTICELLO BIG LAKE MN COMMUNITY HOSPITAL DISTRICT HEALTHCARE
FACILITIES SERIES A RADIAN INSURED (HEALTHCARE FACILITIES REVENUE LOC) 5.75% 12/01/2019 $ 762,370
1,260,000 MOORHEAD MN FHA INSURED ESCROWED TO MATURITY (HOUSING REVENUE LOC) 7.10 08/01/2011 1,452,982
1,430,000 MOUNDS VIEW MN INDEPENDENT SCHOOL DISTRICT #621 SERIES A SCHOOL
DISTRICT CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.38 02/01/2017 1,595,051
2,040,000 MOUNDS VIEW MN INDEPENDENT SCHOOL DISTRICT #621 SERIES A SCHOOL
DISTRICT CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.38 02/01/2019 2,275,457
560,000 MOUNTAIN IRON MN HOUSING & REDEVELOPMENT AUTHORITY NORTHEAST SERVICE
COOPERATIVE PROJECT SERIES A (LEASE REVENUE LOC) 6.25 10/01/2019 586,572
1,000,000 NORTHERN MUNICIPAL POWER AGENCY MN FSA INSURED (ELECTRIC REVENUE LOC) 5.30 01/01/2021 1,080,010
2,000,000 NORTHERN MUNICIPAL POWER AGENCY MN FSA INSURED (ELECTRIC REVENUE LOC) 5.40 01/01/2015 2,192,720
360,000 OSSEO MN ECONOMIC DEVELOPMENT AUTHORITY SERIES B (LEASE REVENUE LOC) 5.90 02/01/2018 383,490
455,000 OSSEO MN ECONOMIC DEVELOPMENT AUTHORITY SERIES B (LEASE REVENUE LOC) 6.00 02/01/2022 480,494
1,000,000 OTTER TAIL COUNTY MN HOUSING & REDEVELOPMENT AUTHORITY SERIES A
(LEASE REVENUE LOC) 5.00 02/01/2019 1,039,030
1,120,000 OWATONNA MN HOUSING REVENUE SECOND CENTURY PROJECT SERIES A
(HOUSING REVENUE LOC)+/-SS. 2.19 01/01/2030 1,120,000
115,000 RED WING MN RIVER REGION OBLIGATED GROUP SERIES B PREREFUNDED
(HEALTHCARE FACILITIES REVENUE LOC)SS. 6.35 09/01/2005 118,183
300,000 ROBBINSDALE MN ECONOMIC DEVELOPMENT AUTHORITY SENIOR HOUSING PROJECT
SERIES A (HOUSING REVENUE LOC) 6.63 01/01/2019 280,188
2,805,000 ROBBINSDALE MN INDEPENDENT SCHOOL DISTRICT #281 FSA SCHOOL DISTRICT
CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.00 02/01/2019 3,010,719
1,000,000 ROBBINSDALE MN INDEPENDENT SCHOOL DISTRICT #281 FSA SCHOOL DISTRICT
CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.00 02/01/2020 1,069,020
1,000,000 ROBBINSDALE MN INDEPENDENT SCHOOL DISTRICT #281 SCHOOL BUILDING FSA
SCHOOL DISTRICT CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.00 02/01/2018 1,074,750
1,195,000 ROBBINSDALE MN INDEPENDENT SCHOOL DISTRICT #281 SCHOOL DISTRICT CREDIT
PROGRAM INSURED SUBJECT TO CROSSOVER REFUNDING
(PROPERTY TAX REVENUE LOC) 5.60 02/01/2018 1,329,378
2,900,000 ROBBINSDALE MN INDEPENDENT SCHOOL DISTRICT #281 SCHOOL DISTRICT CREDIT
PROGRAM INSURED SUBJECT TO CROSSOVER REFUNDING
(PROPERTY TAX REVENUE LOC) 5.63 02/01/2020 3,228,889
2,285,000 ROCHESTER MN HEALTHCARE FACILITIES REVENUE MAYO FOUNDATION MAYO MEDICAL
CENTER-SERIES I (HEALTHCARE FACILITIES REVENUE LOC) 5.80 11/15/2007 2,489,667
1,650,000 ROCHESTER MN MAYO FOUNDATION MAYO MEDICAL CENTER SERIES I
(HEALTHCARE FACILITIES REVENUE LOC) 5.90 11/15/2009 1,868,213
1,875,000 ROCHESTER MN MAYO FOUNDATION MAYO MEDICAL CENTER SERIES I
(HEALTHCARE FACILITIES REVENUE LOC) 5.90 11/15/2010 2,146,256
2,000,000 ROSEMOUNT MN INDEPENDENT SCHOOL DISTRICT #196 CAPITAL APPRECIATION
SERIES A SCHOOL DISTRICT CREDIT PROGRAM INSURED
(PROPERTY TAX REVENUE LOC)^ 3.02 04/01/2009 1,760,780
3,000,000 ROSEMOUNT MN INDEPENDENT SCHOOL DISTRICT #196 CAPITAL APPRECIATION
SERIES A SCHOOL DISTRICT CREDIT PROGRAM INSURED
(PROPERTY TAX REVENUE LOC)^ 3.32 04/01/2010 2,523,750
2,000,000 ROSEMOUNT MN INDEPENDENT SCHOOL DISTRICT #196 CAPITAL APPRECIATION
SERIES A SCHOOL DISTRICT CREDIT PROGRAM INSURED
(PROPERTY TAX REVENUE LOC)^ 3.58 04/01/2011 1,602,200
1,000,000 SHAKOPEE MN HEALTHCARE FACILITIES REVENUE ST. FRANCIS REGIONAL MEDICAL
CENTER (HEALTHCARE FACILITIES REVENUE LOC) 5.25 09/01/2034 1,007,840
695,000 SOUTH WASHINGTON COUNTY MN INDEPENDENT SCHOOL DISTRICT NO.833 SERIES A
(PROPERTY TAX REVENUE LOC) 5.50 02/01/2017 764,632
5,000,000 SOUTHERN MINNESOTA MUNICIPAL POWER AGENCY CAPITAL APPRECIATION SERIES A
(ELECTRIC REVENUE LOC)^ 4.59 01/01/2020 2,531,250
975,000 SOUTHERN MINNESOTA MUNICIPAL POWER AGENCY PREREFUNDED SERIES A
(ELECTRIC REVENUE LOC) 5.00 01/01/2009 1,066,845
39
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
MINNESOTA (CONTINUED)
$ 1,450,000 SOUTHERN MINNESOTA MUNICIPAL POWER AGENCY SERIES A
(ELECTRIC REVENUE LOC) 5.25% 01/01/2017 $ 1,645,112
2,025,000 ST. LOUIS PARK MN INDEPENDENT SCHOOL DISTRICT #283 SCHOOL
DISTRICT CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.45 02/01/2013 2,217,780
1,050,000 ST. MICHAEL MN INDEPENDENT SCHOOL DISTRICT #885 FSA SCHOOL
DISTRICT CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.00 02/01/2018 1,128,488
2,000,000 ST. MICHAEL MN INDEPENDENT SCHOOL DISTRICT #885 FSA SCHOOL
DISTRICT CREDIT PROGRAM INSURED (PROPERTY TAX REVENUE LOC) 5.00 02/01/2019 2,146,680
500,000 ST. PAUL MN HOUSING & REDEVELOPMENT AUTHORITY REGIONS HOSPITAL
PROJECT (HEALTHCARE FACILITIES REVENUE LOC) 5.20 05/15/2013 519,860
1,700,000 ST. PAUL MN HOUSING & REDEVELOPMENT AUTHORITY REGIONS HOSPITAL
PROJECT (HEALTHCARE FACILITIES REVENUE LOC) 5.25 05/15/2018 1,736,193
3,000,000 ST. PAUL MN HOUSING & REDEVELOPMENT AUTHORITY REGIONS HOSPITAL
PROJECT (HEALTHCARE FACILITIES REVENUE LOC) 5.30 05/15/2028 3,027,150
2,500,000 ST. PAUL MN HOUSING & REDEVELOPMENT AUTHORITY ST. PAUL ACADEMY &
SUMMIT SCHOOL PROJECT (PRIVATE SCHOOL REVENUE LOC) 5.50 10/01/2024 2,623,100
215,000 ST. PAUL MN INDEPENDENT SCHOOL DISTRICT #625 SERIES B
(LEASE REVENUE LOC) 6.10 02/01/2006 215,662
230,000 ST. PAUL MN INDEPENDENT SCHOOL DISTRICT #625 SERIES B
(LEASE REVENUE LOC) 6.20 02/01/2007 230,727
245,000 ST. PAUL MN INDEPENDENT SCHOOL DISTRICT #625 SERIES B
(LEASE REVENUE LOC) 6.25 02/01/2008 245,784
260,000 ST. PAUL MN INDEPENDENT SCHOOL DISTRICT #625 SERIES B
(LEASE REVENUE LOC) 6.30 02/01/2009 260,876
1,000,000 TODD MORRISON CASS & WADENA COUNTIES MN UNITED HOSPITAL DISTRICT
HEALTH CARE FACILITIES - LAKEWOOD 5.13 12/01/2024 1,020,690
1,050,000 TODD MORRISON CASS & WADENA COUNTIES MN UNITED HOSPITAL DISTRICT
HEALTH CARE FACILITIES - LAKEWOOD 5.25 12/01/2026 1,076,145
1,000,000 UNIVERSITY OF MINNESOTA SERIES A (COLLEGE AND UNIVERSITY REVENUE LOC) 5.75 07/01/2011 1,151,750
2,795,000 UNIVERSITY OF MINNESOTA SERIES A (COLLEGE AND UNIVERSITY REVENUE LOC) 5.75 07/01/2017 3,314,926
7,285,000 UNIVERSITY OF MINNESOTA SERIES A (COLLEGE AND UNIVERSITY REVENUE LOC) 5.50 07/01/2021 8,480,104
2,745,000 WESTERN MINNESOTA MUNICIPAL POWER AGENCY 1977 SERIES A (ELECTRIC
REVENUE LOC) 6.38 01/01/2016 3,167,401
179,688,966
------------
PUERTO RICO - 1.26%
2,000,000 PUERTO RICO ELECTRIC POWER AUTHORITY SERIES LL MBIA INSURED
(ELECTRIC REVENUE LOC) 5.50 07/01/2016 2,328,600
------------
TOTAL MUNICIPAL BONDS & NOTES (COST $169,234,671) 182,017,566
------------
SHARES
SHORT-TERM INVESTMENTS - 0.79%
1,475,000 WELLS FARGO NATIONAL TAX-FREE MONEY MARKET TRUST~++ 1,475,000
------------
TOTAL SHORT-TERM INVESTMENTS (COST $1,475,000) 1,475,000
------------
TOTAL INVESTMENTS IN SECURITIES
(COST $170,709,671)* 98.87% $183,492,566
OTHER ASSETS AND LIABILITIES, NET 1.13 2,093,740
------ ------------
TOTAL NET ASSETS 100.00% $185,586,306
------ ============
SS. THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE
EFFECTIVE MATURITY.
+/- VARIABLE RATE SECURITIES.
^ ZERO COUPON/ STEPPED COUPON BOND. INTEREST RATE PRESENTED IS YIELD TO
MATURITY.
~ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY
PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND DOES NOT PAY AN
INVESTMENT ADVISORY FEE FOR SUCH INVESTMENTS.
++ SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $1,475,000.
* 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.
40
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
MUNICIPAL BONDS & NOTES - 93.51%
ALABAMA - 1.27%
$ 1,785,000 JEFFERSON COUNTY AL SERIES A (PROPERTY TAX REVENUE LOC) 5.00% 04/01/2008 $ 1,926,872
------------
ALASKA - 0.87%
860,000 ALASKA ENERGY AUTHORITY FSA INSURED (ELECTRIC REVENUE LOC) 7.00 07/01/2009 955,185
360,000 ALASKA STUDENT LOAN CORPORATION SERIES A AMBAC INSURED
(HIGHER EDUCATION FACILITIES AUTHORITY REVENUE LOC) 5.50 07/01/2006 365,331
1,320,516
------------
ARIZONA - 1.02%
1,350,000 MARICOPA COUNTY AZ SCHOOL DISTRICT #6 WASHINGTON ELEMENTARY SERIES B
(PROPERTY TAX REVENUE LOC) 7.10 07/01/2008 1,551,447
------------
CALIFORNIA - 0.38%
500,000 SANTA CLARA CA REDEVELOPMENT AGENCY BAYSHORE NORTH PROJECT AMBAC
INSURED (TAX REVENUE LOC) 7.00 07/01/2010 574,880
------------
COLORADO - 8.86%
1,020,000 ADAMS COUNTY CO SCHOOL DISTRICT #1 FSA INSURED
(GENERAL OBLIGATION - SCHOOL DISTRICTS LOC) 5.00 12/01/2007 1,095,653
621,000 BOWLES CO METROPOLITAN DISTRICT PREREFUNDED 12/01/05 @ 102
(PROPERTY TAX REVENUE LOC)SS. 7.75 12/01/2005 658,670
205,000 COLORADO EDUCATIONAL & CULTURAL FACILITIES AUTHORITY CHARTER
SCHOOL-RENAISSANCE SCHOOL PROJECT (LEASE REVENUE LOC) 5.85 06/01/2008 202,747
1,435,000 COLORADO EDUCATIONAL & CULTURAL FACILITIES AUTHORITY PINNACLE
CHARTER SCHOOL PROJECT ESCROWED TO MATURITY (LEASE REVENUE LOC) 5.25 12/01/2011 1,576,218
1,000,000 COLORADO HEALTH FACILITIES AUTHORITY CATHOLIC HEALTH INITIATIVES
SERIES A (HEALTHCARE FACILITIES REVENUE LOC) 5.50 12/01/2008 1,094,060
260,000 COLORADO HEALTH FACILITIES AUTHORITY EVANGELICAL LUTHERAN
(HEALTHCARE FACILITIES REVENUE LOC) 6.00 12/01/2006 275,189
455,000 COLORADO HEALTH FACILITIES AUTHORITY EVANGELICAL LUTHERAN
(HEALTHCARE FACILITIES REVENUE LOC) 6.25 12/01/2010 515,538
500,000 COLORADO HEALTH FACILITIES AUTHORITY HOSPITAL STEAMBOAT SPRINGS
HEALTH (HEALTHCARE FACILITIES REVENUE LOC) 5.30 09/15/2009 521,580
505,000 COLORADO HEALTH FACILITIES AUTHORITY NATIONAL JEWISH MEDICAL &
RESEARCH CENTER (HEALTHCARE FACILITIES REVENUE LOC) 4.80 01/01/2005 505,000
5,000 COLORADO HOUSING & FINANCE AUTHORITY SINGLE FAMILY PROGRAM SERIES C
(HOUSING REVENUE LOC) 5.00 05/01/2005 5,039
1,000,000 COLORADO STATE STUDENT OBLIGATION BOND AUTHORITY STUDENT LOAN
SERIES II-B GSL INSURED (HIGHER EDUCATION FACILITIES AUTHORITY
REVENUE LOC) 6.20 12/01/2008 1,022,800
385,000 COUNTY OF BOULDER CO DEVELOPMENT OF LONGMONT UNITED HOSPITAL PROJECT
(HEALTHCARE FACILITIES REVENUE LOC) 5.00 12/01/2005 392,246
620,000 COUNTY OF MESA CO HILLTOP COMMUNITY RESOURCES SERIES A RADIAN INSURED
(HEALTHCARE FACILITIES REVENUE LOC) 5.00 12/01/2008 668,341
650,000 COUNTY OF MESA CO HILLTOP COMMUNITY RESOURCES SERIES A RADIAN INSURED
(HEALTHCARE FACILITIES REVENUE LOC) 5.50 12/01/2009 718,835
460,000 COUNTY OF MESA CO HILLTOP COMMUNITY RESOURCES SERIES A RADIAN INSURED
(HEALTHCARE FACILITIES REVENUE LOC) 5.50 12/01/2010 512,408
875,000 DENVER CITY & COUNTY CO ESCROWED TO MATURITY (HOUSING REVENUE LOC) 7.00 08/01/2010 995,216
1,350,000 DENVER CITY & COUNTY CO SERIES A AMBAC INSURED (AIRPORT REVENUE LOC) 4.90 11/15/2008 1,448,942
305,000 DENVER CO HEALTH & HOSPITAL AUTHORITY HEALTH CARE REVENUE SERIES A 5.25 12/01/2005 311,314
41
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLORADO (CONTINUED)
$ 775,000 HIGHLANDS RANCH CO METROPOLITAN DISTRICT #2 FSA INSURED
(PROPERTY TAX REVENUE LOC) 6.50% 06/15/2009 $ 895,094
13,414,890
------------
CONNECTICUT -1.14%
500,000 CONNECTICUT STATE SERIES A (PROPERTY TAX REVENUE LOC) 5.05 04/15/2008 541,180
1,100,000 CONNECTICUT STATE SERIES C (GENERAL OBLIGATION - STATES,
TERRITORIES LOC) 5.00 04/01/2008 1,188,143
1,729,323
------------
DISTRICT OF COLUMBIA - 1.21%
300,000 DISTRICT OF COLUMBIA SERIES B-1 AMBAC INSURED
(PROPERTY TAX REVENUE LOC) 5.50 06/01/2008 328,776
1,500,000 DISTRICT OF COLUMBIA SUBSERIES C-3 XLCA INSURED
(PROPERTY TAX REVENUE LOC)+/-SS. 1.85 06/01/2034 1,500,000
1,828,776
------------
FLORIDA - 4.47%
945,000 BOYNTON BEACH FL FGIC INSURED (WATER REVENUE LOC) 5.00 11/01/2012 1,026,516
130,000 BRADFORD COUNTY FL SANTA FE HEALTHCARE FACILITIES PROJECT ESCROWED TO
MATURITY (HEALTHCARE FACILITIES REVENUE LOC) 6.00 11/15/2009 141,887
1,475,000 BROWARD COUNTY FL SERIES B AMBAC INSURED (WATER REVENUE LOC) 5.00 10/01/2008 1,606,157
540,000 FLORIDA STATE DEPARTMENT OF CORRECTIONS (JAIL FACILITIES REVENUE LOC) 3.40 11/15/2010 540,319
750,000 FLORIDA STATE DEPARTMENT OF CORRECTIONS (JAIL FACILITIES REVENUE LOC) 4.00 11/15/2015 742,327
1,110,000 HILLSBOROUGH COUNTY FL ESCROWED TO MATURITY (SEWER REVENUE LOC) 6.20 12/01/2008 1,187,977
500,000 MIAMI FL DADE COUNTY SCHOOL BOARD SERIES A MBIA INSURED
(LEASE REVENUE LOC) 5.00 08/01/2027 538,485
905,000 NAPLES FL WATER AND SEWER REVENUE (WATER & WASTEWATER AUTHORITY
REVENUE LOC)SS. 5.90 09/01/2013 977,174
6,760,842
------------
GEORGIA - 1.60%
765,000 ATLANTA GA AIRPORT FACILITIES CAPITAL APPRECIATION BONDS MBIA INSURED
(AIRPORT REVENUE LOC)^ 5.37 01/01/2010 586,908
1,700,000 GEORGIA MUNICIPAL ELECTRIC AUTHORITY POWER REVENUE SERIES V (POWER
REVENUE LOC) 6.40 01/01/2007 1,830,288
2,417,196
------------
ILLINOIS - 6.46%
1,820,000 BERWYN IL AMBAC INSURED (PROPERTY TAX REVENUE LOC) 5.00 11/15/2010 1,960,904
700,000 CHICAGO IL METROPOLITAN WATER RECLAMATION DISTRICT GREATER CHICAGO IL
CAPITAL IMPROVEMENT BONDS (PROPERTY TAX REVENUE LOC) 6.90 01/01/2007 745,997
920,000 ILLINOIS HEALTH FACILITIES AUTHORITY LUTHERAN GENERAL HEALTH SYSTEMS
SERIES A FSA INSURED ESCROWED TO MATURITY (HEALTHCARE FACILITIES
REVENUE LOC) 6.13 04/01/2012 1,030,142
470,000 ILLINOIS HEALTH FACILITIES AUTHORITY MERCY HOSPITAL PROJECT ESCROWED
TO MATURITY (HEALTHCARE FACILITIES REVENUE LOC) 7.10 06/01/2009 518,495
500,000 ILLINOIS HEALTH FACILITIES AUTHORITY METHODIST MEDICAL CENTER MBIA
INSURED (HEALTH FACILITIES FINANCING AUTHORITY REVENUE LOC) 5.50 11/15/2010 551,940
800,000 NORTH CHICAGO IL FGIC INSURED (PROPERTY TAX REVENUE LOC) 5.75 01/01/2010 902,632
500,000 SOUTHERN ILLINOIS UNIVERSITY REVENUE HOUSING & AUXILIARY
FACILITIES SYSTEM MBIA INSURED (COLLEGE AND UNIVERSITY REVENUE LOC)^ 2.37 04/01/2006 485,490
250,000 SPRINGFIELD IL WATER REVENUE(WATER & WASTEWATER AUTHORITY REVENUELOC) 5.00 03/01/2008 264,790
3,000,000 STATE OF ILLINOIS SERIES Q (SALES TAX REVENUE LOC) 6.00 06/15/2009 3,317,550
9,777,940
------------
42
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004(UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
INDIANA - 4.46%
$ 1,295,000 DECATUR TOWNSHIP-MARION COUNTY IN METROPOLITAN SCHOOL DISTRICT
SCHOOL BUILDING CORPORATION FIRST MORTGAGE (LEASE REVENUE LOC) 5.20% 09/15/2008 $ 1,372,726
1,000,000 INDIANA BOND BANK COMMON SCHOOL ADVANCE PURCHASE FUNDING SERIES B
MBIA INSURED (OTHER REVENUE LOC) 5.00 02/01/2008 1,073,820
1,000,000 INDIANA BOND BANK COMMON SCHOOL FUND ADVISORY PURCHASE SERIES A
MBIA INSURED 5.00 02/01/2007 1,053,410
850,000 INDIANA EDUCATIONAL FACILITIES AUTHORITY DEPAUW UNIVERSITY PROJECT
(COLLEGE AND UNIVERSITY REVENUE LOC) 5.00 07/01/2012 908,828
1,980,000 INDIANA HEALTH FACILITY FINANCING AUTHORITY UNREFUNDED BALANCE SERIES
A MBIA INSURED (HEALTHCARE FACILITIES REVENUE LOC) 5.50 11/01/2007 2,140,301
200,000 MERRILLVILLE IN MULTI SCHOOL BUILDING CORPORATION FIRST MORTGAGE MBIA
INSURED (LEASE REVENUE LOC) 6.55 07/01/2005 204,454
6,753,539
------------
IOWA - 1.63%
395,000 CLINTON IA COMMUNITY SCHOOL DISTRICT SERIES A (PROPERTY TAX REVENUE
LOC) 5.38 06/01/2005 400,238
1,000,000 IOWA STUDENT LOAN LIQUIDITY CORPORATION SERIES B (HIGHER EDUCATION
FACILITIES AUTHORITY REVENUE LOC) 4.90 12/01/2005 1,024,540
1,000,000 IOWA STUDENT LOAN LIQUIDITY CORPORATION STUDENT LOAN REVENUE SERIES Q
AMBAC INSURED (COLLEGE AND UNIVERSITY REVENUE LOC) 4.55 12/01/2007 1,044,440
2,469,218
------------
LOUISIANA - 1.38%
1,900,000 SHREVEPORT LA SERIES A FGIC INSURED (PROPERTY TAX REVENUE LOC) 5.63 05/01/2008 2,091,900
------------
MASSACHUSETTS- 3.31%
500,000 COMMONWEALTH OF MASSACHUSETTS SERIES A (OTHER REVENUE LOC) 5.25 01/01/2009 548,035
2,410,000 COMMONWEALTH OF MASSACHUSETTS SERIES C (TAX REVENUE LOC) 5.25 12/01/2007 2,602,101
700,000 MASSACHUSETTS DEVELOPMENT FINANCE AGENCY DEVENS ELECTRIC SYSTEMS
(ELECTRIC REVENUE LOC) 5.13 12/01/2011 757,169
1,000,000 MASSACHUSETTS STATE FEDERAL HIGHWAY SERIES A (FUEL SALES TAX REVENUE
LOC) 5.25 06/15/2011 1,100,870
5,008,175
------------
MICHIGAN - 5.66%
325,000 BATTLE CREEK MI ECONOMIC DEVELOPMENT CORPORATION KELLOG COMPANY
PROJECT (INDUSTRIAL DEVELOPMENT REVENUE LOC)+/- 5.13 02/01/2009 332,069
2,000,000 DETROIT MI COBO HALL MBIA INSURED (TAX REVENUE LOC) 5.00 09/30/2008 2,171,120
1,000,000 DETROIT MI DISTRIBUTABLE STATE AID AMBAC INSURED(PROPERTY TAX REVENUE 5.25 05/01/2008 1,087,390
1,445,000 DETROIT MI ESCROWED TO MATURITY (STATE & LOCAL GOVERNMENTS LOC) 7.10 12/15/2009 1,614,787
300,000 LAKEVIEW MI COMMUNITY SCHOOL FGIC INSURED (PROPERTY TAX REVENUE LOC) 6.50 05/01/2005 304,482
305,000 LAKEVIEW MI COMMUNITY SCHOOL FGIC INSURED (PROPERTY TAX REVENUE LOC) 6.50 05/01/2006 321,973
395,000 MERRILL MI COMMUNITY SCHOOL DISTRICT FGIC INSURED (PROPERTY TAX 6.50 05/01/2005 400,901
250,000 MICHIGAN STATE MI HOSPITAL FINANCE AUTHORITY ASCENSION HEALTH CREDIT
SERIES A MBIA INSURED (HEALTHCARE FACILITIES REVENUE LOC) 5.50 11/15/2007 270,473
415,000 MICHIGAN STATE MI HOSPITAL FINANCE AUTHORITY OSF HEALTHCARE SYSTEMS
(HEALTHCARE FACILITIES REVENUE LOC) 5.25 11/15/2006 434,011
435,000 MICHIGAN STATE MI HOSPITAL FINANCE AUTHORITY OSF HEALTHCARE SYSTEMS
(HEALTHCARE FACILITIES REVENUE LOC) 5.38 11/15/2007 464,985
300,000 MICHIGAN STATE MI HOSPITAL FINANCIAL AUTHORITY CHARITY OBLIGATION
GROUP SERIES A PREREFUNDED 05/01/10 @100 (HOSPITAL REVENUE LOC)SS. 5.13 11/01/2029 328,527
2,405,000 ROMULUS TOWNSHIP MI COMMUNITY SCHOOLS CAPITAL APPRECIATION SERIES II
FGIC INSURED PREREFUNDED 05/01/07 @ 36.6958 (PROPERTY TAX REVENUE
LOC)^ 6.20 05/01/2022 834,174
8,564,892
------------
43
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
MINNESOTA - 4.46%
$ 1,000,000 BLOOMINGTON MN PORT AUTHORITY SPECIAL TAX REVENUE MALL OF AMERICA
PROJECT SERIES A (SPECIAL TAX REVENUE LOC) 4.70% 02/01/2007 $ 1,049,850
100,000 CHASKA MN INDEPENDENT SCHOOL DISTRICT NO 112 SERIES B (PROPERTY TAX
REVENUE LOC) 6.00 02/01/2014 103,894
405,000 CITY OF MINNEAPOLIS MN ALLINA HEALTH SYSTEMS SERIES A
(HEALTHCARE FACILITIES REVENUE LOC) 5.00 11/15/2008 432,755
300,000 DULUTH MN ECONOMIC DEVELOPMENT AUTHORITY HEALTH CARE FACILITIES
BENEDICTINE HEALTH SYSTEMS - ST. MARYS (HEALTHCARE FACILITIES REVENUE
LOC) 4.50 02/15/2006 306,540
250,000 DULUTH MN ECONOMIC DEVELOPMENT AUTHORITY HEALTH CARE FACILITIES
BENEDICTINE HEALTH SYSTEMS - ST. MARYS (HEALTHCARE FACILITIES REVENUE
LOC) 4.50 02/15/2007 259,502
500,000 DULUTH MN ECONOMIC DEVELOPMENT AUTHORITY HEALTH CARE FACILITIES
BENEDICTINE HEALTH SYSTEMS - ST. MARYS (HEALTHCARE FACILITIES REVENUE
LOC) 4.50 02/15/2008 522,605
1,200,000 MINNEAPOLIS & ST. PAUL MN HOUSING & REDEVELOPMENT AUTHORITY HEALTH
CARE SYSTEMS HEALTH PARTNERS OBLIGATION GROUP PJ
(HEALTHCARE FACILITIES REVENUE LOC) 5.25 12/01/2008 1,274,760
225,000 MINNESOTA AGRICULTURAL & ECONOMIC DEVELOPMENT BOARD EVANGELICAL
LUTHERAN PROJECT (HEALTHCARE FACILITIES REVENUE LOC) 5.00 02/01/2006 230,265
230,000 MINNESOTA AGRICULTURAL & ECONOMIC DEVELOPMENT BOARD EVANGELICAL
LUTHERAN PROJECT (HEALTHCARE FACILITIES REVENUE LOC) 5.00 02/01/2007 239,644
250,000 MINNESOTA AGRICULTURAL & ECONOMIC DEVELOPMENT BOARD EVANGELICAL
LUTHERAN PROJECT (HEALTHCARE FACILITIES REVENUE LOC) 5.00 02/01/2008 262,820
365,000 MINNESOTA STATE MN HIGHER EDUCATION FACILITIES AUTHORITY STATE
SCHOLASTICAL SERIES 5-J (COLLEGE AND UNIVERSITY REVENUE LOC) 4.88 12/01/2007 383,133
1,000,000 ROCHESTER MN HEALTHCARE FACILITIES REVENUE MAYO FOUNDATION MAYO
MEDICAL CENTER-SERIES I (HEALTHCARE FACILITIES REVENUE LOC) 5.80 11/15/2007 1,089,570
515,000 WESTERN MINNESOTA MUNICIPAL POWER AGENCY 1977 SERIES A (ELECTRIC
REVENUE LOC) 6.38 01/01/2016 594,248
6,749,586
------------
MISSISSIPPI -3.62%
1,000,000 STATE OF MISSISSIPPI (TAX REVENUE LOC) 5.25 09/01/2007 1,074,960
4,010,000 STATE OF MISSISSIPPI ESCROWED TO MATURITY (PROPERTY TAX REVENUE LOC) 6.20 02/01/2008 4,396,163
5,471,123
------------
MISSOURI - 0.73%
1,000,000 MISSOURI STATE BOARD PUBLIC BUILDINGS SPECIAL OBLIGATION SERIES A
(RECREATIONAL FACILITIES REVENUE LOC) 5.25 10/15/2008 1,098,590
------------
NEBRASKA - 1.45%
1,500,000 NEBRASKA PUBLIC POWER DISTRICT SERIES A (ELECTRIC REVENUE LOC) 5.25 01/01/2006 1,545,615
600,000 NEBRASKA PUBLIC POWER DISTRICT SERIES A (POWER REVENUE LOC) 5.00 01/01/2009 652,470
2,198,085
------------
NEVADA - 0.81%
645,000 SPARKS NV REDEVELOPMENT AGENCY SERIES A RADIAN INSURED
(TAX INCREMENTAL REVENUE LOC) 5.10 01/15/2008 687,183
500,000 WASHOE COUNTY NV AIRPORT AUTHORITY FGIC INSURED (AIRPORT REVENUE LOC) 5.25 07/01/2008 542,485
1,229,668
------------
NEW JERSEY - 0.50%
500,000 NEW JERSEY HEALTH CARE FACILITIES FINANCING AUTHORITY CAPITAL HEALTH
SYSTEMS OBLIGATION GROUP (HEALTHCARE FACILITIES REVENUE LOC) 5.00 07/01/2005 505,500
225,000 NEW JERSEY STATE HIGHWAY AUTHORITY GARDEN STATE PARKWAY GENERAL
REVENUE (TOLL ROAD REVENUE LOC) 6.20 01/01/2010 254,547
760,047
------------
44
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
NEW YORK - 4.00%
$ 1,000,000 CITY OF NEW YORK NY SERIES E (PROPERTY TAX REVENUE LOC) 5.25% 08/01/2009 $ 1,095,210
1,000,000 METROPOLITAN TRANSPORTATION AUTHORITY NY REVENUE SERIES G-1
(TRANSPORTATION REVENUE LOC)+/-SS. 1.97 11/01/2026 1,000,000
200,000 NEW YORK NY SERIES D FGIC INSURED (PROPERTY TAX REVENUE LOC) 5.25 08/01/2006 209,318
500,000 NEW YORK STATE DORMITORY AUTHORITY STATE PERSONAL INCOME TAX SERIES A
(TAX REVENUE LOC) 5.00 03/15/2008 538,240
1,000,000 NEW YORK STATE THRUWAY AUTHORITY UNREFUNDED BALANCE LOCAL HIGHWAY &
BRIDGES (OTHER REVENUE LOC) 5.25 04/01/2010 1,078,450
1,890,000 TRIBOROUGH BRIDGE & TUNNEL AUTHORITY NY CONVENTION CENTER PROJECT
SERIES E MBIA INSURED (OTHER REVENUE LOC) 7.25 01/01/2010 2,125,022
6,046,240
------------
NORTH DAKOTA - 0.72%
1,000,000 NORTH DAKOTA BUILDING AUTHORITY SERIES A FGIC INSURED
(LEASE REVENUE LOC) 5.25 06/01/2008 1,085,740
------------
OHIO - 4.68%
90,000 AKRON OH AKRON MUNICIPAL BASEBALL STADIUM PROJECT (LEASE REVENUE LOC) 6.50 12/01/2007 97,603
970,000 COLUMBUS OH SERIES 1 (PROPERTY TAX REVENUE LOC) 6.00 06/15/2007 1,038,114
1,000,000 FRANKLIN COUNTY OH AMERICAN CHEMICAL SOCIETY PROJECT
(INDUSTRIAL DEVELOPMENT REVENUE LOC) 5.13 10/01/2008 1,078,110
1,000,000 LUCAS COUNTY OH PROMEDICAL HEALTHCARE OBLIGATION MBIA INSURED
(HEALTHCARE FACILITIES REVENUE LOC) 6.00 11/15/2007 1,082,780
900,000 OHIO STATE WATER DEVELOPMENT AUTHORITY WATER DEVELOPMENT PURE WATER
AMBAC INSURED (WATER REVENUE LOC) 5.00 06/01/2008 973,935
2,000,000 STATE OF OHIO (PROPERTY TAX REVENUE LOC) 6.65 09/01/2009 2,207,460
560,000 STATE OF OHIO INFRASTRUCTURE IMPROVEMENT SERIES B
(PROPERTY TAX REVENUE LOC) 5.00 03/01/2008 603,484
7,081,486
------------
OREGON - 0.89%
555,000 COLUMBIA OR UTILITY DISTRICT ELECTRIC SYSTEMS REVENUE SERIES A MBIA
INSURED (UTILITIES REVENUE LOC) 5.50 12/01/2009 617,249
700,000 GRANTS PASS OR URBAN RENEWAL AGENCY PARKWAY REDEVELOPMENT AREA
(TAX INCREMENTAL REVENUE LOC) 5.00 08/01/2008 730,849
1,348,098
------------
PENNSYLVANIA - 0.53%
780,000 WINDBER AREA AUTHORITY PA WINDBER HOSPITAL PROJECT FHA INSURED
PREREFUNDED 08/01/05 @ 102 (HEALTHCARE FACILITIES REVENUE LOC)SS. 6.50 08/01/2005 806,848
------------
RHODE ISLAND - 0.96%
320,000 WOONSOCKET RI HOUSING AUTHORITY CAPITAL FUNDS HOUSING
(HOUSING REVENUE LOC) 4.50 09/01/2006 331,117
335,000 WOONSOCKET RI HOUSING AUTHORITY CAPITAL FUNDS HOUSING
(HOUSING REVENUE LOC) 4.50 09/01/2007 352,135
350,000 WOONSOCKET RI HOUSING AUTHORITY CAPITAL FUNDS HOUSING
(HOUSING REVENUE LOC) 4.50 09/01/2008 372,256
365,000 WOONSOCKET RI HOUSING AUTHORITY CAPITAL FUNDS HOUSING
(HOUSING REVENUE LOC) 4.50 09/01/2009 390,076
1,445,584
------------
SOUTH CAROLINA - 1.42%
2,000,000 SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY IMPROVEMENT
PALMETTO HEALTHCARE (HEALTHCARE FACILITIES REVENUE LOC) 5.25 08/01/2011 2,144,220
------------
45
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
SOUTH DAKOTA - 2.11%
$ 1,220,000 HEARTLAND SD CONSUMERS POWER DISTRICT FSA INSURED (ELECTRIC REVENUE
LOC) 6.00% 01/01/2009 $ 1,323,237
1,000,000 RAPID CITY SD AREA SCHOOL DISTRICT #51-4 CAPITAL OUTLAY
CERTIFICATIONS FSA INSURED (PROPERTY TAX REVENUE LOC) 5.00 01/01/2009 1,072,670
745,000 SOUTH DAKOTA HEALTH & EDUCATIONAL FACILITIES AUTHORITY HEALTHCARE
PRAIRIE ACA INSURED (HEALTHCARE FACILITIES REVENUE LOC) 5.20 04/01/2008 793,216
3,189,123
------------
TENNESSEE - 4.22%
2,600,000 JACKSON TN WATER AND SEWER REVENUE (WATER & WASTEWATER
AUTHORITY REVENUE LOC) 6.30 07/01/2011 2,888,938
1,000,000 MEMPHIS-SHELBY COUNTY AIRPORT AUTHORITY FEDERAL EXPRESS CORPORATION
(INDUSTRIAL DEVELOPMENT REVENUE LOC) 5.00 09/01/2009 1,066,680
1,215,000 SHELBY COUNTY TN PUBLIC IMPROVEMENT & SCHOOL SERIES A MBIA INSURED
(PROPERTY TAX REVENUE LOC) 5.00 03/01/2008 1,309,734
1,000,000 TENNESSEE HOUSING DEVELOPMENT AGENCY HOMEOWNERSHIP PROGRAM SERIES 1
(HOUSING REVENUE LOC) 5.65 07/01/2009 1,036,800
75,000 TENNESSEE STATE PREREFUNDED SERIES A (OTHER REVENUE LOC) 5.00 05/01/2007 79,648
6,381,800
------------
TEXAS - 10.70%
1,000,000 BRAZOS RIVER TX HARBOR NAVIGATION DISTRICT DOW CHEMICAL COMPANY
PROJECT SERIES B-1 (INDUSTRIAL DEVELOPMENT REVENUE LOC)+/- 4.20 05/15/2005 1,006,140
515,000 CITY OF HOUSTON TX ESCROWED TO MATURITY (AIRPORT REVENUE LOC) 6.25 07/01/2012 581,522
240,000 DENISON HOUSING AUTHORITY MANNING PARK PLAZA HUD INSURED (HOUSING
REVENUE LOC) 5.00 10/01/2009 250,313
70,000 DESOTO HOUSING FINANCE CORPORATION WINDSOR FOUNDATION PROJECT
SERIES A ESCROWED TO MATURITY (HOUSING REVENUE LOC) 6.13 02/01/2005 70,218
400,000 GULF COAST INDUSTRIAL DEVELOPMENTAL AUTHORITY MOBIL OIL CORPORATION
PROJECT GUARANTEE AGREEMENT (INDUSTRIAL DEVELOPMENT REVENUE LOC) 4.95 07/01/2007 424,408
240,000 HARLANDALE TX INDEPENDENT SCHOOL DISTRICT ESCROWED TO MATURITY
(LEASE REVENUE LOC) 5.20 10/15/2006 251,518
2,330,000 HARRIS COUNTY HOUSTON TX SPORTS AUTHORITY SENIOR LIEN SERIES A MBIA
INSURED (SPECIAL TAX REVENUE LOC) 5.25 11/15/2007 2,507,802
1,040,000 HARRIS COUNTY TX PERMANENT IMPROVEMENT 5.50 10/01/2007 1,126,133
1,380,000 LOWER COLORADO RIVER AUTHORITY TRANSMISSION SERVICES CORPORATION
PROJECT SERIES C (OTHER REVENUE LOC) 5.00 05/15/2006 1,429,818
275,000 LUFKIN TX HEALTH FACILITIES DEVELOPMENT CORPORATION MEMORIAL HEALTH
SYSTEMS OF EAST TEXAS (HEALTHCARE FACILITIES REVENUE LOC) 6.50 02/15/2006 284,003
815,000 LUFKIN TX HEALTH FACILITIES DEVELOPMENT CORPORATION HEALTH SYSTEM
REVENUE MEMORIAL HEALTH SYSTEM OF EAST TEXAS (HEALTH FACILITIES
FINANCING AUTHORITY REVENUE LOC) 5.00 02/15/2008 840,787
700,000 LYFORD TX CONSOLIDATED SCHOOL DISTRICT (LEASE REVENUE LOC) 5.00 08/15/2007 732,074
2,435,000 MIDLAND COUNTY TX HOSPITAL DISTRICT CAPITAL APPRECIATION AMBAC INSURED
(HEALTHCARE FACILITIES REVENUE LOC)^ 5.13 06/01/2007 2,154,244
3,000,000 SAM RAYBURN TX MUNICIPAL POWER AGENCY MBIA INSURED (ELECTRIC REVENUE
LOC)SS. 6.00 09/01/2010 3,400,830
1,025,000 TEXAS STATE DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS MULTI FAMILY
REVENUE ASMARA PROJECT SERIES A (HOUSING REVENUE LOC)SS. 6.40 01/01/2027 1,126,055
16,185,865
------------
UTAH - 0.37%
500,000 INTERMOUNTAIN POWER AGENCY UT SERIES A MBIA INSURED (ELECTRIC REVENUE
LOC) 6.00 07/01/2008 556,880
------------
46
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
WASHINGTON - 6.20%
$ 1,000,000 COWLITZ COUNTY WA PUBLIC UTILITY DISTRICT #1 DISTRIBUTION SYSTEMS
AMBAC INSURED (ELECTRIC REVENUE LOC) 5.25% 09/01/2009 $ 1,103,080
950,000 PORT ANACORTES WA SERIES A (AIRPORT REVENUE LOC) 5.13 09/01/2009 1,001,262
495,000 PORT SEATTLE WA SERIES D MBIA INSURED (AIRPORT REVENUE LOC) 5.50 02/01/2007 524,952
1,345,000 SKAGIT COUNTY WASHINGTON PUBLIC HOSPITAL DISTRICT 4.75 12/01/2007 1,378,356
1,330,000 SPOKANE WA FGIC INSURED (PROPERTY TAX REVENUE LOC) 5.00 06/01/2008 1,436,852
1,155,000 STATE OF WASHINGTON SERIES A & AT-6 (TAX REVENUE LOC) 6.25 02/01/2011 1,309,239
695,000 TACOMA WA DEPARTMENT OF PUBLIC UTILITY & LIGHT DIVISION ESCROWED
TO MATURITY (ELECTRIC REVENUE LOC) 4.20 01/01/2008 731,828
555,000 TACOMA WA DEPARTMENT OF PUBLIC UTILITY & LIGHT DIVISION ESCROWED TO
MATURITY (ELECTRIC REVENUE LOC) 4.20 07/01/2008 587,773
800,000 WASHINGTON HEALTH CARE FACILITIES AUTHORITY GOOD SAMARITAN HOSPITAL
RADIAN INSURED (HEALTHCARE FACILITIES REVENUE LOC) 5.00 10/01/2008 859,552
400,000 WASHINGTON STATE PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NUMBER 1
PREREFUNDED-SERIES B (ELECTRIC REVENUE LOC) 7.25 07/01/2009 452,036
9,384,930
------------
WEST VIRGINIA - 0.71%
200,000 KANAWHA COUNTY WV FGIC INSURED ESCROWED TO MATURITY (HOUSING REVENUE
LOC) 7.38 09/01/2011 246,918
745,000 WEST VIRGINIA WATER DEVELOPMENT AUTHORITY SEWER SYSTEMS LOAN PROGRAM
ESCROWED TO MATURITY (SEWER REVENUE LOC) 7.10 11/01/2009 834,668
1,081,586
------------
WISCONSIN - 0.71%
1,000,000 WISCONSIN STATE PETROLEUM INSPECTION FEE REVENUE SERIES I FSA INSURED
(SPECIAL TAX REVENUE LOC) 5.00 07/01/2008 1,081,540
------------
TOTAL MUNICIPAL BONDS & NOTES (COST $139,092,185) 141,517,445
------------
SHARES
SHORT-TERM INVESTMENTS - 5.09%
7,695,000 WELLS FARGO NATIONAL TAX-FREE MONEY MARKET TRUST~++ 7,695,000
------------
TOTAL SHORT-TERM INVESTMENTS (COST $7,695,000) 7,695,000
------------
TOTAL INVESTMENTS IN SECURITIES
(COST $146,787,185)* 98.60% $149,212,445
OTHER ASSETS AND LIABILITIES, NET 1.40 2,119,724
------ ------------
TOTAL NET ASSETS 100.00% $151,332,169
====== ============
+/- VARIABLE RATE SECURITIES.
^ ZERO COUPON/ STEPPED COUPON BOND. INTEREST RATE PRESENTED IS YIELD TO
MATURITY.
~ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY
PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND DOES NOT PAY AN
INVESTMENT ADVISORY FEE FOR SUCH INVESTMENTS.
++ SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $7,695,000.
SS. THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE
EFFECTIVE MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS SUBSTANTIALLY THE SAME AS FOR
FINANCIAL REPORTING PURPOSES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
47
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
INVESTMENT COMPANIES - 5.51%
60,485 BLACKROCK STRATEGIC MUNICIPAL TRUST $ 878,242
380,000 DREYFUS MUNICIPAL INCOME FUND 3,800,000
91,802 DREYFUS STRATEGIC MUNICIPAL BOND FUND 781,235
103,352 MUNICIPAL ADVANTAGE FUND INCORPORATED 1,343,576
115,082 NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 1,711,269
204,862 NUVEEN INSURED MUNICIPAL OPPORTUNITY FUND 3,216,334
116,037 NUVEEN PREMIUM INCOME MUNICIPAL FUND 1,611,754
30,612 SALOMON BROTHERS MUNICIPAL PARTNERS FUND INCORPORATED 411,731
91,984 SELIGMAN SELECT MUNICIPAL FUND 952,034
57,005 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST 828,283
45,072 VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II 607,120
91,637 VAN KAMPEN TRUST FOR INVESTMENT GRADE MUNICIPALS 1,369,973
TOTAL INVESTMENT COMPANIES (COST $14,563,804) 17,511,551
------------
PRINCIPAL INTEREST RATE MATURITY DATE
MUNICIPAL BONDS & NOTES - 93.37%
ALABAMA - 3.26%
$ 35,000 ALABAMA HOUSING FINANCE AUTHORITY SERIES B COLLEGE HOME MORTGAGE
BOARD PROGRAM (HOUSING REVENUE LOC) 6.10% 10/01/2020 35,810
1,815,000 ALABAMA STATE BOARD EDUCATION TUITION REVENUE JOHN C. CALHOUN
COMMUNITY COLLEGE-A (COLLEGE AND UNIVERSITY REVENUE LOC) 5.25 05/01/2023 1,971,725
1,000,000 COUNTY OF JEFFERSON AL CAPITAL IMPROVEMENTS WASTE SERIES D
(SEWER REVENUE LOC)SS. 5.25 02/01/2022 1,130,780
8,000,000 MONTGOMERY AL BMC SPECIAL CARE FACILITIES FINANCING AUTHORITY
BAPTIST HEALTH SERIES A-2 MBIA INSURED (SPECIAL FACILITIES REVENUE
LOC)^ 4.20 11/15/2019 7,205,520
10,343,835
ALASKA - 0.55% ------------
1,615,000 ANCHORAGE AL SERIES C MBIA INSURED (RECREATIONAL FACILITIES REVENUE
LOC) 5.00 12/01/2017 1,758,509
------------
ARIZONA - 3.36%
1,000,000 ARIZONA POWER AUTHORITY CROSSOVER SERIES A SPL OBLIG-REF-HOOV
(OTHER REVENUE LOC) 5.25 10/01/2014 1,129,780
500,000 CHANDLER AZ (FUEL SALES TAX REVENUE LOC) 6.00 07/01/2011 582,210
630,000 GLENDALE INDUSTRIAL DEVELOPMENT AUTHORITY AZ UNREFUNDED BALANCE
SERIES A (COLLEGE AND UNIVERSITY REVENUE LOC) 6.00 05/15/2026 669,262
200,000 MARICOPA COUNTY AZ ELEMENTARY SCHOOL DISTRICT NO.68 ALHAMBRA
(PROPERTY TAX REVENUE LOC) 5.50 07/01/2013 229,348
2,000,000 MARICOPA COUNTY AZ INDUSTRIAL DEVELOPMENT AUTHORITY SERIES A CATHOLIC
HEALTHCARE WEST PROJECT (HEALTHCARE FACILITIES REVENUE LOC) 5.00 07/01/2016 2,057,340
750,000 MARICOPA COUNTY AZ INDUSTRIAL DEVELOPMENT AUTHORITY SERIES A
WHISPERING PALMS APARTMENTS (HOUSING REVENUE LOC) 5.85 07/01/2019 796,725
810,000 MARICOPA COUNTY AZ INDUSTRIAL DEVELOPMENT AUTHORITY SERIES B GRAN
VICTORIA HOUSING LLC PROJECT (HOUSING REVENUE LOC) 10.00 05/01/2031 812,025
215,000 NAVAJO COUNTY AZ MUNICIPAL PROPERTY CORPORATION JAIL FACILITIES
(LEASE REVENUE LOC) 5.63 07/01/2010 236,661
250,000 PHOENIX AZ INDUSTRIAL DEVELOPMENT AUTHORITY CAPITAL MALL LLC PROJECT
(LEASE REVENUE LOC) 5.38 09/15/2022 273,770
900,000 PHOENIX AZ INDUSTRIAL DEVELOPMENT AUTHORITY JOHN C. LINCOLN HEALTH
SERIES B (HEALTHCARE FACILITIES REVENUE LOC) 5.65 12/01/2012 988,812
85,000 PHOENIX AZ INDUSTRIAL DEVELOPMENT AUTHORITY SERIES 1A
(HOUSING REVENUE LOC) 6.25 09/01/2032 85,378
48
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
ARIZONA (CONTINUED)
$ 95,000 PHOENIX AZ INDUSTRIAL DEVELOPMENT AUTHORITY STATEWIDE SERIES C
(HOUSING REVENUE LOC) 5.30% 04/01/2020 $ 98,334
1,440,000 PIMA COUNTY AZ INDUSTRIAL DEVELOPMENT AUTHORITY WILLOWICK APARTMENT
PROJECT (HOUSING REVENUE LOC) 5.50 03/01/2028 1,438,013
300,000 SCOTTSDALE AZ PRESERVATION AUTHORITY (SALES TAX REVENUE LOC) 5.25 07/01/2017 329,373
500,000 TUCSON AZ SENIOR LIEN SERIES 1994-C (FUEL SALES TAX REVENUE LOC) 7.00 07/01/2012 619,030
275,000 UNIVERSITY OF ARIZONA SYSTEMS SERIES A (COLLEGE AND UNIVERSITY REVENUE
LOC) 6.00 06/01/2010 316,132
10,662,193
------------
CALIFORNIA - 7.64%
2,500,000 ACCESS TO LOANS FOR LEARNING STUDENT LOAN CORPORATION CA SERIES D-2
STUDENT
LOAN PG-JR-SUB-IV (COLLEGE AND UNIVERSITY REVENUE LOC) 7.85 07/01/2025 2,471,175
2,365,000 CERRITOS CA PUBLIC FINANCING AUTHORITY REVENUE TAX ALLOCATION
REDEVELOPMENT PROJECT SERIES A AMBAC INSURED (TAX INCREMENTAL REVENUE
LOC) 5.00 11/01/2016 2,621,437
2,000,000 LOS ANGELES COUNTY CA METROPOLITAN TRANSPORTATION AUTHORITY SERIES B
MBIA INSURED (SALES TAX REVENUE LOC) 4.50 07/01/2021 2,028,220
6,900,000 METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA SERIES A6
(WATER REVENUE LOC)+/-! 8.84 08/10/2018 9,367,026
1,020,000 NAPA VALLEJO WASTE MANAGEMENT AUTHORITY SOLID WASTE TRANSFER FACILITY
(SOLID WASTE REVENUE LOC) 5.30 02/15/2012 1,068,960
775,000 PICO RIVERA CA WATER AUTHORITY SERIES A (WATER REVENUE LOC) 5.75 12/01/2012 807,953
225,000 SAN FRANCISCO CA AIRPORT IMPROVEMENT AIRPORT UNITED AIRLINES
INCORPORATED (AIRPORT REVENUE LOC) 8.00 07/01/2013 270,569
3,000,000 SAN JOAQUIN HILLS CALIFORNIA TRANSPORTATION CORRIDOR AGENCY TOLL ROAD
REVENUE SERIES A-CAP APPRECIATION (TOLL ROAD REVENUE LOC)^ 5.42 01/15/2035 601,800
4,975,000 STUDENT EDUCATION LOAN MARKETING CORPORATION CA SERIES IV D1 JUNIOR
SUBORDINATES (HIGHER EDUCATION FACILITIES AUTHORITY REVENUE LOC) 5.88 01/01/2018 5,067,237
24,304,377
------------
COLORADO - 8.15%
1,750,000 ARAPAHOE COUNTY CO WATER & WASTEWATER AUTHORITY REVENUE (WATER REVENUE
LOC)SS. 6.25 12/01/2020 1,891,120
1,360,000 BLACK HAWK CO BUSINESS IMPROVEMENT DISTRICT SPECIAL IMPROVEMENTS
DISTRICT #98-1 (SPECIAL TAX REVENUE LOC) 7.00 12/01/2011 1,373,029
200,000 COLORADO EDUCATIONAL & CULTURAL FACILITIES AUTHORITY CHARTER SCHOOL
CORE
KNOWLEDGE PROJECT (LEASE REVENUE LOC)SS. 7.00 11/01/2029 236,920
1,800,000 COLORADO HEALTH FACILITIES AUTHORITY STEAMBOAT SPRINGS HEALTH PROJECT
(HEALTHCARE FACILITIES REVENUE LOC) 5.70 09/15/2023 1,841,562
1,615,000 COLORADO HOUSING & FINANCE AUTHORITY AMT- SINGLE FAMILY
PROGRAM-SERIES A MBIA INSURED (SINGLE FAMILY HOUSING REVENUE LOC) 6.50 08/01/2031 1,641,777
755,000 COLORADO HOUSING & FINANCE AUTHORITY CO SINGLE FAMILY PROGRAM
SERIES B-2 (HOUSING REVENUE LOC) 7.10 04/01/2017 774,162
60,000 COLORADO HOUSING & FINANCE AUTHORITY CO SINGLE FAMILY PROGRAM SERIES C
(HOUSING REVENUE LOC) 7.90 12/01/2024 62,087
1,900,000 COLORADO HOUSING & FINANCE AUTHORITY MULTIFAMILY WINRIDGE APARTMENTS
PROJECT (HOUSING REVENUE LOC)+/-SS. 2.00 02/15/2028 1,900,000
35,000 COLORADO HOUSING & FINANCE AUTHORITY SERIES B-2 SINGLE FAMILY PROJECT
(HOUSING REVENUE LOC) 7.50 12/01/2016 35,233
2,680,000 COLORADO HOUSING & FINANCE AUTHORITY SINGLE FAMILY PG-B3-FSA-CR
(HOUSING REVENUE LOC) 6.70 08/01/2017 2,731,563
120,000 COLORADO HOUSING & FINANCE AUTHORITY SINGLE FAMILY PROGRAM SERIES A-2
(HOUSING REVENUE LOC) 7.15 11/01/2014 121,435
49
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLORADO (CONTINUED)
$ 1,135,000 COLORADO HOUSING AND FINANCE AUTHORITY SINGLE FAMILY PROGRAM
SERIES D-2 (SINGLE FAMILY HOUSING REVENUE LOC) 6.90% 04/01/2029 $ 1,162,399
500,000 DENVER CITY & COUNTY CO THE BOSTON LOFTS PROJECT SERIES A
(HOUSING REVENUE LOC) 5.75 10/01/2027 514,150
5,200,000 DENVER URBAN RENEWAL AUTHORITY CO TAX EXEMPT RICE SERIES A
(PROPERTY TAX REVENUE LOC) 9.13 09/01/2017 5,280,652
1,500,000 DOUGLAS COUNTY CO AUTUMN CHASE PROJECT (HOUSING REVENUE LOC)+/-SS. 2.00 12/01/2029 1,500,000
3,245,000 LITTLETON CO BUILDING CORPORATION CERTIFICATIONS PARTNERS
(LEASE REVENUE LOC) 5.13 12/01/2018 3,511,869
830,000 NORTHERN METROPOLITAN DISTRICT ADAMS COUNTY CO (OTHER REVENUE LOC) 6.50 12/01/2016 838,259
420,000 SUMMIT COUNTY CO KEYSTONE RESORTS MANAGEMENT PROJECT
(OTHER REVENUE LOC) 7.38 09/01/2010 504,311
25,920,528
------------
DISTRICT OF COLUMBIA - 1.55%
3,850,000 DISTRICT OF COLUMBIA CAPITAL APPRECIATION MANDARIN ORIENTAL
(TAX INCREMENTAL REVENUE LOC)^ 4.47 07/01/2015 2,434,008
2,500,000 DISTRICT OF COLUMBIA SUBSERIES C-3 XLCA INSURED (PROPERTY TAX REVENUE
LOC)+/-SS. 1.85 06/01/2034 2,500,000
4,934,008
------------
FLORIDA - 1.45%
505,000 BOYNTON BEACH FL HOUSING MORTGAGE CLIPPER COVE APARTMENTS
(HOUSING REVENUE LOC)SS. 6.45 01/01/2027 536,048
500,000 FLORIDA HOUSING FINANCE AGENCY HOUSING GLEN OAKS APARTMENTS PROJECT
(HOUSING REVENUE LOC) 5.90 02/01/2030 517,955
3,440,000 PALM BEACH COUNTY HOUSING FINANCE AUTHORITY HOUSING REVENUE SERIES A
(HOUSING REVENUE LOC) 4.85 04/01/2032 3,526,103
4,580,106
------------
GEORGIA - 0.30%
500,000 FULTON COUNTY HOUSING AUTHORITY CONCORDE PLACE APARTMENT PROJECT
SERIES C (HOUSING REVENUE LOC)SS. 6.90 07/01/2008 568,970
380,000 GEORGIA STATE HOUSING & FINANCE AUTHORITY SINGLE FAMILY MORTGAGE
SERIES B-2 (HOUSING REVENUE LOC) 5.85 12/01/2028 392,669
961,639
------------
GUAM - 0.02%
60,000 GUAM HOUSING CORPORATION SERIES A MORTGAGE -GUARANTEED MORTGAGE BACKED
SECURITIES (HOUSING REVENUE LOC) 5.75 09/01/2031 65,925
------------
HAWAII - 0.09%
300,000 HAWAII STATE HOUSING FINANCE & DEVELOPMENT CORPORATION SERIES A
(HOUSING REVENUE LOC) 5.75 07/01/2030 301,710
------------
IDAHO - 0.33%
80,000 AMMON URBAN RENEWAL AGENCY ID TAX INCREMENT SERIES B
(TAX INCREMENTAL REVENUE LOC)SS. 6.00 08/01/2014 84,425
150,000 IDAHO HEALTH FACILITIES AUTHORITY IHC HOSPITALS INCORPORATED
(HEALTHCARE FACILITIES REVENUE LOC)+/- 6.65 02/15/2021 194,874
425,000 IDAHO HOUSING & FINANCE ASSOCIATION SINGLE FAMILY MORTGAGE SERIES H-2
(HOUSING REVENUE LOC) 6.15 01/01/2028 441,532
310,000 IDAHO HOUSING AGENCY SINGLE FAMILY MORTGAGE SERIES C-2
(HOUSING REVENUE LOC) 6.35 07/01/2015 316,557
1,037,388
------------
50
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
ILLINOIS - 9.06%
$ 2,250,000 CHICAGO HOUSING AUTHORITY IL (HOUSING REVENUE LOC) 5.38% 07/01/2019 $ 2,427,592
500,000 CHICAGO IL GNMA COLLEGE BELLA PROJECT (HOUSING REVENUE LOC) 6.13 06/01/2039 519,795
2,495,000 CHICAGO IL SERIES B (AIRPORT REVENUE LOC) 5.38 01/01/2017 2,741,930
1,535,000 ILLINOIS DEVELOPMENT FINANCE AUTHORITY SERIES A COMMUNITY
REHABILITATION PREREFUNDEDSS. 7.88 07/01/2005 1,606,270
235,815 ILLINOIS DEVELOPMENT FINANCE AUTHORITY SERIES A UNREFUNDED BALANCE
COMMUNITY REHABILITATION 7.88 07/01/2020 172,499
4,000,000 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUE
(COLLEGE AND UNIVERSITY REVENUE LOC)SS. 5.75 07/01/2012 4,277,040
4,000,000 ILLINOIS HEALTH FACILITIES AUTHORITY OSF HEALTHCARE SYSTEM
(HEALTHCARE FACILITIES REVENUE LOC) 6.25 11/15/2029 4,237,880
200,000 ILLINOIS HOUSING DEVELOPMENT AUTHORITY MULTI-FAMILY HOUSING
(HOUSING REVENUE LOC) 7.00 07/01/2017 202,020
1,000,000 ILLINOIS STATE SERIES A (OTHER REVENUE LOC) 5.00 10/01/2018 1,073,160
500,000 JACKSON & WILLIAMSON COUNTIES IL COMMUNITY HIGH SCHOOL DISTRICT NO.165
(PROPERTY TAX REVENUE LOC)SS. 6.25 12/01/2015 572,035
7,350,000 REGIONAL TRANSPORTATION AUTHORITY IL SERIES D (SALES TAX REVENUE LOC) 7.75 06/01/2019 9,921,324
1,000,000 ROCKFORD IL FAUST LANDMARK APARTMENTS PROJECT SERIES A
(HOUSING REVENUE LOC) 6.75 01/01/2018 1,070,350
28,821,895
------------
INDIANA - 2.37%
1,400,000 EVANSVILLE-VANDERBURGH COUNTY IN BUILDING AUTHORITY EXCISE INCOME TAX 5.00 08/01/2012 1,543,962
1,015,000 HAMILTON SOUTHEASTERN IN CUMBERLAND CAMPUS SCHOOL BUILDING CORPORATION
SERIES A FSA INSURED (GENERAL OBLIGATION - SCHOOL DISTRICTS LOC) 5.00 07/15/2018 1,088,953
2,515,000 INDIANA HEALTH FACILITY FINANCING AUTHORITY ASCENSION HEALTH SERIES F
(HEALTHCARE FACILITIES REVENUE LOC) 5.50 11/15/2018 2,743,161
25,000 INDIANA STATE TOLL FINANCE AUTHORITY (LEASE REVENUE LOC) 6.00 07/01/2013 25,621
290,000 INDIANAPOLIS LOCAL PUBLIC IMPROVEMENTS BOARD BANK SERIES B
(OTHER REVENUE LOC) 6.00 01/10/2020 347,620
1,610,000 MICHIGAN CITY IN INDEPENDENT SCHOOL BUILDING CORPORATION FIRST
MORTGAGE MBIA INSURED (LEASE REVENUE LOC) 5.00 07/01/2012 1,772,562
7,521,879
------------
IOWA - 0.08%
275,000 IOWA FINANCE AUTHORITY SERIES F (HOUSING REVENUE LOC) 5.70 01/01/2027 278,212
------------
KANSAS - 1.15%
1,135,000 SEDGWICK & SHAWNEE COUNTIES KS SERIES A2 MORTGAGE BACKED SECURITIES
(HOUSING REVENUE LOC)+/- 6.70 06/01/2029 1,135,000
2,435,000 SEDGWICK & SHAWNEE COUNTIES MORTGAGE BACKED SECURITIES PROGRAM SERIES
B-4 (HOUSING REVENUE LOC)+/- 5.90 12/01/2034 2,509,779
3,644,779
------------
LOUISIANA - 1.64%
1,970,000 JEFFERSON PARISH HOME MORTGAGE AUTHORITY LA SERIES A
(HOUSING REVENUE LOC) 5.13 06/01/2026 2,085,954
3,070,000 LOUISIANA LOCAL GOVERNMENT ENVIRONMENTAL FACILITIES & COMMUNITY
SERIES A DEVELOPMENT AUTHORITY- HSG-BELLEMONT APARTMENTS PJS
(HOUSING REVENUE LOC) 6.00 09/01/2022 3,120,563
5,206,517
------------
MASSACHUSETTS - 1.21%
2,500,000 MASSACHUSETTS STATE COLLEGE BUILDING AUTHORITY SERIES A
(COLLEGE AND UNIVERSITY REVENUE LOC) 7.50 05/01/2014 3,203,175
200,000 MASSACHUSETTS STATE HEALTH & EDUCATIONAL FACILITIES AUTHORITY SERIES
B MELROSE-WAKEFIELD HOSPITAL PROJECT
(HEALTHCARE FACILITIES REVENUE LOC) 5.88 07/01/2018 200,000
51
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
MASSACHUSETTS (CONTINUED)
$ 90,000 MASSACHUSETTS STATE WATER POLLUTION ABATEMENT MWRA PROGRAM SERIES A
(WATER REVENUE LOC)SS. 6.00% 08/01/2023 $ 103,630
310,000 MASSACHUSETTS STATE WATER POLLUTION ABATEMENT MWRA PROGRAM SERIES A
(WATER REVENUE LOC) 6.00 08/01/2023 350,393
3,857,198
------------
MICHIGAN - 3.07%
1,760,000 DETROIT MI SERIES B (WATER REVENUE LOC) 5.25 07/01/2017 1,941,914
3,000,000 MICHIGAN STATE HOSPITAL FINANCING AUTHORITY REVENUE OAKWOOD OBLIGATED
GROUP (HOSPITAL REVENUE LOC) 5.50 11/01/2017 3,237,360
1,160,000 MICHIGAN STRATEGIC FUND UTD WASTE SYSTEMS PROJECT
(INDUSTRIAL DEVELOPMENT REVENUE LOC) 5.20 04/01/2010 1,228,069
2,760,000 WAYLAND UNION SCHOOL DISTRICT MI (PROPERTY TAX REVENUE LOC) 8.00 05/01/2010 3,354,145
9,761,488
------------
MINNESOTA - 0.63%
500,000 AUSTIN MN HOUSING & REDEVELOPMENT AUTHORITY COURTYARD RESIDENCE
PROJECT SERIES A (HOUSING REVENUE LOC) 7.25 01/01/2032 529,750
1,500,000 OWATONNA MN HOUSING REVENUE SECOND CENTURY PROJECT SERIES A
(HOUSING REVENUE LOC)+/-SS. 2.19 01/01/2030 1,500,000
2,029,750
------------
MONTANA - 0.50%
1,495,000 MONTANA FACILITY FINANCING AUTHORITY HOSPITAL FACILITIES REVENUE ST.
PETERS HOSPITAL PROJECT (HOSPITAL REVENUE LOC) 5.25 06/01/2016 1,602,296
------------
NEBRASKA - 0.08%
150,000 LINCOLN-LANCASTER COUNTY NE PUBLIC BUILDING COMMISSION TAX SUPPORTED
LEASE RENTAL (LEASE REVENUE LOC) 6.00 10/15/2026 161,332
100,000 NEBRASKA EDUCATIONAL FINANCE AUTHORITY REVENUE CREIGHTON UNIVERSITY
PROJECT ALLIED IRISH BANK PLC LOC (EDUCATIONAL FACILITIES REVENUE
LOC)+/-SS. 2.22 08/01/2031 100,000
261,332
------------
NEVADA - 0.73%
2,000,000 CLARK COUNTY NV ECONOMIC DEVELOPMENT REVENUE ALEXANDER DAWSON
SCHOOL NV PROJECT (GENERAL OBLIGATION - SCHOOL DISTRICTS LOC) 5.38 05/15/2033 2,031,520
275,000 NEVADA HOUSING DIVISION SARATOGA PALMS MULTI UNIT HOUSING
(HOUSING REVENUE LOC) 6.25 10/01/2016 284,702
2,316,222
------------
NEW HAMPSHIRE - 0.82%
5,110,000 MANCHESTER NH HOUSING & REDEVELOPMENT AUTHORITY REVENUE CAPITAL
APPRECIATION-SERIES B (RECREATIONAL FACILITIES REVENUE LOC)^ 5.26 01/01/2018 2,601,910
------------
NEW JERSEY - 4.54%
4,000,000 NEW JERSEY HEALTH CARE FACILITIES AUTHORITY RARITAN BAY MEDICAL CENTER
(HEALTHCARE FACILITIES REVENUE LOC) 7.25 07/01/2027 4,197,200
5,795,000 NEW JERSEY STATE CERTIFICATES OF PARTICIPATION EQUIPMENT LEASE
PURCHASE SERIES A AMBAC INSURED (TRANSPORTATION REVENUE LOC) 5.00 06/15/2018 6,195,608
3,500,000 NEW JERSEY STATE TRANSPORTATION TRUST FUND AUTHORITY TRANSPORTATION
SYSTEMS SERIES B MBIA INSURED (TRANSPORTATION REVENUE LOC) 5.50 12/15/2015 4,029,410
14,422,218
------------
52
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
NEW MEXICO - 3.34%
$ 3,040,000 BERNALILLO COUNTY NM (OTHER REVENUE LOC) 5.20% 04/01/2021 $ 3,418,207
1,475,000 BERNALILLO COUNTY NM (OTHER REVENUE LOC) 5.25 04/01/2027 1,633,813
3,365,000 NEW MEXICO EDUCATIONAL ASSISTANCE FOUNDATION EDUCATIONAL LOAN SERIES
B-1 (HIGHER EDUCATION FACILITIES AUTHORITY REVENUE LOC) 5.90 09/01/2031 3,452,187
2,000,000 UNIVERSITY OF NEW MEXICO FSA FHA INSURED (NURSING HOME REVENUE LOC) 5.00 07/01/2018 2,122,660
10,626,867
------------
NEW YORK - 3.75%
5,500,000 METROPOLITAN TRANSPORTATION AUTHORITY NY REVENUE SERIES G-1
(TRANSPORTATION REVENUE LOC)+/-SS. 1.97 11/01/2026 5,500,000
2,500,000 NASSAU HEALTH CARE CORPORATION REVENUE SUBSERIES 2004-C FSA INSURED
(HEALTHCARE FACILITIES REVENUE LOC)+/-SS. 1.92 08/01/2029 2,500,000
1,000,000 NEW YORK STATE DORMITORY AUTHORITY NURSING HOME MENORAH CAMPUS PROJECT
FHA INSURED (HEALTHCARE FACILITIES REVENUE LOC) 6.10 02/01/2037 1,082,150
2,535,000 NEW YORK STATE DORMITORY AUTHORITY REVENUE STUDENT HOUSING CORPORATION
FGIC INSURED (HOUSING REVENUE LOC) 5.25 07/01/2015 2,849,492
11,931,642
------------
NORTH CAROLINA - 1.94%
1,785,000 CHARLOTTE NC CERTIFICATIONS PARTNERSHIP TRANSIT PROJECTS SERIES H 5.00 06/01/2016 1,923,338
4,000,000 NORTH CAROLINA EASTERN MUNICIPAL POWER AGENCY SERIES B
(ELECTRIC REVENUE LOC) 5.70 01/01/2017 4,258,800
6,182,138
------------
NORTH DAKOTA - 0.06%
95,000 NORTH DAKOTA STATE HOUSING FINANCE AGENCY SERIES C HOUSING FINANCE
HOME MORTGAGE (HOUSING REVENUE LOC) 5.95 07/01/2017 95,386
110,000 NORTH DAKOTA STATE HOUSING FINANCE AGENCY SERIES C HOUSING FINANCE
HOME MORTGAGE (HOUSING REVENUE LOC) 6.10 07/01/2028 110,468
205,854
------------
OHIO - 0.25%
250,000 JOHNSTOWN OH MORTGAGE (SEWER REVENUE LOC) 6.00 12/01/2017 264,225
500,000 OAK HILLS OH LOCAL SCHOOL DISTRICT SERIES A (PROPERTY TAX REVENUE LOC) 5.70 12/01/2025 542,440
806,665
------------
OKLAHOMA - 0.60%
1,655,000 OKLAHOMA STATE INDUSTRIES AUTHORITY HEALTH SYSTEM INTEGRIS BAPTIST
(HEALTHCARE FACILITIES REVENUE LOC) 6.00 08/15/2010 1,893,932
------------
OREGON - 4.72%
1,000,000 CHEMEKETA COMMUNITY COLLEGE DISTRICT OR SERIES B
(PROPERTY TAX REVENUE LOC)SS. 5.60 06/01/2014 1,057,030
1,500,000 KLAMATH FALLS OR SENIOR LIEN KLAMATH COGEN (ELECTRIC REVENUE LOC) 5.88 01/01/2016 1,504,875
3,500,000 KLAMATH FALLS OR SENIOR LIEN KLAMATH COGEN (ELECTRIC REVENUE LOC) 6.00 01/01/2025 3,489,920
500,000 LANE COUNTY OR SCHOOL DISTRICT NO.52 BETHEL
(PROPERTY TAX REVENUE LOC)SS. 5.63 06/15/2010 567,720
1,000,000 OREGON STATE BOARD OF HIGHER EDUCATION SERIES D
(PROPERTY TAX REVENUE LOC)SS. 5.75 08/01/2029 1,133,780
1,000,000 OREGON STATE DEPARTMENT OF ADMINISTRATIVE SERVICES SERIES A
(LEASE REVENUE LOC)SS. 6.25 05/01/2010 1,172,640
1,485,000 OREGON STATE HEALTH HOUSING EDUCATIONAL & CULTURAL FACILITIES
AUTHORITY SERIES A ASPEN FOUNDATION II
(HEALTHCARE FACILITIES REVENUE LOC) 6.13 04/15/2029 1,272,734
3,650,000 OREGON STATE HEALTH HOUSING EDUCATIONAL & CULTURAL FACILITIES
AUTHORITY (LEASE REVENUE LOC)^^ 5.25 10/01/2016 912,500
1,730,000 OREGON STATE HEALTH HOUSING EDUCATIONAL & CULTURAL FACILITIES
AUTHORITY SERIES A GNMA MORTGAGE BACKED SECURITIES
(HEALTHCARE FACILITIES REVENUE LOC)+/- 6.85 06/20/2042 1,889,541
53
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
OREGON (CONTINUED)
$ 1,060,000 OREGON STATE HOUSING & COMMUNITY SERVICES DEPARTMENT SERIES M SINGLE
FAMILY MORTGAGE PROGRAM (HOUSING REVENUE LOC) 6.20% 07/01/2028 $ 1,106,269
324,000 PORTLAND OR SERIES A (OTHER REVENUE LOC) 4.88 06/01/2018 342,014
550,000 WESTERN LANE OR HOSPITAL DISTRICT HOSPITAL FACILITY AUTHORITY SISTERS
OF ST. JOSEPH PEACE PROJECT (HEALTHCARE FACILITIES REVENUE LOC) 5.63 08/01/2007 562,469
15,011,492
PENNSYLVANIA - 2.52% ------------
1,790,000 CARBON COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY PANTHER CREEK PARTNERS
(OTHER REVENUE LOC) 6.65 05/01/2010 1,939,053
1,010,000 PENNSYLVANIA HOUSING FINANCE AGENCY SINGLE FAMILY MORTGAGE SERIES 59A
(HOUSING REVENUE LOC) 5.80 10/01/2029 1,041,805
5,000,000 PHILADELPHIA PA HOSPITALS & HIGHER EDUCATION FACILITIES AUTHORITY
JEANES HEALTH SYSTEM PROJECT (RECREATIONAL FACILITIES REVENUE LOC) 6.85 07/01/2022 5,018,800
7,999,658
------------
PUERTO RICO - 0.28%
350,000 CHILDRENS TRUST FUND PUERTO RICO (SPECIAL TAX REVENUE LOC)SS. 5.75 07/01/2010 379,347
300,000 CHILDRENS TRUST FUND PUERTO RICO TOBACCO SETTLEMENT
(OTHER REVENUE LOC)SS. 6.00 07/01/2010 344,172
15,000 PUERTO RICO COMMONWEALTH AQUEDUCT & SEWER AUTHORITY
(SEWER REVENUE LOC) 10.25 07/01/2009 17,943
150,000 PUERTO RICO HOUSING FINANCE CORPORATION MULTI FAMILY MORTGAGE SERIES
A-1 (HOUSING REVENUE LOC) 7.50 04/01/2022 151,463
892,925
------------
SOUTH CAROLINA - 2.02%
4,000,000 DORCHESTER COUNTY SC SCHOOL DISTRICT #002 INSTALLMENT PURCHASE REVENUE
GROWTH REMEDY OPPORTUNITY TAX HIKE (LEASE REVENUE LOC) 5.25 12/01/2021 4,241,000
1,035,000 GREENWOOD COUNTY SC HOSPITAL REVENUE SELF REGULATING HEALTHCARE SERIES
A FSA INSURED (HEALTH FACILITIES FINANCING AUTHORITY REVENUE LOC) 5.00 10/01/2015 1,127,063
1,000,000 UNIVERSITY OF SOUTH CAROLINA (COLLEGE AND UNIVERSITY REVENUE LOC) 5.75 06/01/2026 1,051,270
6,419,333
------------
TENNESSEE - 0.76%
750,000 SHELBY COUNTY TN HEALTH EDUCATIONAL & HOUSING FACILITIES BOARD
METHODIST HEALTHCARE (HEALTHCARE FACILITIES REVENUE LOC) 6.50 09/01/2021 902,340
1,250,000 SHELBY COUNTY TN HEALTH EDUCATIONAL & HOUSING FACILITIES BOARD
METHODIST HEALTHCARE (HEALTHCARE FACILITIES REVENUE LOC)SS. 6.50 09/01/2021 1,508,200
2,410,540
------------
TEXAS - 11.75%
1,500,000 AMARILLO TX INDEPENDENT SCHOOL DISTRICT PERMANENT SCHOOL FUND
GUARANTEED (PROPERTY TAX REVENUE LOC) 5.00 02/01/2023 1,578,210
4,800,000 AUSTIN TX CONVENTION ENTERPRISES INCORPORATED CONVENTION CENTER SECOND
TIER SERIES B ZC SPECIALTY INSURED (OTHER REVENUE LOC) 6.00 01/01/2023 5,088,240
325,000 CARROLL INDEPENDENT SCHOOL DISTRICT TX (PROPERTY TAX REVENUE LOC)+/- 6.75 08/15/2020 420,534
155,000 CORPUS CHRISTI HOUSING FINANCE CORPORATION TX SERIES A
(HOUSING REVENUE LOC) 7.70 07/01/2011 155,409
2,395,000 DE SOTO HOUSING FINANCE CORPORATION WINDSOR FOUNDATION PROJECT
SERIES A (HOUSING REVENUE LOC) 7.00 02/01/2025 2,451,187
1,000,000 DENTON TX IMPROVEMENTS (UTILITIES REVENUE LOC) 5.13 12/01/2018 1,078,070
4,000,000 EL PASO HOUSING FINANCE CORPORATION TX SINGLE FAMILY SERIES A-3
(HOUSING REVENUE LOC)+/- 6.18 04/01/2033 4,126,160
54
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
TEXAS (CONTINUED)
$ 70,000 GALVESTON PROPERTY FINANCE AUTHORITY TX SERIES A (HOUSING REVENUE LOC) 8.50% 09/01/2011 $ 70,225
1,300,000 GRAPE CREEK-PULLIAM INDEPENDENT SCHOOL DISTRICT TX (LEASE REVENUE LOCSS. 7.25 05/15/2006 1,411,579
1,100,000 GULF COAST WASTE DISPOSAL AUTHORITY TX EXXON PROJECT (INDUSTRIAL
DEVELOPMENT REVENUE LOC)+/-SS. 2.13 10/01/2024 1,100,000
1,000,000 LA PORTE TX INDEPENDENT SCHOOL DISTRICT (PROPERTY TAX REVENUE LOC) 4.25 02/15/2019 1,001,780
1,530,000 LAREDO TX INDEPENDENT SCHOOL DISTRICT (PROPERTY TAX REVENUE LOC) 5.00 08/01/2020 1,622,029
1,170,000 LUBBOCK TX HOUSING FINANCE CORPORATION LAS COLINAS QUAIL CREEK APTS
SERIES A (HOUSING REVENUE LOC) 6.00 07/01/2022 1,219,409
1,530,000 LUBBOCK TX HOUSING FINANCE CORPORATION LAS COLINAS QUAIL CREEK APTS
SERIES A (HOUSING REVENUE LOC) 6.00 07/01/2025 1,585,049
1,170,000 LUFKIN TX HEALTH FACILITIES DEVELOPMENT CORPORATION HEALTH SYSTEM
REVENUE MEMORIAL HEALTH SYSTEM OF EAST TEXAS (HEALTH FACILITIES
FINANCING AUTHORITY REVENUE LOC) 5.00 02/15/2008 1,207,019
1,825,000 LUFKIN TX INDEPENDENT SCHOOL DISTRICT PERMANENT SCHOOL FUND GUARANTEED
(PROPERTY TAX REVENUE LOC) 5.00 08/15/2016 1,993,885
2,130,000 ROUND ROCK TX AMBAC INSURED (PROPERTY TAX REVENUE LOC) 5.00 08/15/2018 2,285,554
200,000 SOCORRO TX INDEPENDENT SCHOOL DISTRICT (PROPERTY TAX REVENUE LOC) 5.75 02/15/2021 206,934
160,000 TEXARKANA TX HEALTH FACILITIES DEVELOPMENT CORPORATION SERIES B WADLEY
REGIONAL MEDICAL CENTER (HEALTHCARE FACILITIES REVENUE LOC) 6.00 10/01/2017 190,293
1,500,000 TEXAS STATE (GENERAL OBLIGATION - STATES, TERRITORIES LOC) 5.00 08/01/2015 1,638,540
1,390,000 TEXAS STATE PUBLIC FINANCING AUTHORITY REVENUE STEPHEN F AUSTIN UNIVERSITY
FINANCING SYSTEM FSA INSURED (COLLEGE AND UNIVERSITY REVENUE LOC) 4.00 10/15/2017 1,385,802
2,425,000 TEXAS STATE STUDENT HOUSING AUTHORITY SERIES B JUNIOR LIEN STUDENT HOUSING
(COLLEGE AND UNIVERSITY REVENUE LOC) 6.75 01/01/2033 2,136,862
3,250,000 TEXAS STATE VETERANS HOUSING ASSISTANCE PROGRAM FUND II SERIES A
(HOUSING REVENUE LOC) 5.65 12/01/2017 3,411,265
37,364,035
------------
UTAH - 3.10%
500,000 PROVO CITY UT HOUSING AUTHORITY LOOKOUT POINTE APARTMENTS PROJECT
COLLATERALIZED BY GNMA (HOUSING REVENUE LOC) 5.80 07/20/2022 522,715
3,270,000 SALT LAKE COUNTY UT HOUSING AUTHORITY BRIDGESIDE PROJECT FHA INSURED
(HOUSING REVENUE LOC) 6.38 11/01/2033 3,377,060
1,860,000 SALT LAKE COUNTY UT WESTMINSTER COLLEGE PROJECT
(COLLEGE AND UNIVERSITY REVENUE LOC) 5.75 10/01/2027 1,892,383
2,500,000 UTAH STATE BUILDING OWNERSHIP AUTHORITY SERIES B STATE FACILITIES MASTER
LEASE PROGRAM (LEASE REVENUE LOC) 5.25 05/15/2024 2,680,075
250,000 UTAH STATE BUILDING OWNERSHIP AUTHORITY SERIES C STATE FACILITIES MASTER
LEASE PROGRAM (LEASE REVENUE LOC) 5.50 05/15/2019 289,487
1,000,000 WEBER MUNICIPAL BUILDING AUTHORITY UTAH (LEASE REVENUE LOC) 5.75 12/15/2019 1,098,310
9,860,030
------------
VERMONT - 0.02%
50,000 VERMONT HOUSING FINANCE AGENCY VT HOUSING SERIES 9 (HOUSING REVENUE LOC) 6.00 05/01/2037 51,518
------------
WASHINGTON - 4.47%
500,000 CLARK COUNTY SCHOOL DISTRICT NO.98 HOCKINSON WA (PROPERTY TAX REVENUE
LOC)SS. 6.15 12/01/2015 585,380
2,000,000 KING COUNTY WA PUBLIC HOSPITAL DISTRICT #002 EVERGREEN HEALTHCARE
MBIA INSURED (HOSPITAL REVENUE LOC) 5.00 12/01/2015 2,197,040
110,000 KING COUNTY WA SEWER (SEWER REVENUE LOC)SS. 6.13 01/01/2033 112,200
55
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
WASHINGTON (CONTINUED)
$ 1,748,000 KITSAP COUNTY WA CONSOLIDATED HOUSING AUTHORITY LOW INCOME HOUSING
MARTHA GNMA (HEALTHCARE FACILITIES REVENUE LOC) 7.10% 08/20/2016 $ 2,046,733
6,205,000 PORT LONGVIEW WA SERIES A (HARBOR DEPARTMENT REVENUE LOC) 5.00 12/01/2014 6,589,524
1,000,000 SEATTLE WA HOUSING AUTHORITY KIN ON PROJECT COLLATERALIZED BY GNMA
(HEALTHCARE FACILITIES REVENUE LOC) 7.40 11/20/2036 1,107,530
1,000,000 SEATTLE WA MUNICIPAL LIGHT & POWER REVENUE FSA INSURED
(ELECTRIC REVENUE LOC) 4.50 08/01/2019 1,015,540
500,000 SEATTLE WA SERIES B (WATER REVENUE LOC) 6.00 07/01/2029 559,005
14,212,952
------------
WEST VIRGINIA - 0.56%
3,000,000 KANAWHA PUTNAM COUNTY WV HUNTINGTON CHARLESTON SINGLE FAMILY MORTGAGE
COMPOUND INTEREST 1984 SERIES A (HOUSING REVENUE LOC)^ 4.45 12/01/2016 1,776,000
------------
WISCONSIN - 0.49%
490,000 WISCONSIN HOUSING & ECONOMIC DEVELOPMENT AUTHORITY SERIES A
(HOUSING REVENUE LOC) 6.00 09/01/2015 509,184
1,000,000 WISCONSIN STATE HEALTH & EDUCATIONAL FACILITIES AUTHORITY WHEATON
FRANCISCAN SERVICES PROJECT (HEALTHCARE FACILITIES REVENUE LOC) 6.13 11/15/2015 1,049,540
1,558,724
------------
WYOMING - 0.16%
500,000 JACKSON WY NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORP SERIES B
LOWER VALLEY POWER & LIGHT PROJECT (FUEL SALES TAX REVENUE LOC) 5.88 05/01/2026 518,055
------------
TOTAL MUNICIPAL BONDS & NOTES (COST $284,580,677) 296,918,274
------------
SHARES
SHORT-TERM INVESTMENTS - 0.11%
351,000 WELLS FARGO NATIONAL TAX-FREE MONEY MARKET TRUST~++ 351,000
------------
TOTAL SHORT-TERM INVESTMENTS (COST $351,000) 351,000
------------
TOTAL INVESTMENTS IN SECURITIES
(COST $299,495,481)* 98.99% $314,780,825
OTHER ASSETS AND LIABILITIES, NET 1.01 3,227,792
------ ------------
TOTAL NET ASSETS 100.00% $318,008,617
====== ============
+/- 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.
^ ZERO COUPON/ STEPPED COUPON BOND. INTEREST RATE PRESENTED IS YIELD TO
MATURITY.
^^ THIS SECURITY IS CURRENTLY IN DEFAULT WITH REGARDS TO SCHEDULED INTEREST
OR PRINCIPAL PAYMENTS.
++ SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $351,000.
SS. THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE
EFFECTIVE MATURITY.
~ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY
PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND DOES NOT PAY AN
INVESTMENT ADVISORY FEE FOR SUCH INVESTMENTS.
* 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.
56
PORTFOLIO OF INVESTMENTS -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NEBRASKA TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
MUNICIPAL BONDS & NOTES - 97.13%
COLORADO - 1.40%
$ 600,000 COLORADO HEALTH FACILITIES AUTHORITY STEAMBOAT SPRINGS HEALTH PROJECT
(HEALTHCARE FACILITIES REVENUE LOC) 5.70% 09/15/2023 $ 613,854
------------
NEBRASKA - 95.63%
1,500,000 CITY OF LINCOLN NE (ELECTRIC REVENUE LOC) 5.00 09/01/2018 1,613,535
1,100,000 CITY OF LINCOLN NE (WATER REVENUE LOC) 5.00 08/15/2017 1,182,082
1,000,000 CITY OF LINCOLN NE MBIA INSURED (SEWER REVENUE LOC) 5.00 06/15/2017 1,082,310
1,250,000 CITY OF LINCOLN NE SERIES A (PARKING FACILITIES REVENUE LOC) 5.38 08/15/2014 1,371,262
1,000,000 CITY OF LINCOLN NE TAX SUPPORTED ANTELOPE VALLEY PROJECT (OTHER
REVENUE LOC) 5.00 09/15/2016 1,077,380
500,000 CITY OF OMAHA NE (PROPERTY TAX REVENUE LOC) 5.25 12/01/2012 535,785
1,000,000 CITY OF OMAHA NE (PROPERTY TAX REVENUE LOC) 5.00 11/01/2014 1,103,230
1,000,000 CITY OF OMAHA NE DOWNTOWN NORTHEAST REDEVELOPMENT PROJECT
(SPECIAL TAX REVENUE LOC) 6.00 11/01/2014 1,086,170
865,000 CITY OF OMAHA NE RIVERFRONT REDEVELOPMENT PROJECT SERIES A
(SALES TAX REVENUE LOC) 5.50 02/01/2017 959,890
415,000 CITY OF OMAHA NE SERIES A (PROPERTY TAX REVENUE LOC) 6.50 12/01/2014 516,965
1,140,000 DODGE COUNTY NE SCHOOL DISTRICT #1 FREMONT FSA INSURED
(GENERAL OBLIGATION - SCHOOL DISTRICTS LOC) 5.00 12/15/2019 1,227,985
1,000,000 DOUGLAS COUNTY NE HENRY DOORLY ZOO AQUARIUM PROJECT
(RECREATIONAL FACILITIES REVENUE LOC) 5.88 09/01/2014 1,083,770
1,500,000 DOUGLAS COUNTY NE SCHOOL DISTRICT #1 SERIES B (PROPERTY TAX REVENUE LOC) 5.00 12/15/2018 1,615,845
1,000,000 GRAND ISLAND NE SYSTEM MBIA INSURED (ELECTRIC REVENUE LOC) 5.13 08/15/2016 1,089,960
1,000,000 LANCASTER COUNTY NE HOSPITAL AUTHORITY #1 BRYAN MEMORIAL HOSPITAL
PROJECT SERIES A MBIA INSURED (HEALTHCARE FACILITIES REVENUE LOC) 5.10 06/01/2010 1,076,420
2,520,000 LANCASTER COUNTY NE HOSPITAL AUTHORITY #1 BRYANLGH MEDICAL CENTER
PROJECT SERIES A AMBAC INSURED (HEALTHCARE FACILITIES REVENUE LOC) 5.50 06/01/2020 2,765,448
1,750,000 LANCASTER COUNTY SCHOOL DISTRICT NO.1 NE LINCOLN PUBLIC SCHOOLS
(PROPERTY TAX REVENUE LOC) 5.25 01/15/2022 1,898,452
745,000 LINCOLN-LANCASTER COUNTY NE PUBLIC BUILDING COMMISSION TAX SUPPORTED LEASE
RENTAL GOC INSURED (LEASE REVENUE LOC) 5.80 10/15/2018 802,693
500,000 LINCOLN-LANCASTER COUNTY NE PUBLIC BUILDING COMMISSION TAX SUPPORTED LEASE
RENTAL REVENUE GOC INSURED (LEASE REVENUE LOC) 5.25 10/15/2008 534,095
1,000,000 MADISON COUNTY NE HOSPITAL AUTHORITY #1 FAITH REGIONAL HEALTH SERVICES
PROJECT RADIAN INSURED (HEALTHCARE FACILITIES REVENUE LOC) 5.50 07/01/2021 1,068,140
750,000 MUNICIPAL ENERGY AGENCY OF NEBRASKA POWER SUPPLY SYSTEMS REVENUE SERIES A
(POWER REVENUE LOC) 5.25 04/01/2019 821,918
575,000 NEBRASKA EDUCATIONAL FINANCE AUTHORITY RADIAN INSURED
(COLLEGE AND UNIVERSITY REVENUE LOC) 5.00 04/01/2016 604,929
300,000 NEBRASKA EDUCATIONAL FINANCE AUTHORITY REVENUE CREIGHTON UNIVERSITY PROJECT
ALLIED IRISH BANK PLC LOC (EDUCATIONAL FACILITIES REVENUE LOC)+/-SS. 2.22 08/01/2031 300,000
500,000 NEBRASKA EDUCATIONAL TELECOMMUNICATIONS COMMISSION DTV PROJECT
(LEASE REVENUE LOC) 6.00 02/01/2007 535,645
1,250,000 NEBRASKA EDUCATIONAL TELECOMMUNICATIONS COMMISSION DTV PROJECT
(LEASE REVENUE LOC) 6.00 02/01/2010 1,417,225
1,000,000 NEBRASKA INVESTMENT FINANCE AUTHORITY CHILDREN HEALTHCARE SERVICES
AMBAC INSURED (HEALTHCARE FACILITIES REVENUE LOC) 5.00 08/15/2011 1,081,490
355,000 NEBRASKA INVESTMENT FINANCE AUTHORITY SERIES C (OTHER REVENUE LOC) 6.30 09/01/2020 356,967
210,000 NEBRASKA INVESTMENT FINANCE AUTHORITY SERIES C GNMA FNMA FHLMC INSURED
(HOUSING REVENUE LOC) 5.65 03/01/2028 214,967
57
WELLS FARGO TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NEBRASKA TAX-FREE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
NEBRASKA (CONTINUED)
$ 535,000 NEBRASKA INVESTMENT FINANCE AUTHORITY SERIES E COLLATERALIZED BY
GNMA FNMA FHLMC (HOUSING REVENUE LOC) 5.90% 09/01/2024 $ 560,830
1,085,000 NEBRASKA INVESTMENT FINANCE AUTHORITY SERIES E COLLATERALIZED BY
GNMA FNMA FHLMC (HOUSING REVENUE LOC) 5.95 09/01/2031 1,125,167
810,000 NEBRASKA PUBLIC POWER DISTRICT SERIES A MBIA INSURED (ELECTRIC REVENUE
LOC)SS. 5.25 01/01/2012 884,966
210,000 NEBRASKA PUBLIC POWER DISTRICT SERIES A MBIA INSURED (ELECTRIC REVENUE LOC) 5.25 01/01/2012 227,396
1,000,000 OMAHA NE AIRPORT AUTHORITY FACILITIES FSA INSURED (AIRPORT REVENUE LOC) 5.50 01/01/2012 1,115,410
2,000,000 OMAHA NE AIRPORT AUTHORITY FACILITIES FSA INSURED (AIRPORT REVENUE LOC) 5.50 01/01/2014 2,218,220
250,000 OMAHA NE PARKING FACILITIES CORPORATION OMAHA PARK SEVEN PROJECT SERIES A
(LEASE REVENUE LOC) 5.50 05/01/2016 257,540
475,000 OMAHA NE PARKING FACILITIES CORPORATION PARK FOUR & FIVE PROJECTS
(LEASE REVENUE LOC) 5.20 09/15/2009 494,276
500,000 OMAHA NE PARKING FACILITIES CORPORATION PARK FOUR & FIVE PROJECTS
(LEASE REVENUE LOC) 5.70 09/15/2015 521,535
1,000,000 OMAHA NE PUBLIC POWER DISTRICT SERIES A (ELECTRIC REVENUE LOC) 5.40 02/01/2006 1,034,380
1,000,000 OMAHA NE SPECIAL TAX REVENUE HERITAGE (TAX REVENUE LOC) 5.00 10/15/2022 1,066,920
1,000,000 UNIVERSITY OF NEBRASKA FACILITIES CORPORATION DEFERRED MAINTENANCE PROJECT
(COLLEGE AND UNIVERSITY REVENUE LOC) 5.25 07/15/2011 1,082,130
700,000 UNIVERSITY OF NEBRASKA FACILITIES CORPORATION UNIVERSITY MEDICAL CENTER
PROJECT PREREFUNDED 07/01/05 @ 100 (COLLEGE AND UNIVERSITY REVENUE LOC)SS. 5.45 07/01/2005 710,374
740,000 UNIVERSITY OF NEBRASKA KEARNEY STUDENT FEES & FACILITIES
(COLLEGE AND UNIVERSITY REVENUE LOC) 5.75 07/01/2020 761,608
800,000 UNIVERSITY OF NEBRASKA LINCOLN PARKING PROJECT (COLLEGE AND UNIVERSITY
REVENUE LOC) 5.80 06/01/2020 830,800
41,916,110
------------
NEVADA - 0.10%
40,000 NEVADA HOUSING DIVISION SINGLE FAMILY SERIES A-1 (HOUSING REVENUE LOC) 5.60 10/01/2007 41,957
------------
TOTAL MUNICIPAL BONDS & NOTES (COST $40,070,881) 42,571,921
------------
SHARES
SHORT-TERM INVESTMENTS - 1.82%
796,987 WELLS FARGO NATIONAL TAX-FREE MONEY MARKET TRUST~++ 796,987
------------
TOTAL SHORT-TERM INVESTMENTS (COST $796,987) 796,987
------------
TOTAL INVESTMENTS IN SECURITIES
(COST $40,867,868)* 98.95% $ 43,368,908
OTHER ASSETS AND LIABILITIES, NET 1.05 460,719
------ ------------
TOTAL NET ASSETS 100.00% $ 43,829,627
====== ============
+/- VARIABLE RATE 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.
SS. THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE
EFFECTIVE MATURITY.
++ SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $796,987.
* 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.
58
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WELLS FARGO TAX-FREE FUNDS STATEMENT OF ASSETS AND LIABILITIES --
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA
LIMITED TERM CALIFORNIA
TAX-FREE FUND TAX-FREE FUND
- -------------------------------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
IN SECURITIES, AT MARKET VALUE ................................... $ 90,289,683 $ 509,351,903
INVESTMENTS IN AFFILIATES ........................................ 2,717,000 5,631,000
------------- -------------
TOTAL INVESTMENT AT MARKET VALUE (SEE COST BELOW) .................. 93,006,683 514,982,903
------------- -------------
CASH ............................................................. 51,290 50,148
RECEIVABLE FOR FUND SHARES ISSUED ................................ 75,000 239,972
RECEIVABLE FOR INVESTMENTS SOLD .................................. 0 0
RECEIVABLES FOR DIVIDENDS AND INTEREST ........................... 1,178,875 6,428,006
------------- -------------
TOTAL ASSETS ....................................................... 94,311,848 521,701,029
------------- -------------
LIABILITIES
PAYABLE FOR FUND SHARES REDEEMED ................................. 15,487 93,909
PAYABLE FOR INVESTMENTS PURCHASED ................................ 0 5,230,300
DIVIDENDS PAYABLE ................................................ 205,456 1,925,608
PAYABLE TO INVESTMENT ADVISOR AND AFFILIATES (NOTE 3) ............ 43,494 234,637
PAYABLE TO THE TRUSTEES AND DISTRIBUTOR .......................... 26,304 185,932
ACCRUED EXPENSES AND OTHER LIABILITIES ........................... 28,623 34,890
------------- -------------
TOTAL LIABILITIES .................................................. 319,364 7,705,276
------------- -------------
TOTAL NET ASSETS ................................................... $ 93,992,484 $ 513,995,753
============= =============
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------------------------------
PAID-IN CAPITAL .................................................. $ 92,236,542 $ 479,415,131
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ....................... 2,933 (83)
UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS ............ 43,772 137,914
NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS,
FOREIGN CURRENCIES AND TRANSLATION OF ASSETS AND LIABILITIES
DENOMINATED IN FOREIGN CURRENCIES .............................. 1,709,237 34,442,791
------------- -------------
TOTAL NET ASSETS ................................................... $ 93,992,484 $ 513,995,753
------------- -------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE(1)
- -------------------------------------------------------------------------------------------------------
NET ASSETS - CLASS A ............................................. $ 62,350,783 $ 367,305,664
SHARES OUTSTANDING - CLASS A ..................................... 5,873,320 32,412,108
NET ASSET VALUE PER SHARE - CLASS A .............................. $ 10.62 $ 11.33
MAXIMUM OFFERING PRICE PER SHARE - CLASS A ....................... $ 10.95(2) $ 11.86(3)
NET ASSETS - CLASS B ............................................. N/A $ 78,184,263
SHARES OUTSTANDING - CLASS B ..................................... N/A 6,767,680
NET ASSET VALUE AND OFFERING PRICE PER SHARE - CLASS B ........... N/A $ 11.55
NET ASSETS - CLASS C ............................................. $ 11,769,324 $ 32,994,470
SHARES OUTSTANDING - CLASS C ..................................... 1,108,937 2,855,384
NET ASSET VALUE AND OFFERING PRICE PER SHARE - CLASS C ........... $ 10.61 $ 11.56
NET ASSETS - INSTITUTIONAL CLASS ................................. $ 19,872,377 $ 35,511,356
SHARES OUTSTANDING - INSTITUTIONAL CLASS ......................... 1,902,136 3,127,952
NET ASSET VALUE AND OFFERING PRICE PER SHARE - INSTITUTIONAL CLASS $ 10.45 $ 11.35
------------- -------------
INVESTMENTS AT COST ................................................ $ 91,297,446 $ 480,540,112
============= =============
(1) EACH FUND HAS AN UNLIMITED NUMBER OF AUTHORIZED SHARES.
(2) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/97 OF NET ASSET VALUE. ON
INVESTMENTS OF $50,000 OR MORE, THE OFFERING PRICE IS REDUCED.
(3) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.50 OF NET ASSET VALUE. ON
INVESTMENTS OF $50,000 OR MORE, THE OFFERING PRICE IS REDUCED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
60
STATEMENT OF ASSETS AND LIABILITIES -- WELLS FARGO TAX-FREE FUNDS
DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL
COLORADO MINNESOTA LIMITED TERM
TAX-FREE FUND TAX-FREE FUND TAX-FREE FUND
- ----------------------------------------------------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
IN SECURITIES, AT MARKET VALUE ................................... $ 99,257,585 $ 182,017,566 $ 141,517,445
INVESTMENTS IN AFFILIATES ........................................ 3,713,000 1,475,000 7,695,000
------------- ------------- -------------
TOTAL INVESTMENT AT MARKET VALUE (SEE COST BELOW) .................. 102,970,585 183,492,566 149,212,445
------------- ------------- -------------
CASH ............................................................. 51,717 51,158 50,802
RECEIVABLE FOR FUND SHARES ISSUED ................................ 10,078 24,960 574,042
RECEIVABLE FOR INVESTMENTS SOLD .................................. 0 0 0
RECEIVABLES FOR DIVIDENDS AND INTEREST ........................... 1,133,197 2,929,505 1,984,259
------------- ------------- -------------
TOTAL ASSETS ....................................................... 104,165,577 186,498,189 151,821,548
------------- ------------- -------------
LIABILITIES
PAYABLE FOR FUND SHARES REDEEMED ................................. 31,626 81,000 0
PAYABLE FOR INVESTMENTS PURCHASED ................................ 0 0 0
DIVIDENDS PAYABLE ................................................ 398,611 692,861 413,107
PAYABLE TO INVESTMENT ADVISOR AND AFFILIATES (NOTE 3) ............ 49,686 90,727 69,461
PAYABLE TO THE TRUSTEES AND DISTRIBUTOR .......................... 23,049 22,100 2,770
ACCRUED EXPENSES AND OTHER LIABILITIES ........................... 31,496 25,195 4,041
------------- ------------- -------------
TOTAL LIABILITIES .................................................. 534,468 911,883 489,379
------------- ------------- -------------
TOTAL NET ASSETS ................................................... $ 103,631,109 $ 185,586,306 $ 151,332,169
============= ============= =============
NET ASSETS CONSIST OF:
- ----------------------------------------------------------------------------------------------------------------------------
PAID-IN CAPITAL .................................................. $ 98,131,396 $ 172,981,991 $ 149,420,565
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ....................... 88,625 200,190 (47,537)
UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS ............ (1,127,601) (378,770) (466,119)
NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS,
FOREIGN CURRENCIES AND TRANSLATION OF ASSETS AND LIABILITIES
DENOMINATED IN FOREIGN CURRENCIES .............................. 6,538,689 12,782,895 2,425,260
------------- ------------- -------------
TOTAL NET ASSETS ................................................... $ 103,631,109 $ 185,586,306 $ 151,332,169
------------- ------------- -------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE(1)
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS - CLASS A ............................................. $ 54,634,846 $ 39,426,360 $ 2,324,514
SHARES OUTSTANDING - CLASS A ..................................... 5,013,849 3,547,282 212,874
NET ASSET VALUE PER SHARE - CLASS A .............................. $ 10.90 $ 11.11 $ 10.92
MAXIMUM OFFERING PRICE PER SHARE - CLASS A ....................... $ 11.41(3) $ 11.63(3) $ 11.26(2)
NET ASSETS - CLASS B ............................................. $ 10,202,949 $ 13,014,526 $ 769,110
SHARES OUTSTANDING - CLASS B ..................................... 935,029 1,170,945 70,502
NET ASSET VALUE AND OFFERING PRICE PER SHARE - CLASS B ........... $ 10.91 $ 11.11 $ 10.91
NET ASSETS - CLASS C ............................................. N/A N/A $ 711,067
SHARES OUTSTANDING - CLASS C ..................................... N/A N/A 65,225
NET ASSET VALUE AND OFFERING PRICE PER SHARE - CLASS C ........... N/A N/A $ 10.90
NET ASSETS - INSTITUTIONAL CLASS ................................. $ 38,793,314 $ 133,145,420 $ 147,527,478
SHARES OUTSTANDING - INSTITUTIONAL CLASS ......................... 3,559,681 11,981,708 13,515,479
NET ASSET VALUE AND OFFERING PRICE PER SHARE - INSTITUTIONAL CLASS $ 10.90 $ 11.11 $ 10.92
------------- ------------- -------------
INVESTMENTS AT COST ................................................ $ 96,431,896 $ 170,709,671 $ 146,787,185
============= ============= =============
NATIONAL NEBRASKA
TAX-FREE FUND TAX-FREE FUND
- -------------------------------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
IN SECURITIES, AT MARKET VALUE ................................... $ 314,429,825 $ 42,571,921
INVESTMENTS IN AFFILIATES ........................................ 351,000 796,987
------------- -------------
TOTAL INVESTMENT AT MARKET VALUE (SEE COST BELOW) .................. 314,780,825 43,368,908
------------- -------------
CASH ............................................................. 51,655 51,877
RECEIVABLE FOR FUND SHARES ISSUED ................................ 185,761 0
RECEIVABLE FOR INVESTMENTS SOLD .................................. 2,067,953 0
RECEIVABLES FOR DIVIDENDS AND INTEREST ........................... 4,455,491 661,269
------------- -------------
TOTAL ASSETS ....................................................... 321,541,685 44,082,054
------------- -------------
LIABILITIES
PAYABLE FOR FUND SHARES REDEEMED ................................. 26,847 0
PAYABLE FOR INVESTMENTS PURCHASED ................................ 1,978,192 0
DIVIDENDS PAYABLE ................................................ 1,242,582 155,138
PAYABLE TO INVESTMENT ADVISOR AND AFFILIATES (NOTE 3) ............ 163,921 24,700
PAYABLE TO THE TRUSTEES AND DISTRIBUTOR .......................... 58,633 985
ACCRUED EXPENSES AND OTHER LIABILITIES ........................... 62,893 71,604
------------- -------------
TOTAL LIABILITIES .................................................. 3,533,068 252,427
------------- -------------
TOTAL NET ASSETS ................................................... $ 318,008,617 $ 43,829,627
============= =============
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------------------------------
PAID-IN CAPITAL .................................................. $ 314,266,962 $ 41,312,694
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ....................... 614,860 4,604
UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS ............ (12,158,549) 11,289
NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS,
FOREIGN CURRENCIES AND TRANSLATION OF ASSETS AND LIABILITIES
DENOMINATED IN FOREIGN CURRENCIES .............................. 15,285,344 2,501,040
------------- -------------
TOTAL NET ASSETS ................................................... $ 318,008,617 $ 43,829,627
------------- -------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE(1)
- -------------------------------------------------------------------------------------------------------
NET ASSETS - CLASS A ............................................. $ 99,669,572 N/A
SHARES OUTSTANDING - CLASS A ..................................... 9,523,242 N/A
NET ASSET VALUE PER SHARE - CLASS A .............................. $ 10.47 N/A
MAXIMUM OFFERING PRICE PER SHARE - CLASS A ....................... $ 10.96(3) N/A
NET ASSETS - CLASS B ............................................. $ 28,273,051 N/A
SHARES OUTSTANDING - CLASS B ..................................... 2,700,902 N/A
NET ASSET VALUE AND OFFERING PRICE PER SHARE - CLASS B ........... $ 10.47 N/A
NET ASSETS - CLASS C ............................................. $ 8,988,183 N/A
SHARES OUTSTANDING - CLASS C ..................................... 859,009 N/A
NET ASSET VALUE AND OFFERING PRICE PER SHARE - CLASS C ........... $ 10.46 N/A
NET ASSETS - INSTITUTIONAL CLASS ................................. $ 181,077,811 $ 43,829,627
SHARES OUTSTANDING - INSTITUTIONAL CLASS ......................... 17,298,929 4,364,141
NET ASSET VALUE AND OFFERING PRICE PER SHARE - INSTITUTIONAL CLASS $ 10.47 $ 10.04
------------- -------------
INVESTMENTS AT COST ................................................ $ 299,495,481 $ 40,867,868
============= =============
61
WELLS FARGO TAX-FREE FUNDS STATEMENT OF OPERATIONS --
FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA
LIMITED TERM CALIFORNIA
TAX-FREE FUND TAX-FREE FUND
- -------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
DIVIDENDS ....................................................... $ 6,759 $ 453,787
INTEREST ........................................................ 1,541,462 13,247,906
INCOME FROM AFFILIATED SECURITIES ............................... 27,281 53,523
------------- -------------
TOTAL INVESTMENT INCOME ............................................ 1,575,502 13,755,216
------------- -------------
EXPENSES
ADVISORY FEES ................................................... 182,717 1,058,714
ADMINISTRATION FEES
FUND LEVEL ................................................... 22,840 132,905
CLASS A ...................................................... 87,864 523,887
CLASS B ...................................................... N/A 121,347
CLASS C ...................................................... 16,872 47,526
INSTITUTIONAL CLASS .......................................... 16,547 36,791
CUSTODY FEES .................................................... 9,136 53,162
SHAREHOLDER SERVICING FEES ...................................... 93,515 618,536
ACCOUNTING FEES ................................................. 12,795 25,342
DISTRIBUTION FEES (NOTE 3)
CLASS B ...................................................... N/A 325,037
CLASS C ...................................................... 45,194 127,302
AUDIT FEES ...................................................... 8,154 10,701
LEGAL FEES ...................................................... 1,224 7,135
REGISTRATION FEES ............................................... 510 7,645
SHAREHOLDER REPORTS ............................................. 8,154 59,113
TRUSTEES' FEES .................................................. 3,460 3,460
OTHER FEES AND EXPENSES ......................................... 2,178 8,536
------------- -------------
TOTAL EXPENSES ..................................................... 511,160 3,167,139
------------- -------------
LESS:
WAIVED FEES AND REIMBURSED EXPENSES (NOTE 3) .................... (98,374) (634,308)
NET EXPENSES .................................................... 412,786 2,532,831
------------- -------------
NET INVESTMENT INCOME (LOSS) ....................................... 1,162,716 11,222,385
------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) FROM:
SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION . 276,987 1,885,747
------------- -------------
NET REALIZED GAIN (LOSS) FROM INVESTMENTS .......................... 276,987 1,885,747
------------- -------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF:
SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION . 1,262,876 15,878,320
------------- -------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS 1,262,876 15,878,320
------------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ............. 1,539,863 17,764,067
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .... $ 2,702,579 $ 28,986,452
============= =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
62
STATEMENT OF OPERATIONS -- WELLS FARGO TAX-FREE FUNDS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL
COLORADO MINNESOTA LIMITED TERM
TAX-FREE FUND TAX-FREE FUND TAX-FREE FUND
- ----------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
DIVIDENDS ....................................................... $ 90,791 $ 0 $ 0
INTEREST ........................................................ 2,663,265 4,757,506 2,866,833
INCOME FROM AFFILIATED SECURITIES ............................... 10,779 17,726 17,900
------------- ------------- -------------
TOTAL INVESTMENT INCOME ............................................ 2,764,835 4,775,232 2,884,733
------------- ------------- -------------
EXPENSES
ADVISORY FEES ................................................... 216,300 389,946 345,287
ADMINISTRATION FEES
FUND LEVEL ................................................... 27,038 48,743 43,161
CLASS A ...................................................... 76,734 54,985 2,577
CLASS B ...................................................... 14,973 20,026 1,002
CLASS C ...................................................... N/A N/A 635
INSTITUTIONAL CLASS .......................................... 42,645 141,394 169,634
CUSTODY FEES .................................................... 10,815 19,497 17,264
SHAREHOLDER SERVICING FEES ...................................... 81,882 66,974 3,762
ACCOUNTING FEES ................................................. 13,273 15,748 24,231
DISTRIBUTION FEES (NOTE 3)
CLASS B ...................................................... 40,107 53,641 2,684
CLASS C ...................................................... N/A N/A 1,701
AUDIT FEES ...................................................... 8,562 10,345 8,562
LEGAL FEES ...................................................... 1,040 2,727 1,442
REGISTRATION FEES ............................................... 510 9,174 50,718
SHAREHOLDER REPORTS ............................................. 7,914 13,758 11,247
TRUSTEES' FEES .................................................. 3,460 3,460 3,460
OTHER FEES AND EXPENSES ......................................... 2,005 3,517 3,177
------------- ------------- -------------
TOTAL EXPENSES ..................................................... 547,258 853,935 690,544
------------- ------------- -------------
LESS:
WAIVED FEES AND REIMBURSED EXPENSES (NOTE 3) .................... (100,818) (148,401) (164,465)
NET EXPENSES .................................................... 446,440 705,534 526,079
------------- ------------- -------------
NET INVESTMENT INCOME (LOSS) ....................................... 2,318,395 4,069,698 2,358,654
------------- ------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) FROM:
SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION . 131,056 106,177 181,920
------------- ------------- -------------
NET REALIZED GAIN (LOSS) FROM INVESTMENTS .......................... 131,056 106,177 181,920
------------- ------------- -------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF:
SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION . 2,355,334 4,656,940 1,569,772
------------- ------------- -------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS 2,355,334 4,656,940 1,569,772
------------- ------------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ............. 2,486,390 4,763,117 1,751,692
------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .... $ 4,804,785 $ 8,832,815 $ 4,110,346
============= ============= =============
NATIONAL NEBRASKA
TAX-FREE FUND TAX-FREE FUND
- -------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
DIVIDENDS ....................................................... $ 585,080 $ 0
INTEREST ........................................................ 8,094,439 1,068,358
INCOME FROM AFFILIATED SECURITIES ............................... 43,260 7,251
------------- -------------
TOTAL INVESTMENT INCOME ............................................ 8,722,779 1,075,609
------------- -------------
EXPENSES
ADVISORY FEES ................................................... 674,441 97,261
ADMINISTRATION FEES
FUND LEVEL ................................................... 84,305 11,648
CLASS A ...................................................... 147,017 N/A
CLASS B ...................................................... 43,179 N/A
CLASS C ...................................................... 13,466 N/A
INSTITUTIONAL CLASS .......................................... 191,748 46,590
CUSTODY FEES .................................................... 33,722 4,659
SHAREHOLDER SERVICING FEES ...................................... 181,841 0
ACCOUNTING FEES ................................................. 19,802 11,519
DISTRIBUTION FEES (NOTE 3)
CLASS B ...................................................... 115,657 N/A
CLASS C ...................................................... 36,070 N/A
AUDIT FEES ...................................................... 10,600 8,307
LEGAL FEES ...................................................... 3,261 510
REGISTRATION FEES ............................................... 510 50
SHAREHOLDER REPORTS ............................................. 26,855 4,047
TRUSTEES' FEES .................................................. 3,460 3,460
OTHER FEES AND EXPENSES ......................................... 6,132 1,363
------------- -------------
TOTAL EXPENSES ..................................................... 1,592,066 189,414
------------- -------------
LESS:
WAIVED FEES AND REIMBURSED EXPENSES (NOTE 3) .................... (246,756) (6,342)
NET EXPENSES .................................................... 1,345,310 183,072
------------- -------------
NET INVESTMENT INCOME (LOSS) ....................................... 7,377,469 892,537
------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) FROM:
SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION . 686,668 85,807
------------- -------------
NET REALIZED GAIN (LOSS) FROM INVESTMENTS .......................... 686,668 85,807
------------- -------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF:
SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION . 9,007,583 729,498
------------- -------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS 9,007,583 729,498
------------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ............. 9,694,251 815,305
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .... $ 17,071,720 $ 1,707,842
============= =============
63
WELLS FARGO TAX-FREE FUNDS STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
CALIFORNIA LIMITED
TERM TAX-FREE FUND
--------------------------------------
(UNAUDITED) FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 2004 JUNE 30, 2004
- -------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS ......................................... $ 90,178,810 $ 150,206,046
OPERATIONS:
NET INVESTMENT INCOME (LOSS) .................................... 1,162,716 2,397,611
NET REALIZED GAIN (LOSS) ON INVESTMENTS ......................... 276,987 (35,022)
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS .................................. 1,262,876 (2,511,125)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .... 2,702,579 (148,536)
------------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A ...................................................... (811,269) (1,721,585)
CLASS B ...................................................... N/A N/A
CLASS C ...................................................... (110,822) (176,881)
INSTITUTIONAL CLASS .......................................... (238,648) (497,611)
NET REALIZED GAIN ON SALES OF INVESTMENTS
CLASS A ...................................................... (130,582) (487,692)
CLASS B ...................................................... N/A N/A
CLASS C ...................................................... (25,511) (77,739)
INSTITUTIONAL CLASS .......................................... (42,624) (117,659)
CAPITAL SHARES TRANSACTIONS:
PROCEEDS FROM SHARES SOLD - CLASS A ............................. 9,036,291 18,425,398
REINVESTMENT OF DISTRIBUTIONS - CLASS A ......................... 608,960 1,628,501
COST OF SHARES REDEEMED - CLASS A ............................... (11,459,795) (54,305,164)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS A .............................. (1,814,544) (34,251,265)
------------------- -------------
PROCEEDS FROM SHARES SOLD - CLASS B ............................. N/A N/A
REINVESTMENT OF DISTRIBUTIONS - CLASS B ......................... N/A N/A
COST OF SHARES REDEEMED - CLASS B ............................... N/A N/A
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS B .............................. N/A N/A
------------------- -------------
PROCEEDS FROM SHARES SOLD - CLASS C ............................. 1,665,921 5,262,102
REINVESTMENT OF DISTRIBUTIONS - CLASS C ......................... 91,837 200,699
COST OF SHARES REDEEMED - CLASS C ............................... (1,686,222) (4,922,695)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS C .............................. 71,536 540,106
------------------- -------------
PROCEEDS FROM SHARES SOLD - INSTITUTIONAL CLASS ................. 6,199,907 17,367,551
REINVESTMENT OF DISTRIBUTIONS - INSTITUTIONAL CLASS ............. 71,604 222,700
COST OF SHARES REDEEMED - INSTITUTIONAL CLASS ................... (2,057,952) (40,678,625)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - INSTITUTIONAL CLASS .................. 4,213,559 (23,088,374)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS ........................................ 2,470,551 (56,799,533)
=================== =============
NET INCREASE (DECREASE) IN NET ASSETS .............................. 3,813,674 (60,027,236)
=================== =============
ENDING NET ASSETS .................................................. $ 93,992,484 $ 90,178,810
------------------- -------------
SHARES ISSUED AND REDEEMED:
SHARES SOLD - CLASS A ........................................... 850,988 1,735,267
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS A ........ 57,410 153,411
SHARES REDEEMED - CLASS A ....................................... (1,081,039) (5,112,809)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS A ............ (172,641) (3,224,131)
------------------- -------------
SHARES SOLD - CLASS B ........................................... N/A N/A
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS B ........ N/A N/A
SHARES REDEEMED - CLASS B ....................................... N/A N/A
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS B ............ N/A N/A
------------------- -------------
SHARES SOLD - CLASS C ........................................... 157,149 495,276
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS C ........ 8,662 18,918
SHARES REDEEMED - CLASS C ....................................... (158,958) (464,575)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS C ............ 6,853 49,619
------------------- -------------
SHARES SOLD - INSTITUTIONAL CLASS ............................... 594,572 1,659,145
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS -
INSTITUTIONAL CLASS ............................................ 6,861 21,355
SHARES REDEEMED - INSTITUTIONAL CLASS ........................... (197,854) (3,902,649)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - INSTITUTIONAL CLASS 403,579 (2,222,149)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM
CAPITAL SHARE TRANSACTIONS ........................................ 237,791 (5,396,661)
=================== =============
ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ....... $ 2,933 $ 956
=================== =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
64
STATEMENTS OF CHANGES IN NET ASSETS WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
--------------------------------------
(UNAUDITED) FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 2004 JUNE 30, 2004
- -------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS ......................................... $ 519,995,158 $ 623,952,025
OPERATIONS:
NET INVESTMENT INCOME (LOSS) .................................... 11,222,385 24,124,478
NET REALIZED GAIN (LOSS) ON INVESTMENTS ......................... 1,885,747 2,004,996
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS .................................. 15,878,320 (26,197,643)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .... 28,986,452 (68,169)
------------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A ...................................................... (8,234,698) (16,870,492)
CLASS B ...................................................... (1,533,108) (4,124,399)
CLASS C ...................................................... (602,169) (1,432,518)
INSTITUTIONAL CLASS .......................................... (852,556) (1,697,070)
NET REALIZED GAIN ON SALES OF INVESTMENTS
CLASS A ...................................................... (1,795,465) (3,428,987)
CLASS B ...................................................... (382,347) (1,052,885)
CLASS C ...................................................... (160,891) (364,548)
INSTITUTIONAL CLASS .......................................... (171,649) (326,288)
CAPITAL SHARES TRANSACTIONS:
PROCEEDS FROM SHARES SOLD - CLASS A ............................. 21,374,318 57,110,794
REINVESTMENT OF DISTRIBUTIONS - CLASS A ......................... 5,622,799 13,164,025
COST OF SHARES REDEEMED - CLASS A ............................... (28,055,927) (91,365,088)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS A .............................. (1,058,810) (21,090,269)
------------------- -------------
PROCEEDS FROM SHARES SOLD - CLASS B ............................. 824,573 5,847,287
REINVESTMENT OF DISTRIBUTIONS - CLASS B ......................... 1,202,490 3,744,549
COST OF SHARES REDEEMED - CLASS B ............................... (18,169,449) (52,357,541)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS B .............................. (16,142,386) (42,765,705)
------------------- -------------
PROCEEDS FROM SHARES SOLD - CLASS C ............................. 1,295,513 7,456,114
REINVESTMENT OF DISTRIBUTIONS - CLASS C ......................... 451,986 1,206,036
COST OF SHARES REDEEMED - CLASS C ............................... (3,827,393) (19,098,859)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS C .............................. (2,079,894) (10,436,709)
------------------- -------------
PROCEEDS FROM SHARES SOLD - INSTITUTIONAL CLASS ................. 3,495,902 12,065,674
REINVESTMENT OF DISTRIBUTIONS - INSTITUTIONAL CLASS ............. 181,418 457,656
COST OF SHARES REDEEMED - INSTITUTIONAL CLASS ................... (5,649,204) (12,822,158)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - INSTITUTIONAL CLASS .................. (1,971,884) (298,828)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS ........................................ (21,252,974) (74,591,511)
=================== =============
NET INCREASE (DECREASE) IN NET ASSETS .............................. (5,999,405) (103,956,867)
=================== =============
ENDING NET ASSETS .................................................. $ 513,995,753 $ 519,995,158
------------------- -------------
SHARES ISSUED AND REDEEMED:
SHARES SOLD - CLASS A ........................................... 1,897,147 5,047,647
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS A ........ 497,180 1,167,563
SHARES REDEEMED - CLASS A ....................................... (2,485,475) (8,132,608)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS A ............ (91,148) (1,917,398)
------------------- -------------
SHARES SOLD - CLASS B ........................................... 71,967 507,037
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS B ........ 104,323 325,778
SHARES REDEEMED - CLASS B ....................................... (1,582,728) (4,566,375)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS B ............ (1,406,438) (3,733,560)
------------------- -------------
SHARES SOLD - CLASS C ........................................... 112,114 644,768
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS C ........ 39,202 104,918
SHARES REDEEMED - CLASS C ....................................... (333,141) (1,669,356)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS C ............ (181,825) (919,670)
------------------- -------------
SHARES SOLD - INSTITUTIONAL CLASS ............................... 310,296 1,060,148
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS -
INSTITUTIONAL CLASS ............................................ 16,005 40,478
SHARES REDEEMED - INSTITUTIONAL CLASS ........................... (500,056) (1,136,250)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - INSTITUTIONAL CLASS (173,755) (35,624)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM
CAPITAL SHARE TRANSACTIONS ........................................ (1,853,166) (6,606,252)
=================== =============
ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ....... $ (83) $ 63
=================== =============
COLORADO TAX-FREE FUND
--------------------------------------
(UNAUDITED) FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 2004 JUNE 30, 2004
- -------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS ......................................... $ 102,988,017 $ 125,975,052
OPERATIONS:
NET INVESTMENT INCOME (LOSS) .................................... 2,318,395 4,980,176
NET REALIZED GAIN (LOSS) ON INVESTMENTS ......................... 131,056 (223,176)
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS .................................. 2,355,334 (3,929,278)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .... 4,804,785 827,722
------------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A ...................................................... (1,161,733) (2,378,005)
CLASS B ...................................................... (186,447) (451,997)
CLASS C ...................................................... N/A N/A
INSTITUTIONAL CLASS .......................................... (956,838) (2,122,654)
NET REALIZED GAIN ON SALES OF INVESTMENTS
CLASS A ...................................................... 0 0
CLASS B ...................................................... 0 0
CLASS C ...................................................... N/A N/A
INSTITUTIONAL CLASS .......................................... 0 0
CAPITAL SHARES TRANSACTIONS:
PROCEEDS FROM SHARES SOLD - CLASS A ............................. 5,628,856 10,867,042
REINVESTMENT OF DISTRIBUTIONS - CLASS A ......................... 648,644 1,565,664
COST OF SHARES REDEEMED - CLASS A ............................... (4,018,989) (19,168,789)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS A .............................. 2,258,511 (6,736,083)
------------------- -------------
PROCEEDS FROM SHARES SOLD - CLASS B ............................. 138,056 448,916
REINVESTMENT OF DISTRIBUTIONS - CLASS B ......................... 102,807 293,984
COST OF SHARES REDEEMED - CLASS B ............................... (966,773) (3,984,835)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS B .............................. (725,910) (3,241,935)
------------------- -------------
PROCEEDS FROM SHARES SOLD - CLASS C ............................. N/A N/A
REINVESTMENT OF DISTRIBUTIONS - CLASS C ......................... N/A N/A
COST OF SHARES REDEEMED - CLASS C ............................... N/A N/A
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS C .............................. N/A N/A
------------------- -------------
PROCEEDS FROM SHARES SOLD - INSTITUTIONAL CLASS ................. 6,172,980 7,722,954
REINVESTMENT OF DISTRIBUTIONS - INSTITUTIONAL CLASS ............. 61,410 102,911
COST OF SHARES REDEEMED - INSTITUTIONAL CLASS ................... (9,623,666) (16,709,948)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - INSTITUTIONAL CLASS .................. (3,389,276) (8,884,083)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS ........................................ (1,856,675) (18,862,101)
=================== =============
NET INCREASE (DECREASE) IN NET ASSETS .............................. 643,092 (22,987,035)
=================== =============
ENDING NET ASSETS .................................................. $ 103,631,109 $ 102,988,017
------------------- -------------
SHARES ISSUED AND REDEEMED:
SHARES SOLD - CLASS A ........................................... 518,255 999,349
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS A ........ 59,682 144,805
SHARES REDEEMED - CLASS A ....................................... (370,122) (1,777,598)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS A ............ 207,815 (633,444)
------------------- -------------
SHARES SOLD - CLASS B ........................................... 12,723 41,415
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS B ........ 9,449 27,147
SHARES REDEEMED - CLASS B ....................................... (89,070) (370,048)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS B ............ (66,898) (301,486)
------------------- -------------
SHARES SOLD - CLASS C ........................................... N/A N/A
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS C ........ N/A N/A
SHARES REDEEMED - CLASS C ....................................... N/A N/A
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS C ............ N/A N/A
------------------- -------------
SHARES SOLD - INSTITUTIONAL CLASS ............................... 568,123 708,435
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS -
INSTITUTIONAL CLASS ............................................ 5,650 9,514
SHARES REDEEMED - INSTITUTIONAL CLASS ........................... (886,653) (1,543,977)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - INSTITUTIONAL CLASS (312,880) (826,028)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM
CAPITAL SHARE TRANSACTIONS ........................................ (171,963) (1,760,958)
=================== =============
ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ....... $ 88,625 $ 75,248
=================== =============
MINNESOTA TAX-FREE FUND
--------------------------------------
(UNAUDITED) FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 2004 JUNE 30, 2004
- -------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS ......................................... $ 195,936,756 $ 248,945,940
OPERATIONS:
NET INVESTMENT INCOME (LOSS) .................................... 4,069,698 9,323,268
NET REALIZED GAIN (LOSS) ON INVESTMENTS ......................... 106,177 1,733,956
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS .................................. 4,656,940 (9,705,375)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .... 8,832,815 1,351,849
------------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A ...................................................... (781,471) (1,573,003)
CLASS B ...................................................... (230,661) (620,859)
CLASS C ...................................................... N/A N/A
INSTITUTIONAL CLASS .......................................... (2,984,231) (6,990,214)
NET REALIZED GAIN ON SALES OF INVESTMENTS
CLASS A ...................................................... (191,836) 0
CLASS B ...................................................... (63,307) 0
CLASS C ...................................................... N/A N/A
INSTITUTIONAL CLASS .......................................... (647,417) 0
CAPITAL SHARES TRANSACTIONS:
PROCEEDS FROM SHARES SOLD - CLASS A ............................. 3,818,480 9,738,289
REINVESTMENT OF DISTRIBUTIONS - CLASS A ......................... 650,229 1,164,383
COST OF SHARES REDEEMED - CLASS A ............................... (3,257,980) (13,572,549)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS A .............................. 1,210,729 (2,669,877)
------------------- -------------
PROCEEDS FROM SHARES SOLD - CLASS B ............................. 166,271 956,082
REINVESTMENT OF DISTRIBUTIONS - CLASS B ......................... 184,647 450,022
COST OF SHARES REDEEMED - CLASS B ............................... (2,695,330) (7,704,690)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS B .............................. (2,344,412) (6,298,586)
------------------- -------------
PROCEEDS FROM SHARES SOLD - CLASS C ............................. N/A N/A
REINVESTMENT OF DISTRIBUTIONS - CLASS C ......................... N/A N/A
COST OF SHARES REDEEMED - CLASS C ............................... N/A N/A
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS C .............................. N/A N/A
------------------- -------------
PROCEEDS FROM SHARES SOLD - INSTITUTIONAL CLASS ................. 3,979,826 151,527,324
REINVESTMENT OF DISTRIBUTIONS - INSTITUTIONAL CLASS ............. 645,469 956,412
COST OF SHARES REDEEMED - INSTITUTIONAL CLASS ................... (17,775,954) (188,692,230)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - INSTITUTIONAL CLASS .................. (13,150,659) (36,208,494)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS ........................................ (14,284,342) (45,176,957)
=================== =============
NET INCREASE (DECREASE) IN NET ASSETS .............................. (10,350,450) (53,009,184)
=================== =============
ENDING NET ASSETS .................................................. $ 185,586,306 $ 195,936,756
------------------- -------------
SHARES ISSUED AND REDEEMED:
SHARES SOLD - CLASS A ........................................... 343,215 876,965
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS A ........ 58,522 105,282
SHARES REDEEMED - CLASS A ....................................... (293,827) (1,224,718)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS A ............ 107,910 (242,471)
------------------- -------------
SHARES SOLD - CLASS B ........................................... 14,937 86,243
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS B ........ 16,619 40,689
SHARES REDEEMED - CLASS B ....................................... (242,854) (698,257)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS B ............ (211,298) (571,325)
------------------- -------------
SHARES SOLD - CLASS C ........................................... N/A N/A
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS C ........ N/A N/A
SHARES REDEEMED - CLASS C ....................................... N/A N/A
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS C ............ N/A N/A
------------------- -------------
SHARES SOLD - INSTITUTIONAL CLASS ............................... 358,530 13,317,602
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS -
INSTITUTIONAL CLASS ............................................ 58,081 86,529
SHARES REDEEMED - INSTITUTIONAL CLASS ........................... (1,601,556) (16,699,116)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - INSTITUTIONAL CLASS (1,184,945) (3,294,985)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM
CAPITAL SHARE TRANSACTIONS ........................................ (1,288,333) (4,108,781)
=================== =============
ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ....... $ 200,190 $ 126,855
=================== =============
65
WELLS FARGO TAX-FREE FUNDS STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
NATIONAL LIMITED
TERM TAX-FREE FUND
--------------------------------------
(UNAUDITED) FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 2004 JUNE 30, 2004
- -------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS ......................................... $ 172,278,233 $ 152,835,376
OPERATIONS:
NET INVESTMENT INCOME (LOSS) .................................... 2,358,654 4,347,596
NET REALIZED GAIN (LOSS) ON INVESTMENTS ......................... 181,920 145,761
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS .................................. 1,569,772 (4,852,146)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ......................................... 4,110,346 (358,789)
------------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A ...................................................... (22,717) (5,435)
CLASS B ...................................................... (6,314) (930)
CLASS C ...................................................... (4,144) (2,344)
INSTITUTIONAL CLASS .......................................... (2,322,135) (4,332,888)
NET REALIZED GAIN ON SALES OF INVESTMENTS
CLASS A ...................................................... 0 0
CLASS B ...................................................... 0 0
CLASS C ...................................................... 0 0
INSTITUTIONAL CLASS .......................................... 0 0
CAPITAL SHARES TRANSACTIONS:
PROCEEDS FROM SHARES SOLD - CLASS A ............................. 1,541,055 1,171,792
REINVESTMENT OF DISTRIBUTIONS - CLASS A ......................... 14,372 3,947
COST OF SHARES REDEEMED - CLASS A ............................... (391,583) (10,278)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS A .............................. 1,163,844 1,165,461
------------------- -------------
PROCEEDS FROM SHARES SOLD - CLASS B ............................. 159,024 644,230
REINVESTMENT OF DISTRIBUTIONS - CLASS B ......................... 4,791 926
COST OF SHARES REDEEMED - CLASS B ............................... (28,763) (16,088)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS B .............................. 135,052 629,068
------------------- -------------
PROCEEDS FROM SHARES SOLD - CLASS C ............................. 546,412 885,566
REINVESTMENT OF DISTRIBUTIONS - CLASS C ......................... 2,946 1,997
COST OF SHARES REDEEMED - CLASS C ............................... (100) (694,115)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS C .............................. 549,258 193,448
------------------- -------------
PROCEEDS FROM SHARES SOLD - INSTITUTIONAL CLASS ................. 20,923,801 78,641,316
REINVESTMENT OF DISTRIBUTIONS - INSTITUTIONAL CLASS ............. 248,940 674,603
COST OF SHARES REDEEMED - INSTITUTIONAL CLASS ................... (45,721,995) (57,160,653)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - INSTITUTIONAL CLASS .................. (24,549,254) 22,155,266
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS ........................................ (22,701,100) 24,143,243
=================== =============
NET INCREASE (DECREASE) IN NET ASSETS .............................. (20,946,064) 19,442,857
=================== =============
ENDING NET ASSETS .................................................. $ 151,332,169 $ 172,278,233
------------------- -------------
SHARES ISSUED AND REDEEMED:
SHARES SOLD - CLASS A ........................................... 141,229 106,691
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS A ........ 1,315 363
SHARES REDEEMED - CLASS A ....................................... (35,792) (932)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS A ............ 106,752 106,122
------------------- -------------
SHARES SOLD - CLASS B ........................................... 14,531 59,540
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS B ........ 440 86
SHARES REDEEMED - CLASS B ....................................... (2,621) (1,474)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS B ............ 12,350 58,152
------------------- -------------
SHARES SOLD - CLASS C ........................................... 49,829 79,465
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS C ........ 271 183
SHARES REDEEMED - CLASS C ....................................... (10) (64,513)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS C ............ 50,090 15,135
------------------- -------------
SHARES SOLD - INSTITUTIONAL CLASS ............................... 1,915,372 7,141,701
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS -
INSTITUTIONAL CLASS ............................................ 22,786 61,524
SHARES REDEEMED - INSTITUTIONAL CLASS ........................... (4,186,716) (5,222,903)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING -
INSTITUTIONAL CLASS ............................................... (2,248,558) 1,980,322
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM
CAPITAL SHARE TRANSACTIONS ........................................ (2,079,366) 2,159,731
=================== =============
ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ....... $ (47,537) $ (50,881)
=================== =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
66
STATEMENTS OF CHANGES IN NET ASSETS WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
--------------------------------------
(UNAUDITED) FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 2004 JUNE 30, 2004
- -------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS ......................................... $ 328,238,217 $ 438,305,347
OPERATIONS:
NET INVESTMENT INCOME (LOSS) .................................... 7,377,469 16,944,877
NET REALIZED GAIN (LOSS) ON INVESTMENTS ......................... 686,668 (2,140,496)
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS .................................. 9,007,583 (12,123,041)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ......................................... 17,071,720 2,681,340
------------------- -------------
NET INVESTMENT INCOME
CLASS A ...................................................... (2,263,426) (4,796,065)
CLASS B ...................................................... (548,471) (1,457,391)
CLASS C ...................................................... (171,445) (463,857)
INSTITUTIONAL CLASS .......................................... (4,362,765) (10,161,552)
NET REALIZED GAIN ON SALES OF INVESTMENTS
CLASS A ...................................................... 0 0
CLASS B ...................................................... 0 0
CLASS C ...................................................... 0 0
INSTITUTIONAL CLASS .......................................... 0 0
CAPITAL SHARES TRANSACTIONS:
PROCEEDS FROM SHARES SOLD - CLASS A ............................. 5,897,918 33,124,214
REINVESTMENT OF DISTRIBUTIONS - CLASS A ......................... 1,143,048 2,965,238
COST OF SHARES REDEEMED - CLASS A ............................... (13,878,001) (42,221,290)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS A .............................. (6,837,035) (6,131,838)
------------------- -------------
PROCEEDS FROM SHARES SOLD - CLASS B ............................. 314,479 1,836,158
REINVESTMENT OF DISTRIBUTIONS - CLASS B ......................... 280,935 899,844
COST OF SHARES REDEEMED - CLASS B ............................... (4,655,757) (18,378,903)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS B .............................. (4,060,343) (15,642,901)
------------------- -------------
PROCEEDS FROM SHARES SOLD - CLASS C ............................. 244,454 1,035,182
REINVESTMENT OF DISTRIBUTIONS - CLASS C ......................... 91,966 275,379
COST OF SHARES REDEEMED - CLASS C ............................... (1,461,263) (6,221,092)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS C .............................. (1,124,843) (4,910,531)
------------------- -------------
PROCEEDS FROM SHARES SOLD - INSTITUTIONAL CLASS ................. 12,013,469 22,340,790
REINVESTMENT OF DISTRIBUTIONS - INSTITUTIONAL CLASS ............. 300,552 640,364
COST OF SHARES REDEEMED - INSTITUTIONAL CLASS ................... (20,247,013) (92,165,489)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - INSTITUTIONAL CLASS .................. (7,932,992) (69,184,335)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS ........................................ (19,955,213) (95,869,605)
=================== =============
NET INCREASE (DECREASE) IN NET ASSETS .............................. (10,229,600) (110,067,130)
=================== =============
ENDING NET ASSETS .................................................. $ 318,008,617 $ 328,238,217
------------------- -------------
SHARES ISSUED AND REDEEMED:
SHARES SOLD - CLASS A ........................................... 566,981 3,197,886
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS A ........ 109,847 286,779
SHARES REDEEMED - CLASS A ....................................... (1,334,741) (4,092,846)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS A ............ (657,913) (608,181)
------------------- -------------
SHARES SOLD - CLASS B ........................................... 30,233 177,048
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS B ........ 26,998 87,006
SHARES REDEEMED - CLASS B ....................................... (447,331) (1,781,808)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS B ............ (390,100) (1,517,754)
------------------- -------------
SHARES SOLD - CLASS C ........................................... 23,489 99,782
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS C ........ 8,839 26,635
SHARES REDEEMED - CLASS C ....................................... (140,718) (599,078)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS C ............ (108,390) (472,661)
------------------- -------------
SHARES SOLD - INSTITUTIONAL CLASS ............................... 1,157,400 2,157,273
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS -
INSTITUTIONAL CLASS ............................................ 28,859 61,967
SHARES REDEEMED - INSTITUTIONAL CLASS ........................... (1,942,934) (8,943,378)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING -
INSTITUTIONAL CLASS ............................................... (756,675) (6,724,138)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM
CAPITAL SHARE TRANSACTIONS ........................................ (1,913,078) (9,322,734)
=================== =============
ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ....... $ 614,860 $ 583,498
=================== =============
NEBRASKA TAX-FREE FUND
--------------------------------------
(UNAUDITED) FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 2004 JUNE 30, 2004
- -------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS ......................................... $ 46,252,818 $ 64,760,128
OPERATIONS:
NET INVESTMENT INCOME (LOSS) .................................... 892,537 2,193,602
NET REALIZED GAIN (LOSS) ON INVESTMENTS ......................... 85,807 671,433
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS .................................. 729,498 (2,617,974)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ......................................... 1,707,842 247,061
------------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A ...................................................... N/A N/A
CLASS B ...................................................... N/A N/A
CLASS C ...................................................... N/A N/A
INSTITUTIONAL CLASS .......................................... (890,781) (2,190,276)
NET REALIZED GAIN ON SALES OF INVESTMENTS
CLASS A ...................................................... N/A N/A
CLASS B ...................................................... N/A N/A
CLASS C ...................................................... N/A N/A
INSTITUTIONAL CLASS .......................................... (651,075) (381,315)
CAPITAL SHARES TRANSACTIONS:
PROCEEDS FROM SHARES SOLD - CLASS A ............................. N/A N/A
REINVESTMENT OF DISTRIBUTIONS - CLASS A ......................... N/A N/A
COST OF SHARES REDEEMED - CLASS A ............................... N/A N/A
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS A .............................. N/A N/A
------------------- -------------
PROCEEDS FROM SHARES SOLD - CLASS B ............................. N/A N/A
REINVESTMENT OF DISTRIBUTIONS - CLASS B ......................... N/A N/A
COST OF SHARES REDEEMED - CLASS B ............................... N/A N/A
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS B .............................. N/A N/A
------------------- -------------
PROCEEDS FROM SHARES SOLD - CLASS C ............................. N/A N/A
REINVESTMENT OF DISTRIBUTIONS - CLASS C ......................... N/A N/A
COST OF SHARES REDEEMED - CLASS C ............................... N/A N/A
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - CLASS C .............................. N/A N/A
------------------- -------------
PROCEEDS FROM SHARES SOLD - INSTITUTIONAL CLASS ................. 147,400 853,170
REINVESTMENT OF DISTRIBUTIONS - INSTITUTIONAL CLASS ............. 59,847 76,372
COST OF SHARES REDEEMED - INSTITUTIONAL CLASS ................... (2,796,424) (17,112,322)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS - INSTITUTIONAL CLASS .................. (2,589,177) (16,182,780)
------------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS ........................................ (2,589,177) (16,182,780)
=================== =============
NET INCREASE (DECREASE) IN NET ASSETS .............................. (2,423,191) (18,507,310)
=================== =============
ENDING NET ASSETS .................................................. $ 43,829,627 $ 46,252,818
------------------- -------------
SHARES ISSUED AND REDEEMED:
SHARES SOLD - CLASS A ........................................... N/A N/A
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS A ........ N/A N/A
SHARES REDEEMED - CLASS A ....................................... N/A N/A
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS A ............ N/A N/A
------------------- -------------
SHARES SOLD - CLASS B ........................................... N/A N/A
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS B ........ N/A N/A
SHARES REDEEMED - CLASS B ....................................... N/A N/A
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS B ............ N/A N/A
------------------- -------------
SHARES SOLD - CLASS C ........................................... N/A N/A
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS - CLASS C ........ N/A N/A
SHARES REDEEMED - CLASS C ....................................... N/A N/A
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS C ............ N/A N/A
------------------- -------------
SHARES SOLD - INSTITUTIONAL CLASS ............................... 14,458 83,620
SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS -
INSTITUTIONAL CLASS ............................................ 5,938 7,470
SHARES REDEEMED - INSTITUTIONAL CLASS ........................... (274,302) (1,676,883)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING -
INSTITUTIONAL CLASS ............................................... (253,906) (1,585,793)
------------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM
CAPITAL SHARE TRANSACTIONS ........................................ (253,906) (1,585,793)
=================== =============
ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ....... $ 4,604 $ 2,848
=================== =============
67
WELLS FARGO TAX-FREE FUNDS FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
NET REALIZED
BEGINNING NET AND DIVIDENDS
NET ASSET INVESTMENT UNREALIZED FROM NET
VALUE PER INCOME GAIN (LOSS) ON INVESTMENT
SHARE (LOSS) INVESTMENTS INCOME
- -------------------------------------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.46 0.14 0.18 (0.14)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 10.74 0.23 (0.22) (0.23)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 10.50 0.25 0.24 (0.25)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 10.33 0.31 0.20 (0.31)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 10.14 0.41 0.19 (0.41)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 10.23 0.40 (0.04) (0.40)
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.46 0.10 0.17 (0.10)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 10.74 0.15 (0.22) (0.15)
AUGUST 30, 2002(3) TO JUNE 30, 2003 ......... $ 10.63 0.13 0.11 (0.13)
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.29 0.15 0.18 (0.15)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 10.57 0.26 (0.22) (0.26)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 10.34 0.27 0.23 (0.27)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 10.17 0.32 0.20 (0.32)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 9.98 0.42 0.19 (0.42)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 10.07 0.41 (0.04) (0.41)
CALIFORNIA TAX-FREE FUND
- -------------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 11.01 0.25 0.38 (0.25)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 11.57 0.50 (0.46) (0.50)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 11.29 0.51 0.33 (0.53)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 11.24 0.55 0.10 (0.54)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 10.77 0.54 0.47 (0.54)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 11.00 0.52 (0.20) (0.52)
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 11.22 0.21 0.39 (0.21)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 11.79 0.41 (0.46) (0.41)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 11.51 0.42 0.33 (0.44)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 11.46 0.48 0.09 (0.46)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 10.97 0.46 0.49 (0.46)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 11.22 0.45 (0.22) (0.45)
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 11.22 0.21 0.40 (0.21)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 11.79 0.41 (0.46) (0.41)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 11.51 0.43 0.32 (0.44)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 11.46 0.47 0.10 (0.46)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 10.97 0.46 0.49 (0.46)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 11.22 0.45 (0.22) (0.45)
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 11.03 0.26 0.38 (0.26)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 11.59 0.53 (0.46) (0.53)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 11.32 0.53 0.32 (0.55)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 11.27 0.57 0.10 (0.56)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 10.79 0.56 0.48 (0.56)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 11.03 0.54 (0.21) (0.54)
COLORADO TAX-FREE FUND
- -------------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.64 0.23 0.26 (0.23)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 11.01 0.47 (0.37) (0.47)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 10.61 0.50 0.40 (0.50)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 10.39 0.53 0.22 (0.53)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 9.83 0.55 0.56 (0.55)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 10.30 0.54 (0.46) (0.54)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
68
FINANCIAL HIGHLIGHTS WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
DISTRIBUTIONS ENDING
FROM NET NET ASSET
REALIZED VALUE PER
GAINS SHARE
- ----------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) (0.02) $ 10.62
JULY 1, 2003 TO JUNE 30, 2004 ............... (0.06) $ 10.46
JULY 1, 2002 TO JUNE 30, 2003 ............... 0.00 $ 10.74
JULY 1, 2001 TO JUNE 30, 2002 ............... (0.03) $ 10.50
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 10.33
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.05) $ 10.14
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) (0.02) $ 10.61
JULY 1, 2003 TO JUNE 30, 2004 ............... (0.06) $ 10.46
AUGUST 30, 2002(3) TO JUNE 30, 2003 ......... 0.00 $ 10.74
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) (0.02) $ 10.45
JULY 1, 2003 TO JUNE 30, 2004 ............... (0.06) $ 10.29
JULY 1, 2002 TO JUNE 30, 2003 ............... 0.00 $ 10.57
JULY 1, 2001 TO JUNE 30, 2002 ............... (0.03) $ 10.34
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 10.17
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.05) $ 9.98
CALIFORNIA TAX-FREE FUND
- ----------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) (0.06) $ 11.33
JULY 1, 2003 TO JUNE 30, 2004 ............... (0.10) $ 11.01
JULY 1, 2002 TO JUNE 30, 2003 ............... (0.03) $ 11.57
JULY 1, 2001 TO JUNE 30, 2002 ............... (0.06) $ 11.29
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 11.24
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.03) $ 10.77
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) (0.06) $ 11.55
JULY 1, 2003 TO JUNE 30, 2004 ............... (0.11) $ 11.22
JULY 1, 2002 TO JUNE 30, 2003 ............... (0.03) $ 11.79
JULY 1, 2001 TO JUNE 30, 2002 ............... (0.06) $ 11.51
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 11.46
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.03) $ 10.97
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) (0.06) $ 11.56
JULY 1, 2003 TO JUNE 30, 2004 ............... (0.11) $ 11.22
JULY 1, 2002 TO JUNE 30, 2003 ............... (0.03) $ 11.79
JULY 1, 2001 TO JUNE 30, 2002 ............... (0.06) $ 11.51
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 11.46
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.03) $ 10.97
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) (0.06) $ 11.35
JULY 1, 2003 TO JUNE 30, 2004 ............... (0.10) $ 11.03
JULY 1, 2002 TO JUNE 30, 2003 ............... (0.03) $ 11.59
JULY 1, 2001 TO JUNE 30, 2002 ............... (0.06) $ 11.32
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 11.27
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.03) $ 10.79
COLORADO TAX-FREE FUND
- ----------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 0.00 $ 10.90
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.00 $ 10.64
JULY 1, 2002 TO JUNE 30, 2003 ............... 0.00 $ 11.01
JULY 1, 2001 TO JUNE 30, 2002 ............... 0.00 $ 10.61
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 10.39
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.01) $ 9.83
RATIO TO AVERAGE NET ASSETS (ANNUALIZED)(1)
-------------------------------------------------------------
NET INVESTMENT GROSS EXPENSES NET
INCOME (LOSS) EXPENSES WAIVED EXPENSES
- -------------------------------------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 2.62% 1.08% (0.23)% 0.85%
JULY 1, 2003 TO JUNE 30, 2004 ............... 2.13% 1.05% (0.20)% 0.85%
JULY 1, 2002 TO JUNE 30, 2003 ............... 2.35% 0.99% (0.18)% 0.81%
JULY 1, 2001 TO JUNE 30, 2002 ............... 2.97% 1.24% (0.49)% 0.75%
JULY 1, 2000 TO JUNE 30, 2001 ............... 3.90% 1.12% (0.37)% 0.75%
JULY 1, 1999 TO JUNE 30, 2000 ............... 3.98% 1.31% (0.56)% 0.75%
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 1.86% 1.83% (0.23)% 1.60%
JULY 1, 2003 TO JUNE 30, 2004 ............... 1.41% 1.80% (0.20)% 1.60%
AUGUST 30, 2002(3) TO JUNE 30, 2003 ......... 1.39% 1.79% (0.19)% 1.60%
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 2.93% 0.76% (0.16)% 0.60%
JULY 1, 2003 TO JUNE 30, 2004 ............... 2.40% 0.73% (0.13)% 0.60%
JULY 1, 2002 TO JUNE 30, 2003 ............... 2.49% 0.72% (0.12)% 0.60%
JULY 1, 2001 TO JUNE 30, 2002 ............... 3.12% 0.85% (0.25)% 0.60%
JULY 1, 2000 TO JUNE 30, 2001 ............... 4.12% 0.76% (0.16)% 0.60%
JULY 1, 1999 TO JUNE 30, 2000 ............... 4.07% 1.07% (0.44)% 0.63%
CALIFORNIA TAX-FREE FUND
- -------------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.45% 1.05% (0.25)% 0.80%
JULY 1, 2003 TO JUNE 30, 2004 ............... 4.46% 1.03% (0.23)% 0.80%
JULY 1, 2002 TO JUNE 30, 2003 ............... 4.60% 0.95% (0.16)% 0.79%
JULY 1, 2001 TO JUNE 30, 2002 ............... 4.86% 0.90% (0.13)% 0.77%
JULY 1, 2000 TO JUNE 30, 2001 ............... 4.82% 0.90% (0.13)% 0.77%
JULY 1, 1999 TO JUNE 30, 2000 ............... 4.89% 1.01% (0.24)% 0.77%
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 3.58% 1.79% (0.24)% 1.55%
JULY 1, 2003 TO JUNE 30, 2004 ............... 3.60% 1.77% (0.22)% 1.55%
JULY 1, 2002 TO JUNE 30, 2003 ............... 3.81% 1.71% (0.17)% 1.54%
JULY 1, 2001 TO JUNE 30, 2002 ............... 3.95% 1.66% (0.14)% 1.52%
JULY 1, 2000 TO JUNE 30, 2001 ............... 4.06% 1.63% (0.12)% 1.51%
JULY 1, 1999 TO JUNE 30, 2000 ............... 4.16% 1.74% (0.24)% 1.50%
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 3.59% 1.79% (0.24)% 1.55%
JULY 1, 2003 TO JUNE 30, 2004 ............... 3.60% 1.77% (0.22)% 1.55%
JULY 1, 2002 TO JUNE 30, 2003 ............... 3.80% 1.68% (0.14)% 1.54%
JULY 1, 2001 TO JUNE 30, 2002 ............... 3.94% 1.64% (0.12)% 1.52%
JULY 1, 2000 TO JUNE 30, 2001 ............... 4.04% 1.62% (0.10)% 1.52%
JULY 1, 1999 TO JUNE 30, 2000 ............... 4.15% 1.73% (0.23)% 1.50%
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.68% 0.71% (0.16)% 0.55%
JULY 1, 2003 TO JUNE 30, 2004 ............... 4.69% 0.70% (0.15)% 0.55%
JULY 1, 2002 TO JUNE 30, 2003 ............... 4.82% 0.65% (0.08)% 0.57%
JULY 1, 2001 TO JUNE 30, 2002 ............... 4.88% 0.62% (0.02)% 0.60%
JULY 1, 2000 TO JUNE 30, 2001 ............... 4.99% 0.60% 0.00% 0.60%
JULY 1, 1999 TO JUNE 30, 2000 ............... 5.02% 0.80% (0.17)% 0.63%
COLORADO TAX-FREE FUND
- -------------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.31% 1.07% (0.22)% 0.85%
JULY 1, 2003 TO JUNE 30, 2004 ............... 4.37% 1.06% (0.21)% 0.85%
JULY 1, 2002 TO JUNE 30, 2003 ............... 4.60% 0.99% (0.22)% 0.77%
JULY 1, 2001 TO JUNE 30, 2002 ............... 5.01% 0.96% (0.36)% 0.60%
JULY 1, 2000 TO JUNE 30, 2001 ............... 5.36% 0.96% (0.36)% 0.60%
JULY 1, 1999 TO JUNE 30, 2000 ............... 5.43% 1.03% (0.43)% 0.60%
PORTFOLIO NET ASSETS AT
TOTAL TURNOVER END OF PERIOD
RETURN(2) RATE (000'S OMITTED)
- ----------------------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 3.08% 50% $ 62,351
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.11% 48% $ 63,231
JULY 1, 2002 TO JUNE 30, 2003 ............... 4.74% 64% $ 99,568
JULY 1, 2001 TO JUNE 30, 2002 ............... 5.00% 34% $ 70,142
JULY 1, 2000 TO JUNE 30, 2001 ............... 6.01% 49% $ 46,157
JULY 1, 1999 TO JUNE 30, 2000 ............... 3.67% 60% $ 34,015
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 2.60% 50% $ 11,769
JULY 1, 2003 TO JUNE 30, 2004 ............... (0.64)% 48% $ 11,523
AUGUST 30, 2002(3) TO JUNE 30, 2003 ......... 2.26% 64% $ 11,301
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 3.27% 50% $ 19,872
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.36% 48% $ 15,425
JULY 1, 2002 TO JUNE 30, 2003 ............... 4.93% 64% $ 39,338
JULY 1, 2001 TO JUNE 30, 2002 ............... 5.19% 34% $ 12,224
JULY 1, 2000 TO JUNE 30, 2001 ............... 6.20% 49% $ 4,937
JULY 1, 1999 TO JUNE 30, 2000 ............... 3.79% 60% $ 4,474
CALIFORNIA TAX-FREE FUND
- ----------------------------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 5.72% 14% $ 367,306
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.41% 41% $ 357,779
JULY 1, 2002 TO JUNE 30, 2003 ............... 7.77% 34% $ 398,186
JULY 1, 2001 TO JUNE 30, 2002 ............... 5.67% 31% $ 386,927
JULY 1, 2000 TO JUNE 30, 2001 ............... 9.53% 52% $ 379,359
JULY 1, 1999 TO JUNE 30, 2000 ............... 3.10% 35% $ 385,746
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 5.31% 14% $ 78,184
JULY 1, 2003 TO JUNE 30, 2004 ............... (0.43)% 41% $ 91,719
JULY 1, 2002 TO JUNE 30, 2003 ............... 6.87% 34% $ 140,419
JULY 1, 2001 TO JUNE 30, 2002 ............... 4.88% 31% $ 146,487
JULY 1, 2000 TO JUNE 30, 2001 ............... 8.81% 52% $ 137,484
JULY 1, 1999 TO JUNE 30, 2000 ............... 2.21% 35% $ 116,376
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 5.40% 14% $ 32,994
JULY 1, 2003 TO JUNE 30, 2004 ............... (0.43)% 41% $ 34,089
JULY 1, 2002 TO JUNE 30, 2003 ............... 6.87% 34% $ 46,666
JULY 1, 2001 TO JUNE 30, 2002 ............... 4.87% 31% $ 46,013
JULY 1, 2000 TO JUNE 30, 2001 ............... 8.81% 52% $ 29,468
JULY 1, 1999 TO JUNE 30, 2000 ............... 2.21% 35% $ 16,959
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 5.84% 14% $ 35,511
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.66% 41% $ 36,408
JULY 1, 2002 TO JUNE 30, 2003 ............... 7.90% 34% $ 38,681
JULY 1, 2001 TO JUNE 30, 2002 ............... 5.85% 31% $ 42,913
JULY 1, 2000 TO JUNE 30, 2001 ............... 9.80% 52% $ 47,211
JULY 1, 1999 TO JUNE 30, 2000 ............... 3.16% 35% $ 47,263
COLORADO TAX-FREE FUND
- ----------------------------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.65% 10% $ 54,635
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.93% 31% $ 51,120
JULY 1, 2002 TO JUNE 30, 2003 ............... 8.62% 37% $ 59,877
JULY 1, 2001 TO JUNE 30, 2002 ............... 7.34% 28% $ 58,152
JULY 1, 2000 TO JUNE 30, 2001 ............... 11.54% 37% $ 48,274
JULY 1, 1999 TO JUNE 30, 2000 ............... 0.87% 106% $ 39,280
69
WELLS FARGO TAX-FREE FUNDS FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
NET REALIZED
BEGINNING NET AND DIVIDENDS
NET ASSET INVESTMENT UNREALIZED FROM NET
VALUE PER INCOME GAIN (LOSS) ON INVESTMENT
SHARE (LOSS) INVESTMENTS INCOME
- -------------------------------------------------------------------------------------------------------------
COLORADO TAX-FREE FUND (CONTINUED)
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.65 0.19 0.26 (0.19)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 11.02 0.39 (0.37) (0.39)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 10.63 0.42 0.39 (0.42)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 10.41 0.45 0.22 (0.45)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 9.85 0.48 0.56 (0.48)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 10.31 0.46 (0.45) (0.46)
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.64 0.25 0.26 (0.25)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 11.01 0.50 (0.37) (0.50)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 10.62 0.52 0.39 (0.52)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 10.40 0.53 0.22 (0.53)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 9.84 0.55 0.56 (0.55)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 10.30 0.54 (0.45) (0.54)
MINNESOTA TAX-FREE FUND
- -------------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.89 0.22 0.27 (0.22)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 11.27 0.46 (0.39) (0.45)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 10.84 0.47 0.43 (0.47)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 10.67 0.52 0.17 (0.52)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 10.18 0.54 0.49 (0.54)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 10.74 0.53 (0.55) (0.53)
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.89 0.19 0.26 (0.18)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 11.27 0.37 (0.39) (0.36)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 10.84 0.39 0.43 (0.39)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 10.67 0.44 0.17 (0.44)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 10.18 0.46 0.49 (0.46)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 10.74 0.46 (0.55) (0.46)
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.89 0.25 0.26 (0.24)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 11.27 0.49 (0.39) (0.48)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 10.84 0.49 0.43 (0.49)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 10.67 0.52 0.17 (0.52)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 10.18 0.54 0.49 (0.54)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 10.74 0.53 (0.55) (0.53)
NATIONAL LIMITED TERM TAX-FREE FUND
- -------------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.81 0.14 0.11 (0.14)
JANUARY 30, 2004(3) TO JUNE 30, 2004 ........ $ 11.03 0.10 (0.22) (0.10)
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.80 0.10 0.11 (0.10)
JANUARY 30, 2004(3) TO JUNE 30, 2004 ........ $ 11.03 0.07 (0.23) (0.07)
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.79 0.10 0.11 (0.10)
JANUARY 30, 2004(3) TO JUNE 30, 2004 ........ $ 11.03 0.06 (0.24) (0.06)
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.81 0.15 0.11 (0.15)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 11.09 0.29 (0.28) (0.29)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 10.73 0.37 0.36 (0.37)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 10.52 0.43 0.21 (0.43)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 10.19 0.46 0.33 (0.46)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 10.39 0.47 (0.20) (0.47)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
70
FINANCIAL HIGHLIGHTS WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
DISTRIBUTIONS ENDING
FROM NET NET ASSET
REALIZED VALUE PER
GAINS SHARE
- ----------------------------------------------------------------------------
COLORADO TAX-FREE FUND (CONTINUED)
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 0.00 $ 10.91
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.00 $ 10.65
JULY 1, 2002 TO JUNE 30, 2003 ............... 0.00 $ 11.02
JULY 1, 2001 TO JUNE 30, 2002 ............... 0.00 $ 10.63
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 10.41
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.01) $ 9.85
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 0.00 $ 10.90
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.00 $ 10.64
JULY 1, 2002 TO JUNE 30, 2003 ............... 0.00 $ 11.01
JULY 1, 2001 TO JUNE 30, 2002 ............... 0.00 $ 10.62
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 10.40
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.01) $ 9.84
MINNESOTA TAX-FREE FUND
- ----------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) (0.05) $ 11.11
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.00 $ 10.89
JULY 1, 2002 TO JUNE 30, 2003 ............... 0.00 $ 11.27
JULY 1, 2001 TO JUNE 30, 2002 ............... 0.00 $ 10.84
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 10.67
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.01) $ 10.18
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) (0.05) $ 11.11
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.00 $ 10.89
JULY 1, 2002 TO JUNE 30, 2003 ............... 0.00 $ 11.27
JULY 1, 2001 TO JUNE 30, 2002 ............... 0.00 $ 10.84
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 10.67
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.01) $ 10.18
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) (0.05) $ 11.11
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.00 $ 10.89
JULY 1, 2002 TO JUNE 30, 2003 ............... 0.00 $ 11.27
JULY 1, 2001 TO JUNE 30, 2002 ............... 0.00 $ 10.84
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 10.67
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.01) $ 10.18
NATIONAL LIMITED TERM TAX-FREE FUND
- ----------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 0.00 $ 10.92
JANUARY 30, 2004(3) TO JUNE 30, 2004 ........ 0.00 $ 10.81
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 0.00 $ 10.91
JANUARY 30, 2004(3) TO JUNE 30, 2004 ........ 0.00 $ 10.80
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 0.00 $ 10.90
JANUARY 30, 2004(3) TO JUNE 30, 2004 ........ 0.00 $ 10.79
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 0.00 $ 10.92
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.00 $ 10.81
JULY 1, 2002 TO JUNE 30, 2003 ............... 0.00 $ 11.09
JULY 1, 2001 TO JUNE 30, 2002 ............... 0.00 $ 10.73
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 10.52
JULY 1, 1999 TO JUNE 30, 2000 ............... 0.00 $ 10.19
RATIO TO AVERAGE NET ASSETS (ANNUALIZED)(1)
-------------------------------------------------------------
NET INVESTMENT GROSS EXPENSES NET
INCOME (LOSS) EXPENSES WAIVED EXPENSES
- -------------------------------------------------------------------------------------------------------------
COLORADO TAX-FREE FUND (CONTINUED)
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 3.55% 1.82% (0.22)% 1.60%
JULY 1, 2003 TO JUNE 30, 2004 ............... 3.62% 1.81% (0.21)% 1.60%
JULY 1, 2002 TO JUNE 30, 2003 ............... 3.83% 1.76% (0.24)% 1.52%
JULY 1, 2001 TO JUNE 30, 2002 ............... 4.25% 1.77% (0.42)% 1.35%
JULY 1, 2000 TO JUNE 30, 2001 ............... 4.58% 1.77% (0.42)% 1.35%
JULY 1, 1999 TO JUNE 30, 2000 ............... 4.65% 1.89% (0.54)% 1.35%
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.56% 0.74% (0.14)% 0.60%
JULY 1, 2003 TO JUNE 30, 2004 ............... 4.62% 0.73% (0.13)% 0.60%
JULY 1, 2002 TO JUNE 30, 2003 ............... 4.76% 0.71% (0.11)% 0.60%
JULY 1, 2001 TO JUNE 30, 2002 ............... 5.01% 0.70% (0.10)% 0.60%
JULY 1, 2000 TO JUNE 30, 2001 ............... 5.38% 0.67% (0.07)% 0.60%
JULY 1, 1999 TO JUNE 30, 2000 ............... 5.42% 0.86% (0.26)% 0.60%
MINNESOTA TAX-FREE FUND
- -------------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.10% 1.06% (0.21)% 0.85%
JULY 1, 2003 TO JUNE 30, 2004 ............... 4.11% 1.04% (0.19)% 0.85%
JULY 1, 2002 TO JUNE 30, 2003 ............... 4.27% 0.98% (0.21)% 0.77%
JULY 1, 2001 TO JUNE 30, 2002 ............... 4.81% 1.03% (0.43)% 0.60%
JULY 1, 2000 TO JUNE 30, 2001 ............... 5.11% 1.10% (0.50)% 0.60%
JULY 1, 1999 TO JUNE 30, 2000 ............... 5.23% 1.07% (0.47)% 0.60%
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 3.33% 1.81% (0.21)% 1.60%
JULY 1, 2003 TO JUNE 30, 2004 ............... 3.36% 1.79% (0.19)% 1.60%
JULY 1, 2002 TO JUNE 30, 2003 ............... 3.51% 1.71% (0.19)% 1.52%
JULY 1, 2001 TO JUNE 30, 2002 ............... 4.05% 1.75% (0.40)% 1.35%
JULY 1, 2000 TO JUNE 30, 2001 ............... 4.36% 1.81% (0.46)% 1.35%
JULY 1, 1999 TO JUNE 30, 2000 ............... 4.47% 1.93% (0.58)% 1.35%
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.34% 0.73% (0.13)% 0.60%
JULY 1, 2003 TO JUNE 30, 2004 ............... 4.35% 0.71% (0.11)% 0.60%
JULY 1, 2002 TO JUNE 30, 2003 ............... 4.43% 0.65% (0.05)% 0.60%
JULY 1, 2001 TO JUNE 30, 2002 ............... 4.78% 0.65% (0.05)% 0.60%
JULY 1, 2000 TO JUNE 30, 2001 ............... 5.11% 0.73% (0.13)% 0.60%
JULY 1, 1999 TO JUNE 30, 2000 ............... 5.22% 0.91% (0.31)% 0.60%
NATIONAL LIMITED TERM TAX-FREE FUND
- -------------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 2.53% 1.12% (0.27)% 0.85%
JANUARY 30, 2004(3) TO JUNE 30, 2004 ........ 2.15% 1.05% (0.20)% 0.85%
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 1.79% 1.87% (0.27)% 1.60%
JANUARY 30, 2004(3) TO JUNE 30, 2004 ........ 1.52% 1.82% (0.22)% 1.60%
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 1.86% 1.88% (0.28)% 1.60%
JANUARY 30, 2004(3) TO JUNE 30, 2004 ........ 1.36% 1.79% (0.19)% 1.60%
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 2.77% 0.79% (0.19)% 0.60%
JULY 1, 2003 TO JUNE 30, 2004 ............... 2.60% 0.71% (0.11)% 0.60%
JULY 1, 2002 TO JUNE 30, 2003 ............... 3.29% 0.71% (0.11)% 0.60%
JULY 1, 2001 TO JUNE 30, 2002 ............... 3.98% 0.76% (0.16)% 0.60%
JULY 1, 2000 TO JUNE 30, 2001 ............... 4.39% 0.71% (0.11)% 0.60%
JULY 1, 1999 TO JUNE 30, 2000 ............... 4.53% 0.86% (0.25)% 0.61%
PORTFOLIO NET ASSETS AT
TOTAL TURNOVER END OF PERIOD
RETURN(2) RATE (000'S OMITTED)
- ----------------------------------------------------------------------------------------------
COLORADO TAX-FREE FUND (CONTINUED)
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.25% 10% $ 10,203
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.17% 31% $ 10,672
JULY 1, 2002 TO JUNE 30, 2003 ............... 7.70% 37% $ 14,368
JULY 1, 2001 TO JUNE 30, 2002 ............... 6.53% 28% $ 12,540
JULY 1, 2000 TO JUNE 30, 2001 ............... 10.69% 37% $ 10,177
JULY 1, 1999 TO JUNE 30, 2000 ............... 0.22% 106% $ 6,842
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.78% 10% $ 38,793
JULY 1, 2003 TO JUNE 30, 2004 ............... 1.18% 31% $ 41,196
JULY 1, 2002 TO JUNE 30, 2003 ............... 8.70% 37% $ 51,730
JULY 1, 2001 TO JUNE 30, 2002 ............... 7.33% 28% $ 50,630
JULY 1, 2000 TO JUNE 30, 2001 ............... 11.54% 37% $ 47,538
JULY 1, 1999 TO JUNE 30, 2000 ............... 0.97% 106% $ 44,161
MINNESOTA TAX-FREE FUND
- ----------------------------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.59% 6% $ 39,426
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.61% 12% $ 37,468
JULY 1, 2002 TO JUNE 30, 2003 ............... 8.49% 23% $ 41,485
JULY 1, 2001 TO JUNE 30, 2002 ............... 6.58% 28% $ 40,585
JULY 1, 2000 TO JUNE 30, 2001 ............... 10.32% 18% $ 34,424
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.02)% 69% $ 29,551
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.19% 6% $ 13,015
JULY 1, 2003 TO JUNE 30, 2004 ............... (0.14)% 12% $ 15,059
JULY 1, 2002 TO JUNE 30, 2003 ............... 7.68% 23% $ 22,012
JULY 1, 2001 TO JUNE 30, 2002................ 5.79% 28% $ 20,310
JULY 1, 2000 TO JUNE 30, 2001 ............... 9.50% 18% $ 19,491
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.76)% 69% $ 16,974
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.72% 6% $ 133,145
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.86% 12% $ 143,410
JULY 1, 2002 TO JUNE 30, 2003 ............... 8.67% 23% $ 185,450
JULY 1, 2001 TO JUNE 30, 2002 ............... 6.58% 28% $ 193,327
JULY 1, 2000 TO JUNE 30, 2001 ............... 10.32% 18% $ 24,860
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.02)% 69% $ 22,451
NATIONAL LIMITED TERM TAX-FREE FUND
- ----------------------------------------------------------------------------------------------
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 2.29% 8% $ 2,325
JANUARY 30, 2004(3) TO JUNE 30, 2004 ........ (1.20)% 24% $ 1,147
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 1.91% 8% $ 769
JANUARY 30, 2004(3) TO JUNE 30, 2004 ........ (1.57)% 24% $ 628
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 1.92% 8% $ 711
JANUARY 30, 2004(3) TO JUNE 30, 2004 ........ (1.69)% 24% $ 163
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 2.42% 8% $ 147,527
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.06% 24% $ 170,340
JULY 1, 2002 TO JUNE 30, 2003 ............... 6.86% 40% $ 152,835
JULY 1, 2001 TO JUNE 30, 2002 ............... 6.16% 45% $ 85,371
JULY 1, 2000 TO JUNE 30, 2001 ............... 7.89% 57% $ 62,111
JULY 1, 1999 TO JUNE 30, 2000 ............... 2.64% 48% $ 62,669
71
WELLS FARGO TAX-FREE FUNDS FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
NET REALIZED
BEGINNING NET AND DIVIDENDS
NET ASSET INVESTMENT UNREALIZED FROM NET
VALUE PER INCOME GAIN (LOSS) ON INVESTMENT
SHARE (LOSS) INVESTMENTS INCOME
- -------------------------------------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.16 0.23 0.31 (0.23)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 10.53 0.45 (0.37) (0.45)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 10.29 0.50 0.23 (0.49)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 10.21 0.52 0.08 (0.52)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 9.72 0.54 0.49 (0.54)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 10.22 0.54 (0.50) (0.53)
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.16 0.19 0.31 (0.19)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 10.53 0.38 (0.38) (0.37)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 10.29 0.42 0.23 (0.41)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 10.21 0.45 0.08 (0.45)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 9.72 0.46 0.49 (0.46)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 10.22 0.46 (0.50) (0.45)
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.16 0.19 0.30 (0.19)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 10.53 0.38 (0.38) (0.37)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 10.29 0.42 0.23 (0.41)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 10.21 0.45 0.08 (0.45)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 9.73 0.46 0.48 (0.46)
NOVEMBER 8, 1999(3) TO JUNE 30, 2000 ........ $ 9.79 0.30 (0.06) (0.30)
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.16 0.24 0.31 (0.24)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 10.53 0.47 (0.36) (0.48)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 10.30 0.52 0.22 (0.51)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 10.22 0.55 0.08 (0.55)
JULY 1, 2000 TO JUNE 30, 2001 ............... $ 9.73 0.56 0.49 (0.56)
JULY 1, 1999 TO JUNE 30, 2000 ............... $ 10.22 0.55 (0.49) (0.54)
NEBRASKA TAX-FREE FUND
- -------------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) $ 10.02 0.20 0.17 (0.20)
JULY 1, 2003 TO JUNE 30, 2004 ............... $ 10.44 0.39 (0.35) (0.39)
JULY 1, 2002 TO JUNE 30, 2003 ............... $ 10.16 0.42 0.37 (0.42)
JULY 1, 2001 TO JUNE 30, 2002 ............... $ 10.06 0.43 0.13 (0.43)
SEPTEMBER 1, 2000 TO JUNE 30, 2001(4) ....... $ 9.85 0.36 0.21 (0.36)
SEPTEMBER 1, 1999 TO AUGUST 31, 2000 ........ $ 9.76 0.42 0.09 (0.42)
SEPTEMBER 1, 1998 TO AUGUST 31, 1999 ........ $ 10.13 0.42 (0.36) (0.42)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
72
FINANCIAL HIGHLIGHTS WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
DISTRIBUTIONS ENDING
FROM NET NET ASSET
REALIZED VALUE PER
GAINS SHARE
- ----------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 0.00 $ 10.47
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.00 $ 10.16
JULY 1, 2002 TO JUNE 30, 2003 ............... 0.00 $ 10.53
JULY 1, 2001 TO JUNE 30, 2002 ............... 0.00 $ 10.29
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 10.21
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.01) $ 9.72
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 0.00 $ 10.47
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.00 $ 10.16
JULY 1, 2002 TO JUNE 30, 2003 ............... 0.00 $ 10.53
JULY 1, 2001 TO JUNE 30, 2002 ............... 0.00 $ 10.29
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 10.21
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.01) $ 9.72
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 0.00 $ 10.46
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.00 $ 10.16
JULY 1, 2002 TO JUNE 30, 2003................ 0.00 $ 10.53
JULY 1, 2001 TO JUNE 30, 2002 ............... 0.00 $ 10.29
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 10.21
NOVEMBER 8, 1999(3) TO JUNE 30, 2000......... 0.00 $ 9.73
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 0.00 $ 10.47
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.00 $ 10.16
JULY 1, 2002 TO JUNE 30, 2003 ............... 0.00 $ 10.53
JULY 1, 2001 TO JUNE 30, 2002 ............... 0.00 $ 10.30
JULY 1, 2000 TO JUNE 30, 2001 ............... 0.00 $ 10.22
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.01) $ 9.73
NEBRASKA TAX-FREE FUND
- ----------------------------------------------------------------------------
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) (0.15) $ 10.04
JULY 1, 2003 TO JUNE 30, 2004 ............... (0.07) $ 10.02
JULY 1, 2002 TO JUNE 30, 2003 ............... (0.09) $ 10.44
JULY 1, 2001 TO JUNE 30, 2002 ............... (0.03) $ 10.16
SEPTEMBER 1, 2000 TO JUNE 30, 2001(4) ....... 0.00 $ 10.06
SEPTEMBER 1, 1999 TO AUGUST 31, 2000 ........ 0.00 $ 9.85
SEPTEMBER 1, 1998 TO AUGUST 31, 1999 ........ (0.01) $ 9.76
RATIO TO AVERAGE NET ASSETS (ANNUALIZED)(1)
-------------------------------------------------------------
NET INVESTMENT GROSS EXPENSES NET
INCOME (LOSS) EXPENSES WAIVED EXPENSES
- -------------------------------------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.38% 1.04% (0.19)% 0.85%
JULY 1, 2003 TO JUNE 30, 2004 ............... 4.35% 1.03% (0.18)% 0.85%
JULY 1, 2002 TO JUNE 30, 2003 ............... 4.74% 0.95% (0.12)% 0.83%
JULY 1, 2001 TO JUNE 30, 2002 ............... 5.09% 0.93% (0.13)% 0.80%
JULY 1, 2000 TO JUNE 30, 2001 ............... 5.33% 0.96% (0.16)% 0.80%
JULY 1, 1999 TO JUNE 30, 2000 ............... 5.48% 0.95% (0.20)% 0.75%
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 3.61% 1.79% (0.19)% 1.60%
JULY 1, 2003 TO JUNE 30, 2004 ............... 3.61% 1.78% (0.18)% 1.60%
JULY 1, 2002 TO JUNE 30, 2003 ............... 3.98% 1.70% (0.12)% 1.58%
JULY 1, 2001 TO JUNE 30, 2002 ............... 4.34% 1.69% (0.14)% 1.55%
JULY 1, 2000 TO JUNE 30, 2001 ............... 4.56% 1.72% (0.17)% 1.55%
JULY 1, 1999 TO JUNE 30, 2000 ............... 4.72% 1.78% (0.30)% 1.48%
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 3.62% 1.79% (0.19)% 1.60%
JULY 1, 2003 TO JUNE 30, 2004 ............... 3.62% 1.78% (0.18)% 1.60%
JULY 1, 2002 TO JUNE 30, 2003 ............... 3.95% 1.71% (0.13)% 1.58%
JULY 1, 2001 TO JUNE 30, 2002 ............... 4.32% 1.68% (0.13)% 1.55%
JULY 1, 2000 TO JUNE 30, 2001 ............... 4.55% 1.73% (0.18)% 1.55%
NOVEMBER 8, 1999(3) TO JUNE 30, 2000 ........ 4.75% 1.68% (0.13)% 1.55%
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.62% 0.71% (0.11)% 0.60%
JULY 1, 2003 TO JUNE 30, 2004 ............... 4.60% 0.70% (0.10)% 0.60%
JULY 1, 2002 TO JUNE 30, 2003 ............... 4.97% 0.67% (0.07)% 0.60%
JULY 1, 2001 TO JUNE 30, 2002 ............... 5.30% 0.63% (0.03)% 0.60%
JULY 1, 2000 TO JUNE 30, 2001 ............... 5.53% 0.61% (0.01)% 0.60%
JULY 1, 1999 TO JUNE 30, 2000 ................ 5.58% 0.77% (0.17)% 0.60%
NEBRASKA TAX-FREE FUND
- -------------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 3.87% 0.81% (0.02)% 0.79%
JULY 1, 2003 TO JUNE 30, 2004 ............... 3.83% 0.87% (0.04)% 0.83%
JULY 1, 2002 TO JUNE 30, 2003 ............... 4.06% 0.87% (0.05)% 0.82%
JULY 1, 2001 TO JUNE 30, 2002 ............... 4.27% 0.89% (0.06)% 0.83%
SEPTEMBER 1, 2000 TO JUNE 30, 2001(4) ....... 4.40% 0.91% (0.09)% 0.82%
SEPTEMBER 1, 1999 TO AUGUST 31, 2000 ........ 4.38% 0.88% 0.00% 0.88%
SEPTEMBER 1, 1998 TO AUGUST 31, 1999 ........ 4.17% 0.84% (0.01)% 0.83%
PORTFOLIO NET ASSETS AT
TOTAL TURNOVER END OF PERIOD
RETURN(2) RATE (000'S OMITTED)
- ----------------------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
CLASS A
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 5.31% 30% $ 99,670
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.76% 63% $ 103,469
JULY 1, 2002 TO JUNE 30, 2003 ............... 7.20% 37% $ 113,616
JULY 1, 2001 TO JUNE 30, 2002 ............... 5.92% 39% $ 120,439
JULY 1, 2000 TO JUNE 30, 2001 ............... 10.90% 27% $ 77,273
JULY 1, 1999 TO JUNE 30, 2000 ............... 0.50% 79% $ 64,859
CLASS B
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.91% 30% $ 28,273
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.01% 63% $ 31,420
JULY 1, 2002 TO JUNE 30, 2003 ............... 6.40% 37% $ 48,540
JULY 1, 2001 TO JUNE 30, 2002 ............... 5.13% 39% $ 51,754
JULY 1, 2000 TO JUNE 30, 2001 ............... 10.07% 27% $ 28,271
JULY 1, 1999 TO JUNE 30, 2000 ............... (0.24)% 79% $ 18,367
CLASS C
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 4.81% 30% $ 8,988
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.02% 63% $ 9,829
JULY 1, 2002 TO JUNE 30, 2003 ............... 6.40% 37% $ 15,161
JULY 1, 2001 TO JUNE 30, 2002 ............... 5.13% 39% $ 11,343
JULY 1, 2000 TO JUNE 30, 2001 ............... 9.96% 27% $ 9,319
NOVEMBER 8, 1999(3) TO JUNE 30, 2000 ........ 2.50% 79% $ 5,572
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 5.44% 30% $ 181,078
JULY 1, 2003 TO JUNE 30, 2004 ............... 1.01% 63% $ 183,520
JULY 1, 2002 TO JUNE 30, 2003 ............... 7.34% 37% $ 260,989
JULY 1, 2001 TO JUNE 30, 2002 ............... 6.24% 39% $ 294,132
JULY 1, 2000 TO JUNE 30, 2001 ............... 11.01% 27% $ 300,187
JULY 1, 1999 TO JUNE 30, 2000 ............... 0.73% 79% $ 244,626
NEBRASKA TAX-FREE FUND
- ----------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
JULY 1, 2004 TO DECEMBER 31, 2004 (UNAUDITED) 3.66% 8% $ 43,830
JULY 1, 2003 TO JUNE 30, 2004 ............... 0.35% 9% $ 46,253
JULY 1, 2002 TO JUNE 30, 2003 ............... 7.91% 19% $ 64,760
JULY 1, 2001 TO JUNE 30, 2002 ............... 5.67% 31% $ 66,453
SEPTEMBER 1, 2000 TO JUNE 30, 2001(4) ....... 5.97% 45% $ 64,929
SEPTEMBER 1, 1999 TO AUGUST 31, 2000 ........ 5.43% 30% $ 63,305
SEPTEMBER 1, 1998 TO AUGUST 31, 1999 ........ 0.54% 7% $ 68,443
73
WELLS FARGO TAX-FREE 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 sales charges, and would have
been lower had certain expenses not been waived or reimbursed during the
periods shown. Returns for periods of less than one year are not
annualized.
(3) Commencement of operations.
(4) The Fund changed its fiscal year-end from August 31 to June 30.
74
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
1. ORGANIZATION
- --------------------------------------------------------------------------------
Wells Fargo Funds 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 commenced operations on November 8,
1999, and is currently comprised of 74 separate series (each, a "Fund",
collectively, the "Funds"). These financial statements present the California
Limited Term Tax-Free Fund, California Tax-Free Fund, Colorado Tax-Free Fund,
Minnesota Tax-Free Fund, National Limited Term Tax-Free Fund, National Tax-Free
Fund, and Nebraska Tax-Free Fund.
Each Fund, except the National Limited Term Tax-Free Fund and National
Tax-Free Fund, is a non-diversified series of the Trust. The National Limited
Term Tax-Free Fund and National Tax-Free Fund are diversified series of the
Trust.
The separate classes of shares offered by each Fund differ principally in
applicable sales charges, distribution, shareholder servicing and administration
fees. Shareholders of each class bear certain expenses that pertain to that
particular class. All shareholders bear the common expenses of a Fund, earn
income from the portfolio and are allocated unrealized gains and losses pro rata
based on the average daily net assets of each class, without distinction between
share classes. Dividends are determined separately for each class based on
income and expenses allocable to each class. Realized gains and losses are
allocated to each class pro rata based upon the net assets of each class on the
date realized. Differences in per share dividend rates generally result from the
relative weightings of pro rata income and realized gain allocations and from
differences in separate class expenses, including distribution, shareholding
servicing and administration fees.
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.
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.
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.
Debt obligations may be placed on non-accrual status and related
investment income may be reduced by ceasing current accruals and writing off
interest receivables when the collection of all or a portion of income has
become doubtful based on consistently applied procedures. A debt obligation is
removed from non-accrual status when the issuer resumes interest payments or
when collectibility of interest is reasonably assured.
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, if any, is declared and distributed to shareholders
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
75
WELLS FARGO TAX-FREE FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
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.
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.
At June 30, 2004, estimated net capital loss carryforwards, which are
available to offset future net realized capital gains, were:
Year Capital Loss
Fund Expires Carryforwards
- --------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND 2012 $ 34,498
- --------------------------------------------------------------------------------
COLORADO TAX-FREE FUND 2008 224,971
2009 410,897
2012 232,615
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND 2009 573,192
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND 2008 10,177,442
2008 102,780
2009 157,637
2012 267,373
At June 30, 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
- --------------------------------------------------------------------------------
COLORADO TAX-FREE FUND $ 188,162
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND 2,135,160
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
76
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM $ 0- $ 499 million 0.400 Wells Capital $ 0 - $400 million 0.150
TAX-FREE FUND $500 million- $ 999 million 0.350 Management $400 - $800 million 0.125
$ 1 billion - $2.99 billion 0.300 Incorporated >$800 million 0.100
$ 3 billion - $4.99 billion 0.275
> $4.99 billion 0.250
- -------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND $ 0- $ 499 million 0.400 Wells Capital $ 0 - $400 million 0.150
$500 million- $ 999 million 0.350 Management $400 - $800 million 0.125
$ 1 billion - $2.99 billion 0.300 Incorporated >$800 million 0.100
$ 3 billion - $4.99 billion 0.275
> $4.99 billion 0.250
- -------------------------------------------------------------------------------------------------------------------------------
COLORADO TAX-FREE FUND $ 0- $ 499 million 0.400 Wells Capital $ 0 - $400 million 0.150
$500 million- $ 999 million 0.350 Management $400 - $800 million 0.125
$ 1 billion - $2.99 billion 0.300 Incorporated > $800 million 0.100
$ 3 billion - $4.99 billion 0.275
> $4.99 billion 0.250
- -------------------------------------------------------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND $ 0- $ 499 million 0.400 Wells Capital $ 0 - $400 million 0.150
$500 million- $ 999 million 0.350 Management $400 - $800 million 0.125
$ 1 billion - $2.99 billion 0.300 Incorporated >$800 million 0.100
$ 3 billion - $4.99 billion 0.275
> $4.99 billion 0.250
- -------------------------------------------------------------------------------------------------------------------------------
NATIONAL LIMITED TERM $ 0- $ 499 million 0.400 Wells Capital $ 0 - $400 million 0.150
TAX-FREE FUND $500 million- $ 999 million 0.350 Management $400 - $800 million 0.125
$ 1 billion - $2.99 billion 0.300 Incorporated >$800 million 0.100
$ 3 billion - $4.99 billion 0.275
> $4.99 billion 0.250
- -------------------------------------------------------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND $ 0- $ 499 million 0.400 Wells Capital $ 0 - $400 million 0.150
$500 million- $ 999 million 0.350 Management $400 - $800 million 0.125
$ 1 billion - $2.99 billion 0.300 Incorporated >$800 million 0.100
$ 3 billion - $4.99 billion 0.275
> $4.99 billion 0.250
- -------------------------------------------------------------------------------------------------------------------------------
NEBRASKA TAX-FREE FUND $ 0- $ 499 million 0.400 Wells Capital $ 0 - $400 million 0.150
$500 million- $ 999 million 0.350 Management $400 - $800 million 0.125
$ 1 billion - $2.99 billion 0.300 Incorporated >$800 million 0.100
$ 3 billion - $4.99 billion 0.275
> $4.99 billion 0.250
- -------------------------------------------------------------------------------------------------------------------------------
77
WELLS FARGO TAX-FREE FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
* Effective August 2, 2004. Prior to August 2, 2004, Funds Management was
entitled to be paid a monthly advisory fee at the following annual rates:
Advisory Fee
(% of Average
Fund Daily Net Assets)
- --------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND 0.40
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND 0.40
- --------------------------------------------------------------------------------
COLORADO TAX-FREE FUND 0.40
- --------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND 0.40
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND 0.40
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND 0.40
- --------------------------------------------------------------------------------
NEBRASKA TAX-FREE FUND 0.50
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
FUND LEVEL $0 - $4.99 billion 0.05
$5 - $9.99 billion 0.04
> $9.99 billion 0.03
- --------------------------------------------------------------------------------
CLASS A, CLASS B, CLASS C 0.28
- --------------------------------------------------------------------------------
INSTITUTIONAL CLASS 0.20
- --------------------------------------------------------------------------------
** Effective August 2, 2004. Prior to August 2, 2004, Funds Management was
entitled to be paid a fund level administration fee of 0.05% of average daily
net assets.
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 0.02
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICING FEES
The Trust has entered into contracts with one or more shareholder
servicing agents, whereby each Fund is charged the following annual fees:
% of Average
Share Class Daily Net Assets
- --------------------------------------------------------------------------------
CLASS A, CLASS B, CLASS C 0.25
- --------------------------------------------------------------------------------
INSTITUTIONAL CLASS 0.00
78
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
For the six months ended December 31, 2004, shareholder servicing fees
paid were as follows:
Fund Class A Class B Class C
- --------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND $ 78,450 N/A $15,065
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND 467,756 108,346 42,434
- --------------------------------------------------------------------------------
COLORADO TAX-FREE FUND 68,513 13,369 N/A
- --------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND 49,094 17,880 N/A
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND 2,301 894 567
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND 131,265 38,552 12,024
- --------------------------------------------------------------------------------
NEBRASKA TAX-FREE FUND N/A N/A N/A
- --------------------------------------------------------------------------------
DISTRIBUTION FEES
The Trust has adopted a Distribution Plan (the "Plan") for Class B and
Class C shares of the applicable Funds pursuant to Rule 12b-1 under the 1940
Act. Distribution fees are charged to the Class B and Class C shares and paid to
Stephens Inc. ("Stephens") at an annual rate of 0.75% of average daily net
assets.
For the six months ended December 31, 2004, distribution fees paid are
disclosed in 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 in the Statement
of Operations, for the six months 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 Expense Limitations(%)
Fund Class A Class B Class C Institutional
- ------------------------------------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND 0.85 N/A 1.60 0.60
- ------------------------------------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND 0.80 1.55 1.55 0.55
- ------------------------------------------------------------------------------------------------------------
COLORADO TAX-FREE FUND 0.85 1.60 N/A 0.60
- ------------------------------------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND 0.85 1.60 N/A 0.60
- ------------------------------------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND 0.85 1.60 1.60 0.60
- ------------------------------------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND 0.85 1.60 1.60 0.60
- ------------------------------------------------------------------------------------------------------------
NEBRASKA TAX-FREE FUND *** N/A N/A N/A 0.75
- ------------------------------------------------------------------------------------------------------------
*** Prior to 11/1/2004, the expense limitation for Nebraska Tax-Free Fund was
0.83%.
79
WELLS FARGO TAX-FREE FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
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 six
months ended December 31, 2004, were as follows:
Fund Purchases at Cost Sales Proceeds
- --------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND $42,564,841 $ 45,653,243
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND 71,772,726 97,973,135
- --------------------------------------------------------------------------------
COLORADO TAX-FREE FUND 10,794,636 17,101,625
- --------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND 11,012,262 27,528,696
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND 13,312,842 43,500,923
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND 95,785,414 122,317,231
- --------------------------------------------------------------------------------
NEBRASKA TAX-FREE FUND 3,451,808 6,380,990
- --------------------------------------------------------------------------------
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 six months ended December 31, 2004,
there were no borrowings under the agreement.
6. 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.
80
OTHER INFORMATION (UNAUDITED) WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
PROXY VOTING INFORMATION
A description of the policies and procedures that the Fund(s) uses to
determine how to vote proxies relating to portfolio securities 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 the 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 Funds 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 Variable 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, None
since 1987 President of Richard
71 M. Leach Associates
(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.
- --------------------------------------------------------------------------------------------------------------
81
WELLS FARGO TAX-FREE FUNDS OTHER INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------
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 March 2001 to March
2003. Vice President of Wells
Fargo Bank, N.A. from
December 1997 to May 2000.
- --------------------------------------------------------------------------------------------------------------
Stacie D. DeAngelo Treasurer, since 2003 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.
82
LIST OF ABBREVIATIONS WELLS FARGO TAX-FREE FUNDS
- --------------------------------------------------------------------------------
The following is a list of common abbreviations for terms and entities which may
have appeared in this report.
ABAG -- Association of Bay Area Governments
ADR -- American Depository Receipts
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Alternative Minimum Tax
ARM -- Adjustable Rate Mortgages
BART -- Bay Area Rapid Transit
CDA -- Community Development Authority
CDSC -- Contingent Deferred Sales Charge
CGIC -- Capital Guaranty Insurance Company
CGY -- Capital Guaranty Corporation
CMT -- Constant Maturity Treasury
COFI -- Cost of Funds Index
Connie Lee -- Connie Lee Insurance Company
COP -- Certificate of Participation
CP -- Commercial Paper
CTF -- Common Trust Fund
DW&P -- Department of Water & Power
DWR -- Department of Water Resources
EDFA -- Education Finance Authority
FGIC -- Financial Guaranty Insurance Corporation
FHA -- Federal Housing Authority
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FRN -- Floating Rate Notes
FSA -- Financial Security Assurance, Inc
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
HFFA -- Health Facilities Financing Authority
IDA -- Industrial Development Authority
LIBOR -- London Interbank Offered Rate
LLC -- Limited Liability Corporation
LOC -- Letter of Credit
LP -- Limited Partnership
MBIA -- Municipal Bond Insurance Association
MFHR -- Multi-Family Housing Revenue
MUD -- Municipal Utility District
MTN -- Medium Term Note
PCFA -- Pollution Control Finance Authority
PCR -- Pollution Control Revenue
PFA -- Public Finance Authority
PLC -- Private Placement
PSFG -- Public School Fund Guaranty
RAW -- Revenue Anticipation Warrants
RDA -- Redevelopment Authority
RDFA -- Redevelopment Finance Authority
R&D -- Research & Development
SFMR -- Single Family Mortgage Revenue
STEERS -- Structured Enhanced Return Trust
TBA -- To Be Announced
TRAN -- Tax Revenue Anticipation Notes
USD -- Unified School District
V/R -- Variable Rate
WEBS -- World Equity Benchmark Shares
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MORE INFORMATION ABOUT WELLS FARGO THIS REPORT AND THE FINANCIAL
FUNDS(R) IS AVAILABLE FREE UPON STATEMENTS CONTAINED HEREIN ARE
REQUEST. TO OBTAIN LITERATURE, PLEASE SUBMITTED FOR THE GENERAL INFORMATION
WRITE OR CALL: OF THE SHAREHOLDERS OF THE WELLS FARGO
FUNDS. IF THIS REPORT IS USED FOR
PROMOTIONAL PURPOSES, DISTRIBUTION OF
WELLS FARGO FUNDS THE REPORT MUST BE ACCOMPANIED OR
PO BOX 8266 PRECEDED BY A CURRENT PROSPECTUS. FOR
BOSTON, MA 02266-8266 A PROSPECTUS CONTAINING MORE COMPLETE
INFORMATION, INCLUDING CHARGES AND
WELLS FARGO FUNDS INVESTOR SERVICES: EXPENSES, CALL 1-800-222-8222. PLEASE
1-800-222-8222 OR VISIT OUR WEB SITE CONSIDER THE INVESTMENT OBJECTIVES,
AT WWW.WELLSFARGOFUNDS.COM. 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.
SAR 015 (02/05)
ITEM 2. CODE OF ETHICS
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable.
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 Funds
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) Not applicable.
(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, this report has been signed by the following
persons on behalf of the registrant.
Wells Fargo Funds Trust
By: /s/Karla M. Rabusch
Karla M. Rabusch
President
By: /s/Stacie D. DeAngelo
Stacie D. DeAngelo
Treasurer
Date: February 15, 2005