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: 811-21331
Wells Fargo Advantage Multi-Sector Income Fund
(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)
Registrants telephone number, including area code: 800-222-8222
Date of fiscal year end: October 31, 2011
Date of reporting period: April 30, 2012
ITEM 1. REPORT TO SHAREHOLDERS
Wells Fargo Advantage
Multi-Sector Income Fund
Semi-Annual Report
April 30, 2012
Reduce clutter. Save trees.
Sign up for electronic delivery of prospectuses and shareholder reports at wellsfargo.com/advantagedelivery
2 | ||||
5 | ||||
8 | ||||
Financial Statements |
||||
27 | ||||
28 | ||||
29 | ||||
30 | ||||
31 | ||||
32 | ||||
39 | ||||
45 | ||||
46 |
The views expressed and any forward-looking statements are as of April 30, 2012, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Funds Management, LLC. Discussions of individual securities, or the markets generally, or any Wells Fargo Advantage Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements; the views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Funds Management, LLC, disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.
NOT FDIC INSURED ¡ NO BANK GUARANTEE ¡ MAY LOSE VALUE
2 | Wells Fargo Advantage Multi-Sector Income Fund | Letter to Shareholders |
1. | Beta measures fund volatility relative to general market movements. It is a standardized measure of systematic risk in comparison to a specified index. The benchmark beta is 1.00 by definition. Beta is based on historical performance and does not represent future results. |
2. | The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index with each stocks weight in the index proportionate to its market value. You cannot invest directly in an index. |
3. | The Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index. |
4. | The Barclays U.S. Aggregate Bond Index is composed of the Barclays 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. |
5. | The Barclays 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. |
6. | The Barclays U.S. Treasury Index is an index of U.S. Treasury securities. You cannot invest directly in an index. |
Letter to Shareholders | Wells Fargo Advantage Multi-Sector Income Fund | 3 |
7. | The Morgan Stanley Capital International Europe, Australasia, and Far East (MSCI EAFE) Index is an unmanaged group of securities widely regarded by investors to be representations of the stock markets of Europe, Australasia, and the Far East. You cannot invest directly in an index. 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 indexes or any securities or financial products. This report is not approved, reviewed or produced by MSCI. |
8. | The BofA Merrill Lynch Global Broad Market Ex. U.S. Index tracks the performance of investment grade debt publicly issued in the major domestic and euro bond markets, including sovereign, quasi-government, corporate, securitized and collateralized securities and excludes all securities denominated in US dollars. You cannot invest directly in an index. |
4 | Wells Fargo Advantage Multi-Sector Income Fund | Letter to Shareholders |
not only Greece but several other countries across the eurozone. Recognizing the drag the persistent sovereign debt crisis has had on financial stability across the eurozone, the ECB introduced additional liquidity into the European banking system through its Long-Term Refinancing Operation (LTRO). The LTRO program effectively encourages European banks to buy sovereign bonds of the eurozone governments, helping to push yields lower on bonds from financially fragile countries like Spain and Italy. This type of activity helps reduce the near-term risk that those countries would experience funding issues. From a global credit market perspective, this additional liquidity further aims to help alleviate fears of contagion and may cause risk premiums to declinewe believe an encouraging scenario for equities and high-yield bonds.
Recent events have not altered our message to shareholders.
The heightened volatility across the global financial markets during 2011 and lingering uncertainties about the outlook going forward have left many investors questioning their resolveand their investments. Yet, it is precisely at such times that the market may present opportunitiesas well as challengesfor prudent investors. For many investors, simply building and maintaining a well-diversified9 investment plan focused on clear financial objectives is the best long-term strategy.
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 wellsfargoadvantagefunds.com, or call us directly at 1-800-222-8222. We are available 24 hours a day, 7 days a week.
Sincerely,
Karla M. Rabusch
President
Wells Fargo Advantage Funds
9. | Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses. |
Performance Highlights (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 5 |
The Fund is leveraged through a secured debt borrowing facility and may issue preferred shares. The use of leverage results in certain risks including, among others, the likelihood of greater volatility of net asset value and the market price of common shares. Foreign investments are especially volatile and can rise or fall dramatically due to differences in the political and economic conditions of the host country. These risks are generally intensified in emerging markets. Derivatives involve additional risks including interest rate risk, credit risk, the risk of improper valuation and the risk of non-correlation to the relevant instruments they are designed to hedge or to closely track. 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. This Fund is exposed to mortgage- and asset-backed securities risk.
1. | Total returns based on market value are calculated assuming a purchase of common stock at the closing market price prior to the first days opening market price and a sale at the last days closing market price for the period reported. Total returns based on NAV are calculated based on the NAV at the beginning of the period and end of period. Dividends and distributions are assumed for the purposes of these calculations to be reinvested at prices obtained under the Funds Automatic Dividend Reinvestment Plan. Total return do not reflect brokerage commissions or sales charges. If these charges were included, the returns would be lower. |
2. | Effective June 29, 2012, Christopher Wightman became a Portfolio Manager of the Fund. |
3. | This chart does not reflect any brokerage commissions or sales charges. |
6 | Wells Fargo Advantage Multi-Sector Income Fund | Performance Highlights (Unaudited) |
MANAGERS DISCUSSION
Strategy
The fear of a double-dip U.S. economic recession and a contagion resulting from the ongoing European debt crisis that was priced into the global financial market in late summer 2011 has lessenedfor now. Much of the fear surrounding the potential of cascading bank failures in Europe was removed in December 2011 when the European Central Bank (ECB)
initiated its Long-Term Refinancing Operation (LTRO). Since then, Greece has, thus far, avoided a disorderly default, and the ECBs LTRO have proved successful in providing liquidity to the banking system, helping to roll over sizable positions of maturing unsecured debt while also encouraging European banks to buy sovereign bonds. The primary beneficiaries have been risk assets such as U.S. equities and high-yield bonds.
During the six-month period, the international/emerging markets fixed-income portion of the Fund moved from a global (excluding U.S.) aggregate style to a more income-oriented style focusing on local developed and emerging markets with higher relative yields and stronger fundamentals. This repositioning had a positive effect on the Fund as emerging markets debt outperformed developed market bonds during the period.
The U.S. high-yield corporate bond market, as measured by the BofA Merrill Lynch U.S. High-Yield Master II Blended Index4, posted a six-month total return of 6.45%, buoyed by a strong U.S. equity market and steady improvement of U.S. economic conditions.
The mortgage/corporate sleeve continued to invest in adjustable-rate mortgage-backed securities but also began to invest in investment-grade corporate bonds and fixed-rate mortgagesincluding mortgage-backed securities, asset-backed securities, and collateralized mortgage obligations. Within the mortgage and corporate bond markets, higher-beta sectors, such as financials and commercial mortgage-backed securities (CMBS), were the best-performing areas as market sentiment toward risk assets improved.
Ten largest holdings5 as of April 30, 2012 | ||||
Poland, 5.25%, 10/25/2020 |
2.70% | |||
Mexico, 7.25%, 12/15/2016 |
2.38% | |||
Brazil, 12.50%, 01/05/2016 |
2.37% | |||
Russia, 7.85%, 03/10/2018 |
2.34% | |||
Mexico, 8.50%, 11/15/2038 |
2.09% | |||
FHLMC, 2.40%, 04/01/2034 |
1.98% | |||
Brazil, 12.50%, 01/05/2022 |
1.94% | |||
South Africa, 8.25%, 09/15/2017 |
1.93% | |||
FNMA, 2.49%, 10/01/2034 |
1.57% | |||
Columbia, 7.75%, 04/14/2021 |
1.51% |
Credit quality6 as of April 30, 2012 |
Effective maturity distribution7 as of April 30, 2012 |
4. | The BofA Merrill Lynch U.S. High Yield Master II Blended Index is a market value-weighted index of all domestic and Yankee high-yield bonds, including deferred interest bonds and payment-in kind securities. Issues included in the index have maturities of one year or more and have a credit rating lower than BBB-/Baa3, but are not in default. The BofA Merrill Lynch U.S. High Yield Master II Blended Index limits any individual issuer to a maximum of 2% benchmark exposure. You cannot invest directly in an index |
5. | The ten largest holdings are calculated based on the value of the securities divided by total net assets of the Fund. Holdings are subject to change and may have changed since the date specified. |
6. | The ratings indicated are from Standard & Poors, Moodys 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 & Poors 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. Standard & Poors rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moodys rates the creditworthiness of bonds, ranging from Aaa (highest) to C (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. Moodys rates the creditworthiness of short-term U.S. tax-exempt municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). If a security was rated by all three rating agencies, the middle rating was utilized. If rated by two of three rating agencies, the lower rating was utilized and if rated by one of the agencies that rating was utilized. Credit quality is subject to change and is calculated based on the total investments of the Fund. |
7. | Percentages are subject to change and are calculated based on the total long-term investments of the Fund. |
Performance Highlights (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 7 |
The mortgage/corporate credit sleeves focus on credits rated A or BBB added value as lower-rated credits outperformed the highest-quality credits, AAA- and AA-rated, in the period. The sleeves exposure to CMBS and financial credits also contributed to returns.
Detractors from performance
The international/emerging markets exposures to the Australian dollar, Brazilian real, Indonesian rupiah, and Korean won detracted from performance. The U.S. high-yield allocations preference for BB- and B-rated credits over CCC- and lower-rated bonds detracted from performance, as the lower-quality credit tiers performed best. While floating-rate bank loans posted positive returns during the quarter, they underperformed the broad high-yield bond market. Consequently, the Funds increased exposure to bank loans was a drag on performance.
Management outlook
Consensus forecasts for global economic growthparticularly into 2013have firmed up further. Inflationary expectations remain benign and central banks around the globe retain highly accommodative stances. All of these factors have combined to help equity markets, nongovernment bonds, and select currencies recover from their late-November 2011 lows. With a partial resolution to the European Economic and Monetary Union debt crisisor at least a delay of the problems until a later dateit looks as if the current strong market can continue through the spring and into the summer. A background of political stability will also remain an important requirement. Against this backdrop, the international/emerging markets portion of the Fund will continue to emphasize emerging markets debt and select developed markets such as Australia and New Zealand.
The U.S. economy is ideal for U.S. high yield, as it shows signs of steady improvement yet is weak enough to encourage extraordinarily accommodative monetary policy. Based on our assessment, although absolute yields remain low, yield spreads are still compensatory for the near- and medium-term default risk. If the Fed were to end some of its liquidity-enhancing programs and let markets have a greater influence on pricing, we would expect rates to rise rather quickly. Rising rates affect pricing across all asset classes, and high yield would likely experience higher average yields as a result. In this environment, the U.S. high-yield fixed-income team will remain focused on bottom-up credit analysis and individual issue selection to manage downside risk while maintaining its allocation toward floating-rate bank loans.
A gradual improvement in U.S. economic conditions remains the mortgage/corporate credit management teams base-case scenario for 2012. Risks to our outlook include the chance of a further spike in energy prices and the political uncertainty associated with the U.S. presidential and congressional elections in November. Against the backdrop of the uncertainty of an election year, it is reasonable to question how much progress will be made toward eliminating or reducing the inevitable impact of fiscal headwinds in January 2013. Some estimate as much as a 4% GDP drag if the 2001 and 2003 tax cuts are allowed to expire and the automatic spending cuts, as legislated in the Budget Control Act of 2011, are allowed to go into effect beginning in 2013. Clearly this is a material risk, and market participants are understandably anxious about it. In this environment, the team will continue to emphasize CMBS and nonagency mortgages relative to adjustable-rate mortgage securities.
8 | Wells Fargo Advantage Multi-Sector Income Fund | Portfolio of InvestmentsApril 30, 2012 (Unaudited) |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Agency Securities: 10.00% | ||||||||||||||||
FHLB ± |
2.41 | % | 12/01/2034 | $ | 6,523,269 | $ | 6,897,006 | |||||||||
FHLMC ± |
2.40 | 04/01/2034 | 12,928,686 | 13,696,261 | ||||||||||||
FHLMC |
8.50 | 04/01/2015 | 11,344 | 11,484 | ||||||||||||
FHLMC |
8.50 | 07/01/2028 | 120,829 | 148,446 | ||||||||||||
FHLMC |
8.50 | 03/01/2030 | 67,590 | 71,333 | ||||||||||||
FHLMC Series 0196 Class A ± |
1.05 | 12/15/2021 | 80,651 | 81,691 | ||||||||||||
FHLMC Series 1383 ± |
5.81 | 02/01/2037 | 1,680,084 | 1,806,506 | ||||||||||||
FHLMC Series 2011-K16 Class B ±144A |
4.59 | 11/25/2046 | 1,000,000 | 997,853 | ||||||||||||
FHLMC Series 2012-K17 Class B ±144A |
4.50 | 12/25/2044 | 500,000 | 490,930 | ||||||||||||
FHLMC Series 2012-K501 Class C ± |
3.49 | 11/25/2046 | 800,000 | 759,406 | ||||||||||||
FHLMC Series 2012-K705 Class B ±144A |
4.31 | 09/25/2044 | 1,000,000 | 1,012,614 | ||||||||||||
FHLMC Series 2012-K706 Class B ±144A |
4.02 | 11/25/2044 | 500,000 | 501,007 | ||||||||||||
FHLMC Series 2012-K706 Class C ±144A |
4.02 | 11/25/2044 | 450,000 | 406,700 | ||||||||||||
FHLMC Series 2012-K707 Class B ±144A |
3.88 | 01/25/2047 | 930,000 | 908,753 | ||||||||||||
FHLMC Series 2390 Class FD ± |
0.69 | 12/15/2031 | 72,792 | 73,079 | ||||||||||||
FHLMC Series 2411 Class F ± |
0.79 | 02/15/2032 | 104,613 | 105,327 | ||||||||||||
FHLMC Series 2567 Class FH ± |
0.64 | 02/15/2033 | 176,974 | 177,180 | ||||||||||||
FNMA ± |
2.13 | 12/01/2035 | 1,464,922 | 1,527,047 | ||||||||||||
FNMA ± |
2.30 | 08/01/2036 | 1,995,247 | 2,079,866 | ||||||||||||
FNMA ± |
2.49 | 10/01/2034 | 10,187,735 | 10,833,075 | ||||||||||||
FNMA ± |
2.50 | 06/01/2038 | 3,301,540 | 3,517,425 | ||||||||||||
FNMA ± |
2.58 | 01/01/2038 | 2,747,988 | 2,833,823 | ||||||||||||
FNMA ± |
2.63 | 04/01/2036 | 1,608,095 | 1,676,195 | ||||||||||||
FNMA ± |
2.69 | 05/01/2036 | 845,947 | 880,184 | ||||||||||||
FNMA ± |
2.71 | 07/01/2036 | 1,214,062 | 1,290,903 | ||||||||||||
FNMA ± |
4.21 | 02/01/2035 | 4,955,539 | 5,289,013 | ||||||||||||
FNMA ± |
4.75 | 09/01/2032 | 2,231,086 | 2,384,129 | ||||||||||||
FNMA ± |
4.86 | 04/01/2034 | 2,644,641 | 2,780,004 | ||||||||||||
FNMA |
6.00 | 04/01/2033 | 187,514 | 210,199 | ||||||||||||
FNMA ± |
6.26 | 09/01/2037 | 1,958,505 | 2,135,702 | ||||||||||||
FNMA |
6.50 | 11/01/2032 | 65,527 | 75,542 | ||||||||||||
FNMA |
7.50 | 07/01/2017 | 96,207 | 105,458 | ||||||||||||
FNMA |
7.50 | 10/01/2028 | 11,894 | 11,922 | ||||||||||||
FNMA |
7.50 | 11/01/2028 | 162,921 | 177,122 | ||||||||||||
FNMA |
7.50 | 02/01/2030 | 42,829 | 43,637 | ||||||||||||
FNMA |
7.50 | 09/01/2030 | 99,635 | 107,810 | ||||||||||||
FNMA |
8.00 | 12/01/2024 | 7,239 | 7,324 | ||||||||||||
FNMA |
8.00 | 06/01/2030 | 34,878 | 35,667 | ||||||||||||
FNMA |
12.00 | 01/01/2016 | 13,261 | 14,789 | ||||||||||||
FNMA Series 1996-46 Class FA ± |
0.75 | 08/25/2021 | 48,131 | 48,324 | ||||||||||||
FNMA Series 2001-25 Class Z |
6.00 | 06/25/2031 | 488,679 | 551,215 | ||||||||||||
FNMA Series 2001-35 Class F ± |
0.84 | 07/25/2031 | 22,481 | 22,660 | ||||||||||||
FNMA Series 2001-57 Class F ± |
0.74 | 06/25/2031 | 22,633 | 22,743 | ||||||||||||
FNMA Series 2001-T10 Class A2 |
7.50 | 12/25/2041 | 220,100 | 255,380 | ||||||||||||
FNMA Series 2002-77 Class FH ± |
0.64 | 12/18/2032 | 157,575 | 157,912 | ||||||||||||
FNMA Series 2002-97 Class FR ± |
0.79 | 01/25/2033 | 48,200 | 48,275 | ||||||||||||
FNMA Series 2003-W8 Class 3F2 ± |
0.59 | 05/25/2042 | 1,027,747 | 1,027,954 | ||||||||||||
FNMA Series G91-16 Class F ± |
0.70 | 06/25/2021 | 52,875 | 53,045 | ||||||||||||
FNMA Series G92-17 Class F ± |
1.30 | 03/25/2022 | 115,421 | 117,474 | ||||||||||||
GNMA |
6.50 | 06/15/2028 | 70,415 | 82,232 |
The accompanying notes are an integral part of these financial statements.
Portfolio of InvestmentsApril 30, 2012 (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 9 |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Agency Securities (continued) | ||||||||||||||||
GNMA |
7.25 | % | 07/15/2017 | $ | 34,683 | $ | 38,157 | |||||||||
GNMA |
7.25 | 08/15/2017 | 53,510 | 59,191 | ||||||||||||
GNMA |
7.25 | 08/15/2017 | 27,883 | 30,753 | ||||||||||||
GNMA |
7.25 | 08/15/2017 | 14,345 | 15,916 | ||||||||||||
GNMA |
7.25 | 09/15/2017 | 40,201 | 44,635 | ||||||||||||
GNMA |
7.25 | 10/15/2017 | 76,420 | 84,492 | ||||||||||||
GNMA |
7.25 | 10/15/2017 | 44,500 | 49,062 | ||||||||||||
GNMA |
7.25 | 11/15/2017 | 35,632 | 39,157 | ||||||||||||
GNMA |
7.25 | 01/15/2018 | 12,682 | 14,046 | ||||||||||||
GNMA |
7.25 | 01/15/2018 | 29,457 | 32,743 | ||||||||||||
GNMA |
7.25 | 02/15/2018 | 30,074 | 33,396 | ||||||||||||
GNMA |
7.25 | 05/15/2018 | 15,601 | 17,097 | ||||||||||||
Total Agency Securities (Cost $66,302,596) |
69,008,271 | |||||||||||||||
|
|
|||||||||||||||
Asset-Backed Securities: 0.11% | ||||||||||||||||
CVS Pass-Through Trust Series T |
6.04 | 12/10/2028 | 646,432 | 723,383 | ||||||||||||
|
|
|||||||||||||||
Total Asset-Backed Securities (Cost $723,654) |
723,383 | |||||||||||||||
|
|
|||||||||||||||
Shares | ||||||||||||||||
Common Stocks: 0.05% | ||||||||||||||||
Consumer Discretionary: 0.00% |
||||||||||||||||
Hotels, Restaurants & Leisure: 0.00% | ||||||||||||||||
Trump Entertainment Resorts Incorporated |
1,161 | 5,225 | ||||||||||||||
|
|
|||||||||||||||
Telecommunication Services: 0.05% |
||||||||||||||||
Diversified Telecommunication Services: 0.05% | ||||||||||||||||
Fairpoint Communications Incorporated |
70,442 | 326,146 | ||||||||||||||
|
|
|||||||||||||||
Total Common Stocks (Cost $1,617,838) |
331,371 | |||||||||||||||
|
|
|||||||||||||||
Principal | ||||||||||||||||
Convertible Debentures: 0.16% | ||||||||||||||||
Information Technology: 0.16% |
||||||||||||||||
Communications Equipment: 0.16% | ||||||||||||||||
Lucent Technologies Incorporated Series B |
2.88 | 06/15/2025 | $ | 1,145,000 | 1,130,688 | |||||||||||
|
|
|||||||||||||||
Total Convertible Debentures (Cost $765,113) |
1,130,688 | |||||||||||||||
|
|
|||||||||||||||
Corporate Bonds and Notes: 55.47% |
||||||||||||||||
Consumer Discretionary: 11.54% |
||||||||||||||||
Auto Components: 0.94% | ||||||||||||||||
Allison Transmission Incorporated 144A |
7.13 | 05/15/2019 | 3,050,000 | 3,194,875 | ||||||||||||
Cooper Tire & Rubber Company |
7.63 | 03/15/2027 | 1,895,000 | 1,876,050 | ||||||||||||
Cooper Tire & Rubber Company |
8.00 | 12/15/2019 | 450,000 | 487,125 | ||||||||||||
Goodyear Tire & Rubber Company |
7.00 | 05/15/2022 | 400,000 | 397,000 | ||||||||||||
Goodyear Tire & Rubber Company |
8.75 | 08/15/2020 | 468,000 | 508,950 | ||||||||||||
6,464,000 | ||||||||||||||||
|
|
The accompanying notes are an integral part of these financial statements.
10 | Wells Fargo Advantage Multi-Sector Income Fund | Portfolio of InvestmentsApril 30, 2012 (Unaudited) |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Diversified Consumer Services: 1.36% | ||||||||||||||||
Carriage Services Incorporated |
7.88 | % | 01/15/2015 | $ | 1,795,000 | $ | 1,821,925 | |||||||||
Service Corporation International |
6.75 | 04/01/2016 | 475,000 | 515,375 | ||||||||||||
Service Corporation International |
7.00 | 06/15/2017 | 1,610,000 | 1,795,150 | ||||||||||||
Service Corporation International |
7.00 | 05/15/2019 | 650,000 | 694,688 | ||||||||||||
Service Corporation International |
7.50 | 04/01/2027 | 3,965,000 | 4,004,650 | ||||||||||||
Service Corporation International |
8.00 | 11/15/2021 | 475,000 | 542,688 | ||||||||||||
9,374,476 | ||||||||||||||||
|
|
|||||||||||||||
Hotels, Restaurants & Leisure: 3.05% | ||||||||||||||||
Ameristar Casinos Incorporated |
7.50 | 04/15/2021 | 2,150,000 | 2,273,625 | ||||||||||||
Burger King Corporation |
9.88 | 10/15/2018 | 850,000 | 965,813 | ||||||||||||
CCM Merger Incorporated 144A |
9.13 | 05/01/2019 | 1,050,000 | 1,067,063 | ||||||||||||
Chukchansi Economic Development Authority ±144A |
4.16 | 11/15/2012 | 1,375,000 | 1,000,313 | ||||||||||||
CityCenter Holdings LLC |
7.63 | 01/15/2016 | 175,000 | 185,500 | ||||||||||||
CityCenter Holdings LLC 144A |
7.63 | 01/15/2016 | 1,000,000 | 1,057,500 | ||||||||||||
CityCenter Holdings LLC ¥ |
11.50 | 01/15/2017 | 1,138,307 | 1,263,521 | ||||||||||||
DineEquity Incorporated |
9.50 | 10/30/2018 | 3,475,000 | 3,839,875 | ||||||||||||
Greektown Superholdings |
13.00 | 07/01/2015 | 4,125,000 | 4,552,969 | ||||||||||||
NAI Entertainment Holdings LLC 144A |
8.25 | 12/15/2017 | 1,800,000 | 1,984,500 | ||||||||||||
Scientific Games Corporation |
9.25 | 06/15/2019 | 485,000 | 537,138 | ||||||||||||
Speedway Motorsports Incorporated |
6.75 | 02/01/2019 | 225,000 | 235,125 | ||||||||||||
Speedway Motorsports Incorporated |
8.75 | 06/01/2016 | 950,000 | 1,035,500 | ||||||||||||
William Hill plc |
7.13 | 11/11/2016 | 396,000 | 694,082 | ||||||||||||
Yonkers Racing Corporation 144A |
11.38 | 07/15/2016 | 325,000 | 349,781 | ||||||||||||
21,042,305 | ||||||||||||||||
|
|
|||||||||||||||
Household Durables: 0.07% | ||||||||||||||||
American Greetings Corporation |
7.38 | 12/01/2021 | 475,000 | 494,000 | ||||||||||||
|
|
|||||||||||||||
Internet & Catalog Retail: 0.11% | ||||||||||||||||
Expedia Incorporated |
5.95 | 08/15/2020 | 750,000 | 783,653 | ||||||||||||
|
|
|||||||||||||||
Media: 4.79% | ||||||||||||||||
Cablevision Systems Corporation |
8.63 | 09/15/2017 | 1,310,000 | 1,437,725 | ||||||||||||
CBS Corporation |
8.88 | 05/15/2019 | 750,000 | 999,226 | ||||||||||||
CCH II Capital LLC |
13.50 | 11/30/2016 | 7,535,929 | 8,515,600 | ||||||||||||
Cinemark USA Incorporated |
7.38 | 06/15/2021 | 775,000 | 837,000 | ||||||||||||
Cinemark USA Incorporated |
8.63 | 06/15/2019 | 350,000 | 388,938 | ||||||||||||
CSC Holdings LLC |
7.88 | 02/15/2018 | 1,100,000 | 1,221,000 | ||||||||||||
CSC Holdings LLC |
8.50 | 04/15/2014 | 400,000 | 441,000 | ||||||||||||
DIRECTV Holdings LLC 144A |
3.80 | 03/15/2022 | 750,000 | 746,120 | ||||||||||||
DISH DBS Corporation |
7.88 | 09/01/2019 | 480,000 | 555,600 | ||||||||||||
EchoStar DBS Corporation |
6.63 | 10/01/2014 | 1,000,000 | 1,085,000 | ||||||||||||
EchoStar DBS Corporation |
7.13 | 02/01/2016 | 125,000 | 138,438 | ||||||||||||
EchoStar DBS Corporation |
7.75 | 05/31/2015 | 350,000 | 393,750 | ||||||||||||
Gray Television Incorporated |
10.50 | 06/29/2015 | 3,600,000 | 3,780,000 | ||||||||||||
Interactive Data Corporation |
10.25 | 08/01/2018 | 1,250,000 | 1,412,500 | ||||||||||||
Interpublic Group of Companies |
4.00 | 03/15/2022 | 750,000 | 749,168 | ||||||||||||
Lamar Media Corporation 144A |
5.88 | 02/01/2022 | 225,000 | 231,188 | ||||||||||||
Lamar Media Corporation |
7.88 | 04/15/2018 | 575,000 | 628,906 |
The accompanying notes are an integral part of these financial statements.
Portfolio of InvestmentsApril 30, 2012 (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 11 |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Media (continued) | ||||||||||||||||
Lamar Media Corporation Series C |
9.75 | % | 04/01/2014 | $ | 500,000 | $ | 565,625 | |||||||||
LIN Television Corporation |
8.38 | 04/15/2018 | 925,000 | 959,688 | ||||||||||||
National CineMedia LLC 144A |
6.00 | 04/15/2022 | 775,000 | 788,563 | ||||||||||||
National CineMedia LLC |
7.88 | 07/15/2021 | 650,000 | 700,375 | ||||||||||||
Regal Cinemas Corporation |
8.63 | 07/15/2019 | 2,650,000 | 2,915,000 | ||||||||||||
Salem Communications Corporation |
9.63 | 12/15/2016 | 2,516,000 | 2,792,760 | ||||||||||||
Time Warner Cable Incorporated |
4.00 | 01/15/2022 | 750,000 | 787,331 | ||||||||||||
33,070,501 | ||||||||||||||||
|
|
|||||||||||||||
Specialty Retail: 0.93% | ||||||||||||||||
Advance Auto Parts Incorporated |
4.50 | 01/15/2022 | 600,000 | 631,957 | ||||||||||||
Gap Incorporated |
5.95 | 04/12/2021 | 600,000 | 620,001 | ||||||||||||
Limited Brands Incorporated |
6.63 | 04/01/2021 | 800,000 | 864,000 | ||||||||||||
Macys Retail Holdings Incorporated |
3.88 | 01/15/2022 | 600,000 | 617,331 | ||||||||||||
RadioShack Corporation |
6.75 | 05/15/2019 | 1,800,000 | 1,341,000 | ||||||||||||
Rent-A-Center Incorporated |
6.63 | 11/15/2020 | 375,000 | 391,875 | ||||||||||||
Toys R Us Property Company LLC |
8.50 | 12/01/2017 | 1,905,000 | 1,981,200 | ||||||||||||
6,447,364 | ||||||||||||||||
|
|
|||||||||||||||
Textiles, Apparel & Luxury Goods: 0.29% | ||||||||||||||||
Oxford Industries Incorporated |
11.38 | 07/15/2015 | 1,865,000 | 2,007,225 | ||||||||||||
|
|
|||||||||||||||
Consumer Staples: 0.69% |
||||||||||||||||
Food & Staples Retailing: 0.09% | ||||||||||||||||
SABMiller Holdings Incorporated 144A |
3.75 | 01/15/2022 | 600,000 | 623,601 | ||||||||||||
|
|
|||||||||||||||
Food Products: 0.49% | ||||||||||||||||
Darling International Incorporated |
8.50 | 12/15/2018 | 125,000 | 140,156 | ||||||||||||
Dole Food Company Incorporated |
13.88 | 03/15/2014 | 1,452,000 | 1,658,910 | ||||||||||||
Smithfield Foods Incorporated |
10.00 | 07/15/2014 | 1,370,000 | 1,602,900 | ||||||||||||
3,401,966 | ||||||||||||||||
|
|
|||||||||||||||
Tobacco: 0.11% | ||||||||||||||||
Lorillard Tobacco Company |
6.88 | 05/01/2020 | 650,000 | 770,776 | ||||||||||||
|
|
|||||||||||||||
Energy: 8.55% |
||||||||||||||||
Energy Equipment & Services: 1.73% | ||||||||||||||||
Bristow Group Incorporated |
7.50 | 09/15/2017 | 1,585,000 | 1,656,325 | ||||||||||||
Cleaver-Brooks Incorporated 144A |
12.25 | 05/01/2016 | 630,000 | 668,588 | ||||||||||||
Dresser Rand Group Incorporated |
6.50 | 05/01/2021 | 925,000 | 966,625 | ||||||||||||
Gulfmark Offshore Incorporated 144A |
6.38 | 03/15/2022 | 1,875,000 | 1,912,500 | ||||||||||||
Hornbeck Offshore Services Incorporated Series B |
8.00 | 09/01/2017 | 2,230,000 | 2,408,400 | ||||||||||||
Oil States International Incorporated |
6.50 | 06/01/2019 | 1,230,000 | 1,300,725 | ||||||||||||
Parker Drilling Company |
9.13 | 04/01/2018 | 460,000 | 487,600 | ||||||||||||
PHI Incorporated |
8.63 | 10/15/2018 | 2,500,000 | 2,562,500 | ||||||||||||
11,963,263 | ||||||||||||||||
|
|
|||||||||||||||
Oil, Gas & Consumable Fuels: 6.82% | ||||||||||||||||
Chesapeake Energy Corporation |
9.50 | 02/15/2015 | 2,250,000 | 2,452,500 |
The accompanying notes are an integral part of these financial statements.
12 | Wells Fargo Advantage Multi-Sector Income Fund | Portfolio of InvestmentsApril 30, 2012 (Unaudited) |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Oil, Gas & Consumable Fuels (continued) | ||||||||||||||||
Coffeyville Resources LLC 144A |
9.00 | % | 04/01/2015 | $ | 932,000 | $ | 994,910 | |||||||||
Coffeyville Resources LLC 144A |
10.88 | 04/01/2017 | 1,350,000 | 1,522,125 | ||||||||||||
Crestwood Midstream Part Company 144A |
7.75 | 04/01/2019 | 675,000 | 686,813 | ||||||||||||
Denbury Resources Incorporated |
6.38 | 08/15/2021 | 350,000 | 371,000 | ||||||||||||
Denbury Resources Incorporated |
8.25 | 02/15/2020 | 425,000 | 473,875 | ||||||||||||
El Paso Corporation |
6.50 | 04/01/2020 | 750,000 | 861,087 | ||||||||||||
El Paso Corporation |
6.50 | 09/15/2020 | 445,000 | 492,619 | ||||||||||||
El Paso Corporation |
7.00 | 06/15/2017 | 525,000 | 590,323 | ||||||||||||
El Paso Corporation |
7.25 | 06/01/2018 | 1,610,000 | 1,841,603 | ||||||||||||
El Paso Corporation |
7.42 | 02/15/2037 | 800,000 | 847,266 | ||||||||||||
El Paso Corporation |
7.80 | 08/01/2031 | 1,850,000 | 2,107,907 | ||||||||||||
Encore Acquisition Company |
9.50 | 05/01/2016 | 375,000 | 412,500 | ||||||||||||
Energy Transfer Equity LP |
7.50 | 10/15/2020 | 3,100,000 | 3,433,250 | ||||||||||||
Energy Transfer Partners LP |
5.20 | 02/01/2022 | 750,000 | 801,593 | ||||||||||||
Ferrellgas Finance Corporation |
9.13 | 10/01/2017 | 2,325,000 | 2,447,063 | ||||||||||||
Forest Oil Corporation |
7.25 | 06/15/2019 | 1,345,000 | 1,328,188 | ||||||||||||
Forest Oil Corporation |
8.50 | 02/15/2014 | 535,000 | 575,125 | ||||||||||||
Holly Corporation |
9.88 | 06/15/2017 | 1,895,000 | 2,122,400 | ||||||||||||
Inergy Holdings LP |
6.88 | 08/01/2021 | 421,000 | 425,210 | ||||||||||||
Inergy Holdings LP |
7.00 | 10/01/2018 | 500,000 | 512,500 | ||||||||||||
Kinder Morgan Energy Partners LP |
3.95 | 09/01/2022 | 750,000 | 754,787 | ||||||||||||
Nabors Industries Incorporated |
4.63 | 09/15/2021 | 750,000 | 795,739 | ||||||||||||
NGPL PipeCo LLC 144A |
7.12 | 12/15/2017 | 375,000 | 362,550 | ||||||||||||
NGPL PipeCo LLC 144A |
7.77 | 12/15/2037 | 2,300,000 | 2,070,952 | ||||||||||||
Overseas Shipholding Group |
7.50 | 02/15/2024 | 800,000 | 536,000 | ||||||||||||
Petrohawk Energy Corporation |
7.88 | 06/01/2015 | 790,000 | 829,500 | ||||||||||||
Petrohawk Energy Corporation |
10.50 | 08/01/2014 | 495,000 | 549,450 | ||||||||||||
Phillips 66 144A |
4.30 | 04/01/2022 | 625,000 | 651,461 | ||||||||||||
Pioneer Natural Resources Company |
7.50 | 01/15/2020 | 1,220,000 | 1,502,939 | ||||||||||||
Plains Exploration & Production Company |
8.63 | 10/15/2019 | 2,885,000 | 3,245,625 | ||||||||||||
Regency Energy Partners |
6.88 | 12/01/2018 | 250,000 | 265,000 | ||||||||||||
Rockies Express Pipeline 144A |
5.63 | 04/15/2020 | 400,000 | 360,000 | ||||||||||||
Rockies Express Pipeline 144A |
6.88 | 04/15/2040 | 650,000 | 542,750 | ||||||||||||
Sabine Pass LNG LP |
7.25 | 11/30/2013 | 2,265,000 | 2,372,588 | ||||||||||||
Sabine Pass LNG LP |
7.50 | 11/30/2016 | 3,250,000 | 3,485,625 | ||||||||||||
Susser Holdings LLC |
8.50 | 05/15/2016 | 975,000 | 1,067,625 | ||||||||||||
Tesoro Corporation |
9.75 | 06/01/2019 | 945,000 | 1,074,938 | ||||||||||||
Weatherford International Incorporated |
6.35 | 06/15/2017 | 650,000 | 755,360 | ||||||||||||
Western Gas Partners LP |
5.38 | 06/01/2021 | 503,000 | 548,798 | ||||||||||||
47,071,544 | ||||||||||||||||
|
|
|||||||||||||||
Financials: 14.22% |
||||||||||||||||
Capital Markets: 0.90% | ||||||||||||||||
E*TRADE Financial Corporation |
12.50 | 11/30/2017 | 4,291,000 | 4,999,015 | ||||||||||||
Oppenheimer Holdings Incorporated |
8.75 | 04/15/2018 | 1,225,000 | 1,243,375 | ||||||||||||
6,242,390 | ||||||||||||||||
|
|
|||||||||||||||
Commercial Banks: 1.20% | ||||||||||||||||
CIT Group Incorporated 144A |
4.75 | 02/15/2015 | 1,475,000 | 1,504,500 |
The accompanying notes are an integral part of these financial statements.
Portfolio of InvestmentsApril 30, 2012 (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 13 |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Commercial Banks (continued) | ||||||||||||||||
CIT Group Incorporated 144A |
5.25 | % | 04/01/2014 | $ | 750,000 | $ | 772,500 | |||||||||
CIT Group Incorporated |
5.25 | 03/15/2018 | 500,000 | 515,000 | ||||||||||||
CIT Group Incorporated 144A |
5.50 | 02/15/2019 | 1,275,000 | 1,310,063 | ||||||||||||
Emigrant Bancorp Incorporated 144A |
6.25 | 06/15/2014 | 2,925,000 | 2,661,563 | ||||||||||||
HSBC Bank USA |
6.00 | 08/09/2017 | 650,000 | 726,970 | ||||||||||||
Royal Bank of Scotland plc |
4.38 | 03/16/2016 | 750,000 | 765,017 | ||||||||||||
8,255,613 | ||||||||||||||||
|
|
|||||||||||||||
Consumer Finance: 7.55% | ||||||||||||||||
Ally Financial Incorporated |
5.50 | 02/15/2017 | 750,000 | 766,363 | ||||||||||||
Ally Financial Incorporated |
6.75 | 12/01/2014 | 1,298,000 | 1,369,390 | ||||||||||||
Ally Financial Incorporated |
6.88 | 08/28/2012 | 1,244,000 | 1,259,550 | ||||||||||||
Ally Financial Incorporated |
7.50 | 12/31/2013 | 3,620,000 | 3,864,350 | ||||||||||||
Ally Financial Incorporated |
8.30 | 02/12/2015 | 2,055,000 | 2,255,363 | ||||||||||||
American General Finance Corporation |
5.40 | 12/01/2015 | 1,625,000 | 1,389,375 | ||||||||||||
American General Finance Corporation |
5.75 | 09/15/2016 | 1,100,000 | 904,750 | ||||||||||||
American General Finance Corporation |
6.50 | 09/15/2017 | 200,000 | 162,000 | ||||||||||||
Calpine Construction Finance Corporation 144A |
7.25 | 10/15/2017 | 4,800,000 | 5,124,000 | ||||||||||||
Calpine Construction Finance Corporation 144A |
8.00 | 06/01/2016 | 1,375,000 | 1,491,875 | ||||||||||||
Clearwire Communications Finance Corporation 144A |
12.00 | 12/01/2015 | 940,000 | 867,150 | ||||||||||||
Clearwire Communications Finance Corporation 144A |
12.00 | 12/01/2015 | 1,450,000 | 1,337,625 | ||||||||||||
Ford Motor Credit Company LLC |
5.00 | 05/15/2018 | 650,000 | 702,225 | ||||||||||||
Ford Motor Credit Company LLC |
8.00 | 12/15/2016 | 250,000 | 298,561 | ||||||||||||
General Motors Financial Company Incorporated |
6.75 | 06/01/2018 | 1,150,000 | 1,224,479 | ||||||||||||
Homer City Funding LLC |
8.73 | 10/01/2026 | 1,235,276 | 1,181,233 | ||||||||||||
International Lease Finance Corporation |
6.38 | 03/25/2013 | 460,000 | 471,500 | ||||||||||||
International Lease Finance Corporation 144A |
6.75 | 09/01/2016 | 100,000 | 108,000 | ||||||||||||
International Lease Finance Corporation 144A |
7.13 | 09/01/2018 | 75,000 | 82,500 | ||||||||||||
International Lease Finance Corporation |
8.63 | 09/15/2015 | 900,000 | 996,750 | ||||||||||||
JBS USA Finance Incorporated |
11.63 | 05/01/2014 | 3,745,000 | 4,306,750 | ||||||||||||
Level 3 Financing Incorporated |
10.00 | 02/01/2018 | 2,010,000 | 2,200,950 | ||||||||||||
Local TV Finance LLC 144A ¥ |
9.25 | 06/15/2015 | 2,825,000 | 2,909,750 | ||||||||||||
Nielsen Finance LLC Company |
7.75 | 10/15/2018 | 5,100,000 | 5,635,500 | ||||||||||||
Nielsen Finance LLC Company |
11.50 | 05/01/2016 | 601,000 | 694,155 | ||||||||||||
Springleaf Finance Corporation |
6.90 | 12/15/2017 | 3,745,000 | 3,056,856 | ||||||||||||
Sprint Capital Corporation |
6.88 | 11/15/2028 | 7,885,000 | 5,894,038 | ||||||||||||
Sprint Capital Corporation |
8.75 | 03/15/2032 | 1,855,000 | 1,572,113 | ||||||||||||
52,127,151 | ||||||||||||||||
|
|
|||||||||||||||
Diversified Financial Services: 1.91% | ||||||||||||||||
Bank of America Corporation |
3.70 | 09/01/2015 | 650,000 | 654,475 | ||||||||||||
Blackstone Holdings Finance Company LLC 144A |
5.88 | 03/15/2021 | 500,000 | 523,388 | ||||||||||||
Citigroup Incorporated |
6.00 | 08/15/2017 | 650,000 | 720,252 | ||||||||||||
Discover Financial Services 144A |
5.20 | 04/27/2022 | 750,000 | 750,942 | ||||||||||||
General Electric Capital Corporation |
4.65 | 10/17/2021 | 650,000 | 706,287 | ||||||||||||
General Electric Capital Corporation |
7.63 | 12/10/2014 | 2,000,000 | 1,761,459 | ||||||||||||
Moodys Corporation |
5.50 | 09/01/2020 | 1,302,000 | 1,389,367 | ||||||||||||
Neuberger Berman Group LLC 144A |
5.63 | 03/15/2020 | 500,000 | 507,500 | ||||||||||||
Neuberger Berman Group LLC 144A |
5.88 | 03/15/2022 | 650,000 | 661,375 |
The accompanying notes are an integral part of these financial statements.
14 | Wells Fargo Advantage Multi-Sector Income Fund | Portfolio of InvestmentsApril 30, 2012 (Unaudited) |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Diversified Financial Services (continued) | ||||||||||||||||
Nuveen Investments Incorporated |
5.50 | % | 09/15/2015 | $ | 2,950,000 | $ | 2,684,500 | |||||||||
Nuveen Investments Incorporated |
10.50 | 11/15/2015 | 1,975,000 | 2,039,188 | ||||||||||||
Samson Investment Company 144A |
9.75 | 02/15/2020 | 725,000 | 756,719 | ||||||||||||
13,155,452 | ||||||||||||||||
|
|
|||||||||||||||
Insurance: 0.84% | ||||||||||||||||
Berkley Corporation |
4.63 | 03/15/2022 | 650,000 | 660,376 | ||||||||||||
Hartford Financial Services Group |
5.13 | 04/15/2022 | 650,000 | 656,118 | ||||||||||||
Hub International Holdings Incorporated 144A |
10.25 | 06/15/2015 | 3,375,000 | 3,450,938 | ||||||||||||
Prudential Covered Trust Company 144A |
3.00 | 09/30/2015 | 480,000 | 486,672 | ||||||||||||
USI Holdings Corporation 144A |
9.75 | 05/15/2015 | 525,000 | 530,906 | ||||||||||||
5,785,010 | ||||||||||||||||
|
|
|||||||||||||||
REITs: 1.82% | ||||||||||||||||
Alexandria Real Estate Company |
4.60 | 04/01/2022 | 650,000 | 652,321 | ||||||||||||
Dupont Fabros Technology Incorporated |
8.50 | 12/15/2017 | 5,560,000 | 6,129,900 | ||||||||||||
Health Care Incorporated |
5.25 | 01/15/2022 | 650,000 | 687,775 | ||||||||||||
Host Hotels & Resorts LP |
9.00 | 05/15/2017 | 235,000 | 260,850 | ||||||||||||
MPT Operating Partnership LP |
6.88 | 05/01/2021 | 775,000 | 809,875 | ||||||||||||
Omega Healthcare Investors Incorporated |
6.75 | 10/15/2022 | 1,775,000 | 1,863,750 | ||||||||||||
Ventas Incorporated |
4.25 | 03/01/2022 | 650,000 | 643,612 | ||||||||||||
Ventas Incorporated |
9.00 | 05/01/2012 | 859,000 | 859,000 | ||||||||||||
WEA Finance LLC 144A |
4.63 | 05/10/2021 | 650,000 | 673,374 | ||||||||||||
12,580,457 | ||||||||||||||||
|
|
|||||||||||||||
Health Care: 2.63% |
||||||||||||||||
Health Care Equipment & Supplies: 0.34% | ||||||||||||||||
Biomet Incorporated ¥ |
10.38 | 10/15/2017 | 540,000 | 583,875 | ||||||||||||
Boston Scientific Corporation |
6.00 | 01/15/2020 | 750,000 | 875,390 | ||||||||||||
CareFusion Corporation |
6.38 | 08/01/2019 | 750,000 | 886,718 | ||||||||||||
2,345,983 | ||||||||||||||||
|
|
|||||||||||||||
Health Care Providers & Services: 1.87% | ||||||||||||||||
Apria Healthcare Group Incorporated |
11.25 | 11/01/2014 | 590,000 | 613,600 | ||||||||||||
Aristotle Holding Incorporated 144A |
3.90 | 02/15/2022 | 665,000 | 683,897 | ||||||||||||
Aviv Healthcare Properties LP |
7.75 | 02/15/2019 | 1,025,000 | 1,066,000 | ||||||||||||
Centene Corporation |
5.75 | 06/01/2017 | 1,000,000 | 1,016,250 | ||||||||||||
Community Health Systems Incorporated |
8.88 | 07/15/2015 | 422,000 | 435,715 | ||||||||||||
Coventry Health Care Incorporated |
5.45 | 06/15/2021 | 750,000 | 846,231 | ||||||||||||
Emergency Medical Services Corporation |
8.13 | 06/01/2019 | 425,000 | 435,625 | ||||||||||||
HCA Incorporated |
5.88 | 03/15/2022 | 425,000 | 431,906 | ||||||||||||
HCA Incorporated |
6.50 | 02/15/2020 | 1,875,000 | 2,006,250 | ||||||||||||
HCA Incorporated |
7.50 | 11/15/2095 | 800,000 | 629,000 | ||||||||||||
HCA Incorporated |
8.50 | 04/15/2019 | 375,000 | 420,703 | ||||||||||||
Health Management Associates Incorporated |
6.13 | 04/15/2016 | 175,000 | 183,750 | ||||||||||||
HealthSouth Corporation |
7.25 | 10/01/2018 | 400,000 | 424,000 | ||||||||||||
HealthSouth Corporation |
7.75 | 09/15/2022 | 400,000 | 431,000 | ||||||||||||
Humana Incorporated |
7.20 | 06/15/2018 | 750,000 | 905,424 |
The accompanying notes are an integral part of these financial statements.
Portfolio of InvestmentsApril 30, 2012 (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 15 |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Health Care Providers & Services (continued) | ||||||||||||||||
MPT Operating Partnership LP |
6.38 | % | 02/15/2022 | $ | 475,000 | $ | 477,375 | |||||||||
PSS World Medical Incorporated 144A |
6.38 | 03/01/2022 | 250,000 | 256,250 | ||||||||||||
Sabra Health Care LP |
8.13 | 11/01/2018 | 1,450,000 | 1,542,438 | ||||||||||||
Tenet Healthcare Corporation |
10.00 | 05/01/2018 | 75,000 | 86,625 | ||||||||||||
12,892,039 | ||||||||||||||||
|
|
|||||||||||||||
Life Sciences Tools & Services: 0.13% | ||||||||||||||||
Life Technologies Corporation |
6.00 | 03/01/2020 | 750,000 | 871,629 | ||||||||||||
|
|
|||||||||||||||
Pharmaceuticals: 0.29% | ||||||||||||||||
Mylan Incorporated 144A |
6.00 | 11/15/2018 | 725,000 | 761,250 | ||||||||||||
Mylan Incorporated 144A |
7.63 | 07/15/2017 | 375,000 | 415,313 | ||||||||||||
Mylan Incorporated 144A |
7.88 | 07/15/2020 | 775,000 | 868,000 | ||||||||||||
2,044,563 | ||||||||||||||||
|
|
|||||||||||||||
Industrials: 2.85% |
||||||||||||||||
Aerospace & Defense: 0.82% | ||||||||||||||||
Alliant Techsystems Incorporated |
6.75 | 04/01/2016 | 1,980,000 | 2,027,025 | ||||||||||||
GeoEye Incorporated |
9.63 | 10/01/2015 | 485,000 | 531,075 | ||||||||||||
Hexcel Corporation |
6.75 | 02/01/2015 | 480,000 | 484,800 | ||||||||||||
L-3 Communications Corporation Incorporated |
4.95 | 02/15/2021 | 750,000 | 802,118 | ||||||||||||
L-3 Communications Holdings Incorporated |
6.38 | 10/15/2015 | 1,379,000 | 1,411,751 | ||||||||||||
TransDigm Group Incorporated |
7.75 | 12/15/2018 | 375,000 | 408,750 | ||||||||||||
5,665,519 | ||||||||||||||||
|
|
|||||||||||||||
Commercial Services & Supplies: 1.29% | ||||||||||||||||
Casella Waste Systems Incorporated |
11.00 | 07/15/2014 | 1,945,000 | 2,090,875 | ||||||||||||
Corrections Corporation of America |
7.75 | 06/01/2017 | 1,270,000 | 1,377,950 | ||||||||||||
Covanta Energy Corporation |
6.38 | 10/01/2022 | 225,000 | 231,324 | ||||||||||||
Crown Cork & Seal Company Incorporated |
7.50 | 12/15/2096 | 600,000 | 508,500 | ||||||||||||
Geo Group Incorporated |
7.75 | 10/15/2017 | 1,450,000 | 1,566,000 | ||||||||||||
Interface Incorporated |
7.63 | 12/01/2018 | 125,000 | 135,000 | ||||||||||||
Iron Mountain Incorporated |
6.75 | 10/15/2018 | 250,000 | 330,925 | ||||||||||||
Iron Mountain Incorporated |
8.38 | 08/15/2021 | 1,385,000 | 1,509,650 | ||||||||||||
KAR Holdings Incorporated ± |
4.55 | 05/01/2014 | 1,150,000 | 1,147,125 | ||||||||||||
8,897,349 | ||||||||||||||||
|
|
|||||||||||||||
Machinery: 0.63% | ||||||||||||||||
Columbus McKinnon Corporation |
7.88 | 02/01/2019 | 725,000 | 768,500 | ||||||||||||
CPM Holdings Incorporated |
10.63 | 09/01/2014 | 1,315,000 | 1,420,200 | ||||||||||||
Titan International Incorporated |
7.88 | 10/01/2017 | 375,000 | 397,500 | ||||||||||||
UR Financing Escrow Corporation 144A |
5.75 | 07/15/2018 | 1,685,000 | 1,739,763 | ||||||||||||
4,325,963 | ||||||||||||||||
|
|
|||||||||||||||
Professional Services: 0.08% | ||||||||||||||||
Verisk Analytics Incorporated |
5.80 | 05/01/2021 | 530,000 | 576,293 | ||||||||||||
|
|
|||||||||||||||
Road & Rail: 0.03% | ||||||||||||||||
RailAmerica Incorporated |
9.25 | 07/01/2017 | 166,000 | 173,885 | ||||||||||||
|
|
The accompanying notes are an integral part of these financial statements.
16 | Wells Fargo Advantage Multi-Sector Income Fund | Portfolio of InvestmentsApril 30, 2012 (Unaudited) |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Information Technology: 4.57% |
||||||||||||||||
Communications Equipment: 0.33% | ||||||||||||||||
Allbritton Communications Company |
8.00 | % | 05/15/2018 | $ | 1,275,000 | $ | 1,357,875 | |||||||||
Lucent Technologies Incorporated |
6.45 | 03/15/2029 | 1,285,000 | 941,263 | ||||||||||||
2,299,138 | ||||||||||||||||
|
|
|||||||||||||||
Computers & Peripherals: 0.35% | ||||||||||||||||
Hewlett Packard Company |
4.05 | 09/15/2022 | 750,000 | 756,106 | ||||||||||||
Seagate Technology HDD Holdings |
6.88 | 05/01/2020 | 300,000 | 321,750 | ||||||||||||
Seagate Technology HDD Holdings |
7.75 | 12/15/2018 | 1,225,000 | 1,350,563 | ||||||||||||
2,428,419 | ||||||||||||||||
|
|
|||||||||||||||
Electronic Equipment, Instruments & Components: 1.63% | ||||||||||||||||
CDW Financial Corporation |
12.54 | 10/12/2017 | 725,000 | 790,250 | ||||||||||||
GCI Incorporated |
6.75 | 06/01/2021 | 575,000 | 580,750 | ||||||||||||
GCI Incorporated |
8.63 | 11/15/2019 | 2,125,000 | 2,337,500 | ||||||||||||
Jabil Circuit Incorporated |
8.25 | 03/15/2018 | 5,275,000 | 6,145,375 | ||||||||||||
Viasystem Group Incorporated 144A |
12.00 | 01/15/2015 | 1,285,000 | 1,384,588 | ||||||||||||
11,238,463 | ||||||||||||||||
|
|
|||||||||||||||
Internet Software & Services: 0.19% | ||||||||||||||||
Equinix Incorporated |
7.00 | 07/15/2021 | 75,000 | 81,938 | ||||||||||||
Equinix Incorporated |
8.13 | 03/01/2018 | 1,085,000 | 1,198,925 | ||||||||||||
1,280,863 | ||||||||||||||||
|
|
|||||||||||||||
IT Services: 1.83% | ||||||||||||||||
Fidelity National Information Services Incorporated 144A |
5.00 | 03/15/2022 | 275,000 | 275,000 | ||||||||||||
Fidelity National Information Services Incorporated |
7.63 | 07/15/2017 | 225,000 | 246,938 | ||||||||||||
Fidelity National Information Services Incorporated 144A |
7.63 | 07/15/2017 | 175,000 | 191,188 | ||||||||||||
Fidelity National Information Services Incorporated |
7.88 | 07/15/2020 | 1,000,000 | 1,120,000 | ||||||||||||
First Data Corporation 144A |
7.38 | 06/15/2019 | 625,000 | 639,063 | ||||||||||||
First Data Corporation |
11.25 | 03/31/2016 | 4,550,000 | 4,186,000 | ||||||||||||
SunGard Data Systems Incorporated |
7.38 | 11/15/2018 | 525,000 | 560,438 | ||||||||||||
SunGard Data Systems Incorporated |
7.63 | 11/15/2020 | 250,000 | 266,563 | ||||||||||||
SunGard Data Systems Incorporated |
10.25 | 08/15/2015 | 3,455,000 | 3,580,244 | ||||||||||||
TW Telecommunications Holdings Incorporated |
8.00 | 03/01/2018 | 675,000 | 739,125 | ||||||||||||
Unisys Corporation |
12.50 | 01/15/2016 | 338,000 | 359,125 | ||||||||||||
Unisys Corporation 144A |
12.75 | 10/15/2014 | 434,000 | 481,198 | ||||||||||||
12,644,882 | ||||||||||||||||
|
|
|||||||||||||||
Software: 0.24% | ||||||||||||||||
Audatex North American Incorporated 144A |
6.75 | 06/15/2018 | 525,000 | 549,938 | ||||||||||||
Audatex North American Incorporated 144A |
6.75 | 06/15/2018 | 225,000 | 235,688 | ||||||||||||
CA Incorporated |
5.38 | 12/01/2019 | 750,000 | 835,846 | ||||||||||||
1,621,472 | ||||||||||||||||
|
|
|||||||||||||||
Materials: 1.03% |
||||||||||||||||
Chemicals: 0.43% | ||||||||||||||||
Dow Chemical Company |
4.13 | 11/15/2021 | 750,000 | 789,765 |
The accompanying notes are an integral part of these financial statements.
Portfolio of InvestmentsApril 30, 2012 (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 17 |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Chemicals (continued) | ||||||||||||||||
Huntsman International LLC |
5.50 | % | 06/30/2016 | $ | 1,260,000 | $ | 1,261,575 | |||||||||
Solutia Incorporated |
7.88 | 03/15/2020 | 695,000 | 811,413 | ||||||||||||
Solutia Incorporated |
8.75 | 11/01/2017 | 50,000 | 56,500 | ||||||||||||
2,919,253 | ||||||||||||||||
|
|
|||||||||||||||
Containers & Packaging: 0.10% | ||||||||||||||||
Crown Americas LLC |
7.63 | 05/15/2017 | 450,000 | 488,250 | ||||||||||||
Owens Brockway Glass Container Incorporated |
7.38 | 05/15/2016 | 175,000 | 197,750 | ||||||||||||
686,000 | ||||||||||||||||
|
|
|||||||||||||||
Metals & Mining: 0.20% | ||||||||||||||||
Alcoa Incorporated |
5.40 | 04/15/2021 | 750,000 | 787,810 | ||||||||||||
Freeport-McMoRan Copper & Gold Incorporated |
3.55 | 03/01/2022 | 600,000 | 592,460 | ||||||||||||
Indalex Holdings Corporation (s) |
11.50 | 02/01/2014 | 3,170,000 | 11,888 | ||||||||||||
1,392,158 | ||||||||||||||||
|
|
|||||||||||||||
Paper & Forest Products: 0.30% | ||||||||||||||||
Clearwater Paper Corporation |
10.63 | 06/15/2016 | 545,000 | 613,125 | ||||||||||||
Georgia-Pacific Corporation |
8.88 | 05/15/2031 | 1,080,000 | 1,474,046 | ||||||||||||
2,087,171 | ||||||||||||||||
|
|
|||||||||||||||
Telecommunication Services: 5.35% |
||||||||||||||||
Diversified Telecommunication Services: 2.09% | ||||||||||||||||
Avaya Incorporated |
9.75 | 11/01/2015 | 575,000 | 569,969 | ||||||||||||
CenturyLink Incorporated |
5.80 | 03/15/2022 | 600,000 | 594,489 | ||||||||||||
Citizens Communications Company |
7.88 | 01/15/2027 | 1,805,000 | 1,606,450 | ||||||||||||
Frontier Communications Corporation |
8.13 | 10/01/2018 | 845,000 | 887,250 | ||||||||||||
Frontier Communications Corporation |
8.25 | 05/01/2014 | 200,000 | 217,500 | ||||||||||||
Frontier Communications Corporation |
8.25 | 04/15/2017 | 1,040,000 | 1,120,600 | ||||||||||||
Frontier Communications Corporation |
8.50 | 04/15/2020 | 525,000 | 546,000 | ||||||||||||
Intelsat Jackson Holdings Limited |
8.50 | 11/01/2019 | 850,000 | 937,125 | ||||||||||||
Intelsat Jackson Holdings Limited |
9.50 | 06/15/2016 | 725,000 | 754,906 | ||||||||||||
Qtel International Finance Limited |
5.00 | 10/19/2025 | 500,000 | 511,250 | ||||||||||||
Qwest Corporation |
7.13 | 11/15/2043 | 795,000 | 795,994 | ||||||||||||
Qwest Corporation |
7.25 | 09/15/2025 | 1,040,000 | 1,149,200 | ||||||||||||
Qwest Corporation |
7.50 | 06/15/2023 | 1,370,000 | 1,381,988 | ||||||||||||
Qwest Corporation |
7.63 | 08/03/2021 | 230,000 | 245,969 | ||||||||||||
SBA Telecommunications Incorporated |
8.00 | 08/15/2016 | 455,000 | 487,419 | ||||||||||||
SBA Telecommunications Incorporated |
8.25 | 08/15/2019 | 65,000 | 71,663 | ||||||||||||
Windstream Corporation |
7.88 | 11/01/2017 | 2,330,000 | 2,574,650 | ||||||||||||
14,452,422 | ||||||||||||||||
|
|
|||||||||||||||
Wireless Telecommunication Services: 3.26% | ||||||||||||||||
American Tower Corporation |
5.90 | 11/01/2021 | 650,000 | 730,209 | ||||||||||||
CC Holdings LLC 144A |
7.75 | 05/01/2017 | 325,000 | 354,250 | ||||||||||||
CC Holdings LLC |
8.13 | 04/30/2020 | 450,000 | 504,000 | ||||||||||||
Cricket Communications Incorporated |
7.75 | 05/15/2016 | 1,705,000 | 1,794,513 | ||||||||||||
Cricket Communications Incorporated |
7.75 | 10/15/2020 | 1,550,000 | 1,453,125 |
The accompanying notes are an integral part of these financial statements.
18 | Wells Fargo Advantage Multi-Sector Income Fund | Portfolio of InvestmentsApril 30, 2012 (Unaudited) |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Wireless Telecommunication Services (continued) | ||||||||||||||||
Crown Castle International Corporation |
7.13 | % | 11/01/2019 | $ | 75,000 | $ | 82,125 | |||||||||
Crown Castle International Corporation |
9.00 | 01/15/2015 | 325,000 | 359,125 | ||||||||||||
Crown Castle Towers LLC 144A |
6.11 | 01/15/2040 | 750,000 | 856,104 | ||||||||||||
iPCS Incorporated ¥ |
3.80 | 05/01/2014 | 1,357,019 | 1,295,953 | ||||||||||||
MetroPCS Communications Incorporated |
6.63 | 11/15/2020 | 2,775,000 | 2,670,938 | ||||||||||||
MetroPCS Communications Incorporated |
7.88 | 09/01/2018 | 775,000 | 794,375 | ||||||||||||
Sprint Nextel Corporation 144A |
9.00 | 11/15/2018 | 325,000 | 357,906 | ||||||||||||
Sprint Nextel Corporation 144A |
11.50 | 11/15/2021 | 625,000 | 664,063 | ||||||||||||
Sprint Nextel Corporation Series D |
7.38 | 08/01/2015 | 3,260,000 | 3,162,200 | ||||||||||||
Sprint Nextel Corporation Series F |
5.95 | 03/15/2014 | 2,335,000 | 2,332,081 | ||||||||||||
Syniverse Holdings Incorporated |
9.13 | 01/15/2019 | 4,575,000 | 5,072,531 | ||||||||||||
22,483,498 | ||||||||||||||||
|
|
|||||||||||||||
Utilities: 4.04% |
||||||||||||||||
Electric Utilities: 1.89% | ||||||||||||||||
Aquila Incorporated Step Bond |
11.88 | 07/01/2012 | 6,545,000 | 6,660,074 | ||||||||||||
Dolphin Subsidiary II Incorporated 144A |
7.25 | 10/15/2021 | 2,400,000 | 2,664,000 | ||||||||||||
Great Plains Energy Incorporated |
4.85 | 06/01/2021 | 750,000 | 813,623 | ||||||||||||
IPALCO Enterprises Incorporated |
5.00 | 05/01/2018 | 900,000 | 895,500 | ||||||||||||
Otter Tail Corporation |
9.00 | 12/15/2016 | 1,835,000 | 1,988,681 | ||||||||||||
PNM Resources Incorporated |
9.25 | 05/15/2015 | 9,000 | 10,384 | ||||||||||||
13,032,262 | ||||||||||||||||
|
|
|||||||||||||||
Gas Utilities: 0.37% | ||||||||||||||||
AmeriGas Finance LLC |
6.75 | 05/20/2020 | 1,775,000 | 1,814,938 | ||||||||||||
AmeriGas Finance LLC |
7.00 | 05/20/2022 | 425,000 | 433,500 | ||||||||||||
Suburban Propane Partners LP |
7.38 | 03/15/2020 | 275,000 | 290,813 | ||||||||||||
2,539,251 | ||||||||||||||||
|
|
|||||||||||||||
Independent Power Producers & Energy Traders: 1.57% | ||||||||||||||||
Mirant Mid-Atlantic LLC Series C |
10.06 | 12/30/2028 | 3,614,632 | 3,686,925 | ||||||||||||
NRG Energy Incorporated |
7.38 | 01/15/2017 | 3,475,000 | 3,609,656 | ||||||||||||
NRG Energy Incorporated |
8.50 | 06/15/2019 | 1,615,000 | 1,647,300 | ||||||||||||
Reliant Energy Incorporated |
7.63 | 06/15/2014 | 450,000 | 459,000 | ||||||||||||
Reliant Energy Incorporated |
9.24 | 07/02/2017 | 1,071,656 | 1,050,223 | ||||||||||||
Reliant Energy Incorporated |
9.68 | 07/02/2026 | 410,000 | 389,500 | ||||||||||||
10,842,604 | ||||||||||||||||
|
|
|||||||||||||||
Multi-Utilities: 0.21% | ||||||||||||||||
Ameren Illinois Company |
9.75 | 11/15/2018 | 500,000 | 686,860 | ||||||||||||
CMS Energy Corporation |
5.05 | 03/15/2022 | 750,000 | 762,964 | ||||||||||||
1,449,824 | ||||||||||||||||
|
|
|||||||||||||||
Total Corporate Bonds and Notes (Cost $363,589,295) |
|
382,851,650 | ||||||||||||||
|
|
The accompanying notes are an integral part of these financial statements.
Portfolio of InvestmentsApril 30, 2012 (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 19 |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Foreign Corporate Bonds and Notes @: 5.29% |
||||||||||||||||
Consumer Discretionary: 0.49% |
||||||||||||||||
Automobiles: 0.07% | ||||||||||||||||
Aston Martin Capital Limited (GBP) |
9.25 | % | 07/15/2018 | 400,000 | $ | 525,820 | ||||||||||
|
|
|||||||||||||||
Hotels, Restaurants & Leisure: 0.24% | ||||||||||||||||
Casino Guichard Perrachon SA (EUR) |
4.73 | 05/26/2021 | 900,000 | 1,227,628 | ||||||||||||
ODEON & UCI Cinemas Group (GBP) |
9.00 | 08/01/2018 | 300,000 | 477,133 | ||||||||||||
1,704,761 | ||||||||||||||||
|
|
|||||||||||||||
Media: 0.18% | ||||||||||||||||
UPC Holding BV (EUR) |
9.63 | 12/01/2019 | 470,000 | 665,689 | ||||||||||||
Ziggo Bond Company BV (EUR) 144A(i) |
8.00 | 05/15/2018 | 200,000 | 285,257 | ||||||||||||
Ziggo Bond Company BV (EUR) |
8.00 | 05/15/2018 | 200,000 | 285,257 | ||||||||||||
1,236,203 | ||||||||||||||||
|
|
|||||||||||||||
Consumer Staples: 0.10% |
||||||||||||||||
Food & Staples Retailing: 0.10% | ||||||||||||||||
Foodcorp Limited (EUR) |
8.75 | 03/01/2018 | 520,000 | 688,324 | ||||||||||||
|
|
|||||||||||||||
Financials: 3.94% |
||||||||||||||||
Commercial Banks: 2.91% | ||||||||||||||||
Banco De Brasil (EUR) |
4.50 | 01/20/2016 | 600,000 | 832,025 | ||||||||||||
Eurofima (AUD) |
6.25 | 12/28/2018 | 2,450,000 | 2,642,755 | ||||||||||||
European Investment Bank (AUD) |
6.13 | 01/23/2017 | 6,930,000 | 7,492,494 | ||||||||||||
Instituto de Credito Oficial (EUR) |
4.38 | 05/23/2012 | 1,800,000 | 2,385,424 | ||||||||||||
International Bank for Reconstruction & Development (AUD) |
5.75 | 10/01/2020 | 950,000 | 1,068,101 | ||||||||||||
KfW Bankengruppe (AUD) |
6.25 | 12/04/2019 | 1,225,000 | 1,380,570 | ||||||||||||
KfW Bankengruppe (NZD) |
6.38 | 02/17/2015 | 4,819,000 | 4,245,524 | ||||||||||||
20,046,893 | ||||||||||||||||
|
|
|||||||||||||||
Consumer Finance: 0.08% | ||||||||||||||||
Fiat Industrial SpA (EUR) |
6.25 | 03/09/2018 | 400,000 | 530,147 | ||||||||||||
|
|
|||||||||||||||
Diversified Financial Services: 0.20% | ||||||||||||||||
Voto-Votorantim Limited (EUR) |
5.25 | 04/28/2017 | 1,000,000 | 1,405,108 | ||||||||||||
|
|
|||||||||||||||
Thrifts & Mortgage Finance: 0.75% | ||||||||||||||||
Dexia Kommunalbank AG (EUR) |
3.50 | 06/05/2014 | 3,100,000 | 4,235,931 | ||||||||||||
Nationwide Building Society (EUR) |
3.75 | 01/20/2015 | 700,000 | 959,094 | ||||||||||||
5,195,025 | ||||||||||||||||
|
|
|||||||||||||||
Industrials: 0.36% |
||||||||||||||||
Building Products: 0.07% | ||||||||||||||||
Heidelbergcement AG (EUR) |
8.50 | 10/31/2019 | 330,000 | 486,051 | ||||||||||||
|
|
|||||||||||||||
Trading Companies & Distributors: 0.08% | ||||||||||||||||
Rexel SA (EUR) |
7.00 | 12/17/2018 | 200,000 | 277,315 |
The accompanying notes are an integral part of these financial statements.
20 | Wells Fargo Advantage Multi-Sector Income Fund | Portfolio of InvestmentsApril 30, 2012 (Unaudited) |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Trading Companies & Distributors (continued) | ||||||||||||||||
Rexel SA (EUR) |
8.25 | % | 12/15/2016 | 200,000 | $ | 285,919 | ||||||||||
563,234 | ||||||||||||||||
|
|
|||||||||||||||
Transportation Infrastructure: 0.21% | ||||||||||||||||
BAA Funding Limited (EUR) |
4.60 | 02/15/2018 | 1,000,000 | 1,409,754 | ||||||||||||
|
|
|||||||||||||||
Materials: 0.18% |
||||||||||||||||
Metals & Mining: 0.10% | ||||||||||||||||
New World Resources NV (EUR) |
7.38 | 05/15/2015 | 500,000 | 661,850 | ||||||||||||
|
|
|||||||||||||||
Paper & Forest Products: 0.08% | ||||||||||||||||
Smurfit Kappa Funding plc (EUR) |
7.25 | 11/15/2017 | 400,000 | 561,249 | ||||||||||||
|
|
|||||||||||||||
Telecommunication Services: 0.14% |
||||||||||||||||
Diversified Telecommunication Services: 0.14% | ||||||||||||||||
Telefonica Emisiones Company (EUR) |
4.69 | 11/11/2019 | 300,000 | 388,359 | ||||||||||||
Virgin Media Finance plc (GBP) |
8.88 | 10/15/2019 | 300,000 | 545,294 | ||||||||||||
933,653 | ||||||||||||||||
|
|
|||||||||||||||
Utilities: 0.08% |
||||||||||||||||
Water Utilities: 0.08% | ||||||||||||||||
Zinc Capital SA (EUR) |
8.88 | 05/15/2018 | 500,000 | 575,810 | ||||||||||||
|
|
|||||||||||||||
Total Foreign Corporate Bonds and Notes (Cost $33,864,147) |
36,523,882 | |||||||||||||||
|
|
|||||||||||||||
Foreign Government Bonds @: 27.14% | ||||||||||||||||
Australia Series 124 (AUD) |
5.75 | 05/15/2021 | 2,750,000 | 3,341,356 | ||||||||||||
Australia Series 22 (AUD) |
6.00 | 07/21/2022 | 4,000,000 | 4,486,678 | ||||||||||||
Brazil (BRL) |
12.50 | 01/05/2016 | 26,000,000 | 16,368,072 | ||||||||||||
Brazil (BRL) |
12.50 | 01/05/2022 | 19,500,000 | 13,401,359 | ||||||||||||
Chile (CLP) |
5.50 | 08/05/2020 | 1,700,000,000 | 3,645,661 | ||||||||||||
Colombia (COP) |
7.75 | 04/14/2021 | 15,000,000,000 | 10,448,456 | ||||||||||||
Hungary (HUF) ¤ |
0.00 | 05/02/2012 | 1,220,000,000 | 5,631,220 | ||||||||||||
Korea (KRW) |
5.25 | 09/10/2015 | 1,850,000,000 | 1,724,687 | ||||||||||||
Korea (KRW) |
5.25 | 03/10/2027 | 2,830,000,000 | 2,884,355 | ||||||||||||
Malaysia (MYR) |
4.26 | 09/15/2016 | 24,000,000 | 8,245,095 | ||||||||||||
Mexico (MXN) |
7.25 | 12/15/2016 | 197,500,000 | 16,414,290 | ||||||||||||
Mexico (MXN) |
8.50 | 11/18/2038 | 166,900,000 | 14,423,618 | ||||||||||||
New Zealand (NZD) |
6.00 | 12/15/2017 | 6,705,000 | 6,228,153 | ||||||||||||
Peru (PEN) |
7.84 | 08/12/2020 | 20,000,000 | 8,939,860 | ||||||||||||
Poland (PLN) |
4.75 | 10/25/2016 | 25,500,000 | 8,043,098 | ||||||||||||
Poland (PLN) |
5.25 | 10/25/2020 | 59,000,000 | 18,613,262 | ||||||||||||
Queensland Treasury (AUD) |
6.00 | 03/01/2022 | 3,600,000 | 4,174,285 | ||||||||||||
Russia (RUB) |
7.85 | 03/10/2018 | 455,000,000 | 16,150,593 | ||||||||||||
South Africa (ZAR) |
8.00 | 12/21/2018 | 55,000,000 | 7,332,296 | ||||||||||||
South Africa (ZAR) |
8.25 | 09/15/2017 | 98,200,000 | 13,331,506 | ||||||||||||
South Africa (ZAR) |
8.75 | 12/21/2014 | 25,000,000 | 3,442,853 | ||||||||||||
Total Foreign Government Bonds (Cost $181,555,074) |
187,270,753 | |||||||||||||||
|
|
The accompanying notes are an integral part of these financial statements.
Portfolio of InvestmentsApril 30, 2012 (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 21 |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Non-Agency Mortgage Backed Securities: 3.31% | ||||||||||||||||
American Home Mortgage Assets Series 2006-2 Class 1A1 ± |
1.12 | 09/25/2046 | $ | 4,143,591 | $ | 2,221,968 | ||||||||||
Banc of America Commercial Mortgage Incorporated Series 2006-03 Class AM ± |
6.05 | 07/10/2044 | 1,340,000 | 1,282,596 | ||||||||||||
Bear Stearns Asset Backed Securities Series 2006 Class 1A2 ± |
0.46 | 12/25/2035 | 354,467 | 342,477 | ||||||||||||
Carrington Mortgage Loan Trust Series 2005-FRE1 Class A5 ± |
0.52 | 12/25/2035 | 100,000 | 96,515 | ||||||||||||
Centex Home Equity Series 2002-A Class AF6 |
5.54 | 01/25/2032 | 695,384 | 700,787 | ||||||||||||
Centex Home Equity Series 2002-D Class AF6 ± |
4.66 | 12/25/2032 | 218,269 | 216,040 | ||||||||||||
Centex Home Equity Series 2004-B Class AF6 |
4.19 | 03/25/2034 | 305,000 | 299,878 | ||||||||||||
Citigroup Commercial Mortgage Series 2006 Class C4 ± |
5.92 | 03/15/2049 | 680,000 | 731,585 | ||||||||||||
Citigroup Commercial MortgageSeries 2006 Class C5 |
5.46 | 10/15/2049 | 325,000 | 345,521 | ||||||||||||
Countrywide Asset Backed Certificates Series 2007-7 Class 2A1 ± |
0.32 | 10/25/2047 | 405,978 | 402,866 | ||||||||||||
Equity One Asset Backed Securities Series 2004-2 Class AF4 ± |
4.62 | 07/25/2034 | 423,501 | 423,897 | ||||||||||||
First Franklin Mortgage Loan Assets Series 2005-FT9 Class A3 ± |
0.52 | 10/25/2035 | 289,692 | 284,633 | ||||||||||||
Fremont Home Loan Trust Series 2006-2 Class 2A2 ± |
0.35 | 02/25/2036 | 78,293 | 77,975 | ||||||||||||
Greenwich Capital Commercial Funding Corporation Series 2006-GG7 Class AM ± |
6.08 | 07/10/2038 | 1,820,000 | 1,882,148 | ||||||||||||
Greenwich Capital Commercial Funding Corporation Series 2007-GG11 Class A4 |
5.74 | 12/10/2049 | 475,000 | 528,844 | ||||||||||||
GS Mortgage Securities Trust Series 2007-GG10 Class A4 ± |
5.98 | 08/10/2045 | 1,000,000 | 1,110,600 | ||||||||||||
GSMPS Mortgage Loan Trust Series 2006-1 Class A1 ±144A |
0.54 | 03/25/2035 | 186,925 | 152,866 | ||||||||||||
JPMorgan Mortgage Trust Series 2005-A3 Class 11A2 ± |
4.48 | 06/25/2035 | 575,000 | 574,924 | ||||||||||||
JPMorgan Mortgage Trust Series 2005-A5 Class 3A2 ± |
5.08 | 08/25/2035 | 805,625 | 787,138 | ||||||||||||
JPMorgan Mortgage Trust Series 2009-7 Class 2A1 ±144A |
6.00 | 02/27/2037 | 123,267 | 124,995 | ||||||||||||
JPMorgan Mortgage Trust Series 2009-7 Class 5A1 ±144A |
6.00 | 02/27/2037 | 697,439 | 708,482 | ||||||||||||
Lehman XS Trust Series 2006-18N Class A5A ± |
0.41 | 12/25/2036 | 3,571,816 | 1,479,168 | ||||||||||||
MASTR Alternative Loans Trust Series 2005-1 Class 5A1 |
5.50 | 01/25/2020 | 156,201 | 159,949 | ||||||||||||
Merrill Lynch Countrywide Commercial Mortgage Trust Series 2006-4 Class AM ± |
5.20 | 12/12/2049 | 340,000 | 331,768 | ||||||||||||
Merrill Lynch Countrywide Commercial Mortgage Trust Series 2007-7 Class A4 ± |
5.81 | 06/12/2050 | 470,000 | 508,073 | ||||||||||||
Merrill Lynch Countrywide Commercial Mortgage Trust Series 2007-9 Class A4 |
5.70 | 09/12/2049 | 829,000 | 909,716 | ||||||||||||
Merrill Lynch Mortgage Trust Series 2005-A8 Class A1B3 ± |
5.25 | 08/25/2036 | 120,000 | 122,847 | ||||||||||||
Merrill Lynch Mortgage Trust Series 2006-C1 Class AM ± |
5.85 | 05/12/2039 | 565,000 | 602,345 | ||||||||||||
Morgan Stanley Capital I Series 2005-HQ6 Class A4B |
5.04 | 08/13/2042 | 650,000 | 683,400 | ||||||||||||
Morgan Stanley Capital I Trust Series 2006-IQ12 Class AM |
5.37 | 12/15/2043 | 500,000 | 512,283 | ||||||||||||
Morgan Stanley Dean Witter Capital I Series 2006-HQ8 Class AM ± |
5.65 | 03/12/2044 | 800,000 | 856,251 | ||||||||||||
RAAC Series 2005-SP2 Class 1A3 ± |
0.64 | 05/25/2044 | 387,250 | 381,191 | ||||||||||||
Residential Asset Mortgage Products Incorporated Series 2006-EFC1 Class A2 ± |
0.44 | 02/25/2036 | 443,672 | 426,210 | ||||||||||||
Residential Asset Securities Series 2004-KS3 Class AI4 ± |
3.77 | 01/25/2032 | 422,706 | 419,815 | ||||||||||||
Saxon Asset Securities Trust Series 2002-1 Class AF5 ± |
6.76 | 12/25/2030 | 218,154 | 208,763 | ||||||||||||
Soundview Home Equity Loan Trust Series 2005-OPT2 Class A5 ± |
0.61 | 08/25/2035 | 353,058 | 349,812 | ||||||||||||
Structured Asset Securities Corporation Series 2002-9 Class A2 ± |
0.54 | 10/25/2027 | 163,632 | 150,810 | ||||||||||||
Structured Asset Securities Corporation Series 2005 Class 1A7 ±144A |
0.48 | 02/25/2035 | 125,210 | 124,172 | ||||||||||||
Wachovia Bank Commercial Mortgage Trust Series 2006-C23 Class AM ± |
5.47 | 01/15/2045 | 1,220,000 | 1,305,644 | ||||||||||||
Total Non-Agency Mortgage Backed Securities (Cost $23,296,013) |
22,828,952 | |||||||||||||||
|
|
The accompanying notes are an integral part of these financial statements.
22 | Wells Fargo Advantage Multi-Sector Income Fund | Portfolio of InvestmentsApril 30, 2012 (Unaudited) |
Security Name | Dividend Yield | Shares | Value | |||||||||||||
Preferred Stocks: 0.09% |
||||||||||||||||
Financials: 0.09% |
||||||||||||||||
Diversified Financial Services: 0.09% | ||||||||||||||||
Ally Financial Incorporated ± |
8.13 | % | 27,000 | $ | 646,650 | |||||||||||
|
|
|||||||||||||||
Total Preferred Stocks (Cost $675,000) |
646,650 | |||||||||||||||
|
|
|||||||||||||||
Interest Rate | Maturity Date | Principal | ||||||||||||||
Term Loans: 20.09% | ||||||||||||||||
Advantage Sales & Marketing LLC |
9.25 | % | 06/18/2018 | $ | 475,000 | 474,207 | ||||||||||
Allison Transmission Incorporated |
2.74 | 08/07/2014 | 3,358,937 | 3,348,222 | ||||||||||||
Ameristar Casinos Incorporated |
4.00 | 04/13/2018 | 1,009,997 | 1,013,310 | ||||||||||||
Atlantic Broadband Finance LLC |
5.25 | 04/03/2019 | 1,850,000 | 1,856,938 | ||||||||||||
B&G Foods Incorporated |
4.50 | 11/18/2018 | 773,063 | 778,860 | ||||||||||||
Barrington Broadcasting Group |
7.50 | 06/08/2017 | 3,747,162 | 3,768,259 | ||||||||||||
Capital Automotive LP |
5.25 | 03/10/2017 | 3,733,803 | 3,717,487 | ||||||||||||
CCC Information Services Incorporated |
5.50 | 11/11/2015 | 192,872 | 193,292 | ||||||||||||
CCM Merger Incorporated |
6.00 | 03/01/2017 | 4,222,936 | 4,231,720 | ||||||||||||
Charter Communications |
4.00 | 04/26/2019 | 1,875,000 | 1,867,706 | ||||||||||||
Coinmach Corporation |
3.24 | 11/20/2014 | 3,321,733 | 3,078,151 | ||||||||||||
Covanta Energy Holdings |
4.00 | 03/23/2019 | 2,600,000 | 2,598,700 | ||||||||||||
Crown Castle International Corporation |
4.00 | 01/25/2019 | 6,633,375 | 6,634,105 | ||||||||||||
DineEquity Incorporated |
4.25 | 10/19/2017 | 1,836,459 | 1,839,434 | ||||||||||||
Dunkin Brands Incorporated |
4.00 | 11/23/2017 | 3,190,718 | 3,194,388 | ||||||||||||
Energy Transfer Equity LP |
3.75 | 03/21/2017 | 2,650,000 | 2,618,121 | ||||||||||||
Entercom Communication LLC |
6.28 | 11/30/2018 | 267,667 | 269,340 | ||||||||||||
Fairpoint Communications Incorporated |
6.50 | 01/22/2016 | 3,523,399 | 2,926,923 | ||||||||||||
Federal Mogul Corporation |
2.18 | 12/29/2014 | 3,438,236 | 3,327,662 | ||||||||||||
Federal Mogul Corporation |
2.18 | 12/28/2015 | 3,971,999 | 3,844,259 | ||||||||||||
Fidelity National Information Services Incorporated |
4.25 | 07/18/2016 | 8,000 | 8,026 | ||||||||||||
First Data Corporation |
2.99 | 09/24/2014 | 916,226 | 5,180,552 | ||||||||||||
Focus Brands Incorporated |
6.27 | 03/05/2018 | 440,410 | 441,511 | ||||||||||||
Focus Brands Incorporated |
10.25 | 08/22/2018 | 1,300,000 | 1,319,500 | ||||||||||||
Genesys Telecommunication |
6.75 | 01/25/2019 | 1,975,000 | 1,998,858 | ||||||||||||
Goodyear Tire & Rubber Company |
4.75 | 04/12/2019 | 6,200,000 | 6,110,844 | ||||||||||||
Gray Television Incorporated |
3.75 | 12/31/2014 | 968,827 | 962,171 | ||||||||||||
HCA Incorporated |
2.74 | 05/01/2016 | 974,359 | 950,302 | ||||||||||||
Helm Holdings Corporation |
6.25 | 06/02/2017 | 2,612,578 | 2,592,984 | ||||||||||||
HHI Holdings LLC |
7.00 | 03/21/2017 | 940,502 | 940,502 | ||||||||||||
Interactive Data Corporation |
4.50 | 02/12/2018 | 3,349,546 | 3,351,120 | ||||||||||||
KAR Auction Services Incorporated |
5.00 | 05/19/2017 | 4,975,335 | 4,997,127 | ||||||||||||
Level 3 Financing Incorporated |
2.65 | 03/13/2014 | 2,700,000 | 2,679,750 | ||||||||||||
LIN Television Corporation |
5.00 | 12/15/2018 | 399,000 | 400,329 | ||||||||||||
Local TV Finance LLC |
4.24 | 05/07/2015 | 1,424,159 | 1,418,505 | ||||||||||||
LPL Holdings |
2.76 | 03/23/2017 | 550,000 | 537,169 | ||||||||||||
LPL Holdings |
4.00 | 03/22/2019 | 3,775,000 | 3,775,000 | ||||||||||||
MedAssets Incorporated |
5.25 | 11/16/2016 | 646,443 | 649,811 | ||||||||||||
Merisant Company |
7.50 | 01/08/2014 | 776,957 | 765,302 | ||||||||||||
Mission Broadcasting Incorporated |
5.00 | 09/30/2016 | 77,539 | 77,054 | ||||||||||||
MSCI Incorporated |
3.50 | 03/14/2017 | 2,768,564 | 2,765,602 |
The accompanying notes are an integral part of these financial statements.
Portfolio of InvestmentsApril 30, 2012 (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 23 |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Term Loans (continued) | ||||||||||||||||
National Cinemedia LLC |
1.98 | % | 02/13/2015 | $ | 1,208,934 | $ | 1,205,005 | |||||||||
Newsday LLC |
10.50 | 08/01/2013 | 2,755,000 | 2,825,611 | ||||||||||||
Nexstar Broadcasting Incorporated |
5.00 | 09/30/2016 | 216,463 | 215,110 | ||||||||||||
Nielsen Finance LLC Class C |
3.49 | 05/02/2016 | 274,302 | 274,264 | ||||||||||||
Nielsen Finance LLC Class D |
2.49 | 02/07/2017 | 225,000 | 216,450 | ||||||||||||
Novelis Incorporated |
4.00 | 03/10/2017 | 995,000 | 993,756 | ||||||||||||
nTelos Incorporated |
4.00 | 08/07/2015 | 999,006 | 995,570 | ||||||||||||
Panolam Industries International Incorporated |
8.25 | 12/31/2013 | 206,466 | 202,337 | ||||||||||||
Penn National Gaming Incorporated |
3.75 | 07/16/2018 | 997,487 | 1,001,228 | ||||||||||||
Phillips Van Heusen Corporation |
3.50 | 05/06/2016 | 124,685 | 124,665 | ||||||||||||
Prestige Brands International |
5.26 | 12/20/2018 | 292,992 | 294,675 | ||||||||||||
RailAmerica Incorporated |
4.00 | 02/27/2019 | 600,000 | 600,186 | ||||||||||||
Rexnord Corporation |
5.00 | 04/30/2018 | 1,097,250 | 1,104,656 | ||||||||||||
SBA Communications Corporation |
3.75 | 06/29/2018 | 1,994,975 | 1,994,975 | ||||||||||||
Springleaf Finance Corporation |
5.50 | 05/05/2017 | 700,000 | 663,103 | ||||||||||||
Sungard Data Systems Incorporated |
1.99 | 02/28/2014 | 650,000 | 647,959 | ||||||||||||
Sungard Data Systems Incorporated |
3.95 | 02/26/2016 | 1,750,000 | 1,752,188 | ||||||||||||
Syniverse Technologies Incorporated |
5.00 | 04/10/2019 | 1,000,000 | 1,000,630 | ||||||||||||
Telesat Holdings Incorporated |
4.25 | 03/26/2019 | 2,650,000 | 2,645,575 | ||||||||||||
Texas Competitive Electric Holding LLC |
3.74 | 10/10/2014 | 16,421,983 | 9,401,585 | ||||||||||||
Texas Competitive Electric Holding LLC |
4.74 | 10/10/2017 | 375,000 | 206,505 | ||||||||||||
Total Safety US Incorporated |
7.50 | 10/27/2017 | 897,750 | 899,617 | ||||||||||||
Towerco Finance LLC |
4.50 | 04/12/2018 | 1,942,582 | 1,949,867 | ||||||||||||
Transdigm Incorporated |
4.00 | 02/14/2017 | 2,711,507 | 2,710,666 | ||||||||||||
Tronox Incorporated |
1.00 | 02/02/2018 | 514,286 | 515,001 | ||||||||||||
Tronox Incorporated |
4.25 | 02/02/2018 | 1,885,714 | 1,888,335 | ||||||||||||
United Surgical Partners International Incorporated |
5.25 | 04/19/2017 | 1,946,307 | 1,937,393 | ||||||||||||
United Surgical Partners International Incorporated |
6.00 | 03/19/2019 | 1,325,000 | 1,325,557 | ||||||||||||
Valeant Pharmaceuticals International |
3.75 | 02/08/2019 | 1,700,000 | 1,691,500 | ||||||||||||
Warnaco Incorporated |
3.75 | 06/15/2018 | 598,492 | 598,492 | ||||||||||||
Web Service Company LLC |
7.00 | 08/28/2014 | 456,990 | 453,184 | ||||||||||||
Wendys/Arbys Restaurants LLC < |
N/A | 05/03/2019 | 2,800,000 | 2,814,000 | ||||||||||||
Total Term Loans (Cost $142,517,648) |
138,652,748 | |||||||||||||||
|
|
|||||||||||||||
Yankee Corporate Bonds and Notes: 7.64% |
||||||||||||||||
Consumer Discretionary: 0.55% |
||||||||||||||||
Media: 0.55% | ||||||||||||||||
Grupo Televisa SA |
6.00 | 05/15/2018 | 750,000 | 874,852 | ||||||||||||
Intelsat Jackson Holdings Limited 144A |
7.25 | 10/15/2020 | 900,000 | 938,250 | ||||||||||||
Intelsat Jackson Holdings Limited |
7.25 | 10/15/2020 | 875,000 | 914,375 | ||||||||||||
Videotron Limited 144A |
5.00 | 07/15/2022 | 200,000 | 199,500 | ||||||||||||
Videotron Limited |
9.13 | 04/15/2018 | 775,000 | 856,375 | ||||||||||||
3,783,352 | ||||||||||||||||
|
|
|||||||||||||||
Consumer Staples: 0.11% |
||||||||||||||||
Beverages: 0.11% | ||||||||||||||||
Pernod Ricard SA 144A |
4.45 | 01/15/2022 | 760,000 | 789,587 | ||||||||||||
|
|
The accompanying notes are an integral part of these financial statements.
24 | Wells Fargo Advantage Multi-Sector Income Fund | Portfolio of InvestmentsApril 30, 2012 (Unaudited) |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Energy: 1.64% |
||||||||||||||||
Energy Equipment & Services: 0.12% | ||||||||||||||||
Ensco plc |
4.70 | % | 03/15/2021 | $ | 750,000 | $ | 817,889 | |||||||||
|
|
|||||||||||||||
Oil, Gas & Consumable Fuels: 1.52% | ||||||||||||||||
Griffin Coal Mining Company Limited 144A(s) |
9.50 | 12/01/2016 | 3,792,790 | 3,095,864 | ||||||||||||
Griffin Coal Mining Company Limited (s) |
9.50 | 12/01/2016 | 310,082 | 253,104 | ||||||||||||
Lukoil International Finance Company |
7.25 | 11/05/2019 | 600,000 | 676,500 | ||||||||||||
Petrobras International Finance Company |
5.38 | 01/27/2021 | 670,000 | 733,525 | ||||||||||||
Petroleos Mexicanos 144A |
4.88 | 01/24/2022 | 750,000 | 799,100 | ||||||||||||
Petroplus Finance Limited |
5.75 | 01/20/2020 | 650,000 | 725,137 | ||||||||||||
Ship Finance International Limited |
8.50 | 12/15/2013 | 3,720,000 | 3,710,700 | ||||||||||||
Woodside Finance Limited 144A |
8.75 | 03/01/2019 | 405,000 | 520,788 | ||||||||||||
10,514,718 | ||||||||||||||||
|
|
|||||||||||||||
Financials: 1.14% |
||||||||||||||||
Capital Markets: 0.06% | ||||||||||||||||
Mubadala Development Company 144A |
5.50 | 04/20/2021 | 360,000 | 389,077 | ||||||||||||
|
|
|||||||||||||||
Commercial Banks: 0.87% | ||||||||||||||||
Banco De Brasil 144A |
5.88 | 01/26/2022 | 750,000 | 780,000 | ||||||||||||
Banco de Credito Del Peru |
4.75 | 03/16/2016 | 1,200,000 | 1,236,000 | ||||||||||||
Banco Del Estado de Chile 144A |
3.88 | 02/08/2022 | 650,000 | 646,750 | ||||||||||||
Eurasian Development Bank |
7.38 | 09/29/2014 | 1,000,000 | 1,095,000 | ||||||||||||
Export Import Bank of Korea |
5.00 | 04/11/2022 | 750,000 | 805,072 | ||||||||||||
Macquarie Bank Limited 144A |
5.00 | 02/22/2017 | 750,000 | 762,458 | ||||||||||||
Standard Chartered Bank 144A |
6.40 | 09/26/2017 | 650,000 | 715,000 | ||||||||||||
6,040,280 | ||||||||||||||||
|
|
|||||||||||||||
Diversified Financial Services: 0.21% | ||||||||||||||||
BM&F Bovespa SA |
5.50 | 07/16/2020 | 500,000 | 537,500 | ||||||||||||
Corporación Andina de Fomento |
8.13 | 06/04/2019 | 750,000 | 938,012 | ||||||||||||
Preferred Term Securities XII Limited (s)(i) |
1.97 | 12/24/2033 | 635,000 | 191 | ||||||||||||
1,475,703 | ||||||||||||||||
|
|
|||||||||||||||
Industrials: 0.14% |
||||||||||||||||
Commercial Services & Supplies: 0.09% | ||||||||||||||||
Tyco Electronics Group SA |
3.50 | 02/03/2022 | 625,000 | 624,823 | ||||||||||||
|
|
|||||||||||||||
Road & Rail: 0.05% | ||||||||||||||||
Transnet Limited 144A |
4.50 | 02/10/2016 | 300,000 | 313,326 | ||||||||||||
|
|
|||||||||||||||
Information Technology: 0.16% |
||||||||||||||||
Computers & Peripherals: 0.16% | ||||||||||||||||
Seagate Technology HDD Holdings |
6.80 | 10/01/2016 | 650,000 | 721,500 | ||||||||||||
Seagate Technology HDD Holdings 144A |
7.00 | 11/01/2021 | 375,000 | 406,875 | ||||||||||||
1,128,375 | ||||||||||||||||
|
|
The accompanying notes are an integral part of these financial statements.
Portfolio of InvestmentsApril 30, 2012 (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 25 |
Security Name | Interest Rate | Maturity Date | Principal | Value | ||||||||||||
Materials: 1.35% |
||||||||||||||||
Metals & Mining: 0.75% | ||||||||||||||||
ArcelorMittal |
4.50 | % | 02/25/2017 | $ | 725,000 | $ | 729,763 | |||||||||
Novelis Incorporated |
7.25 | 02/15/2015 | 1,030,000 | 1,032,575 | ||||||||||||
Novelis Incorporated |
8.38 | 12/15/2017 | 550,000 | 594,000 | ||||||||||||
Novelis Incorporated |
8.75 | 12/15/2020 | 725,000 | 799,313 | ||||||||||||
Teck Resources Limited |
10.75 | 05/15/2019 | 1,025,000 | 1,268,438 | ||||||||||||
Vale Overseas Limited |
4.38 | 01/11/2022 | 750,000 | 767,945 | ||||||||||||
5,192,034 | ||||||||||||||||
|
|
|||||||||||||||
Paper & Forest Products: 0.60% | ||||||||||||||||
PE Paper Escrow GmbH 144A |
12.00 | 08/01/2014 | 1,170,000 | 1,263,600 | ||||||||||||
Sappi Limited 144A |
7.50 | 06/15/2032 | 3,560,000 | 2,874,700 | ||||||||||||
4,138,300 | ||||||||||||||||
|
|
|||||||||||||||
Telecommunication Services: 2.29% |
||||||||||||||||
Diversified Telecommunication Services: 1.75% | ||||||||||||||||
Intelsat Jackson Holdings Limited |
7.25 | 04/01/2019 | 425,000 | 443,063 | ||||||||||||
Intelsat Jackson Holdings Limited |
7.50 | 04/01/2021 | 525,000 | 551,250 | ||||||||||||
Intelsat Jackson Holdings Limited |
11.25 | 06/15/2016 | 5,075,000 | 5,335,094 | ||||||||||||
Qtel International Finance Limited |
4.75 | 02/16/2021 | 300,000 | 312,750 | ||||||||||||
Sable International Finance Limited |
7.75 | 02/15/2017 | 350,000 | 362,250 | ||||||||||||
Virgin Media Finance plc |
6.50 | 01/15/2018 | 650,000 | 708,500 | ||||||||||||
Vivendi SA 144A |
4.75 | 04/12/2022 | 750,000 | 722,736 | ||||||||||||
Wind Acquisition Finance SpA 144A |
11.75 | 07/15/2017 | 3,660,000 | 3,595,950 | ||||||||||||
12,031,593 | ||||||||||||||||
|
|
|||||||||||||||
Wireless Telecommunication Services: 0.54% | ||||||||||||||||
Digicel Group Limited 144A |
12.00 | 04/01/2014 | 1,335,000 | 1,485,188 | ||||||||||||
Globo Communicacoes Participacoes SA 144A |
4.88 | 04/11/2022 | 750,000 | 755,625 | ||||||||||||
Telesat Canada Incorporated 144A |
6.00 | 05/15/2017 | 300,000 | 300,000 | ||||||||||||
Telesat Canada Incorporated |
11.00 | 11/01/2015 | 1,135,000 | 1,205,938 | ||||||||||||
3,746,751 | ||||||||||||||||
|
|
|||||||||||||||
Utilities: 0.26% |
||||||||||||||||
Electric Utilities: 0.26% | ||||||||||||||||
Comision Federal de Electricidad 144A |
4.88 | 05/26/2021 | 650,000 | 687,375 | ||||||||||||
Eskom Holdings Limited |
5.75 | 01/26/2021 | 1,000,000 | 1,075,000 | ||||||||||||
1,762,375 | ||||||||||||||||
|
|
|||||||||||||||
Total Yankee Corporate Bonds and Notes (Cost $50,229,946) |
52,748,183 | |||||||||||||||
|
|
|||||||||||||||
Yankee Government Bonds: 0.04% | ||||||||||||||||
Croatia 144A |
6.25 | 04/27/2017 | 300,000 | 303,494 | ||||||||||||
|
|
|||||||||||||||
Total Yankee Government Bonds (Cost $298,419) |
303,494 | |||||||||||||||
|
|
The accompanying notes are an integral part of these financial statements.
26 | Wells Fargo Advantage Multi-Sector Income Fund | Portfolio of InvestmentsApril 30, 2012 (Unaudited) |
Security Name | Yield | Shares | Value | |||||||||||
Short-Term Investments: 3.44% |
||||||||||||||
Investment Companies: 3.44% | ||||||||||||||
Wells Fargo Advantage Cash Investment Money Market Fund, Select Class (l)(u)## |
0.11 | % | 23,750,607 | $ | 23,750,607 | |||||||||
|
|
|||||||||||||
Total Short-Term Investments (Cost $23,750,607) |
23,750,607 | |||||||||||||
|
|
Total Investments in Securities | ||||||||
(Cost $889,185,350) * | 132.83 | % | 916,770,632 | |||||
Other Assets and Liabilities, Net |
(32.83 | ) | (226,602,331 | ) | ||||
|
|
|
|
|||||
Total Net Assets | 100.00 | % | $ | 690,168,301 | ||||
|
|
|
|
± | Variable rate investment |
144A | Security 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. |
| Non-income earning security |
¥ | A payment-in-kind (PIK) security is a security 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. |
(s) | Security is currently in default with regards to scheduled interest and/or principal payments. The Fund has stopped accruing interest on this security. |
@ | Foreign bond principal is denominated in local currency. |
(i) | Illiquid security |
¤ | Security issued in zero coupon form with no periodic interest payments. |
< | All or a portion of the position represents an unfunded loan commitment. |
(l) | Investment in an affiliate. |
(u) | Rate shown is the 7-day annualized yield at period end. |
## | All or a portion of this security is segregated as collateral for unfunded loan commitments. |
* | Cost for federal income tax purposes is $894,138,762 and net unrealized appreciation (depreciation) consists of: |
Gross unrealized appreciation |
$ | 38,916,007 | ||
Gross unrealized depreciation |
(16,284,137 | ) | ||
|
|
|||
Net unrealized appreciation |
$ | 22,631,870 |
The accompanying notes are an integral part of these financial statements.
Statement of Assets and LiabilitiesApril 30, 2012 (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 27 |
Assets |
||||
Investments |
||||
In unaffiliated securities, at value (see cost below) |
$ | 893,020,025 | ||
In affiliated securities, at value (see cost below) |
23,750,607 | |||
|
|
|||
Total investments, at value (see cost below) |
916,770,632 | |||
Cash |
4,924 | |||
Foreign currency, at value (see cost below) |
59 | |||
Receivable for investments sold |
2,416,927 | |||
Principal paydown receivable |
735,028 | |||
Receivable for interest |
14,585,676 | |||
Unrealized gains on forward foreign currency contracts |
25,457 | |||
Prepaid expenses and other assets |
104,829 | |||
|
|
|||
Total assets |
934,643,532 | |||
|
|
|||
Liabilities |
||||
Dividends payable |
4,205,500 | |||
Payable for investments purchased |
8,480,956 | |||
Unrealized losses on forward foreign currency contracts |
431,293 | |||
Secured borrowing payable |
230,707,166 | |||
Advisory fee payable |
440,185 | |||
Due to other related parties |
40,017 | |||
Accrued expenses and other liabilities |
170,114 | |||
|
|
|||
Total liabilities |
244,475,231 | |||
|
|
|||
Total net assets |
$ | 690,168,301 | ||
|
|
|||
NET ASSETS CONSIST OF |
||||
Paid-in capital |
$ | 774,480,927 | ||
Overdistributed net investment income |
(3,757,664 | ) | ||
Accumulated net realized losses on investments |
(107,648,643 | ) | ||
Net unrealized gains on investments |
27,093,681 | |||
|
|
|||
Total net assets |
$ | 690,168,301 | ||
|
|
|||
NET ASSET VALUE PER SHARE |
||||
Based on $690,168,301 divided by 42,055,000 shares issued and outstanding |
$16.41 | |||
Investments in unaffiliated securities, at cost |
$ | 865,434,743 | ||
|
|
|||
Investments in affiliated securities, at cost |
$ | 23,750,607 | ||
|
|
|||
Total investments, at cost |
$ | 889,185,350 | ||
|
|
|||
Foreign currency, at cost |
$ | 59 | ||
|
|
The accompanying notes are an integral part of these financial statements.
28 | Wells Fargo Advantage Multi-Sector Income Fund | Statement of OperationsSix Months Ended April 30, 2012 (Unaudited) |
Investment income |
||||
Interest* |
$ | 28,014,777 | ||
Dividends |
37,375 | |||
Income from affiliated securities |
13,506 | |||
|
|
|||
Total investment income |
28,065,658 | |||
|
|
|||
Expenses |
||||
Advisory fee |
2,489,976 | |||
Administration fee |
226,361 | |||
Custody and accounting fee |
53,331 | |||
Professional fees |
20,661 | |||
Shareholder report expenses |
61,089 | |||
Trustees fees and expenses |
7,531 | |||
Transfer agent fees |
15,787 | |||
Interest expense |
493,151 | |||
Secured borrowing fees |
794,074 | |||
Other fees and expenses |
26,514 | |||
|
|
|||
Total expenses |
4,188,475 | |||
|
|
|||
Net investment income |
23,877,183 | |||
|
|
|||
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS |
||||
Net realized gains (losses) on: |
||||
Unaffiliated securities |
7,467,250 | |||
Forward foreign currency contract transactions |
(90,479 | ) | ||
|
|
|||
Net realized gains on investments |
7,376,771 | |||
|
|
|||
Net change in unrealized gains (losses) on: |
||||
Unaffiliated securities |
3,115,190 | |||
Forward foreign currency contract transactions |
1,534,944 | |||
|
|
|||
Net change in unrealized gains (losses) on investments |
4,650,134 | |||
|
|
|||
Net realized and unrealized gains (losses) on investments |
12,026,905 | |||
|
|
|||
Net increase in net assets resulting from operations |
$ | 35,904,088 | ||
|
|
|||
* Net of foreign interest withholding taxes of |
$25,281 |
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets | Wells Fargo Advantage Multi-Sector Income Fund | 29 |
Six Months Ended April 30, 2012 (Unaudited) |
Year Ended October 31, 2011 |
|||||||
Operations |
||||||||
Net investment income |
$ | 23,877,183 | $ | 46,577,610 | ||||
Net realized gains on investments |
7,376,771 | 12,228,308 | ||||||
Net change in unrealized gains (losses) on investments |
4,650,134 | (28,556,729 | ) | |||||
|
|
|
|
|||||
Net increase in net assets resulting from operations |
35,904,088 | 30,249,189 | ||||||
|
|
|
|
|||||
Distributions to shareholders from net investment income |
(25,233,000 | ) | (51,862,226 | ) | ||||
|
|
|
|
|||||
Total increase (decrease) in net assets |
10,671,088 | (21,613,037 | ) | |||||
|
|
|
|
|||||
Net assets |
||||||||
Beginning of period |
679,497,213 | 701,110,250 | ||||||
|
|
|
|
|||||
End of period |
$ | 690,168,301 | $ | 679,497,213 | ||||
|
|
|
|
|||||
Overdistributed net investment income |
$ | (3,757,664 | ) | $ | (2,401,847 | ) | ||
|
|
|
|
The accompanying notes are an integral part of these financial statements.
30 | Wells Fargo Advantage Multi-Sector Income Fund | Statement of Cash FlowsSix Months Ended April 30, 2012 (Unaudited) |
Cash flows from operating activities: |
||||
Net increase in net assets resulting from operations |
$ | 35,904,088 | ||
Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities: |
||||
Purchase of investment securities |
(516,074,065 | ) | ||
Proceeds from sales of investment securities |
495,306,070 | |||
Paydowns |
12,076,839 | |||
Amortization |
(567,006 | ) | ||
Sale of short-term investment securities, net |
86,704 | |||
Increase in interest receivable |
(1,034,760 | ) | ||
Increase in receivable for investments sold |
(404,994 | ) | ||
Increase in principal paydown receivable |
(20,895 | ) | ||
Increase in prepaid expenses and other assets |
(53,581 | ) | ||
Increase in payable for investments purchased |
7,316,427 | |||
Decrease in advisory fee payable |
(6,783 | ) | ||
Decrease in due to other related parties |
(616 | ) | ||
Increase in accrued expenses and other liabilities |
122,667 | |||
Unrealized gains on unaffiliated securities |
(3,115,190 | ) | ||
Unrealized gains on forward foreign currency contract transactions |
(1,534,944 | ) | ||
Net realized gains on unaffiliated securities |
(7,467,250 | ) | ||
|
|
|||
Net cash provided by operating activities |
20,532,711 | |||
|
|
|||
Cash flows from financing activities: |
||||
Cash distributions paid |
(25,233,000 | ) | ||
Decrease in reverse repurchase agreements |
(99,561,821 | ) | ||
Increase in secured borrowing |
100,567,869 | |||
|
|
|||
Net cash used in financing activities |
(24,226,952 | ) | ||
|
|
|||
Net decrease in cash |
(3,694,241 | ) | ||
|
|
|||
Cash (including foreign currency): |
||||
Beginning of period |
$ | 3,699,224 | ||
|
|
|||
End of period |
$ | 4,983 | ||
|
|
|||
Supplemental cash disclosure |
||||
Cash paid for interest |
$ | 126,927 | ||
|
|
The accompanying notes are an integral part of these financial statements.
Financial Highlights | Wells Fargo Advantage Multi-Sector Income Fund | 31 |
(For a common share outstanding throughout each period)
Six Months Ended (Unaudited) |
Year Ended October 31, | |||||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||||||
Net asset value, beginning of period |
$ | 16.16 | $ | 16.67 | $ | 15.61 | $ | 13.47 | $ | 18.74 | $ | 18.55 | ||||||||||||
Net investment income |
0.57 | 1.11 | 1.21 | 1.33 | 1.68 | 1.731 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments |
0.28 | (0.39 | ) | 1.17 | 3.26 | (5.35 | ) | 0.29 | ||||||||||||||||
Distributions to preferred shareholders from net investment income |
0.00 | 0.00 | (0.02 | )1 | (0.03 | )1 | (0.30 | )1 | (0.51 | )1 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total from investment operations |
0.85 | 0.72 | 2.36 | 4.56 | (3.97 | ) | 1.51 | |||||||||||||||||
Distributions to common shareholders from |
||||||||||||||||||||||||
Net investment income |
(0.60 | ) | (1.23 | ) | (1.30 | ) | (2.20 | ) | (1.30 | ) | (1.29 | ) | ||||||||||||
Tax basis return of capital |
0.00 | 0.00 | 0.00 | (0.22 | ) | 0.00 | (0.03 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total distributions to common shareholders |
(0.60 | ) | (1.23 | ) | (1.30 | ) | (2.42 | ) | (1.30 | ) | (1.32 | ) | ||||||||||||
Net asset value, end of period |
$ | 16.41 | $ | 16.16 | $ | 16.67 | $ | 15.61 | $ | 13.47 | $ | 18.74 | ||||||||||||
Market value, end of period |
$ | 15.41 | $ | 14.97 | $ | 16.18 | $ | 13.73 | $ | 11.68 | $ | 16.22 | ||||||||||||
Total return based on market value2 |
7.07 | % | 0.33 | % | 28.44 | % | 44.93 | % | (21.43 | )% | 2.64 | % | ||||||||||||
Ratios to average net assets (annualized) |
||||||||||||||||||||||||
Gross expenses |
1.24 | % | 1.14 | % | 1.58 | % | 3.07 | % | 1.95 | % | 1.15 | % | ||||||||||||
Net expenses |
1.24 | % | 1.14 | % | 1.18 | % | 1.62 | % | 1.90 | % | 1.15 | % | ||||||||||||
Interest expense3 |
0.15 | % | 0.09 | % | 0.08 | % | 0.47 | % | 0.54 | % | 0.02 | % | ||||||||||||
Net investment income |
7.06 | % | 6.75 | % | 7.63 | %4 | 9.65 | %4 | 7.85 | %4 | 6.54 | %4 | ||||||||||||
Supplemental data |
||||||||||||||||||||||||
Portfolio turnover rate |
51 | % | 35 | % | 70 | % | 93 | % | 92 | % | 95 | % | ||||||||||||
Net assets of common shareholders, end of period (000s omitted) |
$690,168 | $679,497 | $701,110 | $656,404 | $566,515 | $787,919 | ||||||||||||||||||
Borrowings outstanding, end of period (000s omitted) |
$230,000 | $230,000 | $230,000 | $230,000 | $380,000 | $400,000 | ||||||||||||||||||
Asset coverage per $1,000 of borrowing, end of period |
$4,001 | $3,954 | $4,048 | $3,854 | $2,491 | $2,970 | ||||||||||||||||||
Liquidation value of Preferred Shares, end of period (thousands) |
N/A | N/A | N/A | $ | 80,035 | $ | 80,108 | $ | 400,475 | |||||||||||||||
Asset coverage ratio for Preferred Shares, end of period |
N/A | N/A | N/A | 385 | % | 249 | % | 296 | % |
1. | Calculated based upon average common shares outstanding |
2. | Total return is calculated assuming a purchase of common stock on the first day and a sale on the last day of the period reported. Dividends and distributions, if any, are assumed for purposes of these calculations to be reinvested at prices obtained under the Funds Automatic Dividend Reinvestment Plan. Total return does not reflect brokerage commissions or sales charges. Returns for periods of less than one year are not annualized. |
3. | Interest expense ratio relates to interest associated with borrowings and/or leverage transactions. |
4. | The net investment income ratio reflects any distributions paid to preferred shareholders. |
The accompanying notes are an integral part of these financial statements.
32 | Wells Fargo Advantage Multi-Sector Income Fund | Notes to Financial Statements (Unaudited) |
1. ORGANIZATION
Wells Fargo Advantage Multi-Sector Income Fund (the Fund) was organized as a statutory trust under the laws of the state of Delaware on April 10, 2003 and is registered as a diversified closed-end management investment company under the Investment Company Act of 1940, as amended. The primary investment objective of the Fund is to seek a high level of current income consistent with limiting its overall exposure to domestic interest-rate risk.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require 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.
Securities valuation
Fixed income securities with original maturities exceeding 60 days are valued based on evaluated prices received from an independent pricing service approved by the Board of Trustees which may utilize both transaction data and market information such as yield, prices of securities of comparable quality, coupon rate, maturity, type of issue, trading characteristics and other market data. If valuations are not available from the pricing service or values received are deemed not representative of market value, values will be obtained from a third party broker-dealer or determined based on the Funds Fair Value Procedures.
Investments in equity 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, except that 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 Value Procedures.
Securities denominated in foreign currencies are translated into U.S. dollars using the closing rates of exchange in effect on the day of valuation.
Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore may not fully reflect trading or events that occur after the close of the principal exchange in which the foreign securities are traded, but before the close of the New York Stock Exchange. If such trading or events are expected to materially affect the value of securities, then fair value pricing procedures approved by the Board of Trustees are applied. These procedures take into account multiple factors including movements in U.S. securities markets after foreign exchanges close. As a result of the fair value pricing procedures, these securities which are normally categorized as Level 1 in the fair value hierarchy will represent a transfer from a Level 1 to a Level 2 security and will be categorized as Level 2. Depending on market activity, such fair valuations may be frequent. Such fair value pricing may result in NAVs that are higher or lower than NAVs based on the closing price or latest quoted bid price. On April 30, 2012, fair value pricing was not used in pricing foreign securities.
Debt securities of sufficient credit quality with original maturities of 60 days or less generally are valued at amortized cost which approximates fair 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.
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 Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary in determining the fair value of portfolio securities, unless the responsibility has been delegated to the Management Valuation Team of Wells Fargo Funds
Notes to Financial Statements (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 33 |
Management, LLC (Funds Management). The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Fair Value Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees considers for ratification any valuation actions taken by the Valuation Committee or the Management Valuation Team.
Valuations of fair valued securities are compared to the next actual sales price when available, or other appropriate market information to assess the continued appropriateness of the fair valuation methodology used. These securities are fair valued on a day-to-day basis, taking into consideration changes to appropriate market information and any significant changes to the input factors considered in the valuation process until there is a readily available price provided on the exchange or by an independent pricing service. Valuations received from an independent pricing service or broker quotes are periodically validated by comparisons to most recent trades and valuations provided by other independent pricing services in addition to the review of prices by the adviser and/or sub-adviser. Unobservable inputs used in determining fair valuations are identified based on the type of security, taking into consideration factors utilized by market participants in valuing the investment, knowledge about the issuer and the current market environment.
Foreign currency translation
The accounting records of the Fund are maintained in U.S. dollars. Assets, including investment securities, and liabilities denominated in foreign currency are translated into U.S. dollars at the prevailing rates of exchange at the date of valuation. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and liabilities other than investments in securities resulting in changes in exchange rates.
The changes in net assets arising from changes in exchange rates and the changes in net assets resulting from changes in market prices of securities are not separately presented. Such changes are recorded with net realized and unrealized gains or losses from investments. Gains and losses from certain foreign currency transactions are treated as ordinary income for U.S. federal income tax purposes.
Reverse repurchase agreements
To obtain short-term financing, the Fund may enter into reverse repurchase agreements with banks and other financial institutions, which are deemed by the investment adviser to be creditworthy. At the time the Fund enters into a reverse repurchase agreement, it will establish a segregated account with the custodian containing qualified assets having a value not less than the repurchase price, including accrued interest. If the counterparty to the transaction is rendered insolvent, the Fund may be delayed or limited in the repurchase of the collateral securities.
Forward foreign currency contracts
The Fund may be subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. A forward foreign currency contract is an agreement between two parties to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund enters into forward foreign currency contracts to facilitate transactions in foreign-denominated securities and to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. Forward foreign currency contracts are recorded at the forward rate and marked-to-market daily. When the contracts are closed, realized gains and losses arising from such transactions are recorded as realized gains or losses on foreign currency related transactions. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably. The Funds maximum risk of loss from counterparty credit risk is the unrealized gains or losses on the contracts. This risk is mitigated by having a master netting arrangement between the Fund and the counterparty.
When-issued transactions
The Fund may purchase securities on a forward commitment or when-issued basis. The Fund records a when-issued transaction on the trade date and will segregate assets in an amount at least equal in value to the Funds commitments to purchase when-issued securities. 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.
34 | Wells Fargo Advantage Multi-Sector Income Fund | Notes to Financial Statements (Unaudited) |
Term loans
The Fund may invest in term loans. The loans are marked-to-market daily and the Fund begins earning interest when the loans are funded. The 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 and there could be potential loss to the Fund in the event of default by the borrower.
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.
Income from foreign securities is recorded net of foreign taxes withheld where recovery of such taxes is not assured.
Distributions to shareholders
Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-dividend date. Such distributions are determined in conformity with income tax regulations, which may differ from generally accepted accounting principles.
Federal and other taxes
The Fund intends 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.
The Funds 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. Management has analyzed the Funds tax positions taken on federal, state, and foreign tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
Under the recently enacted Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years which began after December 22, 2010 for an unlimited period. However, any losses incurred are required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than be considered all short-term as under previous law. In addition, the Fund may elect to defer any portion of a post-October capital loss or qualified late-year ordinary loss to the first day of the following taxable year. A post-October capital loss is the greatest of the net capital loss, net short-term capital loss or net long-term capital loss for the portion of the taxable year after October 31. A qualified late-year ordinary loss is the net loss comprised of (a) net gain or loss from the sale or other disposition of capital assets for the portion of the taxable year after October 31, and (b) other ordinary income or loss for the portion of the taxable year after December 31.
As of October 31, 2011, the Fund had net capital loss carryforwards, which were available to offset future net realized capital gains, in the amount of $110,049,569 with $20,598,096 expiring in 2016 and $89,451,473 expiring in 2017.
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 Funds investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the
Notes to Financial Statements (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 35 |
lowest priority to significant unobservable inputs (Level 3). The Funds investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
n | Level 1 quoted prices in active markets for identical securities |
n | Level 2 other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) |
n | Level 3 significant unobservable inputs (including the Funds 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 those securities.
As of April 30, 2012, the inputs used in valuing the Funds assets, which are carried at fair value, were as follows:
Investments in Securities | Quoted Prices (Level 1) |
Significant Other (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total | ||||||||||||
Agency securities |
$ | 0 | $ | 69,008,271 | $ | 0 | $ | 69,008,271 | ||||||||
Asset-backed securities |
0 | 723,383 | 0 | 723,383 | ||||||||||||
Convertible debentures |
0 | 1,130,688 | 0 | 1,130,688 | ||||||||||||
Corporate bonds and notes |
0 | 382,851,650 | 0 | 382,851,650 | ||||||||||||
Equity securities |
||||||||||||||||
Common stocks |
326,146 | 0 | 5,225 | 331,371 | ||||||||||||
Preferred stocks |
646,650 | 0 | 0 | 646,650 | ||||||||||||
Foreign corporate bonds and notes |
0 | 36,523,882 | 0 | 36,523,882 | ||||||||||||
Foreign government bonds |
0 | 187,270,753 | 0 | 187,270,753 | ||||||||||||
Non-agency mortgage backed securities |
0 | 22,828,952 | 0 | 22,828,952 | ||||||||||||
Term loans |
0 | 127,634,485 | 11,018,263 | 138,652,748 | ||||||||||||
Yankee corporate bonds and notes |
0 | 52,748,183 | 0 | 52,748,183 | ||||||||||||
Yankee government bonds |
0 | 303,494 | 0 | 303,494 | ||||||||||||
Short-term investments |
||||||||||||||||
Investment companies |
23,750,607 | 0 | 0 | 23,750,607 | ||||||||||||
$ | 24,723,403 | $ | 881,023,741 | $ | 11,023,488 | $ | 916,770,632 |
Further details on the major security types listed above can be found in the Portfolio of Investments.
As of April 30, 2012, the inputs used in valuing the Funds other financial instruments, which are carried at fair value, were as follows:
Other financial instruments | Quoted Prices (Level 1) |
Significant Other (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total | ||||||||||||
Forward foreign currency contracts+ |
$ | 0 | $ | (405,836 | ) | $ | 0 | $ | (405,836 | ) |
+ | Forward foreign currency contracts are presented at the unrealized gains or losses on the instrument. |
Transfers in and transfers out are recognized at the end of the reporting period. For the six months ended April 30, 2012, the Fund did not have any significant transfers into/out of Level 1 and Level 2.
36 | Wells Fargo Advantage Multi-Sector Income Fund | Notes to Financial Statements (Unaudited) |
The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:
Corporate bonds and notes |
Common stocks |
Term loans |
Yankee corporate bonds and notes |
Total | ||||||||||||||||
Balance as of October 31, 2011 |
$ | 5,243,760 | $ | 0 | $ | 3,971,316 | $ | 191 | $ | 9,215,267 | ||||||||||
Accrued discounts (premiums) |
1,284 | 0 | 14,846 | 0 | 16,130 | |||||||||||||||
Realized gains (losses) |
0 | 0 | 378 | 0 | 378 | |||||||||||||||
Change in unrealized gains (losses) |
(118,396 | ) | 0 | 11,619 | 0 | (106,777 | ) | |||||||||||||
Purchases |
0 | 0 | 1,301,625 | 0 | 1,301,625 | |||||||||||||||
Sales |
0 | 0 | (11,834 | ) | 0 | (11,834 | ) | |||||||||||||
Transfers into Level 3 |
0 | 5,225 | 8,555,924 | 0 | 8,561,149 | |||||||||||||||
Transfers out of Level 3 |
(5,126,648 | ) | 0 | (2,825,611 | ) | (191 | ) | (7,952,450 | ) | |||||||||||
Balance as of April 30, 2012 |
$ | 0 | $ | 5,225 | $ | 11,018,263 | $ | 0 | $ | 11,023,488 | ||||||||||
Change in unrealized gains (losses) relating to securities still held at April 30, 2012 |
$ | 0 | $ | 0 | $ | 27,298 | $ | 0 | $ | 27,298 |
4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES
Advisory fee
Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (Wells Fargo) is the adviser to the Fund and is entitled to receive a fee at an annual rate of 0.55% of the Funds average daily total assets. Total assets consist of net assets of the Fund plus borrowings or other leverage for investment purposes to the extent excluded in calculating net assets.
Funds Management has retained the services of certain sub-advisers to provide daily portfolio management to the Fund. The fees for sub-advisory services are borne by Funds Management. Wells Capital Management Incorporated, an affiliate of Funds Management, is a sub-adviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate of 0.30% of the Funds average daily total assets. First International Advisors, LLC, an affiliate of Funds Management and an indirect, wholly owned subsidiary of Wells Fargo, is also a sub-adviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate of 0.10% of the Funds average daily total assets.
Administration fee
Funds Management also serves as the administrator to the Fund providing the Fund with facilities, equipment and personnel. Funds Management is entitled to receive an annual administration fee from the Fund equal to 0.05% of the Funds average daily total assets.
5. CAPITAL SHARE TRANSACTIONS
The Fund has authorized capital of 100,000,000 shares with no par value. For the six months ended April 30, 2012 and the year ended October 31, 2011, the Fund did not issue any shares.
6. BORROWING AND LEVERAGE TRANSACTIONS
The Fund has borrowed $230 million through a secured debt financing agreement administered by a major financial institution (the Facility). The Facility has a commitment amount of $230 million which expires on February 25, 2013, at which point it may be renegotiated and potentially renewed for another one-year term. At April 30, 2012, the Fund had secured borrowings outstanding in the amount of $230,707,166 (including accrued interest and usage and commitment fees payable).
The Funds borrowing under the Facility are generally charged interest at a rate based on the rates of the commercial paper notes issued to fund the Funds borrowings or at the London Interbank Offered Rate (LIBOR) plus 1.0%. During the six months ended April 30, 2012, an effective interest rate of 0.43% was incurred on the borrowings. Interest expense of $361,039, representing 0.11% of the Funds average daily net assets, was incurred during the six months ended April 30, 2012.
Notes to Financial Statements (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 37 |
The Fund has pledged all of its assets to secure the borrowings and currently pays, on a monthly basis, a usage fee an annual rate of 0.40% of the daily average outstanding principal amount of borrowings and a commitment fee at an annual rate of 0.40% of the product of (i) the daily average outstanding principal amount of borrowings and (ii) 1.02. Prior to February 27, 2012, both the useage fee and commitment fee were charged at an annual rate of 0.50%. The secured borrowing fees on the Statement of Operations of $794,074 represents the usage fee, commitment fee and structuring fees. For the six months ended April 30, 2012, the Fund paid structuring fees in the amount of $42,582.
During the six months ended April 30, 2012, the Fund entered into reverse repurchase agreements that had an average daily balance outstanding of $66,056,000 with an effective annual interest rate of 0.20% and paid interest of $132,112 representing 0.04% of the Funds average daily net assets. The maximum amount outstanding under reverse repurchase agreements during the six months ended April 30, 2012 was $99,567,272 (including accrued interest).
7. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the six months ended April 30, 2012 were as follows:
Purchases at Cost | Sales Proceeds | |||||||||||||
U.S. Government | Non-U.S. Government | U.S. Government | Non-U.S. Government | |||||||||||
$ | 0 | $ | 503,399,409 | $ | 132,718,722 | $ | 316,697,737 |
As of April 30, 2012, the Fund had unfunded loan commitments of $2,772,000.
8. DERIVATIVE TRANSACTIONS
During the six months ended April 30, 2012, the Fund entered into forward foreign currency exchange contracts for economic hedging purposes.
At April 30, 2012, the Fund had forward foreign currency contracts outstanding as follows:
Forward foreign currency contracts to buy:
Exchange Date | Counterparty | Contracts to Receive |
U.S. Value at April 30, 2012 |
In Exchange for U.S. $ |
Unrealized Gains (Losses) |
|||||||||||||
06/04/2012 | State Street Bank | 27,200,000 | MYR | $ | 8,967,427 | $ | 8,973,936 | $ | (6,509 | ) |
Forward foreign currency contracts to sell:
Exchange Date | Counterparty | Contracts to Deliver |
U.S. Value at April 30, 2012 |
In Exchange for U.S. $ |
Unrealized Gains (Losses) |
|||||||||||||
05/02/2012 | State Street Bank | 1,220,000,000 | HUF | $ | 5,631,784 | $ | 5,207,000 | $ | (424,784 | ) | ||||||||
05/29/2012 | State Street Bank | 69,570,000 | ZAR | 8,915,841 | 8,941,298 | 25,457 |
The Fund had average contract amounts of $74,427,606 and $23,219,686 in forward foreign currency contracts to buy and forward foreign currency contracts to sell, respectively, during the six months ended April 30, 2012.
The fair value, realized gains or losses and change in unrealized gains or losses on derivative instruments are reflected in the appropriate financial statements.
9. INDEMNIFICATION
Under the Funds organizational documents, the officers and directors are indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund may enter into contracts with service providers that contain a variety of indemnification clauses. The Funds maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.
38 | Wells Fargo Advantage Multi-Sector Income Fund | Notes to Financial Statements (Unaudited) |
10. NEW ACCOUNTING PRONOUNCEMENTS
In December 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2011-11, Disclosures about Offsetting Assets and Liabilities. ASU 2011-11, which amends FASB ASC Topic 210, Balance Sheet, creates new disclosure requirements which require entities to disclose both gross and net information for derivatives and other financial instruments that are either offset in the Statement of Assets and Liabilities or subject to an enforceable master netting arrangement or similar agreement. The disclosure requirements are effective for interim and annual reporting periods beginning on or after January 1, 2013. Management is currently assessing the potential impact, in addition to expanded financial statement disclosure, that may result from adopting this ASU.
In May 2011, FASB issued ASU No. 2011-04 Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. ASU No. 2011-04 amends FASB ASC Topic 820, Fair Value Measurements, to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP. The ASU is effective prospectively for interim and annual periods beginning after December 15, 2011. Management expects that adoption of the ASU will result in additional disclosures in the financial statements, as applicable.
In April 2011, FASB issued ASU No. 2011-03 Reconsideration of Effective Control for Repurchase Agreements. ASU No. 2011-03 amends FASB ASC Topic 860, Transfers and Servicing, specifically the criteria required to determine whether a repurchase agreement (repo) and similar agreements should be accounted for as sales of financial assets or secured borrowings with commitments. ASU No. 2011-03 changes the assessment of effective control by focusing on the transferors contractual rights and obligations and removing the criterion to assess its ability to exercise those rights or honor those obligations. This could result in changes to the way entities account for certain transactions including repurchase agreements, mortgage dollar rolls and reverse repurchase agreements. The ASU will become effective on a prospective basis for new transfers and modifications to existing transactions as of the beginning of the first interim or annual period beginning on or after December 15, 2011. Management has evaluated the impact of adopting the ASU and expects no significant changes.
11. SUBSEQUENT DISTRIBUTIONS
The Fund declared the following distributions to common shareholders:
Declaration Date | Record Date | Payable Date | Net Investment Income | |||
April 20, 2012 | May 15, 2012 | June 1, 2012 | $0.1000 | |||
May 18, 2012 | June 13, 2012 | July 2, 2012 | $0.1000 | |||
June 22, 2012 | July 16, 2012 | August 1, 2012 | $0.1000 |
These distributions are not reflected in the accompanying financial statements.
Other Information (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 39 |
PROXY VOTING INFORMATION
A description of the policies and procedures that the Fund uses 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 Fund 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.
ANNUAL MEETING OF SHAREHOLDERS
On February 13, 2012, an Annual Meeting of Shareholders for the Fund was held to consider the following proposal. The results of the proposal are indicated below.
Proposal 1 Election of Trustees:
Net Assets Voted For |
Judith M. Johnson | $ | 615,634,183 | |||||
Net Assets Voted Withheld |
$ | 8,205,283 | ||||||
Net Assets Voted For |
Leroy Keith, Jr. | $ | 614,192,172 | |||||
Net Assets Voted Withheld |
$ | 9,647,294 | ||||||
Net Assets Voted For |
Donald C. Willeke | $ | 614,584,532 | |||||
Net Assets Voted Withheld |
$ | 9,254,934 |
PORTFOLIO HOLDINGS INFORMATION
The complete portfolio holdings for the Fund are publicly available on the Funds Web site (wellsfargoadvantagefunds.com) on a monthly, 30-day or more delayed basis. The 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 sec.gov. In addition, the Funds Form N-Q may be reviewed and copied at the SECs 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.
40 | Wells Fargo Advantage Multi-Sector Income Fund | Other Information (Unaudited) |
BOARD OF TRUSTEES
The following table provides basic information about the Board of Trustees (the Trustees) and Officers of the Fund. Each of the Trustees and Officers listed below acts in identical capacities for the Wells Fargo Advantage family of funds, which consists of 137 funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust, and four closed-end funds, including the Fund (collectively the Fund Complex). 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. The Board of Trustees is classified into three classes of which one is elected annually. Each Trustee serves a three-year term concurrent with the class from which the Trustee is elected. Each Officer serves an indefinite term.
Independent Trustees
Name and Year of Birth |
Position Held and Length of Service |
Principal Occupations During Past Five Years | Other Directorships During | |||
Peter G. Gordon (Born 1942) |
Trustee, since 2010; Chairman, since 2010 (Lead Trustee since 2010) | Co-Founder, Retired Chairman, President and CEO of Crystal Geyser Water Company. Trustee Emeritus, Colby College | Asset Allocation Trust | |||
Isaiah Harris, Jr. (Born 1952) |
Trustee, since 2010 | Retired. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Mr. Harris is a certified public accountant. | CIGNA Corporation; Deluxe Corporation; Asset Allocation Trust | |||
Judith M. Johnson (Born 1949) |
Trustee, since 2010 | Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant. | Asset Allocation Trust | |||
Leroy Keith, Jr. (Born 1939) |
Trustee, since 2003 | Chairman, Bloc Global Services (development and construction). Trustee of the Evergreen Funds from 1983 to 2010. Former Managing Director, Almanac Capital Management (commodities firm), former Partner, Stonington Partners, Inc. (private equity fund), former Director, Obagi Medical Products Co. and former Director, Lincoln Educational Services. | Trustee, Virtus Fund Complex (consisting of 40 portfolios as of 12/31/11); Asset Allocation Trust | |||
David F. Larcker (Born 1950) |
Trustee, since 2010 | James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of Corporate Governance Research Program and Senior Faculty 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. | Asset Allocation Trust | |||
Olivia S. Mitchell (Born 1953) |
Trustee, since 2010 | International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Whartons Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993. | Asset Allocation Trust |
Other Information (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 41 |
Name and Year of Birth |
Position Held and Length of Service |
Principal Occupations During Past Five Years | Other Directorships During | |||
Timothy J. Penny (Born 1951) |
Trustee, since 2010 | President and CEO of Southern Minnesota Initiative 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. | Asset Allocation Trust | |||
Michael S. Scofield (Born 1943) |
Trustee, since 2003 | Served on the Investment Company Institutes Board of Governors and Executive Committee from 2008-2011 as well the Governing Council of the Independent Directors Council from 2006-2011 and the Independent Directors Council Executive Committee from 2008-2011. Chairman of the IDC from 2008-2010. Institutional Investor (Fund Directions) Trustee of Year in 2007. Trustee of the Evergreen Funds (and its predecessors) from 1984 to 2010. Chairman of the Evergreen Funds from 2000-2010. Former Trustee of the Mentor Funds. Retired Attorney, Law Offices of Michael S. Scofield and former Director and Chairman, Branded Media Corporation (multi-media branding company). |
Asset Allocation Trust | |||
Donald C. Willeke (Born 1940) |
Trustee, since 2010 | Principal of the law firm of Willeke & Daniels. General Counsel of the Minneapolis Employees Retirement Fund from 1984 until its consolidation into the Minnesota Public Employees Retirement Association on June 30, 2010. Director and Vice Chair of The Free Trust (non-profit corporation). Director of the American Chestnut Foundation (non-profit corporation). | Asset Allocation Trust |
Officers
Name and Year of Birth |
Position Held and Length of Service |
Principal Occupations During Past Five Years | ||||
Karla M. Rabusch (Born 1959) |
President, since 2010 | Executive Vice President of Wells Fargo Bank, N.A. 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 (Born 1960) |
Secretary, since 2010; Chief Legal Counsel, since 2010 | Senior Vice President and Secretary of Wells Fargo Funds Management, LLC since 2001. Vice President and Managing Senior Counsel of Wells Fargo Bank, N.A. since 1996. | ||||
Kasey Phillips (Born 1970) |
Treasurer, since 2005 | Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2006 to 2010. Treasurer of the Evergreen Funds from 2005 to 2010. | ||||
David Berardi (Born 1975) |
Assistant Treasurer, since 2009 | Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Assistant Vice President of Evergreen Investment Services, Inc. from 2004 to 2008. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010. | ||||
Jeremy DePalma (Born 1974) |
Assistant Treasurer, since 2005 | Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Vice President, Evergreen Investment Services, Inc. from 2004 to 2007. Head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010. | ||||
Debra Ann Early (Born 1964) |
Chief Compliance Officer, since 2010 | Chief Compliance Officer of Wells Fargo Funds 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. |
42 | Wells Fargo Advantage Multi-Sector Income Fund | Other Information (Unaudited) |
BOARD CONSIDERATION OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS:
Under Section 15 of the Investment Company Act of 1940 (the 1940 Act), the Board of Trustees (the Board) of Wells Fargo Advantage Multi-Sector Income Fund (the Fund), all the members of which have no direct or indirect interest in the investment advisory and sub-advisory agreements and are not interested persons of the Fund, as defined in the 1940 Act (the Independent Trustees), must determine whether to approve the continuation of the Funds investment advisory and sub-advisory agreements. In this regard, at an in person meeting held on March 29-30, 2012 (the Meeting), the Board reviewed and re-approved: (i) an investment advisory agreement with Wells Fargo Funds Management, LLC (Funds Management); (ii) an investment sub-advisory agreement with Wells Capital Management Incorporated (Wells Capital Management); and (iii) an investment sub-advisory agreement with First International Advisors, LLC (First International) for the Fund. The investment advisory agreement with Funds Management and the investment sub-advisory agreements with Wells Capital Management and First International (the Sub-Advisers) are collectively referred to as the Advisory Agreements.
At the Meeting, the Board considered the factors and reached the conclusions described below relating to the selection of Funds Management and the Sub-Advisers and the continuation of the Advisory Agreements. Prior to the Meeting, the Trustees conferred extensively among themselves and with representatives of Funds Management about these matters. The Board also met throughout the year and received information that was useful to them in considering the continuation of the Advisory Agreements. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately from Funds Management.
In providing information to the Board, Funds Management was guided by a detailed set of requests submitted by the Independent Trustees independent legal counsel on their behalf at the start of the Boards annual contract renewal process earlier in 2012. In approving the Advisory Agreements, the Board did not identify any particular information or consideration that was all-important or controlling, and each Trustee likely attributed different weights to various factors.
Nature, extent and quality of services
The Board received and considered various information regarding the nature, extent and quality of services provided to the Fund by Funds Management and the Sub-Advisers under the Advisory Agreements. The Board also received and considered, among other things, information about the background and experience of senior management of Funds Management, and the qualifications, backgrounds, tenures and responsibilities of the portfolio managers primarily responsible for the day-to-day portfolio management of the Fund.
The Board evaluated the ability of Funds Management and the Sub-Advisers, based on their respective financial condition, resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel. The Board further considered the compliance programs and compliance records of Funds Management and the Sub-Advisers. In addition, the Board took into account the administrative services provided to the Fund by Funds Management and its affiliates.
The Boards decision to approve the continuation of the Advisory Agreements was based on a comprehensive evaluation of information provided to it. In considering these matters, the Board considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interaction with Funds Management and the Sub-Advisers about various topics, including Funds Managements oversight of service providers. The above factors, together with those referenced below, are some of the most important, but not necessarily all, factors considered by the Board in concluding that the nature, extent and quality of the investment advisory services provided to the Fund by Funds Management and the Sub-Advisers supported the re-approval of the Advisory Agreements. Although the Board considered the continuation of the Advisory Agreements for the Fund as part of the larger process of considering the continuation of the advisory agreements for all of the funds in the complex, its decision to continue the Advisory Agreements for the Fund was ultimately made on a fund-by-fund basis.
Fund performance and expenses
The Board considered the performance results for the Fund over various time periods ended December 31, 2011. The Board also considered these results in comparison to the median performance of a universe of relevant funds (the Universe) that was determined by Lipper Inc. (Lipper) to be similar to the Fund and to other comparative data. The
Other Information (Unaudited) | Wells Fargo Advantage Multi-Sector Income Fund | 43 |
Board noted that Lipper did not provide data comparing the Funds performance to a benchmark index. Lipper is an independent provider of investment company data. The Board received a description of the methodology used by Lipper to select the funds in the Universe. The Board noted that the performance of the Fund was in range of or higher than the median performance of the Universe for the periods under review.
The Board received and considered information regarding the Funds contractual advisory fee and net operating expense ratio and its various components, including actual management fees (which reflect fee waivers, if any), transfer agent, custodian and other non-management fees. The Board also considered the ratio in comparison to the median ratio of an expense Universe and a narrower expense group of funds (each, an Expense Group) that was determined by Lipper to be similar to the Fund. The Board received a description of the methodology used by Lipper to select the funds in the Funds Expense Group. The Board noted that the net operating expense ratio of the Fund was lower than the Funds Expense Groups median net operating expense ratio.
Based on the above-referenced considerations and other factors, the Board concluded that the overall performance and expense structure of the Fund supported the re-approval of the Advisory Agreements for the Fund.
Investment advisory and sub-advisory fee rates
The Board reviewed and considered the contractual investment advisory fee rate that is payable by the Fund to Funds Management for investment advisory services (the Advisory Agreement Rate), both on a stand-alone basis and on a combined basis with the Funds administration fee rate. The Board took into account the separate administrative and other services covered by the administration fee rate. The Board also reviewed and considered the contractual investment sub-advisory fee rate that is payable by Funds Management to each Sub-Adviser for investment sub-advisory services (the Sub-Advisory Agreement Rate). In addition, the Board reviewed and considered the existing fee waiver/cap arrangements applicable to the Advisory Agreement Rate and considered the Advisory Agreement Rate after taking the waivers/caps into account (the Net Advisory Rate).
The Board received and considered information comparing the Advisory Agreement Rate and Net Advisory Rate with that of other funds in the Funds Expense Group median. The Board noted that the Advisory Agreement Rate and Net Advisory Rate for the Fund were in range of the median rates of the Funds Expense Group.
The Board also received and considered information about the nature and extent of services offered and fee rates charged by Funds Management and the Sub-Advisers to other types of clients. In this regard, the Board received information about differences between the services, and the compliance, reporting, and other legal burdens and risks of providing investment advice to registered funds and those associated with providing advice to non-registered fund clients such as collective funds or institutional separate accounts.
The Board determined that the Advisory Agreement Rate for the Fund, both before and after waivers, was reasonable in light of the Funds Expense Group information, the net expense ratio commitments, the services covered by the Advisory Agreements and other information provided. The Board also reviewed and considered each Sub-Advisory Agreement Rate and concluded that each Sub-Advisory Agreement Rate was reasonable in light of the services covered by each sub-advisory agreement and other information provided.
Profitability
The Board received and considered a profitability analysis of Funds Management, as well as an analysis of the profitability to the collective Wells Fargo businesses that provide services to the Fund. It considered that the information provided to it was necessarily estimated, and that the profitability information provided to it, especially on a fund-by-fund basis, did not necessarily provide a precise tool for evaluating the appropriateness of the Funds Advisory Agreement Rate in isolation. It noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on, among other things, the size and type of fund. The Board concluded that the profitability reported by Funds Management was not unreasonable.
The Board did not consider separate profitability information with respect to the Sub-Advisers, because, as affiliates of Funds Management, their profitability information was subsumed in the collective Wells Fargo profitability analysis provided by Funds Management.
44 | Wells Fargo Advantage Multi-Sector Income Fund | Other Information (Unaudited) |
Economies of scale
The Board considered that, in light of the fact that the Fund was not making a continuous offering of its shares, the likelihood of realizing economies of scale following the Funds initial offering was relatively low, although the Board determined to continue to monitor the Funds expense ratio and the profitability of the investment advisory agreement to Funds Management in light of future growth of the Fund.
Other benefits to Funds Management and the Sub-Advisers
The Board received and considered information regarding potential fall-out or ancillary benefits received by Funds Management and its affiliates, including the Sub-Advisers, as a result of their relationship with the Fund. Ancillary benefits could include, among others, benefits directly attributable to the relationship of Funds Management and the Sub-Advisers with the Fund and benefits potentially derived from an increase in Funds Managements and the Sub-Advisers business as a result of their relationship with the Fund (such as the ability to market to shareholders other financial products offered by Funds Management and its affiliates, including the Sub-Advisers).
Other factors and broader review
As discussed above, the Board reviews detailed materials received from Funds Management and the Sub-Advisers annually as part of the re-approval process under Section 15 of the 1940 Act and also reviews and assesses information about the quality of the services that the Fund receives throughout the year. In this regard, the Board has reviewed reports of Funds Management at each of its quarterly meetings, which include, among other things, portfolio reviews and performance reports. In addition, the Board confers with portfolio managers at various times throughout the year.
Conclusion
After considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board unanimously approved the continuation of the Advisory Agreements for an additional one-year period.
Automatic Dividend Reinvestment Plan | Wells Fargo Advantage Multi-Sector Income Fund | 45 |
AUTOMATIC DIVIDEND REINVESTMENT PLAN
All common shareholders are eligible to participate in the Automatic Dividend Reinvestment Plan (the Plan). Pursuant to the Plan, unless a common shareholder is ineligible or elects otherwise, all cash dividends and capital gains distributions are automatically reinvested by Computershare Trust Company, N.A., as agent for shareholders in administering the Plan (Plan Agent), in additional common shares of the Fund. Whenever the Fund declares an ordinary income dividend or a capital gain dividend (collectively referred to as dividends) payable either in shares or in cash, nonparticipants in the Plan will receive cash, and participants in the Plan will receive the equivalent in shares of common shares. The shares are acquired by the Plan Agent for the participants account, depending upon the circumstances described below, either (i) through receipt of additional unissued but authorized common shares from the Fund (newly issued common shares) or (ii) by purchase of outstanding common shares on the open-market (open-market purchases) on the NYSE Amex or elsewhere. If, on the payment date for any dividend or distribution, the net asset value per share of the common shares is equal to or less than the market price per common share plus estimated brokerage commissions (market premium), the Plan Agent will invest the amount of such dividend or distribution in newly issued shares on behalf of the participant. The number of newly issued common shares to be credited to the participants account will be determined by dividing the dollar amount of the dividend by the net asset value per share on the date the shares are issued, provided that the maximum discount from the then current market price per share on the date of issuance may not exceed 5%. If on the dividend payment date the net asset value per share is greater than the market value or market premium (market discount), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participant in open-market purchases. There will be no brokerage charges with respect to shares issued directly by the Fund as a result of dividends or capital gains distributions payable either in shares or in cash. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agents open-market purchases in connection with the reinvestment of dividends. The automatic reinvestment of dividends and distributions will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such dividends. All correspondence concerning the Plan should be directed to the Plan Agent at P.O. Box 43010, Providence, Rhode Island 02940-3010 or by calling 1-800-730-6001.
46 | Wells Fargo Advantage Multi-Sector Income Fund | List of Abbreviations |
The following is a list of common abbreviations for terms and entities which may have appeared in this report.
This page is intentionally left blank.
This page is intentionally left blank.
Transfer Agent, Registrar, Shareholder Servicing
Agent & Dividend Disbursing Agent
Computershare Trust Company, N.A.
P.O. Box 43010
Providence, RI 02940-3010
1-800-730-6001
Web site: wellsfargoadvantagefunds.com
Wells Fargo Funds Management, LLC, is a subsidiary of Wells Fargo & Company and is an affiliate of Wells Fargo & Companys broker/dealer subsidiaries.
NOT FDIC INSURED ¡ NO BANK GUARANTEE ¡ MAY LOSE VALUE
© 2012 Wells Fargo Funds Management, LLC. All rights reserved.
209718 06-12 SMSI/SAR159 04-12 |
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
PORTFOLIO MANAGERS
Niklas Nordenfelt, CFA
Mr. Nordenfelt is jointly responsible for managing the Fund, which he has managed since 2010. Mr. Nordenfelt joined Wells Capital Management in 2003, where he is a senior portfolio manager and co-manager of the Sutter High Yield Fixed Income team. Education: B.S., Economics, University of California, Berkeley.
Philip Susser
Mr. Susser is jointly responsible for managing the Fund, which he has managed since 2010. Mr. Susser joined Wells Capital Management in 2001, where he is a senior portfolio manager and co-manager of the Sutter High Yield Fixed Income team. Education: B.A., Economics, University of Pennsylvania; J.D., University of Michigan.
Janet S. Rilling, CFA, CPA
Mr. Rilling is jointly responsible for managing the Fund, which she has managed since 2011. Ms. Rilling has been with Wells Capital Management or one of its affiliate firms since 2005. Ms Rilling has been working in the investment management field since 1995.
Michael J. Bray, CFA
Mr. Bray is jointly responsible for managing the Fund, which he has managed since 2011. Mr. Bray joined Wells Capital Management in 2005 as a portfolio manager on the Customized Fixed Income Team specializing in government, agency and interest rate derivative instruments. Prior to joining Wells Capital Management, Mr. Bray was a principal responsible for multi-currency yield curve arbitrage business at Windward Capital, LLC from 2004 to 2005. From 1996 to 2004, he was the managing director at State Street Research and Management, focusing on mutual fund and institutional account management. Education: B.S., Math and Actuarial Science, University of Connecticut, Storrs; M.B.A., Pennsylvania State University.
Christopher Kauffman, CFA
Mr. Kauffman is jointly responsible for managing Fund, which he has managed since 2008. Mr. Kauffman has been with Wells Capital Management or an affiliate firm since 2003, where he is a senior portfolio manager with Wells Fargo affiliate Tattersall Advisory Group (TAG). Education: B.A., Finance and Economics, Masters, Business Administration with an emphasis in finance, Washington University in St. Louis, MO.
Anthony Norris
Mr. Norris is jointly responsible for managing Fund, which he has managed since 2003. Mr. Norris is Managing Director, Chief Investment Officer, and Senior Portfolio Manager with First International Advisors. He has been with Wells Capital or one of its affiliate firms since 1990.
Peter Wilson
Mr. Wilson is jointly responsible for managing the Fund, which he has managed since 2003. Mr. Wilson is Managing Director, Chief Operating Officer, and Senior Portfolio Manager with First International Advisors in London. Mr. Wilson has been with Wells Capital or one of its affiliate firms since 1989. He was educated in Canada, Hong Kong and England.
Michael Lee
Mr. Lee is jointly responsible for managing the Fund, which he has managed since 2003. Mr. Lee joined First International Advisors in 1992, where he currently serves as a Director of Trading and Senior Portfolio Manager.
Alex Perrin
Mr. Perrin is jointly responsible for managing the Fund, which he has managed since 2003. Mr. Perrin joined First International Advisors in 1992, where he currently serves as Director of Research and Senior Portfolio Manager.
Christopher Wightman
Mr. Wightman is jointly responsible for managing the Fund, which he has managed since 2012. Mr. Wightman joined First International Advisors in 2011, where he currently serves as Senior Portfolio Manager. Prior to joining First International Advisors, he served as a senior investment manager specializing in global fixed income strategies at JP Morgan Chase.
OTHER FUNDS AND ACCOUNTS MANAGED
The following table provides information about the registered investment companies and other pooled investment vehicles and accounts managed by the portfolio manager of the Fund as of the Funds most recent period ended April 30, 2012.
Niklas Nordenfelt
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
6 | 4 | 22 | |||||||||
Total assets of above accounts (millions) |
$ | 2,678.9 | $ | 380.8 | $ | 2,281.2 | ||||||
performance based fee accounts: |
||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
0 | 1 | 0 | |||||||||
Total assets of above accounts (millions) |
$ | 0.0 | $ | 287.8 | $ | 0.0 |
Philip Susser
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
6 | 4 | 22 | |||||||||
Total assets of above accounts (millions) |
$ | 2,678.9 | $ | 380.8 | $ | 2,281.2 | ||||||
performance based fee accounts: |
||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
0 | 1 | 0 | |||||||||
Total assets of above accounts (millions) |
$ | 0.0 | $ | 287.8 | $ | 0.0 | ||||||
Janet S. Rilling | ||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
2 | 2 | 28 | |||||||||
Total assets of above accounts (millions) |
$ | 798 | $ | 328 | $ | 2,557 | ||||||
performance based fee accounts: |
||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
0 | 0 | 0 | |||||||||
Total assets of above accounts (millions) |
$ | 0 | $ | 0 | $ | 0 | ||||||
Michael J. Bray | ||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
6 | 2 | 8 | |||||||||
Total assets of above accounts (millions) |
$ | 4,593 | $ | 1,443 | $ | 2,539 | ||||||
performance based fee accounts: |
||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
0 | 0 | 0 | |||||||||
Total assets of above accounts (millions) |
$ | 0 | $ | 0 | $ | 0 | ||||||
Christopher Kauffman | ||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
5 | 0 | 2 | |||||||||
Total assets of above accounts (millions) |
$ | 5,716 | $ | 0 | $ | 251 | ||||||
performance based fee accounts: |
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
0 | 0 | 0 | |||||||||
Total assets of above accounts (millions) |
$ | 0 | $ | 0 | $ | 0 | ||||||
Anthony Norris | ||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
5 | 5 | 23 | |||||||||
Total assets of above accounts (millions) |
$ | 2,262 | $ | 458 | $ | 3,943 | ||||||
performance based fee accounts: |
||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
0 | 0 | 0 | |||||||||
Total assets of above accounts (millions) |
$ | 0 | $ | 0 | $ | 0 | ||||||
Peter Wilson | ||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
5 | 5 | 23 | |||||||||
Total assets of above accounts (millions) |
$ | 2,262 | $ | 458 | $ | 3,943 | ||||||
performance based fee accounts: |
||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
0 | 0 | 0 | |||||||||
Total assets of above accounts (millions) |
$ | 0 | $ | 0 | $ | 0 | ||||||
Michael Lee | ||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
5 | 5 | 23 | |||||||||
Total assets of above accounts (millions) |
$ | 2,262 | $ | 458 | $ | 3,943 | ||||||
performance based fee accounts: |
||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
0 | 0 | 0 | |||||||||
Total assets of above accounts (millions) |
$ | 0 | $ | 0 | $ | 0 |
Alex Perrin
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
5 | 5 | 23 | |||||||||
Total assets of above accounts (millions) |
$ | 2,262 | $ | 458 | $ | 3,943 | ||||||
performance based fee accounts: |
||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
0 | 0 | 0 | |||||||||
Total assets of above accounts (millions) |
$ | 0 | $ | 0 | $ | 0 | ||||||
Christopher Wightman |
||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
5 | 5 | 23 | |||||||||
Total assets of above accounts (millions) |
$ | 2,262 | $ | 458 | $ | 3,943 | ||||||
performance based fee accounts: |
||||||||||||
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
||||||||||
I manage the following types of accounts: |
||||||||||||
Number of above accounts |
0 | 0 | 0 | |||||||||
Total assets of above accounts (millions) |
$ | 0 | $ | 0 | $ | 0 |
MATERIAL CONFLICTS OF INTEREST
The Portfolio Managers face inherent conflicts of interest in their day-to-day management of the Funds and other accounts because the Funds may have different investment objectives, strategies and risk profiles than the other accounts managed by the Portfolio Managers. For instance, to the extent that the Portfolio Managers manage accounts with different investment strategies than the Funds, they may from time to time be inclined to purchase securities, including initial public offerings, for one account but not for a Fund. Additionally, some of the accounts managed by the Portfolio Managers may have different fee structures, including performance fees, which are or have the potential to be higher or lower, in some cases significantly higher or lower, than the fees paid by the Funds. The differences in fee structures may provide an incentive to the Portfolio Managers to allocate more favorable trades to the higher-paying accounts.
To minimize the effects of these inherent conflicts of interest, the Sub-Advisers have adopted and implemented policies and procedures, including brokerage and trade allocation policies and procedures, that they believe address the potential conflicts associated with managing portfolios for multiple clients and ensure that all clients are treated fairly and equitably. Additionally, some of the Sub-Advisers minimize inherent conflicts of interest by assigning the Portfolio Managers to accounts having similar objectives. Accordingly, security block purchases are allocated to all accounts with similar objectives in proportionate weightings. Furthermore, the Sub-Advisers have adopted a Code of Ethics under Rule 17j-1 of the 1940 Act and Rule 204A-1 under the Investment Advisers Act of 1940 (the Advisers Act) to address potential conflicts associated with managing the Funds and any personal accounts the Portfolio Managers may maintain.
First International Advisors
First International Advisors Portfolio Managers often provide investment management for separate accounts advised in the same or similar investment style as that provided to mutual funds. While management of multiple accounts could potentially lead to conflicts of interest over various issues such as trade allocation, fee disparities and research acquisition, First International Advisors has implemented policies and procedures for the express purpose of ensuring that clients are treated fairly and that potential conflicts of interest are minimized.
Wells Capital Management
Wells Capital Managements Portfolio Managers often provide investment management for separate accounts advised in the same or similar investment style as that provided to mutual funds. While management of multiple accounts could potentially lead to conflicts of interest over various issues such as trade allocation, fee disparities and research acquisition, Wells Capital Management has implemented policies and procedures for the express purpose of ensuring that clients are treated fairly and that potential conflicts of interest are minimized.
COMPENSATION
The Portfolio Managers were compensated by their employing sub-adviser from the fees the Adviser paid the Sub-Adviser using the following compensation structure:
First International Advisors Compensation. The compensation structure for First International Advisorss Portfolio Managers includes a competitive fixed base salary plus variable incentives (First International Advisors utilizes investment management compensation surveys as confirmation). Incentive bonuses are typically tied to pretax relative investment performance of all accounts under his or her management within acceptable risk parameters. Relative investment performance is generally evaluated for 1, 3, and 5 year performance results, with a predominant weighting on the 3-and 5- year time periods, versus the relevant benchmarks and/or peer groups consistent with the investment style. This evaluation takes into account relative performance of the accounts to each accounts individual benchmark and/or the relative composite performance of all accounts to one or more relevant benchmarks consistent with the overall investment style. In the case of each Fund, the benchmark(s) against which the performance of the Funds portfolio may be compared for these purposes generally are indicated in the Performance sections of the Prospectuses.
Wells Capital Management Compensation. The compensation structure for Wells Capital Managements Portfolio Managers includes a competitive fixed base salary plus variable incentives (Wells Capital Management utilizes investment management compensation surveys as confirmation). Incentive bonuses are typically tied to pretax relative investment performance of all accounts under his or her management within acceptable risk parameters. Relative investment performance is generally evaluated for 1, 3, and 5 year performance results, with a predominant weighting on the 3- and 5- year time periods, versus the relevant benchmarks and/or peer groups consistent with the investment style. This evaluation takes into account relative performance of the accounts to each accounts individual benchmark and/or the relative composite performance of all accounts to one or more relevant benchmarks consistent with the overall investment style. In the case of each Fund, the benchmark(s) against which the performance of the Funds portfolio may be compared for these purposes generally are indicated in the Performance sections of the Prospectuses.
BENEFICIAL OWNERSHIP OF THE FUND
The following table shows for each Portfolio Manager the dollar value of the Fund beneficially owned by the Portfolio Manager as of April 30, 2012:
Wells Fargo Advantage Multi-Sector Income Fund | ||
Niklas Nordenfelt |
none | |
Phil Susser |
none | |
Janet S. Rilling |
none | |
Michael J. Bray |
none | |
Christopher Kauffman |
none | |
Tony Norris |
none | |
Peter Wilson |
none | |
Michael Lee |
none | |
Alex Perrin |
none | |
Christopher Wightman |
none |
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 Committees consideration.
The shareholder must submit any such recommendation (a Shareholder Recommendation) in writing to the Trust, to the attention of the Trusts 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 shareholders name as it appears on the Trusts 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 Advantage Multi-Sector Income Fund (the Trust) disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing of this report.
(b) There were no significant changes in the Trusts internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second quarter of the period covered by this report that materially affected, or is reasonably likely to materially affect, the registrants 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 Advantage Multi-Sector Income Fund | ||
By: | /s/ Karla M. Rabusch | |
Karla M. Rabusch | ||
President | ||
Date: | June 25, 2012 |
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: | June 25, 2012 |
By: | /s/ Kasey L. Phillips | |
Kasey L. Phillips | ||
Treasurer | ||
Date: | June 25, 2012 |