UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-09253
Wells Fargo Fund 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: May 31, 2010
Date of reporting period: November 30, 2009
ITEM 1. REPORT TO SHAREHOLDERS
===============================
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[LOGO] Semi-Annual Report
November 30, 2009
WELLS FARGO ADVANTAGE WEALTHBUILDER PORTFOLIOS(SM)
- WELLS FARGO ADVANTAGE WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO(SM)
- WELLS FARGO ADVANTAGE WEALTHBUILDER MODERATE BALANCED PORTFOLIO(SM)
- WELLS FARGO ADVANTAGE WEALTHBUILDER GROWTH BALANCED PORTFOLIO(SM)
- WELLS FARGO ADVANTAGE WEALTHBUILDER GROWTH ALLOCATION PORTFOLIO(SM)
- WELLS FARGO ADVANTAGE WEALTHBUILDER EQUITY PORTFOLIO(SM)
- WELLS FARGO ADVANTAGE WEALTHBUILDER TACTICAL EQUITY PORTFOLIO(SM)
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Contents
LETTER TO SHAREHOLDERS .................................................... 2
PERFORMANCE HIGHLIGHTS
WealthBuilder Conservative Allocation Portfolio ........................... 4
WealthBuilder Moderate Balanced Portfolio ................................. 6
WealthBuilder Growth Balanced Portfolio ................................... 8
WealthBuilder Growth Allocation Portfolio ................................. 10
WealthBuilder Equity Portfolio ............................................ 12
WealthBuilder Tactical Equity Portfolio ................................... 14
FUND EXPENSES ............................................................. 16
PORTFOLIO OF INVESTMENTS
WealthBuilder Conservative Allocation Portfolio ........................... 17
WealthBuilder Moderate Balanced Portfolio ................................. 19
WealthBuilder Growth Balanced Portfolio ................................... 21
WealthBuilder Growth Allocation Portfolio ................................. 23
WealthBuilder Equity Portfolio ............................................ 25
WealthBuilder Tactical Equity Portfolio ................................... 26
FINANCIAL STATEMENTS
Statements of Assets and Liabilities ...................................... 28
Statements of Operations .................................................. 30
Statements of Changes in Net Assets ....................................... 32
Financial Highlights ...................................................... 36
NOTES TO FINANCIAL STATEMENTS ............................................. 38
OTHER INFORMATION ......................................................... 47
LIST OF ABBREVIATIONS ..................................................... 48
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
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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 110 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)
WELLS FARGO ADVANTAGE FUNDS skillfully guides institutions, financial advisors,
and individuals through the investment terrain to help them reach their
financial objectives. Everything we do on behalf of our investors is backed by
our unique combination of qualifications.
STRENGTH
Our organization is built on the standards of integrity and service established
by our parent company--Wells Fargo & Company--more than 150 years ago. Our
diverse family of mutual funds covers a broad spectrum of investment styles and
asset classes. And, because we're part of a widely diversified financial
enterprise, we offer the scale and resources to help investors succeed,
providing access to complementary solutions such as separately managed accounts,
college investing plans, and retirement plans.
EXPERTISE
Our approach to investing is guided by the belief that agile, independent
investment teams--each with its own distinct strengths and disciplines--
provide a superior level of insight and expertise. Each team is free to
concentrate on managing money through well-defined philosophies and processes
that have proven to be consistent and repeatable over time.
PARTNERSHIP
Our collaborative approach is built around understanding the needs and goals of
our clients. By adhering to core principles of sound judgment and steady
guidance, we support you through every stage of the investment decision process.
FOR 529 PLANS, AN INVESTOR'S OR A DESIGNATED BENEFICIARY'S HOME STATE MAY OFFER
STATE TAX OR OTHER BENEFITS THAT ARE ONLY AVAILABLE FOR INVESTMENTS IN THAT
STATE'S QUALIFIED TUITION PROGRAM. PLEASE CONSIDER THIS BEFORE INVESTING.
CAREFULLY CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES
BEFORE INVESTING. FOR A CURRENT PROSPECTUS FOR WELLS FARGO ADVANTAGE FUNDS OR A
CURRENT PROGRAM DESCRIPTION FOR CERTAIN 529 COLLEGE SAVINGS PLANS, CONTAINING
THIS AND OTHER INFORMATION, VISIT WWW.WELLSFARGO.COM/ADVANTAGEFUNDS. READ IT
CAREFULLY BEFORE INVESTING.
Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo &
Company, provides investment advisory and administrative services for Wells
Fargo Managed Account Services and WELLS FARGO ADVANTAGE FUNDS(R) and to certain
529 college savings plans. Other affiliates of Wells Fargo & Company provide
subadvisory and other services for the Funds. The Funds and shares in the 529
plans are distributed by WELLS FARGO FUNDS DISTRIBUTOR, LLC, Member FINRA/SIPC,
an affiliate of Wells Fargo & Company.
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
NOT PART OF THE SEMI-ANNUAL REPORT.
WELLS FARGO ADVANTAGE FUNDS OFFERS MORE THAN 110 MUTUAL FUNDS ACROSS A WIDE
RANGE OF ASSET CLASSES, REPRESENTING OVER $170 BILLION IN ASSETS UNDER
MANAGEMENT, AS OF NOVEMBER 30, 2009.
EQUITY FUNDS
Asia Pacific Fund Growth Fund Small Cap Disciplined Fund
C&B Large Cap Value Fund Growth Equity Fund Small Cap Growth Fund
C&B Mid Cap Value Fund Index Fund Small Cap Opportunities Fund
Capital Growth Fund International Core Fund Small Cap Value Fund
Common Stock Fund International Equity Fund Small Company Growth Fund
Discovery Fund+ International Value Fund Small Company Value Fund
Diversified Equity Fund Large Cap Appreciation Fund Small/Mid Cap Value Fund
Diversified Small Cap Fund Large Cap Growth Fund Social Sustainability Fund+
Emerging Growth Fund Large Company Core Fund Specialized Financial Services Fund
Emerging Markets Equity Fund Large Company Growth Fund Specialized Technology Fund
Endeavor Select Fund+ Large Company Value Fund U.S. Value Fund
Enterprise Fund+ Mid Cap Disciplined Fund
Equity Income Fund Mid Cap Growth Fund
Equity Value Fund Opportunity Fund+
BOND FUNDS
California Limited-Term Tax-Free Fund Inflation-Protected Bond Fund Short-Term Municipal Bond Fund
California Tax-Free Fund Intermediate Tax/AMT-Free Fund Stable Income Fund
Colorado Tax-Free Fund Minnesota Tax-Free Fund Strategic Income Fund
Diversified Bond Fund Municipal Bond Fund Total Return Bond Fund
Government Securities Fund(1) Short Duration Government Bond Fund(1) Ultra Short-Term Income Fund
High Income Fund Short-Term Bond Fund Ultra Short-Term Municipal Income Fund
Income Plus Fund Short-Term High Yield Bond Fund Wisconsin Tax-Free Fund
ASSET ALLOCATION FUNDS
Aggressive Allocation Fund WealthBuilder Growth Allocation Portfolio+ Target 2020 Fund(2)+
Asset Allocation Fund WealthBuilder Growth Balanced Portfolio+ Target 2025 Fund(2)+
Conservative Allocation Fund WealthBuilder Moderate Balanced Portfolio+ Target 2030 Fund(2)+
Growth Balanced Fund WealthBuilder Tactical Equity Portfolio+ Target 2035 Fund(2)+
Moderate Balanced Fund Target Today Fund(2)+ Target 2040 Fund(2)+
WealthBuilder Conservative Allocation Portfolio+ Target 2010 Fund(2)+ Target 2045 Fund(2)+
WealthBuilder Equity Portfolio+ Target 2015 Fund(2)+ Target 2050 Fund(2)+
MONEY MARKET FUNDS
100% Treasury Money Market Fund(1) Heritage Money Market Fund+ National Tax-Free Money Market Fund
California Municipal Market Fund Minnesota Money Market Fund National Tax-Free Money Market Trust
California Municipal Market Trust Money Market Fund Overland Express Sweep Fund+
Cash Investment Money Market Fund Money Market Trust Prime Investment Money Market Fund
Government Money Market Fund(1) Municipal Money Market Fund Treasury Plus Money Market Fund(1)
VARIABLE TRUST FUNDS(3)
VT Asset Allocation Fund VT International Core Fund VT Opportunity Fund+
VT+ C&B Large Cap Value Fund VT Large Company Core Fund VT Small Cap Growth Fund
VT Discovery Fund+ VT Large Company Growth Fund VT Small/Mid Cap Value Fund
VT Equity Income Fund VT Money Market 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.
+ In this report, the WELLS FARGO ADVANTAGE DISCOVERY FUND(SM), WELLS FARGO
ADVANTAGE ENDEAVOR SELECT FUND(SM), WELLS FARGO ADVANTAGE ENTERPRISE
FUND(SM), WELLS FARGO ADVANTAGE OPPORTUNITY FUND(SM), WELLS FARGO
ADVANTAGE SOCIAL SUSTAINABILITY FUND(SM), WELLS FARGO ADVANTAGE
WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO(SM), WELLS FARGO ADVANTAGE
WEALTHBUILDER EQUITY PORTFOLIO(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER
GROWTH ALLOCATION PORTFOLIO(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER
GROWTH BALANCED PORTFOLIO(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER
MODERATE BALANCED PORTFOLIO(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER
TACTICAL EQUITY PORTFOLIO(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET
TODAY FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2010 FUND(SM),
WELLS FARGO ADVANTAGE DOW JONES TARGET 2015 FUND(SM), WELLS FARGO
ADVANTAGE DOW JONES TARGET 2020 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES
TARGET 2025 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2030
FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2035 FUND(SM), WELLS
FARGO ADVANTAGE DOW JONES TARGET 2040 FUND(SM), WELLS FARGO ADVANTAGE DOW
JONES TARGET 2045 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2050
FUND(SM), WELLS FARGO ADVANTAGE HERITAGE MONEY MARKET FUND(SM), WELLS
FARGO ADVANTAGE OVERLAND EXPRESS SWEEP FUND(SM), WELLS FARGO ADVANTAGE VT
DISCOVERY Fund(SM), and WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND(SM) are
referred to as the Discovery Fund, Endeavor Select Fund, Enterprise Fund,
Opportunity Fund, Social Sustainability Fund, 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, Target 2010 Fund, Target 2015 Fund, Target
2020 Fund, Target 2025 Fund, Target 2030 Fund, Target 2035 Fund, Target
2040 Fund, Target 2045 Fund, Target 2050 Fund, Heritage Money Market Fund,
Overland Express Sweep Fund, VT Discovery Fund, and VT Opportunity Fund,
respectively.
NOT PART OF THE SEMI-ANNUAL REPORT.
2 Wells Fargo Advantage WealthBuilder Portfolio Letter to Shareholders
[PHOTO OF KARLA M. RABUSCH]
KARLA M. RABUSCH,
President
WELLS FARGO ADVANTAGE FUNDS
BY MID-2009, DATA EMERGED TO SUGGEST THAT THE LONG-RUNNING ECONOMIC AND
FINANCIAL CRISIS THAT BEGAN IN 2007 MIGHT BE COMING TO AN END.
Dear Valued Shareholder,
We're pleased to offer you this semi-annual report for the WELLS FARGO ADVANTAGE
WEALTHBUILDER PORTFOLIOS(SM) for the six-month period that ended November 30,
2009. The period was marked by cautious optimism, as signs emerged that the
worst of the economic crisis may have passed.
ECONOMIC REPORTS SHOWED SIGNS OF IMPROVEMENT.
By mid-2009, data emerged to suggest that the long-running economic and
financial crisis that began in 2007 might be coming to an end. Real Gross
Domestic Product (GDP) advanced by 2.8% in the third quarter of 2009 compared
with the prior quarter--an improvement from the 0.7% decline in the second
quarter of 2009, and a noted improvement from the 6.4% sequential decline for
the first quarter of 2009. Third-quarter GDP was supported by government
expenditures but also reflected contributions from personal consumption
expenditures, exports, private inventory investment, and investment in
single-family and multi-family homes. Even before the third-quarter numbers were
released, most economists surveyed by THE WALL STREET JOURNAL in August 2009
said that the recession that officially began in December 2007 was now over. The
unemployment rate was the main sour note during the period, rising to 10.2% in
October, and falling back modestly to 10% in November.
International news supported the notion of a slow recovery. The two largest
euro-zone economies, France and Germany, posted modest sequential growth rates
in the second and third quarters, though some of the smaller euro-zone economies
such as Greece struggled with high debt burdens. In Japan, the economy
technically emerged from recession in the second quarter of 2009, but final
government figures showed that third-quarter growth was a modest 0.3%, still
positive but below the preliminary estimate of 1.2%.
DESPITE TENTATIVE SIGNS OF ECONOMIC HEALTH, GOVERNMENTS MAINTAINED AN ACTIVE
ROLE IN THE WORLDWIDE ECONOMY.
In late July, the U.S. government kicked off the popular "Cash for Clunkers"
program, which offered consumers up to $4,500 in federal rebates toward certain
new vehicles upon trade-in of an older car or truck. The program, which proved
more popular than expected, was modeled on a program introduced by the German
government. Both the European Central Bank (ECB) and the Federal Reserve kept
their key interest rates at low levels (1% for the ECB, effectively zero for the
Federal Reserve), continued to provide cash to banks, and purchased debt
securities backed by mortgages in order to support the financial system. In
Japan, the opposition party, the Democratic Party of Japan, broke the
near-50-year rule of the Liberal Democratic Party with a mandate to revive the
country's sluggish economy.
Letter to Shareholders Wells Fargo Advantage WealthBuilder Portfolio 3
GLOBAL STOCK AND BOND MARKETS RALLIED.
Stocks rallied across the board on widespread hope that economic growth would
resume in late 2009 or early 2010, with all major parts of the global stock
market posting double-digit gains. Large-cap stocks outperformed small-cap
stocks. Value stocks and growth stocks posted similar returns in the large-cap
universe, but in the small-cap universe, value stocks outperformed. Returns on
international large-cap stocks kept pace with domestic issues, aided in part by
a weaker U.S. dollar.
Bonds also posted gains. Higher-quality government and corporate bonds continued
to benefit from central bank interventions that kept a lid on interest rates.
High-yield bonds, which posted losses during the depth of the credit crisis,
rebounded strongly as economic conditions seemed to improve.
MANY VARIABLES ARE AT WORK IN THE MARKET.
The full effect of the ongoing credit crisis remains unknown. Growing
unemployment and debt defaults continue to pressure consumers and businesses
alike. Experience tells us that strict adherence to time-tested strategies has
its rewards. As a whole, WELLS FARGO ADVANTAGE FUNDS represents investments
across a range of asset classes and investment styles, giving you an opportunity
to create a diversified investment portfolio. While diversification may not
prevent losses in a downturn, it does provide you with one way of managing risk.
Thank you for choosing to invest with WELLS FARGO ADVANTAGE FUNDS. We appreciate
your confidence in us and remain committed to helping you meet your financial
needs. For current information about your fund investments, contact your
investment professional, visit our Web site at
WWW.WELLSFARGO.COM/ADVANTAGEFUNDS, or call us directly at 1-800-222-8222.
Sincerely,
/s/ Karla M. Rabusch
Karla M. Rabusch
President
WELLS FARGO ADVANTAGE FUNDS
STOCKS RALLIED ACROSS THE BOARD ON WIDESPREAD HOPE THAT ECONOMIC GROWTH WOULD
RESUME IN LATE 2009 OR EARLY 2010, WITH ALL MAJOR PARTS OF THE GLOBAL STOCK
MARKET POSTING DOUBLE-DIGIT GAINS.
4 Wells Fargo Advantage WealthBuilder Portfolio Performance Highlights
WELLS FARGO ADVANTAGE WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO (the
Portfolio) seeks current income with a secondary emphasis on capital
appreciation.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Doug Beath
Galen G. Blomster, CFA (until 2/1/10)
Petros Bocray, CFA
Jeffrey P. Mellas, CAIA
PORTFOLIO INCEPTION
September 30, 2004
EFFECTIVE ALLOCATION(1)
(AS OF NOVEMBER 30, 2009)
[PIE CHART]
Alternative Investment Funds (5%)
Stock Funds (24%)
Bond Funds (71%)
TEN LARGEST MUTUAL FUNDS AND MASTER PORTFOLIOS HELD(2)
(AS OF NOVEMBER 30, 2009)
Wells Fargo Advantage Short Duration Government Bond Fund 28%
Wells Fargo Advantage Government Securities Fund 19%
Wells Fargo Advantage Total Return Bond Portfolio 19%
Oppenheimer International Bond Fund 5%
PIMCO High Yield Fund 5%
PIMCO Commodity RealReturn Strategy Fund 3%
T. Rowe Price Blue Chip Growth Fund 2%
Wells Fargo Advantage Equity Value Portfolio 2%
ING Global Real Estate Fund 2%
Thornburg International Value Fund 2%
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1. Effective allocation is subject to change and is calculated based on the
total investments of the Fund, excluding cash and cash equivalents. The
Portfolio's use of futures contracts to implement a TAA shift toward
stocks or bonds is reflected in the effective allocations shown.
2. Portfolio holdings are subject to change and are calculated based on the
total investments of the Fund.
Performance Highlights Wells Fargo Advantage WealthBuilder Portfolio 5
WELLS FARGO ADVANTAGE WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO
(CONTINUED)
AVERAGE ANNUAL TOTAL RETURN (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
------------------------------------ ------------------------------------ ----------------
WEALTHBUILDER CONSERVATIVE Life of Life of
ALLOCATION PORTFOLIO 6 Months* 1 Year 5 Year Portfolio 6 Months* 1 Year 5 Year Portfolio Gross(3) Net(4)
- ------------------------------------- --------- ------ ------ --------- --------- ------ ------ --------- -------- ------
Conservative Allocation
Portfolio (WBCAX) 7.90 18.32 2.82 3.10 9.54 20.12 3.13 3.41 2.11% 1.50%
WealthBuilder Conservative Allocation
Composite Index(5) 8.99 14.62 4.72 4.73
S&P 500 Index(6) 20.50 25.39 0.71 1.76
Barclays Capital U.S. Aggregate
Bond Index(7) 6.21 11.63 5.49 5.32
* 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. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE -
WWW.WELLSFARGO.COM/ADVANTAGEFUNDS.
FOR WEALTHBUILDER PORTFOLIO SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 1.50%.
PERFORMANCE INCLUDING SALES CHARGE ASSUMES THE SALES CHARGE FOR THE
CORRESPONDING TIME PERIOD.
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. Certain investment strategies tend to
increase the total risk of an investment (relative to the broader market). This
Fund is exposed to alternative investment risk, foreign investment risk,
high-yield securities risk, mortgage- and asset-backed securities risk, and
small company investment risk. Consult the Portfolio's prospectus for additional
information on these and other risks.
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3. Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
4. The investment adviser has contractually committed through September 30,
2010, 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.
5. The WealthBuilder Conservative Allocation Composite Index is weighted 20%
in the S&P 500 Index and 80% in the Barclays Capital U.S. Aggregate Bond
Index (includes Treasury issues, agency issues, corporate bond issues, and
mortgage-backed securities). You cannot invest directly in an Index.
6. The S&P 500 Index is an unmanaged index of 500 widely held common stocks
representing, among others, industrial, financial, utility and
transportation companies listed or traded on national exchanges or
over-the-counter markets. You cannot invest directly in an Index.
7. The Barclays Capital U.S. Aggregate Bond Index is composed of the Barclays
Capital Government/Credit Index and the Mortgage-Backed Securities Index
and includes U.S. Treasury issues, agency issues, corporate bond issues,
and mortgage-backed securities. You cannot invest directly in an index.
6 Wells Fargo Advantage WealthBuilder Portfolio Performance Highlights
WELLS FARGO ADVANTAGE WEALTHBUILDER MODERATE BALANCED PORTFOLIO
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE WEALTHBUILDER MODERATE BALANCED PORTFOLIO (the
Portfolio) seeks a combination of current income and capital appreciation.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Doug Beath
Galen G. Blomster, CFA (until 2/1/10)
Petros Bocray, CFA
Jeffrey P. Mellas, CAIA
PORTFOLIO INCEPTION
September 30, 2004
EFFECTIVE ALLOCATION(1)
(AS OF NOVEMBER 30, 2009)
[PIE CHART]
Alternative Investment Funds (5%)
Stock Funds (48%)
Bond Funds (47%)
TEN LARGEST MUTUAL FUNDS AND MASTER PORTFOLIOS HELD(2)
(AS OF NOVEMBER 30, 2009)
Wells Fargo Advantage Short Duration Government Bond Fund 19%
Wells Fargo Advantage Total Return Bond Portfolio 14%
Wells Fargo Advantage Government Securities Fund 14%
PIMCO High Yield Fund 5%
Oppenheimer International Bond Fund 5%
Wells Fargo Advantage Equity Value Portfolio 5%
T. Rowe Price Blue Chip Growth Fund 5%
Thornburg International Value Fund 4%
PIMCO Commodity RealReturn Strategy Fund 3%
Wells Fargo Advantage International Growth Portfolio 3%
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1. Effective allocation is subject to change and is calculated based on the
total investments of the Fund, excluding cash and cash equivalents. The
Portfolio's use of futures contracts to implement a TAA shift toward
stocks or bonds is reflected in the effective allocations shown.
2. Portfolio holdings are subject to change and are calculated based on the
total investments of the Fund.
Performance Highlights Wells Fargo Advantage WealthBuilder Portfolio 7
WELLS FARGO ADVANTAGE WEALTHBUILDER MODERATE BALANCED PORTFOLIO (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
------------------------------------ ------------------------------------ ----------------
WEALTHBUILDER MODERATE Life of Life of
BALANCED PORTFOLIO 6 Months* 1 Year 5 Year Portfolio 6 Months* 1 Year 5 Year Portfolio Gross(3) Net(4)
- ------------------------------------ --------- ------ ------ --------- --------- ------ ------ --------- -------- ------
Moderate Balanced Portfolio (WBBBX) 11.14 23.67 1.91 2.53 12.83 25.55 2.22 2.83 2.19% 1.50%
WealthBuilder Moderate Balanced
Composite Index(5) 11.81 17.51 3.86 4.05
Barclays Capital U.S. Aggregate Bond
Index(6) 6.21 11.63 5.49 5.32
S&P 500 Index(7) 20.50 25.39 0.71 1.76
* 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. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE PORTFOLIO'S WEB SITE -
WWW.WELLSFARGO.COM/ADVANTAGEFUNDS.
FOR WEALTHBUILDER PORTFOLIO SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 1.50%.
PERFOMANCE INCLUDING SALES CHARGE ASSUMES THE SALES CHARGE FOR THE CORRESPONDING
TIME PERIOD.
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. Certain investment strategies tend to
increase the total risk of an investment (relative to the broader market). This
Fund is exposed to alternative investment risk, foreign investment risk,
high-yield securities risk, mortgage- and asset-backed securities risk, and
small company investment risk. Consult the Fund's prospectus for additional
information on these and other risks.
- ----------
3. Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
4. The investment adviser has contractually committed through September 30,
2010, 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.
5. The WealthBuilder Moderate Balanced Composite Index is weighted 40% in the
S&P 500 Index and 60% in the Barclays Capital U.S. Aggregate Bond Index
(includes Treasury issues, agency issues, corporate bond issues, and
mortgage-backed securities). You cannot invest directly in an Index.
6. The Barclays Capital U.S. Aggregate Bond Index is composed of the Barclays
Capital Government/Credit Index and the Mortgage-Backed Securities Index
and includes U.S. Treasury issues, agency issues, corporate bond issues,
and mortgage-backed securities. You cannot invest directly in an index.
7. 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.
8 Wells Fargo Advantage WealthBuilder Portfolio Performance Highlights
WELLS FARGO ADVANTAGE WEALTHBUILDER GROWTH BALANCED PORTFOLIO
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE WEALTHBUILDER GROWTH BALANCED PORTFOLIO (the
Portfolio) seeks a combination of capital appreciation and current income.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Doug Beath
Galen G. Blomster, CFA (until 2/1/10)
Petros Bocray, CFA
Jeffrey P. Mellas, CAIA
PORTFOLIO INCEPTION
October 1, 1997
EFFECTIVE ALLOCATION(1)
(AS OF NOVEMBER 30, 2009)
[PIE CHART]
Alternative Investment Funds (5%)
Stock Funds (77%)
Bond Funds (18%)
TEN LARGEST MUTUAL FUNDS AND MASTER PORTFOLIOS HELD(2)
(AS OF NOVEMBER 30, 2009)
Wells Fargo Advantage Government Securities Fund 12%
Wells Fargo Advantage Total Return Bond Portfolio 11%
T. Rowe Price Blue Chip Growth Fund 8%
Wells Fargo Advantage Equity Value Portfolio 8%
Thornburg International Value Fund 7%
Oppenheimer International Bond Fund 5%
PIMCO High Yield Fund 5%
Wells Fargo Advantage International Growth Portfolio 5%
Wells Fargo Advantage Endeavor Select Fund 4%
Columbia Marsico Focused Equities Fund 4%
- ----------
1. Effective allocation is subject to change and is calculated based on the
total investments of the Fund, excluding cash and cash equivalents. The
Portfolio's use of futures contracts to implement a TAA shift toward
stocks or bonds is reflected in the effective allocations shown.
2. Portfolio holdings are subject to change and are calculated based on the
total investments of the Fund.
Performance Highlights Wells Fargo Advantage WealthBuilder Portfolio 9
WELLS FARGO ADVANTAGE WEALTHBUILDER GROWTH BALANCED PORTFOLIO (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
WEALTHBUILDER GROWTH ---------------------------------- ---------------------------------- ----------------
BALANCED PORTFOLIO 6 Months* 1 Year 5 Year 10 Year 6 Months* 1 Year 5 Year 10 Year Gross(3) Net(4)
- --------------------------------- --------- ------ ------ ------- --------- ------ ------ ------- -------- ------
Growth Balanced Portfolio (WBGBX) 15.47 30.27 0.34 0.93 17.23 32.25 0.64 1.08 2.28% 1.50%
WealthBuilder Growth Balanced
Composite Index(5) 15.39 20.95 2.65 2.17
S&P 500 Index(6) 20.50 25.39 0.71 (0.57)
Barclays Capital U.S. Aggregate
Bond Index(7) 6.21 11.63 5.49 6.45
* 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. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE -
WWW.WELLSFARGO.COM/ADVANTAGEFUNDS.
FOR WEALTHBUILDER PORTFOLIO SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 1.50%.
PERFORMANCE INCLUDING SALES CHARGE ASSUMES THE SALES CHARGE FOR THE
CORRESPONDING TIME PERIOD.
Please keep in mind that high double-digit returns were primarily achieved
during favorable market conditions. You should not expect that such favorable
returns can be consistently achieved. A Portfolio's performance, especially for
very short time periods, should not be the sole factor in making your investment
decision.
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. Certain investment strategies tend to
increase the total risk of an investment (relative to the broader market). This
Fund is exposed to alternative investment risk, foreign investment risk,
high-yield securities risk, mortgage- and asset-based securities risk and small
company investment risk. Consult the Fund's prospectus for additional
information on these and other risks.
- ----------
3. Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
4. The investment adviser has contractually committed through September 30,
2010, 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.
5. The WealthBuilder Growth Balanced Composite Index is weighted 65% in the
S&P 500 Index and 35% in the Barclays Capital U.S. Aggregate Bond Index
(includes Treasury issues, agency issues, corporate bond issues, and
mortgage-backed securities). You cannot invest directly in an Index.
6. 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.
7. The Barclays Capital U.S. Aggregate Bond Index is composed of the Barclays
Capital Government/Credit Index and the Mortgage-Backed Securities Index
and includes U.S. Treasury issues, agency issues, corporate bond issues,
and mortgage-backed securities. You cannot invest directly in an index.
10 Wells Fargo Advantage WealthBuilder Portfolio Performance Highlights
WELLS FARGO ADVANTAGE WEALTHBUILDER GROWTH ALLOCATION PORTFOLIO
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE WEALTHBUILDER GROWTH ALLOCATION PORTFOLIO (the
Portfolio) seeks capital appreciation with a secondary emphasis on current
income.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Doug Beath
Galen G. Blomster, CFA (until 2/1/10)
Petros Bocray, CFA
Jeffrey P. Mellas, CAIA
PORTFOLIO INCEPTION
September 30, 2004
EFFECTIVE ALLOCATION(1)
(AS OF NOVEMBER 30, 2009)
[PIE CHART]
Alternative Investment Funds (5%)
Stock Funds (91%)
Bond Funds (4%)
TEN LARGEST MUTUAL FUNDS AND MASTER PORTFOLIOS HELD(2)
(AS OF NOVEMBER 30, 2009)
T. Rowe Price Blue Chip Growth Fund 9%
Wells Fargo Advantage Equity Value Portfolio 9%
Thornburg International Value Fund 8%
Wells Fargo Advantage Government Securities Fund 7%
Wells Fargo Advantage Total Return Bond Portfolio 6%
Wells Fargo Advantage International Growth Portfolio 5%
Columbia Marsico Focused Equities Fund 5%
Wells Fargo Advantage Endeavor Select Fund 5%
MFS Value Fund 5%
Eaton Vance Large Cap Value Fund 5%
- ----------
1. Effective allocation is subject to change and is calculated based on the
total investments of the Fund, excluding cash and cash equivalents. The
Portfolio's use of futures contracts to implement a TAA shift toward
stocks or bonds is reflected in the effective allocations shown.
2. Portfolio holdings are subject to change and are calculated based on the
total investments of the Fund.
Performance Highlights Wells Fargo Advantage WealthBuilder Portfolio 11
WELLS FARGO ADVANTAGE WEALTHBUILDER GROWTH ALLOCATION PORTFOLIO (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge
------------------------------------ ------------------------------------ Expense Ratio
WEALTHBUILDER GROWTH Life of Life of ----------------
ALLOCATION PORTFOLIO 6 Months* 1 Year 5 Year Portfolio 6 Months* 1 Year 5 Year Portfolio Gross(3) Net(4)
- ------------------------------------ --------- ------ ------ --------- --------- ------ ------ --------- -------- ------
Growth Allocation Portfolio (WBGGX) 16.52 32.02 (0.36) 0.76 18.30 34.03 (0.06) 1.06 2.38% 1.50%
WealthBuilder Growth Allocation
Composite Index(5) 17.56 22.91 1.85 2.40
Barclays Capital U.S. Aggregate Bond
Index(6) 6.21 11.63 5.49 5.32
S&P 500 Index(7) 20.50 25.39 0.71 1.76
* 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. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE -
WWW.WELLSFARGO.COM/ADVANTAGEFUNDS.
FOR WEALTHBUILDER PORTFOLIO SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 1.50%.
PERFORMANCE INCLUDING SALES CHARGE ASSUMES THE SALES CHARGE FOR THE
CORRESPONDING TIME PERIOD.
Please keep in mind that high double-digit returns were primarily achieved
during favorable market conditions. You should not expect that such favorable
returns can be consistently achieved. A Portfolio's performance, especially for
very short time periods, should not be the sole factor in making your investment
decision.
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. Certain investment strategies tend to
increase the total risk of an investment (relative to the broader market). This
Fund is exposed to alternative investment risk, foreign investment risk,
high-yield securities risk, and small company investment risk. Consult the
Fund's prospectus for additional information on these and other risks.
- ----------
3. Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
4. The investment adviser has contractually committed through September 30,
2010, 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.
5. The WealthBuilder Growth Allocation Composite Index is weighted 80% in the
S&P 500 Index and 20% in the Barclays Capital U.S. Aggregate Bond Index
(includes Treasury issues, agency issues, corporate bond issues, and
mortgage-backed securities). You cannot invest directly in an Index.
6. The Barclays Capital U.S. Aggregate Bond Index is composed of the Barclays
Capital Government/Credit Index and the Mortgage-Backed Securities Index
and includes U.S. Treasury issues, agency issues, corporate bond issues,
and mortgage-backed securities. You cannot invest directly in an index.
7. 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.
12 Wells Fargo Advantage WealthBuilder Portfolio Performance Highlights
WELLS FARGO ADVANTAGE WEALTHBUILDER EQUITY PORTFOLIO
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE WEALTHBUILDER EQUITY PORTFOLIO (the Portfolio) seeks
long-term capital appreciation with no emphasis on income.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Doug Beath
Galen G. Blomster, CFA (until 2/1/10)
Petros Bocray, CFA
Jeffrey P. Mellas, CAIA
PORTFOLIO INCEPTION
October 1, 1997
EFFECTIVE ALLOCATION(1)
(AS OF NOVEMBER 30, 2009)
[PIE CHART]
Small Company (20%)
International (30%)
Large Company Value (25%)
Large Company Growth (25%)
TEN LARGEST MUTUAL FUNDS AND MASTER PORTFOLIOS HELD(2)
(AS OF NOVEMBER 30, 2009)
T. Rowe Price Blue Chip Growth Fund 13%
Wells Fargo Advantage Equity Value Portfolio 13%
Thornburg International Value Fund 10%
Wells Fargo Advantage International Growth Portfolio 7%
MFS Value Fund 6%
Wells Fargo Advantage Endeavor Select Fund 6%
Columbia Marsico Focused Equities Fund 6%
Eaton Vance Large Cap Value Fund 6%
Wells Fargo Advantage Small Cap Value Fund 5%
Wells Fargo Advantage Small Company Value Portfolio 5%
- ----------
1. Effective allocation is subject to change and is calculated based on the
total investments of the Fund, excluding cash and cash equivalents.
2. Portfolio holdings are subject to change and are calculated based on the
total investments of the Fund.
Performance Highlights Wells Fargo Advantage WealthBuilder Portfolio 13
WELLS FARGO ADVANTAGE WEALTHBUILDER EQUITY PORTFOLIO (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
WEALTHBUILDER ------------------------------------- ------------------------------------- -----------------
EQUITY PORTFOLIO 6 Months* 1 Year 5 Year 10 Year 6 Months* 1 Year 5 Year 10 Year Gross(3) Net(4)
- ------------------------ --------- ------ ------ ------- --------- ------ ------ ------- -------- ------
Equity Portfolio (WBGIX) 16.75 31.92 (0.80) (1.21) 18.52 33.92 (0.50) (1.06) 2.49% 1.50%
S&P 500 Index(5) 20.50 25.39 0.71 (0.57)
* 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. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE
- -WWW.WELLSFARGO.COM/ADVANTAGEFUNDS.
FOR WEALTHBUILDER PORTFOLIO SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 1.50%.
PERFORMANCE INCLUDING SALES CHARGE ASSUMES THE SALES CHARGE FOR THE
CORRESPONDING TIME PERIOD.
Please keep in mind that high double-digit returns were primarily achieved
during favorable market conditions. You should not expect that such favorable
returns can be consistently achieved. A Fund's performance, especially for very
short time periods, should not be the sole factor in making your investment
decision.
Stock fund values fluctuate in response to the activities of individual
companies and general market and economic conditions. 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 small
company investment risk. Consult the Portfolio's prospectus for additional
information on these and other risks.
- -----------
3. Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
4. The investment adviser has contractually committed through September 30,
2010, 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.
5. The S&P 500 Index is an unmanaged index of 500 widely held common stocks
representing, among others, industrial, financial, utility and
transportation companies listed or traded on national exchanges or
over-the-counter markets. You cannot invest directly in an Index.
14 Wells Fargo Advantage WealthBuilder Portfolio Performance Highlights
WELLS FARGO ADVANTAGE WEALTHBUILDER TACTICAL EQUITY PORTFOLIO
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE WEALTHBUILDER TACTICAL EQUITY PORTFOLIO (the
Portfolio) seeks long-term capital appreciation with no emphasis on income.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Doug Beath
Galen G. Blomster, CFA (until 2/1/10)
Petros Bocray, CFA
Jeffrey P. Mellas, CAIA
PORTFOLIO INCEPTION
October 1, 1997
EFFECTIVE ALLOCATION(1)
(AS OF NOVEMBER 30, 2009)
[PIE CHART]
Small Company (35%)
International (50%)
Large Cap (15%)
TEN LARGEST MUTUAL FUNDS AND MASTER PORTFOLIOS HELD(2)
(AS OF NOVEMBER 30, 2009)
Wells Fargo Advantage Equity Value Portfolio 17%
Thornburg International Value Fund 10%
Eaton Vance Large Cap Value Fund 9%
MFS Value Fund 9%
T. Rowe Price Blue Chip Growth Fund 8%
Wells Fargo Advantage International Growth Portfolio 8%
Wells Fargo Advantage Small Cap Value Fund 5%
Wells Fargo Advantage Small Cap Growth Fund 5%
Oppenheimer Main Street Small Cap Fund 5%
Wells Fargo Advantage Small Company Value Portfolio 5%
- ----------
1. Effective allocation is subject to change and is calculated based on the
total investments of the Fund, excluding cash and cash equivalents.
2. Portfolio holdings are subject to change and are calculated based on the
total investments of the Fund.
Performance Highlights Wells Fargo Advantage WealthBuilder Portfolio 15
WELLS FARGO ADVANTAGE WEALTHBUILDER TACTICAL EQUITY PORTFOLIO (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
WEALTHBUILDER TACTICAL ------------------------------------- ------------------------------------- -----------------
EQUITY PORTFOLIO 6 Months* 1 Year 5 Year 10 Year 6 Months* 1 Year 5 Year 10 Year Gross(3) Net(4)
- --------------------------------- --------- ------ ------ ------- --------- ------ ------ ------- -------- ------
Tactical Equity Portfolio (WBGAX) 16.73 32.11 (0.05) (0.52) 18.51 34.12 0.25 (0.37) 2.44% 1.50%
S&P 500 Index(5) 20.50 25.39 0.71 (0.57)
* 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. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE --
WWW.WELLSFARGO.COM/ADVANTAGEFUNDS.
FOR WEALTHBUILDER PORTFOLIO SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS
1.50%.PERFORMANCE INCLUDING SALES CHARGE ASSUMES THE SALES CHARGE FOR THE
CORRESPONDING TIME PERIOD.
Please keep in mind that high double-digit returns were primarily achieved
during favorable market conditions. You should not expect that such favorable
returns can be consistently achieved. A Fund's performance, especially for very
short time periods, should not be the sole factor in making your investment
decision.
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 and small company investment risk.
Consult the Fund's prospectus for additional information on these and other
risks.
- ----------
3. Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
4. The investment adviser has contractually committed through September 30,
2010, 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.
5. 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.
16 Wells Fargo Advantage WealthBuilder Portfolio Fund Expenses
As a shareholder of the Portfolio, 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 Portfolio
expenses. This example is intended to help you understand your ongoing costs (in
dollars) of investing in the Portfolio 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 June 1, 2009 to
November 30, 2009.
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 portfolio 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 Portfolio's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Portfolio'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 Portfolio with other mutual 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
06-01-2009 11-30-2009 Period(1) Expense Ratio(2)
------------- ------------- ----------- ----------------
WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO
Actual $1,000.00 $1,095.40 $7.88 1.50%
Hypothetical (5% return before expenses) $1,000.00 $1,017.55 $7.59 1.50%
WEALTHBUILDER MODERATE BALANCED PORTFOLIO
Actual $1,000.00 $1,128.30 $8.00 1.50%
Hypothetical (5% return before expenses) $1,000.00 $1,017.55 $7.59 1.50%
WEALTHBUILDER GROWTH BALANCED PORTFOLIO
Actual $1,000.00 $1,172.30 $8.17 1.50%
Hypothetical (5% return before expenses) $1,000.00 $1,017.55 $7.59 1.50%
WEALTHBUILDER GROWTH ALLOCATION PORTFOLIO
Actual $1,000.00 $1,183.00 $8.21 1.50%
Hypothetical (5% return before expenses) $1,000.00 $1,017.55 $7.59 1.50%
WEALTHBUILDER EQUITY PORTFOLIO
Actual $1,000.00 $1,185.20 $8.22 1.50%
Hypothetical (5% return before expenses) $1,000.00 $1,017.55 $7.59 1.50%
WEALTHBUILDER TACTICAL EQUITY PORTFOLIO
Actual $1,000.00 $1,185.10 $8.22 1.50%
Hypothetical (5% return before expenses) $1,000.00 $1,017.55 $7.59 1.50%
- ----------
1. Expenses are equal to the Portfolio's annualized expenses ratio multiplied
by the average account value over the period, multiplied by the number of
days in the most recent fiscal half-year divided by the number of days in
the fiscal year (to reflect the one-half year ended).
2. The actual expense rates exclude expenses allocated from Master Portfolios.
Portfolio of Investments--November 30, 2009 (Unaudited) Wells Fargo Advantage WealthBuilder Portfolio 17
WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO
SHARES SECURITY NAME VALUE
INVESTMENT COMPANIES: 96.71%
STOCK FUNDS: 10.67%
193,503 COLUMBIA MARSICO FOCUSED EQUITIES FUND $ 3,784,912
89,152 DFA INTERNATIONAL SMALL CAP VALUE PORTFOLIO 1,336,382
70,652 DODGE & COX INTERNATIONAL STOCK FUND 2,230,475
227,303 EATON VANCE LARGE CAP VALUE FUND 3,782,324
196,460 ING INTERNATIONAL VALUE FUND 2,251,436
184,083 MFS VALUE FUND 3,786,581
181,598 OPPENHEIMER MAIN STREET SMALL CAP FUND 2,972,758
237,229 T. ROWE PRICE BLUE CHIP GROWTH FUND 7,539,140
36,456 T. ROWE PRICE INTERNATIONAL DISCOVERY FUND 1,353,959
249,532 THORNBURG INTERNATIONAL VALUE FUND 6,253,274
35,291,241
------------
AFFILIATED STOCK FUNDS: 7.48%
459,530 WELLS FARGO ADVANTAGE ENDEAVOR SELECT FUND 3,781,936
N/A WELLS FARGO ADVANTAGE EQUITY VALUE PORTFOLIO 7,519,698
N/A WELLS FARGO ADVANTAGE INTERNATIONAL GROWTH PORTFOLIO 4,453,526
274,374 WELLS FARGO ADVANTAGE SMALL CAP GROWTH FUND 2,974,217
119,424 WELLS FARGO ADVANTAGE SMALL CAP VALUE FUND 3,039,331
N/A WELLS FARGO ADVANTAGE SMALL COMPANY VALUE PORTFOLIO 2,980,064
24,748,772
------------
BOND FUNDS: 14.08%
434,060 ING GLOBAL REAL ESTATE FUND 6,376,337
2,282,270 OPPENHEIMER INTERNATIONAL BOND FUND 15,268,389
1,146,773 PIMCO COMMODITY REALRETURN STRATEGY FUND 9,781,976
1,757,372 PIMCO HIGH YIELD FUND 15,166,122
46,592,824
------------
AFFILIATED BOND FUNDS: 64.48%
5,548,149 WELLS FARGO ADVANTAGE GOVERNMENT SECURITIES FUND 60,974,155
8,727,619 WELLS FARGO ADVANTAGE SHORT DURATION GOVERNMENT BOND FUND 91,378,173
N/A WELLS FARGO ADVANTAGE TOTAL RETURN BOND PORTFOLIO 60,962,614
213,314,942
------------
TOTAL INVESTMENT COMPANIES (COST $301,725,504) 319,947,779
------------
YIELD
SHORT-TERM INVESTMENTS: 1.83%
MUTUAL FUNDS: 1.28%
4,234,595 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~(s) 0.13% 4,234,595
------------
PRINCIPAL INTEREST RATE MATURITY DATE
US TREASURY BILLS: 0.55%
$ 1,050,000 US TREASURY BILL## # 0.20 02/04/2010 1,049,522
755,000 US TREASURY BILL## # 0.16 05/06/2010 754,497
1,804,019
------------
TOTAL SHORT-TERM INVESTMENTS (COST $6,038,614) 6,038,614
------------
18 Wells Fargo Advantage WealthBuilder Portfolio Portfolio of Investments--November 30, 2009 (Unaudited)
WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO
SHARES SECURITY NAME VALUE
TOTAL INVESTMENTS IN SECURITIES
(COST $307,764,118)* 98.54% $ 325,986,393
OTHER ASSETS AND LIABILITIES, NET 1.46 4,828,517
------ --------------
TOTAL NET ASSETS 100.00% $ 330,814,910
------ --------------
- ----------
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The Wells
Fargo Advantage Money Market Fund does not pay an investment advisory fee.
(s) Rate shown is the 7-day annualized yield at period end.
## Zero coupon bond. Interest rate presented is yield to maturity.
# All or a portion of this security is segregated as collateral for
derivative investments.
* Cost for federal income tax purposes is $312,488,419 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 18,222,275
Gross unrealized depreciation (4,724,301)
-------------
Net unrealized appreciation $ 13,497,974
</Table>
The accompanying notes are an integral part of these financial statements.
Portfolio of Investments--November 30, 2009 (Unaudited) Wells Fargo Advantage WealthBuilder Portfolio 19
WEALTHBUILDER MODERATE BALANCED PORTFOLIO
<Table>
<Caption>
SHARES SECURITY NAME VALUE
INVESTMENT COMPANIES: 96.78%
STOCK FUNDS: 21.36%
445,101 COLUMBIA MARSICO FOCUSED EQUITIES FUND $ 8,706,182
206,181 DFA INTERNATIONAL SMALL CAP VALUE PORTFOLIO 3,090,646
163,337 DODGE & COX INTERNATIONAL STOCK FUND 5,156,557
523,394 EATON VANCE LARGE CAP VALUE FUND 8,709,274
452,430 ING INTERNATIONAL VALUE FUND 5,184,852
424,261 MFS VALUE FUND 8,727,039
419,489 OPPENHEIMER MAIN STREET SMALL CAP FUND 6,867,031
547,302 T. ROWE PRICE BLUE CHIP GROWTH FUND 17,393,246
84,116 T. ROWE PRICE INTERNATIONAL DISCOVERY FUND 3,124,071
574,804 THORNBURG INTERNATIONAL VALUE FUND 14,404,583
81,363,481
------------
AFFILIATED STOCK FUNDS: 15.07%
1,060,443 WELLS FARGO ADVANTAGE ENDEAVOR SELECT FUND 8,727,444
N/A WELLS FARGO ADVANTAGE EQUITY VALUE PORTFOLIO 17,511,371
N/A WELLS FARGO ADVANTAGE INTERNATIONAL GROWTH PORTFOLIO 10,371,169
633,802 WELLS FARGO ADVANTAGE SMALL CAP GROWTH FUND 6,870,412
272,871 WELLS FARGO ADVANTAGE SMALL CAP VALUE FUND 6,944,557
N/A WELLS FARGO ADVANTAGE SMALL COMPANY VALUE PORTFOLIO 6,978,735
57,403,688
------------
BOND FUNDS: 14.05%
501,336 ING GLOBAL REAL ESTATE FUND 7,364,633
2,618,432 OPPENHEIMER INTERNATIONAL BOND FUND 17,517,309
1,298,780 PIMCO COMMODITY REALRETURN STRATEGY FUND 11,078,595
2,033,421 PIMCO HIGH YIELD FUND 17,548,419
53,508,956
------------
AFFILIATED BOND FUNDS: 46.30%
4,815,302 WELLS FARGO ADVANTAGE GOVERNMENT SECURITIES FUND 52,920,167
6,732,676 WELLS FARGO ADVANTAGE SHORT DURATION GOVERNMENT BOND FUND 70,491,117
N/A WELLS FARGO ADVANTAGE TOTAL RETURN BOND PORTFOLIO 52,981,546
176,392,830
------------
TOTAL INVESTMENT COMPANIES (COST $349,043,397) 368,668,955
------------
YIELD
SHORT-TERM INVESTMENTS: 2.33%
MUTUAL FUNDS: 1.23%
4,681,074 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~(S) 0.13% 4,681,074
------------
PRINCIPAL INTEREST RATE MATURITY DATE
US TREASURY BILLS: 1.10%
$ 2,155,000 US TREASURY BILL## # 0.28 02/04/2010 2,154,027
2,025,000 US TREASURY BILL## # 0.16 05/06/2010 2,023,636
4,177,663
------------
TOTAL SHORT-TERM INVESTMENTS (COST $8,858,737) 8,858,737
------------
20 Wells Fargo Advantage WealthBuilder Portfolio Portfolio of Investments--November 30, 2009 (Unaudited)
WEALTHBUILDER MODERATE BALANCED PORTFOLIO
SHARES SECURITY NAME VALUE
TOTAL INVESTMENTS IN SECURITIES
(COST $357,902,134)* 99.11% $ 377,527,692
OTHER ASSETS AND LIABILITIES, NET 0.89 3,404,003
------ --------------
TOTAL NET ASSETS 100.00% $ 380,931,695
------ --------------
- ----------
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The Wells
Fargo Advantage Money Market Fund does not pay an investment advisory fee.
(s) Rate shown is the 7-day annualized yield at period end.
## Zero coupon bond. Interest rate presented is yield to maturity.
# All or a portion of this security is segregated as collateral for
derivative investments.
* Cost for federal income tax purposes is $363,145,704 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 22,035,777
Gross unrealized depreciation (7,653,789)
-------------
Net unrealized appreciation $ 14,381,988
The accompanying notes are an integral part of these financial statements.
Portfolio of Investments--November 30, 2009 (Unaudited) Wells Fargo Advantage WealthBuilder Portfolio 21
WEALTHBUILDER GROWTH BALANCED PORTFOLIO
SHARES SECURITY NAME VALUE
INVESTMENT COMPANIES: 97.68%
STOCK FUNDS: 35.36%
1,087,028 COLUMBIA MARSICO FOCUSED EQUITIES FUND $ 21,262,274
495,830 DFA INTERNATIONAL SMALL CAP VALUE PORTFOLIO 7,432,489
397,580 DODGE & COX INTERNATIONAL STOCK FUND 12,551,591
1,270,392 EATON VANCE LARGE CAP VALUE FUND 21,139,327
1,093,391 ING INTERNATIONAL VALUE FUND 12,530,264
1,029,137 MFS VALUE FUND 21,169,348
1,015,604 OPPENHEIMER MAIN STREET SMALL CAP FUND 16,625,441
1,329,253 T. ROWE PRICE BLUE CHIP GROWTH FUND 42,243,674
202,973 T. ROWE PRICE INTERNATIONAL DISCOVERY FUND 7,538,433
1,396,653 THORNBURG INTERNATIONAL VALUE FUND 35,000,125
197,492,966
------------
AFFILIATED STOCK FUNDS: 24.87%
2,584,252 WELLS FARGO ADVANTAGE ENDEAVOR SELECT FUND 21,268,393
N/A WELLS FARGO ADVANTAGE EQUITY VALUE PORTFOLIO 42,166,046
N/A WELLS FARGO ADVANTAGE INTERNATIONAL GROWTH PORTFOLIO 25,137,294
1,534,042 WELLS FARGO ADVANTAGE SMALL CAP GROWTH FUND 16,629,016
668,190 WELLS FARGO ADVANTAGE SMALL CAP VALUE FUND 17,005,434
N/A WELLS FARGO ADVANTAGE SMALL COMPANY VALUE PORTFOLIO 16,716,932
138,923,115
------------
BOND FUNDS: 14.29%
736,837 ING GLOBAL REAL ESTATE FUND 10,824,141
3,903,222 OPPENHEIMER INTERNATIONAL BOND FUND 26,112,553
1,992,246 PIMCO COMMODITY REALRETURN STRATEGY FUND 16,993,860
3,003,080 PIMCO HIGH YIELD FUND 25,916,577
79,847,131
------------
AFFILIATED BOND FUNDS: 23.16%
6,149,293 WELLS FARGO ADVANTAGE GOVERNMENT SECURITIES FUND 67,580,728
N/A WELLS FARGO ADVANTAGE TOTAL RETURN BOND PORTFOLIO 61,768,687
129,349,415
------------
TOTAL INVESTMENT COMPANIES (COST $515,952,910) 545,612,627
------------
YIELD
SHORT-TERM INVESTMENTS: 1.69%
MUTUAL FUNDS: 0.14%
773,092 WELLS Fargo Advantage Money Market Trust~(s) 0.13% 773,092
------------
PRINCIPAL INTEREST RATE MATURITY DATE
US TREASURY BILLS: 1.55%
$ 5,470,000 US TREASURY BILL## # 0.28 02/04/2010 5,467,423
3,205,232 US TREASURY BILL## # 0.16 05/06/2010 3,203,057
8,670,480
------------
TOTAL SHORT-TERM INVESTMENTS (COST $9,443,572) 9,443,572
------------
22 Wells Fargo Advantage WealthBuilder Portfolio Portfolio of Investments--November 30, 2009 (Unaudited)
WEALTHBUILDER GROWTH BALANCED PORTFOLIO
SHARES SECURITY NAME VALUE
TOTAL INVESTMENTS IN SECURITIES
(COST $525,396,482)* 99.37% $ 555,056,199
OTHER ASSETS AND LIABILITIES, NET 0.63 3,504,450
------ --------------
TOTAL NET ASSETS 100.00% $ 558,560,649
------ --------------
- ----------
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The Wells
Fargo Advantage Money Market Fund does not pay an investment advisory fee.
(s) Rate shown is the 7-day annualized yield at period end.
## Zero coupon bond. Interest rate presented is yield to maturity.
# All or a portion of this security is segregated as collateral for
derivative investments.
* Cost for federal income tax purposes is $548,671,559 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 42,702,896
Gross unrealized depreciation (36,318,256)
-------------
Net unrealized appreciation $ 6,384,640)
The accompanying notes are an integral part of these financial statements.
Portfolio of Investments--November 30, 2009 (Unaudited) Wells Fargo Advantage WealthBuilder Portfolio 23
WEALTHBUILDER GROWTH ALLOCATION PORTFOLIO
SHARES SECURITY NAME VALUE
INVESTMENT COMPANIES: 97.23%
STOCK FUNDS: 43.28%
474,388 COLUMBIA MARSICO FOCUSED EQUITIES FUND $ 9,279,020
218,485 DFA INTERNATIONAL SMALL CAP VALUE PORTFOLIO 3,275,091
174,598 DODGE & COX INTERNATIONAL STOCK FUND 5,512,047
556,998 EATON VANCE LARGE CAP VALUE FUND 9,268,440
481,492 ING INTERNATIONAL VALUE FUND 5,517,893
450,764 MFS VALUE FUND 9,272,212
446,560 OPPENHEIMER MAIN STREET SMALL CAP FUND 7,310,187
583,265 T. ROWE PRICE BLUE CHIP GROWTH FUND 18,536,169
89,125 T. ROWE PRICE INTERNATIONAL DISCOVERY FUND 3,310,102
612,582 THORNBURG INTERNATIONAL VALUE FUND 15,351,300
86,632,461
------------
AFFILIATED STOCK FUNDS: 30.38%
1,127,144 WELLS FARGO ADVANTAGE ENDEAVOR SELECT FUND 9,276,399
N/A WELLS FARGO ADVANTAGE EQUITY VALUE PORTFOLIO 18,476,579
N/A WELLS FARGO ADVANTAGE INTERNATIONAL GROWTH PORTFOLIO 10,964,876
675,991 WELLS FARGO ADVANTAGE SMALL CAP GROWTH FUND 7,327,740
291,566 WELLS FARGO ADVANTAGE SMALL CAP VALUE FUND 7,420,353
N/A WELLS FARGO ADVANTAGE SMALL COMPANY VALUE PORTFOLIO 7,335,578
60,801,525
------------
BOND FUNDS: 10.55%
264,802 ING GLOBAL REAL ESTATE FUND 3,889,945
844,340 OPPENHEIMER INTERNATIONAL BOND FUND 5,648,637
699,385 PIMCO COMMODITY REALRETURN STRATEGY FUND 5,965,757
650,330 PIMCO HIGH YIELD FUND 5,612,350
21,116,689
------------
AFFILIATED BOND FUNDS: 13.02%
1,197,599 WELLS FARGO ADVANTAGE GOVERNMENT SECURITIES FUND 13,161,616
N/A WELLS FARGO ADVANTAGE TOTAL RETURN BOND PORTFOLIO 12,904,972
26,066,588
------------
TOTAL INVESTMENT COMPANIES (COST $184,956,992) 194,617,263
------------
YIELD
SHORT-TERM INVESTMENTS: 1.84%
MUTUAL FUNDS: 0.17%
346,114 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~(S) 0.13% 346,114
------------
PRINCIPAL INTEREST RATE MATURITY DATE
US TREASURY BILLS: 1.67%
$ 1,785,000 US Treasury Bill## # 0.28 02/04/2010 1,784,186
1,565,000 US Treasury Bill## # 0.16 05/06/2010 1,563,936
3,348,122
------------
TOTAL SHORT-TERM INVESTMENTS (COST $3,694,236) 3,694,236
------------
24 Wells Fargo Advantage WealthBuilder Portfolio Portfolio of Investments--November 30, 2009 (Unaudited)
WEALTHBUILDER GROWTH ALLOCATION PORTFOLIO
SHARES SECURITY NAME VALUE
TOTAL INVESTMENTS IN SECURITIES
(COST $188,651,228)* 99.07% $ 198,311,499
OTHER ASSETS AND LIABILITIES, NET 0.93 1,857,789
------ --------------
TOTAL NET ASSETS 100.00% $ 200,169,288
------ --------------
- ----------
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The Wells
Fargo Advantage Money Market Fund does not pay an investment advisory fee.
(s) Rate shown is the 7-day annualized yield at period end.
## Zero coupon bond. Interest rate presented is yield to maturity.
# All or a portion of this security is segregated as collateral for
derivative investments.
* Cost for federal income tax purposes is $196,983,264 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 15,693,386
Gross unrealized depreciation (14,365,151)
------------
Net unrealized appreciation $ 1,328,235
The accompanying notes are an integral part of these financial statements.
Portfolio of Investments--November 30, 2009 (Unaudited) Wells Fargo Advantage WealthBuilder Portfolio 25
WEALTHBUILDER EQUITY PORTFOLIO
<Table>
<Caption>
SHARES SECURITY NAME VALUE
INVESTMENT COMPANIES: 99.25%
STOCK FUNDS: 58.32%
395,815 COLUMBIA MARSICO FOCUSED EQUITIES FUND $ 7,742,134
178,261 DFA INTERNATIONAL SMALL CAP VALUE PORTFOLIO 2,672,125
143,214 DODGE & COX INTERNATIONAL STOCK FUND 4,521,259
465,181 EATON VANCE LARGE CAP VALUE FUND 7,740,611
390,662 ING INTERNATIONAL VALUE FUND 4,476,983
376,914 MFS VALUE FUND 7,753,113
367,845 OPPENHEIMER MAIN STREET SMALL CAP FUND 6,021,620
485,861 T. ROWE PRICE BLUE CHIP GROWTH FUND 15,440,653
74,194 T. ROWE PRICE INTERNATIONAL DISCOVERY FUND 2,755,556
509,002 THORNBURG INTERNATIONAL VALUE FUND 12,755,578
71,879,632
------------
AFFILIATED STOCK FUNDS: 40.93%
941,989 WELLS FARGO ADVANTAGE ENDEAVOR SELECT FUND 7,752,572
N/A WELLS FARGO ADVANTAGE EQUITY VALUE PORTFOLIO 15,355,745
N/A WELLS FARGO ADVANTAGE INTERNATIONAL GROWTH PORTFOLIO 9,127,886
553,485 WELLS FARGO ADVANTAGE SMALL CAP GROWTH FUND 5,999,777
241,784 WELLS FARGO ADVANTAGE SMALL CAP VALUE FUND 6,153,407
N/A WELLS FARGO ADVANTAGE SMALL COMPANY VALUE PORTFOLIO 6,048,490
50,437,877
------------
TOTAL INVESTMENT COMPANIES (COST $117,382,118) 122,317,509
------------
</Table>
<Table>
<Caption>
YIELD
SHORT-TERM INVESTMENTS: 0.08%
MUTUAL FUNDS: 0.08%
98,851 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~(s) 0.13% 98,851
------------
TOTAL SHORT-TERM INVESTMENTS (COST $98,851) 98,851
------------
TOTAL INVESTMENTS IN SECURITIES
(COST $117,480,969)* 99.33% 122,416,360
OTHER ASSETS AND LIABILITIES, NET 0.67 831,770
------ ------------
TOTAL NET ASSETS 100.00% $123,248,130
------ ------------
</Table>
- ----------
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The Wells
Fargo Advantage Money Market Fund does not pay an investment advisory fee.
(s) Rate shown is the 7-day annualized yield at period end.
* Cost for federal income tax purposes is $120,114,313 and net unrealized
appreciation (depreciation) consists of:
<Table>
Gross unrealized appreciation $ 10,284,621
Gross unrealized depreciation (7,982,574)
-------------
Net unrealized appreciation $ 2,302,047
</Table>
The accompanying notes are an integral part of these financial statements.
<Table>
26 Wells Fargo Advantage WealthBuilder Portfolio Portfolio of Investments--November 30, 2009 (Unaudited)
WEALTHBUILDER TACTICAL EQUITY PORTFOLIO
<Table>
<Caption>
SHARES SECURITY NAME VALUE
INVESTMENT COMPANIES: 94.41%
STOCK FUNDS: 53.15%
651,446 COLUMBIA MARSICO FOCUSED EQUITIES FUND $ 12,742,287
500,894 DFA INTERNATIONAL SMALL CAP VALUE PORTFOLIO 7,508,401
397,897 DODGE & COX INTERNATIONAL STOCK FUND 12,561,605
1,784,424 EATON VANCE LARGE CAP VALUE FUND 29,692,817
1,102,026 ING INTERNATIONAL VALUE FUND 12,629,220
1,442,787 MFS VALUE FUND 29,678,131
1,025,057 OPPENHEIMER MAIN STREET SMALL CAP FUND 16,780,188
801,284 T. ROWE PRICE BLUE CHIP GROWTH FUND 25,464,810
204,528 T. ROWE PRICE INTERNATIONAL DISCOVERY FUND 7,596,183
1,400,659 THORNBURG INTERNATIONAL VALUE FUND 35,100,516
189,754,158
------------
AFFILIATED STOCK FUNDS: 41.26%
1,548,601 WELLS FARGO ADVANTAGE ENDEAVOR SELECT FUND 12,744,990
N/A WELLS FARGO ADVANTAGE EQUITY VALUE PORTFOLIO 59,004,024
N/A WELLS FARGO ADVANTAGE INTERNATIONAL GROWTH PORTFOLIO 25,011,132
1,549,585 WELLS FARGO ADVANTAGE SMALL CAP GROWTH FUND 16,797,497
666,598 WELLS FARGO ADVANTAGE SMALL CAP VALUE FUND 16,964,912
N/A WELLS FARGO ADVANTAGE SMALL COMPANY VALUE PORTFOLIO 16,769,094
147,291,649
------------
TOTAL INVESTMENT COMPANIES (COST $309,039,964) 337,045,807
------------
</Table>
<Table>
<Caption>
YIELD
SHORT-TERM INVESTMENTS: 4.62%
MUTUAL FUNDS: 0.33%
1,192,400 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~(s) 0.13% 1,192,400
------------
PRINCIPAL INTEREST RATE MATURITY DATE
US TREASURY BILLS: 4.29%
$15,315,000 US TREASURY BILL# ## 0.28 12/17/2009 15,312,958
------------
TOTAL SHORT-TERM INVESTMENTS (COST $16,505,358) 16,505,358
------------
TOTAL INVESTMENTS IN SECURITIES
(COST $325,545,322)* 99.03% 353,551,165
OTHER ASSETS AND LIABILITIES, NET 0.97 3,457,065
------ ------------
TOTAL NET ASSETS 100.00% $357,008,230
------ ------------
</Table>
- ----------
# All or a portion of this security is segregated as collateral for
derivative investments.
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The Wells
Fargo Advantage Money Market Fund does not pay an investment advisory fee.
(s) Rate shown is the 7-day annualized yield at period end.
## Zero coupon bond. Interest rate presented is yield to maturity.
* Cost for federal income tax purposes is $334,118,068 and net unrealized
appreciation (depreciation) consists of:
<Table>
Gross unrealized appreciation $ 33,268,712
Gross unrealized depreciation (13,835,615)
-------------
Net unrealized appreciation $ 19,433,097
</Table>
The accompanying notes are an integral part of these financial statements.
THIS PAGE IS INTENTIONALLY LEFT BLANK.
28 Wells Fargo Advantage WealthBuilder Portfolio Statements of Assets and Liabilities--November 30, 2009 (Unaudited)
<Table>
<Caption>
WealthBuilder WealthBuilder
Conservative Moderate
Allocation Balanced
Portfolio Portfolio
------------- -------------
ASSETS
Investments
In unaffiliated securities, at value .............. $ 83,688,084 $ 139,050,100
In affiliated Master Portfolios ................... 75,915,902 87,842,821
In affiliated Underlying Funds .................... 166,382,407 150,634,771
------------- -------------
Total investments at value (see cost below) ......... 325,986,393 377,527,692
------------- -------------
Cash ................................................ 313,490 499,995
Receivable for Fund shares issued ................... 5,200,111 3,274,452
Receivable for dividends ............................ 589,705 587,584
Variation margin receivable on futures contracts .... 62,962 145,744
Prepaid expenses and other assets ................... 14,358 14,147
------------- -------------
Total assets ........................................... 332,167,019 382,049,614
------------- -------------
LIABILITIES
Payable for Funds shares redeemed ................... 936,020 637,873
Payable for investments purchased ................... 47,745 55,343
Payable to investment advisor and affiliates ........ 368,344 424,703
Accrued expenses and other liabilities .............. 0 0
------------- -------------
Total liabilities ...................................... 1,352,109 1,117,919
------------- -------------
TOTAL NET ASSETS ....................................... $ 330,814,910 $ 380,931,695
------------- -------------
NET ASSETS CONSIST OF
Paid-in capital ..................................... $ 324,279,060 $ 396,564,448
Undistributed/overdistributed net investment
income (loss) ...................................... 50,474 1,353,688
Accumulated net realized loss on investments ........ (12,442,721) (38,281,647)
Net unrealized appreciation on investments .......... 18,222,275 19,625,558
Net unrealized appreciation (depreciation) on
futures ........................................... 705,822 1,669,648
------------- -------------
TOTAL NET ASSETS ....................................... $ 330,814,910 $ 380,931,695
------------- -------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER
SHARE(1)
Net asset value and offering price per shares ....... $ 10.17 $ 10.11
Maximum offering price per share(2) ................. $ 10.32 $ 10.26
Net assets .......................................... $ 330,814,910 $ 380,931,695
Shares outstanding .................................. 32,541,817 37,690,064
------------- -------------
Investments at cost .................................... $ 307,764,118 $ 357,902,134
------------- -------------
</Table>
- ----------
1. Each Fund has an unlimited number of authorized shares.
2. Maximum offering price is computed as 100/98.50 of net asset value. On
investments of $50,000 or more, the offering price is reduced.
The accompanying notes are an integral part of these financial statements.
<Table>
Statements of Assets and Liabilities--November 30, 2009 (Unaudited) Wells Fargo Advantage WealthBuilder Portfolio 29
<Table>
<Caption>
WealthBuilder WealthBuilder WealthBuilder
Growth Growth WealthBuilder Tactical
Balanced Allocation Equity Equity
Portfolio Portfolio Portfolio Portfolio
- -------------- ------------- ------------- --------------
$ 286,010,577 $ 111,097,272 $ 71,879,632 $ 205,067,116
145,788,959 49,682,005 30,532,121 100,784,250
123,256,663 37,532,222 20,004,607 47,699,799
- -------------- ------------- ------------- --------------
555,056,199 198,311,499 122,416,360 353,551,165
- -------------- ------------- ------------- --------------
2,652,130 531,898 400,000 3,000,000
1,690,313 1,354,260 548,530 779,282
690,659 188,242 73,226 205,499
341,442 117,200 0 197,659
1,169 10 22,755 104,245
- -------------- ------------- ------------- --------------
560,431,912 200,503,109 123,460,871 357,837,850
- -------------- ------------- ------------- --------------
1,109,766 92,163 68,550 382,206
82,357 17,683 0 0
630,607 219,103 128,328 394,962
48,533 4,872 15,863 52,452
- -------------- ------------- ------------- --------------
1,871,263 333,821 212,741 829,620
- -------------- ------------- ------------- --------------
$ 558,560,649 $ 200,169,288 $ 123,248,130 $ 357,008,230
- -------------- ------------- ------------- --------------
$ 687,636,720 $ 247,923,266 $ 163,420,690 $ 534,312,004
3,165,394 278,465 (427,178) (939,941)
(166,113,661) (59,094,274) (44,680,773) (198,261,965)
29,659,717 9,660,271 4,935,391 28,005,843
4,212,479 1,401,560 0 (6,107,711)
- -------------- ------------- ------------- --------------
$ 558,560,649 $ 200,169,288 $ 123,248,130 $ 357,008,230
- -------------- ------------- ------------- --------------
$ 9.73 $ 9.44 $ 9.15 $ 10.82
$ 9.88 $ 9.58 $ 9.29 $ 10.98
$ 558,560,649 $ 200,169,288 $ 123,248,130 $ 357,008,230
57,413,940 21,199,766 13,470,524 32,991,745
- -------------- ------------- ------------- --------------
$ 525,396,482 $ 188,651,228 $ 117,480,969 $ 325,545,322
- -------------- ------------- ------------- --------------
</Table>
30 Wells Fargo Advantage WealthBuilder Portfolio Statements of Operations--For the Six Months Ended November 30, 2009 (Unaudited)
<Table>
<Caption>
WealthBuilder WealthBuilder
Conservative Moderate
Allocation Balanced
Portfolio Portfolio
------------- -------------
INVESTMENT INCOME
Dividends from unaffiliated Underlying Funds .......................... $ 1,848,800 $ 1,715,890
Dividends from affiliated Underlying Funds ............................ 1,615,359 1,787,952
Dividends allocated from affiliated Master Portfolios(1) .............. 41,647 84,844
Interest .............................................................. 513 5,310
Income allocated from affiliated Master Portfolios .................... 1,197,569 1,068,177
Expenses allocated from affiliated Master Portfolios .................. (113,003) (135,578)
Waivers allocated from affiliated Master Portfolios ................... 15,539 12,826
------------- -------------
Total investment income .................................................. 4,606,424 4,539,421
------------- -------------
EXPENSES
Advisory fees ......................................................... 263,165 311,754
Administration fees ................................................... 434,222 514,393
Shareholder servicing fees ............................................ 328,956 389,692
Accounting fees ....................................................... 345 1,804
Distribution fees ..................................................... 986,868 1,169,076
Professional fees ..................................................... 11,909 13,972
Registration fees ..................................................... 10,253 11,915
Shareholder reports ................................................... 9,418 15,657
Trustees' fees ........................................................ 5,289 5,289
Other fees and expenses ............................................... 7,350 4,997
------------- -------------
Total expenses ........................................................... 2,057,775 2,438,549
------------- -------------
LESS
Waived fees ........................................................... (96,737) (120,932)
Net expenses .......................................................... 1,961,038 2,317,617
------------- -------------
Net investment income (loss) ............................................. 2,645,386 2,221,804
------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
NET REALIZED GAIN(LOSS) FROM
Unaffiliated Underlying Funds ......................................... 1,509,298 (1,284,363)
Affiliated Underlying Funds ........................................... 3,665 (53,247)
Futures transactions .................................................. 2,370,532 5,583,438
Transactions allocated from Master Portfolios ......................... (1,543,447) (1,832,611)
------------- -------------
Net realized gain (loss) from investments ................................ 2,340,048 2,413,217
------------- -------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF
Unaffiliated Underlying Funds ......................................... 7,290,914 19,728,372
Affiliated Underlying Funds ........................................... 12,395,184 13,998,409
Futures transactions .................................................. (849,998) (1,962,620)
Transactions allocated from Master Portfolios ......................... (221,055) 334,799
------------- -------------
Net change in unrealized appreciation (depreciation) of investments ...... 18,615,045 32,098,960
------------- -------------
Net realized and unrealized gain on investments .......................... 20,955,093 34,512,177
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ..................... $ 23,600,479 $ 36,733,981
------------- -------------
1. Net foreign withholding taxes allocated from Master Portfolios ........ $ 1,386 $ 3,193
</Table>
The accompanying notes are an integral part of these financial statements.
Statements of Operations--For the Six Months Ended November 30, 2009 (Unaudited) Wells Fargo Advantage WealthBuilder Portfolio 31
<Table>
<Caption>
WealthBuilder WealthBuilder WealthBuilder
Growth Growth WealthBuilder Tactical
Balanced Allocation Equity Equity
Portfolio Portfolio Portfolio Portfolio
- -------------- ------------- ------------- -------------
$ 2,568,186 $ 850,147 $ 346,192 $ 1,392,857
1,759,011 287,748 276 4,436
200,847 84,828 70,461 252,222
13,862 4,386 0 0
1,367,056 276,133 0 0
(233,979) (76,323) (13,215) (154,924)
14,828 1,976 913 3,598
- -------------- ------------- ------------- -------------
5,689,811 1,428,895 404,627 1,498,189
- -------------- ------------- ------------- -------------
503,930 172,680 115,311 339,502
831,485 284,922 190,262 560,179
629,913 215,850 144,138 424,378
12,216 419 3,186 8,695
1,889,739 647,549 432,415 1,273,133
15,665 11,599 6,504 15,479
11,122 11,664 629 12,043
23,304 14,522 5,086 19,640
5,289 5,289 5,289 5,289
9,384 3,056 3,328 7,429
- -------------- ------------- ------------- -------------
3,932,047 1,367,550 906,148 2,665,767
- -------------- ------------- ------------- -------------
(202,820) (95,148) (70,571) (173,449)
3,729,227 1,272,402 835,577 2,492,318
- -------------- ------------- ------------- -------------
1,960,584 156,493 (430,950) (994,129)
- -------------- ------------- ------------- -------------
(9,162,673) (4,676,741) (3,673,741) (16,404,145)
(313,265) (134,080) (88,549) (7,036,860)
14,937,591 4,680,502 0 6,341,572
(965,329) (424,450) 240,308 2,354,575
- -------------- ------------- ------------- -------------
4,496,324 (554,769) (3,521,982) (14,744,858)
- -------------- ------------- ------------- -------------
49,913,334 19,834,047 17,205,032 36,020,818
25,219,363 8,922,848 5,207,511 31,502,657
(5,920,710) (1,758,897) 0 (6,107,711)
980,166 1,627,435 411,407 9,217,756
- -------------- ------------- ------------- -------------
70,192,153 28,625,433 22,823,950 70,633,520
- -------------- ------------- ------------- -------------
74,688,477 28,070,664 19,301,968 55,888,662
- -------------- ------------- ------------- -------------
$ 76,649,061 $ 28,227,157 $ 18,871,018 $ 54,894,533
- -------------- ------------- ------------- -------------
$ 7,794 $ 3,388 $ 2,837 $ 7,512
</Table>
32 Wells Fargo Advantage WealthBuilder Portfolio Statements of Changes in Net Assets
<Table>
<Caption>
WEALTHBUILDER CONSERVATIVE
ALLOCATION PORTFOLIO
---------------------------------
For the
Six Months Ended For the
November 30, 2009 Year Ended
(Unaudited) May 31, 2009
----------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets ......................... $ 206,683,161 $ 134,803,634
OPERATIONS
Net investment income ........................ 2,645,386 5,434,870
Net realized gain (loss) on investments ...... 2,340,048 (14,103,703)
Net change in unrealized appreciation
(depreciation) of investments .............. 18,615,045 (1,070,195)
------------- -------------
Net increase (decrease) in net assets resulting
from operations ............................... 23,600,479 (9,739,028)
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income ........................ (2,716,089) (5,460,788)
Net realized gain on sales of investments .... 0 (394,567)
------------- -------------
Total distributions to shareholders ............. (2,716,089) (5,855,355)
------------- -------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold .................... 127,608,371 136,369,198
Reinvestment of distributions ................ 3,430,781 5,480,208
Cost of shares redeemed ...................... (27,791,793 (54,375,496)
------------- -------------
Net increase (decrease) in net assets resulting
from capital share transactions - Total ....... 103,247,359 87,473,910
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS ........... 124,131,749 71,879,527
============= =============
ENDING NET ASSETS ............................... $ 330,814,910 $ 206,683,161
============= =============
Ending balance of undistributed net investment
income .......................................... $ 50,474 $ 121,177
------------- -------------
SHARES ISSUED AND REDEEMED
Shares sold .................................. 13,078,094 14,637,742
Shares issued in reinvestment of
distributions .............................. 259,014 604,821
Shares redeemed .............................. (2,832,363) (5,875,847)
------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING
RESULTING FROM CAPITAL SHARE TRANSACTIONS ..... 10,504,745 9,366,716
============= =============
</Table>
The accompanying notes are an integral part of these financial statements.
Statements of Changes in Net Assets Wells Fargo Advantage WealthBuilder Portfolio 33
<Table>
<Caption>
WEALTHBUILDER MODERATE WEALTHBUILDER GROWTH
BALANCED PORTFOLIO BALANCED PORTFOLIO
- -------------------------------- ----------------------------------
For the For the
Six Months Ended For the Six Months Ended For the
November 30, 2009 Year Ended November 30, 2009 Year Ended
(Unaudited) May 31, 2009 (Unaudited) May 31, 2009
- ----------------- ------------ ----------------- --------------
$ 249,607,039 $245,103,519 $ 447,000,003 $ 693,612,176
2,221,804 6,050,238 1,960,584 9,393,038
2,413,217 (38,304,329) 4,496,324 (164,350,234)
32,098,960 (13,669,861) 70,192,153 (55,438,865)
-------------- ------------ ------------- --------------
36,733,981 (45,923,952) 76,649,061 (210,396,061)
-------------- ------------ ------------- --------------
(1,521,809) (6,246,323) 0 (10,804,296)
0 (3,981) 0 (4,387,695)
-------------- ------------ ------------- --------------
(1,521,809) (6,250,304) 0 (15,191,991)
-------------- ------------ ------------- --------------
118,955,993 122,077,923 79,233,825 107,771,609
1,459,901 5,973,045 0 14,746,532
(24,303,410) (71,373,192) (44,322,240) (143,542,262)
-------------- ------------ ------------- --------------
96,112,484 56,677,776 34,911,585 (21,024,121)
-------------- ------------ ------------- --------------
131,324,656 4,503,520 111,560,646 (246,612,173)
============== ============ ============= ==============
$ 380,931,695 $249,607,039 $ 558,560,649 $ 447,000,003
============== ============ ============= ==============
$ 1,353,688 $ 653,693 $ 3,165,394 $ 1,204,810
-------------- ------------ ------------- --------------
12,349,895 13,491,974 8,467,802 12,313,490
159,339 668,351 0 1,984,312
(2,530,299) (8,049,594) (4,886,611) (16,991,369)
-------------- ------------ ------------- --------------
9,978,935 6,110,731 3,581,191 (2,693,567)
============== ============ ============= ==============
</Table>
34 Wells Fargo Advantage WealthBuilder Portfolio Statements of Changes in Net Assets
<Table>
<Caption>
WEALTHBUILDER GROWTH
ALLOCATION PORTFOLIO
--------------------------------------
For the
Six Months Ended For the
November 30, 2009 Year Ended
(Unaudited) May 31, 2009
------------------ ---------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets...................................................................... $ 147,690,790 $ 207,241,321
OPERATIONS
Net investment income (loss).............................................................. 156,493 2,121,433
Net realized loss on investments.......................................................... (554,769) (56,705,428)
Net change in unrealized appreciation (depreciation) of investments....................... 28,625,433 (17,967,336)
------------- -------------
Net increase (decrease) in net assets resulting from operations.............................. 28,227,157 (72,551,331)
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income..................................................................... 0 (2,200,286)
Net realized gain on sales of investments................................................. 0 (1,433,788)
------------- -------------
Total distributions to shareholders.......................................................... 0 (3,634,074)
------------- -------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold................................................................. 37,501,007 51,903,014
Reinvestment of distributions............................................................. 0 3,547,704
Cost of shares redeemed................................................................... (13,249,666) (38,815,844)
------------- -------------
Net increase (decrease) in net assets resulting from capital share transactions - Total...... 24,251,341 16,634,874
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS........................................................ 52,478,498 (59,550,531)
============= =============
ENDING NET ASSETS............................................................................ $ 200,169,288 $ 147,690,790
============= =============
Ending balance of undistributed/overdistributed net investment income (loss)................. $ 278,465 $ 121,972
------------- -------------
SHARES ISSUED AND REDEEMED
Shares sold............................................................................... 4,203,050 6,127,060
Shares issued in reinvestment of distributions............................................ 0 501,222
Shares redeemed........................................................................... (1,516,262) (4,727,846)
------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS...... 2,686,788 1,900,436
------------- -------------
</Table>
The accompanying notes are an integral part of these financial statements.
Statements of Changes in Net Assets Wells Fargo Advantage WealthBuilder Portfolio 35
<Table>
<Caption>
WEALTHBUILDER TACTICAL
WEALTHBUILDER EQUITY PORTFOLIO EQUITY PORTFOLIO
- ------------------------------------- -----------------------------------------
For the For the
Six Months Ended For the Six Months Ended For the
November 30, 2009 Year Ended November 30, 2009 Year Ended
(Unaudited) May 31, 2009 (Unaudited) May 31, 2009
- ----------------- -------------- ------------------ ---------------
$ 104,334,418 $ 187,597,369 $ 304,769,871 $ 582,572,237
(430,950) (93,135) (994,129) (34,736)
(3,521,982) (41,059,697) (14,744,858) (182,825,141)
22,823,950 (22,488,116) 70,633,520 (36,464,620)
- ------------- -------------- -------------- --------------
18,871,018 (63,640,948) 54,894,533 (219,324,497)
- ------------- -------------- -------------- --------------
0 (75,536) 0 (371,084)
0 (5,596,941) 0 (22,001,119)
- ------------- -------------- -------------- --------------
0 (5,672,477) 0 (22,372,203)
- ------------- -------------- -------------- --------------
8,766,767 16,995,717 27,598,900 55,140,646
0 5,477,787 0 21,832,463
(8,724,073) (36,423,030) (30,255,074) (113,078,775)
- ------------- -------------- -------------- --------------
42,694 (13,949,526) (2,656,174) (36,105,666)
- ------------- -------------- -------------- --------------
18,913,712 (83,262,951) 52,238,359 (277,802,366)
============= ============== ============== ==============
$ 123,248,130 $ 104,334,418 $ 357,008,230 $ 304,769,871
============= ============== ============== ==============
$ (427,178) $ 3,772 $ (939,941) $ 54,188
- ------------- -------------- -------------- --------------
966,921 2,091,938 2,563,690 5,260,283
0 804,116 0 2,714,284
(1,016,330) (4,321,329) (2,964,521) (11,475,821)
- ------------- -------------- -------------- --------------
(49,409) (1,425,275) (400,831) (3,501,254)
- ------------- -------------- -------------- --------------
</Table>
36 Wells Fargo Advantage WealthBuilder Portfolio Financial Highlights
<Table>
<Caption>
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
--------- ------------- -------------- ------------- --------------
WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO
June 1, 2009 to November 30, 2009 (Unaudited)......... $ 9.38 0.10 0.79 (0.10) 0.00
June 1, 2008 to May 31, 2009.......................... $ 10.64 0.31 (1.23) (0.32) (0.02)
June 1, 2007 to May 31, 2008.......................... $ 10.84 0.33 (0.01) (0.32) (0.20)
June 1, 2006 to May 31, 2007.......................... $ 10.31 0.27 0.60 (0.28) (0.06)
June 1, 2005 to May 31, 2006.......................... $ 10.21 0.21 0.11 (0.21) (0.01)
September 30, 2004(5) to May 31, 2005................. $ 10.00 0.07 0.20 (0.06) 0.00
WEALTHBUILDER MODERATE BALANCED PORTFOLIO
June 1, 2009 to November 30, 2009 (Unaudited)......... $ 9.01 0.06 1.09 (0.05) 0.00
June 1, 2008 to May 31, 2009.......................... $ 11.35 0.24 (2.32) (0.26) 0.00(3)
June 1, 2007 to May 31, 2008.......................... $ 12.00 0.29 (0.30) (0.29) (0.35)
June 1, 2006 to May 31, 2007.......................... $ 10.95 0.21 1.15 (0.20) (0.11)
June 1, 2005 to May 31, 2006.......................... $ 10.42 0.14 0.54 (0.13) (0.02)
September 30, 2004(5) to May 31, 2005................. $ 10.00 0.04 0.40 (0.02) 0.00
WEALTHBUILDER GROWTH BALANCED PORTFOLIO
June 1, 2009 to November 30, 2009 (Unaudited)......... $ 8.30 0.04 1.39 0.00 0.00
June 1, 2008 to May 31, 2009.......................... $ 12.27 0.17 (3.86) (0.20) (0.08)
June 1, 2007 to May 31, 2008.......................... $ 13.85 0.27 (0.79) (0.25) (0.81)
June 1, 2006 to May 31, 2007.......................... $ 12.45 0.14 1.99 (0.13) (0.60)
June 1, 2005 to May 31, 2006.......................... $ 11.76 0.15 1.12 (0.14) (0.44)
June 1, 2004 to May 31, 2005.......................... $ 11.15 0.10 0.61 (0.10) 0.00
WEALTHBUILDER GROWTH ALLOCATION PORTFOLIO
June 1, 2009 to November 30, 2009 (Unaudited)......... $ 7.98 0.00 1.46 0.00 0.00
June 1, 2008 to May 31, 2009.......................... $ 12.47 0.12 (4.41) (0.12) (0.08)
June 1, 2007 to May 31, 2008.......................... $ 13.99 0.20 (0.99) (0.19) (0.54)
June 1, 2006 to May 31, 2007.......................... $ 11.93 0.08 2.23 (0.07) (0.18)
June 1, 2005 to May 31, 2006.......................... $ 10.70 0.02 1.30 (0.03) (0.06)
September 30, 2004(5) to May 31, 2005................. $ 10.00 0.00 0.73 (0.03) 0.00
WEALTHBUILDER EQUITY PORTFOLIO
June 1, 2009 to November 30, 2009 (Unaudited)......... $ 7.72 (0.02) 1.45 0.00 0.00
June 1, 2008 to May 31, 2009.......................... $ 12.55 (0.01) (4.39) (0.01) (0.42)
June 1, 2007 to May 31, 2008.......................... $ 15.11 0.11 (1.36) (0.10) (1.21)
June 1, 2006 to May 31, 2007.......................... $ 13.00 (0.02) 2.64 0.00 (0.51)
June 1, 2005 to May 31, 2006.......................... $ 11.44 (0.04) 1.60 0.00 0.00
June 1, 2004 to May 31, 2005.......................... $ 10.56 (0.06) 0.94 0.00 0.00
WEALTHBUILDER TACTICAL EQUITY PORTFOLIO
June 1, 2009 to November 30, 2009 (Unaudited)......... $ 9.13 (0.03) 1.72 0.00 0.00
June 1, 2008 to May 31, 2009.......................... $ 15.79 (0.01) (5.98) (0.01) (0.66)
June 1, 2007 to May 31, 2008.......................... $ 18.72 0.22 (1.49) (0.21) (1.45)
June 1, 2006 to May 31, 2007.......................... $ 15.48 0.02 3.54 0.00(3) (0.32)
June 1, 2005 to May 31, 2006.......................... $ 13.01 (0.04) 2.51 0.00 0.00
June 1, 2004 to May 31, 2005.......................... $ 11.84 (0.03) 1.32 0.00 0.00
- ----------
1. These ratios do not include expenses from the underlying funds.
2. Total return calculations do not include any sales charges, and would have
been lower had certain expenses not been waived or reimbursed during the
periods shown. Returns for periods less than one year are not annualized.
3. Amount calculated is less than $0.005.
4. Portfolio turnover rates presented for periods of less than one year are
not annualized.
5. Commencement of operations.
The accompanying notes are an integral part of these financial statements.
Financial Highlights Wells Fargo Advantage WealthBuilder Portfolio 37
<Table>
<Caption>
Ending Ratio to Average Net Assets (Annualized)
Distributions in Net Asset -------------------------------------------- Portfolio Net Assets at
Excess of Value Per Net Investment Gross Net Total Turnover End of Period
Net Investment Income Share Income (Loss) Expenses(1) Expenses(1) Return(2) Rate(4) (000's omitted)
- --------------------- --------- -------------- ----------- ----------- --------- --------- ---------------
0.00 $ 10.17 2.01% 1.56% 1.50% 9.54% 242% $ 330,815
0.00 $ 9.38 3.43% 1.56% 1.50% (8.47)% 153% $ 206,683
0.00 $ 10.64 3.06% 1.59% 1.50% 3.04% 135% $ 134,804
0.00 $ 10.84 2.67% 1.60% 1.50% 8.58% 190% $ 70,051
0.00 $ 10.31 2.30% 1.62% 1.50% 3.29% 163% $ 40,290
0.00 $ 10.21 1.64% 2.79% 1.50% 2.71% 9% $ 15,162
0.00 $ 10.11 1.43% 1.56% 1.50% 12.83% 190% $ 380,932
0.00 $ 9.01 2.76% 1.57% 1.50% (18.25)% 134% $ 249,607
0.00 $ 11.35 2.61% 1.57% 1.50% (0.14)% 109% $ 245,104
0.00 $ 12.00 2.00% 1.56% 1.50% 12.66% 149% $ 145,930
0.00 $ 10.95 1.60% 1.60% 1.50% 6.62% 152% $ 69,826
0.00 $ 10.42 0.85% 2.48% 1.50% 4.41% 16% $ 19,919
0.00 $ 9.73 0.78% 1.56% 1.50% 17.23% 149% $ 558,561
0.00 $ 8.30 1.95% 1.56% 1.50% (29.76)% 142% $ 447,000
0.00 $ 12.27 2.07% 1.57% 1.50% (4.00)% 104% $ 693,612
0.00 $ 13.85 1.18% 1.53% 1.50% 17.58% 143% $ 620,020
0.00 $ 12.45 1.13% 1.53% 1.50% 10.88% 139% $ 449,306
0.00 $ 11.76 0.90% 1.45% 1.41% 6.37% 98% $ 355,582
0.00 $ 9.44 0.18% 1.58% 1.50% 18.30% 104% $ 200,169
0.00 $ 7.98 1.42% 1.59% 1.50% (34.13)% 119% $ 147,691
0.00 $ 12.47 1.59% 1.58% 1.50% (5.84)% 76% $ 207,241
0.00 $ 13.99 0.64% 1.58% 1.50% 19.51% 95% $ 148,309
0.00 $ 11.93 0.08% 1.63% 1.50% 12.27% 108% $ 68,042
0.00 $ 10.70 (0.80)% 2.91% 1.50% 7.25% 28% $ 15,255
0.00 $ 9.15 (0.75)% 1.60% 1.50% 18.52% 32% $ 123,248
0.00 $ 7.72 (0.08)% 1.61% 1.50% (34.63)% 62% $ 104,334
0.00 $ 12.55 0.73% 1.59% 1.50% (8.75)% 37% $ 187,597
0.00 $ 15.11 (0.14)% 1.58% 1.50% 20.54% 43% $ 207,401
0.00 $ 13.00 (0.34)% 1.59% 1.50% 13.64% 70% $ 154,909
0.00 $ 11.44 (0.64)% 1.48% 1.42% 8.33% 92% $ 118,581
0.00 $ 10.82 (0.59)% 1.57% 1.50% 18.51% 73% $ 357,008
0.00 $ 9.13 (0.01)% 1.57% 1.50% (37.36)% 123% $ 304,770
0.00 $ 15.79 1.28% 1.57% 1.50% (7.31)% 47% $ 582,572
0.00 $ 18.72 0.08% 1.56% 1.50% 23.20% 50% $ 513,947
0.00 $ 15.48 (0.30)% 1.55% 1.50% 18.99% 76% $ 269,225
(0.12) $ 13.01 (0.50)% 1.47% 1.42% 10.89% 110% $ 165,325
</Table>
38 Wells Fargo Advantage WealthBuilder Portfolio Notes to Financial Statements
1. ORGANIZATION
Wells Fargo Funds Trust (the "Trust") is an open-end investment management
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). These financial statements report on the following funds: Wells
Fargo Advantage WealthBuilder Conservative Allocation Portfolio ("WealthBuilder
Conservative Allocation Portfolio"), Wells Fargo Advantage WealthBuilder
Moderate Balanced Portfolio ("WealthBuilder Moderate Balanced Portfolio"), Wells
Fargo Advantage WealthBuilder Growth Balanced Portfolio ("WealthBuilder Growth
Balanced Portfolio"), Wells Fargo Advantage WealthBuilder Growth Allocation
Portfolio ("WealthBuilder Growth Allocation Portfolio"), Wells Fargo Advantage
WealthBuilder Equity Portfolio ("WealthBuilder Equity Portfolio"), and Wells
Fargo Advantage WealthBuilder Tactical Equity Portfolio ("WealthBuilder Tactical
Equity Portfolio") (each, a "Fund", collectively, the "Funds"). Each Fund is a
diversified series of the Trust, a Delaware statutory trust organized on
November 8, 1999.
The Funds each seek to achieve their investment objectives by allocating their
assets across asset classes of stocks, bonds and money market instruments by
investing in a number of affiliated and non-affiliated funds ("Underlying
Funds"). The Underlying Funds incur separate expenses in seeking to achieve
their investment objectives. The investments in affiliated Underlying Funds may
also include investments in one or more separate diversified portfolios (each, a
"Master Portfolio", collectively, the "Master Portfolios") of Wells Fargo Master
Trust, a registered open-end investment management company. Each Master
Portfolio directly acquires portfolio securities, and a Fund investing in a
Master Portfolio acquires an indirect interest in those securities. Each Fund
accounts for its investment in the Master Portfolios as partnership investments
and records daily its share of the Master Portfolio's income, expense and
realized and unrealized gains and losses. The financial statements and financial
highlights for the Underlying Funds are presented in separate financial
statements and may be obtained from Wells Fargo Investor Services or from the
servicing agent of the non-affiliated funds.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed
in the preparation of the financial statements of each Fund, are in conformity
with U.S. Generally Accepted Accounting Principles ("GAAP") which 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. Management has considered the circumstances under which the Funds
should recognize or make disclosures regarding events or transactions occurring
subsequent to the balance sheet date through January 29, 2010 which represents
the date the financial statements are issued. Adjustments or additional
disclosures, if any, have been included in these financial statements.
SECURITIES VALUATION
Investments in underlying open-end mutual funds are valued at net asset value
per share as reported by the Underlying Funds as of the close of the regular
trading on the New York Stock Exchange on each day the exchange is open for
trading. Investments in the Master Portfolios are valued daily based on each
Fund's proportionate share of each Master Portfolio's net assets, which are also
valued daily.
Debt securities of sufficient credit quality with original maturities of 60 days
or less, generally are valued at amortized cost which approximates market value.
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 fair value.
Investments which are not valued using any of the methods discussed above, are
valued at their fair value, as determined by procedures established in good
faith and approved by the Board of Trustees.
The valuation techniques used by the Funds to measure fair value are consistent
with the market approach, income approach and/or cost approach, where
applicable, for each security type.
FUTURES CONTRACTS
Certain Funds may be subject to interest rate risk and/or equity price risk in
the normal course of pursuing its investment objectives. The Funds may buy and
sell futures contracts in order to gain exposure to, or protect against changes
in, security values and interest rates. The primary risks associated with the
use of futures contracts are the imperfect correlation between changes in market
values of securities held by the Fund and the prices of futures contracts, and
the possibility of an illiquid market.
Notes to Financial Statements Wells Fargo Advantage WealthBuilder Portfolio 39
Futures contracts are valued based upon their quoted daily settlement prices.
The aggregate principal amounts of the contracts are not recorded in the
financial statements. Fluctuations in the value of the contracts are recorded in
the Statement of Assets and Liabilities as an asset or liability and in the
Statement of Operations as unrealized gains or losses until the contracts are
closed, at which point they are recorded as net realized gains or losses on
futures contracts. With futures contracts, there is minimal counterparty risk to
the Fund since futures are exchange traded and the exchange's clearinghouse, as
counterparty to all exchange traded futures, guarantees the futures against
default.
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 based on the effective interest method. To the extent debt
obligations are placed on non-accrual status, any related interest income may be
reduced by writing off interest receivables when the collection of all or a
portion of interest has become doubtful based on consistently applied
procedures. If the issuer subsequently resumes interest payments or when the
collectability of interest is reasonably assured, the debt obligation is removed
from non-accrual status.
Income dividends and capital gain distributions from underlying funds are
recorded on the ex-dividend date. Each Fund records daily its proportionate
share of each Master Portfolio's interest and dividend income. Realized gains
and losses resulting from investment transactions are determined on the
identified cost basis.
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, if any, is declared and distributed to shareholders
annually. Distributions to shareholders from net realized capital gains, if any,
are declared and distributed at least annually.
Distributions are based on amounts calculated in accordance with the applicable
federal income tax regulations, which may differ from GAAP. The timing and
character of distributions made during the period from net investment income or
net realized gains may also differ from their ultimate characterization for
federal income tax purposes. To the extent that these differences are permanent
in nature, such amounts are reclassified within the capital accounts based on
their federal tax-basis treatment. Temporary differences do not require
reclassifications.
FEDERAL AND OTHER 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 distributing 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.
Each Fund's income and federal excise tax returns and all financial records
supporting those returns for the prior three fiscal years are subject to
examination by the federal and Delaware revenue authorities.
At May 31, 2009, the Funds' net capital loss carryforwards, which are available
to offset future net realized capital gains, were:
<Table>
<Caption>
Expiration Capital Loss
Year Carryforwards
---------- -------------
WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO 2017 3,040,712
WEALTHBUILDER MODERATE BALANCED PORTFOLIO 2017 11,827,450
WEALTHBUILDER GROWTH BALANCED PORTFOLIO 2017 44,040,467
WEALTHBUILDER GROWTH ALLOCATION PORTFOLIO 2017 14,320,404
WEALTHBUILDER EQUITY PORTFOLIO 2017 5,904,385
WEALTHBUILDER TACTICAL EQUITY PORTFOLIO 2017 63,879,487
</Table>
40 Wells Fargo Advantage WealthBuilder Portfolio Notes to Financial Statements
At May 31, 2009, current year deferred post-October losses, which will be
treated as realized for tax purposes on the first day of the succeeding year,
were:
<Table>
<Caption>
Deferred Post-October
Capital Loss
---------------------
WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO........................................................... $ 5,470,733
WEALTHBUILDER MODERATE BALANCED PORTFOLIO................................................................. 19,999,660
WEALTHBUILDER GROWTH BALANCED PORTFOLIO................................................................... 93,099,152
WEALTHBUILDER GROWTH ALLOCATION PORTFOLIO................................................................. 32,720,204
WEALTHBUILDER EQUITY PORTFOLIO............................................................................ 32,619,317
WEALTHBUILDER TACTICAL EQUITY PORTFOLIO................................................................... 111,010,683
</Table>
3. FAIR VALUATION MEASUREMENTS
Fair value measurements of investments are determined within a framework that
has established a fair value hierarchy based upon the various data inputs
utilized in determining the value of the Fund's investments. These inputs are
summarized into three broad levels as follows:
- - Level 1 - quoted prices in active markets for identical investments
- - Level 2 - other significant observable inputs (including quoted prices for
similar investments, interest rates, prepayment speeds, credit risk, etc.)
- - Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in these securities.
The following is a summary of the inputs used as of November 30, 2009 in valuing
the Funds' investments in securities:
<Table>
<Caption>
Significant Other Significant
Observable Unobservable
Quoted Prices Inputs Inputs Total Fair Value as of
INVESTMENTS IN SECURITIES (Level 1) (Level 2) (Level 3) 11/30/2009
- ----------------------------------------------- ------------- ----------------- ------------- ----------------------
WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO
EQUITY SECURITIES
INVESTMENT COMPANIES $ 244,031,877 $ 75,915,902 $ 0 $ 319,947,779
DEBT SECURITIES ISSUED BY US TREASURY AND
US GOVERNMENT AGENCIES 0 1,804,019 0 1,804,019
SHORT-TERM INVESTMENTS 4,234,595 0 0 4,234,595
------------- ------------ --- -------------
$ 248,266,472 $ 77,719,921 $ 0 $ 325,986,393
------------- ------------ --- -------------
WEALTHBUILDER MODERATE BALANCED PORTFOLIO
EQUITY SECURITIES
INVESTMENT COMPANIES $ 280,826,134 $ 87,842,821 $ 0 $ 368,668,955
DEBT SECURITIES ISSUED BY US TREASURY AND
US GOVERNMENT AGENCIES 0 4,177,663 0 4,177,663
SHORT-TERM INVESTMENTS 4,681,074 0 0 4,681,074
------------- ------------ --- -------------
$ 285,507,208 $ 92,020,484 $ 0 $ 377,527,692
------------- ------------ --- -------------
</Table>
Notes to Financial Statements Wells Fargo Advantage WealthBuilder Portfolio 41
<Table>
<Caption>
Significant Other Significant
Observable Unobservable
Quoted Prices Inputs Inputs Total Fair Value as of
INVESTMENTS IN SECURITIES (Level 1) (Level 2) (Level 3) 11/30/2009
- ---------------------------------------------- ------------- ----------------- ------------- -----------------------
WEALTHBUILDER GROWTH BALANCED PORTFOLIO
EQUITY SECURITIES
INVESTMENT COMPANIES $ 399,823,668 $ 145,788,959 $ 0 $ 545,612,627
DEBT SECURITIES ISSUED BY US TREASURY AND
US GOVERNMENT AGENCIES 0 8,670,480 0 8,670,480
SHORT-TERM INVESTMENTS 773,092 0 0 773,092
------------- ------------- --- --------------
$ 400,596,760 $ 154,459,439 $ 0 $ 555,056,199
------------- ------------- --- --------------
WEALTHBUILDER GROWTH ALLOCATION PORTFOLIO
EQUITY SECURITIES
INVESTMENT COMPANIES $ 144,935,258 $ 49,682,005 $ 0 $ 194,617,263
DEBT SECURITIES ISSUED BY US TREASURY AND
US GOVERNMENT AGENCIES 0 3,348,122 0 3,348,122
SHORT-TERM INVESTMENTS 346,114 0 0 346,114
------------- ------------- --- --------------
$ 145,281,372 $ 53,030,127 $ 0 $ 198,311,499
------------- ------------- --- --------------
WEALTHBUILDER EQUITY PORTFOLIO
EQUITY SECURITIES
INVESTMENT COMPANIES $ 91,785,388 $ 30,532,121 $ 0 $ 122,317,509
SHORT-TERM INVESTMENTS 98,851 0 0 98,851
------------- ------------- --- --------------
$ 91,884,239 $ 30,532,121 $ 0 $ 122,416,360
------------- ------------- --- --------------
WEALTHBUILDER TACTICAL EQUITY PORTFOLIO
EQUITY SECURITIES
INVESTMENT COMPANIES $ 236,261,557 $ 100,784,250 $ 0 $ 337,045,807
DEBT SECURITIES ISSUED BY US TREASURY AND
US GOVERNMENT AGENCIES 0 15,312,958 0 15,312,958
SHORT-TERM INVESTMENTS 1,192,400 0 0 1,192,400
------------- ------------- --- --------------
$ 237,453,957 $ 116,097,208 $ 0 $ 353,551,165
------------- ------------- --- --------------
</Table>
Further details on the major security types listed above can be found in the
Portfolio of Investments.
As of November 30, 2009, the inputs used in valuing the Funds' other financial
instruments*, which are carried at fair value, were as follows:
<Table>
<Caption>
Significant Other Significant
Observable Unobservable
Quoted Prices Inputs Inputs
(Level 1) (Level 2) (Level 3) Total
- --------------------------------------------------- ------------- ----------------- ------------- -----------------------
WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO.... $ 705,822 $ 0 $ 0 $ 705,822
WEALTHBUILDER MODERATE BALANCED PORTFOLIO.......... 1,669,648 0 0 1,669,648
WEALTHBUILDER GROWTH BALANCED PORTFOLIO............ 4,212,479 0 0 4,212,479
WEALTHBUILDER GROWTH ALLOCATION PORTFOLIO.......... 1,401,560 0 0 1,401,560
WEALTHBUILDER TACTICAL EQUITY PORTFOLIO............ (6,107,711) 0 0 (6,107,711)
</Table>
- ----------
* Other financial instruments include futures transactions.
<Table>
42 Wells Fargo Advantage WealthBuilder Portfolio Notes to Financial Statements
</Table>
4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES
ADVISORY FEES
The Trust has entered into an advisory contract with Wells Fargo Funds
Management, LLC ("Funds Management"). The adviser is responsible for
implementing investment policies and guidelines and for supervising the
sub-adviser, who is responsible for day-to-day portfolio management.
Pursuant to the contract, Funds Management is entitled to receive an advisory
fee for its services as adviser at the following annual rates:
<Table>
<Caption>
Advisory Fees
Average Daily (% of Average
Net Assets Daily Net Assets)
----------------- ----------------
ALL FUNDS First $1 billion 0.200
Next $4 billion 0.175
Over $5 billion 0.150
</Table>
Funds Management may retain the services of certain investment sub-advisers to
provide daily portfolio management. The fees related to sub-advisory services
are borne directly by the adviser and do not increase the overall fees paid by a
Fund to the adviser.
Funds Management also serves as the advisor to, and is entitled to receive a fee
from each Master Portfolio and affiliated Underlying Fund.
Wells Capital Management Incorporated, an affiliate of Funds Management and
indirect wholly owned subsidiary of Wells Fargo & Company, is the sub-adviser to
the Funds.
ADMINISTRATION AND TRANSFER AGENT FEES
The Trust has entered into an Administration Agreement with Funds Management.
Under this Agreement, for providing administrative services, which includes
paying fees and expenses for services provided by the transfer agent,
sub-transfer agents, omnibus account servicers and record-keepers, Funds
Management is entitled to receive from each Fund the following annual fees:
<Table>
<Caption>
Administration Fees
Average Daily (% of Average
Net Assets Daily Net Assets)
----------------- --------------------
ALL FUNDS First $5 billion 0.33
Next $5 billion 0.32
Over $10 billion 0.31
</Table>
Funds Management has contractually waived advisory and administration fees
during the six months ended November 30, 2009 to the extent necessary to
maintain net operating expense ratios for the Funds.
DISTRIBUTION FEES
The Trust has adopted a Distribution Plan for Class B and Class C shares of the
applicable Funds pursuant to Rule 12b-1 under the 1940 Act. Distribution fees
are charged and paid to Wells Fargo Funds Distributor, LLC, the principal
underwriter of each Fund, at an annual rate of 0.75% of the average daily net
assets of each class.
SHAREHOLDER SERVICING FEES
The Trust has entered into contracts with one or more shareholder servicing
agents, whereby each applicable Fund is charged a fee at an annual rate of 0.25%
of the average daily net assets of each respective class.
A portion of these total shareholder servicing fees were paid to affiliates of
Wells Fargo & Company.
Notes to Financial Statements Wells Fargo Advantage WealthBuilder Portfolio 43
5. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, exclusive of short-term securities
(securities with maturities of one year or less at purchase date and U.S.
Government Obligations) for the six months ended November 30, 2009, were as
follows:
Purchases at Cost Sales Proceeds
----------------- --------------
WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO** $ 80,822,417 $ 5,724,347
WEALTHBUILDER MODERATE BALANCED PORTFOLIO** 85,868,061 13,753,760
WEALTHBUILDER GROWTH BALANCED PORTFOLIO** 81,629,124 49,886,428
WEALTHBUILDER GROWTH ALLOCATION PORTFOLIO** 36,542,139 17,316,597
WEALTHBUILDER EQUITY PORTFOLIO** 10,310,502 10,618,582
WEALTHBUILDER TACTICAL EQUITY PORTFOLIO** 125,967,558 130,141,929
** The Fund seeks to achieve its investment objective by investing some or all
of its investable assets in one or more Master Portfolios. Purchases and
sales related to these investments have been calculated by aggregating the
results of multiplying such Fund's ownership percentage of the respective
Master Portfolio by the corresponding Master Portfolio's purchases and
sales.
6. DERIVATIVE TRANSACTIONS
During the six months ended November 30, 2009, the Funds entered into futures
contracts for purpose of implementing tactical shifts based on quantitative
models.
At November 30, 2009, the following Funds had long futures contracts outstanding
as follows:
Initial Value at Net Unrealized
Expiration Contract November 30, Appreciation/
Date Contracts Type Amount 2009 (Depreciation)
---------- --------- ------------------ ------------ ------------ ------------------
WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO Dec 2009 57 Long S&P 500 Index $ 14,659,596 $ 15,600,900 $ 941,304
WEALTHBUILDER MODERATE BALANCED PORTFOLIO Dec 2009 132 Long S&P 500 Index 33,910,307 36,128,400 2,218,093
WEALTHBUILDER GROWTH BALANCED PORTFOLIO Dec 2009 305 Long S&P 500 Index 78,045,754 83,478,500 5,432,746
WEALTHBUILDER GROWTH ALLOCATION PORTFOLIO Dec 2009 106 Long S&P 500 Index 27,165,467 29,012,200 1,846,733
WEALTHBUILDER TACTICAL EQUITY PORTFOLIO Dec 2009 979 Long Russell 2000 Index 57,756,216 56,703,680 (1,052,536)
Dec 2009 979 Long MSCI EAFE Index 75,550,900 76,459,900 909,000
At November 30, 2009, the following Funds had short futures contracts
outstanding as follows:
Initial Value at Net Unrealized
Expiration Contract November 30, Appreciation/
Date Contracts Type Amount 2009 (Depreciation)
---------- --------- ----------------- -------------- -------------- --------------
WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIO Mar 2010 134 Short US Treasury Bond $ (16,208,830) $ (16,444,312) $ (235,482)
WEALTHBUILDER MODERATE BALANCED PORTFOLIO Mar 2010 311 Short US Treasury Bond (37,617,086) (38,165,531) (548,445)
WEALTHBUILDER GROWTH BALANCED PORTFOLIO Mar 2010 674 Short US Treasury Bond (81,492,170) (82,712,437) (1,220,267)
WEALTHBUILDER GROWTH ALLOCATION PORTFOLIO Mar 2010 248 Short US Treasury Bond (29,989,077) (30,434,250) (445,173)
WEALTHBUILDER TACTICAL EQUITY PORTFOLIO Dec 2009 426 Short S&P 500 Index (110,632,025) (116,596,200) (5,964,175)
The WealthBuilder Conservative Allocation Portfolio, WealthBuilder Moderate
Balanced Portfolio, WealthBuilder Growth Balanced Portfolio, WealthBuilder
Growth Allocation Portfolio, and WealthBuilder Tactical Equity Portfolio had
average contract amounts of $24,098,954, $57,299,917, $144,830,868, $48,561,526,
and $236,919,318, respectively in futures contracts during the six months ended
November 30, 2009.
A summary of derivative instruments by primary risk exposure is outlined in the
following tables.
44 Wells Fargo Advantage WealthBuilder Portfolio Notes to Financial Statements
The fair value of derivative instruments as of November 30, 2009 was as follows
for the WealthBuilder Conservative Allocation Portfolio:
Asset Derivatives Liability Derivatives
DERIVATIVES NOT ACCOUNTED ---------------------------------------- ----------------------------------------
FOR AS HEDGING INSTRUMENTS Balance Sheet Location Fair value Balance Sheet Location Fair value
- -------------------------- --------------------------- ---------- --------------------------- ----------
Equity contracts Net Assets - Net unrealized
appreciation of futures $ 941,304*
Interest rate contracts Net Assets - Net unrealized
depreciation of futures $ 235,482*
* Represents cumulative unrealized appreciation (depreciation) on futures
contracts. The variation margin only shows the one day change in
unrealized appreciation (depreciation) on the futures contracts.
The effect of derivative instruments on the Statement of Operations for the six
months ended November 30, 2009 was as follows for the WealthBuilder Conservative
Allocation Portfolio:
Amount of Realized Gain or Change in Unrealized Gains or
DERIVATIVES NOT ACCOUNTED Loss on Derivatives Losses on Derivatives
FOR AS HEDGING INSTRUMENTS Futures Futures
- -------------------------- -------------------------- -----------------------------
Equity contracts $ 3,126,603 $ (818,295)
Interest rate contracts (756,071) (31,703)
----------- ----------
$ 2,370,532 $ (849,998)
----------- ----------
The fair value of derivative instruments as of November 30, 2009 was as follows
for the WealthBuilder Moderate Balanced Portfolio:
Asset Derivatives Liability Derivatives
DERIVATIVES NOT ACCOUNTED ----------------------------------------- ----------------------------------------
FOR AS HEDGING INSTRUMENTS Balance Sheet Location Fair value Balance Sheet Location Fair value
- -------------------------- --------------------------- ----------- --------------------------- ----------
Equity contracts Net Assets - Net unrealized
appreciation of futures $ 2,218,093*
Interest rate contracts Net Assets - Net unrealized
depreciation of futures $ 548,445*
* Represents cumulative unrealized appreciation (depreciation) on futures
contracts. The variation margin only shows the one day change in
unrealized appreciation (depreciation) on the futures contracts.
The effect of derivative instruments on the Statement of Operations for the six
months ended November 30, 2009 was as follows for the WealthBuilder Moderate
Balanced Portfolio:
Amount of Realized Gain or Change in Unrealized Gains or
DERIVATIVES NOT ACCOUNTED Loss on Derivatives Losses on Derivatives
FOR AS HEDGING INSTRUMENTS Futures Futures
- -------------------------- -------------------------- ------------------------------
Equity contracts $ 7,382,382 $ (1,902,898)
Interest rate contracts (1,798,944) (59,722)
----------- ------------
$ 5,583,438 $ (1,962,620)
----------- ------------
The fair value of derivative instruments as of November 30, 2009 was as follows
for the WealthBuilder Growth Balanced Portfolio:
Asset Derivatives Liability Derivatives
DERIVATIVES NOT ACCOUNTED ----------------------------------------- -----------------------------------------
FOR AS HEDGING INSTRUMENTS Balance Sheet Location Fair value Balance Sheet Location Fair value
- -------------------------- --------------------------- ----------- --------------------------- -----------
Equity contracts Net Assets - Net unrealized
appreciation of futures $ 5,432,746*
Interest rate contracts Net Assets - Net unrealized
depreciation of futures $ 1,220,267*
* Represents cumulative unrealized appreciation (depreciation) on futures
contracts. The variation margin only shows the one day change in
unrealized appreciation (depreciation) on the futures contracts.
Notes to Financial Statements Wells Fargo Advantage WealthBuilder Portfolio 45
The effect of derivative instruments on the Statement of Operations for the six
months ended November 30, 2009 was as follows for the WealthBuilder Growth
Balanced Portfolio:
Amount of Realized Gain or Change in Unrealized Gains or
DERIVATIVES NOT ACCOUNTED Loss on Derivatives Losses on Derivatives
FOR AS HEDGING INSTRUMENTS Futures Futures
- -------------------------- --------------------------- -----------------------------
Equity contracts $ 19,613,096 $ (6,012,891)
Interest rate contracts (4,675,505) 92,181
------------ ------------
$ 14,937,591 $ (5,920,710)
------------ ------------
The fair value of derivative instruments as of November 30, 2009 was as follows
for the WealthBuilder Growth Allocation Portfolio:
Asset Derivatives Liability Derivatives
DERIVATIVES NOT ACCOUNTED ----------------------------------------- -----------------------------------------
FOR AS HEDGING INSTRUMENTS Balance Sheet Location Fair value Balance Sheet Location Fair value
- -------------------------- --------------------------- ----------- --------------------------- -----------
Equity contracts Net Assets - Net unrealized
appreciation of futures $ 1,846,733*
Interest rate contracts Net Assets - Net unrealized
depreciation of futures $ 445,173*
* Represents cumulative unrealized appreciation (depreciation) on futures
contracts. The variation margin only shows the one day change in unrealized
appreciation (depreciation) on the futures contracts.
The effect of derivative instruments on the Statement of Operations for the six
months ended November 30, 2009 was as follows for the WealthBuilder Growth
Allocation Portfolio:
Amount of Realized Gain or Change in Unrealized Gains or
DERIVATIVES NOT ACCOUNTED Loss on Derivatives Losses on Derivatives
FOR AS HEDGING INSTRUMENTS Futures Futures
- -------------------------- --------------------------- -----------------------------
Equity contracts $ 6,240,754 $ (1,740,317)
Interest rate contracts (1,560,252) (18,580)
------------ -------------
$ 4,680,502 $ (1,758,897)
------------ -------------
During the six months ended November 30, 2009, WealthBuilder Tactical Equity
Portfolio invested in futures with only one type of risk exposure. The fair
value, realized gains or losses and change in unrealized gains or losses on
derivative instruments are reflected in the appropriate financial statements.
7. BANK BORROWINGS
The Trust and Wells Fargo Variable Trust (excluding the money market funds) are
parties to a $125,000,000 revolving credit agreement with State Street Bank and
Trust Company, whereby the Funds are permitted to use bank borrowings for
temporary or emergency purposes, such as to fund shareholder redemption
requests. Pursuant to the agreement entered into on September 8, 2009, interest
under the credit agreement is charged to each Fund based on a borrowing rate
equal to the higher of the Federal Funds rate in effect on that day plus 1.25%
or the overnight LIBOR rate in effect on that day plus 1.25%. In addition, under
the credit agreement, the Funds pay an annual commitment fee equal to 0.15% of
the unused balance, which is allocated pro rata. Prior to September 8, 2009, the
Funds participated in a $150,000,000 revolving credit agreement with the Bank of
New York Mellon and paid interest at a rate equal to the Federal Funds rate plus
0.60% and an annual commitment fee equal to 0.15% of the unused balance, which
was allocated on a pro rata basis.
For the six months ended November 30, 2009, there were no borrowings by any
Funds under the agreement.
8. INDEMNIFICATION
Under the Trust's organizational documents, the 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.
46 Wells Fargo Advantage WealthBuilder Portfolio Other Information
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.
PORTFOLIO HOLDINGS INFORMATION
The complete portfolio holdings for each Fund, except money market funds, are
publicly available on the Funds' Web site (WWW.WELLSFARGO.COM/ADVANTAGEFUNDS) on
a monthly, 30-day or more delayed basis, and for money market funds, on a
monthly, seven-day 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") and Officers of the
Trust. This table should be read in conjunction with the Prospectus and the
Statement of Additional Information(1) of each Fund. Each of the Trustees and
Officers listed below acts in identical capacities for each of the 133 funds
comprising the Trust, Wells Fargo Variable Trust and Wells Fargo Master Trust
(collectively the "Fund Complex"), except that the person occupying the office
of Treasurer varies for specified Funds. All of the Trustees are also Members of
the Audit and Governance Committees of each Trust in the Fund Complex. The
mailing 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.
INDEPENDENT TRUSTEES
Position Held and
Name and Age Length of Service(2) Principal Occupations During Past Five Years Other Directorships
- ------------------ ------------------------- ------------------------------------------------------------- --------------------
Peter G. Gordon Trustee, since 1998; Co-Founder, Chairman, President and CEO of Crystal Geyser. None
67 Chairman, since 2005 Water Company.
(Lead Trustee since 2001)
Isaiah Harris, Jr. Advisory Board Retired. Prior thereto, President and CEO of BellSouth CIGNA Corporation;
56 Trustee, since 2008 Advertising and Publishing Corp from 2005 to 2007, President Deluxe Corporation
and CEO of BellSouth Enterprises from 2004 to 2005 and
President of BellSouth Consumer Services from 2000 to 2003.
Currently a member of the Iowa State University Foundation
Board of Governors and a member of the Advisory Board of
Iowa State University School of Business.
Judith M. Johnson Trustee, since 2008 Retired. Prior thereto, Chief Executive Officer and Chief None
60 Investment Officer of Minneapolis Employees Retirement
Fund from 1996 to 2008. Ms. Johnson is a certified public
accountant and a certified managerial accountant.
David F. Larcker Advisory Board James Irvin Miller Professor of Accounting at the Graduate None
59 Trustee, since 2008 School of Business, Stanford University, Director of
Corporate Governance Research Program and Co-Director of
The Rock Center for Corporate Governance since 2006. From
2005 to 2008, Professor of Accounting at the Graduate School
of Business, Stanford University. Prior thereto, Ernst &
Young Professor of Accounting at The Wharton School,
University of Pennsylvania from 1985 to 2005.
Other Information Wells Fargo Advantage WealthBuilder Portfolio 47
Position Held and
Name and Age Length of Service(2) Principal Occupations During Past Five Years Other Directorships
- ------------------ --------------------------------------------------------------------------------------- --------------------
Olivia S. Mitchell Trustee, since 2006 Professor of Insurance and Risk Management, Wharton School, None
56 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 President and CEO of Southern Minnesota Initiative Foundation, a None
57 non-profit organization, since 2007 and Senior Fellow at the
Humphrey Institute Policy Forum at the University of Minnesota
since 1995. Member of the Board of Trustees of NorthStar
Education Finance, Inc., a non-profit organization, since 2007.
Donald C. Willeke Trustee, since 1996 Principal of the law firm of Willeke & Daniels. General Counsel None
69 of the Minneapolis Employees Retirement Fund from 1984 to
present.
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
50 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 Funds None
49 Chief Legal Counsel, Management, LLC since 2001. Vice President and Managing
since 2003 Senior Counsel of Wells Fargo Bank, N.A. since 1996.
Kasey Phillips(3) Treasurer, since 2009 Senior Vice President of Evergreen Investment Management None
38 Company, LLC since 2006 and currently the Treasurer of
the Evergreen Funds since 2005. Vice President
and Assistant Vice President of Evergreen Investment
Services, Inc. from 1999 to 2006.
David Berardi(4) Assistant Treasurer, Vice President of Evergreen Investment Management Company, None
34 since 2009 LLC since 2008. Assistant Vice President of Evergreen
Investment Services, Inc. from 2004 to 2008. Manager of
Fund Reporting and Control for Evergreen Investment
Management Company, LLC since 2004.
Jeremy DePalma(4) Assistant Treasurer, Senior Vice President of Evergreen Investment Management None
35 since 2009 Company, LLC since 2008. Vice President, Evergreen
Investment Services, Inc. from 2004 to 2007. Assistant Vice
President, Evergreen Investment Services, Inc. from 2000 to
2004 and the head of the Fund Reporting and Control Team
within Fund Administration since 2005.
Debra Ann Early Chief Compliance Officer, Chief Compliance Officer of Wells Fargo Funds Management, None
45 since 2007 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. Effective November 1, 2009.
4. Treasurer during the period from June 1, 2009 to October 31, 2009.
48 Wells Fargo Advantage WealthBuilder Portfolio List of Abbreviations
The following is a list of common abbreviations for terms and entities which may
have appeared in this report.
ABAG -- Association of Bay Area Governments
ADR -- American Depositary Receipt
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Alternative Minimum Tax
ARM -- Adjustable Rate Mortgages
BART -- Bay Area Rapid Transit
CDA -- Community Development Authority
CDO -- Collateralized Debt Obligation
CDSC -- Contingent Deferred Sales Charge
CGIC -- Capital Guaranty Insurance Company
CGY -- Capital Guaranty Corporation
CIFG -- CDC (Caisse des Depots et Consignations) IXIS Financial Guarantee
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
ETF -- Exchange-Traded Fund
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
FSA -- Farm Service Agency
GDR -- Global Depositary Receipt
GNMA -- Government National Mortgage Association
GO -- General Obligation
HCFR -- Healthcare Facilities Revenue
HEFA -- Health & Educational Facilities Authority
HEFAR -- Higher Education Facilities Authority Revenue
HFA -- Housing Finance Authority
HFFA -- Health Facilities Financing Authority
HUD -- Housing & Urban Development
IDA -- Industrial Development Authority
IDAG -- Industrial Development Agency
IDR -- Industrial Development Revenue
LIBOR -- London Interbank Offered Rate
LLC -- Limited Liability Company
LOC -- Letter of Credit
LP -- Limited Partnership
MBIA -- Municipal Bond Insurance Association
MFHR -- Multi-Family Housing Revenue
MMD -- Municipal Market Data
MTN -- Medium Term Note
MUD -- Municipal Utility District
NATL-RE -- National Public Finance Guarantee Corporation
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
SPDR -- Standard & Poor's Depositary Receipts
STIT -- Short-Term Investment Trust
TBA -- To Be Announced
TRAN -- Tax Revenue Anticipation Notes
USD -- Unified School District
XLCA -- XL Capital Assurance
THIS PAGE IS INTENTIONALLY LEFT BLANK.
THIS PAGE IS INTENTIONALLY LEFT BLANK.
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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 Barclays Capital Bond Indexes,
which are published by Barclays Capital 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 Barclays Capital, and
neither Dow Jones nor Barclays Capital 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 Barclays Capital
Bond Indexes. IN NO EVENT SHALL DOW JONES, BARCLAYS CAPITAL 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.
Source: MSCI. MSCI makes no express or implied warranties or representations and
shall have no liability whatsoever with respect to any MSCI data contained
herein. The MSCI data may not be further redistributed or used as a basis for
other indices or any securities or financial products. This report is not
approved, reviewed or produced by MSCI.
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 - NO BANK GUARANTEE - MAY LOSE VALUE (LOGO)
Printed on Recycled paper
(C)2010 Wells Fargo Funds Management, LLC. All rights reserved. www.wellsfargo.com/advantagefunds 119291 01-10
SWBP/SAR102 11-09
(GRAPHIC)
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Sign up for electronic delivery of prospectuses and shareholder reports at
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(WELLS FARGO ADVANTAGE FUNDS LOGO)
Semi-Annual Report
November 30, 2009
WELLS FARGO ADVANTAGE INCOME FUNDS
- - WELLS FARGO ADVANTAGE DIVERSIFIED BOND FUND
- - WELLS FARGO ADVANTAGE INCOME PLUS FUND
- - WELLS FARGO ADVANTAGE INFLATION-PROTECTED BOND FUND
- - WELLS FARGO ADVANTAGE SHORT DURATION GOVERNMENT BOND FUND
- - WELLS FARGO ADVANTAGE STABLE INCOME FUND
- - WELLS FARGO ADVANTAGE STRATEGIC INCOME FUND
- - WELLS FARGO ADVANTAGE TOTAL RETURN BOND FUND
REDUCE CLUTTER. SAVE TREES.
Sign up for electronic delivery of prospectuses and shareholder reports at
www.wellsfargo.com/advantagedelivery
Contents
LETTER TO SHAREHOLDERS .................................................. 2
PERFORMANCE HIGHLIGHTS
Diversified Bond Fund ................................................... 6
Income Plus Fund ........................................................ 8
Inflation-Protected Bond Fund ........................................... 10
Short Duration Government Bond Fund ..................................... 12
Stable Income Fund ...................................................... 14
Strategic Income Fund ................................................... 16
Total Return Bond Fund .................................................. 18
FUND EXPENSES ........................................................... 20
PORTFOLIO OF INVESTMENTS
Diversified Bond Fund ................................................... 23
Income Plus Fund ........................................................ 24
Inflation-Protected Bond Fund ........................................... 33
Short Duration Government Bond Fund ..................................... 34
Stable Income Fund ...................................................... 39
Strategic Income Fund ................................................... 40
Total Return Bond Fund .................................................. 48
FINANCIAL STATEMENTS
Statements of Assets and Liabilities .................................... 50
Statements of Operations ................................................ 52
Statements of Changes in Net Assets ..................................... 54
Financial Highlights .................................................... 62
NOTES TO FINANCIAL STATEMENTS ........................................... 70
MASTER PORTFOLIOS
PORTFOLIO OF INVESTMENTS
Inflation-Protected Bond Portfolio ...................................... 81
Managed Fixed Income Portfolio .......................................... 85
Stable Income Portfolio ................................................. 95
Total Return Bond Portfolio ............................................. 103
FINANCIAL STATEMENTS
Statements of Assets and Liabilities .................................... 117
Statements of Operations ................................................ 118
Statements of Changes in Net Assets ..................................... 120
Financial Highlights .................................................... 122
NOTES TO FINANCIAL STATEMENTS ........................................... 123
OTHER INFORMATION ....................................................... 133
LIST OF ABBREVIATIONS ................................................... 135
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
(GRAPHIC)
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 110 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)
WELLS FARGO ADVANTAGE FUNDS skillfully guides institutions, financial advisors,
and individuals through the investment terrain to help them reach their
financial objectives. Everything we do on behalf of our investors is backed by
our unique combination of qualifications.
STRENGTH
Our organization is built on the standards of integrity and service established
by our parent company--Wells Fargo & Company--more than 150 years ago. Our
diverse family of mutual funds covers a broad spectrum of investment styles and
asset classes. And, because we're part of a widely diversified financial
enterprise, we offer the scale and resources to help investors succeed,
providing access to complementary solutions such as separately managed accounts,
college investing plans, and retirement plans.
EXPERTISE
Our approach to investing is guided by the belief that agile, independent
investment teams--each with its own distinct strengths and disciplines--provide
a superior level of insight and expertise. Each team is free to concentrate on
managing money through well-defined philosophies and processes that have proven
to be consistent and repeatable over time.
PARTNERSHIP
Our collaborative approach is built around understanding the needs and goals of
our clients. By adhering to core principles of sound judgment and steady
guidance, we support you through every stage of the investment decision process.
- ----------
FOR 529 PLANS, AN INVESTOR'S OR A DESIGNATED BENEFICIARY'S HOME STATE MAY OFFER
STATE TAX OR OTHER BENEFITS THAT ARE ONLY AVAILABLE FOR INVESTMENTS IN THAT
STATE'S QUALIFIED TUITION PROGRAM. PLEASE CONSIDER THIS BEFORE INVESTING.
CAREFULLY CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES
BEFORE INVESTING. FOR A CURRENT PROSPECTUS FOR WELLS FARGO ADVANTAGE FUNDS OR A
CURRENT PROGRAM DESCRIPTION FOR CERTAIN 529 COLLEGE SAVINGS PLANS, CONTAINING
THIS AND OTHER INFORMATION, VISIT www.wellsfargo.com/advantagefunds. READ IT
CAREFULLY BEFORE INVESTING.
WELLS FARGO FUNDS MANAGEMENT, LLC, A WHOLLY OWNED SUBSIDIARY OF WELLS FARGO &
COMPANY, PROVIDES INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES FOR WELLS
FARGO MANAGED ACCOUNT SERVICES AND WELLS FARGO ADVANTAGE FUNDS(R) AND TO CERTAIN
529 COLLEGE SAVINGS PLANS. OTHER AFFILIATES OF WELLS FARGO & COMPANY PROVIDE
SUBADVISORY AND OTHER SERVICES FOR THE FUNDS. THE FUNDS AND SHARES IN THE 529
PLANS ARE DISTRIBUTED BY WELLS FARGO FUNDS DISTRIBUTOR, LLC, MEMBER FINRA/SIPC,
AN AFFILIATE OF WELLS FARGO & COMPANY.
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
NOT PART OF THE SEMI-ANNUAL REPORT.
WELLS FARGO ADVANTAGE FUNDS OFFERS MORE THAN 110 MUTUAL FUNDS ACROSS A WIDE
RANGE OF ASSET CLASSES, REPRESENTING OVER $170 BILLION IN ASSETS UNDER
MANAGEMENT, AS OF NOVEMBER 30, 2009.
EQUITY FUNDS
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
Emerging Growth Fund
Emerging Markets Equity Fund
Endeavor Select Fund+
Enterprise Fund+
Equity Income Fund
Equity Value 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
Large Company Value Fund
Mid Cap Disciplined Fund
Mid Cap Growth Fund
Opportunity 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
Social Sustainability Fund+
Specialized Financial Services Fund
Specialized Technology Fund
U.S. Value Fund
BOND FUNDS
California Limited-Term Tax-Free Fund
California Tax-Free Fund
Colorado Tax-Free Fund
Diversified Bond Fund
Government Securities Fund(1)
High Income Fund
Income Plus Fund
Inflation-Protected Bond Fund
Intermediate Tax/AMT-Free Fund
Minnesota Tax-Free Fund
Municipal Bond 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
Wisconsin Tax-Free Fund
ASSET ALLOCATION FUNDS
Aggressive Allocation Fund
Asset Allocation Fund
Conservative Allocation Fund
Growth Balanced Fund
Moderate Balanced Fund
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
100% Treasury Money Market Fund(1)
California Municipal Market Fund
California Municipal 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)
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.
- ----------
(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.
+ In this report, the WELLS FARGO ADVANTAGE DISCOVERY FUND(SM), WELLS FARGO
ADVANTAGE ENDEAVOR SELECT FUND(SM), WELLS FARGO ADVANTAGE ENTERPRISE
FUND(SM), WELLS FARGO ADVANTAGE OPPORTUNITY FUND(SM), WELLS FARGO ADVANTAGE
SOCIAL SUSTAINABILITY FUND(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER
CONSERVATIVE ALLOCATION PORTFOLIO(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER
EQUITY PORTFOLIO(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER GROWTH ALLOCATION
PORTFOLIO(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER GROWTH BALANCED
PORTFOLIO(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER MODERATE BALANCED
PORTFOLIO(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER TACTICAL EQUITY
PORTFOLIO(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET TODAY FUND(SM), WELLS
FARGO ADVANTAGE DOW JONES TARGET 2010 FUND(SM), WELLS FARGO ADVANTAGE DOW
JONES TARGET 2015 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2020
FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2025 FUND(SM), WELLS FARGO
ADVANTAGE DOW JONES TARGET 2030 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES
TARGET 2035 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2040 FUND(SM),
WELLS FARGO ADVANTAGE DOW JONES TARGET 2045 FUND(SM), WELLS FARGO ADVANTAGE
DOW JONES TARGET 2050 FUND(SM), WELLS FARGO ADVANTAGE HERITAGE MONEY MARKET
FUND(SM), WELLS FARGO ADVANTAGE OVERLAND EXPRESS SWEEP FUND(SM), WELLS
FARGO ADVANTAGE VT DISCOVERY FUND(SM), AND WELLS FARGO ADVANTAGE VT
OPPORTUNITY FUND(SM) are referred to as the Discovery Fund, Endeavor Select
Fund, Enterprise Fund, Opportunity Fund, Social Sustainability Fund,
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, Target 2010
Fund, Target 2015 Fund, Target 2020 Fund, Target 2025 Fund, Target 2030
Fund, Target 2035 Fund, Target 2040 Fund, Target 2045 Fund, Target 2050
Fund, Heritage Money Market Fund, Overland Express Sweep Fund, VT Discovery
Fund, and VT Opportunity Fund, respectively.
NOT PART OF THE SEMI-ANNUAL REPORT.
2 Wells Fargo Advantage Income Funds
Letter to Shareholders
(PHOTO OF KARLA M. RABUSCH)
KARLA M. RABUSCH,
President
WELLS FARGO ADVANTAGE FUNDS
IN GENERAL, FIXED-INCOME SECURITIES THAT PERFORMED THE WORST DURING THE CREDIT
CRISIS OF 2008 PERFORMED THE BEST OVER THE RECENT SIX-MONTH PERIOD, OFFERING
INVESTORS ATTRACTIVE RETURNS IN SEVERAL FIXED-INCOME ASSET CLASSES.
Dear Valued Shareholder,
We are pleased to offer you this semi-annual report for the Wells Fargo
Advantage Income Funds that covers the six-month period that ended November 30,
2009. During the recent six-month period, fixed-income markets continued to show
strong signs of improvement, resulting in positive returns in nearly every
sector of the bond markets. In general, fixed-income securities that performed
the worst during the credit crisis of 2008 performed the best over the recent
six-month period, offering investors attractive returns in several fixed-income
asset classes.
The most notable returns among fixed-income asset classes came from the
lower-quality credit sectors, as investor confidence strengthened throughout
2009 and continued throughout the recent six-month period. As such, the riskier
areas of the fixed-income markets provided some of the best returns. High-yield
bonds performed strongly, with CCC-rated1 securities providing some of the
highest returns over the six-month period, and AAA-rated(1) securities producing
some of the lowest returns. U.S. Treasuries also offered positive returns;
however, they were the lowest-performing sector of the fixed-income markets
during the six-month period. Markets ended the period with a considerable
improvement in investor confidence and in the overall health of the credit
system, compared with the cautious and somewhat hesitant optimism from earlier
in the year. Fixed-income investors were generally rewarded well for their risk
appetites over the six-month period. As the period came to a close, investors
appeared less concerned with the risks of a deepening recession and more focused
on the potential for increasing interest rates in the upcoming year.
GOVERNMENT INTERVENTIONS INSPIRE STRONG PERFORMANCE IN THE FIXED-INCOME MARKETS.
In the early months of 2009, concerns over deflationary pressures were rampant.
Investors were still wary of market risks, deepening economic declines, and
whether government interventions would be effective in bolstering the financial
system. The deflationary sentiments appeared to diminish after the March 18
meeting of the Federal Open Market Committee (FOMC), in which the committee
indicated quite demonstratively that the Fed intended to deploy every available
resource to pump liquidity into the financial system until the United States is
satisfactorily through this recessionary cycle. Consequently, inflation
expectations began to increase, and investors looked toward the beginning of an
expansionary cycle. Whether economic conditions would improve in the near term
was not as important to the markets as the basic understanding that they would
likely not get any worse. With this understanding, suddenly several securities
that had been priced for the worst-case scenarios became attractively
undervalued in the assessment of many investors. Both equity markets and
non-U.S. Treasury fixed-income markets rallied for the better part of the
remainder of 2009.
With government intervention providing sturdier ground for the financial system,
equity prices in several financial institutions also recovered dramatically,
which bolstered confidence in the overall financial system and improved
corporate bond pricing. This restoration of confidence proved to be an essential
component of the broader equity and fixed-income rallies. Once investors trusted
that financial companies were not going to slide into insolvency, the prospects
for
Wells Fargo Advantage Income Funds 3
Letter to Shareholders
a broader economic recovery could begin to take root. The six-month period that
ended November 30, 2009, saw continued strengthening of the improving credit
market conditions that began in the spring of 2009. The high-yield market
continued to perform strongly over the period, building on the confidence in
riskier assets that began in the first quarter. Investment strategies that
favored riskier securities generally outperformed strategies that preferred
higher-quality assets. Thus, investors most willing to add risk to their
portfolios were rewarded the most. The CCC-rated(1) credit tier of the Barclays
Capital U.S. High Yield Index returned 32% during the six-month period, while
the BB-rated1 credit tier returned 16%. In the investment-grade fixed-income
markets, yields were correspondingly lower in each respectively higher credit
tier. The A-rated1 credit tier of the Barclays Capital U.S. Aggregate Index
returned 12% over the six-month period, while the AA-rated1 tier returned 9% and
the AAA-rated1 tier returned 4%. Thus, even returns in the highest-grade sectors
were generally far more generous than the low-interest-rate environment of 0.00%
to 0.25% would suggest. In view of those steady, low interest rates, returns of
more than 4% over the six-month period were considerably strong.
INVESTOR SENTIMENTS ARE MUCH IMPROVED FROM A YEAR AGO.
Investor confidence appeared to strengthen during the six-month period,
particularly through the final months of the summer and into the fall of 2009.
Thus, the month of September in 2009 looked quite different from September 2008,
when last year's credit crisis erupted. Performance over the six-month period
was a strong indication of just how far markets have recovered from the 2008
credit crisis. Markets have not only found steadier footing and stabilized, they
have substantially improved. Last year's risk aversion was roundly replaced by a
stronger appetite for risk in 2009. But with the end of summer and the arrival
of fall comes the seasonal task of measuring the summer's yield. Much of the
strong returns in fixed-income markets were inspired by extensive government
intervention in the form of stimulus programs and monetary-easing measures. This
cannot go on indefinitely. The next question in most investors' minds is what
the economic landscape will look like when these government programs begin to
unwind. That is a primary topic of speculation as we move into a cooler season
and a potentially frostier climate of slowly unwinding monetary and fiscal
accommodation.
It's important to observe that any "normal" year will likely look languid in
comparison with this year's records in performance from high yield and several
other areas of the fixed-income markets. In the mind of many investors, it is
probably unreasonable to expect the same strong levels of performance in
fixed-income markets that investors benefited from in the six-month period to go
on indefinitely. However, this does not necessarily mean that fixed-income
markets will not be able to generate attractive levels of return in a
rising-interest-rate environment. Areas of the fixed-income markets may have to
throttle down a bit in the upcoming quarters but, in our view, may not
completely capitulate to a rising-rate environment. In our opinion, diligent and
earnest assessment of the fundamental risks in individual fixed-income
securities will be a key differentiating factor between which investment
strategies perform well and which do not. At WELLS FARGO ADVANTAGE FUNDS(R), we
intend to continue measuring opportunities in the fixed-income markets and
across our lineup of Wells Fargo Income Funds. We
4 Wells Fargo Advantage Income Funds
Letter to Shareholders
believe it is particularly important to have diligent investment analysts in
charge of investor assets in changing markets, such as the ones investors have
experienced over the last several quarters. As evidenced by the performance of
fixed-income assets during the recent six-month period, heightened risks also
often accompany opportunities. In our view, it is important to have attentive
investment managers during times of uncertainty and opportunity.
DON'T LET SHORT-TERM VOLATILITY DERAIL LONG-TERM INVESTMENT GOALS.
While periods of volatility can present challenges, experience has taught us
that maintaining a long-term investment strategy based on individual goals and
risk tolerance can be an effective way to plan for the future. As a whole, WELLS
FARGO ADVANTAGE FUNDS represents investments across a broad range of asset
classes and investment styles, giving you an opportunity to create a diversified
investment portfolio. 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 110
Funds that cover a broad spectrum of investment styles and asset classes.
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
- ----------
(1.) The ratings indicated are from Standard & Poor's and/or Moody's Investors
Service. Credit Quality Ratings: Credit quality ratings apply to corporate
and municipal bond issues. Standard and Poor's rates the creditworthiness
of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC
may be modified by the addition of a plus + or minus (-) sign to show
relative standing within the rating categories. Moody's rates the
creditworthiness of bonds, ranging from Aaa (highest) to CC (lowest).
Ratings Aa to B may be modified by the addition of a number 1 (highest) to
3 (lowest) to show relative standing within the ratings categories.
THIS PAGE IS INTENTIONALLY LEFT BLANK.
6 Wells Fargo Advantage Income Funds
Performance Highlights
WELLS FARGO ADVANTAGE DIVERSIFIED BOND FUND
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE DIVERSIFIED BOND FUND (the Fund) seeks total return,
consisting of current income and capital appreciation, by diversifying its
investments among different fixed income investment styles.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
PORTFOLIO MANAGERS
Thomas C. Biwer, CFA
Christian L. Chan, CFA
Andrew Owen, CFA
FUND INCEPTION
December 31, 1982
PORTFOLIO ALLOCATION(1)
(AS OF NOVEMBER 30, 2009)
(PIE CHART)
Asset-Backed Securities (6%)
Cash Equivalents (5%)
Collateralized Mortgage Securities (10%)
Corporate Bonds (27%)
Federal Agencies (27%)
Futures (2%)
Municipal Bonds (8%)
U.S.Treasury Bonds (7%)
U.S.Treasury Notes (8%)
- ----------
(1.) This chart represents the composite of the portfolio allocations of the
master portfolios in which the Fund invests. Portfolio holdings are subject
to change and may have changed since the date specified. See Notes to
Financial Statements for a discussion of the master portfolios.
Wells Fargo Advantage Income Funds 7
Performance Highlights
WELLS FARGO ADVANTAGE DIVERSIFIED BOND FUND (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(2) (%) (AS OF NOVEMBER 30, 2009)
Expense Ratio
-----------------
DIVERSIFIED BOND FUND 6 Months* 1 Year 5 Year 10 Year Gross(3) Net(4)
- --------------------- --------- ------ ------ ------- -------- ------
Administrator Class (NVMFX) 9.06 13.89 4.35 5.20 1.17% 0.70%
Barclays Capital U.S. Aggregate Bond Index(5) 6.21 11.63 5.49 6.45
* 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 ON THE FUNDS' WEB SITE -
www.wellsfargo.com/advantagefunds.
ADMINISTRATOR CLASS SHARES ARE SOLD WITHOUT A FRONT-END SALES CHARGE OR
CONTINGENT DEFERRED SALES CHARGE.
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.
- ----------
(2.) The Fund is a gateway blended Fund that invests substantially all of its
assets in two or more master portfolios of the Master Trust in varying
proportions. References to the investment activities of the Fund are
intended to refer to the investment activities of the master portfolios in
which it invests.
(3.) Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
(4.) The investment adviser has contractually committed through September 30,
2010, 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.
(5.) The Barclays Capital U.S. Aggregate Bond Index is composed of the Barclays
Capital Government/Credit Index and the Mortgage-Backed Securities Index
and includes U.S. Treasury issues, agency issues, corporate bond issues,
and mortgage-backed securities. You cannot invest directly in an index.
8 Wells Fargo Advantage Income Funds
Performance Highlights
WELLS FARGO ADVANTAGE INCOME PLUS FUND
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE INCOME PLUS FUND (the Fund) seeks to maximize income
while maintaining prospects for capital appreciation.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Michael J. Bray, CFA
D. James Newton II, CFA, CPA
Thomas M. Price, CFA
Janet S. Rilling, CFA, CPA
FUND INCEPTION
July 13, 1998
PORTFOLIO ALLOCATION(1)
(AS OF NOVEMBER 30, 2009)
(PIE CHART)
Asset-Backed Securities (3%)
Collateralized Mortgage Securities (5%)
Cash Equivalents (12%)
Corporate Bonds (24%)
Federal Agencies (33%)
Futures (7%)
U.S. Treasury Bonds (2%)
U.S. Treasury Notes (14%)
- ----------
(1.) Portfolio allocation is subject to change and is calculated based on the
total investments of the Fund.
Wells Fargo Advantage Income Funds 9
Performance Highlights
WELLS FARGO ADVANTAGE INCOME PLUS FUND (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(2) (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
` ---------------------------------- ---------------------------------- ----------------
INCOME PLUS FUND 6 Months* 1 Year 5 Year 10 Year 6 Months* 1 Year 5 Year 10 Year Gross(3) Net(4)
- ---------------- --------- ------ ------ ------- --------- ------ ------ ------- -------- ------
Class A (STYAX) 3.72 12.38 4.87 5.58 8.61 17.66 5.83 6.07 1.07% 0.90%
Class B (STYBX)** 3.27 11.83 4.69 5.51 8.27 16.83 5.02 5.51 1.83% 1.65%
Class C (WFIPX) 7.21 15.81 5.05 5.28 8.21 16.81 5.05 5.28 1.84% 1.65%
Institutional Class (WIPIX) 8.77 18.00 5.92 6.11 0.71% 0.61%
Investor Class (WIPNX) 8.59 17.60 5.82 6.07 1.11% 0.94%
Barclays Capital U.S. Universal Bond
Index(5) 7.23 14.18 5.48 6.55
* Returns for periods of less than one year are not annualized.
** Class B shares are closed to investment, except in connection with the
reinvestment of any distributions and permitted exchanges.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE -
www.wellsfargo.com/advantagefunds.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 4.50%. FOR CLASS B
SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 5.00%. FOR CLASS C
SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 1.00%. PERFORMANCE
INCLUDING SALES CHARGES ASSUMES THE SALES CHARGE FOR THE CORRESPONDING TIME
PERIOD. INSTITUTIONAL CLASS AND INVESTOR CLASS SHARES ARE SOLD WITHOUT A
FRONT-END SALES CHARGE OR CONTINGENT DEFERRED SALES CHARGE.
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, high-yield securities
risk and mortgage- and asset-backed securities risk. Consult the Fund's
prospectus for additional information on these and other risks.
- ----------
(2.) Institutional Class shares incepted on July 18, 2008. Performance shown
prior to the inception of the Institutional Class reflects the performance
of the Class A shares, and includes expenses that are not applicable to and
are higher than those of the Institutional Class shares. Investor Class
shares incepted on July 18, 2008. Performance shown prior to the inception
of the Investor Class reflects the performance of the Class A shares, and
includes expenses that are not applicable to and are higher than those of
the Investor Class shares.
(3.) Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
(4.) The investment adviser has contractually committed through September 30,
2010, 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.
(5.) The Barclays Capital U.S. Universal Bond Index is an unmanaged
market-value-weighted performance benchmark for the U.S. dollar denominated
bond market, which includes investment grade, high yield, and emerging
market debt securities with maturities of one year or more. You cannot
invest directly in an Index.
10 Wells Fargo Advantage Income Funds
Performance Highlights
WELLS FARGO ADVANTAGE INFLATION-PROTECTED BOND FUND
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE INFLATION-PROTECTED BOND FUND (the Fund) seeks total
return, consisting of income and capital appreciation, while providing
protection against inflation.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Michael J. Bray, CFA
Jay N. Mueller, CFA
FUND INCEPTION
February 28, 2003
PORTFOLIO ALLOCATION(1) (AS OF NOVEMBER 30, 2009)
(PIE CHART)
U.S.Treasury Bonds (31%)
U.S.Treasury Notes (69%)
- ----------
(1.) This chart represents the composite of the portfolio allocations of the
Master Portfolio in which the Fund invests. Portfolio holdings are subject
to change and may have changed since the date specified. See notes to the
Financial Statements for a discussion of the Master Portfolio.
Wells Fargo Advantage Income Funds 11
Performance Highlights
WELLS FARGO ADVANTAGE INFLATION-PROTECTED BOND FUND (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(2) (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
INFLATION-PROTECTED --------------------------------------- --------------------------------------- ----------------
BOND FUND 6 Months* 1 Year 5 Year Life of Fund 6 Months* 1 Year 5 Year Life of Fund Gross(3) Net(4)
- ------------------- --------- ------ ------ ------------ --------- ------ ------ ------------ -------- ------
Class A (IPBAX) 2.66 12.31 3.63 3.99 7.50 17.61 4.59 4.70 0.99% 0.85%
Class B (IPBBX)** 2.03 11.71 3.41 3.88 7.03 16.71 3.76 3.88 1.74% 1.60%
Class C (IPBCX) 6.12 15.80 3.78 3.90 7.12 16.80 3.78 3.90 1.74% 1.60%
Administrator Class (IPBIX) 7.67 17.99 4.83 4.94 0.90% 0.60%
Barclays Capital U.S. Treasury
Inflation-Protected
Securities Index(5) 7.74 19.56 5.46 5.57
* Returns for periods of less than one year are not annualized.
** Class B shares are closed to investment, except in connection with the
reinvestment of any distributions and permitted exchanges.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE -
www.wellsfargo.com/advantagefunds.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 4.50%. FOR CLASS B
SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 5.00%. FOR CLASS C
SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 1.00%. PERFORMANCE
INCLUDING SALES CHARGES ASSUMES THE SALES CHARGE FOR THE CORRESPONDING TIME
PERIOD. ADMINISTRATOR CLASS SHARES ARE SOLD WITHOUT A FRONT-END SALES CHARGE OR
CONTINGENT DEFERRED SALES CHARGE.
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 principal value of and interest payments on
inflation-protected debt securities tend to fall with the rate of inflation. 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 mortgage- and asset-backed
securities risk. Consult the Fund's prospectus for additional information on
these and other risks.
- ----------
(2.) The Fund is a gateway feeder fund that invests all of its assets in a
single master portfolio of the Master Trust with a substantially similar
investment objective and substantially similar investment strategies.
References to the investment activities of the Fund are intended to refer
to the investment activities of the master portfolio in which it invests.
(3.) Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
(4.) The investment adviser has contractually committed through September 30,
2010, 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.
(5.) The Barclays Capital U.S. Treasury Inflation-Protected Securities Index is
an index of inflation-indexed linked U.S. Treasury securities. You cannot
invest directly in an Index.
12 Wells Fargo Advantage Income Funds
Performance Highlights
WELLS FARGO ADVANTAGE SHORT DURATION GOVERNMENT BOND FUND
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE SHORT DURATION GOVERNMENT BOND FUND (the Fund) seeks
to provide current income consistent with capital preservation.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGER
Thomas O'Connor, CFA
FUND INCEPTION
December 18, 1992
PORTFOLIO ALLOCATION(1)
(AS OF NOVEMBER 30, 2009)
(PIE CHART)
Asset-Backed Securities (5%)
Collateralized Mortgage Securities (6%)
Commercial Mortgage-Backed Securities (8%)
Mortgage-Backed Securities (33%)
U.S. Treasury Notes (48%)
- ----------
(1.) Portfolio allocation is subject to change and is calculated based on the
total investments of the Fund.
Wells Fargo Advantage Income Funds 13
Performance Highlights
WELLS FARGO ADVANTAGE SHORT DURATION GOVERNMENT BOND FUND (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(2) (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
SHORT DURATION ---------------------------------- ---------------------------------- ----------------
GOVERNMENT BOND FUND 6 Months* 1 Year 5 Year 10 Year 6 Months* 1 Year 5 Year 10 Year Gross(3) Net(4)
- -------------------- --------- ------ ------ ------- --------- ------ ------ ------- -------- ------
Class A (MSDAX) (0.23) 5.92 3.93 4.37 2.86 9.19 4.56 4.69 0.95% 0.85%
Class B (MSDBX)** (0.53) 5.38 3.94 4.52 2.47 8.38 3.94 4.52 1.70% 1.60%
Class C (MSDCX) 1.46 7.35 3.80 4.05 2.46 8.35 3.80 4.05 1.70% 1.60%
Administrator Class (MNSGX) 2.99 9.46 4.84 4.97 0.87% 0.60%
Institutional Class (WSGIX) 3.08 9.65 5.01 5.06 0.60% 0.42%
Barclays Capital 1-3 Year U.S.
Government Bond Index(5) 1.52 3.21 4.37 4.73
* Returns for periods of less than one year are not annualized.
** Class B shares are closed to investment, except in connection with the
reinvestment of any distributions and permitted exchanges.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE -
www.wellsfargo.com/advantagefunds.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 3.00%. FOR CLASS B
SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 3.00%. FOR CLASS C
SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 1.00%. PERFORMANCE
INCLUDING SALES CHARGES ASSUMES THE SALES CHARGE FOR THE CORRESPONDING TIME
PERIOD. ADMINISTRATOR CLASS AND INSTITUTIONAL CLASS SHARES ARE SOLD WITHOUT A
FRONT-END SALES CHARGE OR CONTINGENT DEFERRED SALES CHARGE.
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. Securities issued by U.S. Government agencies or
government-sponsored entities may not be guaranteed by the U.S. Treasury. 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 mortgage- and asset-backed securities risk. Consult the Fund's
prospectus for additional information on these and other risks. The U.S.
Government guarantee applies to certain of the underlying securities and NOT to
shares of the Fund.
- ----------
(2.) Class B and Class C shares incepted on May 31, 2002. Performance shown
prior to the inception of Class B and Class C reflects the performance of
the Administrator Class shares, adjusted to reflect Class B and Class C
sales charges and expenses, as applicable. Institutional Class shares
incepted on April 11, 2005. Performance shown prior to the inception of the
Institutional Class reflects the performance of the Administrator Class
shares, and includes expenses that are not applicable to and are higher
than those of the Institutional Class shares.
(3.) Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
(4.) The investment adviser has contractually committed through September 30,
2010, 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.
(5.) The Barclays Capital 1-3 Year U.S. Government Bond Index is composed of
publicly issued, non-convertible domestic debt of the U.S. Government and
its agencies. The Index also includes corporate debt guaranteed by the U.S.
Government. Only notes and bonds with maturities between one year and 2.9
years are included in the Index. You cannot invest directly in an Index.
14 Wells Fargo Advantage Income Funds
Performance Highlights
WELLS FARGO ADVANTAGE STABLE INCOME FUND
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE STABLE INCOME FUND (the Fund) seeks current income
consistent with capital preservation.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Galliard Capital Management, Inc.
PORTFOLIO MANAGERS
Richard Merriam, CFA
Ajay Mirza, CFA
FUND INCEPTION
November 11, 1994
PORTFOLIO ALLOCATION(1)
(AS OF NOVEMBER 30, 2009)
(PIE CHART)
Municipal Bonds (4%)
Asset-Backed Securities (20%)
Cash Equivalents (6%)
Collateralized Mortgage Securities (19%)
Corporate Bonds (16%)
Federal Agencies (35%)
- ----------
(1.) This chart represents the composite of the portfolio allocations of the
master portfolios in which the Fund invests. Portfolio holdings are subject
to change and may have changed since the date specified. See Notes to
Financial Statements for a discussion of the master portfolios.
Wells Fargo Advantage Income Funds 15
Performance Highlights
WELLS FARGO ADVANTAGE STABLE INCOME FUND (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(2) (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
---------------------------------- ---------------------------------- ----------------
STABLE INCOME FUND 6 Months* 1 Year 5 Year 10 Year 6 Months* 1 Year 5 Year 10 Year Gross(3) Net(4)
- ------------------ --------- ------ ------ ------- --------- ------ ------ ------- -------- ------
Class A (NVSAX) 2.61 4.98 1.58 2.59 4.71 7.12 1.99 2.79 0.92% 0.85%
Class B (NVSBX)** 2.89 4.88 1.40 2.49 4.39 6.38 1.40 2.49 1.67% 1.60%
Class C (WSICX) 3.34 5.35 1.24 2.02 4.34 6.35 1.24 2.02 1.67% 1.60%
Administrator Class (NVSIX) 4.82 7.34 2.21 3.02 0.84% 0.65%
Barclays Capital 9-12 Months U.S.
Short Treasury Index(5) 0.55 1.38 3.68 3.71
Barclays Capital 1-3 Year U.S.
Government/Credit Bond Index(6) 2.55 5.73 4.49 4.93
Barclays Capital 9-12 Months
Short-Term U.S. Government/Credit
Bond Index(7) 0.92 2.39 3.85 NA
* Returns for periods of less than one year are not annualized.
** Class B shares are closed to investment, except in connection with the
reinvestment of any distributions and permitted exchanges.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE -
www.wellsfargo.com/advantagefunds.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 2.00%. FOR CLASS B
SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 1.50%. FOR CLASS C
SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 1.00%. PERFORMANCE
INCLUDING SALES CHARGES ASSUMES THE SALES CHARGE FOR THE CORRESPONDING TIME
PERIOD. ADMINISTRATOR CLASS SHARES ARE SOLD WITHOUT A FRONT-END SALES CHARGE OR
CONTINGENT DEFERRED SALES CHARGE.
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. 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.
- ----------
(2.) Class C shares incepted on June 30, 2003. Performance shown prior to the
inception of Class C reflects the performance of the Class A shares,
adjusted to reflect Class C sales charges and expenses. The Fund is a
gateway feeder fund that invests all of its assets in a single master
portfolio of the Master Trust with a substantially similar investment
objective and substantially similar investment strategies. References to
the investment activities of the Fund are intended to refer to the
investment activies of the master portfolio in which it invests.
(3.) Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
(4.) The investment adviser has contractually committed through September 30,
2010, 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.
(5.) The Barclays Capital 9-12 Months U.S. Short Treasury Index is an unmanaged
index that includes aged U.S. Treasury bills, notes, and bonds with a
remaining maturity from 9 up to (but not including) 12 months. It excludes
zero-coupon strips. You cannot invest directly in an Index.
(6.) The Barclays Capital U.S. 1-3 Year Government/Credit Bond Index is the 1-3
year component of the Barclays Capital Government/Credit Bond Index which
includes securities in the Government and Credit Indices. The Government
Index includes treasuries (i.e., public obligations of the U.S. Treasury
that have remaining maturities of more than one year) and agencies (i.e.,
publicly issued debt of U.S. Government agencies, quasi-federal
corporations, and corporate or foreign debt guaranteed by the U.S.
Government). The Credit Index includes publicly issued U.S. corporate and
foreign debentures and secured notes that meet specified maturity,
liquidity, and quality requirements. The Barclays Capital 1-3 Year U.S.
Government/Credit Bond Index provides an approximate comparison to the
credit risk of the Fund's portfolio, however, its interest rate risk (as
measured by duration) may be significantly greater than that of the Fund.
You cannot invest directly in an index.
(7.) The Barclays Capital 9-12 Months U.S. Short-Term U.S. Government/Credit
Bond Index is the 9-12 month component of the Short Term U.S.
Government/Credit Bond Index, which contains securities that have fallen
out of the U.S. Government/Credit Index because of the standard minimum
one-year to maturity constraint. Securities in the Short Term U.S.
Government/Credit Bond Index must have a maturity from 1 up to (but not
including) 12 months. The Index has an inception date of August 1, 2004.
You cannot invest directly in an Index.
16 Wells Fargo Advantage Income Funds
Performance Highlights
WELLS FARGO ADVANTAGE STRATEGIC INCOME FUND
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE STRATEGIC INCOME FUND (the Fund) seeks total return,
consisting of a high level of current income and capital appreciation.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Kevin J. Maas, CFA
Thomas M. Price, CFA
Michael J. Schueller, CFA
FUND INCEPTION
November 30, 2000
CREDIT QUALITY(1)
(AS OF NOVEMBER 30, 2009)
(PIE CHART)
Other (1%)
A (1%)
BBB (1%)
BB/Ba (19%)
B (48%)
CCC (22%)
Cash (8%)
- ----------
(1.) The ratings indicated are from Standard & Poor's, Moody's Investors
Service, and/or Fitch Ratings Ltd. Credit Quality Ratings: Credit quality
ratings apply to underlying holdings of the Fund and not the Fund itself.
Standard and Poor's rates the creditworthiness of bonds, ranging from AAA
(highest) to D (lowest). Ratings from A to CCC may be modified by the
addition of a plus + or minus (-) sign to show relative standing within
the rating categories. Moody's rates the creditworthiness of bonds, ranging
from Aaa (highest) to CC (lowest). Ratings Aa to B may be modified by the
addition of a number 1 (highest) to 3 (lowest) to show relative standing
within the ratings categories. Fitch rates the creditworthiness of bonds,
ranging from AAA (highest) to D (lowest). Credit quality is subject to
change and is calculated based on the total investments of the Fund.
Wells Fargo Advantage Income Funds 17
Performance Highlights
WELLS FARGO ADVANTAGE STRATEGIC INCOME FUND (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
--------------------------------------- --------------------------------------- ----------------
STRATEGIC INCOME FUND 6 Months* 1 Year 5 Year Life of Fund 6 Months* 1 Year 5 Year Life of Fund Gross(3) Net(4)
- --------------------- --------- ------ ------ ------------ --------- ------ ------ ------------ -------- ------
Class A (SASAX) 10.10 39.74 3.85 7.23 15.28 46.32 4.81 7.78 1.48% 1.10%
Class B (SASIX)** 9.86 40.26 3.66 6.92 14.86 45.26 4.00 6.92 2.24% 1.85%
Class C (SASCX) 13.88 44.35 3.99 6.72 14.88 45.35 3.99 6.72 2.23% 1.85%
Barclays Capital U.S. Corporate
High Yield Bond Index(4) 20.80 64.95 6.09 8.05
* Returns for periods of less than one year are not annualized.
** Class B shares are closed to investment, except in connection with the
reinvestment of any distributions and permitted exchanges.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE -
www.wellsfargo.com/advantagefunds.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 4.50%. FOR CLASS B
SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 5.00%. FOR CLASS C
SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 1.00%. PERFORMANCE
INCLUDING SALES CHARGES ASSUMES THE SALES CHARGE FOR THE CORRESPONDING TIME
PERIOD. THE FUND HAS A REDEMPTION FEE OF 2.00% DEDUCTED FROM THE NET PROCEEDS OF
SHARES REDEEMED OR EXCHANGED WITHIN 30 DAYS AFTER PURCHASE. PERFORMANCE DATA
DOES NOT REFLECT THE DEDUCTION OF THIS FEE, WHICH, IF REFLECTED, WOULD REDUCE
THE PERFORMANCE.
Please keep in mind that high double-digit returns were primarily achieved
during favorable market conditions. You should not expect that such favorable
returns can be consistently achieved. A Fund's performance, especially for very
short time periods, should not be the sole factor in making your investment
decision.
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. High-yield securities have a greater risk of default and
tend to be more volatile than higher-rated debt securities. 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 and mortgage-
and asset-backed securities risk. Consult the Fund's prospectus for additional
information on these and other risks.
- ----------
(2.) Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
(3.) The investment adviser has contractually committed through September 30,
2010, 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.
(4.) The Barclays Capital U.S. Corporate High Yield Bond Index is an unmanaged,
U.S. dollar-denominated, nonconvertible, non-investment grade debt index.
The index consists of domestic and corporate bonds rated Ba and below with
a minimum outstanding amount of $150 million. You cannot invest directly in
an Index.
18 Wells Fargo Advantage Income Funds
Performance Highlights
WELLS FARGO ADVANTAGE TOTAL RETURN BOND FUND
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE 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
FUND INCEPTION
June 30, 1997
PORTFOLIO ALLOCATION(1)
(AS OF NOVEMBER 30, 2009)
(PIE CHART)
Asset-Backed Securities (6%)
Collateralized Mortgage Securities (7%)
Commercial Mortgage-Backed Securities (14%)
Corporate Bonds (24%)
Emerging Markets (2%)
Mortgage-Backed Securities (35%)
U.S.Treasury Notes (12%)
- ----------
(1.) This chart represents the composite of the portfolio allocations of the
Master Portfolio in which the Fund invests. Portfolio holdings are subject
to change and may have changed since the date specified. See notes to the
Financial Statements for a discussion of the Master Portfolio.
Wells Fargo Advantage Income Funds 19
Performance Highlights
WELLS FARGO ADVANTAGE TOTAL RETURN BOND FUND (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(2) (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
---------------------------------- ---------------------------------- ----------------
TOTAL RETURN BOND FUND 6 Months* 1 Year 5 Year 10 Year 6 Months* 1 Year 5 Year 10 Year Gross(3) Net(4)
- ---------------------- --------- ------ ------ ------- --------- ------ ------ ------- -------- ------
Class A (MBFAX) 2.86 11.67 4.59 6.06 7.70 16.93 5.56 6.55 0.87% 0.85%
Class B** (MBFBX) 2.38 11.15 4.46 6.12 7.38 16.15 4.79 6.12 1.62% 1.60%
Class C (MBFCX) 6.33 15.02 4.77 5.83 7.33 16.02 4.77 5.83 1.63% 1.60%
Administrator Class (MNTRX) 7.79 17.14 5.77 6.71 0.79% 0.70%
Institutional Class (MBFIX) 8.03 17.46 6.06 6.93 0.53% 0.42%
Investor Class (WTRZX) 7.78 16.92 5.52 6.45 0.93% 0.90%
Barclays Capital U.S. Aggregate
Bond Index(5) 6.21 11.63 5.49 6.45
* Returns for periods of less than one year are not annualized.
** Class B shares are closed to investment, except in connection with the
reinvestment of any distributions and permitted exchanges.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE -
www.wellsfargo.com/advantagefunds.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 4.50%. FOR CLASS B
SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 5.00%. FOR CLASS C
SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 1.00%. PERFORMANCE
INCLUDING SALES CHARGES ASSUMES THE SALES CHARGE FOR THE CORRESPONDING TIME
PERIOD. ADMINISTRATOR CLASS, INSTITUTIONAL CLASS AND INVESTOR CLASS SHARES ARE
SOLD WITHOUT A FRONT-END SALES CHARGE OR CONTINGENT DEFERRED SALES CHARGE.
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.
- ----------
(2.) The Fund is a gateway feeder Fund that invests all of its assets in a
single master portfolio of the Master Trust with a substantially similar
investment objective and substantially similar investment strategies.
References to the investment activities of the Fund are intended to refer
to the investment activities of the master portfolio in which it invests.
Class A, Class B, and Class C shares incepted on October 31, 2001.
Performance shown prior to the inception of Class A, Class B, and Class C
reflects the performance of the Administrator Class shares, adjusted to
reflect Class A, Class B, and Class C sales charges and expenses, as
applicable. Institutional Class shares incepted on October 31, 2001.
Performance shown prior to the inception of the Institutional Class
reflects the performance of the Administrator Class shares, and includes
expenses that are not applicable to and are higher than those of the
Institutional Class shares. Investor Class shares incepted on April 11,
2005. Effective June 20, 2008, Class Z was renamed Investor Class and
modified to assume the features and attributes of the Investor Class.
Performance shown prior to the inception of the Investor Class reflects the
performance of the Administrator Class shares, adjusted to reflect Class Z
expenses.
(3.) Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
(4.) The investment adviser has contractually committed through September 30,
2010, 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.
(5.) The Barclays Capital U.S. Aggregate Bond Index is composed of the Barclays
Capital Government/Credit Index and the Mortgage-Backed Securities Index
and includes U.S. Treasury issues, agency issues, corporate bond issues,
and mortgage-backed securities. You cannot invest directly in an index.
20 Wells Fargo Advantage Income Funds
Fund Expenses
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 June 1, 2009 to
November 30, 2009.
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 Net Annual
Account Value Account Value Paid During the Expense
DIVERSIFIED BOND FUND 06-01-2009 11-30-2009 Period(1) Ratio
- --------------------- ------------- ------------- --------------- ----------
ADMINISTRATOR CLASS
Actual $1,000.00 $1,090.60 $3.67 0.70%
Hypothetical (5% Return before expenses) $1,000.00 $1,021.56 $3.55 0.70%
INCOME PLUS FUND
CLASS A
Actual $1,000.00 $1,086.10 $4.71 0.90%
Hypothetical (5% Return before expenses) $1,000.00 $1,020.56 $4.56 0.90%
CLASS B
Actual $1,000.00 $1,082.70 $8.61 1.65%
Hypothetical (5% Return before expenses) $1,000.00 $1,016.80 $8.34 1.65%
CLASS C
Actual $1,000.00 $1,082.10 $8.61 1.65%
Hypothetical (5% Return before expenses) $1,000.00 $1,016.80 $8.34 1.65%
INSTITUTIONAL CLASS
Actual $1,000.00 $1,087.70 $3.19 0.61%
Hypothetical (5% Return before expenses) $1,000.00 $1,022.01 $3.09 0.61%
INVESTOR CLASS
Actual $1,000.00 $1,085.90 $4.92 0.94%
Hypothetical (5% Return before expenses) $1,000.00 $1,020.36 $4.76 0.94%
Wells Fargo Advantage Income Funds 21
Fund Expenses
Beginning Ending Expenses Net Annual
Account Value Account Value Paid During the Expense
INFLATION-PROTECTED BOND FUND 06-01-2009 11-30-2009 Period(1) Ratio
- ----------------------------- ------------- ------------- --------------- ----------
CLASS A
Actual $1,000.00 $1,075.00 $4.42 0.85%
Hypothetical (5% Return before expenses) $1,000.00 $1,020.81 $4.31 0.85%
CLASS B
Actual $1,000.00 $1,070.30 $8.30 1.60%
Hypothetical (5% Return before expenses) $1,000.00 $1,017.05 $8.09 1.60%
CLASS C
Actual $1,000.00 $1,071.20 $8.31 1.60%
Hypothetical (5% Return before expenses) $1,000.00 $1,017.05 $8.09 1.60%
ADMINISTRATOR CLASS
Actual $1,000.00 $1,076.70 $3.12 0.60%
Hypothetical (5% Return before expenses) $1,000.00 $1,022.06 $3.04 0.60%
SHORT DURATION GOVERNMENT BOND FUND
CLASS A
Actual $1,000.00 $1,028.60 $4.32 0.85%
Hypothetical (5% Return before expenses) $1,000.00 $1,020.81 $4.31 0.85%
CLASS B
Actual $1,000.00 $1,024.70 $8.12 1.60%
Hypothetical (5% Return before expenses) $1,000.00 $1,017.05 $8.09 1.60%
CLASS C
Actual $1,000.00 $1,024.60 $8.12 1.60%
Hypothetical (5% Return before expenses) $1,000.00 $1,017.05 $8.09 1.60%
ADMINISTRATOR CLASS
Actual $1,000.00 $1,029.90 $3.05 0.60%
Hypothetical (5% Return before expenses) $1,000.00 $1,022.06 $3.04 0.60%
INSTITUTIONAL CLASS
Actual $1,000.00 $1,030.80 $2.14 0.42%
Hypothetical (5% Return before expenses) $1,000.00 $1,022.96 $2.13 0.42%
STABLE INCOME FUND
CLASS A
Actual $1,000.00 $1,047.10 $4.36 0.85%
Hypothetical (5% Return before expenses) $1,000.00 $1,020.81 $4.31 0.85%
CLASS B
Actual $1,000.00 $1,043.90 $8.20 1.60%
Hypothetical (5% Return before expenses) $1,000.00 $1,017.05 $8.09 1.60%
CLASS C
Actual $1,000.00 $1,043.40 $8.20 1.60%
Hypothetical (5% Return before expenses) $1,000.00 $1,017.05 $8.09 1.60%
ADMINISTRATOR CLASS
Actual $1,000.00 $1,048.20 $3.34 0.65%
Hypothetical (5% Return before expenses) $1,000.00 $1,021.81 $3.29 0.65%
22 Wells Fargo Advantage Income Funds
Fund Expenses
Beginning Ending Expenses Net Annual
Account Value Account Value Paid During the Expense
STRATEGIC INCOME FUND 06-01-2009 11-30-2009 Period(1) Ratio
- --------------------- ------------- ------------- --------------- ----------
CLASS A
Actual $1,000.00 $1,152.80 $5.94 1.10%
Hypothetical (5% Return before expenses) $1,000.00 $1,019.55 $5.57 1.10%
CLASS B
Actual $1,000.00 $1,148.60 $9.96 1.85%
Hypothetical (5% Return before expenses) $1,000.00 $1,015.79 $9.35 1.85%
CLASS C
Actual $1,000.00 $1,148.80 $9.97 1.85%
Hypothetical (5% Return before expenses) $1,000.00 $1,015.79 $9.35 1.85%
TOTAL RETURN BOND FUND
CLASS A
Actual $1,000.00 $1,077.00 $4.27 0.82%
Hypothetical (5% Return before expenses) $1,000.00 $1,020.96 $4.15 0.82%
CLASS B
Actual $1,000.00 $1,073.80 $8.21 1.58%
Hypothetical (5% Return before expenses) $1,000.00 $1,017.15 $7.99 1.58%
CLASS C
Actual $1,000.00 $1,073.30 $8.16 1.57%
Hypothetical (5% Return before expenses) $1,000.00 $1,017.20 $7.94 1.57%
ADMINISTRATOR CLASS
Actual $1,000.00 $1,077.90 $3.65 0.70%
Hypothetical (5% Return before expenses) $1,000.00 $1,021.56 $3.55 0.70%
INSTITUTIONAL CLASS
Actual $1,000.00 $1,080.30 $2.19 0.42%
Hypothetical (5% Return before expenses) $1,000.00 $1,022.96 $2.13 0.42%
INVESTOR CLASS
Actual $1,000.00 $1,077.80 $4.58 0.88%
Hypothetical (5% Return before expenses) $1,000.00 $1,020.66 $4.46 0.88%
- ----------
(1.) Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by the number of days in
the most recent fiscal half-year divided by the number of days in the
fiscal year (to reflect the one-half year period).
Wells Fargo Advantage Income Funds 23
Portfolio of Investments--November 30, 2009 (Unaudited)
DIVERSIFIED BOND FUND
FACE/SHARE
AMOUNT SECURITY NAME VALUE
- ------------ ------------------------------------------------------------------ ---------------
INVESTMENTS IN AFFILIATED MASTER PORTFOLIOS: 99.72%
NA WELLS FARGO ADVANTAGE INFLATION-PROTECTED BOND PORTFOLIO $ 4,738,025
NA WELLS FARGO ADVANTAGE MANAGED FIXED INCOME PORTFOLIO 32,959,573
NA WELLS FARGO ADVANTAGE TOTAL RETURN BOND PORTFOLIO 9,417,539
TOTAL INVESTMENTS IN AFFILIATED MASTER PORTFOLIOS (COST $47,120,191) 47,115,137
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $47,120,191)* 99.72% 47,115,137
OTHER ASSETS AND LIABILITIES, NET 0.28 132,934
------ ---------------
TOTAL NET ASSETS 100.00% $ 47,248,071
====== ===============
- ----------
* Cost for federal income tax purposes is $47,463,205 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 10,102
Gross unrealized depreciation (358,170)
---------
Net unrealized depreciation $(348,068)
The accompanying notes are an integral part of these financial statements.
24 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
INCOME PLUS FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
AGENCY NOTES - INTEREST BEARING: 2.75%
$ 10,660,000 FNMA 4.75% 11/19/2012 $ 11,725,296
TOTAL AGENCY NOTES - INTEREST BEARING (COST $10,909,395) 11,725,296
---------------
AGENCY SECURITIES: 31.44%
FEDERAL HOME LOAN MORTGAGE CORPORATION: 2.42%
9,190,000 FHLMC%% 6.00 TBA 9,857,709
1,227 FHLMC #170065 14.00 09/01/2012 1,372
285,351 FHLMC #1J1263+/- 5.76 01/01/2036 300,871
128,040 FHLMC #A77459 7.50 05/01/2038 140,331
1,406 FHLMC #C00922 8.00 02/01/2030 1,618
10,301,901
---------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION: 27.99%
1,740,000 FNMA%% 4.00 TBA 1,747,341
12,885,000 FNMA%% 4.50 TBA 13,225,241
20,525,000 FNMA%% 5.00 TBA 21,525,594
16,015,000 FNMA%% 5.50 TBA 17,030,960
11,475,000 FNMA%% 6.00 TBA 12,299,766
458,664 FNMA #256986 7.00 11/01/2037 503,787
1,125,110 FNMA #257307 6.00 08/01/2038 1,207,538
1,234,984 FNMA #725715 5.50 08/01/2034 1,318,683
1,014,850 FNMA #735230 5.50 02/01/2035 1,083,630
164,337 FNMA #831621 7.00 07/01/2036 181,143
647,332 FNMA #863727+/- 5.33 01/01/2036 672,673
308,635 FNMA #886087 6.50 07/01/2036 334,139
390,592 FNMA #886686+/- 6.14 08/01/2036 415,098
375,125 FNMA #888022 5.00 02/01/2036 394,211
750,847 FNMA #888538 5.50 01/01/2037 801,266
910,627 FNMA #889398 6.00 11/01/2037 977,910
198,831 FNMA #892283+/- 5.86 09/01/2036 210,495
191,191 FNMA #895998 6.50 07/01/2036 206,990
141,778 FNMA #902200 6.50 11/01/2036 153,494
446,089 FNMA #918447 5.50 05/01/2022 478,296
3,510,100 FNMA #934370 5.50 08/01/2038 3,738,119
9,977,458 FNMA #941312 6.50 07/01/2037 10,791,049
99,108 FNMA #976190 7.50 05/01/2038 108,962
6,927,317 FNMA #987853 5.50 08/01/2038 7,377,322
6,963,059 FNMA #995591 7.00 03/01/2024 7,560,312
13,896,743 FNMA #AD0143 5.50 06/01/2024 14,921,085
119,265,104
---------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION: 1.03%
748 GNMA #45265 15.00 08/15/2011 830
2,151 GNMA #516121 7.50 12/15/2029 2,462
470 GNMA #53809 15.00 02/15/2012 545
515 GNMA #54340 15.00 05/15/2012 597
2,922,026 GNMA Series 2004-20 Class A 2.91 08/16/2020 2,943,687
1,397,174 GNMA Series 2005-90 Class A 3.76 09/16/2028 1,438,285
4,386,406
---------------
TOTAL AGENCY SECURITIES (COST $130,365,174) 133,953,411
---------------
ASSET BACKED SECURITIES: 2.60%
200,000 AMERICAN EXPRESS ISSUANCE TRUST SERIES 2007-1 CLASS A+/- 0.44 09/15/2011 199,753
1,285,000 CAPITAL AUTO RECEIVABLES ASSET TRUST SERIES 2007-4 CLASS A3B+/- 0.94 11/15/2011 1,285,956
Wells Fargo Advantage Income Funds 25
Portfolio of Investments--November 30, 2009 (Unaudited)
INCOME PLUS FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
ASSET BACKED SECURITIES (continued)
$ 430,000 CHASE ISSUANCE TRUST SERIES 2005-A6 CLASS A6+/- 0.31% 07/15/2014 $ 423,184
3,410,000 CHASE ISSUANCE TRUST SERIES 2009-A3 CLASS A3 2.40 06/17/2013 3,474,017
285,000 CITIBANK CREDIT CARD ISSUANCE TRUST SERIES 2005-C1 CLASS C1 5.50 03/24/2017 273,633
1,232,830 COUNTRYWIDE ASSET BACKED CERTIFICATES SERIES 2004-S1 C1
CLASS A3(o)(o) 4.62 02/25/2035 935,512
101,206 DAIMLER AUTO TRUST SERIES 2008-B CLASS A2A 3.81 07/08/2011 101,948
2,345,000 DISCOVER CARD MASTER TRUST SERIES 2008-A4 CLASS A4 5.65 12/15/2015 2,605,353
1,760,614 USAA AUTO OWNER TRUST SERIES 2007-2 CLASS A3 4.90 02/15/2012 1,786,004
TOTAL ASSET BACKED SECURITIES (COST $10,653,624) 11,085,360
---------------
COLLATERALIZED MORTGAGE OBLIGATIONS: 11.06%
1,070,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES 2008-1
CLASS AM+/- 6.40 01/10/2018 730,406
12,122 BANK OF AMERICA MORTGAGE SECURITIES SERIES 2005-H CLASS 2A3+/- 4.80 09/25/2035 11,100
1,485,000 CITIGROUP COMMERCIAL MORTGAGE TRUST SERIES 2008-C7+/- 6.30 12/10/2049 1,106,445
2,050,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2004-LB4A
CLASS A4 4.58 10/15/2037 2,034,876
662,608 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES
1998-C2 CLASS AX+/-(c) 0.57 11/11/2030 8,781
355,000 CREDIT SUISSE MORTGAGE CAPITAL CERTIFICATES SERIES 2006-C3
CLASS A3+/- 6.02 06/15/2038 298,600
3,853,888 FHLMC SERIES T-42 CLASS A5 7.50 02/25/2042 4,339,237
116,561 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-57 CLASS 2A1+/- 4.77 07/25/2043 121,024
68,185 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-59 CLASS 2A1+/- 4.76 10/25/2043 65,802
175,037 FNMA SERIES 2003-W14 CLASS 2A+/- 4.85 01/25/2043 180,796
207,819 FNMA SERIES 2005-W4 CLASS 3A+/- 4.66 06/25/2035 214,974
337,102 FNMA WHOLE LOAN SERIES 2003-W8 CLASS 4A+/- 4.82 11/25/2042 346,710
4,053,709 FNMA WHOLE LOAN SERIES 2004-W11 CLASS 1A3 7.00 05/25/2044 4,471,747
3,961,443 FNMA WHOLE LOAN SERIES 2004-W15 CLASS 1A3 7.00 08/25/2044 4,382,545
209,493 GNMA SERIES 2005-59 CLASS A 4.39 05/16/2023 214,307
819,630 GNMA SERIES 2006-3 CLASS A 4.21 01/16/2028 845,271
1,945,011 GNMA SERIES 2007-12 CLASS A 3.96 06/16/2031 2,014,982
485,000 GNMA SERIES 2007-12 CLASS C+/- 5.28 04/16/2041 516,926
3,486,967 GNMA SERIES 2007-69 CLASS TA+/- 5.01 06/16/2031 3,618,217
20,285,092 GNMA SERIES 2008-22 CLASS XM+/-(c) 1.20 02/16/2050 978,218
2,394,811 GNMA SERIES 2008-39 CLASS A 4.50 02/16/2023 2,465,617
412,491 GNMA SERIES 2008-45 CLASS A 3.58 04/16/2027 420,532
4,365,000 GNMA SERIES 2008-86 CLASS D 5.46 04/16/2040 4,582,604
3,830,000 LEHMAN BROTHERS-UBS COMMERCIAL MORTGAGE TRUST SERIES 2003-C8
CLASS A3 4.83 11/15/2027 3,951,228
2,020,000 LEHMAN BROTHERS-UBS COMMERCIAL MORTGAGE TRUST SERIES 2006-C1
CLASS A4 5.16 02/15/2031 1,973,508
3,060,000 LEHMAN BROTHERS-UBS COMMERCIAL MORTGAGE TRUST SERIES 2008-C1+/- 6.32 04/15/2041 3,051,311
2,209,716 MACH ONE TRUST COMMERCIAL MORTGAGE BACKED SERIES 2004-1
CLASS X+/-(c)++(i) 1.23 05/28/2040 38,803
1,576,479 MORGAN STANLEY CAPITAL I SERIES 2004-RR2 CLASS X+/-(c)++ 0.91 10/28/2033 21,850
1,965,000 MORGAN STANLEY CAPITAL I SERIES 2004-T15 CLASS A4+/- 5.27 06/13/2041 1,973,096
6,799 SACO I TRUST SERIES 2005-2 CLASS A+/-++(i) 0.44 04/25/2035 2,719
118,794 SALOMON BROTHERS MORTGAGE SECURITIES VII SERIES 2000-C2 CLASS A2 7.46 07/18/2033 119,416
1,915,000 TIAA REAL ESTATE CDO LIMITED SERIES 2007-C4 CLASS A3+/- 6.07 08/15/2039 2,035,248
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (COST $44,775,361) 47,136,896
---------------
CORPORATE BONDS & NOTES: 26.39%
ADVERTISING: 0.11%
500,000 LAMAR MEDIA CORPORATION SERIES C 6.63 08/15/2015 470,000
---------------
AGRICULTURAL CHEMICALS: 0.25%
1,000,000 TERRA CAPITAL INCORPORATED++ 7.75 11/01/2019 1,060,000
---------------
APPAREL & ACCESSORY STORES: 0.24%
1,000,000 WARNACO INCORPORATED 8.88 06/15/2013 1,025,000
---------------
BREWERY: 0.45%
1,520,000 ANHEUSER-BUSCH INBEV WORLDWIDE INCORPORATED++ 8.00 11/15/2039 1,920,084
---------------
26 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
INCOME PLUS FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS: 0.26%
$ 1,105,000 DR HORTON INCORPORATED 6.88% 05/01/2013 $ 1,121,575
---------------
BUSINESS SERVICES: 0.72%
2,000,000 CA INCORPORATED 5.38 12/01/2019 2,050,386
945,000 EQUIFAX INCORPORATED 6.30 07/01/2017 999,908
3,050,294
---------------
CASINO & GAMING: 0.02%
100,000 TURNING STONE CASINO RESORT ENTERPRISE++ 9.13 12/15/2010 99,250
---------------
CHEMICALS & ALLIED PRODUCTS: 0.54%
1,188,000 MOSAIC COMPANY++ 7.63 12/01/2016 1,274,284
1,000,000 NALCO COMPANY++ 8.25 05/15/2017 1,042,500
2,316,784
---------------
COAL MINING: 0.51%
950,000 FOUNDATION PA COAL COMPANY 7.25 08/01/2014 952,375
1,250,000 PEABODY ENERGY CORPORATION 5.88 04/15/2016 1,212,500
2,164,875
---------------
COMMUNICATIONS: 5.52%
935,000 ALLTEL CORPORATION 7.00 07/01/2012 1,042,535
1,250,000 AMERICAN TOWER CORPORATION 7.00 10/15/2017 1,375,000
1,565,000 CBS CORPORATION 7.88 07/30/2030 1,636,026
1,635,000 COX COMMUNICATIONS INCORPORATED++ 8.38 03/01/2039 2,001,165
1,250,000 CSC HOLDINGS INCORPORATED++ 8.50 06/15/2015 1,314,063
1,250,000 DIRECTV HOLDINGS LLC 6.38 06/15/2015 1,284,375
1,250,000 ECHOSTAR DBS CORPORATION 7.75 05/31/2015 1,268,750
1,350,000 EMBARQ CORPORATION 7.08 06/01/2016 1,500,206
1,000,000 FRONTIER COMMUNICATIONS CORPORATION 8.25 05/01/2014 1,027,500
1,250,000 INTELSAT JACKSON HOLDINGS LIMITED 9.50 06/15/2016 1,307,813
1,680,000 L-3 COMMUNICATIONS CORPORATION++ 5.20 10/15/2019 1,703,100
1,250,000 L-3 COMMUNICATIONS CORPORATION 6.38 10/15/2015 1,229,688
1,080,000 NEWS AMERICA HOLDINGS INCORPORATED 8.25 08/10/2018 1,305,037
1,250,000 QWEST COMMUNICATIONS INTERNATIONAL INCORPORATED++ 8.00 10/01/2015 1,250,000
1,000,000 SPRINT NEXTEL CORPORATION 6.00 12/01/2016 862,500
975,000 TIME WARNER CABLE INCORPORATED 5.40 07/02/2012 1,050,720
1,050,000 VALOR TELECOMMUNICATIONS ENTERPRISES 7.75 02/15/2015 1,081,500
1,250,000 WINDSTREAM CORPORATION 8.13 08/01/2013 1,278,125
23,518,103
---------------
DEPOSITORY INSTITUTIONS: 1.84%
1,980,000 BANK OF AMERICA CORPORATION 6.50 08/01/2016 2,103,984
1,520,000 CITIGROUP INCORPORATED 8.13 07/15/2039 1,671,058
1,590,000 FIFTH THIRD BANCORP 6.25 05/01/2013 1,664,973
1,000,000 JPMORGAN CHASE & COMPANY SERIES 1+/- 7.90 04/29/2049 977,920
1,415,000 PNC FINANCIAL SERVICES GROUP INCORPORATED+/- 8.25 05/29/2049 1,413,076
7,831,011
---------------
DIVERSIFIED FINANCIAL SERVICES: 0.44%
96,994 COSO GEOTHERMAL POWER HOLDINGS++(i) 7.00 07/15/2026 80,990
1,700,000 GENERAL ELECTRIC CAPITAL CORPORATION 6.88 01/10/2039 1,782,680
1,863,670
---------------
Wells Fargo Advantage Income Funds 27
Portfolio of Investments--November 30, 2009 (Unaudited)
INCOME PLUS FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
ELECTRIC, GAS & SANITARY SERVICES: 2.68%
$ 2,285,000 BROWNING-FERRIS INDUSTRIES INCORPORATED 7.40% 09/15/2035 $ 2,619,106
1,250,000 EL PASO NATURAL GAS CORPORATION 7.25 06/01/2018 1,249,913
2,257,374 FPL ENERGY CAITHNESS FUNDING++(i) 7.65 12/31/2018 2,305,975
1,000,000 INERGY LP/INERGY FINANCE CORPORATION 6.88 12/15/2014 967,500
100,000 IPALCO ENTERPRISES INCORPORATED++ 7.25 04/01/2016 99,750
900,000 IPALCO ENTERPRISES INCORPORATED 8.63 11/14/2011 931,500
1,000,000 MIRANT NORTH AMERICA LLC 7.38 12/31/2013 985,000
1,250,000 NRG ENERGY INCORPORATED 7.38 02/01/2016 1,243,750
528,085 SALTON SEA FUNDING CORPORATION SERIES C 7.84 05/30/2010 531,649
500,000 SIERRA PACIFIC RESOURCES 6.75 08/15/2017 496,655
11,430,798
---------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER
EQUIPMENT: 0.11%
500,000 HEXCEL CORPORATION 6.75 02/01/2015 476,250
---------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT: 0.30%
1,250,000 BALL CORPORATION 7.38 09/01/2019 1,278,125
---------------
FOOD & KINDRED PRODUCTS: 0.51%
1,000,000 CONSTELLATION BRANDS INCORPORATED 7.25 09/01/2016 1,012,500
1,000,000 DR PEPPER SNAPPLE GROUP INCORPORATED 6.82 05/01/2018 1,157,883
2,170,383
---------------
FOOD STORES: 0.26%
1,000,000 KROGER COMPANY 6.75 04/15/2012 1,107,218
---------------
GENERAL MERCHANDISE STORES: 0.28%
1,250,000 FEDERATED RETAIL HOLDINGS INCORPORATED 5.90 12/01/2016 1,181,250
---------------
HEALTH SERVICES: 1.16%
1,250,000 DAVITA INCORPORATED 7.25 03/15/2015 1,243,750
1,000,000 HCA INCORPORATED++ 8.50 04/15/2019 1,055,000
1,695,000 LABORATORY CORPORATION OF AMERICA HOLDINGS 5.63 12/15/2015 1,782,403
815,000 US ONCOLOGY INCORPORATED++ 9.13 08/15/2017 849,638
4,930,791
---------------
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES: 0.30%
1,250,000 STARWOOD HOTELS & RESORTS WORLDWIDE INCORPORATED 6.25 02/15/2013 1,271,875
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 0.45%
1,250,000 SPX CORPORATION 7.63 12/15/2014 1,275,000
670,000 TEREX CORPORATION 7.38 01/15/2014 658,275
1,933,275
---------------
INSURANCE AGENTS, BROKERS & SERVICE: 0.40%
1,650,000 WILLIS NORTH AMERICA INCORPORATED 7.00 09/29/2019 1,683,904
---------------
INSURANCE CARRIERS: 1.59%
1,750,000 LINCOLN NATIONAL CORPORATION 8.75 07/01/2019 2,041,519
1,695,000 TORCHMARK CORPORATION 9.25 06/15/2019 1,956,320
1,670,000 UNUM GROUP 7.13 09/30/2016 1,756,504
1,215,000 WR BERKLEY CORPORATION 6.25 02/15/2037 1,032,457
6,786,800
---------------
28 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
INCOME PLUS FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
JUSTICE, PUBLIC ORDER & SAFETY: 0.29%
$ 1,250,000 CORRECTIONS CORPORATION OF AMERICA 6.25% 03/15/2013 $ 1,251,563
---------------
LEGAL SERVICES: 0.29%
1,250,000 FTI CONSULTING INCORPORATED 7.75 10/01/2016 1,232,813
---------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL
GOODS: 0.24%
935,000 XEROX CORPORATION 6.88 08/15/2011 1,009,678
---------------
MISCELLANEOUS RETAIL: 0.44%
1,837,268 CVS PASS-THROUGH TRUST SERIES T 6.04 12/10/2028 1,865,232
---------------
NON-DEPOSITORY CREDIT INSTITUTIONS: 0.66%
901,000 AGUA CALIENTE BAND OF CAHUILLA INDIANS++(i) 6.44 10/01/2016 847,643
1,685,000 DISCOVER FINANCIAL SERVICES 10.25 07/15/2019 1,979,049
2,826,692
---------------
OIL & GAS EXTRACTION: 0.97%
1,000,000 CHESAPEAKE ENERGY CORPORATION 6.38 06/15/2015 930,000
600,000 PRIDE INTERNATIONAL INCORPORATED 8.50 06/15/2019 664,500
1,250,000 RANGE RESOURCES CORPORATION 7.50 05/15/2016 1,256,250
1,250,000 SOUTHWESTERN ENERGY COMPANY 7.50 02/01/2018 1,290,625
4,141,375
---------------
PAPER & ALLIED PRODUCTS: 0.76%
1,000,000 DOMTAR CORPORATION<< 10.75 06/01/2017 1,160,000
1,250,000 GEORGIA-PACIFIC LLC++ 7.00 01/15/2015 1,265,625
750,000 ROCK-TENN COMPANY++ 9.25 03/15/2016 806,250
3,231,875
---------------
PERSONAL SERVICES: 0.28%
1,250,000 SERVICE CORPORATION INTERNATIONAL SERIES WI 7.00 06/15/2017 1,206,250
---------------
PIPELINES: 0.25%
910,000 TEXAS EASTERN TRANSMISSION LP 7.00 07/15/2032 1,055,406
---------------
PRIMARY METAL INDUSTRIES: 0.41%
750,000 BELDEN CDT INCORPORATED 7.00 03/15/2017 725,625
1,000,000 STEEL DYNAMICS INCORPORATED++ 8.25 04/15/2016 1,010,000
1,735,625
---------------
REAL ESTATE INVESTMENT TRUSTS (REITS): 0.44%
1,735,000 DEXUS PROPERTY GROUP++ 7.13 10/15/2014 1,800,899
100,000 VENTAS REALTY LP 6.75 04/01/2017 95,000
1,895,899
---------------
RETAIL DEPARTMENT STORES: 0.31%
1,250,000 JCPENNEY INCORPORATED 7.65 08/15/2016 1,312,500
---------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 1.09%
2,410,000 LAZARD GROUP LLC 7.13 05/15/2015 2,515,893
1,965,000 MERRILL LYNCH & COMPANY INCORPORATED SERIES MTN 6.88 04/25/2018 2,107,716
4,623,609
---------------
STONE, CLAY, GLASS & CONCRETE PRODUCTS: 0.29%
1,250,000 OWENS-ILLINOIS INCORPORATED 7.80 05/15/2018 1,253,125
---------------
Wells Fargo Advantage Income Funds 29
Portfolio of Investments--November 30, 2009 (Unaudited)
INCOME PLUS FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
TELECOMMUNICATIONS EQUIPMENT: 0.29%
$ 1,250,000 CROWN CASTLE INTERNATIONAL CORPORATION 7.13% 11/01/2019 $ 1,234,375
---------------
TOBACCO: 0.44%
1,695,000 LORILLARD TOBACCO COMPANY 8.13 06/23/2019 1,875,955
---------------
TOTAL CORPORATE BONDS & NOTES (COST $106,832,814) 112,443,287
---------------
FOREIGN CORPORATE BONDS@: 4.30%
1,725,000 AMERICA MOVIL SA DE CV 5.50 03/01/2014 1,852,415
1,345,000 ARCELORMITTAL 6.13 06/01/2018 1,372,995
1,535,000 BRITISH SKY BROADCASTING GROUP PLC++ 9.50 11/15/2018 2,021,799
1,580,000 COMMONWEALTH BANK OF AUSTRALIA+/-++ 6.02 03/29/2049 1,323,372
1,000,000 FMC FINANCE III SA 6.88 07/15/2017 990,000
380,000 GLOBO COMUNICACOES E PARTICIPACOES SA++ 7.25 04/26/2022 394,250
1,540,000 RIO TINTO FINANCE USA LIMITED 9.00 05/01/2019 1,962,981
1,100,000 TECK RESOURCES LIMITED 10.25 05/15/2016 1,243,000
1,000,000 TELECOM ITALIA CAPITAL SA 7.18 06/18/2019 1,133,284
750,000 UBS LUXEMBOURG SA FOR OJSC VIMPEL COMMUNICATIONS++ 8.00 02/11/2010 753,750
1,000,000 VIDEOTRON LIMITED++ 9.13 04/15/2018 1,070,000
1,180,000 WEATHERFORD INTERNATIONAL LIMITED 9.63 03/01/2019 1,474,209
2,750,000 WESTERN POWER DISTRIBUTION HOLDINGS LIMITED++(i) 7.38 12/15/2028 2,729,081
TOTAL FOREIGN CORPORATE BONDS (COST $17,175,532) 18,321,136
---------------
MUNICIPAL BONDS & NOTES: 0.41%
OREGON: 0.22%
1,030,000 COW CREEK BAND UMPQUA TRIBE OF INDIANS OREGON SERIES A
(OTHER REVENUE)(i) 6.88 10/01/2011 947,888
---------------
OTHER: 0.19%
870,000 SENECA NATION INDIANS CAPITAL IMPROVEMENTS AUTHORITY SERIES 07 B
(OTHER REVENUE)++(i) 6.75 12/01/2013 818,339
---------------
TOTAL MUNICIPAL BONDS & NOTES (COST $1,900,000) 1,766,227
---------------
US TREASURY SECURITIES: 23.51%
US TREASURY BONDS: 2.90%
5,750,000 US TREASURY BOND 3.50 02/15/2039 5,068,085
6,950,000 US TREASURY BOND 4.50 08/15/2039 7,301,844
12,369,929
---------------
US TREASURY NOTES: 20.61%
925,000 US TREASURY NOTE 1.13 06/30/2011 934,756
20,410,000 US TREASURY NOTE<< 1.13 12/15/2011 20,583,812
21,750,000 US TREASURY NOTE<< 1.38 02/15/2012 22,035,469
9,000,000 US TREASURY NOTE 2.13 11/30/2014 9,037,266
475,000 US TREASURY NOTE 2.38 09/30/2014 484,799
16,350,000 US TREASURY NOTE<< 2.75 10/31/2013 17,116,406
2,870,000 US TREASURY NOTE 2.75 11/30/2016 2,881,559
4,365,000 US TREASURY NOTE 3.25 05/31/2016 4,557,331
4,690,000 US TREASURY NOTE<< 3.38 11/15/2019 4,758,896
5,160,000 US TREASURY NOTE 3.75 11/15/2018 5,411,550
87,801,844
---------------
TOTAL US TREASURY SECURITIES (COST $99,109,012) 100,171,773
---------------
30 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
INCOME PLUS FUND
SHARES SECURITY NAME YIELD VALUE
- ------------ ------------------------------------------------------------------ -------- ---------------
COLLATERAL FOR SECURITIES LENDING: 18.41%
COLLATERAL INVESTED IN MONEY MARKET FUNDS: 3.30%
3,512,713 AIM STIT-LIQUID ASSETS PORTFOLIO(s) 0.21% $ 3,512,713
3,512,713 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(s) 0.16 3,512,713
3,512,713 DREYFUS CASH MANAGEMENT FUND INSTITUTIONAL(s) 0.11 3,512,713
3,512,713 DWS MONEY MARKET SERIES INSTITUTIONAL(s) 0.20 3,512,713
14,050,852
---------------
INTEREST MATURITY
PRINCIPAL RATE DATE
- ------------ -------- -----------
COLLATERAL INVESTED IN OTHER ASSETS: 15.11%
$ 683,028 ALLIED IRISH BANKS NORTH AMERICA INCORPORATED 0.26 12/07/2009 683,028
243,938 AMSTEL FUNDING CORPORATION++(p) 1.25 12/18/2009 243,794
243,938 ANTALIS US FUNDING CORPORATION++(p) 0.18 12/03/2009 243,936
731,815 ANTALIS US FUNDING CORPORATION++(p) 0.20 12/04/2009 731,803
585,452 ARABELLA FINANCE LLC++(p) 0.35 12/01/2009 585,452
829,391 ARABELLA FINANCE LLC++(p) 0.40 12/03/2009 829,372
24,394 ARABELLA FINANCE LLC++(p) 0.40 12/04/2009 24,393
487,877 ASPEN FUNDING CORPORATION++(p) 0.18 12/21/2009 487,828
1,463,630 BANK OF AMERICA 0.18 12/23/2009 1,463,469
4,242,089 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $4,242,108) 0.16 12/01/2009 4,242,089
731,815 BANK OF IRELAND 0.35 12/01/2009 731,815
585,452 BANK OF IRELAND 0.50 12/02/2009 585,452
236,279 BARTON CAPITAL CORPORATION++(p) 0.18 12/01/2009 236,279
121,969 BELMONT FUNDING LLC++(p) 0.50 12/01/2009 121,969
634,240 BNP PARIBAS (NEW YORK) 0.21 12/08/2009 634,244
536,665 BNP PARIBAS (NEW YORK) 0.21 12/14/2009 536,670
1,463,630 BRYANT BANK FUNDING++ 0.18 12/23/2009 1,463,469
1,219,692 CAFCO LLC++ 0.17 12/09/2009 1,219,646
53,666 CALCASIEU PARISH LA+/-ss 0.40 12/01/2027 53,666
1,170,904 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY+/-ss 0.23 11/01/2026 1,170,904
156,121 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.35 06/01/2028 156,121
1,219,692 CHARTA LLC++(p) 0.17 12/09/2009 1,219,646
129,409 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.30 10/01/2038 129,409
243,938 COOK COUNTY IL+/-ss 0.40 11/01/2030 243,938
1,480,511 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE
$1,480,518) 0.17 12/01/2009 1,480,511
829,391 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.40 12/15/2037 829,391
585,452 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/02/2009 585,452
707,421 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/07/2009 707,421
585,452 DEXIA CREDIT LOCAL DE FRANCE SA 0.27 12/04/2009 585,452
1,219,692 E.ON AG++ 0.17 12/21/2009 1,219,577
1,219,692 ENI FINANCE USA INCORPORATED++ 0.17 12/18/2009 1,219,594
1,268,480 FORTIS FUNDING LLC++ 0.20 12/29/2009 1,268,282
1,317,267 GDF SUEZ++ 0.17 12/15/2009 1,317,180
975,754 GEMINI SECURITIZATION INCORPORATED++(p) 0.18 12/10/2009 975,710
1,218,716 GOLDMAN SACHS REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $1,218,722) 0.17 12/01/2009 1,218,716
1,219,692 GOTHAM FUNDING CORPORATION++ 0.18 12/15/2009 1,219,607
243,938 GRAMPIAN FUNDING++(p) 0.25 12/03/2009 243,935
1,024,541 GRAMPIAN FUNDING++(p) 0.28 12/15/2009 1,024,430
1,590,003 GRYPHON FUNDING LIMITED(i)(a) 0.00 08/05/2010 591,322
802,069 HAMILTON COUNTY OHIO HOSPITALS+/-ss 0.20 05/15/2037 802,069
80,500 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.30 11/01/2042 80,500
Wells Fargo Advantage Income Funds 31
Portfolio of Investments--November 30, 2009 (Unaudited)
INCOME PLUS FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 395,180 HOUSTON TX UTILITY SYSTEM+/-ss 0.27% 05/15/2034 $ 395,180
139,533 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.30 07/01/2029 139,533
97,575 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.29 01/01/2018 97,575
243,938 ING USA FUNDING LLC 0.18 12/09/2009 243,929
975,754 ING USA FUNDING LLC 0.19 12/07/2009 975,723
3,745,625 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $3,745,643) 0.17 12/01/2009 3,745,625
487,877 JUPITER SECURITIZATION CORPORATION++(p) 0.18 12/02/2009 487,874
243,938 JUPITER SECURITIZATION CORPORATION++ 0.18 12/03/2009 243,936
146,363 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.29 04/15/2025 146,363
1,463,630 KBC BANK NV BRUSSELS 0.18 12/01/2009 1,463,630
292,726 LLOYDS TSB BANK PLC 0.18 12/17/2009 292,703
975,754 LLOYDS TSB BANK PLC (NEW YORK) 0.20 12/07/2009 975,754
390,301 LMA AMERICAS LLC++(p) 0.18 12/11/2009 390,282
219,545 LMA AMERICAS LLC++(p) 0.18 12/17/2009 219,527
731,815 LMA AMERICAS LLC++(p) 0.19 12/21/2009 731,738
219,545 LOUISIANA PUBLIC FACILITIES AUTHORITY+/-ss 0.19 10/01/2033 219,545
1,209,935 MASSACHUSETTS HEFA+/-ss 0.25 10/01/2034 1,209,935
133,922 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.24 02/01/2036 133,922
1,024,541 NATIXIS 0.27 12/07/2009 1,024,546
97,575 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.31 01/01/2018 97,575
1,073,329 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.22 07/01/2034 1,073,329
975,754 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.24 12/01/2040 975,754
1,219,692 NEWPORT FUNDING CORPORATION++(p) 0.18 12/15/2009 1,219,607
238,816 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.30 01/01/2034 238,816
493,487 RBS SECURITIES INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES
(MATURITY VALUE $493,489) 0.18 12/01/2009 493,487
170,757 REGENCY MARKETS #1 LLC++(p) 0.18 12/04/2009 170,754
810,851 REGENCY MARKETS #1 LLC++(p) 0.20 12/09/2009 810,815
243,938 ROMULUS FUNDING CORPORATION++ 0.30 12/15/2009 243,910
878,178 ROYAL BANK OF SCOTLAND PLC 0.20 12/02/2009 878,173
683,028 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.20 12/01/2028 683,028
975,754 SOCIETE GENERALE NORTH AMERICA 0.19 12/18/2009 975,668
60,985 STARBIRD FUNDING CORPORATION++(p) 0.15 12/01/2009 60,985
975,754 STARBIRD FUNDING CORPORATION++(p) 0.20 12/03/2009 975,743
1,219,692 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 0.18 12/18/2009 1,219,588
292,726 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 12/17/2009 292,703
990,292 TULIP FUNDING CORPORATION++(p) 0.19 12/07/2009 990,261
321,999 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.24 07/01/2032 321,999
975,754 UBS AG (STAMFORD CT) 0.31 12/04/2009 975,764
1,463,630 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 1,463,641
146,363 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.29 12/15/2040 146,363
4,893,406 VFNC CORPORATION+/-++(i)(a) 0.24 09/30/2010 2,446,703
60,985 VICTORY RECEIVABLES CORPORATION++(p) 0.15 12/01/2009 60,985
808,363 VICTORY RECEIVABLES CORPORATION++ 0.18 12/16/2009 808,302
243,938 VICTORY RECEIVABLES CORPORATION++(p) 0.19 12/08/2009 243,929
64,412,743
---------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $78,247,813) 78,463,595
---------------
SHARES YIELD
- ------------ -----------
SHORT-TERM INVESTMENTS: 14.73%
62,352,721 Wells Fargo Advantage Money Market Trust~+++(u) 0.13 62,352,721
---------------
32 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
INCOME PLUS FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
US TREASURY BILLS: 0.10%
$ 400,000 US Treasury Bills### 0.10% 12/24/2009 $ 399,974
---------------
TOTAL SHORT-TERM INVESTMENTS (COST $62,752,695) 62,752,695
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $562,471,181)* 135.60% 577,819,676
Other Assets and Liabilities, Net (35.60) (151,707,540)
------ ---------------
TOTAL NET ASSETS 100.00% $ 426,112,136
------ ---------------
- ----------
%% Securities issued on a when-issued (TBA) basis.
+/- Variable rate investments.
(o)(o) Stepped coupon bond. Interest rate presented is yield to maturity.
(c) Interest-only securities entitle holders to receive only the interest
payments on the underlying mortgages. The principal amount shown is the
notional amount of the underlying mortgages. Interest rate disclosed
represents the coupon rate.
++ 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.
(i) Illiquid security.
<< All or a portion of this security is on loan.
@ Foreign bond principal is denominated in local currency.
(s) Rate shown is the 1-day annualized yield at period end.
(p) Asset-backed commercial paper.
ss These securities are subject to a demand feature which reduces the
effective maturity.
#### This security is currently in default with regards to scheduled interest
and/or principal payments.
(a) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The
Wells Fargo Advantage Money Market Fund does not pay an investment
advisory fee.
+++ Short-term security of an affiliate of the Fund with a cost of
$62,352,721.
(u) Rate shown is the 7-day annualized yield at period end.
## Zero coupon bond. Interest rate presented is yield to maturity.
# Security pledged as collateral for futures transactions.
* Cost for federal income tax purposes is $562,705,389 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $17,171,007
Gross unrealized depreciation (2,056,720)
-----------
Net unrealized appreciation $15,114,287
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 33
Portfolio of Investments--November 30, 2009 (Unaudited)
INFLATION-PROTECTED BOND FUND
FACE/SHARE
AMOUNT SECURITY NAME VALUE
- ------------ ------------------------------------------------------------------ ---------------
INVESTMENTS IN AFFILIATED MASTER PORTFOLIOS: 100.35%
NA Wells Fargo Advantage Inflation-Protected Bond Portfolio $ 86,792,832
TOTAL INVESTMENTS IN AFFILIATED MASTER PORTFOLIOS (COST $82,213,348) 86,792,832
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $82,213,348)* 100.35% 86,792,832
Other Assets and Liabilities, Net (0.35) (301,207)
------ ---------------
TOTAL NET ASSETS 100.00% $ 86,491,625
------ ---------------
- ----------
* Cost for federal income tax purposes is $82,458,344 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $4,334,488
Gross unrealized depreciation 0
----------
Net unrealized appreciation $4,334,488
The accompanying notes are an integral part of these financial statements.
34 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT DURATION GOVERNMENT BOND FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
AGENCY SECURITIES: 34.60%
FEDERAL HOME LOAN MORTGAGE CORPORATION: 15.36%
$ 13,977,372 FHLMC #1G1395 6.06% 01/01/2037 $ 14,946,477
18,186,671 FHLMC #1G1522 6.00 01/01/2037 19,410,646
5,014,093 FHLMC #1G1708 6.13 04/01/2037 5,368,025
17,342,859 FHLMC #1G2629 5.73 06/01/2036 18,254,770
9,227,527 FHLMC #1J1693 6.14 04/01/2037 9,816,558
7,729,058 FHLMC #1J2834 6.07 08/01/2037 8,223,476
9,924,539 FHLMC #1Q0793 5.91 05/01/2037 10,573,865
2,065,819 FHLMC #2407 CLASS BJ 6.50 01/15/2032 2,257,983
6,681,055 FHLMC #C70467 6.50 09/01/2032 7,278,957
36,123,107 FHLMC #G13660 5.50 05/01/2021 39,058,486
1,060,709 FHLMC #H82015 6.50 09/01/2037 1,144,569
2,867,097 FHLMC #H82026 6.50 08/01/2037 3,093,770
7,849,703 FHLMC #P10020 5.50 11/01/2017 8,313,700
6,032,106 FHLMC #P10030 5.50 02/01/2018 6,408,696
1,166,620 FHLMC #P10037 5.50 05/01/2018 1,240,228
1,144,785 FHLMC #P10038 5.50 05/01/2018 1,217,775
3,620,583 FHLMC MULTIFAMILY STRUCTURED PASS-THROUGH CERTIFICATES SERIES
K003 CLASS A1 2.23 07/25/2013 3,675,411
8,816,144 FHLMC SERIES 2215 CLASS PH 6.50 02/15/2030 9,515,925
169,799,317
---------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION: 19.24%
347,974 FNMA #303878 6.50 05/01/2016 370,159
22,320,860 FNMA #310017 7.00 06/01/2035 24,715,990
11,560,381 FNMA #888738 7.50 10/01/2037 12,662,221
7,734,242 FNMA #889069 5.50 01/01/2021 8,373,606
6,152,663 FNMA #922460 5.93 01/01/2037 6,599,163
1,615,777 FNMA #940153 6.50 05/01/2037 1,738,980
2,358,422 FNMA #943811 6.50 06/01/2037 2,538,251
996,980 FNMA #950304 6.50 08/01/2037 1,074,387
1,982,794 FNMA #969816 5.50 02/01/2023 2,110,978
4,212,144 FNMA #995092 6.50 12/01/2037 4,536,446
65,877,318 FNMA #995233 5.50 10/01/2021 71,158,484
14,685,743 FNMA #995426 5.50 09/01/2021 15,899,764
16,513,677 FNMA #995427 5.50 01/01/2021 17,837,523
24,140,427 FNMA #995579 6.50 03/01/2039 26,316,365
7,480,429 FNMA #995585 5.50 03/01/2024 8,098,811
4,134,069 FNMA #995649 5.50 06/01/2020 4,475,818
1,840,061 FNMA #AD0462 5.50 10/01/2024 1,959,017
2,177,144 FNMA #AD0485 5.50 11/01/2024 2,317,892
212,783,855
---------------
TOTAL AGENCY SECURITIES (COST $373,061,628) 382,583,172
---------------
ASSET BACKED SECURITIES: 4.45%
6,522,000 BANK OF AMERICA AUTO TRUST SERIES 2009-2A CLASS A4++ 3.03 10/15/2016 6,675,260
13,683,000 DISCOVER CARD MASTER TRUST I SERIES 2005-4 CLASS A2 0.33 06/16/2015 13,286,858
10,280,000 DISCOVER CARD MASTER TRUST I SERIES 2006-3 CLASS A1 0.27 03/15/2014 10,113,929
10,000,000 HARLEY DAVIDSON MOTORCYCLE TRUST SERIES 2007-1 CLASS A4 5.21 06/17/2013 10,424,766
3,050,000 HARLEY DAVIDSON MOTORCYCLE TRUST SERIES 2008-1 CLASS A3A 4.25 02/15/2013 3,122,019
2,537,000 HARLEY DAVIDSON MOTORCYCLE TRUST SERIES 2009-2 CLASS A4 3.32 02/15/2017 2,606,131
2,368,000 NISSAN AUTO RECEIVABLES OWNER TRUST SERIES 2007-A CLASS A4 0.24 06/17/2013 2,359,573
551,776 TRIAD AUTO RECEIVABLES OWNER TRUST SERIES 2006-B CLASS A3 5.41 08/12/2011 554,083
115,395 TRIAD AUTO RECEIVABLES OWNER TRUST SERIES 2006-C CLASS A3 5.26 11/14/2011 115,881
TOTAL ASSET BACKED SECURITIES (COST $48,617,538) 49,258,500
---------------
Wells Fargo Advantage Income Funds 35
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT DURATION GOVERNMENT BOND FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
COLLATERALIZED MORTGAGE OBLIGATIONS: 11.00%
$ 2,301,000 ASSET SECURITIZATION CORPORATION COMMERCIAL MORTGAGE
PASS-THROUGH SERIES 1996-D3 CLASS A3+/- 7.87% 10/13/2026 $ 2,524,534
231,000 ASSET SECURITIZATION CORPORATION SERIES 1996-D3 CLASS A2+/- 7.77 10/13/2026 245,565
8,722,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES 2002-2
CLASS A3 5.12 07/11/2043 9,030,629
74,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES SERIES 2005-PWR9
CLASS AAB 4.80 09/11/2042 75,944
12,921,000 COMMERCIAL MORTGAGE ASSET TRUST SERIES 1999-C1 CLASS A4+/- 6.98 01/17/2032 13,854,932
894,806 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES
2000-C1 CLASS A2 7.55 04/15/2062 906,198
6,296,442 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES
2001-CK3 CLASS A4 6.53 06/15/2034 6,554,836
7,870,373 FHLMC SERIES 2595CLASS AD 5.00 12/15/2017 8,285,819
3,025,369 FHLMC SERIES 2899 CLASS TC 5.00 04/15/2019 3,178,812
7,000,000 FHLMC SERIES 2958 CLASS MC 5.50 11/15/2028 7,288,695
4,714,000 FHLMC SERIES 3143 CLASS NB 5.50 08/15/2029 5,006,469
18,790,338 FNMA SERIES 2001-81 CLASS HE 6.50 01/25/2032 20,484,403
2,008,522 FNMA SERIES 2003-26 CLASS A2 6.00 02/25/2033 2,161,009
1,568,055 JPMORGAN CHASE COMMERCIAL MORTGAGE SERIES 2001-CIBC1
MORTGAGE PASS-THROUGH CLASS A3 6.26 03/15/2033 1,609,682
711,607 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2000-C4
CLASS A2 7.37 08/15/2026 724,157
6,992,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2001-C2
CLASS A2 6.65 11/15/2027 7,303,439
3,551,000 MERRILL LYNCH MORTGAGE TRUST SERIES 2003-KEY1 CLASS A4+/- 5.24 11/12/2035 3,675,119
6,000,000 MERRILL LYNCH MORTGAGE TRUST SERIES 2005-CKI1 CLASS A3+/- 5.41 11/12/2037 6,036,341
6,093,000 MORGAN STANLEY CAPITAL I SERIES 2004-IQ7 CLASS A3+/- 5.35 06/15/2038 6,195,378
5,275,000 MORGAN STANLEY CAPITAL I SERIES 2005-T17 CLASS A4 4.52 12/13/2041 5,328,075
4,564,062 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2002-HQ CLASS A3 6.51 04/15/2034 4,849,620
4,261,046 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2002-IQ2 CLASS A4 5.74 12/15/2035 4,490,383
1,666,040 NOMURA ASSET SECURITIES CORPORATION SERIES 1998-D6 CLASS A1C 6.69 03/15/2030 1,786,755
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (COST $118,772,624) 121,596,794
---------------
US TREASURY SECURITIES: 47.12%
US TREASURY NOTES: 47.12%
64,563,000 US TREASURY NOTE<< 1.00 07/31/2011 65,097,646
28,100,000 US TREASURY NOTE<< 1.00 09/30/2011 28,312,942
175,325,000 US TREASURY NOTE<< 1.00 10/31/2011 176,599,613
190,108,000 US TREASURY NOTE<< 1.38 11/15/2012 191,608,142
58,300,000 US TREASURY NOTE<< 2.38 10/31/2014 59,397,789
TOTAL US TREASURY SECURITIES (COST $516,589,323) 521,016,132
---------------
SHARES YIELD
- ------------ --------
COLLATERAL FOR SECURITIES LENDING: 46.95%
COLLATERAL INVESTED IN MONEY MARKET FUNDS: 8.72%
24,109,484 AIM STIT-LIQUID ASSETS PORTFOLIO(s) 0.21 24,109,484
24,109,484 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(s) 0.16 24,109,484
24,109,484 DREYFUS CASH MANAGEMENT FUND INSTITUTIONAL(s) 0.11 24,109,484
24,109,483 DWS MONEY MARKET SERIES INSTITUTIONAL(s) 0.20 24,109,483
96,437,935
---------------
INTEREST
PRINCIPAL RATE
- ------------ --------
COLLATERAL INVESTED IN OTHER ASSETS: 38.23%
$ 4,687,955 ALLIED IRISH BANKS NORTH AMERICA INCORPORATED 0.26 12/07/2009 4,687,955
1,674,270 AMSTEL FUNDING CORPORATION++(p) 1.25 12/18/2009 1,673,281
1,674,270 ANTALIS US FUNDING CORPORATION++(p) 0.18 12/03/2009 1,674,253
5,022,809 ANTALIS US FUNDING CORPORATION++(p) 0.20 12/04/2009 5,022,725
4,018,247 ARABELLA FINANCE LLC++(p) 0.35 12/01/2009 4,018,247
36 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT DURATION GOVERNMENT BOND FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 5,692,517 ARABELLA FINANCE LLC++(p) 0.40% 12/03/2009 $ 5,692,390
167,427 ARABELLA FINANCE LLC++(p) 0.40 12/04/2009 167,421
3,348,539 ASPEN FUNDING CORPORATION++(p) 0.18 12/21/2009 3,348,205
10,045,618 BANK OF AMERICA 0.18 12/23/2009 10,044,513
29,115,550 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $29,115,679) 0.16 12/01/2009 29,115,550
5,022,809 BANK OF IRELAND 0.35 12/01/2009 5,022,809
4,018,247 BANK OF IRELAND 0.50 12/02/2009 4,018,247
1,621,698 BARTON CAPITAL CORPORATION++(p) 0.18 12/01/2009 1,621,698
837,135 BELMONT FUNDING LLC++(p) 0.50 12/01/2009 837,135
4,353,101 BNP PARIBAS (NEW YORK) 0.21 12/08/2009 4,353,127
3,683,393 BNP PARIBAS (NEW YORK) 0.21 12/14/2009 3,683,433
10,045,618 BRYANT BANK FUNDING++ 0.18 12/23/2009 10,044,513
8,371,348 CAFCO LLC++ 0.17 12/09/2009 8,371,032
368,339 CALCASIEU PARISH LA+/-ss 0.40 12/01/2027 368,339
8,036,495 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY+/-ss 0.23 11/01/2026 8,036,495
1,071,533 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.35 06/01/2028 1,071,533
8,371,348 CHARTA LLC++(p) 0.17 12/09/2009 8,371,032
888,200 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.30 10/01/2038 888,200
1,674,270 COOK COUNTY IL+/-ss 0.40 11/01/2030 1,674,270
10,161,478 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE
$10,161,526) 0.17 12/01/2009 10,161,478
5,692,517 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.40 12/15/2037 5,692,517
4,018,247 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/02/2009 4,018,247
4,018,247 DEXIA CREDIT LOCAL DE FRANCE SA 0.27 12/04/2009 4,018,247
4,855,382 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/07/2009 4,855,382
8,371,348 E.ON AG++ 0.17 12/21/2009 8,370,558
8,371,348 ENI FINANCE USA INCORPORATED++ 0.17 12/18/2009 8,370,676
8,706,202 FORTIS FUNDING LLC++ 0.20 12/29/2009 8,704,848
9,041,056 GDF SUEZ++ 0.17 12/15/2009 9,040,459
6,697,079 GEMINI SECURITIZATION INCORPORATED++(p) 0.18 12/10/2009 6,696,777
8,364,651 GOLDMAN SACHS REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $8,364,690) 0.17 12/01/2009 8,364,651
8,371,348 GOTHAM FUNDING CORPORATION++ 0.18 12/15/2009 8,370,762
1,674,270 GRAMPIAN FUNDING++(p) 0.25 12/03/2009 1,674,246
7,031,933 GRAMPIAN FUNDING++(p) 0.28 12/15/2009 7,031,167
750,211 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 279,003
5,504,999 HAMILTON COUNTY OHIO HOSPITALS+/-ss 0.20 05/15/2037 5,504,999
552,509 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.30 11/01/2042 552,509
2,712,317 HOUSTON TX UTILITY SYSTEM+/-ss 0.27 05/15/2034 2,712,317
957,682 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.30 07/01/2029 957,682
669,708 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.29 01/01/2018 669,708
6,697,079 ING USA FUNDING LLC 0.19 12/07/2009 6,696,867
1,674,270 ING USA FUNDING LLC 0.18 12/09/2009 1,674,203
25,708,076 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $25,708,197) 0.17 12/01/2009 25,708,076
3,348,539 JUPITER SECURITIZATION CORPORATION++(p) 0.18 12/02/2009 3,348,523
1,674,270 JUPITER SECURITIZATION CORPORATION++ 0.18 12/03/2009 1,674,253
1,004,562 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.29 04/15/2025 1,004,562
10,045,618 KBC BANK NV BRUSSELS 0.18 12/01/2009 10,045,618
2,009,124 LLOYDS TSB BANK PLC 0.18 12/17/2009 2,008,963
6,697,079 LLOYDS TSB BANK PLC (NEW YORK) 0.20 12/07/2009 6,697,079
2,678,832 LMA AMERICAS LLC++(p) 0.18 12/11/2009 2,678,698
1,506,843 LMA AMERICAS LLC++(p) 0.18 12/17/2009 1,506,722
5,022,809 LMA AMERICAS LLC++(p) 0.19 12/21/2009 5,022,279
Wells Fargo Advantage Income Funds 37
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT DURATION GOVERNMENT BOND FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 1,506,843 LOUISIANA PUBLIC FACILITIES AUTHORITY+/-ss 0.19% 10/01/2033 $ 1,506,843
8,304,378 MASSACHUSETTS HEFA+/-ss 0.25 10/01/2034 8,304,378
919,174 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.24 02/01/2036 919,174
7,031,933 NATIXIS 0.27 12/07/2009 7,031,967
669,708 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.31 01/01/2018 669,708
7,366,787 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.22 07/01/2034 7,366,787
6,697,079 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.24 12/01/2040 6,697,079
8,371,348 NEWPORT FUNDING CORPORATION++(p) 0.18 12/15/2009 8,370,762
1,639,110 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.30 01/01/2034 1,639,110
3,387,048 RBS SECURITIES INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY
VALUE $3,387,065) 0.18 12/01/2009 3,387,048
1,171,989 REGENCY MARKETS #1 LLC++(p) 0.18 12/04/2009 1,171,971
5,565,272 REGENCY MARKETS #1 LLC++(p) 0.20 12/09/2009 5,565,025
1,674,270 ROMULUS FUNDING CORPORATION++ 0.30 12/15/2009 1,674,074
6,027,371 ROYAL BANK OF SCOTLAND PLC 0.20 12/02/2009 6,027,337
4,687,955 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.20 12/01/2028 4,687,955
6,697,079 SOCIETE GENERALE NORTH AMERICA 0.19 12/18/2009 6,696,494
418,567 STARBIRD FUNDING CORPORATION++(p) 0.15 12/01/2009 418,567
6,697,079 STARBIRD FUNDING CORPORATION++(p) 0.20 12/03/2009 6,697,004
8,371,348 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 0.18 12/18/2009 8,370,637
2,009,124 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 12/17/2009 2,008,963
6,796,865 TULIP FUNDING CORPORATION++(p) 0.19 12/07/2009 6,796,650
2,210,036 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.24 07/01/2032 2,210,036
6,697,079 UBS AG (STAMFORD CT) 0.31 12/04/2009 6,697,151
10,045,618 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 10,045,668
1,004,562 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.29 12/15/2040 1,004,562
2,308,854 VFNC CORPORATION(a)+++/-(i) 0.24 09/30/2010 1,154,427
418,567 VICTORY RECEIVABLES CORPORATION++(p) 0.15 12/01/2009 418,567
1,674,270 VICTORY RECEIVABLES CORPORATION++(p) 0.19 12/08/2009 1,674,208
5,548,195 VICTORY RECEIVABLES CORPORATION++ 0.18 12/16/2009 5,547,779
422,678,410
---------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $519,014,534) 519,116,345
---------------
SHARES YIELD
- ------------ --------
SHORT-TERM INVESTMENTS: 2.21%
MUTUAL FUNDS: 2.21%
24,456,845 WELLS FARGO ADVANTAGE CASH INVESTMENT FUND~+++(u) 0.16 24,456,845
---------------
TOTAL SHORT-TERM INVESTMENTS (COST $24,456,845) 24,456,845
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $1,600,512,492)* 146.33% 1,618,027,788
INTEREST
PRINCIPAL RATE
- ------------ --------
SHORT SALES
TBA SALE COMMITMENTS: (1.60%)
$(16,500,000) FNMA%% 5.50 TBA (17,665,313)
TOTAL TBA SALE COMMITMENTS (PROCEEDS RECEIVED $(17,538,594)) (17,665,313)
---------------
OTHER ASSETS AND LIABILITIES, NET (44.73) (494,652,469)
------ ---------------
TOTAL NET ASSETS 100.00% $ 1,105,710,006
------ ---------------
38 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT DURATION GOVERNMENT BOND FUND
- ----------
(a) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
++ 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.
<< All or a portion of this security is on loan.
%% Securities issued on a when-issued (TBA) basis.
(s) Rate shown is the 1-day annualized yield at period end.
(p) Asset-backed commercial paper.
ss These securities are subject to a demand feature which reduces the
effective maturity.
(i) Illiquid security.
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The Wells
Fargo Advantage Money Market Fund does not pay an investment advisory fee.
+++ Short-term security of an affiliate of the Fund with a cost of $24,456,845.
(u) Rate shown is the 7-day annualized yield at period end.
* Cost for federal income tax purposes is $1,601,709,947 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $18,022,542
Gross unrealized depreciation (1,704,701)
-----------
Net unrealized appreciation $16,317,841
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 39
Portfolio of Investments--November 30, 2009 (Unaudited)
STABLE INCOME FUND
FACE/SHARE
AMOUNT SECURITY NAME VALUE
- ------------ ------------------------------------------------------------------ ---------------
INVESTMENTS IN AFFILIATED MASTER PORTFOLIOS: 100.20%
NA WELLS FARGO ADVANTAGE STABLE INCOME PORTFOLIO $ 195,736,823
TOTAL INVESTMENTS IN AFFILIATED MASTER PORTFOLIOS (COST $214,644,510) 195,736,823
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $214,644,510)* 100.20% 195,736,823
OTHER ASSETS AND LIABILITIES, NET (0.20) (385,383)
------ ---------------
TOTAL NET ASSETS 100.00% $ 195,351,440
------ ---------------
- ----------
* Cost for federal income tax purposes is $214,855,080 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 66,755
Gross unrealized depreciation (19,185,012)
------------
Net unrealized depreciation $(19,118,257)
The accompanying notes are an integral part of these financial statements.
40 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
STRATEGIC INCOME FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
CORPORATE BONDS & NOTES: 85.86%
AEROSPACE: 0.58%
$ 180,000 TRIUMPH GROUP INCORPORATED++ 8.00% 11/15/2017 $ 180,000
---------------
AMUSEMENT & RECREATION SERVICES: 2.74%
210,000 PENN NATIONAL GAMING INCORPORATED++ 8.75 08/15/2019 208,950
230,000 SHINGLE SPRINGS TRIBAL GAMING AUTHORITY++ 9.38 06/15/2015 166,750
130,000 TOWN SPORTS INTERNATIONAL INCORPORATED(o)(o) 16.18 02/01/2014 68,900
100,000 WARNER MUSIC GROUP 7.38 04/15/2014 95,250
300,000 YONKERS RACING CORPORATION++ 11.38 07/15/2016 312,000
851,850
---------------
APPAREL & ACCESSORY STORES: 0.74%
256,093 NEIMAN MARCUS GROUP INCORPORATED<<Y 9.00 10/15/2015 231,124
---------------
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS: 0.71%
210,000 LEVI STRAUSS & COMPANY 9.75 01/15/2015 219,975
---------------
AUTOMOTIVE REPAIR, SERVICES & PARKING: 0.73%
245,000 TRW AUTOMOTIVE INCORPORATED++ 7.25 03/15/2017 226,625
---------------
BEVERAGES: 0.03%
10,000 COTT BEVERAGES INCORPORATED++ 8.38 11/15/2017 10,000
---------------
BUSINESS SERVICES: 5.60%
160,000 CLEAN HARBORS INCORPORATED++ 7.63 08/15/2016 161,000
368,578 COSO GEOTHERMAL POWER HOLDINGS++(i) 7.00 07/15/2026 307,762
250,000 FIRST DATA CORPORATION 9.88 09/24/2015 222,500
195,000 IRON MOUNTAIN INCORPORATED 8.38 08/15/2021 199,388
160,000 RAINBOW NATIONAL SERVICES LLC++ 10.38 09/01/2014 167,600
200,000 RENTAL SERVICE CORPORATION 9.50 12/01/2014 195,750
150,000 SUNGARD DATA SYSTEMS INCORPORATED 9.13 08/15/2013 152,250
100,000 SUNGARD DATA SYSTEMS INCORPORATED 10.25 08/15/2015 102,500
250,000 UNITED RENTALS NORTH AMERICA INCORPORATED<< 7.75 11/15/2013 230,625
1,739,375
---------------
CASINO & GAMING: 3.54%
307,000 POKAGON GAMING AUTHORITY++ 10.38 06/15/2014 320,048
410,000 TUNICA-BILOXI GAMING AU++ 9.00 11/15/2015 366,950
300,000 TURNING STONE CASINO RESORT ENTERPRISE++ 9.13 09/15/2014 291,750
211,000 WATERFORD GAMING LLC++(i) 8.63 09/15/2014 120,278
1,099,026
---------------
CHEMICALS & ALLIED PRODUCTS: 0.84%
300,000 HUNTSMAN INTERNATIONAL LLC++ 5.50 06/30/2016 260,250
---------------
COAL MINING: 1.69%
150,000 ARCH COAL INCORPORATED++ 8.75 08/01/2016 154,500
225,000 JAMES RIVER COAL COMPANY 9.38 06/01/2012 222,750
150,000 MASSEY ENERGY COMPANY 6.88 12/15/2013 147,750
525,000
---------------
COMMUNICATIONS: 10.88%
175,000 CENTENNIAL CELLULAR COMMUNICATIONS CORPORATION 10.13 06/15/2013 180,250
100,000 CHARTER COMMUNICATION OPT LLC CAPITAL++ 10.38 04/30/2014 101,750
200,000 CHARTER COMMUNICATIONS HOLDINGS II LLC/CHARTER COMMUNICATIONS
CAPITAL CORPORATION#### 10.25 09/15/2010 249,000
Wells Fargo Advantage Income Funds 41
Portfolio of Investments--November 30, 2009 (Unaudited)
STRATEGIC INCOME FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
COMMUNICATIONS (continued)
$ 350,000 CSC HOLDINGS INCORPORATED++ 8.50% 06/15/2015 $ 367,938
90,000 CSC HOLDINGS INCORPORATED++ 8.63 02/15/2019 95,400
215,000 FRONTIER COMMUNICATIONS CORPORATION 8.25 05/01/2014 220,913
225,000 INTELSAT BERMUDA LIMITED++(o)(o) 0.14 02/04/2017 222,750
100,000 LEVEL 3 FINANCING INCORPORATED 8.75 02/15/2017 83,750
300,000 METROPCS WIRELESS INCORPORATED 9.25 11/01/2014 300,750
270,000 NEXTEL COMMUNICATIONS INCORPORATED SERIES D 7.38 08/01/2015 249,750
30,000 NIELSEN FINANCE LLC COMPANY 11.63 02/01/2014 32,250
150,000 NIELSEN FINANCE LLC COMPANY 11.50 05/01/2016 161,250
100,000 NIELSEN FINANCE LLC/NIELSEN FINANCE COMPANY## 12.50 08/01/2016 87,500
285,000 QWEST COMMUNICATIONS INTERNATIONAL INCORPORATED++ 8.00 10/01/2015 285,000
295,000 SPRINT NEXTEL CORPORATION 6.00 12/01/2016 254,438
45,000 SPRINT NEXTEL CORPORATION 8.38 08/15/2017 43,875
200,000 TIME WARNER TELECOMMUNICATION HOLDINGS 9.25 02/15/2014 205,500
235,000 WINDSTREAM CORPORATION 8.63 08/01/2016 236,763
3,378,827
---------------
DIVERSIFIED FINANCIAL SERVICES: 0.16%
50,000 UPC GERMANY GMBH++ 8.13 12/01/2017 49,875
---------------
ELECTRIC INTERGRATED: 0.50%
170,000 MIRANT AMERICAS GENERATION LLC SENIOR NOTES 8.50 10/01/2021 153,850
---------------
ELECTRIC UTILITIES: 0.28%
90,000 RRI ENERGY INCORPORATED 7.88 06/15/2017 85,725
---------------
ELECTRIC, GAS & SANITARY SERVICES: 3.13%
60,000 CHESAPEAKE ENERGY CORPORATION 9.50 02/15/2015 62,850
340,000 ENERGY FUTURE HOLDINGS 10.88 11/01/2017 238,850
150,000 INERGY LP/INERGY FINANCE CORPORATION 6.88 12/15/2014 145,125
280,000 NRG ENERGY INCORPORATED 7.38 02/01/2016 278,600
345,000 TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC SERIES B 10.25 11/01/2015 244,950
970,375
---------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT: 0.68%
200,000 BWAY CORPORATION++ 10.00 04/15/2014 209,500
---------------
FOOD & KINDRED PRODUCTS: 2.65%
230,000 DEAN FOODS COMPANY 7.00 06/01/2016 221,950
100,000 JBS USA LLC/JBS USA FINANCE INCORPORATED++ 11.63 05/01/2014 111,125
270,000 PINNACLE FOODS LLC CORPORATION 9.25 04/01/2015 278,870
200,000 SMITHFIELD FOODS INCORPORATED++ 10.00 07/15/2014 209,500
821,445
---------------
FOREST PRODUCTS & PAPER: 2.60%
300,000 APPLETON PAPERS INCORPORATED++ 11.25 12/15/2015 253,875
250,000 BOISE PAPER HOLDINGS LLC++ 9.00 11/01/2017 255,000
275,000 VERSO PAPER HOLDINGS LLC++<< 11.50 07/01/2014 299,750
808,625
---------------
HEALTH CARE: 0.63%
200,000 HEALTHSOUTH CORPORATION 8.13 02/15/2020 196,000
---------------
HEALTH SERVICES: 5.30%
400,000 COMMUNITY HEALTH SYSTEMS INCORPORATED SERIES WI 8.88 07/15/2015 408,000
470,000 HCA INCORPORATED 9.25 11/15/2016 497,025
42 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
STRATEGIC INCOME FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
HEALTH SERVICES (continued)
$ 85,000 HCA INCORPORATED++ 7.88% 02/15/2020 $ 87,125
190,000 TENET HEALTHCARE CORPORATION 9.25 02/01/2015 199,500
200,000 US ONCOLOGY INCORPORATED++ 9.13 08/15/2017 208,500
240,000 VANGUARD HEALTH HOLDINGS 9.00 10/01/2014 247,200
1,647,350
---------------
HOLDING & OTHER INVESTMENT OFFICES: 0.98%
300,000 KAR HOLDINGS INCORPORATED 8.75 05/01/2014 304,500
---------------
HOUSEHOLD PRODUCTS, WARE: 1.56%
180,000 ACCO BRANDS CORPORATION++ 10.63 03/15/2015 193,275
300,000 YANKEE ACQUISITION CORPORATION 8.50 02/15/2015 292,500
485,775
---------------
INDUSTRIAL: 1.20%
222,504 PARMALAT BAKERY(i) 5.00 07/09/2012 186,904
222,504 PARMALAT DAIRY(i) 5.00 07/09/2010 186,904
373,808
---------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 1.16%
155,000 CASELLA WASTE SYSTEMS INCORPORATED++ 11.00 07/15/2014 166,238
190,000 SPX CORPORATION 7.63 12/15/2014 193,800
360,038
---------------
INTERNET SOFTWARE: 0.74%
225,000 NETFLIX INCORPORATED++ 8.50 11/15/2017 230,625
---------------
LEGAL SERVICES: 0.79%
250,000 FTI CONSULTING INCORPORATED 7.75 10/01/2016 246,563
---------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL
GOODS: 0.71%
210,000 INVACARE CORPORATION 9.75 02/15/2015 219,975
---------------
MEDIA: 1.63%
50,000 BELO CORPORATION 8.00 11/15/2016 50,375
150,000 SALEM COMMUNICATIONS++ 9.63 12/15/2016 153,000
300,000 SINCLAIR TELEVISION GROUP++ 9.25 11/01/2017 304,125
507,500
---------------
METAL MINING: 0.03%
16,958 NORANDA ALUMINUM HOLDING CORPORATIONY 7.02 11/15/2014 10,090
---------------
MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS: 0.48%
140,000 TEREX CORPORATION 10.88 06/01/2016 148,750
---------------
MISCELLANEOUS MANUFACTURING INDUSTRIES: 2.66%
270,000 ALH FINANCE LLC/ALH FINANCE CORPORATION 8.50 01/15/2013 264,600
490,000 CLARKE AMERICAN CORPORATION 9.50 05/15/2015 459,988
100,000 TENNECO AUTOMOTIVE INCORPORATED SERIES B 10.25 07/15/2013 102,750
827,338
---------------
MOTION PICTURES: 1.16%
205,000 CINEMARK USA INCORPORATED++ 8.63 06/15/2019 211,150
140,000 WMG ACQUISITION CORPORATION++ 9.50 06/15/2016 150,500
361,650
---------------
Wells Fargo Advantage Income Funds 43
Portfolio of Investments--November 30, 2009 (Unaudited)
STRATEGIC INCOME FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
NON-DEPOSITORY CREDIT INSTITUTIONS: 4.49%
$ 175,000 DISCOVER FINANCIAL SERVICES 10.25% 07/15/2019 $ 205,539
265,000 FORD MOTOR CREDIT COMPANY LLC 7.80 06/01/2012 264,794
170,000 FORD MOTOR CREDIT COMPANY LLC 7.00 10/01/2013 165,956
145,000 FORD MOTOR CREDIT COMPANY LLC 8.00 12/15/2016 144,412
300,000 GMAC LLC++ 6.88 09/15/2011 288,750
130,000 GMAC LLC++ 6.00 12/15/2011 122,363
105,000 GMAC LLC++ 6.75 12/01/2014 93,975
125,000 GMAC LLC++ 8.00 11/01/2031 107,188
1,392,977
---------------
OFFICE EQUIPMENT: 0.88%
250,000 INTERFACE INCORPORATED 11.38 11/01/2013 273,438
---------------
OIL & GAS: 1.24%
25,000 ANTERO RESOURCES FINANCE++ 9.38 12/01/2017 25,063
160,000 COMSTOCK RESOURCES INCORPORATED 8.38 10/15/2017 160,400
200,000 PLAINS EXPLORATION & PRODUCTION COMPANY 8.63 10/15/2019 200,500
385,963
---------------
OIL & GAS EXTRACTION: 6.00%
130,000 BILL BARRETT CORPORATION 9.88 07/15/2016 137,150
225,000 CHESAPEAKE ENERGY CORPORATION 6.38 06/15/2015 209,250
425,000 HILCORP ENERGY++ 7.75 11/01/2015 409,063
280,000 KEY ENERGY SERVICES INCORPORATED 8.38 12/01/2014 273,350
200,000 PENN VIRGINIA CORPORATION 10.38 06/15/2016 215,500
170,000 PETROHAWK ENERGY CORPORATION 7.88 06/01/2015 169,575
160,000 QUICKSILVER RESOURCES INCORPORATED 11.75 01/01/2016 177,800
270,000 RANGE RESOURCES CORPORATION 7.50 05/15/2016 271,350
1,863,038
---------------
PACKAGING: 0.32%
100,000 GRAHAM PACK COMPANY LP GPC++ 8.25 01/01/2017 97,750
---------------
PAPER & ALLIED PRODUCTS: 1.90%
245,000 DOMTAR CORPORATION 10.75 06/01/2017 284,200
300,000 GRAHAM PACKAGING COMPANY INCORPORATED 9.88 10/15/2014 304,500
588,700
---------------
PERSONAL SERVICES: 1.01%
325,000 SERVICE CORPORATION INTERNATIONAL SERIES WI 7.00 06/15/2017 313,625
---------------
PETROLEUM REFINING & RELATED INDUSTRIES: 2.52%
105,000 ASHLAND INCORPORATED++ 9.13 06/01/2017 112,875
280,000 HOLLY CORPORATION++ 9.88 06/15/2017 290,500
190,000 SANDRIDGE ENERGY INCORPORATEDY 8.63 04/01/2015 182,163
210,000 SANDRIDGE ENERGY INCORPORATED++ 8.00 06/01/2018 197,925
783,463
---------------
PIPELINES: 0.90%
305,000 DYNEGY HOLDINGS INCORPORATED 8.38 05/01/2016 279,838
---------------
PRIMARY METAL INDUSTRIES: 1.34%
220,000 BELDEN CDT INCORPORATED 7.00 03/15/2017 212,850
200,000 STEEL DYNAMICS INCORPORATED++ 8.25 04/15/2016 202,000
414,850
---------------
44 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
STRATEGIC INCOME FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES: 0.67%
$ 250,000 MEDIMEDIA (USA) INCORPORATED++ 11.38% 11/15/2014 $ 208,750
---------------
PUBLISHING: 0.42%
140,000 TL ACQUISITIONS INCORPORATED SENIOR NOTES++ 10.50 01/15/2015 129,850
---------------
RESTAURANTS: 0.49%
150,000 LANDRY S RESTAURANT INCORPORATED++ 11.63 12/01/2015 152,250
---------------
RETAIL: 2.59%
245,000 FERRELLGAS PARTNERS LP++ 9.13 10/01/2017 254,800
300,000 MACY'S RETAIL HOLDINGS INCORPORATION 7.45 07/15/2017 298,125
250,000 TOYS R US PROPERTY COMPANY++ 8.50 12/01/2017 250,000
802,925
---------------
RUBBER & MISCELLANEOUS PLASTICS PRODUCTS: 0.75%
180,000 GOODYEAR TIRE & RUBBER COMPANY 9.00 07/01/2015 184,050
45,000 GOODYEAR TIRE & RUBBER COMPANY 10.50 05/15/2016 48,375
232,425
---------------
STONE, CLAY, GLASS & CONCRETE PRODUCTS: 0.61%
190,000 OWENS-ILLINOIS INCORPORATED 7.80 05/15/2018 190,475
---------------
TELECOMMUNICATIONS: 2.62%
230,000 CINCINNATI BELL 8.25 10/15/2017 228,275
150,000 FRONTIER COMMUNICATIONS 8.13 10/01/2018 150,375
205,000 GEOEYE INCORPORATED++ 9.63 10/01/2015 212,175
200,000 GLOBAL CROSSING LIMITED++ 12.00 09/15/2015 213,000
10,000 INMARSAT FINANCE PLC++ 7.38 12/01/2017 10,100
813,925
---------------
TOTAL CORPORATE BONDS & NOTES (COST $26,433,565) 26,665,651
---------------
MUNICIPAL BONDS & NOTES: 0.42%
ALABAMA: 0.42%
200,000 COUNTY OF JEFFERSON AL WATERS SUB-SERIES B-1-C (SEWER REVENUE,
FGIC INSURED)+/-(a) 0.71 02/01/2042 70,000
25,000 COUNTY OF JEFFERSON AL SEWER REVENUE SERIES C-2 (SEWER REVENUE,
FGIC INSURED)+/-(a) 0.67 02/01/2042 8,750
125,000 COUNTY OF JEFFERSON AL SEWER REVENUE SERIES C-5 (SEWER REVENUE,
XLCA COMPANY INSURED)+/-(a) 0.72 02/01/2040 43,750
25,000 COUNTY OF JEFFERSON AL SEWER REVENUE SERIES C-9 (SEWER REVENUE,
FIRST SECURITY BANK LOC)+/-(a) 0.36 02/01/2042 8,740
131,240
---------------
TOTAL MUNICIPAL BONDS & NOTES (COST $129,345) 131,240
---------------
FOREIGN CORPORATE BONDS@: 3.68%
400,000 INEOS GROUP HOLDINGS PLC++ 8.50 02/15/2016 264,000
130,000 INMARSAT FINANCE PLC(o)(o) 10.38 11/15/2012 134,550
250,000 INTELSAT (BERMUDA) LIMITED 9.25 06/15/2016 253,125
175,000 INTELSAT (BERMUDA) LIMITED 11.25 06/15/2016 186,813
290,000 VIRGIN MEDIA FINANCE PLC 9.50 08/15/2016 304,500
TOTAL FOREIGN CORPORATE BONDS (COST $1,252,546) 1,142,988
---------------
Wells Fargo Advantage Income Funds 45
Portfolio of Investments--November 30, 2009 (Unaudited)
STRATEGIC INCOME FUND
SHARES SECURITY NAME VALUE
- ------------ ------------------------------------------------------------------ ---------------
COMMON STOCKS: 1.28%
COMMUNICATIONS: 0.51%
42,900 QWEST COMMUNICATIONS INTERNATIONAL INCORPORATED $ 156,585
---------------
OIL & GAS EXTRACTION: 0.39%
5,080 CHESAPEAKE ENERGY CORPORATION 121,514
---------------
PIPELINES: 0.38%
5,930 THE WILLIAMS COMPANIES INCORPORATED 117,948
---------------
TOTAL COMMON STOCKS (COST $523,866) 396,047
---------------
YIELD
--------
COLLATERAL FOR SECURITIES LENDING: 2.56%
COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.44%
34,309 AIM STIT-LIQUID ASSETS PORTFOLIO(s) 0.21% 34,309
34,309 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(s) 0.16 34,309
34,309 DREYFUS CASH MANAGEMENT FUND INSTITUTIONAL(s) 0.11 34,309
34,309 DWS MONEY MARKET SERIES INSTITUTIONAL(s) 0.20 34,309
137,236
---------------
INTEREST MATURITY
PRINCIPAL RATE DATE
- ------------ -------- -----------
COLLATERAL INVESTED IN OTHER ASSETS: 2.12%
$ 6,671 ALLIED IRISH BANKS NORTH AMERICA INCORPORATED 0.26 12/07/2009 6,671
2,383 AMSTEL FUNDING CORPORATION++(p) 1.25 12/18/2009 2,381
2,383 ANTALIS US FUNDING CORPORATION++(p) 0.18 12/03/2009 2,383
7,148 ANTALIS US FUNDING CORPORATION++(p) 0.20 12/04/2009 7,148
5,718 ARABELLA FINANCE LLC++(p) 0.35 12/01/2009 5,718
8,101 ARABELLA FINANCE LLC++(p) 0.40 12/03/2009 8,101
238 ARABELLA FINANCE LLC++(p) 0.40 12/04/2009 238
4,765 ASPEN FUNDING CORPORATION++(p) 0.18 12/21/2009 4,765
14,295 BANK OF AMERICA 0.18 12/23/2009 14,294
41,433 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $41,433) 0.16 12/01/2009 41,433
7,148 BANK OF IRELAND 0.35 12/01/2009 7,148
5,718 BANK OF IRELAND 0.50 12/02/2009 5,718
2,308 BARTON CAPITAL CORPORATION++(p) 0.18 12/01/2009 2,308
1,191 BELMONT FUNDING LLC++(p) 0.50 12/01/2009 1,191
6,195 BNP PARIBAS (NEW YORK) 0.21 12/08/2009 6,195
5,242 BNP PARIBAS (NEW YORK) 0.21 12/14/2009 5,242
14,295 BRYANT BANK FUNDING++ 0.18 12/23/2009 14,294
11,913 CAFCO LLC++ 0.17 12/09/2009 11,912
524 CALCASIEU PARISH LA+/-ss 0.40 12/01/2027 524
11,436 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY+/-ss 0.23 11/01/2026 11,436
1,525 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.35 06/01/2028 1,525
11,913 CHARTA LLC++(p) 0.17 12/09/2009 11,912
1,264 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.30 10/01/2038 1,264
2,383 COOK COUNTY IL+/-ss 0.40 11/01/2030 2,383
14,460 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES
(MATURITY VALUE $14,460) 0.17 12/01/2009 14,460
8,101 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.40 12/15/2037 8,101
5,718 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/02/2009 5,718
46 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
STRATEGIC INCOME FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 5,718 DEXIA CREDIT LOCAL DE FRANCE SA 0.27% 12/04/2009 $ 5,718
6,909 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/07/2009 6,909
11,913 E.ON AG++ 0.17 12/21/2009 11,912
11,913 ENI FINANCE USA INCORPORATED++ 0.17 12/18/2009 11,912
12,389 FORTIS FUNDING LLC++ 0.20 12/29/2009 12,387
12,866 GDF SUEZ++ 0.17 12/15/2009 12,865
9,530 GEMINI SECURITIZATION INCORPORATED++(p) 0.18 12/10/2009 9,530
11,903 GOLDMAN SACHS REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $11,903) 0.17 12/01/2009 11,903
11,913 GOTHAM FUNDING CORPORATION++ 0.18 12/15/2009 11,912
2,383 GRAMPIAN FUNDING++(p) 0.25 12/03/2009 2,383
10,007 GRAMPIAN FUNDING++(p) 0.28 12/15/2009 10,006
30,663 GRYPHON FUNDING LIMITED(i)(a) 0.00 08/05/2010 11,404
7,834 HAMILTON COUNTY OHIO HOSPITALS+/-ss 0.20 05/15/2037 7,834
786 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.30 11/01/2042 786
3,860 HOUSTON TX UTILITY SYSTEM+/-ss 0.27 05/15/2034 3,860
1,363 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.30 07/01/2029 1,363
953 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.29 01/01/2018 953
9,530 ING USA FUNDING LLC 0.19 12/07/2009 9,530
2,383 ING USA FUNDING LLC 0.18 12/09/2009 2,382
36,584 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $36,584) 0.17 12/01/2009 36,584
4,765 JUPITER SECURITIZATION CORPORATION++(p) 0.18 12/02/2009 4,765
2,383 JUPITER SECURITIZATION CORPORATION++ 0.18 12/03/2009 2,383
1,430 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.29 04/15/2025 1,430
14,295 KBC BANK NV BRUSSELS 0.18 12/01/2009 14,295
2,859 LLOYDS TSB BANK PLC 0.18 12/17/2009 2,859
9,530 LLOYDS TSB BANK PLC (NEW YORK) 0.20 12/07/2009 9,530
3,812 LMA AMERICAS LLC++(p) 0.18 12/11/2009 3,812
2,144 LMA AMERICAS LLC++(p) 0.18 12/17/2009 2,144
7,148 LMA AMERICAS LLC++(p) 0.19 12/21/2009 7,147
2,144 LOUISIANA PUBLIC FACILITIES AUTHORITY+/-ss 0.19 10/01/2033 2,144
11,818 MASSACHUSETTS HEFA+/-ss 0.25 10/01/2034 11,818
1,308 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.24 02/01/2036 1,308
10,007 NATIXIS 0.27 12/07/2009 10,007
953 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.31 01/01/2018 953
10,483 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.22 07/01/2034 10,483
9,530 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.24 12/01/2040 9,530
11,913 NEWPORT FUNDING CORPORATION++(p) 0.18 12/15/2009 11,912
2,333 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.30 01/01/2034 2,333
4,820 RBS SECURITIES INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES
(MATURITY VALUE $4,820) 0.18 12/01/2009 4,820
1,668 REGENCY MARKETS #1 LLC++(p) 0.18 12/04/2009 1,668
7,920 REGENCY MARKETS #1 LLC++(p) 0.20 12/09/2009 7,919
2,383 ROMULUS FUNDING CORPORATION++ 0.30 12/15/2009 2,382
8,577 ROYAL BANK OF SCOTLAND PLC 0.20 12/02/2009 8,577
6,671 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.20 12/01/2028 6,671
9,530 SOCIETE GENERALE NORTH AMERICA 0.19 12/18/2009 9,529
596 STARBIRD FUNDING CORPORATION++(p) 0.15 12/01/2009 596
9,530 STARBIRD FUNDING CORPORATION++(p) 0.20 12/03/2009 9,530
11,913 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 0.18 12/18/2009 11,912
2,859 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 12/17/2009 2,859
9,672 TULIP FUNDING CORPORATION++(p) 0.19 12/07/2009 9,672
3,145 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.24 07/01/2032 3,145
9,530 UBS AG (STAMFORD CT) 0.31 12/04/2009 9,530
Wells Fargo Advantage Income Funds 47
Portfolio of Investments--November 30, 2009 (Unaudited)
STRATEGIC INCOME FUND
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
- ------------ ------------------------------------------------------------------ -------- ----------- ---------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 14,295 UNICREDITO ITALIANO (NEW YORK) 0.25% 01/04/2010 $ 14,291
1,430 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.29 12/15/2040 1,430
94,370 VFNC CORPORATION++(i)+/-(a) 0.24 09/30/2010 47,185
596 VICTORY RECEIVABLES CORPORATION++(p) 0.15 12/01/2009 596
2,383 VICTORY RECEIVABLES CORPORATION++(p) 0.19 12/08/2009 2,382
7,895 VICTORY RECEIVABLES CORPORATION++ 0.18 12/16/2009 7,895
658,038
---------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $748,842) 795,274
---------------
SHARES YIELD
- ------------ --------
SHORT-TERM INVESTMENTS: 7.88%
2,447,090 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++(u) 0.13 2,447,090
---------------
TOTAL SHORT-TERM INVESTMENTS (COST $2,447,090) 2,447,090
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $31,535,254)* 101.68% 31,578,290
OTHER ASSETS AND LIABILITIES, NET (1.68) (521,535)
------ ---------------
TOTAL NET ASSETS 100.00% $ 31,056,755
------ ---------------
- ----------
++ 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.
(o)(o) Stepped coupon bond. Interest rate presented is yield to maturity.
<< All or a portion of this security is on loan.
Y Payment-in-kind (PIK) securities are securities in which the issuer may
make interest or dividend payments in cash or additional securities.
These additional securities generally have the same terms as the original
holdings.
(i) Illiquid security.
#### This security is currently in default with regards to scheduled interest
and/or principal payments.
## Zero coupon bond. Interest rate presented is yield to maturity.
+/- Variable rate investments.
@ Foreign bond principal is denominated in local currency.
(s) Rate shown is the 1-day annualized yield at period end.
(p) Asset-backed commercial paper.
ss These securities are subject to a demand feature which reduces the
effective maturity.
(a) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The
Wells Fargo Advantage Money Market Fund does not pay an investment
advisory fee.
+++ Short-term security of an affiliate of the Fund with a cost of
$2,447,090.
(u) Rate shown is the 7-day annualized yield at period end.
* Cost for federal income tax purposes is $31,570,017 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 1,326,533
Gross unrealized depreciation (1,318,260)
-----------
Net unrealized appreciation $ 8,273
The accompanying notes are an integral part of these financial statements.
48 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
TOTAL RETURN BOND FUND
FACE/SHARE
AMOUNT SECURITY NAME VALUE
- ------------ ------------------------------------------------------------------ ---------------
INVESTMENTS IN AFFILIATED MASTER PORTFOLIOS: 99.30%
NA WELLS FARGO ADVANTAGE TOTAL RETURN BOND PORTFOLIO $ 2,283,419,796
TOTAL INVESTMENTS IN AFFILIATED MASTER PORTFOLIOS (COST $2,199,894,940) 2,283,419,796
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $2,199,894,940)* 99.30% 2,283,419,796
OTHER ASSETS AND LIABILITIES, NET 0.70 16,017,471
------ ---------------
TOTAL NET ASSETS 100.00% $ 2,299,437,267
------ ---------------
- ----------
* Cost for federal income tax purposes is $2,211,324,429 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 83,524,856
Gross unrealized depreciation (11,429,489)
------------
Net unrealized appreciation $ 72,095,367
The accompanying notes are an integral part of these financial statements.
THIS PAGE IS INTENTIONALLY LEFT BLANK.
50 Wells Fargo Advantage Income Funds
Statements of Assets and Liabilities--November 30, 2009 (Unaudited)
Diversified Income
Bond Fund Plus Fund
----------- ------------
ASSETS
Investments
In securities, at value (including securities on loan) ................ $ 0 $437,003,360
Collateral received for securities loaned ............................. 0 78,463,595
In affiliated Master Portfolio(s) ..................................... 47,115,137 0
In affiliates ......................................................... 0 62,352,721
----------- ------------
Total Investments at value (see cost below) .............................. 47,115,137 577,819,676
----------- ------------
Cash ..................................................................... 25,000 307,239
Receivable for Fund shares issued ........................................ 114,479 961,479
Receivable for investment sold ........................................... 0 9,159,922
Receivable for dividends and interest .................................... 0 3,319,535
Variation margin receivable on futures contracts ......................... 0 60,703
Prepaid expenses and other assets ........................................ 0 0
----------- ------------
Total Assets ................................................................ 47,254,616 591,628,554
----------- ------------
LIABILITIES
Payable for Fund shares redeemed ......................................... 300 253,294
Security sold short, at value ............................................ 0 0
Payable for investment purchased ......................................... 0 86,655,681
Dividends payable ........................................................ 0 0
Payable upon receipt of securities loaned ................................ 0 78,122,693
Payable to investment advisor and affiliates ............................. 0 251,465
Accrued expenses and other liabilities ................................... 6,245 233,285
----------- ------------
Total liabilties ............................................................ 6,545 165,516,418
----------- ------------
TOTAL NET ASSETS ............................................................ $47,248,071 $426,112,136
=========== ============
NET ASSETS CONSIST OF
Paid-in capital .......................................................... $47,770,027 $418,831,013
Undistributed/overdistributed investment income .......................... 41,143 530,235
Accumulated net realized gain (loss) on investments ...................... (558,045) (8,598,783)
Net unrealized appreciation (depreciation) of investments ................ (5,054) 14,882,475
Net unrealized appreciation of collateral received for securities loaned 0 215,782
Net unrealized appreciation of futures ................................... 0 251,414
----------- ------------
TOTAL NET ASSETS ............................................................ $47,248,071 $426,112,136
=========== ============
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE (1)
Net asets - Class A ...................................................... NA $117,941,014
Shares Outstanding - Class A ............................................. NA 10,254,099
Net asset value per share - Class A ...................................... NA $ 11.50
Maximum offering price per share - Class A ............................... NA $ 12.04(2)
Net assets - Class B ..................................................... NA $ 2,887,383
Shares Outstanding - Class B ............................................. NA 250,805
Net asset value and offering price per share - Class B ................... NA $ 11.51
Net assets - Class C ..................................................... NA $ 10,478,284
Shares Outstanding - Class C ............................................. NA 911,168
Net asset value and offering price per share - Class C ................... NA $ 11.50
Net assets - Administrator Class ......................................... $47,248,071 NA
Shares Outstanding - Administrator Class ................................. 1,953,279 NA
Net asset value and offering price per share - Administrator Class ....... $ 24.19 NA
Net assets - Institutional Class ......................................... NA $106,407,788
Shares Outstanding - Institutional Class ................................. NA 9,251,412
Net asset value and offering price per share - Institutional Class ....... NA $ 11.50
Net assets - Investor Class .............................................. NA $188,397,667
Shares Outstanding - Investor Class ...................................... NA 16,379,154
Net asset value and offering price per share - Investor Class ............ NA $ 11.50
----------- ------------
Investment at cost .......................................................... $47,120,191 $562,471,181
----------- ------------
Securities on loan, at value ................................................ $ 0 $ 74,795,480
----------- ------------
Proceeds received from short sales .......................................... $ 0 $ 0
- ----------
(1.) Each Fund has unlimited number of authorized shares.
(2.) Maximum offering price is computed as 100/95.50 of net asset value. On
investment of $50,000 or more, the offering price is reduced.
(3.) Maximum offering price is computed as 100/97.00 of net asset value. On
investment of $50,000 or more, the offering price is reduced.
(4.) Maximum offering price is computed as 100/98.00 of net asset value. On
investment of $50,000 or more, the offering price is reduced.
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 51
Statements of Assets and Liabilities--November 30, 2009 (Unaudited)
Inflation- Short Duration
Protected Government Stable I Strategic Total Return
Bond Fund Bond Fund Income Fund Income Fund Bond Fund
- ----------- -------------- ------------ ----------- --------------
$ 0 $1,074,454,598 $ 0 $28,335,926 $ 0
0 519,116,345 0 795,274 0
86,792,832 0 195,736,823 0 2,283,419,796
0 24,456,845 0 2,447,090 0
- ----------- -------------- ------------ ----------- --------------
86,792,832 1,618,027,788 195,736,823 31,578,290 2,283,419,796
- ----------- -------------- ------------ ----------- --------------
25,000 100,000 25,000 9,425 0
225,138 6,345,860 185,085 253,279 19,404,090
0 87,247,033 0 49,750 0
1,096 5,415,881 0 671,215 0
0 0 0 0 0
0 109,239 0 9,415 0
- ----------- -------------- ------------ ----------- --------------
87,044,066 1,717,245,801 195,946,908 32,571,374 2,302,823,886
- ----------- -------------- ------------ ----------- --------------
428,875 1,407,151 561,453 163,218 2,088,002
0 17,665,313 0 0 0
0 72,524,933 0 497,007 0
96,358 285,500 0 44,688 786,711
0 518,955,497 0 788,700 0
18,451 542,087 11,483 21,006 250,397
8,757 155,314 22,532 0 261,509
- ----------- -------------- ------------ ----------- --------------
552,441 611,535,795 595,468 1,514,619 3,386,619
- ----------- -------------- ------------ ----------- --------------
$86,491,625 $1,105,710,006 $195,351,440 $31,056,755 $2,299,437,267
=========== ============== ============ =========== ==============
$86,301,152 $1,090,925,402 $224,694,664 $36,947,753 $2,191,462,540
957,111 (1,063,015) (831,151) (23,215) 2,710,486
(5,346,122) (1,540,957) (9,604,386) (5,910,819) 21,739,385
4,579,484 17,286,765 (18,907,687) (3,396) 83,524,856
0 101,811 0 46,432 0
0 0 0 0 0
- ----------- -------------- ------------ ----------- --------------
$86,491,625 $1,105,710,006 $195,351,440 $31,056,755 $2,299,437,267
=========== ============== ============ =========== ==============
$36,636,458 $ 170,716,356 $ 36,139,486 $20,134,350 $ 588,713,060
3,512,318 16,331,796 3,767,623 2,259,828 44,521,327
$ 10.43 $ 10.45 $ 9.59 $ 8.91 $ 13.22
$ 10.92(2) $ 10.77(3) $ 9.79(4) $ 9.33(2) $ 13.84(2)
$ 4,572,047 $ 3,146,664 $ 1,020,829 $ 3,726,626 $ 8,981,629
441,555 300,820 106,448 418,186 678,635
$ 10.35 $ 10.46 $ 9.59 $ 8.91 $ 13.23
$11,600,943 $ 46,039,709 $ 3,965,635 $ 7,195,779 $ 27,130,879
1,119,135 4,397,647 414,703 809,555 2,061,311
$ 10.37 $ 10.47 $ 9.56 $ 8.89 $ 13.16
$33,682,177 $ 459,513,954 $154,225,490 NA $1,016,750,884
3,230,580 43,908,259 16,084,438 NA 78,206,041
$ 10.43 $ 10.47 $ 9.59 NA $ 13.00
NA $ 426,293,323 NA NA $ 625,474,224
NA 40,732,961 NA NA 48,132,235
NA $ 10.47 NA NA $ 12.99
NA NA NA NA $ 32,386,591
NA NA NA NA 2,492,238
NA NA NA NA $ 12.99
- ----------- -------------- ------------ ----------- --------------
$82,213,348 $1,600,512,492 $214,644,510 $31,535,254 $2,199,894,940
- ----------- -------------- ------------ ----------- --------------
$ 0 $ 512,153,046 $ 0 $ 701,350 $ 0
- ----------- -------------- ------------ ----------- --------------
$ 0 $ 17,538,594 $ 0 $ 0 $ 0
52 Wells Fargo Advantage Income Funds
Statements of Operations--For the Six Months Ended November 30, 2009 (Unaudited)
Diversified Income
Bond Fund Plus Fund
----------- ------------
INVESTMENT INCOME
Dividends ................................................................ $ 0 $ 0
Interest ................................................................. 0 11,023,367
Interest allocated from affiliated Master Portfolio(s) ................... 999,158 0
Interest from affiliated securities ...................................... 0 41,966
Securities lending income ................................................ 0 66,668
Securities lending income allocated from affiliated Master Portfolio(s)... 3,953 0
Expenses allocated from affiliated Master Portfolio(s) ................... (92,541) 0
Waivers allocated from affiliated Master Portfolio(s) .................... 11,184 0
---------- ------------
Total investment income ..................................................... 921,754 11,132,001
---------- ------------
EXPENSES
Advisory fees ............................................................ 54,251 1,005,923
Administration fees
Fund level ............................................................ 10,850 100,592
Class A ............................................................... NA 96,064
Class B ............................................................... NA 2,984
Class C ............................................................... NA 7,654
Administrator Class ................................................... 21,700 NA
Institutional Class ................................................... NA 40,575
Investor Class ........................................................ NA 209,730
Custody fees ............................................................. 0 25,875
Shareholder servicing fees
Class A ............................................................... NA 133,422
Class B ............................................................... NA 4,144
Class C ............................................................... NA 10,631
Administrator Class ................................................... 54,251 NA
Investor Class ........................................................ NA 216,628
Accounting fees .......................................................... 9,707 16,814
Distribution fees
Class B ............................................................... NA 12,432
Class C ............................................................... NA 31,893
Professional fees ........................................................ 11,910 28,596
Registration fees ........................................................ 5,155 20,685
Shareholder reports ...................................................... 1,360 7,103
Trustees' fees ........................................................... 5,289 5,289
Other fees and expenses .................................................. 1,086 7,592
---------- ------------
Total Expenses .............................................................. 175,559 1,984,626
---------- ------------
LESS
Waived fees and reimbursed expenses ...................................... (105,011) (240,249)
Net expenses ............................................................. 70,548 1,744,377
---------- ------------
Net investment income ....................................................... 851,206 9,387,624
---------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
NET REALIZED GAIN (LOSS) FROM
Securities ............................................................... 0 3,154,910
Collateral received for securities loaned ................................ 0 (1,454,227)
Future transactions ...................................................... 0 387,736
Securities transactions allocated from Master Portfolio(s) ............... 62,421 0
Future transactions allocated from Master Portfolio(s) ................... 31,882 0
---------- ------------
Net realized gain (loss) from investments ................................... 94,303 2,088,419
---------- ------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF
Securities ............................................................... 0 20,077,016
Collateral received for securities loaned ................................ 0 2,177,927
Securities transactions allocated from Master Portfolio(s) ............... 2,794,249 0
Future transactions ...................................................... 0 178,921
Short sales transactions ................................................. 0 0
---------- ------------
Net changed in unrealized appreciation (depreciation) of investments ........ 2,794,249 22,433,864
---------- ------------
Net realized and unrealized gain (loss) on investments ...................... 2,888,552 24,522,283
---------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........................ $3,739,758 $ 33,909,907
========== ============
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 53
Statements of Operations--For the Six Months Ended November 30, 2009 (Unaudited)
Inflation- Short Duration
Protected Government Stable Strategic Total Return
Bond Fund Bond Fund Income Fund Income Fund Bond Fund
- ----------- -------------- ------------ ----------- --------------
$ 0 $ 0 $ 0 $ 8,931 $ 0
0 14,430,604 0 1,197,017 0
1,922,829 0 2,660,469 0 48,024,369
0 106,915 0 1,708 0
0 298,352 0 2,903 0
13,715 0 1,012 0 329,066
(181,898) 0 (493,340) 0 (3,813,984)
5,886 0 46,418 0 646,803
- ----------- ----------- ----------- ---------- -------------
1,760,532 14,835,871 2,214,559 1,210,559 45,186,254
- ----------- ----------- ----------- ---------- -------------
0 1,747,992 0 67,209 0
20,194 225,003 56,634 6,721 487,719
30,789 124,386 30,730 15,870 349,855
4,375 3,684 963 3,637 8,494
9,802 27,000 3,244 4,688 17,243
15,407 199,311 93,860 NA 444,415
NA 131,636 NA NA 247,724
NA NA NA NA 29,224
0 72,182 0 2,313 0
37,929 163,474 42,680 22,041 485,556
6,076 5,117 1,337 5,052 11,798
13,614 37,500 4,505 6,511 23,948
38,517 446,951 234,396 NA 1,110,204
NA NA NA NA 31,552
417 33,414 14,074 10,717 64,629
18,228 15,350 4,011 15,155 35,393
40,841 112,498 13,515 19,535 71,844
9,325 26,483 14,376 24,669 13,234
6,620 18,879 14,925 16,582 26,008
3,780 59,493 9,941 5,026 110,524
5,289 5,289 5,289 5,289 5,289
937 7,370 4,810 2,647 17,859
- ----------- ----------- ----------- ---------- -------------
262,140 3,463,012 549,290 233,662 3,592,512
- ----------- ----------- ----------- ---------- -------------
(73,750) (715,911) (203,621) (51,112) (411,468)
188,390 2,747,101 345,669 182,550 3,181,044
- ----------- ----------- ----------- ---------- -------------
1,572,142 12,088,770 1,868,890 1,028,009 42,005,210
- ----------- ----------- ----------- ---------- -------------
0 10,743,157 0 132,866 0
0 (2,018,084) 0 (63,468) 0
0 0 0 0 0
(237,098) 0 (6,797,587) 0 34,656,902
(14,289) 0 0 0 0
- ----------- ----------- ----------- ---------- -------------
(251,387) 8,725,073 (6,797,587) 69,398 34,656,902
- ----------- ----------- ----------- ---------- -------------
0 3,360,023 0 2,484,073 0
0 2,359,547 0 119,695 0
4,702,558 0 16,022,262 0 70,543,576
0 0 0 0 0
0 151,720 0 0 0
- ----------- ----------- ----------- ---------- -------------
4,702,558 5,871,290 16,022,262 2,603,768 70,543,576
- ----------- ----------- ----------- ---------- -------------
4,451,171 14,596,363 9,224,675 2,673,166 105,200,478
- ----------- ----------- ----------- ---------- -------------
$ 6,023,313 $26,685,133 $11,093,565 $3,701,175 $ 147,205,688
=========== =========== =========== ========== =============
54 Wells Fargo Advantage Income Funds
Statements of Changes in Net Assets
DIVERSIFIED BOND FUND
---------------------------------
For the Six Months For the Year
Ended November 30, Ended May 31,
2009 (Unaudited) 2009
------------------ -------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets ....................................................................... $ 41,204,875 $ 48,447,014
OPERATIONS
Net investment income ...................................................................... 851,206 1,874,698
Net realized gain (loss) on investments .................................................... 94,303 (391,633)
Net change in unrealized appreciation (depreciation) of investments ........................ 2,794,249 (1,841,031)
------------ ------------
Net increase (decrease) in net assets resulting from operations ................................. 3,739,758 (357,966)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income
Class A ................................................................................ NA NA
Class B ................................................................................ NA NA
Class C ................................................................................ NA NA
Administrator Class .................................................................... (865,721) (1,892,597)
Institutional Class .................................................................... NA NA
Investor Class ......................................................................... NA NA
Net realized gain
Administrator Class .................................................................... NA (768,605)
Return of capital
Class A ................................................................................ NA NA
Class B ................................................................................ NA NA
Class C ................................................................................ NA NA
Administrator Class .................................................................... 0 0
------------ ------------
Total distributions to shareholders ............................................................. (865,721) (2,661,202)
------------ ------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold - Class A ........................................................ NA NA
Reinvestment of distributions - Class A .................................................... NA NA
Cost of shares redeemed - Class A .......................................................... NA NA
------------ ------------
Net increase in net assets resulting from capital share transactions - Class A ............. NA NA
------------ ------------
Proceeds from shares sold - Class B ........................................................ NA NA
Reinvestment of distributions - Class B .................................................... NA NA
Cost of shares redeemed - Class B .......................................................... NA NA
------------ ------------
Net decrease in net assets resulting from capital share transactions - Class B ............. NA NA
------------ ------------
Proceeds from shares sold - Class C ........................................................ NA NA
Reinvestment of distributions - Class C .................................................... NA NA
Cost of shares redeemed - Class C .......................................................... NA NA
------------ ------------
Net increase in net assets resulting from capital share transactions - Class C ............. NA NA
------------ ------------
Proceeds from shares sold - Administrator Class ............................................ 12,523,343 18,513,023
Reinvestment of distributions - Administrator Class ........................................ 708,747 2,104,003
Cost of shares redeemed - Administrator Class .............................................. (10,062,931) (24,839,997)
------------ ------------
Net increase (decrease) in net assets resulting from capital share transactions -
Administrator Class ..................................................................... 3,169,159 (4,222,971)
------------ ------------
Proceeds from shares sold - Institutional Class ............................................ NA NA
Reinvestment of distributions - Institutional Class ........................................ NA NA
Cost of shares redeemed - Institutional Class .............................................. NA NA
------------ ------------
Net increase in net assets resulting from capital share transactions -
Institutional Class ..................................................................... NA NA
------------ ------------
Proceeds from shares sold - Investor Class ................................................. NA NA
Reinvestment of distributions - Investor Class ............................................. NA NA
Cost of shares redeemed - Investor Class ................................................... NA NA
------------ ------------
Net increase in net assets resulting from capital share transactions - Investor Class ...... NA NA
------------ ------------
Net increase (decrease) in net assets resulting from capital share transactions - Total ......... 3,169,159 (4,222,971)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ........................................................... 6,043,196 (7,242,139)
------------ ------------
ENDING NET ASSETS ............................................................................... $ 47,248,071 $ 41,204,875
------------ ------------
ENDING BALANCE OF UNDISTRIBUTED/OVERDISTRIBUTED NET INVESTMENT INCOME (LOSS) .................... $ 41,143 $ 55,658
------------ ------------
- ----------
(1.) Institutional and Investor Classes in Income Plus Fund were incepted on
July 18, 2008. Information presented for these classes are for the period
from July 18, 2008 to May 31, 2009.
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 55
Statements of Changes in Net Assets
INCOME PLUS FUND INFLATION-PROTECTED BOND FUND SHORT DURATION GOVERNMENT BOND FUND
- -------------------------------- ------------------------------- -----------------------------------
For the Six For the Six
Months Ended For the Year Months Ended For the Year For the Six Months For the Year
November 30, 2009 Ended May 31, November 30, Ended May 31, Ended November 30, Ended May
(Unaudited) 2009(1) 2009 (Unaudited) 2009 2009 (Unaudited) 31, 2009
- ----------------- ------------- ---------------- ------------- ------------------- --------------
$380,702,756 $ 55,417,546 $ 74,746,471 $ 57,185,803 $ 732,750,975 $ 415,217,874
9,387,624 12,859,760 1,572,142 362,617 12,088,770 20,931,888
2,088,419 11,131,099 (251,387) (1,385,256) 8,725,073 8,004,084
22,433,864 (6,356,043) 4,702,558 (122,047) 5,871,290 11,503,610
------------ ------------- ------------ ------------ -------------- -------------
33,909,907 17,634,816 6,023,313 (1,144,686) 26,685,133 40,439,582
------------ ------------- ------------ ------------ -------------- -------------
(2,454,885) (2,946,594) (216,267) (526,483) (1,848,891) (2,985,787)
(61,158) (171,645) (19,924) (113,418) (41,766) (189,747)
(165,180) (194,300) (47,828) (167,516) (277,485) (307,187)
NA NA (213,862) (305,104) (5,898,910) (13,589,786)
(2,460,984) (4,045,227) NA NA (5,147,396) (5,633,629)
(4,123,553) (6,898,290) NA NA NA NA
NA NA 0 0 0 0
0 0 0 (266,004) 0 0
0 0 0 (46,645) 0 0
0 0 0 (73,287) 0 0
NA NA 0 (177,814) 0 0
------------ ------------- ------------ ------------ -------------- -------------
(9,265,760) (14,256,056) (497,881) (1,676,271) (13,214,448) (22,706,136)
------------ ------------- ------------ ------------ -------------- -------------
33,100,636 97,234,618 8,240,902 21,513,522 99,330,917 92,317,088
2,235,460 2,559,304 172,786 689,772 1,331,893 1,993,928
(18,860,233) (50,458,626) (5,950,597) (13,952,533) (37,561,986) (57,789,704)
------------ ------------- ------------ ------------ -------------- -------------
16,475,863 49,335,296 2,463,091 8,250,761 63,100,824 36,521,312
------------ ------------- ------------ ------------ -------------- -------------
135,107 534,076 36,449 619,215 50,970 1,051,174
42,862 119,500 14,812 124,896 35,801 158,421
(1,430,144) (3,789,812) (1,036,309) (2,464,581) (1,774,703) (3,845,820)
------------ ------------- ------------ ------------ -------------- -------------
1,252,175 (3,136,236) (985,048) (1,720,470) (1,687,932) (2,636,225)
------------ ------------- ------------ ------------ -------------- -------------
3,129,134 3,549,139 1,853,080 2,859,337 29,228,373 13,257,067
132,834 149,748 29,738 178,014 204,866 251,457
(546,771) (1,430,263) (1,246,618) (2,131,500) (1,873,595) (2,921,869)
------------ ------------- ------------ ------------ -------------- -------------
2,715,197 2,268,624 636,200 905,851 27,559,644 10,586,655
------------ ------------- ------------ ------------ -------------- -------------
NA NA 14,170,090 25,357,439 166,851,020 248,015,759
NA NA 159,190 325,214 5,007,036 11,576,615
NA NA (10,223,801) (12,737,170) (74,550,148) (159,659,439)
------------ ------------- ------------ ------------ -------------- -------------
NA NA 4,105,479 12,945,483 97,307,908 99,932,935
------------ ------------- ------------ ------------ -------------- -------------
7,945,431 137,346,081 NA NA 237,831,939 201,761,842
2,407,045 3,983,039 NA NA 5,088,673 5,598,716
(7,749,855) (45,358,819) NA NA (69,712,710) (51,965,580)
------------ ------------- ------------ ------------ -------------- -------------
2,602,621 95,970,301 NA NA 173,207,902 155,394,978
------------ ------------- ------------ ------------ -------------- -------------
11,305,561 412,431,804 NA NA NA NA
3,585,657 5,965,196 NA NA NA NA
(14,667,491) (240,928,535) NA NA NA NA
------------ ------------- ------------ ------------ -------------- -------------
223,727 177,468,465 NA NA NA NA
------------ ------------- ------------ ------------ -------------- -------------
20,765,233 321,906,450 6,219,722 20,381,625 359,488,346 299,799,655
------------ ------------- ------------ ------------ -------------- -------------
45,409,380 325,285,210 11,745,154 17,560,668 372,959,031 317,533,101
------------ ------------- ------------ ------------ -------------- -------------
$426,112,136 $ 380,702,756 $ 86,491,625 $ 74,746,471 $1,105,710,006 $ 732,750,975
------------ ------------- ------------ ------------ -------------- -------------
$ 530,235 $ 408,371 $ 957,111 $ (117,150) $ (1,063,015) $ 62,663
------------ ------------- ------------ ------------ -------------- -------------
56 Wells Fargo Advantage Income Funds
Statements of Changes in Net Assets
DIVERSIFIED BOND FUND
--------------------------------------
For the
Six Months Ended
November 30, 2009 For the Year Ended
(Unaudited) May 31, 2009
----------------- ------------------
SHARES ISSUED AND REDEEMED
Shares sold - Class A ................................................................ NA NA
Shares issued in reinvestment of distributions - Class A ............................. NA NA
Shares redeemed - Class A ............................................................ NA NA
-------- ----------
Net increase in shares outstanding - Class A ......................................... NA NA
-------- ----------
Shares sold - Class B ................................................................ NA NA
Shares issued in reinvestment of distributions - Class B ............................. NA NA
Shares redeemed - Class B ............................................................ NA NA
-------- ----------
Net decrease in shares outstanding - Class B ......................................... NA NA
-------- ----------
Shares sold - Class C ................................................................ NA NA
Shares issued in reinvestment of distributions - Class C ............................. NA NA
Shares redeemed - Class C ............................................................ NA NA
-------- ----------
Net increase in shares outstanding - Class C ......................................... NA NA
-------- ----------
Shares sold - Administrator Class .................................................... 530,130 801,320
Shares issued in reinvestment of distributions - Administrator Class ................. 30,339 92,700
Shares redeemed - Administrator Class ................................................ (428,216) (1,076,946)
-------- ----------
Net increase (decrease) in shares outstanding - Administrator Class .................. 132,253 (182,926)
-------- ----------
Shares sold - Institutional Class .................................................... NA NA
Shares issued in reinvestment of distributions - Institutional Class ................. NA NA
Shares redeemed - Institutional Class ................................................ NA NA
-------- ----------
Net increase in shares outstanding - Institutional Class ............................. NA NA
-------- ----------
Shares sold - Investor Class ......................................................... NA NA
Shares issued in reinvestment of distributions - Investor Class ...................... NA NA
Shares redeemed - Investor Class ..................................................... NA NA
-------- ----------
Net increase in shares outstanding - Investor Class .................................. NA NA
-------- ----------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS.. 132,253 (182,926)
======== ==========
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 57
Statements of Changes in Net Assets
INCOME PLUS FUND INFLATION-PROTECTED BOND FUND SHORT DURATION GOVERNMENT BOND FUND
- -------------------------------------- -------------------------------------- --------------------------------------
For the For the For the
Six Months Ended Six Months Ended Six Months Ended
November 30, 2009 For the Year Ended November 30, 2009 For the Year Ended November 30, 2009 For the Year Ended
(Unaudited) May 31, 2009 (Unaudited) May 31, 2009 (Unaudited) May 31, 2009
- ----------------- ------------------ ----------------- ------------------ ----------------- ------------------
2,974,499 9,251,771 826,783 2,197,461 9,596,620 9,108,705
199,992 243,162 16,662 71,391 128,285 197,609
(1,697,029) (4,783,670) (592,211) (1,451,449) (3,625,619) (5,718,572)
---------- ----------- ---------- ---------- ---------- -----------
1,477,462 4,711,263 251,234 817,403 6,099,286 3,587,742
---------- ----------- ---------- ---------- ---------- -----------
11,856 50,756 3,712 61,805 4,871 104,527
3,843 11,385 1,432 12,936 3,452 15,739
(128,634) (359,030) (104,822) (255,883) (170,992) (381,787)
---------- ----------- ---------- ---------- ---------- -----------
(112,935) (296,889) (99,678) (181,142) (162,669) (261,521)
---------- ----------- ---------- ---------- ---------- -----------
278,703 336,619 187,883 287,626 2,813,497 1,301,690
11,876 14,244 2,869 18,460 19,694 24,867
(48,961) (136,692) (125,177) (224,080) (180,605) (288,663)
---------- ----------- ---------- ---------- ---------- -----------
241,618 214,171 65,575 82,006 2,652,586 1,037,894
---------- ----------- ---------- ---------- ---------- -----------
NA NA 1,437,006 2,673,457 16,060,255 24,637,292
NA NA 15,371 33,796 481,892 1,147,454
NA NA (1,035,215) (1,356,278) (7,185,553) (15,845,856)
---------- ----------- ---------- ---------- ---------- -----------
NA NA 417,162 1,350,975 9,356,594 9,938,890
---------- ----------- ---------- ---------- ---------- -----------
716,767 12,959,087 NA NA 22,922,177 19,882,551
215,579 379,827 NA NA 489,416 552,957
(701,402) (4,318,446) NA NA (6,727,196) (5,147,278)
---------- ----------- ---------- ---------- ---------- -----------
230,944 9,020,468 NA NA 16,684,397 15,288,230
---------- ----------- ---------- ---------- ---------- -----------
1,012,007 38,728,389 NA NA NA NA
321,083 568,584 NA NA NA NA
(1,317,679) (22,933,229) NA NA NA NA
---------- ----------- ---------- ---------- ---------- -----------
15,411 16,363,744 NA NA NA NA
---------- ----------- ---------- ---------- ---------- -----------
1,852,500 30,012,757 634,293 2,069,242 34,630,194 29,591,235
========== =========== ========== ========== ========== ===========
58 Wells Fargo Advantage Income Funds
Statements of Changes in Net Assets
STABLE INCOME FUND
--------------------------------
For the
Six Months Ended For the
November 30, 2009 Year Ended
(Unaudited) May 31, 2009
----------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets ........................................................................ $227,174,979 $ 307,921,140
OPERATIONS
Net investment income ....................................................................... 1,868,890 9,365,093
Net realized gain (loss) on investments ..................................................... (6,797,587) 16,585
Net change in unrealized appreciation (depreciation) of investments ......................... 16,022,262 (19,279,516)
------------ -------------
Net increase (decrease) in net assets resulting from operations ................................ 11,093,565 (9,897,838)
------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income
Class A .................................................................................. (410,485) (1,201,291)
Class B .................................................................................. (8,583) (39,880)
Class C .................................................................................. (30,463) (90,268)
Administrator Class ...................................................................... (2,422,722) (8,219,290)
Institutional Class ...................................................................... NA NA
Investor Class ........................................................................... NA NA
------------ -------------
Total distributions to shareholders ............................................................ (2,872,253) (9,550,729)
------------ -------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold - Class A ......................................................... 7,215,447 7,993,713
Proceeds from redemption fees - Class A ..................................................... 0 0
Reinvestment of distributions - Class A ..................................................... 316,566 946,464
Cost of shares redeemed - Class A ........................................................... (5,569,003) (17,420,695)
------------ -------------
Net increase (decrease) in net assets resulting from capital share transactions - Class A ... 1,963,010 (8,480,518)
------------ -------------
Proceeds from shares sold - Class B ......................................................... 16,627 353,356
Proceeds from redemption fees - Class B ..................................................... 0 0
Reinvestment of distributions - Class B ..................................................... 7,739 35,070
Cost of shares redeemed - Class B ........................................................... (206,709) (1,334,441)
------------ -------------
Net decrease in net assets resulting from capital share transactions - Class B .............. (182,343) (946,015)
------------ -------------
Proceeds from shares sold - Class C ......................................................... 784,220 454,616
Proceeds from redemption fees - Class C ..................................................... 0 0
Reinvestment of distributions - Class C ..................................................... 28,222 83,814
Cost of shares redeemed - Class C ........................................................... (190,852) (1,138,394)
------------ -------------
Net increase (decrease) in net assets resulting from capital share transactions - Class C ... 621,590 (599,964)
------------ -------------
Proceeds from shares sold - Administrator Class ............................................. 41,562,617 119,421,932
Reinvestment of distributions - Administrator Class ......................................... 1,718,572 4,844,535
Cost of shares redeemed - Administrator Class ............................................... (85,728,297) (175,537,564)
------------ -------------
Net increase (decrease) in net assets resulting from capital share transactions -
Administrator Class....................................................................... (42,447,108) (51,271,097)
------------ -------------
Proceeds from shares sold - Institutional Class ............................................. NA NA
Reinvestment of distributions - Institutional Class ......................................... NA NA
Cost of shares redeemed - Institutional Class ............................................... NA NA
------------ -------------
Net increase (decrease) in net assets resulting from capital share transactions -
Institutional Class....................................................................... NA NA
------------ -------------
Proceeds from shares sold - Investor Class .................................................. NA NA
Reinvestment of distributions - Investor Class .............................................. NA NA
Cost of shares redeemed - Investor Class .................................................... NA NA
------------ -------------
Net increase in net assets resulting from capital share transactions - Investor Class ....... NA NA
------------ -------------
Net increase (decrease) in net assets resulting from capital share transactions - Total ........ (40,044,851) (61,297,594)
------------ -------------
NET INCREASE (DECREASE) IN NET ASSETS .......................................................... (31,823,539) (80,746,161)
------------ -------------
ENDING NET ASSETS .............................................................................. $195,351,440 $ 227,174,979
------------ -------------
ENDING BALANCE OF UNDISTRIBUTED/OVERDISTRIBUTED NET INVESTMENT INCOME (LOSS) ................... $ (831,151) $ 172,212
------------ -------------
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 59
Statements of Changes in Net Assets
STRATEGIC INCOME FUND TOTAL RETURN BOND FUND
- ------------------------------- ---------------------------------
For the For the
Six Months Ended For the Six Months Ended For the
November 30, 2009 Year Ended November 30, 2009 Year Ended
(Unaudited) May 31, 2009 (Unaudited) May 31, 2009
- ----------------- ------------ ----------------- --------------
$22,817,826 $ 36,325,770 $1,699,606,530 $1,446,576,062
1,028,009 2,123,290 42,005,210 66,503,030
69,398 (3,962,761) 34,656,902 (2,348,235)
2,603,768 (1,321,204) 70,543,576 23,808,181
----------- ------------ -------------- --------------
3,701,175 (3,160,675) 147,205,688 87,962,976
----------- ------------ -------------- --------------
(698,638) (1,485,176) (7,564,359) (4,107,511)
(146,763) (412,902) (154,236) (460,291)
(183,341) (225,212) (303,836) (252,701)
NA NA (18,222,416) (40,007,782)
NA NA (13,591,044) (24,966,966)
NA NA (497,787) (319,693)
----------- ------------ -------------- --------------
(1,028,742) (2,123,290) (40,333,678) (70,114,944)
----------- ------------ -------------- --------------
5,975,723 4,603,809 380,908,911 219,055,215
0 2,224 0 0
576,997 1,322,341 7,225,455 3,899,286
(3,692,200) (12,232,235) (57,900,517) (55,475,655)
----------- ------------ -------------- --------------
2,860,520 (6,303,861) 330,233,849 167,478,846
----------- ------------ -------------- --------------
119,025 389,673 159,096 1,245,408
0 1,226 0 0
133,898 374,041 138,258 413,387
(1,200,039) (2,546,933) (1,910,207) (4,879,297)
----------- ------------ -------------- --------------
(947,116) (1,781,993) (1,612,853) (3,220,502)
----------- ------------ -------------- --------------
3,872,397 1,192,016 14,806,259 7,426,671
0 560 0 0
104,806 160,172 229,548 208,712
(324,111) (1,490,873) (1,358,472) (1,014,900)
----------- ------------ -------------- --------------
3,653,092 (138,125) 13,677,335 6,620,483
----------- ------------ -------------- --------------
NA NA 268,480,430 344,581,002
NA NA 16,456,053 35,569,612
NA NA (133,732,877) (435,425,002)
----------- ------------ -------------- --------------
NA NA 151,203,606 (55,274,388)
----------- ------------ -------------- --------------
NA NA 137,464,847 388,318,424
NA NA 10,096,087 21,752,026
NA NA (161,102,871) (304,934,619)
----------- ------------ -------------- --------------
NA NA (13,541,937) 105,135,831
----------- ------------ -------------- --------------
NA NA 16,298,698 18,924,099
NA NA 481,747 303,986
NA NA (3,781,718) (4,785,919)
----------- ------------ -------------- --------------
NA NA 12,998,727 14,442,166
----------- ------------ -------------- --------------
5,566,496 (8,223,979) 492,958,727 235,182,436
----------- ------------ -------------- --------------
8,238,929 (13,507,944) 599,830,737 253,030,468
----------- ------------ -------------- --------------
$31,056,755 $ 22,817,826 $2,299,437,267 $1,699,606,530
----------- ------------ -------------- --------------
$ (23,215) $ (22,482) $ 2,710,486 $ 1,038,954
----------- ------------ -------------- --------------
60 Wells Fargo Advantage Income Funds
Statements of Changes in Net Assets
STABLE INCOME FUND
-------------------------------
For the
Six Months Ended For the
November 30, 2009 Year Ended
(Unaudited) May 31, 2009
----------------- ------------
SHARES ISSUED AND REDEEMED
Shares sold - Class A ................................................................ 761,543 840,881
Shares issued in reinvestment of distributions - Class A ............................. 33,492 100,750
Shares redeemed - Class A ............................................................ (589,837) (1,819,223)
---------- ----------
Net increase (decrease) in shares outstanding - Class A .............................. 205,198 (877,592)
---------- ----------
Shares sold - Class B ................................................................ 1,754 36,880
Shares issued in reinvestment of distributions - Class B ............................. 819 3,731
Shares redeemed - Class B ............................................................ (22,027) (139,686)
---------- ----------
Net decrease in shares outstanding - Class B ......................................... (19,454) (99,075)
---------- ----------
Shares sold - Class C ................................................................ 83,240 48,892
Shares issued in reinvestment of distributions - Class C ............................. 2,995 8,958
Shares redeemed - Class C ............................................................ (20,265) (120,074)
---------- ----------
Net increase (decrease) in shares outstanding - Class C .............................. 65,970 (62,224)
---------- ----------
Shares sold - Administrator Class .................................................... 4,401,720 12,683,987
Shares issued in reinvestment of distributions - Administrator Class ................. 181,951 516,377
Shares redeemed - Administrator Class ................................................ (9,028,661) (18,751,315)
---------- ----------
Net increase (decrease) in shares outstanding - Administrator Class .................. (4,444,990) (5,550,951)
---------- ----------
Shares sold - Institutional Class .................................................... NA NA
Shares issued in reinvestment of distributions - Institutional Class ................. NA NA
Shares redeemed - Institutional Class ................................................ NA NA
---------- ----------
Net increase (decrease) in shares outstanding - Institutional Class .................. NA NA
---------- ----------
Shares sold - Investor Class ......................................................... NA NA
Shares issued in reinvestment of distributions - Investor Class ...................... NA NA
Shares redeemed - Investor Class ..................................................... NA NA
---------- ----------
Net increase in shares outstanding - Investor Class .................................. NA NA
---------- ----------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS.. (4,193,276) (6,589,842)
========== ==========
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 61
Statements of Changes in Net Assets
STRATEGIC INCOME FUND TOTAL RETURN BOND FUND
- ------------------------------- -------------------------------
For the For the
Six Months Ended For the Six Months Ended For the
November 30, 2009 Year Ended November 30, 2009 Year Ended
(Unaudited) May 31, 2009 (Unaudited) May 31, 2009
- ----------------- ------------ ----------------- ------------
699,349 588,652 29,473,895 17,847,960
67,097 169,960 556,403 318,451
(437,302) (1,512,841) (4,455,730) (4,542,169)
------- -------- ---------- ----------
329,144 (754,229) 25,574,568 13,624,242
------- -------- ---------- ----------
14,030 47,588 12,517 101,994
15,620 48,326 10,684 34,006
(140,651) (324,691) (149,248) (401,557)
------- -------- ---------- ----------
(111,001) (228,777) (126,047) (265,557)
------- -------- ---------- ----------
455,900 156,207 1,153,204 605,039
12,163 20,771 17,764 17,214
(38,012) (193,838) (105,500) (83,917)
------- -------- ---------- ----------
430,051 (16,860) 1,065,468 538,336
------- -------- ---------- ----------
NA NA 21,141,367 28,662,659
NA NA 1,292,538 2,976,417
NA NA (10,602,061) (36,444,897)
------- -------- ---------- ----------
NA NA 11,831,844 (4,805,821)
------- -------- ---------- ----------
NA NA 10,883,744 32,279,951
NA NA 793,663 1,820,398
NA NA (12,723,978) (25,503,561)
------- -------- ---------- ----------
NA NA (1,046,571) 8,596,788
------- -------- ---------- ----------
NA NA 1,289,393 1,569,972
NA NA 37,788 25,296
NA NA (298,348) (399,553)
------- -------- ---------- ----------
NA NA 1,028,833 1,195,715
------- -------- ---------- ----------
648,194 (999,866) 38,328,095 18,883,703
======= ======== ========== ==========
62 Wells Fargo Advantage Income 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 on Investments Income Realized Gains
--------- ---------- -------------- ------------- --------------
DIVERSIFIED BOND FUND
Administrator Class
June 1, 2009 to November 30, 2009 (Unaudited) ........ $22.63 0.46 1.57 (0.47) 0.00
June 1, 2008 to May 31, 2009 ......................... $24.18 1.00 (1.13) (1.01) (0.41)
June 1, 2007 to May 31, 2008 ......................... $24.51 1.25 0.00(7) (1.23) (0.35)
June 1, 2006 to May 31, 2007 ......................... $24.40 1.18 0.29 (1.19) (0.17)
June 1, 2005 to May 31, 2006 ......................... $25.82 1.08 (1.21) (1.08) (0.21)
June 1, 2004 to May 31, 2005 ......................... $25.58 0.92 0.39 (0.92) (0.15)
INCOME PLUS FUND
Class A
June 1, 2009 to November 30, 2009 (Unaudited) ........ $10.82 0.26(8) 0.66 (0.24) 0.00
June 1, 2008 to May 31, 2009 ......................... $10.70 0.42(8) 0.15 (0.45) 0.00
June 1, 2007 to May 31, 2008 ......................... $10.65 0.48(8) 0.08 (0.51) 0.00
June 1, 2006 to May 31, 2007 ......................... $10.49 0.53(8) 0.19 (0.56) 0.00
June 1, 2005 to May 31, 2006 ......................... $10.99 0.47(8) (0.37) (0.60) 0.00
June 1, 2004 to May 31, 2005 ......................... $10.84 0.57 0.20 (0.62) 0.00
Class B
June 1, 2009 to November 30, 2009 (Unaudited) ........ $10.82 0.22(8) 0.67 (0.20) 0.00
June 1, 2008 to May 31, 2009 ......................... $10.70 0.35(8) 0.14 (0.37) 0.00
June 1, 2007 to May 31, 2008 ......................... $10.65 0.40(8) 0.08 (0.43) 0.00
June 1, 2006 to May 31, 2007 ......................... $10.49 0.45(8) 0.29 (0.48) 0.00
June 1, 2005 to May 31, 2006 ......................... $10.99 0.39(8) (0.37) (0.52) 0.00
June 1, 2004 to May 31, 2005 ......................... $10.84 0.46 0.23 (0.54) 0.00
Class C
June 1, 2009 to November 30, 2009 (Unaudited) ........ $10.82 0.22(8) 0.66 (0.20) 0.00
June 1, 2008 to May 31, 2009 ......................... $10.69 0.35(8) 0.15 (0.37) 0.00
June 1, 2007 to May 31, 2008 ......................... $10.65 0.40(8) 0.07 (0.43) 0.00
June 1, 2006 to May 31, 2007 ......................... $10.49 0.45(8) 0.21 (0.48) 0.00
June 1, 2005 to May 31, 2006 ......................... $10.99 0.39(8) (0.37) (0.52) 0.00
June 1, 2004 to May 31, 2005 ......................... $10.84 0.51 0.18 (0.54) 0.00
Institutional Class
June 1, 2009 to November 30, 2009 (Unaudited) ........ $10.82 0.27(8) 0.67 (0.26) 0.00
July 18, 2008(4) to May 31, 2009 ..................... $10.51 0.39(8) 0.36 (0.44) 0.00
Investor Class
June 1, 2009 to November 30, 2009 (Unaudited) ........ $10.82 0.26(8) 0.66 (0.24) 0.00
July 18, 2008(4) to May 31, 2009 ..................... $10.51 0.36(8) 0.36 (0.41) 0.00
- ----------
(1.) 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.
(2.) Calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued.
(3.) On June 20, 2008, Class Z was renamed to Investor Class.
(4.) Commencement of class operations.
(5.) Includes expenses allocated from the Master Portfolio(s) in which the Fund
invests.
(6.) Portfolio turnover rate represents the activity from the Fund's investment
in Master Portfolio(s).
(7.) Amount is less than $0.005.
(8.) Calculated based upon average shares outstanding.
(9.) The Fund changed its fiscal year-end from October 31 to May 31.
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 63
Financial Highlights
Ratio to Average Net Assets
Ending (Annualized)
Net Asset ------------------------------------ Portfolio Net Assets at
Value Per Net Investment Gross Net Total Turnover End of Period
Share Income Expenses Expenses Return(1) Rate(2) (000's omitted)
- --------- -------------- -------- -------- --------- --------- ---------------
$24.19 3.92% 1.18% 0.70%(5) 9.06% 89%(6) $ 47,248
$22.63 4.36% 1.15%(5) 0.70%(5) (0.39)% 224%(6) $ 41,205
$24.18 4.93% 1.07%(5) 0.70%(5) 5.16% 141%(6) $ 48,447
$24.51 4.72% 0.99%(5) 0.70%(5) 6.09% 158%(6) $ 80,075
$24.40 4.24% 0.97%(5) 0.70%(5) (0.53)% 163%(6) $ 98,574
$25.82 3.53% 0.91%(5) 0.70%(5) 5.24% 56%(6) $133,277
$11.50 4.69% 1.04% 0.90% 8.61% 166% $117,941
$10.82 4.01% 1.05% 0.90% 5.52% 455% $ 94,938
$10.70 4.50% 1.35% 1.00% 5.37% 245% $ 43,481
$10.65 4.96% 1.34% 1.00% 7.04% 205% $ 37,526
$10.49 4.38% 1.29% 1.00% 0.97% 171% $ 38,995
$10.99 5.48% 1.25% 0.58% 7.27% 132% $ 42,676
$11.51 3.85% 1.79% 1.65% 8.27% 166% $ 2,887
$10.82 3.30% 1.80% 1.65% 4.69% 455% $ 3,937
$10.70 3.75% 2.10% 1.75% 4.58% 245% $ 7,067
$10.65 4.24% 2.09% 1.75% 6.24% 205% $ 10,682
$10.49 3.61% 2.04% 1.75% 0.21% 171% $ 14,833
$10.99 4.76% 2.00% 1.32% 6.47% 132% $ 20,165
$11.50 3.87% 1.79% 1.65% 8.21% 166% $ 10,478
$10.82 3.32% 1.80% 1.65% 4.85% 455% $ 7,242
$10.69 3.75% 2.10% 1.75% 4.50% 245% $ 4,870
$10.65 4.23% 2.09% 1.75% 6.24% 205% $ 4,633
$10.49 3.63% 2.04% 1.75% 0.21% 171% $ 5,581
$10.99 4.74% 2.00% 1.32% 6.47% 132% $ 6,451
$11.50 4.90% 0.69% 0.61% 8.77% 166% $106,408
$10.82 4.29% 0.69% 0.61% 7.29% 455% $ 97,574
$11.50 4.57% 1.07% 0.94% 8.59% 166% $188,398
$10.82 3.94% 1.08% 0.94% 6.99% 455% $177,010
64 Wells Fargo Advantage Income 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 on Investments Income Realized Gains
---------- ---------- -------------- ------------- --------------
INFLATION-PROTECTED BOND FUND
Class A
June 1, 2009 to November 30, 2009 (Unaudited) .. $ 9.76 0.19 0.54 (0.06) 0.00
June 1, 2008 to May 31, 2009 ................... $10.22 0.07 (0.25) (0.19) 0.00
June 1, 2007 to May 31, 2008 ................... $ 9.62 0.54 0.62 (0.56) 0.00
June 1, 2006 to May 31, 2007 ................... $ 9.60 0.40 (0.04) (0.34) 0.00
June 1, 2005 to May 31, 2006 ................... $10.45 0.42(8) (0.63) (0.46) (0.18)
June 1, 2004 to May 31, 2005 ................... $10.04 0.37 0.43 (0.33) (0.06)
Class B
June 1, 2009 to November 30, 2009 (Unaudited) .. $ 9.71 0.18 0.50 (0.04) 0.00
June 1, 2008 to May 31, 2009 ................... $10.20 0.03 (0.29) (0.14) 0.00
June 1, 2007 to May 31, 2008 ................... $ 9.60 0.48 0.61 (0.49) 0.00
June 1, 2006 to May 31, 2007 ................... $ 9.58 0.34 (0.06) (0.26) 0.00
June 1, 2005 to May 31, 2006 ................... $10.42 0.35(8) (0.63) (0.38) (0.18)
June 1, 2004 to May 31, 2005 ................... $10.03 0.31 0.40 (0.26) (0.06)
Class C
June 1, 2009 to November 30, 2009 (Unaudited) .. $ 9.72 0.15 0.54 (0.04) 0.00
June 1, 2008 to May 31, 2009 ................... $10.20 0.01 (0.26) (0.14) 0.00
June 1, 2007 to May 31, 2008 ................... $ 9.61 0.45 0.63 (0.49) 0.00
June 1, 2006 to May 31, 2007 ................... $ 9.58 0.35 (0.06) (0.26) 0.00
June 1, 2005 to May 31, 2006 ................... $10.43 0.35(8) (0.63) (0.39) (0.18)
June 1, 2004 to May 31, 2005 ................... $10.04 0.31 0.40 (0.26) (0.06)
Administrator Class
June 1, 2009 to November 30, 2009 (Unaudited) .. $ 9.75 0.21 0.54 (0.07) 0.00
June 1, 2008 to May 31, 2009 ................... $10.21 0.12 (0.28) (0.21) 0.00
June 1, 2007 to May 31, 2008 ................... $ 9.60 0.59 0.61 (0.59) 0.00
June 1, 2006 to May 31, 2007 ................... $ 9.58 0.44 (0.06) (0.36) 0.00
June 1, 2005 to May 31, 2006 ................... $10.43 0.44(8) (0.63) (0.48) (0.18)
June 1, 2004 to May 31, 2005 ................... $10.03 0.39 0.43 (0.36) (0.06)
SHORT DURATION GOVERNMENT BOND FUND
Class A
June 1, 2009 to November 30, 2009 (Unaudited) .. $10.30 0.13(8) 0.16 (0.14) 0.00
June 1, 2008 to May 31, 2009 ................... $10.01 0.37 0.32 (0.40) 0.00
June 1, 2007 to May 31, 2008 ................... $ 9.85 0.40 0.18 (0.42) 0.00
June 1, 2006 to May 31, 2007 ................... $ 9.81 0.39 0.06 (0.41) 0.00
June 1, 2005 to May 31, 2006 ................... $10.01 0.33(8) (0.18) (0.35) 0.00
June 1, 2004 to May 31, 2005 ................... $10.13 0.27 (0.09) (0.30) 0.00
Class B
June 1, 2009 to November 30, 2009 (Unaudited) .. $10.31 0.09(8) 0.16 (0.10) 0.00
June 1, 2008 to May 31, 2009 ................... $10.01 0.30 0.32 (0.32) 0.00
June 1, 2007 to May 31, 2008 ................... $ 9.86 0.33 0.16 (0.34) 0.00
June 1, 2006 to May 31, 2007 ................... $ 9.81 0.33 0.06 (0.34) 0.00
June 1, 2005 to May 31, 2006 ................... $10.02 0.25(8) (0.19) (0.27) 0.00
June 1, 2004 to May 31, 2005 ................... $10.13 0.19 (0.08) (0.22) 0.00
Class C ........................................
June 1, 2009 to November 30, 2009 (Unaudited) $10.32 0.08(8) 0.17 (0.10) 0.00
June 1, 2008 to May 31, 2009 ................... $10.02 0.34 0.28 (0.32) 0.00
June 1, 2007 to May 31, 2008 ................... $ 9.87 0.31 0.18 (0.34) 0.00
June 1, 2006 to May 31, 2007 ................... $ 9.82 0.30 0.09 (0.34) 0.00
June 1, 2005 to May 31, 2006 ................... $10.03 0.25(8) (0.19) (0.27) 0.00
June 1, 2004 to May 31, 2005 ................... $10.14 0.14 (0.03) (0.22) 0.00
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 65
Financial Highlights
Ratio to Average Net Assets
Ending (Annualized)
Net Asset ---------------------------------- Portfolio Net Assets at
Return of Value Per Net Investment Gross Net Total Turnover End of Period
Capital Share Income Expenses Expenses Return(1) Rate(2) (000's omitted)
- --------- --------- -------------- -------- -------- --------- --------- ---------------
0.00 $10.43 3.93% 0.95% 0.85%(5) 7.50% 12%(6) $ 36,636
(0.09) $ 9.76 0.66% 0.95%(5) 0.83%(5) (1.68)% 53%(6) $ 31,826
0.00 $10.22 5.52% 1.23%(5) 0.85%(5) 12.34% 40%(6) $ 24,982
0.00 $ 9.62 3.89% 1.05%(5) 0.85%(5) 3.74% 37%(6) $ 21,115
0.00 $ 9.60 4.18% 1.22%(5) 0.85%(5) (2.11)% 47%(6) $ 27,726
0.00 $10.45 3.63% 1.23%(5) 0.86%(5) 8.12% 425%(6) $ 28,437
0.00 $10.35 3.30% 1.73% 1.60%(5) 7.03% 12%(6) $ 4,572
(0.09) $ 9.71 0.42% 1.72%(5) 1.59%(5) (2.51)% 53%(6) $ 5,255
0.00 $10.20 4.61% 1.98%(5) 1.60%(5) 11.53% 40%(6) $ 7,365
0.00 $ 9.60 3.27% 1.80%(5) 1.60%(5) 2.97% 37%(6) $ 7,321
0.00 $ 9.58 3.50% 1.97%(5) 1.60%(5) (2.76)% 47%(6) $ 10,149
0.00 $10.42 2.99% 1.99%(5) 1.60%(5) 7.13% 425%(6) $ 12,168
0.00 $10.37 3.19% 1.73% 1.60%(5) 7.12% 12%(6) $ 11,601
(0.09) $ 9.72 0.18% 1.69%(5) 1.59%(5) (2.41)% 53%(6) $ 10,237
0.00 $10.20 4.78% 1.98%(5) 1.60%(5) 11.41% 40%(6) $ 9,913
0.00 $ 9.61 3.27% 1.80%(5) 1.60%(5) 3.08% 37%(6) $ 7,202
0.00 $ 9.58 3.50% 1.97%(5) 1.60%(5) (2.85)% 47%(6) $ 10,248
0.00 $10.43 3.00% 1.99%(5) 1.60%(5) 7.12% 425%(6) $ 13,873
0.00 $10.43 4.19% 0.90% 0.60%(5) 7.67% 12%(6) $ 33,682
(0.09) $ 9.75 0.70% 0.88%(5) 0.60%(5) (1.53)% 53%(6) $ 27,428
0.00 $10.21 5.43% 1.06%(5) 0.60%(5) 12.74% 40%(6) $ 14,926
0.00 $ 9.60 3.76% 0.87%(5) 0.60%(5) 3.99% 37%(6) $ 16,527
0.00 $ 9.58 4.37% 1.04%(5) 0.60%(5) (1.88)% 47%(6) $ 63,869
0.00 $10.43 4.11% 0.93%(5) 0.60%(5) 8.30% 425%(6) $ 53,237
0.00 $10.45 2.42% 0.90% 0.85% 2.86% 252% $170,716
0.00 $10.30 3.61% 0.94% 0.85% 7.05% 277% $105,430
0.00 $10.01 4.02% 1.11% 0.85% 5.95% 210% $ 66,495
0.00 $ 9.85 4.04% 1.10% 0.85% 4.69% 493% $ 77,602
0.00 $ 9.81 3.30% 1.08% 0.85% 1.51% 316% $ 77,886
0.00 $10.01 2.44% 1.28% 0.86% 1.79% 272% $ 94,059
0.00 $10.46 1.81% 1.67% 1.60% 2.47% 252% $ 3,147
0.00 $10.31 2.90% 1.69% 1.60% 6.36% 277% $ 4,779
0.00 $10.01 3.29% 1.86% 1.60% 5.06% 210% $ 7,260
0.00 $ 9.86 3.29% 1.85% 1.60% 4.01% 493% $ 12,230
0.00 $ 9.81 2.55% 1.83% 1.60% 0.66% 316% $ 18,338
0.00 $10.02 1.74% 2.02% 1.61% 1.13% 272% $ 27,078
0.00 $10.47 1.59% 1.66% 1.60% 2.46% 252% $ 46,040
0.00 $10.32 2.82% 1.69% 1.60% 6.34% 277% $ 18,009
0.00 $10.02 3.28% 1.86% 1.60% 5.06% 210% $ 7,087
0.00 $ 9.87 3.29% 1.85% 1.60% 4.01% 493% $ 8,440
0.00 $ 9.82 2.54% 1.83% 1.60% 0.66% 316% $ 11,540
0.00 $10.03 1.59% 2.04% 1.62% 1.13% 272% $ 19,553
66 Wells Fargo Advantage Income Funds
Financial Highlights
Beginning Net Realized Distributions
Net Asset Net and Unrealized from Net Distributions
Value Investment Gain (Loss) Investment from Net
Per Share Income on Investments Income Realized Gains
--------- ---------- -------------- ------------- --------------
SHORT DURATION GOVERNMENT BOND FUND (continued)
Administrator Class
June 1, 2009 to November 30, 2009 (Unaudited).. $10.32 0.14(8) 0.17 (0.16) 0.00
June 1, 2008 to May 31, 2009 .................. $10.02 0.39 0.33 (0.42) 0.00
June 1, 2007 to May 31, 2008 .................. $ 9.86 0.42 0.18 (0.44) 0.00
June 1, 2006 to May 31, 2007 .................. $ 9.82 0.42 0.06 (0.44) 0.00
June 1, 2005 to May 31, 2006 .................. $10.03 0.35(8) (0.19) (0.37) 0.00
June 1, 2004 to May 31, 2005 .................. $10.14 0.29 (0.07) (0.33) 0.00
Institutional Class
June 1, 2009 to November 30, 2009 (Unaudited).. $10.32 0.15(8) 0.17 (0.17) 0.00
June 1, 2008 to May 31, 2009 .................. $10.02 0.41 0.33 (0.44) 0.00
June 1, 2007 to May 31, 2008 .................. $ 9.86 0.44 0.18 (0.46) 0.00
June 1, 2006 to May 31, 2007 .................. $ 9.82 0.44 0.06 (0.46) 0.00
June 1, 2005 to May 31, 2006 .................. $10.03 0.38(8) (0.20) (0.39) 0.00
April 8, 2005(4) to May 31, 2005 .............. $10.00 0.05 0.03 (0.05) 0.00
STABLE INCOME FUND
Class A
June 1, 2009 to November 30, 2009 (Unaudited).. $ 9.25 0.06(8) 0.39 (0.11) 0.00
June 1, 2008 to May 31, 2009 .................. $ 9.89 0.32 (0.64) (0.32) 0.00
June 1, 2007 to May 31, 2008 .................. $10.27 0.42 (0.38) (0.42) 0.00
June 1, 2006 to May 31, 2007 .................. $10.23 0.43 0.05 (0.44) 0.00
June 1, 2005 to May 31, 2006 .................. $10.38 0.40(8) (0.15) (0.40) 0.00
June 1, 2004 to May 31, 2005 .................. $10.33 0.16 0.03 (0.14) 0.00
Class B
June 1, 2009 to November 30, 2009 (Unaudited).. $ 9.25 0.03(8) 0.39 (0.08) 0.00
June 1, 2008 to May 31, 2009 .................. $ 9.88 0.25 (0.63) (0.25) 0.00
June 1, 2007 to May 31, 2008 .................. $10.26 0.34 (0.38) (0.34) 0.00
June 1, 2006 to May 31, 2007 .................. $10.22 0.34 0.06 (0.36) 0.00
June 1, 2005 to May 31, 2006 .................. $10.37 0.32(8) (0.15) (0.32) 0.00
June 1, 2004 to May 31, 2005 .................. $10.32 0.08 0.03 (0.06) 0.00
Class C
June 1, 2009 to November 30, 2009 (Unaudited).. $ 9.22 0.02(8) 0.40 (0.08) 0.00
June 1, 2008 to May 31, 2009 .................. $ 9.85 0.23 (0.61) (0.25) 0.00
June 1, 2007 to May 31, 2008 .................. $10.24 0.34 (0.39) (0.34) 0.00
June 1, 2006 to May 31, 2007 .................. $10.20 0.36 0.05 (0.37) 0.00
June 1, 2005 to May 31, 2006 .................. $10.35 0.32(8) (0.15) (0.32) 0.00
June 1, 2004 to May 31, 2005 .................. $10.30 0.07 0.04 (0.06) 0.00
Administrator Class
June 1, 2009 to November 30, 2009 (Unaudited).. $ 9.25 0.08(8) 0.38 (0.12) 0.00
June 1, 2008 to May 31, 2009 .................. $ 9.88 0.34 (0.63) (0.34) 0.00
June 1, 2007 to May 31, 2008 .................. $10.27 0.44 (0.39) (0.44) 0.00
June 1, 2006 to May 31, 2007 .................. $10.23 0.45 0.05 (0.46) 0.00
June 1, 2005 to May 31, 2006 .................. $10.38 0.42(8) (0.15) (0.42) 0.00
June 1, 2004 to May 31, 2005 .................. $10.33 0.20 0.02 (0.17) 0.00
STRATEGIC INCOME FUND
Class A
June 1, 2009 to November 30, 2009 (Unaudited).. $ 8.04 0.34 0.87 (0.34) 0.00
June 1, 2008 to May 31, 2009 .................. $ 9.46 0.72 (1.42) (0.72) 0.00
June 1, 2007 to May 31, 2008 .................. $10.62 0.68 (1.00) (0.68) (0.16)
June 1, 2006 to May 31, 2007 .................. $10.18 0.67 0.50 (0.67) (0.06)
June 1, 2005 to May 31, 2006 .................. $10.23 0.67 0.14 (0.67) (0.19)
November 1, 2004 to May 31, 2005(9) ........... $10.41 0.37 (0.18) (0.37) 0.00
November 1, 2003 to October 31, 2004 .......... $ 9.90 0.71 0.51 (0.71) 0.00
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 67
Financial Highlights
Ratio to Average
Ending Net Assets (Annualized)
Net Asset ---------------------------------- Portfolio Net Assets at
Value Per Net Investment Gross Net Total Turnover End of Period
Share Income Expenses Expenses Return(1) Rate(2) (000's omitted)
- --------- -------------- -------- -------- --------- --------- ---------------
$10.47 2.71% 0.81% 0.60% 2.99% 252% $459,514
$10.32 3.89% 0.84% 0.60% 7.42% 277% $356,409
$10.02 4.26% 0.93% 0.60% 6.21% 210% $246,592
$ 9.86 4.28% 0.92% 0.60% 4.95% 493% $310,530
$ 9.82 3.55% 0.90% 0.60% 1.67% 316% $401,837
$10.03 2.66% 0.98% 0.60% 2.16% 272% $444,331
$10.47 2.88% 0.57% 0.42% 3.08% 252% $426,293
$10.32 4.02% 0.59% 0.42% 7.61% 277% $248,124
$10.02 4.42% 0.67% 0.42% 6.40% 210% $ 87,784
$ 9.86 4.48% 0.65% 0.42% 5.13% 493% $ 55,973
$ 9.82 3.89% 0.63% 0.42% 1.85% 316% $ 27,172
$10.03 3.35% 0.76% 0.43% 0.91% 272% $ 10
$ 9.59 1.28% 0.93% 0.85%(5) 4.71% 5%(6) $ 36,139
$ 9.25 3.30% 0.94%(5) 0.85%(5) (3.24)% 7%(6) $ 32,958
$ 9.89 4.14% 0.96%(5) 0.85%(5) 0.35% 22%(6) $ 43,897
$10.27 4.18% 1.00%(5) 0.85%(5) 4.80% 21%(6) $ 48,629
$10.23 3.83% 1.06%(5) 0.87%(5) 2.47% 23%(6) $ 64,827
$10.38 1.48% 1.00%(5) 0.90%(5) 1.87% 43%(6) $ 83,406
$ 9.59 0.60% 1.68% 1.60%(5) 4.39% 5%(6) $ 1,021
$ 9.25 2.57% 1.69%(5) 1.60%(5) (3.90)% 7%(6) $ 1,164
$ 9.88 3.40% 1.71%(5) 1.60%(5) (0.42)% 22%(6) $ 2,222
$10.26 3.40% 1.75%(5) 1.60%(5) 3.98% 21%(6) $ 4,389
$10.22 3.06% 1.81%(5) 1.62%(5) 1.69% 23%(6) $ 11,519
$10.37 0.75% 1.75%(5) 1.65%(5) 1.00% 43%(6) $ 20,970
$ 9.56 0.46% 1.68% 1.60%(5) 4.34% 5%(6) $ 3,966
$ 9.22 2.55% 1.68%(5) 1.60%(5) (3.89)% 7%(6) $ 3,216
$ 9.85 3.37% 1.71%(5) 1.60%(5) (0.49)% 22%(6) $ 4,049
$10.24 3.43% 1.75%(5) 1.60%(5) 4.03% 21%(6) $ 3,935
$10.20 3.07% 1.81%(5) 1.62%(5) 1.70% 23%(6) $ 4,355
$10.35 0.74% 1.75%(5) 1.65%(5) 1.10% 43%(6) $ 7,137
$ 9.59 1.75% 0.85% 0.65%(5) 4.82% 5%(6) $154,225
$ 9.25 3.51% 0.86%(5) 0.65%(5) (2.95)% 7%(6) $189,837
$ 9.88 4.34% 0.78%(5) 0.65%(5) 0.45% 22%(6) $257,752
$10.27 4.38% 0.81%(5) 0.65%(5) 5.01% 21%(6) $312,988
$10.23 4.08% 0.88%(5) 0.65%(5) 2.70% 23%(6) $366,798
$10.38 1.76% 0.68%(5) 0.65%(5) 2.14% 43%(6) $356,223
$ 8.91 7.91% 1.48% 1.10% 15.28% 33% $ 20,134
$ 8.04 8.92% 1.49% 1.10% (6.75)% 41% $ 15,519
$ 9.46 6.93% 1.43% 1.10% (3.01)% 63% $ 25,406
$10.62 6.43% 1.39% 1.10% 11.97% 79% $ 33,921
$10.18 6.53% 1.61% 1.10% 8.18% 89% $ 19,858
$10.23 5.97% 1.57% 1.09% 1.79% 76% $ 13,254
$10.41 6.95% 1.52% 1.12% 12.70% 141% $ 13,786
68 Wells Fargo Advantage Income 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 on Investments Income Realized Gains
--------- ---------- -------------- ------------- --------------
STRATEGIC INCOME FUND (continued)
Class B
June 1, 2009 to November 30, 2009 (Unaudited) .... $ 8.04 0.30 0.88 (0.31) 0.00
June 1, 2008 to May 31, 2009 ..................... $ 9.47 0.66 (1.43) (0.66) 0.00
June 1, 2007 to May 31, 2008 ..................... $10.63 0.61 (1.00) (0.61) (0.16)
June 1, 2006 to May 31, 2007 ..................... $10.18 0.59 0.51 (0.59) (0.06)
June 1, 2005 to May 31, 2006 ..................... $10.23 0.59 0.14 (0.59) (0.19)
November 1, 2004 to May 31, 2005(9) .............. $10.42 0.30 (0.19) (0.30) 0.00
November 1, 2003 to October 31, 2004 ............. $ 9.90 0.59 0.52 (0.59) 0.00
Class C
June 1, 2009 to November 30, 2009 (Unaudited) .... $ 8.02 0.32 0.86 (0.31) 0.00
June 1, 2008 to May 31, 2009 ..................... $ 9.45 0.66 (1.43) (0.66) 0.00
June 1, 2007 to May 31, 2008 ..................... $10.61 0.61 (1.00) (0.61) (0.16)
June 1, 2006 to May 31, 2007 ..................... $10.17 0.59 0.50 (0.59) (0.06)
June 1, 2005 to May 31, 2006 ..................... $10.21 0.59 0.15 (0.59) (0.19)
November 1, 2004 to May 31, 2005(9) .............. $10.40 0.31 (0.19) (0.31) 0.00
November 1, 2003 to October 31, 2004 ............. $ 9.89 0.59 0.51 (0.59) 0.00
TOTAL RETURN BOND FUND
Class A
June 1, 2009 to November 30, 2009 (Unaudited) .... $12.52 0.27 0.69 (0.26) 0.00
June 1, 2008 to May 31, 2009 ..................... $12.37 0.56 0.17 (0.58) 0.00
June 1, 2007 to May 31, 2008 ..................... $12.20 0.56 0.18 (0.57) 0.00
June 1, 2006 to May 31, 2007 ..................... $12.02 0.56 0.18 (0.56) 0.00
June 1, 2005 to May 31, 2006 ..................... $12.62 0.49 (0.60) (0.49) 0.00
June 1, 2004 to May 31, 2005 ..................... $12.32 0.42 0.34 (0.43) (0.03)
Class B
June 1, 2009 to November 30, 2009 (Unaudited) .... $12.53 0.22 0.69 (0.21) 0.00
June 1, 2008 to May 31, 2009 ..................... $12.38 0.45 0.19 (0.49) 0.00
June 1, 2007 to May 31, 2008 ..................... $12.21 0.48 0.17 (0.48) 0.00
June 1, 2006 to May 31, 2007 ..................... $12.03 0.46 0.18 (0.46) 0.00
June 1, 2005 to May 31, 2006 ..................... $12.63 0.40 (0.60) (0.40) 0.00
June 1, 2004 to May 31, 2005 ..................... $12.33 0.32 0.34 (0.33) (0.03)
Class C
June 1, 2009 to November 30, 2009 (Unaudited) .... $12.46 0.21 0.70 (0.21) 0.00
June 1, 2008 to May 31, 2009 ..................... $12.31 0.46 0.18 (0.49) 0.00
June 1, 2007 to May 31, 2008 ..................... $12.14 0.47 0.17 (0.47) 0.00
June 1, 2006 to May 31, 2007 ..................... $11.96 0.46 0.18 (0.46) 0.00
June 1, 2005 to May 31, 2006 ..................... $12.57 0.39 (0.61) (0.39) 0.00
June 1, 2004 to May 31, 2005 ..................... $12.26 0.32 0.35 (0.33) (0.03)
Administrator Class
June 1, 2009 to November 30, 2009 (Unaudited) .... $12.31 0.27 0.68 (0.26) 0.00
June 1, 2008 to May 31, 2009 ..................... $12.16 0.56 0.18 (0.59) 0.00
June 1, 2007 to May 31, 2008 ..................... $11.99 0.57 0.18 (0.58) 0.00
June 1, 2006 to May 31, 2007 ..................... $11.81 0.57 0.18 (0.57) 0.00
June 1, 2005 to May 31, 2006 ..................... $12.41 0.51 (0.60) (0.51) 0.00
June 1, 2004 to May 31, 2005 ..................... $12.11 0.44 0.34 (0.45) (0.03)
Institutional Class
June 1, 2009 to November 30, 2009 (Unaudited) .... $12.30 0.29 0.68 (0.28) 0.00
June 1, 2008 to May 31, 2009 ..................... $12.15 0.59 0.18 (0.62) 0.00
June 1, 2007 to May 31, 2008 ..................... $11.98 0.61 0.18 (0.62) 0.00
June 1, 2006 to May 31, 2007 ..................... $11.81 0.59 0.18 (0.60) 0.00
June 1, 2005 to May 31, 2006 ..................... $12.40 0.54 (0.59) (0.54) 0.00
June 1, 2004 to May 31, 2005 ..................... $12.11 0.48 0.33 (0.49) (0.03)
Investor Class
June 1, 2009 to November 30, 2009 (Unaudited) .... $12.30 0.29 0.65 (0.25) 0.00
June 1, 2008 to May 31, 2009(3) .................. $12.15 0.55 0.17 (0.57) 0.00
June 1, 2007 to May 31, 2008(3) .................. $11.99 0.55 0.16 (0.55) 0.00
June 1, 2006 to May 31, 2007(3) .................. $11.81 0.54 0.18 (0.54) 0.00
June 1, 2005 to May 31, 2006(3) .................. $12.41 0.46 (0.59) (0.47) 0.00
April 8, 2005(4) to May 31, 2005(3) .............. $12.19 0.06 0.22 (0.06) 0.00
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 69
Financial Highlights
Ratio to Average Net Assets
Ending (Annualized)
Net Asset ------------------------------------ Portfolio Net Assets at
Value Per Net Investment Gross Net Total Turnover End of Period
Share Income Expenses Expenses Return(1) Rate(2) (000's omitted)
- --------- -------------- -------- -------- --------- --------- ---------------
$ 8.91 7.25% 2.24% 1.85% 14.86% 33% $ 3,727
$ 8.04 8.23% 2.23% 1.85% (7.54)% 41% $ 4,255
$ 9.47 6.19% 2.18% 1.85% (3.71)% 63% $ 7,174
$10.63 5.73% 2.15% 1.85% 11.25% 79% $ 10,188
$10.18 5.78% 2.36% 1.85% 7.38% 89% $ 9,554
$10.23 4.90% 2.31% 2.17% 1.05% 76% $ 10,062
$10.42 5.82% 2.30% 2.26% 11.55% 141% $ 10,076
$ 8.89 7.05% 2.22% 1.85% 14.88% 33% $ 7,196
$ 8.02 8.25% 2.23% 1.85% (7.58)% 41% $ 3,044
$ 9.45 6.19% 2.17% 1.85% (3.73)% 63% $ 3,745
$10.61 5.69% 2.14% 1.85% 11.15% 79% $ 5,513
$10.17 5.77% 2.36% 1.85% 7.49% 89% $ 3,356
$10.21 4.99% 2.20% 2.07% 1.11% 76% $ 3,822
$10.40 5.81% 2.34% 2.31% 11.40% 141% $ 4,834
$13.22 4.09% 0.83% 0.82%(5) 7.70% 292%(6) $ 588,713
$12.52 4.30% 0.89%(5) 0.85%(5) 6.16% 633%(6) $ 237,191
$12.37 4.49% 0.99%(5) 0.90%(5) 6.15% 572%(6) $ 65,825
$12.20 4.51% 0.99%(5) 0.90%(5) 6.20% 665%(6) $ 62,004
$12.02 3.88% 1.03%(5) 0.90%(5) (0.91)% 704%(6) $ 69,066
$12.62 3.30% 1.12%(5) 0.90%(5) 6.19% 767%(6) $ 84,188
$13.23 3.41% 1.58% 1.58%(5) 7.38% 292%(6) $ 8,982
$12.53 3.77% 1.65%(5) 1.60%(5) 5.38% 633%(6) $ 10,082
$12.38 3.69% 1.75%(5) 1.65%(5) 5.36% 572%(6) $ 13,248
$12.21 3.77% 1.74%(5) 1.65%(5) 5.41% 665%(6) $ 16,827
$12.03 3.13% 1.78%(5) 1.65%(5) (1.65)% 704%(6) $ 21,356
$12.63 2.57% 1.86%(5) 1.65%(5) 5.39% 767%(6) $ 27,681
$13.16 3.34% 1.58% 1.57%(5) 7.33% 292%(6) $ 27,131
$12.46 3.67% 1.64%(5) 1.60%(5) 5.38% 633%(6) $ 12,410
$12.31 3.78% 1.74%(5) 1.65%(5) 5.37% 572%(6) $ 5,632
$12.14 3.77% 1.74%(5) 1.65%(5) 5.42% 665%(6) $ 6,313
$11.96 3.14% 1.78%(5) 1.65%(5) (1.75)% 704%(6) $ 7,827
$12.57 2.57% 1.87%(5) 1.65%(5) 5.52% 767%(6) $ 9,823
$13.00 4.23% 0.75% 0.70%(5) 7.79% 292%(6) $1,016,751
$12.31 4.65% 0.82%(5) 0.70%(5) 6.35% 633%(6) $ 816,927
$12.16 4.72% 0.82%(5) 0.70%(5) 6.38% 572%(6) $ 865,453
$11.99 4.71% 0.81%(5) 0.70%(5) 6.44% 665%(6) $ 925,385
$11.81 4.12% 0.85%(5) 0.70%(5) (0.78)% 704%(6) $ 783,354
$12.41 3.58% 0.94%(5) 0.70%(5) 6.53% 767%(6) $ 720,935
$12.99 4.58% 0.48% 0.42%(5) 8.03% 292%(6) $ 625,474
$12.30 4.91% 0.55%(5) 0.42%(5) 6.65% 633%(6) $ 604,992
$12.15 4.97% 0.55%(5) 0.42%(5) 6.68% 572%(6) $ 493,165
$11.98 5.00% 0.54%(5) 0.42%(5) 6.65% 665%(6) $ 459,619
$11.81 4.43% 0.58%(5) 0.42%(5) (0.42)% 704%(6) $ 341,620
$12.40 3.87% 0.68%(5) 0.42%(5) 6.74% 767%(6) $ 248,414
$12.99 4.68% 0.88% 0.88%(5) 7.78% 292%(6) $ 32,387
$12.30 4.36% 0.95%(5) 0.90%(5) 6.15% 633%(6) $ 18,005
$12.15 4.29% 1.15%(5) 0.95%(5) 6.04% 572%(6) $ 3,254
$11.99 4.44% 1.15%(5) 0.95%(5) 6.17% 665%(6) $ 4,289
$11.81 3.74% 1.19%(5) 0.95%(5) (1.03)% 704%(6) $ 6,578
$12.41 3.42% 1.23%(5) 0.95%(5) 2.31% 767%(6) $ 29,204
70 Wells Fargo Advantage Income Funds
Notes to Financial Statements
1. ORGANIZATION
Wells Fargo Funds Trust (the "Trust") is an open-end investment management
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). These financial statements report on the following funds: Wells
Fargo Advantage Diversified Bond Fund ("Diversified Bond Fund"), Wells Fargo
Advantage Income Plus Fund ("Income Plus Fund"), Wells Fargo Advantage
Inflation-Protected Bond Fund ("Inflation-Protected Bond Fund"), Wells Fargo
Advantage Short Duration Government Bond Fund ("Short Duration Government Bond
Fund"), Wells Fargo Advantage Stable Income Fund ("Stable Income Fund"), Wells
Fargo Advantage Strategic Income Fund ("Strategic Income Fund") and Wells Fargo
Advantage Total Return Bond Fund ("Total Return Bond Fund"), (each, a "Fund",
collectively, the "Funds"). Each Fund is a diversified series of the Trust, a
Delaware statutory trust organized on November 8, 1999.
The Diversified Bond Fund, Inflation-Protected Bond Fund, Stable Income Fund,
and Total Return Bond Fund each seek to achieve its investment objective by
investing all investable assets in one or more separate diversified portfolios
(each, a "Master Portfolio", collectively, the "Master Portfolios") of Wells
Fargo Master Trust, a registered open-end investment management company. Each
Master Portfolio directly acquires portfolio securities, and a Fund investing in
a Master Portfolio acquires an indirect interest in those securities. Each Fund
accounts for its investment in the Master Portfolios as partnership investments
and records daily its share of the Master Portfolio's income, expense and
realized and unrealized gains and losses. The financial statements of Master
Portfolios for the six months ended November 30, 2009 are included in this
report and should be read in conjunction with each Fund's financial statements.
As of November 30, 2009, these Funds own the following percentages of the Master
Portfolio(s):
DIVERSIFIED INFLATION-PROTECTED STABLE TOTAL RETURN
BOND FUND BOND FUND INCOME FUND BOND FUND
----------- ------------------- ----------- ------------
INFLATION-PROTECTED BOND PORTFOLIO 3% 58% NA NA
MANAGED FIXED INCOME PORTFOLIO 7% NA NA NA
STABLE INCOME PORTFOLIO NA NA 63% NA
TOTAL RETURN BOND PORTFOLIO 0%* NA NA 88%
* Percentage is less than 0.5.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed
in the preparation of the financial statements of each Fund, are in conformity
with U.S. Generally Accepted Accounting Principles ("GAAP") which 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. Management has considered the circumstances under which the Funds
should recognize or make disclosures regarding events or transactions occurring
subsequent to the balance sheet date through January 29, 2010 which represents
the date the financial statements are issued. Adjustments or additional
disclosures, if any, have been included in these financial statements.
SECURITIES VALUATION
Investments in securities are valued each business day as of the close of
regular trading on the New York Stock Exchange, which is usually 4:00 p.m.
(Eastern Time). Securities which are traded on a national or foreign securities
exchange are valued at the last reported sales price. Securities listed on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued at the NASDAQ Official Closing
Price ("NOCP"), and if no NOCP is available, then at the last reported sales
price. If no sales price is shown on 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. This 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' fair values. For some
securities, such prices are not readily available. These securities will
generally be fair valued using the 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.
Wells Fargo Advantage Income Funds 71
Notes to Financial Statements
Debt securities of sufficient credit quality with original maturities of 60 days
or less, generally are valued at amortized cost which approximates market value.
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 fair value.
Investments in open-end mutual funds are valued at net asset value.
Investments in the Master Portfolios are valued daily based on each Fund's
proportionate share of each Master Portfolio's net assets, which are also valued
daily. Securities held in the Master Portfolios are valued as discussed in the
Notes to Financial Statements of the Master Portfolios, which are included
elsewhere in the this report.
Investments which are not valued using any of the methods discussed above, are
valued at their fair value, as determined by procedures established in good
faith and approved by the Board of Trustees.
The valuation techniques used by the Funds to measure fair value are consistent
with the market approach, income approach and/or cost approach, where
applicable, for each security type.
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 payable by the borrower or by retaining a portion of interest on the
investment securities purchased with cash received as collateral (after payment
of a "broker rebate fee" to the borrower). A Fund also continues to receive
interest or dividends on the securities loaned. Security loans are secured at
all times by collateral, although the loans may not be fully supported at all
times if, for example, the instruments in which cash collateral is invested
decline in value or the borrower fails to provide additional collateral when
required in a timely manner or at all. 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. Cash collateral received by a Fund pursuant to
these loans generally is invested on behalf of the Fund by the securities
lending agent in securities that, at the time of investment, are considered
high-quality short-term debt investments (including money market instruments)
and have been evaluated and approved by the Fund's adviser and are permissible
investments for the Fund. Cash collateral is invested on behalf of a Fund
through a joint account in a manner similar to the Fund's investment of its cash
reserves and the Fund is entitled to the gains and bears the losses on such
investments. The net asset value of a Fund will be affected by an increase or
decrease in the value of the securities loaned and by an increase or decrease in
the value of instruments purchased with cash collateral. Another risk from
securities lending is that the borrower may not provide additional collateral
when required or return the securities when due or when called for by the Fund.
In either case, a Fund could experience delays in recovering securities or
collateral or could lose all or part of the value of the loaned securities.
Wells Fargo Bank, N.A., currently acts as the securities lending agent for the
Funds, subject to the overall supervision of the Funds' investment adviser, and
has delegated its duties as securities lending agent to an affiliated sub-agent
for certain funds and to an unaffiliated sub-agent for other funds. Pursuant to
an exemptive order granted by the SEC and subject to compliance with its
conditions, Wells Fargo Bank, N.A. under a contract is entitled to receive for
its services 25% of the revenues earned on the securities lending activities and
incurs all expenses. Wells Fargo Bank, N.A. pays all or part of its portion of
the revenues generated by securities lending activities to the sub-agents as
compensation for their services as sub-agents. The securities lending agent may
make payments to borrowers and placing brokers that are not
72 Wells Fargo Advantage Income Funds
Notes to Financial Statements
affiliated, directly or indirectly, with the Trust, the adviser or the
distributor. For the six months ended November 30, 2009, 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. For foreign equity securities,
Bank of New York Mellon serves as the securities lending sub-agent and receives
for its services 20% of the revenues earned on the securities lending activities
that it conducts with respect to foreign equity securities. The value of the
securities on loan, the related collateral and the liability to return the
collateral at November 30, 2009, are shown on the Statements of Assets and
Liabilities.
TERM LOANS
The Funds may invest in term loans. The Fund records an investment when the
borrower withdraws money and records interest as earned. These loans pay
interest at rates which are periodically reset by reference to a base lending
rate plus a spread. The Fund assumes the credit risk of the borrower. There
could be potential loss to the Fund in the event of default by the borrower.
FUTURES CONTRACTS
Certain Funds may be subject to interest rate risk in the normal course of
pursuing its investment objectives. The Funds may buy and sell futures contracts
in order to gain exposure to, or protect against changes in, security values and
interest rates. The primary risks associated with the use of futures contracts
are the imperfect correlation between changes in market values of securities
held by the Fund and the prices of futures contracts, and the possibility of an
illiquid market.
Futures contracts are valued based upon their quoted daily settlement prices.
The aggregate principal amounts of the contracts are not recorded in the
financial statements. Fluctuations in the value of the contracts are recorded in
the Statement of Assets and Liabilities as an asset or liability and in the
Statement of Operations as unrealized gains or losses until the contracts are
closed, at which point they are recorded as net realized gains or losses on
futures contracts. With futures contracts, there is minimal counterparty risk to
the Fund since futures are exchange traded and the exchange's clearinghouse, as
counterparty to all exchange traded futures, guarantees the futures against
default.
TBA SALE COMMITMENTS
A Fund may enter into To Be Announced ("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". 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.
STRUCTURED INVESTMENT VEHICLES
The Funds may invest in structured debt securities, such as those issued by
Structured Investment Vehicles ("SIVs"). SIVs invest in a diversified pool of
underlying securities, which may include finance company debt and structured
finance assets, residential mortgage-backed securities, commercial
mortgage-backed securities, collateralized loan obligations, collateralized debt
obligations and other asset backed securities. The ability of a SIV to repay
debt depends primarily on the cash collections received from the SIV's
underlying asset portfolio, which may include certain assets such as subprime
mortgages that are subject to heightened risks of credit quality or market value
deterioration under the continuing adverse conditions in the U.S. credit
markets, and on the ability to obtain short-term funding through the issuance of
new debt. Investments in these securities present increased credit and liquidity
risks as there could be losses to a Fund in the event of credit or market value
deterioration in a SIV's underlying portfolio, mismatches in the timing of the
cash flows of the underlying asset interests and the repayment obligations of
maturing securities issued by a SIV, or a SIV's inability to issue new debt.
Wells Fargo Advantage Income Funds 73
Notes to Financial Statements
As of November 30, 2009, the following Funds owned certain of these types of
structured securities in the amounts shown in the table. These securities were
originally purchased by the Funds' securities lending agent on behalf of the
Funds through a joint account with cash collateral received by the Funds
pursuant to loans of the Funds' securities. Although considered high-quality,
short-term money market instruments when originally purchased by the securities
lending agent through the joint account, the SIVs are now in payment default,
have been restructured following default or are otherwise impaired and are
valued at fair value as shown in the Portfolio of Investments.
Defaulted/Impaired SIVs
($Value) % of Net Assets
----------------------- ---------------
INCOME PLUS FUND 3,038,025 0.71
SHORT DURATION GOVERNMENT BOND FUND 1,433,430 0.13
STRATEGIC INCOME FUND 58,589 0.19
In a securities lending transaction, the net asset value of a Fund will be
affected by an increase or decrease in the value of the securities loaned and by
an increase or decrease in the value of instruments in which cash collateral is
invested. Thus, the current net asset value of each Fund reflects the current
valuations assigned to the defaulted or impaired SIVs that were purchased on its
behalf through the investment of cash collateral. Declines in the values of
defaulted or impaired SIVs generate unrealized losses for a Fund, which are
reflected in the Fund's Statement of Assets and Liabilities, equal to the
difference between (i) the value of the investments purchased with cash
collateral received for securities loaned and (ii) the amount that would be
payable if the Fund were to recall the loans at period end.
The amount of securities lending activity undertaken by a Fund fluctuates from
time to time. After the occurrence of a default or impairment of a SIV purchased
in a joint account by the securities lending agent, as the various participating
Funds' lending activity fluctuated, their ratable interest in the joint account,
including their ratable exposure to the defaulted or impaired SIVs would
fluctuate depending on the relative activity of each participating Fund. In
order to eliminate the fluctuation of the various Funds' ratable exposure to the
defaulted or impaired SIVs, the adviser to the Funds recommended to the Board of
Trustees, and the Board of Trustees approved, actions designed to fix the
allocation of percentage ownership in defaulted or impaired SIVs among all funds
participating in securities lending ("side pocketing") based on each Fund's
percentage ownership of the total cash collateral investment joint account as of
the date the fixed allocation is implemented. Accordingly, on February 13, 2009
a side pocketing occurred, which fixed each Fund's ownership of defaulted or
impaired SIVs in the joint account based on each such Fund's percentage
ownership of the joint account as of such date.
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 based on the effective interest method. To the extent debt
obligations are placed on non-accrual status, any related interest income may be
reduced by writing off interest receivables when the collection of all or a
portion of interest has become doubtful based on consistently applied
procedures. If the issuer subsequently resumes interest payments or when the
collectability of interest is reasonably assured, the debt obligation is removed
from non-accrual status.
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.
Securities transactions are recorded on a trade date basis in each Master
Portfolio. Realized gains or losses in each Master Porfolio are reported on the
basis of identified cost of securities delivered.
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, if any, is declared and distributed to shareholders
monthly, with the exception of Inflation-Protected Bond Fund, Short Duration
Government Bond Fund, Strategic Income Fund and Total Return Bond Fund, for
which net investment income, if any, is declared daily and distributed monthly.
Distributions to shareholders from net realized capital gains, if any, are
declared and distributed at least annually.
74 Wells Fargo Advantage Income 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.
FEDERAL AND OTHER 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 distributing 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.
Each Fund's income and federal excise tax returns and all financial records
supporting those returns for the prior three fiscal years are subject to
examination by the federal and Delaware revenue authorities.
At May 31, 2009, estimated net capital loss carryforwards, which are available
to offset future net realized capital gains, were as follows:
Expiration
-----------------------------------------------------------------------------------------------
2010 2011 2012 2013 2014 2015 2016 2017
---------- -------- -------- -------- ---------- ---------- ---------- ----------
INCOME PLUS FUND $1,602,869 $484,626 $ 0 $210,712 $1,422,930 $ 836,942 $3,941,771 $ 0
INFLATION-PROTECTED BOND FUND 0 0 0 0 0 2,705,798 1,003,933 605,645
SHORT DURATION GOVERNMENT
BOND FUND 0 0 0 0 0 3,454,237 6,050,378 0
STABLE INCOME FUND 0 0 640,535 327,692 1,232,465 394,153 0 0
STRATEGIC INCOME FUND 0 0 0 0 0 0 95,150 3,285,888
At May 31, 2009, the deferred post-October capital losses, which will be treated
as realized for tax purposes on the first day of the succeeding year were:
Deferred
Post-October
Capital Loss
------------
DIVERSIFIED BOND FUND $ 339,822
INCOME PLUS FUND 1,959,637
INFLATION-PROTECTED BOND FUND 651,369
STABLE INCOME FUND 1,382
STRATEGIC INCOME FUND 2,565,272
TOTAL RETURN BOND FUND 6,973,259
CLASS ALLOCATIONS
The separate classes of shares offered by each Fund differ principally in
applicable sales charges, distribution, shareholder servicing and administration
fees. Shareholders of each class bear certain expenses that pertain to that
particular class. All shareholders bear the common expenses of a Fund, earn
income from the portfolio, and are allocated unrealized gains and losses pro
rata based on the average daily net assets of each class, without distinction
between share classes. Dividends are determined separately for each class based
on income and expenses allocable to each class. Realized gains and losses are
allocated to each class pro rata based upon the net assets of each class on the
date realized. Differences in per share dividend rates generally result from the
relative weightings of pro rata income and realized gain allocations and from
differences in separate class expenses, including distribution, shareholder
servicing, and administration fees.
3. FAIR VALUATION MEASUREMENTS
Fair value measurements in investments are determined within a framework that
has established a fair value hierarchy based upon the various data inputs
utilized in determining the value of the Fund's investments. These inputs are
summarized into three broad levels as follows:
Wells Fargo Advantage Income Funds 75
Notes to Financial Statements
- - Level 1 - quoted prices in active markets for identical investments
- - Level 2 - other significant observable inputs (including quoted prices for
similar investments, interest rates, prepayment speeds, credit risk, etc.)
- - Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in these securities.
The following is a summary of the inputs used as of November 30, 2009 in valuing
the Funds' investments in securities:
Significant
Other Significant
Quoted Observable Unobservable
Prices Inputs Inputs
INVESTMENTS IN SECURITIES (Level 1) (Level 2) (Level 3) Total
- ------------------------- ------------ -------------- ------------ --------------
DIVERSIFIED BOND FUND
Investments in affiliated Master
Portfolio(s) $ 0 $ 47,115,137 $ 0 $ 47,115,137
INCOME PLUS FUND
Asset-backed securities $ 0 $ 11,085,360 $ 0 $ 11,085,360
Collateralized mortgage obligations 0 47,136,896 0 47,136,896
Corporate debt securities 0 171,532,808 3,119,015 174,651,823
Debt securities issued by U.S.
Treasury and U.S. government agencies 100,171,773 145,678,707 0 245,850,480
Debt securities issued by states in the
U.S. and its political subdivisions 0 11,111,142 0 11,111,142
Short-term investments 76,403,573 11,580,402 0 87,983,975
------------ -------------- ----------- --------------
$176,575,346 $ 398,125,315 $ 3,119,015 $ 577,819,676
------------ -------------- ----------- --------------
INFLATION-PROTECTED BOND FUND
Investments in affiliated Master
Portfolio(s) $ 0 $ 86,792,832 $ 0 $ 86,792,832
------------ -------------- ----------- --------------
SHORT DURATION GOVERNMENT BOND FUND
Asset-backed securities $ 0 $ 49,258,500 $ 0 $ 49,258,500
Collateralized mortgage obligations 0 121,596,794 0 121,596,794
Corporate debt securities 0 280,369,414 1,433,430 281,802,844
Debt securities issued by U.S.
Treasury and U.S. government agencies 521,016,132 354,191,771 28,391,401 903,599,304
Debt securities issued by states in the
U.S. and its political subdivisions 0 64,138,763 0 64,138,763
Short-term investments 120,894,780 76,736,803 0 197,631,583
------------ -------------- ----------- --------------
$641,910,912 $ 946,292,045 $29,824,831 $1,618,027,788
------------ -------------- ----------- --------------
STABLE INCOME FUND
Investments in affiliated Master
Portfolio(s) $ 0 $ 195,736,823 $ 0 $ 195,736,823
------------ -------------- ----------- --------------
STRATEGIC INCOME FUND
Equity securities
COMMON STOCKS $ 396,047 $ 0 $ 0 $ 396,047
Corporate debt securities 0 27,526,044 740,159 28,266,203
Debt securities issued by states in the
U.S. and its political subdivisions 0 91,274 131,240 222,514
Short-term investments 2,584,326 109,200 0 2,693,526
------------ -------------- ----------- --------------
$ 2,980,373 $ 27,726,518 $ 871,399 $ 31,578,290
------------ -------------- ----------- --------------
TOTAL RETURN BOND FUND
Investments in affiliated Master
Portfolio(s) $ 0 $2,283,419,796 $ 0 $2,283,419,796
76 Wells Fargo Advantage Income Funds
Notes to Financial Statements
Further details on the major security types listed above for each fund can be
found in the Portfolio of Investments.
Diversified Bond Fund, Inflation-Protected Bond Fund, Stable Income Fund and
Total Return Bond Fund invest only in Master Portfolios. See Note 2 in Notes to
Financial Statements in Master Portfolio section for fair valuation measurements
information for these Funds.
As of November 30, 2009, the inputs used in valuing Income Plus Fund's other
financial instruments, which are carried at fair value, were as follows:
Significant Other Significant
Quoted Price Observable Inputs Unobservable Inputs
Level 1 Level 2 Level 3 Total
------------ ----------------- ------------------- --------
INCOME PLUS FUND $251,414 $0 $0 $251,414
* Other financial instruments include futures transactions.
The following is a reconciliation of investments in which significant
unobservable inputs (Level 3) were used in determining value:
Short
Duration
Income Government Strategic
Plus Fund Bond Fund Income Fund
----------- ----------- -----------
CORPORATE DEBT SECURITIES
Balance as of 05/31/2009 $ 3,035,568 $ 1,258,189 $690,727
Realized gain (loss) (1,454,227) (2,018,084) (63,468)
Change in unrealized appreciation (depreciation) 2,184,366 2,359,547 119,695
Net purchases (sales) (582,245) (166,222) (6,795)
Net transfer in (out) of Level 3 (64,447) 0 0
Balance as of 11/30/2009 $ 3,119,015 $ 1,433,430 $740,159
DEBT SECURITIES ISSUED BY U.S.
TREASURY AND U.S. GOVERNMENT AGENCIES
Balance as of 05/31/2009 $ 0 $11,499,341 $ 0
Realized gain (loss) 0 0 0
Change in unrealized appreciation (depreciation) 0 0 0
Net purchases (sales) 0 3,675,411 0
Net transfer in (out) of Level 3 0 13,216,649 0
Balance as of 11/30/2009 $ 0 $28,391,401 $ 0
DEBT SECURITIES ISSUED BY STATES IN THE
U.S. AND ITS POLITICAL SUBDIVISIONS
Balance as of 05/31/2009 $ 0 $ 0 $ 0
Realized gain (loss) 0 0 0
Change in unrealized appreciation (depreciation) 0 0 0
Net purchases (sales) 0 0 131,240
Net transfer in (out) of Level 3 0 0 0
Balance as of 11/30/2009 0 0 131,240
TOTAL $ 3,119,015 $29,824,831 $871,399
Short
Duration
Income Government Strategic
Plus Fund Bond Fund Income Fund
----------- ----------- -----------
Change in unrealized appreciation (depreciation)
relating to securities held at the end of
reporting period.
CORPORATE DEBT SECURITIES $132,896 $59,666 $44,709
Wells Fargo Advantage Income Funds 77
Notes to Financial Statements
4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES
ADVISORY FEES
The Trust has entered into an advisory contract with Wells Fargo Funds
Management, LLC ("Funds Management"). The adviser is responsible for
implementing investment policies and guidelines and for supervising the
sub-adviser, who is responsible for day-to-day portfolio management.
Pursuant to the contract, Funds Management is entitled to receive an advisory
fee for its services as adviser at the following annual rates:
Advisory
Fees (% of
Average Daily Average Daily
Net Assets Net Assets)
------------------ -------------
INCOME PLUS FUND First $500 million 0.500
STRATEGIC INCOME FUND Next $500 million 0.475
Next $2 billion 0.450
Next $2 billion 0.425
Over $5 billion 0.400
SHORT DURATION GOVERNMENT BOND FUND First $500 million 0.400
Next $500 million 0.375
Next $2 billion 0.350
Next $2 billion 0.325
Over $5 billion 0.300
Funds Management may retain the services of certain investment sub-advisers to
provide daily portfolio management. The fees related to sub-advisory services
are borne directly by the adviser and do not increase the overall fees paid by a
Fund to the adviser.
Wells Capital Management Incorporated, an affiliate of Funds Management and
indirect wholly owned subsidiary of Wells Fargo & Company, is the sub-adviser to
the Funds.
For each Fund that invests all of its assets in a single Master Portfolio, Funds
Management does not currently receive investment advisory fees. For each Fund
that invests in multiple Master Portfolios, Funds Management is the adviser and
is entitled to receive an investment advisory fee of 0.25% of each Fund's
average daily net assets for providing such advisory services, including the
determination of the asset allocations of each Fund's investments in the various
Master Portfolios. Funds Management also acts as adviser to the Master
Portfolios and is entitled to receive fees from the Master Portfolios for those
services.
Each Fund that invests its assets in one or more Master Portfolio may withdraw
all of its investments from its corresponding Master Portfolio(s) and invest
directly in securities at any time if the Board of Trustees determines that it
is in the best interest of the Fund to do so. Upon such redemption and
subsequent direct investment in a portfolio of securities, Funds Management (and
the corresponding sub-adviser, if any) may receive an investment advisory fee
for the direct management of those assets.
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 from each Fund the following annual fees:
Administration Fees
Average Daily (% of Average
Net Assets Daily Net Assets)
----------------- -------------------
Fund level First $5 billion 0.05
Next $5 billion 0.04
Over $10 billion 0.03
78 Wells Fargo Advantage Income Funds
Notes to Financial Statements
Administration Fees
Average Daily (% of Average
Net Assets Daily Net Assets)
----------------- -------------------
Class A, Class B, and Class C All assets levels 0.18
Administrator Class All assets levels 0.10
Institutional Class All assets levels 0.08
Investor Class All assets levels 0.23
Funds Management has contractually waived advisory and administration fees
during the six months ended November 30, 2009 to the extent necessary to
maintain certain net operating expense ratios for the Funds. Expenses were
waived and/or reimbursed by Funds Management proportionately from all classes,
first from advisory fees, and then from any class specific expenses, if
applicable.
CUSTODY AND FUND ACCOUNTING FEES
The Funds have entered into a contract with State Street Bank and Trust Company
("State Street"), whereby State Street is responsible for providing custody
services and fund accounting services to the Funds (the "Custody and Fund
Accounting Agreement.") Pursuant to the Custody and Fund Accounting Agreement,
State Street is entitled to an annual asset-based fee for domestic and global
custody services for the Funds. Also pursuant to the Custody and Fund Accounting
Agreement, State Street is entitled to receive annual asset-based fees for
providing fund accounting services to the Funds. Any Fund that investes its
assets solely in one or more Master Portfolio or other investment companies does
not pay a custody fee.
Prior to September 21, 2009, Wells Fargo Bank, N.A. was responsible for
providing custody services to Inflation-Protected Bond Fund, Short Duration
Government Bond Fund and Strategic Income Fund and was entitled to a monthly fee
for custody services at an annual rate of 0.02% of the average daily net assets
of each Fund. PNC Global Investment Servicing ("PNC") served as fund accountant
for these Fund prior to September 21, 2009 and received an annual asset-based
fee and an annual fixed fee from each Fund. PNC was also reimbursed for all
out-of-pocket expenses reasonably incurred in providing these services.
Prior to October 26, 2009, Wells Fargo Bank, N.A. was responsible for providing
custody services to Diversified Bond Fund, Income Plus Fund, Stable Income Fund
and Total Return Bond Fund and was entitled to a monthly fee for custody
services at an annual rate of 0.02% of the average daily net assets of each
Fund. PNC Global Investment Servicing ("PNC") served as fund accountant for the
these Funds prior to October 26, 2009 and received an annual asset-based fee and
an annual fixed fee from each Fund. PNC was also reimbursed for all
out-of-pocket expenses reasonably incurred in providing these services.
DISTRIBUTION FEES
The Trust has adopted a Distribution Plan for Class B and Class C shares of the
applicable Funds pursuant to Rule 12b-1 under the 1940 Act. Distribution fees
are charged to the Class B and Class C shares and paid to Wells Fargo Funds
Distributor, LLC, the principal underwriter of each Fund, at an annual rate of
0.75% of the average daily net assets of each class.
For the six months ended November 30, 2009, Wells Fargo Funds Distributor, LLC
received the following amounts in front-end sales charges and contingent
deferred sales charges.
Contingent
deferred
Front-end sales sales charges
charges -----------------
Class A Class B Class C
--------------- ------- -------
INCOME PLUS FUND $ 1,617,966 $ 983 $ 478
INFLATION-PROTECTED BOND FUND 1,835,899 1,039 345
SHORT DURATION GOVERNMENT BOND FUND 39,719,339 570 5,379
STABLE INCOME FUND 497,702 0 540
STRATEGIC INCOME FUND 2,198,193 93 202
TOTAL RETURN BOND FUND 12,981,646 1,229 4,637
SHAREHOLDER SERVICING FEES
The Trust has entered into contracts with one or more shareholder servicing
agents, whereby Class A, Class B, Class C, and Investor Class of each applicable
Fund is charged a fee at an annual rate of 0.25% of the average daily net assets
Wells Fargo Advantage Income Funds 79
Notes to Financial Statements
of each respective class. Administrator Class of the Fund is charged a fee at an
annual rate of 0.10% of its average daily net assets.
A portion of these total shareholder servicing fees were paid to affiliates of
Wells Fargo & Company.
5. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, exclusive of short-term securities
(securities with maturities of one year or less at purchase date) and U.S.
Government obligations for the six months ended November 30, 2009, were as
follows:
Purchases at Cost Sales Proceeds
----------------- --------------
DIVERSIFIED BOND FUND* $ 40,508,862 $ 44,442,716
INCOME PLUS FUND 736,785,914 745,414,076
INFLATION-PROTECTED BOND FUND* 10,734,543 13,150,999
SHORT DURATION GOVERNMENT BOND FUND 2,662,569,220 2,228,468,607
STABLE INCOME FUND* 10,505,099 21,271,713
STRATEGIC INCOME FUND 12,704,941 8,278,217
TOTAL RETURN BOND FUND* 6,419,281,816 5,868,985,096
* Purchases and sales related to these investments have been calculated by
aggregating the results of multiplying such Fund's ownership percentage of
the respective Master Portfolio by the corresponding Master Portfolio's
purchases and sales.
6. DERIVATIVE TRANSACTIONS
During the six months ended November 30, 2009, Income Plus Fund entered into
futures contracts for hedging and speculative purposes.
At November 30, 2009, Income Plus Fund had long futures contracts outstanding as
follows:
Net
Initial Unrealized
Contract Appreciation/
Expiration Date Contracts Type Amount (Depreciation)
--------------- --------- ---------------- ----------- --------------
INCOME PLUS FUND March 2010 44 Long US Treasury Note $ 9,560,443 $ 26,745
March 2010 215 Long US Treasury Note 24,987,440 224,669
Income Plus Fund had an average contract amount of $20,442,800 in futures
contracts during the six months ended November 30, 2009.
On November 30, 2009, the cumulative appreciation on futures contracts in the
amount of $251,414 is reflected in net unrealized gains on investments on the
Statement of Assets and Liabilities for Income Plus Fund. The receivable for
daily variation margin on open futures contracts only represents the current
day's variation margin. The realized gains and change in unrealized gains on
futures contracts are reflected in the Statement of Operations.
7. ACQUISITION
Effective at the close of business on July 21, 2008, Income Plus Fund acquired
the net assets of Wells Fargo Advantage Corporate Bond Fund ("Corporate Bond
Fund") in a tax-free exchange for Class A, Institutional Class and Investor
Class shares of Income Plus Fund. Income Plus Fund issued 1,708,181 of its Class
A shares (valued at $17,080,253), 2,251,367 of its Institutional Class shares
(valued at $22,509,702), and 19,425,508 of its Investor Class shares (valued at
$194,289,050) in exchange for all of the assets and liabilities of Corporate
Bond Fund. Corporate Bond Fund then liquidated by distributing Class A and
Institutional Class shares of the Income Plus Fund on a prorated basis to its
Class A and Institutional Class shareholder, respectively. In addition,
Corporate Bond Fund liquidated by distributing Investor Class shares of the
Income Plus Fund shareholders holding Investor Class shares of the Corporate
Bond Fund. As a result, Corporate Bond Fund shareholders received shares of
their specified class of Corporate Bond Fund with a total value to the value of
their Corporate Bond Fund shares at the close of business on July 18, 2008. The
aggregate net assets of the Income Plus Fund and Corporate Bond Fund immediately
prior to acquisition were $57,458,669 and $233,879,005, respectively. The
aggregate net assets of Income Plus Fund immediately after the acquisition were
$291,337,674.
80 Wells Fargo Advantage Income Funds
Notes to Financial Statements
8. BANK BORROWINGS
The Trust and Wells Fargo Variable Trust (excluding the money market funds) are
parties to a $125,000,000 revolving credit agreement with State Street Bank and
Trust Company, whereby the Funds are permitted to use bank borrowings for
temporary or emergency purposes, such as to fund shareholder redemption
requests. Pursuant to the agreement entered into on September 8, 2009, interest
under the credit agreement is charged to each Fund based on a borrowing rate
equal to the higher of the Federal Funds rate in effect on that day plus 1.25%
or the overnight LIBOR rate in effect on that day plus 1.25%. In addition, under
the credit agreement, the Funds pay an annual commitment fee equal to 0.15% of
the unused balance, which is allocated pro rata. Prior to September 8, 2009, the
Funds participated in a $150,000,000 revolving credit agreement with the Bank of
New York Mellon and paid interest at a rate equal to the Federal Funds rate plus
0.60% and an annual commitment fee equal to 0.15% of the unused balance, which
was allocated on a pro rata basis.
For the six months ended November 30, 2009, there were no borrowings by the
Funds under the agreement.
9. INDEMNIFICATION
Under the Trust's organizational documents, the 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.
10. LEGAL AND REGULATORY MATTERS
In 2004, the predecessor Strong Funds' investment adviser and affiliates
(collectively, "Strong") entered into settlement agreements with certain
regulators, including the SEC and the New York Attorney General ("NYAG") to
settlement market-timing investigations. In the settlements, Strong agreed to
pay investor restitution and civil penalties. On September 14, 2009, the SEC
approved the terms of the Distribution Plan for the disgorgement and civil
penalties to the predecessor Strong Fund shareholders, and those eligible
investors will receive proceeds as a result of the Distribution Plan. The
successor funds are not expected to receive any portion of the proceeds. The
settlement with the NYAG imposed fee reductions across the predecessor Strong
Fund complex, and Funds Management agreed to honor these fee reductions for the
benefit of shareholders across the successor funds to total $35 million by May
2009. Although civil litigation against Strong and certain predecessor Strong
Funds relating to these matters is continuing, neither the current adviser nor
the successor funds is a party to any such suit.
11. SUBSEQUENT EVENT
At a meeting of the Board of Trustees held on January 11, 2010, the Trustees
approved a Plan of Reorganization (the "Plan") for each of the specified funds
("Target Funds") listed in the table below. Under each Plan, certain existing
Wells Fargo Advantage Funds ("Acquiring Funds") will acquire the assets and
assume the liabilities of the Target Fund in exchange for shares of Acquiring
Fund.
ACQUIRING
TARGET FUND TARGET FUND TRUST ACQUIRING FUND FUND TRUST
- --------------------- ----------------------- --------------------------- -----------
Diversified Bond fund Wells Fargo Funds Trust Total Return Bond Fund Wells Fargo
Funds Trust
Stable Income Fund Wells Fargo Funds Trust Wells Fargo Advantage Ultra Wells Fargo
Short-Term Income Fund Funds Trust
Strategic Income Fund Wells Fargo Funds Trust Wells Fargo Advantage Wells Fargo
High Income Fund Funds Trust
A special meeting of shareholders of the Fund will be held in June 2010 to
consider and vote on the Plan. In April 2010, materials for this meeting will be
mailed to shareholders of record on March 10, 2010.
Wells Fargo Advantage Master Portfolios 81
Portfolio of Investments--November 30, 2009 (Unaudited)
INFLATION-PROTECTED BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
US TREASURY SECURITIES: 99.00%
US TREASURY BONDS: 62.03%
$ 2,030,735 US TREASURY BOND - INFLATION PROTECTED 1.25% 04/15/2014 $ 1,647,387
3,775,655 US TREASURY BOND - INFLATION PROTECTED 1.38 07/15/2018 3,887,747
4,566,754 US TREASURY BOND - INFLATION PROTECTED 1.63 01/15/2018 4,790,096
4,123,480 US TREASURY BOND - INFLATION PROTECTED 1.75 01/15/2028 4,136,688
5,124,035 US TREASURY BOND - INFLATION PROTECTED 1.88 07/15/2015 5,494,728
3,808,147 US TREASURY BOND - INFLATION PROTECTED 1.88 07/15/2019 4,076,206
5,596,842 US TREASURY BOND - INFLATION PROTECTED 2.00 07/15/2014 6,020,540
5,625,529 US TREASURY BOND - INFLATION PROTECTED 2.00 01/15/2016 6,057,114
5,304,536 US TREASURY BOND - INFLATION PROTECTED 2.00 01/15/2026 5,551,112
4,596,917 US TREASURY BOND - INFLATION PROTECTED 2.13 01/15/2019 5,011,357
5,102,886 US TREASURY BOND - INFLATION PROTECTED 2.38 01/15/2017 5,623,937
8,283,556 US TREASURY BOND - INFLATION PROTECTED<< 2.38 01/15/2025 9,086,671
4,021,267 US TREASURY BOND - INFLATION PROTECTED 2.38 01/15/2027 4,419,939
4,139,237 US TREASURY BOND - INFLATION PROTECTED 2.50 01/15/2029 4,634,005
4,324,383 US TREASURY BOND - INFLATION PROTECTED 2.63 07/15/2017 4,863,240
1,806,800 US TREASURY BOND - INFLATION PROTECTED 3.38 04/15/2032 2,338,535
5,354,393 US TREASURY BOND - INFLATION PROTECTED 3.63 04/15/2028 6,889,599
6,259,828 US TREASURY BOND - INFLATION PROTECTED 3.88 04/15/2029 8,390,123
92,919,024
--------------
US TREASURY NOTES: 36.97%
4,751,184 US TREASURY NOTE - INFLATION PROTECTED 0.63 04/15/2013 4,860,314
6,989,765 US TREASURY NOTE - INFLATION PROTECTED 1.63 01/15/2015 7,380,759
5,297,249 US TREASURY NOTE - INFLATION PROTECTED 1.88 07/15/2013 5,632,465
5,065,973 US TREASURY NOTE - INFLATION PROTECTED 2.00 04/15/2012 5,331,936
6,568,656 US TREASURY NOTE - INFLATION PROTECTED 2.00 01/15/2014 7,026,925
5,750,397 US TREASURY NOTE - INFLATION PROTECTED 2.38 04/15/2011 5,960,643
4,641,153 US TREASURY NOTE - INFLATION PROTECTED 2.50 07/15/2016 5,164,006
7,939,535 US TREASURY NOTE - INFLATION PROTECTED 3.00 07/15/2012 8,606,329
1,721,008 US TREASURY NOTE - INFLATION PROTECTED 3.38 01/15/2012 1,852,908
3,418,542 US TREASURY NOTE - INFLATION PROTECTED 3.50 01/15/2011 3,571,843
55,388,128
--------------
TOTAL US TREASURY SECURITIES (COST $140,057,421) 148,307,152
--------------
SHARES YIELD
- ------------- -------------
COLLATERAL FOR SECURITIES LENDING: 4.18%
COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.59%
222,946 AIM STIT-LIQUID ASSETS PORTFOLIO(s) 0.21 222,946
222,946 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(s) 0.16 222,946
222,946 DREYFUS CASH MANAGEMENT FUND INSTITUTIONAL(s) 0.11 222,946
222,946 DWS MONEY MARKET SERIES INSTITUTIONAL(s) 0.20 222,946
891,784
--------------
82 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
INFLATION-PROTECTED BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS: 3.59%
$ 43,351 ALLIED IRISH BANKS NORTH AMERICA INCORPORATED 0.26% 12/07/2009 $ 43,348
15,482 AMSTEL FUNDING CORPORATION++(p) 1.25 12/18/2009 15,473
15,482 ANTALIS US FUNDING CORPORATION++(p) 0.18 12/03/2009 15,482
46,447 ANTALIS US FUNDING CORPORATION++(p) 0.20 12/04/2009 46,446
37,158 ARABELLA FINANCE LLC++(p) 0.35 12/01/2009 37,158
52,640 ARABELLA FINANCE LLC++(p) 0.40 12/03/2009 52,639
1,548 ARABELLA FINANCE LLC++(p) 0.40 12/04/2009 1,548
30,965 ASPEN FUNDING CORPORATION++(p) 0.18 12/21/2009 30,962
92,894 BANK OF AMERICA 0.18 12/23/2009 92,884
269,238 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $269,239) 0.16 12/01/2009 269,238
46,447 BANK OF IRELAND 0.35 12/01/2009 46,447
37,158 BANK OF IRELAND 0.50 12/02/2009 37,158
14,996 BARTON CAPITAL CORPORATION++(p) 0.18 12/01/2009 14,996
7,741 BELMONT FUNDING LLC++(p) 0.50 12/01/2009 7,741
40,254 BNP PARIBAS (NEW YORK) 0.21 12/08/2009 40,254
34,061 BNP PARIBAS (NEW YORK) 0.21 12/14/2009 34,062
92,894 BRYANT BANK FUNDING++ 0.18 12/23/2009 92,884
77,412 CAFCO LLC++ 0.17 12/09/2009 77,409
3,406 CALCASIEU PARISH LA+/-ss 0.40 12/01/2027 3,406
74,315 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY+/-ss 0.23 11/01/2026 74,315
9,909 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT
AUTHORITY+/-ss 0.35 06/01/2028 9,909
77,412 CHARTA LLC++(p) 0.17 12/09/2009 77,409
8,213 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.30 10/01/2038 8,213
15,482 COOK COUNTY IL+/-ss 0.40 11/01/2030 15,482
93,965 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY
VALUE $93,965) 0.17 12/01/2009 93,965
52,640 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.40 12/15/2037 52,640
37,158 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/02/2009 37,158
44,899 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/07/2009 44,899
37,158 DEXIA CREDIT LOCAL DE FRANCE SA 0.27 12/04/2009 37,158
77,412 E.ON AG++ 0.17 12/21/2009 77,404
77,412 ENI FINANCE USA INCORPORATED++ 0.17 12/18/2009 77,405
80,508 FORTIS FUNDING LLC++ 0.20 12/29/2009 80,496
83,605 GDF SUEZ++ 0.17 12/15/2009 83,599
61,929 GEMINI SECURITIZATION INCORPORATED++(p) 0.18 12/10/2009 61,927
77,350 GOLDMAN SACHS REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $77,350) 0.17 12/01/2009 77,350
77,412 GOTHAM FUNDING CORPORATION++ 0.18 12/15/2009 77,406
15,482 GRAMPIAN FUNDING++(p) 0.25 12/03/2009 15,482
65,026 GRAMPIAN FUNDING++(p) 0.28 12/15/2009 65,019
773,049 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 287,497
50,906 HAMILTON COUNTY OHIO HOSPITALS+/-ss 0.20 05/15/2037 50,906
5,109 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.30 11/01/2042 5,109
25,081 HOUSTON TX UTILITY SYSTEM+/-ss 0.27 05/15/2034 25,081
8,856 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.30 07/01/2029 8,856
6,193 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.29 01/01/2018 6,193
15,482 ING USA FUNDING LLC 0.18 12/09/2009 15,482
61,929 ING USA FUNDING LLC 0.19 12/07/2009 61,927
237,728 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $237,729) 0.17 12/01/2009 237,728
30,965 JUPITER SECURITIZATION CORPORATION++(p) 0.18 12/02/2009 30,965
15,482 JUPITER SECURITIZATION CORPORATION++ 0.18 12/03/2009 15,482
9,289 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.29 04/15/2025 9,289
92,894 KBC BANK NV BRUSSELS 0.18 12/01/2009 92,894
Wells Fargo Advantage Master Portfolios 83
Portfolio of Investments--November 30, 2009 (Unaudited)
INFLATION-PROTECTED BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 18,579 LLOYDS TSB BANK PLC 0.18% 12/17/2009 $ 18,577
61,929 LLOYDS TSB BANK PLC (NEW YORK) 0.20 12/07/2009 61,929
24,772 LMA AMERICAS LLC++(p) 0.18 12/11/2009 24,770
13,934 LMA AMERICAS LLC++(p) 0.18 12/17/2009 13,933
46,447 LMA AMERICAS LLC++(p) 0.19 12/21/2009 46,442
13,934 LOUISIANA PUBLIC FACILITIES AUTHORITY+/-ss 0.19 10/01/2033 13,934
76,792 MASSACHUSETTS HEFA+/-ss 0.25 10/01/2034 76,792
8,500 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.24 02/01/2036 8,500
65,026 NATIXIS 0.27 12/07/2009 65,026
6,193 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.31 01/01/2018 6,193
68,122 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.22 07/01/2034 68,122
61,929 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.24 12/01/2040 61,929
77,412 NEWPORT FUNDING CORPORATION++(p) 0.18 12/15/2009 77,406
15,157 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.30 01/01/2034 15,157
31,321 RBS SECURITIES INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY
VALUE $31,321) 0.18 12/01/2009 31,321
10,838 REGENCY MARKETS #1 LLC++(p) 0.18 12/04/2009 10,837
51,463 REGENCY MARKETS #1 LLC++(p) 0.20 12/09/2009 51,461
15,482 ROMULUS FUNDING CORPORATION++ 0.30 12/15/2009 15,481
55,736 ROYAL BANK OF SCOTLAND PLC 0.20 12/02/2009 55,736
43,351 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.20 12/01/2028 43,351
61,929 SOCIETE GENERALE NORTH AMERICA 0.19 12/18/2009 61,924
3,871 STARBIRD FUNDING CORPORATION++(p) 0.15 12/01/2009 3,871
61,929 STARBIRD FUNDING CORPORATION++(p) 0.20 12/03/2009 61,929
77,412 THAMES ASSET GLOBAL SECURITIZATION #1
INCORPORATED++ 0.18 12/18/2009 77,405
18,579 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 12/17/2009 18,577
62,852 TULIP FUNDING CORPORATION++(p) 0.19 12/07/2009 62,850
20,437 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.24 07/01/2032 20,437
61,929 UBS AG (STAMFORD CT) 0.31 12/04/2009 61,930
92,894 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 92,894
9,289 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.29 12/15/2040 9,289
2,379,141 VFNC CORPORATION+++/-(a)(i) 0.24 09/30/2010 1,189,570
3,871 VICTORY RECEIVABLES CORPORATION++(p) 0.15 12/01/2009 3,871
51,305 VICTORY RECEIVABLES CORPORATION++ 0.18 12/16/2009 51,302
15,482 VICTORY RECEIVABLES CORPORATION++(p) 0.19 12/08/2009 15,482
5,372,408
--------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $6,159,281) 6,264,192
--------------
TOTAL INVESTMENTS IN SECURITIES
(COST $146,216,702)* 103.18% 154,571,344
OTHER ASSETS AND LIABILITIES, NET (3.18) (4,767,980)
------ --------------
TOTAL NET ASSETS 100.00% $ 149,803,364
====== ==============
84 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
INFLATION-PROTECTED BOND PORTFOLIO
- ----------
<< All or a portion of this security is on loan.
(s) Rate shown is the 1-day annualized yield at period end.
++ 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.
(p) Asset-backed commercial paper.
+/- Variable rate investments.
ss These securities are subject to a demand feature which reduces the
effective maturity.
(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 $146,737,559 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $8,354,642
Gross unrealized depreciation (520,857)
----------
Net unrealized appreciation $7,833,785
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Master Portfolios 85
Portfolio of Investments--November 30, 2009 (Unaudited)
MANAGED FIXED INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
AGENCY SECURITIES: 15.13%
FEDERAL HOME LOAN MORTGAGE CORPORATION: 2.73%
$ 10,195 FHLMC #410425+/- 3.13% 09/01/2026 $ 10,409
54,579 FHLMC #606279+/- 2.65 02/01/2015 54,851
32,474 FHLMC #846367+/- 3.38 04/01/2029 33,167
1,005,467 FHLMC #A15838 5.50 12/01/2033 1,075,653
2,018,297 FHLMC #A16678 5.50 12/01/2033 2,159,184
6,970,690 FHLMC #E01653 4.50 06/01/2019 7,434,866
622,770 FHLMC #E90248 6.00 06/01/2017 675,851
560,705 FHLMC #E90573 6.00 07/01/2017 608,493
12,052,474
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION: 9.71%
9,932 FNMA #342042+/- 3.24 06/01/2025 10,134
489 FNMA #344689+/- 3.08 11/01/2025 490
21,451 FNMA #344692+/- 3.06 10/01/2025 21,547
37,372 FNMA #347712+/- 3.13 06/01/2026 38,410
4,377,056 FNMA #386890 3.99 04/01/2011 4,500,025
218,929 FNMA #557072+/- 2.03 06/01/2040 219,088
686,112 FNMA #656566 5.50 04/01/2018 742,402
1,768,248 FNMA #678939 5.50 02/01/2018 1,914,424
250,911 FNMA #701350 5.50 04/01/2018 271,653
2,130,880 FNMA #725772 5.00 09/01/2034 2,242,626
1,341,934 FNMA #731996+/- 2.75 09/01/2033 1,384,891
1,297,162 FNMA #739757+/- 2.83 08/01/2033 1,333,740
988,922 FNMA #741458+/- 2.10 10/01/2033 1,014,235
451,249 FNMA #783245+/- 1.83 04/01/2034 451,261
1,295,978 FNMA #783251+/- 1.83 04/01/2044 1,295,901
4,942,103 FNMA #789463+/- 2.70 06/01/2034 5,075,390
2,705,248 FNMA #834933+/- 5.02 07/01/2035 2,785,654
5,000,000 FNMA #874331 5.07 02/01/2012 5,329,817
5,312,254 FNMA #880156 5.50 02/01/2036 5,644,893
1,070,265 FNMA #AA3274 5.50 02/01/2039 1,139,624
6,691,860 FNMA #AD0193 5.28 08/01/2019 7,356,361
42,772,566
--------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION: 2.69%
108,757 GNMA #345066 6.50 10/15/2023 116,831
68,238 GNMA #346960 6.50 12/15/2023 73,303
72,481 GNMA #354692 6.50 11/15/2023 77,861
133,508 GNMA #361398 6.50 01/15/2024 144,333
85,985 GNMA #366641 6.50 11/15/2023 92,368
73,396 GNMA #473918 7.00 04/15/2028 81,908
410,330 GNMA #531436 7.00 06/15/2042 421,817
8,690 GNMA #531965 7.72 12/15/2041 9,419
3,068,479 GNMA #714610 5.46 05/20/2059 3,310,582
4,083,057 GNMA #721379 5.65 06/20/2059 4,418,276
2,036,531 GNMA #721557 5.63 06/20/2059 2,196,399
506,898 GNMA #721558 5.63 08/20/2059 545,980
316,577 GNMA #780626 7.00 08/15/2027 352,748
11,841,825
--------------
TOTAL AGENCY SECURITIES (COST $63,380,605) 66,666,865
--------------
86 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
MANAGED FIXED INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
ASSET BACKED SECURITIES: 7.97%
$ 2,935,849 CHASE FUNDING MORTGAGE LOAN SERIES 2002-1 CLASS
1A5(o,o) 0.16% 02/25/2032 $ 2,829,911
3,500,000 CITICORP RESIDENTIAL MORTGAGE SECURITIES SERIES
2007-2 CLASS A6(o,o) 0.28 06/25/2037 3,237,419
5,000,000 COLLEGE LOAN CORPORATION TRUST SERIES 2006-A CLASS
A3+/- 0.37 10/25/2025 4,914,756
3,492,670 COUNTRYWIDE ASSET BACKED CERTIFICATES SERIES
2006-S4 CLASS A6+/- 5.83 07/25/2034 1,610,733
1,398,076 COUNTRYWIDE ASSET BACKED CERTIFICATES SERIES
2007-S2 CLASS A6+/- 5.78 05/25/2037 667,049
1,072,231 COUNTRYWIDE HOME EQUITY LOAN TRUST SERIES 2005-G
CLASS2A+/- 0.47 12/15/2035 302,753
2,310,000 CROWN CASTLE TOWERS LLC SERIES 2005-1A CLASS AFX++ 4.64 06/15/2035 2,344,650
387,737 GMAC MORTGAGE CORPORATION LOAN TRUST SERIES
2005-HE1 CLASS A1VN+/- 0.46 08/25/2035 159,619
898,409 GREEN TREE FINANCIAL CORPORATION SERIES 1997-7
CLASS A8+/- 6.86 07/15/2029 894,835
257,605 GSAMP TRUST SERIES 2005-SEA1 CLASS A+/-++(i) 0.58 01/25/2035 224,634
2,321,712 HFC HOME EQUITY LOAN ASSET BACKED CERTIFICATES
SERIES 2005-2 CLASS A1+/- 1.40 01/20/2035 2,128,734
1,325,000 HOUSEHOLD HOME EQUITY LOAN TRUST SERIES 2007-2
CLASS A4+/- 0.54 07/20/2036 822,551
2,000,000 HOUSEHOLD HOME EQUITY LOAN TRUST SERIES 2007-3
CLASS A3+/- 1.39 11/20/2036 1,326,166
3,800,000 KEYCORP STUDENT LOAN TRUST SERIES 1999-B CLASS
CTFS+/-(i) 0.98 11/25/2036 1,819,060
3,270,000 KEYCORP STUDENT LOAN TRUST SERIES 2006-A CLASS 2A2+/- 0.36 06/27/2025 2,892,924
5,000,000 NATIONAL COLLEGIATE STUDENT LOAN TRUST SERIES
2006-2 CLASS AIO(c) 6.00 08/25/2011 386,100
2,249,187 RAAC SERIES 2007-RP4 CLASS A+/-++(i) 0.59 11/25/2046 1,197,557
2,842,020 SLM STUDENT LOAN TRUST SERIES 2003-1 CLASS A5B+/-++ 0.75 12/15/2032 2,693,918
4,000,000 SLM STUDENT LOAN TRUST SERIES 2006-C CLASS A2+/- 0.35 09/15/2020 3,842,646
1,236,470 TERWIN MORTGAGE TRUST SERIES 2006-2HGS CLASS A1+/-++ 3.77 03/25/2037 182,022
1,834,520 WACHOVIA ASSET SECURITIZATION INCORPORATED SERIES
2007-HE2A CLASS A+/-++ 0.37 07/25/2037 664,463
TOTAL ASSET BACKED SECURITIES (COST $46,855,693) 35,142,500
--------------
COLLATERALIZED MORTGAGE OBLIGATIONS: 20.27%
4,031,873 ADJUSTABLE RATE MORTGAGE TRUST SERIES 2007-2 CLASS
2A1+/- 0.45 06/25/2037 1,998,063
4,000,000 BANC OF AMERICA COMMERCIAL MORTGAGE INCORPORATED
SERIES 2005-6 CLASS A4+/- 5.35 09/10/2047 4,056,371
3,400,000 CITIGROUP DEUTSCHE BANK COMMERCIAL MORTGAGE TRUST
SERIES 2005-CD1 CLASS A4+/- 5.23 07/15/2044 3,417,292
1,519,914 COUNTRYWIDE ALTERNATIVE LOAN TRUST SERIES 2005-27
CLASS 3A1+/- 1.99 08/25/2035 814,107
1,435,392 COUNTRYWIDE HOME LOANS SERIES 2004-R1 CLASS 2A++ 6.50 11/25/2034 1,292,077
3,363,602 COUNTRYWIDE HOME LOANS SERIES 2005-R1 CLASS 1AF1+/-++ 0.60 03/25/2035 2,624,823
2,698,659 COUNTRYWIDE HOME LOANS SERIES 2005-R3 CLASS AF+/-++ 0.64 09/25/2035 2,021,470
1,998,498 COUNTRYWIDE HOME LOANS SERIES 2006-OA5 CLASS 1A1+/- 0.44 04/25/2046 918,655
1,563,768 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES
CORPORATION SERIES 2004-AR5 CLASS 10A1+/- 2.97 06/25/2034 1,364,365
2,000,000 CREDIT SUISSE MORTGAGE CAPITAL CERTIFICATION
SERIES 2007-C1 CLASS AAB 5.34 02/15/2040 1,869,957
3,225,000 FANNIE MAE-ACES SERIES 2006-M2 CLASS A2F+/- 5.26 05/25/2020 3,514,306
2,340,203 FHLMC SERIES 2416 CLASS PE 6.00 10/15/2021 2,469,805
581,770 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES
T-20 CLASS A6 7.99 09/25/2029 580,351
2,071,256 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES
T-58 CLASS 4A 7.50 09/25/2043 2,347,639
473,718 FNMA GRANTOR TRUST SERIES 2002-T4 CLASS A2 7.00 12/25/2041 527,308
2,244,603 FNMA GRANTOR TRUST SERIES 2004-T2 CLASS 1A1 6.00 11/25/2043 2,372,265
2,963,583 FNMA GRANTOR TRUST SERIES 2004-T3 CLASS A1 6.00 02/25/2044 3,176,591
6,366 FNMA SERIES 1988-5 CLASS Z 9.20 03/25/2018 6,767
999,020 FNMA SERIES 2002-90 CLASS A2 6.50 11/25/2042 1,090,686
1,969,239 FNMA SERIES 2003-86 CLASS PT 4.50 09/25/2018 2,091,948
3,569,504 FNMA SERIES 2003-97 CLASS CA 5.00 10/25/2018 3,810,552
770,899 FNMA SERIES 2003-W4 CLASS 3A 7.00 10/25/2042 850,398
474,567 FNMA SERIES 2004-W1 CLASS 2A2 7.00 12/25/2033 528,252
4,463,392 FNMA WHOLE LOAN SERIES 2002-W4 CLASS A4 6.25 05/25/2042 4,872,936
2,631,511 FNMA WHOLE LOAN SERIES 2004-W11 CLASS 1A3 7.00 05/25/2044 2,902,886
1,309,724 FNMA WHOLE LOAN SERIES 2004-W8 CLASS 3A 7.50 06/25/2044 1,479,170
10,636,048 GNMA SERIES 2003-38 CLASS JC+/- 7.00 08/16/2042 12,084,198
55,520 HARBORVIEW MORTGAGE LOAN TRUST SERIES 2004-11
CLASS 3A2A+/- 0.58 01/19/2035 32,806
2,720,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES
CORPORATION SERIES 2006-LDP7 CLASS ASB+/- 6.07 04/15/2045 2,762,800
90,145 LEHMAN BROTHERS SMALL BALANCE COMMERCIAL SERIES
2006-1A CLASS 3A1+/-++ 5.68 04/25/2031 85,746
Wells Fargo Advantage Master Portfolios 87
Portfolio of Investments--November 30, 2009 (Unaudited)
MANAGED FIXED INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED)
$ 3,130,603 LEHMAN XS TRUST SERIES 2007-5 CLASS P3+/- 6.31% 05/25/2037 $ 1,394,696
1,086,041 LEHMAN XS TRUST SERIES 2007-6W CLASS A3+/- 0.56 05/25/2037 338,193
36,849 LF ROTHSCHILD MORTGAGE TRUST SERIES 2 CLASS Z 9.95 08/01/2017 40,557
2,200,000 MERRILL LYNCH MORTGAGE TRUST+/- 5.76 08/12/2043 2,193,449
2,134,381 NOMURA ASSET ACCEPTANCE CORPORATION SERIES 2004-R2
CLASS A1+/-++ 6.50 10/25/2034 2,004,984
857,523 SEQUOIA MORTGAGE TRUST SERIES 10 CLASS 1A+/- 0.64 10/20/2027 734,659
310,675 SMALL BUSINESS ADMINISTRATION PARTICIPATION CERTIFICATES
SERIES 2003-P10A CLASS 1 4.52 02/10/2013 324,180
1,083,809 SMALL BUSINESS ADMINISTRATION PARTICIPATION CERTIFICATES
SERIES 2006-20H CLASS 1 5.70 08/01/2026 1,194,120
2,858,869 STRUCTURED ASSET SECURITIES CORPORATION SERIES
2007-RM1 CLASS A1+/-++ 0.52 05/25/2047 1,841,684
4,000,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES
2005-C16 CLASS A4+/- 4.85 10/15/2041 3,925,860
3,188,847 WASHINGTON MUTUAL COMMERCIAL MORTGAGE SECURITIES TRUST
SERIES 2007-SL3 CLASS A1+/-++ 6.11 03/23/2045 3,142,290
1,079,474 WASHINGTON MUTUAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2005-AR6 CLASS 2A1A+/-(i) 0.47 04/25/2045 736,393
4,252,285 WASHINGTON MUTUAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2005-C3 CLASS A4+/- 2.72 07/25/2047 1,490,529
2,414,059 WASHINGTON MUTUAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2006-AR3 CLASS A1A+/-(i) 1.63 02/25/2046 1,326,777
1,773,321 WASHINGTON MUTUAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2006-AR4 CLASS DA+/- 1.60 06/25/2046 674,159
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (COST $101,834,912) 89,327,120
--------------
CORPORATE BONDS & NOTES: 29.68%
ADVERTISING: 0.12%
545,000 LAMAR MEDIA CORPORATION 6.63 08/15/2015 517,750
--------------
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR
MATERIALS: 0.15%
675,000 PHILLIPS-VAN HEUSEN 7.75 11/15/2023 655,422
--------------
AUTOMOTIVE REPAIR, SERVICES & PARKING: 0.60%
2,500,000 RYDER SYSTEM INCORPORATED SERIES MTN 5.85 03/01/2014 2,647,693
--------------
BUSINESS SERVICES: 0.81%
1,000,000 FISERV INCORPORATED 6.13 11/20/2012 1,101,789
150,000 SUNGARD DATA SYSTEMS INCORPORATED 4.88 01/15/2014 138,188
2,120,000 THOMPSON CORPORATION 6.20 01/05/2012 2,322,142
3,562,119
--------------
CHEMICALS & ALLIED PRODUCTS: 0.33%
1,500,000 VALSPAR CORPORATION 5.10 08/01/2015 1,477,457
--------------
COMMUNICATIONS: 0.26%
1,000,000 COX COMMUNICATIONS INCORPORATED 4.63 01/15/2010 1,003,870
150,000 L-3 COMMUNICATIONS CORPORATION 6.38 10/15/2015 147,563
1,151,433
--------------
DEPOSITORY INSTITUTIONS: 6.84%
2,785,000 ASSOCIATED BANCORP 6.75 08/15/2011 2,790,991
2,100,000 BAC CAPITAL TRUST XIV+/- 5.63 12/31/2049 1,386,000
6,839,000 BANKAMERICA CAPITAL III+/- 0.85 01/15/2027 4,386,405
2,000,000 BB&T CAPITAL TRUST IV+/- 6.82 06/12/2077 1,740,000
1,000,000 BNP PARIBAS CAPITAL TRUST+/-++ 9.00 12/29/2049 980,000
2,000,000 CHASE CAPITAL VI+/- 0.91 08/01/2028 1,423,642
1,685,000 CITIGROUP INCORPORATED 6.13 11/21/2017 1,692,938
4,000,000 CITY NATIONAL BANK 6.75 09/01/2011 4,154,704
88 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
MANAGED FIXED INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
DEPOSITORY INSTITUTIONS (continued)
$ 1,978,000 COLONIAL BANK NA MONTGOMERY AL#### 6.38% 12/01/2015 $ 2,473
750,000 CORESTATES CAPITAL TRUST II+/-++ 0.93 01/15/2027 455,477
1,250,000 DEUTSCHE BANK CAPITAL FUNDING TRUST VII+/-++ 5.63 01/29/2049 918,750
500,000 FIRST CITIZENS BANCORP++(i) 6.80 04/01/2015 452,181
2,100,000 HSBC CAPITAL FUNDING LP+/-++ 4.61 12/31/2049 1,757,190
1,000,000 JPMORGAN CHASE CAPITAL XVIII 6.95 08/17/2036 987,921
2,900,000 NATIONAL CAPITAL COMMERCE INCORPORATED+/- 1.27 04/01/2027 1,145,256
500,000 NATIONAL CITY BANK CLEVELAND OH+/- 0.68 06/07/2017 420,256
450,000 NTC CAPITAL TRUST SERIES A+/- 0.80 01/15/2027 246,795
1,300,000 RABOBANK NEDERLAND NV+/-++ 11.00 06/29/2049 1,607,330
2,875,000 TCF NATIONAL BANK+/- 1.93 06/15/2014 2,116,489
1,950,000 UBS PREFERRED FUNDING TRUST V SERIES 1+/- 6.24 05/29/2049 1,501,500
30,166,298
--------------
EDUCATIONAL SERVICES: 1.15%
1,000,000 DARTMOUTH COLLEGE 4.75 06/01/2019 1,062,010
2,235,000 MASSACHUSETTS INSTITUTE OF TECHNOLOGY 7.25 11/02/2096 2,887,946
1,000,000 PEPPERDINE UNIVERSITY 5.45 08/01/2019 1,103,380
5,053,336
--------------
ELECTRIC, GAS & SANITARY SERVICES: 2.04%
1,000,000 CENTRAL MAINE POWER COMPANY++ 5.70 06/01/2019 1,075,801
1,000,000 CONNECTICUT LIGHT & POWER 5.38 03/01/2017 1,066,174
1,600,000 DUKE ENERGY FIELD SERVICES LLC 7.88 08/16/2010 1,671,752
2,270,993 GREAT RIVER ENERGY++ 5.83 07/01/2017 2,536,404
750,000 NGPL PIPECO LLC++ 6.51 12/15/2012 825,792
1,365,000 PEOPLES ENERGY CORPORATION 6.90 01/15/2011 1,439,752
375,000 QUICKSILVER RESOURCES INCORPORATED 8.25 08/01/2015 373,125
8,988,800
--------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER
EQUIPMENT: 1.19%
1,330,000 BAE SYSTEMS HOLDINGS INCORPORATED++ 6.40 12/15/2011 1,426,933
250,000 JABIL CIRCUIT INCORPORATED 8.25 03/15/2018 264,063
2,500,000 METTLER TOLEDO INTERNATIONAL INCORPORATED 4.85 11/15/2010 2,473,640
275,000 MOOG INCORPORATED 6.25 01/15/2015 259,875
853,484 TENASKA ALABAMA II PARTNERS LP++ 7.00 06/30/2021 804,932
5,229,443
--------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT: 0.08%
325,000 VALMONT INDUSTRIES INCORPORATED 6.88 05/01/2014 331,906
--------------
FOOD & KINDRED PRODUCTS: 0.75%
700,000 KELLOGG COMPANY 4.45 05/30/2016 743,798
1,600,000 KRAFT FOODS INCORPORATED 6.25 06/01/2012 1,749,053
750,000 MCCORMICK & COMPANY 5.75 12/15/2017 817,373
3,310,224
--------------
FURNITURE & FIXTURES: 0.33%
1,450,000 STEELCASE INCORPORATED 6.50 08/15/2011 1,461,456
--------------
HEALTH SERVICES: 1.16%
3,650,000 AMERICAN ASSOCIATION OF RETIRED PERSONS++ 7.50 05/01/2031 3,981,767
1,000,000 SCHERING-PLOUGH CORPORATION 6.00 09/15/2017 1,136,074
5,117,841
--------------
Wells Fargo Advantage Master Portfolios 89
Portfolio of Investments--November 30, 2009 (Unaudited)
MANAGED FIXED INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
HOLDING & OTHER INVESTMENT OFFICES: 1.54%
$ 400,000 LIBERTY PROPERTY LP 6.63% 10/01/2017 $ 399,872
3,008,000 MANUFACTURERS & TRADERS TRUST COMPANY+/- 5.59 12/28/2020 2,510,411
1,750,000 NATIONAL CITY BANK OF COLUMBUS SERIES 4 7.25 07/15/2010 1,795,278
250,000 NATIONAL CITY BANK OF KENTUCKY SERIES BKNT 6.30 02/15/2011 259,438
2,500,000 TOLL ROAD INVESTMENT PARTNERSHIP II LP++## 6.37 02/15/2015 1,803,380
6,768,379
--------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 0.61%
1,100,000 ACTUANT CORPORATION 6.88 06/15/2017 1,051,875
1,425,000 BLACK & DECKER 5.75 11/15/2016 1,485,810
150,000 SCIENTIFIC GAMES CORPORATION 6.25 12/15/2012 145,875
2,683,560
--------------
INSURANCE AGENTS, BROKERS & SERVICE: 1.37%
1,520,000 AEGON NV 4.75 06/01/2013 1,564,746
1,800,000 ALLSTATE FINANCIAL GLOBAL FUNDING++ 6.50 06/14/2011 1,920,290
475,000 METROPOLITAN LIFE GLOBAL FUNDING I++ 5.13 06/10/2014 510,043
2,670,000 NLV FINANCIAL CORPORATION++ 7.50 08/15/2033 2,029,518
6,024,597
--------------
INSURANCE CARRIERS: 4.56%
2,675,000 BLUE CROSS & BLUE SHIELD OF FLORIDA++ 8.25 11/15/2011 2,942,955
1,385,000 LIBERTY MUTUAL++ 4.88 02/01/2010 1,380,209
750,000 LINCOLN NATIONAL CORPORATION 6.20 12/15/2011 786,914
1,700,000 METLIFE GLOBAL FUNDING++ 5.13 11/09/2011 1,790,124
4,450,000 MINNESOTA LIFE INSURANCE COMPANY++ 8.25 09/15/2025 4,670,551
2,730,000 MONUMENTAL GLOBAL FUNDING II++ 4.63 03/15/2010 2,735,460
1,900,000 NEW YORK LIFE GLOBAL FUNDING++ 5.38 09/15/2013 2,097,121
2,145,000 PRINCIPAL LIFE GLOBAL FUNDING I++ 6.25 02/15/2012 2,277,138
1,415,000 WR BERKLEY CORPORATION 5.13 09/30/2010 1,427,959
20,108,431
--------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL &
OPTICAL GOODS: 0.09%
389,000 BIO-RAD LABORATORIES INCORPORATED 6.13 12/15/2014 378,303
--------------
MOTION PICTURES: 0.85%
1,000,000 TIME WARNER INCORPORATED 6.75 04/15/2011 1,067,246
1,500,000 TIME WARNER INCORPORATED 6.20 07/01/2013 1,664,013
985,000 VIACOM INCORPORATED 7.70 07/30/2010 1,018,557
3,749,816
--------------
NON-DEPOSITORY CREDIT INSTITUTIONS: 0.36%
375,000 BUNGE LIMITED FINANCE CORPORATION 8.50 06/15/2019 437,072
1,450,000 GENERAL ELECTRIC CAPITAL CORPORATION+/- 0.66 05/05/2026 1,155,237
1,592,309
--------------
OIL & GAS EXTRACTION: 0.60%
750,000 CHESAPEAKE ENERGY CORPORATION 7.50 06/15/2014 753,750
650,000 EQT CORPORATION 8.13 06/01/2019 759,095
400,000 MARKWEST ENERGY PARTNERS/FINANCE CORPORATION 6.88 11/01/2014 376,000
410,000 PARKER DRILLING COMPANY 9.63 10/01/2013 418,200
340,000 RANGE RESOURCES CORPORATION 7.38 07/15/2013 345,100
2,652,145
--------------
90 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
MANAGED FIXED INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
PERSONAL SERVICES: 0.13%
$ 200,000 SERVICE CORPORATION INTERNATIONAL 7.88% 02/01/2013 $ 194,000
400,000 SERVICE CORPORATION INTERNATIONAL 7.38 10/01/2014 399,000
593,000
--------------
PETROLEUM REFINING & RELATED INDUSTRIES: 0.27%
1,000,000 CONOCOPHILLIPS 4.60 01/15/2015 1,085,322
100,000 TESORO CORPORATION 6.63 11/01/2015 91,750
1,177,072
--------------
PRIMARY METAL INDUSTRIES: 0.13%
175,000 CENTURY ALUMINUM COMPANY 7.50 08/15/2014 161,000
100,000 INTERNATIONAL STEEL GROUP 6.50 04/15/2014 107,392
295,000 STEEL DYNAMICS 7.38 11/01/2012 294,263
562,655
--------------
RAILROAD TRANSPORTATION: 0.32%
1,150,000 BURLINGTON NORTHERN SANTA FE CORPORATION 8.13 04/15/2020 1,426,253
--------------
REAL ESTATE: 0.33%
1,300,000 HOUSING URBAN DEVELOPMENT SERIES 04-A 5.08 08/01/2013 1,458,259
--------------
REAL ESTATE INVESTMENT TRUSTS (REITS): 0.95%
800,000 PROLOGIS TRUST 5.25 11/15/2010 804,981
500,000 REALTY INCOME CORPORATION 5.50 11/15/2015 495,914
1,275,000 REALTY INCOME CORPORATION 6.75 08/15/2019 1,305,794
1,500,000 SIMON PROPERTY GROUP LP 5.75 05/01/2012 1,600,436
4,207,125
--------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 0.81%
1,250,000 CHARLES SCHWAB CORPORATION 6.38 09/01/2017 1,404,535
1,500,000 GOLDMAN SACHS CAPITAL II+/- 5.79 12/29/2049 1,102,500
500,000 MERRILL LYNCH & COMPANY 6.05 08/15/2012 538,125
500,000 MERRILL LYNCH & COMPANY 6.05 05/16/2016 505,768
3,550,928
--------------
TRANSPORTATION BY AIR: 0.61%
2,506,104 FEDEX CORPORATION SERIES 97-B 7.52 01/15/2018 2,705,984
--------------
TRANSPORTATION EQUIPMENT: 0.19%
860,000 NAVISTAR INTERNATIONAL CORPORATION(i) 7.50 06/15/2011 848,175
--------------
WHOLESALE TRADE NON-DURABLE GOODS: 0.07%
300,000 STEWART ENTERPRISES 6.25 02/15/2013 291,750
--------------
WHOLESALE TRADE-DURABLE GOODS: 0.08%
350,000 ACE HARDWARE CORPORATION++ 9.13 06/01/2016 374,500
--------------
TOTAL CORPORATE BONDS & NOTES (COST $136,929,595) 130,824,419
--------------
FOREIGN CORPORATE BONDS: 1.62%
2,000,000 BARCLAYS BANK PLC+/-++ 5.93 09/29/2049 1,520,000
1,500,000 BP CAPITAL MARKETS PLC 3.63 05/08/2014 1,571,336
200,000 ISPAT INLAND INCORPORATED 9.75 04/01/2014 210,401
1,100,000 PEARSON PLC (UK) PRIVATE PLACEMENT++ 7.00 06/15/2011 1,174,564
2,500,000 SABMILLER PLC++ 6.20 07/01/2011 2,668,173
TOTAL FOREIGN CORPORATE BONDS (COST $7,333,175) 7,144,474
--------------
Wells Fargo Advantage Master Portfolios 91
Portfolio of Investments--November 30, 2009 (Unaudited)
MANAGED FIXED INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
FOREIGN GOVERNMENT BONDS: 0.75%
$ 1,625,000 PROVINCE OF ONTARIO CANADA 4.10% 06/16/2014 $ 1,737,559
1,500,000 RABOBANK NEDERLAND++ 4.20 05/13/2014 1,589,357
TOTAL FOREIGN GOVERNMENT BONDS (COST $3,121,534) 3,326,916
--------------
MUNICIPAL BONDS & NOTES: 12.67%
825,000 CALIFORNIA STATE BUILD AMERICA BONDS (TAXABLE -
VARIOUS PURPOSE) 7.55 04/01/2039 853,768
1,500,000 CHEROKEE COUNTY GA (PROPERTY TAX REVENUE) 5.87 08/01/2028 1,547,535
1,000,000 CITY OF CHICAGO IL TAXABLE SERIES C (PROPERTY TAX
REVENUE, AGM INSURED) 4.88 01/01/2015 1,068,910
1,000,000 CITY OF CHICAGO IL TAXABLE SERIES D (PROPERTY TAX
REVENUE, NATL-RE INSURED) 5.44 01/01/2024 1,026,870
1,600,000 CITY OF EL PASO TX (PROPERTY TAX REVENUE) 3.61 08/15/2014 1,653,632
1,500,000 COMMONWEALTH OF MASSACHUSETTS SERIES D (TAX REVENUE) 3.25 07/01/2014 1,555,425
1,000,000 DALLAS COUNTY HOSPITAL DISTRICT SERIES C (PROPERTY
TAX REVENUE) 4.45 08/15/2019 1,023,350
2,500,000 DUKE UNIVERSITY TAXABLE SERIES A (GO OF UNIVERSITY) 5.85 04/01/2037 2,661,950
4,030,000 HUDSON COUNTY NJ IMPROVEMENT AUTHORITY FACILITIES
(LEASING REVENUE, FSA INSURED) 7.40 12/01/2025 4,438,360
1,885,000 INDIANA BOND BANK STATE REVENUE SCHOOL SEVERANCE
FUND 8-A, (OTHER REVENUE, FGIC INSURED) 4.73 01/15/2014 2,072,275
1,020,000 INDIANA STATE HOUSING & COMMUNITY DEVELOPMENT
AUTHORITY SERIES A-2 (HOUSING REVENUE) 5.51 01/01/2039 1,004,690
4,290,000 INDIANA STATE HOUSING & COMMUNITY DEVELOPMENT
AUTHORITY SFMR SERIES D-2 (HOUSING REVENUE, GNMA/FNMA
INSURED) 5.41 07/01/2038 4,246,800
440,000 KENTUCKY HOUSING CORPORATION HOUSING REVENUE SERIES
D (HOUSING REVENUE) 5.21 01/01/2014 478,359
800,000 KENTUCKY HOUSING CORPORATION HOUSING REVENUE SERIES
D (HOUSING REVENUE) 5.75 07/01/2037 794,728
680,000 KENTUCKY HOUSING CORPORATION HOUSING REVENUE SERIES
J (HOUSING REVENUE) 5.92 07/01/2034 680,068
2,210,000 LOYOLA UNIVERSITY ILLINOIS SERIES C REVENUE BONDS
(COLLEGE & UNIVERSITY REVENUE) 4.80 07/01/2013 2,314,865
800,000 MARICOPA COUNTY ELEMENTARY SCHOOL DISTRICT
#28-KYRENE ELEMENTARY AZ (PROPERTY TAX REVENUE) 5.38 07/01/2019 888,192
1,595,000 MINNESOTA STATE HOUSING FINANCE AGENCY RESIDENTIAL
HOUSING FINANCE SERIES H (HOUSING REVENUE) 5.85 07/01/2036 1,624,651
3,800,000 MINNESOTA STATE HOUSING FINANCE AGENCY RESIDENTIAL
HOUSING FINANCE SERIES J (HOUSING REVENUE) 6.13 07/01/2038 3,796,656
1,500,000 OHIO COUNTY WEST VIRGINIA COUNTY COMMON SPECIAL
DISTRICT EXCISE TAX REVENUE SERIES A (SALES TAX REVENUE) 8.25 03/01/2035 1,283,565
3,440,000 OHIO STATE HOUSING FINANCE AGENCY RESIDENTIAL
MORTGAGE REVENUE SERIES K (HOUSING REVENUE) 5.97 03/01/2029 3,432,363
1,915,000 OHIO STATE HOUSING FINANCE AGENCY RESIDENTIAL
MORTGAGE REVENUE SERIES O (HOUSING REVENUE, GNMA/FNMA
INSURED) 5.47 09/01/2025 1,902,897
2,095,000 PENNSYLVANIA HOUSING FINANCE AGENCY SFMR SERIES 93C
(HOUSING REVENUE GO OF AGENCY) 5.84 04/01/2037 2,095,545
1,780,000 STATE OF NEW HAMPSHIRE HFA SFMR SERIES D (HOUSING
REVENUE) 5.53 07/01/2037 1,763,535
3,914,647 STATE OF TEXAS BRAZOS HIGHER EDUCATION AUTHORITY
INCORPORATED SERIES 2005-4 CLASS A5 (STUDENT LOAN REVENUE,
GUARANTEED STUDENT LOANS)+/-(i) 4.91 12/01/2040 3,915,821
1,300,000 UNIVERSITY OF MICHIGAN (COLLEGE & UNIVERSITY
REVENUE) 5.59 04/01/2021 1,390,766
910,000 VIRGINIA PUBLIC BUILDING AUTHORITY SERIES C (OTHER
REVENUE) 4.95 08/01/2018 984,538
635,000 VIRGINIA PUBLIC BUILDING AUTHORITY SERIES C (OTHER
REVENUE) 5.30 08/01/2021 689,166
1,250,000 VIRGINIA RESOURCES AUTHORITY SERIES A (OTHER
REVENUE) 4.71 11/01/2017 1,362,825
1,495,000 WEST BEND JOINT SCHOOL DISTRICT #1 (PROPERTY TAX
REVENUE) 4.85 04/01/2017 1,577,345
1,680,000 WISCONSIN HOUSING & ECONOMIC DEVELOPMENT AUTHORITY
HOME OWNERSHIP REVENUE SERIES F (HOUSING REVENUE, GO OF
AUTHORITY) 5.73 09/01/2037 1,707,485
TOTAL MUNICIPAL BONDS & NOTES (COST $54,438,437) 55,836,935
--------------
TERM LOANS: 0.85%
427,724 ARAMARK CORPORATION TERM LOAN B 2.12 01/26/2014 385,242
555,000 BSC INTERNATIONAL HOLDING TERM LOAN 2.25 04/21/2011 516,150
1,470,000 FLEXTRONICS INTERNATIONAL TERM LOAN 2.55 10/01/2012 1,379,595
371,795 GEORGIA-PACIFIC CORPORATION 1ST LIEN TERM LOAN B 2.04 12/20/2012 352,548
92 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
MANAGED FIXED INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
TERM LOANS (CONTINUED)
1,097,654 OSHKOSH TRUCK CORPORATION TERM LOAN B 6.31% 12/06/2013 $ 1,092,473
TOTAL TERM LOANS (COST $3,915,114) 3,726,008
--------------
US TREASURY SECURITIES: 5.40%
US TREASURY BONDS: 5.40%
$ 6,300,000 US TREASURY BOND<< 5.50 08/15/2028 7,508,813
5,959,898 US TREASURY BOND - INFLATION PROTECTED 2.50 01/15/2029 6,672,291
7,421,870 US TREASURY BOND - INFLATION PROTECTED 3.38 04/15/2032 9,606,104
23,787,208
--------------
TOTAL US TREASURY SECURITIES (COST $21,576,965) 23,787,208
--------------
SHARES YIELD
- ------------- -------------
COLLATERAL FOR SECURITIES LENDING: 0.87%
COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.13%
145,622 AIM STIT-LIQUID ASSETS PORTFOLIO(s) 0.21 145,622
145,622 BLACKROCK LIQUIDITY FUNDS TEMPFUND
PORTFOLIO(s) 0.16 145,622
145,622 DREYFUS CASH MANAGEMENT FUND INSTITUTIONAL(s) 0.11 145,622
145,622 DWS MONEY MARKET SERIES INSTITUTIONAL(s) 0.21 145,622
582,488
--------------
PRINCIPAL
- -------------
COLLATERAL INVESTED IN OTHER ASSETS: 0.74%
$ 28,315 ALLIED IRISH BANKS NORTH AMERICA INCORPORATED 0.26 12/07/2009 28,314
10,113 AMSTEL FUNDING CORPORATION++(p) 1.25 12/18/2009 10,107
10,113 ANTALIS US FUNDING CORPORATION++(p) 0.18 12/03/2009 10,113
30,338 ANTALIS US FUNDING CORPORATION++(p) 0.20 12/04/2009 30,337
24,270 ARABELLA FINANCE LLC++(p) 0.35 12/01/2009 24,270
34,383 ARABELLA FINANCE LLC++(p) 0.40 12/03/2009 34,382
1,011 ARABELLA FINANCE LLC++(p) 0.40 12/04/2009 1,011
20,225 ASPEN FUNDING CORPORATION++(p) 0.18 12/21/2009 20,223
60,676 BANK OF AMERICA 0.18 12/23/2009 60,669
175,859 BANK OF AMERICA REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY
VALUE $175,860) 0.16 12/01/2009 175,859
30,338 BANK OF IRELAND 0.35 12/01/2009 30,338
24,270 BANK OF IRELAND 0.50 12/02/2009 24,270
9,795 BARTON CAPITAL CORPORATION++(p) 0.18 12/01/2009 9,795
5,056 BELMONT FUNDING LLC++(p) 0.50 12/01/2009 5,056
26,293 BNP PARIBAS (NEW YORK) 0.21 12/08/2009 26,293
22,248 BNP PARIBAS (NEW YORK) 0.21 12/14/2009 22,248
60,676 BRYANT BANK FUNDING++ 0.18 12/23/2009 60,669
50,563 CAFCO LLC++ 0.17 12/09/2009 50,561
2,225 CALCASIEU PARISH LA+/-ss 0.40 12/01/2027 2,225
48,541 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY+/-ss 0.23 11/01/2026 48,541
6,472 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT
AUTHORITY+/-ss 0.35 06/01/2028 6,472
50,563 CHARTA LLC++(p) 0.17 12/09/2009 50,561
5,365 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.30 10/01/2038 5,365
10,113 COOK COUNTY IL+/-ss 0.40 11/01/2030 10,113
61,376 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT -
102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES
(MATURITY VALUE $61,376) 0.17 12/01/2009 61,376
34,383 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.40 12/15/2037 34,383
24,270 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/02/2009 24,270
24,270 DEXIA CREDIT LOCAL DE FRANCE SA 0.27 12/04/2009 24,270
29,327 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/07/2009 29,327
50,563 E.ON AG++ 0.17 12/21/2009 50,558
Wells Fargo Advantage Master Portfolios 93
Portfolio of Investments--November 30, 2009 (Unaudited)
MANAGED FIXED INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED)
$ 50,563 ENI FINANCE USA INCORPORATED++ 0.17% 12/18/2009 $ 50,559
52,586 FORTIS FUNDING LLC++ 0.20 12/29/2009 52,578
54,608 GDF SUEZ++ 0.17 12/15/2009 54,605
40,451 GEMINI SECURITIZATION INCORPORATED++(p) 0.18 12/10/2009 40,449
50,523 GOLDMAN SACHS REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY
VALUE $50,523) 0.17 12/01/2009 50,523
50,563 GOTHAM FUNDING CORPORATION++ 0.18 12/15/2009 50,560
10,113 GRAMPIAN FUNDING++(p) 0.25 12/03/2009 10,113
42,473 GRAMPIAN FUNDING++(p) 0.28 12/15/2009 42,468
376,380 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 139,976
33,250 HAMILTON COUNTY OHIO HOSPITALS+/-ss 0.20 05/15/2037 33,250
3,337 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.30 11/01/2042 3,337
16,382 HOUSTON TX UTILITY SYSTEM+/-ss 0.27 05/15/2034 16,382
5,784 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY
REVENUES+/-ss 0.30 07/01/2029 5,784
4,045 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.29 01/01/2018 4,045
40,451 ING USA FUNDING LLC 0.19 12/07/2009 40,449
10,113 ING USA FUNDING LLC 0.18 12/09/2009 10,112
155,278 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED
BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $155,279) 0.17 12/01/2009 155,278
20,225 JUPITER SECURITIZATION CORPORATION++(p) 0.18 12/02/2009 20,225
10,113 JUPITER SECURITIZATION CORPORATION++ 0.18 12/03/2009 10,113
6,068 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.29 04/15/2025 6,068
60,676 KBC BANK NV BRUSSELS 0.18 12/01/2009 60,676
12,135 LLOYDS TSB BANK PLC 0.18 12/17/2009 12,134
40,451 LLOYDS TSB BANK PLC (NEW YORK) 0.20 12/07/2009 40,451
16,180 LMA AMERICAS LLC++(p) 0.18 12/11/2009 16,179
9,101 LMA AMERICAS LLC++(p) 0.18 12/17/2009 9,101
30,338 LMA AMERICAS LLC++(p) 0.19 12/21/2009 30,335
9,101 LOUISIANA PUBLIC FACILITIES AUTHORITY+/-ss 0.19 10/01/2033 9,101
50,159 MASSACHUSETTS HEFA+/-ss 0.25 10/01/2034 50,159
5,552 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.24 02/01/2036 5,552
42,473 NATIXIS 0.27 12/07/2009 42,473
4,045 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.31 01/01/2018 4,045
44,496 NEW YORK STATE DORMITORY AUTHORITY 0.22 07/01/2034 44,496
40,451 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.24 12/01/2040 40,451
50,563 NEWPORT FUNDING CORPORATION++(p) 0.18 12/15/2009 50,560
9,900 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.30 01/01/2034 9,900
20,458 RBS SECURITIES INCORPORATED REPURCHASE AGREEMENT -
102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $20,458) 0.18 12/01/2009 20,458
7,079 REGENCY MARKETS #1 LLC++(p) 0.18 12/04/2009 7,079
33,614 REGENCY MARKETS #1 LLC++(p) 0.20 12/09/2009 33,613
10,113 ROMULUS FUNDING CORPORATION++ 0.30 12/15/2009 10,111
36,405 ROYAL BANK OF SCOTLAND PLC 0.20 12/02/2009 36,405
28,315 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.20 12/01/2028 28,315
40,451 SOCIETE GENERALE NORTH AMERICA 0.19 12/18/2009 40,447
2,528 STARBIRD FUNDING CORPORATION++(p) 0.15 12/01/2009 2,528
40,451 STARBIRD FUNDING CORPORATION++(p) 0.20 12/03/2009 40,450
50,563 THAMES ASSET GLOBAL SECURITIZATION #1
INCORPORATED++ 0.18 12/18/2009 50,559
12,135 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 12/17/2009 12,134
41,053 TULIP FUNDING CORPORATION++(p) 0.19 12/07/2009 41,052
13,349 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.24 07/01/2032 13,349
40,451 UBS AG (STAMFORD CT) 0.31 12/04/2009 40,451
60,676 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 60,676
6,068 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.29 12/15/2040 6,068
1,158,349 VFNC CORPORATION+/-(a)++(i) 0.24 09/30/2010 579,174
94 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
MANAGED FIXED INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED)
$ 2,528 VICTORY RECEIVABLES CORPORATION++(p) 0.15% 12/01/2009 $ 2,528
10,113 VICTORY RECEIVABLES CORPORATION++(p) 0.19 12/08/2009 10,112
33,511 VICTORY RECEIVABLES CORPORATION++ 0.18 12/16/2009 33,509
3,263,481
--------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $3,794,890) 3,845,969
--------------
SHARES YIELD
- ------------- -------------
SHORT-TERM INVESTMENTS: 4.42%
19,480,123 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++(u) 0.13 19,480,123
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $19,480,123) 19,480,123
--------------
TOTAL INVESTMENTS IN SECURITIES
(COST $462,661,043)* 99.63% 439,108,537
OTHER ASSETS AND LIABILITIES, NET 0.37 1,621,146
------ --------------
TOTAL NET ASSETS 100.00% $ 440,729,683
====== --------------
- ----------
+/- Variable rate investments.
(a) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
(0)(0) Stepped coupon bond. Interest rate presented is yield to maturity.
++ Securities that may be resold to "qualified institutional buyers" under
rule 144A or securities offered pursuant to section 4(2) of the Securities
Act of 1933, as amended.
<< All or a portion of this security is on loan.
(s) Rate shown is the 1-day annualized yield at period end.
(c) Interest-only securities entitle holders to receive only the interest
payments on the underlying mortgages. The principal amount shown is the
notional amount of the underlying mortgages. Interest rate disclosed
represents the coupon rate.
SS These securities are subject to a demand feature which reduces the
effective maturity.
## Zero coupon bond. Interest rate presented is yield to maturity.
(i) Illiquid security.
#### This security is currently in default with regard to scheduled interest
and/or principal payments.
(p) Asset-backed commercial paper.
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The Wells
Fargo Advantage Money Market Fund does not pay an investment advisory fee.
+++ Short-term security of an affiliate of the Fund with a cost of $19,480,123.
(u) Rate shown is the 7-day annualized yield at period end.
* Cost for federal income tax purposes is $463,161,924 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 15,646,724
Gross unrealized depreciation (39,700,111)
------------
Net unrealized depreciation $(24,053,387)
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Master Portfolios 95
Portfolio of Investments--November 30, 2009 (Unaudited)
STABLE INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
AGENCY SECURITIES: 24.69%
FEDERAL HOME LOAN MORTGAGE CORPORATION: 3.85%
$ 4,432,509 FHLMC #1B4052+/- 4.67% 04/01/2038 $ 4,643,051
3,183,891 FHLMC #1G0052+/- 4.77 02/01/2035 3,286,313
93,343 FHLMC #786614+/- 3.76 08/01/2025 96,330
74,167 FHLMC #845151+/- 3.01 06/01/2022 76,001
10,825 FHLMC #846367+/- 3.67 04/01/2029 11,056
2,158,342 FHLMC #E02227 6.00 11/01/2021 2,326,648
687,092 FHLMC #E90573 6.00 07/01/2017 745,652
769,967 FHLMC #G90030 7.50 07/17/2017 818,712
12,003,763
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION: 20.72%
100,363 FNMA #155506+/- 3.05 04/01/2022 101,766
245,585 FNMA #190815+/- 3.36 07/01/2017 242,675
123,756 FNMA #253482 8.50 10/01/2030 142,951
1,654,892 FNMA #289517+/- 2.66 04/01/2034 1,685,364
3,897,480 FNMA #295541+/- 4.17 10/01/2032 4,029,655
28,215 FNMA #331866+/- 3.80 12/01/2025 28,532
2,037,301 FNMA #420263+/- 2.72 10/01/2024 2,016,472
1,838,955 FNMA #420264+/- 2.76 07/01/2034 1,820,496
3,288,388 FNMA #462209+/- 5.65 04/01/2036 3,448,012
15,160 FNMA #46698+/- 3.82 12/01/2015 15,220
735,636 FNMA #545927 6.50 12/01/2015 795,958
1,313,729 FNMA #631367 5.50 02/01/2017 1,422,331
1,653,032 FNMA #686043+/- 2.78 07/01/2033 1,705,903
948,902 FNMA #693015+/- 3.06 06/01/2033 995,177
4,086,579 FNMA #725802+/- 4.43 08/01/2034 4,192,211
601,349 FNMA #732003+/- 2.12 09/01/2033 605,810
1,556,500 FNMA #734329+/- 3.01 06/01/2033 1,600,730
1,193,967 FNMA #735572 5.00 04/01/2014 1,239,584
2,017,411 FNMA #735977+/- 4.72 08/01/2035 2,100,426
2,147,027 FNMA #739757+/- 2.83 08/01/2033 2,207,570
1,514,136 FNMA #741447+/- 2.16 10/01/2033 1,551,382
1,932,039 FNMA #741454+/- 2.11 10/01/2033 1,981,888
2,776,618 FNMA #745649+/- 4.55 11/01/2035 2,892,404
1,265,265 FNMA #750805+/- 3.55 12/01/2033 1,309,361
2,030,497 FNMA #764265+/- 4.24 05/01/2034 2,113,970
853,381 FNMA #783249+/- 1.83 04/01/2044 853,144
3,259,811 FNMA #783251+/- 1.83 04/01/2044 3,259,617
6,177,632 FNMA #789463+/- 2.70 06/01/2034 6,344,241
1,317,367 FNMA #806504+/- 1.83 10/01/2034 1,317,060
1,381,303 FNMA #806505+/- 1.83 10/01/2044 1,380,917
2,463,725 FNMA #826179+/- 4.70 07/01/2035 2,570,385
2,705,248 FNMA #834933+/- 5.02 07/01/2035 2,785,654
1,873,014 FNMA #849014+/- 5.51 01/01/2036 1,962,125
1,250,000 FNMA #874245 5.48 01/01/2011 1,278,258
2,528,361 FNMA #936591+/- 5.66 04/01/2037 2,677,013
64,674,262
--------------
SMALL BUSINESS ADMINISTRATION: 0.12%
58,681 SBA #501224+/- 2.00 06/25/2015 58,768
11,527 SBA #502966+/- 4.48 05/25/2015 11,682
81,215 SBA #503405+/- 3.63 05/25/2016 82,867
96 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
STABLE INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
SMALL BUSINESS ADMINISTRATION (CONTINUED)
$ 228,364 SBA #503611+/- 3.13% 12/25/2021 $ 232,951
386,268
--------------
TOTAL AGENCY SECURITIES (COST $74,906,442) 77,064,293
--------------
ASSET BACKED SECURITIES: 20.54%
108,109 ASSET BACKED SECURITIES CORPORATION HOME EQUITY
SERIES 2001-HE2 CLASS A1+/- 0.76 06/15/2031 67,897
2,291,025 BANK OF AMERICA SECURITIES AUTO TRUST SERIES
2006-G1 CLASS A4 5.17 12/20/2010 2,296,316
1,462,471 CATERPILLAR FINANCIAL ASSET TRUST SERIES 2007-A
CLASS A3B+/- 0.71 06/25/2012 1,462,282
441,790 CATERPILLAR FINANCIAL ASSET TRUST SERIES 2008-A
CLASS A2B+/- 1.39 12/27/2010 442,045
3,000,000 CHASE ISSUANCE TRUST SERIES 2005-A8 CLASS A8+/- 0.28 10/15/2012 2,992,059
1,700,000 CITIFINANCIAL AUTO ISSUANCE TRUST++ 1.83 11/15/2012 1,705,949
2,850,000 COLLEGE LOAN CORPORATION TRUST SERIES 2006-A CLASS
A3+/- 0.37 10/25/2025 2,801,411
895,832 COUNTRYWIDE ASSET BACKED CERTIFICATES SERIES
2003-BC1 CLASS A1+/- 1.04 03/25/2033 664,849
208,801 COUNTRYWIDE ASSET BACKED CERTIFICATES SERIES
2003-SD2 CLASS A1+++/- 0.74 09/25/2032 150,267
531,375 COUNTRYWIDE ASSET BACKED CERTIFICATES SERIES
2004-SD2 CLASS A1+++/-(i) 0.61 11/25/2033 397,615
647,492 COUNTRYWIDE ASSET BACKED CERTIFICATES SERIES
2006-SD2 CLASS 1A1+++/- 0.59 11/25/2036 402,367
190,680 COUNTRYWIDE HOME EQUITY LOAN TRUST SERIES 2002-G
CLASS A+/-(i) 0.61 12/15/2028 140,781
1,400,765 COUNTRYWIDE HOME EQUITY LOAN TRUST SERIES 2005-M
CLASS A1+/- 0.48 02/15/2036 539,827
1,691,060 FIFTH THIRD HOME EQUITY LOAN TRUST SERIES 2003-1
CLASS A+/- 0.49 09/20/2023 864,956
155,959 FIRST HORIZON ABS TRUST SERIES 2004-HE1 CLASS A+/-(i) 0.45 01/25/2024 84,785
694,364 FIRST HORIZON ABS TRUST SERIES 2004-HE3 CLASS A+/- 0.53 10/25/2034 286,453
1,249,259 FIRST HORIZON ABS TRUST SERIES 2006-HE1 CLASS A+/- 0.40 10/25/2034 538,418
3,262,751 FIRST HORIZON ABS TRUST SERIES 2007-HE1 CLASS A+/- 0.37 09/25/2029 1,466,887
2,260,260 GCO EDUCATION LOAN FUNDING TRUST SERIES 2007-1A
CLASS A4L+++/- 0.41 09/25/2020 2,233,136
2,837,846 GE CORPORATE AIRCRAFT FINANCING LLC SERIES 2005-1A
CLASS A3+++/- 0.50 08/26/2019 2,492,480
231,911 GREENPOINT HOME EQUITY LOAN TRUST SERIES 2004-1
CLASS A+/-(i) 0.70 07/25/2029 131,494
126,693 GREENPOINT HOME EQUITY LOAN TRUST SERIES 2004-3
CLASS A+/-(i) 0.70 03/15/2035 69,360
1,983,048 GSAMP TRUST SERIES 2005-SEA2 CLASS A1+/- 0.59 01/25/2045 1,343,438
502,385 GSAMP TRUST SERIES 2006-SD2 CLASS A1+++/- 0.35 05/25/2036 458,911
2,000,000 HARLEY-DAVIDSON MOTORCYCLE TRUSTT SERIES 2009-3
CLASS A2 0.94 04/16/2012 2,000,295
1,741,284 HFC HOME EQUITY LOAN ASSET BACKED CERTIFICATES
SERIES 2005-2 CLASS A1+/- 0.52 01/20/2035 1,596,551
2,578,787 HOUSEHOLD HOME EQUITY LOAN TRUST SERIES 2006-1
CLASS A1+/- 0.40 01/20/2036 2,248,779
2,500,000 HYUNDAI AUTO RECEIVABLES TRUST SERIES 2007-A CLASS
A4 5.21 03/17/2014 2,649,832
2,000,000 KEYCORP STUDENT LOAN TRUST SERIES 2006-A CLASS 2A2+/- 0.36 06/27/2025 1,769,372
65,725 LEHMAN ASSET BACKED SECURITIES CORPORATION SERIES
2004-2 CLASS A+/-(i) 0.68 06/25/2034 38,902
1,178,242 MELLON RESIDENTIAL FUNDING CORPORATION SERIES
1999-TBC3 CLASS A2+/- 0.73 10/20/2029 1,112,309
708,401 MELLON RESIDENTIAL FUNDING CORPORATION SERIES
2001-TBC1 CLASS A1+/- 0.59 11/15/2031 656,390
656,493 MERRILL AUTO TRUST SECURITIZATION SERIES 2007-1
CLASS A3+/- 0.29 03/15/2011 656,155
276,852 MORGAN STANLEY DEAN WITTER & COMPANY CORPORATION
HELOC TRUST
SERIES 2003-2 CLASS A+/-(i) 0.50 04/25/2016 173,933
4,595,866 MORTGAGE EQUITY CONVERSION ASSET TRUST SERIES
2007-FF2 CLASS A+++/- 0.92 02/25/2042 4,315,059
3,750,000 NATIONAL COLLEGIATE STUDENT LOAN TRUST SERIES
2006-2 CLASS AIO(C) 6.00 08/25/2011 289,575
1,510,988 RENAISSANCE HOME EQUITY LOAN TRUST SERIES 2003-3
CLASS A+/- 0.74 12/25/2033 974,898
1,814,426 RESIDENTIAL ASSET SECURITIES CORPORATION SERIES
2002-KS8 CLASS A6(0)(0) 1.25 12/25/2032 1,358,253
2,931,584 RIVERVIEW HECM TRUST SERIES 2007-1 CLASS A+++/- 0.95 05/25/2047 2,648,100
502,733 SASC SERIES 2006-GEL3 CLASS A1+++/- 0.36 07/25/2036 430,177
1,568,784 SBI HELOC TRUST SERIES 2005-HE1 CLASS 1A+++/-(i) 0.43 11/25/2035 756,640
1,243,182 SLC STUDENT LOAN TRUST SERIES 2006-A CLASS A+/- 0.35 04/16/2018 1,223,070
2,500,000 SLM STUDENT LOAN TRUST SERIES 2006-C CLASS A2+/- 0.35 09/15/2020 2,401,654
55,305 TRIAD AUTO RECEIVABLES OWNER TRUST SERIES 2006-B
CLASS A3 5.41 08/12/2011 55,536
3,000,000 TURQUOISE CARD BACKED SECURITIES PLC SERIES 2007-1
CLASS A+/- 0.28 06/15/2010 2,977,932
3,000,000 US EDUCATION LOAN TRUST LLC SERIES 2007-1A CLASS
A2+++/- 0.71 09/01/2019 2,998,836
Wells Fargo Advantage Master Portfolios 97
Portfolio of Investments--November 30, 2009 (Unaudited)
STABLE INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
ASSET BACKED SECURITIES (CONTINUED)
$ 405,760 USXL FUNDING LLC SERIES 2006-1A CLASS A++(i) 5.38% 04/15/2014 $ 405,875
64,565 WACHOVIA ASSET SECURITIZATION INCORPORATED SERIES
2002-HE2 CLASS A+/-(i) 0.67 12/25/2032 41,619
516,199 WACHOVIA ASSET SECURITIZATION INCORPORATED SERIES
2003-HE2 CLASS AII1+/- 0.50 06/25/2033 314,513
647,114 WACHOVIA ASSET SECURITIZATION INCORPORATED SERIES
2004-HE1 CLASS A+/- 0.46 06/25/2034 326,380
2,500,000 WASHINGTON MUTUAL MASTER NOTE TRUST SERIES 2007-A2
CLASS A2+++/- 0.27 05/15/2014 2,492,542
3,000,000 WORLD OMNI AUTO RECEIVABLES TRUST SERIES 2007-B
CLASS A4 5.39 05/15/2013 3,169,267
TOTAL ASSET BACKED SECURITIES (COST $75,144,019) 64,116,427
--------------
COLLATERALIZED MORTGAGE OBLIGATIONS: 25.66%
2,037,503 ADJUSTABLE RATE MORTGAGE TRUST SERIES 2007-2 CLASS
2A1+/- 0.45 06/25/2037 1,009,719
2,378,024 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED
SERIES 2005-1 CLASS A3 4.88 11/10/2042 2,378,676
50,721 BANK OF AMERICA MORTGAGE SECURITIES SERIES 2002-G
CLASS 2A1+/- 4.42 07/20/2032 46,796
194,416 BANK OF AMERICA MORTGAGE SECURITIES SERIES 2003-A
CLASS 2A2+/- 5.42 02/25/2033 165,026
1,755,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES SERIES
2005-PWR9 CLASS A2 4.74 09/11/2042 1,755,700
984,739 COUNTRYWIDE ALTERNATIVE LOAN TRUST SERIES 2005-14
CLASS 2A1+/-(i) 0.45 05/25/2035 459,693
1,437,543 COUNTRYWIDE ALTERNATIVE LOAN TRUST SERIES 2005-24
CLASS 2A1B+/-(i) 1.94 07/20/2035 809,341
792,999 COUNTRYWIDE ALTERNATIVE LOAN TRUST SERIES 2005-27
CLASS 3A1+/- 1.99 08/25/2035 424,751
12,855 COUNTRYWIDE ALTERNATIVE LOAN TRUST SERIES 2007-0A3
CLASS 1A1+/- 0.38 04/25/2047 5,960
1,513,413 COUNTRYWIDE HOME LOANS SERIES 2004-25 CLASS 1A3+/- 0.60 02/25/2035 705,595
1,450,025 COUNTRYWIDE HOME LOANS SERIES 2004-29 CLASS 2A1+/- 0.57 02/25/2035 742,756
2,284,834 COUNTRYWIDE HOME LOANS SERIES 2004-R1 CLASS 1AF+++/- 0.64 11/25/2034 1,706,654
1,970,165 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES
CORPORATION SERIES 2001-CP4 CLASS A4 6.18 12/15/2035 2,039,454
242,518 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES
CORPORATION SERIES 2002-AR17 CLASS 2A1+/- 4.21 12/19/2039 227,831
72,275 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES
CORPORATION SERIES 2003-AR2 CLASS 2A1+/- 4.59 02/25/2033 68,397
862,030 EQUIFIRST MORTGAGE LOAN TRUST SERIES 2003-2 CLASS
3A3+/- 1.00 09/25/2033 683,608
110,244 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-31
CLASS A7+/- 0.49 05/25/2031 93,888
286,303 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-35
CLASS A+/- 0.52 09/25/2031 261,238
1,562,171 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-54
CLASS 3A 7.00 02/25/2043 1,734,010
1,806,475 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-54
CLASS 4A+/- 4.87 02/25/2043 1,783,628
2,702,792 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-55
CLASS 1A2 7.00 03/25/2043 3,000,100
2,173,267 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-57
CLASS 1A2 7.00 07/25/2043 2,412,327
2,589,070 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-58
CLASS 4A 7.50 09/25/2043 2,934,549
1,691,000 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-63
CLASS 1A1+/- 2.10 02/25/2045 1,592,600
174,145 FIFTH THIRD MORTGAGE LOAN TRUST SERIES 2002-FTB1
CLASS 4A1+/- 6.58 11/19/2032 156,762
528,271 FNMA GRANTOR TRUST SERIES 2002-T12 CLASS A3 7.50 05/25/2042 596,616
271,390 FNMA GRANTOR TRUST SERIES 2003-T4 CLASS 1A+/- 0.46 09/26/2033 205,279
649,769 FNMA SERIES 2002-90 CLASS A2 6.50 11/25/2042 709,389
1,370,488 FNMA SERIES 2003-W4 CLASS 3A 7.00 10/25/2042 1,511,819
1,407,637 FNMA SERIES 2004-W2 CLASS 2A2 7.00 02/25/2044 1,552,800
2,787,840 FNMA SERIES 2007-88 CLASS HC+/- 5.23 09/25/2037 2,930,593
36,903 FNMA WHOLE LOAN SERIES 2001-W1 CLASS AV1+/- 0.48 08/25/2031 25,455
629,468 FNMA WHOLE LOAN SERIES 2002-W10 CLASS A6 7.50 08/25/2042 701,464
81,722 FNMA WHOLE LOAN SERIES 2002-W12 CLASS AV1+/- 0.60 02/25/2033 65,453
1,211,593 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES
2005-C2 CLASS A2 4.71 05/10/2043 1,220,945
3,000,000 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES
2005-C3 CLASS A4+/- 5.05 07/10/2045 3,012,236
933,352 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED
SERIES 2005-C1 CLASS A2 4.47 05/10/2043 935,338
280,917 GMAC MORTGAGE CORPORATION LOAN TRUST SERIES 2001-HE3
CLASS A2+/-(i) 0.80 03/25/2027 200,432
2,054,418 GREENPOINT MORTGAGE FUNDING TRUST SERIES 2006-AR1
CLASS A1A+/- 0.53 02/25/2036 919,336
1,181,439 GREENWICH CAPITAL COMMERCIAL FUNDING CORPORATION
SERIES 2003-C2 CLASS A2 4.02 01/05/2036 1,190,299
5,514,201 GSMPS MORTGAGE LOAN TRUST SERIES 2004-4 CLASS 1AF+++/- 0.64 06/25/2034 4,358,309
98 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
STABLE INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED)
$ 3,594,789 GSMPS MORTGAGE LOAN TRUST SERIES 2005-RP2 CLASS
1AF+++/- 0.59% 03/25/2035 $ 2,901,175
3,407,713 GSMPS MORTGAGE LOAN TRUST SERIES 2005-RP3 CLASS
1AF+++/- 0.59 09/25/2035 2,187,408
1,227,369 GSMPS MORTGAGE LOAN TRUST SERIES 2006-1 CLASS A1+++/- 0.54 03/25/2035 872,548
1,387,993 HARBORVIEW MORTGAGE LOAN TRUST SERIES 2004-11 CLASS
3A2A+/-(i) 0.58 01/19/2035 820,158
507,957 INDYMAC LOAN TRUST SERIES 2005-L2 CLASS A1+/- 0.46 01/25/2011 218,668
2,041,701 LEHMAN XS TRUST SERIES 2007-5 CLASS P3+/- 6.31 05/25/2037 909,586
268,573 LEHMAN XS TRUST SERIES 2007-6W CLASS A3+/- 0.56 05/25/2037 83,634
489,961 MERRILL LYNCH MORTGAGE INVESTORS INCORPORATED SERIES
2003-A2 CLASS 2A2+/- 2.12 02/25/2033 375,494
879,593 MLCC MORTGAGE INVESTORS INCORPORATED SERIES 2003-A
CLASS 2A2+/- 1.21 03/25/2028 699,037
917,753 MLCC MORTGAGE INVESTORS INCORPORATED SERIES 2003-B
CLASS A1+/- 0.58 04/25/2028 726,748
686,747 MLCC MORTGAGE INVESTORS INCORPORATED SERIES 2004-A
CLASS A1+/- 0.47 04/25/2029 550,965
1,169,286 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES
2003-HYB1 CLASS A3+/- 2.71 03/25/2033 1,021,084
845,844 MORGAN STANLEY DEAN WITTER CREDIT CORPORATION HELOC
TRUST SERIES 2003-1 CLASS A+/-(i) 0.78 11/25/2015 532,564
356,832 OPTION ONE MORTGAGE LOAN TRUST SERIES 2003-1 CLASS A2+/- 1.08 02/25/2033 245,856
187,167 RESIDENTIAL FUNDING MORTGAGE SECURITIES INCORPORATED
SERIES 2002-HS3 CLASS 2A+/- 0.58 08/25/2032 85,574
235,082 RESIDENTIAL FUNDING MORTGAGE SECURITIES INCORPORATED
SERIES 2003-HS1 CLASS AII+/- 0.53 12/25/2032 133,971
516,175 RESIDENTIAL FUNDING MORTGAGE SECURITIES INCORPORATED
SERIES 2004-HS3 CLASS A+/- 0.50 09/25/2029 150,823
1,429,205 SEQUOIA MORTGAGE TRUST SERIES 10 CLASS 1A+/- 0.64 10/20/2027 1,224,432
427,046 SEQUOIA MORTGAGE TRUST SERIES 2003-2 CLASS A1+/- 0.90 06/20/2033 344,205
1,217,263 SEQUOIA MORTGAGE TRUST SERIES 2003-8 CLASS A1+/- 0.56 01/20/2034 919,158
554,838 SEQUOIA MORTGAGE TRUST SERIES 5 CLASS A+/- 0.59 10/19/2026 415,146
2,722,494 SMALL BUSINESS ADMINISTRATION PARTICIPATION
CERTIFICATES SERIES 1999-20B CLASS 1 5.95 02/01/2019 2,938,355
31,982 SMALL BUSINESS ADMINISTRATION PARTICIPATION
CERTIFICATES SERIES 2000-10C CLASS 1 7.88 05/01/2010 32,640
543,732 STRUCTURED ASSET SECURITIES CORPORATION SERIES
2003-9A CLASS 2A1+/- 3.35 03/25/2033 499,124
997,647 STRUCTURED ASSET SECURITIES CORPORATION SERIES
2004-NP2 CLASS A+++/- 0.59 06/25/2034 541,184
745,176 STRUCTURED ASSET SECURITIES CORPORATION SERIES
2005-GEL4 CLASS A+/- 0.59 08/25/2035 642,026
3,158,775 STRUCTURED ASSET SECURITIES CORPORATION SERIES
2006-RF3 CLASS 1A1++ 6.00 10/25/2036 2,499,466
763,415 STRUCTURED ASSET SECURITIES CORPORATION SERIES
2006-RM1 CLASS A1+++/- 0.49 08/25/2046 580,577
2,042,050 STRUCTURED ASSET SECURITIES CORPORATION SERIES
2007-RM1 CLASS A1+++/- 0.52 05/25/2047 1,315,488
2,500,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES
2005-C20 CLASS A4+/- 5.29 07/15/2042 2,520,500
549,711 WASHINGTON MUTUAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2003-AR1 CLASS A6+/- 3.77 03/25/2033 477,763
1,918,381 WASHINGTON MUTUAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2005-AR1 CLASS A1A+/-(i) 0.68 01/25/2045 1,303,076
755,632 WASHINGTON MUTUAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2005-AR6 CLASS 2A1A+/-(i) 0.47 04/25/2045 515,475
2,131,111 WASHINGTON MUTUAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2005-C3 CLASS A4+/- 2.72 07/25/2047 747,006
1,618,591 WASHINGTON MUTUAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2006-AR3 CLASS A1A+/-(i) 1.76 02/25/2046 889,585
1,773,321 WASHINGTON MUTUAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2006-AR4 CLASS DA+/- 1.60 06/25/2046 674,159
2,904,293 WASHINGTON MUTUAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2006-AR5 CLASS 5A+/- 1.62 07/25/2046 1,173,081
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (COST $101,524,400) 80,102,561
--------------
CORPORATE BONDS & NOTES: 13.08%
DEPOSITORY INSTITUTIONS: 5.11%
4,750,000 AMERICAN EXPRESS BANK FSB+/- 1.09 12/10/2010 4,795,006
1,250,000 BB&T CORPORATION 3.85 07/27/2012 1,303,641
1,250,000 DEXIA CREDIT LOCAL++ 2.38 09/23/2011 1,285,158
Wells Fargo Advantage Master Portfolios 99
Portfolio of Investments--November 30, 2009 (Unaudited)
STABLE INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
DEPOSITORY INSTITUTIONS (CONTINUED)
$ 3,000,000 GMAC LLC<< 2.20% 12/19/2012 $ 3,069,201
1,750,000 REGIONS BANK RF+/- 0.95 12/10/2010 1,762,486
1,500,000 SOVEREIGN BANK+/- 1.99 08/01/2013 1,456,325
2,250,000 SUNTRUST BANK ATLANTA GA STI+/- 0.95 12/16/2010 2,266,796
15,938,613
--------------
ELECTRIC, GAS & SANITARY SERVICES: 0.57%
1,700,000 DUKE ENERGY FIELD SERVICES LLC 7.88 08/16/2010 1,776,237
--------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT
COMPUTER EQUIPMENT: 0.73%
2,250,000 BAE SYSTEMS HOLDINGS INCORPORATED++ 4.75 08/15/2010 2,286,997
--------------
FOOD & KINDRED PRODUCTS: 1.11%
3,450,000 GENERAL MILLS INCORPORATED+/- 0.41 01/22/2010 3,450,128
--------------
GENERAL MERCHANDISE STORES: 0.64%
2,000,000 CVS CAREMARK CORPORATION+/- 0.66 06/01/2010 2,000,790
--------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 0.17%
500,000 HEWLETT-PACKARD CORPORATION 2.95 08/15/2012 517,417
--------------
INSURANCE CARRIERS: 0.62%
2,000,000 METROPOLITAN LIFE GLOBAL FUNDING I+++/- 0.55 03/15/2012 1,948,594
--------------
NON-DEPOSITORY CREDIT INSTITUTIONS: 2.57%
2,150,000 AMERICAN EXPRESS CREDIT CORPORATION SERIES MTN+/- 1.63 05/27/2010 2,156,233
2,750,000 GENERAL ELECTRIC CAPITAL CORPORATION+/- 0.61 06/08/2012 2,770,053
3,000,000 GENERAL ELECTRIC CAPITAL CORPORATION<< 2.63 12/28/2012 3,109,725
8,036,011
--------------
PHARMACEUTICALS: 0.34%
1,000,000 PFIZER INCORPORATED 4.45 03/15/2012 1,065,567
--------------
REAL ESTATE INVESTMENT TRUSTS (REITS): 0.81%
2,500,000 PROLOGIS TRUST 5.25 11/15/2010 2,515,565
--------------
TELECOMMUNICATIONS: 0.41%
1,250,000 CELLCO PARTNERSHIP / VERIZON WIRELSS CAPITAL LLC 3.75 05/20/2011 1,294,871
--------------
TOTAL CORPORATE BONDS & NOTES (COST $40,386,143) 40,830,790
--------------
FOREIGN GOVERNMENT BONDS: 1.07%
2,000,000 COMMONWEALTH BANK OF AUSTRALIA++ 2.50 12/10/2012 2,063,112
1,250,000 SOCIETE FINANCEMENT DE L'ECONOMIE FRANCAISE++ 2.25 06/11/2012 1,277,898
TOTAL FOREIGN GOVERNMENT BONDS (COST $3,240,532) 3,341,010
--------------
LOAN PARTICIPATION: 0.58%
611,056 UNITED STATES DEPARTMENT OF AGRICULTURE LOAN+/- 1.38 10/15/2020 608,856
677,518 UNITED STATES DEPARTMENT OF AGRICULTURE LOAN - PVT+/- 0.98 06/25/2016 657,531
574,000 UNITED STATES DEPARTMENT OF AGRICULTURE LOAN - PVT 5.37 09/08/2019 560,051
TOTAL LOAN PARTICIPATION (COST $1,863,779) 1,826,438
--------------
MUNICIPAL BONDS & NOTES: 4.28%
3,500,000 COLORADO STUDENT OBLIGATION BOND AUTHORITY STUDENT
LOAN REVENUE SERIES VIII-A2 (STUDENT LOAN
REVENUE)+/-(i) 0.21 12/01/2032 3,500,000
1,250,000 MILWAUKEE AREA TECHNICAL COLLEGE DISTRICT (PROPERTY
TAX REVENUE) 1.85 12/01/2009 1,250,000
1,605,000 MISSISSIPPI DEVELOPMENT BANK SPECIAL OBLIGATION
(OTHER REVENUE, AMBAC INSURED) 5.24 07/01/2011 1,637,870
135,000 OHIO STATE HFA MORTGAGE BACKED SERIES G (HOUSING
REVENUE, GNMA INSURED) 5.57 09/01/2016 135,626
100 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
STABLE INCOME PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------- ------------- ------------- --------------
MUNICIPAL BONDS & NOTES (continued)
$ 3,000,000 OREGON SCHOOL BOARD ASSOCIATION TAXABLE PENSION
DEFERRED INTEREST SERIES A
(PROPERTY TAX REVENUE, FGIC INSURED)## 1.84% 06/30/2010 $ 2,968,050
550,000 PENNSYLVANIA HFA SERIES 94-C (HOUSING REVENUE, GO OF
AGENCY) 6.04 10/01/2030 550,402
3,340,000 SOUTH CAROLINA HOUSING FINANCE & DEVELOPMENT
AUTHORITY MORTGAGE REVENUE
TAXABLE SERIES C-3 (HOUSING REVENUE, AGM FHA/VA
GUARANTEED) 5.50 07/01/2026 3,322,298
TOTAL MUNICIPAL BONDS & NOTES (COST $13,286,348) 13,364,246
--------------
SHARES YIELD
- ------------- -------------
COLLATERAL FOR SECURITIES LENDING: 0.90%
COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.13%
98,426 AIM STIT-LIQUID ASSETS PORTFOLIO(s) 0.21 98,426
98,426 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(s) 0.16 98,426
98,426 DREYFUS CASH MANAGEMENT FUND INSTITUTIONAL(s) 0.11 98,426
98,426 DWS MONEY MARKET SERIES INSTITUTIONAL(s) 0.20 98,426
393,704
--------------
PRINCIPAL INTEREST RATE
- ------------- -------------
COLLATERAL INVESTED IN OTHER ASSETS: 0.77%
$ 19,138 ALLIED IRISH BANKS NORTH AMERICA INCORPORATED 0.26 12/07/2009 19,142
6,835 AMSTEL FUNDING CORPORATION++(p) 1.25 12/18/2009 6,831
6,835 ANTALIS US FUNDING CORPORATION++(p) 0.18 12/03/2009 6,835
20,505 ANTALIS US FUNDING CORPORATION++(p) 0.20 12/04/2009 20,505
16,404 ARABELLA FINANCE LLC++(p) 0.35 12/01/2009 16,404
23,240 ARABELLA FINANCE LLC++(p) 0.40 12/03/2009 23,239
684 ARABELLA FINANCE LLC++(p) 0.40 12/04/2009 683
13,670 ASPEN FUNDING CORPORATION++(p) 0.18 12/21/2009 13,669
41,011 BANK OF AMERICA 0.18 12/23/2009 41,006
118,863 BANK OF AMERICA REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE
BACKED SECURITIES (MATURITY VALUE $118,864) 0.16 12/01/2009 118,863
20,505 BANK OF IRELAND 0.35 12/01/2009 20,505
16,404 BANK OF IRELAND 0.50 12/02/2009 16,404
6,621 BARTON CAPITAL CORPORATION++(p) 0.18 12/01/2009 6,621
3,418 BELMONT FUNDING LLC++(p) 0.50 12/01/2009 3,418
17,771 BNP PARIBAS (NEW YORK) 0.21 12/08/2009 17,771
15,037 BNP PARIBAS (NEW YORK) 0.21 12/14/2009 15,037
41,011 BRYANT BANK FUNDING++ 0.18 12/23/2009 41,006
34,176 CAFCO LLC++ 0.17 12/09/2009 34,174
1,504 CALCASIEU PARISH LA+/-ss 0.40 12/01/2027 1,504
32,809 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY+/-ss 0.23 11/01/2026 32,809
4,374 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT
AUTHORITY+/-ss 0.35 06/01/2028 4,374
34,176 CHARTA LLC++(p) 0.17 12/09/2009 34,174
3,626 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.30 10/01/2038 3,626
6,835 COOK COUNTY IL+/-ss 0.40 11/01/2030 6,835
41,484 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT -
102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $41,484) 0.17 12/01/2009 41,484
23,240 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.40 12/15/2037 23,240
16,404 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/02/2009 16,404
16,404 DEXIA CREDIT LOCAL DE FRANCE SA 0.27 12/04/2009 16,404
19,822 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/07/2009 19,822
34,176 E.ON AG++ 0.17 12/21/2009 34,173
34,176 ENI FINANCE USA INCORPORATED++ 0.17 12/18/2009 34,173
35,543 FORTIS FUNDING LLC++ 0.20 12/29/2009 35,537
36,910 GDF SUEZ++ 0.17 12/15/2009 36,907
27,341 GEMINI SECURITIZATION INCORPORATED++(p) 0.18 12/10/2009 27,339
Wells Fargo Advantage Master Portfolios 101
Portfolio of Investments--November 30, 2009 (Unaudited)
STABLE INCOME PORTFOLIO
INTEREST
PRINCIPALS SECURITY NAME RATE MATURITY DATE VALUE
- ------------- ------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 34,148 GOLDMAN SACHS REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE
BACKED SECURITIES (MATURITY VALUE $34,148) 0.17% 12/01/2009 $ 34,148
34,176 GOTHAM FUNDING CORPORATION++ 0.18 12/15/2009 34,173
6,835 GRAMPIAN FUNDING++(p) 0.25 12/03/2009 6,835
28,708 GRAMPIAN FUNDING++(p) 0.28 12/15/2009 28,704
360,515 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 134,075
22,474 HAMILTON COUNTY OHIO HOSPITALS+/-ss 0.20 05/15/2037 22,474
2,256 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.30 11/01/2042 2,256
11,073 HOUSTON TX UTILITY SYSTEM+/-ss 0.27 05/15/2034 11,073
3,910 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.30 07/01/2029 3,910
2,734 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.29 01/01/2018 2,734
27,341 ING USA FUNDING LLC 0.19 12/07/2009 27,340
6,835 ING USA FUNDING LLC 0.18 12/09/2009 6,835
104,952 JPMORGAN CHASE REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE
BACKED SECURITIES (MATURITY VALUE $104,952) 0.17 12/01/2009 104,952
13,670 JUPITER SECURITIZATION CORPORATION++(p) 0.18 12/02/2009 13,670
6,835 JUPITER SECURITIZATION CORPORATION++ 0.18 12/03/2009 6,835
4,101 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.29 04/15/2025 4,101
41,011 KBC BANK NV BRUSSELS 0.18 12/01/2009 41,011
8,202 LLOYDS TSB BANK PLC 0.18 12/17/2009 8,202
27,341 LLOYDS TSB BANK PLC (NEW YORK) 0.20 12/07/2009 27,341
10,936 LMA AMERICAS LLC++(p) 0.18 12/11/2009 10,936
6,152 LMA AMERICAS LLC++(p) 0.18 12/17/2009 6,151
20,505 LMA AMERICAS LLC++(p) 0.19 12/21/2009 20,503
6,152 LOUISIANA PUBLIC FACILITIES AUTHORITY+/-ss 0.19 10/01/2033 6,152
33,902 MASSACHUSETTS HEFA+/-ss 0.25 10/01/2034 33,902
3,753 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.24 02/01/2036 3,753
28,708 NATIXIS 0.27 12/07/2009 28,708
2,734 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.31 01/01/2018 2,734
30,075 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.22 07/01/2034 30,075
27,341 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.24 12/01/2040 27,341
34,176 NEWPORT FUNDING CORPORATION++(p) 0.18 12/15/2009 34,173
6,692 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.30 01/01/2034 6,692
13,828 RBS SECURITIES INCORPORATED REPURCHASE AGREEMENT -
102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $13,828) 0.18 12/01/2009 13,828
4,785 REGENCY MARKETS #1 LLC++(p) 0.18 12/04/2009 4,785
22,720 REGENCY MARKETS #1 LLC++(p) 0.20 12/09/2009 22,719
6,835 ROMULUS FUNDING CORPORATION++ 0.30 12/15/2009 6,834
24,607 ROYAL BANK OF SCOTLAND PLC 0.20 12/02/2009 24,606
19,138 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.20 12/01/2028 19,138
27,341 SOCIETE GENERALE NORTH AMERICA 0.19 12/18/2009 27,338
1,709 STARBIRD FUNDING CORPORATION++(p) 0.15 12/01/2009 1,709
27,341 STARBIRD FUNDING CORPORATION++(p) 0.20 12/03/2009 27,340
34,176 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 0.18 12/18/2009 34,173
8,202 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 12/17/2009 8,202
27,748 TULIP FUNDING CORPORATION++(p) 0.19 12/07/2009 27,747
9,022 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.24 07/01/2032 9,022
27,341 UBS AG (STAMFORD CT) 0.31 12/04/2009 27,341
41,011 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 41,011
4,101 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.29 12/15/2040 4,101
1,109,523 VFNC CORPORATION+++/-(a)(i) 0.24 09/30/2010 554,761
1,709 VICTORY RECEIVABLES CORPORATION++(p) 0.15 12/01/2009 1,709
6,835 VICTORY RECEIVABLES CORPORATION++(p) 0.19 12/08/2009 6,835
22,650 VICTORY RECEIVABLES CORPORATION++ 0.18 12/16/2009 22,649
2,408,555
--------------
102 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
STABLE INCOME PORTFOLIO
SHARES SECURITY NAME YIELD VALUE
- ------------- ------------- ------------- --------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $2,753,333) $ 2,802,259
--------------
SHORT-TERM INVESTMENTS: 5.71%
MUTUAL FUNDS: 5.71%
17,814,871 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++(u) 0.13% 17,817,870
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $17,817,870) 17,817,870
--------------
TOTAL INVESTMENTS IN SECURITIES
(COST $330,922,866)* 96.51% 301,265,894
OTHER ASSETS AND LIABILITIES, NET 3.49 10,890,245
------ --------------
TOTAL NET ASSETS 100.00% $ 312,156,139
------ --------------
- ----------
+/- Variable rate investments.
<< 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.
(c) Interest-only securities entitle holders to receive only the interest
payments on the underlying mortgages. The principal amount shown is the
notional amount of the underlying mortgages. Interest rate disclosed
represents the coupon rate.
ss These securities are subject to a demand feature which reduces the
effective maturity.
(s) Rate shown is the 1-day annualized yield at period end.
(a) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
(i) Illiquid security.
(0)(0) Stepped coupon bond. Interest rate presented is yield to maturity.
(p) Asset-backed commercial paper.
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The Wells
Fargo Advantage Money Market Fund does not pay an investment advisory fee.
+++ Short-term security of an affiliate of the Fund with a cost of $17,814,871.
(u) Rate shown is the 7-day annualized yield at period end.
* Cost for federal income tax purposes is $331,276,562 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 4,891,878
Gross unrealized depreciation (34,902,546)
------------
Net unrealized depreciation $(30,010,668)
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Master Portfolios 103
Portfolio of Investments--November 30, 2009 (Unaudited)
TOTAL RETURN BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
AGENCY SECURITIES: 35.02%
FEDERAL HOME LOAN MORTGAGE CORPORATION: 9.32%
$ 12,905 FHLMC #1B7562+/- 5.98% 11/01/2037 $ 13,716
1,919,783 FHLMC #1G0784+/- 5.69 03/01/2036 2,035,036
1,988,558 FHLMC #1G1472+/- 5.72 02/01/2037 2,112,950
10,022,722 FHLMC #1G1522+/- 6.00 01/01/2037 10,697,258
670,584 FHLMC #1G1614+/- 5.91 03/01/2037 715,136
3,743,186 FHLMC #1G1708+/- 6.13 04/01/2037 4,007,408
1,605,068 FHLMC #1G1873+/- 5.70 03/01/2036 1,702,744
1,679,587 FHLMC #1G1961+/- 5.98 05/01/2037 1,792,197
1,743,626 FHLMC #1G1968+/- 5.95 06/01/2037 1,859,047
17,043 FHLMC #1G2254+/- 6.37 10/01/2037 18,171
1,478,326 FHLMC #1J1920+/- 5.65 10/01/2038 1,565,101
31,910 FHLMC #1Q0292+/- 5.92 07/01/2037 34,010
5,259,250 FHLMC #1Q0794+/- 5.81 11/01/2038 5,602,382
12,041,324 FHLMC #1Q0809+/- 5.96 03/01/2038 12,827,614
7,991,264 FHLMC #1Q0869+/- 5.62 07/01/2038 8,483,403
805,202 FHLMC #847703+/- 5.97 01/01/2037 856,942
7,393,717 FHLMC #848156+/- 5.86 09/01/2038 7,911,277
1,107,860 FHLMC #A78331 6.00 03/01/2034 1,200,794
2,923,483 FHLMC #A79090 6.50 07/01/2034 3,190,594
1,392,109 FHLMC #B15688 5.50 07/01/2019 1,503,492
1,233,406 FHLMC #E01279 5.50 01/01/2018 1,332,955
3,510,273 FHLMC #E01497 5.50 11/01/2018 3,797,225
2,085,763 FHLMC #E01539 5.50 12/01/2018 2,256,265
1,139,603 FHLMC #E01655 5.50 06/01/2019 1,230,955
4,554,121 FHLMC #G01737 5.00 12/01/2034 4,790,810
38,612,794 FHLMC #G01931 5.50 10/01/2035 41,241,783
5,364,230 FHLMC #G02199 5.00 06/01/2036 5,636,318
40,933,034 FHLMC #G04216 5.50 12/01/2037 43,719,998
9,169,859 FHLMC #G04794 5.50 01/01/2036 9,794,198
889,912 FHLMC #G11295 5.50 09/01/2017 962,227
1,446,920 FHLMC #G11594 5.50 08/01/2019 1,562,915
41,191 FHLMC #G11653 5.50 12/01/2019 44,493
18,012,860 FHLMC #G11713 5.50 06/01/2020 19,456,891
1,436,467 FHLMC #G11767 5.50 08/01/2020 1,551,623
2,384,092 FHLMC #G11944 5.50 07/01/2020 2,574,844
2,714,454 FHLMC #G12827 5.50 02/01/2021 2,935,032
2,079,950 FHLMC #G12888 5.50 07/01/2018 2,248,968
985,758 FHLMC #G13169 5.50 06/01/2020 1,066,015
2,341,214 FHLMC #G13330 6.00 10/01/2019 2,539,144
10,779,998 FHLMC #G13367 5.50 12/01/2018 11,655,986
1,379,045 FHLMC #G18003 5.50 07/01/2019 1,489,383
1,041,701 FHLMC #J02372 5.50 05/01/2020 1,125,211
973,586 FHLMC #J02373 5.50 05/01/2020 1,051,635
1,384,222 FHLMC #J02376 6.00 05/01/2020 1,497,353
7,846,264 FHLMC #P10040 5.50 04/01/2018 8,346,536
242,038,035
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION: 25.39%
6,303,000 FNMA 4.00 01/25/2019 6,391,297
9,098,000 FNMA 4.29 07/25/2019 9,537,143
10,064,000 FNMA 5.00 03/25/2034 10,712,097
102,900,000 FNMA%% 4.50 TBA 105,617,177
104 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
TOTAL RETURN BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (continued)
$ 3,200,000 FNMA%% 5.00% TBA $ 3,356,000
22,400,000 FNMA%% 6.00 TBA 23,954,000
5,500,000 FNMA%% 6.50 TBA 5,925,392
1,828,978 FNMA #190129 6.00 11/01/2023 1,970,140
2,566,007 FNMA #190338 5.50 07/01/2033 2,741,117
99,201 FNMA #190375 5.50 11/01/2036 105,722
969,918 FNMA #254868 5.00 09/01/2033 1,020,782
6,299,839 FNMA #310017 7.00 06/01/2035 6,975,841
885,748 FNMA #357302 5.50 11/01/2017 958,970
2,008,456 FNMA #462361+/- 6.33 07/01/2037 2,138,505
3,702,352 FNMA #462404+/- 6.28 09/01/2037 3,942,895
1,409,002 FNMA #685185 5.50 02/01/2018 1,524,599
931,793 FNMA #725068 5.50 01/01/2019 1,008,821
7,484,001 FNMA #725423 5.50 05/01/2034 7,994,726
5,291,301 FNMA #725424 5.50 04/01/2034 5,652,391
8,654,822 FNMA #725598 5.50 07/01/2034 9,241,389
31,375 FNMA #725690 6.00 08/01/2034 33,875
4,412,775 FNMA #725773 5.50 09/01/2034 4,711,844
3,875,131 FNMA #725866 4.50 09/01/2034 4,005,083
10,787,162 FNMA #735036 5.50 12/01/2034 11,518,245
4,746,966 FNMA #735073 6.00 10/01/2019 5,146,799
2,257,397 FNMA #735421 7.00 01/01/2035 2,516,926
13,947,369 FNMA #735503 6.00 04/01/2035 15,080,321
859,933 FNMA #735504 6.00 04/01/2035 931,399
2,100,044 FNMA #735667 5.00 07/01/2035 2,210,174
21,334,313 FNMA #735676 5.00 07/01/2035 22,453,114
4,437,650 FNMA #745238 6.00 12/01/2020 4,818,364
284,179 FNMA #745418 5.50 04/01/2036 303,261
344,725 FNMA #745500 5.50 12/01/2018 373,222
2,025,156 FNMA #745751 5.50 09/01/2035 2,163,357
7,665,737 FNMA #878099 6.00 04/01/2036 8,242,913
2,418,569 FNMA #888560 6.00 11/01/2035 2,615,030
2,356,361 FNMA #888635 5.50 09/01/2036 2,517,164
1,421,490 FNMA #888911+/- 6.11 11/01/2037 1,519,827
3,405,976 FNMA #888941+/- 6.02 10/01/2037 3,634,359
8,197,964 FNMA #889069 5.50 01/01/2021 8,875,662
3,724,049 FNMA #889183 5.50 09/01/2021 4,031,904
5,764,181 FNMA #889213 5.50 10/01/2020 6,237,084
12,077,199 FNMA #889318 5.50 07/01/2020 13,075,581
5,685,507 FNMA #889568 5.50 03/01/2020 6,155,509
1,046,488 FNMA #889688 5.50 12/01/2019 1,132,998
12,781,990 FNMA #890141 5.50 12/01/2020 13,838,635
1,350,120 FNMA #893916+/- 6.27 10/01/2036 1,440,268
1,204,247 FNMA #905629+/- 6.11 12/01/2036 1,288,003
1,398,173 FNMA #906403+/- 6.01 01/01/2037 1,491,679
1,797,599 FNMA #906404+/- 5.92 01/01/2037 1,917,150
1,291,476 FNMA #909569+/- 5.88 02/01/2037 1,376,420
1,370,063 FNMA #910293+/- 5.93 03/01/2037 1,459,915
1,477,818 FNMA #914819+/- 5.98 04/01/2037 1,575,186
1,133,031 FNMA #917820+/- 5.67 05/01/2037 1,203,181
3,027,621 FNMA #917828+/- 5.75 05/01/2037 3,218,877
1,219,370 FNMA #917893+/- 5.59 05/01/2037 1,292,857
7,087,576 FNMA #931675 5.50 01/01/2018 7,673,482
9,074,631 FNMA #931676 5.50 01/01/2019 9,819,129
2,458,869 FNMA #942510 6.00 08/01/2037 2,640,546
Wells Fargo Advantage Master Portfolios 105
Portfolio of Investments--November 30, 2009 (Unaudited)
TOTAL RETURN BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (continued)
$ 73,148 FNMA #945657+/- 6.22% 09/01/2037 $ 77,837
2,716,248 FNMA #946228+/- 6.12 09/01/2037 2,900,547
8,130,426 FNMA #949739 6.00 10/01/2037 8,731,157
2,790,574 FNMA #973123+/- 5.60 02/01/2038 2,966,981
32,976,938 FNMA #983499 5.50 07/01/2035 35,227,356
41,403,137 FNMA #995023 5.50 08/01/2037 44,183,293
5,274,265 FNMA #995092 6.50 12/01/2037 5,680,342
32,734,949 FNMA #995182 5.50 06/01/2020 35,420,578
24,412,393 FNMA #995203 5.00 07/01/2035 25,692,613
23,807,387 FNMA #995226 6.00 11/01/2038 25,566,436
34,174,469 FNMA #995233 5.50 10/01/2021 36,914,123
459,028 FNMA #995284 5.50 03/01/2020 496,975
7,688,360 FNMA #995485 6.00 04/01/2035 8,327,305
4,315,879 FNMA #995486 6.00 03/01/2036 4,674,552
3,490,328 FNMA #995508 6.00 12/01/2035 3,773,849
2,070,596 FNMA #995511 5.50 12/01/2018 2,241,766
5,141,734 FNMA #995664 4.50 11/01/2033 5,310,949
5,895,886 FNMA #995763 4.50 11/01/2035 6,093,605
205,990 FNMA #AD0086+/- 5.68 02/01/2039 218,934
5,150,493 FNMA #AD0211 5.50 05/01/2019 5,576,268
3,929,620 FNMA #AD0212 5.50 04/01/2021 4,252,013
659,635,826
--------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION: 0.31%
7,570,674 GNMA #782044 6.50 12/15/2032 8,212,149
--------------
TOTAL AGENCY SECURITIES (COST $883,982,624) 909,886,010
--------------
ASSET BACKED SECURITIES: 7.11%
3,792,000 BANK OF AMERICA AUTO MASTER TRUST++ 2.67 12/15/2016 3,840,739
2,451,000 BANK OF AMERICA AUTO TRUST SERIES 2009-2A CLASS A4++ 3.03 10/15/2016 2,508,596
6,537,000 BANK OF AMERICA CREDIT CARD TRUST+/- 0.28 11/15/2019 5,875,891
32,091,000 BANK OF AMERICA CREDIT CARD TRUST SERIES 2006-11 CLASS A+/- 0.27 04/15/2016 30,448,772
11,905,000 BANK OF AMERICA CREDIT CARD TRUST SERIES 2006-A12
CLASS A12+/- 0.26 03/15/2014 11,665,870
17,276,000 BANK OF AMERICA CREDIT CARD TRUST SERIES 2006-A9 CLASS A9+/- 0.25 02/15/2013 17,152,506
10,141,000 CAPITAL ONE MULTI-ASSET EXECUTION TRUST SERIES 2008-A3
CLASS A3 5.05 02/15/2016 10,799,412
1,169,000 CHASE ISSUANCE TRUST SERIES 2005-A6 CLASS A6+/- 0.31 07/15/2014 1,150,469
876,444 CITIGROUP MORTGAGE LOAN TRUST INCORPORATED SERIES 2007-AHL1
CLASS A2A+/- 0.28 12/25/2036 739,107
797,436 DAIMLER CHRYSLER AUTO TRUST SERIES 2008-B CLASS A2B+/- 1.17 07/08/2011 798,441
3,083,000 DISCOVER CARD EXECUTION NOTE TRUST+/- 1.54 12/15/2014 3,090,800
5,252,000 DISCOVER CARD MASTER TRUST I SERIES 2005-4 CLASS A2+/- 0.33 06/16/2015 5,099,947
412,000 DISCOVER CARD MASTER TRUST SERIES 2006-2 CLASS A3+/- 0.32 01/19/2016 396,395
4,351,000 DISCOVER CARD MASTER TRUST SERIES 2006-3 CLASS A1+/- 0.27 03/15/2014 4,280,710
3,607,000 DOMINOS PIZZA MASTER ISSUER LLC SERIES 2007-1 CLASS A2++ 5.26 04/25/2037 3,094,737
3,640,000 HARLEY DAVIDSON MOTORCYCLE TRUST SERIES 2008-1 CLASS A3A 4.25 02/15/2013 3,725,951
4,143,000 HARLEY DAVIDSON MOTORCYCLE TRUST SERIES 2009-1 CLASS A4 4.55 01/15/2017 4,367,827
1,611,000 HARLEY DAVIDSON MOTORCYCLE TRUST SERIES 2009-2 CLASS A4 3.32 02/15/2017 1,654,898
1,905,000 HARLEY-DAVIDSON MOTORCYCLE TRUST 2.14 07/15/2014 1,904,634
2,084,000 HARLEY-DAVIDSON MOTORCYCLE TRUST 2.54 04/15/2017 2,105,023
1,629,000 HYUNDAI AUTO RECEIVABLES TRUST SERIES 2009-A CLASS A4 3.15 03/15/2016 1,677,429
7,946,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2002-CIB4 CLASS A3 6.16 05/12/2034 8,393,887
9,361,000 MBNA CREDIT CARD MASTER TRUST SERIES 1997-B CLASS A+/- 0.40 08/15/2014 9,115,946
419,995 MORGAN STANLEY ABS CAPITAL I SERIES 2007-HE2 CLASS A2A+/- 0.28 01/25/2037 394,976
379,750 MORGAN STANLEY HOME EQUITY LOANS SERIES 2007-1 CLASS A1+/- 0.29 12/25/2036 367,985
726,958 MORGAN STANLEY MORTGAGE LOAN TRUST SERIES 2007-6XS
CLASS 2A1S+/- 0.35 02/25/2047 551,778
106 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
TOTAL RETURN BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
ASSET BACKED SECURITIES (continued)
$ 2,170,000 NISSAN AUTO RECEIVABLES OWNER TRUST SERIES 2009-A CLASS A4 4.74% 08/17/2015 $ 2,336,967
3,527,000 NORDSTROM CREDIT CARD MASTER TRUST SERIES 2007-2 CLASS A+++/- 0.30 05/15/2015 3,312,896
1,097,941 SLM STUDENT LOAN TRUST SERIES 2002-5 CLASS A4L+/- 0.45 09/17/2018 1,088,815
958,144 SLM STUDENT LOAN TRUST SERIES 2003-3 CLASS A4+/- 0.52 12/15/2017 951,688
672,863 SLM STUDENT LOAN TRUST SERIES 2003-6 CLASS A4+/- 0.50 12/17/2018 669,061
14,147,000 SLM STUDENT LOAN TRUST SERIES 2008-1 CLASS A4A+/- 1.90 12/15/2032 14,820,085
3,207,000 SLM STUDENT LOAN TRUST SERIES 2008-4 CLASS A4+/- 1.93 07/25/2022 3,340,771
2,861,000 SLM STUDENT LOAN TRUST SERIES 2008-5 CLASS A4+/- 1.98 07/25/2023 3,011,776
5,956,000 SLM STUDENT LOAN TRUST SERIES 2008-6 CLASS A4+/- 1.38 07/25/2023 6,076,430
1,340,000 SWIFT MASTER AUTO RECEIVABLES TRUST SERIES 2007-1 CLASS A+/- 0.34 06/15/2012 1,322,915
9,290,000 TARGET CREDIT CARD MASTER TRUST SERIES 2005-1 CLASS A+/- 0.30 10/27/2014 9,127,950
641,457 TRIAD AUTO RECEIVABLES OWNER TRUST SERIES 2006-B CLASS A3 5.41 08/12/2011 644,139
305,652 TRIAD AUTO RECEIVABLES OWNER TRUST SERIES 2006-C CLASS A3 5.26 11/14/2011 306,940
2,248,000 WORLD OMNI AUTO RECEIVABLES TRUST SERIES 2009-A CLASS A4 5.12 05/15/2014 2,424,460
TOTAL ASSET BACKED SECURITIES (COST $182,989,639) 184,637,619
--------------
COLLATERALIZED MORTGAGE OBLIGATIONS: 22.94%
3,739,000 AMERICAN TOWER TRUST SERIES 2007-1A CLASS AFX++ 5.42 04/15/2037 3,776,390
3,083,000 ASSET SECURITIZATION CORPORATION SERIES 1996-D3 CLASS A2+/- 7.77 10/13/2026 3,277,386
1,172,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES
2002-PB2 CLASS B 6.31 06/11/2035 1,201,718
393,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES
2004-2 CLASS A5 4.58 11/10/2038 392,675
3,636,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES
2007-2 CLASS A2+/- 5.63 04/10/2049 3,607,749
2,828,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATION
SERIES 2006-6 CLASS A2 5.31 10/10/2045 2,861,740
1,040,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED
SERIES 2001-TOP4 CLASS A3 5.61 11/15/2033 1,082,289
2,657,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED
SERIES 2002-PBW1 CLASS A2+/- 4.72 11/11/2035 2,738,355
3,912,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED
SERIES 2002-T0P8 CLASS A2 4.83 08/15/2038 4,025,279
1,004,945 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED
SERIES 2003-T12 CLASS A3+/- 4.24 08/13/2039 1,010,191
1,459,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED
SERIES 2004 CLASS A3+/- 5.47 06/11/2041 1,515,268
2,271,488 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED
SERIES 2004-PWR4 CLASS A2+/- 5.29 06/11/2041 2,340,056
649,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED
SERIES 2004-PWR6 CLASS A6 4.83 11/11/2041 649,631
3,428,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED
SERIES 2004-T16 CLASS A6+/- 4.75 02/13/2046 3,381,809
24,737,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED
SERIES 2005-PW10 CLASS A4+/- 5.41 12/11/2040 24,845,588
1,979,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED
SERIES 2005-PWR9 CLASS AAB 4.80 09/11/2042 2,030,977
8,885,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES, CLASS A2 6.46 10/15/2036 9,395,809
8,291,000 COMMERCIAL MORTGAGE ASSET TRUST SERIES 1999-C1 CLASS A4+/- 6.98 01/17/2032 8,890,275
7,494,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE SERIES
2001-J2A CLASS A2++ 6.10 07/16/2034 7,798,502
4,946,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE SERIES
2004-LB2A CLASS A4 4.72 03/10/2039 4,936,277
2,664,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE SERIES
2004-LB3A CLASS A5+/- 5.48 07/10/2037 2,695,102
4,815,184 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2001-CF2 CLASS A4 6.51 02/15/2034 4,958,005
1,056,247 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2001-CK1 CLASS A3 6.38 12/18/2035 1,082,614
3,996,663 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2001-CKN5 CLASS A4 5.44 09/15/2034 4,137,093
907,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2002-CKN2 CLASS A3 6.13 04/15/2037 957,571
1,473,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2002-CP5 CLASS A2 4.94 12/15/2035 1,515,275
1,249,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2003-CK2 CLASS A4 4.80 03/15/2036 1,280,204
1,831,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2003-CPN1 CLASS A2 4.60 03/15/2035 1,860,312
523,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2005-C1 CLASS A3 4.81 02/15/2038 525,724
1,869,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION
SERIES 2005-C5 CLASS A4+/- 5.10 08/15/2038 1,837,427
1,913,942 DLJ COMMERCIAL MORTGAGE CORPORATION SERIES 2000-CKP1
CLASS A1B 7.18 11/10/2033 1,958,374
Wells Fargo Advantage Master Portfolios 107
Portfolio of Investments--November 30, 2009 (Unaudited)
TOTAL RETURN BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED)
$ 3,752,000 FHLMC MULTIFAMILY STRUCTURED PASS THROUGH CERTIFICATES
SERIES K003 CLASS AAB 4.77% 05/25/2018 $ 3,967,515
328,000 FHLMC SERIES 2542 CLASS ES 5.00 12/15/2017 351,020
3,954,000 FHLMC SERIES 2558 CLASS BD 5.00 01/15/2018 4,260,276
7,216,000 FHLMC SERIES 2590 CLASS BY 5.00 03/15/2018 7,775,921
2,815,000 FHLMC SERIES 2590 CLASS NU 5.00 06/15/2017 2,952,962
2,421,000 FHLMC SERIES 2676 CLASS CY 4.00 09/15/2018 2,524,557
1,934,000 FHLMC SERIES 2690 CLASS TV 4.50 11/15/2025 2,017,998
347,000 FHLMC SERIES 2694 CLASS QG 4.50 01/15/2029 365,237
626,156 FHLMC SERIES 2727 CLASS PW 3.57 06/15/2029 639,511
1,773,000 FHLMC SERIES 2765 CLASS CT 4.00 03/15/2019 1,828,863
2,558,000 FHLMC SERIES 2790 CLASS TN 4.00 05/15/2024 2,611,541
2,932,000 FHLMC SERIES 2843 CLASS BC 5.00 08/15/2019 3,152,155
1,093,000 FHLMC SERIES 2875 CLASS HB 4.00 10/15/2019 1,119,326
3,317,000 FHLMC SERIES 2934 5.00 01/15/2034 3,533,118
4,221,000 FHLMC SERIES 2985 CLASS JR 4.50 06/15/2025 4,399,194
25,000 FHLMC SERIES 3008 CLASS JM 4.50 07/15/2025 26,094
2,571,157 FHLMC SERIES 3028 CLASS PG 5.50 09/15/2035 2,787,837
5,923,727 FHLMC SERIES 3052 5.25 10/15/2034 6,291,182
243,000 FHLMC SERIES 3234 4.50 10/15/2036 242,148
5,094,000 FHLMC SERIES 3289 CLASS PC 5.00 12/15/2032 5,358,599
3,799,988 FHLMC SERIES 3325 CLASS JL 5.50 06/15/2037 4,099,773
2,607,000 FHLMC SERIES 3372 CLASS BD 4.50 10/15/2022 2,748,221
1,554,873 FHLMC SERIES 3465 CLASS HA 4.00 07/15/2017 1,623,736
6,581,000 FHLMC SERIES K004 CLASS A2 4.19 08/25/2019 6,726,952
1,054,453 FIRST HORIZON ALTERNATIVE MORTGAGE SECURITY SERIES 2006-FA6
CLASS 2A10 6.00 11/25/2036 843,657
1,264,816 FIRST UNION NATIONAL BANK COMMERCIAL MORTGAGE SERIES 2000-C2
CLASS A2 7.20 10/15/2032 1,295,369
1,574,000 FIRST UNION NATIONAL BANK COMMERCIAL MORTGAGE SERIES 2001-C4
CLASS B 6.42 12/12/2033 1,611,605
32,093,124 FNMA SERIES 2001-81 CLASS HE 6.50 01/25/2032 34,986,518
3,117,000 FNMA SERIES 2002-94 CLASS HQ 4.50 01/25/2018 3,315,022
438,627 FNMA SERIES 2003-108 CLASS BE 4.00 11/25/2018 455,843
750,000 FNMA SERIES 2003-125 CLASS AY 4.00 12/25/2018 776,925
2,952,000 FNMA SERIES 2003-3 CLASS HJ 5.00 02/25/2018 3,163,545
1,529,000 FNMA SERIES 2004-3 CLASS HT 4.00 02/25/2019 1,581,100
1,517,862 FNMA SERIES 2004-60 CLASS PA 5.50 04/25/2034 1,620,086
2,162,000 FNMA SERIES 2004-80 CLASS LE 4.00 11/25/2019 2,235,002
1,298,000 FNMA SERIES 2004-81 CLASS KE 4.50 11/25/2019 1,380,199
1,319,071 FNMA SERIES 2005-58 CLASS MA 5.50 07/25/2035 1,435,792
2,897,000 FNMA SERIES 2007-113 CLASS DB 4.50 12/25/2022 3,046,843
4,806,101 FNMA SERIES 2007-30 CLASS MA 4.25 02/25/2037 5,033,738
5,281,647 FNMA SERIES 2007-39 CLASS NA 4.25 01/25/2037 5,531,237
8,218,795 FNMA SERIES 2007-77 CLASS MH 6.00 12/25/2036 8,891,588
760,000 FNMA SERIES 2008-66 CLASS B 5.00 08/25/2023 812,864
2,044 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2001-2
CLASS A3 6.03 08/11/2033 2,070
494,175 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2001-3
CLASS A1 5.56 06/10/2038 507,053
3,952,000 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2002-1A
CLASS A3 6.27 12/10/2035 4,208,665
11,088,000 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2005-C4
CLASS A4+/- 5.51 11/10/2045 11,059,442
241,303 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES
2000-C2 CLASS A2+/- 7.46 08/16/2033 244,859
4,716,512 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES
2001-C2 CLASS A2 6.70 04/15/2034 4,914,375
4,436,000 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES
2002-C3 CLASS A2 4.93 07/10/2039 4,594,908
1,228,000 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES
2003-C2 CLASS A2+/- 5.67 05/10/2040 1,291,622
2,528,000 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES
2003-C3 CLASS A4 5.02 04/10/2040 2,591,104
90,400,000 GNMA%% 4.50 TBA 92,547,804
1,693,000 GNMA SERIES 2006-37 CLASS JG 5.00 07/20/2036 1,796,325
1,348,000 GREENWICH CAPITAL COMMERCIAL FUNDING CORPORATION SERIES
2005-GG CLASS AAB+/- 5.19 04/10/2037 1,377,444
108 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
TOTAL RETURN BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED)
$ 2,007,500 GREENWICH CAPITAL COMMERCIAL FUNDING CORPORATION SERIES
2005-GG3 CLASS A4+/- 4.80% 08/10/2042 $ 1,930,979
5,227,000 GREENWICH CAPITAL COMMERCIAL FUNDING CORPORATION SERIES
2005-GG5 CLASS A5+/- 5.22 04/10/2037 4,876,627
6,402,000 GREENWICH CAPITAL COMMERCIAL FUNDING CORPORATION SERIES
2006-GG7 CLASS A4+/- 6.12 07/10/2038 5,812,887
1,705,000 GREENWICH CAPITAL COMMERCIAL FUNDING CORPORATION SERIES
2007-GG1 CLASS A6+/- 5.14 06/10/2036 1,664,865
7,745,000 GS MORTGAGE SECURITIES CORPORATION II SERIES 2001-GL3A CLASS
A2+++/- 6.45 08/05/2018 8,107,688
274,298 HELLER FINANCIAL COMMERCIAL MORTGAGE ASSET SERIES 1999-PH1
CLASS C+/- 7.18 05/15/2031 273,762
5,397,233 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES 2001 CLASS A3 6.26 03/15/2033 5,540,512
445,730 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2000-C10 CLASS A2+/- 7.37 08/15/2032 446,121
1,040,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2001-C1 CLASS A3 5.86 10/12/2035 1,076,845
6,310,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2001-CIB3 CLASS A3 6.47 11/15/2035 6,616,816
1,152,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2002-CIB5 CLASS A2 5.16 10/12/2037 1,199,753
350,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2003-PM1A CLASS A4+/- 5.33 08/12/2040 362,771
2,865,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2004-CB9 CLASS A4+/- 5.56 06/12/2041 2,909,507
1,841,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2005-LDP4 CLASS A4+/- 4.92 10/15/2042 1,832,106
3,316,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2006+/- 5.48 12/12/2044 3,176,403
2,488,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2006-LDP7 CLASS A2+/- 6.05 04/15/2045 2,548,888
1,011,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2007-CB19 CLASS A2+/- 5.82 02/12/2049 1,024,246
11,977,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION
SERIES 2007-LDPX CLASS A2S 5.31 01/15/2049 11,587,339
2,114,612 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2000-C4
CLASS A2 7.37 08/15/2026 2,151,907
3,753,964 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2000-C5
CLASS A2 6.51 12/15/2026 3,872,149
1,368,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2001-C2
CLASS A2 6.65 11/15/2027 1,428,934
6,652,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2002-C2
CLASS A4 5.59 06/15/2031 7,033,289
1,500,444 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2002-C4
CLASS A4 4.56 09/15/2026 1,545,394
2,763,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2002-C4
CLASS A5 4.85 09/15/2031 2,879,717
2,304,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2003-C3
CLASS A4 4.17 05/15/2032 2,319,804
1,233,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2004-C7
CLASS A5 4.63 10/15/2029 1,218,300
2,423,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2007-C1
CLASS A3 5.40 02/15/2040 2,369,145
634,000 LEHMAN BROTHERS UBS COMMERCIALL MORTGAGE TRUST SERIES 2007-C2
CLASS AAB 5.40 02/15/2040 621,246
3,488,000 MERRILL LYNCH COUNTRYWIDE COMMERCIAL MORTGAGE TRUST SERIES
2006-1 CLASS A2+/- 5.44 02/12/2039 3,518,634
5,278,000 MERRILL LYNCH MORTGAGE TRUST SERIES 2003-KEY1 CLASS A4+/- 5.24 11/12/2035 5,462,484
2,003,000 MERRILL LYNCH MORTGAGE TRUST SERIES 2005-CIP1 CLASS A3A+/- 4.95 07/12/2038 1,987,636
3,252,000 MORGAN STANLEY CAPITAL I SERIES 2003-T11 CLASS A4 5.15 06/13/2041 3,353,358
9,938,000 MORGAN STANLEY CAPITAL I SERIES 2004-HQ4 CLASS A7 4.97 04/14/2040 9,930,847
6,437,000 MORGAN STANLEY CAPITAL I SERIES 2004-IQ7 CLASS A4+/- 5.54 06/15/2038 6,488,715
1,311,000 MORGAN STANLEY CAPITAL I SERIES 2005-HQ5 CLASS A4 5.17 01/14/2042 1,328,735
5,917,000 MORGAN STANLEY CAPITAL I SERIES 2005-HQ6 CLASS A4A 4.99 08/13/2042 5,802,158
306,000 MORGAN STANLEY CAPITAL I SERIES 2005-T17 CLASS A4 4.52 12/13/2041 309,079
1,043,000 MORGAN STANLEY CAPITAL I SERIES 2005-T17 CLASS A5 4.78 12/13/2041 1,050,976
3,402,000 MORGAN STANLEY CAPITAL I SERIES 2006-HQ8 CLASS A2 5.37 03/12/2044 3,429,465
4,288,000 MORGAN STANLEY CAPITAL I SERIES 2006-HQ8 CLASS A4+/- 5.56 03/12/2044 4,092,077
1,157,000 MORGAN STANLEY CAPITAL I SERIES 2007-HQ11 CLASS A31 5.44 02/12/2044 1,123,413
8,998,800 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2001-TOP5 CLASS
A4 6.39 10/15/2035 9,484,457
1,030,565 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2002-HQ CLASS A3 6.51 04/15/2034 1,095,044
871,810 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2002-IQ2 CLASS A4 5.74 12/15/2035 918,732
12,100,000 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2003-HQ2 CLASS A2 4.92 03/12/2035 12,397,479
Wells Fargo Advantage Master Portfolios 109
Portfolio of Investments--November 30, 2009 (Unaudited)
TOTAL RETURN BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED)
$ 5,024,931 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2003-IQ5 CLASS A4 5.01% 04/15/2038 $ 5,195,864
2,979,000 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2004-HQ3 CLASS A4 4.80 01/13/2041 2,961,999
5,471,000 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2005-HQ5 CLASS AAB 5.04 01/14/2042 5,647,743
4,821,000 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2005-HQ7 CLASS
AAB+/- 5.35 11/14/2042 5,038,081
4,077,000 MORGAN STANLEY DEAN WITTER CAPTIAL I SERIES 2003-TOP9 CLASS A2 4.74 11/13/2036 4,189,219
7,476,092 NOMURA ASSET SECURITIES CORPORATION SERIES 1998-D6 CLASS A1C 6.69 03/15/2030 8,017,761
4,511,802 SALOMON BROTHERS MORTGAGE SECURITIES SERIES 2000-C3 CLASS A2 6.59 12/18/2033 4,600,552
1,766,169 SALOMON BROTHERS MORTGAGE SECURITIES VII SERIES 2002-KEY2
CLASS A2 4.47 03/18/2036 1,821,085
100,225 STRUCTURED ASSET SECURITIES CORPORATION SERIES 1998-2
CLASS A+/- 0.76 02/25/2028 86,988
4,514,330 US BANK NA SERIES 2007-1 CLASS A 5.92 05/25/2012 4,807,897
2,686,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2002-C1
CLASS A4 6.29 04/15/2034 2,855,820
1,969,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C6 CLASS
A3+/- 4.96 08/15/2035 1,963,644
381,633 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C7
CLASS A1++ 4.24 10/15/2035 384,948
1,678,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C8
CLASS A3 4.45 11/15/2035 1,678,025
1,546,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2004-C11
CLASS A4 5.03 01/15/2041 1,496,231
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (COST $573,799,825) 596,069,151
--------------
CORPORATE BONDS & NOTES: 17.51%
BANKING: 1.86%
10,815,000 ACHMEA HYPOTHEEKBANK NV++ 3.20 11/03/2014 11,084,348
4,420,000 COMMONWEALTH BANK OF AUSTRALIA++ 3.75 10/15/2014 4,527,424
4,340,000 COMMONWEALTH BANK OF AUSTRALIA++ 5.00 10/15/2019 4,458,521
7,675,000 NIBC BANK NV++ 2.80 12/02/2014 7,685,162
3,265,000 NIBC BANK NV 4.88 11/19/2019 3,314,906
4,245,000 NORDEA BANK AB++ 2.50 11/13/2012 4,283,146
4,960,000 NORDEA BANK AB++ 3.70 11/13/2014 5,046,130
7,880,000 WESTPAC BANKING CORPORATION 2.25 11/19/2012 7,940,187
48,339,824
--------------
BIOTECHNOLOGY: 0.18%
4,160,000 AMGEN INCORPORATED 6.40 02/01/2039 4,787,374
--------------
CHEMICALS: 0.56%
5,220,000 DOW CHEMICAL COMPANY 4.85 08/15/2012 5,517,733
7,670,000 DOW CHEMICAL COMPANY 8.55 05/15/2019 9,064,820
14,582,553
--------------
COMMUNICATIONS: 1.16%
11,435,000 CELLCO PART/VERI WIRELESS 7.38 11/15/2013 13,319,511
5,241,000 COMCAST CABLE COMMUNICATIONS HOLDINGS INCORPORATED 8.38 03/15/2013 6,135,644
4,470,000 GRUPO TELEVISA SA++ 6.63 01/15/2040 4,449,304
6,181,000 QWEST CORPORATION 7.50 10/01/2014 6,320,073
30,224,532
--------------
COMPUTER HARDWARE: 0.08%
1,780,000 DELL INCORPORATED 5.88 06/15/2019 1,953,534
--------------
DEPOSITORY INSTITUTIONS: 1.81%
10,290,000 BANK OF AMERICA CORPORATION 7.38 05/15/2014 11,550,803
3,175,000 BANK OF AMERICA CORPORATION 6.00 09/01/2017 3,286,077
3,405,000 BANK OF AMERICA CORPORATION 5.75 12/01/2017 3,472,623
3,610,000 CAPITAL ONE BANK USA NA 8.80 07/15/2019 4,275,298
9,195,000 CITIGROUP INCORPORATED 1.88 10/22/2012 9,323,068
5,529,000 JPMORGAN CHASE & COMPANY 5.38 10/01/2012 6,062,023
110 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
TOTAL RETURN BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
DEPOSITORY INSTITUTIONS (CONTINUED)
$ 4,325,000 JPMORGAN CHASE & COMPANY<< 4.65% 06/01/2014 $ 4,620,142
4,380,000 MORGAN STANLEY 5.63 09/23/2019 4,436,204
47,026,238
--------------
ELECTRIC UTILITIES: 0.09%
2,245,000 PROGRESS ENERGY INCORPORATED 6.85 04/15/2012 2,467,812
--------------
ELECTRIC, GAS & SANITARY SERVICES: 1.55%
9,430,000 DOMINION RESOURCES INCORPORATED PUTTABLESS 8.88 01/15/2019 12,077,642
5,111,000 DPL INCORPORATED 6.88 09/01/2011 5,520,514
4,290,000 DUKE ENERGY CORPORATION 6.30 02/01/2014 4,785,281
1,505,000 FIRSTENERGY SOLUTIONS CORPORATION++ 4.80 02/15/2015 1,564,091
4,750,000 FIRSTENERGY SOLUTIONS CORPORATION++ 6.05 08/15/2021 4,972,348
1,910,000 FIRSTENERGY SOLUTIONS CORPORATION++ 6.80 08/15/2039 1,984,717
8,550,000 NEVADA POWER COMPANY SERIES A 8.25 06/01/2011 9,297,492
40,202,085
--------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER
EQUIPMENT: 0.48%
1,285,000 CISCO SYSTEMS INCORPORATED 5.90 02/15/2039 1,345,700
1,245,000 EXELON GENERATION COMPANY LLC 5.20 10/01/2019 1,288,406
2,505,000 EXELON GENERATION COMPANY LLC 6.25 10/01/2039 2,616,265
6,592,000 HEWLETT-PACKARD COMPANY 4.75 06/02/2014 7,186,941
12,437,312
--------------
FOOD & KINDRED PRODUCTS: 0.36%
7,870,000 ANHEUSER-BUSCH INBEV WORLDWIDE INCORPORATED++ 7.75 01/15/2019 9,438,483
--------------
HEALTH SERVICES: 0.17%
4,639,000 COVENTRY HEALTH CARE INCORPORATED 5.95 03/15/2017 4,308,555
--------------
INSURANCE CARRIERS: 0.30%
2,930,000 LIBERTY MUTUAL GROUP++ 7.50 08/15/2036 2,636,188
4,835,000 UNITEDHEALTH GROUP INCORPORATED 6.88 02/15/2038 5,172,193
7,808,381
--------------
MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS: 0.17%
4,295,000 VALE OVERSEAS LIMITED 6.88 11/10/2039 4,439,488
--------------
MOTION PICTURES: 0.09%
2,090,000 NEWS AMERICA INCORPORATED++ 6.90 08/15/2039 2,277,323
--------------
NON-DEPOSITORY CREDIT INSTITUTIONS: 1.04%
3,745,000 AMERICAN EXPRESS COMPANY 7.25 05/20/2014 4,279,044
3,093,000 AMERICAN EXPRESS COMPANY 8.15 03/19/2038 3,904,306
4,000,000 CREDIT SUISSE NEW YORK 6.00 02/15/2018 4,278,596
7,595,000 JPMORGAN CHASE BANK NATIONAL SERIES BKNT 6.00 10/01/2017 8,137,579
4,525,000 JPMORGAN CHASE CAPITAL XXV 6.80 10/01/2037 4,463,256
1,800,000 PRIVATE EXPORT FUNDING CORPORATION 3.05 10/15/2014 1,850,332
26,913,113
--------------
OIL & GAS EXTRACTION: 0.77%
6,775,000 ANADARKO PETROLEUM CORPORATION 8.70 03/15/2019 8,485,660
5,380,000 PETROBRAS INTERNATIONAL FINANCE COMPANY 2.90 10/15/2014 5,496,305
Wells Fargo Advantage Master Portfolios 111
Portfolio of Investments--November 30, 2009 (Unaudited)
TOTAL RETURN BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
OIL & GAS EXTRACTION (CONTINUED)
$ 3,295,000 PETROBRAS INTERNATIONAL FINANCE COMPANY 6.88% 01/20/2040 $ 3,437,720
2,075,000 VALERO ENERGY CORPORATION 9.38 03/15/2019 2,505,419
19,925,104
--------------
PHARMACEUTICALS: 0.44%
7,946,000 PFIZER INCORPORATED 5.35 03/15/2015 8,890,414
2,115,000 SCHERING-PLOUGH CORPORATION 6.55 09/15/2037 2,496,980
11,387,394
--------------
PIPELINES: 0.78%
3,240,000 ENERGY TRANSFER PARTNERS LP 8.50 04/15/2014 3,788,898
4,580,000 ENERGY TRANSFER PARTNERS LP 9.00 04/15/2019 5,582,594
10,670,000 KINDER MORGAN INCORPORATED 6.50 09/01/2012 10,963,425
20,334,917
--------------
REAL ESTATE: 0.76%
4,690,000 WEA FINANCE LLC++ 7.50 06/02/2014 5,215,585
8,720,000 WEA FINANCE LLC++ 7.13 04/15/2018 9,386,164
4,825,000 WEA FINANCE LLC++ 6.75 09/02/2019 5,070,023
19,671,772
--------------
REAL ESTATE INVESTMENT TRUSTS (REITS): 0.41%
1,440,000 HCP INCORPORATED SERIES MTN 6.30 09/15/2016 1,449,851
1,630,000 HCP INCORPORATED SERIES MTN 6.70 01/30/2018 1,649,516
5,010,000 HEALTH CARE PROPERTY INVESTORS INCORPORATED 5.65 12/15/2013 5,099,779
880,000 HEALTH CARE PROPERTY INVESTORS INCORPORATED 6.00 01/30/2017 866,845
1,450,000 MACK-CALI REALTY CORPORATION 7.75 08/15/2019 1,546,447
10,612,438
--------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 2.37%
2,420,000 BEAR STEARNS COMPANIES INCORPORATED SERIES MTN 6.95 08/10/2012 2,719,456
9,647,000 GOLDMAN SACHS CAPITAL II+/- 5.79 12/29/2049 7,090,545
6,755,000 GOLDMAN SACHS GROUP INCORPORATED 5.45 11/01/2012 7,348,238
3,180,000 GOLDMAN SACHS GROUP INCORPORATED 5.13 01/15/2015 3,375,624
6,420,000 GOLDMAN SACHS GROUP INCORPORATED 6.75 10/01/2037 6,607,702
6,617,000 LAZARD GROUP LLC 7.13 05/15/2015 6,907,744
6,742,000 LAZARD GROUP LLC 6.85 06/15/2017 6,914,656
6,985,000 MORGAN STANLEY 6.00 05/13/2014 7,611,575
2,900,000 MORGAN STANLEY 7.25 04/01/2032 3,326,747
3,205,000 MORGAN STANLEY SERIES MTN 5.25 11/02/2012 3,438,372
6,020,000 MORGAN STANLEY SERIES MTN 5.95 12/28/2017 6,327,917
61,668,576
--------------
TELECOMMUNICATIONS: 1.28%
1,630,000 AMERICA MOVIL SAB DE CV 5.55 02/01/2014 1,796,355
6,674,000 AMERICA MOVIL SAB DE CV++ 5.00 10/16/2019 6,735,234
6,730,000 CELLCO PARTNERSHIP / VERIZON WIRELESS CAPITAL LLC 3.75 05/20/2011 6,971,587
3,655,000 CELLCO PARTNERSHIP / VERIZON WIRELESS CAPITAL LLC 8.50 11/15/2018 4,669,040
7,855,000 CISCO SYSTEMS INCORPORATED 4.45 01/15/2020 7,989,815
5,205,000 CISCO SYSTEMS INCORPORATED 5.50 01/15/2040 5,174,931
33,336,962
--------------
TOBACCO PRODUCTS: 0.33%
7,035,000 ALTRIA GROUP INCORPORATED 9.70 11/10/2018 8,704,462
--------------
112 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
TOTAL RETURN BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
WHOLESALE TRADE NON-DURABLE GOODS: 0.47%
$ 2,750,000 CAREFUSION CORPORATION++ 4.13% 08/01/2012 $ 2,867,310
5,270,000 CAREFUSION CORPORATION++ 5.13 08/01/2014 5,632,734
3,300,000 CAREFUSION CORPORATION++ 6.38 08/01/2019 3,657,347
12,157,391
--------------
TOTAL CORPORATE BONDS & NOTES (COST $426,160,046) 455,005,623
--------------
FOREIGN CORPORATE BONDS: 4.19%
14,930,000 BP CAPITAL MARKETS PLC 3.88 03/10/2015 15,733,129
5,350,000 BRITISH SKY BROADCASTING GROUP PLC++ 9.50 11/15/2018 7,046,662
3,460,000 BRITISH TELECOM PLC 9.63 12/15/2030 4,429,298
4,830,000 CREDIT SUISSE NEW YORK 5.00 05/15/2013 5,216,081
2,765,000 FRANCE TELECOM SA 7.75 03/01/2011 2,984,826
2,875,000 HSBC HOLDINGS PLC 6.80 06/01/2038 3,170,360
2,320,000 HUSKY ENERGY INCORPORATED 5.90 06/15/2014 2,549,875
4,162,000 HUSKY ENERGY INCORPORATED 7.25 12/15/2019 4,864,641
6,400,000 PETROBRAS INTERNATIONAL FINANCE COMPANY 7.88 03/15/2019 7,476,998
4,630,000 RAS LAFFAN LIQUEFIED NATURAL GAS COMPANY
LIMITED III++ 4.50 09/30/2012 4,792,045
5,195,000 RAS LAFFAN LIQUEFIED NATURAL GAS COMPANY
LIMITED III<<++ 5.50 09/30/2014 5,455,389
4,160,000 RIO TINTO FINANCE USA LIMITED 5.88 07/15/2013 4,565,974
3,515,000 RIO TINTO FINANCE USA LIMITED 9.00 05/01/2019 4,480,440
1,630,000 ROGERS CABLE INCORPORATED 5.50 03/15/2014 1,768,261
9,422,000 ROGERS WIRELESS INCORPORATED 6.38 03/01/2014 10,577,608
7,500,000 SHELL INTERNATIONAL FINANCE 4.00 03/21/2014 7,985,385
4,990,000 SUNCOR ENERGY INCORPORATED 6.50 06/15/2038 5,300,313
3,565,000 TELEFONICA EMISIONES SAU 5.98 06/20/2011 3,800,775
2,355,000 THOMSON REUTERS CORPORATION 5.95 07/15/2013 2,645,845
3,805,000 WESTFIELD GROUP++ 5.40 10/01/2012 3,987,065
TOTAL FOREIGN CORPORATE BONDS (COST $101,773,903) 108,830,970
--------------
FOREIGN GOVERNMENT BONDS: 4.29%
4,890,000 BARCLAYS BANK PLC SERIES 1 5.00 09/22/2016 5,071,937
3,860,000 CENOVUS ENERGY INCORPORATED++ 5.70 10/15/2019 4,092,550
3,205,000 ENEL FINANCE INTERNATIONAL SA++ 6.00 10/07/2039 3,285,939
3,095,000 ENEL FINANCIAL INTERNATIONAL SA++ 5.13 10/07/2019 3,197,277
3,275,000 EXPORT-IMPORT BANK OF KOREA 5.50 10/17/2012 3,506,346
5,375,000 EXPORT-IMPORT BANK OF KOREA 5.88 01/14/2015 5,835,111
3,675,000 FEDERAL REPUBLIC OF BRAZIL 5.63 01/07/2041 3,546,375
10,605,000 HUTCHISON WHAMPOA INTERNATIONAL LIMITED++ 4.63 09/11/2015 10,808,213
3,285,000 HUTCHISON WHAMPOA INTERNATIONAL LIMITED++ 5.75 09/11/2019 3,385,955
14,195,000 PROVINCE OF ONTARIO CANADA 4.10 06/16/2014 15,178,245
3,175,000 PROVINCE OF ONTARIO CANADA SERIES G 4.00 10/07/2019 3,195,190
10,830,000 REPUBLIC OF KOREA 7.13 04/16/2019 12,836,366
10,250,000 SOCIETE FINANCEMENT DE L'ECONOMIE FRANCAISE++ 2.88 09/22/2014 10,443,557
1,830,000 STATE OF QATAR++ 4.00 01/20/2015 1,832,288
2,985,000 STATE OF QATAR++ 5.25 01/20/2020 3,007,388
1,830,000 STATE OF QATAR++ 6.40 01/20/2040 1,866,600
10,385,000 SWEDISH EXPORT CREDIT 3.25 09/16/2014 10,669,684
9,445,000 TOTAL CAPITAL SA 3.13 10/02/2015 9,650,051
TOTAL FOREIGN GOVERNMENT BONDS (COST $106,658,893) 111,409,072
--------------
MUNICIPAL BONDS & NOTES: 0.38%
CALIFORNIA: 0.24%
6,345,000 CALIFORNIA STATE BUILD AMERICA BONDS (PROPERTY TAX REVENUE) 7.30 10/01/2039 6,322,919
--------------
Wells Fargo Advantage Master Portfolios 113
Portfolio of Investments--November 30, 2009 (Unaudited)
TOTAL RETURN BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
TEXAS: 0.14%
$ 3,250,000 NORTH TEXAS TOLLWAY BUILD AMERICA BONDS (TOLL ROAD REVENUE) 6.72% 01/01/2049 $ 3,565,705
--------------
TOTAL MUNICIPAL BONDS & NOTES (COST $9,679,115) 9,888,624
--------------
US TREASURY SECURITIES: 11.90%
US TREASURY BONDS: 3.82%
1,434,000 US TREASURY BOND 8.88 02/15/2019 2,088,151
2,950,000 US TREASURY BOND 7.13 02/15/2023 4,002,781
10,724,000 US TREASURY BOND 6.25 05/15/2030 13,951,259
15,950,000 US TREASURY BOND 5.38 02/15/2031 18,778,637
351,000 US TREASURY BOND 3.50 02/15/2039 309,374
10,085,000 US TREASURY BOND 4.25 05/15/2039 10,162,211
30,702,000 US TREASURY BOND<< 4.50 08/15/2039 32,256,289
17,083,000 US TREASURY BOND 4.38 11/15/2039 17,603,502
99,152,204
--------------
US TREASURY NOTES: 8.08%
281,000 US TREASURY NOTE 0.88 05/31/2011 282,910
1,138,000 US TREASURY NOTE 1.38 10/15/2012 1,148,580
15,481,000 US TREASURY NOTE<< 1.38 11/15/2012 15,603,161
4,795,000 US TREASURY NOTE 2.38 10/31/2014 4,885,290
29,559,000 US TREASURY NOTE 2.13 11/30/2014 29,726,425
2,701,000 US TREASURY NOTE 3.00 08/31/2016 2,769,157
26,035,000 US TREASURY NOTE<< 2.75 02/15/2019 25,172,591
49,445,000 US TREASURY NOTE<< 3.13 05/15/2019 49,201,632
55,679,000 US TREASURY NOTE<< 3.63 08/15/2019 57,610,393
23,214,000 US TREASURY NOTE<< 3.38 11/15/2019 23,555,014
209,955,153
--------------
TOTAL US TREASURY SECURITIES (COST $304,007,903) 309,107,357
--------------
SHARES YIELD
- ------------- -------------
COLLATERAL FOR SECURITIES LENDING: 7.22%
COLLATERAL INVESTED IN MONEY MARKET FUNDS: 1.28%
8,299,716 AIM STIT-LIQUID ASSETS PORTFOLIO(s) 0.21 8,299,716
8,299,716 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(s) 0.16 8,299,716
8,299,716 DREYFUS CASH MANAGEMENT FUND INSTITUTIONAL(s) 0.11 8,299,716
8,299,716 DWS MONEY MARKET SERIES INSTITUTIONAL(s) 0.20 8,299,716
33,198,864
--------------
PRINCIPAL INTEREST RATE
- ------------- -------------
COLLATERAL INVESTED IN OTHER ASSETS: 5.94%
$ 1,613,834 ALLIED IRISH BANKS NORTH AMERICA INCORPORATED 0.26 12/07/2009 1,613,831
576,369 AMSTEL FUNDING CORPORATION++(p) 1.25 12/18/2009 576,029
576,369 ANTALIS US FUNDING CORPORATION++(p) 0.18 12/03/2009 576,363
1,729,108 ANTALIS US FUNDING CORPORATION++(p) 0.20 12/04/2009 1,729,079
1,383,286 ARABELLA FINANCE LLC++(p) 0.35 12/01/2009 1,383,286
1,959,655 ARABELLA FINANCE LLC++(p) 0.40 12/03/2009 1,959,612
57,637 ARABELLA FINANCE LLC++(p) 0.40 12/04/2009 57,635
1,152,738 ASPEN FUNDING CORPORATION++(p) 0.18 12/21/2009 1,152,623
3,458,215 BANK OF AMERICA 0.18 12/23/2009 3,457,835
10,023,060 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $10,023,105) 0.16 12/01/2009 10,023,060
114 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
TOTAL RETURN BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 1,729,108 BANK OF IRELAND 0.35% 12/01/2009 $ 1,729,108
1,383,286 BANK OF IRELAND 0.50 12/02/2009 1,383,286
558,271 BARTON CAPITAL CORPORATION++(p) 0.18 12/01/2009 558,271
288,185 BELMONT FUNDING LLC++(p) 0.50 12/01/2009 288,185
1,498,560 BNP PARIBAS (NEW YORK) 0.21 12/08/2009 1,498,569
1,268,012 BNP PARIBAS (NEW YORK) 0.21 12/14/2009 1,268,026
3,458,215 BRYANT BANK FUNDING++ 0.18 12/23/2009 3,457,835
2,881,846 CAFCO LLC++ 0.17 12/09/2009 2,881,737
126,801 CALCASIEU PARISH LA+/-ss 0.40 12/01/2027 126,801
2,766,572 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY+/-ss 0.23 11/01/2026 2,766,572
368,876 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT
AUTHORITY+/-ss 0.35 06/01/2028 368,876
2,881,846 CHARTA LLC++(p) 0.17 12/09/2009 2,881,737
305,764 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.30 10/01/2038 305,764
576,369 COOK COUNTY IL+/-ss 0.40 11/01/2030 576,369
3,498,100 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT -102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY
VALUE $3,498,117) 0.17 12/01/2009 3,498,100
1,959,655 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.40 12/15/2037 1,959,655
1,383,286 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/02/2009 1,383,286
1,383,286 DEXIA CREDIT LOCAL DE FRANCE SA 0.27 12/04/2009 1,383,286
1,671,471 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/07/2009 1,671,471
2,881,846 E.ON AG++ 0.17 12/21/2009 2,881,574
2,881,846 ENI FINANCE USA INCORPORATED++ 0.17 12/18/2009 2,881,615
2,997,120 FORTIS FUNDING LLC++ 0.20 12/29/2009 2,996,654
3,112,394 GDF SUEZ++ 0.17 12/15/2009 3,112,188
2,305,477 GEMINI SECURITIZATION INCORPORATED++(p) 0.18 12/10/2009 2,305,373
2,879,540 GOLDMAN SACHS REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $2,879,554) 0.17 12/01/2009 2,879,540
2,881,846 GOTHAM FUNDING CORPORATION++ 0.18 12/15/2009 2,881,644
576,369 GRAMPIAN FUNDING++(p) 0.25 12/03/2009 576,361
2,420,751 GRAMPIAN FUNDING++(p) 0.28 12/15/2009 2,420,487
4,846,808 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 1,802,528
1,895,102 HAMILTON COUNTY OHIO HOSPITALS+/-ss 0.20 05/15/2037 1,895,102
190,202 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.30 11/01/2042 190,202
933,718 HOUSTON TX UTILITY SYSTEM+/-ss 0.27 05/15/2034 933,718
329,683 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY
REVENUES+/-ss 0.30 07/01/2029 329,683
230,548 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.29 01/01/2018 230,548
2,305,477 ING USA FUNDING LLC 0.19 12/07/2009 2,305,404
576,369 ING USA FUNDING LLC 0.18 12/09/2009 576,346
8,850,034 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $8,850,076) 0.17 12/01/2009 8,850,034
1,152,738 JUPITER SECURITIZATION CORPORATION++(p) 0.18 12/02/2009 1,152,733
576,369 JUPITER SECURITIZATION CORPORATION++ 0.18 12/03/2009 576,363
345,822 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.29 04/15/2025 345,822
3,458,215 KBC BANK NV BRUSSELS 0.18 12/01/2009 3,458,215
691,643 LLOYDS TSB BANK PLC 0.18 12/17/2009 691,588
2,305,477 LLOYDS TSB BANK PLC (NEW YORK) 0.20 12/07/2009 2,305,477
922,191 LMA AMERICAS LLC++(p) 0.18 12/11/2009 922,145
518,732 LMA AMERICAS LLC++(p) 0.18 12/17/2009 518,691
1,729,108 LMA AMERICAS LLC++(p) 0.19 12/21/2009 1,728,925
518,732 LOUISIANA PUBLIC FACILITIES AUTHORITY+/-ss 0.19 10/01/2033 518,732
2,858,791 MASSACHUSETTS HEFA+/-ss 0.25 10/01/2034 2,858,791
316,427 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.24 02/01/2036 316,427
2,420,751 NATIXIS 0.27 12/07/2009 2,420,763
230,548 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.31 01/01/2018 230,548
2,536,024 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.22 07/01/2034 2,536,024
Wells Fargo Advantage Master Portfolios 115
Portfolio of Investments--November 30, 2009 (Unaudited)
TOTAL RETURN BOND PORTFOLIO
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 2,305,477 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.24% 12/01/2040 $ 2,305,477
2,881,846 NEWPORT FUNDING CORPORATION++(p) 0.18 12/15/2009 2,881,644
564,265 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.30 01/01/2034 564,265
1,165,995 RBS SECURITIES INCORPORATED REPURCHASE AGREEMENT -
102% COLLATERALIZED BY MORTGAGE BACKED
SECURITIES (MATURITY VALUE $1,166,001) 0.18 12/01/2009 1,165,995
403,458 REGENCY MARKETS #1 LLC++(p) 0.18 12/04/2009 403,452
1,915,851 REGENCY MARKETS #1 LLC++(p) 0.20 12/09/2009 1,915,766
576,369 ROMULUS FUNDING CORPORATION++ 0.30 12/15/2009 576,302
2,074,929 ROYAL BANK OF SCOTLAND PLC 0.20 12/02/2009 2,074,918
1,613,834 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.20 12/01/2028 1,613,834
2,305,477 SOCIETE GENERALE NORTH AMERICA 0.19 12/18/2009 2,305,275
144,092 STARBIRD FUNDING CORPORATION++(p) 0.15 12/01/2009 144,092
2,305,477 STARBIRD FUNDING CORPORATION++(p) 0.20 12/03/2009 2,305,451
2,881,846 THAMES ASSET GLOBAL SECURITIZATION #1
INCORPORATED++ 0.18 12/18/2009 2,881,601
691,643 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 12/17/2009 691,588
2,339,828 TULIP FUNDING CORPORATION++(p) 0.19 12/07/2009 2,339,754
760,807 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.24 07/01/2032 760,807
2,305,477 UBS AG (STAMFORD CT) 0.31 12/04/2009 2,305,502
3,458,215 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 3,458,231
345,822 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.29 12/15/2040 345,822
14,916,576 VFNC CORPORATION+++/-(a)(i) 0.24 09/30/2010 7,458,288
144,092 VICTORY RECEIVABLES CORPORATION++(p) 0.15 12/01/2009 144,092
576,369 VICTORY RECEIVABLES CORPORATION++(p) 0.19 12/08/2009 576,348
1,909,972 VICTORY RECEIVABLES CORPORATION++ 0.18 12/16/2009 1,909,829
154,274,865
--------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $186,815,958) 187,473,729
--------------
SHARES YIELD
- ------------- -------------
SHORT-TERM INVESTMENTS: 6.84%
177,605,055 WELLS FARGO ADVANTAGE CASH INVESTMENT FUND~+++(u) 0.16 177,605,055
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $177,605,055) 177,605,055
--------------
TOTAL INVESTMENTS IN SECURITIES
(COST $2,953,472,961)* 117.40% 3,049,913,210
PRINCIPAL INTEREST RATE
- ------------- -------------
SHORT SALES
TBA SALE COMMITMENTS: (3.32%)
$ (8,800,000) FNMA%% 5.50 TBA (9,398,127)
(50,700,000) FNMA%% 5.50 TBA (54,280,688)
(21,200,000) FNMA%% 5.50 TBA (22,544,886)
TOTAL TBA SALE COMMITMENTS (PROCEEDS RECEIVED $(85,491,594)) (86,223,701)
--------------
OTHER ASSETS AND LIABILITIES, NET (14.08) (365,740,409)
------ ==============
TOTAL NET ASSETS 100.00% $2,597,949,100
------ ==============
116 Wells Fargo Advantage Master Portfolios
Portfolio of Investments--November 30, 2009 (Unaudited)
TOTAL RETURN BOND PORTFOLIO
- ----------
<< All or a portion of this security is on loan.
%% Securities issued on a when-issued (TBA) basis.
++ 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.
(a) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
(i) Illiquid security.
(s) Rate shown is the 1-day annualized yield at period end.
(p) Asset-backed commercial paper.
ss These securities are subject to a demand feature which reduces the
effective maturity.
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The Wells
Fargo Advantage Money Market Fund does not pay an investment advisory fee.
+++ Short-term security of an affiliate of the Fund with a cost of
$177,605,055.
(u) Rate shown is the 7-day annualized yield at period end.
* Cost for federal income tax purposes is $2,964,679,077 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 99,331,637
Gross unrealized depreciation (14,097,504)
------------
Net unrealized appreciation $ 85,234,133
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Master Portfolio 117
Statements of Assets and Liabilities--November 30, 2009 (Unaudited)
Inflation- Managed Total
Protected Fixed Stable Return
Bond Income Income Bond
Portfolio Portfolio Portfolio Portfolio
------------ ------------ ------------ --------------
ASSETS
Investments
In securities, at value (including securities
on loan) ........................................ $148,307,152 $415,782,445 $280,648,764 $2,684,834,426
Collateral received for securities loaned .......... 6,264,192 3,845,969 2,802,259 187,473,729
In affiliates ...................................... 0 19,480,123 17,814,871 177,605,055
------------ ------------ ------------ --------------
Total investments at value (see cost below) ........... 154,571,344 439,108,537 301,265,894 3,049,913,210
------------ ------------ ------------ --------------
Segregated cash ....................................... 0 0 0 100,000
Cash .................................................. 443,868 231,638 0 0
Variance margin receivable on futures contracts ....... 0 10,500 0 0
Receivable for investment sold ........................ 0 0 11,807,172 273,852,842
Receivable for interest ............................... 967,348 5,257,237 1,982,539 38,618,854
Prepaid expenses and other assets ..................... 25,970 49,916 0 4,570
Unrealized gain for swaps ............................. 0 0 0 212,058
------------ ------------ ------------ --------------
Total Assets ............................................. 156,008,530 444,657,828 315,055,605 3,362,701,534
------------ ------------ ------------ --------------
LIABILITIES
Securities sold short, at value ....................... 0 0 0 86,223,701
Due to custodian ...................................... 0 0 0 4,284,724
Payable for investment purchased ...................... 0 0 0 486,196,534
Unrealized loss on credit default swap transactions ... 0 0 0 144,395
Payable upon receipt of securities loaned ............. 6,121,863 3,776,672 2,735,883 186,581,365
Payable to investment advisor and affiliates .......... 50,560 133,298 100,541 709,332
Accrued Expenses and other liabilities ................ 32,743 18,175 63,042 612,383
------------ ------------ ------------ --------------
Total liabilties ......................................... 6,205,166 3,928,145 2,899,466 764,752,434
------------ ------------ ------------ --------------
TOTAL NET ASSETS ......................................... $149,803,364 $440,729,683 $312,156,139 $2,597,949,100
============ ============ ============ ==============
Investment at cost ....................................... $146,179,284 $461,865,907 $330,905,416 $2,953,238,368
------------ ------------ ------------ --------------
Securities on loan, at value ............................. $ 4,841,526 $ 3,160,229 $ 2,059,293 $ 176,355,024
============ ============ ============ ==============
Proceeds received on TBA sale commitments short sales .... $ 0 $ 0 $ 0 $ 85,491,594
============ ============ ============ ==============
Net unrealized appreciation of futures ................... $ 0 $ 278,026 $ 0 $ 0
============ ============ ============ ==============
The accompanying notes are an integral part of these financial statements.
118 Wells Fargo Advantage Master Portfolios
Statements of Operations--For the Six Months Ended November 30, 2009 (Unaudited)
Inflation- Managed Total
Protected Fixed Stable Return
Bond Income Income Bond
Portfolio Portfolio Portfolio Portfolio
----------- ----------- ------------ ------------
INVESTMENT INCOME
Interest .................................................. $ 3,650,244 $11,196,500 $ 4,309,830 $ 55,114,823
Income from affiliated securities ......................... 2,221 59,173 73,541 192,316
Securities lending income ................................. 25,750 28,379 1,686 381,055
----------- ----------- ------------ ------------
Total investment income ...................................... 3,678,215 11,284,052 4,385,057 55,688,194
----------- ----------- ------------ ------------
EXPENSES
Advisory fees ............................................. 303,150 992,031 735,266 4,152,967
Custody fees .............................................. 14,073 46,358 34,380 205,739
Professional fees ......................................... 17,430 22,785 20,472 21,093
Shareholder reports ....................................... 449 884 766 972
Trustees' fees ............................................ 5,289 5,289 5,289 5,289
Other fees and expenses ................................... 1,192 4,892 4,509 14,544
----------- ----------- ------------ ------------
Total expenses ............................................... 341,583 1,072,238 800,682 4,400,604
----------- ----------- ------------ ------------
LESS:
Waived fees ............................................... (11,176) (133,303) (75,615) (746,426)
Net expenses .............................................. 330,406 938,935 725,067 3,654,178
----------- ----------- ------------ ------------
Net investment income ........................................ 3,347,809 10,345,117 3,659,990 52,034,016
----------- ----------- ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
NET REALIZED GAIN (LOSS) FROM
Securities ................................................ 719,636 (471,907) (9,927,073) 47,119,901
Investments of collateral received for securities loaned .. (947,942) (1,323,247) (894,978) (6,848,645)
Futures transactions ...................................... (24,038) 437,518 0 0
----------- ----------- ------------ ------------
Net realized gain (loss) from investments .................... (252,344) (1,357,636) (10,822,051) 40,271,256
----------- ----------- ------------ ------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF
Securities ................................................ 7,019,139 36,884,393 24,785,025 72,916,380
Collateral received for securities loaned ................. 1,299,799 1,494,558 1,059,068 9,054,701
Futures transactions ...................................... 8,300 334,081 0 0
Swap agreements ........................................... 0 0 0 3,982
Short sale transactions ................................... 0 0 0 (445,095)
----------- ----------- ------------ ------------
Net change in unrealized appreciation (depreciation) of
investments ............................................... 8,327,238 38,713,032 25,844,093 81,529,968
----------- ----------- ------------ ------------
Net realized and unrealized gain on investments .............. 8,074,894 37,355,396 15,022,042 121,801,224
----------- ----------- ------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ......... $11,422,703 $47,700,513 $ 18,682,032 $173,835,240
=========== =========== ============ ============
The accompanying notes are an integral part of these financial statements.
THIS PAGE IS INTENTIONALLY LEFT BLANK.
120 Wells Fargo Advantage Master Portfolios
Statements of Changes in Net Assets
INFLATION-PROTECTED
BOND PORTFOLIO
--------------------------------
For the
Six Months Ended For the
November 30, 2009 Year Ended
(Unaudited) May 31, 2009
----------------- ------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets .......................................... $145,129,236 $167,675,358
OPERATIONS
Net investment income ......................................... 3,347,809 2,490,876
Net realized gain (loss) on investments ....................... (252,344) (1,697,743)
Net change in unrealized appreciation (depreciation) of
investments ................................................ 8,327,238 (3,460,694)
------------ ------------
Net increase (decrease) in net assets resulting from operations .. 11,422,703 (2,667,561)
------------ ------------
CAPITAL SHARES TRANSACTIONS
TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS
Contributions ................................................. 28,501,180 84,069,763
Withdrawals ................................................... (35,249,755) (103,948,324)
------------ ------------
Net increase (decrease) from transactions in investors' beneficial
interests ..................................................... (6,748,575) (19,878,561)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ............................ 4,674,128 (22,546,122)
------------ ------------
ENDING NET ASSETS ................................................ $149,803,364 $145,129,236
============ ============
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Master Portfolios 121
Statements of Changes in Net Assets
MANAGED FIXED INCOME PORTFOLIO STABLE INCOME PORTFOLIO TOTAL RETURN BOND PORTFOLIO
- --------------------------------- --------------------------------- ----------------------------------
For the For the For the
Six Months Ended For the Six Months Ended For the Six Months Ended For the
November 30, 2009 Year Ended November 30, 2009 Year Ended November 30, 2009 Year Ended
(Unaudited) May 31, 2009 (Unaudited) May 31, 2009 (Unaudited) May 31, 2009
- ----------------- ------------- ----------------- ------------- ----------------- --------------
$ 493,483,921 $ 774,310,509 $ 374,557,430 $ 511,549,484 $1,961,888,535 $1,816,941,206
10,345,117 29,733,980 3,659,990 16,223,725 52,034,016 83,821,020
(1,357,636) (7,235,567) (10,822,051) 22,767 40,271,256 (5,288,852)
38,713,032 (37,824,215) 25,844,093 (30,740,368) 81,529,968 28,319,322
------------- ------------- ------------- ------------- -------------- --------------
47,700,513 (15,325,802) 18,682,032 (14,493,876) 173,835,240 106,851,490
------------- ------------- ------------- ------------- -------------- --------------
106,067,287 287,118,178 32,684,825 65,645,782 612,132,515 624,285,153
(206,522,038) (552,618,964) (113,768,148) (188,143,960) (149,907,190) (586,189,314)
------------- ------------- ------------- ------------- -------------- --------------
(100,454,751) (265,500,786) (81,083,323) (122,498,178) 462,225,325 38,095,839
------------- ------------- ------------- ------------- -------------- --------------
(52,754,238) (280,826,588) (62,401,291) (136,992,054) 636,060,565 144,947,329
------------- ------------- ------------- ------------- -------------- --------------
$ 440,729,683 $ 493,483,921 $ 312,156,139 $ 374,557,430 $2,597,949,100 $1,961,888,535
============= ============= ============= ============= ============== ==============
122 Wells Fargo Advantage Master Portfolios
Financial Highlights
Ratio to Average
Net Assets (Annualized)
-----------------------------------
Net Portfolio
Investment Gross Net Total Turnover
Income (Loss) Expenses Expenses Return(1) Rate(3)
------------- -------- -------- --------- --------
INFLATION-PROTECTED BOND PORTFOLIO
June 1, 2009 to November 30, 2009 (Unaudited) .. 4.42% 0.45% 0.44% 7.35% 12%
June 1, 2008 to May 31, 2009 ................... 1.70% 0.45% 0.37% (1.33)% 53%
June 1, 2007 to May 31, 2008 ................... 5.78% 0.48% 0.40% 12.78% 40%
June 1, 2006 to May 31, 2007 ................... 4.39% 0.49% 0.34% 4.31% 37%
July 25, 2005(2) to May 31, 2006 ............... 4.29% 0.52% 0.52% (1.77)% 47%
MANAGED FIXED INCOME PORTFOLIO
June 1, 2009 to November 30, 2009 (Unaudited) .. 4.16% 0.43% 0.38% 9.76% 42%
June 1, 2008 to May 31, 2009 ................... 5.09% 0.43% 0.34% (1.72)% 132%
June 1, 2007 to May 31, 2008 ................... 5.23% 0.46% 0.30% 4.24% 32%
June 1, 2006 to May 31, 2007 ................... 5.23% 0.45% 0.27% 6.72% 30%
June 1, 2005 to May 31, 2006 ................... 5.02% 0.45% 0.19% 0.12% 25%
June 1, 2004 to May 31, 2005 ................... 4.70% 0.49% 0.35% 7.02% 53%
STABLE INCOME PORTFOLIO
June 1, 2009 to November 30, 2009 (Unaudited) .. 1.99% 0.44% 0.39% 4.94% 5%
June 1, 2008 to May 31, 2009 ................... 3.74% 0.43% 0.42% (2.73)% 7%
June 1, 2007 to May 31, 2008 ................... 4.67% 0.47% 0.33% 0.78% 22%
June 1, 2006 to May 31, 2007 ................... 4.67% 0.47% 0.37% 5.30% 21%
June 1, 2005 to May 31, 2006 ................... 4.29% 0.47% 0.44% 2.91% 23%
June 1, 2004 to May 31, 2005 ................... 2.06% 0.48% 0.36% 2.47% 43%
TOTAL RETURN BOND PORTFOLIO
June 1, 2009 to November 30, 2009 (Unaudited) .. 4.64% 0.39% 0.33% 8.12% 292%
June 1, 2008 to May 31, 2009 ................... 4.92% 0.40% 0.39% 6.58% 633%
June 1, 2007 to May 31, 2008 ................... 5.05% 0.42% 0.40% 6.72% 572%
June 1, 2006 to May 31, 2007 ................... 5.02% 0.42% 0.39% 6.76% 665%
July 25, 2005(3) to May 31, 2006 ............... 4.44% 0.43% 0.43% (0.16)% 704%
- ----------
(1.) 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.
(2.) Commencement of operations.
(3.) 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.
Wells Fargo Advantage Master Portfolios 123
Notes to Financial Statements
1. ORGANIZATION
Wells Fargo Master Trust (the "Trust") is an open-end investment management
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). These financial statements report on the following funds: Wells
Fargo Advantage Inflation-Protected Bond Portfolio ("Inflation-Protected Bond
Portfolio"), Wells Fargo Advantage Managed Fixed Income Portfolio ("Managed
Fixed Income Portfolio"), Wells Fargo Advantage Stable Income Portfolio ("Stable
Income Portfolio") and Wells Fargo Advantage Total Return Bond Portfolio ("Total
Return Bond Portfolio") (each, a "Fund", collectively, the "Funds").
Interests in the Funds are sold without any sales charge in private placement
transactions to qualified investors, including open-end investment management
companies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed
in the preparation of the financial statements of each Fund, are in conformity
with U.S. Generally Accepted Accounting Principles ("GAAP") which 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. Management has considered the circumstances under which the Funds
should recognize or make disclosures regarding events or transactions occurring
subsequent to the balance sheet date through January 29, 2010 which represents
the date the financial statements are issued. Adjustments or additional
disclosures, if any, have been included in these financial statements.
SECURITY VALUATION
Certain fixed income securities with maturities exceeding 60 days are valued by
using a pricing service approved by the Trust's Board of Trustees. This 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' fair values. For some
securities, such prices are not readily available. These securities will
generally be fair valued using the methods which may include consideration of
yields or prices of securities of comparable quality, coupon rate, maturity and
type of issue; indications as to values from dealers in securities, trading
characteristics and general market conditions.
Debt securities of sufficient credit quality with original maturities of 60 days
or less, generally are valued at amortized cost which approximates market value.
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 fair value.
Investments in open-end mutual funds are valued at net asset value.
Investments which are not valued using any of the methods discussed above are
valued at their fair value as determined by procedures approved by the Board of
Trustees.
The valuation techniques used by the Funds to measure fair value are consistent
with the market approach, income approach and/or cost approach, where
applicable, for each security type.
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.
124 Wells Fargo Advantage Master Portfolios
Notes to Financial Statements
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 payable by the borrower or by retaining a portion of interest on the
investment securities purchased with cash received as collateral (after payment
of a "broker rebate fee" to the borrower). A Fund also continues to receive
interest or dividends on the securities loaned. Security loans are secured at
all times by collateral, although the loans may not be fully supported at all
times if, for example, the instruments in which cash collateral is invested
decline in value or the borrower fails to provide additional collateral when
required in a timely manner or at all. 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. Cash collateral received by a Fund pursuant to
these loans generally is invested on behalf of the Fund by the securities
lending agent in securities that, at the time of investment, are considered
high-quality short-term debt investments (including money market instruments)
and have been evaluated and approved by the Fund's adviser and are permissible
investments for the Fund. A risk from securities lending is that the borrower
may not provide additional collateral when required or return the securities
when due or when called for by the Fund. In either case, a Fund could experience
delays in recovering securities or collateral or could lose all or part of the
value of the loaned securities.
Wells Fargo Bank, N.A., currently acts as the securities lending agent for the
Funds, subject to the overall supervision of the Funds' investment adviser, and
has delegated its duties as securities lending agent to an affiliated sub-agent
for certain funds and to an unaffiliated sub-agent for other funds. Pursuant to
an exemptive order granted by the SEC and subject to compliance with its
conditions, Wells Fargo Bank, N.A. under a contract is entitled to receive for
its services 25% of the revenues earned on the securities lending activities and
incurs all expenses. Wells Fargo Bank, N.A. pays all or part of its portion of
the revenues generated by securities lending activities to the sub-agents as
compensation for their services as sub-agents. The securities lending agent may
make payments to borrowers and placing brokers that are not affiliated, directly
or indirectly, with the Trust, the adviser or the distributor. For the six
months ended November 30, 2009, 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, the related
collateral and the liability to return the collateral at November 30, 2009, are
shown on the Statements of Assets and Liabilities.
WHEN-ISSUED TRANSACTIONS
Each Fund may purchase securities on a forward commitment or `when-issued'
basis. A Fund records a when-issued transaction on the trade date and will
segregate assets to cover its obligation by confirming the availability of
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.
TERM LOANS
The Funds may invest in term loans. The Fund records an investment when the
borrower withdraws money and records interest as earned. These loans pay
interest at rates which are periodically reset by reference to a base lending
rate plus a spread. The Fund assumes the credit risk of the borrower. There
could be potential loss to the Fund in the event of default by the borrower.
FUTURES CONTRACTS
Certain Funds may be subject to interest rate risk in the normal course of
pursuing its investment objectives. The Funds may buy and sell futures contracts
in order to gain exposure to, or protect against changes in, security values and
interest rates. The primary risks associated with the use of futures contracts
are the imperfect correlation between changes in market values of securities
held by the Fund and the prices of futures contracts, and the possibility of an
illiquid market.
Futures contracts are valued based upon their quoted daily settlement prices.
The aggregate principal amounts of the contracts are not recorded in the
financial statements. Fluctuations in the value of the contracts are recorded in
the Statement of Assets and Liabilities as an asset or liability and in the
Statement of Operations as unrealized gains or losses until the contracts are
closed, at which point they are recorded as net realized gains or losses on
futures contracts. With
Wells Fargo Advantage Master Portfolios 125
Notes to Financial Statements
futures contracts, there is minimal counterparty risk to the Fund since futures
are exchange traded and the exchange's clearinghouse, as counterparty to all
exchange traded futures, guarantees the futures against default.
TBA SALE COMMITMENTS
A Fund may enter into To Be Announced ("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.
INFLATION-INDEXED BONDS AND TIPS
Certain Funds may invest in inflation-indexed bonds, including Treasury
Inflation-Protected Securities (TIPS). Inflation-indexed bonds are fixed income
securities whose principal value is periodically adjusted according to the rate
of inflation. If the index measuring inflation falls, the principal value of
inflation-indexed bonds (other than municipal inflation indexed bonds and
certain corporate inflation-indexed bonds) will be adjusted downward, and
consequently the interest payable on these securities (calculated with respect
to a smaller principal amount) will be reduced. Repayment of the original bond
principal upon maturity (as adjusted for inflation) is guaranteed in the case of
U.S. Treasury inflation-indexed bonds. For bonds that do not provide a similar
guarantee, the adjusted principal value of the bond repaid at maturity may be
less than the original principal. The value of inflation-indexed bonds is
expected to change in response to changes in real interest rates. Real interest
rates are tied to the relationship between nominal interest rates and the rate
of inflation. If nominal interest rates increase at a faster rate than
inflation, real interest rates may rise, leading to a decrease in value of
inflation-indexed bonds. Inflation-indexed bonds, including TIPS, decline in
value when real interest rates rise. In certain interest rate environments, such
as when real interest rates are rising faster than nominal interest rates,
inflation-indexed bonds may experience greater losses than other fixed income
securities with similar durations.
CREDIT DEFAULT SWAPS
Certain Funds may be subject to credit risk in the normal course of pursuing its
investment objectives. The Fund may enter into credit default swap contracts for
hedging or speculative purposes to provide or receive a measure of protection
against default on a referenced entity, obligation or index or for investment
gains. Credit default swaps involve an exchange of a stream of payments for
protection against the loss in value of an underlying security or index. Under
the terms of the swap, one party acts as a guarantor (referred to as the seller
of protection) and receives a periodic stream of payments, provided that there
is no credit event, from another party (referred to as the buyer of protection)
that is a fixed percentage applied to a notional principal amount over the term
of the swap. An index credit default swap references all the names in the index,
and if a credit event is triggered, the credit event is settled based on that
name's weight in the index. A credit event includes bankruptcy, failure to pay,
obligation default, obligation acceleration, repudiation/ moratorium, and
restructuring. The Fund may enter into credit default swaps as either the seller
of protection or the buyer of protection. As the seller of protection, the Fund
is subject to investment exposure on the notional amount of the swap and has
assumed the risk of default of the underlying security or index. As the buyer of
protection, the Fund could be exposed to risks if the seller of the protection
defaults on its obligation to perform, or if there are unfavorable changes in
the fluctuation of interest rates or in the price of the underlying security or
index. The maximum potential amount of future payments (undiscounted) that the
Fund as the seller of protection could be required to make under the credit
default swap contract would be an amount equal to the notional amount of the
swap contract. The Fund's maximum risk of loss from counterparty risk, either as
the protection seller or as the protection buyer, is the fair value of the
contract. This risk is mitigated by having a master netting arrangement between
the Fund and the counterparty and by having the counterparty post collateral to
cover the Fund's exposure to the counterparty.
126 Wells Fargo Advantage Master Portfolios
Notes to Financial Statements
If the Fund is the seller of protection and a credit event occurs, as defined
under the terms of that particular swap agreement, the Fund will pay to the
buyer of protection the notional amount of the swap and take delivery of the
referenced obligation or underlying securities comprising the referenced index.
If the Fund is the buyer of protection and a credit event occurs, as defined
under the terms of that particular swap agreement, the Fund will receive from
the seller of protection the notional amount of the swap and deliver the
referenced obligation or underlying securities comprising the referenced index.
The value of the swap contract is marked-to-market daily based on quotations
from an independent pricing service or market makers and any change in value is
recorded as an unrealized gain or loss. Periodic payments made or received are
recorded as realized gains or losses. In addition, payments received or made as
a result of a credit event or termination of the contract are recognized as
realized gains or losses.
Certain credit default swap contracts entered into by the Fund provide for
conditions that result in events of default or termination that enable the
counterparty to the agreement to cause an early termination of the transactions
under those agreements. Any election by the counterparty to terminate early may
impact the amounts reported on the financial statements.
STRUCTURED INVESTMENT VEHICLES
The Funds may invest in structured debt securities, such as those issued by
Structured Investment Vehicles ("SIVs"). SIVs invest in a diversified pool of
underlying securities, which may include finance company debt and structured
finance assets, residential mortgage-backed securities, commercial
mortgage-backed securities, collateralized loan obligations, collateralized debt
obligations and other asset backed securities. The ability of a SIV to repay
debt depends primarily on the cash collections received from the SIV's
underlying asset portfolio, which may include certain assets such as subprime
mortgages that are subject to heightened risks of credit quality or market value
deterioration under the continuing adverse conditions in the U.S. credit
markets, and on the ability to obtain short-term funding through the issuance of
new debt. Investments in these securities present increased credit and liquidity
risks as there could be losses to a Fund in the event of credit or market value
deterioration in a SIV's underlying portfolio, mismatches in the timing of the
cash flows of the underlying asset interests and the repayment obligations of
maturing securities issued by a SIV, or a SIV's inability to issue new debt.
As of November 30, 2009, the following Funds owned certain of these types of
structured securities in the amounts shown in the table. These securities were
originally purchased by the Funds' securities lending agent on behalf of the
Funds through a joint account with cash collateral received by the Funds
pursuant to loans of the Funds' securities. Although considered high-quality,
short-term money market instruments when originally purchased by the securities
lending agent through the joint account, the SIVs are now in payment default,
have been restructured following default or are otherwise impaired and are
valued at fair value as shown in the Portfolio of Investments.
Defaulted /Impaired
PORTFOLIO SIVs ($Value) % of Net Assets
- --------- ------------------- ---------------
INFLATION-PROTECTED BOND PORTFOLIO $1,477,067 0.99
MANAGED FIXED INCOME PORTFOLIO 719,150 0.16
STABLE INCOME PORTFOLIO 688,836 0.22
TOTAL RETURN BOND PORTFOLIO 9,260,816 0.36
In a securities lending transaction, the net asset value of a Fund will be
affected by an increase or decrease in the value of the securities loaned and by
an increase or decrease in the value of instruments in which cash collateral is
invested. Thus, the current net asset value of each Fund reflects the current
valuations assigned to the defaulted or impaired SIVs that were purchased on its
behalf through the investment of cash collateral. Declines in the values of
defaulted or impaired SIVs generate unrealized losses for a Fund, which are
reflected in the Fund's Statement of Assets and Liabilities, equal to the
difference between (i) the value of the investments purchased with cash
collateral received for securities loaned and (ii) the amount that would be
payable if the Fund were to recall the loans at period end.
The amount of securities lending activity undertaken by a Fund fluctuates from
time to time. After the occurrence of a default or impairment of a SIV purchased
in a joint account by the securities lending agent, as the various participating
Funds'lending activity fluctuated, their ratable interest in the joint account,
including their ratable exposure to the defaulted
Wells Fargo Advantage Master Portfolios 127
Notes to Financial Statements
or impaired SIVs would fluctuate depending on the relative activity of each
participating Fund. In order to eliminate the fluctuation of the various
Funds'ratable exposure to the defaulted or impaired SIVs, the adviser to the
Funds recommended to the Board of Trustees, and the Board of Trustees approved,
actions designed to fix the allocation of percentage ownership in defaulted or
impaired SIVs among all funds participating in securities lending ("side
pocketing") based on each Fund's percentage ownership of the total cash
collateral investment joint account as of the date the fixed allocation is
implemented. Accordingly, on February 13, 2009 a side pocketing occurred, which
fixed each Fund's ownership of defaulted or impaired SIVs in the joint account
based on each such Fund's percentage ownership of the joint account as of such
date.
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 based on the effective interest method. To the extent debt
obligations are placed on non-accrual status, any related interest income may be
reduced by writing off interest receivables when the collection of all or a
portion of interest has become doubtful based on consistently applied
procedures. If the issuer subsequently resumes interest payments or when the
collectability of interest is reasonably assured, the debt obligation is removed
from non-accrual status.
FEDERAL AND OTHER TAXES
Each Fund of the Trust is treated as a separate entity for federal income tax
purposes. The Funds of the Trust are not required to pay federal income taxes on
their net investment income and net capital gain as they are treated as
partnerships for federal income tax purposes. All interest, dividends, gains and
losses of a Fund are deemed to have been "passed through" to the interestholders
in proportion to their holdings of the Fund regardless of whether such interest,
dividends, or gains have been distributed by the Fund.
Each Fund's income and federal excise tax returns and all financial records
supporting those returns for the prior three fiscal years are subject to
examination by the federal and Delaware revenue authorities.
3. FAIR VALUATION MEASUREMENTS
Fair value measurements in investments are determined within a framework that
has established a fair value hierarchy based upon the various data inputs
utilized in determining the value of the Fund's investments. These inputs are
summarized into three broad levels as follows:
- - Level 1 - quoted prices in active markets for identical investments
- - Level 2 - other significant observable inputs (including quoted prices for
similar investments, interest rates, prepayment speeds, credit risk, etc.)
- - Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in these securities.
The following is a summary of the inputs used as of November 30, 2009 in valuing
the Funds' investments in securities:
Significant
Significant Other Unobservable
Quoted Price Observable Inputs Inputs Total Fair Value
INVESTMENTS IN SECURITIES (Level 1) (Level 2) (Level 3) as of 11/30/2009
- ------------------------- ---------------- ----------------- -------------- ----------------
INFLATION-PROTECTED BOND PORTFOLIO
Corporate debt securities $ 0 $ 2,592,636 $ 1,477,067 $ 4,069,703
Debt securities issued by states in
the U.S. and its political
subdivisions 0 593,103 0 593,103
Debt securities issued by U.S.
Treasury and
U.S. government agencies 148,307,152 0 0 148,307,152
Short-term investments 891,784 709,602 0 1,601,386
$149,198,936 $ 3,895,341 $ 1,477,067 $ 154,571,344
128 Wells Fargo Advantage Master Portfolios
Notes to Financial Statements
Significant
Significant Other Unobservable
Quoted Price Observable Inputs Inputs Total Fair Value
INVESTMENTS IN SECURITIES (Level 1) (Level 2) (Level 3) as of 11/30/2009
- ------------------------- ---------------- ----------------- -------------- ----------------
MANAGED FIXED INCOME PORTFOLIO
Asset-backed securities $ 0 $ 30,978,790 $ 4,163,710 $ 35,142,500
Collateralized mortgage obligations 0 84,004,953 5,322,167 89,327,120
Corporate debt securities 0 143,388,337 719,150 144,107,487
Debt securities issued by foreign
governments 0 3,326,916 0 3,326,916
Debt securities issued by states in the
U.S. and its political subdivisions 0 52,308,515 3,915,821 56,224,336
Debt securities issued by U.S. Treasury
and U.S. government agencies 23,787,208 48,839,267 17,827,598 90,454,073
Short-term investments 20,062,611 463,494 0 20,526,105
$ 43,849,819 $ 363,310,272 $ 31,948,446 $ 439,108,537
STABLE INCOME PORTFOLIO
Asset backed securities $ 0 $ 52,427,652 $ 11,688,775 $ 64,116,427
Collateralized mortgage obligations 0 78,122,862 1,979,699 80,102,561
Corporate debt securities 0 41,975,388 688,836 42,664,224
Debt securities issued by foreign
governments 0 3,341,010 0 3,341,010
Debt securities issued by states in the
U.S. and its political subdivisions 0 15,452,530 0 15,452,530
Debt securities issued by U.S. Treasury
and U.S. government agencies 0 77,064,293 0 77,064,293
Short-term investments 18,211,574 313,275 0 18,524,849
$ 18,211,574 $ 268,697,010 $ 14,357,310 $ 301,265,894
TOTAL RETURN BOND PORTFOLIO
Asset backed securities $ 0 $ 182,532,596 $ 2,105,023 $ 184,637,619
Collateralized mortgage obligations 0 581,598,294 14,470,857 596,069,151
Corporate debt securities 0 660,354,074 9,260,816 669,614,890
Debt securities issued by foreign
governments 0 111,409,072 0 111,409,072
Debt securities issued by states in the
U.S. and its political subdivisions 0 31,968,463 0 31,968,463
Debt securities issued by U.S. Treasury
and U.S. government agencies 309,107,357 902,910,169 6,975,841 1,218,993,367
Short-term investments 210,803,919 26,416,729 0 237,220,648
$519,911,276 $2,497,189,397 $ 32,812,537 $3,049,913,210
Further details on the major security types listed above for each fund can be
found in the Portfolio of Investments. The following is a summary of the inputs
used as of November 30, 2009 in valuing the Funds' investments in securities:
Total
Unrealized
Appreciation/
(Level 1) (Level 2) (Level 3) (Depreciation)
--------- --------- --------- --------------
INFLATION-PROTECTED BOND PORTFOLIO $ 0 $ 0 $0 $ 0
MANAGED FIXED INCOME PORTFOLIO 278,026 0 0 278,026
STABLE INCOME PORTFOLIO 0 0 0 0
TOTAL RETURN BOND PORTFOLIO 0 (664,444) 0 (664,444)
* Other financial instrument includes futures, sale commitments & credit
default swaps.
Wells Fargo Advantage Master Portfolios 129
Notes to Financial Statements
The following is a reconciliation of investments in which significant
unobservable inputs (Level 3) were used in determining value:
Inflation- Managed
Protected Fixed Stable Total
Bond Income Income Return Bond
Portfolio Portfolio Portfolio Portfolio
---------- ----------- ----------- -----------
ASSET-BACKED SECURITIES
Balance as of 05/31/2009 $ 0 $ 4,045,090 $16,236,619 $ 0
Accrued discounts (premiums) 0 0 0 0
Realized gain (loss) 0 0 0 0
Change in unrealized appreciation
(depreciation) 0 118,620 (4,547,844) 0
Net purchases (sales) 0 0 0 2,105,023
Net transfer in (out) of Level 3 0 0 0 0
Balance as of 11/30/2009 $ 0 $ 4,163,710 $11,688,775 $ 2,105,023
COLLATERALIZED MORTGAGE OBLIGATIONS
Balance as of 05/31/2009 $ 0 $ 687,039 $ 658,055 $ 3,327,710
Accrued discounts (premiums) 0 0 0 0
Realized gain (loss) 0 0 0 0
Change in unrealized appreciation
(depreciation) 0 (348,846) 6,156 448,680
Net purchases (sales) 0 0 0 10,694,467
Net transfer in (out) of Level 3 0 4,983,974 1,315,488 0
Balance as of 11/30/2009 $ 0 $ 5,322,167 $ 1,979,699 $14,470,857
CORPORATE DEBT SECURITIES:
Balance as of 05/31/2009 $1,296,489 $ 2,734,268 $604,622 $ 8,128,651
Accrued discounts (premiums) 0 0 0 0
Realized gain (loss) (947,942) (1,323,247) (894,978) (6,848,645)
Change in unrealized appreciation
(depreciation) 1,299,799 1,494,558 1,059,068 9,054,701
Net purchases (sales) (171,279) (83,392) (79,876) (1,073,891)
Net transfer in (out) of Level 3 0 (2,103,037) 0 0
Balance as of 11/30/2009 $1,477,067 $ 719,150 $ 688,836 $ 9,260,816
DEBT SECURITIES ISSUED BY STATES IN THE
U.S. AND ITS POLITICAL SUBDIVISIONS
Balance as of 05/31/2009 $ 0 $ 6,200,925 $ 1,924,153 $ 0
Accrued discounts (premiums) 0 0 0 0
Realized gain (loss) 0 0 0 0
Change in unrealized appreciation
(depreciation) 0 (2,285,104) 0 0
Net purchases (sales) 0 0 0 0
Net transfer in (out) of Level 3 0 0 (1,924,153) 0
Balance as of 11/30/2009 $ 0 $ 3,915,821 $ 0 $ 0
Inflation- Managed
Protected Fixed Stable Total
Bond Income Income Return Bond
Portfolio Portfolio Portfolio Portfolio
---------- ----------- ----------- -----------
DEBT SECURITIES ISSUED BY U.S. TREASURY
AND U.S. GOVERNMENT AGENCIES
Balance as of 05/31/2009 $ 0 $ 3,087,300 $ 0 $12,824,684
Accrued discounts (premiums) 0 0 0 0
Realized gain (loss) 0 0 0 0
Change in unrealized appreciation
(depreciation) 0 0 0 0
130 Wells Fargo Advantage Master Portfolios
Notes to Financial Statements
Inflation- Managed
Protected Fixed Stable Total
Bond Income Income Return Bond
Portfolio Portfolio Portfolio Portfolio
---------- ----------- ----------- -----------
Net purchases (sales) 0 14,740,298 0 0
Net transfer in (out) of Level 3 0 0 0 (5,848,843)
Balance as of 11/30/2009 $ 0 $17,827,598 $ 0 $ 6,975,841
BALANCE AS OF 11/30/2009 $1,477,067 $31,948,446 $14,357,310 $32,812,537
Change in unrealized appreciation
(depreciation) relating to
securities held at the end of
reporting period Asset backed
securities $ 0 $ 118,620 $(4,547,844) $ 0
Collateralized mortgage obligations 0 (348,846) 6,156 448,680
Corporate debt securitites 61,482 29,934 28,673 385,478
Debt securities issued by states in the
U.S. and its political subdivisions 0 (2,285,104) 0 0
Debt securities issued by U.S. Treasury
and U.S. government agencies 0 0 0 0
4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES
ADVISORY FEES
The Trust has entered into an advisory contract with Wells Fargo Funds
Management, LLC ("Funds Management"). The adviser is responsible for
implementing investment policies and guidelines and for supervising the
sub-adviser, who is responsible for day-to-day portfolio management.
Pursuant to the contract, Funds Management is entitled to receive an advisory
fee for its services as adviser at the following annual rates for each Fund:
Advisory Fees
Average Daily (% of Average
Net Assets Daily Net Assets)
- ------------------ -----------------
First $500 million 0.400
Next $500 million 0.375
Next $2 billion 0.350
Next $2 billion 0.325
Over $5 billion 0.300
Funds Management may retain the services of certain investment sub-advisers to
provide daily portfolio management. The fees related to sub-advisory services
are borne directly by the adviser and do not increase the overall fees paid by a
Fund to the adviser.
Wells Capital Management Incorporated, an affiliate of Funds Management and
indirect wholly owned subsidiary of Wells Fargo & Company, is the sub-adviser to
Inflation-Protected Bond Portfolio and Total Return Bond Portfolio.
Galliard Capital Management Incorporated, an affiliate of Funds Management and
indirect wholly owned subsidiary of Wells Fargo & Company, is the sub-adviser to
Managed Fixed Income Portfolio and Stable Income Portfolio.
Funds Management has contractually waived advisory fees during the six months
ended November 30, 2009 to the extent necessary to maintain certain net
operating expense ratios for the Funds. Expenses were waived by Funds Management
proportionately from all classes, first from advisory fees, and then from any
class specific expenses, if applicable.
CUSTODY AND FUND ACCOUNTING FEES
The Funds have entered into a contract with State Street Bank and Trust Company
("State Street"), whereby State Street is responsible for providing custody
services and fund accounting services to the Funds (the "Custody and Fund
Accounting Agreement.") Pursuant to the Custody and Fund Accounting Agreement,
State Street is entitled to an annual asset-based
Wells Fargo Advantage Master Portfolios 131
Notes to Financial Statements
fee for domestic and global custody services for the Funds. Also pursuant to the
Custody and Fund Accounting Agreement, State Street is entitled to receive
annual asset-based fees for providing fund accounting services to the Funds.
Prior to November 14, 2009, WFB was responsible for providing custody services
to the Funds and was entitled to a monthly fee for custody services at an annual
rate of 0.02% of the average daily net assets of each Fund. PNC Global
Investment Servicing ("PNC") served as fund accountant for the Trust prior to
November 14, 2009 and received an annual asset-based fee and an annual fixed fee
from each Fund. PNC was also reimbursed for all out-of-pocket expenses
reasonably incurred in providing these services.
5. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, exclusive of short-term securities
(securities with maturities of one year or less at purchase date) for the six
months period ended November 30, 2009, were as follows:
Purchases
at Cost Sales Proceeds
-------------- --------------
INFLATION-PROTECTED BOND PORTFOLIO $ 18,614,134 $ 22,804,366
MANAGED FIXED INCOME PORTFOLIO 180,256,308 262,074,417
STABLE INCOME PORTFOLIO 16,760,979 33,939,208
TOTAL RETURN BOND PORTFOLIO 7,311,273,927 6,684,510,657
6. DERIVATIVE TRANSACTIONS
During the six months ended November 30, 2009, the Fund entered into futures
contracts for hedging and speculative purposes.
At November 30, 2009, the following Funds had long futures contracts outstanding
as follows:
Net
Initial Value at Unrealized
Contract November 30, Appreciation/
Expiration Contracts Type Value 2009 (Depreciation)
---------- --------- ---------------- ----------- ------------ --------------
MANAGED FIXED INCOME
PORTFOLIO Mar 2010 112 US Treasury Bond $13,466,474 $13,744,500 $278,026
Managed Fixed Income Portfolio had an average contract amount of $18,350,947 in
futures contracts during the six months ended November 30, 2009.
Total Return Bond Portfolio enters into credit default swap contracts as a
substitute for taking a position in the underlying security or basket of
securities or to potentially enhance the Fund's total return. At November 30,
2009, Total Return Bond Portfolio had the following credit default swap
contracts outstanding:
Credit default swaps on debt obligations - Buy protection
Rating of Fixed Frequency Upfront
Reference Payments of Premium
Debt Notional Made by Payments Market Paid/ Unrealized
Expiration Counterparty Reference Debt Obligation Obligation* Amount the Fund Made Value (Received) Gain/(Loss)
- ---------- ---------------- -------------------------- ----------- ---------- -------- --------- ---------- ---------- -----------
3/20/2014 JPMorgan Chase Century Tel, Incorporated,
6.00%, 04/01/2017** Baa3 $5,000,000 1.13% Quarterly $4,948,671 $ 0 $(51,329)
3/20/2014 Bank of America McDonald's Corporation,
4.125%, 06/01/2013** A3 2,500,000 0.60% Quarterly 2,481,436 0 (18,564)
3/20/2014 Barclays Capital Yum! Brands Incorporated,
6.25%, 03/15/2018** Baa3 2,500,000 1.08% Quarterly 2,471,472 0 (28,528)
9/20/2014 Barclays Capital Century Tel, Incorporated,
6.25%, 04/01/2017** Baa3 5,000,000 1.00% Quarterly 5,024,860 7,958 16,902
12/20/2014 JPMorgan Chase Weatherford International,
4.95%, 10/15/2013 Baa1 5,000,000 1.00% Quarterly 5,049,000 48,999 1
132 Wells Fargo Advantage Master Portfolios
Notes to Financial Statements
Credit default swaps on debt obligations - Sell protection
Fixed
Rating of Payments Frequency Upfront
Reference Received of Premium
Debt Notional by Payments Market Paid/ Unrealized
Expiration Counterparty Reference Debt Obligation Obligation Amount the Fund Received Value (Received) Gain/(Loss)
- ---------- ---------------- ------------------------- ---------- ---------- -------- --------- ---------- ---------- -----------
3/20/2014 Bank of America Verizon Corporation,
7.375%, 11/15/2013** A2 $5,000,000 1.25% Quarterly $5,113,738 $ 0 $113,738
3/20/2014 Barclays Capital Wal-Mart Stores
Incorporated,
5.875%, 04/05/2027** Aa2 5,000,000 0.98% Quarterly 5,081,417 0 81,417
9/20/2014 Barclays Capital Embarq Corporation,
7.082%, 06/01/2016** Baa3 5,000,000 1.00% Quarterly 4,962,708 8,679 (45,971)
12/20/2014 Barclays Capital Kinder Morgan
Energy Partners,
5.00%, 12/15/2013 Baa2 5,000,000 1.00% Quarterly 4,889,509 (110,488) (3)
* Reflects the ratings of a nationally recognized ratings agency at period
end. A rating of D would most likely indicate a trigger event of default
has occurred although circumstances including bankruptcy, failure to pay,
obligation default, obligation acceleration, repudiation/moratorium and
restructuring may also cause a credit event to take place.
** The Fund entered into the swap contract to gain and hedge credit exposures.
The total notional amount of credit default swaps in the tables above is
representative of the average volume of derivative activity during the six
months ended November 30, 2009.
7. INDEMNIFICATION
Under the Trust's organizational documents, the 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.
Wells Fargo Advantage Income Funds 133
Other Information
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.
PORTFOLIO HOLDINGS INFORMATION
The complete portfolio holdings for each Fund, except money market funds, are
publicly available on the Funds' Web site (www.wellsfargo.com/advantagefunds) on
a monthly, 30-day or more delayed basis, and for money market funds, on a
monthly, seven-day 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") and Officers of the
Trust. This table should be read in conjunction with the Prospectus and the
Statement of Additional Information(1) of each Fund. Each of the Trustees and
Officers listed below acts in identical capacities for each of the 133 funds
comprising the Trust, Wells Fargo Variable Trust and Wells Fargo Master Trust
(collectively the "Fund Complex"), except that the person occupying the office
of Treasurer varies for specified Funds. All of the Trustees are also Members of
the Audit and Governance Committees of each Trust in the Fund Complex. The
mailing 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.
INDEPENDENT TRUSTEES
Position Held and
Name and Age Length of Service(2) Principal Occupations During Past Five Years Other Directorships
- ------------ ------------------------- ---------------------------------------------------------- -------------------
Peter G. Gordon Trustee, since 1998; Co-Founder, Chairman, President and CEO of Crystal Geyser. None
67 Chairman, since 2005 Water Company.
(Lead Trustee since 2001)
Isaiah Harris, Jr. Advisory Board Retired. Prior thereto, President and CEO of CIGNA Corporation;
57 Trustee, since 2008 BellSouth Advertising and Publishing Corp from 2005 Deluxe Corporation
to 2007, President and CEO of BellSouth Enterprises
from 2004 to 2005 and President of BellSouth Consumer
Services from 2000 to 2003. Currently a member of the
Iowa State University Foundation Board of Governors
and a member of the Advisory Board of Iowa State
University School of Business.
Judith M. Johnson Trustee, since 2008 Retired. Prior thereto, Chief Executive Officer and None
60 Chief Investment Officer of Minneapolis Employees
Retirement Fund from 1996 to 2008. Ms. Johnson is a
certified public accountant and a certified
managerial accountant.
David F. Larcker Advisory Board James Irvin Miller Professor of Accounting at the None
59 Trustee, since 2008 Graduate School of Business, Stanford University,
Director of Corporate Governance Research Program and
Co-Director of The Rock Center for Corporate
Governance since 2006. From 2005 to 2008, Professor
of Accounting at the Graduate School of Business,
Stanford University. Prior thereto, Ernst & Young
Professor of Accounting at The Wharton School,
University of Pennsylvania from 1985 to 2005.
134 Wells Fargo Advantage Income Funds
Other Information (Unaudited)
Position Held and
Name and Age Length of Service(2) Principal Occupations During Past Five Years Other Directorships
- ------------ ------------------------- ---------------------------------------------------------- -------------------
Olivia S. Mitchell Trustee, since 2006 Professor of Insurance and Risk Management, Wharton None
56 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 President and CEO of Southern Minnesota Initiative None
58 Foundation, a non-profit organization, since 2007 and
Senior Fellow at the Humphrey Institute Policy Forum
at the University of Minnesota since 1995. Member of
the Board of Trustees of NorthStar Education Finance,
Inc., a non-profit organization, since 2007.
Donald C. Willeke Trustee, since 1996 Principal of the law firm of Willeke & Daniels. None
69 General Counsel of the Minneapolis Employees
Retirement Fund from 1984 to present.
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. None
50 and 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
49 Chief Legal Counsel, Funds Management, LLC since 2001. Vice President and
since 2003 Managing Senior Counsel of Wells Fargo Bank, N.A.
since 1996.
Kasey Phillips(3) Treasurer, since 2009 Senior Vice President of Evergreen Investment None
38 Management Company, LLC since 2006 and currently the
Treasurer of the Evergreen Funds since 2005. Vice
President and Assistant Vice President of Evergreen
Investment Services, Inc. from 1999 to 2006.
David Berardi(4) Assistant Treasurer, Vice President of Evergreen Investment Management None
34 since 2009 Company, LLC since 2008. Assistant Vice President of
Evergreen Investment Services, Inc. from 2004 to
2008. Manager of Fund Reporting and Control for
Evergreen Investment Management Company, LLC since
2004.
Jeremy DePalma(4) Assistant Treasurer, Senior Vice President of Evergreen Investment None
35 since 2009 Management Company, LLC since 2008. Vice President,
Evergreen Investment Services, Inc. from 2004 to
2007. Assistant Vice President, Evergreen Investment
Services, Inc. from 2000 to 2004 and the head of the
Fund Reporting and Control Team within Fund
Administration since 2005.
Debra Ann Early Chief Compliance Officer, Chief Compliance Officer of Wells Fargo Funds None
45 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.) Effective November 1, 2009.
(4.) Treasurer during the period from June 1, 2009 to October 31, 2009.
Assistant Treasurer effective November 1, 2009.
Wells Fargo Advantage Income Funds 135
List of Abbreviations
The following is a list of common abbreviations for terms and entities which may
have appeared in this report.
ABAG -- Association of Bay Area Governments
ADR -- American Depositary Receipt
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Alternative Minimum Tax
ARM -- Adjustable Rate Mortgages
BART -- Bay Area Rapid Transit
CDA -- Community Development Authority
CDO -- Collateralized Debt Obligation
CDSC -- Contingent Deferred Sales Charge
CGIC -- Capital Guaranty Insurance Company
CGY -- Capital Guaranty Corporation
CIFG -- CDC (Caisse des Depots et Consignations) IXIS Financial Guarantee
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
ETF -- Exchange-Traded Fund
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
FSA -- Farm Service Agency
GDR -- Global Depositary Receipt
GNMA -- Government National Mortgage Association
GO -- General Obligation
HCFR -- Healthcare Facilities Revenue
HEFA -- Health & Educational Facilities Authority
HEFAR -- Higher Education Facilities Authority Revenue
HFA -- Housing Finance Authority
HFFA -- Health Facilities Financing Authority
HUD -- Housing & Urban Development
IDA -- Industrial Development Authority
IDAG -- Industrial Development Agency
IDR -- Industrial Development Revenue
LIBOR -- London Interbank Offered Rate
LLC -- Limited Liability Company
LOC -- Letter of Credit
LP -- Limited Partnership
MBIA -- Municipal Bond Insurance Association
MFHR -- Multi-Family Housing Revenue
MMD -- Municipal Market Data
MTN -- Medium Term Note
MUD -- Municipal Utility District
NATL-RE -- National Public Finance Guarantee Corporation
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
SPDR -- Standard & Poor's Depositary Receipts
STIT -- Short-Term Investment Trust
TBA -- To Be Announced
TRAN -- Tax Revenue Anticipation Notes
USD -- Unified School District
XLCA -- XL Capital Assurance
THIS PAGE IS INTENTIONALLY LEFT BLANK.
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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 Barclays Capital Bond Indexes,
which are published by Barclays Capital 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 Barclays Capital, and
neither Dow Jones nor Barclays Capital 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 Barclays Capital
Bond Indexes. IN NO EVENT SHALL DOW JONES, BARCLAYS CAPITAL 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.
Source: MSCI. MSCI makes no express or implied warranties or representations and
shall have no liability whatsoever with respect to any MSCI data contained
herein. The MSCI data may not be further redistributed or used as a basis for
other indices or any securities or financial products. This report is not
approved, reviewed or produced by MSCI.
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.
(GRAPHIC)
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE Printed on Recycled paper
(C) 2010 Wells Fargo Funds Management, LLC. All rights reserved.
www.wellsfargo.com/advantagefunds
119292 01-10
SILD/SAR103 11-09
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(WELLS FARGO ADVANTAGE FUNDS LOGO)
Semi-Annual Report
November 30, 2009
WELLS FARGO ADVANTAGE INCOME FUNDS
- - Wells Fargo Advantage Government Securities Fund
- - Wells Fargo Advantage High Income Fund
- - Wells Fargo Advantage Short-Term Bond Fund
- - Wells Fargo Advantage Short-Term High Yield Bond Fund
- - Wells Fargo Advantage Ultra Short-Term Income Fund
Contents
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www.wellsfargo.com/advantagedelivery
LETTER TO SHAREHOLDERS .................................................... 2
PERFORMANCE HIGHLIGHTS
Government Securities Fund ................................................ 6
High Income Fund .......................................................... 8
Short-Term Bond Fund ...................................................... 10
Short-Term High Yield Bond Fund ........................................... 12
Ultra Short-Term Income Fund .............................................. 14
FUND EXPENSES ............................................................. 16
PORTFOLIO OF INVESTMENTS
Government Securities Fund ................................................ 19
High Income Fund .......................................................... 28
Short-Term Bond Fund ...................................................... 38
Short-Term High Yield Bond Fund ........................................... 49
Ultra Short-Term Income Fund .............................................. 56
FINANCIAL STATEMENTS
Statements of Assets and Liabilities ...................................... 68
Statements of Operations .................................................. 70
Statements of Changes in Net Assets ....................................... 72
Financial Highlights ...................................................... 78
NOTES TO FINANCIAL STATEMENTS ............................................. 84
OTHER INFORMATION ......................................................... 97
LIST OF ABBREVIATIONS ..................................................... 99
NOT FDIC INSURED - NO BANK GUARANTEE - MY LOSE VALUE
(GRAPHIC)
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 110 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)
Wells Fargo Advantage Funds skillfully guides institutions, financial advisors,
and individuals through the investment terrain to help them reach their
financial objectives. Everything we do on behalf of our investors is backed by
our unique combination of qualifications.
STRENGTH
Our organization is built on the standards of integrity and service established
by our parent company--Wells Fargo & Company--more than 150 years ago. Our
diverse family of mutual funds covers a broad spectrum of investment styles and
asset classes. And, because we're part of a widely diversified financial
enterprise, we offer the scale and resources to help investors succeed,
providing access to complementary solutions such as separately managed accounts,
college investing plans, and retirement plans.
EXPERTISE
Our approach to investing is guided by the belief that agile, independent
investment teams--each with its own distinct strengths and disciplines--provide
a superior level of insight and expertise. Each team is free to concentrate on
managing money through well-defined philosophies and processes that have proven
to be consistent and repeatable over time.
PARTNERSHIP
Our collaborative approach is built around understanding the needs and goals of
our clients. By adhering to core principles of sound judgment and steady
guidance, we support you through every stage of the investment decision process.
FOR 529 PLANS, AN INVESTOR'S OR A DESIGNATED BENEFICIARY'S HOME STATE MAY OFFER
STATE TAX OR OTHER BENEFITS THAT ARE ONLY AVAILABLE FOR INVESTMENTS IN THAT
STATE'S QUALIFIED TUITION PROGRAM. PLEASE CONSIDER THIS BEFORE INVESTING.
CAREFULLY CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES
BEFORE INVESTING. FOR A CURRENT PROSPECTUS FOR WELLS FARGO ADVANTAGE FUNDS OR A
CURRENT PROGRAM DESCRIPTION FOR CERTAIN 529 COLLEGE SAVINGS PLANS, CONTAINING
THIS AND OTHER INFORMATION, VISIT WWW.WELLSFARGO.COM/ADVANTAGEFUNDS. READ IT
CAREFULLY BEFORE INVESTING.
Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo &
Company, provides investment advisory and administrative services for Wells
Fargo Managed Account Services and Wells Fargo Advantage Funds(R) and to certain
529 college savings plans. Other affiliates of Wells Fargo & Company provide
subadvisory and other services for the Funds. The Funds and shares in the 529
plans are distributed by WELLS FARGO FUNDS DISTRIBUTOR, LLC, Member FINRA/SIPC,
an affiliate of Wells Fargo & Company.
NOT FDIC INSURED - NO BANK GUARANTEE - MY LOSE VALUE
NOT PART OF THE SEMI-ANNUAL REPORT.
WELLS FARGO ADVANTAGE FUNDS OFFERS MORE THAN 110 MUTUAL FUNDS ACROSS A WIDE
RANGE OF ASSET CLASSES, REPRESENTING OVER $170 BILLION IN ASSETS UNDER
MANAGEMENT, AS OF NOVEMBER 30, 2009.
EQUITY FUNDS
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
Emerging Growth Fund
Emerging Markets Equity Fund
Endeavor Select Fund+
Enterprise Fund+
Equity Income Fund
Equity Value 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
Large Company Value Fund
Mid Cap Disciplined Fund
Mid Cap Growth Fund
Opportunity 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
Social Sustainability Fund+
Specialized Financial Services Fund
Specialized Technology Fund
U.S. Value Fund
BOND FUNDS
California Limited-Term Tax-Free Fund
California Tax-Free Fund
Colorado Tax-Free Fund
Diversified Bond Fund
Government Securities Fund(1)
High Income Fund
Income Plus Fund
Inflation-Protected Bond Fund
Intermediate Tax/AMT-Free Fund
Minnesota Tax-Free Fund
Municipal Bond 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
Wisconsin Tax-Free Fund
ASSET ALLOCATION FUNDS
Aggressive Allocation Fund
Asset Allocation Fund
Conservative Allocation Fund
Growth Balanced Fund
Moderate Balanced Fund
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
100% Treasury Money Market Fund(1)
California Municipal Market Fund
California Municipal 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)
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.
(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.
+ In this report, the WELLS FARGO ADVANTAGE DISCOVERY FUND(SM), WELLS FARGO
ADVANTAGE ENDEAVOR SELECT FUND(SM), WELLS FARGO ADVANTAGE ENTERPRISE
FUND(SM), WELLS FARGO ADVANTAGE OPPORTUNITY FUND(SM), WELLS FARGO ADVANTAGE
SOCIAL SUSTAINABILITY FUND(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER
CONSERVATIVE ALLOCATION PORTFOLIO(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER
EQUITY PORTFOLIO(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER GROWTH ALLOCATION
PORTFOLIO(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER GROWTH BALANCED
PORTFOLIO(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER MODERATE BALANCED
PORTFOLIO(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER TACTICAL EQUITY
PORTFOLIO(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET TODAY FUND(SM), WELLS
FARGO ADVANTAGE DOW JONES TARGET 2010 FUND(SM), WELLS FARGO ADVANTAGE DOW
JONES TARGET 2015 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2020
FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2025 FUND(SM), WELLS FARGO
ADVANTAGE DOW JONES TARGET 2030 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES
TARGET 2035 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2040 FUND(SM),
WELLS FARGO ADVANTAGE DOW JONES TARGET 2045 FUND(SM), WELLS FARGO ADVANTAGE
DOW JONES TARGET 2050 FUND(SM), WELLS FARGO ADVANTAGE HERITAGE MONEY MARKET
FUND(SM), WELLS FARGO ADVANTAGE OVERLAND EXPRESS SWEEP FUND(SM), WELLS
FARGO ADVANTAGE VT DISCOVERY FUND(SM), AND WELLS FARGO ADVANTAGE VT
OPPORTUNITY FUND(SM) are referred to as the Discovery Fund, Endeavor Select
Fund, Enterprise Fund, Opportunity Fund, Social Sustainability Fund,
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, Target 2010
Fund, Target 2015 Fund, Target 2020 Fund, Target 2025 Fund, Target 2030
Fund, Target 2035 Fund, Target 2040 Fund, Target 2045 Fund, Target 2050
Fund, Heritage Money Market Fund, Overland Express Sweep Fund, VT Discovery
Fund, and VT Opportunity Fund, respectively.
Not part of the semi-annual report.
2 Wells Fargo Advantage Income Funds
Letter to Shareholders
(PHOTO OF KARLA M. RABUSCH)
KARLA M. RABUSCH,
President
Wells Fargo Advantage Funds
IN GENERAL, FIXED-INCOME SECURITIES THAT PERFORMED THE WORST DURING THE CREDIT
CRISIS OF 2008 PERFORMED THE BEST OVER THE RECENT SIX-MONTH PERIOD, OFFERING
INVESTORS ATTRACTIVE RETURNS IN SEVERAL FIXED-INCOME ASSET CLASSES.
DEAR VALUED SHAREHOLDER,
We are pleased to offer you this semi-annual report for the Wells Fargo
Advantage Income Funds that covers the six-month period that ended November 30,
2009. During the recent six-month period, fixed-income markets continued to show
strong signs of improvement, resulting in positive returns in nearly every
sector of the bond markets. In general, fixed-income securities that performed
the worst during the credit crisis of 2008 performed the best over the recent
six-month period, offering investors attractive returns in several fixed-income
asset classes.
The most notable returns among fixed-income asset classes came from the
lower-quality credit sectors, as investor confidence strengthened throughout
2009 and continued throughout the recent six-month period. As such, the riskier
areas of the fixed-income markets provided some of the best returns. High-yield
bonds performed strongly, with CCC-rated1 securities providing some of the
highest returns over the six-month period, and AAA-rated1 securities producing
some of the lowest returns. U.S. Treasuries also offered positive returns;
however, they were the lowest-performing sector of the fixed-income markets
during the six-month period. Markets ended the period with a considerable
improvement in investor confidence and in the overall health of the credit
system, compared with the cautious and somewhat hesitant optimism from earlier
in the year. Fixed-income investors were generally rewarded well for their risk
appetites over the six-month period. As the period came to a close, investors
appeared less concerned with the risks of a deepening recession and more focused
on the potential for increasing interest rates in the upcoming year.
GOVERNMENT INTERVENTIONS INSPIRE STRONG PERFORMANCE IN THE FIXED-INCOME MARKETS.
In the early months of 2009, concerns over deflationary pressures were rampant.
Investors were still wary of market risks, deepening economic declines, and
whether government interventions would be effective in bolstering the financial
system. The deflationary sentiments appeared to diminish after the March 18
meeting of the Federal Open Market Committee (FOMC), in which the committee
indicated quite demonstratively that the Fed intended to deploy every available
resource to pump liquidity into the financial system until the United States is
satisfactorily through this recessionary cycle. Consequently, inflation
expectations began to increase, and investors looked toward the beginning of an
expansionary cycle. Whether economic conditions would improve in the near term
was not as important to the markets as the basic understanding that they would
likely not get any worse. With this understanding, suddenly several securities
that had been priced for the worst-case scenarios became attractively
undervalued in the assessment of many investors. Both equity markets and
non-U.S. Treasury fixed-income markets rallied for the better part of remainder
of 2009.
With government intervention providing sturdier ground for the financial system,
equity prices in several financial institutions also recovered dramatically,
which bolstered confidence in the overall financial system and improved
corporate bond pricing. This restoration of confidence proved to be an essential
component of the broader equity and fixed-income rallies. Once investors trusted
that financial companies were not going to slide into insolvency, the prospects
for a broader economic recovery could begin to take root. The six-month period
that
Wells Fargo Advantage Income Funds 3
Letter to Shareholders
ended November 30, 2009, saw continued strengthening of the improving credit
market conditions that began in the spring of 2009. The high-yield market
continued to perform strongly over the period, building on the confidence in
riskier assets that began in the first quarter. Investment strategies that
favored riskier securities generally outperformed strategies that preferred
higher-quality assets. Thus, investors most willing to add risk to their
portfolios were rewarded the most. The CCC-rated1 credit tier of the Barclays
Capital U.S. High Yield Index returned 32% during the six-month period, while
the BB-rated1 credit tier returned 16%. In the investment-grade fixed-income
markets, yields were correspondingly lower in each respectively higher credit
tier. The A-rated1 credit tier of the Barclays Capital U.S. Aggregate Index
returned 12% over the six-month period, while the AA-rated1 tier returned 9% and
the AAA-rated1 tier returned 4%. Thus, even returns in the highest-grade sectors
were generally far more generous than the low-interest-rate environment of 0.00%
to 0.25% would suggest. In view of those steady, low interest rates, returns of
more than 4% over the six-month period were considerably strong.
INVESTOR SENTIMENTS ARE MUCH IMPROVED FROM A YEAR AGO.
Investor confidence appeared to strengthen during the six-month period,
particularly through the final months of the summer and into the fall of 2009.
Thus, the month of September in 2009 looked quite different from September 2008,
when last year's credit crisis erupted. Performance over the six-month period
was a strong indication of just how far markets have recovered from the 2008
credit crisis. Markets have not only found steadier footing and stabilized, they
have substantially improved. Last year's risk aversion was roundly replaced by a
stronger appetite for risk in 2009. But with the end of summer and the arrival
of fall comes the seasonal task of measuring the summer's yield. Much of the
strong returns in fixed-income markets were inspired by extensive government
intervention in the form of stimulus programs and monetary-easing measures. This
cannot go on indefinitely. The next question in most investors' minds is what
the economic landscape will look like when these government programs begin to
unwind. That is a primary topic of speculation as we move into a cooler season
and a potentially frostier climate of slowly unwinding monetary and fiscal
accommodation.
It's important to observe that any "normal" year will likely look languid in
comparison with this year's records in performance from high yield and several
other areas of the fixed-income markets. In the mind of many investors, it is
probably unreasonable to expect the same strong levels of performance in
fixed-income markets that investors benefited from in the six-month period to go
on indefinitely. However, this does not necessarily mean that fixed-income
markets will not be able to generate attractive levels of return in a
rising-interest-rate environment. Areas of the fixed-income markets may have to
throttle down a bit in the upcoming quarters but, in our view, may not
completely capitulate to a rising-rate environment. In our opinion, diligent and
earnest assessment of the fundamental risks in individual fixed-income
securities will be a key differentiating factor between which investment
strategies perform well and which do not. At WELLS FARGO ADVANTAGE FUNDS(R), we
intend to continue measuring opportunities in the fixed-income markets and
across our lineup of Wells Fargo Income Funds. We believe it is particularly
important to have diligent investment analysts in charge of investor assets in
changing markets, such as the ones investors have experienced over the
4 Wells Fargo Advantage Income Funds
Letter to Shareholders
last several quarters. As evidenced by the performance of fixed-income assets
during the recent six-month period, heightened risks also often accompany
opportunities. In our view, it is important to have the attentive investment
managers during times of uncertainty and opportunity.
DON'T LET SHORT-TERM VOLATILITY DERAIL LONG-TERM INVESTMENT GOALS.
While periods of volatility can present challenges, experience has taught us
that maintaining a long-term investment strategy based on individual goals and
risk tolerance can be an effective way to plan for the future. As a whole, WELLS
FARGO ADVANTAGE FUNDS represents investments across a broad range of asset
classes and investment styles, giving you an opportunity to create a diversified
investment portfolio. 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 110
Funds that cover a broad spectrum of investment styles and asset classes.
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
- ----------
(1.) The ratings indicated are from Standard & Poor's and/or Moody's Investors
Service. Credit Quality Ratings: Credit quality ratings apply to corporate
and municipal bond issues. Standard and Poor's rates the creditworthiness
of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC
may be modified by the addition of a plus (+) or minus (-) sign to show
relative standing within the rating categories. Moody's rates the
creditworthiness of bonds, ranging from Aaa (highest) to CC (lowest).
Ratings Aa to B may be modified by the addition of a number 1 (highest) to
3 (lowest) to show relative standing within the ratings categories.
THIS PAGE IS INTENTIONALLY LEFT BLANK.
6 Wells Fargo Advantage Income Funds
Performance Highlights
WELLS FARGO ADVANTAGE GOVERNMENT SECURITIES FUND
INVESTMENT OBJECTIVE
THE WELLS FARGO ADVANTAGE GOVERNMENT SECURITIES FUND (the Fund) seeks current
income.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Michael J. Bray, CFA Jay N. Mueller, CFA
FUND INCEPTION
October 29, 1986
PORTFOLIO ALLOCATION(1)
(AS OF NOVEMBER 30, 2009)
(PIE CHART)
Asset Backed Securities (1%)
Cash Equivalents (15%)
Collateralized Mortgage Securities (2%)
Corporate Bonds (2%)
U.S .Treasury Bonds (5%)
U.S. Treasury Notes (16%)
FHLMC (9%)
GNMA (10%)
FNMA (40%)
- ----------
(1.) Portfolio allocation is subject to change and is calculated based on the
total investments of the Fund.
(2.) Class A shares incepted on August 31, 1999. Class B shares incepted on July
18, 2008. Class C shares incepted on December 26, 2002. Effective June 20,
2008, the Advisor Class was renamed Class A and modified to assume the
features and attributes of Class A. Class C shares incepted on December 26,
2002. Performance shown for the Class A shares from August 31, 1999,
through June 20, 2008, includes Advisor Class expenses and is adjusted to
reflect Class A sales charges. Performance shown prior to the inception of
Class A shares reflects the performance of the Investor Class shares,
adjusted to reflect Advisor Class expenses and Class A sales charges.
Performance shown prior to the inception of Class B reflects the
performance of the Class C shares and includes expenses that are not
applicable to and are higher than those of the Class B shares, adjusted to
reflect Class B sales charges. Performance shown prior to the inception of
Class C reflects the performance of the Investor Class shares, adjusted to
reflect Class C sales charges and expenses. Administrator Class shares
incepted on April 11, 2005. Performance shown prior to the inception of the
Administrator Class reflects the performance of the Institutional Class
shares, adjusted to reflect Administrator Class expenses. Performance shown
prior to August 31, 1999, for the Administrator Class shares reflects the
performance of the Investor Class shares, and includes expenses that are
not applicable to and are higher than those of the Administrator Class
shares. Institutional Class shares incepted on August 31, 1999. Performance
shown prior to the inception of the Institutional Class shares reflects the
performance of the Investor Class shares, and includes expenses that are
not applicable to and are higher than those of the Institutional Class
shares.
Wells Fargo Advantage Income Funds 7
Performance Highlights
WELLS FARGO ADVANTAGE GOVERNMENT SECURITIES FUND (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(2) (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
------------------------------------- ------------------------------------- -----------------
GOVERNMENT SECURITIES FUND 6 Months* 1 Year 5 Year 10 Year 6 Months* 1 Year 5 Year 10 Year Gross(3) Net(4)
- -------------------------- --------- ------ ------ ------- --------- ------ ------ ------- -------- ------
Class A (SGVDX) 0.03 4.13 4.34 5.58 4.74 9.04 5.31 6.07 0.92% 0.90%
Class B (WGSBX)** (0.55) 3.24 4.12 5.51 4.45 8.24 4.46 5.51 1.66% 1.65%
Class C (WGSCX) 3.44 7.24 4.46 5.19 4.44 8.24 4.46 5.19 1.67% 1.65%
Administrator Class (WGSDX) 4.94 9.26 5.54 6.42 0.84% 0.70%
Institutional Class (SGVIX) 4.96 9.50 5.76 6.66 0.57% 0.48%
Investor Class (STVSX) 4.81 9.10 5.28 6.16 0.97% 0.95%
Barclays Capital U.S. Aggregate Excluding Credit Bond Index(5) 4.44 8.15 5.60 NA
Barclays Capital Intermediate U.S. Government Bond Index(6) 2.82 3.85 5.25 5.82
* Returns for periods of less than one year are not annualized.
** Class B shares are closed to investment, except in connection with the
reinvestment of any distributions and permitted exchanges.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE -
www.wellsfargo.com/advantagefunds.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 4.50%. FOR CLASS B
SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 5.00%. FOR CLASS C
SHARES THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 1.00%. PERFORMANCE
INCLUDING SALES CHARGES ASSUMES THE SALES CHARGE FOR THE CORRESPONDING TIME
PERIOD. PERFORMANCE SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES
WERE REFLECTED. ADMINISTRATOR CLASS, INSTITUTIONAL CLASS, AND INVESTOR CLASS
SHARES ARE SOLD WITHOUT A FRONT-END SALES CHARGE OR CONTINGENT DEFERRED SALES
CHARGE.
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. Securities issued by U.S. Government agencies or
government-sponsored entities may not be guaranteed by the U.S. Treasury. 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 mortgage- and asset-backed securities risk. Consult the Fund's
prospectus for additional information on these and other risks. The U.S.
Government guarantee applies to certain of the underlying securities and NOT to
shares of the Fund.
- ----------
(3.) Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
(4.) The investment adviser has contractually committed through September 30,
2010, 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.
(5.) The Barclays Capital U.S. Aggregate Excluding Credit Bond Index is composed
of the Barclays Capital U.S. Government Bond Index and the Barclays Capital
U.S. Mortgage-Backed Securities Index and it includes Treasury issues,
agency issues, and mortgage-backed securities. You cannot invest directly
in an Index.
(6.) The Barclays Capital Intermediate U.S. Government Bond Index is an
unmanaged index composed of U.S. Government securities with maturities in
the one- to ten year range, including securities issued by the U.S.
Treasury and U.S. Government agencies. You cannot invest directly in an
Index.
8 Wells Fargo Advantage Income Funds
Performance Highlights
WELLS FARGO ADVANTAGE HIGH INCOME FUND
INVESTMENT OBJECTIVE
THE WELLS FARGO ADVANTAGE HIGH INCOME FUND (the Fund) seeks total return,
consisting of a high level of current income and capital appreciation.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Kevin J. Maas, CFA
Thomas M. Price, CFA
Michael J. Schueller, CFA
FUND INCEPTION
December 28, 1995
CREDIT QUALITY(1)
(AS OF NOVEMBER 30, 2009)
(PIE CHART)
CCC (14%)
Cash (3%)
A (1%)
BBB (3%)
BB/Ba (33%)
B (46%)
- ----------
(1.) The ratings indicated are from Standard & Poor's, Moody's Investors
Service, and/or Fitch Ratings Ltd. Credit Quality Ratings: Credit quality
ratings apply to underlying holdings of the Fund and not the Fund itself.
Standard and Poor's rates the creditworthiness of bonds, ranging from AAA
(highest) to D (lowest). Ratings from A to CCC may be modified by the
addition of a plus (+) or minus (-) sign to show relative standing within
the rating categories. Moody's rates the creditworthiness of bonds, ranging
from Aaa (highest) to CC (lowest). Ratings Aa to B may be modified by the
addition of a number 1 (highest) to 3 (lowest) to show relative standing
within the ratings categories. Fitch rates the creditworthiness of bonds,
ranging from AAA (highest) to D (lowest). Credit quality is subject to
change and is calculated based on the total investments of the Fund.
Wells Fargo Advantage Income Funds 9
Performance Highlights
WELLS FARGO ADVANTAGE HIGH INCOME FUND (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(2) (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
------------------------------------- ------------------------------------- -----------------
HIGH INCOME FUND 6 Months* 1 Year 5 Year 10 Year 6 Months* 1 Year 5 Year 10 Year Gross(3) Net(4)
- ---------------- --------- ------ ------ ------- --------- ------ ------ ------- -------- ------
Class A (SHBAX) 7.33 30.37 3.68 3.53 12.39 36.51 4.63 4.01 1.07% 0.90%
Class B (WFNBX)** 6.97 30.52 3.50 3.58 11.97 35.52 3.84 3.58 1.83% 1.65%
Class C (WFNCX) 10.97 34.50 3.84 3.34 11.97 35.50 3.84 3.34 1.82% 1.65%
Institutional Class (SHYYX) 12.71 36.99 5.11 4.59 0.72% 0.50%
Investor Class (STHYX) 12.33 36.35 4.65 4.14 1.12% 0.95%
Barclays Capital U.S. Corporate High Yield Bond Index(5) 20.80 64.95 6.09 6.49
* Returns for periods of less than one year are not annualized.
** Class B shares are closed to investment, except in connection with the
reinvestment of any distributions and permitted exchanges.
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE -
www.wellsfargo.com/advantagefunds.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 4.50%. FOR CLASS B
SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 5.00%. FOR CLASS C
SHARES THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 1.00%. PERFORMANCE
INCLUDING SALES CHARGES ASSUMES THE SALES CHARGE FOR THE CORRESPONDING TIME
PERIOD. INSTITUTIONAL CLASS AND INVESTOR CLASS SHARES ARE SOLD WITHOUT A
FRONT-END SALES CHARGE OR CONTINGENT DEFERRED SALES CHARGE. THE FUND HAS A
REDEMPTION FEE OF 2.00% DEDUCTED FROM THE NET PROCEEDS OF SHARES REDEEMED OR
EXCHANGED WITHIN 30 DAYS AFTER PURCHASE. PERFORMANCE DATA DOES NOT REFLECT THE
DEDUCTION OF THIS FEE, WHICH, IF REFLECTED, WOULD REDUCE THE PERFORMANCE.
Please keep in mind that high double-digit returns were primarily achieved
during favorable market conditions. You should not expect that such favorable
returns can be consistently achieved. A Portfolio's performance, especially for
very short time periods, should not be the sole factor in making your investment
decision.
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. High-yield securities have a greater risk of default and
tend to be more volatile than higher-rated debt securities. 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.
- ----------
(2.) Class A shares incepted on February 29, 2000. Class B and Class C shares
incepted on July 18, 2008. Effective June 20, 2008, the Advisor Class was
renamed Class A and modified to assume the features and attributes of Class
A. Performance shown for the Class A shares from February 29, 2000, through
June 19, 2008, includes Advisor Class expenses and is adjusted to reflect
Class A sales charges. Performance shown prior to the inception of Class A
shares reflects the performance of the Investor Class shares, adjusted to
reflect Advisor Class expenses and Class A sales charges. Performance shown
prior to the inception of Class B and Class C reflects the performance of
the Class A shares, adjusted to reflect Class B and Class C sales charges
and expenses, as applicable. Institutional Class shares incepted on July
31, 2001. Performance shown prior to the inception of the Institutional
Class shares reflects the performance of the Investor Class shares, and
includes expenses that are not applicable to and are higher than those of
the Institutional Class shares.
(3.) Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
(4.) The investment adviser has contractually committed through September 30,
2010, 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.
(5.) Barclays Capital U.S. Corporate High Yield Bond Index is an unmanaged, U.S.
dollar-denominated, nonconvertible, non-investment grade debt index. The
Index consists of domestic and corporate bonds rated Ba and below with a
minimum outstanding amount of $150 million. You cannot invest directly in
an Index.
10 Wells Fargo Advantage Income Funds
Performance Highlights
WELLS FARGO ADVANTAGE SHORT-TERM BOND FUND
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE SHORT-TERM BOND FUND (the Fund) seeks current income
consistent with capital preservation.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Jay N. Mueller, CFA
Janet J. Rilling, CFA, CPA
FUND INCEPTION
August 31, 1987
PORTFOLIO ALLOCATION(1)
(AS OF NOVEMBER 30, 2009)
(PIE CHART)
U.S Treasury Notes (5%)
Asset Backed Securities (7%)
Collateralized Mortgage Securities (5%)
Cash Equivalents (11%)
Corporate Bonds (52%)
GNMA (2%)
FNMA (5%)
Municipal Bonds (10%)
FHLMC (3%)
- ----------
(1.) Portfolio allocation is subject to change and is calculated based on the
total investments of the Fund.
Wells Fargo Advantage Income Funds 11
Performance Highlights
WELLS FARGO ADVANTAGE SHORT-TERM BOND FUND (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(2) (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
---------------------------------- ---------------------------------- ----------------
SHORT-TERM BOND FUND 6 Months* 1 Year 5 Year 10 Year 6 Months* 1 Year 5 Year 10 Year Gross(3) Net(4)
- -------------------- --------- ------ ------ ------- --------- ------ ------ ------- -------- ------
Class A (SSTVX) 2.76 7.49 3.38 3.40 5.94 10.81 4.01 3.71 0.96% 0.80%
Class C (WFSHX) 4.53 8.79 3.25 3.12 5.53 9.79 3.25 3.12 1.70% 1.55%
Institutional Class (SSHIX) 6.10 11.16 4.39 4.24 0.61% 0.48%
Investor Class (SSTBX) 5.91 10.76 3.98 3.81 1.02% 0.85%
Barclays Capital 1-3 Year
U.S. Government/Credit
Bond Index(5) 2.55 5.73 4.49 4.93
* 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. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE -
www.wellsfargo.com/advantagefunds.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 3.00%. FOR CLASS C
SHARES THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 1.00%. PERFORMANCE
INCLUDING SALES CHARGES ASSUMES THE SALES CHARGE FOR THE CORRESPONDING TIME
PERIOD. INSTITUTIONAL CLASS AND INVESTOR CLASS SHARES ARE SOLD WITHOUT A
FRONT-END SALES CHARGE OR CONTINGENT DEFERRED SALES CHARGE.
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. 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, high-yield securities risk and mortgage- and asset-backed
securities risk. Consult the Fund's prospectus for additional information on
these and other risks.
- ----------
(2.) Class A shares incepted on August 31, 1999. Effective June 20, 2008, the
Advisor Class was renamed Class A and modified to assume the features and
attributes of Class A. Class C shares incepted on March 31, 2008.
Performance shown for the Class A shares from August 31, 1999, through June
19, 2008, includes Advisor Class expenses and is adjusted to reflect Class
A sales charges. Performance shown prior to the inception of Class A shares
reflects the performance of the Investor Class shares, adjusted to reflect
Advisor Class expenses and Class A sales charges. Performance shown prior
to the inception of Class C reflects the performance of the Class A shares,
adjusted to reflect Class C sales charges and expenses. Institutional Class
shares incepted on August 31, 1999. Performance shown prior to the
inception of the Institutional Class shares reflects the performance of the
Investor Class shares, and includes expenses that are not applicable to and
are higher than those of the Institutional Class shares.
(3.) Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
(4.) The investment adviser has contractually committed through September 30,
2010, 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.
(5.) The Barclays Capital 1-3 Year U.S. Government/Credit Bond Index is a subset
of the Barclays Capital U.S. Government/Credit Bond Index that only
includes those securities with maturities between one and three years. The
Barclays Capital U.S. Government/Credit Bond Index includes treasuries
(i.e., publicly issued debt of U.S. Government agencies, quasi-federal
corporations, and corporate or foreign debt guaranteed by the U.S.
Government), and publicly issued U.S. corporate and foreign debentures and
secured notes that meet specified maturity, liquidity, and quality
requirements. You cannot invest directly in an Index.
12 Wells Fargo Advantage Income Funds
Performance Highlights
WELLS FARGO ADVANTAGE SHORT-TERM HIGH YIELD BOND FUND
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE SHORT-TERM HIGH YIELD BOND FUND (the Fund) seeks total
return, consisting of a high level of current income and capital appreciation.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Kevin J. Maas, CFA
Thomas M. Price, CFA
Michael J. Schueller, CFA
FUND INCEPTION
June 30, 1997
CREDIT QUALITY(1)
(AS OF NOVEMBER 30, 2009)
(PIE CHART)
Cash (7%)
BBB (7%)
BB/Ba (67%)
B (19%)
- ----------
(1.) The ratings indicated are from Standard & Poor's, Moody's Investors
Service, and/or Fitch Ratings Ltd. Credit Quality Ratings: Credit quality
ratings apply to underlying holdings of the Fund and not the Fund itself.
Standard and Poor's rates the creditworthiness of bonds, ranging from AAA
(highest) to D (lowest). Ratings from A to CCC may be modified by the
addition of a plus (+) or minus (-) sign to show relative standing within
the rating categories. Moody's rates the creditworthiness of bonds, ranging
from Aaa (highest) to CC (lowest). Ratings Aa to B may be modified by the
addition of a number 1 (highest) to 3 (lowest) to show relative standing
within the ratings categories. Fitch rates the creditworthiness of bonds,
ranging from AAA (highest) to D (lowest). Credit quality is subject to
change and is calculated based on the total investments of the Fund.
Wells Fargo Advantage Income Funds 13
Performance Highlights
WELLS FARGO ADVANTAGE SHORT-TERM HIGH YIELD BOND FUND (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(2) (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
------------------------------------- ------------------------------------- -----------------
SHORT-TERM HIGH YIELD BOND FUND 6 Months* 1 Year 5 Year 10 Year 6 Months* 1 Year 5 Year 10 Year Gross(3) Net(4)
- ------------------------------- --------- ------ ------ ------- --------- ------ ------ ------- -------- ------
Class A (SSTHX) 2.88 13.66 3.34 3.26 6.07 17.18 3.98 3.58 1.14% 0.81%
Class C (WFHYX) 4.66 15.26 3.26 3.00 5.66 16.26 3.26 3.00 1.84% 1.56%
Investor Class (STHBX) 6.04 17.12 3.99 3.69 1.19% 0.86%
Short-Term High Yield Bond
Index III(5) 13.84 47.90 5.98 6.47
B of A Merrill Lynch High Yield
U.S. Corporates, Cash Pay,
BB Rated, 1-5 Year Index(6) 12.33 42.20 5.78 6.13
* 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. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE -
www.wellsfargo.com/advantagefunds.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 3.00%. FOR CLASS C
SHARES THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 1.00%. PERFORMANCE
INCLUDING SALES CHARGES ASSUMES THE SALES CHARGE FOR THE CORRESPONDING TIME
PERIOD. INVESTOR CLASS SHARES ARE SOLD WITHOUT A FRONT-END SALES CHARGE OR
CONTINGENT DEFERRED SALES CHARGE. THE FUND HAS A REDEMPTION FEE OF 2.00%
DEDUCTED FROM THE NET PROCEEDS OF SHARES REDEEMED OR EXCHANGED WITHIN 30 DAYS
AFTER PURCHASE. PERFORMANCE DATA DOES NOT REFLECT THE DEDUCTION OF THIS FEE,
WHICH, IF REFLECTED, WOULD REDUCE THE PERFORMANCE.
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. High-yield securities have a greater risk of default and
tend to be more volatile than higher-rated debt securities. 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.
- ----------
(2.) Class A shares incepted on February 29, 2000. Effective June 20, 2008, the
Advisor Class was renamed Class A and modified to assume the features and
attributes of Class A. Class C shares incepted on March 31, 2008.
Performance shown for the Class A shares from February 29, 2000, through
June 19, 2008, includes Advisor Class expenses and is adjusted to reflect
Class A sales charges. Performance shown prior to the inception of Class A
shares reflects the performance of the Investor Class shares, adjusted to
reflect Advisor Class expenses and Class A sales charges. Performance shown
prior to the inception of Class C reflects the performance of the Class A
shares, adjusted to reflect Class C sales charges and expenses.
(3.) Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
(4.) The investment adviser has contractually committed through September 30,
2010, 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.
(5.) The Short-Term High Yield Bond Index III is comprised of 70% B of A Merrill
Lynch High Yield U.S. Corporates, Cash Pay, BB Rated, 1-5 Years Index and
the 30% B of A Merrill Lynch High Yield U.S. Corporates, Cash Pay, B Rated,
1-5 Years Index. The B of A Merrill Lynch High Yield U.S. Corporates, Cash
Pay, BB Rated, 1-5 Years Index is an unmanaged index that generally tracks
the performance of BB rated US dollar-denominated corporate bonds publicly
issued in the US domestic market with maturities of one to five years. The
B of A Merrill Lynch High Yield U.S. Corporates, Cash Pay, B Rated, 1-5
Years Index is an unmanaged index that generally tracks the performance of
B rated US dollar-denominated corporate bonds publicly issued in the US
domestic market with maturities of one to five years. You cannot invest
directly in an Index.
(6.) The B of A Merrill Lynch High Yield U.S. Corporates, Cash Pay, BB Rated,
1-5 Years Index is an unmanaged index that generally tracks the performance
of BB rated U.S. dollar-denominated corporate bonds publicly issued in the
U.S. domestic market with maturities of one to five years. You cannot
invest directly in an Index.
14 Wells Fargo Advantage Income Funds
Performance Highlights
WELLS FARGO ADVANTAGE ULTRA SHORT-TERM INCOME FUND
INVESTMENT OBJECTIVE
The WELLS FARGO ADVANTAGE ULTRA SHORT-TERM INCOME FUND (the Fund) seeks current
income consistent with capital preservation.
INVESTMENT ADVISER
Wells Fargo Funds Management, LLC
SUBADVISER
Wells Capital Management Incorporated
PORTFOLIO MANAGERS
Jay N. Mueller, CFA
D. James Newton II, CFA, CPA
Thomas M. Price, CFA
FUND INCEPTION
November 25, 1988
PORTFOLIO ALLOCATION(1)
(AS OF NOVEMBER 30, 2009)
(PIE CHART)
Corporate Bonds (44%)
Municipal Bonds (6%)
Cash Equivalents (11%)
GNMA (2%)
FHLMC (3%)
FNMA (5%)
Asset Backed Securities (15%)
Collateralized Mortgage Securities (10%)
Foreign Corporate Bonds (3%)
Foreign Government Bonds (1%)
- ----------
(1.) Portfolio allocation is subject to change and is calculated based on the
total investments of the Fund.
(2.) Class A shares incepted on August 31, 1999. Class C shares incepted on July
18, 2008. Effective June 20, 2008, the Advisor Class was renamed Class A
and modified to assume the features and attributes of Class A. Performance
shown for the Class A shares from August 31, 1999, through June 19, 2008,
includes Advisor Class expenses and is adjusted to reflect Class A sales
charges. Performance shown prior to the inception of Class A shares
reflects the performance of the Investor Class shares, adjusted to reflect
Advisor Class expenses and Class A sales charges. Performance shown prior
to the inception of Class C reflects the performance of the Class A shares,
adjusted to reflect Class C sales charges and expenses. Administrator Class
shares incepted on April 11, 2005. Performance shown prior to the inception
of the Administrator Class reflects the performance of the Institutional
Class shares, adjusted to reflect Administrator Class expenses. Performance
shown prior to August 31, 1999, for the Administrator Class shares reflects
the performance of the Investor Class shares, and includes expenses that
are not applicable to and are higher than those of the Administrator Class
shares. Institutional Class shares incepted on August 31, 1999. Performance
shown prior to the inception of the Institutional Class shares reflects the
performance of the Investor Class shares, and includes expenses that are
not applicable to and are higher than those of the Institutional Class
shares.
Wells Fargo Advantage Income Funds 15
Performance Highlights
WELLS FARGO ADVANTAGE ULTRA SHORT-TERM INCOME FUND (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(2) (%) (AS OF NOVEMBER 30, 2009)
Including Sales Charge Excluding Sales Charge Expense Ratio
------------------------------------- ------------------------------------- -----------------
ULTRA SHORT-TERM INCOME FUND 6 Months* 1 Year 5 Year 10 Year 6 Months* 1 Year 5 Year 10 Year Gross(3) Net(4)
- ---------------------------- --------- ------ ------ ------- --------- ------ ------ ------- -------- ------
Class A (SADAX) 3.61 4.56 2.08 2.51 5.72 6.70 2.49 2.72 0.97% 0.70%
Class C (WUSTX) 4.32 4.89 1.80 2.20 5.32 5.89 1.80 2.20 1.71% 1.45%
Administrator Class (WUSDX) 5.82 6.87 2.60 3.04 0.89% 0.55%
Institutional Class (SADIX) 5.91 7.08 2.92 3.33 0.61% 0.35%
Investor Class (STADX) 5.70 6.65 2.44 2.85 1.01% 0.75%
Barclays Capital Short-Term
U.S. Government/Credit Bond
Index(5) 0.66 1.91 3.70 NA
Barclays Capital 9-12 Month
U.S. Short Treasury Index(6) 0.55 1.38 3.68 3.71
Barclays Capital 1-3 Year U.S.
Government/Credit Bond
Index(7) 2.55 5.73 4.49 4.93
* 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. PERFORMANCE
SHOWN WITHOUT SALES CHARGES WOULD BE LOWER IF SALES CHARGES WERE REFLECTED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
CURRENT MONTH-END PERFORMANCE IS AVAILABLE ON THE FUNDS' WEB SITE -
www.wellsfargo.com/advantagefunds.
FOR CLASS A SHARES, THE MAXIMUM FRONT-END SALES CHARGE IS 2.00%. FOR CLASS C
SHARES THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE IS 1.00%. PERFORMANCE
INCLUDING SALES CHARGES ASSUMES THE SALES CHARGE FOR THE CORRESPONDING TIME
PERIOD. ADMINISTRATOR CLASS, INSTITUTIONAL CLASS, AND INVESTOR CLASS SHARES ARE
SOLD WITHOUT A FRONT-END SALES CHARGE OR CONTINGENT DEFERRED SALES CHARGE.
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. 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, high-yield securities risk and mortgage- and asset-backed
securities risk. Consult the Fund's prospectus for additional information on
these and other risks.
- ----------
(3.) Reflects the gross expense ratio as stated in the October 1, 2009
prospectus.
(4.) The investment adviser has contractually committed through September 30,
2010, 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.
(5.) The Barclays Capital Short-Term U.S. Government/Credit Bond Index contains
securities that have fallen out of the U.S. Government/Credit Index because
of the standard minimum one-year to maturity constraint. Securities in the
Short-Term U.S. Government/Credit Bond Index must have a maturity from 1 up
to (but not including) 12 months. You cannot invest directly in an Index.
(6.) The Barclays Capital 9-12 Month U.S. Short Treasury Index is an unmanaged
index that includes aged U.S. Treasury bills, notes, and bonds with a
remaining maturity from 9 up to (but not including) 12 months. It excludes
zero-coupon strips. You cannot invest directly in an Index.
(7.) The Barclays Capital 1-3 Year U.S. Government/Credit Bond Index is the 1-3
year component of the Government/Credit Index which includes securities in
the Government and Credit Indices. The Government Index includes treasuries
(i.e., public obligations of the U.S. Treasury that have remaining
maturities of more than one year) and agencies (i.e., publicly issued debt
of U.S. Government agencies, quasi-federal corporations, and corporate or
foreign debt guaranteed by the U.S. Government). The Credit Index includes
publicly issued U.S. corporate and foreign debentures and secured notes
that meet specified maturity, liquidity, and quality requirements. You
cannot invest directly in an Index.
16 Wells Fargo Advantage Income Funds
Fund Expenses
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 June 1, 2009 to
November 30, 2009.
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 with other mutual 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 the Net Annual
06-01-2009 11-30-2009 Period(1) Expense Ratio
------------- ------------- --------------- -------------
GOVERNMENT SECURITIES FUND
CLASS A
Actual $1,000.00 $1,047.40 $4.62 0.90%
Hypothetical (5% Return before expenses) $1,000.00 $1,020.56 $4.56 0.90%
CLASS B
Actual $1,000.00 $1,044.50 $8.35 1.65%
Hypothetical (5% Return before expenses) $1,000.00 $1,016.90 $8.24 1.65%
CLASS C
Actual $1,000.00 $1,044.40 $8.46 1.65%
Hypothetical (5% Return before expenses) $1,000.00 $1,016.80 $8.34 1.65%
ADMINISTRATOR CLASS
Actual $1,000.00 $1,049.40 $3.60 0.70%
Hypothetical (5% Return before expenses) $1,000.00 $1,021.56 $3.55 0.70%
INSTITUTIONAL CLASS
Actual $1,000.00 $1,049.60 $2.47 0.48%
Hypothetical (5% Return before expenses) $1,000.00 $1,022.66 $2.43 0.48%
INVESTOR CLASS
Actual $1,000.00 $1,048.10 $4.88 0.95%
Hypothetical (5% Return before expenses) $1,000.00 $1,020.31 $4.81 0.95%
Wells Fargo Advantage Income Funds 17
Fund Expenses
Beginning Ending Expenses
Account Value Account Value Paid During the Net Annual
06-01-2009 11-30-2009 Period(1) Expense Ratio
------------- ------------- --------------- -------------
HIGH INCOME FUND
CLASS A
Actual $1,000.00 $1,123.90 $4.79 0.90%
Hypothetical (5% Return before expenses) $1,000.00 $1,020.56 $4.56 0.90%
CLASS B
Actual $1,000.00 $1,119.70 $8.77 1.65%
Hypothetical (5% Return before expenses) $1,000.00 $1,016.80 $8.34 1.65%
CLASS C
Actual $1,000.00 $1,119.70 $8.77 1.65%
Hypothetical (5% Return before expenses) $1,000.00 $1,016.80 $8.34 1.65%
INSTITUTIONAL CLASS
Actual $1,000.00 $1,127.10 $2.67 0.50%
Hypothetical (5% Return before expenses) $1,000.00 $1,022.56 $2.54 0.50%
INVESTOR CLASS
Actual $1,000.00 $1,123.30 $5.06 0.95%
Hypothetical (5% Return before expenses) $1,000.00 $1,020.31 $4.81 0.95%
SHORT-TERM BOND FUND
CLASS A
Actual $1,000.00 $1,059.40 $4.13 0.80%
Hypothetical (5% Return before expenses) $1,000.00 $1,021.06 $4.05 0.80%
CLASS C
Actual $1,000.00 $1,055.30 $7.99 1.55%
Hypothetical (5% Return before expenses) $1,000.00 $1,017.30 $7.84 1.55%
INSTITUTIONAL CLASS
Actual $1,000.00 $1,061.00 $2.48 0.48%
Hypothetical (5% Return before expenses) $1,000.00 $1,022.66 $2.43 0.48%
INVESTOR CLASS
Actual $1,000.00 $1,059.10 $4.39 0.85%
Hypothetical (5% Return before expenses) $1,000.00 $1,020.81 $4.31 0.85%
SHORT-TERM HIGH YIELD BOND FUND
CLASS A
Actual $1,000.00 $1,060.70 $4.18 0.81%
Hypothetical (5% Return before expenses) $1,000.00 $1,021.01 $4.10 0.81%
CLASS C
Actual $1,000.00 $1,056.60 $8.04 1.56%
Hypothetical (5% Return before expenses) $1,000.00 $1,017.25 $7.89 1.56%
INVESTOR CLASS
Actual $1,000.00 $1,060.40 $4.44 0.86%
Hypothetical (5% Return before expenses) $1,000.00 $1,020.76 $4.36 0.86%
18 Wells Fargo Advantage Income Funds
Fund Expenses
Beginning Ending Expenses
Account Value Account Value Paid During the Net Annual
06-01-2009 11-30-2009 Period(1) Expense Ratio
------------- ------------- --------------- -------------
ULTRA SHORT-TERM INCOME FUND
CLASS A
Actual $1,000.00 $1,057.20 $3.61 0.70%
Hypothetical (5% Return before expenses) $1,000.00 $1,021.56 $3.55 0.70%
CLASS C
Actual $1,000.00 $1,053.20 $7.46 1.45%
Hypothetical (5% Return before expenses) $1,000.00 $1,017.80 $7.33 1.45%
ADMINISTRATOR CLASS
Actual $1,000.00 $1,058.20 $2.84 0.55%
Hypothetical (5% Return before expenses) $1,000.00 $1,022.31 $2.79 0.55%
INSTITUTIONAL CLASS
Actual $1,000.00 $1,059.10 $1.81 0.35%
Hypothetical (5% Return before expenses) $1,000.00 $1,023.31 $1.78 0.35%
INVESTOR CLASS
Actual $1,000.00 $1,057.00 $3.87 0.75%
Hypothetical (5% Return before expenses) $1,000.00 $1,021.31 $3.80 0.75%
- ----------
(1.) Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by the number of days in
the most recent fiscal half year divided by the number of days in the
fiscal year (to reflect the one-half year period).
Wells Fargo Advantage Income Funds 19
Portfolio of Investments--November 30, 2009 (Unaudited)
GOVERNMENT SECURITIES FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
AGENCY SECURITIES: 53.22%
FEDERAL HOME LOAN MORTGAGE CORPORATION: 7.87%
$ 966,290 FHLMC 2.93% 11/01/2012 $ 958,582
56,005,000 FHLMC%% 6.00 TBA 60,074,099
51 FHLMC #170053 14.75 08/01/2011 57
1,789 FHLMC #170053 15.00 08/01/2011 1,988
163 FHLMC #170069 14.00 11/01/2012 181
29,519 FHLMC #170215 8.00 02/01/2017 32,626
58,498 FHLMC #170235 10.50 08/01/2019 67,750
11,513 FHLMC #1B0123+/- 3.41 09/01/2031 11,949
7,951 FHLMC #1B0128+/- 3.41 09/01/2031 8,245
343,448 FHLMC #1B0129+/- 3.53 09/01/2031 355,313
6,978,282 FHLMC #1G1393+/- 5.93 12/01/2036 7,403,480
4,097,611 FHLMC #1J0817+/- 5.78 01/01/2038 4,337,146
12,836,787 FHLMC #1Q0183+/-<< 5.96 10/01/2036 13,601,523
66,523 FHLMC #552435 10.50 08/01/2020 77,328
248,560 FHLMC #555503 9.00 04/01/2021 269,654
493,351 FHLMC #611023+/- 3.70 10/01/2026 507,910
172,424 FHLMC #786210+/- 6.38 01/01/2026 184,494
650,083 FHLMC #786823+/- 3.40 07/01/2029 665,196
223,019 FHLMC #789483+/- 3.23 06/01/2032 226,745
169,507 FHLMC #865496+/- 5.81 05/01/2026 179,129
111,449 FHLMC #884009 10.50 05/01/2020 130,196
24,858 FHLMC #A01434 9.00 06/01/2016 25,548
189,318 FHLMC #A01562 9.00 11/01/2018 204,752
53,645 FHLMC #A01620 9.00 04/01/2017 58,018
40,035 FHLMC #A01860 8.50 06/01/2017 44,294
1,801,022 FHLMC #B13066 4.00 03/01/2014 1,858,280
1,173,502 FHLMC #B13579 5.00 04/01/2019 1,255,292
912,411 FHLMC #B13580 5.00 04/01/2019 976,004
9,991,760 FHLMC #B13654 4.00 04/01/2014 10,311,883
1,779,884 FHLMC #B15194 5.00 06/01/2019 1,903,938
2,121,997 FHLMC #B16884 5.00 10/01/2019 2,269,895
5,086,352 FHLMC #B17855 5.00 02/01/2020 5,436,091
636,823 FHLMC #C01345 7.00 04/01/2032 707,032
103,373 FHLMC #C31808 7.50 10/01/2029 117,743
676,184 FHLMC #C59553 7.50 11/01/2031 770,711
1,002,389 FHLMC #C65576 7.50 04/01/2032 1,142,769
1,008,024 FHLMC #E79794 7.00 10/01/2014 1,087,247
2,068,379 FHLMC #E96459 5.00 05/01/2018 2,217,711
256,673 FHLMC #G00319 9.50 04/01/2025 297,195
53,236 FHLMC #G00683 8.50 12/01/2025 61,596
208,012 FHLMC #G01236 10.00 10/01/2021 229,873
6,830,514 FHLMC #G08102 6.50 12/01/2035 7,388,428
5,035 FHLMC #G10783 8.50 06/01/2012 5,274
37,543 FHLMC #G11136 6.50 05/01/2011 38,380
55,470 FHLMC #G11200 8.00 01/01/2012 58,115
1,086,175 FHLMC #G11209 7.50 12/01/2011 1,132,874
351,118 FHLMC #G11345 7.50 12/01/2011 367,996
867,437 FHLMC #G11368 7.50 12/01/2012 914,133
8,090,914 FHLMC #G18005 5.00 08/01/2019 8,654,833
1,191,187 FHLMC #G80106 10.00 08/17/2022 1,345,211
1,870,145 FHLMC #G80116 10.00 02/17/2025 2,143,997
2,238,866 FHLMC #G80193 9.50 09/17/2022 2,532,303
195,497 FHLMC #G90023 7.00 11/17/2013 205,387
9,087,608 FHLMC #H01193 6.50 08/01/2037 9,787,283
3,327,862 FHLMC #H01792 6.50 10/01/2037 3,584,082
44,522 FHLMC #N70012 10.50 08/01/2020 51,585
158,279,344
--------------
20 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
GOVERNMENT SECURITIES FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION: 41.27%
$ 6,150,000 FNMA%% 4.00% TBA $ 6,175,947
84,220,000 FNMA%% 4.50 TBA 86,443,913
90,640,000 FNMA%% 5.00 TBA 95,058,700
92,485,000 FNMA%% 5.50 TBA 98,352,063
27,800,000 FNMA%% 5.69 TBA 15,990,393
26,795,000 FNMA%% 6.00 TBA 28,720,891
73,001 FNMA #100042 11.00 10/15/2020 82,430
214,029 FNMA #100285 9.50 12/15/2020 247,721
154 FNMA #1376 15.50 10/01/2012 172
265,062 FNMA #190180 9.00 07/01/2021 296,754
77,748 FNMA #253266 8.00 05/01/2030 89,272
434,723 FNMA #253951 7.50 09/01/2031 495,563
455,595 FNMA #254218 7.00 02/01/2032 507,974
165,867 FNMA #254223 7.50 02/01/2032 189,132
1,074,095 FNMA #254480 7.00 10/01/2032 1,192,792
3,091,480 FNMA #254836 4.00 07/01/2010 3,138,411
1,747,766 FNMA #256314 5.50 06/01/2016 1,848,532
31,355,841 FNMA #257307 6.00 08/01/2038 33,653,023
3,945 FNMA #303548 8.50 02/01/2012 4,096
548,147 FNMA #313419 8.50 12/01/2026 636,899
162,308 FNMA #323013 9.00 10/01/2021 183,685
783,788 FNMA #323284 8.50 05/01/2017 858,642
5,299,622 FNMA #357464 4.50 12/01/2018 5,635,265
26,818 FNMA #364215 7.50 07/01/2015 28,989
2,399,819 FNMA #368034 8.00 11/01/2026 2,809,221
6,874,483 FNMA #387402 5.03 05/01/2015 7,457,590
1,523,523 FNMA #398800 8.00 06/01/2012 1,602,129
62,392 FNMA #398805 8.50 11/01/2011 63,989
107,261 FNMA #417768 6.50 03/01/2028 117,040
41,899 FNMA #426843 11.00 02/01/2019 47,043
51,072 FNMA #439935 8.00 04/01/2017 55,299
633,737 FNMA #457277+/- 3.53 10/01/2027 647,114
267,058 FNMA #458018 12.00 07/15/2014 304,549
636,972 FNMA #487758 8.50 05/01/2026 737,641
205,415 FNMA #487759 9.50 07/01/2028 238,078
147,520 FNMA #516051 9.50 01/01/2021 169,332
146,147 FNMA #535537 9.00 07/01/2028 167,800
203,835 FNMA #535573 8.00 11/01/2013 205,375
286,870 FNMA #535752 10.00 12/01/2020 327,491
945,132 FNMA #538435+/- 3.85 07/01/2026 970,316
150,154 FNMA #545117+/- 3.44 12/01/2040 153,466
732,321 FNMA #545187+/- 2.83 09/01/2031 762,740
155,720 FNMA #545208+/- 3.16 09/01/2031 161,557
599,556 FNMA #545460+/- 3.04 11/01/2031 618,899
1,888,964 FNMA #54844+/- 3.31 09/01/2027 1,923,052
677,618 FNMA #555161 6.00 12/01/2013 732,258
3,499,891 FNMA #555569 6.00 05/01/2016 3,791,403
8,395,015 FNMA #555710 4.50 08/01/2018 8,926,699
452,361 FNMA #635726+/- 3.69 04/01/2032 462,030
272,298 FNMA #646643+/- 3.24 06/01/2032 281,167
1,549,606 FNMA #66414+/- 5.13 09/01/2028 1,599,576
258,211 FNMA #675479+/- 4.73 01/01/2033 262,749
242,229 FNMA #675491+/- 4.43 04/01/2033 248,540
45,451 FNMA #695514 8.50 10/01/2026 52,368
429,934 FNMA #695519 8.50 11/01/2026 495,242
Wells Fargo Advantage Income Funds 21
Portfolio of Investments--November 30, 2009 (Unaudited)
GOVERNMENT SECURITIES FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (continued)
$ 242,182 FNMA #70765 9.00% 03/01/2021 $ 278,065
1,250,066 FNMA #724438 8.50 06/01/2027 1,439,488
185,588 FNMA #724658+/- 5.61 07/01/2033 189,822
22,669,427 FNMA #725249 5.00 03/01/2034 23,858,243
4,111,410 FNMA #725638 5.00 12/01/2018 4,408,887
35,310,966 FNMA #735062 5.50 06/01/2034 37,720,663
4,680,721 FNMA #735613 6.00 02/01/2035 5,075,566
13,269,095 FNMA #739503 5.50 09/01/2033 14,174,607
11,870,037 FNMA #740227 5.50 09/01/2033 12,680,074
9,380,361 FNMA #745678+/- 5.35 05/01/2036 9,634,557
7,554,921 FNMA #745743 4.00 05/01/2021 7,787,864
7,588,374 FNMA #745816+/- 4.57 12/01/2035 7,883,571
3,737,411 FNMA #787275+/- 4.86 06/01/2034 3,872,638
3,287,148 FNMA #813158+/- 3.21 12/01/2034 3,380,119
10,501,391 FNMA #835168 5.50 08/01/2035 11,206,543
4,127,884 FNMA #873354 5.61 02/01/2021 4,563,182
11,700,000 FNMA #874284 5.12 01/01/2017 12,756,440
16,627,340 FNMA #878059 5.50 03/01/2036 17,720,457
8,056,528 FNMA #886087 6.50 07/01/2036 8,722,293
10,211,822 FNMA #886686+/- 6.14 08/01/2036 10,852,517
2,519,048 FNMA #886761 7.00 09/01/2036 2,776,661
25,841,166 FNMA #888022 5.00 02/01/2036 27,155,936
18,329,097 FNMA #888538 5.50 01/01/2037 19,559,867
16,762,837 FNMA #888707 7.50 10/01/2037 18,671,751
25,899,314 FNMA #889398 6.00 11/01/2037 27,812,929
5,415,880 FNMA #892283+/- 5.86 09/01/2036 5,733,590
5,322,002 FNMA #895998 6.50 07/01/2036 5,761,795
3,983,280 FNMA #902200 6.50 11/01/2036 4,312,445
6,474,910 FNMA #918447 5.50 05/01/2022 6,942,386
4,966,575 FNMA #924858 6.50 09/01/2037 5,355,268
4,448,794 FNMA #953137 6.00 09/01/2037 4,777,501
8,104,399 FNMA #954965 6.50 09/01/2037 8,738,663
8,509,571 FNMA #988565 6.00 08/01/2038 9,132,996
15,654,519 FNMA #995958 5.50 06/01/2024 16,784,743
48,222,423 FNMA #AD0143 5.50 06/01/2024 51,776,942
829,722,081
--------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION: 4.07%
70,570,000 GNMA%% 5.00 TBA 74,175,704
4,367 GNMA #126600 13.00 11/15/2014 5,111
4,089 GNMA #201 14.00 09/20/2014 4,867
6,194 GNMA #52538 15.00 07/15/2012 7,180
325,349 GNMA #780104 9.50 10/20/2019 366,581
158,603 GNMA #780110 12.50 04/15/2019 169,520
1,417,365 GNMA #780288 8.00 12/15/2023 1,644,862
17,657 GNMA #780763 7.50 12/15/2010 17,751
1,013,210 GNMA #780867 8.35 04/15/2020 1,151,263
605,447 GNMA #780980 8.40 05/15/2020 698,423
463,510 GNMA #8678 3.63 08/20/2020 483,111
278,302 GNMA #8714 4.13 11/20/2020 288,478
2,052 GNMA #95643 15.00 09/15/2012 2,384
127,478,956 GNMA Series 2002-53 Class IO+/-(c) 0.90 04/16/2042 2,850,136
81,865,371
--------------
22 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
GOVERNMENT SECURITIES FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
SMALL BUSINESS ADMINISTRATION: 0.01%
$ 1,546,775 SBA #440019 SERIES 1993- 1A(c)(i) 1.00% 02/28/2018 $ 64,046
2,262,093 SBA SERIES 1992- 6 CLASS A(c)(i) 1.00 10/15/2017 93,665
157,711
--------------
TOTAL AGENCY SECURITIES (COST $1,033,113,154) 1,070,024,507
--------------
ASSET BACKED SECURITIES: 1.49%
10,445,000 CAPITAL AUTO RECEIVABLES ASSET TRUST SERIES 2007-4 CLASS
A3B+/- 0.94 11/15/2011 10,452,769
19,165,000 CHASE ISSUANCE TRUST SERIES 2009-A3 CLASS A3 2.40 06/17/2013 19,524,792
TOTAL ASSET BACKED SECURITIES (COST $29,600,636) 29,977,561
--------------
COLLATERALIZED MORTGAGE OBLIGATIONS: 17.18%
11,820,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES
2004-LB4A CLASS A4 4.58 10/15/2037 11,732,794
54,769 FHLMC SERIES 16 CLASS D 10.00 10/15/2019 59,593
13,836,644 FHLMC SERIES 3139 CLASS YD 4.38 04/15/2015 14,279,676
11,674,321 FHLMC SERIES 3185 CLASS PA 4.50 08/15/2026 12,001,573
9,960,384 FHLMC SERIES 3221 CLASS VA 5.00 09/15/2017 10,829,225
436,617 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-15 CLASS
A6+/- 0.65 11/25/2028 423,632
1,726,939 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-23 CLASS
A+/- 0.52 05/25/2030 1,572,082
758,779 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-35 CLASS
A+/- 0.52 09/25/2031 692,352
2,019,139 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-42 CLASS
A6 9.50 02/25/2042 2,249,448
1,029,540 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-55 CLASS
2A1+/- 4.80 03/25/2043 979,636
5,198,199 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-57 CLASS
2A1+/- 4.77 07/25/2043 5,397,193
2,080,850 FNMA GRANTOR TRUST SERIES 2000-T6 CLASS A2 9.50 06/25/2030 2,329,252
4,178,495 FNMA GRANTOR TRUST SERIES 2001-T10 CLASS A3 9.50 12/25/2041 4,677,303
1,043,904 FNMA GRANTOR TRUST SERIES 2001-T12 CLASS A3 9.50 08/25/2041 1,168,520
2,874,132 FNMA GRANTOR TRUST SERIES 2001-T8 CLASS A3+/- 5.36 07/25/2041 3,031,834
15,275,044 FNMA GRANTOR TRUST SERIES 2002-T11 CLASS B 5.34 04/25/2012 16,477,344
2,582,487 FNMA GRANTOR TRUST SERIES 2002-T12 CLASS A5+/- 4.90 10/25/2041 2,679,223
11,063,050 FNMA GRANTOR TRUST SERIES 2002-T19 CLASS A1 6.50 07/25/2042 11,977,479
589,973 FNMA GRANTOR TRUST SERIES 2002-T5 CLASS A1+/- 0.48 05/25/2032 494,246
15,000,000 FNMA GRANTOR TRUST SERIES 2003-T1 CLASS B 4.49 11/25/2012 15,813,374
686,461 FNMA GRANTOR TRUST SERIES 2003-T2 CLASS A1+/- 0.52 03/25/2033 539,291
174,295 FNMA INTEREST STRIP SERIES 161 CLASS 2(c) 8.50 07/25/2022 36,552
468,114 FNMA INTEREST STRIP SERIES 265 CLASS 2 9.00 03/01/2024 538,081
187,736 FNMA SERIES 1988-2 CLASS Z 10.10 02/25/2018 209,209
93,239 FNMA SERIES 1988-7 CLASS Z 9.25 04/25/2018 103,969
486,263 FNMA SERIES 1989-10 CLASS Z 9.50 03/25/2019 564,391
373,902 FNMA SERIES 1989-100 CLASS Z 8.75 12/25/2019 419,485
1,016,858 FNMA SERIES 1989-12 CLASS Y 10.00 03/25/2019 1,200,687
528,273 FNMA SERIES 1989-22 CLASS G 10.00 05/25/2019 620,745
118,347 FNMA SERIES 1989-63 CLASS Z 9.40 10/25/2019 132,248
170,060 FNMA SERIES 1989-98 CLASS E 9.20 12/25/2019 190,092
310,368 FNMA SERIES 1990-144 CLASS W 9.50 12/25/2020 360,596
287,814 FNMA SERIES 1990-75 CLASS Z 9.50 07/25/2020 337,076
124,733 FNMA SERIES 1990-84 CLASS Y 9.00 07/25/2020 140,903
575,315 FNMA SERIES 1990-96 CLASS Z 9.67 08/25/2020 676,448
182,614 FNMA SERIES 1991-5 CLASS Z 8.75 01/25/2021 209,531
625,001 FNMA SERIES 1991-85 CLASS Z 8.00 06/25/2021 694,141
452,420 FNMA SERIES 1992-45 CLASS Z 8.00 04/25/2022 502,469
442,105 FNMA SERIES G-8 CLASS E 9.00 04/25/2021 508,554
955,021 FNMA SERIES G92-30 CLASS Z 7.00 06/25/2022 1,054,605
170,615 FNMA WHOLE LOAN SERIES 1999-W6 CLASS A+/- 9.31 09/25/2028 172,407
120,800 FNMA WHOLE LOAN SERIES 2003-W11 CLASS A1+/- 4.40 06/25/2033 110,005
5,626,700 FNMA WHOLE LOAN SERIES 2003-W3 CLASS 1A4+/- 4.75 08/25/2042 6,071,093
Wells Fargo Advantage Income Funds 23
Portfolio of Investments--November 30, 2009 (Unaudited)
GOVERNMENT SECURITIES FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERALIZED MORTGAGE OBLIGATIONS (continued)
$ 1,091,640 FNMA WHOLE LOAN SERIES 2003-W5 CLASS A+/- 0.46% 04/25/2033 $ 953,397
5,097,577 FNMA WHOLE LOAN SERIES 2003-W6 CLASS 6A+/- 4.93 08/25/2042 5,332,907
4,973,215 FNMA WHOLE LOAN SERIES 2003-W6 CLASS PT4+/- 10.04 10/25/2042 5,505,478
2,470,337 FNMA WHOLE LOAN SERIES 2003-W8 CLASS PT1+/- 10.14 12/25/2042 2,702,848
389,641 FNMA WHOLE LOAN SERIES 2003-W9 CLASS A+/- 0.48 06/25/2033 370,619
5,032,884 FNMA WHOLE LOAN SERIES 2004-W15 CLASS 1A3+/- 7.00 08/25/2044 5,567,879
9,974,000 FOUR TIMES SQUARE TRUST SERIES 2000-4TS CLASS A2++ 7.80 04/15/2015 10,229,106
4,985,037 FREDDIE MAC REFERENCE REMIC SERIES R007 CLASS AC 5.88 05/15/2016 5,075,608
4,947,953 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES
2000-C3 CLASS A2 6.96 09/15/2035 5,080,204
12,404,000 GNMA SERIES 2004-103 CLASS C+/- 4.70 12/16/2027 13,071,628
197,410,409 GNMA SERIES 2005-23 CLASS IO+/-(c) 0.86 06/17/2045 7,348,938
2,167,569 GNMA SERIES 2005-34 CLASS A 3.96 09/16/2021 2,180,842
8,424,633 GNMA SERIES 2005-59 CLASS A 4.39 05/16/2023 8,618,238
12,583,534 GNMA SERIES 2006-3 CLASS A 4.21 01/16/2028 12,977,186
12,510,000 GNMA SERIES 2006-32 CLASS C+/- 5.52 11/16/2038 13,533,213
141,718,532 GNMA SERIES 2006-32 CLASS XM+/-(c) 0.70 11/16/2045 5,158,583
12,520,000 GNMA SERIES 2006-68 CLASS D+/- 5.31 12/16/2037 13,507,573
277,535,244 GNMA SERIES 2008-22 CLASS XM+/-(c) 1.20 02/16/2050 13,383,721
39,500,000 GNMA SERIES 2008-80 CLASS B 4.28 03/16/2033 41,505,498
4,572,789 JPMORGAN MORTGAGE TRUST SERIES 2005-A3 CLASS 7CA1+/- 5.09 06/25/2035 3,707,899
4,560,000 MORGAN STANLEY CAPITAL I SERIES 2004-T15 CLASS A4 5.27 06/13/2041 4,578,787
4,370,191 NOMURA ASSET ACCEPTANCE CORPORATION SERIES 2004-R2 CLASS A1 6.50 10/25/2034 4,105,249
125,500,000 SALOMON BROTHERS MORTGAGE SECURITIES VII SERIES 2001-C2
CLASS X2+/-(c) 0.00 11/13/2011 1,255
23,365,000 TIAA REAL ESTATE CDO LIMITED SERIES 2007-C4 CLASS A3+/- 6.07 08/15/2039 24,832,147
758,161 VENDEE MORTGAGE TRUST SERIES 1995-1 CLASS 4+/- 8.87 02/15/2025 817,997
969,413 VENDEE MORTGAGE TRUST SERIES 1995-2C CLASS 3A 8.79 06/15/2025 1,098,466
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (COST $336,630,382) 345,503,623
--------------
CORPORATE BONDS & NOTES: 0.99%
APPAREL & ACCESSORY STORES: 0.00%
172 SEARS ROEBUCK ACCEPTANCE 6.70 04/15/2012 170
--------------
DEPOSITORY INSTITUTIONS: 0.49%
15,000,000 FINANCING CORPORATION FICO SERIES D-P## 4.25 09/26/2019 9,925,519
--------------
ELECTRIC, GAS & SANITARY SERVICES: 0.50%
6,000,000 TENNESSEE VALLEY AUTHORITY 5.25 09/15/2039 6,141,252
3,670,000 TENNESSEE VALLEY AUTHORITY 5.38 04/01/2056 3,804,876
9,946,128
--------------
TOTAL CORPORATE BONDS & NOTES (COST $19,176,734) 19,871,817
--------------
FOREIGN GOVERNMENT BONDS: 1.51%
28,000,000 EUROPEAN INVESTMENT BANK SERIES EMTN<< 4.25 07/15/2013 30,377,816
TOTAL FOREIGN GOVERNMENT BONDS (COST $28,496,344) 30,377,816
--------------
MUNICIPAL BONDS & NOTES: 0.47%
ARKANSAS: 0.06%
1,029,498 ARKANSAS DEVELOPMENT FINANCE AUTHORITY (HOUSING REVENUE LOC) 9.75 11/15/2014 1,131,511
--------------
TEXAS: 0.41%
5,405,000 RETAMA TEXAS DEVELOPMENT CORPORATION (OTHER REVENUE LOC) 10.00 12/15/2020 8,247,760
--------------
TOTAL MUNICIPAL BONDS & NOTES (COST $8,653,723) 9,379,271
--------------
24 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
GOVERNMENT SECURITIES FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
US TREASURY SECURITIES: 27.93%
US TREASURY BONDS: 6.44%
$ 18,740,000 US TREASURY BOND<< 4.50% 08/15/2039 $ 19,688,713
17,315,000 US TREASURY BOND<< 5.38 02/15/2031 20,385,711
20,890,000 US TREASURY BOND<< 6.00 02/15/2026 26,151,669
11,250,000 US TREASURY BOND<< 7.13 02/15/2023 15,264,844
34,340,000 US TREASURY BOND<< 8.75 05/15/2017 48,022,361
129,513,298
--------------
US TREASURY NOTES: 21.49%
81,000,000 US TREASURY NOTE<< 0.88 04/30/2011 81,534,762
51,975,000 US TREASURY NOTE<< 1.38 04/15/2012 52,640,904
49,160,000 US TREASURY NOTE<< 1.38 09/15/2012 49,655,434
49,000,000 US TREASURY NOTE<< 1.50 07/15/2012 49,757,981
36,500,000 US TREASURY NOTE<< 2.13 11/30/2014 36,651,133
21,200,000 US TREASURY NOTE<< 2.38 09/30/2014 21,637,356
26,170,000 US TREASURY NOTE<< 2.75 10/31/2013 27,396,719
7,700,000 US TREASURY NOTE<< 3.13 05/15/2019 7,662,101
73,850,000 US TREASURY NOTE<< 3.75 11/15/2018 77,450,188
25,000,000 US TREASURY NOTE<< 4.25 08/15/2015 27,656,250
432,042,828
--------------
TOTAL US TREASURY SECURITIES (COST $548,107,344) 561,556,126
--------------
YIELD
-------------
COLLATERAL FOR SECURITIES LENDING: 24.66%
COLLATERAL INVESTED IN MONEY MARKET FUNDS: 4.48%
22,484,604 AIM STIT-LIQUID ASSETS PORTFOLIO(s) 0.21 22,484,604
22,484,604 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(s) 0.16 22,484,604
22,484,604 DREYFUS CASH MANAGEMENT FUND INSTITUTIONAL(s) 0.11 22,484,604
22,484,604 DWS MONEY MARKET SERIES INSTITUTIONAL(s) 0.20 22,484,604
89,938,416
--------------
COLLATERAL INVESTED IN OTHER ASSETS: 20.18%
4,372,006 ALLIED IRISH BANKS NORTH AMERICA INCORPORATED 0.26 12/07/2009 4,372,006
1,561,431 AMSTEL FUNDING CORPORATION++(p) 1.25 12/18/2009 1,560,509
1,561,431 ANTALIS US FUNDING CORPORATION++(p) 0.18 12/03/2009 1,561,415
4,684,292 ANTALIS US FUNDING CORPORATION++(p) 0.20 12/04/2009 4,684,214
3,747,434 ARABELLA FINANCE LLC++(p) 0.35 12/01/2009 3,747,434
5,308,865 ARABELLA FINANCE LLC++(p) 0.40 12/03/2009 5,308,747
156,143 ARABELLA FINANCE LLC++(p) 0.40 12/04/2009 156,138
3,122,862 ASPEN FUNDING CORPORATION++(p) 0.18 12/21/2009 3,122,549
9,368,585 BANK OF AMERICA 0.18 12/23/2009 9,367,554
27,153,282 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $27,153,403) 0.16 12/01/2009 27,153,282
4,684,292 BANK OF IRELAND 0.35 12/01/2009 4,684,292
3,747,434 BANK OF IRELAND 0.50 12/02/2009 3,747,434
1,512,402 BARTON CAPITAL CORPORATION++(p) 0.18 12/01/2009 1,512,402
780,715 BELMONT FUNDING LLC++(p) 0.50 12/01/2009 780,715
4,059,720 BNP PARIBAS (NEW YORK) 0.21 12/08/2009 4,059,744
3,435,148 BNP PARIBAS (NEW YORK) 0.21 12/14/2009 3,435,185
9,368,585 BRYANT BANK FUNDING++ 0.18 12/23/2009 9,367,554
7,807,154 CAFCO LLC++ 0.17 12/09/2009 7,806,859
343,515 CALCASIEU PARISH LA+/-ss 0.40 12/01/2027 343,515
7,494,868 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY+/-ss 0.23 11/01/2026 7,494,868
999,316 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.35 06/01/2028 999,316
Wells Fargo Advantage Income Funds 25
Portfolio of Investments--November 30, 2009 (Unaudited)
GOVERNMENT SECURITIES FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 7,807,154 CHARTA LLC++(p) 0.17% 12/09/2009 $ 7,806,859
828,339 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.30 10/01/2038 828,339
1,561,431 COOK COUNTY IL+/-ss 0.40 11/01/2030 1,561,431
9,476,636 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY
VALUE $9,476,681) 0.17 12/01/2009 9,476,636
5,308,865 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.40 12/15/2037 5,308,865
3,747,434 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/02/2009 3,747,434
4,528,149 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/07/2009 4,528,149
3,747,434 DEXIA CREDIT LOCAL DE FRANCE SA 0.27 12/04/2009 3,747,434
7,807,154 E.ON AG++ 0.17 12/21/2009 7,806,417
7,807,154 ENI FINANCE USA INCORPORATED++ 0.17 12/18/2009 7,806,527
8,119,440 FORTIS FUNDING LLC++ 0.20 12/29/2009 8,118,177
8,431,726 GDF SUEZ++ 0.17 12/15/2009 8,431,169
6,245,723 GEMINI SECURITIZATION INCORPORATED++(p) 0.18 12/10/2009 6,245,442
7,800,908 GOLDMAN SACHS REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $7,800,945) 0.17 12/01/2009 7,800,908
7,807,154 GOTHAM FUNDING CORPORATION++ 0.18 12/15/2009 7,806,608
1,561,431 GRAMPIAN FUNDING++(p) 0.25 12/03/2009 1,561,409
6,558,009 GRAMPIAN FUNDING++(p) 0.28 12/15/2009 6,557,295
6,767,522 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 2,516,842
5,133,985 HAMILTON COUNTY OHIO HOSPITALS+/-ss 0.20 05/15/2037 5,133,985
515,272 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.30 11/01/2042 515,272
2,529,518 HOUSTON TX UTILITY SYSTEM+/-ss 0.27 05/15/2034 2,529,518
893,138 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.30 07/01/2029 893,138
624,572 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.29 01/01/2018 624,572
1,561,431 ING USA FUNDING LLC 0.18 12/09/2009 1,561,368
6,245,723 ING USA FUNDING LLC 0.19 12/07/2009 6,245,525
23,975,458 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $23,975,571) 0.17 12/01/2009 23,975,458
3,122,862 JUPITER SECURITIZATION CORPORATION++(p) 0.18 12/02/2009 3,122,846
1,561,431 JUPITER SECURITIZATION CORPORATION++(p) 0.18 12/03/2009 1,561,415
936,858 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.29 04/15/2025 936,858
9,368,585 KBC BANK NV BRUSSELS 0.18 12/01/2009 9,368,585
1,873,717 LLOYDS TSB BANK PLC 0.18 12/17/2009 1,873,567
6,245,723 LLOYDS TSB BANK PLC 0.20 12/07/2009 6,245,723
2,498,289 LMA AMERICAS LLC++(p) 0.18 12/11/2009 2,498,164
1,405,288 LMA AMERICAS LLC++(p) 0.18 12/17/2009 1,405,175
4,684,292 LMA AMERICAS LLC++(p) 0.19 12/21/2009 4,683,798
1,405,288 LOUISIANA PUBLIC FACILITIES AUTHORITY+/-ss 0.19 10/01/2033 1,405,288
7,744,697 MASSACHUSETTS HEFA+/-ss 0.25 10/01/2034 7,744,697
857,226 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.24 02/01/2036 857,226
6,558,009 NATIXIS 0.27 12/07/2009 6,558,042
624,572 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.31 01/01/2018 624,572
6,870,296 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.22 07/01/2034 6,870,296
6,245,723 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.24 12/01/2040 6,245,723
7,807,154 NEWPORT FUNDING CORPORATION++(p) 0.18 12/15/2009 7,806,608
1,528,641 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.30 01/01/2034 1,528,641
3,158,775 RBS SECURITIES INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY
VALUE $3,158,791) 0.18 12/01/2009 3,158,775
1,093,002 REGENCY MARKETS #1 LLC++(p) 0.18 12/04/2009 1,092,985
5,190,196 REGENCY MARKETS #1 LLC++(p) 0.20 12/09/2009 5,189,965
1,561,431 ROMULUS FUNDING CORPORATION++ 0.30 12/15/2009 1,561,249
5,621,151 ROYAL BANK OF SCOTLAND PLC 0.20 12/02/2009 5,621,120
4,372,006 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.20 12/01/2028 4,372,006
6,245,723 SOCIETE GENERALE NORTH AMERICA 0.19 12/18/2009 6,245,178
26 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
GOVERNMENT SECURITIES FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 390,358 STARBIRD FUNDING CORPORATION++(p) 0.15% 12/01/2009 $ 390,358
6,245,723 STARBIRD FUNDING CORPORATION++(p) 0.20 12/03/2009 6,245,654
7,807,154 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 0.18 12/18/2009 7,806,490
1,873,717 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 12/17/2009 1,873,567
6,338,785 TULIP FUNDING CORPORATION++(p) 0.19 12/07/2009 6,338,584
2,061,089 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.24 07/01/2032 2,061,089
6,245,723 UBS AG (STAMFORD CT) 0.31 12/04/2009 6,245,791
9,368,585 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 9,368,629
936,858 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.29 12/15/2040 936,858
20,827,783 VFNC CORPORATION(a)+/-++(i) 0.24 09/30/2010 10,413,891
390,358 VICTORY RECEIVABLES CORPORATION++(p) 0.15 12/01/2009 390,358
5,174,269 VICTORY RECEIVABLES CORPORATION++(p) 0.18 12/16/2009 5,173,881
1,561,431 VICTORY RECEIVABLES CORPORATION++(p) 0.19 12/08/2009 1,561,374
405,785,535
--------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $494,805,515) 495,723,951
--------------
SHARES YIELD
- ------------- -------------
SHORT-TERM INVESTMENTS: 18.63%
MUTUAL FUNDS: 18.58%
373,697,943 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++(u) 0.13 373,697,943
--------------
PRINCIPAL
- -------------
US TREASURY BILLS: 0.05%
$ 1,000,000 US TREASURY BILLS### 0.10 12/24/2009 999,936
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $374,697,879) 374,697,879
--------------
TOTAL INVESTMENTS IN SECURITIES
(COST $2,873,281,711)* 146.08% $2,937,112,551
OTHER ASSETS AND LIABILITIES, NET (46.08) (926,472,857)
------ --------------
TOTAL NET ASSETS 100.00% $2,010,639,694
====== ==============
Wells Fargo Advantage Income Funds 27
Portfolio of Investments--November 30, 2009 (Unaudited)
GOVERNMENT SECURITIES FUND
- ----------
(a) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
%% Securities issued on a when-issued (TBA) basis.
+/- Variable rate investments.
<< 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.
(c) Interest-only securities entitle holders to receive only the interest
payments on the underlying mortgages. The principal amount shown is the
notional amount of the underlying mortgages. Interest rate disclosed
represents the coupon rate.
(i) Illiquid security.
## Zero coupon bond. Interest rate presented is yield to maturity.
(s) Rate shown is the 1-day annualized yield at period end.
(p) Asset-backed commercial paper.
ss These securities are subject to a demand feature which reduces the
effective maturity.
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The Wells
Fargo Advantage Money Market Fund does not pay an investment advisory fee.
+++ Short-term security of an affiliate of the Fund with a cost of
$373,697,943.
(u) Rate shown is the 7-day annualized yield at period end.
# Security pledged as collateral for futures transactions.
* Cost for federal income tax purposes is $2,878,554,270 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 80,404,875
Gross unrealized depreciation (21,846,594)
------------
Net unrealized appreciation $ 58,558,281
The accompanying notes are an integral part of these financial statements.
28 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
HIGH INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
CORPORATE BONDS & NOTES: 90.84%
AEROSPACE: 1.18%
$ 2,820,000 TRIUMPH GROUP INCORPORATED++ 8.00% 11/15/2017 $ 2,820,000
4,500,000 SPIRIT AEROSYSTEMS INCORPORATED++ 7.50 10/01/2017 4,410,000
7,230,000
--------------
AGRICULTURAL CHEMICALS: 0.61%
3,500,000 TERRA CAPITAL INCORPORATED++ 7.75 11/01/2019 3,710,000
--------------
AMUSEMENT & RECREATION SERVICES: 1.81%
3,540,000 PENN NATIONAL GAMING INCORPORATED++ 8.75 08/15/2019 3,522,300
2,320,000 SHINGLE SPRINGS TRIBAL GAMING AUTHORITY++ 9.38 06/15/2015 1,682,000
1,222,000 TOWN SPORTS INTERNATIONAL INCORPORATED(0)(0) 32.22 02/01/2014 647,660
5,000,000 YONKERS RACING CORPORATION++ 11.38 07/15/2016 5,200,000
11,051,960
--------------
APPAREL & ACCESSORY STORES: 0.49%
2,915,000 WARNACO INCORPORATED 8.88 06/15/2013 2,987,875
--------------
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR
MATERIALS: 0.76%
4,455,000 LEVI STRAUSS & COMPANY 9.75 01/15/2015 4,666,613
--------------
AUTO PARTS & EQUIPMENT: 0.68%
1,785,000 TRW AUTOMOTIVE INCORPORATED++ 7.25 03/15/2017 1,651,125
2,500,000 TRW AUTOMOTIVE INCORPORATED++ 8.88 12/01/2017 2,493,750
4,144,875
--------------
BEVERAGES: 0.04%
240,000 COTT BEVERAGES INCORPORATED++ 8.38 11/15/2017 240,000
--------------
BUSINESS SERVICES: 4.03%
350,000 AFFINITY GROUP INCORPORATED 9.00 02/15/2012 242,813
52,719 AFFINITY GROUP INCORPORATED#### 10.88 02/15/2012 21,022
3,590,000 CLEAN HARBORS INCORPORATED++ 7.63 08/15/2016 3,612,438
2,453,952 COSO GEOTHERMAL POWER HOLDINGS++(i) 7.00 07/15/2026 2,049,050
3,555,000 FIRST DATA CORPORATION<< 9.88 09/24/2015 3,163,950
4,305,000 IRON MOUNTAIN INCORPORATED 8.38 08/15/2021 4,401,863
6,210,000 LAMAR MEDIA CORPORATION SERIES C 6.63 08/15/2015 5,837,400
1,490,000 RAINBOW NATIONAL SERVICES LLC++ 10.38 09/01/2014 1,560,775
4,000,000 UNITED RENTALS NORTH AMERICA INCORPORATED<< 7.75 11/15/2013 3,690,000
24,579,311
--------------
CASINO & GAMING: 2.10%
3,322,000 POKAGON GAMING AUTHORITY++ 10.38 06/15/2014 3,463,185
5,850,000 TUNICA-BILOXI GAMING AU++ 9.00 11/15/2015 5,235,750
2,110,000 TURNING STONE CASINO RESORT ENTERPRISE++ 9.13 12/15/2010 2,094,175
1,350,000 TURNING STONE CASINO RESORT ENTERPRISE++ 9.13 09/15/2014 1,312,875
1,301,000 WATERFORD GAMING LLC++(i) 8.63 09/15/2014 741,570
12,847,555
--------------
CHEMICALS & ALLIED PRODUCTS: 1.53%
6,000,000 NALCO COMPANY++ 8.25 05/15/2017 6,255,000
3,000,000 ROHM & HAAS COMPANY 7.85 07/15/2029 3,075,444
9,330,444
--------------
Wells Fargo Advantage Income Funds 29
Portfolio of Investments--November 30, 2009 (Unaudited)
HIGH INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COAL MINING: 2.11%
$ 2,250,000 ARCH COAL INCORPORATED++ 8.75% 08/01/2016 $ 2,317,500
2,750,000 ARCH WESTERN FINANCE LLC 6.75 07/01/2013 2,736,250
3,145,000 FOUNDATION PA COAL COMPANY 7.25 08/01/2014 3,152,863
4,770,000 MASSEY ENERGY COMPANY 6.88 12/15/2013 4,698,450
12,905,063
--------------
COMMUNICATIONS: 11.41%
2,300,000 CCH II LLC/CCH II CAPITAL CORPORATION#### 10.25 09/15/2010 2,863,500
3,825,000 CENTENNIAL CELLULAR COMMUNICATIONS CORPORATION 10.13 06/15/2013 3,939,750
3,000,000 CHARTER COMMUNICATION OPT LLC CAPITAL++ 10.38 04/30/2014 3,052,500
2,000,000 CRICKET COMMUNICATIONS INCORPORATED SERIES I++ 7.75 05/15/2016 1,975,000
4,345,000 CSC HOLDINGS INCORPORATED++ 8.50 06/15/2015 4,567,681
1,410,000 CSC HOLDINGS INCORPORATED++ 8.63 02/15/2019 1,494,600
350,000 ECHOSTAR DBS CORPORATION 7.13 02/01/2016 346,500
3,900,000 ECHOSTAR DBS CORPORATION 7.75 05/31/2015 3,958,500
300,000 FISHER COMMUNICATIONS INCORPORATED 8.63 09/15/2014 285,750
3,635,000 FRONTIER COMMUNICATIONS CORPORATION 8.25 05/01/2014 3,734,963
3,125,000 INTELSAT BERMUDA LIMITED++(o)(o) 11.25 02/04/2017 3,093,750
4,000,000 METROPCS WIRELESS INCORPORATED 9.25 11/01/2014 4,010,000
825,000 METROPCS WIRELESS INCORPORATED 9.25 11/01/2014 827,063
4,355,000 NEXTEL COMMUNICATIONS INCORPORATED SERIES D 7.38 08/01/2015 4,028,375
425,000 NIELSEN FINANCE LLC COMPANY(o)(o) 11.19 08/01/2016 371,875
1,950,000 NIELSEN FINANCE LLC COMPANY 11.50 05/01/2016 2,096,250
3,255,000 NIELSEN FINANCE LLC COMPANY 11.63 02/01/2014 3,499,125
2,865,000 QWEST COMMUNICATIONS INTERNATIONAL INCORPORATED++ 8.00 10/01/2015 2,865,000
5,750,000 QWEST CORPORATION++ 8.38 05/01/2016 6,008,750
2,600,000 SPRINT CAPITAL CORPORATION 6.90 05/01/2019 2,268,500
4,430,000 SPRINT NEXTEL CORPORATION 6.00 12/01/2016 3,820,875
955,000 SPRINT NEXTEL CORPORATION 8.38 08/15/2017 931,125
4,300,000 TIME WARNER TELECOMMUNICATION HOLDINGS 9.25 02/15/2014 4,418,250
1,980,000 VALOR TELECOMMUNICATIONS ENTERPRISES 7.75 02/15/2015 2,039,400
3,130,000 WINDSTREAM CORPORATION 8.63 08/01/2016 3,153,475
69,650,557
--------------
COMPUTER SOFTWARE & SERVICES: 0.87%
5,000,000 SUNGARD DATA SYSTEMS INCORPORATED 10.63 05/15/2015 5,300,000
--------------
DIVERSIFIED FINANCIAL SERVICES: 0.16%
950,000 UPC GERMANY GMBH++ 8.13 12/01/2017 947,625
--------------
EATING & DRINKING PLACES: 0.23%
1,400,000 O'CHARLEYS INCORPORATED 9.00 11/01/2013 1,382,500
--------------
ELECTRIC INTERGRATED: 0.27%
1,830,000 MIRANT AMERICAS GENERATION LLC SENIOR NOTES 8.50 10/01/2021 1,656,150
--------------
ELECTRIC UTILITIES: 0.30%
1,910,000 RRI ENERGY INCORPORATED 7.88 06/15/2017 1,819,275
--------------
ELECTRIC, GAS & SANITARY SERVICES: 5.64%
3,900,000 EL PASO CORPORATION 7.00 06/15/2017 3,822,000
4,000,000 EL PASO NATURAL GAS CORPORATION 7.25 06/01/2018 3,999,720
2,735,000 ENERGY FUTURE HOLDINGS 10.88 11/01/2017 1,921,338
4,020,000 INERGY LP/INERGY FINANCE CORPORATION 6.88 12/15/2014 3,889,350
3,450,000 IPALCO ENTERPRISES INCORPORATED++ 7.25 04/01/2016 3,441,375
2,950,000 MIRANT NORTH AMERICA LLC 7.38 12/31/2013 2,905,750
4,935,000 NRG ENERGY INCORPORATED 7.38 02/01/2016 4,910,325
30 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
HIGH INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
ELECTRIC, GAS & SANITARY SERVICES (continued)
$ 4,000,000 NRG ENERGY INCORPORATED 8.50% 06/15/2019 $ 4,040,000
3,550,000 SIERRA PACIFIC RESOURCES 6.75 08/15/2017 3,526,247
2,775,000 TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC SERIES B 10.25 11/01/2015 1,970,250
34,426,355
--------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT
COMPUTER EQUIPMENT: 1.23%
2,615,000 HEXCEL CORPORATION 6.75 02/01/2015 2,490,788
3,000,000 JARDEN CORPORATION<< 7.50 05/01/2017 2,970,000
2,000,000 JARDEN CORPORATION 8.00 05/01/2016 2,060,000
7,520,788
--------------
ENERGY: 0.15%
1,000,000 WHITE PINE HYDRO PORTFOLIO++ 7.26 07/20/2015 887,499
--------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT: 1.32%
4,000,000 BALL CORPORATION 7.38 09/01/2019 4,090,000
3,800,000 BWAY CORPORATIOn++ 10.00 04/15/2014 3,980,500
8,070,500
--------------
FOOD & KINDRED PRODUCTS: 3.29%
5,700,000 CONSTELLATION BRANDS INCORPORATED 7.25 09/01/2016 5,771,250
4,770,000 DEAN FOODS COMPANY 7.00 06/01/2016 4,603,050
1,900,000 JBS USA LLC/JBS USA FINANCE INCORPORATED++ 11.63 05/01/2014 2,111,375
3,000,000 PINNACLE FOODS LLC CORPORATION 9.25 04/01/2015 3,098,550
4,300,000 SMITHFIELD FOODS INCORPORATED++ 10.00 07/15/2014 4,504,250
20,088,475
--------------
FOREST PRODUCTS & PAPER: 1.54%
1,334,000 APPLETON PAPERS INCORPORATED++ 11.25 12/15/2015 1,128,898
3,500,000 BOISE PAPER HOLDINGS LLC++ 9.00 11/01/2017 3,570,000
4,325,000 VERSO PAPER HOLDINGS LLC++ 11.50 07/01/2014 4,714,250
9,413,148
--------------
GENERAL MERCHANDISE STORES: 1.70%
7,000,000 FEDERATED RETAIL HOLDINGS INCORPORATED 5.90 12/01/2016 6,615,000
2,000,000 JCPENNEY CORPORATION INCORPORATED 5.75 02/15/2018 1,890,000
2,000,000 JCPENNEY CORPORATION INCORPORATED 7.13 11/15/2023 1,892,500
10,397,500
--------------
HEALTH CARE: 0.64%
4,000,000 HEALTHSOUTH CORPORATION 8.13 02/15/2020 3,920,000
--------------
HEALTH SERVICES: 4.65%
3,385,000 COMMUNITY HEALTH SYSTEMS INCORPORATED SERIES WI 8.88 07/15/2015 3,452,700
3,295,000 DAVITA INCORPORATED 7.25 03/15/2015 3,278,525
1,915,000 HCA INCORPORATED++ 7.88 02/15/2020 1,962,875
1,000,000 HCA INCORPORATED++ 8.50 04/15/2019 1,055,000
8,530,000 HCA INCORPORATED 9.25 11/15/2016 9,020,475
5,210,000 TENET HEALTHCARE CORPORATION 9.25 02/01/2015 5,470,500
3,985,000 US ONCOLOGY INCORPORATED++ 9.13 08/15/2017 4,154,363
28,394,438
--------------
HOLDING & OTHER INVESTMENT OFFICES: 0.42%
2,430,000 AXCAN INTERMEDIATE HOLDINGS INCORPORATED 9.25 03/01/2015 2,587,950
--------------
Wells Fargo Advantage Income Funds 31
Portfolio of Investments--November 30, 2009 (Unaudited)
HIGH INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES: 0.01%
$ 75,000 IKON OFFICE SOLUTIONS INCORPORATED 6.75% 12/01/2025 $ 79,147
--------------
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES: 0.65%
3,900,000 AMERISTAR CASINOS INCORPORATED++ 9.25 06/01/2014 3,978,000
--------------
HOUSEHOLD PRODUCTS, WARE: 1.34%
3,820,000 ACCO BRANDS CORPORATION++ 10.63 03/15/2015 4,101,725
4,200,000 YANKEE ACQUISITION CORPORATION<< 8.50 02/15/2015 4,095,000
8,196,725
--------------
INDUSTRIAL: 0.37%
1,329,852 PARMALAT BAKERY(i) 5.00 07/09/2012 1,117,076
1,329,852 PARMALAT DAIRY(i) 5.00 07/09/2010 1,117,076
2,234,152
--------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 0.93%
3,345,000 CASELLA WASTE SYSTEMS INCORPORATED++ 11.00 07/15/2014 3,587,513
2,050,000 SPX CORPORATION 7.63 12/15/2014 2,091,000
5,678,513
--------------
INTERNET SOFTWARE: 0.59%
3,525,000 NETFLIX INCORPORATED++ 8.50 11/15/2017 3,613,125
--------------
JUSTICE, PUBLIC ORDER & SAFETY: 0.49%
3,000,000 CORRECTIONS CORPORATION OF AMERICA<< 6.25 03/15/2013 3,003,750
--------------
LEGAL SERVICES: 0.78%
4,850,000 FTI CONSULTING INCORPORATED 7.75 10/01/2016 4,783,313
--------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS:
PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 0.97%
4,000,000 BIO-RAD LABORATORIES INCORPORATED++ 8.00 09/15/2016 4,170,000
1,660,000 INVACARE CORPORATION 9.75 02/15/2015 1,738,850
5,908,850
--------------
MEDIA: 1.41%
950,000 BELO CORPORATION 8.00 11/15/2016 957,125
2,850,000 SALEM COMMUNICATIONS++ 9.63 12/15/2016 2,907,000
4,700,000 SINCLAIR TELEVISION GROUP++ 9.25 11/01/2017 4,764,625
8,628,750
--------------
METAL MINING: 0.01%
83,550 NORANDA ALUMINUM HOLDING CORPORATION(Y) 7.02 11/15/2014 49,712
--------------
MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS: 0.50%
2,860,000 TEREX CORPORATION 10.88 06/01/2016 3,038,750
--------------
MISCELLANEOUS MANUFACTURING INDUSTRIES: 1.11%
2,410,000 ALH FINANCE LLC/ALH FINANCE CORPORATION 8.50 01/15/2013 2,361,800
4,735,000 CLARKE AMERICAN CORPORATION 9.50 05/15/2015 4,444,981
6,806,781
--------------
MOTION PICTURES: 1.67%
5,295,000 CINEMARK USA INCORPORATED++ 8.63 06/15/2019 5,453,850
602,000 MUZAK FINANCE CORPORATION LLC####(i) 1.00 03/15/2010 30,100
4,360,000 WMG ACQUISITION CORPORATION++ 9.50 06/15/2016 4,687,000
10,170,950
--------------
32 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
HIGH INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
NON-DEPOSITORY CREDIT INSTITUTIONS: 4.66%
$ 5,025,000 DISCOVER FINANCIAL SERVICES 10.25% 07/15/2019 $ 5,901,913
1,830,000 FORD MOTOR CREDIT COMPANY LLC 7.00 10/01/2013 1,786,464
6,835,000 FORD MOTOR CREDIT COMPANY LLC 7.80 06/01/2012 6,829,676
1,695,000 FORD MOTOR CREDIT COMPANY LLC<< 8.00 12/15/2016 1,688,123
2,870,000 GMAC LLC++ 6.00 12/15/2011 2,701,388
2,595,000 GMAC LLC++ 6.75 12/01/2014 2,322,525
3,000,000 GMAC LLC++ 6.88 09/15/2011 2,887,500
1,500,000 GMAC LLC++ 7.25 03/02/2011 1,466,250
3,375,000 GMAC LLC++ 8.00 11/01/2031 2,894,063
28,477,902
--------------
OFFICE EQUIPMENT: 0.36%
2,000,000 INTERFACE INCORPORATED 11.38 11/01/2013 2,187,500
--------------
OIL & GAS: 1.35%
475,000 ANTERO RESOURCES FINANCE++ 9.38 12/01/2017 476,188
3,340,000 COMSTOCK RESOURCES INCORPORATED 8.38 10/15/2017 3,348,350
4,400,000 PLAINS EXPLORATION & PRODUCTION COMPANY 8.63 10/15/2019 4,411,000
8,235,538
--------------
OIL & GAS EXTRACTION: 6.14%
4,870,000 BILL BARRETT CORPORATION 9.88 07/15/2016 5,137,850
4,750,000 CHESAPEAKE ENERGY CORPORATION 6.38 06/15/2015 4,417,500
2,975,000 HILCORP ENERGY++ 7.75 11/01/2015 2,863,438
4,855,000 KEY ENERGY SERVICES INCORPORATED 8.38 12/01/2014 4,739,694
4,000,000 PENN VIRGINIA CORPORATION 10.38 06/15/2016 4,310,000
2,700,000 PETROHAWK ENERGY CORPORATION 7.88 06/01/2015 2,693,250
2,000,000 PRIDE INTERNATIONAL INCORPORATED 8.50 06/15/2019 2,215,000
3,340,000 QUICKSILVER RESOURCES INCORPORATED 11.75 01/01/2016 3,711,575
3,225,000 RANGE RESOURCES CORPORATION 7.50 05/15/2016 3,241,125
4,015,000 SOUTHWESTERN ENERGY COMPANY 7.50 02/01/2018 4,145,488
37,474,920
--------------
PACKAGING: 0.30%
1,900,000 GRAHAM PACK COMPANY LP GPC++ 8.25 01/01/2017 1,857,250
--------------
PAPER & ALLIED PRODUCTS: 3.49%
4,200,000 DOMTAR CORPORATION 7.13 08/15/2015 4,158,000
955,000 DOMTAR CORPORATION<< 10.75 06/01/2017 1,107,800
5,000,000 GEORGIA-PACIFIC LLC++ 7.00 01/15/2015 5,062,500
4,500,000 GRAHAM PACKAGING COMPANY INCORPORATED 9.88 10/15/2014 4,567,500
2,485,000 P.H. GLATFELTER COMPANY 7.13 05/01/2016 2,463,256
1,425,000 ROCK-TENN COMPANY 9.25 03/15/2016 1,531,875
2,250,000 ROCK-TENN COMPANY++ 9.25 03/15/2016 2,418,750
21,309,681
--------------
PERSONAL SERVICES: 0.92%
200,000 SERVICE CORPORATION INTERNATIONAL 7.50 04/01/2027 176,000
1,100,000 SERVICE CORPORATION INTERNATIONAL 7.63 10/01/2018 1,089,000
75,000 SERVICE CORPORATION INTERNATIONAL 7.88 02/01/2013 72,750
4,465,000 SERVICE CORPORATION INTERNATIONAL SERIES WI 7.00 06/15/2017 4,308,725
5,646,475
--------------
Wells Fargo Advantage Income Funds 33
Portfolio of Investments--November 30, 2009 (Unaudited)
HIGH INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
PETROLEUM REFINING & RELATED INDUSTRIES: 2.43%
$ 4,645,000 ASHLAND INCORPORATED++ 9.13% 06/01/2017 $ 4,993,375
4,670,000 HOLLY CORPORATION++ 9.88 06/15/2017 4,845,125
2,790,000 SANDRIDGE ENERGY INCORPORATED++ 8.00 06/01/2018 2,629,575
2,460,000 SANDRIDGE ENERGY INCORPORATED(y) 8.63 04/01/2015 2,358,525
14,826,600
--------------
PIPELINES: 0.74%
2,890,000 DYNEGY HOLDINGS INCORPORATED 8.38 05/01/2016 2,651,575
2,000,000 DYNEGY HOLDINGS INCORPORATED SENIOR NOTES 7.50 06/01/2015 1,840,000
4,491,575
--------------
PRIMARY METAL INDUSTRIES: 1.33%
2,510,000 BELDEN CDT INCORPORATED 7.00 03/15/2017 2,428,425
2,000,000 BELDEN CDT INCORPORATED++ 9.25 06/15/2019 2,130,000
3,545,000 STEEL DYNAMICS INCORPORATED++ 8.25 04/15/2016 3,580,450
8,138,875
--------------
PUBLISHING: 0.43%
2,860,000 TL ACQUISITIONS INCORPORATED SENIOR NOTES++ 10.50 01/15/2015 2,652,650
--------------
REAL ESTATE INVESTMENT TRUSTS (REITS): 0.73%
4,715,000 VENTAS REALTY LP 6.75 04/01/2017 4,479,250
--------------
RENTAL AUTO/EQUIPMENT: 0.39%
2,630,000 AVIS BUDGET CAR RENTAL LLC 7.75 05/15/2016 2,353,850
--------------
RESTAURANTS: 0.32%
1,900,000 LANDRY S RESTAURANT INCORPORATED++ 11.63 12/01/2015 1,928,500
--------------
RETAIL: 1.25%
3,755,000 FERRELLGAS PARTNERS LP++ 9.13 10/01/2017 3,905,200
3,750,000 TOYS R US PROPERTY COMPANY++ 8.50 12/01/2017 3,750,000
7,655,200
--------------
RUBBER & MISCELLANEOUS PLASTICS PRODUCTS: 0.45%
1,654,000 GOODYEAR TIRE & RUBBER COMPANY<< 9.00 07/01/2015 1,691,215
955,000 GOODYEAR TIRE & RUBBER COMPANY 10.50 05/15/2016 1,026,625
2,717,840
--------------
STONE, CLAY, GLASS & CONCRETE PRODUCTS: 0.93%
525,000 OWENS-BROCKWAY GLASS CONTAINER INCORPORATED 8.25 05/15/2013 535,500
5,160,000 OWENS-ILLINOIS INCORPORATED 7.80 05/15/2018 5,172,900
5,708,400
--------------
TELECOMMUNICATIONS: 2.86%
4,770,000 CINCINNATI BELL 8.25 10/15/2017 4,734,225
1,950,000 FRONTIER COMMUNICATIONS 8.13 10/01/2018 1,954,875
4,295,000 GEOEYE INCORPORATED++ 9.63 10/01/2015 4,445,325
3,850,000 GLOBAL CROSSING LIMITED++ 12.00 09/15/2015 4,100,250
240,000 INMARSAT FINANCE PLC++ 7.38 12/01/2017 242,400
2,000,000 INTELSAT JACKSON HOLDING++ 8.50 11/01/2019 2,000,000
17,477,075
--------------
TELECOMMUNICATIONS EQUIPMENT: 0.57%
3,500,000 CROWN CASTLE INTERNATIONAL CORPORATION 7.13 11/01/2019 3,456,250
--------------
34 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
HIGH INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
TEXTILE MILL PRODUCTS: 0.36%
$ 2,190,000 INTERFACE INCORPORATED 9.50% 02/01/2014 $ 2,170,828
--------------
WHOLESALE TRADE NON-DURABLE GOODS: 0.84%
5,000,000 SUPERVALU INCORPORATED 8.00 05/01/2016 5,100,000
--------------
TOTAL CORPORATE BONDS & NOTES (COST $539,959,267) 554,673,133
--------------
MUNICIPAL BONDS & NOTES: 0.46%
ALABAMA: 0.46%
4,400,000 COUNTY OF JEFFERSON AL WATERS SUB-SERIES B-1-C (SEWER
REVENUE, FGIC INSURED)(a)+/-ss(m)(n) 0.71 02/01/2042 1,540,000
500,000 COUNTY OF JEFFERSON AL SEWER REVENUE SERIES C-2 (SEWER
REVENUE, FGIC INSURED)(a)+/-ss(m)(n) 0.67 02/01/2042 175,000
2,750,000 COUNTY OF JEFFERSON AL SEWER REVENUE SERIES C-5 (SEWER
REVENUE, XLCA COMPANY INSURED)(a)+/-ss(m)(n) 0.72 02/01/2040 962,500
425,000 COUNTY OF JEFFERSON AL SEWER REVENUE SERIES C-9
(SEWER REVENUE, FIRST SECURITY BANK LOC)(a)+/-ss(m)(n) 0.36 02/01/2042 148,750
2,826,250
--------------
TOTAL MUNICIPAL BONDS & NOTES (COST $2,785,265) 2,826,250
--------------
FOREIGN CORPORATE BONDS: 5.11%
3,000,000 FMC FINANCE III SA 6.88 07/15/2017 2,970,000
3,090,000 INEOS GROUP HOLDINGS PLC++ 8.50 02/15/2016 2,039,400
1,815,000 INMARSAT FINANCE PLC(o)(o) 10.38 11/15/2012 1,878,525
1,545,000 INTELSAT (BERMUDA) LIMITED 9.25 06/15/2016 1,564,313
4,850,000 INTELSAT (BERMUDA) LIMITED<< 11.25 06/15/2016 5,177,375
4,325,000 SEAGATE TECHNOLOGY INTERNATIONAL++ 10.00 05/01/2014 4,725,063
1,000,000 TECK RESOURCES LIMITED 9.75 05/15/2014 1,123,750
1,000,000 TECK RESOURCES LIMITED 10.25 05/15/2016 1,130,000
365,000 VIDEOTRON LIMITED 6.88 01/15/2014 355,875
4,760,000 VIDEOTRON LIMITED++ 9.13 04/15/2018 5,093,200
4,910,000 VIRGIN MEDIA FINANCE PLC 9.50 08/15/2016 5,155,500
TOTAL FOREIGN CORPORATE BONDS (COST $30,947,764) 31,213,001
--------------
TERM LOANS: 0.60%
450,000 GOODYEAR TIRE AND RUBBER COMPANY TERM LOAN 2.34 04/30/2010 401,625
296,141 HCA INCORPORATED TERM LOAN 2.53 11/18/2013 274,795
4,000,000 TXU TEXAS COMPETITIVE ELECTRIC HOLDING TERM LOAN N/A 10/10/2014 2,983,200
TOTAL TERM LOANS (COST $3,963,898) 3,659,620
--------------
COLLATERAL FOR SECURITIES LENDING: 2.43%
COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.35%
538,635 AIM STIT-LIQUID ASSETS PORTFOLIO(s) 0.21 538,635
538,635 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(s) 0.16 538,635
538,635 DREYFUS CASH MANAGEMENT FUND INSTITUTIONAL(s) 0.11 538,635
538,635 DWS MONEY MARKET SERIES INSTITUTIONAL(s) 0.20 538,635
2,154,540
--------------
COLLATERAL INVESTED IN OTHER ASSETS: 2.08%
119,697 ALLIED IRISH BANKS NORTH AMERICA INCORPORATED 0.26 12/07/2009 119,697
42,749 AMSTEL FUNDING CORPORATION++(p) 1.25 12/18/2009 42,724
42,749 ANTALIS US FUNDING CORPORATION++(p) 0.18 12/03/2009 42,748
Wells Fargo Advantage Income Funds 35
Portfolio of Investments--November 30, 2009 (Unaudited)
HIGH INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 128,247 ANTALIS US FUNDING CORPORATION++(p) 0.20% 12/04/2009 $ 128,244
102,597 ARABELLA FINANCE LLC++(p) 0.35 12/01/2009 102,597
148,552 ARABELLA FINANCE LLC++(p) 0.40 12/03/2009 148,549
4,275 ARABELLA FINANCE LLC++(p) 0.40 12/04/2009 4,275
85,498 ASPEN FUNDING CORPORATION++(p) 0.18 12/21/2009 85,489
170,995 BANK OF AMERICA 0.18 12/23/2009 170,977
1,223,045 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (1,223,050) 0.16 12/01/2009 1,223,045
128,247 BANK OF IRELAND 0.35 12/01/2009 128,247
102,597 BANK OF IRELAND 0.50 12/02/2009 102,597
213,744 BANK OF MONTREAL (CHICAGO) 0.18 12/16/2009 213,744
42,749 BARTON CAPITAL CORPORATION++(p) 0.18 12/01/2009 42,749
21,374 BELMONT FUNDING LLC++(p) 0.50 12/01/2009 21,374
102,597 BNP PARIBAS (NEW YORK) 0.21 12/08/2009 102,598
102,597 BNP PARIBAS (NEW YORK) 0.21 12/14/2009 102,598
256,493 BRYANT BANK FUNDING++ 0.18 12/23/2009 256,465
34,199 CALCASIEU PARISH LA+/-ss 0.40 12/01/2027 34,199
47,024 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.35 06/01/2028 47,024
213,744 CHARTA LLC++(p) 0.17 12/09/2009 213,736
22,636 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.30 10/01/2038 22,636
68,398 COOK COUNTY IL+/-ss 0.40 11/01/2030 68,398
381,781 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE
$381,783) 0.17 12/01/2009 381,781
153,896 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.40 12/15/2037 153,896
102,597 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/02/2009 102,597
123,972 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/07/2009 123,972
102,597 DEXIA CREDIT LOCAL DE FRANCE SA 0.27 12/04/2009 102,597
213,744 E.ON AG++ 0.17 12/21/2009 213,724
173,560 ENI FINANCE USA INCORPORATED++ 0.18 12/09/2009 173,553
40,774 FAIRWAY FINANCE CORPORATION++(p) 0.18 12/07/2009 40,773
222,294 FORTIS FUNDING LLC++ 0.20 12/29/2009 222,259
196,645 GDF SUEZ++ 0.17 12/15/2009 196,632
170,995 GEMINI SECURITIZATION INCORPORATED++(p) 0.18 12/10/2009 170,988
340,623 GOLDMAN SACHS REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $340,625) 0.17 12/01/2009 340,623
42,749 GRAMPIAN FUNDING++(p) 0.25 12/03/2009 42,748
205,194 GRAMPIAN FUNDING++(p) 0.28 12/15/2009 205,172
1,437,378 GRYPHON FUNDING LIMITED(i)(a) 0.00 08/05/2010 534,561
14,107 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.30 11/01/2042 14,107
128,247 HOUSTON TX UTILITY SYSTEM+/-ss 0.27 05/15/2034 128,247
42,749 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.30 07/01/2029 42,749
17,100 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.29 01/01/2018 17,100
42,749 ING USA FUNDING LLC 0.18 12/09/2009 42,747
170,995 ING USA FUNDING LLC 0.19 12/07/2009 170,990
1,053,554 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $1,053,559) 0.17 12/01/2009 1,053,554
128,247 JUPITER SECURITIZATION CORPORATION++(p) 0.18 12/02/2009 128,246
25,649 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.29 04/15/2025 25,649
256,493 KBC BANK NV BRUSSELS 0.18 12/01/2009 256,493
34,199 LLOYDS TSB BANK PLC 0.18 12/17/2009 34,196
170,995 LLOYDS TSB BANK PLC (NEW YORK) 0.20 12/07/2009 170,995
73,528 LMA AMERICAS LLC++(p) 0.18 12/11/2009 73,524
38,474 LMA AMERICAS LLC++(p) 0.18 12/17/2009 38,471
128,247 LMA AMERICAS LLC++(p) 0.19 12/21/2009 128,233
38,474 LOUISIANA PUBLIC FACILITIES AUTHORITY+/-ss 0.19 10/01/2033 38,474
36 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
HIGH INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 282,570 MASSACHUSETTS HEFA+/-ss 0.25% 10/01/2034 $ 282,570
30,779 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.24 02/01/2036 30,779
162,446 NATIXIS 0.27 12/07/2009 162,446
17,100 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.31 01/01/2018 17,100
200,492 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.22 07/01/2034 200,492
148,766 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.24 12/01/2040 148,766
213,821 NEWPORT FUNDING CORPORATION++(p) 0.18 12/15/2009 213,806
54,377 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.30 01/01/2034 54,377
127,263 RBS SECURITIES INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE
$127,264) 0.18 12/01/2009 127,263
29,924 REGENCY MARKETS #1 LLC++(p) 0.18 12/04/2009 29,924
68,398 REGENCY MARKETS #1 LLC++(p) 0.20 12/09/2009 68,395
188,095 ROYAL BANK OF SCOTLAND PLC 0.20 12/02/2009 188,094
119,697 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.20 12/01/2028 119,697
213,744 SOCIETE GENERALE NORTH AMERICA 0.19 12/10/2009 213,734
10,687 STARBIRD FUNDING CORPORATION++(p) 0.15 12/01/2009 10,687
170,995 STARBIRD FUNDING CORPORATION++(p) 0.20 12/03/2009 170,993
58,993 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 12/17/2009 58,989
8,550 TULIP FUNDING CORPORATION++(p) 0.19 12/07/2009 8,550
170,995 TULIP FUNDING CORPORATION++(p) 0.19 12/10/2009 170,987
76,948 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.24 07/01/2032 76,948
182,110 UBS AG (STAMFORD CT) 0.31 12/04/2009 182,112
256,493 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 256,496
25,649 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.29 12/15/2040 25,649
1,831,507 VFNC CORPORATION++(a)+/-(i) 0.24 09/30/2010 915,754
10,687 VICTORY RECEIVABLES CORPORATION++(p) 0.15 12/01/2009 10,687
128,247 VICTORY RECEIVABLES CORPORATION++(p) 0.19 12/08/2009 128,242
12,667,898
--------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $14,872,434) 14,822,438
--------------
SHARES YIELD
- ------------- -------------
SHORT-TERM INVESTMENTS: 2.58%
MUTUAL FUNDS: 2.54%
15,470,404 WELLS FARGO ADVANTAGE MONEY MARKET TRUST(u)~+++ 0.13 15,470,404
--------------
PRINCIPAL
- -------------
US TREASURY BILLS: 0.04%
$ 250,000 US TREASURY BILLS### 0.10 12/24/2009 249,984
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $15,720,388) 15,720,388
--------------
TOTAL INVESTMENTS IN SECURITIES
(COST $608,249,016)* 102.02% $ 622,914,830
OTHER ASSETS AND LIABILITIES, NET (2.02) (12,323,259)
------ --------------
TOTAL NET ASSETS 100.00% $ 610,591,571
====== ==============
Wells Fargo Advantage Income Funds 37
Portfolio of Investments--November 30, 2009 (Unaudited)
HIGH INCOME FUND
- ----------
++ 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.
(0)(0) Stepped coupon bond. Interest rate presented is yield to maturity.
#### This security is currently in default with regards to scheduled interest
and/or principal payments.
(i) Illiquid security.
<< All or a portion of this security is on loan.
(a) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
(Y) Payment-in-kind (PIK) securities are securities in which the issuer may
make interest or dividend payments in cash or additional securities. These
additional securities generally have the same terms as the original
holdings.
+/- Variable rate investments.
ss These securities are subject to a demand feature which reduces the
effective maturity.
(s) Rate shown is the 1-day annualized yield at period end.
(p) Asset-backed commercial paper.
(u) Rate shown is the 7-day annualized yield at period end.
(m) An auction-rate security whose interest rate resets as predetermined
short-term intervals through a Dutch auction; rate shown represents the
rate in effect at period-end.
(n) Auction to set interest rate on security failed at period end due to
insufficient investor interest; failed auction does not itself cause a
default.
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The Wells
Fargo Advantage Money Market Fund does not pay an investment advisory fee.
+++ Short-term security of an affiliate of the Fund with a cost of $15,470,404.
## Zero coupon bond. Interest rate presented is yield to maturity.
# Security pledged as collateral for futures transactions.
* Cost for federal income tax purposes is $608,707,705 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $23,788,483
Gross unrealized depreciation (9,581,358)
-----------
Net unrealized appreciation $14,207,125
The accompanying notes are an integral part of these financial statements.
38 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
AGENCY NOTES - INTEREST BEARING: 3.90%
$ 5,000,000 FHLB 4.75% 01/18/2011 $ 5,242,660
10,000,000 FHLMC 3.63 10/18/2013 10,685,280
TOTAL AGENCY NOTES - INTEREST BEARING (COST $14,970,763) 15,927,940
--------------
AGENCY SECURITIES: 3.19%
FEDERAL HOME LOAN MORTGAGE CORPORATION: 0.97%
305,000 FHLMC 5.25 07/18/2011 328,175
6,345 FHLMC #170151 10.50 01/01/2016 7,204
8,635 FHLMC #1B0123+/- 3.41 09/01/2031 8,962
6,361 FHLMC #1B0128+/- 3.41 09/01/2031 6,596
2,141 FHLMC #360016 10.50 11/01/2017 2,443
2,636 FHLMC #360056 10.50 02/01/2019 3,076
1,766 FHLMC #360059 10.50 04/01/2019 2,060
1,016 FHLMC #360061 10.50 05/01/2019 1,186
17,477 FHLMC #360063 10.50 06/01/2019 20,305
2,798 FHLMC #360065 10.50 07/01/2019 3,258
458,840 FHLMC #555316 9.00 06/01/2019 507,451
309,047 FHLMC #555408 10.50 08/01/2018 352,448
391,261 FHLMC #555500 8.50 09/01/2017 425,993
558,977 FHLMC #555514 9.00 10/01/2019 640,741
15,745 FHLMC #786823+/- 3.40 07/01/2029 16,111
99,792 FHLMC #789272+/- 3.35 04/01/2032 102,494
306,380 FHLMC #865496+/- 5.81 05/01/2026 323,771
346,253 FHLMC #A01734 9.00 08/01/2018 386,524
579,366 FHLMC #G01126 9.50 12/01/2022 653,059
47,587 FHLMC #G10747 7.50 10/01/2012 50,265
28,798 FHLMC #G11150 7.50 12/01/2011 30,036
7,539 FHLMC #G11345 7.50 12/01/2011 7,902
21,134 FHLMC #G11391 7.50 06/01/2012 22,243
59,654 FHLMC #G90023 7.00 11/17/2013 62,672
3,964,975
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION: 1.75%
3,487 FNMA #100001 9.00 02/15/2020 4,008
469,906 FNMA #100042 11.00 10/15/2020 530,601
113,674 FNMA #100255 8.33 07/15/2020 130,563
365,133 FNMA #190075 8.50 02/01/2023 397,403
293,175 FNMA #302507 9.00 11/01/2024 343,462
42,398 FNMA #313617 8.00 09/01/2023 46,221
603,080 FNMA #323582 8.00 04/01/2017 657,777
13,878 FNMA #392645 8.00 12/01/2013 14,870
387,581 FNMA #426828 8.00 09/01/2019 432,180
189,376 FNMA #426832 8.50 07/01/2018 207,467
123,228 FNMA #545131 8.00 03/01/2013 129,996
21,986 FNMA #545157 8.50 11/01/2012 23,493
199,852 FNMA #545460+/- 3.04 11/01/2031 206,300
1,447,132 FNMA #598559 6.50 08/01/2031 1,601,886
106,761 FNMA #70801 12.00 03/01/2017 126,354
2,102,969 FNMA #712107 6.00 03/01/2033 2,280,366
7,132,947
--------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION: 0.47%
78,952 GNMA #780029 9.00 11/15/2024 89,784
1,108,130 GNMA #780110 12.50 04/15/2019 1,184,410
483 GNMA #780134 8.50 05/15/2010 486
218,742 GNMA #780267 9.00 11/15/2017 244,968
Wells Fargo Advantage Income Funds 39
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (continued)
$ 108,873 GNMA #780288 8.00% 12/15/2023 $ 126,348
227,570 GNMA #781311 7.50 02/15/2013 228,780
33,219 GNMA #781540<< 7.00 05/15/2013 34,744
16,262 GNMA #927 10.00 02/20/2018 18,268
1,927,788
--------------
SMALL BUSINESS ADMINISTRATION: 0.00%
195,730 SBA #0191(c)(i) 3.11 10/06/2015 5,566
--------------
TOTAL AGENCY SECURITIES (COST $13,805,732) 13,031,276
--------------
ASSET BACKED SECURITIES: 4.34%
2,250,000 AMERICAN EXPRESS ISSUANCE TRUST SERIES 2007-1 CLASS A+/- 0.44 09/15/2011 2,247,220
2,150,000 CAPITAL AUTO RECEIVABLES ASSET TRUST SERIES 2007-4 CLASS
A3B+/- 0.94 11/15/2011 2,151,599
1,363,799 CHASE FUNDING MORTGAGE LOAN ASSET-BACKED CERTIFICATES SERIES
2003-5 CLASS 2M1+/- 1.14 05/25/2033 385,834
1,600,000 CHASE ISSUANCE TRUST SERIES 2007-A18 CLASS A+/- 0.50 01/15/2015 1,578,751
2,679,334 CONTIMORTGAGE HOME EQUITY TRUST SERIES 1996-2 CLASS IO+/-(i) 0.54 07/15/2027 837
3,585,051 CONTIMORTGAGE NET INTEREST MARGIN NOTES SERIES 1997-A CLASS
A(i) 7.23 10/16/2028 1,120
697,974 DAIMLER AUTO TRUST SERIES 2008-B CLASS A2A 3.81 07/08/2011 703,092
21,959,561 EASTMAN HILL FUNDING LIMITED SERIES 1A CLASS A2(i)++ 0.83 09/29/2031 384,292
2,545,989 HOME EQUITY ASSET TRUST SERIES 2003-6 CLASS M1+/- 0.94 02/25/2034 1,280,191
92,490 RESIDENTIAL ASSET SECURITIES CORPORATION SERIES 2001-KS1
CLASS AII+/- 0.71 03/25/2032 81,816
2,081,390 STRUCTURED ASSET INVESTMENT LOAN TRUST SERIES 2003-BC10
CLASS M1+/- 1.36 10/25/2033 1,167,476
2,047,680 STRUCTURED ASSET INVESTMENT LOAN TRUST SERIES 2003-BC3 CLASS
M1+/- 1.66 04/25/2033 1,214,619
4,000,000 WILLIAM STREET FUNDING CORPORATION SERIES 2005-1 CLASS A+/-++ 0.55 01/23/2011 3,920,000
2,800,000 WILLIAM STREET FUNDING CORPORATION SERIES 2006-3 CLASS A+/-++ 0.51 06/23/2012 2,604,000
TOTAL ASSET BACKED SECURITIES (COST $26,348,495) 17,720,847
--------------
COLLATERALIZED MORTGAGE OBLIGATIONS: 8.65%
4,392,112 AAMES MORTGAGE TRUST SERIES 2003-1 CLASS M1+/- 1.26 10/25/2033 2,925,756
37,000,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES
2001-PB1 CLASS XP+/-(i)++ 1.78 05/11/2035 294,250
122,003 BANK OF AMERICA MORTGAGE SECURITIES SERIES 2002-K CLASS
3A1+/- 3.93 10/20/2032 117,163
499,991 CDC MORTGAGE CAPITAL TRUST SERIES 2003-HE4 CLASS M1+/- 1.21 03/25/2034 316,642
198,951 CITIGROUP MORTGAGE LOAN TRUST INCORPORATED SERIES 2004-HYB4
CLASS AA+/- 0.57 12/25/2034 167,872
528,847 COUNTRYWIDE HOME LOANS MORTGAGE PASS-THROUGH TRUST SERIES
2001-HYB1 CLASS 2A1+/- 3.09 06/19/2031 499,988
144,019 COUNTRYWIDE HOME LOANS MORTGAGE PASS-THROUGH TRUST SERIES
2004-20 CLASS 3A1+/- 2.46 09/25/2034 97,488
415,180 DREXEL BURNHAM LAMBERT CMO TRUST SERIES T CLASS 4 8.45 09/20/2019 413,232
1,053,593 EQUIFIRST MORTGAGE LOAN TRUST SERIES 2003-2 CLASS 3A3+/- 1.00 09/25/2033 835,521
36,987 FHLMC SERIES 2198 CLASS SC+/- 9.00 06/15/2028 37,528
816,319 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-42 CLASS A6 9.50 02/25/2042 909,430
39,825 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-57 CLASS
2A1+/- 4.77 07/25/2043 41,350
1,375,957 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-59 CLASS
2A1+/- 4.76 10/25/2043 1,327,883
171,258 FNMA GRANTOR TRUST SERIES 2002-T1 CLASS A4 9.50 11/25/2031 199,409
1,266,091 FNMA GRANTOR TRUST SERIES 2002-T12 CLASS A4 9.50 05/25/2042 1,417,231
302,312 FNMA SERIES 1989-29 CLASS Z 10.00 06/25/2019 343,644
253,600 FNMA SERIES 1989-63 CLASS Z 9.40 10/25/2019 283,388
488,815 FNMA SERIES G95-2 CLASS IO+/-(i) 10.00 05/25/2020 113,170
69,212 FNMA WHOLE LOAN SERIES 2003-W11 CLASS A1+/- 4.40 06/25/2033 63,027
2,437,754 FNMA WHOLE LOAN SERIES 2003-W6 CLASS 6A+/- 4.93 08/25/2042 2,550,293
226,318 FNMA WHOLE LOAN SERIES 2003-W6 CLASS PT4+/- 10.04 10/25/2042 250,540
1,766,011 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2000-1
CLASS A2 6.50 01/15/2033 1,828,127
1,427,294 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES
2000-C3 CLASS A2 6.96 09/15/2035 1,465,443
1,503,003 GNMA SERIES 2007-69 CLASS TA+/- 5.01 06/16/2031 1,559,576
141,215 GOLDEN NATIONAL MORTGAGE ASSET BACKED CERTIFICATES SERIES
1998-GN1 CLASS M2(i) 8.02 02/25/2027 141,237
662,868 GSMPS MORTGAGE LOAN TRUST SERIES 1998-1 CLASS A+/-(i)++ 8.00 09/19/2027 674,316
40 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED)
$ 2,127,873 GSMPS MORTGAGE LOAN TRUST SERIES 2004-4 CLASS 1AF+/-++ 0.64% 06/25/2034 $ 1,681,826
1,569,340 GSMPS MORTGAGE LOAN TRUST SERIES 2004-4 CLASS 2A1+/-++ 5.02 06/25/2034 1,204,593
1,535,964 GSMPS MORTGAGE LOAN TRUST SERIES 2006-RP1 CLASS 1AF1+/-++ 0.59 01/25/2036 1,316,497
1,946,492 GSMPS MORTGAGE LOAN TRUST SERIES 2006-RP2 CLASS 1AF1+/-++ 0.64 04/25/2036 1,525,141
365,837 GSR MORTGAGE LOAN TRUST SERIES 2004-1 CLASS 2A2+/- 2.23 04/25/2032 279,600
1,322,242 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES 2001 CLASS A3 6.26 03/15/2033 1,358,604
305,972 JPMORGAN MORTGAGE TRUST SERIES 2005-A2 CLASS 3A1+/- 4.87 04/25/2035 303,538
1,524,263 JPMORGAN MORTGAGE TRUST SERIES 2005-A3 CLASS 7CA1+/- 5.09 06/25/2035 1,235,966
27,116 MASTER MORTGAGES TRUST SERIES 2002-3 CLASS 4A1+/- 3.03 10/25/2032 26,664
7,803,813 MORGAN STANLEY CAPITAL I SERIES 1999-WF1 CLASS X IO+/-++(c) 1.20 11/15/2031 315,861
2,479,021 NOMURA ASSET ACCEPTANCE CORPORATION SERIES 2005-AR1 CLASS
1A1+/- 4.86 02/25/2035 1,696,481
4,940,084 RESIDENTIAL FINANCE LIMITED PARTNERSHIP SERIES 2003-C CLASS
B3+/-++ 1.64 09/10/2035 2,796,087
23,918 SALOMON BROTHERS MORTGAGE SECURITIES VI SERIES 1987-3 CLASS
A## 0.16 10/23/2017 23,622
2,202,042 STRUCTURED ASSET SECURITIES CORPORATION SERIES 1998-RF2 CLASS
A+/-(i)++ 8.26 07/15/2027 2,016,294
10,948 STRUCTURED MORTGAGE ASSET RESIDENTIAL TRUST SERIES 1992-5B
CLASS BO(i)## 0.08 06/25/2023 10,828
87,044 TERWIN MORTGAGE TRUST SERIES 2004-21HE CLASS 1A1+/- 0.72 12/25/2034 69,854
132,374 USGI FHA PROJECT LOAN 7.44 03/15/2013 131,051
225,518 WILSHIRE FUNDING CORPORATION SERIES 1996-3 CLASS M2+/- 5.61 08/25/2032 219,834
225,518 WILSHIRE FUNDING CORPORATION SERIES 1996-3 CLASS M3+/- 5.61 08/25/2032 214,347
66,092 WILSHIRE FUNDING CORPORATION SERIES 1998-2 CLASS M1+/-(i) 2.00 12/28/2037 48,654
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (COST $41,998,112) 35,348,846
--------------
CORPORATE BONDS & NOTES: 50.82%
AGRICULTURE: 0.58%
2,000,000 BAT INTERNATIONAL FINANCE PLC NT++ 8.13 11/15/2013 2,354,098
--------------
AMUSEMENT & RECREATION SERVICES+/-,++: 0.10%
400,000 SAN MANUEL ENTERTAINMENT AUTHORITY SERIES 04-B+/-++ 2.46 12/01/2010 400,000
--------------
AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS: 0.47%
1,715,000 AUTOZONE INCORPORATED 6.50 01/15/2014 1,902,940
--------------
BANKING: 2.23%
2,000,000 BANCO SANTANDER CHILE++ 2.88 11/13/2012 2,012,623
1,000,000 BARCLAYS BANK PLC 2.50 01/23/2013 1,003,101
2,000,000 CITIGROUP INCORPORATED 5.50 10/15/2014 2,037,436
2,000,000 NORDEA BANK AB++ 3.70 11/13/2014 2,034,730
2,000,000 WESTPAC BANKING CORPORATION 2.25 11/19/2012 2,015,276
9,103,166
--------------
BEVERAGES: 0.37%
1,505,000 ANHEUSER BUSCH INBEV++ 3.00 10/15/2012 1,529,527
--------------
BUSINESS SERVICES: 0.40%
1,500,000 THOMPSON CORPORATION 6.20 01/05/2012 1,643,025
--------------
CHEMICALS & ALLIED PRODUCTS: 2.51%
2,000,000 CLOROX COMPANY 5.00 03/01/2013 2,142,544
2,000,000 GLAXOSMITHKLINE CAPITAL INCORPORATED 4.85 05/15/2013 2,183,348
2,000,000 HOSPIRA INCORPORATED 5.90 06/15/2014 2,185,550
1,888,000 MOSAIC COMPANY SENIOR NOTES+/-++ 7.38 12/01/2014 2,010,552
1,670,000 WATSON PHARMACEUTICALS INCORPORATED 5.00 08/15/2014 1,736,473
10,258,467
--------------
COMMERCIAL SERVICES: 0.50%
2,000,000 EQUIFAX INCORPORATED 4.45 12/01/2014 2,052,950
--------------
Wells Fargo Advantage Income Funds 41
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COMMUNICATIONS: 5.99%
$ 945,000 ALLTEL CORPORATION 7.00% 07/01/2012 $ 1,053,685
2,000,000 AT&T INCORPORATED 7.30 11/15/2011 2,220,564
1,433,000 BRITISH TELECOMMUNICATIONS PLC 9.13 12/15/2010 1,538,166
2,000,000 CBS CORPORATION 6.63 05/15/2011 2,094,340
1,000,000 CELLCO PART/VERI WIRELESS 7.38 11/15/2013 1,164,802
2,290,000 CITIZENS COMMUNICATIONS COMPANY 6.25 01/15/2013 2,249,925
2,594,000 COMCAST CABLE COMMUNICATIONS HOLDINGS INCORPORATED 8.38 03/15/2013 3,036,798
2,000,000 DIRECTV HOLDING FINANCE++ 4.75 10/01/2014 2,064,626
1,475,000 SPRINT CAPITAL CORPORATION 7.63 01/30/2011 1,489,750
1,500,000 TELECOM ITALIA CAPITAL SA 5.25 11/15/2013 1,600,248
2,000,000 TIME WARNER CABLE INCORPORATED 5.40 07/02/2012 2,155,324
2,000,000 VERIZON COMMUNICATIONS INCORPORATED 5.25 04/15/2013 2,184,864
1,500,000 VERIZON NEW ENGLAND INCORPORATED 6.50 09/15/2011 1,615,227
24,468,319
--------------
DEPOSITORY INSTITUTIONS: 5.00%
2,000,000 BANK OF AMERICA CORPORATION+/- 5.38 06/15/2014 2,102,778
1,600,000 BANK OF NEW YORK MELLON CORPORATION+/- 0.44 06/29/2012 1,607,424
1,195,000 HUDSON UNITED BANK MAHWAH NJ SERIES BKNT 7.00 05/15/2012 1,292,845
2,000,000 HUNTINGTON CAPITAL TRUST I+/- 0.98 02/01/2027 823,862
2,000,000 INDEPENDENCE COMMUNITY BANK CORPORATION+/- 2.35 06/20/2013 1,964,492
4,000,000 INTER-AMERICAN DEVELOPMENT BANK+/- 0.72 05/20/2014 4,000,111
5,300,000 JPMORGAN CHASE & COMPANY SERIES 3+/- 0.53 12/26/2012 5,343,767
2,085,000 NATIONAL CITY BANK SERIES MTN 4.50 03/15/2010 2,103,686
1,200,000 PNC FUNDING CORPORATION+/- 0.49 04/01/2012 1,206,434
20,445,399
--------------
DIVERSIFIED FINANCIAL SERVICES: 0.63%
1,500,000 AMERITRADE HOLDING COMPANY 2.95 12/01/2012 1,508,379
1,000,000 HSBC FINANCE CORPORATION 5.70 06/01/2011 1,047,401
2,555,780
--------------
DIVERSIFIED MANUFACTURING: 0.59%
2,000,000 INGERSOLL RAND GL HOLDING COMPANY 9.50 04/15/2014 2,422,270
--------------
EATING & DRINKING PLACES: 1.11%
2,000,000 COCA COLA ENTERPRISES INCORPORATED 7.38 03/03/2014 2,372,928
2,000,000 DARDEN RESTAURANTS INCORPORATED 5.63 10/15/2012 2,160,700
4,533,628
--------------
ELECTRIC, GAS & SANITARY SERVICES: 4.68%
2,000,000 ALLEGHENY ENERGY SUPPLY++ 8.25 04/15/2012 2,208,898
2,000,000 ALLIED WASTE NORTH AMERICA 6.50 11/15/2010 2,096,550
2,000,000 CENTERPOINT ENERGY HOUSTON ELECTRIC LLC SERIES U 7.00 03/01/2014 2,315,956
2,000,000 ENERGY TRANSFER PARTNERS LP 5.65 08/01/2012 2,139,006
2,500,000 ENTERGY GULF STATES INCORPORATED 5.12 08/01/2010 2,501,608
2,000,000 INDIANA MICHIGAN POWER COMPANY 6.38 11/01/2012 2,219,034
2,000,000 NEVADA POWER COMPANY 6.50 04/15/2012 2,177,690
2,000,000 PECO ENERGY COMPANY 5.00 10/01/2014 2,201,502
1,262,320 SALTON SEA FUNDING CORPORATION SERIES C 7.84 05/30/2010 1,270,840
19,131,084
--------------
ELECTRONIC: 0.28%
1,140,000 THERMO FISHER SCIENTIFIC++ 2.15 12/28/2012 1,143,266
--------------
42 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER
EQUIPMENT: 0.99%
$ 2,000,000 AGILENT TECHNOLOGIES INCORPORATED 4.45% 09/14/2012 $ 2,069,032
2,000,000 NATIONAL SEMICONDUCTOR CORPORATION+/- 0.55 06/15/2010 1,973,146
4,042,178
--------------
FINANCIAL SERVICES: 0.25%
1,000,000 MASS MUTUAL GLOBAL FUNDING II++ 3.63 07/16/2012 1,039,812
--------------
FOOD & KINDRED PRODUCTS: 0.75%
2,797,000 KRAFT FOODS INCORPORATED 6.25 06/01/2012 3,057,563
--------------
FOOD STORES: 1.51%
2,000,000 KROGER COMPANY 6.20 06/15/2012 2,202,366
1,600,000 SAFEWAY INCORPORATED 6.50 03/01/2011 1,700,072
2,000,000 YUM! BRANDS INCORPORATED 7.70 07/01/2012 2,263,434
6,165,872
--------------
FURNITURE & FIXTURES: 0.42%
1,670,000 JOHNSON CONTROLS INCORPORATED 4.88 09/15/2013 1,721,107
--------------
GAS DISTRIBUTION: 0.52%
2,000,000 FLORIDA GAS TRANSMISSION COMPANY++ 7.63 12/01/2010 2,107,418
--------------
GENERAL MERCHANDISE STORES: 1.25%
2,000,000 FEDERATED RETAIL HOLDINGS INCORPORATED 5.35 03/15/2012 2,000,000
2,000,000 JCPENNEY COMPANY INCORPORATED 8.00 03/01/2010 2,022,500
1,000,000 TARGET CORPORATION 5.13 01/15/2013 1,089,806
5,112,306
--------------
HEALTH SERVICES: 1.02%
1,825,000 ANTHEM INCORPORATED 6.80 08/01/2012 2,021,585
2,000,000 ROCHE HOLDINGS INCORPORATED++ 4.50 03/01/2012 2,124,806
4,146,391
--------------
HOLDING & OTHER INVESTMENT OFFICES: 0.98%
1,054,000 AVALONBAY COMMUNITIES INCORPORATED SERIES MTN 5.50 01/15/2012 1,111,839
1,000,000 FEDERAL REALTY INVESTMENT TRUST 5.95 08/15/2014 1,036,500
1,720,000 NATIONWIDE HEALTH PROPERTIES INCORPORATED SERIES MTND 8.25 07/01/2012 1,848,904
3,997,243
--------------
HOLDING COMPANY - DIVERSIFIED: 0.52%
2,000,000 HUTCHISON WHAMPOA INTERNATIONAL++ 7.00 02/16/2011 2,126,668
--------------
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES: 0.49%
1,835,000 BEST BUY COMPANY INCORPORATED 6.75 07/15/2013 1,997,724
--------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 0.77%
2,000,000 BLACK & DECKER CORPORATION 7.13 06/01/2011 2,148,320
1,000,000 INGERSOLL-RAND GLOBAL HOLDING COMPANY LIMITED+/- 1.77 08/13/2010 996,252
3,144,572
--------------
INSURANCE AGENTS, BROKERS & SERVICE: 1.06%
2,000,000 METROPOLITAN LIFE GLOBAL FUNDING I SENIOR NOTES++ 5.13 04/10/2013 2,145,390
2,000,000 NEW YORK LIFE GLOBAL FUNDING++ 5.25 10/16/2012 2,179,970
4,325,360
--------------
Wells Fargo Advantage Income Funds 43
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
INSURANCE CARRIERS: 1.04%
$ 2,000,000 PRICOA GLOBAL FUNDING I++ 5.40% 10/18/2012 $ 2,118,876
2,000,000 UNITEDHEALTH GROUP INCORPORATED 4.88 02/15/2013 2,108,854
4,227,730
--------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL &
OPTICAL GOODS: 1.37%
2,000,000 BOSTON SCIENTIFIC CORPORATION 6.00 06/15/2011 2,060,000
2,000,000 ROPER INDUSTRIES INCORPORATED 6.63 08/15/2013 2,207,352
1,240,000 XEROX CORPORATION 6.88 08/15/2011 1,339,038
5,606,390
--------------
MISCELLANEOUS MANUFACTURING INDUSTRIES: 0.47%
1,725,000 HASBRO INCORPORATED 6.13 05/15/2014 1,916,818
--------------
MISCELLANEOUS RETAIL: 0.81%
1,939,601 CVS CAREMARK CORPORATION++ 7.77 01/10/2012 2,115,160
1,000,000 STAPLES INCORPORATED 9.75 01/15/2014 1,209,415
3,324,575
--------------
MOTION PICTURES: 0.57%
2,000,000 HISTORIC TWINCORPORATED 9.13 01/15/2013 2,348,338
--------------
NON-DEPOSITORY CREDIT INSTITUTIONS: 1.80%
2,000,000 AMERICAN HONDA FINANCE CORPORATION SERIES MTN+/-++ 0.68 02/05/2010 1,999,534
2,000,000 CME GROUP INCORPORATED 5.40 08/01/2013 2,184,356
3,000,000 GENERAL ELECTRIC CAPITAL CORPORATION 4.80 05/01/2013 3,183,111
7,367,001
--------------
OIL & GAS: 0.66%
2,500,000 KERR MCGEE CORPORATION 6.88 09/15/2011 2,707,260
--------------
PIPELINES: 2.10%
2,000,000 ENTERPRISE PRODUCTS OPERATING LLC 4.60 08/01/2012 2,118,088
2,000,000 PLAINS ALL AMERICAN PIPELINE LP PAA FINANCE CORPORATION 7.75 10/15/2012 2,277,170
2,000,000 WILLIAMS COMPANIES INCORPORATED++ 6.38 10/01/2010 2,046,108
2,010,000 ENTERPRISE PRODUCTS PARTNERS OPERATING LP 7.50 02/01/2011 2,133,766
8,575,132
--------------
PUBLIC FINANCE, TAXATION & MONETARY POLICY: 0.54%
2,005,000 MACQUARIE GROUP LIMITED++ 7.30 08/01/2014 2,186,698
--------------
RAILROAD TRANSPORTATION: 0.56%
2,100,000 CSX CORPORATION 6.30 03/15/2012 2,301,149
--------------
REAL ESTATE INVESTMENT TRUSTS (REITS): 1.27%
465,000 HEALTHCARE REALTY TRUST INCORPORATED 8.13 05/01/2011 491,352
1,499,000 HRPT PROPERTIES TRUST+/- 0.90 03/16/2011 1,384,482
2,000,000 SIMON PROPERTY GROUP LP 4.88 03/18/2010 2,017,458
1,250,000 WASHINGTON REAL ESTATE INVESTMENT TRUST 5.95 06/15/2011 1,279,548
5,172,840
--------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 1.02%
4,000,000 MORGAN STANLEY 3.25 12/01/2011 4,186,980
--------------
44 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
TOBACCO PRODUCTS: 0.56%
$ 2,000,000 ALTRIA GROUP INCORPORATED 7.75% 02/06/2014 $ 2,301,350
--------------
TRANSPORTATION: 0.57%
2,233,000 RYDER SYSTEM INCORPORATED 5.95 05/02/2011 2,322,188
--------------
TRANSPORTATION EQUIPMENT: 0.43%
1,640,000 PACTIV CORPORATION 5.88 07/15/2012 1,753,196
--------------
WHOLESALE TRADE NON-DURABLE GOODS: 1.08%
2,000,000 CARGILL INCORPORATED++ 5.20 01/22/2013 2,158,180
2,000,000 MCKESSON CORPORATION 6.50 02/15/2014 2,239,800
4,397,980
--------------
TOTAL CORPORATE BONDS & NOTES (COST $201,011,001) 207,623,758
--------------
FOREIGN CORPORATE BONDS: 6.03%
2,000,000 AMERICA MOVIL SA DE CV 5.50 03/01/2014 2,147,728
2,000,000 ARCELORMITTAL 5.38 06/01/2013 2,103,106
2,000,000 BP CAPITAL MARKETS PLC 3.63 05/08/2014 2,095,114
2,395,000 COVIDIEN INTERNATIONAL FINANCE 5.15 10/15/2010 2,485,373
2,000,000 DELHAIZE GROUP 5.88 02/01/2014 2,181,534
1,500,000 KOREA DEVELOPMENT BANK 4.63 09/16/2010 1,531,622
2,500,000 PCCW HKT CAPITAL LIMITED++ 8.00 11/15/2011 2,712,500
2,500,000 ROGERS WIRELESS INCORPORATED 9.63 05/01/2011 2,766,188
1,335,000 VIVENDI++ 5.75 04/04/2013 1,419,817
2,000,000 WEATHERFORD INTERNATIONAL LIMITED 5.15 03/15/2013 2,116,360
2,000,000 WESTFIELD CAPITAL CORPORATION++ 4.38 11/15/2010 2,028,680
1,000,000 WOOLWORTHS LIMITED++ 5.25 11/15/2011 1,053,632
TOTAL FOREIGN CORPORATE BONDS (COST $23,231,345) 24,641,654
--------------
MUNICIPAL BONDS & NOTES: 8.75%
ARIZONA: 1.24%
5,000,000 PHOENIX AZ IDA AMERICA WEST ARENA (RECREATIONAL FACILITIES
REVENUE, AMBAC INSURED) 7.13 12/01/2021 5,048,650
--------------
CALIFORNIA: 2.23%
2,500,000 ALAMEDA COUNTY CA CAPITAL APPRECIATION TAXABLE-SERIES B
(OTHER REVENUE, MBIA INSURED)## 3.67 12/01/2009 2,499,750
6,690,000 LOS ANGELES COUNTY CA PENSION OBLIGATION CAPITAL APPRECIATION
TAXABLE SERIES D
(PROPERTY TAX REVENUE, MBIA INSURED)## 2.22 06/30/2010 6,604,234
9,103,984
--------------
GEORGIA: 0.13%
525,000 GEORGIA MUNICIPAL GAS AUTHORITY TAXABLE GAS PORTFOLIO III
SERIES F
(UTILITIES REVENUE) 3.07 08/01/2011 533,174
--------------
ILLINOIS: 0.33%
1,475,000 COOK COUNTY IL SCHOOL DISTRICT #155 SERIES C (GO - SCHOOL
DISTRICTS,
FIRST SECURITY BANK LOC)## 4.47 12/01/2011 1,350,023
--------------
LOUISIANA: 1.30%
2,000,000 PARISH OF IBERVILLE LA DOW CHEMICAL (IDR)+/-ss 5.50 06/01/2029 2,021,960
3,000,000 STATE OF LOUISIANA (GAS & FUELS TAX REVENUE)+/-ss 2.76 05/01/2043 3,000,000
321,760 TOBACCO SETTLEMENT FINANCING CORPORATION LA SERIES 2001A
(OTHER REVENUE LOC) 6.36 05/15/2025 277,753
5,299,713
--------------
Wells Fargo Advantage Income Funds 45
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
MISSISSIPPI: 0.49%
$ 2,000,000 MISSISSIPPI BUSINESS FINANCE CORPORATION WASTE MANAGEMENT
INCORPORATED PROJECT (SOLID WASTE REVENUE)+/-ss 6.88% 03/01/2029 $ 2,015,480
--------------
NEW YORK: 0.25%
1,000,000 BABYLON NY IDA6 TAXABLE COVANTA BABYLON SERIES B (IDR) 4.67 01/01/2012 1,015,800
--------------
OHIO: 0.50%
1,000,000 COLUMBUS OHIO BUILD AMERICA BONDS (AD VALOREM PROPERTY TAX
REVENUE) 2.26 07/01/2013 1,013,490
1,000,000 COLUMBUS OHIO BUILD AMERICA BONDS (AD VALOREM PROPERTY TAX
REVENUE) 2.91 07/01/2014 1,011,880
2,025,370
--------------
PENNSYLVANIA: 0.82%
3,565,000 HARRISBURG PA AUTHORITY RESOURCE RECOVERY FACILITY CAPITAL
APPRECIATION LIMITED OBLIGATION SERIES D (SPECIAL
FACILITIES REVENUE)## 5.87 12/15/2010 3,356,412
--------------
PUERTO RICO: 1.20%
4,500,000 PUERTO RICO PUBLIC FINANCE CORPORATION SERIES A PREREFUNDED
(OTHER REVENUE)ss 6.10 08/01/2017 4,914,270
--------------
TEXAS: 0.26%
1,075,000 REEVES COUNTY TX LEASE RENTALS LAW ENFORCEMENT (LEASE
REVENUE, ACA INSURED) 5.75 03/01/2012 1,072,420
--------------
TOTAL MUNICIPAL BONDS & NOTES (COST $35,528,634) 35,735,296
--------------
US TREASURY SECURITIES: 4.02%
SHARES
- -------------
US TREASURY NOTES: 4.02%
5,000,000 US TREASURY NOTE<< 0.88 12/31/2010 5,031,055
25,000 US TREASURY NOTE 4.88 06/30/2012 27,547
3,485,000 US TREASURY NOTE<< 1.38 09/15/2012 3,520,122
1,095,000 US TREASURY NOTE 1.38 10/15/2012 1,105,180
665,000 US TREASURY NOTE 1.88 02/28/2014 670,455
3,495,000 US TREASURY NOTE 2.38 10/31/2014 3,560,811
2,351,720 US TREASURY NOTE 1.88 07/15/2013 2,500,539
16,415,709
--------------
TOTAL US TREASURY SECURITIES (COST $16,094,486) 16,415,709
--------------
PRINCIPAL
- -------------
COLLATERAL FOR SECURITIES LENDING: 2.34%
COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.39%
$ 403,485 AIM STIT-LIQUID ASSETS PORTFOLIO(s) 0.21 403,485
403,485 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(s) 0.16 403,485
403,485 DREYFUS CASH MANAGEMENT FUND INSTITUTIONAL(s) 0.11 403,485
403,485 DWS MONEY MARKET SERIES INSTITUTIONAL(s) 0.20 403,485
1,613,940
--------------
COLLATERAL INVESTED IN OTHER ASSETS: 1.95%
78,455 ALLIED IRISH BANKS NORTH AMERICA INCORPORATED 0.26 12/07/2009 78,455
28,020 AMSTEL FUNDING CORPORATION++(p) 1.25 12/18/2009 28,003
28,020 ANTALIS US FUNDING CORPORATION++(p) 0.18 12/03/2009 28,020
84,059 ANTALIS US FUNDING CORPORATION++(p) 0.20 12/04/2009 84,058
67,248 ARABELLA FINANCE LLC++(p) 0.35 12/01/2009 67,248
95,267 ARABELLA FINANCE LLC++(p) 0.40 12/03/2009 95,265
2,802 ARABELLA FINANCE LLC++(p) 0.40 12/04/2009 2,802
56,040 ASPEN FUNDING CORPORATION++(p) 0.18 12/21/2009 56,034
46 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 168,119 BANK OF AMERICA 0.18% 12/23/2009 $ 168,100
487,264 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $487,266) 0.16 12/01/2009 487,264
84,059 BANK OF IRELAND 0.35 12/01/2009 84,059
67,248 BANK OF IRELAND 0.50 12/02/2009 67,248
27,140 BARTON CAPITAL CORPORATION++(p) 0.18 12/01/2009 27,140
14,010 BELMONT FUNDING LLC++(p) 0.50 12/01/2009 14,010
72,851 BNP PARIBAS (NEW YORK) 0.21 12/08/2009 72,852
61,644 BNP PARIBAS (NEW YORK) 0.21 12/14/2009 61,644
168,119 BRYANT BANK FUNDING++ 0.18 12/23/2009 168,100
140,099 CAFCO LLC++ 0.17 12/09/2009 140,094
6,164 CALCASIEU PARISH LA+/-ss 0.40 12/01/2027 6,164
134,495 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY+/-ss 0.23 11/01/2026 134,495
17,933 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.35 06/01/2028 17,933
140,099 CHARTA LLC++(p) 0.17 12/09/2009 140,094
14,865 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.30 10/01/2038 14,865
28,020 COOK COUNTY IL+/-ss 0.40 11/01/2030 28,020
170,058 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY
VALUE $170,059) 0.17 12/01/2009 170,058
95,267 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.40 12/15/2037 95,267
67,248 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/02/2009 67,248
67,248 DEXIA CREDIT LOCAL DE FRANCE SA 0.27 12/04/2009 67,248
81,257 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/07/2009 81,257
140,099 E.ON AG++ 0.17 12/21/2009 140,086
140,099 ENI FINANCE USA INCORPORATED++ 0.17 12/18/2009 140,088
145,703 FORTIS FUNDING LLC++ 0.20 12/29/2009 145,680
151,307 GDF SUEZ++ 0.17 12/15/2009 151,297
112,079 GEMINI SECURITIZATION INCORPORATED++(p) 0.18 12/10/2009 112,074
139,987 GOLDMAN SACHS REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $139,988) 0.17 12/01/2009 139,987
140,099 GOTHAM FUNDING CORPORATION++ 0.18 12/15/2009 140,089
28,020 GRAMPIAN FUNDING++(p) 0.25 12/03/2009 28,019
117,683 GRAMPIAN FUNDING++(p) 0.28 12/15/2009 117,670
475,783 GRYPHON FUNDING LIMITED(i)(a) 0.00 08/05/2010 176,944
92,129 HAMILTON COUNTY OHIO HOSPITALS+/-ss 0.20 05/15/2037 92,129
9,247 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.30 11/01/2042 9,247
45,392 HOUSTON TX UTILITY SYSTEM+/-ss 0.27 05/15/2034 45,392
16,027 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.30 07/01/2029 16,027
11,208 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.29 01/01/2018 11,208
112,079 ING USA FUNDING LLC 0.19 12/07/2009 112,076
28,020 ING USA FUNDING LLC 0.18 12/09/2009 28,019
430,238 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $430,240) 0.17 12/01/2009 430,238
56,040 JUPITER SECURITIZATION CORPORATION++(p) 0.18 12/02/2009 56,039
28,020 JUPITER SECURITIZATION CORPORATION++ 0.18 12/03/2009 28,020
16,812 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.29 04/15/2025 16,812
168,119 KBC BANK NV BRUSSELS 0.18 12/01/2009 168,119
33,624 LLOYDS TSB BANK PLC 0.18 12/17/2009 33,621
112,079 LLOYDS TSB BANK PLC (NEW YORK) 0.20 12/07/2009 112,079
44,832 LMA AMERICAS LLC++(p) 0.18 12/11/2009 44,829
25,218 LMA AMERICAS LLC++(p) 0.18 12/17/2009 25,216
84,059 LMA AMERICAS LLC++(p) 0.19 12/21/2009 84,051
25,218 LOUISIANA PUBLIC FACILITIES AUTHORITY+/-ss 0.19 10/01/2033 25,218
138,978 MASSACHUSETTS HEFA+/-ss 0.25 10/01/2034 138,978
Wells Fargo Advantage Income Funds 47
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 15,383 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.24% 02/01/2036 $ 15,383
117,683 NATIXIS 0.27 12/07/2009 117,684
11,208 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.31 01/01/2018 11,208
123,287 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.22 07/01/2034 123,287
112,079 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.24 12/01/2040 112,079
140,099 NEWPORT FUNDING CORPORATION++(p) 0.18 12/15/2009 140,089
27,431 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.30 01/01/2034 27,431
56,684 RBS SECURITIES INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY
VALUE $56,684) 0.18 12/01/2009 56,684
19,614 REGENCY MARKETS #1 LLC++(p) 0.18 12/04/2009 19,614
93,138 REGENCY MARKETS #1 LLC++(p) 0.20 12/09/2009 93,134
28,020 ROMULUS FUNDING CORPORATION++ 0.30 12/15/2009 28,017
100,871 ROYAL BANK OF SCOTLAND PLC 0.20 12/02/2009 100,871
78,455 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.20 12/01/2028 78,455
112,079 SOCIETE GENERALE NORTH AMERICA 0.19 12/18/2009 112,069
7,005 STARBIRD FUNDING CORPORATION++(p) 0.15 12/01/2009 7,005
112,079 STARBIRD FUNDING CORPORATION++(p) 0.20 12/03/2009 112,078
140,099 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 0.18 12/18/2009 140,087
33,624 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 12/17/2009 33,621
113,749 TULIP FUNDING CORPORATION++(p) 0.19 12/07/2009 113,746
36,986 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.24 07/01/2032 36,986
112,079 UBS AG (STAMFORD CT) 0.31 12/04/2009 112,080
168,119 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 168,120
16,812 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.29 12/15/2040 16,812
1,464,273 VFNC CORPORATION+/-(i)++(a) 0.24 09/30/2010 732,137
7,005 VICTORY RECEIVABLES CORPORATION++(p) 0.15 12/01/2009 7,005
28,020 VICTORY RECEIVABLES CORPORATION++(p) 0.19 12/08/2009 28,019
92,852 VICTORY RECEIVABLES CORPORATION++(p) 0.18 12/16/2009 92,841
7,958,839
--------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $9,459,802) 9,572,779
--------------
SHARES YIELD
- ------------- -------------
SHORT-TERM INVESTMENTS: 9.72%
MUTUAL FUNDS: 9.60%
39,215,838 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++(u) 0.13 39,215,838
--------------
PRINCIPAL
- -------------
US TREASURY BILLS: 0.12%
$ 200,000 US TREASURY BILL### 0.08 12/24/2009 199,990
300,000 US TREASURY BILL### 0.10 12/24/2009 299,981
499,971
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $39,715,809) 39,715,809
--------------
TOTAL INVESTMENTS IN SECURITIES
(COST $422,164,179)* 101.76% $ 415,733,914
OTHER ASSETS AND LIABILITIES, NET (1.76) (7,180,440)
------ --------------
TOTAL NET ASSETS 100.00% $ 408,553,474
====== ==============
48 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM BOND FUND
- ----------
+/- Variable rate investments.
<< All or a portion of this security is on loan.
(c) Interest-only securities entitle holders to receive only the interest
payments on the underlying mortgages. The principal amount shown is the
notional amount of the underlying mortgages. Interest rate disclosed
represents the coupon rate.
(i) Illiquid security.
++ 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.
(s) Rate shown is the 1-day annualized yield at period end.
(p) Asset-backed commercial paper.
ss These securities are subject to a demand feature which reduces the
effective maturity.
(a) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The Wells
Fargo Advantage Money Market Fund does not pay an investment advisory fee.
+++ Short-term security of an affiliate of the Fund with a cost of $39,215,838.
(u) Rate shown is the 7-day annualized yield at period end.
# Security pledged as collateral for futures transactions.
* Cost for federal income tax purposes is $422,284,671 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 12,721,215
Gross unrealized depreciation (19,271,972)
------------
Net unrealized depreciation $ (6,550,757)
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 49
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM HIGH YIELD BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERALIZED MORTGAGE OBLIGATIONS: 0.06%
$ 229,579 SALOMON BROTHERS MORTGAGE SECURITIES VII SERIES
1994-5 CLASS B2+/- 2.49% 04/25/2024 $ 190,339
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (COST $223,080) 190,339
--------------
CORPORATE BONDS & NOTES: 62.51%
APPAREL & ACCESSORY STORES: 2.20%
1,000,000 MACY'S RETAIL HOLDINGS INCORPORATED 8.50 06/01/2010 1,017,500
3,000,000 PHILLIPS VAN HEUSEN 8.13 05/01/2013 3,052,500
3,000,000 WARNACO INCORPORATED 8.88 06/15/2013 3,075,000
7,145,000
--------------
BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS: 0.93%
3,000,000 PULTE HOMES INCORPORATED 5.25 01/15/2014 2,865,000
155,000 TOLL BROTHERS FINANCE CORPORATION 6.88 11/15/2012 164,921
3,029,921
--------------
BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS: 0.93%
3,053,000 SUBURBAN PROPANE PARTNERS 6.88 12/15/2013 3,007,205
--------------
BUSINESS SERVICES: 2.01%
3,500,000 FTI CONSULTING INCORPORATED 7.63 06/15/2013 3,500,000
3,000,000 IRON MOUNTAIN INCORPORATED 7.75 01/15/2015 3,007,500
6,507,500
--------------
CASINO & GAMING: 0.31%
1,000,000 TURNING STONE CASINO RESORT ENTERPRISE++ 9.13 12/15/2010 992,500
--------------
CHEMICALS & ALLIED PRODUCTS: 1.53%
4,500,000 CHURCH & DWIGHT COMPANIES INCORPORATED 6.00 12/15/2012 4,567,500
400,000 NALCO COMPANY 7.75 11/15/2011 400,000
4,967,500
--------------
COAL MINING: 2.98%
3,500,000 ARCH WESTERN FINANCE LLC 6.75 07/01/2013 3,482,500
2,510,000 CONSOL ENERGY INCORPORATED 7.88 03/01/2012 2,660,600
3,500,000 PEABODY ENERGY CORPORATION 6.88 03/15/2013 3,535,000
9,678,100
--------------
COMMUNICATIONS: 6.35%
4,250,000 CITIZENS COMMUNICATIONS COMPANY 6.25 01/15/2013 4,175,625
3,000,000 CSC HOLDINGS INCORPORATED++ 8.50 04/15/2014 3,153,750
3,000,000 ECHOSTAR DBS CORPORATION 6.38 10/01/2011 3,067,500
1,000,000 QWEST COMMUNICATIONS INTERNATIONAL INCORPORATED 7.25 02/15/2011 1,000,000
2,500,000 QWEST CORPORATION 7.88 09/01/2011 2,596,875
3,500,000 SPRINT CAPITAL CORPORATION 7.63 01/30/2011 3,535,000
3,000,000 WINDSTREAM CORPORATION 8.13 08/01/2013 3,067,500
20,596,250
--------------
CONSUMER GOODS - DURABLES: 0.93%
3,000,000 LIMITED BRANDS INCORPORATED<< 6.13 12/01/2012 3,007,500
--------------
COSMETICS , PERSONAL CARE: 0.94%
3,000,000 CHATTEM INCORPORATED 7.00 03/01/2014 3,052,500
--------------
50 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM HIGH YIELD BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
ELECTRIC, GAS & SANITARY SERVICES: 6.83%
$ 764,000 AES CORPORATION++ 8.75% 05/15/2013 $ 777,370
3,000,000 ALLIED WASTE NORTH AMERICA INCORPORATED 6.13 02/15/2014 3,096,828
3,000,000 EL PASO CORPORATION<< 7.00 05/15/2011 3,024,117
2,500,000 IPALCO ENTERPRISES INCORPORATED 8.63 11/14/2011 2,587,500
2,500,000 MIRANT AMERICAS GENERATION LLC 8.30 05/01/2011 2,543,750
2,000,000 NRG ENERGY INCORPORATED 7.25 02/01/2014 2,017,500
2,000,000 ORION POWER HOLDINGS INCORPORATED 12.00 05/01/2010 2,055,000
997,807 SALTON SEA FUNDING CORPORATION SERIES C 7.84 05/30/2010 1,004,542
2,000,000 TESORO CORPORATION 6.25 11/01/2012 1,970,000
3,000,000 WILLIAMS PARTNERS LP WILLIAMS PARTNERS FINANCE CORPORATION 7.50 06/15/2011 3,090,690
22,167,297
--------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER
EQUIPMENT: 0.31%
1,000,000 L-3 COMMUNICATIONS CORPORATION 6.13 07/15/2013 1,007,500
--------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT: 3.74%
4,000,000 BALL CORPORATION 6.88 12/15/2012 4,040,000
4,000,000 CROWN AMERICAS LLC/CROWN AMERICAS CAPITAL CORPORATION 7.63 11/15/2013 4,095,000
4,000,000 SILGAN HOLDINGS INCORPORATED 6.75 11/15/2013 4,000,000
12,135,000
--------------
FOOD & KINDRED PRODUCTS: 2.37%
3,000,000 B&G FOODS HOLDING CORPORATION 8.00 10/01/2011 3,052,500
4,385,000 CONSTELLATION BRANDS INCORPORATED 8.38 12/15/2014 4,648,100
7,700,600
--------------
FOREST PRODUCTS & PAPER: 0.65%
2,000,000 GEORGIA PACIFIC CORPORATION 8.13 05/15/2011 2,105,000
--------------
GENERAL MERCHANDISE STORES: 1.46%
2,500,000 JCPENNEY CORPORATION INCORPORATED 8.00 03/01/2010 2,528,125
2,000,000 JCPENNEY CORPORATION INCORPORATED 9.00 08/01/2012 2,200,000
4,728,125
--------------
HOMEBUILDING: 1.85%
3,000,000 DR HORTON INCORPORATED 6.13 01/15/2014 2,940,000
3,000,000 TOLL BROS FINANCE CORPORATION 5.95 09/15/2013 3,053,061
5,993,061
--------------
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES: 0.98%
3,000,000 STARWOOD HOTELS & RESORTS WORLDWIDE INCORPORATED 7.88 05/01/2012 3,172,500
--------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 1.75%
2,000,000 BRIGGS & STRATTON CORPORATION 8.88 03/15/2011 2,085,000
3,500,000 GAMESTOP CORPORATION 8.00 10/01/2012 3,600,625
5,685,625
--------------
JUSTICE, PUBLIC ORDER & SAFETY: 1.23%
4,000,000 CORRECTIONS CORPORATION OF AMERICA 6.25 03/15/2013 4,005,000
--------------
MACHINE-DIVERSIFIED: 0.93%
3,000,000 WESTINGHOUSE AIR BRAKE TECHNOLOGY 6.88 07/31/2013 3,026,250
--------------
Wells Fargo Advantage Income Funds 51
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM HIGH YIELD BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC,
MEDICAL & OPTICAL GOODS: 3.00%
$ 3,000,000 BIO-RAD LABORATORIES INCORPORATED 7.50% 08/15/2013 $ 3,060,000
3,000,000 BOSTON SCIENTIFIC CORPORATION 6.00 06/15/2011 3,090,000
3,500,000 FRESENIUS MEDICAL CARE CAPITAL TRUST IV 7.88 06/15/2011 3,587,500
9,737,500
--------------
MEMBERSHIP ORGANIZATIONS: 0.44%
1,500,000 OMNICARE INCORPORATED 6.13 06/01/2013 1,436,250
--------------
MISCELLANEOUS MANUFACTURING INDUSTRIES: 0.45%
1,460,000 ESTERLINE TECHNOLOGIES CORPORATION 7.75 06/15/2013 1,467,300
--------------
MISCELLANEOUS RETAIL: 0.76%
2,251,610 CVS CAREMARK CORPORATION++ 7.77 01/10/2012 2,455,410
--------------
NON-DEPOSITORY CREDIT INSTITUTIONS: 0.93%
3,000,000 KINDER MORGAN FINANCE COMPANY ULC 5.35 01/05/2011 3,015,000
--------------
OIL & GAS: 0.92%
3,000,000 COMSTOCK RESOURCES INCORPORATED 6.88 03/01/2012 3,000,000
--------------
OIL & GAS EXTRACTION: 4.47%
3,000,000 CHESAPEAKE ENERGY CORPORATION 7.63 07/15/2013 3,037,500
3,250,000 FOREST OIL CORPORATION 8.00 12/15/2011 3,339,375
2,000,000 KCS ENERGY INCORPORATED 7.13 04/01/2012 1,985,000
3,000,000 NEWFIELD EXPLORATION COMPANY 7.63 03/01/2011 3,090,000
3,000,000 RANGE RESOURCES CORPORATION 7.38 07/15/2013 3,045,000
14,496,875
--------------
PAPER & ALLIED PRODUCTS: 0.97%
3,000,000 ROCK-TENN COMPANY 8.20 08/15/2011 3,150,000
--------------
PERSONAL SERVICES: 2.85%
3,000,000 DAVITA INCORPORATED 6.63 03/15/2013 2,977,500
2,500,000 RAINBOW NATIONAL SERVICES LLC++ 8.75 09/01/2012 2,537,500
3,740,000 SERVICE CORPORATION INTERNATIONAL 7.38 10/01/2014 3,730,650
9,245,650
--------------
PETROLEUM REFINING & RELATED INDUSTRIES: 1.93%
3,000,000 FERRELLGAS PARTNERS LP 8.75 06/15/2012 3,007,500
3,250,000 FRONTIER OIL CORPORATION 6.63 10/01/2011 3,250,000
6,257,500
--------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES: 1.03%
3,340,000 VISANT CORPORATION 7.63 10/01/2012 3,356,700
--------------
RETAIL: 0.92%
3,000,000 MACYS RETAIL HOLDINGS INCORPORATED 5.88 01/15/2013 3,000,000
--------------
RETAIL FOOD: 0.70%
2,250,000 ALBERTSONS INCORPORATED 7.25 05/01/2013 2,278,125
--------------
RUBBER & MISCELLANEOUS PLASTICS PRODUCTS: 0.15%
500,000 GOODYEAR TIRE & RUBBER COMPANY+/- 5.01 12/01/2009 500,000
--------------
STONE, CLAY, GLASS & CONCRETE PRODUCTS: 1.10%
3,500,000 OWENS-BROCKWAY GLASS CONTAINER INCORPORATED 8.25 05/15/2013 3,570,000
--------------
52 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM HIGH YIELD BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
TEXTILE MILL PRODUCTS: 0.68%
$ 2,107,000 MOHAWK INDUSTRIES INCORPORATED SERIES D 7.20% 04/15/2012 $ 2,191,280
--------------
TOTAL CORPORATE BONDS & NOTES (COST $198,456,139) 202,867,524
--------------
FOREIGN CORPORATE BONDS: 4.61%
2,875,000 INMARSAT FINANCE PLC 7.63 06/30/2012 2,946,875
2,500,000 INTELSAT SUBSIDIARY HOLDING COMPANY LIMITED 8.50 01/15/2013 2,509,375
1,280,000 ROGERS WIRELESS INCORPORATED 8.00 12/15/2012 1,307,520
3,000,000 SEAGATE TECHNOLOGY HDD HOLDINGS 6.38 10/01/2011 3,048,750
2,000,000 TECK RESOURCES LIMITED 9.75 05/15/2014 2,247,500
3,000,000 VIDEOTRON LIMITED 6.88 01/15/2014 2,925,000
TOTAL FOREIGN CORPORATE BONDS (COST $14,733,588) 14,985,020
--------------
MUNICIPAL BONDS & NOTES: 0.55%
NEVADA: 0.46%
1,500,000 CLARK COUNTY NV NEVADA POWER COMPANY PROJECT
SERIES D (IDR, ACA INSURED) 5.30 10/01/2011 1,494,707
--------------
TEXAS: 0.09%
280,000 TEXAS STATE PFA COSMOS FOUNDATION SERIES B
(TAX INCREMENTAL REVENUE) 6.75 02/15/2010 279,689
--------------
TOTAL MUNICIPAL BONDS & NOTES (COST $1,734,508) 1,774,396
--------------
TERM LOANS: 26.30%
2,080,957 AFFILIATED COMPUTER SERVICES TERM LOAN 2.84 03/20/2013 2,040,441
1,000,000 ALLIANCE IMAGING INCORPORATED TERM LOAN 2.82 12/29/2011 987,250
1,477,328 AMC ENTERTAINMENT INCORPORATED TERM LOAN 1.74 01/26/2013 1,369,764
2,878,448 AMERISTAR CASINOS INCORPORATED TERM LOAN 3.53 11/10/2012 2,838,869
1,690,058 ARBY'S RESTAURANT GROUP INCORPORATED TERM LOAN 7.25 07/25/2012 1,688,656
2,637,101 ASHLAND CHEMICALS TERM LOAN 7.65 11/20/2014 2,673,361
1,446,277 BALDOR ELECTRIC COMPANY TERM LOAN 5.25 01/31/2014 1,431,294
2,486,063 BIOMET INCORPORATED TERM LOAN 3.26 12/26/2014 2,337,471
3,000,000 CASELLA WASTE SYSTEMS INCORPORATED TERM LOAN N/A 04/09/2014 2,988,750
2,984,615 CINEMARK INCORPORATED TERM LOAN 2.02 10/05/2013 2,798,077
143,866 COMMUNITY HEALTH SYSTEMS INCORPORATED TERM LOAN 2.51 07/25/2014 131,397
2,820,052 COMMUNITY HEALTH SYSTEMS INCORPORATED TERM LOAN 2.50 07/25/2014 2,573,946
1,337,941 DAVITA INCORPORATED TERM LOAN 1.78 10/05/2012 1,258,882
2,483,448 DEAN FOODS COMPANY TERM LOAN 1.65 04/02/2014 2,291,874
2,091,207 DEL MONTE CORPORATION TERM LOAN 1.76 02/08/2012 2,028,094
2,425,585 DIRECTV HOLDINGS LLCTERM LOAN 1.73 04/13/2013 2,340,301
2,191,764 DOLLAR GENERAL CORPORATION TERM LOAN 3.00 07/07/2014 2,050,286
991,857 DOMTAR CORPORATION TERM LOAN 1.61 03/07/2014 942,472
2,989,511 EDUCATION MANAGEMENT LLC TERM LOAN 2.06 06/01/2013 2,729,424
752,118 GEORGIA PACIFIC CORPORATION 1ST LIEN TERM LOAN 2.28 12/20/2012 713,181
2,230,144 GEORGIA PACIFIC CORPORATION 1ST LIEN TERM LOAN 3.53 12/23/2014 2,180,902
3,000,000 GRAHAM PACKAGING COMPANY TERM LOAN N/A 04/05/2014 2,994,840
3,512,705 HCA INCORPORATED TERM LOAN 2.53 11/18/2013 3,259,509
2,389,447 INVITROGEN CORPORATION 1ST LIEN TERM LOAN N/A 09/30/2015 2,384,429
1,000,000 IOWA TELECOMMUNICATIONS SERVICE 1ST LIEN TERM LOAN 2.02 11/23/2011 986,560
2,221,399 JARDEN CORPORATION TERM LOAN 3.53 01/25/2015 2,168,085
973,312 JOHNSON DIVERSEY INCORPORATED 1ST LIEN TERM LOAN 2.84 12/16/2011 973,312
1,018,620 JOSTENS CORPORATION 1ST LIEN TERM LOAN N/A 10/04/2011 988,826
Wells Fargo Advantage Income Funds 53
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM HIGH YIELD BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
TERM LOANS (continued)
$ 2,000,000 LEAR CORPORATION 2ND LIEN TERM LOAN N/A% 11/09/2011 $ 2,006,560
1,491,439 LIFEPOINT HOSPITALS INCORPORATED 1ST LIEN TERM LOAN 1.89 04/15/2012 1,416,122
1,736,573 METROPCS WIRELESS INCORPORATED TERM LOAN 2.52 11/15/2013 1,605,097
674,895 MIRANT NORTH AMERICA LLC TERM LOAN 1.98 01/03/2013 627,443
2,985,000 NALCO COMPANY TERM LOAN 6.50 05/06/2016 3,000,671
323,883 NALCO COMPANY TERM LOAN B 2.06 11/04/2010 322,163
2,356,710 NRG ENERGY INCORPORATED TERM LOAN 2.00 06/01/2014 2,159,123
2,089,221 PENN NATIONAL GAMING INCORPORATED TERM LOAN 2.00 10/03/2012 1,992,594
991,784 PSYCHIATRIC SOLUTIONS INCORPORATED 1ST LIEN TERM LOAN 2.02 05/31/2014 932,277
1,453,431 RMK ACQUISITION CORPORATION (ARAMAK) 1ST LIEN TERM LOAN N/A 01/26/2014 1,309,077
995,000 ROCKWOOD SPECIALTIES GROUP INCORPORATEDN 1ST LIEN TERM LOAN 6.00 05/15/2014 996,662
388,062 SEMINOLE TRIBE OF FLORIDA 1ST LIEN DELAYED DRAW TERM LOAN B-1 1.78 03/05/2014 362,516
1,398,222 SEMINOLE TRIBE OF FLORIDA 1ST LIEN DELAYED DRAW TERM LOAN B-2 1.78 03/05/2014 1,306,177
1,108,944 SEMINOLE TRIBE OF FLORIDA 1ST LIEN DELAYED DRAW TERM LOAN B-3 1.78 03/05/2014 1,035,942
2,237,684 SUNGARD DATA SYSTEMS INCORPORATED EXTENDED TERM LOAN 3.89 02/28/2016 2,092,235
249,528 SUNGARD DATA SYSTEMS INCORPORATED 1ST LIEN TERM LOAN 1.99 02/11/2013 227,148
1,885,318 SUPERVALU INCORPORATED 1ST LIEN TERM LOAN 1.52 06/01/2012 1,776,686
1,984,456 THE WILLIAM CARTER COMPANY 1ST LIEN TERM LOAN 1.79 07/14/2012 1,921,608
3,477,034 TIME WARNER TELECOM HOLDINGS TERM LOAN B 2.02 01/07/2013 3,274,949
3,000,000 TRANSDIGM, INCORPORATED TERM LOAN 2.29 06/23/2013 2,844,390
TOTAL TERM LOANS (COST $83,631,964) 85,359,693
--------------
SHARES YIELD
- ------------- -------------
COLLATERAL FOR SECURITIES LENDING: 1.95%
COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.30%
247,224 AIM STIT-LIQUID ASSETS PORTFOLIO(s) 0.21 247,224
247,224 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(s) 0.16 247,224
247,224 DREYFUS CASH MANAGEMENT FUND INSTITUTIONAL(s) 0.11 247,224
247,224 DWS MONEY MARKET SERIES INSTITUTIONAL(s) 0.20 247,224
988,896
--------------
PRINCIPAL
- -------------
COLLATERAL INVESTED IN OTHER ASSETS: 1.65%
$ 54,939 ALLIED IRISH BANKS NORTH AMERICA INCORPORATED 0.26 12/07/2009 54,939
19,621 AMSTEL FUNDING CORPORATION++(p) 1.25 12/18/2009 19,609
19,621 ANTALIS US FUNDING CORPORATION++(p) 0.18 12/03/2009 19,621
58,863 ANTALIS US FUNDING CORPORATION++(p) 0.20 12/04/2009 58,862
47,090 ARABELLA FINANCE LLC++(p) 0.35 12/01/2009 47,090
68,183 ARABELLA FINANCE LLC++(p) 0.40 12/03/2009 68,181
1,962 ARABELLA FINANCE LLC++(p) 0.40 12/04/2009 1,962
39,242 ASPEN FUNDING CORPORATION++(p) 0.18 12/21/2009 39,238
78,484 BANK OF AMERICA 0.18 12/23/2009 78,475
561,356 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $561,358) 0.16 12/01/2009 561,356
58,863 BANK OF IRELAND 0.35 12/01/2009 58,863
47,090 BANK OF IRELAND 0.50 12/02/2009 47,090
98,105 BANK OF MONTREAL (CHICAGO) 0.18 12/16/2009 98,105
19,621 BARTON CAPITAL CORPORATION++(p) 0.18 12/01/2009 19,621
9,810 BELMONT FUNDING LLC++(p) 0.50 12/01/2009 9,810
47,090 BNP PARIBAS (NEW YORK) 0.21 12/08/2009 47,091
47,090 BNP PARIBAS (NEW YORK) 0.21 12/14/2009 47,091
117,726 BRYANT BANK FUNDING++ 0.18 12/23/2009 117,713
54 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM HIGH YIELD BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 15,697 CALCASIEU PARISH LA+/-ss 0.40% 12/01/2027 $ 15,697
21,583 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.35 06/01/2028 21,583
98,105 CHARTA LLC++(p) 0.17 12/09/2009 98,101
10,389 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.30 10/01/2038 10,389
31,394 COOK COUNTY IL+/-ss 0.40 11/01/2030 31,394
175,231 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES
(MATURITY VALUE $175,232) 0.17 12/01/2009 175,231
70,635 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.40 12/15/2037 70,635
47,090 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/02/2009 47,090
47,090 DEXIA CREDIT LOCAL DE FRANCE SA 0.27 12/04/2009 47,090
56,901 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/07/2009 56,901
98,105 E.ON AG++ 0.17 12/21/2009 98,096
79,661 ENI FINANCE USA INCORPORATED++ 0.18 12/09/2009 79,658
18,714 FAIRWAY FINANCE CORPORATION++(p) 0.18 12/07/2009 18,714
102,029 FORTIS FUNDING LLC++ 0.20 12/29/2009 102,013
90,256 GDF SUEZ++ 0.17 12/15/2009 90,250
78,484 GEMINI SECURITIZATION INCORPORATED++(P) 0.18 12/10/2009 78,480
156,340 GOLDMAN SACHS REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $156,341) 0.17 12/01/2009 156,340
19,621 GRAMPIAN FUNDING++(p) 0.25 12/03/2009 19,621
94,181 GRAMPIAN FUNDING++(p) 0.28 12/15/2009 94,170
192,628 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 71,639
6,475 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.30 11/01/2042 6,475
58,863 HOUSTON TX UTILITY SYSTEM+/-SS 0.27 05/15/2034 58,863
19,621 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.30 07/01/2029 19,621
7,848 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.29 01/01/2018 7,848
78,484 ING USA FUNDING LLC 0.19 12/07/2009 78,481
19,621 ING USA FUNDING LLC 0.18 12/09/2009 19,620
483,563 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY
MORTGAGE BACKED SECURITIES (MATURITY VALUE $483,565) 0.17 12/01/2009 483,563
58,863 JUPITER SECURITIZATION CORPORATION++(p) 0.18 12/02/2009 58,863
11,773 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.29 04/15/2025 11,773
117,726 KBC BANK NV BRUSSELS 0.18 12/01/2009 117,726
15,697 LLOYDS TSB BANK PLC 0.18 12/17/2009 15,696
78,484 LLOYDS TSB BANK PLC (NEW YORK) 0.20 12/07/2009 78,484
33,748 LMA AMERICAS LLC++(p) 0.18 12/11/2009 33,746
17,659 LMA AMERICAS LLC++(p) 0.18 12/17/2009 17,657
58,863 LMA AMERICAS LLC++(p) 0.19 12/21/2009 58,857
17,659 LOUISIANA PUBLIC FACILITIES AUTHORITY+/-ss 0.19 10/01/2033 17,659
129,695 MASSACHUSETTS HEFA+/-ss 0.25 10/01/2034 129,695
14,127 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.24 02/01/2036 14,127
74,560 NATIXIS 0.27 12/07/2009 74,560
7,848 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.31 01/01/2018 7,848
92,022 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.22 07/01/2034 92,022
68,281 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.24 12/01/2040 68,281
98,140 NEWPORT FUNDING CORPORATION++(p) 0.18 12/15/2009 98,133
24,958 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.30 01/01/2034 24,958
58,412 RBS SECURITIES INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES
(MATURITY VALUE $58,412) 0.18 12/01/2009 58,412
13,735 REGENCY MARKETS #1 LLC++(p) 0.18 12/04/2009 13,734
31,394 REGENCY MARKETS #1 LLC++(p) 0.20 12/09/2009 31,392
86,332 ROYAL BANK OF SCOTLAND PLC 0.20 12/02/2009 86,332
54,939 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.20 12/01/2028 54,939
98,105 SOCIETE GENERALE NORTH AMERICA 0.19 12/10/2009 98,100
Wells Fargo Advantage Income Funds 55
Portfolio of Investments--November 30, 2009 (Unaudited)
SHORT-TERM HIGH YIELD BOND FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 4,905 Starbird Funding Corporation++(p) 0.15% 12/01/2009 $ 4,905
78,484 Starbird Funding Corporation++(p) 0.20 12/03/2009 78,483
27,077 Ticonderoga Master Funding Limited++(p) 0.18 12/17/2009 27,075
3,924 Tulip Funding Corporation++(p) 0.19 12/07/2009 3,924
78,484 Tulip Funding Corporation++(p) 0.19 12/10/2009 78,480
35,318 Tulsa County OK Industrial Authority Revenue+/-ss 0.24 07/01/2032 35,318
83,585 UBS AG (Stamford CT) 0.31 12/04/2009 83,586
117,726 UniCredito Italiano (New York) 0.25 01/04/2010 117,726
11,773 Vermont State Student Assistance Corporation+/-ss 0.29 12/15/2040 11,773
245,447 VFNC Corporation+/-++(a)(i) 0.24 09/30/2010 122,724
4,905 Victory Receivables Corporation++(p) 0.15 12/01/2009 4,905
58,863 Victory Receivables Corporation++(p) 0.19 12/08/2009 58,861
5,343,034
--------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $6,335,861) 6,331,930
--------------
SHARES YIELD
- ------------- -------------
SHORT-TERM INVESTMENTS: 7.16%
MUTUAL FUNDS: 7.16%
23,239,027 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++(u) 0.13 23,239,027
TOTAL SHORT-TERM INVESTMENTS (COST $23,239,027) 23,239,027
TOTAL INVESTMENTS IN SECURITIES
(COST $328,354,167)* 103.14% $ 334,747,929
OTHER ASSETS AND LIABILITIES, NET (3.14) (10,197,002)
------ --------------
TOTAL NET ASSETS 100.00% $ 324,550,927
====== ==============
- ----------
+/- 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.
<< All or a portion of this security is on loan.
(s) Rate shown is the 1-day annualized yield at period end.
(p) Asset-backed commercial paper.
ss These securities are subject to a demand feature which reduces the
effective maturity.
(a) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
(i) Illiquid security.
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The Wells
Fargo Advantage Money Market Fund does not pay an investment advisory fee.
+++ Short-term security of an affiliate of the Fund with a cost of $23,239,027.
(u) Rate shown is the 7-day annualized yield at period end.
* Cost for federal income tax purposes is $328,384,178 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 7,480,511
Gross unrealized depreciation (1,116,760)
-----------
Net unrealized appreciation $ 6,363,751
The accompanying notes are an integral part of these financial statements.
56 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
ULTRA SHORT-TERM INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
AGENCY SECURITIES: 3.38%
FEDERAL HOME LOAN MORTGAGE CORPORATION: 1.10%
$ 30,850 FHLMC #1B0128+/- 3.41% 09/01/2031 $ 31,990
188,876 FHLMC #555243 9.00 11/01/2016 208,886
480,389 FHLMC #555427 9.50 09/01/2020 559,196
149,287 FHLMC #555490 9.50 12/01/2016 161,094
163,786 FHLMC #555514 9.00 10/01/2019 187,744
1,571,617 FHLMC #555519 9.00 12/01/2016 1,750,436
15,745 FHLMC #786823+/- 3.40 07/01/2029 16,111
130,175 FHLMC #788792+/- 3.56 01/01/2029 133,918
237,006 FHLMC #789272+/- 3.35 04/01/2032 243,423
17,227 FHLMC #789483+/- 3.23 06/01/2032 17,515
95,161 FHLMC #846990+/- 3.94 10/01/2031 97,467
414,960 FHLMC #884013 10.50 05/01/2020 478,195
384,541 FHLMC #A01734 9.00 08/01/2018 429,265
75,599 FHLMC #A01849 9.50 05/01/2020 86,672
1,100,904 FHLMC #C64637 7.00 06/01/2031 1,234,899
990,693 FHLMC #G01126 9.50 12/01/2022 1,116,705
67,981 FHLMC #G10747 7.50 10/01/2012 71,808
32,130 FHLMC #G11150 7.50 12/01/2011 33,512
84,302 FHLMC #G11200 8.00 01/01/2012 88,320
22,505 FHLMC #G11209 7.50 12/01/2011 23,472
76,844 FHLMC #G11229 8.00 01/01/2013 77,482
208,684 FHLMC #G11391 7.50 06/01/2012 219,637
194,235 FHLMC #G80118 10.00 11/01/2021 222,579
7,490,326
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION: 1.65%
395,161 FNMA #100001 9.00 02/15/2020 454,213
158,267 FNMA #100255 8.33 07/15/2020 181,780
313,620 FNMA #100256 9.00 10/01/2021 355,474
7 FNMA #100259 7.50 12/15/2009 7
16,842 FNMA #149167 10.50 08/01/2020 19,559
75,641 FNMA #190722 9.50 03/01/2021 85,959
402,743 FNMA #190909 9.00 06/01/2024 465,182
420,455 FNMA #252870 7.00 11/01/2014 452,866
317,291 FNMA #310010 9.50 12/01/2020 366,106
1,025,237 FNMA #323534 9.00 12/01/2016 1,145,476
104,468 FNMA #340181 7.00 12/01/2010 106,452
274,640 FNMA #344890 10.25 09/01/2021 313,669
53,952 FNMA #365418+/- 4.61 01/01/2023 54,726
67,823 FNMA #392647 9.00 10/01/2013 73,175
150,722 FNMA #458004 10.00 03/01/2018 167,221
153,153 FNMA #523850 10.50 10/01/2014 179,955
540,333 FNMA #535807 10.50 04/01/2022 626,083
788,310 FNMA #545117+/- 3.44 12/01/2040 805,696
136,376 FNMA #545131 8.00 03/01/2013 143,866
29,468 FNMA #545157 8.50 11/01/2012 31,488
929,934 FNMA #545325 8.50 07/01/2017 1,022,045
287,246 FNMA #545460+/- 3.04 11/01/2031 296,513
2,328,263 FNMA #598559 6.50 08/01/2031 2,577,244
98,164 FNMA #604060+/- 3.15 09/01/2031 100,527
185,867 FNMA #604689+/- 2.61 10/01/2031 191,678
118,491 FNMA #635070+/- 3.22 05/01/2032 121,001
228,730 FNMA #646643+/- 3.24 06/01/2032 236,180
205,261 FNMA #660508 7.00 05/01/2013 213,311
Wells Fargo Advantage Income Funds 57
Portfolio of Investments--November 30, 2009 (Unaudited)
ULTRA SHORT-TERM INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (continued)
$ 16,120 FNMA #675491+/- 4.43% 04/01/2033 $ 16,539
406,655 FNMA #724657+/- 5.04 07/01/2033 421,931
11,225,922
--------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION: 0.63%
108,312 GNMA #780253 9.50 11/15/2017 119,659
383,261 GNMA #780267 9.00 11/15/2017 429,212
318,948 GNMA #780664 10.00 10/20/2017 355,706
246,686 GNMA #781310 8.00 01/15/2013 248,073
240,426 GNMA #781311 7.50 02/15/2013 241,705
709,278 GNMA #781540 7.00 05/15/2013 741,852
1,949,760 GNMA #781614 7.00 06/15/2033 2,192,733
4,328,940
--------------
TOTAL AGENCY SECURITIES (COST $21,274,091) 23,045,188
--------------
ASSET BACKED SECURITIES: 7.67%
4,750,000 AMERICAN EXPRESS ISSUANCE TRUST SERIES 2007-1 CLASS A+/- 0.44 09/15/2011 4,744,130
3,400,000 CAPITAL AUTO RECEIVABLES ASSET TRUST SERIES 2007-4 CLASS
A3B+/- 0.94 11/15/2011 3,402,529
4,582,366 CHASE FUNDING MORTGAGE LOAN ASSET-BACKED CERTIFICATES SERIES
2003-5 CLASS 2M1+/- 1.14 05/25/2033 1,296,401
3,400,000 CHASE ISSUANCE TRUST SERIES 2007-A18 CLASS A+/- 0.50 01/15/2015 3,354,846
7,170,101 CONTIMORTGAGE NET INTEREST MARGIN NOTES SERIES 1997-A CLASS
A(i) 7.23 10/16/2028 2,241
1,796,933 COUNTRYWIDE ASSET-BACKED CERTIFICATES SERIES 2007-S1 CLASS
A1A+/- 0.35 02/25/2037 1,353,340
1,395,948 DAIMLER AUTO TRUST SERIES 2008-B CLASS A2A 3.81 07/08/2011 1,406,184
25,399,892 EASTMAN HILL FUNDING LIMITED SERIES 1A CLASS A2(i)++ 0.83 09/29/2031 444,498
32,207,356 EASTMAN HILL FUNDING LIMITED SERIES 1A CLASS A2E(i) 0.83 09/29/2031 563,629
10,183,958 HOME EQUITY ASSET TRUST SERIES 2003-6 CLASS M1+/- 0.94 02/25/2034 5,120,764
7,452,660 HOME EQUITY ASSET TRUST SERIES 2003-7 CLASS M1+/- 1.21 03/25/2034 4,576,924
7,934,685 MORGAN STANLEY ABS CAPITAL I SERIES 2003-NC10 CLASS M1+/- 1.26 10/25/2033 5,280,263
222,364 RESIDENTIAL ASSET SECURITIES CORPORATION SERIES 2001-KS1
CLASS AII+/- 0.71 03/25/2032 196,701
5,723,823 STRUCTURED ASSET INVESTMENT LOAN TRUST SERIES 2003-BC10
CLASS M1+/- 1.36 10/25/2033 3,210,558
8,190,719 STRUCTURED ASSET INVESTMENT LOAN TRUST SERIES 2003-BC3
CLASS M1+/- 1.66 04/25/2033 4,858,477
6,000,000 WILLIAM STREET FUNDING CORPORATION SERIES 2005-1 CLASS A+/-++ 0.55 01/23/2011 5,880,000
7,200,000 WILLIAM STREET FUNDING CORPORATION SERIES 2006-3
CLASS A+/-(a)++ 0.51 06/23/2012 6,696,000
TOTAL ASSET BACKED SECURITIES (COST $82,546,494) 52,387,485
--------------
COLLATERALIZED MORTGAGE OBLIGATIONS: 15.18%
8,520,697 AAMES MORTGAGE TRUST SERIES 2003-1 CLASS M1+/- 1.26 10/25/2033 5,675,967
1,744,912 BANK OF AMERICA ALTERNATIVE LOAN TRUST SERIES 2004-9
CLASS 3A2 5.50 10/25/2034 1,706,287
37,285,294 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES
2001-PB1 CLASS XP+/-(i)++ 1.78 05/11/2035 296,519
13,556 BANK OF AMERICA MORTGAGE SECURITIES SERIES 2002-K
CLASS 3A1+/- 3.93 10/20/2032 13,018
10,616,802 CDC MORTGAGE CAPITAL TRUST SERIES 2003-HE4 CLASS M1+/- 1.21 03/25/2034 6,723,586
235,162 CITICORP MORTGAGE SECURITIES INCORPORATED SERIES 1992-7
CLASS A+/- 3.13 03/25/2022 230,543
268,304 COLLATERALIZED MORTGAGE OBLIGATION TRUST SERIES 66 CLASS Z 8.00 09/20/2021 265,629
764,577 COUNTRYWIDE HOME LOANS MORTGAGE PASS-THROUGH TRUST SERIES
2001-HYB1 CLASS 1A1+/- 2.93 06/19/2031 730,929
451,508 COUNTRYWIDE HOME LOANS MORTGAGE PASS-THROUGH TRUST SERIES
2001-HYB1 CLASS 2A1+/- 3.09 06/19/2031 426,869
346,446 COUNTRYWIDE HOME LOANS MORTGAGE PASS-THROUGH TRUST SERIES
2004-20 CLASS 3A1+/- 2.46 09/25/2034 234,512
328,269 DLJ MORTGAGE ACCEPTANCE CORPORATION SERIES 1990-2
CLASS A+/-(i) 3.46 01/25/2022 325,896
90,217 DLJ MORTGAGE ACCEPTANCE CORPORATION SERIES 1991-3
CLASS A1+/-(i) 2.84 02/20/2021 90,157
1,216,420 EQUIFIRST MORTGAGE LOAN TRUST SERIES 2003-2 CLASS 3A3+/- 1.00 09/25/2033 964,647
1,569,843 FHLMC STRUCTURED PASS-THROUGH SECURITIES SERIES T-42 CLASS A6 9.50 02/25/2042 1,748,904
999,385 FNMA GRANTOR TRUST SERIES 2000-T6 CLASS A2 9.50 06/25/2030 1,118,687
2,744,471 FNMA GRANTOR TRUST SERIES 2001-T10 CLASS A3 9.50 12/25/2041 3,072,092
2,294,372 FNMA GRANTOR TRUST SERIES 2001-T12 CLASS A3 9.50 08/25/2041 2,568,263
5,412,177 FNMA GRANTOR TRUST SERIES 2001-T8 CLASS A3+/- 5.36 07/25/2041 5,709,142
58 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
ULTRA SHORT-TERM INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERALIZED MORTGAGE OBLIGATIONS (continued)
$ 3,194,908 FNMA GRANTOR TRUST SERIES 2002-T1 CLASS A4 9.50% 11/25/2031 $ 3,720,071
192,675 FNMA SERIES 1988-4 CLASS Z 9.25 03/25/2018 218,255
227,355 FNMA SERIES 1988-5 CLASS Z 9.20 03/25/2018 241,685
96,982 FNMA SERIES 1988-9 CLASS Z 9.45 04/25/2018 106,960
476,081 FNMA SERIES 1989-30 CLASS Z 9.50 06/25/2019 538,919
101,693 FNMA SERIES 1989-49 CLASS E 9.30 08/25/2019 113,633
95,603 FNMA SERIES 1990-111 CLASS Z 8.75 09/25/2020 104,718
259,165 FNMA SERIES 1990-119 CLASS J 9.00 10/25/2020 293,536
137,800 FNMA SERIES 1990-124 CLASS Z 9.00 10/25/2020 159,526
491,162 FNMA SERIES 1990-21 CLASS Z 9.00 03/25/2020 561,547
304,863 FNMA SERIES 1990-27 CLASS Z 9.00 03/25/2020 340,874
166,813 FNMA SERIES 1990-30 CLASS D 9.75 03/25/2020 195,336
153,608 FNMA SERIES 1990-77 CLASS D 9.00 06/25/2020 172,580
644,210 FNMA SERIES 1991-132 CLASS Z 8.00 10/25/2021 715,475
216,551 FNMA SERIES 1992-71 CLASS X 8.25 05/25/2022 238,667
1,270,225 FNMA SERIES G-22 CLASS ZT 8.00 12/25/2016 1,410,743
2,247,148 FNMA WHOLE LOAN SERIES 2002-W4 CLASS A6+/- 5.05 05/25/2042 2,262,074
178,443 FNMA WHOLE LOAN SERIES 2003-W11 CLASS A1+/- 4.40 06/25/2033 162,497
78,592 FNMA WHOLE LOAN SERIES 2003-W3 CLASS 1A4+/- 4.75 08/25/2042 84,799
6,703,823 FNMA WHOLE LOAN SERIES 2003-W6 CLASS 6A+/- 4.93 08/25/2042 7,013,306
2,981,577 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2000-1
CLASS A2 6.50 01/15/2033 3,086,448
2,378,824 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES
2000-C3 CLASS A2 6.96 09/15/2035 2,442,406
3,006,006 GNMA SERIES 2007-69 CLASS TA+/- 5.01 06/16/2031 3,119,152
152,460 GSMPS MORTGAGE LOAN TRUST SERIES 1998-1 CLASS A+/-(i)++ 8.00 09/19/2027 155,093
4,445,190 GSMPS MORTGAGE LOAN TRUST SERIES 2004-4 CLASS 1AF+/-++ 0.64 06/25/2034 3,513,385
3,733,947 GSMPS MORTGAGE LOAN TRUST SERIES 2004-4 CLASS 2A1+/-++ 5.02 06/25/2034 2,866,101
4,229,667 GSMPS MORTGAGE LOAN TRUST SERIES 2006-RP1 CLASS 1AF1+/-++ 0.59 01/25/2036 3,625,309
4,217,400 GSMPS MORTGAGE LOAN TRUST SERIES 2006-RP2 CLASS 1AF1+/-++ 0.64 04/25/2036 3,304,472
1,920,643 GSR MORTGAGE LOAN TRUST SERIES 2004-1 CLASS 2A2+/-(i) 2.23 04/25/2032 1,467,902
105,261 HOUSING SECURITIES INCORPORATED SERIES 1992-8 CLASS C+/- 3.13 06/25/2024 100,301
262,477 HOUSING SECURITIES INCORPORATED SERIES 1992-8 CLASS E+/- 3.84 06/25/2024 258,286
650,452 JPMORGAN ALTERNATIVE LOAN TRUST SERIES 2006-A5 CLASS 1A2+/- 0.30 10/25/2036 618,620
2,209,653 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES 2001 CLASS A3 6.26 03/15/2033 2,270,419
577,948 JPMORGAN MORTGAGE TRUST SERIES 2005-A2 CLASS 3A1+/- 4.87 04/25/2035 573,349
3,048,526 JPMORGAN MORTGAGE TRUST SERIES 2005-A3 CLASS 7CA1+/- 5.09 06/25/2035 2,471,933
54,231 MASTER MORTGAGES TRUST SERIES 2002-3 CLASS 4A1+/- 3.03 10/25/2032 53,327
88 MORGAN STANLEY MORTGAGE TRUST SERIES 35 CLASS 2(i)(d) 15,220.53 04/20/2021 23
43,640 PRUDENTIAL HOME MORTGAGE SECURITIES SERIES 1988-1 CLASS A+/- 3.53 04/25/2018 42,533
14,416 RESECURITIZATION MORTGAGE TRUST SERIES 1998-B CLASS A+/-(i)++ 0.49 04/26/2021 14,416
10,260,174 RESIDENTIAL FINANCE LP SERIES 2003-C CLASS B3+/-++ 1.64 09/10/2035 5,807,258
6,080,103 RESIDENTIAL FINANCE LP SERIES 2003-C CLASS B4+/-++ 1.84 09/10/2035 2,984,115
70,822 SACO I TRUST SERIES 2005-2 CLASS A+/-(i)++ 0.44 04/25/2035 28,324
880,014 SALOMON BROTHERS MORTGAGE SECURITIES VII SERIES 1990-2
CLASS A+/- 4.64 11/25/2020 844,672
3,987,870 STRUCTURED ASSET MORTGAGE INVESTMENTS INCORPORATED SERIES
2001-4 CLASS A1+/- 8.91 10/25/2024 3,779,683
580,956 STRUCTURED ASSET MORTGAGE INVESTMENTS INCORPORATED SERIES
2001-4 CLASS A2+/- 9.80 10/25/2024 550,604
439,450 STRUCTURED ASSET SECURITIES CORPORATION SERIES 1998-2
CLASS A+/- 0.76 02/25/2028 381,409
3,324,767 STRUCTURED ASSET SECURITIES CORPORATION SERIES 1998-RF1 CLASS
A+/-(i)++ 8.55 04/15/2027 3,108,302
4,244,464 STRUCTURED ASSET SECURITIES CORPORATION SERIES 1998-RF2 CLASS
A+/-(i)++ 8.26 07/15/2027 3,886,432
183,284 TERWIN MORTGAGE TRUST SERIES 2004-21HE CLASS 1A1+/- 0.72 12/25/2034 147,087
372,751 WILSHIRE FUNDING CORPORATION SERIES 1996-3 CLASS M2+/- 5.61 08/25/2032 363,355
328,614 WILSHIRE FUNDING CORPORATION SERIES 1996-3 CLASS M3+/- 5.61 08/25/2032 312,335
1,262,338 WILSHIRE FUNDING CORPORATION SERIES 1998-2 CLASS M1+/- 2.00 12/28/2037 929,279
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (COST $122,934,270) 103,663,178
--------------
Wells Fargo Advantage Income Funds 59
Portfolio of Investments--November 30, 2009 (Unaudited)
ULTRA SHORT-TERM INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
CORPORATE BONDS & NOTES: 55.67%
AMUSEMENT & RECREATION SERVICES: 0.13%
$ 900,000 SAN MANUEL ENTERTAINMENT AUTHORITY SERIES 04-B+/-++ 2.46% 12/01/2010 $ 900,000
--------------
AUTOMOTIVE REPAIR, SERVICES & PARKING: 0.48%
3,000,000 AUTOZONE INCORPORATED 5.88 10/15/2012 3,296,460
--------------
BANKING: 1.47%
4,000,000 BANCO SANTANDER CHILE++ 2.88 11/13/2012 4,025,247
3,000,000 BARCLAYS BANK PLC 2.50 01/23/2013 3,009,303
3,000,000 WESTPAC BANKING CORPORATION 2.25 11/19/2012 3,022,914
10,057,464
--------------
BEVERAGES: 0.37%
2,495,000 ANHEUSER BUSCH INBEV++ 3.00 10/15/2012 2,535,660
--------------
BUSINESS SERVICES: 0.48%
3,000,000 THOMPSON CORPORATION 6.20 01/05/2012 3,286,050
--------------
CHEMICALS: 0.26%
1,720,000 DOW CHEMICAL COMPANY 6.13 02/01/2011 1,793,262
--------------
CHEMICALS & ALLIED PRODUCTS: 1.70%
3,850,000 CLOROX COMPANY 4.20 01/15/2010 3,866,297
3,095,000 MOSAIC COMPANY SENIOR NOTES++ 7.38 12/01/2014 3,295,900
4,000,000 PRAXAIR INCORPORATED 6.38 04/01/2012 4,442,900
11,605,097
--------------
COMMUNICATIONS: 5.17%
4,000,000 BRITISH TELECOMMUNICATIONS PLC 9.13 12/15/2010 4,293,556
3,830,000 CBS CORPORATION 6.63 05/15/2011 4,010,661
3,000,000 CINGULAR WIRELESS SERVICES 8.13 05/01/2012 3,441,609
5,000,000 COMCAST CABLE COMMUNICATIONS LLC<< 6.75 01/30/2011 5,302,155
1,000,000 COX COMMUNICATIONS INCORPORATED 4.63 01/15/2010 1,003,870
1,000,000 COX COMMUNICATIONS INCORPORATED 7.75 11/01/2010 1,050,850
3,000,000 COX ENTERPRISES INCORPORATED++ 7.88 09/15/2010 3,130,272
2,500,000 SPRINT CAPITAL CORPORATION 7.63 01/30/2011 2,525,000
3,000,000 TIME WARNER CABLE INCORPORATED 5.40 07/02/2012 3,232,986
2,200,000 VERIZON GLOBAL FUNDING CORPORATION 7.25 12/01/2010 2,337,152
4,713,000 VIACOM INCORPORATED 5.75 04/30/2011 4,945,879
35,273,990
--------------
DEPOSITORY INSTITUTIONS: 5.44%
5,000,000 ALLFIRST PREFERRED CAPITAL TRUST+/- 1.78 07/15/2029 3,221,800
2,700,000 BANK OF NEW YORK MELLON CORPORATION+/- 0.44 06/29/2012 2,712,528
7,500,000 CENTRAL FIDELITY CAPITAL I SERIES A+/- 1.28 04/15/2027 4,563,270
1,925,000 HUDSON UNITED BANK MAHWAH NJ SERIES BKNT 7.00 05/15/2012 2,082,617
6,000,000 INTER-AMERICAN DEVELOPMENT BANK+/- 0.72 05/20/2014 6,000,166
8,500,000 JPMORGAN CHASE & COMPANY SERIES 3+/- 0.53 12/26/2012 8,570,193
4,000,000 M&I MARSHALL & ILSLEY BANK SERIES BN+/- 0.60 12/04/2012 2,916,592
2,000,000 PNC FUNDING CORPORATION+/- 0.42 01/31/2012 1,944,052
2,100,000 PNC FUNDING CORPORATION+/- 0.49 04/01/2012 2,111,260
3,000,000 STATE STREET BANK & TRUST COMPANY SERIES FRN+/- 0.50 09/15/2011 3,011,706
37,134,184
--------------
60 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
ULTRA SHORT-TERM INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
DIVERSIFIED FINANCIAL SERVICES: 1.24%
$ 3,500,000 AMERITRADE HOLDING COMPANY 2.95% 12/01/2012 $ 3,519,551
5,000,000 DISCOVER FINANCIAL SERVICES+/- 0.83 06/11/2010 4,947,360
8,466,911
--------------
EATING & DRINKING PLACES: 0.96%
3,000,000 DARDEN RESTAURANTS INCORPORATED 5.63 10/15/2012 3,241,050
3,000,000 YUM! BRANDS INCORPORATED 8.88 04/15/2011 3,276,714
6,517,764
--------------
ELECTRIC INTERGRATED: 0.46%
3,000,000 OHIO POWER COMPANY 5.30 11/01/2010 3,116,316
--------------
ELECTRIC, GAS & SANITARY SERVICES: 5.12%
3,000,000 ALLEGHENY ENERGY SUPPLY++ 8.25 04/15/2012 3,313,347
5,972,000 ALLIED WASTE NORTH AMERICA INCORPORATED SERIES B 5.75 02/15/2011 6,264,730
3,000,000 CAROLINA POWER & LIGHT COMPANY 6.50 07/15/2012 3,342,168
2,000,000 ENERGY TRANSFER PARTNERS LP 5.65 08/01/2012 2,139,006
5,000,000 ENTERGY GULF STATES INCORPORATED+/- 0.76 12/01/2009 5,000,000
3,000,000 ENTERGY GULF STATES INCORPORATED 5.12 08/01/2010 3,001,929
2,400,000 NEVADA POWER COMPANY SERIES A 8.25 06/01/2011 2,609,822
4,000,000 OHIO POWER COMPANY+/- 0.46 04/05/2010 3,999,156
3,000,000 PEOPLES ENERGY CORPORATION 6.90 01/15/2011 3,164,289
2,071,861 SALTON SEA FUNDING CORPORATION SERIES C 7.84 05/30/2010 2,085,846
34,920,293
--------------
ELECTRONIC: 0.27%
1,860,000 THERMO FISHER SCIENTIFIC++ 2.15 12/28/2012 1,865,329
--------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER
EQUIPMENT: 2.32%
4,500,000 AGILENT TECHNOLOGIES INCORPORATED 4.45 09/14/2012 4,655,322
4,000,000 BAE SYSTEMS HOLDINGS INCORPORATED++ 6.40 12/15/2011 4,291,528
7,000,000 NATIONAL SEMICONDUCTOR CORPORATION+/- 0.55 06/15/2010 6,906,011
15,852,861
--------------
FINANCIAL: 0.45%
2,750,000 GRAND METRO INVESTMENT CORPORATION 9.00 08/15/2011 3,093,255
--------------
FINANCIAL SERVICES: 0.23%
1,500,000 MASS MUTUAL GLOBAL FUNDING II++ 3.63 07/16/2012 1,559,718
--------------
FOOD: 0.30%
1,980,000 AHOLD FINANCE USA LLC 8.25 07/15/2010 2,063,360
--------------
FOOD & KINDRED PRODUCTS: 2.42%
5,000,000 GENERAL MILLS INCORPORATED+/- 0.41 01/22/2010 5,000,185
4,000,000 HJ HEINZ COMPANY++ 15.59 12/01/2020 5,059,360
3,000,000 KRAFT FOODS INCORPORATED 6.25 06/01/2012 3,279,474
2,973,000 SARA LEE CORPORATION 6.25 09/15/2011 3,201,820
16,540,839
--------------
FOOD STORES: 0.85%
5,425,000 SAFEWAY INCORPORATED 6.50 03/01/2011 5,764,307
--------------
GAS DISTRIBUTION: 0.62%
4,000,000 FLORIDA GAS TRANSMISSION COMPANY++ 7.63 12/01/2010 4,214,836
--------------
Wells Fargo Advantage Income Funds 61
Portfolio of Investments--November 30, 2009 (Unaudited)
ULTRA SHORT-TERM INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
GENERAL MERCHANDISE STORES: 1.43%
$ 3,000,000 FEDERATED RETAIL HOLDINGS INCORPORATED 5.35% 03/15/2012 $ 3,000,000
3,400,000 JCPENNEY COMPANY INCORPORATED 8.00 03/01/2010 3,438,250
3,000,000 KOHLS CORPORATION 7.38 10/15/2011 3,296,592
9,734,842
--------------
HOLDING COMPANY - DIVERSIFIED: 0.50%
3,233,000 HUTCHISON WHAMPOA INTERNATIONAL++ 7.00 02/16/2011 3,437,759
--------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 1.44%
3,500,000 BLACK & DECKER CORPORATION 7.13 06/01/2011 3,759,560
3,000,000 HEWLETT-PACKARD COMPANY+/- 1.31 05/27/2011 3,047,433
3,000,000 INGERSOLL-RAND GLOBAL HOLDING COMPANY LIMITED+/- 1.77 08/13/2010 2,988,756
9,795,749
--------------
INSURANCE CARRIERS: 2.24%
3,000,000 PRUDENTIAL FINANCIAL INCORPORATED SERIES MTN 5.10 12/14/2011 3,160,434
5,000,000 SUN LIFE FINANCIAL GLOBAL FUNDING LP+/-++ 0.53 07/06/2010 4,975,420
4,000,000 UNITEDHEALTH GROUP INCORPORATED+/- 1.58 02/07/2011 4,015,464
3,000,000 WELLPOINT INCORPORATED 5.00 01/15/2011 3,114,186
15,265,504
--------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL &
OPTICAL GOODS: 0.76%
5,000,000 XEROX CORPORATION 7.13 06/15/2010 5,149,705
--------------
MEDIA: 0.63%
4,000,000 REED ELSEVIER CAPITAL INCORPORATED 6.75 08/01/2011 4,327,488
--------------
MEDICAL PRODUCTS: 0.63%
4,000,000 HOSPIRA INCORPORATED 5.55 03/30/2012 4,317,200
--------------
MISCELLANEOUS RETAIL: 0.51%
3,216,585 CVS CAREMARK CORPORATION++ 7.77 01/10/2012 3,507,728
--------------
MOTION PICTURES: 0.52%
3,000,000 HISTORIC TW INCORPORATED 9.13 01/15/2013 3,522,507
--------------
NON-DEPOSITORY CREDIT INSTITUTIONS: 3.63%
5,000,000 AMERICAN HONDA FINANCE CORPORATION SERIES MTN+/-++ 0.68 02/05/2010 4,998,835
3,000,000 EVEREST REINSURANCE HOLDINGS INCORPORATED 8.75 03/15/2010 3,053,778
8,500,000 GENERAL ELECTRIC CAPITAL CORPORATION+/- 0.37 04/28/2011 8,423,900
3,000,000 NISSAN MOTOR ACCEPTANCE CORPORATION SERIES++ 4.63 03/08/2010 2,998,056
5,000,000 UNILEVER CAPITAL CORPORATION 7.13 11/01/2010 5,308,665
24,783,234
--------------
OFFICE SUPPLIES: 0.47%
3,000,000 STAPLES INCORPORATED 7.75 04/01/2011 3,236,634
--------------
OIL & GAS: 0.88%
3,100,000 KERR MCGEE CORPORATION 6.88 09/15/2011 3,357,002
2,315,000 WESTERN OIL SANDS INCORPORATED 8.38 05/01/2012 2,627,898
5,984,900
--------------
OIL & GAS EXTRACTION: 1.62%
3,334,000 DEVON FINANCING CORPORATION 6.88 09/30/2011 3,643,752
3,000,000 ENTERPRISE PRODUCTS PARTNERS OPERATING LP 7.50 02/01/2011 3,184,725
62 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
ULTRA SHORT-TERM INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
OIL & GAS EXTRACTION (CONTINUED)
$ 2,020,000 WEATHERFORD INTERNATIONAL INCORPORATED 5.95% 06/15/2012 $ 2,184,913
2,000,000 XTO ENERGY INCORPORATED 5.00 08/01/2010 2,054,560
11,067,950
--------------
PETROLEUM REFINING & RELATED INDUSTRIES: 0.48%
3,000,000 VALERO ENERGY CORPORATION 6.88 04/15/2012 3,283,755
--------------
PHARMACEUTICALS: 0.60%
4,000,000 PFIZER INCORPORATED+/- 2.25 03/15/2011 4,102,560
--------------
PIPELINES: 1.66%
1,500,000 ENTERPRISE PRODUCTS OPERATING LLC 7.63 02/15/2012 1,665,090
2,839,000 KINDER MORGAN ENERGY PARTNERS 6.75 03/15/2011 3,022,388
3,130,000 PLAINS ALL AMERICAN PIPELINE LP PAA FINANCE CORPORATION 7.75 10/15/2012 3,563,771
3,000,000 WILLIAMS COMPANIES INCORPORATED++ 6.38 10/01/2010 3,069,162
11,320,411
--------------
RAILROADS: 0.65%
4,180,000 CSX CORPORATION 6.75 03/15/2011 4,452,778
--------------
REAL ESTATE INVESTMENT TRUSTS (REITS): 1.70%
2,501,000 HRPT PROPERTIES TRUST+/- 0.90 03/16/2011 2,309,934
2,500,000 NATIONWIDE HEALTH PROPERTIES INCORPORATED 6.50 07/15/2011 2,608,325
3,060,000 SIMON PROPERTY GROUP LP 4.88 08/15/2010 3,129,783
3,480,000 WASHINGTON REAL ESTATE INVESTMENT TRUST 5.95 06/15/2011 3,562,260
11,610,302
--------------
RETAIL: 0.49%
3,019,000 TARGET CORPORATION 5.88 03/01/2012 3,312,519
--------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 0.92%
6,000,000 MORGAN STANLEY 3.25 12/01/2011 6,280,470
--------------
TRANSPORTATION: 0.47%
3,091,000 RYDER SYSTEM INCORPORATED 5.95 05/02/2011 3,214,458
--------------
TRANSPORTATION EQUIPMENT: 0.88%
6,032,000 LOCKHEED MARTIN CORPORATION 8.20 12/01/2009 6,032,000
--------------
WASTE MANAGEMENT: 0.60%
3,705,000 WASTE MANAGEMENT INCORPORATED 6.38 11/15/2012 4,102,821
--------------
WHOLESALE TRADE NON-DURABLE GOODS: 1.22%
5,000,000 BROWN-FORMAN CORPORATION+/- 0.39 04/01/2010 4,999,635
3,000,000 MCKESSON CORPORATION 7.75 02/01/2012 3,316,380
8,316,015
--------------
TOTAL CORPORATE BONDS & NOTES (COST $380,889,001) 380,017,245
--------------
FOREIGN CORPORATE BONDS: 4.69%
2,910,000 COVIDIEN INTERNATIONAL FINANCE 5.15 10/15/2010 3,019,806
3,000,000 HUSKY ENERGY INCORPORATED 6.25 06/15/2012 3,272,691
2,790,000 RIO TINTO ALCAN INCORPORATED 6.45 03/15/2011 2,930,736
3,500,000 ROGERS WIRELESS INCORPORATED 9.63 05/01/2011 3,872,663
2,500,000 TELECOM ITALIA CAPITAL 4.88 10/01/2010 2,570,425
2,000,000 TELECOM ITALIA CAPITAL+/- 0.76 02/01/2011 1,985,312
3,500,000 TELEFONICA EUROPE BV 7.75 09/15/2010 3,684,254
5,000,000 VODAFONE GROUP PLC+/- 0.64 06/15/2011 5,006,930
3,500,000 WESTFIELD CAPITAL CORPORATION++ 4.38 11/15/2010 3,550,190
2,000,000 WOOLWORTHS LIMITED++ 5.25 11/15/2011 2,107,264
TOTAL FOREIGN CORPORATE BONDS (COST $31,266,256) 32,000,271
--------------
Wells Fargo Advantage Income Funds 63
Portfolio of Investments--November 30, 2009 (Unaudited)
ULTRA SHORT-TERM INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
MUNICIPAL BONDS & NOTES: 4.72%
CALIFORNIA: 0.61%
$ 4,185,000 ALAMEDA COUNTY CA CAPITAL APPRECIATION TAXABLE-SERIES B
(OTHER REVENUE, MBIA INSURED) 3.95% 12/01/2009 $ 4,185,000
--------------
GEORGIA: 0.18%
1,175,000 GEORGIA MUNICIPAL GAS AUTHORITY TAXABLE GAS PORTFOLIO III
SERIES F (UTILITIES REVENUE) 3.07 08/01/2011 1,193,295
--------------
ILLINOIS: 0.59%
4,000,000 CHICAGO IL BOARD OF EDUCATION (PROPERTY TAX REVENUE, ASSURED
GUARANTY)+/-ss 3.10 03/01/2036 4,000,000
--------------
IOWA: 0.09%
625,000 CORALVILLE IA ANNUAL APPROPRIATION TAX INCREMENT SERIES E
(TAX INCREMENTAL REVENUE) 5.34 06/01/2010 629,163
--------------
LOUISIANA: 1.05%
3,000,000 PARISH OF IBERVILLE LA (IDR)+/-ss 5.50 06/01/2029 3,032,940
4,000,000 STATE OF LOUISIANA (GAS & FUELS TAX REVENUE)+/-ss 2.76 05/01/2043 4,000,000
150,584 TOBACCO SETTLEMENT FINANCING CORPORATION LA SERIES 2001A
(OTHER REVENUE LOC) 6.36 05/15/2025 129,988
7,162,928
--------------
NEW YORK: 0.30%
2,000,000 BABYLON NY INDUSTRIAL DEVELOPMENT AGENCY TAXABLE COVANTA
BABYLON SERIES B (IDR) 4.67 01/01/2012 2,031,600
--------------
OHIO: 0.59%
4,000,000 COLUMBUS OHIO BUILD AMERICA BONDS (AD VALOREM PROPERTY TAX
REVENUE) 2.26 07/01/2013 4,053,960
--------------
PENNSYLVANIA: 0.99%
7,200,000 HARRISBURG PA AUTHORITY RESOURCE RECOVERY FACILITY CAPITAL
APPRECIATION LIMITED OBLIGATION SERIES D (SPECIAL
FACILITIES REVENUE) 5.87 12/15/2010 6,778,728
--------------
TEXAS: 0.32%
2,200,000 SOUTH TEXAS DETENTION COMPLEX DEVELOPMENT CORPORATION
(NATL-RE INSURED) 4.11 02/01/2010 2,207,216
--------------
TOTAL MUNICIPAL BONDS & NOTES (COST $32,116,970) 32,241,890
--------------
YIELD
-------------
COLLATERAL FOR SECURITIES LENDING: 0.08%
COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.01%
18,016 AIM STIT-LIQUID ASSETS PORTFOLIO(s) 0.21 18,016
18,016 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(s) 0.16 18,016
18,016 DREYFUS CASH MANAGEMENT FUND INSTITUTIONAL(s) 0.11 18,016
18,016 DWS MONEY MARKET SERIES INSTITUTIONAL(s) 0.20 18,016
72,064
--------------
COLLATERAL INVESTED IN OTHER ASSETS: 0.07%
3,503 ALLIED IRISH BANKS NORTH AMERICA INCORPORATED 0.26 12/07/2009 3,503
1,251 AMSTEL FUNDING CORPORATION++(p) 1.25 12/18/2009 1,250
1,251 ANTALIS US FUNDING CORPORATION++(p) 0.18 12/03/2009 1,251
3,753 ANTALIS US FUNDING CORPORATION++(p) 0.20 12/04/2009 3,753
3,003 ARABELLA FINANCE LLC++(p) 0.35 12/01/2009 3,003
4,254 ARABELLA FINANCE LLC++(p) 0.40 12/03/2009 4,254
125 ARABELLA FINANCE LLC++(p) 0.40 12/04/2009 125
2,502 ASPEN FUNDING CORPORATION++(p) 0.18 12/21/2009 2,502
7,507 BANK OF AMERICA 0.18 12/23/2009 7,506
21,757 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED
BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $21,757) 0.16 12/01/2009 21,757
3,753 BANK OF IRELAND 0.35 12/01/2009 3,753
3,003 BANK OF IRELAND 0.50 12/02/2009 3,003
64 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
ULTRA SHORT-TERM INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 1,212 BARTON CAPITAL CORPORATION++(p) 0.18% 12/01/2009 $ 1,212
626 BELMONT FUNDING LLC++(p) 0.50 12/01/2009 626
3,253 BNP PARIBAS (NEW YORK) 0.21 12/08/2009 3,253
2,752 BNP PARIBAS (NEW YORK) 0.21 12/14/2009 2,752
7,507 BRYANT BANK FUNDING++ 0.18 12/23/2009 7,506
6,255 CAFCO LLC++ 0.17 12/09/2009 6,255
275 CALCASIEU PARISH LA+/-ss 0.40 12/01/2027 275
6,005 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY+/-ss 0.23 11/01/2026 6,005
801 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.35 06/01/2028 801
6,255 CHARTA LLC++(p) 0.17 12/09/2009 6,255
664 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.30 10/01/2038 664
1,251 COOK COUNTY IL+/-ss 0.40 11/01/2030 1,251
7,593 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE
$7,593) 0.17 12/01/2009 7,593
4,254 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.40 12/15/2037 4,254
3,003 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/02/2009 3,003
3,003 DEXIA CREDIT LOCAL DE FRANCE SA 0.27 12/04/2009 3,003
3,628 DEXIA CREDIT LOCAL DE FRANCE SA 0.26 12/07/2009 3,628
6,255 E.ON AG++ 0.17 12/21/2009 6,255
6,255 ENI FINANCE USA INCORPORATED++ 0.17 12/18/2009 6,255
6,506 FORTIS FUNDING LLC++ 0.20 12/29/2009 6,505
6,756 GDF SUEZ++ 0.17 12/15/2009 6,755
5,004 GEMINI SECURITIZATION INCORPORATED++(p) 0.18 12/10/2009 5,004
6,250 GOLDMAN SACHS REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE
$6,250) 0.17 12/01/2009 6,250
6,255 GOTHAM FUNDING CORPORATION++ 0.18 12/15/2009 6,255
1,251 GRAMPIAN FUNDING++(p) 0.25 12/03/2009 1,251
5,255 GRAMPIAN FUNDING++(p) 0.28 12/15/2009 5,254
70,893 GRYPHON FUNDING LIMITED(i)(a) 0.00 08/05/2010 26,365
4,114 HAMILTON COUNTY OHIO HOSPITALS+/-ss 0.20 05/15/2037 4,114
413 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.30 11/01/2042 413
2,027 HOUSTON TX UTILITY SYSTEM+/-ss 0.27 05/15/2034 2,027
716 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.30 07/01/2029 716
500 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.29 01/01/2018 500
5,004 ING USA FUNDING LLC 0.19 12/07/2009 5,004
1,251 ING USA FUNDING LLC 0.18 12/09/2009 1,251
19,210 JPMORGAN CHASE REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE
$19,210) 0.17 12/01/2009 19,210
2,502 JUPITER SECURITIZATION CORPORATION++(p) 0.18 12/02/2009 2,502
1,251 JUPITER SECURITIZATION CORPORATION++ 0.18 12/03/2009 1,251
751 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.29 04/15/2025 751
7,507 KBC BANK NV BRUSSELS 0.18 12/01/2009 7,507
1,501 LLOYDS TSB BANK PLC 0.18 12/17/2009 1,501
5,004 LLOYDS TSB BANK PLC (NEW YORK) 0.20 12/07/2009 5,004
2,002 LMA AMERICAS LLC++(p) 0.18 12/11/2009 2,002
1,126 LMA AMERICAS LLC++(p) 0.18 12/17/2009 1,126
3,753 LMA AMERICAS LLC++(p) 0.19 12/21/2009 3,753
1,126 LOUISIANA PUBLIC FACILITIES AUTHORITY+/-ss 0.19 10/01/2033 1,126
6,205 MASSACHUSETTS HEFA+/-ss 0.25 10/01/2034 6,205
687 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.24 02/01/2036 687
5,255 NATIXIS 0.27 12/07/2009 5,255
500 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.31 01/01/2018 500
5,505 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.22 07/01/2034 5,505
5,004 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.24 12/01/2040 5,004
6,255 NEWPORT FUNDING CORPORATION++(p) 0.18 12/15/2009 6,255
1,225 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.30 01/01/2034 1,225
Wells Fargo Advantage Income Funds 65
Portfolio of Investments--November 30, 2009 (Unaudited)
ULTRA SHORT-TERM INCOME FUND
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
- ------------- ------------------------------------------------------------- ------------- ------------- --------------
COLLATERAL INVESTED IN OTHER ASSETS (continued)
$ 2,531 RBS SECURITIES INCORPORATED REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE
$2,531) 0.18% 12/01/2009 $ 2,531
876 REGENCY MARKETS #1 LLC++(p) 0.18 12/04/2009 876
4,159 REGENCY MARKETS #1 LLC++(p) 0.20 12/09/2009 4,158
1,251 ROMULUS FUNDING CORPORATION++ 0.30 12/15/2009 1,251
4,504 ROYAL BANK OF SCOTLAND PLC 0.20 12/02/2009 4,504
3,503 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.20 12/01/2028 3,503
5,004 SOCIETE GENERALE NORTH AMERICA 0.19 12/18/2009 5,004
313 STARBIRD FUNDING CORPORATION++(p) 0.15 12/01/2009 313
5,004 STARBIRD FUNDING CORPORATION++(p) 0.20 12/03/2009 5,004
6,255 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++ 0.18 12/18/2009 6,255
1,501 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 12/17/2009 1,501
5,079 TULIP FUNDING CORPORATION++(p) 0.19 12/07/2009 5,079
1,651 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.24 07/01/2032 1,651
5,004 UBS AG (STAMFORD CT) 0.31 12/04/2009 5,004
7,507 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 7,507
751 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.29 12/15/2040 751
218,182 VFNC CORPORATION+/-(i)(a)++ 0.24 09/30/2010 109,091
313 VICTORY RECEIVABLES CORPORATION++(p) 0.15 12/01/2009 313
1,251 VICTORY RECEIVABLES CORPORATION++(p) 0.19 12/08/2009 1,251
4,146 VICTORY RECEIVABLES CORPORATION++(p) 0.18 12/16/2009 4,144
450,230
--------------
TOTAL COLLATERAL FOR SECURITIES LENDING (COST $512,673) 522,294
--------------
SHARES YIELD
- ------------- -------------
SHORT-TERM INVESTMENTS: 8.17%
MUTUAL FUNDS: 8.07%
55,085,589 WELLS FARGO ADVANTAGE MONEY MARKET TRUST~+++(u) 0.13 55,085,589
--------------
PRINCIPAL
- -------------
US TREASURY BILLS: 0.10%
$ 100,000 US TREASURY BILL### 0.07 12/24/2009 99,996
200,000 US TREASURY BILL### 0.08 12/24/2009 199,990
400,000 US TREASURY BILL### 0.10 12/24/2009 399,975
699,961
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $55,785,550) 55,785,550
--------------
TOTAL INVESTMENTS IN SECURITIES
(COST $727,325,385)* 99.56% $ 679,663,101
OTHER ASSETS AND LIABILITIES, NET 0.44 3,020,992
------ --------------
TOTAL NET ASSETS 100.0% $ 682,684,093
===== ==============
66 Wells Fargo Advantage Income Funds
Portfolio of Investments--November 30, 2009 (Unaudited)
ULTRA SHORT-TERM INCOME FUND
- ----------
+/- Variable rate investments.
(i) Illiquid security.
(a) Security fair valued in accordance with the procedures approved by the
Board of Trustees.
++ 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.
(d) This security is a structured note which generates income based on a coupon
formula (-1,500*1 month LIBOR + 15,573.5%) and the prepayment behavior of
the underlying collateral. The coupon is subject to a mandatory cap of
15,573.5% and a mandatory floor of 11%. The current interest rate is:
(-1500*0.23531)+15,573.5% = 15,220.53%.
<< All or a portion of this security is on loan.
(s) Rate shown is the 1-day annualized yield at period end.
(p) Asset-backed commercial paper.
ss These securities are subject to a demand feature which reduces the
effective maturity.
~ This Wells Fargo Advantage Fund invests cash balances that it retains for
liquidity purposes in a Wells Fargo Advantage Money Market Fund. The Wells
Fargo Advantage Money Market Fund does not pay an investment advisory fee.
+++ Short-term security of an affiliate of the Fund with a cost of $55,085,589.
## Zero coupon bond. Interest rate presented is yield to maturity.
# Security pledged as collateral for futures transactions.
(u) Rate shown is the 7-day annualized yield at period end.
* Cost for federal income tax purposes is $727,410,641 and net unrealized
appreciation (depreciation) consists of:
Gross unrealized appreciation $ 10,117,542
Gross unrealized depreciation (57,865,082)
------------
Net unrealized depreciation $(47,747,540)
The accompanying notes are an integral part of these financial statements.
THIS PAGE IS INTENTIONALLY LEFT BLANK.
68 Wells Fargo Advantage Income Funds
Statements of Assets and Liabilities--November 30, 2009 (Unaudited)
Government High
Securities Income
Fund Fund
-------------- -------------
ASSETS
Investments
In unaffiliated securities, at value (including securities on loan) .. $2,067,690,657 $ 592,621,988
Collateral received for securities loaned ............................ 495,723,951 14,822,438
In affiliates ........................................................ 373,697,943 15,470,404
-------------- -------------
Total investments at value (see cost below) ............................. 2,937,112,551 622,914,830
-------------- -------------
Cash .................................................................... 1,286,229 1,209,547
Receivable for daily variation margin on futures contracts .............. 59,163 0
Receivable for Fund shares sold ......................................... 5,041,106 1,652,050
Receivable for investments sold ......................................... 37,331,770 4,189,696
Receivable for interest ................................................. 9,556,373 13,538,905
Prepaid expenses and other assets ....................................... 33,939 67,974
-------------- -------------
Total Assets ............................................................ 2,990,421,131 643,573,002
-------------- -------------
LIABILITIES
Payable for daily variation margin on futures contracts ................. 0 27,116
Payable for Fund shares redeemed ........................................ 3,016,648 1,669,520
Payable for investments purchased ....................................... 479,751,488 14,976,213
Dividends payable ....................................................... 1,382,567 1,249,620
Payable upon receipt of securities loaned ............................... 494,272,973 14,667,654
Payable to investment advisor and affiliates ............................ 1,270,283 391,308
Accrued expenses and other liabilities .................................. 87,478 0
-------------- -------------
Total liabilities ....................................................... 979,781,437 32,981,431
-------------- -------------
TOTAL NET ASSETS ........................................................ $2,010,639,694 $ 610,591,571
============== =============
NET ASSETS CONSIST OF
Paid-in-capital ......................................................... $1,967,952,268 $ 939,113,889
Undistributed/overdistributed net investment income ..................... 1,032,569 (9,273)
Accumulated net realized loss on investments ............................ (22,829,123) (343,151,200)
Net unrealized appreciation (depreciation) of investments ............... 62,912,404 14,715,810
Net unrealized appreciation (depreciation) from investments
of collateral received for securities loaned ......................... 918,436 (49,996)
Net unrealized appreciation (depreciation) of futures ................... 653,140 (27,659)
-------------- -------------
TOTAL NET ASSETS ........................................................... $2,010,639,694 $ 610,591,571
============== =============
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE (1)
Net assets - Class A .................................................... $ 180,914,443 $ 105,787,019
Shares outstanding - Class A ............................................ 16,449,207 15,406,260
Net asset value per share - Class A ..................................... $ 11.00 $ 6.87
Maximum offering price per share - Class A .............................. $ 11.52(2) $ 7.19(2)
Net assets - Class B .................................................... $ 3,932,847 $ 7,932,103
Shares outstanding - Class B ............................................ 357,621 1,155,399
Net asset value and offering price per share - Class B .................. $ 11.00 $ 6.87
Net assets - Class C .................................................... $ 26,100,994 $ 18,837,816
Shares outstanding - Class C ............................................ 2,373,463 2,743,406
Net asset value and offering price per share - Class C .................. $ 11.00 $ 6.87
Net assets - Administrator Class ........................................ $ 278,280,500 NA
Shares outstanding - Administrator Class ................................ 25,305,053 NA
Net asset value and offering price per share - Administrator Class ...... $ 11.00 NA
Net assets - Institutional Class ........................................ $ 417,488,627 $ 170,245,435
Shares outstanding - Institutional Class ................................ 37,988,868 24,570,968
Net asset value and offering price per share - Institutional Class ...... $ 10.99 $ 6.93
Net assets - Investor Class ............................................. $1,103,922,283 $ 307,789,198
Shares outstanding - Investor Class ..................................... 100,311,482 44,650,908
Net asset value and offering price per share - Investor Class ........... $ 11.00 $ 6.89
-------------- -------------
Investments at cost ..................................................... $2,873,281,711 $ 608,249,016
-------------- -------------
Securities on loan, at value ............................................ $ 477,797,128 $ 13,131,491
-------------- -------------
- ----------
(1.) Each Fund has an unlimited number of authorized shares.
(2.) Maximum offering price is computed as 100/95.50 of net asset value. On
investments of $50,000 or more, the offering price is reduced.
(3.) Maximum offering price is computed as 100/97 of net asset value. On
investments of $50,000 or more, the offering price is reduced.
(4.) Maximum offering price is computed as 100/98 of net asset value. On
investments of $50,000 or more, the offering price is reduced.
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 69
Statements of Assets and Liabilities--November 30, 2009 (Unaudited)
Short-Term Short-Term Ultra
Bond High Yield Short-Term
Fund Bond Fund Income Fund
- ------------- ------------- -------------
$ 366,945,297 $ 305,176,972 $ 624,055,218
9,572,779 6,331,930 522,294
39,215,838 23,239,027 55,085,589
- ------------- ------------- -------------
415,733,914 334,747,929 679,663,101
- ------------- ------------- -------------
1,120 488,599 0
0 0 0
618,855 747,114 1,154,712
0 6,884 0
3,923,884 4,641,095 6,196,123
3,420 61,581 0
- ------------- ------------- -------------
420,281,193 340,693,202 687,013,936
- ------------- ------------- -------------
70,840 0 145,745
488,846 1,269,305 851,463
1,359,064 8,056,250 2,271,187
123,127 261,590 155,435
9,470,770 6,311,187 507,094
215,072 243,943 365,285
0 0 33,634
- ------------- ------------- -------------
11,727,719 16,142,275 4,329,843
- ------------- ------------- -------------
$ 408,553,474 $ 324,550,927 $ 682,684,093
============= ============= =============
$ 527,661,248 $ 387,115,981 $ 988,767,498
(74,983) (14,004) (76,487)
(112,532,288) (68,944,812) (258,200,444)
(6,543,242) 6,397,693 (47,671,905)
112,977 (3,931) 9,621
(70,238) 0 (144,190)
- ------------- ------------- -------------
$ 408,553,474 $ 324,550,927 $ 682,684,093
============= ============= =============
$ 26,191,609 $ 147,117,723 $ 90,324,907
3,056,793 18,230,241 10,790,604
$ 8.57 $ 8.07 $ 8.37
$ 8.84(3) $ 8.32(3) $ 8.54(4)
NA NA NA
NA NA NA
NA NA NA
$ 4,913,504 $ 24,738,235 $ 12,650,587
573,889 3,065,433 1,511,393
$ 8.56 $ 8.07 $ 8.37
NA NA $ 79,616,606
NA NA 9,545,050
NA NA $ 8.34
$ 113,768,282 NA $ 60,428,577
13,264,391 NA 7,219,599
$ 8.58 NA $ 8.37
$ 263,680,079 $ 152,694,969 $ 439,663,416
30,780,526 18,920,744 52,502,822
$ 8.57 $ 8.07 $ 8.37
- ------------- ------------- -------------
$ 422,164,179 $ 328,354,167 $ 727,325,385
- ------------- ------------- -------------
$ 8,549,816 $ 6,011,568 $ 371,151
- ------------- ------------- -------------
70 Wells Fargo Advantage Income Funds
Statements of Operations--For the Six Months Ended November 30, 2009 (Unaudited)
Government High
Securities Income
Fund Fund
------------ ------------
INVESTMENT INCOME
Interest .......................................................... $ 45,393,367 $ 22,060,292
Interest from affiliated securities ............................... 1,240,035 2,202,137
Securities lending income ......................................... 303,089 56,091
------------ ------------
Total investment income .............................................. 46,936,491 24,318,520
------------ ------------
EXPENSES
Advisory fees ..................................................... 3,584,409 1,414,992
Administration fees
Fund level ..................................................... 485,199 142,367
Class A ........................................................ 160,994 106,555
Class B ........................................................ 4,155 7,245
Class C ........................................................ 21,634 15,164
Administrator Class ............................................ 135,402 NA
Institutional Class ............................................ 145,688 59,542
Investor Class ................................................. 1,262,971 318,919
Custody fees ...................................................... 161,353 47,049
Shareholder servicing fees
Class A ........................................................ 222,532 147,081
Class B ........................................................ 5,410 9,754
Class C ........................................................ 30,047 20,830
Administrator Class ............................................ 338,506 NA
Investor Class ................................................. 1,365,807 341,044
Accounting fees ................................................... 57,717 24,723
Distribution fees
Class B ........................................................ 17,311 30,187
Class C ........................................................ 90,142 63,183
Professional fees ................................................. 27,362 29,283
Registration fees ................................................. 23,947 25,322
Shareholder reports ............................................... 212,007 32,351
Trustees' fees .................................................... 5,289 5,289
Other fees and expenses ........................................... 17,633 7,879
------------ ------------
Total expenses ....................................................... 8,375,515 2,848,759
------------ ------------
LESS
Waived fees and reimbursed expenses ............................... (317,330) (421,145)
Net expenses ...................................................... 8,058,185 2,427,614
------------ ------------
Net investment income ................................................ 38,878,306 21,890,906
------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
NET REALIZED GAIN (LOSS) FROM
Unaffiliated securities ........................................... 9,856,205 13,445,211
Collateral received for securities loaned ......................... (11,476,296) (717,569)
Futures transactions .............................................. 781,897 (437,708)
------------ ------------
Net realized gain (loss) from investments ............................ (838,194) 12,289,934
------------ ------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF
Unaffiliated securities ........................................... 38,077,949 30,547,181
Collateral received for securities loaned ......................... 14,556,577 1,054,061
Futures transactions .............................................. 585,471 (114,531)
------------ ------------
Net change in unrealized appreciation (depreciation) of investments .. 53,219,997 31,486,711
------------ ------------
Net realized and unrealized gain (loss) on investments ............... 52,381,803 43,776,645
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 91,260,109 $ 65,667,551
============ ============
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 71
Statements of Operations--For the Six Months Ended November 30, 2009 (Unaudited)
Short-Term Ultra
Short-Term High Yield Short-Term
Bond Fund Bond Fund Income Fund
- ----------- ----------- -----------
$ 7,492,213 $ 8,328,282 $10,173,766
231,129 1,298,087 380,512
13,878 4,288 4,371
- ----------- ----------- -----------
7,737,220 9,630,657 10,558,649
- ----------- ----------- -----------
734,022 766,270 1,190,935
91,753 76,627 150,435
17,587 131,253 51,218
NA NA NA
2,488 17,026 7,781
NA NA 34,085
35,205 NA 14,538
295,196 163,017 496,424
29,180 25,479 49,282
24,207 180,688 67,943
NA NA NA
3,456 23,435 10,478
NA NA 73,356
319,937 169,255 537,050
19,568 16,537 23,174
NA NA NA
10,368 70,940 32,421
26,207 22,617 28,744
27,461 21,495 34,759
21,125 6,791 58,042
5,289 5,289 5,289
6,243 2,527 8,842
- ----------- ----------- -----------
1,669,292 1,699,246 2,874,796
- ----------- ----------- -----------
(267,529) (351,494) (742,993)
1,401,763 1,347,752 2,131,803
- ----------- ----------- -----------
6,335,457 8,282,905 8,426,846
- ----------- ----------- -----------
167,509 3,704,508 (6,883,118)
(293,347) (75,661) (215,187)
(1,049,977) 0 (2,057,194)
- ----------- ----------- -----------
(1,175,815) 3,628,847 (9,155,499)
- ----------- ----------- -----------
15,526,088 5,484,495 33,629,407
509,902 120,755 247,454
(105,099) 0 (151,737)
- ----------- ----------- -----------
15,930,891 5,605,250 33,725,124
- ----------- ----------- -----------
14,755,076 9,234,097 24,569,625
- ----------- ----------- -----------
$21,090,533 $17,517,002 $32,996,471
=========== =========== ===========
72 Wells Fargo Advantage Income Funds
Statements of Changes in Net Assets
GOVERNMENT SECURITIES FUND
--------------------------------
For the
Six Months
Ended
November 30, For the
2009 Year Ended
(Unaudited) May 31, 2009(1)
-------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets ..................................................... $1,923,257,266 $1,392,844,435
OPERATIONS
Net investment income .................................................... 38,878,306 67,610,918
Net realized gain (loss) on investments .................................. (838,194) 24,020,628
Net change in unrealized appreciation (depreciation) of investments ...... 53,219,997 33,780,112
-------------- --------------
Net increase (decrease) in net assets resulting from operations ............. 91,260,109 125,411,658
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income
Class A ............................................................... (3,509,936) (7,052,853)
Class B ............................................................... (73,834) (204,575)
Class C ............................................................... (380,929) (416,142)
Administrator Class ................................................... (5,580,172) (12,169,492)
Institutional Class ................................................... (7,918,788) (13,673,366)
Investor Class ........................................................ (21,276,018) (42,421,772)
Net realized gain on sales of investments
Class A ............................................................... 0 (495,008)
Class B ............................................................... 0 (18,002)
Class C ............................................................... 0 (33,924)
Administrator Class ................................................... 0 (820,613)
Institutional Class ................................................... 0 (732,088)
Investor Class ........................................................ 0 (2,756,641)
-------------- --------------
Total distributions to shareholders ......................................... (38,739,677) (80,794,476)
-------------- --------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold - Class A ...................................... 15,257,939 271,643,896
Reinvestment of distributions - Class A .................................. 3,033,083 6,632,016
Cost of shares redeemed - Class A ........................................ (23,492,400) (179,688,758)
-------------- --------------
Net increase (decrease) in net assets resulting from capital share
transactions - Class A ................................................ (5,201,378) 98,587,154
-------------- --------------
Proceeds from shares sold - Class B ...................................... 69,112 18,314,273
Reinvestment of distributions - Class B .................................. 55,317 164,098
Cost of shares redeemed - Class B ........................................ (1,603,706) (12,801,670)
-------------- --------------
Net increase (decrease) in net assets resulting from capital share
transactions - Class B ................................................ (1,479,277) 5,676,701
-------------- --------------
Proceeds from shares sold - Class C ...................................... 6,341,593 30,573,148
Reinvestment of distributions - Class C .................................. 157,149 230,006
Cost of shares redeemed - Class C ........................................ (2,857,027) (10,356,350)
-------------- --------------
Net increase in net assets resulting from capital share transactions -
Class C ............................................................... 3,641,715 20,446,804
-------------- --------------
Proceeds from shares sold - Administrator Class .......................... 49,553,423 530,208,386
Reinvestment of distributions - Administrator Class ...................... 3,254,128 7,353,839
Cost of shares redeemed - Administrator Class ............................ (48,444,364) (399,589,103)
-------------- --------------
Net increase in net assets resulting from capital share transactions -
Administrator Class ................................................... 4,363,187 137,973,122
-------------- --------------
Proceeds from shares sold - Institutional Class .......................... 141,121,949 213,151,715
Reinvestment of distributions - Institutional Class ...................... 7,605,408 13,696,833
Cost of shares redeemed - Institutional Class ............................ (55,102,998) (246,210,109)
-------------- --------------
Net increase (decrease) in net assets resulting from capital share
transactions - Institutional Class .................................... 93,624,359 (19,361,561)
-------------- --------------
Proceeds from shares sold - Investor Class ............................... 256,538,648 1,184,845,363
Reinvestment of distributions - Investor Class ........................... 15,582,526 33,190,881
Cost of shares redeemed - Investor Class ................................. (332,207,784) (975,562,815)
-------------- --------------
Net increase (decrease) in net assets resulting from capital share
transactions - Investor Class ......................................... (60,086,610) 242,473,429
-------------- --------------
Net increase (decrease) in net assets resulting from capital share
transactions - Total .................................................. 34,861,996 485,795,649
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS ....................................... 87,382,428 530,412,831
============== ==============
ENDING NET ASSETS ........................................................... $2,010,639,694 $1,923,257,266
============== ==============
Ending balance of undistributed/overdistributed net investment income ....... $ 1,032,569 $ 893,940
-------------- --------------
- ----------
(1.) Class B in the Government Securities Fund, Classes B and C in the High
Income Fund and Class C in the Ultra Short-Term Income Fund were incepted
on July 18, 2008. Information presented for these classes are for the
period from July 18, 2008 to May 31, 2009.
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 73
Statements of Changes in Net Assets
SHORT-TERM HIGH YIELD
HIGH INCOME FUND SHORT-TERM BOND FUND BOND FUND
- ---------------------------- --------------------------- ---------------------------
For the For the For the
Six Months Six Months Six Months
Ended For the Ended Ended
November 30, Year Ended November 30, For the November 30, For the
2009 May 31, 2009 Year Ended 2009 Year Ended
(Unaudited) 2009(1) (Unaudited) May 31, 2009 (Unaudited) May 31, 2009
- ------------- ------------ ------------ ------------ ------------ ------------
$477,357,849 $280,579,919 $346,126,214 $367,804,800 $250,336,778 $ 86,218,386
21,890,906 26,794,821 6,335,457 13,489,380 8,282,905 6,447,120
12,289,934 (26,763,282) (1,175,815) 1,585,853 3,628,847 (5,935,181)
31,486,711 (8,702,509) 15,930,891 (8,088,945) 5,605,250 2,361,738
- ------------ ------------ ------------ ------------ ------------ ------------
65,667,551 (8,670,970) 21,090,533 6,986,288 17,517,002 2,873,677
- ------------ ------------ ------------ ------------ ------------ ------------
(4,524,240) (4,544,762) (334,651) (490,206) (3,992,213) (2,772,531)
(279,224) (545,930) NA NA NA NA
(578,821) (474,259) (35,640) (8,281) (443,782) (88,724)
NA NA NA NA NA NA
(5,990,665) (7,880,914) (1,664,817) (3,290,827) NA NA
(10,523,307) (13,245,714) (4,367,108) (9,729,037) (3,852,532) (3,494,392)
0 0 0 0 0 0
0 0 NA NA NA NA
0 0 0 0 0 0
NA NA NA NA NA NA
0 0 0 0 NA NA
0 0 0 0 0 0
- ------------ ------------ ------------ ------------ ------------ ------------
(21,896,257) (26,691,579) (6,402,216) (13,518,351) (8,288,527) (6,355,647)
- ------------ ------------ ------------ ------------ ------------ ------------
33,494,210 166,454,163 13,508,465 10,705,583 84,070,850 142,967,474
3,093,989 2,377,737 290,145 438,555 3,456,274 2,539,648
(45,865,254) (67,569,517) (4,838,416) (6,438,527) (55,279,125) (49,718,884)
- ------------ ------------ ------------ ------------ ------------ ------------
(9,277,055) 101,262,383 8,960,194 4,705,611 32,247,999 95,788,238
- ------------ ------------ ------------ ------------ ------------ ------------
331,778 23,618,815 NA NA NA NA
195,226 360,105 NA NA NA NA
(1,131,924) (13,951,201) NA NA NA NA
- ------------ ------------ ------------ ------------ ------------ ------------
(604,920) 10,027,719 NA NA NA NA
- ------------ ------------ ------------ ------------ ------------ ------------
5,249,467 24,106,244 3,804,485 1,362,364 14,135,707 12,087,840
359,526 249,311 30,656 7,052 288,755 51,607
(1,510,886) (9,792,261) (227,364) (191,442) (1,293,743) (1,199,260)
- ------------ ------------ ------------ ------------ ------------ ------------
4,098,107 14,563,294 3,607,777 1,177,974 13,130,719 10,940,187
- ------------ ------------ ------------ ------------ ------------ ------------
NA NA NA NA NA NA
NA NA NA NA NA NA
NA NA NA NA NA NA
- ------------ ------------ ------------ ------------ ------------ ------------
NA NA NA NA NA NA
- ------------ ------------ ------------ ------------ ------------ ------------
50,860,988 63,985,953 32,462,446 21,643,058 NA NA
1,876,697 954,449 1,561,332 3,008,920 NA NA
(12,693,697) (27,175,147) (1,643,714) (32,342,460) NA NA
- ------------ ------------ ------------ ------------ ------------ ------------
40,043,988 37,765,255 32,380,064 (7,690,482) NA NA
- ------------ ------------ ------------ ------------ ------------ ------------
97,598,864 117,069,408 18,542,390 37,688,354 68,662,819 148,957,418
8,285,399 9,650,789 3,762,208 8,318,312 2,951,183 2,963,187
(50,681,955) (58,198,369) (19,513,690) (59,346,292) (52,007,046) (91,048,668)
- ------------ ------------ ------------ ------------ ------------ ------------
55,202,308 68,521,828 2,790,908 (13,339,626) 19,606,956 60,871,937
- ------------ ------------ ------------ ------------ ------------ ------------
89,462,428 232,140,479 47,738,943 (15,146,523) 64,985,674 167,600,362
- ------------ ------------ ------------ ------------ ------------ ------------
133,233,722 196,777,930 62,427,260 (21,678,586) 74,214,149 164,118,392
- ------------ ------------ ------------ ------------ ------------ ------------
$610,591,571 $477,357,849 $408,553,474 $346,126,214 $324,550,927 $250,336,778
============ ============ ============ ============ ============ ============
$ (9,273) $ (3,922) $ (74,983) $ (8,224) $ (14,004) $ (8,382)
- ------------ ------------ ------------ ------------ ------------ ------------
74 Wells Fargo Advantage Income Funds
Statements of Changes in Net Assets
GOVERNMENT SECURITIES FUND
--------------------------
For the
Six Months
Ended For the
November 30, Year Ended
2009 May 31,
(Unaudited) 2009(1)
------------ -----------
SHARES ISSUED AND REDEEMED
Shares sold - Class A ....................................................... 1,413,344 26,715,881
Shares issued in reinvestment of distributions - Class A .................... 280,069 626,901
Shares redeemed - Class A ................................................... (2,182,547) (17,221,247)
----------- -----------
Net increase (decrease) in shares outstanding - Class A ..................... (489,134) 10,121,535
----------- -----------
Shares sold - Class B ....................................................... 6,352 1,708,872
Shares issued in reinvestment of distributions - Class B .................... 5,112 15,522
Shares redeemed - Class B ................................................... (148,694) (1,229,543)
----------- -----------
Net increase (decrease) in shares outstanding - Class B ..................... (137,230) 494,851
----------- -----------
Shares sold - Class C ....................................................... 588,335 2,759,714
Shares issued in reinvestment of distributions - Class C .................... 14,504 21,721
Shares redeemed - Class C ................................................... (264,333) (994,831)
----------- -----------
Net increase in shares outstanding - Class C ................................ 338,506 1,786,604
----------- -----------
Shares sold - Administrator Class ........................................... 4,601,393 50,514,811
Shares issued in reinvestment of distributions - Administrator Class ........ 300,483 695,762
Shares redeemed - Administrator Class ....................................... (4,499,450) (38,176,012)
----------- -----------
Net increase in shares outstanding - Administrator Class .................... 402,426 13,034,561
----------- -----------
Shares sold - Institutional Class ........................................... 13,114,662 20,164,472
Shares issued in reinvestment of distributions - Institutional Class ........ 702,165 1,298,001
Shares redeemed - Institutional Class ....................................... (5,129,969) (23,384,502)
----------- -----------
Net increase (decrease) in shares outstanding - Institutional Class ......... 8,686,858 (1,922,029)
----------- -----------
Shares sold - Investor Class ................................................ 23,791,587 111,839,906
Shares issued in reinvestment of distributions - Investor Class ............. 1,437,738 3,138,084
Shares redeemed - Investor Class ............................................ (30,848,154) (92,160,770)
----------- -----------
Net increase (decrease) in shares outstanding - Investor Class .............. (5,618,829) 22,817,220
----------- -----------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE
TRANSACTIONS ................................................................ 3,182,597 46,332,742
=========== ===========
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 75
Statements of Changes in Net Assets
SHORT-TERM HIGH YIELD
HIGH INCOME FUND SHORT-TERM BOND FUND BOND FUND
- ------------------------ ------------------------ -------------------------
For the For the For the
Six Months Six Months Six Months
Ended For the Ended For the Ended For the
November Year Ended November Year Ended November Year Ended
30, 2009 May 31, 30, 2009 May 31, 30, 2009 May 31,
(Unaudited) 2009(1) (Unaudited) 2009 (Unaudited) 2009
- ----------- ---------- ----------- ---------- ----------- -----------
5,077,533 24,770,364 1,597,298 1,314,290 10,563,129 18,109,719
461,531 388,338 34,365 53,686 430,780 327,233
(6,780,967) (9,955,121) (574,635) (789,161) (6,880,444) (6,218,789)
- ---------- ---------- ---------- ---------- ---------- -----------
(1,241,903) 15,203,581 1,057,028 578,815 4,113,465 12,218,163
- ---------- ---------- ---------- ---------- ---------- -----------
51,197 3,244,804 NA NA NA NA
29,170 59,185 NA NA NA NA
(170,856) (2,058,101) NA NA NA NA
- ---------- ---------- ---------- ---------- ---------- -----------
(90,489) 1,245,888 NA NA NA NA
- ---------- ---------- ---------- ---------- ---------- -----------
794,937 3,522,749 451,280 167,166 1,772,626 1,565,350
53,480 40,877 3,623 866 35,925 6,641
(225,107) (1,443,530) (26,809) (23,425) (161,246) (156,023)
- ---------- ---------- ---------- ---------- ---------- -----------
623,310 2,120,096 428,094 144,607 1,647,305 1,415,968
- ---------- ---------- ---------- ---------- ---------- -----------
NA NA NA NA NA NA
NA NA NA NA NA NA
NA NA NA NA NA NA
- ---------- ---------- ---------- ---------- ---------- -----------
NA NA NA NA NA NA
- ---------- ---------- ---------- ---------- ---------- -----------
7,579,532 10,469,929 3,818,695 2,657,771 NA NA
277,450 156,414 184,676 367,852 NA NA
(1,881,518) (4,371,782) (195,715) (3,955,858) NA NA
- ---------- ---------- ---------- ---------- ---------- -----------
5,975,464 6,254,561 3,807,656 (930,235) NA NA
- ---------- ---------- ---------- ---------- ---------- -----------
14,723,317 19,384,024 2,200,659 4,612,934 8,628,622 18,959,752
1,230,337 1,552,374 446,194 1,018,265 368,079 380,908
(7,609,776) (9,356,944) (2,321,862) (7,266,219) (6,536,899) (11,350,048)
- ---------- ---------- ---------- ---------- ---------- -----------
8,343,878 11,579,454 324,991 (1,635,020) 2,459,802 7,990,612
- ---------- ---------- ---------- ---------- ---------- -----------
13,610,260 36,403,580 5,617,769 (1,841,833) 8,220,572 21,624,743
========== ========== ========== ========== ========== ===========
76 Wells Fargo Advantage Income Funds
Statements of Changes in Net Assets
ULTRA SHORT-TERM INCOME FUND
-----------------------------------
For the
Six Months Ended For the
November 30, 2009 Year Ended
(Unaudited) May 31, 2009(1)
----------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
Beginning net assets ................................................. $558,841,509 $ 727,013,645
OPERATIONS
Net investment income ................................................ 8,426,846 23,203,877
Net realized loss on investments ..................................... (9,155,499) (10,932,559)
Net change in unrealized appreciation (depreciation) of investments .. 33,725,124 (44,149,585)
------------ -------------
Net increase (decrease) in net assets resulting from operations ......... 32,996,471 (31,878,267)
------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income
Class A ........................................................... (790,361) (1,693,421)
Class C ........................................................... (87,042) (61,444)
Administrator Class ............................................... (1,016,462) (1,789,434)
Institutional Class ............................................... (581,335) (1,561,426)
Investor Class .................................................... (6,033,591) (18,427,626)
------------ -------------
Total distributions to shareholders ..................................... (8,508,791) (23,533,351)
------------ -------------
CAPITAL SHARES TRANSACTIONS
Proceeds from shares sold - Class A .................................. 61,258,649 47,399,009
Reinvestment of distributions - Class A .............................. 715,473 1,636,344
Cost of shares redeemed - Class A .................................... (18,059,050) (42,622,372)
------------ -------------
Net increase in net assets resulting from capital share transactions -
Class A ........................................................... 43,915,072 6,412,981
------------ -------------
Proceeds from shares sold - Class C .................................. 8,008,752 5,677,642
Reinvestment of distributions - Class C .............................. 71,515 49,829
Cost of shares redeemed - Class C .................................... (539,884) (600,681)
------------ -------------
Net increase in net assets resulting from capital share transactions -
Class C ........................................................... 7,540,383 5,126,790
------------ -------------
Proceeds from shares sold - Administrator Class ...................... 40,552,846 76,793,455
Reinvestment of distributions - Administrator Class .................. 883,423 1,590,459
Cost of shares redeemed - Administrator Class ........................ (23,748,317) (44,016,583)
------------ -------------
Net increase in net assets resulting from capital share transactions -
Administrator Class ............................................... 17,687,952 34,367,331
------------ -------------
Proceeds from shares sold - Institutional Class ...................... 39,543,473 10,522,344
Reinvestment of distributions - Institutional Class .................. 558,297 1,472,482
Cost of shares redeemed - Institutional Class ........................ (8,692,953) (42,851,823)
------------ -------------
Net increase (decrease) in net assets resulting from capital share
transactions - Institutional Class ................................ 31,408,817 (30,856,997)
------------ -------------
Proceeds from shares sold - Investor Class ........................... 48,225,431 102,792,749
Reinvestment of distributions - Investor Class ....................... 5,526,236 16,877,970
Cost of shares redeemed - Investor Class ............................. (54,948,987) (247,481,342)
------------ -------------
Net decrease in net assets resulting from capital share transactions -
Investor Class .................................................... (1,197,320) (127,810,623)
------------ -------------
Net increase (decrease) in net assets resulting from capital share
transactions - Total ................................................. 99,354,904 (112,760,518)
------------ -------------
NET INCREASE (DECREASE) IN NET ASSETS ................................... 123,842,584 (168,172,136)
============ =============
ENDING NET ASSETS ....................................................... $682,684,093 $ 558,841,509
============ =============
Ending balance of undistributed/overdistributed net investment income
(loss) ............................................................... $ (76,487) $ 5,458
------------ -------------
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 77
Statements of Changes in Net Assets
ULTRA SHORT-TERM INCOME FUND
------------------------------------
For the
Six Months Ended For the
November 30, 2009 Year Ended
(Unaudited) May 31, 2009(1)
----------------- ---------------
SHARES ISSUED AND REDEEMED
Shares sold - Class A ................................................ 7,393,792 5,506,043
Shares issued in reinvestment of distributions - Class A ............. 86,664 199,167
Shares redeemed - Class A ............................................ (2,189,211) (5,099,082)
---------- -----------
Net increase in shares outstanding - Class A ......................... 5,291,245 606,128
---------- -----------
Shares sold - Class C ................................................ 973,523 662,447
Shares issued in reinvestment of distributions - Class C ............. 8,640 6,125
Shares redeemed - Class C ............................................ (65,396) (73,946)
---------- -----------
Net increase in shares outstanding - Class C ......................... 916,767 594,626
---------- -----------
Shares sold - Administrator Class .................................... 4,941,723 9,308,480
Shares issued in reinvestment of distributions - Administrator
Class ............................................................. 107,499 195,355
Shares redeemed - Administrator Class ................................ (2,899,042) (5,363,935)
---------- -----------
Net increase in shares outstanding - Administrator Class ............. 2,150,180 4,139,900
---------- -----------
Shares sold - Institutional Class .................................... 4,758,269 1,270,796
Shares issued in reinvestment of distributions - Institutional
Class ............................................................. 67,544 177,850
Shares redeemed - Institutional Class ................................ (1,053,840) (5,109,471)
---------- -----------
Net increase (decrease) in shares outstanding - Institutional Class .. 3,771,973 (3,660,825)
---------- -----------
Shares sold - Investor Class ......................................... 5,862,440 12,299,468
Shares issued in reinvestment of distributions - Investor Class ...... 669,951 2,048,111
Shares redeemed - Investor Class ..................................... (6,687,022) (29,897,417)
---------- -----------
Net decrease in shares outstanding - Investor Class .................. (154,631) (15,549,838)
---------- -----------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL
SHARE TRANSACTIONS ................................................... 11,975,534 (13,870,009)
========== ===========
The accompanying notes are an integral part of these financial statements.
78 Wells Fargo Advantage Income Funds
Financial Highlights
Beginning Net Realized Distributions
Net Asset Net and Unrealized from Net
Value Per Investment Gain (Loss) Investment
Share Income on Investments Income
--------- ---------- -------------- -------------
GOVERNMENT SECURITIES FUND
Class A
June 1, 2009 to November 30,2009 (Unaudited) .... $10.71 0.21 0.29 (0.21)
June 1, 2008 to May 31, 2009(7) ................. $10.45 0.39(3) 0.34 (0.44)
June 1, 2007 to May 31, 2008 .................... $10.22 0.48 0.25 (0.50)
June 1, 2006 to May 31, 2007 .................... $10.15 0.48 0.09 (0.50)
June 1, 2005 to May 31, 2006 .................... $10.77 0.43 (0.51) (0.48)
November 1, 2004 to May 31, 2005(4) ............. $10.93 0.20 0.00(6) (0.24)
November 1, 2003 to October 31, 2004 ............ $11.05 0.25 0.21 (0.35)
Class B
June 1, 2009 to November 30,2009 (Unaudited) .... $10.70 0.17 0.30 (0.17)
July 18, 20085 to May 31, 2009 .................. $10.32 0.27(3) 0.45 (0.31)
Class C
June 1, 2009 to November 30,2009 (Unaudited) .... $10.70 0.17 0.30 (0.17)
June 1, 2008 to May 31, 2009 .................... $10.45 0.30(8) 0.35 (0.37)
June 1, 2007 to May 31, 2008 .................... $10.22 0.39 0.25 (0.41)
June 1, 2006 to May 31, 2007 .................... $10.15 0.40 0.09 (0.42)
June 1, 2005 to May 31, 2006 .................... $10.77 0.35 (0.50) (0.41)
November 1, 2004 to May 31, 2005(4) ............. $10.92 0.12 0.01 (0.16)
November 1, 2003 to October 31, 2004 ............ $11.05 0.15 0.20 (0.25)
Administrator Class
June 1, 2009 to November 30,2009 (Unaudited) .... $10.70 0.22 0.30 (0.22)
June 1, 2008 to May 31, 2009 .................... $10.45 0.41(3) 0.34 (0.47)
June 1, 2007 to May 31, 2008 .................... $10.22 0.49 0.26 (0.52)
June 1, 2006 to May 31, 2007 .................... $10.15 0.50 0.09 (0.52)
June 1, 2005 to May 31, 2006 .................... $10.77 0.48 (0.53) (0.51)
April 11, 2005(5) to May 31, 2005(4) ............ $10.61 0.05 0.17 (0.06)
Institutional Class
June 1, 2009 to November 30,2009 (Unaudited) .... $10.70 0.24 0.28 (0.23)
June 1, 2008 to May 31, 2009 .................... $10.44 0.44(3) 0.34 (0.49)
June 1, 2007 to May 31, 2008 .................... $10.21 0.52 0.25 (0.54)
June 1, 2006 to May 31, 2007 .................... $10.14 0.54 0.08 (0.55)
June 1, 2005 to May 31, 2006 .................... $10.77 0.49 (0.53) (0.53)
November 1, 2004 to May 31, 2005(4) ............. $10.93 0.23 0.00(6) (0.27)
November 1, 2003 to October 31, 2004 ............ $11.05 0.32 0.21 (0.42)
Investor Class
June 1, 2009 to November 30,2009 (Unaudited) .... $10.71 0.21 0.29 (0.21)
June 1, 2008 to May 31, 2009 .................... $10.46 0.39(3) 0.33 (0.44)
June 1, 2007 to May 31, 2008 .................... $10.22 0.47 0.26 (0.49)
June 1, 2006 to May 31, 2007 .................... $10.16 0.47 0.09 (0.50)
June 1, 2005 to May 31, 2006 .................... $10.77 0.42 (0.49) (0.48)
November 1, 2004 to May 31, 2005(4) ............. $10.93 0.20 0.00(6) (0.24)
November 1, 2003 to October 31, 2004 ............ $11.05 0.26 0.21 (0.36)
- ----------
(1.) Total return calculations do not include any sales charges, and would have
been lower had certain expenses not been waived or reimbursed during the
periods shown. Returns for periods of less than one year are not
annualized.
(2.) Calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued.
(3.) Calculated based upon average shares outstanding.
(4.) In 2005, the Fund changed its fiscal year-end from October 31 to May 31.
(5.) Commencement of class operations.
(6.) Amount calculated is less than $0.005.
(7.) On June 20, 2008, Advisor Class was renamed to Class A.
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 79
Financial Highlights
Ending Ratio to Average Net Assets (Annualized)
Distributions Net Asset ------------------------------------------------ Portfolio Net Assets at
from Net Value Per Net Investment Gross Net Total Turnover End of Period
Realized Gains Share Income Expenses Expenses Return(1) Rate(2) (000's omitted)
- -------------- --------- -------------- -------- -------- --------- --------- ---------------
0.00 $11.00 3.94% 0.90% 0.90% 4.74% 145% $ 180,914
(0.03) $10.71 3.65% 0.90% 0.90% 7.17% 368% $ 181,342
0.00 $10.45 4.54% 1.03% 0.90% 7.21% 263% $ 71,233
0.00 $10.22 4.64% 1.06% 0.92% 5.71% 159% $ 59,760
(0.06) $10.15 4.14% 1.05% 0.95% (0.74)% 207% $ 60,242
(0.12) $10.77 3.33% 1.16% 1.07% 1.85% 139% $ 69,267
(0.23) $10.93 2.57% 1.18% 1.12% 4.27% 390% $ 76,283
0.00 $11.00 3.21% 1.65% 1.65% 4.45% 145% $ 3,933
(0.03) $10.70 2.94% 1.65% 1.65% 7.00% 368% $ 5,297
0.00 $11.00 3.18% 1.65% 1.65% 4.44% 145% $ 26,101
(0.03) $10.70 2.78% 1.63% 1.63% 6.28% 368% $ 21,783
0.00 $10.45 3.69% 1.77% 1.70% 6.36% 263% $ 2,595
0.00 $10.22 3.87% 1.81% 1.70% 4.89% 159% $ 1,335
(0.06) $10.15 3.39% 1.80% 1.70% (1.48)% 207% $ 1,370
(0.12) $10.77 2.14% 2.30% 2.26% 1.24% 139% $ 2,257
(0.23) $10.92 1.65% 2.10% 2.06% 3.20% 390% $ 2,979
0.00 $11.00 4.14% 0.82% 0.70% 4.94% 145% $ 278,280
(0.03) $10.70 3.86% 0.81% 0.70% 7.28% 368% $ 266,579
0.00 $10.45 4.72% 0.85% 0.70% 7.42% 263% $ 123,993
0.00 $10.22 4.87% 0.88% 0.70% 5.94% 159% $ 117,347
(0.06) $10.15 4.50% 0.88% 0.70% (0.49)% 207% $ 102,434
0.00 $10.77 3.54% 0.83% 0.67% 2.12% 139% $ 60
0.00 $10.99 4.36% 0.55% 0.48% 4.96% 145% $ 417,489
(0.03) $10.70 4.14% 0.56% 0.48% 7.62% 368% $ 313,486
0.00 $10.44 4.96% 0.59% 0.48% 7.66% 263% $ 326,015
0.00 $10.21 5.08% 0.61% 0.48% 6.17% 159% $ 236,424
(0.06) $10.14 4.60% 0.60% 0.48% (0.37)% 207% $ 85,056
(0.12) $10.77 3.87% 0.58% 0.53% 2.17% 139% $ 90,647
(0.23) $10.93 3.19% 0.53% 0.50% 4.92% 390% $ 84,366
0.00 $11.00 3.89% 0.95% 0.95% 4.81% 145% $1,103,922
(0.03) $10.71 3.65% 0.94% 0.94% 7.02% 368% $1,134,770
0.00 $10.46 4.48% 1.16% 0.95% 7.26% 263% $ 869,009
0.00 $10.22 4.59% 1.23% 0.97% 5.55% 159% $ 733,191
(0.06) $10.16 4.06% 1.22% 1.02% (0.71)% 207% $ 836,567
(0.12) $10.77 3.37% 1.08% 1.02% 1.87% 139% $1,162,518
(0.23) $10.93 2.66% 1.06% 1.03% 4.38% 390% $1,230,428
80 Wells Fargo Advantage Income Funds
Financial Highlights
Beginning Net Realized Distributions
Net Asset Net and Unrealized from Net
Value Per Investment Gain (Loss) Investment
Share Income on Investments Income
--------- ---------- -------------- -------------
HIGH INCOME FUND
Class A
June 1, 2009 to November 30,2009 (Unaudited) ... $6.35 0.25 0.53 (0.26)
June 1, 2008 to May 31, 2009(7) ................ $7.25 0.50 (0.90) (0.50)
June 1, 2007 to May 31, 2008 ................... $7.89 0.53 (0.64) (0.53)
June 1, 2006 to May 31, 2007 ................... $7.63 0.55 0.26 (0.55)
June 1, 2005 to May 31, 2006 ................... $7.63 0.53 0.02 (0.55)
November 1, 2004 to May 31, 2005(4) ............ $7.84 0.30 (0.21) (0.30)
November 1, 2003 to October 31, 2004 ........... $7.49 0.53 0.35 (0.53)
Class B
June 1, 2009 to November 30,2009 (Unaudited) ... $6.35 0.23 0.52 (0.23)
July 18, 2008(5) to May 31, 2009 ............... $6.99 0.39 (0.64) (0.39)
Class C
June 1, 2009 to November 30,2009 (Unaudited) ... $6.35 0.23 0.52 (0.23)
July 18, 2008(5) to May 31, 2009 ............... $6.99 0.39 (0.64) (0.39)
Institutional Class
June 1, 2009 to November 30,2009 (Unaudited) ... $6.40 0.27 0.53 (0.27)
June 1, 2008 to May 31, 2009 ................... $7.31 0.53 (0.91) (0.53)
June 1, 2007 to May 31, 2008 ................... $7.96 0.56 (0.65) (0.56)
June 1, 2006 to May 31, 2007 ................... $7.70 0.59 0.26 (0.59)
June 1, 2005 to May 31, 2006 ................... $7.69 0.45 0.13 (0.58)
November 1, 2004 to May 31, 2005(4) ............ $7.88 0.33 (0.19) (0.33)
November 1, 2003 to October 31, 2004 ........... $7.53 0.58 0.35 (0.58)
Investor Class
June 1, 2009 to November 30,2009 (Unaudited) ... $6.37 0.25 0.53 (0.26)
June 1, 2008 to May 31, 2009 ................... $7.28 0.50 (0.91) (0.50)
June 1, 2007 to May 31, 2008 ................... $7.92 0.53 (0.64) (0.53)
June 1, 2006 to May 31, 2007 ................... $7.66 0.55 0.26 (0.55)
June 1, 2005 to May 31, 2006 ................... $7.66 0.41 0.14 (0.55)
November 1, 2004 to May 31, 2005(4) ............ $7.86 0.31 (0.20) (0.31)
November 1, 2003 to October 31, 2004 ........... $7.51 0.54 0.35 (0.54)
SHORT-TERM BOND FUND
Class A
June 1, 2009 to November 30, 2009 (Unaudited) .. $8.23 0.15 0.34 (0.15)
June 1, 2008 to May 31, 2009(7) ................ $8.38 0.32 (0.15) (0.32)
June 1, 2007 to May 31, 2008 ................... $8.49 0.40 (0.11) (0.40)
June 1, 2006 to May 31, 2007 ................... $8.47 0.40 0.03 (0.41)
June 1, 2005 to May 31, 2006 ................... $8.62 0.35 (0.13) (0.37)
November 1, 2004 to May 31, 2005(4) ............ $8.77 0.18 (0.14) (0.19)
November 1, 2003 to October 31, 2004 ........... $8.81 0.26 (0.01) (0.29)
Class C
June 1, 2009 to November 30, 2009 (Unaudited) .. $8.22 0.11 0.34 (0.11)
June 1, 2008 to May 31, 2009 ................... $8.37 0.26 (0.15) (0.26)
March 31, 2008(5) to May 31, 2008 .............. $8.45 0.05 (0.08) (0.05)
Institutional Class
June 1, 2009 to November 30, 2009 (Unaudited) .. $8.24 0.16 0.34 (0.16)
June 1, 2008 to May 31, 2009 ................... $8.39 0.35 (0.15) (0.35)
June 1, 2007 to May 31, 2008 ................... $8.49 0.43 (0.10) (0.43)
June 1, 2006 to May 31, 2007 ................... $8.48 0.44 0.01 (0.44)
June 1, 2005 to May 31, 2006 ................... $8.63 0.39 (0.14) (0.40)
November 1, 2004 to May 31, 2005(4) ............ $8.78 0.20 (0.14) (0.21)
November 1, 2003 to October 31, 2004 ........... $8.82 0.31 (0.01) (0.34)
Investor Class
June 1, 2009 to November 30, 2009 (Unaudited) .. $8.23 0.14 0.34 (0.14)
June 1, 2008 to May 31, 2009 ................... $8.38 0.32 (0.15) (0.32)
June 1, 2007 to May 31, 2008 ................... $8.48 0.40 (0.10) (0.40)
June 1, 2006 to May 31, 2007 ................... $8.47 0.40 0.02 (0.41)
June 1, 2005 to May 31, 2006 ................... $8.62 0.35 (0.13) (0.37)
November 1, 2004 to May 31, 2005(4) ............ $8.77 0.19 (0.14) (0.20)
November 1, 2003 to October 31, 2004 ........... $8.81 0.27 (0.01) (0.30)
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 81
Financial Highlights
Ending Ratio to Average Net Assets (Annualized)
Net Asset ---------------------------------------- Portfolio Net Assets at
Value Per Net Investment Gross Net Total Turnover End of Period
Share Income Expenses Expenses Return(1) Rate(2) (000's omitted)
- --------- -------------- -------- -------- --------- --------- --------------
$6.87 7.64% 1.04% 0.90% 12.39% 25% $105,787
$6.35 8.13% 1.05% 0.89% (5.07)% 52% $105,678
$7.25 7.04% 1.19% 0.86% (1.40)% 53% $ 10,471
$7.89 7.07% 1.16% 0.86% 10.96% 82% $115,254
$7.63 6.39% 1.17% 0.87% 7.34% 98% $113,433
$7.63 6.59% 1.20% 1.06% 1.16% 52% $ 17,681
$7.84 6.90% 1.20% 1.13% 12.11% 133% $ 22,315
$6.87 6.93% 1.78% 1.65% 11.97% 25% $ 7,932
$6.35 7.35% 1.79% 1.65% (3.11)% 52% $ 7,908
$6.87 6.87% 1.78% 1.65% 11.97% 25% $ 18,838
$6.35 7.29% 1.79% 1.65% (3.12)% 52% $ 13,460
$6.93 8.05% 0.69% 0.50% 12.71% 25% $170,245
$6.40 8.42% 0.70% 0.50% (4.75)% 52% $119,004
$7.31 8.15% 0.80% 0.48% (1.06)% 53% $ 90,200
$7.96 7.53% 0.75% 0.43% 11.39% 82% $ 242
$7.70 5.83% 0.77% 0.43% 7.96% 98% $ 3,208
$7.69 7.20% 0.51% 0.42% 1.77% 52% $ 3,108
$7.88 7.58% 0.47% 0.44% 12.85% 133% $ 24,436
$6.89 7.59% 1.08% 0.95% 12.33% 25% $307,789
$6.37 7.95% 1.10% 0.92% (5.20)% 52% $231,308
$7.28 7.08% 1.33% 0.86% (1.35)% 53% $179,909
$7.92 7.07% 1.33% 0.86% 10.95% 82% $230,287
$7.66 5.41% 1.34% 0.86% 7.36% 98% $208,482
$7.66 6.71% 1.08% 0.95% 1.35% 52% $246,538
$7.86 7.06% 1.00% 0.96% 12.26% 133% $300,358
$8.57 3.38% 0.95% 0.80% 5.94% 30% $ 26,192
$8.23 3.86% 0.95% 0.80% 2.14% 50% $ 16,456
$8.38 4.69% 1.09% 0.81% 3.50% 47% $ 11,904
$8.49 4.77% 1.10% 0.85% 5.18% 38% $ 6,938
$8.47 4.14% 1.09% 0.85% 2.60% 28% $ 6,035
$8.62 3.53% 1.18% 1.04% 0.45% 14% $ 8,142
$8.77 2.96% 1.19% 1.12% 2.87% 37% $ 10,240
$8.56 2.52% 1.69% 1.55% 5.53% 30% $ 4,914
$8.22 2.72% 1.67% 1.53% 1.35% 50% $ 1,199
$8.37 3.56% 1.85% 1.58% (0.37)% 47% $ 10
$8.58 3.74% 0.60% 0.48% 6.10% 30% $113,768
$8.24 4.22% 0.59% 0.48% 2.47% 50% $ 77,900
$8.39 5.08% 0.64% 0.48% 3.97% 47% $ 87,101
$8.49 5.14% 0.65% 0.48% 5.45% 38% $ 80,153
$8.48 4.54% 0.64% 0.48% 2.98% 28% $ 66,350
$8.63 4.07% 0.60% 0.53% 0.76% 14% $ 51,426
$8.78 3.56% 0.54% 0.51% 3.50% 37% $ 49,940
$8.57 3.37% 1.00% 0.85% 5.91% 30% $263,680
$8.23 3.87% 0.99% 0.85% 2.09% 50% $250,572
$8.38 4.70% 1.23% 0.87% 3.57% 47% $268,790
$8.48 4.71% 1.27% 0.90% 5.01% 38% $299,346
$8.47 4.10% 1.26% 0.90% 2.55% 28% $396,633
$8.62 3.70% 1.01% 0.89% 0.53% 14% $505,613
$8.77 3.11% 0.99% 0.96% 3.05% 37% $516,105
82 Wells Fargo Advantage Income Funds
Financial Highlights
Beginning Net Realized Distributions
Net Asset Net and Unrealized from Net
Value Per Investment Gain (Loss) Investment
Share Income on Investments Income
--------- ---------- -------------- -------------
SHORT-TERM HIGH YIELD BOND FUND
Class A
June 1, 2009 to November 30, 2009 (Unaudited) .. $7.82 0.22 0.25 (0.22)
June 1, 2008 to May 31, 2009(7) ................ $8.31 0.40 (0.49) (0.40)
June 1, 2007 to May 31, 2008 ................... $8.54 0.47 (0.23) (0.47)
June 1, 2006 to May 31, 2007 ................... $8.49 0.49 0.05 (0.49)
June 1, 2005 to May 31, 2006 ................... $8.51 0.43 (0.02) (0.43)
November 1, 2004 to May 31, 2005(4) ............ $8.69 0.22 (0.18) (0.22)
November 1, 2003 to October 31, 2004 ........... $8.66 0.39 0.03 (0.39)
Class C
June 1, 2009 to November 30, 2009 (Unaudited) .. $7.82 0.19 0.25 (0.19)
June 1, 2008 to May 31, 2009 ................... $8.31 0.34 (0.49) (0.34)
March 31, 2008(5) to May 31, 2008 .............. $8.22 0.06 0.09 (0.06)
Investor Class
June 1, 2009 to November 30, 2009 (Unaudited) .. $7.82 0.22 0.25 (0.22)
June 1, 2008 to May 31, 2009 ................... $8.31 0.40 (0.49) (0.40)
June 1, 2007 to May 31, 2008 ................... $8.54 0.47 (0.23) (0.47)
June 1, 2006 to May 31, 2007 ................... $8.49 0.49 0.05 (0.49)
June 1, 2005 to May 31, 2006 ................... $8.52 0.44 (0.03) (0.44)
November 1, 2004 to May 31, 2005(4) ............ $8.69 0.22 (0.17) (0.22)
November 1, 2003 to October 31, 2004 ........... $8.66 0.40 0.03 (0.40)
ULTRA SHORT-TERM INCOME FUND
Class A
June 1, 2009 to November 30,2009 (Unaudited) ... $8.03 0.12 0.34 (0.12)
June 1, 2008 to May 31, 2009(7) ................ $8.71 0.31 (0.68) (0.31)
June 1, 2007 to May 31, 2008 ................... $9.09 0.43 (0.37) (0.44)
June 1, 2006 to May 31, 2007 ................... $9.12 0.47 (0.02) (0.48)
June 1, 2005 to May 31, 2006 ................... $9.17 0.39 (0.02) (0.42)
November 1, 2004 to May 31, 2005(4) ............ $9.21 0.16 (0.02) (0.18)
November 1, 2003 to October 31, 2004 ........... $9.33 0.20 (0.07) (0.25)
Class C
June 1, 2009 to November 30,2009 (Unaudited) ... $8.03 0.09 0.34 (0.09)
July 18, 2008(5) to May 31, 2009 ............... $8.57 0.21 (0.54) (0.21)
Administrator Class
June 1, 2009 to November 30,2009 (Unaudited) ... $8.00 0.12 0.34 (0.12)
June 1, 2008 to May 31, 2009 ................... $8.68 0.32 (0.68) (0.32)
June 1, 2007 to May 31, 2008 ................... $9.06 0.46 (0.38) (0.46)
June 1, 2006 to May 31, 2007 ................... $9.09 0.49 (0.02) (0.50)
June 1, 2005 to May 31, 2006 ................... $9.16 0.41 (0.05) (0.43)
April 11, 2005(5) to May 31, 2005(4) ........... $9.16 0.05 0.00(6) (0.05)
Institutional Class
June 1, 2009 to November 30,2009 (Unaudited) ... $8.03 0.13 0.34 (0.13)
June 1, 2008 to May 31, 2009 ................... $8.71 0.33 (0.67) (0.34)
June 1, 2007 to May 31, 2008 ................... $9.09 0.47 (0.37) (0.48)
June 1, 2006 to May 31, 2007 ................... $9.12 0.51 (0.02) (0.52)
June 1, 2005 to May 31, 2006 ................... $9.17 0.43 (0.02) (0.46)
November 1, 2004 to May 31, 2005(4) ............ $9.21 0.19 (0.02) (0.21)
November 1, 2003 to October 31, 2004 ........... $9.33 0.24 (0.04) (0.32)
Investor Class
June 1, 2009 to November 30,2009 (Unaudited) ... $8.03 0.12 0.34 (0.12)
June 1, 2008 to May 31, 2009 ................... $8.71 0.31 (0.68) (0.31)
June 1, 2007 to May 31, 2008 ................... $9.09 0.43 (0.37) (0.44)
June 1, 2006 to May 31, 2007 ................... $9.12 0.47 (0.02) (0.48)
June 1, 2005 to May 31, 2006 ................... $9.17 0.38 (0.02) (0.41)
November 1, 2004 to May 31, 2005(4) ............ $9.22 0.17 (0.03) (0.19)
November 1, 2003 to October 31, 2004 ........... $9.34 0.22 (0.06) (0.28)
The accompanying notes are an integral part of these financial statements.
Wells Fargo Advantage Income Funds 83
Financial Highlights
Ending Ratio to Average Net Assets (Annualized)
Net Asset --------------------------------------- Portfolio Net Assets at
Value Per Net Investment Gross Net Total Turnover End of Period
Share Income Expenses Expenses Return(1) Rate(2) (000's omitted)
- --------- -------------- -------- -------- --------- --------- ---------------
$ 8.07 5.47% 1.04% 0.81% 6.07% 24% $ 147,118
$ 7.82 5.27% 1.08% 0.81% (0.89)% 46% $ 110,451
$ 8.31 5.70% 1.20% 0.86% 2.98% 59% $ 15,781
$ 8.54 5.70% 1.22% 0.86% 6.48% 50% $ 22,076
$ 8.49 5.05% 1.20% 0.95% 4.94% 60% $ 30,637
$ 8.51 4.32% 1.23% 1.09% 0.47% 31% $ 40,297
$ 8.69 4.54% 1.20% 1.12% 4.96% 71% $ 55,553
$ 8.07 4.69% 1.79% 1.56% 5.66% 24% $ 24,738
$ 7.82 4.50% 1.76% 1.56% (1.70)% 46% $ 11,096
$ 8.31 4.37% 1.97% 1.56% 2.48% 59% $ 18
$ 8.07 5.43% 1.08% 0.86% 6.04% 24% $ 152,695
$ 7.82 5.20% 1.13% 0.84% (0.91)% 46% $ 128,789
$ 8.31 5.69% 1.34% 0.86% 2.98% 59% $ 70,420
$ 8.54 5.70% 1.39% 0.86% 6.48% 50% $ 96,071
$ 8.49 5.15% 1.37% 0.86% 4.90% 60% $ 100,379
$ 8.52 4.41% 1.15% 1.01% 0.63% 31% $ 127,171
$ 8.69 4.68% 1.03% 0.99% 5.08% 71% $ 164,928
$ 8.37 2.74% 0.93% 0.70% 5.72% 25% $ 90,325
$ 8.03 3.70% 0.93% 0.70% (4.27)% 32% $ 44,163
$ 8.71 4.89% 1.08% 0.73% 0.68% 48% $ 42,615
$ 9.09 5.13% 1.06% 0.80% 5.06% 28% $ 44,858
$ 9.12 4.23% 1.06% 0.80% 4.06% 26% $ 50,913
$ 9.17 2.98% 1.15% 1.03% 1.55% 17% $ 59,097
$ 9.21 2.25% 1.17% 1.12% 1.45% 26% $ 87,760
$ 8.37 1.98% 1.68% 1.45% 5.32% 25% $ 12,651
$ 8.03 2.77% 1.64% 1.45% (3.85)% 32% $ 4,775
$ 8.34 2.95% 0.83% 0.55% 5.82% 25% $ 79,617
$ 8.00 3.77% 0.81% 0.55% (4.15)% 32% $ 59,184
$ 8.68 5.03% 0.90% 0.57% 0.84% 48% $ 28,254
$ 9.06 5.36% 0.88% 0.60% 5.27% 28% $ 17,003
$ 9.09 4.51% 0.88% 0.60% 4.03% 26% $ 6,114
$ 9.16 3.35% 0.83% 0.59% 0.53% 17% $ 161
$ 8.37 3.16% 0.60% 0.35% 5.91% 25% $ 60,429
$ 8.03 4.09% 0.59% 0.35% (3.93)% 32% $ 27,680
$ 8.71 5.24% 0.63% 0.35% 1.07% 48% $ 61,898
$ 9.09 5.57% 0.61% 0.35% 5.54% 28% $ 42,757
$ 9.12 4.65% 0.61% 0.35% 4.53% 26% $ 48,259
$ 9.17 3.60% 0.51% 0.42% 1.90% 17% $ 56,560
$ 9.21 2.99% 0.41% 0.38% 2.19% 26% $ 59,624
$ 8.37 2.77% 0.99% 0.75% 5.70% 25% $ 439,663
$ 8.03 3.69% 0.99% 0.75% (4.32)% 32% $ 423,039
$ 8.71 4.86% 1.21% 0.78% 0.64% 48% $ 594,246
$ 9.09 5.10% 1.23% 0.84% 5.02% 28% $ 718,019
$ 9.12 4.17% 1.23% 0.84% 4.02% 26% $ 810,961
$ 9.17 3.14% 0.99% 0.87% 1.51% 17% $1,006,961
$ 9.22 2.49% 0.89% 0.86% 1.71% 26% $1,277,777
84 Wells Fargo Advantage Income Funds
Notes to Financial Statements
1. ORGANIZATION
Wells Fargo Funds Trust (the "Trust") is an open-end investment management
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). These financial statements report on the following funds: Wells
Fargo Advantage Government Securities Fund ("Government Securities Fund"), Wells
Fargo Advantage High Income Fund ("High Income Fund"), Wells Fargo Advantage
Short-Term Bond Fund ("Short-Term Bond Fund"), Wells Fargo Advantage Short-Term
High Yield Bond Fund ("Short-Term High Yield Bond Fund"), and Wells Fargo
Advantage Ultra Short-Term Income Fund ("Ultra Short-Term Income Fund" ) (each,
a "Fund", collectively, the "Funds"). Each Fund is a diversified series of the
Trust, a Delaware statutory trust organized on November 8, 1999.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed
in the preparation of the financial statements of each Fund, are in conformity
with U.S. Generally Accepted Accounting Principles ("GAAP") which 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. Management has considered the circumstances under which the Funds
should recognize or make disclosures regarding events or transactions occurring
subsequent to the balance sheet date through January 29, 2010 which represents
the date the financial statements are issued. Adjustments or additional
disclosures, if any, have been included in these financial statements.
SECURITIES VALUATION
Certain fixed income securities with maturities exceeding 60 days are valued by
using a pricing service approved by the Trust's Board of Trustees. This 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' fair values. For some
securities, such prices are not readily available. These securities will
generally be fair valued using the methods which may include consideration of
yields or prices of securities of comparable quality, coupon rate, maturity and
type of issue; indications as to values from dealers in securities, trading
characteristics and general market conditions.
Debt securities of sufficient credit quality with original maturities of 60 days
or less, generally are valued at amortized cost which approximates market value.
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 fair value.
Investments in open-end mutual funds are valued at net asset value.
Investments which are not valued using any of the methods discussed above, are
valued at their fair value, as determined by procedures established in good
faith and approved by the Board of Trustees.
The valuation techniques used by the Funds to measure fair value are consistent
with the market approach, income approach and/or cost approach, where
applicable, for each security type.
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
Wells Fargo Advantage Income Funds 85
Notes to Financial Statements
payable by the borrower or by retaining a portion of interest on the investment
securities purchased with cash received as collateral (after payment of a
"broker rebate fee" to the borrower). A Fund also continues to receive interest
or dividends on the securities loaned. Security loans are secured at all times
by collateral, although the loans may not be fully supported at all times if,
for example, the instruments in which cash collateral is invested decline in
value or the borrower fails to provide additional collateral when required in a
timely manner or at all. 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. Cash collateral received by a Fund pursuant to these loans
generally is invested on behalf of the Fund by the securities lending agent in
securities that, at the time of investment, are considered high-quality
short-term debt investments (including money market instruments) and have been
evaluated and approved by the Fund's adviser and are permissible investments for
the Fund. Cash collateral is invested on behalf of a Fund through a joint
account in a manner similar to the Fund's investment of its cash reserves and
the Fund is entitled to the gains and bears the losses on such investments. The
net asset value of a Fund will be affected by an increase or decrease in the
value of the securities loaned and by an increase or decrease in the value of
instruments purchased with cash collateral. Another risk from securities lending
is that the borrower may not provide additional collateral when required or
return the securities when due or when called for by the Fund. In either case, a
Fund could experience delays in recovering securities or collateral or could
lose all or part of the value of the loaned securities.
Wells Fargo Bank, N.A., currently acts as the securities lending agent for the
Funds, subject to the overall supervision of the Funds' investment adviser, and
has delegated its duties as securities lending agent to an affiliated sub-agent
for certain funds and to an unaffiliated sub-agent for other funds. Pursuant to
an exemptive order granted by the SEC and subject to compliance with its
conditions, Wells Fargo Bank, N.A. under a contract is entitled to receive for
its services 25% of the revenues earned on the securities lending activities and
incurs all expenses. Wells Fargo Bank, N.A. pays all or part of its portion of
the revenues generated by securities lending activities to the sub-agents as
compensation for their services as sub-agents. The securities lending agent may
make payments to borrowers and placing brokers that are not affiliated, directly
or indirectly, with the Trust, the adviser or the distributor. For the six
months ended November 30, 2009, 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. For foreign equity securities, Bank of New York Mellon
serves as the securities lending sub-agent and receives for its services 20% of
the revenues earned on the securities lending activities that it conducts with
respect to foreign equity securities. The value of the securities on loan, the
related collateral and the liability to return the collateral at November 30,
2009, are shown on the Statements of Assets and Liabilities.
WHEN-ISSUED TRANSACTIONS
Each Fund may purchase securities on a forward commitment or 'when-issued'
basis. A Fund records a when-issued transaction on the trade date and will
segregate assets to cover its obligation by confirming the availability of
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.
TERM LOANS
The Funds may invest in term loans. The Fund records an investment when the
borrower withdraws money and records interest as earned. These loans pay
interest at rates which are periodically reset by reference to a base lending
rate plus a spread. The Fund assumes the credit risk of the borrower. There
could be potential loss to the Fund in the event of default by the borrower.
FUTURES CONTRACTS
Certain Funds may be subject to interest rate risk in the normal course of
pursuing its investment objectives. The Funds may buy and sell futures contracts
in order to gain exposure to, or protect against changes in, security values and
interest rates. The primary risks associated with the use of futures contracts
are the imperfect correlation between changes in market values of securities
held by the Fund and the prices of futures contracts, and the possibility of an
illiquid market.
86 Wells Fargo Advantage Income Funds
Notes to Financial Statements
Futures contracts are valued based upon their quoted daily settlement prices.
The aggregate principal amounts of the contracts are not recorded in the
financial statements. Fluctuations in the value of the contracts are recorded in
the Statement of Assets and Liabilities as an asset or liability and in the
Statement of Operations as unrealized gains or losses until the contracts are
closed, at which point they are recorded as net realized gains or losses on
futures contracts. With futures contracts, there is minimal counterparty risk to
the Fund since futures are exchange traded and the exchange's clearinghouse, as
counterparty to all exchange traded futures, guarantees the futures against
default.
STRUCTURED INVESTMENT VEHICLES
The Funds may invest in structured debt securities, such as those issued by
Structured Investment Vehicles ("SIVs"). SIVs invest in a diversified pool of
underlying securities, which may include finance company debt and structured
finance assets, residential mortgage-backed securities, commercial
mortgage-backed securities, collateralized loan obligations, collateralized debt
obligations and other asset backed securities. The ability of a SIV to repay
debt depends primarily on the cash collections received from the SIV's
underlying asset portfolio, which may include certain assets such as subprime
mortgages that are subject to heightened risks of credit quality or market value
deterioration under the continuing adverse conditions in the U.S. credit
markets, and on the ability to obtain short-term funding through the issuance of
new debt. Investments in these securities present increased credit and liquidity
risks as there could be losses to a Fund in the event of credit or market value
deterioration in a SIV's underlying portfolio, mismatches in the timing of the
cash flows of the underlying asset interests and the repayment obligations of
maturing securities issued by a SIV, or a SIV's inability to issue new debt.
As of November 30, 2009, the following Funds owned certain of these types of
structured securities in the amounts shown in the table. These securities were
originally purchased by the Funds' securities lending agent on behalf of the
Funds through a joint account with cash collateral received by the Funds
pursuant to loans of the Funds' securities. Although considered high-quality,
short-term money market instruments when originally purchased by the securities
lending agent through the joint account, the SIVs are now in payment default,
have been restructured following default or are otherwise impaired and are
valued at fair value as shown in the Portfolio of Investments.
Defaulted/Impaired
FUND SIVs ($Value) % of Net Assets
- ---------------------------- ------------------ ---------------
GOVERNMENT SECURITIES FUND $12,930,733 0.64
HIGH INCOME FUND 1,450,315 0.24
SHORT-TERM FUND 909,081 0.22
SHORT-TERM HIGH YIELD FUND 194,363 0.06
ULTRA SHORT-TERM INCOME FUND 135,456 0.02
In a securities lending transaction, the net asset value of a Fund will be
affected by an increase or decrease in the value of the securities loaned and by
an increase or decrease in the value of instruments in which cash collateral is
invested. Thus, the current net asset value of each Fund reflects the current
valuations assigned to the defaulted or impaired SIVs that were purchased on its
behalf through the investment of cash collateral. Declines in the values of
defaulted or impaired SIVs generate unrealized losses for a Fund, which are
reflected in the Fund's Statement of Assets and Liabilities, equal to the
difference between (i) the value of the investments purchased with cash
collateral received for securities loaned and (ii) the amount that would be
payable if the Fund were to recall the loans at period end.
The amount of securities lending activity undertaken by a Fund fluctuates from
time to time. After the occurrence of a default or impairment of a SIV purchased
in a joint account by the securities lending agent, as the various participating
Funds' lending activity fluctuated, their ratable interest in the joint account,
including their ratable exposure to the defaulted or impaired SIVs would
fluctuate depending on the relative activity of each participating Fund. In
order to eliminate the fluctuation of the various Funds' ratable exposure to the
defaulted or impaired SIVs, the adviser to the Funds recommended to the Board of
Trustees, and the Board of Trustees approved, actions designed to fix the
allocation of percentage ownership in defaulted or impaired SIVs among all funds
participating in securities lending ("side pocketing") based on each Fund's
percentage ownership of the total cash collateral investment joint account as of
the date the fixed allocation is implemented. Accordingly, on February 13, 2009
a side pocketing occurred, which fixed each
Wells Fargo Advantage Income Funds 87
Notes to Financial Statements
Fund's ownership of defaulted or impaired SIVs in the joint account based on
each such Fund's percentage ownership of the joint account as of such date.
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 based on the effective interest method. To the extent debt
obligations are placed on non-accrual status, any related interest income may be
reduced by writing off interest receivables when the collection of all or a
portion of interest has become doubtful based on consistently applied
procedures. If the issuer subsequently resumes interest payments or when the
collectability of interest is reasonably assured, the debt obligation is removed
from non-accrual status.
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, if any, is declared daily and distributed to shareholders
monthly. Distributions to shareholders from net realized capital gains, if any,
are declared and distributed at least annually.
Distributions are based on amounts calculated in accordance with the applicable
federal income tax regulations, which may differ from GAAP. The timing and
character of distributions made during the period from net investment income or
net realized gains may also differ from their ultimate characterization for
federal income tax purposes. To the extent that these differences are permanent
in nature, such amounts are reclassified within the capital accounts based on
their federal tax-basis treatment. Temporary differences do not require
reclassifications.
FEDERAL AND OTHER 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 distributing 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.
Each Fund's income and federal excise tax returns and all financial records
supporting those returns for the prior three fiscal years are subject to
examination by the federal and Delaware revenue authorities.
At May 31, 2009, net capital loss carryforwards, which are available to offset
future net realized capital gains, were:
Expiration Capital Loss
Year Carryforwards
---------- -------------
GOVERNMENT SECURITIES FUND 2012 $ 599,009
2013 8,423,067
2014 5,950,495
2015 3,154,334
2016 3,078,336
HIGH INCOME FUND 2010 279,017,279
2011 28,016,734
2013 869,486
2014 266,573
2015 7,773,739
2016 3,607,384
2017 16,489,349
SHORT-TERM BOND FUND 2010 106,132,641
2011 2,145,251
2012 263,758
2013 417,163
2014 764,108
2015 1,524,727
88 Wells Fargo Advantage Income Funds
Notes to Financial Statements
Expiration Capital Loss
Year Carryforwards
---------- -------------
SHORT-TERM HIGH YIELD BOND FUND 2010 $ 65,207,341
2015 78,433
2016 1,091,400
2017 1,089,609
ULTRA SHORT-TERM INCOME FUND 2010 173,012,605
2011 21,833,596
2012 11,899,310
2013 73,332
2014 83,461
2015 25,866,042
2016 2,154,408
2017 8,848,032
At May 31, 2009, current year deferred post-October capital losses, which will
be treated as realized for tax purposes on the first day of the succeeding year,
were:
Deferred
Post-October
FUND Capital Loss
- ---- ------------
GOVERNMENT SECURITIES FUND $11,487,570
HIGH INCOME FUND 18,874,137
SHORT-TERM HIGH YIELD BOND FUND 5,080,417
ULTRA SHORT-TERM INCOME FUND 5,187,588
CLASS ALLOCATIONS
The separate classes of shares offered by each Fund differ principally in
applicable sales charges, distribution, shareholder servicing and administration
fees. Shareholders of each class bear certain expenses that pertain to that
particular class. All shareholders bear the common expenses of a Fund, earn
income from the portfolio, and are allocated unrealized gains and losses pro
rata based on the average daily net assets of each class, without distinction
between share classes. Dividends are determined separately for each class based
on income and expenses allocable to each class. Realized gains and losses are
allocated to each class pro rata based upon the net assets of each class on the
date realized. Differences in per share dividend rates generally result from the
relative weightings of pro rata income and realized gain allocations and from
differences in separate class expenses, including distribution, shareholder
servicing, and administration fees.
3. FAIR VALUATION MEASUREMENTS
Fair value measurements in investments are determined within a framework that
has established a fair value hierarchy based upon the various data inputs
utilized in determining the value of the Fund's investments. These inputs are
summarized into three broad levels as follows:
- - Level 1 - quoted prices in active markets for identical investments
- - Level 2 - other significant observable inputs (including quoted prices for
similar investments, interest rates, prepayment speeds, credit risk, etc.)
- - Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in these securities.
Wells Fargo Advantage Income Funds 89
Notes to Financial Statements
The following is a summary of the inputs used as of November 30, 2009 in valuing
the Funds' investments in securities:
Significant
Other Significant
Observable Unobservable Total Fair
Quoted Price Inputs Inputs Value as of
INVESTMENTS IN SECURITIES Level 1 Level 2 Level 3 11/30/2009
- ------------------------- -------------- -------------- ------------ --------------
GOVERNMENT SECURITIES FUND
Asset backed securities $ 0 $ 29,977,561 $ 0 $ 29,977,561
Mortgage backed securities 0 1,068,908,214 1,116,293 1,070,024,507
Collateralized mortgage obligations 0 345,503,623 0 345,503,623
Corporate debt securities 0 281,345,487 12,930,733 294,276,220
Debt securities issued by states in the
U.S. and its political subdivisions 0 69,195,344 0 69,195,344
Debt securities issued by foreign governments 0 30,377,816 0 30,377,816
Debt securities issued by U.S. Treasury and
U.S. government agencies 561,556,126 999,936 0 562,556,062
Short-term investments 463,636,359 71,565,059 0 535,201,418
-------------- -------------- ----------- --------------
$1,025,192,485 $1,897,873,040 $14,047,026 $2,937,112,551
============== ============== =========== ==============
HIGH INCOME FUND
Corporate debt securities $ 0 $ 591,561,106 $ 5,763,617 $ 597,324,723
Debt securities issued by states in the
U.S. and its political subdivisions 0 1,762,663 2,826,250 4,588,913
Debt securities issued by U.S. Treasury and
U.S. government agencies 0 249,984 0 249,984
Short-term investments 17,624,944 3,126,266 0 20,751,210
-------------- -------------- ----------- --------------
$ 17,624,944 $ 596,700,019 $ 8,589,867 $ 622,914,830
============== ============== =========== ==============
SHORT-TERM BOND FUND
Asset backed securities $ 0 $ 10,810,598 $ 6,910,249 $ 17,720,847
Mortgage backed securities 0 28,953,650 5,566 28,959,216
Collateralized mortgage obligations 0 32,421,708 2,927,138 35,348,846
Corporate debt securities 0 234,842,383 3,024,241 237,866,624
Debt securities issued by states in the
U.S. and its political subdivisions 0 36,808,692 0 36,808,692
Debt securities issued by U.S. Treasury and
U.S. government agencies 16,415,709 499,971 0 16,915,680
Short-term investments 40,829,778 1,284,231 0 42,114,009
-------------- -------------- ----------- --------------
$ 57,245,487 $ 345,621,233 $12,867,194 $ 415,733,914
============== ============== =========== ==============
SHORT-TERM HIGH YIELD BOND FUND
Collateralized mortgage obligations $ 0 $ 190,339 $ 0 $ 190,339
Corporate debt securities 0 298,303,448 2,649,773 300,953,221
Debt securities issued by states in the
U.S. and its political subdivisions 0 2,485,294 0 2,485,294
Debt securities issued by foreign governments 0 5,456,250 0 5,456,250
Short-term investments 24,227,923 1,434,902 0 25,662,825
-------------- -------------- ----------- --------------
$ 24,227,923 $ 307,870,233 $ 2,649,773 $ 334,747,929
============== ============== =========== ==============
90 Wells Fargo Advantage Income Funds
Notes to Financial Statements
Significant
Other Significant
Observable Unobservable Total Fair
Quoted Price Inputs Inputs Value as of
INVESTMENTS IN SECURITIES Level 1 Level 2 Level 3 11/30/2009
- ------------------------- ------------ ------------ ------------ ------------
ULTRA SHORT-TERM INCOME FUND
Asset backed securities $ 0 $ 38,801,117 $13,586,368 $ 52,387,485
Mortgage backed securities 0 23,045,188 8,791,373 31,836,561
Collateralized mortgage obligations 0 94,871,805 0 94,871,805
Corporate debt securities 0 399,945,441 3,643,184 403,588,625
Debt securities issued by states in the
U.S. and its political subdivisions 0 32,289,818 0 32,289,818
Debt securities issued by foreign governments 0 8,773,852 0 8,773,852
Debt securities issued by U.S. Treasury and
U.S. government agencies 0 699,961 0 699,961
Short-term investments $55,157,653 57,341 0 55,214,994
$55,157,653 $598,484,523 $26,020,925 $679,663,101
Further details on the major security types listed above for each Fund can be
found in the Portfolio of Investments
The following is a summary of the inputs used as of November 30, 2009 in valuing
the Funds' investments in other financial instruments:*
Total Unrealized
Appreciation/
INCOME FUNDS Level 1 Level 2 Level 3 (Depreciation)
- ------------ --------- ------- ------- ----------------
GOVERNMENT SECURITIES FUND $ 653,140 $0 $0 $ 653,140
HIGH INCOME FUND (27,659) 0 0 (27,659)
SHORT-TERM BOND FUND (70,238) 0 0 (70,238)
ULTRA SHORT-TERM INCOME FUND (144,190) 0 0 (144,190)
* Other financial instruments includes futures transactions.
The following is a reconciliation of investments in which significant
unobservable inputs (Level 3) were used in determining value:
Ultra
Government High Short-Term Short-Term Short-Term
Securities Income Bond High Yield Income
Fund Fund Fund Bond Fund Fund
------------ ---------- ---------- ---------- -----------
CORPORATE DEBT SECURITIES
Balance as of 05/31/2009 $ 11,349,914 $5,403,754 $ 797,942 $ 182,227 $ 118,896
Accrued discounts (premiums) 0 0 0 0 0
Realized gain (loss) (11,476,296) (717,569) (293,347) (75,661) (215,187)
Change in unrealized
appreciation (depreciation) 14,556,577 1,323,370 509,902 120,755 247,454
Net purchases (sales) (1,499,462) (245,938) (105,416) (32,958) (15,707)
Net transfer in (out) of Level 3 0 0 2,115,160 2,455,410 3,507,728
Balance as of 11/30/2009 12,930,733 5,763,617 3,024,241 2,649,773 3,643,184
ASSET-BACKED SECURITIES
Balance as of 05/31/2009 0 0 6,196,213 0 12,287,669
Accrued discounts (premiums) 0 0 0 0 0
Realized gain (loss) 0 0 0 0 0
Change in unrealized
appreciation (depreciation) 0 0 714,036 0 1,298,699
Net purchases (sales) 0 0 0 0 0
Net transfer in (out) of Level 3 0 0 0 0 0
Balance as of 11/30/2009 0 0 6,910,249 0 13,586,368
Wells Fargo Advantage Income Funds 91
Notes to Financial Statements
Government High Short-Term Short-Term Ultra
Securities Income Bond High Yield Short-Term
Fund Fund Fund Bond Fund Income Fund
----------- ---------- ----------- ---------- -----------
COLLATERALIZED MORTGAGE OBLIGATIONS
Balance as of 05/31/2009 $ 0 $ 0 $ 2,457,552 $ 0 $ 7,566,162
Accrued discounts (premiums) 0 0 0 0 0
Realized gain (loss) 0 0 0 0 0
Change in unrealized
appreciation (depreciation) 0 0 569,333 0 1,597,159
Net purchases (sales) 0 0 (99,747) 0 (371,948)
Net transfer in (out) of Level 3 0 0 0 0 0
Balance as of 11/30/2009 0 0 2,927,138 0 8,791,373
MORTGAGE BACKED SECURITIES
Balance as of 05/31/2009 1,469,903 0 0 0 0
Accrued discounts (premiums) 0 0 0 0 0
Realized gain (loss) 0 0 0 0 0
Change in unrealized
appreciation (depreciation) (4,652) 0 0 0 0
Net purchases (sales) (348,958) 0 0 0 0
Net transfer in (out) of Level 3 0 0 5,566 0 0
Balance as of 11/30/2009 1,116,293 0 5,566 0 0
DEBT SECURITIES ISSUED BY STATES IN THE U.S.
AND ITS POLITICAL SUBDIVISIONS
Balance as of 05/31/2009 0 0 0 0 0
Accrued discounts (premiums) 0 0 0 0 0
Realized gain (loss) 0 0 0 0 0
Change in unrealized
appreciation (depreciation) 0 0 0 0 0
Net purchases (sales) 0 0 0 0 0
Net transfer in (out) of Level 3 0 2,826,250 0 0 0
Balance as of 11/30/2009 0 2,826,250 0 0 0
BALANCE AS OF 11/30/2009 $14,047,026 $8,589,867 $12,867,194 $2,649,773 $26,020,925
Short-Term Ultra
Government High Short-Term High Yield Short-Term
Securities Income Bond Bond Income
Fund Fund Fund Fund Fund
---------- -------- ---------- ---------- ----------
Change in unrealized appreciation
(depreciation) relating to securities held
at the end of reporting period
Asset backed securities $ 0 $ 0 $714,036 $ 0 $1,298,699
Mortgage backed securities (4,652) 0 0 0 0
Collateralized mortgage obligations 0 0 569,333 0 1,597,159
Corporate debt securities 538,237 383,627 37,840 15,320 5,638
4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES
ADVISORY FEES
The Trust has entered into an advisory contract with Wells Fargo Funds
Management, LLC ("Funds Management"). The adviser is responsible for
implementing investment policies and guidelines and for supervising the
sub-adviser, who is responsible for day-to-day portfolio management.
92 Wells Fargo Advantage Income Funds
Notes to Financial Statements
Pursuant to the contract, Funds Management is entitled to receive an advisory
fee for its services as adviser at the following annual rates:
Advisory Fees
(% of Average
Average Daily Daily Net
Net Assets Assets)
------------------ -------------
GOVERNMENT SECURITIES FUND First $500 million 0.400
SHORT-TERM BOND FUND Next $500 million 0.375
ULTRA SHORT-TERM INCOME FUND Next $2 billion 0.350
Next $2 billion 0.325
Over $5 billion 0.300
HIGH INCOME FUND First $500 million 0.500
SHORT-TERM HIGH YIELD BOND Next $500 million 0.475
Next $2 billion 0.450
Next $2 billion 0.425
Over $5 billion 0.400
Funds Management may retain the services of certain investment sub-advisers to
provide daily portfolio management. The fees related to sub-advisory services
are borne directly by the adviser and do not increase the overall fees paid by a
Fund to the adviser.
Wells Capital Management Incorporated, an affiliate of Funds Management and
indirect wholly owned subsidiary of Wells Fargo & Company, is the sub-adviser to
each Fund.
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 from each Fund the following annual fees:
Advisory Fees
Average Daily (% of Average
Net Assets Daily Net Assets)
---------------- -----------------
Fund level First $5 billion 0.05
Next $5 billion 0.04
Over $10 billion 0.03
Class A All asset levels 0.18
Class B All asset levels 0.18
Class C All asset levels 0.18
Administrator Class All asset levels 0.10
Institutional Class All asset levels 0.08
Investor Class All asset levels 0.23
Funds Management has contractually waived advisory and administration fees
during the six months ended November 30, 2009 to the extent necessary to
maintain certain net operating expense ratios for the Funds. Expenses were
waived by Funds Management proportionately from all classes, first from advisory
fees, and then from any class specific expenses, if applicable.
CUSTODY AND FUND ACCOUNTING FEES
The Funds entered into a contract with State Street Bank and Trust Company
("State Street"), whereby State Street is responsible for providing custody
services and fund accounting services to the Funds (the "Custody and Fund
Accounting Agreement.") Pursuant to the Custody and Fund Accounting Agreement,
State Street is entitled to an annual asset-based fee for domestic and global
custody services for the Funds. Also pursuant to the Custody and Fund Accounting
Agreement, State Street is entitled to receive annual asset-based fees for
providing fund accounting services to the Funds.
Wells Fargo Advantage Income Funds 93
Notes to Financial Statements
Prior to September 21, 2009, WFB was responsible for providing custody services
to the Funds and was entitled to a monthly fee for custody services at an annual
rate of 0.02% of the average daily net assets of each Fund. PNC Global
Investment Servicing ("PNC") served as fund accountant for the Trust prior to
August 21, 2009 and received an annual asset-based fee and an annual fixed fee
from each Fund. PNC was also reimbursed for all out-of-pocket expenses
reasonably incurred in providing these services.
DISTRIBUTION FEES
The Trust has adopted a Distribution Plan for Class B and Class C shares of the
applicable Funds pursuant to Rule 12b-1 under the 1940 Act. Distribution fees
are charged to the Class B and Class C shares and paid to Wells Fargo Funds
Distributor, LLC, the principal underwriter of each Fund, at an annual rate of
0.75% of the average daily net assets of each class.
For the six months ended November 30, 2009, Wells Fargo Funds Distributor, LLC
received the following amounts in front-end sales charges and contingent
deferred sales charges.
Front-end Contingent deferred
sales charges sales charges
Class A Class C
------------- -------------------
GOVERNMENT SECURITIES FUND $ 5,148,044 $ 557
HIGH INCOME FUND 6,829,355 2,573
SHORT-TERM BOND FUND 3,684,577 0
SHORT-TERM HIGH YIELD BOND FUND 14,748,597 0
ULTRA SHORT-TERM INCOME FUND 2,702,728 1,586
SHAREHOLDER SERVICING FEES
The Trust has entered into contracts with one or more shareholder servicing
agents, whereby Class A, Class B, Class C, Administrator Class and Investor
Class of each applicable Fund is charged a fee at an annual rate of 0.25% of the
average daily net assets of each respective class.
5. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, exclusive of short-term securities
(securities with maturities of one year or less at purchase date) and U.S.
Government obligations for the six months ended November 30, 2009 were as
follows:
Purchases at Cost Sales Proceeds
----------------- --------------
GOVERNMENT SECURITIES FUND $3,021,017,107 $2,946,882,292
HIGH INCOME FUND 156,314,910 131,244,836
SHORT-TERM BOND FUND 153,456,824 99,157,493
SHORT-TERM HIGH YIELD BOND FUND 236,095,362 66,585,381
ULTRA SHORT-TERM INCOME FUND 261,126,933 138,768,503
6. DERIVATIVE TRANSACTIONS
During the six months ended November 30, 2009, the Funds entered into futures
contracts for hedging and speculative purposes.
At November 30, 2009, the following Funds had long futures contracts outstanding
as follows:
Initial Value at Net Unrealized
Contract November 30, Appreciation/
Expiration Contracts Type Value 2009 (Depreciation)
---------- --------- --------------------- ----------- ------------ --------------
GOVERNMENT SECURITIES FUND March 2010 455 US Treasury Note long $54,196,333 $54,571,563 $375,230
March 2010 282 US Treasury Note long 32,774,223 33,068,906 294,683
94 Wells Fargo Advantage Income Funds
Notes to Financial Statements
At November 30, 2009, the following Funds had short futures contracts
outstanding as follows:
Initial Value at Net Unrealized
Contract November 30, Appreciation/
Expiration Contracts Type Value 2009 (Depreciation)
---------- --------- ---------------------- ------------- -------------- --------------
GOVERNMENT SECURITIES FUND March 2010 100 US Treasury Note short $ (21,772,290) $ (21,789,063) $ (16,773)
HIGH INCOME FUND March 2010 20 US Treasury Note short $ (2,395,900) $ (2,398,750) $ (2,850)
March 2010 105 US Treasury Note short (12,288,082) (12,312,891) (24,809)
SHORT-TERM BOND FUND March 2010 68 US Treasury Note short $ (14,805,157) $ (14,816,562) $ (11,405)
March 2010 249 US Treasury Note short (29,140,308) (29,199,141) (58,833)
ULTRA SHORT-TERM INCOME FUND March 2010 716 US Treasury Note short $(155,889,598) $(156,009,688) $(120,090)
March 2010 102 US Treasury Note short (11,936,994) (11,961,094) (24,100)
During the six months ended November 30, 2009, all the above Funds invested in
futures with only one type of risk exposure. The fair value, realized gains or
losses and change in unrealized gains or losses on derivative instruments are
reflected in the appropriate financial statements.
The Government Securities Fund, High Income Fund, Short-Term Bond Fund and Ultra
Short-Term Income Fund had average contract amounts of $84,684,063, $14,567,757,
$31,890,501 and 91,584,316 respectively, in futures contracts during the six
months ended November 30, 2009.
7. ACQUISITION
As of the open of business on July 21, 2008, each "Acquiring Fund" identified
below acquired all of the assets and assumed all of the liabilities of its
corresponding "Target Fund" (each, an "Acquisition", and collectively, the
"Acquisitions"), as shown in the table below. Each Acquiring Fund was deemed to
be the accounting survivor in each Acquisition.
Target Fund Acquiring Fund
- ----------- ----------------------------
High Yield Bond Fund High Income Fund
Intermediate Government Income Fund Government Securities Fund
Ultra Short-Duration Bond Fund Ultra Short-Term Income Fund
The Acquisitions were completed pursuant to an Agreement and Plan of
Reorganization approved by the Board of Trustees of the Trust on November 7,
2007 and by the shareholders of each Target Fund on June 30, 2008. The
Acquisitions were accomplished through the following steps.
In a tax-free exchange, the High Income Fund issued 5,562,533 of its Class A
shares (valued at $52,435,301), 1,182,289 of its Class B shares (valued at
$11,143,933), and 852,390 of its Class C shares (valued at $8,039,807), in
exchange for all of the assets and liabilities of the High Yield Bond Fund. The
aggregate net assets of the High Yield Bond Fund, representing the aggregate net
asset value of the Class A shares, Class B shares, and Class C shares of the
High Yield Bond Fund, at the close of business on July 18, 2008 were valued at
$71,619,041, and included $4,627,216 of net unrealized depreciation, and were
combined with those of the High Income Fund.
The High Yield Bond Fund then liquidated by distributing (i) Class A shares of
the High Income Fund pro rata to the High Yield Bond Fund shareholders holding
Class A shares, (ii) Class B shares of the High Income Fund pro rata to the High
Yield Bond Fund shareholders holding Class B shares, and (iii) Class C shares of
the High Income Fund pro rata to the High Yield Bond Fund shareholders holding
Class C shares. As a result, the High Yield Bond Fund shareholders received
shares of their specified class of the High Income Fund with a total value equal
to the value of their High Yield Bond Fund shares at the close of business on
July 18, 2008.
In a tax-free exchange, the Government Securities Fund issued 10,207,680 of its
Class A shares (valued at $107,805,358), 810,709 of its Class B shares (valued
at $8,552,101), 646,475 of its Class C shares (valued at $6,800,230), and
18,621,269 of its Administrator Class shares (valued at $196,547,217), in
exchange for all of the assets and liabilities of the Intermediate Government
Income Fund. The aggregate net assets of the Intermediate Government Income
Fund, representing the aggregate net asset value of the Class A shares, Class B
shares, Class C and Administrator shares of the Intermediate
Wells Fargo Advantage Income Funds 95
Notes to Financial Statements
Government Income Fund, at the close of business on July 18, 2008 were valued at
$319,704,906, and included $1,977,340 of net unrealized depreciation, and were
combined with those of the Government Securities Fund.
The Intermediate Government Income Fund then liquidated by distributing (i)
Class A shares of the Government Securities Fund pro rata to the Intermediate
Government Income Fund shareholders holding Class A shares, (ii) Class B shares
of the Government Securities Fund pro rata to the Intermediate Government Income
Fund shareholders holding Class B shares, (iii) Class C shares of the Government
Securities Fund pro rata to the Intermediate Government Income Fund shareholders
holding Class C shares, and (iv) Administrator Class shares of the Government
Securities Fund pro rata to the Intermediate Government Income Fund shareholders
holding Administrator Class shares. As a result, the Intermediate Government
Income Fund shareholders received shares of their specified class of the
Government Securities Fund with a total value equal to the value of their
Intermediate Government Income Fund shares at the close of business on July 18,
2008.
In a tax-free exchange, the Ultra Short-Term Income Fund issued 1,445,396 of its
Class A shares (valued at $12,854,136), 250,315 of its Class C shares (valued at
$2,226,701), and 530,940 of its Investor Class shares (valued at $4,707,096), in
exchange for all of the assets and liabilities of the Ultra-Short Duration Bond
Fund. The aggregate net assets of the Ultra-Short Duration Bond Fund,
representing the aggregate net asset value of the Class A shares, Class B
shares, Class C shares and Class Z shares of the Ultra-Short Duration Bond Fund,
at the close of business on July 18, 2008 were valued at $19,787,933 and
included $1,498,862 of net unrealized depreciation, and were combined with those
of the Ultra Short-Term Income Fund.
The Ultra-Short Duration Bond Fund then liquidated by distributing (i) Class A
shares of the Ultra Short-Term Income Fund pro rata to the Ultra-Short Duration
Bond Fund shareholders holding Class A and Class B shares, (ii) Class C shares
of the Ultra Short-Term Income Fund pro rata to the Ultra-Short Duration Bond
Fund shareholders holding Class C shares, and (iii) Investor Class shares of the
Ultra Short-Term Income Fund pro rata to the Ultra-Short Duration Bond Fund
shareholders holding Class Z shares. As a result, the Ultra-Short Duration Bond
Fund shareholders received shares of their specified class of the Ultra
Short-Term Income Fund with a total value equal to the value of their
Ultra-Short Duration Bond Fund shares at the close of business on July 18, 2008.
In connection with the Acquisitions, each Target Fund was dissolved and
terminated as a series of the Trust. The aggregate net assets of the High Income
Fund, Government Securities Fund, and Ultra Short-Term Income Fund immediately
after the Acquisitions totaled $339,684,063, $1,720,741,244, and $731,607,944
respectively.
In addition, effective at the close of business on June 20, 2008, the Advisor
Class of the Government Securities Fund, High Income Fund, and the Ultra
Short-Term Income Fund was renamed Class A and was modified to assume the
features and attributes associated with Class A, including Class A exchange
privileges.
8. BANK BORROWINGS
The Trust and Wells Fargo Variable Trust (excluding the money market funds) are
parties to a $125,000,000 revolving credit agreement with State Street Bank and
Trust Company, whereby the Funds are permitted to use bank borrowings for
temporary or emergency purposes, such as to fund shareholder redemption
requests. Pursuant to the agreement entered into on September 8, 2009, interest
under the credit agreement is charged to each Fund based on a borrowing rate
equal to the higher of the Federal Funds rate in effect on that day plus 1.25%
or the overnight LIBOR rate in effect on that day plus 1.25%. In addition, under
the credit agreement, the Funds pay an annual commitment fee equal to 0.15% of
the unused balance, which is allocated pro rata. Prior to September 8, 2009, the
Funds participated in a $150,000,000 revolving credit agreement with the Bank of
New York Mellon and paid interest at a rate equal to the Federal Funds rate plus
0.60% and an annual commitment fee equal to 0.15% of the unused balance, which
was allocated on a pro rata basis.
For the six months ended November 30, 2009, there were no borrowings by the
Funds under the agreement.
96 Wells Fargo Advantage Income Funds
Notes to Financial Statements
9. INDEMNIFICATION
Under the Trust's organizational documents, the 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.
10. LEGAL AND REGULATORY MATTERS
In 2004, the predecessor Strong Funds' investment adviser and affiliates
(collectively, "Strong") entered into settlement agreements with certain
regulators, including the SEC and the New York Attorney General ("NYAG") to
settlement market-timing investigations. In the settlements, Strong agreed to
pay investor restitution and civil penalties. On September 14, 2009, the SEC
approved the terms of the Distribution Plan for the disgorgement and civil
penalties to the predecessor Strong Fund shareholders, and those eligible
investors will receive proceeds as a result of the Distribution Plan. The
successor funds are not expected to receive any portion of the proceeds. The
settlement with the NYAG imposed fee reductions across the predecessor Strong
Fund complex, and Funds Management agreed to honor these fee reductions for the
benefit of shareholders across the successor funds to total $35 million by May
2009. Although civil litigation against Strong and certain predecessor Strong
Funds relating to these matters is continuing, neither the current adviser nor
the successor funds is a party to any such suit.
Wells Fargo Advantage Income Funds 97
Other Information (Unaudited)
PROXY VOTING INFORMATION
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to portfolio securities is available without charge,
upon request, by calling 1-800-222-8222, visiting our Web site at
www.wellsfargo.com/advantagefunds, or visiting the SEC Web site at www.sec.gov.
Information regarding how the Funds voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 is available
without charge on the Funds' Web site at www.wellsfargo.com/advantagefunds or by
visiting the SEC Web site at www.sec.gov.
PORTFOLIO HOLDINGS INFORMATION
The complete portfolio holdings for each Fund, except money market funds, are
publicly available on the Funds' Web site (www.wellsfargo.com/advantagefunds) on
a monthly, 30-day or more delayed basis, and for money market funds, on a
monthly, seven-day 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") and Officers of the
Trust. This table should be read in conjunction with the Prospectus and the
Statement of Additional Information(1) of each Fund. Each of the Trustees and
Officers listed below acts in identical capacities for each of the 133 funds
comprising the Trust, Wells Fargo Variable Trust and Wells Fargo Master Trust
(collectively the "Fund Complex"), except that the person occupying the office
of Treasurer varies for specified Funds. All of the Trustees are also Members of
the Audit and Governance Committees of each Trust in the Fund Complex. The
mailing 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.
INDEPENDENT TRUSTEES
Position Held and
Name and Age Length of Service(2) Principal Occupations During Past Five Years Other Directorships
- ------------ ------------------------- -------------------------------------------------------- ---------------------------
Peter G. Gordon Trustee, since 1998; Co-Founder, Chairman, President and CEO of Crystal None
67 Chairman, since 2005 Geyser. Water Company.
(Lead Trustee since 2001)
Isaiah Harris, Jr. Advisory Board Retired. Prior thereto, President and CEO of BellSouth CIGNA Corporation;
57 Trustee, since 2008 Advertising and Publishing Corp from 2005 to 2007, Deluxe Corporation
President and CEO of BellSouth Enterprises from 2004 to
2005 and President of BellSouth Consumer Services from
2000 to 2003. Currently a member of the Iowa State
University Foundation Board of Governors and a member of
the Advisory Board of Iowa State University School of
Business.
Judith M. Johnson Trustee, since 2008 Retired. Prior thereto, Chief Executive Officer and None
60 Chief Investment Officer of Minneapolis Employees
Retirement Fund from 1996 to 2008. Ms. Johnson is a
certified public accountant and a certified managerial
accountant.
David F. Larcker Advisory Board James Irvin Miller Professor of Accounting at the None
59 Trustee, since 2008 Graduate School of Business, Stanford University,
Director of Corporate Governance Research Program and
Co-Director of The Rock Center for Corporate Governance
since 2006. From 2005 to 2008, Professor of Accounting
at the Graduate School of Business, Stanford University.
Prior thereto, Ernst & Young Professor of Accounting at
The Wharton School, University of Pennsylvania from 1985
to 2005.
98 Wells Fargo Advantage Income Funds
Other Information (Unaudited)
Position Held and
Name and Age Length of Service(2) Principal Occupations During Past Five Years Other Directorships
- ------------ ------------------------- -------------------------------------------------------- ---------------------------
Olivia S. Mitchell Trustee, since 2006 Professor of Insurance and Risk Management, Wharton None
56 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 President and CEO of Southern Minnesota Initiative None
58 Foundation, a non-profit organization, since 2007 and
Senior Fellow at the Humphrey Institute Policy Forum at
the University of Minnesota since 1995. Member of the
Board of Trustees of NorthStar Education Finance, Inc.,
a non-profit organization, since 2007.
Donald C. Willeke Trustee, since 1996 Principal of the law firm of Willeke & Daniels. General None
69 Counsel of the Minneapolis Employees Retirement Fund
from 1984 to present.
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
50 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 Funds None
49 Chief Legal Counsel, Management, LLC since 2001. Vice President and Managing
since 2003 Senior Counsel of Wells Fargo Bank, N.A. since 1996.
Kasey Phillips(3) Treasurer, since 2009 Senior Vice President of Evergreen Investment Management None
38 Company, LLC since 2006 and currently the Treasurer of
the Evergreen Funds since 2005. Vice President and
Assistant Vice President of Evergreen
Investment Services, Inc. from 1999 to 2006.
David Berardi(4) Assistant Treasurer, Vice President of Evergreen Investment Management None
34 since 2009 Company, LLC since 2008. Assistant Vice President of
Evergreen Investment Services, Inc. from 2004 to 2008.
Manager of Fund Reporting and Control for Evergreen
Investment Management Company, LLC since 2004.
Jeremy DePalma(4) Assistant Treasurer, Senior Vice President of Evergreen Investment Management None
35 since 2009 Company, LLC since 2008. Vice President, Evergreen
Investment Services, Inc. from 2004 to 2007. Assistant
Vice President, Evergreen Investment Services, Inc. from
2000 to 2004 and the head of the Fund Reporting and
Control Team within Fund Administration since 2005.
Debra Ann Early Chief Compliance Officer, Chief Compliance Officer of Wells Fargo Funds None
45 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.) Effective November 1, 2009.
(4.) Treasurer during the period from June 1, 2009 to October 31, 2009.
Assistant Treasurer effective November 1, 2009.
Wells Fargo Advantage Income Funds 99
List of Abbreviations
The following is a list of common abbreviations for terms and entities which may
have appeared in this report.
ABAG -- Association of Bay Area Governments
ADR -- American Depositary Receipt
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Alternative Minimum Tax
ARM -- Adjustable Rate Mortgages
BART -- Bay Area Rapid Transit
CDA -- Community Development Authority
CDO -- Collateralized Debt Obligation
CDSC -- Contingent Deferred Sales Charge
CGIC -- Capital Guaranty Insurance Company
CGY -- Capital Guaranty Corporation
CIFG -- CDC (Caisse des Depots et Consignations) IXIS Financial Guarantee
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
ETF -- Exchange-Traded Fund
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
FSA -- Farm Service Agency
GDR -- Global Depositary Receipt
GNMA -- Government National Mortgage Association
GO -- General Obligation
HCFR -- Healthcare Facilities Revenue
HEFA -- Health & Educational Facilities Authority
HEFAR -- Higher Education Facilities Authority Revenue
HFA -- Housing Finance Authority
HFFA -- Health Facilities Financing Authority
HUD -- Housing & Urban Development
IDA -- Industrial Development Authority
IDAG -- Industrial Development Agency
IDR -- Industrial Development Revenue
LIBOR -- London Interbank Offered Rate
LLC -- Limited Liability Company
LOC -- Letter of Credit
LP -- Limited Partnership
MBIA -- Municipal Bond Insurance Association
MFHR -- Multi-Family Housing Revenue
MMD -- Municipal Market Data
MTN -- Medium Term Note
MUD -- Municipal Utility District
NATL-RE -- National Public Finance Guarantee Corporation
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
SPDR -- Standard & Poor's Depositary Receipts
STIT -- Short-Term Investment Trust
TBA -- To Be Announced
TRAN -- Tax Revenue Anticipation Notes
USD -- Unified School District
XLCA -- XL Capital Assurance
THIS PAGE IS INTENTIONALLY LEFT BLANK.
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THIS PAGE IS INTENTIONALLY LEFT BLANK.
(GRAPHIC) REDUCE CLUTTER. SAVE TREES.
Sign up for electronic delivery of prospectuses and shareholder reports at
www.wellsfargo.com/advantagedelivery
(WELLS FARGO ADVANTAGE FUNDS LOGO)
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 Barclays Capital Bond Indexes,
which are published by Barclays Capital 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 Barclays Capital, and
neither Dow Jones nor Barclays Capital 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 Barclays Capital
Bond Indexes. IN NO EVENT SHALL DOW JONES, BARCLAYS CAPITAL 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.
Source: MSCI. MSCI makes no express or implied warranties or representations and
shall have no liability whatsoever with respect to any MSCI data contained
herein. The MSCI data may not be further redistributed or used as a basis for
other indices or any securities or financial products. This report is not
approved, reviewed or produced by MSCI.
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 - NO BANK GUARANTEE -MAY LOSE VALUE (GRAPHIC)
Printed on Recycled paper
(C) 2010 Wells Fargo Funds Management, LLC. All rights reserved.
www.wellsfargo.com/advantagefunds
119293 01-10
SIFNL/SAR104 11-09
ITEM 2. CODE OF ETHICS
=======================
Not required in this filing
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
=========================================
Not required in this filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
===============================================
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
==============================================
Not required in this filing.
ITEM 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 MANAGEMEENT
INVESTMENT COMPANY AND AFFILIATED PURCHASES
=================================================================
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
============================================================
The Governance Committee (the "Committee") of the Board of Trustees of the
registrant (the "Trust") has adopted procedures by which a shareholder of any
series of the Trust may submit properly a nominee recommendation for the
Committee's consideration.
The shareholder must submit any such recommendation (a "Shareholder
Recommendation") in writing to the Trust, to the attention of the Trust's
Secretary, at the address of the principal executive offices of the Trust.
The Shareholder Recommendation must be delivered to, or mailed and received at,
the principal executive offices of the Trust not less than forty-five (45)
calendar days nor more than seventy-five (75) calendar days prior to the date of
the Committee meeting at which the nominee would be considered.
The Shareholder Recommendation must include: (i) a statement in writing setting
forth (A) the name, age, date of birth, business address, residence address and
nationality of the person recommended by the shareholder (the "candidate"); (B)
the series (and, if applicable, class) and number of all shares of the Trust
owned of record or beneficially by the candidate, as reported to such
shareholder by the candidate; (C) any other information regarding the candidate
called for with respect to director nominees by paragraphs (a), (d), (e) and (f)
of Item 401 of Regulation S-K or paragraph (b) of Item 22 of Rule 14a-101
(Schedule 14A) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), adopted by the Securities and Exchange Commission (or the
corresponding provisions of any regulation or rule subsequently adopted by the
Securities and Exchange Commission or any successor agency applicable to the
Trust); (D) any other information regarding the candidate that would be required
to be disclosed if the candidate were a nominee in a proxy statement or other
filing required to be made in connection with solicitation of proxies for
election of directors pursuant to Section 14 of the Exchange Act and the rules
and regulations promulgated thereunder; and (E) whether the recommending
shareholder believes that the candidate is or will be an "interested person" of
the Trust (as defined in the Investment Company Act of 1940, as amended) and, if
not an "interested person," information regarding the candidate that will be
sufficient for the Trust to make such determination; (ii) the written and signed
consent of the candidate to be named as a nominee and to serve as a Trustee if
elected; (iii) the recommending shareholder's name as it appears on the Trust's
books; (iv) the series (and, if applicable, class) and number of all shares of
the Trust owned beneficially and of record by the recommending shareholder; and
(v) a description of all arrangements or understandings between the recommending
shareholder and the candidate and any other person or persons (including their
names) pursuant to which the recommendation is being made by the recommending
shareholder. In addition, the Committee may require the candidate to interview
in person and furnish such other information as it may reasonably require or
deem necessary to determine the eligibility of such candidate to serve as a
Trustee of the Trust.
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 changes in the Trust's internal controls over financial
reporting (as defined in rule 30a-3(d) udner the Investment Company Act) that
occurred during the second quarter of the period covered by this report that has
materially affected or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS
=================
(a)(1) Not required in this filing.
(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: January 28, 2010
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: January 28, 2010
By: /s/ Kasey L. Phillips
-----------------------------
Kasey L. Phillips
Treasurer
Date: January 28, 2010