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, 2007
Date of reporting period: December 31, 2007
ITEM 1. REPORT TO SHAREHOLDERS
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[LOGO] WELLS ADVANTAGE
FARGO FUNDS
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[GRAPHIC OMITTED] Annual Report
December 31, 2007
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WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS
o WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND
o WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND
o WELLS FARGO ADVANTAGE VT DISCOVERY FUND(SM)
o WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND
o WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND
o WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND
o WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND
o WELLS FARGO ADVANTAGE VT MONEY MARKET FUND
o WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND(SM)
o WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND
o WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND
o WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND
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Contents
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LETTER TO SHAREHOLDERS .................................................. 2
PERFORMANCE HIGHLIGHTS
Wells Fargo Advantage VT Asset Allocation Fund .......................... 6
Wells Fargo Advantage VT C&B Large Cap Value Fund ....................... 10
Wells Fargo Advantage VT Discovery Fund ................................. 14
Wells Fargo Advantage VT Equity Income Fund ............................. 20
Wells Fargo Advantage VT International Core Fund ........................ 26
Wells Fargo Advantage VT Large Company Core Fund ........................ 30
Wells Fargo Advantage VT Large Company Growth Fund ...................... 36
Wells Fargo Advantage VT Money Market Fund .............................. 40
Wells Fargo Advantage VT Opportunity Fund ............................... 44
Wells Fargo Advantage VT Small Cap Growth Fund .......................... 48
Wells Fargo Advantage VT Small/Mid Cap Value Fund ....................... 54
Wells Fargo Advantage VT Total Return Bond Fund ......................... 60
FUND EXPENSES ........................................................... 64
PORTFOLIO OF INVESTMENTS
Wells Fargo Advantage VT Asset Allocation Fund .......................... 66
Wells Fargo Advantage VT C&B Large Cap Value Fund ....................... 81
Wells Fargo Advantage VT Discovery Fund ................................. 85
Wells Fargo Advantage VT Equity Income Fund ............................. 90
Wells Fargo Advantage VT International Core Fund ........................ 95
Wells Fargo Advantage VT Large Company Core Fund ........................ 100
Wells Fargo Advantage VT Large Company Growth Fund ...................... 104
Wells Fargo Advantage VT Money Market Fund .............................. 108
Wells Fargo Advantage VT Opportunity Fund ............................... 111
Wells Fargo Advantage VT Small Cap Growth Fund .......................... 116
Wells Fargo Advantage VT Small/Mid Cap Value Fund ....................... 121
Wells Fargo Advantage VT Total Return Bond Fund ......................... 125
FINANCIAL STATEMENTS
Statements of Assets and Liabilities .................................... 138
Statements of Operations ................................................ 142
Statements of Changes in Net Assets ..................................... 146
Financial Highlights 152
NOTES TO FINANCIAL STATEMENTS ........................................... 156
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ................. 168
OTHER INFORMATION ....................................................... 169
LIST OF ABBREVIATIONS ................................................... 173
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The views expressed are as of December 31, 2007, and are those of the Fund
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 VARIABLE TRUST FUNDS.
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NOT FDIC INSURED o NO BANK GUARANTEE o MAY LOSE VALUE
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[GRAPHIC OMITTED]
WELLS FARGO
INVESTMENT HISTORY
1971 INTRODUCED ONE OF THE FIRST INSTITUTIONAL INDEX FUNDS.
1978 ONE OF THE FIRST FIRMS TO APPLY ASSET ALLOCATION THEORY TO INVESTMENT
PORTFOLIO MANAGEMENT.
1985 ONE OF THE FIRST FIRMS TO CREATE A THREE- WAY ASSET ALLOCATION FUND THAT
"TILTS" INVESTMENTS TOWARD PORTIONS OF THE MARKET THAT OUR PROPRIETARY
MODELS INDICATE WILL PERFORM BETTER.
1994 INTRODUCED TARGET DATE FUNDS THAT AUTOMATICALLY REALLOCATE THE ASSET MIX
OVER SPECIFIC TIME HORIZONS.
1997 WELLS FARGO LAUNCHED THE WEALTHBUILDER PORTFOLIOS, A UNIQUE "FUND OF FUNDS"
THAT USES FLEXIBLE ASSET ALLOCATION STRATEGIES TO SHIFT ASSETS.
1999 REORGANIZED THE NORWEST ADVANTAGE FUNDS(R) AND STAGECOACH FUNDS(R) INTO THE
WELLS FARGO FUNDS(R).
2003 EXPANDED FIXED-INCOME, SMALL CAP, AND EMERGING MARKETS LINEUP FROM
MONTGOMERY ASSET MANAGEMENT, LLC.
2004 ADDED ADDITIONAL LARGE CAP AND MID CAP FUNDS TO THE LINEUP BY ADOPTING THE
COOKE & BIELER VALUE FUNDS.
2005 WELLS FARGO FUNDS MERGED WITH STRONG FUNDS TO BECOME WELLS FARGO ADVANTAGE
FUNDS, FORMING A FUND FAMILY OF OVER 120 FUNDS AND PLACING IT AMONG THE TOP
20 MUTUAL FUND FAMILIES IN THE UNITED STATES.
2006 ENHANCED AND RENAMED THE WELLS FARGO ADVANTAGE OUTLOOK FUNDS(SM) TO THE
WELLS FARGO ADVANTAGE DOW JONES TARGET DATE FUNDS(SM), WHICH SEEK TO
REPLICATE RETURNS OF THE APPROPRIATE DOW JONES TARGET DATE INDEXES, THE
FIRST LIFE CYCLE INDEXES IN THE INVESTMENT INDUSTRY.
WELLS FARGO ADVANTAGE FUNDS(R)
Integrity. Expertise. Solutions.
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GUIDED BY A DISTINGUISHED HERITAGE. Since 1852 Wells Fargo has distinguished
itself by safely delivering people and their valuables to distant destinations.
To meet the needs of a vibrant, expanding nation, the company successfully
forged partnerships with local specialists who knew the terrain.
Although much has changed since then, WELLS FARGO ADVANTAGE FUNDS continues to
put the same time and effort into selecting independent portfolio management
teams who oversee our Funds. It's our way of maintaining this early commitment
to integrity and expertise and to providing solutions that help you reach your
destination.
INDEPENDENT THINKING. With a primary focus on delivering long-term performance
and risk management, our approach offers investors access to the strategic
thinking of independent investment teams from 15 different management firms.
While each of our teams concentrates on a specific strategy, collectively they
provide in-depth knowledge and insight across distinct investment styles.
TIME-TESTED APPROACH. Our teams are chosen for their expertise in particular
investment styles and for their consistent, repeatable processes. All remain
independent and free to concentrate solely on managing money and producing
results. Our strict adherence to this approach provides a consistent focus on
long-term results and allows investors to tap into the expertise of leading
institutional investment managers to create fully diversified portfolios.
SOLUTIONS FOR EVERY STAGE. WELLS FARGO ADVANTAGE FUNDS provides investors with
strategic investment solutions that help navigate the complex and ever-changing
investment landscape. Our diverse family of mutual funds includes more than 120
Funds that cover a broad spectrum of investment styles and asset classes, and
each Fund has its own disciplined approach to investing.
NOT PART OF THE ANNUAL REPORT.
WELLS FARGO ADVANTAGE FUNDS OFFERS MORE THAN 120 MUTUAL FUNDS ACROSS A WIDE
RANGE OF ASSET CLASSES, REPRESENTING OVER $155 BILLION IN ASSETS UNDER
MANAGEMENT, AS OF DECEMBER 31, 2007.
EQUITY FUNDS
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Asia Pacific Fund
C&B Large Cap Value Fund
C&B Mid Cap Value Fund
Capital Growth Fund
Common Stock Fund
Discovery Fund
Diversified Equity Fund
Diversified Small Cap Fund
Dividend Income Fund
Emerging Growth Fund
Emerging Markets Focus Fund
Endeavor Large Cap Fund
Endeavor Select Fund
Enterprise Fund
Equity Income Fund
Equity Index Fund
Equity Value Fund
Growth and Income Fund
Growth Fund
Growth Equity Fund
Index Fund
International Core Fund
International Equity Fund
International Value Fund
Large Cap Appreciation Fund
Large Cap Growth Fund
Large Company Core Fund
Large Company Growth Fund
Mid Cap Disciplined Fund
Mid Cap Growth Fund
Opportunity Fund
Overseas Fund
Small Cap Disciplined Fund
Small Cap Growth Fund
Small Cap Opportunities Fund
Small Cap Value Fund
Small Company Growth Fund
Small Company Value Fund
Small/Mid Cap Value Fund
Specialized Financial Services Fund
Specialized Technology Fund
Strategic Small Cap Value Fund
U.S. Value Fund
Value Fund
BOND FUNDS
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California Limited-Term Tax-Free Fund
California Tax-Free Fund
Colorado Tax-Free Fund
Corporate Bond Fund
Diversified Bond Fund
Government Securities Fund 1
High Income Fund
High Yield Bond Fund
Income Plus Fund
Inflation-Protected Bond Fund
Intermediate Government Income Fund 1
Intermediate Tax-Free Fund
Minnesota Tax-Free Fund
Municipal Bond Fund
National Limited-Term Tax-Free Fund
National Tax-Free Fund
Short Duration Government Bond Fund 1
Short-Term Bond Fund
Short-Term High Yield Bond Fund
Short-Term Municipal Bond Fund
Stable Income Fund
Strategic Income Fund
Total Return Bond Fund
Ultra Short-Term Income Fund
Ultra Short-Term Municipal Income Fund
Ultra-Short Duration Bond Fund
Wisconsin Tax-Free Fund
ASSET ALLOCATION FUNDS
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Aggressive Allocation Fund
Asset Allocation Fund
Balanced Fund
Conservative Allocation Fund
Growth Balanced Fund
Moderate Balanced Fund
Life Stage-Aggressive Portfolio
Life Stage-Conservative Portfolio
Life Stage-Moderate Portfolio
WealthBuilder Conservative Allocation Portfolio
WealthBuilder Equity Portfolio
WealthBuilder Growth Allocation Portfolio
WealthBuilder Growth Balanced Portfolio
WealthBuilder Moderate Balanced Portfolio
WealthBuilder Tactical Equity Portfolio
Target Today Fund 2
Target 2010 Fund 2
Target 2015 Fund 2
Target 2020 Fund 2
Target 2025 Fund 2
Target 2030 Fund 2
Target 2035 Fund 2
Target 2040 Fund 2
Target 2045 Fund 2
Target 2050 Fund 2
MONEY MARKET FUNDS
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100% Treasury Money Market Fund 1
California Tax-Free Money Market Fund
California Tax-Free Money Market Trust
Cash Investment Money Market Fund
Government Money Market Fund 1
Heritage Money Market Fund
Minnesota Money Market Fund
Money Market Fund
Money Market Trust
Municipal Money Market Fund
National Tax-Free Money Market Fund
National Tax-Free Money Market Trust
Overland Express Sweep Fund
Prime Investment Money Market Fund
Treasury Plus Money Market Fund 1
VARIABLE TRUST FUNDS 3
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VT Asset Allocation Fund
VT C&B Large Cap Value Fund
VT Discovery Fund
VT Equity Income Fund
VT International Core Fund
VT Large Company Core Fund
VT Large Company Growth Fund
VT Money Market Fund
VT Opportunity Fund
VT Small Cap Growth Fund
VT Small/Mid Cap Value Fund
VT Total Return Bond Fund
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 WELLS
FARGO ADVANTAGE MONEY MARKET FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT
AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN A MONEY MARKET
FUND.
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1 The U.S. Government guarantee applies to certain of the underlying
securities and NOT to shares of the Fund.
2 The full name of this Fund series is the WELLS FARGO ADVANTAGE DOW JONES
TARGET DATE FUNDS(SM).
3 The Variable Trust Funds are generally available only through insurance
company variable contracts.
NOT PART OF THE ANNUAL REPORT.
2 Wells Fargo Advantage Variable Trust Funds Letter to Shareholders
[PHOTO OMITTED]
KARLA M. RABUSCH,
PRESIDENT
WELLS FARGO ADVANTAGE FUNDS
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SUBPRIME MORTGAGE LOANS AND A DECLINING HOUSING MARKET--COUPLED WITH CONCERNS
ABOUT CONSUMER DISCRETIONARY SPENDING, RISING PRICES AT THE GAS PUMPS, AND
HIGHER FOOD PRICES--CONTINUED TO AFFECT BOTH THE STOCK AND THE BOND MARKETS.
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Dear Valued Contractholder,
You may have noticed that your annual report for the 12-month period that ended
December 31, 2007, has a new look. We would like to call your attention to a few
enhancements. First, we have redesigned your annual shareholder report so that
Fund performance is at the beginning of the section for each Fund. Second, we
have allocated more space for our letter to you and for the portfolio manager
discussions of the Funds in each report. Third, you may want to look for "Fund
Highlights" at the beginning of each commentary on the page following the Fund's
performance. Our goal is to offer you a high-level overview of how the Fund
performed followed by a discussion of the details that affected Fund
performance, changes made to the Fund, and the portfolio manager's outlook for
the Fund. We will continue to provide you with a general overview of the economy
and the asset classes that are represented in each report. We hope that you find
these improvements helpful and informative.
INTERNATIONAL STOCKS CONTINUED TO OUTPACE DOMESTIC STOCKS DURING THE PERIOD AS
THE UNITED STATES TRIED TO TAME A DECLINING HOUSING MARKET, INFLATION, AND
ONGOING CONCERNS IN THE SUBPRIME MORTGAGE ARENA.
Subprime mortgage loans and a declining housing market--coupled with concerns
about consumer discretionary spending, rising prices at the gas pumps, and
higher food prices--continued to affect both the stock and the bond markets.
Equity markets broke several records during the period, with the Dow Jones
Industrial Average (DJIA) closing above 14,000 for the first time ever in
mid-July 2007 before falling back below 13,000 in the following weeks as growing
problems in the subprime mortgage market created a global credit squeeze. Equity
markets rallied sharply in mid-September after the Fed surprised investors with
a larger-than-expected 50 basis point (100 basis points equals 1.00%) cut in the
federal funds target rate, its first cut in four years. The DJIA set another
record above 14,000 in mid-October before again falling sharply back below
13,000 during the following weeks. At the close of 2007, the DJIA closed at
13,264.82, up from 12,463.15 compared to last year at this time.
A style rotation also occurred during the 12-month period, as growth indices
moved ahead of their value counterparts after seven consecutive years of
relative underperformance. With relative risk premiums for growth companies at
multidecade lows, investors were willing to pay for companies that showed strong
sustainable earnings and revenue growth despite the slowing economy. Companies
that were able to show steady growth stood out as corporate profits slowed
significantly during the 12-month period and turned negative during the third
quarter of 2007 for the first time in five years. The value indices also came
under pressure as the turmoil in the credit markets led to significant weakness
among financial companies.
Letter to Shareholders Wells Fargo Advantage Variable Trust Funds 3
International stocks continued to outpace domestic stocks during the period,
with the emerging markets again posting the strongest returns despite some sharp
declines. The dollar continued to weaken throughout most of the period.
LIQUIDITY PROBLEMS IN THE FIXED-INCOME MARKETS SPARKED A GLOBAL CREDIT CRUNCH.
As liquidity in the fixed-income markets evaporated during the 12-month period,
a global credit crunch drove U.S. Treasury prices up and widened spreads between
Treasuries and the rest of the credit market. Defaults in subprime mortgages
were mostly to blame, as the global financial system seemed to collectively
discover that these debt obligations were embedded in a vast spectrum of
structured debt products and that their expected cash flows were increasingly
unlikely to come in as promised. As a result, credit and structured product
spreads widened dramatically while investors fled unknown risk and sought the
safety of U.S. Treasuries--a true flight-to-quality rally.
The seizing of the credit market engine was extreme enough to get the attention
of the Fed. In mid-August, the Fed announced a surprise cut in the discount rate
by 50 basis points in an effort to bolster liquidity after injecting billions of
dollars into the financial system during the preceding weeks. However, in the
Fed's estimation, these actions were not enough, and the Fed subsequently
dropped both the federal funds rate and the discount rate by another 50 basis
points at its scheduled meeting in mid-September, reversing more than a year of
ongoing "inflation risk" vigilance and replacing it with a "risk to growth"
cautionary assessment of economic conditions. After a modest rebound in credit
conditions during late September and October, the credit crunch returned for a
second act in mid-November, prompting further monetary accommodation by the Fed
in the last month of the year. As an alternative option for banks seeking
liquidity support from the Fed but not wishing to publicly display their needs
for cash through the discount window, the Fed introduced a silent-auction loan.
This was a new and innovative way for the Fed to offer supplemental monetary
accommodation. However, conventional methods were not neglected either as the
Fed further cut the federal funds rate in December by a quarter point to 4.25%.
Although the credit crunch caused spreads to widen and challenged debt
valuations across the board, corporate issues, asset-backed securities (ABS),
and even mortgage-backed securities (MBS) were able to show positive returns.
Much of the period's spread widening can be attributed to the strong rally in
U.S. Treasuries. Yields in credit and structured products declined as well
during the period but did not nearly keep pace with the descent of U.S. Treasury
yields.
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AS AN ALTERNATIVE OPTION FOR BANKS SEEKING LIQUIDITY SUPPORT FROM THE FED BUT
NOT WISHING TO PUBLICLY DISPLAY THEIR NEEDS FOR CASH THROUGH THE DISCOUNT
WINDOW, THE FED INTRODUCED A SILENT-AUCTION LOAN.
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4 Wells Fargo Advantage Variable Trust Funds Letter to Shareholders
THE UNCERTAINTY OF FUTURE FED ACTION COMBINED WITH OTHER MARKET FORCES SUPPORTS
OUR BELIEF THAT SUCCESSFUL INVESTING INCLUDES A BALANCED APPROACH OF OWNING A
DIVERSIFIED PORTFOLIO WHILE KEEPING A LONG-TERM PERSPECTIVE.
While diversification may not prevent losses in a downturn, it may help to
reduce them and provide you with one way of managing risk. Our diverse family of
mutual funds may also help. We offer more than 120 Funds that cover a broad
spectrum of investment styles and asset classes. Each Fund is managed according
to a disciplined approach to investing that features the strategic thinking of
portfolio managers chosen for their in-depth knowledge and methodology. We
believe that our insistence on seeking investment teams who share our dedication
to pursuing consistent long-term results offers you a way to navigate changing
market conditions and move forward with your financial planning.
Thank you for choosing WELLS FARGO ADVANTAGE FUNDS. We appreciate your
confidence in us. Through each market cycle, we are committed to helping you
meet your financial needs. 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
THIS PAGE IS INTENTIONALLY LEFT BLANK.
6 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND
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INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (the Fund) seeks long-term
total return, consisting of capital appreciation and current income.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Galen G. Blomster, CFA
Gregory T. Genung, CFA
Jeffrey P. Mellas
FUND INCEPTION
April 15, 1994
PERFORMANCE SUMMARY
12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2007
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FUND 1 YEAR
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VT Asset Allocation Fund 7.60%
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BENCHMARKS
Asset Allocation Composite Index 1 7.40%
S&P 500 Index 2 5.49%
Lehman Brothers 20+ Year U.S. Treasury Index 3 10.15%
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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.
NET AND GROSS EXPENSE RATIOS FOR THE FUND ARE 1.00% AND 1.02%, RESPECTIVELY. THE
INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2009 TO WAIVE
FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET
OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS
WOULD HAVE BEEN LOWER.
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GROWTH OF $10,000 INVESTMENT 4
(AS OF DECEMBER 31, 2007)
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[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
WELLS FARGO ADVANTAGE VT Asset Allocation Lehman Brothers 20+ Year
ASSET ALLOCATION FUND Composite Index S&P 500 Index U.S. Treasury Index
12/31/1997 $10,000 $10,000 $10,000 $10,000
1/31/1998 $10,150 $10,150 $10,111 $10,210
2/28/1998 $10,600 $10,557 $10,839 $10,129
3/31/1998 $10,982 $10,889 $11,394 $10,149
4/30/1998 $11,075 $10,970 $11,508 $10,183
5/31/1998 $11,016 $10,949 $11,311 $10,398
6/30/1998 $11,426 $11,331 $11,770 $10,672
7/31/1998 $11,316 $11,233 $11,645 $10,611
8/31/1998 $10,237 $10,480 $ 9,963 $11,130
9/30/1998 $10,812 $11,037 $10,601 $11,540
10/31/1998 $11,435 $11,500 $11,463 $11,344
11/30/1998 $11,989 $11,960 $12,157 $11,448
12/31/1998 $12,526 $12,363 $12,858 $11,422
1/31/1999 $12,955 $12,720 $13,395 $11,530
2/28/1999 $12,489 $12,211 $12,979 $10,914
3/31/1999 $12,845 $12,482 $13,498 $10,866
4/30/1999 $13,209 $12,776 $14,021 $10,875
5/31/1999 $12,929 $12,514 $13,690 $10,702
6/30/1999 $13,290 $12,869 $14,449 $10,571
7/31/1999 $12,999 $12,599 $13,999 $10,511
8/31/1999 $12,933 $12,538 $13,929 $10,461
9/30/1999 $12,746 $12,368 $13,548 $10,537
10/31/1999 $13,199 $12,838 $14,405 $10,538
11/30/1999 $13,313 $12,956 $14,698 $10,458
12/31/1999 $13,694 $13,322 $15,563 $10,273
1/31/2000 $13,410 $13,013 $14,781 $10,452
2/29/2000 $13,504 $13,050 $14,502 $10,823
3/31/2000 $14,478 $14,011 $15,919 $11,228
4/30/2000 $14,162 $13,703 $15,440 $11,116
5/31/2000 $13,924 $13,507 $15,124 $11,060
6/30/2000 $14,247 $13,824 $15,497 $11,301
7/31/2000 $14,189 $13,804 $15,255 $11,524
8/31/2000 $14,849 $14,453 $16,202 $11,806
9/30/2000 $14,268 $13,896 $15,347 $11,604
10/31/2000 $14,308 $13,953 $15,282 $11,798
11/30/2000 $13,700 $13,483 $14,078 $12,197
12/31/2000 $13,834 $13,648 $14,147 $12,483
1/31/2001 $14,184 $13,939 $14,649 $12,482
2/28/2001 $13,253 $13,274 $13,314 $12,701
3/31/2001 $12,610 $12,728 $12,471 $12,600
4/30/2001 $13,214 $13,161 $13,439 $12,204
5/31/2001 $13,304 $13,223 $13,530 $12,225
6/30/2001 $13,114 $13,084 $13,200 $12,351
7/31/2001 $13,174 $13,213 $13,070 $12,839
8/31/2001 $12,715 $12,845 $12,253 $13,147
9/30/2001 $12,082 $12,234 $11,264 $13,177
10/31/2001 $12,446 $12,665 $11,479 $13,961
11/30/2001 $12,873 $12,980 $12,359 $13,221
12/31/2001 $12,872 $12,936 $12,467 $12,935
1/31/2002 $12,778 $12,895 $12,285 $13,117
2/28/2002 $12,631 $12,803 $12,048 $13,261
3/31/2002 $12,790 $12,855 $12,501 $12,648
4/30/2002 $12,454 $12,599 $11,744 $13,167
5/31/2002 $12,402 $12,543 $11,658 $13,168
6/30/2002 $11,982 $12,096 $10,828 $13,401
7/31/2002 $11,364 $11,684 $ 9,984 $13,826
8/31/2002 $11,491 $11,974 $10,049 $14,548
9/30/2002 $10,517 $11,406 $ 8,958 $15,192
10/31/2002 $11,214 $11,837 $ 9,746 $14,625
11/30/2002 $11,750 $12,217 $10,319 $14,507
12/31/2002 $11,218 $11,998 $ 9,713 $15,135
1/31/2003 $10,970 $11,795 $ 9,459 $15,088
2/28/2003 $10,851 $11,838 $ 9,317 $15,565
3/31/2003 $10,920 $11,827 $ 9,406 $15,305
4/30/2003 $11,678 $12,472 $10,181 $15,501
5/31/2003 $12,262 $13,186 $10,717 $16,495
6/30/2003 $12,350 $13,179 $10,854 $16,156
7/31/2003 $12,318 $12,775 $11,046 $14,492
8/31/2003 $12,546 $13,036 $11,261 $14,808
9/30/2003 $12,515 $13,239 $11,142 $15,621
10/31/2003 $13,027 $13,525 $11,771 $15,139
11/30/2003 $13,125 $13,628 $11,875 $15,226
12/31/2003 $13,696 $14,121 $12,497 $15,408
1/31/2004 $13,937 $14,390 $12,727 $15,717
2/29/2004 $14,123 $14,635 $12,903 $16,058
3/31/2004 $13,970 $14,592 $12,709 $16,304
4/30/2004 $13,641 $14,091 $12,510 $15,285
5/31/2004 $13,773 $14,183 $12,681 $15,222
6/30/2004 $14,008 $14,403 $12,927 $15,370
7/31/2004 $13,643 $14,223 $12,500 $15,652
8/31/2004 $13,757 $14,493 $12,550 $16,299
9/30/2004 $13,886 $14,650 $12,686 $16,476
10/31/2004 $14,093 $14,883 $12,879 $16,755
11/30/2004 $14,517 $15,097 $13,400 $16,340
12/31/2004 $14,976 $15,572 $13,856 $16,791
1/31/2005 $14,768 $15,563 $13,518 $17,382
2/28/2005 $14,988 $15,678 $13,803 $17,152
3/31/2005 $14,747 $15,469 $13,559 $17,036
4/30/2005 $14,596 $15,535 $13,302 $17,702
5/31/2005 $15,048 $16,021 $13,724 $18,243
6/30/2005 $15,113 $16,165 $13,744 $18,614
7/31/2005 $15,507 $16,332 $14,255 $18,055
8/31/2005 $15,459 $16,461 $14,125 $18,660
9/30/2005 $15,442 $16,305 $14,239 $17,992
10/31/2005 $15,154 $15,999 $14,002 $17,600
11/30/2005 $15,645 $16,406 $14,531 $17,721
12/31/2005 $15,723 $16,598 $14,536 $18,232
1/31/2006 $16,012 $16,778 $14,921 $18,002
2/28/2006 $16,096 $16,888 $14,961 $18,222
3/31/2006 $16,097 $16,699 $15,148 $17,373
4/30/2006 $16,182 $16,647 $15,351 $16,888
5/31/2006 $15,782 $16,366 $14,910 $16,905
6/30/2006 $15,819 $16,442 $14,929 $17,065
7/31/2006 $15,938 $16,641 $15,021 $17,424
8/31/2006 $16,333 $17,090 $15,378 $17,978
9/30/2006 $16,722 $17,486 $15,774 $18,325
10/31/2006 $17,206 $17,887 $16,288 $18,479
11/30/2006 $17,528 $18,261 $16,597 $18,920
12/31/2006 $17,631 $18,214 $16,830 $18,400
1/31/2007 $17,806 $18,300 $17,084 $18,201
2/28/2007 $17,606 $18,345 $16,749 $18,846
3/31/2007 $17,707 $18,340 $16,937 $18,516
4/30/2007 $18,372 $18,887 $17,687 $18,668
5/31/2007 $18,836 $19,119 $18,305 $18,266
6/30/2007 $18,569 $18,847 $18,001 $18,076
7/31/2007 $18,432 $18,732 $17,443 $18,646
8/31/2007 $18,790 $19,034 $17,704 $18,991
9/30/2007 $19,243 $19,481 $18,367 $19,050
10/31/2007 $19,539 $19,784 $18,659 $19,343
11/30/2007 $19,127 $19,707 $17,879 $20,380
12/31/2007 $18,971 $19,562 $17,755 $20,268
- --------------------------------------------------------------------------------
1 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.
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 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.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 7
WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (CONTINUED)
- --------------------------------------------------------------------------------
MANAGER'S DISCUSSION
FUND HIGHLIGHTS
o The Fund's solid performance outperformed its benchmark and the S&P 500
Index while lagging behind the extraordinary performance of the Lehman
Brothers 20+ Year U.S. Treasury Index.
o At the end of the period, the Fund was at a maximum equity overweighting,
with an effective target allocation of 85% stocks and 15% bonds.
o We continue to see stocks as more attractive than bonds.
THE STRESS OF THE SUBPRIME MORTGAGE AND CREDIT MARKETS WORE ON INVESTORS
THROUGHOUT THE PERIOD AND STOCKS FAILED TO HOLD THE HIGHS SEEN IN MID-OCTOBER.
The S&P 500 managed to return 5.49% for the year but struggled with many
challenges throughout the volatile period. Rising oil prices, increasing
unemployment, and a weak housing market were constantly in the headlines. Stocks
came to life with a strong second-quarter rally in 2007 that rewarded players
with a 6.28% total return on the S&P 500 Index for the quarter. The employment
picture continued to wane, however. The Fed sought to reinforce confidence in
the U.S. economy with hopes that a much-worried-about recession would be
avoided. In an effort to forestall additional slowing, the Fed acted by reducing
both the federal funds target rate and its discount rate by a larger than
expected 0.50% at its September meeting. Investor confidence returned to U.S.
equities, sparking a late third-quarter rally in 2007 that advanced stocks to
new highs in many indices. The remainder of 2007 proved challenging as financial
companies such as Citigroup and Merrill Lynch announced large quarterly losses,
costing shareholders valuable gains and chief executives their jobs. As negative
market news regularly appeared on the front page, oil prices continued to rise.
This, in turn, led to higher gasoline prices and less for consumers to spend on
other goods and services. In the end, eight of ten S&P 500 sectors ended 2007 in
positive territory on a total return basis, but the fourth quarter provided the
index with its first negative
- --------------------------------------------------------------------------------
SECTOR DISTRIBUTION 5
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
U.S. Treasury Securities (34%)
Utilities (2%)
Consumer Discretionary (6%)
Consumer Staples (7%)
Energy (8%)
Financials (12%)
Healthcare (8%)
Industrials (8%)
Information Technology (11%)
Materials (2%)
Telecommunications Services (2%)
- --------------------------------------------------------------------------------
4 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.
5 Portfolio holdings and sector distribution are subject to change. Cash and
cash equivalents are not reflected in the calculations of portfolio
holdings and sector distribution.
8 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TEN LARGEST PORTFOLIO HOLDINGS 5,6
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
U.S. Treasury Bond, 4.50%, 2/15/2036 7.18%
- --------------------------------------------------------------------------------
U.S. Treasury Bond, 6.25%, 5/15/2030 5.44%
- --------------------------------------------------------------------------------
U.S. Treasury Bond, 5.38%, 2/15/2031 5.04%
- --------------------------------------------------------------------------------
U.S. Treasury Bond, 5.00%, 5/15/2037 4.49%
- --------------------------------------------------------------------------------
U.S. Treasury Bond, 4.75%, 2/15/2037 4.36%
- --------------------------------------------------------------------------------
U.S. Treasury Bond, 5.50%, 8/15/2028 3.33%
- --------------------------------------------------------------------------------
U.S. Treasury Bond, 6.13%, 8/15/2029 3.30%
- --------------------------------------------------------------------------------
U.S. Treasury Bond, 5.25%, 2/15/2029 3.17%
- --------------------------------------------------------------------------------
U.S. Treasury Bond, 5.25%, 11/15/2028 3.02%
- --------------------------------------------------------------------------------
Exxon Mobil Corporation 2.41%
- --------------------------------------------------------------------------------
quarter since the second quarter of 2006. Treasury bond returns were positive
during the year, benefiting from their status as a safe haven during times of
turmoil. Rising unemployment, a weak housing market, and the credit disruptions
provided too much stress for investors to take on additional risk. The rally in
U.S. Treasury debt in the fourth quarter of 2007 drove longer-dated yields to
lows that had not been seen since mid-2005.
WE READJUSTED ALLOCATION ON A FEW OCCASIONS DURING THE 12-MONTH PERIOD.
The stock holdings in the Fund are indexed to the S&P 500 Index, and the bond
holdings are indexed to the Lehman Brothers 20+ Year U.S. Treasury Bond Index.
The Tactical Asset Allocation (TAA) Model, which seeks to enhance portfolio
returns by shifting assets between stocks and bonds, readjusted allocation on a
few occasions throughout the 12-month period and ended the year with a bias
toward stocks. In implementing the shift, 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. At the end of the
period, the Fund was at a maximum equity overweighting, with an effective target
allocation of 85% stocks and 15% bonds.
OUR MODELS INDICATE THAT STOCKS REMAIN COMPELLINGLY ATTRACTIVE RELATIVE TO
BONDS.
Exports are on the rise and improving our trade deficit, money supply is
increasing, and corporate balance sheets remain strong. Add a declining interest
rate environment to the equation, and we believe that this is a generally
constructive environment for equities. As a result, the Fund will remain
overweight in stocks until the relative valuation returns to a more normal
environment.
- --------------------------------------------------------------------------------
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.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 9
WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2007)
- ------------------------------------------------------------------------------------------------------------
Expense Ratio
6 Months* 1 Year 5 Year 10 Year Gross 7 Net 8
- ------------------------------------------------------------------------------------------------------------
VT Asset Allocation Fund 2.17 7.60 11.08 6.61 1.02% 1.00%
- ------------------------------------------------------------------------------------------------------------
BENCHMARKS
Asset Allocation Composite Index 1 3.79 7.40 10.27 6.94
S&P 500 Index 2 (1.37) 5.49 12.83 5.91
Lehman Brothers 20+ Year U.S. Treasury Index 3 12.13 10.15 6.02 7.32
- ------------------------------------------------------------------------------------------------------------
* Returns for periods of less than one year are not annualized.
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.
Balanced funds may invest in stocks and bonds. Stock 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, general market and economic conditions, and
changes in interest rates. In general, when interest rates rise, bond values
fall and investors may lose principal value. The use of derivatives may reduce
returns and/or increase volatility. 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.
- --------------------------------------------------------------------------------
7 Reflects the gross expense ratio as stated in the May 1, 2007, prospectus
and is based on the Fund's previous fiscal year expenses as reported in
the Financial Highlights.
8 The investment adviser has contractually committed through April 30, 2009,
to waive fees and/or reimburse expenses to the extent necessary to
maintain the net operating expense ratio shown. Without these reductions,
the Fund's returns would have been lower.
10 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 (current income and capital appreciation), consistent
with minimizing risk to principal.
INVESMTENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Cooke & Bieler, L.P.
PORTFOLIO MANAGERS
Kermit S. Eck, CFA
Daren C. Heitman, CFA
Michael M. Meyer, CFA
James R. Norris
Edward W. O'Connor, CFA
R. James O'Neil, CFA
Mehul Trivedi, CFA
FUND INCEPTION
May 1, 1998
PERFORMANCE SUMMARY
12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2007
- --------------------------------------------------------------------------------
FUND 1 YEAR
- --------------------------------------------------------------------------------
VT C&B Large Cap Value Fund (1.17)%
- --------------------------------------------------------------------------------
BENCHMARK
Russell 1000(R) Value Index 1 (0.17)%
- --------------------------------------------------------------------------------
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.
NET AND GROSS EXPENSE RATIOS FOR THE FUND ARE 1.00% AND 1.17%, RESPECTIVELY. THE
INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2009 TO WAIVE
FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET
OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS
WOULD HAVE BEEN LOWER.
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENT 2
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
WELLS FARGO ADVANTAGE VT Russell 1000(R)
C&B LARGE CAP VALUE FUND Value Index
5/1/1998 $10,000 $10,000
5/31/1998 $ 9,680 $ 9,852
6/30/1998 $ 9,739 $ 9,978
7/31/1998 $ 9,268 $ 9,801
8/31/1998 $ 8,156 $ 8,343
9/30/1998 $ 8,626 $ 8,822
10/31/1998 $ 9,199 $ 9,506
11/30/1998 $ 9,460 $ 9,949
12/31/1998 $ 9,624 $10,288
1/31/1999 $ 9,403 $10,370
2/28/1999 $ 9,161 $10,224
3/31/1999 $ 9,380 $10,436
4/30/1999 $10,188 $11,410
5/31/1999 $10,087 $11,285
6/30/1999 $10,399 $11,612
7/31/1999 $10,024 $11,272
8/31/1999 $ 9,477 $10,854
9/30/1999 $ 8,981 $10,475
10/31/1999 $ 9,285 $11,078
11/30/1999 $ 9,255 $10,992
12/31/1999 $ 9,386 $11,044
1/31/2000 $ 9,142 $10,684
2/29/2000 $ 8,715 $ 9,891
3/31/2000 $ 9,498 $11,097
4/30/2000 $ 9,284 $10,968
5/31/2000 $ 9,416 $11,084
6/30/2000 $ 9,157 $10,577
7/31/2000 $ 9,311 $10,709
8/31/2000 $ 9,974 $11,305
9/30/2000 $ 9,813 $11,409
10/31/2000 $10,048 $11,689
11/30/2000 $ 9,527 $11,256
12/31/2000 $ 9,929 $11,820
1/31/2001 $10,103 $11,865
2/28/2001 $ 9,806 $11,535
3/31/2001 $ 9,420 $11,128
4/30/2001 $ 9,953 $11,673
5/31/2001 $10,107 $11,935
6/30/2001 $ 9,824 $11,671
7/31/2001 $ 9,783 $11,646
8/31/2001 $ 9,249 $11,179
9/30/2001 $ 8,553 $10,392
10/31/2001 $ 8,738 $10,303
11/30/2001 $ 9,222 $10,901
12/31/2001 $ 9,295 $11,158
1/31/2002 $ 8,821 $11,073
2/28/2002 $ 8,769 $11,090
3/31/2002 $ 9,341 $11,615
4/30/2002 $ 8,794 $11,216
5/31/2002 $ 8,711 $11,273
6/30/2002 $ 8,157 $10,625
7/31/2002 $ 7,392 $ 9,637
8/31/2002 $ 7,423 $ 9,711
9/30/2002 $ 6,436 $ 8,631
10/31/2002 $ 6,977 $ 9,270
11/30/2002 $ 7,424 $ 9,854
12/31/2002 $ 7,056 $ 9,427
1/31/2003 $ 6,857 $ 9,199
2/28/2003 $ 6,658 $ 8,953
3/31/2003 $ 6,673 $ 8,968
4/30/2003 $ 7,197 $ 9,757
5/31/2003 $ 7,606 $10,388
6/30/2003 $ 7,745 $10,517
7/31/2003 $ 7,872 $10,674
8/31/2003 $ 7,903 $10,841
9/30/2003 $ 7,858 $10,734
10/31/2003 $ 8,292 $11,391
11/30/2003 $ 8,376 $11,546
12/31/2003 $ 8,859 $12,258
1/31/2004 $ 9,008 $12,473
2/29/2004 $ 9,253 $12,740
3/31/2004 $ 9,147 $12,629
4/30/2004 $ 8,998 $12,321
5/31/2004 $ 9,009 $12,446
6/30/2004 $ 9,151 $12,740
7/31/2004 $ 8,969 $12,561
8/31/2004 $ 9,044 $12,739
9/30/2004 $ 9,111 $12,937
10/31/2004 $ 9,176 $13,152
11/30/2004 $ 9,562 $13,817
12/31/2004 $ 9,854 $14,280
1/31/2005 $ 9,789 $14,025
2/28/2005 $10,016 $14,490
3/31/2005 $ 9,904 $14,291
4/30/2005 $ 9,720 $14,035
5/31/2005 $ 9,958 $14,374
6/30/2005 $ 9,978 $14,530
7/31/2005 $10,270 $14,950
8/31/2005 $10,075 $14,886
9/30/2005 $ 9,978 $15,094
10/31/2005 $ 9,805 $14,711
11/30/2005 $10,185 $15,192
12/31/2005 $10,160 $15,285
1/31/2006 $10,432 $15,878
2/28/2006 $10,464 $15,974
3/31/2006 $10,707 $16,190
4/30/2006 $10,980 $16,601
5/31/2006 $10,816 $16,181
6/30/2006 $10,730 $16,285
7/31/2006 $10,784 $16,681
8/31/2006 $11,156 $16,960
9/30/2006 $11,528 $17,298
10/31/2006 $11,946 $17,864
11/30/2006 $12,232 $18,272
12/31/2006 $12,407 $18,682
1/31/2007 $12,606 $18,921
2/28/2007 $12,252 $18,626
3/31/2007 $12,284 $18,914
4/30/2007 $12,793 $19,613
5/31/2007 $13,069 $20,320
6/30/2007 $12,926 $19,846
7/31/2007 $12,482 $18,928
8/31/2007 $12,438 $19,140
9/30/2007 $12,899 $19,797
10/31/2007 $13,000 $19,800
11/30/2007 $12,566 $18,832
12/31/2007 $12,261 $18,650
- --------------------------------------------------------------------------------
1 The Russell 1000 Value Index measures performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth
values. You cannot invest directly in an Index.
2 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 Value
Index. The chart assumes a hypothetical $10,000 investment and reflects
all operating expenses of the Fund.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 11
WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND (CONTINUED)
- --------------------------------------------------------------------------------
MANAGER'S DISCUSSION
FUND HIGHLIGHTS
o The Fund's return for the period was modestly negative and lagged behind
its value benchmark.
o Underweighting in commodity stocks was the key driver of underperformance.
o Relative outperformance in each of the past three quarters was not enough
to offset the Fund's poor performance during the first quarter of 2007.
PERHAPS WE COULD HAVE OWNED MORE COMMODITY STOCKS GOING INTO 2004 AND 2005 WHEN
THEY WERE CHEAP ENOUGH TO MEET OUR INVESTMENT CRITERIA, BUT GOING INTO 2007, IT
WAS VIRTUALLY IMPOSSIBLE TO OWN THEM WITHOUT COMPROMISING OUR DISCIPLINED
APPROACH TO VALUE INVESTING.
Favorable stock selection and an underweighting in financials was not quite
enough to offset the negative impact of the Fund's underweighting in commodity
stocks, which drove the market during the period. Our ability to include
commodity stocks in the Fund's portfolio is limited by our investment approach,
which is a bottom-up, stock-by-stock process that emphasizes attention to
quality, valuation discipline, and management of company-specific risks.
Commodity companies, by their very nature, usually lack discernable competitive
advantages and tend to be highly cyclical, characteristics that generally place
them on the low end of the quality spectrum. As such, for those that meet our
minimum quality threshold, our investment criteria require a steeper-than-usual
valuation discount. Such valuation discounts generally have not been available
for some time in commodity industries given their very strong performance in
2004-2005. The headwinds faced in 2007 were unavoidable. Major contributors to
the Fund's performance included Vodafone and McDonald's, while the Fund's worst
performers were Countrywide Financial and MBIA.
THE MORE CHALLENGING INVESTMENT ENVIRONMENT AND RELATED VOLATILITY CREATED THE
OPPORTUNITY FOR US TO MAKE NEW INVESTMENTS IN THE FUND DURING THE PERIOD.
Beyond adding to existing holdings, we also established new positions in Avery
Dennison, Cardinal Health, Darden Restaurants, Diebold, Kohl's, Office Depot,
and Wal-Mart Stores. To make room for these opportunities, we sold Big Lots,
Covidien, Hasbro, and Nokia because these companies had achieved their valuation
targets. Likewise, we sold
- --------------------------------------------------------------------------------
SECTOR DISTRIBUTION 3
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Consumer Discretionary (16%)
Consumer Staples (13%)
Energy (4%)
Financials (24%)
Health Care (12%)
Industrials (18%)
Information Technology (9%)
Telecommunication Services (4%)
- --------------------------------------------------------------------------------
3 Equity holdings and sector distribution are subject to change. Cash and
cash equivalents are not reflected in the calculations of equity holdings
and sector distribution.
12 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS 3,4
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
State Street Corporation 4.09%
- --------------------------------------------------------------------------------
Exxon Mobil Corporation 3.89%
- --------------------------------------------------------------------------------
American International Group Incorporated 3.51%
- --------------------------------------------------------------------------------
Omnicom Group Incorporated 3.47%
- --------------------------------------------------------------------------------
Berkshire Hathaway Incorporated Class B 3.46%
- --------------------------------------------------------------------------------
Vodafone Group plc ADR 3.36%
- --------------------------------------------------------------------------------
Microsoft Corporation 3.18%
- --------------------------------------------------------------------------------
American Express Company 3.17%
- --------------------------------------------------------------------------------
Quest Diagnostics Incorporated 3.07%
- --------------------------------------------------------------------------------
Colgate-Palmolive Company 2.86%
- --------------------------------------------------------------------------------
Freddie Mac and Williams-Sonoma as a source of cash for securities with more
appreciation. We also sold newspaper publisher Gannett because the impact of the
Internet negatively affected circulation more than we had originally projected.
This result made it difficult for us to maintain conviction in our original
thesis for owning Gannett. In addition, we sold a small number of holdings
during the period as the result of acquisitions; they included American Power
Conversion and Aramark.
WE CHALLENGE THE VIEW THAT THE GLOBAL ECONOMY HAS DECOUPLED FROM THE U.S.
ECONOMY TO THE EXTENT THAT BIG DEVELOPING COUNTRIES, SUCH AS CHINA, CAN CONTINUE
TO GROW RAPIDLY REGARDLESS OF WHAT HAPPENS IN THE UNITED STATES.
Given that our focus is on fundamentals, we do not know which way the economy
will go and never know what direction the overall stock market will take in the
short term. However, we can say that we are encouraged because investors seem to
have become less complacent about overpriced stocks and more willing to set
limits on the price that they are willing to pay for risk. The issue that still
concerns us is the view that the global economy has decoupled from the U.S.
economy. We believe that the widening acceptance of this view has led to an
increasingly bifurcated U.S. stock market. In our opinion, this point of view
feeds the perception that stocks with perceived exposure to the global
infrastructure build-up have been going up and everything else has declined. Our
sense is that the decoupling view has become a convenient way for commodity
speculators to artificially inflate prices. We understand the growing global
demand for commodities, but we think that the market is underestimating the
supply response that is under way in many of these industries. Perhaps more
importantly, it seems that the market is forgetting that commodities are also
cyclical. With the consensus view shifting toward the expectation of a U.S.
recession, traditional cyclical stocks are underperforming, but their cyclical
commodity peers continue to surge ahead. We do not think that this divergence
will continue indefinitely. When it ends, we anticipate that the Fund's relative
performance will benefit from the adjustment.
Regardless of what happens in the future, our approach will remain the same.
Through strict implementation of our high-quality, low-risk investment
philosophy, we will diligently research and carefully select attractively valued
stocks of financially strong companies with competitively advantaged businesses
that generate solid and stable free cash flows.
- --------------------------------------------------------------------------------
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.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 13
WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN 5 (%) (AS OF DECEMBER 31, 2007)
- ---------------------------------------------------------------------------------------------
Expense Ratio
6 Months* 1 Year 5 Year Life of Fund Gross 6 Net 7
- ---------------------------------------------------------------------------------------------
VT C&B Large Cap Value Fund (5.14) (1.17) 11.69 2.13 1.17% 1.00%
- ---------------------------------------------------------------------------------------------
BENCHMARK
Russell 1000 Value Index 1 (6.03) (0.17) 14.63 6.53
- ---------------------------------------------------------------------------------------------
* Returns for periods of less than one year are not annualized.
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.
Stock fund values fluctuate in response to the activities of individual
companies and general market and economic conditions. The use of derivatives may
reduce returns and/or increase volatility. 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.
- --------------------------------------------------------------------------------
5 Prior to April 11, 2005, the WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE
FUND was named the Wells Fargo Equity Value Fund.
6 Reflects the gross expense ratio as stated in the May 1, 2007, prospectus
and is based on the Fund's previous fiscal year expenses as reported in
the Financial Highlights.
7 The investment adviser has contractually committed through April 30, 2009,
to waive fees and/or reimburse expenses to the extent necessary to
maintain the net operating expense ratio shown. Without these reductions,
the Fund's returns would have been lower.
14 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT DISCOVERY FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE VT DISCOVERY FUND (the Fund) seeks long-term capital
appreciation.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
James M. Leach, CFA
Thomas J. Pence, CFA
FUND INCEPTION
May 8, 1992
PERFORMANCE SUMMARY
12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2007
- --------------------------------------------------------------------------------
FUND 1 YEAR
- --------------------------------------------------------------------------------
VT Discovery Fund 22.32%
- --------------------------------------------------------------------------------
BENCHMARK
Russell 2500(TM) Growth Index 1 9.69%
- --------------------------------------------------------------------------------
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.
NET AND GROSS EXPENSE RATIOS FOR THE FUND ARE 1.15% AND 1.21%, RESPECTIVELY. THE
INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2009 TO WAIVE
FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET
OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS
WOULD HAVE BEEN LOWER.
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENT 2
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
WELLS FARGO ADVANTAGE VT DISCOVERY FUND Russell 2500(TM) Growth Index
12/31/1997 $10,000 $10,000
1/31/1998 $ 9,900 $ 9,869
2/28/1998 $10,640 $10,717
3/31/1998 $11,122 $11,115
4/30/1998 $11,038 $11,216
5/31/1998 $10,540 $10,495
6/30/1998 $10,768 $10,572
7/31/1998 $10,262 $ 9,785
8/31/1998 $ 8,601 $ 7,562
9/30/1998 $ 8,905 $ 8,225
10/31/1998 $ 9,411 $ 8,780
11/30/1998 $ 9,891 $ 9,405
12/31/1998 $10,726 $10,310
1/31/1999 $10,802 $10,608
2/28/1999 $ 9,798 $ 9,748
3/31/1999 $ 9,638 $10,201
4/30/1999 $ 9,974 $11,015
5/31/1999 $10,004 $11,129
6/30/1999 $10,143 $11,916
7/31/1999 $ 9,647 $11,673
8/31/1999 $ 9,053 $11,421
9/30/1999 $ 8,944 $11,502
10/31/1999 $ 8,934 $12,062
11/30/1999 $ 9,707 $13,487
12/31/1999 $11,272 $16,030
1/31/2000 $10,826 $15,941
2/29/2000 $12,490 $20,030
3/31/2000 $12,589 $18,458
4/30/2000 $11,995 $16,660
5/31/2000 $12,144 $15,176
6/30/2000 $12,599 $17,183
7/31/2000 $12,867 $15,775
8/31/2000 $13,213 $17,831
9/30/2000 $12,540 $16,678
10/31/2000 $11,936 $15,646
11/30/2000 $10,955 $12,665
12/31/2000 $11,767 $13,451
1/31/2001 $12,560 $14,322
2/28/2001 $11,728 $12,112
3/31/2001 $11,420 $10,772
4/30/2001 $12,569 $12,414
5/31/2001 $12,509 $12,773
6/30/2001 $12,912 $13,063
7/31/2001 $12,200 $12,100
8/31/2001 $11,619 $11,295
9/30/2001 $10,432 $ 9,526
10/31/2001 $11,132 $10,466
11/30/2001 $11,737 $11,370
12/31/2001 $12,248 $11,994
1/31/2002 $12,212 $11,481
2/28/2002 $11,999 $10,772
3/31/2002 $12,794 $11,639
4/30/2002 $12,426 $11,253
5/31/2002 $12,366 $10,686
6/30/2002 $11,690 $ 9,704
7/31/2002 $10,847 $ 8,498
8/31/2002 $10,847 $ 8,496
9/30/2002 $10,230 $ 7,854
10/31/2002 $10,812 $ 8,305
11/30/2002 $11,370 $ 9,078
12/31/2002 $10,776 $ 8,504
1/31/2003 $10,468 $ 8,318
2/28/2003 $10,456 $ 8,124
3/31/2003 $10,586 $ 8,232
4/30/2003 $11,322 $ 8,950
5/31/2003 $12,141 $ 9,898
6/30/2003 $12,188 $10,102
7/31/2003 $13,067 $10,775
8/31/2003 $13,933 $11,353
9/30/2003 $13,470 $11,109
10/31/2003 $14,657 $12,023
11/30/2003 $14,871 $12,429
12/31/2003 $15,025 $12,443
1/31/2004 $15,571 $12,961
2/29/2004 $15,915 $13,082
3/31/2004 $15,737 $13,128
4/30/2004 $15,096 $12,571
5/31/2004 $15,416 $12,832
6/30/2004 $15,856 $13,145
7/31/2004 $14,598 $12,116
8/31/2004 $14,064 $11,873
9/30/2004 $15,120 $12,408
10/31/2004 $15,689 $12,760
11/30/2004 $16,888 $13,607
12/31/2004 $17,387 $14,258
1/31/2005 $16,663 $13,755
2/28/2005 $16,698 $14,029
3/31/2005 $16,299 $13,641
4/30/2005 $15,228 $12,904
5/31/2005 $16,593 $13,763
6/30/2005 $17,250 $14,126
7/31/2005 $18,326 $15,043
8/31/2005 $18,273 $14,871
9/30/2005 $18,772 $15,015
10/31/2005 $17,827 $14,525
11/30/2005 $18,536 $15,336
12/31/2005 $18,825 $15,424
1/31/2006 $20,269 $16,591
2/28/2006 $20,256 $16,541
3/31/2006 $20,873 $17,247
4/30/2006 $21,293 $17,300
5/31/2006 $19,809 $16,268
6/30/2006 $20,046 $16,191
7/31/2006 $19,271 $15,403
8/31/2006 $19,770 $15,772
9/30/2006 $19,928 $15,996
10/31/2006 $20,781 $16,785
11/30/2006 $21,726 $17,355
12/31/2006 $21,582 $17,316
1/31/2007 $22,422 $17,866
2/28/2007 $22,382 $17,858
3/31/2007 $22,907 $18,014
4/30/2007 $23,328 $18,567
5/31/2007 $24,942 $19,458
6/30/2007 $25,060 $19,273
7/31/2007 $24,850 $18,465
8/31/2007 $25,192 $18,748
9/30/2007 $26,793 $19,400
10/31/2007 $27,620 $20,203
11/30/2007 $26,071 $19,010
12/31/2007 $26,399 $18,994
- --------------------------------------------------------------------------------
1 The Russell 2500 Growth Index measures the performance of those Russell
2500 companies with higher price-to-book ratios and higher forecasted
growth values. You cannot invest directly in an Index.
2 The chart compares the performance of the WELLS FARGO ADVANTAGE VT
DISCOVERY FUND for the most recent ten years of the Fund with the Russell
2500 Growth Index. The chart assumes a hypothetical $10,000 investment and
reflects all operating expenses of the Fund.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 15
WELLS FARGO ADVANTAGE VT DISCOVERY FUND (CONTINUED)
- --------------------------------------------------------------------------------
MANAGER'S DISCUSSION
FUND HIGHLIGHTS
o The Fund's exceptional performance during the 12-month period outpaced its
benchmark.
o Performance strength came from Fund holdings in consumer discretionary,
industrials, and information technology.
o Detractors from Fund performance came from holdings in materials and
telecommunication services.
THE EQUITY MARKETS EXPERIENCED SIGNIFICANT VOLATILITY DURING THE YEAR AS THE
RISK ADJUSTMENT THAT BEGAN DURING THE SUMMER CONTINUED IN RESPONSE TO THE
DEEPENING TURMOIL IN THE MORTGAGE AND CREDIT MARKETS.
Investors struggled to gain clarity over the tightening credit markets,
write-downs at commercial and investment banks, and the broader implications for
overall consumer spending. Simultaneously, third-quarter profit growth in 2007
slowed more than expected, actually turning negative on a year-over-year basis.
As the housing and financial concerns continued to intensify during the year,
the divergence between the value and growth investing styles widened further,
favoring the growth style. The growth indices have significantly outperformed
the value indices for the period. As a result, several of the value indices
reported flat to negative performance for 2007. Growth stocks continued to gain
favor as investors placed a premium on companies that had the ability to exhibit
strong growth in the face of a slowing profit environment. Small and mid cap
companies, however, saw greater challenges within this environment, whereas
large cap companies with significant international exposure continued to benefit
from strong global growth. With this backdrop, rather than focusing on the
broader macroeconomic environment, we remained fully engaged in finding
companies that we believed possessed sustainable growth potential despite an
uncertain market environment.
Areas of strength during the period included holdings in the industrials,
consumer discretionary, and information technology sectors. Slightly detracting
from these solid gains were Fund holdings in the materials and telecommunication
services sectors.
- --------------------------------------------------------------------------------
SECTOR DISTRIBUTION 3
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Consumer Discretionary (13%)
Consumer Staples (1%)
Energy (10%)
Financials (7%)
Health Care (18%)
Industrials (12%)
Information Technology (30%)
Materials (2%)
Telecommunication Services (7%)
- --------------------------------------------------------------------------------
3 Equity holdings and sector distribution are subject to change. Cash and
cash equivalents are not reflected in the calculations of equity holdings
and sector distribution.
16 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT DISCOVERY FUND (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS 3,4
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
Equinix Incorporated 3.84%
- --------------------------------------------------------------------------------
BE Aerospace Incorporated 3.22%
- --------------------------------------------------------------------------------
SBA Communications Corporation 2.87%
- --------------------------------------------------------------------------------
FMC Corporation 2.37%
- --------------------------------------------------------------------------------
Spirit Aerosystems Holdings Incorporated 2.34%
- --------------------------------------------------------------------------------
NII Holdings Incorporated 2.29%
- --------------------------------------------------------------------------------
Activision Incorporated 2.24%
- --------------------------------------------------------------------------------
Assurant Incorporated 2.15%
- --------------------------------------------------------------------------------
GameStop Corporation Class A 1.98%
- --------------------------------------------------------------------------------
Newfield Exploration Company 1.96%
- --------------------------------------------------------------------------------
WE CONTINUED TO INCREASE OUR EXPOSURE TO THE INDUSTRIAL SECTOR AND DECIDED TO
HANG ON TO, BUT CLOSELY MONITOR, NII HOLDINGS, INC.
A detractor during the period was NII Holdings. After years of exceptional
performance, the wireless telecommunications company reported slightly weaker
than expected subscriber growth from its Mexico operations. As a result, many
investors chose to sell the stock based on the negative headlines. We added to
the Fund's holdings after our team collaborated on a "gang tackle" review of NII
Holdings and concluded that the issues in Mexico were likely short-term and
related primarily to transitory external factors. We acknowledge that short-term
risk is heightened, and we are closely monitoring the company. We remain focused
on the exciting future potential growth opportunity that we believe NII Holdings
has to remain the fastest growing post-paid wireless provider in Latin America.
Overall, Foster Wheeler has been a strong performer in the industrial space for
the portfolio and fits at the center of what we believe are powerful global
growth trends, particularly in oil-and-gas infrastructure and power generation.
We added to the position during the period. The firm has long-term contracts
with entities such as Saudi Aramco, and we expect it to continue to win large
contracts. About 85% of its business is international, including a significant
presence in the Middle East, India, and Southeast Asia. We have done a great
deal of research on energy companies in recent years and have focused on energy
and oilfield services companies because we believe that many are well positioned
to benefit from increased capital expenditures.
DESPITE THE DIFFICULT CONDITIONS IN THE CONSUMER AND FINANCIAL SECTORS, WE
REMAIN CAUTIOUSLY OPTIMISTIC ABOUT 2008.
We believe that the global economy will continue to grow at a healthy rate amid
strong energy and industrial demand, rising commodity prices, and emerging
market development. U.S. companies stand to benefit from these ongoing
developments, especially manufacturers of capital goods and technology products,
as well as energy service companies. These companies may also benefit from a
weaker U.S. dollar. Furthermore, as corporate earnings come under pressure due
to a slowing domestic economic environment, we expect that the companies
delivering strong earnings growth to be disproportionately rewarded in 2008. Our
investment approach is to look at companies one at a time and to
- --------------------------------------------------------------------------------
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.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 17
WELLS FARGO ADVANTAGE VT DISCOVERY FUND (CONTINUED)
- --------------------------------------------------------------------------------
invest in the ones that have our highest confidence in their ability to produce
sustainable growth. This kind of selective market has historically been
favorable for our approach to growth-stock investing.
We are convinced that by sticking to our approach of "surrounding the companies"
that we invest in, we will have the opportunity to find companies that can
deliver significant growth even in a more challenging economic environment. We
remain resolutely focused on implementing our process with discipline and
consistency.
18 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT DISCOVERY FUND (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN 5 (%) (AS OF DECEMBER 31, 2007)
- -------------------------------------------------------------------------------------------
Expense Ratio
6 Months* 1 Year 5 Year 10 Year Gross 6 Net 7
- -------------------------------------------------------------------------------------------
VT Discovery Fund 5.34 22.32 19.63 10.19 1.21% 1.15%
- -------------------------------------------------------------------------------------------
BENCHMARK
Russell 2500 Growth Index 1 (1.45) 9.69 17.43 6.63
- -------------------------------------------------------------------------------------------
* Returns for periods of less than one year are not annualized.
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.
Stock fund values fluctuate in response to the activities of individual
companies and general market and economic conditions. Smaller company stocks
tend to be more volatile and less liquid than those of larger companies. The use
of derivatives may reduce returns and/or increase volatility. Active trading
results in increased turnover and trading expenses and may generate higher
short-term capital gains. Certain investment strategies 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.
- --------------------------------------------------------------------------------
5 Performance shown prior to April 11, 2005 for the Fund reflects the
performance of the Strong Discovery Fund II.
6 Reflects the gross expense ratio as stated in the May 1, 2007, prospectus
and is based on the Fund's previous fiscal year expenses as reported in
the Financial Highlights.
7 The investment adviser has contractually committed through April 30, 2009,
to waive fees and/or reimburse expenses to the extent necessary to
maintain the net operating expense ratio shown. Without these reductions,
the Fund's returns would have been lower.
THIS PAGE IS INTENTIONALLY LEFT BLANK.
20 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 dividend income.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Gary J. Dunn, CFA
Robert M. Thornberg
FUND INCEPTION
May 6, 1996
PERFORMANCE SUMMARY
12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2007
- --------------------------------------------------------------------------------
FUND 1 YEAR
- --------------------------------------------------------------------------------
VT Equity Income Fund 2.80%
- --------------------------------------------------------------------------------
BENCHMARK
Russell 1000 Value Index 1 (0.17)%
- --------------------------------------------------------------------------------
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.
NET AND GROSS EXPENSE RATIOS FOR THE FUND ARE 1.00% AND 1.04%, RESPECTIVELY. THE
INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2009 TO WAIVE
FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET
OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS
WOULD HAVE BEEN LOWER.
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENT 2
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
WELLS FARGO ADVANTAGE
VT EQUITY INCOME FUND Russell 100(R) Value Index
12/31/1997 $10,000 $10,000
1/31/1998 $10,029 $ 9,859
2/28/1998 $10,680 $10,523
3/31/1998 $11,213 $11,166
4/30/1998 $11,323 $11,241
5/31/1998 $11,170 $11,075
6/30/1998 $11,345 $11,217
7/31/1998 $11,023 $11,018
8/31/1998 $ 9,708 $ 9,379
9/30/1998 $10,241 $ 9,917
10/31/1998 $10,958 $10,686
11/30/1998 $11,462 $11,184
12/31/1998 $11,842 $11,565
1/31/1999 $11,805 $11,657
2/28/1999 $11,812 $11,493
3/31/1999 $12,249 $11,731
4/30/1999 $12,871 $12,827
5/31/1999 $12,841 $12,685
6/30/1999 $13,352 $13,053
7/31/1999 $13,004 $12,671
8/31/1999 $12,797 $12,201
9/30/1999 $12,323 $11,775
10/31/1999 $12,656 $12,453
11/30/1999 $12,767 $12,356
12/31/1999 $12,777 $12,415
1/31/2000 $12,120 $12,011
2/29/2000 $11,185 $11,118
3/31/2000 $12,300 $12,475
4/30/2000 $12,278 $12,330
5/31/2000 $12,495 $12,459
6/30/2000 $12,199 $11,890
7/31/2000 $11,973 $12,039
8/31/2000 $12,640 $12,708
9/30/2000 $12,512 $12,825
10/31/2000 $12,865 $13,140
11/30/2000 $12,428 $12,653
12/31/2000 $13,076 $13,287
1/31/2001 $13,045 $13,337
2/28/2001 $12,668 $12,967
3/31/2001 $11,965 $12,509
4/30/2001 $12,774 $13,122
5/31/2001 $13,013 $13,417
6/30/2001 $12,636 $13,119
7/31/2001 $12,512 $13,092
8/31/2001 $12,246 $12,567
9/30/2001 $11,466 $11,682
10/31/2001 $11,602 $11,581
11/30/2001 $12,230 $12,254
12/31/2001 $12,368 $12,544
1/31/2002 $12,185 $12,447
2/28/2002 $12,272 $12,467
3/31/2002 $12,694 $13,057
4/30/2002 $12,278 $12,609
5/31/2002 $12,270 $12,672
6/30/2002 $11,614 $11,944
7/31/2002 $10,556 $10,834
8/31/2002 $10,628 $10,916
9/30/2002 $ 9,222 $ 9,702
10/31/2002 $ 9,915 $10,421
11/30/2002 $10,536 $11,078
12/31/2002 $ 9,986 $10,597
1/31/2003 $ 9,726 $10,340
2/28/2003 $ 9,434 $10,064
3/31/2003 $ 9,461 $10,081
4/30/2003 $10,226 $10,969
5/31/2003 $10,811 $11,677
6/30/2003 $11,020 $11,823
7/31/2003 $11,217 $11,999
8/31/2003 $11,268 $12,186
9/30/2003 $11,204 $12,067
10/31/2003 $11,792 $12,805
11/30/2003 $11,918 $12,980
12/31/2003 $12,603 $13,779
1/31/2004 $12,814 $14,021
2/29/2004 $13,143 $14,322
3/31/2004 $12,998 $14,197
4/30/2004 $12,795 $13,850
5/31/2004 $12,812 $13,991
6/30/2004 $13,003 $14,322
7/31/2004 $12,740 $14,120
8/31/2004 $12,851 $14,321
9/30/2004 $12,959 $14,543
10/31/2004 $13,052 $14,784
11/30/2004 $13,598 $15,532
12/31/2004 $13,999 $16,052
1/31/2005 $13,922 $15,766
2/28/2005 $14,351 $16,288
3/31/2005 $14,073 $16,065
4/30/2005 $13,806 $15,778
5/31/2005 $14,168 $16,158
6/30/2005 $14,125 $16,334
7/31/2005 $14,558 $16,806
8/31/2005 $14,463 $16,734
9/30/2005 $14,628 $16,968
10/31/2005 $14,403 $16,537
11/30/2005 $14,827 $17,078
12/31/2005 $14,752 $17,182
1/31/2006 $14,961 $17,849
2/28/2006 $15,056 $17,957
3/31/2006 $15,151 $18,200
4/30/2006 $15,561 $18,662
5/31/2006 $15,142 $18,190
6/30/2006 $15,171 $18,306
7/31/2006 $15,489 $18,751
8/31/2006 $15,858 $19,065
9/30/2006 $16,224 $19,445
10/31/2006 $16,744 $20,082
11/30/2006 $17,061 $20,540
12/31/2006 $17,488 $21,001
1/31/2007 $17,550 $21,270
2/28/2007 $17,223 $20,938
3/31/2007 $17,473 $21,262
4/30/2007 $18,157 $22,048
5/31/2007 $18,787 $22,843
6/30/2007 $18,408 $22,309
7/31/2007 $17,721 $21,277
8/31/2007 $18,044 $21,516
9/30/2007 $18,743 $22,255
10/31/2007 $18,829 $22,257
11/30/2007 $18,141 $21,170
12/31/2007 $17,978 $20,965
- --------------------------------------------------------------------------------
1 The Russell 1000 Value Index measures performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth
values. You cannot invest directly in an Index.
2 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 Value Index. The chart assumes a hypothetical $10,000 investment and
reflects all operating expenses of the Fund.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 21
WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND (CONTINUED)
- --------------------------------------------------------------------------------
MANAGER'S DISCUSSION
FUND HIGHLIGHTS
o In the midst of struggling equity markets, the Fund outperformed its
benchmark.
o Most of the Fund's relative outperformance was attributable to good stock
selection that allowed eight out of ten sectors to beat returns in the
Russell 1000 Value Index.
o It was no surprise that four of the Fund's poorest performers were in the
financial sector: Citigroup, Merrill Lynch, Capital One Financial, and
Wachovia all suffered during the period.
THE EQUITY MARKETS STRUGGLED DURING THE SECOND HALF OF THE PERIOD DUE TO
UNSETTLED FINANCIAL CONDITIONS THAT SPREAD FROM THE INITIAL SUBPRIME ARENA INTO
MANY OF THE WORLD'S LARGEST FINANCIAL INSTITUTIONS.
Volatility remained high throughout the period as evidenced by some dramatic
swings in the S&P 500 Index, including a difficult fourth quarter in 2007. While
most equity market returns were modest, value-oriented indices did not keep pace
with the more buoyant growth indices. Both the financial and consumer
discretionary sectors experienced sizable negative returns, while all other
portfolio sectors generated positive contributions.
Most of the Fund's relative outperformance was attributable to good stock
selection that allowed eight out of ten sectors to beat returns in the Russell
1000 Value Index. Financial and technology holdings were the biggest
contributors to relative Fund performance; both groups outperformed their
benchmark counterparts. In addition, the decision to underweight financials and
overweight technology added to Fund performance. The Fund's preference for
larger-capitalization market leaders with proven track records was rewarded as
the Fund's technology holdings handily outdistanced the benchmark sector.
Leaders for the Fund included Nokia, Intel, and Microsoft. With oil reaching the
$100 mark on several occasions during the period, energy stocks were once again
solid contributors to Fund performance, with utilities, telecommunications
services, and industrial stocks also performing well for the Fund.
- --------------------------------------------------------------------------------
SECTOR DISTRIBUTION 3
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Consumer Discretionary (6%)
Consumer Staples (9%)
Energy (16%)
Financials (26%)
Health Care (8%)
Industrials (10%)
Information Technology (9%)
Materials (4%)
Telecommunication Services (6%)
Utilities (6%)
- --------------------------------------------------------------------------------
3 Equity holding and sector distribution are subject to change. Cash and
cash equivalents are not reflected in the calculations of equity holdings
and sector distribution.
22 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS 3,4
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
Exxon Mobil Corporation 4.88%
- --------------------------------------------------------------------------------
Chevron Corporation 3.61%
- --------------------------------------------------------------------------------
AT&T Incorporated 3.54%
- --------------------------------------------------------------------------------
General Electric Company 3.30%
- --------------------------------------------------------------------------------
ConocoPhillips 3.26%
- --------------------------------------------------------------------------------
Bank of America Corporation 2.80%
- --------------------------------------------------------------------------------
JPMorgan Chase & Company 2.61%
- --------------------------------------------------------------------------------
Procter & Gamble Company 2.60%
- --------------------------------------------------------------------------------
Verizon Communications Incorporated 2.49%
- --------------------------------------------------------------------------------
Citigroup Incorporated 2.16%
- --------------------------------------------------------------------------------
It was no surprise that four of the Fund's poorest performers were in the
financial sector: Citigroup, Merrill Lynch, Capital One Financial, and Wachovia
all suffered during the period. Significant credit-related write-offs proved to
be the source of trouble for many of the largest financial institutions and
certainly contributed to the decline in the financial sector. While energy
holdings had a great year, offshore energy vessel provider, Tidewater, did not
keep pace with the strong returns due to several vessels being out of service.
Fortune Brands and Target Stores both struggled to grow earnings in the
softening consumer discretionary segment, though McDonald's had a stellar year.
Other notable stocks that hindered the Fund's relative performance included
Johnson & Johnson, Time Warner, and Motorola.
AS THE EQUITY MARKETS AND ECONOMIC ENVIRONMENT CHANGED THROUGHOUT THE YEAR, WE
MADE SEVERAL PORTFOLIO CHANGES INCLUDING A MOVE TO DIVERSIFY HOLDINGS AND
FURTHER MANAGE PORTFOLIO RISK.
Notable new stocks added to the Fund included Marathon Oil, Valero Energy,
Chesapeake Energy, CVS Caremark, Safeway, American Capital Strategies, Bank of
New York, Lehman Brothers, Merrill Lynch, State Street, Bristol Myers Squibb,
Merck, WellPoint, Rockwell Automation, Symantec, and Commercial Metals. The CVS
Caremark and Safeway purchases were examples of the team's continual search for
quality companies that can deliver consistent earnings growth that exceeds the
broader market yet offer attractive valuation levels. Positions eliminated from
the portfolio included Motorola, Biomet, Express Scripts, Allstate, Countrywide
Financial, Capital Source, Fifth Third, BP p.l.c., Alltel, and Windstream. The
sell discipline was triggered for both Motorola and Countrywide Financial due to
deteriorating fundamentals that appeared to be longer-term in nature.
WHILE WE EXPECT SLOWER ECONOMIC GROWTH IN 2008, IT IS QUITE POSSIBLE THAT A
RECESSION COULD BE AVERTED IF CONTINUED CREDIT EASING PROVIDES ENOUGH ECONOMIC
STIMULUS FOR THE FINANCIAL MARKETS TO ABSORB THE EXCESSES OF RECENT YEARS.
Job creation could prove to be a crucial element for positive, albeit slower
economic growth. Many factors impacting the equity markets are relatively
positive, including interest rates near four-decade lows, a relatively low
unemployment rate, and net exports that continue to expand. Most importantly,
- --------------------------------------------------------------------------------
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.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 23
WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND (CONTINUED)
- --------------------------------------------------------------------------------
the valuation of the stock market as measured by the S&P 500 Index appears
attractive. Our focus will continue to be on large-capitalization, high-quality
companies that have the potential to grow their earnings faster than the market
and their competitors yet offer attractive valuations.
24 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2007)
- ------------------------------------------------------------------------------------------
Expense Ratio
6 Months* 1 Year 5 Year 10 Year Gross 5 Net 6
- ------------------------------------------------------------------------------------------
VT Equity Income Fund (2.34) 2.80 12.48 6.04 1.04% 1.00%
- ------------------------------------------------------------------------------------------
BENCHMARKS
Russell 1000 Value Index 1 (6.03) (0.17) 14.63 7.68
- ------------------------------------------------------------------------------------------
* Returns for periods of less than one year are not annualized.
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.
Stock fund values fluctuate in response to the activities of individual
companies and general market and economic conditions. The use of derivatives may
reduce returns and/or increase volatility. 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.
- --------------------------------------------------------------------------------
5 Reflects the gross expense ratio as stated in the May 1, 2007, prospectus
and is based on the Fund's previous fiscal year expenses as reported in
the Financial Highlights.
6 The investment adviser has contractually committed through April 30, 2009,
to waive fees and/or reimburse expenses to the extent necessary to
maintain the net operating expense ratio shown. Without these reductions,
the Fund's returns would have been lower.
THIS PAGE IS INTENTIONALLY LEFT BLANK.
26 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.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
New Star Institutional Managers Limited
PORTFOLIO MANAGERS
Mark Beale
Brian Coffey
Richard Lewis
FUND INCEPTION
July 3, 2000
PERFORMANCE SUMMARY
12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2007
- --------------------------------------------------------------------------------
FUND 1 YEAR
- --------------------------------------------------------------------------------
VT International Core Fund 12.67%
- --------------------------------------------------------------------------------
BENCHMARK
MSCI EAFE Index 1 11.17%
- --------------------------------------------------------------------------------
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.
NET AND GROSS EXPENSE RATIOS FOR THE FUND ARE 1.00% AND 1.43%, RESPECTIVELY. THE
INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2009 TO WAIVE
FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET
OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS
WOULD HAVE BEEN LOWER.
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENT 2
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[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 $ 9,585
9/30/2000 $ 9,280 $ 9,119
10/31/2000 $ 9,150 $ 8,903
11/30/2000 $ 8,650 $ 8,569
12/31/2000 $ 8,967 $ 8,874
1/31/2001 $ 9,187 $ 8,869
2/28/2001 $ 8,465 $ 8,205
3/31/2001 $ 7,914 $ 7,658
4/30/2001 $ 8,315 $ 8,190
5/31/2001 $ 8,255 $ 7,901
6/30/2001 $ 8,024 $ 7,578
7/31/2001 $ 7,813 $ 7,440
8/31/2001 $ 7,594 $ 7,251
9/30/2001 $ 6,882 $ 6,517
10/31/2001 $ 7,113 $ 6,684
11/30/2001 $ 7,374 $ 6,930
12/31/2001 $ 7,524 $ 6,971
1/31/2002 $ 7,193 $ 6,601
2/28/2002 $ 7,083 $ 6,647
3/31/2002 $ 7,424 $ 7,007
4/30/2002 $ 7,424 $ 7,053
5/31/2002 $ 7,313 $ 7,142
6/30/2002 $ 6,996 $ 6,858
7/31/2002 $ 6,282 $ 6,181
8/31/2002 $ 6,232 $ 6,167
9/30/2002 $ 5,508 $ 5,505
10/31/2002 $ 5,770 $ 5,801
11/30/2002 $ 6,071 $ 6,064
12/31/2002 $ 5,800 $ 5,860
1/31/2003 $ 5,538 $ 5,615
2/28/2003 $ 5,398 $ 5,486
3/31/2003 $ 5,297 $ 5,379
4/30/2003 $ 5,770 $ 5,906
5/31/2003 $ 6,111 $ 6,264
6/30/2003 $ 6,192 $ 6,415
7/31/2003 $ 6,273 $ 6,570
8/31/2003 $ 6,444 $ 6,729
9/30/2003 $ 6,585 $ 6,936
10/31/2003 $ 6,989 $ 7,369
11/30/2003 $ 7,150 $ 7,533
12/31/2003 $ 7,624 $ 8,121
1/31/2004 $ 7,634 $ 8,236
2/29/2004 $ 7,725 $ 8,426
3/31/2004 $ 7,745 $ 8,473
4/30/2004 $ 7,483 $ 8,282
5/31/2004 $ 7,483 $ 8,310
6/30/2004 $ 7,584 $ 8,492
7/31/2004 $ 7,318 $ 8,216
8/31/2004 $ 7,307 $ 8,252
9/30/2004 $ 7,439 $ 8,468
10/31/2004 $ 7,621 $ 8,757
11/30/2004 $ 8,076 $ 9,355
12/31/2004 $ 8,359 $ 9,765
1/31/2005 $ 8,217 $ 9,586
2/28/2005 $ 8,601 $10,000
3/31/2005 $ 8,359 $ 9,749
4/30/2005 $ 8,177 $ 9,520
5/31/2005 $ 8,156 $ 9,525
6/30/2005 $ 8,278 $ 9,651
7/31/2005 $ 8,557 $ 9,947
8/31/2005 $ 8,755 $10,198
9/30/2005 $ 8,953 $10,652
10/31/2005 $ 8,692 $10,341
11/30/2005 $ 8,765 $10,594
12/31/2005 $ 9,167 $11,087
1/31/2006 $ 9,749 $11,768
2/28/2006 $ 9,643 $11,742
3/31/2006 $ 9,950 $12,129
4/30/2006 $10,363 $12,708
5/31/2006 $ 9,876 $12,215
6/30/2006 $ 9,887 $12,214
7/31/2006 $ 9,961 $12,335
8/31/2006 $10,270 $12,674
9/30/2006 $10,281 $12,694
10/31/2006 $10,624 $13,187
11/30/2006 $10,889 $13,581
12/31/2006 $11,074 $14,008
1/31/2007 $11,209 $14,102
2/28/2007 $11,333 $14,216
3/31/2007 $11,579 $14,579
4/30/2007 $11,961 $15,226
5/31/2007 $12,331 $15,493
6/30/2007 $12,499 $15,512
7/31/2007 $12,164 $15,284
8/31/2007 $12,032 $15,045
9/30/2007 $12,802 $15,850
10/31/2007 $13,332 $16,473
11/30/2007 $12,790 $15,931
12/31/2007 $12,477 $15,572
- --------------------------------------------------------------------------------
1 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.
2 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.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 27
WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (CONTINUED)
- --------------------------------------------------------------------------------
MANAGER'S DISCUSSION
FUND HIGHLIGHTS
o The Fund's solid performance outpaced its benchmark.
o As the result of close currency links to the U.S. dollar, many of the
Fund's positions in Asia benefited from declining U.S. interest rates.
o The Fund's underweight in Europe, United Kingdom, and Japan was positive
for the Fund because these markets lagged behind Asian and emerging
markets.
THE 12-MONTH PERIOD PROVED TO BE DRAMATIC FOR INTERNATIONAL INVESTORS AS EVENTS
DEVELOPED AROUND THE U.S. SUBPRIME LENDING MARKET AND THE SUBSEQUENT GLOBAL
CREDIT CRUNCH.
Markets were characterized by a series of strong gains interspersed by
stomach-churning corrections as events in credit markets unfolded and
uncertainty regarding the outlook for the global economy periodically frayed
investors' nerves. These economic events had some influence on the performance
of the Fund and have generally worked in the Fund's favor. The uncertainty has
provided a more difficult environment for risk-loving strategies and has
benefited our large-cap, high-quality investment style.
On the credit side, however, difficult financing conditions made it more
difficult for smaller companies to fuel their growth, and the private equity
community had to search for other attractive investments. In response, the Fed
began cutting key interest rates in an effort to calm the turmoil in the U.S.
credit markets and the implications for economic growth. This had a positive
influence on many of the Fund's positions in Asia, which, because of close
currency links to the U.S. dollar, benefited from declining U.S. interest rates.
Elsewhere the Fund's underweight in Europe, United Kingdom, and Japan has also
been positive for the Fund as markets here lagged Asian and emerging markets.
WE MADE SEVERAL CHANGES TO THE FUND DURING THE PERIOD. IN PARTICULAR, WE REDUCED
THE FUND'S EXPOSURE TO EUROPEAN AND UNITED KINGDOM BANKS.
We sold positions in Commerzbank of Germany, Swedebank of Sweden, and Bilbao
Vizcaya Bank of Argentina (BBVA) in Spain. We also sold HSBC Bank in the United
Kingdom. Most of these sales were implemented before the global credit crunch
took hold. The Fund's portfolio had an exposure of
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION 3
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Australia (8%)
Continental Europe (41%)
Eastern Asia (27%)
Russia (2%)
Scandinavia (3%)
Southeast Asia (1%)
United Kingdom (18%)
- --------------------------------------------------------------------------------
3 Equity holdings and portfolio composition are subject to change. Cash and
cash equivalents are not reflected in the calculations of equity holdings
and portfolio composition.
28 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS 3,4
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
Rio Tinto Limited 2.78%
- --------------------------------------------------------------------------------
Total SA 2.09%
- --------------------------------------------------------------------------------
Telefonica SA 2.00%
- --------------------------------------------------------------------------------
Roche Holding AG Genusschein 1.90%
- --------------------------------------------------------------------------------
Vodafone Group plc 1.66%
- --------------------------------------------------------------------------------
Credit Suisse Group 1.59%
- --------------------------------------------------------------------------------
GlaxoSmithKline plc 1.53%
- --------------------------------------------------------------------------------
E.ON AG 1.51%
- --------------------------------------------------------------------------------
Nokia Oyj 1.49%
- --------------------------------------------------------------------------------
Novartis AG 1.47%
- --------------------------------------------------------------------------------
4.9% versus 14.4% in the Fund's benchmark. We found Asian financials more
attractive because property in that region looked less vulnerable than elsewhere
in Europe and the United States. The Fed's lowering of U.S. interest rates was
positive for many of Asia's financial markets.
We reduced the Fund's overall exposure to financials from 30% to 22.6% during
the period and increased the Fund's exposure to materials from 3.6% to 10.5% on
a more positive outlook for pricing across much of the sector. Chinese demand in
the materials sector allowed margins to remain very healthy; consolidation also
contributed to the attractiveness of the materials sector. The largest holding
in the Fund's portfolio was Rio Tinto, which was increased from a 1% holding to
4%. Rio Tinto's growth profile is underpinning its earnings outlook, and
recently the company became the subject of a potential takeover by BHP Billiton,
underlining the attractive profile of the business.
WHILE THE OUTLOOK FOR THE GLOBAL ECONOMY LOOKS UNCERTAIN AFTER MANY YEARS OF
STRONG AND WHAT SEEMED TO BE FORESEEABLE GROWTH, IT MAY NOT BE AS DARK AS SOME
WOULD HAVE US BELIEVE.
Global liquidity conditions are supportive in the sense that the financial
authorities worldwide have communicated their willingness to cut key interest
rates in response to threats of economic instability. Global demand should
benefit from expectations of continued growth in the emerging markets. While
some may believe that the peak for corporate profitability has been reached,
picking peaks is a notoriously difficult endeavor. We strongly believe that the
profits in the banking sector of financials will be difficult to reinvigorate.
Even after severe write-downs, the recent drivers of profitability, such as
securitization and related lines of business, remain in difficulty. Commodity
and energy pricing remains robust, so profitability in these areas does not seem
to be as vulnerable as the more consumer-related industries in developed
markets. For now, cuts in U.S. interest rates seem to be benefiting Asian
stocks. Consequently, we favor these and selected opportunities in emerging
markets over potential opportunities in the United Kingdom and Japan, where
consumers seem to remain cautious and under pressure. Our focus on large-cap,
high-return companies remains, and we believe that the Fund's current
positioning is well-suited for near-term uncertainty.
- --------------------------------------------------------------------------------
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.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 29
WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN 5 (%) (AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------------------
Expense Ratio
6 Months* 1 Year 5 Year Life of Fund Gross 6 Net 7
- --------------------------------------------------------------------------------------------
VT International Core Fund (0.18) 12.67 16.56 3.00 1.43% 1.00%
- --------------------------------------------------------------------------------------------
BENCHMARK
MSCI EAFE Index 1 0.39 11.17 21.59 6.06
- --------------------------------------------------------------------------------------------
* Returns for periods of less than one year are not annualized.
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.
Stock fund values fluctuate in response to the activities of individual
companies and general market and economic conditions. Foreign investments are
especially volatile, and can rise or fall dramatically due to differences in the
political and economic conditions of the host country. These risks are generally
intensified in emerging markets. The use of derivatives may reduce returns
and/or increase volatility. Certain investment strategies tend to increase the
total risk of an investment (relative to the broader market). This Fund is
exposed to small company 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.
- --------------------------------------------------------------------------------
5 Prior to April 11, 2005, the WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE
FUND was named the Wells Fargo International Equity Fund.
6 Reflects the gross expense ratio as stated in the May 1, 2007, prospectus
and is based on the Fund's previous fiscal year expenses as reported in
the Financial Highlights.
7 The investment adviser has contractually committed through April 30, 2009,
to waive fees and/or reimburse expenses to the extent necessary to
maintain the net operating expense ratio shown. Without these reductions,
the Fund's returns would have been lower.
30 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.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Matrix Asset Advisors, Inc.
PORTFOLIO MANAGER
David A. Katz, CFA
FUND INCEPTION
April 12, 1994
PERFORMANCE SUMMARY
12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2007
- --------------------------------------------------------------------------------
FUND 1 YEAR
- --------------------------------------------------------------------------------
VT Large Company Core Fund 2.37%
- --------------------------------------------------------------------------------
BENCHMARK
S&P 500 Index 1 5.49%
- --------------------------------------------------------------------------------
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.
NET AND GROSS EXPENSE RATIOS FOR THE FUND ARE 1.00% AND 1.19%, RESPECTIVELY. THE
INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2009 TO WAIVE
FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET
OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS
WOULD HAVE BEEN LOWER.
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENT 2
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[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
12/31/1997 $10,000 $10,000
1/31/1998 $10,185 $10,111
2/28/1998 $10,733 $10,839
3/31/1998 $11,248 $11,394
4/30/1998 $11,326 $11,508
5/31/1998 $11,152 $11,311
6/30/1998 $11,694 $11,770
7/31/1998 $11,635 $11,645
8/31/1998 $10,015 $ 9,963
9/30/1998 $10,478 $10,601
10/31/1998 $11,328 $11,463
11/30/1998 $12,088 $12,157
12/31/1998 $12,881 $12,858
1/31/1999 $13,376 $13,395
2/28/1999 $12,926 $12,979
3/31/1999 $13,542 $13,498
4/30/1999 $13,953 $14,021
5/31/1999 $13,522 $13,690
6/30/1999 $14,278 $14,449
7/31/1999 $13,867 $13,999
8/31/1999 $13,886 $13,929
9/30/1999 $13,514 $13,548
10/31/1999 $14,305 $14,405
11/30/1999 $14,621 $14,698
12/31/1999 $15,511 $15,563
1/31/2000 $14,822 $14,781
2/29/2000 $14,622 $14,502
3/31/2000 $15,929 $15,919
4/30/2000 $15,350 $15,440
5/31/2000 $14,938 $15,124
6/30/2000 $15,485 $15,497
7/31/2000 $15,318 $15,255
8/31/2000 $16,278 $16,202
9/30/2000 $15,342 $15,347
10/31/2000 $14,906 $15,282
11/30/2000 $13,317 $14,078
12/31/2000 $13,402 $14,147
1/31/2001 $13,578 $14,649
2/28/2001 $12,284 $13,314
3/31/2001 $11,285 $12,471
4/30/2001 $12,199 $13,439
5/31/2001 $12,242 $13,530
6/30/2001 $11,806 $13,200
7/31/2001 $11,489 $13,070
8/31/2001 $10,559 $12,253
9/30/2001 $ 9,797 $11,264
10/31/2001 $10,120 $11,479
11/30/2001 $10,789 $12,359
12/31/2001 $10,828 $12,467
1/31/2002 $10,489 $12,285
2/28/2002 $10,151 $12,048
3/31/2002 $10,512 $12,501
4/30/2002 $10,128 $11,744
5/31/2002 $10,059 $11,658
6/30/2002 $ 9,500 $10,828
7/31/2002 $ 8,423 $ 9,984
8/31/2002 $ 8,438 $10,049
9/30/2002 $ 7,938 $ 8,958
10/31/2002 $ 8,392 $ 9,746
11/30/2002 $ 8,484 $10,319
12/31/2002 $ 8,030 $ 9,713
1/31/2003 $ 7,891 $ 9,459
2/28/2003 $ 7,853 $ 9,317
3/31/2003 $ 7,999 $ 9,406
4/30/2003 $ 8,415 $10,181
5/31/2003 $ 8,707 $10,717
6/30/2003 $ 8,715 $10,854
7/31/2003 $ 9,023 $11,046
8/31/2003 $ 9,246 $11,261
9/30/2003 $ 9,000 $11,142
10/31/2003 $ 9,624 $11,771
11/30/2003 $ 9,662 $11,875
12/31/2003 $ 9,924 $12,497
1/31/2004 $10,070 $12,727
2/29/2004 $10,124 $12,903
3/31/2004 $10,101 $12,709
4/30/2004 $ 9,939 $12,510
5/31/2004 $10,132 $12,681
6/30/2004 $10,209 $12,927
7/31/2004 $ 9,639 $12,500
8/31/2004 $ 9,539 $12,550
9/30/2004 $ 9,801 $12,686
10/31/2004 $ 9,985 $12,879
11/30/2004 $10,455 $13,400
12/31/2004 $10,755 $13,856
1/31/2005 $10,340 $13,518
2/28/2005 $10,455 $13,803
3/31/2005 $10,232 $13,559
4/30/2005 $10,070 $13,302
5/31/2005 $10,316 $13,724
6/30/2005 $10,109 $13,744
7/31/2005 $10,486 $14,255
8/31/2005 $10,162 $14,125
9/30/2005 $10,093 $14,239
10/31/2005 $ 9,993 $14,002
11/30/2005 $10,440 $14,531
12/31/2005 $10,514 $14,536
1/31/2006 $10,716 $14,921
2/28/2006 $10,700 $14,961
3/31/2006 $10,685 $15,148
4/30/2006 $10,832 $15,351
5/31/2006 $10,507 $14,910
6/30/2006 $10,282 $14,929
7/31/2006 $10,252 $15,021
8/31/2006 $10,546 $15,378
9/30/2006 $11,104 $15,774
10/31/2006 $11,662 $16,288
11/30/2006 $11,832 $16,597
12/31/2006 $12,151 $16,830
1/31/2007 $12,315 $17,084
2/28/2007 $11,964 $16,749
3/31/2007 $12,182 $16,937
4/30/2007 $13,133 $17,687
5/31/2007 $13,507 $18,305
6/30/2007 $13,414 $18,001
7/31/2007 $12,806 $17,443
8/31/2007 $12,985 $17,704
9/30/2007 $13,149 $18,367
10/31/2007 $13,196 $18,659
11/30/2007 $12,549 $17,879
12/31/2007 $12,439 $17,755
- --------------------------------------------------------------------------------
1 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.
2 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.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 31
WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND (CONTINUED)
- --------------------------------------------------------------------------------
MANAGER'S DISCUSSION
FUND HIGHLIGHTS
o The Fund's positive performance lagged behind its benchmark.
o Holdings in financial and consumer-related stocks hindered Fund
performance.
o The Fund benefited from several market trends, including the reemergence
of technology stocks, the recovery of growth stocks, and the general
revival of large and mega-cap stocks.
THE FUND HAD A MODESTLY PROFITABLE YEAR, DURING WHICH ATTRACTIVE GAINS IN THE
FIRST PART OF THE YEAR WERE ERODED BY THE DECLINES OF FINANCIAL STOCKS,
EMANATING FROM THE SUBPRIME MORTGAGE MELTDOWN DURING THE SECOND HALF OF THE
YEAR.
Early in the period, the Fund's holdings benefited from several takeovers. A
total of six mergers or acquisitions were announced or closed in the first half
of 2007, as both financial and strategic buyers acquired stocks at very
attractive prices. The second half of 2007 was dominated by fears of an economic
slowdown, particularly as the economy tried to absorb the fallout from
difficulties in the subprime mortgage market. These fears not only impacted
financial stocks, which had steep declines in the second half of the period, but
also negatively affected some consumer-related stocks.
The Fund benefited from several of the trends that Fund management had been
predicting: the reemergence of technology stocks, the recovery of growth stocks,
and the general revival of large and mega-cap stocks.
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 2007, the Fund profited from several takeovers or mergers, including American
Power Conversion, Bank of New York, Dollar General, First Data Corp., MedImmune
Inc., and Symbol Technologies.
- --------------------------------------------------------------------------------
SECTOR DISTRIBUTION 3
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Information Technology (27%)
Consumer Discretionary (11%)
Consumer Staples (4%)
Energy (12%)
Financials (21%)
Health Care (15%)
Industrials (10%)
- --------------------------------------------------------------------------------
3 Equity holdings and sector distribution are subject to change. Cash and
cash equivalents are not reflected in the calculations of equity holdings
and sector distribution.
32 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS 3,4
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
ConocoPhillips 4.42%
- --------------------------------------------------------------------------------
Covidien Limited 4.21%
- --------------------------------------------------------------------------------
Microsoft Corporation 4.19%
- --------------------------------------------------------------------------------
Western Union Company 4.07%
- --------------------------------------------------------------------------------
Wal-Mart Stores Incorporated 4.07%
- --------------------------------------------------------------------------------
Chevron Corporation 4.04%
- --------------------------------------------------------------------------------
American International Group Incorporated 3.76%
- --------------------------------------------------------------------------------
Devon Energy Corporation 3.74%
- --------------------------------------------------------------------------------
Time Warner Incorporated 3.72%
- --------------------------------------------------------------------------------
General Electric Company 3.45%
- --------------------------------------------------------------------------------
Positions in Ross Stores and Vishay Intertechnology were sold as they reached
their fair value/target sell price. We also sold the Fund's positions in Analog
Devices and Novellus Systems as they reached their fair value/target sell price,
but we reinitiated the holdings shortly after we sold them because their
valuations became attractive again.
Not all sales were successful. We purchased and sold both positions in
Progressive Corp. and H&R Block Inc. during 2007. Progressive Corp. was sold at
a small loss to take advantage of more compelling opportunities in the financial
sector. We also sold our position in H&R Block Inc. at a small loss due to
continuing deterioration of the company's balance sheet and fundamentals and
increasing uncertainty about the fallout from their mortgage operation.
In 2007, we initiated new positions in Dell, Devon Energy, McGraw Hill
Companies, Office Depot, Staples Inc., Symantec Corporation, and Taiwan
Semiconductor. We believe that each of these companies holds a leadership
position in its respective industry, and we purchased them at very attractive
valuations.
The addition of Discover Financial Services to the Fund's portfolio was the
result of a spin-off from Morgan Stanley. We believe that it is selling at a
meaningful discount to its intrinsic value.
At the very beginning of the third quarter of 2007, Tyco International, Ltd.,
split into three separate and distinct companies: Tyco International, Covidien
Ltd., and Tyco Electronics. We kept shares of all three companies and continue
to build full positions because each one fits well into our investment
philosophy, and we believe that each company was compellingly priced and
represented an undervaluation opportunity.
In early 2007, we scaled back our positions in Comcast Corp. and Merrill Lynch,
as they were approaching their fair value/target sell price. Subsequent to the
scale-back, there was a significant decline in the stock price, and we decided
to build these holdings back to a full position. The Fund's position in Johnson
& Johnson was also scaled back to take advantage of more compelling
opportunities.
We were also very active in selectively building or decreasing existing
holdings. Several stocks moved toward their fair value and we pared them back
into strength. Among these were Gap Stores, Intel, Microsoft, Teva
Pharmaceutical, and Western Union. Conversely, we increased the Fund's positions
in Analog
- --------------------------------------------------------------------------------
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.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 33
WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND (CONTINUED)
- --------------------------------------------------------------------------------
Devices, Dell, and Novellus Systems, three leading technology stocks that had
stock price reductions despite improving corporate fundamentals.
THE FUND CONTINUES TO MAINTAIN AN OPPORTUNISTIC, BARBELL-LIKE PORTFOLIO
APPROACH: ONE END OF THE BARBELL IS DOMINATED BY MULTINATIONAL, MEGA-CAP BLUE
CHIP STOCKS, AND THE OTHER END CONSISTS OF INDUSTRY LEADERS IN THE MID CAP AND
SMALLER LARGE CAP RANGE.
We believe that the multinational mega-cap blue chip companies will be able to
manage an economic slowdown and that the Fund is uniquely positioned to take
advantage of relatively strong international growth. Likewise, at the other end
of the barbell, we believe that the Fund's holdings in industry leaders among
the mid cap and smaller large-cap companies represent good positioning because
many of them are attractive acquisition candidates.
The swing last year in favor of large cap stocks over small cap stocks ended a
seven-year period of small cap domination, which we think will lead to a
multiyear period of relative success among large cap stocks. We believe that the
Fund's significant weighting to the very large companies should allow it to
benefit from what could evolve into a multiyear trend in favor of large cap
stocks. Furthermore, we have been watching for the resurgence of growth stocks
and an end to the relative dominance of value stocks over growth. That shift
occurred in 2007; the Fund holds many growth stocks (at value prices), and we
believe that it will also benefit from this continuing trend in favor of growth.
The economic outlook is cloudy as 2008 begins, and there is a fair amount of
anxiety concerning the financial markets. There is considerable concern that
high oil prices and a "tapped-out" consumer could send the economy into
recession. This would, in turn, produce further declines for the stock market.
From a macroeconomic perspective, we do not believe that the economic
environment is as negative as it is occasionally portrayed. While many signs
indicate that the economy will continue in a slow-growth mode and that it may
even slow down more than we saw in the latter half of 2007, we believe that a
severe recession is unlikely. If a recession were to materialize, we would
expect it to be mild and its duration to be short-lived. Either way, we believe
that the Fund is positioned for attractive absolute and relative returns in
2008.
In this regard, we believe that almost all of the conceivable concerns having to
do with financial institutions are already priced into their stocks and that
they have some considerable upside potential, assuming that they are perceived
as successfully handling their credit issues. Having said that, we believe that
our focus on the very large blue chip companies makes good sense in this
environment, for several reasons. First, because these companies offer the
34 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND (CONTINUED)
- --------------------------------------------------------------------------------
greatest comfort and opportunity for continued success in a slower economic
environment. Many of them are somewhat recession-proof, or at least
recession-resistant. Second, these companies are uniquely well positioned to
access international markets, many of which are experiencing faster growth than
the United States. Third, many of these companies pay very attractive dividends,
offering some comfort in a choppy economic environment. And finally, these
companies are surprisingly well priced, with attractive, even compelling
valuations when compared with the overall market and with their own historic
pricing.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 35
WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN 5 (%) (AS OF DECEMBER 31, 2007)
- -----------------------------------------------------------------------------------------------------------
Expense Ratio
6 Months* 1 Year 5 Year 10 Year Gross 6 Net 7
- -----------------------------------------------------------------------------------------------------------
VT Large Company Core Fund (7.26) 2.37 9.15 2.21 1.19% 1.00%
- -----------------------------------------------------------------------------------------------------------
BENCHMARK
S&P 500 Index 1 (1.37) 5.49 12.83 5.91
- -----------------------------------------------------------------------------------------------------------
* Returns for periods of less than one year are not annualized.
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.
Stock fund values fluctuate in response to the activities of individual
companies and general market and economic conditions. The use of derivatives may
reduce returns and/or increase volatility. Certain investment strategies 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.
- --------------------------------------------------------------------------------
5 Prior to April 11, 2005, the WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE
FUND was named the Wells Fargo Growth Fund.
6 Reflects the gross expense ratio as stated in the May 1, 2007, prospectus
and is based on the Fund's previous fiscal year expenses as reported in
the Financial Highlights.
7 The investment adviser has contractually committed through April 30, 2009,
to waive fees and/or reimburse expenses to the extent necessary to
maintain the net operating expense ratio shown. Without these reductions,
the Fund's returns would have been lower.
36 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.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Peregrine Capital Management, Inc.
PORTFOLIO MANAGERS
John S. Dale, CFA
Gary E. Nussbaum, CFA
FUND INCEPTION
September 20, 1999
PERFORMANCE SUMMARY
12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2007
- --------------------------------------------------------------------------------
FUND 1 YEAR
- --------------------------------------------------------------------------------
VT Large Company Growth Fund 7.61%
- --------------------------------------------------------------------------------
BENCHMARK
Russell 1000 Growth Index 1 11.81%
- --------------------------------------------------------------------------------
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.
NET AND GROSS EXPENSE RATIOS FOR THE FUND ARE 1.00% AND 1.04%, RESPECTIVELY. THE
INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2009 TO WAIVE
FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET
OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS
WOULD HAVE BEEN LOWER.
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENT 2
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
WELLS FARGO ADVANTAGE
VT LARGE COMPANY GROWTH FUND RUSSELL 1000(R) GROWTH INDEX
9/20/1999 $10,000 $10,000
9/30/1999 $ 9,590 $ 9,561
10/31/1999 $10,420 $10,283
11/30/1999 $10,830 $10,838
12/31/1999 $12,030 $11,965
1/31/2000 $11,800 $11,404
2/29/2000 $12,000 $11,962
3/31/2000 $13,430 $12,818
4/30/2000 $13,020 $12,208
5/31/2000 $12,200 $11,593
6/30/2000 $13,130 $12,472
7/31/2000 $13,230 $11,951
8/31/2000 $14,000 $13,033
9/30/2000 $13,150 $11,800
10/31/2000 $13,130 $11,242
11/30/2000 $12,080 $ 9,585
12/31/2000 $11,960 $ 9,282
1/31/2001 $12,150 $ 9,923
2/28/2001 $10,320 $ 8,238
3/31/2001 $ 9,260 $ 7,342
4/30/2001 $10,240 $ 8,271
5/31/2001 $10,150 $ 8,149
6/30/2001 $ 9,880 $ 7,960
7/31/2001 $ 9,700 $ 7,761
8/31/2001 $ 8,843 $ 7,126
9/30/2001 $ 8,003 $ 6,415
10/31/2001 $ 8,373 $ 6,752
11/30/2001 $ 9,353 $ 7,401
12/31/2001 $ 9,463 $ 7,387
1/31/2002 $ 9,403 $ 7,256
2/28/2002 $ 8,783 $ 6,955
3/31/2002 $ 9,193 $ 7,196
4/30/2002 $ 8,483 $ 6,608
5/31/2002 $ 8,223 $ 6,448
6/30/2002 $ 7,673 $ 5,852
7/31/2002 $ 6,932 $ 5,530
8/31/2002 $ 7,012 $ 5,547
9/30/2002 $ 6,242 $ 4,971
10/31/2002 $ 6,962 $ 5,427
11/30/2002 $ 7,422 $ 5,722
12/31/2002 $ 6,812 $ 5,327
1/31/2003 $ 6,572 $ 5,197
2/28/2003 $ 6,532 $ 5,173
3/31/2003 $ 6,622 $ 5,270
4/30/2003 $ 7,192 $ 5,659
5/31/2003 $ 7,523 $ 5,941
6/30/2003 $ 7,613 $ 6,023
7/31/2003 $ 7,993 $ 6,173
8/31/2003 $ 8,123 $ 6,327
9/30/2003 $ 7,923 $ 6,259
10/31/2003 $ 8,383 $ 6,611
11/30/2003 $ 8,353 $ 6,681
12/31/2003 $ 8,603 $ 6,912
1/31/2004 $ 8,703 $ 7,053
2/29/2004 $ 8,703 $ 7,098
3/31/2004 $ 8,583 $ 6,966
4/30/2004 $ 8,453 $ 6,885
5/31/2004 $ 8,563 $ 7,013
6/30/2004 $ 8,563 $ 7,101
7/31/2004 $ 8,053 $ 6,700
8/31/2004 $ 8,043 $ 6,667
9/30/2004 $ 8,133 $ 6,730
10/31/2004 $ 8,283 $ 6,835
11/30/2004 $ 8,633 $ 7,070
12/31/2004 $ 8,883 $ 7,347
1/31/2005 $ 8,393 $ 7,103
2/28/2005 $ 8,413 $ 7,178
3/31/2005 $ 8,193 $ 7,047
4/30/2005 $ 8,003 $ 6,913
5/31/2005 $ 8,533 $ 7,248
6/30/2005 $ 8,553 $ 7,221
7/31/2005 $ 9,149 $ 7,574
8/31/2005 $ 9,008 $ 7,477
9/30/2005 $ 8,998 $ 7,511
10/31/2005 $ 9,099 $ 7,438
11/30/2005 $ 9,590 $ 7,759
12/31/2005 $ 9,389 $ 7,735
1/31/2006 $ 9,359 $ 7,871
2/28/2006 $ 9,399 $ 7,858
3/31/2006 $ 9,520 $ 7,975
4/30/2006 $ 9,359 $ 7,963
5/31/2006 $ 8,898 $ 7,693
6/30/2006 $ 8,738 $ 7,663
7/31/2006 $ 8,377 $ 7,518
8/31/2006 $ 8,748 $ 7,752
9/30/2006 $ 9,129 $ 7,966
10/31/2006 $ 9,540 $ 8,246
11/30/2006 $ 9,640 $ 8,409
12/31/2006 $ 9,610 $ 8,438
1/31/2007 $10,001 $ 8,655
2/28/2007 $ 9,700 $ 8,492
3/31/2007 $ 9,580 $ 8,538
4/30/2007 $10,081 $ 8,940
5/31/2007 $10,431 $ 9,262
6/30/2007 $10,251 $ 9,124
7/31/2007 $ 9,940 $ 8,982
8/31/2007 $10,171 $ 9,125
9/30/2007 $10,732 $ 9,507
10/31/2007 $11,123 $ 9,831
11/30/2007 $10,572 $ 9,469
12/31/2007 $10,341 $ 9,435
- --------------------------------------------------------------------------------
1 The Russell 1000 Growth Index measures performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. You cannot invest directly in an Index.
2 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 Growth
Index. The chart assumes a hypothetical $10,000 investment and reflects
all operating expenses of the Fund.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 37
WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND (CONTINUED)
- --------------------------------------------------------------------------------
MANAGER'S DISCUSSION
FUND HIGHLIGHTS
o The Fund underperformed its Russell 1000(R) Growth Index benchmark for the
period.
o Our conscious decision to avoid energy and other commodity-related areas
contributed to the Fund's underperformance relative to its benchmark.
o Solid stock selections with good earnings growth contributed to the Fund's
performance.
GROWTH STOCKS OUTPERFORMED VALUE STOCKS FOR THE FIRST YEAR SINCE 1999, AND OUR
INVESTMENT STYLE EXPERIENCED THE "TWO STEPS FORWARD, ONE STEP BACK" EFFECT
DURING THIS TRANSITION TO GROWTH INVESTING.
The steps forward since August 2006 have been related to the general return to
growth investing and our pure focus in this arena. Stock selection has generally
been positive for the Fund's portfolio. For the most part, the steps back have
related to the market's fascination with what we would call "commodity play" and
our conscious decision to avoid energy and other commodity-related areas. Most
recently, we took a step back during the month of December 2007. Energy and
basic materials far outpaced the averages, and financials collapsed from
pressure related to subprime mortgage lending. This resulted in the Fund
returning a negative (2.1%) for December compared to the negative (0.4%) return
for the Russell 1000 Growth Index during the same one-month period. While we
believe that the Fund's path to improved relative performance is intact, the
Fund's performance for the period was disappointing relative to its benchmark,
especially with December's returns factored in.
DURING THE PERIOD, STRONG FUNDAMENTALS AND GOOD STOCK SELECTION POSITIONED THE
FUND FOR ABOVE AVERAGE EARNINGS GROWTH, WHICH WAS ACCOMPLISHED WITH MINIMAL
TURNOVER OF ABOUT 9%.
As expected, the S&P 500 Index earnings gains continued to grow at a more
moderate pace toward a 6% to 8% rate for most of 2007. The Fund's earnings
growth, however, remained well above the market averages. Measured on a
- --------------------------------------------------------------------------------
SECTOR DISTRIBUTION 3
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Consumer Discretionary (8%)
Consumer Staples (2%)
Financials (27%)
Health Care (12%)
Industrials (6%)
Information Technology (45%)
- --------------------------------------------------------------------------------
3 Equity holdings and sector distribution are subject to change. Cash and
cash equivalents are not reflected in the calculations of equity holdings
and sector distribution.
38 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS 3,4
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
Goldman Sachs Group Incorporated 15.84%
- --------------------------------------------------------------------------------
Microsoft Corporation 12.89%
- --------------------------------------------------------------------------------
Google Incorporated Class A 11.23%
- --------------------------------------------------------------------------------
Nokia Oyj ADR 11.09%
- --------------------------------------------------------------------------------
Charles Schwab Corporation 10.64%
- --------------------------------------------------------------------------------
Medtronic Incorporated 8.99%
- --------------------------------------------------------------------------------
Cisco Systems Incorporated 8.73%
- --------------------------------------------------------------------------------
eBay Incorporated 7.71%
- --------------------------------------------------------------------------------
Target Corporation 6.58%
- --------------------------------------------------------------------------------
Paychex Incorporated 6.30%
- --------------------------------------------------------------------------------
conservative basis, the Fund's earnings growth will likely be in the 16% to 18%
range for 2007. Highlights included Google, eBay, Intel, and Nokia all having
operating earnings gains in excess of 40% for the year. Goldman Sachs, Genzyme,
and Genentech had earnings gains above 25%. Our retailers, as a group, had
disappointing single-digit earnings growth for the year. Overall, two-thirds of
the portfolio by weight will likely have earnings gains in excess of 15%.
THE BEST TIME HISTORICALLY TO INVEST IN EQUITIES IS WHEN THEY ARE CLIMBING A
"WALL OF WORRY."
The market recently began reacting with fear and trepidation. The fear today is
related to a potential deep consumer- led recession. While the economy has been
slowing, we believe that the makings for a deep and devastating recession simply
do not exist.
The market's valuation is very attractive, as earnings growth within the S&P 500
Index has moderated toward its historical trend line. The market's
price-to-earnings (P/E) structure has also self-regulated to a very reasonable
level. The market is attractive relative to historic norms. Within the market,
there are pockets of over- and undervaluation. The best valuation opportunities
are available in the highest-quality, fastest-growing segments of the market.
As was the case in prior cycles seen in 1989 and in 1995, the Fund is likely to
experience two steps forward and one step back. The factors of fundamentals,
valuation, and investor psychology are all headed in the right direction. We
believe that the Fund's portfolio earnings growth will very likely remain strong
and well above the market's rate during the coming year. The Fund's portfolio's
valuation is in line with the general market's valuation, despite the style's
much higher growth and quality profile. Investors are beginning to migrate
toward these stocks, and we believe that this will pick up momentum as time
progresses.
- --------------------------------------------------------------------------------
4 The ten largest equity holdings are calculated based on the market value
of the securities divided by total market value of the portfolio.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 39
WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2007)
- ------------------------------------------------------------------------------------------------
Expense Ratio
6 Months* 1 Year 5 Year Life of Fund Gross 5 Net 6
- ------------------------------------------------------------------------------------------------
VT Large Company Growth Fund 0.88 7.61 8.71 0.41 1.04% 1.00%
- ------------------------------------------------------------------------------------------------
BENCHMARK
Russell 1000 Growth Index 1 3.41 11.81 12.11 (0.76)
- ------------------------------------------------------------------------------------------------
* Returns for periods of less than one year are not annualized.
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.
Stock fund values fluctuate in response to the activities of individual
companies and general market and economic conditions. The use of derivatives may
reduce returns and/or increase volatility. Certain investment strategies 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.
- --------------------------------------------------------------------------------
5 Reflects the gross expense ratio as stated in the May 1, 2007, prospectus
and is based on the Fund's previous fiscal year expenses as reported in
the Financial Highlights.
6 The investment adviser has contractually committed through April 30, 2009,
to waive fees and/or reimburse expenses to the extent necessary to
maintain the net operating expense ratio shown. Without these reductions,
the Fund's returns would have been lower.
40 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.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGER
David D. Sylvester
FUND INCEPTION
May 19, 1994
PERFORMANCE SUMMARY
12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2007
- --------------------------------------------------------------------------------
FUND 1 YEAR
- --------------------------------------------------------------------------------
VT Money Market Fund 4.68%
- --------------------------------------------------------------------------------
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. YIELDS WILL FLUCTUATE. THE
FUND'S YIELD FIGURES MORE CLOSELY REFLECT THE CURRENT EARNINGS OF THE FUND THAN
THE TOTAL RETURN FIGURES. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE
PERFORMANCE DATA QUOTED. CURRENT 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.
- --------------------------------------------------------------------------------
FUND YIELD SUMMARY
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
7-Day Current Yield 4.36%
- --------------------------------------------------------------------------------
7-Day Effective Yield 4.45%
- --------------------------------------------------------------------------------
30-Day Simple Yield 4.30%
- --------------------------------------------------------------------------------
30-Day Effective Yield 4.39%
- --------------------------------------------------------------------------------
Performance Highlights Wells Fargo Advantage Variable Trust Funds 41
WELLS FARGO ADVANTAGE VT MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
MANAGER'S DISCUSSION
FUND HIGHLIGHTS
o The Fund had solid performance in a decreasing rate environment.
o A general decline in liquidity raised a caution flag for banks and
investors alike.
o Liquidity in the Fund was increased as general market conditions
deteriorated.
THE MOST SIGNIFICANT FACTOR AFFECTING THE FUND IN 2007 WAS THE LIQUIDITY CRISIS
THAT HIT THE MONEY MARKET SECTOR MID-SUMMER.
A general decline in liquidity gripped short-term credit markets following
downgrades by rating agencies of structured mortgage products and the extension
of several extendible commercial paper programs. This led the Fed to ease the
overnight funding target rate of 5.25% to 4.75% in September. However,
short-term LIBOR (London Interbank Offered Rate) rates remained elevated, as
banks showed caution in lending to each other. The dichotomy between funding
rates and LIBOR (London Interbank Offered Rate) continued until year-end, even
as the Fed decreased the target rate by 25 basis points (100 basis points equals
1.00%) at each of its next two FOMC (Federal Open Market Committee) meetings.
The difference between the effective overnight federal funds rate and the
one-month LIBOR rate averaged 45 basis points between August 1 and December 31,
2007. This was unusual because the relationship between the two rates is usually
closer to zero when the Fed is lowering rates.
WE MADE SEVERAL STRATEGIC MOVES TO PROTECT THE FUND'S YIELD IN A DECREASING RATE
ENVIRONMENT.
Because rates were generally stable during the first half of 2007, the portfolio
was positioned with fewer very-short-term instruments so that it could take
advantage of the positive yield curve. The percentage of the Fund maturing
within 14 days was 45% for the first seven months of the year. Liquidity in the
Fund was increased as general market conditions deteriorated. Very short term
assets were increased by 5% in August and by another 5% in November to ensure
liquidity through year-end.
- --------------------------------------------------------------------------------
PORTFOLIO ALLOCATION 1
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
2-14 Days (54%)
15-29 Days (28%)
30-59 Days (10%)
60-89 Days (5%)
90-179 Days (3%)
- --------------------------------------------------------------------------------
1 Portfolio allocation and maturity distribution are subject to change.
42 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MATURITY DISTRIBUTION 1
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
2-14 Days (54%)
15-29 Days (28%)
30-59 Days (10%)
60-89 Days (5%)
90-179 Days (3%)
Floating-rate notes remained an integral part of the Fund's portfolio
composition with a weighting that ranged between 25% and 30%. During the year,
we gradually increased the Fund's holdings in floating-rate notes that reset
quarterly and decreased holdings in those that reset monthly. The less-frequent
resets help to protect the portfolio yield in a decreasing rate environment.
CONDITIONS IN THE FINANCIAL MARKET HAVE SPILLED OVER TO THE POINT OF AFFECTING
ECONOMIC GROWTH.
We believe that the Fed will continue to lower rates until prospects for growth
stabilize, which may take several months. Therefore, while we continue to manage
the Fund to maintain liquidity and preservation of principal, we will seek
opportunities to modestly extend the Fund's average maturity.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 43
WELLS FARGO ADVANTAGE VT MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
6 Months* 1 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
VT Money Market Fund 2.31 4.68 2.55 3.26
- --------------------------------------------------------------------------------
* Returns for periods of less than one year are not annualized.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. YIELDS WILL FLUCTUATE. THE
FUND'S YIELD FIGURES MORE CLOSELY REFLECT THE CURRENT EARNINGS OF THE FUND THAN
THE TOTAL RETURN FIGURES. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE
PERFORMANCE DATA QUOTED. CURRENT 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.
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 a money market 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.
44 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (the Fund) seeks long-term capital
appreciation.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Ann M. Miletti
Richard T. Weiss
FUND INCEPTION
May 8, 1992
PERFORMANCE SUMMARY
12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2007
- --------------------------------------------------------------------------------
FUND 1-YEAR
- --------------------------------------------------------------------------------
VT Opportunity Fund 6.63%
- --------------------------------------------------------------------------------
BENCHMARK
Russell Midcap Index 1 5.60%
- --------------------------------------------------------------------------------
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.
NET AND GROSS EXPENSE RATIOS FOR THE FUND ARE 1.07% AND 1.18%, RESPECTIVELY. THE
INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2009 TO WAIVE
FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET
OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS
WOULD HAVE BEEN LOWER.
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENT 2
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
WELLS FARGO ADVANTAGE
VT OPPORTUNITY FUND Russell Midcap(R) Index
12/31/1997 $10,000 $10,000
1/31/1998 $ 9,986 $ 9,812
2/28/1998 $10,788 $10,579
3/31/1998 $11,420 $11,081
4/30/1998 $11,675 $11,108
5/31/1998 $11,242 $10,764
6/30/1998 $11,342 $10,913
7/31/1998 $10,945 $10,393
8/31/1998 $ 9,067 $ 8,731
9/30/1998 $ 9,683 $ 9,296
10/31/1998 $10,554 $ 9,929
11/30/1998 $10,851 $10,400
12/31/1998 $11,354 $11,009
1/31/1999 $11,720 $10,991
2/28/1999 $11,375 $10,625
3/31/1999 $11,876 $10,958
4/30/1999 $12,854 $11,767
5/31/1999 $12,978 $11,734
6/30/1999 $13,591 $12,147
7/31/1999 $13,662 $11,814
8/31/1999 $13,113 $11,508
9/30/1999 $12,990 $11,103
10/31/1999 $13,744 $11,630
11/30/1999 $14,216 $11,964
12/31/1999 $15,318 $13,017
1/31/2000 $14,864 $12,586
2/29/2000 $15,123 $13,553
3/31/2000 $16,679 $14,330
4/30/2000 $16,361 $13,651
5/31/2000 $16,473 $13,290
6/30/2000 $15,942 $13,683
7/31/2000 $15,754 $13,529
8/31/2000 $16,826 $14,826
9/30/2000 $16,208 $14,615
10/31/2000 $16,308 $14,389
11/30/2000 $15,247 $13,094
12/31/2000 $16,328 $14,091
1/31/2001 $17,324 $14,317
2/28/2001 $16,308 $13,446
3/31/2001 $15,516 $12,612
4/30/2001 $16,669 $13,690
5/31/2001 $16,758 $13,945
6/30/2001 $16,335 $13,814
7/31/2001 $16,103 $13,419
8/31/2001 $15,155 $12,903
9/30/2001 $13,061 $11,347
10/31/2001 $13,839 $11,796
11/30/2001 $15,107 $12,785
12/31/2001 $15,723 $13,298
1/31/2002 $15,562 $13,219
2/28/2002 $15,198 $13,078
3/31/2002 $15,982 $13,863
4/30/2002 $15,133 $13,594
5/31/2002 $15,028 $13,440
6/30/2002 $13,339 $12,539
7/31/2002 $11,819 $11,315
8/31/2002 $11,827 $11,377
9/30/2002 $10,477 $10,328
10/31/2002 $11,148 $10,850
11/30/2002 $12,352 $11,603
12/31/2002 $11,507 $11,146
1/31/2003 $11,158 $10,920
2/28/2003 $11,108 $10,776
3/31/2003 $11,009 $10,882
4/30/2003 $12,013 $11,673
5/31/2003 $13,216 $12,741
6/30/2003 $13,365 $12,870
7/31/2003 $13,796 $13,294
8/31/2003 $14,452 $13,871
9/30/2003 $14,170 $13,697
10/31/2003 $14,974 $14,743
11/30/2003 $15,207 $15,156
12/31/2003 $15,765 $15,611
1/31/2004 $16,429 $16,064
2/29/2004 $16,711 $16,410
3/31/2004 $16,620 $16,414
4/30/2004 $16,387 $15,811
5/31/2004 $16,769 $16,203
6/30/2004 $17,151 $16,651
7/31/2004 $16,587 $15,923
8/31/2004 $16,321 $15,992
9/30/2004 $16,952 $16,511
10/31/2004 $17,226 $16,967
11/30/2004 $18,089 $18,001
12/31/2004 $18,637 $18,767
1/31/2005 $18,098 $18,302
2/28/2005 $18,280 $18,868
3/31/2005 $18,073 $18,719
4/30/2005 $17,467 $18,122
5/31/2005 $18,380 $18,990
6/30/2005 $18,753 $19,501
7/31/2005 $19,882 $20,529
8/31/2005 $19,658 $20,385
9/30/2005 $19,667 $20,656
10/31/2005 $19,152 $20,036
11/30/2005 $19,932 $20,926
12/31/2005 $20,107 $21,142
1/31/2006 $21,036 $22,228
2/28/2006 $20,713 $22,202
3/31/2006 $21,045 $22,752
4/30/2006 $21,609 $22,911
5/31/2006 $20,787 $22,139
6/30/2006 $20,422 $22,166
7/31/2006 $19,990 $21,681
8/31/2006 $20,619 $22,231
9/30/2006 $21,286 $22,634
10/31/2006 $21,802 $23,525
11/30/2006 $22,516 $24,372
12/31/2006 $22,563 $24,370
1/31/2007 $23,071 $25,193
2/28/2007 $22,939 $25,234
3/31/2007 $23,390 $25,436
4/30/2007 $24,141 $26,405
5/31/2007 $25,156 $27,401
6/30/2007 $24,949 $26,783
7/31/2007 $24,137 $25,786
8/31/2007 $24,115 $25,830
9/30/2007 $24,978 $26,680
10/31/2007 $25,272 $27,110
11/30/2007 $24,213 $25,816
12/31/2007 $24,060 $25,734
- --------------------------------------------------------------------------------
1 The Russell Midcap Index measures the performance of the 800 smallest
companies in the Russell 1000 Index, which represent approximately 25% of
the total market capitalization of the Russell 1000 Index. You cannot
invest directly in an Index.
2 The chart compares the performance of the WELLS FARGO ADVANTAGE VT
OPPORTUNITY FUND for the most recent ten years of the Fund with the
Russell Midcap Index. The chart assumes a hypothetical $10,000 investment
and reflects all operating expenses of the Fund.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 45
WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (CONTINUED)
- --------------------------------------------------------------------------------
MANAGER'S DISCUSSION
FUND HIGHLIGHTS
o The Fund's solid performance outpaced its benchmark.
o Holdings in the energy and information technology sectors benefited Fund
performance. The Fund's underweight exposure to the financial sector also
benefited its relative performance.
o Holdings in the industrial sector were the largest detractors from the
Fund's relative performance due to its underweight exposure in two areas:
construction and engineering and aerospace and defense.
THE FUND'S HOLDINGS IN THE ENERGY SECTOR WERE THE TOP CONTRIBUTORS TO
PERFORMANCE DURING YEAR, AS THE COMPANIES IN THIS SECTOR CONTINUED TO BENEFIT
FROM AN IMBALANCE BETWEEN STRONG DEMAND AND LIMITED SUPPLY.
Information technology was another sector that contributed smartly to
performance. The Fund's holdings within the technology sector benefited from
company-specific dealings rather than a broad secular theme. The Fund's
underweight exposure to the financial sector, which had been a headwind the past
few years, was also beneficial to relative performance. Even with the recent
turmoil in this sector, we have continued to find a limited number of companies
trading at attractive discounts to our private market valuations (PMV). (PMV is
the value an investor would pay to own the entire company.)
The industrial sector was the largest detractor from the Fund's relative
performance due to its underweight exposure in two areas: construction and
engineering and aerospace and defense, all of which did well during the period.
The Fund's underweight exposure to the utility sector was also a headwind for
the portfolio because the sector continued to benefit from relatively low
interest rates. Media was another area of relative underperformance for the
Fund, as concerns about the macro environment and competitive dynamics in the
industry weighed on some of the Fund's holdings.
- --------------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS 3,4
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
Transocean Incorporated 17.01%
- --------------------------------------------------------------------------------
Weatherford International Limited 15.82%
- --------------------------------------------------------------------------------
Toronto-Dominion Bank 12.23%
- --------------------------------------------------------------------------------
Praxair Incorporated 11.96%
- --------------------------------------------------------------------------------
Waters Corporation 9.36%
- --------------------------------------------------------------------------------
Accenture Limited Class A 6.80%
- --------------------------------------------------------------------------------
MEMC Electronic Materials Incorporated 6.79%
- --------------------------------------------------------------------------------
Red Hat Incorporated 6.74%
- --------------------------------------------------------------------------------
Chesapeake Energy Corporation 6.66%
- --------------------------------------------------------------------------------
Stapeles Incorporated 6.63%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3 Equity holdings and sector distribution are subject to change. Cash and
cash equivalents are not reflected in the calculations of 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.
46 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTOR DISTRIBUTION 3
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Information Technology (22%)
Materials (6%)
Consumer Discretionary (21%)
Consumer Staples (3%)
Health Care (13%)
Financials (13%)
Energy (12%)
Industrials (10%)
OUR METHODOLOGY INCLUDES 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 be patient with stocks that are out of favor with
the market, an approach that seems to be at odds with investor sentiment because
the recent volatility in the market seems to have increased investor focus on
the short term rather than the long term. Consequently, we have continued to
trim exposure from many of the Fund's energy holdings, as these holdings
continued to outperform while becoming a more noticeable piece of the market. We
also decreased the Fund's exposure to the technology sector, as a few of our
holdings reached what we believed to be full valuation. And, although the
consumer staples sector is still a relatively small part of the portfolio, we
did increase the Fund's number of holdings in it. The remaining sector
weightings were fairly consistent throughout the 12-month period. The Fund was
overweighted in the technology, consumer discretionary, and energy sectors while
being underweighted in the financial, utility, and industrial sectors.
EVEN WITH RECENT MARKET TURBULENCE, EQUITY MARKETS HAVE PRODUCED RELATIVELY
IMPRESSIVE RESULTS DURING THE PAST 12 MONTHS.
A combination of relatively low borrowing costs, better-than-expected economic
data, and, thus far, relatively benign inflation data have been positive for the
market. As we get further into the cycle, the investment landscape and investor
expectations appear to be more uncertain, and many of the recent secular
tailwinds may be reversing course. Companies that may have been supported by an
easier credit environment or overly optimistic growth expectations will likely
face an increased amount of pressure until expectations are fully reset. Our
fundamental, bottom-up process of identifying companies that have solid business
models and strong management teams--and that trade at a discount to our
perceived PMV--will continue to help guide us in our decision-making process.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 47
WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN 5 (%) (AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
Expense Ratio
6 Months* 1 Year 5 Year 10 Year Gross 6 Net 7
- --------------------------------------------------------------------------------
VT Opportunity Fund (SM) (3.56) 6.63 15.90 9.18 1.18% 1.07%
- --------------------------------------------------------------------------------
BENCHMARKS
Russell Midcap Index 1 (3.92) 5.60 18.21 9.91
- --------------------------------------------------------------------------------
* Returns for periods of less than one year are not annualized.
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.
Stock fund values fluctuate in response to the activities of individual
companies and general market and economic conditions. Smaller company stocks
tend to be more volatile and less liquid than those of larger companies. The use
of derivatives may reduce returns and/or increase volatility. Certain investment
strategies 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.
- --------------------------------------------------------------------------------
5 Performance shown prior to April 11, 2005 for the Fund reflects the
performance of the Investor Class shares of the Strong Opportunity Fund
II.
6 Reflects the gross expense ratio as stated in the May 1, 2007, prospectus
and is based on the Fund's previous fiscal year expenses as reported in
the Financial Highlights.
7 The investment adviser has contractually committed through April 30, 2009,
to waive fees and/or reimburse expenses to the extent necessary to
maintain the net operating expense ratio shown. Without these reductions,
the Fund's returns would have been lower.
48 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.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Jerome "Cam" Philpott, CFA
Stuart Roberts
FUND INCEPTION
May 1, 1995
PERFORMANCE SUMMARY
12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2007
- --------------------------------------------------------------------------------
FUND 1 YEAR
- --------------------------------------------------------------------------------
VT Small Cap Growth Fund 13.81%
- --------------------------------------------------------------------------------
BENCHMARK
Russell 2000 Growth Index 1 7.06%
- --------------------------------------------------------------------------------
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.
NET AND GROSS EXPENSE RATIOS FOR THE FUND ARE 1.20% AND 1.23%, RESPECTIVELY. THE
INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2009 TO WAIVE
FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET
OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS
WOULD HAVE BEEN LOWER.
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENT 2
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
WELLS FARGO ADVANTAGE VT SMALL Russell 2000(R)
CAP GROWTH FUND Growth Index
12/31/1997 $10,000 $10,000
1/31/1998 $ 9,765 $ 9,867
2/28/1998 $10,690 $10,738
3/31/1998 $10,987 $11,188
4/30/1998 $11,011 $11,257
5/31/1998 $10,212 $10,439
6/30/1998 $10,298 $10,546
7/31/1998 $ 9,201 $ 9,665
8/31/1998 $ 7,061 $ 7,434
9/30/1998 $ 7,422 $ 8,188
10/31/1998 $ 7,735 $ 8,615
11/30/1998 $ 8,190 $ 9,283
12/31/1998 $ 8,553 $10,123
1/31/1999 $ 8,285 $10,578
2/28/1999 $ 7,507 $ 9,611
3/31/1999 $ 7,342 $ 9,953
4/30/1999 $ 7,759 $10,832
5/31/1999 $ 7,743 $10,849
6/30/1999 $ 8,144 $11,420
7/31/1999 $ 8,136 $11,067
8/31/1999 $ 8,191 $10,653
9/30/1999 $ 8,505 $10,859
10/31/1999 $ 9,755 $11,137
11/30/1999 $11,390 $12,315
12/31/1999 $14,220 $14,485
1/31/2000 $14,535 $14,350
2/29/2000 $18,111 $17,689
3/31/2000 $15,777 $15,830
4/30/2000 $13,851 $14,231
5/31/2000 $12,381 $12,985
6/30/2000 $15,376 $14,663
7/31/2000 $14,456 $13,406
8/31/2000 $16,355 $14,816
9/30/2000 $15,992 $14,080
10/31/2000 $13,772 $12,937
11/30/2000 $10,292 $10,588
12/31/2000 $11,009 $11,236
1/31/2001 $11,137 $12,146
2/28/2001 $ 8,846 $10,481
3/31/2001 $ 7,562 $ 9,528
4/30/2001 $ 8,803 $10,694
5/31/2001 $ 8,814 $10,942
6/30/2001 $ 9,026 $11,240
7/31/2001 $ 8,464 $10,282
8/31/2001 $ 7,796 $ 9,639
9/30/2001 $ 6,438 $ 8,084
10/31/2001 $ 7,191 $ 8,862
11/30/2001 $ 7,743 $ 9,602
12/31/2001 $ 8,326 $10,199
1/31/2002 $ 7,912 $ 9,836
2/28/2002 $ 7,212 $ 9,200
3/31/2002 $ 7,827 $ 9,999
4/30/2002 $ 7,467 $ 9,783
5/31/2002 $ 7,021 $ 9,211
6/30/2002 $ 6,417 $ 8,430
7/31/2002 $ 5,208 $ 7,134
8/31/2002 $ 5,186 $ 7,131
9/30/2002 $ 4,762 $ 6,616
10/31/2002 $ 5,133 $ 6,951
11/30/2002 $ 5,515 $ 7,640
12/31/2002 $ 5,144 $ 7,113
1/31/2003 $ 4,932 $ 6,920
2/28/2003 $ 4,836 $ 6,735
3/31/2003 $ 4,858 $ 6,837
4/30/2003 $ 5,356 $ 7,484
5/31/2003 $ 5,802 $ 8,327
6/30/2003 $ 6,014 $ 8,488
7/31/2003 $ 6,300 $ 9,130
8/31/2003 $ 6,597 $ 9,620
9/30/2003 $ 6,396 $ 9,376
10/31/2003 $ 7,032 $10,187
11/30/2003 $ 7,255 $10,519
12/31/2003 $ 7,318 $10,566
1/31/2004 $ 7,732 $11,121
2/29/2004 $ 7,743 $11,103
3/31/2004 $ 7,955 $11,155
4/30/2004 $ 7,583 $10,595
5/31/2004 $ 7,870 $10,806
6/30/2004 $ 7,986 $11,166
7/31/2004 $ 7,085 $10,164
8/31/2004 $ 6,788 $ 9,945
9/30/2004 $ 7,233 $10,495
10/31/2004 $ 7,456 $10,750
11/30/2004 $ 7,806 $11,658
12/31/2004 $ 8,326 $12,077
1/31/2005 $ 7,965 $11,533
2/28/2005 $ 7,849 $11,691
3/31/2005 $ 7,690 $11,253
4/30/2005 $ 7,255 $10,537
5/31/2005 $ 7,721 $11,280
6/30/2005 $ 8,061 $11,644
7/31/2005 $ 8,612 $12,458
8/31/2005 $ 8,538 $12,283
9/30/2005 $ 8,644 $12,380
10/31/2005 $ 8,411 $11,923
11/30/2005 $ 8,973 $12,598
12/31/2005 $ 8,846 $12,579
1/31/2006 $ 9,514 $13,792
2/28/2006 $ 9,779 $13,719
3/31/2006 $10,352 $14,385
4/30/2006 $10,606 $14,344
5/31/2006 $10,023 $13,334
6/30/2006 $ 9,906 $13,342
7/31/2006 $ 9,354 $12,649
8/31/2006 $ 9,703 $13,020
9/30/2006 $ 9,746 $13,108
10/31/2006 $10,411 $13,957
11/30/2006 $10,760 $14,291
12/31/2006 $10,858 $14,257
1/31/2007 $11,120 $14,523
2/28/2007 $11,251 $14,477
3/31/2007 $11,382 $14,611
4/30/2007 $11,545 $14,994
5/31/2007 $12,341 $15,678
6/30/2007 $12,581 $15,589
7/31/2007 $12,052 $14,780
8/31/2007 $12,307 $15,152
9/30/2007 $12,753 $15,592
10/31/2007 $13,378 $16,294
11/30/2007 $12,294 $15,168
12/31/2007 $12,358 $15,264
- --------------------------------------------------------------------------------
1 The Russell 2000 Growth Index measures the performance shown of those
Russell 2000 companies with higher price-to-book ratios and higher
forecasted growth values. You cannot invest directly in an Index.
2 The chart compares the performance of the WELLS FARGO ADVANTAGE VT SMALL
CAP GROWTH FUND for the most recent ten years with the Russell 2000 Growth
Index. The chart assumes a hypothetical $10,000 investment and reflects
all operating expenses of the Fund.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 49
WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (CONTINUED)
- --------------------------------------------------------------------------------
MANAGER'S DISCUSSION
FUND HIGHLIGHTS
o The Fund's solid performance significantly outpaced its benchmark.
o Holdings in the information technology sector outperformed due to strong
stock selection and an overweight position.
o The Fund's underweight position in energy hindered relative performance.
THE THREE TOP-PERFORMING SECTORS FOR THE FUND WERE INFORMATION TECHNOLOGY,
CONSUMER DISCRETIONARY, AND FINANCIALS.
Fund holdings in the information technology sector outperformed due to strong
stock selection and an overweight position. Specifically, aQuantive, ValueClick,
and Taleo were top contributors in information technology. Digital marketing
company aQuantive was the second best performer in the Fund for the 12-month
period. We have previously expressed optimism in regards to the growth in
Internet advertising, and aQuantive's 42% organic growth rate in revenues in
early 2007 clearly illustrated the company's success in that market. Following
aQuantive's first-quarter report, Microsoft acquired the company at an
astonishing 85% premium. We sold the entire position following that news.
ValueClick, an online advertising agency, was another top IT performer. The
company reported revenue growth significantly above analysts' estimates, and the
shares appreciated sharply. We sold a considerable portion of this position into
the upward move.
In the consumer discretionary sector, many holdings contributed to excellent
absolute and relative performance. Several of the better performing stocks
included Priceline.com, an online travel company, VistaPrint Limited, an online
supplier of graphic design services, and Shutterfly, an online photography
company. Priceline.com was the single best performer in the Fund. It had strong
stock performance as the result of accelerated growth in international markets
and stable growth in the United States. Shutterfly was also a top contributor as
the company's efforts to build revenues outside the holiday season are bearing
fruit, and the company recently signed a distribution agreement with Target
Stores that enables customers to retrieve their online orders at any local
Target store.
- --------------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS 3,4
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
FTI Consulting Incorporated 13.12%
- --------------------------------------------------------------------------------
VistaPrint Limited 12.76%
- --------------------------------------------------------------------------------
SkillSoft plc ADR 10.05%
- --------------------------------------------------------------------------------
inVentive Health Incorporated 9.99%
- --------------------------------------------------------------------------------
Resources Connection Incorporated 9.50%
- --------------------------------------------------------------------------------
Shutterfly Incorporated 9.49%
- --------------------------------------------------------------------------------
Sciele Pharma Incorporated 9.26%
- --------------------------------------------------------------------------------
GSI Commerce Incorporated 8.92%
- --------------------------------------------------------------------------------
Microsemi Corporation 8.69%
- --------------------------------------------------------------------------------
Sykes Enterprises Incorporated 8.22%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3 Equity holdings and sector distribution and are subject to change. Cash
and cash equivalents are not reflected in the calculations of 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 fund.
50 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTOR DISTRIBUTION 3
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Consumer Discretionary (13%)
Consumer Staples (1%)
Energy (2%)
Financials (7%)
Health Care (19%)
Industrials (25%)
Information Technology (30%)
Telecommunication Services (3%)
Financial holdings outperformed due to good stock selection and an underweight
position compared to the benchmark. The Fund did not own companies with exposure
to the subprime mortgage market, and the financial holdings we held were
different from those contained in the benchmark. Among the better performing
stocks were Tower Group, a specialized property and casualty insurance company,
and FCStone Group, a commodity exchange trading company.
Health care and energy were positive absolute performers, yet they lagged the
benchmark for the period. Broadly speaking, we had several solid health care
stocks that performed well, but negative returns from a few holdings hurt the
Fund's overall performance in this group. Examples of underperformers were DJO,
the Medicines Company, and Sciele Pharma. Energy stocks continued to perform
well for much of the period. Even though the Fund's underweight position in
energy hindered relative performance, Petrohawk Energy Corporation--a company
engaged in the acquisition, production, exploration, and development of oil and
gas--was a top contributor.
WE TOOK PROFITS FROM SPECIFIC STOCKS IN CONSUMER STAPLES, HEALTH CARE, AND
ENERGY AFTER THEY HAD REACHED OR EXCEEDED OUR PRICE TARGETS FOR THEM.
The most significant changes included adding to the Fund's holdings in
information technology, financials, industrials, and consumer staples because
the sectors contained strong individual stocks. The Fund's movement out of
consumer discretionary, health care, and energy was mainly the result of taking
profits from specific stocks as these holdings reached or exceeded our price
targets for them.
WE ARE OPTIMISTIC GIVEN THE CURRENT ATTRACTIVE VALUATIONS COMBINED WITH POSITIVE
FUNDAMENTALS.
The first half of the year may be challenging as investor skepticism regarding
economic conditions will probably take time to dissipate. Market pundits
currently anticipate that the Fed will take further action to ease the credit
crunch, and those moves could possibly shorten the time required to repair
investor sentiment. Nevertheless, we anticipate a rather choppy pattern for
equities in the near term.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 51
WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (CONTINUED)
- --------------------------------------------------------------------------------
Looking to the second half of 2008, we are optimistic for several reasons.
First, overall, equity valuations are attractive, and it appears that a lot of
investor anxiety is currently discounted into existing prices. If we compare
this period to periods earlier in the decade, valuations were historically high
entering the previous slowdown. Second, our fundamental work with our portfolio
holdings suggests that earnings growth is more promising than is broadly
perceived. Another interesting point, and differentiating factor from earlier in
this decade, is the high amount of insider buying that we have seen in the
Fund's portfolio holdings. We would also point out that as we move into the
second half of the 2008, year-over-year earnings comparisons become easier to
assess. Finally, because the effect of interest rate cuts is lagged, we expect
the benefits from the initial interest rate cuts in the second half of 2007 to
help economic growth in the second half of 2008.
52 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2007)
- ---------------------------------------------------------------------------------------------------------
Expense Ratio
WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND 6 Months* 1 Year 5 Year 10 Year Gross 5 Net 6
- ---------------------------------------------------------------------------------------------------------
VT Small Cap Growth Fund (1.77) 13.81 19.16 2.14 1.23% 1.20%
- ---------------------------------------------------------------------------------------------------------
BENCHMARKS
- ---------------------------------------------------------------------------------------------------------
Russell 2000 Growth Index 1 (2.09) 7.06 16.50 4.32
- ---------------------------------------------------------------------------------------------------------
* Returns for periods of less than one year are not annualized.
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.
Stock fund values fluctuate in response to the activities of individual
companies and general market and economic conditions. Smaller company stocks
tend to be more volatile and less liquid than those of larger companies. The use
of derivatives may reduce returns and/or increase volatility. Active trading
results in increased turnover and trading expenses, and may generate higher
short-term capital gains. 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.
- --------------------------------------------------------------------------------
5 Reflects the gross expense ratio as stated in the May 1, 2007, prospectus
and is based on the Fund's previous fiscal year expenses as reported in
the Financial Highlights.
6 The investment adviser has contractually committed through April 30, 2009,
to waive fees and/or reimburse expenses to the extent necessary to
maintain the net operating expense ratio shown. Without these reductions,
the Fund's returns would have been lower.
THIS PAGE IS INTENTIONALLY LEFT BLANK.
54 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.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGER
I. Charles Rinaldi
FUND INCEPTION
October 10, 1997
PERFORMANCE SUMMARY
12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2007
- --------------------------------------------------------------------------------
FUND 1 YEAR
- --------------------------------------------------------------------------------
VT Small/Mid Cap Value Fund (0.32%)
- --------------------------------------------------------------------------------
BENCHMARK
Russell 2500 Value Index 1 (7.27%)
- --------------------------------------------------------------------------------
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.
NET AND GROSS EXPENSE RATIOS FOR THE FUND ARE 1.14% AND 1.46%, RESPECTIVELY. THE
INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2009 TO WAIVE
FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET
OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS
WOULD HAVE BEEN LOWER.
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENTS 2
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
WELLS FARGO ADVANTAGE
VT SMALL/MID CAP VALUE FUND Russell 2500(TM) Value Index
12/31/1997 $ 10,000 $ 10,000
1/31/1998 $ 9,657 $ 9,829
2/28/1998 $ 10,323 $ 10,438
3/31/1998 $ 10,808 $ 10,954
4/30/1998 $ 10,727 $ 10,948
5/31/1998 $ 10,303 $ 10,603
6/30/1998 $ 10,086 $ 10,562
7/31/1998 $ 9,742 $ 9,887
8/31/1998 $ 7,729 $ 8,335
9/30/1998 $ 7,881 $ 8,822
10/31/1998 $ 8,791 $ 9,216
11/30/1998 $ 9,742 $ 9,513
12/31/1998 $ 10,218 $ 9,808
1/31/1999 $ 10,167 $ 9,525
2/28/1999 $ 9,883 $ 9,037
3/31/1999 $ 10,260 $ 9,023
4/30/1999 $ 11,232 $ 9,914
5/31/1999 $ 11,106 $ 10,116
6/30/1999 $ 11,106 $ 10,468
7/31/1999 $ 10,552 $ 10,268
8/31/1999 $ 10,072 $ 9,875
9/30/1999 $ 9,278 $ 9,564
10/31/1999 $ 9,685 $ 9,573
11/30/1999 $ 9,852 $ 9,626
12/31/1999 $ 9,925 $ 9,954
1/31/2000 $ 9,511 $ 9,540
2/29/2000 $ 8,956 $ 9,705
3/31/2000 $ 10,175 $ 10,419
4/30/2000 $ 10,480 $ 10,415
5/31/2000 $ 10,523 $ 10,396
6/30/2000 $ 9,925 $ 10,357
7/31/2000 $ 10,088 $ 10,582
8/31/2000 $ 10,665 $ 11,136
9/30/2000 $ 10,795 $ 11,070
10/31/2000 $ 10,970 $ 11,063
11/30/2000 $ 10,208 $ 10,922
12/31/2000 $ 10,701 $ 12,023
1/31/2001 $ 11,368 $ 12,191
2/28/2001 $ 11,062 $ 12,089
3/31/2001 $ 10,723 $ 11,786
4/30/2001 $ 11,510 $ 12,457
5/31/2001 $ 11,707 $ 12,839
6/30/2001 $ 11,259 $ 12,963
7/31/2001 $ 11,445 $ 12,877
8/31/2001 $ 10,964 $ 12,766
9/30/2001 $ 9,707 $ 11,348
10/31/2001 $ 9,936 $ 11,591
11/30/2001 $ 10,516 $ 12,484
12/31/2001 $ 11,143 $ 13,194
1/31/2002 $ 10,771 $ 13,316
2/28/2002 $ 10,880 $ 13,481
3/31/2002 $ 11,722 $ 14,317
4/30/2002 $ 11,613 $ 14,562
5/31/2002 $ 11,383 $ 14,322
6/30/2002 $ 10,530 $ 13,817
7/31/2002 $ 8,650 $ 12,218
8/31/2002 $ 8,978 $ 12,283
9/30/2002 $ 7,961 $ 11,278
10/31/2002 $ 8,103 $ 11,440
11/30/2002 $ 8,671 $ 12,274
12/31/2002 $ 8,562 $ 11,891
1/31/2003 $ 8,257 $ 11,533
2/28/2003 $ 8,104 $ 11,249
3/31/2003 $ 7,928 $ 11,325
4/30/2003 $ 8,433 $ 12,350
5/31/2003 $ 9,572 $ 13,493
6/30/2003 $ 9,584 $ 13,735
7/31/2003 $ 9,948 $ 14,331
8/31/2003 $ 10,430 $ 14,908
9/30/2003 $ 10,253 $ 14,803
10/31/2003 $ 10,594 $ 15,933
11/30/2003 $ 10,982 $ 16,583
12/31/2003 $ 11,850 $ 17,234
1/31/2004 $ 12,120 $ 17,792
2/29/2004 $ 12,426 $ 18,154
3/31/2004 $ 12,379 $ 18,299
4/30/2004 $ 11,497 $ 17,341
5/31/2004 $ 11,579 $ 17,690
6/30/2004 $ 12,155 $ 18,392
7/31/2004 $ 11,650 $ 17,652
8/31/2004 $ 11,438 $ 17,874
9/30/2004 $ 12,202 $ 18,438
10/31/2004 $ 12,002 $ 18,771
11/30/2004 $ 13,460 $ 20,307
12/31/2004 $ 13,836 $ 20,953
1/31/2005 $ 13,519 $ 20,279
2/28/2005 $ 14,377 $ 20,785
3/31/2005 $ 13,606 $ 20,508
4/30/2005 $ 12,709 $ 19,741
5/31/2005 $ 13,216 $ 20,836
6/30/2005 $ 14,125 $ 21,600
7/31/2005 $ 15,116 $ 22,757
8/31/2005 $ 15,553 $ 22,343
9/30/2005 $ 16,167 $ 22,368
10/31/2005 $ 15,364 $ 21,708
11/30/2005 $ 15,883 $ 22,598
12/31/2005 $ 16,119 $ 22,574
1/31/2006 $ 17,712 $ 24,060
2/28/2006 $ 17,099 $ 24,092
3/31/2006 $ 17,937 $ 24,937
4/30/2006 $ 18,397 $ 25,036
5/31/2006 $ 17,547 $ 24,169
6/30/2006 $ 17,417 $ 24,305
7/31/2006 $ 16,981 $ 23,968
8/31/2006 $ 17,389 $ 24,605
9/30/2006 $ 17,136 $ 24,856
10/31/2006 $ 17,852 $ 26,022
11/30/2006 $ 18,344 $ 26,836
12/31/2006 $ 18,583 $ 27,131
1/31/2007 $ 19,019 $ 27,737
2/28/2007 $ 18,921 $ 27,672
3/31/2007 $ 18,921 $ 27,968
4/30/2007 $ 19,497 $ 28,553
5/31/2007 $ 20,088 $ 29,569
6/30/2007 $ 19,989 $ 28,782
7/31/2007 $ 18,992 $ 26,627
8/31/2007 $ 18,407 $ 26,764
9/30/2007 $ 19,711 $ 27,043
10/31/2007 $ 20,396 $ 27,230
11/30/2007 $ 18,190 $ 25,485
12/31/2007 $ 18,524 $ 25,159
- -------------------------------------------------------------------------------
1 The Russell 2500 Value Index measures the performance of those Russell
2500 companies with lower price-to-book ratios and lower forecasted growth
values. You cannot invest directly in an Index.
2 The chart compares the performance of the WELLS FARGO ADVANTAGE VT
SMALL/MID CAP VALUE FUND for the most recent ten years of the Fund with
the Russell 2500 Value Index. The chart assumes a hypothetical $10,000
investment and reflects all operating expenses of the Fund.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 55
WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND (CONTINUED)
- --------------------------------------------------------------------------------
MANAGER'S DISCUSSION
FUND HIGHLIGHTS
o Even though the Fund posted a negative return for the period, it
significantly outperformed its benchmark.
o Investments in the energy sector and the Fund's underweighting in the
financial sector helped performance.
o The Fund is well positioned to take advantage of potential future returns
from the precious metal group.
OUR INVESTMENT STRATEGY KEPT THE FUND INVESTED IN ENERGY AND PRECIOUS METALS,
WHILE WE MAINTAINED AN UNDERWEIGHTED POSITION IN THE FINANCIAL SECTOR.
The Fund benefited from its investments in the energy sector and from good stock
selection. The energy sector was among the best performing sectors in the
Russell 2500 Value Index during the period. The team's secular thesis on the
energy sector continues to be positive. Our view is that energy prices are
headed higher over the long term. There remains little spare capacity in
countries that are part of the Organization of the Petroleum Exporting Countries
(OPEC) and those that are not OPEC members. The decades of underinvestment in
the industry during the 1980s and 1990s cannot be reversed in the short term.
Exploration and development projects are capital intensive and have long lead
times. More importantly, demand has stayed strong despite high prices, driven
primarily by the increase in demand from emerging countries such as China and
India. Oil consumption in these countries is skyrocketing, albeit from a much
lower base. While the Fund's investments in the energy sector will fluctuate as
the investment team manages the positions, the team expects that the Fund will
stay invested in the sector for years to come.
Financial services, more specifically the Fund's underweight to the sector, also
contributed to relative performance. The investment team has been cautious about
housing and its collateral impact on financial services companies for some time
now. The underweight to the sector hurt performance a bit in 2006, but the story
has changed dramatically since then. The meltdown in
- --------------------------------------------------------------------------------
SECTOR DISTRIBUTION 3
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Consumer Discretionary (21%)
Consumer Staples (3%)
Energy (12%)
Financials (13%)
Health Care (13%)
Industrials (10%)
Information Technology (22%)
Materials (6%)
- --------------------------------------------------------------------------------
3 Equity holdings and sector distribution are subject to change. Cash and
cash equivalents are not reflected in the calculations of equity holdings
and sector distribution.
56 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS 3,4
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
Hill International Incorporated 19.44%
- --------------------------------------------------------------------------------
Randgold Resources Limited ADR 14.30%
- --------------------------------------------------------------------------------
Goldcorp Incorporated 13.68%
- --------------------------------------------------------------------------------
Global Industries Limited 9.59%
- --------------------------------------------------------------------------------
Willbros Group Incorporated 7.86%
- --------------------------------------------------------------------------------
3Com Corporation 7.85%
- --------------------------------------------------------------------------------
Champion Enterprises Incorporated 7.79%
- --------------------------------------------------------------------------------
Annaly Mortgage Management Incorporated 7.52%
- --------------------------------------------------------------------------------
Apex Silver Mines Limited 6.15%
- --------------------------------------------------------------------------------
Intermec Incorporated 5.82%
- --------------------------------------------------------------------------------
the subprime mortgage group has severely impacted the performance of the entire
sector. The Fund did not have any exposure to the companies tied to subprime and
was able to sidestep the worst performing pockets within the sector. The Fund's
exposure in the sector is primarily isolated to insurance and specialty finance
companies that generally outperformed the sector during the period. As a result,
Fund performance held up despite weakness from the sector.
The investment team continues to favor its investments in precious metals,
specifically gold. On an inflation-adjusted basis, gold is nowhere near its
all-time high. The emergence of the middle class in India and China bodes well
for the demand picture because the wealth effect has increased demand for gold
jewelry. Moreover, more countries are replenishing their reserves with more gold
and less dollar-denominated paper assets. With the United States running an
ongoing trade deficit, we expect further weakening of the U.S. dollar. Lastly,
gold serves as an inflation hedge and a safe haven in the event of financial
crisis. A number of scenarios point to higher gold prices. While the Fund's
investments in the precious metals sector didn't pay off until recent months,
the team is patient and will continue to maintain the Fund's exposure to the
sector.
INDIVIDUAL COMPANY FUNDAMENTALS CONTINUE TO BE OUR MOST IMPORTANT METRIC WHEN
SELECTING A STOCK.
There were no major changes to the Fund during the period. The Fund continues to
be overweight in energy and materials and underweight in financial services. It
is important to point out that decisions are derived from the team's bottom-up
investment process. Individual company fundamentals will continue to be our most
important metric when it comes to stock selection. During the period, the team
added to certain positions in the technology sector. This was not necessarily
driven by a broad overview of the sector; instead, it reflects the fact that the
investment team identified attractive company-specific investment opportunities.
THE FUND CONTINUES TO FAVOR COMPANIES THAT ARE SELLING AT REASONABLE VALUATIONS
WHILE EXHIBITING ABOVE MARKET GROWTH PROFILES.
The investment team remains cautious on the broad market. The market is perhaps
more vulnerable than at any other point in the last several years because of the
problems related to housing and subprime lending practices. We believe
- --------------------------------------------------------------------------------
4 The ten largest equity holdings are calculated based on the market value
of the securities divided by total market value of the portfolio.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 57
WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND (CONTINUED)
- --------------------------------------------------------------------------------
that the write-offs will continue. Regardless of the macroeconomic picture, we
believe that the team's broad approach will enable it to identify attractive
opportunities in small and mid cap companies. The Fund continues to favor
companies that are selling at reasonable valuations while exhibiting above
market growth profiles. In a potentially more difficult economic environment, we
believe that these stocks have the potential to outperform.
58 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN 5 (%) (AS OF DECEMBER 31, 2007)
- -----------------------------------------------------------------------------------------
Expense Ratio
6 Months* 1 Year 5 Year 10 Year Gross 6 Net 7
- -----------------------------------------------------------------------------------------
VT Small/Mid Cap Value Fund (7.33) (0.32) 16.69 6.36 1.46% 1.14%
- -----------------------------------------------------------------------------------------
BENCHMARK
- -----------------------------------------------------------------------------------------
Russell 2500 Value Index 1 (12.59) (7.27) 16.17 9.66
- -----------------------------------------------------------------------------------------
* Returns for periods of less than one year are not annualized.
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.
Stock fund values fluctuate in response to the activities of individual
companies and general market and economic conditions. Smaller company stocks
tend to be more volatile and less liquid than those of larger companies. The use
of derivatives may reduce returns and/or increase volatility. Certain investment
strategies 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.
- --------------------------------------------------------------------------------
5 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
shown prior to April 11, 2005 for the Fund reflects the performance of the
Strong Multi Cap Value Fund II.
6 Reflects the gross expense ratio as stated in the May 1, 2007, prospectus
and is based on the Fund's previous fiscal year expenses as reported in
the Financial Highlights.
7 The investment adviser has contractually committed through April 30, 2009,
to waive fees and/or reimburse expenses to the extent necessary to
maintain the net operating expense ratio shown. Without these reductions,
the Fund's returns would have been lower.
THIS PAGE IS INTENTIONALLY LEFT BLANK.
60 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.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Troy Ludgood
Thomas O'Connor, CFA
Lynne Royer
William Stevens
FUND INCEPTION
September 20, 1999
PERFORMANCE SUMMARY
12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2007
- --------------------------------------------------------------------------------
FUND 1 YEAR
- --------------------------------------------------------------------------------
VT Total Return Bond Fund 6.08%
- --------------------------------------------------------------------------------
BENCHMARK
Lehman Brothers U.S. Aggregate Index 1 6.97%
- --------------------------------------------------------------------------------
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.
NET AND GROSS EXPENSE RATIOS FOR THE FUND ARE 0.90% AND 0.95%, RESPECTIVELY. THE
INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2009 TO WAIVE
FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET
OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS
WOULD HAVE BEEN LOWER.
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTMENTS 2
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
WELLS FARGO ADVANTAGE VT
TOTAL RETURN BOND FUND Lehman Brothers U.S. Aggregate 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 $10,729
10/31/2000 $10,597 $10,800
11/30/2000 $10,740 $10,977
12/31/2000 $11,015 $11,180
1/31/2001 $11,214 $11,363
2/28/2001 $11,354 $11,462
3/31/2001 $11,381 $11,520
4/30/2001 $11,285 $11,472
5/31/2001 $11,357 $11,541
6/30/2001 $11,361 $11,585
7/31/2001 $11,658 $11,844
8/31/2001 $11,799 $11,979
9/30/2001 $11,698 $12,119
10/31/2001 $11,999 $12,373
11/30/2001 $11,944 $12,202
12/31/2001 $11,831 $12,124
1/31/2002 $11,892 $12,223
2/28/2002 $11,960 $12,341
3/31/2002 $11,831 $12,136
4/30/2002 $12,033 $12,371
5/31/2002 $12,145 $12,476
6/30/2002 $12,097 $12,584
7/31/2002 $12,018 $12,736
8/31/2002 $12,259 $12,951
9/30/2002 $12,425 $13,161
10/31/2002 $12,303 $13,101
11/30/2002 $12,468 $13,097
12/31/2002 $12,748 $13,368
1/31/2003 $12,793 $13,379
2/28/2003 $13,022 $13,564
3/31/2003 $13,094 $13,554
4/30/2003 $13,401 $13,666
5/31/2003 $13,723 $13,921
6/30/2003 $13,734 $13,893
7/31/2003 $13,284 $13,426
8/31/2003 $13,410 $13,515
9/30/2003 $13,789 $13,873
10/31/2003 $13,656 $13,743
11/30/2003 $13,677 $13,776
12/31/2003 $13,819 $13,917
1/31/2004 $13,935 $14,028
2/29/2004 $14,087 $14,180
3/31/2004 $14,186 $14,287
4/30/2004 $13,842 $13,915
5/31/2004 $13,790 $13,859
6/30/2004 $13,856 $13,937
7/31/2004 $13,995 $14,076
8/31/2004 $14,248 $14,344
9/30/2004 $14,288 $14,383
10/31/2004 $14,400 $14,504
11/30/2004 $14,284 $14,388
12/31/2004 $14,426 $14,520
1/31/2005 $14,510 $14,611
2/28/2005 $14,436 $14,525
3/31/2005 $14,337 $14,451
4/30/2005 $14,523 $14,646
5/31/2005 $14,682 $14,805
6/30/2005 $14,756 $14,885
7/31/2005 $14,616 $14,750
8/31/2005 $14,793 $14,939
9/30/2005 $14,631 $14,785
10/31/2005 $14,516 $14,668
11/30/2005 $14,563 $14,733
12/31/2005 $14,700 $14,873
1/31/2006 $14,688 $14,874
2/28/2006 $14,735 $14,923
3/31/2006 $14,592 $14,777
4/30/2006 $14,568 $14,750
5/31/2006 $14,546 $14,734
6/30/2006 $14,570 $14,766
7/31/2006 $14,762 $14,965
8/31/2006 $14,971 $15,194
9/30/2006 $15,104 $15,328
10/31/2006 $15,193 $15,429
11/30/2006 $15,374 $15,608
12/31/2006 $15,276 $15,518
1/31/2007 $15,256 $15,511
2/28/2006 $15,501 $15,750
3/31/2007 $15,481 $15,751
4/30/2007 $15,571 $15,836
5/31/2007 $15,440 $15,716
6/30/2007 $15,388 $15,669
7/31/2007 $15,495 $15,800
8/31/2007 $15,668 $15,994
9/30/2007 $15,777 $16,115
10/31/2007 $15,903 $16,260
11/30/2007 $16,158 $16,552
12/31/2007 $16,205 $16,599
- --------------------------------------------------------------------------------
1 The Lehman Brothers U.S. Aggregate Index includes bonds from the Treasury,
government-related, corporate, agency, mortgage-backed securities, and
asset-backed securities sectors. You cannot invest directly in an Index.
2 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 Index. The chart assumes a hypothetical $10,000 investment and
reflects all operating expenses of the Fund.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 61
WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
MANAGER'S DISCUSSION
FUND HIGHLIGHTS
o The Fund's solid performance lagged behind its benchmark.
o Overweight positions in the commercial-backed, asset-backed, and
mortgage-backed sectors detracted from the Fund's relative performance.
o Good security selection, curve positioning, and holdings in the corporate
sector helped the Fund's relative performance.
A GLOBAL CREDIT CRUNCH SENT INVESTORS ON A FLIGHT TO QUALITY.
U.S. Treasury yields fell during the second half of 2007, pushing the annual
total return of the Lehman Brothers U.S. Aggregate Index 1 to 6.97%, the highest
return since 2002. The rally began during the mid-summer credit crunch as a
flight to the known risks of the U.S. government and then continued on
expectations that the makings of a recession were under way. Meanwhile, compared
to U.S. Treasuries, other credit sectors posted record-setting underperformance
for most of the period. Investors fled from what were thought to be leveraged
positions with residential mortgages, commercial mortgages, banks, brokers, and
asset-backed securities, all of which initially took a particularly hard hit. As
it became clear that the credit crunch would slow down economic growth, the rest
of the corporate bond market suffered as well, and even stocks were struggling
by the end of the year.
For the 12-month period, the Fund's overweight position in the commercial
mortgage-backed securities (CMBS), asset-backed securities (ABS), and
mortgage-backed securities (MBS) sectors detracted from the Fund's relative
performance. On the other hand, security selection, holdings in the corporate
sector, and curve positioning were the three primary contributors to the Fund's
relative performance.
DURING THE PERIOD, THE FUND MAINTAINED OVERWEIGHTS TO BOTH THE CMBS AND ABS
SECTORS.
The Fund's exposure to mortgages was neutral to overweight throughout the
period. Corporate sector positioning was a contributor to performance because
the Fund was
- --------------------------------------------------------------------------------
SECTOR DISTRIBUTION 3
(AS OF DECEMBER 31, 2007)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
ABS/CMBS 4 (19%)
MBS 5 (36%)
Corporate Bonds & Notes (20%)
U.S. Treasury Securities (7%)
CMO 6 (18%)
- --------------------------------------------------------------------------------
3 Sector distribution is subject to change. Cash and cash equivalents are
not reflected in the calculations of sector distribution.
4 ABS/CMBS -- Asset-Backed Securities/Commercial Mortgage-Backed Securities.
5 MBS -- Mortgage-Backed Securities.
6 CMO -- Collateralized Mortgage Obligations.
62 Wells Fargo Advantage Variable Trust Funds Performance Highlights
WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
overweight early in the 12-month period as spreads tightened and underweight
before the subprime-induced widening of spreads. We scaled back into a modest
overweight during the significant credit spread widening witnessed in November.
Security selection in corporates contributed positively to performance. The Fund
benefited from strong security selection in several corporate subsectors: bank
and finance, noncorporates, cable/media, insurance, and utilities.
Compared to the Fund's benchmark, we are maintaining an overweight in CMBS and
AAA-rated consumer ABS opportunities that offer good relative value. The Fund's
modest corporate overweight features brokers, energy, and high-quality, non-U.S.
sovereigns; its underweights are in consumer products, retail, and banks.
WE BELIEVE THAT MANY CHALLENGES ARE STILL AHEAD OF US.
Given the current subprime pressures, we believe that homeowners will continue
to struggle and that many of them may simply walk away from their dream of
owning their own home. Current signs point to corporate defaults also rising.
Counterparty losses will continue to surprise the markets because derivative
losses will continue to show up in unexpected places. Consumers will cut back on
spending as their balance sheets weaken from falling asset prices and lack of
savings, while their income statements weaken from rising commodity prices and
unemployment. Exports will help, but with global growth on the decline, they
probably will not help enough in 2008. High headline inflation has prevented,
for now, the Fed from preempting this downturn.
Sometimes, the simplest answer is the best answer. Buy U.S. Treasuries,
establish short positions in corporates and stocks, and let the scenario play
itself out. But the corporate bond market has just finished its worst
performance in the last 20 years. Of the five worst years of the last 20, the
following year always produced positive performance. In fact, four of the five
best years came in the year following one of the five worst years. The market
tends to discount bad news, and often too much of it. We think that it might be
doing that now.
We have not, however, moved aggressively to that position. We do not like the
general feeling of complacency about derivatives and the consumer, and neither
do we like what seems to be the lack of full disclosure about losses. We do like
the opportunities that we are seeing, however, to buy good bonds at good prices,
and we are taking advantage of liquidity-driven opportunities. As managers of a
bond fund, we are definitely looking forward to 2008.
Performance Highlights Wells Fargo Advantage Variable Trust Funds 63
WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2007)
- -----------------------------------------------------------------------------------------------------------
Expense Ratio
WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND 6 Months* 1 Year 5 Year 10 Year Gross 7 Net 8
- -----------------------------------------------------------------------------------------------------------
VT Total Return Bond Fund 5.31 6.08 4.92 6.00 0.95% 0.90%
- -----------------------------------------------------------------------------------------------------------
BENCHMARK
Lehman Brothers U.S. Aggregate Index 1 5.93 6.97 4.42 6.31
- -----------------------------------------------------------------------------------------------------------
* Returns for periods of less than one year are not annualized.
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.
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 may
lose principal value. The use of derivatives may reduce returns and/or increase
volatility. Active trading results in increased turnover and trading expenses,
and may generate higher short-term capital gains. Certain investment strategies
tend to increase the total risk of an investment (relative to the broader
market). This Fund is exposed to foreign investment risk and mortgage and
asset-backed securities 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.
- --------------------------------------------------------------------------------
7 Reflects the gross expense ratio as stated in the May 1, 2007, prospectus
and is based on the Fund's previous fiscal year expenses as reported in
the Financial Highlights.
8 The investment adviser has contractually committed through April 30, 2009,
to waive fees and/or reimburse expenses to the extent necessary to
maintain the net operating expense ratio shown. Without these reductions,
the Fund's returns would have been lower.
64 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
six-month period and held for the entire six-month period, from July 1, 2007 to
December 31, 2007.
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 EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING NET ANNUAL
WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND 07-01-2007 12-31-2007 PERIOD* EXPENSE RATIO
- ----------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,021.70 $ 5.10 1.00%
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.16 $ 5.09 1.00%
- ----------------------------------------------------------------------------------------------------------------
WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND
- ----------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 948.60 $ 4.91 1.00%
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.16 $ 5.09 1.00%
- ----------------------------------------------------------------------------------------------------------------
WELLS FARGO ADVANTAGE VT DISCOVERY FUND
- ----------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,053.40 $ 5.95 1.15%
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,019.41 $ 5.85 1.15%
- ----------------------------------------------------------------------------------------------------------------
WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND
- ----------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 976.60 $ 4.98 1.00%
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.16 $ 5.09 1.00%
- ----------------------------------------------------------------------------------------------------------------
WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND
- ----------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 998.20 $ 5.04 1.00%
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.16 $ 5.09 1.00%
- ----------------------------------------------------------------------------------------------------------------
WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND
- ----------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 927.40 $ 4.86 1.00%
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.16 $ 5.09 1.00%
- ----------------------------------------------------------------------------------------------------------------
Fund Expenses (Unaudited) Wells Fargo Advantage Variable Trust Funds 65
- ----------------------------------------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING NET ANNUAL
WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND 07-01-2007 12-31-2007 PERIOD* EXPENSE RATIO
- ----------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,008.80 $ 5.06 1.00%
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,020.16 $ 5.09 1.00%
- ----------------------------------------------------------------------------------------------------------------
WELLS FARGO ADVANTAGE VT MONEY MARKET FUND
- ----------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,023.10 $ 3.82 0.75%
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,021.42 $ 3.82 0.75%
- ----------------------------------------------------------------------------------------------------------------
WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND
- ----------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 964.40 $ 5.30 1.07%
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,019.81 $ 5.45 1.07%
- ----------------------------------------------------------------------------------------------------------------
WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND
- ----------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 982.30 $ 6.00 1.20%
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,019.16 $ 6.11 1.20%
- ----------------------------------------------------------------------------------------------------------------
WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND
- ----------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 926.70 $ 5.54 1.14%
Hypothetical (5% Return before expenses $ 1,000.00 $ 1,019.46 $ 5.80 1.14%
- ----------------------------------------------------------------------------------------------------------------
WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND
- ----------------------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,053.10 $ 4.66 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 expense ratio multiplied by
the average account value over the period, multiplied by the number of
days in the most recent fiscal half-year divided by the number of days in
the fiscal year (to reflect the one-half year period).
66 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCKS: 57.67%
AMUSEMENT & RECREATION SERVICES: 0.14%
2,136 HARRAH'S ENTERTAINMENT INCORPORATED<< $ 189,570
3,592 INTERNATIONAL GAME TECHNOLOGY 157,797
347,367
-------------
APPAREL & ACCESSORY STORES: 0.20%
981 ABERCROMBIE & FITCH COMPANY CLASS A 78,451
5,304 GAP INCORPORATED 112,869
3,572 KOHL'S CORPORATION 163,598
3,539 LIMITED BRANDS INCORPORATED<< 66,993
2,141 NORDSTROM INCORPORATED 78,639
500,550
-------------
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS: 0.06%
971 JONES APPAREL GROUP INCORPORATED 15,526
1,133 LIZ CLAIBORNE INCORPORATED 23,057
670 POLO RALPH LAUREN CORPORATION 41,399
1,002 VF CORPORATION 68,797
148,779
-------------
AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS: 0.03%
1,571 AUTONATION INCORPORATED+<< 24,602
502 AUTOZONE INCORPORATED+ 60,195
84,797
-------------
AUTOMOTIVE REPAIR, SERVICES & PARKING: 0.01%
660 RYDER SYSTEM INCORPORATED 31,027
-------------
BIOPHARMACEUTICALS: 0.36%
4,394 CELGENE CORPORATION+ 203,047
3,029 GENZYME CORPORATION+ 225,479
10,601 GILEAD SCIENCES INCORPORATED+ 487,752
916,278
-------------
BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS: 0.06%
1,384 CENTEX CORPORATION<< 34,960
3,157 D.R. HORTON INCORPORATED<< 41,578
877 KB HOME<< 18,943
1,587 LENNAR CORPORATION CLASS A<< 28,391
2,420 PULTE HOMES INCORPORATED 25,507
149,379
-------------
BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS: 0.38%
19,221 HOME DEPOT INCORPORATED 517,814
16,658 LOWE'S COMPANIES INCORPORATED 376,804
1,187 SHERWIN-WILLIAMS COMPANY 68,893
963,511
-------------
BUSINESS SERVICES: 3.94%
6,535 ADOBE SYSTEMS INCORPORATED+ 279,241
1,144 AFFILIATED COMPUTER SERVICES INCORPORATED CLASS A+ 51,594
1,892 AKAMAI TECHNOLOGIES INCORPORATED+ 65,463
2,629 AUTODESK INCORPORATED+ 130,819
5,993 AUTOMATIC DATA PROCESSING INCORPORATED 266,868
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 67
VT ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
BUSINESS SERVICES (continued)
2,230 BMC SOFTWARE INCORPORATED+ $ 79,477
4,463 CA INCORPORATED 111,352
2,160 CITRIX SYSTEMS INCORPORATED+ 82,102
3,307 COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION CLASS A 112,240
1,981 COMPUTER SCIENCES CORPORATION+ 98,000
3,259 COMPUWARE CORPORATION+ 28,940
1,483 CONVERGYS CORPORATION+ 24,410
12,949 EBAY INCORPORATED+ 429,777
3,587 ELECTRONIC ARTS INCORPORATED+ 209,517
5,832 ELECTRONIC DATA SYSTEMS CORPORATION 120,897
1,501 EQUIFAX INCORPORATED 54,576
1,944 FIDELITY NATIONAL INFORMATION SERVICES INCORPORATED 80,851
1,875 FISERV INCORPORATED+<< 104,044
2,636 GOOGLE INCORPORATED CLASS A+ 1,822,741
2,209 IMS HEALTH INCORPORATED 50,895
5,368 INTERPUBLIC GROUP OF COMPANIES INCORPORATED+<< 43,534
3,789 INTUIT INCORPORATED+ 119,770
5,940 JUNIPER NETWORKS INCORPORATED+<< 197,208
91,636 MICROSOFT CORPORATION 3,262,242
1,456 MONSTER WORLDWIDE INCORPORATED+ 47,174
3,984 NOVELL INCORPORATED+ 27,370
3,723 OMNICOM GROUP INCORPORATED 176,954
44,914 ORACLE CORPORATION+ 1,014,158
1,834 ROBERT HALF INTERNATIONAL INCORPORATED 49,591
9,437 SUN MICROSYSTEMS INCORPORATED+ 171,093
9,877 SYMANTEC CORPORATION+<< 159,415
2,254 TOTAL SYSTEM SERVICES INCORPORATED 63,112
3,960 UNISYS CORPORATION+ 18,731
2,516 VERISIGN INCORPORATED+<< 94,627
15,221 YAHOO! INCORPORATED+ 354,040
10,002,823
-------------
CHEMICALS & ALLIED PRODUCTS: 5.71%
17,599 ABBOTT LABORATORIES 988,184
2,453 AIR PRODUCTS & CHEMICALS INCORPORATED 241,939
12,387 AMGEN INCORPORATED+ 575,252
1,212 AVERY DENNISON CORPORATION 64,406
4,886 AVON PRODUCTS INCORPORATED 193,144
1,227 BARR PHARMACEUTICALS INCORPORATED+<< 65,154
3,341 BIOGEN IDEC INCORPORATED+ 190,170
22,534 BRISTOL-MYERS SQUIBB COMPANY 597,602
1,577 CLOROX COMPANY 102,773
5,805 COLGATE-PALMOLIVE COMPANY 452,558
10,756 DOW CHEMICAL COMPANY 424,002
10,239 E.I. DU PONT DE NEMOURS & COMPANY 451,438
922 EASTMAN CHEMICAL COMPANY 56,325
1,989 ECOLAB INCORPORATED 101,857
11,239 ELI LILLY & COMPANY 600,050
1,296 ESTEE LAUDER COMPANIES INCORPORATED CLASS A 56,519
3,551 FOREST LABORATORIES INCORPORATED+ 129,434
1,794 HOSPIRA INCORPORATED+ 76,496
926 INTERNATIONAL FLAVORS & FRAGRANCES INCORPORATED 44,568
32,593 JOHNSON & JOHNSON 2,173,953
2,783 KING PHARMACEUTICALS INCORPORATED+ 28,498
6,227 MONSANTO COMPANY 695,494
3,444 MYLAN LABORATORIES INCORPORATED+<< 48,423
68 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
CHEMICALS & ALLIED PRODUCTS (continued)
77,787 PFIZER INCORPORATED $ 1,768,099
1,864 PPG INDUSTRIES INCORPORATED 130,909
3,598 PRAXAIR INCORPORATED 319,179
35,371 PROCTER & GAMBLE COMPANY 2,596,939
1,427 ROHM & HAAS COMPANY<< 75,731
18,447 SCHERING-PLOUGH CORPORATION 491,428
1,480 SIGMA-ALDRICH CORPORATION 80,808
15,252 WYETH 673,986
14,495,318
-------------
COAL MINING: 0.13%
2,066 CONSOL ENERGY INCORPORATED 147,760
3,015 PEABODY ENERGY CORPORATION 185,845
333,605
-------------
COMMUNICATIONS: 2.52%
4,609 AMERICAN TOWER CORPORATION CLASS A 196,343
69,074 AT&T INCORPORATED 2,870,715
1,257 CENTURYTEL INCORPORATED 52,115
3,733 CITIZENS COMMUNICATIONS COMPANY 47,521
5,671 CLEAR CHANNEL COMMUNICATIONS INCORPORATED 195,763
35,002 COMCAST CORPORATION CLASS A+<< 639,137
8,176 DIRECTV GROUP INCORPORATED+ 189,029
1,741 EMBARQ CORPORATION 86,232
2,099 IAC/INTERACTIVECORP+ 56,505
17,884 QWEST COMMUNICATIONS INTERNATIONAL INCORPORATED<< 125,367
32,393 SPRINT NEXTEL CORPORATION 425,320
32,919 VERIZON COMMUNICATIONS INCORPORATED 1,438,231
5,434 WINDSTREAM CORPORATION 70,751
6,393,029
-------------
DEPOSITORY INSTITUTIONS: 4.49%
50,550 BANK OF AMERICA CORPORATION 2,085,693
12,970 BANK OF NEW YORK MELLON CORPORATION 632,417
6,258 BB&T CORPORATION 191,933
56,859 CITIGROUP INCORPORATED 1,673,929
1,720 COMERICA INCORPORATED 74,872
2,219 COMMERCE BANCORP INCORPORATED 84,633
6,066 FIFTH THIRD BANCORP 152,439
1,439 FIRST HORIZON NATIONAL CORPORATION<< 26,118
5,927 HUDSON CITY BANCORP INCORPORATED 89,024
4,167 HUNTINGTON BANCSHARES INCORPORATED 61,505
38,257 JPMORGAN CHASE & COMPANY 1,669,918
4,427 KEYCORP 103,813
851 M&T BANK CORPORATION 69,416
2,930 MARSHALL & ILSLEY CORPORATION 77,586
7,216 NATIONAL CITY CORPORATION 118,775
2,179 NORTHERN TRUST CORPORATION 166,868
3,981 PNC FINANCIAL SERVICES GROUP 261,353
7,917 REGIONS FINANCIAL CORPORATION 187,237
4,105 SOVEREIGN BANCORP INCORPORATED 46,797
4,398 STATE STREET CORPORATION 357,118
3,977 SUNTRUST BANKS INCORPORATED 248,523
19,665 US BANCORP 624,167
22,498 WACHOVIA CORPORATION 855,599
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 69
VT ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
DEPOSITORY INSTITUTIONS (continued)
9,895 WASHINGTON MUTUAL INCORPORATED<< $ 134,671
38,432 WELLS FARGO & COMPANY@ 1,160,262
8,552 WESTERN UNION COMPANY 207,643
1,230 ZIONS BANCORPORATION<< 57,429
11,419,738
-------------
E-COMMERCE/SERVICES: 0.13%
3,499 AMAZON.COM INCORPORATED+ 324,147
-------------
EATING & DRINKING PLACES: 0.43%
1,616 DARDEN RESTAURANTS INCORPORATED 44,779
13,471 MCDONALD'S CORPORATION 793,577
995 WENDY'S INTERNATIONAL INCORPORATED 25,711
5,792 YUM! BRANDS INCORPORATED 221,660
1,085,727
-------------
EDUCATIONAL SERVICES: 0.04%
1,557 APOLLO GROUP INCORPORATED CLASS A+ 109,224
-------------
ELECTRIC, GAS & SANITARY SERVICES: 2.30%
7,622 AES CORPORATION+ 163,035
1,893 ALLEGHENY ENERGY INCORPORATED 120,414
3,297 ALLIED WASTE INDUSTRIES INCORPORATED+<< 36,333
2,369 AMEREN CORPORATION 128,423
4,555 AMERICAN ELECTRIC POWER COMPANY INCORPORATED 212,081
3,658 CENTERPOINT ENERGY INCORPORATED 62,662
2,563 CMS ENERGY CORPORATION 44,545
3,092 CONSOLIDATED EDISON INCORPORATED<< 151,044
2,057 CONSTELLATION ENERGY GROUP INCORPORATED 210,904
6,660 DOMINION RESOURCES INCORPORATED 316,017
1,864 DTE ENERGY COMPANY 81,941
14,362 DUKE ENERGY CORPORATION 289,682
5,646 DYNEGY INCORPORATED CLASS A+ 40,312
3,710 EDISON INTERNATIONAL 198,003
7,978 EL PASO CORPORATION 137,541
2,213 ENTERGY CORPORATION 264,498
7,516 EXELON CORPORATION 613,606
3,471 FIRSTENERGY CORPORATION 251,092
4,636 FPL GROUP INCORPORATED 314,228
868 INTEGRYS ENERGY GROUP INCORPORATED 44,867
513 NICOR INCORPORATED 21,726
3,122 NISOURCE INCORPORATED 58,975
2,280 PEPCO HOLDINGS INCORPORATED 66,872
4,032 PG&E CORPORATION 173,739
1,143 PINNACLE WEST CAPITAL CORPORATION 48,475
4,239 PPL CORPORATION 220,810
2,952 PROGRESS ENERGY INCORPORATED 142,965
2,896 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED 284,503
1,967 QUESTAR CORPORATION 106,415
2,977 SEMPRA ENERGY 184,217
7,201 SPECTRA ENERGY CORPORATION 185,930
2,399 TECO ENERGY INCORPORATED<< 41,287
8,650 THE SOUTHERN COMPANY 335,188
5,789 WASTE MANAGEMENT INCORPORATED 189,127
4,782 XCEL ENERGY INCORPORATED 107,930
5,849,387
-------------
70 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 4.21%
6,875 ADVANCED MICRO DEVICES INCORPORATED+<< $ 51,563
3,825 ALTERA CORPORATION 73,899
3,455 ANALOG DEVICES INCORPORATED 109,524
5,358 BROADCOM CORPORATION CLASS A+ 140,058
979 CIENA CORPORATION+ 33,394
69,099 CISCO SYSTEMS INCORPORATED+ 1,870,510
2,050 COOPER INDUSTRIES LIMITED CLASS A 108,404
8,966 EMERSON ELECTRIC COMPANY 508,014
115,104 GENERAL ELECTRIC COMPANY 4,266,905
688 HARMAN INTERNATIONAL INDUSTRIES INCORPORATED 50,712
2,369 JABIL CIRCUIT INCORPORATED 36,175
2,499 JDS UNIPHASE CORPORATION+<< 33,237
2,074 KLA-TENCOR CORPORATION 99,884
1,432 L-3 COMMUNICATIONS HOLDINGS INCORPORATED 151,706
2,545 LINEAR TECHNOLOGY CORPORATION 81,007
8,040 LSI LOGIC CORPORATION+ 42,692
2,609 MEMC ELECTRONIC MATERIALS INCORPORATED+ 230,870
2,440 MICROCHIP TECHNOLOGY INCORPORATED 76,665
8,660 MICRON TECHNOLOGY INCORPORATED+<< 62,785
1,612 MOLEX INCORPORATED 44,008
26,017 MOTOROLA INCORPORATED 417,313
2,676 NATIONAL SEMICONDUCTOR CORPORATION 60,585
3,920 NETWORK APPLIANCE INCORPORATED+ 97,843
1,322 NOVELLUS SYSTEMS INCORPORATED+<< 36,448
6,327 NVIDIA CORPORATION+ 215,245
1,559 QLOGIC CORPORATION+<< 22,138
18,638 QUALCOMM INCORPORATED 733,405
1,855 ROCKWELL COLLINS INCORPORATED<< 133,504
5,001 TELLABS INCORPORATED+ 32,707
15,924 TEXAS INSTRUMENTS INCORPORATED 531,862
5,662 TYCO ELECTRONICS LIMITED 210,230
880 WHIRLPOOL CORPORATION<< 71,834
3,348 XILINX INCORPORATED 73,221
10,708,347
-------------
ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES: 0.20%
1,007 FLUOR CORPORATION 146,740
1,376 JACOBS ENGINEERING GROUP INCORPORATED+<< 131,559
2,442 MOODY'S CORPORATION<< 87,179
3,798 PAYCHEX INCORPORATED 137,564
503,042
-------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT: 0.18%
1,144 BALL CORPORATION 51,480
1,739 FORTUNE BRANDS INCORPORATED 125,834
4,708 ILLINOIS TOOL WORKS INCORPORATED 252,066
656 SNAP-ON INCORPORATED 31,645
461,025
-------------
FINANCIAL SERVICES: 0.02%
1,747 JANUS CAPITAL GROUP INCORPORATED 57,389
-------------
FOOD & KINDRED PRODUCTS: 2.23%
8,358 ANHEUSER-BUSCH COMPANIES INCORPORATED 437,458
7,322 ARCHER DANIELS MIDLAND COMPANY 339,960
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 71
VT ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
FOOD & KINDRED PRODUCTS (continued)
2,534 CAMPBELL SOUP COMPANY $ 90,540
3,259 COCA-COLA ENTERPRISES INCORPORATED 84,832
5,549 CONAGRA FOODS INCORPORATED 132,011
2,208 CONSTELLATION BRANDS INCORPORATED CLASS A+ 52,197
3,845 GENERAL MILLS INCORPORATED 219,165
3,609 H.J. HEINZ COMPANY 168,468
1,316 HERCULES INCORPORATED 25,465
3,005 KELLOGG COMPANY 157,552
17,623 KRAFT FOODS INCORPORATED CLASS A 575,034
1,454 MCCORMICK & COMPANY INCORPORATED 55,121
1,556 MOLSON COORS BREWING COMPANY 80,321
1,579 PEPSI BOTTLING GROUP INCORPORATED 62,307
18,333 PEPSICO INCORPORATED 1,391,475
8,248 SARA LEE CORPORATION 132,463
22,635 THE COCA-COLA COMPANY 1,389,110
1,913 THE HERSHEY COMPANY 75,372
3,118 TYSON FOODS INCORPORATED CLASS A 47,799
2,481 WM. WRIGLEY JR. COMPANY 145,263
5,661,913
-------------
FOOD STORES: 0.24%
7,758 KROGER COMPANY 207,216
5,038 SAFEWAY INCORPORATED 172,350
8,318 STARBUCKS CORPORATION+ 170,269
1,587 WHOLE FOODS MARKET INCORPORATED 64,750
614,585
-------------
FORESTRY: 0.07%
2,386 WEYERHAEUSER COMPANY 175,944
-------------
FURNITURE & FIXTURES: 0.08%
1,937 LEGGETT & PLATT INCORPORATED 33,781
4,200 MASCO CORPORATION 90,762
3,181 NEWELL RUBBERMAID INCORPORATED 82,324
206,867
-------------
GENERAL MERCHANDISE STORES: 0.89%
1,029 BIG LOTS INCORPORATED+<< 16,454
1,599 FAMILY DOLLAR STORES INCORPORATED 30,749
2,525 JCPENNEY COMPANY INCORPORATED 111,075
4,932 MACY'S INCORPORATED 127,591
830 SEARS HOLDINGS CORPORATION+<< 84,702
9,462 TARGET CORPORATION 473,100
4,977 TJX COMPANIES INCORPORATED 142,989
26,911 WAL-MART STORES INCORPORATED 1,279,080
2,265,740
-------------
HEALTH SERVICES: 0.16%
4,118 CARDINAL HEALTH INCORPORATED 237,815
1,312 LABORATORY CORPORATION OF AMERICA HOLDINGS+ 99,095
5,399 TENET HEALTHCARE CORPORATION+ 27,427
1,180 WATSON PHARMACEUTICALS INCORPORATED+<< 32,025
396,362
-------------
72 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
HOLDING & OTHER INVESTMENT OFFICES: 0.58%
1,088 APARTMENT INVESTMENT & MANAGEMENT COMPANY CLASS A<< $ 37,786
896 AVALONBAY COMMUNITIES INCORPORATED 84,349
1,358 BOSTON PROPERTIES INCORPORATED 124,678
1,399 DEVELOPERS DIVERSIFIED REALTY CORPORATION 53,568
3,087 EQUITY RESIDENTIAL 112,583
2,776 GENERAL GROWTH PROPERTIES INCORPORATED<< 114,316
5,949 HOST HOTELS & RESORTS INCORPORATED 101,371
2,878 KIMCO REALTY CORPORATION 104,759
1,962 PLUM CREEK TIMBER COMPANY<< 90,330
2,933 PROLOGIS<< 185,894
1,418 PUBLIC STORAGE INCORPORATED<< 104,095
2,539 SIMON PROPERTY GROUP INCORPORATED<< 220,538
1,526 VORNADO REALTY TRUST<< 134,212
1,468,479
-------------
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES: 0.12%
3,016 BED BATH & BEYOND INCORPORATED+ 88,640
3,996 BEST BUY COMPANY INCORPORATED 210,389
1,919 CIRCUIT CITY STORES INCORPORATED 8,060
307,089
-------------
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES: 0.11%
3,560 MARRIOTT INTERNATIONAL INCORPORATED CLASS A 121,681
2,268 STARWOOD HOTELS & RESORTS WORLDWIDE INCORPORATED 99,860
2,026 WYNDHAM WORLDWIDE CORPORATION 47,733
269,274
-------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 4.80%
8,123 3M COMPANY 684,931
9,971 APPLE INCORPORATED+ 1,975,056
15,695 APPLIED MATERIALS INCORPORATED 278,743
3,623 BAKER HUGHES INCORPORATED 293,825
712 BLACK & DECKER CORPORATION<< 49,591
7,243 CATERPILLAR INCORPORATED 525,552
1,163 CUMMINS INCORPORATED 148,131
5,054 DEERE & COMPANY 470,628
25,523 DELL INCORPORATED+ 625,569
2,263 DOVER CORPORATION 104,302
1,668 EATON CORPORATION 161,713
23,897 EMC CORPORATION 442,811
1,811 GAMESTOP CORPORATION CLASS A+ 112,481
29,362 HEWLETT-PACKARD COMPANY 1,482,194
3,102 INGERSOLL-RAND COMPANY LIMITED CLASS A 144,150
66,594 INTEL CORPORATION 1,775,396
15,694 INTERNATIONAL BUSINESS MACHINES CORPORATION 1,696,521
1,078 LEXMARK INTERNATIONAL INCORPORATED+ 37,579
1,478 MANITOWOC COMPANY INCORPORATED 72,171
4,062 NATIONAL OILWELL VARCO INCORPORATED+ 298,395
1,396 PALL CORPORATION 56,287
1,915 PARKER HANNIFIN CORPORATION<< 144,219
2,470 PITNEY BOWES INCORPORATED 93,959
2,599 SANDISK CORPORATION+ 86,209
2,281 SMITH INTERNATIONAL INCORPORATED 168,452
935 STANLEY WORKS 45,329
2,061 TERADATA CORPORATION+ 56,492
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 73
VT ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (continued)
1,168 TEREX CORPORATION+ $ 76,586
1,952 TRANE INCORPORATED 91,178
12,198,450
-------------
INSURANCE AGENTS, BROKERS & SERVICE: 0.22%
3,344 AON CORPORATION 159,475
1,929 HUMANA INCORPORATED+ 145,273
5,924 MARSH & MCLENNAN COMPANIES INCORPORATED 156,808
4,109 UNUMPROVIDENT CORPORATION 97,753
559,309
-------------
INSURANCE CARRIERS: 3.12%
3,753 ACE LIMITED 231,860
5,699 AETNA INCORPORATED 329,003
5,555 AFLAC INCORPORATED 347,910
6,500 ALLSTATE CORPORATION 339,495
1,156 AMBAC FINANCIAL GROUP INCORPORATED<< 29,790
28,886 AMERICAN INTERNATIONAL GROUP INCORPORATED 1,684,054
1,087 ASSURANT INCORPORATED<< 72,720
4,371 CHUBB CORPORATION 238,569
3,179 CIGNA CORPORATION 170,808
1,890 CINCINNATI FINANCIAL CORPORATION 74,731
4,995 GENWORTH FINANCIAL INCORPORATED 127,123
3,574 HARTFORD FINANCIAL SERVICES GROUP INCORPORATED 311,617
1,925 LEUCADIA NATIONAL CORPORATION 90,668
3,066 LINCOLN NATIONAL CORPORATION 178,503
5,006 LOEWS CORPORATION 252,002
1,430 MBIA INCORPORATED<< 26,641
8,435 METLIFE INCORPORATED 519,765
931 MGIC INVESTMENT CORPORATION<< 20,882
2,979 PRINCIPAL FINANCIAL GROUP INCORPORATED 205,074
5,170 PRUDENTIAL FINANCIAL INCORPORATED 481,017
1,076 SAFECO CORPORATION 59,912
7,950 THE PROGRESSIVE CORPORATION 152,322
7,345 THE TRAVELERS COMPANIES INCORPORATED 395,161
1,049 TORCHMARK CORPORATION 63,496
14,717 UNITEDHEALTH GROUP INCORPORATED<< 856,529
6,507 WELLPOINT INCORPORATED+ 570,859
2,030 XL CAPITAL LIMITED CLASS A<< 102,129
7,932,640
-------------
LEATHER & LEATHER PRODUCTS: 0.05%
4,192 COACH INCORPORATED+ 128,191
-------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 0.90%
4,402 AGILENT TECHNOLOGIES INCORPORATED+ 161,729
1,915 APPLERA CORPORATION-APPLIED BIOSYSTEMS GROUP 64,957
2,777 BECTON DICKINSON & COMPANY 232,102
15,281 BOSTON SCIENTIFIC CORPORATION+ 177,718
1,160 C.R. BARD INCORPORATED 109,968
5,670 COVIDIEN LIMITED 251,124
2,883 DANAHER CORPORATION 252,954
3,279 EASTMAN KODAK COMPANY<< 71,712
621 MILLIPORE CORPORATION+ 45,445
1,350 PERKINELMER INCORPORATED 35,127
1,786 QUEST DIAGNOSTICS INCORPORATED 94,479
74 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS (continued)
4,889 RAYTHEON COMPANY $ 296,762
1,699 ROCKWELL AUTOMATION INCORPORATED 117,163
1,977 TERADYNE INCORPORATED+ 20,442
4,805 THERMO FISHER SCIENTIFIC INCORPORATED+<< 277,152
1,143 WATERS CORPORATION+ 90,377
2,299,211
-------------
MEDICAL EQUIPMENT & SUPPLIES: 0.35%
12,877 MEDTRONIC INCORPORATED 647,327
3,899 ST. JUDE MEDICAL INCORPORATED+ 158,455
1,425 VARIAN MEDICAL SYSTEMS INCORPORATED+ 74,328
880,110
-------------
MEDICAL MANAGEMENT SERVICES: 0.25%
1,764 COVENTRY HEALTH CARE INCORPORATED+ 104,517
2,870 EXPRESS SCRIPTS INCORPORATED+ 209,510
3,046 MEDCO HEALTH SOLUTIONS INCORPORATED+ 308,864
622,891
-------------
MEDICAL PRODUCTS: 0.97%
3,496 ALLERGAN INCORPORATED 224,583
7,221 BAXTER INTERNATIONAL INCORPORATED 419,179
24,789 MERCK & COMPANY INCORPORATED 1,440,489
2,711 STRYKER CORPORATION 202,566
2,673 ZIMMER HOLDINGS INCORPORATED+ 176,819
2,463,636
-------------
METAL MINING: 0.27%
4,349 FREEPORT-MCMORAN COPPER & GOLD INCORPORATED CLASS B 445,512
5,146 NEWMONT MINING CORPORATION 251,279
696,791
-------------
MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS: 0.04%
1,232 VULCAN MATERIALS COMPANY 97,439
-------------
MISCELLANEOUS MANUFACTURING INDUSTRIES: 0.16%
1,675 HASBRO INCORPORATED 42,847
4,178 MATTEL INCORPORATED 79,549
1,544 TIFFANY & COMPANY 71,070
5,636 TYCO INTERNATIONAL LIMITED 223,448
416,914
-------------
MISCELLANEOUS RETAIL: 0.68%
4,943 COSTCO WHOLESALE CORPORATION 344,824
16,821 CVS CAREMARK CORPORATION 668,635
650 DILLARD'S INCORPORATED CLASS A 12,207
3,108 OFFICE DEPOT INCORPORATED+ 43,232
858 OFFICEMAX INCORPORATED 17,726
1,493 RADIOSHACK CORPORATION<< 25,172
8,053 STAPLES INCORPORATED 185,783
11,293 WALGREEN COMPANY 430,037
1,727,616
-------------
MOTION PICTURES: 0.76%
26,346 NEWS CORPORATION CLASS A 539,830
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 75
VT ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
MOTION PICTURES (continued)
41,168 TIME WARNER INCORPORATED $ 679,684
21,679 WALT DISNEY COMPANY 699,798
1,919,312
-------------
MOTOR FREIGHT TRANSPORTATION & WAREHOUSING: 0.46%
3,522 FEDEX CORPORATION 314,057
11,968 UNITED PARCEL SERVICE INCORPORATED CLASS B 846,377
1,160,434
-------------
NON-DEPOSITORY CREDIT INSTITUTIONS: 0.78%
2,183 AMERICAN CAPITAL STRATEGIES LIMITED<< 71,952
13,319 AMERICAN EXPRESS COMPANY 692,854
4,451 CAPITAL ONE FINANCIAL CORPORATION 210,354
2,159 CIT GROUP INCORPORATED 51,881
6,591 COUNTRYWIDE FINANCIAL CORPORATION<< 58,924
5,439 DISCOVER FINANCIAL SERVICES 82,020
11,140 FANNIE MAE 445,377
7,534 FREDDIE MAC 256,683
5,874 SLM CORPORATION+ 118,302
1,988,347
-------------
OFFICE EQUIPMENT: 0.07%
10,528 XEROX CORPORATION 170,448
-------------
OIL & GAS EXTRACTION: 2.32%
5,311 ANADARKO PETROLEUM CORPORATION 348,880
3,771 APACHE CORPORATION 405,533
3,335 BJ SERVICES COMPANY 80,907
5,173 CHESAPEAKE ENERGY CORPORATION 202,782
5,067 DEVON ENERGY CORPORATION 450,507
1,649 ENSCO INTERNATIONAL INCORPORATED 98,313
2,801 EOG RESOURCES INCORPORATED 249,989
10,035 HALLIBURTON COMPANY 380,427
3,225 NABORS INDUSTRIES LIMITED+<< 88,333
3,052 NOBLE CORPORATION 172,469
1,955 NOBLE ENERGY INCORPORATED 155,462
9,437 OCCIDENTAL PETROLEUM CORPORATION 726,555
1,699 RANGE RESOURCES CORPORATION 87,261
1,267 ROWAN COMPANIES INCORPORATED 49,996
13,620 SCHLUMBERGER LIMITED 1,339,799
3,621 TRANSOCEAN INCORPORATED+ 518,346
3,841 WEATHERFORD INTERNATIONAL LIMITED+ 263,493
5,507 XTO ENERGY INCORPORATED 282,840
5,901,892
-------------
PAPER & ALLIED PRODUCTS: 0.12%
1,144 BEMIS COMPANY INCORPORATED 31,323
4,876 INTERNATIONAL PAPER COMPANY 157,885
2,104 MEADWESTVACO CORPORATION 65,855
1,486 PACTIV CORPORATION+ 39,572
294,635
-------------
PERSONAL SERVICES: 0.05%
1,537 CINTAS CORPORATION 51,674
3,701 H & R BLOCK INCORPORATED 68,728
120,402
-------------
76 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
PETROLEUM REFINING & RELATED INDUSTRIES: 4.45%
638 ASHLAND INCORPORATED $ 30,260
24,048 CHEVRON CORPORATION 2,244,400
18,218 CONOCOPHILLIPS<< 1,608,649
62,227 EXXON MOBIL CORPORATION 5,830,048
3,165 HESS CORPORATION 319,222
8,089 MARATHON OIL CORPORATION 492,310
2,142 MURPHY OIL CORPORATION 181,727
1,339 SUNOCO INCORPORATED 96,997
1,560 TESORO PETROLEUM CORPORATION<< 74,412
6,269 VALERO ENERGY CORPORATION 439,018
11,317,043
-------------
PIPELINES: 0.10%
6,759 THE WILLIAMS COMPANIES INCORPORATED 241,837
-------------
PRIMARY METAL INDUSTRIES: 0.41%
9,659 ALCOA INCORPORATED 353,036
1,164 ALLEGHENY TECHNOLOGIES INCORPORATED 100,570
3,279 NUCOR CORPORATION 194,182
1,573 PRECISION CASTPARTS CORPORATION 218,175
997 TITANIUM METALS CORPORATION<< 26,371
1,345 UNITED STATES STEEL CORPORATION 162,624
1,054,958
-------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES: 0.41%
7,802 CBS CORPORATION CLASS B 212,605
1,020 E.W. SCRIPPS COMPANY CLASS A 45,910
2,643 GANNETT COMPANY INCORPORATED 103,077
3,747 MCGRAW-HILL COMPANIES INCORPORATED 164,156
432 MEREDITH CORPORATION 23,751
1,638 NEW YORK TIMES COMPANY CLASS A 28,714
2,444 RR DONNELLEY & SONS COMPANY 92,237
7,474 VIACOM INCORPORATED CLASS B+<< 328,258
66 WASHINGTON POST COMPANY CLASS B 52,234
1,050,942
-------------
RAILROAD TRANSPORTATION: 0.43%
3,394 BURLINGTON NORTHERN SANTA FE CORPORATION 282,483
4,788 CSX CORPORATION 210,576
4,410 NORFOLK SOUTHERN CORPORATION 222,440
2,991 UNION PACIFIC CORPORATION 375,729
1,091,228
-------------
REAL ESTATE: 0.02%
2,254 CB RICHARD ELLIS GROUP INCORPORATED CLASS A+<< 48,574
-------------
RUBBER & MISCELLANEOUS PLASTICS PRODUCTS: 0.05%
1,839 SEALED AIR CORPORATION 42,554
2,731 THE GOODYEAR TIRE & RUBBER COMPANY+ 77,069
119,623
-------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 1.76%
2,641 AMERIPRISE FINANCIAL INCORPORATED 145,546
1,315 BEAR STEARNS COMPANIES INCORPORATED<< 116,049
10,668 CHARLES SCHWAB CORPORATION 272,567
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 77
VT ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES (continued)
623 CME GROUP INCORPORATED $ 427,378
4,826 E*TRADE FINANCIAL CORPORATION+<< 17,132
984 FEDERATED INVESTORS INCORPORATED CLASS B 40,501
1,841 FRANKLIN RESOURCES INCORPORATED 210,666
4,529 GOLDMAN SACHS GROUP INCORPORATED 973,961
792 INTERCONTINENTAL EXCHANGE INCORPORATED+<< 152,460
1,529 LEGG MASON INCORPORATED 111,846
6,036 LEHMAN BROTHERS HOLDINGS INCORPORATED<< 394,996
9,749 MERRILL LYNCH & COMPANY INCORPORATED 523,326
12,086 MORGAN STANLEY 641,887
3,018 NYSE EURONEXT INCORPORATED 264,890
3,007 T. ROWE PRICE GROUP INCORPORATED 183,066
4,476,271
-------------
STONE, CLAY, GLASS & CONCRETE PRODUCTS: 0.17%
17,947 CORNING INCORPORATED 430,549
-------------
TOBACCO PRODUCTS: 0.80%
23,989 ALTRIA GROUP INCORPORATED 1,813,089
1,948 REYNOLDS AMERICAN INCORPORATED<< 128,490
1,784 UST INCORPORATED<< 97,763
2,039,342
-------------
TRANSPORTATION BY AIR: 0.04%
8,360 SOUTHWEST AIRLINES COMPANY 101,992
-------------
TRANSPORTATION EQUIPMENT: 1.87%
8,827 BOEING COMPANY 772,009
1,001 BRUNSWICK CORPORATION 17,067
24,034 FORD MOTOR COMPANY+ 161,749
4,582 GENERAL DYNAMICS CORPORATION 407,752
6,446 GENERAL MOTORS CORPORATION 160,441
1,912 GENUINE PARTS COMPANY 88,526
1,422 GOODRICH CORPORATION 100,407
2,750 HARLEY-DAVIDSON INCORPORATED 128,453
8,505 HONEYWELL INTERNATIONAL INCORPORATED 523,653
2,065 ITT CORPORATION 136,373
6,763 JOHNSON CONTROLS INCORPORATED 243,739
3,952 LOCKHEED MARTIN CORPORATION 415,988
3,853 NORTHROP GRUMMAN CORPORATION 303,000
4,195 PACCAR INCORPORATED 228,544
2,838 TEXTRON INCORPORATED 202,349
11,258 UNITED TECHNOLOGIES CORPORATION 861,687
4,751,737
-------------
TRANSPORTATION SERVICES: 0.08%
1,933 C.H. ROBINSON WORLDWIDE INCORPORATED 104,614
2,427 EXPEDITORS INTERNATIONAL OF WASHINGTON INCORPORATED 108,438
213,052
-------------
TRAVEL & RECREATION: 0.12%
4,974 CARNIVAL CORPORATION 221,293
2,365 EXPEDIA INCORPORATED+ 74,781
296,074
-------------
78 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
WHOLESALE TRADE NON-DURABLE GOODS: 0.39%
1,912 AMERISOURCEBERGEN CORPORATION $ 85,791
984 BROWN-FORMAN CORPORATION CLASS B 72,924
1,498 DEAN FOODS COMPANY+ 38,738
3,295 MCKESSON CORPORATION 215,855
4,373 NIKE INCORPORATED CLASS B 280,922
2,407 SUPERVALU INCORPORATED 90,311
6,926 SYSCO CORPORATION 216,160
1,000,701
-------------
WHOLESALE TRADE-DURABLE GOODS: 0.18%
4,819 KIMBERLY-CLARK CORPORATION 334,149
1,592 PATTERSON COMPANIES INCORPORATED+<< 54,048
767 W.W. GRAINGER INCORPORATED 67,128
455,325
-------------
TOTAL COMMON STOCKS (COST $120,808,189) 146,518,658
-------------
PRINCIPAL INTEREST RATE MATURITY DATE
US TREASURY SECURITIES: 37.41%
US TREASURY BONDS: 37.41%
$ 7,101,000 US TREASURY BOND<< 5.50% 08/15/2028 8,040,775
6,641,000 US TREASURY BOND<< 5.25 11/15/2028 7,306,654
6,970,000 US TREASURY BOND<< 5.25 02/15/2029 7,667,544
6,511,000 US TREASURY BOND<< 6.13 08/15/2029 7,965,290
10,538,000 US TREASURY BOND<< 6.25 05/15/2030 13,151,097
10,804,000 US TREASURY BOND<< 5.38 02/15/2031 12,172,229
17,266,000 US TREASURY BOND<< 4.50 02/15/2036 17,353,677
10,067,000 US TREASURY BOND<< 4.75 02/15/2037 10,535,740
9,962,000 US TREASURY BOND<< 5.00 05/15/2037 10,857,793
95,050,799
-------------
TOTAL US TREASURY SECURITIES (COST $92,259,609) 95,050,799
-------------
COLLATERAL FOR SECURITIES LENDING: 41.84%
COLLATERAL INVESTED IN OTHER ASSETS: 41.84%
5,538 AMERICAN GENERAL FINANCE CORPORATION+/- 5.33 01/18/2008 5,538
2,013,773 ATLAS CAPITAL FUNDING CORPORATION+/-++ 4.85 04/25/2008 2,010,913
4,530,989 BARCLAYS REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $4,532,160) 4.65 01/02/2008 4,530,989
2,517,216 BASF FINANCE EUROPE NV+/-++ 5.17 10/17/2008 2,514,447
2,517,216 BEAR STEARNS & COMPANY INCORPORATED INTERNATIONAL REPURCHASE
AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $2,517,852) 4.55 01/02/2008 2,517,216
5,034,432 BEAR STEARNS & COMPANY INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $5,035,719) 4.60 01/02/2008 5,034,432
1,510,330 BNP PARIBAS+/- 4.84 11/07/2008 1,507,732
7,551,649 BNP PARIBAS REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $7,553,570) 4.58 01/02/2008 7,551,649
1,510,330 CHARIOT FUNDING LLC++ 5.61 01/16/2008 1,507,566
1,434,813 CHEYNE FINANCE LLC+/-++^^(A)(I) 4.61 02/25/2008 1,291,332
5,034,432 CITIGROUP REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $5,035,724) 4.62 01/02/2008 5,034,432
1,132,747 CREDIT AGRICOLE SA+/- 5.02 02/25/2008 1,132,329
10,068,865 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $10,071,438) 4.60 01/02/2008 10,068,865
1,258,608 CULLINAN FINANCE CORPORATION+/-++ 4.57 08/04/2008 1,251,736
5,034,432 DEUTSCHE BANK REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $5,035,713) 4.58 01/02/2008 5,034,432
805,509 GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY+/- 5.11 06/16/2008 805,509
1,510,330 GOVCO LLC++ 4.41 01/25/2008 1,505,936
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 79
VT ASSET ALLOCATION FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 1,510,330 GOVCO LLC 5.30% 01/03/2008 $ 1,510,148
251,722 GREENWICH CAPITAL REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $251,786) 4.57 01/02/2008 251,722
1,762,051 ING (USA) ANNUITY & LIFE INSURANCE COMPANY+/- 5.10 08/16/2008 1,762,051
1,440,707 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $1,441,079) 4.65 01/02/2008 1,440,707
10,068,865 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $10,071,449) 4.62 01/02/2008 10,068,865
1,812,396 KESTREL FUNDING US LLC+/-++ 4.84 02/25/2008 1,812,088
3,775,824 LIQUID FUNDING LIMITED+/-++ 5.11 06/11/2008 3,778,845
50,344 M&I MARSHALL & ILSLEY BANK SERIES BKNT+/- 4.84 02/15/2008 50,320
37,758 MERRILL LYNCH & COMPANY INCORPORATED SERIES MTNB+/- 5.45 01/02/2008 37,758
1,258,608 METLIFE GLOBAL FUNDING I+/-++ 4.89 10/21/2008 1,256,607
755,165 MORGAN STANLEY+/- 4.57 04/07/2008 755,165
774,044 MORGAN STANLEY+/- 5.15 10/15/2008 774,044
9,171,587 MORGAN STANLEY REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $9,173,921) 4.58 01/02/2008 9,171,587
1,258,608 NATEXIS BANQUES POPULAIRES+/-++ 4.90 09/08/2008 1,258,608
896,129 PREMIUM ASSET TRUST+/-++ 5.29 07/15/2008 896,066
2,363,918 RACERS TRUST SERIES 2004-6-MM+/-++ 5.05 03/22/2008 2,363,918
1,006,886 SLM CORPORATION+/-++ 5.23 05/12/2008 1,000,936
2,013,773 STANFIELD VICTORIA FUNDING LLC+/-++(K)(A)(I) 5.23 04/03/2008 1,994,058
503,443 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 5.51 01/18/2008 502,391
967,568 THE TRAVELERS INSURANCE COMPANY+/- 5.31 02/08/2008 967,548
5,034,432 TRANSAMERICA OCCIDENTAL LIFE INSURANCE+/- 4.70 08/01/2008 5,034,432
1,258,608 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+/-++ 5.26 10/08/2008 1,257,501
2,517,216 VERSAILLES CDS LLC++ 6.15 01/04/2008 2,516,539
1,258,608 VICTORIA FINANCE LLC+/-++(K)(A)(I) 4.60 08/07/2008 1,258,608
1,258,608 VICTORIA FINANCE LLC+/-++(K)(A)(I) 5.27 05/02/2008 1,258,608
106,284,173
-------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $106,393,527) 106,284,173
-------------
SHARES
SHORT-TERM INVESTMENTS: 4.94%
MUTUAL FUNDS: 3.17%
8,059,090 WELLS FARGO ADVANTAGE MONEY MARKET TRUST+++~ 8,059,090
-------------
PRINCIPAL INTEREST RATE MATURITY DATE
US TREASURY BILLS: 1.77%
$ 55,000 US TREASURY BILL^# 3.81 02/07/2008 54,837
3,050,000 US TREASURY BILL^ 3.92 02/07/2008 3,040,963
100,000 US TREASURY BILL^ 4.73 02/07/2008 99,703
415,000 US TREASURY BILL^# 3.11 05/08/2008 410,257
60,000 US TREASURY BILL^ 3.11 05/08/2008 59,314
95,000 US TREASURY BILL^ 3.12 05/08/2008 93,914
730,000 US TREASURY BILL^ 3.41 05/08/2008 721,656
4,480,644
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $12,536,407) 12,539,734
-------------
TOTAL INVESTMENTS IN SECURITIES
(COST $331,997,732)* 141.86% $ 360,393,364
OTHER ASSETS AND LIABILITIES, NET (41.86) (106,339,074)
------ -------------
TOTAL NET ASSETS 100.00% $ 254,054,290
------ -------------
80 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
- --------------------------------------------------------------------------------
+ Non-income earning securities.
<< All or a portion of this security is on loan.
### Long-term security of an affiliate of the Fund with a cost of $949,409.
+++ Short-term security of an affiliate of the Fund with a cost of $8,059,090.
+/- 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.
~ 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.
^ Zero coupon bond. Interest rate presented is yield to maturity.
^^ This security is currently in default with regards to scheduled interest
and/or principal payments.
%% Securities issued on a when-issued (TBA) basis.
# Security pledged as collateral for futures transactions.
(K) Subsequent to December 31, 2007, this security has been classified as a
defaulted security.
(A) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
(I) Illiquid security.
* Cost for federal income tax purposes is $333,119,295 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 45,123,392
Gross unrealized depreciation (17,849,323)
------------
Net unrealized appreciation (depreciation) $ 27,274,069
The accompanying notes are an integral part of these financial statements.
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 81
VT C&B LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCKS: 98.77%
APPAREL & ACCESSORY STORES: 1.92%
12,803 KOHL'S CORPORATION+ $ 586,377
-------------
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS: 2.75%
23,160 JONES APPAREL GROUP INCORPORATED 370,328
6,830 VF CORPORATION 468,948
839,276
-------------
BUSINESS SERVICES: 6.56%
26,850 MICROSOFT CORPORATION 955,860
21,940 OMNICOM GROUP INCORPORATED 1,042,808
1,998,668
-------------
CHEMICALS & ALLIED PRODUCTS: 11.52%
13,570 AVERY DENNISON CORPORATION 721,110
8,410 AVON PRODUCTS INCORPORATED 332,447
11,040 COLGATE-PALMOLIVE COMPANY 860,678
4,350 HENKEL KGAA ADR 221,961
9,300 HENKEL KGAA ADR PREFERRED 521,448
12,770 JOHNSON & Johnson 851,759
3,509,403
-------------
COMMUNICATIONS: 3.32%
27,092 VODAFONE GROUP PLC ADR 1,011,073
-------------
DEPOSITORY INSTITUTIONS: 8.47%
20,170 BANK OF AMERICA CORPORATIOn 832,214
11,825 JPMORGAN CHASE & Company 516,161
15,170 STATE STREET CORPORATION 1,231,804
2,580,179
-------------
EATING & DRINKING PLACES: 3.01%
11,100 DARDEN RESTAURANTS INCORPORATED 307,581
10,341 MCDONALD'S CORPORATION 609,188
916,769
-------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 6.78%
41,440 FLEXTRONICS INTERNATIONAL LIMITED+ 499,766
21,290 GENERAL ELECTRIC COMPANY 789,220
20,510 MOLEX INCORPORATED CLASS A 538,798
6,422 TYCO ELECTRONICS LIMITED 238,449
2,066,233
-------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT: 1.94%
11,030 ILLINOIS TOOL WORKS INCORPORATED 590,546
-------------
FOOD & KINDRED PRODUCTS: 3.57%
9,480 ANHEUSER-BUSCH COMPANIES INCORPORATED 496,183
6,880 DIAGEO PLC ADR 590,510
1,086,693
-------------
GENERAL MERCHANDISE STORES: 2.05%
13,160 WAL-MART STORES INCORPORATED 625,495
-------------
82 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT C&B LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
HEALTH SERVICES: 1.25%
6,600 CARDINAL HEALTH INCORPORATED $ 381,150
-------------
HOLDING & OTHER INVESTMENT OFFICES: 3.42%
220 BERKSHIRE HATHAWAY INCORPORATED CLASS B+ 1,041,920
-------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 8.98%
18,640 DELL INCORPORATED+ 456,866
11,500 DIEBOLD INCORPORATED 333,270
17,520 DOVER CORPORATION 807,497
5,290 EATON CORPORATION 512,866
16,430 PITNEY BOWES INCORPORATED 624,997
2,735,496
-------------
INSURANCE AGENTS, BROKERS & SERVICE: 2.56%
20,560 WILLIS GROUP HOLDINGS LIMITED 780,663
-------------
INSURANCE CARRIERS: 6.77%
15,380 ALLSTATE CORPORATION 803,297
18,110 AMERICAN INTERNATIONAL GROUP INCORPORATED 1,055,813
10,930 MBIA INCORPORATED<< 203,626
2,062,736
-------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 5.50%
3,790 BECTON DICKINSON & Company 316,768
37,360 BOSTON SCIENTIFIC CORPORATION+ 434,497
17,490 QUEST DIAGNOSTICS INCORPORATED<< 925,221
1,676,486
-------------
MEDICAL PRODUCTS: 1.31%
6,870 BAXTER INTERNATIONAL INCORPORATED 398,804
-------------
MISCELLANEOUS MANUFACTURING INDUSTRIES: 1.68%
12,922 TYCO INTERNATIONAL LIMITED 512,357
-------------
MISCELLANEOUS RETAIL: 1.75%
21,100 OFFICE DEPOT INCORPORATED+ 293,501
14,880 ZALE CORPORATION+<< 238,973
532,474
-------------
NON-DEPOSITORY CREDIT INSTITUTIONS: 4.28%
18,350 AMERICAN EXPRESS COMPANY 954,567
39,100 COUNTRYWIDE FINANCIAL CORPORATION<< 349,554
1,304,121
-------------
PETROLEUM REFINING & RELATED INDUSTRIES: 3.84%
12,490 EXXON MOBIL CORPORATION 1,170,188
-------------
PRIMARY METAL INDUSTRIES: 1.12%
6,590 HUBBELL INCORPORATED CLASS B 340,044
-------------
TRAVEL & RECREATION: 1.93%
13,210 CARNIVAL CORPORATION 587,713
-------------
WHOLESALE TRADE-DURABLE GOODS: 2.49%
10,930 KIMBERLY-CLARK CORPORATION 757,890
-------------
TOTAL COMMON STOCKS (COST $28,852,385)
30,092,754
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 83
VT C&B LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLLATERAL FOR SECURITIES LENDING: 5.60%
COLLATERAL INVESTED IN OTHER ASSETS: 5.60%
$ 10,471 BANCO SANTANDER TOTTA LOAN+++/- 5.04% 10/15/2008 $ 10,455
10,471 BANK OF IRELAND+++/- 4.86 10/14/2008 10,460
37,696 BARCLAYS REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $37,706) 4.65 01/02/2008 37,696
20,942 BEAR STEARNS & COMPANY INCORPORATED INTERNATIONAL REPURCHASE
AGREEMENT - 102% COLLATERALIZED (MATURITY VALUE $20,947) 4.55 01/02/2008 20,942
110,994 BEAR STEARNS & COMPANY INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $111,022) 4.60 01/02/2008 110,994
8,377 BNP PARIBAS+/- 4.84 11/07/2008 8,362
20,942 BNP PARIBAS REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $20,947) 4.58 01/02/2008 20,942
10,471 CAFCO LLC 5.41 01/09/2008 10,461
29,319 CHARIOT FUNDING LLC++ 5.61 01/16/2008 29,265
27,225 CHEYNE FINANCE LLC+++/-^^(A)(I) 4.61 02/25/2008 24,502
20,942 CHEYNE FINANCE LLC+++/-^^(A)(I) 4.67 05/19/2008 18,848
158,907 CITIGROUP REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $158,948) 4.62 01/02/2008 158,907
2,094 COMERICA BANK+/- 5.24 02/08/2008 2,093
119,330 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $119,360) 4.60 01/02/2008 119,330
10,471 CULLINAN FINANCE CORPORATION+++/- 4.57 02/12/2008 10,460
31,413 CULLINAN FINANCE CORPORATION+++/- 4.57 08/04/2008 31,242
25,131 CULLINAN FINANCE CORPORATION+++/- 4.85 02/25/2008 25,131
94,240 DEUTSCHE BANK REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $94,264) 4.58 01/02/2008 94,240
41,884 FIVE FINANCE INCORPORATED+++/- 5.18 07/09/2008 41,590
25,550 GALLEON CAPITAL LLC++ 4.60 01/02/2008 25,549
29,319 GOVCO LLC++ 4.41 01/25/2008 29,234
17,591 GOVCO LLC 5.30 01/03/2008 17,589
6,283 GRAMPIAN FUNDING LIMITED 5.11 01/03/2008 6,282
81,675 GREENWICH CAPITAL REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $81,696) 4.57 01/02/2008 81,675
4,188 HARRIER FINANCE FUNDING LLC+/- 4.88 04/25/2008 4,188
10,471 HARRIER FINANCE FUNDING LLC+++/- 5.20 01/11/2008 10,469
27,225 ING (USA) ANNUITY & LIFE INSURANCE COMPANY+/- 5.10 08/16/2008 27,225
10,471 INTESA BANK (IRELAND) PLC+++/- 4.88 10/24/2008 10,458
221,987 JPMORGAN CHASE REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $222,044) 4.62 01/02/2008 221,987
3,351 JUPITER SECURITIZATION CORPORATION 5.41 01/17/2008 3,344
24,084 KESTREL FUNDING US LLC+++/- 4.84 02/25/2008 24,079
4,188 KESTREL FUNDING US LLC+/- 4.88 04/25/2008 4,188
20,942 LINKS FINANCE LLC+++/- 4.57 08/15/2008 20,702
30,994 LIQUID FUNDING LIMITED+++/- 5.11 06/11/2008 31,019
1,937 MORGAN STANLEY+/- 5.15 10/15/2008 1,937
185,474 MORGAN STANLEY REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $185,521) 4.58 01/02/2008 185,474
20,942 NORTHERN ROCK PLC+++/- 5.27 10/03/2008 20,742
1,694 RACERS TRUST SERIES 2004-6-MM+++/- 5.05 03/22/2008 1,694
15,078 SEDNA FINANCE INCORPORATED+++/- 5.21 04/10/2008 15,030
3,351 SHEFFIELD RECEIVABLES CORPORATION++ 5.85 01/04/2008 3,350
10,681 SHIPROCK FINANCE SERIES 2007-4A+++/- 5.10 04/11/2008 10,681
8,167 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 4.82 02/29/2008 8,161
10,471 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 5.22 02/04/2008 10,466
8,377 SLM CORPORATION+++/- 5.23 05/12/2008 8,327
20,942 STANFIELD VICTORIA FUNDING LLC+++/-(K)(A)(I) 4.88 02/15/2008 20,806
12,984 STANFIELD VICTORIA FUNDING LLC+++/-(K)(A)(I) 5.23 04/03/2008 12,857
4,499 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 5.51 01/18/2008 4,489
84 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT C&B LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 2,421 THE TRAVELERS INSURANCE COMPANY+/- 5.31% 02/08/2008 $ 2,421
10,471 UNICREDITO ITALIANO BANK (IRELAND)+/- 5.05 10/14/2008 10,460
10,471 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+++/- 5.26 10/08/2008 10,462
26,806 VERSAILLES CDS LLC++ 6.15 01/04/2008 26,799
18,010 VICTORIA FINANCE LLC+++/-(K)(A)(I) 4.57 07/28/2008 17,583
10,471 VICTORIA FINANCE LLC+++/-(K)(A)(I) 4.60 08/07/2008 10,471
20,942 WHITE PINE FINANCE LLC+++/-(K) 4.98 02/22/2008 20,889
1,707,007
-------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $1,711,076) 1,707,007
-------------
SHARES
SHORT-TERM INVESTMENTS: 0.89%
268,536 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++ 268,536
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $268,536) 268,536
-------------
TOTAL INVESTMENTS IN SECURITIES
(COST $30,831,997)* 105.26% $ 32,068,297
OTHER ASSETS AND LIABILITIES, NET (5.26) (1,601,207)
------ -------------
TOTAL NET ASSETS 100.00% $ 30,467,090
------ -------------
- --------------------------------------------------------------------------------
+ Non-income earning securities.
<< All or a portion of this security is on loan.
++ Securities that may be resold to "qualified institutional buyers" under
rule 144A or securities offered pursuant to section 4(2) of the Securities
Act of 1933, as amended.
+/- Variable rate investments.
~ 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.
^^ This security is currently in default with regards to scheduled interest
and/or principal payments.
(K) Subsequent to December 31, 2007, this security has been classified as a
defaulted security.
(A) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
(I) Illiquid security.
+++ Security of an affiliate of the Fund with a cost of $268,536.
* Cost for federal income tax purposes is $30,872,819 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 3,919,448
Gross unrealized depreciation (2,723,970)
-----------
Net unrealized appreciation (depreciation) $ 1,195,478
The accompanying notes are an integral part of these financial statements.
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 85
VT DISCOVERY FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCKS: 98.14%
AEROSPACE, DEFENSE: 3.16%
142,533 BE AEROSPACE INCORPORATED $ 7,539,996
-------------
AMUSEMENT & RECREATION SERVICES: 2.78%
62,387 LIFE TIME FITNESS INCORPORATED+<< 3,099,386
96,500 WMS INDUSTRIES INCORPORATED+ 3,535,760
6,635,146
-------------
APPAREL & ACCESSORY STORES: 2.56%
94,900 GUESS? INCORPORATED 3,595,761
92,100 URBAN OUTFITTERS INCORPORATED+ 2,510,646
6,106,407
-------------
AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS: 0.60%
82,700 PENSKE AUTO GROUP INCORPORATED<< 1,443,942
-------------
BUSINESS SERVICES: 17.65%
177,000 ACTIVISION INCORPORATED+ 5,256,900
46,900 ANSYS INCORPORATED+ 1,944,474
56,722 CERNER CORPORATION+<< 3,199,121
72,900 CITRIX SYSTEMS INCORPORATED+ 2,770,929
128,600 COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION CLASS A 4,364,684
111,500 COMMVAULT SYSTEMS INCORPORATED 2,361,570
47,700 CONCUR TECHNOLOGIES INCORPORATED+ 1,727,217
83,900 DOUBLE-TAKE SOFTWARE INCORPORATED 1,822,308
140,302 F5 NETWORKS INCORPORATED 4,001,413
204,800 MENTOR GRAPHICS CORPORATION+<< 2,207,744
129,800 OMNITURE INCORPORATED<< 4,321,042
91,700 PHASE FORWARD INCORPORATED 1,994,475
186,700 QUEST SOFTWARE INCORPORATED 3,442,748
158,650 THE TRIZETTO GROUP INCORPORATED 2,755,751
42,170,376
-------------
CHEMICALS & ALLIED PRODUCTS: 5.30%
49,300 BIOMARIN PHARMACEUTICAL INCORPORATED+ 1,745,220
53,600 CHARLES RIVER LABORATORIES INTERNATIONAL INCORPORATED<< 3,526,880
102,018 FMC CORPORATION 5,565,082
129,900 MYLAN LABORATORIES INCORPORATED<< 1,826,394
12,663,576
-------------
COAL MINING: 1.43%
75,800 ARCH COAL INCORPORATED<< 3,405,694
-------------
COMMUNICATIONS: 13.90%
90,800 AMERICAN TOWER CORPORATION CLASS A+<< 3,868,080
280,083 BRIGHTPOINT INCORPORATED 4,302,075
89,163 EQUINIX INCORPORATED<< 9,011,704
225,500 FOUNDRY NETWORKS INCORPORATED 3,950,760
110,979 NII HOLDINGS INCORPORATED 5,362,505
198,600 SBA COMMUNICATIONS CORPORATION 6,720,624
33,215,748
-------------
CONSTRUCTION SPECIAL TRADE CONTRACTORS: 1.14%
123,800 ACERGY SA 2,719,886
-------------
86 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT DISCOVERY FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
DEPOSITORY INSTITUTIONS: 1.63%
45,100 ASTORIA FINANCIAL CORPORATION $ 1,049,477
162,500 NEW YORK COMMUNITY BANCORP INCORPORATED<< 2,856,750
3,906,227
-------------
E-COMMERCE/SERVICES: 1.76%
112,100 GSI COMMERCE INCORPORATED+<< 2,185,950
17,500 PRICELINE.COM INCORPORATED+<< 2,010,050
4,196,000
-------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 7.27%
60,157 CIENA CORPORATION+<< 2,051,955
33,700 LOGITECH INTERNATIONAL SA<< 1,234,768
114,900 NETLOGIC MICROSYSTEMS INCORPORATED<< 3,699,780
67,588 NVIDIA CORPORATION+ 2,299,344
174,450 SOLERA HOLDINGS INCORPORATED+ 4,322,871
90,100 TESSERA TECHNOLOGIES INCORPORATED 3,748,160
17,356,878
-------------
ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES: 1.45%
89,400 KBR INCORPORATED+ 3,468,720
-------------
FOOD & KINDRED PRODUCTS: 1.28%
52,650 CENTRAL EUROPEAN DISTRIBUTION CORPORATION<< 3,057,912
-------------
FOOTWEAR: 1.00%
64,600 CROCS INCORPORATED<< 2,377,926
-------------
HEALTH SERVICES: 2.02%
27,300 COVANCE INCORPORATED<< 2,364,726
36,000 PEDIATRIX MEDICAL GROUP INCORPORATED 2,453,400
4,818,126
-------------
HEAVY CONSTRUCTION OTHER THAN BUILDING CONSTRUCTION CONTRACTS: 3.55%
29,509 FOSTER WHEELER LIMITED 4,574,485
66,232 MCDERMOTT INTERNATIONAL INCORPORATED 3,909,675
8,484,160
-------------
HOLDING & OTHER INVESTMENT OFFICES: 0.91%
142,600 KITE REALTY GROUP TRUST 2,177,502
-------------
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES: 0.93%
161,885 HHGREGG INCORPORATED+ 2,227,538
-------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 2.87%
84,200 DATA DOMAIN INCORPORATED<< 2,217,828
74,700 GAMESTOP CORPORATION CLASS A+ 4,639,617
6,857,445
-------------
INSURANCE CARRIERS: 2.86%
75,400 ASSURANT INCORPORATED<< 5,044,260
43,100 ENDURANCE SPECIALTY HOLDINGS LIMITED 1,798,563
6,842,823
-------------
JUSTICE, PUBLIC ORDER & SAFETY: 1.34%
108,500 CORRECTIONS CORPORATION OF AMERICA 3,201,835
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 87
VT DISCOVERY FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 7.66%
36,200 C.R. BARD INCORPORATED $ 3,431,760
240,600 EV3 INCORPORATED+<< 3,058,026
32,200 HAEMONETICS CORPORATION<< 2,029,244
42,068 HOLOGIC INCORPORATED<< 2,887,548
56,514 ICON PLC 3,495,956
116,400 WRIGHT MEDICAL GROUP INCORPORATED<< 3,395,388
18,297,922
-------------
MEDICAL MANAGEMENT SERVICES: 1.44%
58,100 COVENTRY HEALTH CARE INCORPORATED+ 3,442,425
-------------
OIL & GAS EXTRACTION: 6.63%
25,200 ATWOOD OCEANICS INCORPORATED<< 2,526,048
42,200 CARRIZO OIL & GAS INCORPORATED 2,310,450
69,600 FOREST OIL CORPORATION 3,538,464
87,100 NEWFIELD EXPLORATION COMPANY+ 4,590,170
53,300 PLAINS EXPLORATION & PRODUCTION COMPANY 2,878,200
15,843,332
-------------
REAL ESTATE: 1.46%
92,900 GAFISA SA<< 3,479,105
-------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 1.26%
96,000 MF GLOBAL LIMITED 3,021,120
-------------
TRANSPORTATION EQUIPMENT: 2.30%
159,000 SPIRIT AEROSYSTEMS HOLDINGS INCORPORATED 5,485,500
-------------
TOTAL COMMON STOCKS (COST $204,969,275) 234,443,267
-------------
RIGHTS: 0.00%
90,400 SEAGATE TECHNOLOGY RIGHTS+(A)(I) 0
TOTAL RIGHTS (COST $0) 0
-------------
PRINCIPAL INTEREST RATE MATURITY DATE
COLLATERAL FOR SECURITIES LENDING: 19.39%
COLLATERAL INVESTED IN OTHER ASSETS: 19.39%
$ 284,140 BANCO SANTANDER TOTTA LOAN+++/- 5.04% 10/15/2008 283,711
284,140 BANK OF IRELAND+++/- 4.86 10/14/2008 283,827
1,022,903 BARCLAYS REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $1,023,167) 4.65 01/02/2008 1,022,903
568,280 BEAR STEARNS & COMPANY INCORPORATED INTERNATIONAL REPURCHASE
AGREEMENT - 102% COLLATERALIZED (MATURITY VALUE $568,424) 4.55 01/02/2008 568,280
3,011,883 BEAR STEARNS & COMPANY INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $3,012,653) 4.60 01/02/2008 3,011,883
227,312 BNP PARIBAS+/- 4.84 11/07/2008 226,921
568,280 BNP PARIBAS REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $568,425) 4.58 01/02/2008 568,280
284,140 CAFCO LLC 5.41 01/09/2008 283,867
795,592 CHARIOT FUNDING LLC++ 5.61 01/16/2008 794,136
738,764 CHEYNE FINANCE LLC+++/-^^(A)(I) 4.61 02/25/2008 664,887
568,280 CHEYNE FINANCE LLC+++/-^^(A)(I) 4.67 05/19/2008 511,452
4,312,047 CITIGROUP REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $4,313,154) 4.62 01/02/2008 4,312,047
56,828 COMERICA BANK+/- 5.24 02/08/2008 56,793
3,238,085 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT
102% COLLATERALIZED (MATURITY VALUE $3,238,913) 4.60 01/02/2008 3,238,085
284,140 CULLINAN FINANCE CORPORATION+++/- 4.57 02/12/2008 283,833
88 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT DISCOVERY FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 852,420 CULLINAN FINANCE CORPORATION+++/- 4.57% 08/04/2008 $ 847,765
681,936 CULLINAN FINANCE CORPORATION+++/- 4.85 02/25/2008 681,936
2,557,259 DEUTSCHE BANK REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $2,557,910) 4.58 01/02/2008 2,557,259
1,136,559 FIVE FINANCE INCORPORATED+++/- 5.18 07/09/2008 1,128,558
693,301 GALLEON CAPITAL LLC++ 4.60 01/02/2008 693,301
795,592 GOVCO LLC++ 4.41 01/25/2008 793,276
477,355 GOVCO LLC 5.30 01/03/2008 477,298
170,484 GRAMPIAN FUNDING LIMITED 5.11 01/03/2008 170,463
2,216,291 GREENWICH CAPITAL REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $2,216,854) 4.57 01/02/2008 2,216,291
113,656 HARRIER FINANCE FUNDING LLC+/- 4.88 04/25/2008 113,656
284,140 HARRIER FINANCE FUNDING LLC+++/- 5.20 01/11/2008 284,089
738,764 ING (USA) ANNUITY & LIFE INSURANCE COMPANY+/- 5.10 08/16/2008 738,764
284,140 INTESA BANK (IRELAND) PLC+++/- 4.88 10/24/2008 283,785
6,023,765 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $6,025,311) 4.62 01/02/2008 6,023,765
90,925 JUPITER SECURITIZATION CORPORATION 5.41 01/17/2008 90,747
653,522 KESTREL FUNDING US LLC+++/- 4.84 02/25/2008 653,411
113,656 KESTREL FUNDING US LLC+/- 4.88 04/25/2008 113,656
568,280 LINKS FINANCE LLC+++/- 4.57 08/15/2008 561,767
841,054 LIQUID FUNDING LIMITED+++/- 5.11 06/11/2008 841,727
52,566 MORGAN STANLEY+/- 5.15 10/15/2008 52,566
5,032,944 MORGAN STANLEY REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $5,034,226) 4.58 01/02/2008 5,032,944
568,280 NORTHERN ROCK PLC+++/- 5.27 10/03/2008 562,847
45,974 RACERS TRUST SERIES 2004-6-MM+++/- 5.05 03/22/2008 45,974
409,161 SEDNA FINANCE INCORPORATED+++/- 5.21 04/10/2008 407,860
90,925 SHEFFIELD RECEIVABLES CORPORATION++ 5.85 01/04/2008 90,900
289,823 SHIPROCK FINANCE SERIES 2007-4A+++/- 5.10 04/11/2008 289,823
221,629 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 4.82 02/29/2008 221,464
284,140 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 5.22 02/04/2008 284,015
227,312 SLM CORPORATION+++/- 5.23 05/12/2008 225,968
568,280 STANFIELD VICTORIA FUNDING LLC+++/-(K)(A)(I) 4.88 02/15/2008 564,575
352,333 STANFIELD VICTORIA FUNDING LLC+++/-(K)(A)(I) 5.23 04/03/2008 348,884
122,078 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 5.51 01/18/2008 121,823
65,705 THE TRAVELERS INSURANCE COMPANY+/- 5.31 02/08/2008 65,703
284,140 UNICREDITO ITALIANO BANK (IRELAND)+/- 5.05 10/14/2008 283,844
284,140 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+++/- 5.26 10/08/2008 283,890
727,398 VERSAILLES CDS LLC++ 6.15 01/04/2008 727,203
488,721 VICTORIA FINANCE LLC+++/-(K)(A)(I) 4.57 07/28/2008 477,118
284,140 VICTORIA FINANCE LLC+++/-(K)(A)(I) 4.60 08/07/2008 284,140
568,280 WHITE PINE FINANCE LLC+++/-(K) 4.98 02/22/2008 566,714
46,320,674
-------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $46,443,363) 46,320,674
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 89
VT DISCOVERY FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
SHORT-TERM INVESTMENTS: 2.51%
5,993,079 WELLS FARGO ADVANTAGE MONEY MARKET TRUST+++~ $ 5,993,079
TOTAL SHORT-TERM INVESTMENTS (COST $5,993,079) 5,993,079
-------------
TOTAL INVESTMENTS IN SECURITIES
(COST $257,405,717)* 120.04% $ 286,757,020
OTHER ASSETS AND LIABILITIES, NET (20.04) (47,863,329)
------ -------------
TOTAL NET ASSETS 100.00% $ 238,893,691
------ -------------
- --------------------------------------------------------------------------------
+ Non-income earning securities.
<< All or a portion of this security is on loan.
++ Securities that may be resold to "qualified institutional buyers" under
rule 144A or securities offered pursuant to section 4(2) of the Securities
Act of 1933, as amended.
+/- Variable rate investments.
+++ Security of an affiliate of the Fund with a cost of $5,993,079.
~ 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.
^^ This security is currently in default with regards to scheduled interest
and/or principal payments.
(K) Subsequent to December 31, 2007, this security has been classified as a
defaulted security.
(A) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
(I) Illiquid security.
* Cost for federal income tax purposes is $257,603,002 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 36,438,042
Gross unrealized depreciation (7,284,024)
------------
Net unrealized appreciation (depreciation) $ 29,154,018
The accompanying notes are an integral part of these financial statements.
90 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT EQUITY INCOME FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCKS: 98.58%
BUSINESS SERVICES: 2.24%
34,450 MICROSOFT CORPORATION $ 1,226,420
54,750 SYMANTEC CORPORATION+<< 883,665
2,110,085
-------------
CHEMICALS & ALLIED PRODUCTS: 12.12%
16,850 ABBOTT LABORATORIES 946,128
13,160 AIR PRODUCTS & CHEMICALS INCORPORATED 1,297,971
23,750 BRISTOL-MYERS SQUIBB COMPANY 629,850
10,075 COLGATE-PALMOLIVE COMPANY 785,447
25,300 E.I. DU PONT DE NEMOURS & COMPANY 1,115,477
15,045 JOHNSON & JOHNSON 1,003,502
66,280 PFIZER INCORPORATED 1,506,544
32,815 PROCTER & GAMBLE COMPANY 2,409,277
16,639 ROHM & HAAS COMPANY<< 883,032
18,775 WYETH 829,667
11,406,895
-------------
COMMUNICATIONS: 5.94%
78,920 AT&T INCORPORATED 3,279,915
52,924 VERIZON COMMUNICATIONS INCORPORATED 2,312,250
5,592,165
-------------
DEPOSITORY INSTITUTIONS: 12.47%
63,030 BANK OF AMERICA CORPORATION 2,600,618
22,801 BANK OF NEW YORK MELLON CORPORATION 1,111,777
67,990 CITIGROUP INCORPORATED 2,001,626
55,395 JPMORGAN CHASE & COMPANY 2,417,992
9,825 STATE STREET CORPORATION 797,790
40,425 US BANCORP 1,283,090
40,000 WACHOVIA CORPORATION 1,521,200
11,734,093
-------------
EATING & DRINKING PLACES: 1.23%
19,675 MCDONALD'S CORPORATION 1,159,054
-------------
ELECTRIC, GAS & SANITARY SERVICES: 5.72%
19,540 DOMINION RESOURCES INCORPORATED 927,173
200 EXELON CORPORATION 16,328
9,097 FIRSTENERGY CORPORATION 658,077
26,950 FPL GROUP INCORPORATED 1,826,671
33,200 MDU RESOURCES GROUP INCORPORATED 916,652
10,605 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED 1,041,835
5,386,736
-------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 6.71%
28,250 CISCO SYSTEMS INCORPORATED+ 764,728
23,515 EMERSON ELECTRIC COMPANY 1,332,360
82,480 GENERAL ELECTRIC COMPANY 3,057,534
30,125 NOKIA OYJ ADR 1,156,499
6,311,121
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 91
VT EQUITY INCOME FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT: 2.04%
18,900 COMMERCIAL METALS COMPANY $ 556,605
18,770 FORTUNE BRANDS INCORPORATED 1,358,197
1,914,802
-------------
FOOD & KINDRED PRODUCTS: 2.04%
12,284 KRAFT FOODS INCORPORATED CLASS A 400,827
20,040 PEPSICO INCORPORATED 1,521,036
1,921,863
-------------
FOOD STORES: 0.79%
21,700 SAFEWAY INCORPORATED 742,357
-------------
GENERAL MERCHANDISE STORES: 1.62%
30,440 TARGET CORPORATION 1,522,000
-------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 5.64%
12,459 3M COMPANY 1,050,543
37,890 HEWLETT-PACKARD COMPANY 1,912,687
44,665 INTEL CORPORATION 1,190,769
10,660 INTERNATIONAL BUSINESS MACHINES CORPORATION 1,152,346
5,306,345
-------------
INSURANCE CARRIERS: 7.52%
5,850 ALLSTATE CORPORATION 305,546
33,188 AMERICAN INTERNATIONAL GROUP INCORPORATED 1,934,860
28,125 METLIFE INCORPORATED 1,733,063
36,375 THE TRAVELERS COMPANIES INCORPORATED 1,956,975
13,075 WELLPOINT INCORPORATED+ 1,147,070
7,077,514
-------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 1.64%
6,640 BECTON DICKINSON & COMPANY 554,971
14,325 ROCKWELL AUTOMATION INCORPORATED 987,852
1,542,823
-------------
MEDICAL PRODUCTS: 0.86%
13,925 MERCK & COMPANY INCORPORATED 809,182
-------------
MISCELLANEOUS RETAIL: 0.87%
20,675 CVS CAREMARK CORPORATION 821,831
-------------
MOTION PICTURES: 1.50%
46,425 TIME WARNER INCORPORATED 766,477
20,100 WALT DISNEY COMPANY 648,828
1,415,305
-------------
NON-DEPOSITORY CREDIT INSTITUTIONS: 3.05%
21,825 AMERICAN CAPITAL STRATEGIES LIMITED<< 719,352
18,970 AMERICAN EXPRESS COMPANY 986,819
13,050 CAPITAL ONE FINANCIAL CORPORATION 616,743
30,875 CAPITALSOURCE INCORPORATED<< 543,091
2,866,005
-------------
92 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT EQUITY INCOME FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
OIL & GAS EXTRACTION: 2.57%
22,175 CHESAPEAKE ENERGY CORPORATION $ 869,260
30,875 HALLIBURTON COMPANY 1,170,471
6,900 TIDEWATER INCORPORATED 378,534
2,418,265
-------------
PETROLEUM REFINING & RELATED INDUSTRIES: 13.32%
35,900 CHEVRON CORPORATION 3,350,547
34,200 CONOCOPHILLIPS<< 3,019,860
48,289 Exxon Mobil Corporation 4,524,196
17,575 Marathon Oil Corporation 1,069,615
8,125 Valero Energy Corporation 568,994
12,533,212
-------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 3.62%
2,534 Ameriprise Financial Incorporated 139,649
3,375 Goldman Sachs Group Incorporated 725,794
10,675 Lehman Brothers Holdings Incorporated<< 698,572
8,150 Merrill Lynch & Company Incorporated 437,492
26,410 Morgan Stanley 1,402,635
3,404,142
-------------
TOBACCO PRODUCTS: 1.36%
16,870 Altria Group Incorporated 1,275,035
-------------
TRANSPORTATION EQUIPMENT: 3.36%
28,233 Honeywell International Incorporated 1,738,306
18,600 United Technologies Corporation 1,423,644
3,161,950
-------------
WHOLESALE TRADE NON-DURABLE GOODS: 0.35%
10,540 Sysco Corporation 328,950
-------------
TOTAL COMMON STOCKS (COST $74,722,716) 92,761,730
-------------
PRINCIPAL INTEREST RATE MATURITY DATE
COLLATERAL FOR SECURITIES LENDING: 6.24%
COLLATERAL INVESTED IN OTHER ASSETS: 6.24%
$ 36,019 BANCO SANTANDER TOTTA LOAN+++/- 5.04% 10/15/2008 35,965
36,019 BANK OF IRELAND+++/- 4.86 10/14/2008 35,980
129,669 BARCLAYS REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY VALUE
$129,702) 4.65 01/02/2008 129,669
72,039 BEAR STEARNS & COMPANY INCORPORATED INTERNATIONAL REPURCHASE
AGREEMENT - 102% COLLATERALIZED (MATURITY VALUE $72,057) 4.55 01/02/2008 72,038
381,804 BEAR STEARNS & COMPANY INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $381,902) 4.60 01/02/2008 381,804
28,815 BNP PARIBAS+/- 4.84 11/07/2008 28,766
72,039 BNP PARIBAS REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $72,057) 4.58 01/02/2008 72,038
36,019 CAFCO LLC 5.41 01/09/2008 35,985
100,854 CHARIOT FUNDING LLC++ 5.61 01/16/2008 100,669
93,650 CHEYNE FINANCE LLC+++/-^^(A)(I) 4.61 02/25/2008 84,285
72,039 CHEYNE FINANCE LLC+++/-^^(A)(I) 4.67 05/19/2008 64,835
546,621 CITIGROUP REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $546,761) 4.62 01/02/2008 546,621
7,204 COMERICA BANK+/- 5.24 02/08/2008 7,199
410,479 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $410,584) 4.60 01/02/2008 410,479
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 93
VT EQUITY INCOME FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 36,019 CULLINAN FINANCE CORPORATION+++/- 4.57% 02/12/2008 $ 35,980
108,058 CULLINAN FINANCE CORPORATION+++/- 4.57 08/04/2008 107,468
86,446 CULLINAN FINANCE CORPORATION+++/- 4.85 02/25/2008 86,446
324,173 DEUTSCHE BANK REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $324,255) 4.58 01/02/2008 324,173
144,077 FIVE FINANCE INCORPORATED+++/- 5.18 07/09/2008 143,063
87,887 GALLEON CAPITAL LLC++ 4.60 01/02/2008 87,887
100,854 GOVCO LLC++ 4.41 01/25/2008 100,560
60,512 GOVCO LLC 5.30 01/03/2008 60,505
21,612 GRAMPIAN FUNDING LIMITED 5.11 01/03/2008 21,609
280,950 GREENWICH CAPITAL REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $281,021) 4.57 01/02/2008 280,950
14,408 HARRIER FINANCE FUNDING LLC+/- 4.88 04/25/2008 14,408
36,019 HARRIER FINANCE FUNDING LLC+++/- 5.20 01/11/2008 36,013
93,650 ING (USA) ANNUITY & LIFE INSURANCE COMPANY+/- 5.10 08/16/2008 93,650
36,019 INTESA BANK (IRELAND) PLC+++/- 4.88 10/24/2008 35,974
763,608 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $763,804) 4.62 01/02/2008 763,608
11,526 JUPITER SECURITIZATION CORPORATION 5.41 01/17/2008 11,504
82,844 KESTREL FUNDING US LLC+++/- 4.84 02/25/2008 82,830
14,408 KESTREL FUNDING US LLC+/- 4.88 04/25/2008 14,408
72,039 LINKS FINANCE LLC+++/- 4.57 08/15/2008 71,213
106,617 LIQUID FUNDING LIMITED+++/- 5.11 06/11/2008 106,702
6,664 MORGAN STANLEY+/- 5.15 10/15/2008 6,664
638,005 MORGAN STANLEY REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $638,168) 4.58 01/02/2008 638,005
72,039 NORTHERN ROCK PLC+++/- 5.27 10/03/2008 71,350
5,828 RACERS TRUST SERIES 2004-6-MM+++/- 5.05 03/22/2008 5,828
51,868 SEDNA FINANCE INCORPORATED+++/- 5.21 04/10/2008 51,703
11,526 SHEFFIELD RECEIVABLES CORPORATION++ 5.85 01/04/2008 11,523
36,740 SHIPROCK FINANCE SERIES 2007-4A+++/- 5.10 04/11/2008 36,740
28,095 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 4.82 02/29/2008 28,074
36,019 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 5.22 02/04/2008 36,003
28,815 SLM CORPORATION+++/- 5.23 05/12/2008 28,645
72,039 STANFIELD VICTORIA FUNDING LLC+++/-(K)(A)(I) 4.88 02/15/2008 71,569
44,664 STANFIELD VICTORIA FUNDING LLC+++/-(K)(A)(I) 5.23 04/03/2008 44,227
15,475 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 5.51 01/18/2008 15,443
8,329 THE TRAVELERS INSURANCE COMPANY+/- 5.31 02/08/2008 8,329
36,019 UNICREDITO ITALIANO BANK (IRELAND)+/- 5.05 10/14/2008 35,982
36,019 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+++/- 5.26 10/08/2008 35,988
92,209 VERSAILLES CDS LLC++ 6.15 01/04/2008 92,184
61,953 VICTORIA FINANCE LLC+++/-(K)(A)(I) 4.57 07/28/2008 60,482
36,019 VICTORIA FINANCE LLC+++/-(K)(A)(I) 4.60 08/07/2008 36,019
72,039 WHITE PINE FINANCE LLC+++/-(K) 4.98 02/22/2008 71,840
5,871,882
-------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $5,882,123) 5,871,882
-------------
94 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT EQUITY INCOME FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
SHORT-TERM INVESTMENTS: 1.38%
1,300,460 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++ $ 1,300,460
TOTAL SHORT-TERM INVESTMENTS (COST $1,300,460) 1,300,460
-------------
TOTAL INVESTMENTS IN SECURITIES
(COST $81,905,299)* 106.20% $ 99,934,072
OTHER ASSETS AND LIABILITIES, NET (6.20) (5,837,540)
------ -------------
TOTAL NET ASSETS 100.00% $ 94,096,532
------ -------------
- --------------------------------------------------------------------------------
+ Non-income earning securities.
<< All or a portion of this security is on loan.
++ Securities that may be resold to "qualified institutional buyers" under
rule 144A or securities offered pursuant to section 4(2) of the Securities
Act of 1933, as amended.
+/- Variable rate investments.
~ 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.
^^ This security is currently in default with regards to scheduled interest
and/or principal payments.
(K) Subsequent to December 31, 2007, this security has been classified as a
defaulted security.
+++ Security of an affiliate of the Fund with a cost of $1,300,460.
(A) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
(I) Illiquid security.
* Cost for federal income tax purposes is $82,007,839 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 22,113,795
Gross unrealized depreciation (4,187,562)
------------
Net unrealized appreciation (depreciation) $ 17,926,233
The accompanying notes are an integral part of these financial statements.
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 95
VT INTERNATIONAL CORE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCKS: 98.16%
AUSTRALIA: 7.57%
70,231 AXA ASIA PACIFIC HOLDINGS LIMITED (INSURANCE CARRIERS) $ 451,807
19,389 ORICA LIMITED (MISCELLANEOUS MANUFACTURING INDUSTRIES) 536,427
17,000 QBE INSURANCE GROUP LIMITED (INSURANCE CARRIERS) 493,557
10,418 RIO TINTO LIMITED (METAL MINING) 1,211,960
21,923 SANTOS LIMITED (OIL & GAS EXTRACTION) 269,395
9,155 WOODSIDE PETROLEUM LIMITED (OIL & GAS EXTRACTION) 401,280
3,364,426
-------------
BELGIUM: 1.03%
5,200 DELHAIZE GROUP (FOOD STORES) 456,499
-------------
FINLAND: 2.54%
10,700 FORTUM OYJ (ELECTRIC, GAS & SANITARY SERVICES) 480,650
16,900 NOKIA OYJ (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 649,253
1,129,903
-------------
FRANCE: 14.63%
2,800 ALSTOM (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 601,421
6,596 ARCELOR SA (PRIMARY METAL INDUSTRIES) 512,212
3,500 BOUYGUES SA (ENGINEERING CONSTRUCTION) 290,826
3,885 CARREFOUR SA (FOOD STORES) 302,381
4,944 COMPAGNIE GENERALE DES ETABLISSEMENTS MICHELIN (RUBBER & MISCELLANEOUS PLASTICS PRODUCTS) 565,240
3,674 LVMH MOET HENNESSY LOUIS VUITTON SA (CONSUMER SERVICES) 444,000
3,319 PPR SA (APPAREL & ACCESSORY STORES) 533,129
11,470 PUBLICIS GROUPE (COMMUNICATIONS) 448,743
5,800 SANOFI-AVENTIS SA (CHEMICALS & ALLIED PRODUCTS) 530,934
5,917 TECHNIP SA (OIL & GAS EXTRACTION) 470,646
11,000 TOTAL SA (OIL & GAS EXTRACTION) 910,805
1,200 VALLOUREC (HEALTH SERVICES) 324,555
12,483 VIVENDI UNIVERSAL SA (COMMUNICATIONS) 573,133
6,508,025
-------------
GERMANY: 8.34%
2,400 ALLIANZ SE (INSURANCE CARRIERS) 517,055
11,400 ARCANDOR AG (GENERAL MERCHANDISE STORES) 272,551
5,300 DAIMLERCHRYSLER AG (TRANSPORTATION EQUIPMENT) 513,676
3,600 DEUTSCHE BANK AG (DEPOSITORY INSTITUTIONS) 470,070
11,094 DEUTSCHE TELEKOM AG (COMMUNICATIONS) 244,173
3,100 E.ON AG (ELECTRIC, GAS & SANITARY SERVICES) 659,039
9,317 GEA GROUP AG (HOLDING & OTHER INVESTMENT OFFICES) 324,812
3,100 SIEMENS AG (WHOLESALE TRADE NON-DURABLE GOODS) 492,908
7,644 SYMRISE AG (CHEMICALS & ALLIED PRODUCTS)+ 215,573
3,709,857
-------------
GREECE: 1.02%
12,567 ALPHA BANK AE (DEPOSITORY INSTITUTIONS) 455,085
-------------
HONG KONG: 6.60%
55,000 BANK OF EAST ASIA LIMITED (DEPOSITORY INSTITUTIONS) 372,670
27,000 CHEUNG KONG HOLDINGS LIMITED (REAL ESTATE) 493,275
27,500 CHINA MOBILE (HONG KONG) LIMITED (COMMUNICATIONS) 478,899
277,000 GUANGDONG INVESTMENT LIMITED (BUSINESS SERVICES) 155,780
129,000 HANG LUNG PROPERTIES LIMITED (REAL ESTATE) 576,379
96 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT INTERNATIONAL CORE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
HONG KONG (continued)
24,560 SUN HUNG KAI PROPERTIES LIMITED (REAL ESTATE) $ 515,847
57,000 TELEVISION BROADCASTS LIMITED (MOTION PICTURES) 340,707
2,933,557
-------------
IRELAND: 0.54%
30,510 EXPERIAN GROUP LIMITED (BUSINESS SERVICES) 240,980
-------------
ITALY: 2.17%
14,707 ENI SPA (PETROLEUM REFINING & RELATED INDUSTRIES) 536,752
52,100 UNICREDITO ITALIANO SPA (DEPOSITORY INSTITUTIONS) 428,544
965,296
-------------
JAPAN: 19.13%
31,000 BANK OF YOKOHAMA LIMITED (DEPOSITORY INSTITUTIONS)+ 215,989
47 EAST JAPAN RAILWAY COMPANY (RAILROADS) 386,600
5,200 FANUC LIMITED (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 504,130
41,000 FUJITSU LIMITED (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 274,268
14,300 HITACHI CONSTRUCTION MACHINERY COMPANY LIMITED (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER
EQUIPMENT) 424,495
41 INPEX HOLDINGS INCORPORATED (OIL & GAS EXPLORATION) 444,955
33,600 ISETAN COMPANY LIMITED (APPAREL & ACCESSORY STORES) 452,610
15,000 KAO CORPORATION (CHEMICALS & ALLIED PRODUCTS) 450,944
21,900 MITSUBISHI CORPORATION (BUSINESS SERVICES) 592,717
34,000 MITSUBISHI UFJ FINANCIAL GROUP INCORPORATED (DEPOSITORY INSTITUTIONS) 320,617
26,000 MITSUI FUDOSAN COMPANY LIMITED (REAL ESTATE) 560,728
8,100 MURATA MANUFACTURING COMPANY LIMITED (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT
COMPUTER EQUIPMENT) 465,139
31,000 NIPPON ELECTRIC GLASS COMPANY LIMITED (MISCELLANEOUS MANUFACTURING INDUSTRIES) 504,278
27,400 NOMURA HOLDINGS INCORPORATED (SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES) 459,083
8,400 NOMURA RESEARCH INSTITUTE LIMITED (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 274,809
40,000 SEKISUI HOUSE LIMITED (BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS) 427,535
8,700 SHIN-ETSU CHEMICAL COMPANY LIMITED (CHEMICALS & ALLIED PRODUCTS) 541,063
80,000 SUMITOMO METAL INDUSTRIES LIMITED (FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION
EQUIPMENT) 365,836
11,700 TOYOTA MOTOR CORPORATION (AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS) 623,127
9,100 YAMAHA MOTOR COMPANY LIMITED (TRANSPORTATION EQUIPMENT) 217,786
8,506,709
-------------
NETHERLANDS: 3.31%
12,622 ASML HOLDING NV (SEMICONDUCTOR EQUIPMENT MANUFACTURING & RELATED) 398,526
12,000 ING GROEP NV (FINANCIAL SERVICES) 467,585
1,869 RANDSTAD HOLDINGS NV (PRINTING, PUBLISHING & ALLIED INDUSTRIES) 73,043
16,200 WOLTERS KLUWER NV (PRINTING, PUBLISHING & ALLIED INDUSTRIES) 532,907
1,472,061
-------------
RUSSIA: 1.67%
5,488 LUKOIL ADR (OIL & GAS EXTRACTION) 473,614
26,444 VTB BANK OJSC GDR (NON-DEPOSITORY CREDIT INSTITUTIONS)+ 269,729
743,343
-------------
SINGAPORE: 0.66%
68,000 CAPITALAND LIMITED (REAL ESTATE) 292,563
-------------
SPAIN: 2.66%
11,418 INDRA SISTEMAS SA (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 309,653
27,000 TELEFONICA SA (COMMUNICATIONS) 875,241
1,184,894
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 97
VT INTERNATIONAL CORE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
SWEDEN: 1.00%
12,300 SKANSKA AB CLASS B (HEAVY CONSTRUCTION OTHER THAN BUILDING CONSTRUCTION CONTRACTS) $ 230,193
91,000 TELEFONAKTIEBOLAGET LM ERICSSON CLASS B (COMMUNICATIONS) 212,993
443,186
-------------
SWITZERLAND: 6.98%
11,500 CREDIT SUISSE GROUP (NON-DEPOSITORY CREDIT INSTITUTIONS) 692,249
3,900 HOLCIM LIMITED (BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS) 415,742
11,700 NOVARTIS AG (CHEMICALS & ALLIED PRODUCTS) 639,842
4,800 ROCHE HOLDING AG GENUSSCHEIN (MEDICAL PRODUCTS) 829,756
1,789 ZURICH FINANCIAL SERVICES AG (FINANCIAL SERVICES) 525,047
3,102,636
-------------
TAIWAN: 0.64%
28,642 TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED ADR (ELECTRONIC &
OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 285,274
-------------
UNITED KINGDOM: 17.67%
42,850 AVIVA PLC (INSURANCE CARRIERS) 571,082
33,877 BAE SYSTEMS PLC (TRANSPORTATION BY AIR) 336,192
37,100 BARCLAYS PLC (DEPOSITORY INSTITUTIONS) 374,685
37,993 BP PLC (OIL & GAS EXTRACTION) 464,284
43,000 BRITISH SKY BROADCASTING PLC (COMMUNICATIONS) 528,934
22,000 EASYJET PLC (TRANSPORTATION BY AIR)+ 267,217
26,290 GLAXOSMITHKLINE PLC (CHEMICALS & ALLIED PRODUCTS) 667,676
7,184 JOHNSON MATTHEY PLC (CHEMICALS & ALLIED PRODUCTS) 268,159
195,000 LEGAL & GENERAL GROUP PLC (INSURANCE CARRIERS) 506,490
34,522 NATIONAL GRID PLC (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 572,537
5,421 RIO TINTO PLC (METAL MINING) 570,519
57,863 ROLLS ROYCE GROUP PLC (AEROSPACE, DEFENSE) 628,047
13,400 ROYAL DUTCH SHELL PLC CLASS A (OIL & GAS EXTRACTION) 565,681
29,000 SCOTTISH & NEWCASTLE PLC (FOOD & KINDRED PRODUCTS) 425,353
12,753 SMITHS GROUP PLC (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 255,853
192,497 VODAFONE GROUP PLC (COMMUNICATIONS) 722,618
9,167 WOLSELEY PLC (WHOLESALE TRADE NON-DURABLE GOODS) 134,780
7,860,107
-------------
TOTAL COMMON STOCKS (COST $36,183,622) 43,654,401
-------------
PRINCIPAL INTEREST RATE MATURITY DATE
COLLATERAL FOR SECURITIES LENDING: 0.08%
COLLATERAL INVESTED IN OTHER ASSETS: 0.08%
$ 208 BANCO SANTANDER TOTTA LOAN+++/- 5.04% 10/15/2008 208
208 BANK OF IRELAND+++/- 4.86 10/14/2008 208
749 BARCLAYS REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $749) 4.65 01/02/2008 749
416 BEAR STEARNS & COMPANY INCORPORATED INTERNATIONAL REPURCHASE
AGREEMENT - 102% COLLATERALIZED (MATURITY VALUE $416) 4.55 01/02/2008 416
2,206 BEAR STEARNS & COMPANY INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $2,207) 4.60 01/02/2008 2,206
167 BNP PARIBAS+/- 4.84 11/07/2008 166
416 BNP PARIBAS REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $416) 4.58 01/02/2008 416
208 CAFCO LLC 5.41 01/09/2008 208
583 CHARIOT FUNDING LLC++ 5.61 01/16/2008 582
541 CHEYNE FINANCE LLC+++/-^^(A)(I) 4.61 02/25/2008 487
416 CHEYNE FINANCE LLC+++/-^^(A)(I) 4.67 05/19/2008 375
98 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT INTERNATIONAL CORE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 3,159 CITIGROUP REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $3,160) 4.62% 01/02/2008 $ 3,159
42 COMERICA BANK+/- 5.24 02/08/2008 42
2,372 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $2,373) 4.60 01/02/2008 2,372
208 CULLINAN FINANCE CORPORATION+++/- 4.57 02/12/2008 208
624 CULLINAN FINANCE CORPORATION+++/- 4.57 08/04/2008 621
500 CULLINAN FINANCE CORPORATION+++/- 4.85 02/25/2008 500
1,873 DEUTSCHE BANK REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $1,873) 4.58 01/02/2008 1,873
833 FIVE FINANCE INCORPORATED+++/- 5.18 07/09/2008 827
508 GALLEON CAPITAL LLC++ 4.60 01/02/2008 508
583 GOVCO LLC++ 4.41 01/25/2008 581
350 GOVCO LLC 5.30 01/03/2008 350
125 GRAMPIAN FUNDING LIMITED 5.11 01/03/2008 125
1,624 GREENWICH CAPITAL REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $1,624) 4.57 01/02/2008 1,624
83 HARRIER FINANCE FUNDING LLC+/- 4.88 04/25/2008 83
208 HARRIER FINANCE FUNDING LLC+++/- 5.20 01/11/2008 208
541 ING (USA) ANNUITY & LIFE INSURANCE COMPANY+/- 5.10 08/16/2008 541
208 INTESA BANK (IRELAND) PLC+++/- 4.88 10/24/2008 208
4,413 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $4,414) 4.62 01/02/2008 4,413
67 JUPITER SECURITIZATION CORPORATION 5.41 01/17/2008 66
479 KESTREL FUNDING US LLC+++/- 4.84 02/25/2008 479
83 KESTREL FUNDING US LLC+/- 4.88 04/25/2008 83
416 LINKS FINANCE LLC+++/- 4.57 08/15/2008 412
616 LIQUID FUNDING LIMITED+++/- 5.11 06/11/2008 617
39 MORGAN STANLEY+/- 5.15 10/15/2008 39
3,687 MORGAN STANLEY REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $3,688) 4.58 01/02/2008 3,687
416 NORTHERN ROCK PLC+++/- 5.27 10/03/2008 412
34 RACERS TRUST SERIES 2004-6-MM+++/- 5.05 03/22/2008 34
300 SEDNA FINANCE INCORPORATED+++/- 5.21 04/10/2008 299
67 SHEFFIELD RECEIVABLES CORPORATION++ 5.85 01/04/2008 67
212 SHIPROCK FINANCE SERIES 2007-4A+++/- 5.10 04/11/2008 212
162 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 4.82 02/29/2008 162
208 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 5.22 02/04/2008 208
167 SLM CORPORATION+++/- 5.23 05/12/2008 166
416 STANFIELD VICTORIA FUNDING LLC+++/-(K)(A)(I) 4.88 02/15/2008 414
258 STANFIELD VICTORIA FUNDING LLC+++/-(K)(A)(I) 5.23 04/03/2008 256
89 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 5.51 01/18/2008 89
48 THE TRAVELERS INSURANCE COMPANY+/- 5.31 02/08/2008 48
208 UNICREDITO ITALIANO BANK (IRELAND)+/- 5.05 10/14/2008 208
208 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+++/- 5.26 10/08/2008 208
533 VERSAILLES CDS LLC++ 6.15 01/04/2008 533
358 VICTORIA FINANCE LLC+++/-(K)(A)(I) 4.57 07/28/2008 350
208 VICTORIA FINANCE LLC+++/-(K)(A)(I) 4.60 08/07/2008 208
416 WHITE PINE FINANCE LLC+++/-(K) 4.98 02/22/2008 412
33,933
-------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $34,018) 33,933
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 99
VT INTERNATIONAL CORE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
SHORT-TERM INVESTMENTS: 1.61%
715,845 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++ $ 715,845
TOTAL SHORT-TERM INVESTMENTS (COST $715,845) 715,845
-------------
TOTAL INVESTMENTS IN SECURITIES
(COST $36,933,485)* 99.85% $ 44,404,179
OTHER ASSETS AND LIABILITIES, NET 0.15 65,969
------ -------------
TOTAL NET ASSETS 100.00% $ 44,470,148
------ -------------
- --------------------------------------------------------------------------------
+ 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.
+/- Variable rate investments.
~ 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.
^^ This security is currently in default with regards to scheduled interest
and/or principal payments.
(K) Subsequent to December 31, 2007, this security has been classified as a
defaulted security.
+++ Security of an affiliate of the Fund with a cost of $715,845.
(A) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
(I) Illiquid security.
* Cost for federal income tax purposes is $36,980,699 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 9,488,063
Gross unrealized depreciation (2,064,583)
-----------
Net unrealized appreciation (depreciation) $ 7,423,480
The accompanying notes are an integral part of these financial statements.
100 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT LARGE COMPANY CORE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCKS: 99.25%
APPAREL & ACCESSORY STORES: 1.37%
13,000 GAP INCORPORATED $ 276,640
-------------
BIOPHARMACEUTICALS: 3.23%
14,000 TEVA PHARMACEUTICAL INDUSTRIES LIMITED ADR 650,720
-------------
BUSINESS SERVICES: 5.92%
23,550 MICROSOFT CORPORATION 838,380
22,000 SYMANTEC CORPORATION+ 355,080
1,193,460
-------------
CHEMICALS & ALLIED PRODUCTS: 6.88%
1,400 JOHNSON & JOHNSON 93,380
29,600 PFIZER INCORPORATED 672,808
14,000 WYETH 618,660
1,384,848
-------------
COMMUNICATIONS: 2.99%
33,200 COMCAST CORPORATION CLASS A+ 601,584
-------------
DEPOSITORY INSTITUTIONS: 12.99%
15,800 BANK OF AMERICA CORPORATION 651,908
18,200 CITIGROUP INCORPORATED 535,808
14,100 JPMORGAN CHASE & COMPANY 615,465
33,500 WESTERN UNION COMPANY 813,380
2,616,561
-------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 12.72%
16,000 ANALOG DEVICES INCORPORATED 507,200
17,300 CISCO SYSTEMS INCORPORATED+ 468,311
18,600 GENERAL ELECTRIC COMPANY 689,502
22,200 NOVELLUS SYSTEMS INCORPORATED<<+ 612,054
7,650 TYCO ELECTRONICS LIMITED 284,045
2,561,112
-------------
GENERAL MERCHANDISE STORES: 4.03%
17,100 WAL-MART STORES INCORPORATED 812,763
-------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 8.68%
6,500 3M COMPANY 548,080
26,000 DELL INCORPORATED+ 637,260
21,100 INTEL CORPORATION 562,526
1,747,866
-------------
INSURANCE CARRIERS: 3.73%
12,900 AMERICAN INTERNATIONAL GROUP INCORPORATED 752,070
-------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 4.18%
19,000 COVIDIEN LIMITED 841,510
-------------
MISCELLANEOUS MANUFACTURING INDUSTRIES: 3.35%
17,000 TYCO INTERNATIONAL LIMITED 674,050
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 101
VT LARGE COMPANY CORE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
MISCELLANEOUS RETAIL: 4.29%
21,500 OFFICE DEPOT INCORPORATED+ $ 299,065
24,500 STAPLES INCORPORATED 565,215
864,280
-------------
MOTION PICTURES: 3.69%
45,000 TIME WARNER INCORPORATED 742,950
-------------
NON-DEPOSITORY CREDIT INSTITUTIONS: 0.85%
11,300 DISCOVER FINANCIAL SERVICES 170,404
-------------
OIL & GAS EXTRACTION: 3.71%
8,400 DEVON ENERGY CORPORATION 746,844
-------------
PETROLEUM REFINING & RELATED INDUSTRIES: 8.39%
8,650 CHEVRON CORPORATION 807,305
10,000 CONOCOPHILLIPS 883,000
1,690,305
-------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES: 1.50%
6,900 MCGRAW-HILL COMPANIES INCORPORATED 302,289
-------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 6.28%
11,900 MERRILL LYNCH & COMPANY INCORPORATED 638,792
11,800 MORGAN STANLEY 626,698
1,265,490
-------------
SEMICONDUCTORS: 0.47%
9,500 TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED ADR 94,620
-------------
TOTAL COMMON STOCKS (COST $19,722,822) 19,990,366
-------------
PRINCIPAL INTEREST RATE MATURITY DATE
COLLATERAL FOR SECURITIES LENDING: 2.11%
COLLATERAL INVESTED IN OTHER ASSETS: 2.11%
$ 2,601 BANCO SANTANDER TOTTA LOAN+++/- 5.04% 10/15/2008 2,598
2,601 BANK OF IRELAND+++/- 4.86 10/14/2008 2,599
9,365 BARCLAYS REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $9,367) 4.65 01/02/2008 9,365
5,203 BEAR STEARNS & COMPANY INCORPORATED INTERNATIONAL REPURCHASE
AGREEMENT - 102% COLLATERALIZED (MATURITY VALUE $5,204) 4.55 01/02/2008 5,203
27,576 BEAR STEARNS & COMPANY INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $27,583) 4.60 01/02/2008 27,576
2,081 BNP PARIBAS+/- 4.84 11/07/2008 2,078
5,203 BNP PARIBAS REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $5,204) 4.58 01/02/2008 5,203
2,601 CAFCO LLC 5.41 01/09/2008 2,599
7,284 CHARIOT FUNDING LLC++ 5.61 01/16/2008 7,271
6,764 CHEYNE FINANCE LLC+++/-^^(A)(I) 4.61 02/25/2008 6,087
5,203 CHEYNE FINANCE LLC+++/-^^(A)(I) 4.67 05/19/2008 4,683
39,480 CITIGROUP REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $39,490) 4.62 01/02/2008 39,480
520 COMERICA BANK+/- 5.24 02/08/2008 520
29,647 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $29,655) 4.60 01/02/2008 29,647
2,601 CULLINAN FINANCE CORPORATION+++/- 4.57 02/12/2008 2,599
7,804 CULLINAN FINANCE CORPORATION+++/- 4.57 08/04/2008 7,762
6,244 CULLINAN FINANCE CORPORATION+++/- 4.85 02/25/2008 6,244
23,413 DEUTSCHE BANK REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $23,419) 4.58 01/02/2008 23,413
10,406 FIVE FINANCE INCORPORATED+++/- 5.18 07/09/2008 10,333
102 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT LARGE COMPANY CORE FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 6,348 GALLEON CAPITAL LLC++ 4.60% 01/02/2008 $ 6,348
7,284 GOVCO LLC++ 4.41 01/25/2008 7,263
4,371 GOVCO LLC 5.30 01/03/2008 4,370
1,561 GRAMPIAN FUNDING LIMITED 5.11 01/03/2008 1,561
20,292 GREENWICH CAPITAL REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $20,297) 4.57 01/02/2008 20,292
1,041 HARRIER FINANCE FUNDING LLC+/- 4.88 04/25/2008 1,041
2,601 HARRIER FINANCE FUNDING LLC+++/- 5.20 01/11/2008 2,601
6,764 ING (USA) ANNUITY & LIFE INSURANCE COMPANY+/- 5.10 08/16/2008 6,764
2,601 INTESA BANK (IRELAND) PLC+++/- 4.88 10/24/2008 2,598
55,152 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $55,166) 4.62 01/02/2008 55,152
832 JUPITER SECURITIZATION CORPORATION 5.41 01/17/2008 831
5,983 KESTREL FUNDING US LLC+++/- 4.84 02/25/2008 5,982
1,041 KESTREL FUNDING US LLC+/- 4.88 04/25/2008 1,041
5,203 LINKS FINANCE LLC+++/- 4.57 08/15/2008 5,143
7,700 LIQUID FUNDING LIMITED+++/- 5.11 06/11/2008 7,707
481 MORGAN STANLEY+/- 5.15 10/15/2008 481
46,080 MORGAN STANLEY REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $46,092) 4.58 01/02/2008 46,080
5,203 NORTHERN ROCK PLC+++/- 5.27 10/03/2008 5,153
421 RACERS TRUST SERIES 2004-6-MM+++/- 5.05 03/22/2008 421
3,746 SEDNA FINANCE INCORPORATED+++/- 5.21 04/10/2008 3,734
832 SHEFFIELD RECEIVABLES CORPORATION++ 5.85 01/04/2008 832
2,654 SHIPROCK FINANCE SERIES 2007-4A+++/- 5.10 04/11/2008 2,654
2,029 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 4.82 02/29/2008 2,028
2,601 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 5.22 02/04/2008 2,600
2,081 SLM CORPORATION+++/- 5.23 05/12/2008 2,069
5,203 STANFIELD VICTORIA FUNDING LLC+++/-(K)(A)(I) 4.88 02/15/2008 5,169
3,226 STANFIELD VICTORIA FUNDING LLC+++/-(K)(A)(I) 5.23 04/03/2008 3,194
1,118 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 5.51 01/18/2008 1,115
602 THE TRAVELERS INSURANCE COMPANY+/- 5.31 02/08/2008 602
2,601 UNICREDITO ITALIANO BANK (IRELAND)+/- 5.05 10/14/2008 2,599
2,601 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+++/- 5.26 10/08/2008 2,599
6,660 VERSAILLES CDS LLC++ 6.15 01/04/2008 6,658
4,475 VICTORIA FINANCE LLC+++/-(K)(A)(I) 4.57 07/28/2008 4,368
2,601 VICTORIA FINANCE LLC+++/-(K)(A)(I) 4.60 08/07/2008 2,601
5,203 WHITE PINE FINANCE LLC+++/-(K) 4.98 02/22/2008 5,185
424,096
-------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $425,100) 424,096
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 103
VT LARGE COMPANY CORE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
SHORT-TERM INVESTMENTS: 0.70%
140,645 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++ $ 140,645
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $140,645) 140,645
-------------
TOTAL INVESTMENTS IN SECURITIES
(COST $20,288,567)* 102.06% $ 20,555,107
OTHER ASSETS AND LIABILITIES, NET (2.06) (414,145)
------ -------------
TOTAL NET ASSETS 100.00% $ 20,140,962
------ -------------
- --------------------------------------------------------------------------------
<< All or a portion of this security is on loan.
+ 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.
+/- Variable rate investments.
~ 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.
^^ This security is currently in default with regards to scheduled interest
and/or principal payments.
(K) Subsequent to December 31, 2007, this security has been classified as a
defaulted security.
(A) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
(I) Illiquid security.
+++ Security of an affiliate of the Fund with a cost of $140,645.
* Cost for federal income tax purposes is $20,340,991 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 1,675,098
Gross unrealized depreciation (1,460,982)
------------
Net unrealized appreciation (depreciation) $ 214,116
The accompanying notes are an integral part of these financial statements.
104 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT LARGE COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCKS: 98.22%
APPAREL & ACCESSORY STORES: 1.37%
29,600 KOHL'S CORPORATION+ $ 1,355,680
-------------
BIOPHARMACEUTICALS: 4.78%
41,800 GENENTECH INCORPORATED+ 2,803,526
25,900 GENZYME CORPORATION+ 1,927,996
4,731,522
-------------
BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS: 4.21%
45,700 FASTENAL COMPANY<< 1,847,194
102,600 LOWE'S COMPANIES INCORPORATED 2,320,812
4,168,006
-------------
BUSINESS SERVICES: 19.05%
27,700 AUTOMATIC DATA PROCESSING INCORPORATED 1,233,481
128,800 EBAY INCORPORATED+ 4,274,872
9,000 GOOGLE INCORPORATED CLASS A+ 6,223,320
200,670 MICROSOFT CORPORATION 7,143,852
18,875,525
-------------
CHEMICALS & ALLIED PRODUCTS: 1.74%
37,100 AMGEN INCORPORATED+ 1,722,924
-------------
DEPOSITORY INSTITUTIONS: 1.14%
46,500 WESTERN UNION COMPANY 1,129,020
-------------
E-COMMERCE/SERVICES: 0.15%
1,600 AMAZON.COM INCORPORATED+ 148,224
-------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 15.30%
178,800 CISCO SYSTEMS INCORPORATED+ 4,840,116
51,900 LINEAR TECHNOLOGY CORPORATION 1,651,977
160,100 NOKIA OYJ ADR 6,146,239
75,400 TEXAS INSTRUMENTS INCORPORATED 2,518,360
15,156,692
-------------
ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES: 3.53%
96,450 PAYCHEX INCORPORATED 3,493,419
-------------
GENERAL MERCHANDISE STORES: 5.18%
72,900 TARGET CORPORATION 3,645,000
31,200 WAL-MART STORES INCORPORATED 1,482,936
5,127,936
-------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 4.59%
70,300 EMC CORPORATION+ 1,302,659
121,600 INTEL CORPORATION 3,241,856
4,544,515
-------------
INSURANCE CARRIERS: 3.12%
53,075 AMERICAN INTERNATIONAL GROUP INCORPORATED 3,094,273
-------------
MEDICAL EQUIPMENT & SUPPLIES: 5.03%
99,175 MEDTRONIC INCORPORATED 4,985,527
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 105
VT LARGE COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
MISCELLANEOUS RETAIL: 1.38%
14,800 AMAZON COM INCORPORATED+ $ 1,371,072
-------------
PERSONAL SERVICES: 1.01%
29,900 CINTAS CORPORATION 1,005,238
-------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 23.51%
230,750 CHARLES SCHWAB CORPORATION 5,895,663
2,400 CME GROUP INCORPORATED 1,646,400
29,700 FRANKLIN RESOURCES INCORPORATED 3,398,571
40,825 GOLDMAN SACHS GROUP INCORPORATED 8,779,416
18,800 LEGG MASON INCORPORATED 1,375,220
36,100 T. ROWE PRICE GROUP INCORPORATED 2,197,768
23,293,038
-------------
TRANSPORTATION SERVICES: 3.13%
31,500 C.H. ROBINSON WORLDWIDE INCORPORATED 1,704,780
31,200 EXPEDITORS INTERNATIONAL OF WASHINGTON INCORPORATED 1,394,015
3,098,795
-------------
TOTAL COMMON STOCKS (COST $81,984,089) 97,301,406
-------------
PRINCIPAL INTEREST RATE MATURITY DATE
COLLATERAL FOR SECURITIES LENDING: 1.96%
COLLATERAL INVESTED IN OTHER ASSETS: 1.96%
$ 11,913 BANCO SANTANDER TOTTA LOAN+++/- 5.04% 10/15/2008 11,895
11,913 BANK OF IRELAND+++/- 4.86 10/14/2008 11,900
42,887 BARCLAYS REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $42,898) 4.65 01/02/2008 42,887
23,826 BEAR STEARNS & COMPANY INCORPORATED INTERNATIONAL REPURCHASE
AGREEMENT - 102% COLLATERALIZED (MATURITY VALUE $23,832) 4.55 01/02/2008 23,826
126,278 BEAR STEARNS & COMPANY INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED(MATURITY VALUE $126,310) 4.60 01/02/2008 126,278
9,530 BNP PARIBAS+/- 4.84 11/07/2008 9,514
23,826 BNP PARIBAS REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $23,832) 4.58 01/02/2008 23,826
11,913 CAFCO LLC 5.41 01/09/2008 11,902
33,356 CHARIOT FUNDING LLC++ 5.61 01/16/2008 33,295
30,974 CHEYNE FINANCE LLC+++/-^^(A)(I) 4.61 02/25/2008 27,876
23,826 CHEYNE FINANCE LLC+++/-^^(A)(I) 4.67 05/19/2008 21,443
180,789 CITIGROUP REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $180,835) 4.62 01/02/2008 180,789
2,383 COMERICA BANK+/- 5.24 02/08/2008 2,381
135,762 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $135,797) 4.60 01/02/2008 135,762
11,913 CULLINAN FINANCE CORPORATION+++/- 4.57 02/12/2008 11,900
35,739 CULLINAN FINANCE CORPORATION+++/- 4.57 08/04/2008 35,544
28,591 CULLINAN FINANCE CORPORATION+++/- 4.85 02/25/2008 28,591
107,217 DEUTSCHE BANK REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $107,244) 4.58 01/02/2008 107,217
47,652 FIVE FINANCE INCORPORATED+++/- 5.18 07/09/2008 47,317
29,068 GALLEON CAPITAL LLC++ 4.60 01/02/2008 29,068
33,356 GOVCO LLC++ 4.41 01/25/2008 33,259
20,014 GOVCO LLC 5.30 01/03/2008 20,011
7,148 GRAMPIAN FUNDING LIMITED 5.11 01/03/2008 7,147
92,921 GREENWICH CAPITAL REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $92,945) 4.57 01/02/2008 92,921
4,765 HARRIER FINANCE FUNDING LLC+/- 4.88 04/25/2008 4,765
11,913 HARRIER FINANCE FUNDING LLC+++/- 5.20 01/11/2008 11,911
30,974 ING (USA) ANNUITY & LIFE INSURANCE COMPANY+/- 5.10 08/16/2008 30,974
106 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT LARGE COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 11,913 INTESA BANK (IRELAND) PLC+++/- 4.88% 10/24/2008 $ 11,898
252,556 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $252,621) 4.62 01/02/2008 252,556
3,812 JUPITER SECURITIZATION CORPORATION 5.41 01/17/2008 3,805
27,400 KESTREL FUNDING US LLC+++/- 4.84 02/25/2008 27,395
4,765 KESTREL FUNDING US LLC+/- 4.88 04/25/2008 4,765
23,826 LINKS FINANCE LLC+++/- 4.57 08/15/2008 23,553
35,262 LIQUID FUNDING LIMITED+++/- 5.11 06/11/2008 35,291
2,204 MORGAN STANLEY+/- 5.15 10/15/2008 2,204
211,014 MORGAN STANLEY REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $211,068) 4.58 01/02/2008 211,014
23,826 NORTHERN ROCK PLC+++/- 5.27 10/03/2008 23,598
1,928 RACERS TRUST SERIES 2004-6-MM+++/- 5.05 03/22/2008 1,928
17,155 SEDNA FINANCE INCORPORATED+++/- 5.21 04/10/2008 17,100
3,812 SHEFFIELD RECEIVABLES CORPORATION++ 5.85 01/04/2008 3,811
12,151 SHIPROCK FINANCE SERIES 2007-4A+++/- 5.10 04/11/2008 12,151
9,292 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 4.82 02/29/2008 9,285
11,913 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 5.22 02/04/2008 11,908
9,530 SLM CORPORATION+++/- 5.23 05/12/2008 9,474
23,826 STANFIELD VICTORIA FUNDING LLC+++/-(K)(A)(I) 4.88 02/15/2008 23,671
14,772 STANFIELD VICTORIA FUNDING LLC+++/-(K)(A)(I) 5.23 04/03/2008 14,627
5,118 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 5.51 01/18/2008 5,108
2,755 THE TRAVELERS INSURANCE COMPANY+/- 5.31 02/08/2008 2,755
11,913 UNICREDITO ITALIANO BANK (IRELAND)+/- 5.05 10/14/2008 11,901
11,913 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+++/- 5.26 10/08/2008 11,903
30,497 VERSAILLES CDS LLC++ 6.15 01/04/2008 30,489
20,490 VICTORIA FINANCE LLC+++/-(K)(A)(I) 4.57 07/28/2008 20,003
11,913 VICTORIA FINANCE LLC+++/-(K)(A)(I) 4.60 08/07/2008 11,913
23,826 WHITE PINE FINANCE LLC+++/-(K) 4.98 02/22/2008 23,760
1,942,065
-------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $1,947,094) 1,942,065
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 107
VT LARGE COMPANY GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
SHORT-TERM INVESTMENTS: 0.82%
816,369 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++ $ 816,369
TOTAL SHORT-TERM INVESTMENTS (COST $816,369) 816,369
-------------
TOTAL INVESTMENTS IN SECURITIES
(COST $84,747,552)* 101.00% $ 100,059,840
OTHER ASSETS AND LIABILITIES, NET (1.00) (994,485)
------ -------------
TOTAL NET ASSETS 100.00% $ 99,065,355
------ -------------
- --------------------------------------------------------------------------------
+ Non-income earning securities.
<< 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.
+/- Variable rate investments.
~ 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 $816,369.
^^ This security is currently in default with regards to scheduled interest
and/or principal payments.
(K) Subsequent to December 31, 2007, this security has been classified as a
defaulted security.
(A) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
(I) Illiquid security.
* Cost for federal income tax purposes is $85,821,143 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $20,758,264
Gross unrealized depreciation (6,519,567)
-----------
Net unrealized appreciation (depreciation) $14,238,697
The accompanying notes are an integral part of these financial statements.
108 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT MONEY MARKET FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
CERTIFICATES OF DEPOSIT: 3.95%
$ 500,000 BANK OF SCOTLAND PLC (NEW YORK)+/- 5.37% 11/10/2008 $ 500,000
500,000 BARCLAYS BANK PLC (NEW YORK) 5.20 04/10/2008 500,000
250,000 NATIXIS+/- 4.40 03/06/2008 250,000
250,000 ROYAL BANK OF CANADA (NEW YORK)+/- 4.97 04/16/2008 249,929
250,000 ROYAL BANK OF SCOTLAND (NEW YORK)+/- 5.17 04/03/2008 249,984
250,000 ROYAL BANK OF SCOTLAND (NEW YORK)+/- 5.17 07/03/2008 249,851
TOTAL CERTIFICATES OF DEPOSIT (COST $1,999,764) 1,999,764
-------------
COMMERCIAL PAPER: 45.66%
250,000 ALPINE SECURITIZATION++ 5.90 01/16/2008 249,426
250,000 ALPINE SECURITIZATION++ 6.00 01/22/2008 249,167
250,000 ANZ NATIONAL INTERNATIONAL LIMITED++ 4.62 04/25/2008 246,343
250,000 AQUINAS FUNDING LLC++ 5.23 01/04/2008 249,927
250,000 AQUINAS FUNDING LLC++ 5.02 02/19/2008 248,327
500,000 ASPEN FUNDING CORPORATION++ 4.91 02/12/2008 497,204
100,000 ATLANTIC ASSET SECURITIZATION CORPORATION++ 5.55 01/11/2008 99,861
250,000 ATLANTIC ASSET SECURITIZATION CORPORATION++ 4.75 01/25/2008 249,241
250,000 ATLANTIC ASSET SECURITIZATION CORPORATION++ 5.95 01/31/2008 248,802
250,000 BANK OF IRELAND++ 4.56 04/25/2008 246,390
250,000 BARTON CAPITAL LLC++ 5.50 01/28/2008 249,007
500,000 BEAR STEARNS COMPANY INCORPORATED 5.00 01/02/2008 500,000
250,000 CAFCO LLC++ 5.85 03/05/2008 247,441
500,000 CANCARA ASSET SECURITIZATION LLC++ 5.21 01/15/2008 499,059
250,000 CHARIOT FUNDING LLC++ 5.80 01/08/2008 249,758
150,000 CITIBANK OMNI MASTER TRUST++ 5.70 01/11/2008 149,786
300,000 CITIBANK OMNI MASTER TRUST++ 5.70 01/22/2008 299,050
500,000 CLIPPER RECEIVABLES COMPANY LLC++ 5.60 01/08/2008 499,533
500,000 CLIPPER RECEIVABLES COMPANY LLC++ 5.60 01/09/2008 499,456
175,000 EBBETS FUNDING LLC++ 6.10 01/22/2008 174,407
250,000 ELYSIAN FUNDING LLC++ 5.60 01/25/2008 249,106
250,000 ERASMUS CAPITAL CORPORATION++ 5.25 01/07/2008 249,818
250,000 ERASMUS CAPITAL CORPORATION++ 6.20 01/11/2008 249,613
500,000 ERASMUS CAPITAL CORPORATION++ 5.28 01/18/2008 498,827
500,000 FAIRWAY FINANCE CORPORATION++ 5.75 01/11/2008 499,281
250,000 FALCON ASSET SECURITIZATION COMPANY LLC++ 5.95 01/30/2008 248,843
500,000 FALCON ASSET SECURITIZATION CORPORATION LLC++ 5.32 01/25/2008 498,301
250,000 GALAXY FUNDING INCORPORATED++ 4.89 01/24/2008 249,253
350,000 GALLEON CAPITAL LLC++ 5.65 01/02/2008 350,000
350,000 GALLEON CAPITAL LLC++ 5.65 01/08/2008 349,670
350,000 GALLEON CAPITAL LLC++ 5.65 01/09/2008 349,615
100,000 GEMINI SECURITIES CORPORATION LLC++ 5.35 01/09/2008 99,896
100,000 GEMINI SECURITIES CORPORATION LLC++ 5.35 01/10/2008 99,881
250,000 GRAMPIAN FUNDING LLC++ 5.23 01/07/2008 249,818
250,000 GRAMPIAN FUNDING LLC++ 5.04 01/23/2008 249,265
200,000 GRAMPIAN FUNDING LLC++ 5.12 04/08/2008 197,241
250,000 IRISH LIFE & PERMANENT++ 5.24 01/07/2008 249,818
250,000 IRISH LIFE & PERMANENT++ 5.07 02/14/2008 248,486
250,000 JUPITER SECURITIES COMPANY LLC++ 5.90 01/22/2008 249,181
500,000 KESTREL FUNDING US LLC++ 5.24 01/22/2008 498,544
250,000 LIBERTY STREET FUNDING LLC++ 6.25 01/16/2008 249,392
1,000,000 LLOYDS TSB BANK PLC 4.39 01/14/2008 998,537
500,000 NATIONWIDE BUILDING SOCIETY++ 5.01 02/01/2008 500,052
500,000 NATIONWIDE BUILDING SOCIETY+/-++ 5.16 01/17/2008 498,925
250,000 NEWPORT FUNDING CORPORATION++ 5.77 01/16/2008 249,439
250,000 NIEUW AMSTERDAM RECEIVABLES++ 5.03 01/23/2008 249,266
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 109
VT MONEY MARKET FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COMMERCIAL PAPER (continued)
$ 250,000 NIEUW AMSTERDAM RECEIVABLES++ 4.82% 01/25/2008 $ 249,230
250,000 NIEUW AMSTERDAM RECEIVABLES++ 5.35 02/21/2008 248,142
250,000 NIEUW AMSTERDAM RECOVERY++ 5.18 01/07/2008 249,820
250,000 OLD LINE FUNDING LLC++ 5.97 01/22/2008 249,171
500,000 OLD LINE FUNDING LLC++ 5.57 01/24/2008 498,298
250,000 PARK AVENUE RECEIVABLES++ 5.75 01/11/2008 249,641
250,000 PERRY GLOBAL FUNDING LLC++ 6.25 01/28/2008 248,872
250,000 PRUDENTIAL PLC++ 5.12 01/17/2008 249,467
250,000 RANGER FUNDING COMPANY LLC++ 4.77 01/29/2008 249,106
250,000 RANGER FUNDING CORPORATION LLC++ 4.78 01/28/2008 249,137
250,000 REGENCY MARKETS #1 LLC++ 5.18 01/15/2008 249,532
250,000 SCALDIS CAPITAL LLC++ 4.84 01/30/2008 249,059
250,000 SCALDIS CAPITAL LLC++ 5.40 03/03/2008 247,713
250,000 SOLITAIRE FUNDING LLC++ 5.15 01/15/2008 249,535
250,000 SURREY FUNDING CORPORATION++ 4.75 01/25/2008 249,241
500,000 SWEDBANK MORTGAGE AB 5.17 01/09/2008 499,497
250,000 SWEDISH NATIONAL HOUSING FINANCE++ 4.95 01/23/2008 249,278
500,000 THAMES ASSET GLOBAL SECURITIES++ 6.05 01/11/2008 499,244
250,000 THUNDER BAY FUNDING LLC++ 5.57 01/24/2008 249,149
500,000 THUNDER BAY FUNDING LLC++ 4.90 02/04/2008 497,754
250,000 THUNDER BAY FUNDING LLC++ 5.30 02/21/2008 248,160
500,000 TICONDEROGA FUNDING LLC++ 5.45 01/30/2008 497,881
500,000 VARIABLE FUNDING CAPITAL++ 4.90 02/14/2008 497,074
500,000 WESTPAC SECURITIES (NEW ZEALAND) LIMITED++ 5.17 01/10/2008 499,426
250,000 YORKTOWN CAPITAL LLC++ 5.75 01/16/2008 249,441
250,000 YORKTOWN CAPITAL LLC++ 4.73 01/29/2008 249,113
250,000 YORKTOWN CAPITAL LLC++ 4.77 01/29/2008 249,105
TOTAL COMMERCIAL PAPER (COST $23,103,339) 23,103,339
-------------
CORPORATE BONDS & NOTES: 1.49%
500,000 FLORIDA HURRICANE CATASTROPHE+/- 5.24 12/12/2008 500,000
135,000 HSBC FINANCE CORPORATION 5.84 02/15/2008 135,079
120,000 MORGAN STANLEY+/- 4.21 09/15/2008 119,540
TOTAL CORPORATE BONDS & NOTES (COST $754,619) 754,619
-------------
EXTENDABLE BONDS: 8.60%
1,000,000 BANK OF IRELAND SERIES XMTN+/-++ 4.96 01/16/2009 1,000,000
300,000 BASF FINANCE EUROPE NV+/-++ 5.17 01/16/2009 300,000
300,000 BES FINANCE LIMITED+/-++ 5.28 12/31/2008 300,000
250,000 CAISSE NATIONALE+/-++ 4.85 12/09/2008 250,000
500,000 DNB NOR BANK ASA+/-++ 4.87 01/23/2009 500,000
500,000 GENERAL ELECTRIC CAPITAL CORPORATION+/- 5.26 01/08/2009 500,000
500,000 INTESA BANK (IRELAND) PLC+/-++ 4.88 01/23/2009 500,000
300,000 LEHMAN BROTHERS HOLDINGS INCORPORATED+/- 5.02 01/23/2009 300,000
500,000 MERRILL LYNCH & COMPANY INCORPORATED+/- 5.04 12/23/2008 500,000
200,000 MERRILL LYNCH & COMPANY INCORPORATED+/- 5.14 01/16/2009 200,000
TOTAL EXTENDABLE BONDS (COST $4,350,000) 4,350,000
-------------
MEDIUM TERM NOTES: 9.19%
500,000 BNP PARIBAS 4.98 09/16/2008 500,000
250,000 CULLINAN FINANCE CORPORATION SERIES MTN+/-++ 5.20 01/04/2008 250,000
500,000 JOHN HANCOCK GLOBAL FUNDING II+/-++ 5.31 02/20/2008 500,237
250,000 LIBERTY LIGHT US CAPITAL SERIES MTN+/-++ 5.20 01/04/2008 250,000
110 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT MONEY MARKET FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
MEDIUM TERM NOTES (continued)
$ 1,000,000 NORDEA BANK AB+/-++ 5.26% 09/10/2008 $ 1,000,000
1,000,000 NORTHERN ROCK PLC+/-++ 5.24 10/08/2008 1,000,000
500,000 PREMIUM ASSET TRUST SERIES 04-10+/-++ 5.18 12/12/2008 500,000
250,000 ROYAL BANK SCOTLAND GROUP PLC+/-++ 5.12 09/18/2008 250,000
400,000 SEDNA FINANCE INCORPORATED SERIES MTN++ 5.35 05/29/2008 400,000
TOTAL MEDIUM TERM NOTES (COST $4,650,237) 4,650,237
-------------
MUNICIPAL BONDS & NOTES: 2.12%
500,000 JOHNSON CITY TN HEALTH & EDUCATIONAL FACILITIES SERIES B
(EDUCATIONAL FACILITIES REVENUE, REGIONS BANK)+/-ss. 6.50 07/01/2033 500,000
475,000 MISSISSIPPI STATE TAXABLE NISSAN PROJECT A (GO UNLIMITED, BANK
OF AMERICA NA LOC)+/-ss. 5.10 11/01/2028 474,977
100,000 NORTH TEXAS HIGHER EDUCATIONAL AUTHORITY INCORPORATED SERIES D
(HEFAR, AMBAC INSURED)+/-ss. 4.85 12/01/2046 100,000
TOTAL MUNICIPAL BONDS & NOTES (COST $1,074,977) 1,074,977
-------------
SECURED MASTER NOTE AGREEMENT: 3.32%
500,000 BANC OF AMERICA SECURITIES LLC+/-ss.(E) 4.56 -- 500,000
180,000 BEAR STEARNS COMPANY INCORPORATED+/-ss.(E) 4.70 -- 180,000
1,000,000 CITIGROUP GLOBAL MARKETS INCORPORATED+/-ss.(E) 4.57 -- 1,000,000
TOTAL SECURED MASTER NOTE AGREEMENT (COST $1,680,000) 1,680,000
-------------
REPURCHASE AGREEMENTS: 19.13%
1,000,000 DEUTSCHE BANK SECURITIES - 102% COLLATERALIZED BY US GOVERNMENT
SECURITIES (MATURITY VALUE $1,000,272) 4.90 01/02/2008 1,000,000
5,679,568 DEUTSCHE BANK SECURITIES - 102% COLLATERALIZED BY US GOVERNMENT
SECURITIES (MATURITY VALUE $5,681,067) 4.75 01/02/2008 5,679,568
1,000,000 GOLDMAN SACHS & CO - 102% COLLATERALIZED BY US GOVERNMENT
SECURITIES (MATURITY VALUE $1,000,272) 4.90 01/02/2008 1,000,000
1,000,000 LEHMAN BROTHERS COMMER - 102% COLLATERALIZED BY US GOVERNMENT
SECURITIES (MATURITY VALUE $1,000,272) 4.90 01/02/2008 1,000,000
1,000,000 MORGAN STANLEY & CO - 102% COLLATERALIZED BY US GOVERNMENT
SECURITIES (MATURITY VALUE $1,000,261) 4.70 01/02/2008 1,000,000
TOTAL REPURCHASE AGREEMENTS (COST $9,679,568) 9,679,568
-------------
TIME DEPOSITS: 6.36%
220,000 ANZ BANKING GROUP (NEW ZEALAND) LIMITED 6.25 01/02/2008 220,000
1,000,000 DANSKE BANK AS COPENHAGEN 4.75 01/02/2008 1,000,000
1,000,000 DEXIA BANK SA BRUSSELS 4.90 01/07/2008 1,000,000
1,000,000 HSBC BANK LONDON 3.50 01/02/2008 1,000,000
TOTAL TIME DEPOSITS (COST $3,220,000) 3,220,000
-------------
TOTAL INVESTMENTS IN SECURITIES
(COST $50,512,504)* 99.82% $ 50,512,504
OTHER ASSETS AND LIABILITIES, NET 0.18 90,614
------ -------------
TOTAL NET ASSETS 100.00% $ 50,603,118
------ -------------
- --------------------------------------------------------------------------------
+/- 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 stated 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.
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 111
VT OPPORTUNITY FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCKS: 79.03%
AMUSEMENT & RECREATION SERVICES: 1.13%
200,000 INTERNATIONAL GAME TECHNOLOGY $ 8,786,000
-------------
APPAREL & ACCESSORY STORES: 2.19%
220,000 NORDSTROM INCORPORATED<< 8,080,600
330,000 URBAN OUTFITTERS INCORPORATED+ 8,995,800
17,076,400
-------------
BIOPHARMACEUTICALS: 2.20%
130,000 GENENTECH INCORPORATED+ 8,719,100
480,000 PDL BIOPHARMA INCORPORATED+ 8,409,600
17,128,700
-------------
BUSINESS SERVICES: 9.88%
220,000 ACTIVISION INCORPORATED+ 6,534,000
585,000 CADENCE DESIGN SYSTEMS INCORPORATED+ 9,950,850
1,195,000 CNET NETWORKS INCORPORATED<<+ 10,922,300
175,000 ELECTRONIC ARTS INCORPORATED+ 10,221,750
385,000 IMS HEALTH INCORPORATED 8,870,400
1,145,000 INTERPUBLIC GROUP OF COMPANIES INCORPORATED<<+ 9,285,950
209,000 OMNICOM GROUP INCORPORATED 9,933,770
540,000 RED HAT INCORPORATED<<+ 11,253,600
76,972,620
-------------
CHEMICALS & ALLIED PRODUCTS: 5.94%
182,850 AMGEN INCORPORATED+ 8,491,554
170,000 AVERY DENNISON CORPORATION 9,033,800
135,000 CLOROX COMPANY 8,797,950
225,000 PRAXAIR INCORPORATED 19,959,750
46,283,054
-------------
COMMUNICATIONS: 4.14%
375,000 CABLEVISION SYSTEMS CORPORATION NEW YORK GROUP CLASS A+ 9,187,500
572,000 COMCAST CORPORATION CLASS A+ 10,364,640
29,000 LIBERTY MEDIA CORPORATION CAPITAL SERIES A+ 3,378,210
490,000 LIBERTY MEDIA CORPORATION INTERACTIVE SERIES A+ 9,349,200
32,279,550
-------------
DEPOSITORY INSTITUTIONS: 5.67%
219,000 BANK OF NEW YORK MELLON CORPORATION 10,678,440
150,000 BB&T CORPORATION 4,600,500
111,000 CITIGROUP INCORPORATED 3,267,840
120,000 COMERICA INCORPORATED 5,223,600
290,000 TORONTO-DOMINION BANK 20,421,501
44,191,881
-------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 11.14%
3,996,300 ARM HOLDINGS PLC 9,855,862
315,000 ASML HOLDING NV<<+ 9,856,350
1,365,000 CELESTICA INCORPORATED+ 7,917,000
775,000 FLEXTRONICS INTERNATIONAL LIMITED+ 9,346,500
475,000 MICRON TECHNOLOGY INCORPORATED<<+ 3,443,750
370,000 MICROSEMI CORPORATION<<+ 8,191,800
355,000 MOLEX INCORPORATED CLASS A 9,325,850
112 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT OPPORTUNITY FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (continued)
375,000 NETWORK APPLIANCE INCORPORATED+ $ 9,360,000
1,179,000 ON SEMICONDUCTOR CORPORATION<<+ 10,469,520
325,000 POLYCOM INCORPORATED+ 9,028,500
86,795,132
-------------
ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES: 1.46%
315,000 ACCENTURE LIMITED CLASS A 11,349,450
-------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT: 2.45%
134,000 FORTUNE BRANDS INCORPORATED 9,696,240
175,000 ILLINOIS TOOL WORKS INCORPORATED 9,369,500
19,065,740
-------------
FOOD & KINDRED PRODUCTS: 0.55%
107,800 PEPSI BOTTLING GROUP INCORPORATED 4,253,788
-------------
FORESTRY: 1.13%
119,985 WEYERHAEUSER COMPANY 8,847,694
-------------
GENERAL MERCHANDISE STORES: 2.27%
190,000 JCPENNEY COMPANY INCORPORATED 8,358,100
187,000 TARGET CORPORATION 9,350,000
17,708,100
-------------
HEALTH SERVICES: 1.24%
1,615,000 HEALTH MANAGEMENT ASSOCIATION INCORPORATED CLASS A<< 9,657,700
-------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 1.27%
215,000 DOVER CORPORATION 9,909,350
-------------
INSURANCE CARRIERS: 3.80%
170,000 ACE LIMITED 10,502,600
85,000 AMBAC FINANCIAL GROUP INCORPORATED<< 2,190,450
300,000 MGIC INVESTMENT CORPORATION<< 6,729,000
169,000 RENAISSANCERE HOLDINGS LIMITED 10,180,560
29,602,610
-------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 3.42%
275,000 APPLERA CORPORATION-APPLIED BIOSYSTEMS GROUP 9,328,000
32,939 RESMED INCORPORATED<<+ 1,730,286
197,500 WATERS CORPORATION+ 15,616,325
26,674,611
-------------
MEDICAL PRODUCTS: 1.06%
125,000 ZIMMER HOLDINGS INCORPORATED+ 8,268,750
-------------
METAL MINING: 1.18%
90,000 FREEPORT-MCMORAN COPPER & GOLD INCORPORATED CLASS B 9,219,600
-------------
MISCELLANEOUS RETAIL: 2.02%
118,000 CVS CAREMARK CORPORATION 4,690,500
480,000 STAPLES INCORPORATED 11,073,600
15,764,100
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 113
VT OPPORTUNITY FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
MOTOR FREIGHT TRANSPORTATION & WAREHOUSING: 1.41%
400,000 J.B. HUNT TRANSPORT SERVICES INCORPORATED $ 11,020,000
-------------
OIL & GAS EXTRACTION: 7.71%
198,335 TRANSOCEAN INCORPORATED+ 28,391,655
385,000 WEATHERFORD INTERNATIONAL LIMITED+ 26,411,000
102,500 XTO ENERGY INCORPORATED 5,264,400
60,067,055
-------------
PERSONAL SERVICES: 0.61%
170,000 REGIS CORPORATION 4,753,200
-------------
PETROLEUM REFINING & RELATED INDUSTRIES: 1.25%
134,000 SUNOCO INCORPORATED 9,706,961
-------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES: 1.27%
220,000 E.W. SCRIPPS COMPANY CLASS A 9,902,200
-------------
TRANSPORTATION BY AIR: 2.13%
180,000 CONTINENTAL AIRLINES INCORPORATED CLASS B<<+ 4,005,000
313,800 SOUTHWEST AIRLINES COMPANY<< 3,828,360
365,000 TAM SA ADR<<+ 8,803,800
16,637,160
-------------
UTILITIES: 0.51%
45,000 VANGUARD UTILITIES ETF 3,946,950
-------------
TOTAL COMMON STOCKS (COST $520,966,838) 615,868,356
-------------
UNITS MATURITY DATE
EXCHANGEABLE NOTES: 2.88%
164,200 CITIGROUP INCORPORATED+ ++(J) 05/20/2008 4,868,530
124,000 MEDTRONIC INCORPORATED+(J) 04/23/2008 6,249,600
160,000 MEMC ELECTRONIC MATERIALS INCORPORATED+(J) 04/04/2008 11,331,200
TOTAL EXCHANGEABLE NOTES (COST $21,670,111) 22,449,330
-------------
SHARES
INVESTMENT COMPANIES: 0.77%
STOCK FUNDS: 0.77%
80,000 ISHARES S&P SMALLCAP 600 INDEX FUND<< 5,201,600
5,000 MIDCAP SPDR TRUST SERIES 1<< 774,800
5,976,400
-------------
TOTAL INVESTMENT COMPANIES (COST $3,797,090) 5,976,400
-------------
PREFERRED STOCKS: 7.20%
255,000 AKAMAI TECHNOLOGIES+ 8,856,150
290,000 CHESAPEAKE ENERGY CORPORATION+ ++ 11,109,900
126,320 HALLIBURTON COMPANY+ ++ 4,728,726
138,000 JOY GLOBAL INCORPORATED+ ++ 8,252,041
177,805 NUCOR CORPORATION+ ++ 10,511,832
385,000 STARBUCKS CORPORATION+ 7,896,350
107,000 WYETH+ ++ 4,743,727
TOTAL PREFERRED STOCKS (COST $53,765,914) 56,098,726
-------------
114 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT OPPORTUNITY FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
RIGHTS: 0.00%
230,000 SEAGATE TECHNOLOGY RIGHTS+(A)(I) $ 0
TOTAL RIGHTS (COST $0) 0
---------
PRINCIPAL INTEREST RATE MATURITY DATE
COLLATERAL FOR SECURITIES LENDING: 8.84%
COLLATERAL INVESTED IN OTHER ASSETS: 8.84%
$ 422,776 BANCO SANTANDER TOTTA LOAN+++/- 5.04% 10/15/2008 422,138
422,776 BANK OF IRELAND+++/- 4.86 10/14/2008 422,311
1,521,995 BARCLAYS REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $1,522,388) 4.65 01/02/2008 1,521,995
845,553 BEAR STEARNS & COMPANY INCORPORATED INTERNATIONAL REPURCHASE
AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $845,767) 4.55 01/02/2008 845,553
4,481,429 BEAR STEARNS & COMPANY INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $4,482,574) 4.60 01/02/2008 4,481,429
338,221 BNP PARIBAS+/- 4.84 11/07/2008 337,639
845,553 BNP PARIBAS REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $845,768) 4.58 01/02/2008 845,553
422,776 CAFCO LLC 5.41 01/09/2008 422,370
1,183,774 CHARIOT FUNDING LLC++ 5.61 01/16/2008 1,181,607
1,099,218 CHEYNE FINANCE LLC+++/-^^(A)(I) 4.61 02/25/2008 989,297
845,553 CHEYNE FINANCE LLC+++/-^^(A)(I) 4.67 05/19/2008 760,997
6,415,964 CITIGROUP REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $6,417,611) 4.62 01/02/2008 6,415,964
84,555 COMERICA BANK+/- 5.24 02/08/2008 84,504
4,818,000 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $4,819,231) 4.60 01/02/2008 4,818,000
422,776 CULLINAN FINANCE CORPORATION+++/- 4.57 02/12/2008 422,320
1,268,329 CULLINAN FINANCE CORPORATION+++/- 4.57 08/04/2008 1,261,404
1,014,663 CULLINAN FINANCE CORPORATION+++/- 4.85 02/25/2008 1,014,663
3,804,987 DEUTSCHE BANK REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $3,805,955) 4.58 01/02/2008 3,804,987
1,691,105 FIVE FINANCE INCORPORATED+++/- 5.18 07/09/2008 1,679,200
1,031,574 GALLEON CAPITAL LLC++ 4.60 01/02/2008 1,031,574
1,183,774 GOVCO LLC++ 4.41 01/25/2008 1,180,329
710,264 GOVCO LLC 5.30 01/03/2008 710,179
253,666 GRAMPIAN FUNDING LIMITED 5.11 01/03/2008 253,635
3,297,655 GREENWICH CAPITAL REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $3,298,492) 4.57 01/02/2008 3,297,655
169,111 HARRIER FINANCE FUNDING LLC+/- 4.88 04/25/2008 169,111
422,776 HARRIER FINANCE FUNDING LLC+++/- 5.20 01/11/2008 422,700
1,099,218 ING (USA) ANNUITY & LIFE INSURANCE COMPANY+/- 5.10 08/16/2008 1,099,218
422,776 INTESA BANK (IRELAND) PLC+++/- 4.88 10/24/2008 422,248
8,962,858 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $8,965,158) 4.62 01/02/2008 8,962,858
135,288 JUPITER SECURITIZATION CORPORATION 5.41 01/17/2008 135,023
972,386 KESTREL FUNDING US LLC+++/- 4.84 02/25/2008 972,220
169,111 KESTREL FUNDING US LLC+/- 4.88 04/25/2008 169,111
845,553 LINKS FINANCE LLC+++/- 4.57 08/15/2008 835,863
1,251,418 LIQUID FUNDING LIMITED+++/- 5.11 06/11/2008 1,252,419
78,214 MORGAN STANLEY+/- 5.15 10/15/2008 78,214
7,488,600 MORGAN STANLEY REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $7,490,505) 4.58 01/02/2008 7,488,600
845,553 NORTHERN ROCK PLC+++/- 5.27 10/03/2008 837,469
68,405 RACERS TRUST SERIES 2004-6-MM+++/- 5.05 03/22/2008 68,405
608,798 SEDNA FINANCE INCORPORATED+++/- 5.21 04/10/2008 606,862
135,288 SHEFFIELD RECEIVABLES CORPORATION++ 5.85 01/04/2008 135,252
431,232 SHIPROCK FINANCE SERIES 2007-4A+++/- 5.10 04/11/2008 431,232
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 115
VT OPPORTUNITY FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 329,766 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 4.82% 02/29/2008 $ 329,520
422,776 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 5.22 02/04/2008 422,590
338,221 SLM CORPORATION+++/- 5.23 05/12/2008 336,222
845,553 STANFIELD VICTORIA FUNDING LLC+++/-(K)(A)(I) 4.88 02/15/2008 840,040
524,243 STANFIELD VICTORIA FUNDING LLC+++/-(K)(A)(I) 5.23 04/03/2008 519,110
181,642 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 5.51 01/18/2008 181,262
97,763 THE TRAVELERS INSURANCE COMPANY+/- 5.31 02/08/2008 97,761
422,776 UNICREDITO ITALIANO BANK (IRELAND)+/- 5.05 10/14/2008 422,337
422,776 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+++/- 5.26 10/08/2008 422,404
1,082,307 VERSAILLES CDS LLC++ 6.15 01/04/2008 1,082,015
727,175 VICTORIA FINANCE LLC+++/-(K)(A)(I) 4.57 07/28/2008 709,912
422,776 VICTORIA FINANCE LLC+++/-(K)(A)(I) 4.60 08/07/2008 422,776
845,553 WHITE PINE FINANCE LLC+++/-(K) 4.98 02/22/2008 843,225
68,921,282
-------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $69,152,012) 68,921,282
-------------
SHARES
SHORT-TERM INVESTMENTS: 10.49%
MUTUAL FUNDS: 9.98%
77,768,956 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++ 77,768,956
US TREASURY BILLS: 0.51%
4,000,000 US TREASURY BILL<<^ 3,993,173
TOTAL SHORT-TERM INVESTMENTS (COST $81,759,618) 81,762,129
-------------
TOTAL INVESTMENTS IN SECURITIES
(COST $751,111,582)* 109.21% $ 851,076,223
OTHER ASSETS AND LIABILITIES, NET (9.21) (71,790,646)
------ -------------
TOTAL NET ASSETS 100.00% $ 779,285,577
------ -------------
- --------------------------------------------------------------------------------
<< All or a portion of this security is on loan.
+ Non-income earning securities.
^^ This security is currently in default with regards to scheduled interest
and/or principal payments.
++ 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.
(J) The holder of an exchangeable equity-linked note will receive, at the
note's maturity, shares of the referenced equity based on the final index
value of the equity (or the cash equivalent). The index value and maturity
date are both defined in the terms of the note.
+/- Variable rate investments.
~ 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.
(K) Subsequent to December 31, 2007, this security has been classified as a
defaulted security.
(A) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
(I) Illiquid security.
+++ Security of an affiliate of the Fund with a cost of $77,768,956.
* Cost for federal income tax purposes is $756,547,627 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 157,505,892
Gross unrealized depreciation (62,977,296)
-------------
Net unrealized appreciation (depreciation) $ 94,528,596
The accompanying notes are an integral part of these financial statements.
116 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCKS: 96.20%
AMUSEMENT & RECREATION SERVICES: 0.79%
47,800 WMS INDUSTRIES INCORPORATED+ $ 1,751,392
-------------
APPAREL & ACCESSORY STORES: 0.44%
39,900 ZUMIEZ INCORPORATED+<< 971,964
-------------
AUTOMOTIVE REPAIR, SERVICES & PARKING: 0.87%
54,476 WRIGHT EXPRESS CORPORATION+ 1,933,353
-------------
BIOPHARMACEUTICALS: 0.67%
93,500 APPLERA CORPORATION-CELERA GROUP+<< 1,483,845
-------------
BUSINESS SERVICES: 22.21%
71,345 BANKRATE INCORPORATED+<< 3,430,981
82,800 COGENT COMMUNICATIONS GROUP INCORPORATED+<< 1,963,188
41,057 DEALERTRACK HOLDINGS INCORPORATED+<< 1,374,178
46,700 DIGITAL RIVER INCORPORATED+ 1,544,369
132,700 EPICOR SOFTWARE CORPORATION+<< 1,563,206
70,900 FORRESTER RESEARCH INCORPORATED+ 1,986,618
66,700 GARTNER INCORPORATED+ 1,171,252
253,331 GLOBAL CASH ACCESS INCORPORATED+ 1,535,186
13,631 HURON CONSULTING GROUP INCORPORATED+<< 1,099,068
181,500 INTERNAP NETWORK SERVICES+<< 1,511,895
323,100 LAWSON SOFTWARE INCORPORATED+ 3,308,544
263,151 MARCHEX INCORPORATED CLASS B<< 2,857,820
436,690 ON ASSIGNMENT INCORPORATED+ 3,061,197
27,700 PORTFOLIO RECOVERY ASSOCIATES INCORPORATED+<< 1,098,859
108,400 RSC HOLDINGS INCORPORATED+<< 1,360,420
317,283 SECURE COMPUTING CORPORATION+<< 3,045,917
87,987 SI INTERNATIONAL INCORPORATED+ 2,417,003
539,636 SKILLSOFT PLC ADR+ 5,158,920
234,565 SYKES ENTERPRISES INCORPORATED+ 4,222,170
167,651 TELETECH HOLDINGS INCORPORATED+ 3,565,937
118,232 THE KNOT INCORPORATED+<< 1,884,618
49,161,346
-------------
CASINO & GAMING: 0.70%
65,500 PINNACLE ENTERTAINMENT INCORPORATED<<+ 1,543,180
-------------
CHEMICALS & ALLIED PRODUCTS: 4.62%
18,000 CHATTEM INCORPORATED+<< 1,359,720
48,350 INVERNESS MEDICAL INNOVATIONS INCORPORATED+<< 2,716,303
100,500 NOVEN PHARMACEUTICALS INCORPORATED+ 1,394,940
232,375 SCIELE PHARMA INCORPORATED+<< 4,752,069
10,223,032
-------------
COMMUNICATIONS: 4.79%
164,300 CENTENNIAL COMMUNICATIONS CORPORATION+ 1,526,347
142,600 LODGENET ENTERTAINMENT CORPORATION+<< 2,486,944
263,600 PAETEC HOLDING CORPORATION+ 2,570,100
85,100 SAVVIS INCORPORATED+<< 2,375,141
184,150 VIRGIN MOBILE USA INCORPORATED CLASS A+<< 1,637,094
10,595,626
-------------
E-COMMERCE/SERVICES: 2.07%
234,900 GSI COMMERCE INCORPORATED+<< 4,580,550
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 117
VT SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
ELECTRIC, GAS & SANITARY SERVICES: 0.09%
7,800 Energysolutions Incorporated+ $ 210,522
-------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 8.48%
25,400 ACUITY BRANDS INCORPORATED 1,143,000
202,800 INFORMATION SERVICES GROUP INCORPORATED+<< 1,389,180
201,520 MICROSEMI CORPORATION+ 4,461,653
450,200 PMC-SIERRA INCORPORATED+<< 2,944,308
106,700 POLYPORE INTERNATIONAL INCORPORATED+ 1,867,250
67,441 POWER INTEGRATIONS INCORPORATED+ 2,321,994
31,600 REGAL-BELOIT CORPORATION 1,420,420
101,350 SOLERA HOLDINGS INCORPORATED+ 2,511,453
34,140 UNIVERSAL DISPLAY CORPORATION+<< 705,674
18,764,932
-------------
ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES: 5.64%
41,759 ADVISORY BOARD COMPANY+ 2,680,510
174,939 EXELIXIS INCORPORATED+<< 1,509,724
20,150 IHS INCORPORATED+ 1,220,284
268,517 RESOURCES CONNECTION INCORPORATED+<< 4,876,269
47,200 WATSON WYATT & Company Holdings 2,190,552
12,477,339
-------------
FINANCIAL INSTITUTIONS: 0.73%
52,400 DOLLAR FINANCIAL CORPORATION+ 1,608,156
-------------
FOOD & KINDRED PRODUCTS: 0.45%
133,503 SENOMYX INCORPORATED+<< 999,937
-------------
FURNITURE & FIXTURES: 0.55%
46,600 TEMPUR-PEDIC INTERNATIONAL<< 1,210,202
-------------
HEALTH SERVICES: 3.48%
165,691 INVENTIV HEALTH INCORPORATED+ 5,129,793
78,900 PSYCHIATRIC SOLUTIONS INCORPORATED+<< 2,564,250
7,694,043
-------------
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES: 0.51%
81,700 HHGREGG INCORPORATED+ 1,124,192
-------------
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES: 2.45%
46,877 GAYLORD ENTERTAINMENT COMPANY+ 1,897,112
257,500 GREAT WOLF RESORTS INCORPORATED+ 2,526,075
18,800 VAIL RESORTS INCORPORATED+ 1,011,628
5,434,815
-------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 3.95%
94,610 ACTUANT CORPORATION CLASS A<< 3,217,686
112,872 GARDNER DENVER INCORPORATED+ 3,724,776
33,000 KAYDON CORPORATION 1,799,820
8,742,282
-------------
INSURANCE AGENTS, BROKERS & SERVICE: 0.52%
36,200 EHEALTH INCORPORATED+<< 1,162,382
-------------
118 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
INSURANCE CARRIERS: 2.76%
97,650 FIRST MERCURY FINANCIAL CORPORATION+ $ 2,382,660
20,316 THE NAVIGATORS GROUP INCORPORATED+ 1,320,540
72,000 TOWER GROUP INCORPORATED 2,404,800
6,108,000
-------------
LEGAL SERVICES: 3.04%
109,309 FTI CONSULTING INCORPORATED<<+ 6,737,807
-------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 9.23%
86,200 BRUKER BIOSCIENCES CORPORATION+ 1,146,460
25,300 DRS TECHNOLOGIES INCORPORATED 1,373,031
36,200 ESTERLINE TECHNOLOGIES CORPORATION+ 1,873,350
76,400 EV3 INCORPORATED+<< 971,044
290,265 IXIA+ 2,751,712
23,817 ORTHOFIX INTERNATIONAL N.V.+<< 1,380,671
118,345 SENORX INCORPORATED+ 1,005,933
67,000 SIRONA DENTAL SYSTEMS INCORPORATED+<< 2,243,160
57,126 SONOSITE INCORPORATED+<< 1,923,432
105,933 SPECTRANETICS CORPORATION+<< 1,623,953
119,628 SYMMETRY MEDICAL INCORPORATED+<< 2,085,116
31,499 VARIAN INCORPORATED+ 2,056,885
20,434,747
-------------
MEDICAL EQUIPMENT & SUPPLIES: 1.74%
95,701 NORTHSTAR NEUROSCIENCE INCORPORATED+<< 890,019
151,358 PSS WORLD MEDICAL INCORPORATED+ 2,962,076
3,852,095
-------------
MEDICAL PRODUCTS: 0.70%
123,343 VOLCANO CORPORATION+ 1,543,021
-------------
MOTION PICTURES: 0.78%
101,664 CINEMARK HOLDINGS INCORPORATED<< 1,728,288
-------------
OIL & GAS EXTRACTION: 1.75%
89,700 CONCHO RESOURCES INCORPORATED+ 1,848,717
117,280 PETROHAWK ENERGY CORPORATION+<< 2,030,117
3,878,834
-------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES: 6.45%
165,264 INNERWORKINGS INCORPORATED+<< 2,852,457
190,086 SHUTTERFLY INCORPORATED+ 4,870,003
152,940 VISTAPRINT LIMITED+<< 6,553,479
14,275,939
-------------
REAL ESTATE: 0.58%
167,114 HFF INCORPORATED CLASS A+ 1,293,462
-------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 1.40%
66,108 EVERCORE PARTNERS INCORPORATED CLASS A 1,424,627
36,375 FCSTONE GROUP INCORPORATED+<< 1,674,341
3,098,968
-------------
TEXTILE MILL PRODUCTS: 1.06%
144,100 INTERFACE INCORPORATED 2,351,712
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 119
VT SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
TRANSPORTATION EQUIPMENT: 0.72%
33,500 POLARIS INDUSTRIES INCORPORATED<< $ 1,600,295
-------------
TRANSPORTATION SERVICES: 0.83%
69,100 HUB GROUP INCORPORATED CLASS A+ 1,836,678
-------------
WHOLESALE TRADE-DURABLE GOODS: 1.15%
116,700 INTERLINE BRANDS INCORPORATED+ 2,556,896
-------------
TOTAL COMMON STOCKS (COST $214,216,086) 212,969,832
-------------
PRINCIPAL INTEREST RATE MATURITY DATE
COLLATERAL FOR SECURITIES LENDING: 36.39%
COLLATERAL INVESTED IN OTHER ASSETS: 36.39%
$ 494,148 BANCO SANTANDER TOTTA LOAN+/-++ 5.04% 0/15/2008 493,402
494,148 BANK OF IRELAND+/-++ 4.86 10/14/2008 493,604
1,778,932 BARCLAYS REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $1,779,392 ) 4.65 01/02/2008 1,778,932
988,295 BEAR STEARNS & COMPANY INCORPORATED INTERNATIONAL
REPURCHASE AGREEMENT-102%COLLATERALIZED (MATURITY VALUE $988,545) 4.55 01/02/2008 988,295
5,237,965 BEAR STEARNS & COMPANY INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED(MATURITY VALUE $5,239,304) 4.60 01/02/2008 5,237,965
395,318 BNP PARIBAS+/- 4.84 11/07/2008 394,638
988,295 BNP PARIBAS REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $988,546) 4.58 01/02/2008 988,295
494,148 CAFCO LLC 5.41 01/09/2008 493,673
1,383,614 CHARIOT FUNDING LLC++ 5.61 01/16/2008 1,381,081
1,284,784 CHEYNE FINANCE LLC+/-^^++(A)(I) 4.61 02/25/2008 1,156,306
988,295 CHEYNE FINANCE LLC+/-^^++(A)(I) 4.67 05/19/2008 889,466
7,499,081 CITIGROUP REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $7,501,006) 4.62 01/02/2008 7,499,081
98,830 COMERICA BANK+/- 5.24 02/08/2008 98,769
5,631,355 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED(MATURITY VALUE $5,632,794) 4.60 01/02/2008 5,631,355
494,148 CULLINAN FINANCE CORPORATION+/-++ 4.57 02/12/2008 493,614
1,482,443 CULLINAN FINANCE CORPORATION+/-++ 4.57 08/04/2008 1,474,349
1,185,954 CULLINAN FINANCE CORPORATION+/-++ 4.85 02/25/2008 1,185,954
4,447,329 DEUTSCHE BANK REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $4,448,461) 4.58 01/02/2008 4,447,329
1,976,591 FIVE FINANCE INCORPORATED+/-++ 5.18 07/09/2008 1,962,676
1,205,720 GALLEON CAPITAL LLC++ 4.60 01/02/2008 1,205,720
1,383,614 GOVCO LLC++ 4.41 01/25/2008 1,379,587
830,168 GOVCO LLC 5.30 01/03/2008 830,068
296,489 GRAMPIAN FUNDING LIMITED 5.11 01/03/2008 296,453
3,854,352 GREENWICH CAPITAL REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $3,855,331) 4.57 01/02/2008 3,854,352
197,659 HARRIER FINANCE FUNDING LLC+/- 4.88 04/25/2008 197,659
494,148 HARRIER FINANCE FUNDING LLC+/-++ 5.20 01/11/2008 494,059
1,284,784 ING (USA) ANNUITY & LIFE INSURANCE COMPANY+/- 5.10 08/16/2008 1,284,784
494,148 INTESA BANK (IRELAND) PLC+/-++ 4.88 10/24/2008 493,530
10,475,931 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE$10,478,620) 4.62 01/02/2008 10,475,931
158,127 JUPITER SECURITIZATION CORPORATION 5.41 01/17/2008 157,817
1,136,540 KESTREL FUNDING US LLC+/-++ 4.84 02/25/2008 1,136,346
197,659 KESTREL FUNDING US LLC+/- 4.88 04/25/2008 197,659
988,295 LINKS FINANCE LLC+/-++ 4.57 08/15/2008 976,969
1,462,677 LIQUID FUNDING LIMITED+/-++ 5.11 06/11/2008 1,463,847
91,417 MORGAN STANLEY+/- 5.15 10/15/2008 91,417
8,752,794 MORGAN STANLEY REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $8,755,021) 4.58 01/02/2008 8,752,794
120 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 988,295 NORTHERN ROCK PLC+/-++ 5.27% 10/03/2008 $ 978,847
79,953 RACERS TRUST SERIES 2004-6-MM+/-++ 5.05 03/22/2008 79,953
711,573 SEDNA FINANCE INCORPORATED+/-++ 5.21 04/10/2008 709,310
158,127 SHEFFIELD RECEIVABLES CORPORATION++ 5.85 01/04/2008 158,085
504,031 SHIPROCK FINANCE SERIES 2007-4A+/-++ 5.10 04/11/2008 504,031
385,435 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 4.82 02/29/2008 385,148
494,148 SKANDINAVISKA ENSKILDA BANKEN AB (NEW YORK)+/- 5.22 02/04/2008 493,930
395,318 SLM CORPORATION+/-++ 5.23 05/12/2008 392,982
988,295 STANFIELD VICTORIA FUNDING LLC+/-++(K)(A)(I) 4.88 02/15/2008 981,852
612,743 STANFIELD VICTORIA FUNDING LLC+/-++(K)(A)(I) 5.23 04/03/2008 606,744
212,306 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 5.51 01/18/2008 211,862
114,267 THE TRAVELERS INSURANCE COMPANY+/- 5.31 02/08/2008 114,264
494,148 UNICREDITO ITALIANO BANK (IRELAND)+/- 5.05 10/14/2008 493,634
494,148 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+/-++ 5.26 10/08/2008 493,713
1,265,018 VERSAILLES CDS LLC++ 6.15 01/04/2008 1,264,676
849,934 VICTORIA FINANCE LLC+/-++(K)(A)(I) 4.57 07/28/2008 829,757
494,148 VICTORIA FINANCE LLC+/-++(K)(A)(I) 4.60 08/07/2008 494,148
988,295 WHITE PINE FINANCE LLC+/-++(K) 4.98 02/22/2008 985,580
80,556,292
-------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $80,767,673) 80,556,292
-------------
SHARES
SHORT-TERM INVESTMENTS: 4.54%
10,060,650 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++ 10,060,650
TOTAL SHORT-TERM INVESTMENTS (COST $10,060,650) 10,060,650
-------------
TOTAL INVESTMENTS IN SECURITIES
(COST $305,044,409)* 137.13% $ 303,586,774
OTHER ASSETS AND LIABILITIES, NET (37.13) (82,192,659)
------ -------------
TOTAL NET ASSETS 100.00% $ 221,394,115
------ -------------
- --------------------------------------------------------------------------------
+ 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.
~ 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.
^^ This security is currently in default with regards to scheduled interest
and/or principal payments.
+++ Security of an affiliate of the Fund with a cost of $10,060,650.
(K) Subsequent to December 31, 2007, this security has been classified as a
defaulted security.
(A) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
(I) Illiquid security.
* Cost for federal income tax purposes is $305,999,372 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 19,770,601
Gross unrealized depreciation (22,183,199)
------------
Net unrealized appreciation (depreciation) $ (2,412,598)
The accompanying notes are an integral part of these financial statements.
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 121
VT SMALL/MID CAP VALUE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
COMMON STOCKS: 99.13%
AMUSEMENT & RECREATION SERVICES: 0.95%
25,925 CENTURY CASINOS INCORPORATED+ $ 166,957
-------------
APPAREL & ACCESSORY STORES: 0.25%
15,915 DELIA*S INCORPORATED+ 43,130
-------------
BIOPHARMACEUTICALS: 1.84%
188,972 ENCORIUM GROUP INCORPORATED+ 323,142
-------------
BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS: 1.12%
18,619 PALM HARBOR HOMES INCORPORATED+ 196,430
-------------
BUSINESS SERVICES: 14.45%
103,490 3COM CORPORATION 467,775
10,310 ABM INDUSTRIES INCORPORATED 210,221
6,305 CLARUS CORPORATION+ 37,200
81,790 HILL INTERNATIONAL INCORPORATED+ 1,158,960
4,633 HLTH CORPORATION+ 62,082
7,320 IMS HEALTH INCORPORATED 168,653
1,250 KFORCE INCORPORATED+ 12,188
7,637 SUN MICROSYSTEMS INCORPORATED+ 138,459
32,575 TIER TECHNOLOGIES INCORPORATED CLASS B+ 276,888
2,532,426
-------------
CHEMICALS & ALLIED PRODUCTS: 1.99%
2,155 ENDO PHARMACEUTICALS HOLDINGS INCORPORATED+ 57,474
26,225 ORASURE TECHNOLOGIES INCORPORATED+ 233,140
7,570 VANDA PHARMACEUTICALS INCORPORATED+ 52,082
44,165 WELLMAN INCORPORATED 5,300
347,996
-------------
COMMUNICATIONS: 1.46%
12,810 CHINA GRENTECH CORPORATION LIMITED ADR+ 113,240
16,005 CINCINNATI BELL INCORPORATED+ 76,024
32,265 CITADEL BROADCASTING CORPORATION 66,466
255,730
-------------
CONSTRUCTION SPECIAL TRADE CONTRACTORS: 2.81%
49,325 CHAMPION ENTERPRISES INCORPORATED+ 464,642
5,375 U.S. HOME SYSTEMS INCORPORATED+ 28,756
493,398
-------------
DEPOSITORY INSTITUTIONS: 1.74%
14,570 FIRST SECURITY GROUP INCORPORATED 130,693
2,765 MIDWEST BANC HOLDINGS INCORPORATED 34,341
9,313 PACIFIC PREMIER BANCORP INCORPORATED+ 64,353
3,140 WESTERN UNION COMPANY 76,239
305,626
-------------
ELECTRIC, GAS & SANITARY SERVICES: 0.75%
7,600 EL PASO CORPORATION 131,024
-------------
122 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT SMALL/MID CAP VALUE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 6.74%
30,985 EVANS & SUTHERLAND COMPUTER CORPORATION+ $ 38,731
7,495 INTEGRATED ELECTRICAL SERVICES INCORPORATED+ 140,832
17,030 MICRON TECHNOLOGY INCORPORATED+ 123,468
134,910 MRV COMMUNICATIONS INCORPORATED+ 312,991
8,087 NORTEL NETWORKS CORPORATION ADR+ 122,033
7,025 OSI SYSTEMS INCORPORATED+ 185,952
31,805 POWER-ONE INCORPORATED+ 126,902
18,570 RICHARDSON ELECTRONICS LIMITED 130,176
1,181,085
-------------
ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES: 0.56%
12,735 SYMYX TECHNOLOGIES INCORPORATED+ 97,805
-------------
FURNITURE & FIXTURES: 0.44%
7,640 FURNITURE BRANDS INTERNATIONAL INCORPORATED 76,858
-------------
HEALTH SERVICES: 1.19%
14,693 CROSS COUNTRY HEALTHCARE INCORPORATED+ 209,228
-------------
HOLDING & OTHER INVESTMENT OFFICES: 7.92%
24,655 ANNALY MORTGAGE MANAGEMENT INCORPORATED 448,228
20,965 ANWORTH MORTGAGE ASSET CORPORATION 173,171
12,630 CAPSTEAD MORTGAGE CORPORATION 166,590
4,180 DISCOVERY HOLDING COMPANY CLASS A+ 105,085
21,065 HILLTOP HOLDINGS INCORPORATED+ 230,034
5,530 SUN COMMUNITIES INCORPORATED 116,517
12,645 UMH PROPERTIES INCORPORATED 149,211
1,388,836
-------------
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES: 0.23%
11,615 EMPIRE RESORTS INCORPORATED+ 39,607
-------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 4.25%
22,930 BROCADE COMMUNICATIONS SYSTEMS INCORPORATED+ 168,306
15,936 CRAY INCORPORATED+ 95,454
17,080 INTERMEC INCORPORATED+ 346,895
3,835 LEXMARK INTERNATIONAL INCORPORATED+ 133,688
744,343
-------------
INSURANCE CARRIERS: 2.52%
2,715 MERCURY GENERAL CORPORATION 135,234
16,785 NORTH POINTE HOLDINGS CORPORATION+ 184,635
47,866 QUANTA CAPITAL HOLDINGS LIMITED+ 122,058
441,927
-------------
JUSTICE, PUBLIC ORDER & SAFETY: 1.75%
10,973 GEO GROUP INCORPORATED+ 307,244
-------------
LEATHER & LEATHER PRODUCTS: 0.24%
18,580 BAKERS FOOTWEAR GROUP INCORPORATED+ 42,734
-------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 2.49%
42,180 ALLIED HEALTHCARE PRODUCTS INCORPORATED+ 305,805
28,840 CREDENCE SYSTEMS CORPORATION+ 69,793
2,060 KENSEY NASH CORPORATION+ 61,635
437,233
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 123
VT SMALL/MID CAP VALUE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
METAL MINING: 14.32%
24,050 APEX SILVER MINES LIMITED+ $ 366,522
24,040 GOLDCORP INCORPORATED 815,677
6,135 NEWMONT MINING CORPORATION 299,572
21,505 NOVAGOLD RESOURCES INCORPORATED+ 175,481
22,975 RANDGOLD RESOURCES LIMITED ADR 853,062
2,510,314
-------------
MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS: 0.17%
42,275 BIRCH MOUNTAIN RESOURCES LIMITED+ 30,015
-------------
MISCELLANEOUS MANUFACTURING INDUSTRIES: 0.71%
7,720 ACCO BRANDS CORPORATION+ 123,829
-------------
OIL & GAS EXTRACTION: 20.22%
2,950 CANADIAN NATURAL RESOURCES LIMITED 215,763
26,685 GLOBAL INDUSTRIES LIMITED+ 571,593
8,190 HELIX ENERGY SOLUTIONS GROUP INCORPORATED+ 339,885
6,420 HELMERICH & PAYNE INCORPORATED 257,249
18,365 KEY ENERGY SERVICES INCORPORATED+ 264,279
20,583 MCMORAN EXPLORATION COMPANY+ 269,431
1,710 NEWFIELD EXPLORATION COMPANY+ 90,117
55,955 NEWPARK RESOURCES INCORPORATED+ 304,955
4,200 PETROQUEST ENERGY INCORPORATED+ 60,060
2,950 PIONEER NATURAL RESOURCES COMPANY 144,078
4,175 PRIDE INTERNATIONAL INCORPORATED+ 141,533
4,102 RANGE RESOURCES CORPORATION 210,679
29,415 TRILOGY ENERGY TRUST 205,349
12,230 WILLBROS GROUP INCORPORATED+ 468,287
3,543,258
-------------
PETROLEUM REFINING & RELATED INDUSTRIES: 1.05%
8,110 INTEROIL CORPORATION+ 156,199
795 SANDRIDGE ENERGY INCORPORATED+ 28,509
184,708
-------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES: 1.74%
2,345 E.W. SCRIPPS COMPANY CLASS A 105,548
5,780 JOURNAL COMMUNICATIONS INCORPORATED CLASS A 51,673
4,040 R.H. DONNELLEY CORPORATION+ 147,379
304,600
-------------
RUBBER & MISCELLANEOUS PLASTICS PRODUCTS: 1.49%
16,780 CONSTAR INTERNATIONAL INCORPORATED+ 68,462
61,338 INTERTAPE POLYMER GROUP INCORPORATED+ 192,600
261,062
-------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 0.18%
2,455 MARKETAXESS HOLDINGS INCORPORATED+ 31,498
-------------
SOCIAL SERVICES: 0.40%
2,440 ABB LIMITED ADR 70,272
-------------
STONE, CLAY, GLASS & CONCRETE PRODUCTS: 1.50%
14,750 GENTEX CORPORATION 262,108
-------------
124 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT SMALL/MID CAP VALUE FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
THEATERS & ENTERTAINMENT: 0.65%
6,280 REGAL ENTERTAINMENT GROUP CLASS A $ 113,480
-------------
TRANSPORTATION BY AIR: 0.38%
11,220 JETBLUE AIRWAYS CORPORATION+ 66,198
-------------
TRANSPORTATION EQUIPMENT: 0.63%
18,555 FLEETWOOD ENTERPRISES INCORPORATED+ 110,959
-------------
TOTAL COMMON STOCKS (COST $17,687,885) 17,375,060
-------------
SHORT-TERM INVESTMENTS: 1.59%
278,087 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++ 278,087
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $278,087) 278,087
-------------
TOTAL INVESTMENTS IN SECURITIES
(COST $17,965,972)* 100.72% $ 17,653,147
OTHER ASSETS AND LIABILITIES, NET (0.72) (126,179)
------ -------------
TOTAL NET ASSETS 100.00% $ 17,526,968
------ -------------
- --------------------------------------------------------------------------------
+ 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 $278,087.
* Cost for federal income tax purposes is $18,247,793 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 2,948,971
Gross unrealized depreciation (3,543,616)
------------
Net unrealized appreciation (depreciation) $ (594,645)
The accompanying notes are an integral part of these financial statements.
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 125
VT TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
ASSET BACKED SECURITIES: 6.11%
$ 597,000 AMERICAN EXPRESS ISSUANCE TRUST SERIES 2007-2 CLASS A+/- 5.28% 07/15/2013 $ 584,666
270,000 AMERICREDIT PRIME AUTOMOBILE RECEIVABLES TRUST SERIES 2007-1
CLASS A3 5.27 11/08/2011 272,318
73,000 BANK OF AMERICA CREDIT CARD TRUST SERIES 2007-A8 CLASS A8 5.59 11/17/2014 75,842
100,370 CAPITAL AUTO RECEIVABLES ASSET TRUST SERIES 2006-1 CLASS A3 5.03 10/15/2009 100,427
198,000 CAPITAL AUTO RECEIVABLES ASSET TRUST SERIES 2007-1 CLASS A3A 5.00 04/15/2011 199,131
340,000 CITIBANK CREDIT CARD ISSUANCE TRUST SERIES 2007-A8 CLASS A8 5.65 09/20/2019 340,340
141,000 CITICORP RESIDENTIAL MORTGAGE SECURITIES INCORPORATED SERIES
2006-1 CLASS A2+/- 5.68 07/25/2036 140,111
160,000 CITICORP RESIDENTIAL MORTGAGE SECURITIES INCORPORATED SERIES
2006-2 CLASS A2+/- 5.56 09/25/2036 157,960
196,428 CITIGROUP MORTGAGE LOAN TRUST INCORPORATED SERIES 2007-AHL1
CLASS A2A+/- 4.91 12/25/2036 190,710
170,575 CNH EQUIPMENT TRUST SERIES 2004-A CLASS A4A+/- 5.86 09/15/2011 170,509
358,000 COMET SERIES 2007-A7 CLASS A7 5.75 07/15/2020 360,215
99,000 CONNECTICUT RRB SPECIAL PURPOSE TRUST CL&P-1 SERIES 2001-1
CLASS A5 6.21 12/30/2011 103,690
248,167 COUNTRYWIDE ASSET BACKED CERTIFICATES SERIES 2006-S1 CLASS A2 5.55 08/25/2021 242,235
88,993 COUNTRYWIDE ASSET BACKED CERTIFICATES SERIES 2007-3 CLASS 2A1+/- 4.97 05/25/2047 85,343
153,000 DAIMLERCHRYSLER AUTO TRUST SERIES 2006-D CLASS A4 4.94 02/08/2012 154,060
210,000 DAIMLERCHRYSLER AUTO TRUST SERIES 2007-A CLASS A4 5.28 03/08/2013 212,483
876,000 DISCOVER CARD MASTER TRUST SERIES 2007-A1 CLASS A1 5.65 03/16/2020 874,893
251,000 DOMINOS PIZZA MASTER ISSUER LLC SERIES 2007-1 CLASS A2++ 5.26 04/25/2037 247,695
175,000 FORD CREDIT AUTO OWNER TRUST SERIES 2007-B CLASS A3A 5.15 11/15/2011 176,729
239,000 GREAT AMERICA LEASING RECEIVABLES SERIES 2006-1 CLASS A3++ 5.34 01/15/2010 240,186
92,073 HARLEY-DAVIDSON MOTORCYCLE TRUST SERIES 2007-1 CLASS A2 5.29 01/18/2011 92,158
57,000 HYUNDAI AUTO RECEIVABLES TRUST SERIES 2007-A CLASS A3A 5.04 01/17/2012 57,268
280,000 HYUNDAI AUTO RECEIVABLES TRUST SERIES 2007-A CLASS A4 5.21 03/17/2014 282,325
16,780 MASTER ASSET BACKED SECURITIES TRUST SERIES 2005-AB1 CLASS A1B 5.14 11/25/2035 16,703
191,000 MBNA CREDIT CARD MASTER NOTE TRUST SERIES 2003-A7 CLASS A7 2.65 11/15/2010 189,263
14,206 MORGAN STANLEY ABS CAPITAL I SERIES 2006-WMC1 CLASS A2A+/- 4.94 12/25/2035 14,103
92,386 MORGAN STANLEY ABS CAPITAL I SERIES 2007-HE2 CLASS A2A+/- 4.91 01/25/2037 90,358
83,142 MORGAN STANLEY HOME EQUITY LOANS SERIES 2007-1 CLASS A1+/- 4.92 12/25/2036 81,472
88,956 MORGAN STANLEY MORTGAGE LOAN TRUST SERIES 2007-6XS CLASS 2A1S+/- 4.98 02/25/2047 88,689
335,000 NATIONAL CITY CREDIT CARD MASTER TRUST SERIES 2005-1 CLASS A 5.08 08/15/2012 333,053
49,524 NISSAN AUTO RECEIVABLES OWNER TRUST SERIES 2006-B CLASS A3 5.16 02/15/2010 49,622
699,000 NISSAN AUTO RECEIVABLES OWNER TRUST SERIES 2007-B CLASS A4 5.16 03/17/2014 706,448
35,357 OWNIT MORTGAGE LOAN ASSET BACKED CERTIFICATES SERIES 2006-1
CLASS AF1+/- 5.42 12/25/2036 34,814
92,299 RESIDENTIAL ASSET MORTGAGE PRODUCTS INCORPORATED SERIES
2003-RS7 CLASS AI6+/- 5.34 08/25/2033 91,433
212,000 SLM STUDENT LOAN TRUST SERIES 2005-7 CLASS A3 4.41 07/25/2025 214,086
70,000 TRIAD AUTO RECEIVABLES OWNER TRUST SERIES 2006-B CLASS A4 5.52 11/12/2012 71,175
124,000 TRIAD AUTO RECEIVABLES OWNER TRUST SERIES 2006-C CLASS A3 5.26 11/14/2011 124,027
104,167 USAA AUTO OWNER TRUST SERIES 2004-3 CLASS A4 3.53 06/15/2011 103,607
5,147 USAA AUTO OWNER TRUST SERIES 2005-1 CLASS A3 3.90 07/15/2009 5,143
26,434 WFS FINANCIAL OWNER TRUST SERIES 2004-1 CLASS A4 2.81 08/22/2011 26,406
7,103 WFS FINANCIAL OWNER TRUST SERIES 2005-3 CLASS A3A 4.25 06/17/2010 7,090
197,000 WORLD OMNI AUTO RECEIVABLES TRUST SERIES 2007-B CLASS A4 5.39 05/15/2013 198,955
82,000 WORLD OMNI RECEIVABLES TRUST SERIES 2007-B CLASS A3A 5.28 01/17/2012 82,736
TOTAL ASSET BACKED SECURITIES (COST $7,889,348) 7,890,477
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS: 33.54%
251,000 AMERICAN TOWER TRUST SERIES 2007-1A CLASS AFX++ 5.42 04/15/2037 243,475
100,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES
2002-PB2 CLASS B 6.31 06/11/2035 105,483
160,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES
2003-1 CLASS A2 4.65 09/11/2036 158,191
224,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES
2004-1 CLASS A4 4.76 11/10/2039 221,683
40,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES
2004-2 CLASS A5 4.58 11/10/2038 39,208
42,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES
2005-4 CLASS A5A 4.93 07/10/2045 40,739
373,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES
2005-5 CLASS A4+/- 5.12 10/10/2045 367,566
311,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES
2005-6 CLASS A4+/- 5.35 09/10/2047 309,666
674,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED
SERIES 2000-WF1 CLASS A2+/- 7.78 02/15/2032 706,892
126 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLLATERALIZED MORTGAGE OBLIGATIONS (continued)
$ 264,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES
2004-ESA CLASS C+/- 4.94% 05/14/2016 $ 267,510
157,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES
2005-T18 CLASS A4 4.93 02/13/2042 152,228
45,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES SERIES 2004-PWR6
CLASS A6 4.83 11/11/2041 44,538
190,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES SERIES 2007-PW15
CLASS A3 5.31 02/11/2044 188,844
109,000 CITIGROUP COMMERCIAL MORTGAGE TRUST SERIES 2004-C1 CLASS C+/- 5.53 04/15/2040 109,110
78,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE SERIES 2004-LB2A
CLASS A4 4.72 03/10/2039 76,977
307,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 1999-1
CLASS E+/- 7.22 05/15/2032 311,326
40,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2000-C1
CLASS C+/- 7.71 08/15/2033 42,689
222,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2004-LB3A
CLASS B+/- 5.44 07/10/2037 221,339
319,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2005-LP5
CLASS A4+/- 4.98 05/10/2043 309,942
281,656 COUNTRYWIDE ALTERNATIVE LOAN TRUST SERIES 2006-0C6 CLASS 2A1+/- 4.94 07/25/2036 281,157
146,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2001-CF2 CLASS A4 6.51 02/15/2034 152,535
243,108 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2001-CKN5 CLASS A4 5.44 09/15/2034 247,876
192,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2002-CKN2 CLASS A3 6.13 04/15/2037 201,166
913,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2002-CKS4 CLASS A2 5.18 11/15/2036 924,182
118,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2003-C4 CLASS A4+/- 5.14 08/15/2036 119,026
152,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2003-C5 CLASS A4 4.90 12/15/2036 151,473
85,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2003-CK2 CLASS A4 4.80 03/15/2036 84,523
363,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2004-C2 CLASS A2+/- 5.42 05/15/2036 370,957
160,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2004-C3 CLASS A5+/- 5.11 07/15/2036 160,828
226,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2004-C5 CLASS A4 4.83 11/15/2037 223,147
82,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2005-C1 CLASS AAB 4.82 02/15/2038 81,131
85,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2005-C2 CLASS A4 4.83 04/15/2037 81,746
12,310 DLJ COMMERCIAL MORTGAGE CORPORATION SERIES 1999-CG2 CLASS A1B+/- 7.30 06/10/2032 12,654
512,909 FHLB SERIES I7-2014 CLASS 1 5.34 03/20/2014 516,756
1,017,644 FHLB SERIES VN-2015 CLASS A 5.46 11/27/2015 1,050,956
323,000 FHLMC SERIES 2542 CLASS ES 5.00 12/15/2017 323,817
235,000 FHLMC SERIES 2558 CLASS BD 5.00 01/15/2018 235,149
317,867 FHLMC SERIES 2583 CLASS TD 4.50 12/15/2013 317,665
185,000 FHLMC SERIES 2590 CLASS NU 5.00 06/15/2017 187,220
131,017 FHLMC SERIES 2614 CLASS TD 3.50 05/15/2016 128,438
166,000 FHLMC SERIES 2623 CLASS AJ 4.50 07/15/2016 164,981
38,654 FHLMC SERIES 2631 CLASS MT 3.50 01/15/2022 38,556
378,450 FHLMC SERIES 2632 CLASS NE 4.00 06/15/2013 371,961
208,902 FHLMC SERIES 2645 CLASS MK 3.50 07/15/2022 208,017
43,290 FHLMC SERIES 2672 CLASS HA 4.00 09/15/2016 42,629
257,000 FHLMC SERIES 2694 CLASS QG 4.50 01/15/2029 253,867
39,000 FHLMC SERIES 2725 CLASS PC 4.50 05/15/2028 38,853
791,000 FHLMC SERIES 2727 CLASS PE 4.50 07/15/2032 766,782
17,973 FHLMC SERIES 2727 CLASS PW<< 3.57 06/15/2029 17,715
75,568 FHLMC SERIES 2780 CLASS TB 3.00 12/15/2024 74,546
201,000 FHLMC SERIES 2790 CLASS TN 4.00 05/15/2024 183,687
201,369 FHLMC SERIES 2814 CLASS BD 4.00 04/15/2018 198,151
150,049 FHLMC SERIES 2975 CLASS EA 5.00 05/15/2018 150,669
33,055 FHLMC SERIES 3000 CLASS PA 3.90 01/15/2023 32,652
211,472 FHLMC SERIES 3017 CLASS TA 4.50 08/15/2035 208,967
341,985 FHLMC SERIES 3020 CLASS MA 5.50 04/15/2027 345,207
295,482 FHLMC SERIES 3034 CLASS EH 5.50 12/15/2034 300,877
178,000 FHLMC SERIES 3062 CLASS LC 5.50 11/15/2028 180,399
119,652 FHLMC SERIES 3075 CLASS PA 5.50 07/15/2025 120,528
157,345 FHLMC SERIES 3078 CLASS PA 5.50 07/15/2024 158,417
175,000 FHLMC SERIES 3104 CLASS QC 5.00 09/15/2031 173,316
309,117 FHLMC SERIES 3135 CLASS JA<< 6.00 09/15/2027 313,557
332,293 FHLMC SERIES 3138 CLASS PA 5.50 02/15/2027 336,109
469,103 FHLMC SERIES 3151 CLASS PA 6.00 03/15/2026 475,608
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 127
VT TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLLATERALIZED MORTGAGE OBLIGATIONS (continued)
$ 327,651 FHLMC SERIES 3164 CLASS NA 6.00% 02/15/2027 $ 332,443
173,000 FHLMC SERIES 3164 CLASS NC 6.00 12/15/2032 177,313
660,375 FHLMC SERIES 3167 CLASS QA 6.00 10/15/2026 670,358
172,882 FHLMC SERIES 3171 CLASS NE 6.00 05/15/2027 175,382
328,523 FHLMC SERIES 3173 CLASS PH 6.00 09/15/2027 333,641
195,009 FHLMC SERIES 3178 CLASS MA 6.00 10/15/2026 197,799
20,932 FHLMC SERIES 3184 CLASS PA 5.50 02/15/2027 21,226
278,029 FHLMC SERIES 3192 CLASS GA<< 6.00 03/15/2027 282,175
323,000 FHLMC SERIES 3205 CLASS PC 6.00 09/15/2032 333,768
257,287 FHLMC SERIES 3216 CLASS NA 6.00 05/15/2028 261,466
138,000 FHLMC SERIES 3268 CLASS HC 5.00 12/15/2032 135,296
194,000 FHLMC SERIES 3279 CLASS PA 5.50 02/15/2023 196,090
429,823 FHLMC SERIES 3288 CLASS PA<< 5.50 05/15/2029 435,886
199,000 FHLMC SERIES 3289 CLASS PB 5.00 11/15/2029 200,322
152,000 FHLMC SERIES 3298 CLASS VB 5.00 11/15/2025 144,765
170,401 FHLMC SERIES 3312 CLASS AP 5.50 11/15/2025 172,881
487,290 FHLMC SERIES 3316 CLASS HA 5.00 07/15/2035 485,049
91,000 FHLMC SERIES 3316 CLASS PB 5.50 03/15/2031 92,223
792,842 FHLMC SERIES 3325 CLASS JL 5.50 06/15/2037 802,774
30,000 FHLMC SERIES 3326 CLASS PC 5.50 08/15/2032 30,011
320,814 FHLMC SERIES 3347 CLASS PA 5.00 06/15/2028 322,196
274,000 FHLMC SERIES 3347 CLASS PD 5.00 09/15/2035 260,578
523,000 FHLMC SERIES 3351 CLASS PK 5.50 01/15/2032 532,987
178,000 FHLMC SERIES 3372 CLASS BD 4.50 10/15/2022 169,333
111,000 FIRST UNION NATIONAL BANK COMMERCIAL MORTGAGE SERIES 2001-C4
CLASS B 6.42 12/12/2033 117,276
95,875 FNMA GRANTOR TRUST SERIES 2002-T11 CLASS A 4.77 04/25/2012 96,269
59,702 FNMA GRANTOR TRUST SERIES 2003-T1 CLASS A 3.81 11/25/2012 59,060
47,000 FNMA SERIES 2003-108 CLASS BE 4.00 11/25/2018 44,554
103,759 FNMA SERIES 2003-113 CLASS PN 3.50 02/25/2013 102,976
288,362 FNMA SERIES 2003-123 CLASS AB<< 4.00 10/25/2016 283,532
92,725 FNMA SERIES 2003-15 CLASS CH 4.00 02/25/2017 91,180
129,623 FNMA SERIES 2003-16 CLASS PN 4.50 10/25/2015 129,394
78,484 FNMA SERIES 2003-24 CLASS LC 5.00 12/25/2015 78,512
184,000 FNMA SERIES 2003-3 CLASS HJ 5.00 02/25/2018 183,942
241,555 FNMA SERIES 2003-30 CLASS ET<< 3.50 08/25/2016 236,871
260,641 FNMA SERIES 2003-33 CLASS CH 4.00 07/25/2017 256,275
340,195 FNMA SERIES 2003-34 CLASS QJ 4.50 01/25/2016 339,966
32,662 FNMA SERIES 2003-92 CLASS NM 3.50 04/25/2013 32,436
294,000 FNMA SERIES 2003-92 CLASS PC 4.50 05/25/2015 294,257
166,798 FNMA SERIES 2004-34 CLASS PI 3.50 05/25/2014 165,206
171,780 FNMA SERIES 2004-4 CLASS CA 4.00 09/25/2017 169,201
156,086 FNMA SERIES 2004-6 CLASS CA 4.00 06/25/2017 153,543
136,425 FNMA SERIES 2004-60 CLASS PA 5.50 04/25/2034 138,123
153,553 FNMA SERIES 2004-81 CLASS AG 4.00 03/25/2018 151,228
289,000 FNMA SERIES 2005-20 CLASS QD 5.00 03/25/2028 290,104
150,148 FNMA SERIES 2005-38 CLASS CD 5.00 06/25/2019 150,680
13,221 FNMA SERIES 2005-45 CLASS BA 4.50 11/25/2014 13,182
124,024 FNMA SERIES 2005-58 CLASS MA 5.50 07/25/2035 126,397
174,914 FNMA SERIES 2006-18 CLASS PA 5.50 01/25/2026 176,416
179,351 FNMA SERIES 2006-31 CLASS PA 5.50 11/25/2026 181,125
487,613 FNMA SERIES 2006-34 CLASS PA 6.00 05/25/2027 493,114
127,981 FNMA SERIES 2006-41 CLASS MA<< 5.50 04/25/2024 128,614
311,000 FNMA SERIES 2006-45 CLASS NW 5.50 01/25/2035 308,784
59,753 FNMA SERIES 2006-53 CLASS PA 5.50 12/25/2026 60,364
206,292 FNMA SERIES 2006-55 CLASS PA<< 6.00 05/25/2026 208,801
128 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLLATERALIZED MORTGAGE OBLIGATIONS (continued)
$ 148,731 FNMA SERIES 2006-64 CLASS PA 5.50% 02/25/2030 $ 150,771
413,592 FNMA SERIES 2006-80 CLASS PB<< 6.00 10/25/2027 419,437
314,000 FNMA SERIES 2007-109 CLASS VB 5.00 05/25/2028 299,630
206,000 FNMA SERIES 2007-113 CLASS DB 4.50 12/25/2022 195,282
127,319 FNMA SERIES 2007-27 CLASS KA 5.75 09/25/2033 129,158
524,104 FNMA SERIES 2007-30 CLASS MA 4.25 02/25/2037 515,129
545,271 FNMA SERIES 2007-39 CLASS NA 4.25 01/25/2037 535,855
169,129 FNMA SERIES 2007-62 CLASS PA 6.00 03/25/2029 171,832
255,537 FNMA SERIES 2007-80 CLASS TA 6.00 09/25/2026 259,406
269,395 FNMA SERIES 2007-81 CLASS AE 6.00 08/25/2028 273,972
381,623 FNMA SERIES 2007-81 CLASS PA 6.00 02/25/2029 388,174
99,758 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2001-2
CLASS A3 6.03 08/11/2033 101,270
164,000 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2004-C1
CLASS A3 4.60 11/10/2038 161,075
185,000 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2004-C3
CLASS A4+/- 5.19 07/10/2039 186,873
397,000 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2005-C3
CLASS A7A+/- 4.97 07/10/2045 386,795
209,000 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2002-C3
CLASS A2 4.93 07/10/2039 209,544
51,687 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2004-C1
CLASS A1 3.12 03/10/2038 51,127
17,924 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2004-C2
CLASS A1 3.90 08/10/2038 17,755
59,066 GNMA SERIES 2006-3 CLASS A 4.21 01/16/2028 58,558
127,000 GNMA SERIES 2006-37 CLASS JG 5.00 07/20/2036 121,195
164,188 GNMA SERIES 2006-8 CLASS A 3.94 08/16/2025 162,246
855,000 GNMA SERIES 2007-7 CLASS PG 5.00 02/16/2037 812,957
56,000 GOLDMAN SACHS MORTGAGE SECURITIES CORPORATION II SERIES 1998-C1
CLASS B 6.97 10/18/2030 56,440
431,597 GOLDMAN SACHS MORTGAGE SECURITIES CORPORATION II SERIES
1998-GLII CLASS A2 6.56 04/13/2031 431,556
152,000 GOLDMAN SACHS MORTGAGE SECURITIES CORPORATION II SERIES
2004-GG2 CLASS A6+/- 5.40 08/10/2038 155,213
218,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES SERIES 2003-PM1A
CLASS A4+/- 5.33 08/12/2040 221,910
125,993 JPMORGAN COMMERCIAL MORTGAGE FINANCE COMPANY SERIES 2000-C10
CLASS A2 7.37 08/15/2032 131,572
377,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2002-C2 CLASS A2 5.05 12/12/2034 380,084
76,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2002-CIB5 CLASS A2 5.16 10/12/2037 76,919
133,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2004-C3 CLASS A5+/- 4.88 01/15/2042 131,524
121,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2005-CB11 CLASS ASB+/- 5.20 08/12/2037 121,163
81,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2005-CB13 CLASS AM 5.51 01/12/2043 79,638
65,024 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2005-LDP2 CLASS A1 4.33 07/15/2042 64,400
45,407 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2005-LDP3 CLASS A1 4.66 08/15/2042 45,105
167,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2005-LDP3 CLASS ASB+/- 4.89 08/15/2042 164,874
300,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2006-CB17 CLASS ASB 5.42 12/12/2043 301,689
78,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES SERIES 2005-LDP2
CLASS A4 4.74 07/15/2042 74,725
29,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITY CORPORATION SERIES
2006-CB16 CLASS ASB 5.52 05/12/2045 29,337
55,000 LEHMAN BROTHERS UBS COMMERCIAL CONDUIT MORTGAGE TRUST SERIES
1999-C2 CLASS B 7.43 10/15/2032 57,467
337,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2002-C2
CLASS A4 5.59 06/15/2031 348,442
144,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2003-C5
CLASS A2 3.48 07/15/2027 142,672
106,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2003-C8
CLASS A4+/- 5.12 11/15/2032 106,931
80,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2005-C7
CLASS AM+/- 5.26 11/15/2040 77,796
491,000 MERRILL LYNCH COUNTRYWIDE COMMERCIAL MORTGAGE TRUST SERIES
2006-4 CLASS ASB+/- 5.13 12/12/2049 486,527
342,000 MERRILL LYNCH MORTGAGE TRUST SERIES 2004-BPC1 CLASS A5+/- 4.86 10/12/2041 338,576
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 129
VT TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLLATERALIZED MORTGAGE OBLIGATIONS (continued)
$ 65,000 MERRILL LYNCH MORTGAGE TRUST SERIES 2004-MKB1 CLASS B+/- 5.28% 02/12/2042 $ 65,683
82,000 MERRILL LYNCH MORTGAGE TRUST SERIES 2005-CIP1 CLASS AM+/- 5.11 07/12/2038 78,906
331,000 MERRILL LYNCH MORTGAGE TRUST SERIES 2005-LC1 CLASS A4+/- 5.29 01/12/2044 330,053
141,000 MERRILL LYNCH MORTGAGE TRUST SERIES 2005-MKB2 CLASS A4+/- 5.20 09/12/2042 138,608
112,533 MORGAN STANLEY CAPITAL I SERIES 2002-IQ2 CLASS A3 5.52 12/15/2035 113,315
249,000 MORGAN STANLEY CAPITAL I SERIES 2003-IQ5 CLASS A4 5.01 04/15/2038 249,975
157,000 MORGAN STANLEY CAPITAL I SERIES 2004-HQ3 CLASS A4 4.80 01/13/2041 155,638
100,000 MORGAN STANLEY CAPITAL I SERIES 2004-T13 CLASS B+/- 4.76 09/13/2045 98,840
248,000 MORGAN STANLEY CAPITAL I SERIES 2005-HQ5 CLASS AAB 5.04 01/14/2042 246,938
322,000 MORGAN STANLEY CAPITAL I SERIES 2005-HQ7 CLASS AAB 5.35 11/14/2042 322,950
133,000 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2001-TOP1 CLASS A4 6.66 02/15/2033 139,180
180,295 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2001-TOP3 CLASS A4 6.39 07/15/2033 188,665
39,000 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2001-TOP5 CLASS A4 6.39 10/15/2035 41,038
168,056 SALOMON BROTHERS MORTGAGE SECURITIES VII SERIES 2002-KEY2
CLASS A2 4.47 03/18/2036 167,104
658,740 US BANK NA SERIES 2007-1 CLASS A 5.92 05/25/2012 678,198
167,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2002-C1 CLASS A4 6.29 04/15/2034 176,136
138,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2002-C2 CLASS A4 4.98 11/15/2034 138,513
63,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C5 CLASS A2 3.99 06/15/2035 60,300
291,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C6
CLASS A3+/- 4.96 08/15/2035 292,754
41,649 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C7 CLASS A1 4.24 10/15/2035 41,325
243,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C7
CLASS A2+/- 5.08 10/15/2035 244,246
116,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C8 CLASS A3 4.45 11/15/2035 115,321
402,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C9
CLASS A4+/- 5.01 12/15/2035 402,805
39,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C9
CLASS B+/- 5.11 12/15/2035 39,250
640,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2004-C10
CLASS A4 4.75 02/15/2041 632,090
156,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2004-C11
CLASS B+/- 5.31 01/15/2041 154,997
195,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2004-C12
CLASS A4+/- 5.41 07/15/2041 198,665
113,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2004-C15 CLASS B 4.89 10/15/2041 108,569
139,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2005-C19
CLASS A6 4.70 05/15/2044 132,710
296,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2005-C20
CLASS A7 5.12 07/15/2042 290,897
280,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2005-C21
CLASS A4 5.38 10/15/2044 277,146
274,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2006-C26
CLASS APB 6.00 06/15/2045 283,626
117,000 WACHOVIA BANK COMMERICAL MORTGAGE TRUST SERIES 2003-C5 CLASS B 4.11 06/15/2035 112,240
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (COST $42,701,320) 43,302,485
-------------
CORPORATE BONDS & NOTES: 16.04%
APPAREL & ACCESSORY STORES: 0.24%
300,000 NORDSTROM INCORPORATED 7.00 01/15/2038 309,131
-------------
BUSINESS SERVICES: 0.34%
425,000 GENERAL ELECTRIC CAPITAL CORPORATION SERIES MTNA 6.00 06/15/2012 445,544
-------------
CHEMICALS & ALLIED PRODUCTS: 0.43%
115,000 ABBOTT LABORATORIES 5.60 11/30/2017 118,153
85,000 BRISTOL MYERS SQUIBB COMPANY 5.88 11/15/2036 84,467
165,000 ESTEE LAUDER COMPANIES INCORPORATED 5.55 05/15/2017 165,825
175,000 SCHERING-PLOUGH CORPORATION 6.55 09/15/2037 185,422
553,867
-------------
COMMUNICATIONS: 2.00%
470,000 AT&T INCORPORATED 5.10 09/15/2014 465,138
200,000 AT&T INCORPORATED<< 6.15 09/15/2034 199,665
110,000 AT&T INCORPORATED 6.30 01/15/2038 111,759
650,000 COMCAST CABLE COMMUNICATIONS HOLDINGS INCORPORATED 8.38 03/15/2013 729,224
40,000 EMBARQ CORPORATION 8.00 06/01/2036 42,153
130 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COMMUNICATIONS (continued)
$ 150,000 NEWS AMERICA HOLDINGS INCORPORATED++ 6.20% 12/15/2034 $ 147,869
320,000 QWEST CORPORATION 7.50 10/01/2014 324,800
205,000 SPRINT CAPITAL CORPORATION 6.13 11/15/2008 205,254
40,000 SPRINT CAPITAL CORPORATION 8.75 03/15/2032 45,088
90,000 SPRINT NEXTEL CORPORATION 6.00 12/01/2016 86,201
185,000 TIME WARNER ENTERTAINMENT COMPANY LP 8.38 07/15/2033 222,852
2,580,003
-------------
DEPOSITORY INSTITUTIONS: 0.74%
115,000 BAC CAPITAL TRUST XI 6.63 05/23/2036 111,882
90,000 BANK OF AMERICA CORPORATION 5.38 06/15/2014 90,934
150,000 BANK OF AMERICA CORPORATION<< 5.75 12/01/2017 150,344
80,000 CAPITAL ONE FINANCIAL CORPORATION 6.75 09/15/2017 76,730
210,000 CITIGROUP INCORPORATED 3.63 02/09/2009 207,185
80,000 LEHMAN BROTHERS HOLDINGS 6.88 07/17/2037 78,215
210,000 PNC FUNDING CORPORATION 5.25 11/15/2015 203,533
43,000 WASHINGTON MUTUAL INCORPORATED 4.00 01/15/2009 40,491
959,314
-------------
EATING & DRINKING PLACES: 0.24%
55,000 MCDONALD'S CORPORATION 5.80 10/15/2017 56,946
55,000 MCDONALD'S CORPORATION 6.30 10/15/2037 57,037
195,000 YUM! BRANDS INCORPORATED 6.88 11/15/2037 194,096
308,079
-------------
ELECTRIC UTILITIES: 0.10%
115,000 PROGRESS ENERGY INCORPORATED 6.85 04/15/2012 123,100
-------------
ELECTRIC, GAS & SANITARY SERVICES: 2.33%
125,000 ALLEGHENY ENERGY SUPPLY++ 8.25 04/15/2012 133,438
80,000 CMS ENERGY CORPORATION 6.55 07/17/2017 78,424
135,000 COMMONWEALTH EDISON COMPANY 6.15 09/15/2017 139,119
350,000 DPL INCORPORATED 6.88 09/01/2011 372,275
200,000 FIRSTENERGY CORPORATION SERIES B 6.45 11/15/2011 206,523
196,629 KANSAS GAS & ELECTRIC 5.65 03/29/2021 197,470
300,000 NEVADA POWER COMPANY SERIES A 8.25 06/01/2011 325,853
210,000 PACIFICORP 6.25 10/15/2037 216,865
195,000 PUBLIC SERVICE COMPANY OF COLORADO 7.88 10/01/2012 218,830
819,000 TAQA ABU DHABI NATIONAL ENERGY COMPANY++ 5.62 10/25/2012 831,348
190,000 VIRGINIA ELECTRIC & POWER COMPANY 5.10 11/30/2012 190,817
90,000 VIRGINIA ELECTRIC & POWER COMPANY 6.35 11/30/2037 92,292
3,003,254
-------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT:
0.12%
150,000 PACIFIC GAS & ELECTRIC COMPANY 5.63 11/30/2017 150,454
-------------
FOOD & KINDRED PRODUCTS: 0.31%
395,000 KRAFT FOODS INCORPORATED 6.13 02/01/2018 398,020
-------------
HEALTH SERVICES: 0.17%
230,000 COVENTRY HEALTH CARE INCORPORATED 5.95 03/15/2017 225,518
-------------
HOLDING & OTHER INVESTMENT OFFICES: 0.38%
490,000 ALLIED CAPITAL CORPORATION 6.63 07/15/2011 492,963
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 131
VT TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
INSURANCE CARRIERS: 0.94%
$ 100,000 ACE INA HOLDINGS INCORPORATED 5.70% 02/15/2017 $ 99,100
45,000 ACE INA HOLDINGS INCORPORATED 6.70 05/15/2036 45,627
150,000 AETNA INCORPORATED 6.75 12/15/2037 149,625
200,000 AMERICAN INTERNATIONAL GROUP INCORPORATED 4.70 10/01/2010 200,520
240,000 AMERICAN INTERNATIONAL GROUP INCORPORATED SERIES MTN 5.45 05/18/2017 235,019
110,000 CIGNA CORPORATION 6.15 11/15/2036 102,060
189,000 LIBERTY MUTUAL GROUP++ 7.50 08/15/2036 184,419
40,000 PRUDENTIAL FINANCIAL INCORPORATED SERIES MTN 5.70 12/14/2036 35,470
160,000 WELLPOINT INCORPORATED 5.88 06/15/2017 161,088
1,212,928
-------------
MOTION PICTURES: 0.36%
200,000 NEWS AMERICA INCORPORATION 6.65 11/15/2037 206,295
265,000 THE WALT DISNEY COMPANY 4.70 12/01/2012 264,991
471,286
-------------
NON-DEPOSITORY CREDIT INSTITUTIONS: 1.62%
275,000 AMERICAN GENERAL FINANCE CORPORATION 6.90 12/15/2017 275,275
245,000 CAPITAL ONE BANK SERIES BKNT 4.88 05/15/2008 243,591
250,000 GENERAL ELECTRIC CAPITAL CORPORATION+/- 6.38 11/15/2049 258,121
120,000 GENERAL ELECTRIC CAPITAL CORPORATION SERIES GMTN 6.15 08/07/2037 127,491
235,000 GENERAL ELECTRIC CAPITAL CORPORATION SERIES MTN 5.25 10/19/2012 240,344
282,000 GENERAL ELECTRIC CAPITAL CORPORATION SERIES MTNA 3.75 12/15/2009 279,672
360,000 JPMORGAN CHASE BANK NATIONAL SERIES BKNT 6.00 10/01/2017 366,128
300,000 WACHOVIA BANK NA SERIES BKNT 6.60 01/15/2038 301,506
2,092,128
-------------
OFFICE EQUIPMENT: 0.13%
165,000 XEROX CORPORATION 5.50 05/15/2012 167,742
-------------
OIL & GAS EXTRACTION: 0.83%
260,000 DEVON FINANCING CORPORATION 6.88 09/30/2011 278,432
80,000 EL PASO NATURAL GAS COMPANY++ 5.95 04/15/2017 78,961
90,000 PEMEX PROJECT FUNDING MASTER TRUST++ 6.63 06/15/2035 94,863
85,000 PEMEX PROJECT FUNDING MASTER TRUST++ 6.63 06/15/2035 89,593
100,000 SOUTHERN NATURAL GAS COMPANY++ 5.90 04/01/2017 98,357
205,000 WEATHERFORD INTERNATIONAL INCORPORATED++ 5.95 06/15/2012 212,839
215,000 WEATHERFORD INTERNATIONAL INCORPORATED++ 6.35 06/15/2017 222,236
1,075,281
-------------
PETROLEUM REFINING & RELATED INDUSTRIES: 0.19%
80,000 MARATHON OIL CORPORATION 6.00 10/01/2017 81,467
159,000 MARATHON OIL CORPORATION 6.60 10/01/2037 165,792
247,259
-------------
PHARMACEUTICALS: 0.50%
600,000 WYETH 6.95 03/15/2011 639,306
-------------
PRIMARY METAL INDUSTRIES: 0.06%
70,000 CORNING INCORPORATED 7.25 08/15/2036 76,194
-------------
REAL ESTATE INVESTMENT TRUSTS (REITS): 0.84%
60,000 DEVELOPERS DIVERS REALTY 5.38 10/15/2012 58,332
275,000 HEALTH CARE PROPERTIES INVESTORS INCORPORATED 5.65 12/15/2013 266,711
130,000 INTERNATIONAL LEASE FINANCE CORPORATION SERIES MTN+/- 5.25 05/24/2010 128,227
132 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
REAL ESTATE INVESTMENT TRUSTS (REITS) (CONTINUED)
$ 250,000 INTERNATIONAL LEASE FINANCE CORPORATION SERIES MTN 5.75% 06/15/2011 $ 253,136
125,000 INTERNATIONAL LEASE FINANCE CORPORATION SERIES MTN 5.65 06/01/2014 127,025
65,000 PROLOGIS TRUST 5.25 11/15/2010 64,744
190,000 PROLOGIS TRUST 5.50 04/01/2012 189,342
1,087,517
-------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 2.30%
395,000 GOLDMAN SACHS CAPITAL II+/- 5.79 05/17/2049 351,678
135,000 GOLDMAN SACHS CAPITAL INCORPORATED 6.35 02/15/2034 121,921
120,000 GOLDMAN SACHS GROUP INCORPORATED 6.88 01/15/2011 127,272
165,000 GOLDMAN SACHS GROUP INCORPORATED 5.13 01/15/2015 162,088
80,000 GOLDMAN SACHS GROUP INCORPORATED 6.45 05/01/2036 75,159
300,000 GOLDMAN SACHS GROUP INCORPORATED 6.75 10/01/2037 293,933
430,000 LAZARD GROUP LLC 7.13 05/15/2015 437,573
310,000 LAZARD GROUP LLC 6.85 06/15/2017 306,178
80,000 LEHMAN BROTHERS HOLDINGS 4.50 07/26/2010 79,104
80,000 LEHMAN BROTHERS HOLDINGS INCORPORATED SERIES MTN 5.75 05/17/2013 80,444
220,000 LEHMAN BROTHERS HOLDINGS INCORPORATION 6.75 12/28/2017 226,754
115,000 MERRILL LYNCH & COMPANY 6.05 08/15/2012 117,207
195,000 MORGAN STANLEY 5.30 03/01/2013 194,509
100,000 MORGAN STANLEY 5.38 10/15/2015 97,215
295,000 MORGAN STANLEY SERIES MTN 5.95 12/28/2017 294,790
2,965,825
-------------
TRANSPORTATION EQUIPMENT: 0.87%
595,000 DAIMLERCHRYSLER NA HOLDING CORPORATION 6.50 11/15/2013 621,778
70,000 DAIMLERCHRYSLER NA HOLDING CORPORATION 8.50 01/18/2031 88,284
410,000 DAIMLERCHRYSLER NA HOLDING CORPORATION SERIES MTN+/- 5.46 03/13/2009 407,713
10,000 DAIMLERCHRYSLER NA HOLDING CORPORATION SERIES MTN 5.75 09/08/2011 10,149
1,127,924
-------------
TOTAL CORPORATE BONDS & NOTES (COST $20,622,864) 20,712,637
-------------
FOREIGN CORPORATE BONDS@: 3.37%
102,000 AMERICA MOVIL SA DE CV 6.38 03/01/2035 100,860
94,000 AMERICA MOVIL SA DE CV 6.13 11/15/2037 89,513
200,000 ASTRAZENECA PLC 5.40 09/15/2012 206,770
115,000 ASTRAZENECA PLC 5.40 06/01/2014 118,226
175,000 CONOCOPHILLIPS (CANADA) 5.63 10/15/2016 180,423
330,000 DELHAIZE GROUP 6.50 06/15/2017 337,599
225,000 DIAGEO CAPITAL PLC<< 5.20 01/30/2013 226,027
75,000 DIAGEO CAPITAL PLC 5.75 10/23/2017 75,426
130,000 ENEL FINANCE INTERNATIONAL SA++ 6.80 09/15/2037 130,612
115,000 FRANCE TELECOM SA 7.75 03/01/2011 123,605
75,000 FRANCE TELECOM SA 8.50 03/01/2031 97,249
125,000 HSBC HOLDINGS PLC 6.50 09/15/2037 121,154
80,000 HUSKY ENERGY INCORPORATED 6.80 09/15/2037 84,088
120,000 HUSKY OIL COMPANY 7.55 11/15/2016 134,967
255,000 HUTCHISON WHAMPOA INTERNATIONAL LIMITED++ 7.45 11/24/2033 290,819
390,000 PETROBRAS INTERNATIONAL FINANCE COMPANY 6.13 10/06/2016 397,800
250,000 RAS LAFFAN LIQUEFIED NATURAL GAS COMPANY LIMITED III++ 6.33 09/30/2027 236,948
65,000 ROGERS CABLE INCORPORATED 5.50 03/15/2014 64,044
260,000 ROGERS WIRELESS INCORPORATED 6.38 03/01/2014 267,841
170,000 ROYAL BANK OF SCOTLAND GROUP PLC 5.00 10/01/2014 166,368
360,000 TELEFONICA EMISIONES SAU 5.98 06/20/2011 370,328
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 133
VT TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
FOREIGN CORPORATE BONDS@ (CONTINUED)
$ 240,000 TYCO INTERNATIONAL GROUP SA 6.38% 10/15/2011 $ 248,375
52,000 TYCO INTERNATIONAL GROUP SA 6.88 01/15/2029 52,664
80,000 VODAFONE GROUP PLC 5.63 02/27/2017 79,660
147,000 WESTFIELD GROUP++ 5.40 10/01/2012 146,689
TOTAL FOREIGN CORPORATE BONDS (COST $4,321,541) 4,348,055
-------------
FOREIGN GOVERNMENT BONDS@: 2.34%
500,000 EMIRATE OF ABU DHABI++ 5.50 08/02/2012 514,231
230,000 ENCANA CORPORATION 6.50 02/01/2038 237,676
455,000 EXPORT-IMPORT BANK OF KOREA EIBKOR 5.50 10/17/2012 456,875
97,000 ITALY GOVERNMENT INTERNATIONAL BOND 5.38 06/15/2033 99,488
195,000 PETROBRAS INTERNATIONAL FINANCE COMPANY 5.88 03/01/2018 193,928
350,000 QUEBEC PROVINCE 5.13 11/14/2016 361,838
305,000 REPUBLIC OF BRAZIL<< 6.00 01/17/2017 309,880
100,000 ROYAL BANK OF SCOTLAND GROUP PLC SERIES MTN+/- 7.64 03/31/2049 102,809
155,000 TRANSCANADA PIPELINES LIMITED 6.20 10/15/2037 153,899
225,000 TRANSOCEAN INCORPORATED 6.80 03/15/2038 229,578
233,000 UNITED MEXICAN STATES 5.63 01/15/2017 236,146
115,000 UNITED MEXICAN STATES SERIES MTNA 5.88 01/15/2014 119,600
TOTAL FOREIGN GOVERNMENT BONDS (COST $2,960,107) 3,015,948
-------------
AGENCY SECURITIES: 39.69%
FEDERAL HOME LOAN MORTGAGE CORPORATION: 11.94%
126,994 FHLMC # 1G2254+/- 6.43 10/01/2037 129,898
227,043 FHLMC #1B3391+/- 5.77 05/01/2037 230,485
304,042 FHLMC #1G2598+/-<< 6.15 01/01/2037 310,533
365,615 FHLMC #1H1402+/-<< 5.54 06/01/2037 369,058
326,610 FHLMC #1J1389+/-<< 6.68 11/01/2036 335,411
277,029 FHLMC #1J1465+/- 5.89 01/01/2037 281,522
348,748 FHLMC #1J1578+/- 6.01 04/01/2037 353,242
413,486 FHLMC #1J1581+/-<< 5.94 04/01/2037 420,320
635,274 FHLMC #1J1647 5.89 04/01/2037 645,029
249,171 FHLMC #1J2834+/- 6.14 08/01/2037 254,128
329,828 FHLMC #1J2842+/- 6.15 09/01/2037 336,505
238,745 FHLMC #1N0148+/- 5.85 04/01/2036 241,407
273,592 FHLMC #1N0287+/- 6.59 11/01/2036 280,553
110,256 FHLMC #B13150<< 4.00 03/01/2019 106,197
142,963 FHLMC #E01279<< 5.50 01/01/2018 144,985
199,614 FHLMC #E01445<< 4.00 09/01/2018 192,221
183,545 FHLMC #E01497<< 5.50 11/01/2018 186,088
140,436 FHLMC #E01539 5.50 12/01/2018 142,381
159,721 FHLMC #E96462 4.50 05/01/2018 157,057
894,758 FHLMC #E97666 4.00 07/01/2018 861,822
407,699 FHLMC #G02455<< 5.50 10/01/2030 408,295
131,798 FHLMC #G11594 5.50 08/01/2019 133,619
121,702 FHLMC #G11653 5.50 12/01/2019 123,383
503,090 FHLMC #G11658 5.50 01/01/2020 509,644
189,936 FHLMC #G11720 4.50 08/01/2020 186,688
255,530 FHLMC #G11786 5.00 10/01/2014 259,547
304,655 FHLMC #G11940 5.50 05/01/2020 308,623
235,367 FHLMC #G11944 5.50 07/01/2020 238,433
288,617 FHLMC #G11983 5.50 01/01/2020 292,377
111,214 FHLMC #G12258 6.00 08/01/2016 113,920
327,112 FHLMC #G12456 4.00 10/01/2021 313,513
134 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
FEDERAL HOME LOAN MORTGAGE CORPORATION (CONTINUED)
$ 72,232 FHLMC #G12457 4.00% 02/01/2020 $ 69,345
218,401 FHLMC #G12474<< 5.50 01/01/2017 221,555
991,764 FHLMC #G12545 4.00 10/01/2021 950,533
167,946 FHLMC #G12569 4.00 05/01/2020 161,234
123,615 FHLMC #G12570 4.00 02/01/2021 118,476
465,172 FHLMC #G12732 4.00 06/01/2020 448,049
391,382 FHLMC #G12791 4.50 01/01/2020 384,855
305,455 FHLMC #G12827 5.50 02/01/2021 309,762
184,247 FHLMC #G12888 5.50 07/01/2018 186,845
828,000 FHLMC #G12900 4.50 11/01/2019 814,192
2,209,465 FHLMC #G12923 6.00 11/01/2022 2,260,287
85,514 FHLMC #J02372 5.50 05/01/2020 86,696
83,991 FHLMC #J02373 5.50 05/01/2020 85,151
100,196 FHLMC #J02376 6.00 05/01/2020 102,473
103,795 FHLMC #J04514<< 5.50 03/01/2017 105,258
246,527 FHLMC #M30033 4.50 04/01/2020 245,754
15,417,349
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION: 24.42%
349,407 FNMA #190337<< 5.00 07/01/2033 341,442
275,210 FNMA #254758 4.50 06/01/2013 276,084
1,661,860 FNMA #254828 5.00 08/01/2033 1,623,976
701,844 FNMA #254949<< 5.00 11/01/2033 685,845
99,974 FNMA #256559 5.50 01/01/2017 101,646
92,363 FNMA #256646 5.50 03/01/2017 93,907
327,285 FNMA #256682<< 5.50 04/01/2017 332,758
371,885 FNMA #256719<< 5.50 05/01/2017 378,104
443,816 FNMA #357440 4.50 10/01/2018 436,681
13,298 FNMA #381370 5.74 03/01/2009 13,385
1,095,953 FNMA #555592 5.50 07/01/2033 1,096,766
430,251 FNMA #688017<< 5.50 03/01/2033 430,570
355,719 FNMA #694406 5.50 03/01/2033 355,983
78,260 FNMA #699613 5.50 06/01/2033 78,318
695,638 FNMA #702005 5.50 05/01/2033 696,154
308,196 FNMA #725068 5.50 01/01/2019 312,856
1,060,214 FNMA #725222 5.50 02/01/2034 1,061,000
229,484 FNMA #725564 4.49 04/01/2009 228,659
900,959 FNMA #725610 5.50 07/01/2034 901,009
356,131 FNMA #725611 5.50 06/01/2034 356,395
87,232 FNMA #728720<< 5.00 07/01/2033 85,243
480,065 FNMA #728877<< 5.00 08/01/2033 469,121
830,824 FNMA #735224<< 5.50 02/01/2035 831,440
372,246 FNMA #735301<< 4.00 03/01/2020 357,054
837,625 FNMA #745018<< 4.00 09/01/2020 803,440
392,392 FNMA #745271<< 4.50 09/01/2018 386,083
943,527 FNMA #745314<< 4.00 05/01/2034 870,917
235,049 FNMA #745526 6.00 05/01/2021 240,656
329,260 FNMA #745666 6.40 07/01/2036 336,500
284,128 FNMA #745743<< 4.00 05/01/2021 272,086
146,573 FNMA #868444+/- 5.73 04/01/2036 144,228
328,985 FNMA #888061+/- 5.08 10/01/2036 330,274
897,159 FNMA #888091 5.50 12/01/2030 899,142
401,385 FNMA #888202 5.50 02/01/2017 408,098
95,511 FNMA #888254+/- 5.18 11/01/2036 94,591
355,119 FNMA #888325+/- 5.82 04/01/2037 360,709
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 135
VT TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
FEDERAL NATIONAL MORTGAGE ASSOCIATION (CONTINUED)
$ 2,065,553 FNMA #888659 4.50% 10/01/2020 $ 2,032,345
267,731 FNMA #888748+/- 5.50 06/01/2036 271,222
757,204 FNMA #888828 5.00 12/25/2049 759,027
792,000 FNMA #888924 5.50 01/01/2021 805,860
300,000 FNMA #888964 7.00 11/01/2037 311,907
307,516 FNMA #906216+/- 5.95 01/01/2037 311,840
204,080 FNMA #917831+/- 5.61 05/01/2037 206,882
172,481 FNMA #917894+/- 5.81 05/01/2037 174,583
421,347 FNMA #922164+/-<< 5.70 05/01/2037 428,893
1,190,699 FNMA #928260<< 4.00 03/01/2036 1,098,344
219,000 FNMA #928939 7.00 12/01/2037 227,248
258,720 FNMA #938180+/- 5.82 06/01/2037 263,563
378,373 FNMA #942691+/- 6.06 08/01/2037 384,995
103,877 FNMA #944357 6.00 06/01/2022 106,313
236,890 FNMA #945032+/- 5.77 08/01/2037 240,789
123,532 FNMA #946607+/- 6.09 09/01/2037 125,760
342,098 FNMA #946609 5.90 09/01/2037 348,772
184,473 FNMA #949593 6.00 08/01/2022 188,798
332,211 FNMA #955489 7.00 10/01/2037 345,582
3,730,000 FNMA TBA%% 6.00 02/01/2023 3,813,925
857,000 FNMA TBA%% 5.50 01/01/2034 855,929
1,487,000 FNMA TBA%% 6.50 01/01/2036 1,528,352
31,522,049
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION: 3.33%
388,257 GNMA #782044<< 6.50 12/15/2032 402,435
1,952,000 GNMA TBA%% 6.50 01/01/2037 2,020,319
1,821,000 GNMA TBA%% 6.50 02/01/2038 1,878,472
4,301,226
-------------
TOTAL AGENCY SECURITIES (COST $50,625,710) 51,240,624
-------------
US TREASURY SECURITIES: 7.24%
US TREASURY BONDS: 4.55%
478,000 US TREASURY BOND<< 8.88 02/15/2019 672,225
368,000 US TREASURY BOND<< 7.13 02/15/2023 474,893
1,637,000 US TREASURY BOND<< 6.25 08/15/2023 1,959,924
395,000 US TREASURY BOND<< 6.63 02/15/2027 501,311
329,000 US TREASURY BOND<< 6.25 05/15/2030 410,582
384,000 US TREASURY BOND<< 5.38 02/15/2031 432,630
706,000 US TREASURY BOND<< 4.50 02/15/2036 709,585
240,000 US TREASURY BOND<< 4.75 02/15/2037 251,175
425,000 US TREASURY BOND<< 5.00 05/15/2037 463,217
5,875,542
-------------
US TREASURY NOTES: 2.69%
44,000 US TREASURY NOTE 3.63 10/31/2009 44,433
123,000 US TREASURY NOTE<< 4.50 05/15/2010 127,103
220,000 US TREASURY NOTE<< 4.63 10/31/2011 230,553
143,000 US TREASURY NOTE 3.63 12/31/2012 144,073
82,000 US TREASURY NOTE<< 3.63 05/15/2013 82,564
1,926,000 US TREASURY NOTE<< 4.75 08/15/2017 2,034,187
788,000 US TREASURY NOTE 4.25 11/15/2017 801,729
3,464,642
-------------
TOTAL US TREASURY SECURITIES (COST $9,076,276) 9,340,184
-------------
136 Wells Fargo Advantage Variable Trust Funds
Portfolio of Investments--December 31, 2007
VT TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
COLLATERAL FOR SECURITIES LENDING: 15.83%
COLLATERAL INVESTED IN OTHER ASSETS: 15.83%
$ 1,002 AMERICAN GENERAL FINANCE CORPORATION+/- 5.33% 01/18/2008 $ 1,002
364,382 ATLAS CAPITAL FUNDING CORPORATION+/-++ 4.85 04/25/2008 363,864
819,859 BARCLAYS REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $820,071) 4.65 01/02/2008 819,859
455,477 BASF FINANCE EUROPE NV+/-++ 5.17 10/17/2008 454,976
455,477 BEAR STEARNS & COMPANY INCORPORATED INTERNATIONAL REPURCHASE
AGREEMENT - 102% COLLATERALIZED (MATURITY VALUE $455,592) 4.55 01/02/2008 455,477
910,955 BEAR STEARNS & COMPANY INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $911,188) 4.60 01/02/2008 910,955
273,286 BNP PARIBAS+/- 4.84 11/07/2008 272,816
1,366,432 BNP PARIBAS REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $1,366,780) 4.58 01/02/2008 1,366,432
273,286 CHARIOT FUNDING LLC++ 5.61 01/16/2008 272,786
259,622 CHEYNE FINANCE LLC+/-++^^(A)(I) 4.61 02/25/2008 233,660
923,119 CITIGROUP REPURCHASE AGREEMENT - 102% COLLATERALIZED (MATURITY
VALUE $923,356) 4.62 01/02/2008 923,119
204,965 CREDIT AGRICOLE SA+/- 5.02 02/25/2008 204,889
1,821,909 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED (MATURITY VALUE $1,822,375) 4.60 01/02/2008 1,821,909
227,739 CULLINAN FINANCE CORPORATION+/-++ 4.57 08/04/2008 226,495
910,955 DEUTSCHE BANK REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $911,187) 4.58 01/02/2008 910,955
145,753 GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY+/- 5.11 06/16/2008 145,753
273,286 GOVCO LLC++ 4.41 01/25/2008 272,491
273,286 GOVCO LLC 5.30 01/03/2008 273,254
45,548 GREENWICH CAPITAL REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $45,560) 4.57 01/02/2008 45,548
318,834 ING (USA) ANNUITY & LIFE INSURANCE COMPANY+/- 5.10 08/16/2008 318,834
1,821,909 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $1,822,377) 4.62 01/02/2008 1,821,909
260,689 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $260,756) 4.65 01/02/2008 260,689
327,944 KESTREL FUNDING US LLC+/-++ 4.84 02/25/2008 327,888
683,216 LIQUID FUNDING LIMITED+/-++ 5.11 06/11/2008 683,763
9,110 M&I MARSHALL & ILSLEY BANK SERIES BKNT+/- 4.84 02/15/2008 9,105
6,832 MERRILL LYNCH & COMPANY INCORPORATED SERIES MTNB+/- 5.45 01/02/2008 6,832
227,739 METLIFE GLOBAL FUNDING I+/-++ 4.89 10/21/2008 227,377
136,643 MORGAN STANLEY+/- 4.57 04/07/2008 136,643
140,059 MORGAN STANLEY+/- 5.15 10/15/2008 140,059
1,659,551 MORGAN STANLEY REPURCHASE AGREEMENT - 102% COLLATERALIZED
(MATURITY VALUE $1,659,973) 4.58 01/02/2008 1,659,551
227,739 NATEXIS BANQUES POPULAIRES+/-++ 4.90 09/08/2008 227,739
1,190,247 NATIXIS SERIES YCD+/- 4.65 01/25/2008 1,189,937
162,150 PREMIUM ASSET TRUST+/-++ 5.29 07/15/2008 162,139
427,739 RACERS TRUST SERIES 2004-6-MM+/-++ 5.05 03/22/2008 427,739
182,191 SLM CORPORATION+/-++ 5.23 05/12/2008 181,114
364,382 STANFIELD VICTORIA FUNDING LLC+/-++(K)(A)(I) 5.23 04/03/2008 360,815
91,095 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 5.51 01/18/2008 90,905
175,076 THE TRAVELERS INSURANCE COMPANY+/- 5.31 02/08/2008 175,073
910,955 TRANSAMERICA OCCIDENTAL LIFE INSURANCE+/- 4.70 08/01/2008 910,955
227,739 UNICREDITO ITALIANO BANK (IRELAND) SERIES LIB+/-++ 5.26 10/08/2008 227,538
455,477 VERSAILLES CDS LLC++ 6.15 01/04/2008 455,354
227,739 VICTORIA FINANCE LLC+/-++(K)(A)(I) 4.60 08/07/2008 227,739
227,739 VICTORIA FINANCE LLC+/-++(K)(A)(I) 5.27 05/02/2008 227,740
20,433,677
-------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $20,473,371) 20,433,677
-------------
Portfolio of Investments--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 137
VT TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
SHARES SECURITY NAME VALUE
SHORT-TERM INVESTMENTS: 1.17%
1,512,796 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++ $ 1,512,796
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $1,512,796) 1,512,796
-------------
TOTAL INVESTMENTS IN SECURITIES
(COST $160,183,333)* 125.33% $ 161,796,883
OTHER ASSETS AND LIABILITIES, NET (25.33) (32,699,194)
------ -------------
TOTAL NET ASSETS 100.00% $ 129,097,689
------ -------------
PRINCIPAL INTEREST RATE MATURITY DATE
SCHEDULE OF TBA SALE COMMITMENTS: (1.26%)
$ (717,000) FNMA TBA 5.00% 01/01/2023 $ (717,673)
(906,000) FNMA TBA 5.50 01/01/2038 (904,868)
TOTAL SCHEDULE OF TBA SALE COMMITMENTS (COST $1,614,058) (1,622,541)
-------------
- --------------------------------------------------------------------------------
+/- 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.
@ Foreign bond principal is denominated in US dollars.
(E) The security is a private placement with no stated maturity date.
(K) Subsequent to December 31, 2007, this security has been classified as a
defaulted security.
(A) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
(I) Illiquid security.
<< All or a portion of this security is on loan. (See Note 2)
%% Securities issued on a when-issued (TBA) basis.
~ 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 $1,512,796.
^^ This security is currently in default with regards to scheduled interest
and/or principal payments.
* Cost for federal income tax purposes is $160,327,407 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 1,934,735
Gross unrealized depreciation (465,259)
-----------
Net unrealized appreciation (depreciation) $ 1,469,476
The accompanying notes are an integral part of these financial statements.
138 Wells Fargo Advantage Variable Trust Funds
Statements of Assets and Liabilities--December 31, 2007
VT C&B
VT Asset Large Cap
Allocation Fund Value Fund
- ----------------------------------------------------------------------------------------------------
ASSETS
Investments
In securities, at fair value .............................. $ 244,889,839 $ 30,092,754
Collateral for securities loaned (Note 2) ................. 106,284,173 1,707,007
Investments in affiliates ................................. 9,219,352 268,536
Repurchase Agreements ..................................... 0 0
---------------------------------
Total investments at market value (see cost below) .......... 360,393,364 32,068,297
---------------------------------
Cash ........................................................ 50,000 50,000
Receivable for Fund shares issued ........................... 31,932 42,488
Receivable for investments sold ............................. 129,738 291,423
Receivables for dividends and interest ...................... 1,589,812 67,619
Unrealized appreciation of swaps/spread locks ............... 0 0
Prepaid expenses and other assets ........................... 0 0
---------------------------------
Total assets ................................................... 362,194,846 32,519,827
---------------------------------
LIABILITIES
Payable for daily variation margin on futures contracts ..... 722,875 0
Foreign taxes payable ....................................... 0 0
Payable for Fund shares redeemed ............................ 680,506 3,405
Payable for investments purchased ........................... 143,861 306,031
Dividends payable ........................................... 0 0
Payable to investment advisor and affiliates (Note 3) ....... 139,878 19,429
Unrealized depreciation of swaps/spread locks ............... 0 0
Payable for securities loaned (Note 2) ...................... 106,393,527 1,711,076
Accrued expenses and other liabilities ...................... 59,909 12,796
---------------------------------
Total liabilities .............................................. 108,140,556 2,052,737
---------------------------------
TOTAL NET ASSETS ............................................... $ 254,054,290 $ 30,467,090
=================================
NET ASSETS CONSIST OF
Paid-in capital ............................................. $ 216,545,316 $ 29,329,782
Undistributed net investment income (loss) .................. 119,020 20,062
Undistributed net realized gain (loss) on investments ....... 8,978,623 (119,054)
Net unrealized appreciation (depreciation) of
investments, foreign currencies and translation of
assets and liabilities denominated in foreign currencies .. 28,395,632 1,236,300
Net unrealized appreciation (depreciation) of futures ....... 15,699 0
Net unrealized appreciation (depreciation) of options,
swap agreements, and short sales .......................... 0 0
---------------------------------
TOTAL NET ASSETS ............................................... $ 254,054,290 $ 30,467,090
=================================
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE 1
Net assets .................................................. $ 254,054,290 $ 30,467,090
Shares outstanding .......................................... 17,350,397 2,772,619
Net asset value and offering price per share ................ $ 14.64 $ 10.99
---------------------------------
Investments at cost ............................................ $ 331,997,732 $ 30,831,997
---------------------------------
Securities on loan, at market value (Note 2) ................... $ 105,239,320 $ 1,679,815
---------------------------------
- --------------------------------------------------------------------------------
1 Each Fund has an unlimited number of authorized shares.
The accompanying notes are an integral part of these financial statements.
Statements of Assets and Liabilities--December 31, 2007
Wells Fargo Advantage Variable Trust Funds 139
VT Large
VT Discovery VT Equity VT International Company
Fund Income Fund Core Fund Core Fund
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments
In securities, at fair value .............................. $ 234,443,267 $ 92,761,730 $ 43,654,401 $ 19,990,366
Collateral for securities loaned (Note 2) ................. 46,320,674 5,871,882 33,933 424,096
Investments in affiliates ................................. 5,993,079 1,300,460 715,845 140,645
Repurchase Agreements ..................................... 0 0 0 0
-----------------------------------------------------------------
Total investments at market value (see cost below) .......... 286,757,020 99,934,072 44,404,179 20,555,107
-----------------------------------------------------------------
Cash ........................................................ 0 50,000 50,000 50,000
Receivable for Fund shares issued ........................... 88,683 48,557 24,496 0
Receivable for investments sold ............................. 65,034 0 4,806 18,726
Receivables for dividends and interest ...................... 63,931 126,963 84,524 13,556
Unrealized appreciation of swaps/spread locks ............... 0 0 0 0
Prepaid expenses and other assets ........................... 0 0 179 0
-----------------------------------------------------------------
Total assets ................................................... 286,974,668 100,159,592 44,568,184 20,637,389
-----------------------------------------------------------------
LIABILITIES
Payable for daily variation margin on futures contracts ..... 0 0 0 0
Foreign taxes payable ....................................... 0 0 570 0
Payable for Fund shares redeemed ............................ 370,220 104,252 36,144 46,220
Payable for investments purchased ........................... 1,032,508 0 0 0
Dividends payable ........................................... 0 0 0 0
Payable to investment advisor and affiliates (Note 3) ....... 218,825 71,402 27,304 10,853
Unrealized depreciation of swaps/spread locks ............... 0 0 0 0
Payable for securities loaned (Note 2) ...................... 46,443,363 5,882,123 34,018 425,100
Accrued expenses and other liabilities ...................... 16,061 5,283 0 14,254
-----------------------------------------------------------------
Total liabilities .............................................. 48,080,977 6,063,060 98,036 496,427
-----------------------------------------------------------------
TOTAL NET ASSETS ............................................... $ 238,893,691 $ 94,096,532 $ 44,470,148 $ 20,140,962
=================================================================
NET ASSETS CONSIST OF
Paid-in capital ............................................. $ 357,040,475 $ 65,674,467 $ 29,833,657 $ 32,716,359
Undistributed net investment income (loss) .................. 0 15,454 611,585 179,325
Undistributed net realized gain (loss) on investments ....... (147,498,087) 10,377,838 6,552,856 (13,021,262)
Net unrealized appreciation (depreciation) of
investments, foreign currencies and translation of
assets and liabilities denominated in foreign currencies .. 29,351,303 18,028,773 7,472,050 266,540
Net unrealized appreciation (depreciation) of futures ....... 0 0 0 0
Net unrealized appreciation (depreciation) of options,
swap agreements, and short sales .......................... 0 0 0 0
-----------------------------------------------------------------
TOTAL NET ASSETS ............................................... $ 238,893,691 $ 94,096,532 $ 44,470,148 $ 20,140,962
=================================================================
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE 1
Net assets .................................................. $ 238,893,691 $ 94,096,532 $ 44,470,148 $ 20,140,962
Shares outstanding .......................................... 11,876,538 5,020,298 4,292,626 1,261,655
Net asset value and offering price per share ................ $ 20.11 $ 18.74 $ 10.36 $ 15.96
-----------------------------------------------------------------
Investments at cost ............................................ $ 257,405,717 $ 81,905,299 $ 36,933,485 $ 20,288,567
-----------------------------------------------------------------
Securities on loan, at market value (Note 2) ................... $ 44,612,308 $ 5,698,745 $ 33,007 $ 410,793
-----------------------------------------------------------------
VT Large VT Money
Company Market VT Opportunity
Growth Fund Fund Fund
-------------------------------------------------
ASSETS
Investments
In securities, at fair value .............................. $ 97,301,406 $ 40,832,936 $ 704,385,985
Collateral for securities loaned (Note 2) ................. 1,942,065 0 68,921,282
Investments in affiliates ................................. 816,369 0 77,768,956
Repurchase Agreements ..................................... 0 9,679,568 0
-------------------------------------------------
Total investments at market value (see cost below) .......... 100,059,840 50,512,504 851,076,223
-------------------------------------------------
Cash ........................................................ 50,000 50,000 3,994
Receivable for Fund shares issued ........................... 58,136 0 239,367
Receivable for investments sold ............................. 1,045,862 0 1,925,884
Receivables for dividends and interest ...................... 40,011 90,903 687,129
Unrealized appreciation of swaps/spread locks ............... 0 0 322,227
Prepaid expenses and other assets ........................... 0 0 0
-------------------------------------------------
Total assets ................................................... 101,253,849 50,653,407 854,254,824
-------------------------------------------------
LIABILITIES
Payable for daily variation margin on futures contracts ..... 0 0 0
Foreign taxes payable ....................................... 0 0 0
Payable for Fund shares redeemed ............................ 159,788 0 1,222,778
Payable for investments purchased ........................... 0 0 2,509,843
Dividends payable ........................................... 0 6,112 0
Payable to investment advisor and affiliates (Note 3) ....... 76,791 25,277 644,238
Unrealized depreciation of swaps/spread locks ............... 0 0 1,292,119
Payable for securities loaned (Note 2) ...................... 1,947,094 0 69,152,012
Accrued expenses and other liabilities ...................... 4,821 18,900 148,257
-------------------------------------------------
Total liabilities .............................................. 2,188,494 50,289 74,969,247
-------------------------------------------------
TOTAL NET ASSETS ............................................... $ 99,065,355 $ 50,603,118 $ 779,285,577
=================================================
NET ASSETS CONSIST OF
Paid-in capital ............................................. $ 111,039,303 $ 50,602,968 $ 537,559,157
Undistributed net investment income (loss) .................. 202,663 0 12,522,814
Undistributed net realized gain (loss) on investments ....... (27,488,899) 150 130,208,839
Net unrealized appreciation (depreciation) of
investments, foreign currencies and translation of
assets and liabilities denominated in foreign currencies .. 15,312,288 0 99,964,659
Net unrealized appreciation (depreciation) of futures ....... 0 0 0
Net unrealized appreciation (depreciation) of options,
swap agreements, and short sales .......................... 0 0 (969,892)
-------------------------------------------------
TOTAL NET ASSETS ............................................... $ 99,065,355 $ 50,603,118 $ 779,285,577
=================================================
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE 1
Net assets .................................................. $ 99,065,355 $ 50,603,118 $ 779,285,577
Shares outstanding .......................................... 9,601,053 50,605,827 35,378,669
Net asset value and offering price per share ................ $ 10.32 $ 1.00 $ 22.03
-------------------------------------------------
Investments at cost ............................................ $ 84,747,552 $ 50,512,504 $ 751,111,582
-------------------------------------------------
Securities on loan, at market value (Note 2) ................... $ 1,871,446 $ 0 $ 65,656,159
-------------------------------------------------
140 Wells Fargo Advantage Variable Trust Funds
Statements of Assets and Liabilities--December 31, 2007
VT Small Cap VT Small/Mid VT Total Return
Growth Fund Cap Value Fund Bond Fund
- --------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments
In securities, at fair value .................................... $ 212,969,832 $ 17,375,060 $ 139,850,410
Collateral for securities loaned (Note 2) ....................... 80,556,292 0 20,433,677
Investments in affiliates ....................................... 10,060,650 278,087 1,512,796
------------------------------------------------
Total investments at market value (see cost below) ................. 303,586,774 17,653,147 161,796,883
------------------------------------------------
Cash ............................................................... 50,000 0 50,000
Receivable for Fund shares issued .................................. 14,749 2,547 2,114
Receivable for investments sold .................................... 1,252,264 62,250 15,977,550
Receivables for dividends and interest ............................. 46,652 14,893 952,229
------------------------------------------------
Total assets .......................................................... 304,950,439 17,732,837 178,778,776
------------------------------------------------
LIABILITIES
Payable for sales commitments, at fair value ....................... 0 0 1,622,540
Payable for Fund shares redeemed ................................... 200,065 32,025 332,699
Payable for investments purchased .................................. 2,370,514 136,685 27,136,037
Dividends payable .................................................. 0 0 14,874
Payable to investment advisor and affiliates (Note 3) .............. 142,190 12,037 59,904
Payable for securities loaned (Note 2) ............................. 80,767,673 0 20,473,371
Accrued expenses and other liabilities ............................. 75,882 25,122 41,662
------------------------------------------------
Total liabilities ..................................................... 83,556,324 205,869 49,681,087
------------------------------------------------
TOTAL NET ASSETS ...................................................... $ 221,394,115 $ 17,526,968 $ 129,097,689
================================================
NET ASSETS CONSIST OF
Paid-in capital .................................................... $ 176,982,487 $ 15,389,895 $ 129,078,147
Undistributed net investment income (loss) ......................... 0 (24,142) 15,216
Undistributed net realized gain (loss) on investments .............. 45,869,263 2,474,040 (1,600,741)
Net unrealized appreciation (depreciation) of investments, foreign
currencies and translation of assets and liabilities denominated
in foreign currencies ............................................ (1,457,635) (312,825) 1,613,550
Net unrealized appreciation (depreciation) of options, swap
agreements, and sales commitments ............................... 0 0 (8,483)
------------------------------------------------
TOTAL NET ASSETS ...................................................... $ 221,394,115 $ 17,526,968 $ 129,097,689
================================================
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE 1
Net assets ......................................................... $ 221,394,115 $ 17,526,968 $ 129,097,689
Shares outstanding ................................................. 22,850,061 1,582,413 12,987,464
Net asset value and offering price per share ....................... $ 9.69 $ 11.08 $ 9.94
------------------------------------------------
Investments at cost ................................................... $ 305,044,409 $ 17,965,972 $ 160,183,333
------------------------------------------------
Securities on loan, at market value (Note 2) .......................... $ 77,717,659 $ 0 $ 20,160,342
------------------------------------------------
- --------------------------------------------------------------------------------
1 Each Fund has an unlimited number of authorized shares.
The accompanying notes are an integral part of these financial statements.
THIS PAGE IS INTENTIONALLY LEFT BLANK.
142 Wells Fargo Advantage Variable Trust Funds
Statements of Operations--For the Year Ended December 31, 2007
VT Asset VT C&B
Allocation Large Cap
Fund Value Fund
- ------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends 1 ....................................................... $ 3,094,884 $ 606,480
Interest .......................................................... 5,107,556 0
Income from affiliated securities ................................. 480,523 70,435
Securities lending income, net .................................... 255,641 4,037
-----------------------------
Total investment income .............................................. 8,938,604 680,952
-----------------------------
EXPENSES
Advisory fees ..................................................... 1,505,505 177,121
Administration fees ............................................... 437,965 51,526
Custody fees ...................................................... 54,746 6,441
Accounting fees ................................................... 33,266 21,355
Distribution fees (Note 3) ........................................ 684,320 80,509
Professional fees ................................................. 26,913 19,766
Shareholder reports ............................................... 30,895 7,097
Trustees' fees .................................................... 8,955 8,955
Other fees and expenses ........................................... 10,016 3,323
-----------------------------
Total expenses ....................................................... 2,792,581 376,093
-----------------------------
LESS
Waived fees and reimbursed expenses (Note 3) ...................... (55,299) (54,056)
Net expenses ...................................................... 2,737,282 322,037
-----------------------------
Net investment income (loss) ......................................... 6,201,322 358,915
-----------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
NET REALIZED GAIN (LOSS) FROM
Securities, foreign currencies and foreign currency translation ... 11,486,799 2,454,447
Affiliated securities ............................................. 138,025 0
Futures transactions .............................................. 4,678,925 0
Options, swap agreements and short sale transactions .............. 0 0
-----------------------------
Net realized gain and loss from investments .......................... 16,303,749 2,454,447
-----------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF
Securities, foreign currencies and foreign currency translation ... (910,740) (3,327,040)
Futures transactions .............................................. (1,231,813) 0
Options, swap agreements and short sale transactions .............. 0 0
-----------------------------
Net change in unrealized appreciation (depreciation) of investments .. (2,142,553) (3,327,040)
-----------------------------
Net realized and unrealized gain (loss) on investments ............... 14,161,196 (872,593)
-----------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ...... $ 20,362,518 $ (513,678)
=============================
1 Net of foreign withholding taxes of ................................ $ 0 $ 3,667
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Statements of Operations--For the Year Ended December 31, 2007
Wells Fargo Advantage Variable Trust Funds 143
VT Large
VT Discovery VT Equity VT International Company
Fund Income Fund Core Fund Core Fund
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends 1 ...................................................... $ 490,130 $ 2,559,625 $ 1,161,818 $ 392,322
Interest ......................................................... 1,232 763 0 0
Income from affiliated securities ................................ 448,624 46,629 25,537 19,542
Securities lending income, net ................................... 88,161 11,148 432 1,568
-----------------------------------------------------------
Total investment income ............................................. 1,028,147 2,618,165 1,187,787 413,432
-----------------------------------------------------------
EXPENSES
Advisory fees .................................................... 1,803,347 577,501 345,574 128,760
Administration fees .............................................. 384,714 168,000 73,722 37,457
Custody fees ..................................................... 48,089 21,000 46,077 4,682
Accounting fees .................................................. 32,505 24,967 37,720 20,960
Distribution fees (Note 3) ....................................... 601,116 262,501 115,191 58,527
Professional fees ................................................ 23,373 22,004 16,838 20,182
Shareholder reports .............................................. 3,953 13,801 9,485 2,646
Trustees' fees ................................................... 8,955 8,955 8,955 8,955
Other fees and expenses .......................................... 4,238 3,813 7,959 3,207
-----------------------------------------------------------
Total expenses ...................................................... 2,910,290 1,102,542 661,521 285,376
-----------------------------------------------------------
LESS
Waived fees and reimbursed expenses (Note 3) ..................... (145,158) (52,540) (200,735) (51,269)
Net expenses ..................................................... 2,765,132 1,050,002 460,786 234,107
-----------------------------------------------------------
Net investment income (loss) ........................................ (1,736,985) 1,568,163 727,001 179,325
-----------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
NET REALIZED GAIN (LOSS) FROM
Securities, foreign currencies and foreign currency translation .. 53,314,005 10,471,070 6,508,824 2,739,690
Affiliated securities ............................................ 0 0 0 0
Futures transactions ............................................. 0 0 0 0
Options, swap agreements and short sale transactions ............. 0 0 0 0
-----------------------------------------------------------
Net realized gain and loss from investments ......................... 53,314,005 10,471,070 6,508,824 2,739,690
-----------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF
Securities, foreign currencies and foreign currency translation .. (3,454,623) (8,869,555) (1,710,827) (2,154,945)
Futures transactions ............................................. 0 0 0 0
Options, swap agreements and short sale transactions ............. 0 0 0 0
-----------------------------------------------------------
Net change in unrealized appreciation (depreciation) of
investments ...................................................... (3,454,623) (8,869,555) (1,710,827) (2,154,945)
-----------------------------------------------------------
Net realized and unrealized gain (loss) on investments .............. 49,859,382 1,601,515 4,797,997 584,745
-----------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ..... $ 48,122,397 $ 3,169,678 $5,524,998 $ 764,070
===========================================================
1 Net of foreign withholding taxes of ............................... $ 3,078 $ 2,946 $ 93,044 $ 1,298
VT Large VT Money
Company Market VT Opportunity
Growth Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends 1 ....................................................... $ 1,194,363 $ 0 $ 12,369,773
Interest .......................................................... 0 2,565,172 95,710
Income from affiliated securities ................................. 54,811 0 2,886,559
Securities lending income, net .................................... 14,270 0 290,625
---------------------------------------------
Total investment income .............................................. 1,263,444 2,565,172 15,642,667
---------------------------------------------
EXPENSES
Advisory fees ..................................................... 583,380 144,601 6,291,210
Administration fees ............................................... 169,711 77,120 1,381,005
Custody fees ...................................................... 21,214 9,640 172,626
Accounting fees ................................................... 25,011 22,146 92,247
Distribution fees (Note 3) ........................................ 265,173 120,500 2,157,820
Professional fees ................................................. 21,464 17,906 35,323
Shareholder reports ............................................... 16,395 2,685 131,483
Trustees' fees .................................................... 8,955 8,955 8,955
Other fees and expenses ........................................... 5,491 2,867 17,030
---------------------------------------------
Total expenses ....................................................... 1,116,794 406,420 10,287,699
---------------------------------------------
LESS
Waived fees and reimbursed expenses (Note 3) ...................... (56,012) (44,918) (1,050,817)
Net expenses ...................................................... 1,060,782 361,502 9,236,882
---------------------------------------------
Net investment income (loss) ......................................... 202,662 2,203,670 6,405,785
---------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
NET REALIZED GAIN (LOSS) FROM
Securities, foreign currencies and foreign currency translation ... 2,378,797 211 135,198,400
Affiliated securities ............................................. 0 0 0
Futures transactions .............................................. 0 0 0
Options, swap agreements and short sale transactions .............. 0 0 6,172,676
---------------------------------------------
Net realized gain and loss from investments .......................... 2,378,797 211 141,371,076
---------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF
Securities, foreign currencies and foreign currency translation ... 5,501,174 0 (85,973,876)
Futures transactions .............................................. 0 0 0
Options, swap agreements and short sale transactions .............. 0 0 (1,796,864)
---------------------------------------------
Net change in unrealized appreciation (depreciation) of investments .. 5,501,174 0 (87,770,740)
---------------------------------------------
Net realized and unrealized gain (loss) on investments ............... 7,879,971 211 53,600,336
---------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ...... $ 8,082,633 $ 2,203,881 $ 60,006,121
=============================================
1 Net of foreign withholding taxes of ................................ $ 15,758 $ 0 $ 88,583
144 Wells Fargo Advantage Variable Trust Funds
Statements of Operations--For the Year Ended December 31, 2007
VT Small Cap VT Small/Mid VT Total Return
Growth Fund Cap Value Fund Bond Fund
- --------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends 1 ........................................................ $ 404,622 $ 159,900 $ 0
Interest ........................................................... 0 0 6,833,721
Income from affiliated securities .................................. 218,241 9,244 53,318
Securities lending income, net ..................................... 359,379 0 71,633
----------------------------------------------
Total investment income ............................................... 982,242 169,144 6,958,672
----------------------------------------------
EXPENSES
Advisory fees ...................................................... 1,566,616 153,163 570,556
Administration fees ................................................ 334,211 32,675 202,864
Custody fees ....................................................... 41,776 4,084 25,358
Accounting fees .................................................... 29,938 21,198 26,094
Distribution fees (Note 3) ......................................... 522,205 51,054 316,976
Professional fees .................................................. 22,656 22,137 24,433
Shareholder reports ................................................ 36,490 14,156 11,462
Trustees' fees ..................................................... 8,955 8,955 8,955
Other fees and expenses ............................................ 3,244 1,255 5,227
----------------------------------------------
Total expenses ........................................................ 2,566,091 308,677 1,191,925
----------------------------------------------
LESS
Waived fees and reimbursed expenses (Note 3) ....................... (59,507) (75,846) (50,813)
Net expenses ....................................................... 2,506,584 232,831 1,141,112
----------------------------------------------
Net investment income (loss) .......................................... (1,524,342) (63,687) 5,817,560
----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
NET REALIZED GAIN (LOSS) FROM
Securities, foreign currencies and foreign currency translation .... 48,101,338 2,998,200 264,214
Options, swap agreements and short sale transactions ............... 0 0 5,806
----------------------------------------------
Net realized gain and loss from investments ........................... 48,101,338 2,998,200 270,020
----------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF
Securities, foreign currencies and foreign currency translation .... (20,819,556) (2,917,502) 1,508,078
Options, swap agreements and short sale transactions ............... 0 0 (37,697)
----------------------------------------------
Net change in unrealized appreciation (depreciation) of investments ... (20,819,556) (2,917,502) 1,470,381
----------------------------------------------
Net realized and unrealized gain (loss) on investments ................ 27,281,782 80,698 1,740,401
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ....... $ 25,757,440 $ 17,011 $ 7,557,961
==============================================
1 Net of foreign withholding taxes of ................................. $ 0 $ 6,594 $ 0
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
THIS PAGE IS INTENTIONALLY LEFT BLANK.
146 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, 2007 December 31, 2006
- ----------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets .................................................................. $ 288,387,160 $ 309,673,169
OPERATIONS
Net investment income (loss) .......................................................... 6,201,322 6,688,122
Net realized gain (loss) on investments ............................................... 16,303,749 6,396,185
Net change in unrealized appreciation (depreciation) of investments ................... (2,142,553) 20,182,862
---------------------------------
Net increase (decrease) in net assets resulting from operations .......................... 20,362,518 33,267,169
---------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income ................................................................. (6,059,537) (6,714,517)
Net realized gain on sales of investments ............................................. (4,230,151) (3,306,822)
---------------------------------
Total distributions to shareholders ...................................................... (10,289,688) (10,021,339)
---------------------------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold ............................................................. 15,975,890 14,519,334
Reinvestment of distributions ......................................................... 10,289,756 10,021,653
Cost of shares redeemed ............................................................... (70,671,346) (69,072,826)
---------------------------------
Net increase (decrease) in net assets resulting from capital share transaction - Total ... (44,405,700) (44,531,839)
---------------------------------
NET INCREASE (DECREASE) IN NET ASSETS .................................................... (34,332,870) (21,286,009)
=================================
ENDING NET ASSETS ........................................................................ $ 254,054,290 $ 288,387,160
=================================
SHARES ISSUED AND REDEEMED
Shares sold ........................................................................... 1,090,079 1,088,070
Shares issued in reinvestment of distributions ........................................ 701,089 763,474
Shares redeemed ....................................................................... (4,844,255) (5,181,128)
---------------------------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL
SHARE TRANSACTIONS ..................................................................... (3,053,087) (3,329,584)
=================================
Ending balance of undistributed net investment income (loss) ............................. $ 119,020 $ 11,798
---------------------------------
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Statements of Changes in Net Assets
Wells Fargo Advantage Variable Trust Funds 147
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, 2007 December 31, 2006 December 31, 2007 December 31, 2006
- ---------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets ............................. $ 32,168,833 $ 28,663,756 $ 233,946,749 $ 250,275,085
OPERATIONS
Net investment income (loss) ..................... 358,915 431,422 (1,736,985) (1,883,491)
Net realized gain (loss) on investments .......... 2,454,447 1,745,507 53,314,005 30,085,125
Net change in unrealized appreciation
(depreciation) of investments .................. (3,327,040) 3,785,197 (3,454,623) 5,638,071
----------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations ................................... (513,678) 5,962,126 48,122,397 33,839,705
----------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income (338,853) (440,202) 0 0
Net realized gain on sales of investments ........ 0 0 0 0
----------------------------------------------------------------------
Total distributions to shareholders ................. (338,853) (440,202) 0 0
----------------------------------------------------------------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold ........................ 11,932,733 8,888,305 32,983,718 27,531,437
Reinvestment of distributions .................... 338,853 440,202 0 0
Cost of shares redeemed .......................... (13,120,798) (11,345,354) (76,159,173) (77,699,478)
----------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from capital share transaction - Total ............ (849,212) (2,016,847) (43,175,455) (50,168,041)
----------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ............... (1,701,743) 3,505,077 4,946,942 (16,328,336)
======================================================================
ENDING NET ASSETS ................................... $ 30,467,090 $ 32,168,833 $ 238,893,691 $ 233,946,749
======================================================================
SHARES ISSUED AND REDEEMED
Shares sold ...................................... 1,032,150 867,789 1,744,047 1,777,423
Shares issued in reinvestment of distributions ... 29,870 42,359 0 0
Shares redeemed .................................. (1,150,985) (1,116,479) (4,093,604) (5,010,257)
----------------------------------------------------------------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING
RESULTING FROM CAPITAL SHARE TRANSACTIONS ......... (88,965) (206,331) (2,349,557) (3,232,834)
======================================================================
Ending balance of undistributed net investment
income (loss) ..................................... $ 20,062 $ 0 $ 0 $ 0
----------------------------------------------------------------------
VT EQUITY INCOME FUND
-------------------------------------
For the For the
Year Ended Year Ended
December 31, 2007 December 31, 2006
- ----------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets .................................................................. $ 116,232,202 $ 114,375,162
OPERATIONS
Net investment income (loss) .......................................................... 1,568,163 1,681,100
Net realized gain (loss) on investments ............................................... 10,471,070 6,885,071
Net change in unrealized appreciation (depreciation) of investments ................... (8,869,555) 10,106,146
---------------------------------
Net increase (decrease) in net assets resulting from operations .......................... 3,169,678 18,672,317
---------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income ................................................................. (1,552,694) (1,695,304)
Net realized gain on sales of investments ............................................. (6,896,727) (241,083)
---------------------------------
Total distributions to shareholders ...................................................... (8,449,421) (1,936,387)
---------------------------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold ............................................................. 10,217,892 17,660,732
Reinvestment of distributions ......................................................... 8,449,441 1,936,387
Cost of shares redeemed ............................................................... (35,523,260) (34,476,009)
---------------------------------
Net increase (decrease) in net assets resulting from capital share transaction - Total ... (16,855,927) (14,878,890)
---------------------------------
NET INCREASE (DECREASE) IN NET ASSETS .................................................... (22,135,670) 1,857,040
=================================
ENDING NET ASSETS ........................................................................ $ 94,096,532 $ 116,232,202
=================================
SHARES ISSUED AND REDEEMED
Shares sold ........................................................................... 517,597 967,254
Shares issued in reinvestment of distributions ........................................ 424,591 107,475
Shares redeemed ....................................................................... (1,808,274) (1,934,053)
---------------------------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL
SHARE TRANSACTIONS ..................................................................... (866,086) (859,324)
=================================
Ending balance of undistributed net investment income (loss) ............................. $ 15,454 $ 0
---------------------------------
148 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, 2007 December 31, 2006
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets .................................................................... $ 44,316,850 $ 39,601,598
OPERATIONS
Net investment income (loss) ............................................................ 727,001 780,085
Net realized gain (loss) on investments ................................................. 6,508,824 3,263,218
Net change in unrealized appreciation (depreciation) of investments ..................... (1,710,827) 3,923,194
------------------------------------
Net increase (decrease) in net assets resulting from operations ............................ 5,524,998 7,966,497
------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income ................................................................... (6,103) (698,387)
Net realized gain on sales of investments ............................................... (3,343,838) (1,638,003)
------------------------------------
Total distributions to shareholders ........................................................ (3,349,941) (2,336,390)
------------------------------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold ............................................................... 6,824,060 9,119,417
Reinvestment of distributions ........................................................... 3,349,870 2,336,390
Cost of shares redeemed ................................................................. (12,195,689) (12,370,662)
------------------------------------
Net increase (decrease) in net assets resulting from capital share transaction - Total ..... (2,021,759) (914,855)
------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ...................................................... 153,298 4,715,252
====================================
ENDING NET ASSETS .......................................................................... $ 44,470,148 $ 44,316,850
====================================
SHARES ISSUED AND REDEEMED
Shares sold ............................................................................. 656,751 982,679
Shares issued in reinvestment of distributions .......................................... 314,837 262,323
Shares redeemed ......................................................................... (1,167,028) (1,330,217)
------------------------------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS .... (195,440) (85,215)
====================================
Ending balance of undistributed net investment income (loss) ............................... $ 611,585 $ (718)
------------------------------------
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Statements of Changes in Net Assets
Wells Fargo Advantage Variable Trust Funds 149
VT LARGE COMPANY CORE FUND
-------------------------------------
For the For the
Year Ended Year Ended
December 31, 2007 December 31, 2006
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets .................................................................... $ 25,349,251 $ 28,460,417
OPERATIONS
Net investment income (loss) ............................................................ 179,325 165,235
Net realized gain (loss) on investments ................................................. 2,739,690 573,883
Net change in unrealized appreciation (depreciation) of investments ..................... (2,154,945) 2,829,099
------------------------------------
Net increase (decrease) in net assets resulting from operations ............................ 764,070 3,568,217
------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income ................................................................... 0 (169,525)
Net realized gain on sales of investments ............................................... 0 0
------------------------------------
Total distributions to shareholders ........................................................ 0 (169,525)
------------------------------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold ............................................................... 1,726,212 870,198
Reinvestment of distributions ........................................................... 0 169,525
Cost of shares redeemed ................................................................. (7,698,571) (7,549,581)
------------------------------------
Net increase (decrease) in net assets resulting from capital share transaction - Total ..... (5,972,359) (6,509,858)
------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ...................................................... (5,208,289) (3,111,166)
====================================
ENDING NET ASSETS .......................................................................... $ 20,140,962 $ 25,349,251
====================================
SHARES ISSUED AND REDEEMED
Shares sold ............................................................................. 103,579 62,521
Shares issued in reinvestment of distributions .......................................... 0 10,882
Shares redeemed ......................................................................... (467,398) (543,007)
------------------------------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS .... (363,819) (469,604)
====================================
Ending balance of undistributed net investment income (loss) ............................... $ 179,325 $ 0
------------------------------------
VT LARGE COMPANY GROWTH FUND
-------------------------------------
For the For the
Year Ended Year Ended
December 31, 2007 December 31, 2006
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets .................................................................... $ 108,621,014 $ 116,002,760
OPERATIONS
Net investment income (loss) ............................................................ 202,662 (180,923)
Net realized gain (loss) on investments ................................................. 2,378,797 (1,406,919)
Net change in unrealized appreciation (depreciation) of investments ..................... 5,501,174 3,887,244
------------------------------------
Net increase (decrease) in net assets resulting from operations ............................ 8,082,633 2,299,402
------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income ................................................................... 0 0
Net realized gain on sales of investments ............................................... 0 0
------------------------------------
Total distributions to shareholders ........................................................ 0 0
------------------------------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold ............................................................... 5,962,327 19,955,112
Reinvestment of distributions ........................................................... 0 0
Cost of shares redeemed ................................................................. (23,600,619) (29,636,260)
------------------------------------
Net increase (decrease) in net assets resulting from capital share transaction - Total ..... (17,638,292) (9,681,148)
------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ...................................................... (9,555,659) (7,381,746)
====================================
ENDING NET ASSETS .......................................................................... $ 99,065,355 $ 108,621,014
====================================
SHARES ISSUED AND REDEEMED
Shares sold ............................................................................. 590,520 2,177,338
Shares issued in reinvestment of distributions .......................................... 0 0
Shares redeemed ......................................................................... (2,316,245) (3,230,633)
------------------------------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS .... (1,725,725) (1,053,295)
====================================
Ending balance of undistributed net investment income (loss) ............................... $ 202,663 $ 0
------------------------------------
VT MONEY MARKET FUND
-------------------------------------
For the For the
Year Ended Year Ended
December 31, 2007 December 31, 2006
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets .................................................................... $ 52,499,083 $ 55,503,618
OPERATIONS
Net investment income (loss) ............................................................ 2,203,670 2,301,619
Net realized gain (loss) on investments ................................................. 211 (61)
Net change in unrealized appreciation (depreciation) of investments ..................... 0 0
------------------------------------
Net increase (decrease) in net assets resulting from operations ............................ 2,203,881 2,301,558
------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income ................................................................... (2,203,670) (2,302,981)
Net realized gain on sales of investments ............................................... 0 0
------------------------------------
Total distributions to shareholders ........................................................ (2,203,670) (2,302,981)
------------------------------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold ............................................................... 52,256,429 47,059,483
Reinvestment of distributions ........................................................... 2,210,831 2,300,419
Cost of shares redeemed ................................................................. (56,363,436) (52,363,014)
------------------------------------
Net increase (decrease) in net assets resulting from capital share transaction - Total ..... (1,896,176) (3,003,112)
------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ...................................................... (1,895,965) (3,004,535)
====================================
ENDING NET ASSETS .......................................................................... $ 50,603,118 $ 52,499,083
====================================
SHARES ISSUED AND REDEEMED
Shares sold ............................................................................. 52,256,429 47,059,483
Shares issued in reinvestment of distributions .......................................... 2,210,831 2,300,419
Shares redeemed ......................................................................... (56,363,436) (52,363,014)
------------------------------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS .... (1,896,176) (3,003,112)
====================================
Ending balance of undistributed net investment income (loss) ............................... $ 0 $ 0
------------------------------------
150 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, 2007 December 31, 2006
- -----------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets ................................................................... $ 897,046,934 $ 1,004,763,346
OPERATIONS
Net investment income (loss) ........................................................... 6,405,785 4,561,235
Net realized gain (loss) on investments ................................................ 141,371,076 119,801,999
Net change in unrealized appreciation (depreciation) of investments .................... (87,770,740) (15,802,903)
-------------------------------------
Net increase (decrease) in net assets resulting from operations ........................... 60,006,121 108,560,331
-------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income .................................................................. (5,147,124) 0
Net realized gain on sales of investments .............................................. (120,619,260) (103,073,932)
-------------------------------------
Total distributions to shareholders ....................................................... (125,766,384) (103,073,932)
-------------------------------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold .............................................................. 65,979,170 54,335,214
Reinvestment of distributions .......................................................... 125,766,640 103,073,932
Cost of shares redeemed ................................................................ (243,746,904) (270,611,957)
-------------------------------------
Net increase (decrease) in net assets resulting from capital share transaction - Total..... (52,001,094) (113,202,811)
-------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ..................................................... (117,761,357) (107,716,412)
=====================================
ENDING NET ASSETS ......................................................................... $ 779,285,577 $ 897,046,934
=====================================
SHARES ISSUED AND REDEEMED
Shares sold ............................................................................ 2,723,976 2,258,636
Shares issued in reinvestment of distributions ......................................... 5,390,769 4,908,283
Shares redeemed ........................................................................ (10,081,414) (11,307,863)
-------------------------------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS ... (1,966,669) (4,140,944)
=====================================
Ending balance of undistributed net investment income (loss) .............................. $ 12,522,814 $ 4,246,699
-------------------------------------
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Statements of Changes in Net Assets
Wells Fargo Advantage Variable Trust Funds 151
VT SMALL CAP GROWTH FUND
-------------------------------------
For the For the
Year Ended Year Ended
December 31, 2007 December 31, 2006
- -----------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets ................................................................... $ 190,516,263 $ 167,033,021
OPERATIONS
Net investment income (loss) ........................................................... (1,524,342) (1,764,800)
Net realized gain (loss) on investments ................................................ 48,101,338 34,346,985
Net change in unrealized appreciation (depreciation) of investments .................... (20,819,556) 4,007,449
-------------------------------------
Net increase (decrease) in net assets resulting from operations ........................... 25,757,440 36,589,634
-------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income .................................................................. 0 0
Net realized gain on sales of investments .............................................. (31,940,178) (4,390,755)
-------------------------------------
Total distributions to shareholders ....................................................... (31,940,178) (4,390,755)
-------------------------------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold .............................................................. 29,958,902 18,106,886
Reinvestment of distributions .......................................................... 31,939,491 4,390,702
Cost of shares redeemed ................................................................ (24,837,803) (31,213,225)
-------------------------------------
Net increase (decrease) in net assets resulting from capital share transaction - Total .... 37,060,590 (8,715,637)
-------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ..................................................... 30,877,852 23,483,242
=====================================
ENDING NET ASSETS ......................................................................... $ 221,394,115 $ 190,516,263
=====================================
SHARES ISSUED AND REDEEMED
Shares sold ............................................................................ 2,962,137 1,947,455
Shares issued in reinvestment of distributions ......................................... 3,162,328 527,094
Shares redeemed ........................................................................ (2,400,873) (3,377,927)
-------------------------------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS ... 3,723,592 (903,378)
=====================================
Ending balance of undistributed net investment income (loss) .............................. $ 0 $ 0
-------------------------------------
VT SMALL/MID CAP VALUE FUND
-------------------------------------
For the For the
Year Ended Year Ended
December 31, 2007 December 31, 2006
- -----------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets ................................................................... $ 23,462,113 $ 23,888,622
OPERATIONS
Net investment income (loss) ........................................................... (63,687) (55,736)
Net realized gain (loss) on investments ................................................ 2,998,200 3,898,646
Net change in unrealized appreciation (depreciation) of investments .................... (2,917,502) (426,852)
-------------------------------------
Net increase (decrease) in net assets resulting from operations ........................... 17,011 3,416,058
-------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income .................................................................. (4,115) 0
Net realized gain on sales of investments .............................................. (3,459,810) (3,659,180)
-------------------------------------
Total distributions to shareholders ....................................................... (3,463,925) (3,659,180)
-------------------------------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold .............................................................. 5,064,947 7,953,474
Reinvestment of distributions .......................................................... 3,463,925 3,659,180
Cost of shares redeemed ................................................................ (11,017,103) (11,796,041)
-------------------------------------
Net increase (decrease) in net assets resulting from capital share transaction - Total .... (2,488,231) (183,387)
-------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ..................................................... (5,935,145) (426,509)
=====================================
ENDING NET ASSETS ......................................................................... $ 17,526,968 $ 23,462,113
=====================================
SHARES ISSUED AND REDEEMED
Shares sold ............................................................................ 389,409 579,952
Shares issued in reinvestment of distributions ......................................... 283,928 310,890
Shares redeemed ........................................................................ (865,255) (864,749)
-------------------------------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS ... (191,918) 26,093
=====================================
Ending balance of undistributed net investment income (loss) .............................. $ (24,142) $ (62,222)
-------------------------------------
VT TOTAL RETURN BOND FUND
-------------------------------------
For the For the
Year Ended Year Ended
December 31, 2007 December 31, 2006
- -----------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets ................................................................... $ 116,449,325 $ 85,444,520
OPERATIONS
Net investment income (loss) ........................................................... 5,817,560 4,116,550
Net realized gain (loss) on investments ................................................ 270,020 (736,650)
Net change in unrealized appreciation (depreciation) of investments .................... 1,470,381 517,176
-------------------------------------
Net increase (decrease) in net assets resulting from operations ........................... 7,557,961 3,897,076
-------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income .................................................................. (5,839,104) (4,144,502)
Net realized gain on sales of investments .............................................. 0 0
-------------------------------------
Total distributions to shareholders ....................................................... (5,839,104) (4,144,502)
-------------------------------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold .............................................................. 28,392,338 48,274,827
Reinvestment of distributions .......................................................... 5,851,603 4,134,737
Cost of shares redeemed ................................................................ (23,314,434) (21,157,333)
-------------------------------------
Net increase (decrease) in net assets resulting from capital share transaction - Total .... 10,929,507 31,252,231
-------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ..................................................... 12,648,364 31,004,805
=====================================
ENDING NET ASSETS ......................................................................... $ 129,097,689 $ 116,449,325
=====================================
SHARES ISSUED AND REDEEMED
Shares sold ............................................................................ 2,898,839 4,954,448
Shares issued in reinvestment of distributions ......................................... 596,842 424,285
Shares redeemed ........................................................................ (2,381,720) (2,173,282)
-------------------------------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS ... 1,113,961 3,205,451
=====================================
Ending balance of undistributed net investment income (loss) .............................. $ 15,216 $ 11,436
-------------------------------------
152 Wells Fargo Advantage Variable Trust Funds Financial Highlights
Beginning Net Realized Distributions
Net Asset Net and Unrealized from Net Distributions
Value Per Investment Gain (Loss) Investment from Net
Share Income (Loss) on Investments Income Realized Gains
- -----------------------------------------------------------------------------------------------------------------------------------
VT ASSET ALLOCATION FUND
- -----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ $ 14.13 0.34 0.73 (0.33) (0.23)
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
VT C&B LARGE CAP VALUE FUND
- -----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ $ 11.24 0.13 (0.26) (0.12) 0.00
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
VT DISCOVERY FUND
- -----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ $ 16.44 (0.15) 3.82 0.00 0.00
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
VT EQUITY INCOME FUND
- -----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ $ 19.75 0.30 0.33 (0.30) (1.34)
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)
VT INTERNATIONAL CORE FUND
- -----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ $ 9.87 0.17 1.10 0.00 (0.78)
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
VT LARGE COMPANY CORE FUND
- -----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ $ 15.59 0.14 0.23 0.00 0.00
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
VT LARGE COMPANY GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ $ 9.59 0.02 0.71 0.00 0.00
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
- --------------------------------------------------------------------------------
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%.
5 Portfolio turnover ratio excluding TBAs is 309%.
6 Calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued. Portfolio turnover rates presented
for periods of less than one year are not annualized.
The accompanying notes are an integral part of these financial statements.
Financial Highlights Wells Fargo Advantage Variable Trust Funds 153
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, 2007 to December 31, 2007 ................ 0.00 $ 14.64 2.26% 1.02% (0.02)% 1.00%
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%
VT C&B LARGE CAP VALUE FUND
- ------------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 0.00 $ 10.99 1.11% 1.17% (0.17)% 1.00%
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%
VT DISCOVERY FUND
- ------------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 0.00 $ 20.11 (0.72)% 1.21% (0.06)% 1.15%
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%
VT EQUITY INCOME FUND
- ------------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 0.00 $ 18.74 1.49% 1.05% (0.05)% 1.00%
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%
VT INTERNATIONAL CORE FUND
- ------------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 0.00 $ 10.36 1.57% 1.44% (0.44)% 1.00%
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%
VT LARGE COMPANY CORE FUND
- ------------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 0.00 $ 15.96 0.76% 1.22% (0.22)% 1.00%
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%
VT LARGE COMPANY GROWTH FUND
- ------------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 0.00 $ 10.32 0.19% 1.05% (0.05)% 1.00%
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%
Portfolio Net Assets at
Total Turnover End of Period
Return 3 Rate 6 (000's omitted)
- ----------------------------------------------------------------------------------------------
VT ASSET ALLOCATION FUND
- ----------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 7.60% 25% $ 254,054
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
VT C&B LARGE CAP VALUE FUND
- ----------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ (1.17)% 35% $ 30,467
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
VT DISCOVERY FUND
- ----------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 22.32% 135% $ 238,894
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
VT EQUITY INCOME FUND
- ----------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 2.80% 20% $ 94,097
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
VT INTERNATIONAL CORE FUND
- ----------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 12.67% 65% $ 44,470
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
VT LARGE COMPANY CORE FUND
- ----------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 2.37% 42% $ 20,141
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
VT LARGE COMPANY GROWTH FUND
- ----------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 7.61% 10% $ 99,065
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
154 Wells Fargo Advantage Variable Trust Funds Financial Highlights
Beginning Net Realized Distributions
Net Asset Net and Unrealized from Net Distributions
Value Per Investment Gain (Loss) Investment from Net
Share Income (Loss) on Investments Income Realized Gains
- -----------------------------------------------------------------------------------------------------------------------------------
VT MONEY MARKET FUND
- -----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ $ 1.00 0.05 0.00 (0.05) 0.00
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
VT OPPORTUNITY FUND
- -----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ $ 24.02 0.21 1.60 (0.16) (3.64)
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
VT SMALL CAP GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ $ 9.96 (0.07) 1.52 0.00 (1.72)
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
VT SMALL/MID CAP VALUE FUND
- -----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ $ 13.22 (0.04) 0.21 0.00 (2.31)
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
VT TOTAL RETURN BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ $ 9.81 0.45 0.13 (0.45) 0.00
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)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Financial Highlights Wells Fargo Advantage Variable Trust Funds 155
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
- ----------------------------------------------------------------------------------------------------------------------------------
VT MONEY MARKET FUND
- ----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 0.00 $ 1.00 4.56% 0.84% (0.09)% 0.75%
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%
VT OPPORTUNITY FUND
- ----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 0.00 $ 22.03 0.74% 1.19% (0.12)% 1.07%
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%
VT SMALL CAP GROWTH FUND
- ----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 0.00 $ 9.69 (0.73)% 1.22% (0.02)% 1.20%
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%
VT SMALL/MID CAP VALUE FUND
- ----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 0.00 $ 11.08 (0.31)% 1.51% (0.37)% 1.14%
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%
VT TOTAL RETURN BOND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 0.00 $ 9.94 4.58% 0.94% (0.04)% 0.90%
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%
Portfolio Net Assets at
Total Turnover End of Period
Return 3 Rate 6 (000's omitted)
- ----------------------------------------------------------------------------------------------
VT MONEY MARKET FUND
- ----------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 4.68% NA $ 50,603
January 1, 2006 to December 31, 2006 ................ 4.41% NA $ 52,499
January 1, 2005 to December 31, 2005 ................ 2.55% NA $ 55,504
January 1, 2004 to December 31, 2004 ................ 0.70% NA $ 58,738
January 1, 2003 to December 31, 2003 ................ 0.50% NA $ 81,583
VT OPPORTUNITY FUND
- ----------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 6.63% 64% $ 779,286
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
VT SMALL CAP GROWTH FUND
- ----------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 13.81% 121% $ 221,394
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
VT SMALL/MID CAP VALUE FUND
- ----------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ (0.32)% 60% $ 17,527
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
VT TOTAL RETURN BOND FUND
- ----------------------------------------------------------------------------------------------
January 1, 2007 to December 31, 2007 ................ 6.08% 580% 5 $ 129,098
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
156 Wells Fargo Advantage Variable Trust Funds Notes to Financial Statements
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, 2007, 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.
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.
Under the Trust's organizational documents, their officers and directors are
indemnified against certain liabilities that may arise out of performance of
their duties to the Trust. Additionally, in the normal course of business, the
Trust may enter into contracts with service providers that contain a variety of
indemnification clauses. 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 sale price is shown on 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
Notes to Financial Statements Wells Fargo Advantage Variable Trust Funds 157
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 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.
158 Wells Fargo Advantage Variable Trust Funds Notes to Financial Statements
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, 2007, 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 $ (34,563) $ 34,563 $ 0
- -----------------------------------------------------------------------------------------
VT DISCOVERY FUND 1,736,985 55,695 (1,792,680)
- -----------------------------------------------------------------------------------------
VT EQUITY INCOME FUND (15) 15 0
- -----------------------------------------------------------------------------------------
VT INTERNATIONAL CORE FUND (108,595) 108,595 0
- -----------------------------------------------------------------------------------------
VT OPPORTUNITY FUND 7,017,454 (7,017,454) 0
- -----------------------------------------------------------------------------------------
VT SMALL CAP GROWTH FUND 1,524,342 (1,524,342) 0
- -----------------------------------------------------------------------------------------
VT SMALL/MID CAP VALUE FUND 105,882 (105,882) 0
- -----------------------------------------------------------------------------------------
VT TOTAL RETURN BOND FUND 25,324 (25,324) 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, 2007.
Management has analyzed the Fund's tax positions taken on federal income tax
returns for all open tax years and has concluded that as of December 31, 2007,
no provision for income tax would be required in the Fund's financial
statements. The Fund's federal and state income and federal excise tax returns
for tax years for which the applicable statutes of limitations have not expired
are subject to examination by the Internal Revenue Service and state departments
of revenue.
At December 31, 2007, the Fund's net capital loss carryforwards, which are
available to offset future net realized capital gains, were:
- ---------------------------------------------------------------------------
CAPITAL LOSS
FUND EXPIRATION YEAR CARRYFORWARDS
- ---------------------------------------------------------------------------
VT C&B LARGE CAP VALUE FUND 2012 $ 78,234
- ---------------------------------------------------------------------------
VT DISCOVERY FUND 2008 52,572,927
2009 94,527,114
- ---------------------------------------------------------------------------
VT LARGE COMPANY CORE FUND 2010 11,186,858
2011 1,781,980
- ---------------------------------------------------------------------------
VT LARGE COMPANY GROWTH FUND 2009 4,034,254
2010 14,881,364
2011 2,858,910
2012 1,003,450
2013 2,022,267
2014 1,615,063
- ---------------------------------------------------------------------------
VT TOTAL RETURN BOND FUND 2013 308,309
2014 1,148,359
- ---------------------------------------------------------------------------
Notes to Financial Statements Wells Fargo Advantage Variable Trust Funds 159
The Funds had deferred post-October capital losses occurring subsequent to
December 31, 2007. For tax purposes, such losses were treated as having occurred
on January 1, 2008. As of December 31, 2007, deferred post-October capital
losses were as follows:
- --------------------------------------------------------------------------------
DEFERRED
POST-OCTOBER
FUND CAPITAL LOSS
- --------------------------------------------------------------------------------
VT ASSET ALLOCATION FUND $ 1,781,112
- --------------------------------------------------------------------------------
VT DISCOVERY FUND 200,761
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS
The Funds 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, 2007, the Funds had no open forward foreign currency contracts.
FUTURES CONTRACTS
The Funds 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, 2007, the following Fund held futures contracts:
- --------------------------------------------------------------------------------------------------------
NOTIONAL NET UNREALIZED
CONTRACT APPRECIATION/
FUND CONTRACTS TYPE EXPIRATION DATE AMOUNT (DEPRECIATION)
- --------------------------------------------------------------------------------------------------------
VT ASSET ALLOCATION FUND 180 Long S&P 500 Future March 2008 $66,974,325 $ (500,325)
35 Long U.S. Long Bond March 2008 4,001,813 71,313
547 Short U.S. Long Bond March 2008 64,101,836 444,711
- --------------------------------------------------------------------------------------------------------
TBA SALE COMMITMENTS
The Funds 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, 2007, are listed after the Fund's
Portfolio of Investments.
160 Wells Fargo Advantage Variable Trust Funds Notes to Financial Statements
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 prepayment
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 Funds may invest in repurchase agreements and may participate in pooled
repurchase agreement transactions with other funds advised by Wells Fargo Funds
Management, LLC. The repurchase agreements must be fully collateralized based on
values that are marked to market daily. The collateral may be held by an agent
bank under a tri-party agreement. It is the custodian's responsibility to value
collateral daily and to take action to obtain additional collateral as necessary
to maintain market value equal to or greater than the resale price. The
repurchase agreements are collateralized by instruments such as U.S. Treasury,
federal agency, or high-grade corporate obligations. There could be potential
loss to a Fund in the event that such Fund is delayed or prevented from
exercising its rights to dispose of the collateral, including the risk of a
possible decline in the value of the underlying obligations during the period in
which a Fund seeks to assert its rights.
SECURITY LOANS
The Funds 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 25% of the revenues
earned on the securities lending activities (reduced from 30% effective
September 1, 2007) and incurs all expenses. For a portion of the period, Wells
Fargo Bank, N.A. waived its share of revenues earned on securities lending
activities. Such waivers by Wells Fargo Bank, N.A. have the impact of increasing
securities lending income on the Statements of Operations. The value of the
securities on loan and the value of the related collateral at December 31, 2007
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 December 31, 2007, are listed below:
Notes to Financial Statements Wells Fargo Advantage Variable Trust Funds 161
- ----------------------------------------------------------------------------------------------------------------------------
SWAP NOTIONAL INTEREST RATE/ INTEREST RATE/ MATURITY NET UNREALIZED
FUND COUNTER PARTY PRINCIPAL INDEX RECEIVED INDEX PAID DATE GAIN/(LOSS)
- ----------------------------------------------------------------------------------------------------------------------------
VT OPPORTUNITY FUND Lehman Brothers $ 6,240,601 Market Value Notional Amount x 04/16/2008 $ 322,227
Special Finance Appreciation (3 Months USD Libor
on Customize plus 30 bps) plus
Stock Index* Market Value
Depreciation on
Customized Stock Index
- ----------------------------------------------------------------------------------------------------------------------------
VT OPPORTUNITY FUND Lehman Brothers $ 4,501,531 Market Value Notional Amount x 10/07/2008 $(738,300)
Special Finance Appreciation (3 Months USD Libor
on Customize plus 30 bps) plus
Stock Index*** Market Value
Depreciation on
Customized Stock Index
- ----------------------------------------------------------------------------------------------------------------------------
VT OPPORTUNITY FUND Lehman Brothers $11,701,183 Market Value Notional Amount x 11/03/2008 $(368,794)
Special Finance Appreciation (3 Months USD Libor
on Customize plus 30 bps) plus
Stock Index** Market Value
Depreciation on
Customized Stock Index
- ----------------------------------------------------------------------------------------------------------------------------
VT OPPORTUNITY FUND Lehman Brothers $10,523,689 Market Value Notional Amount x 11/14/2008 $(185,025)
Special Finance Appreciation (3 Months USD Libor
on Customize plus 30 bps) plus
Stock Index**** Market Value
Depreciation on
Customized Stock Index
- ----------------------------------------------------------------------------------------------------------------------------
* Customized Stock Index consists of the following basket of common stocks
valued as of December 31, 2007: Carnival Corporation, Time Warner
Incorporated, UnitedHealth Group Incorporated, and Pfizer Incorporated.
** Customized Stock Index consists of the following basket of common stocks
valued as of December 31, 2007: Companhia Vale do Rio Doce (CVRD), BHP
Billiton Limited, Alcoa Incorporated and Newmont Mining Corporation.
*** Customized Stock Index consists of the following basket of common stocks
valued as of December 31, 2007: DR Horton Incorporated, KB Home, Lennar
Corporation, Pulte Homes Incorporated and Ryland Group Incorporated.
**** Customized Stock Index consists of the following basket of common stocks
valued as of December 31, 2007: Norfolk Southern Corporation, Union
Pacific Corporation, Burlington Northern Santa Fe Corporation and Con-Way
Incorporated.
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. At December 31, 2007, the Funds had no open interest rate swap
contracts.
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. At December 31, 2007, the Funds had no open credit default swap
contracts.
162 Wells Fargo Advantage Variable Trust Funds Notes to Financial Statements
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, 2007, were as
follows:
- --------------------------------------------------------------------------------
VT OPPORTUNITY FUND
---------------------------
PREMIUMS
CALL OPTIONS WRITTEN CONTRACTS RECEIVED
- --------------------------------------------------------------------------------
Options at beginning of period (15,288) $(1,072,631)
- --------------------------------------------------------------------------------
Options written (2,160) (1,162,402)
- --------------------------------------------------------------------------------
Options expired 6,116 548,129
- --------------------------------------------------------------------------------
Options exercised 11,332 1,686,904
- --------------------------------------------------------------------------------
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"). Funds Management 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 SUBADVISORY
FEES (% OF FEES (% OF
AVERAGE DAILY AVERAGE DAILY AVERAGE DAILY AVERAGE DAILY
FUND NET ASSETS NET ASSETS) SUBADVISER NET ASSETS NET ASSETS)
- --------------------------------------------------------------------------------------------------------------------
VT ASSET ALLOCATION FUND First $500 million 0.550 Wells Capital First $100 million 0.150
Next $500 million 0.500 Management Next $100 million 0.125
Next $2 billion 0.450 Incorporated Over $200 million 0.100
Next $2 billion 0.425
Over $5 billion 0.400
- --------------------------------------------------------------------------------------------------------------------
Notes to Financial Statements Wells Fargo Advantage Variable Trust Funds 163
- ------------------------------------------------------------------------------------------------------------------------------
SUBADVISORY
ADVISORY FEES FEES (% OF
AVERAGE DAILY (% OF AVERAGE AVERAGE DAILY AVERAGE DAILY
FUND NET ASSETS DAILY NET ASSETS) SUBADVISER NET ASSETS NET ASSETS)
- ------------------------------------------------------------------------------------------------------------------------------
VT C&B LARGE CAP VALUE FUND First $500 million 0.550 Cooke & First $250 million 0.450
Next $500 million 0.500 Bieler, Next $250 million 0.400
Next $2 billion 0.450 LP 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 Capital First $100 million 0.450
Next $500 million 0.700 Management Next $100 million 0.400
Next $2 billion 0.650 Incorporated Over $200 million 0.350
Next $2 billion 0.625
Over $5 billion 0.600
- ------------------------------------------------------------------------------------------------------------------------------
VT EQUITY INCOME FUND First $500 million 0.550 Wells Capital First $100 million 0.350
Next $500 million 0.500 Management Next $100 million 0.300
Next $2 billion 0.450 Incorporated Next $300 million 0.200
Next $2 billion 0.425 Over $500 million 0.150
Over $5 billion 0.400
- ------------------------------------------------------------------------------------------------------------------------------
VT INTERNATIONAL CORE FUND First $500 million 0.750 New Star First $50 million 0.350
Next $500 million 0.700 Institutional Next $500 million 0.290
Next $2 billion 0.650 Managers Limited Over $550 million 0.200
Next $2 billion 0.625
Over $5 billion 0.600
- ------------------------------------------------------------------------------------------------------------------------------
VT LARGE COMPANY CORE FUND First $500 million 0.550 Matrix Asset First $50 million 0.200
Next $500 million 0.500 Advisors Over $50 million 0.160
Next $2 billion 0.450 Incorporated
Next $2 billion 0.425
Over $5 billion 0.400
- ------------------------------------------------------------------------------------------------------------------------------
VT LARGE COMPANY GROWTH FUND First $500 million 0.550 Peregrine First $25 million 0.560
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 MARKET FUND First $500 million 0.300 Wells Capital First $1 billion 0.050
Next $500 million 0.300 Management Next $2 billion 0.030
Next $2 billion 0.275 Incorporated Next $3 billion 0.020
Next $2 billion 0.275 Over $6 billion 0.010
Over $5 billion 0.250
- ------------------------------------------------------------------------------------------------------------------------------
VT OPPORTUNITY FUND First $500 million 0.750 Wells Capital First $100 million 0.450
Next $500 million 0.700 Management Next $100 million 0.400
Next $2 billion 0.650 Incorporated Over $200 million 0.300
Next $2 billion 0.625
Over $5 billion 0.600
- ------------------------------------------------------------------------------------------------------------------------------
VT SMALL CAP GROWTH FUND First $500 million 0.750 Wells Capital First $100 million 0.550
Next $500 million 0.700 Management Next $100 million 0.500
Next $2 billion 0.650 Incorporated Over $200 million 0.400
Next $2 billion 0.625
Over $5 billion 0.600
- ------------------------------------------------------------------------------------------------------------------------------
164 Wells Fargo Advantage Variable Trust Funds Notes to Financial Statements
- ------------------------------------------------------------------------------------------------------------------------------
SUBADVISORY
ADVISORY FEES FEES (% OF
AVERAGE DAILY (% OF AVERAGE AVERAGE DAILY AVERAGE DAILY
FUND NET ASSETS DAILY NET ASSETS) SUBADVISER NET ASSETS NET ASSETS)
- ------------------------------------------------------------------------------------------------------------------------------
VT SMALL/MID CAP VALUE FUND First $500 million 0.750 Wells Capital First $100 million 0.450
Next $500 million 0.700 Management Next $100 million 0.400
Next $2 billion 0.650 Incorporated Over $200 million 0.350
Next $2 billion 0.625
Over $5 billion 0.600
- ------------------------------------------------------------------------------------------------------------------------------
VT TOTAL RETURN BOND FUND First $500 million 0.450 Wells Capital First $100 million 0.200
Next $500 million 0.400 Management Next $200 million 0.175
Next $2 billion 0.350 Incorporated Next $200 million 0.150
Next $2 billion 0.325 Over $500 million 0.100
Over $5 billion 0.300
- ------------------------------------------------------------------------------------------------------------------------------
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:
- -------------------------------------------------------------------------------------------------------
AVERAGE DAILY (% OF AVERAGE
FUND 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 Funds, 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, 2007, distribution fees paid are disclosed on
the Statements of Operations.
OTHER FEES AND EXPENSES
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.
Each Fund also bears its share of other fees and expenses incurred in the normal
course of business, including but not limited to: professional fees,
registration fees, shareholder reporting costs, and Trustees fees and expenses.
The Trust compensates its Trustees for their services, plus travel and other
expenses incurred in attending Board meetings.
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, 2007, were waived by Funds
Management, first from advisory fees, and then any remaining amount
Notes to Financial Statements Wells Fargo Advantage Variable Trust Funds 165
consecutively from administration, custody and shareholder servicing fees
collected, if any. Funds Management has contractually committed through April
30, 2009, to waive fees and/or reimburse expenses to the extent necessary to
maintain a certain net operating expense ratio for the Funds. Net operating
expense ratios in effect for the year ended December 31, 2007 were as follows:
- ---------------------------------------------------------------------------------------------------------
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, 2007, were as follows:
- ---------------------------------------------------------------------------------------------------------
FUND PURCHASES AT COST SALES PROCEEDS
- ---------------------------------------------------------------------------------------------------------
VT ASSET ALLOCATION FUND $ 66,629,655 $ 110,459,958
- ---------------------------------------------------------------------------------------------------------
VT C&B LARGE CAP VALUE FUND 10,828,774 10,950,503
- ---------------------------------------------------------------------------------------------------------
VT DISCOVERY FUND 310,695,017 354,752,376
- ---------------------------------------------------------------------------------------------------------
VT EQUITY INCOME FUND 21,125,262 45,103,515
- ---------------------------------------------------------------------------------------------------------
VT INTERNATIONAL CORE FUND 29,675,865 34,373,642
- ---------------------------------------------------------------------------------------------------------
VT LARGE COMPANY CORE FUND 9,717,230 15,348,707
- ---------------------------------------------------------------------------------------------------------
VT LARGE COMPANY GROWTH FUND 10,488,830 27,172,165
- ---------------------------------------------------------------------------------------------------------
VT OPPORTUNITY FUND 513,896,149 717,715,133
- ---------------------------------------------------------------------------------------------------------
VT SMALL CAP GROWTH FUND 247,427,954 249,950,259
- ---------------------------------------------------------------------------------------------------------
VT SMALL/MID CAP VALUE FUND 12,359,910 18,326,624
- ---------------------------------------------------------------------------------------------------------
VT TOTAL RETURN BOND FUND 793,711,105 765,872,988
- ---------------------------------------------------------------------------------------------------------
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, 2007, there
were no borrowings by any of the Funds under this agreement.
166 Wells Fargo Advantage Variable Trust Funds Notes to Financial Statements
6. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid during the years ended December 31,
2007, and December 31, 2006, was as follows:
- -----------------------------------------------------------------------------------------------------------------------------------
Ordinary Income Long-term Capital Gain Total
FUND 2007 2006 2007 2006 2007 2006
- -----------------------------------------------------------------------------------------------------------------------------------
VT ASSET ALLOCATION FUND $ 8,931,742 $ 8,015,852 $ 1,357,946 $ 2,005,487 $ 10,289,688 $ 10,021,339
- -----------------------------------------------------------------------------------------------------------------------------------
VT C&B LARGE CAP VALUE FUND 338,853 440,202 0 0 338,853 440,202
- -----------------------------------------------------------------------------------------------------------------------------------
VT EQUITY INCOME FUND 1,838,055 1,695,304 6,611,366 241,083 8,449,421 1,936,387
- -----------------------------------------------------------------------------------------------------------------------------------
VT INTERNATIONAL CORE FUND 659,812 1,744,530 2,690,129 591,860 3,349,941 2,336,390
- -----------------------------------------------------------------------------------------------------------------------------------
VT LARGE COMPANY CORE FUND 0 169,525 0 0 0 169,525
- -----------------------------------------------------------------------------------------------------------------------------------
VT MONEY MARKET FUND 2,203,670 2,301,980 0 1,000 2,203,670 2,302,980
- -----------------------------------------------------------------------------------------------------------------------------------
VT OPPORTUNITY FUND 20,855,034 0 104,911,350 103,073,932 125,766,384 103,073,932
- -----------------------------------------------------------------------------------------------------------------------------------
VT SMALL CAP GROWTH FUND 16,770,316 0 15,169,862 4,390,755 31,940,178 4,390,755
- -----------------------------------------------------------------------------------------------------------------------------------
VT SMALL/MID CAP VALUE FUND 1,864,362 0 1,599,563 3,659,180 3,463,925 3,659,180
- -----------------------------------------------------------------------------------------------------------------------------------
VT TOTAL RETURN BOND FUND 5,839,104 4,144,502 0 0 5,839,104 4,144,502
- -----------------------------------------------------------------------------------------------------------------------------------
As of December 31, 2007, 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 Unrealized
Ordinary Long-Term Appreciation Capital Loss
FUND Income Gain (Depreciation) Carryforward* Total
- -----------------------------------------------------------------------------------------------------------------------------------
VT ASSET ALLOCATION FUND $ 6,432,571 $ 8,903,014 $ 23,954,501 $ (1,781,112) $ 37,508,974
- -----------------------------------------------------------------------------------------------------------------------------------
VT C&B LARGE CAP VALUE FUND 20,064 0 1,195,478 (78,234) 1,137,308
- -----------------------------------------------------------------------------------------------------------------------------------
VT DISCOVERY FUND 0 0 29,154,018 (147,300,802) (118,146,784)
- -----------------------------------------------------------------------------------------------------------------------------------
VT EQUITY INCOME FUND 15,454 10,480,378 17,926,233 0 28,422,065
- -----------------------------------------------------------------------------------------------------------------------------------
VT INTERNATIONAL CORE FUND 2,056,682 5,154,973 7,424,836 0 14,636,491
- -----------------------------------------------------------------------------------------------------------------------------------
VT LARGE COMPANY CORE FUND 179,325 0 214,116 (12,968,838) (12,575,397)
- -----------------------------------------------------------------------------------------------------------------------------------
VT LARGE COMPANY GROWTH FUND 202,663 0 14,238,697 (26,415,308) (11,973,948)
- -----------------------------------------------------------------------------------------------------------------------------------
VT MONEY MARKET FUND 150 0 0 0 150
- -----------------------------------------------------------------------------------------------------------------------------------
VT OPPORTUNITY FUND 51,681,655 96,237,496 93,807,269 0 241,726,420
- -----------------------------------------------------------------------------------------------------------------------------------
VT SMALL CAP GROWTH FUND 27,294,951 19,529,275 (2,412,598) 0 44,411,628
- -----------------------------------------------------------------------------------------------------------------------------------
VT SMALL/MID CAP VALUE FUND 384,717 2,347,001 (594,645) 0 2,137,073
- -----------------------------------------------------------------------------------------------------------------------------------
VT TOTAL RETURN BOND FUND 30,091 0 1,460,993 (1,456,668) 34,416
- -----------------------------------------------------------------------------------------------------------------------------------
* 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.
Notes to Financial Statements Wells Fargo Advantage Variable Trust Funds 167
8. NEW ACCOUNTING PRONOUNCEMENTS
In September 2006, the 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, 2007, Funds 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.
168 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 Discovery Fund, VT Equity Income Fund, VT International Core
Fund, VT Large Company Core Fund, VT Large Company Growth Fund, VT Money Market
Fund, VT Opportunity Fund, VT Small Cap Growth Fund, VT Small/Mid Cap Value
Fund, and the VT Total Return Bond Fund, twelve of the Funds constituting the
Wells Fargo Variable Trust as of December 31, 2007, and the related statements
of operations for the year then ended, statements of changes in net assets for
each of the years in the two year period then ended and the financial highlights
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 for each of the years in the five year period then ended and the VT
Discovery Fund, VT Opportunity Fund and the VT Small/Mid Cap Value Fund for each
of the years in the four 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 VT
Discovery Fund, VT Opportunity Fund and VT Small/Mid Cap Value Fund for the year
ended December 31, 2003 were audited by other auditors whose report dated
February 3, 2004 expressed an unqualified opinion on those 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, 2007, by correspondence with
the custodian and brokers or by 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,
2007, the results of their operations for the year then ended, changes in their
net assets for each of the years in the two year period then ended and the
financial highlights for the periods indicated in the first paragraph above, in
conformity with U.S. generally accepted accounting principles.
/s/ KPMG LLP
Philadelphia, Pennsylvania
February 21, 2008
Other Information Wells Fargo Advantage Variable Trust Funds 169
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, 2007. The foreign income and
taxes paid were as follows:
- --------------------------------------------------------------------------------
FUND Foreign Income Foreign Taxes
- --------------------------------------------------------------------------------
VT INTERNATIONAL CORE FUND $1,232,620 $87,600
- --------------------------------------------------------------------------------
The country-by-country breakout is as follows:
- --------------------------------------------------------------------------------
COUNTRY Gross Income Foreign Tax Paid
- --------------------------------------------------------------------------------
AUSTRALIA 4.83% 0.00%
- --------------------------------------------------------------------------------
AUSTRIA 0.55% 1.15%
- --------------------------------------------------------------------------------
BELGIUM 2.74% 5.78%
- --------------------------------------------------------------------------------
CANADA 0.00% 0.00%
- --------------------------------------------------------------------------------
FINLAND 2.00% 4.22%
- --------------------------------------------------------------------------------
FRANCE 10.27% 21.67%
- --------------------------------------------------------------------------------
GERMANY 5.90% 12.44%
- --------------------------------------------------------------------------------
GREECE 1.32% 0.00%
- --------------------------------------------------------------------------------
HONG KONG 4.73% 0.00%
- --------------------------------------------------------------------------------
INDIA 0.11% 0.00%
- --------------------------------------------------------------------------------
IRELAND 0.10% 0.00%
- --------------------------------------------------------------------------------
ITALY 4.16% 8.77%
- --------------------------------------------------------------------------------
LUXEMBOURG 0.95% 2.00%
- --------------------------------------------------------------------------------
NETHERLANDS 4.50% 9.49%
- --------------------------------------------------------------------------------
RUSSIA 0.76% 1.60%
- --------------------------------------------------------------------------------
JAPAN 9.60% 9.45%
- --------------------------------------------------------------------------------
SPAIN 2.29% 4.84%
- --------------------------------------------------------------------------------
SWITZERLAND 4.63% 9.78%
- --------------------------------------------------------------------------------
SWEDEN 2.76% 5.83%
- --------------------------------------------------------------------------------
SINGAPORE 1.79% 0.00%
- --------------------------------------------------------------------------------
TAIWAN 1.05% 2.97%
- --------------------------------------------------------------------------------
TURKEY 0.94% 0.00%
- --------------------------------------------------------------------------------
UNITED KINGDOM 34.02% 0.00%
- --------------------------------------------------------------------------------
TOTAL 100.00% 100.00%
- --------------------------------------------------------------------------------
170 Wells Fargo Advantage Variable Trust Funds Other Information
Pursuant to Section 852(b)(3) of the Internal Revenue Code, the following Funds
designate the amounts listed below as a long-term capital gain distribution for
the year ended December 31, 2007:
- --------------------------------------------------------------------------------
Capital Gain
FUND Dividends
- --------------------------------------------------------------------------------
VT ASSET ALLOCATION FUND $ 1,357,946
- --------------------------------------------------------------------------------
VT EQUITY INCOME FUND 6,611,366
- --------------------------------------------------------------------------------
VT INTERNATIONAL CORE FUND 2,690,129
- --------------------------------------------------------------------------------
VT OPPORTUNITY FUND 104,911,350
- --------------------------------------------------------------------------------
VT SMALL CAP GROWTH FUND 15,169,862
- --------------------------------------------------------------------------------
VT SMALL/MID CAP VALUE FUND 1,599,563
- --------------------------------------------------------------------------------
Pursuant to Section 854(b)(2) of the Internal Revenue Code, the Funds listed
below designates a percentage of its ordinary income dividends distributed
during the year ended December 31, 2007 as qualifying for the corporate
dividends-received deduction:
- --------------------------------------------------------------------------------
Dividend-Received
Deduction (% of
Ordinary Income
FUND Dividends)
- --------------------------------------------------------------------------------
VT ASSET ALLOCATION FUND 27.15
- --------------------------------------------------------------------------------
VT C&B LARGE CAP VALUE FUND 100.00
- --------------------------------------------------------------------------------
VT EQUITY INCOME FUND 100.00
- --------------------------------------------------------------------------------
VT OPPORTUNITY FUND 48.78
- --------------------------------------------------------------------------------
VT SMALL CAP GROWTH FUND 0.81
- --------------------------------------------------------------------------------
VT SMALL/MID CAP VALUE FUND 5.16
- --------------------------------------------------------------------------------
Other Information Wells Fargo Advantage Variable Trust Funds 171
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 Funds Trust (the "Trust"). This table
supplements, and should be read in conjunction with, the Prospectus and the
Statement of Additional Information 1 of each Fund. Each of the Trustees listed
below acts in identical capacities for each of the 148 funds comprising the
Trust, Wells Fargo Variable Trust and Wells Fargo Master Trust (collectively the
"Fund Complex"). All of the non-interested Trustees are also members of the
Audit and 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
Name and Age Length of Service 2 Principal Occupations During Past Five Years Other Directorships
- ----------------------------------------------------------------------------------------------------------------------------------
Thomas S. Goho Trustee, since 1987 Retired. Prior thereto, the Thomas Goho Chair of None
65 Finance of Wake Forest University, Calloway School of
Business and Accountancy, since January 2006, and
Associate Professor of Finance from 1999 to 2005.
- ----------------------------------------------------------------------------------------------------------------------------------
Peter G. Gordon Trustee, since 1998 Chairman, CEO and Co-Founder of Crystal Geyser Water None
65 (Chairman since 2005) Company and President of Crystal Geyser Roxane Water
(Lead Trustee since 2001) Company.
- ----------------------------------------------------------------------------------------------------------------------------------
Richard M. Leach 4 Trustee, since 1987 Retired. Prior thereto, President of Richard M. Leach None
74 Associates (a financial consulting firm).
- ----------------------------------------------------------------------------------------------------------------------------------
Olivia S. Mitchell Trustee, since 2006 Professor of Insurance and Risk Management, Wharton None
54 School, University of Pennsylvania. Director of the
Boettner Center on Pensions and Retirement Research.
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 relations firm of None
56 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 Willeke & Daniels. None
67
- ----------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE 3
- ----------------------------------------------------------------------------------------------------------------------------------
Position Held and
Name and Age Length of Service 2 Principal Occupations During Past Five Years Other Directorships
- ----------------------------------------------------------------------------------------------------------------------------------
J. Tucker Morse Trustee, since 1987 Private Investor/Real Estate Developer. Prior thereto, None
63 Chairman of Whitepoint Capital, LLC until 2004.
- ----------------------------------------------------------------------------------------------------------------------------------
172 Wells Fargo Advantage Variable Trust Funds Other Information
OFFICERS
- ----------------------------------------------------------------------------------------------------------------------------------
Position Held and
Name and Age Length of Service 2 Principal Occupations During Past Five Years Other Directorships
- ----------------------------------------------------------------------------------------------------------------------------------
Karla M. Rabusch President, since 2003 Executive Vice President of Wells Fargo Bank, N.A. and None
48 President of Wells Fargo Funds Management, LLC since
2003. Senior Vice President and Chief Administrative
Officer of Wells Fargo Funds Management, LLC from 2001
to 2003.
- ----------------------------------------------------------------------------------------------------------------------------------
C. David Messman Secretary, since 2000; Senior Vice President and Secretary of Wells Fargo None
47 Chief Legal Counsel Funds Management, LLC since 2001. Vice President and
since 2003 Managing Senior Counsel of Wells Fargo Bank, N.A. since
1996.
- ----------------------------------------------------------------------------------------------------------------------------------
Stephen W. Leonhardt Treasurer, since 2007 Vice President and Manager of Fund Accounting, None
48 Reporting and Tax for Wells Fargo Funds Management, LLC
since 2007. Director of Fund Administration and SEC
Reporting for TIAA-CREF from 2005 to 2007. Chief
Operating Officer for UMB Fund Services, Inc. from 2004
to 2005. Controller for Sungard Transaction Networks
from 2002 to 2004.
- ----------------------------------------------------------------------------------------------------------------------------------
Debra Ann Early, Chief Compliance Chief Compliance Officer of Wells Fargo Funds None
43 Officer, since 2007 Management, LLC since 2007. Chief Compliance Officer of
Parnassus Investments from 2005 to 2007. Chief
Financial Officer of Parnassus Investments from 2004 to
2007 and Senior Audit Manager of PricewaterhouseCoopers
LLP from 1998 to 2004.
- ----------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1 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.
2 Length of service dates reflects a Trustee's commencement of service with
the Trust's predecessor entities.
3 As of December 31, 2007, 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.
4 Retired as Trustee effective December 31, 2007.
List of Abbreviations Wells Fargo Advantage Variable Trust Funds 173
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
BKNT -- Bank Notes
CDA -- Community Development Authority
CDO -- Collateralized Debt Obligation
CDS -- Credit Default Swap
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
GMTN -- Global Medium-Term Notes
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
THIS PAGE IS INTENTIONALLY LEFT BLANK.
[LOGO]
- ----------------
WELLS ADVANTAGE
FARGO FUNDS
- ----------------
More information about WELLS FARGO ADVANTAGE FUNDS 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.
"Dow Jones" and "Dow Jones Target Date Indexes" are service marks of Dow Jones &
Company, Inc. and have been licensed for use for certain purposes by Global
Index Advisors, Inc. and Wells Fargo Funds Management, LLC. The Dow Jones Target
Date Indexes are based in part on the Lehman Brothers Bond Indexes, which are
published by Lehman Brothers Inc. The WELLS FARGO ADVANTAGE DOW JONES TARGET
DATE FUNDS, based on the Dow Jones Target Date Indexes, are not sponsored,
endorsed, sold or promoted by Dow Jones or Lehman Brothers, and neither Dow
Jones nor Lehman Brothers makes any representation regarding the advisability of
investing in such product(s) and/or about the quality, accuracy and/or
completeness of the Dow Jones Target Date Indexes or the Lehman Brothers Bond
Indexes. IN NO EVENT SHALL DOW JONES, LEHMAN BROTHERS OR ANY OF THEIR LICENSORS
HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES
(INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
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 FINRA/SIPC, an affiliate of Wells Fargo &
Company.
- -----------------------------------------------------
NOT FDIC INSURED o NO BANK GUARANTEE o MAY LOSE VALUE
- -----------------------------------------------------
- --------------------------------------------------------------------------------
(C) 2008 Wells Fargo Funds Management, LLC. All rights reserved.
www.wellsfargo.com/advantagefunds
108275 02-08
AVTF/AR124 12-07
ITEM 2. CODE OF ETHICS
=======================
As of the end of the period, December 31, 2007, 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, 2006 and December 31, 2007 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, 2006 and December 31, 2007, the
Audit Fees were $220,500 and $234,500, respectively.
(b)
AUDIT-RELATED FEES - There were no audit-related fees incurred for the fiscal
years ended December 31, 2006 and December 31, 2007 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, 2006 and December 31, 2007 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, 2006 and December 31, 2007,
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, 2006 and December 31, 2007,
the Tax Fees were $20,820 and $21,660 respectively. The incurred Tax
Fees are comprised of tax preparation and consulting services.
(d)
ALL OTHER FEES - There were no other fees incurred for the fiscal years ended
December 31, 2006 and December 31, 2007.
(e)(1)
The Chairman of the Audit Committees is authorized to pre-approve: (1) audit
services to the mutual funds of Wells Fargo Funds Trust, Wells Fargo Variable
Trust and Wells Fargo Master Trust (the "Funds"); (2) non-audit tax or
compliance consulting or training services provided to the Funds by the
independent auditors ("Auditors") if the fees for any particular engagement are
not anticipated to exceed $50,000; and (3) non-audit tax or compliance
consulting or training services provided by the Auditors to a Fund's investment
adviser and its controlling entities (where pre-approval is required because the
engagement relates directly to the operations and financial reporting of the
Fund) if the fee to the Auditors for any particular engagement is not
anticipated to exceed $50,000. For any such pre-approval sought from the
Chairman, Management shall prepare a brief description of the proposed services.
If the Chairman approves of such service, he or she shall sign the statement
prepared by Management. Such written statement shall be presented to the full
Committees at their next regularly scheduled meetings.
(e)(2)
Not Applicable.
(f) Not Applicable.
(g)
Provided below are the aggregate non-audit fees billed for the fiscal years
ended December 31, 2006 and December 31, 2007, 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, 2006 and December 31, 2007, the
Registrant incurred non-audit fees in the amount of $170,000 and
$175,000, 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, 2006 and December 31, 2007,
the Registrant's investment adviser incurred non-audit fees in the
amount of $44,000 and $46,000, respectively. The non-audit fees for
the year ended December 31, 2007 consist of procedure reviews for
pending mergers associated with fund reorganizations. The non-audit
fees for the year ended December 31, 2007 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, 2008
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, 2008
By:
/s/ Stephen W. Leonhardt
Stephen W. Leonhardt
Treasurer
Date: February 20, 2008
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.
Date: February 20, 2008
/s/ Karla M. Rabusch
- -----------------------
Karla M. Rabusch
President
Wells Fargo Funds Trust
Exhibit 99.CERT
CERTIFICATION
I, Stephen W. Leonhardt, 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.
Date: February 20, 2008
/s/ Stephen W. Leonhardt
- -----------------------
Stephen W. Leonhardt
Treasurer
Wells Fargo Funds Trust
Exhibit 99.CERT
SECTION 906 CERTIFICATION
Pursuant to 18 U.S.C. ss. 1350, the undersigned officer of Wells Fargo
Variable Trust (the "Trust"), hereby certifies, to the best of her knowledge,
that the Trust's report on Form N-CSR for the period ended December 31, 2007
(the "Report") fully complies with the requirements of Section 15(d) of the
Securities Exchange Act of 1934 and that the information contained in the Report
fairly presents, in all material respects, the financial condition and results
of operations of the Trust.
Date: February 20, 2008
/s/ Karla M. Rabusch
Karla M. Rabusch
President
Wells Fargo Funds Trust
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, 2007
(the "Report") fully complies with the requirements of Section 15(d) of the
Securities Exchange Act of 1934 and that the information contained in the Report
fairly presents, in all material respects, the financial condition and results
of operations of the Trust.
Date: February 20, 2008
/s/ Stephen W. Leonhardt
Stephen W. Leonhardt
Treasurer
Wells Fargo Funds Trust
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.