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
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[LOGO]
WELLS ADVANTAGE
FARGO FUNDS
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DECEMBER 31, 2006
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[GRAPHIC OMITTED] Annual Report
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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
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Table of Contents
Letter to Contractholders ................................................ 1
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Performance Highlights
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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
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Portfolio of Investments
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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
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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
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Report of Independent Registered Public Accounting Firm .................. 141
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Other Information (Unaudited) ............................................ 142
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List of Abbreviations .................................................... 146
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NOT FDIC INSURED-NO BANK GUARANTEE-MAY LOSE VALUE
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THIS PAGE IS INTENTIONALLY LEFT BLANK --
LETTER TO CONTRACTHOLDERS WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS
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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
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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
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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
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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
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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
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WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND
INVESTMENT OBJECTIVE
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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?
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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?
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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?
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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?
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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.
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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
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AVERAGE ANNUAL TOTAL RETURN 1 (%) (AS OF DECEMBER 31, 2006)
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6-Months* 1-Year 5-Year 10-Year
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VT Asset Allocation Fund (Incept. Date 04/15/1994) 11.46 12.14 6.50 7.86
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Benchmarks
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Asset Allocation Composite Index 2 10.78 9.73 7.08 8.70
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S&P 500 Index 3 12.73 15.78 6.19 8.42
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Lehman Brothers 20+ Year U.S. Treasury Index 4 7.83 0.93 7.30 7.89
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* RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND CHARACTERISTICS 5 (AS OF DECEMBER 31, 2006)
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Beta** 0.98
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Weighted Average Coupon of Bond Portfolio 5.61%
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Weighted Average Maturity of Bond Portfolio 23.22 years
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Modified Duration of Bond Portfolio 13.18 years
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Portfolio Turnover 12%
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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)
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[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)
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U.S. Treasury Bond, 6.13%, 11/15/2027 6.57%
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U.S. Treasury Bond, 6.25%, 5/15/2030 5.35%
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U.S. Treasury Bond, 5.38%, 2/15/2031 4.93%
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U.S. Treasury Bond, 6.13%, 8/15/2029 3.41%
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U.S. Treasury Bond, 5.50%, 8/15/2028 3.32%
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U.S. Treasury Bond, 5.25%, 2/15/2029 3.11%
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U.S. Treasury Bond, 6.63%, 2/15/2027 3.01%
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U.S. Treasury Bond, 5.25%, 11/15/2028 2.97%
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U.S. Treasury Bond, 6.38%, 8/15/2027 2.76%
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Exxon Mobil Corporation 2.21%
GROWTH OF $10,000 INVESTMENT 7 (AS OF DECEMBER 31, 2006)
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[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
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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
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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
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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.