-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cy/DclYUVBEyLORkTIIoumgzOPj6cNv2tt8w8eNBi5y6zAxpwBjFGYW8qegtGC6Z co8N65LynNyDnYecTQLKWg== 0000950123-10-020510.txt : 20100303 0000950123-10-020510.hdr.sgml : 20100303 20100303152919 ACCESSION NUMBER: 0000950123-10-020510 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20091231 FILED AS OF DATE: 20100303 DATE AS OF CHANGE: 20100303 EFFECTIVENESS DATE: 20100303 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WELLS FARGO VARIABLE TRUST CENTRAL INDEX KEY: 0001081402 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-09255 FILM NUMBER: 10653269 BUSINESS ADDRESS: STREET 1: 525 MARKET STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94163 BUSINESS PHONE: 800-222-8222 MAIL ADDRESS: STREET 1: 525 MARKET STREET STREET 2: 12TH FLOOR CITY: SAN FRANCISCO STATE: CA ZIP: 94105 0001081402 S000007215 VT Asset Allocation Fund C000019811 VT Asset Allocation Fund 0001081402 S000007218 VT Discovery Fund C000019816 VT Discovery Fund 0001081402 S000007219 VT Total Return Bond Fund C000019817 VT Total Return Bond Fund 0001081402 S000007220 VT Large Company Growth Fund C000019818 VT Large Company Growth Fund 0001081402 S000007221 VT Equity Income Fund C000019819 VT Equity Income Fund 0001081402 S000007222 VT International Core Fund C000019820 VT International Core Fund 0001081402 S000007223 VT C&B Large Cap Value Fund C000019821 VT C&B Large Cap Value Fund 0001081402 S000007224 VT Large Company Core Fund C000019822 VT Large Company Core Fund 0001081402 S000007225 VT Money Market Fund C000019823 VT Money Market Fund 0001081402 S000007226 VT Small/Mid Cap Value Fund C000019824 VT Small/Mid Cap Value Fund 0001081402 S000007227 VT Opportunity Fund C000019825 VT Opportunity Fund 0001081402 S000007228 VT Small Cap Growth Fund C000019826 VT Small Cap Growth Fund N-CSR 1 g56208_variabletrustncsr.txt G56208_VARIABLETRUSTNCSR UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-09255 Wells Fargo Variable Trust (Exact name of registrant as specified in charter) 525 Market St., San Francisco, CA 94105 (Address of principal executive offices) (Zip code) C. David Messman Wells Fargo Funds Management, LLC 525 Market St., San Francisco, CA 94105 (Name and address of agent for service) Registrant's telephone number, including area code: 800-643-9691 Date of fiscal year end: December 31, 2009 Date of reporting period: December 31, 2009 ITEM 1. REPORT TO SHAREHOLDERS =============================== (WELLS FARGO ADVANTAGE FUNDS LOGO) (GRAPHIC) REDUCE CLUTTER. SAVE TREES. Sign up for electronic delivery of prospectuses and shareholder reports at www.wellsfargo.com/advantagedelivery (GRAPHIC) Annual Report December 31, 2009 WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS - - WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND - - WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND - - WELLS FARGO ADVANTAGE VT DISCOVERY FUND(SM) - - WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND - - WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND - - WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND - - WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND - - WELLS FARGO ADVANTAGE VT MONEY MARKET FUND - - WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND(SM) - - WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND - - WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND - - WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND REDUCE CLUTTER. SAVE TREES. Sign up for electronic delivery of prospectuses and shareholder reports at www.wellsfargo.com/advantagedelivery Contents LETTER TO SHAREHOLDERS ................................................... 2 PERFORMANCE HIGHLIGHTS Wells Fargo Advantage VT Asset Allocation Fund ........................... 6 Wells Fargo Advantage VT C&B Large Cap Value Fund ........................ 10 Wells Fargo Advantage VT Discovery Fund .................................. 14 Wells Fargo Advantage VT Equity Income Fund .............................. 20 Wells Fargo Advantage VT International Core Fund ......................... 26 Wells Fargo Advantage VT Large Company Core Fund ......................... 30 Wells Fargo Advantage VT Large Company Growth Fund ....................... 34 Wells Fargo Advantage VT Money Market Fund ............................... 38 Wells Fargo Advantage VT Opportunity Fund ................................ 44 Wells Fargo Advantage VT Small Cap Growth Fund ........................... 48 Wells Fargo Advantage VT Small/Mid Cap Value Fund ........................ 54 Wells Fargo Advantage VT Total Return Bond Fund .......................... 60 FUND EXPENSES ............................................................ 64 PORTFOLIO OF INVESTMENTS Wells Fargo Advantage VT Asset Allocation Fund ........................... 66 Wells Fargo Advantage VT C&B Large Cap Value Fund ........................ 82 Wells Fargo Advantage VT Discovery Fund .................................. 87 Wells Fargo Advantage VT Equity Income Fund .............................. 92 Wells Fargo Advantage VT International Core Fund ......................... 97 Wells Fargo Advantage VT Large Company Core Fund ......................... 102 Wells Fargo Advantage VT Large Company Growth Fund ....................... 106 Wells Fargo Advantage VT Money Market Fund ............................... 110 Wells Fargo Advantage VT Opportunity Fund ................................ 114 Wells Fargo Advantage VT Small Cap Growth Fund ........................... 120 Wells Fargo Advantage VT Small/Mid Cap Value Fund ........................ 126 Wells Fargo Advantage VT Total Return Bond Fund .......................... 131 FINANCIAL STATEMENTS Statements of Assets and Liabilities ..................................... 144 Statements of Operations ................................................. 148 Statements of Changes in Net Assets ...................................... 152 Financial Highlights ..................................................... 158 NOTES TO FINANCIAL STATEMENTS ............................................ 162 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM .................. 179 OTHER INFORMATION ........................................................ 180 LIST OF ABBREVIATIONS .................................................... 183
The views expressed are as of December 31, 2009, and are those of the Fund managers. Any reference to a specific security in this report is not a recommendation to purchase or sell any specific security or adopt any investment strategy. The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally, or the WELLS FARGO ADVANTAGE VARIABLE TRUST FUNDS. NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE (GRAPHIC) WELLS FARGO INVESTMENT HISTORY 1971 INTRODUCED ONE OF THE FIRST INSTITUTIONAL INDEX FUNDS. 1978 ONE OF THE FIRST FIRMS TO APPLY ASSET ALLOCATION THEORY TO INVESTMENT PORTFOLIO MANAGEMENT. 1985 ONE OF THE FIRST FIRMS TO CREATE A THREE-WAY ASSET ALLOCATION FUND THAT "TILTS" INVESTMENTS TOWARD PORTIONS OF THE MARKET THAT OUR PROPRIETARY MODELS INDICATE WILL PERFORM BETTER. 1994 INTRODUCED TARGET DATE FUNDS THAT AUTOMATICALLY REALLOCATE THE ASSET MIX OVER SPECIFIC TIME HORIZONS. 1997 WELLS FARGO LAUNCHED THE WEALTHBUILDER PORTFOLIOS, A UNIQUE "FUND OF FUNDS" THAT USES FLEXIBLE ASSET ALLOCATION STRATEGIES TO SHIFT ASSETS. 1999 REORGANIZED THE NORWEST ADVANTAGE FUNDS(R) AND STAGECOACH FUNDS(R) INTO THE WELLS FARGO FUNDS(R). 2003 EXPANDED FIXED-INCOME, SMALL CAP, AND EMERGING MARKETS LINEUP FROM MONTGOMERY ASSET MANAGEMENT, LLC. 2004 ADDED ADDITIONAL LARGE CAP AND MID CAP FUNDS TO THE LINEUP BY ADOPTING THE COOKE & BIELER VALUE FUNDS. 2005 WELLS FARGO FUNDS MERGED WITH STRONG FUNDS TO BECOME WELLS FARGO ADVANTAGE FUNDS, FORMING A FUND FAMILY OF OVER 110 FUNDS AND PLACING IT AMONG THE TOP 20 MUTUAL FUND FAMILIES IN THE UNITED STATES. 2006 ENHANCED AND RENAMED THE WELLS FARGO ADVANTAGE OUTLOOK FUNDS(SM) TO THE WELLS FARGO ADVANTAGE DOW JONES TARGET DATE FUNDS(SM), WHICH SEEK TO REPLICATE RETURNS OF THE APPROPRIATE DOW JONES TARGET DATE INDEXES, THE FIRST LIFE CYCLE INDEXES IN THE INVESTMENT INDUSTRY. WELLS FARGO ADVANTAGE FUNDS(R) WELLS FARGO ADVANTAGE FUNDS skillfully guides institutions, financial advisors, and individuals through the investment terrain to help them reach their financial objectives. Everything we do on behalf of our investors is backed by our unique combination of qualifications. STRENGTH Our organization is built on the standards of integrity and service established by our parent company--Wells Fargo & Company--more than 150 years ago. Our diverse family of mutual funds covers a broad spectrum of investment styles and asset classes. And, because we're part of a widely diversified financial enterprise, we offer the scale and resources to help investors succeed, providing access to complementary solutions such as separately managed accounts, college investing plans, and retirement plans. EXPERTISE Our approach to investing is guided by the belief that agile, independent investment teams--each with its own distinct strengths and disciplines--provide a superior level of insight and expertise. Each team is free to concentrate on managing money through well-defined philosophies and processes that have proven to be consistent and repeatable over time. PARTNERSHIP Our collaborative approach is built around understanding the needs and goals of our clients. By adhering to core principles of sound judgment and steady guidance, we support you through every stage of the investment decision process. FOR 529 PLANS, AN INVESTOR'S OR A DESIGNATED BENEFICIARY'S HOME STATE MAY OFFER STATE TAX OR OTHER BENEFITS THAT ARE ONLY AVAILABLE FOR INVESTMENTS IN THAT STATE'S QUALIFIED TUITION PROGRAM. PLEASE CONSIDER THIS BEFORE INVESTING. CAREFULLY CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES BEFORE INVESTING. FOR A CURRENT PROSPECTUS FOR WELLS FARGO ADVANTAGE FUNDS OR A CURRENT PROGRAM DESCRIPTION FOR CERTAIN 529 COLLEGE SAVINGS PLANS, CONTAINING THIS AND OTHER INFORMATION, VISIT www.wellsfargo.com/advantagefunds. READ IT CAREFULLY BEFORE INVESTING. Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Managed Account Services and WELLS FARGO ADVANTAGE FUNDS(R) and to certain 529 college savings plans. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds and shares in the 529 plans are distributed by WELLS FARGO FUNDS DISTRIBUTOR, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company. NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE NOT PART OF THE ANNUAL REPORT. WELLS FARGO ADVANTAGE FUNDS OFFERS MORE THAN 110 MUTUAL FUNDS ACROSS A WIDE RANGE OF ASSET CLASSES, REPRESENTING OVER $170 BILLION IN ASSETS UNDER MANAGEMENT, AS OF DECEMBER 31, 2009. EQUITY FUNDS Asia Pacific Fund C&B Large Cap Value Fund C&B Mid Cap Value Fund Capital Growth Fund Common Stock Fund Discovery Fund+ Diversified Equity Fund Diversified Small Cap Fund Emerging Growth Fund Emerging Markets Equity Fund Endeavor Select Fund+ Enterprise Fund+ Equity Income Fund Equity Value Fund Growth Fund Growth Equity Fund Index Fund International Core Fund International Equity Fund International Value Fund Large Cap Appreciation Fund Large Cap Growth Fund Large Company Core Fund Large Company Growth Fund Large Company Value Fund Mid Cap Disciplined Fund Mid Cap Growth Fund Opportunity Fund+ Small Cap Disciplined Fund Small Cap Growth Fund Small Cap Opportunities Fund Small Cap Value Fund Small Company Growth Fund Small Company Value Fund Small/Mid Cap Value Fund Social Sustainability Fund+ Specialized Financial Services Fund Specialized Technology Fund U.S. Value Fund BOND FUNDS California Limited-Term Tax-Free Fund California Tax-Free Fund Colorado Tax-Free Fund Diversified Bond Fund Government Securities Fund(1) High Income Fund Income Plus Fund Inflation-Protected Bond Fund Intermediate Tax/AMT-Free Fund Minnesota Tax-Free Fund Municipal Bond Fund Short Duration Government Bond Fund(1) Short-Term Bond Fund Short-Term High Yield Bond Fund Short-Term Municipal Bond Fund Stable Income Fund Strategic Income Fund Total Return Bond Fund Ultra Short-Term Income Fund Ultra Short-Term Municipal Income Fund Wisconsin Tax-Free Fund ASSET ALLOCATION FUNDS Aggressive Allocation Fund Asset Allocation Fund Conservative Allocation Fund Growth Balanced Fund Moderate Balanced Fund WealthBuilder Conservative Allocation Portfolio+ WealthBuilder Equity Portfolio+ WealthBuilder Growth Allocation Portfolio+ WealthBuilder Growth Balanced Portfolio+ WealthBuilder Moderate Balanced Portfolio+ WealthBuilder Tactical Equity Portfolio+ Target Today Fund(2)+ Target 2010 Fund(2)+ Target 2015 Fund(2)+ Target 2020 Fund(2)+ Target 2025 Fund(2)+ Target 2030 Fund(2)+ Target 2035 Fund(2)+ Target 2040 Fund(2)+ Target 2045 Fund(2)+ Target 2050 Fund(2)+ MONEY MARKET FUNDS 100% Treasury Money Market Fund(1) California Municipal Market Fund California Municipal Market Trust Cash Investment Money Market Fund Government Money Market Fund(1) Heritage Money Market Fund+ Minnesota Money Market Fund Money Market Fund Money Market Trust Municipal Money Market Fund National Tax-Free Money Market Fund National Tax-Free Money Market Trust Overland Express Sweep Fund+ Prime Investment Money Market Fund Treasury Plus Money Market Fund(1) VARIABLE TRUST FUNDS(3) VT Asset Allocation Fund VT C&B Large Cap Value Fund VT Discovery Fund+ VT Equity Income Fund VT International Core Fund VT Large Company Core Fund VT Large Company Growth Fund VT Money Market Fund VT Opportunity Fund+ VT Small Cap Growth Fund VT Small/Mid Cap Value Fund VT Total Return Bond Fund AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE WELLS FARGO ADVANTAGE MONEY MARKET FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN A MONEY MARKET FUND. - ---------- (1.) The U.S. government guarantee applies to certain of the underlying securities and NOT to shares of the Fund. (2.) The full name of this Fund series is the WELLS FARGO ADVANTAGE DOW JONES TARGET DATE FUNDS(SM). (3.) The Variable Trust Funds are generally available only through insurance company variable contracts. + In this report, the WELLS FARGO ADVANTAGE DISCOVERY FUND(SM), WELLS FARGO ADVANTAGE ENDEAVOR SELECT FUND(SM), WELLS FARGO ADVANTAGE ENTERPRISE FUND(SM), WELLS FARGO ADVANTAGE OPPORTUNITY FUND(SM), WELLS FARGO ADVANTAGE SOCIAL SUSTAINABILITY FUND(SM), WELLS FARGO ADVANTAGE WEALTHBUILDER CONSERVATIVE ALLOCATION PORTFOLIOSM, WELLS FARGO ADVANTAGE WEALTHBUILDER EQUITY PORTFOLIOSM, WELLS FARGO ADVANTAGE WEALTHBUILDER GROWTH ALLOCATION PORTFOLIOSM, WELLS FARGO ADVANTAGE WEALTHBUILDER GROWTH BALANCED PORTFOLIOSM, WELLS FARGO ADVANTAGE WEALTHBUILDER MODERATE BALANCED PORTFOLIOSM, WELLS FARGO ADVANTAGE WEALTHBUILDER TACTICAL EQUITY PORTFOLIOSM, WELLS FARGO ADVANTAGE DOW JONES TARGET TODAY FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2010 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2015 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2020 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2025 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2030 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2035 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2040 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2045 FUND(SM), WELLS FARGO ADVANTAGE DOW JONES TARGET 2050 FUND(SM), WELLS FARGO ADVANTAGE HERITAGE MONEY MARKET FUND(SM), WELLS FARGO ADVANTAGE OVERLAND EXPRESS SWEEP FUND(SM), WELLS FARGO ADVANTAGE VT DISCOVERY FUND(SM), AND WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND(SM) are referred to as the Discovery Fund, Endeavor Select Fund, Enterprise Fund, Opportunity Fund, Social Sustainability Fund, WealthBuilder Conservative Allocation Portfolio, WealthBuilder Equity Portfolio, WealthBuilder Growth Allocation Portfolio, WealthBuilder Growth Balanced Portfolio, WealthBuilder Moderate Balanced Portfolio, WealthBuilder Tactical Equity Portfolio, Target Today Fund, Target 2010 Fund, Target 2015 Fund, Target 2020 Fund, Target 2025 Fund, Target 2030 Fund, Target 2035 Fund, Target 2040 Fund, Target 2045 Fund, Target 2050 Fund, Heritage Money Market Fund, Overland Express Sweep Fund, VT Discovery Fund, and VT Opportunity Fund, respectively. NOT PART OF THE ANNUAL REPORT. 2 Wells Fargo Advantage Variable Trust Funds Letter to Shareholders (PHOTO OF KARLA M. RABUSCH) KARLA M. RABUSCH, President WELLS FARGO ADVANTAGE FUNDS HOWEVER, EARLY SIGNS OF POTENTIAL ECONOMIC IMPROVEMENT BEGAN TO EMERGE IN THE SPRING, SPARKING THE STRONGEST RALLY SINCE THE 1930S. POSITIVE ECONOMIC GROWTH RESUMED IN THE THIRD QUARTER OF 2009, FOLLOWING FOUR CONSECUTIVE QUARTERS OF NEGATIVE ECONOMIC GROWTH FOR THE FIRST TIME IN AT LEAST 60 YEARS. Dear Valued Shareholder: We are pleased to provide you with this annual report for the Wells Fargo Advantage Variable Trust Funds for the 12-month period that ended December 31, 2009. The period brought welcome signs of an economic recovery, sparking a sharp rally in the financial markets that ended a streak of six consecutive quarterly declines. We believe that the sharp reversal that occurred in the financial markets during the 12-month period underscores the importance of maintaining a disciplined, long-term investment strategy. Although periods of volatility can be challenging for investors, staying focused on a long-term strategy based on individual goals and risk tolerance can help avoid missing potential periods of strong recovery. SIGNS OF ECONOMIC IMPROVEMENT SPARKED A SUSTAINED MARKET RALLY. During the early part of the 12-month period, the stock market continued to tumble. Fallout from the credit crisis continued amid mounting fears that the economy had fallen into recession. In the fall of 2008, fear had gripped the financial markets after Lehman Brothers filed for bankruptcy and the government enacted emergency measures to rescue AIG, Fannie Mae, Freddie Mac, and other large financial institutions. Volatility continued into 2009, rising to unprecedented heights as the global financial system froze up and investors feared a total economic collapse. By March 2009, the stock market fell to levels that hadn't been seen since 1996. However, early signs of potential economic improvement began to emerge in the spring, sparking the strongest rally since the 1930s. Concerns about potential nationalization of the banking system kept volatility elevated early in 2009, but the release of bank stress tests in May seemed to alleviate those concerns. Stocks continued to advance through summer and into fall, with seven consecutive months of positive returns for the S&P 500 Index--its second-longest stretch in a decade. The markets saw a slight correction during October 2009, as volatility began to climb again on questions about the sustainability of the economic improvement. However, the equity markets closed out the 12-month period with solid gains in both November and December. ECONOMIC GROWTH TURNED POSITIVE AFTER SEVERE CONTRACTION. Positive economic growth resumed in the third quarter of 2009, following four consecutive quarters of negative economic growth for the first time in at least 60 years. Gross Domestic Product growth was 2.2% for the third quarter, the strongest since 2007. The consensus among economists was that the recession that began in December 2007 had likely ended during the second quarter of 2009. However, with much of the growth attributable to government stimulus, questions remained over the sustainability of the recovery. By the end of the 12-month period, the National Bureau of Economic Research had not declared an official end to the recession. UNEMPLOYMENT REMAINED HIGH, BUT OTHER ECONOMIC INDICATORS IMPROVED. The unemployment rate rose during the 12-month period, reaching 10.2% in October 2009--its highest level in more than 25 years--before edging down to close the year at 10.0%. The pace of job losses had slowed as the period came to a close. The Labor Department reported that 85,000 jobs were lost in December Wells Fargo Advantage Variable Trust Funds 3 Letter to Shareholders and revised its figures for November to show a gain of 4,000 jobs--the first increase since the start of the recession. Still, since the start of the recession, nearly 8 million jobs had been lost by the end of the 12-month period. Although unemployment remained high, other economic statistics began to show signs of improvement. Industrial production, manufacturing, and consumer sentiment had all improved significantly as the 12-month period came to a close. Retail sales improved in the latter months of the period, helped in part by the "Cash for Clunkers" program that temporarily boosted auto sales. Home sales and prices also stabilized and began to show signs of improvement in many areas of the country, spurred in part by the government's $8,000 tax credit for first-time home buyers. THE FED CONTINUED TO FOCUS ON ECONOMIC STIMULUS. Despite extensive quantitative easing measures by the Federal Reserve, bank lending did not expand during the 12-month period. This indicates that the trillions of dollars of government stimulus that were added to the monetary system might not have an inflationary impact in the near term. In the second half of the period, however, debate began to escalate over the need for the Fed to outline an "exit strategy" from its stimulus programs. Despite that debate, the Federal Open Market Committee (FOMC) held the federal funds rate at the range of 0% to 0.25% that it first targeted in December 2008. The Fed concluded its purchases of longer-term Treasuries in October 2009 but continued to buy mortgage-backed securities, with that program slated to end in March 2010. In its final statement during the 12-month period, the FOMC noted the signs of economic improvement but reiterated that it was likely to keep the federal funds rate at exceptionally low levels for an extended period because of the continued substantial economic slack. EQUITY MARKETS EXPERIENCED EXTREME VOLATILITY BUT REBOUNDED IN MARCH. For the 12-month period, the equity markets can be split into three distinct sub-periods. Stocks fell sharply from the beginning of the period until early March 2009, continuing the precipitous declines of 2008. The broad market, as measured by the S&P 500 Index, began the period in the wake of a nearly 37% decline during 2008. The declines continued through March 9, when the market reversed abruptly amid talk that several large banks would report stronger-than-expected earnings during the first quarter. Those reports helped dispel investor fears of potential bank nationalization and sparked the biggest rally in the equity markets since 1938, with the S&P 500 Index surging 23% in 13 trading days. That rally moderated but persisted through the end of 2009, with the S&P 500 Index gaining 65% from the March low through December 31, 2009. For the full 12-month period, the S&P 500 Index gained 26.5%--its best annual gain since 2003--and the Dow Jones Industrial Average rose 18.8%. Among domestic equity indices, the tech-heavy NASDAQ Composite Index was the leader, with a 43.9% return over the 12-month period due to the strength of the rebound in technology stocks in 2009. 4 Wells Fargo Advantage Variable Trust Funds Letter to Shareholders Mid cap stocks significantly led in performance for 2009, while large cap stocks slightly outpaced small caps. The Russell Midcap(R) Index1 gained 40.5% during the year, while the Russell 1000(R) Index2 of large cap stocks rose 28.4% and the Russell 2000(R) Index3 of small cap stocks advanced 27.2%. Market cap leadership shifted throughout the 12-month period, however. Large cap stocks led during the early months as investors rotated into larger, more stable companies during the market decline. Leadership then shifted to small caps, which outperformed during the sharp rally that ensued as investors' risk appetites returned. As the rally moderated in the final months of the period, leadership shifted back to large caps. For the 12-month period, the growth investment style significantly outperformed the value investment style across all market capitalizations, as measured by the Russell indices, benefiting from the growth indices' significant exposure to the information technology sector and lower exposure to the financials sector. DON'T LET SHORT-TERM VOLATILITY DERAIL LONG-TERM INVESTMENT GOALS. The 12-month period that ended December 31, 2009, brought a welcome reprieve from the volatility of 2008. The rapid rebound in market performance that began in early 2009 underscores the importance of maintaining focus on long-term investment goals through periods of volatility so as not to miss potential periods of strong recovery. Although periods of volatility can present challenges, experience has taught us that maintaining a long-term investment strategy based on individual goals and risk tolerance can be an effective way to plan for the future. As a whole, WELLS FARGO ADVANTAGE FUNDS(R) represents investments across a broad range of asset classes and investment styles, giving you an opportunity to create a diversified investment portfolio. Although diversification may not prevent losses in a downturn, it may help to reduce them and provide you with one way of managing risk. Our diverse family of mutual funds may also help. We offer more than 110 Funds that cover a broad spectrum of investment styles and asset classes. Thank you for choosing Wells Fargo Advantage Funds. We appreciate your confidence in us. Through each market cycle, we are committed to helping you meet your financial needs. If you have any questions about your investment, please contact your investment professional or call us at 1-800-222-8222. You may also want to visit our Web site at www.wellsfargo.com/advantagefunds. Sincerely, /s/ Karla M. Rabusch Karla M. Rabusch President WELLS FARGO ADVANTAGE FUNDS Wells Fargo Advantage Variable Trust Funds 5 Letter to Shareholders - ---------- (1.) The Russell Midcap(R) Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 25% of the total market capitalization of the Russell 1000(R) Index. You cannot invest directly in an index. (2.) The Russell 1000(R) Index measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index. You cannot invest directly in an index. (3.) The Russell 2000(R) Index measures the performance of the 2,000 smallest companies in the Russell 3000(R) Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index. You cannot invest directly in an index. 6 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND INVESTMENT OBJECTIVE The WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (the Fund) seeks long-term total return, consisting of capital appreciation and current income. INVESTMENT ADVISER Wells Fargo Funds Management, LLC SUBADVISER Wells Capital Management Incorporated PORTFOLIO MANAGERS Galen G. Blomster, CFA* Gregory T. Genung, CFA Jeffrey P. Mellas FUND INCEPTION April 15, 1994 * Effective 2/1/10, Galen G. Blomster no longer serves as a Portfolio Manager for the Fund. PERFORMANCE SUMMARY 12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2009
FUND 1 YEAR - ---- ------ VT Asset Allocation Fund 15.46% S&P 500 Index(1) 26.46% Barclays Capital 20+ Year U.S. Treasury Index(2) (21.40)% Asset Allocation Composite Index(3) 5.34%
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. NET AND GROSS EXPENSE RATIOS FOR THE VARIABLE TRUST ASSET ALLOCATION FUND ARE 1.00% AND 1.07%, RESPECTIVELY. THE INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2010 TO WAIVE FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. GROWTH OF $10,000 INVESTMENT(4) (AS OF DECEMBER 31, 2009) (PERFORMANCE GRAPH)
WELLS FARGO ADVANTAGE VT BARCLAYS CAPITAL 20+ YEAR ASSET ALLOCATION ASSET ALLOCATION FUND S&P 500 INDEX U.S. TREASURY INDEX COMPOSITE INDEX 12/31/1999 10,000 10,000 10,000 10,000 1/31/2000 9,792 9,498 10,174 9,767 2/29/2000 9,861 9,318 10,535 9,794 3/31/2000 10,572 10,229 10,930 10,514 4/30/2000 10,342 9,921 10,821 10,281 5/31/2000 10,167 9,718 10,766 10,133 6/30/2000 10,404 9,958 11,001 10,370 7/31/2000 10,361 9,802 11,218 10,354 8/31/2000 10,843 10,411 11,492 10,839 9/30/2000 10,419 9,861 11,295 10,420 10/31/2000 10,448 9,820 11,484 10,462 11/30/2000 10,004 9,046 11,873 10,108 12/31/2000 10,102 9,090 12,151 10,231 1/31/2001 10,358 9,413 12,150 10,448 2/28/2001 9,678 8,555 12,364 9,948 3/31/2001 9,208 8,013 12,265 9,538 4/30/2001 9,649 8,636 11,880 9,861 5/31/2001 9,715 8,693 11,900 9,906 6/30/2001 9,576 8,482 12,022 9,801 7/31/2001 9,620 8,398 12,497 9,897 8/31/2001 9,285 7,873 12,797 9,619 9/30/2001 8,822 7,237 12,827 9,161 10/31/2001 9,089 7,376 13,590 9,482 11/30/2001 9,400 7,941 12,870 9,716 12/31/2001 9,399 8,011 12,592 9,682 1/31/2002 9,330 7,894 12,768 9,650 2/28/2002 9,224 7,742 12,908 9,579 3/31/2002 9,340 8,033 12,312 9,617 4/30/2002 9,094 7,546 12,817 9,424 5/31/2002 9,056 7,491 12,818 9,381 6/30/2002 8,749 6,957 13,045 9,045 7/31/2002 8,298 6,415 13,458 8,736 8/31/2002 8,391 6,457 14,161 8,951 9/30/2002 7,680 5,756 14,788 8,525 10/31/2002 8,189 6,262 14,237 8,846 11/30/2002 8,580 6,630 14,121 9,127 12/31/2002 8,191 6,241 14,733 8,962 1/31/2003 8,011 6,078 14,687 8,809 2/28/2003 7,924 5,987 15,151 8,839 3/31/2003 7,974 6,044 14,898 8,829 4/30/2003 8,527 6,542 15,089 9,310 5/31/2003 8,954 6,886 16,056 9,841 6/30/2003 9,018 6,974 15,727 9,834 7/31/2003 8,995 7,098 14,107 9,531 8/31/2003 9,161 7,236 14,415 9,723 9/30/2003 9,139 7,159 15,206 9,874 10/31/2003 9,513 7,564 14,736 10,085 11/30/2003 9,584 7,630 14,822 10,159 12/31/2003 10,001 8,030 14,998 10,525 1/31/2004 10,177 8,178 15,300 10,724 2/29/2004 10,313 8,291 15,631 10,905 3/31/2004 10,202 8,166 15,871 10,871 4/30/2004 9,961 8,038 14,879 10,496 5/31/2004 10,057 8,148 14,818 10,563 6/30/2004 10,229 8,307 14,961 10,725 7/31/2004 9,962 8,032 15,236 10,589 8/31/2004 10,046 8,064 15,866 10,788 9/30/2004 10,140 8,151 16,038 10,903 10/31/2004 10,291 8,276 16,310 11,075 11/30/2004 10,601 8,611 15,906 11,232 12/31/2004 10,936 8,903 16,344 11,583 1/31/2005 10,784 8,686 16,920 11,575 2/28/2005 10,944 8,869 16,696 11,657 3/31/2005 10,768 8,712 16,583 11,500 4/30/2005 10,658 8,547 17,231 11,547 5/31/2005 10,989 8,819 17,759 11,906 6/30/2005 11,036 8,831 18,119 12,011 7/31/2005 11,323 9,160 17,576 12,133 8/31/2005 11,289 9,076 18,164 12,226 9/30/2005 11,276 9,150 17,514 12,109 10/31/2005 11,066 8,997 17,132 11,880 11/30/2005 11,425 9,337 17,250 12,178 12/31/2005 11,481 9,340 17,747 12,319 1/31/2006 11,692 9,588 17,524 12,451 2/28/2006 11,754 9,614 17,737 12,529 3/31/2006 11,755 9,733 16,911 12,387 4/30/2006 11,817 9,864 16,439 12,347 5/31/2006 11,525 9,580 16,455 12,135 6/30/2006 11,552 9,593 16,612 12,189 7/31/2006 11,639 9,652 16,961 12,335 8/31/2006 11,927 9,881 17,500 12,664 9/30/2006 12,211 10,136 17,838 12,956 10/31/2006 12,564 10,466 17,988 13,252 11/30/2006 12,799 10,665 18,417 13,525 12/31/2006 12,875 10,814 17,911 13,488 1/31/2007 13,002 10,978 17,718 13,550 2/28/2007 12,857 10,762 18,345 13,579 3/31/2007 12,930 10,883 18,024 13,573 4/30/2007 13,415 11,365 18,172 13,977 5/31/2007 13,754 11,762 17,781 14,145 6/30/2007 13,559 11,566 17,596 13,943 7/31/2007 13,459 11,208 18,150 13,858 8/31/2007 13,721 11,376 18,486 14,082 9/30/2007 14,052 11,802 18,543 14,412 10/31/2007 14,268 11,989 18,829 14,637 11/30/2007 13,967 11,488 19,838 14,579 12/31/2007 13,853 11,409 19,729 14,484 1/31/2008 13,143 10,724 20,131 14,079 2/28/2008 12,746 10,376 20,097 13,791 3/31/2008 12,775 10,331 20,430 13,844 4/30/2008 13,213 10,834 19,955 14,118 5/31/2008 13,261 10,975 19,467 14,086 6/30/2008 12,351 10,050 19,940 13,508 7/31/2008 12,208 9,965 19,816 13,404 8/31/2008 12,416 10,109 20,447 13,687 9/30/2008 11,567 9,208 20,727 13,028 10/31/2008 9,943 7,662 20,308 11,608 11/30/2008 9,492 7,112 23,258 11,778 12/31/2008 9,820 7,188 26,382 12,482 1/31/2009 8,849 6,582 22,928 11,198 2/28/2009 8,027 5,881 22,577 10,413 3/31/2009 8,651 6,396 23,512 11,133 4/30/2009 9,224 7,008 21,906 11,468 5/31/2009 9,585 7,400 21,128 11,690 6/30/2009 9,614 7,415 21,303 11,743 7/31/2009 10,233 7,976 21,398 12,297 8/31/2009 10,595 8,264 21,895 12,677 9/30/2009 10,988 8,572 22,434 13,086 10/31/2009 10,741 8,413 21,891 12,813 11/30/2009 11,267 8,918 22,112 13,326 12/31/2009 11,337 9,090 20,736 13,149
- ---------- (1.) The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index with each stock's weight in the Index proportionate to its market value. You cannot invest directly in an Index. (2.) The Barclays Capital 20+ Year U.S. Treasury Index is an unmanaged index composed of securities in the U.S. Treasury Index with maturities of 20 years or greater. You cannot invest directly in an Index. (3.) The Asset Allocation Composite Index is weighted 60% in the S&P 500 Index and 40% in the Barclays Capital 20+ Year U.S. Treasury Index. You cannot invest directly in an Index. Wells Fargo Advantage Variable Trust Funds 7 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (CONTINUED) MANAGER'S DISCUSSION FUND HIGHLIGHTS - - In contrast to last year, the Fund outperformed the Asset Allocation Composite Index and the Barclays Capital 20+ Treasury Index, while underperforming the S&P 500 Index. - - At the end of the period, the Fund was at a maximum equity overweighting, with an effective target allocation of 85% stocks and 15% bonds. - - The outperformance of stocks to bonds contributed over 10% to the performance of the Fund when compared with the neutral benchmark allocation. WHILE INVESTORS HAVE USED MANY TERMS TO DESCRIBE THE PAST 12 MONTHS, TURBULENT OR THANKFUL LIKELY TOPS THE LIST. The U.S. economic tailspin of 2008 carried through into early 2009, and investors were running out of places to hide. U.S. Treasury securities had previously rallied to unprecedentedly low yields, and money market funds were paying close to 0% interest. Stocks continued to struggle, as returns for the S&P 500 Index declined for five consecutive quarters as of the end of 2008. Investor confidence continued to erode as more evidence of PONZI schemes and fraud surfaced, along with increases in bank seizures and bankruptcy filings. A new round of fiscal stimulus was passed by the Obama administration, but it would take time for that to work its way into the system. At one point, the U.S. government owned 36% of Citigroup, and there seemed to be no support in sight as the S&P 500 Index was down over 23% year to date as of March 8, 2009. The adage states that "the darkest hour is just before dawn," and this certainly seemed to be true just prior to Treasury Secretary Tim Geithner announcing his plan on March 9, 2009, to use U.S. Treasury monies for purchasing troubled securities from banks. The plan aimed to create liquidity and thaw the frozen credit markets that had brought the economy to a near standstill. Domestic and international markets immediately seemed to respond positively to the plan. There was a renewed sense of hope that the worst of the downturn had passed as we continued to move through 2009. Investors slowly gained enough confidence to come back into the equity market as the economy began to show signs of improvement. Government programs such as "Cash for Clunkers," federal mortgage loan modification assistance, and the tax credit for first-time home buyers were enacted in an effort to fortify areas of the economy that were still struggling. - ---------- (4.) The chart compares the performance of the Wells Fargo Advantage VT Asset Allocation Fund for the most recent ten years of the Fund with the Asset Allocation Composite Index, S&P 500 Index and the Barclays Capital 20+ Year U.S. Treasury Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. 8 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (CONTINUED) SECTOR DISTRIBUTION (5) (AS OF DECEMBER 31, 2009) (PIE CHART) Consumer Staples (5%) Energy (12%) Financials (15%) Health Care (6%) Industrials (7%) Information Technology (6%) Materials (2%) Telecommunication Services (4%) U.S. Treasury Securities (33%) Utilities (4%) Consumer Discretionary (6%)
The recovery was confirmed in September 2009 when Federal Reserve Chairman Ben Bernanke was quoted saying the recession was "very likely over," as consumers showed some of the first tangible signs of spending again. Banks began to repay their government aid from the Troubled Asset Relief Program (TARP), and positive trends from forward-looking indicators, such as rising industrial production and declining initial jobless claims, solidified the thinking that the economy was on the mend. In the end, the S&P 500 Index returned 26.46% for 2009 with all ten sectors contributing positively. In contrast, the U.S. Treasury intermediate and long-term bonds produced negative returns for 2009, as measured by the Barclay's Capital Treasury indices for these time periods. The Fund invests a neutral allocation in the underlying portfolio of 60% stocks and 40% bonds and employs futures contracts to tactically make adjustments to that allocation. The Tactical Asset Allocation (TAA) Model shifted to its maximum overweight equity position in late 2007, and we maintained that effective allocation of 85% stocks and 15% bonds throughout 2009. As confidence in the economic rebound expanded, investors reallocated their portfolios away from the safety of bonds and back into equities. The outperformance of stocks to bonds contributed over 10% to the performance of the Fund when compared with to the neutral benchmark allocation. TEN LARGEST PORTFOLIO HOLDINGS(6) (AS OF DECEMBER 31, 2009) US Treasury Bond, 4.50%, 08/15/2039 6.05% US Treasury Bond, 4.25%, 05/15/2039 5.12% US Treasury Bond, 4.50%, 02/15/2039 3.83% US Treasury Bond, 3.50%, 02/15/2039 3.23% US Treasury Bond, 4.50%, 05/15/2038 3.16% US Treasury Bond, 6.25%, 05/15/2030 2.83% US Treasury Bond, 5.38%, 02/15/2031 2.53% US Treasury Bond, 4.38%, 11/15/2039 2.50% US Treasury Bond, 5.00%, 05/15/2037 2.42% US Treasury Bond, 4.38%, 02/15/2038 2.31%
THERE WERE NO CHANGES TO THE FUND'S TACTICAL ALLOCATION. There were changes to the underlying indices, and we made those adjustments congruently with the S&P 500 Index and the Barclays Capital 20+ Treasury Index throughout the year. THE TAA MODEL CONTINUES TO FAVOR STOCKS RELATIVE TO BONDS. We believe that the increasing net export of U.S. goods and the fiscal stimulus put forth by the Bush and Obama administrations will continue to support economic growth and stock valuations. Interest rates are very low across the yield curve, and given the inverse relationship to bond prices, we currently see fixed-income as being more at-risk than stocks. Given the current environment, we will remain overweight stocks until the relative valuation between stocks and bonds returns to historical norms. - ---------- (5.) Sector distribution is subject to change and is calculated based on total investments of the Fund, excluding cash equivalents and collateral for securities lending. (6.) The ten largest portfolio holdings are calculated based on the value of the securities divided by total investments of the Fund. Holdings are subject to change and may have changed since the date specified. Wells Fargo Advantage Variable Trust Funds 9 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (CONTINUED) AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2009)
Expense Ratio ----------------- 6 Months* 1 Year 5 Year 10 Year Gross(7) Net(8) --------- ------ ------ ------- -------- ------ VT Asset Allocation Fund 17.93 15.46 0.72 1.26 1.07% 1.00% S&P 500 Index(1) 22.59 26.46 0.42 (0.95) Barclays Capital 20+ Year U.S. Treasury Index(2) (2.66) (21.40) 4.87 7.56 Asset Allocation Composite Index(3) 11.98 5.34 2.76 2.97
* Returns for periods of less than one year are not annualized. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED,MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. Balanced funds may invest in stocks and bonds. Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. In general, when interest rates rise, bond values fall and investors may lose principal value. The use of derivatives may reduce returns and/or increase volatility. Consult the Fund's prospectus for additional information on these and other risks. PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. - ---------- (7.) Reflects the gross expense ratio as stated in the May 1, 2009 prospectus. (8.) The investment adviser has contractually committed through April 30, 2010, to waive fees and/or reimburse expenses to the extent necessary to maintain the net operating expense ratio shown. Without these reductions, the Fund's returns would have been lower. 10 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND INVESTMENT OBJECTIVE The WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND (the Fund) seeks maximum long-term total return (current income and capital appreciation), consistent with minimizing risk to principal. INVESTMENT ADVISER Wells Fargo Funds Management, LLC SUBADVISER Cooke & Bieler, L.P. PORTFOLIO MANAGERS Kermit S. Eck, CFA Daren C. Heitman, CFA Steve Lyons, CFA Michael M. Meyer, CFA Edward W. O'Connor, CFA R. James O'Neil, CFA Mehul Trivedi, CFA FUND INCEPTION May 1, 1998 PERFORMANCE SUMMARY 12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2009
FUND 1 YEAR - ---- ------ VT C&B Large Cap Value Fund 28.90% Russell 1000 Value Index(1) 19.69%
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. NET AND GROSS EXPENSE RATIOS FOR THE VARIABLE TRUST C&B LARGE CAP VALUE FUND ARE 1.00% AND 1.33%, RESPECTIVELY. THE INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2010 TO WAIVE FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. GROWTH OF $10,000 INVESTMENT(2) (AS OF DECEMBER 31, 2009) (PERFORMANCE GRAPH)
ADVANTAGE VT C&B LARGE CAP RUSSELL 1000 VALUE FUND VALUE INDEX 12/31/1999 10,000 10,000 1/31/2000 9,740 9,674 2/29/2000 9,285 8,955 3/31/2000 10,119 10,048 4/30/2000 9,891 9,931 5/31/2000 10,032 10,035 6/30/2000 9,756 9,577 7/31/2000 9,920 9,697 8/31/2000 10,627 10,236 9/30/2000 10,455 10,330 10/31/2000 10,705 10,584 11/30/2000 10,150 10,191 12/31/2000 10,578 10,701 1/31/2001 10,764 10,743 2/28/2001 10,448 10,444 3/31/2001 10,036 10,075 4/30/2001 10,605 10,569 5/31/2001 10,769 10,806 6/30/2001 10,467 10,566 7/31/2001 10,423 10,544 8/31/2001 9,854 10,122 9/30/2001 9,113 9,409 10/31/2001 9,310 9,328 11/30/2001 9,825 9,871 12/31/2001 9,903 10,103 1/31/2002 9,398 10,025 2/28/2002 9,343 10,041 3/31/2002 9,952 10,516 4/30/2002 9,369 10,156 5/31/2002 9,281 10,207 6/30/2002 8,690 9,620 7/31/2002 7,875 8,726 8/31/2002 7,908 8,792 9/30/2002 6,857 7,814 10/31/2002 7,433 8,393 11/30/2002 7,909 8,922 12/31/2002 7,517 8,535 1/31/2003 7,306 8,328 2/28/2003 7,094 8,106 3/31/2003 7,109 8,119 4/30/2003 7,668 8,834 5/31/2003 8,104 9,404 6/30/2003 8,252 9,522 7/31/2003 8,387 9,664 8/31/2003 8,420 9,814 9/30/2003 8,372 9,719 10/31/2003 8,834 10,313 11/30/2003 8,924 10,453 12/31/2003 9,439 11,098 1/31/2004 9,598 11,293 2/29/2004 9,858 11,535 3/31/2004 9,746 11,434 4/30/2004 9,587 11,154 5/31/2004 9,598 11,268 6/30/2004 9,750 11,534 7/31/2004 9,556 11,372 8/31/2004 9,636 11,534 9/30/2004 9,707 11,712 10/31/2004 9,776 11,907 11/30/2004 10,188 12,509 12/31/2004 10,498 12,928 1/31/2005 10,429 12,699 2/28/2005 10,671 13,119 3/31/2005 10,551 12,939 4/30/2005 10,356 12,708 5/31/2005 10,609 13,014 6/30/2005 10,631 13,156 7/31/2005 10,942 13,537 8/31/2005 10,734 13,478 9/30/2005 10,631 13,667 10/31/2005 10,446 13,320 11/30/2005 10,851 13,755 12/31/2005 10,824 13,840 1/31/2006 11,114 14,377 2/28/2006 11,149 14,465 3/31/2006 11,408 14,661 4/30/2006 11,698 15,034 5/31/2006 11,524 14,654 6/30/2006 11,432 14,748 7/31/2006 11,490 15,106 8/31/2006 11,886 15,359 9/30/2006 12,283 15,665 10/31/2006 12,728 16,178 11/30/2006 13,033 16,547 12/31/2006 13,219 16,919 1/31/2007 13,430 17,135 2/28/2007 13,054 16,868 3/31/2007 13,088 17,129 4/30/2007 13,630 17,762 5/31/2007 13,924 18,402 6/30/2007 13,772 17,972 7/31/2007 13,299 17,141 8/31/2007 13,251 17,333 9/30/2007 13,743 17,929 10/31/2007 13,850 17,931 11/30/2007 13,388 17,054 12/31/2007 13,064 16,889 1/31/2008 12,517 16,213 2/28/2008 11,994 15,534 3/31/2008 12,058 15,417 4/30/2008 12,535 16,168 5/31/2008 12,571 16,143 6/30/2008 11,327 14,597 7/31/2008 11,603 14,545 8/31/2008 11,842 14,792 9/30/2008 11,084 13,705 10/31/2008 8,872 11,333 11/30/2008 8,138 10,520 12/31/2008 8,489 10,666 1/31/2009 7,717 9,439 2/28/2009 6,871 8,178 3/31/2009 7,471 8,878 4/30/2009 8,418 9,829 5/31/2009 8,722 10,437 6/30/2009 8,874 10,360 7/31/2009 9,618 11,208 8/31/2009 10,094 11,794 9/30/2009 10,545 12,250 10/31/2009 10,275 11,875 11/30/2009 10,802 12,544 12/31/2009 10,943 12,766
- ---------- (1.) The Russell 1000 Value Index measures performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. You cannot invest directly in an Index. (2.) The chart compares the performance of the WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND for the most recent ten years of the Fund with the Russell 1000 Value Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Wells Fargo Advantage Variable Trust Funds 11 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND (CONTINUED) MANAGER'S DISCUSSION FUND HIGHLIGHTS - - The Fund's performance was well ahead of its benchmark. - - Outperformance was attributable to the Fund's sector allocation, especially its underweight in utilities and energy securities and overweight in technology and media and services. - - Stock selection was a minor drag. THE U.S. STOCK MARKET DELIVERED SOLID PERFORMANCE FOR THE 12-MONTH PERIOD, AS DID THE FUND. The Fund's relative return was well ahead of its benchmark for the period and even outperformed during the first quarter of 2009, when the market was still struggling. We were especially pleased that the Fund continued to perform well during the recovery period, when lower-quality stocks were dominating the market's recovery. We attribute the Fund's outperformance to two factors: holdings in the Fund were skewed modestly in a relative sense toward medium-sized companies that outperformed during the period, and the Fund's sector allocations were solid contributors and even offset some of the negative stock selection impact that inevitably occurs in a low-quality, rally environment. Our bottom-up research efforts coupled with our commitment to understanding sector-specific fundamentals led us to underweight utilities and energy (dominated by big integrated oil companies). With these two groups comprising approximately 25% of the Russell 1000 Value Index and underperforming significantly, the contribution to relative performance from having limited exposure was meaningful. These underweightings were offset by overweights in economically-sensitive sectors like industrial manufacturing, consumer discretionary, and technology. Once again, through our bottom-up process during the past few years, we identified numerous attractively valued stocks of high-quality companies with average cyclicality, including NVR, Manpower, Flextronics, Illinois Tool Works, and Tyco Electronics. We consciously made these decisions and were willing to take positions in companies with economic sensitivity because we believed that they were high enough quality to withstand tough times and provided good value relative to normal levels of profitability. SECTOR DISTRIBUTION(3) (AS DECEMBER 31, 2009) (PIE CHART) Consumer Discretionary (16%) Consumer Staples (13%) Energy (5%) Financials (18%) Health Care (12%) Industrials (20%) Information Technology (11%) Telecommunication Services (3%) Materials (2%)
- ---------- (3.) Sector distribution is subject to change and is calculated based on the total common stock investments of the Fund. 12 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND (CONTINUED) TEN LARGEST EQUITY HOLDINGS(4) (AS OF DECEMBER 31, 2009) American Express Company 3.52% Omnicom Group Incorporated 3.46% State Street Corporation 3.46% Exxon Mobil Corporation 3.43% Quest Diagnostics Incorporated 3.32% Colgate-Palmolive Company 3.26% Johnson & Johnson 2.92% Vodafone Group plc ADR 2.68% Dover Corporation 2.43% Kohl's Corporation 2.41%
OUR BOTTOM-UP, RESEARCH INTENSIVE PROCESS PROVIDED US WITH OPPORTUNITIES TO INVEST IN QUALITY INVESTMENTS. Beyond adding to existing holdings, we also established new positions in Axis Capital, Chevron, Chubb, Republic Services, and United Parcel Service B. To make room for these opportunities, we eliminated Dell; the company's margin recovery potential turned out to be less than what we thought it would be and we believed that it was limited by an increasingly competitive PC market combined with a less PC-centric computing world. In addition, we eliminated Old Republic (ORI) holdings to make room for Chubb, based on our view that Old Republic's upside was diminished by the changing nature of its mortgage insurance business. WE EXPECT THE INVESTMENT ENVIRONMENT TO BECOME MORE CHALLENGING IN THE YEAR AHEAD. We recognize the current momentum in the market, signs of improving economic conditions, and the support provided by an accommodative Fed and expansionary fiscal policies, but we expect the investment environment to become more of a grind in 2010. With the S&P 500 Index up 65% from its March 2009 low, valuations are no longer compelling, from our perspective. Given current valuations, it appears that underlying expectations for earnings recovery are approaching, if not already at, a typically more optimistic level. With ongoing economic challenges posed by continuing systemic deleveraging, persistent unemployment, and a government that could be constrained by massive deficits, we are not convinced that near-term fundamentals are completely up to the potential pressures. We believe that we have come to the point where underlying fundamentals matter. Going forward we envision an environment marked by ups and downs in which winners and losers are clearly distinguished by their underlying fundamental improvement relative to expectations. In such an environment, decisions made at the individual security level become especially important. Our disciplined, focused, and committed approach remains the same as we strive to meet the economic challenges before us. - ---------- (4.) The ten largest portfolio holdings are calculated based on the value of the securities divided by total investments of the Fund. Holdings are subject to change and may have changed since the date specified. Wells Fargo Advantage Variable Trust Funds 13 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT C&B LARGE CAP VALUE FUND (CONTINUED) AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2009)
Expense Ratio ----------------- 6 Months* 1 Year 5 Year 10 Year Gross(5) Net(6) --------- ------ ------ ------- -------- ------ VT C&B Large Cap Value Fund 23.31 28.90 0.83 0.90 1.33% 1.00% Russell 1000 Value Index1 23.23 19.69 (0.25) 2.47
* Returns for periods of less than one year are not annualized. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED,MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. Please keep in mind that high double-digit returns were primarily achieved during favorable market conditions. You should not expect that such favorable returns can be consistently achieved. A Fund's performance, especially for very short time periods, should not be the sole factor in making your investment decision. Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. The use of derivatives may reduce returns and/or increase volatility. Consult the Fund's prospectus for additional information on these and other risks. PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS INCLUDING INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. - ---------- (5.) Reflects the gross expense ratio as stated in the May 1, 2009 prospectus. (6.) The investment adviser has contractually committed through April 30, 2010, to waive fees and/or reimburse expenses to the extent necessary to maintain the net operating expense ratio shown. Without these reductions, the Fund's returns would have been lower. 14 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT DISCOVERY FUND INVESTMENT OBJECTIVE The WELLS FARGO ADVANTAGE VT DISCOVERY FUND (the Fund) seeks long-term capital appreciation. INVESTMENT ADVISER Wells Fargo Funds Management, LLC SUBADVISER Wells Capital Management Incorporated PORTFOLIO MANAGERS James M. Leach, CFA Thomas J. Pence, CFA FUND INCEPTION May 8, 1992 PERFORMANCE SUMMARY 12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2009
FUND 1 YEAR - ---- ------ VT Discovery Fund 40.30% Russell 2500 Growth Index(1) 41.66%
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. NET AND GROSS EXPENSE RATIOS FOR THE VARIABLE TRUST DISCOVERY FUND ARE 1.15% AND 1.28%, RESPECTIVELY. THE INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2010 TO WAIVE FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. GROWTH OF $10,000 INVESTMENT(2) (AS OF DECEMBER 31, 2009) (PERFORMANCE GRAPH)
WELLS FARGO ADVANTAGE VT RUSSELL 2500 DISCOVERY FUND GROWTH INDEX 12/31/1999 10,000 10,000 1/31/2000 9,605 9,944 2/29/2000 11,081 12,495 3/31/2000 11,169 11,515 4/30/2000 10,641 10,393 5/31/2000 10,773 9,467 6/30/2000 11,178 10,719 7/31/2000 11,415 9,841 8/31/2000 11,722 11,123 9/30/2000 11,125 10,404 10/31/2000 10,589 9,761 11/30/2000 9,719 7,901 12/31/2000 10,439 8,391 1/31/2001 11,142 8,934 2/28/2001 10,404 7,556 3/31/2001 10,132 6,720 4/30/2001 11,151 7,744 5/31/2001 11,097 7,968 6/30/2001 11,455 8,149 7/31/2001 10,824 7,548 8/31/2001 10,308 7,046 9/30/2001 9,255 5,943 10/31/2001 9,876 6,529 11/30/2001 10,413 7,093 12/31/2001 10,866 7,482 1/31/2002 10,834 7,162 2/28/2002 10,645 6,720 3/31/2002 11,350 7,261 4/30/2002 11,024 7,020 5/31/2002 10,971 6,666 6/30/2002 10,371 6,053 7/31/2002 9,623 5,301 8/31/2002 9,623 5,300 9/30/2002 9,076 4,899 10/31/2002 9,592 5,181 11/30/2002 10,087 5,663 12/31/2002 9,560 5,305 1/31/2003 9,286 5,189 2/28/2003 9,276 5,068 3/31/2003 9,392 5,135 4/30/2003 10,044 5,583 5/31/2003 10,771 6,175 6/30/2003 10,813 6,302 7/31/2003 11,592 6,722 8/31/2003 12,361 7,082 9/30/2003 11,950 6,930 10/31/2003 13,003 7,500 11/30/2003 13,193 7,754 12/31/2003 13,329 7,762 1/31/2004 13,814 8,086 2/29/2004 14,119 8,161 3/31/2004 13,961 8,189 4/30/2004 13,393 7,842 5/31/2004 13,677 8,005 6/30/2004 14,067 8,200 7/31/2004 12,950 7,559 8/31/2004 12,477 7,407 9/30/2004 13,414 7,741 10/31/2004 13,919 7,960 11/30/2004 14,983 8,488 12/31/2004 15,425 8,895 1/31/2005 14,782 8,581 2/28/2005 14,814 8,752 3/31/2005 14,460 8,510 4/30/2005 13,510 8,050 5/31/2005 14,721 8,586 6/30/2005 15,303 8,812 7/31/2005 16,258 9,385 8/31/2005 16,212 9,277 9/30/2005 16,654 9,367 10/31/2005 15,816 9,061 11/30/2005 16,444 9,567 12/31/2005 16,701 9,622 1/31/2006 17,982 10,350 2/28/2006 17,970 10,319 3/31/2006 18,518 10,759 4/30/2006 18,890 10,792 5/31/2006 17,574 10,149 6/30/2006 17,784 10,100 7/31/2006 17,097 9,609 8/31/2006 17,539 9,839 9/30/2006 17,679 9,979 10/31/2006 18,436 10,471 11/30/2006 19,275 10,827 12/31/2006 19,146 10,802 1/31/2007 19,892 11,145 2/28/2007 19,857 11,140 3/31/2007 20,323 11,238 4/30/2007 20,695 11,583 5/31/2007 22,128 12,139 6/30/2007 22,233 12,023 7/31/2007 22,046 11,519 8/31/2007 22,349 11,696 9/30/2007 23,770 12,102 10/31/2007 24,504 12,603 11/30/2007 23,129 11,859 12/31/2007 23,421 11,849 1/31/2008 20,777 10,883 2/28/2008 20,113 10,665 3/31/2008 19,426 10,535 4/30/2008 21,394 11,170 5/31/2008 23,490 11,759 6/30/2008 22,850 10,917 7/31/2008 22,105 10,878 8/31/2008 22,035 11,061 9/30/2008 18,681 9,597 10/31/2008 14,872 7,435 11/30/2008 12,729 6,597 12/31/2008 13,032 6,931 1/31/2009 12,368 6,514 2/28/2009 11,530 5,950 3/31/2009 12,590 6,517 4/30/2009 13,766 7,487 5/31/2009 14,313 7,756 6/30/2009 14,418 7,937 7/31/2009 15,816 8,554 8/31/2009 15,990 8,728 9/30/2009 17,050 9,300 10/31/2009 16,095 8,789 11/30/2009 16,934 9,115 12/31/2009 18,285 9,818
- ---------- (1.) The Russell 2500 Growth Index measures the performance of those Russell 2500 companies with higher price-to-book ratios and higher forecasted growth values. You cannot invest directly in an Index. (2.) The chart compares the performance of the WELLS FARGO ADVANTAGE VT DISCOVERY FUND for the most recent ten years of the Fund with the Russell 2500 Growth Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Wells Fargo Advantage Variable Trust Funds 15 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT DISCOVERY FUND (CONTINUED) MANAGER'S DISCUSSION FUND HIGHLIGHTS - - Despite our solid returns for the 12-month period, the Fund slightly underperformed its benchmark, with health care and consumer staples stocks creating the biggest headwinds. - - In our opinion, the monetary policies of central banks from around the world--in response to the global recession--circumvented a potential economic depression. Consequently, investor appetite for riskieR assets returned and capital markets began to show signs of recovery in March 2009; this scenario continued throughout the remainder of the 12-month period. - - We remain faithful to our growth investing principles of bottom-up stock selection and to maintaining a healthy balance between risk and return. AVERTING A DEPRESSION SCENARIO WITH A COORDINATED WORLDWIDE GOVERNMENT STIMULUS, EQUITY MARKETS REGAINED THEIR FOOTING AND VALUATIONS RETURNED TO WHAT WE BELIEVED TO BE HISTORICAL NORMS. Wave after wave of storm fronts followed the failure of Lehman Brothers in the fall of 2008 with plunging home values, frozen credit markets, and gusts of investor panic that led to continued weakness in the capital markets through the first part of 2009. Stinging from the losses of 2008 and fearful of missing a rally, investors welcomed the pronouncement of "green shoots" in the spring of 2009, prompting a rally in high-risk, speculative assets that was the most extreme that we have seen since late 2001. As the second quarter of 2009 matured, evidence grew that the "green shoots" rally may have gotten ahead of itself. We didn't see much in the way of fundamentals to back the rally beyond restocking depressed inventories. Investors grew weary of the idea that "less bad" economic data could continue to be taken as good news and the market took a breather. Then, by the end of summer 2009, as companies reported quarterly earnings, corporate cost cutting and tight expense control emerged as the dominant driver of results. In combination with the pronouncement by the Fed that the recession was officially over, valuations returning to normalized levels drove the markets higher toward the end of the 12-month period. TEN LARGEST EQUITY HOLDINGS(3) (AS OF DECEMBER 31, 2009) SBA Communications Corporation Class A 3.30% Equinix Incorporated 2.84% Concho Resources Incorporated 2.68% Veeco Instruments Incorporated 2.66% NetLogic Microsystems Incorporated 2.64% F5 Networks Incorporated 2.09% Neutral Tandem Incorporation 2.08% LHC Group Incorporated 2.07% Micron Technology Incorporated 2.03% Priceline.com Incorporated 2.01%
- ---------- (3.) The ten largest portfolio holdings are calculated based on the value of the securities divided by total investments of the Fund. Holdings are subject to change and may have changed since the date specified. 16 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT DISCOVERY FUND (CONTINUED) In our view, cost cutting alone cannot sustain equity returns indefinitely. Instead, we believe that a return to revenue growth is needed in order to fuel further upside to the equity markets. In looking for revenue growth, our bottom-up "Surround the Company" research process unveiled several prospects across different industry sectors to allow us to position the Fund in those stocks that we believe can grow beyond cost cutting. For example, delayed corporate spending on technology has created pent-up demand and unit growth potential. In addition, continued smart-phone penetration within the mobile-phone market will likely drive revenue growth across several different companies from the smart-phone manufacturers to the towers that carry the signals. Despite concerns about the overall health of the U.S. consumer, there are companies that can generate revenue growth either by creating value for the consumer or by tapping into previously untapped markets. At the close of the 12-month period, the Fund was overweight in information technology, energy, and telecommunications, while health care, materials, and consumer staples were underweight. SECTOR DISTRIBUTION(4) (AS OF DECEMBER 31, 2009) (PIE CHART) Telecommunication Services (7%) Consumer Discretionary (24%) Consumer Staples (3%) Energy (8%) Financials (6%) Health Care (12%) Industrials (13%) Information Technology (27%)
STOCK SELECTION WAS DIFFICULT DURING THE VOLATILITY IN THE MARKET OVER THE PAST 12 MONTHS. Health care and consumer staples detracted from Fund performance. Difficult stock selection in an uncertain political environment impacted results in the health care sector. Health care reform continues to cloud the investment landscape, but it was stock selection that was challenging. For instance, Icon plc, a contract research organization, suffered declines after concerns about a shrinking customer base emerged when two large pharmaceutical mergers were announced. The stock was sold from the portfolio with the heightened risk of customer concentration. The consumer staples sector also created a drag on performance. Concerns about access to financing during the credit crisis and unfavorable foreign exchange translation impacted shares of Central European Distribution Corp., a spirits distributor. In addition, holdings in Flowers Foods Inc. also experienced a decline as commodity prices weakened, stirring fears of pricing pressure for their products. DESPITE THE CHALLENGES IN THE RECENT PAST, WE ARE STAYING WITH OUR DISCIPLINE AND ARE UPBEAT ABOUT THE OPPORTUNITIES WE ARE CURRENTLY FINDING. Perhaps now more than ever, we are convinced of the importance of sticking with our investing principles. During our two decades of working as an investment team, we have found it is often at the point of maximum stress that conditions - ---------- (4.) Sector distribution is subject to change and is calculated based on the total common stock investments of the Fund. Wells Fargo Advantage Variable Trust Funds 17 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT DISCOVERY FUND (CONTINUED) begin to change. True to form, market activity during the end of the summer marked an inflection point that continued through the end of the year and has us optimistic about the future. Moreover, we have spent extensive time critiquing our process and have implemented some promising enhancements. We believe that the market transitioned to a new, more rational phase. The gravitational force linking stock prices to company fundamentals gained strength with each earnings report in the second half of the 12-month period. With proactive stimulus policies in place and economic collapse averted, investors are slowly regaining focus on what ultimately drives stock prices: earnings growth. The initial surge in domestic cyclicals with questionable fundamentals--such as retailers, banks, casinos, and hotels--has surrendered to new leadership from companies with secular growth drivers. We are finding broader and more exciting opportunities from industries like technology, global infrastructure, alternative energy, materials, and telecommunications. Following our "Surround the Company" approach, we believe that many of these companies are poised to report strong results. Recognizing the improving fundamentals and sentiment, we have increased our risk allocations to "developing situations" and "valuation opportunities" in the Fund's portfolio construction. 18 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT DISCOVERY FUND (CONTINUED) AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2009)
Expense Ratio ----------------- 6 Months* 1 Year 5 Year 10 Year Gross(5) Net(6) --------- ------ ------ ------- -------- ------ VT Discovery Fund 26.82 40.30 3.46 6.22 1.28% 1.15% Russell 2500 Growth Index(1) 23.70 41.66 2.00 (0.18)
* Returns for periods of less than one year are not annualized. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. Please keep in mind that high double-digit returns were primarily achieved during favorable market conditions. You should not expect that such favorable returns can be consistently achieved. A Fund's performance, especially for very short time periods, should not be the sole factor in making your investment decision. Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. Smaller company stocks tend to be more volatile and less liquid than those of larger companies. The use of derivatives may reduce returns and/or increase volatility. Active trading results in increased turnover and trading expenses and may generate higher short-term capital gains. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to foreign investment risk. Consult the Fund's prospectus for additional information on these and other risks. PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. - ---------- (5.) Reflects the gross expense ratio as stated in the May 1, 2009 prospectus. (6.) The investment adviser has contractually committed through April 30, 2010, to waive fees and/or reimburse expenses to the extent necessary to maintain the net operating expense ratio shown. Without these reductions, the Fund's returns would have been lower. THIS PAGE IS INTENTIONALLY LEFT BLANK. 20 Wells Fargo Advantage Variable Trust Funds PERFORMANCE HIGHLIGHTS (UNAUDITED) WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND INVESTMENT OBJECTIVE The WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND (the Fund) seeks long-term capital appreciation and dividend income. INVESTMENT ADVISER Wells Fargo Funds Management, LLC SUBADVISER Wells Capital Management Incorporated PORTFOLIO MANAGERS Gary J. Dunn, CFA Robert M. Thornberg FUND INCEPTION May 6, 1996 PERFORMANCE SUMMARY 12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2009
FUND 1 YEAR - ---- ------ VT Equity Income Fund 16.86% Russell 1000 Value Index(1) 19.69%
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. NET AND GROSS EXPENSE RATIOS FOR THE VARIABLE TRUST EQUITY INCOME FUND ARE 1.00% AND 1.15%, RESPECTIVELY. THE INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2010 TO WAIVE FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. GROWTH OF $10,000 INVESTMENT(2) (AS OF DECEMBER 31, 2009) (PERFORMANCE GRAPH)
WELLS FARGO ADVANTAGE VT RUSSELL 1000 EQUITY INCOME FUND VALUE INDEX 12/31/1999 10,000 10,000 1/31/2000 9,485 9,674 2/29/2000 8,754 8,955 3/31/2000 9,627 10,048 4/30/2000 9,609 9,931 5/31/2000 9,779 10,035 6/30/2000 9,547 9,577 7/31/2000 9,370 9,697 8/31/2000 9,892 10,236 9/30/2000 9,793 10,330 10/31/2000 10,069 10,584 11/30/2000 9,727 10,191 12/31/2000 10,233 10,701 1/31/2001 10,209 10,743 2/28/2001 9,915 10,444 3/31/2001 9,364 10,075 4/30/2001 9,998 10,569 5/31/2001 10,185 10,806 6/30/2001 9,889 10,566 7/31/2001 9,792 10,544 8/31/2001 9,584 10,122 9/30/2001 8,974 9,409 10/31/2001 9,080 9,328 11/30/2001 9,571 9,871 12/31/2001 9,679 10,103 1/31/2002 9,536 10,025 2/28/2002 9,605 10,041 3/31/2002 9,935 10,516 4/30/2002 9,609 10,156 5/31/2002 9,603 10,207 6/30/2002 9,090 9,620 7/31/2002 8,262 8,726 8/31/2002 8,318 8,792 9/30/2002 7,218 7,814 10/31/2002 7,760 8,393 11/30/2002 8,246 8,922 12/31/2002 7,815 8,535 1/31/2003 7,612 8,328 2/28/2003 7,384 8,106 3/31/2003 7,404 8,119 4/30/2003 8,003 8,834 5/31/2003 8,461 9,404 6/30/2003 8,624 9,522 7/31/2003 8,779 9,664 8/31/2003 8,818 9,814 9/30/2003 8,769 9,719 10/31/2003 9,229 10,313 11/30/2003 9,328 10,453 12/31/2003 9,863 11,098 1/31/2004 10,029 11,293 2/29/2004 10,286 11,535 3/31/2004 10,172 11,434 4/30/2004 10,013 11,154 5/31/2004 10,027 11,268 6/30/2004 10,177 11,534 7/31/2004 9,971 11,372 8/31/2004 10,057 11,534 9/30/2004 10,142 11,712 10/31/2004 10,215 11,907 11/30/2004 10,642 12,509 12/31/2004 10,956 12,928 1/31/2005 10,896 12,699 2/28/2005 11,231 13,119 3/31/2005 11,014 12,939 4/30/2005 10,805 12,708 5/31/2005 11,088 13,014 6/30/2005 11,055 13,156 7/31/2005 11,393 13,537 8/31/2005 11,319 13,478 9/30/2005 11,448 13,667 10/31/2005 11,272 13,320 11/30/2005 11,604 13,755 12/31/2005 11,545 13,840 1/31/2006 11,709 14,377 2/28/2006 11,784 14,465 3/31/2006 11,858 14,661 4/30/2006 12,179 15,034 5/31/2006 11,851 14,654 6/30/2006 11,873 14,748 7/31/2006 12,122 15,106 8/31/2006 12,411 15,359 9/30/2006 12,697 15,665 10/31/2006 13,104 16,178 11/30/2006 13,353 16,547 12/31/2006 13,687 16,919 1/31/2007 13,736 17,135 2/28/2007 13,479 16,868 3/31/2007 13,675 17,129 4/30/2007 14,210 17,762 5/31/2007 14,704 18,402 6/30/2007 14,407 17,972 7/31/2007 13,869 17,141 8/31/2007 14,122 17,333 9/30/2007 14,669 17,929 10/31/2007 14,736 17,931 11/30/2007 14,198 17,054 12/31/2007 14,070 16,889 1/31/2008 13,387 16,213 2/28/2008 12,884 15,534 3/31/2008 12,768 15,417 4/30/2008 13,281 16,168 5/31/2008 13,281 16,143 6/30/2008 12,068 14,597 7/31/2008 11,994 14,545 8/31/2008 12,128 14,792 9/30/2008 11,247 13,705 10/31/2008 9,386 11,333 11/30/2008 8,882 10,520 12/31/2008 8,939 10,666 1/31/2009 8,070 9,439 2/28/2009 7,075 8,178 3/31/2009 7,771 8,878 4/30/2009 8,391 9,829 5/31/2009 8,801 10,437 6/30/2009 8,794 10,360 7/31/2009 9,408 11,208 8/31/2009 9,856 11,794 9/30/2009 10,052 12,250 10/31/2009 9,896 11,875 11/30/2009 10,393 12,544 12/31/2009 10,446 12,766
- ---------- (1.) The Russell 1000 Value Index measures performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. You cannot invest directly in an Index. (2.) The chart compares the performance of the WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND for the most recent ten years of the Fund with the Russell 1000 Value Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Wells Fargo Advantage Variable Trust Funds 21 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND (CONTINUED) MANAGER'S DISCUSSION FUND HIGHLIGHTS - - The Fund's underperformance was attributed, in part, to its more defensive holdings in telecommunications, utilities, and energy. - - Consumer discretionary holdings, Fortune Brands and McDonald's, experienced only modest gains for the year and hindered Fund performance on a relative basis, while Target was a strong performer for the Fund. In health care, Abbott Laboratories' low single-digit return was detrimental to Fund performance even as the company delivered on 12% earnings growth. - - We're hopeful that our emphasis on higher-quality, large-capitalization companies will become more attractive to investors as riskier stocks and bonds struggle under what we believe will be a slow recovery, given high unemployment, dependency on government stimulus programs, and sluggish economic growth. WE'RE KEEPING THE MARKET RALLY OF 2009 IN PERSPECTIVE. U.S. stocks closed out a tumultuous and remarkable 2009 as equities ranged from posting significant losses early in the year only to recover and generate one of the best annual returns in over five years. After the S&P 500 fell to a 12-year low in March 2009, the index rallied almost 65% to close the year with an impressive 26.5% positive total return. Stocks climbed out of a deep hole as the Federal Reserve kept short-term rates near zero and governments around the world applied significant stimulus programs to jump-start recovery from the first global recession since World War II. While the market rally provided a much-needed boost in investor confidence, the S&P 500 Index is still hovering around 1999 levels, resulting in the last ten years being dubbed the "lost decade" for stocks. The S&P 500 finished 2009 more than 25% below the record highs reached in October 2007. From October 2007 to March 2009, under what was perceived as a depression-like scenario, the broad stock market declined by more than 60%. Yet by spring 2009 some investors began to sense a recovery in the economy and the financial markets, confidence once again stirred on Wall Street, and the ensuing stock market rally paved the way to renewed optimism as we entered 2010. 22 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND (CONTINUED) TEN LARGEST EQUITY HOLDINGS(3) (AS OF DECEMBER 31, 2009) Exxon Mobil Corporation 4.57% JPMorgan Chase & Company 4.56% Chevron Corporation 4.40% ConocoPhillips 3.28% AT&T Incorporated 3.08% Bank of America Corporation 2.70% FPL Group Incorporated 2.65% Target Corporation 2.63% US Bancorp 2.61% The Travelers Companies Incorporated 2.59%
WE NOTED A WIDE DIVERGENCE IN SECTOR RETURNS FOR THE 12-MONTH PERIOD. Leading the Fund's technology group performance was IBM, which advanced 58% as earnings continued to exceed expectations during a very difficult 12-month period, while boasting its seventh consecutive year of earnings increases. Other technology holdings that exceeded 40% gains for the year included Cisco Systems, Hewlett-Packard, Intel, and Microsoft. Nokia was the one holding in the group that recorded a negative return for the 12-month period. Strong Fund returns in the materials sector were led by Air Products & Chemicals and Rohm & Haas. Rohm & Haas was bought out by Dow Chemical for cash early in the period, while Air Products rallied on expectations that the company would likely be an early beneficiary of renewed economic growth. Although energy giant ExxonMobil had a tough year, several Fund holdings in the sector did well and contributed to Fund performance; Halliburton and Chesapeake Energy both climbed in excess of 60% on beliefs that solid earnings growth would return in 2010 after reporting large declines in 2009. Following the tremendous broad market sell-off of most financial stocks, Fund holdings in the sector recorded a very respectable 16.5% return for the year. Financial holdings American Express, Ameriprise Financial, and Prudential Financial all delivered strong performance as investors realized that these companies would survive the financial meltdown, and could even generate solid operating returns once consumers and the economy rebounded from stalled spending levels. The Fund's largest financial holding, JPMorgan Chase, also had a solid year as the company's balance sheet proved to be one of the strongest in the industry. SECTOR DISTRIBUTION(4) (AS OF DECEMBER 31, 2009) (PIE CHART) Telecommunication Services (5%) Utilities (6%) Consumer Discretionary (9%) Consumer Staples (7%) Energy (18%) Financials (24%) Health Care (9%) Industrials (10%) Information Technology (9%) Materials (3%)
Consumer discretionary stocks enjoyed a particularly good year in anticipation of a return to earnings growth in 2010. While Fund holdings in the sector performed well, the returns did trail the benchmark. Both Fortune Brands and McDonald's experienced only modest gains for the year and hindered Fund performance on a relative basis, while Target - ---------- (3.) The ten largest portfolio holdings are calculated based on the value of the securities divided by total investments of the Fund. Holdings are subject to change and may have changed since the date specified. (4.) Sector distribution is subject to change and is calculated based on the total common stock investments of the Fund. Wells Fargo Advantage Variable Trust Funds 23 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND (CONTINUED) was a strong performer for the Fund. In health care, Abbott Laboratories' low single-digit return was detrimental to Fund performance even as the company delivered on 12% earnings growth. Florida utility company FPL Group only managed to break even for the period as earnings growth slowed due to the economic impact experienced in the state. As the largest wind power producer in the country, FPL is expected to deliver solid double-digit earnings growth in 2010. AS THE ECONOMIC OUTLOOK SHOWED SIGNS OF IMPROVEMENT, WE RETURNED TO THE DEPRESSED CONSUMER DISCRETIONARY SECTOR WHERE THREE NEW STOCKS WERE ADDED TO THE FUND. New positions in Best Buy, Home Depot, and VF Corp. were initiated as these high-quality market leaders appeared to be set for a solid earnings recovery. Likewise, slower growth companies in consumer staples, namely Kraft Foods and Philip Morris International, were sold. Due to potential controversial changes in the domestic health care system, we reduced the Fund's sector weighting to adjust for the increased potential for risk. IF CORPORATE AMERICA CAN GENERATE THE LEVEL OF PROFITS MANY PROFESSIONALS ARE ANTICIPATING, THEN WE BELIEVE THAT THE U.S. STOCK MARKET COULD ACHIEVE ANOTHER GOOD YEAR OF INVESTMENT RETURNS. Risk tolerance once again returned to the financial markets in 2009 as evidenced by the strong returns generated by higher-risk, lower-quality securities such as small-to mid- capitalization stocks, high-yield bonds, and junk bonds. Once the panic and flight-to-quality demand weakened, U.S. Treasury notes and bonds experienced the lowest investment returns in 40 years. By most measures, the domestic economy turned from recession to recovery by the second half of 2009. The pace of this economic recovery is still unknown, particularly given the high unemployment rate, the magnitude of current government stimulus programs, and the longevity of economic growth. In our opinion, consumer spending and the housing market remain key ingredients to the success of any recovery. We remain optimistic that slower consumer spending can be compensated for by healthier business investment, government spending, and rising net exports in this cycle. 24 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT EQUITY INCOME FUND (CONTINUED) AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2009)
Expense Ratio ----------------- 6 Months* 1 Year 5 Year 10 Year Gross(5) Net(6) --------- ------ ------ ------- -------- ------ VT Equity Income Fund 18.79 16.86 (0.95) 0.44 1.15% 1.00% Russell 1000 Value Index(1) 23.23 19.69 (0.25) 2.47
* Returns for periods of less than one year are not annualized. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED,MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. The use of derivatives may reduce returns and/or increase volatility. Consult the Fund's prospectus for additional information on these and other risks. PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. - ---------- (5.) Reflects the gross expense ratio as stated in the May 1, 2009 prospectus. (6.) The investment adviser has contractually committed through April 30, 2010, to waive fees and/or reimburse expenses to the extent necessary to maintain the net operating expense ratio shown. Without these reductions, the Fund's returns would have been lower. THIS PAGE IS INTENTIONALLY LEFT BLANK. 26 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND INVESTMENT OBJECTIVE The WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (the Fund) seeks long-term capital appreciation. INVESTMENT ADVISER Wells Fargo Funds Management, LLC SUBADVISER Evergreen Investment Management Company, LLC PORTFOLIO MANAGER Francis Claro FUND INCEPTION July 3, 2000 PERFORMANCE SUMMARY 12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2009
FUND 1 YEAR - ---- ------ VT International Core Fund 12.66% MSCI EAFE Index(1) 31.78%
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. NET AND GROSS EXPENSE RATIOS FOR THE VARIABLE TRUST INTERNATIONAL CORE FUND ARE 1.00% AND 1.64%, RESPECTIVELY. THE INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2010 TO WAIVE FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. GROWTH OF $10,000 INVESTMENT(2) (AS OF DECEMBER 31, 2009) (PERFORMANCE GRAPH)
WELLS FARGO ADVANTAGE VT INTERNATIONAL MSCI EAFE CORE FUND INDEX 7/3/2000 $10,000 $10,000 7/31/2000 $9,670 $9,503 8/31/2000 $9,870 $9,585 9/30/2000 $9,280 $9,119 10/31/2000 $9,150 $8,903 11/30/2000 $8,650 $8,569 12/31/2000 $8,967 $8,874 1/31/2001 $9,187 $8,869 2/28/2001 $8,465 $8,205 3/31/2001 $7,914 $7,658 4/30/2001 $8,315 $8,190 5/31/2001 $8,255 $7,901 6/30/2001 $8,024 $7,578 7/31/2001 $7,813 $7,440 8/31/2001 $7,594 $7,251 9/30/2001 $6,882 $6,517 10/31/2001 $7,113 $6,684 11/30/2001 $7,374 $6,930 12/31/2001 $7,524 $6,971 1/31/2002 $7,193 $6,601 2/28/2002 $7,083 $6,647 3/31/2002 $7,424 $7,007 4/30/2002 $7,424 $7,053 5/31/2002 $7,313 $7,142 6/30/2002 $6,996 $6,858 7/31/2002 $6,282 $6,181 8/31/2002 $6,232 $6,167 9/30/2002 $5,508 $5,505 10/31/2002 $5,770 $5,801 11/30/2002 $6,071 $6,064 12/31/2002 $5,800 $5,860 1/31/2003 $5,538 $5,615 2/28/2003 $5,398 $5,486 3/31/2003 $5,297 $5,379 4/30/2003 $5,770 $5,906 5/31/2003 $6,111 $6,264 6/30/2003 $6,192 $6,415 7/31/2003 $6,273 $6,570 8/31/2003 $6,444 $6,729 9/30/2003 $6,585 $6,936 10/31/2003 $6,989 $7,369 11/30/2003 $7,150 $7,533 12/31/2003 $7,624 $8,121 1/31/2004 $7,634 $8,236 2/29/2004 $7,725 $8,426 3/31/2004 $7,745 $8,473 4/30/2004 $7,483 $8,282 5/31/2004 $7,483 $8,310 6/30/2004 $7,584 $8,492 7/31/2004 $7,318 $8,216 8/31/2004 $7,307 $8,252 9/30/2004 $7,439 $8,468 10/31/2004 $7,621 $8,757 11/30/2004 $8,076 $9,355 12/31/2004 $8,359 $9,765 1/31/2005 $8,217 $9,586 2/28/2005 $8,601 $10,000 3/31/2005 $8,359 $9,749 4/30/2005 $8,177 $9,520 5/31/2005 $8,156 $9,525 6/30/2005 $8,278 $9,651 7/31/2005 $8,557 $9,947 8/31/2005 $8,755 $10,198 9/30/2005 $8,953 $10,652 10/31/2005 $8,692 $10,341 11/30/2005 $8,765 $10,594 12/31/2005 $9,167 $11,087 1/31/2006 $9,749 $11,768 2/28/2006 $9,643 $11,742 3/31/2006 $9,950 $12,129 4/30/2006 $10,363 $12,708 5/31/2006 $9,876 $12,215 6/30/2006 $9,887 $12,214 7/31/2006 $9,961 $12,335 8/31/2006 $10,270 $12,674 9/30/2006 $10,281 $12,694 10/31/2006 $10,624 $13,187 11/30/2006 $10,889 $13,581 12/31/2006 $11,074 $14,008 1/31/2007 $11,209 $14,102 2/28/2007 $11,333 $14,216 3/31/2007 $11,579 $14,579 4/30/2007 $11,961 $15,226 5/31/2007 $12,331 $15,493 6/30/2007 $12,499 $15,512 7/31/2007 $12,164 $15,284 8/31/2007 $12,032 $15,045 9/30/2007 $12,802 $15,850 10/31/2007 $13,332 $16,473 11/30/2007 $12,790 $15,931 12/31/2007 $12,477 $15,572 1/31/2008 $11,345 $14,134 2/28/2008 $11,333 $14,336 3/31/2008 $11,237 $14,185 4/30/2008 $11,875 $14,955 5/31/2008 $12,104 $15,101 6/30/2008 $11,128 $13,866 7/31/2008 $10,599 $13,421 8/31/2008 $10,140 $12,877 9/30/2008 $8,746 $11,015 10/31/2008 $7,030 $8,792 11/30/2008 $6,586 $8,317 12/31/2008 $7,061 $8,817 1/31/2009 $6,203 $7,952 2/28/2009 $5,591 $7,136 3/31/2009 $5,836 $7,588 4/30/2009 $6,188 $8,560 5/31/2009 $6,862 $9,573 6/30/2009 $6,617 $9,518 7/31/2009 $7,243 $10,387 8/31/2009 $7,449 $10,952 9/30/2009 $7,797 $11,371 10/31/2009 $7,480 $11,229 11/30/2009 $7,749 $11,454 12/31/2009 $7,955 $11,619
- ---------- (1.) The Morgan Stanley Capital International Europe, Australasia and Far East ("MSCI EAFE") Stock Index is an unmanaged group of securities widely regarded by investors to be representations of the stock markets of Europe, Australasia and the Far East. You cannot invest directly in an Index. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI. (2.) The chart compares the performance of the WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND for the life of the Fund with the MSCI EAFE Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Wells Fargo Advantage Variable Trust Funds 27 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (CONTINUED) MANAGER'S DISCUSSION FUND HIGHLIGHTS - - The Fund's underperformance of its benchmark was attributable in large part to the period from early March to the end of June. By early March, we had positioned the portfolio to potentially withstand the extreme negative fundamentals, both economic and corporate. We emphasized strength of balance sheets and free cash flow yields. At the market inflection point, we were underweight the financials sector, particularly in the problem-plagued banking industry; utilities, because of the sharp reduction in demand and in pricing power; and consumer discretionary, reflecting the fall in consumer spending. - - When the markets dramatically changed direction on March 9, we had little exposure to the lower-quality companies that rose sharply, and performance lagged until the end of June. - - As the year progressed, we began to see confirmation of improving fundamentals, and we increased the Fund's exposure to more economically sensitive holdings. In the third quarter, there was a strong improvement in performance relative to the benchmark, and the fund closely tracked the index in the fourth quarter. 2009 WAS AN UNPRECEDENTED YEAR IN THE MARKETS. 2009 was a year of exceptional, abnormal and even some record breaking market movements. Early in the year, global economies continued to stumble, with equity markets following in lock-step, reflecting the weak fundamentals facing most companies--those in the banking industry in particular. A total collapse of the banking system and a slide into deeper recession were avoided by global government actions. These actions provided both economic and corporate stimulus, leading to gradually improving fundamentals and to renewed optimism for investors that the worst was over. Markets continued their upward trend in the second half of the year. COUNTRY ALLOCATION(3) (AS OF DECEMBER 31, 2009) (PIE CHART) United States (2%) Eastern Asia (5%) Japan (15%) Australia (3%) Canada (6%) Continental Europe (42%) Latin America and Caribbean (1%) Russia (2%) Scandinavia (3%) United Kingdom (21%)
WE MADE SIGNIFICANT STRATEGIC CHANGES IN RESPONSE TO IMPROVING MARKET CONDITIONS. We made significant changes to the Fund during the reporting period. Overweights in the more defensive telecommunication services and health care sectors were moved to underweights, and the utilities sector was furthered lightened. These shifts resulted in meaningful increases in industrials, information technology (IT), materials and consumer discretionary. In financials, - ---------- (3.) Country allocation is subject to change and is calculated based on the total investments of the Fund, excluding cash and cash equivalents. 28 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (CONTINUED) we switched some exposure as we went through the year from companies with stronger balance sheets--such as reinsurer Munich Reinsurance and stock exchange Deutsche Boerse--back to some banks, such as HSBC and Barclays. In industrials, we added to a number of temporary employment companies in a number of countries. These included Hays in the United Kingdom and Randstad and USG People in the Netherlands. This industry is often a leading economic indicator, as employers tend to add temporary workers at the early stages of a recovery, and the improving outlook for employment pushed the stocks upward. Our increase in IT included a number of Chinese holdings, the largest of which were SINA, the online advertising leader, and Baidu, the Internet search engine. Other increases included Elpida Memory, the Japanese leader in DRAM, and Nippon Electric Glass, the Japanese maker of glass for LCD panels. Nippon Electric Glass benefited from increased demand for LCDs, especially from China, which provided incentives for consumers to upgrade from their cathode-ray tube sets. TEN LARGEST EQUITY HOLDINGS(4) (AS OF DECEMBER 31, 2009) Randstad Holdings NV 2.42% Sina Corporation 1.95% HSBC Holdings plc 1.90% Daimler AG 1.80% Sumitomo Heavy Industries Limited 1.78% Nestle SA 1.74% Rio Tinto plc 1.71% Canadian Natural Resources Limited 1.70% Swatch Group AG Class B 1.69% BP plc 1.65%
These changes enabled the fund to more fully participate in the market strength of the latter quarters. Over the period, the strongest contributions came from our underweight to utilities. IT also helped with strong performance from SINA, Baidu and Elpida Memory. The largest detractions stemmed from stock selection in the financials sector, which rallied sharply from the March period, and from our overweight in telecommunication services. A CONTINUED ACCOMMODATIVE BIAS BY CENTRAL BANKERS SHOULD LEAD TO IMPROVED EMPLOYMENT, AND WITH IT STRONGER CORPORATE EARNINGS. While difficulties and challenges remain, the outturn for 2009 left investors with a much sweeter taste and the expectation of a more rewarding environment, at least in the mid-term. For the first six months of 2010, we expect to see the cyclical recovery in international markets continue. We believe that central bankers in developed nations will continue to retain an accommodative bias toward fiscal and monetary policy until employment numbers actually improve, versus when they are expected to improve. We also believe that forecasted corporate earnings in 2010 and 2011 will be better than expected. From our point of view, the best way to play the resulting effects of an overly stimulated economy will be to emphasize cyclical growth stocks. - ---------- (4.) The ten largest portfolio holdings are calculated based on the value of the securities divided by total investments of the Fund. Holdings are subject to change and may have changed since the date specified. Wells Fargo Advantage Variable Trust Funds 29 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (CONTINUED) AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2009)
Expense Ratio ----------------- 6 Months* 1 Year 5 Year Life of Fund Gross(5) Net(6) --------- ------ ------ ------------ -------- ------ VT International Core Fund 20.22 12.66 (0.99) (2.38) 1.64% 1.00% MSCI EAFE Index(1) 22.07 31.78 3.54 1.58
* Returns for periods of less than one year are not annualized. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. Foreign investments are especially volatile, and can rise or fall dramatically due to differences in the political and economic conditions of the host country. These risks are generally intensified in emerging markets. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to small company investment risk. Consult the Fund's prospectus for additional information on these and other risks. PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. - ---------- (5.) Reflects the gross expense ratio as stated in the May 1, 2009 prospectus. (6.) The investment adviser has contractually committed through April 30, 2010, to waive fees and/or reimburse expenses to the extent necessary to maintain the net operating expense ratio shown. Without these reductions, the Fund's returns would have been lower. 30 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND INVESTMENT OBJECTIVE The WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND (the Fund) seeks total return comprised of long-term capital appreciation and current income. INVESTMENT ADVISER Wells Fargo Funds Management, LLC SUBADVISER Matrix Asset Advisors, Inc. PORTFOLIO MANAGER David A. Katz, CFA FUND INCEPTION April 12, 1994 PERFORMANCE SUMMARY 12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2009
FUND 1 YEAR - ---- ------ VT Large Company Core Fund 37.01% S&P 500 Index(1) 26.46%
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. NET AND GROSS EXPENSE RATIOS FOR THE VARIABLE TRUST LARGE COMPANY CORE FUND ARE 1.00% AND 1.50%, RESPECTIVELY. THE INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2010 TO WAIVE FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. GROWTH OF $10,000 INVESTMENT(2) (AS OF DECEMBER 31, 2009) (PERFORMANCE GRAPH)
WELLS FARGO ADVANTAGE VT LARGE COMPANY S&P 500 CORE FUND INDEX 12/31/1999 10,000 $10,000 1/31/2000 9,556 $9,498 2/29/2000 9,427 $9,318 3/31/2000 10,270 $10,229 4/30/2000 9,896 $9,921 5/31/2000 9,631 $9,718 6/30/2000 9,983 $9,958 7/31/2000 9,876 $9,802 8/31/2000 10,494 $10,411 9/30/2000 9,892 $9,861 10/31/2000 9,610 $9,820 11/30/2000 8,586 $9,046 12/31/2000 8,640 $9,090 1/31/2001 8,754 $9,413 2/28/2001 7,920 $8,555 3/31/2001 7,276 $8,013 4/30/2001 7,865 $8,636 5/31/2001 7,892 $8,693 6/30/2001 7,611 $8,482 7/31/2001 7,407 $8,398 8/31/2001 6,807 $7,873 9/30/2001 6,316 $7,237 10/31/2001 6,525 $7,376 11/30/2001 6,956 $7,941 12/31/2001 6,981 $8,011 1/31/2002 6,763 $7,894 2/28/2002 6,545 $7,742 3/31/2002 6,778 $8,033 4/30/2002 6,530 $7,546 5/31/2002 6,485 $7,491 6/30/2002 6,125 $6,957 7/31/2002 5,430 $6,415 8/31/2002 5,440 $6,457 9/30/2002 5,117 $5,756 10/31/2002 5,410 $6,262 11/30/2002 5,470 $6,630 12/31/2002 5,177 $6,241 1/31/2003 5,088 $6,078 2/28/2003 5,063 $5,987 3/31/2003 5,157 $6,044 4/30/2003 5,425 $6,542 5/31/2003 5,614 $6,886 6/30/2003 5,619 $6,974 7/31/2003 5,817 $7,098 8/31/2003 5,961 $7,236 9/30/2003 5,802 $7,159 10/31/2003 6,205 $7,564 11/30/2003 6,229 $7,630 12/31/2003 6,398 $8,030 1/31/2004 6,492 $8,178 2/29/2004 6,527 $8,291 3/31/2004 6,512 $8,166 4/30/2004 6,408 $8,038 5/31/2004 6,532 $8,148 6/30/2004 6,582 $8,307 7/31/2004 6,214 $8,032 8/31/2004 6,150 $8,064 9/30/2004 6,319 $8,151 10/31/2004 6,438 $8,276 11/30/2004 6,741 $8,611 12/31/2004 6,934 $8,903 1/31/2005 6,666 $8,686 2/28/2005 6,741 $8,869 3/31/2005 6,597 $8,712 4/30/2005 6,492 $8,547 5/31/2005 6,651 $8,819 6/30/2005 6,517 $8,831 7/31/2005 6,760 $9,160 8/31/2005 6,552 $9,076 9/30/2005 6,507 $9,150 10/31/2005 6,443 $8,997 11/30/2005 6,731 $9,337 12/31/2005 6,779 $9,340 1/31/2006 6,909 $9,588 2/28/2006 6,899 $9,614 3/31/2006 6,889 $9,733 4/30/2006 6,984 $9,864 5/31/2006 6,774 $9,580 6/30/2006 6,629 $9,593 7/31/2006 6,610 $9,652 8/31/2006 6,800 $9,881 9/30/2006 7,159 $10,136 10/31/2006 7,518 $10,466 11/30/2006 7,628 $10,665 12/31/2006 7,839 $10,814 1/31/2007 7,940 $10,978 2/28/2007 7,713 $10,762 3/31/2007 7,854 $10,883 4/30/2007 8,467 $11,365 5/31/2007 8,708 $11,762 6/30/2007 8,648 $11,566 7/31/2007 8,256 $11,208 8/31/2007 8,372 $11,376 9/30/2007 8,477 $11,802 10/31/2007 8,507 $11,989 11/30/2007 8,090 $11,488 12/31/2007 8,020 $11,409 1/31/2008 7,739 $10,724 2/28/2008 7,452 $10,376 3/31/2008 7,417 $10,331 4/30/2008 7,809 $10,834 5/31/2008 7,930 $10,975 6/30/2008 7,241 $10,050 7/31/2008 7,192 $9,965 8/31/2008 7,395 $10,109 9/30/2008 6,546 $9,208 10/31/2008 5,281 $7,662 11/30/2008 4,772 $7,112 12/31/2008 4,854 $7,188 1/31/2009 4,401 $6,582 2/28/2009 3,914 $5,881 3/31/2009 4,366 $6,396 4/30/2009 5,093 $7,008 5/31/2009 5,337 $7,400 6/30/2009 5,326 $7,415 7/31/2009 5,743 $7,976 8/31/2009 6,070 $8,264 9/30/2009 6,277 $8,572 10/31/2009 6,096 $8,413 11/30/2009 6,427 $8,918 12/31/2009 6,650 $9,090
- ---------- (1.) The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index with each stock's weight in the Index proportionate to its market value. You cannot invest directly in an Index. (2.) The chart compares the performance of the WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND for the most recent ten years of the Fund with the S&P 500 Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Wells Fargo Advantage Variable Trust Funds 31 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND (CONTINUED) MANAGER'S DISCUSSION FUND HIGHLIGHTS - - The Fund significantly outperformed its benchmark, thanks to strength in some of the Fund's largest sector exposures: technology, consumer discretionary, and financial stocks. The Fund benefited from a dramatic recovery of many of the most beleaguered holdings that the Fund acquired during the bear market, as well as from several new positions acquired soon before the market began its recovery. - - Substantial overweightings to technology and consumer discretionary stocks contributed strongly to the Fund's outperformance. Industrial stocks were also quite strong. While all sectors had a positive year, energy and health care stocks lagged the others on an absolute basis. However, later in the year, health care stocks began to look increasingly attractive on an absolute and relative basis. - - Key to our 2009 success was our stress-testing of all our holdings early in the year. This process strengthened our conviction concerning many good companies, particularly financials, which had severe market declines. Simultaneously, it convinced us to swap out of several positions where we did not have maximum confidence and to reinvest into comparable companies offering more compelling risk/reward profiles. THE FUND WAS POSITIONED FOR AN ECONOMIC RECOVERY AND BENEFITED WHEN THE RECOVERY TOOK PLACE. Our strategy concerning the macro-environment from late 2008 to early 2009 was based on the conviction that the great stress on the U.S. financial system would be met with unprecedented efforts by government regulators, such as the Treasury and the Federal Reserve. We concluded that there would be a severe recession--but not a depression--and a severe bear market, each of which we believed would eventually lead to better prospects. As market conditions worsened in early 2009, we strongly believed the market had been extremely oversold and that a recovery was coming much sooner than most pundits believed. We focused on our individual holdings to determine their continued durability in the weak market and their upside potential for the recovery that we envisioned. This led us to make several changes and to acquire positions in economically sensitive areas such as the technology, consumer discretionary, and industrials sectors. At the same time, we felt strongly that many of our holdings, including such visibly depressed financial companies as American Express, Bank of America, JPMorgan, and SECTOR DISTRIBUTION(3) (AS OF DECEMBER 31, 2009) (PIE CHART) Consumer Discretionary (15%) Consumer Staples (7%) Energy (13%) Financials (15%) Health Care (9%) Industrials (9%) Materials (4%) Information Technology (28%)
- ---------- (3.) Sector distribution is subject to change and is calculated based on the total common stock investments of the Fund. 32 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND (CONTINUED) Morgan Stanley, would survive. We also believed that although their stock prices had declined sharply, they could stage significant recoveries. This indeed occurred. As a result of the stress-testing we performed early in 2009, we sold the Fund's positions in Citigroup to increase our position in JPMorgan and sold Time Warner to purchase Walt Disney, due to our belief that Disney had a better risk/reward profile. We also sold positions in General Electric, Pfizer, Rockwell Automation, and Wyeth, in the aftermath of its announced acquisition by Pfizer. We sold Comcast Corp. during the second half of 2009 because of our concerns about its possible redeployment of cash for acquisitions that would dilute shareholder value. Subsequent to the sale, Comcast did, in fact, enter into a deal to acquire a material stake in NBC Universal. TEN LARGEST EQUITY HOLDINGS(4) (AS OF DECEMBER 31, 2009) Devon Energy Corporation 4.04% Monster Worldwide Incorporated 3.89% McGraw-Hill Companies Incorporated 3.68% Dell Incorporated 3.62% ConocoPhillips 3.58% Alcoa Incorporated 3.51% Western Union Company 3.43% Staples Incorporated 3.35% Cisco Systems Incorporated 3.33% Tyco International Limited 3.28%
We also sold the Fund's positions in Intel Corporation and Omnicom Group during the second half of 2009 to take advantage of more compelling opportunities. Other new positions included Coca-Cola Co. and Procter & Gamble among consumer staples; Corning Inc. among consumer discretionary; Deere & Co. among industrial stocks; Dun & Bradstreet among industrial services stocks; and Medtronic Inc., Genzyme, St. Jude Medical, and Zimmer Holdings among health care stocks. IMPROVED CORPORATE EARNINGS--BASED ON RENEWED DEMAND--SHOULD HELP THE ECONOMIC AND STOCK MARKET RECOVERY CONTINUE IN 2010. Our outlook for the economy is for continued recovery in 2010. We envision corporate earnings growth from renewed demand. We believe such growth should also result in higher earnings multiples, which should contribute to increased valuations in 2010. We believe that the market will post moderately positive results in 2010, with gains more in-line with historical averages, rather than the extremes seen in both the 1990s and the 2000s. Our optimism is based on the above-mentioned conviction for economic recovery; a belief that the improving economy will translate into significant earnings improvements as a result of 2008/2009 cost cutting; and the stock market's history, which typically shows market gains in the second year following the end of a bear market. Leading sectors in 2009--technology, industrials, and financials--will most likely continue to rise. At the same time, we believe that more opportunities will be found in the sectors that lagged in 2009 performance, including health care and energy stocks. - ---------- (4.) The ten largest portfolio holdings are calculated based on the value of the securities divided by total investments of the Fund. Holdings are subject to change and may have changed since the date specified. Wells Fargo Advantage Variable Trust Funds 33 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT LARGE COMPANY CORE FUND (CONTINUED) AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2009)
Expense Ratio ----------------- 6 Months* 1 Year 5 Year 10 Year Gross(5) Net(6) --------- ------ ------ ------- -------- ------ VT Large Company Core Fund 24.85 37.01 (0.83) (4.00) 1.50% 1.00% S&P 500 Index(1) 22.59 26.46 0.42 (0.95)
* Returns for periods of less than one year are not annualized. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. Please keep in mind that high double-digit returns were primarily achieved during favorable market conditions. You should not expect that such favorable returns can be consistently achieved. A Fund's performance, especially for very short time periods, should not be the sole factor in making your investment decision. Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to foreign investment risk. Consult the Fund's prospectus for additional information on these and other risks. PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. - ---------- (5.) Reflects the gross expense ratio as stated in the May 1, 2009 prospectus. (6.) The investment adviser has contractually committed through April 30, 2010, to waive fees and/or reimburse expenses to the extent necessary to maintain the net operating expense ratio shown. Without these reductions, the Fund's returns would have been lower. 34 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND INVESTMENT OBJECTIVE The WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND (the Fund) seeks long-term capital appreciation. INVESTMENT ADVISER Wells Fargo Funds Management, LLC SUBADVISER Peregrine Capital Management, Inc. PORTFOLIO MANAGERS John S. Dale, CFA Gary E. Nussbaum, CFA FUND INCEPTION September 20, 1999 PERFORMANCE SUMMARY 12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2009
FUND 1 YEAR - ---- ------ VT Large Company Growth Fund 43.38% Russell 1000 Growth Index(1) 37.21%
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. NET AND GROSS EXPENSE RATIOS FOR THE VARIABLE TRUST LARGE COMPANY GROWTH FUND ARE 1.00% AND 1.15%, RESPECTIVELY. THE INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2010 TO WAIVE FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. GROWTH OF $10,000 INVESTMENT(2) (AS OF DECEMBER 31, 2009) (PERFORMANCE GRAPH)
WELLS FARGO ADVANTAGE VT RUSSELL 1000 LARGE COMPANY GROWTH GROWTH FUND INDEX 12/31/1999 10,000 $10,000 1/31/2000 9,809 $9,531 2/29/2000 9,975 $9,997 3/31/2000 11,164 $10,713 4/30/2000 10,823 $10,203 5/31/2000 10,141 $9,689 6/30/2000 10,914 $10,423 7/31/2000 10,998 $9,989 8/31/2000 11,638 $10,893 9/30/2000 10,931 $9,863 10/31/2000 10,914 $9,396 11/30/2000 10,042 $8,011 12/31/2000 9,942 $7,758 1/31/2001 10,100 $8,294 2/28/2001 8,579 $6,886 3/31/2001 7,697 $6,136 4/30/2001 8,512 $6,912 5/31/2001 8,437 $6,811 6/30/2001 8,213 $6,653 7/31/2001 8,063 $6,487 8/31/2001 7,351 $5,956 9/30/2001 6,652 $5,362 10/31/2001 6,960 $5,643 11/30/2001 7,775 $6,185 12/31/2001 7,866 $6,173 1/31/2002 7,816 $6,064 2/28/2002 7,301 $5,813 3/31/2002 7,642 $6,014 4/30/2002 7,051 $5,523 5/31/2002 6,835 $5,389 6/30/2002 6,378 $4,891 7/31/2002 5,763 $4,622 8/31/2002 5,829 $4,636 9/30/2002 5,189 $4,155 10/31/2002 5,787 $4,536 11/30/2002 6,170 $4,782 12/31/2002 5,663 $4,452 1/31/2003 5,463 $4,344 2/28/2003 5,430 $4,324 3/31/2003 5,505 $4,404 4/30/2003 5,979 $4,730 5/31/2003 6,253 $4,966 6/30/2003 6,328 $5,034 7/31/2003 6,644 $5,160 8/31/2003 6,752 $5,288 9/30/2003 6,586 $5,231 10/31/2003 6,968 $5,525 11/30/2003 6,943 $5,583 12/31/2003 7,151 $5,776 1/31/2004 7,234 $5,894 2/29/2004 7,234 $5,932 3/31/2004 7,135 $5,822 4/30/2004 7,026 $5,754 5/31/2004 7,118 $5,861 6/30/2004 7,118 $5,934 7/31/2004 6,694 $5,599 8/31/2004 6,686 $5,571 9/30/2004 6,760 $5,624 10/31/2004 6,885 $5,712 11/30/2004 7,176 $5,908 12/31/2004 7,384 $6,140 1/31/2005 6,977 $5,935 2/28/2005 6,993 $5,999 3/31/2005 6,810 $5,889 4/30/2005 6,652 $5,777 5/31/2005 7,093 $6,057 6/30/2005 7,110 $6,034 7/31/2005 7,605 $6,329 8/31/2005 7,488 $6,248 9/30/2005 7,480 $6,276 10/31/2005 7,563 $6,215 11/30/2005 7,971 $6,484 12/31/2005 7,805 $6,463 1/31/2006 7,780 $6,577 2/28/2006 7,813 $6,566 3/31/2006 7,913 $6,663 4/30/2006 7,780 $6,654 5/31/2006 7,397 $6,429 6/30/2006 7,263 $6,403 7/31/2006 6,964 $6,281 8/31/2006 7,272 $6,477 9/30/2006 7,588 $6,655 10/31/2006 7,930 $6,889 11/30/2006 8,013 $7,026 12/31/2006 7,988 $7,050 1/31/2007 8,313 $7,231 2/28/2007 8,063 $7,095 3/31/2007 7,963 $7,134 4/30/2007 8,380 $7,469 5/31/2007 8,671 $7,738 6/30/2007 8,521 $7,623 7/31/2007 8,263 $7,504 8/31/2007 8,455 $7,624 9/30/2007 8,921 $7,943 10/31/2007 9,246 $8,214 11/30/2007 8,788 $7,911 12/31/2007 8,596 $7,883 1/31/2008 8,013 $7,268 2/28/2008 7,430 $7,124 3/31/2008 7,413 $7,080 4/30/2008 7,863 $7,452 5/31/2008 7,830 $7,725 6/30/2008 7,263 $7,169 7/31/2008 7,433 $7,032 8/31/2008 7,591 $7,108 9/30/2008 6,881 $6,285 10/31/2008 5,687 $5,178 11/30/2008 5,128 $4,767 12/31/2008 5,245 $4,853 1/31/2009 4,877 $4,619 2/28/2009 4,652 $4,272 3/31/2009 5,245 $4,653 4/30/2009 5,863 $5,100 5/31/2009 5,996 $5,352 6/30/2009 6,088 $5,412 7/31/2009 6,547 $5,797 8/31/2009 6,706 $5,917 9/30/2009 7,008 $6,168 10/31/2009 6,933 $6,085 11/30/2009 7,302 $6,459 12/31/2009 7,519 $6,658
- ---------- (1.) The Russell 1000 Growth Index measures performance of those Russell 1000 companies with higher price-to- book ratios and higher forecasted growth values. You cannot invest directly in an Index. (2.) The chart compares the performance of the WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND for the most recent ten years of the Fund with the Russell 1000 Growth Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Wells Fargo Advantage Variable Trust Funds 35 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND (CONTINUED) MANAGER'S DISCUSSION FUND HIGHLIGHTS - - The Fund's outperformance was attributed, in part, to its exposure to technology, consumer services, and growth financials; it also benefited from shunning consumer staples, utilities, and health care. - - Holdings at the lower end of the growth scale, including Wal-Mart, Automatic Data, Amgen, Cintas, and Nokia, lagged the Fund's overall return for the period. - - High-growth companies such as Amazon, Google, and Apple delivered triple-digit returns, thereby contributing to Fund performance. ON A RELATIVE-RETURN BASIS, THE FUND BENEFITED SIGNIFICANTLY FROM OUR BOTTOM- UP PROCESS AND LACK OF EXPOSURE TO THE SLOWER-GROWING SECTORS WITHIN THE BENCHMARK. SECTOR DISTRIBUTION (3) (AS OF DECEMBER 31, 2009) (PIE CHART) Consumer Discretionary (13%) Consumer Staples (3%) Financials (21%) Health Care (7%) Information Technology (49%) Industrials (7%)
Reflecting the trends within the overall market, holdings in technology, consumer services, and growth financials were the biggest contributors to the Fund's performance, while holdings in health care and the more defensive sectors lagged behind. For example, high-growth companies such as Amazon, Google, and Apple had triple-digit returns for the 12-month period. Financial holdings such as Goldman Sachs, T. Rowe Price, Franklin Resources, and CME Group were also rewarding and reflected the outstanding rebounds in earnings that these companies recorded during the period. Holdings at the lower end of the growth scale, including Wal-Mart, Automatic Data, Amgen, Cintas, and Nokia, lagged behind the Fund's overall return for the period. Lower or no exposure to consumer staples, utilities, and health care significantly helped the Fund's relative performance. While energy stocks are often considered "defensive," they performed well in 2009 due to the commodity price rebound. However, the Fund's relative and absolute performances in 2009 were neither helped nor hindered by our zero-weighting in energy. WE MADE MODERATE CHANGES TO THE FUND FOR ALL THE RIGHT REASONS: TO UPGRADE AND MAINTAIN THE FUND'S HIGH EARNINGS-GROWTH RATE. For the past few years, most of the Fund's holdings have continued to meet our long-term growth expectations. Valuations across the Fund's holdings have remained attractive, and we have not had any significant long-term fundamental disappointments to drive any kind of extensive turnover. We were fortunate in this - ---------- (3.) Sector distribution is subject to change and is calculated based on the total common stock investments of the Fund. 36 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND (CONTINUED) compressed valuation environment to be able to add to the Fund's long-term growth rate, without having to pay up or having to take on too much earnings dilution. During the 12-month period, we added to our positions in Apple, Amazon, Google, Visa, Qualcomm, and EMC Corporation. To pay for these purchases, we sold Nokia and Cintas, along with portions of Amgen, Lowe's, and eBay. Overall, we were able to add significantly to the Fund's long-term earnings-growth rate, at what we believed to be a reasonable cost. TEN LARGEST EQUITY HOLDINGS(4) (AS OF DECEMBER 31, 2009) Goldman Sachs Group Incorporated 7.79% Google Incorporated Class A 6.87% Apple Incorporated 6.38% Microsoft Corporation 6.10% Cisco Systems Incorporated 5.54% QUALCOMM Incorporated 4.93% Charles Schwab Corporation 4.79% Amazon.com Incorporated 4.71% Target Corporation 4.12% Intel Corporation 3.80%
Within the consumer sector, our holdings have moved toward the faster-growing companies like Amazon, Google, Visa, and Target. We like what we are seeing in technology, especially the high-quality and rapid-growth prospects in companies such as Apple, EMC, Cisco, Qualcomm, and even Microsoft. Within financials, we believe that companies such as Goldman Sachs, CME Group, T. Rowe Price, Schwab, and Franklin Resources have emerged from the financial crisis in excellent shape and are gaining significant global market share. We continue to seek companies within the health care arena that offer the potential for high growth. Medtronic is in an excellent competitive position, and we believe that Genzyme will emerge from its short-term manufacturing challenges to produce strong and diverse earnings growth. Health care has been an increasingly difficult sector for us in terms of finding rapid-growth opportunities that also meet our standards for quality. Based on our analysis, business services companies such as C.H. Robinson, Expeditors, Paychex, and Western Union also offer excellent growth and high-quality characteristics. While we never disregard areas of opportunity, in our view, the utilities, heavy-industrials, and commodity-oriented sectors have historically not been fruitful, bottom-up sources of secular growth. For example, several consumer staples companies met our quality criteria but did not have the high-growth potential that we demand. FROM OUR PERSPECTIVE, HIGH QUALITY AND HIGH GROWTH EQUAL SUPERIOR SECULAR GROWTH COMPANIES. Very few companies have the ability and opportunity to reinvest extensively back into their businesses, receive high returns and growth rates on their investments, and do it for long periods of time. The few companies that meet these criteria have historically been excellent long-term investments. We are confident that there are 30 to 50 of these companies that offer this combination of outstanding growth and attractive valuation for the Fund. We believe that our investment style is well-positioned to capitalize on these long-term opportunities and to take advantage of what we believe to be opportunistic valuations. - ---------- (4.) The ten largest portfolio holdings are calculated based on the value of the securities divided by total investments of the Fund. Holdings are subject to change and may have changed since the date specified. Wells Fargo Advantage Variable Trust Funds 37 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT LARGE COMPANY GROWTH FUND (CONTINUED) AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2009)
Expense Ratio ----------------- 6 Months* 1 Year 5 Year 10 Year Gross(5) Net(6) --------- ------ ------ ------- -------- ------ VT Large Company Growth Fund 23.51 43.38 0.36 (2.81) 1.15% 1.00% Russell 1000 Growth Index(1) 23.03 37.21 1.63 (3.99)
* Returns for periods of less than one year are not annualized. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED,MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. Please keep in mind that high double-digit returns were primarily achieved during favorable market conditions. You should not expect that such favorable returns can be consistently achieved. A Fund's performance, especially for very short time periods, should not be the sole factor in making your investment decision. Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to foreign investment risk. Consult the Fund's prospectus for additional information on these and other risks. PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. - ---------- (5.) Reflects the gross expense ratio as stated in the May 1, 2009 prospectus. (6.) The investment adviser has contractually committed through April 30, 2010, to waive fees and/or reimburse expenses to the extent necessary to maintain the net operating expense ratio shown. Without these reductions, the Fund's returns would have been lower. 38 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT MONEY MARKET FUND INVESTMENT OBJECTIVE The WELLS FARGO ADVANTAGE VT MONEY MARKET FUND (the Fund) seeks current income, while preserving capital and liquidity. INVESTMENT ADVISER Wells Fargo Funds Management, LLC SUBADVISER Wells Capital Management Incorporated PORTFOLIO MANAGER David D. Sylvester FUND INCEPTION May 19, 1994 [The Fund is closed to new investors (insurance companies) as of December 31, 2009. The liquidation of the Fund is expected to occur on or about April 30, 2010.] PERFORMANCE SUMMARY 12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2009
FUND 1 YEAR - ---- ------ VT Money Market Fund 0.11%
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. YIELDS WILL FLUCTUATE. THE FUND'S YIELD FIGURES MORE CLOSELY REFLECT THE CURRENT EARNINGS OF THE FUND THAN THE TOTAL RETURN FIGURES. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. FUND YIELD SUMMARY (AS OF DECEMBER 31, 2009) 7-Day Current Yield 0.01% 7-Day Effective Yield 0.01% 30-Day Simple Yield 0.01% 30-Day Effective Yield 0.01%
Wells Fargo Advantage Variable Trust Funds 39 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT MONEY MARKET FUND (CONTINUED) MANAGER'S DISCUSSION FUND HIGHLIGHTS - - We saw gradual but steady improvements in credit conditions during the 12-month period. - - Money market rates declined as the Federal Reserve pursued a near-zero interest-rate policy. - - We maintained a weighted average maturity (WAM) that was relatively short so that investments in the Fund would be less vulnerable to potential decreases in price should interest rates suddenly rise. THE MOST SIGNIFICANT FACTOR THAT AFFECTED THE FUND DURING THE PERIOD WAS AN ENVIRONMENT OF PERSISTENTLY LOW, NEAR-ZERO INTEREST RATES IN THE MONEY MARKETS. After moving the target interest rate for federal funds from 1% to a range of 0%-0.25% at its meeting on December 15, 2008, the Federal Open Market Committee held to this target range throughout 2009. Other money market rates ratcheted lower in response to continuing uncertainty after initially moving higher during the first quarter of 2009. For example, the three-month London Interbank Offered Rate (LIBOR) started 2009 at 1.41%, declined to 0.60% by mid-year, and closed the year at 0.25%. Joined by other central banks, these low interest rates, coupled with significant effort to inject liquidity through quantitative easing measures, helped lead to a gradual improvement in credit conditions. A central bank's quantitative easing measures are used when interest rates are at or near zero and often include buying financial assets such as government and other types of bonds from financial institutions. The financial institutions can, in turn, loan out the infusion of cash to consumers and businesses, which can help to stimulate the economy and also help to improve weak credit conditions. This type of monetary policy has been a key component in stabilizing the U.S. money markets and the money markets in other countries that were closely tied to the United States. There was still much uncertainty around the question of credit quality through the first quarter of 2009. Bank credit quality seemed to deteriorate in the early months of the year, as losses on mortgage portfolios and structured securities continued to mount. There was some relief in May 2009 as the Fed reported preliminary results of its "stress tests" that were designed to ensure that banks had adequate reserve capital to cover known and potentially unexpected losses. As we moved into the second quarter of 2009, credit conditions improved. In part, conditions improved because investors were willing to buy longer-term debt, and, in part, investors were willing to purchase longer-term debt because credit conditions were improving. By July 2009 conditions had improved to the point 40 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT MONEY MARKET FUND (CONTINUED) that the Federal Reserve was able to begin publicly discussing some of the methods that might be used to remove the quantitative easing measures that had been put in place. On June 24, 2009, the Securities and Exchange Commission (SEC) proposed changes to Rule 2a-7 that would, among other things: - - Shorten the maximum average maturity of money market funds, - - Eliminate the use of "second tier" securities, - - Require funds to periodically "stress test" their portfolios, and - - Set standards for the percentage of a fund's assets that must be invested in highly liquid securities. PORTFOLIO ALLOCATION(1) (AS OF DECEMBER 31, 2009) (PIE CHART) Corporate Bonds and Notes (1%) Variable and Floating Rate Notes (2%) Commercial Paper (69%) Certificates of Deposit (6%) Municipal Bonds and Notes (11%) Repurchase Agreements (7%) Time Deposits (4%)
We believe that many of the proposals make good investment sense, and we already manage the Fund in line with the SEC's proposals. As we moved into the second half of 2009, the lack of supply of suitable money market investments became a matter of increasing concern. The total amount of commercial paper outstanding fell by 30% from $1.658 trillion at the end of 2008 to $1.147 trillion by the end of 2009. This is a decline of 47% from the peak of $ 2.187 trillion in July 2007. The asset-backed commercial paper (ABCP) sector was particularly hard hit, falling 35% over the year from $725.2 billion to $470.7 billion at the end of 2009. Total ABCP outstandings, or issues that have not yet matured, were down over 60% from the peak of $1.214 trillion in July 2007. Other types of prime money market instruments, such as certificates of deposits and repurchase agreements, experienced similar declines during the 12-month period. The shrinking supply of money market investments may be attributed to several factors. An increase in long-term debt issuance, much of which was supported by various forms of guarantees by governments across the globe, was one significant source of alternative funding for issuers. In addition, supply in the money markets contracted as a natural consequence of the downturn in the economic cycle, and also as the result of the general deleveraging of the financial system in the wake of the credit crisis that we experienced in 2007 and 2008. - ---------- (1.) Portfolio allocation and maturity distribution are subject to change and are calculated based on the total investments of the Fund. Wells Fargo Advantage Variable Trust Funds 41 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT MONEY MARKET FUND (CONTINUED) AS MARKET CONDITIONS IMPROVED, WE WERE ABLE TO MODESTLY INCREASE THE WAM OF THE FUND'S ASSETS AND DECREASE ITS LIQUIDITY. The Fund's WAM began the 12-month period at 24 days, was gradually increased to 33 days by mid-year, and closed the period at 28 days. The percentage of the Fund's assets maturing within 14 days was decreased from 56% at the start of 2009 to 42% at mid-year, and to 28% at year-end. Still, the Fund is considerably shorter-term than its peer group and seeks to be more liquid. Both positions reflect our generally conservative posture in these markets. WITH THE FED STATING THAT MONEY MARKET RATES WILL REMAIN LOW FOR "AN EXTENDED PERIOD," WE EXPECT THE CURRENT RATE ENVIRONMENT TO PERSIST INTO 2010. Because other central banks are beginning to raise their interest rates and the U.S. economy shows some promise of recovery--and since we are at or near 0% interest rates already--the risks associated with rising interest rates outweigh what we believe to be the near impossibility of further rate declines. And, since the timing of changes in the direction of interest rates is always unpredictable, the prudent course, in our view, is to plan now for that event. As a result, we maintain a comparatively liquid and short-term portfolio structure designed to achieve our primary objective of a stable $1.00 net asset value and liquidity for our shareholders. MATURITY DISTRIBUTION(1) (AS OF DECEMBER 31, 2009) (PIE CHART) 1 Day (15%) 2-7 Days (16%) 8-14 Days (11%) 15-29 Days (21%) 30-59 Days (21%) 60-89 Days (14%) 90-179 Days (2%)
42 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT MONEY MARKET FUND (CONTINUED) AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2009)
6 Months* 1 Year 5 Year 10 Year --------- ------ ------ ------- VT Money Market Fund 0.01 0.11 2.79 2.58
* Returns for periods of less than one year are not annualized. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. YIELDS WILL FLUCTUATE. THE FUND'S YIELD FIGURES MORE CLOSELY REFLECT THE CURRENT EARNINGS OF THE FUND THAN THE TOTAL RETURN FIGURES. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE WELLS FARGO ADVANTAGE MONEY MARKET FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN A MONEY MARKET FUND. PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. THIS PAGE IS INTENTIONALLY LEFT BLANK. 44 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND INVESTMENT OBJECTIVE The WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (the Fund) seeks long-term capital appreciation. INVESTMENT ADVISER Wells Fargo Funds Management, LLC SUBADVISER Wells Capital Management Incorporated PORTFOLIO MANAGER Ann M. Miletti FUND INCEPTION May 8, 1992 PERFORMANCE SUMMARY 12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2009
FUND 1 YEAR - ---- ------ VT Opportunity Fund 47.74% Russell Midcap Index(1) 40.48%
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. NET AND GROSS EXPENSE RATIOS FOR THE VARIABLE TRUST OPPORTUNITY FUND ARE 1.07% AND 1.23% RESPECTIVELY. THE INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2010 TO WAIVE FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. GROWTH OF $10,000 INVESTMENT(2) (AS OF DECEMBER 31, 2009) (PERFORMANCE GRAPH)
WELLS FARGO ADVANTAGE VT RUSSELL OPPORTUNITY MIDCAP FUND INDEX 12/31/1999 10,000 10,000 1/31/2000 9,704 9,669 2/29/2000 9,873 10,412 3/31/2000 10,889 11,009 4/30/2000 10,681 10,488 5/31/2000 10,754 10,210 6/30/2000 10,408 10,512 7/31/2000 10,285 10,394 8/31/2000 10,985 11,390 9/30/2000 10,581 11,228 10/31/2000 10,646 11,054 11/30/2000 9,954 10,059 12/31/2000 10,660 10,825 1/31/2001 11,310 10,999 2/28/2001 10,646 10,330 3/31/2001 10,130 9,689 4/30/2001 10,882 10,517 5/31/2001 10,940 10,713 6/30/2001 10,664 10,613 7/31/2001 10,513 10,309 8/31/2001 9,894 9,912 9/30/2001 8,527 8,717 10/31/2001 9,034 9,062 11/30/2001 9,863 9,822 12/31/2001 10,265 10,216 1/31/2002 10,159 10,155 2/28/2002 9,922 10,047 3/31/2002 10,434 10,650 4/30/2002 9,880 10,443 5/31/2002 9,811 10,325 6/30/2002 8,708 9,633 7/31/2002 7,716 8,693 8/31/2002 7,721 8,741 9/30/2002 6,840 7,934 10/31/2002 7,278 8,335 11/30/2002 8,064 8,914 12/31/2002 7,512 8,563 1/31/2003 7,285 8,389 2/28/2003 7,252 8,278 3/31/2003 7,187 8,360 4/30/2003 7,842 8,967 5/31/2003 8,628 9,788 6/30/2003 8,725 9,887 7/31/2003 9,007 10,213 8/31/2003 9,435 10,656 9/30/2003 9,251 10,523 10/31/2003 9,776 11,326 11/30/2003 9,928 11,644 12/31/2003 10,292 11,993 1/31/2004 10,726 12,341 2/29/2004 10,910 12,607 3/31/2004 10,850 12,610 4/30/2004 10,698 12,147 5/31/2004 10,948 12,448 6/30/2004 11,197 12,792 7/31/2004 10,829 12,233 8/31/2004 10,655 12,286 9/30/2004 11,067 12,685 10/31/2004 11,246 13,035 11/30/2004 11,810 13,829 12/31/2004 12,167 14,417 1/31/2005 11,815 14,061 2/28/2005 11,934 14,495 3/31/2005 11,799 14,381 4/30/2005 11,403 13,922 5/31/2005 11,999 14,589 6/30/2005 12,243 14,981 7/31/2005 12,980 15,771 8/31/2005 12,834 15,661 9/30/2005 12,839 15,869 10/31/2005 12,503 15,393 11/30/2005 13,013 16,076 12/31/2005 13,126 16,242 1/31/2006 13,733 17,077 2/28/2006 13,522 17,056 3/31/2006 13,739 17,479 4/30/2006 14,107 17,602 5/31/2006 13,571 17,008 6/30/2006 13,332 17,029 7/31/2006 13,050 16,656 8/31/2006 13,461 17,079 9/30/2006 13,896 17,388 10/31/2006 14,234 18,073 11/30/2006 14,700 18,724 12/31/2006 14,730 18,722 1/31/2007 15,062 19,354 2/28/2007 14,976 19,386 3/31/2007 15,270 19,541 4/30/2007 15,761 20,285 5/31/2007 16,423 21,051 6/30/2007 16,288 20,576 7/31/2007 15,757 19,810 8/31/2007 15,743 19,844 9/30/2007 16,306 20,496 10/31/2007 16,499 20,827 11/30/2007 15,807 19,833 12/31/2007 15,708 19,770 1/31/2008 14,831 18,482 2/29/2008 14,781 18,059 3/31/2008 14,445 17,798 4/30/2008 15,451 19,000 5/31/2008 16,157 19,861 6/30/2008 14,823 18,273 7/31/2008 14,558 17,809 8/31/2008 15,040 18,138 9/30/2008 13,280 15,914 10/31/2008 10,252 12,357 11/30/2008 9,187 11,099 12/31/2008 9,409 11,573 1/31/2009 8,900 10,717 2/28/2009 8,400 9,651 3/31/2009 9,094 10,534 4/30/2009 10,567 12,154 5/31/2009 11,076 12,681 6/30/2009 11,206 12,725 7/31/2009 12,012 13,852 8/31/2009 12,364 14,525 9/30/2009 13,123 15,349 10/31/2009 12,715 14,673 11/30/2009 13,243 15,382 12/31/2009 13,901 16,258
- ---------- (1.) The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 25% of the total market capitalization of the Russell 1000 Index. You cannot invest directly in an Index. (2.) The chart compares the performance of the WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND for the most recent ten years of the Fund with the Russell Midcap Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Wells Fargo Advantage Variable Trust Funds 45 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (CONTINUED) MANAGER'S DISCUSSION FUND HIGHLIGHTS - - The Fund outperformed its benchmark. Holdings in the health care and information technology sectors were among the top contributors to relative performance. - - The materials sector contributed positively to absolute performance but was the primary headwind for the Fund, as our holdings in this sector underperformed those of the broader index. - - As the market fluctuated over the past year, our process remained our foundation. We continued to look for well-positioned businesses that have solid business models, strong management teams, favorable trends, and trade at attractive discounts to our estimated private market valuation. SECTOR DISTRIBUTION(3) (AS OF DECEMBER 31, 2009) (PIE CHART) Consumer Discretionary (22%) Consumer Staples (6%) Energy (8%) Financials (16%) Health Care (12%) Industrials (12%) Information Technology (18%) Materials (5%) Telecommunication Services (1%)
STOCK SELECTION AND SECTOR WEIGHTS BOTH CONTRIBUTED TO THE FUND'S OUTPERFORMANCE. The health care sector was the top contributor to relative performance during the 12-month period, led by the strong performance of Health Management Associates Inc. and Cooper Cos. This sector outperformed the index over the 12-month period in spite of the decreased visibility caused by the health care reform debate, but the debate continues to put the entire sector under a cloud of uncertainty. Security selection in the information technology sector was another positive contributor, led by ON Semiconductor Corp and ARM Holdings plc. Our overweight of the sector was also beneficial, as it outperformed the entire index. The consumer discretionary sector was another area of strength for the Fund, benefiting from both security selection and our overweight position. Our underweight of the utility sector also positively contributed to relative performance. Although both the materials and consumer staples sectors positively contributed to the absolute performance of the Fund, these sectors were the primary detractors from relative performance, as our holdings in these sectors lagged their broader sectors. In materials, chemicals was the relatively weakest industry, while in consumer staples, food and staples retailing was the relatively weakest industry. OUR METHODOLOGY INCLUDES BUYING STOCKS THAT ARE SELLING AT A DISCOUNT TO THEIR INTRINSIC PRIVATE MARKET VALUES AND SELLING STOCKS THAT APPROACH THEIR PRIVATE MARKET VALUES. Our discipline allows us to be patient with stocks that are out of favor with the market. This past year, patience seemed to have been the exception, as the - ---------- (3.) Sector distribution is subject to change and is calculated based on the total common stock investments of the Fund. 46 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (CONTINUED) unprecedented volatility in the market increased investor focus on the short term rather than the long term. Although this dynamic was challenging, we viewed it favorably, as the indiscriminate sell-off punished many companies that we judged to be higher-quality businesses with strong management teams. The subsequent rally rewarded our patience and longer-term view. TEN LARGEST EQUITY HOLDINGS(4) (AS OF DECEMBER 31, 2009) XTO Energy Incorporated 1.61% Weatherford International Limited 1.57% Transocean Limited 1.55% Apollo Group Incorporated Class A 1.51% Pall Corporation 1.51% Darden Restaurants Incorporated 1.48% Nordstrom Incorporated 1.46% Cephalon Incorporated 1.45% Praxair Incorporated 1.44% Microsemi Corporation 1.43%
Consequently, we added positions in several sectors and industries. These additions have generally been complemented by sales of companies that we had identified as having inappropriate valuations, lower-quality business models, or deteriorating fundamentals. While comprising relatively small changes overall, the two sectors that had the largest increases as a percentage of the Fund's exposure were consumer staples and telecommunications. Most sector weightings were fairly consistent throughout the year. The Fund was overweight consumer discretionary, information technology, and health care while being underweight in financials, utilities, and industrials. UNCERTAINTY REMAINS, BUT OPPORTUNITIES REMAIN AS WELL. As the rally over the past 12 months progressed, more questions continued to arise, most notably about the potential long-term growth rate of the macro economy and the potential consequences of a changing regulatory landscape. These questions not only increase uncertainty but also present opportunities to potentially add to current holdings at favorable prices and valuations or to upgrade the Fund with a higher-quality company. In either calm or volatile periods, our ideal is to build a diversified portfolio of stocks that will offer upside participation and downside management for investors. Through it all, our bottom-up process of identifying companies that have solid business models, strong management teams, and favorable trends, trading at attractive discounts to our private market valuations, continues to guide our decision-making process. - ---------- (4.) The ten largest portfolio holdings are calculated based on the value of the securities divided by total investments of the Fund. Holdings are subject to change and may have changed since the date specified. Wells Fargo Advantage Variable Trust Funds 47 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (CONTINUED) AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2009)
Expense Ratio ----------------- 6 Months* 1 Year 5 Year 10 Year Gross(5) Net(6) --------- ------ ------ ------- -------- ------ VT Opportunity Fund(SM) 24.05 47.74 2.70 3.35 1.23% 1.07% Russell Midcap Index(1) 27.76 40.48 2.43 4.98
* Returns for periods of less than one year are not annualized. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. Please keep in mind that high double-digit returns were primarily achieved during favorable market conditions. You should not expect that such favorable returns can be consistently achieved. A Fund's performance, especially for very short time periods, should not be the sole factor in making your investment decision. Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. Smaller company stocks tend to be more volatile and less liquid than those of larger companies. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to foreign investment risk. Consult the Fund's prospectus for additional information on these and other risks. PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. - ---------- (5.) Reflects the gross expense ratio as stated in the May 1, 2009 prospectus. (6.) The investment adviser has contractually committed through April 30, 2010, to waive fees and/or reimburse expenses to the extent necessary to maintain the net operating expense ratio shown. Without these reductions, the Fund's returns would have been lower. 48 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND THIS FUND IS CLOSED TO NEW INVESTORS. INVESTMENT OBJECTIVE The WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (the Fund) seeks long-term capital appreciation. INVESTMENT ADVISER Wells Fargo Funds Management, LLC SUBADVISER Wells Capital Management Incorporated PORTFOLIO MANAGERS Jerome "Cam" Philpott, CFA Stuart Roberts FUND INCEPTION May 1, 1995 PERFORMANCE SUMMARY 12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2009
FUND 1 YEAR - ---- ------ VT Small Cap Growth Fund 52.64% Russell 2000 Growth Index(1) 34.47%
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. NET AND GROSS EXPENSE RATIOS FOR THE VARIABLE TRUST SMALL CAP GROWTH FUND ARE 1.20% AND 1.26%, RESPECTIVELY. THE INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2010 TO WAIVE FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. GROWTH OF $10,000 INVESTMENT(2) (AS OF DECEMBER 31, 2009) (PERFORMANCE GRAPH)
WELLS FARGO ADVANTAGE VT SMALL CAP RUSSELL 2000 GROWTH FUND GROWTH INDEX 12/31/1999 10,000 10,000 1/31/2000 10,221 9,907 2/29/2000 12,736 12,212 3/31/2000 11,095 10,928 4/30/2000 9,740 9,825 5/31/2000 8,706 8,965 6/30/2000 10,813 10,123 7/31/2000 10,166 9,255 8/31/2000 11,501 10,229 9/30/2000 11,246 9,720 10/31/2000 9,685 8,931 11/30/2000 7,238 7,310 12/31/2000 7,742 7,757 1/31/2001 7,831 8,385 2/28/2001 6,220 7,236 3/31/2001 5,318 6,578 4/30/2001 6,191 7,383 5/31/2001 6,198 7,554 6/30/2001 6,347 7,760 7/31/2001 5,952 7,098 8/31/2001 5,482 6,655 9/30/2001 4,527 5,581 10/31/2001 5,057 6,118 11/30/2001 5,445 6,629 12/31/2001 5,855 7,041 1/31/2002 5,564 6,791 2/28/2002 5,072 6,351 3/31/2002 5,504 6,903 4/30/2002 5,251 6,754 5/31/2002 4,938 6,359 6/30/2002 4,512 5,820 7/31/2002 3,662 4,925 8/31/2002 3,647 4,923 9/30/2002 3,349 4,567 10/31/2002 3,610 4,798 11/30/2002 3,878 5,274 12/31/2002 3,617 4,910 1/31/2003 3,468 4,777 2/28/2003 3,401 4,650 3/31/2003 3,416 4,720 4/30/2003 3,767 5,167 5/31/2003 4,080 5,749 6/30/2003 4,229 5,860 7/31/2003 4,430 6,303 8/31/2003 4,639 6,641 9/30/2003 4,498 6,473 10/31/2003 4,945 7,032 11/30/2003 5,102 7,262 12/31/2003 5,146 7,294 1/31/2004 5,437 7,677 2/29/2004 5,445 7,665 3/31/2004 5,594 7,701 4/30/2004 5,333 7,315 5/31/2004 5,534 7,460 6/30/2004 5,616 7,708 7/31/2004 4,982 7,017 8/31/2004 4,773 6,865 9/30/2004 5,087 7,245 10/31/2004 5,243 7,421 11/30/2004 5,490 8,048 12/31/2004 5,855 8,338 1/31/2005 5,601 7,962 2/28/2005 5,519 8,071 3/31/2005 5,407 7,769 4/30/2005 5,102 7,274 5/31/2005 5,430 7,787 6/30/2005 5,669 8,039 7/31/2005 6,056 8,601 8/31/2005 6,004 8,480 9/30/2005 6,079 8,547 10/31/2005 5,915 8,231 11/30/2005 6,310 8,697 12/31/2005 6,220 8,684 1/31/2006 6,690 9,522 2/28/2006 6,877 9,471 3/31/2006 7,280 9,931 4/30/2006 7,459 9,902 5/31/2006 7,048 9,206 6/30/2006 6,966 9,211 7/31/2006 6,578 8,733 8/31/2006 6,823 8,988 9/30/2006 6,854 9,049 10/31/2006 7,321 9,636 11/30/2006 7,567 9,866 12/31/2006 7,636 9,843 1/31/2007 7,820 10,026 2/28/2007 7,912 9,994 3/31/2007 8,004 10,087 4/30/2007 8,119 10,351 5/31/2007 8,678 10,823 6/30/2007 8,847 10,762 7/31/2007 8,475 10,203 8/31/2007 8,654 10,460 9/30/2007 8,968 10,764 10/31/2007 9,408 11,249 11/30/2007 8,646 10,472 12/31/2007 8,690 10,537 1/31/2008 7,892 9,571 2/29/2008 7,489 9,240 3/31/2008 7,489 9,186 4/30/2008 7,785 9,658 5/31/2008 8,224 10,205 6/30/2008 7,381 9,596 7/31/2008 7,367 9,820 8/31/2008 7,807 10,064 9/30/2008 7,159 8,926 10/31/2008 5,176 6,989 11/30/2008 4,748 6,143 12/31/2008 5,091 6,476 1/31/2009 4,687 5,984 2/28/2009 4,369 5,364 3/31/2009 4,944 5,846 4/30/2009 5,923 6,725 5/31/2009 5,959 6,986 6/30/2009 6,192 7,212 7/31/2009 6,706 7,771 8/31/2009 6,779 7,847 9/30/2009 7,379 8,362 10/31/2009 7,012 7,781 11/30/2009 7,208 8,022 12/31/2009 7,771 8,709
- ---------- (1.) The Russell 2000 Growth Index measures the performance shown of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. You cannot invest directly in an Index. (2.) The chart compares the performance of the WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND for the most recent ten years with the Russell 2000 Growth Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Wells Fargo Advantage Variable Trust Funds 49 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (CONTINUED) MANAGER'S DISCUSSION FUND HIGHLIGHTS - - The Fund outperformed its benchmark during a robust year of performance as markets rallied following a challenging 2008 and early 2009. - - Stock selection contributed the most to relative performance; sector allocation added to returns as well. - - Information technology stocks were a main contributor to the portfolio, as were health care and industrials holdings. - - Holdings in materials detracted from Fund performance. THE FUND BENEFITED MOST FROM ITS HOLDINGS IN INFORMATION TECHNOLOGY, HEALTH CARE, AND INDUSTRIALS. Stocks in the information technology sector were positive absolute and relative contributors to the Fund, and an overweight position added to relative performance. Trends in e-commerce appeared to be better than more traditionally based retailers. Holdings of the Fund in the technology sector that had exposure to e-commerce included GSI Commerce and VistaPrint; they were the two best-performing holdings in the sector. GSI Commerce, a provider of e-commerce and interactive marketing services, has consistently performed well this period. In addition to strong overall trends in e-commerce during this past holiday season, the stock benefited from the company's acquisition of RueLaLa.com, a leader in the private sale space. We believe that this acquisition provides revenue synergies with GSI's existing customer base. VistaPrint, an online provider of marketing products and services to small businesses and home offices, posted strong quarterly results, and we did trim this position during the period on price appreciation. Another good-performing holding on positive quarterly earnings results was Global Cash Access, a transaction-processing company for the gaming industry. Health care holdings outperformed the benchmark significantly for the period. Among the better performers registering strong quarterly results were Sirona Dental Systems, a manufacturer of dental equipment, and Inverness Medical Innovations, a medical diagnostics company. ev3 Inc., an endovascular device company, was another good stock for the Fund. The company acquired Chestnut Medical Technologies, Inc., a privately held company with a product portfolio focused on interventional neuroradiology, and these products will likely expand ev3's presence in this rapidly growing therapeutic category. 50 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (CONTINUED) TEN LARGEST EQUITY HOLDINGS(3) (AS OF DECEMBER 31, 2009) GSI Commerce Incorporated 3.29% SkillSoft plc ADR 2.66% Sykes Enterprises Incorporated 2.48% Gartner Incorporated 2.43% Scientific Games Corporation Class A 2.33% Cbeyond Incorporated 2.31% Global Cash Access Incorporated 2.15% National Cinemedia Incorporated 1.86% Shutterfly Incorporated 1.82% Resources Connection Incorporated 1.79%
Stocks in the industrials sector were strong contributors to the portfolio both absolutely and relatively. Sykes Enterprises, a provider of outsourced customer management solutions, was a top performer in this group. The company posted strong quarterly results, and we believe that the company's ability to lower operating costs for its clients drove the strong revenue growth. Additionally, Sykes announced an acquisition of another company in this industry. We like this transaction based on two important attributes: It diversifies Sykes' customer base, and it provides significant accretion opportunities as expenses are optimized. Other solid performers in this group included Gardner Denver, a global manufacturer of compressors and pumps, and Resources Connection, a professional services company. While all sectors contributed double-digit gains for the 12-month period, an underweight position and stock selection in materials detracted from relative returns. The Fund has very little allocated to the materials sector and employs a bottom-up investment process instead of a top-down emphasis; our investment strategy keeps us focused on individual company fundamentals when making allocation decisions. OUR MOST SIGNIFICANT SHIFTS DURING THE PERIOD WERE ADDING TO CONSUMER DIS- CRETIONARY, MATERIALS, AND TELECOMMUNICATION SERVICES, WHILE WE SHIFTED AWAY FROM THE INFORMATION TECHNOLOGY, FINANCIALS, AND INDUSTRIALS SECTORS. SECTOR DISTRIBUTION(4) (AS OF DECEMBER 31, 2009) (PIE CHART) Materials (2%) Consumer Discretionary (19%) Telecommunication Services (4%) Energy (3%) Financials (5%) Health Care (17%) Industrials (21%) Information Technology (29%)
The Fund's movement out of these sectors was mainly the result of taking profits from specific stocks as these holdings reached or exceeded our price targets. On the other hand, we found attractive buying opportunities in consumer discretionary and telecommunication services, and increased the Fund's exposure in these areas. In materials, we continued to maintain an underweight position, even though we increased the Fund's exposure during the second half of the period when we found buying opportunities within this sector. We reduced our position in information technology through profit-taking. We also decreased the Fund's exposure to financials and industrials because we found better buying opportunities elsewhere. - ---------- (3.) The ten largest portfolio holdings are calculated based on the value of the securities divided by total investments of the Fund. Holdings are subject to change and may have changed since the date specified. (4.) Sector distribution is subject to change and is calculated based on the total common stock investments of the Fund. Wells Fargo Advantage Variable Trust Funds 51 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (CONTINUED) LOOKING BACK 12 MONTHS AGO, INVESTORS ENTERED 2009 WITH PLENTY OF CONCERNS, YET THE YEAR TURNED OUT SIGNIFICANTLY BETTER THAN ANYBODY HAD FORECASTED. Given what expectations were, what stock prices did, and what the recently reported macroeconomic data have been, we would typically expect investors to be upbeat or even euphoric at the start of 2010. However, investor skepticism remains intact, and conviction appears to be broadly fleeting. Recent data have clearly improved and suggest that a recovery is under way. Employment continues to lag, as it typically does at this point in a recovery, and most market pundits are looking for job growth as the key metric going forward to provide evidence of a sustained economic recovery. Meanwhile, credit spreads are tightening, and analysts are revising earnings estimates higher, both of which typically bode well for equity prices. Our conversations with management at several companies are generally constructive. Overall, management teams seem to be appropriately conservative in their planning as we continue to monitor signs of improving fundamental activity. We believe that companies will be slow to add to their cost structures, so operating leverage should be significant. Investors will probably continue to worry about potential headwinds, like rising taxes, increasing interest rates, and the removal of quantitative easing measures. These are all legitimate concerns, to be sure; however, we believe that earnings are typically more influential to equity prices, especially considering where current valuations are. The Fund has undergone significant multiple expansion since spring 2009, yet it remains attractively valued on historical measures. From here, though, we expect stocks to perform more in line with earnings growth rather than continuing the process of multiple expansion. We are looking forward to the earnings reports that will begin to come in toward the middle of January 2010, and we are optimistic about the results that will be reported. 52 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (CONTINUED) AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2009)
Expense Ratio ----------------- 6 Months* 1 Year 5 Year 10 Year Gross(5) Net(6) --------- ------ ------ ------- -------- ------ VT Small Cap Growth Fund 25.49 52.64 5.82 (2.49) 1.26% 1.20% Russell 2000 Growth Index(1) 20.75 34.47 0.87 (1.37)
* Returns for periods of less than one year are not annualized. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. Please keep in mind that high double-digit returns were primarily achieved during favorable market conditions. You should not expect that such favorable returns can be consistently achieved. A Fund's performance, especially for very short time periods, should not be the sole factor in making your investment decision. Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. Smaller company stocks tend to be more volatile and less liquid than those of larger companies. The use of derivatives may reduce returns and/or increase volatility. Active trading results in increased turnover and trading expenses, and may generate higher short-term capital gains. Consult the Fund's prospectus for additional information on these and other risks. PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. - ---------- (5.) Reflects the gross expense ratio as stated in the May 1, 2009 prospectus. (6.) The investment adviser has contractually committed through April 30, 2010, to waive fees and/or reimburse expenses to the extent necessary to maintain the net operating expense ratio shown. Without these reductions, the Fund's returns would have been lower. THIS PAGE IS INTENTIONALLY LEFT BLANK. 54 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND INVESTMENT OBJECTIVE The WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND (the Fund) seeks long-term capital appreciation. INVESTMENT ADVISER Wells Fargo Funds Management, LLC SUBADVISER Wells Capital Management Incorporated PORTFOLIO MANAGERS Erik C. Astheimer I. Charles Rinaldi Michael Schneider, CFA FUND INCEPTION October 10, 1997 PERFORMANCE SUMMARY 12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2009
FUND 1 YEAR - ---- ------ VT Small/Mid Cap Value Fund 60.18% Russell 2500 Value Index(1) 27.68%
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED,MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. NET AND GROSS EXPENSE RATIOS FOR THE VARIABLE TRUST SMALL/MID CAP VALUE FUND ARE 1.14% AND 1.69%, RESPECTIVELY. THE INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2010 TO WAIVE FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. GROWTH OF $10,000 INVESTMENT(2) (AS OF DECEMBER 31, 2009) (PERFORMANCE GRAPH)
WELLS FARGO ADVANTAGE VT SMALL MID CAP RUSSELL 2500 VALUE FUND VALUE INDEX 12/31/1999 10,000 $10,000 1/31/2000 9,583 $9,584 2/29/2000 9,024 $9,749 3/31/2000 10,252 $10,467 4/30/2000 10,559 $10,463 5/31/2000 10,603 $10,444 6/30/2000 10,000 $10,404 7/31/2000 10,164 $10,630 8/31/2000 10,746 $11,187 9/30/2000 10,877 $11,121 10/31/2000 11,053 $11,114 11/30/2000 10,285 $10,973 12/31/2000 10,782 $12,079 1/31/2001 11,454 $12,248 2/28/2001 11,146 $12,145 3/31/2001 10,804 $11,840 4/30/2001 11,597 $12,514 5/31/2001 11,796 $12,898 6/30/2001 11,344 $13,022 7/31/2001 11,531 $12,936 8/31/2001 11,047 $12,825 9/30/2001 9,780 $11,401 10/31/2001 10,011 $11,645 11/30/2001 10,595 $12,541 12/31/2001 11,227 $13,255 1/31/2002 10,852 $13,377 2/28/2002 10,963 $13,544 3/31/2002 11,811 $14,383 4/30/2002 11,701 $14,629 5/31/2002 11,469 $14,388 6/30/2002 10,610 $13,881 7/31/2002 8,715 $12,274 8/31/2002 9,046 $12,340 9/30/2002 8,021 $11,330 10/31/2002 8,164 $11,493 11/30/2002 8,737 $12,331 12/31/2002 8,627 $11,946 1/31/2003 8,319 $11,586 2/28/2003 8,165 $11,301 3/31/2003 7,988 $11,377 4/30/2003 8,497 $12,407 5/31/2003 9,645 $13,555 6/30/2003 9,657 $13,798 7/31/2003 10,023 $14,397 8/31/2003 10,509 $14,977 9/30/2003 10,331 $14,871 10/31/2003 10,674 $16,006 11/30/2003 11,065 $16,659 12/31/2003 11,939 $17,314 1/31/2004 12,212 $17,874 2/29/2004 12,520 $18,238 3/31/2004 12,472 $18,383 4/30/2004 11,584 $17,421 5/31/2004 11,667 $17,771 6/30/2004 12,247 $18,477 7/31/2004 11,738 $17,733 8/31/2004 11,525 $17,956 9/30/2004 12,295 $18,523 10/31/2004 12,093 $18,858 11/30/2004 13,562 $20,400 12/31/2004 13,941 $21,049 1/31/2005 13,621 $20,372 2/28/2005 14,486 $20,881 3/31/2005 13,709 $20,602 4/30/2005 12,805 $19,832 5/31/2005 13,317 $20,932 6/30/2005 14,232 $21,700 7/31/2005 15,231 $22,862 8/31/2005 15,671 $22,446 9/30/2005 16,289 $22,471 10/31/2005 15,480 $21,808 11/30/2005 16,004 $22,702 12/31/2005 16,241 $22,678 1/31/2006 17,846 $24,171 2/28/2006 17,228 $24,203 3/31/2006 18,072 $25,052 4/30/2006 18,536 $25,151 5/31/2006 17,680 $24,280 6/30/2006 17,549 $24,417 7/31/2006 17,109 $24,078 8/31/2006 17,520 $24,718 9/30/2006 17,265 $24,971 10/31/2006 17,988 $26,142 11/30/2006 18,483 $26,960 12/31/2006 18,724 $27,256 1/31/2007 19,163 $27,864 2/28/2007 19,064 $27,800 3/31/2007 19,064 $28,097 4/30/2007 19,645 $28,684 5/31/2007 20,240 $29,705 6/30/2007 20,140 $28,915 7/31/2007 19,136 $26,750 8/31/2007 18,546 $26,887 9/30/2007 19,860 $27,168 10/31/2007 20,551 $27,355 11/30/2007 18,327 $25,603 12/31/2007 18,664 $25,274 1/31/2008 17,974 $24,374 2/29/2008 18,142 $23,492 3/31/2008 17,300 $23,450 4/30/2008 18,277 $24,532 5/31/2008 19,271 $25,545 6/30/2008 18,513 $23,159 7/31/2008 17,396 $23,568 8/31/2008 17,605 $24,520 9/30/2008 15,054 $22,877 10/31/2008 11,019 $18,153 11/30/2008 9,994 $16,255 12/31/2008 10,350 $17,190 1/31/2009 9,848 $15,183 2/28/2009 8,740 $13,229 3/31/2009 9,764 $14,384 4/30/2009 11,311 $16,678 5/31/2009 12,420 $17,095 6/30/2009 12,190 $17,083 7/31/2009 13,021 $18,825 8/31/2009 13,677 $19,945 9/30/2009 15,286 $20,972 10/31/2009 14,609 $19,705 11/30/2009 15,498 $20,555 12/31/2009 16,578 $21,947
- ---------- (1.) The Russell 2500 Value Index measures the performance of those Russell 2500 companies with lower price-to-book ratios and lower forecasted growth values. You cannot invest directly in an Index. (2.) The chart compares the performance of the WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND for the most recent ten years of the Fund with the Russell 2500 Value Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Wells Fargo Advantage Variable Trust Funds 55 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND (CONTINUED) MANAGER'S DISCUSSION FUND HIGHLIGHTS - - Strong stock selection in energy, financials, and materials drove the Fund's significant outperformance. - - On the weaker side, our underweight to retailers that benefited from the broad market recovery detracted from performance. - - We believe that key risks for the coming year are unemployment and weak consumer spending. STRONG STOCK SELECTION DROVE THE FUND'S OUTPERFORMANCE FOR THE PERIOD. The equity market declined sharply in the first quarter of 2009, but staged a strong recovery in the ensuing three quarters that led to an overall strong year for equities. The Fund performed well throughout the period and ended the year with returns significantly ahead of its benchmark. Energy stocks performed strongly after declines in 2008. The Fund's holdings in energy had returns that were twice as high as those seen in the energy holdings of the benchmark. For example, particularly strong performance came from our top energy holding, InterOil Corp, which was up over 450% during the period. The company announced strong results from its drilling program at the Elk/Antelope Field. It bolstered its balance sheet via several financing transactions and is in the process of evolving beyond its upstart roots into a company with producing assets. We believe that the company has massive resource potential and that it is taking the right steps to transform itself into a production company. TEN LARGEST EQUITY HOLDINGS(3) (AS OF DECEMBER 31, 2009) InterOil Corporation 6.64% Randgold Resources Limited ADR 4.85% Chimera Investment Corporation 3.66% Hill International Incorporated 2.14% 3Com Corporation 2.10% GEO Group Incorporated 1.84% Gentex Corporation 1.75% Annaly Capital Management Incorporated 1.73% Tier Technologies Incorporated Class B 1.69% Micron Technology Incorporated 1.64%
Overall, we remain positive on the energy sector mainly because the secular supply and demand dynamic has not changed despite relatively soft current demand. The lack of capacity on the supply side cannot be reversed in the short run because exploration-and-development projects are capital-intensive and have long lead times. Demand growth will be driven mainly by non-OECD (Organisation for Economic Co-operation and Development) countries such as China and India. Even with the sharp recovery, we believe our energy holdings trade at reasonable levels and generally have healthy balance sheets due to a strong cycle prior to 2008. The Fund remains invested in a diverse group of companies that, in our opinion, are positioned to benefit from secular growth within the energy sector. - ---------- (3.) The ten largest portfolio holdings are calculated based on the value of the securities divided by total investments of the Fund. Holdings are subject to change and may have changed since the date specified. 56 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND (CONTINUED) Our stock selection among financials also contributed strongly to Fund performance. Financials were laggards in the benchmark, but our emphasis on mortgage real estate investment trusts (REITs) that mainly invested in agency mortgage-backed securities (MBS) paid off as those stocks finished the year with strong total returns. SECTOR DISTRIBUTION(4) (AS OF DECEMBER 31, 2009) (PIE CHART) Materials (14%) Consumer Discretionary (8%) Consumer Staples (1%) Energy (25%) Financials (18%) Health Care (6%) Industrials (12%) Information Technology (16%)
The Fund's technology holdings also performed well. Our top technology holding, 3Com, was a key performer, up 229% during the 12-month period. The company is in the process of being acquired by Hewlett-Packard. The enterprise networking equipment company has a strong market position in China through its H3C unit, prompting Hewlett-Packard to make the deal in order to quickly enter the fast-growing market. 3Com is among the market leaders in its segments in China. Micron was another key performer as inventory replenishment and improvement in DRAM and NAND pricing drove the stock higher. On the weak side, the Fund's holdings in the consumer discretionary sector underperformed slightly during the period. Our underweight to retailers that benefited from the broad market recovery detracted from the Fund's performance. We continue to believe that retailers are among the areas that remain susceptible to weaker consumer spending in the coming years. Despite the temporary lift in share prices, we remain underweight to the group. WHILE WE REMAINED CONSERVATIVELY POSITIONED IN FINANCIAL SERVICES, WE DID TAKE ADVANTAGE OF LOWER VALUATIONS. During the 12-month period, we selectively added to new regional bank positions to take advantage of lower valuations after a prolonged period of underperfor- mance from the group. While we remain substantially underweight to the group, this marks the first time that we have meaningfully increased our exposure. Over- all, we remain conservatively positioned within financial services because we believe that additional risks are on the horizon in the form of potential losses tied to commercial real estate. - ---------- (4.) Sector distribution is subject to change and is calculated based on the total common stock investments of the Fund Wells Fargo Advantage Variable Trust Funds 57 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND (CONTINUED) WE SEE POSITIVE DEVELOPMENTS ON THE ECONOMIC FRONT. However, investors should not be too quick to equate that with a new rising market for equities. Unemployment and weak consumer spending remain two key risks for the market in 2010. The big market rally that began in March 2009 has, in part, been driven by money previously on the sidelines coming into the market as well as by companies aggressively and preemptively cutting costs. Better-than-expected corporate earnings during the second half of 2009 were more the result of inventory replenishment, rather than top-line growth. That being said, there are enough positive developments at work to provide optimism for 2010. Our investment process has always emphasized a broader level of diversification through the use of three levels of screening to identify new ideas. We think that the resulting diversification positions the Fund well for the period ahead. 58 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND (CONTINUED) AVERAGE ANNUAL TOTAL RETURN(5) (%) (AS OF DECEMBER 31, 2009)
Expense Ratio ----------------- 6 Months* 1 Year 5 Year 10 Year Gross(6) Net(7) --------- ------ ------ ------- -------- ------ VT Small/Mid Cap Value Fund 36.00 60.18 3.53 5.18 1.69% 1.14% Russell 2500 Value Index(1) 28.48 27.68 0.84 8.18
* Returns for periods of less than one year are not annualized. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED,MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. Please keep in mind that high double-digit returns were primarily achieved during favorable market conditions. You should not expect that such favorable returns can be consistently achieved. A Fund's performance, especially for very short time periods, should not be the sole factor in making your investment decision. Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. Smaller company stocks tend to be more volatile and less liquid than those of larger companies. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to foreign investment risk. Consult the Fund's prospectus for additional information on these and other risks. PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. - ---------- (5.) Prior to May 1, 2006, the WELLS FARGO ADVANTAGE VT SMALL/MID CAP VALUE FUND was named the Wells Fargo Advantage Multi Cap Value Fund. (6.) Reflects the gross expense ratio as stated in the May 1, 2009 prospectus. (7.) The investment adviser has contractually committed through April 30, 2010, to waive fees and/or reimburse expenses to the extent necessary to maintain the net operating expense ratio shown. Without these reductions, the Fund's returns would have been lower. THIS PAGE IS INTENTIONALLY LEFT BLANK. 60 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND INVESTMENT OBJECTIVE The WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND (the Fund) seeks total return, consisting of income and capital appreciation. INVESTMENT ADVISER Wells Fargo Funds Management, LLC SUBADVISER Wells Capital Management Incorporated PORTFOLIO MANAGERS Troy Ludgood Thomas O'Connor, CFA FUND INCEPTION September 20, 1999 PERFORMANCE SUMMARY 12-MONTH TOTAL RETURN AS OF DECEMBER 31, 2009
FUND 1 YEAR - ---- ------ VT Total Return Bond Fund 11.99% Barclays Capital U.S. Aggregate Bond Index(1) 5.93%
FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. NET AND GROSS EXPENSE RATIOS FOR THE VARIABLE TRUST TOTAL RETURN BOND FUND ARE 0.90% AND 1.14%, RESPECTIVELY. THE INVESTMENT ADVISER HAS CONTRACTUALLY COMMITTED THROUGH APRIL 30, 2010 TO WAIVE FEES AND/OR REIMBURSE EXPENSES TO THE EXTENT NECESSARY TO MAINTAIN THE NET OPERATING EXPENSE RATIO SHOWN. WITHOUT THESE REDUCTIONS, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. GROWTH OF $10,000 INVESTMENT(2) (AS OF DECEMBER 31, 2009) (PERFORMANCE GRAPH)
WELLS FARGO ADVANTAGE VT BARCLAYS CAPITAL TOTAL RETURN U.S. AGGREGATE BOND FUND BOND INDEX 12/31/1999 10,000 10,000 1/31/2000 9,974 9,967 2/29/2000 10,098 10,088 3/31/2000 10,269 10,221 4/30/2000 10,075 10,191 5/31/2000 10,027 10,187 6/30/2000 10,260 10,399 7/31/2000 10,359 10,493 8/31/2000 10,532 10,645 9/30/2000 10,556 10,713 10/31/2000 10,604 10,783 11/30/2000 10,747 10,960 12/31/2000 11,022 11,164 1/31/2001 11,221 11,347 2/28/2001 11,361 11,446 3/31/2001 11,388 11,503 4/30/2001 11,292 11,455 5/31/2001 11,364 11,523 6/30/2001 11,368 11,567 7/31/2001 11,666 11,826 8/31/2001 11,806 11,962 9/30/2001 11,706 12,102 10/31/2001 12,007 12,355 11/30/2001 11,952 12,185 12/31/2001 11,839 12,107 1/31/2002 11,900 12,205 2/28/2002 11,968 12,323 3/31/2002 11,839 12,119 4/30/2002 12,041 12,354 5/31/2002 12,152 12,459 6/30/2002 12,104 12,566 7/31/2002 12,025 12,718 8/31/2002 12,267 12,933 9/30/2002 12,433 13,142 10/31/2002 12,311 13,082 11/30/2002 12,476 13,078 12/31/2002 12,756 13,349 1/31/2003 12,801 13,360 2/28/2003 13,030 13,544 3/31/2003 13,102 13,533 4/30/2003 13,410 13,645 5/31/2003 13,732 13,899 6/30/2003 13,743 13,871 7/31/2003 13,292 13,405 8/31/2003 13,419 13,494 9/30/2003 13,798 13,851 10/31/2003 13,664 13,722 11/30/2003 13,685 13,755 12/31/2003 13,828 13,896 1/31/2004 13,943 14,007 2/29/2004 14,096 14,158 3/31/2004 14,195 14,264 4/30/2004 13,851 13,893 5/31/2004 13,799 13,838 6/30/2004 13,865 13,917 7/31/2004 14,004 14,055 8/31/2004 14,257 14,323 9/30/2004 14,297 14,362 10/31/2004 14,409 14,482 11/30/2004 14,293 14,366 12/31/2004 14,435 14,499 1/31/2005 14,520 14,590 2/28/2005 14,446 14,504 3/31/2005 14,346 14,430 4/30/2005 14,532 14,625 5/31/2005 14,692 14,783 6/30/2005 14,765 14,864 7/31/2005 14,625 14,729 8/31/2005 14,803 14,917 9/30/2005 14,641 14,764 10/31/2005 14,525 14,647 11/30/2005 14,572 14,711 12/31/2005 14,709 14,851 1/31/2006 14,697 14,853 2/28/2006 14,745 14,902 3/31/2006 14,602 14,756 4/30/2006 14,578 14,729 5/31/2006 14,556 14,713 6/30/2006 14,579 14,744 7/31/2006 14,772 14,943 8/31/2006 14,981 15,171 9/30/2006 15,114 15,305 10/31/2006 15,203 15,406 11/30/2006 15,384 15,585 12/31/2006 15,270 15,494 1/31/2007 15,266 15,488 2/28/2007 15,510 15,727 3/31/2007 15,491 15,727 4/30/2007 15,581 15,812 5/31/2007 15,450 15,692 6/30/2007 15,398 15,646 7/31/2007 15,505 15,776 8/31/2007 15,678 15,970 9/30/2007 15,787 16,091 10/31/2007 15,914 16,235 11/30/2007 16,168 16,527 12/31/2007 16,216 16,574 1/31/2008 16,457 16,852 2/29/2008 16,467 16,876 3/31/2008 16,494 16,933 4/30/2008 16,507 16,898 5/31/2008 16,388 16,774 6/30/2008 16,402 16,760 7/31/2008 16,333 16,747 8/31/2008 16,469 16,906 9/30/2008 16,250 16,679 10/31/2008 15,611 16,285 11/30/2008 15,986 16,815 12/31/2008 16,603 17,442 1/31/2009 16,709 17,289 2/28/2009 16,707 17,223 3/31/2009 17,016 17,463 4/30/2009 17,202 17,546 5/31/2009 17,444 17,674 6/30/2009 17,616 17,774 7/31/2009 18,022 18,061 8/31/2009 18,265 18,248 9/30/2009 18,490 18,439 10/31/2009 18,627 18,530 11/30/2009 18,871 18,770 12/31/2009 18,594 18,477
- ---------- (1.) The Barclays Capital U.S. Aggregate Bond Index is composed of the Barclays Capital Government/Credit Index and the Mortgage-Backed Securities Index and includes U.S. Treasury issues, agency issues, corporate bond issues, and mortgage-backed securities. You cannot invest directly in an index. (2.) The chart compares the performance of the WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND for the most recent ten years of the Fund with the Barclays Capital U.S. Aggregate Bond Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Wells Fargo Advantage Variable Trust Funds 61 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND (CONTINUED) MANAGER'S DISCUSSION FUND HIGHLIGHTS - - The Fund outperformed its benchmark as liquidity returned to the credit markets. - - Overweight positions in the corporate, commercial-backed (CMBS), asset-backed (ABS), and mortgage-backed (MBS) sectors contributed to the Fund's relative performance. Good security selection also helped the Fund's relative performance. - - Our underweight to the agency sector detracted from performance. DURING THE 12-MONTH PERIOD, WE SAW THE FINANCIAL MARKETS TRANSITION FROM THE BRINK OF COLLAPSE TO A STATE OF BUYING FRENZY THAT LEFT INVESTMENT MANAGERS AND WALL STREET LOOKING FOR MORE. Government policy intervention stands behind the remarkable rehabilitation of the U.S. markets in 2009. The Fed's $1.25 trillion agency mortgage-backed-securities (MBS) purchase program caused significant spread tightening, which more than offset competing forces such as tighter underwriting standards and a weak housing market. Technicals became very supportive in the second quarter of 2009 and remained that way through the end of the 12-month period. Mutual fund inflows into investment-grade bond funds have been extraordinary. Investors have not slowed down their investments even though yields are low. Performance of U.S. Treasuries provided further evidence of risk resumption in spread products. The Barclays Capital U.S. Treasury Index returned - -3.6% for 2009, the worst return since 1973. While macroeconomic factors were mixed, corporate earnings were largely positive, albeit driven by cost reductions more than by top-line revenue growth. Heading into 2010, spreads are tightening and the U.S. economy and financial system seem to be on the mend from our perspective. PORTFOLIO ALLOCATION(3) (AS OF DECEMBER 31, 2009) (PIE CHART) Collateralized Mortgage Obligations (7%) Asset-Backed Securities/Commercial Mortgage-Backed Securities (21%) Mortgage-Backed Securities (36%) Corporate Bonds & Notes (26%) U.S. Treasury Securities (10%)
Our investment strategy outperformed the benchmark for the 12-month period. Overweights and security selection in CMBS, ABS, MBS, and corporate sectors all contributed to the Fund's relative performance. Our underweight to the agency sector detracted from performance. OUR CHANGES CENTERED ON ADJUSTING OUR EXPOSURE TO DIFFERENT SECTORS. During the period, the Fund maintained sector overweights to both CMBS and ABS. We slightly reduced the CMBS overweight from 2.4% to 1.9% during the period. The ABS - ---------- (3.) Portfolio allocation is subject to change and is calculated based on the total investments of the Fund, excluding cash and cash equivalents. 62 Wells Fargo Advantage Variable Trust Funds Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND (CONTINUED) sector overweight was also gradually decreased during the 12-month period from 8.5% to 4.8% due to strong relative performance. The Fund's exposure to mortgages began the period as the largest sector overweight; it was subsequently reduced at mid-year and became a slight underweight during the last quarter of 2009. Corporate sector positioning began the year neutral to the benchmark. An overweight was established in the second quarter of 2009 and was the largest sector overweight during the fourth quarter of 2009. Compared to our benchmark, we are maintaining an overweight in corporates, CMBS, and AAA-rated(4) consumer ABS securities that offer good relative value. Our corporate overweight features financial institutions, high-quality, non-U.S. sovereigns, Real Estate Investment Trusts (REITs), and energy. Our underweights are retail, consumer products, and railroads. In mortgage securities, we maintained neutral weighting favoring the 30-year, 4.5% fixed-rate mortgage pools. WE CLOSED THE 12-MONTH PERIOD WITH A SENSE OF OPTIMISM AND ARE BULLISH ON CREDIT, ABS, AND COMMERCIAL REAL ESTATE SPREADS. Corporate credit metrics continue to improve, justifying lower spreads. The technical environment in the corporate, ABS, and CMBS sectors is also strong as investor demand for paper increased significantly into the end of 2009. In our opinion, an improving economy in 2010 should help to stabilize the ABS and CMBS sectors and improve fundamentals. It already seems like a distant memory, yet it was only a year ago, that the financial system was on the brink of collapse and spreads across the fixed-income markets were at some of the widest levels we had ever seen. As we begin 2010, spreads are tightening and the U.S. economy and financial system are on the mend. Government policy intervention was the primary support for the remarkable rehabilitation in the credit and structured product markets in 2009. As such, policy error stands as the greatest risk to the outlook. By transferring the risk underlying the credit crisis to governments, sovereign risk has become a new focal point of credit uncertainty. For 2010, we expect more normalized returns across spread sectors. Global liquidity continues to reflate the credit markets and the compression in spreads is likely to persist. Returns in 2009, when the credit, CMBS, and ABS sectors generated excess returns versus U.S. Treasuries of 16.04%, 28.45%, and 24.72%, respectively, will not be repeated, in our view. The potential end of government-sponsored programs will likely lead to increased volatility in the coming months. The return of broad-based liquidity across sectors creates good relative value trading opportunities for our investment style. - ---------- (4.) The ratings indicated are from Standard & Poor's. Standard and Poor's rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Wells Fargo Advantage Variable Trust Funds 63 Performance Highlights (Unaudited) WELLS FARGO ADVANTAGE VT TOTAL RETURN BOND FUND (CONTINUED) AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2009)
Expense Ratio ----------------- 6 Months* 1 Year 5 Year 10 Year Gross(5) Net(6) --------- ------ ------ ------- -------- ------ VT Total Return Bond Fund 5.55 11.99 5.19 6.40 1.14% 0.90% Barclays Capital U.S. Aggregate Bond Index(1) 3.95 5.93 4.97 6.33
* Returns for periods of less than one year are not annualized. FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS AND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER MAY PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. CURRENT MONTH-END PERFORMANCE IS AVAILABLE BY CALLING 1-866-765-0778. PERFORMANCE FIGURES OF THE FUND DO NOT REFLECT FEES CHARGED PURSUANT TO THE TERMS OF VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS. Bond fund values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. In general, when interest rates rise, bond fund values fall and investors may lose principal value. The use of derivatives may reduce returns and/or increase volatility. Active trading results in increased turnover and trading expenses, and may generate higher short-term capital gains. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to foreign investment risk and mortgage- and asset- backed securities risk. Consult the Fund's prospectus for additional information on these and other risks. PLEASE REFER TO THE PROSPECTUS PROVIDED BY YOUR PARTICIPATING INSURANCE COMPANY FOR DETAILED INFORMATION DESCRIBING THE SEPARATE ACCOUNTS FOR INFORMATION REGARDING SURRENDER CHARGES, MORTALITY AND EXPENSE RISK FEES AND OTHER CHARGES THAT MAY BE ASSESSED BY THE PARTICIPATING INSURANCE COMPANIES. - ---------- (5.) Reflects the gross expense ratio as stated in the May 1, 2009 prospectus. (6.) The investment adviser has contractually committed through April 30, 2010, to waive fees and/or reimburse expenses to the extent necessary to maintain the net operating expense ratio shown. Without these reductions, the Fund's returns would have been lower. 64 Wells Fargo Advantage Variable Trust Funds Fund Expenses (Unaudited) As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, redemption fees (if any) and exchange fees (if any); and (2) ongoing costs, including management fees; distribution (12b-1) and/or shareholder service fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire six-month period, from July 1, 2009 to December 31, 2009. ACTUAL EXPENSES The "Actual" line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Actual" line under the heading entitled "Expenses Paid During Period" for your applicable class of shares to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The "Hypothetical" line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the "Hypothetical" line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Ending Expenses Account Value Account Value Paid During Net Annual 07-01-2009 12-31-2009 the Period* Expense Ratio ------------- ------------- ----------- ------------- VT ASSET ALLOCATION FUND Actual $1,000.00 $1,179.30 $5.49 1.00% Hypothetical (5% return before expenses) $1,000.00 $1,020.16 $5.09 1.00% VT C&B LARGE CAP VALUE FUND Actual $1,000.00 $1,233.10 $5.63 1.00% Hypothetical (5% return before expenses) $1,000.00 $1,020.16 $5.09 1.00% VT DISCOVERY FUND Actual $1,000.00 $1,268.20 $6.57 1.15% Hypothetical (5% return before expenses) $1,000.00 $1,019.41 $5.85 1.15% VT EQUITY INCOME FUND Actual $1,000.00 $1,187.90 $5.51 1.00% Hypothetical (5% return before expenses) $1,000.00 $1,020.16 $5.09 1.00% VT INTERNATIONAL CORE FUND Actual $1,000.00 $1,202.20 $5.55 1.00% Hypothetical (5% return before expenses) $1,000.00 $1,020.16 $5.09 1.00% VT LARGE COMPANY CORE FUND Actual $1,000.00 $1,248.50 $5.67 1.00% Hypothetical (5% return before expenses) $1,000.00 $1,020.16 $5.09 1.00%
Wells Fargo Advantage Variable Trust Funds 65 Fund Expenses (Unaudited)
Beginning Ending Expenses Account Value Account Value Paid During Net Annual 07-01-2009 12-31-2009 the Period* Expense Ratio ------------- ------------- ----------- ------------- VT LARGE COMPANY GROWTH FUND Actual $1,000.00 $1,235.10 $5.63 1.00% Hypothetical (5% return before expenses) $1,000.00 $1,020.16 $5.09 1.00% VT MONEY MARKET FUND Actual $1,000.00 $1,000.10 $3.08 0.61% Hypothetical (5% return before expenses) $1,000.00 $1,022.13 $3.11 0.61% VT OPPORTUNITY FUND Actual $1,000.00 $1,240.50 $6.04 1.07% Hypothetical (5% return before expenses) $1,000.00 $1,019.81 $5.45 1.07% VT SMALL CAP GROWTH FUND Actual $1,000.00 $1,254.90 $6.82 1.20% Hypothetical (5% return before expenses) $1,000.00 $1,019.16 $6.11 1.20% VT SMALL/MID CAP VALUE FUND Actual $1,000.00 $1,360.00 $6.78 1.14% Hypothetical (5% Return before expenses $1,000.00 $1,019.46 $5.80 1.14% VT TOTAL RETURN BOND FUND Actual $1,000.00 $1,055.50 $4.40 0.85% Hypothetical (5% Return before expenses $1,000.00 $1,020.92 $4.33 0.85%
- ---------- * Expenses are equal to the Fund's annualized expenses ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year (to reflect the one-half year period). 66 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- COMMON STOCKS: 58.35% AEROSPACE, DEFENSE: 0.12% 2,551 RAYTHEON COMPANY $ 131,428 -------------- APPAREL & ACCESSORY STORES: 0.27% 585 ABERCROMBIE & FITCH COMPANY CLASS A 20,387 3,169 GAP INCORPORATED 66,391 2,041 KOHL'S CORPORATION+ 110,071 1,780 LIMITED BRANDS INCORPORATED 34,247 1,100 NORDSTROM INCORPORATED 41,338 832 ROSS STORES INCORPORATED 35,535 307,969 -------------- APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS: 0.07% 382 POLO RALPH LAUREN CORPORATION 30,934 591 VF CORPORATION 43,285 74,219 -------------- AUTO & TRUCKS: 0.19% 22,015 FORD MOTOR COMPANY+ 220,150 -------------- AUTO PARTS & EQUIPMENT: 0.11% 4,467 JOHNSON CONTROLS INCORPORATED 121,681 -------------- AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS: 0.07% 615 AUTONATION INCORPORATED+ 11,777 199 AUTOZONE INCORPORATED+ 31,456 913 O'REILLY AUTOMOTIVE INCORPORATED+ 34,804 78,037 -------------- AUTOMOTIVE REPAIR, SERVICES & PARKING: 0.01% 373 RYDER SYSTEM INCORPORATED 15,356 -------------- BASIC MATERIALS: 0.02% 526 INTERNATIONAL FLAVORS & FRAGRANCES INCORPORATED 21,640 -------------- BEVERAGES: 0.78% 15,425 THE COCA-COLA COMPANY 879,225 -------------- BIOPHARMACEUTICALS: 0.48% 3,059 CELGENE CORPORATION+ 170,325 497 CEPHALON INCORPORATED+ 31,018 1,766 GENZYME CORPORATION+ 86,552 5,990 GILEAD SCIENCES INCORPORATED+ 259,247 547,142 -------------- BIOTECHNOLOGY: 0.48% 6,737 AMGEN INCORPORATED+ 381,112 1,925 BIOGEN IDEC INCORPORATED+ 102,988 1,187 LIFE TECHNOLOGIES CORPORATION+ 61,997 546,097 -------------- BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS: 0.05% 1,839 D.R. HORTON INCORPORATED 19,990 1,073 LENNAR CORPORATION CLASS A 13,702 2,101 PULTE HOMES INCORPORATED 21,010 54,702 --------------
Wells Fargo Advantage Variable Trust Funds 67 Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS: 0.56% 878 FASTENAL COMPANY $ 36,560 11,319 HOME DEPOT INCORPORATED 327,459 9,799 LOWE'S COMPANIES INCORPORATED 229,199 633 SHERWIN-WILLIAMS COMPANY 39,024 632,242 -------------- BUSINESS SERVICES: 2.26% 3,486 ADOBE SYSTEMS INCORPORATED+ 128,215 650 AFFILIATED COMPUTER SERVICES INCORPORATED CLASS A+ 38,799 1,529 AUTODESK INCORPORATED+ 38,852 3,359 AUTOMATIC DATA PROCESSING INCORPORATED 143,832 1,220 BMC SOFTWARE INCORPORATED+ 48,922 2,639 CA INCORPORATED 59,272 1,218 CITRIX SYSTEMS INCORPORATED+ 50,681 1,961 COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION CLASS A+ 88,833 1,014 COMPUTER SCIENCES CORPORATION+ 58,335 1,534 COMPUWARE CORPORATION+ 11,091 841 EQUIFAX INCORPORATED 25,978 2,182 FIDELITY NATIONAL INFORMATION SERVICES INCORPORATED 51,146 1,024 FISERV INCORPORATED+ 49,644 1,214 IMS HEALTH INCORPORATED 25,567 3,236 INTERPUBLIC GROUP OF COMPANIES INCORPORATED+ 23,882 2,108 INTUIT INCORPORATED+ 64,737 1,204 IRON MOUNTAIN INCORPORATED+ 27,403 3,497 JUNIPER NETWORKS INCORPORATED+ 93,265 639 MASTERCARD INCORPORATED CLASS A 163,571 1,050 MCAFEE INCORPORATED+ 42,599 836 MONSTER WORLDWIDE INCORPORATED+ 14,546 2,308 NOVELL INCORPORATED+ 9,578 2,071 OMNICOM GROUP INCORPORATED 81,080 26,031 ORACLE CORPORATION 638,801 1,250 RED HAT INCORPORATED+ 38,625 1,005 ROBERT HALF INTERNATIONAL INCORPORATED 26,864 731 SALESFORCE.COM INCORPORATED+ 53,926 5,015 SUN MICROSYSTEMS INCORPORATED+ 46,991 5,396 SYMANTEC CORPORATION+ 96,534 1,312 TOTAL SYSTEM SERVICES INCORPORATED 22,658 1,280 VERISIGN INCORPORATED+ 31,027 2,981 VISA INCORPORATED CLASS A SHARES 260,718 2,555,972 -------------- CASINO & GAMING: 0.06% 1,977 INTERNATIONAL GAME TECHNOLOGY 37,108 459 WYNN RESORTS LIMITED 26,728 63,836 -------------- CHEMICALS: 0.36% 7,613 DOW CHEMICAL COMPANY 210,347 6,016 E.I. DU PONT DE NEMOURS & COMPANY 202,559 412,906 -------------- CHEMICALS & ALLIED PRODUCTS: 0.76% 1,409 AIR PRODUCTS & CHEMICALS INCORPORATED 114,214 546 AIRGAS INCORPORATED 25,990 323 CF INDUSTRIES HOLDINGS INCORPORATED 29,322
68 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- CHEMICALS & ALLIED PRODUCTS (continued) 484 EASTMAN CHEMICAL COMPANY $ 29,156 1,581 ECOLAB INCORPORATED 70,481 481 FMC CORPORATION 26,821 3,628 MONSANTO COMPANY 296,589 1,111 PPG INDUSTRIES INCORPORATED 65,038 2,042 PRAXAIR INCORPORATED 163,993 810 SIGMA-ALDRICH CORPORATION 40,929 862,533 -------------- COAL MINING: 0.15% 1,203 CONSOL ENERGY INCORPORATED 59,909 569 MASSEY ENERGY COMPANY 23,904 1,783 PEABODY ENERGY CORPORATION 80,609 164,422 -------------- COMMERCIAL SERVICES: 0.09% 2,141 PAYCHEX INCORPORATED 65,600 2,038 SAIC INCORPORATED+ 38,600 104,200 -------------- COMMUNICATIONS: 2.30% 39,283 AT&T INCORPORATED 1,101,103 1,980 CENTURYTEL INCORPORATED 71,699 19,004 COMCAST CORPORATION CLASS A 320,407 1,736 METROPCS COMMUNICATIONS INCORPORATED+ 13,246 14,999 NEWS CORPORATION CLASS A 205,336 9,885 QWEST COMMUNICATIONS INTERNATIONAL INCORPORATED 41,616 595 SCRIPPS NETWORKS INTERACTIVE INCORPORATED 24,693 19,764 SPRINT NEXTEL CORPORATION+ 72,336 2,346 TIME WARNER CABLE INCORPORATED 97,101 18,910 VERIZON COMMUNICATIONS INCORPORATED 626,488 2,907 WINDSTREAM CORPORATION 31,948 2,605,973 -------------- COMPUTER SOFTWARE & SERVICES: 0.03% 1,140 AKAMAI TECHNOLOGIES INCORPORATED+ 28,876 -------------- COMPUTERS - MEMORY DEVICES: 0.21% 13,579 EMC CORPORATION+ 237,225 -------------- CONSTRUCTION SPECIAL TRADE CONTRACTORS: 0.03% 1,396 QUANTA SERVICES INCORPORATED+ 29,093 -------------- COSMETICS, PERSONAL CARE: 1.39% 2,842 AVON PRODUCTS INCORPORATED 89,523 3,309 COLGATE-PALMOLIVE COMPANY 271,834 785 ESTEE LAUDER COMPANIES INCORPORATED CLASS A 37,963 19,450 PROCTER & GAMBLE COMPANY 1,179,254 1,578,574 -------------- CRUDE PETROLEUM & NATURAL GAS: 0.07% 1,154 NOBLE ENERGY INCORPORATED 82,188 -------------- DEPOSITORY INSTITUTIONS: 4.34% 66,150 BANK OF AMERICA CORPORATION 996,219 8,016 BANK OF NEW YORK MELLON CORPORATION 224,208
Wells Fargo Advantage Variable Trust Funds 69 Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- DEPOSITORY INSTITUTIONS (continued) 4,577 BB&T CORPORATION $ 116,118 129,813 CITIGROUP INCORPORATED 429,681 1,006 COMERICA INCORPORATED 29,747 5,294 FIFTH THIRD BANCORP 51,617 1,477 FIRST HORIZON NATIONAL CORPORATION+ 19,796 3,147 HUDSON CITY BANCORP INCORPORATED 43,208 4,760 HUNTINGTON BANCSHARES INCORPORATED 17,374 26,233 JPMORGAN CHASE & COMPANY 1,093,139 5,848 KEYCORP 32,456 550 M&T BANK CORPORATION 36,790 3,492 MARSHALL & ILSLEY CORPORATION 19,031 1,607 NORTHERN TRUST CORPORATION 84,207 3,071 PNC FINANCIAL SERVICES GROUP 162,118 7,908 REGIONS FINANCIAL CORPORATION 41,833 3,293 STATE STREET CORPORATION 143,377 3,322 SUNTRUST BANKS INCORPORATED 67,403 12,731 US BANCORP 286,575 34,025 WELLS FARGO & COMPANY(l) 918,335 4,607 WESTERN UNION COMPANY 86,842 920 ZIONS BANCORPORATION 11,804 4,911,878 -------------- DIVERSIFIED FINANCIAL SERVICES: 0.01% 1,211 JANUS CAPITAL GROUP INCORPORATED 16,288 -------------- E-COMMERCE/SERVICES: 0.48% 2,219 AMAZON.COM INCORPORATED+ 298,500 7,488 EBAY INCORPORATED+ 176,268 292 PRICELINE.COM INCORPORATED+ 63,802 538,570 -------------- EATING & DRINKING PLACES: 0.52% 929 DARDEN RESTAURANTS INCORPORATED 32,580 7,184 MCDONALD'S CORPORATION 448,569 3,113 YUM! BRANDS INCORPORATED 108,862 590,011 -------------- EDUCATIONAL SERVICES: 0.07% 855 APOLLO GROUP INCORPORATED CLASS A+ 51,796 411 DEVRY INCORPORATED 23,316 75,112 -------------- ELECTRIC, GAS & SANITARY SERVICES: 2.44% 4,444 AES CORPORATION+ 59,150 1,128 ALLEGHENY ENERGY INCORPORATED 26,485 1,577 AMEREN CORPORATION 44,077 3,179 AMERICAN ELECTRIC POWER COMPANY INCORPORATED 110,597 2,598 CENTERPOINT ENERGY INCORPORATED 37,697 1,528 CMS ENERGY CORPORATION 23,928 1,868 CONSOLIDATED EDISON INCORPORATED 84,863 1,337 CONSTELLATION ENERGY GROUP INCORPORATED 47,022 3,975 DOMINION RESOURCES INCORPORATED 154,707 1,097 DTE ENERGY COMPANY 47,818 8,684 DUKE ENERGY CORPORATION 149,452 2,168 EDISON INTERNATIONAL 75,403
70 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- ELECTRIC, GAS & SANITARY SERVICES (continued) 4,668 EL PASO CORPORATION $ 45,886 1,257 ENTERGY CORPORATION 102,873 4,389 EXELON CORPORATION 214,490 2,029 FIRSTENERGY CORPORATION 94,247 2,751 FPL GROUP INCORPORATED 145,308 2,079 FRONTIER COMMUNICATIONS CORPORATION 16,237 508 INTEGRYS ENERGY GROUP INCORPORATED 21,331 301 NICOR INCORPORATED 12,672 1,835 NISOURCE INCORPORATED 28,222 1,168 NORTHEAST UTILITIES 30,123 1,475 PEPCO HOLDINGS INCORPORATED 24,854 2,469 PG&E CORPORATION 110,241 674 PINNACLE WEST CAPITAL CORPORATION 24,655 2,510 PPL CORPORATION 81,098 1,861 PROGRESS ENERGY INCORPORATED 76,320 3,368 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED 111,986 1,160 QUESTAR CORPORATION 48,221 2,151 REPUBLIC SERVICES INCORPORATED 60,895 737 SCANA CORPORATION 27,770 1,640 SEMPRA ENERGY 91,807 4,305 SPECTRA ENERGY CORPORATION 88,296 560 STERICYCLE INCORPORATED+ 30,895 1,423 TECO ENERGY INCORPORATED 23,081 5,327 THE SOUTHERN COMPANY 177,496 3,259 WASTE MANAGEMENT INCORPORATED 110,187 778 WISCONSIN ENERGY CORPORATION 38,768 3,039 XCEL ENERGY INCORPORATED 64,488 2,763,646 -------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 3.10% 3,748 ADVANCED MICRO DEVICES INCORPORATED+ 36,281 1,966 ALTERA CORPORATION 44,491 1,141 AMPHENOL CORPORATION CLASS A 52,691 1,942 ANALOG DEVICES INCORPORATED 61,328 2,867 BROADCOM CORPORATION CLASS A+ 90,167 38,295 CISCO SYSTEMS INCORPORATED+ 916,782 5,007 EMERSON ELECTRIC COMPANY 213,298 322 FIRST SOLAR INCORPORATED+ 43,599 70,881 GENERAL ELECTRIC COMPANY 1,072,430 461 HARMAN INTERNATIONAL INDUSTRIES INCORPORATED 16,264 876 HARRIS CORPORATION 41,654 1,269 JABIL CIRCUIT INCORPORATED 22,043 1,481 JDS UNIPHASE CORPORATION+ 12,218 1,137 KLA-TENCOR CORPORATION 41,114 773 L-3 COMMUNICATIONS HOLDINGS INCORPORATED 67,212 1,485 LINEAR TECHNOLOGY CORPORATION 45,352 4,348 LSI LOGIC CORPORATION+ 26,131 1,488 MEMC ELECTRONIC MATERIALS INCORPORATED+ 20,267 1,222 MICROCHIP TECHNOLOGY INCORPORATED 35,511 5,657 MICRON TECHNOLOGY INCORPORATED+ 59,738 902 MOLEX INCORPORATED 19,438 1,575 NATIONAL SEMICONDUCTOR CORPORATION 24,192 2,256 NETAPP INCORPORATED+ 77,584 645 NOVELLUS SYSTEMS INCORPORATED+ 15,054 3,694 NVIDIA CORPORATION+ 69,004 762 QLOGIC CORPORATION+ 14,379
Wells Fargo Advantage Variable Trust Funds 71 Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (continued) 1,046 ROCKWELL COLLINS INCORPORATED $ 57,907 2,570 TELLABS INCORPORATED+ 14,598 8,340 TEXAS INSTRUMENTS INCORPORATED 217,340 494 WHIRLPOOL CORPORATION 39,846 1,843 XILINX INCORPORATED 46,186 3,514,099 -------------- ELECTRONIC COMPUTERS: 1.73% 15,784 HEWLETT-PACKARD COMPANY 813,034 8,744 INTERNATIONAL BUSINESS MACHINES CORPORATION 1,144,590 1,957,624 -------------- ENGINEERING CONSTRUCTION: 0.05% 1,191 FLUOR CORPORATION 53,643 -------------- ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES: 0.06% 827 JACOBS ENGINEERING GROUP INCORPORATED+ 31,103 1,306 MOODY'S CORPORATION 35,001 66,104 -------------- FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT: 0.15% 626 BALL CORPORATION 32,364 2,567 ILLINOIS TOOL WORKS INCORPORATED 123,190 384 SNAP-ON INCORPORATED 16,228 171,782 -------------- FOOD: 0.16% 2,948 CONAGRA FOODS INCORPORATED 67,951 3,939 SYSCO CORPORATION 110,056 178,007 -------------- FOOD & KINDRED PRODUCTS: 1.68% 4,276 ARCHER DANIELS MIDLAND COMPANY 133,882 1,264 CAMPBELL SOUP COMPANY 42,723 2,115 COCA-COLA ENTERPRISES INCORPORATED 44,838 1,327 CONSTELLATION BRANDS INCORPORATED CLASS A+ 21,139 1,201 DEAN FOODS COMPANY+ 21,666 1,691 DR PEPPER SNAPPLE GROUP INCORPORATED 47,855 2,174 GENERAL MILLS INCORPORATED 153,941 2,101 H.J. HEINZ COMPANY 89,839 464 HORMEL FOODS CORPORATION 17,841 792 JM SMUCKER COMPANY 48,906 1,692 KELLOGG COMPANY 90,014 9,833 KRAFT FOODS INCORPORATED CLASS A 267,261 871 MCCORMICK & COMPANY INCORPORATED 31,469 1,361 MEAD JOHNSON & COMPANY 59,476 1,046 MOLSON COORS BREWING COMPANY 47,237 958 PEPSI BOTTLING GROUP INCORPORATED 35,925 10,388 PEPSICO INCORPORATED 631,590 4,642 SARA LEE CORPORATION 56,540 1,106 THE HERSHEY COMPANY 39,584 2,031 TYSON FOODS INCORPORATED CLASS A 24,920 1,906,646 --------------
72 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- FOOD STORES: 0.27% 4,332 KROGER COMPANY $ 88,936 2,705 SAFEWAY INCORPORATED 57,589 4,945 STARBUCKS CORPORATION+ 114,032 1,411 SUPERVALU INCORPORATED 17,934 936 WHOLE FOODS MARKET INCORPORATED+ 25,693 304,184 -------------- FOOTWEAR: 0.15% 2,593 NIKE INCORPORATED CLASS B 171,320 -------------- FORESTRY: 0.05% 1,407 WEYERHAEUSER COMPANY 60,698 -------------- FURNITURE & FIXTURES: 0.05% 1,012 LEGGETT & PLATT INCORPORATED 20,645 2,390 MASCO CORPORATION 33,006 53,651 -------------- GENERAL MERCHANDISE STORES: 1.11% 550 BIG LOTS INCORPORATED+ 15,939 923 FAMILY DOLLAR STORES INCORPORATED 25,687 1,570 JCPENNEY COMPANY INCORPORATED 41,778 2,802 MACY'S INCORPORATED 46,962 323 SEARS HOLDINGS CORPORATION+ 26,954 5,008 TARGET CORPORATION 242,237 2,794 TJX COMPANIES INCORPORATED 102,121 14,204 WAL-MART STORES INCORPORATED 759,204 1,260,882 -------------- HEALTH CARE: 0.05% 1,079 HOSPIRA INCORPORATED+ 55,029 -------------- HEALTH SERVICES: 0.21% 2,414 CARDINAL HEALTH INCORPORATED 77,827 680 DAVITA INCORPORATED+ 39,943 1,130 HUMANA INCORPORATED+ 49,596 706 LABORATORY CORPORATION OF AMERICA HOLDINGS+ 52,837 2,882 TENET HEALTHCARE CORPORATION+ 15,534 235,737 -------------- HOLDING & OTHER INVESTMENT OFFICES: 0.66% 778 APARTMENT INVESTMENT & MANAGEMENT COMPANY CLASS A 12,386 542 AVALONBAY COMMUNITIES INCORPORATED 44,504 923 BOSTON PROPERTIES INCORPORATED 61,906 1,838 EQUITY RESIDENTIAL 62,088 1,951 HCP INCORPORATED 59,584 4,112 HOST HOTELS & RESORTS INCORPORATED 47,987 2,674 KIMCO REALTY CORPORATION 36,179 1,083 PLUM CREEK TIMBER COMPANY 40,894 3,150 PROLOGIS 43,124 902 PUBLIC STORAGE INCORPORATED 73,468 1,898 SIMON PROPERTY GROUP INCORPORATED 151,460 1,042 VENTAS INCORPORATED 45,577 1,046 VORNADO REALTY TRUST 73,157 752,314 --------------
Wells Fargo Advantage Variable Trust Funds 73 Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES: 0.06% 1,748 BED BATH & BEYOND INCORPORATED+ $ 67,525 -------------- HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES: 0.10% 1,688 MARRIOTT INTERNATIONAL INCORPORATED CLASS A 46,007 1,244 STARWOOD HOTELS & RESORTS WORLDWIDE INCORPORATED 45,493 1,189 WYNDHAM WORLDWIDE CORPORATION 23,982 115,482 -------------- HOUSEHOLD PRODUCTS, WARE: 0.14% 750 AVERY DENNISON CORPORATION 27,368 930 CLOROX COMPANY 56,730 1,000 FORTUNE BRANDS INCORPORATED 43,200 1,848 NEWELL RUBBERMAID INCORPORATED 27,738 155,036 -------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 3.34% 4,712 3M COMPANY 389,541 5,995 APPLE INCORPORATED+ 1,264,106 8,878 APPLIED MATERIALS INCORPORATED 123,759 400 BLACK & DECKER CORPORATION 25,932 1,627 CAMERON INTERNATIONAL CORPORATION+ 68,009 4,145 CATERPILLAR INCORPORATED 236,224 1,343 CUMMINS INCORPORATED 61,590 2,815 DEERE & COMPANY 152,263 11,462 DELL INCORPORATED+<< 164,594 1,239 DOVER CORPORATION 51,555 1,103 EATON CORPORATION 70,173 371 FLOWSERVE CORPORATION 35,071 813 FMC TECHNOLOGIES INCORPORATED+ 47,024 36,760 INTEL CORPORATION 749,904 519 LEXMARK INTERNATIONAL INCORPORATED+ 13,484 778 PALL CORPORATION 28,164 1,069 PARKER HANNIFIN CORPORATION 57,598 1,378 PITNEY BOWES INCORPORATED 31,363 1,519 SANDISK CORPORATION+ 44,036 1,647 SMITH INTERNATIONAL INCORPORATED 44,749 535 STANLEY WORKS 27,558 1,139 TERADATA CORPORATION+ 35,799 1,500 WESTERN DIGITAL CORPORATION+ 66,225 3,788,721 -------------- INFORMATION & BUSINESS SERVICES: 1.00% 1,605 GOOGLE INCORPORATED CLASS A+ 995,068 7,927 YAHOO! INCORPORATED+ 133,015 1,128,083 -------------- INSURANCE AGENTS, BROKERS & SERVICE: 0.07% 3,511 MARSH & MCLENNAN COMPANIES INCORPORATED 77,523 -------------- INSURANCE CARRIERS: 1.86% 2,885 AETNA INCORPORATED 91,455 3,114 AFLAC INCORPORATED 144,023 3,571 ALLSTATE CORPORATION 107,273 896 AMERICAN INTERNATIONAL GROUP INCORPORATED+ 26,868 1,823 AON CORPORATION 69,894 777 ASSURANT INCORPORATED 22,906 2,273 CHUBB CORPORATION 111,786
74 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- INSURANCE CARRIERS (continued) 1,820 CIGNA CORPORATION $ 64,191 1,083 CINCINNATI FINANCIAL CORPORATION 28,418 3,252 GENWORTH FINANCIAL INCORPORATED+ 36,910 2,549 HARTFORD FINANCIAL SERVICES GROUP INCORPORATED 59,290 1,262 LEUCADIA NATIONAL CORPORATION 30,023 2,010 LINCOLN NATIONAL CORPORATION 50,009 2,402 LOEWS CORPORATION 87,313 5,450 METLIFE INCORPORATED 192,658 2,123 PRINCIPAL FINANCIAL GROUP INCORPORATED 51,037 3,088 PRUDENTIAL FINANCIAL INCORPORATED 153,659 4,488 THE PROGRESSIVE CORPORATION 80,739 3,637 THE TRAVELERS COMPANIES INCORPORATED 181,341 551 TORCHMARK CORPORATION 24,216 7,735 UNITEDHEALTH GROUP INCORPORATED 235,763 2,208 UNUMPROVIDENT CORPORATION 43,100 3,051 WELLPOINT INCORPORATED+ 177,843 2,277 XL CAPITAL LIMITED CLASS A 41,737 2,112,452 -------------- LEATHER & LEATHER PRODUCTS: 0.07% 2,123 COACH INCORPORATED 77,553 -------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 0.82% 2,297 AGILENT TECHNOLOGIES INCORPORATED+ 71,368 1,578 BECTON DICKINSON & COMPANY 124,441 10,055 BOSTON SCIENTIFIC CORPORATION+ 90,495 642 C.R. BARD INCORPORATED 50,012 1,179 CAREFUSION CORPORATION+ 29,487 1,732 DANAHER CORPORATION 130,246 1,012 DENTSPLY INTERNATIONAL INCORPORATED 35,592 1,785 EASTMAN KODAK COMPANY 7,533 1,010 FLIR SYSTEMS INCORPORATED+ 33,047 370 MILLIPORE CORPORATION+ 26,770 777 PERKINELMER INCORPORATED 15,998 1,033 QUEST DIAGNOSTICS INCORPORATED 62,373 946 ROCKWELL AUTOMATION INCORPORATED 44,443 606 ROPER INDUSTRIES INCORPORATED 31,736 1,164 TERADYNE INCORPORATED+ 12,490 2,718 THERMO FISHER SCIENTIFIC INCORPORATED+ 129,621 630 WATERS CORPORATION+ 39,035 934,687 -------------- MEDIA - COMMUNICATION: 0.19% 6,369 DIRECTV+ 212,406 -------------- MEDICAL EQUIPMENT & SUPPLIES: 0.46% 254 INTUITIVE SURGICAL INCORPORATED+ 77,043 7,368 MEDTRONIC INCORPORATED 324,045 2,225 ST. JUDE MEDICAL INCORPORATED+ 81,836 828 VARIAN MEDICAL SYSTEMS INCORPORATED+ 38,792 521,716 -------------- MEDICAL MANAGEMENT SERVICES: 0.34% 985 COVENTRY HEALTH CARE INCORPORATED+ 23,926 1,828 EXPRESS SCRIPTS INCORPORATED+ 158,031 3,173 MEDCO HEALTH SOLUTIONS INCORPORATED+ 202,786 384,743 --------------
Wells Fargo Advantage Variable Trust Funds 75 Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- MEDICAL PRODUCTS: 0.48% 2,047 ALLERGAN INCORPORATED $ 128,981 4,013 BAXTER INTERNATIONAL INCORPORATED 235,483 1,879 STRYKER CORPORATION 94,645 1,417 ZIMMER HOLDINGS INCORPORATED+ 83,759 542,868 -------------- METAL MINING: 0.37% 872 CLIFFS NATURAL RESOURCES INCORPORATED 40,190 2,861 FREEPORT-MCMORAN COPPER & GOLD INCORPORATED CLASS B 229,710 3,263 NEWMONT MINING CORPORATION 154,373 424,273 -------------- MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS: 0.04% 834 VULCAN MATERIALS COMPANY 43,927 -------------- MISCELLANEOUS MANUFACTURING INDUSTRIES: 0.07% 829 HASBRO INCORPORATED 26,578 2,406 MATTEL INCORPORATED 48,072 74,650 -------------- MISCELLANEOUS RETAIL: 0.76% 2,902 COSTCO WHOLESALE CORPORATION 171,711 9,390 CVS CAREMARK CORPORATION 302,452 1,828 OFFICE DEPOT INCORPORATED+ 11,791 833 RADIOSHACK CORPORATION 16,244 4,819 STAPLES INCORPORATED 118,499 6,582 WALGREEN COMPANY 241,691 862,388 -------------- MISCELLANEOUS SERVICES: 0.03% 346 DUN & BRADSTREET CORPORATION 29,192 -------------- MOTION PICTURES: 0.56% 7,772 TIME WARNER INCORPORATED 226,476 12,805 WALT DISNEY COMPANY 412,961 639,437 -------------- MOTOR FREIGHT TRANSPORTATION & WAREHOUSING: 0.49% 2,080 FEDEX CORPORATION 173,576 6,609 UNITED PARCEL SERVICE INCORPORATED CLASS B 379,158 552,734 -------------- NON-DEPOSITORY CREDIT INSTITUTIONS: 0.50% 7,916 AMERICAN EXPRESS COMPANY 320,756 2,995 CAPITAL ONE FINANCIAL CORPORATION 114,828 3,613 DISCOVER FINANCIAL SERVICES 53,147 2,318 PEOPLE'S UNITED FINANCIAL INCORPORATED 38,711 3,159 SLM CORPORATION+ 35,602 563,044 -------------- OFFICE EQUIPMENT: 0.04% 5,786 XEROX CORPORATION 48,950 -------------- OIL & GAS EXTRACTION: 2.21% 3,272 ANADARKO PETROLEUM CORPORATION 204,238 2,237 APACHE CORPORATION 230,791
76 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- OIL & GAS EXTRACTION (continued) 1,953 BJ SERVICES COMPANY $ 36,326 690 CABOT OIL & GAS CORPORATION 30,077 4,311 CHESAPEAKE ENERGY CORPORATION 111,569 1,663 DENBURY RESOURCES INCORPORATED+ 24,612 2,956 DEVON ENERGY CORPORATION 217,266 462 DIAMOND OFFSHORE DRILLING INCORPORATED 45,470 1,679 EOG RESOURCES INCORPORATED 163,367 871 EQT CORPORATION 38,254 1,885 NABORS INDUSTRIES LIMITED+ 41,263 5,403 OCCIDENTAL PETROLEUM CORPORATION 439,534 767 PIONEER NATURAL RESOURCES COMPANY 36,946 1,050 RANGE RESOURCES CORPORATION 52,343 757 ROWAN COMPANIES INCORPORATED 17,138 7,993 SCHLUMBERGER LIMITED 520,264 2,298 SOUTHWESTERN ENERGY COMPANY+ 110,764 3,863 XTO ENERGY INCORPORATED 179,745 2,499,967 -------------- OIL & OIL SERVICES: 0.24% 2,062 BAKER HUGHES INCORPORATED 83,470 6,004 HALLIBURTON COMPANY 180,660 264,130 -------------- OIL FIELD EQUIPMENT & SERVICES: 0.11% 2,784 NATIONAL OILWELL VARCO INCORPORATED 122,747 -------------- PAPER & ALLIED PRODUCTS: 0.13% 720 BEMIS COMPANY INCORPORATED 21,348 2,883 INTERNATIONAL PAPER COMPANY 77,207 1,139 MEADWESTVACO CORPORATION 32,610 880 PACTIV CORPORATION+ 21,243 152,408 -------------- PERSONAL SERVICES: 0.06% 875 CINTAS CORPORATION 22,794 2,232 H & R BLOCK INCORPORATED 50,488 73,282 -------------- PETROLEUM REFINING & RELATED INDUSTRIES: 3.63% 13,355 CHEVRON CORPORATION 1,028,201 9,877 CONOCOPHILLIPS 504,418 31,603 EXXON MOBIL CORPORATION 2,155,009 1,937 HESS CORPORATION 117,189 4,712 MARATHON OIL CORPORATION 147,116 1,271 MURPHY OIL CORPORATION 68,888 778 SUNOCO INCORPORATED 20,306 933 TESORO PETROLEUM CORPORATION 12,642 3,756 VALERO ENERGY CORPORATION 62,913 4,116,682 -------------- PHARMACEUTICALS: 3.79% 10,296 ABBOTT LABORATORIES 555,881 1,917 AMERISOURCEBERGEN CORPORATION 49,976 11,395 BRISTOL-MYERS SQUIBB COMPANY 287,724 6,731 ELI LILLY & COMPANY 240,364 2,008 FOREST LABORATORIES INCORPORATED+ 64,477 18,367 JOHNSON & JOHNSON 1,183,018
Wells Fargo Advantage Variable Trust Funds 77 Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- PHARMACEUTICALS (continued) 1,652 KING PHARMACEUTICALS INCORPORATED+ $ 20,270 1,783 MCKESSON CORPORATION 111,438 20,334 MERCK & COMPANY INCORPORATED 743,004 2,034 MYLAN LABORATORIES INCORPORATED+ 37,487 53,719 PFIZER INCORPORATED 977,155 706 WATSON PHARMACEUTICALS INCORPORATED+ 27,965 4,298,759 -------------- PIPELINES: 0.07% 3,881 THE WILLIAMS COMPANIES INCORPORATED 81,811 -------------- PRIMARY METAL INDUSTRIES: 0.36% 728 AK STEEL HOLDING CORPORATION 15,543 6,486 ALCOA INCORPORATED 104,554 652 ALLEGHENY TECHNOLOGIES INCORPORATED 29,190 2,095 NUCOR CORPORATION 97,732 936 PRECISION CASTPARTS CORPORATION 103,288 563 TITANIUM METALS CORPORATION 7,049 954 UNITED STATES STEEL CORPORATION 52,584 409,940 -------------- PRINTING, PUBLISHING & ALLIED INDUSTRIES: 0.30% 4,508 CBS CORPORATION CLASS B 63,337 1,572 GANNETT COMPANY INCORPORATED 23,344 2,096 MCGRAW-HILL COMPANIES INCORPORATED 70,237 244 MEREDITH CORPORATION 7,527 769 NEW YORK TIMES COMPANY CLASS A 9,505 1,366 RR DONNELLEY & SONS COMPANY 30,421 4,040 VIACOM INCORPORATED CLASS B+ 120,109 41 WASHINGTON POST COMPANY CLASS B 18,024 342,504 -------------- RAILROAD TRANSPORTATION: 0.57% 1,745 BURLINGTON NORTHERN SANTA FE CORPORATION 172,092 2,613 CSX CORPORATION 126,704 2,449 NORFOLK SOUTHERN CORPORATION 128,377 3,358 UNION PACIFIC CORPORATION 214,576 641,749 -------------- REAL ESTATE: 0.02% 1,795 CB RICHARD ELLIS GROUP INCORPORATED CLASS A+ 24,358 -------------- REAL ESTATE INVESTMENT TRUSTS (REITS): 0.03% 818 HEALTH CARE REIT INCORPORATED 36,254 -------------- RETAIL: 0.10% 2,273 BEST BUY COMPANY INCORPORATED 89,693 1,096 GAMESTOP CORPORATION CLASS A+ 24,046 113,739 -------------- RETAIL-SPECIAL LINE: 0.03% 828 TIFFANY & COMPANY 35,604 -------------- RUBBER & MISCELLANEOUS PLASTICS PRODUCTS: 0.04% 1,058 SEALED AIR CORPORATION 23,128 1,612 THE GOODYEAR TIRE & RUBBER COMPANY+ 22,729 45,857 --------------
78 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 1.44% 1,697 AMERIPRISE FINANCIAL INCORPORATED $ 65,878 6,343 CHARLES SCHWAB CORPORATION 119,375 442 CME GROUP INCORPORATED 148,490 10,307 E*TRADE FINANCIAL CORPORATION+ 18,037 586 FEDERATED INVESTORS INCORPORATED CLASS B 16,115 991 FRANKLIN RESOURCES INCORPORATED 104,402 3,422 GOLDMAN SACHS GROUP INCORPORATED 577,770 487 INTERCONTINENTAL EXCHANGE INCORPORATED+ 54,690 2,854 INVESCO LIMITED 67,040 1,081 LEGG MASON INCORPORATED 32,603 9,049 MORGAN STANLEY 267,850 983 NASDAQ STOCK MARKET INCORPORATED+ 19,483 1,730 NYSE EURONEXT INCORPORATED 43,769 1,714 T. ROWE PRICE GROUP INCORPORATED 91,271 1,626,773 -------------- SOFTWARE: 1.42% 2,166 ELECTRONIC ARTS INCORPORATED+ 38,447 51,425 MICROSOFT CORPORATION 1,567,948 1,606,395 -------------- STONE, CLAY, GLASS & CONCRETE PRODUCTS: 0.21% 10,359 CORNING INCORPORATED 200,032 1,121 OWENS-ILLINOIS INCORPORATED+ 36,847 236,879 -------------- TELECOMMUNICATIONS: 0.66% 2,672 AMERICAN TOWER CORPORATION CLASS A+ 115,457 15,384 MOTOROLA INCORPORATED 119,380 11,119 QUALCOMM INCORPORATED 514,365 749,202 -------------- TOBACCO PRODUCTS: 0.91% 13,794 ALTRIA GROUP INCORPORATED 270,776 1,069 LORILLARD INCORPORATED 85,766 12,679 PHILIP MORRIS INTERNATIONAL 611,001 1,125 REYNOLDS AMERICAN INCORPORATED 59,591 1,027,134 -------------- TRANSPORTATION BY AIR: 0.05% 4,939 SOUTHWEST AIRLINES COMPANY 56,453 -------------- TRANSPORTATION EQUIPMENT: 1.47% 4,837 BOEING COMPANY 261,827 2,568 GENERAL DYNAMICS CORPORATION 175,061 1,062 GENUINE PARTS COMPANY 40,314 827 GOODRICH CORPORATION 53,135 1,560 HARLEY-DAVIDSON INCORPORATED 39,312 5,079 HONEYWELL INTERNATIONAL INCORPORATED 199,097 1,216 ITT CORPORATION 60,484 2,129 LOCKHEED MARTIN CORPORATION 160,420 2,088 NORTHROP GRUMMAN CORPORATION 116,615 2,419 PACCAR INCORPORATED 87,737 1,804 TEXTRON INCORPORATED 33,933 6,241 UNITED TECHNOLOGIES CORPORATION 433,188 1,661,123 --------------
Wells Fargo Advantage Variable Trust Funds 79 Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- TRANSPORTATION SERVICES: 0.10% 1,116 C.H. ROBINSON WORLDWIDE INCORPORATED $ 65,543 1,411 EXPEDITORS INTERNATIONAL OF WASHINGTON INCORPORATED 49,004 114,547 -------------- TRAVEL & RECREATION: 0.11% 2,909 CARNIVAL CORPORATION 92,186 1,403 EXPEDIA INCORPORATED+ 36,071 128,257 -------------- WHOLESALE TRADE NON-DURABLE GOODS: 0.03% 731 BROWN-FORMAN CORPORATION CLASS B 39,160 -------------- WHOLESALE TRADE-DURABLE GOODS: 0.21% 2,765 KIMBERLY-CLARK CORPORATION 176,158 619 PATTERSON COMPANIES INCORPORATED+ 17,320 420 W.W. GRAINGER INCORPORATED 40,655 234,133 -------------- TOTAL COMMON STOCKS (COST $65,663,625) 66,090,148 --------------
INTEREST PRINCIPAL RATE MATURITY DATE --------- -------- ------------- US TREASURY SECURITIES: 36.15% US TREASURY BONDS: 36.15% $ 2,620,000 US TREASURY BOND 6.25% 05/15/2030 3,200,492 2,588,000 US TREASURY BOND 5.38 02/15/2031 2,859,740 4,388,000 US TREASURY BOND<< 4.50 02/15/2036 4,322,180 2,522,000 US TREASURY BOND<< 4.75 02/15/2037 2,577,169 2,569,000 US TREASURY BOND 5.00 05/15/2037 2,728,358 2,717,000 US TREASURY BOND 4.38 02/15/2038 2,608,320 3,645,000 US TREASURY BOND 4.50 05/15/2038 3,569,253 4,446,000 US TREASURY BOND 3.50 02/15/2039 3,641,550 6,162,000 US TREASURY BOND 4.25 05/15/2039 5,780,726 6,990,000 US TREASURY BOND<< 4.50 08/15/2039 6,831,635 2,950,000 US TREASURY BOND 4.38 11/15/2039 2,823,705 TOTAL US TREASURY SECURITIES (COST $44,350,654) 40,943,128 --------------
SHARES YIELD ------ -------- COLLATERAL FOR SECURITIES LENDING: 6.36% COLLATERAL INVESTED IN MONEY MARKET FUNDS: 1.16% 329,993 AIM STIT-LIQUID ASSETS PORTFOLIO(u) 0.18 329,993 329,993 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(u) 0.12 329,993 329,993 DWS MONEY MARKET SERIES INSTITUTIONAL(u) 0.13 329,993 330,051 JPMORGAN PRIME MONEY MARKET FUND(u) 0.14 330,051 1,320,030 --------------
PRINCIPAL --------- COLLATERAL INVESTED IN OTHER ASSETS: 5.20% $ 47,825 ANTALIS US FUNDING CORPORATION++(p) 0.28 01/07/2010 47,823 71,738 ANTALIS US FUNDING CORPORATION++(p) 0.29 01/29/2010 71,721 143,475 ATLANTIC ASSET SECURITIZATION CORPORATION++(p) 0.19 01/15/2010 143,465 112,389 BANCO SANTANDER SA (MADRID) 0.08 01/04/2010 112,389 382,601 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $382,601) 0.01 01/04/2010 382,601
80 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COLLATERAL INVESTED IN OTHER ASSETS (continued) $ 112,389 BANK OF IRELAND 0.05% 01/04/2010 $ 112,389 112,389 BNP PARIBAS (PARIS) 0.11 01/04/2010 112,389 5,261 CALCASIEU PARISH LA+/-ss 0.37 12/01/2027 5,261 114,780 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY+/-ss 0.25 11/01/2026 114,780 15,304 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.32 06/01/2028 15,304 90,868 CALYON (NEW YORK) 0.18 01/08/2010 90,868 12,686 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.28 10/01/2038 12,686 124,345 COMMERZBANK AG (GRAND CAYMAN) 0.00 01/04/2010 124,345 23,913 COOK COUNTY IL+/-ss 0.40 11/01/2030 23,913 83,694 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $83,694) 0.01 01/04/2010 83,694 112,389 DANSKE BANK A/S COPENHAGEN 0.12 01/04/2010 112,389 81,303 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.35 12/15/2037 81,303 133,910 ENI FINANCE USA INCORPORATED++ 0.19 02/04/2010 133,886 47,825 FORTIS BANK NV SA 0.19 01/19/2010 47,825 14,348 GDF SUEZ++ 0.19 01/12/2010 14,347 119,563 GOTHAM FUNDING CORPORATION++(p) 0.18 01/15/2010 119,554 23,913 GOTHAM FUNDING CORPORATION++(p) 0.19 01/05/2010 23,912 143,475 GOVCO INCORPORATED++(p) 0.19 01/12/2010 143,467 530,152 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 204,533 66,955 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 05/01/2023 66,955 48,542 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 07/01/2034 48,542 78,624 HAMILTON COUNTY OHIO HOSPITALS+/-ss 0.20 05/15/2037 78,624 7,891 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.27 11/01/2042 7,891 38,738 HOUSTON TX UTILITY SYSTEM+/-ss 0.25 05/15/2034 38,738 13,678 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.28 07/01/2029 13,678 9,565 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.28 01/01/2018 9,565 13,869 ING USA FUNDING LLC 0.20 01/04/2010 13,869 83,694 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY US TREASURY SECURITIES (MATURITY VALUE $83,694) 0.01 01/04/2010 83,694 14,348 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.28 04/15/2025 14,348 93,259 KOCH RESOURCES LLC++ 0.19 01/25/2010 93,247 54,999 KOCH RESOURCES LLC++ 0.19 01/29/2010 54,991 119,563 LLOYDS TSB BANK PLC 0.18 01/08/2010 119,563 47,825 LMA AMERICAS LLC++(p) 0.19 01/19/2010 47,821 118,606 MASSACHUSETTS HEFA+/-ss 0.22 10/01/2034 118,606 23,673 MATCHPOINT MASTER TRUST++(p) 0.19 01/05/2010 23,673 95,650 MATCHPOINT MASTER TRUST++(p) 0.20 01/27/2010 95,636 13,128 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.27 02/01/2036 13,128 9,565 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.28 01/01/2018 9,565 105,215 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.25 07/01/2034 105,215 95,650 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.22 12/01/2040 95,650 87,281 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.20 01/12/2010 87,275 38,260 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.21 01/11/2010 38,258 23,410 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.29 01/01/2034 23,410 52,608 REGENCY MARKETS #1 LLC++(p) 0.20 01/07/2010 52,606 64,540 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.18 12/01/2028 64,540 153,040 SANPAOLO IMI US FINANCIAL COMPANY 0.19 01/19/2010 153,026 100,433 SCALDIS CAPITAL LIMITED++(p) 0.24 01/06/2010 100,429 19,130 SOCIETE GENERALE BANNON LLC 0.18 01/11/2010 19,130 124,345 SOCIETE GENERALE NORTH AMERICA 0.21 02/01/2010 124,323 143,475 STARBIRD FUNDING CORPORATION++(p) 0.19 01/06/2010 143,471 143,475 SUMITOMO TRUST & BANKING COMPANY 0.22 01/05/2010 143,472 37,782 TASMAN FUNDING INCORPORATED++(p) 0.24 01/05/2010 37,781 115,201 TULIP FUNDING CORPORATION++(p) 0.19 01/07/2010 115,197 31,565 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.25 07/01/2032 31,565 143,475 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 143,475 14,348 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.30 12/15/2040 14,348
Wells Fargo Advantage Variable Trust Funds 81 Portfolio of Investments--December 31, 2009 VT ASSET ALLOCATION FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COLLATERAL INVESTED IN OTHER ASSETS (continued) $ 163,837 VFNCCORPORATION++(a)(i)+/- 0.45% 09/01/2010 $ 828,157 71,738 VICTORY RECEIVABLES CORPORATION++(p) 0.19 01/11/2010 71,734 62,173 VICTORY RECEIVABLES CORPORATION++(p) 0.20 01/13/2010 62,168 143,475 YORKTOWN CAPITAL LLC++(p) 0.19 02/03/2010 143,450 5,885,658 -------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $7,099,589) 7,205,688 --------------
SHARES YIELD ------ -------- SHORT-TERM INVESTMENTS: 5.18% MUTUAL FUNDS: 1.88% 2,134,286 WELLS FARGO ADVANTAGE MONEY MARKET TRUST(u)~+++ 0.10 2,134,286 --------------
INTEREST PRINCIPAL RATE VALUE --------- -------- -------------- US TREASURY BILLS: 3.30% $ 2,130,00 US TREASURY BILL### 0.26 02/04/2010 2,129,514 25,000 US TREASURY BILL### 0.03 02/04/2010 24,999 60,000 US TREASURY BILL### 0.11 05/06/2010 59,979 1,500,00 US TREASURY BILL### 0.15 05/06/2010 1,499,119 20,000 US TREASURY BILL### 0.16 05/06/2010 19,989 3,733,600 -------------- TOTAL SHORT-TERM INVESTMENTS (COST $5,867,886) 5,867,886 -------------- TOTAL INVESTMENTS IN SECURITIES (COST $122,981,754)* 106.04% 120,106,850 OTHER ASSETS AND LIABILITIES, NET (6.04) (6,836,008) ------ -------------- TOTAL NET ASSETS 100.00% $ 113,270,842 ====== ==============
- ---------- + Non-income earning securities. (l) Long-term security of an affiliate of the Fund with a total cost of $1,354,689. << All or a portion of this security is on loan. ++ Securities that may be resold to "qualified institutional buyers"under rule 144A or securities offered pursuant to section 4(2) of the Securities Act of 1933, as amended. (p) Asset-backed commercial paper. (a) Security fair valued in accordance with the procedures approved by the Board of Trustees. (i) Illiquid security (unaudited). +/- Variable rate investments. ss These securities are subject to a demand feature which reduces the effective maturity. (u) Rate shown is the 7-day annualized yield at period end. ~ The Fund invests cash balances that it retains for liquidity purposes in the Wells Fargo Advantage Money Market Trust. The Wells Fargo Advantage Money Market Trust does not pay an investment advisory fee. +++ Short-term security of an affiliate of the Fund with a cost of $2,134,286. ## Zero coupon security. Interest rate presented is yield to maturity. # Security pledged as collateral for futures transactions. * Cost for federal income tax purposes is $125,254,470 and net unrealized appreciation (depreciation) consists of: Gross unrealized appreciation $ 15,619,441 Gross unrealized depreciation (20,767,061) ------------ Net unrealized depreciation $ (5,147,620)
The accompanying notes are an integral part of these financial statements. 82 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT C&B LARGE CAP VALUE FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- COMMON STOCKS: 94.32% APPAREL & ACCESSORY STORES: 2.40% 6,563 KOHL'S CORPORATION+ $ 353,943 -------------- APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS: 1.62% 3,250 VF CORPORATION 238,030 -------------- BASIC MATERIALS: 2.29% 8,184 INTERNATIONAL FLAVORS & FRAGRANCES INCORPORATED 336,690 -------------- BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS: 1.72% 356 NVR INCORPORATED+ 253,013 -------------- BUSINESS SERVICES: 6.09% 4,840 FISERV INCORPORATED+ 234,643 2,810 MANPOWER INCORPORATED 153,370 12,990 OMNICOM GROUP INCORPORATED 508,559 896,572 -------------- COSMETICS, PERSONAL CARE: 4.66% 6,570 AVON PRODUCTS INCORPORATED 206,955 5,830 COLGATE-PALMOLIVE COMPANY 478,935 685,890 -------------- DEPOSITORY INSTITUTIONS: 6.93% 17,456 BANK OF AMERICA CORPORATION 262,887 6,015 JPMORGAN CHASE & COMPANY 250,645 11,660 STATE STREET CORPORATION 507,676 1,021,208 -------------- EATING & DRINKING PLACES: 4.07% 7,610 DARDEN RESTAURANTS INCORPORATED 266,883 5,331 MCDONALD'S CORPORATION 332,868 599,751 -------------- ELECTRIC, GAS & SANITARY SERVICES: 2.01% 10,450 REPUBLIC SERVICES INCORPORATED 295,840 -------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 7.49% 39,750 FLEXTRONICS INTERNATIONAL LIMITED+ 290,573 16,820 GENERAL ELECTRIC COMPANY 254,487 1,580 HUBBELL INCORPORATED CLASS B 74,734 12,120 MOLEX INCORPORATED CLASS A 231,856 10,262 TYCO ELECTRONICS LIMITED 251,932 1,103,582 -------------- FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT: 2.14% 6,560 ILLINOIS TOOL WORKS INCORPORATED 314,814 -------------- FOOD & KINDRED PRODUCTS: 2.39% 5,070 DIAGEO PLC ADR 351,909 -------------- HEALTH SERVICES: 1.75% 7,990 CARDINAL HEALTH INCORPORATED 257,598 -------------- HOLDING & OTHER INVESTMENT OFFICES: 1.58% 71 BERKSHIRE HATHAWAY INCORPORATED CLASS B+ 233,306 --------------
Wells Fargo Advantage Variable Trust Funds 83 Portfolio of Investments--December 31, 2009 VT C&B LARGE CAP VALUE FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- HOUSEHOLD PRODUCTS, WARE: 3.21% 8,030 AVERY DENNISON CORPORATION $ 293,015 4,050 HENKEL KGAA ADR 180,428 473,443 -------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 7.64% 6,830 DIEBOLD INCORPORATED 194,314 8,580 DOVER CORPORATION 357,014 4,610 EATON CORPORATION 293,288 12,320 PITNEY BOWES INCORPORATED 280,403 1,125,019 -------------- INSURANCE CARRIERS: 5.72% 6,630 ALLSTATE CORPORATION 199,165 3,920 AXIS CAPITAL HOLDINGS LIMITED 111,367 4,510 CHUBB CORPORATION 221,802 11,760 WILLIS GROUP HOLDINGS LIMITED 310,229 842,563 -------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 5.89% 1,740 BECTON DICKINSON & COMPANY 137,216 26,870 BOSTON SCIENTIFIC CORPORATION+ 241,830 8,080 QUEST DIAGNOSTICS INCORPORATED 487,870 866,916 -------------- MEDICAL PRODUCTS: 0.88% 2,200 BAXTER INTERNATIONAL INCORPORATED 129,096 -------------- MISCELLANEOUS MANUFACTURING INDUSTRIES: 1.25% 5,140 TYCO INTERNATIONAL LIMITED 183,395 -------------- MOTOR FREIGHT TRANSPORTATION & WAREHOUSING: 1.89% 4,850 UNITED PARCEL SERVICE INCORPORATED CLASS B 278,245 -------------- NON-DEPOSITORY CREDIT INSTITUTIONS: 3.51% 12,740 AMERICAN EXPRESS COMPANY 516,225 -------------- PETROLEUM REFINING & RELATED INDUSTRIES: 4.99% 3,000 CHEVRON CORPORATION 230,970 7,380 EXXON MOBIL CORPORATION 503,242 734,212 -------------- PHARMACEUTICALS: 2.91% 6,660 JOHNSON & JOHNSON 428,971 -------------- SOFTWARE: 2.16% 10,430 MICROSOFT CORPORATION 318,011 -------------- TELECOMMUNICATIONS: 2.67% 17,042 VODAFONE GROUP PLC ADR<< 393,500 -------------- TRAVEL & RECREATION: 2.26% 10,520 CARNIVAL CORPORATION 333,373 -------------- WHOLESALE TRADE-DURABLE GOODS: 2.20% 5,090 KIMBERLY-CLARK CORPORATION 324,284 -------------- TOTAL COMMON STOCKS (COST $14,642,713) 13,889,399 --------------
84 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT C&B LARGE CAP VALUE FUND
DIVIDEND SHARES SECURITY NAME YIELD VALUE ------ ------------- -------- -------------- PREFERRED STOCKS: 2.00% 5,680 HENKEL KGAA ADR (CHEMICALS & ALLIED PRODUCTS) 0.68% $ 294,224 TOTAL PREFERRED STOCKS (COST $257,980) 294,224 -------------- COLLATERAL FOR SECURITIES LENDING: 0.40%
YIELD -------- COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.06% 2,165 AIM STIT-LIQUID ASSETS PORTFOLIO(u) 0.18 2,165 2,165 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(u) 0.12 2,165 2,165 DWS MONEY MARKET SERIES INSTITUTIONAL(u) 0.13 2,165 2,165 JPMORGAN PRIME MONEY MARKET FUND(u) 0.14 2,165 8,660 --------------
INTEREST PRINCIPAL RATE MATURITY DATE --------- -------- ------------- COLLATERAL INVESTED IN OTHER ASSETS: 0.34% $ 281 ANTALIS US FUNDING CORPORATION++(p) 0.22 01/13/2010 281 281 ANTALIS US FUNDING CORPORATION++(p) 0.28 01/07/2010 281 281 ANTALIS US FUNDING CORPORATION++(p) 0.29 01/29/2010 281 843 ATLANTIC ASSET SECURITIZATION CORPORATION++(p) 0.19 01/15/2010 843 745 BANCO SANTANDER SA (MADRID) 0.08 01/04/2010 745 562 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $562) 0.01 01/04/2010 562 745 BANK OF IRELAND 0.05 01/04/2010 745 745 BNP PARIBAS (PARIS) 0.11 01/04/2010 745 112 CALCASIEU PARISH LA+/-ss 0.37 12/01/2027 112 155 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.32 06/01/2028 155 872 CALYON (NEW YORK) 0.18 01/08/2010 872 74 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.28 10/01/2038 74 815 COMMERZBANK AG (GRAND CAYMAN) 0.00 01/04/2010 815 225 COOK COUNTY IL+/-ss 0.40 11/01/2030 225 211 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $211) 0.01 01/04/2010 211 745 DANSKE BANK A/S COPENHAGEN 0.12 01/04/2010 745 506 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.35 12/15/2037 506 787 ENI FINANCE USA INCORPORATED++ 0.19 02/04/2010 787 843 FORTIS BANK NV SA 0.19 01/19/2010 843 197 GDF SUEZ++ 0.19 01/12/2010 197 703 GDF SUEZ++ 0.20 02/03/2010 703 422 GOTHAM FUNDING CORPORATION++(p) 0.18 01/11/2010 422 424 GOTHAM FUNDING CORPORATION++(p) 0.19 01/05/2010 424 843 GOVCO INCORPORATED++(p) 0.19 01/12/2010 843 18,611 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 7,180 394 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 05/01/2023 394 285 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 07/01/2034 285 46 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.27 11/01/2042 46 422 HOUSTON TX UTILITY SYSTEM+/-ss 0.25 05/15/2034 422 141 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.28 07/01/2029 141 56 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.28 01/01/2018 56 82 ING USA FUNDING LLC 0.20 01/04/2010 82 211 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY US TREASURY SECURITIES (MATURITY VALUE $211) 0.01 01/04/2010 211 84 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.28 04/15/2025 84 843 KOCH RESOURCES LLC++ 0.19 01/25/2010 843
Wells Fargo Advantage Variable Trust Funds 85 Portfolio of Investments--December 31, 2009 VT C&B LARGE CAP VALUE FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 703 LIBERTY STREET FUNDING CORPORATION++(p) 0.18% 01/08/2010 $ 703 703 LLOYDS TSB BANK PLC 0.18 01/08/2010 703 281 LMA AMERICAS LLC++(p) 0.19 01/19/2010 281 929 MASSACHUSETTS HEFA+/-ss 0.22 10/01/2034 929 139 MATCHPOINT MASTER TRUST++(p) 0.19 01/05/2010 139 703 MATCHPOINT MASTER TRUST++(p) 0.20 01/27/2010 703 101 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.27 02/01/2036 101 56 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.28 01/01/2018 56 659 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.25 07/01/2034 659 489 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.22 12/01/2040 489 513 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.20 01/12/2010 513 225 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.21 01/11/2010 225 179 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.29 01/01/2034 179 605 REGENCY MARKETS #1 LLC++(p) 0.20 01/07/2010 605 254 REGENCY MARKETS #1 LLC++(p) 0.20 01/20/2010 254 703 SALISBURY RECEIVABLES COMPANY++(p) 0.19 01/19/2010 703 379 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.18 12/01/2028 379 888 SANPAOLO IMI US FINANCIAL COMPANY 0.19 01/19/2010 888 590 SCALDIS CAPITAL LIMITED++(p) 0.24 01/06/2010 590 872 SOCIETE GENERALE BANNON LLC 0.18 01/11/2010 872 843 STARBIRD FUNDING CORPORATION++(p) 0.19 01/06/2010 843 843 SUMITOMO TRUST & BANKING COMPANY 0.22 01/05/2010 843 222 TASMAN FUNDING INCORPORATED++(p) 0.24 01/05/2010 222 647 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++(p) 0.18 01/15/2010 647 675 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 01/07/2010 675 253 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.25 07/01/2032 253 843 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 843 84 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.30 12/15/2040 84 23,601 VFNC CORPORATION+++/-(a)(i) 0.45 09/30/2010 12,036 703 VICTORY RECEIVABLES CORPORATION++(p) 0.19 01/08/2010 703 197 VICTORY RECEIVABLES CORPORATION++(p) 0.20 01/13/2010 197 843 YORKTOWN CAPITAL LLC++(p) 0.19 02/03/2010 847 50,325 -------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $57,188) 58,985 --------------
SHARES YIELD ------ -------- SHORT-TERM INVESTMENTS: 3.36% MUTUAL FUNDS: 3.36% 494,726 WELLS FARGO ADVANTAGE MONEY MARKET TRUST(u)~+++ 0.10 494,726 TOTAL SHORT-TERM INVESTMENTS (COST $494,726) 494,726 -------------- TOTAL INVESTMENTS IN SECURITIES (COST $15,452,607)* 100.08% 14,737,334 OTHER ASSETS AND LIABILITIES, NET (0.08) (11,623) ------ -------------- TOTAL NET ASSETS 100.00% $ 14,725,711 ====== ==============
86 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT C&B LARGE CAP VALUE FUND - ---------- + Non-income earning securities. << All or a portion of this security is on loan. (u) Rate shown is the 7-day annualized yield at period end. ++ Securities that may be resold to "qualified institutional buyers" under rule 144A or securities offered pursuant to section 4(2) of the Securities Act of 1933, as amended. (p) Asset-backed commercial paper. +/- Variable rate investments. ss These securities are subject to a demand feature which reduces the effective maturity. (a) Security fair valued in accordance with the procedures approved by the Board of Trustees. (i) Illiquid security (unaudited). ~ The Fund invests cash balances that it retains for liquidity purposes in the Wells Fargo Advantage Money Market Trust. The Wells Fargo Advantage Money Market Trust does not pay an investment advisory fee. +++ Short-term security of an affiliate of the Fund with a cost of $494,726. * Cost for federal income tax purposes is $15,722,935 and net unrealized appreciation (depreciation) consists of: Gross unrealized appreciation $ 1,263,422 Gross unrealized depreciation (2,249,023) ----------- Net unrealized depreciation $ (985,601)
The accompanying notes are an integral part of these financial statements. Wells Fargo Advantage Variable Trust Funds 87 Portfolio of Investments--December 31, 2009 VT DISCOVERY FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- COMMON STOCKS: 97.43% APPAREL & ACCESSORY STORES: 4.20% 52,500 AMERICAN EAGLE OUTFITTERS INCORPORATED $ 891,450 23,000 J.CREW GROUP INCORPORATED+ 1,029,020 48,500 URBAN OUTFITTERS INCORPORATED+ 1,697,015 3,617,485 -------------- AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS: 2.19% 61,122 ASBURY AUTOMOTIVE GROUP INCORPORATED+ 704,737 77,814 PENSKE AUTO GROUP INCORPORATED 1,181,217 1,885,954 -------------- AUTOMOTIVE REPAIR, SERVICES & PARKING: 2.49% 48,900 DOLLAR THRIFTY AUTOMOTIVE GROUP INCORPORATED+ 1,252,329 21,700 RYDER SYSTEM INCORPORATED 893,389 2,145,718 -------------- BIOPHARMACEUTICALS: 1.41% 24,800 ALEXION PHARMACEUTICALS INCORPORATED+ 1,210,736 -------------- BIOTECHNOLOGY: 1.48% 24,400 LIFE TECHNOLOGIES CORPORATION+ 1,274,412 -------------- BUSINESS SERVICES: 8.38% 23,700 ALLIANCE DATA SYSTEMS CORPORATION+<< 1,530,783 33,800 F5 NETWORKS INCORPORATED+ 1,790,724 39,300 MCAFEE INCORPORATED+ 1,594,401 47,200 RED HAT INCORPORATED+ 1,458,480 51,050 SUCCESSFACTORS INCORPORATED+ 846,409 7,220,797 -------------- COMMUNICATIONS: 10.80% 50,029 ASIAINFO HOLDINGS INCORPORATED+ 1,524,384 22,963 EQUINIX INCORPORATED+ 2,437,522 26,100 GEOEYE INCORPORATED+ 727,668 78,401 NEUTRAL TANDEM INCORPORATION+ 1,783,623 82,900 SBA COMMUNICATIONS CORPORATION CLASS A+<< 2,831,864 9,305,061 -------------- DEPOSITORY INSTITUTIONS: 3.67% 110,100 FIFTH THIRD BANCORP 1,073,475 46,800 HOME BANCSHARES INCORPORATED 1,126,476 173,388 KEYCORP 962,303 3,162,254 -------------- E-COMMERCE/SERVICES: 2.00% 7,900 PRICELINE.COM INCORPORATED+ 1,726,150 -------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 7.74% 165,000 MICRON TECHNOLOGY INCORPORATED+ 1,742,400 49,000 NETLOGIC MICROSYSTEMS INCORPORATED+ 2,266,740 142,800 PMC-SIERRA INCORPORATED+ 1,236,648 39,372 SOLERA HOLDINGS INCORPORATED 1,417,786 6,663,574 --------------
88 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT DISCOVERY FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- ENTERTAINMENT PRODUCTION: 1.11% 31,276 DISCOVERY COMMUNICATIONS INCORPORATED CLASS C+ $ 959,235 -------------- FOOD & KINDRED PRODUCTS: 1.63% 28,950 CENTRAL EUROPEAN DISTRIBUTION CORPORATION+ 822,470 16,400 DIAMOND FOODS INCORPORATED 582,856 1,405,326 -------------- FOOD STORES: 1.44% 18,500 PANERA BREAD COMPANY+ 1,238,945 -------------- GENERAL MERCHANDISE STORES: 1.28% 33,600 BJ'S WHOLESALE CLUB INCORPORATED+ 1,099,056 -------------- HEALTH SERVICES: 6.38% 15,100 DAVITA INCORPORATED+ 886,974 28,883 EMERGENCY MEDICAL SERVICES CORPORATION+ 1,564,014 52,700 LHC GROUP INCORPORATED+ 1,771,247 21,200 MEDNAX INCORPORATED+ 1,274,332 5,496,567 -------------- HEAVY CONSTRUCTION OTHER THAN BUILDING CONSTRUCTION CONTRACTS: 2.26% 32,518 FOSTER WHEELER AG+ 957,330 46,800 ORION MARINE GROUP INCORPORATED+ 985,608 1,942,938 -------------- HOLDING & OTHER INVESTMENT OFFICES: 1.25% 42,150 ASPEN INSURANCE HOLDINGS LIMITED 1,072,718 -------------- HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES: 1.32% 51,783 HHGREGG INCORPORATED+ 1,140,779 -------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 7.96% 91,188 EMULEX CORPORATION+ 993,949 7,900 FLOWSERVE CORPORATION 746,787 20,000 JOY GLOBAL INCORPORATED 1,031,800 32,000 KENNAMETAL INCORPORATED 829,440 127,452 NETEZZA CORPORATION+ 1,236,284 11,700 PARKER HANNIFIN CORPORATION 630,396 76,300 SEAGATE TECHNOLOGY<< 1,387,897 6,856,553 -------------- INSURANCE CARRIERS: 0.75% 17,382 ENDURANCE SPECIALTY HOLDINGS LIMITED 647,132 -------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 2.96% 18,050 EMDEON INCORPORATED+ 275,263 68,947 VEECO INSTRUMENTS INCORPORATED+ 2,278,009 2,553,272 -------------- MEDICAL - WHOLESALE DRUG DISTRIBUTION: 1.23% 40,500 AMERISOURCEBERGEN CORPORATION 1,055,835 -------------- MEDICAL PRODUCTS: 0.78% 21,800 ILLUMINA INCORPORATED+<< 668,170 --------------
Wells Fargo Advantage Variable Trust Funds 89 Portfolio of Investments--December 31, 2009 VT DISCOVERY FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- MISCELLANEOUS RETAIL: 2.64% 45,200 DICK'S SPORTING GOODS INCORPORATED+ $ 1,124,124 52,400 HIBBETT SPORTS INCORPORATED+ 1,152,276 2,276,400 -------------- MOTOR FREIGHT TRANSPORTATION & WAREHOUSING: 1.24% 33,128 J.B. HUNT TRANSPORT SERVICES INCORPORATED 1,069,041 -------------- OIL & GAS EXTRACTION: 7.81% 26,300 ATWOOD OCEANICS INCORPORATED+ 942,855 51,200 CONCHO RESOURCES INCORPORATED+ 2,298,880 41,200 PETROHAWK ENERGY CORPORATION+ 988,388 33,600 PIONEER NATURAL RESOURCES COMPANY 1,618,512 36,569 SWIFT ENERGY COMPANY+ 876,193 6,724,828 -------------- RUBBER & MISCELLANEOUS PLASTICS PRODUCTS: 0.51% 30,900 THE GOODYEAR TIRE & RUBBER COMPANY+ 435,690 -------------- SATELLITE: 1.09% 116,600 IRADIUM COMMUNICATIONS INCORPORATED+ 936,298 -------------- TELECOMMUNICATIONS: 1.16% 59,500 VIRGIN MEDIA INCORPORATED 1,001,385 -------------- TRANSPORTATION BY AIR: 1.94% 57,800 DELTA AIR LINES INCORPORATED+ 657,764 78,200 UAL CORPORATION+ 1,009,562 1,667,326 -------------- TRANSPORTATION EQUIPMENT: 4.92% 30,400 AUTOLIV INCORPORATED 1,318,144 157,207 DANA HOLDING CORPORATION+ 1,704,124 50,750 TRW AUTOMOTIVE HOLDINGS CORPORATION+ 1,211,910 4,234,178 -------------- TRAVEL & RECREATION: 1.41% 47,300 EXPEDIA INCORPORATED+ 1,216,081 -------------- TOTAL COMMON STOCKS (COST $68,523,627) 83,909,894 --------------
YIELD -------- COLLATERAL FOR SECURITIES LENDING: 4.01% COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.66% 142,040 AIM STIT-LIQUID ASSETS PORTFOLIO(u) 0.18% 142,040 142,040 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(u) 0.12 142,040 142,040 DWS MONEY MARKET SERIES INSTITUTIONAL(u) 0.13 142,040 142,059 JPMORGAN PRIME MONEY MARKET FUND(u) 0.14 142,059 568,179 --------------
INTEREST PRINCIPAL RATE MATURITY DATE --------- -------- ------------- COLLATERAL INVESTED IN OTHER ASSETS: 3.35% $ 18,447 ANTALIS US FUNDING CORPORATION++(p) 0.22 01/13/2010 18,445 18,447 ANTALIS US FUNDING CORPORATION++(p) 0.28 01/07/2010 18,446 18,447 ANTALIS US FUNDING CORPORATION++(p) 0.29 01/29/2010 18,443
90 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT DISCOVERY FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 55,340 ATLANTIC ASSET SECURITIZATION CORPORATION++(p) 0.19% 01/15/2010 $ 55,336 48,884 BANCO SANTANDER SA (MADRID) 0.08 01/04/2010 48,884 36,894 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $36,894) 0.01 01/04/2010 36,894 48,884 BANK OF IRELAND 0.05 01/04/2010 48,884 48,884 BNP PARIBAS (PARIS) 0.11 01/04/2010 48,884 7,379 CALCASIEU PARISH LA+/-ss 0.37 12/01/2027 7,379 10,146 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.32 06/01/2028 10,146 57,185 CALYON (NEW YORK) 0.18 01/08/2010 57,185 4,884 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.28 10/01/2038 4,884 53,496 COMMERZBANK AG (GRAND CAYMAN) 0.00 01/04/2010 53,496 14,757 COOK COUNTY IL+/-ss 0.40 11/01/2030 14,757 13,835 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $13,835) 0.01 01/04/2010 13,835 48,884 DANSKE BANK A/S COPENHAGEN 0.12 01/04/2010 48,884 33,204 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.35 12/15/2037 33,204 51,651 ENI FINANCE USA INCORPORATED++ 0.19 02/04/2010 51,642 55,340 FORTIS BANK NV SA 0.19 01/19/2010 55,340 12,913 GDF SUEZ++ 0.19 01/12/2010 12,912 46,117 GDF SUEZ++ 0.20 02/03/2010 46,108 27,670 GOTHAM FUNDING CORPORATION++(p) 0.18 01/11/2010 27,669 27,825 GOTHAM FUNDING CORPORATION++(p) 0.19 01/05/2010 27,825 55,340 GOVCO INCORPORATED++(p) 0.19 01/12/2010 55,337 815,861 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 314,759 25,825 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 05/01/2023 25,825 18,723 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 07/01/2034 18,723 3,044 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.27 11/01/2042 3,044 27,670 HOUSTON TX UTILITY SYSTEM+/-ss 0.25 05/15/2034 27,670 9,223 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.28 07/01/2029 9,223 3,689 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.28 01/01/2018 3,689 5,350 ING USA FUNDING LLC 0.20 01/04/2010 5,349 13,835 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY US TREASURY SECURITIES (MATURITY VALUE $13,835) 0.01 01/04/2010 13,835 5,534 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.28 04/15/2025 5,534 55,340 KOCH RESOURCES LLC++ 0.19 01/25/2010 55,333 46,117 LIBERTY STREET FUNDING CORPORATION++(p) 0.18 01/08/2010 46,115 46,117 LLOYDS TSB BANK PLC 0.18 01/08/2010 46,117 18,447 LMA AMERICAS LLC++(p) 0.19 01/19/2010 18,445 60,967 MASSACHUSETTS HEFA+/-ss 0.22 10/01/2034 60,967 9,131 MATCHPOINT MASTER TRUST++(p) 0.19 01/05/2010 9,131 46,117 MATCHPOINT MASTER TRUST++(p) 0.20 01/27/2010 46,110 6,641 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.27 02/01/2036 6,641 3,689 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.28 01/01/2018 3,689 43,258 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.25 07/01/2034 43,258 32,097 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.22 12/01/2040 32,097 33,665 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.20 01/12/2010 33,663 14,757 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.21 01/11/2010 14,757 11,732 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.29 01/01/2034 11,732 39,679 REGENCY MARKETS #1 LLC++(p) 0.20 01/07/2010 39,678 16,637 REGENCY MARKETS #1 LLC++(p) 0.20 01/20/2010 16,635 46,117 SALISBURY RECEIVABLES COMPANY++(p) 0.19 01/19/2010 46,113 24,894 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.18 12/01/2028 24,894 58,292 SANPAOLO IMI US FINANCIAL COMPANY 0.19 01/19/2010 58,286 38,738 SCALDIS CAPITAL LIMITED++(p) 0.24 01/06/2010 38,737 57,185 SOCIETE GENERALE BANNON LLC 0.18 01/11/2010 57,185
Wells Fargo Advantage Variable Trust Funds 91 Portfolio of Investments--December 31, 2009 VT DISCOVERY FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COLLATERAL INVESTED IN OTHER ASSETS (CONTINUED) $ 55,340 STARBIRD FUNDING CORPORATION++(p) 0.19% 01/06/2010 $ 55,339 55,340 SUMITOMO TRUST & BANKING COMPANY 0.22 01/05/2010 55,339 14,573 TASMAN FUNDING INCORPORATED++(p) 0.24 01/05/2010 14,573 42,428 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++(p) 0.18 01/15/2010 42,425 44,272 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 01/07/2010 44,271 16,602 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.25 07/01/2032 16,602 55,340 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 55,340 5,534 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.30 12/15/2040 5,534 1,034,624 VFNC CORPORATION+++/-(a)(i) 0.45 09/30/2010 527,658 46,117 VICTORY RECEIVABLES CORPORATION++(p) 0.19 01/08/2010 46,115 12,913 VICTORY RECEIVABLES CORPORATION++(p) 0.20 01/13/2010 12,912 55,340 YORKTOWN CAPITAL LLC++(p) 0.19 02/03/2010 55,331 2,883,492 -------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $3,372,882) 3,451,671 --------------
SHARES YIELD ------ -------- SHORT-TERM INVESTMENTS: 2.13% 1,841,012 WELLS FARGO ADVANTAGE MONEY MARKET TRUST(u)~+++ 0.10 1,841,012 TOTAL SHORT-TERM INVESTMENTS (COST $1,841,012) 1,841,012 -------------- TOTAL INVESTMENTS IN SECURITIES (COST $73,737,521)* 103.57% 89,202,577 OTHER ASSETS AND LIABILITIES, NET (3.57) (3,077,998) ------ -------------- TOTAL NET ASSETS 100.00% $ 86,124,579 ====== ==============
- ---------- + Non-income earning securities. << All or a portion of this security is on loan. (u) Rate shown is the 7-day annualized yield at period end. ++ Securities that may be resold to "qualified institutional buyers" under rule 144A or securities offered pursuant to section 4(2) of the Securities Act of 1933, as amended. (p) Asset-backed commercial paper. +/- Variable rate investments. ss These securities are subject to a demand feature which reduces the effective maturity. (a) Security fair valued in accordance with the procedures approved by the Board of Trustees. (i) Illiquid security (unaudited). ~ The Fund invests cash balances that it retains for liquidity purposes in the Wells Fargo Advantage Money Market Trust. The Wells Fargo Advantage Money Market Trust does not pay an investment advisory fee. +++ Short-term security of an affiliate of the Fund with a cost of $1,841,012. * Cost for federal income tax purposes is $74,877,782 and net unrealized appreciation (depreciation) consists of: Gross unrealized appreciation $17,271,039 Gross unrealized depreciation (2,946,244) ----------- Net unrealized appreciation $14,324,795
The accompanying notes are an integral part of these financial statements. 92 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT EQUITY INCOME FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- COMMON STOCKS: 99.10% APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS: 1.03% 7,625 VF CORPORATION $ 558,455 -------------- BIOTECHNOLOGY: 0.48% 4,625 AMGEN INCORPORATED+ 261,636 -------------- BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS: 1.10% 20,775 HOME DEPOT INCORPORATED 601,021 -------------- BUSINESS SERVICES: 1.90% 27,825 ORACLE CORPORATION 682,826 19,550 SYMANTEC CORPORATION+<< 349,750 1,032,576 -------------- CHEMICALS: 3.16% 10,660 AIR PRODUCTS & CHEMICALS INCORPORATED 864,100 25,400 E.I. DU PONT DE NEMOURS & COMPANY 855,218 1,719,318 -------------- COMMUNICATIONS: 5.64% 1,079 AOL INCORPORATED+ 25,119 59,720 AT&T INCORPORATED 1,673,952 2,580 TIME WARNER CABLE INCORPORATED 106,786 38,224 VERIZON COMMUNICATIONS INCORPORATED 1,266,361 3,072,218 -------------- COSMETICS, PERSONAL CARE: 1.32% 2,975 COLGATE-PALMOLIVE COMPANY 244,396 7,790 PROCTER & GAMBLE COMPANY 472,308 716,704 -------------- DEPOSITORY INSTITUTIONS: 13.87% 97,503 BANK OF AMERICA CORPORATION 1,468,395 49,601 BANK OF NEW YORK MELLON CORPORATION 1,387,340 49,390 CITIGROUP INCORPORATED 163,481 59,495 JPMORGAN CHASE & COMPANY 2,479,157 14,625 STATE STREET CORPORATION 636,773 63,025 US BANCORP 1,418,693 7,553,839 -------------- EATING & DRINKING PLACES: 1.23% 10,775 MCDONALD'S CORPORATION 672,791 -------------- ELECTRIC, GAS & SANITARY SERVICES: 5.86% 17,140 DOMINION RESOURCES INCORPORATED 667,089 6,097 FIRSTENERGY CORPORATION 283,206 27,350 FPL GROUP INCORPORATED 1,444,627 3,800 PG&E CORPORATION 169,670 18,810 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED 625,433 3,190,025 -------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 5.37% 24,350 CISCO SYSTEMS INCORPORATED+ 582,939 22,015 EMERSON ELECTRIC COMPANY 937,839
Wells Fargo Advantage Variable Trust Funds 93 Portfolio of Investments--December 31, 2009 VT EQUITY INCOME FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (continued) 74,180 GENERAL ELECTRIC COMPANY $ 1,122,343 21,725 NOKIA OYJ ADR 279,166 2,922,287 -------------- ELECTRONIC COMPUTERS: 3.76% 22,790 HEWLETT-PACKARD COMPANY 1,173,913 6,660 INTERNATIONAL BUSINESS MACHINES CORPORATION 871,794 2,045,707 -------------- FOOD: 0.76% 14,915 SYSCO CORPORATION 416,725 -------------- FOOD & KINDRED PRODUCTS: 2.46% 9,900 MCCORMICK & COMPANY INCORPORATED 357,687 16,140 PEPSICO INCORPORATED 981,312 1,338,999 -------------- GENERAL MERCHANDISE STORES: 2.63% 29,640 TARGET CORPORATION 1,433,687 -------------- HOUSEHOLD PRODUCTS, WARE: 0.79% 9,920 FORTUNE BRANDS INCORPORATED 428,544 -------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 3.02% 11,584 3M COMPANY 957,649 33,565 INTEL CORPORATION 684,726 1,642,375 -------------- INSURANCE CARRIERS: 5.74% 30,125 METLIFE INCORPORATED 1,064,919 13,100 PRUDENTIAL FINANCIAL INCORPORATED 651,856 28,275 THE TRAVELERS COMPANIES INCORPORATED 1,409,792 3,126,567 -------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 0.98% 6,740 BECTON DICKINSON & COMPANY 531,516 -------------- MEDICAL EQUIPMENT & SUPPLIES: 1.27% 15,700 MEDTRONIC INCORPORATED 690,486 -------------- MISCELLANEOUS RETAIL: 2.37% 8,600 COSTCO WHOLESALE CORPORATION 508,862 24,225 CVS CAREMARK CORPORATION 780,287 1,289,149 -------------- MOTION PICTURES: 1.50% 11,774 TIME WARNER INCORPORATED 343,094 14,700 WALT DISNEY COMPANY 474,075 817,169 -------------- NON-DEPOSITORY CREDIT INSTITUTIONS: 2.12% 18,870 AMERICAN EXPRESS COMPANY 764,612 10,150 CAPITAL ONE FINANCIAL CORPORATION 389,151 1,153,763 --------------
94 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT EQUITY INCOME FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- OIL & GAS EXTRACTION: 1.83% 2,000 APACHE CORPORATION $ 206,340 23,075 CHESAPEAKE ENERGY CORPORATION 597,181 2,350 OCCIDENTAL PETROLEUM CORPORATION 191,173 994,694 -------------- OIL & OIL SERVICES: 1.81% 32,675 HALLIBURTON COMPANY 983,191 -------------- PETROLEUM REFINING & RELATED INDUSTRIES: 13.81% 31,100 CHEVRON CORPORATION 2,394,389 35,000 CONOCOPHILLIPS 1,787,450 36,489 EXXON MOBIL CORPORATION 2,488,185 27,175 MARATHON OIL CORPORATION 848,404 7,518,428 -------------- PHARMACEUTICALS: 6.68% 17,900 ABBOTT LABORATORIES 966,421 26,650 BRISTOL-MYERS SQUIBB COMPANY 672,913 10,865 JOHNSON & JOHNSON 699,810 15,363 MERCK & COMPANY INCORPORATED 561,364 40,480 PFIZER INCORPORATED 736,331 3,636,839 -------------- RETAIL: 0.30% 4,100 BEST BUY COMPANY INCORPORATED 161,786 -------------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 1.20% 16,834 AMERIPRISE FINANCIAL INCORPORATED 653,496 -------------- SOFTWARE: 0.84% 15,050 MICROSOFT CORPORATION 458,875 -------------- TRANSPORTATION EQUIPMENT: 4.27% 27,433 HONEYWELL INTERNATIONAL INCORPORATED 1,075,374 18,000 UNITED TECHNOLOGIES CORPORATION 1,249,380 2,324,754 -------------- TOTAL COMMON STOCKS (COST $55,207,991) 53,947,620 --------------
YIELD -------- COLLATERAL FOR SECURITIES LENDING: 0.44% COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.09% 11,678 AIM STIT-LIQUID ASSETS PORTFOLIO(u) 0.18% 11,678 11,678 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(u) 0.12 11,678 11,678 DWS MONEY MARKET SERIES INSTITUTIONAL(u) 0.13 11,678 11,679 JPMORGAN PRIME MONEY MARKET FUND(u) 0.14 11,679 46,713 --------------
INTEREST PRINCIPAL RATE MATURITY DATE --------- -------- ------------- COLLATERAL INVESTED IN OTHER ASSETS: 0.35% $ 1,517 ANTALIS US FUNDING CORPORATION++(p) 0.22 01/13/2010 1,516 1,517 ANTALIS US FUNDING CORPORATION++(p) 0.28 01/07/2010 1,517 1,517 ANTALIS US FUNDING CORPORATION++(p) 0.29 01/29/2010 1,516 4,550 ATLANTIC ASSET SECURITIZATION CORPORATION++(p) 0.19 01/15/2010 4,549 4,019 BANCO SANTANDER SA (MADRID) 0.08 01/04/2010 4,019
Wells Fargo Advantage Variable Trust Funds 95 Portfolio of Investments--December 31, 2009 VT EQUITY INCOME FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COLLATERAL INVESTED IN OTHER ASSETS (continued) $ 3,033 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $3,033) 0.01% 01/04/2010 $ 3,033 4,019 BANK OF IRELAND 0.05 01/04/2010 4,019 4,019 BNP PARIBAS (PARIS) 0.11 01/04/2010 4,019 607 CALCASIEU PARISH LA+/-ss 0.37 12/01/2027 607 834 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.32 06/01/2028 834 4,701 CALYON (NEW YORK) 0.18 01/08/2010 4,701 402 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.28 10/01/2038 402 4,398 COMMERZBANK AG (GRAND CAYMAN) 0.00 01/04/2010 4,398 1,213 COOK COUNTY IL+/-ss 0.40 11/01/2030 1,213 1,137 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $1,137) 0.01 01/04/2010 1,137 4,019 DANSKE BANK A/S COPENHAGEN 0.12 01/04/2010 4,019 2,730 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.35 12/15/2037 2,730 4,246 ENI FINANCE USA INCORPORATED++ 0.19 02/04/2010 4,246 4,550 FORTIS BANK NV SA 0.19 01/19/2010 4,550 1,062 GDF SUEZ++ 0.19 01/12/2010 1,062 3,791 GDF SUEZ++ 0.20 02/03/2010 3,791 2,275 GOTHAM FUNDING CORPORATION++(p) 0.18 01/11/2010 2,275 2,288 GOTHAM FUNDING CORPORATION++(p) 0.19 01/05/2010 2,288 4,550 GOVCO INCORPORATED++(p) 0.19 01/12/2010 4,549 24,256 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 9,358 2,123 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 05/01/2023 2,123 1,539 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 07/01/2034 1,539 250 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.27 11/01/2042 250 2,275 HOUSTON TX UTILITY SYSTEM+/-ss 0.25 05/15/2034 2,275 758 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.28 07/01/2029 758 303 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.28 01/01/2018 303 440 ING USA FUNDING LLC 0.20 01/04/2010 440 1,137 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY US TREASURY SECURITIES (MATURITY VALUE $1,137) 0.01 01/04/2010 1,137 455 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.28 04/15/2025 455 4,550 KOCH RESOURCES LLC++ 0.19 01/25/2010 4,549 3,791 LIBERTY STREET FUNDING CORPORATION++(p) 0.18 01/08/2010 3,791 3,791 LLOYDS TSB BANK PLC 0.18 01/08/2010 3,791 1,517 LMA AMERICAS LLC++(p) 0.19 01/19/2010 1,516 5,012 MASSACHUSETTS HEFA+/-ss 0.22 10/01/2034 5,012 751 MATCHPOINT MASTER TRUST++(p) 0.19 01/05/2010 751 3,791 MATCHPOINT MASTER TRUST++(p) 0.20 01/27/2010 3,791 546 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.27 02/01/2036 546 303 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.28 01/01/2018 303 3,556 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.25 07/01/2034 3,556 2,639 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.22 12/01/2040 2,639 2,768 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.20 01/12/2010 2,768 1,213 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.21 01/11/2010 1,213 965 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.29 01/01/2034 965 3,262 REGENCY MARKETS #1 LLC++(p) 0.20 01/07/2010 3,262 1,368 REGENCY MARKETS #1 LLC++(p) 0.20 01/20/2010 1,368 3,791 SALISBURY RECEIVABLES COMPANY++(p) 0.19 01/19/2010 3,791 2,047 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.18 12/01/2028 2,047 4,792 SANPAOLO IMI US FINANCIAL COMPANY 0.19 01/19/2010 4,792 3,185 SCALDIS CAPITAL LIMITED++(p) 0.24 01/06/2010 3,185 4,701 SOCIETE GENERALE BANNON LLC 0.18 01/11/2010 4,701 4,550 STARBIRD FUNDING CORPORATION++(p) 0.19 01/06/2010 4,550 4,550 SUMITOMO TRUST & BANKING COMPANY 0.22 01/05/2010 4,550 1,198 TASMAN FUNDING INCORPORATED++(p) 0.24 01/05/2010 1,198
96 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT EQUITY INCOME FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COLLATERAL INVESTED IN OTHER ASSETS (continued) $ 3,488 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++(p) 0.18% 01/15/2010 $ 3,488 3,640 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 01/07/2010 3,640 1,365 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.25 07/01/2032 1,365 4,550 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 4,548 455 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.30 12/15/2040 455 30,760 VFNC CORPORATION++(a)(i)+/- 0.45 09/30/2010 15,687 3,791 VICTORY RECEIVABLES CORPORATION++(p) 0.19 01/08/2010 3,791 1,062 VICTORY RECEIVABLES CORPORATION++(p) 0.20 01/13/2010 1,062 4,550 YORKTOWN CAPITAL LLC++(p) 0.19 02/03/2010 4,549 192,848 -------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $237,219) 239,561 --------------
SHARES YIELD ------ SHORT-TERM INVESTMENTS: 0.86% -------- 469,751 WELLS FARGO ADVANTAGE MONEY MARKET TRUST(u)~+++ 0.10 469,751 TOTAL SHORT-TERM INVESTMENTS (COST $469,751) 469,751 -------------- TOTAL INVESTMENTS IN SECURITIES (COST $55,914,961)* 100.40% 54,656,932 OTHER ASSETS AND LIABILITIES, NET (0.40) (215,848) ------ -------------- TOTAL NET ASSETS 100.00% $ 54,441,084 ====== ==============
- ---------- + Non-income earning securities. << All or a portion of this security is on loan. (u) Rate shown is the 7-day annualized yield at period end. ++ Securities that may be resold to "qualified institutional buyers" under rule 144A or securities offered pursuant to section 4(2) of the Securities Act of 1933, as amended. (p) Asset-backed commercial paper. (a) Security fair valued in accordance with the procedures approved by the Board of Trustees. (i) Illiquid security (unaudited). +/- Variable rate investments. ss These securities are subject to a demand feature which reduces the effective maturity. ~ The Fund invests cash balances that it retains for liquidity purposes in the Wells Fargo Advantage Money Market Trust. The Wells Fargo Advantage Money Market Trust does not pay an investment advisory fee. +++ Short-term security of an affiliate of the Fund with a cost of $469,751. * Cost for federal income tax purposes is $56,127,002 and net unrealized appreciation (depreciation) consists of: Gross unrealized appreciation $ 6,804,732 Gross unrealized depreciation (8,274,802) ----------- Net unrealized depreciation $(1,470,070)
The accompanying notes are an integral part of these financial statements. Wells Fargo Advantage Variable Trust Funds 97 Portfolio of Investments--December 31, 2009 VT INTERNATIONAL CORE FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- COMMON STOCKS: 97.40% ARGENTINA: 0.18% 3,570 IRSA INVERSIONES Y REPRESENTACIONES SA ADR (REAL ESTATE) $ 33,915 -------------- AUSTRALIA: 2.86% 19,467 AMP LIMITED (INSURANCE CARRIERS) 117,587 2,850 ASX LIMITED (SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES) 88,854 2,418 COMMONWEALTH BANK OF AUSTRALIA (DEPOSITORY INSTITUTIONS) 118,051 3,809 NEWCREST MINING LIMITED (METAL MINING) 120,649 11,227 SUNCORP-METWAY LIMITED (DEPOSITORY INSTITUTIONS) 86,919 -------------- 532,060 -------------- AUSTRIA: 0.22% 1,800 RHI AG (MISCELLANEOUS MANUFACTURING INDUSTRIES)+ 41,781 -------------- BELGIUM: 0.94% 12,881 AGFA-GEVAERT NV (MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL) 83,033 1,782 INBEV NA (FOOD & KINDRED PRODUCTS) 92,249 175,282 -------------- BRAZIL: 0.46% 3,877 BANCO BRADESCO SA ADR (DEPOSITORY INSTITUTIONS) 84,790 -------------- CANADA: 5.87% 2,121 AGNICO-EAGLE MINES LIMITED (METAL MINING) 114,534 7,235 BROOKFIELD ASSET MANAGEMENT INCORPORATED (HOLDING & OTHER INVESTMENT OFFICES) 160,472 4,320 CANADIAN NATURAL RESOURCES LIMITED (OIL & GAS EXTRACTION) 313,926 3,889 ENCANA CORPORATION (OIL & GAS EXPLORATION) 126,838 2,101 GOLDCORP INCORPORATED (METAL MINING) 83,068 4,608 PACIFIC RUBIALES ENERGY CORPORATION (OIL & GAS EXTRACTION) 68,072 1,137 POTASH CORPORATION OF SASKATCHEWAN (MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS) 123,365 1,481 RESEARCH IN MOTION LIMITED (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT)+ 100,027 1,090,302 -------------- CHINA: 3.06% 93,000 CHINA INFRASTRUCTURE MACHINERY HOLDINGS LIMITED (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 64,086 7,971 SINA CORPORATION (BUSINESS SERVICES)+ 360,130 7,509 VANCEINFO TECHNOLOGIES INCORPORATED (BUSINESS SERVICES)+ 144,248 568,464 -------------- DENMARK: 0.32% 798 CARLSBERG A/S (FOOD & KINDRED PRODUCTS) 58,744 -------------- FINLAND: 0.37% 5,338 NOKIA OYJ (COMMUNICATIONS) 69,020 -------------- FRANCE: 7.26% 1,335 ALSTOM RGPT (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 93,364 5,538 AXA SA (INSURANCE CARRIERS) 130,027 1,376 BNP PARIBAS SA (DEPOSITORY INSTITUTIONS) 109,142 2,250 COMPAGNIE DE SAINT-GOBAIN (BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS) 122,054 2,704 CREDIT AGRICOLE SA (DEPOSITORY INSTITUTIONS) 47,455 2,573 FRANCE TELECOM SA (COMMUNICATIONS) 64,295 1,832 LVMH MOET HENNESSY LOUIS VUITTON SA (CONSUMER SERVICES) 205,418
98 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT INTERNATIONAL CORE FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- FRANCE (continued) 8,445 NATIXIS (DEPOSITORY INSTITUTIONS) $ 42,169 1,277 PINAULT-PRINTEMPTS-REDOUTE SA (GENERAL MERCHANDISE STORES) 153,285 1,945 PUBLICIS GROUPE (BUSINESS SERVICES) 79,084 1,226 SOCIETE GENERALE (DEPOSITORY INSTITUTIONS) 85,182 2,010 TECHNIP SA (PETROLEUM REFINING & RELATED INDUSTRIES) 141,417 1,169 TOTAL SA (OIL & GAS EXTRACTION) 75,085 1,347,977 -------------- GERMANY: 10.44% 4,351 ADIDAS-SALOMON AG (APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS) 235,674 1,510 AIXTRON AG (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 50,747 840 ALLIANZ AG (INSURANCE AGENTS, BROKERS & SERVICE) 104,126 2,616 BASF AG (OIL & GAS EXTRACTION) 161,906 1,644 BAYER AG (CHEMICALS & ALLIED PRODUCTS) 131,559 6,245 DAIMLER AG (TRANSPORTATION EQUIPMENT) 332,631 667 DEUTSCHE BANK AG (BANKING) 47,164 2,525 DEUTSCHE BOERSE AG (BUSINESS SERVICES) 209,094 701 HOCHTIEF AG (BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS) 53,463 14,859 INFINEON TECHNOLOGIES AG (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT)+ 82,666 2,075 KLOECKNER & COMPANY (TRANSPORTATION BY AIR) 52,593 1,627 LANXESS (CHEMICALS & ALLIED PRODUCTS) 61,507 795 METRO AG (FOOD STORES) 48,553 810 MUENCHENER RUECKVERSICHERUNGS-GESELLSCHAFT AG (INSURANCE CARRIERS) 126,165 769 SALZGITTER AG (PRIMARY METAL INDUSTRIES) 75,353 958 SAP AG (BUSINESS SERVICES) 45,671 1,314 SIEMENS AG (MISCELLANEOUS MANUFACTURING INDUSTRIES) 120,587 1,939,459 -------------- GREECE: 1.09% 14,716 HELLENIC EXCHANGES SA HOLDING (SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES) 152,712 1,925 NATIONAL BANK OF GREECE SA (DEPOSITORY INSTITUTIONS) 49,457 202,169 -------------- HONG KONG: 0.80% 25 CHINA MOBILE LIMITED (COMMUNICATIONS) 233 1,965 CHINA MOBILE LIMITED ADR (COMMUNICATIONS) 91,235 3,253 HONG KONG EXCHANGES & CLEARING LIMITED (SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES) 57,879 149,347 -------------- IRELAND: 0.40% 7,501 EXPERIAN GROUP LIMITED (BUSINESS SERVICES) 74,093 -------------- ISRAEL: 0.28% 911 TEVA PHARMACEUTICAL INDUSTRIES LIMITED ADR (BIOPHARMACEUTICALS) 51,180 -------------- JAPAN: 14.73% 3,900 ADVANTEST CORPORATION (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 101,599 6,000 ASAHI GLASS COMPANY LIMITED (STONE, CLAY, GLASS & CONCRETE PRODUCTS) 57,072 1,600 CANON INCORPORATED (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 68,062 14,500 ELPIDA MEMORY INCORPORATED (SEMICONDUCTOR EQUIPMENT MANUFACTURING & RELATED)+ 236,320 145,000 ISUZU MOTORS LIMITED (TRANSPORTATION EQUIPMENT) 272,374 8,500 KOMATSU LIMITED (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 177,940 6,200 MAKITA CORPORATION (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 212,958 8,000 NIPPON ELECTRIC GLASS COMPANY LIMITED (STONE, CLAY, GLASS & CONCRETE PRODUCTS) 110,111 17,300 NOMURA HOLDINGS INCORPORATED (SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES) 128,654
Wells Fargo Advantage Variable Trust Funds 99 Portfolio of Investments--December 31, 2009 VT INTERNATIONAL CORE FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- JAPAN (continued) 520 ORIX CORPORATION (NON-DEPOSITORY CREDIT INSTITUTIONS) $ 35,404 12,000 SOMPO JAPAN INSURANCE INCORPORATED (INSURANCE CARRIERS) 77,369 65,000 SUMITOMO HEAVY INDUSTRIES LIMITED (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 329,072 1,200 TDK CORPORATION (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 73,335 1,700 TOKYO ELECTRON LIMITED (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 109,120 49,000 TOSHIBA CORPORATION (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 271,896 19,000 TOSHIBA MACHINE COMPANY LIMITED (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 72,847 4,400 TOYOTA MOTOR CORPORATION (AUTO-CARS MANUFACTURER) 185,508 1,500 UNI-CHARM CORPORATION (APPAREL & ACCESSORY STORES) 140,619 250 YAHOO! JAPAN CORPORATION (BUSINESS SERVICES) 75,167 2,735,427 -------------- LUXEMBOURG: 0.59% 2,387 ARCELORMITTAL (MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL) 109,101 -------------- MEXICO: 0.75% 1,522 AMERICA MOVIL SAB DE C.V. ADR SERIES L (COMMUNICATIONS) 71,504 1,429 FOMENTO ECONOMICO MEXICANO SA DE CV ADR (FOOD & KINDRED PRODUCTS) 68,421 139,925 -------------- NETHERLANDS: 6.78% 5,842 ASML HOLDING NV (INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT) 199,457 1,980 BRUNEL INTERNATIONAL (BUSINESS SERVICES) 66,623 9,186 NEW WORLD RESOURCES NV CLASS A (ENERGY) 82,731 8,987 RANDSTAD HOLDINGS NV (BUSINESS SERVICES) 447,170 6,743 UNILEVER NV (FOOD & KINDRED PRODUCTS) 219,463 13,479 USG PEOPLE NV (BUSINESS SERVICES)+ 243,803 1,259,247 -------------- NORWAY: 0.39% 5,167 TELENOR ASA (COMMUNICATIONS) 72,181 -------------- POLAND: 0.42% 1,375 BANK PEKAO SA (DEPOSITORY INSTITUTIONS) 77,201 -------------- RUSSIA: 1.67% 3,605 GAZPROM ADR (OIL & GAS EXTRACTION) 91,928 1,503 LUKOIL ADR (OIL & GAS EXTRACTION) 86,122 7,021 MECHEL ADR (PRIMARY METAL INDUSTRIES) 132,135 310,185 -------------- SINGAPORE: 0.35% 6,000 DBS GROUP HOLDINGS LIMITED (DEPOSITORY INSTITUTIONS) 65,226 -------------- SOUTH KOREA: 1.02% 55 LOTTE CONFECTIONERY COMPANY LIMITED (FOOD & KINDRED PRODUCTS) 61,048 187 SAMSUNG ELECTRONICS COMPANY LIMITED (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 128,231 189,279 -------------- SPAIN: 2.06% 5,181 BANCO SANTANDER CENTRAL HISPANO SA (DEPOSITORY INSTITUTIONS) 85,614 17,296 CRITERIA CAIXACORP SA (SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES) 81,923 2,245 INDUSTRIA DE DISENO TEXTIL SA (APPAREL & ACCESSORY STORES) 140,206 2,698 TELEFONICA SA (COMMUNICATIONS) 75,514 383,257 --------------
100 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT INTERNATIONAL CORE FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- SWEDEN: 1.52% 1,319 HENNES & MAURITZ AB CLASS B (APPAREL & ACCESSORY STORES) $ 73,122 14,760 NORDEA BANK AB (DEPOSITORY INSTITUTIONS) 149,548 3,502 SKANSKA AB (HEAVY CONSTRUCTION OTHER THAN BUILDING CONSTRUCTION CONTRACTS) 59,422 282,092 -------------- SWITZERLAND: 10.89% 8,802 ABB LIMITED (ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES) 169,608 2,393 ADECCO SA (BUSINESS SERVICES) 132,010 2,002 COMPAGNIE FINANCIERE RICHEMONT SA (MISCELLANEOUS MANUFACTURING INDUSTRIES) 67,321 4,946 CREDIT SUISSE GROUP (DEPOSITORY INSTITUTIONS) 245,031 6,611 NESTLE SA (FOOD & KINDRED PRODUCTS) 320,856 3,641 NOVARTIS AG (CHEMICALS & ALLIED PRODUCTS) 198,832 1,465 ROCHE HOLDING AG (CHEMICALS & ALLIED PRODUCTS) 250,534 1,230 SWATCH GROUP AG CLASS B (APPAREL & ACCESSORY STORES) 311,338 2,058 TRANSOCEAN LIMITED (OIL & GAS FIELD SERVICES)+ 170,402 715 ZURICH FINANCIAL SERVICES AG (INSURANCE CARRIERS) 156,316 2,022,248 -------------- TAIWAN: 0.65% 7,000 MEDIATEK INCORPORATED (ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT) 121,622 -------------- UNITED KINGDOM: 20.64% 4,868 AMEC PLC (BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS) 62,021 3,937 ANGLO AMERICAN PLC (COAL MINING) 170,502 13,451 ANTOFAGASTA PLC (TRANSPORTATION SERVICES) 213,973 46,222 ASHTEAD GROUP PLC (TRANSPORTATION EQUIPMENT) 60,571 45,400 BARCLAYS PLC (DEPOSITORY INSTITUTIONS) 200,054 5,294 BG GROUP PLC (OIL & GAS EXTRACTION) 95,590 9,238 BHP BILLITON PLC (COAL MINING) 294,508 31,619 BP PLC (OIL & GAS EXTRACTION) 305,319 17,934 BRITISH AIRWAYS PLC (TRANSPORTATION BY AIR) 53,939 9,118 BURBERRY GROUP PLC (APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS) 87,575 5,675 CADBURY PLC (FOOD & KINDRED PRODUCTS) 72,967 12,400 COOKSON GROUP PLC (MISCELLANEOUS MANUFACTURING INDUSTRIES) 83,890 89,106 HAYS PLC (PRINTING, PUBLISHING & ALLIED INDUSTRIES) 149,005 30,761 HSBC HOLDINGS PLC (DEPOSITORY INSTITUTIONS) 350,932 6,891 ICAP PLC (BUSINESS SERVICES) 47,528 5,446 INTERCONTINENTAL HOTELS GROUP PLC (HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES) 78,248 2,269 INTERTEK GROUP PLC (BUSINESS SERVICES) 45,861 14,511 INVENSYS PLC (MISCELLANEOUS MANUFACTURING INDUSTRIES) 69,810 13,759 KINGFISHER PLC (BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS) 50,650 34,612 MAN GROUP PLC (BUSINESS SERVICES) 170,823 1,390 NEXT PLC (APPAREL & ACCESSORY STORES) 46,476 1,368 RECKITT BENCKISER GROUP (CHEMICALS & ALLIED PRODUCTS) 74,050 5,837 RIO TINTO PLC (METAL MINING) 315,180 6,831 ROYAL DUTCH SHELL A (OIL & GAS EXTRACTION) 206,708 10,619 SAVILLS PLC (SOCIAL SERVICES) 54,679 1,908 STANDARD CHARTERED PLC (DEPOSITORY INSTITUTIONS) 48,169 4,142 TRAVIS PERKINS PLC (LUMBER & WOOD PRODUCTS, EXCEPT FURNITURE) 56,725 29,941 VODAFONE GROUP PLC (COMMUNICATIONS) 69,335 9,860 WPP PLC (COMMUNICATIONS) 96,434 11,340 XSTRATA PLC (METAL MINING) 202,261 3,833,783 --------------
Wells Fargo Advantage Variable Trust Funds 101 Portfolio of Investments--December 31, 2009 VT INTERNATIONAL CORE FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- UNITED STATES OF AMERICA: 0.39% 1,933 Netease.com Incorporated ADR (Business Services)+ $ 72,700 -------------- TOTAL COMMON STOCKS (COST $15,719,832) 18,092,057 --------------
DIVIDEND YIELD -------- PREFERRED STOCKS: 1.63% 4,221 FRESENIUS AG (HEALTHCARE)(t) 1.43% 303,009 TOTAL PREFERRED STOCKS (COST $226,308) 303,009 --------------
INTEREST PRINCIPAL RATE MATURITY DATE --------- -------- ------------- CORPORATE DEBT SECURITIES: 0.02% $ 3,344 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 1,290 4,240 VFNC CORPORATION+++/-(a)(i) 0.45 09/30/2010 2,163 3,453 ----- TOTAL CORPORATE DEBT SECURITIES (COST $3,173) 3,453 -----
SHARES YIELD ------ -------- SHORT-TERM INVESTMENTS: 0.61% 113,091 WELLS FARGO ADVANTAGE MONEY MARKET Trust~+++(u) 0.10 113,091 TOTAL SHORT-TERM INVESTMENTS (COST $113,091) 113,091 -------------- TOTAL INVESTMENTS IN SECURITIES (COST $16,062,404)* 99.66% 18,511,610 OTHER ASSETS AND LIABILITIES, NET 0.34 63,081 ------ -------------- TOTAL NET ASSETS 100.00% $ 18,574,691 ====== ==============
- ---------- + Non-income earning securities. ++ Securities that may be resold to "qualified institutional buyers" under rule 144A or securities offered pursuant to section 4(2) of the Securities Act of 1933, as amended. +/- Variable rate investments. (t) Rate shown is the annual yield at period end. (a) Security fair valued in accordance with the procedures approved by the Board of Trustees. (i) Illiquid security (unaudited). ~ The Fund invests cash balances that it retains for liquidity purposes in the Wells Fargo Advantage Money Market Trust. The Wells Fargo Advantage Money Market Trust does not pay an investment advisory fee. +++ Short-term security of an affiliate of the Fund with a cost of $113,091. (u) Rate shown is the 7-day annualized yield at period end. * Cost for federal income tax purposes is $16,378,675 and net unrealized appreciation (depreciation) consists of:
Gross unrealized appreciation $2,672,410 Gross unrealized depreciation (539,475) ---------- Net unrealized appreciation $2,132,935
The accompanying notes are an integral part of these financial statements. 102 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT LARGE COMPANY CORE FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- COMMON STOCKS: 98.99% AUTO PARTS & EQUIPMENT: 2.57% 10,000 JOHNSON CONTROLS INCORPORATED $ 272,400 -------------- BEVERAGES: 1.02% 1,900 THE COCA-COLA COMPANY 108,300 -------------- BIOPHARMACEUTICALS: 1.11% 2,400 GENZYME CORPORATION+ 117,624 -------------- BUSINESS SERVICES: 3.88% 23,600 MONSTER WORLDWIDE INCORPORATED+ 410,640 -------------- COSMETICS, PERSONAL CARE: 0.57% 1,000 PROCTER & GAMBLE COMPANY 60,630 -------------- DEPOSITORY INSTITUTIONS: 12.66% 22,228 BANK OF AMERICA CORPORATION 334,754 10,700 BANK OF NEW YORK MELLON CORPORATION 299,279 8,300 JPMORGAN CHASE & COMPANY 345,861 19,200 WESTERN UNION COMPANY 361,920 1,341,814 -------------- E-COMMERCE/SERVICES: 3.24% 14,600 EBAY INCORPORATED+ 343,684 -------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 10.92% 10,000 ANALOG DEVICES INCORPORATED 315,800 14,700 CISCO SYSTEMS INCORPORATED+ 351,918 11,800 NOVELLUS SYSTEMS INCORPORATED+ 275,412 8,700 TYCO ELECTRONICS LIMITED 213,585 1,156,715 -------------- GENERAL MERCHANDISE STORES: 2.37% 4,700 WAL-MART STORES INCORPORATED 251,215 -------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 4.12% 1,000 DEERE & COMPANY 54,090 26,600 DELL INCORPORATED+ 381,976 436,066 -------------- INFORMATION & BUSINESS SERVICES: 1.41% 8,900 Yahoo! Incorporated+ 149,342 -------------- MEDICAL EQUIPMENT & SUPPLIES: 1.66% 3,000 MEDTRONIC INCORPORATED 131,940 1,200 ST. JUDE MEDICAL INCORPORATED+ 44,136 176,076 -------------- MEDICAL PRODUCTS: 1.06% 1,900 ZIMMER HOLDINGS INCORPORATED+ 112,309 -------------- MISCELLANEOUS MANUFACTURING INDUSTRIES: 3.27% 9,700 TYCO INTERNATIONAL LIMITED 346,096 --------------
Wells Fargo Advantage Variable Trust Funds 103 Portfolio of Investments--December 31, 2009 VT LARGE COMPANY CORE FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- MISCELLANEOUS RETAIL: 6.50% 14,400 STAPLES INCORPORATED $ 354,096 9,100 WALGREEN COMPANY 334,152 688,248 -------------- MISCELLANEOUS SERVICES: 0.96% 1,200 DUN & BRADSTREET CORPORATION 101,244 -------------- MOTION PICTURES: 2.89% 9,500 WALT DISNEY COMPANY<< 306,375 -------------- NON-DEPOSITORY CREDIT INSTITUTIONS: 2.49% 6,500 AMERICAN EXPRESS COMPANY 263,380 -------------- OIL & GAS EXTRACTION: 4.02% 5,800 DEVON ENERGY CORPORATION 426,300 -------------- PETROLEUM REFINING & RELATED INDUSTRIES: 9.06% 4,000 CHEVRON CORPORATION 307,960 7,400 CONOCOPHILLIPS 377,918 16,400 VALERO ENERGY CORPORATION 274,700 960,578 -------------- PHARMACEUTICALS: 2.76% 11,600 BRISTOL-MYERS SQUIBB COMPANY 292,900 -------------- PRIMARY METAL INDUSTRIES: 3.50% 23,000 ALCOA INCORPORATED 370,760 -------------- PRINTING, PUBLISHING & ALLIED INDUSTRIES: 3.67% 11,600 MCGRAW-HILL COMPANIES INCORPORATED 388,716 -------------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 3.10% 11,100 MORGAN STANLEY 328,560 -------------- SOFTWARE: 3.17% 11,000 MICROSOFT CORPORATION 335,390 -------------- SURGICAL & MEDICAL INSTRUMENTS & APPARATUS: 2.21% 4,900 COVIDIEN PLC 234,661 -------------- TELECOMMUNICATIONS EQUIPMENT: 2.11% 11,600 CORNING INCORPORATED 223,996 -------------- TRAVEL & RECREATION: 2.69% 9,000 CARNIVAL CORPORATION 285,210 -------------- TOTAL COMMON STOCKS (COST $11,814,702) 10,489,229 -------------- COLLATERAL FOR SECURITIES LENDING: 1.51%
YIELD -------- COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.27% 7,083 AIM STIT-LIQUID ASSETS PORTFOLIO(u) 0.18% 7,083 7,083 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(u) 0.12 7,083 7,083 DWS MONEY MARKET SERIES INSTITUTIONAL(u) 0.13 7,083 7,084 JPMORGAN PRIME MONEY MARKET FUND(u) 0.14 7,084 28,333 --------------
104 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT LARGE COMPANY CORE FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COLLATERAL INVESTED IN OTHER ASSETS: 1.24% $ 920 ANTALIS US FUNDING CORPORATION++(p) 0.22% 01/13/2010 $ 920 920 ANTALIS US FUNDING CORPORATION++(p) 0.28 01/07/2010 920 920 ANTALIS US FUNDING CORPORATION++(p) 0.29 01/29/2010 920 2,760 ATLANTIC ASSET SECURITIZATION CORPORATION++(p) 0.19 01/15/2010 2,759 2,438 BANCO SANTANDER SA (MADRID) 0.08 01/04/2010 2,438 1,840 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $1,840) 0.01 01/04/2010 1,840 2,438 BANK OF IRELAND 0.05 01/04/2010 2,438 2,438 BNP PARIBAS (PARIS) 0.11 01/04/2010 2,438 368 CALCASIEU PARISH LA+/-ss 0.37 12/01/2027 368 506 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.32 06/01/2028 506 2,852 CALYON (NEW YORK) 0.18 01/08/2010 2,852 244 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.28 10/01/2038 244 2,668 COMMERZBANK AG (GRAND CAYMAN) 0.00 01/04/2010 2,668 736 COOK COUNTY IL+/-ss 0.40 11/01/2030 736 690 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $690) 0.01 01/04/2010 690 2,438 DANSKE BANK A/S COPENHAGEN 0.12 01/04/2010 2,438 1,656 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.35 12/15/2037 1,656 2,576 ENI FINANCE USA INCORPORATED++ 0.19 02/04/2010 2,575 2,760 FORTIS BANK NV SA 0.19 01/19/2010 2,760 644 GDF SUEZ++ 0.19 01/12/2010 644 2,300 GDF SUEZ++ 0.20 02/03/2010 2,299 1,380 GOTHAM FUNDING CORPORATION++(p) 0.18 01/11/2010 1,380 1,388 GOTHAM FUNDING CORPORATION++(p) 0.19 01/05/2010 1,387 2,760 GOVCO INCORPORATED++(p) 0.19 01/12/2010 2,759 29,192 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 11,262 1,288 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 05/01/2023 1,288 934 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 07/01/2034 934 152 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.27 11/01/2042 152 1,380 HOUSTON TX UTILITY SYSTEM+/-ss 0.25 05/15/2034 1,380 460 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.28 07/01/2029 460 184 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.28 01/01/2018 184 267 ING USA FUNDING LLC 0.20 01/04/2010 267 690 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY US TREASURY SECURITIES (SECURITY VALUE $690) 0.01 01/04/2010 690 276 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.28 04/15/2025 276 2,760 KOCH RESOURCES LLC++ 0.19 01/25/2010 2,759 2,300 LIBERTY STREET FUNDING CORPORATION++(p) 0.18 01/08/2010 2,300 2,300 LLOYDS TSB BANK PLC 0.18 01/08/2010 2,300 920 LMA AMERICAS LLC++(p) 0.19 01/19/2010 920 3,040 MASSACHUSETTS HEFA+/-ss 0.22 10/01/2034 3,040 455 MATCHPOINT MASTER TRUST++(p) 0.19 01/05/2010 455 2,300 MATCHPOINT MASTER TRUST++(p) 0.20 01/27/2010 2,299 331 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.27 02/01/2036 331 184 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.28 01/01/2018 184 2,157 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.25 07/01/2034 2,157 1,601 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.22 12/01/2040 1,601 1,679 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.20 01/12/2010 1,679 736 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.21 01/11/2010 736 585 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.29 01/01/2034 585 1,979 REGENCY MARKETS #1 LLC++(p) 0.20 01/07/2010 1,979 830 REGENCY MARKETS #1 LLC++(p) 0.20 01/20/2010 830 2,300 SALISBURY RECEIVABLES COMPANY++(p) 0.19 01/19/2010 2,299 1,241 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.18 12/01/2028 1,241
Wells Fargo Advantage Variable Trust Funds 105 Portfolio of Investments--December 31, 2009 VT LARGE COMPANY CORE FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COLLATERAL INVESTED IN OTHER ASSETS (continued) $ 2,907 SANPAOLO IMI US FINANCIAL COMPANY 0.19% 01/19/2010 $ 2,906 1,932 SCALDIS CAPITAL LIMITED++(p) 0.24 01/06/2010 1,932 2,852 SOCIETE GENERALE BANNON LLC 0.18 01/11/2010 2,852 2,760 STARBIRD FUNDING CORPORATION++(p) 0.19 01/06/2010 2,759 2,760 SUMITOMO TRUST & BANKING COMPANY 0.22 01/05/2010 2,759 727 TASMAN FUNDING INCORPORATED++(p) 0.24 01/05/2010 727 2,116 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++(p) 0.18 01/15/2010 2,116 2,208 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 01/07/2010 2,208 828 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.25 07/01/2032 828 2,760 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 2,760 276 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-SS 0.30 12/15/2040 276 37,019 VFNC CORPORATION+++/-(a)(i) 0.45 09/30/2010 18,880 2,300 VICTORY RECEIVABLES CORPORATION++(p) 0.19 01/08/2010 2,300 644 VICTORY RECEIVABLES CORPORATION++(p) 0.20 01/13/2010 644 2,760 YORKTOWN CAPITAL LLC++(p) 0.19 02/03/2010 2,750 131,920 -------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $157,434) 160,253 --------------
SHARES YIELD ------ -------- SHORT-TERM INVESTMENTS: 0.68% 72,484 WELLS FARGO ADVANTAGE MONEY MARKET TRUST(u)~+++ 0.10 72,484 TOTAL SHORT-TERM INVESTMENTS (COST $72,484) 72,484 -------------- TOTAL INVESTMENTS IN SECURITIES (COST $12,044,620)* 101.18% 10,721,966 OTHER ASSETS AND LIABILITIES, NET (1.18) (125,396) ------ -------------- TOTAL NET ASSETS 100.00% $ 10,596,570 ====== ==============
- ---------- + Non-income earning securities. << All or a portion of this security is on loan. (u) Rate shown is the 7-day annualized yield at period end. ++ Securities that may be resold to "qualified institutional buyers" under rule 144A or securities offered pursuant to section 4(2) of the Securities Act of 1933, as amended. (p) Asset-backed commercial paper. +/- Variable rate investments. ss These securities are subject to a demand feature which reduces the effective maturity. (a) Security fair valued in accordance with the procedures approved by the Board of Trustees. (i) Illiquid security (unaudited). ~ The Fund invests cash balances that it retains for liquidity purposes in the Wells Fargo Advantage Money Market Trust. The Wells Fargo Advantage Money Market Trust does not pay an investment advisory fee. +++ Short-term security of an affiliate of the Fund with a cost of $72,484. * Cost for federal income tax purposes is $12,092,557 and net unrealized appreciation (depreciation) consists of: Gross unrealized appreciation $ 1,069,563 Gross unrealized depreciation (2,440,154) ----------- Net unrealized depreciation $(1,370,591)
The accompanying notes are an integral part of these financial statements. 106 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT LARGE COMPANY GROWTH FUND
SHARES SECURITY NAME VALUE - ---------------- ------------- -------------- COMMON STOCKS: 98.77% APPAREL & ACCESSORY STORES: 1.46% 18,800 KOHL'S CORPORATION+ $ 1,013,884 -------------- BIOPHARMACEUTICALS: 2.38% 33,700 GENZYME CORPORATION+ 1,651,637 -------------- BIOTECHNOLOGY: 0.95% 11,700 AMGEN INCORPORATED+ 661,869 -------------- BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS: 4.73% 34,900 FASTENAL COMPANY<< 1,453,236 78,300 LOWE'S COMPANIES INCORPORATED 1,831,437 3,284,673 -------------- BUSINESS SERVICES: 4.79% 22,200 AUTOMATIC DATA PROCESSING INCORPORATED 950,604 13,800 FACTSET RESEARCH SYSTEMS INCORPORATED 909,006 16,800 VISA INCORPORATED CLASS A SHARES 1,469,328 3,328,938 -------------- COMMERCIAL SERVICES: 3.44% 77,950 PAYCHEX INCORPORATED 2,388,388 -------------- COMPUTERS - MEMORY DEVICES: 2.46% 97,800 EMC CORPORATION+ 1,708,566 -------------- DEPOSITORY INSTITUTIONS: 1.00% 36,900 WESTERN UNION COMPANY 695,565 -------------- E-COMMERCE/SERVICES: 6.16% 24,300 AMAZON.COM INCORPORATED+ 3,268,836 43,100 EBAY INCORPORATED+ 1,014,574 4,283,410 -------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 7.34% 160,600 CISCO SYSTEMS INCORPORATED+ 3,844,764 41,200 LINEAR TECHNOLOGY CORPORATION 1,258,248 5,103,012 -------------- GENERAL MERCHANDISE STORES: 6.90% 59,100 TARGET CORPORATION 2,858,667 36,300 WAL-MART STORES INCORPORATED 1,940,235 4,798,902 -------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 10.17% 21,000 APPLE INCORPORATED+ 4,428,060 129,500 INTEL CORPORATION 2,641,800 7,069,860 -------------- INFORMATION & BUSINESS SERVICES: 6.87% 7,700 GOOGLE INCORPORATED CLASS A+ 4,773,846 -------------- MEDICAL EQUIPMENT & SUPPLIES: 3.77% 59,575 MEDTRONIC INCORPORATED 2,620,109 --------------
Wells Fargo Advantage Variable Trust Funds 107 Portfolio of Investments--December 31, 2009 VT LARGE COMPANY GROWTH FUND
SHARES SECURITY NAME VALUE - ---------------- ------------- -------------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 20.73% 176,850 CHARLES SCHWAB CORPORATION $ 3,328,317 3,800 CME GROUP INCORPORATED 1,276,610 22,100 FRANKLIN RESOURCES INCORPORATED 2,328,235 32,025 GOLDMAN SACHS GROUP INCORPORATED 5,407,101 38,800 T. ROWE PRICE GROUP INCORPORATED 2,066,100 14,406,363 -------------- SOFTWARE: 6.09% 138,870 MICROSOFT CORPORATION 4,234,146 -------------- TELECOMMUNICATIONS: 4.93% 74,050 QUALCOMM INCORPORATED 3,425,553 -------------- TRANSPORTATION SERVICES: 4.60% 29,000 C.H. ROBINSON WORLDWIDE INCORPORATED 1,703,170 43,100 EXPEDITORS INTERNATIONAL OF WASHINGTON INCORPORATED 1,496,863 3,200,033 -------------- TOTAL COMMON STOCKS (COST $59,792,172) 68,648,754 --------------
YIELD -------- COLLATERAL FOR SECURITIES LENDING: 2.10% COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.38% 65,590 AIM STIT-LIQUID ASSETS PORTFOLIO(u) 0.18% 65,590 65,590 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(u) 0.12 65,590 65,590 DWS MONEY MARKET SERIES INSTITUTIONAL(u) 0.13 65,590 65,599 JPMORGAN PRIME MONEY MARKET FUND(u) 0.14 65,599 262,369 --------------
INTEREST PRINCIPAL RATE MATURITY DATE - ---------------- -------- ------------- COLLATERAL INVESTED IN OTHER ASSETS: 1.72% $ 8,518 ANTALIS US FUNDING CORPORATION++(p) 0.22 01/13/2010 8,518 8,518 ANTALIS US FUNDING CORPORATION++(p) 0.28 01/07/2010 8,518 8,518 ANTALIS US FUNDING CORPORATION++(p) 0.29 01/29/2010 8,516 25,555 ATLANTIC ASSET SECURITIZATION CORPORATION++(p) 0.19 01/15/2010 25,553 22,573B ANCO SANTANDER SA (MADRID) 0.08 01/04/2010 22,573 17,036 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $17,036) 0.01 01/04/2010 17,036 22,573 BANK OF IRELAND 0.05 01/04/2010 22,573 22,573 BNP PARIBAS (PARIS) 0.11 01/04/2010 22,573 3,407 CALCASIEU PARISH LA+/-ss 0.37 12/01/2027 3,407 4,685 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.32 06/01/2028 4,685 26,407 CALYON (NEW YORK) 0.18 01/08/2010 26,407 2,255 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.28 10/01/2038 2,255 24,703 COMMERZBANK AG (GRAND CAYMAN) 0.00 01/04/2010 24,703 6,815 COOK COUNTY IL+/-ss 0.40 11/01/2030 6,815 6,389 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $6,389) 0.01 01/04/2010 6,389 22,573 DANSKE BANK A/S COPENHAGEN 0.12 01/04/2010 22,573 15,333 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.35 12/15/2037 15,333 23,851 ENI FINANCE USA INCORPORATED++ 0.19 02/04/2010 23,847 25,555 FORTIS BANK NV SA 0.19 01/19/2010 25,555 5,963 GDF SUEZ++ 0.19 01/12/2010 5,962 21,296 GDF SUEZ++ 0.20 02/03/2010 21,292
108 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT LARGE COMPANY GROWTH FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE - ---------------- ------------- -------- ------------- -------------- COLLATERAL INVESTED IN OTHER ASSETS (continued) $ 12,777 GOTHAM FUNDING CORPORATION++(p) 0.18% 01/11/2010 $ 12,777 12,849 GOTHAM FUNDING CORPORATION++(p) 0.19 01/05/2010 12,849 25,555 GOVCO INCORPORATED++(p) 0.19 01/12/2010 25,553 245,443 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 94,692 11,926 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 05/01/2023 11,926 8,646 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 07/01/2034 8,646 1,406 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.27 11/01/2042 1,406 12,777 HOUSTON TX UTILITY SYSTEM+/-ss 0.25 05/15/2034 12,777 4,259 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.28 07/01/2029 4,259 1,704 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.28 01/01/2018 1,704 2,470 ING USA FUNDING LLC 0.20 01/04/2010 2,470 6,389 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY US TREASURY SECURITIES (MATURITY VALUE $6,389) 0.01 01/04/2010 6,389 2,555 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.28 04/15/2025 2,555 25,555 KOCH RESOURCES LLC++ 0.19 01/25/2010 25,551 21,296 LIBERTY STREET FUNDING CORPORATION++(p) 0.18 01/08/2010 21,295 21,296 LLOYDS TSB BANK PLC 0.18 01/08/2010 21,296 8,518 LMA AMERICAS LLC++(p) 0.19 01/19/2010 8,517 28,153 MASSACHUSETTS HEFA+/-ss 0.22 10/01/2034 28,153 4,217 MATCHPOINT MASTER TRUST++(p) 0.19 01/05/2010 4,216 21,296 MATCHPOINT MASTER TRUST++(p) 0.20 01/27/2010 21,293 3,067 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.27 02/01/2036 3,067 1,704 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.28 01/01/2018 1,704 19,975 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.25 07/01/2034 19,975 14,822 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.22 12/01/2040 14,822 15,546 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.20 01/12/2010 15,545 6,815 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.21 01/11/2010 6,814 5,418 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.29 01/01/2034 5,418 18,323 REGENCY MARKETS #1 LLC++(p) 0.20 01/07/2010 18,322 7,683 REGENCY MARKETS #1 LLC++(p) 0.20 01/20/2010 7,682 21,296 SALISBURY RECEIVABLES COMPANY++(p) 0.19 01/19/2010 21,294 11,495 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.18 12/01/2028 11,495 26,918 SANPAOLO IMI US FINANCIAL COMPANY 0.19 01/19/2010 26,915 17,888 SCALDIS CAPITAL LIMITED++(p) 0.24 01/06/2010 17,888 26,407 SOCIETE GENERALE BANNON LLC 0.18 01/11/2010 26,407 25,555 STARBIRD FUNDING CORPORATION++(p) 0.19 01/06/2010 25,554 25,555 SUMITOMO TRUST & BANKING COMPANY 0.22 01/05/2010 25,554 6,729 TASMAN FUNDING INCORPORATED++(p) 0.24 01/05/2010 6,729 19,592 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++(p) 0.18 01/15/2010 19,591 20,444 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 01/07/2010 20,443 7,666 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.25 07/01/2032 7,666 25,555 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 25,555 2,555 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.30 12/15/2040 2,555 311,256 VFNC CORPORATION+++/-(a)(i) 0.45 09/30/2010 158,740 21,296 VICTORY RECEIVABLES CORPORATION++(p) 0.19 01/08/2010 21,295 5,963 VICTORY RECEIVABLES CORPORATION++(p) 0.20 01/13/2010 5,962 25,555 YORKTOWN CAPITAL LLC++(p) 0.19 02/03/2010 25,550 1,195,949 -------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $1,434,615) 1,458,318 --------------
Wells Fargo Advantage Variable Trust Funds 109 Portfolio of Investments--December 31, 2009 VT LARGE COMPANY GROWTH FUND
SHARES SECURITY NAME YIELD VALUE ------ ------------- -------- -------------- SHORT-TERM INVESTMENTS: 1.15% 801,778 WELLS FARGO ADVANTAGE MONEY MARKET TRUST(u)~+++ 0.10% $ 801,778 TOTAL SHORT-TERM INVESTMENTS (COST $801,778) 801,778 -------------- TOTAL INVESTMENTS IN SECURITIES (COST $62,028,565)* 102.02% 70,908,850 Other Assets and Liabilities, Net (2.02) (1,402,644) ------ -------------- TOTAL NET ASSETS 100.00% $ 69,506,206 ------ --------------
- ---------- + Non-income earning securities. << All or a portion of this security is on loan. (u) Rate shown is the 7-day annualized yield at period end. ++ Securities that may be resold to "qualified institutional buyers"under rule 144A or securities offered pursuant to section 4(2) of the Securities Act of 1933, as amended. (p) Asset-backed commercial paper. +/- Variable rate investments. ss These securities are subject to a demand feature which reduces the effective maturity. (a) Security fair valued in accordance with the procedures approved by the Board of Trustees. (i) Illiquid security (unaudited). ~ The Fund invests cash balances that it retains for liquidity purposes in the Wells Fargo Advantage Money Market Trust. The Wells Fargo Advantage Money Market Trust does not pay an investment advisory fee. +++ Short-term security of an affiliate of the Fund with a cost of $801,778. * Cost for federal income tax purposes is $63,464,279 and net unrealized appreciation (depreciation) consists of: Gross unrealized appreciation $11,499,501 Gross unrealized depreciation (4,054,930) ----------- Net unrealized appreciation $ 7,444,571
The accompanying notes are an integral part of these financial statements. 110 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT MONEY MARKET FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- CERTIFICATES OF DEPOSIT: 5.92% $ 500,000 BANCO BILBAO VIZCAYA ARGENTARIA (NEW YORK) 0.32% 01/21/2010 $ 500,004 300,000 BARCLAYS BANK PLC (NEW YORK)+/- 0.23 04/07/2010 300,000 500,000 CALYON (NEW YORK) 0.66 02/01/2010 500,000 500,000 CREDIT AGRICOLE SA 0.20 02/02/2010 500,000 500,000 DEXIA CREDIT LOCAL SA (NEW YORK) 0.32 01/26/2010 500,004 300,000 ROYAL BANK OF SCOTLAND PLC (NEW YORK) 0.47 01/19/2010 300,000 TOTAL CERTIFICATES OF DEPOSIT (COST $2,600,008) 2,600,008 -------------- COMMERCIAL PAPER: 67.58% 300,000 AMSTERDAM FUNDING CORPORATION++(p) 0.30 02/10/2010 299,903 250,000 AMSTERDAM FUNDING CORPORATION++(p) 0.30 02/12/2010 249,919 250,000 ANTALIS US FUNDING CORPORATION++(p) 0.23 01/08/2010 249,994 500,000 ANTALIS US FUNDING CORPORATION++(p) 0.20 01/25/2010 499,942 500,000 ANZ NATIONAL (INTERNATIONAL) LIMITED++ 0.25 02/08/2010 499,878 250,000 ATLANTIC ASSET SECURITIZATION CORPORATION++(p) 0.35 01/05/2010 249,998 300,000 ATLANTIS ONE FUNDING++(p) 0.29 01/20/2010 299,961 250,000 ATLANTIS ONE FUNDING++(p) 0.23 03/08/2010 249,899 250,000 ATLANTIS ONE FUNDING++(p) 0.23 03/11/2010 249,895 300,000 BANCO BILBAO VIZCAYA (LONDON)++ 0.24 01/19/2010 299,970 32,000 BANK OF AMERICA NA 0.65 02/16/2010 31,975 250,000 BARCLAYS US FUNDING LLC 0.64 03/01/2010 249,751 250,000 BARTON CAPITAL LLC++(p) 0.27 01/14/2010 249,981 500,000 BARTON CAPITAL LLC++(p) 0.25 01/19/2010 499,948 250,000 BASF SE CORPORATION++ 0.55 01/14/2010 249,962 250,000 CANCARA ASSET SECURITIZATION LLC++(p) 0.26 03/10/2010 249,883 250,000 CANCARA ASSET SECURITIZATION LLC++(p) 0.27 02/10/2010 249,931 250,000 CHARTA LLC++(p) 0.25 02/08/2010 249,939 500,000 CHARTA LLC++(p) 0.22 03/17/2010 499,780 500,000 CIESCO LLC++(p) 0.26 01/06/2010 499,993 300,000 CIESCO LLC++(p) 0.25 01/12/2010 299,983 300,000 CITIBANK CREDIT CARD ISSUANCE TRUST++(p) 0.28 01/05/2010 299,998 300,000 CITIBANK CREDIT CARD ISSUANCE TRUST++(p) 0.30 01/05/2010 299,998 250,000 CITIBANK CREDIT CARD ISSUANCE TRUST++(p) 0.25 03/02/2010 249,901 500,000 CLIPPER RECEIVABLES COMPANY LLC++(p) 0.24 03/25/2010 499,733 250,000 CONCORD MINUTEMEN CAPITAL COMPANY++(p) 0.55 01/13/2010 249,966 250,000 CONCORD MINUTEMEN CAPITAL COMPANY++(p) 0.55 02/02/2010 249,889 350,000 CONCORD MINUTEMEN CAPITAL COMPANY++(p) 0.50 03/03/2010 349,718 600,000 CROWN POINT CAPITAL COMPANY++(p) 0.55 01/08/2010 599,963 250,000 CROWN POINT CAPITAL COMPANY++(p) 0.55 01/13/2010 249,966 250,000 DANSKE CORPORATION++ 0.53 01/15/2010 249,960 750,000 DNB NOR BANK ASA++ 0.30 01/25/2010 749,869 300,000 E.ON AG++ 0.25 01/11/2010 299,985 300,000 EKSPORTFINANS ASA++ 0.30 01/07/2010 299,993 350,000 ENTERPRISE FUNDING LLC++(p) 0.25 02/09/2010 349,913 500,000 ENTERPRISE FUNDING LLC++(p) 0.22 03/25/2010 499,756 250,000 ERASMUS CAPITAL CORPORATION++(p) 0.26 02/02/2010 249,948 250,000 FAIRWAY FINANCE CORPORATION++(p) 0.28 01/06/2010 249,996 250,000 FALCON ASSET SECURITY COMPANY LLC++(p) 0.17 02/01/2010 249,967 250,000 GDF SUEZ++ 0.20 02/09/2010 249,950 350,000 GOVCO LLC++(p) 0.23 03/01/2010 349,875 250,000 GOVCO LLC++(p) 0.22 03/04/2010 249,910 250,000 GRAMPIAN FUNDING LLC++(p) 0.35 01/22/2010 249,956 250,000 GRAMPIAN FUNDING LLC++(p) 0.32 02/17/2010 249,902 250,000 GRAMPIAN FUNDING LLC++(p) 0.31 02/22/2010 249,895 500,000 GROUPE BPCE++ 0.25 02/05/2010 499,889
Wells Fargo Advantage Variable Trust Funds 111 Portfolio of Investments--December 31, 2009 VT MONEY MARKET FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COMMERCIAL PAPER (continued) $ 250,000 GROUPE BPCE++ 0.28% 03/01/2010 $ 249,891 500,000 ING USA FUNDING LLC 0.32 01/29/2010 499,889 250,000 ING USA FUNDING LLC 0.30 01/22/2010 249,963 400,000 KITTY HAWK FUNDING CORPORATION++(p) 0.25 02/09/2010 399,900 300,000 KITTY HAWK FUNDING CORPORATION++(p) 0.25 03/19/2010 299,846 400,000 LEXINGTON PARKER CAPITAL++(p) 0.55 01/14/2010 399,939 250,000 LEXINGTON PARKER CAPITAL++(p) 0.55 01/15/2010 249,958 250,000 LOUIS DREYFUS CORPORATION 0.30 01/15/2010 249,977 250,000 LOUIS DREYFUS CORPORATION 0.40 02/04/2010 249,914 750,000 MATCHPOINT MASTER TRUST++(p) 0.20 01/27/2010 749,904 250,000 METLIFE SHORT TERM FUND++ 0.30 01/25/2010 249,956 500,000 METLIFE SHORT TERM FUND++ 0.30 02/08/2010 499,854 300,000 MONT BLANC CAPITAL CORPORATION++(p) 0.25 01/04/2010 300,000 250,000 MONT BLANC CAPITAL CORPORATION++(p) 0.22 03/09/2010 249,902 400,000 NATIONAL BANK CANADA (NEW YORK) 0.30 01/21/2010 399,943 250,000 NATIONAL BANK CANADA (NEW YORK) 0.30 01/25/2010 249,956 600,000 NATIONWIDE BUILDING SOCIETY++ 0.29 01/14/2010 599,952 500,000 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.26 01/14/2010 499,964 250,000 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.25 02/11/2010 249,934 500,000 RANGER FUNDING COMPANY LLC++(p) 0.27 01/20/2010 499,940 300,000 REGENCY MARKETS # 1 LLC++(p) 0.22 02/22/2010 299,910 500,000 RHEIN-MAIN SECURITY LIMITED++(p) 0.35 02/16/2010 499,791 500,000 RHEINGOLD SECURITIZATION LIMITED++(p) 0.31 03/31/2010 499,630 250,000 RHEINGOLD SECURITIZATION LIMITED++(p) 0.35 02/12/2010 249,905 250,000 ROYAL PARK INVESTMENT FUNDING CORPORATION++(p) 0.21 03/25/2010 249,883 250,000 SCALDIS CAPITAL LLC++ 0.25 01/08/2010 249,993 250,000 SHEFFIELD RECEIVABLES CORPORATION++(p) 0.19 02/01/2010 249,963 500,000 SOLITAIRE FUNDING LLC++(p) 0.31 01/19/2010 499,935 400,000 SURREY FUNDING CORPORATION++(p) 0.24 01/11/2010 399,981 250,000 THAMES ASSET GLOBAL SECURITIZATION INCORPORATED++(p) 0.23 01/15/2010 249,982 250,000 THAMES ASSET GLOBAL SECURITIZATION INCORPORATED++(p) 0.24 02/08/2010 249,942 250,000 THAMES ASSET GLOBAL SECURITIZATION INCORPORATED++(p) 0.23 03/18/2010 249,883 300,000 THUNDER BAY FUNDING LLC++(p) 0.26 01/25/2010 299,955 250,000 TOYOTA CREDIT DE PUERTO RICO CORPORATION 0.22 03/12/2010 249,898 250,000 TULIP FUNDING CORPORATION++(p) 0.25 01/07/2010 249,995 300,000 UBS FINANCE DELAWARE LLC 0.27 04/02/2010 299,802 400,000 UNICREDIT DELAWARE INCORPORATED++ 0.40 01/05/2010 399,996 250,000 UNICREDIT DELAWARE INCORPORATED++ 0.32 03/11/2010 249,853 500,000 VERSAILLES COMMERCIAL PAPER LLC++(p) 0.35 03/19/2010 499,640 250,000 WINDMILL FUNDING CORPORATION++(p) 0.32 02/01/2010 249,938 500,000 WINDMILL FUNDING CORPORATION++(p) 0.30 02/10/2010 499,846 500,000 YORKTOWN CAPITAL LLC++(p) 0.25 01/19/2010 499,948 TOTAL COMMERCIAL PAPER (COST $29,674,632) 29,674,632 -------------- CORPORATE BONDS & NOTES: 1.58% 500,000 BANK OF AMERICA NA+/- 0.23 02/05/2010 500,000 95,000 GBG LLC+/-++ss 0.38 09/01/2027 95,000 100,000 LTF REAL ESTATE LLC+/-++ss 0.30 06/01/2033 100,000 TOTAL CORPORATE BONDS & NOTES (COST $695,000) 695,000 -------------- MUNICIPAL BONDS & NOTES: 9.85% 200,000 CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY (HCFR, BANK OF AMERICA NA LOC)+/-ss 0.20 07/01/2035 200,000 500,000 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY (IDR, JPMORGAN CHASE & COMPANY LOC)+/-ss 0.25 11/01/2026 500,000
112 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT MONEY MARKET FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- MUNICIPAL BONDS & NOTES (continued) $ 200,000 CALIFORNIA STATE DWR POWER SUPPLY SUBSERIES G 6 (WATER REVENUE, AGM INSURED)+/-ss 0.19% 05/01/2017 $ 200,000 150,000 CALIFORNIA STATEWIDE CDA AZUSA PACIFIC UNIVERSITY PROJECT (COLLEGE & UNIVERSITY REVENUE, ALLIED IRISH BANK PLC LOC)+/-ss 0.34 04/01/2039 150,000 400,000 CALIFORNIA STATEWIDE CDA OAKMONT SENIOR LIVING (HOUSING REVENUE, FNMA INSURED)+/-ss 0.26 08/01/2031 400,000 205,000 CLARKSVILLE TN PUBLIC BUILDING AUTHORITY TENNESSEE MUNICIPAL BUILDING FUND (OTHER REVENUE, BANK OF AMERICA NA LOC)+/-ss 0.27 07/01/2034 205,000 150,000 CLARKSVILLE TN PUBLIC BUILDING AUTHORITY TENNESSEE MUNICIPAL BUILDING FUND (OTHER REVENUE, BANK OF AMERICA NA LOC)+/-ss 0.27 02/01/2038 150,000 200,000 COLORADO HOUSING & FINANCE AUTHORITY SINGLE TAXABLE CLASS I SERIES A-2 (HOUSING REVENUE, DEXIA INSURED)+/-ss 0.40 05/01/2038 200,000 250,000 DENVER CO CITY & COUNTY SCHOOL DISTRICT TAXABLE SERIES A (LEASE REVENUE, AGM INSURED)+/-ss 0.35 12/15/2037 250,000 300,000 LOS ANGELES CA COMMUNITY RDA ACADEMY VILLAGE APARTMENTS (HOUSING REVENUE, FHLMC INSURED)+/-ss 0.25 10/01/2019 300,000 445,000 MISSISSIPPI STATE TAXABLE NISSAN PROJECT A (PROPERTY TAX REVENUE)+/-ss 0.30 11/01/2028 444,981 400,000 MONTGOMERY COUNTY TN PUBLIC BUILDING (OTHER REVENUE, BANK OF AMERICA NA LOC)+/-ss 0.27 02/01/2036 400,000 100,000 NEW JERSEY STATE TURNPIKE AUTHORITY SERIES D (TOLLS ROAD REVENUE, NATL-RE FGIC INSURED, SOCIETE GENERALE LOC)+/-ss 0.28 01/01/2018 100,000 200,000 PALM BEACH COUNTY FL PINE CREST PREPARATORY (PRIVATE SCHOOL REVENUE, BANK OF AMERICA NA LOC)+/-ss 0.25 06/01/2032 200,000 525,000 SACRAMENTO CA MUNICIPAL UTILITY DISTRICT SERIES J (ELECTRIC POWER & LIGHT REVENUE, BANK OF AMERICA NA LOC)+/-ss 0.18 08/15/2028 525,000 100,000 TEXAS STATE TAXABLE PRODUCT DEVELOPMENT PROGRAM SERIES A (OTHER REVENUE)+/-ss 0.28 06/01/2045 100,000 TOTAL MUNICIPAL BONDS & NOTES (COST $4,324,981) 4,324,981 -------------- SECURED MASTER NOTE AGREEMENT: 2.06% 598,000 BANK OF AMERICA SECURITIES LLC+/-ss 0.21 09/09/2034 598,000 308,000 CITIGROUP GLOBAL MARKETS INCORPORATED+/-ss 0.56 09/09/2049 308,000 TOTAL SECURED MASTER NOTE AGREEMENT (COST $906,000) 906,000 -------------- REPURCHASE AGREEMENTS: 6.83% 1,000,000 BANK OF AMERICA NA - 102% COLLATERALIZED BY US GOVERNMENT SECURITIES (MATURITY VALUE $1,000,001) 0.01 01/04/2010 1,000,000 1,000,000 BNP PARIBAS SECURITIES CORPORATION - 102% COLLATERALIZED BY US GOVERNMENT SECURITIES (MATURITY VALUE $1,000,001) 0.01 01/04/2010 1,000,000 1,000,000 JPMORGAN SECURITIES - 102% COLLATERALIZED BY US GOVERNMENT SECURITIES (MATURITY VALUE $1,000,001) 0.01 01/04/2010 1,000,000 TOTAL REPURCHASE AGREEMENTS (COST $3,000,000) 3,000,000 -------------- TIME DEPOSITS: 3.42% 700,000 BNP PARIBAS PARIS 0.11 01/04/2010 700,000 800,000 DEXIA CREDIT LOCAL DE FRANCE 0.30 01/05/2010 800,000 TOTAL TIME DEPOSITS (COST $1,500,000) 1,500,000 -------------- TOTAL INVESTMENTS IN SECURITIES (COST $42,700,621)* 97.24% 42,700,621 OTHER ASSETS AND LIABILITIES, NET 2.76 1,213,751 ------ -------------- TOTAL NET ASSETS 100.00% $ 43,914,372 ------ --------------
Wells Fargo Advantage Variable Trust Funds 113 Portfolio of Investments--December 31, 2009 VT MONEY MARKET FUND - ---------- +/- Variable rate investments. ++ Securities that may be resold to "qualified institutional buyers" under rule 144A or securities offered pursuant to section 4(2) of the Securities Act of 1933, as amended. (p) Asset-backed commercial paper. ss These securities are subject to a demand feature which reduces the effective maturity. * Cost for federal income tax purposes is substantially the same as for financial reporting purposes. The accompanying notes are an integral part of these financial statements. 114 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT OPPORTUNITY FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- COMMON STOCKS: 92.83% APPAREL & ACCESSORY STORES: 2.67% 60,255 NORDSTROM INCORPORATED<< $ 2,264,383 53,624 URBAN OUTFITTERS INCORPORATED+ 1,876,304 4,140,687 -------------- AUTO PARTS & EQUIPMENT: 1.25% 71,020 JOHNSON CONTROLS INCORPORATED 1,934,585 -------------- BIOPHARMACEUTICALS: 2.57% 36,014 CEPHALON INCORPORATED+ 2,247,634 56,037 OSI PHARMACEUTICALS INCORPORATED+ 1,738,828 3,986,462 -------------- BUSINESS SERVICES: 7.02% 23,579 MANPOWER INCORPORATED 1,286,942 7,310 MASTERCARD INCORPORATED CLASS A<< 1,871,214 177,320 NCR CORPORATION+ 1,973,572 51,930 OMNICOM GROUP INCORPORATED 2,033,060 48,880 RED HAT INCORPORATED+ 1,510,392 122,070 SYMANTEC CORPORATION+ 2,183,832 10,859,012 -------------- CASINO & GAMING: 1.08% 88,830 INTERNATIONAL GAME TECHNOLOGY<< 1,667,339 -------------- CHEMICALS & ALLIED PRODUCTS: 1.44% 27,670 PRAXAIR INCORPORATED 2,222,178 -------------- COAL MINING: 0.43% 14,670 PEABODY ENERGY CORPORATION 663,231 -------------- COMMUNICATIONS: 5.05% 78,810 CABLEVISION SYSTEMS CORPORATION NEW YORK GROUP CLASS A 2,034,874 135,610 COMCAST CORPORATION CLASS A 2,171,116 154,900 LIBERTY MEDIA CORPORATION INTERACTIVE SERIES A+ 1,679,116 46,660 SCRIPPS NETWORKS INTERACTIVE INCORPORATED 1,936,390 7,821,496 -------------- COMPUTER SOFTWARE & SERVICES: 1.10% 67,420 AKAMAI TECHNOLOGIES INCORPORATED+ 1,707,749 -------------- DEPOSITORY INSTITUTIONS: 3.44% 72,300 BANK OF NEW YORK MELLON CORPORATION 2,022,231 74,800 BB&T CORPORATION<< 1,897,676 30,880 CITY NATIONAL CORPORATION 1,408,128 5,328,035 -------------- EATING & DRINKING PLACES: 1.48% 65,323 DARDEN RESTAURANTS INCORPORATED 2,290,878 -------------- EDUCATIONAL SERVICES: 2.24% 38,600 APOLLO GROUP INCORPORATED CLASS A+ 2,338,388 19,900 DEVRY INCORPORATED 1,128,927 3,467,315 --------------
Wells Fargo Advantage Variable Trust Funds 115 Portfolio of Investments--December 31, 2009 VT OPPORTUNITY FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- ELECTRIC, GAS & SANITARY SERVICES: 1.35% 74,040 REPUBLIC SERVICES INCORPORATED $ 2,096,072 -------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 12.14% 62,250 ALTERA CORPORATION 1,408,718 42,800 AMETEK INCORPORATED 1,636,672 40,560 AMPHENOL CORPORATION CLASS A 1,873,061 660,030 ARM HOLDINGS PLC 1,892,294 125,100 MICROSEMI CORPORATION+ 2,220,525 59,700 NETAPP INCORPORATED+ 2,053,083 232,540 ON SEMICONDUCTOR CORPORATION+ 2,048,677 78,030 POLYCOM INCORPORATED+ 1,948,409 35,950 ROCKWELL COLLINS INCORPORATED 1,990,192 5,880 WHIRLPOOL CORPORATION 474,281 49,880 XILINX INCORPORATED 1,249,993 18,795,905 -------------- ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES: 2.37% 40,910 ACCENTURE LIMITED CLASS A 1,697,765 52,400 JACOBS ENGINEERING GROUP INCORPORATED+ 1,970,764 3,668,529 -------------- FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT: 2.47% 71,880 CROWN HOLDINGS INCORPORATED+ 1,838,690 41,310 ILLINOIS TOOL WORKS INCORPORATED 1,982,467 3,821,157 -------------- FOOD & KINDRED PRODUCTS: 1.29% 28,250 GENERAL MILLS INCORPORATED 2,000,383 -------------- FOOD STORES: 1.09% 82,030 KROGER COMPANY 1,684,076 -------------- FURNITURE & FIXTURES: 0.39% 44,130 MASCO CORPORATION 609,435 -------------- GENERAL MERCHANDISE STORES: 1.24% 39,600 TARGET CORPORATION 1,915,452 -------------- HEALTH SERVICES: 0.99% 210,292 HEALTH MANAGEMENT ASSOCIATION INCORPORATED CLASS A+ 1,528,823 -------------- HOLDING & OTHER INVESTMENT OFFICES: 1.12% 32,100 EQUITY RESIDENTIAL 1,084,338 55,076 HOST HOTELS & RESORTS INCORPORATED 642,737 1,727,075 -------------- HOUSEHOLD PRODUCTS, WARE: 2.66% 35,660 CHURCH & DWIGHT COMPANY INCORPORATED 2,155,647 32,050 CLOROX COMPANY 1,955,050 4,110,697 -------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 2.56% 39,070 DOVER CORPORATION 1,625,703 64,490 PALL CORPORATION 2,334,538 3,960,241 --------------
116 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT OPPORTUNITY FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- INSURANCE CARRIERS: 4.73% 44,030 ACE LIMITED $ 2,219,112 53,090 HCC INSURANCE HOLDINGS INCORPORATED 1,484,927 26,110 PARTNERRE LIMITED 1,949,373 31,476 RENAISSANCERE HOLDINGS LIMITED 1,672,949 7,326,361 -------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 6.99% 195,800 BOSTON SCIENTIFIC CORPORATION+ 1,762,200 22,070 C.R. BARD INCORPORATED 1,719,253 37,020 RESMED INCORPORATED+ 1,935,035 31,900 ROCKWELL AUTOMATION INCORPORATED 1,498,662 38,190 THERMO FISHER SCIENTIFIC INCORPORATED+ 1,821,281 33,570 WATERS CORPORATION+ 2,079,997 10,816,428 -------------- MEDICAL PRODUCTS: 1.23% 32,200 ZIMMER HOLDINGS INCORPORATED+ 1,903,357 -------------- METAL MINING: 1.03% 14,130 AGNICO-EAGLE MINES LIMITED 763,020 45,400 KINROSS GOLD CORPORATION 835,360 1,598,380 -------------- MISCELLANEOUS RETAIL: 2.48% 52,800 CVS CAREMARK CORPORATION 1,700,688 86,900 STAPLES INCORPORATED 2,136,871 3,837,559 -------------- MOTOR FREIGHT TRANSPORTATION & WAREHOUSING: 1.03% 49,522 J.B. HUNT TRANSPORT SERVICES INCORPORATED 1,598,075 -------------- NON-DEPOSITORY CREDIT INSTITUTIONS: 1.40% 129,570 PEOPLE'S UNITED FINANCIAL INCORPORATED 2,163,819 -------------- OIL & GAS EXTRACTION: 4.45% 19,150 APACHE CORPORATION 1,975,706 135,610 WEATHERFORD INTERNATIONAL LIMITED+ 2,428,775 53,480 XTO ENERGY INCORPORATED 2,488,424 6,892,905 -------------- OIL & GAS FIELD SERVICES: 1.55% 28,930 TRANSOCEAN LIMITED+ 2,395,404 -------------- OIL FIELD EQUIPMENT & SERVICES: 1.21% 42,480 NATIONAL OILWELL VARCO INCORPORATED 1,872,943 -------------- RUBBER & MISCELLANEOUS PLASTICS PRODUCTS: 1.31% 93,040 SEALED AIR CORPORATION 2,033,854 -------------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 1.18% 77,940 INVESCO LIMITED 1,830,811 -------------- SOFTWARE: 1.25% 108,900 ELECTRONIC ARTS INCORPORATED+ 1,932,975 -------------- SURGICAL & MEDICAL INSTRUMENTS & APPARATUS: 1.20% 38,770 COVIDIEN PLC 1,856,695 -------------- TELECOMMUNICATIONS: 0.89% 31,760 AMERICAN TOWER CORPORATION CLASS A+ 1,372,350 --------------
Wells Fargo Advantage Variable Trust Funds 117 Portfolio of Investments--December 31, 2009 VT OPPORTUNITY FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- TEXTILE MILL PRODUCTS: 0.42% 13,519 MOHAWK INDUSTRIES INCORPORATED+ $ 643,504 -------------- TRAVEL & RECREATION: 1.04% 50,760 CARNIVAL CORPORATION 1,608,584 -------------- TOTAL COMMON STOCKS (COST $115,350,092) 143,690,816 -------------- INVESTMENT COMPANIES: 3.54% STOCK FUNDS: 3.54% 67,610 UTILITIES SELECT SECTOR SPDR FUND<< 2,095,910 44,330 VANGUARD REIT ETF 1,983,324 21,430 VANGUARD UTILITIES ETF 1,396,806 TOTAL INVESTMENT COMPANIES (COST $4,667,581) 5,476,040 --------------
YIELD -------- COLLATERAL FOR SECURITIES LENDING: 5.45% COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.81% 313,766 AIM STIT-LIQUID ASSETS PORTFOLIO(u) 0.18% 313,766 313,766 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(u) 0.12 313,766 313,766 DWS MONEY MARKET SERIES INSTITUTIONAL(u) 0.13 313,766 313,807 JPMORGAN PRIME MONEY MARKET FUND(u) 0.14 313,807 1,255,105 --------------
INTEREST PRINCIPAL RATE MATURITY DATE --------- -------- ------------- COLLATERAL INVESTED IN OTHER ASSETS: 4.64% $ 40,749 ANTALIS US FUNDING CORPORATION++(p) 0.22 01/13/2010 40,746 40,749 ANTALIS US FUNDING CORPORATION++(p) 0.28 01/07/2010 40,747 40,749 ANTALIS US FUNDING CORPORATION++(p) 0.29 01/29/2010 40,740 122,246 ATLANTIC ASSET SECURITIZATION CORPORATION++(p) 0.19 01/15/2010 122,237 107,984 BANCO SANTANDER SA (MADRID) 0.08 01/04/2010 107,984 81,498 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $81,499) 0.01 01/04/2010 81,498 107,984 BANK OF IRELAND 0.05 01/04/2010 107,984 107,984 BNP PARIBAS (PARIS) 0.11 01/04/2010 107,984 16,300 CALCASIEU PARISH LA+/-ss 0.37 12/01/2027 16,300 22,412 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.32 06/01/2028 22,412 126,321 CALYON (NEW YORK) 0.18 01/08/2010 126,321 10,788 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.28 10/01/2038 10,788 118,171 COMMERZBANK AG (GRAND CAYMAN) 0.00 01/04/2010 118,171 32,599 COOK COUNTY IL+/-ss 0.40 11/01/2030 32,599 30,562 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $30,562) 0.01 01/04/2010 30,562 107,984 DANSKE BANK A/S COPENHAGEN 0.12 01/04/2010 107,984 73,348 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.35 12/15/2037 73,348 114,097 ENI FINANCE USA INCORPORATED++ 0.19 02/04/2010 114,076 122,246 FORTIS BANK NV SA 0.19 01/19/2010 122,246 28,524 GDF SUEZ++ 0.19 01/12/2010 28,522 101,872 GDF SUEZ++ 0.20 02/03/2010 101,853 61,123 GOTHAM FUNDING CORPORATION++(p) 0.18 01/11/2010 61,120 61,465 GOTHAM FUNDING CORPORATION++(p) 0.19 01/05/2010 61,464 122,246 GOVCO INCORPORATED++(p) 0.19 01/12/2010 122,239 2,588,173 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 998,517 57,048 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 05/01/2023 57,048 41,360 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 07/01/2034 41,360 6,724 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.27 11/01/2042 6,724
118 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT OPPORTUNITY FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COLLATERAL INVESTED IN OTHER ASSETS (continued) $ 61,123 HOUSTON TX UTILITY SYSTEM+/-SS 0.25% 05/15/2034 $ 61,123 20,374 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.28 07/01/2029 20,374 8,150 INDIANA MUNICIPAL POWER AGENCY+/- 0.28 01/01/2018 8,150 11,817 ING USA FUNDING LLC 0.20 01/04/2010 11,817 30,562 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY US TREASURY SECURITIES (MATURITY VALUE $30,562) 0.01 01/04/2010 30,562 12,225 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.28 04/15/2025 12,225 122,246 KOCH RESOURCES LLC++ 0.19 01/25/2010 122,231 101,872 LIBERTY STREET FUNDING CORPORATION++(p) 0.18 01/08/2010 101,868 101,872 LLOYDS TSB BANK PLC 0.18 01/08/2010 101,872 40,749 LMA AMERICAS LLC++(p) 0.19 01/19/2010 40,745 134,675 MASSACHUSETTS HEFA+/-ss 0.22 10/01/2034 134,675 20,171 MATCHPOINT MASTER TRUST++(p) 0.19 01/05/2010 20,170 101,872 MATCHPOINT MASTER TRUST++(p) 0.20 01/27/2010 101,857 14,670 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.27 02/01/2036 14,670 8,150 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.28 01/01/2018 8,150 95,556 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.25 07/01/2034 95,556 70,903 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.22 12/01/2040 70,903 74,367 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.20 01/12/2010 74,362 32,599 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.21 01/11/2010 32,597 25,916 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.29 01/01/2034 25,916 87,651 REGENCY MARKETS #1 LLC++(p) 0.20 01/07/2010 87,648 36,751 REGENCY MARKETS #1 LLC++(p) 0.20 01/20/2010 36,747 101,872 SALISBURY RECEIVABLES COMPANY++(p) 0.19 01/19/2010 101,862 54,990 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.18 12/01/2028 54,990 128,766 SANPAOLO IMI US FINANCIAL COMPANY 0.19 01/19/2010 128,754 85,572 SCALDIS CAPITAL LIMITED++(p) 0.24 01/06/2010 85,570 126,321 SOCIETE GENERALE BANNON LLC 0.18 01/11/2010 126,321 122,246 STARBIRD FUNDING CORPORATION++(p) 0.19 01/06/2010 122,243 122,246 SUMITOMO TRUST & BANKING COMPANY 0.22 01/05/2010 122,243 32,192 TASMAN FUNDING INCORPORATED++(p) 0.24 01/05/2010 32,191 93,722 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++(p) 0.18 01/15/2010 93,716 97,797 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 01/07/2010 97,794 36,674 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.25 07/01/2032 36,674 122,246 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 122,246 12,225 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.30 12/15/2040 12,225 3,282,157 VFNC CORPORATION+++/-(a)(i) 0.45 09/30/2010 1,673,900 101,872 VICTORY RECEIVABLES CORPORATION++(p) 0.19 01/08/2010 101,868 28,524 VICTORY RECEIVABLES CORPORATION++(p) 0.20 01/13/2010 28,522 122,246 YORKTOWN CAPITAL LLC++(p) 0.19 02/03/2010 122,226 7,181,137 -------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $8,186,299) 8,436,242 --------------
SHARES YIELD - ---------------- -------- SHORT-TERM INVESTMENTS: 3.64% MUTUAL FUNDS: 3.64% 5,625,428 WELLS FARGO ADVANTAGE MONEY MARKET TRUST(u)~+++ 0.10 5,625,428 TOTAL SHORT-TERM INVESTMENTS (COST $5,625,428) 5,625,428 -------------- TOTAL INVESTMENTS IN SECURITIES (COST $133,829,400)* 105.46% 163,228,526 OTHER ASSETS AND LIABILITIES, NET (5.46) (8,446,028) ------ -------------- TOTAL NET ASSETS 100.00% $ 154,782,498 ------ ==============
Wells Fargo Advantage Variable Trust Funds 119 Portfolio of Investments--December 31, 2009 VT OPPORTUNITY FUND - ---------- << All or a portion of this security is on loan. + Non-income earning securities. ++ Securities that may be resold to "qualified institutional buyers" under rule 144A or securities offered pursuant to section 4(2) of the Securities Act of 1933, as amended. (p) Asset-backed commercial paper. +/- Variable rate investments. ss These securities are subject to a demand feature which reduces the effective maturity. (a) Security fair valued in accordance with the procedures approved by the Board of Trustees. (i) Illiquid security (unaudited). (u) Rate shown is the 7-day annualized yield at period end. ~ The Fund invests cash balances that it retains for liquidity purposes in the Wells Fargo Advantage Money Market Trust. The Wells Fargo Advantage Money Market Trust does not pay an investment advisory fee. +++ Short-term security of an affiliate of the Fund with a cost of $5,625,428. * Cost for federal income tax purposes is $142,400,047 and net unrealized appreciation (depreciation) consists of: Gross unrealized appreciation $ 33,063,533 Gross unrealized depreciation (12,235,054) ------------ Net unrealized appreciation $ 20,828,479
The accompanying notes are an integral part of these financial statements. 120 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT SMALL CAP GROWTH FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- COMMON STOCKS: 98.83% BIOPHARMACEUTICALS: 1.34% 42,600 ACORDA THERAPEUTICS INCORPORATED+ $ 1,074,372 45,300 OSI PHARMACEUTICALS INCORPORATED+ 1,405,659 2,480,031 -------------- BUSINESS SERVICES: 18.74% 46,100 ADMINISTAFF INCORPORATED 1,087,499 68,800 CYBERSOURCE CORPORATION+ 1,383,568 249,946 GARTNER INCORPORATED+ 4,509,026 532,694 GLOBAL CASH ACCESS INCORPORATED+ 3,989,878 307,245 LAWSON SOFTWARE INCORPORATED+ 2,043,179 211,739 MARCHEX INCORPORATED CLASS B 1,075,634 435,417 MOVE INCORPORATED+ 722,792 251,099 ON ASSIGNMENT INCORPORATED+ 1,795,358 293,491 SAPIENT CORPORATION+ 2,427,171 470,530 SKILLSOFT PLC ADR+ 4,931,154 180,824 SYKES ENTERPRISES INCORPORATED+ 4,605,587 178,796 SYNCHRONOSS TECHNOLOGIES INCORPORATED+ 2,826,765 66,628 TELETECH HOLDINGS INCORPORATED+ 1,334,559 104,433 THE KNOT INCORPORATED+ 1,051,640 188,662 THQ INCORPORATED+ 950,856 34,734,666 -------------- CASINO & GAMING: 0.83% 38,667 WMS INDUSTRIES INCORPORATED+ 1,546,680 -------------- CHEMICALS & ALLIED PRODUCTS: 0.63% 103,916 VANDA PHARMACEUTICALS INCORPORATED+ 1,168,016 -------------- COMMERCIAL SERVICES: 2.63% 359,828 LIVE NATION INCORPORATED+ 3,062,136 56,872 WRIGHT EXPRESS CORPORATION+ 1,811,942 4,874,078 -------------- COMMUNICATIONS: 5.93% 272,119 CBEYOND INCORPORATED+<< 4,285,874 80,600 LEAP WIRELESS INTERNATIONAL INCORPORATED+ 1,414,530 154,511 LODGENET ENTERTAINMENT CORPORATION+ 854,446 451,400 PAETEC HOLDING CORPORATION+ 1,873,310 251,800 TIVO INCORPORATED+ 2,563,324 10,991,484 -------------- DEPOSITORY INSTITUTIONS: 1.58% 133,200 FIRST COMMONWEALTH FINANCIAL CORPORATION 619,380 58,900 MB FINANCIAL INCORPORATED 1,161,508 35,952 SIGNATURE BANK+ 1,146,869 2,927,757 -------------- E-COMMERCE/SERVICES: 3.29% 240,368 GSI COMMERCE INCORPORATED+ 6,102,944 -------------- EATING & DRINKING PLACES: 0.67% 146,288 CKE RESTAURANTS INCORPORATED 1,237,596 --------------
Wells Fargo Advantage Variable Trust Funds 121 Portfolio of Investments--December 31, 2009 VT SMALL CAP GROWTH FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- EDUCATIONAL SERVICES: 3.67% 163,384 BRIDGEPOINT EDUCATION INCORPORATED+<< $ 2,454,028 129,025 GRAND CANYON EDUCATION INCORPORATED+ 2,452,765 93,700 K12 INCORPORATED+ 1,899,299 6,806,092 -------------- ELECTRIC, GAS & SANITARY SERVICES: 0.25% 7,700 CLEAN HARBORS INCORPORATED+ 458,997 -------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 8.28% 40,200 ACUITY BRANDS INCORPORATED 1,432,728 15,762 BALDOR ELECTRIC COMPANY 442,755 133,613 FAIRCHILD SEMICONDUCTOR INTERNATIONAL INCORPORATED+ 1,334,794 65,200 GREATBATCH INCORPORATED+ 1,253,796 247,308 INFORMATION SERVICES GROUP INCORPORATED+ 783,966 162,599 MICROSEMI CORPORATION+ 2,886,132 340,100 PMC-SIERRA INCORPORATED+ 2,945,266 115,833 POLYPORE INTERNATIONAL INCORPORATED+ 1,378,413 50,549 SOLERA HOLDINGS INCORPORATED 1,820,269 86,169 UNIVERSAL DISPLAY CORPORATION+<< 1,065,049 15,343,168 -------------- ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES: 4.74% 54,712 CORPORATE EXECUTIVE BOARD COMPANY 1,248,528 35,945 ICF INTERNATIONAL INCORPORATED+ 963,326 85,563 LUMINEX CORPORATION+<< 1,277,456 132,694 NAVIGANT CONSULTING INCORPORATED+ 1,971,833 156,795 RESOURCES CONNECTION INCORPORATED+ 3,327,190 8,788,333 -------------- ENVIRONMENTAL CONTROL: 0.93% 123,939 CALGON CARBON CORPORATION+ 1,722,752 -------------- FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT: 0.83% 296,600 MUELLER WATER PRODUCTS INCORPORATED 1,542,320 -------------- FINANCIAL INSTITUTIONS: 1.43% 111,700 DOLLAR FINANCIAL CORPORATION+ 2,642,822 -------------- FOOD & KINDRED PRODUCTS: 0.33% 161,103 SENOMYX INCORPORATED+ 607,358 -------------- HEALTH SERVICES: 0.72% 82,455 INVENTIV HEALTH INCORPORATED+ 1,333,297 -------------- HEAVY CONSTRUCTION OTHER THAN BUILDING CONSTRUCTION CONTRACTS: 0.55% 157,268 GREAT LAKES DREDGE & DOCK COMPANY 1,019,097 -------------- HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES: 0.37% 293,144 GREAT WOLF RESORTS INCORPORATED+ 694,751 -------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 5.91% 68,335 GARDNER DENVER INCORPORATED 2,907,654 52,687 RIVERBED TECHNOLOGY INCORPORATED+ 1,210,220 297,579 SCIENTIFIC GAMES CORPORATION CLASS A+ 4,329,774 30,699 THE MIDDLEBY CORPORATION+ 1,504,865 42,500 TIMKEN COMPANY 1,007,675 10,960,188 --------------
122 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT SMALL CAP GROWTH FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- INSURANCE CARRIERS: 2.31% 50,139 AMERIGROUP CORPORATION+ $ 1,351,747 125,300 TOWER GROUP INCORPORATED 2,933,273 4,285,020 -------------- LEGAL SERVICES: 0.90% 35,209 FTI CONSULTING INCORPORATED+<< 1,660,456 -------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 9.01% 61,700 ALIGN TECHNOLOGY INCORPORATED+ 1,099,494 45,179 ESTERLINE TECHNOLOGIES CORPORATION+ 1,841,948 233,334 EV3 INCORPORATED+ 3,112,676 324,565 IXIA+ 2,414,764 118,345 SENORX INCORPORATED+ 976,346 44,105 SIRONA DENTAL SYSTEMS INCORPORATED+ 1,399,893 84,693 SONOSITE INCORPORATED+ 2,001,296 280,019 SPECTRANETICS CORPORATION+ 1,948,932 68,275 STERIS CORPORATION 1,909,652 16,705,001 -------------- MEDICAL EQUIPMENT & SUPPLIES: 1.57% 91,120 NUVASIVE INCORPORATED+<< 2,914,018 -------------- MEDICAL PRODUCTS: 1.77% 188,259 VOLCANO CORPORATION+<< 3,271,941 -------------- METAL FABRICATE, HARDWARE: 0.47% 52,400 CHART INDUSTRIES INCORPORATED+ 867,220 -------------- MISCELLANEOUS MANUFACTURING INDUSTRIES: 0.53% 118,922 SHUFFLE MASTER INCORPORATED+ 979,917 -------------- MOTION PICTURES: 2.95% 139,464 CINEMARK HOLDINGS INCORPORATED 2,004,098 208,582 NATIONAL CINEMEDIA INCORPORATED 3,456,204 5,460,302 -------------- OIL & GAS EXTRACTION: 3.29% 92,400 BRIGHAM EXPLORATION COMPANY+ 1,252,020 46,000 CARRIZO OIL & GAS INCORPORATED+ 1,218,540 66,700 GOODRICH PETROLEUM CORPORATION+<< 1,624,145 48,700 SWIFT ENERGY COMPANY+ 1,166,852 63,500 VENOCO INCORPORATED+ 828,040 6,089,597 -------------- PAPER & ALLIED PRODUCTS: 0.56% 14,850 SCHWEITZER MANDUIT INTERNATIONAL INCORPORATED 1,044,698 -------------- PERSONAL SERVICES: 1.26% 80,000 WEIGHT WATCHERS INTERNATIONAL INCORPORATED 2,332,800 -------------- PHARMACEUTICALS: 1.58% 56,228 IMPAX LABORATORIES INCORPORATED+ 764,701 74,000 ONYX PHARMACEUTICALS INCORPORATED+ 2,171,160 2,935,861 --------------
Wells Fargo Advantage Variable Trust Funds 123 Portfolio of Investments--December 31, 2009 VT SMALL CAP GROWTH FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- PRINTING, PUBLISHING & ALLIED INDUSTRIES: 4.01% 344,367 INNERWORKINGS INCORPORATED+<< $ 2,031,765 189,480 SHUTTERFLY INCORPORATED+ 3,374,639 35,761 VISTAPRINT NV+<< 2,026,218 7,432,622 -------------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 0.51% 30,868 EVERCORE PARTNERS INCORPORATED CLASS A 938,387 -------------- TRANSPORTATION BY AIR: 0.61% 30,600 ATLAS AIR WORLDWIDE HOLDINGS INCORPORATED+ 1,139,850 -------------- TRANSPORTATION EQUIPMENT: 2.57% 74,319 BRUNSWICK CORPORATION 944,594 54,501 POLARIS INDUSTRIES INCORPORATED 2,377,879 35,200 WABTEC CORPORATION 1,437,568 4,760,041 -------------- TRANSPORTATION SERVICES: 1.28% 69,550 RAILAMERICA INCORPORATED+ 848,510 107,000 UTI WORLDWIDE INCORPORATED 1,532,240 2,380,750 -------------- TOTAL COMMON STOCKS (COST $174,169,353) 183,180,908 -------------- COLLATERAL FOR SECURITIES LENDING: 3.28%
YIELD -------- COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.58% 267,346 AIM STIT-LIQUID ASSETS PORTFOLIO(u) 0.18% 267,346 267,346 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(u) 0.12 267,346 267,346 DWS MONEY MARKET SERIES INSTITUTIONAL(u) 0.13 267,346 267,381 JPMORGAN PRIME MONEY MARKET FUND(u) 0.14 267,381 1,069,419 --------------
INTEREST PRINCIPAL RATE MATURITY DATE --------- -------- ------------- COLLATERAL INVESTED IN OTHER ASSETS: 2.70% $ 34,720 ANTALIS US FUNDING CORPORATION++(p) 0.22 01/13/2010 34,718 34,720 ANTALIS US FUNDING CORPORATION++(p) 0.28 01/07/2010 34,719 34,720 ANTALIS US FUNDING CORPORATION++(p) 0.29 01/29/2010 34,712 104,161 ATLANTIC ASSET SECURITIZATION CORPORATION++(p) 0.19 01/15/2010 104,153 92,009 BANCO SANTANDER SA (MADRID) 0.08 01/04/2010 92,009 69,441 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $69,441) 0.01 01/04/2010 69,441 92,009 BANK OF IRELAND 0.05 01/04/2010 92,009 92,009 BNP PARIBAS (PARIS) 0.11 01/04/2010 92,009 13,888 CALCASIEU PARISH LA+/-ss 0.37 12/01/2027 13,888 19,096 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.32 06/01/2028 19,096 107,633 CALYON (NEW YORK) 0.18 01/08/2010 107,633 9,192 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.28 10/01/2038 9,192 100,689 COMMERZBANK AG (GRAND CAYMAN) 0.00 01/04/2010 100,689 27,776 COOK COUNTY IL+/-ss 0.40 11/01/2030 27,776 26,040 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE $26,040) 0.01 01/04/2010 26,040 92,009 DANSKE BANK A/S COPENHAGEN 0.12 01/04/2010 92,009 62,496 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.35 12/15/2037 62,496 97,217 ENI FINANCE USA INCORPORATED++ 0.19 02/04/2010 97,199
124 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT SMALL CAP GROWTH FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COLLATERAL INVESTED IN OTHER ASSETS (continued) $ 104,161 FORTIS BANK NV SA 0.19% 01/19/2010 $ 104,161 24,304 GDF SUEZ++ 0.19 01/12/2010 24,303 86,801 GDF SUEZ++ 0.20 02/03/2010 86,785 52,080 GOTHAM FUNDING CORPORATION++(p) 0.18 01/11/2010 52,078 52,372 GOTHAM FUNDING CORPORATION++(p) 0.19 01/05/2010 52,371 104,161 GOVCO INCORPORATED++(p) 0.19 01/12/2010 104,155 1,132,041 GRYPHON FUNDING LIMITED(a)(i) 0.00 08/05/2010 436,742 48,608 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 05/01/2023 48,608 35,241 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 07/01/2034 35,241 5,729 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.27 11/01/2042 5,729 52,080 HOUSTON TX UTILITY SYSTEM+/-ss 0.25 05/15/2034 52,080 17,360 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.28 07/01/2029 17,360 6,944 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.28 01/01/2018 6,944 10,069 ING USA FUNDING LLC 0.20 01/04/2010 10,069 26,040 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY US TREASURY SECURITIES (MATURITY VALUE $26,040) 0.01 01/04/2010 26,040 10,416 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.28 04/15/2025 10,416 104,161 KOCH RESOURCES LLC++ 0.19 01/25/2010 104,148 86,801 LIBERTY STREET FUNDING CORPORATION++(p) 0.18 01/08/2010 86,798 86,801 LLOYDS TSB BANK PLC 0.18 01/08/2010 86,801 34,720 LMA AMERICAS LLC++(p) 0.19 01/19/2010 34,717 114,750 MASSACHUSETTS HEFA+/-ss 0.22 10/01/2034 114,750 17,187 MATCHPOINT MASTER TRUST++(p) 0.19 01/05/2010 17,186 86,801 MATCHPOINT MASTER TRUST++(p) 0.20 01/27/2010 86,788 12,499 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.27 02/01/2036 12,499 6,944 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.28 01/01/2018 6,944 81,419 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.25 07/01/2034 81,419 60,413 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.22 12/01/2040 60,413 63,364 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.20 01/12/2010 63,361 27,776 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.21 01/11/2010 27,775 22,082 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.29 01/01/2034 22,082 74,683 REGENCY MARKETS #1 LLC++(p) 0.20 01/07/2010 74,681 31,314 REGENCY MARKETS #1 LLC++(p) 0.20 01/20/2010 31,311 86,801 SALISBURY RECEIVABLES COMPANY++(p) 0.19 01/19/2010 86,792 46,855 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.18 12/01/2028 46,855 109,716 SANPAOLO IMI US FINANCIAL COMPANY 0.19 01/19/2010 109,706 72,913 SCALDIS CAPITAL LIMITED++(p) 0.24 01/06/2010 72,910 107,633 SOCIETE GENERALE BANNON LLC 0.18 01/11/2010 107,633 104,161 STARBIRD FUNDING CORPORATION++(p) 0.19 01/06/2010 104,158 104,161 SUMITOMO TRUST & BANKING COMPANY 0.22 01/05/2010 104,158 27,429 TASMAN FUNDING INCORPORATED++(p) 0.24 01/05/2010 27,428 79,857 THAMES ASSET GLOBAL SECURITIZATION #1 INCORPORATED++(p) 0.18 01/15/2010 79,851 83,329 TICONDEROGA MASTER FUNDING LIMITED++(p) 0.18 01/07/2010 83,326 31,248 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.25 07/01/2032 31,248 104,161 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 104,161 10,416 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.30 12/15/2040 10,416 1,435,583 VFNC CORPORATION+++/-(a)(i) 0.45 09/30/2010 732,148 86,801 VICTORY RECEIVABLES CORPORATION++(p) 0.19 01/08/2010 86,793 24,304 VICTORY RECEIVABLES CORPORATION++(p) 0.20 01/13/2010 24,303 104,161 YORKTOWN CAPITAL LLC++(p) 0.19 02/03/2010 104,143 5,010,572 -------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $5,970,668) 6,079,991 --------------
Wells Fargo Advantage Variable Trust Funds 125 Portfolio of Investments--December 31, 2009 VT SMALL CAP GROWTH FUND
SHARES SECURITY NAME YIELD VALUE ------ ------------- -------- -------------- SHORT-TERM INVESTMENTS: 1.37% 2,528,987 WELLS FARGO ADVANTAGE MONEY MARKET TRUST(u)~+++ 0.10% $ 2,528,987 -------------- TOTAL SHORT-TERM INVESTMENTS (COST $2,528,987) 2,528,987 -------------- TOTAL INVESTMENTS IN SECURITIES (COST $182,669,008)* 103.48% 191,789,886 OTHER ASSETS AND LIABILITIES, NET (3.48) (6,444,914) ------ -------------- TOTAL NET ASSETS 100.00% $ 185,344,972 ------ --------------
- ---------- + Non-income earning securities. << All or a portion of this security is on loan. ++ Securities that may be resold to "qualified institutional buyers" under rule 144A or securities offered pursuant to section 4(2) of the Securities Act of 1933, as amended. (p) Asset-backed commercial paper. +/- Variable rate investments. ss These securities are subject to a demand feature which reduces the effective maturity. (a) Security fair valued in accordance with the procedures approved by the Board of Trustees. (i) Illiquid security (unaudited). (u) Rate shown is the 7-day annualized yield at period end. ~ The Fund invests cash balances that it retains for liquidity purposes in the Wells Fargo Advantage Money Market Trust. The Wells Fargo Advantage Money Market Trust does not pay an investment advisory fee. +++ Short-term security of an affiliate of the Fund with a cost of $2,528,987. * Cost for federal income tax purposes is $189,688,508 and net unrealized appreciation (depreciation) consists of: Gross unrealized appreciation $ 24,477,775 Gross unrealized depreciation (22,376,397) ------------ Net unrealized appreciation $ 2,101,378
The accompanying notes are an integral part of these financial statements. 126 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT SMALL/MID CAP VALUE FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- COMMON STOCKS: 93.85% AMUSEMENT & RECREATION SERVICES: 0.66% 29,280 CENTURY CASINOS INCORPORATED+ $ 78,763 -------------- APPAREL & ACCESSORY STORES: 0.34% 21,850 DELIA*S INCORPORATED+ 40,860 -------------- AUTOMOTIVE REPAIR, SERVICES & PARKING: 0.42% 3,200 STANDARD PARKING CORPORATION+ 50,816 -------------- BANKING: 0.45% 1,350 MIDSOUTH BANCORP INCORPORATED 18,765 2,960 WASHINGTON BANKING COMPANY 35,342 54,107 -------------- BASIC MATERIALS: 0.63% 1,845 INTERNATIONAL FLAVORS & FRAGRANCES INCORPORATED 75,903 -------------- BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS: 1.46% 4,065 CAVCO INDUSTRIES INCORPORATED+ 146,015 14,249 PALM HARBOR HOMES INCORPORATED+ 29,495 175,510 -------------- BUSINESS SERVICES: 8.69% 32,810 3COM CORPORATION+ 246,075 2,945 ABM INDUSTRIES INCORPORATED 60,844 6,135 CLARUS CORPORATION+ 26,074 1,050 COMPUTER PROGRAMS & SYSTEMS INCORPORATED 48,353 2,502 HEALTHCARE SERVICES GROUP 53,693 1,595 HENRY JACK & ASSOCIATES INCORPORATED 36,876 40,108 HILL INTERNATIONAL INCORPORATED+ 250,274 3,255 IMS HEALTH INCORPORATED 68,550 7,520 INTERPUBLIC GROUP OF COMPANIES INCORPORATED+ 55,498 24,775 TIER TECHNOLOGIES INCORPORATED CLASS B+ 198,200 1,044,437 -------------- CHEMICALS & ALLIED PRODUCTS: 0.88% 20,835O RASURE TECHNOLOGIES INCORPORATED+ 105,842 -------------- COMMERCIAL SERVICES: 2.46% 9,858 GEO GROUP INCORPORATED+ 215,693 3,285 SAIC INCORPORATED+ 62,218 600 VERISK ANALYTICS INCORPORATED CLASS A+ 18,168 296,079 -------------- COMMUNICATIONS: 3.05% 22,380 CHINA GRENTECH CORPORATION LIMITED ADR+ 79,673 13,390 CINCINNATI BELL INCORPORATED+ 46,196 27,200 ENTRAVISION COMMUNICATIONS CORPORATION CLASS A+ 92,480 67,365 SANDVINE CORPORATION+ 82,913 1,560 SCRIPPS NETWORKS INTERACTIVE INCORPORATED 64,740 366,002 -------------- CONSTRUCTION SPECIAL TRADE CONTRACTORS: 0.10% 4,670 U.S. HOME SYSTEMS INCORPORATED+ 11,862 --------------
Wells Fargo Advantage Variable Trust Funds 127 Portfolio of Investments--December 31, 2009 VT SMALL/MID CAP VALUE FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- DEPOSITORY INSTITUTIONS: 3.27% 5,330 1ST UNITED BANCORP INCORPORATED+ $ 38,056 4,150 AMERICAN RIVER HOLDINGS 32,619 4,305 BANCORP INCORPORATED+ 29,532 10,430 COMMUNITY BANKERS TRUST CORPORATION 34,002 620 EAGLE BANCORP INCORPORATED+ 6,491 2,045 FIRST NIAGARA FINANCIAL GROUP INCORPORATED 28,446 12,299 FIRST SECURITY GROUP INCORPORATED 29,272 765 IBERIABANK CORPORATION 41,165 14,733 PACIFIC PREMIER BANCORP INCORPORATED+ 49,798 1,000 SUNTRUST BANKS INCORPORATED 20,290 1,525 UNIVEST CORPORATION OF PENNSYLVANIA 26,733 3,020 WESTERN UNION COMPANY 56,927 393,331 -------------- ELECTRIC, GAS & SANITARY SERVICES: 0.30% 3,655 EL PASO CORPORATION 35,929 -------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 5.90% 14,705 BIGBAND NETWORKS INCORPORATED+ 50,585 20,545 EMCORE CORPORATION+ 21,983 26,313 EVANS & SUTHERLAND COMPUTER CORPORATION+ 2,631 9,160 GLOBECOMM SYSTEMS INCORPORATED+ 71,631 5,010 INTEGRATED ELECTRICAL SERVICES INCORPORATED+ 29,309 18,210 MICRON TECHNOLOGY INCORPORATED+ 192,298 106,855 MRV COMMUNICATIONS INCORPORATED+ 75,867 3,585 OSI SYSTEMS INCORPORATED+ 97,799 28,210 POWER-ONE INCORPORATED+ 122,714 7,550 RICHARDSON ELECTRONICS LIMITED 44,319 709,136 -------------- ENGINEERING: 0.29% 1,850 ABB LIMITED ADR 35,335 -------------- ENGINEERING, ACCOUNTING, RESEARCH MANAGEMENT & RELATED SERVICES: 0.63% 13,875 SYMYX TECHNOLOGIES INCORPORATED+ 76,313 -------------- ENTERTAINMENT PRODUCTION: 0.59% 1,320 DISCOVERY COMMUNICATIONS INCORPORATED CLASS A+ 35,006 1,160 DISCOVERY COMMUNICATIONS INCORPORATED CLASS C+ 35,577 70,583 -------------- FINANCIAL SERVICES: 0.25% 3,875 WESTERN LIBERTY BANCORP+ 29,489 -------------- HEALTH SERVICES: 1.18% 50 CONCORD MEDICAL SERVICES HOLDING LIMITED ADR+ 432 5,888 CROSS COUNTRY HEALTHCARE INCORPORATED+ 58,350 5,370 ENSIGN GROUP INCORPORATED 82,537 141,319 -------------- HOLDING & OTHER INVESTMENT OFFICES: 8.97% 11,665 ANNALY CAPITAL MANAGEMENT INCORPORATED 202,388 19,890 ANWORTH MORTGAGE ASSET CORPORATION 139,230 12,515 CAPSTEAD MORTGAGE CORPORATION 170,830 5,625 HILLTOP HOLDINGS INCORPORATED+ 65,475 7,120 MFA MORTGAGE INVESTMENTS INCORPORATED 52,332
128 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT SMALL/MID CAP VALUE FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- HOLDING & OTHER INVESTMENT OFFICES (continued) 39,329 ORIGEN FINANCIAL INCORPORATED+ $ 57,027 15,585 PRIMORIS SERVICES CORPORATION 124,212 2,845 REDWOOD TRUST INCORPORATED 41,139 1,455 SILVER STANDARD RESOURCES INCORPORATED+ 31,821 5,215 SUN COMMUNITIES INCORPORATED 102,996 10,657 UMH PROPERTIES INCORPORATED 90,371 1,077,821 -------------- HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGE PLACES: 0.38% 21,450 EMPIRE RESORTS INCORPORATED 45,260 -------------- INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT: 3.95% 2,620 ACTUANT CORPORATION CLASS A 48,549 11,780 BROCADE COMMUNICATIONS SYSTEMS INCORPORATED+ 89,881 10,510 CRAY INCORPORATED+ 67,474 11,385 INTERMEC INCORPORATED+ 146,411 1,400 KAYDON CORPORATION 50,064 2,990 SIMPLETECH INCORPORATED+ 48,857 875 SMITH INTERNATIONAL INCORPORATED 23,774 475,010 -------------- INSURANCE CARRIERS: 1.19% 26,070 FIRST ACCEPTANCE CORPORATION+ 50,837 2,335 MERCURY GENERAL CORPORATION 91,672 142,509 -------------- INVESTMENTS & MISCELLANEOUS FINANCIAL SERVICES: 0.80% 1,275 ARTIO GLOBAL INVESTOS INCORPORATED+ 32,500 119,380 SANDSTORM RESOURCES LIMITED+(i) 63,922 96,422 -------------- LEATHER & LEATHER PRODUCTS: 0.21% 34,435 BAKERS FOOTWEAR GROUP INCORPORATED+ 25,478 -------------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS: PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS: 2.97% 31,276 ALLIED HEALTHCARE PRODUCTS INCORPORATED+ 167,639 775 HAEMONETICS CORPORATION+ 42,741 42,111 LTX-CREDENCE CORPORATION+ 74,958 2,425 WRIGHT MEDICAL GROUP INCORPORATED+ 45,954 955 ZOLL MEDICAL CORPORATION+ 25,518 356,810 -------------- MEDICAL PRODUCTS: 0.34% 810 STRYKER CORPORATION 40,800 -------------- METAL MINING: 10.72% 1,980 AGNICO-EAGLE MINES LIMITED 106,920 1,570 CENTERRA GOLD INCORPORATED+ 16,213 395 FREEPORT-MCMORAN COPPER & GOLD INCORPORATED CLASS B 31,715 2,550 GOLDCORP INCORPORATED 100,317 54,965 MINERA ANDES INCORPORATED+ 42,719 3,305 NEWMONT MINING CORPORATION 156,360 40,130 PETAQUILLA MINERALS LIMITED+ 32,309 7,180 RANDGOLD RESOURCES LIMITED ADR 568,082 2,365 ROYAL GOLD INCORPORATED 111,392
Wells Fargo Advantage Variable Trust Funds 129 Portfolio of Investments--December 31, 2009 VT SMALL/MID CAP VALUE FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- METAL MINING (continued) 19,350 SAN GOLD CORPORATION+ $ 66,564 9,285 VISTA GOLD CORPORATION+ 22,748 2,855 YAMANA GOLD INCORPORATED 32,490 1,287,829 -------------- MISCELLANEOUS MANUFACTURING INDUSTRIES: 0.80% 13,235 ACCO BRANDS CORPORATION+ 96,351 -------------- MOTOR FREIGHT TRANSPORTATION & WAREHOUSING: 0.03% 3,830 YRC WORLDWIDE INCORPORATED+ 3,216 -------------- OIL & GAS EXTRACTION: 14.81% 2,665 CANADIAN NATURAL RESOURCES LIMITED 191,747 34,030 ENERGY XXI BERMUDA LIMITED 78,609 1,185 EXCO RESOURCES INCORPORATED 25,158 24,050 GLOBAL INDUSTRIES LIMITED+ 171,477 8,225 HELIX ENERGY SOLUTIONS GROUP INCORPORATED+ 96,644 1,690 HELMERICH & PAYNE INCORPORATED 67,397 11,630 KEY ENERGY SERVICES INCORPORATED+ 102,228 18,977 MCMORAN EXPLORATION COMPANY+ 152,196 1,590 NEWFIELD EXPLORATION COMPANY+ 76,686 29,535 NEWPARK RESOURCES INCORPORATED+ 124,933 3,205 PENN WEST ENERGY TRUST 56,408 4,235 PETROQUEST ENERGY INCORPORATED+ 25,961 1,650 PIONEER NATURAL RESOURCES COMPANY 79,481 1,575 PRIDE INTERNATIONAL INCORPORATED+ 50,258 3,202 RANGE RESOURCES CORPORATION 159,620 6,180 SANDRIDGE ENERGY INCORPORATED+ 58,277 115 SEAHAWK DRILLING INCORPORATED+ 2,592 16,370 TRILOGY ENERGY TRUST 134,454 7,430 WILLBROS GROUP INCORPORATED+ 125,344 1,779,470 -------------- OIL FIELD SERVICES: 0.22% 5,885 TRICO MARINE SERVICES INCORPORATED+ 26,718 -------------- PETROLEUM REFINING & RELATED INDUSTRIES: 7.64% 10,135 INTEROIL CORPORATION+ 778,469 2,375 MARATHON OIL CORPORATION 74,148 2,035 WD-40 COMPANY 65,853 918,470 -------------- PRIMARY METAL INDUSTRIES: 0.24% 1,805 ALCOA INCORPORATED 29,097 -------------- REAL ESTATE: 4.52% 110,495 CHIMERA INVESTMENT CORPORATION 428,721 4,115 HATTERAS FINANCIAL CORPORATION 115,055 543,776 -------------- RETAIL-DRUGSTORES: 0.13% 720 VITAMIN SHOPPE INCORPORATED+ 16,013 -------------- RUBBER & MISCELLANEOUS PLASTICS PRODUCTS: 0.88% 37,058 INTERTAPE POLYMER GROUP INCORPORATED+ 105,334 --------------
130 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT SMALL/MID CAP VALUE FUND
SHARES SECURITY NAME VALUE ------ ------------- -------------- S&L THRIFTS EASTERN US: 0.06% 600 Northwest Bancshares Incorporated $ 6,792 -------------- STONE, CLAY, GLASS & CONCRETE PRODUCTS: 1.71% 11,495 GENTEX CORPORATION 205,186 -------------- THEATERS & ENTERTAINMENT: 0.72% 5,975 REGAL ENTERTAINMENT GROUP CLASS A 86,279 -------------- TRANSPORTATION EQUIPMENT: 0.55% 4,350 ORBITAL SCIENCES CORPORATION+ 66,381 -------------- WHOLESALE TRADE-DURABLE GOODS: 0.46% 10,980 MERGE HEALTHCARE INCORPORATED+ 36,880 7,790 PATRICK INDUSTRIES INCORPORATED+ 18,930 55,810 -------------- TOTAL COMMON STOCKS (COST $11,361,651) 11,278,448 -------------- INVESTMENT COMPANIES: 0.58% STOCK FUNDS: 0.58% 3,137 KBW REGIONAL BANKING ETF 69,798 TOTAL INVESTMENT COMPANIES (COST $71,510) 69,798 --------------
DIVIDEND YIELD -------- PREFERRED STOCKS: 0.17% 20 CENTER FINANCIAL CORPORATION SERIES B (BANKING) 12.00% 20,000 TOTAL PREFERRED STOCKS (COST $20,000) 20,000 --------------
EXPIRATION DATE ------------- WARRANTS: 0.64% 23,364 PRIMORIS SERVICES CORPORATION+ 10/02/2010 67,756 45,125 SANDSTORM RESOURCES LIMITED+ 04/23/2014 9,924 TOTAL WARRANTS (COST $48,485) 77,680 --------------
YIELD -------- SHORT-TERM INVESTMENTS: 2.07% 249,019 WELLS FARGO ADVANTAGE MONEY MARKET TRUST(u)~+++ 0.10 249,019 -------------- TOTAL SHORT-TERM INVESTMENTS (COST $249,019) 249,019 -------------- TOTAL INVESTMENTS IN SECURITIES (COST $11,750,665)* 97.31% 11,694,945 OTHER ASSETS AND LIABILITIES, NET 2.69 322,700 ------ -------------- TOTAL NET ASSETS 100.00% $ 12,017,645 ------ --------------
- ---------- + Non-income earning securities. (i) Illiquid security (unaudited). (u) Rate shown is the 7-day annualized yield at period end. ~ The Fund invests cash balances that it retains for liquidity purposes in the Wells Fargo Advantage Money Market Trust. The Wells Fargo Advantage Money Market Trust does not pay an investment advisory fee. +++ Short-term security of an affiliate of the Fund with a cost of $249,019. * Cost for federal income tax purposes is $12,288,714 and net unrealized appreciation (depreciation) consists of: Gross unrealized appreciation $ 2,097,197 Gross unrealized depreciation (2,690,966) ----------- Net unrealized depreciation $ (593,769)
The accompanying notes are an integral part of these financial statements. Wells Fargo Advantage Variable Trust Funds 131 Portfolio of Investments--December 31, 2009 VT TOTAL RETURN BOND FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- ASSET BACKED SECURITIES: 6.77% $ 150,000 BANK OF AMERICA AUTO MASTER TRUST SERIES 2009-3A CLASS A4++ 2.67% 12/15/2016 $ 148,899 100,000 BANK OF AMERICA AUTO TRUST SERIES 2009-2A CLASS A4++ 3.03 10/15/2016 101,393 730,000 BANK OF AMERICA CREDIT CARD TRUST SERIES 2007-A4 CLASS A4+/- 0.27 11/15/2019 665,691 199,000 BANK OF AMERICA CREDIT CARD TRUST SERIES 2006-11 CLASS A+/- 0.26 04/15/2016 191,485 428,000 CAPITAL ONE MULTI-ASSET EXECUTION TRUST SERIES 2008-A3 CLASS A3 5.05 02/15/2016 459,331 111,000 CITIBANK CREDIT CARD ISSUANCE TRUST SERIES 2008-A5 CLASS A5 4.85 04/22/2015 118,937 682,000 CITIBANK CREDIT CARD ISSUANCE TRUST SERIES 2009 CLASS A5 2.25 12/23/2014 678,396 44,874 CITIGROUP MORTGAGE LOAN TRUST INCORPORATED SERIES 2007-AHL1 CLASS A2A+/- 0.27 12/25/2036 37,795 119,000 DISCOVER CARD MASTER TRUST SERIES 2006-3 CLASS A1+/- 0.26 03/15/2014 117,565 123,000 DISCOVER CARD MASTER TRUST SERIES 2009-A1 CLASS A1+/- 1.53 12/15/2014 123,603 251,000 DOMINOS PIZZA MASTER ISSUER LLC SERIES 2007-1 CLASS A2++(i) 5.26 04/25/2037 215,121 100,000 HARLEY DAVIDSON MOTORCYCLE TRUST SERIES 2006-3 CLASS 4A 5.22 06/15/2013 103,277 112,000 HARLEY DAVIDSON MOTORCYCLE TRUST SERIES 2008-1 CLASS A3A 4.25 02/15/2013 114,364 209,000 HARLEY DAVIDSON MOTORCYCLE TRUST SERIES 2009-1 CLASS A4 4.55 01/15/2017 218,101 101,000 HARLEY DAVIDSON MOTORCYCLE TRUST SERIES 2009-3 CLASS A4 2.54 04/15/2017 100,890 64,000 HYUNDAI AUTO RECEIVABLES TRUST SERIES 2009-A CLASS A4 3.15 03/15/2016 64,806 328,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2002-CIB4 CLASS A3 6.16 05/12/2034 345,339 234,000 MBNA CREDIT CARD MASTER TRUST SERIES 1997-B CLASS A+/- 0.39 08/15/2014 229,306 25,846 MORGAN STANLEY ABS CAPITAL I SERIES 2007-HE2 CLASS A2A+/- 0.27 01/25/2037 24,382 23,204 MORGAN STANLEY HOME EQUITY LOANS SERIES 2007-1 CLASS A1+/- 0.28 12/25/2036 22,545 46,567 MORGAN STANLEY MORTGAGE LOAN TRUST SERIES 2007-6XS CLASS 2A1S+/- 0.34 02/25/2047 35,141 110,000 NISSAN AUTO RECEIVABLES OWNER TRUST SERIES 2009-A CLASS A4 4.74 08/17/2015 116,822 141,000 NORDSTROM CREDIT CARD MASTER TRUST SERIES 2007-2 CLASS A+/-++ 0.29 05/15/2015 132,797 41,363 SLM STUDENT LOAN TRUST SERIES 2002-5 CLASS A4L+/- 0.40 09/17/2018 41,002 33,634 SLM STUDENT LOAN TRUST SERIES 2003-3 CLASS A4+/- 0.47 12/15/2017 33,398 31,854 SLM STUDENT LOAN TRUST SERIES 2003-6 CLASS A4+/- 0.45 12/17/2018 31,661 535,000 SLM STUDENT LOAN TRUST SERIES 2008-1 CLASS A4A+/- 1.85 12/15/2032 560,488 121,000 SLM STUDENT LOAN TRUST SERIES 2008-4 CLASS A4+/- 1.93 07/25/2022 126,084 100,000 SLM STUDENT LOAN TRUST SERIES 2008-5 CLASS A2+/- 1.38 10/25/2016 101,531 252,000 SLM STUDENT LOAN TRUST SERIES 2008-5 CLASS A4+/- 1.98 07/25/2023 263,362 213,000 SLM STUDENT LOAN TRUST SERIES 2008-6 CLASS A4+/- 1.38 07/25/2023 214,646 200,000 SWIFT MASTER AUTO RECEIVABLES TRUST SERIES 2007-1 CLASS A+/- 0.33 06/15/2012 198,213 365,000 TARGET CREDIT CARD MASTER TRUST SERIES 2005-1 CLASS A+/- 0.29 10/27/2014 360,237 24,262 TRIAD AUTO RECEIVABLES OWNER TRUST SERIES 2006-B CLASS A3 5.41 08/12/2011 24,323 115,000 WORLD OMNI AUTO RECEIVABLES TRUST SERIES 2009-A CLASS A4 5.12 05/15/2014 122,453 TOTAL ASSET BACKED SECURITIES (COST $6,386,123) 6,443,384 -------------- COLLATERALIZED MORTGAGE OBLIGATIONS: 23.54% 251,000 AMERICAN TOWER TRUST SERIES 2007-1A CLASS AFX++ 5.42 04/15/2037 257,903 131,000 ASSET SECURITIZATION CORPORATION SERIES 1996-D3 CLASS A2 7.56 10/13/2026 138,338 100,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES 2002-PB2 CLASS B 6.31 06/11/2035 101,857 40,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES 2004-2 CLASS A5 4.58 11/10/2038 39,156 137,000 BANK OF AMERICA COMMERCIAL MORTGAGE INCORPORATED SERIES 2007-2 CLASS A2 5.63 04/10/2049 136,733 68,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2001-TOP4 CLASS A3 5.61 11/15/2033 70,428 92,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2002-PBW1 CLASS A2 4.72 11/11/2035 94,491 177,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2002-T0P8 CLASS A2 4.83 08/15/2038 181,086 51,262 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2003-T12 CLASS A3 4.24 08/13/2039 51,395 44,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2004-CLASS A3 5.47 06/11/2041 44,476 90,223 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2004-PWR4 CLASS A2 5.29 06/11/2041 91,979 45,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2004-PWR6 CLASS A6 4.83 11/11/2041 43,887 106,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2004-T16 CLASS A6 4.75 02/13/2046 102,804 156,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2005 PWR8 CLASS A4 4.67 06/11/2041 149,230 293,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2005-PW10 CLASS A4 5.41 12/11/2040 287,139 77,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2005-PWR9 CLASS AAB 4.80 09/11/2042 77,887
132 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT TOTAL RETURN BOND FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COLLATERALIZED MORTGAGE OBLIGATIONS (continued) $ 268,000 BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES SERIES 2002-TOP6 CLASS A2 6.46% 10/15/2036 $ 281,364 415,000 COMMERCIAL MORTGAGE ASSET TRUST SERIES 1999-C1 CLASS A4 6.98 01/17/2032 447,589 269,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE SERIES 2001-J2A CLASS A2++ 6.10 07/16/2034 280,530 223,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE SERIES 2004-LB2A CLASS A4 4.72 03/10/2039 218,342 109,000 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE SERIES 2004-LB3A CLASS A5 5.31 07/10/2037 107,751 73,378 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2001-CK1 CLASS A3 6.38 12/18/2035 75,273 130,090 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2001-CKN5 CLASS A4 5.44 09/15/2034 134,070 30,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2002-CKN2 CLASS A3 6.13 04/15/2037 31,570 4,894 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2002-CKS4 CLASS A1 4.49 11/15/2036 4,979 399,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2002-CKS4 CLASS A2 5.18 11/15/2036 412,250 63,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2002-CP5 CLASS A2 4.94 12/15/2035 64,630 85,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2003-CK2 CLASS A4 4.80 03/15/2036 86,558 53,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2003-CPN1 CLASS A2 4.60 03/15/2035 53,272 27,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2005-C1 CLASS A4 5.01 02/15/2038 26,498 23,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2005-C1 CLASS A3 4.81 02/15/2038 22,963 24,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2005-C2 CLASS A4 4.83 04/15/2037 23,106 81,000 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORPORATION SERIES 2005-C5 CLASS A4 5.10 08/15/2038 78,035 118,014 DLJ COMMERCIAL MORTGAGE CORPORATION SERIES 2000-CKP1 CLASS A1B 7.18 11/10/2033 120,214 35,099 FHLMC #1B3430+/- 6.15 06/01/2037 37,546 455,043 FHLMC #G03526 5.50 06/01/2036 478,411 166,000 FHLMC MULTIFAMILY STRUCTURED PASS THROUGH CERTIFICATES SERIES K003 CLASS AAB 4.77 05/25/2018 169,259 235,000 FHLMC SERIES 2558 CLASS BD 5.00 01/15/2018 248,551 80,000 FHLMC SERIES 2590 CLASS BY 5.00 03/15/2018 84,489 185,000 FHLMC SERIES 2590 CLASS NU 5.00 06/15/2017 192,979 53,000 FHLMC SERIES 2676 CLASS CY 4.00 09/15/2018 54,433 107,000 FHLMC SERIES 2690 CLASS TV 4.50 11/15/2025 107,617 281,000 FHLMC SERIES 2694 CLASS QG 4.50 01/15/2029 293,115 35,354 FHLMC SERIES 2727 CLASS PW 3.57 06/15/2029 36,060 91,000 FHLMC SERIES 2765 CLASS CT 4.00 03/15/2019 91,927 201,000 FHLMC SERIES 2790 CLASS TN 4.00 05/15/2024 199,494 191,000 FHLMC SERIES 2843 CLASS BC 5.00 08/15/2019 201,645 104,000 FHLMC SERIES 2875 CLASS HB 4.00 10/15/2019 103,643 1,000 FHLMC SERIES 2985 CLASS JR 4.50 06/15/2025 1,009 2,000 FHLMC SERIES 3008 CLASS JM 4.50 07/15/2025 2,016 363,517 FHLMC SERIES 3028 CLASS PG 5.50 09/15/2035 385,453 5,380 FHLMC SERIES 3052 CLASS MH 5.25 10/15/2034 5,623 10,000 FHLMC SERIES 3234 CLASS MC 4.50 10/15/2036 9,595 193,000 FHLMC SERIES 3289 CLASS PC 5.00 12/15/2032 201,877 73,770 FHLMC SERIES 3325 CLASS JL 5.50 06/15/2037 78,114 178,000 FHLMC SERIES 3372 CLASS BD 4.50 10/15/2022 180,717 29,119 FHLMC SERIES 3465 CLASS HA 4.00 07/15/2017 30,175 267,000 FHLMC SERIES K004 CLASS A2 4.19 08/25/2019 260,086 64,935 FIRST HORIZON ALTERNATIVE MORTGAGE SECURITY SERIES 2006-FA6 CLASS 2A10 6.00 11/25/2036 52,085 53,939 FIRST UNION NATIONAL BANK COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE SERIES 2002-C1 CLASS A2 6.14 02/12/2034 56,414 87,845 FIRST UNION NATIONAL BANK COMMERCIAL MORTGAGE SERIES 2000-C2 CLASS A2 7.20 10/15/2032 89,770 111,000 FIRST UNION NATIONAL BANK COMMERCIAL MORTGAGE SERIES 2001-C4 CLASS B 6.42 12/12/2033 113,044 910,902 FNMA SERIES 2001-81 CLASS HE 6.50 01/25/2032 975,519 148,000 FNMA SERIES 2002-94 CLASS HQ 4.50 01/25/2018 154,764 47,000 FNMA SERIES 2003-108 CLASS BE 4.00 11/25/2018 48,059 39,000 FNMA SERIES 2003-125 CLASS AY 4.00 12/25/2018 39,609 184,000 FNMA SERIES 2003-3 CLASS HJ 5.00 02/25/2018 195,029 98,921 FNMA SERIES 2004-60 CLASS PA 5.50 04/25/2034 104,637 33,000 FNMA SERIES 2004-80 CLASS LE 4.00 11/25/2019 33,220 40,000 FNMA SERIES 2004-81 CLASS KE 4.50 11/25/2019 41,136 84,945 FNMA SERIES 2005-58 CLASS MA 5.50 07/25/2035 90,285
Wells Fargo Advantage Variable Trust Funds 133 Portfolio of Investments--December 31, 2009 VT TOTAL RETURN BOND FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COLLATERALIZED MORTGAGE OBLIGATIONS (continued) $ 206,000 FNMA SERIES 2007-113 CLASS DB 4.50% 12/25/2022 $ 208,194 378,760 FNMA SERIES 2007-39 CLASS NA 4.25 01/25/2037 390,361 134,912 FNMA SERIES 2007-77 CLASS MH 6.00 12/25/2036 144,300 39,000 FNMA SERIES 2008-66 CLASS B 5.00 08/25/2023 40,209 24,928 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2001-2 CLASS A3 6.03 08/11/2033 25,173 5,559 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2001-3 CLASS A1 5.56 06/10/2038 5,676 103,000 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2002-1A CLASS A3 6.27 12/10/2035 108,536 399,000 GE CAPITAL COMMERCIAL MORTGAGE CORPORATION SERIES 2005-C4 CLASS A4 5.33 11/10/2045 389,660 109,000 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2002-C3 CLASS A2 4.93 07/10/2039 111,258 79,000 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2003-C2 CLASS A2 5.48 05/10/2040 81,704 626,000 GMAC COMMERCIAL MORTGAGE SECURITIES INCORPORATED SERIES 2003-C3 CLASS A4 5.02 04/10/2040 636,756 2,000,000 GNMA%% 4.50 01/01/2040 1,998,130 127,000 GNMA SERIES 2006-37 CLASS JG 5.00 07/20/2036 131,222 25,000 GREENWICH CAPITAL COMMERCIAL FUNDING CORPORATION SERIES 2005-GG CLASS AAB 5.19 04/10/2037 25,294 68,000 GREENWICH CAPITAL COMMERCIAL FUNDING CORPORATION SERIES 2005-GG3 CLASS A4 4.80 08/10/2042 65,644 369,000 GREENWICH CAPITAL COMMERCIAL FUNDING CORPORATION SERIES 2005-GG5 CLASS A5 5.22 04/10/2037 349,520 251,000 GREENWICH CAPITAL COMMERCIAL FUNDING CORPORATION SERIES 2006-GG7 CLASS A4 5.92 07/10/2038 228,847 67,000 GREENWICH CAPITAL COMMERCIAL FUNDING CORPORATION SERIES 2007-GG1 CLASS A6 5.14 06/10/2036 68,184 336,000 GS MORTGAGE SECURITIES CORPORATION II SERIES 2001-GL3A CLASS A2++ 6.45 08/05/2018 352,380 61,097 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES 2001 CLASS A3 6.26 03/15/2033 62,852 170,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2009-IWST CLASS A2++ 5.63 12/05/2019 167,980 7,902 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION PASS-THROUGH CERTIFICATE SERIES 2008 C2 CLASS A 5.02 02/12/2051 8,056 29,321 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2000-C10 CLASS A2 7.37 08/15/2032 29,311 168,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2001-CIB3 CLASS A3 6.47 11/15/2035 176,518 76,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2002-CIB5 CLASS A2 5.16 10/12/2037 78,347 218,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2003-PM1A CLASS A4 5.33 08/12/2040 222,735 34,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2004-CB9 CLASS A4 5.38 06/12/2041 34,242 77,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2005-LDP4 CLASS A4 4.92 10/15/2042 74,030 124,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2006 CLASS A4 5.48 12/12/2044 119,438 140,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2006-LDP7 CLASS A2 5.86 04/15/2045 143,487 64,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2007-CB19 CLASS A2 5.75 02/12/2049 65,673 447,000 JPMORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORPORATION SERIES 2007-LDPX CLASS A2S 5.31 01/15/2049 432,077 38,123 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2000-C4 CLASS A2 7.37 08/15/2026 38,696 62,556 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2000-C5 CLASS A2 6.51 12/15/2026 64,151 31,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2001-C2 CLASS A2 6.65 11/15/2027 32,253 200,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2002-C2 CLASS A4 5.59 06/15/2031 209,225 58,762 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2002-C4 CLASS A4 4.56 09/15/2026 60,323 125,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2002-C4 CLASS A5 4.85 09/15/2031 128,695 33,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2003-C3 CLASS A4 4.17 05/15/2032 32,699 34,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2003-C8 CLASS A4 5.12 11/15/2032 33,477 51,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2004-C7 CLASS A5 4.63 10/15/2029 49,629 108,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2007-C1 CLASS A3 5.40 02/15/2040 106,568 24,000 LEHMAN BROTHERS UBS COMMERCIAL MORTGAGE TRUST SERIES 2007-C1 CLASS AAB 5.40 02/15/2040 23,022 139,000 MERRILL LYNCH COUNTRYWIDE COMMERCIAL MORTGAGE TRUST SERIES 2006-1 CLASS A2 5.44 02/12/2039 141,067 101,000 MERRILL LYNCH MORTGAGE TRUST SERIES 2003-KEY1 CLASS A4 5.24 11/12/2035 102,490 76,000 MERRILL LYNCH MORTGAGE TRUST SERIES 2005-CIP1 CLASS A3A 4.95 07/12/2038 76,476 25,000 MORGAN STANLEY CAPITAL I SERIES 2003 IQ4 CLASS A2 4.07 05/15/2040 24,385 129,000 MORGAN STANLEY CAPITAL I SERIES 2003-T11 CLASS A4 5.15 06/13/2041 132,373 387,000 MORGAN STANLEY CAPITAL I SERIES 2004-HQ4 CLASS A7 4.97 04/14/2040 377,643 253,000 MORGAN STANLEY CAPITAL I SERIES 2004-IQ7 CLASS A4 5.40 06/15/2038 254,063 60,000 MORGAN STANLEY CAPITAL I SERIES 2004-T15 CLASS A4 5.27 06/13/2041 60,098 40,000 MORGAN STANLEY CAPITAL I SERIES 2005-HQ5 CLASS A4 5.17 01/14/2042 39,427 260,000 MORGAN STANLEY CAPITAL I SERIES 2005-HQ6 CLASS A4A 4.99 08/13/2042 251,674 41,000 MORGAN STANLEY CAPITAL I SERIES 2005-T17 CLASS A5 4.78 12/13/2041 40,253 44,000 MORGAN STANLEY CAPITAL I SERIES 2006-HQ8 CLASS A2 5.37 03/12/2044 44,735
134 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT TOTAL RETURN BOND FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COLLATERALIZED MORTGAGE OBLIGATIONS (continued) $ 162,000 MORGAN STANLEY CAPITAL I SERIES 2006-HQ8 CLASS A4 5.39% 03/12/2044 $ 156,226 51,000 MORGAN STANLEY CAPITAL I SERIES 2007-HQ11 CLASS A31 5.44 02/12/2044 50,478 388,075 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2001-TOP5 CLASS A4 6.39 10/15/2035 406,154 35,523 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2002-HQ CLASS A3 6.51 04/15/2034 37,464 33,086 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2002-IQ2 CLASS A4 5.74 12/15/2035 34,564 383,000 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2003-HQ2 CLASS A2 4.92 03/12/2035 389,425 143,467 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2003-IQ5 CLASS A4 5.01 04/15/2038 146,719 281,000 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2005-HQ5 CLASS AAB 5.04 01/14/2042 285,990 150,000 MORGAN STANLEY DEAN WITTER CAPITAL I SERIES 2005-HQ7 CLASS AAB 5.18 11/14/2042 153,094 79,000 MORGAN STANLEY DEAN WITTER CAPTIAL I SERIES 2003-TOP9 CLASS A2 4.74 11/13/2036 80,330 276,462 NOMURA ASSET SECURITIES CORPORATION SERIES 1998-D6 CLASS A1C 6.69 03/15/2030 293,690 180,791 SALOMON BROTHERS MORTGAGE SECURITIES SERIES 2000-C3 CLASS A2 6.59 12/18/2033 183,963 117,224 SALOMON BROTHERS MORTGAGE SECURITIES VII SERIES 2002-KEY2 CLASS A2 4.47 03/18/2036 120,036 467,010 US BANK NA SERIES 2007-1 CLASS A 5.92 05/25/2012 491,552 167,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2002-C1 CLASS A4 6.29 04/15/2034 175,955 81,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C6 CLASS A3 4.96 08/15/2035 80,723 23,889 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C7 CLASS A1++ 4.24 10/15/2035 24,043 116,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2003-C8 CLASS A3 4.45 11/15/2035 116,008 91,000 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2004-C11 CLASS A4 5.03 01/15/2041 87,022 TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (COST $21,738,618) 22,397,840 -------------- CORPORATE BONDS & NOTES: 17.93% BANKING: 1.92% 425,000 ACHMEA HYPOTHEEKBANK NV++ 3.20 11/03/2014 424,177 170,000 COMMONWEALTH BANK OF AUSTRALIA++ 3.75 10/15/2014 170,413 170,000 COMMONWEALTH BANK OF AUSTRALIA++ 5.00 10/15/2019 168,781 285,000 NIBC BANK NV++ 2.80 12/02/2014 277,328 125,000 NIBC BANK NV++ 4.88 11/19/2019 123,376 165,000 NORDEA BANK AB++ 2.50 11/13/2012 164,389 195,000 NORDEA BANK AB++ 3.70 11/13/2014 194,624 300,000 WESTPAC BANKING CORPORATION 2.25 11/19/2012 299,293 1,822,381 -------------- BIOTECHNOLOGY: 0.20% 175,000 AMGEN INCORPORATED 6.40 02/01/2039 192,022 -------------- BREWERY: 0.38% 310,000 ANHEUSER-BUSCH INBEV WORLDWIDE INCORPORATED++ 7.75 01/15/2019 362,946 -------------- CHEMICALS: 0.60% 200,000 DOW CHEMICAL COMPANY 4.85 08/15/2012 210,192 305,000 DOW CHEMICAL COMPANY 8.55 05/15/2019 363,909 574,101 -------------- COMMUNICATIONS: 0.67% 198,000 COMCAST CABLE COMMUNICATIONS HOLDINGS INCORPORATED 8.38 03/15/2013 228,234 165,000 GRUPO TELEVISA SA++ 6.63 01/15/2040 163,173 235,000 QWEST CORPORATION 7.50 10/01/2014 244,106 635,513 -------------- COMPUTER HARDWARE: 0.08% 75,000 DELL INCORPORATED 5.88 06/15/2019 79,368 --------------
Wells Fargo Advantage Variable Trust Funds 135 Portfolio of Investments--December 31, 2009 VT TOTAL RETURN BOND FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- DEPOSITORY INSTITUTIONS: 2.01% $ 410,000 BANK OF AMERICA CORPORATION 7.38% 05/15/2014 $ 465,233 125,000 BANK OF AMERICA CORPORATION 6.00 09/01/2017 129,741 135,000 BANK OF AMERICA CORPORATION 5.75 12/01/2017 138,242 250,000 CAPITAL ONE BANK USA NA 8.80 07/15/2019 295,417 370,000 CITIGROUP INCORPORATED 1.88 10/22/2012 368,602 185,000 CITIGROUP INCORPORATED 6.38 08/12/2014 193,678 110,000 JPMORGAN CHASE & COMPANY 5.38 10/01/2012 119,034 200,000 MORGAN STANLEY 5.63 09/23/2019 201,462 1,911,409 -------------- ELECTRIC UTILITIES: 0.45% 60,000 FIRSTENERGY SOLUTIONS COMPANY 4.80 02/15/2015 61,242 185,000 FIRSTENERGY SOLUTIONS COMPANY 6.05 08/15/2021 186,629 75,000 FIRSTENERGY SOLUTIONS COMPANY 6.80 08/15/2039 75,750 100,000 PROGRESS ENERGY INCORPORATED 6.85 04/15/2012 108,549 432,170 -------------- ELECTRIC, GAS & SANITARY SERVICES: 1.26% 375,000 DOMINION RESOURCES INCORPORATED PUTTABLESS 8.88 01/15/2019 467,330 215,000 DPL INCORPORATED 6.88 09/01/2011 229,776 165,000 DUKE ENERGY CORPORATION 6.30 02/01/2014 181,437 300,000 NEVADA POWER COMPANY SERIES A 8.25 06/01/2011 324,286 1,202,829 -------------- ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT: 0.50% 50,000 CISCO SYSTEMS INCORPORATED 5.90 02/15/2039 50,554 50,000 EXELON GENERATION COMPANY LLC 5.20 10/01/2019 50,022 100,000 EXELON GENERATION COMPANY LLC 6.25 10/01/2039 101,883 260,000 HEWLETT-PACKARD COMPANY 4.75 06/02/2014 277,643 480,102 -------------- HEALTH SERVICES: 0.18% 185,000 COVENTRY HEALTH CARE INCORPORATED 5.95 03/15/2017 167,754 -------------- INSURANCE CARRIERS: 0.33% 116,000 LIBERTY MUTUAL GROUP++(i) 7.50 08/15/2036 106,204 200,000 UNITEDHEALTH GROUP INCORPORATED 6.88 02/15/2038 206,710 312,914 -------------- MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS: 0.18% 170,000 VALE OVERSEAS LIMITED 6.88 11/10/2039 171,143 -------------- MOTION PICTURES: 0.10% 85,000 NEWS AMERICA INCORPORATED++ 6.90 08/15/2039 92,724 -------------- NON-DEPOSITORY CREDIT INSTITUTIONS: 1.12% 145,000 AMERICAN EXPRESS COMPANY 7.25 05/20/2014 163,614 125,000 AMERICAN EXPRESS COMPANY 8.15 03/19/2038 156,395 160,000 CREDIT SUISSE NEW YORK 6.00 02/15/2018 167,414 300,000 JPMORGAN CHASE BANK NATIONAL SERIES BKNT 6.00 10/01/2017 321,202 185,000 JPMORGAN CHASE CAPITAL XXV 6.80 10/01/2037 183,809 70,000 PRIVATE EXPORT FUNDING CORPORATION 3.05 10/15/2014 69,533 1,061,967 --------------
136 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT TOTAL RETURN BOND FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- OIL & GAS EXTRACTION: 0.53% $ 215,000 ANADARKO PETROLEUM CORPORATION 8.70% 03/15/2019 $ 267,442 135,000 PETROBRAS INTERNATIONAL FINANCE COMPANY 6.88 01/20/2040 138,726 85,000 VALERO ENERGY CORPORATION 9.38 03/15/2019 101,099 507,267 -------------- PHARMACEUTICALS: 0.33% 289,000 PFIZER INCORPORATED 5.35 03/15/2015 315,850 -------------- PIPELINES: 0.85% 125,000 ENERGY TRANSFER PARTNERS LP 8.50 04/15/2014 144,287 180,000 ENERGY TRANSFER PARTNERS LP 9.00 04/15/2019 214,556 430,000 KINDER MORGAN INCORPORATED 6.50 09/01/2012 447,200 806,043 -------------- REAL ESTATE: 0.58% 175,000 WEA FINANCE LLC++ 7.50 06/02/2014 196,927 215,000 WEA FINANCE LLC++ 7.13 04/15/2018 235,068 110,000 WEA FINANCE LLC++ 6.75 09/02/2019 118,112 550,107 -------------- REAL ESTATE INVESTMENT TRUSTS (REITS): 0.44% 60,000 HCP INCORPORATED SERIES MTN 6.30 09/15/2016 58,563 65,000 HCP INCORPORATED SERIES MTN 6.70 01/30/2018 63,059 195,000 HEALTH CARE PROPERTY INVESTORS INCORPORATED 5.65 12/15/2013 195,339 40,000 HEALTH CARE PROPERTY INVESTORS INCORPORATED 6.00 01/30/2017 37,644 60,000 MACK-CALI REALTY CORPORATION 7.75 08/15/2019 62,085 416,690 -------------- SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES: 2.49% 100,000 BEAR STEARNS COMPANIES INCORPORATED SERIES MTN 6.95 08/10/2012 111,728 375,000 GOLDMAN SACHS CAPITAL II 5.79 12/29/2049 290,625 265,000 GOLDMAN SACHS GROUP INCORPORATED 5.45 11/01/2012 284,922 120,000 GOLDMAN SACHS GROUP INCORPORATED 5.13 01/15/2015 126,090 260,000 GOLDMAN SACHS GROUP INCORPORATED 6.75 10/01/2037 267,251 270,000 LAZARD GROUP LLC 7.13 05/15/2015 280,299 260,000 LAZARD GROUP LLC 6.85 06/15/2017 261,660 270,000 MORGAN STANLEY 6.00 05/13/2014 290,305 115,000 MORGAN STANLEY 7.25 04/01/2032 130,813 120,000 MORGAN STANLEY SERIES MTN 5.25 11/02/2012 127,674 195,000 MORGAN STANLEY SERIES MTN 5.95 12/28/2017 201,131 2,372,498 -------------- TELECOMMUNICATIONS: 1.87% 70,000 AMERICA MOVIL SAB DE CV 5.55 02/01/2014 75,969 296,000 AMERICA MOVIL SAB DE CV++ 5.00 10/16/2019 289,422 430,000 CELLCO PARTNERSHIP / VERIZON WIRELESS CAPITAL LLC 7.38 11/15/2013 493,926 265,000 CELLCO PARTNERSHIP / VERIZON WIRELESS CAPITAL LLC 3.75 05/20/2011 273,259 140,000 CELLCO PARTNERSHIP / VERIZON WIRELESS CAPITAL LLC 8.50 11/15/2018 173,653 255,000 CISCO SYSTEMS INCORPORATED 4.45 01/15/2020 250,151 230,000 CISCO SYSTEMS INCORPORATED 5.50 01/15/2040 219,928 1,776,308 -------------- TOBACCO PRODUCTS: 0.36% 275,000 ALTRIA GROUP INCORPORATED 9.70 11/10/2018 339,946 --------------
Wells Fargo Advantage Variable Trust Funds 137 Portfolio of Investments--December 31, 2009 VT TOTAL RETURN BOND FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- WHOLESALE TRADE NON-DURABLE GOODS: 0.50% $ 110,000 CAREFUSION CORPORATION++ 4.13% 08/01/2012 $ 113,401 205,000 CAREFUSION CORPORATION++ 5.13 08/01/2014 215,499 135,000 CAREFUSION CORPORATION++ 6.38 08/01/2019 144,520 473,420 -------------- TOTAL CORPORATE BONDS & NOTES (COST $16,083,642) 17,057,472 -------------- YANKEE BONDS - CORPORATE: 7.35% 195,000 BARCLAYS BANK PLC SERIES 1 5.00 09/22/2016 199,253 585,000 BP CAPITAL MARKETS PLC 3.88 03/10/2015 601,037 100,000 BRAZIL FEDERATIVE REPUBLIC GLOBAL BOND 5.88 01/15/2019 106,500 150,000 BRITISH SKY BROADCASTING GROUP PLC++ 9.50 11/15/2018 192,305 165,000 BRITISH TELECOM PLC 9.63 12/15/2030 210,246 150,000 CENOVUS ENERGY INCORPORATED++ 5.70 10/15/2019 156,460 190,000 CREDIT SUISSE NEW YORK 5.00 05/15/2013 202,623 185,000 ENEL FINANCE INTERNATIONAL SA++ 6.00 10/07/2039 185,979 110,000 ENEL FINANCIAL INTERNATIONAL SA++ 5.13 10/07/2019 110,679 105,000 EXPORT-IMPORT BANK OF KOREA 5.50 10/17/2012 111,725 205,000 EXPORT-IMPORT BANK OF KOREA 5.88 01/14/2015 219,988 140,000 FEDERAL REPUBLIC OF BRAZIL 5.63 01/07/2041 131,950 110,000 FRANCE TELECOM SA 7.75 03/01/2011 117,895 145,000 HSBC HOLDINGS PLC 6.80 06/01/2038 157,364 95,000 HUSKY ENERGY INCORPORATED 5.90 06/15/2014 103,555 165,000 HUSKY ENERGY INCORPORATED 7.25 12/15/2019 190,674 415,000 HUTCHISON WHAMPOA INTERNATIONAL LIMITED++ 4.63 09/11/2015 418,731 200,000 PETROBRAS INTERNATIONAL FINANCE COMPANY 7.88 03/15/2019 230,562 270,000 RAS LAFFAN LIQUEFIED NATURAL GAS COMPANY LIMITED III++ 5.50 09/30/2014 282,864 155,000 RIO TINTO FINANCE USA LIMITED 5.88 07/15/2013 167,251 140,000 RIO TINTO FINANCE USA LIMITED 9.00 05/01/2019 177,182 70,000 ROGERS CABLE INCORPORATED 5.50 03/15/2014 75,007 315,000 ROGERS WIRELESS INCORPORATED 6.38 03/01/2014 348,766 305,000 SHELL INTERNATIONAL FINANCE 4.00 03/21/2014 318,277 380,000 SOCIETE FINANCEMENT DE L'ECONOMIE FRANCAISE++ 2.88 09/22/2014 377,043 175,000 STATE OF QATAR++ 5.25 01/20/2020 176,313 185,000 SUNCOR ENERGY INCORPORATED 6.50 06/15/2038 194,384 405,000 SWEDISH EXPORT CREDIT 3.25 09/16/2014 404,935 175,000 TELEFONICA EMISIONES SAU 5.98 06/20/2011 185,088 95,000 THOMSON REUTERS CORPORATION 5.95 07/15/2013 103,998 370,000 TOTAL CAPITAL SA 3.13 10/02/2015 365,427 151,000 WESTFIELD GROUP++ 5.40 10/01/2012 160,179 TOTAL YANKEE BONDS - CORPORATE (COST $6,721,684) 6,984,240 -------------- YANKEE BONDS - GOVERNMENT: 1.26% 565,000 PROVINCE OF ONTARIO CANADA 4.10 06/16/2014 589,642 125,000 PROVINCE OF ONTARIO CANADA SERIES G 4.00 10/07/2019 119,693 430,000 REPUBLIC OF KOREA 7.13 04/16/2019 492,210 TOTAL YANKEE BONDS - GOVERNMENT (COST $1,125,747) 1,201,545 -------------- MUNICIPAL BONDS & NOTES: 0.39% CALIFORNIA: 0.25% 255,000 CALIFORNIA STATE BUILD AMERICA BONDS (PROPERTY TAX REVENUE) 7.30 10/01/2039 240,174 --------------
138 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT TOTAL RETURN BOND FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- TEXAS: 0.14% $ 130,000 NORTH TEXAS TOLLWAY BUILD AMERICA BONDS (TOLL ROAD REVENUE) 6.72% 01/01/2049 $ 135,035 -------------- TOTAL MUNICIPAL BONDS & NOTES (COST $387,099) 375,209 -------------- AGENCY SECURITIES: 36.16% FEDERAL HOME LOAN MORTGAGE CORPORATION: 4.79% 3,095 FHLMC #1B7562+/- 5.98 11/01/2037 3,306 38,900 FHLMC #1G0784+/- 5.69 03/01/2036 41,290 83,814 FHLMC #1G1472+/- 5.73 02/01/2037 89,106 169,140 FHLMC #1G1522+/- 6.00 01/01/2037 180,323 29,563 FHLMC #1G1614+/- 5.91 03/01/2037 31,517 30,695 FHLMC #1G1708+/- 6.13 04/01/2037 32,829 62,493 FHLMC #1G1873+/- 5.70 03/01/2036 66,434 28,873 FHLMC #1G1961+/- 5.98 05/01/2037 30,810 148,798 FHLMC #1G1968+/- 5.95 06/01/2037 158,652 55,665 FHLMC #1J1920+/- 5.65 10/01/2038 58,930 348,750 FHLMC #1Q0794+/- 5.81 11/01/2038 371,523 231,365 FHLMC #1Q0809+/- 5.95 03/01/2038 246,446 269,838 FHLMC #1Q0869+/- 5.62 07/01/2038 286,163 302,992 FHLMC #848156+/- 5.86 09/01/2038 322,321 58,304 FHLMC #A78331 6.00 03/01/2034 62,458 129,795 FHLMC #A79090 6.50 07/01/2034 140,422 87,106 FHLMC #E01279 5.50 01/01/2018 92,776 121,607 FHLMC #E01497 5.50 11/01/2018 129,679 98,136 FHLMC #E01539 5.50 12/01/2018 104,650 110,096 FHLMC #G01737 5.00 12/01/2034 113,250 17,839 FHLMC #G02199 5.00 06/01/2036 18,328 83,094 FHLMC #G11594 5.50 08/01/2019 88,583 77,128 FHLMC #G11653 5.50 12/01/2019 82,223 154,329 FHLMC #G11944 5.50 07/01/2020 164,476 194,756 FHLMC #G12827 5.50 02/01/2021 207,318 115,812 FHLMC #G12888 5.50 07/01/2018 123,282 62,590 FHLMC #G13169 5.50 06/01/2020 66,529 150,029 FHLMC #G13330 6.00 10/01/2019 160,715 653,527 FHLMC #G13367 5.50 12/01/2018 695,681 61,484 FHLMC #J02372 5.50 05/01/2020 65,546 57,530 FHLMC #J02373 5.50 05/01/2020 61,331 70,402 FHLMC #J02376 6.00 05/01/2020 75,395 175,162 FHLMC #P10040 5.50 04/01/2018 184,232 4,556,524 -------------- FEDERAL NATIONAL MORTGAGE ASSOCIATION: 29.23% 4,500,000 FNMA%% 4.50 02/01/2040 4,476,096 500,000 FNMA%% 4.50 01/01/2040 499,063 2,500,000 FNMA%% 5.50 01/01/2040 2,616,798 1,000,000 FNMA%% 6.50 01/01/2040 1,070,938 124,592 FNMA #190129 6.00 11/01/2023 132,758 191,356 FNMA #190338 5.50 07/01/2033 201,123 35,515 FNMA #254868 5.00 09/01/2033 36,593 352,631 FNMA #310017 7.00 06/01/2035 389,423 228,023 FNMA #462404+/- 6.28 09/01/2037 243,248 5,684 FNMA #725068 5.50 01/01/2019 6,052 176,010 FNMA #725423 5.50 05/01/2034 184,994 190,905 FNMA #725424 5.50 04/01/2034 200,649 529,629 FNMA #725598 5.50 07/01/2034 556,663 180,210 FNMA #735073 6.00 10/01/2019 192,847
Wells Fargo Advantage Variable Trust Funds 139 Portfolio of Investments--December 31, 2009 VT TOTAL RETURN BOND FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- FEDERAL NATIONAL MORTGAGE ASSOCIATION (continued) $ 473,704 FNMA #735228 5.50% 02/01/2035 $ 497,882 124,457 FNMA #735503 6.00 04/01/2035 132,935 21,380 FNMA #735504 6.00 04/01/2035 22,850 100,866 FNMA #735667 5.00 07/01/2035 103,834 644,069 FNMA #735912 5.50 10/01/2035 676,565 622,933 FNMA #735913 5.50 10/01/2035 654,339 92,099 FNMA #745238 6.00 12/01/2020 98,702 343,709 FNMA #878099 6.00 04/01/2036 365,083 131,214 FNMA #888560 6.00 11/01/2035 140,153 126,986 FNMA #888635 5.50 09/01/2036 133,468 104,016 FNMA #888911+/- 6.12 11/01/2037 111,124 226,629 FNMA #888941+/- 6.02 10/01/2037 241,892 489,915 FNMA #889069 5.50 01/01/2021 521,666 350,635 FNMA #889183 5.50 09/01/2021 373,360 355,123 FNMA #889213 5.50 10/01/2020 378,693 947,227 FNMA #889318 5.50 07/01/2020 1,008,617 303,179 FNMA #889451 6.00 05/01/2038 321,417 346,731 FNMA #889568 5.50 03/01/2020 369,203 1,168,940 FNMA #889585 5.50 09/01/2036 1,228,605 57,901 FNMA #893916+/- 6.27 10/01/2036 61,667 77,368 FNMA #905629+/- 6.11 12/01/2036 82,658 90,425 FNMA #906403+/- 6.01 01/01/2037 96,377 114,900 FNMA #906404+/- 5.92 01/01/2037 122,475 83,044 FNMA #909569+/- 5.88 02/01/2037 88,468 61,131 FNMA #910293+/- 5.93 03/01/2037 65,117 94,958 FNMA #914819+/- 5.98 04/01/2037 101,180 48,668 FNMA #917820+/- 5.67 05/01/2037 51,670 27,990 FNMA #917828+/- 5.74 05/01/2037 29,757 103,914 FNMA #917893+/- 5.59 05/01/2037 110,106 291,391 FNMA #931676 5.50 01/01/2019 310,732 182,370 FNMA #942510 6.00 08/01/2037 193,455 72,410 FNMA #945657+/- 6.23 09/01/2037 76,820 111,047 FNMA #946228+/- 6.12 09/01/2037 118,474 540,100 FNMA #949739 6.00 10/01/2037 572,928 204,676 FNMA #960622 6.00 01/01/2038 217,116 75,614 FNMA #973123+/- 5.60 02/01/2038 79,893 785,134 FNMA #983499 5.50 07/01/2035 825,208 290,721 FNMA #995092 6.50 12/01/2037 310,344 516,646 FNMA #995182 5.50 06/01/2020 550,937 1,286,820 FNMA #995203 5.00 07/01/2035 1,325,894 16,487 FNMA #995226 6.00 11/01/2038 17,489 1,336,660 FNMA #995233 5.50 10/01/2021 1,424,960 425,064 FNMA #995485 6.00 04/01/2035 454,287 237,870 FNMA #995486 6.00 03/01/2036 254,224 242,683 FNMA #995508 6.00 12/01/2035 259,216 126,532 FNMA #995511 5.50 12/01/2018 134,535 262,757 FNMA #995664 4.50 11/01/2033 263,852 129,527 FNMA #AD0211 5.50 05/01/2019 137,720 100,943 FNMA #AD0212 5.50 04/01/2021 107,643 63,000 FNMA #AD0531 5.50 11/01/2023 67,262 157,000 FNMA #AD0584 7.00 01/01/2040 173,608 324,000 FNMA SERIES 2005-16 CLASS PE 5.00 03/25/2034 336,108 367,000 FNMA SERIES 2009-M1 CLASS A2 4.29 07/25/2019 365,525 241,000 FNMA SERIES 2009-M2 CLASS A3 4.00 01/25/2019 233,222 27,808,560 --------------
140 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT TOTAL RETURN BOND FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION: 2.14% $ 1,500,000 GNMA%% 4.50% 01/01/2040 $ 1,493,441 503,126 GNMA #782044 6.50 12/15/2032 540,085 2,033,526 -------------- TOTAL AGENCY SECURITIES (COST $34,009,455) 34,398,610 -------------- US TREASURY SECURITIES: 10.81% US TREASURY BONDS: 3.97% 200,000 US TREASURY BOND 7.13 02/15/2023 256,500 536,000 US TREASURY BOND 6.25 05/15/2030 654,757 1,289,000 US TREASURY BOND<< 5.38 02/15/2031 1,424,345 402,000 US TREASURY BOND 3.50 02/15/2039 329,263 390,000 US TREASURY BOND 4.25 05/15/2039 365,869 460,000 US TREASURY BOND 4.50 08/15/2039 449,578 308,000 US TREASURY BOND 4.38 11/15/2039 294,814 3,775,126 -------------- US TREASURY NOTES: 6.84% 348,000 US TREASURY NOTE 0.88 05/31/2011 348,421 90,000 US TREASURY NOTE 1.00 08/31/2011 90,046 77,000 US TREASURY NOTE 1.38 10/15/2012 76,567 81,000 US TREASURY NOTE 2.13 11/30/2014 79,083 1,719,000 US TREASURY NOTE 2.63 12/31/2014 1,714,032 109,000 US TREASURY NOTE 2.75 11/30/2016 104,938 644,000 US TREASURY NOTE 2.75 02/15/2019 592,883 1,955,000 US TREASURY NOTE 3.63 08/15/2019 1,922,009 1,640,000 US TREASURY NOTE 3.38 11/15/2019 1,577,484 6,505,463 -------------- TOTAL US TREASURY SECURITIES (COST $10,675,652) 10,280,589 --------------
COLLATERAL FOR SECURITIES LENDING: 1.62%
YIELD -------- COLLATERAL INVESTED IN MONEY MARKET FUNDS: 0.21% 50,737 AIM STIT-LIQUID ASSETS PORTFOLIO(u) 0.18 50,737 50,737 BLACKROCK LIQUIDITY FUNDS TEMPFUND PORTFOLIO(u) 0.12 50,737 50,737 DWS MONEY MARKET SERIES INSTITUTIONAL(u) 0.13 50,737 50,746 JPMORGAN PRIME MONEY MARKET FUND(u) 0.14 50,746 202,957 --------------
INTEREST RATE -------- COLLATERAL INVESTED IN OTHER ASSETS: 1.41% 7,353 ANTALIS US FUNDING CORPORATION++(p) 0.28 01/07/2010 7,353 11,030 ANTALIS US FUNDING CORPORATION++(p) 0.29 01/29/2010 11,027 22,059 ATLANTIC ASSET SECURITIZATION CORPORATION++(p) 0.19 01/15/2010 22,058 17,280 BANCO SANTANDER SA (MADRID) 0.08 01/04/2010 17,280 58,825 BANK OF AMERICA REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE 58,825) 0.01 01/04/2010 58,825 17,280 BANK OF IRELAND 0.05 01/04/2010 17,280 17,280 BNP PARIBAS (PARIS) 0.11 01/04/2010 17,280 809 CALCASIEU PARISH LA+/-ss 0.37 12/01/2027 809 17,648 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY+/-ss 0.25 11/01/2026 17,648 2,353 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY+/-ss 0.32 06/01/2028 2,353 13,971 CALYON (NEW YORK) 0.18 01/08/2010 13,971 1,950 COLORADO HOUSING & FINANCE AUTHORITY+/-ss 0.28 10/01/2038 1,950 19,118 COMMERZBANK AG (GRAND CAYMAN) 0.00 01/04/2010 19,118
Wells Fargo Advantage Variable Trust Funds 141 Portfolio of Investments--December 31, 2009 VT TOTAL RETURN BOND FUND
INTEREST PRINCIPAL SECURITY NAME RATE MATURITY DATE VALUE --------- ------------- -------- ------------- -------------- COLLATERAL INVESTED IN OTHER ASSETS (continued) $ 3,677 COOK COUNTY IL+/-ss 0.40% 11/01/2030 $ 3,677 12,868 CREDIT SUISSE FIRST BOSTON REPURCHASE AGREEMENT - 102% COLLATERALIZED BY MORTGAGE BACKED SECURITIES (MATURITY VALUE 12,868) 0.01 01/04/2010 12,868 17,280 DANSKE BANK A/S COPENHAGEN 0.12 01/04/2010 17,280 12,500 DENVER CO CITY & COUNTY SCHOOL DISTRICT+/-ss 0.35 12/15/2037 12,500 20,589 ENI FINANCE USA INCORPORATED++ 0.19 02/04/2010 20,585 7,353 FORTIS BANK NV SA 0.19 01/19/2010 7,353 2,206 GDF SUEZ++ 0.19 01/12/2010 2,206 18,383 GOTHAM FUNDING CORPORATION++(p) 0.18 01/15/2010 18,382 3,677 GOTHAM FUNDING CORPORATION++(p) 0.19 01/05/2010 3,677 22,059 GOVCO INCORPORATED++(p) 0.19 01/12/2010 22,058 303,035 GRYPHON FUNDING LIMITED(i)(a) 0.00 08/05/2010 116,911 10,294 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 05/01/2023 10,294 7,463 GULF COAST WASTE DISPOSAL AUTHORITY+/-ss 0.23 07/01/2034 7,463 12,089 HAMILTON COUNTY OH HOSPITALS+/-ss 0.20 05/15/2037 12,089 1,213 HENRICO COUNTY VA ECONOMIC DEVELOPMENT AUTHORITY+/-ss 0.27 11/01/2042 1,213 5,956 HOUSTON TX UTILITY SYSTEM+/-ss 0.25 05/15/2034 5,956 2,103 ILLINOIS EDUCATIONAL FACILITIES AUTHORITY REVENUES+/-ss 0.28 07/01/2029 2,103 1,471 INDIANA MUNICIPAL POWER AGENCY+/-ss 0.28 01/01/2018 1,471 2,132 ING USA FUNDING LLC 0.20 01/04/2010 2,132 12,868 JPMORGAN CHASE REPURCHASE AGREEMENT - 102% COLLATERALIZED BY US TREASURY SECURITIES (MATURITY VALUE 12,868) 0.01 01/04/2010 12,868 2,206 KANSAS CITY MO SPECIAL OBLIGATION+/-ss 0.28 04/15/2025 2,206 14,339 KOCH RESOURCES LLC++ 0.19 01/25/2010 14,337 8,456 KOCH RESOURCES LLC++ 0.19 01/29/2010 8,455 18,383 LLOYDS TSB BANK PLC 0.18 01/08/2010 18,383 7,353 LMA AMERICAS LLC++(p) 0.19 01/19/2010 7,352 18,236 MASSACHUSETTS HEFA+/-ss 0.22 10/01/2034 18,236 3,640 MATCHPOINT MASTER TRUST++(p) 0.19 01/05/2010 3,640 14,706 MATCHPOINT MASTER TRUST++(p) 0.20 01/27/2010 14,704 2,018 MONTGOMERY COUNTY TN PUBLIC BUILDING+/-ss 0.27 02/01/2036 2,018 1,471 NEW JERSEY STATE TURNPIKE AUTHORITY+/-ss 0.28 01/01/2018 1,471 16,177 NEW YORK STATE DORMITORY AUTHORITY+/-ss 0.25 07/01/2034 16,177 14,706 NEWPORT BEACH CALIFORNIA REVENUE+/-ss 0.22 12/01/2040 14,706 13,419 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.20 01/12/2010 13,419 5,883 NIEUW AMSTERDAM RECEIVABLES CORPORATION++(p) 0.21 01/11/2010 5,882 3,599 NORTH DAKOTA HOUSING FINANCE AGENCY+/-ss 0.29 01/01/2034 3,599 8,088 REGENCY MARKETS #1 LLC++(p) 0.20 01/07/2010 8,088 9,923 SAN ANTONIO TX EDUCATION FACILITIES CORPORATION+/-ss 0.18 12/01/2028 9,923 23,530 SANPAOLO IMI US FINANCIAL COMPANY 0.19 01/19/2010 23,528 15,442 SCALDIS CAPITAL LIMITED++(p) 0.24 01/06/2010 15,441 2,941 SOCIETE GENERALE BANNON LLC 0.18 01/11/2010 2,941 19,118 SOCIETE GENERALE NORTH AMERICA 0.21 02/01/2010 19,115 22,059 STARBIRD FUNDING CORPORATION++(p) 0.19 01/06/2010 22,059 22,059 SUMITOMO TRUST & BANKING COMPANY 0.22 01/05/2010 22,059 5,809 TASMAN FUNDING INCORPORATED++(p) 0.24 01/05/2010 5,809 17,712 TULIP FUNDING CORPORATION++(p) 0.19 01/07/2010 17,712 4,853 TULSA COUNTY OK INDUSTRIAL AUTHORITY REVENUE+/-ss 0.25 07/01/2032 4,853 22,059 UNICREDITO ITALIANO (NEW YORK) 0.25 01/04/2010 22,059 2,206 VERMONT STATE STUDENT ASSISTANCE CORPORATION+/-ss 0.30 12/15/2040 2,206 928,186 VFNC CORPORATION+/-++(i)(a) 0.45 09/30/2010 473,375 11,030 VICTORY RECEIVABLES CORPORATION++(p) 0.19 01/11/2010 11,029 9,559 VICTORY RECEIVABLES CORPORATION++(p) 0.20 01/13/2010 9,558 22,059 YORKTOWN CAPITAL LLC++(p) 0.19 02/03/2010 22,054 1,336,432 -------------- TOTAL COLLATERAL FOR SECURITIES LENDING (COST $1,478,743) 1,539,389 --------------
142 Wells Fargo Advantage Variable Trust Funds Portfolio of Investments--December 31, 2009 VT TOTAL RETURN BOND FUND
SHARES SECURITY NAME YIELD MATURITY DATE VALUE ------ ------------- -------- ------------- -------------- SHORT-TERM INVESTMENTS: 2.59% 2,468,391 WELLS FARGO ADVANTAGE MONEY MARKET TRUST(u)~+++ 0.10% $ 2,468,391 -------------- TOTAL SHORT-TERM INVESTMENTS (COST $2,468,391) 2,468,391 -------------- TOTAL INVESTMENTS IN SECURITIES (COST $101,075,154)* 108.42% 103,146,669 OTHER ASSETS AND LIABILITIES, NET (8.42) (8,012,267) ------ -------------- TOTAL NET ASSETS 100.00% $ 95,134,402 ====== ==============
INTEREST PRINCIPAL RATE --------- -------- TBA SALE COMMITMENTS: (0.56%) $ (500,000) FNMA%% 6.00 01/01/2040 $ (529,531) -------------- TOTAL TBA SALE COMMITMENTS (PROCEEDS RECEIVED $(530,234)) $ (529,531) --------------
- ---------- +/- Variable rate investments. ++ Securities that may be resold to "qualified institutional buyers" under rule 144A or securities offered pursuant to section 4(2) of the Securities Act of 1933, as amended. (i) Illiquid security (unaudited). << All or a portion of this security is on loan. ss These securities are subject to a demand feature which reduces the effective maturity. %% Securities issued on a when-issued (TBA) basis. (p) Asset-backed commercial paper. (a) Security fair valued in accordance with the procedures approved by the Board of Trustees. (u) Rate shown is the 7-day annualized yield at period end. ~ The Fund invests cash balances that it retains for liquidity purposes in the Wells Fargo Advantage Money Market Trust. The Wells Fargo Advantage Money Market Trust does not pay an investment advisory fee. +++ Short-term security of an affiliate of the Fund with a cost of $2,468,391. * Cost for federal income tax purposes is $101,474,348 and net unrealized appreciation (depreciation) consists of: Gross unrealized appreciation $ 2,858,675 Gross unrealized depreciation (1,186,354) ----------- Net unrealized appreciation $ 1,672,321
The accompanying notes are an integral part of these financial statements. THIS PAGE IS INTENTIONALLY LEFT BLANK. 144 Wells Fargo Advantage Variable Trust Funds Statements of Assets and Liabilities--December 31, 2009
VT C&B VT Asset Large Cap Allocation Fund Value Fund --------------- ----------- ASSETS Investments In unaffiliated securities, (including securities on loan) ............... $109,848,541 $14,183,623 Collateral received for securities loaned ................................ 7,205,688 58,985 In affiliated securities ................................................. 3,052,621 494,726 ------------ ----------- Total investments, at value (see cost below) ................................ 120,106,850 14,737,334 ------------ ----------- Cash ........................................................................ 54,870 50,146 Receivable for Fund shares issued ........................................... 9,676 1,013 Receivable for investments sold ............................................. 36,875 0 Receivable for dividends and interest ....................................... 612,307 33,385 Receivable from investment advisor and affiliates ........................... 0 0 Prepaid expenses and other assets ........................................... 0 0 Unrealized appreciation of foreign currency contracts ....................... 0 0 ------------ ----------- Total assets ................................................................... 120,820,578 14,821,878 ------------ ----------- LIABILITIES Payable for daily variation margin on futures contracts ..................... 205,206 0 Due to custodian for foreign currencies, at value ........................... 0 0 Payable for Funds shares redeemed ........................................... 58,940 4,425 Payable for investments purchased ........................................... 12,812 0 Payable upon return of securities loaned .................................... 7,142,111 58,145 Payable to investment advisor and affiliates ................................ 100,160 4,297 Accrued expenses and other liabilities ...................................... 30,507 29,300 Unrealized depreciation of foreign currency contracts ....................... 0 0 ------------ ----------- Total liabilities .............................................................. 7,549,736 96,167 ------------ ----------- TOTAL NET ASSETS ............................................................... $113,270,842 $14,725,711 ============ =========== NET ASSETS CONSIST OF Paid-in capital ............................................................. $146,394,153 $20,748,545 Undistributed/overdistributed net investment income (loss) .................. 91,346 9,051 Accumulated net realized gain (loss) on investments ......................... (32,182,073) (5,316,612) Net unrealized appreciation (depreciation) of investments ................... (2,981,003) (717,070) Net unrealized appreciation of collateral received for securities loaned .... 106,099 1,797 Net unrealized depreciation of foreign currency contracts ................... 0 0 Net unrealized appreciation of futures ...................................... 1,842,320 0 ------------ ----------- TOTAL NET ASSETS ............................................................... $113,270,842 $14,725,711 ============ =========== COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE(1) Net assets .................................................................. $113,270,842 $14,725,711 Shares outstanding .......................................................... 10,757,091 1,653,253 Net asset value and offering price per shares ............................... $ 10.53 $ 8.91 ------------ ----------- Investments at cost ............................................................ $122,981,754 $15,452,607 ------------ ----------- Securities on loan, at value ................................................... $ 7,048,504 $ 57,725 ------------ -----------
- ---------- (1.) Each Fund has an unlimited number of authorized shares. The accompanying notes are an integral part of these financial statements. Wells Fargo Advantage Variable Trust Funds 145 Statements of Assets and Liabilities--December 31, 2009
VT Large VT Large VT Money VT Discovery VT Equity VT International Company Company Market VT Opportunity Fund Income Fund Core Fund Core Fund Growth Fund Fund Fund - ------------ ----------- ---------------- ------------ ------------ ----------- -------------- $ 83,909,894 $53,947,620 $ 18,398,519 $ 10,489,229 $ 68,648,754 $42,700,621 $149,166,856 3,451,671 239,561 0 160,253 1,458,318 0 8,436,242 1,841,012 469,751 113,091 72,484 801,778 0 5,625,428 - ------------ ----------- ------------ ------------ ------------ ----------- ------------ 89,202,577 54,656,932 18,511,610 10,721,966 70,908,850 42,700,621 163,228,526 - ------------ ----------- ------------ ------------ ------------ ----------- ------------ 0 50,982 50,000 50,000 189,310 1,198,871 44,363 472,835 25,735 8,237 98 188 0 46,585 0 0 459,351 0 0 0 78,435 8,645 57,808 27,501 11,490 30,272 5,397 105,103 0 0 4,880 870 0 49,023 0 0 0 0 0 0 0 0 0 0 10,856 0 0 0 0 - ------------ ----------- ------------ ------------ ------------ ----------- ------------ 89,684,057 54,791,457 19,072,435 10,784,424 71,128,620 43,953,912 163,503,012 - ------------ ----------- ------------ ------------ ------------ ----------- ------------ 0 0 0 0 0 0 0 0 0 41,795 0 0 0 0 38,668 45,821 2,644 1,917 99,718 0 209,996 0 0 400,337 0 0 37 0 3,414,831 238,466 0 158,935 1,447,235 0 8,319,374 73,617 42,157 0 0 39,967 0 53,129 32,362 23,929 36,735 27,002 35,494 39,503 138,015 0 0 16,233 0 0 0 0 - ------------ ----------- ------------ ------------ ------------ ----------- ------------ 3,559,478 350,373 497,744 187,854 1,622,414 39,540 8,720,514 - ------------ ----------- ------------ ------------ ------------ ----------- ------------ $ 86,124,579 $54,441,084 $ 18,574,691 $ 10,596,570 $ 69,506,206 $43,914,372 $154,782,498 ============ =========== ============ ============ ============ =========== ============ $119,139,994 $59,751,775 $ 26,613,820 $ 27,400,748 $ 91,144,582 $43,913,100 $210,507,496 0 5,009 120,016 81,904 317,088 (37) 1,094,975 (48,480,471) (4,057,671) (10,603,092) (15,563,428) (30,835,749) 1,309 (86,219,314) 15,386,267 (1,260,371) 2,449,324 (1,325,473) 8,856,582 0 29,149,398 78,789 2,342 0 2,819 23,703 0 249,943 0 0 (5,377) 0 0 0 0 0 0 0 0 0 0 0 - ------------ ----------- ------------ ------------ ------------ ----------- ------------ $ 86,124,579 $54,441,084 $ 18,574,691 $ 10,596,570 $ 69,506,206 $43,914,372 $154,782,498 ============ =========== ============ ============ ============ =========== ============ $ 86,124,579 $54,441,084 $ 18,574,691 $ 10,596,570 $ 69,506,206 $43,914,372 $154,782,498 5,484,431 4,812,252 3,692,486 825,845 7,749,030 43,915,960 10,310,588 $ 15.70 $ 11.31 $ 5.03 $ 12.83 $ 8.97 $ 1.00 $ 15.01 - ------------ ----------- ------------ ------------ ------------ ----------- ------------ $ 73,737,521 $55,914,961 $ 16,062,404 $ 12,044,620 $ 62,028,565 $42,700,621 $133,829,400 - ------------ ----------- ------------ ------------ ------------ ----------- ------------ $ 3,401,507 $ 235,397 $ 0 $ 161,250 $ 1,457,400$ $ 0 $ 8,165,781 - ------------ ----------- ------------ ------------ ------------ ----------- ------------
146 Wells Fargo Advantage Variable Trust Funds Statements of Assets and Liabilities--December 31, 2009
VT Small Cap VT Small/Mid VT Total Return Growth Fund Cap Value Fund Bond Fund ------------ -------------- --------------- ASSETS Investments In unaffiliated securities, (including securities on loan) ............... $183,180,908 $11,445,926 $ 99,138,889 Collateral received for securities loaned ................................ 6,079,991 0 1,539,389 In affiliated securities ................................................. 2,528,987 249,019 2,468,391 ------------ ----------- ------------ Total investments, at value (see cost below) ................................ 191,789,886 11,694,945 103,146,669 ------------ ----------- ------------ Cash ........................................................................ 50,000 40,601 50,000 Receivable for Fund shares issued ........................................... 49,308 328,345 37,168 Receivable for investments sold ............................................. 377,376 22,635 17,182,838 Receivable for dividends and interest ....................................... 16,556 49,347 911,080 Receivable from investment advisor and affiliates ........................... 0 13,573 0 ------------ ----------- ------------ Total assets ................................................................... 192,283,126 12,149,446 121,327,755 ------------ ----------- ------------ LIABILITIES TBA sale commitments, at value .............................................. 0 0 529,531 Due to custodian for foreign currencies, at value ........................... 0 22 0 Payable to custodian for overdrafts ......................................... 0 0 1,443,062 Payable for Funds shares redeemed ........................................... 203,057 15,203 82,645 Payable for investments purchased ........................................... 488,586 85,964 22,420,340 Dividends payable ........................................................... 0 0 25,977 Payable upon return of securities loaned .................................... 6,028,874 0 1,503,048 Payable to investment advisor and affiliates ................................ 169,808 0 74,169 Accrued expenses and other liabilities ...................................... 47,829 30,612 114,581 ------------ ----------- ------------ Total liabilities .............................................................. 6,938,154 131,801 26,193,353 ------------ ----------- ------------ TOTAL NET ASSETS ............................................................... $185,344,972 $12,017,645 $ 95,134,402 ============ =========== ============ NET ASSETS CONSIST OF Paid-in capital ............................................................. $211,628,707 $15,005,877 $ 92,568,147 Undistributed net investment income (loss) .................................. 0 111,069 37,448 Accumulated net realized gain (loss) on investments ......................... (35,404,613) (3,043,559) 456,589 Net unrealized appreciation (depreciation) of investments ................... 9,011,555 (55,742) 2,010,869 Net unrealized appreciation of collateral received for securities loaned .... 109,323 0 60,646 Net unrealized appreciation of TBA sale commitments ......................... 0 0 703 ------------ ----------- ------------ TOTAL NET ASSETS ............................................................... $185,344,972 $12,017,645 $ 95,134,402 ============ =========== ============ COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE(1) Net assets .................................................................. $185,344,972 $12,017,645 $ 95,134,402 Shares outstanding .......................................................... 29,199,651 1,534,198 9,197,313 Net asset value and offering price per shares ............................... $ 6.35 $ 7.83 $ 10.34 ------------ ----------- ------------ Investments at cost ............................................................ $182,669,008 $11,750,665 $101,075,154 ------------ ----------- ------------ Securities on loan, at value ................................................... $ 5,962,666 $ 0 $ 1,424,345 ------------ ----------- ------------ Proceeds received from TBA sale commitments .................................... $ 0 $ 0 $ 530,234 ------------ ----------- ------------
- ---------- (1.) Each Fund has an unlimited number of authorized shares. The accompanying notes are an integral part of these financial statements. THIS PAGE IS INTENTIONALLY LEFT BLANK. 148 Wells Fargo Advantage Variable Trust Funds Statements of Operations--For the Year Ended December 31, 2009
VT Asset VT C&B Allocation Large Cap Fund Value Fund ----------- ----------- INVESTMENT INCOME Dividends(1) ............................................ $ 1,512,307 $ 393,470 Interest ................................................ 1,680,844 0 Income from affiliated securities ....................... 31,557 1,549 Securities lending income ............................... 114,295 2,139 ----------- ----------- 3,339,003 397,158 ----------- ----------- EXPENSES Advisory fees ........................................... 613,267 85,621 Administration fees ..................................... 178,405 24,908 Custody fees ............................................ 22,768 3,094 Accounting fees ......................................... 23,648 18,985 Distribution fees ....................................... 278,758 38,919 Professional fees ....................................... 36,900 38,379 Shareholder reports ..................................... 12,267 29,792 Trustees' fees .......................................... 10,578 10,578 Government guarantee program ............................ 0 0 Other fees and expenses ................................. 16,637 3,527 ----------- ----------- Total expenses ............................................. 1,193,228 253,803 ----------- ----------- LESS Waived fees ............................................. (80,324) (98,129) Net expenses ............................................ 1,112,904 155,674 ----------- ----------- Net investment income (loss) ............................... 2,226,099 241,484 ----------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS NET REALIZED GAIN (LOSS) FROM Unaffiliated securities ................................. (3,558,570) (2,804,171) Collateral received for securities loaned ............... (1,031,601) (14,993) Futures transactions .................................... 5,857,291 0 Affiliated securities ................................... (105,776) 0 ----------- ----------- Net realized gain(loss) from investments ................... 1,161,344 (2,819,164) ----------- ----------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF Unaffiliated securities ................................. 6,347,793 6,097,327 Collateral received for securities loaned ............... 1,157,942 15,474 Foreign currency contracts .............................. 0 0 Futures transactions .................................... 4,403,130 0 Affiliated securities ................................... (530,566) 0 ----------- ----------- Net change in unrealized appreciation of investments ....... 11,378,299 6,112,801 ----------- ----------- Net realized and unrealized gain on investments ............ 12,539,643 3,293,637 ----------- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ....... $14,765,742 $ 3,535,121 ----------- ----------- (1.) Net of foreign withholding taxes ..................... $ 139 $ 2,421
The accompanying notes are an integral part of these financial statements. Wells Fargo Advantage Variable Trust Funds 149 Statements of Operations--For the Year Ended December 31, 2009
VT Large VT Large VT Money VT Discovery VT Equity VT International Company Company Market VT Opportunity Fund Income Fund Core Fund Core Fund Growth Fund Fund Fund - ------------ ----------- ---------------- ----------- ----------- --------- -------------- $ 450,611 $1,308,773 $ 457,952 $ 178,159 $ 865,037 $ 0 $ 4,187,423 0 0 0 0 0 386,545 0 14,736 3,083 1,830 402 2,605 0 83,432 81,342 35,104 772 1,545 31,076 0 57,202 - ------------ ---------- ----------- ----------- ----------- --------- ------------ 546,689 1,346,960 460,554 180,106 898,718 386,545 4,328,057 - ------------ ---------- ----------- ----------- ----------- --------- ------------ 755,809 252,806 131,783 54,010 319,876 160,428 2,230,818 161,239 73,544 28,114 15,712 93,055 85,561 475,908 19,921 8,811 23,380 2,000 10,866 10,695 57,822 19,695 20,274 17,733 18,642 20,842 21,787 25,726 251,178 114,912 43,928 24,550 145,398 133,690 743,606 42,309 39,356 40,936 43,139 43,572 37,767 55,364 84,489 16,203 32,160 12,739 48,888 104,864 257,245 10,578 10,578 10,578 10,578 10,578 10,578 10,578 0 0 0 0 0 14,992 0 16,768 4,403 28,975 4,376 4,605 4,481 68,567 - ------------ ---------- ----------- ----------- ----------- --------- ------------ 1,361,986 540,887 357,587 185,746 697,680 584,843 3,925,634 - ------------ ---------- ----------- ----------- ----------- --------- ------------ (203,835) (81,238) (181,776) (87,547) (116,082) (260,454) (743,001) 1,158,151 459,649 175,811 98,199 581,598 324,389 3,182,633 - ------------ ---------- ----------- ----------- ----------- --------- ------------ (611,462) 887,311 284,743 81,907 317,120 62,156 1,145,424 - ------------ ---------- ----------- ----------- ----------- --------- ------------ (15,274,204) (257,365) (7,224,401) (2,336,339) (1,905,521) 5,749 (34,009,381) (739,330) (63,941) (1,657) (17,129) (99,386) 0 (1,706,332) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 - ------------ ---------- ----------- ----------- ----------- --------- ------------ (16,013,534) (321,306) (7,226,058) (2,353,468) (2,004,907) 5,749 (35,715,713) - ------------ ---------- ----------- ----------- ----------- --------- ------------ 50,150,763 7,544,178 8,968,168 5,371,069 23,127,247 0 156,964,130 760,546 63,862 1,466 18,064 106,078 0 1,828,823 0 0 (5,377) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 - ------------ ---------- ----------- ----------- ----------- --------- ------------ 50,911,309 7,608,040 8,964,257 5,389,133 23,233,325 0 158,792,953 - ------------ ---------- ----------- ----------- ----------- --------- ------------ 34,897,775 7,286,734 1,738,199 3,035,665 21,228,418 5,749 123,077,240 - ------------ ---------- ----------- ----------- ----------- --------- ------------ $ 34,286,313 $8,174,045 $ 2,022,942 $ 3,117,572 $21,545,538 $ 67,905 $124,222,664 - ------------ ---------- ----------- ----------- ----------- --------- ------------ $ 0 $ 1,959 $ 57,509 $ 144 $ 6,288 $ 0 $ 11,062
150 Wells Fargo Advantage Variable Trust Funds Statements of Operations--For the Year Ended December 31, 2009
VT Small Cap VT Small/Mid VT Total Return Growth Fund Cap Value Fund Bond Fund ------------ -------------- --------------- INVESTMENT INCOME Dividends(1) ............................................ $ 616,254 $ 224,686 $ 24,968 Interest ................................................ 0 0 4,437,403 Income from affiliated securities ....................... 14,847 1,415 11,529 Securities lending income ............................... 76,287 0 30,156 ----------- ----------- ----------- 707,388 226,101 4,504,056 ----------- ----------- ----------- EXPENSES Advisory fees ........................................... 1,051,309 67,104 381,972 Administration fees ..................................... 224,279 14,315 146,923 Custody fees ............................................ 26,436 2,332 18,667 Accounting fees ......................................... 24,557 18,381 22,929 Distribution fees ....................................... 350,436 22,368 229,567 Professional fees ....................................... 37,122 48,210 42,389 Shareholder reports ..................................... 36,564 42,647 248,026 Trustees' fees .......................................... 10,578 10,578 10,578 Other fees and expenses ................................. 4,443 3,268 5,112 ----------- ----------- ----------- Total expenses ............................................. 1,765,724 229,203 1,106,163 ----------- ----------- ----------- LESS Waived fees ............................................. (93,930) (127,205) (323,604) Net expenses ............................................ 1,671,794 101,998 782,559 ----------- ----------- ----------- Net investment income (loss) ............................... (964,406) 124,103 3,721,497 ----------- ----------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS NET REALIZED GAIN (LOSS) FROM Unaffiliated securities ................................. (8,530,863) (2,340,447) 1,802,209 Collateral received for securities loaned ............... (1,228,137) 0 (426,574) TBA sale commitments .................................... 0 0 10,333 ----------- ----------- ----------- Net realized gain (loss) from investments .................. (9,759,000) (2,340,447) 1,385,968 ----------- ----------- ----------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF Unaffiliated securities ................................. 68,147,041 6,490,502 4,593,131 Collateral received for securities loaned ............... 1,273,080 0 503,544 TBA sale commitments .................................... 0 0 41,358 ----------- ----------- ----------- Net change in unrealized appreciation of investments ....... 69,420,121 6,490,502 5,138,033 ----------- ----------- ----------- Net realized and unrealized gain on investments ............ 59,661,121 4,150,055 6,524,001 ----------- ----------- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ....... $58,696,715 $ 4,274,158 $10,245,498 ----------- ----------- ----------- (1.) Net of foreign withholding taxes ...................... $ 0 $ 2,651 $ 0
The accompanying notes are an integral part of these financial statements. THIS PAGE IS INTENTIONALLY LEFT BLANK. 152 Wells Fargo Advantage Variable Trust Funds Statements of Changes in Net Assets
VT ASSET ALLOCATION FUND ---------------------------- For the For the Year Ended Year Ended December 31, December 31, 2009 2008 ------------ ------------- INCREASE (DECREASE) IN NET ASSETS Beginning net assets .................. $125,957,898 $ 254,054,290 OPERATIONS Net investment income (loss) .......... 2,226,099 4,533,471 Net realized gain (loss) on investments ........................ 1,161,344 (27,116,248) Net change in unrealized appreciation (depreciation) of investments ...... 11,378,299 (40,822,214) ------------ ------------- Net increase (decrease) in net assets resulting from operations ............. 14,765,742 (63,404,991) ------------ ------------- DISTRIBUTIONS TO SHAREHOLDERS FROM Net investment income ................. (2,236,644) (4,529,434) Net realized gains .................... 0 (15,226,958) ------------ ------------- Total distributions to shareholders ...... (2,236,644) (19,756,392) ------------ ------------- CAPITAL SHARES TRANSACTIONS Proceeds from shares sold ............. 3,121,375 10,395,528 Reinvestment of distributions ......... 2,236,644 19,756,396 Cost of shares redeemed ............... (30,574,173) (75,086,933) ------------ ------------- Net increase (decrease) in net assets resulting from capital share transactions - Total .................. (25,216,154) (44,935,009) ------------ ------------- NET INCREASE (DECREASE) IN NET ASSETS .... (12,687,056) (128,096,392) ============ ============= ENDING NET ASSETS ........................ $113,270,842 $ 125,957,898 ============ ============= ENDING BALANCE OF UNDISTRIBUTED/OVERDISTRIBUTED NET INVESTMENT INCOME (LOSS) .............. $ 91,346 $ 96,630 ============ ============= SHARES ISSUED AND REDEEMED Shares sold ........................... 337,588 795,214 Shares issued in reinvestment of distributions ...................... 241,911 1,689,360 Shares redeemed ....................... (3,348,627) (6,308,752) ------------ ------------- NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS .................... (2,769,128) (3,824,178) ============ =============
The accompanying notes are an integral part of these financial statements. Wells Fargo Advantage Variable Trust Funds 153 Statements of Changes in Net Assets
VT C&B LARGE CAP VALUE FUND VT DISCOVERY FUND VT EQUITY INCOME FUND - --------------------------- ---------------------------- --------------------------- For the For the For the For the For the For the Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2009 2008 2009 2008 2009 2008 - ------------ ------------ ------------ ------------- ------------ ------------ $18,017,234 $ 30,467,090 $113,148,724 $ 238,893,691 $ 43,451,643 $ 94,096,532 241,484 380,120 (611,462) (1,156,193) 887,311 1,335,216 (2,819,164) (2,377,842) (16,013,534) (32,098,515) (321,306) (3,670,427) 6,112,801 (8,064,374) 50,911,309 (64,797,556) 7,608,040 (26,894,842) ----------- ------------ ------------ ------------- ------------ ------------ 3,535,121 (10,062,096) 34,286,313 (98,052,264) 8,174,045 (29,230,053) ----------- ------------ ------------ ------------- ------------ ------------ (264,060) (369,107) 0 0 (910,236) (1,271,085) 0 0 0 0 0 (10,495,427) ----------- ------------ ------------ ------------- ------------ ------------ (264,060) (369,107) 0 0 (910,236) (11,766,512) ----------- ------------ ------------ ------------- ------------ ------------ 2,174,969 8,255,803 17,828,923 43,160,770 14,938,428 9,261,108 264,060 369,107 0 0 910,236 11,766,512 (9,001,613) (10,643,563) (79,139,381) (70,853,473) (12,123,032) (30,675,944) ----------- ------------ ------------ ------------- ------------ ------------ (6,562,584) (2,018,653) (61,310,458) (27,692,703) 3,725,632 (9,648,324) ----------- ------------ ------------ ------------- ------------ ------------ (3,291,523) (12,449,856) (27,024,145) (125,744,967) 10,989,441 (50,644,889) =========== ============ ============ ============= ============ ============ $14,725,711 $ 18,017,234 $ 86,124,579 $ 113,148,724 $ 54,441,084 $ 43,451,643 =========== ============ ============ ============= ============ ============ $ 9,051 $ 31,075 $ 0 $ 0 $ 5,009 $ 27,273 =========== ============ ============ ============= ============ ============ 301,860 873,828 1,433,818 2,510,179 1,577,619 681,676 36,796 41,002 0 0 91,826 877,757 (1,246,840) (1,126,012) (6,063,907) (4,272,197) (1,255,724) (2,181,200) ----------- ------------ ------------ ------------- ------------ ------------ (908,184) (211,182) (4,630,089) (1,762,018) 413,721 (621,767) =========== ============ ============ ============= ============ ============
154 Wells Fargo Advantage Variable Trust Funds Statements of Changes in Net Assets
VT INTERNATIONAL CORE FUND --------------------------- For the For the Year Ended Year Ended December 31, December 31, 2009 2008 ------------ ------------ INCREASE (DECREASE) IN NET ASSETS Beginning net assets .................................................................. $19,148,734 $ 44,470,148 OPERATIONS Net investment income ................................................................. 284,743 686,457 Net realized gain (loss) on investments ............................................... (7,226,058) (3,645,220) Net change in unrealized appreciation (depreciation) of investments ................... 8,964,257 (13,992,360) ----------- ------------ Net increase (decrease) in net assets resulting from operations .......................... 2,022,942 (16,951,123) ----------- ------------ DISTRIBUTIONS TO SHAREHOLDERS FROM Net investment income ................................................................. (535,754) (630,655) Net realized gains .................................................................... 0 (6,581,030) ----------- ------------ Total distributions to shareholders ...................................................... (535,754) (7,211,685) ----------- ------------ CAPITAL SHARES TRANSACTIONS Proceeds from shares sold ............................................................. 2,211,270 7,147,838 Reinvestment of distributions ......................................................... 535,754 7,211,685 Cost of shares redeemed ............................................................... (4,808,255) (15,518,129) ----------- ------------ Net increase (decrease) in net assets resulting from capital share transactions - Total .. (2,061,231) (1,158,606) ----------- ------------ NET INCREASE (DECREASE) IN NET ASSETS .................................................... (574,043) (25,321,414) =========== ============ ENDING NET ASSETS ........................................................................ $18,574,691 $ 19,148,734 =========== ============ ENDING BALANCE OF UNDISTRIBUTED/OVERDISTRIBUTED NET INVESTMENT INCOME .................... $ 120,016 $ 535,743 =========== ============ SHARES ISSUED AND REDEEMED Shares sold ........................................................................... 537,668 978,032 Shares issued in reinvestment of distributions ........................................ 126,060 1,028,771 Shares redeemed ....................................................................... (1,124,205) (2,146,466) ----------- ------------ NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS .. (460,477) (139,663) =========== ============
The accompanying notes are an integral part of these financial statements. Wells Fargo Advantage Variable Trust Funds 155 Statements of Changes in Net Assets
VT VT LARGE COMPANY CORE FUND LARGE COMPANY GROWTH FUND VT MONEY MARKET FUND - --------------------------- --------------------------- --------------------------- For the For the For the For the For the For the Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, December 31, 2009 2008 2009 2008 2009 2008 - ------------ ------------ ------------ ------------ ------------ ------------ $ 9,752,360 $ 20,140,962 $ 49,016,708 $ 99,065,355 $ 60,767,572 $ 50,603,118 81,907 193,000 317,120 239,609 62,156 1,225,560 (2,353,468) (188,284) (2,004,907) (5,374,701) 5,749 (3,369) 5,389,133 (6,978,327) 23,233,325 (29,665,328) 0 0 - ------------ ------------ ------------ ------------ ------------ ------------ 3,117,572 (6,973,611) 21,545,538 (34,800,420) 67,905 1,222,191 - ------------ ------------ ------------ ------------ ------------ ------------ (193,413) (179,329) (241,123) (202,677) (62,156) (1,226,818) 0 0 0 0 0 0 - ------------ ------------ ------------ ------------ ------------ ------------ (193,413) (179,329) (241,123) (202,677) (62,156) (1,226,818) - ------------ ------------ ------------ ------------ ------------ ------------ 152,679 1,020,673 15,226,881 6,019,409 26,278,239 72,973,557 193,413 179,329 241,123 202,677 62,156 1,231,310 (2,426,041) (4,435,664) (16,282,921) (21,267,636) (43,199,344) (64,035,786) - ------------ ------------ ------------ ------------ ------------ ------------ (2,079,949) (3,235,662) (814,917) (15,045,550) (16,858,949) 10,169,081 - ------------ ------------ ------------ ------------ ------------ ------------ 844,210 (10,388,602) 20,489,498 (50,048,647) (16,853,200) 10,164,454 ============ ============ ============ ============ ============ ============ $ 10,596,570 $ 9,752,360 $ 69,506,206 $ 49,016,708 $ 43,914,372 $ 60,767,572 ============ ============ ============ ============ ============ ============ $ 81,904 $ 192,996 $ 317,088 $ 239,595 $ (37) $ (1,108) ============ ============ ============ ============ ============ ============ 14,538 72,442 2,148,977 718,483 26,276,656 72,973,557 18,229 12,709 32,322 22,850 63,738 1,231,310 (228,580) (325,148) (2,240,936) (2,533,719) (43,199,342) (64,035,786) - ------------ ------------ ------------ ------------ ------------ ------------ (195,813) (239,997) (59,637) (1,792,386) (16,858,948) 10,169,081 ============ ============ ============ ============ ============ ============
156 Wells Fargo Advantage Variable Trust Funds Statements of Changes in Net Assets
VT OPPORTUNITY FUND ------------------------------------- For the For the Year Ended Year Ended December 31, 2009 December 31, 2008 ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS Beginning net assets .................................................................. $ 378,197,489 $ 779,285,577 OPERATIONS Net investment income (loss) .......................................................... 1,145,424 2,870,318 Net realized gain (loss) on investments ............................................... (35,715,713) (48,404,696) Net change in unrealized appreciation (depreciation) of investments ................... 158,792,953 (228,388,379) ------------- ------------- Net increase (decrease) in net assets resulting from operations .......................... 124,222,664 (273,922,757) ------------- ------------- DISTRIBUTIONS TO SHAREHOLDERS FROM Net investment income ................................................................. 0 (11,553,162) Net realized gains .................................................................... 0 (136,366,472) ------------- ------------- Total distributions to shareholders ...................................................... 0 (147,919,634) ------------- ------------- CAPITAL SHARES TRANSACTIONS Proceeds from shares sold ............................................................. 55,033,529 63,008,780 Reinvestment of distributions ......................................................... 0 147,919,633 Cost of shares redeemed ............................................................... (402,671,184) (190,174,110) ------------- ------------- Net increase (decrease) in net assets resulting from capital share transactions - Total .. (347,637,655) 20,754,303 ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS .................................................... (223,414,991) (401,088,088) ============= ============= ENDING NET ASSETS ........................................................................ $ 154,782,498 $ 378,197,489 ============= ============= ENDING BALANCE OF UNDISTRIBUTED NET INVESTMENT INCOME .................................... $ 1,094,975 $ 0 ============= ============= SHARES ISSUED AND REDEEMED Shares sold ........................................................................... 4,540,032 3,771,975 Shares issued in reinvestment of distributions ........................................ 0 9,439,670 Shares redeemed ....................................................................... (31,456,579) (11,363,179) ------------- ------------- NET INCREASE (DECREASE) IN SHARES OUTSTANDING RESULTING FROM CAPITAL SHARE TRANSACTIONS .. (26,916,547) 1,848,466 ============= =============
The accompanying notes are an integral part of these financial statements. Wells Fargo Advantage Variable Trust Funds 157 Statements of Changes in Net Assets
VT SMALL CAP GROWTH FUND VT SMALL/MID CAP VALUE FUND VT TOTAL RETURN BOND FUND - ------------------------------------- ------------------------------------- ------------------------------------- For the For the For the For the For the For the Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, 2009 December 31, 2008 December 31, 2009 December 31, 2008 December 31, 2009 December 31, 2008 - ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- $109,996,118 $ 221,394,115 $ 7,928,361 $17,526,968 $ 93,610,164 $129,097,689 (964,406) (1,231,839) 124,103 157,701 3,721,497 5,178,969 (9,759,000) (24,647,292) (2,340,447) (483,182) 1,385,968 1,757,916 69,420,121 (58,841,608) 6,490,502 (6,233,419) 5,138,033 (4,670,882) ------------ ------------- ----------- ----------- ------------ ------------ 58,696,715 (84,720,739) 4,274,158 (6,558,900) 10,245,498 2,266,003 ------------ ------------- ----------- ----------- ------------ ------------ 0 0 (108,823) 0 (4,144,480) (5,436,067) 0 (46,824,280) 0 (2,731,743) (384,241) 0 ------------ ------------- ----------- ----------- ------------ ------------ 0 (46,824,280) (108,823) (2,731,743) (4,528,721) (5,436,067) ------------ ------------- ----------- ----------- ------------ ------------ 69,566,868 20,577,751 3,582,603 3,352,202 23,374,243 15,432,543 0 46,824,656 108,823 2,731,744 4,514,417 5,439,219 (52,914,729) (47,255,385) (3,767,477) (6,391,910) (32,081,199) (53,189,223) ------------ ------------- ----------- ----------- ------------ ------------ 16,652,139 20,147,022 (76,051) (307,964) (4,192,539) (32,317,461) ------------ ------------- ----------- ----------- ------------ ------------ 75,348,854 (111,397,997) 4,089,284 (9,598,607) 1,524,238 (35,487,525) ============ ============= =========== =========== ============ ============ $185,344,972 $ 109,996,118 $12,017,645 $ 7,928,361 $ 95,134,402 $ 93,610,164 ============ ============= =========== =========== ============ ============ $ 0 $ 0 $ 111,069 $ 108,598 $ 37,448 $ 17,650 ============ ============= =========== =========== ============ ============ 12,954,722 2,847,306 557,400 477,256 2,307,327 1,568,666 0 7,856,486 18,570 327,940 447,370 557,253 (10,173,454) (7,135,470) (642,164) (787,217) (3,203,494) (5,467,273) ------------ ------------- ----------- ----------- ------------ ------------ 2,781,268 3,568,322 (66,194) 17,979 (448,797) (3,341,354) ============ ============= =========== =========== ============ ============
158 Wells Fargo Advantage Variable Trust Funds Financial Highlights
Beginning Net Realized Distributions Net Asset Net and Unrealized from Net Distributions Value Per Investment Gain (Loss) Investment from Net Share Income (Loss) on Investments Income Realized Gains --------- ------------- -------------- ------------- -------------- VT ASSET ALLOCATION FUND January 1, 2009 to December 31, 2009 .. $ 9.31 0.19 1.22 (0.19) 0.00 January 1, 2008 to December 31, 2008 .. $14.64 0.30 (4.32) (0.30) (1.01) January 1, 2007 to December 31, 2007 .. $14.13 0.34 0.73 (0.33) (0.23) January 1, 2006 to December 31, 2006 .. $13.05 0.31 1.23 (0.31) (0.15) January 1, 2005 to December 31, 2005 .. $12.97 0.27 0.37 (0.27) (0.29) VT C&B LARGE CAP VALUE FUND January 1, 2009 to December 31, 2009 .. $ 7.03 0.12 1.88 (0.12) 0.00 January 1, 2008 to December 31, 2008 .. $10.99 0.14 (3.96) (0.14) 0.00 January 1, 2007 to December 31, 2007 .. $11.24 0.13 (0.26) (0.12) 0.00 January 1, 2006 to December 31, 2006 .. $ 9.34 0.15 1.90 (0.15) 0.00 January 1, 2005 to December 31, 2005 .. $ 9.13 0.07 0.21 (0.07) 0.00 VT DISCOVERY FUND(SM) January 1, 2009 to December 31, 2009 .. $11.19 (0.11) 4.62 0.00 0.00 January 1, 2008 to December 31, 2008 .. $20.11 (0.11) (8.81) 0.00 0.00 January 1, 2007 to December 31, 2007 .. $16.44 (0.15) 3.82 0.00 0.00 January 1, 2006 to December 31, 2006 .. $14.34 (0.13) 2.23 0.00 0.00 January 1, 2005 to December 31, 2005 .. $14.65 (0.09) 1.09 0.00 (1.31) VT EQUITY INCOME FUND January 1, 2009 to December 31, 2009 .. $ 9.88 0.19 1.44 (0.20) 0.00 January 1, 2008 to December 31, 2008 .. $18.74 0.30 (6.46) (0.28) (2.42) January 1, 2007 to December 31, 2007 .. $19.75 0.30 0.33 (0.30) (1.34) January 1, 2006 to December 31, 2006 .. $16.96 0.28 2.83 (0.28) (0.04) January 1, 2005 to December 31, 2005 $16.33 0.24 0.63 (0.24) 0.00 VT INTERNATIONAL CORE FUND January 1, 2009 to December 31, 2009 .. $ 4.61 0.09 0.47 (0.14) 0.00 January 1, 2008 to December 31, 2008 .. $10.36 0.19 (4.03) (0.17) (1.74) January 1, 2007 to December 31, 2007 .. $ 9.87 0.17 1.10 0.00 (0.78) January 1, 2006 to December 31, 2006 .. $ 8.66 0.18 1.56 (0.16) (0.37) January 1, 2005 to December 31, 2005 .. $ 8.27 0.13 0.64 (0.16) (0.22) VT LARGE COMPANY CORE FUND January 1, 2009 to December 31, 2009 .. $ 9.55 0.12 3.37 (0.21) 0.00 January 1, 2008 to December 31, 2008 .. $15.96 0.21 (6.46) (0.16) 0.00 January 1, 2007 to December 31, 2007 .. $15.59 0.14 0.23 0.00 0.00 January 1, 2006 to December 31, 2006 .. $13.58 0.10 2.01 (0.10) 0.00 January 1, 2005 to December 31, 2005 .. $13.97 0.08 (0.39) (0.08) 0.00
- ---------- (1.) Total return calculations do not include any sales charges, and would have been lower had certain expenses not been waived or reimbursed during the periods shown. Returns for periods less than one year are not annualized. (2.) Calculated based upon average shares outstanding. (3.) Amount is less than $0.005. The accompanying notes are an integral part of these financial statements. Wells Fargo Advantage Variable Trust Funds 159 Financial Highlights
Ratio to Average Ending Net Assets (Annualized) Net Asset ------------------------------------ Portfolio Net Assets at Value Per Net Investment Gross Net Total Turnover End of Period Share Income (Loss) Expenses Expenses Return(1) Rate (000's omitted) - --------- -------------- -------- -------- --------- --------- --------------- $10.53 2.01% 1.07% 1.00% 15.46% 43% $113,271 $ 9.31 2.37% 1.07% 1.00% (29.11)% 21% $125,958 $14.64 2.26% 1.02% 1.00% 7.60% 25% $254,054 $14.13 2.27% 1.02% 1.00% 12.14% 12% $288,387 $13.05 2.06% 1.04% 1.00% 4.99% 2% $309,673 $ 8.91 1.56% 1.63% 1.00% 28.90% 15% $ 14,726 $ 7.03 1.55% 1.33% 1.00% (35.01)% 26% $ 18,017 $10.99 1.11% 1.17% 1.00% (1.17)% 35% $ 30,467 $11.24 1.44% 1.17% 1.00% 22.12% 30% $ 32,169 $ 9.34 0.76% 1.17% 1.00% 3.11% 106% $ 28,664 $15.70 (0.61)% 1.35% 1.15% 40.30% 208% $ 86,125 $11.19 (0.63)% 1.27% 1.15% (44.36)% 166% $113,149 $20.11 (0.72)% 1.21% 1.15% 22.32% 135% $238,894 $16.44 (0.76)% 1.21% 1.15% 14.64% 114% $233,947 $14.34 (0.76)% 1.26% 1.18% 8.27% 144% $250,275 $11.31 1.94% 1.18% 1.00% 16.86% 16% $ 54,441 $ 9.88 1.95% 1.15% 1.00% (36.47)% 9% $ 43,452 $18.74 1.49% 1.05% 1.00% 2.80% 20% $ 94,097 $19.75 1.53% 1.04% 1.00% 18.55% 14% $116,232 $16.96 1.43% 1.05% 1.00% 5.38% 23% $114,375 $ 5.03 1.63% 2.04% 1.00% 12.66% 230% $ 18,575 $ 4.61 2.15% 1.64% 1.00% (43.41)% 49% $ 19,149 $10.36 1.57% 1.44% 1.00% 12.67% 65% $ 44,470 $ 9.87 1.85% 1.43% 1.00% 20.81% 43% $ 44,317 $ 8.66 1.61% 1.41% 1.00% 9.67% 53% $ 39,602 $12.83 0.84% 1.89% 1.00% 37.01% 18% $ 10,597 $ 9.55 1.25% 1.50% 1.00% (39.48)% 31% $ 9,752 $15.96 0.76% 1.22% 1.00% 2.37% 42% $ 20,141 $15.59 0.64% 1.19% 1.00% 15.57% 19% $ 25,349 $13.58 0.49% 1.13% 1.00% (2.24)% 112% $ 28,460
160 Wells Fargo Advantage Variable Trust Funds Financial Highlights
Beginning Net Realized Distributions Net Asset Net and Unrealized from Net Distributions Value Per Investment Gain (Loss) Investment from Net Share Income (Loss) on Investments Income Realized Gains --------- ------------- -------------- ------------- -------------- VT LARGE COMPANY GROWTH FUND January 1, 2009 to December 31, 2009 .. $ 6.28 0.04 2.68 (0.03) 0.00 January 1, 2008 to December 31, 2008 .. $10.32 0.03 (4.05) (0.02) 0.00 January 1, 2007 to December 31, 2007 .. $ 9.59 0.02 0.71 0.00 0.00 January 1, 2006 to December 31, 2006 .. $ 9.37 (0.02) 0.24 0.00 0.00 January 1, 2005 to December 31, 2005 .. $ 8.88 (0.02) 0.53 (0.02) 0.00 VT MONEY MARKET FUND January 1, 2009 to December 31, 2009 .. $ 1.00 0.00 0.00 0.00(3) 0.00 January 1, 2008 to December 31, 2008 .. $ 1.00 0.02 0.00 (0.02) 0.00 January 1, 2007 to December 31, 2007 .. $ 1.00 0.05 0.00 (0.05) 0.00 January 1, 2006 to December 31, 2006 .. $ 1.00 0.04 0.00 (0.04) 0.00 January 1, 2005 to December 31, 2005 .. $ 1.00 0.03 0.00 (0.03) 0.00 VT OPPORTUNITY FUND January 1, 2009 to December 31, 2009 .. $10.16 0.11 4.74 0.00 0.00 January 1, 2008 to December 31, 2008 .. $22.03 0.12 (7.30) (0.37) (4.32) January 1, 2007 to December 31, 2007 .. $24.02 0.21 1.60 (0.16) (3.64) January 1, 2006 to December 31, 2006 .. $24.22 0.13 2.43 0.00 (2.76) January 1, 2005 to December 31, 2005 .. $22.45 (0.02) 1.79 0.00 0.00 VT SMALL CAP GROWTH FUND January 1, 2009 to December 31, 2009 .. $ 4.16 (0.03) 2.22 0.00 0.00 January 1, 2008 to December 31, 2008 .. $ 9.69 (0.05) (3.31) 0.00 (2.17) January 1, 2007 to December 31, 2007 .. $ 9.96 (0.07) 1.52 0.00 (1.72) January 1, 2006 to December 31, 2006 .. $ 8.34 (0.09) 1.94 0.00 (0.23) January 1, 2005 to December 31, 2005 .. $ 7.85 (0.08) 0.57 0.00 0.00 VT SMALL/MID CAP VALUE FUND January 1, 2009 to December 31, 2009 .. $ 4.95 0.08 2.87 (0.07) 0.00 January 1, 2008 to December 31, 2008 .. $11.08 0.09(2) (4.21) 0.00 (2.01) January 1, 2007 to December 31, 2007 .. $13.22 (0.04) 0.21 0.00 (2.31) January 1, 2006 to December 31, 2006 .. $13.66 (0.03) 1.84 0.00 (2.25) January 1, 2005 to December 31, 2005 .. $11.77 (0.06) 2.00 (0.05) 0.00 VT TOTAL RETURN BOND FUND January 1, 2009 to December 31, 2009 .. $ 9.70 0.42 0.72 (0.46) (0.04) January 1, 2008 to December 31, 2008 .. $ 9.94 0.44 (0.21) (0.47) 0.00 January 1, 2007 to December 31, 2007 .. $ 9.81 0.45 0.13 (0.45) 0.00 January 1, 2006 to December 31, 2006 .. $ 9.86 0.43 (0.05) (0.43) 0.00 January 1, 2005 to December 31, 2005 .. $10.08 0.36 (0.17) (0.37) (0.04)
The accompanying notes are an integral part of these financial statements. Wells Fargo Advantage Variable Trust Funds 161 Financial Highlights
Ratio to Average Net Assets Ending (Annualized) Net Asset ------------------------------------ Portfolio Net Assets at Value Per Net Investment Gross Net Total Turnover End of Period Share Income (Loss) Expenses Expenses Return(1) Rate (000's omitted) - --------- -------------- -------- -------- --------- --------- --------------- $ 8.97 0.55% 1.20% 1.00% 43.38% 27% $ 69,506 $ 6.28 0.32% 1.15% 1.00% (38.99)% 7% $ 49,017 $10.32 0.19% 1.05% 1.00% 7.61% 10% $ 99,065 $ 9.59 (0.16)% 1.04% 1.00% 2.35% 12% $ 108,621 $ 9.37 (0.21)% 1.05% 1.00% 5.70% 11% $ 116,003 $ 1.00 0.12% 1.09% 0.61% 0.11% NA $ 43,914 $ 1.00 2.24% 0.89% 0.75% 2.27% NA $ 60,768 $ 1.00 4.56% 0.84% 0.75% 4.68% NA $ 50,603 $ 1.00 4.33% 0.82% 0.75% 4.41% NA $ 52,499 $ 1.00 2.53% 0.82% 0.75% 2.55% NA $ 55,504 $15.01 0.39% 1.32% 1.07% 47.74% 50% $ 154,782 $10.16 0.47% 1.21% 1.07% (40.10)% 70% $ 378,197 $22.03 0.74% 1.19% 1.07% 6.63% 64% $ 779,286 $24.02 0.48% 1.18% 1.07% 12.22% 41% $ 897,047 $24.22 (0.06)% 1.32% 1.11% 7.88% 41% $1,004,763 $ 6.35 (0.69)% 1.26% 1.20% 52.64% 75% $ 185,345 $ 4.16 (0.73)% 1.26% 1.20% (41.42)% 76% $ 109,996 $ 9.69 (0.73)% 1.22% 1.20% 13.81% 121% $ 221,394 $ 9.96 (0.98)% 1.23% 1.20% 22.75% 135% $ 190,516 $ 8.34 (0.99)% 1.24% 1.20% 6.24% 128% $ 167,033 $ 7.83 1.39% 2.56% 1.14% 60.18% 45% $ 12,018 $ 4.95 1.18% 1.69% 1.14% (44.55)% 39% $ 7,928 $11.08 (0.31)% 1.51% 1.14% (0.32)% 60% $ 17,527 $13.22 (0.23)% 1.46% 1.14% 15.29% 81% $ 23,462 $13.66 (0.49)% 1.48% 1.15% 16.50% 112% $ 23,889 $10.34 4.07% 1.20% 0.85% 11.99% 580% $ 95,134 $ 9.70 4.55% 1.19% 0.90% 2.39% 692% $ 93,610 $ 9.94 4.58% 0.94% 0.90% 6.08% 580% $ 129,098 $ 9.81 4.36% 0.95% 0.90% 3.92% 662% $ 116,449 $ 9.86 3.58% 0.96% 0.90% 1.90% 714% $ 85,445
162 Wells Fargo Advantage Variable Trust Funds Notes to Financial Statements 1. ORGANIZATION Wells Fargo Variable Trust (the "Trust") is an open-end investment management company registered under the Investment Company Act of 1940, as amended (the "1940 Act"). These financial statements report on the following funds: Wells Fargo Advantage VT Asset Allocation Fund ("VT Asset Allocation Fund"), Wells Fargo Advantage VT C&B Large Cap Value Fund ("VT C&B Large Cap Value Fund"), Wells Fargo Advantage VT Discovery Fund ("VT Discovery Fund"), Wells Fargo Advantage VT Equity Income Fund ("VT Equity Income Fund" ), Wells Fargo Advantage VT International Core Fund ("VT International Core Fund"), Wells Fargo Advantage VT Large Company Core Fund ("VT Large Company Core Fund"), Wells Fargo Advantage VT Large Company Growth Fund ("VT Large Company Growth Fund"), Wells Fargo Advantage VT Money Market Fund ("VT Money Market Fund" ), Wells Fargo Advantage VT Opportunity Fund ("VT Opportunity Fund"), Wells Fargo Advantage VT Small Cap Growth Fund ("VT Small Cap Growth Fund"), Wells Fargo Advantage VT Small/Mid Cap Value Fund ("VT Small/Mid Cap Value Fund" ), and Wells Fargo Advantage VT Total Return Bond Fund ("VT Total Return Bond Fund"), (each, a "Fund", collectively, the "Funds"). Each Fund is a diversified series of the Trust. The Funds are available exclusively as pooled funding vehicles for certain participating life insurance companies offering variable annuity contracts and variable life insurance policies. 2. SIGNIFICANT ACCOUNTING POLICIES The following significant accounting policies, which are consistently followed in the preparation of the financial statements of each Fund, are in conformity with U.S. Generally Accepted Accounting Principles ("GAAP") which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management has considered the circumstances under which the Funds should recognize or make disclosures regarding events or transactions occurring subsequent to the balance sheet date through February 25, 2010 which represents the date the financial statements are issued. Adjustments or additional disclosures, if any, have been included in these financial statements. SECURITIES VALUATION Investments in securities are valued each business day as of the close of regular trading on the New York Stock Exchange, which is usually 4:00 p.m. (Eastern Time). Securities which are traded on a national or foreign securities exchange are valued at the last reported sales price. Securities listed on The NASDAQ Stock Market, Inc. ("NASDAQ") are valued at the NASDAQ Official Closing Price ("NOCP"), and if no NOCP is available, then at the last reported sales price. If no sales price is shown on the NASDAQ, the bid price will be used. In the absence of any sale of securities listed on the NASDAQ, and in the case of other securities, including U.S. Government obligations, but excluding debt securities maturing in 60 days or less, the price will be deemed "stale" and the valuations will be determined in accordance with the Funds' Fair Valuation Procedures. Securities denominated in foreign currencies are translated into U.S. dollars using the closing rates of exchange in effect on the day of valuation. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore may not fully reflect trading or events that occur after the close of the principal exchange in which the foreign investments are traded but before the close of the New York Stock Exchange. If such trading or events are expected to materially affect the value of the investments, then those investments are fair valued following procedures approved by the Board of Trustees. These procedures take into account multiple factors including movements in U.S. securities markets after foreign exchanges close. Depending on market activity, such fair valuations may be frequent. In light of the judgment involved in fair value decisions, there can be no assurance that a fair value assigned to a particular security is accurate. Such fair value pricing may result in NAVs that are higher or lower than NAVs based on the closing price or latest quoted bid price. Certain fixed income securities with maturities exceeding 60 days are valued by using a pricing service approved by the Trust's Board of Trustees. This service uses market prices as quoted by an independent pricing service or by dealers in these securities when, in the service's judgment, these prices are readily available and are representative of the securities' fair values. For some securities, such prices are not readily available. These securities will generally be fair valued using the methods which may include consideration of yields or prices of securities of comparable quality, coupon rate, maturity and type of issue; indications as to values from dealers in securities, trading characteristics and general market conditions. Wells Fargo Advantage Variable Trust Funds 163 Notes to Financial Statements Debt securities of sufficient credit quality with original maturities of 60 days or less, generally are valued at amortized cost which approximates 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, which approximates fair value. Investments in open-end mutual funds are valued at net asset value. Investments which are not valued using any of the methods discussed above, are valued at their fair value, as determined by procedures established in good faith and approved by the Board of Trustees. As permitted under Rule 2a-7 of the 1940 Act, securities for VT Money Market Fund are valued at amortized cost, which approximates fair value. The valuation techniques used by the Funds to measure fair value are consistent with the market approach, income approach and/or cost approach, where applicable, for each security type. FOREIGN CURRENCY TRANSLATION The accounting records of the Funds are maintained in U.S. dollars. Assets, including investment securities, and liabilities denominated in foreign currency are translated into U.S. dollars at the prevailing rates of exchange at the date of valuation. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and liabilities other than investments in securities, at fiscal period-end, resulting 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 at fiscal period-end are not separately presented. Such changes are recorded with net realized and unrealized gain from investments. Gains and loses from certain foreign currency transactions are treated as ordinary income for U.S. federal income tax purposes. SECURITY LOANS The Funds may loan securities in return for securities, irrevocable letters of credit or cash collateral, which is invested in various short-term fixed income securities. A Fund may receive compensation for lending securities in the form of fees payable by the borrower or by retaining a portion of interest on the investment securities purchased with cash received as collateral (after payment of a "broker rebate fee" to the borrower). A Fund also continues to receive interest or dividends on the securities loaned. Security loans are secured at all times by collateral, although the loans may not be fully supported at all times if, for example, the instruments in which cash collateral is invested decline in value or the borrower fails to provide additional collateral when required in a timely manner or at all. The collateral is equal to at least 102% of the market value of the securities loaned plus accrued interest when the transaction is entered into. Cash collateral received by a Fund pursuant to these loans generally is invested on behalf of the Fund by the securities lending agent in securities that, at the time of investment, are considered high-quality short-term debt investments (including money market instruments) and have been evaluated and approved by the Fund's adviser and are permissible investments for the Fund. Cash collateral is invested on behalf of a Fund through a joint account in a manner similar to the Fund's investment of its cash reserves and the Fund is entitled to the gains and bears the losses on such investments. The net asset value of a Fund will be affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of instruments purchased with cash collateral. Another risk from securities lending is that the borrower may not provide additional collateral when required or return the securities when due or when called for by the Fund. In either case, a Fund could experience delays in recovering securities or collateral or could lose all or part of the value of the loaned securities. Wells Fargo Bank, N.A., currently acts as the securities lending agent for the Funds, subject to the overall supervision of the Funds' investment adviser, and has delegated its duties as securities lending agent to an affiliated sub-agent for certain funds and to an unaffiliated sub-agent for other funds. Pursuant to an exemptive order granted by the SEC and subject to compliance with its conditions, Wells Fargo Bank, N.A. under a contract is entitled to receive for its services 164 Wells Fargo Advantage Variable Trust Funds Notes to Financial Statements 25% of the revenues earned on the securities lending activities and incurs all expenses. Wells Fargo Bank, N.A. pays all or part of its portion of the revenues generated by securities lending activities to the sub-agents as compensation for their services as sub-agents. The securities lending agent may make payments to borrowers and placing brokers that are not affiliated, directly or indirectly, with the Trust, the adviser or the distributor. For the year ended December 31, 2009, Wells Fargo Bank, N.A. waived its share of revenues earned on securities lending activities. Such waivers by Wells Fargo Bank, N.A. have the impact of increasing securities lending income on the Statements of Operations. The value of the securities on loan, the related collateral and the liability to return the collateral at December 31, 2009, are shown on the Statements of Assets and Liabilities. FUTURES CONTRACTS Certain Funds may be subject to interest rate risk and equity price risk in the normal course of pursuing its investment objectives. The Funds may buy and sell futures contracts in order to gain exposure to, or protect against changes in, security values and interest rates. The primary risks associated with the use of futures contracts are the imperfect correlation between changes in market values of securities held by the Fund and the prices of futures contracts, and the possibility of an illiquid market. Futures contracts are valued based upon their quoted daily settlement prices. The aggregate principal amounts of the contracts are not recorded in the financial statements. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset or liability and in the Statement of Operations as unrealized gains or losses until the contracts are closed, at which point they are recorded as net realized gains or losses on futures contracts. With futures contracts, there is minimal counterparty risk to the Fund since futures are exchange traded and the exchange's clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. OPTIONS Certain Funds may be subject to equity price risk in the normal course of pursuing its investment objectives. The Fund may write covered put or call options. When a Fund writes an option, an amount equal to the premium received is recorded as a liability and is subsequently adjusted to the current market value of the written option. Premiums received from written options, which expire unexercised, are recognized as realized gains from investments on the expiration date. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is treated as a realized gain or loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in calculating the realized gain or loss on the sale. If a put option is exercised, the premium reduces the cost of the security purchased. The Fund, as a writer of an option, bears the market risk of an unfavorable change in the price of the security underlying the written option. The Fund may also purchase call or put options. The premium is included in the Statement of Assets and Liabilities as an investment which is subsequently adjusted to the current market value of the option. Premiums paid for purchased options which expire are recognized as realized losses from investments on the expiration date. Premiums paid for purchased options which are exercised or closed are added to the amount paid or offset against the proceeds on the underlying security to determine the realized gain or loss. The risk of loss associated with purchased options is limited to the premium paid. Options traded on an exchange are regulated and terms of the options are standardized. Options traded over the counter expose the Fund to counterparty risk in the event the counterparty does not perform. This risk is mitigated by having a master netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund's exposure to the counterparty. TBA SALE COMMITMENTS A Fund may enter into To Be Announced ("TBA") sale commitments to hedge its portfolio positions or to sell mortgage-backed securities it owns under delayed delivery arrangements. Proceeds of TBA sale commitments are not received until the contractual settlement date. During the time a TBA sale commitment is outstanding, equivalent deliverable securities, or an offsetting TBA purchase commitment deliverable on or before the sale commitment date, are held as "cover" for the transaction. Unsettled TBA sale commitments are valued at the current value of the underlying securities, generally according to the procedures described under "Securities valuation". The contract is "marked-to-market" daily and the change in market value is recorded by the Fund as an unrealized gain or loss. If the TBA sale commitment is closed through Wells Fargo Advantage Variable Trust Funds 165 Notes to Financial Statements the acquisition of an offsetting purchase commitment, the Fund realizes a gain or loss. If the Fund delivers securities under the commitment, the Fund realizes a gain or a loss from the sale of the securities based upon the unit price established at the date the commitment was entered into. REPURCHASE AGREEMENTS The Funds may invest in repurchase agreements and may participate in pooled repurchase agreement transactions with other funds advised by Wells Fargo Funds Management, LLC. The repurchase agreements must be fully collateralized based on values that are marked to market daily. The collateral may be held by an agent bank under a tri-party agreement. It is the custodian's responsibility to value collateral daily and to take action to obtain additional collateral as necessary to maintain market value equal to or greater than the resale price. The repurchase agreements are collateralized by instruments such as U.S. Treasury, federal agency, or high-grade corporate obligations. There could be potential loss to a Fund in the event that such Fund is delayed or prevented from exercising its rights to dispose of the collateral, including the risk of a possible decline in the value of the underlying obligations during the period in which a Fund seeks to assert its rights. FORWARD FOREIGN CURRENCY CONTRACTS Certain Funds 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 Fund's 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. MORTGAGE DOLLAR ROLL TRANSACTIONS The Funds may engage in mortgage dollar roll transactions with respect to mortgage-backed securities issued by Government National Mortgage Association (GNMA), Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC). In a mortgage dollar roll transaction, a Fund sells a mortgage-backed security to a financial institution, such as a bank or broker-dealer and simultaneously agrees to repurchase a substantially similar security from the institution at a later date at an agreed upon price. The mortgage-backed securities that are repurchased will bear the same interest rate as those sold, but generally will be collateralized by different pools of mortgages with different pre-payment histories. During the roll period, a Fund foregoes principal and interest paid on the securities. A Fund is compensated by the difference between the current sales price and the forward price for the future purchase as well as by the earnings on the cash proceeds of the initial sale. Mortgage dollar rolls may be renewed without physical delivery of the securities subject to the contract. The Funds account for the dollar roll transactions as purchases and sales. STRUCTURED INVESTMENT VEHICLES The Funds may invest in structured debt securities, such as those issued by Structured Investment Vehicles ("SIVs"). SIVs invest in a diversified pool of underlying securities, which may include finance company debt and structured finance assets, residential mortgage-backed securities, commercial mortgage-backed securities, collateralized loan obligations, collateralized debt obligations and other asset backed securities. The ability of a SIV to repay debt depends primarily on the cash collections received from the SIV's underlying asset portfolio, which may include certain assets such as subprime mortgages that are subject to heightened risks of credit quality or market value deterioration under the continuing adverse conditions in the U.S. credit markets, and on the ability to obtain short-term funding through the issuance of new debt. Investments in these securities present increased credit and liquidity risks as there could be losses to a Fund in the event of credit or market value deterioration in a SIV's underlying portfolio, mismatches in the timing of the cash flows of the underlying asset interests and the repayment obligations of maturing securities issued by a SIV, or a SIV's inability to issue new debt. As of December 31, 2009, the following Funds owned certain of these types of structured securities in the amounts shown in the table. These securities were originally purchased by the Funds' securities lending agent on behalf of the Funds through a joint account with cash collateral received by the Funds pursuant to loans of the Funds' securities. Although considered high-quality, short-term money market instruments when originally purchased by the securities 166 Wells Fargo Advantage Variable Trust Funds Notes to Financial Statements lending agent through the joint account, the SIVs are now in payment default, have been restructured following default or are otherwise impaired and are valued at fair value as shown in the Portfolio of Investments.
Defaulted/Impaired/Restructured % of SIVs ($Value) Net Assets ------------------------------- ---------- VT ASSET ALLOCATION FUND $1,032,690 0.91% VT C&B LARGE CAP VALUE FUND 19,216 0.13% VT DISCOVERY FUND 842,417 0.98% VT EQUITY INCOME FUND 25,045 0.05% VT INTERNATIONAL CORE FUND 3,453 0.02% VT LARGE COMPANY CORE FUND 30,142 0.28% VT LARGE COMPANY GROWTH FUND 253,432 0.36% VT OPPORTUNITY FUND 2,672,417 1.73% VT SMALL CAP GROWTH FUND 1,168,890 0.63% VT TOTAL RETURN BOND FUND 590,286 0.62%
In a securities lending transaction, the net asset value of a Fund will be affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of instruments in which cash collateral is invested. Thus, the current net asset value of each Fund reflects the current valuations assigned to the defaulted or impaired SIVs that were purchased on its behalf through the investment of cash collateral. Declines in the values of defaulted or impaired SIVs generate unrealized losses for a Fund, which are reflected in the Fund's Statement of Assets and Liabilities, equal to the difference between (i) the value of the investments purchased with cash collateral received for securities loaned and (ii) the amount that would be payable if the Fund were to recall the loans at period end. The amount of securities lending activity undertaken by a Fund fluctuates from time to time. After the occurrence of a default or impairment of a SIV purchased in a joint account by the securities lending agent, as the various participating Funds'lending activity fluctuated, their ratable interest in the joint account, including their ratable exposure to the defaulted or impaired SIVs would fluctuate depending on the relative activity of each participating Fund. In order to eliminate the fluctuation of the various Funds' ratable exposure to the defaulted or impaired SIVs, the adviser to the Funds recommended to the Board of Trustees, and the Board of Trustees approved, actions designed to fix the allocation of percentage ownership in defaulted or impaired SIVs among all funds participating in securities lending ("side pocketing") based on each Fund's percentage ownership of the total cash collateral investment joint account as of the date the fixed allocation is implemented. Accordingly, on February 13, 2009 a side pocketing occurred, which fixed each Fund's ownership of defaulted or impaired SIVs in the joint account based on each such Fund's percentage ownership of the joint account as of such date. SECURITY TRANSACTIONS AND INCOME RECOGNITION Securities transactions are recorded on a trade date basis. Realized gains or losses are reported on the basis of identified cost of securities delivered. Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily based on the effective interest method. To the extent debt obligations are placed on non-accrual status, any related interest income may be reduced by writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status. Dividend income is recognized on the ex-dividend date, except for certain dividends from foreign securities, which are recorded as soon as the Fund is informed of the ex-dividend date. Dividend income from foreign securities is recorded net of foreign taxes withheld where recovery of such taxes is not assured. DISTRIBUTIONS TO SHAREHOLDERS Net investment income, if any, for the VT Discovery Fund, VT International Core Fund, VT Large Company Core Fund, VT Large Company Growth Fund, VT Opportunity Fund, VT Small Cap Growth Fund and VT Small/Mid Cap Value Fund is declared and distributed to shareholders annually. Net investment income, if any, for the VT Asset Allocation Fund, VT C&B Large Value Fund and VT Equity Income Fund is declared and distributed quarterly. Net investment income, Wells Fargo Advantage Variable Trust Funds 167 Notes to Financial Statements if any, for the VT Money Market Fund and VT Total Return Bond Fund is declared daily and distributed monthly. Distributions to shareholders from net realized capital gains, if any, are declared and distributed at least annually. Distributions are based on amounts calculated in accordance with the applicable federal income tax regulations, which may differ from GAAP. The timing and character of distributions made during the period from net investment income or net realized gains may also differ from their ultimate characterization for federal income tax purposes. To the extent that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment. Temporary differences do not require reclassifications. At December 31, 2009, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statements of Assets and Liabilities:
Accumulated Net Undistributed/ Realized Gain Overdistributed Net (Loss) Paid-in Investment Income on Investments Capital ------------------- --------------- ------------ VT ASSET ALLOCATION FUND $ 5,261 $ (5,261) $ 0 VT C&B LARGE CAP VALUE FUND 552 (552) 0 VT DISCOVERY FUND 611,462 94,501,647 (95,113,109) VT EQUITY INCOME FUND 661 (661) 0 VT INTERNATIONAL CORE FUND (164,716) 164,716 0 VT LARGE COMPANY CORE FUND 414 (414) 0 VT LARGE COMPANY GROWTH FUND 1,496 4,032,758 (4,034,254) VT MONEY MARKET FUND 1,071 (1,071) 0 VT OPPORTUNITY FUND (50,449) (5,161) 55,610 VT SMALL CAP GROWTH FUND 964,406 (43,356) (921,050) VT SMALL/MID CAP VALUE FUND (12,809) 12,787 22 VT TOTAL RETURN BOND FUND 442,781 (442,781) 0
FEDERAL AND OTHER TAXES Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund of the Trust to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required. Each Fund's income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. At December 31, 2009, estimated net capital loss carryforwards, which are available to offset future net realized capital gains, were as follows:
Expiration 2010 2011 2012 2013 2014 2016 2017 ----------- ---------- ---------- ---------- ---------- ----------- ----------- VT ASSET ALLOCATION FUND $ 0 $ 0 $ 0 $ 0 $ 0 $24,320,298 $ 3,723,849 VT C&B LARGE CAP VALUE FUND 0 0 78,234 0 0 1,139,689 3,794,097 VT DISCOVERY FUND 0 0 0 0 0 2,690,760 44,000,050 VT EQUITY INCOME FUND 0 0 0 0 0 3,566,431 279,199 VT INTERNATIONAL CORE FUND 0 0 0 0 0 981,156 9,259,513 VT LARGE COMPANY CORE FUND 11,186,858 1,781,980 0 0 0 79,792 2,446,337 VT LARGE COMPANY GROWTH FUND 14,881,364 2,858,910 1,003,450 2,022,267 1,615,063 4,132,177 2,303,740 VT OPPORTUNITY FUND 0 0 0 0 0 20,712,708 56,935,960 VT SMALL CAP GROWTH FUND 0 0 0 0 0 16,036,825 13,346,129 VT SMALL/MID CAP VALUE FUND 0 0 0 0 0 114,452 2,367,194
168 Wells Fargo Advantage Variable Trust Funds Notes to Financial Statements At December 31, 2009, current year deferred post-October capital losses, which will be treated as realized for tax purposes on the first day of the succeeding year were:
Deferred Post-October Capital Loss ------------ VT C&B LARGE CAP VALUE FUND $ 34,263 VT DISCOVERY FUND 649,400 VT INTERNATIONAL CORE FUND 46,537 VT LARGE COMPANY CORE FUND 20,526 VT LARGE COMPANY GROWTH FUND 583,064 VT SMALL CAP GROWTH FUND 19,947 VT SMALL/MID CAP VALUE FUND 67,309 VT TOTAL RETURN BOND FUND 748,606
3. FAIR VALUATION MEASUREMENTS Fair value measurements on investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund's investments. These inputs are summarized into three broad levels as follows: - - Level 1 - quoted prices in active markets for identical investments - - Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) - - Level 3 - significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments) The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. The following is a summary of the inputs used as of December 31, 2009, in valuing the Funds' investments in securities:
Significant Other Significant Observable Unobservable Quoted Prices Inputs Inputs INVESTMENTS IN SECURITIES (Level 1) (Level 2) (Level 3) Total - ------------------------- ------------- ----------------- ------------ ------------ VT ASSET ALLOCATION FUND Equity securities COMMON STOCKS $ 66,090,148 $ 0 $ 0 $ 66,090,148 Corporate debt securities 0 3,295,364 1,032,690 4,328,054 Debt securities issued by states in the U.S. and its political subdivisions 0 1,007,615 0 1,007,615 Debt securities issued by U.S. Treasury and government agencies 40,943,128 3,733,600 0 44,676,728 Short-term investments 3,454,316 549,989 0 4,004,305 $110,487,592 $8,586,568 $1,032,690 $120,106,850 VT C&B LARGE CAP VALUE FUND Equity securities COMMON STOCKS $ 13,889,399 $ 0 $ 0 $ 13,889,399 PREFERRED STOCKS 294,224 0 0 294,224 Corporate debt securities 0 24,496 19,216 43,712
Wells Fargo Advantage Variable Trust Funds 169 Notes to Financial Statements
Significant Other Significant Observable Unobservable Quoted Prices Inputs Inputs INVESTMENTS IN SECURITIES (Level 1) (Level 2) (Level 3) Total - ------------------------- ------------- ----------------- ------------ ----------- Debt securities issued by states in the U.S. and its political subdivisions $ 0 $ 5,629 $ 0 $ 5,629 Short-term investments 503,386 984 0 504,370 $14,687,009 $ 31,109 $ 19,216 $14,737,334 VT DISCOVERY FUND Equity securities COMMON STOCKS $83,909,894 $ 0 $ 0 $83,909,894 Corporate debt securities 0 1,607,019 842,417 2,449,436 Debt securities issued by states in the U.S. and its political subdivisions 0 369,492 0 369,492 Short-term investments 2,409,191 64,564 0 2,473,755 $86,319,085 $ 2,041,075 $842,417 $89,202,577 VT EQUITY INCOME FUND Equity securities COMMON STOCKS $53,947,620 $ 0 $ 0 $53,947,620 Corporate debt securities 0 132,119 25,045 157,164 Debt securities issued by states in the U.S. and its political subdivisions 0 30,377 0 30,377 Short-term investments 516,464 5,307 0 521,771 $54,464,084 $ 167,803 $ 25,045 $54,656,932 VT INTERNATIONAL CORE FUND Equity securities COMMON STOCKS $ 2,434,478 $15,657,579 $ 0 $18,092,057 PREFERRED STOCKS 0 303,009 0 303,009 Corporate debt securities 0 0 3,453 3,453 Short-term investments 113,091 0 0 113,091 $ 2,547,569 $15,960,588 $ 3,453 $18,511,610 VT LARGE COMPANY CORE FUND Equity securities COMMON STOCKS $10,489,229 $ 0 $ 0 $10,489,229 Corporate debt securities 0 80,131 30,142 110,273 Debt securities issued by states in the U.S. and its political subdivisions 0 18,427 0 18,427 Short-term investments 100,817 3,220 0 104,037 $10,590,046 $ 101,778 $ 30,142 $10,721,966 VT LARGE COMPANY GROWTH FUND Equity securities COMMON STOCKS $68,648,754 $ 0 $ 0 $68,648,754 Corporate debt securities 0 742,080 253,432 995,512
170 Wells Fargo Advantage Variable Trust Funds Notes to Financial Statements
Significant Other Significant Observable Unobservable Quoted Prices Inputs Inputs INVESTMENTS IN SECURITIES (Level 1) (Level 2) (Level 3) Total - ------------------------- ------------- ----------------- ------------ ------------ Debt securities issued by states in the U.S. and its political subdivisions $ 0 $ 170,623 $ 0 $ 170,623 Short-term investments 1,064,147 29,814 0 1,093,961 $ 69,712,901 $ 942,517 $ 253,432 $ 70,908,850 VT MONEY MARKET FUND Commercial paper $ 0 $29,674,632 $ 0 $ 29,674,632 Corporate debt securities 0 1,601,000 0 1,601,000 Debt securities issued by states in the U.S. and its political subdivisions 0 4,324,981 0 4,324,981 Repurchase agreements 0 3,000,000 0 3,000,000 Other 0 4,100,008 0 4,100,008 $ 0 $42,700,621 $ 0 $ 42,700,621 VT OPPORTUNITY FUND Equity securities COMMON STOCKS $143,690,816 $ 0 $ 0 $143,690,816 INVESTMENT COMPANIES 5,476,040 0 0 5,476,040 Corporate debt securities 0 3,549,888 2,672,417 6,222,305 Debt securities issued by states in the U.S. and its political subdivisions 0 816,210 0 816,210 Short-term investments 6,880,533 142,622 0 7,023,155 $156,047,389 $ 4,508,720 $2,672,417 $163,228,526 VT SMALL CAP GROWTH FUND Equity securities COMMON STOCKS $183,180,908 $ 0 $ 0 $183,180,908 Corporate debt securities 0 3,024,709 1,168,890 4,193,599 Debt securities issued by states in the U.S. and its political subdivisions 0 695,452 0 695,452 Short-term investments 3,598,406 121,521 0 3,719,927 $186,779,314 $ 3,841,682 $1,168,890 $191,789,886 VT SMALL/MID CAP VALUE FUND Equity securities COMMON STOCKS $ 11,278,448 $ 0 $ 0 $ 11,278,448 INVESTMENT COMPANIES 69,798 0 0 69,798 PREFERRED STOCKS 20,000 0 0 20,000 WARRANTS 77,680 0 0 77,680 Short-term investments 249,019 0 0 249,019 $ 11,694,945 $ 0 $ 0 $ 11,694,945
Wells Fargo Advantage Variable Trust Funds 171 Notes to Financial Statements
Significant Other Significant Observable Unobservable Quoted Prices Inputs Inputs INVESTMENTS IN SECURITIES (Level 1) (Level 2) (Level 3) Total - ------------------------- ------------- ----------------- ------------ ------------ VT TOTAL RETURN BOND FUND Asset-backed securities $ 0 $ 6,443,384 $ 0 $ 6,443,384 Collateralized mortgage obligations 0 22,397,840 0 22,397,840 Corporate debt securities 0 24,081,046 590,286 24,671,332 Debt securities issued by foreign governments 0 1,201,545 0 1,201,545 Debt securities issued by states in the U.S. and its political subdivisions 0 997,460 0 997,460 Debt securities issued by U.S. Treasury and government agencies 10,280,589 34,398,610 0 44,679,199 Short-term investments 2,671,348 84,561 0 2,755,909 $12,951,937 $89,604,446 $590,286 $103,146,669
Further details on the major security types listed above for each Fund can be found in the Portfolio of Investments. As of December 31, 2009, the inputs used in valuing the Funds' other financial instruments, which are carried at fair value, were as follows:
Significant Other Significant Observable Unobservable Quoted Prices Inputs Inputs OTHER FINANCIAL INSTRUMENTS* (Level 1) (Level 2) (Level 3) Total - ---------------------------- ------------- ----------------- ------------ ------------ VT ASSET ALLOCATION FUND $1,842,320 $ 0 $0 $1,842,320 VT INTERNATIONAL CORE FUND 0 (5,377) 0 (5,377) VT TOTAL RETURN BOND FUND 0 529,531 0 529,531
* Other financial instruments include TBA sale commitments, futures and forward transactions. The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value:
VT Asset VT C&B Large VT VT Equity VT International VT Large Allocation Cap Value Discovery Income Core Company Core Fund Fund Fund Fund Fund Fund ----------- ------------ ---------- --------- ---------------- ------------ COMMON STOCK BALANCE AS OF 12/31/2008 $ 0 $ 0 $ 0 $ 0 $ 403,094 $ 0 Realized gain (loss) 0 0 0 0 0 0 Change in unrealized appreciation (depreciation) 0 0 0 0 0 0 Net purchases (sales) 0 0 0 0 0 0 Net transfer in (out) of Level 3 0 0 0 0 (403,094) 0 BALANCE AS OF 12/31/2009 0 0 0 0 0 0 CORPORATE DEBT SECURITIES BALANCE AS OF 12/31/2008 1,518,249 25,616 1,689,971 171,469 5,572 24,258 Realized gain (loss) (1,031,601) (14,993) (739,330) (63,941) (1,657) (17,129) Change in unrealized appreciation (depreciation) 1,157,942 15,474 760,576 63,862 1,466 18,064 Net purchases (sales) (611,900) (6,881) (868,800) (146,345) (1,928) 4,949 Net transfer in (out) of Level 3 0 0 0 0 0 0 BALANCE AS OF 12/31/2009 1,032,690 19,216 842,417 25,045 3,453 30,142 TOTAL $ 1,032,690 $ 19,216 $ 842,417 $ 25,045 $ 3,453 $ 30,142
172 Wells Fargo Advantage Variable Trust Funds Notes to Financial Statements
VT Large VT VT Small VT Small/Mid VT Total Company Growth Opportunity Cap Growth Cap Value Return Fund Fund Fund Fund Fund -------------- ----------- ----------- ------------ ----------- COMMON STOCK BALANCE AS OF 12/31/2008 $ 0 $ 0 $ 0 $ 39,282 $ 0 Realized gain (loss) 0 0 0 0 0 Change in unrealized appreciation (depreciation) 0 0 0 0 0 Net purchases (sales) 0 0 0 0 0 Net transfer in (out) of Level 3 0 0 0 (39,282) 0 BALANCE AS OF 12/31/2009 0 0 0 0 0 ASSET-BACKED SECURITIES BALANCE AS OF 12/31/2008 0 0 0 0 86,630 Accrued discounts (premiums) 0 0 0 0 (3) Realized gain (loss) 0 0 0 0 (2,175) Change in unrealized appreciation (depreciation) 0 0 0 0 13,673 Net purchases (sales) 0 0 0 0 (98,125) Net transfer in (out) of Level 3 0 0 0 0 0 BALANCE AS OF 12/31/2009 0 0 0 0 0 MORTGAGE-BACKED SECURITIES BALANCE AS OF 12/31/2008 0 0 0 0 3,692,991 Accrued discounts (premiums) 0 0 0 0 68 Realized gain (loss) 0 0 0 0 67,588 Change in unrealized appreciation (depreciation) 0 0 0 0 (16,903) Net purchases (sales) 0 0 0 0 (1,326,251) Net transfer in (out) of Level 3 0 0 0 0 (2,417,493) BALANCE AS OF 12/31/2009 0 0 0 0 0 CORPORATE DEBT SECURITIES BALANCE AS OF 12/31/2008 464,889 1,568,835 1,976,991 0 210,356 Realized gain (loss) (99,386) (1,706,332) (1,228,137) 0 (426,574) Change in unrealized appreciation (depreciation) 106,078 1,828,823 1,273,080 0 503,544 Net purchases (sales) (218,149) 981,091 (853,044) 0 302,960 Net transfer in (out) of Level 3 0 0 0 0 0 BALANCE AS OF 12/31/2009 253,432 2,672,417 1,168,890 0 590,286 DEBT SECURITIES ISSUED BY THE US TREASURY AND US GOVERNMENT AGENCIES BALANCE AS OF 12/31/2008 0 0 0 0 493,317 Accrued discounts (premiums) 0 0 0 0 (21) Realized gain (loss) 0 0 0 0 21,519 Change in unrealized appreciation (depreciation) 0 0 0 0 (26,851) Net purchases (sales) 0 0 0 0 (487,964) Net transfer in (out) of Level 3 0 0 0 0 0 BALANCE AS OF 12/31/2009 0 0 0 0 0 TOTAL $ 253,432 $ 2,672,417 $ 1,168,890 $ 0 $ 590,286
VT Asset VT C&B Large VT VT Equity VT International VT Large Allocation Cap Value Discovery Income Core Company Core Fund Fund Fund Fund Fund Fund ---------- ------------ --------- --------- ---------------- ------------ Change in unrealized appreciation (depreciation) relating to securities held at the end of reporting period Corporate debt securities $106,099 $1,797 $78,789 $2,342 $280 $2,819
Wells Fargo Advantage Variable Trust Funds 173 Notes to Financial Statements
VT Large VT VT Small VT Small/Mid VT Total Company Growth Opportunity Cap Growth Cap Value Return Fund Fund Fund Fund Fund -------------- ----------- ---------- ------------ -------- Change in unrealized appreciation (depreciation) relating to securities held at the end of reporting period Corporate debt securities $23,703 $249,943 $109,323 $0 $60,646
4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES ADVISORY FEES The Trust has entered into an advisory contract with Wells Fargo Funds Management, LLC ("Funds Management"). The adviser is responsible for implementing investment policies and guidelines and for supervising the sub-adviser, who is responsible for day-to-day portfolio management. Pursuant to the contract, Funds Management is entitled to receive an advisory fee for its services as adviser at the following annual rates:
Advisory Fees (% of Average Daily Average Daily Net Assets Net Assets) ------------------ ------------- VT ASSET ALLOCATION FUND First $500 million 0.550 VT C&B LARGE CAP VALUE FUND Next $500 million 0.500 VT EQUITY INCOME FUND Next $2 billion 0.450 VT LARGE COMPANY CORE FUND Next $2 billion 0.425 VT LARGE COMPANY GROWTH FUND Over $5 billion 0.400 VT DISCOVERY FUND First $500 million 0.750 VT INTERNATIONAL CORE FUND Next $500 million 0.700 VT OPPORTUNITY FUND Next $2 billion 0.650 VT SMALL CAP GROWTH FUND Next $2 billion 0.625 VT SMALL/MID CAP VALUE FUND Over $5 billion 0.600 VT MONEY MARKET FUND First $500 million 0.300 Next $500 million 0.300 Next $2 billion 0.275 Next $2 billion 0.275 Over $5 billion 0.250 VT TOTAL RETURN BOND FUND(1) First $500 million 0.400 Next $500 million 0.375 Next $2 billion 0.350 Next $2 billion 0.325 Over $5 billion 0.300
(1.) Prior to May 1, 2009, the following advisory fee schedule was charged to the Fund as a percentage of the Fund's daily net assets: 0.45% for the first $500 million; 0.40% for the next $500 million; 0.35% for the next $2 billion; 0.325% for the next $2 billion; and 0.30% for assets over $5 billion. Funds Management may retain the services of certain investment sub-advisers to provide daily portfolio management. The fees related to sub-advisory services are borne directly by the adviser and do not increase the overall fees paid by a Fund to the adviser. 174 Wells Fargo Advantage Variable Trust Funds Notes to Financial Statements Wells Capital Management Incorporated, an affiliate of Funds Management and indirect wholly owned subsidiary of Wells Fargo & Company, is the sub-adviser to VT Asset Allocation Fund, VT Discovery Fund, VT Equity Income Fund, VT Money Market Fund, VT Opportunity Fund, VT Small Cap Growth Fund, VT Small/Mid Cap Value Fund and VT Total Return Bond Fund. Peregrine Capital Management, Inc., an affiliate of Funds Management and direct wholly owned subsidiary of Wells Fargo & Company, is the sub-adviser to VT Large Company Growth Fund. Evergreen Investment Management Company, LLC, an affiliate of Funds Management and indirect wholly owned subsidiary of Wells Fargo & Company, is the sub-adviser to VT International Core Fund. Prior to February 11, 2009, New Star Institutional Managers Limited was the investment sub-adviser to VT International Core Fund. Cooke & Bieler is the sub-adviser to VT C&B Large Cap Value Fund. Matrix Asset Advisors Incorporated is the sub-adviser to VT Large Company Core Fund. ADMINISTRATION AND TRANSFER AGENT FEES The Trust has entered into an Administration Agreement with Funds Management. Under this Agreement, for providing administrative services, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers, Funds Management is entitled to receive from each Fund the following annual fees:
Administation Fees (% of Average Average Daily Net Assets Daily Net Assets) - ------------------------ ------------------ First $5 billion 0.16 Next $5 billion 0.15 Over $10 billion 0.14
Funds Management has contractually waived advisory and administration fees during the year ended December 31, 2009 to the extent necessary to maintain certain net operating expense ratios for the Funds. Expenses were waived by Funds Management proportionately from all classes, first from advisory fees, and then from any class specific expenses, if applicable. CUSTODY FEES The Funds have entered into a contract with State Street Bank and Trust Company ("State Street"), whereby State Street is responsible for providing custody services and fund accounting services to the Funds (the "Custody and Fund Accounting Agreement.") Pursuant to the Custody and Fund Accounting Agreement, State Street is entitled to an annual asset-based fee for domestic and global custody services for the Funds. Also pursuant to the Custody and Fund Accounting Agreement, State Street is entitled to receive annual asset-based fees for providing fund accounting services to the Funds. Prior to December 6, 2009, Wells Fargo Bank, N.A. was responsible for providing custody services to each Fund (except VT Money Market Fund) and was entitled to a monthly fee for custody services at an annual rate of 0.02% of the average daily net assets of each Fund, except VT International Core Fund which incurred a fee at an annual rate of 0.10% of its average daily net assets. Wells Fargo Bank, N.A. provided custody services to VT Money Market Fund until January 10, 2010, and received a fee at an annual rate of 0.02% of the average daily net assets of VT Money Market Fund. PNC Global Investment Servicing ("PNC") served as fund accountant for the Trust prior to these dates, respectively, and received an annual asset-based fee and an annual fixed fee from each Fund. PNC was also reimbursed for all out-of-pocket expenses reasonably incurred in providing these services. DISTRIBUTION FEES The Trust has adopted a Distribution Plan for the Funds pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are and paid to Wells Fargo Funds Distributor, LLC, the principal underwriter of each Fund, at an annual rate of up to 0.25% of the average daily net assets. Wells Fargo Advantage Variable Trust Funds 175 Notes to Financial Statements 5. INVESTMENT PORTFOLIO TRANSACTIONS Purchases and sales of investments, exclusive of short-term securities (securities with maturities of one year or less at purchase date) and U.S. Government obligations for the year ended December 31, 2009, were as follows:
Purchases at Cost Sales Proceeds ----------------- -------------- VT ASSET ALLOCATION FUND $ 44,817,985 $ 55,436,192 VT C&B LARGE CAP VALUE FUND 2,214,227 8,501,970 VT DISCOVERY FUND 209,272,660 271,574,090 VT EQUITY INCOME FUND 11,187,552 7,077,113 VT INTERNATIONAL CORE FUND 39,289,412 41,347,586 VT LARGE COMPANY CORE FUND 1,696,091 3,735,289 VT LARGE COMPANY GROWTH FUND 15,484,921 16,127,872 VT OPPORTUNITY FUND 136,765,543 459,516,361 VT SMALL CAP GROWTH FUND 114,528,893 102,318,445 VT SMALL/MID CAP VALUE FUND 3,886,079 4,228,490 VT TOTAL RETURN BOND FUND 566,443,767 569,699,213
6. DERIVATIVE TRANSACTIONS During the year ended December 31, 2009, VT Asset Allocation Fund entered into futures contracts for the purpose of adjusting exposure to various asset classes. At December 31, 2009, VT Asset Allocation Fund had long futures contracts outstanding as follows:
Initial Value at Net Unrealized Expiration Contract December 31, Appreciation/ Date Contracts Type Amount 2009 (Depreciation) ---------- --------- ---------------- ----------- ------------ -------------- VT ASSET ALLOCATION FUND March 2010 112 Long S&P 500 Index $30,556,250 $31,099,600 $543,350 March 2010 13 Long 30 Year US Treasury Bond 1,537,781 1,499,875 (37,906)
At December 31, 2009, VT Asset Allocation Fund had short futures contracts outstanding as follows:
Initial Value at Net Unrealized Expiration Contract December 31, Appreciation/ Date Contracts Type Amount 2009 (Depreciation) ---------- --------- ---------------- ------------ ------------ -------------- VT ASSET ALLOCATION FUND March 2010 242 Short 30 Year US Treasury Bond $(29,257,626) $(27,920,750) $1,336,876
VT Asset Allocation Fund had an average contract amount of $58,455,110 in futures contracts during the year ended December 31, 2009. A summary of derivative instruments by primary risk exposure is outlined in the following tables. The fair value of derivative instruments as of December 31, 2009 was as follows for the VT Asset Allocation Fund:
Asset Derivatives Liability Derivatives Derivatives not accounted ---------------------------------------- ---------------------------------------- for as hedging instruments Balance Sheet Location Fair value Balance Sheet Location Fair value - -------------------------- --------------------------- ---------- --------------------------- ---------- Equity contracts Net Assets - Net unrealized appreciation of futures $ 543,350 Interest rate contracts Net Assets - Net unrealized Net Assets - Net unrealized appreciation of futures 1,336,876 depreciation of futures $37,906
176 Wells Fargo Advantage Variable Trust Funds Notes to Financial Statements The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2009 was as follows for the VT Asset Allocation Fund:
Amount of Change in Unrealized Realized Gain or Gains or Losses on Derivatives not accounted Loss on Derivatives Derivatives for as hedging instruments Futures Futures - -------------------------- ------------------- -------------------- Equity contracts $6,260,951 $ 93,171 Interest rate contracts (403,660) 4,309,959 $5,857,291 $4,403,130
During the year ended December 31, 2009, VT International Core Fund entered into forward foreign currency exchange contracts for speculative purposes. At December 31, 2009, VT International Core Fund had forward currency exchange contracts outstanding as follows: Forward Foreign Currency Exchange Contracts to Buy:
Net Unrealized U.S. Value at Appreciation/ Exchange Date Contracts to Receive December 31, 2009 In Exchange for U.S. (Depreciation) - ------------- -------------------- ----------------- -------------------- -------------- 01/29/2010 41,888,000 JPY $449,812 $461,678 $(11,866)
Forward Foreign Currency Exchange Contracts to Sell:
Net Unrealized U.S. Value at Appreciation/ Exchange Date Contracts to Deliver December 31, 2009 In Exchange for U.S. (Depreciation) - ------------- -------------------- ----------------- -------------------- -------------- 01/29/2010 83,776,000 JPY $899,624 $910,480 $10,856 03/23/2010 417,000 CHF $403,311 $398,944 $(4,367)
VT International Core Fund had average contract amounts of $324,346 and $1,033,203 in forward foreign currency exchange contracts to buy and forward foreign currency exchange contracts to sell, respectively, during the year ended December 31, 2009. The fair value, realized gains or losses and change in unrealized gains or losses on derivative instruments are reflected in the appropriate financial statements. 7. BANK BORROWINGS The Trust and Wells Fargo Funds Trust (excluding the money market funds) are parties to a $125,000,000 revolving credit agreement with State Street Bank and Trust Company, whereby the Funds are permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Pursuant to the agreement entered into on September 8, 2009, interest under the credit agreement is charged to each Fund based on a borrowing rate equal to the higher of the Federal Funds rate in effect on that day plus 1.25% or the overnight LIBOR rate in effect on that day plus 1.25%. In addition, under the credit agreement, the Funds pay an annual commitment fee equal to 0.15% of the unused balance, which is allocated pro rata. Prior to September 8, 2009, the Funds participated in a $150,000,000 revolving credit agreement with the Bank of New York Mellon and paid interest at a rate equal to the Federal Funds rate plus 0.60% and an annual commitment fee equal to 0.15% of the unused balance, which was allocated on a pro rata basis. For the year ended December 31, 2009, there were no borrowings by any of the Funds under the agreement. 8. TEMPORARY GUARANTEE PROGRAM FOR VT MONEY MARKET FUND On March 31, 2009, the U.S. Department of the Treasury (the "Treasury") announced a second extension of the Temporary Guarantee Program for Money Market Funds beginning on May 1, 2009 through September 18, 2009 (the "Extended Program"). On April 8, 2009, the Board of Trustees of Wells Fargo Variable Trust unanimously approved the participation of VT Money Market Fund in the Extended Program. Consistent with the Fund's participation in the initial three-month term and the first extension, the Extended Program applies only to shareholders of record of the VT Money Market Fund as of September 19, 2008. Subject to certain conditions and limitations, in the event that the market-based net asset value per share of a Fund falls below $0.995 and the Fund liquidates its holdings, any shares held by an investor in the Fund as of the close of business on September 19, 2008, or Wells Fargo Advantage Variable Trust Funds 177 Notes to Financial Statements held by the investor when the market-based net asset value per share of the Fund falls below $0.995, whichever is less, are insured against loss under the Extended Program. Shares acquired by investors after September 19, 2008 are generally not eligible for protection under the Extended Program. Participation in the Extended Program required a payment to the Treasury in the amount of either 0.015% or 0.023%, depending upon the market-based net asset value of a Fund as of September 19, 2008 (the "Program Participation Payment"). The Board has determined that the Program Participation Payment is an extraordinary expense that will be borne by the Fund without regard to the expense cap currently in effect for such Fund. The Program Participation Payment is borne by the current assets of the Fund as a whole, notwithstanding that the Extended Program applied to only shareholders of record as of September 19, 2008, as described above. Participation on the Extended Program expired on September 18, 2009. 9. DISTRIBUTIONS TO SHAREHOLDERS The tax character of distributions paid during the years ended December 31, 2009 and December 31, 2008, were as follows:
Long-Term Ordinary Income Capital Gain ------------------------ ------------------ 2009 2008 2009 2008 ---------- ----------- ---- ----------- VT ASSET ALLOCATION FUND $2,236,644 $10,853,378 $0 $ 8,903,014 VT C&B LARGE CAP VALUE FUND 264,060 369,107 0 0 VT DISCOVERY FUND 0 0 0 0 VT EQUITY INCOME FUND 910,236 1,307,943 0 10,458,569 VT INTERNATIONAL CORE FUND 535,754 2,056,712 0 5,154,973 VT LARGE COMPANY CORE FUND 193,413 179,329 0 0 VT LARGE COMPANY GROWTH FUND 241,123 202,677 0 0 VT MONEY MARKET FUND 62,156 1,226,818 0 0 VT OPPORTUNITY FUND 0 51,681,923 0 96,237,711 VT SMALL CAP GROWTH FUND 0 27,294,979 0 19,529,301 VT SMALL/MID CAP VALUE FUND 108,823 384,739 0 2,347,004 VT TOTAL RETURN BOND FUND 4,528,721 5,436,067 0 0
As of December 31, 2009, the components of distributable earnings on a tax basis are shown on the table below. The difference between book basis and tax basis appreciation is attributable primarily to the tax deferral of losses on wash sales.
Undistributed Unrealized Ordinary Appreciation Capital Loss Income (Depreciation) Carryforward* ------------- -------------- ------------- VT ASSET ALLOCATION FUND $ 82,922 $(5,162,086) $(28,044,147) VT C&B LARGE CAP VALUE FUND 9,050 (985,601) (5,046,283) VT DISCOVERY FUND 0 14,324,795 (47,340,210) VT EQUITY INCOME FUND 5,009 (1,470,070) (3,845,630) VT INTERNATIONAL CORE FUND 113,901 2,134,176 (10,287,206) VT LARGE COMPANY CORE FUND 81,906 (1,370,591) (15,515,493) VT LARGE COMPANY GROWTH FUND 317,088 7,444,571 (29,400,035) VT MONEY MARKET FUND 1,272 0 0 VT OPPORTUNITY FUND 1,094,977 20,828,693 (77,648,668) VT SMALL CAP GROWTH FUND 0 3,119,166 (29,402,901) VT SMALL/MID CAP VALUE FUND 154,514 (593,791) (2,548,955) VT TOTAL RETURN BOND FUND 1,667,814 1,673,024 (748,606)
* This amount includes the post-October loss, which will reverse on the first day of the following fiscal year. 178 Wells Fargo Advantage Variable Trust Funds Notes to Financial Statements 10. INDEMNIFICATION Under the Trust's organizational documents, the officers and directors are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Trust may enter into contracts with service providers that contain a variety of indemnification clauses. The Trust's maximum exposure under these arrangements is dependent on future claims that may be made against the Funds and, therefore, cannot be estimated. 11. LEGAL AND REGULATORY MATTERS In 2004, the predecessor Strong Funds' investment adviser and affiliates (collectively, "Strong") entered into settlement agreements with certain regulators, including the SEC and the New York Attorney General ("NYAG") to settlement market-timing investigations. In the settlements, Strong agreed to pay investor restitution and civil penalties. On September 14, 2009, the SEC approved the terms of the Distribution Plan for the disgorgement and civil penalties to the predecessor Strong Fund shareholders, and those eligible investors will receive proceeds as a result of the Distribution Plan. The successor funds are not expected to receive any portion of the proceeds. The settlement with the NYAG imposed fee reductions across the predecessor Strong Fund complex, and Funds Management agreed to honor these fee reductions for the benefit of shareholders across the successor funds to total $35 million by May 2009. Although civil litigation against Strong and certain predecessor Strong Funds relating to these matters is continuing, neither the current adviser nor the successor funds is a party to any such suit. 12. SUBSEQUENT EVENTS At a meeting of the Board of Trustees held on January 11, 2010, the Trustees approved a Plan of Reorganization (the "Plan") for each of the specified funds ("Target Funds") listed in the table below. Under each Plan, certain existing Wells Fargo Advantage Funds ("Acquiring Funds"), series of Wells Fargo Variable Trust, will acquire the assets and assume the liabilities of the Target Fund in exchange for shares of Acquiring Fund.
TARGET FUND ACQUIRING FUND - ----------- ------------------------------------------------ Wells Fargo Advantage VT C&B Large Cap Value Fund Wells Fargo Advantage VT Intrinsic Value Fund(1) Wells Fargo Advantage VT Equity Income Fund Wells Fargo Advantage VT Intrinsic Value Fund(1) Wells Fargo Advantage VT Large Company Core Fund Wells Fargo Advantage VT Core Equity Fund(1) Wells Fargo Advantage VT Large Company Growth Fund Wells Fargo Advantage VT Omega Growth Fund(1)
(1.) This Fund will be newly created in order to receive the assets of the Target Fund(s) upon completion of the merger. A special meeting of shareholders of the Fund will be held in June 2010 to consider and vote on the Plan. In April 2010, materials for this meeting will be mailed to shareholders of record on or about March 10, 2010. On December 18, 2009, the Board of Trustees of the Trust approved the closing and liquidation of VT Money Market Fund. As of December 31, 2009, VT Money Market Fund is closed to new investors (insurance companies). The liquidation of the VT Money Market Fund is expected to occur on or about April 30, 2010. In January 2010, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update on "IMPROVING DISCLOSURES ABOUT FAIR VALUE MEASUREMENTS" which will require reporting entities to make new disclosures about the amount and reasons for significant transfers into and out of Level 1 and Level 2 fair value measurements, the input and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements and information on purchases, sales, issuances, and settlements on a gross basis in the reconciliation of Level 3 fair value measurements. Except for the detailed Level 3 roll forward disclosures, the disclosures are effective for annual and interim reporting periods beginning after December 15, 2009. The new disclosures about purchases, sales, issuances, and settlements in the roll forward activity for Level 3 fair value measurements are effective for interim and annual reporting periods beginning after December 15, 2010. Management of the Fund is currently evaluating the implications of this Accounting Standards Update and any impacts on the financial statements. Wells Fargo Advantage Variable Trust Funds 179 Report of Independent Registered Public Accounting Firm BOARD OF TRUSTEES AND SHAREHOLDERS OF WELLS FARGO VARIABLE TRUST: We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of the Wells Fargo Advantage VT Asset Allocation Fund, Wells Fargo Advantage VT C&B Large Cap Value Fund, Wells Fargo Advantage VT Discovery Fund, Wells Fargo Advantage VT Equity Income Fund, Wells Fargo Advantage VT International Core Fund, Wells Fargo Advantage VT Large Company Core Fund, Wells Fargo Advantage VT Large Company Growth Fund, Wells Fargo Advantage VT Money Market Fund, Wells Fargo Advantage VT Opportunity Fund, Wells Fargo Advantage VT Small Cap Growth Fund, Wells Fargo Advantage VT Small/Mid Cap Value Fund, and the Wells Fargo Advantage VT Total Return Bond Fund, (collectively the "Funds"), twelve of the Funds constituting the Wells Fargo Variable Trust as of December 31, 2009, and the related statements of operations for the year then ended, statements of changes in net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five year period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2009, by correspondence with the custodian and brokers or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the aforementioned funds of the Wells Fargo Variable Trust as of December 31, 2009, the results of their operations for the year then ended, the changes in their net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five period then ended, in conformity with U.S. generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Wells Fargo Advantage VT Money Market Fund will continue as a going concern. As discussed in note 14 to the financial statements, the Board of Trustees of the Trust has approved the closing and liquidation of the Wells Fargo Advantage VT Money Market Fund. The financial statements do not include any adjustments that might result from the decision to close and liquidate the Wells Fargo Advantage VT Money Market Fund. (KPMG LLP) Boston, Massachusetts February 25, 2010 180 Wells Fargo Advantage Variable Trust Funds Other Information (Unaudited) PROXY VOTING INFORMATION A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our Web site at WWW.WELLSFARGO.COM/ADVANTAGEFUNDS, or visiting the SEC Web site at WWW.SEC.GOV. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the Funds' Web site at WWW.WELLSFARGO.COM/ADVANTAGEFUNDS or by visiting the SEC Web site at WWW.SEC.GOV. TAX INFORMATION Pursuant to Section 853 of the Internal Revenue Code, the Funds designate the following amounts as foreign taxes paid for the year ended December 31, 2009. Foreign taxes paid for purposes of Section 853 may be less than actual foreign taxes paid for financial statement purposes.
Foreign Source Income* Creditable Foreign Taxes Paid ---------------------- ----------------------------- VT INTERNATIONAL FUND $552,992 $46,705
* The Fund listed above did not derive any income from ineligible foreign sources as defined under Section 901(j) of the Internal Revenue Code. Pursuant to Section 854(b)(2) of the Internal Revenue Code, the Funds listed below designates a percentage of its ordinary income dividends distributed during the year ended December 31, 2009 as qualifying for the corporate dividends-received deduction:
Dividend-Received Deduction (% of Ordinary Income Dividends) ----------------- VT ASSET ALLOCATION FUND 66.80% VT C&B LARGE CAP VALUE FUND 100.00% VT EQUITY INCOME FUND 100.00% VT LARGE COMPANY CORE FUND 100.00% VT LARGE COMPANY GROWTH FUND 100.00% VT SMALL/MID CAP VALUE FUND 43.44%
SPECIAL MEETING OF SHAREHOLDERS On July 1, 2009, a Special Meeting of Shareholders for VT International Core Fund was held to approve the following proposal. On March 31, 2009, the record date for the meeting, VT International Core Fund had 3,916,658 shares outstanding all of which were represented at the meeting. Proposal -- To approve a new investment sub-advisory agreement among Evergreen Investment Management Company, LLC, Wells Fargo Funds Management, LLC and the Trust, for VT International Core Fund: Shares voted "For" 3,511,203 Shares voted "Against" 262,462 Net assets voted "Abstain" 142,993 Wells Fargo Advantage Variable Trust Funds 181 Other Information (Unaudited) PORTFOLIO HOLDINGS INFORMATION The complete portfolio holdings for each Fund, except money market funds, are publicly available on the Funds' Web site (WWW.WELLSFARGO.COM/ADVANTAGEFUNDS) on a monthly, 30-day or more delayed basis, and for money market funds, on a monthly, seven-day delayed basis. In addition, top ten holdings information for each Fund is publicly available on the Funds'Web site on a monthly, seven-day or more delayed basis. Each Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q, which is available without charge by visiting the SEC Web site at WWW.SEC.GOV. In addition, each Fund's Form N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC, and at regional offices in New York City, at 233 Broadway, and in Chicago, at 175 West Jackson Boulevard, Suite 900. Information about the Public Reference Room may be obtained by calling 1-800-SEC-0330. BOARD OF TRUSTEES The following table provides basic information about the Board of Trustees (the "Trustees") of the Wells Fargo Funds Trust (the "Trust") and Officers of the Trust. This table should be read in conjunction with the Prospectus and the Statement of Additional Information1 of each Fund. Each of the Trustees and Officers listed below acts in identical capacities for each of the 133 funds comprising the Trust, Wells Fargo Variable Trust and Wells Fargo Master Trust (collectively the "Fund Complex"), except that the person occupying the office of Treasurer varies for specified Funds. All of the Trustees are also Members of the Audit and Governance Committees of each Trust in the Fund Complex. The mailing address of each Trustee and Officer is 525 Market Street, 12th Floor, San Francisco, CA 94105. Each Trustee and Officer serves an indefinite term, however, each Trustee serves such term until reaching the mandatory retirement age established by the Trustees. INDEPENDENT TRUSTEES
Position Held and Name and Age Length of Service(2) Principal Occupations During Past Five Years Other Directorships ------------ ------------------------- --------------------------------------------- ------------------- Peter G. Gordon Trustee, since 1998; Co-Founder, Chairman, President and CEO of None 67 Chairman, since 2005 Crystal Geyser. Water Company. (Lead Trustee since 2001) Isaiah Harris, Jr. Advisory Board Retired. Prior thereto, President and CEO of CIGNA Corporation; 57 Trustee, since 2008 BellSouth Advertising and Publishing Corp Deluxe Corporation from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Currently a member of the Iowa State University Foundation Board of Governors and a member of the Advisory Board of Iowa State University School of Business. Judith M. Johnson Trustee, since 2008 Retired. Prior thereto, Chief Executive None 60 Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is a certified public accountant and a certified managerial accountant. David F. Larcker Advisory Board James Irvin Miller Professor of Accounting at None 59 Trustee, since 2008 the Graduate School of Business, Stanford University, Director of Corporate Governance Research Program and Co-Director of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005. Olivia S. Mitchell Trustee, since 2006 Professor of Insurance and Risk Management, None 56 Wharton School, University of Pennsylvania. Director of the Boettner Center on Pensions and Retirement Research. Research associate and board member, Penn Aging Research Center. Research associate, National Bureau of Economic Research.
182 Wells Fargo Advantage Variable Trust Funds Other Information (Unaudited)
Position Held and Name and Age Length of Service(2) Principal Occupations During Past Five Years Other Directorships ------------ ------------------------- --------------------------------------------- ------------------- Timothy J. Penny Trustee, since 1996 President and CEO of Southern Minnesota None 58 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. Donald C. Willeke Trustee, since 1996 Principal of the law firm of Willeke & None 69 Daniels. General Counsel of the Minneapolis Employees Retirement Fund from 1984 to present.
OFFICERS
Position Held and Name and Age Length of Service(2) Principal Occupations During Past Five Years Other Directorships ------------ ------------------------- --------------------------------------------- ------------------- Karla M. Rabusch President, since 2003 Executive Vice President of Wells Fargo Bank, None 50 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 Secretary, since 2000; Senior Vice President and Secretary of None 49 Chief Legal Counsel, Wells Fargo Funds Management, LLC since since 2003 2001. Vice President and Managing Senior Counsel of Wells Fargo Bank, N.A. since 1996. Kasey Phillips(3) Treasurer, since 2009 Senior Vice President of Evergreen Investment None 38 Management Company, LLC since 2006 and currently the Treasurer of the Evergreen Funds since 2005. Vice President and Assistant Vice President of Evergreen Investment Services, Inc. from 1999 to 2006. David Berardi(4) Assistant Treasurer, Vice President of Evergreen Investment None 34 since 2009 Management Company, LLC since 2008. Assistant Vice President of Evergreen Investment Services, Inc. from 2004 to 2008. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC since 2004. Jeremy DePalma(4) Assistant Treasurer, Senior Vice President of Evergreen Investment None 35 since 2009 Management Company, LLC since 2008. Vice President, Evergreen Investment Services, Inc. from 2004 to 2007. Assistant Vice President, Evergreen Investment Services, Inc. from 2000 to 2004 and the head of the Fund Reporting and Control Team within Fund Administration since 2005. Debra Ann Early Chief Compliance Officer, Chief Compliance Officer of Wells Fargo Funds None 45 since 2007 Management, LLC since 2007. Chief Compliance Officer of Parnassus Investments from 2005 to 2007. Chief Financial Officer of Parnassus Investments from 2004 to 2007 and Senior Audit Manager of PricewaterhouseCoopers LLP from 1998 to 2004.
- ---------- (1.) The Statement of Additional Information includes additional information about the Funds'Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the Funds'Web site at WWW.WELLSFARGO.COM/ADVANTAGEFUNDS. (2.) Length of service dates reflects a Trustee's commencement of service with the Trust's predecessor entities. (3.) Effective November 1, 2009. (4.) Treasurer during the period from June 1, 2009 to October 31, 2009. Assistant Treasurer effective November 1, 2009. Wells Fargo Advantage Variable Trust Funds 183 List of Abbreviations The following is a list of common abbreviations for terms and entities which may have appeared in this report. ABAG -- Association of Bay Area Governments ADR -- American Depositary Receipt AMBAC -- American Municipal Bond Assurance Corporation AMT -- Alternative Minimum Tax ARM -- Adjustable Rate Mortgages BART -- Bay Area Rapid Transit CDA -- Community Development Authority CDO -- Collateralized Debt Obligation CDSC -- Contingent Deferred Sales Charge CGIC -- Capital Guaranty Insurance Company CGY -- Capital Guaranty Corporation CIFG -- CDC (Caisse des Depots et Consignations) IXIS Financial Guarantee COP -- Certificate of Participation CP -- Commercial Paper CTF -- Common Trust Fund DW&P -- Department of Water & Power DWR -- Department of Water Resources ECFA -- Educational & Cultural Facilities Authority EDFA -- Economic Development Finance Authority ETET -- Eagle Tax-Exempt Trust ETF -- Exchange-Traded Fund FFCB -- Federal Farm Credit Bank FGIC -- Financial Guaranty Insurance Corporation FHA -- Federal Housing Authority FHAG -- Federal Housing Agency FHLB -- Federal Home Loan Bank FHLMC -- Federal Home Loan Mortgage Corporation FNMA -- Federal National Mortgage Association FSA -- Farm Service Agency GDR -- Global Depositary Receipt GNMA -- Government National Mortgage Association GO -- General Obligation HCFR -- Healthcare Facilities Revenue HEFA -- Health & Educational Facilities Authority HEFAR -- Higher Education Facilities Authority Revenue HFA -- Housing Finance Authority HFFA -- Health Facilities Financing Authority HUD -- Housing & Urban Development IDA -- Industrial Development Authority IDAG -- Industrial Development Agency IDR -- Industrial Development Revenue LIBOR -- London Interbank Offered Rate LLC -- Limited Liability Company LOC -- Letter of Credit LP -- Limited Partnership MBIA -- Municipal Bond Insurance Association MFHR -- Multi-Family Housing Revenue MMD -- Municipal Market Data MTN -- Medium Term Note MUD -- Municipal Utility District NATL-RE -- National Public Finance Guarantee Corporation PCFA -- Pollution Control Finance Authority PCR -- Pollution Control Revenue PFA -- Public Finance Authority PFFA -- Public Facilities Financing Authority plc -- Public Limited Company PSFG -- Public School Fund Guaranty R&D -- Research & Development RDA -- Redevelopment Authority RDFA -- Redevelopment Finance Authority REITS -- Real Estate Investment Trusts SFHR -- Single Family Housing Revenue SFMR -- Single Family Mortgage Revenue SLMA -- Student Loan Marketing Association SPDR -- Standard & Poor's Depositary Receipts STIT -- Short-Term Investment Trust TBA -- To Be Announced TRAN -- Tax Revenue Anticipation Notes USD -- Unified School District XLCA -- XL Capital Assurance THIS PAGE IS INTENTIONALLY LEFT BLANK. THIS PAGE IS INTENTIONALLY LEFT BLANK. THIS PAGE IS INTENTIONALLY LEFT BLANK. (GRAPHIC) REDUCE CLUTTER. SAVE TREES. Sign up for electronic delivery of prospectuses and shareholder reports at www.wellsfargo.com/advantagedelivery (WELLS FARGO ADVANTAGE FUNDS LOGO) More information about WELLS FARGO ADVANTAGE FUNDS is available free upon request. To obtain literature, please write, e-mail, visit the Funds' Web site, or call: WELLS FARGO ADVANTAGE FUNDS P.O. Box 8266 Boston, MA 02266-8266 E-mail: wfaf@wellsfargo.com Web site: www.wellsfargo.com/advantagefunds Individual Investors: 1-800-222-8222 Retail Investment Professionals: 1-888-877-9275 Institutional Investment Professionals: 1-866-765-0778 THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF WELLS FARGO ADVANTAGE FUNDS. IF THIS REPORT IS USED FOR PROMOTIONAL PURPOSES, DISTRIBUTION OF THE REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS. FOR A PROSPECTUS CONTAINING MORE COMPLETE INFORMATION, INCLUDING CHARGES AND EXPENSES, CALL 1-800-222-8222 OR VISIT THE FUNDS' WEB SITE AT www.wellsfargo.com/advantagefunds. PLEASE CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE INVESTMENT CAREFULLY BEFORE INVESTING. THIS AND OTHER INFORMATION ABOUT WELLS FARGO ADVANTAGE FUNDS CAN BE FOUND IN THE CURRENT PROSPECTUS. READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR SEND MONEY. "Dow Jones" and "Dow Jones Target Date Indexes" are service marks of Dow Jones & Company, Inc., and have been licensed for use for certain purposes by Global Index Advisors, Inc., and Wells Fargo Funds Management, LLC. The Dow Jones Target Date Indexes are based in part on the Barclays Capital Bond Indexes, which are published by Barclays Capital Inc. The Wells Fargo Advantage Dow Jones Target Date Funds, based on the Dow Jones Target Date Indexes, are not sponsored, endorsed, sold or promoted by Dow Jones or Barclays Capital, and neither Dow Jones nor Barclays Capital makes any representation regarding the advisability of investing in such product(s) and/or about the quality, accuracy and/or completeness of the Dow Jones Target Date Indexes or the Barclays Capital Bond Indexes. IN NO EVENT SHALL DOW JONES, BARCLAYS CAPITAL OR ANY OF THEIR LICENSORS HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI. Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company. NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE (GRAPHIC) Printed on Recycled paper (C) 2010 Wells Fargo Funds Management, LLC. All rights reserved. www.wellsfargo.com/advantagefunds 120047 02-10 AVTF/AR124 12-09 ITEM 2. CODE OF ETHICS ======================= As of the end of the period, December 31, 2009, Wells Fargo Variable Trust has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its President and Treasurer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT ========================================= The Board of Trustees of Wells Fargo Variable Trust has determined that Thomas S. Goho is an audit committee financial expert, as defined in Item 3 of Form N-CSR. Mr. Goho is independent for purposes of Item 3 of Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES ====================== (a) AUDIT FEES - Provided below are the aggregate fees billed for the fiscal years ended December 31, 2008 and December 31, 2009 for professional services rendered by the principal accountant for the audit of the Registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements. For the fiscal years ended December 31, 2008 and December 31, 2009, the Audit Fees were $248,080 and $261,090 respectively. (b) AUDIT-RELATED FEES - There were no audit-related fees incurred for the fiscal years ended December 31, 2008 and December 31, 2009 for assurance and related services by the principal accountant for the Registrant. (c) TAX FEES - Provided below are the aggregate fees billed for the fiscal years ended December 31, 2008 and December 31, 2009 for professional services rendered by the principal accountant for the Registrant for tax compliance, tax advice, and tax planning. For the fiscal years ended December 31, 2008 and December 31, 2009, the Tax Fees were $0 and $0 respectively. The incurred Tax Fees are comprised of excise tax review services. For the fiscal years ended December 31, 2008 and December 31, 2009, the Tax Fees were $22,500 and $23,640 respectively. The incurred Tax Fees are comprised of tax preparation and consulting services. (d) ALL OTHER FEES - There were no other fees incurred for the fiscal years ended December 31, 2008 and December 31, 2009. (e)(1) The Chairman of the Audit Committees is authorized to pre-approve: (1) audit services to the mutual funds of Wells Fargo Funds Trust, Wells Fargo Variable Trust and Wells Fargo Master Trust (the "Funds"); (2) non-audit tax or compliance consulting or training services provided to the Funds by the independent auditors ("Auditors") if the fees for any particular engagement are not anticipated to exceed $50,000; and (3) non-audit tax or compliance consulting or training services provided by the Auditors to a Fund's investment adviser and its controlling entities (where pre-approval is required because the engagement relates directly to the operations and financial reporting of the Fund) if the fee to the Auditors for any particular engagement is not anticipated to exceed $50,000. For any such pre-approval sought from the Chairman, Management shall prepare a brief description of the proposed services. If the Chairman approves of such service, he or she shall sign the statement prepared by Management. Such written statement shall be presented to the full Committees at their next regularly scheduled meetings. (e)(2) Not Applicable. (f) Not Applicable. (g) Provided below are the aggregate non-audit fees billed for the fiscal years ended December 31, 2008 and December 31, 2009, by the principal accountant for services rendered to the Registrant, and rendered to the Registrant's investment adviser, and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the Registrant. For the fiscal years ended December 31, 2008 and December 31, 2009, the Registrant incurred non-audit fees in the amount of $120,000 and $70,000, respectively. The non-audit fees consist of SAS70 control reviews of Wells Fargo Bank, N.A.., the Funds' custodian. For the fiscal years ended December 31, 2008 and December 31, 2009, the Registrant's investment adviser incurred non-audit fees in the amount of $50,000 and $45,000, respectively. The non-audit fees for the year-ended December 31, 2008 consist of procedure reviews for mergers associated with fund reorganizations. The non-audit fees for the year-ended December 31, 2009 relates to examination of securities pursuant to rule 206 (4)-2 under the Investment Advisors Act of 1940. For the fiscal year ended December 31, 2008, the Registrant's investment adviser incurred non-audit fees in the amount of $158,300. The non-audit fees for the year ended December 31, 2008 consist of procedure reviews for mergers associated with fund reorganizations. (h) The Registrant's audit committee of the board of directors has determined that non-audit services rendered to the registrant's investment adviser, that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of the Regulation S-X, does not compromise the independence of the principal accountant. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS ============================================= Not applicable. ITEMS 6. SCHEDULE OF INVESTMENTS ================================= The Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES =============================================================== Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES ============================================================================= Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASES ============================================================================= Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ============================================================ The Governance Committee (the "Committee") of the Board of Trustees of the registrant (the "Trust") has adopted procedures by which a shareholder of any series of the Trust may submit properly a nominee recommendation for the Committee's consideration. The shareholder must submit any such recommendation (a "Shareholder Recommendation") in writing to the Trust, to the attention of the Trust's Secretary, at the address of the principal executive offices of the Trust. The Shareholder Recommendation must be delivered to, or mailed and received at, the principal executive offices of the Trust not less than forty-five (45) calendar days nor more than seventy-five (75) calendar days prior to the date of the Committee meeting at which the nominee would be considered. The Shareholder Recommendation must include: (i) a statement in writing setting forth (A) the name, age, date of birth, business address, residence address and nationality of the person recommended by the shareholder (the "candidate"); (B) the series (and, if applicable, class) and number of all shares of the Trust owned of record or beneficially by the candidate, as reported to such shareholder by the candidate; (C) any other information regarding the candidate called for with respect to director nominees by paragraphs (a), (d), (e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22 of Rule 14a-101 (Schedule 14A) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), adopted by the Securities and Exchange Commission (or the corresponding provisions of any regulation or rule subsequently adopted by the Securities and Exchange Commission or any successor agency applicable to the Trust); (D) any other information regarding the candidate that would be required to be disclosed if the candidate were a nominee in a proxy statement or other filing required to be made in connection with solicitation of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (E) whether the recommending shareholder believes that the candidate is or will be an "interested person" of the Trust (as defined in the Investment Company Act of 1940, as amended) and, if not an "interested person," information regarding the candidate that will be sufficient for the Trust to make such determination; (ii) the written and signed consent of the candidate to be named as a nominee and to serve as a Trustee if elected; (iii) the recommending shareholder's name as it appears on the Trust's books; (iv) the series (and, if applicable, class) and number of all shares of the Trust owned beneficially and of record by the recommending shareholder; and (v) a description of all arrangements or understandings between the recommending shareholder and the candidate and any other person or persons (including their names) pursuant to which the recommendation is being made by the recommending shareholder. In addition, the Committee may require the candidate to interview in person and furnish such other information as it may reasonably require or deem necessary to determine the eligibility of such candidate to serve as a Trustee of the Trust. ITEM 11. CONTROLS AND PROCEDURES ================================ (a) The President and Treasurer have concluded that the Wells Fargo Funds Trust (the "Trust") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons based on their evaluation of these controls and procedures as of a date within 90 days of the filing of this report. (b) There were no significant changes in the Trust's internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second quarter of the period covered by this report that materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS ================= (a)(1) Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as Exhibit 10a. (a)(2) Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. (a)(3) Not applicable. (b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is filed and attached hereto as Exhibit 99.906CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Wells Fargo Funds Trust By: /s/ Karla M. Rabusch Karla M. Rabusch President Date: February 25, 2010 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated. By: /s/ Karla M. Rabusch Karla M. Rabusch President Date: February 25, 2010 By: /s/ Kasey L. Phillips Kasey L. Phillips Treasurer Date: February 25, 2010 EX-99.CERT 2 g56208_cert302.txt G56208_CERT302 CERTIFICATION ------------- I, Karla M. Rabusch, certify that: 1. I have reviewed this report on Form N-CSR of the Wells Fargo Advantage VT Asset Allocation Fund, Wells Fargo Advantage VT Equity Income Fund, Wells Fargo Advantage VT C&B Large Cap Value Fund, Wells Fargo Advantage VT Discovery Fund, Wells Fargo Advantage VT Large Company Core Fund, Wells Fargo Advantage VT International Core Fund, Wells Fargo Advantage VT Large Company Growth Fund, Wells Fargo Advantage VT Money Market Fund, Wells Fargo Advantage VT Small/Mid Cap Value Fund, Wells Fargo Advantage VT Opportunity Fund, Wells Fargo Advantage VT Small Cap Growth Fund, and the Wells Fargo Advantage VT Total Return Bond Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal controls over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and P b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: February 25, 2010 /s/ Karla M. Rabusch - -------------------- Karla M. Rabusch President Wells Fargo Funds Trust Exhibit 99.CERT CERTIFICATION ------------- I, Kasey L. Phillips, certify that: 1.I have reviewed this report on Form N-CSR of the Wells Fargo Advantage VT Asset Allocation Fund, Wells Fargo Advantage VT Equity Income Fund, Wells Fargo Advantage VT C&B Large Cap Value Fund, Wells Fargo Advantage VT Discovery Fund, Wells Fargo Advantage VT Large Company Core Fund, Wells Fargo Advantage VT International Core Fund, Wells Fargo Advantage VT Large Company Growth Fund, Wells Fargo Advantage VT Money Market Fund, Wells Fargo Advantage VT Small/Mid Cap Value Fund, Wells Fargo Advantage VT Opportunity Fund, Wells Fargo Advantage VT Small Cap Growth Fund, and the Wells Fargo Advantage VT Total Return Bond Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal controls over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: February 25, 2010 /s/ Kasey L. Phillips - --------------------- Kasey L. Phillips Treasurer Wells Fargo Funds Trust Exhibit 99.CERT EX-99.906CERT 3 g56208_cert906.txt G56208_CERT906 SECTION 906 CERTIFICATION ------------------------- Pursuant to 18 U.S.C. ss. 1350, the undersigned officer of Wells Fargo Variable Trust (the "Trust"), hereby certifies, to the best of her knowledge, that the Trust's report on Form N-CSR for the period ended December 31, 2009 (the "Report") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. Date: February 25, 2010 /s/ Karla M. Rabusch Karla M. Rabusch President Wells Fargo Funds Trust This certification is being furnished to the Securities and Exchange Commission pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with the Securities and Exchange Commission. SECTION 906 CERTIFICATION ------------------------- Pursuant to 18 U.S.C. ss. 1350, the undersigned officer of Wells Fargo Variable Trust (the "Trust"), hereby certifies, to the best of his knowledge, that the Trust's report on Form N-CSR for the period ended December 31, 2009 (the "Report") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. Date: February 25, 2010 /s/ Kasey L. Phillips Kasey L. Phillips Treasurer Wells Fargo Funds Trust This certification is being furnished to the Securities and Exchange Commission pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with the Securities and Exchange Commission. EX-99.CODE ETH 4 g56208_codeofethics.txt G56208_CODEOFETHICS WELLS FARGO FUNDS TRUST WELLS FARGO MASTER TRUST WELLS FARGO VARIABLE TRUST JOINT CODE OF ETHICS FOR PRINCIPAL EXECUTIVE OFFICER AND SENIOR FINANCIAL OFFICERS I. COVERED OFFICERS / PURPOSE OF THE CODE This Code of Ethics ("Code") of Wells Fargo Funds Trust, Wells Fargo Master Trust and Wells Fargo Variable Trust (collectively, the "Trusts" and each, "a Trust") applies to each Trust's Principal Executive Officer, Principal Financial Officer and any other Trust officer's listed on Exhibit A (the "Covered Officers") for the purpose of promoting: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely and understandable financial disclosure in reports and documents that a Trust files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Trust; o compliance with applicable laws and governmental rules and regulations; o the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and o accountability for adherence to the Code. Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. II. COVERED OFFICERS SHOULD HANDLE ETHICALLY BOTH ACTUAL AND APPARENT CONFLICTS OF INTEREST OVERVIEW. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his or her service to, a Trust. For example, a conflict of interest would arise if a Covered Officer, or a member of his or her family, receives improper personal benefits as a result of his or her position with the Trust. Certain conflicts of interest arise out of the relationships between Covered Officers and the Trust and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Trust because of their status as "affiliated persons" of the Trust. The compliance programs and procedures of the Trust and Wells Fargo Funds Management, LLC (the "Adviser") are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Trust and the Adviser, of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Trust or for the Adviser, or for both), be involved in establishing policies and implementing decisions that will have different effects on the Adviser and the Trust. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Trust and the Adviser and is consistent with the performance by the Covered Officers of their duties as officers of the Trust. Each Covered Officer recognizes that, as an officer of a Trust, he or she has a duty to act in the best interests of the Trust and its shareholders. If a Covered Officer believes that his or her responsibilities as an officer or employee of the Adviser are likely to materially compromise his or her objectivity or his or her ability to perform the duties of his or her role as an officer of the Trust, he or she should consult with the Chief Legal Officer. Under appropriate circumstances, a Covered Officer should also consider whether to present the matter to the Board. In addition, it is recognized by the Trust's Board of Trustees ("Board") that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Trust. * * * * Each Covered Officer must: o not use his or her personal influence or personal relationships improperly to influence investment decisions or financial reporting by a Trust whereby the Covered Officer would benefit personally to the detriment of the Trust; o not cause the Trust to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of a Trust; o not use material non-public knowledge of portfolio transactions made or contemplated for the Trust to trade personally or cause others to trade personally in contemplation of the market effect of such transactions; o not retaliate against any other Covered Officer or any employee of a Trust or its affiliated persons for reports of potential violations that are made in good 2 faith; and o not engage in personal, business or professional relationships or dealings that would impair his or her independence of judgment or adversely affect the performance of his or her duties in the best interests of the Trust and their shareholders. There are some conflict of interest situations that should always be approved in advance by the Chief Legal Officer of the Trust (the "Chief Legal Officer") if material. Examples of these include: o service as a director on the board of any public or private for-profit company (provided, however, that a Covered Officer who is employed by another company (e.g., Wells Fargo) may serve as a director of such company or any entity, controlling, controlled by, or under common control with, such company); o acquiring a financial interest in any company that provides services to the Trust (provided, however, that a Covered Officer who is employed by another company (e.g., Wells Fargo) may have an ownership interest in his or her employer or the employer's parent company); o the receipt of any entertainment or gifts from any person or company with which the Trust has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; o any consulting or employment relationship with any of the Trust's service providers, other than with the primary employer of the Covered Officer; and o a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Trust for effecting portfolio transactions or for selling or redeeming shares, other than an interest arising from the Covered Officer's primary employment, such as compensation or equity ownership. III. DISCLOSURE AND COMPLIANCE Each Covered Officer should familiarize himself or herself with the disclosure requirements generally applicable to the Trust. Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Trust to others, whether within or outside the Trust, including to the Board and the Trust's auditors, and to governmental regulators and self-regulatory organizations. Each Covered Officer should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the Trust and the Adviser with the goal of promoting full, fair, accurate, timely and understandable 3 disclosure in the reports and documents the Trust files with, or submits to, the SEC and in other public communications made by the Trust. It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. Each Covered Officer should, consistent with his or her responsibilities, exercise appropriate supervision over and assist relevant Trust service providers in developing financial information and other disclosure that complies with relevant law and presents information in a clear, comprehensible and complete manner. Each Covered Officer is responsible for the accuracy of the records and reports that he or she is responsible for maintaining. The books and records of the Trust shall meet the highest standards and accurately reflect the true nature of the transactions they record. The Covered Officers must not create false or misleading documents or accounting, financial or electronic records for any purpose, and must not direct any other person to do so. If a Covered Officer becomes aware that information filed with the SEC or made available to the public contains any false or misleading information or omits to disclose necessary information, he shall promptly report it to Chief Legal Officer for a determination as to what, if any, corrective action is necessary or appropriate. No undisclosed or unrecorded account or fund shall be established for any purpose. No false or misleading entries shall be made in a Trust's books or records for any reason. No disbursement of a Trust's assets shall be made without adequate supporting documentation or for any purpose other than as described in the Trust's documents or contracts. A Trust will maintain and preserve for a period of not less than six (6) years from the date such action is taken, the first two (2) years in an easily accessible place, a copy of the information or materials supplied to the Board: (i) that provided the basis for any amendment or waiver to this Code, and (ii) relating to any violation of the Code and sanctions imposed for such violation, together with a written record of the approval or action taken by the Board. IV. REPORTING AND ACCOUNTABILITY Each Covered Officer must: o upon adoption of the Code (or thereafter upon becoming a Covered Officer), affirm in writing (in the form attached to this Code) to the Board that he or she has received, read, and understands the Code; o annually thereafter affirm in writing (in the form attached to this Code) to the Board that he or she has complied with the requirements of the Code; and 4 o notify the Chief Legal Officer of the Trust promptly if he or she knows of any violation of this Code. Failure to do so is itself a violation of this Code. The Chief Legal Officer is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. While the Chief Legal Officer in authorized to interpret this Code, an approval of a situation that is expressly prohibited by this Code is deemed to be a "waiver" and can be approved only by the Board. The Trust will follow these procedures in investigating and enforcing this Code: o the Chief Legal Officer will take all appropriate action to investigate any potential violations reported to him or her; o if, after such investigation, the Chief Legal Officer believes that no violation has occurred, the Chief Legal Officer is not required to take any further action; o any matter that the Chief Legal Officer believes is a violation will be reported to the Board; o if the Board concurs that a violation has occurred, it will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the Adviser; or a recommendation to dismiss the Covered Officer; o the Board will be responsible for granting waivers, as appropriate (a "waiver" is the approval of a situation that is expressly prohibited by this Code); and o any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. V. OTHER POLICIES AND PROCEDURES This Code shall be the sole code of ethics adopted by the Trusts for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Trusts or the Adviser govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The codes of ethics adopted by the Trusts and the Adviser under Rule 17j-1 under the Investment Company Act are separate requirements applying to the Covered Officers and others, and are not part of this Code. 5 VI. AMENDMENTS Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Board, including a majority of independent Trustees. VII. CONFIDENTIALITY All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except upon request of the SEC or another regulatory agency, or as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than Board and its counsel. VIII. INTERNAL USE The Code is intended solely for the internal use by each Trust and does not constitute an admission, by or on behalf of any Trust, as to any fact, circumstance, or legal conclusion. Adopted: August 5, 2003 6 EXHIBIT A PERSONS COVERED BY THE CODE Karla Rabusch, President of each Trust Kasey L. Phillips, Treasurer of each Trust Exhibit A amended: March 3, 2010 7 EXHIBIT B COMPLIANCE CERTIFICATIONS INITIAL CERTIFICATION I CERTIFY THAT I: (I) HAVE RECEIVED, READ AND REVIEWED THE JOINT CODE OF ETHICS FOR PRINCIPAL EXECUTIVE OFFICER AND SENIOR FINANCIAL OFFICERS (the "Code"); (II) UNDERSTAND THE POLICIES AND PROCEDURES IN THE CODE; (III) RECOGNIZE THAT I AM SUBJECT TO SUCH POLICIES AND PROCEDURES; (IV) UNDERSTAND THE PENALTIES FOR NON-COMPLIANCE; (V) WILLFULLY COMPLY WITH THE CODE AND ANY RELATED PROCEDURES; (VI) ACKNOWLEDGE MY RESPONSIBILITY TO REPORT ANY VIOLATION OF THE CODE TO LEGAL COUNSEL; (VII) UNDERSTAND THAT THE TRUSTS HAVE THE RIGHT TO AMEND, INTERPRET, MODIFY OR WITHDRAW ANY OF THE PROVISIONS OF THE CODE AT ANY TIME IN THEIR SOLE DISCRETION, WITH OR WITHOUT NOTICE; AND (VIII) HAVE FULLY AND ACCURATELY COMPLETED THIS CERTIFICATE. Signature: -------------------------------------------------------- (Please print) Name: -------------------------------------------------------- Date Submitted: -------------------------------------------------------- Date Due: -------------------------------------------------------- 8 ANNUAL CERTIFICATION I CERTIFY THAT I: (I) HAVE RECEIVED, READ AND REVIEWED THE JOINT CODE OF ETHICS FOR PRINCIPAL EXECUTIVE OFFICER AND SENIOR FINANCIAL OFFICERS (the "Code"); (II) UNDERSTAND THE POLICIES AND PROCEDURES IN THE CODE; (III) RECOGNIZE THAT I AM SUBJECT TO SUCH POLICIES AND PROCEDURES; (IV) UNDERSTAND THE PENALTIES FOR NON-COMPLIANCE; (V) HAVE FULLY COMPLIED WITH THE CODE AND ANY RELATED PROCEDURES; (VI) HAVE FULLY DISCLOSED ANY EXCEPTIONS TO MY COMPLIANCE WITH THE CODE; (VII) WILLFULLY COMPLY WITH THE CODE OF ETHICS; (VIII) ACKNOWLEDGE MY RESPONSIBILITY TO REPORT ANY VIOLATION OF THE CODE TO LEGAL COUNSEL; (IX) UNDERSTAND THAT THE TRUSTS HAVE THE RIGHT TO AMEND, INTERPRET, MODIFY OR WITHDRAW ANY OF THE PROVISIONS OF THE CODE AT ANY TIME IN THEIR SOLE DISCRETION, WITH OR WITHOUT NOTICE; AND (X) HAVE FULLY AND ACCURATELY COMPLETED THIS CERTIFICATE EXCEPTION(S): - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Signature: -------------------------------------------------------- (Please print) Name: -------------------------------------------------------- Date Submitted: -------------------------------------------------------- Date Due: -------------------------------------------------------- 9 -----END PRIVACY-ENHANCED MESSAGE-----