UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-09255 Wells Fargo Variable Trust (Exact name of registrant as specified in charter) 525 Market St., San Francisco, CA 94105 (Address of principal executive offices) (Zip code) C. David Messman Wells Fargo Funds Management, LLC 525 Market St., San Francisco, CA 94105 (Name and address of agent for service) Registrant's telephone number, including area code: 800-643-9691 Date of fiscal year end: December 31, 2006 Date of reporting period: December 31, 2006 ITEM 1. REPORT TO SHAREHOLDERS =============================== [LOGO] WELLS ADVANTAGE FARGO FUNDS - -------------------------------------------------------------------------------- DECEMBER 31, 2006 - -------------------------------------------------------------------------------- [GRAPHIC OMITTED] Annual Report - -------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS Wells Fargo Advantage VT Asset Allocation Fund Wells Fargo Advantage VT C&B Large Cap Value Fund Wells Fargo Advantage VT Discovery Fund(SM) Wells Fargo Advantage VT Equity Income Fund Wells Fargo Advantage VT International Core Fund Wells Fargo Advantage VT Large Company Core Fund Wells Fargo Advantage VT Large Company Growth Fund Wells Fargo Advantage VT Money Market Fund Wells Fargo Advantage VT Opportunity Fund(SM) Wells Fargo Advantage VT Small Cap Growth Fund Wells Fargo Advantage VT Small/Mid Cap Value Fund Wells Fargo Advantage VT Total Return Bond Fund WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- Table of Contents Letter to Contractholders ................................................ 1 - -------------------------------------------------------------------------------- Performance Highlights - -------------------------------------------------------------------------------- Wells Fargo Advantage VT Asset Allocation Fund ........................ 2 Wells Fargo Advantage VT C&B Large Cap Value Fund ..................... 4 Wells Fargo Advantage VT Discovery Fund ............................... 6 Wells Fargo Advantage VT Equity Income Fund ........................... 8 Wells Fargo Advantage VT International Core Fund ...................... 10 Wells Fargo Advantage VT Large Company Core Fund ...................... 12 Wells Fargo Advantage VT Large Company Growth Fund .................... 14 Wells Fargo Advantage VT Money Market Fund ............................ 16 Wells Fargo Advantage VT Opportunity Fund ............................. 18 Wells Fargo Advantage VT Small Cap Growth Fund ........................ 20 Wells Fargo Advantage VT Small/Mid Cap Value Fund ..................... 22 Wells Fargo Advantage VT Total Return Bond Fund ....................... 24 Fund Expenses (Unaudited) ................................................ 26 - -------------------------------------------------------------------------------- Portfolio of Investments - -------------------------------------------------------------------------------- Wells Fargo Advantage VT Asset Allocation Fund ........................ 28 Wells Fargo Advantage VT C&B Large Cap Value Fund ..................... 46 Wells Fargo Advantage VT Discovery Fund ............................... 51 Wells Fargo Advantage VT Equity Income Fund ........................... 57 Wells Fargo Advantage VT International Core Fund ...................... 62 Wells Fargo Advantage VT Large Company Core Fund ...................... 66 Wells Fargo Advantage VT Large Company Growth Fund .................... 70 Wells Fargo Advantage VT Money Market Fund ............................ 74 Wells Fargo Advantage VT Opportunity Fund ............................. 77 Wells Fargo Advantage VT Small Cap Growth Fund ........................ 83 Wells Fargo Advantage VT Small/Mid Cap Value Fund ..................... 89 Wells Fargo Advantage VT Total Return Bond Fund ....................... 94 Financial Statements - -------------------------------------------------------------------------------- Statements of Assets and Liabilities .................................. 110 Statements of Operations .............................................. 114 Statements of Changes in Net Assets ................................... 118 Financial Highlights .................................................. 124 Notes to Financial Highlights ......................................... 128 Notes to Financial Statements ............................................ 129 - -------------------------------------------------------------------------------- Report of Independent Registered Public Accounting Firm .................. 141 - -------------------------------------------------------------------------------- Other Information (Unaudited) ............................................ 142 - -------------------------------------------------------------------------------- List of Abbreviations .................................................... 146 - -------------------------------------------------------------------------------- ------------------------------------------------- NOT FDIC INSURED-NO BANK GUARANTEE-MAY LOSE VALUE ------------------------------------------------- THIS PAGE IS INTENTIONALLY LEFT BLANK -- LETTER TO CONTRACTHOLDERS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- DEAR VALUED CONTRACTHOLDER, In this annual report for the WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS, which covers the 12-month period that ended December 31, 2006, you will find a discussion of each Fund, performance highlights, information about the holdings in each Fund, and the portfolio managers' strategic outlook. THE ECONOMY IN 2006 - -------------------------------------------------------------------------------- The U.S. economy performed well during the 12-month period that ended December 31, 2006. Growth in real Gross Domestic Product averaged close to 3%, the unemployment rate remained in the mid 4% range, and inflation was relatively low for most of the period. This was solid performance for a period in which oil prices fluctuated, geopolitical tensions remained intense, and the housing market continued to struggle. Since June 29, 2006, the Fed has left the Federal funds rate unchanged at 5.25%, which helped to keep mortgage lending rates at historical lows. Household spending was sustained by healthy labor markets, solid growth in household incomes, and gains in net worth stemming from the strength in stock prices. Business spending strengthened in response to a steady outlook for sales and profits. STOCKS REPORTED A STRONG YEAR - -------------------------------------------------------------------------------- Both domestic and international stocks performed very well during the 12-month period. Small cap domestic stocks continued to outperform large cap stocks. While energy was the worst performing sector in December 2006, it was up more than 20% for the year. Financials and telecommunications were top performing sectors as well, with Real Estate Investment Trusts (REITs) identified as the top contributor to financials. In the global equity markets, inflation fears continued to wane as investor confidence increased. Europe's economy remained strong, while Japan's market grew at a moderate pace. The rest of Asia continued to outpace Japan. Many of the Asian countries, including China, recorded double-digit growth. With interest rates still exceptionally low in such markets as Japan, speculators can easily borrow money and then invest it in the higher-yielding markets. This high liquidity has kept upward pressure on asset prices around the world and has contributed to keeping equity and bond prices strong in the United States as well. BONDS CONTINUED TO IMPROVE - -------------------------------------------------------------------------------- Bond markets continued to improve during the period in response to the Fed's decision to leave the Federal funds rate unchanged since June 29, 2006. Total returns were positive for both the taxable and non-taxable bond markets. The municipal market performed somewhat better than the Treasury market, largely because the municipal market yield curve retained a positive slope throughout the period. Among the taxable bond sectors, high-yield bonds were the top performers for the fourth consecutive year. The lowest quality of the high-yield bonds performed best overall during the period. Mortgage-backed securities and asset-backed securities were almost tied for the best performing sectors in the investment-grade universe for the period. LOOKING AHEAD - -------------------------------------------------------------------------------- The business cycle for stocks and the credit cycle for bonds are both in an advanced stage as we begin 2007, but that does not mean that either must turn downward in the year ahead. While the economy has been weakened by inventory corrections in the housing and automobile industries, we see positive signs in good job markets, solid income growth, and historically low mortgage interest rates. Nevertheless, even with the most optimistic outlook, it is important to maintain a portfolio that is diversified with asset allocations that meet your individual needs, goals, and tolerance for risk. While diversification and asset allocation may not prevent losses in a downturn, they may help reduce them. To that end, we offer Funds across most major asset classes that are guided by skillful money managers, our subadvisers, who are chosen for their focused attention on a particular investment style. We believe that our insistence on seeking dedicated money managers who share our commitment for pursuing consistent, long-term results offers our investors the firm footing they need to withstand changing market conditions and adjustments in their own financial requirements. Thank you for choosing WELLS FARGO ADVANTAGE FUNDS(SM). We appreciate your confidence in us. Through each market cycle, we are committed to being part of your financial plan. If you have any questions about your investment, please contact your investment professional, or call us at 1-800-222-8222. You may also want to visit our Web site at WWW.WELLSFARGO.COM/ADVANTAGEFUNDS. Sincerely, /s/ Karla M. Rabusch Karla M. Rabusch President WELLS FARGO ADVANTAGE FUNDS 1 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (the Fund) seeks long-term total return, consistent with reasonable risk. ADVISER SUBADVISER Wells Fargo Funds Management, LLC Wells Capital Management Incorporated FUND MANAGERS FUND INCEPTION DATE Galen G. Blomster, CFA 04/15/1994 Gregory T. Genung, CFA Jeffrey P. Mellas HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD? - -------------------------------------------------------------------------------- The Fund returned 12.14% 1 for the 12-month period that ended December 31, 2006, outperforming its benchmark, the Asset Allocation Composite Index 2, which returned 9.73%. In addition, the Fund underperformed the S&P 500 Index 3, which returned 15.78% and it outperformed the Lehman Brothers 20+ Year U.S. Treasury Index 4, which returned 0.93% during the same period. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. IF THEY DID, RETURNS WOULD BE LOWER. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE? - -------------------------------------------------------------------------------- The Fund's emphasis on stocks, which significantly outperformed long-term U.S. Treasury bonds during the 12-month period, enabled the Fund to outperform its benchmark. The first quarter of 2006 reported a strong Gross Domestic Product (GDP) growth rate of 5.6%. The GDP growth rate for the 12-month period averaged around 3.0%. Weakness in the housing and auto sectors offset healthy spending by consumers in other segments of the economy. Continued robust profit growth combined with attractive valuations and the Fed's decision in August 2006 to stop raising the Federal funds rate produced a surge of double-digit equity returns during the third and fourth quarters of 2006. Bond yields experienced volatility throughout 2006, with the 10-year Treasury yield beginning the 12-month period near 4.4% then rising to over 5% before again declining below 4.5% and then finishing the period at 4.7%. Bond investors were faced with conflicting messages after the Fed stopped raising interest rates in August after 17 consecutive increases. Benign inflation figures toward the end of the period were offset by strong employment data and what appeared to be stabilization of the housing market. Exposure to long-term U.S. Treasury bonds hampered overall performance, but it was offset by the 25% Tactical Asset Allocation (TAA) shift toward stocks throughout the 12-month period. WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD? - -------------------------------------------------------------------------------- The stock holdings in the Fund are indexed to the S&P 500 Index, and the bond holdings are indexed to the Lehman Brothers 20+ Year U.S. Treasury Bond Index. The TAA Model, which seeks to enhance portfolio returns by shifting assets between stocks and bonds, maintained a 25% shift toward stocks throughout the 12-month period. In implementing the shift toward stocks, the Fund employed a futures overlay transaction, thus keeping the portfolio's underlying assets near their long-term strategic allocation of 60% stocks and 40% bonds. With the shift toward stocks, the portfolio maintained a long position in the S&P 500 Index futures and a short position in the long-term U.S. Treasury bond futures. Throughout the 12-month period, the Fund was at a maximum equity overweighting, with an effective target allocation of 85% stocks and 15% bonds. LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK? - -------------------------------------------------------------------------------- With the S&P 500 Index significantly outperforming long-term U.S. Treasury bonds, the 25% TAA shift toward stocks improved performance of the Fund during the 12-month period. While stocks have outperformed the broad bond market, the TAA Model indicates that stocks remain attractive relative to bonds. As a result, the Fund will keep its overweighted position in stocks until the relative valuation between stocks and bonds returns to a more normal level. BALANCED FUNDS MAY INVEST IN STOCKS AND BONDS. STOCKS SHOULD ONLY BE CONSIDERED FOR LONG-TERM GOALS AS VALUES FLUCTUATE IN RESPONSE TO THE ACTIVITIES OF INDIVIDUAL COMPANIES AND GENERAL MARKET AND ECONOMIC CONDITIONS. BOND VALUES FLUCTUATE IN RESPONSE TO THE FINANCIAL CONDITION OF INDIVIDUAL ISSUERS, CHANGES IN INTEREST RATES, AND GENERAL MARKET AND ECONOMIC CONDITIONS. CONSULT THE FUND'S PROSPECTUS FOR ADDITIONAL INFORMATION ON THESE AND OTHER RISKS. - -------------------------------------------------------------------------------- PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. The views expressed are as of December 31, 2006, 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 ADVANTAGE VT ASSET ALLOCATION FUND. 1 The Fund's adviser has committed through April 30, 2007, to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's return would have been lower. Prior to May 1, 2006, the WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND was named the Wells Fargo Advantage Asset Allocation Fund and prior to April 11, 2005, was named the Wells Fargo Asset Allocation Fund. Performance for the Fund prior to September 20, 1999, reflects performance of the Life and Annuity Trust Asset Allocation Fund, its predecessor fund. 2 PERFORMANCE HIGHLIGHTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- 6-Months* 1-Year 5-Year 10-Year - ---------------------------------------------------------------------------------------------------------- VT Asset Allocation Fund (Incept. Date 04/15/1994) 11.46 12.14 6.50 7.86 - ---------------------------------------------------------------------------------------------------------- Benchmarks - ---------------------------------------------------------------------------------------------------------- Asset Allocation Composite Index 2 10.78 9.73 7.08 8.70 - ---------------------------------------------------------------------------------------------------------- S&P 500 Index 3 12.73 15.78 6.19 8.42 - ---------------------------------------------------------------------------------------------------------- Lehman Brothers 20+ Year U.S. Treasury Index 4 7.83 0.93 7.30 7.89 - ---------------------------------------------------------------------------------------------------------- * RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. FUND CHARACTERISTICS 5 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- Beta** 0.98 - -------------------------------------------------------------------------------- Weighted Average Coupon of Bond Portfolio 5.61% - -------------------------------------------------------------------------------- Weighted Average Maturity of Bond Portfolio 23.22 years - -------------------------------------------------------------------------------- Modified Duration of Bond Portfolio 13.18 years - -------------------------------------------------------------------------------- Portfolio Turnover 12% - -------------------------------------------------------------------------------- Net Asset Value (NAV) $14.13 ** A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE ASSET ALLOCATION COMPOSITE INDEX BETA IS 1.00 BY DEFINITION. SECTOR DISTRIBUTION 5 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Consumer Discretionary (11%) Consumer Staples (9%) Energy (10%) Financials (22%) Health Care (12%) Industrials (11%) Information Technology (15%) Materials (3%) Telecommunications Services (3%) Utilities (4%) TEN LARGEST PORTFOLIO HOLDINGS 5,6 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- U.S. Treasury Bond, 6.13%, 11/15/2027 6.57% - -------------------------------------------------------------------------------- U.S. Treasury Bond, 6.25%, 5/15/2030 5.35% - -------------------------------------------------------------------------------- U.S. Treasury Bond, 5.38%, 2/15/2031 4.93% - -------------------------------------------------------------------------------- U.S. Treasury Bond, 6.13%, 8/15/2029 3.41% - -------------------------------------------------------------------------------- U.S. Treasury Bond, 5.50%, 8/15/2028 3.32% - -------------------------------------------------------------------------------- U.S. Treasury Bond, 5.25%, 2/15/2029 3.11% - -------------------------------------------------------------------------------- U.S. Treasury Bond, 6.63%, 2/15/2027 3.01% - -------------------------------------------------------------------------------- U.S. Treasury Bond, 5.25%, 11/15/2028 2.97% - -------------------------------------------------------------------------------- U.S. Treasury Bond, 6.38%, 8/15/2027 2.76% - -------------------------------------------------------------------------------- Exxon Mobil Corporation 2.21% GROWTH OF $10,000 INVESTMENT 7 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] WELLS FARGO Lehman Brothers ADVANTAGE 20+ Year VT ASSET Asset Allocation Treasury ALLOCATION FUND Composite Index S&P 500 Index Index 12/31/1996 $10,000 $10,000 $10,000 $10,000 1/31/1997 $10,193 $10,339 $10,624 $ 9,910 2/28/1997 $10,219 $10,388 $10,708 $ 9,912 3/31/1997 $ 9,855 $10,018 $10,269 $ 9,640 4/30/1997 $10,254 $10,479 $10,881 $ 9,885 5/31/1997 $10,600 $10,910 $11,543 $10,000 6/30/1997 $10,884 $11,294 $12,060 $10,209 7/31/1997 $11,629 $12,123 $13,019 $10,863 8/31/1997 $11,154 $11,566 $12,290 $10,528 9/30/1997 $11,574 $12,083 $12,963 $10,840 10/31/1997 $11,592 $12,019 $12,531 $11,239 11/30/1997 $11,856 $12,428 $13,110 $11,415 12/31/1997 $12,088 $12,644 $13,335 $11,618 1/31/1998 $12,269 $12,834 $13,482 $11,861 2/28/1998 $12,814 $13,348 $14,454 $11,767 3/31/1998 $13,275 $13,769 $15,194 $11,790 4/30/1998 $13,387 $13,870 $15,347 $11,830 5/31/1998 $13,316 $13,845 $15,083 $12,080 6/30/1998 $13,812 $14,328 $15,695 $12,398 7/31/1998 $13,678 $14,204 $15,529 $12,328 8/31/1998 $12,374 $13,251 $13,286 $12,930 9/30/1998 $13,069 $13,955 $14,137 $13,407 10/31/1998 $13,822 $14,541 $15,286 $13,179 11/30/1998 $14,492 $15,123 $16,212 $13,300 12/31/1998 $15,141 $15,632 $17,146 $13,269 1/31/1999 $15,659 $16,083 $17,862 $13,396 2/28/1999 $15,096 $15,439 $17,307 $12,680 3/31/1999 $15,527 $15,783 $18,000 $12,624 4/30/1999 $15,967 $16,155 $18,697 $12,634 5/31/1999 $15,628 $15,823 $18,256 $12,433 6/30/1999 $16,064 $16,272 $19,268 $12,281 7/31/1999 $15,713 $15,931 $18,667 $12,211 8/31/1999 $15,633 $15,853 $18,575 $12,154 9/30/1999 $15,407 $15,639 $18,066 $12,242 10/31/1999 $15,955 $16,233 $19,209 $12,243 11/30/1999 $16,092 $16,382 $19,600 $12,150 12/31/1999 $16,553 $16,844 $20,753 $11,935 1/31/2000 $16,209 $16,454 $19,711 $12,143 2/29/2000 $16,324 $16,501 $19,338 $12,574 3/31/2000 $17,500 $17,716 $21,228 $13,044 4/30/2000 $17,119 $17,326 $20,590 $12,915 5/31/2000 $16,830 $17,078 $20,169 $12,850 6/30/2000 $17,222 $17,479 $20,666 $13,129 7/31/2000 $17,152 $17,454 $20,343 $13,389 8/31/2000 $17,949 $18,274 $21,606 $13,715 9/30/2000 $17,246 $17,570 $20,466 $13,481 10/31/2000 $17,295 $17,643 $20,379 $13,706 11/30/2000 $16,560 $17,048 $18,773 $14,171 12/31/2000 $16,722 $17,257 $18,865 $14,502 1/31/2001 $17,145 $17,624 $19,534 $14,501 2/28/2001 $16,020 $16,784 $17,754 $14,756 3/31/2001 $15,243 $16,093 $16,630 $14,638 4/30/2001 $15,972 $16,641 $17,922 $14,178 5/31/2001 $16,082 $16,719 $18,042 $14,202 6/30/2001 $15,852 $16,544 $17,603 $14,349 7/31/2001 $15,925 $16,707 $17,429 $14,915 8/31/2001 $15,369 $16,241 $16,339 $15,273 9/30/2001 $14,604 $15,469 $15,020 $15,309 10/31/2001 $15,045 $16,014 $15,307 $16,219 11/30/2001 $15,561 $16,412 $16,481 $15,360 12/31/2001 $15,559 $16,356 $16,625 $15,028 1/31/2002 $15,445 $16,305 $16,383 $15,238 2/28/2002 $15,268 $16,188 $16,067 $15,406 3/31/2002 $15,461 $16,254 $16,671 $14,694 4/30/2002 $15,054 $15,930 $15,661 $15,297 5/31/2002 $14,991 $15,860 $15,546 $15,298 6/30/2002 $14,483 $15,295 $14,439 $15,569 7/31/2002 $13,736 $14,773 $13,313 $16,063 8/31/2002 $13,891 $15,140 $13,401 $16,901 9/30/2002 $12,712 $14,422 $11,946 $17,650 10/31/2002 $13,555 $14,968 $12,996 $16,991 11/30/2002 $14,203 $15,447 $13,760 $16,854 12/31/2002 $13,560 $15,170 $12,952 $17,584 1/31/2003 $13,260 $14,913 $12,614 $17,529 2/28/2003 $13,117 $14,968 $12,424 $18,083 3/31/2003 $13,200 $14,954 $12,543 $17,781 4/30/2003 $14,116 $15,770 $13,577 $18,009 5/31/2003 $14,822 $16,672 $14,292 $19,163 6/30/2003 $14,929 $16,664 $14,474 $18,770 7/31/2003 $14,889 $16,153 $14,730 $16,837 8/31/2003 $15,165 $16,483 $15,016 $17,204 9/30/2003 $15,127 $16,740 $14,857 $18,148 10/31/2003 $15,747 $17,101 $15,697 $17,587 11/30/2003 $15,865 $17,231 $15,835 $17,690 12/31/2003 $16,556 $17,855 $16,665 $17,900 1/31/2004 $16,847 $18,195 $16,971 $18,260 2/29/2004 $17,072 $18,505 $17,207 $18,656 3/31/2004 $16,887 $18,451 $16,947 $18,941 4/30/2004 $16,489 $17,816 $16,682 $17,758 5/31/2004 $16,648 $17,933 $16,910 $17,685 6/30/2004 $16,932 $18,212 $17,239 $17,856 7/31/2004 $16,491 $17,984 $16,668 $18,183 8/31/2004 $16,629 $18,325 $16,735 $18,936 9/30/2004 $16,785 $18,523 $16,916 $19,141 10/31/2004 $17,035 $18,819 $17,175 $19,466 11/30/2004 $17,548 $19,089 $17,870 $18,983 12/31/2004 $18,103 $19,689 $18,477 $19,507 1/31/2005 $17,851 $19,678 $18,027 $20,194 2/28/2005 $18,116 $19,823 $18,406 $19,927 3/31/2005 $17,825 $19,559 $18,081 $19,792 4/30/2005 $17,643 $19,642 $17,738 $20,565 5/31/2005 $18,190 $20,257 $18,302 $21,195 6/30/2005 $18,269 $20,440 $18,328 $21,625 7/31/2005 $18,744 $20,650 $19,009 $20,976 8/31/2005 $18,686 $20,813 $18,836 $21,679 9/30/2005 $18,665 $20,617 $18,988 $20,903 10/31/2005 $18,318 $20,230 $18,672 $20,447 11/30/2005 $18,912 $20,744 $19,377 $20,588 12/31/2005 $19,005 $20,987 $19,384 $21,181 1/31/2006 $19,355 $21,215 $19,897 $20,914 2/28/2006 $19,457 $21,353 $19,951 $21,169 3/31/2006 $19,458 $21,115 $20,199 $20,183 4/30/2006 $19,561 $21,049 $20,471 $19,620 5/31/2006 $19,077 $20,694 $19,882 $19,639 6/30/2006 $19,122 $20,789 $19,909 $19,826 7/31/2006 $19,266 $21,041 $20,031 $20,242 8/31/2006 $19,743 $21,608 $20,507 $20,886 9/30/2006 $20,213 $22,109 $21,035 $21,289 10/31/2006 $20,798 $22,616 $21,720 $21,468 11/30/2006 $21,187 $23,090 $22,133 $21,981 12/31/2006 $21,312 $23,030 $22,443 $21,377 - -------------------------------------------------------------------------------- 2 The Asset Allocation Composite Index is weighted 60% in the S&P 500 Index and 40% in the Lehman Brothers 20+ Year U.S. Treasury Index. You cannot invest directly in an Index. 3 The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index with each stock's weight in the Index proportionate to its market value. You cannot invest directly in an Index. 4 The Lehman Brothers 20+ Year U.S. Treasury Index is an unmanaged index composed of securities in the U.S. Treasury Index with maturities of 20 years or greater. You cannot invest directly in an Index. 5 Fund characteristics, portfolio holdings and sector distribution are subject to change. Cash and cash equivalents are not reflected in the calculations of fund characteristics, portfolio holdings and sector distribution. 6 The ten largest portfolio holdings are calculated based on the market value of the securities divided by total market value of the portfolio of the Fund. 7 The chart compares the performance of the WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND for the most recent ten years of the Fund with the Asset Allocation Composite Index, S&P 500 Index and the Lehman Brothers 20+ Year U.S. Treasury Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 3 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND (the Fund) seeks maximum long-term total return, consistent with minimizing risk to principal. ADVISER SUBADVISER Wells Fargo Funds Management, LLC Cooke & Bieler, L.P. FUND MANAGERS FUND INCEPTION DATE Kermick S. Eck, CFA 05/01/1998 Daren C. Heitman, CFA Michael M. Meyer, CFA James R. Norris Edward W. O'Connor, CFA R. James O'Neil, CFA Mehul Trivedi, CFA HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD? - -------------------------------------------------------------------------------- The Fund returned 22.12% 1 for the 12-month period that ended December 31, 2006, slightly underperforming its benchmark, the Russell 1000(R) Value Index 2, which returned 22.25%. In addition, the Fund outperformed the S&P 500 Index 3, which returned 15.78% during the same period. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. IF THEY DID, RETURNS WOULD BE LOWER. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE? - -------------------------------------------------------------------------------- The Fund's strong fourth quarter performance in 2006 put an exclamation point on an impressive year. For the 12-month period, the Fund slightly underperformed its value benchmark and outperformed the general market as measured by the S&P 500 Index. The reason for the strong performance was stock selection. Major contributors included Big Lots and Vodafone while the worst performers were Boston Scientific and Dell. The market's strong rally in the second half of 2006 was more than enough to offset the year's first half, resulting in an impressive overall gain, especially for value stocks, which outperformed growth stocks by a fairly wide margin. Its advance in 2006 was very broad and returns were fairly evenly distributed across economic sectors, with the exception of health care and technology where returns were positive but not as strong as the overall market. Similar to 2005 though a bit less pronounced, investors seemed to maintain a hearty appetite for higher risk, lower quality stocks. WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD? - -------------------------------------------------------------------------------- Beyond adding to existing holdings, we also established new positions in a number of high quality, financially strong companies that we determined were undervalued based on our methodology. New positions included American International Group, American Power Conversion, Dell, Diageo, General Electric, Henkel KGaA ADR, Illinois Tool Works, Johnson & Johnson, Quest Diagnostics, Williams-Sonoma, and Willis Group Holdings. To make room for these opportunities, we sold Applied Materials, Bristol-Myers, Comcast Corp. Class A, Engelhard, FedEx, General Dynamics, Leggett & Platt, Manpower, Merck, and Royal Dutch Shell plc ADR Class A because these companies achieved our price targets, or, in a few cases, we reassessed our view of the quality of the underlying business. LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK? - -------------------------------------------------------------------------------- We would characterize the underlying economic environment as generally favorable for equity investing. Based on recent data, the U.S. economy is slowing but remains healthy. The housing market appears to slowly be coming back into balance. Inflationary pressures also appear to be waning. Any significant optimism we might have is tempered by two major concerns: First, we are worried that the 2006 market may have borrowed some returns from 2007, and that valuations have become somewhat demanding. We are not suggesting that valuations are excessive or that we expect a major market decline but we would not be surprised to see stocks muddle along for a while as companies earn their way into holding their current valuations. Second, there seems to be an unusually high level of complacency among investors regarding risk. In the event that the consensus view of the economy and inflation are too optimistic, investors could become more risk averse, in which case lower securities prices would be the adjustment mechanism. We remain somewhat cautious and envision that performance will likely depend increasingly on selectivity with a focus on quality. Due to its intrinsically defensive and high quality characteristics, the Fund is positioned to benefit from investors' increasing preference for high quality stocks. STOCK FUNDS SHOULD ONLY BE CONSIDERED FOR LONG-TERM GOALS AS VALUES FLUCTUATE IN RESPONSE TO THE ACTIVITIES OF INDIVIDUAL COMPANIES AND GENERAL MARKET AND ECONOMIC CONDITIONS. THE FUND'S INVESTMENT PROCESS MAY, AT TIMES, RESULT IN HIGHER THAN AVERAGE PORTFOLIO TURNOVER AND INCREASED TRADING EXPENSES. CONSULT THE FUND'S PROSPECTUS FOR ADDITIONAL INFORMATION ON THESE AND OTHER RISKS. - -------------------------------------------------------------------------------- PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS INCLUDING INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. The views expressed are as of December 31, 2006, 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 ADVANTAGE VT C&B LARGE CAP VALUE FUND. 4 PERFORMANCE HIGHLIGHTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- 6-Months* 1-Year 5-Year Life of Fund - --------------------------------------------------------------------------------------------------------------- VT C&B Large Cap Value Fund (Incept. Date 05/01/1998) 15.63 22.12 5.95 2.52 - --------------------------------------------------------------------------------------------------------------- Benchmarks - --------------------------------------------------------------------------------------------------------------- Russell 1000(R) Value Index 2 14.72 22.25 10.86 7.47 - --------------------------------------------------------------------------------------------------------------- S&P 500 Index 3 12.73 15.78 6.19 4.38 * RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. FUND CHARACTERISTICS 4 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- Beta** 0.87 - -------------------------------------------------------------------------------- Price to Earnings (trailing 12 months) 17.45 - -------------------------------------------------------------------------------- Price to Book Ratio 2.67 - -------------------------------------------------------------------------------- Median Market Cap. ($B) $ 25.75 - -------------------------------------------------------------------------------- Portfolio Turnover 30% - -------------------------------------------------------------------------------- Net Asset Value (NAV) $ 11.24 ** A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE RUSSELL 1000(R) VALUE INDEX BETA IS 1.00 BY DEFINITION. SECTOR DISTRIBUTION 4 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Consumer Discretionary (20%) Consumer Staples (11%) Energy (3%) Financials (26%) Health Care (9%) Industrials (20%) Information Technology (7%) Telecommunications Services (4%) TEN LARGEST EQUITY HOLDINGS 4,5 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- Vodafone Group plc ADR 3.44% - -------------------------------------------------------------------------------- American Express Company 3.42% - -------------------------------------------------------------------------------- McDonald's Corporation 3.22% - -------------------------------------------------------------------------------- Exxon Mobil Corporation 3.16% - -------------------------------------------------------------------------------- Bank of America Corporation 3.04% - -------------------------------------------------------------------------------- Omnicom Group Incorporated 2.85% - -------------------------------------------------------------------------------- Dover Corporation 2.84% - -------------------------------------------------------------------------------- State Street Corporation 2.73% - -------------------------------------------------------------------------------- Berkshire Hathaway Incorporated Class B 2.71% - -------------------------------------------------------------------------------- MBIA Incorporated 2.68% GROWTH OF $10,000 INVESTMENT 6 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] WELLS FARGO ADVANTAGE Russell 1000(R) VT C&B LARGE CAP VALUE FUND Value Index S&P 500 Index 5/1/1998 $10,000 $10,000 $10,000 5/31/1998 $ 9,680 $ 9,852 $ 9,747 6/30/1998 $ 9,739 $ 9,978 $10,143 7/31/1998 $ 9,268 $ 9,801 $10,035 8/31/1998 $ 8,156 $ 8,343 $ 8,586 9/30/1998 $ 8,626 $ 8,822 $ 9,136 10/31/1998 $ 9,199 $ 9,506 $ 9,878 11/30/1998 $ 9,460 $ 9,949 $10,476 12/31/1998 $ 9,624 $10,288 $11,080 1/31/1999 $ 9,403 $10,370 $11,543 2/28/1999 $ 9,161 $10,224 $11,184 3/31/1999 $ 9,380 $10,436 $11,632 4/30/1999 $10,188 $11,410 $12,082 5/31/1999 $10,087 $11,285 $11,797 6/30/1999 $10,399 $11,612 $12,451 7/31/1999 $10,024 $11,272 $12,063 8/31/1999 $ 9,477 $10,854 $12,003 9/30/1999 $ 8,981 $10,475 $11,675 10/31/1999 $ 9,285 $11,078 $12,413 11/30/1999 $ 9,255 $10,992 $12,666 12/31/1999 $ 9,386 $11,044 $13,411 1/31/2000 $ 9,142 $10,684 $12,737 2/29/2000 $ 8,715 $ 9,891 $12,496 3/31/2000 $ 9,498 $11,097 $13,718 4/30/2000 $ 9,284 $10,968 $13,306 5/31/2000 $ 9,416 $11,084 $13,033 6/30/2000 $ 9,157 $10,577 $13,355 7/31/2000 $ 9,311 $10,709 $13,146 8/31/2000 $ 9,974 $11,305 $13,962 9/30/2000 $ 9,813 $11,409 $13,225 10/31/2000 $10,048 $11,689 $13,169 11/30/2000 $ 9,527 $11,256 $12,132 12/31/2000 $ 9,929 $11,820 $12,191 1/31/2001 $10,103 $11,865 $12,623 2/28/2001 $ 9,806 $11,535 $11,473 3/31/2001 $ 9,420 $11,128 $10,747 4/30/2001 $ 9,953 $11,673 $11,581 5/31/2001 $10,107 $11,935 $11,659 6/30/2001 $ 9,824 $11,671 $11,375 7/31/2001 $ 9,783 $11,646 $11,263 8/31/2001 $ 9,249 $11,179 $10,559 9/30/2001 $ 8,553 $10,392 $ 9,706 10/31/2001 $ 8,738 $10,303 $ 9,891 11/30/2001 $ 9,222 $10,901 $10,650 12/31/2001 $ 9,295 $11,158 $10,743 1/31/2002 $ 8,821 $11,073 $10,587 2/28/2002 $ 8,769 $11,090 $10,382 3/31/2002 $ 9,341 $11,615 $10,773 4/30/2002 $ 8,794 $11,216 $10,120 5/31/2002 $ 8,711 $11,273 $10,046 6/30/2002 $ 8,157 $10,625 $ 9,330 7/31/2002 $ 7,392 $ 9,637 $ 8,603 8/31/2002 $ 7,423 $ 9,711 $ 8,660 9/30/2002 $ 6,436 $ 8,631 $ 7,719 10/31/2002 $ 6,977 $ 9,270 $ 8,398 11/30/2002 $ 7,424 $ 9,854 $ 8,892 12/31/2002 $ 7,056 $ 9,427 $ 8,370 1/31/2003 $ 6,857 $ 9,199 $ 8,151 2/28/2003 $ 6,658 $ 8,953 $ 8,029 3/31/2003 $ 6,673 $ 8,968 $ 8,106 4/30/2003 $ 7,197 $ 9,757 $ 8,774 5/31/2003 $ 7,606 $10,388 $ 9,235 6/30/2003 $ 7,745 $10,517 $ 9,353 7/31/2003 $ 7,872 $10,674 $ 9,518 8/31/2003 $ 7,903 $10,841 $ 9,704 9/30/2003 $ 7,858 $10,734 $ 9,601 10/31/2003 $ 8,292 $11,391 $10,144 11/30/2003 $ 8,376 $11,546 $10,233 12/31/2003 $ 8,859 $12,258 $10,769 1/31/2004 $ 9,008 $12,473 $10,967 2/29/2004 $ 9,253 $12,740 $11,119 3/31/2004 $ 9,147 $12,629 $10,952 4/30/2004 $ 8,998 $12,321 $10,780 5/31/2004 $ 9,009 $12,446 $10,928 6/30/2004 $ 9,151 $12,740 $11,140 7/31/2004 $ 8,969 $12,561 $10,771 8/31/2004 $ 9,044 $12,739 $10,815 9/30/2004 $ 9,111 $12,937 $10,932 10/31/2004 $ 9,176 $13,152 $11,099 11/30/2004 $ 9,562 $13,817 $11,548 12/31/2004 $ 9,854 $14,280 $11,940 1/31/2005 $ 9,789 $14,025 $11,649 2/28/2005 $10,016 $14,490 $11,894 3/31/2005 $ 9,904 $14,291 $11,684 4/30/2005 $ 9,720 $14,035 $11,462 5/31/2005 $ 9,958 $14,374 $11,827 6/30/2005 $ 9,978 $14,530 $11,844 7/31/2005 $10,270 $14,950 $12,284 8/31/2005 $10,075 $14,886 $12,172 9/30/2005 $ 9,978 $15,094 $12,271 10/31/2005 $ 9,805 $14,711 $12,066 11/30/2005 $10,185 $15,192 $12,522 12/31/2005 $10,160 $15,285 $12,526 1/31/2006 $10,432 $15,878 $12,858 2/28/2006 $10,464 $15,974 $12,893 3/31/2006 $10,707 $16,190 $13,053 4/30/2006 $10,980 $16,601 $13,228 5/31/2006 $10,816 $16,181 $12,848 6/30/2006 $10,730 $16,285 $12,865 7/31/2006 $10,784 $16,681 $12,944 8/31/2006 $11,156 $16,960 $13,252 9/30/2006 $11,528 $17,298 $13,593 10/31/2006 $11,946 $17,864 $14,036 11/30/2006 $12,232 $18,272 $14,302 12/31/2006 $12,407 $18,682 $14,503 - -------------------------------------------------------------------------------- 1 The Fund's adviser has committed through April 30, 2007, 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. Prior to May 1, 2006, the WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND was named the Wells Fargo Advantage C&B Large Cap Value Fund and prior to April 11, 2005, the WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND was named the Wells Fargo Equity Value Fund. Performance for the Fund prior to September 20, 1999, reflects performance of the Life and Annuity Trust Equity Value Fund, its predecessor fund. 2 The Russell 1000(R) Value Index measures performance of those Russell 1000(R) companies with lower price-to-book ratios and lower forecasted growth values. The Fund has selected the Russell 1000(R) Value Index to replace the S&P 500 Index as its benchmark index going forward because the Russell 1000(R) Value Index is more representative of the breadth of the Fund's holdings. You cannot invest directly in an Index. 3 The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index with each stock's weight in the Index proportionate to its market value. You cannot invest directly in an Index. 4 Fund characteristics, equity holdings and sector distribution are subject to change. Cash and cash equivalents are not reflected in the calculations of fund characteristics, equity holdings and sector distribution. 5 The ten largest equity holdings are calculated based on the market value of the securities divided by total market value of the portfolio of the Fund. 6 The chart compares the performance of the WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND for the life of the Fund with the Russell 1000(R) Value Index and the S&P 500 Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 5 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT DISCOVERY FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The WELLS FARGO ADVANTAGE VT DISCOVERY FUND(SM) (the Fund) seeks long-term capital appreciation. ADVISER SUBADVISER Wells Fargo Funds Management, LLC Wells Capital Management Incorporated FUND MANAGERS FUND INCEPTION DATE James M. Leach, CFA 05/08/1992 Thomas J. Pence, CFA HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD? - -------------------------------------------------------------------------------- The Fund returned 14.64% 1 for the 12-month period that ended December 31, 2006, outperforming its benchmark, the Russell 2500(TM) Growth Index 2, which returned 12.26%. In addition, the Fund underperformed the Russell 2000(R) Index 3, which returned 18.37% and it outperformed the Russell Midcap(R) Growth Index 4, which returned 10.66% during the same period. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. IF THEY DID, RETURNS WOULD BE LOWER. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE? - -------------------------------------------------------------------------------- The year 2006 capped off the fourth straight year of gains for growth equity investors. After a drop in energy prices provided relief from mounting inflation pressures in the third quarter, inflation concerns remained subdued into the fourth quarter. Equities advanced steadily during the fourth quarter as investors became comfortable that the Fed would continue to hold the Federal funds rate at 5.25%. Healthy corporate profits and record margins persisted despite a notable slowdown in the housing market. Most equity indices recorded solid gains during the period with the Dow Jones Industrial Average exceeding its previous high recorded in January 2000. The returns to various capitalization segments were not as notable as the disparity between value and growth styles of investing. The value stocks claimed leadership for the sixth straight year despite a decided valuation advantage for growth stocks. Areas of strength during the period included holdings in industrials, telecommunications and health care sectors. Slightly detracting from these solid gains were holdings in the information technology and financial sectors. WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD? - -------------------------------------------------------------------------------- We increased the Fund's exposure within the industrials and materials holdings. For example, we added to our position in Precision Castparts Inc. This holding was a sound contributor as the firm experienced market share gains and robust growth within both of its end markets: commercial aerospace and industrial gas turbines. We also increased the Fund's exposure in the materials sector by initiating a holding in Chaparral Steel Company. This firm continued to benefit from growth in non-residential construction spending. The technology sector was a challenge for the Fund during the year. In particular, Red Hat Inc. an open source software provider, experienced weakness as investors became uncertain of the competitive landscape within the sector. Due to this uncertainty we liquidated the Fund's position. LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK? - -------------------------------------------------------------------------------- While market cycles do not begin or end with the turn of the calendar, we believe that we are entering 2007 with a deceleration in economic and corporate profit growth. Inflation appears to be contained and the clear moderation in the pace of economic growth makes it less likely that inflation will become a problem. Corporate earnings are universally expected to slow in 2007, but are still expected to grow in the mid single-digit range. A slowdown in corporate profits has historically corresponded with leadership by larger capitalization growth equities. This type of environment may encourage the Fed to hold the Federal funds rate steady. As the economy progresses into the latter stages of growth we expect higher levels of volatility due to more variation in the underlying fundamentals of individual companies. As such, we remain committed to fundamental research in order to identify and invest in companies that we believe will fare well in the future environment. STOCK FUNDS SHOULD ONLY BE CONSIDERED FOR LONG-TERM GOALS AS VALUES FLUCTUATE IN RESPONSE TO THE ACTIVITIES OF INDIVIDUAL COMPANIES AND GENERAL MARKET AND ECONOMIC CONDITIONS. FUNDS THAT INVEST IN SMALLER COMPANIES INVOLVE ADDITIONAL RISKS BECAUSE THESE COMPANIES OFTEN HAVE LIMITED FINANCIAL RESOURCES, AND THEIR STOCKS TEND TO BE MORE VOLATILE AND LESS LIQUID THAN THOSE OF LARGER COMPANIES. THE FUND'S INVESTMENT PROCESS MAY, AT TIMES, RESULT IN HIGHER THAN AVERAGE PORTFOLIO TURNOVER AND INCREASED TRADING EXPENSES. INVESTMENT STRATEGIES THAT EMPHASIZE PARTICULAR MARKET SEGMENTS OR FEWER SECURITIES TEND TO INCREASE THE TOTAL RISK OF AN INVESTMENT (RELATIVE TO THE BROADER MARKET). THIS FUND IS EXPOSED TO FOREIGN INVESTMENT RISK. CONSULT THE FUND'S PROSPECTUS FOR ADDITIONAL INFORMATION ON THESE AND OTHER RISKS. - -------------------------------------------------------------------------------- PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. The views expressed are as of December 31, 2006, 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 ADVANTAGE VT DISCOVERY FUND. 6 PERFORMANCE HIGHLIGHTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- 6-Months* 1-Year 5-Year 10-Year - ---------------------------------------------------------------------------------------------------------- VT Discovery Fund(SM) (Incept. Date 05/08/1992) 7.66 14.64 12.00 9.17 - ---------------------------------------------------------------------------------------------------------- Benchmarks - ---------------------------------------------------------------------------------------------------------- Russell 2500(TM) Growth Index 3 6.94 12.26 7.62 7.11 - ---------------------------------------------------------------------------------------------------------- Russell 2000(R) Index 3 9.38 18.37 11.39 9.44 - ---------------------------------------------------------------------------------------------------------- Russell Midcap(R) Growth Index 4 7.90 10.66 8.22 8.62 - ---------------------------------------------------------------------------------------------------------- * RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. FUND CHARACTERISTICS 5 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- Beta** 1.05 - -------------------------------------------------------------------------------- Price to Earnings (trailing 12 months) 22.44 - -------------------------------------------------------------------------------- Price to Book Ratio 3.64 - -------------------------------------------------------------------------------- Median Market Cap. ($B) $ 2.86 - -------------------------------------------------------------------------------- Portfolio Turnover 114% - -------------------------------------------------------------------------------- Net Asset Value (NAV) $16.44 ** A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE RUSSELL 2500(TM) GROWTH INDEX BETA IS 1.00 BY DEFINITION. SECTOR DISTRIBUTION 5 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Consumer Discretionary (16%) Consumer Staples (1%) Energy (9%) Financials (3%) Health Care (20%) Industrials (22%) Information Technology (16%) Materials (6%) Telecommunication Services (7%) TEN LARGEST EQUITY HOLDINGS 5,6 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- NII Holdings Incorporated 3.13% - -------------------------------------------------------------------------------- Hilton Hotels Corporation 2.65% - -------------------------------------------------------------------------------- Equinix Incorporated 2.59% - -------------------------------------------------------------------------------- Precision Castparts Corporation 2.44% - -------------------------------------------------------------------------------- American Tower Corporation Class A 2.34% - -------------------------------------------------------------------------------- Goldcorp Incorporated 2.30% - -------------------------------------------------------------------------------- Cognizant Technology Solutions Corporation Class A 2.23% - -------------------------------------------------------------------------------- Ladish Company Incorporated 2.23% - -------------------------------------------------------------------------------- Endurance Specialty Holdings Limited 2.21% - -------------------------------------------------------------------------------- Tessera Technologies Incorporated 1.94% GROWTH OF $10,000 INVESTMENT 7 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] WELLS FARGO ADVANTAGE Russell 2500(TM) Russell VT DISCOVERY Growth Russell 2000(R) Midcap(R) FUND Index Index Growth Index 12/31/1996 $10,000 $10,000 $10,000 $10,000 1/31/1997 $10,241 $10,299 $10,200 $10,442 2/28/1997 $ 9,667 $ 9,848 $ 9,953 $10,213 3/31/1997 $ 9,000 $ 9,200 $ 9,483 $ 9,635 4/30/1997 $ 9,102 $ 9,241 $ 9,510 $ 9,871 5/31/1997 $10,093 $10,349 $10,568 $10,756 6/30/1997 $10,426 $10,695 $11,022 $11,054 7/31/1997 $11,278 $11,374 $11,534 $12,112 8/31/1997 $11,389 $11,651 $11,798 $11,994 9/30/1997 $12,139 $12,474 $12,662 $12,600 10/31/1997 $11,546 $11,696 $12,106 $11,970 11/30/1997 $11,519 $11,517 $12,027 $12,095 12/31/1997 $11,139 $11,476 $12,238 $12,254 1/31/1998 $11,028 $11,326 $12,045 $12,034 2/28/1998 $11,852 $12,298 $12,935 $13,165 3/31/1998 $12,389 $12,755 $13,468 $13,717 4/30/1998 $12,295 $12,871 $13,542 $13,903 5/31/1998 $11,741 $12,044 $12,812 $13,331 6/30/1998 $11,995 $12,132 $12,839 $13,708 7/31/1998 $11,431 $11,229 $11,799 $13,121 8/31/1998 $ 9,581 $ 8,677 $ 9,507 $10,617 9/30/1998 $ 9,919 $ 9,438 $10,252 $11,420 10/31/1998 $10,482 $10,076 $10,670 $12,261 11/30/1998 $11,018 $10,792 $11,229 $13,088 12/31/1998 $11,948 $11,831 $11,924 $14,443 1/31/1999 $12,032 $12,174 $12,083 $14,876 2/28/1999 $10,914 $11,186 $11,104 $14,149 3/31/1999 $10,735 $11,707 $11,277 $14,937 4/30/1999 $11,110 $12,641 $12,288 $15,617 5/31/1999 $11,143 $12,771 $12,467 $15,416 6/30/1999 $11,298 $13,674 $13,031 $16,493 7/31/1999 $10,746 $13,395 $12,674 $15,968 8/31/1999 $10,084 $13,106 $12,205 $15,802 9/30/1999 $ 9,963 $13,200 $12,207 $15,667 10/31/1999 $ 9,952 $13,842 $12,257 $16,878 11/30/1999 $10,812 $15,477 $12,989 $18,626 12/31/1999 $12,556 $18,395 $14,460 $21,852 1/31/2000 $12,059 $18,293 $14,227 $21,847 2/29/2000 $13,913 $22,985 $16,576 $26,440 3/31/2000 $14,023 $21,182 $15,483 $26,467 4/30/2000 $13,361 $19,118 $14,551 $23,898 5/31/2000 $13,527 $17,416 $13,703 $22,156 6/30/2000 $14,034 $19,718 $14,898 $24,507 7/31/2000 $14,332 $18,103 $14,418 $22,955 8/31/2000 $14,718 $20,462 $15,518 $26,417 9/30/2000 $13,968 $19,139 $15,062 $25,126 10/31/2000 $13,295 $17,955 $14,390 $23,406 11/30/2000 $12,203 $14,534 $12,912 $18,320 12/31/2000 $13,107 $15,436 $14,021 $19,284 1/31/2001 $13,990 $16,435 $14,752 $20,386 2/28/2001 $13,063 $13,899 $13,784 $16,860 3/31/2001 $12,721 $12,362 $13,110 $14,447 4/30/2001 $14,001 $14,246 $14,135 $16,855 5/31/2001 $13,933 $14,658 $14,483 $16,776 6/30/2001 $14,383 $14,990 $14,983 $16,784 7/31/2001 $13,590 $13,885 $14,172 $15,653 8/31/2001 $12,942 $12,961 $13,714 $14,518 9/30/2001 $11,620 $10,932 $11,868 $12,119 10/31/2001 $12,400 $12,010 $12,563 $13,393 11/30/2001 $13,074 $13,048 $13,535 $14,834 12/31/2001 $13,643 $13,763 $14,370 $15,398 1/31/2002 $13,603 $13,175 $14,221 $14,898 2/28/2002 $13,365 $12,361 $13,831 $14,054 3/31/2002 $14,251 $13,357 $14,943 $15,126 4/30/2002 $13,841 $12,914 $15,079 $14,325 5/31/2002 $13,775 $12,263 $14,410 $13,898 6/30/2002 $13,021 $11,136 $13,695 $12,364 7/31/2002 $12,083 $ 9,752 $11,627 $11,163 8/31/2002 $12,083 $ 9,750 $11,598 $11,124 9/30/2002 $11,395 $ 9,013 $10,765 $10,240 10/31/2002 $12,043 $ 9,531 $11,111 $11,034 11/30/2002 $12,664 $10,417 $12,102 $11,897 12/31/2002 $12,003 $ 9,759 $11,428 $11,178 1/31/2003 $11,660 $ 9,546 $11,111 $11,069 2/28/2003 $11,646 $ 9,323 $10,776 $10,972 3/31/2003 $11,792 $ 9,447 $10,915 $11,177 4/30/2003 $12,612 $10,271 $11,949 $11,938 5/31/2003 $13,524 $11,359 $13,232 $13,086 6/30/2003 $13,577 $11,593 $13,471 $13,273 7/31/2003 $14,555 $12,365 $14,314 $13,747 8/31/2003 $15,520 $13,028 $14,970 $14,505 9/30/2003 $15,004 $12,749 $14,693 $14,223 10/31/2003 $16,326 $13,797 $15,927 $15,370 11/30/2003 $16,564 $14,264 $16,493 $15,781 12/31/2003 $16,736 $14,279 $16,827 $15,953 1/31/2004 $17,344 $14,874 $17,558 $16,480 2/29/2004 $17,727 $15,012 $17,716 $16,756 3/31/2004 $17,529 $15,065 $17,880 $16,724 4/30/2004 $16,815 $14,426 $16,969 $16,253 5/31/2004 $17,172 $14,726 $17,238 $16,636 6/30/2004 $17,661 $15,085 $17,964 $16,901 7/31/2004 $16,260 $13,904 $16,754 $15,782 8/31/2004 $15,665 $13,625 $16,668 $15,588 9/30/2004 $16,842 $14,239 $17,451 $16,169 10/31/2004 $17,476 $14,643 $17,794 $16,717 11/30/2004 $18,812 $15,615 $19,338 $17,580 12/31/2004 $19,367 $16,362 $19,910 $18,422 1/31/2005 $18,560 $15,785 $19,080 $17,929 2/28/2005 $18,600 $16,099 $19,402 $18,383 3/31/2005 $18,155 $15,654 $18,848 $18,114 4/30/2005 $16,962 $14,808 $17,768 $17,397 5/31/2005 $18,483 $15,794 $18,931 $18,394 6/30/2005 $19,214 $16,211 $19,662 $18,736 7/31/2005 $20,413 $17,263 $20,909 $19,828 8/31/2005 $20,355 $17,065 $20,522 $19,707 9/30/2005 $20,910 $17,231 $20,585 $19,962 10/31/2005 $19,857 $16,668 $19,945 $19,375 11/30/2005 $20,647 $17,599 $20,913 $20,427 12/31/2005 $20,969 $17,699 $20,816 $20,651 1/31/2006 $22,577 $19,040 $22,684 $21,889 2/28/2006 $22,563 $18,982 $22,620 $21,619 3/31/2006 $23,250 $19,792 $23,717 $22,222 4/30/2006 $23,718 $19,853 $23,712 $22,316 5/31/2006 $22,065 $18,669 $22,380 $21,265 6/30/2006 $22,329 $18,580 $22,523 $21,178 7/31/2006 $21,466 $17,675 $21,791 $20,419 8/31/2006 $22,022 $18,100 $22,436 $20,889 9/30/2006 $22,197 $18,357 $22,622 $21,365 10/31/2006 $23,148 $19,262 $23,925 $22,186 11/30/2006 $24,200 $19,916 $24,555 $23,055 12/31/2006 $24,040 $19,871 $24,636 $22,848 - -------------------------------------------------------------------------------- 1 The Fund's adviser has committed through April 30, 2007, to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's return would have been lower. Prior to May 1, 2006, the WELLS FARGO ADVANTAGE VT DISCOVERY FUND(SM) was named the Wells Fargo Advantage Discovery Fund. Performance shown for the WELLS FARGO ADVANTAGE VT DISCOVERY FUND(SM) for periods prior to April 11, 2005, reflects the performance of the Strong Discovery Fund II, its predecessor fund. 2 The Russell 2500(TM) Growth Index measures the performance of those Russell 2500 companies with higher price-to-book ratios and higher forecasted growth values. The Fund has selected the Russell 2500(TM) Growth Index to replace the Russell Midcap(R) Growth Index and the Russell 2000(R) Index as its benchmark index going forward because the Russell 2500(TM) Growth Index is more representative of the breadth of the Fund's holding. You cannot invest directly in an Index. 3 The Russell 2000(R) Index measures the performance of the 2,000 smallest companies in the Russell 3000(R) Index, which represents approximately 8% of the total market capitalization of the Russell 3000(R) Index. You cannot invest directly in an Index. 4 The Russell Midcap(R) Growth Index measures the performance of those Russell Midcap(R) companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000(R) Growth index. You cannot invest directly in an Index. 5 Fund characteristics, equity holdings and sector distribution are subject to change. Cash and cash equivalents are not reflected in the calculations of fund characteristics, equity holdings and sector distribution. 6 The ten largest equity holdings are calculated based on the market value of the securities divided by total market value of the portfolio of the Fund. 7 The chart compares the performance of the WELLS FARGO ADVANTAGE VT DISCOVERY FUND(SM) for the most recent ten years of the Fund with the Russell 2500(TM) Growth Index, the Russell 2000(R) Index and the Russell Midcap(R) Growth Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 7 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND (the Fund) seeks long-term capital appreciation and above-average dividend income. ADVISER SUBADVISER Wells Fargo Funds Management, LLC Wells Capital Management Incorporated FUND MANAGERS FUND INCEPTION DATE Gary J. Dunn, CFA 05/06/1996 Robert M. Thornberg HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD? - -------------------------------------------------------------------------------- The Fund returned 18.55% 1 for the 12-month period that ended December 31, 2006, underperforming its benchmark, the Russell 1000(R) Value Index 2, which returned 22.25%. In addition, the Fund outperformed the S&P 500 Index 3, which returned 15.78%, during the same period. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. IF THEY DID, RETURNS WOULD BE LOWER. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE? - -------------------------------------------------------------------------------- The equity markets continued to have solid performance throughout 2006, with double-digit earnings growth and strong merger and acquisition activity. Telecommunication services stocks had a terrific year due to improved industry fundamentals and accelerating earnings growth. AT&T was a stellar performer in this sector. Energy stocks also had another solid year. In particular, Exxon Mobil had profits and cash flow that reached all-time highs. Morgan Stanley led very good performance in the financial sector as the company participated in a strong investment banking industry that experienced broad-based growth. Health care stocks had a surprisingly good year, and companies such as Abbott Labs added to earnings growth estimates with select and strategic acquisitions. Several other blue chip stocks delivered performance that was well above the market, including McDonald's, Walt Disney, Chevron, JPMorgan Chase, Cisco Systems, Hewlett-Packard, and FPL Group. The Fund's relative underperformance was primarily due to a difficult start in early 2006 when investors favored lower-quality companies that had strong price and earnings momentum compared to the high-quality, long-term focus of the Fund's holdings. The Fund's overweighted position in industrial stocks hindered relative performance as both 3M and General Electric lagged peer returns. While several technology holdings did quite well, both Intel and Nokia had negative returns for the year because earnings did not match expectations. In the materials sector, Rohm & Haas had a challenging year as a slowdown in the housing and auto markets affected margins and earnings. After several years of significant outperformance, consumer staples company PepsiCo had a subpar year, even as earnings growth matched estimates. Several other stocks had a negative impact on the Fund's performance, including Target, British Petroleum, AIG, and Public Service Enterprise Group. WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD? - -------------------------------------------------------------------------------- Trading activity for the year centered around modest changes to sector weights and a number of stock-specific changes due to valuation, diversification, and better investment opportunities. During the period, seven new stocks were added to the Fund's portfolio: Cisco Systems, MDU Resources, Sysco Corp., Biomet, United Technologies, Express Scripts, and Halliburton. Four stock positions were eliminated primarily due to strong performance and a corresponding rise in valuation levels: Baxter International, Quest Diagnostics, Royal Dutch Petroleum, and ACCO Brands. LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK? - -------------------------------------------------------------------------------- As we begin 2007, we believe that stock prices are poised to rise. The growth rate of domestic economy is slowing even as certain areas continue to expand. Corporate profits are strong on the heels of 18 consecutive quarters of double-digit earnings growth. Consumer spending is being supported by new job growth rather than mortgage equity withdrawals. Valuations are at or below historical norms despite strong price appreciation in 2006. We believe that the Fund is positioned to do well in many economic scenarios. The above-market-expected earnings growth should be beneficial in a moderate growth environment, while the Fund's attractive valuation and above-market dividend yield should help support stock prices if the market were to decline. Consequently, our focus on high-quality, industry leaders selling at reasonable valuations may prove to be beneficial. STOCK FUNDS SHOULD ONLY BE CONSIDERED FOR LONG-TERM GOALS AS VALUES FLUCTUATE IN RESPONSE TO THE ACTIVITIES OF INDIVIDUAL COMPANIES AND GENERAL MARKET AND ECONOMIC CONDITIONS. CONSULT THE FUND'S PROSPECTUS FOR ADDITIONAL INFORMATION ON THESE AND OTHER RISKS. - -------------------------------------------------------------------------------- PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. The views expressed are as of December 31, 2006, 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 ADVANTAGE VT EQUITY INCOME FUND. 8 PERFORMANCE HIGHLIGHTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- 6-Months* 1-Year 5-Year 10-Year - --------------------------------------------------------------------------------------------------------- VT Equity Income Fund (Incept. Date 05/06/1996) 15.28 18.55 7.17 8.30 - --------------------------------------------------------------------------------------------------------- Benchmarks - --------------------------------------------------------------------------------------------------------- Russell 1000(R) Value Index 2 14.72 22.25 10.86 11.00 - --------------------------------------------------------------------------------------------------------- S&P 500 Index 3 12.73 15.78 6.19 8.42 * RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. FUND CHARACTERISTICS 4 (AS OF DECEMBER 31, 2006) - ----------------------------------------------------------------------------- Beta** 0.87 - ----------------------------------------------------------------------------- Price to Earnings (trailing 12 months) 14.93 - ----------------------------------------------------------------------------- Price to Book Ratio 2.70 - ----------------------------------------------------------------------------- Median Market Cap. ($B) $57.39 - ----------------------------------------------------------------------------- Portfolio Turnover 14% - ----------------------------------------------------------------------------- Net Asset Value (NAV) $19.75 ** A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE RUSSELL 1000(R) VALUE INDEX BETA IS 1.00 BY DEFINITION. SECTOR DISTRIBUTION 4 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Utilities (6%) Consumer Discretionary (9%) Consumer Staples (8%) Energy (14%) Financial Services (29%) Health Care (9%) Industrials (9%) Information Technology (8%) Materials (4%) Telecommunications Services (4%) TEN LARGEST EQUITY HOLDINGS 4,5 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- Citigroup Incorporated 4.44% - -------------------------------------------------------------------------------- Exxon Mobil Corporation 3.95% - -------------------------------------------------------------------------------- Morgan Stanley 3.45% - -------------------------------------------------------------------------------- General Electric Company 3.26% - -------------------------------------------------------------------------------- Chevron Corporation 3.13% - -------------------------------------------------------------------------------- Bank of America Corporation 2.92% - -------------------------------------------------------------------------------- ConocoPhillips 2.81% - -------------------------------------------------------------------------------- Fortune Brands Incorporated 2.75% - -------------------------------------------------------------------------------- St. Paul Travelers Companies Incorporated 2.49% - -------------------------------------------------------------------------------- E.I. du Pont de Nemours & Company 2.42% GROWTH OF $10,000 INVESTMENT 6 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] WELLS FARGO ADVANTAGE Russell 1000(R) VT EQUITY INCOME FUND Value Index S&P 500 Index 12/31/1996 $10,000 $10,000 $10,000 1/31/1997 $10,495 $10,485 $10,624 2/28/1997 $10,632 $10,639 $10,708 3/31/1997 $10,321 $10,256 $10,269 4/30/1997 $10,623 $10,687 $10,881 5/31/1997 $11,109 $11,284 $11,543 6/30/1997 $11,567 $11,768 $12,060 7/31/1997 $12,310 $12,655 $13,019 8/31/1997 $11,742 $12,204 $12,290 9/30/1997 $12,301 $12,941 $12,963 10/31/1997 $11,943 $12,580 $12,531 11/30/1997 $12,475 $13,136 $13,110 12/31/1997 $12,690 $13,520 $13,335 1/31/1998 $12,727 $13,329 $13,482 2/28/1998 $13,553 $14,226 $14,454 3/31/1998 $14,230 $15,097 $15,194 4/30/1998 $14,369 $15,198 $15,347 5/31/1998 $14,174 $14,973 $15,083 6/30/1998 $14,397 $15,165 $15,695 7/31/1998 $13,989 $14,896 $15,529 8/31/1998 $12,319 $12,680 $13,286 9/30/1998 $12,996 $13,407 $14,137 10/31/1998 $13,905 $14,447 $15,286 11/30/1998 $14,546 $15,120 $16,212 12/31/1998 $15,028 $15,635 $17,146 1/31/1999 $14,981 $15,760 $17,862 2/28/1999 $14,990 $15,538 $17,307 3/31/1999 $15,544 $15,860 $18,000 4/30/1999 $16,333 $17,341 $18,697 5/31/1999 $16,296 $17,150 $18,256 6/30/1999 $16,944 $17,648 $19,268 7/31/1999 $16,502 $17,131 $18,667 8/31/1999 $16,239 $16,495 $18,575 9/30/1999 $15,638 $15,919 $18,066 10/31/1999 $16,061 $16,836 $19,209 11/30/1999 $16,202 $16,705 $19,600 12/31/1999 $16,215 $16,785 $20,753 1/31/2000 $15,380 $16,238 $19,711 2/29/2000 $14,194 $15,032 $19,338 3/31/2000 $15,609 $16,865 $21,228 4/30/2000 $15,581 $16,670 $20,590 5/31/2000 $15,857 $16,845 $20,169 6/30/2000 $15,480 $16,075 $20,666 7/31/2000 $15,194 $16,276 $20,343 8/31/2000 $16,040 $17,181 $21,606 9/30/2000 $15,879 $17,339 $20,466 10/31/2000 $16,326 $17,766 $20,379 11/30/2000 $15,772 $17,106 $18,773 12/31/2000 $16,593 $17,963 $18,865 1/31/2001 $16,554 $18,032 $19,534 2/28/2001 $16,076 $17,530 $17,754 3/31/2001 $15,184 $16,912 $16,630 4/30/2001 $16,211 $17,740 $17,922 5/31/2001 $16,514 $18,139 $18,042 6/30/2001 $16,035 $17,737 $17,603 7/31/2001 $15,878 $17,699 $17,429 8/31/2001 $15,540 $16,990 $16,339 9/30/2001 $14,551 $15,794 $15,020 10/31/2001 $14,723 $15,658 $15,307 11/30/2001 $15,520 $16,568 $16,481 12/31/2001 $15,695 $16,959 $16,625 1/31/2002 $15,462 $16,828 $16,383 2/28/2002 $15,574 $16,855 $16,067 3/31/2002 $16,109 $17,652 $16,671 4/30/2002 $15,581 $17,047 $15,661 5/31/2002 $15,571 $17,132 $15,546 6/30/2002 $14,739 $16,149 $14,439 7/31/2002 $13,396 $14,647 $13,313 8/31/2002 $13,487 $14,758 $13,401 9/30/2002 $11,703 $13,117 $11,946 10/31/2002 $12,583 $14,089 $12,996 11/30/2002 $13,371 $14,977 $13,760 12/31/2002 $12,672 $14,327 $12,952 1/31/2003 $12,343 $13,980 $12,614 2/28/2003 $11,972 $13,607 $12,424 3/31/2003 $12,006 $13,630 $12,543 4/30/2003 $12,977 $14,829 $13,577 5/31/2003 $13,720 $15,787 $14,292 6/30/2003 $13,984 $15,984 $14,474 7/31/2003 $14,235 $16,223 $14,730 8/31/2003 $14,299 $16,476 $15,016 9/30/2003 $14,218 $16,314 $14,857 10/31/2003 $14,965 $17,313 $15,697 11/30/2003 $15,125 $17,548 $15,835 12/31/2003 $15,993 $18,629 $16,665 1/31/2004 $16,261 $18,957 $16,971 2/29/2004 $16,679 $19,363 $17,207 3/31/2004 $16,494 $19,193 $16,947 4/30/2004 $16,237 $18,725 $16,682 5/31/2004 $16,258 $18,916 $16,910 6/30/2004 $16,502 $19,362 $17,239 7/31/2004 $16,168 $19,090 $16,668 8/31/2004 $16,308 $19,361 $16,735 9/30/2004 $16,445 $19,661 $16,916 10/31/2004 $16,564 $19,988 $17,175 11/30/2004 $17,256 $20,999 $17,870 12/31/2004 $17,766 $21,702 $18,477 1/31/2005 $17,668 $21,316 $18,027 2/28/2005 $18,212 $22,021 $18,406 3/31/2005 $17,859 $21,720 $18,081 4/30/2005 $17,520 $21,331 $17,738 5/31/2005 $17,979 $21,845 $18,302 6/30/2005 $17,925 $22,083 $18,328 7/31/2005 $18,474 $22,721 $19,009 8/31/2005 $18,354 $22,623 $18,836 9/30/2005 $18,563 $22,940 $18,988 10/31/2005 $18,277 $22,357 $18,672 11/30/2005 $18,816 $23,089 $19,377 12/31/2005 $18,721 $23,229 $19,384 1/31/2006 $18,985 $24,131 $19,897 2/28/2006 $19,107 $24,278 $19,951 3/31/2006 $19,227 $24,606 $20,199 4/30/2006 $19,747 $25,231 $20,471 5/31/2006 $19,216 $24,592 $19,882 6/30/2006 $19,252 $24,750 $19,909 7/31/2006 $19,656 $25,351 $20,031 8/31/2006 $20,124 $25,776 $20,507 9/30/2006 $20,588 $26,289 $21,035 10/31/2006 $21,248 $27,150 $21,720 11/30/2006 $21,651 $27,770 $22,133 12/31/2006 $22,193 $28,393 $22,443 - -------------------------------------------------------------------------------- 1 The Fund's adviser has committed through April 30, 2007, to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's return would have been lower. Prior to May 1, 2006, the WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND was named the Wells Fargo Advantage Equity Income Fund and prior to April 11, 2005, was named the Wells Fargo Equity Income Fund. Performance shown for the Fund for periods prior to September 20, 1999, reflects performance of the Norwest Select Income Equity Fund, its predecessor fund. 2 The Russell 1000(R) Value Index measures performance of those Russell 1000(R) companies with lower price-to-book ratios and lower forecasted growth values. The Fund has selected the Russell 1000(R) Value Index to replace the S&P 500 Index as its benchmark index going forward because the Russell 1000(R) Value Index is more representative of the breadth of the Fund's holding. You cannot invest directly in an Index. 3 The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index with each stock's weight in the Index proportionate to its market value. You cannot invest directly in an Index. 4 Fund characteristics, equity holding and sector distribution are subject to change. Cash and cash equivalents are not reflected in the calculations of funds characteristics, equity holdings and sector distribution. 5 The ten largest equity holdings are calculated based on the market value of the securities divided by total market value of the portfolio of the Fund. 6 The chart compares the performance of the WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND for the most recent ten years of the Fund with the Russell 1000(R) Value Index and the S&P 500 Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 9 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (the Fund) seeks long-term capital appreciation. ADVISER SUBADVISER Wells Fargo Funds Management, LLC New Star Institutional Managers FUND MANAGERS FUND INCEPTION DATE Mark Beale 07/03/2000 Brian Coffey Richard Lewis HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD? - -------------------------------------------------------------------------------- The Fund returned 20.81% 1 for the 12-month period that ended December 31, 2006, underperforming the MSCI EAFE Index 2 which returned 26.86% during the same period. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. IF THEY DID, RETURNS WOULD BE LOWER. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE? - -------------------------------------------------------------------------------- Global markets in 2006 continued to behave in a risk-loving fashion, which was visible in the contraction of corporate bond yields. Corporate profitability remained high in most regions during 2006, and that, combined with low financing costs in debt markets, was very supportive for mergers and acquisitions activity. Private equity firms favored small and mid cap companies, and this trend was a factor in the underperformance of the Fund's large-cap, high-quality holdings. The pattern of performance was fairly consistent across geographical regions. Overall stock selection was negative in Europe, the United Kingdom, and Japan, with a positive contribution from the Pacific Basin and emerging markets. The Fund's bias toward high return on invested capital (ROIC) companies was reflected in its overweighted position in sectors such as health care, information technology, and financials and the Fund's underweighted position in more cyclically sensitive sectors such as materials and industrials. The large-cap, high-ROIC stocks that we overweighted in the Fund delivered solid performance for the most part and equaled or beat our analysts' earnings expectations. These gains were overshadowed, however, by the continued strength from cyclical sectors and the small and mid cap companies. WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD? - -------------------------------------------------------------------------------- We made several changes to the Fund's portfolio. First, we reduced the Fund's exposure in Japan and emerging markets while increasing weightings in Europe and the Pacific Basin. In Japan, we reduced the Fund's exposure to financials with the sale of Shinsei Bank and a reduction of holdings in Sumitomo Trust, Nikko Cordial, and Nomura Holdings. We partly reinvested the proceeds in names like Sony and Nissan Motor because they both were poised to benefit from improving product pipelines. We also exited some of the Fund's more defensive holdings in Japan as we shifted the portfolio toward more domestically sensitive securities. In Europe, we added to the Fund's holdings in financials and purchased Commerzbank and Allianz in Germany while selling Standard Chartered in the United Kingdom. We increased exposure to consumer discretionary stocks with the purchase of Michelin in France and DaimlerChrysler in Germany. The new management at Michelin has targeted improvements in their ROIC and we believe that their intentions are credible, while DaimlerChrysler is under intense pressure to restructure which may also enhance returns. We reduced exposure and finished the year with a very modest 1.2% in emerging markets. Elsewhere in Asia, we have added to property stocks, which we believe are set to benefit from plentiful regional liquidity and modest property valuations relative to average earnings, unlike many other major markets. LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK? - -------------------------------------------------------------------------------- Global liquidity conditions are likely to continue to favor small and mid cap stocks, and we hope to add holdings to the Fund's portfolio that are attractive from our ROIC analysis but that also might be tempting to alternative investment strategies. Japan was a significant underperformer in 2006, and we anticipate that its domestic recovery may progress in a more positive direction during 2007. Asian property as mentioned earlier is particularly attractive, and we will maintain the Fund's overweighted position there. We will also keep our eye on European telecommunications stocks because we believe they have strong cash generation and, in many cases, under-leveraged balance sheets. STOCK FUNDS SHOULD ONLY BE CONSIDERED FOR LONG-TERM GOALS AS VALUES FLUCTUATE IN RESPONSE TO THE ACTIVITIES OF INDIVIDUAL COMPANIES AND GENERAL MARKET AND ECONOMIC CONDITIONS. FOREIGN INVESTMENTS PRESENT CERTAIN RISKS THAT MAY NOT BE PRESENT IN DOMESTIC SECURITIES, INCLUDING CURRENCY FLUCTUATION, THE POTENTIAL FOR DIPLOMATIC AND POLITICAL INSTABILITY, REGULATORY AND LIQUIDITY RISKS, FOREIGN TAXATION AND DIFFERENCES IN AUDITING AND OTHER FINANCIAL STANDARDS. THESE RISKS ARE GENERALLY INTENSIFIED IN EMERGING MARKETS. THE FUND'S INVESTMENT PROCESS MAY, AT TIMES, RESULT IN HIGHER THAN AVERAGE PORTFOLIO TURNOVER AND INCREASED TRADING EXPENSES, AND MAY GENERATE HIGHER SHORT-TERM CAPITAL GAINS. INVESTMENT STRATEGIES THAT EMPHASIZE PARTICULAR MARKET SEGMENTS OR FEWER SECURITIES TEND TO INCREASE TOTAL RISK OF AN INVESTMENT (RELATIVE TO THE BROADER MARKET.) THIS FUND IS EXPOSED TO SMALL COMPANY SECURITIES. CONSULT THE FUND'S PROSPECTUS FOR ADDITIONAL INFORMATION ON THESE AND OTHER RISKS. 10 PERFORMANCE HIGHLIGHTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- 6-Months* 1-Year 5-Year Life of Fund - -------------------------------------------------------------------------------------------------------------------- VT International Core Fund (Incept. date 07/03/2000) 12.01 20.81 8.04 1.58 - -------------------------------------------------------------------------------------------------------------------- Benchmark - -------------------------------------------------------------------------------------------------------------------- MSCI EAFE Index 2 14.80 26.86 15.43 5.68 - -------------------------------------------------------------------------------------------------------------------- * RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. FUND CHARACTERISTICS 3 (AS OF DECEMBER 31, 2006) - ------------------------------------------------------------------------------ Beta** 0.97 - ------------------------------------------------------------------------------ Price to Earnings (trailing 12 months) 15.38 - ------------------------------------------------------------------------------ Price to Book Ratio 2.50 - ------------------------------------------------------------------------------ Median Market Cap. ($B) $19.81 - ------------------------------------------------------------------------------ Portfolio Turnover 43% - ------------------------------------------------------------------------------ Net Asset Value (NAV) $9.87 ** A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE MSCI EAFE INDEX BETA IS 1.00 BY DEFINITION. PORTFOLIO COMPOSITION 3 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] United Kingdom (20%) Australia (4%) Continental Europe (44%) Eastern Asia (26%) Russia (1%) Scandinavia (3%) Southeast Asia (2%) TEN LARGEST EQUITY HOLDINGS 3,4 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- Roche Holding AG 2.73% - -------------------------------------------------------------------------------- Total SA 2.66% - -------------------------------------------------------------------------------- GlaxoSmithKline plc 2.59% - -------------------------------------------------------------------------------- Vodafone Group plc 2.44% - -------------------------------------------------------------------------------- Novartis AG 2.26% - -------------------------------------------------------------------------------- Royal Dutch Shell plc Class A 2.12% - -------------------------------------------------------------------------------- Aviva plc 1.93% - -------------------------------------------------------------------------------- Allianz AG 1.65% - -------------------------------------------------------------------------------- Mitsubishi UFJ Financial Group Incorporated 1.60% - -------------------------------------------------------------------------------- AXA SA 0.87% GROWTH OF $10,000 INVESTMENT 5 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND MSCI EAFE Index 7/3/2000 $10,000 $10,000 7/31/2000 $ 9,670 $ 9,503 8/31/2000 $ 9,870 $ 9,587 9/30/2000 $ 9,280 $ 9,123 10/31/2000 $ 9,150 $ 8,909 11/30/2000 $ 8,650 $ 8,577 12/31/2000 $ 8,967 $ 8,884 1/31/2001 $ 9,187 $ 8,879 2/28/2001 $ 8,465 $ 8,214 3/31/2001 $ 7,914 $ 7,670 4/30/2001 $ 8,315 $ 8,208 5/31/2001 $ 8,255 $ 7,925 6/30/2001 $ 8,024 $ 7,604 7/31/2001 $ 7,813 $ 7,466 8/31/2001 $ 7,594 $ 7,279 9/30/2001 $ 6,882 $ 6,543 10/31/2001 $ 7,113 $ 6,710 11/30/2001 $ 7,374 $ 6,958 12/31/2001 $ 7,524 $ 7,000 1/31/2002 $ 7,193 $ 6,628 2/28/2002 $ 7,083 $ 6,675 3/31/2002 $ 7,424 $ 7,040 4/30/2002 $ 7,424 $ 7,091 5/31/2002 $ 7,313 $ 7,187 6/30/2002 $ 6,996 $ 6,903 7/31/2002 $ 6,282 $ 6,222 8/31/2002 $ 6,232 $ 6,210 9/30/2002 $ 5,508 $ 5,544 10/31/2002 $ 5,770 $ 5,843 11/30/2002 $ 6,071 $ 6,109 12/31/2002 $ 5,800 $ 5,904 1/31/2003 $ 5,538 $ 5,658 2/28/2003 $ 5,398 $ 5,528 3/31/2003 $ 5,297 $ 5,424 4/30/2003 $ 5,770 $ 5,962 5/31/2003 $ 6,111 $ 6,329 6/30/2003 $ 6,192 $ 6,485 7/31/2003 $ 6,273 $ 6,643 8/31/2003 $ 6,444 $ 6,805 9/30/2003 $ 6,585 $ 7,016 10/31/2003 $ 6,989 $ 7,454 11/30/2003 $ 7,150 $ 7,620 12/31/2003 $ 7,624 $ 8,216 1/31/2004 $ 7,634 $ 8,333 2/29/2004 $ 7,725 $ 8,527 3/31/2004 $ 7,745 $ 8,578 4/30/2004 $ 7,483 $ 8,391 5/31/2004 $ 7,483 $ 8,427 6/30/2004 $ 7,584 $ 8,616 7/31/2004 $ 7,318 $ 8,337 8/31/2004 $ 7,307 $ 8,376 9/30/2004 $ 7,439 $ 8,596 10/31/2004 $ 7,621 $ 8,890 11/30/2004 $ 8,076 $ 9,499 12/31/2004 $ 8,359 $ 9,917 1/31/2005 $ 8,217 $ 9,735 2/28/2005 $ 8,601 $10,158 3/31/2005 $ 8,359 $ 9,907 4/30/2005 $ 8,177 $ 9,685 5/31/2005 $ 8,156 $ 9,700 6/30/2005 $ 8,278 $ 9,833 7/31/2005 $ 8,557 $10,135 8/31/2005 $ 8,755 $10,394 9/30/2005 $ 8,953 $10,859 10/31/2005 $ 8,692 $10,542 11/30/2005 $ 8,765 $10,803 12/31/2005 $ 9,167 $11,306 1/31/2006 $ 9,749 $12,001 2/28/2006 $ 9,643 $11,977 3/31/2006 $ 9,950 $12,377 4/30/2006 $10,363 $12,978 5/31/2006 $ 9,876 $12,489 6/30/2006 $ 9,887 $12,494 7/31/2006 $ 9,961 $12,619 8/31/2006 $10,270 $12,969 9/30/2006 $10,281 $12,992 10/31/2006 $10,624 $13,498 11/30/2006 $10,889 $13,906 12/31/2006 $11,074 $14,343 - -------------------------------------------------------------------------------- PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. The views expressed are as of December 31, 2006, 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 ADVANTAGE VT INTERNATIONAL CORE FUND. 1 The Fund's adviser has committed through April 30, 2007, to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's return would have been lower. Prior to May 1, 2006, the WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND was named the Wells Fargo Advantage International Core Fund and prior to April 11, 2005, the WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND was named the Wells Fargo International Equity Fund. 2 The Morgan Stanley Capital International Europe, Australasia and Far East ("MSCI EAFE") Stock Index is an unmanaged group of securities widely regarded by investors to be representations of the stock markets of Europe, Australasia and the Far East. You cannot invest directly in an Index. 3 Fund characteristics, equity holdings and portfolio composition are subject to change. Cash and cash equivalents are not reflected in the calculations of Fund characteristics, equity holdings and portfolio composition. 4 The ten largest equity holdings are calculated based on the market value of the securities divided by total market value of the portfolio of the Fund. 5 The chart compares the performance of the WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND for the life of the Fund with the MSCI EAFE Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 11 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND (the Fund) seeks total return comprised of long-term capital appreciation and current income. ADVISER SUBADVISER Wells Fargo Funds Management, LLC Matrix Asset Advisors, Inc. FUND MANAGER FUND INCEPTION DATE David A. Katz, CFA 04/12/1994 HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD? - -------------------------------------------------------------------------------- The Fund returned 15.57% 1 for the 12-month period that ended December 31, 2006, underperforming its benchmark, S&P 500 Index 2, which returned 15.78% during the same period. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. IF THEY DID, RETURNS WOULD BE LOWER. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE? - -------------------------------------------------------------------------------- Thanks to a very strong second half of 2006, the Fund had a favorable 12-months in absolute terms and just slightly underperformed its benchmark for the period. Overall, in the market, value stocks continued to significantly outperform growth stocks. We expected growth stocks to overtake value stocks in 2006, and while that did not happen as we anticipated, we still believe it may happen in 2007. Furthermore, we believe that the Fund would benefit from such a rotation between the two styles because it owns several growth stocks. Detractors from performance included Boston Scientific, Intel Corporation, and Marsh & McLennan Companies. The primary positive performance factors included the resurgence of mega cap stocks in the second half of 2006, as the market became more aware of a possible slowdown in the economy. In addition, there was a favorable rotation for the Fund away from areas that had previously led the market, such as energy, commodities, and materials to other areas where the Fund was more concentrated, such as stocks in the financials and technology sectors. For the period, the Fund's portfolio had overall gains and positive performance in all sectors. Financials, technology and consumer discretionary were key contributing sectors. Bank of America, Bank of New York, Citigroup, JPMorgan Chase & Co., Merrill Lynch, and Morgan Stanley led the strong performance in financials while American Power Conversion, Cisco Systems, Microsoft Corporation, Novellus Systems, and Symbol Technologies Inc., were leaders in the Fund's technology holdings. Other strong contributors to performance included Comcast, Time Warner, Pfizer Inc., and Wyeth. WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD? - -------------------------------------------------------------------------------- Our selection process includes fundamental, bottom-up research, which means that we buy individual stocks based on the attractiveness of their prospects and valuation and sell them when our research tells us that they have reached their fair market value. In 2006, we successfully sold our positions in Nokia, Tidewater Inc., and Disney as they reached their fair value. In addition, we had numerous partial sales, reflecting stock prices that neared their fair value. These included Merrill Lynch and Novellus Systems. We also profitably scaled back positions in American Power Conversion and Symbol Technologies after it was announced that they were acquisition candidates. There were unprofitable sales in Freddie Mac, Interpublic Group, and Marsh & McLennan Companies. Each sale reflected our concerns about fundamental deterioration or persistent corporate problems that would delay market recovery. In 2006, we initiated new positions in 3M, Analog Devices, Chevron Corporation, ConocoPhillips, Dollar General, Johnson & Johnson, and Teva Pharmaceutical Industries. Each of these companies is a leader in its respective field and was purchased at a very attractive valuation. Also, at the end of the third quarter of 2006, the spin-off of Western Union from First Data took place. We maintained positions in both stocks. LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK? - -------------------------------------------------------------------------------- The Fund continues its focus on strong businesses with compelling fundamentals. We still maintain a significant percentage of the Fund's assets in the mega cap stocks, as we believe they are timely and attractive for 2007. We believe that the economy will slow but will not slip into a recession in 2007. Furthermore, we think that slowing corporate profit growth will favor large-cap, blue-chip stocks. We envision a continuation of the market leadership changes that began in the second half of 2006. Leadership in 2007 is likely to include technology and financial stocks, as well as mega cap stocks across various sectors. Furthermore, we expect this change in leadership to be part of a multiyear swing back in favor of large cap stocks. For now, we believe the Fund is positioned to benefit from these anticipated trends. STOCK FUNDS SHOULD ONLY BE CONSIDERED FOR LONG-TERM GOALS AS VALUES FLUCTUATE IN RESPONSE TO THE ACTIVITIES OF INDIVIDUAL COMPANIES AND GENERAL MARKET AND ECONOMIC CONDITIONS. THE FUND'S INVESTMENT PROCESS MAY, AT TIMES, RESULT IN HIGHER THAN AVERAGE PORTFOLIO TURNOVER AND INCREASED TRADING EXPENSES, AND MAY GENERATE HIGHER SHORT-TERM CAPITAL GAINS. INVESTMENT STRATEGIES THAT EMPHASIZE PARTICULAR MARKET SEGMENTS OR FEWER SECURITIES TEND TO INCREASE THE TOTAL RISK OF AN INVESTMENT (RELATIVE TO THE BROADER MARKET). THIS FUND IS EXPOSED TO FOREIGN INVESTMENTS RISK. CONSULT THE FUND'S PROSPECTUS FOR ADDITIONAL INFORMATION ON THESE AND OTHER RISKS. 12 PERFORMANCE HIGHLIGHTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- 6-Months* 1-Year 5-Year 10-Year - --------------------------------------------------------------------------------------------------------- VT Large Company Core Fund (Incept. Date 04/12/1994) 18.18 15.57 2.33 3.61 - --------------------------------------------------------------------------------------------------------- Benchmark - --------------------------------------------------------------------------------------------------------- S&P 500 Index 2 12.73 15.78 6.19 8.42 - --------------------------------------------------------------------------------------------------------- * RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. FUND CHARACTERISTICS 3 (AS OF DECEMBER 31, 2006) - ------------------------------------------------------------------------------ Beta** 0.95 - ------------------------------------------------------------------------------ Price to Earnings (trailing 12 months) 17.30 - ------------------------------------------------------------------------------ Price to Book Ratio 2.41 - ------------------------------------------------------------------------------ Median Market Cap. ($B) $64.61 - ------------------------------------------------------------------------------ Portfolio Turnover 19% - ------------------------------------------------------------------------------ Net Asset Value (NAV) $15.59 ** A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE S&P 500 INDEX BETA IS 1.00 BY DEFINITION. SECTOR DISTRIBUTION 3 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Consumer Discretionary (15%) Consumer Staples (4%) Energy (4%) Financials (24%) Health Care (18%) Industrials (10%) Information Technology (25%) TEN LARGEST EQUITY HOLDINGS 3,4 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- Time Warner Incorporated 4.65% - -------------------------------------------------------------------------------- Citigroup Incorporated 4.04% - -------------------------------------------------------------------------------- American International Group Incorporated 4.00% - -------------------------------------------------------------------------------- Microsoft Corporation 3.98% - -------------------------------------------------------------------------------- General Electric Company 3.89% - -------------------------------------------------------------------------------- Dollar General Corporation 3.84% - -------------------------------------------------------------------------------- Comcast Corporation Special Class A 3.84% - -------------------------------------------------------------------------------- MedImmune Incorporated 3.76% - -------------------------------------------------------------------------------- Tyco International Limited 3.71% - -------------------------------------------------------------------------------- Morgan Stanley 3.70% GROWTH OF $10,000 INVESTMENT 5 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND S&P 500 Index 12/31/1996 $10,000 $10,000 1/31/1997 $10,574 $10,624 2/28/1997 $10,267 $10,708 3/31/1997 $ 9,910 $10,269 4/30/1997 $10,309 $10,881 5/31/1997 $10,963 $11,543 6/30/1997 $11,199 $12,060 7/31/1997 $12,111 $13,019 8/31/1997 $11,409 $12,290 9/30/1997 $11,865 $12,963 10/31/1997 $11,490 $12,531 11/30/1997 $11,667 $13,110 12/31/1997 $11,733 $13,335 1/31/1998 $11,950 $13,482 2/28/1998 $12,593 $14,454 3/31/1998 $13,198 $15,194 4/30/1998 $13,289 $15,347 5/31/1998 $13,086 $15,083 6/30/1998 $13,721 $15,695 7/31/1998 $13,651 $15,529 8/31/1998 $11,751 $13,286 9/30/1998 $12,294 $14,137 10/31/1998 $13,291 $15,286 11/30/1998 $14,183 $16,212 12/31/1998 $15,114 $17,146 1/31/1999 $15,695 $17,862 2/28/1999 $15,167 $17,307 3/31/1999 $15,889 $18,000 4/30/1999 $16,372 $18,697 5/31/1999 $15,866 $18,256 6/30/1999 $16,753 $19,268 7/31/1999 $16,270 $18,667 8/31/1999 $16,293 $18,575 9/30/1999 $15,856 $18,066 10/31/1999 $16,785 $19,209 11/30/1999 $17,155 $19,600 12/31/1999 $18,199 $20,753 1/31/2000 $17,391 $19,711 2/29/2000 $17,157 $19,338 3/31/2000 $18,690 $21,228 4/30/2000 $18,010 $20,590 5/31/2000 $17,527 $20,169 6/30/2000 $18,169 $20,666 7/31/2000 $17,973 $20,343 8/31/2000 $19,099 $21,606 9/30/2000 $18,002 $20,466 10/31/2000 $17,490 $20,379 11/30/2000 $15,626 $18,773 12/31/2000 $15,725 $18,865 1/31/2001 $15,931 $19,534 2/28/2001 $14,413 $17,754 3/31/2001 $13,242 $16,630 4/30/2001 $14,314 $17,922 5/31/2001 $14,364 $18,042 6/30/2001 $13,852 $17,603 7/31/2001 $13,481 $17,429 8/31/2001 $12,389 $16,339 9/30/2001 $11,496 $15,020 10/31/2001 $11,875 $15,307 11/30/2001 $12,660 $16,481 12/31/2001 $12,705 $16,625 1/31/2002 $12,308 $16,383 2/28/2002 $11,911 $16,067 3/31/2002 $12,335 $16,671 4/30/2002 $11,884 $15,661 5/31/2002 $11,802 $15,546 6/30/2002 $11,147 $14,439 7/31/2002 $ 9,883 $13,313 8/31/2002 $ 9,901 $13,401 9/30/2002 $ 9,313 $11,946 10/31/2002 $ 9,846 $12,996 11/30/2002 $ 9,955 $13,760 12/31/2002 $ 9,422 $12,952 1/31/2003 $ 9,259 $12,614 2/28/2003 $ 9,214 $12,424 3/31/2003 $ 9,386 $12,543 4/30/2003 $ 9,874 $13,577 5/31/2003 $10,217 $14,292 6/30/2003 $10,226 $14,474 7/31/2003 $10,587 $14,730 8/31/2003 $10,849 $15,016 9/30/2003 $10,560 $14,857 10/31/2003 $11,292 $15,697 11/30/2003 $11,337 $15,835 12/31/2003 $11,644 $16,665 1/31/2004 $11,816 $16,971 2/29/2004 $11,879 $17,207 3/31/2004 $11,852 $16,947 4/30/2004 $11,662 $16,682 5/31/2004 $11,888 $16,910 6/30/2004 $11,978 $17,239 7/31/2004 $11,310 $16,668 8/31/2004 $11,192 $16,735 9/30/2004 $11,500 $16,916 10/31/2004 $11,716 $17,175 11/30/2004 $12,267 $17,870 12/31/2004 $12,620 $18,477 1/31/2005 $12,132 $18,027 2/28/2005 $12,267 $18,406 3/31/2005 $12,005 $18,081 4/30/2005 $11,816 $17,738 5/31/2005 $12,105 $18,302 6/30/2005 $11,861 $18,328 7/31/2005 $12,303 $19,009 8/31/2005 $11,924 $18,836 9/30/2005 $11,843 $18,988 10/31/2005 $11,725 $18,672 11/30/2005 $12,249 $19,377 12/31/2005 $12,337 $19,384 1/31/2006 $12,573 $19,897 2/28/2006 $12,555 $19,951 3/31/2006 $12,537 $20,199 4/30/2006 $12,709 $20,471 5/31/2006 $12,328 $19,882 6/30/2006 $12,064 $19,909 7/31/2006 $12,029 $20,031 8/31/2006 $12,375 $20,507 9/30/2006 $13,029 $21,035 10/31/2006 $13,683 $21,720 11/30/2006 $13,883 $22,133 12/31/2006 $14,257 $22,443 - -------------------------------------------------------------------------------- PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. The views expressed are as of December 31, 2006, 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 ADVANTAGE VT LARGE COMPANY CORE FUND. 1 The Fund's adviser has committed through April 30, 2007, to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's return would have been lower. Prior to May 1, 2006, the WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND was named the Wells Fargo Advantage Large Company Core Fund and prior to April 11, 2005, the WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND was named the Wells Fargo Growth Fund. Performance shown for the Fund for periods prior to September 20, 1999, reflects performance of the Annuity Trust Growth Fund, its predecessor fund. 2 The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index with each stock's weight in the Index proportionate to its market value. You cannot invest directly in an Index. 3 Fund characteristics, equity holdings and sector distribution are subject to change. Cash and cash equivalents are not reflected in the calculations of fund characteristics, equity holdings and sector distribution. 4 The ten largest equity holdings are calculated based on the market value of the securities divided by total market value of the portfolio of the Fund. 5 The chart compares the performance of the WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND for the most recent ten years of the Fund with the S&P 500 Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 13 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND (the Fund) seeks long-term capital appreciation by investing primarily in large, domestic companies that we believe have superior growth potential. ADVISER SUBADVISER Wells Fargo Funds Management, LLC Peregrine Capital Management, Inc. FUND MANAGERS FUND INCEPTION DATE John S. Dale, CFA 09/20/1999 Gary E. Nussbaum, CFA HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD? - -------------------------------------------------------------------------------- The Fund returned 2.35% 1 for the 12-month period that ended December 31, 2006, underperforming its benchmark, the Russell 1000(R) Growth Index 2, which returned 9.07%. In addition, the Fund underperformed the S&P 500 Index 3, which returned 15.78% during the same period. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. IF THEY DID, RETURNS WOULD BE LOWER. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE? - -------------------------------------------------------------------------------- We believe that the maximum pressure on quality, larger growth stocks occurred in spring 2006. Since then, they have been on a seesaw, performing better in the third quarter of 2006 but falling behind again in the fourth quarter of 2006. For the entire 12-month period, the Russell 1000(R) Growth Index lagged behind the Russell 1000(R) Value Index 4 by 13 percentage points. Pursuant to what has happened during the past 12-months, large-cap, quality growth stocks also just concluded seven years of underperformance compared to their large-cap value stock counterparts. This run of underperformance is unprecedented in any style of investment management. Growth stocks have had to face three currents that worked against them. First was the shift in favor of value that began in early 2000. Second was the quality differential, with lower-quality stocks outperforming higher-quality stocks for several years. Third was the small cap, large cap stock performance differential, which favored small cap stocks for more than seven years. There are also three somewhat interrelated stories that contributed to the Fund's underperformance. First, we expected that normal, cyclical movement between styles would move value stocks to the "in favor" position as we entered this decade. However, had that been just a cyclical style swing, we also would have expected to see a shift back to growth stocks being in favor by now. Second, the average company, as represented by the S&P 500 Index, experienced an unprecedented period of earnings growth during the past seven years that has also allowed the average company to become a "growth stock." Third, quality growth stocks have also seemed rather boring when compared to the more speculative investment opportunities such as commodities. WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD? - -------------------------------------------------------------------------------- The valuations of the companies in the Fund are consistent with our investment style of identifying primarily large-cap domestic companies that we believe have superior growth potential. Given the very attractive valuations and strong fundamentals, portfolio turnover was well below average for the period. During the period we purchased an initial position in CH Robinson and sold Dell, Apollo, and Fiserv. The Goldman Sachs position advanced strongly and continued to be reduced to maintain portfolio diversification. LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK? - -------------------------------------------------------------------------------- We continue to stay the course with our management style, even when large-cap growth is out of favor. We see a healthy environment for stocks in general, with moderate inflation, real income growth, and solid but moderating earnings growth for the average company. Finally, we believe all the ingredients are in place for large-cap growth to enjoy a period of favor among investors. STOCK FUNDS SHOULD ONLY BE CONSIDERED FOR LONG-TERM GOALS AS VALUES FLUCTUATE IN RESPONSE TO THE ACTIVITIES OF INDIVIDUAL COMPANIES AND GENERAL MARKET AND ECONOMIC CONDITIONS. INVESTMENT STRATEGIES THAT EMPHASIZE PARTICULAR MARKET SEGMENTS OR FEWER SECURITIES TEND TO INCREASE THE TOTAL RISK OF AN INVESTMENT (RELATIVE TO THE BROADER MARKET). THIS FUND IS EXPOSED FOREIGN INVESTMENTS RISK. CONSULT THE FUND'S PROSPECTUS FOR ADDITIONAL INFORMATION ON THESE AND OTHER RISKS. - -------------------------------------------------------------------------------- PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. The views expressed are as of December 31, 2006, 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 ADVANTAGE VT LARGE COMPANY GROWTH FUND. 1 The Fund's adviser has committed through April 30, 2007, to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's return would have been lower. Prior to May 1, 2006, the WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND was named the Wells Fargo Advantage Large Company Growth Fund and prior to April 11, 2005, was named Wells Fargo Large Company Growth Fund. 14 PERFORMANCE HIGHLIGHTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- 6-Months* 1-Year 5-Year Life of Fund - --------------------------------------------------------------------------------------------------------------------- VT Large Company Growth Fund (Incept. Date 09/20/1999) 9.98 2.35 0.31 (0.55) - -------------------------------------------------------------------------------------------------------------------- Benchmarks - -------------------------------------------------------------------------------------------------------------------- Russell 1000(R) Growth Index 2 10.10 9.07 2.69 (2.31) - -------------------------------------------------------------------------------------------------------------------- S&P 500 Index 3 12.73 15.78 6.19 2.46 * RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. FUND CHARACTERISTICS 5 (AS OF DECEMBER 31, 2006) - ------------------------------------------------------------------------------ Beta** 1.23 - ------------------------------------------------------------------------------ Price to Earnings (trailing 12 months) 20.54 - ------------------------------------------------------------------------------ Price to Book Ratio 3.96 - ------------------------------------------------------------------------------ Median Market Cap. ($B) $41.91 - ------------------------------------------------------------------------------ Portfolio Turnover 12% - ------------------------------------------------------------------------------ Net Asset Value (NAV) $9.59 - ------------------------------------------------------------------------------ ** A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE RUSSELL 1000(R) GROWTH INDEX BETA IS 1.00 BY DEFINITION. SECTOR DISTRIBUTION 5 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Consumer Discretionary (10%) Consumer Staples (2%) Financials (28%) Health Care (14%) Industrials (5%) Information Technology (41%) TEN LARGEST EQUITY HOLDINGS 5,6 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- Goldman Sachs Group Incorporated 10.10% - -------------------------------------------------------------------------------- Medtronic Incorporated 5.98% - -------------------------------------------------------------------------------- Microsoft Corporation 5.97% - -------------------------------------------------------------------------------- Cisco Systems Incorporated 5.93% - -------------------------------------------------------------------------------- eBay Incorporated 5.85% - -------------------------------------------------------------------------------- Charles Schwab Corporation 5.59% - -------------------------------------------------------------------------------- American International Group Incorporated 4.58% - -------------------------------------------------------------------------------- Franklin Resources Incorporated 4.24% - -------------------------------------------------------------------------------- Paychex Incorporated 4.22% - -------------------------------------------------------------------------------- Genentech Incorporated 3.78% GROWTH OF $10,000 INVESTMENT 7 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] WELLS FARGO ADVANTAGE VT Russell 1000(R) LARGE COMPANY GROWTH FUND Growth Index S&P 500 Index SEP-99 $10,000 $10,000 $10,000 9/30/1999 $ 9,590 $ 9,561 $ 9,608 10/31/1999 $10,420 $10,283 $10,216 11/30/1999 $10,830 $10,838 $10,423 12/31/1999 $12,030 $11,965 $11,037 1/31/2000 $11,800 $11,404 $10,482 2/29/2000 $12,000 $11,962 $10,284 3/31/2000 $13,430 $12,818 $11,289 4/30/2000 $13,020 $12,208 $10,950 5/31/2000 $12,200 $11,593 $10,726 6/30/2000 $13,130 $12,472 $10,990 7/31/2000 $13,230 $11,951 $10,819 8/31/2000 $14,000 $13,033 $11,490 9/30/2000 $13,150 $11,800 $10,884 10/31/2000 $13,130 $11,242 $10,838 11/30/2000 $12,080 $ 9,585 $ 9,984 12/31/2000 $11,960 $ 9,282 $10,033 1/31/2001 $12,150 $ 9,923 $10,389 2/28/2001 $10,320 $ 8,238 $ 9,442 3/31/2001 $ 9,260 $ 7,342 $ 8,844 4/30/2001 $10,240 $ 8,271 $ 9,531 5/31/2001 $10,150 $ 8,149 $ 9,595 6/30/2001 $ 9,880 $ 7,960 $ 9,361 7/31/2001 $ 9,700 $ 7,761 $ 9,269 8/31/2001 $ 8,843 $ 7,126 $ 8,689 9/30/2001 $ 8,003 $ 6,415 $ 7,988 10/31/2001 $ 8,373 $ 6,752 $ 8,140 11/30/2001 $ 9,353 $ 7,401 $ 8,764 12/31/2001 $ 9,463 $ 7,387 $ 8,841 1/31/2002 $ 9,403 $ 7,256 $ 8,712 2/28/2002 $ 8,783 $ 6,955 $ 8,544 3/31/2002 $ 9,193 $ 7,196 $ 8,866 4/30/2002 $ 8,483 $ 6,608 $ 8,328 5/31/2002 $ 8,223 $ 6,448 $ 8,267 6/30/2002 $ 7,673 $ 5,852 $ 7,679 7/31/2002 $ 6,932 $ 5,530 $ 7,080 8/31/2002 $ 7,012 $ 5,547 $ 7,127 9/30/2002 $ 6,242 $ 4,971 $ 6,353 10/31/2002 $ 6,962 $ 5,427 $ 6,911 11/30/2002 $ 7,422 $ 5,722 $ 7,318 12/31/2002 $ 6,812 $ 5,327 $ 6,888 1/31/2003 $ 6,572 $ 5,197 $ 6,708 2/28/2003 $ 6,532 $ 5,173 $ 6,607 3/31/2003 $ 6,622 $ 5,270 $ 6,671 4/30/2003 $ 7,192 $ 5,659 $ 7,220 5/31/2003 $ 7,523 $ 5,941 $ 7,600 6/30/2003 $ 7,613 $ 6,023 $ 7,698 7/31/2003 $ 7,993 $ 6,173 $ 7,833 8/31/2003 $ 8,123 $ 6,327 $ 7,986 9/30/2003 $ 7,923 $ 6,259 $ 7,901 10/31/2003 $ 8,383 $ 6,611 $ 8,348 11/30/2003 $ 8,353 $ 6,681 $ 8,421 12/31/2003 $ 8,603 $ 6,912 $ 8,863 1/31/2004 $ 8,703 $ 7,053 $ 9,025 2/29/2004 $ 8,703 $ 7,098 $ 9,151 3/31/2004 $ 8,583 $ 6,966 $ 9,013 4/30/2004 $ 8,453 $ 6,885 $ 8,871 5/31/2004 $ 8,563 $ 7,013 $ 8,993 6/30/2004 $ 8,563 $ 7,101 $ 9,168 7/31/2004 $ 8,053 $ 6,700 $ 8,864 8/31/2004 $ 8,043 $ 6,667 $ 8,900 9/30/2004 $ 8,133 $ 6,730 $ 8,996 10/31/2004 $ 8,283 $ 6,835 $ 9,134 11/30/2004 $ 8,633 $ 7,070 $ 9,503 12/31/2004 $ 8,883 $ 7,347 $ 9,826 1/31/2005 $ 8,393 $ 7,103 $ 9,587 2/28/2005 $ 8,413 $ 7,178 $ 9,789 3/31/2005 $ 8,193 $ 7,047 $ 9,615 4/30/2005 $ 8,003 $ 6,913 $ 9,433 5/31/2005 $ 8,533 $ 7,248 $ 9,733 6/30/2005 $ 8,553 $ 7,221 $ 9,747 7/31/2005 $ 9,149 $ 7,574 $10,109 8/31/2005 $ 9,008 $ 7,477 $10,017 9/30/2005 $ 8,998 $ 7,511 $10,098 10/31/2005 $ 9,099 $ 7,438 $ 9,930 11/30/2005 $ 9,590 $ 7,759 $10,305 12/31/2005 $ 9,389 $ 7,735 $10,309 1/31/2006 $ 9,359 $ 7,871 $10,582 2/28/2006 $ 9,399 $ 7,858 $10,610 3/31/2006 $ 9,520 $ 7,975 $10,742 4/30/2006 $ 9,359 $ 7,963 $10,886 5/31/2006 $ 8,898 $ 7,693 $10,573 6/30/2006 $ 8,738 $ 7,663 $10,587 7/31/2006 $ 8,377 $ 7,518 $10,653 8/31/2006 $ 8,748 $ 7,752 $10,906 9/30/2006 $ 9,129 $ 7,966 $11,187 10/31/2006 $ 9,540 $ 8,246 $11,551 11/30/2006 $ 9,640 $ 8,409 $11,770 12/31/2006 $ 9,610 $ 8,438 $11,935 - -------------------------------------------------------------------------------- 2 The Russell 1000(R) Growth Index measures performance of those Russell 1000(R) companies with higher price-to-book ratios and higher forecasted growth values. The Fund has selected the Russell 1000(R) Growth Index to replace the S&P 500 Index as its benchmark index going forward because the Russell 1000(R) Growth Index is more representative of the breadth of the Fund's holding. You cannot invest directly in an Index. 3 The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index with each stock's weight in the Index proportionate to its market value. You cannot invest directly in an Index. 4 The Russell 1000(R) Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. You cannot invest directly in an index. 5 Fund characteristics, equity holdings and sector distribution are subject to change. Cash and cash equivalents are not reflected in the calculations of fund characteristics, equity holdings and sector distribution. 6 The ten largest equity holdings are calculated based on the market value of the securities divided by total market value of the portfolio. 7 The chart compares the performance of the WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND for the life of the Fund with the Russell 1000(R) Growth Index and the S&P 500 Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 15 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT MONEY MARKET FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The WELLS FARGO ADVANTAGE VT MONEY MARKET FUND (the Fund) seeks current income, while preserving capital and liquidity. ADVISER SUBADVISER Wells Fargo Funds Management, LLC Wells Capital Management Incorporated FUND MANAGER FUND INCEPTION DATE David D. Sylvester 05/19/1994 HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD? - -------------------------------------------------------------------------------- The Fund returned 4.41% 1 for the 12-month period that ended December 31, 2006. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. YIELDS WILL FLUCTUATE. THE FUND'S YIELD FIGURES MORE CLOSELY REFLECT THE CURRENT EARNINGS OF THE FUND THAN THE TOTAL RETURN FIGURES. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. IF THEY DID, RETURNS WOULD BE LOWER. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE? - -------------------------------------------------------------------------------- The most significant factor affecting the Fund was the Fed's decision to leave the Federal funds rate unchanged at 5.25% on August 8, 2006, ending a string of 17 consecutive meetings at which it decided to raise the Federal funds rate. The Fed ended 2006 with the Federal funds rate holding steady at 5.25%. Overall, the money market curve was relatively flat during the 12-month period. After it became clear that the Fed was in a pause mode, the three-month London Inter-Bank Offered Rate (LIBOR) also stabilized around the 5.40% level. Some volatility in the money market curve came from the one-year LIBOR as it kept pace with market sentiment. The one-year rates shifted from a high of 5.75% in July 2006 to a low of 5.11% by early December to 5.33% by the end of 2006. WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD? - -------------------------------------------------------------------------------- Our strategy calls for us to adjust the duration of the Fund's assets in light of the current trend in interest rates. Consequently, we decreased the portion of the portfolio in very short-term instruments as the direction of interest rates changed. By the close of the 12-month period, 43% of the Fund matured within 14 days, down from 57% on June 30, 2006. Because interest rates tended to hold steady across the yield curve instead of moving higher, we did not aggressively purchase longer-dated securities or pursue a barbell strategy that would have concentrated the Fund's holdings at the longer and shorter ends of the yield curve. The percentage of the portfolio that matured between 90 and 180 days was increased from 2.4% at the end of June 2006 to 5.2% by the end of the year. Variable rate issues, which offered the interest-rate sensitivity of fixed-rate instruments of shorter maturities but at a somewhat better yield, were increased from 25% of the Fund's assets to 30% by the period end. LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK? - -------------------------------------------------------------------------------- The Fed, along with the market, is in a wait and see mode. We had been waiting to see if slower growth would subdue inflation, which it appears to have done. Now that growth has picked up again, we wonder if inflation will follow to the upside. We believe the next move by the Fed will be in the second half of 2007 and will include an increase in the Federal funds rate, not a decrease. Even if that happens, it is not certain that all money market rates would resume their upward trend. We concluded that a prudent policy of modestly and opportunistically extending the Fund's average maturity is the best course at this time. AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND. - -------------------------------------------------------------------------------- PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. The views expressed are as of December 31, 2006, 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 ADVANTAGE VT MONEY MARKET FUND. 1 The Fund's adviser has committed through April 30, 2007, 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 waived fees and/or reimbursed expenses, the Fund's 7-day Current yield would have been 4.57%. Prior to May 1, 2006, the WELLS FARGO ADVANTAGE VT MONEY MARKET FUND was named the Wells Fargo Advantage Money Market Fund and prior to April 11, 2005, was named Wells Fargo Money Market Fund. Performance for the Fund prior to September 20, 1999, reflects performance of the Life and Annuity Trust Money Market Fund, its predecessor fund. 16 PERFORMANCE HIGHLIGHTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- 6-Months* 1-Year 5-Year 10-Year - ---------------------------------------------------------------------------------------------------------- VT Money Market Fund - (Incept. Date 05/19/1994) 2.36 4.41 1.87 3.30 - ---------------------------------------------------------------------------------------------------------- * RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. FUND YIELD SUMMARY 1 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- 7-Day Current Yield 4.64% - -------------------------------------------------------------------------------- 7-Day Effective Yield 4.75% - -------------------------------------------------------------------------------- 30-Day Simple Yield 4.64% - -------------------------------------------------------------------------------- 30-Day Effective Yield 4.74% - -------------------------------------------------------------------------------- PORTFOLIO ALLOCATION 2 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Variable and Floating Rate Notes (30%) Commercial Paper (39%) Certificates of Deposit (1%) Municipal Bonds and Notes (1%) Repurchase Agreements (18%) Time Deposit (10%) Asset Backed Securities (1%) FUND CHARACTERISTICS 2 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- Weighted Average Maturity 32 - -------------------------------------------------------------------------------- MATURITY DISTRIBUTION 2 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] 2-14 Days (43%) 15-29 Days (23%) 30-59 Days (16%) 60-89 Days (13%) 90-179 Days (5%) - -------------------------------------------------------------------------------- 2 Fund characteristics, portfolio allocation and maturity distribution are subject to change. 17 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND(SM) (the Fund) seeks long-term capital appreciation. ADVISER SUBADVISER Wells Fargo Funds Management, LLC Wells Capital Management Incorporated FUND MANAGERS FUND INCEPTION DATE Ann M. Miletti 05/08/1992 Richard T. Weiss HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD? - -------------------------------------------------------------------------------- The Fund returned 12.22% 1 for the 12-month period that ended December 31, 2006 underperforming its benchmark, the Russell Midcap(R) Index 2, which returned 15.26%. In addition, the Fund underperformed the S&P 500 Index 3, which returned 15.78% during the same period. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. IF THEY DID, RETURNS WOULD BE LOWER. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE? - -------------------------------------------------------------------------------- The Fund's lack of exposure to Real Estate Investment Trusts (REITs) and modest exposure to utilities were the main sources of relative underperformance. We sold the REITs too early, but believed that with valuations at all time highs it did not make sense to maintain a large investment in them. Strong performance, primarily attributable to stock selection, in the consumer discretionary, health care, and energy sectors helped the Fund's performance. Our holding in Cablevision Systems (a media, entertainment, and telecommunications company in the United States) was a significant contributor to the relative outperformance in the consumer discretionary sector. Cable companies had better than expected operational performance during the period, largely driven by continued acceptance of their bundled product offering (video, voice, and data). WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD? - -------------------------------------------------------------------------------- The Fund stayed with its methodology of buying stocks that are selling at a discount to their intrinsic private market value and selling stocks that approach their private market value. This discipline allows us to take a long-term perspective and to be patient with stocks that are out-of-favor in the market, even when the market's focus is on the short-term. During the period, our stock-by-stock approach led us to have an overweighted position in the technology sector. To a lesser extent, we reduced the Fund's underweighted position in the health care, financial, and consumer staples sectors, decreased the overweighted position in the consumer discretionary sector, and increased the Fund's underweighted position in the industrial and telecom sectors. In addition, we started with a relatively large cash position that we reinvested throughout the period. LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK? - -------------------------------------------------------------------------------- The stock market was strong during the past 12 months as the economy rebounded in the first quarter of 2006 from a slow fourth quarter in 2005. Towards the latter half of this period, the market started to become more optimistic about lower inflation risk, mainly due to the pullback we have seen in energy prices, along with moderating economic growth and the impact on Fed actions. We believe that the challenge for 2007 will be to sustain corporate profit growth as the economic growth begins to slow. While we do not expect a recession in 2007, we also do not foresee an expansion in price to earnings ratios. We anticipate that the merger and acquisition market will remain strong. As in 2006, this may benefit our investment style of valuing companies as if we ourselves were private buyers, which is characteristic of this wave of acquisitions. STOCK FUNDS SHOULD ONLY BE CONSIDERED FOR LONG-TERM GOALS AS VALUES FLUCTUATE IN RESPONSE TO THE ACTIVITIES OF INDIVIDUAL COMPANIES AND GENERAL MARKET AND ECONOMIC CONDITIONS. FUNDS THAT INVEST IN SMALLER COMPANIES INVOLVE ADDITIONAL RISKS BECAUSE THESE COMPANIES OFTEN HAVE LIMITED FINANCIAL RESOURCES, AND THEIR STOCKS TEND TO BE MORE VOLATILE AND LESS LIQUID THAN THOSE OF LARGER COMPANIES. INVESTMENT STRATEGIES THAT CONCENTRATE IN PARTICULAR MARKET SEGMENTS OR FEWER SECURITIES TEND TO INCREASE THE TOTAL RISK OF AN INVESTMENT (RELATIVE TO THE BROADER MARKET). THIS FUND IS EXPOSED TO FOREIGN INVESTMENTS RISK. CONSULT THE FUND'S PROSPECTUS FOR ADDITIONAL INFORMATION ON THESE AND OTHER RISKS. - -------------------------------------------------------------------------------- PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. The views expressed are as of December 31, 2006, 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 ADVANTAGE VT OPPORTUNITY FUND. 1 The Fund's adviser has committed through April 30, 2007, to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's return would have been lower. Prior to May 1, 2006, the WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND(SM) was named the Wells Fargo Advantage Opportunity Fund. Performance shown for the WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND(SM) for periods prior to April 11, 2005, reflects the performance of the Strong Opportunity Fund II, its predecessor fund. 2 The Russell Midcap(R) Index measures the performance of the 800 smallest companies in the Russell 1000(R) Index, which represent approximately 25% of the total market capitalization of the Russell 1000(R) Index. The Fund has selected the Russell Midcap(R) Index to replace the S&P 500 Index as its benchmark index going forward because the Russell Midcap(R) Index is more representative of the breadth of the Fund's holdings. You cannot invest directly in an Index. 3 The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index with each stock's weight in the Index proportionate to its market value. You cannot invest directly in an Index. 18 PERFORMANCE HIGHLIGHTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- 6-Months* 1-Year 5-Year 10-Year - -------------------------------------------------------------------------------------- VT Opportunity Fund(SM) (Incept. Date 05/08/1992) 10.49 12.22 7.49 10.97 - -------------------------------------------------------------------------------------- Benchmarks - -------------------------------------------------------------------------------------- Russell Midcap(R) Index 2 9.94 15.26 12.88 12.14 - -------------------------------------------------------------------------------------- S&P 500 Index 3 12.73 15.78 6.19 8.42 * RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. FUND CHARACTERISTICS 4 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- Beta** 0.91 - -------------------------------------------------------------------------------- Price to Earnings (trailing 12 months) 18.88 - -------------------------------------------------------------------------------- Price to Book Ratio 2.41 - -------------------------------------------------------------------------------- Median Market Cap. ($B) $ 9.12 - -------------------------------------------------------------------------------- Portfolio Turnover 41% - -------------------------------------------------------------------------------- Net Asset Value (NAV) $ 24.02 ** A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE RUSSELL MIDCAP(R) INDEX BETA IS 1.00 BY DEFINITION. SECTOR DISTRIBUTION 4 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL] Consumer Discretionary (26%) Consumer Staples (4%) Energy (10%) Financials (14%) Health Care (9%) Industrials (7%) Information Technology (23%) Materials (5%) Utilities (2%) TEN LARGEST EQUITY HOLDINGS 4,5 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- Praxair Incorporated 2.44% - -------------------------------------------------------------------------------- Weatherford International Limited 2.38% - -------------------------------------------------------------------------------- Cablevision Systems New York Group Class A 2.13% - -------------------------------------------------------------------------------- Red Hat Incorporated 2.10% - -------------------------------------------------------------------------------- Transocean Incorporated 2.04% - -------------------------------------------------------------------------------- Toronto-Dominion Bank 2.04% - -------------------------------------------------------------------------------- GlobalSantaFe Corporation 1.87% - -------------------------------------------------------------------------------- Accenture Limited Class A 1.71% - -------------------------------------------------------------------------------- Staples Incorporated 1.66% - -------------------------------------------------------------------------------- AutoNation Incorporated 1.65% GROWTH OF $10,000 INVESTMENT 6 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] WELLS FARGO ADVANTAGE Russell Midcap(R) VT OPPORTUNITY FUND Index S&P 500 Index 12/31/1996 $10,000 $10,000 $10,000 1/31/1997 $10,182 $10,374 $10,624 2/28/1997 $10,099 $10,358 $10,708 3/31/1997 $ 9,777 $ 9,918 $10,269 4/30/1997 $10,060 $10,165 $10,881 5/31/1997 $10,878 $10,907 $11,543 6/30/1997 $11,088 $11,263 $12,060 7/31/1997 $11,984 $12,203 $13,019 8/31/1997 $12,088 $12,071 $12,290 9/30/1997 $12,706 $12,759 $12,963 10/31/1997 $12,313 $12,263 $12,531 11/30/1997 $12,359 $12,555 $13,110 12/31/1997 $12,545 $12,901 $13,335 1/31/1998 $12,528 $12,658 $13,482 2/28/1998 $13,534 $13,647 $14,454 3/31/1998 $14,327 $14,295 $15,194 4/30/1998 $14,647 $14,330 $15,347 5/31/1998 $14,104 $13,887 $15,083 6/30/1998 $14,229 $14,079 $15,695 7/31/1998 $13,731 $13,408 $15,529 8/31/1998 $11,375 $11,263 $13,286 9/30/1998 $12,147 $11,992 $14,137 10/31/1998 $13,240 $12,810 $15,286 11/30/1998 $13,613 $13,416 $16,212 12/31/1998 $14,244 $14,203 $17,146 1/31/1999 $14,703 $14,179 $17,862 2/28/1999 $14,271 $13,707 $17,307 3/31/1999 $14,899 $14,137 $18,000 4/30/1999 $16,126 $15,181 $18,697 5/31/1999 $16,281 $15,137 $18,256 6/30/1999 $17,050 $15,671 $19,268 7/31/1999 $17,139 $15,241 $18,667 8/31/1999 $16,451 $14,846 $18,575 9/30/1999 $16,296 $14,324 $18,066 10/31/1999 $17,242 $15,003 $19,209 11/30/1999 $17,834 $15,435 $19,600 12/31/1999 $19,217 $16,793 $20,753 1/31/2000 $18,647 $16,237 $19,711 2/29/2000 $18,973 $17,485 $19,338 3/31/2000 $20,925 $18,486 $21,228 4/30/2000 $20,525 $17,611 $20,590 5/31/2000 $20,666 $17,145 $20,169 6/30/2000 $20,000 $17,652 $20,666 7/31/2000 $19,764 $17,454 $20,343 8/31/2000 $21,109 $19,127 $21,606 9/30/2000 $20,333 $18,854 $20,466 10/31/2000 $20,459 $18,563 $20,379 11/30/2000 $19,128 $16,892 $18,773 12/31/2000 $20,484 $18,178 $18,865 1/31/2001 $21,733 $18,471 $19,534 2/28/2001 $20,458 $17,346 $17,754 3/31/2001 $19,466 $16,270 $16,630 4/30/2001 $20,912 $17,662 $17,922 5/31/2001 $21,023 $17,991 $18,042 6/30/2001 $20,493 $17,821 $17,603 7/31/2001 $20,202 $17,311 $17,429 8/31/2001 $19,012 $16,646 $16,339 9/30/2001 $16,386 $14,638 $15,020 10/31/2001 $17,361 $15,218 $15,307 11/30/2001 $18,953 $16,493 $16,481 12/31/2001 $19,726 $17,156 $16,625 1/31/2002 $19,523 $17,053 $16,383 2/28/2002 $19,067 $16,872 $16,067 3/31/2002 $20,050 $17,884 $16,671 4/30/2002 $18,985 $17,537 $15,661 5/31/2002 $18,854 $17,339 $15,546 6/30/2002 $16,734 $16,177 $14,439 7/31/2002 $14,827 $14,598 $13,313 8/31/2002 $14,837 $14,678 $13,401 9/30/2002 $13,144 $13,324 $11,946 10/31/2002 $13,986 $13,997 $12,996 11/30/2002 $15,497 $14,969 $13,760 12/31/2002 $14,436 $14,379 $12,952 1/31/2003 $13,999 $14,088 $12,614 2/28/2003 $13,936 $13,902 $12,424 3/31/2003 $13,811 $14,039 $12,543 4/30/2003 $15,071 $15,058 $13,577 5/31/2003 $16,580 $16,437 $14,292 6/30/2003 $16,767 $16,603 $14,474 7/31/2003 $17,308 $17,150 $14,730 8/31/2003 $18,130 $17,895 $15,016 9/30/2003 $17,777 $17,671 $14,857 10/31/2003 $18,786 $19,019 $15,697 11/30/2003 $19,078 $19,553 $15,835 12/31/2003 $19,778 $20,139 $16,665 1/31/2004 $20,611 $20,724 $16,971 2/29/2004 $20,965 $21,170 $17,207 3/31/2004 $20,850 $21,175 $16,947 4/30/2004 $20,559 $20,397 $16,682 5/31/2004 $21,038 $20,903 $16,910 6/30/2004 $21,517 $21,482 $17,239 7/31/2004 $20,809 $20,542 $16,668 8/31/2004 $20,475 $20,631 $16,735 9/30/2004 $21,267 $21,301 $16,916 10/31/2004 $21,611 $21,889 $17,175 11/30/2004 $22,694 $23,222 $17,870 12/31/2004 $23,381 $24,211 $18,477 1/31/2005 $22,704 $23,611 $18,027 2/28/2005 $22,933 $24,341 $18,406 3/31/2005 $22,673 $24,149 $18,081 4/30/2005 $21,913 $23,379 $17,738 5/31/2005 $23,058 $24,499 $18,302 6/30/2005 $23,527 $25,158 $18,328 7/31/2005 $24,943 $26,484 $19,009 8/31/2005 $24,662 $26,298 $18,836 9/30/2005 $24,673 $26,648 $18,988 10/31/2005 $24,027 $25,849 $18,672 11/30/2005 $25,006 $26,996 $19,377 12/31/2005 $25,225 $27,274 $19,384 1/31/2006 $26,391 $28,676 $19,897 2/28/2006 $25,985 $28,642 $19,951 3/31/2006 $26,401 $29,352 $20,199 4/30/2006 $27,110 $29,558 $20,471 5/31/2006 $26,079 $28,562 $19,882 6/30/2006 $25,620 $28,596 $19,909 7/31/2006 $25,078 $27,970 $20,031 8/31/2006 $25,867 $28,680 $20,507 9/30/2006 $26,704 $29,199 $21,035 10/31/2006 $27,352 $30,350 $21,720 11/30/2006 $28,248 $31,442 $22,133 12/31/2006 $28,307 $31,439 $22,443 4 Fund characteristics, equity holdings, and sector distribution are subject to change. Cash and cash equivalents are not reflected in the calculations of Fund characteristics, equity holdings, and sector distribution. 5 The ten largest equity holdings are calculated based on the market value of the securities divided by total market value of the portfolio. 6 The chart compares the performance of the WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND(SM) for the most recent ten years of the Fund with the Russell Midcap(R) Index and the S&P 500 Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 19 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (the Fund) seeks long-term capital appreciation. ADVISER SUBADVISER Wells Fargo Funds Management, LLC Wells Capital Management Incorporated FUND MANAGERS FUND INCEPTION DATE Jerome "Cam" Philpott, CFA 05/01/1995 Stuart Roberts HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD? - -------------------------------------------------------------------------------- The Fund returned 22.75% 1 for the 12-month period that ended December 31, 2006, outperforming its benchmark, the Russell 2000(R) Growth Index 2, which returned 13.35%. In addition, the Fund outperformed the Russell 2000(R) Index 3, which returned 18.37% during the same period. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. IF THEY DID, RETURNS WOULD BE LOWER. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE? - -------------------------------------------------------------------------------- The four top-performing sectors for the Fund during the period were industrials, consumer discretionary, information technology, and telecommunication services. Fund holdings in the industrials sector contributed positively due to good stock selection and positive allocation within the sector. Wesco International and Gardner Denver were two of our strongest performers in industrials. Security selection was the biggest contributor in the consumer discretionary sector, with strong performance from Priceline.com. Priceline posted earnings that again exceeded expectations. The company's domestic services grew faster than the leading competitor's, and the company's international operations, especially in Europe, accelerated faster than anticipated. In addition to good stock selection in the consumer discretionary sector, we also had positive results from certain holdings within information technology. WebEx Communications, ValueClick, and Wright Express all contributed positively, but overall Fund performance within the information technology sector was hindered by Secure Computing. WebEx, an online collaborative services company, underperformed our expectations despite posting good fourth-quarter results in 2006. The stock had been a strong performer in previous periods, and in retrospect, we believe that investors anticipated stronger results than the company could deliver. As we look out over the next several years, WebEx may have attractive possibilities from its continued growth in the collaboration market, international expansion, and new product initiatives that leverage their proprietary network. In telecommunication services, Cbeyond was a top performer in the sector. The biggest detractors on a sector basis included materials, health care, and consumer staples. Negative allocations and the effect of stock selection caused materials to be the leading detractor to the Fund's portfolio. Even though the Fund had some strong holdings in health care, negative returns from many of those holdings hurt the Fund's performance. One of the biggest contributors on an individual stock level was Trammell Crow, a diversified commercial real estate service company, which had outstanding third-quarter returns in 2006. Trammell Crow was sold to CB Richard Ellis, the leading company in this space, at a 25% premium. In response to the acquisition, we sold the Fund's position in Trammell Crow and took profits. WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD? - -------------------------------------------------------------------------------- The most significant changes included adding to the Fund's holdings in the industrials, consumer discretionary, and energy sectors. In addition, we reallocated the Fund's positions in the information technology, financials, and materials sectors. We also added to the industrials sector because it contained strong individual stocks. The Fund's movement out of information technology was the result of taking profits from specific stocks. LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK? - -------------------------------------------------------------------------------- We are optimistic about the growth prospects for the Fund's holdings in 2007 and remain confident about the fundamentals of individual stocks. Over the long term, we believe that share prices will track good fundamentals. In 2005, investors were focused on the headwinds facing equities, and while fundamentals were positive, multiples contracted through the year. Fundamentals were also positive in 2006, and while headwinds did periodically surface, investors became more constructive than in the previous year, which led to an expansion of equity multiples, that rewarded investor patience and perseverance. Our investment process dictates that we do what we have always done: Find attractive investment opportunities one company at a time through our bottom-up research process. We remain focused on that mandate and continue to look for attractive investment opportunities. STOCK FUNDS SHOULD ONLY BE CONSIDERED FOR LONG-TERM GOALS AS VALUES FLUCTUATE IN RESPONSE TO THE ACTIVITIES OF INDIVIDUAL COMPANIES AND GENERAL MARKET AND ECONOMIC CONDITIONS. FUNDS THAT INVEST IN SMALLER COMPANIES INVOLVE ADDITIONAL RISKS BECAUSE THESE COMPANIES OFTEN HAVE LIMITED FINANCIAL RESOURCES, AND THEIR STOCKS TEND TO BE MORE VOLATILE AND LESS LIQUID THAN THOSE OF LARGER COMPANIES. THE FUND'S INVESTMENT PROCESS MAY, AT TIMES, RESULT IN HIGHER THAN AVERAGE PORTFOLIO TURNOVER AND INCREASED TRADING EXPENSES, AND MAY GENERATE HIGHER SHORT-TERM CAPITAL GAINS. INVESTMENT STRATEGIES THAT EMPHASIZE PARTICULAR MARKET SEGMENTS OR FEWER SECURITIES TEND TO INCREASE THE TOTAL RISK OF AN INVESTMENT (RELATIVE TO THE BROADER MARKET). THIS FUND IS EXPOSED TO FOREIGN INVESTMENTS RISK. CONSULT THE FUND'S PROSPECTUS FOR ADDITIONAL INFORMATION ON THESE AND OTHER RISKS. 20 PERFORMANCE HIGHLIGHTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- 6-Months* 1-Year 5-Year 10-Year VT Small Cap Growth Fund (Incept. Date 05/01/1995) 9.61 22.75 5.45 1.77 - ------------------------------------------------------------------------------------------- Benchmarks - ------------------------------------------------------------------------------------------- Russell 2000(R) Growth Index 2 6.86 13.35 6.93 4.88 - ------------------------------------------------------------------------------------------- Russell 2000(R) Index 3 9.38 18.37 11.39 9.44 * RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. FUND CHARACTERISTICS 4 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- Beta** 0.95 - -------------------------------------------------------------------------------- Price to Earnings (trailing 12 months) 24.95 - -------------------------------------------------------------------------------- Price to Book Ratio 3.33 - -------------------------------------------------------------------------------- Median Market Cap. ($B) $0.99 - -------------------------------------------------------------------------------- Portfolio Turnover 135% - -------------------------------------------------------------------------------- Net Asset Value (NAV) $9.96 ** A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE RUSSELL 2000(R) GROWTH INDEX BETA IS 1.00 BY DEFINITION. SECTOR DISTRIBUTION 4 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Consumer Discretionary (20%) Energy (4%) Financial Services (4%) Health Care (21%) Industrials (24%) Information Technology (23%) Telecommunications Services (4%) TEN LARGEST EQUITY HOLDINGS 4,5 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- Resources Connection Incorporated 2.79% - -------------------------------------------------------------------------------- Priceline.com Incorporated 2.77% - -------------------------------------------------------------------------------- inVentiv Health Incorporated 2.34% - -------------------------------------------------------------------------------- Wright Express Corporation 2.28% - -------------------------------------------------------------------------------- WebEx Communications Incorporated 2.24% - -------------------------------------------------------------------------------- VistaPrint Limited 2.22% - -------------------------------------------------------------------------------- DJ Orthopedics Incorporated 2.07% - -------------------------------------------------------------------------------- Microsemi Corporation 1.94% - -------------------------------------------------------------------------------- Gardner Denver Incorporated 1.93% - -------------------------------------------------------------------------------- NeuStar Incorporated Class A 1.90% GROWTH OF $10,000 INVESTMENT 6 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] WELLS FARGO ADVANTAGE VT Russell 2000(R) Russell 2000(R) SMALL CAP GROWTH FUND Growth Index Index 12/31/1996 $10,000 $10,000 $10,000 1/31/1997 $10,215 $10,250 $10,200 2/28/1997 $ 9,637 $ 9,631 $ 9,953 3/31/1997 $ 8,844 $ 8,951 $ 9,483 4/30/1997 $ 8,585 $ 8,848 $ 9,510 5/31/1997 $10,319 $10,177 $10,568 6/30/1997 $10,504 $10,523 $11,022 7/31/1997 $11,178 $11,062 $11,534 8/31/1997 $11,459 $11,394 $11,798 9/30/1997 $12,319 $12,303 $12,662 10/31/1997 $11,526 $11,564 $12,106 11/30/1997 $11,037 $11,288 $12,027 12/31/1997 $10,978 $11,295 $12,238 1/31/1998 $10,720 $11,144 $12,045 2/28/1998 $11,736 $12,128 $12,935 3/31/1998 $12,062 $12,636 $13,468 4/30/1998 $12,088 $12,714 $13,542 5/31/1998 $11,211 $11,790 $12,812 6/30/1998 $11,305 $11,911 $12,839 7/31/1998 $10,101 $10,916 $11,799 8/31/1998 $ 7,752 $ 8,396 $ 9,507 9/30/1998 $ 8,148 $ 9,248 $10,252 10/31/1998 $ 8,492 $ 9,730 $10,670 11/30/1998 $ 8,991 $10,485 $11,229 12/31/1998 $ 9,389 $11,433 $11,924 1/31/1999 $ 9,096 $11,948 $12,083 2/28/1999 $ 8,242 $10,855 $11,104 3/31/1999 $ 8,060 $11,241 $11,277 4/30/1999 $ 8,518 $12,234 $12,288 5/31/1999 $ 8,500 $12,253 $12,467 6/30/1999 $ 8,941 $12,899 $13,031 7/31/1999 $ 8,932 $12,500 $12,674 8/31/1999 $ 8,992 $12,033 $12,205 9/30/1999 $ 9,338 $12,265 $12,207 10/31/1999 $10,710 $12,579 $12,257 11/30/1999 $12,505 $13,909 $12,989 12/31/1999 $15,611 $16,360 $14,460 1/31/2000 $15,957 $16,208 $14,227 2/29/2000 $19,883 $19,979 $16,576 3/31/2000 $17,320 $17,879 $15,483 4/30/2000 $15,206 $16,074 $14,551 5/31/2000 $13,592 $14,666 $13,703 6/30/2000 $16,880 $16,561 $14,898 7/31/2000 $15,870 $15,142 $14,418 8/31/2000 $17,955 $16,734 $15,518 9/30/2000 $17,556 $15,903 $15,062 10/31/2000 $15,119 $14,612 $14,390 11/30/2000 $11,299 $11,959 $12,912 12/31/2000 $12,086 $12,691 $14,021 1/31/2001 $12,226 $13,718 $14,752 2/28/2001 $ 9,711 $11,838 $13,784 3/31/2001 $ 8,302 $10,761 $13,110 4/30/2001 $ 9,664 $12,079 $14,135 5/31/2001 $ 9,676 $12,359 $14,483 6/30/2001 $ 9,909 $12,696 $14,983 7/31/2001 $ 9,292 $11,613 $14,172 8/31/2001 $ 8,558 $10,887 $13,714 9/30/2001 $ 7,068 $ 9,131 $11,868 10/31/2001 $ 7,895 $10,009 $12,563 11/30/2001 $ 8,500 $10,845 $13,535 12/31/2001 $ 9,140 $11,520 $14,370 1/31/2002 $ 8,686 $11,110 $14,221 2/28/2002 $ 7,918 $10,391 $13,831 3/31/2002 $ 8,593 $11,294 $14,943 4/30/2002 $ 8,197 $11,050 $15,079 5/31/2002 $ 7,708 $10,404 $14,410 6/30/2002 $ 7,045 $ 9,521 $13,695 7/31/2002 $ 5,717 $ 8,058 $11,627 8/31/2002 $ 5,694 $ 8,054 $11,598 9/30/2002 $ 5,228 $ 7,472 $10,765 10/31/2002 $ 5,636 $ 7,850 $11,111 11/30/2002 $ 6,055 $ 8,629 $12,102 12/31/2002 $ 5,647 $ 8,034 $11,428 1/31/2003 $ 5,414 $ 7,815 $11,111 2/28/2003 $ 5,310 $ 7,607 $10,776 3/31/2003 $ 5,333 $ 7,722 $10,915 4/30/2003 $ 5,880 $ 8,453 $11,949 5/31/2003 $ 6,369 $ 9,406 $13,232 6/30/2003 $ 6,602 $ 9,587 $13,471 7/31/2003 $ 6,916 $10,312 $14,314 8/31/2003 $ 7,242 $10,865 $14,970 9/30/2003 $ 7,021 $10,590 $14,693 10/31/2003 $ 7,720 $11,505 $15,927 11/30/2003 $ 7,964 $11,880 $16,493 12/31/2003 $ 8,034 $11,933 $16,827 1/31/2004 $ 8,488 $12,560 $17,558 2/29/2004 $ 8,500 $12,541 $17,716 3/31/2004 $ 8,733 $12,600 $17,880 4/30/2004 $ 8,325 $11,967 $16,969 5/31/2004 $ 8,640 $12,205 $17,238 6/30/2004 $ 8,768 $12,611 $17,964 7/31/2004 $ 7,778 $11,479 $16,754 8/31/2004 $ 7,452 $11,232 $16,668 9/30/2004 $ 7,941 $11,853 $17,451 10/31/2004 $ 8,186 $12,141 $17,794 11/30/2004 $ 8,570 $13,167 $19,338 12/31/2004 $ 9,140 $13,641 $19,910 1/31/2005 $ 8,745 $13,026 $19,080 2/28/2005 $ 8,616 $13,205 $19,402 3/31/2005 $ 8,442 $12,710 $18,848 4/30/2005 $ 7,964 $11,901 $17,768 5/31/2005 $ 8,477 $12,740 $18,931 6/30/2005 $ 8,849 $13,152 $19,662 7/31/2005 $ 9,455 $14,071 $20,909 8/31/2005 $ 9,373 $13,873 $20,522 9/30/2005 $ 9,490 $13,983 $20,585 10/31/2005 $ 9,234 $13,466 $19,945 11/30/2005 $ 9,851 $14,228 $20,913 12/31/2005 $ 9,711 $14,207 $20,816 1/31/2006 $10,445 $15,578 $22,684 2/28/2006 $10,736 $15,495 $22,620 3/31/2006 $11,364 $16,248 $23,717 4/30/2006 $11,644 $16,201 $23,712 5/31/2006 $11,003 $15,061 $22,380 6/30/2006 $10,875 $15,070 $22,523 7/31/2006 $10,269 $14,288 $21,791 8/31/2006 $10,652 $14,706 $22,436 9/30/2006 $10,700 $14,806 $22,622 10/31/2006 $11,430 $15,766 $23,925 11/30/2006 $11,813 $16,142 $24,555 12/31/2006 $11,921 $16,104 $24,636 - -------------------------------------------------------------------------------- PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. The views expressed are as of December 31, 2006, 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 ADVANTAGE VT SMALL CAP GROWTH FUND. 1 The Fund's adviser has committed through April 30, 2007, 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. Prior to May 1, 2006, the WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND was named the Wells Fargo Advantage Small Cap Growth Fund and prior to April 11, 2005, was named Wells Fargo Small Cap Growth Fund. Performance shown for the Fund for periods prior to September 20, 1999, reflects performance of the Norwest Small Company Stock Fund, its predecessor fund. 2 The Russell 2000(R) Growth Index measures the performance shown of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. The Fund has selected the Russell 2000(R) Growth Index to replace the Russell 2000(R) Index as its benchmark index going forward because the Russell 2000(R) Growth Index is more representative of the breadth of the Fund's holdings. You cannot invest directly in an Index. 3 The Russell 2000(R) Index measures the performance of the 2,000 smallest companies in the Russell 3000(R) Index, which represents approximately 8% of the total market capitalization of the Russell 3000(R) Index. You cannot invest directly in an Index. 4 Fund characteristics, equity holdings and sector distribution and are subject to change. Cash and cash equivalents are not reflected in the calculations of fund characteristics, equity holdings and sector distribution. 5 The ten largest equity holdings are calculated based on the market value of the securities divided by total market value of the fund. 6 The chart compares the performance of the WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND for the most recent ten years with Russell 2000(R) Growth Index and the Russell 2000(R) Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 21 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND (the Fund) seeks long-term capital appreciation. ADVISER SUBADVISER Wells Fargo Funds Management, LLC Wells Capital Management Incorporated FUND MANAGER FUND INCEPTION DATE I. Charles Rinaldi 10/10/1997 HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD? - -------------------------------------------------------------------------------- The Fund returned 15.29% 1 for the 12-month period that ended December 31, 2006, underperforming its benchmark, the Russell 2500(TM) Value Index 2, which returned 20.18%. In addition, the Fund underperformed the Russell 3000(R) Value Index 3, which returned 22.34% and it underperformed the S&P 500 Index 4, which returned 15.78% during the same period. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. IF THEY DID, RETURNS WOULD BE LOWER. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE? - -------------------------------------------------------------------------------- The equity markets continued to show strength as 2006 came to a close. The year was marked by double-digit earnings growth and a boom in merger and acquisition activity. The Fund had solid performance for the period even though it underperformed its benchmark. From a sector perspective, the Fund's overweighted position in energy stocks detracted from performance, especially in June and July when the sector experienced a substantial correction and energy prices fell. The Fund's exposure in financials was largely in the insurance and specialty finance area. Performance for these areas for the year was tepid at best. Our underweighted position in financials was negative due to the strength of REITs. Although financials did not outperform across the board, certain groups, most notably REITs, notched big gains during the year. By not participating in REITs, which comprise 12% of the Fund's benchmark, the Fund missed more than 3.5% of returns. We tended to avoid REITs because valuation in the group was high, yield was down, and the risk-reward profile was not favorable in our view. The few REITs that the Fund owned during the period met our criteria for balancing risk with potential reward. The Fund's technology holdings were the biggest contributor to the Fund's relative performance. MRV Communications, an equipment and services provider, was up 70% by the end of the period. Our investments in technology were highly specific and did not represent an overall positive view for the sector. Stock selection was the reason for the relative outperformance. Solid stock selection in health care also contributed positively to the Fund's relative performance. While neither technology nor health care were stellar sectors for the period, stocks that we selected for the Fund performed well. WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD? - -------------------------------------------------------------------------------- The energy sector was volatile during the period, and we reduced the Fund's weighting by taking profits in some of the long-term energy holdings. Although we are positive toward energy over the long term, it was prudent for us to trim given the size of the Fund's overweighted position. We also reduced the Fund's materials exposure while adding to technology and health care as opportunities arose. LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK? - -------------------------------------------------------------------------------- We are cautious about the market in the near term and believe that the housing sector remains a risk to the maturing economic expansion. Given our emphasis on bottom-up investment research, our outlook might be less relevant to our positioning because the fundamentals of each of the Fund's holdings will continue to guide our portfolio construction. While we factor in the macroeconomic backdrop, we have a large number of companies open to us for investment, and when we combine that with our flexible investment process, we remain confident that the Fund is well-positioned for potential solid returns. STOCK FUNDS SHOULD ONLY BE CONSIDERED FOR LONG-TERM GOALS AS VALUES FLUCTUATE IN RESPONSE TO THE ACTIVITIES OF INDIVIDUAL COMPANIES AND GENERAL MARKET AND ECONOMIC CONDITIONS. FUNDS THAT INVEST IN SMALLER COMPANIES INVOLVE ADDITIONAL RISKS BECAUSE THESE COMPANIES OFTEN HAVE LIMITED FINANCIAL RESOURCES, AND THEIR STOCKS TEND TO BE MOVE VOLATILE AND LESS LIQUID THAN THOSE OF LARGER COMPANIES. THE FUND'S INVESTMENT PROCESS MAY, AT TIMES, RESULT IN HIGHER THAN AVERAGE PORTFOLIO TURNOVER AND INCREASED TRADING EXPENSES. INVESTMENT STRATEGIES THAT EMPHASIZE PARTICULAR MARKET SEGMENTS OR FEWER SECURITIES TEND TO INCREASE THE TOTAL RISK OF AN INVESTMENT (RELATIVE TO THE BROADER MARKET). THIS FUND IS EXPOSED TO INVESTMENT RISK. CONSULT THE FUND'S PROSPECTUS FOR ADDITIONAL INFORMATION ON THESE AND OTHER RISKS. - -------------------------------------------------------------------------------- PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. The views expressed are as of December 31, 2006, 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 ADVANTAGE VT SMALL/MID CAP VALUE FUND. 1 The Fund's adviser has committed through April 30, 2007, to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's return would have been lower. Prior to May 1, 2006, the WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND was named the Wells Fargo Advantage Multi Cap Value Fund. Performance for the Fund prior to April 11, 2005, reflects the performance of the Strong Multi Cap Value Fund II, its predecessor fund. 22 PERFORMANCE HIGHLIGHTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- 6-Months* 1-Year 5-Year Life of Fund - ----------------------------------------------------------------------------------------------------- VT Small/Mid Cap Value Fund (Incept. Date 10/10/1997) 6.69 15.29 10.77 6.85 - ----------------------------------------------------------------------------------------------------- Benchmarks - ----------------------------------------------------------------------------------------------------- Russell 2500(TM) Value Index 2 11.62 20.18 15.51 11.55 - ----------------------------------------------------------------------------------------------------- Russell 3000(R) Value Index 3 14.45 22.34 11.20 8.74 - ----------------------------------------------------------------------------------------------------- S&P 500 Index 4 12.73 15.78 6.19 5.89 - ----------------------------------------------------------------------------------------------------- * RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. FUND CHARACTERISTICS 5 (AS OF DECEMBER 31, 2006) - ------------------------------------------------------------------------------- Beta** 1.27 - ------------------------------------------------------------------------------- Price to Earnings (trailing 12 months) 18.01 - ------------------------------------------------------------------------------- Price to Book Ratio 2.08 - ------------------------------------------------------------------------------- Median Market Cap. ($B) $ 0.68 - ------------------------------------------------------------------------------- Portfolio Turnover 81% - ------------------------------------------------------------------------------- Net Asset Value (NAV) $13.22 ** A MEASURE OF THE FUND'S SENSITIVITY TO MARKET MOVEMENTS. THE RUSSELL 2500(TM) VALUE INDEX BETA IS 1.00 BY DEFINITION. SECTOR DISTRIBUTION 5 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Consumer Discretionary (9%) Energy (21%) Financials (11%) Health Care (12%) Industrials (13%) Information Technology (20%) Materials (13%) Telecommunications Service (1%) TEN LARGEST EQUITY HOLDINGS 5,6 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- Encorium Group Incorporated 3.96% - -------------------------------------------------------------------------------- Global Industries Limited 3.92% - -------------------------------------------------------------------------------- 3Com Corporation 2.42% - -------------------------------------------------------------------------------- Randgold Resources Limited ADR 2.42% - -------------------------------------------------------------------------------- Intermec Incorporated 2.11% - -------------------------------------------------------------------------------- MRV Communications Incorporated 1.99% - -------------------------------------------------------------------------------- Newpark Resources Incorporated 1.73% - -------------------------------------------------------------------------------- Apex Silver Mines Limited 1.61% - -------------------------------------------------------------------------------- Hill International Incorporated 1.56% - -------------------------------------------------------------------------------- CV Therapeutics Incorporated 1.52% GROWTH OF $10,000 INVESTMENT 7 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] WELLS FARGO ADVANTAGE VT SMALL/MID CAP Russell 2500(TM) Russell 3000(R) VALUE FUND Value Index Value Index S&P 500 Index 10/10/1997 $10,000 $10,000 $10,000 $10,000 10/31/1997 $ 9,580 $ 9,536 $ 9,505 $ 9,464 11/30/1997 $ 9,670 $ 9,740 $ 9,894 $ 9,902 12/31/1997 $ 9,919 $10,105 $10,187 $10,071 1/31/1998 $ 9,578 $ 9,932 $10,039 $10,183 2/28/1998 $10,240 $10,548 $10,708 $10,917 3/31/1998 $10,720 $11,069 $11,341 $11,475 4/30/1998 $10,640 $11,062 $11,415 $11,591 5/31/1998 $10,220 $10,714 $11,224 $11,392 6/30/1998 $10,005 $10,673 $11,348 $11,854 7/31/1998 $ 9,663 $ 9,991 $11,086 $11,728 8/31/1998 $ 7,667 $ 8,422 $ 9,429 $10,034 9/30/1998 $ 7,817 $ 8,915 $ 9,970 $10,677 10/31/1998 $ 8,720 $ 9,312 $10,702 $11,545 11/30/1998 $ 9,663 $ 9,613 $11,184 $12,244 12/31/1998 $10,135 $ 9,910 $11,562 $12,949 1/31/1999 $10,085 $ 9,625 $11,627 $13,491 2/28/1999 $ 9,803 $ 9,132 $11,414 $13,072 3/31/1999 $10,177 $ 9,117 $11,627 $13,594 4/30/1999 $11,141 $10,018 $12,711 $14,121 5/31/1999 $11,016 $10,222 $12,608 $13,788 6/30/1999 $11,016 $10,578 $12,981 $14,552 7/31/1999 $10,467 $10,376 $12,606 $14,099 8/31/1999 $ 9,990 $ 9,978 $12,139 $14,029 9/30/1999 $ 9,203 $ 9,664 $11,728 $13,645 10/31/1999 $ 9,607 $ 9,673 $12,337 $14,508 11/30/1999 $ 9,773 $ 9,727 $12,251 $14,803 12/31/1999 $ 9,844 $10,058 $12,331 $15,674 1/31/2000 $ 9,434 $ 9,639 $11,934 $14,887 2/29/2000 $ 8,884 $ 9,806 $11,157 $14,605 3/31/2000 $10,093 $10,528 $12,419 $16,033 4/30/2000 $10,395 $10,524 $12,289 $15,551 5/31/2000 $10,438 $10,505 $12,397 $15,233 6/30/2000 $ 9,844 $10,465 $11,893 $15,608 7/31/2000 $10,006 $10,692 $12,058 $15,364 8/31/2000 $10,578 $11,253 $12,720 $16,318 9/30/2000 $10,708 $11,186 $12,824 $15,457 10/31/2000 $10,881 $11,179 $13,116 $15,391 11/30/2000 $10,125 $11,037 $12,643 $14,179 12/31/2000 $10,615 $12,149 $13,322 $14,248 1/31/2001 $11,276 $12,319 $13,395 $14,754 2/28/2001 $10,972 $12,216 $13,046 $13,409 3/31/2001 $10,636 $11,910 $12,602 $12,560 4/30/2001 $11,417 $12,587 $13,218 $13,535 5/31/2001 $11,612 $12,974 $13,518 $13,626 6/30/2001 $11,168 $13,098 $13,277 $13,295 7/31/2001 $11,352 $13,011 $13,230 $13,164 8/31/2001 $10,875 $12,899 $12,733 $12,341 9/30/2001 $ 9,628 $11,467 $11,801 $11,344 10/31/2001 $ 9,856 $11,713 $11,727 $11,561 11/30/2001 $10,430 $12,615 $12,420 $12,447 12/31/2001 $11,052 $13,333 $12,745 $12,556 1/31/2002 $10,684 $13,455 $12,666 $12,373 2/28/2002 $10,792 $13,623 $12,691 $12,134 3/31/2002 $11,627 $14,467 $13,317 $12,591 4/30/2002 $11,519 $14,714 $12,931 $11,828 5/31/2002 $11,291 $14,472 $12,956 $11,741 6/30/2002 $10,445 $13,962 $12,248 $10,905 7/31/2002 $ 8,579 $12,346 $11,059 $10,055 8/31/2002 $ 8,905 $12,412 $11,133 $10,121 9/30/2002 $ 7,896 $11,396 $ 9,926 $ 9,022 10/31/2002 $ 8,037 $11,560 $10,619 $ 9,815 11/30/2002 $ 8,601 $12,403 $11,300 $10,392 12/31/2002 $ 8,493 $12,016 $10,810 $ 9,782 1/31/2003 $ 8,190 $11,653 $10,546 $ 9,526 2/28/2003 $ 8,038 $11,367 $10,259 $ 9,383 3/31/2003 $ 7,864 $11,443 $10,283 $ 9,474 4/30/2003 $ 8,365 $12,480 $11,193 $10,254 5/31/2003 $ 9,495 $13,634 $11,944 $10,794 6/30/2003 $ 9,506 $13,879 $12,098 $10,932 7/31/2003 $ 9,867 $14,481 $12,308 $11,125 8/31/2003 $10,345 $15,064 $12,520 $11,341 9/30/2003 $10,170 $14,958 $12,397 $11,221 10/31/2003 $10,508 $16,100 $13,174 $11,856 11/30/2003 $10,893 $16,756 $13,378 $11,960 12/31/2003 $11,754 $17,415 $14,176 $12,587 1/31/2004 $12,022 $17,979 $14,444 $12,818 2/29/2004 $12,325 $18,344 $14,751 $12,996 3/31/2004 $12,278 $18,491 $14,648 $12,800 4/30/2004 $11,404 $17,523 $14,258 $12,599 5/31/2004 $11,485 $17,875 $14,406 $12,772 6/30/2004 $12,057 $18,585 $14,776 $13,020 7/31/2004 $11,555 $17,837 $14,528 $12,589 8/31/2004 $11,345 $18,061 $14,730 $12,639 9/30/2004 $12,103 $18,631 $14,987 $12,776 10/31/2004 $11,905 $18,968 $15,235 $12,971 11/30/2004 $13,351 $20,519 $16,054 $13,496 12/31/2004 $13,724 $21,172 $16,578 $13,955 1/31/2005 $13,409 $20,491 $16,254 $13,615 2/28/2005 $14,260 $21,003 $16,774 $13,901 3/31/2005 $13,496 $20,722 $16,534 $13,656 4/30/2005 $12,606 $19,948 $16,191 $13,397 5/31/2005 $13,109 $21,055 $16,630 $13,823 6/30/2005 $14,011 $21,826 $16,858 $13,842 7/31/2005 $14,994 $22,995 $17,388 $14,357 8/31/2005 $15,427 $22,577 $17,283 $14,226 9/30/2005 $16,036 $22,602 $17,501 $14,341 10/31/2005 $15,240 $21,935 $17,057 $14,102 11/30/2005 $15,755 $22,834 $17,627 $14,635 12/31/2005 $15,989 $22,811 $17,714 $14,640 1/31/2006 $17,569 $24,312 $18,470 $15,028 2/28/2006 $16,960 $24,344 $18,572 $15,068 3/31/2006 $17,791 $25,198 $18,882 $15,256 4/30/2006 $18,248 $25,298 $19,322 $15,461 5/31/2006 $17,405 $24,422 $18,805 $15,016 6/30/2006 $17,276 $24,560 $18,935 $15,036 7/31/2006 $16,843 $24,218 $19,327 $15,129 8/31/2006 $17,248 $24,863 $19,673 $15,488 9/30/2006 $16,997 $25,116 $20,047 $15,887 10/31/2006 $17,708 $26,294 $20,737 $16,404 11/30/2006 $18,196 $27,117 $21,220 $16,716 12/31/2006 $18,433 $27,415 $21,670 $16,950 - -------------------------------------------------------------------------------- 2 The Russell 2500(TM) Value Index measures the performance of those Russell 2500 companies with lower price-to-book ratios and lower forecasted growth values. The Fund has selected the Russell 2500(TM) Value Index to replace the Russell 3000(R) Value Index and the S&P 500 Index as its benchmark index going forward because the Russell 2500(TM) Value Index is more representative of the breadth of the Fund's holdings. You cannot invest directly in an Index. 3 The Russell 3000(R) Value Index measures the performance of those Russell 3000(R) Index companies with lower price-to-book ratios and lower forecasted growth values. The stocks in this Index are also members of either the Russell 1000(R) Value or the Russell 2000(R) Value Indices. You cannot invest directly in an Index. 4 The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index with each stock's weight in the Index proportionate to its market value. You cannot invest directly in an Index. 5 Fund characteristics, equity holdings and sector distribution are subject to change. Cash and cash equivalents are not reflected in the calculations of fund characteristics, equity holdings and sector distribution. 6 The ten largest equity holdings are calculated based on the market value of the securities divided by total market value of the portfolio. 7 The chart compares the performance of the WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND for the life of the Fund with the Russell 2500(TM) Value Index, the Russell 3000(R) Value Index, and the S&P 500 Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 23 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PERFORMANCE HIGHLIGHTS - -------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND INVESTMENT OBJECTIVE - -------------------------------------------------------------------------------- The WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND (the Fund) seeks total return consisting of income and capital appreciation. ADVISER SUBADVISER Wells Fargo Funds Management, LLC Wells Capital Management Incorporated FUND MANAGERS FUND INCEPTION DATE Marie Chandoha 09/20/1999 Thomas O'Connor, CFA William Stevens HOW DID THE FUND PERFORM OVER THE 12-MONTH REPORTING PERIOD? - -------------------------------------------------------------------------------- The Fund returned 3.92% 1 for the 12-month period that ended December 31, 2006, underperforming its benchmark, the Lehman Brothers U.S. Aggregate Bond Index 2 which returned 4.33%, during the same period. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. IF THEY DID, RETURNS WOULD BE LOWER. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE? - -------------------------------------------------------------------------------- Security selection dominated the Fund's relative underperformance along with duration and corporate sector positioning. Specific corporate bond holdings that detracted from performance included Harrah's, Boston Scientific, Chemtura, Teva Pharmaceutical, and Canadian energy producer Encana. The Fund's overall overweighting to Collateralized Mortgage Obligations (CMO) also detracted from performance, though we were able to offset some of the decline with relative value trading in CMOs. Corporate securities that contributed positively to performance included Lazard, Hess Corporation, Ford, Residential Capital, and Time Warner. The Fund's overweighted position in REITs also benefited the portfolio because strong fundamentals and the inclusion of bond covenants in most REIT bonds created a safe haven from overleveraging on balance sheets. Commercial Mortgage-Backed Securities (CMBS) claimed the top performing sector spot for the benchmark during the year. CMBS was also the Fund's top overweighted position, which helped performance. Relative value trading in CMO, pass-throughs, and CMBS contributed to performance. We also took advantage of volatility in the Ginnie Mae sector through well-timed overweighted and underweighted positioning throughout the period. WHAT CHANGES DID YOU MAKE TO THE FUND'S HOLDINGS DURING THE PERIOD? - -------------------------------------------------------------------------------- In the corporate bond market, we significantly reduced the Fund's holdings in the energy sector early in 2006. Energy had been one of the Fund's largest overweighted positions and one of the strongest performers in 2005. Our decision to reduce the position was timely because the energy sector was one of the worst performers in 2006. We added exposure to cable/media and telecommunications earlier in 2006, but we later reduced that exposure because credit spreads tightened. We added to sectors that we believed had lower leveraged buyout risk, notably REITs, insurance, banks, and brokers. In the mortgage sector, we made several trades to take advantage of dislocations in subsectors of the market; this included well-timed trades in and out of the Ginnie Mae market's 30-year 6% and 6.5% coupons in the first quarter of 2006 and seasoned 15-year mortgages in the fourth quarter. We increased the Fund's exposure to CMBS issued in 2004 and prior. The collateral behind these older issues was more conservatively underwritten than some of the newer CMBS. An increasing number of the loans in CMBS are being defeased, which means as the loans are paid-off by the underlying borrowers they are replaced with Government securities by the issuer. LOOKING AHEAD, WHAT IS YOUR STRATEGIC OUTLOOK? - -------------------------------------------------------------------------------- We believe that the surprise for the market in 2007 may be the resilience of the U.S. economy. The futures market is still predicting that the Fed will cut the Federal funds rate at least one time in 2007, in anticipation that the housing market will drag down the economy. So far, that does not seem to be happening. Even though the housing slump has had negative impact on the Gross Domestic Product (GDP) growth rate, the rest of the economy is solid, and several factors, including commercial and public construction, the lagged effect of the dollar decline, and a strong stock market, seem to have offset the negative effect of the soft residential market. In addition, the persistently tight labor market is putting pressure on labor costs. We believe that the rise in average hourly earnings is a concern to the Fed because overall inflation remains above the Fed's comfort zone. Consequently, we think that the Fed is more likely to raise the Federal funds rate than leave it as is or decrease it. We also think that the 10-year Treasury rates are likely to bounce around between 4.40% and 4.90% for a while and that the Fed may be in a holding pattern for longer than the market expects. BOND FUND VALUES FLUCTUATE IN RESPONSE TO THE FINANCIAL CONDITION OF INDIVIDUAL ISSUERS, GENERAL MARKET AND ECONOMIC CONDITIONS, AND CHANGES IN INTEREST RATES. IN GENERAL, WHEN INTEREST RATES RISE, BOND FUND VALUES FALL AND INVESTORS CAN LOSE PRINCIPAL VALUE. THE FUND'S INVESTMENT PROCESS MAY, AT TIMES, RESULT IN HIGHER THAN AVERAGE PORTFOLIO TURNOVER AND INCREASED TRADING EXPENSES. INVESTMENT STRATEGIES THAT EMPHASIZE PARTICULAR MARKET SEGMENTS OR FEWER SECURITIES TEND TO INCREASE THE TOTAL RISK OF AN INVESTMENT (RELATIVE TO THE BROADER MARKET). THIS FUND IS EXPOSED TO FOREIGN INVESTMENT RISK. CONSULT THE FUND'S PROSPECTUS FOR ADDITIONAL INFORMATION ON THESE AND OTHER RISKS. 24 PERFORMANCE HIGHLIGHTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- 6-Months* 1-Year 5-Year Life of Fund - --------------------------------------------------------------------------------------------------- VT Total Return Bond Fund (Incept. Date 09/20/1999) 4.85 3.92 5.24 5.99 - --------------------------------------------------------------------------------------------------- Benchmark - --------------------------------------------------------------------------------------------------- Lehman Brothers U.S. Aggregate Bond Index 2 5.09 4.33 5.06 6.22 - --------------------------------------------------------------------------------------------------- * RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. FUND CHARACTERISTICS 3 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- Average Credit Quality 4 Aa1 - -------------------------------------------------------------------------------- Weighted Average Coupon 5.37% - -------------------------------------------------------------------------------- Weighted Average Maturity 6.35 years - -------------------------------------------------------------------------------- Average Duration 4.45 years - -------------------------------------------------------------------------------- Portfolio Turnover 662% - -------------------------------------------------------------------------------- Distribution Rate 5 4.43% - -------------------------------------------------------------------------------- 30-Day SEC Yield 6 4.34% - -------------------------------------------------------------------------------- Net Asset Value (NAV) $ 9.81 SECTOR DISTRIBUTION 3 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] ABS/CMBS 8 (16%) MBS 9 (32%) Corporate Bonds & Notes (19%) U.S. Treasury Securities (14%) CMO 10 (19%) GROWTH OF $10,000 INVESTMENT 7 (AS OF DECEMBER 31, 2006) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] WELLS FARGO ADVANTAGE VT Lehman Brothers U.S. Aggregate TOTAL RETURN BOND FUND Bond Index 9/20/1999 $10,000 $10,000 9/30/1999 $10,015 $10,028 10/31/1999 $10,070 $10,065 11/30/1999 $10,040 $10,064 12/31/1999 $ 9,994 $10,016 1/31/2000 $ 9,968 $ 9,983 2/29/2000 $10,092 $10,104 3/31/2000 $10,262 $10,237 4/30/2000 $10,069 $10,208 5/31/2000 $10,021 $10,203 6/30/2000 $10,254 $10,415 7/31/2000 $10,352 $10,510 8/31/2000 $10,526 $10,662 9/30/2000 $10,550 $10,730 10/31/2000 $10,597 $10,800 11/30/2000 $10,740 $10,978 12/31/2000 $11,015 $11,182 1/31/2001 $11,214 $11,365 2/28/2001 $11,354 $11,464 3/31/2001 $11,381 $11,521 4/30/2001 $11,285 $11,473 5/31/2001 $11,357 $11,542 6/30/2001 $11,361 $11,586 7/31/2001 $11,658 $11,845 8/31/2001 $11,799 $11,981 9/30/2001 $11,698 $12,122 10/31/2001 $11,999 $12,375 11/30/2001 $11,944 $12,204 12/31/2001 $11,831 $12,126 1/31/2002 $11,892 $12,224 2/28/2002 $11,960 $12,343 3/31/2002 $11,831 $12,138 4/30/2002 $12,033 $12,373 5/31/2002 $12,145 $12,479 6/30/2002 $12,097 $12,586 7/31/2002 $12,018 $12,738 8/31/2002 $12,259 $12,953 9/30/2002 $12,425 $13,163 10/31/2002 $12,303 $13,103 11/30/2002 $12,468 $13,099 12/31/2002 $12,748 $13,370 1/31/2003 $12,793 $13,381 2/28/2003 $13,022 $13,566 3/31/2003 $13,094 $13,555 4/30/2003 $13,401 $13,667 5/31/2003 $13,723 $13,921 6/30/2003 $13,734 $13,893 7/31/2003 $13,284 $13,427 8/31/2003 $13,410 $13,515 9/30/2003 $13,789 $13,873 10/31/2003 $13,656 $13,744 11/30/2003 $13,677 $13,777 12/31/2003 $13,819 $13,918 1/31/2004 $13,935 $14,029 2/29/2004 $14,087 $14,181 3/31/2004 $14,186 $14,287 4/30/2004 $13,842 $13,916 5/31/2004 $13,790 $13,860 6/30/2004 $13,856 $13,939 7/31/2004 $13,995 $14,077 8/31/2004 $14,248 $14,346 9/30/2004 $14,288 $14,384 10/31/2004 $14,400 $14,505 11/30/2004 $14,284 $14,389 12/31/2004 $14,426 $14,522 1/31/2005 $14,510 $14,613 2/28/2005 $14,436 $14,527 3/31/2005 $14,337 $14,453 4/30/2005 $14,523 $14,648 5/31/2005 $14,682 $14,806 6/30/2005 $14,756 $14,888 7/31/2005 $14,616 $14,752 8/31/2005 $14,793 $14,941 9/30/2005 $14,631 $14,787 10/31/2005 $14,516 $14,670 11/30/2005 $14,563 $14,735 12/31/2005 $14,700 $14,875 1/31/2006 $14,688 $14,876 2/28/2006 $14,735 $14,925 3/31/2006 $14,592 $14,779 4/30/2006 $14,568 $14,753 5/31/2006 $14,546 $14,736 6/30/2006 $14,570 $14,767 7/31/2006 $14,762 $14,967 8/31/2006 $14,971 $15,196 9/30/2006 $15,104 $15,329 10/31/2006 $15,193 $15,431 11/30/2006 $15,374 $15,610 12/31/2006 $15,261 $15,519 - -------------------------------------------------------------------------------- PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. The views expressed are as of December 31, 2006, 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 ADVANTAGE VT TOTAL RETURN BOND FUND. 1 The Fund's adviser has committed through April 30, 2007, to waive fees and/or reimburse expenses to the extent necessary to maintain a certain net operating expense ratio for the Fund. Actual reductions of operating expenses can increase total return to shareholders. Without these reductions, the Fund's return would have been lower. Prior to May 1, 2006, the WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND was named the Wells Fargo Advantage Total Return Bond Fund and prior to April 11, 2005, was named the Wells Fargo Total Return Bond Fund. Effective May 1, 2003, the Fund was renamed the Wells Fargo Variable Trust Total Return Bond Fund and the investment policies of the Fund changed. The performance shown reflects the investment policies in effect as of the date indicated. 2 The Lehman Brothers U.S. Aggregate Bond Index is composed of the Lehman Brothers Government/Credit Index and the Mortgage-Backed Securities Index and includes U.S. Treasury issues, agency issues, corporate bond issues, and mortgage-backed securities. You cannot invest directly in an Index. 3 Fund characteristics and sector distribution are subject to change. Cash and cash equivalents are not reflected in the calculations of fund characteristics and sector distribution. 4 The average credit quality is compiled from the ratings of Standard & Poor's and/or Moody's Investors Service (together "rating agencies"). Standard & Poor's is a trademark of McGraw-Hill, Inc., and has been licensed. The Fund is not sponsored, sold or promoted by these rating agencies and these rating agencies make no representation regarding the advisability of investing in the Fund. 5 The 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 net asset value (NAV) price. 6 SEC yields include the actual interest earned in the last 30 days (adjusted by realized gain or loss from the return of principal, if any) less expenses, divided by average shares outstanding during that period and the maximum offering price of the last day of the period. The calculation includes net asset value (NAV) on the last day of the period. 7 The chart compares the performance of the WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND for the life of the Fund with the Lehman Brothers U.S. Aggregate Bond Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 8 ABS/CMBS -- Asset-Backed Securities/Commercial Mortgage-Backed Securities. 9 MBS -- Mortgage-Backed Securities. 10 CMO -- Collateralized Mortgage Obligations. 25 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS FUND EXPENSES (UNAUDITED) - -------------------------------------------------------------------------------- As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, redemption fees (if any) and exchange fees (if any); and (2) ongoing costs, including management fees; distribution (12b-1) and/or shareholder service fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2006 to December 31, 2006). ACTUAL EXPENSES The "Actual" line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Actual" line under the heading entitled "Expenses Paid During Period" for your applicable class of shares to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The "Hypothetical" line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any 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. Beginning Ending Account Account Expenses Net Annual Value Value Paid During Expense VT Asset Allocation Fund 07/01/2006 12/31/2006 the Period* Ratio - ---------------------------------------------------------------------------------------------------- Actual $ 1,000.00 $ 1,114.60 $ 5.33 1.00% - ---------------------------------------------------------------------------------------------------- Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.16 $ 5.09 1.00% VT C&B Large Cap Value Fund - ---------------------------------------------------------------------------------------------------- Actual $ 1,000.00 $ 1,156.30 $ 5.44 1.00% - ---------------------------------------------------------------------------------------------------- Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.16 $ 5.09 1.00% VT Discovery Fund - ---------------------------------------------------------------------------------------------------- Actual $ 1,000.00 $ 1,076.60 $ 6.02 1.15% - ---------------------------------------------------------------------------------------------------- Hypothetical (5% return before expenses) $ 1,000.00 $ 1,019.41 $ 5.85 1.15% VT Equity Income Fund - ---------------------------------------------------------------------------------------------------- Actual $ 1,000.00 $ 1,152.80 $ 5.43 1.00% - ---------------------------------------------------------------------------------------------------- Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.16 $ 5.09 1.00% VT International Core Fund - ---------------------------------------------------------------------------------------------------- Actual $ 1,000.00 $ 1,120.10 $ 5.34 1.00% - ---------------------------------------------------------------------------------------------------- Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.16 $ 5.09 1.00% VT Large Company Core Fund - ---------------------------------------------------------------------------------------------------- Actual $ 1,000.00 $ 1,181.80 $ 5.50 1.00% - ---------------------------------------------------------------------------------------------------- Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.16 $ 5.09 1.00% VT Large Company Growth Fund - ---------------------------------------------------------------------------------------------------- Actual $ 1,000.00 $ 1,099.80 $ 5.29 1.00% - ---------------------------------------------------------------------------------------------------- Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.16 $ 5.09 1.00% VT Money Market Fund - ---------------------------------------------------------------------------------------------------- Actual $ 1,000.00 $ 1,023.60 $ 3.83 0.75% - ---------------------------------------------------------------------------------------------------- Hypothetical (5% return before expenses) $ 1,000.00 $ 1,021.42 $ 3.82 0.75% 26 FUND EXPENSES (UNAUDITED) WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- Beginning Ending Account Account Expenses Net Annual Value Value Paid During Expense VT Opportunity Fund 07/01/2006 12/31/2006 the Period* Ratio - ---------------------------------------------------------------------------------------------------- Actual $ 1,000.00 $ 1,104.90 $ 5.68 1.07% - ---------------------------------------------------------------------------------------------------- Hypothetical (5% return before expenses) $ 1,000.00 $ 1,019.81 $ 5.45 1.07% VT Small Cap Growth Fund - ---------------------------------------------------------------------------------------------------- Actual $ 1,000.00 $ 1,096.10 $ 6.34 1.20% Hypothetical (5% return before expenses) $ 1,000.00 $ 1,019.16 $ 6.11 1.20% VT Small/Mid Cap Value Fund - ---------------------------------------------------------------------------------------------------- Actual $ 1,000.00 $ 1,066.90 $ 5.94 1.14% - ---------------------------------------------------------------------------------------------------- Hypothetical (5% return before expenses) $ 1,000.00 $ 1,019.46 $ 5.80 1.14% VT Total Return Bond Fund - ---------------------------------------------------------------------------------------------------- Actual $ 1,000.00 $ 1,048.50 $ 4.65 0.90% - ---------------------------------------------------------------------------------------------------- Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.67 $ 4.58 0.90% * Expenses are equal to the Fund's annualized expenses 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). 27 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCKS - 60.95% AMUSEMENT & RECREATION SERVICES - 0.15% 2,569 HARRAH'S ENTERTAINMENT INCORPORATED $ 212,508 4,687 INTERNATIONAL GAME TECHNOLOGY 216,539 429,047 --------------- APPAREL & ACCESSORY STORES - 0.26% 7,277 GAP INCORPORATED 141,902 4,516 KOHL'S CORPORATION+ 309,030 4,723 LIMITED BRANDS INCORPORATED<< 136,684 3,159 NORDSTROM INCORPORATED 155,865 743,481 --------------- APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS - 0.07% 1,522 JONES APPAREL GROUP INCORPORATED 50,880 1,415 LIZ CLAIBORNE INCORPORATED 61,496 1,234 VF CORPORATION 101,287 213,663 --------------- AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS - 0.04% 2,065 AUTONATION INCORPORATED+ 44,026 699 AUTOZONE INCORPORATED+<< 80,776 124,802 --------------- AUTOMOTIVE REPAIR, SERVICES & PARKING - 0.01% 838 RYDER SYSTEM INCORPORATED<< 42,788 --------------- BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS - 0.15% 1,639 CENTEX CORPORATION 92,227 3,811 D.R. HORTON INCORPORATED 100,953 1,084 KB HOME 55,588 1,904 LENNAR CORPORATION CLASS A 99,884 2,918 PULTE HOMES INCORPORATED 96,644 445,296 --------------- BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS - 0.65% 28,186 HOME DEPOT INCORPORATED 1,131,950 21,031 LOWE'S COMPANIES INCORPORATED 655,116 1,545 SHERWIN-WILLIAMS COMPANY 98,231 1,885,297 --------------- BUSINESS SERVICES - 3.80% 8,056 ADOBE SYSTEMS INCORPORATED+ 331,263 1,637 AFFILIATED COMPUTER SERVICES INCORPORATED CLASS A+ 79,951 3,199 AUTODESK INCORPORATED+ 129,432 7,604 AUTOMATIC DATA PROCESSING INCORPORATED 374,497 2,832 BMC SOFTWARE INCORPORATED+<< 91,190 5,672 CA INCORPORATED 128,471 2,494 CITRIX SYSTEMS INCORPORATED+ 67,463 1,958 COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION CLASS A+ 151,079 2,371 COMPUTER SCIENCES CORPORATION+ 126,540 28 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE BUSINESS SERVICES (CONTINUED) 4,864 COMPUWARE CORPORATION+ $ 40,517 1,903 CONVERGYS CORPORATION+ 45,253 15,980 eBAY INCORPORATED+ 480,519 4,260 ELECTRONIC ARTS INCORPORATED+ 214,534 7,143 ELECTRONIC DATA SYSTEMS CORPORATION 196,790 1,728 EQUIFAX INCORPORATED 70,157 2,235 FIDELITY NATIONAL INFORMATION SERVICES INCORPORATED 89,601 10,576 FIRST DATA CORPORATION 269,900 2,391 FISERV INCORPORATED+ 125,336 2,959 GOOGLE INCORPORATED CLASS A+ 1,362,560 2,740 IMS HEALTH INCORPORATED 75,295 6,093 INTERPUBLIC GROUP OF COMPANIES INCORPORATED+<< 74,578 4,815 INTUIT INCORPORATED+ 146,906 7,813 JUNIPER NETWORKS INCORPORATED+ 147,978 119,475 MICROSOFT CORPORATION 3,567,524 1,772 MONSTER WORLDWIDE INCORPORATED+ 82,646 2,461 NCR CORPORATION+ 105,232 4,682 NOVELL INCORPORATED+ 29,028 2,360 OMNICOM GROUP INCORPORATED 246,714 55,251 ORACLE CORPORATION+ 947,002 2,314 ROBERT HALF INTERNATIONAL INCORPORATED 85,896 48,608 SUN MICROSYSTEMS INCORPORATED+ 263,455 12,954 SYMANTEC CORPORATION+<< 270,091 4,758 UNISYS CORPORATION+ 37,303 3,385 VERISIGN INCORPORATED+ 81,409 16,907 YAHOO! INCORPORATED+ 431,805 10,967,915 --------------- CHEMICALS & ALLIED PRODUCTS - 5.78% 21,197 ABBOTT LABORATORIES 1,032,506 3,043 AIR PRODUCTS & CHEMICALS INCORPORATED 213,862 16,110 AMGEN INCORPORATED+ 1,100,474 1,303 AVERY DENNISON CORPORATION 88,513 6,139 AVON PRODUCTS INCORPORATED 202,833 1,469 BARR PHARMACEUTICALS INCORPORATED+ 73,626 4,656 BIOGEN IDEC INCORPORATED+ 229,029 27,162 BRISTOL-MYERS SQUIBB COMPANY 714,904 2,096 CLOROX COMPANY<< 134,458 7,103 COLGATE-PALMOLIVE COMPANY 463,400 13,192 DOW CHEMICAL COMPANY 526,888 12,703 E.I. DU PONT DE NEMOURS & COMPANY 618,763 1,136 EASTMAN CHEMICAL COMPANY 67,376 2,462 ECOLAB INCORPORATED 111,282 13,596 ELI LILLY & COMPANY 708,352 1,758 ESTEE LAUDER COMPANIES INCORPORATED CLASS A 71,762 4,374 FOREST LABORATORIES INCORPORATED+ 221,324 3,630 GENZYME CORPORATION+ 223,535 6,350 GILEAD SCIENCES INCORPORATED+ 412,306 29 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE CHEMICALS & ALLIED PRODUCTS (CONTINUED) 2,151 HOSPIRA INCORPORATED+ $ 72,231 1,077 INTERNATIONAL FLAVORS & FRAGRANCES INCORPORATED 52,945 3,357 KING PHARMACEUTICALS INCORPORATED+<< 53,443 3,303 MEDIMMUNE INCORPORATED+<< 106,918 29,983 MERCK & COMPANY INCORPORATED 1,307,259 7,503 MONSANTO COMPANY 394,133 2,926 MYLAN LABORATORIES INCORPORATED 58,403 99,583 PFIZER INCORPORATED 2,579,200 2,282 PPG INDUSTRIES INCORPORATED 146,527 4,459 PRAXAIR INCORPORATED 264,552 43,763 PROCTER & GAMBLE COMPANY 2,812,648 1,960 ROHM & HAAS COMPANY 100,195 20,475 SCHERING-PLOUGH CORPORATION 484,029 910 SIGMA-ALDRICH CORPORATION 70,725 18,599 WYETH 947,061 16,665,462 --------------- COAL MINING - 0.08% 2,522 CONSOL ENERGY INCORPORATED 81,032 3,643 PEABODY ENERGY CORPORATION 147,214 228,246 --------------- COMMUNICATIONS - 2.83% 5,160 ALLTEL CORPORATION 312,077 53,074 AT & T INCORPORATED 1,897,396 6,271 AVAYA INCORPORATED+ 87,669 25,192 BELLSOUTH CORPORATION<< 1,186,795 1,585 CENTURYTEL INCORPORATED 69,201 6,819 CLEAR CHANNEL COMMUNICATIONS INCORPORATED 242,347 28,742 COMCAST CORPORATION CLASS A+<< 1,216,649 10,646 DIRECTV GROUP INCORPORATED+ 265,511 2,065 EMBARQ CORPORATION 108,536 3,082 IAC INTERACTIVECORP+<< 114,527 22,209 QWEST COMMUNICATIONS INTERNATIONAL INCORPORATED+ 185,889 39,982 SPRINT NEXTEL CORPORATION 755,260 3,484 UNIVISION COMMUNICATIONS INCORPORATED CLASS A+ 123,403 40,321 VERIZON COMMUNICATIONS INCORPORATED 1,501,554 6,584 WINDSTREAM CORPORATION 93,624 8,160,438 --------------- DEPOSITORY INSTITUTIONS - 6.53% 62,020 BANK OF AMERICA CORPORATION 3,311,248 10,554 BANK OF NEW YORK COMPANY INCORPORATED 415,511 7,470 BB&T CORPORATION 328,157 67,862 CITIGROUP INCORPORATED 3,779,913 2,193 COMERICA INCORPORATED<< 128,685 2,590 COMMERCE BANCORP INCORPORATED 91,349 1,793 COMPASS BANCSHARES INCORPORATED 106,952 7,707 FIFTH THIRD BANCORP 315,448 30 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE DEPOSITORY INSTITUTIONS (CONTINUED) 1,719 FIRST HORIZON NATIONAL CORPORATION $ 71,820 3,281 HUNTINGTON BANCSHARES INCORPORATED<< 77,924 47,909 JPMORGAN CHASE & COMPANY 2,314,005 5,546 KEYCORP 210,914 1,069 M&T BANK CORPORATION 130,589 3,523 MARSHALL & ILSLEY CORPORATION 169,492 5,688 MELLON FINANCIAL CORPORATION<< 239,749 8,722 NATIONAL CITY CORPORATION 318,876 2,589 NORTHERN TRUST CORPORATION 157,126 4,057 PNC FINANCIAL SERVICES GROUP 300,380 10,070 REGIONS FINANCIAL CORPORATION 376,618 4,963 SOVEREIGN BANCORP INCORPORATED 126,011 4,586 STATE STREET CORPORATION 309,280 4,891 SUNTRUST BANKS INCORPORATED 413,045 4,488 SYNOVUS FINANCIAL CORPORATION 138,365 24,277 US BANCORP 878,585 26,323 WACHOVIA CORPORATION 1,499,095 13,055 WASHINGTON MUTUAL INCORPORATED<< 593,872 46,625 WELLS FARGO & COMPANY++ 1,657,985 10,585 WESTERN UNION COMPANY 237,316 1,476 ZIONS BANCORPORATION 121,681 18,819,991 --------------- EATING & DRINKING PLACES - 0.38% 2,027 DARDEN RESTAURANTS INCORPORATED 81,425 17,080 MCDONALD'S CORPORATION 757,156 1,320 WENDY'S INTERNATIONAL INCORPORATED 43,679 3,660 YUM! BRANDS INCORPORATED 215,208 1,097,468 --------------- EDUCATIONAL SERVICES - 0.03% 1,932 APOLLO GROUP INCORPORATED CLASS A+ 75,290 --------------- ELECTRIC, GAS & SANITARY SERVICES - 2.48% 9,173 AES CORPORATION+ 202,173 2,282 ALLEGHENY ENERGY INCORPORATED+ 104,767 3,506 ALLIED WASTE INDUSTRIES INCORPORATED+<< 43,089 2,848 AMEREN CORPORATION 153,023 5,463 AMERICAN ELECTRIC POWER COMPANY INCORPORATED 232,615 4,320 CENTERPOINT ENERGY INCORPORATED<< 71,626 4,445 CITIZENS COMMUNICATIONS COMPANY 63,875 3,072 CMS ENERGY CORPORATION+<< 51,302 3,546 CONSOLIDATED EDISON INCORPORATED 170,456 2,486 CONSTELLATION ENERGY GROUP INCORPORATED 171,211 4,885 DOMINION RESOURCES INCORPORATED 409,558 2,457 DTE ENERGY COMPANY 118,943 17,342 DUKE ENERGY CORPORATION 575,928 5,228 DYNEGY INCORPORATED CLASS A+ 37,851 4,499 EDISON INTERNATIONAL 204,615 31 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE ELECTRIC, GAS & SANITARY SERVICES (CONTINUED) 9,742 EL PASO CORPORATION $ 148,858 2,856 ENTERGY CORPORATION 263,666 9,266 EXELON CORPORATION 573,473 4,408 FIRSTENERGY CORPORATION 265,406 5,583 FPL GROUP INCORPORATED 303,827 2,420 KEYSPAN CORPORATION 99,656 1,481 KINDER MORGAN INCORPORATED 156,616 617 NICOR INCORPORATED 28,876 3,770 NISOURCE INCORPORATED 90,857 531 PEOPLES ENERGY CORPORATION 23,667 4,817 PG&E CORPORATION 227,989 1,378 PINNACLE WEST CAPITAL CORPORATION 69,782 5,269 PPL CORPORATION 188,841 3,510 PROGRESS ENERGY INCORPORATED 172,271 3,483 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED 231,202 1,185 QUESTAR CORPORATION 98,414 3,620 SEMPRA ENERGY 202,611 10,257 SOUTHERN COMPANY<< 378,073 2,889 TECO ENERGY INCORPORATED 49,777 6,342 TXU CORPORATION 343,800 7,389 WASTE MANAGEMENT INCORPORATED 271,694 8,235 WILLIAMS COMPANIES INCORPORATED 215,098 5,619 XCEL ENERGY INCORPORATED<< 129,574 7,145,060 --------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 5.12% 1,619 ADC TELECOMMUNICATIONS INCORPORATED+ 23,524 7,576 ADVANCED MICRO DEVICES INCORPORATED+ 154,172 4,997 ALTERA CORPORATION+ 98,341 2,334 AMERICAN POWER CONVERSION CORPORATION 71,397 4,723 ANALOG DEVICES INCORPORATED 155,245 6,476 BROADCOM CORPORATION CLASS A+ 209,240 1,166 CIENA CORPORATION+ 32,310 83,870 CISCO SYSTEMS INCORPORATED+ 2,292,167 2,789 COMVERSE TECHNOLOGY INCORPORATED+<< 58,876 1,255 COOPER INDUSTRIES LIMITED CLASS A 113,490 11,081 EMERSON ELECTRIC COMPANY 488,340 142,364 GENERAL ELECTRIC COMPANY 5,297,364 901 HARMAN INTERNATIONAL INDUSTRIES INCORPORATED 90,019 79,633 INTEL CORPORATION 1,612,568 2,550 JABIL CIRCUIT INCORPORATED 62,603 2,915 JDS UNIPHASE CORPORATION+<< 48,564 2,749 KLA-TENCOR CORPORATION 136,763 1,725 L-3 COMMUNICATIONS HOLDINGS INCORPORATED 141,071 4,128 LINEAR TECHNOLOGY CORPORATION 125,161 5,532 LSI LOGIC CORPORATION+ 49,788 4,429 MAXIM INTEGRATED PRODUCTS INCORPORATED 135,616 10,419 MICRON TECHNOLOGY INCORPORATED+ 145,449 32 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (CONTINUED) 1,957 MOLEX INCORPORATED $ 61,900 33,387 MOTOROLA INCORPORATED 686,437 3,985 NATIONAL SEMICONDUCTOR CORPORATION 90,460 5,163 NETWORK APPLIANCE INCORPORATED+ 202,803 1,707 NOVELLUS SYSTEMS INCORPORATED+ 58,755 4,910 NVIDIA CORPORATION+ 181,719 2,897 PMC-SIERRA INCORPORATED+<< 19,439 2,177 QLOGIC CORPORATION+ 47,720 22,823 QUALCOMM INCORPORATED 862,481 2,309 ROCKWELL COLLINS INCORPORATED 146,137 7,358 SANMINA-SCI CORPORATION+ 25,385 6,101 TELLABS INCORPORATED+ 62,596 20,493 TEXAS INSTRUMENTS INCORPORATED 590,198 1,082 WHIRLPOOL CORPORATION<< 89,828 4,643 XILINX INCORPORATED<< 110,550 14,778,476 --------------- ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES - 0.32% 5,143 CELGENE CORPORATION+<< 295,877 1,215 FLUOR CORPORATION 99,205 3,246 MOODY'S CORPORATION 224,169 4,676 PAYCHEX INCORPORATED 184,889 2,209 QUEST DIAGNOSTICS INCORPORATED 117,077 921,217 --------------- FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 0.19% 1,438 BALL CORPORATION 62,697 2,090 FORTUNE BRANDS INCORPORATED 178,465 5,793 ILLINOIS TOOL WORKS INCORPORATED 267,579 806 SNAP-ON INCORPORATED 38,398 547,139 --------------- FINANCIAL SERVICES - 0.02% 2,737 JANUS CAPITAL GROUP INCORPORATED<< 59,092 --------------- FOOD & KINDRED PRODUCTS - 1.88% 10,618 ANHEUSER-BUSCH COMPANIES INCORPORATED 522,406 9,077 ARCHER DANIELS MIDLAND COMPANY 290,101 3,007 CAMPBELL SOUP COMPANY 116,942 3,827 COCA-COLA ENTERPRISES INCORPORATED 78,147 7,037 CONAGRA FOODS INCORPORATED 189,999 2,901 CONSTELLATION BRANDS INCORPORATED CLASS A+ 84,187 4,738 GENERAL MILLS INCORPORATED 272,909 4,550 H.J. HEINZ COMPANY 204,796 1,568 HERCULES INCORPORATED+ 30,278 2,401 HERSHEY COMPANY 119,570 3,465 KELLOGG COMPANY 173,458 1,814 MCCORMICK & COMPANY INCORPORATED 69,948 631 MOLSON COORS BREWING COMPANY 48,234 33 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE FOOD & KINDRED PRODUCTS (CONTINUED) 1,890 PEPSI BOTTLING GROUP INCORPORATED $ 58,420 22,678 PEPSICO INCORPORATED 1,418,509 10,314 SARA LEE CORPORATION 175,647 28,161 THE COCA-COLA COMPANY 1,358,768 3,479 TYSON FOODS INCORPORATED CLASS A 57,230 3,031 WM. WRIGLEY JR. COMPANY 156,763 5,426,312 --------------- FOOD STORES - 0.31% 9,908 KROGER COMPANY 228,578 6,122 SAFEWAY INCORPORATED 211,576 10,442 STARBUCKS CORPORATION+<< 369,856 1,974 WHOLE FOODS MARKET INCORPORATED 92,640 902,650 --------------- FORESTRY - 0.08% 3,266 WEYERHAEUSER COMPANY 230,743 --------------- FURNITURE & FIXTURES - 0.12% 2,471 LEGGETT & PLATT INCORPORATED 59,057 5,444 MASCO CORPORATION 162,612 3,828 NEWELL RUBBERMAID INCORPORATED<< 110,821 332,490 --------------- GENERAL MERCHANDISE STORES - 1.14% 1,512 BIG LOTS INCORPORATED+<< 34,655 4,309 DOLLAR GENERAL CORPORATION 69,203 2,094 FAMILY DOLLAR STORES INCORPORATED 61,417 7,254 FEDERATED DEPARTMENT STORES INCORPORATED 276,595 3,107 J.C. PENNEY COMPANY INCORPORATED 240,358 1,147 SEARS HOLDINGS CORPORATION+ 192,616 11,862 TARGET CORPORATION 676,727 6,285 TJX COMPANIES INCORPORATED 178,997 33,962 WAL-MART STORES INCORPORATED 1,568,365 3,298,933 --------------- HEALTH SERVICES - 0.23% 5,889 CAREMARK RX INCORPORATED 336,321 3,322 HEALTH MANAGEMENT ASSOCIATION INCORPORATED CLASS A 70,127 1,731 LABORATORY CORPORATION OF AMERICA HOLDINGS+ 127,177 1,021 MANOR CARE INCORPORATED<< 47,905 6,509 TENET HEALTHCARE CORPORATION+ 45,368 1,415 WATSON PHARMACEUTICALS INCORPORATED+ 36,832 663,730 --------------- HOLDING & OTHER INVESTMENT OFFICES - 0.70% 1,332 APARTMENT INVESTMENT & MANAGEMENT COMPANY CLASS A 74,619 3,016 ARCHSTONE-SMITH TRUST 175,561 1,613 BOSTON PROPERTIES INCORPORATED 180,462 4,854 EQUITY OFFICE PROPERTIES TRUST<< 233,817 34 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE HOLDING & OTHER INVESTMENT OFFICES (CONTINUED) 4,034 EQUITY RESIDENTIAL $ 204,726 3,121 KIMCO REALTY CORPORATION 140,289 2,445 PLUM CREEK TIMBER COMPANY 97,433 3,417 PROLOGIS 207,651 1,692 PUBLIC STORAGE INCORPORATED 164,970 3,056 SIMON PROPERTY GROUP INCORPORATED<< 309,542 1,783 VORNADO REALTY TRUST 216,635 2,005,705 --------------- HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES - 0.17% 3,904 BED BATH & BEYOND INCORPORATED+ 148,742 5,571 BEST BUY COMPANY INCORPORATED 274,037 1,959 CIRCUIT CITY STORES INCORPORATED 37,182 1,875 RADIOSHACK CORPORATION<< 31,463 491,424 --------------- HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES - 0.24% 5,339 HILTON HOTELS CORPORATION 186,331 4,641 MARRIOTT INTERNATIONAL INCORPORATED CLASS A 221,469 2,927 STARWOOD HOTELS & RESORTS WORLDWIDE INCORPORATED 182,938 2,736 WYNDHAM WORLDWIDE CORPORATION+ 87,607 678,345 --------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 3.43% 10,169 3M COMPANY 792,470 2,395 AMERICAN STANDARD COMPANIES INCORPORATED 109,811 11,746 APPLE COMPUTER INCORPORATED+ 996,531 19,182 APPLIED MATERIALS INCORPORATED 353,908 4,429 BAKER HUGHES INCORPORATED 330,669 939 BLACK & DECKER CORPORATION 75,092 8,984 CATERPILLAR INCORPORATED 550,989 724 CUMMINS INCORPORATED 85,562 3,193 DEERE & COMPANY 303,559 31,373 DELL INCORPORATED+ 787,149 2,819 DOVER CORPORATION 138,187 2,057 EATON CORPORATION 154,563 30,417 EMC CORPORATION+ 401,504 37,827 HEWLETT-PACKARD COMPANY 1,558,094 4,234 INGERSOLL-RAND COMPANY LIMITED CLASS A 165,676 20,804 INTERNATIONAL BUSINESS MACHINES CORPORATION 2,021,109 1,352 LEXMARK INTERNATIONAL INCORPORATED+<< 98,966 2,423 NATIONAL OILWELL VARCO INCORPORATED+ 148,239 1,690 PALL CORPORATION 58,390 1,628 PARKER HANNIFIN CORPORATION 125,161 3,064 PITNEY BOWES INCORPORATED 141,526 3,107 SANDISK CORPORATION+<< 133,694 2,753 SMITH INTERNATIONAL INCORPORATED 113,066 12,630 SOLECTRON CORPORATION+ 40,669 1,122 STANLEY WORKS 56,425 35 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (CONTINUED) 3,518 SYMBOL TECHNOLOGIES INCORPORATED $ 52,559 1,405 TEREX CORPORATION+ 90,735 9,884,303 --------------- INSURANCE AGENTS, BROKERS & SERVICE - 0.21% 4,276 AON CORPORATION 151,114 2,295 HUMANA INCORPORATED+ 126,936 7,611 MARSH & MCLENNAN COMPANIES INCORPORATED 233,353 4,730 UNUMPROVIDENT CORPORATION 98,289 609,692 --------------- INSURANCE CARRIERS - 3.57% 4,496 ACE LIMITED 272,323 7,209 AETNA INCORPORATED 311,285 6,829 AFLAC INCORPORATED 314,134 8,631 ALLSTATE CORPORATION 561,964 1,465 AMBAC FINANCIAL GROUP INCORPORATED 130,488 35,904 AMERICAN INTERNATIONAL GROUP INCORPORATED 2,572,881 5,685 CHUBB CORPORATION 300,793 1,416 CIGNA CORPORATION 186,303 2,392 CINCINNATI FINANCIAL CORPORATION 108,382 6,121 GENWORTH FINANCIAL INCORPORATED 209,399 4,377 HARTFORD FINANCIAL SERVICES GROUP INCORPORATED 408,418 3,965 LINCOLN NATIONAL CORPORATION 263,276 6,310 LOEWS CORPORATION 261,676 1,861 MBIA INCORPORATED 135,965 10,499 METLIFE INCORPORATED 619,546 1,146 MGIC INVESTMENT CORPORATION<< 71,671 3,725 PRINCIPAL FINANCIAL GROUP INCORPORATED 218,658 10,519 PROGRESSIVE CORPORATION 254,770 6,587 PRUDENTIAL FINANCIAL INCORPORATED<< 565,560 1,453 SAFECO CORPORATION 90,885 9,529 ST. PAUL TRAVELERS COMPANIES INCORPORATED 511,612 1,354 TORCHMARK CORPORATION 86,331 18,603 UNITEDHEALTH GROUP INCORPORATED 999,539 8,563 WELLPOINT INCORPORATED+ 673,822 2,493 XL CAPITAL LIMITED CLASS A 179,546 10,309,227 --------------- LEATHER & LEATHER PRODUCTS - 0.08% 5,075 COACH INCORPORATED+ 218,022 --------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 1.67% 5,644 AGILENT TECHNOLOGIES INCORPORATED+ 196,693 2,123 ALLERGAN INCORPORATED 254,208 2,530 APPLERA CORPORATION-APPLIED BIOSYSTEMS GROUP 92,826 742 BAUSCH & LOMB INCORPORATED 38,629 9,038 BAXTER INTERNATIONAL INCORPORATED 419,273 3,406 BECTON DICKINSON & COMPANY 238,931 36 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS (CONTINUED) 3,382 BIOMET INCORPORATED $ 139,575 16,285 BOSTON SCIENTIFIC CORPORATION+ 279,776 1,422 C.R. BARD INCORPORATED 117,983 3,273 DANAHER CORPORATION 237,096 3,967 EASTMAN KODAK COMPANY<< 102,349 15,898 MEDTRONIC INCORPORATED 850,702 737 MILLIPORE CORPORATION+<< 49,084 1,698 PERKINELMER INCORPORATED 37,747 6,140 RAYTHEON COMPANY 324,192 2,350 ROCKWELL AUTOMATION INCORPORATED 143,538 4,881 ST. JUDE MEDICAL INCORPORATED+ 178,449 4,105 STRYKER CORPORATION 226,227 1,139 TEKTRONIX INCORPORATED 33,225 2,621 TERADYNE INCORPORATED+ 39,210 5,636 THERMO ELECTRON CORPORATION+ 255,254 1,401 WATERS CORPORATION+ 68,607 13,331 XEROX CORPORATION+ 225,960 3,295 ZIMMER HOLDINGS INCORPORATED+ 258,262 4,807,796 --------------- MEDICAL MANAGEMENT SERVICES - 0.04% 2,200 COVENTRY HEALTH CARE INCORPORATED+ 110,110 --------------- METAL MINING - 0.27% 2,719 FREEPORT-MCMORAN COPPER & GOLD INCORPORATED CLASS B<< 151,530 6,217 NEWMONT MINING CORPORATION 280,698 2,817 PHELPS DODGE CORPORATION 337,251 769,479 --------------- MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS - 0.04% 1,304 VULCAN MATERIALS COMPANY 117,190 --------------- MISCELLANEOUS MANUFACTURING INDUSTRIES - 1.29% 2,193 HASBRO INCORPORATED 59,759 40,042 JOHNSON & JOHNSON 2,643,573 5,267 MATTEL INCORPORATED 119,350 1,869 TIFFANY & COMPANY<< 73,340 27,467 TYCO INTERNATIONAL LIMITED 834,997 3,731,019 --------------- MISCELLANEOUS RETAIL - 0.72% 4,266 AMAZON.COM INCORPORATED+<< 168,336 6,329 COSTCO WHOLESALE CORPORATION<< 334,614 11,374 CVS CORPORATION 351,570 840 DILLARD'S INCORPORATED CLASS A 29,375 1,870 EXPRESS SCRIPTS INCORPORATED+<< 133,892 3,845 OFFICE DEPOT INCORPORATED+ 146,764 9,980 STAPLES INCORPORATED 266,466 13,858 WALGREEN COMPANY 635,944 2,066,961 --------------- 37 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE MOTION PICTURES - 1.00% 32,327 NEWS CORPORATION CLASS A $ 694,384 55,138 TIME WARNER INCORPORATED 1,200,906 28,567 WALT DISNEY COMPANY 978,991 2,874,281 ---------------- MOTOR FREIGHT TRANSPORTATION & WAREHOUSING - 0.39% 14,826 UNITED PARCEL SERVICE INCORPORATED CLASS B 1,111,653 ---------------- NON-DEPOSITORY CREDIT INSTITUTIONS - 1.28% 16,639 AMERICAN EXPRESS COMPANY 1,009,488 5,634 CAPITAL ONE FINANCIAL CORPORATION 432,804 2,738 CIT GROUP INCORPORATED 152,698 8,577 COUNTRYWIDE FINANCIAL CORPORATION<< 364,094 13,466 FANNIE MAE 799,746 9,570 FREDDIE MAC 649,803 5,645 SLM CORPORATION 275,307 3,683,940 ---------------- OIL & GAS EXTRACTION - 1.60% 6,349 ANADARKO PETROLEUM CORPORATION 276,308 4,549 APACHE CORPORATION 302,554 4,048 BJ SERVICES COMPANY 118,687 5,744 CHESAPEAKE ENERGY CORPORATION 166,863 6,104 DEVON ENERGY CORPORATION 409,456 3,362 EOG RESOURCES INCORPORATED 209,957 13,887 HALLIBURTON COMPANY 431,191 4,134 NABORS INDUSTRIES LIMITED+<< 123,111 1,872 NOBLE CORPORATION 142,553 11,898 OCCIDENTAL PETROLEUM CORPORATION 580,979 1,525 ROWAN COMPANIES INCORPORATED 50,630 16,272 SCHLUMBERGER LIMITED 1,027,740 4,038 TRANSOCEAN INCORPORATED+ 326,634 4,691 WEATHERFORD INTERNATIONAL LIMITED+ 196,037 5,053 XTO ENERGY INCORPORATED 237,744 4,600,444 ---------------- PAPER & ALLIED PRODUCTS - 0.33% 1,447 BEMIS COMPANY INCORPORATED 49,169 6,283 INTERNATIONAL PAPER COMPANY 214,250 6,329 KIMBERLY-CLARK CORPORATION 430,056 2,502 MEADWESTVACO CORPORATION 75,210 1,028 OFFICEMAX INCORPORATED 51,040 1,837 PACTIV CORPORATION+ 65,563 1,477 TEMPLE-INLAND INCORPORATED 67,986 953,274 ---------------- PERSONAL SERVICES - 0.06% 1,884 CINTAS CORPORATION 74,814 4,451 H & R BLOCK INCORPORATED 102,551 177,365 ---------------- 38 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE PETROLEUM REFINING & RELATED INDUSTRIES - 3.94% 789 ASHLAND INCORPORATED $ 54,583 30,107 CHEVRON CORPORATION 2,213,768 22,729 CONOCOPHILLIPS 1,635,352 80,552 EXXON MOBIL CORPORATION 6,172,700 3,738 HESS CORPORATION 185,293 4,854 MARATHON OIL CORPORATION 449,005 2,583 MURPHY OIL CORPORATION<< 131,346 1,700 SUNOCO INCORPORATED<< 106,012 8,350 VALERO ENERGY CORPORATION 427,186 11,375,245 ---------------- PRIMARY METAL INDUSTRIES - 0.29% 11,975 ALCOA INCORPORATED 359,370 1,391 ALLEGHENY TECHNOLOGIES INCORPORATED 126,136 4,172 NUCOR CORPORATION 228,042 1,636 UNITED STATES STEEL CORPORATION 119,657 833,205 ---------------- PRINTING, PUBLISHING & ALLIED INDUSTRIES - 0.56% 10,793 CBS CORPORATION CLASS B 336,526 898 DOW JONES & COMPANY INCORPORATED<< 34,124 1,150 E.W. SCRIPPS COMPANY CLASS A 57,431 3,236 GANNETT COMPANY INCORPORATED 195,649 4,891 MCGRAW-HILL COMPANIES INCORPORATED 332,686 534 MEREDITH CORPORATION 30,091 1,985 NEW YORK TIMES COMPANY CLASS A<< 48,355 2,994 RR DONNELLEY & SONS COMPANY 106,407 2,632 TRIBUNE COMPANY 81,013 9,657 VIACOM INCORPORATED CLASS B+<< 396,227 1,618,509 ---------------- RAILROAD TRANSPORTATION - 0.41% 4,960 BURLINGTON NORTHERN SANTA FE CORPORATION 366,098 6,010 CSX CORPORATION 206,924 5,481 NORFOLK SOUTHERN CORPORATION 275,639 3,725 UNION PACIFIC CORPORATION 342,775 1,191,436 ---------------- REAL ESTATE - 0.06% 2,551 CB RICHARD ELLIS GROUP INCORPORATED CLASS A+ 84,693 2,960 REALOGY CORPORATION+ 89,747 174,440 ---------------- RUBBER & MISCELLANEOUS PLASTICS PRODUCTS - 0.04% 2,451 GOODYEAR TIRE & RUBBER COMPANY+<< 51,446 1,113 SEALED AIR CORPORATION 72,256 123,702 ---------------- 39 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 2.01% 3,341 AMERIPRISE FINANCIAL INCORPORATED $ 182,085 1,620 BEAR STEARNS COMPANIES INCORPORATED 263,704 14,126 CHARLES SCHWAB CORPORATION 273,197 480 CHICAGO MERCANTILE EXCHANGE 244,680 5,896 E*TRADE FINANCIAL CORPORATION+ 132,188 1,247 FEDERATED INVESTORS INCORPORATED CLASS B 42,124 2,302 FRANKLIN RESOURCES INCORPORATED 253,611 5,881 GOLDMAN SACHS GROUP INCORPORATED 1,172,377 1,815 LEGG MASON INCORPORATED 172,516 7,320 LEHMAN BROTHERS HOLDINGS INCORPORATED 571,838 12,208 MERRILL LYNCH & COMPANY INCORPORATED 1,136,565 14,619 MORGAN STANLEY 1,190,425 3,641 T. ROWE PRICE GROUP INCORPORATED 159,367 5,794,677 ---------------- STONE, CLAY, GLASS & CONCRETE PRODUCTS - 0.14% 21,604 CORNING INCORPORATED+ 404,211 ---------------- TOBACCO PRODUCTS - 0.96% 28,946 ALTRIA GROUP INCORPORATED 2,484,146 2,367 REYNOLDS AMERICAN INCORPORATED<< 154,967 2,222 UST INCORPORATED 129,320 2,768,433 ---------------- TRANSPORTATION BY AIR - 0.22% 4,234 FEDEX CORPORATION 459,897 10,935 SOUTHWEST AIRLINES COMPANY 167,524 627,421 ---------------- TRANSPORTATION EQUIPMENT - 1.81% 10,920 BOEING COMPANY 970,133 1,267 BRUNSWICK CORPORATION 40,417 26,087 FORD MOTOR COMPANY<< 195,913 5,588 GENERAL DYNAMICS CORPORATION 415,468 7,811 GENERAL MOTORS CORPORATION<< 239,954 2,353 GENUINE PARTS COMPANY 111,603 1,723 GOODRICH CORPORATION 78,483 3,578 HARLEY-DAVIDSON INCORPORATED 252,142 11,276 HONEYWELL INTERNATIONAL INCORPORATED 510,126 2,550 ITT CORPORATION 144,891 2,704 JOHNSON CONTROLS INCORPORATED 232,328 4,917 LOCKHEED MARTIN CORPORATION 452,708 4,770 NORTHROP GRUMMAN CORPORATION 322,929 3,429 PACCAR INCORPORATED 222,542 1,732 TEXTRON INCORPORATED 162,410 13,861 UNITED TECHNOLOGIES CORPORATION 866,590 5,218,637 ---------------- TRANSPORTATION SERVICES - 0.02% 1,828 SABRE HOLDINGS CORPORATION 58,295 ---------------- 40 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE WATER TRANSPORTATION - 0.10% 6,145 CARNIVAL CORPORATION $ 301,412 ---------------- WHOLESALE TRADE NON-DURABLE GOODS - 0.60% 2,652 AMERISOURCEBERGEN CORPORATION 119,234 1,087 BROWN-FORMAN CORPORATION CLASS B 72,003 5,593 CARDINAL HEALTH INCORPORATED 360,357 1,847 DEAN FOODS COMPANY+ 78,091 4,087 MCKESSON CORPORATION 207,211 4,052 MEDCO HEALTH SOLUTIONS INCORPORATED+ 216,539 2,596 NIKE INCORPORATED CLASS B 257,082 2,843 SUPERVALU INCORPORATED 101,637 8,536 SYSCO CORPORATION 313,797 1,725,951 ---------------- WHOLESALE TRADE-DURABLE GOODS - 0.05% 1,919 PATTERSON COMPANIES INCORPORATED+ 68,144 1,010 W.W. GRAINGER INCORPORATED 70,620 138,764 ---------------- TOTAL COMMON STOCKS (COST $151,162,031) 175,759,594 ---------------- PRINCIPAL INTEREST RATE MATURITY DATE US TREASURY SECURITIES - 34.27% US TREASURY BONDS - 34.27% $ 6,889,000 US TREASURY BOND<< 6.63% 02/15/2027 8,395,969 6,477,000 US TREASURY BOND<< 6.38 08/15/2027 7,707,125 15,787,000 US TREASURY BOND<< 6.13 11/15/2027 18,316,614 8,567,000 US TREASURY BOND<< 5.50 08/15/2028 9,255,033 7,888,000 US TREASURY BOND<< 5.25 11/15/2028 8,271,925 8,282,000 US TREASURY BOND<< 5.25 02/15/2029 8,685,748 8,142,000 US TREASURY BOND<< 6.13 08/15/2029 9,515,963 12,528,000 US TREASURY BOND<< 6.25 05/15/2030 14,923,980 12,837,000 US TREASURY BOND<< 5.38 02/15/2031 13,750,635 98,822,992 ---------------- TOTAL US TREASURY SECURITIES (COST $94,115,385) 98,822,992 ---------------- COLLATERAL FOR SECURITIES LENDING - 38.22% COLLATERAL INVESTED IN OTHER ASSETS - 38.22% 234,848 ABBEY NATIONAL TREASURY SERVICES PLC+/-++ 5.46 01/16/2007 234,862 1,565,653 AMERICAN EXPRESS BANK FSB+/- 5.31 01/26/2007 1,565,684 340,359 AMERICAN EXPRESS BANK FSB SERIES BKNT+/- 5.43 11/21/2007 340,727 987,042 AMERICAN GENERAL FINANCE CORPORATION+/-++ 5.40 01/15/2008 987,407 28,250 AMERICAN HONDA FINANCE CORPORATION SERIES MTN+/-++ 5.33 07/10/2007 28,252 34,036 AMERICAN HONDA FINANCE CORPORATION SERIES MTN+/-++ 5.46 09/27/2007 34,077 61,231 AMSTEL FUNDING CORPORATION++ 5.33 01/22/2007 61,052 68,072 AMSTERDAM FUNDING CORPORATION++ 5.41 01/25/2007 67,844 1,541,828 AQUIFER FUNDING LLC++ 5.40 01/05/2007 1,541,150 111,842 ATLANTIC ASSET SECURITIZATION CORPORATION 5.34 01/30/2007 111,386 41 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 850,898 ATLAS CAPITAL FUNDING CORPORATION+/-++ 5.34% 05/10/2007 $ 850,898 125,048 ATLAS CAPITAL FUNDING CORPORATION++ 5.41 01/03/2007 125,029 680,719 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN+/-++ 5.33 04/25/2007 680,766 850,898 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN1+/-++ 5.35 10/25/2007 850,805 47,446 ATOMIUM FUNDING CORPORATION++ 5.33 02/08/2007 47,190 37,371 ATOMIUM FUNDING CORPORATION++ 5.34 02/06/2007 37,181 84,886 ATOMIUM FUNDING CORPORATION++ 5.36 02/07/2007 84,441 67,391 ATOMIUM FUNDING CORPORATION++ 5.39 02/16/2007 66,950 85,090 BANK ONE NA (LLLINOIS) SERIES BKNT+/- 5.42 01/12/2007 85,092 2,212,336 BEAR STEARNS & COMPANY INCORPORATED+/- 5.39 02/23/2007 2,212,336 175,285 BEAR STEARNS & COMPANY INCORPORATED+/- 5.94 09/27/2007 176,149 340,359 BEAR STEARNS & COMPANY INCORPORATED SERIES MTN+/- 5.44 10/03/2007 340,666 65,349 BEAR STEARNS & COMPANY INCORPORATED SERIES MTNB+/- 5.53 01/16/2007 65,353 3,403,594 BEAR STEARNS & COMPANY REPURCHASE AGREEMENT (MATURITY VALUE $3,405,621) 5.36 01/02/2007 3,403,594 510,539 BETA FINANCE INCORPORATED SERIES MTN+/-++ 5.34 07/17/2007 510,697 5,956,289 BNP PARIBAS REPURCHASE AGREEMENT (MATURITY VALUE $5,959,836) 5.36 01/02/2007 5,956,289 151,902 BUCKINGHAM CDO LLC 5.35 03/15/2007 150,310 850,898 BUCKINGHAM II CDO LLC++ 5.32 01/22/2007 848,414 169,635 BUCKINGHAM II CDO LLC 5.35 01/25/2007 169,067 4,594,852 BUCKINGHAM III CDO LLC++ 5.35 01/16/2007 4,585,478 170,180 CAIRN HIGH GRADE FUNDING I LLC++ 5.33 01/12/2007 169,931 1,497,581 CAIRN HIGH GRADE FUNDING I LLC++ 5.33 02/01/2007 1,491,037 238,252 CAIRN HIGH GRADE FUNDING I LLC 5.34 03/22/2007 235,512 13,274 CATERPILLAR FINANCIAL SERVICES CORPORATION+/- 5.44 08/20/2007 13,285 12,627 CEDAR SPRINGS CAPITAL COMPANY++ 5.33 01/08/2007 12,616 278,584 CEDAR SPRINGS CAPITAL COMPANY++ 5.33 03/02/2007 276,191 124,776 CEDAR SPRINGS CAPITAL COMPANY 5.34 02/02/2007 124,213 16,337 CEDAR SPRINGS CAPITAL COMPANY 5.35 03/07/2007 16,185 28,454 CEDAR SPRINGS CAPITAL COMPANY++ 5.36 03/12/2007 28,168 900,285 CEDAR SPRINGS CAPITAL COMPANY++ 5.37 01/05/2007 899,888 61,299 CEDAR SPRINGS CAPITAL COMPANY 5.38 01/11/2007 61,218 22,123 CHEYNE FINANCE LLC 5.33 03/22/2007 21,869 357,377 CHEYNE FINANCE LLC++ 5.38 04/13/2007 352,135 44,247 CHEYNE FINANCE LLC++ 5.40 01/23/2007 44,111 3,654,077 CITIGROUP REPURCHASE AGREEMENT (MATURITY VALUE $3,656,253) 5.36 01/02/2007 3,654,077 71,305 CLIPPER RECEIVABLES CORPORATION 5.40 01/19/2007 71,128 41,183 CLIPPER RECEIVABLES CORPORATION 5.41 01/09/2007 41,141 48,978 CLIPPER RECEIVABLES CORPORATION 5.43 01/03/2007 48,970 8,509 CONCORD MINUTEMAN CAPITAL COMPANY SERIES A 5.33 01/17/2007 8,490 415,238 CORPORATE ASSET SECURITIZATION AUSTRALIA LIMITED++ 5.36 01/22/2007 414,026 3,587,388 CORPORATE ASSET SECURITIZATION AUSTRALIA LIMITED++ 5.41 01/19/2007 3,578,491 170,180 CREDIT SUISSE (NEW YORK) SERIES YCD+/- 5.36 03/27/2007 170,055 153,162 CREDIT SUISSE FIRST BOSTON USA INCORPORATED SERIES MTN+/- 5.47 04/05/2007 153,221 77,942 CREDIT SUISSE FIRST BOSTON USA INCORPORATED SERIES MTN+/- 5.72 10/29/2007 78,225 8,509 CROWN POINT CAPITAL COMPANY 5.36 04/17/2007 8,379 34,036 CROWN POINT CAPITAL COMPANY++ 5.39 01/12/2007 33,986 1,876,537 DEER VALLEY FUNDING LLC 5.32 01/23/2007 1,870,795 282,771 DEER VALLEY FUNDING LLC++ 5.34 01/24/2007 281,863 42 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 102,108 DEER VALLEY FUNDING LLC 5.34% 01/25/2007 $ 101,766 656,077 DEER VALLEY FUNDING LLC++ 5.34 02/06/2007 652,737 250,845 DEER VALLEY FUNDING LLC++ 5.35 01/29/2007 249,857 408,431 DEER VALLEY FUNDING LLC++ 5.35 02/27/2007 405,103 77,432 DEUTSCHE BANK AG (NEW YORK) SERIES YCD+/- 5.34 03/15/2007 77,150 16,337,250 FIRST BOSTON REPURCHASE AGREEMENT (MATURITY VALUE $16,346,980) 5.36 01/02/2007 16,337,250 1,701,797 FIVE FINANCE INCORPORATED SERIES MTN+/-++ 5.37 01/25/2007 1,702,512 14,704 FOX TROT CDO LIMITED++ 5.34 04/11/2007 14,492 932,789 FOX TROT CDO LIMITED 5.39 01/02/2007 932,789 399,480 GALLEON CAPITAL LLC 5.40 01/02/2007 399,480 68,072 GALLEON CAPITAL LLC 5.40 01/18/2007 67,913 544,575 GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY+/- 5.43 06/18/2007 544,575 687,356 GENERAL ELECTRIC CAPITAL CORPORATION SERIES MTNA+/- 5.42 06/22/2007 687,837 1,158,583 GENWORTH FINANCIAL INCORPORATED+/- 5.51 06/15/2007 1,159,811 303,124 GEORGE STREET FINANCE LLC++ 5.38 01/16/2007 302,506 2,127,757 GEORGE STREET FINANCE LLC++ 5.38 01/29/2007 2,119,373 1,307,593 GEORGE STREET FINANCE LLC 5.40 01/09/2007 1,306,259 850,898 GERMAN RESIDENTIAL FUNDING+/-++ 5.35 08/22/2007 850,898 119,126 GOLDMAN SACHS GROUP INCORPORATED SERIES MTN1+/- 5.51 01/09/2007 119,129 1,701,797 GOLDMAN SACHS GROUP INCORPORATED SERIES MTNB+/- 5.46 03/30/2007 1,702,341 347,167 HBOS TREASURY SERVICES PLC+/-++ 5.45 01/12/2007 347,180 129,745 HUDSON-THAMES LLC 5.33 01/08/2007 129,632 772,786 HUDSON-THAMES LLC 5.34 01/22/2007 770,529 878,331 HUDSON-THAMES LLC 5.34 02/05/2007 873,984 54,458 HUDSON-THAMES LLC++ 5.38 02/20/2007 54,069 57,521 HUDSON-THAMES LLC++ 5.38 03/05/2007 57,002 23,825 IBM CORPORATION SERIES MTN+/- 5.36 06/28/2007 23,835 1,191,258 ING USA ANNUITY & LIFE INSURANCE+/- 5.42 09/17/2007 1,191,258 8,509 IRISH LIFE & PERMANENT PLC++ 5.35 04/04/2007 8,395 776,019 K2 (USA) LLC 5.38 01/23/2007 773,645 2,178,300 KAUPTHING BANK SERIES MTN+/-++ 5.43 03/20/2007 2,177,777 170,180 KLIO FUNDING CORPORATION++ 5.36 01/23/2007 169,659 34,036 KLIO FUNDING CORPORATION++ 5.37 01/25/2007 33,922 1,516,573 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.35 01/08/2007 1,515,254 37,712 LA FAYETTE ASSET SECURITIZATION CORPORATION 5.37 01/17/2007 37,629 1,495,913 LA FAYETTE ASSET SECURITIZATION CORPORATION 5.38 01/02/2007 1,495,913 146,491 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.38 01/16/2007 146,192 112,489 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.39 03/15/2007 111,310 174,604 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.41 01/10/2007 174,400 340,359 LEGACY CAPITAL CORPORATION 5.42 01/04/2007 340,261 190,942 LEHMAN BROTHERS HOLDINGS INCORPORATED SERIES MTNG+/- 5.49 04/20/2007 191,066 136,144 LIBERTY LIGHT US CAPITAL SERIES MTN1+/-++ 5.46 04/16/2007 136,216 43,600 LIBERTY STREET FUNDING CORPORATION++ 5.35 01/29/2007 43,428 156,565 LIBERTY STREET FUNDING CORPORATION 5.39 01/19/2007 156,177 85,090 LIBERTY STREET FUNDING CORPORATION++ 5.40 01/23/2007 84,829 1,701,797 LIQUID FUNDING LIMITED+/-++ 5.32 08/15/2007 1,646,812 850,898 LIQUID FUNDING LIMITED++ 5.34 03/05/2007 843,223 51,054 MANE FUNDING CORPORATION 5.40 01/29/2007 50,853 43 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 102,108 MBIA GLOBAL FUNDING LLC+/-++ 5.35% 02/20/2007 $ 102,112 5,786 MERRILL LYNCH & COMPANY INCORPORATED SERIES MTNC+/- 5.40 08/24/2007 5,788 102,108 MERRILL LYNCH & COMPANY INCORPORATED SERIES MTNC+/- 5.47 08/27/2007 102,242 158,267 MERRILL LYNCH & COMPANY INCORPORATED SERIES MTNC+/- 5.50 01/26/2007 158,285 17,018 MERRILL LYNCH & COMPANY INCORPORATED SERIES MTNC+/- 5.52 04/20/2007 17,030 25,527 MERRILL LYNCH & COMPANY INCORPORATED SERIES MTNB+/- 5.60 01/02/2008 25,588 20,422 METLIFE GLOBAL FUNDING I+/-++ 5.43 03/16/2007 20,428 34,036 MORGAN STANLEY+/- 5.48 01/19/2007 34,039 132,740 MORGAN STANLEY+/- 5.50 02/15/2007 132,764 218,851 MORGAN STANLEY+/- 5.51 01/12/2007 218,858 523,303 MORGAN STANLEY SERIES EXL+/- 5.41 01/15/2008 523,313 850,898 NATEXIS BANQUES POPULAIRES+/-++ 5.37 11/09/2007 850,320 1,342,718 NATIONWIDE BUILDING SOCIETY+/-++ 5.49 07/20/2007 1,343,913 74,164 NIEUW AMSTERDAM RECEIVABLES CORPORATION 5.32 03/27/2007 73,257 61,537 NORTH SEA FUNDING 5.38 02/21/2007 61,089 170,180 PRUDENTIAL FUNDING 5.36 01/05/2007 170,105 1,598,157 RACERS TRUST SERIES 2004-6-MM+/-++ 5.37 06/22/2007 1,598,185 78,929 RANGER FUNDING CORPORATION 5.36 01/17/2007 78,756 111,298 ROYAL BANK OF SCOTLAND PLC+/-++ 5.36 03/30/2007 111,330 11,879 SAINT GERMAIN FUNDING++ 5.32 01/16/2007 11,854 51,054 SAINT GERMAIN FUNDING 5.41 01/08/2007 51,009 816,863 SEDNA FINANCE INCORPORATED SERIES MTN+/-++ 5.33 04/11/2007 816,961 612,647 SEDNA FINANCE INCORPORATED SERIES MTN+/-++ 5.33 10/26/2007 612,598 680,719 SLM CORPORATION+/-++ 5.35 01/11/2008 680,916 2,388,472 SLM CORPORATION SERIES MTNA+/- 5.50 01/25/2007 2,388,735 174,264 SLM CORPORATION SERIES MTN1+/- 5.59 07/25/2007 174,504 20,422 SVENSKA HANDELSBANKEN INCORPORATED 5.32 01/26/2007 20,350 4,254,492 TASMAN FUNDING INCORPORATED++ 5.34 01/16/2007 4,245,813 1,076,284 TASMAN FUNDING INCORPORATED++ 5.40 01/22/2007 1,073,142 77,296 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 5.31 01/11/2007 77,194 41,422 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED 5.35 01/04/2007 41,410 68,072 THUNDER BAY FUNDING LLC++ 5.36 01/31/2007 67,784 223,888 THUNDER BAY FUNDING LLC++ 5.41 01/11/2007 223,595 128,894 TIERRA ALTA FUNDING I LIMITED 5.36 01/23/2007 128,500 3,403,594 TRANSAMERICA OCCIDENTAL LIFE INSURANCE+/- 5.51 12/31/2007 3,403,594 654,137 TRAVELERS INSURANCE COMPANY+/- 5.42 02/09/2007 654,124 8,713 TULIP FUNDING CORPORATION 5.36 04/25/2007 8,570 850,898 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+/-++ 5.36 03/09/2007 851,060 125,933 VERSAILLES CDS LLC++ 5.34 01/17/2007 125,657 718,941 VERSAILLES CDS LLC++ 5.35 01/11/2007 717,999 425,449 VERSAILLES CDS LLC++ 5.36 01/04/2007 425,326 170,180 VERSAILLES CDS LLC 5.36 01/16/2007 169,833 646,683 VERSAILLES CDS LLC 5.40 01/19/2007 645,079 51,054 VETRA FINANCE CORPORATION++ 5.36 03/02/2007 50,615 573,165 VETRA FINANCE CORPORATION++ 5.37 03/13/2007 567,325 850,898 WAL-MART STORES INCORPORATED SERIES MTN+/- 5.26 03/28/2007 850,924 1,191,258 WHISTLEJACKET CAPITAL LIMITED++ 5.40 01/08/2007 1,190,226 525,991 WHITE PINE FINANCE LLC 5.35 01/22/2007 524,455 44 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 34,036 WHITE PINE FINANCE LLC 5.39% 01/16/2007 $ 33,967 40,230 WORLD OMNI VEHICLE LEASING INCORPORATED++ 5.36 01/12/2007 40,172 38,563 WORLD OMNI VEHICLE LEASING INCORPORATED++ 5.36 01/16/2007 38,484 110,235,757 ---------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $110,235,757) $ 110,235,757 ---------------- SHARES SHORT-TERM INVESTMENTS - 4.47% MUTUAL FUNDS - 2.98% 8,582,237 WELLS FARGO MONEY MARKET TRUST~++ 8,582,237 ---------------- PRINCIPAL US TREASURY BILLS - 1.49% $ 160,000 US TREASURY BILL^# 4.97 02/08/2007 159,231 25,000 US TREASURY BILL^# 4.85 05/10/2007 24,570 75,000 US TREASURY BILL^# 4.94 05/10/2007 73,709 4,125,000 US TREASURY BILL^# 4.96 05/10/2007 4,053,984 4,311,494 ---------------- TOTAL SHORT-TERM INVESTMENTS (COST $12,892,529) 12,893,731 ---------------- TOTAL INVESTMENTS IN SECURITIES (COST $368,405,702)* 137.91% $ 397,712,074 OTHER ASSETS AND LIABILITIES, NET (37.91) (109,324,914) ------ ---------------- TOTAL NET ASSETS 100.00% $ 288,387,160 ====== ================ + NON-INCOME EARNING SECURITIES. << ALL OR A PORTION OF THIS SECURITY IS ON LOAN. (SEE NOTE 2) +/- VARIABLE RATE INVESTMENTS. ++ 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 BOND. INTEREST RATE PRESENTED IS YIELD TO MATURITY. # SECURITY PLEDGED AS COLLATERAL FOR FUTURES TRANSACTIONS. ~ THIS WELLS FARGO ADVANTAGE FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY PURPOSES IN A WELLS FARGO ADVANTAGE 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 $9,680,699. * COST FOR FEDERAL INCOME TAX PURPOSES IS $369,828,592 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $ 49,056,864 GROSS UNREALIZED DEPRECIATION (21,173,382) ------------ NET UNREALIZED APPRECIATION (DEPRECIATION) $ 27,883,482 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 45 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT C&B LARGE CAP VALUE FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCKS - 96.59% APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS - 3.37% 15,300 JONES APPAREL GROUP INCORPORATED $ 511,479 6,990 VF CORPORATION 573,739 1,085,218 ---------------- BUSINESS SERVICES - 5.32% 27,700 MICROSOFT CORPORATION 827,122 8,470 OMNICOM GROUP INCORPORATED 885,454 1,712,576 ---------------- CHEMICALS & ALLIED PRODUCTS - 5.77% 19,500 AVON PRODUCTS INCORPORATED 644,280 11,340 COLGATE-PALMOLIVE COMPANY 739,822 3,200 HENKEL KGAA ADR 470,917 1,855,019 ---------------- COMMUNICATIONS - 3.32% 38,462 VODAFONE GROUP PLC ADR 1,068,474 ---------------- DEPOSITORY INSTITUTIONS - 7.44% 17,670 BANK OF AMERICA CORPORATION 943,401 12,395 JPMORGAN CHASE & COMPANY 598,679 12,600 STATE STREET CORPORATION 849,744 2,391,824 ---------------- EATING & DRINKING PLACES - 4.89% 17,100 ARAMARK CORPORATION CLASS B 571,995 22,596 MCDONALD'S CORPORATION 1,001,681 1,573,676 ---------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 8.72% 20,700 AMERICAN POWER CONVERSION CORPORATION 633,213 42,700 FLEXTRONICS INTERNATIONAL LIMITED+ 490,196 21,800 GENERAL ELECTRIC COMPANY 811,178 17,500 MOLEX INCORPORATED CLASS A 484,750 18,960 NOKIA OYJ ADR 385,267 2,804,604 ---------------- ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES - 2.34% 14,190 QUEST DIAGNOSTICS INCORPORATED 752,070 ---------------- FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 1.95% 13,570 ILLINOIS TOOL WORKS INCORPORATED 626,798 ---------------- FOOD & KINDRED PRODUCTS - 3.29% 9,730 ANHEUSER-BUSCH COMPANIES INCORPORATED 478,716 7,300 DIAGEO PLC ADR 578,963 1,057,679 ---------------- 46 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT C&B LARGE CAP VALUE FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE GENERAL MERCHANDISE STORES - 1.95% 27,400 BIG LOTS INCORPORATED+<< $ 628,008 ---------------- HOLDING & OTHER INVESTMENT OFFICES - 2.62% 230 BERKSHIRE HATHAWAY INCORPORATED CLASS B+ 843,180 ---------------- HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES - 1.46% 14,900 WILLIAMS-SONOMA INCORPORATED 468,456 ---------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 7.88% 19,400 DELL INCORPORATED+ 486,746 18,000 DOVER CORPORATION 882,360 7,200 EATON CORPORATION 541,008 13,560 PITNEY BOWES INCORPORATED 626,336 2,536,450 ---------------- INSURANCE AGENTS, BROKERS & SERVICE - 2.05% 16,600 WILLIS GROUP HOLDINGS LIMITED 659,186 ---------------- INSURANCE CARRIERS - 7.16% 12,500 ALLSTATE CORPORATION 813,875 9,150 AMERICAN INTERNATIONAL GROUP INCORPORATED 655,689 11,400 MBIA INCORPORATED 832,884 2,302,448 ---------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 4.76% 13,290 BAXTER INTERNATIONAL INCORPORATED 616,523 4,500 BECTON DICKINSON & COMPANY 315,675 34,880 BOSTON SCIENTIFIC CORPORATION+ 599,238 1,531,436 ---------------- MISCELLANEOUS MANUFACTURING INDUSTRIES - 4.21% 4,730 HASBRO INCORPORATED 128,893 6,000 JOHNSON & JOHNSON 396,120 27,250 TYCO INTERNATIONAL LIMITED 828,400 1,353,413 ---------------- MISCELLANEOUS RETAIL - 1.36% 15,500 ZALE CORPORATION+<< 437,255 ---------------- NON-DEPOSITORY CREDIT INSTITUTIONS - 6.61% 17,500 AMERICAN EXPRESS COMPANY 1,061,725 15,200 COUNTRYWIDE FINANCIAL CORPORATION 645,240 6,180 FREDDIE MAC 419,622 2,126,587 ---------------- PAPER & ALLIED PRODUCTS - 2.37% 11,240 KIMBERLY-CLARK CORPORATION 763,758 ---------------- PETROLEUM REFINING & RELATED INDUSTRIES - 3.06% 12,830 EXXON MOBIL CORPORATION 983,163 ---------------- 47 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT C&B LARGE CAP VALUE FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE PRIMARY METAL INDUSTRIES - 0.96% 6,800 HUBBELL INCORPORATED CLASS B $ 307,428 ---------------- PRINTING, PUBLISHING & ALLIED INDUSTRIES - 1.65% 8,800 GANNETT COMPANY INCORPORATED 532,048 ---------------- WATER TRANSPORTATION - 2.08% 13,640 CARNIVAL CORPORATION 669,043 ---------------- TOTAL COMMON STOCKS (COST $26,506,457) 31,069,797 ---------------- COLLATERAL FOR SECURITIES LENDING - 3.45% COLLATERAL INVESTED IN MONEY MARKET FUNDS - 0.15% 1,338 FEDERATED INVESTORS PRIME OBLIGATIONS FUND 10 1,338 46,902 SCUDDER DAILY ASSETS MONEY MARKET FUND 46,902 1,117 SHORT TERM INVESTMENT COMPANY MONEY MARKET FUND 1,117 49,357 ---------------- PRINCIPAL INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS - 3.30% $ 5,025 AMERICAN GENERAL FINANCE CORPORATION+/-++ 5.40% 01/15/2008 5,027 13,958 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN+/-++ 5.33 04/25/2007 13,959 13,958 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN1+/-++ 5.35 10/25/2007 13,957 13,958 BANCO SANTANDER TOTTA LN+/-++ 5.35 01/16/2008 13,959 13,958 BANK OF AMERICA NA SERIES BKNT+/- 5.36 06/19/2007 13,961 9,212 BANK ONE NA (LLLINOIS) SERIES BKNT+/- 5.42 01/12/2007 9,213 1,908 BARTON CAPITAL LLC++ 5.37 01/25/2007 1,902 3,350 BEAR STEARNS & COMPANY INCORPORATED SERIES MTNB+/- 5.53 01/16/2007 3,350 120,040 BEAR STEARNS & COMPANY REPURCHASE AGREEMENT (MATURITY VALUE $120,111) 5.36 01/02/2007 120,040 31,562 BUCKINGHAM III CDO LLC++ 5.35 01/16/2007 31,498 5,583 CEDAR SPRINGS CAPITAL COMPANY++ 5.31 01/17/2007 5,571 1,787 CHEYNE FINANCE LLC++ 5.33 01/23/2007 1,781 12,841 CHEYNE FINANCE LLC 5.35 03/16/2007 12,705 13,958 CHEYNE FINANCE LLC SERIES MTN+/-++ 5.34 07/16/2007 13,960 107,556 CITIGROUP REPURCHASE AGREEMENT (MATURITY VALUE $107,620) 5.36 01/02/2007 107,556 2,519 CLIPPER RECEIVABLES CORPORATION 5.39 01/10/2007 2,516 20,965 CORPORATE ASSET SECURITIZATION AUSTRALIA LIMITED++ 5.35 01/29/2007 20,883 27,916 CULLINAN FINANCE CORPORATION SERIES MTN2+/-++ 5.31 06/25/2007 27,917 13,958 DEER VALLEY FUNDING LLC 5.32 01/23/2007 13,915 12,283 DEER VALLEY FUNDING LLC++ 5.35 02/27/2007 12,183 2,563 DEER VALLEY FUNDING LLC++ 5.35 02/28/2007 2,542 558 DEER VALLEY FUNDING LLC 5.37 01/19/2007 557 27,916 FIVE FINANCE INCORPORATED SERIES MTN+/-++ 5.37 06/13/2007 27,924 22,913 FOX TROT CDO LIMITED++ 5.38 01/22/2007 22,846 16,750 GEORGE STREET FINANCE LLC++ 5.41 01/29/2007 16,684 8,012 GOLDMAN SACHS GROUP INCORPORATED SERIES MTNB+/- 5.46 03/30/2007 8,015 1,117 HARRIER FINANCE FUNDING LLC SERIES MTN+/-++ 5.42 05/15/2007 1,117 1,954 HBOS TREASURY SERVICES PLC+/-++ 5.45 01/12/2007 1,954 20,088 HUDSON-THAMES LLC 5.32 03/21/2007 19,860 48 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT C&B LARGE CAP VALUE FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 5,663 HUDSON-THAMES LLC 5.35% 01/24/2007 $ 5,644 11,346 HUDSON-THAMES LLC++ 5.36 02/20/2007 11,265 4,248 HUDSON-THAMES LLC++ 5.37 01/23/2007 4,235 1,005 HUDSON-THAMES LLC++ 5.38 02/28/2007 997 19,541 IBM CORPORATION SERIES MTN+/- 5.36 06/28/2007 19,550 36,291 ING USA ANNUITY & LIFE INSURANCE+/- 5.42 09/17/2007 36,291 13,958 INTESA BANK (IRELAND) PLC SERIES BKNT+/-++ 5.35 01/25/2008 13,958 8,375 KAUPTHING BANK SERIES MTN+/-++ 5.43 03/20/2007 8,373 2,076 KLIO FUNDING CORPORATION++ 5.33 01/25/2007 2,069 8,081 KLIO FUNDING CORPORATION++ 5.34 01/23/2007 8,056 55,833 KLIO III FUNDING CORPORATION++ 5.39 01/23/2007 55,662 22,525 LA FAYETTE ASSET SECURITIZATION CORPORATION 5.33 02/02/2007 22,423 11,074 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.37 01/12/2007 11,058 1,876 LEGACY CAPITAL CORPORATION 5.33 01/16/2007 1,872 9,873 LIBERTY LIGHTHOUSE FUNDING COMPANY 5.38 01/18/2007 9,850 13,958 LIQUID FUNDING LIMITED++ 5.34 03/05/2007 13,832 21,216 LIQUID FUNDING LIMITED++ 5.35 01/02/2007 21,216 3,350 LIQUID FUNDING LIMITED SERIES MTN+/-++ 5.32 02/20/2007 3,350 13,958 LIQUID FUNDING LIMITED SERIES MTN+/-++ 5.32 03/06/2007 13,960 5,583 MBIA GLOBAL FUNDING LLC+/-++ 5.35 02/20/2007 5,583 13,958 MORGAN STANLEY+/- 5.32 07/12/2007 13,958 13,958 MORGAN STANLEY+/- 5.50 07/27/2007 13,970 9,394 MORGAN STANLEY+/- 5.51 01/12/2007 9,394 2,582 MORGAN STANLEY SERIES EXL+/- 5.41 01/15/2008 2,582 10,002 NATIONWIDE BUILDING SOCIETY+/-++ 5.49 07/20/2007 10,011 27,916 NORTHERN ROCK PLC+/-++SS. 5.35 02/05/2008 27,920 8,214 PARAGON MORTGAGES PLC SERIES 12A+/-++ 5.33 05/15/2007 8,214 13,958 PREMIUM ASSET TRUST SERIES 06-B+/-++ 5.40 12/16/2007 13,958 2,258 RACERS TRUST SERIES 2004-6-MM+/-++ 5.37 06/22/2007 2,258 11,167 SLM CORPORATION+/-++ 5.35 01/11/2008 11,170 1,117 STANFIELD VICTORIA FUNDING++ 5.34 04/16/2007 1,100 40,199 TASMAN FUNDING INCORPORATED++ 5.39 01/22/2007 40,082 31,076 TICONDEROGA FUNDING LLC 5.37 01/30/2007 30,950 3,228 TRAVELERS INSURANCE COMPANY+/- 5.42 02/09/2007 3,228 13,958 UNICREDITO ITALIANO BANK (IRELAND) SERIES EXL+/-++ 5.36 06/15/2007 13,960 13,958 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+/-++ 5.36 03/09/2007 13,961 4,034 VERSAILLES CDS LLC++ 5.32 01/17/2007 4,025 3,383 VERSAILLES CDS LLC 5.33 03/22/2007 3,345 10,838 WHITE PINE FINANCE LLC 5.35 01/11/2007 10,824 9,603 ZELA FINANCE INCORPORATED++ 5.36 03/12/2007 9,504 1,061,010 ---------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $1,110,367) 1,110,367 ---------------- 49 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT C&B LARGE CAP VALUE FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE SHORT-TERM INVESTMENTS - 3.09% 993,983 WELLS FARGO MONEY MARKET TRUST~## $ 993,983 TOTAL SHORT-TERM INVESTMENTS (COST $993,983) 993,983 ---------------- TOTAL INVESTMENTS IN SECURITIES (COST $28,610,807)* 103.13% $ 33,174,147 OTHER ASSETS AND LIABILITIES, NET (3.13) (1,005,314) ------ ---------------- TOTAL NET ASSETS 100.00% $ 32,168,833 ====== ================ + NON-INCOME EARNING SECURITIES. << ALL OR A PORTION OF THIS SECURITY IS ON LOAN. (SEE NOTE 2) +/- VARIABLE RATE INVESTMENTS. ++ 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. SS. THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE EFFECTIVE MATURITY. ~ THIS WELLS FARGO ADVANTAGE FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY PURPOSES IN A WELLS FARGO ADVANTAGE 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 $993,983. * COST FOR FEDERAL INCOME TAX PURPOSES IS $28,634,868 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $ 5,132,828 GROSS UNREALIZED DEPRECIATION (593,549) ----------- NET UNREALIZED APPRECIATION (DEPRECIATION) $ 4,539,279 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 50 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT DISCOVERY FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCKS - 98.17% AEROSPACE, DEFENSE - 1.49% 135,433 BE AEROSPACE INCORPORATED+ $ 3,477,919 ---------------- AMUSEMENT & RECREATION SERVICES - 2.56% 23,300 HARRAH'S ENTERTAINMENT INCORPORATED 1,927,376 83,800 LIFE TIME FITNESS INCORPORATED+ 4,065,138 5,992,514 ---------------- APPAREL & ACCESSORY STORES - 3.98% 21,996 ABERCROMBIE & FITCH COMPANY CLASS A 1,531,581 77,500 AEROPOSTALE INCORPORATED+ 2,392,425 218,980 CASUAL MALE RETAIL GROUP INCORPORATED+ 2,857,689 22,539 UNDER ARMOUR INCORPORATED+ 1,137,093 60,300 URBAN OUTFITTERS INCORPORATED+ 1,388,709 9,307,497 ---------------- APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS - 1.19% 24,700 GUESS? INCORPORATED+ 1,566,721 24,200 PHILLIPS-VAN HEUSEN CORPORATION 1,214,114 2,780,835 ---------------- BUSINESS SERVICES - 11.17% 241,000 BEA SYSTEMS INCORPORATED+ 3,031,780 56,500 CERNER CORPORATION+ 2,570,750 109,100 CITRIX SYSTEMS INCORPORATED+ 2,951,155 66,500 COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION CLASS A+ 5,131,140 130,330 EMAGEON INCORPORATED+ 2,001,869 26,300 F5 NETWORKS INCORPORATED+ 1,951,723 92,900 ROBERT HALF INTERNATIONAL INCORPORATED 3,448,448 200,250 THE TRIZETTO GROUP INCORPORATED+ 3,678,593 41,635 TRANSACTION SYSTEMS ARCHITECTS INCORPORATED+ 1,356,052 26,121,510 ---------------- CHEMICALS & ALLIED PRODUCTS - 0.50% 24,614 DIGENE CORPORATION+ 1,179,503 ---------------- COMMUNICATIONS - 10.31% 144,200 AMERICAN TOWER CORPORATION CLASS A+ 5,375,776 78,600 EQUINIX INCORPORATED+ 5,943,732 40,700 LEAP WIRELESS INTERNATIONAL INCORPORATED+ 2,420,429 111,579 NII HOLDINGS INCORPORATED+ 7,190,151 59,400 SBA COMMUNICATIONS CORPORATION+ 1,633,500 108,500 XM SATELLITE RADIO HOLDINGS INCORPORATED CLASS A+ 1,567,825 24,131,413 ---------------- ELECTRIC, GAS & SANITARY SERVICES - 2.42% 103,100 COVANTA HOLDING CORPORATION+ 2,272,324 130,100 WILLIAMS COMPANIES INCORPORATED 3,398,212 5,670,536 ---------------- 51 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT DISCOVERY FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 7.54% 57,357 CIENA CORPORATION+ $ 1,589,362 76,100 CYMER INCORPORATED+ 3,344,595 4,050 FIRST SOLAR INCORPORATED+ 120,690 23,750 HARMAN INTERNATIONAL INDUSTRIES INCORPORATED 2,372,863 58,100 MEMC ELECTRONIC MATERIALS INCORPORATED+ 2,274,034 176,600 MICROSEMI CORPORATION+ 3,470,190 110,600 TESSERA TECHNOLOGIES INCORPORATED+ 4,461,604 17,633,338 ---------------- ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES - 1.11% 44,300 GEN-PROBE INCORPORATED+ 2,319,991 15,400 SAIC INCORPORATED+ 273,966 2,593,957 ---------------- FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 2.19% 138,100 LADISH COMPANY INCORPORATED+ 5,120,748 ---------------- HEALTH SERVICES - 3.03% 66,200 COVANCE INCORPORATED+ 3,899,842 65,100 PEDIATRIX MEDICAL GROUP INCORPORATED+ 3,183,390 7,083,232 ---------------- HEAVY CONSTRUCTION OTHER THAN BUILDING CONSTRUCTION CONTRACTS - 2.87% 54,409 FOSTER WHEELER LIMITED+ 3,000,112 72,800 MCDERMOTT INTERNATIONAL INCORPORATED+ 3,702,608 6,702,720 ---------------- HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES - 3.35% 174,400 HILTON HOTELS CORPORATION 6,086,560 37,200 ORIENT EXPRESS HOTELS LIMITED CLASS A 1,760,304 7,846,864 ---------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 3.86% 52,300 ASTEC INDUSTRIES INCORPORATED+ 1,835,730 54,300 GAMESTOP CORPORATION CLASS A+ 2,992,473 50,600 RACKABLE SYSTEMS INCORPORATED+ 1,567,082 40,800 TEREX CORPORATION+ 2,634,864 9,030,149 ---------------- INSURANCE CARRIERS - 2.17% 138,500 ENDURANCE SPECIALTY HOLDINGS LIMITED 5,066,330 ---------------- JUSTICE, PUBLIC ORDER & SAFETY - 0.95% 49,000 CORRECTIONS CORPORATION OF AMERICA+ 2,216,270 ---------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 8.56% 212,500 AMERICAN MEDICAL SYSTEMS HOLDINGS INCORPORATED+ 3,935,500 36,400 C.R. BARD INCORPORATED 3,020,108 81,700 DENTSPLY INTERNATIONAL INCORPORATED 2,438,745 56,400 DEXCOM INCORPORATED+ 556,104 66,500 ENERGY CONVERSION DEVICES INCORPORATED+ 2,259,670 52 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT DISCOVERY FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS (CONTINUED) 196,100 EV3 INCORPORATED+<< $ 3,378,803 47,000 HAEMONETICS CORPORATION+ 2,115,940 47,300 RESMED INCORPORATED+<< 2,328,106 20,032,976 ---------------- MEDICAL MANAGEMENT SERVICES - 1.15% 53,600 COVENTRY HEALTH CARE INCORPORATED+ 2,682,680 ---------------- METAL MINING - 3.77% 185,394 GOLDCORP INCORPORATED 5,272,605 141,200 PAN AMERICAN SILVER CORPORATION+<< 3,554,004 8,826,609 ---------------- MISCELLANEOUS RETAIL - 1.01% 96,600 COLDWATER CREEK INCORPORATED+ 2,368,632 ---------------- OIL & GAS EXTRACTION - 6.77% 28,900 CANADIAN NATURAL RESOURCES LIMITED 1,538,347 139,900 CHESAPEAKE ENERGY CORPORATION 4,064,095 70,300 NEWFIELD EXPLORATION COMPANY+ 3,230,285 160,500 TETRA TECHNOLOGIES INCORPORATED+ 4,105,590 84,600 TODCO+ 2,890,782 15,829,099 ---------------- PACKAGED FOODS - 1.34% 79,650 IHS INCORPORATED+ 3,144,582 ---------------- PERSONAL SERVICES - 0.76% 58,200 COINSTAR INCORPORATED+ 1,779,174 ---------------- PRIMARY METAL INDUSTRIES - 2.39% 71,500 PRECISION CASTPARTS CORPORATION 5,597,020 ---------------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 0.94% 42,300 NUVEEN INVESTMENTS CLASS A 2,194,524 ---------------- TRANSPORTATION BY AIR - 1.79% 87,000 AMR CORPORATION+ 2,630,010 37,900 CONTINENTAL AIRLINES INCORPORATED CLASS B+ 1,563,375 4,193,385 ---------------- TRANSPORTATION EQUIPMENT - 1.14% 26,300 SPIRIT AEROSYSTEMS HOLDINGS INCORPORATED+ 880,261 34,300 TRIUMPH GROUP INCORPORATED 1,798,349 2,678,610 ---------------- TRANSPORTATION SERVICES - 1.07% 143,350 HERTZ GLOBAL HOLDINGS INCORPORATED+<< 2,492,857 ---------------- WATER TRANSPORTATION - 0.57% 81,600 AEGEAN MARINE PETROLEUM NETWORK INCORPORATED+ 1,338,240 ---------------- 53 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT DISCOVERY FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE WHOLESALE TRADE NON-DURABLE GOODS - 2.76% 96,750 CENTRAL EUROPEAN DISTRIBUTION CORPORATION+ $ 2,873,475 66,900 MEDCO HEALTH SOLUTIONS INCORPORATED+ 3,575,136 ---------------- 6,448,611 ---------------- WHOLESALE TRADE-DURABLE GOODS - 3.46% 64,233 CONCEPTUS INCORPORATED+ 1,367,521 85,800 CYTYC CORPORATION+ 2,428,140 109,300 RELIANCE STEEL & ALUMINUM COMPANY 4,304,233 ---------------- 8,099,894 ---------------- TOTAL COMMON STOCKS (COST $196,856,302) 229,662,228 ---------------- RIGHTS - 0.00% 90,400 SEAGATE TECHNOLOGY RIGHTS+(A) 0 TOTAL RIGHTS (COST $0) 0 ---------------- COLLATERAL FOR SECURITIES LENDING - 4.01% COLLATERAL INVESTED IN MONEY MARKET FUNDS - 0.18% 11,294 FEDERATED INVESTORS PRIME OBLIGATIONS FUND 10 11,294 395,967 SCUDDER DAILY ASSETS MONEY MARKET FUND 395,967 9,427 SHORT TERM INVESTMENT COMPANY MONEY MARKET FUND 9,427 ---------------- 416,688 ---------------- PRINCIPAL INTEREST RATE MATURITY DATE COLLATERAL INVESTED IN OTHER ASSETS - 3.83% $ 42,423 AMERICAN GENERAL FINANCE CORPORATION+/-++ 5.40% 01/15/2008 42,438 117,841 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN+/-++ 5.33 04/25/2007 117,849 117,841 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN1+/-++ 5.35 10/25/2007 117,828 117,841 BANCO SANTANDER TOTTA LN+/-++ 5.35 01/16/2008 117,852 117,841 BANK OF AMERICA NA SERIES BKNT+/- 5.36 06/19/2007 117,869 77,775 BANK ONE NA (LLLINOIS) SERIES BKNT+/- 5.42 01/12/2007 77,777 16,111 BARTON CAPITAL LLC++ 5.37 01/25/2007 16,057 28,282 BEAR STEARNS & COMPANY INCORPORATED SERIES MTNB+/- 5.53 01/16/2007 28,284 1,013,433 BEAR STEARNS & COMPANY REPURCHASE AGREEMENT (MATURITY VALUE $1,014,037) 5.36 01/02/2007 1,013,433 266,462 BUCKINGHAM III CDO LLC++ 5.35 01/16/2007 265,919 47,136 CEDAR SPRINGS CAPITAL COMPANY++ 5.31 01/17/2007 47,033 15,084 CHEYNE FINANCE LLC++ 5.33 01/23/2007 15,037 108,414 CHEYNE FINANCE LLC 5.35 03/16/2007 107,261 117,841 CHEYNE FINANCE LLC SERIES MTN+/-++ 5.34 07/16/2007 117,854 908,039 CITIGROUP REPURCHASE AGREEMENT (MATURITY VALUE $908,580) 5.36 01/02/2007 908,039 21,268 CLIPPER RECEIVABLES CORPORATION 5.39 01/10/2007 21,243 176,997 CORPORATE ASSET SECURITIZATION AUSTRALIA LIMITED++ 5.35 01/29/2007 176,300 235,682 CULLINAN FINANCE CORPORATION SERIES MTN2+/-++ 5.31 06/25/2007 235,687 117,841 DEER VALLEY FUNDING LLC 5.32 01/23/2007 117,480 103,700 DEER VALLEY FUNDING LLC++ 5.35 02/27/2007 102,855 21,640 DEER VALLEY FUNDING LLC++ 5.35 02/28/2007 21,461 4,714 DEER VALLEY FUNDING LLC 5.37 01/19/2007 4,702 235,682 FIVE FINANCE INCORPORATED SERIES MTN+/-++ 5.37 06/13/2007 235,746 193,443 FOX TROT CDO LIMITED++ 5.38 01/22/2007 192,878 54 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT DISCOVERY FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 141,409 GEORGE STREET FINANCE LLC++ 5.41% 01/29/2007 $ 140,852 67,641 GOLDMAN SACHS GROUP INCORPORATED SERIES MTNB+/- 5.46 03/30/2007 67,662 9,427 HARRIER FINANCE FUNDING LLC SERIES MTN+/-++ 5.42 05/15/2007 9,430 16,498 HBOS TREASURY SERVICES PLC+/-++ 5.45 01/12/2007 16,498 169,592 HUDSON-THAMES LLC 5.32 03/21/2007 167,667 47,806 HUDSON-THAMES LLC 5.35 01/24/2007 47,652 95,786 HUDSON-THAMES LLC++ 5.36 02/20/2007 95,103 35,861 HUDSON-THAMES LLC++ 5.37 01/23/2007 35,752 8,485 HUDSON-THAMES LLC++ 5.38 02/28/2007 8,414 164,977 IBM CORPORATION SERIES MTN+/- 5.36 06/28/2007 165,048 306,387 ING USA ANNUITY & LIFE INSURANCE+/- 5.42 09/17/2007 306,387 117,841 INTESA BANK (IRELAND) PLC SERIES BKNT+/-++ 5.35 01/25/2008 117,843 70,705 KAUPTHING BANK SERIES MTN+/-++ 5.43 03/20/2007 70,688 17,525 KLIO FUNDING CORPORATION++ 5.33 01/25/2007 17,467 68,221 KLIO FUNDING CORPORATION++ 5.34 01/23/2007 68,012 471,364 KLIO III FUNDING CORPORATION++ 5.39 01/23/2007 469,922 190,167 LA FAYETTE ASSET SECURITIZATION CORPORATION 5.33 02/02/2007 189,310 93,490 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.37 01/12/2007 93,354 15,838 LEGACY CAPITAL CORPORATION 5.33 01/16/2007 15,806 83,356 LIBERTY LIGHTHOUSE FUNDING COMPANY 5.38 01/18/2007 83,162 117,841 LIQUID FUNDING LIMITED++ 5.34 03/05/2007 116,778 179,118 LIQUID FUNDING LIMITED++ 5.35 01/02/2007 179,118 28,282 LIQUID FUNDING LIMITED SERIES MTN+/-++ 5.32 02/20/2007 28,283 117,841 LIQUID FUNDING LIMITED SERIES MTN+/-++ 5.32 03/06/2007 117,855 47,136 MBIA GLOBAL FUNDING LLC+/-++ 5.35 02/20/2007 47,138 117,841 MORGAN STANLEY+/- 5.32 07/12/2007 117,841 117,841 MORGAN STANLEY+/- 5.50 07/27/2007 117,939 79,307 MORGAN STANLEY+/- 5.51 01/12/2007 79,309 21,801 MORGAN STANLEY SERIES EXL+/- 5.41 01/15/2008 21,801 84,445 NATIONWIDE BUILDING SOCIETY+/-++ 5.49 07/20/2007 84,520 235,682 NORTHERN ROCK PLC+/-++SS. 5.35 02/05/2008 235,717 69,343 PARAGON MORTGAGES PLC SERIES 12A+/-++ 5.33 05/15/2007 69,343 117,841 PREMIUM ASSET TRUST SERIES 06-B+/-++ 5.40 12/16/2007 117,841 19,067 RACERS TRUST SERIES 2004-6-MM+/-++ 5.37 06/22/2007 19,067 94,273 SLM CORPORATION+/-++ 5.35 01/11/2008 94,300 9,427 STANFIELD VICTORIA FUNDING++ 5.34 04/16/2007 9,285 339,382 TASMAN FUNDING INCORPORATED++ 5.39 01/22/2007 338,391 262,361 TICONDEROGA FUNDING LLC 5.37 01/30/2007 261,291 27,250 TRAVELERS INSURANCE COMPANY+/- 5.42 02/09/2007 27,249 117,841 UNICREDITO ITALIANO BANK (IRELAND) SERIES EXL+/-++ 5.36 06/15/2007 117,854 117,841 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+/-++ 5.36 03/09/2007 117,863 34,056 VERSAILLES CDS LLC++ 5.32 01/17/2007 33,981 28,565 VERSAILLES CDS LLC 5.33 03/22/2007 28,236 91,497 WHITE PINE FINANCE LLC 5.35 01/11/2007 91,377 81,075 ZELA FINANCE INCORPORATED++ 5.36 03/12/2007 80,264 8,957,552 ---------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $9,374,240) 9,374,240 ---------------- 55 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT DISCOVERY FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE SHORT-TERM INVESTMENTS - 2.10% 4,913,819 WELLS FARGO MONEY MARKET TRUST~++ $ 4,913,819 TOTAL SHORT-TERM INVESTMENTS (COST $4,913,819) 4,913,819 ---------------- TOTAL INVESTMENTS IN SECURITIES (COST $211,144,361)* 104.28% $ 243,950,287 OTHER ASSETS AND LIABILITIES, NET (4.28) (10,003,538) ------ ---------------- TOTAL NET ASSETS 100.00% $ 233,946,749 ====== ================ + NON-INCOME EARNING SECURITIES. << ALL OR A PORTION OF THIS SECURITY IS ON LOAN. (SEE NOTE 2) +/- VARIABLE RATE INVESTMENTS. ++ 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. (a) SECURITY FAIR VALUED IN ACCORDANCE WITH THE PROCEDURES APPROVED BY THE BOARD OF TRUSTEES. SS. THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE EFFECTIVE MATURITY. ~ THIS WELLS FARGO ADVANTAGE FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY PURPOSES IN A WELLS FARGO ADVANTAGE 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 $4,913,819. * COST FOR FEDERAL INCOME TAX PURPOSES IS $212,336,534 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $ 38,545,249 GROSS UNREALIZED DEPRECIATION (6,931,496) -------------- NET UNREALIZED APPRECIATION (DEPRECIATION) $ 31,613,753 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 56 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT EQUITY INCOME FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCKS - 99.08% BUSINESS SERVICES - 1.36% 52,900 MICROSOFT CORPORATION $ 1,579,594 ---------------- CHEMICALS & ALLIED PRODUCTS - 12.69% 54,350 ABBOTT LABORATORIES 2,647,389 16,860 AIR PRODUCTS & CHEMICALS INCORPORATED 1,184,921 17,800 COLGATE-PALMOLIVE COMPANY 1,161,272 57,300 E.I. DU PONT DE NEMOURS & COMPANY 2,791,083 86,855 PFIZER INCORPORATED 2,249,545 39,490 PROCTER & GAMBLE COMPANY 2,538,022 21,789 ROHM & HAAS COMPANY 1,113,854 21,000 WYETH 1,069,320 14,755,406 ---------------- COMMUNICATIONS - 4.23% 11,700 ALLTEL CORPORATION 707,616 48,745 AT & T INCORPORATED 1,742,634 61,549 VERIZON COMMUNICATIONS INCORPORATED 2,292,085 12,476 WINDSTREAM CORPORATION 177,409 4,919,744 ---------------- DEPOSITORY INSTITUTIONS - 14.99% 63,055 BANK OF AMERICA CORPORATION 3,366,506 91,740 CITIGROUP INCORPORATED 5,109,918 30,700 FIFTH THIRD BANCORP 1,256,551 55,870 JPMORGAN CHASE & COMPANY 2,698,521 68,500 US BANCORP 2,479,015 44,200 WACHOVIA CORPORATION 2,517,190 17,427,701 ---------------- EATING & DRINKING PLACES - 1.78% 46,750 MCDONALD'S CORPORATION 2,072,428 ---------------- ELECTRIC, GAS & SANITARY SERVICES - 6.67% 18,320 DOMINION RESOURCES INCORPORATED 1,535,949 20,822 FIRSTENERGY CORPORATION 1,255,567 33,750 FPL GROUP INCORPORATED 1,836,675 5,185 KINDER MORGAN INCORPORATED 548,314 43,900 MDU RESOURCES GROUP INCORPORATED 1,125,596 21,880 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED 1,452,394 7,754,495 ---------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 8.51% 31,575 CISCO SYSTEMS INCORPORATED+ 862,945 37,490 EMERSON ELECTRIC COMPANY 1,652,934 100,930 GENERAL ELECTRIC COMPANY 3,755,605 71,565 INTEL CORPORATION 1,449,191 49,475 MOTOROLA INCORPORATED 1,017,206 56,750 NOKIA OYJ ADR 1,153,160 9,891,041 ---------------- 57 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT EQUITY INCOME FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 2.72% 37,045 FORTUNE BRANDS INCORPORATED $ 3,163,273 ---------------- FOOD & KINDRED PRODUCTS - 1.98% 36,765 PEPSICO INCORPORATED 2,299,651 ---------------- GENERAL MERCHANDISE STORES - 2.56% 16,166 FEDERATED DEPARTMENT STORES INCORPORATED 616,410 41,340 TARGET CORPORATION 2,358,447 2,974,857 ---------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 4.42% 22,159 3M COMPANY 1,726,851 44,815 HEWLETT-PACKARD COMPANY 1,845,930 16,060 INTERNATIONAL BUSINESS MACHINES CORPORATION 1,560,229 5,133,010 ---------------- INSURANCE CARRIERS - 7.67% 26,150 ALLSTATE CORPORATION 1,702,627 35,638 AMERICAN INTERNATIONAL GROUP INCORPORATED 2,553,819 30,400 METLIFE INCORPORATED 1,793,904 53,450 ST. PAUL TRAVELERS COMPANIES INCORPORATED 2,869,731 8,920,081 ---------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 1.03% 7,715 BECTON DICKINSON & COMPANY 541,207 15,765 BIOMET INCORPORATED 650,622 1,191,829 ---------------- MISCELLANEOUS MANUFACTURING INDUSTRIES - 1.73% 30,445 JOHNSON & JOHNSON 2,009,979 ---------------- MISCELLANEOUS RETAIL - 0.53% 8,600 EXPRESS SCRIPTS INCORPORATED+ 615,760 ---------------- MOTION PICTURES - 1.92% 65,600 TIME WARNER INCORPORATED 1,428,768 23,400 WALT DISNEY COMPANY 801,918 2,230,686 ---------------- NON-DEPOSITORY CREDIT INSTITUTIONS - 2.15% 41,270 AMERICAN EXPRESS COMPANY 2,503,851 ---------------- OIL & GAS EXTRACTION - 1.80% 36,900 HALLIBURTON COMPANY 1,145,745 19,500 TIDEWATER INCORPORATED 943,020 2,088,765 ---------------- PETROLEUM REFINING & RELATED INDUSTRIES - 11.11% 22,709 BRITISH PETROLEUM PLC ADR 1,523,774 49,025 CHEVRON CORPORATION 3,604,808 44,950 CONOCOPHILLIPS 3,234,153 59,314 EXXON MOBIL CORPORATION 4,545,232 12,907,967 ---------------- 58 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT EQUITY INCOME FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE PRINTING, PUBLISHING & ALLIED INDUSTRIES - 0.08% 3,077 IDEARC INCORPORATED+<< $ 88,156 ---------------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 3.54% 2,534 AMERIPRISE FINANCIAL INCORPORATED 138,103 48,835 MORGAN STANLEY 3,976,634 4,114,737 ---------------- TOBACCO PRODUCTS - 1.76% 23,770 ALTRIA GROUP INCORPORATED 2,039,941 ---------------- TRANSPORTATION EQUIPMENT - 2.58% 39,458 HONEYWELL INTERNATIONAL INCORPORATED 1,785,080 19,500 UNITED TECHNOLOGIES CORPORATION 1,219,140 3,004,220 ---------------- WHOLESALE TRADE NON-DURABLE GOODS - 1.27% 40,240 SYSCO CORPORATION 1,479,217 ---------------- TOTAL COMMON STOCKS (COST $88,268,061) 115,166,389 ---------------- COLLATERAL FOR SECURITIES LENDING - 0.08% COLLATERAL INVESTED IN MONEY MARKET FUNDS - 0.00% 110 FEDERATED INVESTORS PRIME OBLIGATIONS FUND 10 110 3,845 SCUDDER DAILY ASSETS MONEY MARKET FUND 3,845 92 SHORT TERM INVESTMENT COMPANY MONEY MARKET FUND 92 4,047 ---------------- PRINCIPAL INTEREST RATE MATURITY DATE COLLATERAL INVESTED IN OTHER ASSETS - 0.08% $ 412 AMERICAN GENERAL FINANCE CORPORATION+/-++ 5.40% 01/15/2008 412 1,144 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN+/-++ 5.33 04/25/2007 1,145 1,144 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN1+/-++ 5.35 10/25/2007 1,144 1,144 BANCO SANTANDER TOTTA LN+/-++ 5.35 01/16/2008 1,145 1,144 BANK OF AMERICA NA SERIES BKNT+/- 5.36 06/19/2007 1,145 755 BANK ONE NA (ILLINOIS) SERIES BKNT+/- 5.42 01/12/2007 755 156 BARTON CAPITAL LLC++ 5.37 01/25/2007 156 275 BEAR STEARNS & COMPANY INCORPORATED SERIES MTNB+/- 5.53 01/16/2007 275 9,842 BEAR STEARNS & COMPANY REPURCHASE AGREEMENT (MATURITY VALUE $9,848) 5.36 01/02/2007 9,842 2,588 BUCKINGHAM III CDO LLC++ 5.35 01/16/2007 2,583 458 CEDAR SPRINGS CAPITAL COMPANY++ 5.31 01/17/2007 457 146 CHEYNE FINANCE LLC++ 5.33 01/23/2007 146 1,053 CHEYNE FINANCE LLC 5.35 03/16/2007 1,042 1,144 CHEYNE FINANCE LLC SERIES MTN+/-++ 5.34 07/16/2007 1,145 8,819 CITIGROUP REPURCHASE AGREEMENT (MATURITY VALUE $8,824) 5.36 01/02/2007 8,819 207 CLIPPER RECEIVABLES CORPORATION 5.39 01/10/2007 206 1,719 CORPORATE ASSET SECURITIZATION AUSTRALIA LIMITED++ 5.35 01/29/2007 1,712 2,289 CULLINAN FINANCE CORPORATION SERIES MTN2+/-++ 5.31 06/25/2007 2,289 1,144 DEER VALLEY FUNDING LLC 5.32 01/23/2007 1,141 1,007 DEER VALLEY FUNDING LLC++ 5.35 02/27/2007 999 210 DEER VALLEY FUNDING LLC++ 5.35 02/28/2007 208 59 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT EQUITY INCOME FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 46 DEER VALLEY FUNDING LLC 5.37% 01/19/2007 $ 46 2,289 FIVE FINANCE INCORPORATED SERIES MTN+/-++ 5.37 06/13/2007 2,289 1,879 FOX TROT CDO LIMITED++ 5.38 01/22/2007 1,873 1,373 GEORGE STREET FINANCE LLC++ 5.41 01/29/2007 1,368 657 GOLDMAN SACHS GROUP INCORPORATED SERIES MTNB+/- 5.46 03/30/2007 657 92 HARRIER FINANCE FUNDING LLC SERIES MTN+/-++ 5.42 05/15/2007 92 160 HBOS TREASURY SERVICES PLC+/-++ 5.45 01/12/2007 160 1,647 HUDSON-THAMES LLC 5.32 03/21/2007 1,628 464 HUDSON-THAMES LLC 5.35 01/24/2007 463 930 HUDSON-THAMES LLC++ 5.36 02/20/2007 924 348 HUDSON-THAMES LLC++ 5.37 01/23/2007 347 82 HUDSON-THAMES LLC++ 5.38 02/28/2007 82 1,602 IBM CORPORATION SERIES MTN+/- 5.36 06/28/2007 1,603 2,976 ING USA ANNUITY & LIFE INSURANCE+/- 5.42 09/17/2007 2,976 1,144 INTESA BANK (IRELAND) PLC SERIES BKNT+/-++ 5.35 01/25/2008 1,144 687 KAUPTHING BANK SERIES MTN+/-++ 5.43 03/20/2007 686 170 KLIO FUNDING CORPORATION++ 5.33 01/25/2007 170 663 KLIO FUNDING CORPORATION++ 5.34 01/23/2007 661 4,578 KLIO III FUNDING CORPORATION++ 5.39 01/23/2007 4,564 1,847 LA FAYETTE ASSET SECURITIZATION CORPORATION 5.33 02/02/2007 1,839 908 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.37 01/12/2007 907 154 LEGACY CAPITAL CORPORATION 5.33 01/16/2007 153 810 LIBERTY LIGHTHOUSE FUNDING COMPANY 5.38 01/18/2007 808 1,144 LIQUID FUNDING LIMITED++ 5.34 03/05/2007 1,134 1,740 LIQUID FUNDING LIMITED++ 5.35 01/02/2007 1,740 275 LIQUID FUNDING LIMITED SERIES MTN+/-++ 5.32 02/20/2007 275 1,144 LIQUID FUNDING LIMITED SERIES MTN+/-++ 5.32 03/06/2007 1,145 458 MBIA GLOBAL FUNDING LLC+/-++ 5.35 02/20/2007 458 1,144 MORGAN STANLEY+/- 5.32 07/12/2007 1,144 1,144 MORGAN STANLEY+/- 5.50 07/27/2007 1,145 770 MORGAN STANLEY+/- 5.51 01/12/2007 770 212 MORGAN STANLEY SERIES EXL+/- 5.41 01/15/2008 212 820 NATIONWIDE BUILDING SOCIETY+/-++ 5.49 07/20/2007 821 2,289 NORTHERN ROCK PLC+/-++SS. 5.35 02/05/2008 2,289 673 PARAGON MORTGAGES PLC SERIES 12A+/-++ 5.33 05/15/2007 673 1,144 PREMIUM ASSET TRUST SERIES 06-B+/-++ 5.40 12/16/2007 1,144 185 RACERS TRUST SERIES 2004-6-MM+/-++ 5.37 06/22/2007 185 916 SLM CORPORATION+/-++ 5.35 01/11/2008 916 92 STANFIELD VICTORIA FUNDING++ 5.34 04/16/2007 90 3,296 TASMAN FUNDING INCORPORATED++ 5.39 01/22/2007 3,286 2,548 TICONDEROGA FUNDING LLC 5.37 01/30/2007 2,534 265 TRAVELERS INSURANCE COMPANY+/- 5.42 02/09/2007 265 1,144 UNICREDITO ITALIANO BANK (IRELAND) SERIES EXL+/-++ 5.36 06/15/2007 1,145 1,144 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+/-++ 5.36 03/09/2007 1,145 331 VERSAILLES CDS LLC++ 5.32 01/17/2007 330 277 VERSAILLES CDS LLC 5.33 03/22/2007 274 60 PORTFOLIO OF INVESTMENTS--DECEMBER 31,2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT EQUITY INCOME FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 889 WHITE PINE FINANCE LLC 5.35% 01/11/2007 $ 887 787 ZELA FINANCE INCORPORATED++ 5.36 03/12/2007 779 86,992 ---------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $91,039) 91,039 ---------------- SHARES SHORT-TERM INVESTMENTS - 0.87% 1,005,507 WELLS FARGO MONEY MARKET TRUST~## 1,005,507 ---------------- TOTAL SHORT-TERM INVESTMENTS (COST $1,005,507) 1,005,507 ---------------- TOTAL INVESTMENTS IN SECURITIES (COST $89,364,607)* 100.03% $ 116,262,935 OTHER ASSETS AND LIABILITIES, NET (0.03) (30,733) ------ ---------------- TOTAL NET ASSETS 100.00% $ 116,232,202 ====== ---------------- + NON-INCOME EARNING SECURITIES. << ALL OR A PORTION OF THIS SECURITY IS ON LOAN. +/- VARIABLE RATE INVESTMENTS. ++ 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. SS. THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE EFFECTIVE MATURITY. ~ THIS WELLS FARGO ADVANTAGE FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY PURPOSES IN A WELLS FARGO ADVANTAGE 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 $1,005,507. * COST FOR FEDERAL INCOME TAX PURPOSES IS $89,457,823 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $ 28,061,033 GROSS UNREALIZED DEPRECIATION (1,255,921) ------------ NET UNREALIZED APPRECIATION (DEPRECIATION) $ 26,805,112 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 61 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT INTERNATIONAL CORE FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCKS - 97.82% AUSTRALIA - 3.53% 17,000 ORICA LIMITED (MISCELLANEOUS MANUFACTURING INDUSTRIES) $ 326,079 24,447 PUBLISHING & BROADCASTING LIMITED (PRINTING, PUBLISHING & ALLIED INDUSTRIES) 411,994 17,000 QBE INSURANCE GROUP LIMITED (INSURANCE CARRIERS) 387,135 7,459 RIO TINTO LIMITED (METAL MINING) 437,459 1,562,667 ---------------- AUSTRIA - 0.54% 8,900 TELEKOM AUSTRIA AG (COMMUNICATIONS) 238,493 ---------------- BELGIUM - 2.46% 5,000 BELGACOM SA (COMMUNICATIONS) 220,249 4,000 DELHAIZE GROUP (FOOD STORES) 333,443 12,600 FORTIS (DEPOSITORY INSTITUTIONS) 537,565 1,091,257 ---------------- DENMARK - 0.16% 709 CARLSBERG A/S (FOOD & KINDRED PRODUCTS) 70,413 ---------------- FRANCE - 12.36% 4,900 ALSTOM RGPT (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT)+ 664,286 17,033 AXA SA (INSURANCE CARRIERS) 689,608 8,600 BOUYGUES SA (ENGINEERING CONSTRUCTION) 552,067 8,166 CAP GEMINI SA (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 512,565 6,300 CARREFOUR SA (FOOD STORES) 382,050 3,544 COMPAGNIE GENERALE DES ESTABLISSEMENTS MICHELIN (RUBBER & MISCELLANEOUS PLASTICS PRODUCTS) 339,172 4,274 LVMH MOET HENNESSY LOUIS VUITTON SA (CONSUMER SERVICES) 451,068 5,917 TECHNIP SA (OIL & GAS EXTRACTION) 406,157 16,000 TOTAL SA (OIL & GAS EXTRACTION) 1,154,247 8,400 VIVENDI UNIVERSAL SA (COMMUNICATIONS) 328,327 5,479,547 ---------------- GERMANY - 8.75% 3,500 ALLIANZ AG (INSURANCE CARRIERS) 715,016 4,400 BAYERISCHE MOTOREN WERKE AG (AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS) 252,715 14,786 COMMERZBANK AG (DEPOSITORY INSTITUTIONS) 563,100 7,800 DAIMLERCHRYSLER AG (TRANSPORTATION EQUIPMENT) 481,869 3,500 E.ON AG (ELECTRIC, GAS & SANITARY SERVICES) 475,091 3,100 FRESENIUS MEDICAL CARE AG (HEALTH SERVICES) 413,183 7,300 METRO AG (FOOD STORES) 465,531 9,600 SAP AG (BUSINESS SERVICES) 510,192 3,876,697 ---------------- GREECE - 0.99% 14,567 ALPHA BANK AE (DEPOSITORY INSTITUTIONS) 440,346 ---------------- HONG KONG - 5.18% 46,000 CHEUNG KONG HOLDINGS LIMITED (REAL ESTATE) 566,255 56,500 CHINA MOBILE (HONG KONG) LIMITED (COMMUNICATIONS) 488,127 352,000 CHINA PETROLEUM & CHEMICAL CORPORATION (SINOPEC) (OIL COMPANIES) 325,830 62 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT INTERNATIONAL CORE FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE HONG KONG (CONTINUED) 553,000 GUANGDONG INVESTMENT LIMITED (BUSINESS SERVICES) $ 249,544 27,560 SUN HUNG KAI PROPERTIES LIMITED (REAL ESTATE) 316,584 57,000 TELEVISION BROADCASTS LIMITED (MOTION PICTURES) 348,084 2,294,424 ---------------- ITALY - 2.55% 20,007 ENI SPA (PETROLEUM REFINING & RELATED INDUSTRIES) 672,930 52,100 UNICREDITO ITALIANO SPA (DEPOSITORY INSTITUTIONS) 456,662 1,129,592 ---------------- JAPAN - 20.60% 17,700 AEON COMPANY LIMITED (MISCELLANEOUS RETAIL) 382,988 21,000 BANK OF YOKOHAMA LIMITED (DEPOSITORY INSTITUTIONS) 164,464 20,000 DAIWA HOUSE INDUSTRY COMPANY LIMITED (BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS) 347,885 46,000 FUJITSU LIMITED (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 361,027 16,000 KAO CORPORATION (CHEMICALS & ALLIED PRODUCTS) 431,579 1,300 KEYENCE CORPORATION (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 322,146 15,900 MILLEA HOLDINGS INCORPORATED (INSURANCE CARRIERS) 561,153 56 MITSUBISHI UFJ FINANCIAL GROUP INCORPORATED (DEPOSITORY INSTITUTIONS) 691,736 37,000 MITSUI & COMPANY LIMITED (WHOLESALE TRADE-DURABLE GOODS) 553,422 28,000 MITSUI SUMITOMO INSURANCE COMPANY LIMITED (INSURANCE CARRIERS) 306,340 6,400 MURATA MANUFACTURING COMPANY LIMITED (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 432,923 6,000 NGK INSULATORS LIMITED (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 92,668 10,000 NIKKO CORDIAL CORPORATION (FINANCIAL) 114,701 50,000 NIPPON OIL CORPORATION (OIL & GAS EXTRACTION) 334,440 45,000 NISSAN MOTOR COMPANY LIMITED (AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS) 541,868 24,400 NOMURA HOLDINGS INCORPORATED (SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES) 460,300 202 NTT DOCOMO INCORPORATED (COMMUNICATIONS) 319,113 16,400 OMRON CORPORATION (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 465,796 11,000 SECOM COMPANY LIMITED (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 570,312 22,000 SEKISUI HOUSE LIMITED (BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS) 320,373 15,700 SONY CORPORATION (HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES) 672,829 65,000 SUMITOMO TRUST & BANKING COMPANY LIMITED (DEPOSITORY INSTITUTIONS) 681,652 9,129,715 ---------------- NETHERLANDS - 5.16% 6,104 AKZO NOBEL NV (CHEMICALS & ALLIED PRODUCTS) 372,340 24,000 ASML HOLDING NV (SEMICONDUCTOR EQUIPMENT MANUFACTURING & RELATED)+ 596,871 14,000 ING GROEP NV (FINANCIAL SERVICES) 620,764 16,100 KONINKLIJKE (ROYAL) KPN NV (COMMUNICATIONS) 228,892 16,200 WOLTERS KLUWER NV (PRINTING, PUBLISHING & ALLIED INDUSTRIES) 465,973 2,284,840 ---------------- NORWAY - 1.11% 518 ORKLA ASA (FOOD & KINDRED PRODUCTS) 29,326 17,487 STATOIL ASA (PETROLEUM REFINING & RELATED INDUSTRIES) 463,454 492,780 ---------------- 63 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT INTERNATIONAL CORE FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE RUSSIA - 0.46% 2,300 LUKOIL ADR (OIL & GAS EXTRACTION) $ 202,285 ---------------- SINGAPORE - 1.99% 152,000 CAPITALAND LIMITED (REAL ESTATE) 614,442 21,000 UNITED OVERSEAS BANK LIMITED (DEPOSITORY INSTITUTIONS) 265,623 880,065 ---------------- SPAIN - 1.72% 20,000 BANCO BILBAO VIZCAYA ARGENTARIA SA (DEPOSITORY INSTITUTIONS) 481,552 11,418 INDRA SISTEMAS SA (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 280,495 762,047 ---------------- SWEDEN - 2.08% 12,300 SKANSKA AB (HEAVY CONSTRUCTION OTHER THAN BUILDING CONSTRUCTION CONTRACTS) 242,552 6,538 SWEDBANK AB (DEPOSITORY INSTITUTIONS) 237,322 110,000 TELEFONAKTIEBOLAGET LM ERICSSON CLASS B (COMMUNICATIONS) 444,277 924,151 ---------------- SWITZERLAND - 8.89% 5,200 HOLCIM LIMITED (BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS) 476,684 17,000 NOVARTIS AG (CHEMICALS & ALLIED PRODUCTS) 980,098 6,600 ROCHE HOLDING AG (HEALTH SERVICES) 1,183,504 600 SWISSCOM AG (COMMUNICATIONS) 227,124 8,400 UBS AG (SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES) 510,480 2,089 ZURICH FINANCIAL SERVICES AG (FINANCIAL SERVICES) 562,324 3,940,214 ---------------- UNITED KINGDOM - 19.29% 52,043 AVIVA PLC (INSURANCE CARRIERS) 837,612 57,000 BAE SYSTEMS PLC (TRANSPORTATION BY AIR) 475,158 37,100 BARCLAYS PLC (DEPOSITORY INSTITUTIONS) 530,280 43,000 BRITISH SKY BROADCASTING PLC (COMMUNICATIONS) 439,489 17,741 EMAP PLC (PRINTING, PUBLISHING & ALLIED INDUSTRIES) 280,498 42,600 GLAXOSMITHKLINE PLC (CHEMICALS & ALLIED PRODUCTS) 1,121,031 24,414 HSBC HOLDINGS PLC (DEPOSITORY INSTITUTIONS) 445,038 195,000 LEGAL & GENERAL GROUP PLC (INSURANCE CARRIERS) 601,345 34,522 NATIONAL GRID PLC (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 498,164 74,273 ROLLS ROYCE GROUP PLC (AEROSPACE, DEFENSE)+ 651,141 2,725,819 ROLLS ROYCE GROUP PLC CLASS B (AEROSPACE, DEFENSE) 5,417 26,300 ROYAL DUTCH SHELL PLC CLASS A (OIL & GAS EXTRACTION) 919,184 29,000 SCOTTISH & NEWCASTLE PLC (FOOD & KINDRED PRODUCTS) 317,692 19,129 SMITHS GROUP PLC (MISCELLANEOUS MANUFACTURING INDUSTRIES) 371,359 381,500 VODAFONE GROUP PLC (COMMUNICATIONS) 1,056,961 8,550,369 ---------------- TOTAL COMMON STOCKS (COST $34,167,622) 43,349,902 ---------------- 64 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT INTERNATIONAL CORE FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE SHORT-TERM INVESTMENTS - 1.64% 726,912 WELLS FARGO MONEY MARKET TRUST~++ $ 726,912 TOTAL SHORT-TERM INVESTMENTS (COST $726,912) 726,912 ---------------- TOTAL INVESTMENTS IN SECURITIES (COST $34,894,534)* 99.46% $ 44,076,814 OTHER ASSETS AND LIABILITIES, NET 0.54 240,036 ------ ---------------- TOTAL NET ASSETS 100.00% $ 44,316,850 ====== ================ + NON-INCOME EARNING SECURITIES. ~ THIS WELLS FARGO ADVANTAGE FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY PURPOSES IN A WELLS FARGO ADVANTAGE 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 $726,912. * COST FOR FEDERAL INCOME TAX PURPOSES IS $34,959,032 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $9,460,516 GROSS UNREALIZED DEPRECIATION (342,734) ---------- NET UNREALIZED APPRECIATION (DEPRECIATION) $9,117,782 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 65 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT LARGE COMPANY CORE FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCKS - 98.90% APPAREL & ACCESSORY STORES - 5.99% 42,200 GAP INCORPORATED $ 822,900 23,700 ROSS STORES INCORPORATED 694,410 1,517,310 ---------------- BUSINESS SERVICES - 7.56% 36,000 FIRST DATA CORPORATION 918,720 33,396 MICROSOFT CORPORATION 997,205 1,915,925 ---------------- CHEMICALS & ALLIED PRODUCTS - 13.28% 29,100 MEDIMMUNE INCORPORATED+<< 941,967 33,000 PFIZER INCORPORATED 854,700 24,000 TEVA PHARMACEUTICAL INDUSTRIES LIMITED ADR 745,920 16,200 WYETH 824,904 3,367,491 ---------------- COMMUNICATIONS - 3.80% 23,000 COMCAST CORPORATION SPECIAL CLASS A+ 963,240 ---------------- DEPOSITORY INSTITUTIONS - 15.16% 15,200 BANK OF AMERICA CORPORATION 811,528 22,500 BANK OF NEW YORK COMPANY INCORPORATED 885,825 18,200 CITIGROUP INCORPORATED 1,013,740 15,000 JPMORGAN CHASE & COMPANY 724,500 18,200 WESTERN UNION COMPANY 408,044 3,843,637 ---------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 16.25% 13,000 AMERICAN POWER CONVERSION CORPORATION 397,670 2,500 ANALOG DEVICES INCORPORATED 82,175 23,400 CISCO SYSTEMS INCORPORATED+ 639,522 26,200 GENERAL ELECTRIC COMPANY 974,902 39,800 INTEL CORPORATION 805,950 14,900 NOVELLUS SYSTEMS INCORPORATED+ 512,858 52,100 VISHAY INTERTECHNOLOGY INCORPORATED+ 705,434 4,118,511 ---------------- GENERAL MERCHANDISE STORES - 7.33% 60,000 DOLLAR GENERAL CORPORATION 963,600 19,370 WAL-MART STORES INCORPORATED 894,507 1,858,107 ---------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 4.15% 2,100 3M COMPANY 163,653 59,500 SYMBOL TECHNOLOGIES INCORPORATED 888,930 1,052,583 ---------------- INSURANCE CARRIERS - 3.96% 14,000 AMERICAN INTERNATIONAL GROUP INCORPORATED 1,003,240 ---------------- 66 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT LARGE COMPANY CORE FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 2.20% 32,500 BOSTON SCIENTIFIC CORPORATION+ $ 558,350 ---------------- MISCELLANEOUS MANUFACTURING INDUSTRIES - 4.84% 4,500 JOHNSON & JOHNSON 297,090 30,600 TYCO INTERNATIONAL LIMITED 930,240 1,227,330 ---------------- MOTION PICTURES - 4.60% 53,500 TIME WARNER INCORPORATED 1,165,230 ---------------- PETROLEUM REFINING & RELATED INDUSTRIES - 4.06% 10,000 CHEVRON CORPORATION 735,300 4,100 CONOCOPHILLIPS 294,995 1,030,295 ---------------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 5.72% 5,600 MERRILL LYNCH & COMPANY INCORPORATED 521,360 11,400 MORGAN STANLEY 928,301 1,449,661 ---------------- TOTAL COMMON STOCKS (COST $22,649,425) 25,070,910 ---------------- COLLATERAL FOR SECURITIES LENDING - 3.91% COLLATERAL INVESTED IN MONEY MARKET FUNDS - 0.17% 1,196 FEDERATED INVESTORS PRIME OBLIGATIONS FUND 10 1,196 41,915 SCUDDER DAILY ASSETS MONEY MARKET FUND 41,915 998 SHORT TERM INVESTMENT COMPANY MONEY MARKET FUND 998 44,109 ---------------- PRINCIPAL INTEREST RATE MATURITY DATE COLLATERAL INVESTED IN OTHER ASSETS - 3.74% $ 4,491 AMERICAN GENERAL FINANCE CORPORATION+/-++ 5.40% 01/15/2008 4,492 12,474 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN+/-++ 5.33 04/25/2007 12,475 12,474 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN1+/-++ 5.35 10/25/2007 12,473 12,474 BANCO SANTANDER TOTTA LOAN+/-++ 5.35 01/16/2008 12,475 12,474 BANK OF AMERICA NA SERIES BKNT+/- 5.36 06/19/2007 12,477 8,233 BANK ONE NA (LLLINOIS) SERIES BKNT+/- 5.42 01/12/2007 8,233 1,705 BARTON CAPITAL LLC++ 5.37 01/25/2007 1,700 2,994 BEAR STEARNS & COMPANY INCORPORATED SERIES MTNB+/- 5.53 01/16/2007 2,994 107,278 BEAR STEARNS & COMPANY REPURCHASE AGREEMENT (MATURITY VALUE $107,342) 5.36 01/02/2007 107,278 28,207 BUCKINGHAM III CDO LLC++ 5.35 01/16/2007 28,149 4,990 CEDAR SPRINGS CAPITAL COMPANY++ 5.31 01/17/2007 4,979 1,597 CHEYNE FINANCE LLC++ 5.33 01/23/2007 1,592 11,476 CHEYNE FINANCE LLC 5.35 03/16/2007 11,354 12,474 CHEYNE FINANCE LLC SERIES MTN+/-++ 5.34 07/16/2007 12,476 96,121 CITIGROUP REPURCHASE AGREEMENT (MATURITY VALUE $96,178) 5.36 01/02/2007 96,121 2,251 CLIPPER RECEIVABLES CORPORATION 5.39 01/10/2007 2,249 18,736 CORPORATE ASSET SECURITIZATION AUSTRALIA LIMITED++ 5.35 01/29/2007 18,662 24,948 CULLINAN FINANCE CORPORATION SERIES MTN2+/-++ 5.31 06/25/2007 24,949 12,474 DEER VALLEY FUNDING LLC 5.32 01/23/2007 12,436 67 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT LARGE COMPANY CORE FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 10,977 DEER VALLEY FUNDING LLC++ 5.35% 02/27/2007 $ 10,888 2,291 DEER VALLEY FUNDING LLC++ 5.35 02/28/2007 2,272 499 DEER VALLEY FUNDING LLC 5.37 01/19/2007 498 24,948 FIVE FINANCE INCORPORATED SERIES MTN+/-++ 5.37 06/13/2007 24,955 20,477 FOX TROT CDO LIMITED++ 5.38 01/22/2007 20,417 14,969 GEORGE STREET FINANCE LLC++ 5.41 01/29/2007 14,910 7,160 GOLDMAN SACHS GROUP INCORPORATED SERIES MTNB+/- 5.46 03/30/2007 7,162 998 HARRIER FINANCE FUNDING LLC SERIES MTN+/-++ 5.42 05/15/2007 998 1,746 HBOS TREASURY SERVICES PLC+/-++ 5.45 01/12/2007 1,746 17,952 HUDSON-THAMES LLC 5.32 03/21/2007 17,749 5,061 HUDSON-THAMES LLC 5.35 01/24/2007 5,044 10,140 HUDSON-THAMES LLC++ 5.36 02/20/2007 10,067 3,796 HUDSON-THAMES LLC++ 5.37 01/23/2007 3,785 898 HUDSON-THAMES LLC++ 5.38 02/28/2007 891 17,464 IBM CORPORATION SERIES MTN+/- 5.36 06/28/2007 17,471 32,433 ING USA ANNUITY & LIFE INSURANCE+/- 5.42 09/17/2007 32,433 12,474 INTESA BANK (IRELAND) PLC SERIES BKNT+/-++ 5.35 01/25/2008 12,474 7,485 KAUPTHING BANK SERIES MTN+/-++ 5.43 03/20/2007 7,483 1,855 KLIO FUNDING CORPORATION++ 5.33 01/25/2007 1,849 7,222 KLIO FUNDING CORPORATION++ 5.34 01/23/2007 7,199 49,897 KLIO III FUNDING CORPORATION++ 5.39 01/23/2007 49,744 20,130 LA FAYETTE ASSET SECURITIZATION CORPORATION 5.33 02/02/2007 20,040 9,897 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.37 01/12/2007 9,882 1,677 LEGACY CAPITAL CORPORATION 5.33 01/16/2007 1,673 8,824 LIBERTY LIGHTHOUSE FUNDING COMPANY 5.38 01/18/2007 8,803 12,474 LIQUID FUNDING LIMITED++ 5.34 03/05/2007 12,362 18,961 LIQUID FUNDING LIMITED++ 5.35 01/02/2007 18,961 2,994 LIQUID FUNDING LIMITED SERIES MTN+/-++ 5.32 02/20/2007 2,994 12,474 LIQUID FUNDING LIMITED SERIES MTN+/-++ 5.32 03/06/2007 12,476 4,990 MBIA GLOBAL FUNDING LLC+/-++ 5.35 02/20/2007 4,990 12,474 MORGAN STANLEY+/- 5.32 07/12/2007 12,474 12,474 MORGAN STANLEY+/- 5.50 07/27/2007 12,485 8,395 MORGAN STANLEY+/- 5.51 01/12/2007 8,395 2,308 MORGAN STANLEY SERIES EXL+/- 5.41 01/15/2008 2,308 8,939 NATIONWIDE BUILDING SOCIETY+/-++ 5.49 07/20/2007 8,947 24,948 NORTHERN ROCK PLC+/-++SS. 5.35 02/05/2008 24,952 7,340 PARAGON MORTGAGES PLC SERIES 12A+/-++ 5.33 05/15/2007 7,340 12,474 PREMIUM ASSET TRUST SERIES 06-B+/-++ 5.40 12/16/2007 12,474 2,018 RACERS TRUST SERIES 2004-6-MM+/-++ 5.37 06/22/2007 2,018 9,979 SLM CORPORATION+/-++ 5.35 01/11/2008 9,982 998 STANFIELD VICTORIA FUNDING++ 5.34 04/16/2007 983 35,926 TASMAN FUNDING INCORPORATED++ 5.39 01/22/2007 35,821 27,773 TICONDEROGA FUNDING LLC 5.37 01/30/2007 27,659 2,885 TRAVELERS INSURANCE COMPANY+/- 5.42 02/09/2007 2,884 12,474 UNICREDITO ITALIANO BANK (IRELAND) SERIES EXL+/-++ 5.36 06/15/2007 12,476 12,474 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+/-++ 5.36 03/09/2007 12,477 3,605 VERSAILLES CDS LLC++ 5.32 01/17/2007 3,597 68 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT LARGE COMPANY CORE FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 3,024 VERSAILLES CDS LLC 5.33% 03/22/2007 $ 2,989 9,685 WHITE PINE FINANCE LLC 5.35 01/11/2007 9,673 8,582 ZELA FINANCE INCORPORATED++ 5.36 03/12/2007 8,496 948,210 ---------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $992,319) 992,319 ---------------- SHARES SHORT-TERM INVESTMENTS - 1.18% 297,686 WELLS FARGO MONEY MARKET TRUST~++ 297,686 TOTAL SHORT-TERM INVESTMENTS (COST $297,686) 297,686 ---------------- TOTAL INVESTMENTS IN SECURITIES (COST $23,939,430)* 103.99% $ 26,360,915 OTHER ASSETS AND LIABILITIES, NET (3.99) (1,011,664) ------ ---------------- TOTAL NET ASSETS 100.00% $ 25,349,251 ====== ================ + NON-INCOME EARNING SECURITIES. << ALL OR A PORTION OF THIS SECURITY IS ON LOAN. (SEE NOTE 2) +/- VARIABLE RATE INVESTMENTS. ++ 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. SS. THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE EFFECTIVE MATURITY. ~ THIS WELLS FARGO ADVANTAGE FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY PURPOSES IN A WELLS FARGO ADVANTAGE 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 $297,686. * COST FOR FEDERAL INCOME TAX PURPOSES IS $23,996,875 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $3,216,538 GROSS UNREALIZED DEPRECIATION (852,498) ---------- NET UNREALIZED APPRECIATION (DEPRECIATION) $2,364,040 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 69 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT LARGE COMPANY GROWTH FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCKS - 97.76% APPAREL & ACCESSORY STORES - 2.21% 35,000 KOHLS CORPORATION+ $ 2,395,050 ---------------- BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS - 6.08% 54,000 FASTENAL COMPANY<< 1,937,520 45,100 HOME DEPOT INCORPORATED 1,811,216 91,800 LOWE'S COMPANIES INCORPORATED 2,859,570 6,608,306 ---------------- BUSINESS SERVICES - 18.21% 24,500 AUTOMATIC DATA PROCESSING INCORPORATED 1,206,625 206,600 EBAY INCORPORATED+ 6,212,462 54,800 FIRST DATA CORPORATION 1,398,496 7,700 GOOGLE INCORPORATED CLASS A+ 3,545,696 212,200 MICROSOFT CORPORATION 6,336,292 42,400 YAHOO! INCORPORATED+ 1,082,896 19,782,467 ---------------- CHEMICALS & ALLIED PRODUCTS - 8.30% 50,500 AMGEN INCORPORATED+ 3,449,655 49,500 GENENTECH INCORPORATED+ 4,015,935 25,100 GENZYME CORPORATION+ 1,545,658 9,011,248 ---------------- DEPOSITORY INSTITUTIONS - 1.13% 54,800 WESTERN UNION COMPANY 1,228,616 ---------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 16.00% 230,500 CISCO SYSTEMS INCORPORATED+ 6,299,565 142,900 INTEL CORPORATION 2,893,725 61,300 LINEAR TECHNOLOGY CORPORATION 1,858,616 185,400 NOKIA OYJ ADR 3,767,328 88,700 TEXAS INSTRUMENTS INCORPORATED 2,554,560 17,373,794 ---------------- ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES - 4.12% 113,250 PAYCHEX INCORPORATED 4,477,905 ---------------- GENERAL MERCHANDISE STORES - 4.96% 64,900 TARGET CORPORATION 3,702,545 36,600 WAL-MART STORES INCORPORATED 1,690,188 5,392,733 ---------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 1.01% 82,800 EMC CORPORATION+ 1,092,960 ---------------- INSURANCE CARRIERS - 4.48% 67,875 AMERICAN INTERNATIONAL GROUP INCORPORATED 4,863,923 ---------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 5.84% 118,575 MEDTRONIC INCORPORATED 6,344,948 ---------------- 70 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT LARGE COMPANY GROWTH FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE PERSONAL SERVICES - 2.00% 54,800 CINTAS CORPORATION $ 2,176,108 ---------------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 22.45% 306,750 CHARLES SCHWAB CORPORATION 5,932,545 40,900 FRANKLIN RESOURCES INCORPORATED 4,505,953 53,775 GOLDMAN SACHS GROUP INCORPORATED 10,720,046 34,000 LEGG MASON INCORPORATED 3,231,700 24,390,244 ---------------- TRANSPORTATION SERVICES - 0.97% 25,700 CH ROBINSON WORLDWIDE INCORPORATED 1,050,873 ---------------- TOTAL COMMON STOCKS (COST $96,378,061) 106,189,175 ---------------- COLLATERAL FOR SECURITIES LENDING - 1.82% COLLATERAL INVESTED IN MONEY MARKET FUNDS - 0.08% 2,382 FEDERATED INVESTORS PRIME OBLIGATIONS FUND 10 2,382 83,500 SCUDDER DAILY ASSETS MONEY MARKET FUND 83,500 1,988 SHORT TERM INVESTMENT COMPANY MONEY MARKET FUND 1,988 87,870 ---------------- PRINCIPAL INTEREST RATE MATURITY DATE COLLATERAL INVESTED IN OTHER ASSETS - 1.74% $ 8,946 AMERICAN GENERAL FINANCE CORPORATION+/-++ 5.40% 01/15/2008 8,949 24,850 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN+/-++ 5.33 04/25/2007 24,852 24,850 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN1+/-++ 5.35 10/25/2007 24,847 24,850 BANCO SANTANDER TOTTA LOAN+/-++ 5.35 01/16/2008 24,852 24,850 BANK OF AMERICA NA SERIES BKNT+/- 5.36 06/19/2007 24,856 16,401 BANK ONE NA (ILLINOIS) SERIES BKNT+/- 5.42 01/12/2007 16,401 3,398 BARTON CAPITAL LLC++ 5.37 01/25/2007 3,386 213,710 BEAR STEARNS & COMPANY INCORPORATED REPURCHASE AGREEMENT (MATURITY VALUE $213,838) 5.36 01/02/2007 213,710 5,964 BEAR STEARNS & COMPANY INCORPORATED SERIES MTNB+/- 5.53 01/16/2007 5,964 56,191 BUCKINGHAM III CDO LLC++ 5.35 01/16/2007 56,076 9,940 CEDAR SPRINGS CAPITAL COMPANY++ 5.31 01/17/2007 9,918 3,181 CHEYNE FINANCE LLC++ 5.33 01/23/2007 3,171 22,862 CHEYNE FINANCE LLC 5.35 03/16/2007 22,619 24,850 CHEYNE FINANCE LLC SERIES MTN+/-++ 5.34 07/16/2007 24,853 191,485 CITIGROUP REPURCHASE AGREEMENT (MATURITY VALUE $191,599) 5.36 01/02/2007 191,485 4,485 CLIPPER RECEIVABLES CORPORATION 5.39 01/10/2007 4,480 37,325 CORPORATE ASSET SECURITIZATION AUSTRALIA LIMITED++ 5.35 01/29/2007 37,178 49,700 CULLINAN FINANCE CORPORATION SERIES MTN2+/-++ 5.31 06/25/2007 49,701 24,850 DEER VALLEY FUNDING LLC 5.32 01/23/2007 24,774 21,868 DEER VALLEY FUNDING LLC++ 5.35 02/27/2007 21,690 4,563 DEER VALLEY FUNDING LLC++ 5.35 02/28/2007 4,526 994 DEER VALLEY FUNDING LLC 5.37 01/19/2007 992 49,700 FIVE FINANCE INCORPORATED SERIES MTN+/-++ 5.37 06/13/2007 49,713 40,793 FOX TROT CDO LIMITED++ 5.38 01/22/2007 40,674 29,820 GEORGE STREET FINANCE LLC++ 5.41 01/29/2007 29,703 71 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT LARGE COMPANY GROWTH FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 14,264 GOLDMAN SACHS GROUP INCORPORATED SERIES MTNB+/- 5.46% 03/30/2007 $ 14,268 1,988 HARRIER FINANCE FUNDING LLC SERIES MTN+/-++ 5.42 05/15/2007 1,989 3,479 HBOS TREASURY SERVICES PLC+/-++ 5.45 01/12/2007 3,479 35,763 HUDSON-THAMES LLC 5.32 03/21/2007 35,357 10,081 HUDSON-THAMES LLC 5.35 01/24/2007 10,049 20,199 HUDSON-THAMES LLC++ 5.36 02/20/2007 20,055 7,562 HUDSON-THAMES LLC++ 5.37 01/23/2007 7,539 1,789 HUDSON-THAMES LLC++ 5.38 02/28/2007 1,774 34,790 IBM CORPORATION SERIES MTN+/- 5.36 06/28/2007 34,805 64,610 ING USA ANNUITY & LIFE INSURANCE+/- 5.42 09/17/2007 64,610 24,850 INTESA BANK (IRELAND) PLC SERIES BKNT+/-++ 5.35 01/25/2008 24,851 14,910 KAUPTHING BANK SERIES MTN+/-++ 5.43 03/20/2007 14,906 3,696 KLIO FUNDING CORPORATION++ 5.33 01/25/2007 3,683 14,386 KLIO FUNDING CORPORATION++ 5.34 01/23/2007 14,342 99,400 KLIO III FUNDING CORPORATION++ 5.39 01/23/2007 99,096 40,102 LA FAYETTE ASSET SECURITIZATION CORPORATION 5.33 02/02/2007 39,921 19,715 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.37 01/12/2007 19,686 3,340 LEGACY CAPITAL CORPORATION 5.33 01/16/2007 3,333 17,578 LIBERTY LIGHTHOUSE FUNDING COMPANY 5.38 01/18/2007 17,537 24,850 LIQUID FUNDING LIMITED++ 5.34 03/05/2007 24,626 37,772 LIQUID FUNDING LIMITED++ 5.35 01/02/2007 37,772 5,964 LIQUID FUNDING LIMITED SERIES MTN+/-++ 5.32 02/20/2007 5,964 24,850 LIQUID FUNDING LIMITED SERIES MTN+/-++ 5.32 03/06/2007 24,853 9,940 MBIA GLOBAL FUNDING LLC+/-++ 5.35 02/20/2007 9,940 24,850 MORGAN STANLEY+/- 5.32 07/12/2007 24,850 24,850 MORGAN STANLEY+/- 5.50 07/27/2007 24,871 16,724 MORGAN STANLEY+/- 5.51 01/12/2007 16,725 4,597 MORGAN STANLEY SERIES EXL+/- 5.41 01/15/2008 4,597 17,808 NATIONWIDE BUILDING SOCIETY+/-++ 5.49 07/20/2007 17,823 49,700 NORTHERN ROCK PLC+/-++SS. 5.35 02/05/2008 49,708 14,623 PARAGON MORTGAGES PLC SERIES 12A+/-++ 5.33 05/15/2007 14,623 24,850 PREMIUM ASSET TRUST SERIES 06-B+/-++ 5.40 12/16/2007 24,850 4,021 RACERS TRUST SERIES 2004-6-MM+/-++ 5.37 06/22/2007 4,021 19,880 SLM CORPORATION+/-++ 5.35 01/11/2008 19,886 1,988 STANFIELD VICTORIA FUNDING++ 5.34 04/16/2007 1,958 71,568 TASMAN FUNDING INCORPORATED++ 5.39 01/22/2007 71,359 55,326 TICONDEROGA FUNDING LLC 5.37 01/30/2007 55,100 5,746 TRAVELERS INSURANCE COMPANY+/- 5.42 02/09/2007 5,746 24,850 UNICREDITO ITALIANO BANK (IRELAND) SERIES EXL+/-++ 5.36 06/15/2007 24,853 24,850 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+/-++ 5.36 03/09/2007 24,855 7,182 VERSAILLES CDS LLC++ 5.32 01/17/2007 7,166 6,024 VERSAILLES CDS LLC 5.33 03/22/2007 5,954 19,295 WHITE PINE FINANCE LLC 5.35 01/11/2007 19,269 17,097 ZELA FINANCE INCORPORATED++ 5.36 03/12/2007 16,927 1,888,946 ---------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $1,976,816) 1,976,816 ---------------- 72 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT LARGE COMPANY GROWTH FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE SHORT-TERM INVESTMENTS - 2.05% 2,221,474 WELLS FARGO MONEY MARKET TRUST~## $ 2,221,474 TOTAL SHORT-TERM INVESTMENTS (COST $2,221,474) 2,221,474 ---------------- TOTAL INVESTMENTS IN SECURITIES (COST $100,576,351)* 101.63% $ 110,387,465 OTHER ASSETS AND LIABILITIES, NET (1.63) (1,766,451) ------ ---------------- TOTAL NET ASSETS 100.00% $ 108,621,014 ====== ================ + NON-INCOME EARNING SECURITIES. << ALL OR A PORTION OF THIS SECURITY IS ON LOAN. (SEE NOTE 2) +/- VARIABLE RATE INVESTMENTS. ++ 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. SS. THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE EFFECTIVE MATURITY. ~ THIS WELLS FARGO ADVANTAGE FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY PURPOSES IN A WELLS FARGO ADVANTAGE 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 $2,221,474. * COST FOR FEDERAL INCOME TAX PURPOSES IS $101,970,893 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $17,577,505 GROSS UNREALIZED DEPRECIATION (9,160,933) ----------- NET UNREALIZED APPRECIATION (DEPRECIATION) $ 8,416,572 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 73 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT MONEY MARKET FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE ASSET BACKED SECURITIES - 0.82% $ 430,324 FORD CREDIT AUTO OWNER TRUST++ 5.36% 12/15/2007 $ 430,324 TOTAL ASSET BACKED SECURITIES (COST $430,324) 430,324 ---------------- CERTIFICATES OF DEPOSIT - 0.95% 500,000 CALYON NEW YORK SERIES YCD1+/- 5.34 06/20/2007 500,012 TOTAL CERTIFICATES OF DEPOSIT (COST $500,012) 500,012 ---------------- COMMERCIAL PAPER - 39.28% 500,000 ASPEN FUNDING CORPORATION++ 5.27 01/19/2007 498,829 500,000 ASPEN FUNDING CORPORATION++ 5.27 02/13/2007 496,999 500,000 ATLAS CAPITAL FUNDING CORPORATION++ 5.23 01/31/2007 497,966 500,000 ATLAS CAPITAL FUNDING CORPORATION++ 5.24 03/14/2007 494,906 500,000 BUCKINGHAM CDO LLC++ 5.30 01/25/2007 498,381 500,000 CAIRN HIGH GRADE FUNDING I LLC++ 5.25 01/23/2007 498,542 1,000,000 CHARTA LLC++ 5.27 01/23/2007 997,072 500,000 CHEYNE FINANCE LLC++ 5.34 02/05/2007 497,553 500,000 CONCORD MINUTEMEN CAPITAL COMPANY++ 5.24 02/16/2007 496,798 500,000 CONCORD MINUTEMEN CAPITAL COMPANY++ 5.34 01/16/2008 500,000 500,000 CROWN POINT CAPITAL COMPANY++ 5.27 01/18/2007 498,902 1,000,000 DANSKE CORPORATION 5.17 04/10/2007 986,070 500,000 DEER VALLEY FUNDING LLC++ 5.28 01/30/2007 498,020 500,000 DEER VALLEY FUNDING LLC++ 5.28 02/05/2007 497,580 500,000 FCAR OWNER TRUST II 5.20 03/22/2007 494,367 500,000 FCAR OWNER TRUST II 5.24 03/23/2007 494,251 1,000,000 FIVE FINANCE INCORPORATED++ 5.26 03/02/2007 991,526 1,000,000 FOX TROT CDO LIMITED++ 5.28 01/08/2007 999,267 500,000 GERMAN RESIDENTIAL FUNDING++ 5.28 01/23/2007 498,533 500,000 HARRIER FINANCE FUNDING US LLC++ 5.24 02/05/2007 497,598 500,000 KESTREL FUNDING US LLC++ 5.26 01/26/2007 498,320 500,000 KESTREL FUNDING US LLC++ 5.27 02/14/2007 496,926 500,000 LEGACY CAPITAL LLC++ 5.27 02/22/2007 496,340 500,000 LEXINGTON PARKER CAPITAL CORPORATION++ 5.32 03/01/2007 499,986 500,000 NEWPORT FUNDING CORPORATION++ 5.27 01/19/2007 498,829 500,000 NORTH SEA FUNDING LLC++ 5.21 04/05/2007 493,343 744,000 SCALDIS CAPITAL LLC++ 5.19 05/08/2007 730,593 500,000 ST. GERMAIN HOLDINGS INCORPORATED++ 5.26 01/17/2007 498,977 500,000 ST. GERMAIN HOLDINGS INCORPORATED++ 5.26 01/24/2007 498,466 500,000 STANFIELD VICTORIA FUNDING++ 5.27 03/05/2007 495,539 500,000 SWEDISH NATIONAL HOUSING FINANCE++ 5.20 04/13/2007 492,778 500,000 TANGO FINANCE CORPORATION++ 5.22 01/30/2007 498,043 500,000 WHISTLEJACKET CAPITAL LIMITED++ 5.27 01/18/2007 498,902 500,000 WHISTLEJACKET CAPITAL LIMITED++ 5.27 01/25/2007 498,390 500,000 WHITE PINE FINANCE LLC++ 5.30 01/30/2007 498,013 500,000 ZELA FINANCE INCORPORATED++ 5.27 01/30/2007 498,024 500,000 ZELA FINANCE INCORPORATED++ 5.26 02/20/2007 496,493 TOTAL COMMERCIAL PAPER (COST $20,621,122) 20,621,122 ---------------- 74 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT MONEY MARKET FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE CORPORATE BONDS & NOTES - 0.95% $ 500,000 AMERICAN EXPRESS CENTURION SERIES BKNT+/- 5.32% 05/22/2007 $ 500,000 TOTAL CORPORATE BONDS & NOTES (COST $500,000) 500,000 ---------------- EXTENDABLE BONDS - 13.33% 1,000,000 BANK OF IRELAND SERIES XMTN+/-++ 5.35 01/18/2008 1,000,000 500,000 BNP PARIBAS SA+/- 5.33 12/16/2007 500,000 500,000 DNB NORSKE BANK ASA+/-++ 5.34 01/25/2008 500,000 500,000 FLORIDA HURRICANE CATASTROPHE+/- 5.36 01/15/2008 500,000 1,000,000 GENERAL ELECTRIC CAPITAL CORPORATION+/- 5.48 07/09/2007 1,000,000 500,000 INTESA BANK (IRELAND) PLC+/-++ 5.35 01/25/2008 500,000 500,000 MERRILL LYNCH & COMPANY INCORPORATED+/- 5.33 01/24/2008 500,000 1,000,000 NORDEA BANK AB+/-++ 5.36 01/11/2008 1,000,000 1,000,000 NORTHERN ROCK PLC SERIES MTN+/-++ 5.44 01/09/2008 1,000,000 500,000 PREMIUM ASSET TRUST+/-++ 5.41 12/14/2007 500,000 TOTAL EXTENDABLE BONDS (COST $7,000,000) 7,000,000 ---------------- MEDIUM TERM NOTES - 12.76% 500,000 ASIF GLOBAL FINANCING+/-++ 5.41 05/03/2007 500,102 700,000 BANK OF AMERICA SECURITIES+/-SS.(e) 5.38 700,000 500,000 BEAR STEARNS COMPANIES INCORPORATED+/-SS.(E) 5.43 500,000 1,000,000 CHEYNE FINANCE LLC+/-++ 5.34 07/16/2007 999,869 250,000 CULLINAN FINANCE CORPORATION+/-++ 5.29 01/04/2008 249,953 500,000 HARRIER FINANCE FUNDING LLC SERIES MTN+/-++ 5.33 05/15/2007 499,972 250,000 KESTREL FUNDING US LLC+/-++ 5.34 09/21/2007 249,965 600,000 LEHMAN BROTHERS HOLDINGS+/- 5.34 06/26/2007 599,989 250,000 LEHMAN BROTHERS HOLDINGS+/- 5.42 07/19/2007 250,127 250,000 LIBERTY LIGHT US CAPITAL+/-++ 5.31 01/04/2008 249,951 150,000 MONUMENT GLOBAL FUNDING II+/-++ 5.35 12/20/2007 150,000 500,000 SEDNA FINANCE INCORPORATED+/-++ 5.33 05/30/2007 499,979 500,000 SEDNA FINANCE INCORPORATED+/-++ 5.33 04/11/2007 500,016 500,000 TANGO FINANCE CORPORATION SERIES MTN+/-++ 5.33 05/24/2007 499,981 100,000 VETRA FINANCE INCORPORATED+/-++ 5.32 12/06/2007 99,991 150,000 ZELA FINANCE INCORPORATED+/-++ 5.32 12/07/2007 149,982 TOTAL MEDIUM TERM NOTES (COST $6,699,877) 6,699,877 ---------------- MUNICIPAL BONDS & NOTES - 1.13% 490,000 MISSISSIPPI STATE TAXABLE NISSAN PROJECT A (GO UNLIMITED, BANK OF AMERICA NA LOC)+/-SS. 5.39 11/01/2028 490,000 100,000 NORTH TEXAS HIGHER EDUCATIONAL AUTHORITY INCORPORATED SERIES D (HIGHER EDUCATION FACILITIES AUTHORITY REVENUE, AMBAC INSURED) +/-SS. 5.35 12/01/2046 100,000 TOTAL MUNICIPAL BONDS & NOTES (COST $590,000) 590,000 ---------------- PROMISSORY NOTES - 2.86% 1,500,000 CITIGROUP GLOBAL+/-SS.(e) 5.38 1,500,000 TOTAL PROMISSORY NOTES (COST $1,500,000) 1,500,000 ---------------- 75 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT MONEY MARKET FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE REPURCHASE AGREEMENTS - 18.28% $ 4,598,271 BANK OF AMERICA NA - 102% COLLATERALIZED BY US GOVERNMENT SECURITIES (MATURITY VALUE $4,600,989) 5.32% 01/02/2007 $ 4,598,271 1,000,000 CITIGROUP GLOBAL MARKETS - 102% COLLATERALIZED BY US GOVERNMENT SECURITIES (MATURITY VALUE $1,000,594) 5.35 01/02/2007 1,000,000 1,000,000 CITIGROUP GLOBAL MARKETS - 102% COLLATERALIZED BY US GOVERNMENT SECURITIES (MATURITY VALUE $1,000,593) 5.34 01/02/2007 1,000,000 1,000,000 GOLDMAN SACHS & COMPANY - 102% COLLATERALIZED BY US GOVERNMENT SECURITIES (MATURITY VALUE $1,000,596) 5.36 01/02/2007 1,000,000 1,000,000 GOLDMAN SACHS & COMPANY - 102% COLLATERALIZED BY US GOVERNMENT SECURITIES (MATURITY VALUE $1,000,594) 5.35 01/02/2007 1,000,000 1,000,000 JPMORGAN SECURITIES - 102% COLLATERALIZED BY US GOVERNMENT SECURITIES (MATURITY VALUE $1,000,594) 5.35 01/02/2007 1,000,000 TOTAL REPURCHASE AGREEMENTS (COST $9,598,271) 9,598,271 ---------------- TIME DEPOSITS - 9.53% 1,000,000 ABBEY NATIONAL TREASURY SERVICES PLC 5.34 01/02/2007 1,000,000 1,000,000 DEUTSCHE BANK (CAYMAN) 5.19 01/02/2007 1,000,000 1,000,000 DEXIA BANK (GRAND CAYMAN) 5.34 01/04/2007 1,000,000 1,000,000 ING BANK NV (AMSTERDAM) 5.34 01/03/2007 1,000,000 1,000,000 UBS AG (CAYMAN ISLANDS) 4.88 01/02/2007 1,000,000 TOTAL TIME DEPOSITS (COST $5,000,000) 5,000,000 ---------------- TOTAL INVESTMENTS IN SECURITIES (COST $52,439,606)* 99.89% $ 52,439,606 OTHER ASSETS AND LIABILITIES, NET 0.11 59,477 ------ ---------------- TOTAL NET ASSETS 100.00% $ 52,499,083 ====== ================ +/- VARIABLE RATE INVESTMENTS. ++ 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. SS. THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE EFFECTIVE MATURITY. (e) THE SECURITY IS A PRIVATE PLACEMENT WITH NO MATURITY DATE. * 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. 76 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT OPPORTUNITY FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCKS - 90.14% APPAREL & ACCESSORY STORES - 2.69% 260,000 NORDSTROM INCORPORATED $ 12,828,400 490,000 URBAN OUTFITTERS INCORPORATED+ 11,284,700 24,113,100 ---------------- AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS - 1.56% 658,000 AUTONATION INCORPORATED+<< 14,028,560 ---------------- BUSINESS SERVICES - 15.15% 805,000 ACTIVISION INCORPORATED+ 13,878,200 705,000 CADENCE DESIGN SYSTEMS INCORPORATED+<< 12,626,550 1,145,000 CNET NETWORKS INCORPORATED+ 10,408,050 115,000 ELECTRONIC ARTS INCORPORATED+ 5,791,400 287,000 HYPERION SOLUTIONS CORPORATION+ 10,314,780 475,000 IMS HEALTH INCORPORATED 13,053,000 1,105,000 INTERPUBLIC GROUP OF COMPANIES INCORPORATED+ 13,525,200 545,000 JUNIPER NETWORKS INCORPORATED+<< 10,322,300 102,000 OMNICOM GROUP INCORPORATED 10,663,080 777,000 RED HAT INCORPORATED+# 17,871,000 819,700 UNISYS CORPORATION+# 6,426,448 460,000 VERISIGN INCORPORATED+ 11,063,000 135,943,008 ---------------- CHEMICALS & ALLIED PRODUCTS - 4.76% 270,000 AMYLIN PHARMACEUTICALS INCORPORATED+ 9,738,900 605,000 PDL BIOPHARMA INCORPORATED+ 12,184,700 350,000 PRAXAIR INCORPORATED# 20,765,500 42,689,100 ---------------- COAL MINING - 1.24% 275,000 PEABODY ENERGY CORPORATION 11,112,750 ---------------- COMMUNICATIONS - 5.04% 635,000 CABLEVISION SYSTEMS NEW YORK GROUP CLASS A+ 18,084,800 328,000 COMCAST CORPORATION SPECIAL CLASS A+ 13,736,640 68,000 LIBERTY MEDIA HOLDING CORPORATION CAPITAL SERIES A+ 6,662,640 314,000 LIBERTY MEDIA HOLDING CORPORATION INTERACTIVE SERIES A+ 6,772,980 45,257,060 ---------------- DEPOSITORY INSTITUTIONS - 4.60% 290,000 BANK OF NEW YORK COMPANY INCORPORATED 11,417,300 305,000 FIFTH THIRD BANCORP 12,483,650 290,000 TORONTO-DOMINION BANK 17,338,078 41,239,028 ---------------- ELECTRIC, GAS & SANITARY SERVICES - 1.52% 565,000 NISOURCE INCORPORATED 13,616,500 ---------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 7.09% 4,249,600 ARM HOLDINGS PLC 10,463,205 1,085,000 CELESTICA INCORPORATED+ 8,473,850 77 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT OPPORTUNITY FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (CONTINUED) 297,000 MEMC ELECTRONIC MATERIALS INCORPORATED+ $ 11,624,580 705,000 MICRON TECHNOLOGY INCORPORATED+ 9,841,800 430,000 MOLEX INCORPORATED CLASS A 11,911,000 1,648,000 SANMINA-SCI CORPORATION+# 5,685,600 411,600 VISHAY INTERTECHNOLOGY INCORPORATED+# 5,573,064 63,573,099 ---------------- ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES - 1.63% 395,000 ACCENTURE LIMITED CLASS A# 14,587,350 ---------------- FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 2.71% 150,000 FORTUNE BRANDS INCORPORATED<< 12,808,500 250,000 ILLINOIS TOOL WORKS INCORPORATED 11,547,500 24,356,000 ---------------- FOOD & KINDRED PRODUCTS - 2.10% 335,000 PEPSI BOTTLING GROUP INCORPORATED 10,354,850 499,000 SARA LEE CORPORATION 8,497,970 18,852,820 ---------------- FORESTRY - 1.26% 160,000 WEYERHAEUSER COMPANY 11,304,000 ---------------- GENERAL MERCHANDISE STORES - 2.85% 230,000 TARGET CORPORATION 13,121,500 435,000 TJX COMPANIES INCORPORATED 12,406,200 25,527,700 ---------------- HEALTH SERVICES - 1.40% 595,000 HEALTH MANAGEMENT ASSOCIATION INCORPORATED CLASS A 12,560,450 ---------------- HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES - 1.36% 320,000 BED BATH & BEYOND INCORPORATED+ 12,192,000 ---------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 2.33% 230,000 AMERICAN STANDARD COMPANIES INCORPORATED 10,545,500 738,000 PALM INCORPORATED+ 10,398,420 20,943,920 ---------------- INSURANCE CARRIERS - 6.45% 216,000 ACE LIMITED# 13,083,120 125,000 AMBAC FINANCIAL GROUP INCORPORATED 11,133,750 185,000 MGIC INVESTMENT CORPORATION 11,569,900 187,000 RENAISSANCERE HOLDINGS LIMITED 11,220,000 151,000 XL CAPITAL LIMITED CLASS A 10,875,020 57,881,790 ---------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 3.27% 109,000 MEDTRONIC INCORPORATED 5,832,590 165,000 ROCKWELL AUTOMATION INCORPORATED 10,078,200 275,000 WATERS CORPORATION+# 13,466,750 29,377,540 ---------------- 78 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT OPPORTUNITY FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE METAL MINING - 0.57% 92,000 FREEPORT-MCMORAN COPPER & GOLD INCORPORATED CLASS B $ 5,127,160 ---------------- MISCELLANEOUS RETAIL - 3.01% 415,000 CVS CORPORATION 12,827,650 530,000 STAPLES INCORPORATED 14,151,000 26,978,650 ---------------- MOTOR FREIGHT TRANSPORTATION & WAREHOUSING - 1.25% 540,000 J.B. HUNT TRANSPORT SERVICES INCORPORATED 11,215,800 ---------------- OIL & GAS EXTRACTION - 7.53% 280,000 ENSCO INTERNATIONAL INCORPORATED 14,016,800 270,000 GLOBALSANTAFE CORPORATION 15,870,600 215,000 TRANSOCEAN INCORPORATED+ 17,391,350 484,000 WEATHERFORD INTERNATIONAL LIMITED+<< 20,226,360 67,505,110 ---------------- PERSONAL SERVICES - 1.29% 293,000 REGIS CORPORATION 11,585,220 ---------------- PRINTING, PUBLISHING & ALLIED INDUSTRIES - 1.26% 227,000 E.W. SCRIPPS COMPANY CLASS A 11,336,380 ---------------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 1.06% 100,000 LEGG MASON INCORPORATED 9,505,000 ---------------- SEMICONDUCTOR EQUIPMENT MANUFACTURING & RELATED - 1.28% 465,000 ASML HOLDING NV NEW YORK REGISTERED SHARES+<< 11,452,950 ---------------- TEXTILE MILL PRODUCTS - 1.23% 147,000 MOHAWK INDUSTRIES INCORPORATED+ 11,004,420 ---------------- TRANSPORTATION BY AIR - 1.21% 710,000 SOUTHWEST AIRLINES COMPANY 10,877,200 ---------------- TRANSPORTATION EQUIPMENT - 1.44% 160,000 MAGNA INTERNATIONAL INCORPORATED CLASS A<< 12,888,001 ---------------- TOTAL COMMON STOCKS (COST $630,742,740) 808,631,666 ---------------- INVESTMENT COMPANIES - 2.63% STOCK FUNDS - 2.63% 180,000 ISHARES S&P SMALLCAP 600 INDEX FUND 11,878,200 80,000 MIDCAP SPDR TRUST SERIES 1 11,728,000 TOTAL INVESTMENT COMPANIES (COST $15,600,631) 23,606,200 ---------------- PREFERRED STOCKS - 2.01% 108,500 ELECTRONIC ARTS INCORPORATED+++ 5,532,090 115,000 MEDTRONIC INCORPORATED+++ 5,943,200 125,310 UNITEDHEALTHCARE GROUP INCORPORATED+ 6,552,460 TOTAL PREFERRED STOCKS (COST $16,938,217) 18,027,750 ---------------- 79 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT OPPORTUNITY FUND - -------------------------------------------------------------------------------- CONTRACTS SECURITY NAME STRIKE PRICE EXPIRATION DATE VALUE OPTIONS - 0.17% 700 ACCENTURE LIMITED CLASS A PUT $ 35.00 05/19/2007 $ 70,000 150 ACE LIMITED PUT 60.00 05/19/2007 33,750 250 PRAXAIR INCORPORATED PUT 60.00 01/20/2007 27,500 450 RED HAT INCORPORATED PUT+ 30.00 03/17/2007 315,000 8,197 UNISYS CORPORATION PUT+ 7.50 04/21/2007 286,895 4,116 VISHAY INTERTECHNOLOGY INCORPORATED PUT+ 15.00 01/20/2007 596,820 275 WATERS CORPORATION PUT+ 55.00 05/19/2007 171,875 TOTAL OPTIONS (PREMIUMS PAID $2,547,333) 1,501,840 ---------------- SHARES RIGHTS - 0.00% 230,000 SEAGATE TECHNOLOGY RIGHTS+(a) 0 TOTAL RIGHTS (COST $0) 0 ---------------- COLLATERAL FOR SECURITIES LENDING - 4.34% COLLATERAL INVESTED IN MONEY MARKET FUNDS - 0.19% 46,855 FEDERATED INVESTORS PRIME OBLIGATIONS FUND 10 46,855 1,642,736 SCUDDER DAILY ASSETS MONEY MARKET FUND 1,642,736 39,111 SHORT TERM INVESTMENT COMPANY MONEY MARKET FUND 39,111 1,728,702 ---------------- PRINCIPAL INTEREST RATE MATURITY DATE COLLATERAL INVESTED IN OTHER ASSETS - 4.15% $ 175,998 AMERICAN GENERAL FINANCE CORPORATION+/-++ 5.40% 01/15/2008 176,063 488,884 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN+/-++ 5.33 04/25/2007 488,918 488,884 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN1+/-++ 5.35 10/25/2007 488,830 488,884 BANCO SANTANDER TOTTA LOAN+/-++ 5.35 01/16/2008 488,928 488,884 BANK OF AMERICA NA SERIES BKNT+/- 5.36 06/19/2007 489,001 322,663 BANK ONE NA (LLLINOIS) SERIES BKNT+/- 5.42 01/12/2007 322,670 66,840 BARTON CAPITAL LLC++ 5.37 01/25/2007 66,616 117,332 BEAR STEARNS & COMPANY INCORPORATED SERIES MTNB+/- 5.53 01/16/2007 117,339 4,204,400 BEAR STEARNS & COMPANY (MATURITY VALUE $4,206,904) 5.36 01/02/2007 4,204,400 1,105,464 BUCKINGHAM III CDO LLC++ 5.35 01/16/2007 1,103,209 195,554 CEDAR SPRINGS CAPITAL COMPANY++ 5.31 01/17/2007 195,125 62,577 CHEYNE FINANCE LLC++ 5.33 01/23/2007 62,386 449,773 CHEYNE FINANCE LLC 5.35 03/16/2007 444,992 488,884 CHEYNE FINANCE LLC SERIES MTN+/-++ 5.34 07/16/2007 488,938 3,767,155 CITIGROUP REPURCHASE AGREEMENT (MATURITY VALUE $3,769,399) 5.36 01/02/2007 3,767,155 88,234 CLIPPER RECEIVABLES CORPORATION 5.39 01/10/2007 88,131 734,303 CORPORATE ASSET SECURITIZATION AUSTRALIA LIMITED++ 5.35 01/29/2007 731,410 977,768 CULLINAN FINANCE CORPORATION SERIES MTN2+/-++ 5.31 06/25/2007 977,787 488,884 DEER VALLEY FUNDING LLC 5.32 01/23/2007 487,388 430,218 DEER VALLEY FUNDING LLC++ 5.35 02/27/2007 426,711 89,779 DEER VALLEY FUNDING LLC++ 5.35 02/28/2007 89,033 19,555 DEER VALLEY FUNDING LLC 5.37 01/19/2007 19,507 977,768 FIVE FINANCE INCORPORATED SERIES MTN+/-++ 5.37 06/13/2007 978,032 802,532 FOX TROT CDO LIMITED++ 5.38 01/22/2007 800,189 80 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT OPPORTUNITY FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 586,661 GEORGE STREET FINANCE LLC++ 5.41% 01/29/2007 $ 584,349 280,619 GOLDMAN SACHS GROUP INCORPORATED SERIES MTNB+/- 5.46 03/30/2007 280,709 39,111 HARRIER FINANCE FUNDING LLC SERIES MTN+/-++ 5.42 05/15/2007 39,122 68,444 HBOS TREASURY SERVICES PLC+/-++ 5.45 01/12/2007 68,446 703,582 HUDSON-THAMES LLC 5.32 03/21/2007 695,596 198,330 HUDSON-THAMES LLC 5.35 01/24/2007 197,694 397,384 HUDSON-THAMES LLC++ 5.36 02/20/2007 394,551 148,777 HUDSON-THAMES LLC++ 5.37 01/23/2007 148,322 35,200 HUDSON-THAMES LLC++ 5.38 02/28/2007 34,907 684,437 IBM CORPORATION SERIES MTN+/- 5.36 06/28/2007 684,732 1,271,098 ING USA ANNUITY & LIFE INSURANCE+/- 5.42 09/17/2007 1,271,098 488,884 INTESA BANK (IRELAND) PLC SERIES BKNT+/-++ 5.35 01/25/2008 488,894 293,330 KAUPTHING BANK SERIES MTN+/-++ 5.43 03/20/2007 293,260 72,707 KLIO FUNDING CORPORATION++ 5.33 01/25/2007 72,463 283,025 KLIO FUNDING CORPORATION++ 5.34 01/23/2007 282,159 1,955,535 KLIO III FUNDING CORPORATION++ 5.39 01/23/2007 1,949,551 788,941 LA FAYETTE ASSET SECURITIZATION CORPORATION 5.33 02/02/2007 785,383 387,861 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.37 01/12/2007 387,295 65,706 LEGACY CAPITAL CORPORATION 5.33 01/16/2007 65,572 345,817 LIBERTY LIGHTHOUSE FUNDING COMPANY 5.38 01/18/2007 345,011 488,884 LIQUID FUNDING LIMITED++ 5.34 03/05/2007 484,474 743,103 LIQUID FUNDING LIMITED++ 5.35 01/02/2007 743,103 117,332 LIQUID FUNDING LIMITED SERIES MTN+/-++ 5.32 02/20/2007 117,338 488,884 LIQUID FUNDING LIMITED SERIES MTN+/-++ 5.32 03/06/2007 488,942 195,554 MBIA GLOBAL FUNDING LLC+/-++ 5.35 02/20/2007 195,561 488,884 MORGAN STANLEY+/- 5.32 07/12/2007 488,884 488,884 MORGAN STANLEY+/- 5.50 07/27/2007 489,290 329,019 MORGAN STANLEY+/- 5.51 01/12/2007 329,029 90,444 MORGAN STANLEY SERIES EXL+/- 5.41 01/15/2008 90,445 350,334 NATIONWIDE BUILDING SOCIETY+/-++ 5.49 07/20/2007 350,646 977,768 NORTHERN ROCK PLC+/-++SS. 5.35 02/05/2008 977,914 287,681 PARAGON MORTGAGES PLC SERIES 12A+/-++ 5.33 05/15/2007 287,681 488,884 PREMIUM ASSET TRUST SERIES 06-B+/-++ 5.40 12/16/2007 488,884 79,101 RACERS TRUST SERIES 2004-6-MM+/-++ 5.37 06/22/2007 79,103 391,107 SLM CORPORATION+/-++ 5.35 01/11/2008 391,220 39,111 STANFIELD VICTORIA FUNDING++ 5.34 04/16/2007 38,520 1,407,985 TASMAN FUNDING INCORPORATED++ 5.39 01/22/2007 1,403,874 1,088,451 TICONDEROGA FUNDING LLC 5.37 01/30/2007 1,084,010 113,049 TRAVELERS INSURANCE COMPANY+/- 5.42 02/09/2007 113,047 488,884 UNICREDITO ITALIANO BANK (IRELAND) SERIES EXL+/-++ 5.36 06/15/2007 488,938 488,884 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+/-++ 5.36 03/09/2007 488,977 141,287 VERSAILLES CDS LLC++ 5.32 01/17/2007 140,978 118,505 VERSAILLES CDS LLC 5.33 03/22/2007 117,143 379,589 WHITE PINE FINANCE LLC 5.35 01/11/2007 379,092 336,352 ZELA FINANCE INCORPORATED++ 5.36 03/12/2007 332,971 37,161,936 ---------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $38,890,638) 38,890,638 ---------------- 81 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT OPPORTUNITY FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE SHORT-TERM INVESTMENTS - 5.06% 45,450,496 WELLS FARGO MONEY MARKET TRUST~++ $ 45,450,496 TOTAL SHORT-TERM INVESTMENTS (COST $45,450,496) 45,450,496 ---------------- TOTAL INVESTMENTS IN SECURITIES (COST $750,170,055)* 104.35% $ 936,108,590 OTHER ASSETS AND LIABILITIES, NET (4.35) (39,061,656) ------ ---------------- TOTAL NET ASSETS 100.00% $ 897,046,934 ====== ================ + NON-INCOME EARNING SECURITIES. << ALL OR A PORTION OF THIS SECURITY IS ON LOAN. # ALL OR A PORTION OF THIS SECURITY IS SEGREGATED AS COLLATERAL FOR DERIVATIVE INVESTMENTS. (SEE NOTE 2) +/- VARIABLE RATE INVESTMENTS. ## 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. (a) SECURITY FAIR VALUED IN ACCORDANCE WITH THE PROCEDURES APPROVED BY THE BOARD OF TRUSTEES. SS. THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE EFFECTIVE MATURITY. ~ THIS WELLS FARGO ADVANTAGE FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY PURPOSES IN A WELLS FARGO ADVANTAGE 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 $45,450,496. * COST FOR FEDERAL INCOME TAX PURPOSES IS $754,189,846 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $ 205,397,508 GROSS UNREALIZED DEPRECIATION (23,478,764) ------------- NET UNREALIZED APPRECIATION (DEPRECIATION) $ 181,918,744 CONTRACTS SECURITY NAME STRIKE PRICE EXPIRATION DATE VALUE WRITTEN OPTIONS - (0.13%) (700) ACCENTURE LIMITED CLASS A CALL $ 35.00 05/19/2007 $ (266,000) (150) ACE LIMITED CALL 60.00 05/19/2007 (61,500) (250) PRAXAIR INCORPORATED CALL 60.00 01/20/2007 (17,500) (450) RED HAT INCORPORATED CALL+ 30.00 03/17/2007 (6,750) (1,150) SANMINA-SCI CORPORATION CALL+ 5.00 04/20/2007 (5,750) (8,197) UNISYS CORPORATION CALL+ 7.50 04/21/2007 (737,730) (4,116) VISHAY INTERTECHNOLOGY INCORPORATED CALL+ 15.00 01/20/2007 (20,580) (275) WATERS CORPORATION CALL+ 55.00 05/19/2007 (30,250) TOTAL WRITTEN OPTIONS (PREMIUMS RECEIVED $(1,072,630)) (1,146,060) ---------------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 82 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCKS - 98.71% AMUSEMENT & RECREATION SERVICES - 1.12% 21,000 PINNACLE ENTERTAINMENT INCORPORATED+ $ 695,940 87,350 TOWN SPORTS INTERNATIONAL HOLDINGS INCORPORATED+ 1,439,528 2,135,468 ---------------- APPAREL & ACCESSORY STORES - 1.15% 18,600 CARTER'S INCORPORATED+ 474,300 13,700 CHILDREN'S PLACE RETAIL STORES INCORPORATED+<< 870,224 127,550 WET SEAL INCORPORATED CLASS A+<< 850,759 2,195,283 ---------------- APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS - 0.70% 21,100 GUESS? INCORPORATED+ 1,338,373 ---------------- AUTOMOTIVE REPAIR, SERVICES & PARKING - 2.25% 137,591 WRIGHT EXPRESS CORPORATION+ 4,288,711 ---------------- BUSINESS SERVICES - 22.31% 104,600 24/7 REAL MEDIA INCORPORATED+<< 946,630 116,400 AQUANTIVE INCORPORATED+<< 2,870,424 48,300 BANKRATE INCORPORATED+<< 1,832,985 14,500 BLACKBOARD INCORPORATED+ 435,580 102,900 COGENT COMMUNICATIONS GROUP INCORPORATED+ 1,669,038 41,950 DEALERTRACK HOLDINGS INCORPORATED+ 1,234,169 43,821 DOUBLE-TAKE SOFTWARE INCORPORATED+<< 564,414 102,200 EPICOR SOFTWARE CORPORATION+ 1,380,722 212,800 GLOBAL CASH ACCESS INCORPORATED+ 3,453,744 130,932 MARCHEX INCORPORATED CLASS B+<< 1,751,870 178,940 ON ASSIGNMENT INCORPORATED+ 2,102,545 73,188 PEOPLESUPPORT INCORPORATED+ 1,540,607 199,998 SECURE COMPUTING CORPORATION+ 1,311,987 103,981 SI INTERNATIONAL INCORPORATED+ 3,371,064 518,600 SKILLSOFT PLC ADR+ 3,220,506 156,294 TALEO CORPORATION CLASS A+ 2,136,539 55,815 TELETECH HOLDINGS INCORPORATED+ 1,332,862 59,100 THE TRIZETTO GROUP INCORPORATED+ 1,085,667 104,400 TRANSACTION SYSTEMS ARCHITECTS INCORPORATED+ 3,400,308 112,128 VALUECLICK INCORPORATED+<< 2,649,585 120,714 WEBEX COMMUNICATIONS INCORPORATED+<< 4,211,711 42,502,957 ---------------- CHEMICALS & ALLIED PRODUCTS - 3.71% 68,390 ADAMS RESPIRATORY THERAPEUTICS INCORPORATED+<< 2,790,996 111,868 SCIELE PHARMA INCORPORATED+<< 2,684,832 29,400 UNITED THERAPEUTICS CORPORATION+<< 1,598,478 7,074,306 ---------------- COMMUNICATIONS - 3.73% 38,700 CBEYOND INCORPORATED+<< 1,183,833 161,100 DOBSON COMMUNICATIONS CORPORATION+<< 1,403,181 83 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMUNICATIONS (CONTINUED) 38,200 LODGENET ENTERTAINMENT CORPORATION+ $ 956,146 110,050 NEUSTAR INCORPORATED CLASS A+<< 3,570,022 7,113,182 ---------------- DEPOSITORY INSTITUTIONS - 0.57% 31,100 WESTERN ALLIANCE BANCORP+<< 1,081,347 ---------------- EATING & DRINKING PLACES - 0.91% 52,108 CALIFORNIA PIZZA KITCHEN INCORPORATED+ 1,735,717 ---------------- EDUCATIONAL SERVICES - 2.44% 42,067 LAUREATE EDUCATION INCORPORATED+ 2,045,718 24,500 STRAYER EDUCATION INCORPORATED 2,598,225 4,643,943 ---------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 5.61% 135,492 HOUSTON WIRE & CABLE COMPANY+<< 2,831,783 98,100 INTEGRATED DEVICE TECHNOLOGY INCORPORATED+ 1,518,588 186,000 MICROSEMI CORPORATION+ 3,654,900 41,076 SILICON LABORATORIES INCORPORATED+<< 1,423,283 83,518 UNIVERSAL DISPLAY CORPORATION+<< 1,253,605 10,682,159 ---------------- ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES - 6.16% 43,806 ADVISORY BOARD COMPANY+ 2,345,373 106,139 EXELIXIS INCORPORATED+ 955,251 25,000 GEN-PROBE INCORPORATED+ 1,309,250 41,469 HURON CONSULTING GROUP INCORPORATED+ 1,880,204 164,988 RESOURCES CONNECTION INCORPORATED+<< 5,253,218 11,743,296 ---------------- FURNITURE & FIXTURES - 0.40% 38,400 WILLIAMS SCOTSMAN INTERNATIONAL INCORPORATED+ 753,408 ---------------- HEALTH SERVICES - 4.25% 124,333 INVENTIV HEALTH INCORPORATED+ 4,395,172 131,700 NEKTAR THERAPEUTICS+<< 2,003,157 99,189 ODYSSEY HEALTHCARE INCORPORATED+ 1,315,246 12,000 RADIATION THERAPY SERVICES INCORPORATED+ 378,240 8,091,815 ---------------- HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES - 4.36% 35,477 GAYLORD ENTERTAINMENT COMPANY+ 1,806,844 147,400 GREAT WOLF RESORTS INCORPORATED+ 2,057,704 71,519 ORIENT EXPRESS HOTELS LIMITED CLASS A 3,384,279 83,150 RED LION HOTELS CORPORATION+ 1,059,331 8,308,158 ---------------- 84 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 3.61% 30,105 ACTUANT CORPORATION CLASS A $ 1,434,503 97,372 GARDNER DENVER INCORPORATED+ 3,632,949 45,300 KAYDON CORPORATION 1,800,222 6,867,674 ---------------- INSURANCE CARRIERS - 2.78% 52,450 FIRST MERCURY FINANACIAL CORPORATION+ 1,233,624 63,729 PRA INTERNATIONAL+<< 1,610,432 32,316 THE NAVIGATORS GROUP INCORPORATED+ 1,556,985 29,000 TOWER GROUP INCORPORATED 901,030 5,302,071 ---------------- LEGAL SERVICES - 1.30% 88,700 FTI CONSULTING INCORPORATED+ 2,473,843 ---------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 10.29% 126,400 AMERICAN MEDICAL SYSTEMS HOLDINGS INCORPORATED+<< 2,340,928 156,195 CALIPER LIFE SCIENCES INCORPORATED+ 893,435 90,914 DEXCOM INCORPORATED+<< 896,412 90,735 DJ ORTHOPEDICS INCORPORATED+ 3,885,273 220,914 IXIA+ 2,120,774 68,083 KYPHON INCORPORATED+<< 2,750,553 77,253 NORTHSTAR NEUROSCIENCE INCORPORATED+ 1,110,898 74,800 SYMMETRY MEDICAL INCORPORATED+ 1,034,484 97,422 THE SPECTRANETICS CORPORATION+ 1,099,894 44,473 VARIAN INCORPORATED+ 1,991,946 34,500 VENTANA MEDICAL SYSTEMS INCORPORATED+ 1,484,535 19,609,132 ---------------- MISCELLANEOUS MANUFACTURING INDUSTRIES - 0.88% 63,400 ACCO BRANDS CORPORATION+<< 1,678,198 ---------------- MISCELLANEOUS RETAIL - 4.79% 66,000 GSI COMMERCE INCORPORATED+ 1,237,500 119,630 PRICELINE.COM INCORPORATED+<< 5,217,064 121,036 SHUTTERFLY INCORPORATED+<< 1,742,918 31,400 ZUMIEZ INCORPORATED+<< 927,556 9,125,038 ---------------- OIL & GAS EXTRACTION - 2.69% 148,780 PETROHAWK ENERGY CORPORATION+ 1,710,970 86,000 TETRA TECHNOLOGIES INCORPORATED+ 2,199,880 68,700 VENOCO INCORPORATED+ 1,206,372 5,117,222 ---------------- PACKAGED FOODS - 0.74% 35,650 IHS INCORPORATED+ 1,407,462 ---------------- PERSONAL SERVICES - 0.76% 42,600 JACKSON HEWITT TAX SERVICE INCORPORATED 1,447,122 ---------------- 85 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE PRINTING, PUBLISHING & ALLIED INDUSTRIES - 2.80% 72,214 INNERWORKINGS INCORPORATED+ $ 1,152,535 126,085 VISTAPRINT LIMITED+ 4,174,674 5,327,209 ---------------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 1.20% 20,400 GFI GROUP INCORPORATED+ 1,270,104 23,900 INVESTMENT TECHNOLOGY GROUP INCORPORATED+ 1,024,832 2,294,936 ---------------- TRANSPORTATION BY AIR - 0.60% 97,100 AIRTRAN HOLDINGS INCORPORATED+<< 1,139,954 ---------------- TRANSPORTATION EQUIPMENT - 1.46% 56,100 HORNBECK OFFSHORE+ 2,002,770 34,350 K & F INDUSTRIES HOLDINGS INCORPORATED+ 780,089 2,782,859 ---------------- WHOLESALE TRADE-DURABLE GOODS - 5.14% 69,400 BARNES GROUP INCORPORATED 1,509,450 104,100 BEACON ROOFING SUPPLY INCORPORATED+<< 1,959,162 116,600 INTERLINE BRANDS INCORPORATED+ 2,620,002 34,500 POOL CORPORATION<< 1,351,365 120,858 PSS WORLD MEDICAL INCORPORATED+ 2,360,361 9,800,340 ---------------- TOTAL COMMON STOCKS (COST $168,699,262) 188,061,183 ---------------- COLLATERAL FOR SECURITIES LENDING - 27.99% COLLATERAL INVESTED IN MONEY MARKET FUNDS - 1.25% 64,241 FEDERATED INVESTORS PRIME OBLIGATIONS FUND 10 64,241 2,252,310 SCUDDER DAILY ASSETS MONEY MARKET FUND 2,252,310 53,624 SHORT TERM INVESTMENT COMPANY MONEY MARKET FUND 53,624 2,370,175 ---------------- PRINCIPAL INTEREST RATE MATURITY DATE COLLATERAL INVESTED IN OTHER ASSETS - 26.74% $ 241,306 AMERICAN GENERAL FINANCE CORPORATION+/-++ 5.40% 01/15/2008 241,396 670,295 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN+/-++ 5.33 04/25/2007 670,342 670,295 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN1+/-++ 5.35 10/25/2007 670,221 670,295 BANCO SANTANDER TOTTA LOAN+/-++ 5.35 01/16/2008 670,356 670,295 BANK OF AMERICA NA SERIES BKNT+/- 5.36 06/19/2007 670,456 442,395 BANK ONE NA (LLLINOIS) SERIES BKNT+/- 5.42 01/12/2007 442,404 91,643 BARTON CAPITAL LLC++ 5.37 01/25/2007 91,336 160,871 BEAR STEARNS & COMPANY INCORPORATED SERIES MTNB+/- 5.53 01/16/2007 160,880 5,764,539 BEAR STEARNS & COMPANY (MATURITY VALUE $4,767,972) 5.36 01/02/2007 5,764,539 1,515,671 BUCKINGHAM III CDO LLC++ 5.35 01/16/2007 1,512,579 268,118 CEDAR SPRINGS CAPITAL COMPANY++ 5.31 01/17/2007 267,531 85,798 CHEYNE FINANCE LLC++ 5.33 01/23/2007 85,535 616,672 CHEYNE FINANCE LLC 5.35 03/16/2007 610,116 670,295 CHEYNE FINANCE LLC SERIES MTN+/-++ 5.34 07/16/2007 670,369 86 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 5,165,043 CITIGROUP REPURCHASE AGREEMENT (MATURITY VALUE $5,168,119) 5.36% 01/02/2007 $ 5,165,043 120,975 CLIPPER RECEIVABLES CORPORATION 5.39 01/10/2007 120,833 1,006,783 CORPORATE ASSET SECURITIZATION AUSTRALIA LIMITED++ 5.35 01/29/2007 1,002,817 1,340,590 CULLINAN FINANCE CORPORATION SERIES MTN2+/-++ 5.31 06/25/2007 1,340,617 670,295 DEER VALLEY FUNDING LLC 5.32 01/23/2007 668,244 589,860 DEER VALLEY FUNDING LLC++ 5.35 02/27/2007 585,052 123,093 DEER VALLEY FUNDING LLC++ 5.35 02/28/2007 122,071 26,812 DEER VALLEY FUNDING LLC 5.37 01/19/2007 26,745 1,340,590 FIVE FINANCE INCORPORATED SERIES MTN+/-++ 5.37 06/13/2007 1,340,952 1,100,330 FOX TROT CDO LIMITED++ 5.38 01/22/2007 1,097,117 804,354 GEORGE STREET FINANCE LLC++ 5.41 01/29/2007 801,185 384,749 GOLDMAN SACHS GROUP INCORPORATED SERIES MTNB+/- 5.46 03/30/2007 384,873 53,624 HARRIER FINANCE FUNDING LLC SERIES MTN+/-++ 5.42 05/15/2007 53,639 93,841 HBOS TREASURY SERVICES PLC+/-++ 5.45 01/12/2007 93,845 964,662 HUDSON-THAMES LLC 5.32 03/21/2007 953,713 271,925 HUDSON-THAMES LLC 5.35 01/24/2007 271,052 544,843 HUDSON-THAMES LLC++ 5.36 02/20/2007 540,958 203,984 HUDSON-THAMES LLC++ 5.37 01/23/2007 203,360 48,261 HUDSON-THAMES LLC++ 5.38 02/28/2007 47,861 938,413 IBM CORPORATION SERIES MTN+/- 5.36 06/28/2007 938,817 1,742,767 ING USA ANNUITY & LIFE INSURANCE+/- 5.42 09/17/2007 1,742,767 670,295 INTESA BANK (IRELAND) PLC SERIES BKNT+/-++ 5.35 01/25/2008 670,309 402,177 KAUPTHING BANK SERIES MTN+/-++ 5.43 03/20/2007 402,081 99,686 KLIO FUNDING CORPORATION++ 5.33 01/25/2007 99,352 388,047 KLIO FUNDING CORPORATION++ 5.34 01/23/2007 386,860 2,681,181 KLIO III FUNDING CORPORATION++ 5.39 01/23/2007 2,672,976 1,081,696 LA FAYETTE ASSET SECURITIZATION CORPORATION 5.33 02/02/2007 1,076,817 531,785 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.37 01/12/2007 531,009 90,088 LEGACY CAPITAL CORPORATION 5.33 01/16/2007 89,904 474,140 LIBERTY LIGHTHOUSE FUNDING COMPANY 5.38 01/18/2007 473,035 670,295 LIQUID FUNDING LIMITED++ 5.34 03/05/2007 664,249 1,018,849 LIQUID FUNDING LIMITED++ 5.35 01/02/2007 1,018,849 160,871 LIQUID FUNDING LIMITED SERIES MTN+/-++ 5.32 02/20/2007 160,879 670,295 LIQUID FUNDING LIMITED SERIES MTN+/-++ 5.32 03/06/2007 670,376 268,118 MBIA GLOBAL FUNDING LLC+/-++ 5.35 02/20/2007 268,129 670,295 MORGAN STANLEY+/- 5.32 07/12/2007 670,295 670,295 MORGAN STANLEY+/- 5.50 07/27/2007 670,852 451,109 MORGAN STANLEY+/- 5.51 01/12/2007 451,122 124,005 MORGAN STANLEY SERIES EXL+/- 5.41 01/15/2008 124,007 480,334 NATIONWIDE BUILDING SOCIETY+/-++ 5.49 07/20/2007 480,761 1,340,590 NORTHERN ROCK PLC+/-++SS. 5.35 02/05/2008 1,340,791 394,431 PARAGON MORTGAGES PLC SERIES 12A+/-++ 5.33 05/15/2007 394,431 670,295 PREMIUM ASSET TRUST SERIES 06-B+/-++ 5.40 12/16/2007 670,295 108,454 RACERS TRUST SERIES 2004-6-MM+/-++ 5.37 06/22/2007 108,456 536,236 SLM CORPORATION+/-++ 5.35 01/11/2008 536,392 53,624 STANFIELD VICTORIA FUNDING++ 5.34 04/16/2007 52,813 1,930,450 TASMAN FUNDING INCORPORATED++ 5.39 01/22/2007 1,924,813 1,492,345 TICONDEROGA FUNDING LLC 5.37 01/30/2007 1,486,256 87 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 154,999 TRAVELERS INSURANCE COMPANY+/- 5.42% 02/09/2007 $ 154,996 670,295 UNICREDITO ITALIANO BANK (IRELAND) SERIES EXL+/-++ 5.36 06/15/2007 670,369 670,295 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+/-++ 5.36 03/09/2007 670,423 193,715 VERSAILLES CDS LLC++ 5.32 01/17/2007 193,291 162,480 VERSAILLES CDS LLC 5.33 03/22/2007 160,611 520,444 WHITE PINE FINANCE LLC 5.35 01/11/2007 519,762 461,163 ZELA FINANCE INCORPORATED++ 5.36 03/12/2007 456,535 50,951,717 ---------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $53,321,892) 53,321,892 ---------------- SHARES SHORT-TERM INVESTMENTS - 0.87% 1,650,939 WELLS FARGO MONEY MARKET TRUST~++ 1,650,939 TOTAL SHORT-TERM INVESTMENTS (COST $1,650,939) 1,650,939 ---------------- TOTAL INVESTMENTS IN SECURITIES (COST $223,672,093)* 127.57% $ 243,034,014 OTHER ASSETS AND LIABILITIES, NET (27.57) (52,517,751) ------ ---------------- TOTAL NET ASSETS 100.00% $ 190,516,263 ====== ================ + NON-INCOME EARNING SECURITIES. << ALL OR A PORTION OF THIS SECURITY IS ON LOAN. (SEE NOTE 2) +/- VARIABLE RATE INVESTMENTS. ++ 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. SS. THESE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES THE EFFECTIVE MATURITY. ~ THIS WELLS FARGO ADVANTAGE FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY PURPOSES IN A WELLS FARGO ADVANTAGE 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 $1,650,939. * COST FOR FEDERAL INCOME TAX PURPOSES IS $224,379,737 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $24,266,474 GROSS UNREALIZED DEPRECIATION (5,612,197) ----------- NET UNREALIZED APPRECIATION (DEPRECIATION) $18,654,277 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 88 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT SMALL/MID CAP VALUE FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE COMMON STOCKS - 99.07% BUSINESS SERVICES - 10.14% 138,570 3COM CORPORATION+ $ 569,523 12,145 ABM INDUSTRIES INCORPORATED 275,813 6,670 CITRIX SYSTEMS INCORPORATED+ 180,424 43,390 EMBARCADERO TECHNOLOGIES INCORPORATED+ 265,547 51,270 HILL INTERNATIONAL INCORPORATED+ 366,581 8,775 IMS HEALTH INCORPORATED 241,137 7,420 KFORCE INCORPORATED+ 90,301 24,850 MOBIUS MANAGEMENT SYSTEMS INCORPORATED+ 165,253 6,400 SUN MICROSYSTEMS INCORPORATED+ 34,688 11,125 VIGNETTE CORPORATION+ 189,904 2,379,171 ---------------- CHEMICALS & ALLIED PRODUCTS - 2.02% 3,420 AVENTINE RENEWABLE ENERGY HOLDINGS INCORPORATED+ 80,575 27,310 ORASURE TECHNOLOGIES INCORPORATED+ 225,581 52,435 WELLMAN INCORPORATED 167,268 473,424 ---------------- COMMUNICATIONS - 3.39% 8,960 CHINA GRENTECH CORPORATION LIMITED ADR+ 165,222 41,525 CINCINNATI BELL INCORPORATED+ 189,769 96,585 COASTAL CONTACTS INCORPORATED+ 91,106 25,815 LIGHTBRIDGE INCORPORATED+ 349,535 795,632 ---------------- CONSTRUCTION SPECIAL TRADE CONTRACTORS - 1.16% 4,055 CHICAGO BRIDGE & IRON COMPANY NV 110,864 12,845 COMFORT SYSTEMS USA INCORPORATED 162,361 273,225 ---------------- CONSUMER SERVICES - 0.49% 9,263 EMDEON CORPORATION+ 114,769 ---------------- DEPOSITORY INSTITUTIONS - 2.08% 3,267 COMMUNITY BANCORP+ 98,631 15,340 FIRST SECURITY GROUP INCORPORATED 176,870 5,045 MIDWEST BANC HOLDINGS INCORPORATED 119,819 7,602 PACIFIC PREMIER BANCORP INCORPORATED+ 92,592 487,912 ---------------- EATING & DRINKING PLACES - 0.76% 4,985 CALIFORNIA PIZZA KITCHEN INCORPORATED+ 166,050 285 DARDEN RESTAURANTS INCORPORATED 11,448 177,498 ---------------- ELECTRIC, GAS & SANITARY SERVICES - 1.10% 16,955 EL PASO CORPORATION 259,072 ---------------- 89 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT SMALL/MID CAP VALUE FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 11.76% 47,185 EVANS & SUTHERLAND COMPUTER CORPORATION+ $ 199,593 18,900 GRAFTECH INTERNATIONAL LIMITED+ 130,788 13,070 INTEGRATED ELECTRICAL SERVICES INCORPORATED+ 232,517 35,230 MCDATA CORPORATION+ 194,117 4,430 MERCURY COMPUTER SYSTEMS INCORPORATED+ 59,185 12,775 MICRON TECHNOLOGY INCORPORATED+ 178,339 132,335 MRV COMMUNICATIONS INCORPORATED+ 468,466 11,972 NORTEL NETWORKS CORPORATION ADR+ 320,012 6,695 OSI SYSTEMS INCORPORATED+ 140,126 36,615 POWER-ONE INCORPORATED+ 266,557 28,465 RICHARDSON ELECTRONICS LIMITED 259,316 25,450 SILICON STORAGE TECHNOLOGY INCORPORATED+ 114,780 25,350 STATS CHIPPAC LIMITED ADR+ 194,688 2,758,484 ---------------- ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES - 1.52% 25,550 CV THERAPEUTICS INCORPORATED+ 356,678 ---------------- FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 0.34% 2,175 CRANE COMPANY 79,692 ---------------- FOOD STORES - 0.19% 950 THE PANTRY INCORPORATED+ 44,498 ---------------- HEALTH SERVICES - 2.12% 4,630 GENESIS HEALTHCARE CORPORATION+ 218,675 5,940 MANOR CARE INCORPORATED 278,705 497,380 ---------------- HOLDING & OTHER INVESTMENT OFFICES - 4.13% 29,915 AFFORDABLE RESIDENTIAL COMMUNITIES 348,510 16,105 ANNALY MORTGAGE MANAGEMENT INCORPORATED 224,021 12,280 DISCOVERY HOLDING COMPANY CLASS A+ 197,585 12,865 UMH PROPERTIES INCORPORATED 197,735 967,851 ---------------- HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES - 0.95% 2,035 BOYD GAMING CORPORATION 92,206 15,120 EMPIRE RESORTS INCORPORATED+ 131,090 223,296 ---------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 3.07% 18,858 CRAY INCORPORATED+ 224,027 20,425 INTERMEC INCORPORATED+ 495,715 719,742 ---------------- INSURANCE CARRIERS - 4.14% 14,980 KMG AMERICA CORPORATION+ 143,658 2,415 MERCURY GENERAL CORPORATION 127,343 20,505 NORTH POINTE HOLDINGS CORPORATION+ 217,353 4,750 NYMAGIC INCORPORATED 173,850 90 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT SMALL/MID CAP VALUE FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE INSURANCE CARRIERS (CONTINUED) 79,255 QUANTA CAPITAL HOLDINGS LIMITED+ $ 170,398 7,755 SEABRIGHT INSURANCE HOLDINGS INCORPORATED+ 139,668 972,270 ---------------- JUSTICE, PUBLIC ORDER & SAFETY - 1.35% 8,444 GEO GROUP INCORPORATED+ 316,819 ---------------- LEATHER & LEATHER PRODUCTS - 0.58% 15,064 BAKERS FOOTWEAR GROUP INCORPORATED+ 136,179 ---------------- LUMBER & WOOD PRODUCTS, EXCEPT FURNITURE - 0.12% 3,015 CHAMPION ENTERPRISES INCORPORATED+ 28,220 ---------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 1.79% 58,435 ALLIED HEALTHCARE PRODUCTS INCORPORATED+ 302,109 22,645 CREDENCE SYSTEMS CORPORATION+ 117,754 419,863 ---------------- METAL MINING - 8.17% 23,800 APEX SILVER MINES LIMITED+ 378,182 11,255 GOLDCORP INCORPORATED 320,092 7,250 NEWMONT MINING CORPORATION 327,338 18,830 NOVAGOLD RESOURCES INCORPORATED+ 323,123 24,265 RANDGOLD RESOURCES LIMITED ADR+ 569,257 1,917,992 ---------------- MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS - 0.57% 53,070 BIRCH MOUNTAIN RESOURCES LIMITED+ 132,675 ---------------- MISCELLANEOUS MANUFACTURING INDUSTRIES - 1.07% 9,440 ACCO BRANDS CORPORATION+ 249,877 ---------------- MOTOR FREIGHT TRANSPORTATION & WAREHOUSING - 0.22% 4,520 COVENANT TRANSPORT INCORPORATED CLASS A+ 51,528 ---------------- OIL & GAS EXTRACTION - 18.78% 6,310 CANADIAN NATURAL RESOURCES LIMITED 335,881 70,585 GLOBAL INDUSTRIES LIMITED+ 920,428 5,980 HELIX ENERGY SOLUTIONS GROUP INCORPORATED+ 187,593 13,600 HELMERICH & PAYNE INCORPORATED 332,792 20,440 KEY ENERGY SERVICES INCORPORATED+ 319,886 1 MARINER ENERGY INCORPORATED+ 6 19,480 MCMORAN EXPLORATION COMPANY+ 277,006 56,435 NEWPARK RESOURCES INCORPORATED+ 406,896 8,925 PENN WEST ENERGY TRUST 272,748 5,875 PETROQUEST ENERGY INCORPORATED+ 74,848 5,870 PRIDE INTERNATIONAL INCORPORATED+ 176,159 8,002 RANGE RESOURCES CORPORATION 219,735 41,505 SEITEL INCORPORATED+ 148,380 970 TRANSOCEAN INCORPORATED+ 78,463 91 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT SMALL/MID CAP VALUE FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE OIL & GAS EXTRACTION (CONTINUED) 35,760 TRILOGY ENERGY TRUST $ 349,581 16,120 WILLBROS GROUP INCORPORATED+ 304,668 4,405,070 ---------------- PAPER & ALLIED PRODUCTS - 0.44% 6,915 WAUSAU PAPER CORPORATION 103,656 ---------------- PRINTING, PUBLISHING & ALLIED INDUSTRIES - 2.84% 1,615 E.W. SCRIPPS COMPANY CLASS A 80,653 20,105 JOURNAL COMMUNICATIONS INCORPORATED CLASS A 253,524 3,566 MCCLATCHY COMPANY CLASS A 154,408 2,825 R.H. DONNELLEY CORPORATION+ 177,212 665,797 ---------------- RUBBER & MISCELLANEOUS PLASTICS PRODUCTS - 2.17% 40,780 CONSTAR INTERNATIONAL INCORPORATED+ 285,460 42,530 INTERTAPE POLYMER GROUP INCORPORATED+ 224,558 510,018 ---------------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 1.40% 24,170 MARKETAXCESS HOLDINGS INCORPORATED+ 327,987 ---------------- SOCIAL SERVICES - 0.65% 8,465 ABB LIMITED ADR 152,201 ---------------- STONE, CLAY, GLASS & CONCRETE PRODUCTS - 1.46% 22,085 GENTEX CORPORATION 343,643 ---------------- TRANSPORTATION BY AIR - 1.69% 360 AIR CANADA+ ++ 5,433 1,670 AIR CANADA CLASS A+ 25,204 6,850 AIRTRAN HOLDINGS INCORPORATED+ 80,419 4,070 ALASKA AIR GROUP INCORPORATED+ 160,765 8,850 JETBLUE AIRWAYS CORPORATION+ 125,670 397,491 ---------------- TRANSPORTATION SERVICES - 0.29% 4,240 RAILAMERICA INCORPORATED+ 68,179 ---------------- WHOLESALE TRADE NON-DURABLE GOODS - 1.61% 7,525 ENDO PHARMACEUTICALS HOLDINGS INCORPORATED+ 207,540 20,855 SOURCE INTERLINK COMPANIES INCORPORATED+ 170,173 377,713 ---------------- WHOLESALE TRADE-DURABLE GOODS - 4.51% 6,765 DELIAS INCORPORATED+ 70,965 175,115 ENCORIUM GROUP INCORPORATED+ 929,861 5,075 US HOME SYSTEMS INCORPORATED+ 57,652 1,058,478 ---------------- TOTAL COMMON STOCKS (COST $20,732,418) 23,243,980 ---------------- 92 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT SMALL/MID CAP VALUE FUND - -------------------------------------------------------------------------------- SHARES SECURITY NAME VALUE RIGHTS - 0.11% 29,485 AFFORDABLE RESOURCES RIGHTS+(a) $ 25,947 TOTAL RIGHTS (COST $0) 25,947 ---------------- WARRANTS - 0.62% 63,590 HILL INTERNATIONAL INCORPORATED+ 146,257 TOTAL WARRANTS (COST $78,849) 146,257 ---------------- SHORT-TERM INVESTMENTS - 0.38% 89,223 WELLS FARGO MONEY MARKET TRUST~## 89,223 ---------------- TOTAL SHORT-TERM INVESTMENTS (COST $89,223) 89,223 ---------------- TOTAL INVESTMENTS IN SECURITIES (COST $20,900,490)* 100.18% $ 23,505,407 OTHER ASSETS AND LIABILITIES, NET (0.18) (43,294) ------ ---------------- TOTAL NET ASSETS 100.00% $ 23,462,113 ====== ================ + NON-INCOME EARNING 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. ~ THIS WELLS FARGO ADVANTAGE FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY PURPOSES IN A WELLS FARGO ADVANTAGE MONEY MARKET FUND. THE FUND DOES NOT PAY AN INVESTMENT ADVISORY FEE FOR SUCH INVESTMENTS. (a) SECURITY FAIR VALUED IN ACCORDANCE WITH THE PROCEDURES APPROVED BY THE BOARD OF TRUSTEES. ## SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $89,223. * COST FOR FEDERAL INCOME TAX PURPOSES IS $21,383,932 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $ 3,940,565 GROSS UNREALIZED DEPRECIATION (1,819,090) ----------- NET UNREALIZED APPRECIATION (DEPRECIATION) $ 2,121,475 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 93 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE ASSET BACKED SECURITIES - 5.68% $ 168,561 AMERICREDIT AUTOMOBILE RECEIVABLES TRUST SERIES 2003-DM CLASS A4 2.84% 08/06/2010 $ 166,821 8,124 CAPITAL AUTO RECEIVABLES ASSET TRUST SERIES 2004-1 CLASS A3 2.00 11/15/2007 8,113 48,699 CAPITAL AUTO RECEIVABLES ASSET TRUST SERIES 2004-2 CLASS A2 3.35 02/15/2008 48,542 132,000 CAPITAL AUTO RECEIVABLES ASSET TRUST SERIES 2006-1 CLASS A3 5.03 10/15/2009 131,579 222,000 CAPITAL AUTO RECEIVABLES ASSET TRUST SERIES 2006-2 CLASS A3A 4.98 05/15/2011 220,977 88,000 CAPITAL ONE MULTI-ASSET EXECUTION TRUST SERIES 2003-C4 CLASS C4 6.00 08/15/2013 89,912 166,000 CAPITAL ONE PRIME AUTO RECEIVABLES TRUST SERIES 2006-1 CLASS A3 4.99 09/15/2010 165,563 284,000 CARMAX AUTO OWNER TRUST SERIES 2006-2 CLASS A3 5.15 02/15/2011 283,928 216,000 CHASE ISSUANCE TRUST SERIES 2004-A9 CLASS A9 3.22 06/15/2010 212,649 91,000 CITIBANK CREDIT CARD ISSUANCE TRUST SERIES 2000-A3 CLASS A3 6.88 11/16/2009 92,233 253,000 CITIBANK CREDIT CARD ISSUANCE TRUST SERIES 2004-A4 CLASS A4 3.20 08/24/2009 249,623 141,000 CITICORP RESIDENTIAL MORTGAGE SECURITIES SERIES 2006-1 CLASS A2+/- 5.68 07/25/2036 141,120 99,000 CONNECTICUT RRB SPECIAL PURPOSE TRUST CL&P-1 SERIES 2001-1 CLASS A5 6.21 12/30/2011 102,081 171,000 COUNTRYWIDE ASSET BACKED CERTIFICATES SERIES 2005-16 CLASS 2AF2+/- 5.38 05/25/2036 170,327 20,594 COUNTRYWIDE ASSET BACKED CERTIFICATES SERIES 2005-BC4 CLASS 2A1+/- 5.44 08/25/2035 20,597 260,000 COUNTRYWIDE ASSET BACKED CERTIFICATES SERIES 2006-S1 CLASS A2 5.55 08/25/2021 259,192 153,000 DAIMLERCHRYSLER AUTO TRUST SERIES 2006-D CLASS A4 4.94 02/08/2012 152,179 159,859 FORD CREDIT AUTO OWNER TRUST SERIES 2005-A CLASS A3 3.48 11/15/2008 158,864 143,824 FORD CREDIT AUTO OWNER TRUST SERIES 2005-B CLASS A3 4.17 01/15/2009 143,045 114,000 FORD CREDIT AUTO OWNER TRUST SERIES 2005-B CLASS A4 4.38 01/15/2010 112,688 13,071 FRANKLIN AUTO TRUST SERIES 2005-1 CLASS A2 4.84 09/22/2008 13,066 144,000 GREAT AMERICA LEASING RECEIVABLES SERIES 2006-1 CLASS A3++ 5.34 01/15/2010 144,073 133,764 HONDA AUTO RECEIVABLES OWNER TRUST SERIES 2004-2 CLASS A3 3.30 06/16/2008 133,048 167,000 HOUSEHOLD CREDIT CARD MASTER NOTE TRUST INCORPORATED SERIES 2006-1 CLASS A 5.10 06/15/2012 167,092 180,000 HYUNDAI AUTO RECEIVABLES TRUST SERIES 2005-A CLASS A4 4.18 02/15/2012 176,054 14,466 MASTER ASSET BACKED SECURITIES TRUST SERIES 2004-OPT2 CLASS A2+/- 5.70 09/25/2034 14,483 76,294 MASTER ASSET BACKED SECURITIES TRUST SERIES 2005-AB1 CLASS A1B+/- 5.14 11/25/2035 75,882 19,643 MERRILL LYNCH MORTGAGE INVESTORS INCORPORATED SERIES 2005-SD1 CLASS A1+/- 5.53 05/25/2046 19,645 335,000 NATIONAL CITY CREDIT CARD MASTER TRUST SERIES 2005-1 CLASS A+/- 5.40 08/15/2012 335,602 8,615 NISSAN AUTO LEASE TRUST SERIES 2005-A CLASS A2 4.61 01/15/2008 8,613 231,000 NISSAN AUTO LEASE TRUST SERIES 2006-A CLASS A3 5.11 03/15/2010 230,641 62,000 NISSAN AUTO RECEIVABLES OWNER TRUST SERIES 2006-B CLASS A3 5.16 02/15/2010 61,917 118,000 NORTHSTAR EDUCATION FINANCE INCORPORATED SERIES 2005-1 CLASS A5 4.74 10/30/2045 116,681 69,036 OWNIT MORTGAGE LOAN ASSET BACKED CERTIFICATES SERIES 2006-1 CLASS AF1+/- 5.42 12/25/2036 68,713 124,000 PUBLIC SERVICE NEW HAMPSHIRE FUNDING LLC SERIES 2001-1 CLASS A3 6.48 05/01/2015 130,875 32,606 RESIDENTIAL ASSET MORTGAGE PRODUCTS INCORPORATED SERIES 2003-RS3 CLASS A2+/- 5.71 04/25/2033 32,617 50,218 TRIAD AUTO RECEIVABLES OWNER TRUST SERIES 2003-B CLASS A4 3.20 12/13/2010 49,362 70,000 TRIAD AUTO RECEIVABLES OWNER TRUST SERIES 2006-B CLASS A4 5.52 11/12/2012 70,628 124,000 TRIAD AUTO RECEIVABLES OWNER TRUST SERIES 2006-C CLASS A3 5.26 11/14/2011 124,149 48,029 USAA AUTO OWNER TRUST SERIES 2004-3 CLASS A3 3.16 02/17/2009 47,690 29,943 USAA AUTO OWNER TRUST SERIES 2005-1 CLASS A3 3.90 07/15/2009 29,717 42,063 USAA AUTO OWNER TRUST SERIES 2005-3 CLASS A2 4.52 06/16/2008 42,006 119,000 USAA AUTO OWNER TRUST SERIES 2006-3 CLASS A4 5.36 06/15/2012 119,916 146,000 VOLKSWAGEN AUTO LEASE TRUST SERIES 2006-A CLASS A2 5.55 11/20/2008 146,288 157,000 WACHOVIA AUTO LOAN OWNER TRUST SERIES 2006-1 CLASS A3++ 5.10 07/20/2011 156,787 310,000 WACHOVIA AUTO LOAN OWNER TRUST SERIES 2006-2A CLASS A3++ 5.23 08/22/2011 310,335 278,000 WACHOVIA AUTO OWNER TRUST SERIES 2004-A CLASS A4 3.66 07/20/2010 275,096 157,037 WACHOVIA AUTO OWNER TRUST SERIES 2005-B CLASS A2 4.82 02/20/2009 156,809 94 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE ASSET BACKED SECURITIES (CONTINUED) $ 15,981 WFS FINANCIAL OWNER TRUST SERIES 2003-1 CLASS A4 2.74% 09/20/2010 $ 15,962 79,317 WFS FINANCIAL OWNER TRUST SERIES 2003-3 CLASS A4 3.25 05/20/2011 78,499 255,648 WFS FINANCIAL OWNER TRUST SERIES 2003-4 CLASS A4 3.15 05/20/2011 252,459 56,007 WFS FINANCIAL OWNER TRUST SERIES 2004-1 CLASS A4 2.81 08/22/2011 55,059 21,933 WFS FINANCIAL OWNER TRUST SERIES 2005-3 CLASS A3A 4.25 06/17/2010 21,795 TOTAL ASSET BACKED SECURITIES (COST $6,615,482) 6,611,592 ---------------- COLLATERALIZED MORTGAGE OBLIGATIONS - 27.24% 100,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES 2002-PB2 CLASS B 6.31 06/11/2035 104,601 83,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES 2003-1 CLASS A2 4.65 09/11/2036 80,467 86,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES 2004-1 CLASS A4 4.76 11/10/2039 83,219 373,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES 2006-6 CLASS AM 5.39 10/10/2045 373,022 57,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2003-T10 CLASS A2 4.74 03/13/2040 55,414 135,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2004-ESA CLASS C++ 4.94 05/14/2016 134,123 157,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2005-T18 CLASS A4+/- 4.93 02/13/2042 153,006 189,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2006-PW11 CLASS A4+/- 5.46 03/11/2039 191,929 355,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2006-T24 CLASS A2 5.48 10/12/2041 358,211 107,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2006-T24 CLASS A4 5.54 10/12/2041 108,499 250,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES SERIES 2006-PW14 CLASS A4 5.20 12/11/2038 246,992 178,000 CITIGROUP COMMERCIAL MORTGAGE TRUST SERIES 2006-C5 CLASS A4 5.43 10/15/2049 178,856 121,000 CITIGROUP DEUTSCHE BANK COMMERCIAL MORTGAGE SERIES 2006-CD3 CLASS AAB 5.61 10/15/2048 122,757 539,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2006-C8 CLASS A4 5.31 12/10/2046 536,393 224,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 1999-1 CLASS E+/- 7.09 05/15/2032 230,379 40,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2000-C1 CLASS C 7.71 08/15/2033 42,992 86,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2004-LB3A CLASS B+/- 5.28 07/10/2037 85,769 312,000 CS FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2002-CKN2 CLASS A3 6.13 04/15/2037 323,730 134,000 CS FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2002-CKP1 CLASS A3 6.44 12/15/2035 140,991 576,000 CS FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2002-CKS4 CLASS A2 5.18 11/15/2036 573,160 118,000 CS FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2003-C4 CLASS A4+/- 5.14 08/15/2036 116,978 143,000 CS FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2004-C5 CLASS A4 4.83 11/15/2037 138,383 1,176,918 FHLB SERIES VN-2015 CLASS A 5.46 11/27/2015 1,174,159 110,368 FHLMC SERIES 1663 CLASS ZB 6.75 01/15/2024 113,048 427,300 FHLMC SERIES 2579 CLASS DA<< 4.00 03/15/2023 402,104 166,000 FHLMC SERIES 2623 CLASS AJ 4.50 07/15/2016 160,955 257,250 FHLMC SERIES 2814 CLASS BD 4.00 04/15/2018 249,004 135,514 FHLMC SERIES 2975 CLASS EA<< 5.00 05/15/2018 134,456 43,539 FHLMC SERIES 3000 CLASS PA 3.90 01/15/2023 42,298 374,310 FHLMC SERIES 3014 CLASS NA<< 4.50 11/15/2025 369,532 220,000 FHLMC SERIES 3017 CLASS TA 4.50 08/15/2035 213,140 265,498 FHLMC SERIES 3020 CLASS MA<< 5.50 04/15/2027 266,547 301,347 FHLMC SERIES 3026 CLASS GJ<< 4.50 02/15/2029 296,112 374,030 FHLMC SERIES 3086 CLASS PA<< 5.50 05/15/2026 375,207 376,261 FHLMC SERIES 3135 CLASS JA<< 6.00 09/15/2027 379,475 390,733 FHLMC SERIES 3151 CLASS LA<< 6.00 11/15/2027 394,185 284,165 FHLMC SERIES 3152 CLASS LM<< 6.00 01/15/2035 287,441 594,930 FHLMC SERIES 3159 CLASS PA<< 6.00 05/15/2027 600,586 856,094 FHLMC SERIES 3164 CLASS NA<< 6.00 02/15/2027 864,671 95 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED) $1,337,730 FHLMC SERIES 3167 CLASS QA<< 6.00% 10/15/2026 $ 1,350,707 504,997 FHLMC SERIES 3172 CLASS PA<< 6.00 04/15/2027 509,271 247,847 FHLMC SERIES 3174 CLASS CA<< 5.50 02/15/2026 248,560 164,115 FHLMC SERIES 3174 CLASS PX 5.00 06/15/2017 161,749 679,021 FHLMC SERIES 3176 CLASS HA<< 6.00 02/15/2028 686,130 226,745 FHLMC SERIES 3178 CLASS MA<< 6.00 10/15/2026 228,986 137,731 FHLMC SERIES 3183 CLASS PB 6.00 10/15/2035 139,603 762,353 FHLMC SERIES 3184 CLASS LA 6.00 03/15/2028 769,492 335,148 FHLMC SERIES 3192 CLASS GA<< 6.00 03/15/2027 338,454 583,000 FHLMC SERIES 3192 CLASS GB 6.00 01/15/2031 589,862 177,817 FHLMC SERIES 3203 CLASS VA 5.00 08/15/2017 175,139 276,496 FHLMC SERIES 3203 CLASS VC<< 5.00 08/15/2017 271,666 319,701 FHLMC SERIES 3215 CLASS QA<< 6.00 06/15/2027 323,074 575,408 FHLMC SERIES 3220 CLASS PA 6.00 06/15/2027 579,983 241,766 FHLMC SERIES 3221 CLASS VA<< 5.00 09/15/2017 237,990 111,000 FIRST UNION NATIONAL BANK COMMERCIAL MORTGAGE SERIES 2001-C4 CLASS B 6.42 12/12/2033 116,423 21,000 FNMA #874222 5.06 01/01/2017 20,718 22,719 FNMA GRANTOR TRUST SERIES 2002-T11 CLASS A 4.77 04/25/2012 22,549 69,913 FNMA GRANTOR TRUST SERIES 2003-T1 CLASS A 3.81 11/25/2012 67,261 121,250 FNMA SERIES 2003-15 CLASS CH 4.00 02/25/2017 117,631 141,000 FNMA SERIES 2003-16 CLASS PN 4.50 10/25/2015 138,359 163,841 FNMA SERIES 2003-33 CLASS CH<< 4.00 07/25/2017 158,367 458,893 FNMA SERIES 2003-34 CLASS QJ 4.50 01/25/2016 451,249 207,000 FNMA SERIES 2003-84 CLASS GD 4.50 03/25/2017 200,065 334,000 FNMA SERIES 2005-30 CLASS GE<< 5.50 01/25/2034 329,451 184,318 FNMA SERIES 2005-38 CLASS CD<< 5.00 06/25/2019 182,336 268,847 FNMA SERIES 2005-63 CLASS HA<< 5.00 04/25/2023 265,090 222,000 FNMA SERIES 2006-18 CLASS PA<< 5.50 01/25/2026 222,605 848,348 FNMA SERIES 2006-29 CLASS PA<< 5.50 08/25/2026 850,161 219,000 FNMA SERIES 2006-31 CLASS PA<< 5.50 11/25/2026 219,433 168,000 FNMA SERIES 2006-41 CLASS MA 5.50 04/25/2024 168,181 954,942 FNMA SERIES 2006-52 CLASS PM<< 5.50 06/25/2036 949,694 174,000 FNMA SERIES 2006-53 CLASS BW 6.00 09/25/2030 175,996 71,000 FNMA SERIES 2006-53 CLASS PA 5.50 12/25/2026 71,165 249,429 FNMA SERIES 2006-55 CLASS PA<< 6.00 05/25/2026 251,020 482,145 FNMA SERIES 2006-80 CLASS PB<< 6.00 10/25/2027 486,728 163,000 FNMA SERIES 2006-80 CLASS PD 6.00 07/25/2030 165,097 119,893 FNMA SERIES G93-39 CLASS ZQ 6.50 12/25/2023 123,059 154,740 FNMA SERIES G93-41 CLASS Z 7.00 12/25/2023 161,094 276,000 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2003-C2 CLASS A4 5.15 07/10/2037 274,119 185,000 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2004-C3 CLASS A4+/- 5.19 07/10/2039 183,584 152,000 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2003-C2 CLASS B+/- 5.30 05/10/2040 153,813 538,000 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2003-C3 CLASS A4 5.02 04/10/2040 529,646 80,030 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2004-C1 CLASS A1 3.12 03/10/2038 78,043 26,614 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2004-C2 CLASS A1 3.90 08/10/2038 26,080 177,635 GNMA SERIES 2006-8 CLASS A<< 3.94 08/16/2025 173,262 56,000 GS MORTGAGE SECURITIES CORPORATION SERIES II 1998-C1 CLASS B 6.97 10/18/2030 57,258 464,000 GS MORTGAGE SECURITIES CORPORATION SERIES II 1998-GLII CLASS A2 6.56 04/13/2031 468,957 96 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED) $ 355,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2002-C2 CLASS A2 5.05% 12/12/2034 $ 350,882 76,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2002-CIB5 CLASS A2 5.16 10/12/2037 75,541 303,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2003-CB7 CLASS A4+/- 4.88 01/12/2038 295,771 193,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2005-CB11 CLASS A4+/- 5.34 08/12/2037 192,879 7,874 LB COMMERCIAL CONDUIT MORTGAGE TRUST SERIES 1999-C2 CLASS A1 7.11 10/15/2032 7,890 55,000 LB COMMERCIAL CONDUIT MORTGAGE TRUST SERIES 1999-C2 CLASS B 7.43 10/15/2032 57,932 106,000 LB-UBS COMMERCIAL MORTGAGE TRUST SERIES 2003-C8 CLASS A4+/- 5.12 11/15/2032 105,135 212,000 LB-UBS COMMERCIAL MORTGAGE TRUST SERIES 2006-C7 CLASS A3 5.35 11/15/2038 211,995 39,000 LB-UBS COMMERCIAL MORTGAGE TRUST SERIES 2006-C7 CLASS D+/- 5.50 11/15/2038 38,995 217,000 MERRILL LYNCH MORTGAGE TRUST SERIES 2004-KEY2 CLASS A4+/- 4.86 08/12/2039 210,912 189,000 MERRILL LYNCH/COUNTRYWIDE COMMERCIAL MORTGAGE TRUST SERIES 2006-4 CLASS ASB+/- 5.13 12/12/2049 186,692 249,000 MORGAN STANLEY CAPITAL I SERIES 2003-IQ5 CLASS A4 5.01 04/15/2038 245,467 138,000 MORGAN STANLEY CAPITAL I SERIES 2003-IQ6 CLASS A4 4.97 12/15/2041 135,113 110,074 MORGAN STANLEY CAPITAL I SERIES 2004-HQ4 CLASS A2 3.92 04/14/2040 108,212 88,000 MORGAN STANLEY CAPITAL I SERIES 2005-HQ5 CLASS AAB 5.04 01/14/2042 87,010 183,000 MORGAN STANLEY CAPITAL I SERIES 2006-HQ10 CLASS A2 5.28 11/12/2041 183,192 376,000 MORGAN STANLEY CAPITAL I SERIES 2006-T23 CLASS A4+/- 5.81 08/12/2041 391,414 468,734 VENDEE MORTGAGE TRUST SERIES 1994-1 CLASS 2ZB 6.50 02/15/2024 483,503 167,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2002-C1 CLASS A4 6.29 04/15/2034 174,674 138,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2002-C2 CLASS A4 4.98 11/15/2034 136,092 291,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C6 CLASS A3 4.96 08/15/2035 287,689 209,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C6 CLASS A4 5.13 08/15/2035 207,029 116,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C8 CLASS A3 4.45 11/15/2035 112,984 402,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C9 CLASS A4 5.01 12/15/2035 394,662 39,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C9 CLASS B 5.11 12/15/2035 38,478 270,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2004-C10 CLASS A4 4.75 02/15/2041 260,742 105,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2004-C11 CLASS B 5.31 01/15/2041 104,255 177,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2004-C15 CLASS A4 4.80 10/15/2041 170,898 177,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2005-C22 CLASS A4+/- 5.27 12/15/2044 176,824 274,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2006-C26 CLASS APB 6.00 06/15/2045 284,456 175,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2006-C28 CLASS A4 5.57 10/15/2048 177,556 639,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2006-C29 CLASS A4 5.31 11/15/2048 635,480 TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (COST $31,692,797) 31,702,305 ---------------- CORPORATE BONDS & NOTES - 15.32% BUSINESS SERVICES - 0.25% 110,000 INTERNATIONAL LEASE FINANCE CORPORATION SERIES MTN+/- 5.59 05/24/2010 110,398 180,000 INTERNATIONAL LEASE FINANCE CORPORATION SERIES MTN<< 5.40 02/15/2012 180,165 290,563 ---------------- CHEMICALS & ALLIED PRODUCTS - 0.39% 155,000 BRISTOL MYERS SQUIBB COMPANY 5.88 11/15/2036 152,524 80,000 TEVA PHARMACEUTICAL FINANCE LLC 6.15 02/01/2036 77,730 225,000 WYETH 5.50 02/15/2016 225,305 455,559 ---------------- 97 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COMMUNICATIONS - 2.11% $ 75,000 AMERICA MOVIL SA DE CV 6.38% 03/01/2035 $ 73,173 85,000 AT&T INCORPORATED 7.30 11/15/2011 92,027 255,000 AT&T INCORPORATED 5.10 09/15/2014 247,592 105,000 AT&T INCORPORATED 6.15 09/15/2034 103,274 80,000 AT&T INCORPORATED<< 6.80 05/15/2036 85,034 70,000 BELLSOUTH CORPORATION<< 6.00 11/15/2034 67,208 275,000 COMCAST CABLE COMMUNICATIONS HOLDINGS INCORPORATED 8.38 03/15/2013 313,243 185,000 COMCAST CORPORATION 5.90 03/15/2016 185,528 40,000 COMCAST CORPORATION 5.65 06/15/2035 36,309 120,000 NEW CINGULAR WIRELESS SERVICES 8.13 05/01/2012 135,032 190,000 SPRINT CAPITAL CORPORATION 6.13 11/15/2008 192,245 190,000 SPRINT CAPITAL CORPORATION 8.38 03/15/2012 211,163 160,000 SPRINT NEXTEL CORPORATION 6.00 12/01/2016 155,940 135,000 TIME WARNER ENTERTAINMENT COMPANY LP 8.38 07/15/2033 163,160 115,000 VERIZON COMMUNICATIONS INCORPORATED 5.35 02/15/2011 115,186 150,000 VERIZON COMMUNICATIONS INCORPORATED 5.55 02/15/2016 149,482 130,000 VIACOM INCORPORATED<< 5.75 04/30/2011 130,066 2,455,662 ---------------- DEPOSITORY INSTITUTIONS - 2.38% 150,000 BAC CAPITAL TRUST XI 6.63 05/23/2036 161,878 90,000 BANK OF AMERICA CORPORATION 4.25 10/01/2010 87,154 120,000 BANK OF AMERICA CORPORATION 5.38 06/15/2014 119,959 400,000 CITIGROUP INCORPORATED 3.63 02/09/2009 388,172 155,000 CITIGROUP INCORPORATED 5.10 09/29/2011 154,344 140,000 CITIGROUP INCORPORATED 5.85 08/02/2016 144,769 285,000 JPMORGAN CHASE & COMPANY<< 5.60 06/01/2011 288,594 95,000 JPMORGAN CHASE & COMPANY 5.13 09/15/2014 93,415 230,000 JPMORGAN CHASE CAPITAL XVIII 6.95 08/17/2036 248,785 185,000 PNC FUNDING CORPORATION 5.25 11/15/2015 181,904 155,000 ROYAL BANK OF SCOTLAND GROUP PLC 5.00 10/01/2014 150,413 300,000 WACHOVIA CORPORATION 5.30 10/15/2011 299,880 155,000 WACHOVIA CORPORATION 4.88 02/15/2014 149,404 93,000 WASHINGTON MUTUAL INCORPORATED 4.00 01/15/2009 90,673 100,000 WASHINGTON MUTUAL INCORPORATED 5.25 09/15/2017 96,424 120,000 ZIONS BANCORP 5.50 11/16/2015 118,060 2,773,828 ---------------- ELECTRIC UTILITIES - 0.26% 290,000 PROGRESS ENERGY INCORPORATED 6.85 04/15/2012 308,318 ---------------- ELECTRIC, GAS & SANITARY SERVICES - 1.62% 105,000 ALLEGHENY ENERGY SUPPLY++ 8.25 04/15/2012 115,238 270,000 DPL INCORPORATED 6.88 09/01/2011 283,527 75,000 DUKE CAPITAL LLC 5.50 03/01/2014 74,144 45,000 DUKE CAPITAL LLC 8.00 10/01/2019 52,315 110,000 ENERGY TRANSFER PARTNERS LP 5.65 08/01/2012 109,537 70,000 EXELON GENERATION COMPANY LLC 6.95 06/15/2011 73,743 95,000 FIRSTENERGY CORPORATION SERIES B 6.45 11/15/2011 99,067 98 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE ELECTRIC, GAS & SANITARY SERVICES (CONTINUED) $ 80,000 FIRSTENERGY CORPORATION SERIES C 7.38% 11/15/2031 $ 91,107 100,000 INDIANA MICHIGAN POWER COMPANY 6.05 03/15/2037 98,153 190,000 KANSAS GAS & ELECTRIC 5.65 03/29/2021 184,492 170,000 NEVADA POWER COMPANY SERIES M 5.95 03/15/2016 169,649 75,000 ONCOR ELECTRIC DELIVERY 6.38 01/15/2015 77,308 135,000 PSEG POWER LLC 7.75 04/15/2011 145,867 135,000 PSEG POWER LLC 5.00 04/01/2014 128,769 165,000 PUBLIC SERVICE COMPANY OF COLORADO 7.88 10/01/2012 185,127 1,888,043 ---------------- FINANCIAL SERVICES - 0.23% 265,000 CAPITAL ONE FINANCIAL CORPORATION 8.75 02/01/2007 265,648 ---------------- FOOD & KINDRED PRODUCTS - 0.21% 115,000 KRAFT FOODS INCORPORATED 5.63 11/01/2011 116,222 130,000 KRAFT FOODS INCORPORATED 5.25 10/01/2013 128,357 244,579 ---------------- HOLDING & OTHER INVESTMENT OFFICES - 0.27% 305,000 ALLIED CAPITAL CORPORATION 6.63 07/15/2011 310,149 ---------------- INSURANCE AGENTS, BROKERS & SERVICE - 0.16% 190,000 HARTFORD FINANCIAL SERVICES GROUP INCORPORATED 5.50 10/15/2016 189,873 ---------------- INSURANCE CARRIERS - 1.18% 135,000 ACE INA HOLDINGS INCORPORATED 6.70 05/15/2036 145,214 200,000 AMERICAN INTERNATIONAL GROUP INCORPORATED 4.70 10/01/2010 196,518 75,000 AMERICAN INTERNATIONAL GROUP INCORPORATED 5.60 10/18/2016 75,698 110,000 CIGNA CORPORATION 6.15 11/15/2036 108,672 90,000 GE GLOBAL INSURANCE HOLDINGS 7.00 02/15/2026 99,993 235,000 INTERNATIONAL LEASE FINANCE CORPORATION SERIES MTN 5.45 03/24/2011 235,789 132,000 LIBERTY MUTUAL GROUP<<++ 7.50 08/15/2036 144,418 95,000 METLIFE INCORPORATED+/- 6.40 12/15/2036 95,438 155,000 PRUDENTIAL FINANCIAL INCORPORATED SERIES MTN 5.70 12/14/2036 150,873 125,000 WELLPOINT INCORPORATED 5.85 01/15/2036 121,431 1,374,044 ---------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 0.07% 79,000 XEROX CORPORATION 6.40 03/15/2016 80,679 ---------------- MISCELLANEOUS MANUFACTURING INDUSTRIES - 0.19% 215,000 TYCO INTERNATIONAL GROUP SA 6.38 10/15/2011 224,996 ---------------- MOTION PICTURES - 0.15% 170,000 NEWS AMERICA INCORPORATED 6.40 12/15/2035 168,884 ---------------- NON-DEPOSITORY CREDIT INSTITUTIONS - 2.06% 350,000 AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY INCORPORATED++ 5.25 11/21/2011 349,741 145,000 CAPITAL ONE BANK SERIES BKNT 4.88 05/15/2008 144,106 115,000 CAPITAL ONE FINANCIAL COMPANY 6.15 09/01/2016 118,934 257,000 GENERAL ELECTRIC CAPITAL CORPORATION 3.75 12/15/2009 247,370 105,000 GENERAL ELECTRIC CAPITAL CORPORATION SERIES A 5.38 10/20/2016 105,140 99 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE NON-DEPOSITORY CREDIT INSTITUTIONS (CONTINUED) $ 80,000 GENERAL ELECTRIC CAPITAL CORPORATION SERIES MTNA 6.75% 03/15/2032 $ 91,622 500,000 HSBC FINANCE CORPORATION 4.75 04/15/2010 493,315 125,000 RESIDENTIAL CAPITAL CORPORATION+/- 6.74 06/29/2007 125,619 265,000 RESIDENTIAL CAPITAL CORPORATION 6.13 11/21/2008 266,313 445,000 RESIDENTIAL CAPITAL CORPORATION 6.50 04/17/2013 450,979 2,393,139 ---------------- OIL & GAS EXTRACTION - 0.34% 80,000 CONOCOPHILLIPS 5.90 10/15/2032 81,270 165,000 DEVON FINANCING CORPORATION ULC 6.88 09/30/2011 174,474 65,000 PEMEX PROJECT FUNDING MASTER TRUST 7.38 12/15/2014 71,565 65,000 PEMEX PROJECT FUNDING MASTER TRUST 6.63 06/15/2035 66,495 393,804 ---------------- PAPER & ALLIED PRODUCTS - 0.05% 56,000 INTERNATIONAL PAPER COMPANY 5.85 10/30/2012 57,147 ---------------- PETROLEUM REFINING & RELATED INDUSTRIES - 0.06% 75,000 ENTERPRISE PRODUCTS OPERATIONS SERIES B 5.60 10/15/2014 73,660 ---------------- PIPELINES, EXCEPT NATURAL GAS - 0.40% 145,000 DUKE CAPITAL LLC 7.50 10/01/2009 152,565 85,000 ENBRIDGE ENERGY PARTNERS LP 5.88 12/15/2016 84,159 155,000 PLAINS ALL AMERICAN PIPELINE LP++ 6.13 01/15/2017 155,808 75,000 PLAINS ALL AMERICAN PIPELINE LP++ 6.65 01/15/2037 76,146 468,678 ---------------- PRIMARY METAL INDUSTRIES - 0.08% 85,000 CORNING INCORPORATED 7.25 08/15/2036 91,091 ---------------- RAILROAD TRANSPORTATION - 0.12% 125,000 NORFOLK SOUTHERN CORPORATION 7.05 05/01/2037 143,896 ---------------- REAL ESTATE - 0.09% 100,000 EOP OPERATING LP 4.75 03/15/2014 99,063 ---------------- REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.56% 135,000 DEVELOPERS DIVERS REALTY 5.38 10/15/2012 133,704 55,000 PROLOGIS TRUST 5.25 11/15/2010 54,685 150,000 PROLOGIS TRUST 5.50 04/01/2012 149,726 190,000 SIMON PROPERTY GROUP LP 5.60 09/01/2011 191,531 120,000 VENTAS REALTY LP CAPITAL CORPORATION 6.75 04/01/2017 123,900 653,546 ---------------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 1.81% 270,000 CREDIT SUISSE USA INCORPORATED 5.50 08/16/2011 272,943 285,000 GOLDMAN SACHS GROUP INCORPORATED<< 5.13 01/15/2015 278,467 150,000 GOLDMAN SACHS GROUP INCORPORATED 5.95 01/15/2027 148,217 80,000 GOLDMAN SACHS GROUP INCORPORATED 6.45 05/01/2036 83,233 210,000 LAZARD GROUP LLC 7.13 05/15/2015 217,522 115,000 LEHMAN BROTHERS HOLDINGS INCORPORATED 5.75 01/03/2017 116,472 235,000 LEHMAN BROTHERS HOLDINGS INCORPORATED SERIES MTN 5.75 05/17/2013 238,709 100 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES (CONTINUED) $ 140,000 MERRILL LYNCH & COMPANY INCORPORATED 4.25% 02/08/2010 $ 136,039 165,000 MERRILL LYNCH & COMPANY INCORPORATED 6.05 05/16/2016 170,782 100,000 MERRILL LYNCH & COMPANY INCORPORATED 6.22 09/15/2026 103,047 175,000 MORGAN STANLEY 5.63 01/09/2012 177,884 165,000 MORGAN STANLEY 5.38 10/15/2015 163,524 2,106,839 ---------------- TRANSPORTATION EQUIPMENT - 0.28% 70,000 DAIMLERCHRYSLER NA HOLDING CORPORATION 6.50 11/15/2013 71,869 90,000 DAIMLERCHRYSLER NA HOLDING CORPORATION 8.50 01/18/2031 107,139 145,000 DAIMLERCHRYSLER NA HOLDING CORPORATION SERIES MTN 5.75 09/08/2011 144,634 323,642 ---------------- TOTAL CORPORATE BONDS & NOTES (COST $17,735,965) 17,835,330 ---------------- FOREIGN CORPORATE BONDS@ - 3.08% 60,000 BRITISH TELECOM PLC 9.13 12/15/2030 82,072 125,000 CANADIAN NATIONAL RAILWAY COMPANY 6.20 06/01/2036 132,466 125,000 CANADIAN NATURAL RESOURCES<< 6.50 02/15/2037 125,401 120,000 CODELCO INCORPORATED++ 6.15 10/24/2036 122,894 130,000 DEUTSCHE TELEKOM INTERNATIONAL FINANCE BV<< 5.75 03/23/2016 128,090 35,000 DEUTSCHE TELEKOM INTERNATIONAL FINANCE BV 8.25 06/15/2030 43,027 120,000 DIAGEO CAPITAL PLC 5.50 09/30/2016 118,476 69,000 ENCANA CORPORATION 6.50 08/15/2034 71,111 400,000 HBOS TREASURY SERVICES PLC++ 5.00 11/21/2011 397,828 250,000 RAS LAFFAN LIQUEFIED NATURAL GAS COMPANY LIMITED III++ 6.33 09/30/2027 253,223 185,000 RESONA BANK LIMITED+/-++ 5.85 09/29/2049 180,645 380,000 SMFG PREFERRED CAPITAL+/-<<++ 6.08 12/29/2049 377,169 50,000 TELECOM ITALIA CAPITAL 6.00 09/30/2034 45,348 370,000 TELEFONICA EMISIONES SAU 5.98 06/20/2011 376,634 100,000 TELEFONOS DE MEXICO SA DE CV 4.75 01/27/2010 97,762 25,000 TYCO INTERNATIONAL GROUP SA 6.88 01/15/2029 28,420 35,000 VALE OVERSEAS LIMITED 6.25 01/23/2017 35,159 100,000 VALE OVERSEAS LIMITED 8.25 01/17/2034 118,454 425,000 WESTFIELD GROUP++ 5.40 10/01/2012 423,348 170,000 WESTFIELD GROUP++ 5.70 10/01/2016 170,639 255,000 XSTRATA FINANCE CANADA LIMITED++ 5.50 11/16/2011 254,938 TOTAL FOREIGN CORPORATE BONDS@ (COST $3,574,231) 3,583,104 ---------------- FOREIGN GOVERNMENT BONDS@ - 1.00% 190,000 ISRAEL GOVERNMENT BOND 5.50 11/09/2016 188,024 265,000 PROVINCE OF ONTARIO 5.00 10/18/2011 264,601 230,000 QUEBEC PROVINCE 5.13 11/14/2016 228,527 80,000 QUEBEC PROVINCE 7.50 09/15/2029 101,508 70,000 REPUBLIC OF CHILE 7.13 01/11/2012 75,390 114,000 UNITED MEXICAN STATES 5.63 01/15/2017 114,114 100,000 UNITED MEXICAN STATES SERIES MTNA 5.88 01/15/2014 102,600 80,000 UNITED MEXICAN STATES SERIES MTNA<< 6.75 09/27/2034 86,400 TOTAL FOREIGN GOVERNMENT BONDS@ (COST $1,147,156) 1,161,164 ---------------- 101 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE AGENCY SECURITIES - 40.28% FEDERAL HOME LOAN MORTGAGE CORPORATION - 17.75% $ 964,182 FHLMC #1H2618+/-<< 5.59% 05/01/2036 $ 968,424 504,711 FHLMC #1Q0027+/- 5.09 02/01/2036 497,298 66,233 FHLMC #783132+/- 4.98 05/01/2035 65,288 207,715 FHLMC #B12454<< 4.50 02/01/2019 200,415 128,438 FHLMC #B13150 4.00 03/01/2019 121,135 170,395 FHLMC #B13646 4.50 04/01/2019 164,406 114,421 FHLMC #B14028<< 4.50 05/01/2019 110,399 172,392 FHLMC #E01279<< 5.50 01/01/2018 172,688 216,743 FHLMC #E01497<< 5.50 11/01/2018 217,028 966,675 FHLMC #E01602 4.50 03/01/2019 933,719 805,303 FHLMC #G02083<< 4.50 07/01/2035 754,637 70,021 FHLMC #G08083<< 4.50 08/01/2035 65,616 159,641 FHLMC #G11594<< 5.50 08/01/2019 159,843 256,801 FHLMC #G11628<< 4.50 11/01/2019 247,776 729,980 FHLMC #G11650<< 5.00 02/01/2020 717,990 735,945 FHLMC #G11658<< 5.50 01/01/2020 736,075 1,482,281 FHLMC #G11720<< 4.50 08/01/2020 1,430,185 1,062,870 FHLMC #G11769 5.00 10/01/2020 1,044,291 729,185 FHLMC #G12107<< 4.50 08/01/2020 703,557 119,134 FHLMC #G12248<< 4.50 07/01/2020 114,947 818,891 FHLMC #G12333<< 4.50 06/01/2021 789,348 297,173 FHLMC #G12457<< 4.00 02/01/2020 279,709 4,870,000 FHLMC #G12471 4.50 12/01/2018 4,708,187 271,000 FHLMC #G12473<< 4.50 02/01/2020 261,475 105,176 FHLMC #J02372<< 5.50 05/01/2020 105,309 102,947 FHLMC #J02373<< 5.50 05/01/2020 103,077 204,644 FHLMC #J02609<< 4.50 10/01/2020 197,261 163,245 FHLMC SERIES 2631 CLASS MT 3.50 01/15/2022 161,330 535,915 FHLMC SERIES 2645 CLASS MK 3.50 07/15/2022 528,319 766,000 FHLMC SERIES 2825 CLASS QN<< 5.50 09/15/2032 755,172 282,806 FHLMC SERIES 2890 CLASS AP<< 3.75 12/15/2011 275,802 325,807 FHLMC SERIES 3035 CLASS DM<< 5.50 11/15/2025 326,785 2,709,000 FHLMC TBA%% 6.00 01/01/2021 2,744,556 20,662,047 ---------------- FEDERAL NATIONAL MORTGAGE ASSOCIATION - 17.38% 388,451 FNMA #190337<< 5.00 07/01/2033 375,760 2,198,725 FNMA #254828<< 5.00 08/01/2033 2,126,891 95,832 FNMA #387166 4.33 11/01/2011 92,330 1,239,211 FNMA #555592<< 5.50 07/01/2033 1,226,579 206,427 FNMA #678915 5.50 01/01/2033 204,365 300,734 FNMA #682454<< 4.00 09/01/2018 283,983 492,150 FNMA #688017<< 5.50 03/01/2033 487,133 82,132 FNMA #699613<< 5.50 06/01/2033 81,295 1,084,150 FNMA #725222<< 5.50 02/01/2034 1,073,098 624,046 FNMA #725232<< 5.00 03/01/2034 603,658 102 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE FEDERAL NATIONAL MORTGAGE ASSOCIATION (CONTINUED) $ 1,092,159 FNMA #725425 5.50% 04/01/2034 $ 1,081,098 237,196 FNMA #725564 4.53 04/01/2009 233,786 410,536 FNMA #725611<< 5.50 06/01/2034 406,352 98,520 FNMA #728720<< 5.00 07/01/2033 95,301 551,663 FNMA #728877<< 5.00 08/01/2033 533,640 2,658,906 FNMA #735036<< 5.50 12/01/2034 2,630,400 1,236,899 FNMA #735224<< 5.50 02/01/2035 1,224,291 420,937 FNMA #735301<< 4.00 03/01/2020 396,709 1,323,239 FNMA #745018 4.00 09/01/2020 1,247,076 70,915 FNMA #745295 4.65 10/01/2012 69,477 454,954 FNMA #745454<< 4.00 12/01/2020 428,768 280,354 FNMA #745666+/- 6.44 07/01/2036 284,391 92,563 FNMA #753208 4.50 01/01/2034 86,963 286,563 FNMA #758584<< 5.00 11/01/2034 277,295 244,003 FNMA #766745 4.50 03/01/2019 235,673 300,008 FNMA #770330 4.50 04/01/2019 289,766 131,738 FNMA #813642+/-<< 5.65 06/01/2036 132,491 162,343 FNMA #815422<< 4.50 02/01/2035 152,176 221,582 FNMA #815426<< 4.50 02/01/2035 207,942 190,718 FNMA #822051+/-<< 5.05 07/01/2035 189,625 97,413 FNMA #835243+/-<< 4.87 09/01/2035 96,345 572,628 FNMA #839226 4.00 09/01/2020 537,810 42,000 FNMA #874136 5.57 12/01/2016 43,039 36,000 FNMA #874167 5.51 12/01/2016 36,734 157,991 FNMA #879679+/-<< 5.29 04/01/2036 158,304 579,013 FNMA #886046<< 6.00 07/01/2036 582,933 123,000 FNMA #891057+/- 5.50 06/01/2036 123,912 546,562 FNMA #894446+/- 5.93 09/01/2036 552,675 217,618 FNMA SERIES 2003-113 CLASS PN<< 3.50 02/25/2013 213,636 710,676 FNMA SERIES 2003-76 CLASS DE<< 4.00 09/25/2031 672,088 71,952 FNMA SERIES 2003-92 CLASS NM 3.50 04/25/2013 70,705 302,000 FNMA SERIES 2005-69 CLASS JM<< 4.50 08/25/2025 278,792 104,791 FNMA SERIES 2005-77 CLASS BX 4.50 07/25/2028 103,307 20,228,592 ---------------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 5.15% 484,039 GNMA #3624<< 5.50 10/20/2034 480,803 61,563 GNMA SERIES 2006-3 CLASS A 4.21 01/16/2028 60,148 5,332,000 GNMA TBA%% 6.50 01/01/2037 5,450,304 5,991,255 ---------------- TOTAL AGENCY SECURITIES (COST $46,884,180) 46,881,894 ---------------- US TREASURY SECURITIES - 14.72% US TREASURY BONDS - 5.07% 478,000 US TREASURY BOND<< 8.88 02/15/2019 653,590 734,000 US TREASURY BOND<< 7.13 02/15/2023 913,716 1,610,000 US TREASURY BOND<< 6.25 08/15/2023 1,853,136 704,000 US TREASURY BOND<< 6.25 05/15/2030 838,640 103 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE US TREASURY BONDS (CONTINUED) $ 428,000 US TREASURY BOND<< 5.38% 02/15/2031 $ 458,462 1,249,000 US TREASURY BOND<< 4.50 02/15/2036 1,187,722 5,905,266 ---------------- US TREASURY NOTES - 9.65% 518,000 US TREASURY NOTE<< 4.88 05/31/2008 517,757 114,000 US TREASURY NOTE<< 5.13 06/30/2008 114,356 1,024,000 US TREASURY NOTE<< 4.63 09/30/2008 1,020,200 707,000 US TREASURY NOTE<< 4.88 10/31/2008 707,332 241,000 US TREASURY NOTE<< 4.63 11/30/2008 240,124 40,000 US TREASURY NOTE 4.88 05/15/2009 40,088 126,000 US TREASURY NOTE<< 4.88 08/15/2009 126,379 190,000 US TREASURY NOTE<< 4.63 10/31/2011 189,310 5,543,000 US TREASURY NOTE<< 4.50 11/30/2011 5,493,634 201,000 US TREASURY NOTE<< 4.50 11/15/2015 197,906 529,000 US TREASURY NOTE<< 4.50 02/15/2016 520,569 1,565,000 US TREASURY NOTE<< 5.13 05/15/2016 1,612,011 459,000 US TREASURY NOTE<< 4.63 11/15/2016 455,988 11,235,654 ---------------- TOTAL US TREASURY SECURITIES (COST $17,161,026) 17,140,920 ---------------- REPURCHASE AGREEMENTS - 3.69% 4,291,000 BEAR STEARNS COMPANIES INCORPORATED - 102% COLLATERALIZED BY US GOVERNMENT SECURITIES (MATURITY VALUE $4,293,546) 5.34 01/03/2007 4,291,000 TOTAL REPURCHASE AGREEMENTS (COST $4,291,000) 4,291,000 ---------------- COLLATERAL FOR SECURITIES LENDING - 41.58% COLLATERAL INVESTED IN OTHER ASSETS - 41.58% 103,109 ABBEY NATIONAL TREASURY SERVICES PLC+/-++ 5.46 01/16/2007 103,116 687,396 AMERICAN EXPRESS BANK FSB+/- 5.31 01/26/2007 687,410 149,434 AMERICAN EXPRESS BANK FSB SERIES BKNT+/- 5.43 11/21/2007 149,595 433,358 AMERICAN GENERAL FINANCE CORPORATION+/-++ 5.40 01/15/2008 433,519 12,403 AMERICAN HONDA FINANCE CORPORATION SERIES MTN+/-++ 5.33 07/10/2007 12,404 14,943 AMERICAN HONDA FINANCE CORPORATION SERIES MTN+/-++ 5.46 09/27/2007 14,962 26,883 AMSTEL FUNDING CORPORATION++ 5.33 01/22/2007 26,805 29,887 AMSTERDAM FUNDING CORPORATION++ 5.41 01/25/2007 29,787 676,936 AQUIFER FUNDING LLC++ 5.40 01/05/2007 676,638 49,104 ATLANTIC ASSET SECURITIZATION CORPORATION 5.34 01/30/2007 48,904 373,585 ATLAS CAPITAL FUNDING CORPORATION+/-++ 5.34 05/10/2007 373,585 54,902 ATLAS CAPITAL FUNDING CORPORATION++ 5.41 01/03/2007 54,894 298,868 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN+/-++ 5.33 04/25/2007 298,889 373,585 ATLAS CAPITAL FUNDING CORPORATION SERIES MTN1+/-++ 5.35 10/25/2007 373,544 20,831 ATOMIUM FUNDING CORPORATION++ 5.33 02/08/2007 20,719 16,408 ATOMIUM FUNDING CORPORATION++ 5.34 02/06/2007 16,324 37,269 ATOMIUM FUNDING CORPORATION++ 5.36 02/07/2007 37,074 29,588 ATOMIUM FUNDING CORPORATION++ 5.39 02/16/2007 29,394 37,358 BANK ONE NA (LLLINOIS) SERIES BKNT+/- 5.42 01/12/2007 37,359 971,321 BEAR STEARNS & COMPANY INCORPORATED+/- 5.39 02/23/2007 971,321 104 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 76,958 BEAR STEARNS & COMPANY INCORPORATED+/- 5.94% 09/27/2007 $ 77,338 149,434 BEAR STEARNS & COMPANY INCORPORATED SERIES MTN+/- 5.44 10/03/2007 149,568 1,494,340 BEAR STEARNS & COMPANY INCORPORATED REPURCHASE AGREEMENT (MATURITY VALUE $1,495,230) 5.36 01/02/2007 1,494,340 28,691 BEAR STEARNS & COMPANY INCORPORATED SERIES MTNB+/- 5.53 01/16/2007 28,693 224,151 BETA FINANCE INCORPORATED SERIES MTN+/-++ 5.34 07/17/2007 224,220 2,615,094 BNP PARIBAS REPURCHASE AGREEMENT (MATURITY VALUE $2,616,652) 5.36 01/02/2007 2,615,094 66,692 BUCKINGHAM CDO LLC 5.35 03/15/2007 65,993 373,585 BUCKINGHAM II CDO LLC++ 5.32 01/22/2007 372,494 74,478 BUCKINGHAM II CDO LLC 5.35 01/25/2007 74,228 2,017,358 BUCKINGHAM III CDO LLC++ 5.35 01/16/2007 2,013,243 74,717 CAIRN HIGH GRADE FUNDING I LLC++ 5.33 01/12/2007 74,608 657,509 CAIRN HIGH GRADE FUNDING I LLC++ 5.33 02/01/2007 654,636 104,604 CAIRN HIGH GRADE FUNDING I LLC 5.34 03/22/2007 103,401 5,828 CATERPILLAR FINANCIAL SERVICES CORPORATION+/- 5.44 08/20/2007 5,833 5,544 CEDAR SPRINGS CAPITAL COMPANY++ 5.33 01/08/2007 5,539 122,312 CEDAR SPRINGS CAPITAL COMPANY++ 5.33 03/02/2007 121,261 54,782 CEDAR SPRINGS CAPITAL COMPANY 5.34 02/02/2007 54,535 7,173 CEDAR SPRINGS CAPITAL COMPANY 5.35 03/07/2007 7,106 12,493 CEDAR SPRINGS CAPITAL COMPANY++ 5.36 03/12/2007 12,367 395,268 CEDAR SPRINGS CAPITAL COMPANY++ 5.37 01/05/2007 395,094 26,913 CEDAR SPRINGS CAPITAL COMPANY 5.38 01/11/2007 26,878 9,713 CHEYNE FINANCE LLC 5.33 03/22/2007 9,602 156,906 CHEYNE FINANCE LLC++ 5.38 04/13/2007 154,604 19,426 CHEYNE FINANCE LLC++ 5.40 01/23/2007 19,367 1,604,314 CITIGROUP REPURCHASE AGREEMENT (MATURITY VALUE $1,605,269) 5.36 01/02/2007 1,604,314 31,306 CLIPPER RECEIVABLES CORPORATION 5.40 01/19/2007 31,229 18,082 CLIPPER RECEIVABLES CORPORATION 5.41 01/09/2007 18,063 21,504 CLIPPER RECEIVABLES CORPORATION 5.43 01/03/2007 21,500 3,736 CONCORD MINUTEMAN CAPITAL COMPANY SERIES A 5.33 01/17/2007 3,728 182,309 CORPORATE ASSET SECURITIZATION AUSTRALIA LIMITED++ 5.36 01/22/2007 181,777 1,575,034 CORPORATE ASSET SECURITIZATION AUSTRALIA LIMITED++ 5.41 01/19/2007 1,571,128 74,717 CREDIT SUISSE (NEW YORK) SERIES YCD+/- 5.36 03/27/2007 74,662 67,245 CREDIT SUISSE FIRST BOSTON USA INCORPORATED SERIES MTN+/- 5.47 04/05/2007 67,272 34,220 CREDIT SUISSE FIRST BOSTON USA INCORPORATED SERIES MTN+/- 5.72 10/29/2007 34,345 3,736 CROWN POINT CAPITAL COMPANY 5.36 04/17/2007 3,679 14,943 CROWN POINT CAPITAL COMPANY++ 5.39 01/12/2007 14,922 823,889 DEER VALLEY FUNDING LLC 5.32 01/23/2007 821,368 124,150 DEER VALLEY FUNDING LLC++ 5.34 01/24/2007 123,751 44,830 DEER VALLEY FUNDING LLC 5.34 01/25/2007 44,680 288,049 DEER VALLEY FUNDING LLC++ 5.34 02/06/2007 286,583 110,133 DEER VALLEY FUNDING LLC++ 5.35 01/29/2007 109,699 179,321 DEER VALLEY FUNDING LLC++ 5.35 02/27/2007 177,859 33,996 DEUTSCHE BANK AG (NEW YORK) SERIES YCD+/- 5.34 03/15/2007 33,872 7,172,830 FIRST BOSTON REPURCHASE AGREEMENT (MATURITY VALUE $7,177,102) 5.36 01/02/2007 7,172,830 747,170 FIVE FINANCE INCORPORATED SERIES MTN+/-++ 5.37 01/25/2007 747,484 6,456 FOX TROT CDO LIMITED++ 5.34 04/11/2007 6,363 409,539 FOX TROT CDO LIMITED 5.39 01/02/2007 409,539 105 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 175,391 GALLEON CAPITAL LLC 5.40% 01/02/2007 $ 175,391 29,887 GALLEON CAPITAL LLC 5.40 01/18/2007 29,817 239,094 GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY+/- 5.43 06/18/2007 239,094 301,782 GENERAL ELECTRIC CAPITAL CORPORATION SERIES MTNA+/- 5.42 06/22/2007 301,993 508,673 GENWORTH FINANCIAL INCORPORATED+/- 5.51 06/15/2007 509,212 133,086 GEORGE STREET FINANCE LLC++ 5.38 01/16/2007 132,814 934,186 GEORGE STREET FINANCE LLC++ 5.38 01/29/2007 930,506 574,095 GEORGE STREET FINANCE LLC 5.40 01/09/2007 573,510 373,585 GERMAN RESIDENTIAL FUNDING+/-++ 5.35 08/22/2007 373,585 52,302 GOLDMAN SACHS GROUP INCORPORATED SERIES MTN1+/- 5.51 01/09/2007 52,303 747,170 GOLDMAN SACHS GROUP INCORPORATED SERIES MTNB+/- 5.46 03/30/2007 747,409 152,423 HBOS TREASURY SERVICES PLC+/-++ 5.45 01/12/2007 152,429 56,964 HUDSON-THAMES LLC 5.33 01/08/2007 56,915 339,290 HUDSON-THAMES LLC 5.34 01/22/2007 338,299 385,629 HUDSON-THAMES LLC 5.34 02/05/2007 383,720 23,909 HUDSON-THAMES LLC++ 5.38 02/20/2007 23,739 25,254 HUDSON-THAMES LLC++ 5.38 03/05/2007 25,027 10,460 IBM CORPORATION SERIES MTN+/- 5.36 06/28/2007 10,465 523,019 ING USA ANNUITY & LIFE INSURANCE+/- 5.42 09/17/2007 523,019 3,736 IRISH LIFE & PERMANENT PLC++ 5.35 04/04/2007 3,686 340,709 K2 (USA) LLC 5.38 01/23/2007 339,667 956,377 KAUPTHING BANK SERIES MTN+/-++ 5.43 03/20/2007 956,148 74,717 KLIO FUNDING CORPORATION++ 5.36 01/23/2007 74,488 14,943 KLIO FUNDING CORPORATION++ 5.37 01/25/2007 14,893 665,848 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.35 01/08/2007 665,269 16,557 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.37 01/17/2007 16,521 656,777 LA FAYETTE ASSET SECURITIZATION CORPORATION 5.38 01/02/2007 656,777 64,316 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.38 01/16/2007 64,185 49,388 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.39 03/15/2007 48,870 76,660 LA FAYETTE ASSET SECURITIZATION CORPORATION++ 5.41 01/10/2007 76,570 149,434 LEGACY CAPITAL CORPORATION 5.42 01/04/2007 149,391 83,832 LEHMAN BROTHERS HOLDINGS INCORPORATED SERIES MTNG+/- 5.49 04/20/2007 83,887 59,774 LIBERTY LIGHT US CAPITAL SERIES MTN1+/-++ 5.46 04/16/2007 59,805 19,142 LIBERTY STREET FUNDING CORPORATION++ 5.35 01/29/2007 19,067 68,740 LIBERTY STREET FUNDING CORPORATION 5.39 01/19/2007 68,569 37,358 LIBERTY STREET FUNDING CORPORATION++ 5.40 01/23/2007 37,244 747,170 LIQUID FUNDING LIMITED+/-++ 5.32 08/15/2007 723,029 373,585 LIQUID FUNDING LIMITED++ 5.34 03/05/2007 370,215 22,415 MANE FUNDING CORPORATION 5.40 01/29/2007 22,327 44,830 MBIA GLOBAL FUNDING LLC+/-++ 5.35 02/20/2007 44,832 2,540 MERRILL LYNCH & COMPANY INCORPORATED SERIES MTNC+/- 5.40 08/24/2007 2,541 44,830 MERRILL LYNCH & COMPANY INCORPORATED SERIES MTNC+/- 5.47 08/27/2007 44,889 69,487 MERRILL LYNCH & COMPANY INCORPORATED SERIES MTNC+/- 5.50 01/26/2007 69,494 7,472 MERRILL LYNCH & COMPANY INCORPORATED SERIES MTNC+/- 5.52 04/20/2007 7,477 11,208 MERRILL LYNCH & COMPANY INCORPORATED SERIES MTNB+/- 5.60 01/02/2008 11,234 8,966 METLIFE GLOBAL FUNDING I+/-++ 5.43 03/16/2007 8,969 14,943 MORGAN STANLEY+/- 5.48 01/19/2007 14,945 106 PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------- PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 58,279 MORGAN STANLEY+/- 5.50% 02/15/2007 $ 58,290 96,086 MORGAN STANLEY+/- 5.51 01/12/2007 96,089 229,755 MORGAN STANLEY SERIES EXL+/- 5.41 01/15/2008 229,759 373,585 NATEXIS BANQUES POPULAIRES+/-++ 5.37 11/09/2007 373,331 589,517 NATIONWIDE BUILDING SOCIETY+/-++ 5.49 07/20/2007 590,042 32,562 NIEUW AMSTERDAM RECEIVABLES CORPORATION 5.32 03/27/2007 32,163 27,018 NORTH SEA FUNDING 5.38 02/21/2007 26,821 74,717 PRUDENTIAL FUNDING 5.36 01/05/2007 74,684 701,667 RACERS TRUST SERIES 2004-6-MM+/-++ 5.37 06/22/2007 701,679 34,654 RANGER FUNDING CORPORATION 5.36 01/17/2007 34,578 48,865 ROYAL BANK OF SCOTLAND PLC+/-++ 5.36 03/30/2007 48,879 5,215 SAINT GERMAIN FUNDING++ 5.32 01/16/2007 5,205 22,415 SAINT GERMAIN FUNDING 5.41 01/08/2007 22,396 358,642 SEDNA FINANCE INCORPORATED SERIES MTN+/-++ 5.33 04/11/2007 358,685 268,981 SEDNA FINANCE INCORPORATED SERIES MTN+/-++ 5.33 10/26/2007 268,960 298,868 SLM CORPORATION+/-++ 5.35 01/11/2008 298,955 1,048,653 SLM CORPORATION SERIES MTNA+/- 5.50 01/25/2007 1,048,768 76,510 SLM CORPORATION SERIES MTN1+/- 5.59 07/25/2007 76,616 8,966 SVENSKA HANDELSBANKEN INCORPORATED 5.32 01/26/2007 8,935 1,867,925 TASMAN FUNDING INCORPORATED++ 5.34 01/16/2007 1,864,114 472,540 TASMAN FUNDING INCORPORATED++ 5.40 01/22/2007 471,160 33,936 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 5.31 01/11/2007 33,892 18,186 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED 5.35 01/04/2007 18,181 29,887 THUNDER BAY FUNDING LLC++ 5.36 01/31/2007 29,760 98,298 THUNDER BAY FUNDING LLC++ 5.41 01/11/2007 98,169 56,591 TIERRA ALTA FUNDING I LIMITED 5.36 01/23/2007 56,417 1,494,340 TRANSAMERICA OCCIDENTAL LIFE INSURANCE+/- 5.51 12/31/2007 1,494,340 287,197 TRAVELERS INSURANCE COMPANY+/- 5.42 02/09/2007 287,191 3,826 TULIP FUNDING CORPORATION 5.36 04/25/2007 3,763 373,585 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+/-++ 5.36 03/09/2007 373,656 55,291 VERSAILLES CDS LLC++ 5.34 01/17/2007 55,169 315,649 VERSAILLES CDS LLC++ 5.35 01/11/2007 315,236 186,792 VERSAILLES CDS LLC++ 5.36 01/04/2007 186,738 74,717 VERSAILLES CDS LLC 5.36 01/16/2007 74,565 283,925 VERSAILLES CDS LLC 5.40 01/19/2007 283,220 22,415 VETRA FINANCE CORPORATION++ 5.36 03/02/2007 22,223 251,647 VETRA FINANCE CORPORATION++ 5.37 03/13/2007 249,083 373,585 WAL-MART STORES INCORPORATED SERIES MTN+/- 5.26 03/28/2007 373,596 523,019 WHISTLEJACKET CAPITAL LIMITED++ 5.40 01/08/2007 522,564 230,935 WHITE PINE FINANCE LLC 5.35 01/22/2007 230,261 14,943 WHITE PINE FINANCE LLC 5.39 01/16/2007 14,913 17,663 WORLD OMNI VEHICLE LEASING INCORPORATED++ 5.36 01/12/2007 17,637 16,931 WORLD OMNI VEHICLE LEASING INCORPORATED++ 5.36 01/16/2007 16,891 48,398,742 ---------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $48,398,742) 48,398,742 ---------------- 107 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS PORTFOLIO OF INVESTMENTS--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------- VALUE TOTAL INVESTMENTS IN SECURITIES (COST $177,500,579)* 152.59% $ 177,606,051 OTHER ASSETS AND LIABILITIES, NET (52.59) (61,156,726) ------ ---------------- TOTAL NET ASSETS 100.00% $ 116,449,325 ====== ================ +/- VARIABLE RATE INVESTMENTS. << ALL OR A PORTION OF THIS SECURITY IS ON LOAN. (SEE NOTE 2) ++ 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. @ FOREIGN BOND PRINCIPAL IS DENOMINATED IN US DOLLARS EXCEPT AS INDICATED PARENTHETICALLY. %% SECURITIES ISSUED ON A WHEN-ISSUED (TBA) BASIS. (SEE NOTE 2) * COST FOR FEDERAL INCOME TAX PURPOSES IS $177,674,323 AND NET UNREALIZED APPRECIATION (DEPRECIATION) CONSISTS OF: GROSS UNREALIZED APPRECIATION $ 578,576 GROSS UNREALIZED DEPRECIATION (646,848) --------- NET UNREALIZED APPRECIATION (DEPRECIATION) $ (68,272) PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE SCHEDULE OF TBA SALE COMMITMENTS - (3.41%) $ (72,000) FNMA TBA%% 5.00% 01/01/2037 $ (69,502) (1,395,000) FNMA TBA%% 5.50 01/01/2037 (1,378,434) (2,615,000) FNMA TBA%% 5.00 02/01/2037 (2,524,291) TOTAL SCHEDULE OF TBA SALE COMMITMENTS (TOTAL PROCEEDS $(3,991,669)) (3,972,227) ---------------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 108 THIS PAGE IS INTENTIONALLY LEFT BLANK -- WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS STATEMENTS OF ASSETS AND LIABILITIES--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT ASSET VT C&B ALLOCATION LARGE CAP VT DISCOVERY FUND VALUE FUND Fund - ---------------------------------------------------------------------------------------------------------------------------- ASSETS INVESTMENTS: IN SECURITIES, AT MARKET VALUE ........................................ $ 277,236,095 $ 31,069,797 $ 229,662,228 COLLATERAL FOR SECURITIES LOANED (NOTE 2) ............................. 110,235,757 1,110,367 9,374,240 INVESTMENTS IN AFFILIATES ............................................. 10,240,222 993,983 4,913,819 REPURCHASE AGREEMENTS ................................................. 0 0 0 ------------- ------------- ------------- TOTAL INVESTMENTS AT MARKET VALUE (SEE COST BELOW) ....................... 397,712,074 33,174,147 243,950,287 ------------- ------------- ------------- CASH .................................................................. 50,000 50,000 0 RECEIVABLE FOR FUND SHARES ISSUED ..................................... 5,667 17,788 14,982 RECEIVABLE FOR INVESTMENTS SOLD ....................................... 27,768 100,609 0 RECEIVABLES FOR DIVIDENDS AND INTEREST ................................ 1,710,029 70,428 63,377 RECEIVABLE FOR INTEREST RATE SWAPS/SPREAD LOCKS ....................... 0 0 0 ------------- ------------- ------------- TOTAL ASSETS ............................................................. 399,505,538 33,412,972 244,028,646 ------------- ------------- ------------- LIABILITIES OPTION WRITTEN, AT VALUE .............................................. 0 0 0 PAYABLE FOR DAILY VARIATION MARGIN ON FUTURES CONTRACTS ............... 203,550 0 0 PAYABLE FOR FUND SHARES REDEEMED ...................................... 399,562 90,270 377,232 PAYABLE FOR INVESTMENTS PURCHASED ..................................... 1,584 0 0 DIVIDENDS PAYABLE ..................................................... 0 0 0 PAYABLE TO INVESTMENT ADVISOR AND AFFILIATES (NOTE 3) ................. 255,039 22,348 271,191 PAYABLE FOR SECURITIES LOANED (NOTE 2) ................................ 110,235,757 1,110,367 9,374,240 ACCRUED EXPENSES AND OTHER LIABILITIES ................................ 22,886 21,154 59,234 ------------- ------------- ------------- TOTAL LIABILITIES ........................................................ 111,118,378 1,244,139 10,081,897 ------------- ------------- ------------- TOTAL NET ASSETS ......................................................... $ 288,387,160 $ 32,168,833 $ 233,946,749 ============= ============= ============= NET ASSETS CONSIST OF: - ---------------------------------------------------------------------------------------------------------------------------- PAID-IN CAPITAL ....................................................... $ 260,951,016 $ 30,178,994 $ 402,008,610 UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ............................ 11,798 0 0 UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS ................. (3,129,538) (2,573,501) (200,867,787) NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS, FOREIGN CURRENCIES AND TRANSLATION OF ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES .................................................. 29,306,372 4,563,340 32,805,926 NET UNREALIZED APPRECIATION (DEPRECIATION) OF FUTURES ................. 1,247,512 0 0 NET UNREALIZED APPRECIATION (DEPRECIATION) OF OPTIONS, SWAP AGREEMENTS, AND SHORT SALES ..................................................... 0 0 0 ------------- ------------- ------------- TOTAL NET ASSETS ......................................................... $ 288,387,160 $ 32,168,833 $ 233,946,749 ------------- ------------- ------------- COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE(1) - ---------------------------------------------------------------------------------------------------------------------------- NET ASSETS ............................................................ $ 288,387,160 $ 32,168,833 $ 233,946,749 SHARES OUTSTANDING .................................................... 20,403,484 2,861,584 14,226,095 NET ASSET VALUE AND OFFERING PRICE PER SHARE .......................... $ 14.13 $ 11.24 $ 16.44 ------------- ------------- ------------- INVESTMENTS AT COST ...................................................... $ 368,405,702 $ 28,610,807 $ 211,144,361 ============= ============= ============= SECURITIES ON LOAN, AT MARKET VALUE ...................................... $ 107,565,217 $ 1,065,263 $ 9,070,965 ============= ============= ============= PREMIUMS RECEIVED ON WRITTEN OPTIONS ..................................... $ 0 $ 0 $ 0 ============= ============= ============= (1) EACH FUND HAS AN UNLIMITED NUMBER OF AUTHORIZED SHARES. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 110 STATEMENTS OF ASSETS AND LIABILITIES--DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT LARGE VT EQUITY VT INTERNATIONAL COMPANY INCOME FUND CORE FUND CORE FUND - ------------------------------------------------------------------------------------------------------------------------------- ASSETS INVESTMENTS: IN SECURITIES, AT MARKET VALUE ........................................ $ 115,166,389 $ 43,349,902 $ 25,070,910 COLLATERAL FOR SECURITIES LOANED (NOTE 2) ............................. 91,039 0 992,319 INVESTMENTS IN AFFILIATES ............................................. 1,005,507 726,912 297,686 REPURCHASE AGREEMENTS ................................................. 0 0 0 ------------- ---------------- ------------- TOTAL INVESTMENTS AT MARKET VALUE (SEE COST BELOW) ....................... 116,262,935 44,076,814 26,360,915 ------------- ---------------- ------------- CASH .................................................................. 50,000 50,000 50,000 RECEIVABLE FOR FUND SHARES ISSUED ..................................... 69,687 33,830 0 RECEIVABLE FOR INVESTMENTS SOLD ....................................... 0 159,688 121,286 RECEIVABLES FOR DIVIDENDS AND INTEREST ................................ 150,387 85,978 21,644 RECEIVABLE FOR INTEREST RATE SWAPS/SPREAD LOCKS ....................... 0 0 0 ------------- ---------------- ------------- TOTAL ASSETS ............................................................. 116,533,009 44,406,310 26,553,845 ------------- ---------------- ------------- LIABILITIES OPTION WRITTEN, AT VALUE .............................................. 0 0 0 PAYABLE FOR DAILY VARIATION MARGIN ON FUTURES CONTRACTS ............... 0 0 0 PAYABLE FOR FUND SHARES REDEEMED ...................................... 86,941 36,334 92,605 PAYABLE FOR INVESTMENTS PURCHASED ..................................... 0 0 79,765 DIVIDENDS PAYABLE ..................................................... 0 0 0 PAYABLE TO INVESTMENT ADVISOR AND AFFILIATES (NOTE 3) ................. 98,626 33,468 16,546 PAYABLE FOR SECURITIES LOANED (NOTE 2) ................................ 91,039 0 992,319 ACCRUED EXPENSES AND OTHER LIABILITIES ................................ 24,201 19,658 23,359 ------------- ---------------- ------------- TOTAL LIABILITIES ........................................................ 300,807 89,460 1,204,594 ------------- ---------------- ------------- TOTAL NET ASSETS ......................................................... $ 116,232,202 $ 44,316,850 $ 25,349,251 ============= ================ ============= NET ASSETS CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------- PAID-IN CAPITAL ....................................................... $ 82,530,394 $ 31,855,416 $ 38,688,718 UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ............................ 0 (718) 0 UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS ................. 6,803,480 3,279,275 (15,760,952) NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS, FOREIGN CURRENCIES AND TRANSLATION OF ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES .................................................. 26,898,328 9,182,877 2,421,485 NET UNREALIZED APPRECIATION (DEPRECIATION) OF FUTURES ................. 0 0 0 NET UNREALIZED APPRECIATION (DEPRECIATION) OF OPTIONS, SWAP AGREEMENTS, AND SHORT SALES ..................................................... 0 0 0 ------------- ---------------- ------------- TOTAL NET ASSETS ......................................................... $ 116,232,202 $ 44,316,850 $ 25,349,251 ------------- ---------------- ------------- COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE(1) - ------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ............................................................ $ 116,232,202 $ 44,316,850 $ 25,349,251 SHARES OUTSTANDING .................................................... 5,886,384 4,488,066 1,625,474 NET ASSET VALUE AND OFFERING PRICE PER SHARE .......................... $ 19.75 $ 9.87 $ 15.59 ------------- ---------------- ------------- INVESTMENTS AT COST ...................................................... $ 89,364,607 $ 34,894,534 $ 23,939,430 ============= ================ ============= SECURITIES ON LOAN, AT MARKET VALUE ...................................... $ 88,156 $ 0 $ 941,967 ============= ================ ============= PREMIUMS RECEIVED ON WRITTEN OPTIONS ..................................... $ 0 $ 0 $ 0 ============= ================ ============= VT LARGE VT MONEY COMPANY MARKET VT OPPORTUNITY GROWTH FUND FUND FUND - ----------------------------------------------------------------------------------------------------------------------------- ASSETS INVESTMENTS: IN SECURITIES, AT MARKET VALUE ........................................ $ 106,189,175 $ 42,841,335 $ 851,767,456 COLLATERAL FOR SECURITIES LOANED (NOTE 2) ............................. 1,976,816 0 38,890,638 INVESTMENTS IN AFFILIATES ............................................. 2,221,474 0 45,450,496 REPURCHASE AGREEMENTS ................................................. 0 9,598,271 0 ------------- ------------- -------------- TOTAL INVESTMENTS AT MARKET VALUE (SEE COST BELOW) ....................... 110,387,465 52,439,606 936,108,590 ------------- ------------- -------------- CASH .................................................................. 50,000 50,000 3,993 RECEIVABLE FOR FUND SHARES ISSUED ..................................... 64,047 0 87,166 RECEIVABLE FOR INVESTMENTS SOLD ....................................... 300,311 0 1,076,145 RECEIVABLES FOR DIVIDENDS AND INTEREST ................................ 38,896 92,103 840,855 RECEIVABLE FOR INTEREST RATE SWAPS/SPREAD LOCKS ....................... 0 0 900,401 ------------- ------------- -------------- TOTAL ASSETS ............................................................. 110,840,719 52,581,709 939,017,150 ------------- ------------- -------------- LIABILITIES OPTION WRITTEN, AT VALUE .............................................. 0 0 1,146,060 PAYABLE FOR DAILY VARIATION MARGIN ON FUTURES CONTRACTS ............... 0 0 0 PAYABLE FOR FUND SHARES REDEEMED ...................................... 123,649 0 751,585 PAYABLE FOR INVESTMENTS PURCHASED ..................................... 0 0 86,460 DIVIDENDS PAYABLE ..................................................... 0 13,274 0 PAYABLE TO INVESTMENT ADVISOR AND AFFILIATES (NOTE 3) ................. 92,424 28,973 819,001 PAYABLE FOR SECURITIES LOANED (NOTE 2) ................................ 1,976,816 0 38,890,638 ACCRUED EXPENSES AND OTHER LIABILITIES ................................ 26,816 40,379 276,472 ------------- ------------- -------------- TOTAL LIABILITIES ........................................................ 2,219,705 82,626 41,970,216 ------------- ------------- -------------- TOTAL NET ASSETS ......................................................... $ 108,621,014 $ 52,499,083 $ 897,046,934 ============= ============= ============== NET ASSETS CONSIST OF: - ----------------------------------------------------------------------------------------------------------------------------- PAID-IN CAPITAL ....................................................... $ 128,677,596 $ 52,499,144 $ 589,560,251 UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) 0 0 4,246,699 UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS ................. (29,867,696) (61) 116,474,477 NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS, FOREIGN CURRENCIES AND TRANSLATION OF ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES .................................................. 9,811,114 0 185,938,535 NET UNREALIZED APPRECIATION (DEPRECIATION) OF FUTURES 0 0 0 NET UNREALIZED APPRECIATION (DEPRECIATION) OF OPTIONS, SWAP AGREEMENTS, AND SHORT SALES ..................................................... 0 0 826,972 ------------- ------------- -------------- TOTAL NET ASSETS ......................................................... $ 108,621,014 $ 52,499,083 $ 897,046,934 ------------- ------------- -------------- COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE(1) - ----------------------------------------------------------------------------------------------------------------------------- NET ASSETS ............................................................ $ 108,621,014 $ 52,499,083 $ 897,046,934 SHARES OUTSTANDING .................................................... 11,326,778 52,502,003 37,345,338 NET ASSET VALUE AND OFFERING PRICE PER SHARE .......................... $ 9.59 $ 1.00 $ 24.02 ------------- ------------- -------------- INVESTMENTS AT COST ...................................................... $ 100,576,351 $ 52,439,606 $ 750,170,055 ============= ============= ============== SECURITIES ON LOAN, AT MARKET VALUE ...................................... $ 1,937,520 $ 0 $ 37,261,389 ============= ============= ============== PREMIUMS RECEIVED ON WRITTEN OPTIONS ..................................... $ 0 $ 0 $ 1,072,630 ============= ============= ============== 111 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS STATEMENTS OF ASSETS AND LIABILITIES--DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT SMALL CAP VT SMALL/MID VT TOTAL RETURN GROWTH FUND CAP VALUE FUND BOND FUND - ------------------------------------------------------------------------------------------------------------------------- ASSETS INVESTMENTS: IN SECURITIES, AT MARKET VALUE .................................... $ 188,061,183 $ 23,416,184 $ 124,916,309 COLLATERAL FOR SECURITIES LOANED (NOTE 2) ......................... 53,321,892 0 48,398,742 INVESTMENTS IN AFFILIATES ......................................... 1,650,939 89,223 0 REPURCHASE AGREEMENTS ............................................. 0 0 4,291,000 ------------- -------------- --------------- TOTAL INVESTMENTS AT MARKET VALUE (SEE COST BELOW) ................... 243,034,014 23,505,407 177,606,051 ------------- -------------- --------------- CASH .............................................................. 50,000 0 111,247 RECEIVABLE FOR FUND SHARES ISSUED ................................. 52,572 13,833 154,932 RECEIVABLE FOR INVESTMENTS SOLD ................................... 1,463,127 485,029 22,968,079 RECEIVABLES FOR DIVIDENDS AND INTEREST ............................ 25,480 13,648 1,880,841 RECEIVABLE FOR INTEREST RATE SWAPS/SPREAD LOCKS ................... 0 0 9,773 ------------- -------------- --------------- TOTAL ASSETS ......................................................... 244,625,193 24,017,917 202,730,923 ------------- -------------- --------------- LIABILITIES SECURITIES SOLD SHORT, AT FAIR VALUE .............................. 0 0 3,972,227 PAYABLE FOR FUND SHARES REDEEMED .................................. 333,020 68,671 72,460 PAYABLE FOR INVESTMENTS PURCHASED ................................. 269,130 432,043 33,710,421 DIVIDENDS PAYABLE ................................................. 0 0 27,373 PAYABLE TO INVESTMENT ADVISOR AND AFFILIATES (NOTE 3) ............. 169,793 19,617 83,931 PAYABLE FOR SECURITIES LOANED (NOTE 2) ............................ 53,321,892 0 48,398,742 ACCRUED EXPENSES AND OTHER LIABILITIES ............................ 15,095 35,473 16,444 ------------- -------------- --------------- TOTAL LIABILITIES .................................................... 54,108,930 555,804 86,281,598 ------------- -------------- --------------- TOTAL NET ASSETS ..................................................... $ 190,516,263 $ 23,462,113 $ 116,449,325 ============= ============== =============== NET ASSETS CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------- PAID-IN CAPITAL ................................................... $ 139,921,897 $ 17,878,126 $ 118,148,640 UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ........................ 0 (62,222) 11,436 UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS ............. 31,232,445 3,041,532 (1,845,437) NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS, FOREIGN CURRENCIES AND TRANSLATION OF ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES ........................................... 19,361,921 2,604,677 105,472 NET UNREALIZED APPRECIATION (DEPRECIATION) OF OPTIONS, SWAP AGREEMENTS, AND SHORT SALES ..................................... 0 0 29,214 ------------- -------------- --------------- TOTAL NET ASSETS ..................................................... $ 190,516,263 $ 23,462,113 $ 116,449,325 ------------- -------------- --------------- COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE(1) - ------------------------------------------------------------------------------------------------------------------------- NET ASSETS ........................................................ $ 190,516,263 $ 23,462,113 $ 116,449,325 SHARES OUTSTANDING ................................................ 19,126,469 1,774,331 11,873,503 NET ASSET VALUE AND OFFERING PRICE PER SHARE ...................... $ 9.96 $ 13.22 $ 9.81 ------------- -------------- --------------- INVESTMENTS AT COST .................................................. $ 223,672,093 $ 20,900,490 $ 177,500,579 ============= ============== =============== SECURITIES ON LOAN, AT MARKET VALUE .................................. $ 50,943,849 $ 0 $ 47,278,348 ============= ============== =============== PROCEEDS FOR TBA SALE COMMITMENTS (NOTE 2) ........................... $ 0 $ 0 $ 3,991,669 ============= ============== =============== (1) EACH FUND HAS AN UNLIMITED NUMBER OF AUTHORIZED SHARES. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 112 THIS PAGE IS INTENTIONALLY LEFT BLANK -- WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS STATEMENTS OF OPERATIONS--FOR THE YEAR ENDED DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT ASSET VT C&B ALLOCATION LARGE CAP VT DISCOVERY FUND VALUE FUND FUND - ----------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME DIVIDENDS(1) ............................................................... $ 3,262,684 $ 669,742 $ 621,831 INTEREST ................................................................... 5,645,135 0 570 INCOME FROM AFFILIATED SECURITIES .......................................... 557,512 58,115 323,294 SECURITIES LENDING INCOME, NET ............................................. 163,584 2,263 21,792 ---------------- ------------- ------------- TOTAL INVESTMENT INCOME ....................................................... 9,628,915 730,120 967,487 ---------------- ------------- ------------- EXPENSES ADVISORY FEES .............................................................. 1,618,130 164,284 1,860,395 ADMINISTRATION FEES ........................................................ 470,729 47,792 396,884 CUSTODY FEES ............................................................... 58,841 5,974 49,611 ACCOUNTING FEES ............................................................ 33,826 21,402 34,606 DISTRIBUTION FEES (NOTE 3) ................................................. 735,514 74,674 620,132 PROFESSIONAL FEES .......................................................... 22,919 18,530 14,298 REGISTRATION FEES .......................................................... 80 23 500 SHAREHOLDER REPORTS ........................................................ 30,895 6,170 12,017 TRUSTEES' FEES ............................................................. 8,599 8,599 8,599 OTHER FEES AND EXPENSES .................................................... 11,745 920 3,433 ---------------- ------------- ------------- TOTAL EXPENSES ................................................................ 2,991,278 348,368 3,000,475 ---------------- ------------- ------------- LESS: WAIVED FEES AND REIMBURSED EXPENSES (NOTE 3) ............................... (50,485) (49,670) (149,497) NET EXPENSES ............................................................... 2,940,793 298,698 2,850,978 ---------------- ------------- ------------- NET INVESTMENT INCOME (LOSS) .................................................. 6,688,122 431,422 (1,883,491) ---------------- ------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS - ----------------------------------------------------------------------------------------------------------------------------------- NET REALIZED GAIN (LOSS) FROM: SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION ............ 852,959 1,745,507 30,085,125 FUTURES TRANSACTIONS ....................................................... 5,543,226 0 0 OPTIONS, SWAP AGREEMENTS AND SHORT SALE TRANSACTIONS ....................... 0 0 0 ---------------- ------------- ------------- NET REALIZED GAIN (LOSS) FROM INVESTMENTS ..................................... 6,396,185 1,745,507 30,085,125 ---------------- ------------- ------------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF: SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION ............ 16,375,451 3,785,197 5,638,071 FUTURES TRANSACTIONS ....................................................... 3,807,411 0 0 OPTIONS, SWAP AGREEMENTS AND SHORT SALE TRANSACTIONS ....................... 0 0 0 ---------------- ------------- ------------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS ........... 20,182,862 3,785,197 5,638,071 ---------------- ------------- ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ........................ 26,579,047 5,530,704 35,723,196 ---------------- ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ............... $ 33,267,169 $ 5,962,126 $ 33,839,705 ================ ============= ============= (1) NET OF FOREIGN WITHHOLDING TAXES OF .................................... $ 0 $ 4,119 $ 3,390 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 114 STATEMENTS OF OPERATIONS--FOR THE YEAR ENDED DECEMBER 31, 2006 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT LARGE VT EQUITY VT INTERNATIONAL COMPANY INCOME FUND CORE FUND CORE FUND - ----------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME DIVIDENDS(1) ............................................................... $ 2,708,372 $ 1,162,436 $ 401,760 INTEREST ................................................................... 0 0 0 INCOME FROM AFFILIATED SECURITIES .......................................... 68,785 39,097 19,664 SECURITIES LENDING INCOME, NET ............................................. 5,604 214 1,123 -------------- ---------------- ------------- TOTAL INVESTMENT INCOME ....................................................... 2,782,761 1,201,747 422,547 -------------- ---------------- ------------- EXPENSES ADVISORY FEES .............................................................. 605,914 316,247 141,522 ADMINISTRATION FEES ........................................................ 176,266 67,466 41,171 CUSTODY FEES ............................................................... 22,033 42,166 5,146 ACCOUNTING FEES ............................................................ 25,176 40,982 21,208 DISTRIBUTION FEES (NOTE 3) ................................................. 275,416 105,416 64,328 PROFESSIONAL FEES .......................................................... 19,610 10,598 17,917 REGISTRATION FEES .......................................................... 11 4 98 SHAREHOLDER REPORTS ........................................................ 9,108 11,355 6,163 TRUSTEES' FEES ............................................................. 8,599 8,599 8,599 OTHER FEES AND EXPENSES .................................................... 2,067 1,911 920 -------------- ---------------- ------------- TOTAL EXPENSES ................................................................ 1,144,200 604,744 307,072 -------------- ---------------- ------------- LESS: WAIVED FEES AND REIMBURSED EXPENSES (NOTE 3) ............................... (42,539) (183,082) (49,760) NET EXPENSES ............................................................... 1,101,661 421,662 257,312 -------------- ---------------- ------------- NET INVESTMENT INCOME (LOSS) .................................................. 1,681,100 780,085 165,235 -------------- ---------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS - ----------------------------------------------------------------------------------------------------------------------------------- NET REALIZED GAIN (LOSS) FROM: SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION ............ 6,885,071 3,263,218 573,883 FUTURES TRANSACTIONS ....................................................... 0 0 0 OPTIONS, SWAP AGREEMENTS AND SHORT SALE TRANSACTIONS ....................... 0 0 0 -------------- ---------------- ------------- NET REALIZED GAIN (LOSS) FROM INVESTMENTS ..................................... 6,885,071 3,263,218 573,883 -------------- ---------------- ------------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF: SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION ............ 10,106,146 3,923,194 2,829,099 FUTURES TRANSACTIONS ....................................................... 0 0 0 OPTIONS, SWAP AGREEMENTS AND SHORT SALE TRANSACTIONS ....................... 0 0 0 -------------- ---------------- ------------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS ........... 10,106,146 3,923,194 2,829,099 -------------- ---------------- ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ........................ 16,991,217 7,186,412 3,402,982 -------------- ---------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ............... $ 18,672,317 $ 7,966,497 $ 3,568,217 ============== ================ ============= (1) NET OF FOREIGN WITHHOLDING TAXES OF .................................... $ 6,013 $ 96,919 $ 0 VT LARGE VT MONEY COMPANY MARKET VT OPPORTUNITY GROWTH FUND FUND FUND - ----------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME DIVIDENDS(1) ............................................................... $ 850,488 $ 0 $ 11,411,201 INTEREST ................................................................... 0 2,700,398 12,182 INCOME FROM AFFILIATED SECURITIES .......................................... 95,492 0 3,254,536 SECURITIES LENDING INCOME, NET ............................................. 11,337 0 48,899 -------------- --------------- -------------- TOTAL INVESTMENT INCOME ....................................................... 957,317 2,700,398 14,726,818 -------------- --------------- -------------- EXPENSES ADVISORY FEES .............................................................. 626,019 159,512 6,898,358 ADMINISTRATION FEES ........................................................ 182,115 85,073 1,520,074 CUSTODY FEES ............................................................... 22,764 10,634 190,009 ACCOUNTING FEES ............................................................ 25,348 22,497 102,603 DISTRIBUTION FEES (NOTE 3) ................................................. 284,554 132,927 2,375,115 PROFESSIONAL FEES .......................................................... 18,896 11,160 23,863 REGISTRATION FEES .......................................................... 20 40 200 SHAREHOLDER REPORTS ........................................................ 19,625 4,889 27,881 TRUSTEES' FEES ............................................................. 8,599 8,599 8,599 OTHER FEES AND EXPENSES .................................................... 1,505 384 24,181 -------------- --------------- -------------- TOTAL EXPENSES ................................................................ 1,189,445 435,715 11,170,883 -------------- --------------- -------------- LESS: WAIVED FEES AND REIMBURSED EXPENSES (NOTE 3) ............................... (51,205) (36,936) (1,005,300) NET EXPENSES ............................................................... 1,138,240 398,779 10,165,583 -------------- --------------- -------------- NET INVESTMENT INCOME (LOSS) .................................................. (180,923) 2,301,619 4,561,235 -------------- --------------- -------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS - ----------------------------------------------------------------------------------------------------------------------------------- NET REALIZED GAIN (LOSS) FROM: SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION ............ (1,406,919) (61) 115,285,289 FUTURES TRANSACTIONS ....................................................... 0 0 0 OPTIONS, SWAP AGREEMENTS AND SHORT SALE TRANSACTIONS ....................... 0 0 4,516,710 -------------- --------------- -------------- NET REALIZED GAIN (LOSS) FROM INVESTMENTS ..................................... (1,406,919) (61) 119,801,999 -------------- --------------- -------------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF: SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION ............ 3,887,244 0 (16,627,857) FUTURES TRANSACTIONS ....................................................... 0 0 0 OPTIONS, SWAP AGREEMENTS AND SHORT SALE TRANSACTIONS ....................... 0 0 824,954 -------------- --------------- -------------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS ........... 3,887,244 0 (15,802,903) -------------- --------------- -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ........................ 2,480,325 (61) 103,999,096 -------------- --------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ............... $ 2,299,402 $ 2,301,558 $ 108,560,331 ============== =============== ============== (1) NET OF FOREIGN WITHHOLDING TAXES OF .................................... $ 15,756 $ 0 $ 82,115 115 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS STATEMENTS OF OPERATIONS--FOR THE YEAR ENDED DECEMBER 31, 2006 - -------------------------------------------------------------------------------- VT SMALL CAP VT SMALL/MID VT TOTAL RETURN GROWTH FUND CAP VALUE FUND BOND FUND - ----------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME DIVIDENDS(1) ............................................................... $ 145,788 $ 200,446 $ 0 INTEREST ................................................................... 0 0 4,928,984 INCOME FROM AFFILIATED SECURITIES .......................................... 76,682 18,236 0 SECURITIES LENDING INCOME, NET ............................................. 163,431 0 37,837 ------------- -------------- ---------------- TOTAL INVESTMENT INCOME ....................................................... 385,901 218,682 4,966,821 ------------- -------------- ---------------- EXPENSES ADVISORY FEES .............................................................. 1,344,366 180,520 425,061 ADMINISTRATION FEES ........................................................ 286,798 38,511 151,133 CUSTODY FEES ............................................................... 35,850 4,814 18,892 ACCOUNTING FEES ............................................................ 28,423 21,644 24,438 DISTRIBUTION FEES (NOTE 3) ................................................. 448,122 60,173 236,145 PROFESSIONAL FEES .......................................................... 19,353 22,234 19,553 REGISTRATION FEES .......................................................... 74 32 19 SHAREHOLDER REPORTS ........................................................ 36,490 14,156 11,462 TRUSTEES' FEES ............................................................. 8,599 8,599 8,599 OTHER FEES AND EXPENSES .................................................... 1,143 445 1,237 ------------- -------------- ---------------- TOTAL EXPENSES ................................................................ 2,209,218 351,128 896,539 ------------- -------------- ---------------- LESS: WAIVED FEES AND REIMBURSED EXPENSES (NOTE 3) ............................... (58,517) (76,710) (46,268) NET EXPENSES ............................................................... 2,150,701 274,418 850,271 ------------- -------------- ---------------- NET INVESTMENT INCOME (LOSS) .................................................. (1,764,800) (55,736) 4,116,550 ------------- -------------- ---------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS - ----------------------------------------------------------------------------------------------------------------------------------- NET REALIZED GAIN (LOSS) FROM: SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION ............ 34,346,985 3,947,154 (736,642) OPTIONS, SWAP AGREEMENTS AND SHORT SALE TRANSACTIONS ....................... 0 (48,508) (8) ------------- -------------- ---------------- NET REALIZED GAIN (LOSS) FROM INVESTMENTS ..................................... 34,346,985 3,898,646 (736,650) ------------- -------------- ---------------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF: SECURITIES, FOREIGN CURRENCIES AND FOREIGN CURRENCY TRANSLATION ............ 4,007,449 (453,528) 489,918 OPTIONS, SWAP AGREEMENTS AND SHORT SALE TRANSACTIONS ....................... 0 26,676 27,258 ------------- -------------- ---------------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS ........... 4,007,449 (426,852) 517,176 ------------- -------------- ---------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ........................ 38,354,434 3,471,794 (219,474) ------------- -------------- ---------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ............... $ 36,589,634 $ 3,416,058 $ 3,897,076 ============= ============== ================ (1) NET OF FOREIGN WITHHOLDING TAXES OF .................................... $ 0 $ 12,855 $ 0 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 116 THIS PAGE IS INTENTIONALLY LEFT BLANK -- WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND -------------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, 2006 DECEMBER 31, 2005 - ----------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS BEGINNING NET ASSETS .................................................................. $ 309,673,169 $ 326,373,676 OPERATIONS: NET INVESTMENT INCOME (LOSS) .......................................................... 6,688,122 6,533,339 NET REALIZED GAIN (LOSS) ON INVESTMENTS ............................................... 6,396,185 3,703,766 NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS ................... 20,182,862 4,825,732 ----------------- ----------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .......................... 33,267,169 15,062,837 ----------------- ----------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: NET INVESTMENT INCOME ................................................................. (6,714,517) (6,511,857) NET REALIZED GAIN ON SALES OF INVESTMENTS ............................................. (3,306,822) (6,949,202) ----------------- ----------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS ...................................................... (10,021,339) (13,461,059) ----------------- ----------------- CAPITAL SHARES TRANSACTIONS: PROCEEDS FROM SHARES SOLD ............................................................. 14,519,334 23,187,871 REINVESTMENT OF DISTRIBUTIONS ......................................................... 10,021,653 13,460,744 COST OF SHARES REDEEMED ............................................................... (69,072,826) (54,950,900) ----------------- ----------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS .................................................................... (44,531,839) (18,302,285) ----------------- ----------------- NET INCREASE (DECREASE) IN NET ASSETS .................................................... (21,286,009) (16,700,507) ================= ================= ENDING NET ASSETS ........................................................................ $ 288,387,160 $ 309,673,169 ================= ================= SHARES ISSUED AND REDEEMED: SHARES SOLD ........................................................................... 1,088,070 1,801,649 SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS ........................................ 763,474 1,042,132 SHARES REDEEMED ....................................................................... (5,181,128) (4,264,928) ----------------- ----------------- NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS ............................................................ (3,329,584) (1,421,147) ================= ================= ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ............................. $ 11,798 $ 55,079 ================= ================= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 118 STATEMENTS OF CHANGES IN NET ASSETS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT C&B LARGE CAP VALUE FUND VT DISCOVERY FUND ------------------------------------ ------------------------------------ FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2006 DECEMBER 31, 2005 DECEMBER 31, 2006 DECEMBER 31, 2005 - ----------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS BEGINNING NET ASSETS ............................... $ 28,663,756 $ 30,286,684 $ 250,275,085 $ 93,047,848 OPERATIONS: NET INVESTMENT INCOME (LOSS) ....................... 431,422 222,351 (1,883,491) (1,559,009) NET REALIZED GAIN (LOSS) ON INVESTMENTS ............ 1,745,507 4,250,051 30,085,125 26,101,116 NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS ................... 3,785,197 (3,584,156) 5,638,071 6,142,490 ----------------- ----------------- ----------------- ---------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ......................................... 5,962,126 888,246 33,839,705 30,684,597 ----------------- ----------------- ----------------- ---------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: NET INVESTMENT INCOME .............................. (440,202) (226,321) 0 0 NET REALIZED GAIN ON SALES OF INVESTMENTS .......... 0 0 0 (8,101,469) ----------------- ----------------- ----------------- ---------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS ................... (440,202) (226,321) 0 (8,101,469) ----------------- ----------------- ----------------- ---------------- CAPITAL SHARES TRANSACTIONS: PROCEEDS FROM SHARES SOLD .......................... 8,888,305 7,527,983 27,531,437 179,537,035 REINVESTMENT OF DISTRIBUTIONS ...................... 440,202 226,321 0 8,101,469 COST OF SHARES REDEEMED ............................ (11,345,354) (10,039,157) (77,699,478) (52,994,395) ----------------- ----------------- ----------------- ---------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS ......................... (2,016,847) (2,284,853) (50,168,041) 134,644,109 ----------------- ----------------- ----------------- ---------------- NET INCREASE (DECREASE) IN NET ASSETS ................. 3,505,077 (1,622,928) (16,328,336) 157,227,237 ================= ================= ================= ================ ENDING NET ASSETS ..................................... $ 32,168,833 $ 28,663,756 $ 233,946,749 $ 250,275,085 ================= ================= ================= ================ SHARES ISSUED AND REDEEMED: SHARES SOLD ........................................ 867,789 813,392 1,777,423 14,406,806 SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS ..... 42,359 24,483 0 650,199 SHARES REDEEMED .................................... (1,116,479) (1,088,473) (5,010,257) (3,948,021) ----------------- ----------------- ----------------- ---------------- NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS .......... (206,331) (250,598) (3,232,834) 11,108,984 ================= ================= ================= ================ ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ...................................... $ 0 $ 0 $ 0 $ 0 ================= ================= ================= ================ VT EQUITY INCOME FUND ------------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, 2006 DECEMBER 31, 2005 - ------------------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS BEGINNING NET ASSETS ................................................................... $ 114,375,162 $ 120,138,117 OPERATIONS: NET INVESTMENT INCOME (LOSS) ........................................................... 1,681,100 1,682,226 NET REALIZED GAIN (LOSS) ON INVESTMENTS ................................................ 6,885,071 5,822,817 NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS .................... 10,106,146 (1,474,612) ----------------- ---------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........................... 18,672,317 6,030,431 ----------------- ---------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: NET INVESTMENT INCOME .................................................................. (1,695,304) (1,696,104) NET REALIZED GAIN ON SALES OF INVESTMENTS .............................................. (241,083) 0 ----------------- ---------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS ....................................................... (1,936,387) (1,696,104) ----------------- ---------------- CAPITAL SHARES TRANSACTIONS: PROCEEDS FROM SHARES SOLD .............................................................. 17,660,732 18,396,659 REINVESTMENT OF DISTRIBUTIONS .......................................................... 1,936,387 1,696,104 COST OF SHARES REDEEMED ................................................................ (34,476,009) (30,190,045) ----------------- ---------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS ............................................................. (14,878,890) (10,097,282) ----------------- ---------------- NET INCREASE (DECREASE) IN NET ASSETS ..................................................... 1,857,040 (5,762,955) ================= ================ ENDING NET ASSETS ......................................................................... $ 116,232,202 $ 114,375,162 ================= ================ SHARES ISSUED AND REDEEMED: SHARES SOLD ............................................................................ 967,254 1,111,888 SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS ......................................... 107,475 102,059 SHARES REDEEMED ........................................................................ (1,934,053) (1,823,349) ----------------- ---------------- NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS ........................................................ (859,324) (609,402) ================= ================ ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) .............................. $ 0 $ 5,458 ================= ================ 119 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- VT INTERNATIONAL CORE FUND ------------------------------------ FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, 2006 DECEMBER 31, 2005 - ----------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS BEGINNING NET ASSETS ................................................................... $ 39,601,598 $ 35,071,405 OPERATIONS: NET INVESTMENT INCOME (LOSS) ........................................................... 780,085 606,454 NET REALIZED GAIN (LOSS) ON INVESTMENTS ................................................ 3,263,218 1,709,193 NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS .................... 3,923,194 1,290,570 ------------ ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........................... 7,966,497 3,606,217 ------------ ------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: NET INVESTMENT INCOME .................................................................. (698,387) (741,605) NET REALIZED GAIN ON SALES OF INVESTMENTS .............................................. (1,638,003) (1,020,677) ------------ ------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS ....................................................... (2,336,390) (1,762,282) ------------ ------------- CAPITAL SHARES TRANSACTIONS: PROCEEDS FROM SHARES SOLD .............................................................. 9,119,417 16,592,049 REINVESTMENT OF DISTRIBUTIONS .......................................................... 2,336,390 1,762,282 COST OF SHARES REDEEMED ................................................................ (12,370,662) (15,668,073) ------------ ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS ........... (914,855) 2,686,258 ------------ ------------- NET INCREASE (DECREASE) IN NET ASSETS ..................................................... 4,715,252 4,530,193 ============ ============= ENDING NET ASSETS ......................................................................... $ 44,316,850 $ 39,601,598 ============ ============= SHARES ISSUED AND REDEEMED: SHARES SOLD ............................................................................ 982,679 2,001,352 SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS ......................................... 262,323 212,671 SHARES REDEEMED ........................................................................ (1,330,217) (1,882,902) ------------ ------------- NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS ... (85,215) 331,121 ============ ============= ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) .............................. $ (718) $ 0 ============ ============= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 120 STATEMENTS OF CHANGES IN NET ASSETS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT LARGE COMPANY CORE FUND VT LARGE COMPANY GROWTH FUND ------------------------------------ ------------------------------------ FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2006 DECEMBER 31, 2005 DECEMBER 31, 2006 DECEMBER 31, 2005 - ----------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS BEGINNING NET ASSETS .............................. $ 28,460,417 $ 38,054,560 $ 116,002,760 $ 107,228,921 OPERATIONS: NET INVESTMENT INCOME (LOSS) ...................... 165,235 156,767 (180,923) (226,181) NET REALIZED GAIN (LOSS) ON INVESTMENTS ........... 573,883 6,924,173 (1,406,919) (1,564,512) NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS ................... 2,829,099 (8,137,614) 3,887,244 7,873,544 ------------- ------------- ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........................................ 3,568,217 (1,056,674) 2,299,402 6,082,851 ------------- ------------- ------------- ------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: NET INVESTMENT INCOME ............................. (169,525) (162,985) 0 (186,924) NET REALIZED GAIN ON SALES OF INVESTMENTS ......... 0 0 0 0 ------------- ------------- ------------- ------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS .................. (169,525) (162,985) 0 (186,924) ------------- ------------- ------------- ------------- CAPITAL SHARES TRANSACTIONS: PROCEEDS FROM SHARES SOLD ......................... 870,198 906,354 19,955,112 23,235,887 REINVESTMENT OF DISTRIBUTIONS ..................... 169,525 162,985 0 186,924 COST OF SHARES REDEEMED ........................... (7,549,581) (9,443,823) (29,636,260) (20,544,899) ------------- ------------- ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS ........................ (6,509,858) (8,374,484) (9,681,148) 2,877,912 ------------- ------------- ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS ................ (3,111,166) (9,594,143) (7,381,746) 8,773,839 ============= ============= ============= ============= ENDING NET ASSETS .................................... $ 25,349,251 $ 28,460,417 $ 108,621,014 $ 116,002,760 ============= ============= ============= ============= SHARES ISSUED AND REDEEMED: SHARES SOLD ....................................... 62,521 68,314 2,177,338 2,639,508 SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS .... 10,882 11,923 0 20,631 SHARES REDEEMED ................................... (543,007) (708,247) (3,230,633) (2,353,988) ------------- ------------- ------------- ------------- NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS ......... (469,604) (628,010) (1,053,295) 306,151 ============= ============= ============= ============= ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ............................................ $ 0 $ 2,409 $ 0 $ 0 ============= ============= ============= ============= VT MONEY MARKET FUND ------------------------------------ FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, 2006 DECEMBER 31, 2005 - ----------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS BEGINNING NET ASSETS ................................................................... $ 55,503,618 $ 58,737,611 OPERATIONS: NET INVESTMENT INCOME (LOSS) ........................................................... 2,301,619 1,443,539 NET REALIZED GAIN (LOSS) ON INVESTMENTS ................................................ (61) 1,859 NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS .................... 0 0 ------------ ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........................... 2,301,558 1,445,398 ------------ ------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: NET INVESTMENT INCOME .................................................................. (2,302,981) (1,443,538) NET REALIZED GAIN ON SALES OF INVESTMENTS .............................................. 0 0 ------------ ------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS ....................................................... (2,302,981) (1,443,538) ------------ ------------- CAPITAL SHARES TRANSACTIONS: PROCEEDS FROM SHARES SOLD .............................................................. 47,059,483 56,243,472 REINVESTMENT OF DISTRIBUTIONS .......................................................... 2,300,419 1,443,538 COST OF SHARES REDEEMED ................................................................ (52,363,014) (60,922,863) ------------ ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS ........... (3,003,112) (3,235,853) ------------ ------------- NET INCREASE (DECREASE) IN NET ASSETS ..................................................... (3,004,535) (3,233,993) ============ ============= ENDING NET ASSETS ......................................................................... $ 52,499,083 $ 55,503,618 ============ ============= SHARES ISSUED AND REDEEMED: SHARES SOLD ............................................................................ 47,059,483 56,243,472 SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS ......................................... 2,300,419 1,443,538 SHARES REDEEMED ........................................................................ (52,363,014) (60,922,863) ------------ ------------- NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS .............................................................................. (3,003,112) (3,235,853) ============ ============= ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) .............................. $ 0 $ 306 ============ ============= 121 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- VT OPPORTUNITY FUND ------------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, 2006 DECEMBER 31, 2005 - ------------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS BEGINNING NET ASSETS ............................... $ 1,004,763,346 $ 1,118,121,068 OPERATIONS: NET INVESTMENT INCOME (LOSS) ....................................................... 4,561,235 (640,221) NET REALIZED GAIN (LOSS) ON INVESTMENTS ............................................ 119,801,999 133,740,228 NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS ................ (15,802,903) (58,164,307) ----------------- ----------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ...................... 108,560,331 74,935,700 ----------------- ----------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: NET INVESTMENT INCOME .............................................................. 0 0 NET REALIZED GAIN ON SALES OF INVESTMENTS .......................................... (103,073,932) 0 ----------------- ----------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS .................................................. (103,073,932) 0 ----------------- ----------------- CAPITAL SHARES TRANSACTIONS: PROCEEDS FROM SHARES SOLD .......................................................... 54,335,214 46,087,654 REINVESTMENT OF DISTRIBUTIONS ...................................................... 103,073,932 0 COST OF SHARES REDEEMED ............................................................ (270,611,957) (234,381,076) ----------------- ----------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS ...... (113,202,811) (188,293,422) ----------------- ----------------- NET INCREASE (DECREASE) IN NET ASSETS ................................................ (107,716,412) (113,357,722) ================= ================= ENDING NET ASSETS .................................................................... $ 897,046,934 $ 1,004,763,346 ================= ================= SHARES ISSUED AND REDEEMED: SHARES SOLD ........................................................................ 2,258,636 2,025,540 SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS ..................................... 4,908,283 0 SHARES REDEEMED .................................................................... (11,307,863) (10,370,808) ----------------- ----------------- NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS ................................................................. (4,140,944) (8,345,268) ================= ================= ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ......................... $ 4,246,699 $ 149,220 ================= ================= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 122 STATEMENTS OF CHANGES IN NET ASSETS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND VT SMALL/MID CAP VALUE FUND ------------------------------------- ------------------------------------- FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2006 DECEMBER 31, 2005 DECEMBER 31, 2006 DECEMBER 31, 2005 - ------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS BEGINNING NET ASSETS ......................... $ 167,033,021 $ 180,229,571 $ 23,888,622 $ 25,989,364 OPERATIONS: NET INVESTMENT INCOME (LOSS) ................. (1,764,800) (1,640,732) (55,736) (118,161) NET REALIZED GAIN (LOSS) ON INVESTMENTS ...... 34,346,985 19,948,736 3,898,646 5,721,563 NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS .............. 4,007,449 (8,933,160) (426,852) (2,083,351) ----------------- ----------------- ----------------- ----------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................... 36,589,634 9,374,844 3,416,058 3,520,051 ----------------- ----------------- ----------------- ----------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: NET INVESTMENT INCOME ........................ 0 0 0 (96,372) NET REALIZED GAIN ON SALES OF INVESTMENTS .... (4,390,755) 0 (3,659,180) 0 ----------------- ----------------- ----------------- ----------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS ............ (4,390,755) 0 (3,659,180) (96,372) ----------------- ----------------- ----------------- ----------------- CAPITAL SHARES TRANSACTIONS: PROCEEDS FROM SHARES SOLD .................... 18,106,886 9,800,839 7,953,474 3,225,144 REINVESTMENT OF DISTRIBUTIONS ................ 4,390,702 0 3,659,180 96,372 COST OF SHARES REDEEMED ...................... (31,213,225) (32,372,233) (11,796,041) (8,845,937) ----------------- ----------------- ----------------- ----------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS .... (8,715,637) (22,571,394) (183,387) (5,524,421) ----------------- ----------------- ----------------- ----------------- NET INCREASE (DECREASE) IN NET ASSETS .......... 23,483,242 (13,196,550) (426,509) (2,100,742) ================= ================= ================= ================= ENDING NET ASSETS .............................. $ 190,516,263 $ 167,033,021 $ 23,462,113 $ 23,888,622 ================= ================= ================= ================= SHARES ISSUED AND REDEEMED: SHARES SOLD .................................. 1,947,455 1,282,013 579,952 259,733 SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS .............................. 527,094 0 310,890 8,245 SHARES REDEEMED .............................. (3,377,927) (4,220,207) (864,749) (728,641) ----------------- ----------------- ----------------- ----------------- NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS .... (903,378) (2,938,194) 26,093 (460,663) ================= ================= ================= ================= ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ................................ $ 0 $ 0 $ (62,222) $ (145,049) ================= ================= ================= ================= VT TOTAL RETURN BOND FUND -------------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, 2006 DECEMBER 31, 2005 - ------------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS BEGINNING NET ASSETS .............................. $ 85,444,520 $ 76,682,692 OPERATIONS: NET INVESTMENT INCOME (LOSS) ...................................................... 4,116,550 2,903,887 NET REALIZED GAIN (LOSS) ON INVESTMENTS ........................................... (736,650) (724,565) NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS ............... 517,176 (681,452) ------------------ ----------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ......................................................... 3,897,076 1,497,870 ------------------ ----------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: NET INVESTMENT INCOME ............................................................. (4,144,502) (2,987,277) NET REALIZED GAIN ON SALES OF INVESTMENTS ......................................... 0 (342,527) ------------------ ----------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS ................................................. (4,144,502) (3,329,804) ------------------ ----------------- CAPITAL SHARES TRANSACTIONS: PROCEEDS FROM SHARES SOLD ......................................................... 48,274,827 30,845,348 REINVESTMENT OF DISTRIBUTIONS ..................................................... 4,134,737 3,326,107 COST OF SHARES REDEEMED ........................................................... (21,157,333) (23,577,693) ------------------ ----------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS ......................................... 31,252,231 10,593,762 ------------------ ----------------- NET INCREASE (DECREASE) IN NET ASSETS ............................................... 31,004,805 8,761,828 ================== ================= ENDING NET ASSETS ................................................................... $ 116,449,325 $ 85,444,520 ================== ================= SHARES ISSUED AND REDEEMED: SHARES SOLD ....................................................................... 4,954,448 3,090,488 SHARES ISSUED IN REINVESTMENT OF DISTRIBUTIONS ................................................................... 424,285 333,520 SHARES REDEEMED ................................................................... (2,173,282) (2,363,403) ------------------ ----------------- NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS ......................................... 3,205,451 1,060,605 ================== ================= ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ..................................................................... $ 11,436 $ 4,629 ================== ================= 123 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- NET REALIZED BEGINNING NET AND DISTRIBUTIONS DISTRIBUTIONS NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET VALUE PER INCOME GAIN (LOSS) ON INVESTMENT REALIZED SHARE (LOSS) INVESTMENTS INCOME GAINS - ------------------------------------------------------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ............... $ 13.05 0.31 1.23 (0.31) (0.15) JANUARY 1, 2005 TO DECEMBER 31, 2005 ............... $ 12.97 0.27 0.37 (0.27) (0.29) JANUARY 1, 2004 TO DECEMBER 31, 2004 ............... $ 12.51 0.26 0.86 (0.26) (0.40) JANUARY 1, 2003 TO DECEMBER 31, 2003 ............... $ 10.41 0.18 2.10 (0.18) 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 ............... $ 12.32 0.21 (1.78) (0.23) (0.11) VT C&B LARGE CAP VALUE FUND - ------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ............... $ 9.34 0.15 1.90 (0.15) 0.00 JANUARY 1, 2005 TO DECEMBER 31, 2005 ............... $ 9.13 0.07 0.21 (0.07) 0.00 JANUARY 1, 2004 TO DECEMBER 31, 2004 ............... $ 8.34 0.14 0.79 (0.14) 0.00 JANUARY 1, 2003 TO DECEMBER 31, 2003 ............... $ 6.75 0.12 1.59 (0.12) 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 ............... $ 9.02 0.10 (2.27) (0.10) 0.00 VT DISCOVERY FUND(SM) - ------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ............... $ 14.34 (0.13) 2.23 0.00 0.00 JANUARY 1, 2005 TO DECEMBER 31, 2005 ............... $ 14.65 (0.09) 1.09 0.00 (1.31) JANUARY 1, 2004 TO DECEMBER 31, 2004 ............... $ 12.66 (0.13) 2.12 0.00 0.00 JANUARY 1, 2003 TO DECEMBER 31, 2003 ............... $ 9.08 (0.04) 3.62 0.00 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 ............... $ 10.32 (0.01) (1.23) 0.00 0.00 VT EQUITY INCOME FUND - ------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ............... $ 16.96 0.28 2.83 (0.28) (0.04) JANUARY 1, 2005 TO DECEMBER 31, 2005 ............... $ 16.33 0.24 0.63 (0.24) 0.00 JANUARY 1, 2004 TO DECEMBER 31, 2004 ............... $ 14.93 0.24 1.40 (0.24) 0.00 JANUARY 1, 2003 TO DECEMBER 31, 2003 ............... $ 12.32 0.21 2.95 (0.21) (0.34) JANUARY 1, 2002 TO DECEMBER 31, 2002 ............... $ 15.52 0.21 (3.19) (0.22) 0.00 VT INTERNATIONAL CORE FUND - ------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ............... $ 8.66 0.18 1.56 (0.16) (0.37) JANUARY 1, 2005 TO DECEMBER 31, 2005 ............... $ 8.27 0.13 0.64 (0.16) (0.22) JANUARY 1, 2004 TO DECEMBER 31, 2004 ............... $ 7.56 0.06 0.67 (0.02) 0.00 JANUARY 1, 2003 TO DECEMBER 31, 2003 ............... $ 5.77 0.02 1.79 (0.02) 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 ............... $ 7.50 0.02 (1.74) (0.01) 0.00 VT LARGE COMPANY CORE FUND - ------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ............... $ 13.58 0.10 2.01 (0.10) 0.00 JANUARY 1, 2005 TO DECEMBER 31, 2005 ............... $ 13.97 0.08 (0.39) (0.08) 0.00 JANUARY 1, 2004 TO DECEMBER 31, 2004 ............... $ 12.89 0.00 1.08 0.00 0.00 JANUARY 1, 2003 TO DECEMBER 31, 2003 ............... $ 10.43 (0.05) 2.51 0.00 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 ............... $ 14.08 (0.02) (3.62) (0.01) 0.00 VT LARGE COMPANY GROWTH FUND - ------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ............... $ 9.37 (0.02) 0.24 0.00 0.00 JANUARY 1, 2005 TO DECEMBER 31, 2005 ............... $ 8.88 (0.02) 0.53 (0.02) 0.00 JANUARY 1, 2004 TO DECEMBER 31, 2004 ............... $ 8.60 0.02 0.26 0.00 0.00 JANUARY 1, 2003 TO DECEMBER 31, 2003 ............... $ 6.81 (0.03) 1.82 0.00 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 ............... $ 9.46 (0.05) (2.60) 0.00 0.00 VT MONEY MARKET FUND - ------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ............... $ 1.00 0.04 0.00 (0.04) 0.00 JANUARY 1, 2005 TO DECEMBER 31, 2005 ............... $ 1.00 0.03 0.00 (0.03) 0.00 JANUARY 1, 2004 TO DECEMBER 31, 2004 ............... $ 1.00 0.01 0.00 (0.01) 0.00 JANUARY 1, 2003 TO DECEMBER 31, 2003 ............... $ 1.00 0.01 0.00 (0.01) 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 ............... $ 1.00 0.01 0.00 (0.01) 0.00 VT OPPORTUNITY FUND - ------------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ............... $ 24.22 0.13 2.43 0.00 (2.76) JANUARY 1, 2005 TO DECEMBER 31, 2005 ............... $ 22.45 (0.02) 1.79 0.00 0.00 JANUARY 1, 2004 TO DECEMBER 31, 2004 ............... $ 18.99 (0.05) 3.51 0.00 0.00 JANUARY 1, 2003 TO DECEMBER 31, 2003 ............... $ 13.87 (0.02) 5.15 (0.01) 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 ............... $ 19.45 0.01 (5.21) (0.07) (0.31) THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 124 FINANCIAL HIGHLIGHTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- ENDING RATIO TO AVERAGE NET ASSETS (ANNUALIZED)(1) NET ASSET -------------------------------------------------------- RETURN VALUE PER NET INVESTMENT GROSS EXPENSES NET OF CAPITAL SHARE INCOME (LOSS) EXPENSES(2) WAIVED(2) EXPENSES(2) - ------------------------------------------------------------------------------------------------------------------------------------ VT ASSET ALLOCATION FUND - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 0.00 $ 14.13 2.27% 1.02% (0.02)% 1.00% JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 0.00 $ 13.05 2.06% 1.04% (0.04)% 1.00% JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 0.00 $ 12.97 2.08% 1.02% (0.02)% 1.00% JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 0.00 $ 12.51 1.64% 1.02% (0.02)% 1.00% JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... 0.00 $ 10.41 1.90% 1.02% (0.02)% 1.00% VT C&B LARGE CAP VALUE FUND - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 0.00 $ 11.24 1.44% 1.17% (0.17)% 1.00% JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 0.00 $ 9.34 0.76% 1.17% (0.17)% 1.00% JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 0.00 $ 9.13 1.58% 1.19% (0.19)% 1.00% JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 0.00 $ 8.34 1.62% 1.20% (0.20)% 1.00% JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... 0.00 $ 6.75 1.19% 1.27% (0.27)% 1.00% VT DISCOVERY FUND(SM) - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 0.00 $ 16.44 (0.76)% 1.21% (0.06)% 1.15% JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 0.00 $ 14.34 (0.76)% 1.26% (0.08)% 1.18% JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 0.00 $ 14.65 (0.92)% 1.23% (0.04)% 1.19% JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 0.00 $ 12.66 (0.36)% 1.24% (0.11)% 1.13% JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... 0.00 $ 9.08 (0.12)% 1.25% (0.06)% 1.19% VT EQUITY INCOME FUND - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 0.00 $ 19.75 1.53% 1.04% (0.04)% 1.00% JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 0.00 $ 16.96 1.43% 1.05% (0.05)% 1.00% JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 0.00 $ 16.33 1.59% 1.03% (0.03)% 1.00% JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 0.00 $ 14.93 1.59% 1.06% (0.06)% 1.00% JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... 0.00 $ 12.32 1.46% 1.09% (0.09)% 1.00% VT INTERNATIONAL CORE FUND - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 0.00 $ 9.87 1.85% 1.43% (0.43)% 1.00% JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 0.00 $ 8.66 1.61% 1.41% (0.41)% 1.00% JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 0.00 $ 8.27 0.87% 1.42% (0.42)% 1.00% JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 0.00 $ 7.56 0.69% 1.59% (0.59)% 1.00% JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... 0.00 $ 5.77 0.71% 3.26% (2.26)% 1.00% VT LARGE COMPANY CORE FUND - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 0.00 $ 15.59 0.64% 1.19% (0.19)% 1.00% JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 0.00 $ 13.58 0.49% 1.13% (0.13)% 1.00% JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 0.00 $ 13.97 (0.03)% 1.13% (0.13)% 1.00% JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 0.00 $ 12.89 (0.44)% 1.13% (0.13)% 1.00% JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... 0.00 $ 10.43 (0.14)% 1.14% (0.14)% 1.00% VT LARGE COMPANY GROWTH FUND - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 0.00 $ 9.59 (0.16)% 1.04% (0.04)% 1.00% JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 0.00 $ 9.37 (0.21)% 1.05% (0.05)% 1.00% JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 0.00 $ 8.88 0.18% 1.05% (0.05)% 1.00% JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 0.00 $ 8.60 (0.46)% 1.06% (0.06)% 1.00% JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... 0.00 $ 6.81 (0.56)% 1.08% (0.08)% 1.00% VT MONEY MARKET FUND - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 0.00 $ 1.00 4.33% 0.82% (0.07)% 0.75% JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 0.00 $ 1.00 2.53% 0.82% (0.07)% 0.75% JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 0.00 $ 1.00 0.68% 0.87% (0.12)% 0.75% JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 0.00 $ 1.00 0.51% 0.89% (0.14)% 0.75% JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... 0.00 $ 1.00 1.24% 0.73% (0.01)% 0.72% VT OPPORTUNITY FUND - ------------------------------------------------------------------------------------------------------------------------------------ JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 0.00 $ 24.02 0.48% 1.18% (0.11)% 1.07% JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 0.00 $ 24.22 (0.06)% 1.32% (0.21)% 1.11% JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 0.00 $ 22.45 (0.22)% 1.41% (0.35)% 1.06% JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 0.00 $ 18.99 (0.13)% 1.40% (0.31)% 1.09% JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... 0.00 $ 13.87 0.11% 1.38% (0.29)% 1.09% PORTFOLIO NET ASSETS AT TOTAL TURNOVER END OF PERIOD RETURN(3) RATE (000'S OMITTED) - -------------------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND - -------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 12.14% 12% $ 288,387 JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 4.99% 2% $ 309,673 JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 9.34% 5% $ 326,374 JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 22.09% 7% $ 290,723 JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... (12.85)% 16% $ 212,574 VT C&B LARGE CAP VALUE FUND - -------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 22.12% 30% $ 32,169 JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 3.11% 106% $ 28,664 JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 11.22% 16% $ 30,287 JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 25.57% 20% $ 29,482 JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... (24.09)% 98% $ 25,124 VT DISCOVERY FUND(SM) - -------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 14.64% 114% $ 233,947 JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 8.27% 144% $ 250,275 JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 15.72% 168% $ 93,048 JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 39.43% 293% $ 94,115 JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... (12.02)% 417% $ 84,761 VT EQUITY INCOME FUND - -------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 18.55% 14% $ 116,232 JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 5.38% 23% $ 114,375 JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 11.08% 13% $ 120,138 JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 26.21% 15% $ 103,157 JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... (19.26)% 16% $ 78,400 VT INTERNATIONAL CORE FUND - -------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 20.81% 43% $ 44,317 JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 9.67% 53% $ 39,602 JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 9.63% 115% $ 35,071 JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 31.46% 90% $ 22,033 JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... (22.92)% 54% $ 9,316 VT LARGE COMPANY CORE FUND - -------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 15.57% 19% $ 25,349 JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... (2.24)% 112% $ 28,460 JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 8.38% 45% $ 38,055 JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 23.59% 58% $ 43,384 JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... (25.84)% 120% $ 42,644 VT LARGE COMPANY GROWTH FUND - -------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 2.35% 12% $ 108,621 JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 5.70% 11% $ 116,003 JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 3.26% 15% $ 107,229 JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 26.28% 10% $ 96,802 JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... (28.01)% 18% $ 69,108 VT MONEY MARKET FUND - -------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 4.41% N/A $ 52,499 JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 2.55% N/A $ 55,504 JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 0.70% N/A $ 58,738 JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 0.50% N/A $ 81,583 JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... 1.25% N/A $ 96,274 VT OPPORTUNITY FUND - -------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 ........... 12.22% 41% $ 897,047 JANUARY 1, 2005 TO DECEMBER 31, 2005 ........... 7.88% 41% $ 1,004,763 JANUARY 1, 2004 TO DECEMBER 31, 2004 ........... 18.22% 40% $ 1,019,885 JANUARY 1, 2003 TO DECEMBER 31, 2003 ........... 37.01% 56% $ 1,021,895 JANUARY 1, 2002 TO DECEMBER 31, 2002 ........... (26.82)% 69% $ 861,525 125 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- NET REALIZED BEGINNING NET AND DISTRIBUTIONS DISTRIBUTIONS NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET VALUE PER INCOME GAIN (LOSS) ON INVESTMENT REALIZED SHARE (LOSS) INVESTMENTS INCOME GAINS - ----------------------------------------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND - ----------------------------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 .. $ 8.34 (0.09) 1.94 0.00 (0.23) JANUARY 1, 2005 TO DECEMBER 31, 2005 .. $ 7.85 (0.08) 0.57 0.00 0.00 JANUARY 1, 2004 TO DECEMBER 31, 2004 .. $ 6.90 (0.06) 1.01 0.00 0.00 JANUARY 1, 2003 TO DECEMBER 31, 2003 .. $ 4.85 (0.04) 2.09 0.00 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 .. $ 7.85 (0.04) (2.96) 0.00 0.00 VT SMALL/MID CAP VALUE FUND - ----------------------------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 .. $ 13.66 (0.03) 1.84 0.00 (2.25) JANUARY 1, 2005 TO DECEMBER 31, 2005 .. $ 11.77 (0.06) 2.00 (0.05) 0.00 JANUARY 1, 2004 TO DECEMBER 31, 2004 .. $ 10.08 (0.03) 1.72 0.00 0.00 JANUARY 1, 2003 TO DECEMBER 31, 2003 .. $ 7.29 0.00 2.80 (0.01) 0.00 JANUARY 1, 2002 TO DECEMBER 31, 2002 .. $ 10.19 0.01 (2.36) (0.04) (0.51) VT TOTAL RETURN BOND FUND - ----------------------------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 .. $ 9.86 0.43 (0.05) (0.43) 0.00 JANUARY 1, 2005 TO DECEMBER 31, 2005 .. $ 10.08 0.36 (0.17) (0.37) (0.04) JANUARY 1, 2004 TO DECEMBER 31, 2004 .. $ 10.66 0.34 0.10 (0.34) (0.68) JANUARY 1, 2003 TO DECEMBER 31, 2003 .. $ 10.38 0.45 0.41 (0.45) (0.13) JANUARY 1, 2002 TO DECEMBER 31, 2002 .. $ 10.24 0.61 0.16 (0.61) (0.02) THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 126 FINANCIAL HIGHLIGHTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- ENDING RATIO TO AVERAGE NET ASSETS (ANNUALIZED)(1) NET ASSET ------------------------------------------------------- RETURN VALUE PER NET INVESTMENT GROSS EXPENSES NET OF CAPITAL SHARE INCOME (LOSS) EXPENSES(2) WAIVED(2) EXPENSES(2) - -------------------------------------------------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND - -------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 .. 0.00 $ 9.96 (0.98)% 1.23% (0.03)% 1.20% JANUARY 1, 2005 TO DECEMBER 31, 2005 .. 0.00 $ 8.34 (0.99)% 1.24% (0.04)% 1.20% JANUARY 1, 2004 TO DECEMBER 31, 2004 .. 0.00 $ 7.85 (0.91)% 1.24% (0.04)% 1.20% JANUARY 1, 2003 TO DECEMBER 31, 2003 .. 0.00 $ 6.90 (0.91)% 1.25% (0.05)% 1.20% JANUARY 1, 2002 TO DECEMBER 31, 2002 .. 0.00 $ 4.85 (0.92)% 1.32% (0.12)% 1.20% VT SMALL/MID CAP VALUE FUND - -------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 .. 0.00 $ 13.22 (0.23)% 1.46% (0.32)% 1.14% JANUARY 1, 2005 TO DECEMBER 31, 2005 .. 0.00 $ 13.66 (0.49)% 1.48% (0.33)% 1.15% JANUARY 1, 2004 TO DECEMBER 31, 2004 .. 0.00 $ 11.77 (0.29)% 1.49% (0.37)% 1.12% JANUARY 1, 2003 TO DECEMBER 31, 2003 .. 0.00 $ 10.08 (0.07)% 1.61% (0.48)% 1.13% JANUARY 1, 2002 TO DECEMBER 31, 2002 .. 0.00 $ 7.29 0.08% 1.42% (0.24)% 1.18% VT TOTAL RETURN BOND FUND - -------------------------------------------------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 .. 0.00 $ 9.81 4.36% 0.95% (0.05)% 0.90% JANUARY 1, 2005 TO DECEMBER 31, 2005 .. 0.00 $ 9.86 3.58% 0.96% (0.06)% 0.90% JANUARY 1, 2004 TO DECEMBER 31, 2004 .. 0.00 $ 10.08 3.34% 0.96% (0.06)% 0.90% JANUARY 1, 2003 TO DECEMBER 31, 2003 .. 0.00 $ 10.66 4.17% 0.97% (0.07)% 0.90% JANUARY 1, 2002 TO DECEMBER 31, 2002 .. 0.00 $ 10.38 5.97% 1.02% (0.12)% 0.90% PORTFOLIO NET ASSETS AT TOTAL TURNOVER END OF PERIOD RETURN(3) RATE (000'S OMITTED) - ----------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND - ----------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 .. 22.75% 135% $ 190,516 JANUARY 1, 2005 TO DECEMBER 31, 2005 .. 6.24% 128% $ 167,033 JANUARY 1, 2004 TO DECEMBER 31, 2004 .. 13.77% 175% $ 180,230 JANUARY 1, 2003 TO DECEMBER 31, 2003 .. 42.27% 191% $ 138,151 JANUARY 1, 2002 TO DECEMBER 31, 2002 .. (38.22)% 243% $ 68,349 VT SMALL/MID CAP VALUE FUND - ----------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 .. 15.29% 81% $ 23,462 JANUARY 1, 2005 TO DECEMBER 31, 2005 .. 16.50% 112% $ 23,889 JANUARY 1, 2004 TO DECEMBER 31, 2004 .. 16.77% 72% $ 25,989 JANUARY 1, 2003 TO DECEMBER 31, 2003 .. 38.39% 71% $ 27,713 JANUARY 1, 2002 TO DECEMBER 31, 2002 .. (23.16)% 70% $ 24,045 VT TOTAL RETURN BOND FUND - ----------------------------------------------------------------------------------- JANUARY 1, 2006 TO DECEMBER 31, 2006 .. 3.92% 662%(4) $ 116,449 JANUARY 1, 2005 TO DECEMBER 31, 2005 .. 1.90% 714% $ 85,445 JANUARY 1, 2004 TO DECEMBER 31, 2004 .. 4.39% 773% $ 76,683 JANUARY 1, 2003 TO DECEMBER 31, 2003 .. 8.40% 619% $ 70,988 JANUARY 1, 2002 TO DECEMBER 31, 2002 .. 7.75% 82% $ 68,499 - ----------------------------------------------------------------------------------- 127 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS NOTES TO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- NOTES TO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (1) During each period, various fees and expenses were waived and reimbursed as indicated. The ratio of Gross Expenses to Average Net Assets reflects the expense ratio in the absence of any waivers and reimbursements (Note 3). (2) These ratios do not include expenses from the Underlying Funds. (3) 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 less than one year are not annualized. (4) Portfolio turnover ratio excluding TBAs is 337%. 128 NOTES TO FINANCIAL STATEMENTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- 1. ORGANIZATION - -------------------------------------------------------------------------------- Wells Fargo Variable Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. As of December 31, 2006, the Trust consists of 12 separate funds (each, a "Fund", collectively, the "Funds"). These financial statements present the VT Asset Allocation Fund, VT C&B Large Cap Value Fund (formerly named the Equity Value Fund), VT Discovery Fund, VT Equity Income Fund, VT International Core Fund (formerly named the International Equity Fund), VT Large Company Core Fund (formerly named the Growth Fund), VT Large Company Growth Fund, VT Money Market Fund, VT Opportunity Fund, VT Small Cap Growth Fund, VT Small/Mid Cap Value Fund (formerly named the Multi Cap Value Fund), and VT Total Return Bond Fund. The Funds are available exclusively as pooled funding vehicles for certain participating life insurance companies offering variable annuity contracts and variable life insurance policies. Each fund is a diversified series of the Trust. In August and September 2004, the Board of Trustees of the Trust and the Boards of Directors of the Strong Funds ("Strong Funds") approved an Agreement and Plan of Reorganization providing for the reorganization of certain Strong Funds into certain Funds of the Trust. Effective at the close of business on April 8, 2005, the following Acquiring Fund ("Acquiring Fund") acquired substantially all of the net assets of the following Target Funds ("Target Funds") through a tax-free exchange under section 368 of the Internal Revenue Code. The following is a summary of shares outstanding and net assets immediately before and after the reorganization: Before Reorganization After Reorganization ---------------------------------- -------------------- Target Fund Target Fund* Acquiring Fund** WELLS FARGO STRONG MID CAP STRONG DISCOVERY ADVANTAGE VT Fund GROWTH II FUND II FUND DISCOVERY FUND - ------------------------------------------------------------------------------------------------------ Shares: - ------------------------------------------------------------------------------------------------------ INVESTOR CLASS 10,722,956 6,693,290 20,101,904 - ------------------------------------------------------------------------------------------------------ Net Assets: - ------------------------------------------------------------------------------------------------------ INVESTOR CLASS $ 165,962,549 $82,844,918 $ 248,807,467 - ------------------------------------------------------------------------------------------------------ UNREALIZED APPRECIATION (DEPRECIATION) $ 3,934,203 $10,571,216 $ 14,505,419 - ------------------------------------------------------------------------------------------------------ ACCUMULATED NET REALIZED LOSSES $(256,263,207) $ (112,951) $(256,376,158) * Designates the accounting survivor. ** The Acquiring Fund does not have an Investor Class. The Target Fund Investor Class shares were acquired by an unnamed single class share of the Acquiring Fund. Effective at the close of business on April 8, 2005, the following Acquiring Funds ("Acquiring Funds") acquired all of the net assets of the following Target Funds ("Target Funds") through a tax-free exchange under section 368 of the Internal Revenue Code. Acquiring Funds Target Funds - ----------------------------------------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND STRONG OPPORTUNITY II FUND ADVISOR CLASS AND INVESTOR CLASS - ----------------------------------------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND STRONG MULTI-CAP VALUE II FUND INVESTOR CLASS 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. ("NASDAQ") are valued at the NASDAQ Official Closing Price ("NOCP"), and if no NOCP is available, then at the last reported sales price. If no sales price is shown on 129 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- the NASDAQ, the bid price will be used. In the absence of any sale of securities listed on the NASDAQ, and in the case of other securities, including U.S. Government obligations, but excluding debt securities maturing in 60 days or less, the price will be deemed "stale" and the valuations will be determined in accordance with the Funds' Fair Valuation Procedures. Certain fixed income securities with maturities exceeding 60 days are valued by using a pricing service approved by the Trust's Board of Trustees. The service uses market prices as quoted by an independent pricing service or by dealers in these securities when, in the service's judgment, these prices are readily available and are representative of the securities' market values. For some securities, such prices are not readily available. These securities will generally be fair valued using methods which may include consideration of yields or prices of securities of comparable quality, coupon rate, maturity and type of issue, indications as to values from dealers in securities, trading characteristics, and general market conditions. Securities denominated in foreign currencies are translated into U.S. dollars using the closing rates of exchange in effect on the day of valuation. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore may not fully reflect trading or events that occur after the close of the principal exchange in which the foreign investments are traded but before the close of the New York Stock Exchange. If such trading or events are expected to materially affect the value of the investments, then those investments are fair valued following procedures approved by the Board of Trustees. These procedures take into account multiple factors including movements in U.S. securities markets after foreign exchanges close. Depending on market activity, such fair valuations may be frequent. In light of the judgment involved in fair value decisions, there can be no assurance that a fair value assigned to a particular security is accurate. Such fair value pricing may result in NAVs that are higher or lower than NAVs based on the closing price or latest quoted bid price. Debt securities maturing in 60 days or less generally are valued at amortized cost. The amortized cost method involves valuing a security at its cost, plus accretion of discount or minus amortization of premium over the period until maturity, which approximates market value. The Money Market Fund invests only in securities with remaining maturities not exceeding 397 days (13 months). Certain floating- and variable-rate instruments in the portfolio may have maturities in excess of 397 days, but carry a demand feature that permits the holder to tender the instruments back to the issuer at par value prior to maturity. The Money Market Fund uses the amortized cost method to value portfolio securities. The amortized cost method involves valuing a security at its cost, plus accretion of discount or minus amortization of premium over the period until maturity, which approximates market value. The Money Market Fund seeks to maintain a constant net asset value of $1.00 per share, although there is no assurance that it will be able to do so. Investments which are not valued using any of the methods discussed above are valued at their fair value as determined by procedures approved by the Board of Trustees. SECURITY TRANSACTIONS AND INCOME RECOGNITION Securities transactions are recorded on a trade date basis. Realized gains or losses are reported on the basis of identified cost of securities delivered. Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. Debt obligations may be placed on non-accrual status and related investment income may be reduced by ceasing current accruals and writing off 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. Dividend income is recognized on the ex-dividend date, except for certain dividends from foreign securities, which are recorded as soon as the Fund is informed of the ex-dividend date. Dividend income from foreign securities is recorded net of foreign taxes withheld where recovery of such taxes is not assured. FOREIGN CURRENCY TRANSLATION The accounting records are maintained in U.S. dollars. Assets, including investment securities, and liabilities denominated in foreign currency are translated into U.S. dollars at the prevailing rates of exchange at the date of valuation. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and liabilities other than investments in securities, at fiscal period-end, resulting from changes in exchange rates. The changes in net assets arising from changes in exchange rates and the changes in net assets resulting from changes in market prices of securities at fiscal period-end are not separately presented. Such changes are recorded with net realized and unrealized gain from investments. Gains and losses from certain foreign currency transactions are treated as ordinary income for U.S. federal income tax purposes. DISTRIBUTIONS TO SHAREHOLDERS Net investment income, if any, for the VT Discovery, VT International Core, VT Large Company Core, VT Large Company Growth, VT Opportunity, VT Small Cap Growth and VT Small/Mid Cap Value Funds is declared and distributed to shareholders annually. Net investment income, if any, for the VT Asset Allocation, VT C&B Large Value and VT Equity Income 130 NOTES TO FINANCIAL STATEMENTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- Funds is declared and distributed quarterly. Net investment income, if any, for the VT Money Market and VT Total Return Bond Funds is declared daily and distributed monthly. Distributions to shareholders from net realized capital gains, if any, are declared and distributed at least annually. Distributions are based on amounts calculated in accordance with the applicable federal income tax regulations, which may differ from GAAP. The timing and character of distributions made during the period from net investment income or net realized gains may also differ from their ultimate characterization for federal income tax purposes. To the extent that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment. Temporary differences do not require reclassifications. At December 31, 2006, as result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statements of Assets and Liabilities: Undistributed Net Undistributed Net Fund Investment Income Realized Gain/Loss Paid-in-Capital - --------------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND $ (16,886) $ 16,886 $ 0 - --------------------------------------------------------------------------------------- VT C&B LARGE CAP VALUE FUND 8,780 0 (8,780) - --------------------------------------------------------------------------------------- VT DISCOVERY FUND 1,883,491 0 (1,883,491) - --------------------------------------------------------------------------------------- VT EQUITY INCOME FUND 8,747 (8,747) 0 - --------------------------------------------------------------------------------------- VT INTERNATIONAL CORE FUND (82,416) 82,416 0 - --------------------------------------------------------------------------------------- VT LARGE COMPANY CORE FUND 1,881 0 (1,881) - --------------------------------------------------------------------------------------- VT LARGE COMPANY GROWTH FUND 180,924 0 (180,924) - --------------------------------------------------------------------------------------- VT MONEY MARKET FUND 1,055 (1,055) 0 - --------------------------------------------------------------------------------------- VT OPPORTUNITY FUND (463,756) 463,756 0 - --------------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND 1,764,800 (1,764,800) 0 - --------------------------------------------------------------------------------------- VT SMALL/MID CAP VALUE FUND 138,563 (138,563) 0 - --------------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND 34,759 (34,759) 0 FEDERAL INCOME TAXES Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund of the Trust to continue to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code (the "Code"), and to make distributions of substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required at December 31, 2006. At December 31, 2006, estimated net capital loss carryforwards, which are available to offset future net realized capital gains, were: Fund Year Expires Capital Loss Carryforwards - -------------------------------------------------------------------------------- VT C&B LARGE CAP VALUE FUND 2010 $ 414,315 2011 1,929,288 2012 205,837 - -------------------------------------------------------------------------------- VT DISCOVERY FUND 2008 105,148,501 2009 94,527,114 - -------------------------------------------------------------------------------- VT LARGE COMPANY CORE FUND 2010 13,921,527 2011 1,781,980 - -------------------------------------------------------------------------------- VT LARGE COMPANY GROWTH FUND 2009 6,092,101 2010 14,881,364 2011 2,858,910 2012 1,003,450 2013 2,022,267 2014 1,615,063 - -------------------------------------------------------------------------------- VT MONEY MARKET FUND 2014 61 - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND 2013 523,334 2014 1,148,359 131 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- At December 31, 2006, 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 Currency Loss - -------------------------------------------------------------------------------- VT INTERNATIONAL CORE FUND $ 6,542 - -------------------------------------------------------------------------------- FORWARD FOREIGN CURRENCY CONTRACTS The Fund(s) may enter into forward foreign currency contracts to protect against a possible loss resulting from an adverse change in the relationship between foreign currencies and the U.S. dollar, or between foreign currencies. A forward contract is an agreement between two counterparties for future delivery or receipt of currency at a specified price. Risks arise from the possible inability of counterparties to meet the terms of their contracts and from movements in currency values. Realized gains or losses are recognized when the transaction is completed. Contracts which have been offset but have not reached their settlement date are included in unrealized gains and losses. At December 31, 2006, the Fund(s) had no open forward foreign currency contracts. FUTURES CONTRACTS The Fund(s) may purchase futures contracts to gain exposure to market changes, which may be more efficient or cost effective than actually buying the securities. A futures contract is an agreement between parties to buy or sell a security at a set price on a future date. Upon entering into such a contract, a Fund is required to pledge to the broker an amount of cash, U.S. Government obligations or other high-quality debt securities equal to the minimum "initial margin" requirements of the exchange on which the futures contract is traded. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as "variation margin" and are recorded by the Fund as unrealized gains or losses. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Pursuant to regulations and/or published positions of the Securities and Exchange Commission (the "SEC") for long futures positions, the Fund is required to segregate highly liquid securities as permitted by the SEC in connection with futures transactions in an amount generally equal to the entire value of the underlying contracts. Risks of entering into futures contracts include the possibility that there may be an illiquid market and that a change in the value of the contract may not correlate with changes in the value of the underlying securities. At December 31, 2006, VT Asset Allocation Fund held futures contracts: Net Unrealized Notional Appreciation Fund Contracts Type Expiration Date Contract Amount (Depreciation) - ----------------------------------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND 188 Long S&P 500 Future March 2007 $66,869,250 $ 239,894 35 Long U.S. Long Bond March 2007 3,967,935 (67,623) 571 Short U.S. Long Bond March 2007 64,706,054 1,075,241 - ----------------------------------------------------------------------------------------------------------- TBA SALE COMMITMENTS The fund may enter into TBA sale commitments to hedge its portfolio positions or to sell mortgage-backed securities it owns under delayed delivery arrangements. Proceeds of TBA sale commitments are not received until the contractual settlement date. During the time a TBA sale commitment is outstanding, equivalent deliverable securities, or an offsetting TBA purchase commitment deliverable on or before the sale commitment date, are held as "cover" for the transaction. Unsettled TBA sale commitments are valued at the current market value of the underlying securities, generally according to the procedures described under "Security valuation" above. The contract is "marked-to-market" daily and the change in market value is recorded by the fund as an unrealized gain or loss. If the TBA sale commitment is closed through the acquisition of an offsetting purchase commitment, the fund realizes a gain or loss. If the fund delivers securities under the commitment, the fund realizes a gain or a loss from the sale of the securities based upon the unit price established at the date the commitment was entered into. TBA sale commitments outstanding at year ended December 31, 2006, are listed after the Fund's Portfolio of Investments. MORTGAGE DOLLAR ROLL TRANSACTIONS The Funds may engage in mortgage dollar roll transactions with respect to mortgage-backed securities issued by GNMA, FNMA and FHLMC. In a mortgage dollar roll transaction, a Fund sells a mortgage-backed security to a financial institution, such as a bank or broker-dealer and simultaneously agrees to repurchase a substantially similar security from the institution at a later date at an agreed upon price. The mortgage-backed securities that are repurchased will bear the same interest rate as those sold, but generally will be collateralized by different pools of mortgages with different pre-payment histories. During the roll period, a Fund forgoes principal and interest paid on the securities. A Fund is compensated by the difference between the current sales price and the forward price for the future purchase as well as by the earnings on the cash proceeds of the initial sale. Mortgage dollar rolls may be renewed without physical delivery of the securities subject to the contract. The Funds account for dollar roll transactions as purchases and sales. REPURCHASE AGREEMENTS The Fund(s) may invest in repurchase agreements and may participate in pooled repurchase agreement transactions with other funds advised by Wells Fargo Funds Management, LLC. The repurchase agreements must be fully collateralized based on values that are marked to market daily. The collateral may be held by an agent bank under a tri-party agreement. It is the custodian's responsibility to value collateral daily and to take action to obtain additional collateral as necessary to maintain market value 132 NOTES TO FINANCIAL STATEMENTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- equal to or greater than the resale price. The repurchase agreements are collateralized by instruments such as U.S. Treasury, federal agency, or high-grade corporate obligations. There could be potential loss to a Fund in the event that such Fund is delayed or prevented from exercising its rights to dispose of the collateral, including the risk of a possible decline in the value of the underlying obligations during the period in which a Fund seeks to assert its rights. SECURITY LOANS The Fund(s) may loan securities in return for securities, irrevocable letters of credit or cash collateral, which is invested in various short-term fixed income securities. A Fund may receive compensation for lending securities in the form of fees or by retaining a portion of interest on the investment securities or cash received as collateral. A Fund also continues to receive interest or dividends on the securities loaned. Security loans are secured at all times by collateral. The collateral is equal to at least 102% of the market value of the securities loaned plus accrued interest when the transaction is entered into. The collateral supporting loans of domestic and foreign equity securities and corporate bonds is remarked daily while collateral supporting loans of U.S. government securities is remarked back to 102% only if the given collateral falls below 100% of the market value of the securities loaned plus any accrued interest. Gain or loss in the market price of the securities loaned that may occur during the term of the loan are reflected in the value of the Fund. The risks from securities lending are that the borrower may not provide additional collateral when required or return the securities when due or when called for by the Fund. Wells Fargo Bank, N.A., the Funds' custodian, acts as the securities lending agent for the Funds and receives for its services 30% of the revenues earned on the securities lending activities and incurs all expenses. The value of the securities on loan and the value of the related collateral at December 31, 2006 are shown on the Statements of Assets and Liabilities. SWAP CONTRACTS Certain Funds may enter into customized equity basket swaps ("Equity Swaps") to manage their exposure to the equity markets. In these transactions, the Funds enter into an agreement with a counterparty to receive/pay the return/loss on a customized basket of equity securities (the "Notional"). In exchange, the Fund pays/receives interest plus any losses/less any gains on the notional amount. Equity swap contracts are marked to market daily based upon quotations from market makers and the change, if any, is recorded as unrealized gain or loss. Payments received or made are recorded as realized gains or loss. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or in the price of the underlying basket of securities, the possibility that there is no liquid market for these agreements or that the counterparty may default on its obligation to perform. Risk of loss may exceed amounts recognized on the Statements of Assets and Liabilities. Equity swap contracts outstanding at year ended December 31, 2006, are listed below: Swap Notional Interest Rate/ Interest Rate/ Maturity Net Unrealized Fund Counter Party Principal Index Received Index Paid Date Gain/(Loss) - -------------------------------------------------------------------------------------------------------------------- VT OPPORTUNITY Lehman Brothers $17,464,791 Market Value Notional Amount 04/16/2007 $ 491,614 FUND Finance Appreciation on x (3 Months USD Customized Libor plus 30 bps) Stock Index* plus Market Value Depreciation on Customized Stock Index Lehman Brothers $10,645,506 Market Value Notional Amount 10/29/2007 $ 408,787 Finance Appreciation on x (3 Months USD Customized Stock Libor plus 30 bps) Index** plus Market Value Depreciation on Customized Stock Index - -------------------------------------------------------------------------------------------------------------------- * Customized Stock Index consists of the following basket of common stocks valued as of November 27, 2006: AFLAC Incorporated, Amgen Incorporated, Carnival Corporation, Viacom, Kellogg Company, Lowe's Companies Incorporated, Time Warner Incorporated, UnitedHealth Group Incorporated, Yahoo! Incorporated, PFizer Incorporated and Wyeth. ** Customized Stock Index consists of the following basket of common stocks valued as of October 27, 2006: Alcan Incorporated, Alcoa Incorporated, Phelps Dodge Corporation, Companhia Vale do Rio Doce (CVRD) and BHP Billiton Limited. The Funds may enter into various hedging transactions, such as interest rate swaps to preserve a return or spread on a particular investment or portion of its portfolio, to create synthetic adjustable-rate mortgage securities or for other purposes. Swaps involve the exchange of commitments to make or receive payments, e.g., an exchange of floating-rate payments for fixed rate payments. The Funds record as an increase or decrease to realized gain/loss, the amount due or owed by the Funds at termination or settlement. Swaps are valued based on prices quoted by independent brokers. These valuations represent the net present value of all future cash settlement amounts based on implied forward interest rates or index values. 133 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- As of December 31, 2006, the VT Total Return Bond Fund had open interest rate swap contract as follows: Swap Notional Interest Rate/ Interest Rate/ Maturity Net Unrealized Fund Counter Party Principal Index Received Index Paid Date Gain/(Loss) - ----------------------------------------------------------------------------------------------------------- VT TOTAL RETURN Merrill Lynch $ 335,000 USD LIBOR BBA 5.43% 08/07/2011 $9,136 BOND FUND - ----------------------------------------------------------------------------------------------------------- The Funds may enter into various hedging transactions, such as credit default swap agreements to preserve a return or spread on a particular investment or portion of its portfolio, to create synthetic adjustable-rate mortgage securities or for other purposes. Swaps involve the exchange of commitments to make or receive payments. The Funds record as an increase or decrease to unrealized gain/loss, the amount due or owed by the Funds at termination or settlement. Swaps are valued based on prices quoted by independent brokers. Credit default swaps involve the periodic payment by the Fund or counterparty of interest based on a specified rate multiplied by a notional amount assigned to an underlying debt instrument or group of debt instruments in exchange for the assumption of credit risk on the same instruments. In the event of a credit event, usually in the form of a credit rating downgrade, the party receiving periodic payments (i.e. floating rate payer) must pay the other party (i.e. fixed rate payer) an amount equal to the outstanding principal of the downgraded debt instrument. As of December 31, 2006, the VT Total Return Bond Fund had open credit default swap contract as follows: Swap Notional Annual Maturity Net Unrealized Fund Counter Party Principal Premium Paid Date Gain/(Loss) - ----------------------------------------------------------------------------------------------- VT TOTAL RETURN Merrill Lynch $ 335,000 0.16% 09/20/2011 $636 BOND FUND International Credit Protection* - ----------------------------------------------------------------------------------------------- * Protection against credit rating decline of General Electric Capital Corporation bond, 06/15/2012 maturity, 6.00% coupon rate. 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. WRITTEN OPTIONS An option is a right to buy or sell a particular security at a specified price within a limited period of time. The writer of the option, in return for a premium received from the seller, has the obligation to sell (in the case of a call option) or buy (in the case of a put option) the underlying security of the contract. The premium received in cash from writing options is recorded as an asset with an equal liability that is adjusted to reflect the option's value. The premium received from writing options which expire is recorded as realized gains. The premium received from writing options which are exercised or closed is offset against the proceeds or amount paid on the closing transaction to determine the realized gain or loss. If a put option is exercised, the premium reduces the cost basis of the security or currency purchased. Options are valued based on their quoted daily settlement prices. Risks could arise from entering into written options transactions from the potential inability of counterparties to meet the terms of their contracts, the potential inability to enter into a closing transaction because of an illiquid secondary market, and from unexpected movements in interest or exchange rates or securities values. Written options transactions during the year ended December 31, 2006, were as follows: VT OPPORTUNITY FUND ----------------------- Premiums Call Options Written Contracts Received - -------------------------------------------------------------------- OPTIONS AT BEGINNING OF PERIOD (4,755) $ (847,957) - -------------------------------------------------------------------- OPTIONS WRITTEN (44,157) (2,572,994) - -------------------------------------------------------------------- OPTIONS TERMINATED IN CLOSING TRANSACTIONS 27,666 1,989,988 - -------------------------------------------------------------------- OPTIONS EXPIRED 5,958 358,332 - -------------------------------------------------------------------- OPTIONS EXERCISED 0 0 - -------------------------------------------------------------------- OPTIONS AT END OF PERIOD (15,288) (1,072,631) - -------------------------------------------------------------------- 134 NOTES TO FINANCIAL STATEMENTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- VT Small/Mid Cap Value Fund --------------------------- Premiums Call Options Written Contracts Received - --------------------------------------------------------------------------- OPTIONS AT BEGINNING OF PERIOD (205) $ (37,774) - --------------------------------------------------------------------------- OPTIONS WRITTEN (365) (102,866) - --------------------------------------------------------------------------- OPTIONS TERMINATED IN CLOSING TRANSACTIONS 560 137,320 - --------------------------------------------------------------------------- OPTIONS EXPIRED 10 3,320 - --------------------------------------------------------------------------- OPTIONS EXERCISED 0 0 - --------------------------------------------------------------------------- OPTIONS AT END OF PERIOD 0 0 - --------------------------------------------------------------------------- 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 subadviser, 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 subadvisers to provide daily portfolio management. The fees related to subadvisory 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 subadviser(s) are entitled to be paid a monthly fee at the following annual rates: Advisory Fee Subadvisory Fee** Average Daily (% of Average Average Daily (% of Average Fund Net Assets Daily Net Assets) Subadviser Net Assets Daily Net Assets) - ---------------------------------------------------------------------------------------------------------------------------------- VT ASSET First $500 million 0.550 Wells First $100 million 0.150 ALLOCATION FUND Next $500 million 0.500 Capital Next $100 million 0.125 Next $2 billion 0.450 Management Over $200 million 0.100 Next $2 billion 0.425 Incorporated Over $5 billion 0.400 - ---------------------------------------------------------------------------------------------------------------------------------- VT C&B LARGE First $500 million 0.550 Cooke & First $250 million 0.450 CAP VALUE FUND Next $500 million 0.500 Bieler, Next $250 million 0.400 Next $2 billion 0.450 L.P. Next $250 million 0.350 Next $2 billion 0.425 Over $750 million 0.300 Over $5 billion 0.400 - ---------------------------------------------------------------------------------------------------------------------------------- VT DISCOVERY FUND First $500 million 0.750 Wells First $100 million 0.450 Next $500 million 0.700 Capital Next $100 million 0.400 Next $2 billion 0.650 Management Over $200 million 0.350 Next $2 billion 0.625 Incorporated Over $5 billion 0.600 - ---------------------------------------------------------------------------------------------------------------------------------- VT EQUITY First $500 million 0.550 Wells First $100 million 0.350 INCOME FUND Next $500 million 0.500 Capital Next $100 million 0.300 Next $2 billion 0.450 Management Next $300 million 0.200 Next $2 billion 0.425 Incorporated Over $500 million 0.150 Over $5 billion 0.400 - ---------------------------------------------------------------------------------------------------------------------------------- VT INTERNATIONAL First $500 million 0.750 New Star First $50 million 0.350 CORE FUND Next $500 million 0.700 Institutional Next $500 million 0.290 Next $2 billion 0.650 Managers Over $550 million 0.200 Next $2 billion 0.625 Limited Over $5 billion 0.600 - ---------------------------------------------------------------------------------------------------------------------------------- 135 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- Advisory Fee Subadvisory Fee** Average Daily (% of Average Average Daily (% of Average Fund Net Assets Daily Net Assets) Subadviser Net Assets Daily Net Assets) - ---------------------------------------------------------------------------------------------------------------------------------- VT LARGE COMPANY First $500 million 0.550 Matrix First $50 million 0.200 CORE FUND Next $500 million 0.500 Asset Over $50 million 0.160 Next $2 billion 0.450 Advisors Next $2 billion 0.425 Incorporated Over $5 billion 0.400 - ---------------------------------------------------------------------------------------------------------------------------------- VT LARGE COMPANY First $500 million 0.550 Peregrine First $25 million 0.560 GROWTH FUND* Next $500 million 0.500 Capital Next $25 million 0.450 Next $2 billion 0.450 Management Next $225 million 0.375 Next $2 billion 0.425 Incorporated Over $275 million 0.225 Over $5 billion 0.400 - ---------------------------------------------------------------------------------------------------------------------------------- VT MONEY First $500 million 0.300 Wells First $1 billion 0.050 MARKET FUND Next $500 million 0.300 Capital Next $2 billion 0.030 Next $2 billion 0.275 Management Next $3 billion 0.020 Next $2 billion 0.275 Incorporated Over $6 billion 0.010 Over $5 billion 0.250 - ---------------------------------------------------------------------------------------------------------------------------------- VT OPPORTUNITY First $500 million 0.750 Wells First $100 million 0.450 FUND Next $500 million 0.700 Capital Next $100 million 0.400 Next $2 billion 0.650 Management Over $200 million 0.300 Next $2 billion 0.625 Incorporated Over $5 billion 0.600 - ---------------------------------------------------------------------------------------------------------------------------------- VT SMALL CAP First $500 million 0.750 Wells First $100 million 0.550 GROWTH FUND Next $500 million 0.700 Capital Next $100 million 0.500 Next $2 billion 0.650 Management Over $200 million 0.400 Next $2 billion 0.625 Incorporated Over $5 billion 0.600 - ---------------------------------------------------------------------------------------------------------------------------------- VT SMALL/MID CAP First $500 million 0.750 Wells First $100 million 0.450 VALUE FUND Next $500 million 0.700 Capital Next $100 million 0.400 Next $2 billion 0.650 Management Over $200 million 0.350 Next $2 billion 0.625 Incorporated Over $5 billion 0.600 - ---------------------------------------------------------------------------------------------------------------------------------- VT TOTAL RETURN First $500 million 0.450 Wells First $100 million 0.200 BOND FUND Next $500 million 0.400 Capital Next $200 million 0.175 Next $2 billion 0.350 Management Next $200 million 0.150 Next $2 billion 0.325 Incorporated Over $500 million 0.100 Over $5 billion 0.300 - ---------------------------------------------------------------------------------------------------------------------------------- * Prior to September 1, 2006, the investment subadviser was entitled to be paid a monthly fee at the following rates: First 25 million 0.750%, next 25 million 0.600%, next 225 million 0.500%, over 275 million 0.300%. ** The Subadvisory fees shown for Wells Capital Management are effective January 1, 2006. Prior to January 1, 2006, the investment subadviser was entitled to be paid a monthly fee at the following rates: Subadvisory Fee Average Daily (% of Average Fund Subadviser Net Assets Daily Net Assets) - ---------------------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND Wells Capital First $1 billion 0.150 Management Incorporated Over $1 billion 0.100 - ---------------------------------------------------------------------------------------------- VT DISCOVERY FUND Wells Capital First $200 million 0.350 Management Incorporated Over $200 million 0.300 136 NOTES TO FINANCIAL STATEMENTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- Subadvisory Fee Average Daily (% of Average Fund Subadviser Net Assets Daily Net Assets) - ---------------------------------------------------------------------------------------------- VT EQUITY INCOME FUND Wells Capital First $200 million 0.250 Management Incorporated Next $200 million 0.200 Over $400 million 0.150 - ---------------------------------------------------------------------------------------------- VT MONEY MARKET FUND Wells Capital First $1 billion 0.050 Management Incorporated Over $1 billion 0.040 - ---------------------------------------------------------------------------------------------- VT OPPORTUNITY FUND Wells Capital First $200 million 0.350 Management Incorporated Over $200 million 0.300 - ---------------------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND Wells Capital First $200 million 0.250 Management Incorporated Over $200 million 0.200 - ---------------------------------------------------------------------------------------------- VT SMALL/MID CAP VALUE FUND Wells Capital First $200 million 0.350 Management Incorporated Over $200 million 0.300 - ---------------------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND Wells Capital First $400 million 0.150 Management Incorporated Next $400 million 0.125 Over $800 million 0.100 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, Funds Management is entitled to receive the following annual fees: (% of Average Fund Average Daily Net Assets Daily Net Assets) - --------------------------------------------------------------------- ALL FUNDS First $5 billion 0.16 Next $5 billion 0.15 Over $10 billion 0.14 - --------------------------------------------------------------------- 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 a monthly fee for custody services at the following annual rates: (% of Average Fund Daily Net Assets) - ---------------------------------------------------------------------------------------------- ALL VARIABLE TRUST FUNDS (EXCEPT VT INTERNATIONAL CORE FUND) 0.02 - ---------------------------------------------------------------------------------------------- VT INTERNATIONAL CORE FUND 0.10 DISTRIBUTION FEES The Trust has adopted a Distribution Plan ("Plan") for the Fund(s), pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are charged and paid to Wells Fargo Funds Distributor, LLC at an annual rate of up to 0.25% of average daily net assets. For the year ended December 31, 2006, distribution fees paid are disclosed on the Statements of Operations. OTHER FEES PFPC, Inc. ("PFPC") serves as fund accountant for the Trust and is entitled to receive an annual asset-based fee, and an annual fixed fee from each Fund. PFPC is also entitled to be reimbursed for all out-of-pocket expenses reasonably incurred in providing these services. WAIVED FEES AND REIMBURSED EXPENSES All amounts shown as waived fees or reimbursed expenses on the Statements of Operations, for the year ended December 31, 2006, 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 ratio for the Fund(s). Net operating expense ratios in effect from January 1, 2006, through December 31, 2006, were as follows: 137 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- Net Operating Fund Expense Ratios - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND 1.00% - -------------------------------------------------------------------------------- VT C&B LARGE CAP VALUE FUND 1.00% - -------------------------------------------------------------------------------- VT DISCOVERY FUND 1.15% - -------------------------------------------------------------------------------- VT EQUITY INCOME FUND 1.00% - -------------------------------------------------------------------------------- VT INTERNATIONAL CORE FUND 1.00% - -------------------------------------------------------------------------------- VT LARGE COMPANY CORE FUND 1.00% - -------------------------------------------------------------------------------- VT LARGE COMPANY GROWTH FUND 1.00% - -------------------------------------------------------------------------------- VT MONEY MARKET FUND 0.75% - -------------------------------------------------------------------------------- VT OPPORTUNITY FUND 1.07% - -------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND 1.20% - -------------------------------------------------------------------------------- VT SMALL/MID CAP VALUE FUND 1.14% - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND 0.90% 4. INVESTMENT PORTFOLIO TRANSACTIONS - -------------------------------------------------------------------------------- Purchases and sales of investments, exclusive of short-term securities (securities with maturities of one year or less at purchase date) for the year ended December 31, 2006, were as follows: Fund Purchases at Cost Sales Proceeds - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND $ 33,725,240 $ 63,492,312 - -------------------------------------------------------------------------------- VT C&B LARGE CAP VALUE FUND 8,526,470 10,198,425 - -------------------------------------------------------------------------------- VT DISCOVERY FUND 276,805,235 320,295,046 - -------------------------------------------------------------------------------- VT EQUITY INCOME FUND 15,006,786 30,203,106 - -------------------------------------------------------------------------------- VT INTERNATIONAL CORE FUND 17,590,639 20,569,102 - -------------------------------------------------------------------------------- VT LARGE COMPANY CORE FUND 4,829,712 11,116,768 - -------------------------------------------------------------------------------- VT LARGE COMPANY GROWTH FUND 13,655,113 22,611,176 - -------------------------------------------------------------------------------- VT OPPORTUNITY FUND 358,819,560 499,836,924 - -------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND 240,927,562 257,842,412 - -------------------------------------------------------------------------------- VT SMALL/MID CAP VALUE FUND 19,322,300 23,245,774 - -------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND 699,145,019 661,047,746 - -------------------------------------------------------------------------------- The Money Market Fund trades exclusively in short-term securities, so such purchases and sales are not reflected in the schedule. 5. BANK BORROWINGS - -------------------------------------------------------------------------------- Wells Fargo Funds Trust and Wells Fargo Variable Trust (excluding the money market funds) share in a revolving Credit Agreement with The Bank of New York, whereby the Funds are permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. The agreement permits borrowings of up to $150 million, collectively. Interest is charged to each Fund based on its borrowing at a rate equal to the Federal Funds Rate plus 0.40%. In addition, the Funds pay a quarterly commitment fee equal to 0.1% per annum of the credit line. For the year ended December 31, 2006, there were no borrowings by Variable Trust Funds under the agreement. 138 NOTES TO FINANCIAL STATEMENTS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- 6. DISTRIBUTION TO SHAREHOLDERS - -------------------------------------------------------------------------------- The tax character of distributions paid during the years ended December 31, 2006 and December 31, 2005, was as follows: Ordinary Income Long-term Capital Gain Total --------------------------- --------------------------- ---------------------------- Fund 2006 2005 2006 2005 2006 2005 VT ASSET ALLOCATION FUND $ 8,015,852 $ 9,260,151 $ 2,005,487 $ 4,200,908 $ 10,021,339 $ 13,461,059 - ------------------------------------------------------------------------------------------------------------------------- VT C&B LARGE CAP VALUE FUND 440,202 226,321 0 0 440,202 226,321 - ------------------------------------------------------------------------------------------------------------------------- VT DISCOVERY FUND 0 152,683 0 7,948,786 0 8,101,469 - ------------------------------------------------------------------------------------------------------------------------- VT EQUITY INCOME FUND 1,695,304 1,696,104 241,083 0 1,936,387 1,696,104 - ------------------------------------------------------------------------------------------------------------------------- VT INTERNATIONAL CORE FUND 1,744,530 1,069,540 591,860 692,742 2,336,390 1,762,282 - ------------------------------------------------------------------------------------------------------------------------- VT LARGE COMPANY CORE FUND 169,525 162,985 0 0 169,525 162,895 - ------------------------------------------------------------------------------------------------------------------------- VT LARGE COMPANY GROWTH FUND 0 186,924 0 0 0 186,924 - ------------------------------------------------------------------------------------------------------------------------- VT MONEY MARKET FUND 2,301,980 1,443,538 1,000 0 2,302,980 1,443,538 - ------------------------------------------------------------------------------------------------------------------------- VT OPPORTUNITY FUND 0 0 103,073,932 0 103,073,932 0 - ------------------------------------------------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND 0 0 4,390,755 0 4,390,755 0 - ------------------------------------------------------------------------------------------------------------------------- VT SMALL/MID CAP VALUE FUND 0 96,372 3,659,180 0 3,659,180 96,372 - ------------------------------------------------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND 4,144,502 3,241,100 0 88,704 4,144,502 3,329,804 As of December 31, 2006, the components of distributable earnings on a tax basis are shown on the table below. The difference between book basis and tax basis appreciation is attributable to tax deferral of losses on wash sales, mark-to-market and straddle loss deferred adjustment. Undistributed Undistributed Ordinary Long-Term Unrealized Capital Loss Currency Loss Fund Income Gain Appreciation Carryforward* Carryforward Total - ------------------------------------------------------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND $ 2,872,130 $ 1,357,825 $ 23,206,189 $ 0 $ 0 $ 27,436,144 - ------------------------------------------------------------------------------------------------------------------------------- VT C&B LARGE CAP VALUE FUND 0 0 4,539,279 (2,549,440) 0 1,989,839 - ------------------------------------------------------------------------------------------------------------------------------- VT DISCOVERY FUND 0 0 31,613,754 (199,675,615) 0 (168,061,861) - ------------------------------------------------------------------------------------------------------------------------------- VT EQUITY INCOME FUND 285,346 6,611,350 26,805,112 0 0 33,701,808 - ------------------------------------------------------------------------------------------------------------------------------- VT INTERNATIONAL CORE FUND 659,734 2,690,100 9,118,142 0 (6,542) 12,461,434 - ------------------------------------------------------------------------------------------------------------------------------- VT LARGE COMPANY CORE FUND 0 0 2,364,040 (15,703,507) 0 (13,339,467) - ------------------------------------------------------------------------------------------------------------------------------- VT LARGE COMPANY GROWTH FUND 0 0 8,416,573 (28,473,155) 0 (20,056,582) - ------------------------------------------------------------------------------------------------------------------------------- VT MONEY MARKET FUND 0 0 0 (61) 0 (61) - ------------------------------------------------------------------------------------------------------------------------------- VT OPPORTUNITY FUND 20,854,854 104,911,331 181,720,498 0 0 307,486,683 - ------------------------------------------------------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND 16,770,305 15,169,784 18,654,277 0 0 50,594,366 - ------------------------------------------------------------------------------------------------------------------------------- VT SMALL/MID CAP VALUE FUND 1,864,348 1,599,555 2,120,084 0 0 5,583,987 - ------------------------------------------------------------------------------------------------------------------------------- VT TOTAL RETURN BOND FUND 39,445 0 (39,694) (1,671,693) 0 (1,671,942) * This amount includes the post-October loss, which will reverse on the first day of the following fiscal year. 7. LEGAL AND REGULATORY MATTERS - -------------------------------------------------------------------------------- In 2004, the predecessor funds' investment adviser and affiliates (collectively, "Strong") entered into agreements with certain regulators, including the Securities and Exchange Commission and the New York Attorney General ("NYAG"), to settle market timing investigations. In the settlements, Strong agreed to pay investor restoration and civil penalties. Although some portion of these payments is likely to be distributed to predecessor fund shareholders, no determination has yet been made as to the distribution of these amounts, and the successor funds are not expected to receive any portion of these payments. The NYAG settlement also imposed fee reductions across the predecessor fund complex (excluding money market funds and very short-term income funds) totaling at least $35 million by May 2009. The current Funds' adviser has agreed to honor these fee reductions for the benefit of shareholders across the successor funds. Although civil litigation against Strong and certain predecessor funds relating to these matters is continuing, neither the current adviser nor the successor funds is a party to any such suit. 139 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 8. NEW ACCOUNTING PRONOUNCEMENTS - -------------------------------------------------------------------------------- In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation 48 (FIN 48), "Accounting for Uncertainty in Income Taxes." This standard defines the threshold for recognizing the benefits of tax-return positions in the financial statements as "more-likely-than-not" to be sustained by the taxing authority and requires measurement of a tax position meeting the more-likely-than-not criterion, based on the largest benefit that is more than 50 percent likely to be realized. FIN 48 is effective as of the beginning of the first fiscal year beginning after December 15, 2006 (January 1, 2007 for calendar-year companies), with early application permitted if no interim financial statements have been issued. In December 2006, the SEC issued a letter allowing for an implementation delay for funds until the last NAV calculation in the first required reporting period for fiscal years beginning after December 15, 2006. At adoption, companies must adjust their financial statements to reflect only those tax positions that are more-likely-than-not to be sustained as of the adoption date. As of December 31, 2006, Management does not believe the impact of the adoption of FIN 48 will be material to the financial statements. In September 2006, the Financial Accounting Standards Board (FASB) issued Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value Measurements." This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The changes to current generally accepted accounting principles from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. As of December 31, 2006, Management does not believe the adoption of SFAS No. 157 will impact the financial statement amounts, however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements on changes in net assets for the period. 140 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THE BOARD OF TRUSTEES AND SHAREHOLDERS OF WELLS FARGO VARIABLE TRUST We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of the VT Asset Allocation Fund, VT C&B Large Cap Value Fund, VT Equity Income Fund, VT International Core Fund, VT Large Company Core Fund, VT Large Company Growth Fund, VT Money Market Fund, VT Small Cap Growth Fund, and VT Total Return Bond Fund, nine of the Funds constituting the Wells Fargo Variable Trust as of December 31, 2006, and the related statements of operations for the year then ended, and the statements of changes in net assets and the financial highlights for the periods presented. We have also audited the accompanying statements of assets and liabilities, including the portfolios of investments, of the VT Discovery Fund, VT Small/Mid Cap Value Fund (formerly named the Multi Cap Value Fund), and the VT Opportunity Fund, three of the Funds constituting the Wells Fargo Variable Trust as of December 31, 2006, and the related statements of operations for the year then ended and the statements of changes in net assets for the years in the two year period then ended and the financial highlights for each of the years in the three year period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights of the Discovery Fund, Multi Cap Value Fund, and the Opportunity Fund for each of the years ended December 31, 2003, and prior, were audited by other auditors whose report dated February 3, 2004 expressed an unqualified opinion on those financial statements and financial highlights. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian and brokers. As to securities purchased or sold but not yet received or delivered, we performed other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the aforementioned funds of the Wells Fargo Variable Trust as of December 31, 2006, the results of their operations, changes in their net assets and their financial highlights for the periods indicated in the paragraph above, in conformity with U.S. generally accepted accounting principles. /s/ KPMG LLP Philadelphia, Pennsylvania February 21, 2007 141 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS OTHER INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- PROXY VOTING INFORMATION A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our Web site at WWW.WELLSFARGO.COM/ADVANTAGEFUNDS, or visiting the SEC Web site at WWW.SEC.GOV. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the Funds' Web site at WWW.WELLSFARGO.COM/ADVANTAGEFUNDS or by visiting the SEC Web site at WWW.SEC.GOV. TAX INFORMATION The following fund has elected to pass through to its shareholders the foreign taxes paid during the tax year ended December 31, 2006. The foreign income and taxes paid were as follows: Fund Foreign Income Foreign Taxes - -------------------------------------------------------------------------------- VT INTERNATIONAL CORE FUND $1,240,719 $71,404 - -------------------------------------------------------------------------------- The country-by-country breakout is as follows: Country Gross Income % Foreign Tax Paid % - -------------------------------------------------------------------------------- AUSTRALIA 4.23% 0.00% - -------------------------------------------------------------------------------- BELGIUM 1.54% 2.10% - -------------------------------------------------------------------------------- SWITZERLAND 3.23% 0.00% - -------------------------------------------------------------------------------- CHINA 0.00% 0.00% - -------------------------------------------------------------------------------- GERMANY 6.27% 10.70% - -------------------------------------------------------------------------------- DENMARK 0.93% 0.40% - -------------------------------------------------------------------------------- SPAIN 1.53% 4.10% - -------------------------------------------------------------------------------- FINLAND 0.00% 0.00% - -------------------------------------------------------------------------------- FRANCE 12.17% 31.90% - -------------------------------------------------------------------------------- GREECE 0.84% 0.00% - -------------------------------------------------------------------------------- HONG KONG 4.50% 0.00% - -------------------------------------------------------------------------------- HUNGARY 0.00% 0.00% - -------------------------------------------------------------------------------- IRELAND 0.01% 0.00% - -------------------------------------------------------------------------------- ISRAEL 0.00% 0.00% - -------------------------------------------------------------------------------- INDIA 0.00% 0.00% - -------------------------------------------------------------------------------- INDONESIA 0.00% 0.00% - -------------------------------------------------------------------------------- ITALY 5.65% 15.20% - -------------------------------------------------------------------------------- JAPAN 8.72% 11.00% - -------------------------------------------------------------------------------- MALAYSIA 0.00% 0.00% - -------------------------------------------------------------------------------- SOUTH KOREA 0.30% 0.90% - -------------------------------------------------------------------------------- NETHERLANDS 3.71% 10.00% - -------------------------------------------------------------------------------- RUSSIA 1.45% 3.60% - -------------------------------------------------------------------------------- SWEDEN 0.83% 2.20% - -------------------------------------------------------------------------------- SINGAPORE 0.82% 0.00% - -------------------------------------------------------------------------------- TAIWAN 0.00% 0.00% - -------------------------------------------------------------------------------- THAILAND 2.26% 4.10% - -------------------------------------------------------------------------------- UNITED KINGDOM 36.51% 0.00% - -------------------------------------------------------------------------------- NORWAY 1.40% 3.80% - -------------------------------------------------------------------------------- Subtotal 96.90% 100.00% - -------------------------------------------------------------------------------- UNITED STATES 3.10% 0.00% - -------------------------------------------------------------------------------- Total 100.00% 100.00% - -------------------------------------------------------------------------------- 142 OTHER INFORMATION (UNAUDITED) WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- Pursuant to Section 854(b)(2) of the Internal Revenue Code, the VT Asset Allocation Fund, the VT C&B Large Cap Value Fund, the VT Equity Income Fund, and the VT Large Company Core Fund designate 34.92%, 100%, 100%, and 100%, respectively, of the ordinary income dividends distributed during the year as qualifying for the corporate dividend-received deduction. Pursuant to Section 852(b)(3) of the Internal Revenue Code, the following funds designate capital gain dividends as follows: Capital Gain Fund Dividends - -------------------------------------------------------------------------------- VT ASSET ALLOCATION FUND $ 2,005,487 - -------------------------------------------------------------------------------- VT EQUITY INCOME FUND 241,083 - -------------------------------------------------------------------------------- VT INTERNATIONAL CORE FUND 591,860 - -------------------------------------------------------------------------------- VT MONEY MARKET FUND 1,000 - -------------------------------------------------------------------------------- VT OPPORTUNIY FUND 103,073,932 - -------------------------------------------------------------------------------- VT SMALL CAP GROWTH FUND 4,390,755 - -------------------------------------------------------------------------------- VT SMALL/MID CAP VALUE FUND 3,659,180 - -------------------------------------------------------------------------------- 143 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS OTHER INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- PORTFOLIO HOLDINGS INFORMATION The complete portfolio holdings for each Fund are publicly available on the Funds' Web site (WWW.WELLSFARGO.COM/ADVANTAGEFUNDS) on a monthly, 30-day or more delayed basis. In addition, top ten holdings information for each Fund is publicly available on the Funds' Web site on a monthly, seven-day or more delayed basis. Each Fund 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 Web site at WWW.SEC.GOV. In addition, each Fund's Form N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC, and at regional offices in New York City, at 233 Broadway, and in Chicago, at 175 West Jackson Boulevard, Suite 900. Information about 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 (the "Trustees") of the Wells Fargo Variable Trust (the "Trust"). This table supplements, and should be read in conjunction with, the Prospectus and the Statement of Additional Information* of each Fund. Each of the Trustees listed below acts in identical capacities for each of the 142 funds comprising the Trust, Wells Fargo Funds Trust and Wells Fargo Master Trust (collectively the "Fund Complex"). All of the non-interested Trustees are also members of the Audit and Governance 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. NON-INTERESTED TRUSTEES - --------------------------------------------------------------------------------------------------------- POSITION HELD AND PRINCIPAL OCCUPATIONS DURING NAME AND AGE LENGTH OF SERVICE** PAST FIVE YEARS OTHER DIRECTORSHIPS - --------------------------------------------------------------------------------------------------------- Thomas S. Goho Trustee, since 1987 Wake Forest University, None 64 Calloway School of Business and Accountancy - the Thomas Goho Chair of Finance since January 2006. Associate Professor of Finance from 1999-2005. - --------------------------------------------------------------------------------------------------------- Peter G. Gordon Trustee, since 1998 Chairman, CEO and Co- None 64 (Chairman, since 2001) Founder of Crystal Geyser Water Company since 1997. - --------------------------------------------------------------------------------------------------------- Richard M. Leach Trustee, since 1987 Retired. Prior thereto, President None 73 of Richard M. Leach Associates (a financial consulting firm). - --------------------------------------------------------------------------------------------------------- Olivia S. Mitchell Trustee, since 2006 Professor of Insurance and Risk None 53 Management, Wharton School, University of Pennsylvania. Director of the Boettner Center on Pensions and Retirement. Research Associate and Board Member, Penn Aging Research Center. Research Associate, National Bureau of Economic Research. - --------------------------------------------------------------------------------------------------------- Timothy J. Penny Trustee, since 1996 Senior Counselor to the public None 55 relations firm of Himle-Horner, and Senior Fellow at the Humphrey Institute, Minneapolis, Minnesota (a public policy organization). - --------------------------------------------------------------------------------------------------------- Donald C. Willeke Trustee, since 1996 Principal of the law firm of None 66 Willeke & Daniels. 144 OTHER INFORMATION (UNAUDITED) WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - -------------------------------------------------------------------------------- INTERESTED TRUSTEE*** - --------------------------------------------------------------------------------------------------- POSITION HELD AND PRINCIPAL OCCUPATIONS DURING NAME AND AGE LENGTH OF SERVICE** PAST FIVE YEARS OTHER DIRECTORSHIPS - --------------------------------------------------------------------------------------------------- J. Tucker Morse Trustee, since 1987 Private Investor/Real Estate None 62 Developer. - --------------------------------------------------------------------------------------------------- OFFICERS - --------------------------------------------------------------------------------------------------- POSITION HELD AND PRINCIPAL OCCUPATIONS DURING NAME AND AGE LENGTH OF SERVICE PAST FIVE YEARS OTHER DIRECTORSHIPS - --------------------------------------------------------------------------------------------------- Karla M. Rabusch President, since 2003 Executive Vice President of None 47 Wells Fargo Bank, N.A. and President of Wells Fargo Funds Management, LLC. Senior Vice President and Chief Administrative Officer of Wells Fargo Funds Management, LLC from 2001 to 2003. Vice President of Wells Fargo Bank, N.A. from December 1997 to May 2000. - --------------------------------------------------------------------------------------------------- C. David Messman Secretary, since 2000 Vice President and Managing None 46 Senior Counsel of Wells Fargo Bank, N.A. since January 1996. Senior Vice President and Secretary of Wells Fargo Funds Management, LLC since March 2001. - --------------------------------------------------------------------------------------------------- A. Erdem Cimen Treasurer, since 2006 Vice President of Wells Fargo None 33 Bank, N.A. and Vice President of Financial Operations for Wells Fargo Funds Management, LLC. Vice President and Group Finance Officer of Wells Fargo Bank, N.A. Auto Finance Group from 2004 to 2006. Vice President of Portfolio Risk Management for Wells Fargo Bank, N.A. Auto Finance Group in 2004. Vice President of Portfolio Research and Analysis for Wells Fargo Bank, N.A. Auto Finance Group from 2001 to 2004. Director of Small Business Services Risk Management for American Express Travel Related Services from 2000 to 2001. - --------------------------------------------------------------------------------------------------- Dorothy A. Peters Chief Compliance Chief Compliance Officer of None 45 Officer, since 2004 Wells Fargo Funds Management, LLC since 2004. Chief Compliance Officer for Wells Fargo Funds Management, LLC from 1997 to 2002. In 2002, Ms. Peters left Wells Fargo Funds Management, LLC to pursue personal goals. - --------------------------------------------------------------------------------------------------- * 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 or by visiting the Funds' Web site at WWW.WELLSFARGO.COM/ADVANTAGEFUNDS. ** Length of service dates reflects a Trustee's commencement of service with the Trust's predecessor entities. *** As of December 31, 2006, one of the seven Trustees is considered an "interested person" of the Trusts as defined in the Investment Company Act of 1940. The interested Trustee, 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. 145 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS LIST OF ABBREVIATIONS - -------------------------------------------------------------------------------- The following is a list of common abbreviations for terms and entities which may have appeared in this report. ABAG --Association of Bay Area Governments ADR --American Depositary Receipt AMBAC --American Municipal Bond Assurance Corporation AMT --Alternative Minimum Tax ARM --Adjustable Rate Mortgages BART --Bay Area Rapid Transit CDA --Community Development Authority CDO --Collateralized Debt Obligation CDSC --Contingent Deferred Sales Charge CGIC --Capital Guaranty Insurance Company CGY --Capital Guaranty Corporation COP --Certificate of Participation CP --Commercial Paper CTF --Common Trust Fund DW&P --Department of Water & Power DWR --Department of Water Resources ECFA --Educational & Cultural Facilities Authority EDFA --Economic Development Finance Authority ETET --Eagle Tax-Exempt Trust FFCB --Federal Farm Credit Bank FGIC --Financial Guaranty Insurance Corporation FHA --Federal Housing Authority FHAG --Federal Housing Agency FHLB --Federal Home Loan Bank FHLMC --Federal Home Loan Mortgage Corporation FNMA --Federal National Mortgage Association GDR --Global Depositary Receipt GNMA --Government National Mortgage Association GO --General Obligation HCFR --Healthcare Facilities Revenue HEFA --Health & Educational Facilities Authority HEFAR --Higher Education Facilities Authority Revenue HFA --Housing Finance Authority HFFA --Health Facilities Financing Authority IDA --Industrial Development Authority IDAG --Industrial Development Agency IDR --Industrial Development Revenue 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 MTN --Medium Term Note MUD --Municipal Utility District PCFA --Pollution Control Finance Authority PCR --Pollution Control Revenue PFA --Public Finance Authority PFFA --Public Facilities Financing Authority plc --Public Limited Company PSFG --Public School Fund Guaranty R&D --Research & Development RDA --Redevelopment Authority RDFA --Redevelopment Finance Authority REITS --Real Estate Investment Trusts SFHR --Single Family Housing Revenue SFMR --Single Family Mortgage Revenue SLMA --Student Loan Marketing Association TBA --To Be Announced TRAN --Tax Revenue Anticipation Notes USD --Unified School District XLCA --XL Capital Assurance 146 [LOGO] WELLS ADVANTAGE FARGO FUNDS More information about WELLS FARGO ADVANTAGE FUNDS(SM) is available free upon request. To obtain literature, please write, e-mail, visit the Funds' Web site, or call: WELLS FARGO ADVANTAGE FUNDS P.O. Box 8266 Boston, MA 02266-8266 E-mail: wfaf@wellsfargo.com Web site: www.wellsfargo.com/advantagefunds Individual Investors: 1-800-222-8222 Retail Investment Professionals: 1-888-877-9275 Institutional Investment Professionals: 1-866-765-0778 THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF WELLS FARGO ADVANTAGE FUNDS. IF THIS REPORT IS USED FOR PROMOTIONAL PURPOSES, DISTRIBUTION OF THE REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS. FOR A PROSPECTUS CONTAINING MORE COMPLETE INFORMATION, INCLUDING CHARGES AND EXPENSES, CALL 1-800-222-8222 OR VISIT THE FUNDS' WEB SITE AT WWW.WELLSFARGO.COM/ADVANTAGEFUNDS. PLEASE CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE INVESTMENT CAREFULLY BEFORE INVESTING. THIS AND OTHER INFORMATION ABOUT WELLS FARGO ADVANTAGE 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 WELLS FARGO ADVANTAGE FUNDS. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by WELLS FARGO FUNDS DISTRIBUTOR, LLC, Member NASD/SIPC, an affiliate of Wells Fargo & Company. ----------------------------------------------------- NOT FDIC INSURED o NO BANK GUARANTEE o MAY LOSE VALUE ----------------------------------------------------- - -------------------------------------------------------------------------------- (C) 2007 Wells Fargo www.wellsfargo.com/advantagefunds 102285 02-07 Funds Management, AVTF/AR124 12-06 LLC. All rights reserved. ITEM 2. CODE OF ETHICS ======================= As of the end of the period, December 31, 2006, Wells Fargo Variable Trust has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its President and Treasurer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT ========================================= The Board of Trustees of Wells Fargo Variable Trust has determined that Thomas S. Goho is an audit committee financial expert, as defined in Item 3 of Form N-CSR. Mr. Goho is independent for purposes of Item 3 of Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES ====================== (a) AUDIT FEES - Provided below are the aggregate fees billed for the fiscal years ended December 31, 2005 and December 31, 2006 for professional services rendered by the principal accountant for the audit of the Registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements. For the fiscal years ended December 31, 2005 and December 31, 2006, the Audit Fees were $213,000 and $220,500, respectively. (b) AUDIT-RELATED FEES - There were no audit-related fees incurred for the fiscal years ended December 31, 2005 and December 31, 2006 for assurance and related services by the principal accountant for the Registrant. (c) TAX FEES - Provided below are the aggregate fees billed for the fiscal years ended December 31, 2005 and December 31, 2006 for professional services rendered by the principal accountant for the Registrant for tax compliance, tax advice, and tax planning. For the fiscal years ended December 31, 2005 and December 31, 2006, the Tax Fees were $0 and $0, respectively. The incurred Tax Fees are comprised of excise tax review services. For the fiscal years ended December 31, 2005 and December 31, 2006, the Tax Fees were $20,040 and $20,820 respectively. The incurred Tax Fees are comprised of tax preparation and consulting services. (d) ALL OTHER FEES - There were no other fees incurred for the fiscal years ended October 31, 2005 and October 31, 2006. (e)(1) The Chairman of the Audit Committees is authorized to pre-approve: (1) audit services to the mutual funds of Wells Fargo Funds Trust, Wells Fargo Variable Trust and Wells Fargo Master Trust (the "Funds"); (2) non-audit tax or compliance consulting or training services provided to the Funds by the independent auditors ("Auditors") if the fees for any particular engagement are not anticipated to exceed $50,000; and (3) non-audit tax or compliance consulting or training services provided by the Auditors to a Fund's investment adviser and its controlling entities (where pre-approval is required because the engagement relates directly to the operations and financial reporting of the Fund) if the fee to the Auditors for any particular engagement is not anticipated to exceed $50,000. For any such pre-approval sought from the Chairman, Management shall prepare a brief description of the proposed services. If the Chairman approves of such service, he or she shall sign the statement prepared by Management. Such written statement shall be presented to the full Committees at their next regularly scheduled meetings. (e)(2) Not Applicable. (f) Not Applicable. (g) Provided below are the aggregate non-audit fees billed for the fiscal years ended October 31, 2005 and October 31, 2006, by the principal accountant for services rendered to the Registrant, and rendered to the Registrant's investment adviser, and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the Registrant. For the fiscal years ended December 31, 2005 and December 31, 2006, the Registrant incurred non-audit fees in the amount of $115,000 and $170,000, respectively. The non-audit fees consist of SAS70 control reviews of Wells Fargo Bank, N.A., the Funds' custodian. For the fiscal years ended December 31, 2005 and December 31, 2006, the Registrant's investment adviser incurred non-audit fees in the amount of $36,000 and $44,000, respectively. The non-audit fees for the year ended December 31, 2005 consist of procedure reviews for pending mergers associated with fund reorganizations. The non-audit fees for the year ended December 31, 2006 relates to examinations of securities pursuant to rule 206 (4)- 2 under the Investment Advisors Act of 1940. (h) The Registrant's audit committee of the board of directors has determined that non-audit services rendered to the registrant's investment adviser, that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of the Regulation S-X, does not compromise the independence of the principal accountant. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS ============================================= Not applicable. ITEMS 6. SCHEDULE OF INVESTMENTS ================================= The Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES =============================================================== Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES ============================================================================= Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASES ============================================================================= Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECUIRTY HOLDERS ============================================================ Not applicable. ITEM 11. CONTROLS AND PROCEDURES ================================ (a) 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. (b) There were no significant changes in the Trust's internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second quarter of the period covered by this report that materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS ================= (a)(1) Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as Exhibit 10a. (a)(2) Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. (a)(3) Not applicable. (b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is filed and attached hereto as Exhibit 99.906CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Wells Fargo Funds Trust By: /s/ Karla M. Rabusch ----------------------- Karla M. Rabusch President Date: February 20, 2007 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated. By: /s/ Karla M. Rabusch ----------------------- Karla M. Rabusch President Date: February 20, 2007 By: /s/ A. Erdem Cimen ----------------------- A. Erdem Cimen Treasurer Date: February 20, 2007 CERTIFICATION I, Karla M. Rabusch, certify that: 1. I have reviewed this report on Form N-CSR of the Wells Fargo Advantage VT Asset Allocation Fund, Wells Fargo Advantage VT Equity Income Fund, Wells Fargo Advantage VT C&B Large Cap Value Fund, Wells Fargo Advantage VT Discovery Fund, Wells Fargo Advantage VT Large Company Core Fund, Wells Fargo Advantage VT International Core Fund, Wells Fargo Advantage VT Large Company Growth Fund, Wells Fargo Advantage VT Money Market Fund, Wells Fargo Advantage VT Small/Mid Cap Value Fund, Wells Fargo Advantage VT Opportunity Fund, Wells Fargo Advantage VT Small Cap Growth Fund, and the Wells Fargo Advantage VT Total Return Bond Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal controls over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. By: /s/ Karla M. Rabusch ----------------------- Karla M. Rabusch President Wells Fargo Funds Trust Date: February 20, 2007 Exhibit 99.CERT CERTIFICATION I, A. Erdem Cimen, certify that: 1.I have reviewed this report on Form N-CSR of the Wells Fargo Advantage VT Asset Allocation Fund, Wells Fargo Advantage VT Equity Income Fund, Wells Fargo Advantage VT C&B Large Cap Value Fund, Wells Fargo Advantage VT Discovery Fund, Wells Fargo Advantage VT Large Company Core Fund, Wells Fargo Advantage VT International Core Fund, Wells Fargo Advantage VT Large Company Growth Fund, Wells Fargo Advantage VT Money Market Fund, Wells Fargo Advantage VT Small/Mid Cap Value Fund, Wells Fargo Advantage VT Opportunity Fund, Wells Fargo Advantage VT Small Cap Growth Fund, and the Wells Fargo Advantage VT Total Return Bond Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal controls over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. By: /s/ A. Erdem Cimen ----------------------- A. Erdem Cimen Treasurer Wells Fargo Funds Trust Date: February 20, 2007 Exhibit 99.CERT SECTION 906 CERTIFICATION Pursuant to 18 U.S.C. ss. 1350, the undersigned officer of Wells Fargo Variable Trust (the "Trust"), hereby certifies, to the best of her knowledge, that the Trust's report on Form N-CSR for the period ended December 31, 2006 (the "Report") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. By: /s/ Karla M. Rabusch ----------------------- Karla M. Rabusch President Wells Fargo Funds Trust Date: February 20, 2007 This certification is being furnished to the Securities and Exchnage Commission pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with the Securities and Exchange Commission. SECTION 906 CERTIFICATION Pursuant to 18 U.S.C. ss. 1350, the undersigned officer of Wells Fargo Variable Trust (the "Trust"), hereby certifies, to the best of his knowledge, that the Trust's report on Form N-CSR for the period ended December 31, 2006 (the "Report") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. By: /s/ A. Erdem Cimen ----------------------- A. Erdem Cimen Treasurer Wells Fargo Funds Trust Date: February 20, 2007 This certification is being furnished to the Securities and Exchnage Commission pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with the Securities and Exchange Commission.