N-CSRS 1 d869403dncsrs.htm N-CSRS N-CSRS

LOGO

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-CSRS

 

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-09253

 

 

Wells Fargo Funds Trust

(Exact name of registrant as specified in charter)

 

 

525 Market St., San Francisco, CA 94105

(Address of principal executive offices) (Zip code)

 

 

Catherine Kennedy

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: 800-222-8222

 

 

Date of fiscal year end: June 30

Registrant is making a filing for 12 of its series:

Wells Fargo Alternative Risk Premia Fund, Wells Fargo California Limited-Term Tax-Free Fund, Wells Fargo California Tax-Free Fund, Wells Fargo High Yield Municipal Bond Fund, Wells Fargo Intermediate Tax/AMT-Free Fund, Wells Fargo Minnesota Tax-Free Fund, Wells Fargo Municipal Bond Fund, Wells Fargo Pennsylvania Tax-Free Fund, Wells Fargo Short-Term Municipal Bond Fund, Wells Fargo Strategic Municipal Bond Fund, Wells Fargo Ultra Short-Term Municipal Income Fund, and Wells Fargo Wisconsin Tax-Free Fund.

Date of reporting period: December 31, 2019

 

 

 


ITEM 1. REPORT TO STOCKHOLDERS

 


LOGO

Semi-Annual Report

December 31, 2019

 

Wells Fargo

Minnesota Tax-Free Fund

 

 

 

 

Beginning on January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, paper copies of the Wells Fargo Funds’ annual and semi-annual shareholder reports issued after this date will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-222-8222 or by enrolling at wellsfargo.com/advantagedelivery.

You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call 1-800-222-8222. Your election to receive reports in paper will apply to all Wells Fargo Funds held in your account with your financial intermediary or, if you are a direct investor, to all Wells Fargo Funds that you hold.


 

 

Reduce clutter.

Save trees.

Sign up for electronic delivery of prospectuses and shareholder reports at wellsfargo.com/advantagedelivery

 

The views expressed and any forward-looking statements are as of December 31, 2019, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Asset Management. Discussions of individual securities, or the markets generally, or any Wells Fargo Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Asset Management and the Fund disclaim any obligation to publicly update or revise any views expressed or forward-looking statements.

 

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE    MAY LOSE VALUE


 

 

Wells Fargo Minnesota Tax-Free Fund  |  1


Letter to shareholders (unaudited)

 

LOGO

Andrew Owen

President

Wells Fargo Funds

“After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July.”

Dear Shareholder:

We are pleased to offer you this semi-annual report for the Wells Fargo Minnesota Tax-Free Fund for the six-month period that ended December 31, 2019. Despite periods of market volatility, the year was strongly positive for financial markets as supportive central banks more than offset concerns over slowing global economic growth and international trade tensions.

Overall, both fixed-income and equity investors enjoyed healthy returns. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 10.92% and international stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned 6.96%. The MSCI EM Index (Net)3 gained 7.09%. For bond investors, the Bloomberg Barclays U.S. Aggregate Bond Index4 added 2.45%, the Bloomberg Barclays Global Aggregate ex-USD Index5 returned 0.09%, the Bloomberg Barclays Municipal Bond Index6 gained 2.32%, and the ICE BofA U.S. High Yield Index7 added 3.86%.

Sentiment turned positive, driven by central bank support.

After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July. The gains, primarily driven by geopolitical and monetary policy events, pushed equity markets to new highs. European Central Bank President Mario Draghi indicated the bank was ready to cut rates or buy more assets to prop up inflation if needed. President Trump backed off of tariff threats against Mexico and China. The U.S. Federal Reserve (Fed) implemented a 0.25% federal funds rate cut in July.

Throughout the summer, U.S.-China trade tensions simmered. Major U.S. stock market indices closed July with the worst weekly results of the year. Bond prices gained as Treasury yields fell to multiyear lows, and the yield curve inverted at multiple points along the 30-year arc.

Evidence of a continued global economic slowdown mounted, and central banks in China, New Zealand, and Thailand cut interest rates. Industrial and manufacturing data declined in China, Canada, Japan, and Germany. Adding to global uncertainty, Italy’s prime minister resigned, many feared a crackdown in Hong Kong as protestors sustained their calls for reform, and Boris Johnson planned to suspend Parliament as Brexit’s deadline neared.

In the U.S., the Fed cut interest rates a second time in September. U.S. manufacturing data disappointed investors. The U.S. Congress announced it would pursue an impeachment investigation of President Trump. Meanwhile, the Brexit impasse showed no signs of resolution. Officials in China warned of the negative economic impact of tariffs and trade restrictions. Although the S&P 500 Index finished the third quarter with the best year-to-date returns in more than 20 years, concerns about future returns remained.

 

 

 

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 Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the United States. 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. You cannot invest directly in an index.

 

3 

The MSCI Emerging Markets (EM) Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index.

 

4

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index.

 

5

The Bloomberg Barclays Global Aggregate ex-USD Index is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S. dollar-denominated debt market. You cannot invest directly in an index.

 

6 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

7

The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2020. ICE Data Indices, LLC. All rights reserved.

 

 

2  |  Wells Fargo Minnesota Tax-Free Fund


Letter to shareholders (unaudited)

 

The fourth quarter started on a strong note, with a relaxing of U.S.-China trade tensions in October along with renewed optimism for a U.K. Brexit deal and positive macroeconomic data. The initial estimate of U.S. third-quarter gross domestic product growth was a 1.9% annualized rate, while the U.S. unemployment rate fell to a 50-year low of 3.5% in September. However, despite resilience among U.S. consumers, business confidence declined while manufacturing activity contracted. Concerned with a potential economic slowdown, the Fed lowered interest rates another quarter point in late October, its third rate cut in four months. This helped push the S&P 500 Index to a new all-time high, while emerging market equities rallied and global bonds declined overall, reflecting a broad pickup in risk appetite.

Equity markets continued to rally in November despite ongoing geopolitical risks. Hopes for a U.S.-China trade deal buoyed investor confidence. U.S. business sentiment improved slightly, and manufacturing and services activity picked up. Throughout the month, central bank actions were on hold. With that positive backdrop, developed market equities outpaced those in emerging markets, and U.S. stocks outperformed non-U.S. stocks overall. While consumer confidence and purchasing manager activity rose in the eurozone, China reported weakening manufacturing and consumer data. Bond yields rose marginally, leading to slightly negative returns for global government and investment-grade corporate bonds.

Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal, with some details to be worked out. That, along with the landslide election win by the pro-Brexit U.K. Conservative Party and ongoing central bank support, gave investors a greater sense of certainty. U.S. economic indicators were broadly positive, with the exception of manufacturing activity and business confidence. Consumer confidence was resilient, fed by a robust labor market, tame inflation, and lower interest rates, which boosted housing affordability and homebuyer activity. The impeachment of U.S. President Donald Trump, while historically noteworthy, had little impact on markets. Meanwhile, slowing Chinese economic activity, due in part to the trade war, led to further government stimulus at year-end through lower reserve ratios, allowing banks to lend more money.

Don’t let short-term uncertainty derail long-term investment goals.

Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.

Thank you for choosing to invest with Wells Fargo Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.

Sincerely,

 

LOGO

Andrew Owen

President

Wells Fargo Funds

 

“Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal”

 

 

For further information about your Fund, contact your investment professional, visit our website at wfam.com,

or call us directly at 1-800-222-8222.

 

 

 

Wells Fargo Minnesota Tax-Free Fund  |  3


Performance highlights (unaudited)

 

Investment objective

The Fund seeks current income exempt from federal income tax and Minnesota individual income tax.

Manager

Wells Fargo Funds Management, LLC

Subadviser

Wells Capital Management Incorporated

Portfolio managers

Wendy Casetta

Bruce R. Johns

Average annual total returns (%) as of December 31, 2019

 

 
        Including sales charge     Excluding sales charge     Expense ratios1 (%)  
 
    Inception date   1 year     5 year     10 year     1 year     5 year     10 year     Gross     Net2  
                   
Class A (NMTFX)   1-12-1988     1.09       1.71       3.10       5.86       2.65       3.58       0.94       0.85  
                   
Class C (WMTCX)   4-8-2005     4.07       1.89       2.81       5.07       1.89       2.81       1.69       1.60  
                   
Administrator Class (NWMIX)   8-2-1993                       6.12       2.91       3.84       0.88       0.60  
                   
Institutional Class (WMTIX)3   10-31-2016                       6.20       2.98       3.87       0.61       0.52  
                   
Bloomberg Barclays Municipal Bond Index4                         7.54       3.53       4.34              
                   
Bloomberg Barclays Minnesota Municipal Bond Index5                         6.67       3.03       3.79              

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, wfam.com.

Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.

For Class A shares, the maximum front-end sales charge is 4.50%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Administrator Class and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.

Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. 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). The Fund is exposed to Minnesota municipal securities risk and high-yield securities risk. Consult the Fund’s prospectus for additional information on these and other risks. A portion of the Fund’s income may be subject to federal, state, and/ or local income taxes or the Alternative Minimum Tax (AMT). Any capital gains distributions may be taxable.

 

Please see footnotes on page 5.

 

 

4  |  Wells Fargo Minnesota Tax-Free Fund


Performance highlights (unaudited)

 

Effective maturity distribution as of December 31, 20196
LOGO
Credit quality as of December 31, 20197
LOGO
 

 

 

1 

Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report.

 

2 

The manager has contractually committed through October 31, 2020, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.85% for Class A, 1.60% for Class C, 0.60% for Administrator Class, and 0.52% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Without this cap, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses.

 

3 

Historical performance shown for the Institutional Class shares prior to their inception reflects the performance of the Administrator Class shares, and is not adjusted to reflect Institutional Class expenses. If these expenses had been included, returns for Institutional Class shares would be higher.

 

4 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

5 

The Bloomberg Barclays Minnesota Municipal Bond Index is the Minnesota component of the Bloomberg Barclays Municipal Bond Index. You cannot invest directly in an index.

 

6 

Amounts are calculated based on the long-term total investments of the Fund. These amounts are subject to change and may have changed since the date specified.

 

7 

The credit quality distribution of portfolio holdings reflected in the chart is based on ratings from Standard & Poor’s, Moody’s Investors Service, and/ or Fitch Ratings Ltd. Credit quality ratings apply to the underlying holdings of the Fund and not to the Fund itself. The percentages of the Fund’s portfolio with the ratings depicted in the chart are calculated based on the total market value of fixed income securities held by the Fund. If a security was rated by all three rating agencies, the middle rating was utilized. If rated by two of three rating agencies, the lower rating was utilized, and if rated by one of the rating agencies, that rating was utilized. Standard & Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories. Standard & Poor’s rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody’s rates the creditworthiness of bonds, ranging from Aaa (highest) to C (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Moody’s rates the creditworthiness of short-term U.S. tax-exempt municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Credit quality distribution is subject to change and may have changed since the date specified.

 

 

Wells Fargo Minnesota Tax-Free Fund  |  5


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 and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing 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 period from July 1, 2019 to December 31, 2019.

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) and contingent deferred sales charges. 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
account  value
7-1-2019
     Ending
account value
12-31-2019
     Expenses
paid during
the period¹
     Annualized net
expense ratio
 
         

Class A

           

Actual

   $ 1,000.00      $ 1,016.72      $ 4.31        0.85

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,020.86      $ 4.32        0.85
         

Class C

           

Actual

   $ 1,000.00      $ 1,012.90      $ 8.10        1.60

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,017.09      $ 8.11        1.60
         

Administrator Class

           

Actual

   $ 1,000.00      $ 1,018.94      $ 3.04        0.60

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.12      $ 3.05        0.60
         

Institutional Class

           

Actual

   $ 1,000.00      $ 1,019.34      $ 2.64        0.52

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.52      $ 2.64        0.52

 

1

Expenses paid is equal to the annualized net expense ratio of each class 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).

 

 

6  |  Wells Fargo Minnesota Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

    

Interest

rate

   

Maturity

date

     Principal      Value  
Municipal Obligations: 97.83%          

Guam: 0.93%

         
Airport Revenue: 0.40%                          

Guam Port Authority Series 2018B

    5.00     7-1-2035      $ 605,000      $ 718,764  
         

 

 

 
Water & Sewer Revenue: 0.53%                          

Guam Government Waterworks Authority Water & Wastewater System Project Series 2013

    5.25       7-1-2022        865,000        939,208  
         

 

 

 
            1,657,972  
         

 

 

 

Illinois: 1.22%

         
GO Revenue: 0.91%                          

Illinois Refunding Bond Series 2018A

    5.00       10-1-2021        500,000        526,635  

Kane, Cook & DuPage Counties IL School District #46 Series 2015D

    5.00       1-1-2027        965,000        1,090,923  
            1,617,558  
         

 

 

 
Miscellaneous Revenue: 0.31%                          

Illinois Series 2017D

    5.00       11-1-2022        500,000        539,710  
         

 

 

 
            2,157,268  
         

 

 

 

Minnesota: 95.39%

         
Airport Revenue: 2.44%                          

Minneapolis & St. Paul MN Metropolitan Airports Commission Series 2014A

    5.00       1-1-2032        750,000        850,485  

Minneapolis & St. Paul MN Metropolitan Airports Commission Series 2016C

    5.00       1-1-2046        1,000,000        1,182,270  

Minneapolis & St. Paul MN Metropolitan Airports Commission Series 2016D

    5.00       1-1-2041        250,000        292,250  

Minneapolis & St. Paul MN Metropolitan Airports Commission Subordinate Bond Series 2014A

    5.00       1-1-2029        500,000        570,535  

Minneapolis & St. Paul MN Metropolitan Airports Commission Subordinate Bond Series 2014B

    5.00       1-1-2026        1,250,000        1,424,250  
            4,319,790  
         

 

 

 
Education Revenue: 21.94%                          

Anoka County MN Charter School Series A

    3.65       6-1-2020        185,000        186,874  

Anoka County MN Charter School Series A

    3.75       6-1-2021        245,000        252,458  

Anoka County MN Charter School Series A

    5.00       6-1-2027        510,000        528,243  

Anoka County MN Charter School Series A

    5.00       6-1-2032        300,000        310,731  

Anoka County MN Charter School Series A

    5.00       6-1-2043        1,100,000        1,139,347  

Brooklyn Park MN Charter School Athlos Leadership Academy Project Series 2015A

    4.00       7-1-2020        100,000        100,282  

Brooklyn Park MN Charter School Athlos Leadership Academy Project Series 2015A

    5.50       7-1-2040        750,000        798,150  

Cologne MN Charter School Cologne Academy Project Series 2014A

    5.00       7-1-2029        590,000        640,563  

Cologne MN Charter School Cologne Academy Project Series 2014A

    5.00       7-1-2034        500,000        536,100  

Columbus MN Charter School New Millennium Academy Project Series 2015A

    5.50       7-1-2030        1,000,000        917,640  

Deephaven MN Charter School Eagle Ridge Academy Project Series 2015A

    5.25       7-1-2040        500,000        541,575  

Deephaven MN Charter School Eagle Ridge Academy Project Series 2016-A

    5.25       7-1-2037        400,000        434,920  

Deephaven MN Charter School Eagle Ridge Academy Project Series 2016A

    4.00       7-1-2025        125,000        132,851  

Deephaven MN Charter School Eagle Ridge Academy Project Series 2016A

    4.00       7-1-2026        100,000        105,863  

Deephaven MN Charter School Eagle Ridge Academy Project Series 2016A

    4.00       7-1-2027        100,000        105,446  

Forest Lakes MN Charter School Lakes International Language Academy Project Series 2014A

    5.50       8-1-2036        500,000        537,180  

Ham Lake MN Charter School DaVinci Academy Project Series 2012A

    4.00       7-1-2028        370,000        381,315  

Ham Lake MN Charter School DaVinci Academy Project Series 2016A

    5.00       7-1-2031        625,000        670,038  

Hugo MN Charter School Lease Revenue Bonds Noble Academy Project Series 2014A

    5.00       7-1-2029        600,000        650,628  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Minnesota Tax-Free Fund  |  7


Portfolio of investments—December 31, 2019 (unaudited)

 

    

Interest

rate

   

Maturity

date

     Principal      Value  
Education Revenue (continued)                          

Minneapolis MN Charter School Yinghua Academy Project Series 2013A

    5.00 %       7-1-2023      $ 250,000      $ 260,500  

Minnesota HEFAR Bethel University Series 2017

    5.00       5-1-2037        1,250,000        1,442,375  

Minnesota HEFAR College of St. Scholastica Series 2019

    4.00       12-1-2040        1,000,000        1,098,550  

Minnesota HEFAR College of St. Scholastica Series 7R

    4.25       12-1-2027        400,000        429,380  

Minnesota HEFAR Hamline University Series 2017B

    5.00       10-1-2035        1,000,000        1,138,500  

Minnesota HEFAR Hamline University Series 7E

    4.50       10-1-2021        300,000        307,446  

Minnesota HEFAR Hamline University Series 7E

    5.00       10-1-2029        500,000        514,260  

Minnesota HEFAR St. Benedict College Series 2017

    4.00       3-1-2036        410,000        444,948  

Minnesota HEFAR St. Benedict College Series 7M

    5.13       3-1-2036        275,000        276,763  

Minnesota HEFAR St. Catherine University Series A

    5.00       10-1-2045        2,000,000        2,315,400  

Minnesota HEFAR St. Thomas University Series 7U

    5.00       4-1-2023        750,000        839,933  

Minnesota HEFAR St. Thomas University Series 8L

    5.00       4-1-2028        920,000        1,101,065  

Minnesota HEFAR St. Thomas University Series 8L

    5.00       4-1-2029        750,000        894,143  

Minnesota HEFAR St. Thomas University Series 8L

    5.00       4-1-2035        750,000        879,698  

Minnesota Higher Education Facilities Authority Series 2019

    5.00       10-1-2040        750,000        924,705  

Minnesota Office of Higher Education Supplemental Student Loan Program Revenue Bonds Series 2018

    5.00       11-1-2026        700,000        832,797  

Minnesota State Colleges & Universities Revenue Fund & Refunding Bonds Series 2017A

    5.00       10-1-2027        500,000        619,945  

Moorhead MN Educational Facilities Bond The Concordia College Corporation Project Series 2016

    5.00       12-1-2025        2,000,000        2,243,120  

Otsego MN Charter School Kaleidoscope Charter School Project Series 2014A

    4.15       9-1-2024        440,000        448,219  

Otsego MN Charter School Kaleidoscope Charter School Project Series 2014A

    5.00       9-1-2034        1,100,000        1,155,363  

Rice County MN Educational Facilities Shattuck-St. Mary’s School Project 144A

    5.00       8-1-2022        955,000        1,000,477  

St. Cloud MN Charter School Lease Revenue Bonds Stride Academy Project Series 2016A

    5.00       4-1-2036        750,000        503,723  

St. Paul MN Housing & RDA Charter School Hmong College Preparatory Academy Project Series 2016A

    5.25       9-1-2031        1,000,000        1,123,340  

St. Paul MN Housing & RDA Charter School Lease Revenue German Immersion School Project Series 2013A

    4.00       7-1-2023        175,000        178,922  

St. Paul MN Housing & RDA Charter School Lease Revenue Twin Cities Academy Project Series 2015A

    5.00       7-1-2035        925,000        994,283  

St. Paul MN Housing & RDA Charter School Twin Cities German Immersion School Project Series 2019

    5.00       7-1-2055        750,000        822,630  

St. Paul MN Housing & RDA Conservatory for Performing Artists Series A

    4.00       3-1-2028        150,000        151,997  

St. Paul MN Housing & RDA Hope Community Academy Project Series 2015A

    5.00       12-1-2034        1,645,000        1,758,472  

University of Minnesota Series 2017A

    5.00       9-1-2042        770,000        932,231  

University of Minnesota Series 2019A

    5.00       4-1-2044        2,000,000        2,477,440  

University of Minnesota State Supported Biomedical Science Series 2011B

    5.00       8-1-2036        1,000,000        1,054,830  

Woodbury MN Charter School Series A

    3.90       12-1-2022        220,000        228,213  

Woodbury MN Charter School Series A

    5.00       12-1-2027        215,000        224,823  

Woodbury MN Charter School Series A

    5.00       12-1-2032        220,000        229,042  
     38,817,737  
  

 

 

 
GO Revenue: 16.13%  

Hastings MN Independent School District #200 CAB Series A (Minnesota School District Credit Enhancement Program Insured) ¤

    0.00       2-1-2032        1,305,000        950,693  

Hastings MN Independent School District #200 CAB Series A (Minnesota School District Credit Enhancement Program Insured) ¤

    0.00       2-1-2033        1,145,000        799,874  

Hennepin County MN Series 2016B

    5.00       12-1-2029        450,000        554,472  

Hennepin County MN Series 2017C

    5.00       12-1-2031        2,000,000        2,450,220  

Long Prairie MN Sewer Revenue Bond Series 2018A (Minnesota Credit Program Insured)

    5.00       2-1-2025        160,000        185,842  

Long Prairie MN Sewer Revenue Bond Series 2018A (Minnesota Credit Program Insured)

    5.00       2-1-2026        185,000        219,763  

 

The accompanying notes are an integral part of these financial statements.

 

 

8  |  Wells Fargo Minnesota Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

    

Interest

rate

   

Maturity

date

     Principal      Value  
GO Revenue (continued)  

Minnesota Series 2018A

    5.00 %       8-1-2032      $ 2,700,000      $ 3,422,574  

Minnesota Various Purpose Bonds Series 2015A

    5.00       8-1-2028        3,400,000        4,068,406  

Mounds View MN Independent School District #621 Series A (Minnesota School District Credit Enhancement Program Insured)

    4.00       2-1-2022        530,000        531,198  

North St. Paul Maplewood MN Independent School District #622 Facilities Maintenance Series B (Minnesota School District Credit Enhancement Program Insured)

    4.00       2-1-2029        2,735,000        3,188,518  

Rosemount MN Independent School District #196 School Building Series 2016A (Minnesota School District Credit Enhancement Program Insured)

    5.00       2-1-2027        1,500,000        1,822,410  

Roseville MN Independent School District #623 School Building Series A (Minnesota School District Credit Enhancement Program Insured)

    5.00       2-1-2031        2,090,000        2,527,960  

Sartell MN Independent School District #748 St. Stephen Public Schools GO Series 2016A (Minnesota School District Credit Enhancement Program Insured)

    5.00       2-1-2027        1,250,000        1,482,688  

Shakopee MN Independent School District #720 Series 2015A (Minnesota School District Credit Enhancement Program Insured)

    5.00       2-1-2023        1,000,000        1,108,250  

St. Cloud MN Series A

    4.00       2-1-2028        460,000        535,063  

St. Cloud MN Series A

    4.00       2-1-2029        475,000        549,399  

St. Cloud MN Series A

    4.00       2-1-2030        495,000        569,240  

St. Francis MN Independent School District #15 Series A (Minnesota School District Credit Enhancement Program Insured)

    5.00       2-1-2027        485,000        539,053  

St. Francis MN Independent School District #15 Series A (Minnesota School District Credit Enhancement Program Insured)

    5.00       2-1-2028        220,000        244,449  

St. Louis Park Independent School District #203 Series 2019A (Minnesota School District Credit Enhancement Program Insured)

    5.00       2-1-2028        1,370,000        1,736,338  

Willmar MN Rice Memorial Hospital Project Series 2012A

    5.00       2-1-2026        1,000,000        1,039,680  
     28,526,090  
  

 

 

 
Health Revenue: 19.24%  

Center City MN Health Care Facilities Hazelden Betty Ford Foundation Project Series 2014

    5.00       11-1-2026        750,000        862,658  

Center City MN Health Care Facilities Hazelden Betty Ford Foundation Project Series 2014

    5.00       11-1-2027        500,000        573,175  

Center City MN Health Care Facilities Hazelden Betty Ford Foundation Project Series 2014

    5.00       11-1-2029        300,000        340,911  

Duluth MN EDA Health Care Facilities Essentia Health Series A

    5.00       2-15-2048        650,000        768,820  

Duluth MN EDA Health Care Facilities Essentia Health Series A

    5.25       2-15-2053        2,500,000        2,993,350  

Glencoe MN HCFR Glencoe Regional Health Services Project Series 2013

    4.00       4-1-2022        735,000        773,029  

Maple Grove MN HCFR Maple Grove Hospital Corporation

    5.00       5-1-2030        850,000        1,021,887  

Maple Grove MN HCFR North Memorial Health Care Series 2015

    5.00       9-1-2023        655,000        737,098  

Maple Grove MN HCFR Series 2017

    5.00       5-1-2031        500,000        598,010  

Maple Grove MN HCFR Series 2017

    5.00       5-1-2032        500,000        595,720  

Minneapolis & St. Paul MN Housing & RDA Allina Health System

    5.00       11-15-2029        1,000,000        1,291,910  

Minneapolis & St. Paul MN Housing & RDA Allina Health System Series 2017A

    5.00       11-15-2029        1,000,000        1,224,200  

Minneapolis & St. Paul MN Housing & RDA Children’s Health Care Facilities Series A

    5.25       8-15-2025        1,000,000        1,024,730  

Minneapolis & St. Paul MN Housing & RDA Children’s Health Care Facilities Series A

    5.25       8-15-2035        1,000,000        1,024,100  

Minneapolis MN Health Care System Fairview Health Services Series 2015A

    5.00       11-15-2033        2,000,000        2,350,180  

Minneapolis MN Health Care System Revenue Refunded Bond Fairview Health Services Series A

    5.00       11-15-2049        1,000,000        1,188,890  

Minnesota Agricultural & Economic Development Board Health Care Essentia Health Series C1 (AGC Insured)

    4.00       2-15-2020        50,000        50,170  

Minnesota Agricultural & Economic Development Board Health Care Essentia Health Series C1 (AGC Insured)

    5.00       2-15-2030        2,000,000        2,007,460  

Plato MN Health Care Facilities Bond Glencoe Regional Health Services Project Series 2017

    5.00       4-1-2041        550,000        619,476  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Minnesota Tax-Free Fund  |  9


Portfolio of investments—December 31, 2019 (unaudited)

 

    

Interest

rate

   

Maturity

date

     Principal      Value  
Health Revenue (continued)  

Red Wing MN Senior Housing Deer Crest Project Series A

    5.00 %       11-1-2032      $ 660,000      $ 677,457  

Red Wing MN Senior Housing Deer Crest Project Series A

    5.00       11-1-2042        560,000        574,202  

Rochester MN Healthcare Facilities Mayo Clinic ø

    1.65       11-15-2047        400,000        400,000  

Shakopee MN Senior Housing Revenue Benedictine Living Community LLC Project 144A øø

    5.85       11-1-2058        750,000        798,165  

Shakopee MN St. Francis Regional Medical Center Series 2014

    5.00       9-1-2027        700,000        799,092  

Shakopee MN St. Francis Regional Medical Center Series 2014

    5.00       9-1-2029        725,000        823,796  

St. Cloud MN Health Care Revenue Bonds Series 2016A

    5.00       5-1-2030        2,000,000        2,384,120  

St. Cloud MN Health Care Revenue Bonds Series 2016A

    5.00       5-1-2031        2,000,000        2,375,900  

St. Cloud MN Health Care Unrefunded Revenue Bonds CentraCare Health

    5.13       5-1-2030        125,000        126,531  

St. Paul MN Housing & RDA Fairview Health Services Series 2017A

    5.00       11-15-2034        565,000        687,260  

St. Paul MN Housing & RDA Healthfirst Care Systems Project Series 2015A

    5.00       11-15-2027        1,000,000        1,210,220  

St. Paul MN Housing & RDA Healthpartners Obligation Group

    5.00       7-1-2025        250,000        297,380  

St. Paul MN Housing & RDA Healthpartners Obligation Group

    5.00       7-1-2031        2,010,000        2,312,565  

Winona MN Health Care Facilities Refunding Bond Series 2012

    5.00       7-1-2034        500,000        516,000  
     34,028,462  
  

 

 

 
Housing Revenue: 4.63%  

Brooklyn Park MN Multi Housing Revenue Bonds Amorce Limited Partnership Project Series 2019A (GNMA Insured) øø

    1.25       1-1-2022        1,735,000        1,733,265  

Dakota County MN Community Development Agency SFMR (GNMA/FNMA/FHLMC Insured)

    5.30       12-1-2039        5,636        5,640  

Minneapolis MN Student Housing Riverton Community Housing Project Series 2014

    5.00       8-1-2032        860,000        917,482  

Minnesota HFA Series D (SIFMA Municipal Swap +0.43%) (GNMA/FNMA/FHLMC Insured) ±

    2.04       1-1-2045        1,000,000        1,000,620  

Minnesota Housing Finance Agency Rental Bond Series 2019C

    1.60       8-1-2021        1,475,000        1,477,640  

Minnesota Housing Finance Agency Residential Housing Series 2012D (GNMA/FNMA/FHLMC Insured)

    4.00       7-1-2040        145,000        148,154  

Minnesota Housing Finance Agency State Appropriation Bonds Series 2015A

    5.00       8-1-2027        1,665,000        1,934,380  

Minnesota Housing Finance Agency State Appropriation Bonds Series 2015A

    5.00       8-1-2032        500,000        576,805  

Oak Park Heights MN Boutwells Landing Project Series 2005 (FHLMC LIQ) ø

    1.62       11-1-2035        400,000        400,000  
     8,193,986  
  

 

 

 
Miscellaneous Revenue: 15.72%  

Anoka Hennepin MN Independent School District #11 Certificate of Participation Series 2014A

    5.00       2-1-2034        1,000,000        1,133,930  

Center City MN Heath Care Facilities Hazelden Betty Ford Foundation Project Series 2019

    4.00       11-1-2030        250,000        288,278  

Center City MN Heath Care Facilities Hazelden Betty Ford Foundation Project Series 2019

    4.00       11-1-2031        250,000        286,815  

Center City MN Heath Care Facilities Hazelden Betty Ford Foundation Project Series 2019

    4.00       11-1-2034        300,000        339,495  

Duluth MN Independent School District #709 Certificate of Participation Series 2019A

    4.00       3-1-2026        700,000        754,474  

Duluth MN Independent School District #709 Certificate of Participation Series 2019B (Minnesota School District Credit Enhancement Program Insured)

    5.00       2-1-2026        395,000        471,741  

Duluth MN Independent School District #709 Certificate of Participation Series 2019B (Minnesota School District Credit Enhancement Program Insured)

    5.00       2-1-2028        700,000        865,550  

Goodhue County MN Education District #6051 Red Wing Certificate of Participation Series 2014A

    5.00       2-1-2029        750,000        842,175  

Minneapolis MN Development Limited Tax Supported Common Bond Series 2A

    6.00       12-1-2040        1,000,000        1,042,230  

Minnesota General Fund Appropriation Bonds Series 2012B

    5.00       3-1-2027        2,000,000        2,160,660  

Minnesota General Fund Appropriation Bonds Series 2012B

    5.00       3-1-2029        2,000,000        2,156,640  

Minnesota General Fund Appropriation Bonds Series 2014A

    5.00       6-1-2033        1,000,000        1,117,230  

Minnesota Legislative Office Facility Project Certificate of Participation Series 2014

    5.00       6-1-2023        435,000        491,433  

 

The accompanying notes are an integral part of these financial statements.

 

 

10  |  Wells Fargo Minnesota Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

    

Interest

rate

   

Maturity

date

     Principal      Value  
Miscellaneous Revenue (continued)  

Minnetonka MN Independent School District #276 Certificate of Participation Series 2016F

    5.00 %       2-1-2025      $ 205,000      $ 227,981  

Minnetonka MN Independent School District #276 Certificate of Participation Series 2018C

    5.75       2-1-2042        2,145,000        2,538,114  

Northeastern Minnesota Metropolitan Intermediate School District #916 Certificate of Participation Series 2013A

    4.00       2-1-2024        1,100,000        1,184,755  

Northeastern Minnesota Metropolitan Intermediate School District #916 Certificate of Participation Series 2015B

    5.00       2-1-2034        1,500,000        1,727,640  

Plymouth MN Intermediate School District #287 Certificate of Participation Series 2009A

    5.00       2-1-2024        250,000        250,760  

Plymouth MN Intermediate School District #287 Certificate of Participation Series 2016A

    4.00       5-1-2026        500,000        561,125  

Plymouth MN Intermediate School District #287 Certificate of Participation Series 2016A

    4.00       5-1-2027        1,000,000        1,115,260  

Plymouth MN Intermediate School District #287 Certificate of Participation Series A

    4.00       2-1-2023        230,000        246,411  

Plymouth MN Intermediate School District #287 Certificate of Participation Series A

    4.00       2-1-2024        130,000        141,937  

Plymouth MN Intermediate School District #287 Certificate of Participation Series A

    4.00       2-1-2025        215,000        238,304  

St. Cloud MN Independent School District #742 Certificate of Participation Series 2017A

    5.00       2-1-2032        500,000        578,110  

St. Cloud MN Independent School District #742 Certificate of Participation Series 2017A

    5.00       2-1-2034        350,000        403,116  

St. Cloud MN Infrastructure Management Series B

    4.00       2-1-2028        245,000        284,979  

St. Cloud MN Infrastructure Management Series B

    4.00       2-1-2029        255,000        294,941  

St. Cloud MN Infrastructure Management Series B

    4.00       2-1-2030        260,000        298,995  

St. Paul MN Housing & RDA Charter School Nova Classical Academy Project Series 2011A

    6.63       9-1-2042        865,000        942,383  

St. Paul MN Independent School District Series C (Minnesota School District Credit Enhancement Program Insured)

    5.00       2-1-2030        2,965,000        3,608,524  

White Bear Lake MN Revenue Refunding Bonds YMCA of Greater Twin Cities Project Series 2018

    5.00       6-1-2032        1,000,000        1,216,100  
            27,810,086  
         

 

 

 
Resource Recovery Revenue: 1.50%                          

Douglas County MN Refunding Bond Solid Waste Series A

    5.00       8-1-2029        1,005,000        1,299,827  

Douglas County MN Refunding Bond Solid Waste Series A

    5.00       8-1-2030        1,055,000        1,355,517  
            2,655,344  
         

 

 

 
Tax Revenue: 0.92%                          

Hennepin County MN Series 2019B

    5.00       12-15-2031        1,260,000        1,616,656  
         

 

 

 
Transportation Revenue: 1.02%                          

St. Paul MN Housing & RDA Parking Enterprise Refunding Bonds Series 2017A

    4.00       8-1-2026        525,000        594,841  

St. Paul MN Housing & RDA Parking Enterprise Refunding Bonds Series 2017A

    4.00       8-1-2027        545,000        613,517  

St. Paul MN Housing & RDA Parking Enterprise Refunding Bonds Series 2017A

    5.00       8-1-2025        500,000        600,450  
            1,808,808  
         

 

 

 
Utilities Revenue: 11.85%  

Central Minnesota Municipal Power Agency Brookings Southeast Twin Cities Transmission Project Series 2012

    5.00       1-1-2042        1,500,000        1,596,675  

Hutchinson MN Public Utility Revenue Refunding Bonds Series 2012A

    5.00       12-1-2026        700,000        771,596  

Minnesota Municipal Power Agency Series A

    5.00       10-1-2025        2,335,000        2,401,057  

Northern Minnesota Municipal Power Agency Series 2013A

    4.00       1-1-2028        450,000        478,593  

Northern Minnesota Municipal Power Agency Series 2016

    5.00       1-1-2030        520,000        612,456  

Northern Minnesota Municipal Power Agency Series 2016

    5.00       1-1-2031        350,000        410,193  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Minnesota Tax-Free Fund  |  11


Portfolio of investments—December 31, 2019 (unaudited)

 

    

Interest

rate

   

Maturity

date

     Principal      Value  
Utilities Revenue (continued)  

Northern Minnesota Municipal Power Agency Series 2017

    5.00 %       1-1-2041      $ 400,000      $ 467,040  

Rochester MN Electric Utility Revenue Series 2013B

    5.00       12-1-2025        315,000        360,243  

Rochester MN Electric Utility Revenue Series 2013B

    5.00       12-1-2026        250,000        284,778  

Rochester MN Electric Utility Revenue Series 2017A

    5.00       12-1-2037        500,000        595,815  

Southern Minnesota Municipal Power Agency Badger Coulee Project Series 2019A

    5.00       1-1-2032        700,000        900,697  

Southern Minnesota Municipal Power Agency Badger Coulee Project Series 2019A

    5.00       1-1-2033        560,000        717,858  

Southern Minnesota Municipal Power Agency Badger Coulee Project Series 2019A

    5.00       1-1-2034        615,000        786,425  

Southern Minnesota Municipal Power Agency CAB Series 1994A (National Insured) ¤

    0.00       1-1-2020        5,100,000        5,100,000  

Western Minnesota Municipal Power Agency Series A

    5.00       1-1-2027        1,565,000        1,737,854  

Western Minnesota Municipal Power Agency Series A

    5.00       1-1-2030        1,000,000        1,104,850  

Western Minnesota Municipal Power Agency Series A

    5.00       1-1-2031        1,000,000        1,194,460  

Western Minnesota Municipal Power Agency Series A

    5.00       1-1-2032        1,250,000        1,441,579  
     20,962,169  
  

 

 

 
     168,739,128  
  

 

 

 

Virgin Islands: 0.29%

 

Tax Revenue: 0.29%  

Virgin Islands PFA Matching Fund Loan Notes Senior Lien Series B (AGM Insured)

    5.00       10-1-2025        500,000        511,005  
         

 

 

 

Total Municipal Obligations (Cost $166,451,522)

 

     173,065,373        
  

 

 

 

 

Total investments in securities (Cost $166,451,522)     97.83        173,065,373  

Other assets and liabilities, net

    2.17          3,831,196  
 

 

 

      

 

 

 
Total net assets     100.00      $ 176,896,569  
 

 

 

      

 

 

 

 

 

¤

The security is issued in zero coupon form with no periodic interest payments.

ø

Variable rate demand notes are subject to a demand feature which reduces the effective maturity. The maturity date shown represents the final maturity date of the security. The interest rate is determined and reset by the issuer daily, weekly, or monthly depending upon the terms of the security. The rate shown is the rate in effect at period end.

øø

The interest rate is determined and reset by the issuer periodically depending upon the terms of the security. The rate shown is the rate in effect at period end.

±

Variable rate investment. The rate shown is the rate in effect at period end.

144A

The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933.

Abbreviations:

 

AGC

Assured Guaranty Corporation

 

AGM

Assured Guaranty Municipal

 

CAB

Capital appreciation bond

 

EDA

Economic Development Authority

 

FHLMC

Federal Home Loan Mortgage Corporation

 

FNMA

Federal National Mortgage Association

 

GNMA

Government National Mortgage Association

 

GO

General obligation

 

HCFR

Healthcare facilities revenue

 

HEFAR

Higher Education Facilities Authority Revenue

 

HFA

Housing Finance Authority

 

LIQ

Liquidity agreement

 

National

National Public Finance Guarantee Corporation

 

PFA

Public Finance Authority

 

RDA

Redevelopment Authority

 

SFMR

Single-family mortgage revenue

 

SIFMA

Securities Industry and Financial Markets Association

 

The accompanying notes are an integral part of these financial statements.

 

 

12  |  Wells Fargo Minnesota Tax-Free Fund


Statement of assets and liabilities—December 31, 2019 (unaudited)

 

         

Assets

 

Investments in unaffiliated securities, at value (cost $166,451,522)

  $ 173,065,373  

Cash

    478,465  

Receivable for investments sold

    18,468  

Receivable for Fund shares sold

    1,473,433  

Receivable for interest

    2,214,541  

Prepaid expenses and other assets

    63,427  
 

 

 

 

Total assets

    177,313,707  
 

 

 

 

Liabilities

 

Payable for Fund shares redeemed

    273,373  

Management fee payable

    37,001  

Dividends payable

    70,430  

Administration fees payable

    15,890  

Distribution fee payable

    3,125  

Trustees’ fees and expenses payable

    4,248  

Accrued expenses and other liabilities

    13,071  
 

 

 

 

Total liabilities

    417,138  
 

 

 

 

Total net assets

  $ 176,896,569  
 

 

 

 

Net assets consist of

 

Paid-in capital

  $ 169,464,487  

Total distributable earnings

    7,432,082  
 

 

 

 

Total net assets

  $ 176,896,569  
 

 

 

 

Computation of net asset value and offering price per share

 

Net assets – Class A

  $ 28,696,835  

Shares outstanding – Class A1

    2,649,080  

Net asset value per share – Class A2

    $10.83  

Maximum offering price per share – Class A

    $11.34  

Net assets – Class C

  $ 4,744,264  

Shares outstanding – Class C1

    438,007  

Net asset value per share – Class C

    $10.83  

Net assets – Administrator Class

  $ 70,706,316  

Shares outstanding – Administrator Class1

    6,529,268  

Net asset value per share – Administrator Class

    $10.83  

Net assets – Institutional Class

  $ 72,749,154  

Shares outstanding – Institutional Class1

    6,712,580  

Net asset value per share – Institutional Class

    $10.84  

 

1 

The Fund has an unlimited number of authorized shares.

 

2 

Maximum offering price is computed as 100/95.50 of net asset value. On investments of $50,000 or more, the offering price is reduced.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Minnesota Tax-Free Fund  |  13


Statement of operations—six months ended December 31, 2019 (unaudited)

 

         

Investment income

 

Interest

  $ 2,635,285  
 

 

 

 

Expenses

 

Management fee

    346,113  

Administration fees

 

Class A

    23,111  

Class C

    4,059  

Administrator Class

    46,004  

Institutional Class

    18,834  

Shareholder servicing fees

 

Class A

    36,111  

Class C

    6,343  

Administrator Class

    115,011  

Distribution fee

 

Class C

    19,029  

Custody and accounting fees

    3,432  

Professional fees

    26,089  

Registration fees

    49,112  

Shareholder report expenses

    13,908  

Trustees’ fees and expenses

    10,804  

Other fees and expenses

    4,397  
 

 

 

 

Total expenses

    722,357  

Less: Fee waivers and/or expense reimbursements

 

Fund-level

    (111,577

Administrator Class

    (49,306
 

 

 

 

Net expenses

    561,474  
 

 

 

 

Net investment income

    2,073,811  
 

 

 

 

Realized and unrealized gains (losses) on investments

 

Net realized gains on investments

    20,362  

Net change in unrealized gains (losses) on investments

    920,431  
 

 

 

 

Net realized and unrealized gains (losses) on investments

    940,793  
 

 

 

 

Net increase in net assets resulting from operations

  $ 3,014,604  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

14  |  Wells Fargo Minnesota Tax-Free Fund


Statement of changes in net assets

 

     Six months ended
December 31, 2019
(unaudited)
    Year ended
June 30, 2019
 

Operations

       

Net investment income

    $ 2,073,811       $ 4,184,838  

Net realized gains on investments

      20,362         42,540  

Net change in unrealized gains (losses) on investments

      920,431         3,698,165  
 

 

 

 

Net increase in net assets resulting from operations

      3,014,604         7,925,543  
 

 

 

 

Distributions to shareholders from net investment income and net realized gains

       

Class A

      (317,223       (711,001

Class C

      (36,667       (117,484

Administrator Class

      (1,125,944       (2,451,244

Institutional Class

      (593,977       (905,109
 

 

 

 

Total distributions to shareholders

      (2,073,811       (4,184,838
 

 

 

 

Capital share transactions

    Shares         Shares    

Proceeds from shares sold

       

Class A

    252,060       2,748,791       347,091       3,649,133  

Class C

    18,863       204,118       7,412       78,298  

Administrator Class

    1,221,261       13,246,223       3,125,314       32,846,044  

Institutional Class

    3,685,194       39,931,782       1,422,688       14,957,048  
 

 

 

 
      56,130,914         51,530,523  
 

 

 

 

Reinvestment of distributions

       

Class A

    28,924       313,737       67,230       708,091  

Class C

    3,365       36,500       11,169       117,470  

Administrator Class

    78,301       849,248       163,889       1,727,163  

Institutional Class

    47,354       514,098       85,728       904,258  
 

 

 

 
      1,713,583         3,456,982  
 

 

 

 

Payment for shares redeemed

       

Class A

    (176,609     (1,917,772     (680,950     (7,140,320

Class C

    (72,273     (783,841     (233,266     (2,454,511

Administrator Class

    (3,603,796     (39,000,505     (2,569,156     (26,934,068

Institutional Class

    (327,104     (3,541,518     (1,018,861     (10,683,211
 

 

 

 
      (45,243,636       (47,212,110
 

 

 

 

Net increase in net assets resulting from capital share transactions

      12,600,861         7,775,395  
 

 

 

 

Total increase in net assets

      13,541,654         11,516,100  
 

 

 

 

Net assets

       

Beginning of period

      163,354,915         151,838,815  
 

 

 

 

End of period

    $ 176,896,569       $ 163,354,915  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Minnesota Tax-Free Fund  |  15


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS A   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $10.77       $10.51       $10.68       $11.07       $10.79       $10.86  

Net investment income

    0.12       0.27 1       0.28 1       0.28 1       0.33       0.33  

Net realized and unrealized gains (losses) on investments

    0.06       0.26       (0.16     (0.34     0.28       (0.04
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.18       0.53       0.12       (0.06     0.61       0.29  

Distributions to shareholders from

           

Net investment income

    (0.12     (0.27     (0.28     (0.28     (0.33     (0.33

Net realized gains

    0.00       0.00       (0.01     (0.05     (0.00 )2       (0.03
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.12     (0.27     (0.29     (0.33     (0.33     (0.36

Net asset value, end of period

    $10.83       $10.77       $10.51       $10.68       $11.07       $10.79  

Total return3

    1.67     5.13     1.10     (0.53 )%      5.74     2.72

Ratios to average net assets (annualized)

           

Gross expenses

    0.93     0.94     0.85     0.91     0.89     0.89

Net expenses

    0.85     0.85     0.84     0.85     0.85     0.85

Net investment income

    2.20     2.57     2.64     2.63     2.99     3.03

Supplemental data

           

Portfolio turnover rate

    7     18     15     22     16     20

Net assets, end of period (000s omitted)

    $28,697       $27,399       $29,554       $34,720       $45,437       $45,437  

 

1 

Calculated based upon average shares outstanding

 

2 

Amount is less than $0.005.

 

3 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

16  |  Wells Fargo Minnesota Tax-Free Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS C   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $10.77       $10.51       $10.68       $11.07       $10.79       $10.86  

Net investment income

    0.08       0.19 1       0.20       0.20       0.24       0.25  

Net realized and unrealized gains (losses) on investments

    0.06       0.26       (0.16     (0.34     0.28       (0.04
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.14       0.45       0.04       (0.14     0.52       0.21  

Distributions to shareholders from

           

Net investment income

    (0.08     (0.19     (0.20     (0.20     (0.24     (0.25

Net realized gains

    0.00       0.00       (0.01     (0.05     (0.00 )2       (0.03
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.08     (0.19     (0.21     (0.25     (0.24     (0.28

Net asset value, end of period

    $10.83       $10.77       $10.51       $10.68       $11.07       $10.79  

Total return3

    1.29     4.35     0.34     (1.27 )%      4.95     1.96

Ratios to average net assets (annualized)

           

Gross expenses

    1.68     1.69     1.59     1.65     1.64     1.64

Net expenses

    1.60     1.60     1.59     1.60     1.60     1.60

Net investment income

    1.45     1.83     1.89     1.88     2.24     2.28

Supplemental data

           

Portfolio turnover rate

    7     18     15     22     16     20

Net assets, end of period (000s omitted)

    $4,744       $5,254       $7,387       $9,525       $10,358       $10,061  

 

1 

Calculated based upon average shares outstanding

 

2 

Amount is less than $0.005.

 

3 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Minnesota Tax-Free Fund  |  17


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
ADMINISTRATOR CLASS   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $10.76       $10.51       $10.68       $11.07       $10.78       $10.86  

Net investment income

    0.13 1      0.30 1      0.31 1      0.31 1      0.35       0.36  

Net realized and unrealized gains (losses) on investments

    0.07       0.25       (0.16     (0.34     0.29       (0.05
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.20       0.55       0.15       (0.03     0.64       0.31  

Distributions to shareholders from

           

Net investment income

    (0.13     (0.30     (0.31     (0.31     (0.35     (0.36

Net realized gains

    0.00       0.00       (0.01     (0.05     (0.00 )2      (0.03
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.13     (0.30     (0.32     (0.36     (0.35     (0.39

Net asset value, end of period

    $10.83       $10.76       $10.51       $10.68       $11.07       $10.78  

Total return3

    1.89     5.29     1.34     (0.28 )%      6.10     2.88

Ratios to average net assets (annualized)

           

Gross expenses

    0.87     0.88     0.78     0.84     0.83     0.83

Net expenses

    0.60     0.60     0.60     0.60     0.60     0.60

Net investment income

    2.45     2.81     2.89     2.87     3.24     3.28

Supplemental data

           

Portfolio turnover rate

    7     18     15     22     16     20

Net assets, end of period (000s omitted)

    $70,706       $95,072       $85,259       $104,906       $124,485       $111,475  

 

1 

Calculated based upon average shares outstanding

 

2 

Amount is less than $0.005.

 

3 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

18  |  Wells Fargo Minnesota Tax-Free Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
INSTITUTIONAL CLASS   2019     2018     20171  

Net asset value, beginning of period

    $10.77       $10.52       $10.69       $10.88  

Net investment income

    0.14 2       0.30       0.32       0.21  

Net realized and unrealized gains (losses) on investments

    0.07       0.25       (0.16     (0.14
 

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.21       0.55       0.16       0.07  

Distributions to shareholders from

       

Net investment income

    (0.14     (0.30     (0.32     (0.21

Net realized gains

    0.00       0.00       (0.01     (0.05
 

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.14     (0.30     (0.33     (0.26

Net asset value, end of period

    $10.84       $10.77       $10.52       $10.69  

Total return3

    1.93     5.37     1.43     0.62

Ratios to average net assets (annualized)

       

Gross expenses

    0.60     0.61     0.52     0.52

Net expenses

    0.52     0.52     0.52     0.51

Net investment income

    2.52     2.89     2.98     2.91

Supplemental data

       

Portfolio turnover rate

    7     18     15     22

Net assets, end of period (000s omitted)

    $72,749       $35,630       $29,639       $22,785  

 

1 

For the period from October 31, 2016 (commencement of class operations) to June 30, 2017

 

2 

Calculated based upon average shares outstanding

 

3 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Minnesota Tax-Free Fund  |  19


Notes to financial statements (unaudited)

 

1. ORGANIZATION

Wells Fargo Funds Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Wells Fargo Minnesota Tax-Free Fund (the “Fund”) which is a diversified series of the Trust.

2. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Securities valuation

All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.

Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

Investments which are not valued using any of the methods discussed above are valued at their fair value, as determined in good faith by the Board of Trustees of the Fund. The Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities, unless the determination has been delegated to the Wells Fargo Asset Management Pricing Committee at Wells Fargo Funds Management, LLC (“Funds Management”). The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Valuation Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees receives reports on any valuation actions taken by the Valuation Committee or the Wells Fargo Asset Management Pricing Committee which may include items for ratification.

When-issued transactions

The Fund may purchase securities on a forward commitment or when-issued basis. The Fund records a when-issued transaction on the trade date and will segregate assets in an amount at least equal in value to the Fund’s commitment to purchase when-issued securities. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

Security transactions and income recognition

Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. 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 been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Distributions to shareholders

Distributions to shareholders from net investment income are declared daily and paid monthly. Distributions from net realized gains, if any, are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.

 

 

20  |  Wells Fargo Minnesota Tax-Free Fund


Notes to financial statements (unaudited)

 

Federal and other taxes

The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable and tax-exempt income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.

The 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. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

As of December 31, 2019, the aggregate cost of all investments for federal income tax purposes was $166,451,521 and the unrealized gains (losses) consisted of:

 

Gross unrealized gains

   $ 7,038,311  

Gross unrealized losses

     (424,459

Net unrealized gains

   $ 6,613,852  

As of June 30, 2019, the Fund had capital loss carryforwards which consisted of $32,886 in short-term capital losses.

Class allocations

The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.

3. FAIR VALUATION MEASUREMENTS

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:

 

 

Level 1 – quoted prices in active markets for identical securities

 

 

Level 2 – other significant observable inputs (including quoted prices for similar securities, 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 investments in securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of December 31, 2019:

 

      Quoted prices
(Level 1)
     Other significant
observable inputs
(Level 2)
    

Significant
unobservable inputs

(Level 3)

     Total  

Assets

           

Municipal obligations

   $ 0      $ 173,065,373      $ 0      $ 173,065,373  

Additional sector, industry or geographic detail is included in the Portfolio of Investments.

For the six months ended December 31, 2019, the Fund did not have any transfers into/out of Level 3.

 

 

Wells Fargo Minnesota Tax-Free Fund  |  21


Notes to financial statements (unaudited)

 

4. TRANSACTIONS WITH AFFILIATES

Management fee

Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”), is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:

 

Average daily net assets    Management fee

First $500 million

   0.400%

Next $500 million

   0.375

Next $2 billion

   0.350

Next $2 billion

   0.325

Next $5 billion

   0.290

Over $10 billion

   0.280

For the six months ended December 31, 2019, the management fee was equivalent to an annual rate of 0.40% of the Fund’s average daily net assets.

Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Funds Management. Wells Capital Management Incorporated, an affiliate of Funds Management and an indirect wholly owned subsidiary of Wells Fargo, is the subadviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.20% and declining to 0.10% as the average daily net assets of the Fund increase.

Administration fees

Under a class-level administration agreement, Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:

 

      Class-level
administration fee

Class A, Class C

   0.16%

Administrator Class

   0.10

Institutional Class

   0.08

Waivers and/or expense reimbursements

Funds Management has contractually waived and/or reimbursed management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Funds Management has waived fees and/or reimbursed expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Funds Management has committed through October 31, 2020 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s expenses at 0.85% for Class A shares, 1.60% for Class C shares, 0.60% for Administrator Class shares, and 0.52% for Institutional Class shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.

Distribution fee

The Trust has adopted a distribution plan for Class C shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Wells Fargo Funds Distributor, LLC (“Funds Distributor”), the principal underwriter, at an annual rate of 0.75% of the average daily net assets of Class C shares.

 

 

22  |  Wells Fargo Minnesota Tax-Free Fund


Notes to financial statements (unaudited)

 

In addition, Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the six months ended December 31, 2019, Funds Distributor received $1,291 from the sale of Class A shares. No contingent deferred sales charges were incurred by Class A and Class C shares for the six months ended December 31, 2019.

Shareholder servicing fees

The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A, Class C, and Administrator Class of the Fund are charged a fee at an annual rate of 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of Wells Fargo.

Interfund transactions

The Fund may purchase or sell portfolio investment securities to certain other Wells Fargo affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund had $1,000,000 and $2,500,000 in interfund purchases and sales, respectively, during the six months ended December 31, 2019.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended December 31, 2019 were $29,454,483 and $11,488,986, respectively.

6. BANK BORROWINGS

The Trust (excluding the money market funds), Wells Fargo Master Trust and Wells Fargo Variable Trust are parties to a $280,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the 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, an annual commitment fee equal to 0.25% of the unused balance is allocated to each participating fund.

For the six months ended December 31, 2019, there were no borrowings by the Fund under the agreement.

7. CONCENTRATION RISK

The Fund invests a substantial portion of its assets in issuers of municipal debt securities located in a single state or territory of the U.S. Therefore, it may be more affected by economic and political developments in that state or region than would be a comparable general tax-exempt fund.

8. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and Trustees have been granted certain indemnification rights 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 Fund and, therefore, cannot be estimated.

9. NEW ACCOUNTING PRONOUNCEMENTS

In August 2018, FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 updates the disclosure requirements for fair value measurements by modifying or removing certain disclosures and adding certain new disclosures. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Management has adopted the removal and modification of disclosures early, as permitted, and will adopt the additional new disclosures at the effective date.

In March 2017, FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08

shortens the amortization period for certain callable debt securities held at a premium and requires the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount and discounts will continue to be accreted to the maturity date of the security. ASU 2017-08 is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years. During the current reporting period, management of the Fund adopted the change in accounting policy which did not have a material impact to the Fund’s financial statements.

 

 

Wells Fargo Minnesota Tax-Free Fund  |  23


Other information (unaudited)

 

PROXY VOTING INFORMATION

A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available, upon request, by calling 1-800-222-8222, visiting our website at wfam.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at wfam.com or by visiting the SEC website at sec.gov.

QUARTERLY PORTFOLIO HOLDINGS INFORMATION

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.

 

 

24  |  Wells Fargo Minnesota Tax-Free Fund


Other information (unaudited)

 

BOARD OF TRUSTEES AND OFFICERS

Each of the Trustees and Officers1 listed in the table below acts in identical capacities for each fund in the Wells Fargo family of funds, which consists of 149 mutual funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information2. 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

 

Name and
year of birth
  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships

William R. Ebsworth

(Born 1957)

  Trustee, since 2015   Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Endowment (non-profit organization). Mr. Ebsworth is a CFA® charterholder.   N/A

Jane A. Freeman

(Born 1953)

  Trustee, since 2015; Chair Liaison, since 2018   Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is a Board Member of The Ruth Bancroft Garden (non-profit organization). She is also an inactive Chartered Financial Analyst.   N/A

Isaiah Harris, Jr.

(Born 1952)

  Trustee, since 2009; Audit Committee Chairman, since 2019   Retired. Chairman of the Board of CIGNA Corporation since 2009, and Director since 2005. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Child Evangelism Fellowship (non-profit). Mr. Harris is a certified public accountant (inactive status).   CIGNA Corporation

Judith M. Johnson

(Born 1949)

  Trustee, since 2008; Audit Committee Chairman, from 2009 to 2018   Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.   N/A

 

 

Wells Fargo Minnesota Tax-Free Fund  |  25


Other information (unaudited)

 

Name and
year of birth
  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships

David F. Larcker

(Born 1950)

  Trustee, since 2009   James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.   N/A

Olivia S. Mitchell

(Born 1953)

  Trustee, since 2006; Nominating and Governance Committee Chair, since 2018   International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993.   N/A

Timothy J. Penny

(Born 1951)

  Trustee, since 1996; Chairman, since 2018   President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.   N/A

James G. Polisson

(Born 1959)

  Trustee, since 2018   Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations.   N/A

Pamela Wheelock3

(Born 1959)

  Trustee, since January 2020; previously Trustee from January 2018 to July 2019   Board member of the Destination Medical Center Economic Development Agency, Rochester, Minnesota since 2019. Acting Commissioner, Minnesota Department of Human Services, July 2019 through September 2019. Human Services Manager (part-time), Minnesota Department of Human Services, October 2019 through December 2019. Chief Operating Officer, Twin Cities Habitat for Humanity from 2017 to 2019. Vice President of University Services, University of Minnesota from 2012 to 2016. Prior thereto, on the Board of Directors, Governance Committee and Finance Committee for the Minnesota Philanthropy Partners (Saint Paul Foundation) from 2012 to 2018, Interim Chief Executive Officer of Blue Cross Blue Shield of Minnesota from 2011 to 2012, Chairman of the Board from 2009 to 2012 and Board Director from 2003 to 2015. Vice President, Leadership and Community Engagement, Bush Foundation, Saint Paul, Minnesota (a private foundation) from 2009 to 2011. Executive Vice President and Chief Financial Officer, Minnesota Sports and Entertainment from 2004 to 2009 and Senior Vice President from 2002 to 2004. Executive Vice President of the Minnesota Wild Foundation from 2004 to 2008. Commissioner of Finance, State of Minnesota, from 1999 to 2002. Currently Board Chair of the Minnesota Wild Foundation since 2010.   N/A

 

*

Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.

 

 

26  |  Wells Fargo Minnesota Tax-Free Fund


Other information (unaudited)

 

Officers

 

Name and
year of birth
  Position held and
length of service
  Principal occupations during past five years or longer

Andrew Owen

(Born 1960)

  President, since 2017   Executive Vice President of Wells Fargo & Company and Head of Affiliated Managers, Wells Fargo Asset Management, since 2014. In addition, Mr. Owen is currently President, Chief Executive Officer and Director of Wells Fargo Funds Management, LLC since 2017. Prior thereto, Executive Vice President responsible for marketing, investments and product development for Wells Fargo Funds Management, LLC, from 2009 to 2014.

Nancy Wiser1

(Born 1967)

  Treasurer, since 2012   Executive Vice President of Wells Fargo Funds Management, LLC since 2011. Chief Operating Officer and Chief Compliance Officer at LightBox Capital Management LLC, from 2008 to 2011.

Michelle Rhee4

(Born 1966)

  Chief Legal Officer, since 2019   Secretary of Wells Fargo Funds Management, LLC, Chief Legal Counsel of Wells Fargo Asset Management and Assistant General Counsel of Wells Fargo Bank, N.A. since 2018. Associate General Counsel and Managing Director of Bank of America Corporation from 2004 to 2018.

Catherine Kennedy5

(Born 1969)

  Secretary, since 2019   Vice President of Wells Fargo Funds Management, LLC and Senior Counsel of the Wells Fargo Legal Department since 2010. Vice President and Senior Counsel of Evergreen Investment Management Company, LLC from 1998 to 2010.

Michael H. Whitaker

(Born 1967)

  Chief Compliance Officer, since 2016   Chief Compliance Officer of Wells Fargo Asset Management since 2016. Senior Vice President and Chief Compliance Officer for Fidelity Investments from 2007 to 2016.

David Berardi

(Born 1975)

  Assistant Treasurer, since 2009   Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.

Jeremy DePalma1

(Born 1974)

  Assistant Treasurer, since 2009   Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.

 

1

Nancy Wiser acts as Treasurer of 64 funds in the Fund Complex. Jeremy DePalma acts as Treasurer of 85 funds and Assistant Treasurer of 64 funds in the Fund Complex.

 

2

The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at wfam.com.

 

3 

Pamela Wheelock was re-appointed to the Board effective January 1, 2020.

 

4 

Michelle Rhee became Chief Legal Officer effective October 22, 2019.

 

5 

Catherine Kennedy became Secretary effective October 22, 2019.

 

 

Wells Fargo Minnesota Tax-Free Fund  |  27


Appendix (unaudited)

 

Effective on or about May 1, 2020, if you purchase Fund shares through a Janney Montgomery Scott LLC (“Janney”) brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge (“CDSC”), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in the Fund’s Prospectus or SAI.

 

Front-end sales charge* waivers on Class A shares available at Janney
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).
Shares purchased by employees and registered representatives of Janney or its affiliates and their family members as designated by Janney.
Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within ninety (90) days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., right of reinstatement).
Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
Shares acquired through a right of reinstatement.
Class C shares that are no longer subject to a contingent deferred sales charge and are converted to Class A shares of the same fund pursuant to Janney’s policies and procedures.
CDSC waivers on Class A and Class C shares available at Janney
Shares sold upon the death or disability of the shareholder.
Shares sold as part of a systematic withdrawal plan as described in the Fund’s Prospectus.
Shares purchased in connection with a return of excess contributions from an IRA account.
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRS regulations.
Shares sold to pay Janney fees but only if the transaction is initiated by Janney.
Shares acquired through a right of reinstatement.
Shares exchanged into the same share class of a different fund.
Front-end sales charge* discounts available at Janney; breakpoints, rights of accumulation and/or letters of intent
Breakpoints as described in the Fund’s Prospectus.
Rights of accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Janney. Eligible fund family assets not held at Janney may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.
Letters of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Janney Montgomery Scott may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.

 

*

Also referred to as an “initial sales charge.”

 

 

28  |  Wells Fargo Minnesota Tax-Free Fund


LOGO

For more information

More information about Wells Fargo Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:

Wells Fargo Funds

P.O. Box 219967

Kansas City, MO 64121-9967

Website: wfam.com

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

 

LOGO

 

This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-222-8222 or visit the Fund’s website at wfam.com. Read the prospectus carefully before you invest or send money.

Wells Fargo Asset Management (WFAM) is the trade name for certain investment advisory/management firms owned by Wells Fargo & Company. These firms include but are not limited to Wells Capital Management Incorporated and Wells Fargo Funds Management, LLC. Certain products managed by WFAM entities are distributed by Wells Fargo Funds Distributor, LLC (a broker-dealer and Member FINRA).

This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind—including a recommendation for any specific investment, strategy, or plan.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE     MAY LOSE VALUE


© 2020 Wells Fargo & Company. All rights reserved.

PAR-0120-02393 02-20

SA252/SAR252 12-19

 

 



LOGO

Semi-Annual Report

December 31, 2019

 

Wells Fargo

California Tax-Free Fund

 

 

 

 

Beginning on January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, paper copies of the Wells Fargo Funds’ annual and semi-annual shareholder reports issued after this date will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-222-8222 or by enrolling at wellsfargo.com/advantagedelivery.

You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call 1-800-222-8222. Your election to receive reports in paper will apply to all Wells Fargo Funds held in your account with your financial intermediary or, if you are a direct investor, to all Wells Fargo Funds that you hold.


 

 

Reduce clutter.

Save trees.

Sign up for electronic delivery of prospectuses and shareholder reports at wellsfargo.com/advantagedelivery

 

The views expressed and any forward-looking statements are as of December 31, 2019, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Asset Management. Discussions of individual securities, or the markets generally, or any Wells Fargo Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Asset Management and the Fund disclaim any obligation to publicly update or revise any views expressed or forward-looking statements.

 

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE    MAY LOSE VALUE


 

 

Wells Fargo California Tax-Free Fund  |  1


Letter to shareholders (unaudited)

 

LOGO

Andrew Owen

President

Wells Fargo Funds

“After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July.”

Dear Shareholder:

We are pleased to offer you this semi-annual report for the Wells Fargo California Tax-Free Fund for the six-month period that ended December 31, 2019. Despite periods of market volatility, the year was strongly positive for financial markets as supportive central banks more than offset concerns over slowing global economic growth and international trade tensions.

Overall, both fixed-income and equity investors enjoyed healthy returns. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 10.92% and international stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned 6.96%. The MSCI EM Index (Net)3 gained 7.09%. For bond investors, the Bloomberg Barclays U.S. Aggregate Bond Index4 added 2.45%, the Bloomberg Barclays Global Aggregate ex-USD Index5 returned 0.09%, the Bloomberg Barclays Municipal Bond Index6 gained 2.32%, and the ICE BofA U.S. High Yield Index7 added 3.86%.

Sentiment turned positive, driven by central bank support.

After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July. The gains, primarily driven by geopolitical and monetary policy events, pushed equity markets to new highs. European Central Bank President Mario Draghi indicated the bank was ready to cut rates or buy more assets to prop up inflation if needed. President Trump backed off of tariff threats against Mexico and China. The U.S. Federal Reserve (Fed) implemented a 0.25% federal funds rate cut in July.

Throughout the summer, U.S.-China trade tensions simmered. Major U.S. stock market indices closed July with the worst weekly results of the year. Bond prices gained as Treasury yields fell to multiyear lows, and the yield curve inverted at multiple points along the 30-year arc.

Evidence of a continued global economic slowdown mounted, and central banks in China, New Zealand, and Thailand cut interest rates. Industrial and manufacturing data declined in China, Canada, Japan, and Germany. Adding to global uncertainty, Italy’s prime minister resigned, many feared a crackdown in Hong Kong as protestors sustained their calls for reform, and Boris Johnson planned to suspend Parliament as Brexit’s deadline neared.

In the U.S., the Fed cut interest rates a second time in September. U.S. manufacturing data disappointed investors. The U.S. Congress announced it would pursue an impeachment investigation of President Trump. Meanwhile, the Brexit impasse showed no signs of resolution. Officials in China warned of the negative economic impact of tariffs and trade restrictions. Although the S&P 500 Index finished the third quarter with the best year-to-date returns in more than 20 years, concerns about future returns remained.

 

 

 

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 Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the United States. 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. You cannot invest directly in an index.

 

3 

The MSCI Emerging Markets (EM) Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index.

 

4

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index.

 

5

The Bloomberg Barclays Global Aggregate ex-USD Index is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S. dollar-denominated debt market. You cannot invest directly in an index.

 

6 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

7

The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2020. ICE Data Indices, LLC. All rights reserved.

 

 

2  |  Wells Fargo California Tax-Free Fund


Letter to shareholders (unaudited)

 

The fourth quarter started on a strong note, with a relaxing of U.S.-China trade tensions in October along with renewed optimism for a U.K. Brexit deal and positive macroeconomic data. The initial estimate of U.S. third-quarter gross domestic product growth was a 1.9% annualized rate, while the U.S. unemployment rate fell to a 50-year low of 3.5% in September. However, despite resilience among U.S. consumers, business confidence declined while manufacturing activity contracted. Concerned with a potential economic slowdown, the Fed lowered interest rates another quarter point in late October, its third rate cut in four months. This helped push the S&P 500 Index to a new all-time high, while emerging market equities rallied and global bonds declined overall, reflecting a broad pickup in risk appetite.

Equity markets continued to rally in November despite ongoing geopolitical risks. Hopes for a U.S.-China trade deal buoyed investor confidence. U.S. business sentiment improved slightly, and manufacturing and services activity picked up. Throughout the month, central bank actions were on hold. With that positive backdrop, developed market equities outpaced those in emerging markets, and U.S. stocks outperformed non-U.S. stocks overall. While consumer confidence and purchasing manager activity rose in the eurozone, China reported weakening manufacturing and consumer data. Bond yields rose marginally, leading to slightly negative returns for global government and investment-grade corporate bonds.

Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal, with some details to be worked out. That, along with the landslide election win by the pro-Brexit U.K. Conservative Party and ongoing central bank support, gave investors a greater sense of certainty. U.S. economic indicators were broadly positive, with the exception of manufacturing activity and business confidence. Consumer confidence was resilient, fed by a robust labor market, tame inflation, and lower interest rates, which boosted housing affordability and homebuyer activity. The impeachment of U.S. President Donald Trump, while historically noteworthy, had little impact on markets. Meanwhile, slowing Chinese economic activity, due in part to the trade war, led to further government stimulus at year-end through lower reserve ratios, allowing banks to lend more money.

Don’t let short-term uncertainty derail long-term investment goals.

Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.

Thank you for choosing to invest with Wells Fargo Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.

Sincerely,

 

LOGO

Andrew Owen

President

Wells Fargo Funds

 

“Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal”

 

 

For further information about your Fund, contact your investment professional, visit our website at wfam.com,

or call us directly at 1-800-222-8222.

 

 

 

Wells Fargo California Tax-Free Fund  |  3


Performance highlights (unaudited)

 

Investment objective

The Fund seeks current income exempt from federal income tax and California individual income tax.

Manager

Wells Fargo Funds Management, LLC

Subadviser

Wells Capital Management Incorporated

Portfolio managers

Terry J. Goode

Brandon Pae

Adrian Van Poppel

Average annual total returns (%) as of December 31, 2019

 

 
        Including sales charge     Excluding sales charge     Expense ratios1 (%)  
 
    Inception date   1 year     5 year     10 year     1 year     5 year     10 year     Gross     Net2  
                   
Class A (SCTAX)   10-6-1988     2.19       2.13       4.33       6.97       3.09       4.81       0.83       0.75  
                   
Class C (SCTCX)   7-1-1993     5.19       2.33       4.03       6.19       2.33       4.03       1.58       1.50  
                   
Administrator Class (SGCAX)   12-15-1997                       7.27       3.31       5.02       0.77       0.55  
                   
Institutional Class (SGTIX)3   10-31-2014                       7.25       3.38       5.06       0.50       0.48  
                   
Bloomberg Barclays Municipal Bond Index4                         7.54       3.53       4.34              
                   
Bloomberg Barclays Municipal Bond: California Index5                         7.67       3.52       4.85              

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, wfam.com.

Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.

For Class A shares, the maximum front-end sales charge is 4.50%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Administrator Class and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.

Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. 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). The Fund is exposed to California municipal securities risk, high-yield securities risk, and non-diversification risk. Consult the Fund’s prospectus for additional information on these and other risks. A portion of the Fund’s income may be subject to federal, state, and/or local income taxes or the Alternative Minimum Tax (AMT). Any capital gains distributions may be taxable.

 

Please see footnotes on page 5.

 

 

4  |  Wells Fargo California Tax-Free Fund


Performance highlights (unaudited)

 

Effective maturity distribution as of December 31, 20196
LOGO

 

Credit quality as of December 31, 20197

 

LOGO

 

 

 

 

 

1 

Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report.

 

2 

The manager has contractually committed through October 31, 2020, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.75% for Class A, 1.50% for Class C, 0.55% for Administrator Class, and 0.48% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Without this cap, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses.

 

3 

Historical performance shown for the Institutional Class shares prior to their inception reflects the performance of the Administrator Class shares and includes the higher expenses applicable to Administrator Class shares. If these expenses had not been included, returns for Institutional Class shares would be higher.

 

4 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

5 

The Bloomberg Barclays Municipal Bond: California Index is the California component of the Bloomberg Barclays Municipal Bond Index. You cannot invest directly in an index.

 

6 

Amounts are calculated based on the long-term total investments of the Fund. These amounts are subject to change and may have changed since the date specified.

 

7 

The credit quality distribution of portfolio holdings reflected in the chart is based on ratings from Standard & Poor’s, Moody’s Investors Service, and/ or Fitch Ratings Ltd. Credit quality ratings apply to the underlying holdings of the Fund and not to the Fund itself. The percentages of the Fund’s portfolio with the ratings depicted in the chart are calculated based on the total market value of fixed income securities held by the Fund. If a security was rated by all three rating agencies, the middle rating was utilized. If rated by two of three rating agencies, the lower rating was utilized, and if rated by one of the rating agencies, that rating was utilized. Standard & Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories. Standard & Poor’s rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody’s rates the creditworthiness of bonds, ranging from Aaa (highest) to C (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Moody’s rates the creditworthiness of short-term U.S. tax-exempt municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Credit quality distribution is subject to change and may have changed since the date specified.

 

 

Wells Fargo California Tax-Free Fund  |  5


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 and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing 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 period from July 1, 2019 to December 31, 2019.

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) and contingent deferred sales charges. 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
account  value
7-1-2019
     Ending
account value
12-31-2019
     Expenses
paid during
the period¹
     Annualized net
expense ratio
 
         

Class A

           

Actual

   $ 1,000.00      $ 1,020.74      $ 3.81        0.75

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,021.37      $ 3.81        0.75
         

Class C

           

Actual

   $ 1,000.00      $ 1,016.78      $ 7.60        1.50

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,017.60      $ 7.61        1.50
         

Administrator Class

           

Actual

   $ 1,000.00      $ 1,021.75      $ 2.80        0.55

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.37      $ 2.80        0.55
         

Institutional Class

           

Actual

   $ 1,000.00      $ 1,022.11      $ 2.44        0.48

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.72      $ 2.44        0.48

 

 

1

Expenses paid is equal to the annualized net expense ratio of each class 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).

 

 

6  |  Wells Fargo California Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
   

Maturity

date

     Principal      Value  
Municipal Obligations: 98.22%                      
California: 90.81%                      
Airport Revenue: 4.35%                      

California Municipal Finance Authority AMT Senior Lien Linxs Apartment Project Series A

    5.00     12-31-2043      $ 5,730,000      $ 6,688,801  

Los Angeles CA Department of Airports Revenue Series D

    4.00       5-15-2049        4,000,000        4,454,240  

Los Angeles CA Department of Airports Revenue Series F

    5.00       5-15-2049        5,000,000        6,008,550  

Sacramento County CA Airport System Refunding Bond AMT Senior Series C

    5.00       7-1-2037        7,300,000        8,843,001  

Sacramento County CA Airport System Refunding Bond AMT Senior Series C

    5.00       7-1-2038        3,000,000        3,622,440  

San Diego County CA Regional Airport Authority Airport Revenue Refunding Subordinated Bond Series A

    5.00       7-1-2049        3,000,000        3,697,170  

San Francisco City & County Airport Commission San Francisco International Airport Series A

    5.00       5-1-2047        7,715,000        9,036,888  

San Jose CA Airport AMT Refunding Bond Series A

    5.00       3-1-2047        4,000,000        4,677,040  

San Jose CA Airport Refunding Bond Series B

    5.00       3-1-2042        1,750,000        2,109,713  
            49,137,843  
         

 

 

 
Education Revenue: 4.92%                      

California Educational Facilities Authority Loma Linda University Series A

    5.00       4-1-2042        2,645,000        3,102,294  

California Municipal Finance Authority Education Revenue Literacy First Charter School Series A

    5.00       12-1-2049        1,390,000        1,608,578  

California Municipal Finance Authority California Baptist University Series A 144A

    4.00       11-1-2021        400,000        410,884  

California Municipal Finance Authority California Baptist University Series A 144A

    5.00       11-1-2025        1,025,000        1,142,926  

California Municipal Finance Authority Charter School Albert Einstein Academies Project Series A

    6.75       8-1-2033        1,525,000        1,722,564  

California Municipal Finance Authority Charter School Albert Einstein Academies Project Series A

    7.13       8-1-2043        1,000,000        1,129,490  

California Municipal Finance Authority Charter School Revenue John Dams Academics Lincoln Series A 144A

    5.00       10-1-2049        1,525,000        1,606,908  

California Municipal Finance Authority Refunding Bond Biola University Incorporated

    5.00       10-1-2035        600,000        714,000  

California Municipal Financing Authority Charter School Palmdale Aerospace Academy Project 144A

    5.00       7-1-2041        1,250,000        1,380,225  

California Municipal Financing Authority Charter School Revenue Palmdale Aerospace Academy Series A 144A

    5.00       7-1-2049        1,800,000        2,017,980  

California School Finance Authority Bright Star Schools Obligation Group 144A

    5.00       6-1-2047        1,000,000        1,076,840  

California School Finance Authority Bright Star Schools Obligation Group 144A

    5.00       6-1-2054        1,000,000        1,068,180  

California School Finance Authority Green Dot Public Schools Projects 144A

    4.00       8-1-2025        475,000        523,825  

California School Finance Authority Green Dot Public Schools Projects 144A

    5.00       8-1-2035        2,525,000        2,853,149  

California School Finance Authority KIPP Louisiana School Projects Series A 144A

    5.00       7-1-2035        1,000,000        1,134,950  

California School Finance Authority Rocketship Education Series A 144A

    5.00       6-1-2036        945,000        1,008,532  

California School Finance Authority Rocketship Education Series A 144A

    5.00       6-1-2046        2,100,000        2,224,257  

California Statewide CDA Refunding Bond California Baptist University Series A 144A

    5.00       11-1-2032        1,135,000        1,340,866  

California Statewide CDA Refunding Bond California Baptist University Series A 144A

    5.00       11-1-2041        2,875,000        3,323,299  

California Statewide CDA School Facility Alliance for College-Ready Public Schools

    6.75       7-1-2031        1,625,000        1,764,279  

California University Systemwide Refunding Bond Series A

    4.00       11-1-2038        8,000,000        8,876,560  

California University Systemwide Refunding Bond Series A

    5.00       11-1-2045        6,400,000        7,526,208  

University of California Series AI

    5.00       5-15-2038        2,000,000        2,238,580  

University of California Series K

    4.00       5-15-2046        5,295,000        5,803,585  
            55,598,959  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Tax-Free Fund  |  7


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
   

Maturity

date

     Principal      Value  
GO Revenue: 29.78%      

Alhambra CA Unified School District Election of 2008 Series B (AGM Insured)

    6.00 %       8-1-2029      $ 4,100,000      $ 4,426,810  

Alvord CA Unified School District Election of 2012 Series A (AGM Insured)

    5.25       8-1-2037        1,620,000        1,834,649  

Bassett CA Unified School District Refunding Bond Series B (BAM Insured)

    5.00       8-1-2027        1,050,000        1,248,481  

Beaumont CA Unified School District Election of 2008 Series D (BAM Insured)

    5.25       8-1-2044        2,000,000        2,421,620  

Cabrillo CA Unified School District CAB Series A (Ambac Insured) ¤

    0.00       8-1-2021        1,500,000        1,469,625  

California

    5.25       11-1-2040        3,000,000        3,103,020  

California Statewide Series B (1 Month LIBOR +0.76%) ±

    1.95       12-1-2031        2,500,000        2,516,550  

California Various Purposes

    5.00       9-1-2029        1,475,000        1,570,890  

California Various Purposes

    5.00       9-1-2032        5,100,000        5,790,030  

California Various Purposes

    5.00       2-1-2038        5,000,000        5,557,250  

California Various Purposes

    5.00       10-1-2039        5,000,000        5,927,650  

California Various Purposes

    5.00       8-1-2046        10,000,000        11,833,000  

California Various Purposes

    5.00       4-1-2049        2,500,000        3,103,200  

California Various Purposes

    5.25       9-1-2028        5,000,000        5,348,200  

California Various Purposes

    5.25       4-1-2035        12,640,000        13,793,147  

California Various Purposes

    5.60       3-1-2036        8,715,000        8,778,097  

California Various Purposes Refunding Bond

    5.00       9-1-2035        35,000,000        42,408,450  

Center Unified School District California CAB Series C (National Insured) ¤

    0.00       9-1-2021        5,000,000        4,887,800  

Centinela Valley CA Union High School District Election of 2008 Series B

    6.00       8-1-2036        2,500,000        2,947,900  

Centinela Valley CA Union High School District Election of 2008 Series C

    5.00       8-1-2035        2,000,000        2,312,420  

Cerritos CA Community College CAB Election of 2004 ¤

    0.00       8-1-2029        1,750,000        1,428,263  

Cerritos CA Community College CAB Election of 2004 ¤

    0.00       8-1-2033        1,500,000        1,079,325  

College of the Sequoias Tulare Area Improvement District #3 California CAB Election of 2008 Series A (AGC Insured) ¤

    0.00       8-1-2024        1,000,000        931,600  

Compton CA Community College CAB Election of 2002 Series C ¤

    0.00       8-1-2035        3,445,000        2,206,764  

Contra Costa County CA Community College District Election of 2006

    5.00       8-1-2038        3,250,000        3,719,333  

Delano CA Union High School Election of 2010 Series B (AGM Insured)

    5.75       8-1-2035        4,510,000        4,628,297  

Escondido CA Union High School CAB Election of 2008 Series A (AGC Insured) ¤

    0.00       8-1-2027        8,385,000        7,324,465  

Escondido CA Union School District

    4.00       8-1-2043        2,150,000        2,388,113  

Garden Grove CA Unified School District Election of 2010 Series C

    5.25       8-1-2037        2,000,000        2,306,380  

Hayward CA Unified School District Refunding Bond

    5.00       8-1-2038        6,000,000        6,825,720  

Inglewood CA Unified School District Election of 2012 GO Bond Series B (BAM Insured)

    5.00       8-1-2036        200,000        233,870  

Inglewood CA Unified School District Election of 2012 GO Bond Series B (BAM Insured)

    5.00       8-1-2038        500,000        581,620  

Long Beach CA Unified School District CAB Election of 2008 Series B ¤

    0.00       8-1-2035        2,000,000        1,370,800  

Long Beach CA Unified School District Election of 2008 Series F

    3.00       8-1-2047        15,000,000        15,195,150  

Long Beach CA Unified School District Unrefunded Bond Election of 2008 Series A

    5.50       8-1-2026        95,000        95,333  

Los Angeles CA Community College District Refunding Bond

    4.00       8-1-2038        10,000,000        11,252,900  

Lynwood CA Unified School District Election of 2012 Series A (AGM Insured)

    5.00       8-1-2033        5,000        5,580  

Merced CA City School District Election of 2014

    5.00       8-1-2045        1,000,000        1,161,170  

Merced CA Union High School District CAB Series C ¤

    0.00       8-1-2032        3,380,000        2,521,852  

Mount San Antonio CA Community College District CAB Election of 2008 Series A ¤

    0.00       8-1-2024        1,610,000        1,510,808  

Natomas CA Unified School District Series 1999 (National Insured)

    5.95       9-1-2021        245,000        254,173  

Norwalk-La Mirada CA Unified School District CAB Election of 2002 Series D (AGM Insured) ¤

    0.00       8-1-2023        1,500,000        1,428,585  

Oakland CA Unified School District Alameda County

    5.00       8-1-2029        10,125,000        12,299,648  

Oakland CA Unified School District Election of 2012

    5.50       8-1-2023        500,000        564,160  

Oakland CA Unified School District Election of 2012

    6.63       8-1-2038        7,750,000        8,442,153  

Oakland CA Unified School District Election of 2012 Series A

    5.00       8-1-2040        3,500,000        4,049,570  

Oxnard CA School District Election of 2012 Series D (AGM Insured)

    5.00       8-1-2034        1,695,000        2,011,118  

Pajaro Valley CA Unified School District Election of 2012 Series A

    5.00       8-1-2038        1,700,000        1,908,998  

Paramount CA Unified School District CAB Election of 2006 ¤

    0.00       8-1-2033        2,500,000        1,791,650  

 

The accompanying notes are an integral part of these financial statements.

 

 

8  |  Wells Fargo California Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
   

Maturity

date

     Principal      Value  
GO Revenue (continued)      

Piedmont CA Unified School District Election of 2016

    3.00 %       8-1-2045      $ 5,235,000      $ 5,336,768  

Piedmont CA Unified School District Election of 2016

    3.00       8-1-2049        10,325,000        10,482,560  

Pomona CA Unified School District Series A (National Insured)

    6.55       8-1-2029        1,480,000        1,884,188  

Poway CA Unified School District CAB Election of 2008 Improvement District 07-1-A ¤

    0.00       8-1-2024        1,800,000        1,684,512  

Rialto CA Unified School District CAB Election of 2010 Series A (AGM Insured) ¤

    0.00       8-1-2026        3,320,000        2,963,498  

Sacramento CA Unified School District Election of 2012 Series A (BAM Insured)

    5.25       8-1-2033        1,000,000        1,130,220  

Sacramento CA Unified School District Election of 2012 Series C (AGM Insured)

    5.00       8-1-2033        2,735,000        3,207,143  

San Bernardino County CA Community Election of 2008 Series D

    5.00       8-1-2045        2,000,000        2,434,160  

San Bernardino County CA Unified School District Election of 2012 Series C (AGM Insured)

    5.00       8-1-2040        8,000,000        9,352,800  

San Diego CA Community College Election of 2002

    5.00       8-1-2031        4,000,000        4,570,040  

San Diego CA Unified School District

    4.00       7-1-2047        2,025,000        2,264,679  

San Gorgonio CA Memorial Healthcare Refunding Bond

    5.00       8-1-2032        1,750,000        1,950,760  

San Gorgonio CA Memorial Healthcare Refunding Bond

    5.50       8-1-2028        2,525,000        2,907,184  

San Joaquin CA Delta Community College District Election of 2004 Series C

    5.00       8-1-2033        3,195,000        3,713,453  

San Joaquin CA Delta Community College District Election of 2004 Series C

    5.00       8-1-2034        3,315,000        3,846,527  

San Jose CA Unified School District Santa Clara County

    4.00       8-1-2042        4,000,000        4,579,480  

San Mateo County CA Jefferson Union High School District CAB Election of 2006 Series D ¤

    0.00       8-1-2033        7,000,000        2,589,510  

San Mateo County CA Jefferson Union High School District CAB Election of 2006 Series D ¤

    0.00       8-1-2036        11,130,000        3,214,567  

San Mateo County CA Jefferson Union High School District Prerefunded CAB Election of 2006 Series D ¤

    0.00       8-1-2034        6,915,000        2,354,212  

San Mateo County CA Jefferson Union High School District Unrefunded CAB Election of 2006 Series D ¤

    0.00       8-1-2034        2,990,000        1,017,138  

San Rafael CA City High School District CAB Election of 2002 Series B (National Insured) ¤

    0.00       8-1-2023        1,260,000        1,205,140  

Sanger CA Unified School District Refunding Bond (National Insured)

    5.60       8-1-2023        620,000        645,792  

Santa Ana CA Unified School District CAB Election of 2008 Series B (AGC Insured) ¤

    0.00       8-1-2038        15,000,000        9,030,300  

Santa Rosa CA High School District Prerefunded Bond

    5.00       8-1-2024        750,000        827,363  

Santa Rosa CA High School District Unrefunded Bond

    5.00       8-1-2024        255,000        280,194  

Sierra Kings CA Health Care District

    5.00       8-1-2028        1,000,000        1,168,440  

Sierra Kings CA Health Care District

    5.00       8-1-2032        1,500,000        1,726,770  

Sierra Kings CA Health Care District

    5.00       8-1-2037        1,750,000        1,996,295  

Simi Valley CA Unified School District

    4.00       8-1-2048        3,250,000        3,614,520  

Sonoma Valley CA Unified School District CAB Election of 2010 Series A ¤

    0.00       8-1-2027        1,020,000        892,327  

South Pasadena CA Unified School District Series A (FGIC Insured)

    5.55       11-1-2020        115,000        119,428  

Stockton CA Unified School District Election of 2012 Series A (AGM Insured)

    5.00       8-1-2038        1,025,000        1,162,688  

Washington Township CA Health Care District Election of 2004 Series B

    5.50       8-1-2038        1,500,000        1,768,560  

West Contra Costa CA Unified School District (AGM Insured)

    5.25       8-1-2024        1,350,000        1,440,221  

West Contra Costa CA Unified School District CAB Election of 2005 Series B

    6.00       8-1-2027        1,080,000        1,457,903  

West Contra Costa CA Unified School District CAB Election of 2005 Series C-1 (AGC Insured) ¤

    0.00       8-1-2021        6,000,000        5,880,300  

Wiseburn CA School District CAB (AGC Insured) ¤

    0.00       8-1-2027        1,525,000        1,332,118  
            336,827,945  
         

 

 

 
Health Revenue: 13.69%      

Association of Bay Area Governments California Finance Authority for Nonprofit Corporation Insured O’Connor Woods Project

    5.00       1-1-2043        5,000,000        5,548,749  

Association of Bay Area Governments California Finance Authority for Nonprofit Corporation Insured Senior Living Odd Fellows Home of California Series A

    5.00       4-1-2042        1,100,000        1,220,020  

California HFFA Catholic Healthcare West Series A

    5.25       3-1-2023        3,000,000        3,141,060  

California HFFA El Camino Hospital

    5.00       2-1-2035        3,000,000        3,648,720  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Tax-Free Fund  |  9


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
   

Maturity

date

     Principal      Value  
Health Revenue (continued)      

California HFFA LA Biomedical Research Institute at Harbor-UCLA Medical Center

    5.00 %       9-1-2048      $ 6,095,000      $ 7,081,537  

California HFFA Nevada Methodist Homes

    5.00       7-1-2030        1,830,000        2,186,447  

California HFFA Nevada Methodist Homes

    5.00       7-1-2035        1,000,000        1,172,620  

California HFFA Nevada Methodist Homes

    5.00       7-1-2045        4,500,000        5,164,920  

California HFFA Refunding Bond Cedars Sinai Medical Center Series B

    4.00       8-15-2039        10,500,000        11,749,395  

California HFFA Refunding Bond Children’s Hospital Series A

    5.00       8-15-2047        10,050,000        11,726,340  

California HFFA Revenue City of Hope

    5.00       11-15-2049        2,000,000        2,363,360  

California HFFA Sutter Health Series B

    5.00       11-15-2046        5,000,000        5,895,250  

California HFFA Sutter Health Series D

    5.25       8-15-2031        3,100,000        3,310,676  

California Municipal Finance Authority Refunding Bond Channing House Project Series A

    5.00       5-15-2034        1,000,000        1,212,580  

California Municipal Finance Authority Refunding Bond Community Medical Centers Series A

    5.00       2-1-2047        6,625,000        7,636,836  

California Municipal Finance Authority Refunding Bond Eisenhower Medical Center Series A

    5.00       7-1-2047        1,400,000        1,608,614  

California Municipal Finance Authority Revenue Healthright 360 Series A 144A

    5.00       11-1-2049        2,000,000        2,214,240  

California Municipal Finance Authority Revenue Refunding Bond Humangood Obligation Group Series A

    5.00       10-1-2044        5,000,000        5,818,500  

California PFA Refunding Bond Henry Mayo Newhall Hospital

    5.00       10-15-2037        500,000        570,550  

California PFA Refunding Bond Henry Mayo Newhall Hospital

    5.00       10-15-2047        5,265,000        5,915,385  

California State HFFA

    4.00       11-15-2048        5,000,000        5,518,200  

California State HFFA

    4.00       11-1-2051        3,000,000        3,279,990  

California State Municipal Finance Authority Revenue

    5.00       7-1-2039        1,000,000        1,246,290  

California State Municipal Finance Authority Revenue

    5.00       7-1-2049        2,650,000        3,235,438  

California State Municipal Finance Authority Senior Living Revenue

    5.00       11-15-2049        1,125,000        1,311,863  

California Statewide CDA Adventist Health System Series A

    5.00       3-1-2045        2,500,000        2,887,425  

California Statewide CDA Enloe Medical Center (Ambac Insured)

    5.00       8-15-2033        1,650,000        1,968,186  

California Statewide CDA Enloe Medical Center (Ambac Insured)

    5.00       8-15-2035        1,000,000        1,187,000  

California Statewide CDA Enloe Medical Center (Ambac Insured)

    5.00       8-15-2038        2,000,000        2,352,380  

California Statewide CDA Loma Linda University Medical Center Refunding Bond Series A

    5.25       12-1-2044        5,150,000        5,682,047  

California Statewide CDA Redwoods Projects

    5.13       11-15-2035        1,500,000        1,715,895  

California Statewide CDA Revenue Refunding Bond Adventist Health System West Series A

    5.00       3-1-2048        5,000,000        5,930,450  

California Statewide Communities Marin General Hospital Series A

    5.00       8-1-2036        700,000        854,833  

California Statewide Communities Marin General Hospital Series A

    5.00       8-1-2037        500,000        608,585  

California Statewide Communities Marin General Hospital Series A

    5.00       8-1-2038        450,000        546,102  

Palomar Health CA Refunding Bond

    5.00       11-1-2042        4,000,000        4,613,960  

San Buenaventura CA Community Mental Health System

    8.00       12-1-2031        1,615,000        1,793,748  

University of California Regents Medical Center Prerefunded Bond Series J

    5.25       5-15-2038        7,790,000        8,886,053  

University of California Regents Medical Center Series J

    5.00       5-15-2033        2,265,000        2,573,063  

University of California Regents Medical Center Series L

    4.00       5-15-2044        4,065,000        4,458,817  

University of California Regents Medical Center Unrefunded Bond Series J

    5.25       5-15-2038        2,210,000        2,481,653  

Washington Township CA Health Care District Series A

    5.00       7-1-2026        1,190,000        1,399,357  

Washington Township CA Health Care District Series A

    5.00       7-1-2042        1,000,000        1,158,550  
            154,875,684  
         

 

 

 
Housing Revenue: 4.56%      

California Community Housing Agency Essential Housing Revenue Verdant at Green Valley Series A 144A

    5.00       8-1-2049        3,000,000        3,389,520  

California Community Housing Agency Workforce Apartments Series A 144A

    5.00       4-1-2049        3,000,000        3,330,180  

California HFA Municipal Certificate of Participation Series 2019 Class A

    4.00       3-20-2033        6,625,000        7,576,019  

California Housing Finance Agency Municipal Certificate of Participation Series 2019 1 Class A

    4.25       1-15-2035        4,977,277        5,830,631  

California Independent Cities Finance Authority Mobil Home Park Revenue

    5.00       5-15-2048        2,000,000        2,363,700  

 

The accompanying notes are an integral part of these financial statements.

 

 

10  |  Wells Fargo California Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
   

Maturity

date

     Principal      Value  
Housing Revenue (continued)      

California Independent Cities Finance Refunding Bond Sanitary Juan Mobile Estates

    5.00 %       8-15-2030      $ 1,000,000      $ 1,165,620  

California Independent Cities Finance Refunding Bond Santa Rose Leisure Mobile

    5.00       8-15-2046        1,570,000        1,812,942  

California Municipal Finance Authority LLC-West Village Student Housing Project

    5.00       5-15-2048        6,700,000        7,895,548  

California Municipal Finance Authority Mobile Senior Caritas Projects Series A

    5.00       8-15-2029        500,000        589,990  

California Municipal Finance Authority Student Housing Revenue Bonds

    5.00       5-15-2049        5,650,000        6,728,755  

California Statewide CDA College Housing Series 2019 144A

    5.25       7-1-2049        2,000,000        2,301,600  

California Statewide CDA Poway Retirement Housing Foundation Housing Incorporated Series A

    5.25       11-15-2035        1,500,000        1,722,945  

California Statewide Communities Development Authority 144A

    5.00       6-1-2051        1,440,000        1,661,818  

Contra Costa County CA Home Mortgage Revenue Bonds GNMA Mortgage-Backed Securities Program (GNMA Insured)

    7.75       5-1-2022        75,000        81,038  

Tender Option Bond Trust Receipts/Certificates Various States Floaters Series 2019 XF1085 (Deutsche Bank LIQ) 144Aø

    1.91       8-1-2059        5,090,000        5,090,000  
            51,540,306  
         

 

 

 
Industrial Development Revenue: 0.26%      

California PCFA Solid Waste Disposal Revenue AMT Subordinated Calplant I Project Green 144A

    7.50       12-1-2039        1,000,000        951,450  

California PCFA Solid Waste Disposal AMT Green Bond Calplant I Project 144A

    8.00       7-1-2039        2,000,000        2,015,500  
            2,966,950  
         

 

 

 
Miscellaneous Revenue: 13.38%      

Alameda CA Joint Powers Authority Multiple Capital Projects Series A

    5.00       12-1-2034        1,005,000        1,142,332  

Anaheim CA PFA CAB Subordinate Lien Public Improvements Project Series C (AGM Insured) ¤

    0.00       9-1-2025        10,000,000        9,084,299  

Anaheim CA PFA Convention Center Expansion Project Series A

    5.00       5-1-2039        3,000,000        3,425,279  

Anaheim CA PFA Convention Center Expansion Project Series A

    5.00       5-1-2046        3,000,000        3,395,939  

California Enterprise Development Authority Lease Revenue Riverside County Library Facilities Project

    4.00       11-1-2049        1,900,000        2,084,433  

California Infrastructure & Economic Development King City Joint Union High School

    5.75       8-15-2029        2,150,000        2,161,675  

California Infrastructure & Economic Development Bank Lease Revenue California State Teachers Retirement

    5.00       8-1-2049        4,000,000        4,951,920  

California Public Works Board California State University Projects Series B-1

    5.70       3-1-2035        2,210,000        2,225,735  

California Public Works Board Judicial Council Projects Series A

    5.00       3-1-2038        7,000,000        7,727,020  

California Public Works Board Judicial Council Projects Series D

    5.25       12-1-2025        4,000,000        4,318,480  

California Public Works Board Various Capital Projects Series A

    5.00       4-1-2037        4,925,000        5,315,109  

California Public Works Board Various Capital Projects Series G

    5.00       11-1-2037        23,000,000        25,272,860  

California Public Works Board Various Capital Projects Series I

    5.50       11-1-2033        2,000,000        2,306,560  

California Public Works University of California Board of Regents Series G

    5.00       12-1-2030        9,850,000        10,615,345  

California Statewide CDA Water & Wastewater Pooled Financing Program Series B (AGM Insured)

    5.25       10-1-2027        1,040,000        1,043,484  

California Statewide Communities Series A

    5.00       9-2-2047        2,000,000        2,341,920  

Compton CA PFA Refunding Bond 144A

    4.00       9-1-2027        3,800,000        3,908,946  

Compton CA PFA Refunding Bond 144A

    4.50       9-1-2032        2,000,000        2,074,780  

Emeryville CA PFA Assessment District Refinancing

    5.90       9-2-2021        400,000        401,152  

Fullerton CA Joint Union High School Project Certificate of Participation (BAM Insured)

    5.00       9-1-2035        1,385,000        1,613,317  

Irvine CA Improvement Bond Act 1915 Limited Obligation Reassessment District #15-2

    5.00       9-2-2025        725,000        852,506  

Irvine CA Improvement Bond Act 1915 Limited Obligation Reassessment District #15-2

    5.00       9-2-2026        400,000        468,648  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Tax-Free Fund  |  11


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
   

Maturity

date

     Principal      Value  
Miscellaneous Revenue (continued)      

Irvine CA Improvement Bond Act 1915 Limited Obligation Reassessment District #15-2

    5.00 %       9-2-2042      $ 1,500,000      $ 1,690,770  

Los Angeles CA Community Redevelopment Vermont Manchester Social Services Project (Ambac Insured)

    5.00       9-1-2025        2,310,000        2,317,300  

Los Angeles CA Public Works Financing Authority Series A

    5.00       12-1-2039        2,860,000        3,331,214  

Modesto CA Irrigation District Financing Authority Series A

    5.00       10-1-2040        3,500,000        4,113,655  

Montclair CA PFA Lease Refunding Bond (AGM Insured)

    5.00       10-1-2035        2,400,000        2,756,352  

Riverside County CA Asset Leasing Corporation Riverside County Hospital Project (National Insured) ¤

    0.00       6-1-2026        10,000,000        8,970,000  

Sacramento CA City Financing Authority Refunding Bond Master Lease Program Facilities (BAM Insured)

    5.00       12-1-2035        1,300,000        1,534,403  

Sacramento CA City Financing Authority Series A (Ambac Insured)

    5.40       11-1-2020        470,000        486,760  

Sacramento CA City School Joint Refunding Bond Series A (BAM Insured)

    5.00       3-1-2040        2,165,000        2,401,526  

San Jose CA Unified School District CAB (AGM Insured) ¤

    0.00       1-1-2021        1,205,000        1,191,576  

San Jose CA Unified School District CAB (AGM Insured) ¤

    0.00       1-1-2026        3,175,000        2,918,524  

San Marino CA Unified School District Certificate of Participation Los Angeles County Schools Pooled Financing Program Series A

    5.00       12-1-2041        500,000        500,890  

San Ysidro CA School District Certificate of Participation School Facilities Bridge Funding Program (BAM Insured)

    5.00       9-1-2037        250,000        273,415  

San Ysidro CA School District Certificate of Participation School Facilities Bridge Funding Program (Build America Mutual Assurance Company Insured)

    5.00       9-1-2042        625,000        680,000  

San Ysidro CA School District Certificate of Participation School Facilities Bridge Funding Program (BAM Insured)

    5.00       9-1-2047        1,000,000        1,082,920  

Simi Valley CA Unified School District Capital Improvement Projects (Ambac Insured)

    5.25       8-1-2022        1,330,000        1,413,763  

Stockton CA Unified School District Community Improvement Project

    5.00       2-1-2033        550,000        669,125  

Sutter Butte CA Flood Control Agency (BAM Insured)

    5.00       10-1-2040        3,545,000        4,099,403  

Torrance CA Certificate of Participation

    5.25       6-1-2039        5,385,000        6,236,476  

Tracy CA Operating Partnership Joint Powers Authority Capital Improvement Projects (AGC Insured)

    6.25       10-1-2033        1,000,000        1,004,000  

Upland CA Certificate of Participation San Antonio Regional Hospital

    5.00       1-1-2047        1,955,000        2,238,416  

Ventura County CA PFA Series A

    5.00       11-1-2038        4,250,000        4,673,683  
            151,315,910  
         

 

 

 
Tax Revenue: 10.34%      

Beaumont CA Community Facilities District #93-1 Special Tax Improvement Area Number 17C

    5.00       9-1-2043        750,000        863,070  

Beaumont CA Community Facilities District #93-1 Special Tax Improvement Area Number 17C

    5.00       9-1-2048        1,100,000        1,260,391  

Beaumont CA Community Facilities District #93-1 Special Tax Improvement Area Number 8D Series A

    5.00       9-1-2043        750,000        863,070  

Beaumont CA Community Facilities District #93-1 Special Tax Improvement Area Number 8D Series A

    5.00       9-1-2048        1,035,000        1,185,913  

Belmont CA Community Facilities Special Tax District #2000-1 Library Project Series A (Ambac Insured)

    5.75       8-1-2030        3,190,000        4,276,929  

California Statewide CDA Community Facilities District #2015-01

    5.00       9-1-2047        1,420,000        1,648,577  

California Statewide Communities Development Authority Special Tax Community Facilities District #2017-01

    5.00       9-1-2048        5,000,000        5,890,050  

Casitas CA Municipal Water District Community Facilities District #2013-1-OJAI Series B (BAM Insured)

    5.25       9-1-2047        5,000,000        6,068,000  

Cathedral City CA RDA Successor Agency to Merged Redevelopment Project Tax Allocation Bond Series A (AGM Insured)

    5.00       8-1-2032        1,450,000        1,659,018  

Cathedral City CA RDA Successor Agency to Merged Redevelopment Project Tax Allocation Bond Series A (AGM Insured)

    5.00       8-1-2033        880,000        1,004,907  

 

The accompanying notes are an integral part of these financial statements.

 

 

12  |  Wells Fargo California Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
   

Maturity

date

     Principal      Value  
Tax Revenue (continued)      

Chino CA Community Facilitiess District Special Tax #2003-3 Improvement Area #7

    5.00 %       9-1-2048      $ 2,500,000      $ 2,942,475  

Chula Vista CA Community Facilities District Special Tax #16-I Improvement Area #1

    5.00       9-1-2043        500,000        575,650  

Chula Vista CA Community Facilities District Special Tax #16-I Improvement Area #1

    5.00       9-1-2048        1,000,000        1,147,670  

Compton CA Community College RDA Project 2nd Lien Series A

    5.00       8-1-2020        1,140,000        1,161,455  

Corona CA Community Facilities District Special Tax #2018-1 Improvement Area #1 Series A

    5.00       9-1-2048        1,000,000        1,125,120  

Corona Norco CA Unified School Districts Special Tax Community Facilities District #16-1

    5.00       9-1-2048        1,500,000        1,718,715  

Dinuba CA RDA Merged City Redevelopment Project (BAM Insured)

    5.00       9-1-2033        1,500,000        1,733,910  

Elk Grove CA Financing Authority Special Tax Refunding Bond (BAM Insured)

    5.00       9-1-2038        1,500,000        1,744,635  

Folsom Ranch Financing Authority California Facilities District #20 Russell

    5.00       9-1-2048        1,650,000        1,889,514  

Folsom Ranch Financing Authority California Facilities District #19 Manginii

    5.00       9-1-2049        1,000,000        1,160,240  

Fremont CA Community Facilities District #1 Refunding Bond

    5.00       9-1-2040        2,700,000        3,051,405  

Inglewood CA Redevelopment Successor Agency to Merged Redevelopment Project Tax Allocation Refunding Bond Subordinate Lien Series A (BAM Insured)

    5.00       5-1-2034        500,000        602,780  

Inglewood CA Redevelopment Successor Agency to Merged Redevelopment Project Tax Allocation Refunding Bond Subordinate Lien Series A (BAM Insured)

    5.00       5-1-2038        305,000        362,459  

Inland Valley CA Development Agency Series A

    5.25       9-1-2037        4,000,000        4,559,160  

Lafayette CA RDA Refunding Bond Lafayette Redevelopment Project (AGM Insured)

    5.00       8-1-2033        1,500,000        1,722,180  

Lafayette CA RDA Refunding Bond Lafayette Redevelopment Project (AGM Insured)

    5.00       8-1-2038        1,635,000        1,865,421  

Lancaster CA RDA Tax Allocation Refunding Bond Combined Redevelopment Project Areas (AGM Insured)

    5.00       8-1-2033        1,200,000        1,436,460  

Oakland CA Redevelopment Successor Agency Refunding Bond Subordinate Series TE (AGM Insured)

    5.00       9-1-2035        2,545,000        2,973,476  

Oakland CA Redevelopment Successor Agency Refunding Bond Subordinate Series TE (AGM Insured)

    5.00       9-1-2036        4,000,000        4,664,400  

Orange County CA Community Facilities District #2015-1 Esencia Village Series A

    5.25       8-15-2045        1,950,000        2,220,563  

Rancho Cucamonga CA RDA Rancho Redevelopment Project Area (AGM Insured)

    5.00       9-1-2032        1,870,000        2,154,801  

Redwood City CA RDA CAB Redevelopment Project Area Series 2-A (Ambac Insured) ¤

    0.00       7-15-2030        3,505,000        2,725,453  

Rio Vista CA Community Facilities District Special Tax #2018-1

    5.00       9-1-2048        1,190,000        1,363,514  

Riverside County CA Community Facilities Districts Special Tax #05-8

    5.00       9-1-2048        1,600,000        1,833,296  

Romoland School District Community Facilities District #2004-1 Heritage Lake Improvement Area #4 Series 2018 Special Tax Bond

    5.00       9-1-2048        3,000,000        3,439,140  

Sacramento CA Transient Occupancy Tax Convention Center Complex Series A

    5.00       6-1-2048        3,750,000        4,475,438  

San Bernardino CA Special Tax Community Facilities District #2006-1 Series 2018

    5.00       9-1-2048        1,200,000        1,374,972  

San Clemente CA Special Tax Community Facilities District #2006-1

    5.00       9-1-2040        980,000        1,105,793  

San Clemente CA Special Tax Community Facilities District #2006-1

    5.00       9-1-2046        1,190,000        1,336,822  

San Diego CA RDA CAB Tax Allocation Centre (AGM Insured) ¤

    0.00       9-1-2023        885,000        841,538  

San Diego CA RDA Naval Training Center Series A

    5.00       9-1-2025        575,000        590,381  

San Francisco CA City & County RDA Mission Bay South Redevelopment Project Series A

    5.00       8-1-2043        2,500,000        2,817,975  

San Francisco CA City & County RDA Tax Transbay Infrastructure Project Third Lien Series B (AGM Insured)

    5.00       8-1-2046        1,500,000        1,777,755  

San Francisco City & County CA RDA CAB Mission Bay South Redevelopment Project Subordinate Bond Series D 144A¤

    0.00       8-1-2026        4,000,000        3,009,080  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Tax-Free Fund  |  13


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
   

Maturity

date

     Principal      Value  
Tax Revenue (continued)      

San Marcos CA Unified School District Special Tax Community Facilities District #4 (BAM Insured)

    5.00 %       9-1-2034      $ 1,705,000      $ 1,984,688  

San Marcos CA Unified School District Special Tax Community Facilities District #5 (BAM Insured)

    5.00       9-1-2028        1,290,000        1,518,227  

San Marcos CA Unified School District Special Tax Community Facilities District #5 (BAM Insured)

    5.00       9-1-2029        1,325,000        1,556,120  

Santa Ana CA Community Redevelopment Merged Project Area Series A

    6.00       9-1-2022        2,000,000        2,116,320  

Sonoma CA CDA Successor Agency to Sonoma Redevelopment Project Tax Allocation Bond (National Insured)

    5.00       6-1-2033        1,325,000        1,567,965  

Successor Agency to the Marina Redevelopment Agency Tax Allocation Bonds Series A

    5.00       9-1-2033        340,000        393,264  

Successor Agency to the Marina Redevelopment Agency Tax Allocation Bonds Series A

    5.00       9-1-2038        400,000        458,064  

Successor Agency to the Marina Redevelopment Agency Tax Allocation Bonds Series B

    5.00       9-1-2033        250,000        285,435  

Successor Agency to the Marina Redevelopment Agency Tax Allocation Bonds Series B

    5.00       9-1-2038        250,000        282,885  

Tracy Hills CA Improvement Area #1 Community Facilities District #2016-1 Special Tax Bonds Series 2018

    5.00       9-1-2048        2,750,000        3,146,330  

Tustin CA Community Facilities District Special Tax #2014-1 Legacy/Standard Pacific Series A

    5.00       9-1-2040        750,000        846,270  

Tustin CA Community Facilities District Special Tax #2014-1 Legacy/Standard Pacific Series A

    5.00       9-1-2045        1,000,000        1,124,430  

Union City CA Community RDA Successor Agency to Community Redevelopment Project Tax Allocation Refunding Bond Series A

    5.00       10-1-2036        1,000,000        1,183,170  

Union City CA Community RDA Successor Agency to Union City Community Redevelopment Project (AGC Insured)

    5.25       10-1-2033        8,000,000        8,258,080  
            116,944,819  
         

 

 

 
Tobacco Revenue: 0.49%      

Golden State Tabacco Securitization Corporation CA Tobacco Settlement Refunding Bond Series A-1

    5.00       6-1-2028        2,000,000        2,390,580  

Golden State Tabacco Securitization Corporation CA Tobacco Settlement Refunding Bond Series A-2

    5.00       6-1-2047        3,000,000        3,101,610  
            5,492,190  
         

 

 

 
Transportation Revenue: 2.25%      

Bay Area CA Toll Authority Toll Bridge Series S-4

    5.00       4-1-2030        2,000,000        2,262,279  

Bay Area CA Toll Authority Toll Bridge Series S-H

    5.00       4-1-2049        8,000,000        9,899,920  

Foothill-Eastern Corridor CA Transportation Agency Subordinate Bond Series B-3

    5.50       1-15-2053        8,000,000        8,815,120  

San Diego CA RDA Centre City Subordinate Refunding Bond Parking Series B

    5.30       9-1-2020        1,060,000        1,063,774  

San Francisco CA Municipal Transportation

    5.00       3-1-2039        3,000,000        3,417,990  
            25,459,083  
         

 

 

 
Utilities Revenue: 4.05%      

Banning CA Financing Authority Refunding Bond Electric System Project (AGM Insured)

    5.00       6-1-2037        5,000,000        5,805,249  

Imperial CA Irrigation District Electric System Refunding Bond Series A

    5.00       11-1-2040        3,715,000        4,372,406  

Imperial CA Irrigation District Electric System Refunding Bond Series A

    5.00       11-1-2045        1,060,000        1,238,345  

Imperial CA Irrigation District Electric System Refunding Bond Series C

    5.00       11-1-2038        2,500,000        2,966,675  

Los Angeles CA Department of Water & Power Series E

    5.00       7-1-2044        12,475,000        14,310,447  

M-S-R California Energy Authority Gas Series B

    7.00       11-1-2034        4,000,000        6,121,640  

M-S-R California Energy Authority Gas Series C

    6.13       11-1-2029        1,045,000        1,332,824  

 

The accompanying notes are an integral part of these financial statements.

 

 

14  |  Wells Fargo California Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
   

Maturity

date

     Principal      Value  
Utilities Revenue (continued)      

Northern California Power Agency Public Power Prerefunded Bond (Ambac Insured)

    7.50 %       7-1-2023      $ 30,000      $ 32,305  

Redding CA Joint Powers Financing Authority Election System Series A

    5.00       6-1-2032        440,000        522,289  

Roseville CA Natural Gas Financing Authority

    5.00       2-15-2025        1,930,000        2,246,810  

Southern California Public Power Authority Natural Gas Project #1 Series A

    5.25       11-1-2025        1,000,000        1,189,210  

Turlock CA Irrigation District First Priority Subordinated Revenue Refunding Bond

    5.50       1-1-2041        2,000,000        2,089,040  

Walnut CA Energy Center Authority Series A

    5.00       1-1-2034        3,115,000        3,603,027  
            45,830,267  
         

 

 

 
Water & Sewer Revenue: 2.74%      

Adelanto CA Public Utility Authority Refunding Bond (AGM Insured)

    5.00       7-1-2039        2,000,000        2,421,519  

Bay Area CA Water Supply & Conservation Agency Series A

    5.00       10-1-2034        6,000,000        6,685,200  

Compton CA Sewer Revenue

    6.00       9-1-2039        1,775,000        1,777,964  

El Dorado CA Irrigation District Refunding Bond Series A (AGM Insured)

    5.25       3-1-2039        2,000,000        2,297,860  

Florin CA Resource Conservation Refunding Bond Second Senior Lien Series A (National Insured)

    5.00       9-1-2032        2,000,000        2,292,960  

Merced CA Irrigation District Water & Hydroelectric System Series A (AGM Insured)

    5.00       10-1-2038        4,000,000        4,574,360  

Pico Rivera CA Water Authority Series A

    6.25       12-1-2032        3,710,000        3,747,731  

San Buenaventura CA PFFA Series B

    5.00       7-1-2042        4,000,000        4,350,440  

Tulare CA Sewer Refunding Bond (AGM Insured)

    5.00       11-15-2041        1,500,000        1,758,285  

Vallejo CA Refunding Bond

    5.25       5-1-2031        1,000,000        1,120,590  
            31,026,909  
         

 

 

 
            1,027,016,865  
         

 

 

 

Guam: 0.67%

 
Airport Revenue: 0.13%      

Guam Port Authority AMT Series A

    5.00       7-1-2048        1,235,000        1,448,025  
         

 

 

 
Tax Revenue: 0.09%      

Guam Government Business Privilege Tax Series A

    5.00       1-1-2031        1,000,000        1,046,820  
         

 

 

 
Water & Sewer Revenue: 0.45%      

Guam Government Waterworks Authority

    5.25       7-1-2033        1,500,000        1,642,665  

Guam Government Waterworks Authority

    5.50       7-1-2043        3,125,000        3,417,031  
            5,059,696  
         

 

 

 
            7,554,541  
         

 

 

 

Illinois: 1.10%

 
Miscellaneous Revenue: 1.00%      

Illinois Series D

    5.00       11-1-2025        10,000,000        11,293,500  
         

 

 

 
Tax Revenue: 0.10%      

Metropolitan Pier & Exposition Authority McCormick Place Expansion Project Series A

    5.00       6-15-2057        1,000,000        1,113,720  
         

 

 

 
            12,407,220  
         

 

 

 
New York: 2.47%      
Industrial Development Revenue: 0.52%      

New York Transportation Development Corporation Special Facilities Revenue Delta Air Lines Incorporated LaGuardia Airport Terminals C&D Redevelopment

    5.00       1-1-2026        5,000,000        5,894,900  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Tax-Free Fund  |  15


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
   

Maturity

date

     Principal      Value  
Tax Revenue: 0.17%      

New York NY Transitional Finance Authority Subordinate Bond Series 2B (Dexia Credit Local SPA) ø

    1.70 %       11-1-2022      $ 1,955,000      $ 1,955,000  
         

 

 

 
Water & Sewer Revenue: 1.78%      

New York NY Municipal Water Finance Adjusted Fiscal Subordinated Bond Series B2 (State Street Bank & Trust Company SPA) ø

    1.66       6-15-2045        5,000,000        5,000,000  

New York NY Municipal Water Finance Authority Water & Sewer System 2nd General Resolution Bonds Fiscal 2014 Subordinate Bond Series AA-6 (Mizuho Bank Limited SPA) ø

    1.67       6-15-2048        5,500,000        5,500,000  

New York NY Municipal Water Finance Authority Water & Sewer System Fiscal 2012 Series B (State Street Bank & Trust Company SPA) ø

    1.66       6-15-2045        9,600,000        9,600,000  
            20,100,000  
         

 

 

 
            27,949,900  
         

 

 

 

Tennessee: 0.26%

 
Miscellaneous Revenue: 0.26%      

Blount County TN Public Building Authority Various Local Govenment Public Improvements Series D3A (Bank of America NA SPA) ø

    1.61       6-1-2034        3,000,000        3,000,000  
         

 

 

 

Texas: 2.65%

 
Health Revenue: 0.29%      

Tarrant County TX Cultural Educational Facilities Finance Corporation Baylor Health Care System Project Series C (TD Bank NA LOC) ø

    1.70       11-15-2050        3,290,000        3,290,000  
         

 

 

 
Resource Recovery Revenue: 2.36%      

Port Arthur TX Navigation District Jefferson County Environmental Facilities Motiva Enterprises LLC Project Series A ø

    1.70       4-1-2040        13,905,000        13,905,000  

Port Arthur TX Navigation District Jefferson County Environmental Facilities Motiva Enterprises LLC Project Series B ø

    1.70       4-1-2040        12,235,000        12,235,000  

Port Arthur TX Navigation District Jefferson County Environmental Facilities Motiva Enterprises LLC Project Series C ø

    1.70       4-1-2040        500,000        500,000  
            26,640,000  
         

 

 

 
            29,930,000  
         

 

 

 

Utah: 0.26%

 
Health Revenue: 0.26%      

Weber County UT Hospital IHC Health Services Series 2000-C (Bank of New York Mellon SPA) ø

    1.68       2-15-2035        3,000,000        3,000,000  
         

 

 

 

Total Municipal Obligations (Cost $1,019,954,236)

       1,110,858,526  
    

 

 

 

Closed End Municipal Bond Fund Obligations: 0.44%

         
California: 0.44%                          

Nuveen California AMT-Free Quality Municipal Income Fund Variable Rate Demand Preferred Shares Series A 1.88% 144A

         5,000,000        5,000,000  
         

 

 

 

Total Closed End Municipal Bond Fund Obligations (Cost $5,000,000)

            5,000,000  
         

 

 

 
         

 

The accompanying notes are an integral part of these financial statements.

 

 

16  |  Wells Fargo California Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Yield                               Shares      Value  
Short-Term Investments: 0.30%          
Investment Companies: 0.30%                          

Wells Fargo Municipal Cash Management Money Market Fund Institutional Class (I)(u)

    1.45        3,342,909      $ 3,344,246  
         

 

 

 

Total Short-Term Investments (Cost $3,344,246)

            3,344,246  
         

 

 

 

 

Total investments in securities (Cost $1,028,298,482)     98.96        1,119,202,772  

Other assets and liabilities, net

    1.04          11,747,621  
 

 

 

      

 

 

 
Total net assets     100.00      $ 1,130,950,393  
 

 

 

      

 

 

 

 

 

144A

The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933.

¤

The security is issued in zero coupon form with no periodic interest payments.

±

Variable rate investment. The rate shown is the rate in effect at period end.

ø

Variable rate demand notes are subject to a demand feature which reduces the effective maturity. The maturity date shown represents the final maturity date of the security. The interest rate is determined and reset by the issuer daily, weekly, or monthly depending upon the terms of the security. The rate shown is the rate in effect at period end.

(l)

The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940.

(u)

The rate represents the 7-day annualized yield at period end.

Abbreviations:

 

AGC

Assured Guaranty Corporation

 

AGM

Assured Guaranty Municipal

 

Ambac

Ambac Financial Group Incorporated

 

AMT

Alternative minimum tax

 

BAM

Build America Mutual Assurance Company

 

CAB

Capital appreciation bond

 

CDA

Community Development Authority

 

FGIC

Financial Guaranty Insurance Corporation

 

GNMA

Government National Mortgage Association

 

GO

General obligation

 

HFFA

Health Facilities Financing Authority

 

LIBOR

London Interbank Offered Rate

 

National

National Public Finance Guarantee Corporation

 

PCFA

Pollution Control Financing Authority

 

PFA

Public Finance Authority

 

PFFA

Public Facilities Financing Authority

 

RDA

Redevelopment Authority

 

SPA

Standby purchase agreement

Investments in Affiliates

An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were either affiliated persons of the Fund at the beginning of the period or the end of the period were as follows:

 

    Shares,
beginning of
period
    Shares
purchased
    Shares
sold
    Shares,
end of
period
    Net
realized
gains
(losses)
    Net
change in
unrealized
gains
(losses)
    Income
from
affiliated
securities
    Value,
end of
period
    % of
net
assets
 
Short-Term Investments                                                      

Investment Companies

                 

Wells Fargo Municipal Cash Management Money Market Fund Institutional Class

    207,750       117,934,064       (114,798,905     3,342,909     $ (1,899   $ 0     $ 34,254     $ 3,344,246       0.30

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Tax-Free Fund  |  17


Statement of assets and liabilities—December 31, 2019 (unaudited)

 

         

Assets

 

Investments in unaffiliated securities, at value (cost $1,024,954,236)

  $ 1,115,858,526  

Investments in affiliated securities, at value (cost $3,344,246)

    3,344,246  

Cash

    143,250  

Receivable for Fund shares sold

    907,109  

Receivable for interest

    12,604,523  

Prepaid expenses and other assets

    18,416  
 

 

 

 

Total assets

    1,132,876,070  
 

 

 

 

Liabilities

 

Payable for Fund shares redeemed

    612,717  

Dividends payable

    593,265  

Management fee payable

    295,271  

Shareholder servicing fees payable

    174,487  

Administration fees payable

    119,547  

Distribution fee payable

    19,638  

Trustees’ fees and expenses payable

    4,211  

Accrued expenses and other liabilities

    106,541  
 

 

 

 

Total liabilities

    1,925,677  
 

 

 

 

Total net assets

  $ 1,130,950,393  
 

 

 

 

Net assets consist of

 

Paid-in capital

  $ 1,063,471,390  

Total distributable earnings

    67,479,003  
 

 

 

 

Total net assets

  $ 1,130,950,393  
 

 

 

 

Computation of net asset value and offering price per share

 

Net assets – Class A

  $ 509,379,854  

Shares outstanding – Class A1

    42,506,744  

Net asset value per share – Class A

    $11.98  

Maximum offering price per share – Class A2

    $12.54  

Net assets – Class C

  $ 29,579,799  

Shares outstanding – Class C1

    2,420,487  

Net asset value per share – Class C

    $12.22  

Net assets – Administrator Class

  $ 272,624,818  

Shares outstanding – Administrator Class1

    22,706,484  

Net asset value per share – Administrator Class

    $12.01  

Net assets – Institutional Class

  $ 319,365,922  

Shares outstanding – Institutional Class1

    26,598,495  

Net asset value per share – Institutional Class

    $12.01  

 

 

1 

The Fund has an unlimited number of authorized shares.

 

2 

Maximum offering price is computed as 100/95.50 of net asset value. On investments of $50,000 or more, the offering price is reduced.

 

The accompanying notes are an integral part of these financial statements.

 

 

18  |  Wells Fargo California Tax-Free Fund


Statement of operations—six months ended December 31, 2019 (unaudited)

 

         

Investment income

 

Interest

  $ 20,207,182  

Income from affiliated securities

    34,254  
 

 

 

 

Total investment income

    20,241,436  
 

 

 

 

Expenses

 

Management fee

    2,109,698  

Administration fees

 

Class A

    398,404  

Class C

    25,741  

Administrator Class

    126,758  

Institutional Class

    125,412  

Shareholder servicing fees

 

Class A

    622,507  

Class C

    40,220  

Administrator Class

    316,895  

Distribution fee

 

Class C

    120,659  

Custody and accounting fees

    10,245  

Professional fees

    30,214  

Registration fees

    44,912  

Shareholder report expenses

    9,365  

Trustees’ fees and expenses

    10,804  

Other fees and expenses

    4,170  
 

 

 

 

Total expenses

    3,996,004  

Less: Fee waivers and/or expense reimbursements

 

Fund-level

    (44,689

Class A

    (136,759

Class C

    (8,793

Administrator Class

    (247,663
 

 

 

 

Net expenses

    3,558,100  
 

 

 

 

Net investment income

    16,683,336  
 

 

 

 

Realized and unrealized gains (losses) on investments

 

Net realized losses on

 

Unaffiliated securities

    (64,672

Affiliated securities

    (1,899
 

 

 

 

Net realized losses on investments

    (66,571

Net change in unrealized gains (losses) on investments

    5,805,744  
 

 

 

 

Net realized and unrealized gains (losses) on investments

    5,739,173  
 

 

 

 

Net increase in net assets resulting from operations

  $ 22,422,509  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Tax-Free Fund  |  19


Statement of changes in net assets

 

     Six months ended
December 31, 2019
(unaudited)
    Year ended
June 30, 2019
 

Operations

       

Net investment income

    $ 16,683,336       $ 32,612,816  

Net realized losses on investments

      (66,571       (1,718,061

Net change in unrealized gains (losses) on investments

      5,805,744         24,999,907  
 

 

 

 

Net increase in net assets resulting from operations

      22,422,509         55,894,662  
 

 

 

 

Distributions to shareholders from net investment income and net realized gains

       

Class A

      (7,270,869       (14,669,880

Class C

      (349,243       (988,682

Administrator Class

      (3,956,978       (7,503,063

Institutional Class

      (5,005,463       (9,759,221
 

 

 

 

Total distributions to shareholders

      (16,582,553       (32,920,846
 

 

 

 

Capital share transactions

    Shares         Shares    

Proceeds from shares sold

       

Class A

    5,584,359       67,066,713       8,095,324       94,284,323  

Class C

    180,388       2,208,472       277,749       3,305,964  

Administrator Class

    3,847,190       46,231,647       5,658,401       65,422,085  

Institutional Class

    5,180,035       62,336,852       8,350,924       97,289,819  
 

 

 

 
      177,843,684         260,302,191  
 

 

 

 

Reinvestment of distributions

       

Class A

    570,737       6,855,937       1,185,493       13,804,957  

Class C

    26,346       322,795       78,205       927,056  

Administrator Class

    320,711       3,859,948       629,219       7,340,761  

Institutional Class

    174,741       2,103,051       330,436       3,856,316  
 

 

 

 
      13,141,731         25,929,090  
 

 

 

 

Payment for shares redeemed

       

Class A

    (4,136,507     (49,622,236     (6,860,157     (79,217,878

Class C

    (482,192     (5,919,786     (1,688,840     (19,964,764

Administrator Class

    (833,781     (10,033,638     (2,915,007     (33,837,058

Institutional Class

    (3,315,051     (39,883,819     (8,779,437     (101,838,732
 

 

 

 
      (105,459,479       (234,858,432
 

 

 

 

Net increase in net assets resulting from capital share transactions

      85,525,936         51,372,849  
 

 

 

 

Total increase in net assets

      91,365,892         74,346,665  
 

 

 

 

Net assets

       

Beginning of period

      1,039,584,501         965,237,836  
 

 

 

 

End of period

    $ 1,130,950,393       $ 1,039,584,501  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

20  |  Wells Fargo California Tax-Free Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS A   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $11.91       $11.64       $11.83       $12.45       $11.79       $11.73  

Net investment income

    0.18       0.37       0.37       0.36       0.36       0.38  

Net realized and unrealized gains (losses) on investments

    0.07       0.28       (0.19     (0.62     0.66       0.06  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.25       0.65       0.18       (0.26     1.02       0.44  

Distributions to shareholders from

           

Net investment income

    (0.18     (0.38     (0.37     (0.36     (0.36     (0.38

Net asset value, end of period

    $11.98       $11.91       $11.64       $11.83       $12.45       $11.79  

Total return1

    2.07     5.70     1.55     (2.09 )%      8.77     3.74

Ratios to average net assets (annualized)

           

Gross expenses

    0.81     0.83     0.83     0.82     0.82     0.83

Net expenses

    0.75     0.75     0.75     0.75     0.75     0.75

Net investment income

    2.94     3.22     3.15     2.99     2.96     3.17

Supplemental data

           

Portfolio turnover rate

    9     9     33     48     17     30

Net assets, end of period (000s omitted)

    $509,380       $482,395       $443,165       $472,584       $528,238       $470,368  

 

 

 

 

1 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Tax-Free Fund  |  21


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS C   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $12.15       $11.87       $12.07       $12.70       $12.02       $11.96  

Net investment income

    0.14       0.29       0.29       0.27       0.27       0.29  

Net realized and unrealized gains (losses) on investments

    0.06       0.29       (0.20     (0.63     0.68       0.06  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.20       0.58       0.09       (0.36     0.95       0.35  

Distributions to shareholders from

           

Net investment income

    (0.13     (0.30     (0.29     (0.27     (0.27     (0.29

Net asset value, end of period

    $12.22       $12.15       $11.87       $12.07       $12.70       $12.02  

Total return1

    1.68     4.95     0.74     (2.80 )%      8.02     2.96

Ratios to average net assets (annualized)

           

Gross expenses

    1.56     1.58     1.58     1.57     1.57     1.58

Net expenses

    1.50     1.50     1.50     1.50     1.50     1.50

Net investment income

    2.19     2.47     2.40     2.24     2.21     2.42

Supplemental data

           

Portfolio turnover rate

    9     9     33     48     17     30

Net assets, end of period (000s omitted)

    $29,580       $32,758       $47,831       $57,727       $66,427       $50,787  

 

 

 

 

1 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

22  |  Wells Fargo California Tax-Free Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
ADMINISTRATOR CLASS   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $11.94       $11.66       $11.86       $12.48       $11.81       $11.75  

Net investment income

    0.19       0.40       0.39       0.38       0.38       0.40  

Net realized and unrealized gains (losses) on investments

    0.07       0.28       (0.20     (0.62     0.67       0.06  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.26       0.68       0.19       (0.24     1.05       0.46  

Distributions to shareholders from

           

Net investment income

    (0.19     (0.40     (0.39     (0.38     (0.38     (0.40

Net asset value, end of period

    $12.01       $11.94       $11.66       $11.86       $12.48       $11.81  

Total return1

    2.18     5.99     1.67     (1.88 )%      9.06     3.95

Ratios to average net assets (annualized)

           

Gross expenses

    0.75     0.77     0.77     0.76     0.76     0.77

Net expenses

    0.55     0.55     0.55     0.55     0.55     0.55

Net investment income

    3.14     3.43     3.34     3.16     3.16     3.39

Supplemental data

           

Portfolio turnover rate

    9     9     33     48     17     30

Net assets, end of period (000s omitted)

    $272,625       $231,252       $186,626       $210,209       $344,090       $210,265  

 

 

 

 

1 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Tax-Free Fund  |  23


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
INSTITUTIONAL CLASS   2019     2018     2017     2016     20151  

Net asset value, beginning of period

    $11.94       $11.66       $11.86       $12.48       $11.81       $11.99  

Net investment income

    0.20       0.41       0.40       0.39       0.39       0.27  

Net realized and unrealized gains (losses) on investments

    0.06       0.28       (0.20     (0.62     0.67       (0.18
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.26       0.69       0.20       (0.23     1.06       0.09  

Distributions to shareholders from

           

Net investment income

    (0.19     (0.41     (0.40     (0.39     (0.39     (0.27

Net asset value, end of period

    $12.01       $11.94       $11.66       $11.86       $12.48       $11.81  

Total return2

    2.21     6.07     1.74     (1.81 )%      9.14     0.72

Ratios to average net assets (annualized)

           

Gross expenses

    0.48     0.50     0.50     0.49     0.49     0.50

Net expenses

    0.48     0.48     0.48     0.48     0.48     0.48

Net investment income

    3.21     3.49     3.42     3.28     3.24     3.35

Supplemental data

           

Portfolio turnover rate

    9     9     33     48     17     30

Net assets, end of period (000s omitted)

    $319,366       $293,180       $287,616       $309,253       $193,154       $149,368  

 

 

 

 

1 

For the period from October 31, 2014 (commencement of class operations) to June 30, 2015

 

2 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

24  |  Wells Fargo California Tax-Free Fund


Notes to financial statements (unaudited)

 

1. ORGANIZATION

Wells Fargo Funds Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Wells Fargo California Tax-Free Fund (the “Fund”) which is a non-diversified series of the Trust.

2. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Securities valuation

All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.

Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

Investments in registered open-end investment companies 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 in good faith by the Board of Trustees of the Fund. The Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities, unless the determination has been delegated to the Wells Fargo Asset Management Pricing Committee at Wells Fargo Funds Management, LLC (“Funds Management”). The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Valuation Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees receives reports on any valuation actions taken by the Valuation Committee or the Wells Fargo Asset Management Pricing Committee which may include items for ratification.

When-issued transactions

The Fund may purchase securities on a forward commitment or when-issued basis. The Fund records a when-issued transaction on the trade date and will segregate assets in an amount at least equal in value to the Fund’s commitment to purchase when-issued securities. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

Security transactions and income recognition

Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. 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 been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Distributions to shareholders

Distributions to shareholders from net investment income are declared daily and paid monthly. Distributions from net realized gains, if any, are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.

 

 

Wells Fargo California Tax-Free Fund  |  25


Notes to financial statements (unaudited)

 

Federal and other taxes

The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable and tax-exempt income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.

The 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. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

As of December 31, 2019, the aggregate cost of all investments for federal income tax purposes was $1,028,298,482 and the unrealized gains (losses) consisted of:

 

Gross unrealized gains

   $ 91,154,411  

Gross unrealized losses

     (250,121

Net unrealized gains

   $ 90,904,290  

As of June 30, 2019, the Fund had capital loss carryforwards which consisted of $22,802,291 in short-term capital losses and $280,843 in long-term capital losses.

Class allocations

The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.

3. FAIR VALUATION MEASUREMENTS

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:

 

 

Level 1 – quoted prices in active markets for identical securities

 

 

Level 2 – other significant observable inputs (including quoted prices for similar securities, 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 investments in securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of December 31, 2019:

 

      Quoted prices
(Level 1)
     Other significant
observable inputs
(Level 2)
    

Significant
unobservable inputs

(Level 3)

     Total  

Assets

           

Investments in:

           

Municipal obligations

   $ 0      $ 1,110,858,526      $ 0      $ 1,110,858,526  

Closed end municipal bond fund obligations

     0        5,000,000        0        5,000,000  

Short-term investments

           

Investment companies

     3,344,246        0        0        3,344,246  

Total assets

   $ 3,344,246      $ 1,115,858,526      $ 0      $ 1,119,202,772  

Additional sector, industry or geographic detail is included in the Portfolio of Investments.

 

 

26  |  Wells Fargo California Tax-Free Fund


Notes to financial statements (unaudited)

 

For the six months ended December 31, 2019, the Fund did not have any transfers into/out of Level 3.

4. TRANSACTIONS WITH AFFILIATES

Management fee

Funds Management an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”), is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:

 

Average daily net assets    Management fee  

First $500 million

     0.400

Next $500 million

     0.375  

Next $2 billion

     0.350  

Next $2 billion

     0.325  

Next $5 billion

     0.290  

Over $10 billion

     0.280  

For the six months ended December 31, 2019, the management fee was equivalent to an annual rate of 0.38% of the Fund’s average daily net assets.

Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Funds Management. Wells Capital Management Incorporated, an affiliate of Funds Management and an indirect wholly owned subsidiary of Wells Fargo, is the subadviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.20% and declining to 0.10% as the average daily net assets of the Fund increase.

Administration fees

Under a class-level administration agreement, Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:

 

      Class-level
administration fee

Class A, Class C

   0.16%

Administrator Class

   0.10

Institutional Class

   0.08

Waivers and/or expense reimbursements

Funds Management has contractually waived and/or reimbursed management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Funds Management has waived fees and/or reimbursed expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Funds Management has committed through October 31, 2020 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s expenses at 0.75% for Class A shares, 1.50% for Class C shares, 0.55% for Administrator Class shares, and 0.48% for Institutional Class shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. 

Distribution fee

The Trust has adopted a distribution plan for Class C shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Wells Fargo Funds Distributor, LLC (“Funds Distributor”), the principal underwriter, at an annual rate of 0.75% of the average daily net assets of Class C shares.

 

 

Wells Fargo California Tax-Free Fund  |  27


Notes to financial statements (unaudited)

 

In addition, Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the six months ended December 31, 2019, Funds Distributor received $5,987 from the sale of Class A shares. No contingent deferred sales charges were incurred by Class A and Class C shares for the six months ended December 31, 2019.

Shareholder servicing fees

The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A, Class C, and Administrator Class of the Fund are charged a fee at an annual rate of 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of Wells Fargo.

Interfund transactions

The Fund may purchase or sell portfolio investment securities to certain other Wells Fargo affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund had $37,950,000 and $18,710,000 in interfund purchases and sales, respectively, during the six months ended December 31, 2019.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended December 31, 2019 were $136,228,842 and $93,435,990, respectively.

6. BANK BORROWINGS

The Trust (excluding the money market funds), Wells Fargo Master Trust and Wells Fargo Variable Trust are parties to a $280,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the 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, an annual commitment fee equal to 0.25% of the unused balance is allocated to each participating fund.

For the six months ended December 31, 2019, there were no borrowings by the Fund under the agreement.

7. CONCENTRATION RISK

The Fund invests a substantial portion of its assets in issuers of municipal debt securities located in a single state or territories of the U.S. Therefore, it may be more affected by economic and political developments in that state or region than would be a comparable general tax-exempt fund.

8. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and Trustees have been granted certain indemnification rights 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 Fund and, therefore, cannot be estimated.

9. NEW ACCOUNTING PRONOUNCEMENTS

In August 2018, FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 updates the disclosure requirements for fair value measurements by modifying or removing certain disclosures and adding certain new disclosures. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Management has adopted the removal and modification of disclosures early, as permitted, and will adopt the additional new disclosures at the effective date.

In March 2017, FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium and requires the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount and discounts will continue to be accreted to the maturity date of the security. ASU 2017-08 is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years. During the current reporting period, management of the Fund adopted the change in accounting policy which did not have a material impact to the Fund’s financial statements.

 

 

28  |  Wells Fargo California Tax-Free Fund


Other information (unaudited)

 

PROXY VOTING INFORMATION

A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available, upon request, by calling 1-800-222-8222, visiting our website at wfam.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at wfam.com or by visiting the SEC website at sec.gov.

QUARTERLY PORTFOLIO HOLDINGS INFORMATION

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed form N-PORT by visiting the SEC website at sec.gov.

 

 

Wells Fargo California Tax-Free Fund  |  29


Other information (unaudited)

 

BOARD OF TRUSTEES AND OFFICERS    

Each of the Trustees and Officers1 listed in the table below acts in identical capacities for each fund in the Wells Fargo family of funds, which consists of 149 mutual funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information2. 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    

 

Name and

year of birth

  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships

William R. Ebsworth

(Born 1957)

  Trustee, since 2015   Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Endowment (non-profit organization). Mr. Ebsworth is a CFA® charterholder.   N/A

Jane A. Freeman

(Born 1953)

  Trustee, since 2015; Chair Liaison, since 2018   Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is a Board Member of The Ruth Bancroft Garden (non-profit organization). She is also an inactive Chartered Financial Analyst.   N/A

Isaiah Harris, Jr.

(Born 1952)

  Trustee, since 2009; Audit Committee Chairman, since 2019   Retired. Chairman of the Board of CIGNA Corporation since 2009, and Director since 2005. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Child Evangelism Fellowship (non-profit). Mr. Harris is a certified public accountant (inactive status).   CIGNA Corporation

Judith M. Johnson

(Born 1949)

  Trustee, since 2008; Audit Committee Chairman, from 2009 to 2018   Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.   N/A

 

 

30  |  Wells Fargo California Tax-Free Fund


Other information (unaudited)

 

Name and

year of birth

  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships

David F. Larcker

(Born 1950)

  Trustee, since 2009   James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.   N/A

Olivia S. Mitchell

(Born 1953)

  Trustee, since 2006; Nominating and Governance Committee Chair, since 2018   International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993.   N/A

Timothy J. Penny

(Born 1951)

  Trustee, since 1996; Chairman, since 2018   President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.   N/A

James G. Polisson

(Born 1959)

  Trustee, since 2018   Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations.   N/A

Pamela Wheelock3

(Born 1959)

  Trustee, since January 2020; previously Trustee from January 2018 to July 2019   Board member of the Destination Medical Center Economic Development Agency, Rochester, Minnesota since 2019. Acting Commissioner, Minnesota Department of Human Services, July 2019 through September 2019. Human Services Manager (part-time), Minnesota Department of Human Services, October 2019 through December 2019. Chief Operating Officer, Twin Cities Habitat for Humanity from 2017 to 2019. Vice President of University Services, University of Minnesota from 2012 to 2016. Prior thereto, on the Board of Directors, Governance Committee and Finance Committee for the Minnesota Philanthropy Partners (Saint Paul Foundation) from 2012 to 2018, Interim Chief Executive Officer of Blue Cross Blue Shield of Minnesota from 2011 to 2012, Chairman of the Board from 2009 to 2012 and Board Director from 2003 to 2015. Vice President, Leadership and Community Engagement, Bush Foundation, Saint Paul, Minnesota (a private foundation) from 2009 to 2011. Executive Vice President and Chief Financial Officer, Minnesota Sports and Entertainment from 2004 to 2009 and Senior Vice President from 2002 to 2004. Executive Vice President of the Minnesota Wild Foundation from 2004 to 2008. Commissioner of Finance, State of Minnesota, from 1999 to 2002. Currently Board Chair of the Minnesota Wild Foundation since 2010.   N/A

 

*

Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.    

 

 

Wells Fargo California Tax-Free Fund  |  31


Other information (unaudited)

 

Officers    

 

Name and

year of birth

  Position held and
length of service
  Principal occupations during past five years or longer

Andrew Owen

(Born 1960)

  President, since 2017   Executive Vice President of Wells Fargo & Company and Head of Affiliated Managers, Wells Fargo Asset Management, since 2014. In addition, Mr. Owen is currently President, Chief Executive Officer and Director of Wells Fargo Funds Management, LLC since 2017. Prior thereto, Executive Vice President responsible for marketing, investments and product development for Wells Fargo Funds Management, LLC, from 2009 to 2014.

Nancy Wiser1

(Born 1967)

  Treasurer, since 2012   Executive Vice President of Wells Fargo Funds Management, LLC since 2011. Chief Operating Officer and Chief Compliance Officer at LightBox Capital Management LLC, from 2008 to 2011.

Michelle Rhee4

(Born 1966)

  Chief Legal Officer, since 2019   Secretary of Wells Fargo Funds Management, LLC, Chief Legal Counsel of Wells Fargo Asset Management and Assistant General Counsel of Wells Fargo Bank, N.A. since 2018. Associate General Counsel and Managing Director of Bank of America Corporation from 2004 to 2018.

Catherine Kennedy5

(Born 1969)

  Secretary, since 2019   Vice President of Wells Fargo Funds Management, LLC and Senior Counsel of the Wells Fargo Legal Department since 2010. Vice President and Senior Counsel of Evergreen Investment Management Company, LLC from 1998 to 2010.

Michael H. Whitaker

(Born 1967)

  Chief Compliance Officer, since 2016   Chief Compliance Officer of Wells Fargo Asset Management since 2016. Senior Vice President and Chief Compliance Officer for Fidelity Investments from 2007 to 2016.

David Berardi

(Born 1975)

  Assistant Treasurer, since 2009   Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.

Jeremy DePalma1

(Born 1974)

  Assistant Treasurer, since 2009   Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.

 

 

1

Nancy Wiser acts as Treasurer of 64 funds in the Fund Complex. Jeremy DePalma acts as Treasurer of 85 funds and Assistant Treasurer of 64 funds in the Fund Complex.

 

2

The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at wfam.com.    

 

3 

Pamela Wheelock was re-appointed to the Board effective January 1, 2020.

 

4 

Michelle Rhee became Chief Legal Officer effective October 22, 2019.

 

5 

Catherine Kennedy became Secretary effective October 22, 2019.

 

 

32  |  Wells Fargo California Tax-Free Fund


Appendix (unaudited)

 

Effective on or about May 1, 2020, if you purchase Fund shares through a Janney Montgomery Scott LLC (“Janney”) brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge (“CDSC”), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in the Fund’s Prospectus or SAI.

 

Front-end sales charge* waivers on Class A shares available at Janney
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).
Shares purchased by employees and registered representatives of Janney or its affiliates and their family members as designated by Janney.
Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within ninety (90) days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., right of reinstatement).
Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
Shares acquired through a right of reinstatement.
Class C shares that are no longer subject to a contingent deferred sales charge and are converted to Class A shares of the same fund pursuant to Janney’s policies and procedures.
CDSC waivers on Class A and Class C shares available at Janney
Shares sold upon the death or disability of the shareholder.
Shares sold as part of a systematic withdrawal plan as described in the Fund’s Prospectus.
Shares purchased in connection with a return of excess contributions from an IRA account.
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRS regulations.
Shares sold to pay Janney fees but only if the transaction is initiated by Janney.
Shares acquired through a right of reinstatement.
Shares exchanged into the same share class of a different fund.
Front-end sales charge* discounts available at Janney; breakpoints, rights of accumulation and/or letters of intent
Breakpoints as described in the Fund’s Prospectus.
Rights of accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Janney. Eligible fund family assets not held at Janney may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.
Letters of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Janney Montgomery Scott may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.

 

*

Also referred to as an “initial sales charge.”

 

 

Wells Fargo California Tax-Free Fund   |  33


 

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LOGO

For more information

More information about Wells Fargo Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:

Wells Fargo Funds

P.O. Box 219967

Kansas City, MO 64121-9967

Website: wfam.com

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

 

LOGO

 

This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-222-8222 or visit the Fund’s website at wfam.com. Read the prospectus carefully before you invest or send money.

Wells Fargo Asset Management (WFAM) is the trade name for certain investment advisory/management firms owned by Wells Fargo & Company. These firms include but are not limited to Wells Capital Management Incorporated and Wells Fargo Funds Management, LLC. Certain products managed by WFAM entities are distributed by Wells Fargo Funds Distributor, LLC (a broker-dealer and Member FINRA).

This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind—including a recommendation for any specific investment, strategy, or plan.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE     MAY LOSE VALUE


© 2020 Wells Fargo & Company. All rights reserved.

PAR-0120-02388 02-20

SA249/SAR249 12-19

 

 



LOGO

Semi-Annual Report

December 31, 2019

 

Wells Fargo

California Limited-Term Tax-Free Fund

 

 

 

 

Beginning on January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, paper copies of the Wells Fargo Funds’ annual and semi-annual shareholder reports issued after this date will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-222-8222 or by enrolling at wellsfargo.com/advantagedelivery.

You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call 1-800-222-8222. Your election to receive reports in paper will apply to all Wells Fargo Funds held in your account with your financial intermediary or, if you are a direct investor, to all Wells Fargo Funds that you hold.


 

 

Reduce clutter.

Save trees.

Sign up for electronic delivery of prospectuses and shareholder reports at wellsfargo.com/advantagedelivery

 

The views expressed and any forward-looking statements are as of December 31, 2019, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Asset Management. Discussions of individual securities, or the markets generally, or any Wells Fargo Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Asset Management and the Fund disclaim any obligation to publicly update or revise any views expressed or forward-looking statements.

 

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE    MAY LOSE VALUE


 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  1


Letter to shareholders (unaudited)

 

LOGO

Andrew Owen

President

Wells Fargo Funds

“After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July.”

Dear Shareholder:

We are pleased to offer you this semi-annual report for the Wells Fargo California Limited-Term Tax-Free Fund for the six-month period that ended December 31, 2019. Despite periods of market volatility, the year was strongly positive for financial markets as supportive central banks more than offset concerns over slowing global economic growth and international trade tensions.

Overall, both fixed-income and equity investors enjoyed healthy returns. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 10.92% and international stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned 6.96%. The MSCI EM Index (Net)3 gained 7.09%. For bond investors, the Bloomberg Barclays U.S. Aggregate Bond Index4 added 2.45%, the Bloomberg Barclays Global Aggregate ex-USD Index5 returned 0.09%, the Bloomberg Barclays Municipal Bond Index6 gained 2.32%, and the ICE BofA U.S. High Yield Index7 added 3.86%.

Sentiment turned positive, driven by central bank support.

After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July. The gains, primarily driven by geopolitical and monetary policy events, pushed equity markets to new highs. European Central Bank President Mario Draghi indicated the bank was ready to cut rates or buy more assets to prop up inflation if needed. President Trump backed off of tariff threats against Mexico and China. The U.S. Federal Reserve (Fed) implemented a 0.25% federal funds rate cut in July.

Throughout the summer, U.S.-China trade tensions simmered. Major U.S. stock market indices closed July with the worst weekly results of the year. Bond prices gained as Treasury yields fell to multiyear lows, and the yield curve inverted at multiple points along the 30-year arc.

Evidence of a continued global economic slowdown mounted, and central banks in China, New Zealand, and Thailand cut interest rates. Industrial and manufacturing data declined in China, Canada, Japan, and Germany. Adding to global uncertainty, Italy’s prime minister resigned, many feared a crackdown in Hong Kong as protestors sustained their calls for reform, and Boris Johnson planned to suspend Parliament as Brexit’s deadline neared.

In the U.S., the Fed cut interest rates a second time in September. U.S. manufacturing data disappointed investors. The U.S. Congress announced it would pursue an impeachment investigation of President Trump. Meanwhile, the Brexit impasse showed no signs of resolution. Officials in China warned of the negative economic impact of tariffs and trade restrictions. Although the S&P 500 Index finished the third quarter with the best year-to-date returns in more than 20 years, concerns about future returns remained.

 

 

 

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 Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the United States. 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. You cannot invest directly in an index.

 

3 

The MSCI Emerging Markets (EM) Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index.

 

4

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index.

 

5

The Bloomberg Barclays Global Aggregate ex-USD Index is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S. dollar-denominated debt market. You cannot invest directly in an index.

 

6 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

7

The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2020. ICE Data Indices, LLC. All rights reserved.

 

 

2  |  Wells Fargo California Limited-Term Tax-Free Fund


Letter to shareholders (unaudited)

 

The fourth quarter started on a strong note, with a relaxing of U.S.-China trade tensions in October along with renewed optimism for a U.K. Brexit deal and positive macroeconomic data. The initial estimate of U.S. third-quarter gross domestic product growth was a 1.9% annualized rate, while the U.S. unemployment rate fell to a 50-year low of 3.5% in September. However, despite resilience among U.S. consumers, business confidence declined while manufacturing activity contracted. Concerned with a potential economic slowdown, the Fed lowered interest rates another quarter point in late October, its third rate cut in four months. This helped push the S&P 500 Index to a new all-time high, while emerging market equities rallied and global bonds declined overall, reflecting a broad pickup in risk appetite.

Equity markets continued to rally in November despite ongoing geopolitical risks. Hopes for a U.S.-China trade deal buoyed investor confidence. U.S. business sentiment improved slightly, and manufacturing and services activity picked up. Throughout the month, central bank actions were on hold. With that positive backdrop, developed market equities outpaced those in emerging markets, and U.S. stocks outperformed non-U.S. stocks overall. While consumer confidence and purchasing manager activity rose in the eurozone, China reported weakening manufacturing and consumer data. Bond yields rose marginally, leading to slightly negative returns for global government and investment-grade corporate bonds.

Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal, with some details to be worked out. That, along with the landslide election win by the pro-Brexit U.K. Conservative Party and ongoing central bank support, gave investors a greater sense of certainty. U.S. economic indicators were broadly positive, with the exception of manufacturing activity and business confidence. Consumer confidence was resilient, fed by a robust labor market, tame inflation, and lower interest rates, which boosted housing affordability and homebuyer activity. The impeachment of U.S. President Donald Trump, while historically noteworthy, had little impact on markets. Meanwhile, slowing Chinese economic activity, due in part to the trade war, led to further government stimulus at year-end through lower reserve ratios, allowing banks to lend more money.

Don’t let short-term uncertainty derail long-term investment goals.

Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.

Thank you for choosing to invest with Wells Fargo Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.

Sincerely,

 

LOGO

Andrew Owen

President

Wells Fargo Funds

 

“Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal”

 

 

For further information about your Fund, contact your investment professional, visit our website at wfam.com,

or call us directly at 1-800-222-8222.

 

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  3


Performance highlights (unaudited)

 

Investment objective

The Fund seeks current income exempt from federal income tax and California individual income tax, consistent with capital preservation.

Manager

Wells Fargo Funds Management, LLC

Subadviser

Wells Capital Management Incorporated

Portfolio managers

Terry J. Goode

Brandon Pae

Adrian Van Poppel

Average annual total returns (%) as of December 31, 2019

 

 
        Including sales charge     Excluding sales charge     Expense ratios1 (%)  
 
    Inception date   1 year     5 year     10 year     1 year     5 year     10 year     Gross     Net2  
                   
Class A (SFCIX)   11-18-1992     1.46       1.07       2.02       3.56       1.48       2.22       0.85       0.80  
                   
Class C (SFCCX)   8-30-2002     1.79       0.72       1.46       2.79       0.72       1.46       1.60       1.55  
                   
Administrator Class (SCTIX)   9-6-1996                       3.80       1.70       2.43       0.79       0.60  
                   
Institutional Class (SFCNX)3   10-31-2014                       3.90       1.78       2.48       0.52       0.50  
                   
Bloomberg Barclays Municipal 1-5 Year Blend Index4                         4.03       1.82       2.03              
                   
Bloomberg Barclays California Municipal 1-5 Year Blend Index5                         3.55       1.64       2.01              

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, wfam.com.

Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.

For Class A shares, the maximum front-end sales charge is 2.00%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Administrator Class and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.

Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. 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). The Fund is exposed to California municipal securities risk and high-yield securities risk. Consult the Fund’s prospectus for additional information on these and other risks. A portion of the Fund’s income may be subject to federal, state, and/or local income taxes or the Alternative Minimum Tax (AMT). Any capital gains distributions may be taxable.

 

Please see footnotes on page 5.

 

 

4  |  Wells Fargo California Limited-Term Tax-Free Fund


Performance highlights (unaudited)

 

Effective maturity distribution as of December 31, 20196

 

LOGO

 

Credit quality as of December 31, 20197
LOGO
 

 

 

 

 

1 

Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report.

 

2 

The manager has contractually committed through October 31, 2020, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.80% for Class A, 1.55% for Class C, 0.60% for Administrator Class, and 0.50% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Without this cap, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses.

 

3 

Historical performance shown for the Institutional Class shares prior to their inception reflects the performance of the Administrator Class shares, and is not adjusted to reflect the Institutional Class share expenses. If these expenses had been included, returns for the Institutional Class shares would be higher.

 

4 

The Bloomberg Barclays Municipal 1–5 Year Blend Index is the 1–5 Year component of the Bloomberg Barclays Municipal Bond Index. The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

5 

The Bloomberg Barclays California Municipal 1-5 Year Blend Index is the 1-5 Year component of the Bloomberg Barclays California Municipal Bond Index. You cannot invest directly in an index.

 

6 

Amounts are calculated based on the long-term total investments of the Fund. These amounts are subject to change and may have changed since the date specified.

 

7 

The credit quality distribution of portfolio holdings reflected in the chart is based on ratings from Standard & Poor’s, Moody’s Investors Service, and/ or Fitch Ratings Ltd. Credit quality ratings apply to the underlying holdings of the Fund and not to the Fund itself. The percentages of the Fund’s portfolio with the ratings depicted in the chart are calculated based on the total market value of fixed income securities held by the Fund. If a security was rated by all three rating agencies, the middle rating was utilized. If rated by two of three rating agencies, the lower rating was utilized, and if rated by one of the rating agencies, that rating was utilized. Standard & Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories. Standard & Poor’s rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody’s rates the creditworthiness of bonds, ranging from Aaa (highest) to C (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Moody’s rates the creditworthiness of short-term U.S. tax-exempt municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Credit quality distribution is subject to change and may have changed since the date specified.

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  5


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 and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing 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 period from July 1, 2019 to December 31, 2019.

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) and contingent deferred sales charges. 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
account  value
7-1-2019
     Ending
account value
12-31-2019
     Expenses
paid during
the period¹
     Annualized net
expense ratio
 
         

Class A

           

Actual

   $ 1,000.00      $ 1,009.71      $ 4.04        0.80

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,021.11      $ 4.06        0.80
         

Class C

           

Actual

   $ 1,000.00      $ 1,005.90      $ 7.82        1.55

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,017.34      $ 7.86        1.55
         

Administrator Class

           

Actual

   $ 1,000.00      $ 1,010.74      $ 3.03        0.60

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.12      $ 3.05        0.60
         

Institutional Class

           

Actual

   $ 1,000.00      $ 1,011.25      $ 2.53        0.50

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.62      $ 2.54        0.50

 

 

1

Expenses paid is equal to the annualized net expense ratio of each class 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).

 

 

6  |  Wells Fargo California Limited-Term Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Municipal Obligations: 99.63%  
California: 93.33%  
Airport Revenue: 6.89%  

California Municipal Finance Authority Revenue Senior Lien Linxs APM Project Series A

    5.00     12-31-2023      $ 750,000      $ 851,398  

California Municipal Finance Authority Revenue Senior Lien Linxs APM Project Series A

    5.00       6-30-2024        950,000        1,091,598  

California Municipal Finance Authority Revenue Senior Lien Linxs APM Project Series A

    5.00       12-31-2024        750,000        873,345  

Los Angeles CA Department of Airports AMT Series B

    5.00       5-15-2024        5,000,000        5,785,400  

Los Angeles CA Department of Airports AMT Series B

    5.00       5-15-2025        6,000,000        7,127,820  

Los Angeles CA Department of Airports AMT Series B

    5.00       5-15-2026        2,500,000        3,037,900  

Los Angeles CA Department of Airports AMT Subordinate Bond Series C

    5.00       5-15-2024        4,315,000        4,986,802  

Sacramento County CA Airport System Subordinate Refunding Bond AMT Series F

    5.00       7-1-2021        2,585,000        2,727,692  

Sacramento County CA Airport System Subordinate Refunding Bond AMT Series F

    5.00       7-1-2022        2,590,000        2,822,996  

Sacramento County CA Airport System Subordinate Refunding Bond AMT Series F

    5.00       7-1-2023        2,585,000        2,904,506  

Sacramento County CA Airport System Subordinate Refunding Bond AMT Series F

    5.00       7-1-2024        1,760,000        2,035,739  

San Diego County CA Regional Airport Authority Airport Revenue Refunding Bond AMT Subordinated Series C %%

    5.00       7-1-2027        750,000        909,353  

San Diego County CA Regional Airport Authority Airport Revenue Refunding Bond AMT Subordinated Series C %%

    5.00       7-1-2028        1,000,000        1,229,550  

San Diego County CA Regional Airport Authority Airport Revenue Refunding Bond AMT Subordinated Series C %%

    5.00       7-1-2029        1,000,000        1,244,400  
     37,628,499  
  

 

 

 
Education Revenue: 6.43%  

California Infrastructure and Economic Development Bank Revenue Colburn School

    1.75       8-1-2055        6,000,000        6,013,980  

California Municipal Finance Authority Revenue Anticipation Notes Highlands Community 144A

    4.00       8-15-2020        2,000,000        2,020,880  

California Municipal Finance Authority Revenue Anticipation Notes River Springs 144A

    4.00       8-15-2020        1,000,000        1,010,560  

California Educational Facilities Authority Revenue Loma Linda University Series A

    5.00       4-1-2024        550,000        635,344  

California Educational Facilities Authority Revenue Loma Linda University Series A

    5.00       4-1-2026        325,000        395,346  

California Municipal Finance Authority California Baptist University Series A 144A

    4.00       11-1-2021        400,000        410,884  

California Municipal Finance Authority Charter School Albert Einstein Academies Project Series A

    6.00       8-1-2023        580,000        621,511  

California Municipal Finance Authority Charter School Revenue John Dams Academics Lincoln 144A

    4.00       10-1-2029        420,000        430,391  

California Municipal Finance Authority Charter School Revenue Palmdale Aerospace Academy Project Series A 144A

    3.88       7-1-2028        1,400,000        1,488,396  

California Municipal Finance Authority Revenue Refunding Bond Biola University

    5.00       10-1-2027        790,000        974,299  

California Municipal Finance Authority Revenue Refunding Bond California Lutheran University

    5.00       10-1-2021        250,000        265,765  

California Municipal Finance Authority Revenue Refunding Bond California Lutheran University

    5.00       10-1-2022        250,000        274,273  

California Municipal Finance Authority Revenue Refunding Bond California Lutheran University

    5.00       10-1-2023        225,000        254,068  

California Municipal Finance Authority Revenue Refunding Bond California Lutheran University

    5.00       10-1-2024        275,000        318,805  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  7


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Education Revenue (continued)  

California Municipal Finance Authority Revenue Refunding Bond California Lutheran University

    5.00 %       10-1-2025      $ 275,000      $ 326,136  

California Municipal Finance Authority Revenue Refunding Bond California Lutheran University

    5.00       10-1-2026        300,000        362,694  

California School Finance Authority Bright Star School Obligation Group 144A

    5.00       6-1-2027        1,860,000        1,996,394  

California School Finance Authority Classical Academies Project Series A 144A

    3.25       10-1-2022        1,950,000        1,974,726  

California School Finance Authority Coastal Academy Project Series A 144A

    5.00       10-1-2022        200,000        210,992  

California School Finance Authority Rocketship Education Series A 144A

    5.00       6-1-2021        255,000        259,965  

California School Finance Authority Rocketship Education Series A 144A

    5.00       6-1-2026        500,000        547,240  

California Statewide CDA California Baptist University Series A

    5.13       11-1-2023        580,000        622,723  

California Statewide CDA School Facilities

    5.88       7-1-2022        940,000        988,946  

California Statewide Community Refunding Bond California Baptist University Series A 144A

    3.00       11-1-2022        1,300,000        1,323,946  

University of California Series AK

    5.00       5-15-2048        10,000,000        11,345,000  
     35,073,264  
  

 

 

 
GO Revenue: 25.01%  

Alvord CA Unified School District Election of 2007 Series B (AGM Insured)

    6.50       8-1-2020        1,605,000        1,655,044  

Bassett CA Unified School District Refunding Bond Series B (BAM Insured)

    5.00       8-1-2021        550,000        585,514  

Bassett CA Unified School District Refunding Bond Series B (BAM Insured)

    5.00       8-1-2023        725,000        824,253  

California

    5.00       10-1-2021        6,795,000        7,272,349  

California

    5.00       11-1-2022        2,500,000        2,780,950  

California

    5.00       10-1-2023        8,400,000        9,630,852  

California

    5.25       10-1-2022        2,750,000        3,068,615  

California Refunding Bond Various Purpose Bidding Group C

    5.00       9-1-2027        8,500,000        10,513,820  

California Series B

    5.00       9-1-2023        10,730,000        12,268,897  

California Statewide Refunding Bond Various Purpose

    5.00       8-1-2025        3,500,000        4,232,550  

California Statewide Series B (1 Month LIBOR +0.76%) ±

    1.95       12-1-2031        2,500,000        2,516,550  

California Statewide Series E (SIFMA Municipal Swap +0.43%) ±

    2.04       12-1-2029        3,050,000        3,060,340  

Central California Unified School District Refunding Bond (AGM Insured)

    4.00       7-1-2020        500,000        507,705  

Central California Unified School District Refunding Bond (AGM Insured)

    5.00       7-1-2021        400,000        424,476  

Central California Unified School District Refunding Bond (AGM Insured)

    5.00       7-1-2022        750,000        826,043  

Coachella Valley CA Unified School District (BAM Insured)

    4.00       8-1-2020        2,455,000        2,497,447  

Coachella Valley CA Unified School District (BAM Insured)

    4.00       8-1-2021        2,230,000        2,339,136  

Coachella Valley CA Unified School District (BAM Insured)

    4.00       8-1-2022        1,000,000        1,077,970  

Cotati Rohnert Park CA Unified School District Series B (AGM Insured)

    5.00       8-1-2020        2,275,000        2,327,939  

Dixon CA Unified School District (AGM Insured)

    5.00       8-1-2021        1,210,000        1,288,130  

Dixon CA Unified School District (AGM Insured)

    5.00       8-1-2022        1,285,000        1,417,496  

El Monte CA City School District CAB BAN ¤

    0.00       4-1-2023        2,000,000        1,907,260  

El Monte CA Union High School Refunding Bond

    5.00       6-1-2021        1,315,000        1,390,994  

Fowler CA Unified School District School Facilities Improvement District #1 (National Insured)

    5.20       7-1-2020        120,000        120,749  

Hayward CA Unified School District Certificate of Participation (AGM Insured)

    5.00       8-1-2022        500,000        551,420  

Hayward CA Unified School District Certificate of Participation (AGM Insured)

    5.00       8-1-2023        805,000        918,859  

Huntington Beach CA City School District Election of 2002

    4.00       8-1-2021        505,000        529,715  

Inglewood CA Unified School District Election of 2012 Series B (BAM Insured)

    4.00       8-1-2021        320,000        333,754  

Inglewood CA Unified School District Election of 2012 Series B (BAM Insured)

    4.00       8-1-2022        200,000        213,794  

Inglewood CA Unified School District Election of 2012 Series B (BAM Insured)

    5.00       8-1-2023        195,000        220,009  

Inglewood CA Unified School District Election of 2012 Series B (BAM Insured)

    5.00       8-1-2024        150,000        174,051  

Inglewood CA Unified School District Election of 2012 Series B (BAM Insured)

    5.00       8-1-2025        170,000        202,135  

Inglewood CA Unified School District Election of 2012 Series B (BAM Insured)

    5.00       8-1-2026        235,000        285,605  

La Habra CA School District Refunding Bond

    5.00       8-1-2020        1,045,000        1,069,808  

La Habra CA School District Refunding Bond

    5.00       8-1-2021        805,000        856,979  

Los Angeles CA Unified School District Refunding Bond Series D

    5.00       7-1-2023        6,180,000        7,016,401  

Mount San Antonio Community College District CAB ¤

    0.00       4-1-2022        10,000,000        9,723,800  

 

The accompanying notes are an integral part of these financial statements.

 

 

8  |  Wells Fargo California Limited-Term Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue (continued)  

Oak Valley CA Hospital District Refunding Bond Los Angeles County CA RDA

    4.00 %       7-1-2020      $ 500,000      $ 507,455  

Oak Valley CA Hospital District Refunding Bond Los Angeles County CA RDA

    5.00       7-1-2021        950,000        1,006,668  

Oak Valley CA Hospital District Refunding Bond Los Angeles County CA RDA

    5.00       7-1-2022        750,000        818,250  

Oak Valley CA Hospital District Refunding Bond Los Angeles County CA RDA

    5.00       7-1-2023        755,000        850,523  

Oakland CA Unified School District Alameda County Election of 2012 Series A

    5.00       8-1-2022        750,000        822,690  

Oakland CA Unified School District Alameda County Election of 2012 Series A

    5.00       8-1-2024        600,000        700,854  

Oakland CA Unified School District Refunding Bond

    5.00       8-1-2025        1,540,000        1,846,629  

Oakland CA Unified School District Refunding Bond

    5.00       8-1-2028        2,500,000        3,049,400  

Oakland CA Unified School District Refunding Bond Measure B Series B

    5.00       8-1-2026        500,000        614,340  

Oakland CA Unified School District Refunding Bond Measure J Series C

    5.00       8-1-2025        795,000        953,292  

Redondo Beach CA Unified School District CAB Election of 2008 Series E ¤

    0.00       8-1-2020        460,000        456,780  

Riverside CA Community College District Election of 2004 CAB Series D ¤

    0.00       8-1-2020        535,000        531,469  

Sacramento CA City Unified School Election of 2012 Measure Q Series E

    5.00       8-1-2029        1,500,000        1,834,725  

Sacramento CA City Unified School Refunding Bond

    5.00       7-1-2022        485,000        524,896  

Sacramento CA City Unified School Refunding Bond

    5.00       7-1-2026        2,430,000        2,557,794  

Salinas CA Union High School District CAB ¤##

    0.00       8-1-2020        5,000,000        4,942,150  

San Gorgonio CA Memorial Healthcare Refunding Bond

    5.00       8-1-2021        275,000        290,389  

San Gorgonio CA Memorial Healthcare Refunding Bond

    5.00       8-1-2022        500,000        542,735  

San Gorgonio CA Memorial Healthcare Refunding Bond

    5.00       8-1-2023        1,000,000        1,117,090  

San Mateo Foster City CA School District

    5.00       8-15-2020        2,000,000        2,050,680  

Santa Ana CA Unified School District CAB Election of 2008 Series A ¤

    0.00       8-1-2020        1,815,000        1,800,952  

Sierra Kings CA Health Care Refunding Bond

    4.00       8-1-2021        345,000        360,321  

Sierra Kings CA Health Care Refunding Bond

    4.00       8-1-2022        425,000        454,984  

Sierra Kings CA Health Care Refunding Bond

    4.00       8-1-2023        405,000        442,685  

Sierra Kings CA Health Care Refunding Bond

    4.00       8-1-2024        420,000        469,169  

SouthWestern Community College District Refunding Bond

    5.00       8-1-2020        1,250,000        1,279,675  

SouthWestern Community College District Refunding Bond

    5.00       8-1-2021        2,710,000        2,884,985  

Sweetwater CA Union High School District PFA Refunding Bond (BAM Insured)

    5.00       8-1-2021        620,000        657,715  

Twin Rivers CA Unified School District Series A (BAM Insured)

    5.00       8-1-2020        510,000        521,868  

Vacaville CA Unified School District Series C (BAM Insured)

    5.00       8-1-2022        675,000        745,511  

Vallejo City CA Unified School District Refunding Bond Series A (National Insured)

    5.90       2-1-2022        3,905,000        4,249,109  
     136,517,192  
  

 

 

 
Health Revenue: 8.32%  

California HFFA Catholic Healthcare West Series A

    5.25       3-1-2023        4,000,000        4,188,080  

California HFFA El Camino Hospital

    5.00       2-1-2025        1,000,000        1,195,410  

California HFFA Memorial Health Services Series A

    5.00       10-1-2023        2,475,000        2,751,458  

California HFFA Providence St. Joseph Series B1

    1.25       10-1-2036        2,000,000        2,002,200  

California HFFA Revenue Kaiser Permanente Series C

    5.00       6-1-2041        2,500,000        3,264,700  

California HFFA Sutter Health Series A

    5.00       11-15-2023        2,500,000        2,885,925  

California Municipal Finance Authority Community Medical Centers Series A

    5.00       2-1-2023        735,000        819,753  

California Municipal Finance Authority Community Medical Centers Series A

    5.00       2-1-2024        500,000        574,490  

California Municipal Finance Authority Revenue Community Medical Centers Series A

    5.00       2-1-2025        1,000,000        1,181,820  

California Municipal Finance Authority Revenue Healthright 360 Series A 144A

    5.00       11-1-2029        1,170,000        1,365,636  

California Municipal Finance Authority Revenue Insured Channing House Project Series A

    5.00       5-15-2022        475,000        520,006  

California Municipal Finance Authority Revenue Insured Channing House Project Series A

    5.00       5-15-2023        925,000        1,048,756  

California Municipal Finance Authority Revenue Insured Paradise Valley Estates Project Series B1

    2.25       7-1-2025        2,200,000        2,217,006  

California Municipal Finance Authority Revenue Insured Paradise Valley Estates Project Series B2

    2.00       7-1-2024        2,500,000        2,518,675  

California Municipal Finance Authority Revenue Refunding Bond Community Medical Centers Series A

    5.00       2-1-2022        1,000,000        1,079,210  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  9


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue (continued)  

California Municipal Finance Authority Revenue Refunding Bond Eisenhower Medical Center Series A

    5.00 %       7-1-2027      $ 1,650,000      $ 2,006,120  

California Municipal Finance Authority Revenue Refunding Bond Eisenhower Medical Center Series A

    5.00       7-1-2029        400,000        481,700  

California Municipal Finance Authority Revenue Refunding Bond Humangood Obligation Group

    4.00       10-1-2029        1,000,000        1,135,410  

California Statewide CDA Adventist Health Systems West Series A

    5.00       3-1-2024        800,000        927,480  

California Statewide CDA Health Facilities Catholic Series F (AGM Insured) (m)

    1.67       7-1-2040        1,000,000        1,000,000  

California Statewide CDA Henry Mayo Newhall Memorial Hospital Series A (AGM Insured)

    5.00       10-1-2021        500,000        532,245  

California Statewide CDA Henry Mayo Newhall Memorial Hospital Series A (AGM Insured)

    5.00       10-1-2022        395,000        435,037  

California Statewide CDA Henry Mayo Newhall Memorial Hospital Series A (AGM Insured)

    5.00       10-1-2023        500,000        567,730  

California Statewide CDA Huntington Memorial Hospital

    5.00       7-1-2025        500,000        593,015  

California Statewide CDA Huntington Memorial Hospital

    5.00       7-1-2026        500,000        606,235  

California Statewide CDA Insured Viamonte Senior Living 1 Project

    3.00       7-1-2025        3,000,000        3,053,400  

California Statewide CDA Revenue Loma Linda University Medical Center Series A 144A

    5.00       12-1-2026        250,000        293,285  

California Statewide CDA Revenue Loma Linda University Medical Center Series A 144A

    5.00       12-1-2027        300,000        356,493  

California Statewide CDA Revenue Loma Linda University Medical Center Series A 144A

    5.00       12-1-2028        250,000        298,933  

Palomar Health California Certificate of Participation Health & Arch Health Partners Incorporated

    5.00       11-1-2020        250,000        256,915  

Palomar Health California Certificate of Participation Health & Arch Health Partners Incorporated

    5.00       11-1-2021        275,000        291,660  

Palomar Health California Certificate of Participation Health & Arch Health Partners Incorporated

    5.00       11-1-2022        375,000        409,868  

Palomar Health California Certificate of Participation Health & Arch Health Partners Incorporated

    5.00       11-1-2023        300,000        336,828  

Palomar Health California Certificate of Participation Health & Arch Health Partners Incorporated

    5.00       11-1-2024        300,000        345,243  

Palomar Health California Certificate of Participation Health & Arch Health Partners Incorporated

    5.00       11-1-2025        330,000        387,895  

San Buenaventura CA Community Mental Health System

    6.50       12-1-2021        2,585,000        2,817,211  

Washington Township CA Health Care District Revenue Refunding Bond Series A

    5.00       7-1-2023        600,000        672,636  
     45,418,464  
  

 

 

 
Housing Revenue: 8.24%  

California Department of Veterans Affairs Home Purchase Series A

    3.50       12-1-2021        855,000        884,241  

California HFA Home Mortgage Series A (GNMA/FNMA/FHLMC Insured)

    3.75       8-1-2020        300,000        300,627  

California HFA Municipal Certificates Series 2 Class A

    4.00       3-20-2033        4,000,000        4,574,200  

California Independent Cities Finance Authority Mobile Home Park Revenue Refunding Bond Union City Tropics

    4.25       5-15-2024        745,000        819,701  

California Municipal Finance Authority Housing Revenue Dino Papavero Apartments Project

    1.50       6-1-2022        10,000,000        10,006,800  

California Municipal Finance Authority MFHR Hollywood El Centro Series A

    1.40       11-1-2021        1,750,000        1,752,048  

California Municipal Finance Authority MFHR 1 Church Street Series B

    2.19       9-1-2021        10,000,000        10,060,200  

California Municipal Finance Authority Peppertree Senior Apartments Series A (FHLMC Insured, FHLMC LIQ)

    2.80       6-1-2023        2,500,000        2,631,275  

California Municipal Finance Authority Student Housing Davis I LLC West Village Student Housing Project

    5.00       5-15-2024        1,200,000        1,385,724  

 

The accompanying notes are an integral part of these financial statements.

 

 

10  |  Wells Fargo California Limited-Term Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Housing Revenue (continued)  

California Municipal Finance Authority Student Housing Davis I LLC West Village Student Housing Project

    5.00 %       5-15-2025      $ 3,435,000      $ 4,061,132  

California Municipal Finance Authority Village Grove Apartments Series A (FHLMC Insured, FHLMC LIQ)

    3.10       12-1-2021        1,000,000        1,032,490  

California Statewide CDA College Housing Revenue Bonds 144A

    5.00       7-1-2024        500,000        542,450  

California Statewide CDA Revenue Lancer Educational Student Housing Project Series A 144A

    3.00       6-1-2029        750,000        776,033  

Federal Home Loan Mortgage Corporation MFHR Various Cerficates Relating To Municipal Securites Series M 057 Class A

    2.40       10-15-2029        6,000,000        6,164,160  
     44,991,081  
  

 

 

 
Industrial Development Revenue: 1.63%  

California Municipal Finance Authority Special Facility Revenue United Airlines Incorporated

    4.00       7-15-2029        3,000,000        3,409,770  

California PCFA AMT Calplant Project I 144A

    7.00       7-1-2022        500,000        501,865  

California PCFA AMT Calplant Project I 144A

    7.50       7-1-2032        1,500,000        1,485,090  

San Francisco CA City and County Airports Commission International Airport Revenue AMT Special Facilities Lease SFO Fuel Company Series 2019A

    5.00       1-1-2025        3,000,000        3,509,100  
     8,905,825  
  

 

 

 
Miscellaneous Revenue: 12.69%  

Alameda County CA Joint Powers Authority Multiple Capital Projects Series A

    5.00       12-1-2021        1,000,000        1,078,100  

Brentwood CA Infrastructure Financing Authority Subordinate Bond Series B

    4.00       9-2-2021        1,135,000        1,189,105  

California

    5.00       9-1-2022        2,240,000        2,477,082  

California Infrastructure & Economic Development Bank Refunding Bond California Academy of Sciences Project Series C (1 Month LIBOR +0.38%) ±

    1.63       8-1-2047        4,000,000        3,996,440  

California Public Works Board Capital Project Series G

    5.00       11-1-2020        3,000,000        3,099,150  

California Public Works Board Department of Corrections & Rehabilitation Series C

    5.00       10-1-2022        1,500,000        1,661,925  

California Public Works Board Judicial Council Projects Series B

    5.00       10-1-2022        500,000        553,975  

California Public Works Board Various Capital Projects Series I

    5.00       11-1-2020        1,250,000        1,291,313  

California Statewide CDA Refunding Bond (AGM Insured)

    5.00       11-15-2020        210,000        217,470  

California Statewide CDA Refunding Bond (AGM Insured)

    5.00       11-15-2021        200,000        215,260  

California Statewide CDA Refunding Bond (AGM Insured)

    5.00       11-15-2022        200,000        222,300  

California Statewide Community Monterey County Savers Bond (BAM Insured)

    5.00       8-1-2027        2,185,000        2,708,242  

Chula Vista CA Certificate of Participation Refunding Bond Police Facility Project

    5.00       10-1-2021        720,000        770,969  

Compton CA PFA Lease 144A

    4.00       9-1-2022        1,530,000        1,563,339  

Compton CA PFA Refunding Bond 144A

    4.00       9-1-2027        2,000,000        2,057,340  

Desert Sands CA Unified School District Certificate of Participation (BAM Insured)

    5.00       3-1-2024        1,500,000        1,748,355  

Golden Empire School California Financing Authority Refunding Bond Kern High School District

    5.00       5-1-2021        1,000,000        1,052,340  

Inglewood CA Unified School District School Facilities Authority (AGM Insured)

    5.25       10-15-2023        8,670,000        9,688,378  

Irvine CA Limited Obligation Improvement Bonds Reassessment District #15-2

    5.00       9-2-2023        800,000        896,880  

Irvine CA Limited Obligation Improvement Bonds Reassessment District #15-2

    5.00       9-2-2024        850,000        976,676  

Lodi CA PFA Electric Refunding Bond (AGM Insured)

    5.00       9-1-2024        1,100,000        1,294,612  

Los Angeles CA Public Works Series D

    5.00       12-1-2027        1,605,000        1,957,281  

Los Angeles CA Unified School District Certificate of Participation Headquarters Building Projects Series B

    5.00       10-1-2025        1,875,000        2,062,388  

Los Angeles County CA Public Works Multiple Capital Projects II

    5.00       8-1-2020        500,000        511,695  

Mountain HFA California Utility System Revenue Series A

    5.00       12-1-2029        520,000        653,947  

Mountain HFA California Utility System Revenue Series A

    5.00       12-1-2030        710,000        883,971  

Mountain HFA California Utility System Revenue Series A

    5.00       12-1-2031        745,000        920,701  

Norwalk CA Community Facilities Financing Series A (AGM Insured)

    4.00       6-1-2020        350,000        354,484  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  11


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue (continued)  

Norwalk CA Community Facilities Financing Series B (AGM Insured)

    4.00 %       6-1-2020      $ 650,000      $ 658,327  

Palo Alto CA Improvement Bond Act of 1915 University Area Off-Street Parking Assessment District

    4.00       9-2-2021        450,000        471,605  

Riverside County CA Public Financing County Facilities Projects

    4.00       5-1-2020        795,000        803,014  

Sacramento CA City Financing Refunding Bond Master Lease Program Facilities (BAM Insured)

    5.00       12-1-2022        800,000        893,256  

Sacramento CA City Schools Joint Powers Financing Authority Series A (BAM Insured)

    5.00       3-1-2020        1,185,000        1,192,418  

Sacramento CA City Schools Joint Powers Financing Authority Series A (BAM Insured)

    5.00       3-1-2021        830,000        867,333  

Sacramento CA City Schools Joint Powers Financing Authority Series A (BAM Insured)

    5.00       3-1-2022        775,000        839,511  

Sacramento CA City Schools Joint Powers Financing Authority Series A (BAM Insured)

    5.00       3-1-2023        815,000        912,759  

Santa Clara County CA Financing Authority Capital Projects Series A

    4.00       2-1-2024        6,000,000        6,367,680  

Santa Cruz County CA Capital Financing Public Facilities Project (AGM Insured)

    4.00       8-1-2020        150,000        152,630  

Santa Cruz County CA Capital Financing Public Facilities Project (AGM Insured)

    5.00       8-1-2021        125,000        132,909  

Santa Cruz County CA Capital Financing Public Facilities Project (AGM Insured)

    5.00       8-1-2022        165,000        181,612  

Santa Paula CA Utility Authority Water Revenue (AGM Insured)

    5.00       2-1-2025        925,000        1,097,688  

Soledad CA Unified School District BAN ¤

    0.00       8-1-2021        3,000,000        2,934,180  

Sutter Butte CA Flood Agency Assessment (BAM Insured)

    5.00       10-1-2023        1,280,000        1,460,954  

Sutter Butte CA Flood Agency Assessment (BAM Insured)

    5.00       10-1-2024        715,000        839,646  

Sutter Butte CA Flood Agency Assessment (BAM Insured)

    5.00       10-1-2025        1,575,000        1,895,686  

Ventura County CA PFA Series B

    5.00       11-1-2020        250,000        258,558  

Visalia CA Certificate of Participation (AGM Insured)

    4.00       12-1-2020        250,000        257,015  

Visalia CA Certificate of Participation (AGM Insured)

    4.00       12-1-2021        250,000        264,650  

Visalia CA Certificate of Participation (AGM Insured)

    5.00       12-1-2022        335,000        374,151  

West Sacramento CA Flood Control Agency

    5.00       9-1-2020        290,000        297,874  
     69,257,174  
  

 

 

 
Tax Revenue: 17.58%  

California School Infrastructure Financing Agency Refunding Bond (AGM Insured)

    5.00       9-1-2021        1,300,000        1,388,335  

California Statewide Community Facilities District #2015-01

    5.00       9-1-2027        500,000        565,135  

Carson CA RDA Project Area #1 Series A (AGM Insured)

    5.00       10-1-2020        775,000        797,514  

Carson CA RDA Project Area #1 Series A (AGM Insured)

    5.00       10-1-2021        855,000        912,901  

Carson CA RDA Project Area #1 Series A (AGM Insured)

    5.00       10-1-2022        600,000        665,292  

Cathedral City CA RDA Refunding Bond Merged Redevelopment Project Series A

    5.00       8-1-2020        2,295,000        2,345,857  

Cathedral City CA RDA Refunding Bond Merged Redevelopment Project Series A

    5.00       8-1-2021        2,425,000        2,575,277  

Cathedral City CA RDA Refunding Bond Merged Redevelopment Project Series A

    5.00       8-1-2022        2,550,000        2,801,940  

Cathedral City CA RDA Refunding Bond Merged Redevelopment Project Series A

    5.00       8-1-2023        1,735,000        1,970,561  

Cathedral City CA RDA Refunding Bond Merged Redevelopment Project Series A (AGM Insured)

    5.00       8-1-2024        1,770,000        2,066,652  

Chino CA PFA Local Agency Series A (AGM Insured)

    5.00       9-1-2022        1,830,000        2,021,638  

Chino CA PFA Local Agency Series A (AGM Insured)

    5.00       9-1-2024        660,000        778,411  

Commerce CA RDA CAB Project #1 ¤

    0.00       8-1-2021        600,000        567,036  

Commerce CA Successor Agency to the Community Development Commission Refunding Bond Series A (AGM Insured)

    5.00       8-1-2023        600,000        681,006  

Dinuba CA RDA Successor Agency to Merged City Project #2 (BAM Insured)

    5.00       9-1-2021        250,000        266,173  

Dinuba CA RDA Successor Agency to Merged City Project #2 (BAM Insured)

    5.00       9-1-2022        250,000        275,833  

Fairfield CA RDA Successor Agency Tax Allocation Refunding Bond

    5.00       8-1-2020        1,000,000        1,023,740  

Fairfield CA RDA Successor Agency Tax Allocation Refunding Bond

    5.00       8-1-2021        3,170,000        3,374,687  

Fairfield CA RDA Successor Agency Tax Allocation Refunding Bond

    5.00       8-1-2022        2,395,000        2,640,655  

Fairfield CA RDA Successor Agency Tax Allocation Refunding Bond

    5.00       8-1-2023        1,025,000        1,168,808  

Fremont CA Community Facilities District

    5.00       9-1-2024        1,000,000        1,140,650  

Garden Grove CA Agency Community Refunding Bond Garden Grove Community Project (BAM Insured)

    4.00       10-1-2021        770,000        811,626  

 

The accompanying notes are an integral part of these financial statements.

 

 

12  |  Wells Fargo California Limited-Term Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue (continued)  

Garden Grove CA Agency Community Refunding Bond Garden Grove Community Project (BAM Insured)

    5.00 %       10-1-2022      $ 3,015,000      $ 3,339,625  

Imperial Beach CA RDA Palm Avenue Commercial Redevelopment Project (BAM Insured)

    4.00       6-1-2020        775,000        784,633  

Inglewood CA Redevelopment Subordinate Refunding Bond Lien Merged Redevelopment Project (BAM Insured)

    5.00       5-1-2025        1,000,000        1,191,890  

Irwindale CA CDA City Industrial Development Project (AGM Insured)

    5.00       7-15-2020        320,000        327,014  

Irwindale CA CDA City Industrial Development Project (AGM Insured)

    5.00       7-15-2021        340,000        361,342  

Irwindale CA CDA City Industrial Development Project (AGM Insured)

    5.00       7-15-2022        365,000        402,186  

Irwindale CA CDA City Industrial Development Project (AGM Insured)

    5.00       7-15-2023        375,000        426,990  

Jurupa CA PFA Series A

    5.00       9-1-2020        750,000        769,605  

La Quinta CA RDA Project Areas #1 & 2 Series A

    5.00       9-1-2020        1,045,000        1,073,027  

La Quinta CA RDA Project Areas #1 & 2 Series A

    5.00       9-1-2021        565,000        603,296  

La Quinta CA RDA Project Areas #1 & 2 Series A

    5.00       9-1-2022        615,000        681,119  

Lancaster CA RDA Refunding Bond Combined Redevelopment Project Areas (AGM Insured)

    5.00       8-1-2024        870,000        1,019,205  

Lancaster CA RDA Refunding Bond Combined Redevelopment Project Areas (AGM Insured)

    5.00       8-1-2029        400,000        486,748  

Lincoln CA Special Tax Refunding Bond Community Facilities District #2003-1 Lincoln Crossing Project

    4.00       9-1-2024        600,000        676,050  

Lincoln CA Special Tax Refunding Bond Community Facilities District #2003-1 Lincoln Crossing Project

    5.00       9-1-2025        550,000        662,921  

Menifee CA Union School District Public Series A

    4.00       9-1-2022        540,000        576,369  

Oakdale CA Successor Agency to Oakdale Community RDA Series A (AGM Insured)

    5.00       6-1-2027        350,000        428,999  

Orange County CA Community Facilities #2015-1 Esencia Village Series A

    5.00       8-15-2023        365,000        406,121  

Orange County CA Community Facilities #2015-1 Esencia Village Series A

    5.00       8-15-2025        325,000        379,558  

Orange County CA Development Agency Santa Ana Heights Project

    5.00       3-1-2020        1,110,000        1,117,071  

Orange County CA Development Agency Santa Ana Heights Project

    5.00       9-1-2020        1,140,000        1,169,800  

Palmdale CA Special Tax Refunding Bond Improvement Area A Community Facilities (AGM Insured)

    5.00       9-1-2027        280,000        352,330  

Pittsburg CA Successor Agency of Los Medanos Community Development (AGM Insured)

    5.00       8-1-2021        1,885,000        2,003,944  

Pittsburg CA Successor Agency of Los Medanos Community Development (AGM Insured)

    5.00       8-1-2022        1,305,000        1,438,502  

Pittsburg CA Successor Agency of Los Medanos Community Development (AGM Insured)

    5.00       8-1-2023        780,000        888,849  

Placentia CA RDA Project (BAM Insured)

    5.00       8-1-2020        600,000        614,244  

Poway CA Unified School District PFA

    4.00       9-15-2020        335,000        342,300  

Poway CA Unified School District PFA (BAM Insured)

    4.00       10-1-2020        300,000        306,948  

Poway CA Unified School District PFA (BAM Insured)

    4.00       10-1-2021        185,000        195,001  

Poway CA Unified School District PFA Series B (BAM Insured)

    5.00       9-1-2024        1,115,000        1,318,398  

Poway CA Unified School District PFA Series B (BAM Insured)

    5.00       9-1-2025        775,000        943,594  

Rialto CA RDA Successor Agency to Merged Project Area

    5.00       9-1-2022        475,000        525,141  

Riverside CA PFA Local Measure Certificate of Participation Riverside Pavement Rehabilitation Project (AGM Insured)

    5.00       6-1-2023        845,000        959,793  

Riverside County CA PFA Indian Wells Project Series A (AGM Insured)

    5.00       9-1-2020        1,610,000        1,652,311  

Roseville CA Finance Authority Special Refunding Bond Series A

    5.00       9-1-2023        400,000        458,456  

Roseville CA Finance Authority Special Refunding Bond Series A

    5.00       9-1-2029        300,000        379,227  

Roseville CA Special Tax Refunding Bond Community Facilities District

    5.00       9-1-2020        1,050,000        1,074,717  

Roseville CA Special Tax Refunding Bond Community Facilities District

    5.00       9-1-2021        500,000        528,960  

Roseville CA Special Tax Refunding Bond Fiddyment Ranch Community

    5.00       9-1-2024        1,905,000        2,178,558  

Roseville CA Special Tax Refunding Bond Fiddyment Ranch Community

    5.00       9-1-2029        1,595,000        1,930,221  

San Francisco CA City & County RDA Successor Agency to Community Facilities District #6 Mission Bay South Series A

    5.00       8-1-2025        1,600,000        1,735,968  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  13


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue (continued)  

San Francisco CA City & County RDA Successor Agency to Mission Bay South Redevelopment Project Series A

    5.00 %       8-1-2020      $ 500,000      $ 511,430  

San Francisco CA City & County RDA Successor Agency to Mission Bay South Redevelopment Project Series A

    5.00       8-1-2022        375,000        412,151  

San Francisco CA City & County RDA Successor Agency to Mission Bay South Redevelopment Project Subordinate Bond Series D 144A

    3.00       8-1-2021        2,555,000        2,601,271  

San Jose CA Convention Center Expansion & Renovation Project

    5.25       5-1-2023        1,465,000        1,545,092  

San Jose CA RDA Tax Refunding Bond Merged Area Redevelopment Project Series A-1

    5.00       8-1-2022        800,000        818,944  

San Marcos CA Unified School District Community Facilities District #5 (BAM Insured)

    5.00       9-1-2020        220,000        225,973  

San Marcos CA Unified School District Community Facilities District #5 (BAM Insured)

    5.00       9-1-2021        270,000        288,347  

San Marcos CA Unified School District Community Facilities District #5 (BAM Insured)

    5.00       9-1-2022        250,000        276,598  

San Pablo CA RDA Series B (AGM Insured)

    5.00       6-15-2021        1,775,000        1,874,560  

San Pablo CA RDA Series B (AGM Insured)

    5.00       6-15-2022        1,865,000        2,041,671  

San Pablo CA RDA Series B (AGM Insured)

    5.00       6-15-2023        1,945,000        2,197,947  

Santa Cruz County CA Redevelopment Successor Agency Tax Allocation Refunding Bond (BAM Insured)

    5.00       9-1-2020        1,000,000        1,026,750  

Stockton CA RDA Refunding Bond Series A (AGM Insured)

    5.00       9-1-2025        1,675,000        2,017,889  

Successor Agency to the Morgan Hill CA RDA Series A

    5.00       9-1-2021        1,055,000        1,126,687  

Successor Agency to the Richmond CA Community RDA Series A (BAM Insured)

    4.50       9-1-2025        160,000        181,810  

Successor Agency to the Richmond CA Community RDA Series A (BAM Insured)

    5.00       9-1-2021        310,000        329,843  

Successor Agency to the Richmond CA Community RDA Series A (BAM Insured)

    5.00       9-1-2022        300,000        330,666  

Successor Agency to the Richmond CA Community RDA Series A (BAM Insured)

    5.00       9-1-2023        265,000        301,366  

Successor Agency to the Richmond CA Community RDA Series A (BAM Insured)

    5.00       9-1-2025        150,000        173,373  

Successor Agency to the Riverside County CA RDA Desert Communities Project Area Series D

    5.00       10-1-2022        445,000        492,143  

Successor Agency to the Riverside County CA RDA Desert Communities Project Area Series D

    5.00       10-1-2023        470,000        537,191  

Successor Agency to the Riverside County CA RDA Project Area #1 Series A

    5.00       10-1-2022        240,000        265,426  

Successor Agency to the Riverside County CA RDA Project Area #1 Series A

    5.00       10-1-2023        460,000        525,762  

Tracy CA Community Facilities District

    4.00       9-1-2021        140,000        145,179  

Tracy CA Community Facilities District

    4.00       9-1-2022        180,000        189,774  

Tracy CA Community Facilities District

    4.00       9-1-2024        135,000        146,943  

Tracy CA Community Facilities District

    4.00       9-1-2025        155,000        171,112  

Tracy CA Community Facilities District

    5.00       9-1-2028        425,000        504,743  

Tustin CA Community Facilities District #6-1 Legacy Columbus Villages Series A

    5.00       9-1-2025        1,000,000        1,202,890  

Upland CA Successor Agency to Merged Project Tax Allocation Bond (AGM Insured)

    5.00       9-1-2023        1,000,000        1,139,930  

Vacaville CA RDA Tax Allocation Subordinate Refunding Bond Redevelopment Projects

    5.00       9-1-2020        600,000        615,972  

Vacaville CA RDA Tax Allocation Subordinate Refunding Bond Redevelopment Projects

    5.00       9-1-2021        600,000        639,948  

Vacaville CA RDA Tax Allocation Subordinate Refunding Bond Redevelopment Projects

    5.00       9-1-2022        1,050,000        1,158,791  

Val Verde CA Unified School District (BAM Insured)

    4.00       10-1-2020        350,000        357,924  

Val Verde CA Unified School District (BAM Insured)

    4.00       10-1-2021        375,000        393,334  

Val Verde CA Unified School District (BAM Insured)

    5.00       10-1-2022        665,000        733,548  

Yuba City CA RDA Refunding Bond (AGM Insured)

    5.00       9-1-2025        750,000        906,270  
     95,960,006  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

14  |  Wells Fargo California Limited-Term Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tobacco Revenue: 0.74%  

Golden State Tobacco Securitization Corporation Tobacco Settlement Refunding Bond Series A1

    5.00 %       6-1-2026      $ 3,000,000      $ 3,544,020  

Tobacco Securitization Authority Southern CA Tobacco Settlement Revenue Refunding Bond Asset Backed Senior Series B1 Class 2

    2.25       6-1-2029        500,000        508,040  
     4,052,060  
  

 

 

 
Utilities Revenue: 2.22%  

Modesto CA Irrigation District Electric Refunding Bond Series A

    5.00       7-1-2020        500,000        510,240  

Southern California Public Power Authority Refunding Bond Canyon Power Project Series A

    2.25       7-1-2040        6,000,000        6,049,200  

Southern California Public Power Authority Refunding Bond Canyon Power Project Series A

    5.00       7-1-2027        1,000,000        1,058,560  

Southern California Public Power Authority Refunding Bond Canyon Power Project Series B (SIFMA Municipal Swap +0.25%) ±

    1.86       7-1-2040        4,000,000        4,000,160  

Walnut CA Energy Center Authority Refunding Bond Series A

    5.00       1-1-2021        500,000        520,400  
     12,138,560  
  

 

 

 
Water & Sewer Revenue: 3.58%  

Eastern California Municipal Water District Refunding Bond Series C (SIFMA Municipal Swap +0.25%) ±

    1.86       7-1-2046        3,000,000        2,999,070  

Florin CA Resource Conservation District Series A (National Insured)

    5.00       9-1-2020        1,000,000        1,026,140  

Florin CA Resource Conservation District Series A (National Insured)

    5.00       9-1-2021        1,250,000        1,331,725  

Florin CA Resource Conservation District Series A (National Insured)

    5.00       9-1-2022        1,250,000        1,376,738  

Goleta CA Water District Certificate of Participation Series A (AGM Insured)

    5.00       12-1-2020        140,000        145,065  

Oxnard CA Financing Authority Refunding Bond (AGM Insured)

    5.00       6-1-2021        735,000        776,726  

San Francisco City & County CA Public Utilities Commisison Series C Green Bond

    2.13       10-1-2048        10,000,000        10,293,800  

San Luis & Delta-Mendota CA Water Authority Delta Habitat Conservation & Conveyance Program Development Project Series A (BAM Insured)

    5.00       3-1-2020        100,000        100,662  

Vallejo CA Refunding Bond (National Insured)

    5.00       5-1-2021        1,500,000        1,504,215  
     19,554,141  
  

 

 

 
     509,496,266  
  

 

 

 
Guam: 1.04%  
Airport Revenue: 0.27%  

Guam Port Authority AMT Series B

    5.00       7-1-2023        540,000        598,547  

Guam Port Authority AMT Series B

    5.00       7-1-2024        750,000        851,723  
     1,450,270  
  

 

 

 
Miscellaneous Revenue: 0.77%  

Guam Education Financing Foundation Certificate of Participation Refunding Bond Series A

    5.00       10-1-2023        3,840,000        4,226,842  
         

 

 

 
     5,677,112  
  

 

 

 
Illinois: 2.53%  
Miscellaneous Revenue: 2.07%  

Illinois Series D

    5.00       11-1-2025        10,000,000        11,293,500  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  15


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue: 0.46%  

Metropolitan Pier & Exposition Authority McCormick Place Expansion Project Series B

    5.00 %       12-15-2025      $ 650,000      $ 742,281  

Sales Tax Securitization Corporation Series 2017A

    5.00       1-1-2026        1,500,000        1,749,690  
     2,491,971  
  

 

 

 
     13,785,471  
  

 

 

 
New York: 1.26%  
Industrial Development Revenue: 1.08%  

New York Transportation Development Corporation Special Facilities Revenue Delta Air Lines Incorporated LaGuardia Airport Terminals C&D Redevelopment

    5.00       1-1-2026        5,000,000        5,894,900  
         

 

 

 
Water & Sewer Revenue: 0.18%  

New York NY Municipal Water Finance Adjusted Fiscal Subordinated Bond Series B2 (State Street Bank & Trust Company SPA) ø

    1.66       6-15-2045        1,000,000        1,000,000  
         

 

 

 
     6,894,900  
  

 

 

 
Texas: 1.47%  
Resource Recovery Revenue: 1.47%  

Port Arthur TX Navigation District Jefferson County Environmental Facilities Motiva Enterprises LLC Project Series B ø

    1.70       4-1-2040        8,045,000        8,045,000  
         

 

 

 

Total Municipal Obligations (Cost $526,748,471)

 

     543,898,749  
  

 

 

 
         
    Yield            Shares         
Short-Term Investments: 0.12%

 

Investment Companies: 0.12%  

Wells Fargo Municipal Cash Management Money Market Fund Institutional Class (l)(u)##

    1.45          657,492        657,755  
         

 

 

 

Total Short-Term Investments (Cost $657,755)

 

     657,755        
  

 

 

 

 

Total investments in securities (Cost $527,406,226)     99.75        544,556,504  

Other assets and liabilities, net

    0.25          1,383,629  
 

 

 

      

 

 

 
Total net assets     100.00      $ 545,940,133  
 

 

 

      

 

 

 

 

 

%%

The security is purchased on a when-issued basis.

144A

The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933.

±

Variable rate investment. The rate shown is the rate in effect at period end.

¤

The security is issued in zero coupon form with no periodic interest payments.

##

All or a portion of this security is segregated for when-issued securities.

(m)

The security is an auction-rate security which has an interest rate that resets at predetermined short-term intervals through a Dutch auction. The rate shown is the rate in effect at period end.

ø

Variable rate demand notes are subject to a demand feature which reduces the effective maturity. The maturity date shown represents the final maturity date of the security. The interest rate is determined and reset by the issuer daily, weekly, or monthly depending upon the terms of the security. The rate shown is the rate in effect at period end.

(l)

The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940.

(u)

The rate represents the 7-day annualized yield at period end.

 

The accompanying notes are an integral part of these financial statements.

 

 

16  |  Wells Fargo California Limited-Term Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

Abbreviations:

 

AGM

Assured Guaranty Municipal

 

AMT

Alternative minimum tax

 

BAM

Build America Mutual Assurance Company

 

BAN

Bond anticipation notes

 

CAB

Capital appreciation bond

 

CDA

Community Development Authority

 

FHLMC

Federal Home Loan Mortgage Corporation

 

FNMA

Federal National Mortgage Association

 

GNMA

Government National Mortgage Association

 

GO

General obligation

 

HFA

Housing Finance Authority

 

HFFA

Health Facilities Financing Authority

 

LIBOR

London Interbank Offered Rate

 

LIQ

Liquidity agreement

 

MFHR

Multifamily housing revenue

 

National

National Public Finance Guarantee Corporation

 

PCFA

Pollution Control Financing Authority

 

PFA

Public Finance Authority

 

RDA

Redevelopment Authority

 

SIFMA

Securities Industry and Financial Markets Association

Investments in Affiliates

An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were either affiliated persons of the Fund at the beginning of the period or the end of the period were as follows:

 

    Shares,
beginning of
period
    Shares
purchased
    Shares
sold
    Shares,
end of
period
    Net
realized
gains
(losses)
    Net
change in
unrealized
gains
(losses)
    Income
from
affiliated
securities
    Value,
end of
period
    % of
net
assets
 
Short-Term Investments                                                      

Investment Companies

                 

Wells Fargo Municipal Cash Management Money Market Fund Institutional Class

    398,366       95,338,890       (95,079,764     657,492     $ (231   $ 0     $ 16,272     $ 657,755       0.12

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  17


Statement of assets and liabilities—December 31, 2019 (unaudited)

 

         

Assets

 

Investments in unaffiliated securities, at value (cost $526,748,471)

  $ 543,898,749  

Investments in affiliated securities, at value (cost $657,755)

    657,755  

Receivable for investments sold

    270,078  

Receivable for Fund shares sold

    218,306  

Receivable for interest

    6,060,347  

Prepaid expenses and other assets

    4,156  
 

 

 

 

Total assets

    551,109,391  
 

 

 

 

Liabilities

 

Payable for investments purchased

    3,349,405  

Payable for Fund shares redeemed

    1,220,507  

Management fee payable

    167,368  

Dividends payable

    291,860  

Administration fees payable

    49,215  

Distribution fee payable

    10,454  

Trustees’ fees and expenses payable

    4,225  

Accrued expenses and other liabilities

    76,224  
 

 

 

 

Total liabilities

    5,169,258  
 

 

 

 

Total net assets

  $ 545,940,133  
 

 

 

 

Net assets consist of

 

Paid-in capital

  $ 535,941,915  

Total distributable earnings

    9,998,218  
 

 

 

 

Total net assets

  $ 545,940,133  
 

 

 

 

Computation of net asset value and offering price per share

 

Net assets – Class A

  $ 111,376,085  

Shares outstanding – Class A1

    10,339,242  

Net asset value per share – Class A

    $10.77  

Maximum offering price per share – Class A2

    $10.99  

Net assets – Class C

  $ 15,696,302  

Shares outstanding – Class C1

    1,457,356  

Net asset value per share – Class C

    $10.77  

Net assets – Administrator Class

  $ 85,647,315  

Shares outstanding – Administrator Class1

    8,073,641  

Net asset value per share – Administrator Class

    $10.61  

Net assets – Institutional Class

  $ 333,220,431  

Shares outstanding – Institutional Class1

    31,430,566  

Net asset value per share – Institutional Class

    $10.60  

 

 

1 

The Fund has an unlimited number of authorized shares.

 

2 

Maximum offering price is computed as 100/98 of net asset value. On investments of $50,000 or more, the offering price is reduced.

 

The accompanying notes are an integral part of these financial statements.

 

 

18  |  Wells Fargo California Limited-Term Tax-Free Fund


Statement of operations—six months ended December 31, 2019 (unaudited)

 

         

Investment income

 

Interest

  $ 7,179,512  

Income from affiliated securities

    16,272  
 

 

 

 

Total investment income

    7,195,784  
 

 

 

 

Expenses

 

Management fee

    1,127,089  

Administration fees

 

Class A

    87,951  

Class C

    14,181  

Administrator Class

    54,719  

Institutional Class

    132,125  

Shareholder servicing fees

 

Class A

    137,423  

Class C

    22,158  

Administrator Class

    136,797  

Distribution fee

 

Class C

    66,456  

Custody and accounting fees

    7,130  

Professional fees

    23,033  

Registration fees

    45,908  

Shareholder report expenses

    15,229  

Trustees’ fees and expenses

    10,804  

Other fees and expenses

    7,622  
 

 

 

 

Total expenses

    1,888,625  

Less: Fee waivers and/or expense reimbursements

 

Fund-level

    (64,277

Class A

    (7,938

Class C

    (1,190

Administrator Class

    (84,334
 

 

 

 

Net expenses

    1,730,886  
 

 

 

 

Net investment income

    5,464,898  
 

 

 

 

Realized and unrealized gains (losses) on investments

 

Net realized gains (losses) on

 

Unaffiliated securities

    138,721  

Affiliated securities

    (231
 

 

 

 

Net realized gains on investments

    138,490  

Net change in unrealized gains (losses) on investments

    428,811  
 

 

 

 

Net realized and unrealized gains (losses) on investments

    567,301  
 

 

 

 

Net increase in net assets resulting from operations

  $ 6,032,199  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  19


Statement of changes in net assets

 

     Six months ended
December 31, 2019
(unaudited)
    Year ended
June 30, 2019
 

Operations

       

Net investment income

    $ 5,464,898       $ 11,668,055  

Net realized gains (losses) on investments

      138,490         (373,415

Net change in unrealized gains (losses) on investments

      428,811         7,937,606  
 

 

 

 

Net increase in net assets resulting from operations

      6,032,199         19,232,246  
 

 

 

 

Distributions to shareholders from net investment income and net realized gains

       

Class A

      (955,393       (2,134,113

Class C

      (87,472       (259,977

Administrator Class

      (1,061,340       (2,322,335

Institutional Class

      (3,364,766       (6,949,628
 

 

 

 

Total distributions to shareholders

      (5,468,971       (11,666,053
 

 

 

 

Capital share transactions

    Shares         Shares    

Proceeds from shares sold

       

Class A

    1,481,196       15,979,892       1,420,606       15,083,751  

Class C

    72,234       780,143       57,265       608,051  

Administrator Class

    1,608,937       17,090,371       3,778,231       39,543,664  

Institutional Class

    7,010,381       74,419,994       18,976,610       198,518,558  
 

 

 

 
      108,270,400         253,754,024  
 

 

 

 

Reinvestment of distributions

       

Class A

    80,605       869,238       174,915       1,858,738  

Class C

    7,447       80,325       22,692       240,998  

Administrator Class

    99,328       1,054,971       221,324       2,316,258  

Institutional Class

    163,607       1,736,530       318,708       3,334,607  
 

 

 

 
      3,741,064         7,750,601  
 

 

 

 

Payment for shares redeemed

       

Class A

    (680,466     (7,335,810     (3,417,410     (36,369,774

Class C

    (474,786     (5,123,189     (760,735     (8,078,258

Administrator Class

    (3,872,896     (41,077,732     (6,547,996     (68,431,582

Institutional Class

    (6,175,905     (65,548,398     (20,085,267     (209,818,936
 

 

 

 
      (119,085,129       (322,698,550
 

 

 

 

Net decrease in net assets resulting from capital share transactions

      (7,073,665       (61,193,925
 

 

 

 

Total decrease in net assets

      (6,510,437       (53,627,732
 

 

 

 

Net assets

       

Beginning of period

      552,450,570         606,078,302  
 

 

 

 

End of period

    $ 545,940,133       $ 552,450,570  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

20  |  Wells Fargo California Limited-Term Tax-Free Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS A   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $10.76       $10.61       $10.79       $11.04       $10.83       $10.86  

Net investment income

    0.09       0.20       0.19       0.18       0.17       0.16  

Net realized and unrealized gains (losses) on investments

    0.01       0.15       (0.18     (0.25     0.21       (0.03
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.10       0.35       0.01       (0.07     0.38       0.13  

Distributions to shareholders from

           

Net investment income

    (0.09     (0.20     (0.19     (0.18     (0.17     (0.16

Net asset value, end of period

    $10.77       $10.76       $10.61       $10.79       $11.04       $10.83  

Total return1

    0.97     3.33     0.05     (0.64 )%      3.54     1.22

Ratios to average net assets (annualized)

           

Gross expenses

    0.85     0.85     0.84     0.83     0.83     0.82

Net expenses

    0.80     0.80     0.80     0.80     0.80     0.80

Net investment income

    1.74     1.87     1.73     1.65     1.56     1.49

Supplemental data

           

Portfolio turnover rate

    11     11     45     21     21     31

Net assets, end of period (000s omitted)

    $111,376       $101,765       $119,657       $148,933       $196,629       $198,402  

 

 

 

 

1 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  21


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS C   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $10.76       $10.61       $10.79       $11.04       $10.83       $10.86  

Net investment income

    0.05 1      0.12       0.11       0.10       0.09       0.08  

Net realized and unrealized gains (losses) on investments

    0.01       0.15       (0.18     (0.25     0.21       (0.03
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.06       0.27       (0.07     (0.15     0.30       0.05  

Distributions to shareholders from

           

Net investment income

    (0.05     (0.12     (0.11     (0.10     (0.09     (0.08

Net asset value, end of period

    $10.77       $10.76       $10.61       $10.79       $11.04       $10.83  

Total return2

    0.59     2.56     (0.70 )%      (1.38 )%      2.76     0.47

Ratios to average net assets (annualized)

           

Gross expenses

    1.60     1.60     1.59     1.58     1.58     1.57

Net expenses

    1.55     1.55     1.55     1.55     1.55     1.55

Net investment income

    0.99     1.12     0.98     0.90     0.81     0.74

Supplemental data

           

Portfolio turnover rate

    11     11     45     21     21     31

Net assets, end of period (000s omitted)

    $15,696       $19,929       $26,868       $34,113       $40,098       $33,996  

 

 

 

 

1 

Calculated based upon average shares outstanding

 

2 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

22  |  Wells Fargo California Limited-Term Tax-Free Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
ADMINISTRATOR CLASS   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $10.60       $10.45       $10.63       $10.87       $10.66       $10.70  

Net investment income

    0.10 1       0.22       0.20 1       0.20       0.19       0.18  

Net realized and unrealized gains (losses) on investments

    0.01       0.15       (0.18     (0.24     0.21       (0.04
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.11       0.37       0.02       (0.04     0.40       0.14  

Distributions to shareholders from

           

Net investment income

    (0.10     (0.22     (0.20     (0.20     (0.19     (0.18

Net asset value, end of period

    $10.61       $10.60       $10.45       $10.63       $10.87       $10.66  

Total return2

    1.07     3.56     0.23     (0.38 )%      3.78     1.33

Ratios to average net assets (annualized)

           

Gross expenses

    0.79     0.79     0.78     0.77     0.77     0.76

Net expenses

    0.60     0.60     0.60     0.60     0.60     0.60

Net investment income

    1.94     2.07     1.93     1.84     1.75     1.69

Supplemental data

           

Portfolio turnover rate

    11     11     45     21     21     31

Net assets, end of period (000s omitted)

    $85,647       $108,484       $133,581       $162,747       $226,581       $309,120  

 

 

 

 

1 

Calculated based upon average shares outstanding

 

2 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  23


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
INSTITUTIONAL CLASS   2019     2018     2017     2016     20151  

Net asset value, beginning of period

    $10.59       $10.44       $10.62       $10.86       $10.66       $10.75  

Net investment income

    0.11       0.23       0.21       0.21       0.20       0.13  

Net realized and unrealized gains (losses) on investments

    0.01       0.15       (0.18     (0.24     0.20       (0.09
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.12       0.38       0.03       (0.03     0.40       0.04  

Distributions to shareholders from

           

Net investment income

    (0.11     (0.23     (0.21     (0.21     (0.20     (0.13

Net asset value, end of period

    $10.60       $10.59       $10.44       $10.62       $10.86       $10.66  

Total return2

    1.12     3.66     0.33     (0.28 )%      3.79     0.35

Ratios to average net assets (annualized)

           

Gross expenses

    0.52     0.52     0.51     0.50     0.50     0.50

Net expenses

    0.50     0.50     0.50     0.50     0.50     0.50

Net investment income

    2.04     2.17     2.03     1.95     1.86     1.82

Supplemental data

           

Portfolio turnover rate

    11     11     45     21     21     31

Net assets, end of period (000s omitted)

    $333,220       $322,273       $325,973       $370,824       $351,080       $280,061  

 

 

 

 

1 

For the period from October 31, 2014 (commencement of class operations) to June 30, 2015

 

2 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

24  |  Wells Fargo California Limited-Term Tax-Free Fund


Notes to financial statements (unaudited)

 

1. ORGANIZATION

Wells Fargo Funds Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Wells Fargo California Limited-Term Tax-Free Fund (the “Fund”) which is a diversified series of the Trust.

2. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Securities valuation

All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.

Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

Futures contracts that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.

Investment in registered open-end investment 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 in good faith by the Board of Trustees of the Fund. The Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities, unless the determination has been delegated to the Wells Fargo Asset Management Pricing Committee at Wells Fargo Funds Management, LLC (“Funds Management”). The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Valuation Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees receives reports on any valuation actions taken by the Valuation Committee or the Wells Fargo Asset Management Pricing Committee which may include items for ratification.

When-issued transactions

The Fund may purchase securities on a forward commitment or when-issued basis. The Fund records a when-issued transaction on the trade date and will segregate assets in an amount at least equal in value to the Fund’s commitment to purchase when-issued securities. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

Futures contracts

Futures contracts are agreements between the Fund and a counterparty to buy or sell a specific amount of a commodity, financial instrument or currency at a specified price and on a specified date. The Fund may buy and sell futures contracts in order to gain exposure to, or protect against, changes in interest rates and is subject to interest rate risk. 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 generally entered into on a regulated futures exchange and cleared through a clearinghouse associated with the exchange. With futures contracts, there is minimal counterparty risk to the Fund since futures contracts are exchange traded and the exchange’s clearinghouse, as the counterparty to all exchange traded futures, guarantees the futures contracts against default.

Upon entering into a futures contracts, the Fund is required to deposit either cash or securities (initial margin) with the broker in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are paid to or from the broker each day equal to the daily changes in the contract value. Such payments are recorded as unrealized gains or losses and, if any, shown as variation margin receivable (payable) in the Statement of Assets and Liabilities. Should the Fund fail to make requested variation margin payments, the broker can gain access to the initial margin to satisfy the Fund’s payment obligations. When the contracts are closed, a realized gain or loss is recorded in the Statement of Operations.

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  25


Notes to financial statements (unaudited)

 

Security transactions and income recognition

Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. 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 been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Distributions to shareholders

Distributions to shareholders from net investment income are declared daily and paid monthly. Distributions from net realized gains, if any, are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.

Federal and other taxes

The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable and tax-exempt income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.

The 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. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

As of December 31, 2019, the aggregate cost of all investments for federal income tax purposes was $527,288,888 and the unrealized gains (losses) consisted of:

 

Gross unrealized gains

   $ 17,587,680  

Gross unrealized losses

     (320,064

Net unrealized gains

   $ 17,267,616  

As of June 30, 2019, the Fund had capital loss carryforwards which consisted of $6,762,696 in short-term capital losses and $1,013,978 in long-term capital losses.

Class allocations

The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.

3. FAIR VALUATION MEASUREMENTS

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:

 

 

Level 1 – quoted prices in active markets for identical securities

 

 

Level 2 – other significant observable inputs (including quoted prices for similar securities, 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 investments in securities are not necessarily an indication of the risk associated with investing in those securities.

 

 

26  |  Wells Fargo California Limited-Term Tax-Free Fund


Notes to financial statements (unaudited)

 

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of December 31, 2019:

 

      Quoted prices
(Level 1)
     Other significant
observable inputs
(Level 2)
    

Significant
unobservable inputs

(Level 3)

     Total  

Assets

           

Investments in:

           

Municipal obligations

   $ 0      $ 543,898,749      $ 0      $ 543,898,749  

Short-term investments

           

Investment companies

     657,755        0        0        657,755  

Total assets

   $ 657,755      $ 543,898,749      $ 0      $ 544,556,504  

Additional sector, industry or geographic detail is included in the Portfolio of Investments.

For the six months ended December 31, 2019, the Fund did not have any transfers into/out of Level 3.

4. TRANSACTIONS WITH AFFILIATES

Management fee

Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”), is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:

 

Average daily net assets    Management fee  

First $500 million

     0.400

Next $500 million

     0.375  

Next $2 billion

     0.350  

Next $2 billion

     0.325  

Next $5 billion

     0.290  

Over $10 billion

     0.280  

For the six months ended December 31, 2019, the management fee was equivalent to an annual rate of 0.40% of the Fund’s average daily net assets.

Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Funds Management. Wells Capital Management Incorporated, an affiliate of Funds Management and an indirect wholly owned subsidiary of Wells Fargo, is the subadviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.15% and declining to 0.05% as the average daily net assets of the Fund increase.

Administration fees

Under a class-level administration agreement, Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:

 

      Class-level
administration fee
 

Class A, Class C

     0.16

Administrator Class

     0.10  

Institutional Class

     0.08  

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  27


Notes to financial statements (unaudited)

 

Waivers and/or expense reimbursements

Funds Management has contractually waived and/or reimbursed management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Funds Management has waived fees and/or reimbursed expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Funds Management has committed through October 31, 2020 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s expenses at 0.80% for Class A shares, 1.55% for Class C shares, 0.60% for Administrator Class shares, and 0.50% for Institutional Class shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.

Distribution fee

The Trust has adopted a distribution plan for Class C shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Wells Fargo Funds Distributor, LLC (“Funds Distributor”), the principal underwriter, at an annual rate of 0.75% of the average daily net assets of Class C shares.

In addition, Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the six months ended December 31, 2019, Funds Distributor received $306 from the sale of Class A shares. No contingent deferred sales charges were incurred by Class A and Class C shares for the six months ended December 31, 2019.

Shareholder servicing fees

The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A, Class C, and Administrator Class of the Fund are charged a fee at an annual rate of 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of Wells Fargo.

Interfund transactions

The Fund may purchase or sell portfolio investment securities to certain other Wells Fargo affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund had $17,805,000 and $28,245,000 in interfund purchases and sales, respectively, during the six months ended December 31, 2019.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended December 31, 2019 were $61,630,981 and $64,740,245, respectively.

6. BANK BORROWINGS

The Trust (excluding the money market funds), Wells Fargo Master Trust and Wells Fargo Variable Trust are parties to a $280,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the 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, an annual commitment fee equal to 0.25% of the unused balance is allocated to each participating fund.

For the six months ended December 31, 2019, there were no borrowings by the Fund under the agreement.

7. CONCENTRATION RISK

The Fund invests a substantial portion of its assets in issuers of municipal debt securities located in a single state or territory of the U.S. Therefore, it may be more affected by economic and political developments in that state or region than would be a comparable general tax-exempt fund.

8. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and Trustees have been granted certain indemnification rights 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 Fund and, therefore, cannot be estimated.

 

 

28  |  Wells Fargo California Limited-Term Tax-Free Fund


Notes to financial statements (unaudited)

 

9. NEW ACCOUNTING PRONOUNCEMENTS

In August 2018, FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 updates the disclosure requirements for fair value measurements by modifying or removing certain disclosures and adding certain new disclosures. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Management has adopted the removal and modification of disclosures early, as permitted, and will adopt the additional new disclosures at the effective date.

In March 2017, FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium and requires the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount and discounts will continue to be accreted to the maturity date of the security. ASU 2017-08 is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years. During the current reporting period, management of the Fund adopted the change in accounting policy which did not have a material impact to the Fund’s financial statements.

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  29


Other information (unaudited)

 

PROXY VOTING INFORMATION

A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available, upon request, by calling 1-800-222-8222, visiting our website at wfam.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at wfam.com or by visiting the SEC website at sec.gov.

QUARTERLY PORTFOLIO HOLDINGS INFORMATION

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.

 

 

30  |  Wells Fargo California Limited-Term Tax-Free Fund


Other information (unaudited)

 

BOARD OF TRUSTEES AND OFFICERS    

Each of the Trustees and Officers1 listed in the table below acts in identical capacities for each fund in the Wells Fargo family of funds, which consists of 149 mutual funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information2. 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    

 

Name and

year of birth

  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships

William R. Ebsworth

(Born 1957)

  Trustee, since 2015   Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Endowment (non-profit organization). Mr. Ebsworth is a CFA® charterholder.   N/A

Jane A. Freeman

(Born 1953)

  Trustee, since 2015; Chair Liaison, since 2018   Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is a Board Member of The Ruth Bancroft Garden (non-profit organization). She is also an inactive Chartered Financial Analyst.   N/A

Isaiah Harris, Jr.

(Born 1952)

  Trustee, since 2009; Audit Committee Chairman, since 2019   Retired. Chairman of the Board of CIGNA Corporation since 2009, and Director since 2005. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Child Evangelism Fellowship (non-profit). Mr. Harris is a certified public accountant (inactive status).   CIGNA Corporation

Judith M. Johnson

(Born 1949)

  Trustee, since 2008; Audit Committee Chairman, from 2009 to 2018   Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.   N/A

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  31


Other information (unaudited)

 

Name and

year of birth

  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships

David F. Larcker

(Born 1950)

  Trustee, since 2009   James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.   N/A

Olivia S. Mitchell

(Born 1953)

  Trustee, since 2006; Nominating and Governance Committee Chair, since 2018   International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993.   N/A

Timothy J. Penny

(Born 1951)

  Trustee, since 1996; Chairman, since 2018   President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.   N/A

James G. Polisson

(Born 1959)

  Trustee, since 2018   Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations.   N/A

Pamela Wheelock3

(Born 1959)

  Trustee, since January 2020; previously Trustee from January 2018 to July 2019   Board member of the Destination Medical Center Economic Development Agency, Rochester, Minnesota since 2019. Acting Commissioner, Minnesota Department of Human Services, July 2019 through September 2019. Human Services Manager (part-time), Minnesota Department of Human Services, October 2019 through December 2019. Chief Operating Officer, Twin Cities Habitat for Humanity from 2017 to 2019. Vice President of University Services, University of Minnesota from 2012 to 2016. Prior thereto, on the Board of Directors, Governance Committee and Finance Committee for the Minnesota Philanthropy Partners (Saint Paul Foundation) from 2012 to 2018, Interim Chief Executive Officer of Blue Cross Blue Shield of Minnesota from 2011 to 2012, Chairman of the Board from 2009 to 2012 and Board Director from 2003 to 2015. Vice President, Leadership and Community Engagement, Bush Foundation, Saint Paul, Minnesota (a private foundation) from 2009 to 2011. Executive Vice President and Chief Financial Officer, Minnesota Sports and Entertainment from 2004 to 2009 and Senior Vice President from 2002 to 2004. Executive Vice President of the Minnesota Wild Foundation from 2004 to 2008. Commissioner of Finance, State of Minnesota, from 1999 to 2002. Currently Board Chair of the Minnesota Wild Foundation since 2010.   N/A

 

*

Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.    

 

 

32  |  Wells Fargo California Limited-Term Tax-Free Fund


Other information (unaudited)

 

Officers    

 

Name and

year of birth

  Position held and
length of service
  Principal occupations during past five years or longer

Andrew Owen

(Born 1960)

  President, since 2017   Executive Vice President of Wells Fargo & Company and Head of Affiliated Managers, Wells Fargo Asset Management, since 2014. In addition, Mr. Owen is currently President, Chief Executive Officer and Director of Wells Fargo Funds Management, LLC since 2017. Prior thereto, Executive Vice President responsible for marketing, investments and product development for Wells Fargo Funds Management, LLC, from 2009 to 2014.

Nancy Wiser1

(Born 1967)

  Treasurer, since 2012   Executive Vice President of Wells Fargo Funds Management, LLC since 2011. Chief Operating Officer and Chief Compliance Officer at LightBox Capital Management LLC, from 2008 to 2011.

Michelle Rhee4

(Born 1966)

  Chief Legal Officer, since 2019   Secretary of Wells Fargo Funds Management, LLC, Chief Legal Counsel of Wells Fargo Asset Management and Assistant General Counsel of Wells Fargo Bank, N.A. since 2018. Associate General Counsel and Managing Director of Bank of America Corporation from 2004 to 2018.

Catherine Kennedy5

(Born 1969)

  Secretary, since 2019   Vice President of Wells Fargo Funds Management, LLC and Senior Counsel of the Wells Fargo Legal Department since 2010. Vice President and Senior Counsel of Evergreen Investment Management Company, LLC from 1998 to 2010.

Michael H. Whitaker

(Born 1967)

  Chief Compliance Officer, since 2016   Chief Compliance Officer of Wells Fargo Asset Management since 2016. Senior Vice President and Chief Compliance Officer for Fidelity Investments from 2007 to 2016.

David Berardi

(Born 1975)

  Assistant Treasurer, since 2009   Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.

Jeremy DePalma1

(Born 1974)

  Assistant Treasurer, since 2009   Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.

 

 

1

Nancy Wiser acts as Treasurer of 64 funds in the Fund Complex. Jeremy DePalma acts as Treasurer of 85 funds and Assistant Treasurer of 64 funds in the Fund Complex.

 

2

The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at wfam.com.    

 

3 

Pamela Wheelock was re-appointed to the Board effective January 1, 2020.

 

4 

Michelle Rhee became Chief Legal Officer effective October 22, 2019.

 

5 

Catherine Kennedy became Secretary effective October 22, 2019.

 

 

Wells Fargo California Limited-Term Tax-Free Fund  |  33


Appendix (unaudited)

 

Effective on or about May 1, 2020, if you purchase Fund shares through a Janney Montgomery Scott LLC (“Janney”) brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge (“CDSC”), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in the Fund’s Prospectus or SAI.

 

Front-end sales charge* waivers on Class A shares available at Janney
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).
Shares purchased by employees and registered representatives of Janney or its affiliates and their family members as designated by Janney.
Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within ninety (90) days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., right of reinstatement).
Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
Shares acquired through a right of reinstatement.
Class C shares that are no longer subject to a contingent deferred sales charge and are converted to Class A shares of the same fund pursuant to Janney’s policies and procedures.
CDSC waivers on Class A and Class C shares available at Janney
Shares sold upon the death or disability of the shareholder.
Shares sold as part of a systematic withdrawal plan as described in the Fund’s Prospectus.
Shares purchased in connection with a return of excess contributions from an IRA account.
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRS regulations.
Shares sold to pay Janney fees but only if the transaction is initiated by Janney.
Shares acquired through a right of reinstatement.
Shares exchanged into the same share class of a different fund.
Front-end sales charge* discounts available at Janney; breakpoints, rights of accumulation and/or letters of intent
Breakpoints as described in the Fund’s Prospectus.
Rights of accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Janney. Eligible fund family assets not held at Janney may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.
Letters of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Janney Montgomery Scott may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.

 

*

Also referred to as an “initial sales charge.”

 

 

34  |  Wells Fargo California Limited-Term Tax-Free Fund


 

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LOGO

For more information

More information about Wells Fargo Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:

Wells Fargo Funds

P.O. Box 219967

Kansas City, MO 64121-9967

Website: wfam.com

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

 

LOGO

 

This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-222-8222 or visit the Fund’s website at wfam.com. Read the prospectus carefully before you invest or send money.

Wells Fargo Asset Management (WFAM) is the trade name for certain investment advisory/management firms owned by Wells Fargo & Company. These firms include but are not limited to Wells Capital Management Incorporated and Wells Fargo Funds Management, LLC. Certain products managed by WFAM entities are distributed by Wells Fargo Funds Distributor, LLC (a broker-dealer and Member FINRA).

This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind—including a recommendation for any specific investment, strategy, or plan.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE     MAY LOSE VALUE


© 2020 Wells Fargo & Company. All rights reserved.

PAR-0120-02387 02-20

SA248/SAR248 12-19

 

 



LOGO

Semi-Annual Report

December 31, 2019

 

Wells Fargo

Intermediate Tax/AMT-Free Fund

 

 

 

 

Beginning on January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, paper copies of the Wells Fargo Funds’ annual and semi-annual shareholder reports issued after this date will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-222-8222 or by enrolling at wellsfargo.com/advantagedelivery.

You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call 1-800-222-8222. Your election to receive reports in paper will apply to all Wells Fargo Funds held in your account with your financial intermediary or, if you are a direct investor, to all Wells Fargo Funds that you hold.


 

 

Reduce clutter.

Save trees.

Sign up for electronic delivery of prospectuses and shareholder reports at wellsfargo.com/advantagedelivery

 

The views expressed and any forward-looking statements are as of December 31, 2019, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Asset Management. Discussions of individual securities, or the markets generally, or any Wells Fargo Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Asset Management and the Fund disclaim any obligation to publicly update or revise any views expressed or forward-looking statements.

 

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE    MAY LOSE VALUE


 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  1


Letter to shareholders (unaudited)

 

LOGO

Andrew Owen

President

Wells Fargo Funds

“After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July.”

Dear Shareholder:

We are pleased to offer you this semi-annual report for the Wells Fargo Intermediate Tax/AMT-Free Fund for the six-month period that ended December 31, 2019. Despite periods of market volatility, the year was strongly positive for financial markets as supportive central banks more than offset concerns over slowing global economic growth and international trade tensions.

Overall, both fixed-income and equity investors enjoyed healthy returns. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 10.92% and international stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned 6.96%. The MSCI EM Index (Net)3 gained 7.09%. For bond investors, the Bloomberg Barclays U.S. Aggregate Bond Index4 added 2.45%, the Bloomberg Barclays Global Aggregate ex-USD Index5 returned 0.09%, the Bloomberg Barclays Municipal Bond Index6 gained 2.32%, and the ICE BofA U.S. High Yield Index7 added 3.86%.

Sentiment turned positive, driven by central bank support.

After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July. The gains, primarily driven by geopolitical and monetary policy events, pushed equity markets to new highs. European Central Bank President Mario Draghi indicated the bank was ready to cut rates or buy more assets to prop up inflation if needed. President Trump backed off of tariff threats against Mexico and China. The U.S. Federal Reserve (Fed) implemented a 0.25% federal funds rate cut in July.

Throughout the summer, U.S.-China trade tensions simmered. Major U.S. stock market indices closed July with the worst weekly results of the year. Bond prices gained as Treasury yields fell to multiyear lows, and the yield curve inverted at multiple points along the 30-year arc.

Evidence of a continued global economic slowdown mounted, and central banks in China, New Zealand, and Thailand cut interest rates. Industrial and manufacturing data declined in China, Canada, Japan, and Germany. Adding to global uncertainty, Italy’s prime minister resigned, many feared a crackdown in Hong Kong as protestors sustained their calls for reform, and Boris Johnson planned to suspend Parliament as Brexit’s deadline neared.

In the U.S., the Fed cut interest rates a second time in September. U.S. manufacturing data disappointed investors. The U.S. Congress announced it would pursue an impeachment investigation of President Trump. Meanwhile, the Brexit impasse showed no signs of resolution. Officials in China warned of the negative economic impact of tariffs and trade restrictions. Although the S&P 500 Index finished the third quarter with the best year-to-date returns in more than 20 years, concerns about future returns remained.

 

 

 

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 Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the United States. 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. You cannot invest directly in an index.

 

3 

The MSCI Emerging Markets (EM) Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index.

 

4

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index.

 

5

The Bloomberg Barclays Global Aggregate ex-USD Index is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S. dollar-denominated debt market. You cannot invest directly in an index.

 

6 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

7

The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2020. ICE Data Indices, LLC. All rights reserved.

 

 

2  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Letter to shareholders (unaudited)

 

The fourth quarter started on a strong note, with a relaxing of U.S.-China trade tensions in October along with renewed optimism for a U.K. Brexit deal and positive macroeconomic data. The initial estimate of U.S. third-quarter gross domestic product growth was a 1.9% annualized rate, while the U.S. unemployment rate fell to a 50-year low of 3.5% in September. However, despite resilience among U.S. consumers, business confidence declined while manufacturing activity contracted. Concerned with a potential economic slowdown, the Fed lowered interest rates another quarter point in late October, its third rate cut in four months. This helped push the S&P 500 Index to a new all-time high, while emerging market equities rallied and global bonds declined overall, reflecting a broad pickup in risk appetite.

Equity markets continued to rally in November despite ongoing geopolitical risks. Hopes for a U.S.-China trade deal buoyed investor confidence. U.S. business sentiment improved slightly, and manufacturing and services activity picked up. Throughout the month, central bank actions were on hold. With that positive backdrop, developed market equities outpaced those in emerging markets, and U.S. stocks outperformed non-U.S. stocks overall. While consumer confidence and purchasing manager activity rose in the eurozone, China reported weakening manufacturing and consumer data. Bond yields rose marginally, leading to slightly negative returns for global government and investment-grade corporate bonds.

Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal, with some details to be worked out. That, along with the landslide election win by the pro-Brexit U.K. Conservative Party and ongoing central bank support, gave investors a greater sense of certainty. U.S. economic indicators were broadly positive, with the exception of manufacturing activity and business confidence. Consumer confidence was resilient, fed by a robust labor market, tame inflation, and lower interest rates, which boosted housing affordability and homebuyer activity. The impeachment of U.S. President Donald Trump, while historically noteworthy, had little impact on markets. Meanwhile, slowing Chinese economic activity, due in part to the trade war, led to further government stimulus at year-end through lower reserve ratios, allowing banks to lend more money.

Don’t let short-term uncertainty derail long-term investment goals.

Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.

Thank you for choosing to invest with Wells Fargo Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.

Sincerely,

 

LOGO

Andrew Owen

President

Wells Fargo Funds

 

“Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal”

 

 

For further information about your Fund, contact your investment professional, visit our website at wfam.com,

or call us directly at 1-800-222-8222.

 

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  3


Performance highlights (unaudited)

 

Investment objective

The Fund seeks current income exempt from federal income tax.

Manager

Wells Fargo Funds Management, LLC

Subadviser

Wells Capital Management Incorporated

Portfolio managers

Bruce R. Johns

Robert J. Miller

Adrian Van Poppel

Average annual total returns (%) as of December 31, 2019

 

 
        Including sales charge     Excluding sales charge     Expense ratios1 (%)  
 
    Inception date   1 year     5 year     10 year     1 year     5 year     10 year     Gross     Net2  
                   
Class A (WFTAX)   7-31-2007     2.77       1.82       3.35       5.95       2.45       3.66       0.80       0.70  
                   
Class C (WFTFX)   7-31-2007     4.16       1.68       2.89       5.16       1.68       2.89       1.55       1.45  
                   
Class R6 (WFRTX)3   7-31-2018                       6.35       2.74       3.95       0.42       0.40  
                   
Administrator Class (WFITX)   3-31-2008                       6.14       2.55       3.76       0.74       0.60  
                   
Institutional Class (WITIX)   3-31-2008                       6.30       2.72       3.95       0.47       0.45  
                   
Bloomberg Barclays Municipal Bond 1-15 Year Blend Index4                         6.44       3.01       3.66              

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, wfam.com.

Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.

For Class A shares, the maximum front-end sales charge is 3.00%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Class R6, Administrator Class, and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.

Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. High-yield securities have a greater risk of default and tend to be more volatile than higher-rated debt securities. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). The Fund is exposed to municipal securities risk. Consult the Fund’s prospectus for additional information on these and other risks. A portion of the Fund’s income may be subject to federal, state, and/or local income taxes or the Alternative Minimum Tax (AMT). Any capital gains distributions may be taxable.

 

Please see footnotes on page 5.

 

 

4  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Performance highlights (unaudited)

 

Effective maturity distribution as of December 31, 20195

 

LOGO

 

Credit quality as of December 31, 20196
LOGO
 

 

 

1 

Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report.

 

2 

The manager has contractually committed through October 31, 2020, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.70% for Class A, 1.45% for Class C, 0.40% for Class R6, 0.60% for Administrator Class, and 0.45% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Without this cap, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses.

 

3 

Historical performance shown for Class R6 shares prior to their inception reflects the performance of the Institutional Class shares, and includes the higher expenses applicable to Institutional Class shares. If these expenses had not been included, returns for Class R6 shares would be higher.

 

4 

The Bloomberg Barclays Municipal Bond 1–15 Year Blend Index is the 1–15 year component of the Bloomberg Barclays Municipal Bond Index. The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

5 

Amounts are calculated based on the long-term total investments of the Fund. These amounts are subject to change and may have changed since the date specified.

 

6 

The credit quality distribution of portfolio holdings reflected in the chart is based on ratings from Standard & Poor’s, Moody’s Investors Service, and/ or Fitch Ratings Ltd. Credit quality ratings apply to the underlying holdings of the Fund and not to the Fund itself. The percentages of the Fund’s portfolio with the ratings depicted in the chart are calculated based on the total market value of fixed income securities held by the Fund. If a security was rated by all three rating agencies, the middle rating was utilized. If rated by two of three rating agencies, the lower rating was utilized, and if rated by one of the rating agencies, that rating was utilized. Standard & Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories. Standard & Poor’s rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody’s rates the creditworthiness of bonds, ranging from Aaa (highest) to C (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Moody’s rates the creditworthiness of short-term U.S. tax-exempt municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Credit quality distribution is subject to change and may have changed since the date specified.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  5


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 and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing 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 period from July 1, 2019 to December 31, 2019.

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) and contingent deferred sales charges. 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
account  value
7-1-2019
     Ending
account value
12-31-2019
     Expenses
paid during
the period¹
     Annualized net
expense ratio
 
         

Class A

           

Actual

   $ 1,000.00      $ 1,016.27      $ 3.55        0.70

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,021.62      $ 3.56        0.70
         

Class C

           

Actual

   $ 1,000.00      $ 1,012.44      $ 7.33        1.45

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,017.85      $ 7.35        1.45
         

Class R6

           

Actual

   $ 1,000.00      $ 1,018.66      $ 2.03        0.40

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,023.13      $ 2.03        0.40
         

Administrator Class

           

Actual

   $ 1,000.00      $ 1,016.77      $ 3.04        0.60

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.12      $ 3.05        0.60
         

Institutional Class

           

Actual

   $ 1,000.00      $ 1,017.53      $ 2.28        0.45

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.87      $ 2.29        0.45

 

1

Expenses paid is equal to the annualized net expense ratio of each class 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).

 

 

6  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Municipal Obligations: 99.15%          

Alabama: 0.71%

         
Education Revenue: 0.04%                          

Auburn AL Refunding Bond Series A

    4.00     6-1-2033      $ 1,000,000      $ 1,124,650  
         

 

 

 
Tax Revenue: 0.08%                          

Alabama Federal Aid Highway Finance Authority Series A

    5.00       9-1-2035        2,000,000        2,395,420  
         

 

 

 
Utilities Revenue: 0.59%                          

Southeast Alabama Gas Supply District Project #1 Series A

    4.00       4-1-2049        6,180,000        6,704,064  

Southeast Alabama Gas Supply District Project #2 Series B (1 Month LIBOR +0.85%) ±

    1.99       6-1-2049        10,000,000        10,016,200  
            16,720,264  
         

 

 

 
            20,240,334  
         

 

 

 

Alaska: 0.19%

         
Industrial Development Revenue: 0.04%                          

Valdez AK Marine Terminal BP Pipelines Project Series B

    5.00       1-1-2021        1,000,000        1,035,630  
         

 

 

 
Miscellaneous Revenue: 0.15%                          

Matanuska Susitna Borough AK Goose Creek Correctional Project

    4.00       9-1-2030        3,870,000        4,260,057  
         

 

 

 
            5,295,687  
         

 

 

 

Arizona: 1.82%

         
Education Revenue: 0.42%                          

Arizona Board of Regents University of Arizona System Series A

    5.00       6-1-2037        2,645,000        3,325,797  

McAllister AZ Arizona State University Hassayampa Academic Village Project

    5.00       7-1-2025        750,000        898,290  

Pima County AZ Community College District Series 2019

    5.00       7-1-2033        450,000        557,906  

Pima County AZ Community College District Series 2019

    5.00       7-1-2034        500,000        618,465  

Pima County AZ Community College District Series 2019

    5.00       7-1-2035        600,000        740,172  

Pima County AZ Community College District Series 2019

    5.00       7-1-2036        500,000        615,095  

Pima County AZ IDA New Plan Learning Project Series A

    7.00       7-1-2021        360,000        359,446  

Pima County AZ IDA New Plan Learning Project Series A

    7.75       7-1-2035        4,920,000        4,871,981  
            11,987,152  
         

 

 

 
GO Revenue: 0.36%                          

Estrella Mountain Ranch AZ Community Facilities District Refunding Bond (AGM Insured)

    5.00       7-15-2025        585,000        688,358  

Maricopa County AZ Elementary School District #28 Kyrene Elementary School Project 2010 Series B

    4.50       7-1-2024        1,575,000        1,760,378  

Maricopa County AZ Elementary School District #28 Kyrene Elementary School Project 2010 Series B

    4.50       7-1-2025        1,270,000        1,419,479  

Maricopa County AZ Elementary School District #28 Kyrene Elementary School Project 2010 Series B

    5.00       7-1-2027        420,000        476,620  

Maricopa County AZ Elementary School District #28 Kyrene Elementary School Project 2010 Series B

    5.50       7-1-2029        960,000        1,105,843  

Phoenix AZ

    5.00       7-1-2026        3,810,000        4,696,282  
            10,146,960  
         

 

 

 
Health Revenue: 0.04%                          

Maricopa County AZ IDA Bond

    5.00       1-1-2048        1,000,000        1,168,830  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  7


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue: 0.60%  

Arizona Refunding Bond Certificate of Participation

    5.00     9-1-2027      $ 3,040,000      $ 3,639,427  

Phoenix AZ Civic Improvement Corporation Series A

    5.00       7-1-2029        5,000,000        5,096,650  

Phoenix AZ Civic Improvement Corporation Series D

    5.00       7-1-2036        7,000,000        8,495,340  
     17,231,417  
  

 

 

 
Tax Revenue: 0.31%  

Arizona Sports & Tourism Authority Series A

    4.00       7-1-2020        1,365,000        1,382,022  

Arizona Sports & Tourism Authority Series A

    5.00       7-1-2021        795,000        834,273  

Arizona Sports & Tourism Authority Series A

    5.00       7-1-2022        1,000,000        1,081,240  

San Luis AZ Pledged Excise Tax Series A (BAM Insured)

    5.00       7-1-2027        450,000        518,693  

San Luis AZ Pledged Excise Tax Series A (BAM Insured)

    5.00       7-1-2028        700,000        804,608  

San Luis AZ Pledged Excise Tax Series A (BAM Insured)

    5.00       7-1-2034        3,680,000        4,184,749  
     8,805,585  
  

 

 

 
Utilities Revenue: 0.09%  

Salt River Project AZ Electric System Revenue Bond 2017 Series A

    5.00       1-1-2034        2,000,000        2,489,480  
         

 

 

 
     51,829,424  
  

 

 

 

Arkansas: 0.25%

 

Housing Revenue: 0.25%  

Arkansas Development Finance Authority MFHR Hickory View Apartments (HUD Insured)

    1.37       9-1-2023        3,000,000        2,996,070  

Arkansas Development Finance Authority MFHR Maple Place Apartments (HUD Insured)

    1.53       10-1-2023        4,000,000        4,003,360  
     6,999,430  
  

 

 

 

California: 7.06%

 

Airport Revenue: 0.16%  

Sacramento CA Airport System Senior Bond

    5.00       7-1-2025        2,000,000        2,039,460  

Sacramento CA Airport System Senior Bond Series B

    5.00       7-1-2032        600,000        753,924  

Sacramento CA Airport System Senior Bond Series B

    5.00       7-1-2033        500,000        625,225  

Sacramento CA Airport System Senior Bond Series B

    5.00       7-1-2034        1,000,000        1,247,560  
     4,666,169  
  

 

 

 
Education Revenue: 0.47%  

California Statewide CDA Series A

    6.90       8-1-2031        1,770,000        1,908,042  

University of California General Project Unrefunded Bond Series Q

    5.25       5-15-2024        65,000        65,220  

University of California Limited Project Prerefunded Bond Series G

    5.00       5-15-2037        5,180,000        5,671,012  

University of California Limited Project Unrefunded Bond Series G

    5.00       5-15-2037        5,210,000        5,658,842  
     13,303,116  
  

 

 

 
GO Revenue: 2.98%  

California

    5.25       3-1-2024        5,000,000        5,034,300  

California

    5.25       3-1-2030        1,440,000        1,449,994  

California

    6.00       3-1-2033        2,510,000        2,530,682  

California Refunding Bond

    5.00       4-1-2032        9,000,000        12,250,170  

California Various Purposes

    5.00       8-1-2030        1,500,000        1,836,540  

California Various Purposes

    5.00       8-1-2032        6,700,000        8,143,783  

Cerritos CA Community College District CAB Series D ¤

    0.00       8-1-2025        1,800,000        1,647,018  

Compton CA Community College District Election of 2002 CAB Series C ¤

    0.00       8-1-2029        1,565,000        1,248,573  

Compton CA Community College District Election of 2002 CAB Series C ¤

    0.00       8-1-2031        2,400,000        1,777,728  

Emery CA Unified School District Election of 2010 Series A (AGM Insured)

    6.25       8-1-2031        4,500,000        4,876,290  

 

The accompanying notes are an integral part of these financial statements.

 

 

8  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue (continued)  

Monterey County CA Alisal Union School District Series A (BAM Insured)

    5.25 %       8-1-2042      $ 1,500,000      $ 1,832,280  

New Haven CA Unified School District CAB Project (AGC Insured) ¤

    0.00       8-1-2033        5,590,000        4,006,129  

Northern Humboldt CA High School District Election of 2010 Series A

    6.50       8-1-2034        1,145,000        1,245,027  

Oakland CA Unified School District Alameda County Election of 2012

    6.25       8-1-2028        2,000,000        2,167,240  

Oakland CA Unified School District Alameda County Election of 2012

    6.25       8-1-2030        2,000,000        2,167,240  

Oxnard CA Unified School District Series A (National Insured)

    5.75       8-1-2030        1,825,000        2,058,874  

Patterson CA Unified School District CAB Election of 2008 Project Series B (AGM Insured) ¤

    0.00       8-1-2033        3,000,000        2,132,730  

Peralta CA Community College District Alameda County

    5.00       8-1-2023        3,045,000        3,345,846  

Peralta CA Community College District Alameda County

    5.00       8-1-2024        3,000,000        3,295,590  

Rio Hondo CA Community College District ¤

    0.00       8-1-2030        2,315,000        1,854,917  

San Diego CA Community College District Election of 2012

    5.00       8-1-2032        3,095,000        3,536,068  

San Diego CA Unified School District Election of 1998 Series E-2 (AGM Insured)

    5.50       7-1-2027        5,000,000        6,562,950  

Sylvan CA Unified School District CAB Election of 2006 (AGM Insured) ¤

    0.00       8-1-2031        2,590,000        1,978,631  

Sylvan CA Unified School District CAB Election of 2006 (AGM Insured) ¤

    0.00       8-1-2032        2,800,000        2,070,992  

Tustin CA Unified School District #88-1 Election of 2008 Series B

    6.00       8-1-2036        1,500,000        1,619,565  

West Contra Costa CA Unified School District Election of 2005 Series C-1 (AGC Insured) ¤

    0.00       8-1-2026        4,620,000        4,134,669  
     84,803,826  
  

 

 

 
Health Revenue: 1.11%  

California Municipal Finance Authority Institute of Aging Project

    5.00       8-15-2032        975,000        1,200,488  

California Municipal Finance Authority Institute of Aging Project

    5.00       8-15-2033        1,150,000        1,406,232  

California Statewide CDA Series C

    5.25       8-15-2031        3,000,000        3,198,870  

California Tender Option Bond Trust Receipts/Floater Certificates Series 2017-013 (Barclays Bank plc LOC, Barclays Bank plc LIQ) 144Aø

    1.73       8-15-2051        8,710,000        8,710,000  

University of California Medical Center Prerefunded Bond Series J

    5.25       5-15-2030        13,135,000        14,983,095  

University of California Medical Center Unrefunded Bond Series J

    5.25       5-15-2030        1,865,000        2,116,626  
     31,615,311  
  

 

 

 
Housing Revenue: 0.15%  

California HFA Municipal Certificates Series 2019 Class A

    4.00       3-20-2033        1,000,000        1,143,550  

Mizuho Tender Option Bond Trust Receipts/Floater Certificates Series 2019-MIZ9002 (Mizuho Bank Limited LOC) 144Aø

    1.81       3-1-2021        3,000,000        3,000,000  
     4,143,550  
  

 

 

 
Miscellaneous Revenue: 0.70%  

Anaheim CA PFA Convention Center Expansion Project Series A

    5.00       5-1-2039        2,500,000        2,854,400  

California Public Works Board Various Judicial Council Project Series D

    5.25       12-1-2026        1,000,000        1,079,020  

California Public Works University of California Board of Regents Series G

    5.00       12-1-2030        12,110,000        13,050,947  

Foothill De Anza CA Community College District Certificate of Participation

    5.00       4-1-2033        500,000        585,650  

Gold Coast Transit District California Transit Finance Corporation Certificate of Participation

    5.00       7-1-2027        520,000        645,351  

San Diego CA Public Facilities Financing Authority Capital Improvement Projects Series B

    5.00       10-15-2027        500,000        607,995  

San Diego CA Public Facilities Financing Authority Capital Improvement Projects Series B

    5.00       10-15-2028        1,000,000        1,213,490  
     20,036,853  
  

 

 

 
Tax Revenue: 0.05%  

San Jose CA RDA Series A-1

    5.50       8-1-2030        1,355,000        1,390,989  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  9


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Transportation Revenue: 0.36%  

Bay Area CA Toll Authority Toll Bridge Series A (SIFMA Municipal Swap +1.25%) ±

    2.86 %       4-1-2036      $ 9,810,000      $ 10,227,416  
         

 

 

 
Utilities Revenue: 0.73%  

California Municipal Finance Authority

    5.00       10-1-2025        1,500,000        1,830,495  

M-S-R California Energy Authority Gas Series B

    7.00       11-1-2034        2,000,000        3,060,820  

M-S-R California Energy Authority Gas Series C

    7.00       11-1-2034        3,000,000        4,591,230  

Northern California Power Agency Series A

    5.25       8-1-2023        5,150,000        5,167,459  

Sacramento CA Municipal Utility District Series B

    5.00       8-15-2030        1,075,000        1,219,996  

Southern California Public Power Authority Milford Wind Corridor Project #1

    5.00       7-1-2024        5,000,000        5,000,000  
     20,870,000  
  

 

 

 
Water & Sewer Revenue: 0.35%  

California Department of Water Resources Central Valley Project Series AT (SIFMA Municipal Swap +0.37%) ±

    1.98       12-1-2035        10,000,000        10,029,200  
         

 

 

 
     201,086,430  
  

 

 

 

Colorado: 0.94%

 

Education Revenue: 0.23%  

Colorado ECFA University of Denver Project (National Insured)

    5.25       3-1-2025        1,110,000        1,293,095  

Colorado University Enterprise and Refunding Bond Series C

    2.00       6-1-2054        5,000,000        5,133,850  
     6,426,945  
  

 

 

 
GO Revenue: 0.26%  

Adams County CO 12 Five Star Schools Series B

    5.00       12-15-2028        3,800,000        4,686,730  

Mesa County CO Valley School District # 51 Grand Junction

    5.50       12-1-2035        2,175,000        2,776,344  
     7,463,074  
  

 

 

 
Health Revenue: 0.10%  

Colorado Health Facilities Authority Series B-2

    5.00       8-1-2049        2,500,000        2,949,600  
         

 

 

 
Industrial Development Revenue: 0.12%  

Denver CO Convention Center Hotel Authority Refunding Bond

    5.00       12-1-2023        3,000,000        3,363,690  
         

 

 

 
Miscellaneous Revenue: 0.23%  

Adams County CO Refunding & Improvement Certificate of Participation

    5.00       12-1-2021        830,000        890,881  

Regents of the University of Colorado Certificate of Participation Series A

    5.00       11-1-2028        5,000,000        5,659,500  
     6,550,381  
  

 

 

 
     26,753,690  
  

 

 

 

Connecticut: 1.96%

 

Education Revenue: 0.76%  

Connecticut HEFAR University of Hartford Issue Series N

    5.00       7-1-2029        480,000        595,690  

Connecticut HEFAR University of Hartford Issue Series N

    5.00       7-1-2030        870,000        1,069,369  

Connecticut HEFAR Yale University Issue Series A

    2.05       7-1-2035        10,000,000        10,138,700  

Connecticut HEFAR Yale University Issue Series A-2

    2.00       7-1-2042        3,425,000        3,534,223  

University of Connecticut Series A

    5.00       3-15-2027        1,000,000        1,199,410  

University of Connecticut Series A

    5.00       3-15-2032        4,355,000        5,134,022  
     21,671,414  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

10  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue: 0.86%  

Connecticut Series A

    5.00 %       3-1-2029      $ 2,500,000      $ 2,835,150  

Connecticut Series B

    5.00       6-15-2027        3,000,000        3,541,590  

Connecticut Series F

    5.00       11-15-2032        300,000        352,017  

Hamden CT

    4.00       8-15-2020        1,235,000        1,256,711  

Hamden CT

    4.00       8-15-2021        1,235,000        1,291,205  

Hamden CT (AGM Insured)

    5.00       8-15-2022        1,000,000        1,095,370  

Hamden CT Prerefunded Bond (AGM Insured)

    5.00       8-15-2021        125,000        132,685  

Hamden CT Refunding Bond Series A (BAM Insured)

    5.00       8-15-2029        500,000        609,975  

Hamden CT Refunding Bond Series A (BAM Insured)

    5.00       8-15-2030        1,200,000        1,456,236  

Hamden CT Series A (BAM Insured)

    5.00       8-15-2026        2,000,000        2,418,700  

Hamden CT Series A (BAM Insured)

    5.00       8-15-2027        1,200,000        1,472,616  

Hamden CT Unrefunded Bond (AGM Insured)

    5.00       8-15-2021        875,000        925,741  

Hartford CT Series A (AGM Insured)

    5.00       4-1-2022        3,010,000        3,265,158  

Hartford CT Series A (AGM Insured)

    5.00       7-1-2026        1,000,000        1,183,440  

Hartford CT Series C (AGM Insured)

    5.00       7-15-2022        2,320,000        2,541,653  
     24,378,247  
  

 

 

 
Miscellaneous Revenue: 0.30%  

Connecticut Series A (SIFMA Municipal Swap +0.85%) ±

    2.46       3-1-2022        3,000,000        3,024,420  

Connecticut Series A (SIFMA Municipal Swap +1.25%) ±

    2.86       4-15-2020        3,300,000        3,308,910  

Connecticut Series G

    4.00       10-15-2026        1,985,000        2,114,204  
     8,447,534  
  

 

 

 
Tax Revenue: 0.04%  

Connecticut Special Tax Obligation Bonds Transportation Infrastructure Purposes Series A

    5.00       8-1-2030        1,000,000        1,172,230  
         

 

 

 
     55,669,425  
  

 

 

 

Delaware: 0.08%

 

Education Revenue: 0.08%  

Delaware EDA Odyssey Charter School Project Series B 144A

    6.75       9-1-2035        2,000,000        2,167,700  
         

 

 

 

District of Columbia: 1.26%

 

Education Revenue: 0.09%  

District of Columbia Howard University Series A

    5.75       10-1-2026        2,510,000        2,616,173  
         

 

 

 
GO Revenue: 0.50%  

District of Columbia Series 2014C

    5.00       6-1-2034        3,000,000        3,456,240  

District of Columbia Series 2014C

    5.00       6-1-2035        1,620,000        1,863,373  

District of Columbia Series 2016A

    5.00       6-1-2033        5,000,000        5,996,850  

District of Columbia Series 2017A

    5.00       6-1-2033        2,400,000        2,935,464  
     14,251,927  
  

 

 

 
Miscellaneous Revenue: 0.39%  

District of Columbia Federal Highway Grant Anticipation Bond

    5.00       12-1-2023        1,000,000        1,105,300  

District of Columbia Federal Highway Grant Anticipation Bond

    5.00       12-1-2025        3,520,000        3,873,654  

District of Columbia Federal Highway Grant Anticipation Bond

    5.25       12-1-2025        2,630,000        2,724,233  

District of Columbia Medical Association of Colleges Series B

    5.00       10-1-2024        3,095,000        3,289,521  
     10,992,708  
  

 

 

 
Transportation Revenue: 0.18%  

Washington Metropolitan Airport Authority Dulles Toll Road Series B

    5.00       10-1-2034        1,250,000        1,565,725  

Washington Metropolitan Area Transit Authority Series B

    5.00       7-1-2032        3,000,000        3,689,520  
     5,255,245  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  11


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Water & Sewer Revenue: 0.10%  

District of Columbia Water & Sewer Authority Public Utility Senior Lien Series A

    5.00 %       10-1-2037      $ 2,260,000      $ 2,800,773  
         

 

 

 
     35,916,826  
  

 

 

 

Florida: 4.06%

 

Airport Revenue: 0.09%  

Jacksonville FL Port Authority Series B

    5.00       11-1-2035        2,045,000        2,520,565  
         

 

 

 
Education Revenue: 0.05%  

Florida Development Finance Corporation Renaissance Charter School Series A

    5.00       9-15-2020        450,000        452,826  

Florida HEFAR

    4.00       4-1-2021        1,000,000        1,033,330  
     1,486,156  
  

 

 

 
GO Revenue: 0.05%  

Plantation FL Ad Valorem Bond

    5.00       7-1-2031        1,155,000        1,427,996  
         

 

 

 
Health Revenue: 0.50%  

ACTS Retirement Life Communities Incorporated Obligated Group Escambia County Health Facilities Authority Refunding Bonds Series 2003B (AGC Insured, TD Bank NA SPA) ø

    1.70       11-15-2029        2,220,000        2,220,000  

Florida Health System Lee Memorial Hospital Series A

    5.00       4-1-2036        4,500,000        5,495,580  

Florida Tender Option Bond Trust Receipts/Certificates Series 2018-XF2523 (Barclays Bank plc LIQ) 144Aø

    1.71       8-15-2047        4,000,000        4,000,000  

Miami-Dade County FL Health Facilities Authority Nicklaus Children’s Hospital Project

    5.00       8-1-2031        500,000        604,230  

Miami-Dade County FL Health Facilities Authority Nicklaus Children’s Hospital Project

    5.00       8-1-2033        1,645,000        1,977,718  
     14,297,528  
  

 

 

 
Miscellaneous Revenue: 1.93%  

Boynton FL PFA Capital Improvement Series 2018

    4.00       7-1-2030        2,090,000        2,355,953  

Boynton FL PFA Capital Improvement Series 2018

    5.00       7-1-2035        3,590,000        4,344,439  

Broward County FL School Board Certificate of Participation Series A

    5.00       7-1-2024        5,000,000        5,823,700  

Cityplace Florida Community Development District Special Assessment

    5.00       5-1-2021        2,945,000        3,082,738  

Duval County FL School Board Certificate of Participation Series B

    5.00       7-1-2028        2,500,000        2,940,525  

Duval County FL School Board Certificate of Participation Series B

    5.00       7-1-2029        5,000,000        5,865,950  

Miami-Dade County FL School Board Certificate of Participation Series A

    5.00       5-1-2031        3,000,000        3,446,790  

Miami-Dade County FL School Board Certificate of Participation Series D

    5.00       11-1-2027        6,600,000        7,685,436  

Monroe County FL School Board Certificate of Participation Series A

    5.00       6-1-2034        1,500,000        1,811,280  

Monroe County FL School Board Certificate of Participation Series A

    5.00       6-1-2035        1,000,000        1,204,680  

Orange County FL School Board Certificate of Participation Series C

    5.00       8-1-2029        2,000,000        2,369,380  

Orlando FL Senior Tourist Development 6th Cent Contract Payment Bond Series A (AGM Insured)

    5.00       11-1-2032        2,000,000        2,438,580  

Orlando FL Senior Tourist Development 6th Cent Contract Payment Bond Series A (AGM Insured)

    5.00       11-1-2033        4,500,000        5,474,880  

Orlando FL Senior Tourist Development 6th Cent Contract Payment Bond Series A (AGM Insured)

    5.00       11-1-2034        600,000        726,894  

Palm Beach County FL Refunding Bond

    5.00       5-1-2029        2,000,000        2,424,480  

University of South Florida Financing Corporation Certificate of Participation Master Lease Program Series A

    5.00       7-1-2022        1,730,000        1,889,212  

University of South Florida Financing Corporation Certificate of Participation Master Lease Program Series A

    5.00       7-1-2023        815,000        916,631  
     54,801,548  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

12  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue: 0.53%  

Miami-Dade County FL Public Services (AGM Insured)

    4.00 %       10-1-2020      $ 3,600,000      $ 3,676,320  

Miami-Dade County FL Public Services (AGM Insured)

    4.00       4-1-2021        2,485,000        2,572,845  

Miami-Dade County FL Special Obligation Series A

    5.00       10-1-2023        700,000        770,553  

Polk County FL School District

    5.00       10-1-2033        2,900,000        3,718,815  

Tampa FL Sports Authority Stadium Project

    5.00       1-1-2025        3,550,000        4,201,283  
     14,939,816  
  

 

 

 
Transportation Revenue: 0.49%  

Florida Department of Transportation Turnpike System Series A

    5.00       7-1-2023        3,910,000        4,429,092  

Florida Department of Transportation Turnpike System Series A

    5.00       7-1-2025        4,950,000        5,949,108  

Florida Mid-Bay Bridge Authority Series A

    5.00       10-1-2025        1,250,000        1,466,688  

Osceola County FL Transportation Improvement and Refunding Bond Series A-1 %%

    5.00       10-1-2034        250,000        310,315  

Osceola County FL Transportation Improvement and Refunding Bond Series A-1 %%

    5.00       10-1-2035        400,000        494,964  

Osceola County FL Transportation Improvement and Refunding Bond Series A-1 %%

    5.00       10-1-2036        600,000        740,184  

Osceola County FL Transportation Improvement and Refunding Bond Series A-1 %%

    5.00       10-1-2037        525,000        645,020  
     14,035,371  
  

 

 

 
Utilities Revenue: 0.18%  

Escambia County FL Pollution Control Gulf Power Company Project ø

    1.71       7-1-2022        5,000,000        5,000,000  
         

 

 

 
Water & Sewer Revenue: 0.24%  

Daytona Beach FL Utility System (AGM Insured)

    5.00       11-1-2022        2,205,000        2,432,600  

North Sumter County FL Utility Dependent District Bond (BAM Insured)

    5.00       10-1-2031        500,000        632,410  

North Sumter County FL Utility Dependent District Bond (BAM Insured)

    5.00       10-1-2032        950,000        1,197,342  

North Sumter County FL Utility Dependent District Bond (BAM Insured)

    5.00       10-1-2035        1,290,000        1,610,797  

North Sumter County FL Utility Dependent District Bond (BAM Insured)

    5.00       10-1-2036        880,000        1,092,863  
     6,966,012  
  

 

 

 
     115,474,992  
  

 

 

 

Georgia: 3.16%

 

Education Revenue: 0.12%  

Private Colleges & Universities Authority of Georgia Series A

    5.00       10-1-2021        3,330,000        3,526,304  
         

 

 

 
Health Revenue: 1.00%  

Brookhaven GA Development Authority Children’s Healthcare Series A

    5.00       7-1-2034        1,000,000        1,260,350  

Brookhaven GA Development Authority Children’s Healthcare Series A

    5.00       7-1-2035        1,300,000        1,631,084  

Gainesville & Hall Counties GA Development Authority Senior Living Facilities Lanier Village Series B (AGC Insured, TD Bank NA SPA) ø

    1.70       11-15-2033        6,560,000        6,560,000  

Gainesville GA Hospital Authority Series C ø

    1.77       2-15-2047        8,450,000        8,450,000  

Georgia Tender Option Bond Trust Receipts/Floater Certificates Series 2015-XF1016 (Barclays Bank plc LIQ) 144Aø

    1.66       8-15-2049        10,520,000        10,520,000  
     28,421,434  
  

 

 

 
Industrial Development Revenue: 0.07%  

Monroe County GA PCR Georgia Power Company Plant Scherer Project

    2.35       10-1-2048        2,000,000        2,019,520  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  13


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Utilities Revenue: 1.97%  

Bartow County GA Development Authority Pollution Control Georgia Power Company Plant Bowen Project

    1.55 %       8-1-2043      $ 3,000,000      $ 2,991,390  

Burke County GA Development Authority Georgia Power Company Plant Vogtle Project

    2.25       10-1-2032        4,800,000        4,884,624  

Burke County GA Development Authority Oglethorpe Power Corporation Vogtle Project Series E

    3.25       11-1-2045        6,000,000        6,269,100  

Floyd County GA PCR Georgia Power Company Plant Hammond Project

    2.35       7-1-2022        1,000,000        1,008,450  

Georgia Municipal Electric Authority Project One Series A

    5.00       1-1-2035        925,000        1,120,517  

Georgia Municipal Electric Authority Units 3 & 4 Project Series A

    5.00       1-1-2031        600,000        728,148  

Georgia Municipal Electric Authority Units 3 & 4 Project Series A

    5.00       1-1-2034        930,000        1,119,460  

Georgia Municipal Electric Authority Units 3 & 4 Project Series A

    5.00       1-1-2035        600,000        720,456  

Main Street Natural Gas Incorporated Georgia Gas Project Series A

    5.00       5-15-2029        2,600,000        3,203,902  

Main Street Natural Gas Incorporated Georgia Gas Project Series A

    5.50       9-15-2022        1,000,000        1,104,820  

Main Street Natural Gas Incorporated Georgia Gas Project Series B

    4.00       8-1-2049        10,000,000        11,153,200  

Main Street Natural Gas Incorporated Georgia Gas Project Series C

    4.00       8-1-2048        2,500,000        2,725,375  

Main Street Natural Gas Incorporated Georgia Gas Project Subordinate Bond Series A (Royal Bank of Canada LIQ)

    4.00       4-1-2048        5,500,000        5,970,580  

Main Street Natural Gas Incorporated Georgia Gas Project Subordinate Bond Series B (1 Month LIBOR +0.75%) ±

    1.90       4-1-2048        10,000,000        10,022,800  

Monroe County GA Development Authority Pollution Control Gulf Power Company Plant Scherer Project ø

    1.71       6-1-2049        3,000,000        3,000,000  
     56,022,822  
  

 

 

 
     89,990,080  
  

 

 

 

Guam: 0.25%

 

Airport Revenue: 0.09%  

Guam International Airport Authority

    5.00       10-1-2022        1,000,000        1,081,320  

Guam International Airport Authority

    5.00       10-1-2023        1,480,000        1,579,190  
     2,660,510  
  

 

 

 
Tax Revenue: 0.05%  

Guam Government Business Privilege Tax Bond Series A

    5.00       1-1-2020        1,365,000        1,365,000  
         

 

 

 
Water & Sewer Revenue: 0.11%  

Guam Government Waterworks Authority

    5.25       7-1-2020        350,000        356,143  

Guam Government Waterworks Authority

    5.25       7-1-2033        2,500,000        2,737,775  
     3,093,918  
  

 

 

 
     7,119,428  
  

 

 

 

Hawaii: 0.35%

 

GO Revenue: 0.35%  

Honolulu HI Rail Transit Project Series H (SIFMA Municipal Swap +0.30%) ±

    1.91       9-1-2022        2,500,000        2,500,150  

Honolulu HI Rail Transit Project Series H (SIFMA Municipal Swap +0.32%) ±

    1.93       9-1-2025        2,500,000        2,500,125  

Honolulu HI Rail Transit Project Series H (SIFMA Municipal Swap +0.32%) ±

    1.93       9-1-2028        5,000,000        5,000,300  
     10,000,575  
  

 

 

 

Illinois: 14.89%

 

Airport Revenue: 1.23%  

Chicago IL O’Hare International Airport Senior Lien (AGM Insured)

    5.13       1-1-2030        2,610,000        2,894,803  

Chicago IL O’Hare International Airport Senior Lien (AGM Insured)

    5.13       1-1-2031        3,335,000        3,692,679  

Chicago IL O’Hare International Airport Senior Lien

    5.25       1-1-2032        8,755,000        9,698,789  

 

The accompanying notes are an integral part of these financial statements.

 

 

14  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Airport Revenue (continued)  

Chicago IL O’Hare International Airport Senior Lien Series B

    5.00 %       1-1-2030      $ 8,000,000      $ 9,308,000  

Chicago IL O’Hare International Airport Senior Lien Series B

    5.00       1-1-2036        1,500,000        1,852,545  

Chicago IL O’Hare International Airport Third Lien Series C (AGC Insured)

    5.25       1-1-2025        4,075,000        4,088,285  

Chicago IL O’Hare International Airport Third Lien Series F

    4.25       1-1-2021        735,000        736,735  

Peoria IL Metropolitan Airport Authority Series D

    5.00       12-1-2027        2,250,000        2,711,880  
     34,983,716  
  

 

 

 
Education Revenue: 0.67%  

Illinois Finance Authority Academic Facilities University of Illinois at Urbana-Champaign Project Series A

    5.00       10-1-2026        450,000        541,499  

Illinois Finance Authority Academic Facilities University of Illinois at Urbana-Champaign Project Series A

    5.00       10-1-2031        400,000        499,500  

Illinois Finance Authority Academic Facilities University of Illinois at Urbana-Champaign Project Series A

    5.00       10-1-2039        700,000        851,788  

Illinois Finance Authority Bradley University Project Series C

    5.00       8-1-2032        1,250,000        1,479,425  

Illinois Finance Authority Student Housing Illinois State University Project

    5.50       4-1-2021        1,930,000        1,986,009  

Illinois Finance Authority Wesleyan University

    5.00       9-1-2026        680,000        807,534  

Northern Illinois University Board of Trustees Certificate of Participation (AGM Insured)

    5.00       9-1-2022        1,325,000        1,441,454  

Northern Illinois University Board of Trustees Certificate of Participation (AGM Insured)

    5.00       9-1-2024        1,000,000        1,140,710  

University of Illinois Auxiliary Facilities Systems CAB ¤

    0.00       4-1-2020        8,270,000        8,237,582  

University of Illinois Board of Trustees Auxiliary Facilities System Refunding Bond

    4.00       4-1-2030        2,000,000        2,118,460  
     19,103,961  
  

 

 

 
GO Revenue: 4.07%  

Bolingbrook, Will & DuPage Counties IL Series A (AGM Insured)

    5.00       1-1-2023        650,000        718,757  

Chicago IL Board of Education CAB School Reform Series B-1 (National Insured) ¤

    0.00       12-1-2025        3,380,000        2,928,838  

Chicago IL Board of Education CAB School Reform Series B-1 (National Insured) ¤

    0.00       12-1-2026        4,030,000        3,383,104  

Chicago IL Board of Education Series F

    5.00       12-1-2020        2,375,000        2,440,051  

Chicago IL CAB Series C ¤

    0.00       1-1-2023        2,500,000        2,315,150  

Chicago IL Metropolitan Reclamation Series B

    5.00       12-1-2025        2,500,000        2,675,400  

Chicago IL Park District Series A

    5.00       1-1-2036        2,250,000        2,352,240  

Chicago IL Park District Series B

    5.00       1-1-2021        3,765,000        3,889,320  

Chicago IL Park District Series B (BAM Insured)

    5.00       1-1-2029        2,000,000        2,232,480  

Chicago IL Park District Series C

    5.00       1-1-2022        1,615,000        1,716,923  

Chicago IL Series A

    5.00       1-1-2025        750,000        825,975  

Chicago IL Series C

    4.00       1-1-2020        1,505,000        1,505,000  

Chicago IL Series C

    5.00       1-1-2026        5,000,000        5,695,050  

Chicago IL Series G (Ambac Insured)

    5.00       12-1-2024        9,000,000        9,038,520  

Cook County IL

    5.00       11-15-2035        1,300,000        1,501,500  

Cook County IL Community College District #508

    5.25       12-1-2025        1,665,000        1,855,809  

Cook County IL Community College District #508

    5.25       12-1-2027        1,295,000        1,435,171  

Cook County IL Community College District #508

    5.25       12-1-2028        1,250,000        1,382,763  

Cook County IL Community College District #508

    5.25       12-1-2030        3,000,000        3,301,290  

Cook County IL Community College District #508

    5.25       12-1-2031        3,200,000        3,516,416  

Cook County IL Series A

    5.00       11-15-2031        1,000,000        1,168,120  

Cook County IL Series A

    5.25       11-15-2022        7,240,000        7,471,463  

Cook County IL Series A

    5.25       11-15-2023        7,680,000        7,926,221  

Cook County IL Series A

    5.25       11-15-2024        2,200,000        2,345,376  

Cook County IL Series B

    5.00       11-15-2023        600,000        673,374  

Cook County IL Series C

    5.00       11-15-2021        1,460,000        1,550,126  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  15


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue (continued)  

Cook County IL Series C

    5.00 %       11-15-2024      $ 2,175,000      $ 2,376,927  

Cook County IL Series C

    5.00       11-15-2025        2,450,000        2,673,661  

DuPage, Cook & Will Counties IL Community College District #502 Series A

    5.00       6-1-2022        2,650,000        2,888,474  

Illinois (AGM Insured)

    5.00       1-1-2023        2,450,000        2,457,252  

Illinois (AGM Insured)

    5.00       4-1-2026        5,000,000        5,609,300  

Illinois

    4.75       4-1-2020        2,650,000        2,656,493  

Illinois Series A (AGM Insured)

    5.00       4-1-2024        2,500,000        2,758,800  

Illinois Series A

    5.00       4-1-2023        4,500,000        4,896,945  

Kane, Cook & DuPage Counties IL School District #46 Prerefunded Balance Bond Series B

    4.50       1-1-2024        1,170,000        1,247,068  

Kane, Cook & DuPage Counties IL School District #46 Unrefunded Balance Bond Series B

    4.50       1-1-2024        3,100,000        3,288,387  

Kendall, Kane & Will Counties IL Unified School District Series A

    5.00       2-1-2023        1,000,000        1,038,580  

McHenry & Kane Counties IL Community Consolidated School District #158

    5.63       1-15-2031        2,000,000        2,152,960  

McHenry & Lake Counties IL Community Consolidated School District #26 (AGM Insured)

    5.00       2-1-2020        1,455,000        1,459,263  

Springfield IL

    5.00       12-1-2021        850,000        907,996  

Springfield IL

    5.00       12-1-2023        570,000        638,639  

Stephenson County IL School District #145 Series A (AGM Insured)

    5.00       2-1-2033        1,550,000        1,875,454  

Waukegan IL Series B (AGM Insured)

    4.00       12-30-2024        1,030,000        1,143,743  
     115,914,379  
  

 

 

 
Health Revenue: 0.12%  

Illinois Finance Authority Ann & Robert H. Laurie Children’s Hospital Project of Chicago

    5.00       8-15-2034        1,000,000        1,203,660  

Illinois Finance Authority Edward Elmhurst Healthcare Series A

    5.00       1-1-2026        1,000,000        1,176,500  

Illinois Finance Authority Lutheran Life Communities Obligated Group Series A

    5.00       11-1-2035        900,000        988,119  
     3,368,279  
  

 

 

 
Miscellaneous Revenue: 0.78%  

Chicago IL Board of Education Series C

    5.00       12-1-2021        5,000,000        5,263,200  

Illinois

    5.00       7-1-2023        5,065,000        5,543,845  

Illinois

    5.00       8-1-2024        1,000,000        1,069,680  

Illinois

    5.50       7-1-2026        2,300,000        2,546,698  

Illinois Sports Facilities Authority Refunding Bond

    5.00       6-15-2028        1,000,000        1,194,200  

Peoria IL Public Building Commission Illinois School District Facilities Refunding Bond (BAM Insured)

    5.00       12-1-2023        4,040,000        4,580,512  

Peoria IL Public Building Commission Illinois School District Facilities Refunding Bond (BAM Insured)

    5.00       12-1-2024        1,000,000        1,163,970  

University of Illinois Board of Trustees Certificate of Participation Unrefunded Bond Series B (AGM Insured)

    5.00       10-1-2020        955,000        957,731  
     22,319,836  
  

 

 

 
Tax Revenue: 5.52%  

Chicago IL Sales Tax Refunding Bond

    5.00       1-1-2026        5,140,000        6,075,891  

Chicago IL Sales Tax Refunding Bond

    5.00       1-1-2027        3,000,000        3,546,240  

Chicago IL Sales Tax Refunding Bond

    5.00       1-1-2030        2,075,000        2,452,816  

Chicago IL Sales Tax Securitization Bond Series C

    5.00       1-1-2027        4,370,000        5,181,815  

Chicago IL Sales Tax Securitization Bond Series C

    5.25       1-1-2035        4,700,000        5,660,210  

Chicago IL Transit Authority Sales Tax Receipts

    5.25       12-1-2027        2,600,000        2,772,562  

Cook County IL Sales Tax Bond

    5.00       11-15-2033        4,000,000        4,776,960  

Cook County IL Sales Tax Bond

    5.25       11-15-2035        2,000,000        2,412,460  

Illinois ##

    5.00       6-15-2023        16,150,000        17,637,415  

Illinois Junior Obligation

    5.00       6-15-2025        6,000,000        6,513,900  

Illinois Regional Transportation Authority (National Insured)

    6.50       7-1-2026        8,615,000        10,771,076  

 

The accompanying notes are an integral part of these financial statements.

 

 

16  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue (continued)  

Illinois Sales Tax Revenue Build Illinois Bond

    5.00 %       6-15-2029      $ 1,000,000      $ 1,040,550  

Illinois Series A

    5.00       1-1-2027        10,625,000        11,182,494  

Illinois Sports Facilities Authority State Tax Supported Refunding Bond (AGM Insured)

    5.00       6-15-2028        2,500,000        2,807,300  

Illinois Sports Facilities Authority State Tax Supported Refunding Bond (AGM Insured)

    5.25       6-15-2030        4,000,000        4,507,840  

Illinois Sports Facilities Authority State Tax Supported Refunding Bond (AGM Insured)

    5.25       6-15-2032        3,000,000        3,367,350  

Illinois Tender Option Bond Trust Receipts/Floater Certificates
Series 2018-XL0093 (Barclays Bank plc LIQ) 144Aø

    1.76       1-1-2048        10,000,000        10,000,000  

Illinois Tender Option Bond Trust Receipts/Floater Certificates
Series 2018-XF0603 (Royal Bank of Canada LIQ) 144Aø

    1.76       1-1-2026        2,265,000        2,265,000  

Illinois Tender Option Bond Trust Receipts/Floater Certificates
Series 2018-XM0713 (Morgan Stanley Bank LIQ) 144Aø

    1.76       1-1-2043        7,000,000        7,000,000  

Metropolitan Pier & Exposition Authority CAB McCormick Place Expansion Project Series A (National Insured) ¤

    0.00       12-15-2029        35,200,000        26,641,824  

Metropolitan Pier & Exposition Authority CAB McCormick Place Expansion Project Series A (National Insured) ¤

    0.00       12-15-2030        12,800,000        9,285,120  

Metropolitan Pier & Exposition Authority CAB McCormick Place Expansion Project Series B (National Insured) ¤

    0.00       6-15-2029        10,000,000        7,715,500  

Metropolitan Pier & Exposition Authority CAB McCormick Place Expansion Project Series B

    5.00       12-15-2028        1,945,000        2,079,575  

Southwestern Illinois Development Authority Local Government Program Collinsville Limited

    5.00       3-1-2025        1,845,000        1,538,343  
     157,232,241  
  

 

 

 
Tobacco Revenue: 0.12%  

Railsplitter IL Tobacco Settlement Authority

    5.00       6-1-2024        3,000,000        3,449,310  
         

 

 

 
Transportation Revenue: 1.29%  

Illinois Toll Highway Authority Series A-1

    5.25       1-1-2026        3,850,000        3,850,000  

Illinois Toll Highway Authority Series B

    5.00       1-1-2028        6,000,000        7,504,560  

Illinois Toll Highway Authority Series B

    5.00       1-1-2030        5,825,000        7,466,310  

Illinois Toll Highway Authority Series C

    5.00       1-1-2031        14,000,000        17,821,860  
     36,642,730  
  

 

 

 
Water & Sewer Revenue: 1.09%  

Chicago IL Second Lien

    5.00       11-1-2022        1,730,000        1,895,890  

Chicago IL Second Lien

    5.00       11-1-2023        1,515,000        1,663,228  

Chicago IL Second Lien

    5.00       11-1-2025        620,000        679,241  

Chicago IL Second Lien

    5.00       11-1-2026        2,000,000        2,187,120  

Chicago IL Second Lien

    5.00       11-1-2028        3,000,000        3,268,770  

Chicago IL Second Lien

    5.00       11-1-2029        1,490,000        1,620,390  

Chicago IL Second Lien

    5.00       11-1-2033        1,000,000        1,127,240  

Chicago IL Second Lien (AGM Insured)

    5.25       11-1-2033        2,000,000        2,420,960  

Chicago IL Waste Water Transmission Second Lien

    5.00       1-1-2022        1,340,000        1,431,227  

Chicago IL Waste Water Transmission Second Lien

    5.00       1-1-2023        2,335,000        2,489,180  

Chicago IL Waste Water Transmission Second Lien

    5.00       1-1-2024        2,000,000        2,130,120  

Chicago IL Waste Water Transmission Second Lien

    5.00       1-1-2027        2,670,000        2,989,813  

Chicago IL Waste Water Transmission Second Lien

    5.00       1-1-2032        1,000,000        1,101,460  

Chicago IL Waste Water Transmission Second Lien

    5.00       1-1-2033        1,000,000        1,100,420  

Chicago IL Waste Water Transmission Second Lien

    5.00       1-1-2034        1,000,000        1,099,620  

Illinois Finance Authority Clean Water Initiative Revolving Fund Bond

    5.25       7-1-2035        3,000,000        3,840,420  
     31,045,099  
  

 

 

 
     424,059,551  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  17


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Indiana: 1.24%

 

Health Revenue: 0.17%  

Indiana HFFA Ascension Health Subordinate Bond Credit Group Series A-3

    1.35 %       11-1-2027      $ 2,240,000      $ 2,241,434  

Knox County IN EDA Series A

    5.00       4-1-2022        925,000        977,596  

Knox County IN EDA Series A

    5.00       4-1-2023        665,000        702,406  

Knox County IN EDA Series A

    5.00       4-1-2026        750,000        790,125  
     4,711,561  
  

 

 

 
Housing Revenue: 0.25%  

Indianapolis IN MFHR Regency Park Apartments Series A

    1.40       9-1-2022        7,000,000        7,000,980  
         

 

 

 
Miscellaneous Revenue: 0.59%  

Dubois IN Greater Jasper School Building Corporation First Mortgage Bond

    5.00       7-15-2029        1,500,000        1,904,010  

Indiana Bond Bank Special Program Series A (AGM Insured)

    5.00       9-1-2022        1,545,000        1,661,539  

Indiana Finance Authority Stadium Project Series A

    5.25       2-1-2028        2,000,000        2,415,780  

Indianapolis IN Local Public Improvement Bond Bank Series E

    5.00       1-1-2027        760,000        919,532  

Indianapolis IN Local Public Improvement Bond Bank Series E

    5.00       1-1-2028        1,000,000        1,207,560  

Indianapolis IN Local Public Improvement Bond Bank Series E

    5.00       1-1-2029        735,000        884,742  

Indianapolis IN Local Public Improvement Bond Bank Series E

    5.00       1-1-2030        1,375,000        1,650,564  

Indianapolis IN Local Public Improvement Bond Bank Series E

    5.00       1-1-2031        1,000,000        1,198,250  

Indianapolis IN Local Public Improvement Bond Bank Series E

    5.00       1-1-2033        1,545,000        1,842,042  

Indianapolis IN Local Public Improvement Bond Bank Series E

    5.00       1-1-2034        2,000,000        2,368,200  

Valparaiso IN Multi-Schools Building Corporation

    5.00       7-15-2024        750,000        872,040  
     16,924,259  
  

 

 

 
Water & Sewer Revenue: 0.23%  

Indiana Finance Authority First Lien Wastewater Utility Clean Water Project Series A

    5.00       10-1-2030        2,315,000        2,682,599  

Indiana Finance Authority First Lien Wastewater Utility Clean Water Project Series A

    5.00       10-1-2031        1,035,000        1,195,870  

Indiana Finance Authority First Lien Wastewater Utility Clean Water Project Series A

    5.25       10-1-2038        2,500,000        2,658,925  
     6,537,394  
  

 

 

 
     35,174,194  
  

 

 

 

Iowa: 0.41%

 

GO Revenue: 0.10%  

Altoona IA Annual Appropriation Urban Renewal Refunding Bond

    5.00       6-1-2027        2,310,000        2,767,819  
         

 

 

 
Industrial Development Revenue: 0.31%  

Iowa Finance Authority Midwestern Disaster Area Project (Korea Development Bank LOC) ø

    1.92       4-1-2022        9,000,000        9,000,000  
         

 

 

 
     11,767,819  
  

 

 

 

Kansas: 0.39%

 

Health Revenue: 0.05%  

Kansas Development Finance Authority Health Facilities Series F

    5.00       11-15-2021        1,300,000        1,387,906  
         

 

 

 
Miscellaneous Revenue: 0.22%  

Kansas Development Finance Authority Agro-Defense Facility Series G

    5.00       4-1-2030        2,650,000        2,935,379  

Kansas Overland Park Development Corporation Improvement and Refunding Bond

    5.00       3-1-2035        2,780,000        3,309,979  
     6,245,358  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

18  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue: 0.05%  

Wyandotte County & Kansas City KS Special Obligation Vacation Village Project Area 4 Major Multi-Sport Athletic Complex Project CAB Series 2015 144A¤

    0.00 %       9-1-2034      $ 3,395,000      $ 1,438,326  
         

 

 

 
Utilities Revenue: 0.07%  

Burlington KS Environmental Impact Series A ø

    1.75       9-1-2035        2,000,000        2,000,000  
         

 

 

 
     11,071,590  
  

 

 

 

Kentucky: 1.70%

 

Transportation Revenue: 0.34%  

Kentucky Public Transportation Infrastructure Authority Downtown Crossing Project CAB Series B ¤

    0.00       7-1-2020        1,000,000        990,790  

Kentucky Public Transportation Infrastructure Authority Downtown Crossing Project CAB Series B ¤

    0.00       7-1-2021        2,750,000        2,664,283  

Kentucky Public Transportation Infrastructure Authority Downtown Crossing Project CAB Series B ¤

    0.00       7-1-2022        4,320,000        4,086,504  

Kentucky Public Transportation Infrastructure Authority Downtown Crossing Project CAB Series B ¤

    0.00       7-1-2025        1,020,000        836,329  

Kentucky Public Transportation Infrastructure Authority Downtown Crossing Project CAB Series B ¤

    0.00       7-1-2029        1,400,000        1,027,782  
     9,605,688  
  

 

 

 
Utilities Revenue: 1.36%  

Kentucky Public Energy Authority Gas Supply Series A-1

    4.00       12-1-2049        16,770,000        18,588,036  

Kentucky Public Energy Authority Gas Supply Series B

    4.00       1-1-2049        10,000,000        11,042,400  

Kentucky State Public Energy Authority

    4.00       2-1-2050        8,000,000        9,146,880  
     38,777,316  
  

 

 

 
     48,383,004  
  

 

 

 

Louisiana: 1.43%

 

Airport Revenue: 0.12%  

New Orleans LA Aviation Board Consolidated Rental Car Project (AGM Insured)

    5.00       1-1-2035        2,000,000        2,404,240  

New Orleans LA Aviation Board North Terminal Project Series A

    5.00       1-1-2033        750,000        893,955  
     3,298,195  
  

 

 

 
Education Revenue: 0.20%  

Louisiana Public Facilities Authority Loyola University Project CAB ¤

    0.00       10-1-2027        3,380,000        3,272,550  

Louisiana Public Facilities Authority Loyola University Project CAB ¤

    0.00       10-1-2028        2,500,000        2,457,850  
     5,730,400  
  

 

 

 
Miscellaneous Revenue: 0.67%  

Lafayette LA Communications System (AGM Insured)

    5.00       11-1-2025        1,500,000        1,797,120  

Louisiana Public Facilities Authority Archdiocese of New Orleans Project

    5.00       7-1-2024        1,000,000        1,130,550  

Louisiana Public Facilities Authority Archdiocese of New Orleans Project

    5.00       7-1-2025        600,000        689,724  

Louisiana Public Facilities Authority Archdiocese of New Orleans Project

    5.00       7-1-2026        500,000        581,710  

Louisiana Unclaimed Property Special Bond 1-49 South Project

    5.00       9-1-2026        2,000,000        2,370,140  

Louisiana Unclaimed Property Special Bond 1-49 South Project

    5.00       9-1-2027        2,700,000        3,188,808  

Louisiana Unclaimed Property Special Bond 1-49 South Project

    5.00       9-1-2028        2,405,000        2,830,589  

Louisiana Unclaimed Property Special Bond 1-49 South Project

    5.00       9-1-2029        2,695,000        3,168,485  

Louisiana Unclaimed Property Special Bond 1-49 South Project

    5.00       9-1-2030        2,700,000        3,170,637  
     18,927,763  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  19


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue: 0.21%  

Jefferson LA Sales Tax District Series B (AGM Insured)

    5.00 %       12-1-2031      $ 1,000,000      $ 1,225,680  

Jefferson LA Sales Tax District Series B (AGM Insured)

    5.00       12-1-2032        1,000,000        1,221,150  

St. Bernard Parish LA Sales Tax Refunding Bond

    4.00       3-1-2023        3,405,000        3,650,807  
     6,097,637  
  

 

 

 
Transportation Revenue: 0.12%  

Greater New Orleans LA Expressway Commission Toll Subordinate Lien Bond (AGM Insured)

    5.00       11-1-2031        1,000,000        1,181,180  

Greater New Orleans LA Expressway Commission Toll Subordinate Lien Bond (AGM Insured)

    5.00       11-1-2032        1,000,000        1,178,470  

Greater New Orleans LA Expressway Commission Toll Subordinate Lien Bond (AGM Insured)

    5.00       11-1-2033        1,000,000        1,177,090  
     3,536,740  
  

 

 

 
Water & Sewer Revenue: 0.11%  

Greater Ouachita LA Waterworks and Sewer System Refunding Bond (BAM Insured)

    4.00       9-1-2030        500,000        577,375  

Greater Ouachita LA Waterworks and Sewer System Refunding Bond (BAM Insured)

    4.00       9-1-2031        600,000        690,000  

Greater Ouachita LA Waterworks and Sewer System Refunding Bond (BAM Insured)

    4.00       9-1-2032        655,000        750,584  

Louisiana Local Government Environmental Facilities & CDA East Baton Rouge Series A

    5.00       2-1-2030        1,000,000        1,132,060  
     3,150,019  
  

 

 

 
     40,740,754  
  

 

 

 

Maine: 0.22%

 

Education Revenue: 0.22%  

Maine Health and HEFAR University of New England Issue Series A

    5.00       7-1-2029        1,015,000        1,230,951  

Maine Health and HEFAR University of New England Issue Series A

    5.00       7-1-2030        1,200,000        1,445,736  

Maine Health and HEFAR University of New England Issue Series A

    5.00       7-1-2032        1,415,000        1,690,784  

Maine Health and HEFAR University of New England Issue Series A

    5.00       7-1-2033        1,485,000        1,770,120  
     6,137,591  
  

 

 

 

Maryland: 2.46%

 

Education Revenue: 0.12%  

Maryland Economic Development Corporation Salisbury University Project

    5.00       6-1-2027        500,000        535,235  

Westminster MD Educational Facilities McDaniel College

    5.00       11-1-2026        2,450,000        2,894,210  
     3,429,445  
  

 

 

 
GO Revenue: 1.75%  

Baltimore MD Metropolitan District Bond

    4.00       3-1-2035        4,000,000        4,647,360  

Howard County MD Metropolitan District Project Series B

    4.00       8-15-2030        2,070,000        2,441,234  

Howard County MD Metropolitan District Project Series B

    4.00       8-15-2032        1,430,000        1,669,597  

Maryland Series B

    4.00       8-1-2023        5,000,000        5,509,500  

Maryland Series B

    4.00       8-1-2024        15,000,000        16,919,700  

Maryland Series C

    5.00       8-1-2022        2,975,000        3,271,340  

Prince George’s County MD Consolidated Public Improvement Bonds Series C

    4.00       8-1-2027        6,000,000        6,561,720  

Prince Georges County MD Consolidated Public Improvement Bonds Series C

    4.00       8-1-2029        8,000,000        8,705,040  
     49,725,491  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

20  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue: 0.54%  

Baltimore MD Public Schools Construction & Revitalization Program

    5.00 %       5-1-2041      $ 5,000,000      $ 5,846,400  

Maryland CDA Local Government Infrastructure Bond Series A-2

    2.00       6-1-2022        460,000        468,367  

Maryland State and Local Facilities Loan Series A

    4.00       8-1-2030        5,000,000        5,816,000  

Prince Georges County MD Upper Marlboro Courthouse Project Series A

    5.00       5-1-2028        1,215,000        1,543,062  

Prince Georges County MD Upper Marlboro Courthouse Project Series A

    5.00       5-1-2029        1,275,000        1,611,218  
     15,285,047  
  

 

 

 
Tax Revenue: 0.05%  

Howard County MD Downtown Columbia Project Series A 144A

    4.00       2-15-2028        500,000        532,750  

Howard County MD Downtown Columbia Project Series A 144A

    4.13       2-15-2034        1,000,000        1,054,970  
     1,587,720  
  

 

 

 
     70,027,703  
  

 

 

 

Massachusetts: 3.44%

 

Education Revenue: 0.08%  

Massachusetts Development Finance Agency Lasell College

    5.00       7-1-2021        1,210,000        1,247,800  

Massachusetts Development Finance Agency Merrimack College Series A

    5.00       7-1-2021        1,035,000        1,088,334  
     2,336,134  
  

 

 

 
GO Revenue: 1.62%  

Boston MA Series A

    4.00       4-1-2031        1,500,000        1,752,420  

Boston MA Series A

    5.00       4-1-2026        5,790,000        6,940,531  

Massachusetts Consolidated Loan Series D

    5.00       9-1-2028        10,000,000        12,008,700  

Massachusetts Series A

    5.25       1-1-2033        15,630,000        20,147,539  

Massachusetts Series B

    5.00       7-1-2035        1,500,000        1,880,490  

Massachusetts Series B

    5.00       7-1-2036        2,700,000        3,372,462  
     46,102,142  
  

 

 

 
Miscellaneous Revenue: 0.46%  

Massachusetts Consolidated Loan Series D

    1.05       8-1-2043        10,000,000        9,992,100  

Massachusetts Consolidated Loan Series I

    5.00       12-1-2030        2,570,000        3,154,521  
     13,146,621  
  

 

 

 
Tax Revenue: 0.32%  

Massachusetts Bay Transportation Authority Series A

    5.25       7-1-2031        5,000,000        6,848,700  

Massachusetts Bay Transportation Authority Series A

    5.25       7-1-2033        1,555,000        2,166,582  
     9,015,282  
  

 

 

 
Water & Sewer Revenue: 0.96%  

Massachusetts Water Resources Authority Series B (AGM Insured)

    5.25       8-1-2033        19,575,000        27,450,759  
         

 

 

 
     98,050,938  
  

 

 

 

Michigan: 2.94%

 

Airport Revenue: 0.06%  

Wayne County MI Airport Authority Detroit Metropolitan Bond Series A

    5.00       12-1-2032        800,000        975,608  

Wayne County MI Airport Authority Detroit Metropolitan Bond Series A

    5.00       12-1-2034        600,000        730,938  
     1,706,546  
  

 

 

 
Education Revenue: 0.44%  

Flint MI International Academy

    5.38       10-1-2022        1,440,000        1,441,080  

Flint MI International Academy

    5.50       10-1-2027        1,985,000        1,986,231  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  21


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Education Revenue (continued)  

Michigan Finance Authority Limited Obligation Public School Academy Cesar Chavez Academy Project

    5.00 %       2-1-2022      $ 1,090,000      $ 1,104,159  

Michigan State University Board of Trustees

    5.00       2-15-2036        1,325,000        1,654,567  

RBC Municipal Products Incorporated Trust Series E-127 (Royal Bank of Canada LOC, Royal Bank of Canada LIQ) 144Aø

    1.70       7-1-2020        3,705,000        3,705,000  

Western Michigan University Board of Trustees

    5.25       11-15-2027        600,000        682,362  

Western Michigan University Board of Trustees

    5.25       11-15-2029        1,000,000        1,137,380  

Western Michigan University Board of Trustees (AGM Insured)

    5.25       11-15-2033        750,000        855,330  
     12,566,109  
  

 

 

 
GO Revenue: 0.39%  

Eaton Rapids MI Public Schools (School Bond Loan Fund Insured)

    5.00       5-1-2022        1,785,000        1,938,421  

Hazel Park MI School District (School Bond Loan Fund Insured)

    5.00       5-1-2020        1,160,000        1,174,744  

Kent County MI Limited Tax Capital Improvement Bond

    5.00       6-1-2030        1,040,000        1,257,922  

Pinckney MI Community School District (School Bond Loan Fund Insured)

    5.00       5-1-2025        2,040,000        2,332,740  

Pinckney MI Community School District (School Bond Loan Fund Insured)

    5.00       5-1-2026        2,505,000        2,856,677  

Southfield MI 2015 Street Improvement

    4.00       5-1-2025        1,490,000        1,682,970  
     11,243,474  
  

 

 

 
Health Revenue: 0.60%  

Michigan Finance Authority Bronson Healthcare Group Series B & C

    3.75       11-15-2049        5,000,000        5,593,600  

Michigan Finance Authority Sparrow Obligated Group

    5.00       11-15-2023        400,000        441,964  

Michigan Finance Authority Sparrow Obligated Group

    5.00       11-15-2026        800,000        880,360  

Michigan Finance Authority Trinity Health Credit Group Series MI-2

    4.00       12-1-2035        3,000,000        3,406,020  

Michigan Hospital Finance Authority Ascension Health Senior Credit Group Series F-2

    1.90       11-15-2047        6,570,000        6,619,275  
     16,941,219  
  

 

 

 
Miscellaneous Revenue: 0.60%  

Macomb MI Interceptor Drainage

    5.00       5-1-2024        1,750,000        1,771,473  

Macomb MI Interceptor Drainage

    5.00       5-1-2025        1,750,000        1,771,543  

Macomb MI Interceptor Drainage

    5.00       5-1-2026        1,930,000        1,953,681  

Michigan Building Authority Refunding Bond

    5.00       4-15-2036        3,000,000        3,799,830  

Michigan Finance Authority Local Government Loan Program Series F

    4.00       10-1-2024        3,000,000        3,235,200  

Michigan Strategic Fund Limited Obligation Cadillac Place Office Building Project

    5.25       10-15-2025        4,165,000        4,454,676  
     16,986,403  
  

 

 

 
Water & Sewer Revenue: 0.85%  

Great Lakes MI Water Authority Sewage Disposal System Series C

    5.00       7-1-2030        3,350,000        3,986,299  

Michigan Finance Authority Local Government Loan Program Series D (National Insured)

    5.00       7-1-2025        1,000,000        1,157,050  

Michigan Finance Authority Local Government Loan Program Series D

    5.00       7-1-2030        12,000,000        13,796,520  

Michigan Finance Authority Local Government Loan Program Series D (AGM Insured)

    5.00       7-1-2035        2,750,000        3,122,405  

Michigan Finance Authority Local Government Loan Program Series D (AGM Insured)

    5.00       7-1-2037        2,000,000        2,258,320  
     24,320,594  
  

 

 

 
     83,764,345  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

22  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Minnesota: 0.02%

 

Housing Revenue: 0.02%  

Oak Park Heights MN Boutwells Landing Project Series 2005 (FHLMC LIQ) ø

    1.62 %       11-1-2035      $ 700,000      $ 700,000  
         

 

 

 

Mississippi: 0.57%

 

GO Revenue: 0.03%  

Mississippi Development Bank Special Obligation Jackson Public School District Project Series A

    5.00       4-1-2020        1,000,000        1,009,150  
         

 

 

 
Miscellaneous Revenue: 0.38%  

Mississippi Development Bank Special Obligation Jackson Water & Sewer System Project Series A (AGM Insured)

    5.00       9-1-2030        10,000,000        10,821,700  
         

 

 

 
Water & Sewer Revenue: 0.16%  

Mississippi Development Bank Special Obligation Jackson Water & Sewer System Project (AGM Insured)

    6.00       12-1-2023        1,145,000        1,326,414  

West Rankin MS Utility Authority Series 2018 (AGM Insured)

    5.00       1-1-2026        525,000        616,046  

West Rankin MS Utility Authority Series 2018 (AGM Insured)

    5.00       1-1-2027        435,000        508,828  

West Rankin MS Utility Authority Series 2018 (AGM Insured)

    5.00       1-1-2034        750,000        860,618  

West Rankin MS Utility Authority Series 2018 (AGM Insured)

    5.00       1-1-2035        1,000,000        1,145,700  
     4,457,606  
  

 

 

 
     16,288,456  
  

 

 

 

Missouri: 0.35%

 

Education Revenue: 0.10%  

Missouri HEFA Webster University Project

    5.00       4-1-2027        2,450,000        2,808,019  
         

 

 

 
GO Revenue: 0.03%  

Belton MO School District #124 Missouri Direct Deposit Program Project

    5.00       3-1-2026        750,000        915,510  
         

 

 

 
Miscellaneous Revenue: 0.22%  

Kansas City MO Municipal Assistance Corporation CAB Series B-1 (Ambac Insured) ¤

    0.00       4-15-2022        3,640,000        3,508,196  

Poplar Bluff MO School District (AGM Insured)

    5.00       3-1-2032        1,500,000        1,701,045  

Poplar Bluff MO School District (AGM Insured)

    5.00       3-1-2034        1,000,000        1,130,410  
     6,339,651  
  

 

 

 
     10,063,180  
  

 

 

 

Nebraska: 0.36%

 

Health Revenue: 0.04%  

Lincoln County NE Hospital Authority Great Plains Regional Medical Center

    5.00       11-1-2024        1,000,000        1,061,330  
         

 

 

 
Utilities Revenue: 0.32%  

Central Plains Energy Project Gas Supply Nebraska

    4.00       12-1-2049        5,000,000        5,594,900  

Central Plains Energy Project Nebraska Refunding Bond Project #3

    5.00       9-1-2027        1,290,000        1,396,064  

Central Plains NE Energy Gas Project #4

    5.00       3-1-2050        2,000,000        2,235,420  
     9,226,384  
  

 

 

 
     10,287,714  
  

 

 

 

Nevada: 1.36%

 

Airport Revenue: 0.10%  

Clark County NV Airport Series D

    5.00       7-1-2024        2,750,000        2,750,000  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  23


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue: 1.21%  

Clark County NV Refunding Bond

    5.00 %       6-1-2030      $ 3,905,000      $ 4,819,121  

Clark County NV Refunding Bond Series B

    5.00       11-1-2028        5,000,000        6,135,700  

Clark County NV School District Building Bond Series A (AGM Insured)

    4.00       6-15-2034        6,790,000        7,597,195  

Clark County NV Stadium Improvement Bond Series A

    5.00       6-1-2032        1,615,000        2,018,895  

Clark County NV Stadium Improvement Bond Series A

    5.00       6-1-2033        3,900,000        4,861,818  

Clark County NV Water Reclamation District

    5.00       7-1-2027        4,155,000        4,961,112  

Las Vegas NV Series A

    5.00       5-1-2031        1,985,000        2,271,495  

Las Vegas NV Valley Water District Series A

    4.00       6-1-2028        1,665,000        1,876,905  
     34,542,241  
  

 

 

 
Miscellaneous Revenue: 0.05%  

Las Vegas NV Special Improvement District #607

    4.00       6-1-2020        495,000        498,470  

Las Vegas NV Special Improvement District #607

    4.00       6-1-2021        640,000        654,790  

Las Vegas NV Special Improvement District #607

    4.25       6-1-2024        200,000        211,688  
     1,364,948  
  

 

 

 
     38,657,189  
  

 

 

 

New Hampshire: 0.03%

 

Housing Revenue: 0.03%  

New Hampshire HFA Single Family Mortgage Acquisition Series E & F

    4.80       7-1-2028        770,000        777,207  
         

 

 

 

New Jersey: 3.50%

 

Airport Revenue: 0.18%  

South Jersey NJ Port Corporation Marine Terminal Refunding Bond Series S

    5.00       1-1-2028        2,130,000        2,476,168  

South Jersey NJ Port Corporation Marine Terminal Refunding Bond Series S

    5.00       1-1-2029        2,200,000        2,549,492  
     5,025,660  
  

 

 

 
GO Revenue: 0.43%  

Montclair NJ School Refunding Bond Series B

    4.00       3-1-2026        500,000        582,085  

Trenton City NJ (BAM Insured)

    5.00       12-1-2022        1,630,000        1,790,343  

Trenton City NJ (BAM Insured)

    5.00       12-1-2024        1,775,000        2,050,569  

Trenton City NJ (BAM Insured)

    5.00       12-1-2025        1,860,000        2,198,204  

Trenton City NJ (BAM Insured)

    5.00       12-1-2026        1,000,000        1,179,410  

Union County NJ General Improvement Bond

    3.00       3-1-2026        4,165,000        4,499,241  
     12,299,852  
  

 

 

 
Health Revenue: 0.40%  

New Jersey Health Care Facilities Financing Authority Series B (Bank of America NA LOC) ø

    1.62       7-1-2036        11,425,000        11,425,000  
         

 

 

 
Miscellaneous Revenue: 1.80%  

Essex County NJ Import Authority Series A

    6.00       11-1-2025        5,000,000        5,196,550  

New Jersey EDA Motor Vehicle Surcharge Revenue Refunding Bond Series A

    3.13       7-1-2029        725,000        735,716  

New Jersey EDA Motor Vehicle Surcharges Series A

    5.00       7-1-2033        2,500,000        2,877,450  

New Jersey EDA School Facilities Construction Refunding Bond Series NN

    5.00       3-1-2021        3,105,000        3,233,609  

New Jersey EDA School Facilities Construction Refunding Bond Series NN

    5.00       3-1-2021        1,210,000        1,264,281  

New Jersey EDA School Facilities Construction Refunding Bond Series NN

    5.00       3-1-2023        3,000,000        3,311,520  

New Jersey EDA School Facilities Construction Refunding Bond Series NN

    5.00       3-1-2026        9,830,000        10,819,193  

New Jersey EDA Series XX

    5.00       6-15-2022        5,020,000        5,439,572  

New Jersey EDA Unrefunded Bond Motor Vehicle Surcharges Series A (National Insured)

    5.25       7-1-2026        2,320,000        2,767,946  

New Jersey Educational Facilities Authority

    5.00       6-15-2026        3,015,000        3,397,483  

New Jersey Sports & Exposition Authority (National Insured)

    5.50       3-1-2022        1,755,000        1,917,460  

 

The accompanying notes are an integral part of these financial statements.

 

 

24  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue (continued)  

New Jersey Transportation Trust Fund Authority System Bond Series A

    5.00 %       12-15-2039      $ 2,000,000      $ 2,332,900  

New Jersey TTFA Series A

    5.00       6-15-2020        4,000,000        4,064,520  

New Jersey TTFA Series A

    5.25       6-15-2024        1,695,000        1,794,632  

New Jersey TTFA Series A

    5.25       6-15-2025        2,000,000        2,106,820  
     51,259,652  
  

 

 

 
Tax Revenue: 0.22%  

Gardens NJ Preservation Trust Open & Farmland Series A (AGM Insured)

    5.75       11-1-2028        5,000,000        6,258,350  
         

 

 

 
Tobacco Revenue: 0.09%  

New Jersey EDA Cigarette Tax Refunding Bond

    5.00       6-15-2021        2,500,000        2,621,675  
         

 

 

 
Transportation Revenue: 0.38%  

New Jersey TTFA Series A

    5.25       12-15-2020        1,305,000        1,352,372  

New Jersey TTFA Series C

    5.25       6-15-2032        2,500,000        2,844,850  

New Jersey TTFA Unrefunded Balance Bond (National Insured)

    5.25       12-15-2021        6,000,000        6,444,000  
     10,641,222  
  

 

 

 
     99,531,411  
  

 

 

 

New Mexico: 0.61%

 

GO Revenue: 0.12%  

Albuquerque, Bernalillo & Sandoval Counties NM Municipal School District #12

    5.00       8-1-2025        400,000        481,556  

Albuquerque, Bernalillo & Sandoval Counties NM Municipal School District #12

    5.00       8-1-2026        1,205,000        1,483,970  

Albuquerque, Bernalillo & Sandoval Counties NM Municipal School District #12

    5.00       8-1-2034        1,150,000        1,440,065  
     3,405,591  
  

 

 

 
Housing Revenue: 0.03%  

New Mexico Mortgage Finance Authority SFMR Class I Series A (GNMA/FNMA/FHLMC Insured)

    4.63       9-1-2025        665,000        667,753  

New Mexico Mortgage Finance Authority SFMR Class I Series B (GNMA/FNMA/FHLMC Insured)

    5.00       3-1-2028        240,000        244,747  
     912,500  
  

 

 

 
Miscellaneous Revenue: 0.42%  

Clayton NM Jail Project Improvement & Refunding Bond (National Insured)

    5.00       11-1-2028        9,265,000        10,666,146  

Clayton NM Jail Project Improvement & Refunding Bond (National Insured)

    5.00       11-1-2029        1,000,000        1,147,010  
     11,813,156  
  

 

 

 
Water & Sewer Revenue: 0.04%  

Albuquerque & Bernalillo Counties NM Water Utility Authority Series B

    5.00       7-1-2024        1,000,000        1,165,690  
         

 

 

 
     17,296,937  
  

 

 

 

New York: 7.90%

 

Airport Revenue: 0.06%  

Port Authority New York & New Jersey Special Obligation

    5.00       12-1-2020        1,575,000        1,626,566  
         

 

 

 
Education Revenue: 0.60%  

Dutchess County NY Local Development Corporation The Culinary Institute of America Project Series A-1

    5.00       7-1-2027        335,000        399,591  

Hempstead NY Local Development Corporation The Academy Charter School Project Series A

    6.24       2-1-2047        1,750,000        1,922,743  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  25


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Education Revenue (continued)  

Hempstead Town NY Local Development Corporation The Academy Charter School Project Series A

    5.89 %       2-1-2032      $ 2,745,000      $ 3,009,810  

Hempstead Town NY Local Development Corporation The Academy Charter School Project Series A

    7.65       2-1-2044        2,700,000        2,792,961  

Monroe County NY Industrial Development Monroe Community College Project Series A (AGM Insured)

    5.00       1-15-2022        790,000        846,319  

Monroe County NY Industrial Development Monroe Community College Project Series A (AGM Insured)

    5.00       1-15-2023        645,000        716,105  

Monroe County NY Industrial Development Monroe Community College Project Series A (AGM Insured)

    5.00       1-15-2024        905,000        1,034,985  

Monroe County NY Industrial Development St. John Fisher College Project Series A

    5.00       6-1-2020        2,125,000        2,157,895  

Niagara NY Area Development Corporation

    5.00       5-1-2020        1,160,000        1,174,778  

Niagara NY Area Development Corporation

    5.00       5-1-2022        1,350,000        1,470,650  

Troy NY Capital Resource Corporation Rensselaer Polytechnic Series B

    5.00       9-1-2020        1,430,000        1,465,264  
     16,991,101  
  

 

 

 
GO Revenue: 0.73%  

Hempstead Town Nassau County NY Public Improvement Series A

    4.00       6-15-2028        5,000,000        5,801,600  

Nassau County NY

    5.00       10-1-2024        4,965,000        5,817,987  

New York NY Series B

    5.00       12-1-2032        2,000,000        2,431,880  

New York NY Series C

    5.00       8-1-2031        5,000,000        5,834,050  

Yonkers NY Series A (AGM Insured)

    5.00       10-1-2024        1,000,000        1,070,790  
     20,956,307  
  

 

 

 

Industrial Development Revenue: 0.07%

 

Monroe County NY IDAG Continuing Development Services Project (Citizens Bank LOC) ø

    1.74       7-1-2027        900,000        900,000  

New York Liberty Development Corporation Refunding Bond

    2.80       9-15-2069        1,000,000        1,007,510  
     1,907,510  
  

 

 

 

Miscellaneous Revenue: 0.34%

 

New York Dormitory Authority Series D

    5.00       10-1-2031        2,005,000        2,501,999  

New York NY Transitional Finance Authority Building Aid Bond Series S-1

    5.00       7-15-2032        2,500,000        3,077,000  

New York NY Trust for Cultural Resources Series A-1

    5.00       7-1-2031        2,475,000        2,565,932  

New York Tender Option Bond Trust Receipts/Floater Certificates Series 2019-BAML3002 (Bank of America NA LIQ) 144Aø

    1.69       1-15-2056        1,426,396        1,426,396  
     9,571,327  
  

 

 

 

Tax Revenue: 3.03%

 

New York Convention Center Development Corporation

    5.00       11-15-2028        8,000,000        9,630,720  

New York Dormitory Authority Series A

    5.00       3-15-2028        5,000,000        5,901,050  

New York Dormitory Authority Series A

    5.00       2-15-2031        3,000,000        3,635,520  

New York Dormitory Authority Series A

    5.00       3-15-2033        10,000,000        12,588,200  

New York Dormitory Authority Series B (Ambac Insured)

    5.50       3-15-2025        3,885,000        4,717,206  

New York Dormitory Authority Series D %%

    4.00       2-15-2039        5,000,000        5,710,200  

New York Dormitory Authority Series E

    5.00       3-15-2035        15,000,000        18,747,000  

New York Metropolitan Transportation Authority Series A

    5.00       11-15-2024        6,010,000        6,681,918  

New York NY Transitional Finance Authority Series B

    5.00       8-1-2027        1,115,000        1,302,967  

New York NY Transitional Finance Authority Series C

    5.00       11-1-2027        5,000,000        5,940,950  

New York NY Transitional Finance Authority Subordinate Bond Series B-1

    5.00       11-1-2028        1,000,000        1,199,620  

New York Urban Development Corporation Personal Income Tax Series A

    5.00       3-15-2031        3,815,000        4,369,091  

New York Urban Development Corporation Personal income Tax Series A

    5.00       3-15-2032        5,000,000        5,981,550  
     86,405,992  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

26  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Tobacco Revenue: 0.03%

 

Suffolk NY Tobacco Asset Securitization Corporation Tobacco Settlement Series B

    4.00 %       6-1-2022      $ 420,000      $ 436,447  

Suffolk NY Tobacco Asset Securitization Corporation Tobacco Settlement Series B

    5.00       6-1-2023        500,000        530,995  
     967,442  
  

 

 

 

Transportation Revenue: 2.42%

 

New York Metropolitan Transportation Authority Series A

    5.00       11-15-2030        4,010,000        4,415,692  

New York Metropolitan Transportation Authority Series C

    5.25       11-15-2028        5,000,000        6,020,600  

New York Metropolitan Transportation Authority Series C

    5.25       11-15-2029        11,100,000        13,323,108  

New York Metropolitan Transportation Authority Series C

    5.25       11-15-2030        8,350,000        9,989,356  

New York Metropolitan Transportation Authority Series C

    5.25       11-15-2031        9,050,000        10,802,623  

New York Metropolitan Transportation Authority Series D

    5.00       11-15-2027        2,000,000        2,270,580  

New York Metropolitan Transportation Authority Series F

    5.00       11-15-2028        2,450,000        2,701,199  

Triborough NY Bridges & Tunnels Authority Series B

    5.00       11-15-2030        6,000,000        8,029,140  

Triborough NY Bridges & Tunnels Authority Series C

    5.00       11-15-2034        4,000,000        5,025,280  

Triborough NY Bridges & Tunnels Authority Series C

    5.00       11-15-2035        5,000,000        6,263,150  
     68,840,728  
  

 

 

 

Utilities Revenue: 0.33%

 

New York Utility Debt Securitization Authority

    5.00       12-15-2032        1,250,000        1,425,463  

New York Utility Debt Securitization Authority

    5.00       12-15-2033        6,575,000        7,888,422  
     9,313,885  
  

 

 

 

Water & Sewer Revenue: 0.29%

 

Nassau NY Water Authority Series A

    5.00       4-1-2027        350,000        414,264  

Nassau NY Water Authority Series A

    5.00       4-1-2028        300,000        354,126  

Nassau NY Water Authority Series B

    5.00       4-1-2024        400,000        462,608  

Nassau NY Water Authority Series B

    5.00       4-1-2026        755,000        896,117  

New York NY Municipal Water Finance Authority Series GG

    5.00       6-15-2029        1,295,000        1,547,564  

New York NY Municipal Water Finance Authority Series HH

    5.00       6-15-2037        4,000,000        4,686,600  
     8,361,279  
  

 

 

 
     224,942,137  
  

 

 

 

North Carolina: 0.10%

 

Miscellaneous Revenue: 0.10%  

North Carolina Grant Anticipation Vehicle Bond

    5.00       3-1-2029        2,470,000        2,885,405  

Onslow County NC Limited Obligation Series A

    4.00       6-1-2022        90,000        95,989  
     2,981,394  
  

 

 

 

North Dakota: 0.00%

 

Housing Revenue: 0.00%  

North Dakota Housing Finance Agency Series D

    4.50       1-1-2029        55,000        55,000  
         

 

 

 

Ohio: 2.17%

 

Education Revenue: 0.04%  

Summit County OH Port Authority University of Akron Student Housing Project

    5.25       1-1-2024        685,000        712,688  

Summit County OH Port Authority University of Akron Student Housing Project

    5.25       1-1-2024        315,000        327,893  
     1,040,581  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  27


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

GO Revenue: 0.08%

 

Columbus OH Various Purposes Series 2

    5.00 %       7-1-2026      $ 1,775,000      $ 2,184,173  
         

 

 

 
Health Revenue: 0.29%  

Montgomery OH Hospital Facilities Refunding Bond Series A

    4.00       11-15-2038        7,500,000        8,202,975  
         

 

 

 
Housing Revenue: 0.15%  

Mizuho Tender Option Bond Trust Receipts/Floater Certificates Series 2019-MIZ9001 (Mizuho Bank Limited LOC) 144Aø

    1.84       1-1-2032        4,400,000        4,400,000  
         

 

 

 
Miscellaneous Revenue: 1.17%  

Cincinnati OH City School District Improvement Project Certificate of Participation

    5.00       12-15-2024        4,815,000        5,663,066  

Cincinnati OH City School District Improvement Project Certificate of Participation

    5.00       12-15-2025        2,095,000        2,457,645  

Clermont County OH Port Authority West Clermont Local School District Project (BAM Insured)

    5.00       12-1-2025        500,000        597,115  

Clermont County OH Port Authority West Clermont Local School District Project (BAM Insured)

    5.00       12-1-2026        600,000        712,836  

Clermont County OH Port Authority West Clermont Local School District Project (BAM Insured)

    5.00       12-1-2028        1,250,000        1,476,825  

JobsOhio Beverage System Statewide Liquor Profits Senior Lien Series A

    5.00       1-1-2022        2,500,000        2,691,300  

Ohio Building Authority Series A

    5.00       10-1-2024        1,000,000        1,065,900  

Ohio Water Development Authority Fresh Water

    5.00       6-1-2028        14,000,000        17,862,180  

RiverSouth OH Lazarus Building Redevelopment Series A

    5.75       12-1-2027        770,000        771,971  
     33,298,838  
  

 

 

 
Tax Revenue: 0.11%  

Cleveland OH Subordinate Lien Income Tax Refunding Bond Series B-1

    5.00       10-1-2030        2,500,000        3,119,450  
         

 

 

 
Transportation Revenue: 0.04%  

Ohio Turnpike Commission Junior Lien Infrastructure Projects Series A-1

    5.25       2-15-2029        1,000,000        1,118,120  
         

 

 

 
Utilities Revenue: 0.25%  

Cleveland OH Public Power System Refunding Bond (AGM Insured)

    5.00       11-15-2033        625,000        762,981  

Hamilton OH Electric System Improvement and Refunding Bond (BAM Insured)

    4.00       10-1-2034        710,000        797,827  

Hamilton OH Electric System Improvement and Refunding Bond

    4.00       10-1-2035        1,000,000        1,121,040  

Lancaster OH Port Authority Gas Supply

    5.00       8-1-2049        3,000,000        3,473,070  

Ohio Air Quality Development Authority Ohio Valley Electric Corporation Project Series A

    3.25       9-1-2029        1,000,000        1,031,980  
     7,186,898  
  

 

 

 
Water & Sewer Revenue: 0.04%  

Ohio Water Development Authority Pollution Control Series A

    5.00       12-1-2031        1,000,000        1,231,820  
         

 

 

 
     61,782,855  
  

 

 

 
Oklahoma: 2.49%  
Airport Revenue: 0.20%  

Tulsa OK Airports Improvement Trust Series D (BAM Insured)

    5.00       6-1-2021        1,185,000        1,202,846  

Tulsa OK Airports Improvement Trust Series D (BAM Insured)

    5.00       6-1-2022        520,000        527,727  

Tulsa OK Airports Improvement Trust Series D (BAM Insured)

    5.00       6-1-2025        1,200,000        1,217,724  

Tulsa OK Airports Improvement Trust Series D (BAM Insured)

    5.00       6-1-2026        1,250,000        1,268,463  

Tulsa OK Airports Improvement Trust Series D (BAM Insured)

    5.00       6-1-2027        1,000,000        1,014,770  

Tulsa OK Airports Improvement Trust Series D (BAM Insured)

    5.00       6-1-2028        500,000        507,450  
     5,738,980  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

28  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue: 1.96%  

Cache OK Educational Facilities Authority Cache Public Schools Project Series A

    5.00 %       9-1-2024      $ 2,905,000      $ 3,353,096  

Cache OK Educational Facilities Authority Cache Public Schools Project Series A

    5.00       9-1-2025        3,055,000        3,614,309  

Canadian County OK Education Facilities Authority Mustang Public Schools Project

    4.00       9-1-2025        1,110,000        1,262,403  

Canadian County OK Education Facilities Authority Mustang Public Schools Project

    5.00       9-1-2027        2,000,000        2,421,240  

Canadian County OK Education Facilities Authority Mustang Public Schools Project

    5.00       9-1-2028        2,180,000        2,625,570  

Carter County OK Public Facilities Authority Educational Facilities Plainview Public School Project

    5.00       12-1-2026        1,000,000        1,220,300  

Carter County OK Public Facilities Authority Educational Facilities Plainview Public School Project

    5.00       12-1-2027        1,000,000        1,213,960  

Carter County OK Public Facilities Authority Educational Facilities Plainview Public School Project

    5.00       12-1-2028        1,285,000        1,548,811  

Cleveland County OK Educational Facilities Authority Noble Public Schools Project

    5.00       9-1-2027        700,000        867,069  

Cleveland County OK Educational Facilities Authority Noble Public Schools Project

    5.00       9-1-2028        400,000        492,916  

Cleveland County OK Educational Facilities Authority Noble Public Schools Project

    5.00       9-1-2029        250,000        306,438  

Cleveland County OK Educational Facilities Authority Noble Public Schools Project

    5.00       9-1-2031        675,000        819,626  

Comanche County OK Educational Facilities Authority Elgin Public Schools Project Series A

    5.00       12-1-2032        1,600,000        1,926,528  

Cushing OK Educational Facilities Authority

    5.00       9-1-2022        2,210,000        2,414,536  

Custer County OK EDA Thomas-Fay-Custer Public Schools Project

    4.00       12-1-2027        1,255,000        1,441,292  

Custer County OK EDA Thomas-Fay-Custer Public Schools Project

    4.00       12-1-2029        1,430,000        1,661,331  

Dewey County OK Educational Facilities Authority Seiling Public Schools Project

    5.00       9-1-2026        1,230,000        1,497,525  

Dewey County OK Educational Facilities Authority Seiling Public Schools Project

    5.00       9-1-2027        1,240,000        1,502,905  

Garvin County OK Educational Facilities Authority Lindsay Public Schools Project

    5.00       9-1-2020        455,000        465,551  

Garvin County OK Educational Facilities Authority Lindsay Public Schools Project

    5.00       9-1-2026        1,000,000        1,164,430  

Garvin County OK Educational Facilities Authority Lindsay Public Schools Project

    5.00       9-1-2027        1,245,000        1,446,976  

Grady County OK Educational Facilities Tuttle Public Schools Project

    5.00       9-1-2023        1,000,000        1,131,460  

Grady County OK Educational Facilities Tuttle Public Schools Project

    5.00       9-1-2024        1,075,000        1,251,343  

Grady County OK Educational Facilities Tuttle Public Schools Project

    5.00       9-1-2025        500,000        596,015  

Grady County OK Educational Facilities Tuttle Public Schools Project

    5.00       9-1-2028        1,160,000        1,366,642  

Mcclain County OK EDA Educational Facilities Blanchard Public Schools Project

    4.00       9-1-2027        600,000        694,146  

Mcclain County OK EDA Educational Facilities Blanchard Public Schools Project

    4.00       9-1-2028        670,000        783,203  

Mcclain County OK EDA Educational Facilities Blanchard Public Schools Project

    4.00       9-1-2029        615,000        725,017  

Muskogee OK Industrial Trust Educational Facilities

    4.00       9-1-2029        3,000,000        3,456,780  

Muskogee OK Industrial Trust Educational Facilities

    4.00       9-1-2032        3,000,000        3,360,510  

Muskogee OK Industrial Trust Educational Facilities

    5.00       9-1-2020        1,250,000        1,277,813  

Muskogee OK Industrial Trust Educational Facilities

    5.00       9-1-2021        1,000,000        1,055,490  

Muskogee OK Industrial Trust Educational Facilities

    5.00       9-1-2022        1,000,000        1,088,170  

Oklahoma Development Finance Authority

    4.00       6-1-2023        1,270,000        1,387,005  

Oklahoma Development Finance Authority

    5.00       6-1-2023        1,230,000        1,385,152  

Oklahoma Development Finance Authority State System of Higher Education Series B

    5.00       6-1-2030        500,000        636,285  

Oklahoma Development Finance Authority State System of Higher Education Series B

    5.00       6-1-2031        520,000        658,684  

Oklahoma Development Finance Authority State System of Higher Education Series B

    5.00       6-1-2032        550,000        693,341  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  29


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue (continued)  

Tulsa County OK Industrial Authority Educational Facilities Glenpool Public Schools Project Series A

    5.00 %       9-1-2025      $ 880,000      $ 1,044,780  
     55,858,648  
  

 

 

 
Tax Revenue: 0.16%  

Oklahoma City OK Public Property Authority

    5.00       10-1-2026        1,495,000        1,776,837  

Oklahoma City OK Public Property Authority

    5.00       10-1-2027        1,140,000        1,352,336  

Oklahoma City OK Public Property Authority

    5.00       10-1-2028        1,265,000        1,496,862  
     4,626,035  
  

 

 

 
Utilities Revenue: 0.14%  

Claremore OK Public Works Authority

    4.00       6-1-2022        2,595,000        2,756,824  

Claremore OK Public Works Authority

    4.00       6-1-2023        1,010,000        1,071,459  
     3,828,283  
  

 

 

 
Water & Sewer Revenue: 0.03%  

McGee Creek OK Authority (National Insured)

    6.00       1-1-2023        710,000        757,279  
         

 

 

 
     70,809,225  
  

 

 

 

Oregon: 0.60%

 

GO Revenue: 0.49%  

Benton & Linn Counties OR Corvallis School District Series B (AGM Insured)

    5.00       6-15-2031        5,110,000        6,443,812  

Washington & Multnomah Counties OR Beaverton School District Series D (AGM Insured)

    5.00       6-15-2035        1,500,000        1,836,210  

Washington County OR Full Faith & Credit Obligations Series B

    5.00       3-1-2022        5,345,000        5,793,499  
     14,073,521  
  

 

 

 
Health Revenue: 0.11%  

Medford OR Hospital Facilities Authority

    5.00       10-1-2020        1,155,000        1,185,307  

Oregon Facilities Authority Samaritan Health Services Project Series A

    5.00       10-1-2026        1,500,000        1,793,415  
     2,978,722  
  

 

 

 
     17,052,243  
  

 

 

 

Pennsylvania: 9.42%

 

Education Revenue: 1.46%  

Adams County PA IDA Gettysburg College Project

    5.00       8-15-2024        1,500,000        1,533,105  

Adams County PA IDA Gettysburg College Project

    5.00       8-15-2025        1,500,000        1,533,105  

Chester County PA IDA Collegium Charter School Project Series A

    5.00       10-15-2027        1,500,000        1,636,140  

Lycoming County PA Authority Pennsylvania College of Technology

    5.50       7-1-2026        4,000,000        4,241,640  

Northampton County PA General Purpose Authority College Refunding Bond

    5.00       11-1-2027        1,000,000        1,261,850  

Northeastern Pennsylvania Hospital & Education Authority Series A

    5.00       3-1-2026        885,000        1,005,431  

Northeastern Pennsylvania Hospital & Education Authority Series A

    5.00       3-1-2028        660,000        744,731  

Pennsylvania HEFAR Series AQ

    5.00       6-15-2023        6,090,000        6,851,189  

Pennsylvania HEFAR Series AR

    5.00       6-15-2025        1,000,000        1,186,450  

Pennsylvania HEFAR Series AS

    5.00       6-15-2025        1,575,000        1,868,659  

Pennsylvania HEFAR Series AS

    5.00       6-15-2027        2,190,000        2,635,030  

Pennsylvania HEFAR Series LL1

    5.00       11-1-2020        590,000        598,148  

Pennsylvania HEFAR Series LL1

    5.00       11-1-2022        1,310,000        1,362,767  

Pennsylvania Public School Building Authority

    5.00       5-1-2023        2,185,000        2,447,353  

Pennsylvania Public School Building Authority

    5.00       6-15-2025        2,265,000        2,669,099  

Philadelphia PA IDA

    6.13       6-15-2023        795,000        842,159  

 

The accompanying notes are an integral part of these financial statements.

 

 

30  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Education Revenue (continued)  

Philadelphia PA IDA

    5.88 %       6-15-2022      $ 755,000      $ 786,431  

Philadelphia PA IDA

    7.00       5-1-2026        740,000        779,494  

Philadelphia PA IDA Master Charter School Aid

    5.00       8-1-2020        110,000        112,379  

Philadelphia PA IDA Thomas Jefferson University Series B ø

    1.78       9-1-2050        5,000,000        5,000,000  

Philadelphia PA IDA West Philadelphia Achievement Charter Elementary School Project

    6.25       5-1-2021        125,000        128,261  

Philadelphia PA Public School Building Authority (BAM Insured)

    5.00       6-15-2026        2,000,000        2,341,980  
     41,565,401  
  

 

 

 
GO Revenue: 3.21%  

Allegheny County PA Moon Area School District Series A

    5.00       11-15-2024        3,400,000        3,928,598  

Allegheny County PA Series 72

    5.25       12-1-2033        4,000,000        4,559,680  

Allegheny County PA Shaler Area School District (BAM Insured)

    5.00       9-1-2038        2,300,000        2,834,428  

Central Dauphin PA School District

    5.00       2-1-2030        1,110,000        1,339,448  

Chester and Lancaster Counties PA Octorara Area School District (AGM Insured) %%

    4.00       4-1-2029        1,000,000        1,172,420  

Johnstown PA School District (AGM Insured)

    5.00       8-1-2024        2,730,000        2,877,038  

Norristown PA Area School District Montgomery County Series 2018 (BAM Insured)

    5.00       9-1-2035        2,035,000        2,400,974  

Pennsylvania Hills PA School District (BAM Insured)

    4.00       10-1-2021        1,460,000        1,532,942  

Philadelphia PA (AGM Insured)

    5.00       8-1-2025        7,000,000        8,402,170  

Philadelphia PA School District Refunding Bond Series C

    5.00       9-1-2021        2,200,000        2,333,672  

Philadelphia PA School District Refunding Bond Series D

    5.00       9-1-2022        3,750,000        4,110,488  

Philadelphia PA School District Refunding Bond Series E

    5.25       9-1-2021        1,490,000        1,529,798  

Philadelphia PA School District Refunding Bond Series F

    5.00       9-1-2028        5,000,000        5,963,000  

Philadelphia PA School District Refunding Bond Series F

    5.00       9-1-2029        5,000,000        5,938,400  

Philadelphia PA School District Refunding Bond Series F

    5.00       9-1-2031        1,240,000        1,462,208  

Philadelphia PA School District Refunding Bond Series F

    5.00       9-1-2032        1,000,000        1,176,240  

Philadelphia PA Series A

    5.00       8-1-2024        1,000,000        1,164,210  

Philadelphia PA Series A

    5.00       7-15-2026        3,000,000        3,424,440  

Philadelphia PA Series A

    5.00       8-1-2027        1,500,000        1,859,850  

Philadelphia PA Series A

    5.00       8-1-2033        2,000,000        2,415,420  

Philadelphia PA Series A

    5.25       7-15-2028        2,590,000        2,956,925  

Philadelphia PA Series A

    5.25       7-15-2029        4,410,000        5,004,997  

Philadelphia PA Series A

    5.25       7-15-2032        4,380,000        4,943,399  

Pittsburgh PA Moon Area School District Series A

    5.00       11-15-2029        1,000,000        1,140,260  

Pittsburgh PA Series A

    4.00       9-1-2022        1,000,000        1,073,880  

Pittsburgh PA Series A

    5.00       9-1-2022        2,060,000        2,266,000  

Pittsburgh PA Series A

    5.00       9-1-2023        3,810,000        4,188,905  

Reading Berks PA Series A (BAM Insured)

    5.00       11-1-2026        1,000,000        1,198,170  

Reading PA School District

    5.00       4-1-2021        3,120,000        3,250,915  

Reading PA School District (AGM Insured)

    5.00       3-1-2037        2,000,000        2,354,080  

Reading PA School District (AGM Insured)

    5.00       3-1-2038        1,735,000        2,029,412  

Scranton Lackawanna County PA School District Bond Series A (BAM Insured)

    5.00       6-1-2037        500,000        599,840  
     91,432,207  
  

 

 

 
Health Revenue: 1.34%  

Allegheny County PA Hospital Development Authority Series A

    4.00       7-15-2035        12,975,000        14,654,354  

Allegheny County PA Hospital Development Authority Series A

    5.00       7-15-2031        3,750,000        4,722,938  

Allegheny County PA Hospital Development Authority Series B (National Insured)

    6.00       7-1-2025        2,605,000        3,229,783  

Berks County PA Municipal Authority Reading Hospital & Medical Center Project Series B (SIFMA Municipal Swap +1.50%) ±

    3.11       11-1-2039        10,000,000        10,102,700  

Cumberland County PA Diakon Lutheran Social Ministries Project

    5.00       1-1-2025        1,340,000        1,514,240  

Cumberland County PA Diakon Lutheran Social Ministries Project

    5.00       1-1-2026        1,370,000        1,544,031  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  31


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue (continued)  

Cumberland County PA Diakon Lutheran Social Ministries Project

    5.00 %       1-1-2027      $ 1,225,000      $ 1,376,300  

Montgomery County PA HEFA Thomas Jefferson University

    4.00       9-1-2037        1,000,000        1,115,150  
     38,259,496  
  

 

 

 
Miscellaneous Revenue: 1.82%  

Delaware County PA Vocational & Technical School Authority (BAM Insured)

    5.25       11-1-2033        2,000,000        2,245,680  

Pennsylvania Certificate of Participation Municipal Real Estate Payment Series A

    5.00       7-1-2028        400,000        497,312  

Pennsylvania Certificate of Participation Municipal Real Estate Payment Series A

    5.00       7-1-2029        300,000        371,175  

Pennsylvania Certificate of Participation Municipal Real Estate Payment Series A

    5.00       7-1-2030        375,000        461,655  

Pennsylvania Certificate of Participation Retained Basic Lease Payment (AGM Insured)

    5.00       11-1-2022        3,015,000        3,310,289  

Pennsylvania Certificate of Participation Retained Basic Lease Payment (AGM Insured)

    5.00       11-1-2023        1,900,000        2,143,789  

Pennsylvania Certificate of Participation Retained Basic Lease Payment (AGM Insured)

    5.00       11-1-2024        1,660,000        1,925,368  

Pennsylvania Public School Building Authority (BAM Insured)

    4.00       5-15-2021        500,000        518,915  

Pennsylvania Public School Building Authority (BAM Insured)

    4.00       5-15-2022        1,000,000        1,036,840  

Pennsylvania Public School Building Authority

    5.00       4-1-2020        5,600,000        5,651,240  

Pennsylvania Public School Building Authority

    5.00       4-1-2029        1,000,000        1,086,210  

Pennsylvania Public School Building Authority Chester Upland School District Project Series B

    5.25       9-15-2030        1,995,000        2,440,384  

Pennsylvania Public School Building Authority City of Harrisburg Project Series A (AGM Insured)

    5.00       12-1-2028        3,500,000        4,170,950  

Pennsylvania Public School Building Authority City of Harrisburg Project Series A (AGM Insured)

    5.00       12-1-2033        4,425,000        5,175,436  

Pennsylvania Public School Building Authority Philadelphia School District Project

    5.00       4-1-2024        2,000,000        2,172,420  

Pennsylvania Public School Building Authority Series B (AGM Insured)

    5.00       6-1-2029        2,000,000        2,510,320  

Pennsylvania Public School Building Authority Series B-2 (BAM Insured)

    5.00       12-1-2024        1,250,000        1,458,188  

Pennsylvania Public School Building Authority Series B-2 (BAM Insured)

    5.00       12-1-2025        1,250,000        1,451,963  

Pennsylvania Public School Building Authority Series B-2 (BAM Insured)

    5.00       12-1-2026        1,250,000        1,447,525  

Pennsylvania Public School Building Authority Series B-2 (BAM Insured)

    5.00       12-1-2027        1,010,000        1,166,146  

Philadelphia PA Municipal Authority Juvenile Justice Services Center

    5.00       4-1-2031        3,630,000        4,353,822  

Philadelphia PA Municipal Authority Juvenile Justice Services Center

    5.00       4-1-2034        1,800,000        2,143,710  

Southeastern Pennsylvania Transportation Authority

    5.00       3-1-2028        725,000        910,252  

York County PA School of Technology Authority Series A (BAM Insured)

    5.00       2-15-2024        1,590,000        1,819,358  

York County PA School of Technology Authority Series B (BAM Insured)

    5.00       2-15-2027        800,000        922,312  

York County PA School of Technology Authority Series B (BAM Insured)

    5.00       2-15-2029        500,000        572,725  
     51,963,984  
  

 

 

 
Resource Recovery Revenue: 0.23%  

Lancaster County PA Solid Waste Management Authority Series A

    5.25       12-15-2028        5,665,000        6,454,021  
         

 

 

 
Tobacco Revenue: 0.22%  

Commonwealth Financing Authority Tobacco Master Settlement Payment

    5.00       6-1-2027        2,500,000        3,066,025  

Commonwealth Financing Authority Tobacco Master Settlement Payment

    5.00       6-1-2028        2,500,000        3,117,500  
     6,183,525  
  

 

 

 
Transportation Revenue: 0.79%  

Lancaster PA Parking Authority Series A (BAM Insured)

    4.00       9-1-2038        1,000,000        1,100,800  

Pennsylvania Turnpike Commission Motor License Refunding Bond

    5.00       6-1-2027        1,000,000        1,236,600  

 

The accompanying notes are an integral part of these financial statements.

 

 

32  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Transportation Revenue (continued)  

Pennsylvania Turnpike Commission Refunding Bond

    5.00 %       12-1-2033      $ 3,780,000      $ 4,348,210  

Pennsylvania Turnpike Commission Refunding Bond (AGM Insured)

    6.00       12-1-2030        4,220,000        5,392,400  

Pennsylvania Turnpike Commission Subordinate Bond Series B

    5.00       6-1-2031        5,000,000        6,031,150  

Pennsylvania Turnpike Commission Subordinate Bond Series C (AGM Insured)

    6.25       6-1-2033        1,350,000        1,696,937  

Pennsylvania Turnpike Commission Subordinate Bond Series E

    6.38       12-1-2038        2,000,000        2,596,140  
     22,402,237  
  

 

 

 
Water & Sewer Revenue: 0.35%  

Bucks County PA Water & Sewer Authority Water System (AGM Insured)

    5.00       12-1-2026        2,400,000        2,578,872  

Pennsylvania Capital Region Water Sewer System

    5.00       7-15-2030        1,180,000        1,435,387  

Pennsylvania Capital Region Water System

    5.00       7-15-2030        1,500,000        1,863,030  

Philadelphia PA Water and Wastewater Bond Series B

    5.00       11-1-2027        1,535,000        1,936,940  

Philadelphia PA Water and Wastewater Bond Series B

    5.00       11-1-2033        1,760,000        2,148,414  
     9,962,643  
  

 

 

 
     268,223,514  
  

 

 

 

South Carolina: 0.48%

         
Education Revenue: 0.29%                          

South Carolina Education Assistance Authority Student Loan Series I

    5.00       10-1-2024        1,345,000        1,345,578  

South Carolina Jobs EDA Furman University Project

    5.00       10-1-2028        700,000        829,325  

South Carolina Jobs EDA Furman University Project

    5.00       10-1-2030        1,885,000        2,223,112  

South Carolina Jobs EDA Furman University Project

    5.00       10-1-2031        2,155,000        2,540,551  

South Carolina Jobs EDA York Preparatory Academy Project Series A

    7.00       11-1-2033        1,090,000        1,211,470  
     8,150,036  
  

 

 

 
Miscellaneous Revenue: 0.19%  

Laurens County SC Education Assistance for District #55

    5.00       12-1-2021        1,000,000        1,071,180  

Laurens County SC Education Assistance for District #55

    5.00       12-1-2022        1,250,000        1,366,963  

Laurens County SC Education Assistance for District #55

    5.00       12-1-2025        1,000,000        1,178,140  

Scago SC Educational Facilities Corporation for Sumter County School District #17

    5.00       12-1-2022        1,720,000        1,883,004  
     5,499,287  
  

 

 

 
     13,649,323  
  

 

 

 

South Dakota: 0.03%

 

Airport Revenue: 0.03%  

Rapid City SD Airport Project

    6.25       12-1-2026        920,000        920,000  
         

 

 

 

Tennessee: 1.04%

 

Education Revenue: 0.03%  

Franklin County TN HEFA

    4.00       9-1-2024        250,000        266,703  

Franklin County TN HEFA

    5.00       9-1-2030        560,000        610,602  
     877,305  
  

 

 

 
GO Revenue: 0.02%  

White County TN

    4.05       6-1-2020        515,000        521,015  
         

 

 

 
Housing Revenue: 0.11%  

Chattanooga TN Health Educational & Housing Facilities University of Tennessee at Chattanooga Project

    5.00       10-1-2023        750,000        838,455  

Greeneville TN HEFA People Road Portfolio Project

    1.45       12-1-2022        2,215,000        2,214,513  
     3,052,968  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  33


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Utilities Revenue: 0.88%  

Tennessee Energy Acquisition Corporation Gas Project

    4.00 %       11-1-2049      $ 11,000,000      $ 12,226,720  

Tennessee Energy Acquisition Corporation Series A

    4.00       5-1-2048        12,120,000        12,973,127  
     25,199,847  
  

 

 

 
     29,651,135  
  

 

 

 

Texas: 10.71%

 

Airport Revenue: 0.44%  

Galveston TX Wharves & Terminal

    5.00       2-1-2026        2,000,000        2,065,820  

Houston TX Airport System Subordinate Lien Refunding Bonds Series D

    5.00       7-1-2033        3,000,000        3,719,370  

Houston TX Airport System Subordinate Lien Refunding Bonds Series D

    5.00       7-1-2034        3,500,000        4,329,255  

Houston TX Airport System Subordinate Lien Refunding Bonds Series D

    5.00       7-1-2035        2,000,000        2,467,240  
     12,581,685  
  

 

 

 
Education Revenue: 0.39%  

Houston TX Higher Education Finance Corporation Series A

    4.00       2-15-2022        395,000        404,875  

North Texas Higher Education Authority Incoming Student Loan Series A-2 (3 Month LIBOR +0.90%) ±

    3.00       7-1-2030        4,560,000        4,581,842  

Texas Woman’s University Financing System

    4.00       7-1-2020        1,000,000        1,013,960  

University of Houston Texas Series B

    5.25       7-1-2026        4,225,000        5,270,476  
     11,271,153  
  

 

 

 
GO Revenue: 5.70%  

Austin TX Independent School District Series B

    5.00       8-1-2023        3,805,000        4,320,159  

Austin TX Independent School District Series B

    5.00       8-1-2024        3,970,000        4,648,910  

Austin TX Independent School District Series B

    5.00       8-1-2025        2,050,000        2,465,535  

Austin TX Independent School District Series B

    5.00       8-1-2026        1,450,000        1,733,910  

Austin TX Public Improvement Bond

    5.00       9-1-2030        960,000        1,192,733  

Bexar County TX Combination Tax Certificate of Obligation

    5.00       6-15-2024        1,000,000        1,164,140  

Bexar County TX Flood Control Refunding Bond

    4.00       6-15-2033        3,000,000        3,325,500  

Bexar County TX Hospital District Refunding Bond

    5.00       2-15-2037        1,250,000        1,526,350  

Collin County TX Unlimited Tax Road & Refunding Bond

    5.00       2-15-2023        1,350,000        1,507,977  

Collin County TX Unlimited Tax Road & Refunding Bond

    5.00       2-15-2026        1,000,000        1,188,440  

Collin County TX Unlimited Tax Road & Refunding Bond

    5.00       2-15-2027        1,300,000        1,540,734  

Coppell TX Independent School District

    4.00       8-15-2035        1,640,000        1,885,606  

Coppell TX Independent School District

    4.00       8-15-2037        1,975,000        2,254,443  

Crane County TX Water District Unlimited Tax Bond

    5.00       2-15-2023        1,395,000        1,549,622  

Crane County TX Water District Unlimited Tax Bond

    5.00       2-15-2026        1,000,000        1,163,580  

Crane County TX Water District Unlimited Tax Bond

    5.00       2-15-2030        1,130,000        1,298,709  

Crane County TX Water District Unlimited Tax Bond

    5.00       2-15-2031        1,000,000        1,145,640  

Dallas County TX Combination Tax and Parking Garage Certification of Obligation

    5.00       8-15-2024        5,600,000        6,557,040  

Dallas County TX Combination Tax and Parking Garage Certification of Obligation

    5.00       8-15-2025        3,235,000        3,892,708  

Del Rio TX Refunding Bond (BAM Insured)

    4.00       6-1-2023        720,000        784,570  

Del Rio TX Refunding Bond (BAM Insured)

    4.00       6-1-2024        745,000        828,254  

Denton County TX Permanent Improvement & Refunding Bond

    5.00       7-15-2023        1,990,000        2,254,033  

Denton County TX Permanent Improvement & Refunding Bond

    5.00       7-15-2024        1,145,000        1,336,261  

Denton County TX Permanent Improvement & Refunding Bond

    5.00       7-15-2025        1,000,000        1,167,360  

Denton County TX Permanent Improvement & Refunding Bond

    5.00       7-15-2030        1,000,000        1,159,860  

El Paso County TX Hospital District

    5.00       8-15-2028        2,045,000        2,224,837  

El Paso County TX Refunding Bond Series A

    5.00       2-15-2031        2,000,000        2,377,820  

El Paso County TX Refunding Bond Series A

    5.00       2-15-2032        2,120,000        2,515,104  

Flower Mound, Denton & Tarrant Counties TX Refunding Bond

    4.00       3-1-2026        755,000        855,007  

 

The accompanying notes are an integral part of these financial statements.

 

 

34  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue (continued)  

Flower Mound, Denton & Tarrant Counties TX Refunding Bond

    5.00 %       3-1-2022      $ 1,000,000      $ 1,082,340  

Flower Mound, Denton & Tarrant Counties TX Refunding Bond

    5.00       3-1-2023        620,000        694,164  

Flower Mound, Denton & Tarrant Counties TX Refunding Bond

    5.00       3-1-2024        1,660,000        1,915,723  

Fort Worth TX Independent School District Unlimited Tax Refunding and School Building Bond

    5.00       2-15-2026        3,000,000        3,650,100  

Harris County TX Cypress-Fairbanks Independent High School Series B-1

    2.13       2-15-2040        10,000,000        10,134,900  

Harris County TX Tax Road Refunding Bond Series 2014-A

    5.00       10-1-2025        8,445,000        9,916,879  

Harris County TX Tax Road Refunding Bond Series 2015-A

    5.00       10-1-2025        4,215,000        5,086,198  

Harris County TX Toll Road Project Series C (AGM Insured)

    5.25       8-15-2027        4,000,000        5,107,120  

Hays County TX Limited Tax Bond

    5.00       2-15-2026        650,000        787,027  

Hays County TX Limited Tax Bond

    5.00       2-15-2027        1,000,000        1,236,750  

Hays County TX Limited Tax Refunding Bond

    5.00       2-15-2023        1,750,000        1,952,510  

Midlothian TX Independent School District Refunding Bond Series C

    2.00       8-1-2051        4,535,000        4,654,452  

Northwest TX Independent School District Refunding Bond

    5.00       2-15-2030        4,000,000        4,665,120  

Plano TX

    5.00       9-1-2030        2,155,000        2,655,089  

San Antonio TX Certificate of Obligation

    5.00       8-1-2036        3,990,000        4,975,969  

San Antonio TX Independent School District Unlimited Tax Series 2018

    5.00       8-15-2037        2,000,000        2,347,520  

Texas Independent School District Refunding Bond

    5.00       8-15-2025        2,260,000        2,718,125  

Texas Tax Revenue Anticipation Notes

    4.00       8-27-2020        31,000,000        31,578,770  

Travis County TX Certificate of Obligation Series A

    5.00       3-1-2038        4,010,000        5,013,944  

Viridian TX Municipal Management District Unlimited Road Improvement Bond (BAM Insured)

    4.00       12-1-2026        610,000        675,898  

Viridian TX Municipal Management District Unlimited Road Improvement Bond (BAM Insured)

    4.00       12-1-2027        635,000        701,485  

Viridian TX Municipal Management District Unlimited Road Improvement Bond (BAM Insured)

    4.00       12-1-2030        710,000        775,739  
     162,190,664  
  

 

 

 
Health Revenue: 0.17%  

Harris County TX Cultural Education Facilities Finance Corporation Memorial Hermann Health System Series B

    5.00       7-1-2049        4,000,000        4,871,040  
         

 

 

 
Housing Revenue: 0.35%  

San Antonio TX Housing Trust Finance Corporation Majestic Ranch Apartments (FHA Insured)

    1.40       7-1-2022        10,000,000        9,999,700  
         

 

 

 
Miscellaneous Revenue: 0.95%  

Austin TX Community College District Public Facility Corporation Bond Series C

    5.00       8-1-2026        565,000        691,814  

Austin TX Community College District Public Facility Corporation Bond Series C

    5.00       8-1-2029        400,000        495,968  

Austin TX Community College District Public Facility Corporation Bond Series C

    5.00       8-1-2030        500,000        617,015  

Lower Colorado River TX Authority

    5.50       5-15-2031        2,500,000        2,825,100  

Nueces River TX Water Supply Facility Corpus Christi Lake Texana Project

    5.00       7-15-2026        1,000,000        1,190,360  

Nueces River TX Water Supply Facility Corpus Christi Lake Texana Project

    5.00       7-15-2027        1,250,000        1,478,575  

Texas PFA Refunding Bond

    4.00       2-1-2033        7,000,000        8,110,410  

Texas Transportation Commission Highway Improvement Series A

    5.00       4-1-2042        5,000,000        5,436,900  

Texas Transportation Commission Refunding Bond Series B

    5.00       10-1-2031        5,000,000        6,214,700  
     27,060,842  
  

 

 

 
Resource Recovery Revenue: 0.33%  

Port Arthur TX Navigation District Jefferson County Environmental Facilities Motiva Enterprises LLC Project Series A ø

    1.70       4-1-2040        1,250,000        1,250,000  

Port Arthur TX Navigation District Jefferson County Environmental Facilities Motiva Enterprises LLC Project Series E ø

    1.70       11-1-2040        8,100,000        8,100,000  
     9,350,000  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  35


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue: 0.43%  

Houston TX Old Spanish Trail Almeda Corridors Redevelopment Authority (BAM Insured)

    4.00 %       9-1-2031      $ 705,000      $ 806,203  

Midtown TX RDA (BAM Insured)

    5.25       1-1-2027        1,880,000        2,082,664  

Midtown TX RDA (BAM Insured)

    5.25       1-1-2029        2,390,000        2,643,197  

Midtown TX RDA (BAM Insured)

    5.25       1-1-2030        1,500,000        1,657,515  

Midtown TX RDA (BAM Insured)

    5.25       1-1-2031        1,000,000        1,103,780  

Texas Transportation Commission Highway Fund Series A

    5.00       10-1-2025        3,250,000        3,921,743  
     12,215,102  
  

 

 

 
Transportation Revenue: 0.76%  

Central Texas Regional Mobility Authority Series B

    5.00       1-1-2045        8,000,000        8,138,240  

Texas Grand Parkway Transportation Corporation System Series A

    5.00       10-1-2034        1,500,000        1,856,175  

Texas Private Activity Bond Surface Transportation Corporation

    7.50       6-30-2032        2,000,000        2,061,300  

Texas Private Activity Bond Surface Transportation Corporation

    7.50       6-30-2033        2,000,000        2,060,860  

Texas Private Activity Surface Transportation Corporation Senior Lien Series A

    5.00       12-31-2034        3,000,000        3,720,780  

Texas Private Activity Surface Transportation Corporation Senior Lien Series A

    5.00       12-31-2035        3,000,000        3,708,540  
     21,545,895  
  

 

 

 
Utilities Revenue: 0.71%  

Austin TX Refunding Bond (National Insured)

    5.25       5-15-2025        1,400,000        1,594,964  

Brownsville TX Utilities System Refunding Bond

    5.00       9-1-2026        2,190,000        2,597,909  

Brownsville TX Utilities System Refunding Bond

    5.00       9-1-2029        1,500,000        1,767,090  

Brownsville TX Utilities System Refunding Bond

    5.00       9-1-2030        2,500,000        2,943,150  

Texas Municipal Gas Acquisition & Supply Corporation III Gas Supply Series 2012

    5.00       12-15-2021        3,945,000        4,214,720  

Texas Municipal Gas Acquisition & Supply Corporation Series B

    5.00       12-15-2022        5,000,000        5,513,500  

Weatherford TX Utility System Refunding & Improvement Bond (AGM Insured)

    5.00       9-1-2025        1,000,000        1,187,250  

Weatherford TX Utility System Refunding & Improvement Bond (AGM Insured)

    5.00       9-1-2026        375,000        444,848  
     20,263,431  
  

 

 

 
Water & Sewer Revenue: 0.48%  

Amarillo TX Waterworks and Sewer System Bond Series B

    5.00       4-1-2028        645,000        816,138  

Houston TX Utilities Systems Series A

    5.25       11-15-2031        3,000,000        3,108,390  

North Harris County TX Regional Water Authority Senior Lien (BAM Insured)

    5.00       12-15-2029        1,215,000        1,338,675  

Texas Water Development Board Series A

    5.00       10-15-2031        3,000,000        3,729,390  

Texas Water Development Board State Implementation Series 2018A

    4.00       10-15-2032        3,000,000        3,467,820  

Trinity River TX Authority Electric Company Project Series A

    4.00       2-1-2027        1,000,000        1,147,250  
     13,607,663  
  

 

 

 
     304,957,175  
  

 

 

 

Utah: 0.32%

 

Education Revenue: 0.11%  

Utah Charter School Finance Authority Refunding Bond (CSCE Insured)

    4.00       4-15-2020        250,000        251,890  

Utah Charter School Finance Authority Refunding Bond (CSCE Insured)

    4.00       4-15-2021        400,000        413,384  

Utah Charter School Finance Authority Refunding Bond (CSCE Insured)

    4.00       4-15-2022        400,000        421,788  

Utah Charter School Finance Authority Refunding Bond (CSCE Insured)

    4.00       4-15-2023        400,000        430,980  

Utah Charter School Finance Authority Refunding Bond (CSCE Insured)

    4.00       4-15-2024        450,000        492,638  

Utah Charter School Finance Authority Refunding Bond (CSCE Insured) 144A

    4.50       6-15-2027        1,025,000        1,073,185  
     3,083,865  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

36  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue: 0.07%  

Canyons UT Board of Education Utah School Bond Guaranty Program (AGM Insured)

    5.00 %       6-15-2022      $ 1,860,000      $ 2,036,681  
         

 

 

 
Miscellaneous Revenue: 0.14%  

West Valley City UT Municipal Building Authority (AGM Insured)

    5.00       2-1-2028        1,000,000        1,221,700  

West Valley City UT Municipal Building Authority (AGM Insured)

    5.00       2-1-2032        1,555,000        1,870,603  

West Valley City UT Municipal Building Authority (AGM Insured)

    5.00       2-1-2033        645,000        773,807  
     3,866,110  
  

 

 

 
     8,986,656  
  

 

 

 

Virginia: 0.49%

 

Education Revenue: 0.12%  

Virginia Small Business Financing Authority

    5.25       10-1-2029        3,000,000        3,490,170  
         

 

 

 
Miscellaneous Revenue: 0.01%  

Watkins Centre VA CDA

    5.40       3-1-2020        214,000        214,334  
         

 

 

 
Tax Revenue: 0.08%  

Greater Richmond VA Convention Center

    5.00       6-15-2025        1,000,000        1,186,450  

Marquis VA CDA CAB Series 2015 144A¤

    0.00       9-1-2045        386,000        253,787  

Marquis VA CDA CAB Series C ¤

    0.00       9-1-2041        1,772,000        106,728  

Marquis VA CDA Series B

    5.63       9-1-2041        1,274,000        815,016  
     2,361,981  
  

 

 

 
Transportation Revenue: 0.28%  

Chesapeake VA Bay Bridge & Tunnel District First Tier Generation Resolution

    5.00       11-1-2023        7,000,000        7,934,500  
         

 

 

 
     14,000,985  
  

 

 

 

Washington: 4.02%

 

Education Revenue: 0.04%  

Washington EDFA

    5.00       6-1-2028        1,000,000        1,152,560  
         

 

 

 
GO Revenue: 1.87%  

King & Pierce WA Counties Auburn School District #408 (AGM Insured)

    4.00       12-1-2034        4,075,000        4,743,382  

King County WA Federal Way School District #210 (AGM Insured)

    4.00       12-1-2023        4,085,000        4,516,213  

King County WA Public Hospital District #1 Valley Medical Center Refunding Bond

    5.00       12-1-2029        1,600,000        1,920,208  

King County WA Public Hospital District #1 Valley Medical Center Refunding Bond

    5.00       12-1-2031        6,665,000        7,943,747  

King County WA Public Hospital District #1 Valley Medical Center Refunding Bond

    5.00       12-1-2032        2,905,000        3,452,999  

King County WA Public Hospital District #1 Valley Medical Center Refunding Bond

    5.00       12-1-2033        7,045,000        8,358,329  

Seattle WA Refunding Bond Series A

    5.00       6-1-2024        6,345,000        7,407,661  

Thurston & Pierce Counties WA Community Schools (AGM Insured)

    5.00       12-1-2030        1,415,000        1,796,852  

Washington Various Purposes Bond Series C

    5.00       2-1-2034        5,800,000        6,884,368  

Washington Various Purposes Refunding Bond Series B

    5.00       7-1-2028        4,000,000        4,821,280  

Yakima County WA West Valley School District #208 (AGM Insured)

    5.00       12-1-2032        1,200,000        1,511,736  
     53,356,775  
  

 

 

 
Health Revenue: 0.70%  

Washington HCFR Fred Hutchinson Cancer Research Center (SIFMA Municipal Swap +1.05%) ±

    2.66       1-1-2042        10,000,000        10,173,400  

Washington HCFR Fred Hutchinson Cancer Research Center

    5.00       1-1-2023        4,000,000        4,420,640  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  37


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue (continued)  

Washington HCFR Fred Hutchinson Cancer Research Center

    5.00 %       1-1-2026      $ 2,250,000      $ 2,649,105  

Washington HCFR Fred Hutchinson Cancer Research Center

    5.00       1-1-2027        1,050,000        1,229,004  

Washington HCFR Fred Hutchinson Cancer Research Center

    5.00       1-1-2028        1,350,000        1,572,710  
     20,044,859  
  

 

 

 
Housing Revenue: 0.18%  

Snohomish County WA Housing Authority Carvel Apartments Project

    5.00       4-1-2032        1,955,000        2,405,628  

Snohomish County WA Housing Authority Carvel Apartments Project

    5.00       4-1-2033        1,550,000        1,901,199  

Snohomish County WA Housing Authority Carvel Apartments Project

    5.00       4-1-2034        655,000        801,497  
     5,108,324  
  

 

 

 
Miscellaneous Revenue: 0.74%  

FYI Properties Washington Lease Revenue Refunding Bond

    5.00       6-1-2034        6,000,000        7,378,800  

Washington Certificate of Participation Series B

    5.00       7-1-2035        1,335,000        1,684,196  

Washington Certificate of Participation Series B

    5.00       7-1-2037        1,585,000        1,986,211  

Washington Motor Vehicle Fuel Tax Refunding Bond Series D

    5.00       7-1-2031        5,830,000        6,791,250  

Washington Office Building Refunding Bond

    5.00       7-1-2026        2,750,000        3,178,670  
     21,019,127  
  

 

 

 
Resource Recovery Revenue: 0.20%  

Seattle WA Solid Waste System Improvement & Refunding Bond

    4.00       6-1-2033        1,175,000        1,313,944  

Tacoma WA Solid Waste Refunding Bond Series B

    5.00       12-1-2027        620,000        750,696  

Tacoma WA Solid Waste Refunding Bond Series B

    5.00       12-1-2028        1,455,000        1,755,821  

Tacoma WA Solid Waste Refunding Bond Series B

    5.00       12-1-2029        1,525,000        1,834,941  
     5,655,402  
  

 

 

 
Utilities Revenue: 0.29%  

Energy Northwest Washington Wind Project

    5.00       7-1-2022        1,185,000        1,293,439  

Lewis County WA Public Utility District Refunding Bond

    5.25       4-1-2032        6,115,000        6,967,737  
     8,261,176  
  

 

 

 
     114,598,223  
  

 

 

 

West Virginia: 0.66%

 

GO Revenue: 0.28%  

Ohio County WV Public School Bond

    3.00       6-1-2027        2,740,000        2,972,818  

West Virginia State Road Bond Series 2018 B

    5.00       12-1-2036        4,000,000        4,941,760  
     7,914,578  
  

 

 

 
Health Revenue: 0.05%  

West Virginia Hospital Finance Authority West Virginia University Health System Series A

    5.00       6-1-2031        375,000        450,619  

West Virginia Hospital Finance Authority West Virginia University Health System Series A

    5.00       6-1-2032        950,000        1,138,547  
     1,589,166  
  

 

 

 
Miscellaneous Revenue: 0.33%  

West Virginia EDA Excess Lottery Series A

    5.00       7-1-2038        2,980,000        3,618,793  

West Virginia School Building Authority Capital Improvement Bond Series A

    5.00       7-1-2026        1,520,000        1,805,426  

West Virginia School Building Authority Capital Improvement Bond Series A

    5.00       7-1-2027        1,595,000        1,891,718  

West Virginia School Building Authority Capital Improvement Bond Series A

    5.00       7-1-2029        1,755,000        2,066,004  
     9,381,941  
  

 

 

 
     18,885,685  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

38  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Wisconsin: 0.71%

 

Education Revenue: 0.24%  

Wisconsin PFA Charter School Voyager Foundation Incorporate Project Series A

    6.00 %       10-1-2032      $ 1,475,000      $ 1,606,128  

Wisconsin PFA KU Campus Development Corporation Central District Development Project

    5.00       3-1-2032        4,315,000        5,096,576  
     6,702,704  
  

 

 

 
GO Revenue: 0.07%  

Wisconsin Series A

    4.00       5-1-2032        2,000,000        2,132,920  
         

 

 

 
Health Revenue: 0.36%  

Wisconsin HEFA Series A

    4.00       11-15-2039        2,250,000        2,452,298  

Wisconsin HEFA Series A

    5.00       7-15-2021        3,500,000        3,706,955  

Wisconsin HEFA Series A

    5.00       11-15-2023        3,500,000        3,985,905  
     10,145,158  
  

 

 

 
Miscellaneous Revenue: 0.04%  

Milwaukee WI RDA Public Schools

    5.00       11-15-2029        420,000        503,933  

Milwaukee WI RDA Public Schools

    5.00       11-15-2030        635,000        759,917  
     1,263,850  
  

 

 

 
     20,244,632  
  

 

 

 

Total Municipal Obligations (Cost $2,679,613,847)

 

     2,823,063,786        
  

 

 

 

 

Total investments in securities (Cost $2,679,613,847)     99.15        2,823,063,786  

Other assets and liabilities, net

    0.85          24,089,741  
 

 

 

      

 

 

 
Total net assets     100.00      $ 2,847,153,527  
 

 

 

      

 

 

 

 

 

±

Variable rate investment. The rate shown is the rate in effect at period end.

 

¤

The security is issued in zero coupon form with no periodic interest payments.

 

144A

The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933.

 

ø

Variable rate demand notes are subject to a demand feature which reduces the effective maturity. The maturity date shown represents the final maturity date of the security. The interest rate is determined and reset by the issuer daily, weekly, or monthly depending upon the terms of the security. The rate shown is the rate in effect at period end.

 

%%

The security is purchased on a when-issued basis.

 

##

All or a portion of this security is segregated for when-issued securities.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  39


Portfolio of investments—December 31, 2019 (unaudited)

 

Abbreviations:

 

AGC

Assured Guaranty Corporation

 

AGM

Assured Guaranty Municipal

 

Ambac

Ambac Financial Group Incorporated

 

BAM

Build America Mutual Assurance Company

 

CAB

Capital appreciation bond

 

CDA

Community Development Authority

 

CSCE

Charter School Credit Enhancement

 

ECFA

Educational & Cultural Facilities Authority

 

EDA

Economic Development Authority

 

EDFA

Economic Development Finance Authority

 

FHLMC

Federal Home Loan Mortgage Corporation

 

FNMA

Federal National Mortgage Association

 

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

Department of Housing and Urban Development

 

IDA

Industrial Development Authority

 

LIBOR

London Interbank Offered Rate

 

LIQ

Liquidity agreement

 

LOC

Letter of credit

 

MFHR

Multifamily housing revenue

 

National

National Public Finance Guarantee Corporation

 

PCR

Pollution control revenue

 

PFA

Public Finance Authority

 

RDA

Redevelopment Authority

 

SFMR

Single-family mortgage revenue

 

SIFMA

Securities Industry and Financial Markets Association

 

SPA

Standby purchase agreement

 

TTFA

Transportation Trust Fund Authority

 

The accompanying notes are an integral part of these financial statements.

 

 

40  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Statement of assets and liabilities—December 31, 2019 (unaudited)

 

         

Assets

 

Investments in unaffiliated securities, at value (cost $2,679,613,847)

  $ 2,823,063,786  

Cash

    4,772,613  

Receivable for investments sold

    1,005,080  

Receivable for Fund shares sold

    3,465,084  

Receivable for interest

    29,978,588  

Prepaid expenses and other assets

    42,479  
 

 

 

 

Total assets

    2,862,327,630  
 

 

 

 

Liabilities

 

Payable for investments purchased

    9,045,823  

Payable for Fund shares redeemed

    2,942,626  

Management fee payable

    833,938  

Dividends payable

    1,960,928  

Administration fees payable

    170,541  

Distribution fee payable

    14,914  

Trustees’ fees and expenses payable

    4,236  

Accrued expenses and other liabilities

    201,097  
 

 

 

 

Total liabilities

    15,174,103  
 

 

 

 

Total net assets

  $ 2,847,153,527  
 

 

 

 

Net assets consist of

 

Paid-in capital

  $ 2,735,865,541  

Total distributable earnings

    111,287,986  
 

 

 

 

Total net assets

  $ 2,847,153,527  
 

 

 

 

Computation of net asset value and offering price per share

 

Net assets – Class A

  $ 266,810,803  

Shares outstanding – Class A1

    22,757,691  

Net asset value per share – Class A

    $11.72  

Maximum offering price per share – Class A2

    $12.08  

Net assets – Class C

  $ 22,772,641  

Shares outstanding – Class C1

    1,942,453  

Net asset value per share – Class C

    $11.72  

Net assets – Class R6

  $ 1,168,746,585  

Shares outstanding – Class R61

    99,578,699  

Net asset value per share – Class R6

    $11.74  

Net assets – Administrator Class

  $ 193,131,917  

Shares outstanding – Administrator Class1

    16,463,078  

Net asset value per share – Administrator Class

    $11.73  

Net assets – Institutional Class

  $ 1,195,691,581  

Shares outstanding – Institutional Class1

    101,841,113  

Net asset value per share – Institutional Class

    $11.74  

 

1 

The Fund has an unlimited number of authorized shares.

 

2 

Maximum offering price is computed as 100/97 of net asset value. On investments of $50,000 or more, the offering price is reduced.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  41


Statement of operations—six months ended December 31, 2019 (unaudited)

 

         

Investment income

 

Interest

  $ 39,904,411  
 

 

 

 

Expenses

 

Management fee

    5,050,045  

Administration fees

 

Class A

    214,965  

Class C

    19,600  

Class R6

    163,740  

Administrator Class

    93,781  

Institutional Class

    482,023  

Shareholder servicing fees

 

Class A

    335,883  

Class C

    30,625  

Administrator Class

    234,452  

Distribution fee

 

Class C

    91,865  

Custody and accounting fees

    40,728  

Professional fees

    17,912  

Registration fees

    83,661  

Shareholder report expenses

    48,886  

Trustees’ fees and expenses

    10,804  

Other fees and expenses

    20,377  
 

 

 

 

Total expenses

    6,939,347  

Less: Fee waivers and/or expense reimbursements

 

Fund-level

    (156,643

Class A

    (95,147

Class C

    (8,597

Administrator Class

    (103,946
 

 

 

 

Net expenses

    6,575,014  
 

 

 

 

Net investment income

    33,329,397  
 

 

 

 

Realized and unrealized gains (losses) on investments

 

Net realized gains on investments

    534,217  

Net change in unrealized gains (losses) on investments

    13,804,732  
 

 

 

 

Net realized and unrealized gains (losses) on investments

    14,338,949  
 

 

 

 

Net increase in net assets resulting from operations

  $ 47,668,346  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

42  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Statement of changes in net assets

 

     Six months ended
December 31, 2019
(unaudited)
    Year ended
June 30, 2019
 

Operations

       

Net investment income

    $ 33,329,397       $ 65,737,994  

Net realized gains (losses) on investments

      534,217         (4,121,284

Net change in unrealized gains (losses) on investments

      13,804,732         78,795,074  
 

 

 

 

Net increase in net assets resulting from operations

      47,668,346         140,411,784  
 

 

 

 

Distributions to shareholders from net investment income and realized gains

       

Class A

      (2,944,635       (6,656,236

Class C

      (176,345       (537,102

Class R6

      (13,599,481       (13,953,353 )1  

Administrator Class

      (2,148,357       (4,326,110

Institutional Class

      (14,704,979       (40,268,740
 

 

 

 

Total distributions to shareholders

      (33,573,797       (65,741,541
 

 

 

 

Capital share transactions

    Shares         Shares    

Proceeds from shares sold

       

Class A

    1,610,269       18,903,524       2,268,249       25,839,853  

Class C

    97,570       1,145,079       236,883       2,686,470  

Class R6

    23,032,619       270,927,423       96,158,706 1       1,084,942,320 1  

Administrator Class

    3,137,022       36,835,002       6,429,407       73,171,373  

Institutional Class

    11,440,210       134,603,408       49,788,518       565,405,649  
 

 

 

 
      462,414,436         1,752,045,665  
 

 

 

 

Reinvestment of distributions

       

Class A

    239,511       2,812,136       560,089       6,376,313  

Class C

    13,425       157,640       43,204       491,272  

Class R6

    409,986       4,820,478       552,098 1       6,337,313 1  

Administrator Class

    175,223       2,058,958       367,364       4,186,398  

Institutional Class

    1,077,729       12,675,746       2,596,341       29,571,995  
 

 

 

 
      22,524,958         46,963,291  
 

 

 

 

Payment for shares redeemed

       

Class A

    (1,653,146     (19,399,040     (5,668,788     (64,362,323

Class C

    (461,245     (5,426,250     (1,118,105     (12,711,333

Class R6

    (9,215,428     (108,378,819     (11,359,282 )1       (129,862,171 )1  

Administrator Class

    (2,080,645     (24,433,019     (7,784,897     (87,831,846

Institutional Class

    (13,391,526     (157,899,097     (120,238,740     (1,354,090,765
 

 

 

 
      (315,536,225       (1,648,858,438
 

 

 

 

Net increase in net assets resulting from capital share transactions

      169,403,169         150,150,518  
 

 

 

 

Total increase in net assets

      183,497,718         224,820,761  
 

 

 

 

Net assets

       

Beginning of period

      2,663,655,809         2,438,835,048  
 

 

 

 

End of period

    $ 2,847,153,527       $ 2,663,655,809  
 

 

 

 

 

1 

For the period from July 31, 2018 (commencement of class operations) to June 30, 2019

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  43


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS A   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $11.66       $11.31       $11.46       $11.89       $11.47       $11.53  

Net investment income

    0.13       0.28       0.27       0.27       0.26       0.25  

Net realized and unrealized gains (losses) on investments

    0.06       0.35       (0.15     (0.42     0.42       (0.06
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.19       0.63       0.12       (0.15     0.68       0.19  

Distributions to shareholders from

           

Net investment income

    (0.13     (0.28     (0.27     (0.27     (0.26     (0.25

Net realized gains

    0.00       0.00       0.00       (0.01     0.00       0.00  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.13     (0.28     (0.27     (0.28     (0.26     (0.25

Net asset value, end of period

    $11.72       $11.66       $11.31       $11.46       $11.89       $11.47  

Total return1

    1.63     5.67     1.08     (1.27 )%      5.99     1.68

Ratios to average net assets (annualized)

           

Gross expenses

    0.79     0.80     0.80     0.79     0.80     0.80

Net expenses

    0.70     0.70     0.70     0.70     0.70     0.70

Net investment income

    2.17     2.47     2.38     2.31     2.23     2.19

Supplemental data

           

Portfolio turnover rate

    4     14     14     19     14     38

Net assets, end of period (000s omitted)

    $266,811       $263,113       $287,408       $359,649       $556,673       $214,880  

 

1 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

44  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS C   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $11.66       $11.31       $11.46       $11.89       $11.47       $11.53  

Net investment income

    0.08       0.20       0.19       0.18       0.17       0.17  

Net realized and unrealized gains (losses) on investments

    0.07       0.35       (0.15     (0.42     0.42       (0.06
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.15       0.55       0.04       (0.24     0.59       0.11  

Distributions to shareholders from

           

Net investment income

    (0.09     (0.20     (0.19     (0.18     (0.17     (0.17

Net realized gains

    0.00       0.00       0.00       (0.01     0.00       0.00  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.09     (0.20     (0.19     (0.19     (0.17     (0.17

Net asset value, end of period

    $11.72       $11.66       $11.31       $11.46       $11.89       $11.47  

Total return1

    1.24     4.88     0.32     (2.01 )%      5.20     0.92

Ratios to average net assets (annualized)

           

Gross expenses

    1.54     1.55     1.55     1.54     1.55     1.55

Net expenses

    1.45     1.45     1.45     1.45     1.45     1.45

Net investment income

    1.42     1.73     1.63     1.56     1.48     1.44

Supplemental data

           

Portfolio turnover rate

    4     14     14     19     14     38

Net assets, end of period (000s omitted)

    $22,773       $26,737       $35,421       $44,462       $56,601       $56,703  

 

1 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  45


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended
June 30, 20191
 
CLASS R6

Net asset value, beginning of period

    $11.67       $11.33  

Net investment income

    0.15       0.29  

Net realized and unrealized gains (losses) on investments

    0.07       0.34  
 

 

 

   

 

 

 

Total from investment operations

    0.22       0.63  

Distributions to shareholders from net investment income

    (0.15     (0.29

Net asset value, end of period

    $11.74       $11.67  

Total return2

    1.87     5.65

Ratios to average net assets (annualized)

   

Gross expenses

    0.41     0.41

Net expenses

    0.40     0.40

Net investment income

    2.47     2.75

Supplemental data

   

Portfolio turnover rate

    4     14

Net assets, end of period (000s omitted)

    $1,168,747       $996,477  

 

 

 

 

1 

For the period from July 31, 2018 (commencement of class operations) to June 30, 2019.

 

2 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

46  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
ADMINISTRATOR CLASS   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $11.67       $11.32       $11.47       $11.90       $11.48       $11.54  

Net investment income

    0.14       0.29       0.28       0.28       0.27       0.27  

Net realized and unrealized gains (losses) on investments

    0.06       0.35       (0.15     (0.42     0.42       (0.06
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.20       0.64       0.13       (0.14     0.69       0.21  

Distributions to shareholders from

           

Net investment income

    (0.14     (0.29     (0.28     (0.28     (0.27     (0.27

Net realized gains

    0.00       0.00       0.00       (0.01     0.00       0.00  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.14     (0.29     (0.28     (0.29     (0.27     (0.27

Net asset value, end of period

    $11.73       $11.67       $11.32       $11.47       $11.90       $11.48  

Total return1

    1.68     5.77     1.18     (1.17 )%      6.09     1.78

Ratios to average net assets (annualized)

           

Gross expenses

    0.73     0.74     0.73     0.73     0.74     0.74

Net expenses

    0.60     0.60     0.60     0.60     0.60     0.60

Net investment income

    2.27     2.57     2.48     2.39     2.33     2.29

Supplemental data

           

Portfolio turnover rate

    4     14     14     19     14     38

Net assets, end of period (000s omitted)

    $193,132       $177,742       $183,624       $309,793       $802,527       $773,770  

 

 

1 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  47


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
INSTITUTIONAL CLASS   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $11.68       $11.33       $11.47       $11.91       $11.49       $11.55  

Net investment income

    0.14       0.31       0.30       0.30       0.29       0.29  

Net realized and unrealized gains (losses) on investments

    0.07       0.35       (0.14     (0.43     0.42       (0.06
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.21       0.66       0.16       (0.13     0.71       0.23  

Distributions to shareholders from

           

Net investment income

    (0.15     (0.31     (0.30     (0.30     (0.29     (0.29

Net realized gains

    0.00       0.00       0.00       (0.01     0.00       0.00  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.15     (0.31     (0.30     (0.31     (0.29     (0.29

Net asset value, end of period

    $11.74       $11.68       $11.33       $11.47       $11.91       $11.49  

Total return1

    1.75     5.93     1.42     (1.10 )%      6.26     1.97

Ratios to average net assets (annualized)

           

Gross expenses

    0.46     0.47     0.47     0.47     0.47     0.47

Net expenses

    0.45     0.45     0.45     0.45     0.44     0.42

Net investment income

    2.42     2.72     2.64     2.58     2.49     2.47

Supplemental data

           

Portfolio turnover rate

    4     14     14     19     14     38

Net assets, end of period (000s omitted)

    $1,195,692       $1,199,588       $1,932,382       $1,814,841       $1,260,636       $878,585  

 

1 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

48  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Notes to financial statements (unaudited)

 

1. ORGANIZATION

Wells Fargo Funds Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Wells Fargo Intermediate Tax/AMT-Free Fund (the “Fund”) which is a diversified series of the Trust.

2. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Securities valuation

All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.

Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

Investments which are not valued using the methods discussed above are valued at their fair value, as determined in good faith by the Board of Trustees of the Fund. The Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities, unless the determination has been delegated to the Wells Fargo Asset Management Pricing Committee at Wells Fargo Funds Management, LLC (“Funds Management”). The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Valuation Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees receives reports on any valuation actions taken by the Valuation Committee or the Wells Fargo Asset Management Pricing Committee which may include items for ratification.

When-issued transactions

The Fund may purchase securities on a forward commitment or when-issued basis. The Fund records a when-issued transaction on the trade date and will segregate assets in an amount at least equal in value to the Fund’s commitment to purchase when-issued securities. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

Security transactions and income recognition

Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. 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 been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Distributions to shareholders

Distributions to shareholders from net investment income are declared daily and paid monthly. Distributions from net realized gains, if any, are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.

Federal and other taxes

The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable and tax-exempt 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.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  49


Notes to financial statements (unaudited)

 

The 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. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

As of December 31, 2019, the aggregate cost of all investments for federal income tax purposes was $2,679,613,169 and the unrealized gains (losses) consisted of:

 

Gross unrealized gains

   $ 145,249,540  

Gross unrealized losses

     (1,798,923

Net unrealized gains

   $ 143,450,617  

As of June 30, 2019, the Fund had capital loss carryforwards which consisted of $9,449,449 in short-term capital losses and $22,944,773 in long-term capital losses.

Class allocations

The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.

3. FAIR VALUATION MEASUREMENTS

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:

 

 

Level 1 – quoted prices in active markets for identical securities

 

 

Level 2 – other significant observable inputs (including quoted prices for similar securities, 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 investments in securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of December 31, 2019:

 

      Quoted prices
(Level 1)
     Other significant
observable inputs
(Level 2)
     Significant
unobservable inputs
(Level 3)
     Total  

Assets

           

Investments in:

           

Municipal obligations

   $ 0      $ 2,823,063,786      $ 0      $ 2,823,063,786  

Additional sector, industry or geographic detail is included in the Portfolio of Investments.

For the six months ended December 31, 2019, the Fund did not have any transfers into/out of Level 3.

 

 

50  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Notes to financial statements (unaudited)

 

4. TRANSACTIONS WITH AFFILIATES

Management fee

Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”), is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:

 

Average daily net assets    Management fee  

First $500 million

     0.400

Next $500 million

     0.375  

Next $2 billion

     0.350  

Next $2 billion

     0.325  

Next $5 billion

     0.290  

Over $10 billion

     0.280  

For the six months ended December 31, 2019, the management fee was equivalent to an annual rate of 0.36% of the Fund’s average daily net assets.

Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Funds Management. Wells Capital Management Incorporated, an affiliate of Funds Management and an indirect wholly owned subsidiary of Wells Fargo, is the subadviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.20% and declining to 0.10% as the average daily net assets of the Fund increase.

Administration fees

Under a class-level administration agreement, Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:

 

      Class-level
administration fee
 

Class A, Class C

     0.16

Class R6

     0.03  

Administrator Class

     0.10  

Institutional Class

     0.08  

Waivers and/or expense reimbursements

Funds Management has contractually waived and/or reimbursed management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Funds Management has waived fees and/or reimbursed expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Funds Management has committed through October 31, 2020 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s expenses at 0.70% for Class A shares, 1.45% for Class C shares, 0.40% for Class R6 shares, 0.60% for Administrator Class shares, and 0.45% for Institutional Class shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.

Distribution fee

The Trust has adopted a distribution plan for Class C shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Wells Fargo Funds Distributor, LLC (“Funds Distributor”), the principal underwriter, at an annual rate of 0.75% of the average daily net assets of Class C shares.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  51


Notes to financial statements (unaudited)

 

In addition, Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the six months ended December 31, 2019, Funds Distributor received $3,250 from the sale of Class A shares. No contingent deferred sales charges were incurred by Class A and Class C shares for the six months ended December 31, 2019.

Shareholder servicing fees

The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A, Class C, and Administrator Class of the Fund are charged a fee at an annual rate of 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of Wells Fargo.

Interfund transactions

The Fund may purchase or sell portfolio investment securities to certain other Wells Fargo affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund had $98,550,000 and $63,145,000 in interfund purchases and sales, respectively, during the six months ended December 31, 2019.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended December 31, 2019 were $344,129,558 and $100,625,511, respectively.

6. BANK BORROWINGS

The Trust (excluding the money market funds), Wells Fargo Master Trust and Wells Fargo Variable Trust are parties to a $280,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the 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, an annual commitment fee equal to 0.25% of the unused balance is allocated to each participating fund.

For the six months ended December 31, 2019, there were no borrowings by the Fund under the agreement.

7. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and Trustees have been granted certain indemnification rights 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 Fund and, therefore, cannot be estimated.

8. NEW ACCOUNTING PRONOUNCEMENTS

In August 2018, FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 updates the disclosure requirements for fair value measurements by modifying or removing certain disclosures and adding certain new disclosures. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Management has adopted the removal and modification of disclosures early, as permitted, and will adopt the additional new disclosures at the effective date.

In March 2017, FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08

shortens the amortization period for certain callable debt securities held at a premium and requires the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount and discounts will continue to be accreted to the maturity date of the security. ASU 2017-08 is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years. During the current reporting period, management of the Fund adopted the change in accounting policy which did not have a material impact to the Fund’s financial statements.

 

 

52  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Other information (unaudited)

 

PROXY VOTING INFORMATION

A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available, upon request, by calling 1-800-222-8222, visiting our website at wfam.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at wfam.com or by visiting the SEC website at sec.gov.

QUARTERLY PORTFOLIO HOLDINGS INFORMATION

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  53


Other information (unaudited)

 

BOARD OF TRUSTEES AND OFFICERS

Each of the Trustees and Officers1 listed in the table below acts in identical capacities for each fund in the Wells Fargo family of funds, which consists of 149 mutual funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information2. 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

 

Name and
year of birth
  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships

William R. Ebsworth

(Born 1957)

 

Trustee,

since 2015

  Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Endowment (non-profit organization). Mr. Ebsworth is a CFA® charterholder.   N/A

Jane A. Freeman

(Born 1953)

 

Trustee,

since 2015;

Chair Liaison, since 2018

  Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is a Board Member of The Ruth Bancroft Garden (non-profit organization). She is also an inactive Chartered Financial Analyst.   N/A

Isaiah Harris, Jr.

(Born 1952)

 

Trustee,

since 2009; Audit Committee
Chairman,

since 2019

  Retired. Chairman of the Board of CIGNA Corporation since 2009, and Director since 2005. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Child Evangelism Fellowship (non-profit). Mr. Harris is a certified public accountant (inactive status).   CIGNA Corporation

Judith M. Johnson

(Born 1949)

 

Trustee, since 2008;

Audit Committee Chairman, from 2009 to 2018

  Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.   N/A

 

 

54  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Other information (unaudited)

 

Name and
year of birth
  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships

David F. Larcker

(Born 1950)

  Trustee,
since 2009
  James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.   N/A

Olivia S. Mitchell

(Born 1953)

  Trustee,
since 2006; Nominating and Governance Committee Chair,
since 2018
  International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993.   N/A

Timothy J. Penny

(Born 1951)

  Trustee,
since 1996; Chairman,
since 2018
  President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.   N/A

James G. Polisson

(Born 1959)

  Trustee,
since 2018
  Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations.   N/A
Pamela Wheelock3 (Born 1959)   Trustee, since January 2020; previously Trustee from January 2018 to July 2019   Board member of the Destination Medical Center Economic Development Agency, Rochester, Minnesota since 2019. Acting Commissioner, Minnesota Department of Human Services, July 2019 through September 2019. Human Services Manager (part-time), Minnesota Department of Human Services, October 2019 through December 2019. Chief Operating Officer, Twin Cities Habitat for Humanity from 2017 to 2019. Vice President of University Services, University of Minnesota from 2012 to 2016. Prior thereto, on the Board of Directors, Governance Committee and Finance Committee for the Minnesota Philanthropy Partners (Saint Paul Foundation) from 2012 to 2018, Interim Chief Executive Officer of Blue Cross Blue Shield of Minnesota from 2011 to 2012, Chairman of the Board from 2009 to 2012 and Board Director from 2003 to 2015. Vice President, Leadership and Community Engagement, Bush Foundation, Saint Paul, Minnesota (a private foundation) from 2009 to 2011. Executive Vice President and Chief Financial Officer, Minnesota Sports and Entertainment from 2004 to 2009 and Senior Vice President from 2002 to 2004. Executive Vice President of the Minnesota Wild Foundation from 2004 to 2008. Commissioner of Finance, State of Minnesota, from 1999 to 2002. Currently Board Chair of the Minnesota Wild Foundation since 2010.   N/A

 

*

Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  55


Other information (unaudited)

 

Officers

 

Name and

year of birth

 

Position held and

length of service

  Principal occupations during past five years or longer

Andrew Owen

(Born 1960)

 

President,

since 2017

  Executive Vice President of Wells Fargo & Company and Head of Affiliated Managers, Wells Fargo Asset Management, since 2014. In addition, Mr. Owen is currently President, Chief Executive Officer and Director of Wells Fargo Funds Management, LLC since 2017. Prior thereto, Executive Vice President responsible for marketing, investments and product development for Wells Fargo Funds Management, LLC, from 2009 to 2014.

Nancy Wiser1

(Born 1967)

 

Treasurer,

since 2012

  Executive Vice President of Wells Fargo Funds Management, LLC since 2011. Chief Operating Officer and Chief Compliance Officer at LightBox Capital Management LLC, from 2008 to 2011.

Michelle Rhee4

(Born 1966)

 

Chief Legal Officer,

since 2019

  Secretary of Wells Fargo Funds Management, LLC, Chief Legal Counsel of Wells Fargo Asset Management and Assistant General Counsel of Wells Fargo Bank, N.A. since 2018. Associate General Counsel and Managing Director of Bank of America Corporation from 2004 to 2018.

Catherine Kennedy5

(Born 1969)

  Secretary, since 2019   Vice President of Wells Fargo Funds Management, LLC and Senior Counsel of the Wells Fargo Legal Department since 2010. Vice President and Senior Counsel of Evergreen Investment Management Company, LLC from 1998 to 2010.

Michael H. Whitaker

(Born 1967)

  Chief Compliance Officer, since 2016   Chief Compliance Officer of Wells Fargo Asset Management since 2016. Senior Vice President and Chief Compliance Officer for Fidelity Investments from 2007 to 2016.

David Berardi

(Born 1975)

  Assistant Treasurer, since 2009   Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.

Jeremy DePalma1

(Born 1974)

  Assistant Treasurer, since 2009   Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.

 

1 

Nancy Wiser acts as Treasurer of 64 funds in the Fund Complex. Jeremy DePalma acts as Treasurer of 85 funds and Assistant Treasurer of 64 funds in the Fund Complex.

 

2

The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at wfam.com.

 

3 

Pamela Wheelock was re-appointed to the Board effective January 1, 2020.

 

4 

Michelle Rhee became Chief Legal Officer effective October 22, 2019.

 

5 

Catherine Kennedy became Secretary effective October 22, 2019.

 

 

56  |  Wells Fargo Intermediate Tax/AMT-Free Fund


Appendix (unaudited)

 

Effective on or about May 1, 2020, if you purchase Fund shares through a Janney Montgomery Scott LLC (“Janney”) brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge (“CDSC”), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in the Fund’s Prospectus or SAI.

 

Front-end sales charge* waivers on Class A shares available at Janney
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).
Shares purchased by employees and registered representatives of Janney or its affiliates and their family members as designated by Janney.

Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within ninety (90) days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., right of reinstatement).

Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
Shares acquired through a right of reinstatement.
Class C shares that are no longer subject to a contingent deferred sales charge and are converted to Class A shares of the same fund pursuant to Janney’s policies and procedures.
CDSC waivers on Class A and Class C shares available at Janney
Shares sold upon the death or disability of the shareholder.
Shares sold as part of a systematic withdrawal plan as described in the Fund’s Prospectus.
Shares purchased in connection with a return of excess contributions from an IRA account.
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRS regulations.
Shares sold to pay Janney fees but only if the transaction is initiated by Janney.
Shares acquired through a right of reinstatement.
Shares exchanged into the same share class of a different fund.
Front-end sales charge* discounts available at Janney; breakpoints, rights of accumulation and/or letters of intent
Breakpoints as described in the Fund’s Prospectus.
Rights of accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Janney. Eligible fund family assets not held at Janney may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.
Letters of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Janney Montgomery Scott may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.

 

*

Also referred to as an “initial sales charge.”

 

 

Wells Fargo Intermediate Tax/AMT-Free Fund  |  57


 

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LOGO

For more information

More information about Wells Fargo Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:

Wells Fargo Funds

P.O. Box 219967

Kansas City, MO 64121-9967

Website: wfam.com

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

 

LOGO

 

This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-222-8222 or visit the Fund’s website at wfam.com. Read the prospectus carefully before you invest or send money.

Wells Fargo Asset Management (WFAM) is the trade name for certain investment advisory/management firms owned by Wells Fargo & Company. These firms include but are not limited to Wells Capital Management Incorporated and Wells Fargo Funds Management, LLC. Certain products managed by WFAM entities are distributed by Wells Fargo Funds Distributor, LLC (a broker-dealer and Member FINRA).

This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind—including a recommendation for any specific investment, strategy, or plan.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE     MAY LOSE VALUE


© 2020 Wells Fargo & Company. All rights reserved.

PAR-0120-02391 02-20

SA251/SAR251 12-19

 

 



LOGO

Semi-Annual Report

December 31, 2019

 

Wells Fargo Municipal Bond Fund

 

 

 

 

Beginning on January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, paper copies of the Wells Fargo Funds’ annual and semi-annual shareholder reports issued after this date will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-222-8222 or by enrolling at wellsfargo.com/advantagedelivery.

You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call 1-800-222-8222. Your election to receive reports in paper will apply to all Wells Fargo Funds held in your account with your financial intermediary or, if you are a direct investor, to all Wells Fargo Funds that you hold.


 

 

Reduce clutter.

Save trees.

Sign up for electronic delivery of prospectuses and shareholder reports at wellsfargo.com/advantagedelivery

 

The views expressed and any forward-looking statements are as of December 31, 2019, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Asset Management. Discussions of individual securities, or the markets generally, or any Wells Fargo Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Asset Management and the Fund disclaim any obligation to publicly update or revise any views expressed or forward-looking statements.

 

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE    MAY LOSE VALUE


 

 

Wells Fargo Municipal Bond Fund  |  1


Letter to shareholders (unaudited)

 

LOGO

Andrew Owen

President

Wells Fargo Funds

“After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July.”

Dear Shareholder:

We are pleased to offer you this semi-annual report for the Wells Fargo Municipal Bond Fund for the six-month period that ended December 31, 2019. Despite periods of market volatility, the year was strongly positive for financial markets as supportive central banks more than offset concerns over slowing global economic growth and international trade tensions.

Overall, both fixed-income and equity investors enjoyed healthy returns. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 10.92% and international stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned 6.96%. The MSCI EM Index (Net)3 gained 7.09%. For bond investors, the Bloomberg Barclays U.S. Aggregate Bond Index4 added 2.45%, the Bloomberg Barclays Global Aggregate ex-USD Index5 returned 0.09%, the Bloomberg Barclays Municipal Bond Index6 gained 2.32%, and the ICE BofA U.S. High Yield Index7 added 3.86%.

Sentiment turned positive, driven by central bank support.

After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July. The gains, primarily driven by geopolitical and monetary policy events, pushed equity markets to new highs. European Central Bank President Mario Draghi indicated the bank was ready to cut rates or buy more assets to prop up inflation if needed. President Trump backed off of tariff threats against Mexico and China. The U.S. Federal Reserve (Fed) implemented a 0.25% federal funds rate cut in July.

Throughout the summer, U.S.-China trade tensions simmered. Major U.S. stock market indices closed July with the worst weekly results of the year. Bond prices gained as Treasury yields fell to multiyear lows, and the yield curve inverted at multiple points along the 30-year arc.

Evidence of a continued global economic slowdown mounted, and central banks in China, New Zealand, and Thailand cut interest rates. Industrial and manufacturing data declined in China, Canada, Japan, and Germany. Adding to global uncertainty, Italy’s prime minister resigned, many feared a crackdown in Hong Kong as protestors sustained their calls for reform, and Boris Johnson planned to suspend Parliament as Brexit’s deadline neared.

In the U.S., the Fed cut interest rates a second time in September. U.S. manufacturing data disappointed investors. The U.S. Congress announced it would pursue an impeachment investigation of President Trump. Meanwhile, the Brexit impasse showed no signs of resolution. Officials in China warned of the negative economic impact of tariffs and trade restrictions. Although the S&P 500 Index finished the third quarter with the best year-to-date returns in more than 20 years, concerns about future returns remained.

 

 

 

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 Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the United States. 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. You cannot invest directly in an index.

 

3 

The MSCI Emerging Markets (EM) Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index.

 

4

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index.

 

5

The Bloomberg Barclays Global Aggregate ex-USD Index is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S. dollar-denominated debt market. You cannot invest directly in an index.

 

6 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

7

The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2020. ICE Data Indices, LLC. All rights reserved.

 

 

2  |  Wells Fargo Municipal Bond Fund


Letter to shareholders (unaudited)

 

The fourth quarter started on a strong note, with a relaxing of U.S.-China trade tensions in October along with renewed optimism for a U.K. Brexit deal and positive macroeconomic data. The initial estimate of U.S. third-quarter gross domestic product growth was a 1.9% annualized rate, while the U.S. unemployment rate fell to a 50-year low of 3.5% in September. However, despite resilience among U.S. consumers, business confidence declined while manufacturing activity contracted. Concerned with a potential economic slowdown, the Fed lowered interest rates another quarter point in late October, its third rate cut in four months. This helped push the S&P 500 Index to a new all-time high, while emerging market equities rallied and global bonds declined overall, reflecting a broad pickup in risk appetite.

Equity markets continued to rally in November despite ongoing geopolitical risks. Hopes for a U.S.-China trade deal buoyed investor confidence. U.S. business sentiment improved slightly, and manufacturing and services activity picked up. Throughout the month, central bank actions were on hold. With that positive backdrop, developed market equities outpaced those in emerging markets, and U.S. stocks outperformed non-U.S. stocks overall. While consumer confidence and purchasing manager activity rose in the eurozone, China reported weakening manufacturing and consumer data. Bond yields rose marginally, leading to slightly negative returns for global government and investment-grade corporate bonds.

Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal, with some details to be worked out. That, along with the landslide election win by the pro-Brexit U.K. Conservative Party and ongoing central bank support, gave investors a greater sense of certainty. U.S. economic indicators were broadly positive, with the exception of manufacturing activity and business confidence. Consumer confidence was resilient, fed by a robust labor market, tame inflation, and lower interest rates, which boosted housing affordability and homebuyer activity. The impeachment of U.S. President Donald Trump, while historically noteworthy, had little impact on markets. Meanwhile, slowing Chinese economic activity, due in part to the trade war, led to further government stimulus at year-end through lower reserve ratios, allowing banks to lend more money.

Don’t let short-term uncertainty derail long-term investment goals.

Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.

Thank you for choosing to invest with Wells Fargo Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.

Sincerely,

 

LOGO

Andrew Owen

President

Wells Fargo Funds

 

“Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal”

 

 

For further information about your Fund, contact your investment professional, visit our website at wfam.com,

or call us directly at 1-800-222-8222.

 

 

 

Wells Fargo Municipal Bond Fund  |  3


Performance highlights (unaudited)

 

Investment objective

The Fund seeks current income exempt from federal income tax.

Manager

Wells Fargo Funds Management, LLC

Subadviser

Wells Capital Management Incorporated

Portfolio managers

Wendy Casetta

Terry J. Goode

Robert J. Miller

Average annual total returns (%) as of December 31, 2019

 

 
        Including sales charge     Excluding sales charge     Expense ratios1 (%)  
 
    Inception date   1 year     5 year     10 year     1 year     5 year     10 year     Gross     Net2  
                   
Class A (WMFAX)   4-8-2005     2.35       2.70       4.59       7.17       3.64       5.07       0.78       0.75  
                   
Class C (WMFCX)   4-8-2005     5.37       2.87       4.29       6.37       2.87       4.29       1.53       1.50  
                   
Class R6 (WMBRX)3   7-31-2018                       7.55       3.96       5.39       0.40       0.40  
                   
Administrator Class (WMFDX)   4-8-2005                       7.33       3.78       5.23       0.72       0.60  
                   
Institutional Class (WMBIX)   3-31-2008                       7.50       3.95       5.38       0.45       0.45  
                   
Bloomberg Barclays Municipal Bond Index4                         7.54       3.53       4.34              

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, wfam.com.

Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.

For Class A shares, the maximum front-end sales charge is 4.50%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Class R6, Administrator Class, and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.

Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. 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). The Fund is exposed to high-yield securities risk and municipal securities risk. Consult the Fund’s prospectus for additional information on these and other risks. A portion of the Fund’s income may be subject to federal, state, and/ or local income taxes or the Alternative Minimum Tax (AMT). Any capital gains distributions may be taxable.

 

Please see footnotes on page 5.

 

 

4  |  Wells Fargo Municipal Bond Fund


Performance highlights (unaudited)

 

Effective maturity distribution as of December 31, 20195
LOGO
Credit quality as of December 31, 20196

 

LOGO

 

 

 

 

 

1 

Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report.

 

2 

The manager has contractually committed through October 31, 2020, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.75% for Class A, 1.50% for Class C, 0.43% for Class R6, 0.60% for Administrator Class, and 0.48% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Without this cap, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses.

 

3 

Historical performance shown for Class R6 shares prior to their inception reflects the performance of the Institutional Class shares, and includes the higher expenses applicable to Institutional Class shares. If these expenses had not been included, returns for Class R6 shares would be higher.

 

4 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

5 

Amounts are calculated based on the long-term total investments of the Fund. These amounts are subject to change and may have changed since the date specified.

 

6 

The credit quality distribution of portfolio holdings reflected in the chart is based on ratings from Standard & Poor’s, Moody’s Investors Service, and/ or Fitch Ratings Ltd. Credit quality ratings apply to the underlying holdings of the Fund and not to the Fund itself. The percentages of the Fund’s portfolio with the ratings depicted in the chart are calculated based on the total market value of fixed income securities held by the Fund. If a security was rated by all three rating agencies, the middle rating was utilized. If rated by two of three rating agencies, the lower rating was utilized, and if rated by one of the rating agencies, that rating was utilized. Standard & Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories. Standard & Poor’s rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody’s rates the creditworthiness of bonds, ranging from Aaa (highest) to C (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Moody’s rates the creditworthiness of short-term U.S. tax-exempt municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Credit quality distribution is subject to change and may have changed since the date specified.

 

 

Wells Fargo Municipal Bond Fund  |  5


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 and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing 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 period from July 1, 2019 to December 31, 2019.

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) and contingent deferred sales charges. 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
account  value
7-1-2019
     Ending
account value
12-31-2019
     Expenses
paid during
the period¹
     Annualized net
expense ratio
 
         

Class A

           

Actual

   $ 1,000.00      $ 1,020.93      $ 3.81        0.75

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,021.37      $ 3.81        0.75
         

Class C

           

Actual

   $ 1,000.00      $ 1,017.10      $ 7.61        1.50

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,017.60      $ 7.61        1.50
         

Class R6

           

Actual

   $ 1,000.00      $ 1,022.78      $ 1.98        0.39

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,023.18      $ 1.98        0.39
         

Administrator Class

           

Actual

   $ 1,000.00      $ 1,021.70      $ 3.05        0.60

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.12      $ 3.05        0.60
         

Institutional Class

           

Actual

   $ 1,000.00      $ 1,022.54      $ 2.24        0.44

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.92      $ 2.24        0.44

 

1 

Expenses paid is equal to the annualized net expense ratio of each class 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).

 

 

6  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Municipal Obligations: 99.42%

 

Alabama: 1.78%

 

GO Revenue: 0.06%  

Birmingham AL CAB Series A1

    5.00     3-1-2045      $ 3,000,000      $ 3,466,560  
         

 

 

 
Health Revenue: 0.35%  

Alabama Health Care Authority for Baptist Health Series B ø

    1.96       11-1-2042        16,200,000        16,200,000  

UAB Medicine Finance Authority Series B

    5.00       9-1-2034        1,000,000        1,259,880  

UAB Medicine Finance Authority Series B

    5.00       9-1-2035        1,000,000        1,256,030  
     18,715,910  
  

 

 

 
Miscellaneous Revenue: 0.85%  

Alabama Federal Aid Highway Finance Authority Series A

    5.00       6-1-2037        14,000,000        17,038,560  

Alabama Federal Aid Highway Finance Authority Series A

    5.00       9-1-2035        24,000,000        28,745,040  
     45,783,600  
  

 

 

 
Utilities Revenue: 0.41%  

Southeast Alabama Gas Supply District Project #1 Series A

    4.00       4-1-2049        1,410,000        1,529,568  

Southeast Alabama Gas Supply District Project #2 Series A

    4.00       6-1-2049        19,200,000        20,932,608  
     22,462,176  
  

 

 

 
Water & Sewer Revenue: 0.11%  

Jefferson County AL CAB Series B (AGM Insured) ¤

    0.00       10-1-2025        710,000        619,014  

Jefferson County AL CAB Series B (AGM Insured) ¤

    0.00       10-1-2026        3,000,000        2,447,340  

Jefferson County AL CAB Series B (AGM Insured) ¤

    0.00       10-1-2029        4,115,000        2,730,179  
     5,796,533  
  

 

 

 
     96,224,779  
  

 

 

 

Alaska: 0.25%

 

Health Revenue: 0.25%  

Alaska IDA Tanana Chiefs Conference Project

    5.00       10-1-2033        1,930,000        2,347,922  

Alaska Industrial Development & Export Authority Loan Anticipation Notes YKHC Project

    3.50       12-1-2020        11,300,000        11,313,560  
     13,661,482  
  

 

 

 

Arizona: 1.63%

 

Education Revenue: 0.45%  

La Paz County AZ IDA Educational Facility Imagine Schools West Middle Project Series A 144A

    5.75       6-15-2038        1,085,000        1,133,695  

La Paz County AZ IDA Educational Facility Imagine Schools West Middle Project Series A 144A

    5.88       6-15-2048        2,435,000        2,543,771  

Phoenix AZ IDA Legacy Traditional Schools Project Series A 144A

    6.50       7-1-2034        2,000,000        2,306,820  

Phoenix AZ IDA Rowan University Project Series 2012

    5.25       6-1-2034        1,000,000        1,079,260  

Pima County AZ IDA New Plan Learning Project Series A

    7.75       7-1-2035        7,390,000        7,317,874  

Pima County AZ IDA New Plan Learning Project Series A

    8.13       7-1-2041        6,395,000        6,324,591  

Pima County AZ IDA Noah Webster Schools-Pima Project

    7.00       12-15-2043        3,225,000        3,639,219  
     24,345,230  
  

 

 

 
Health Revenue: 0.17%  

Arizona Health Facilities Authority Revenue Bond Banner Health Series 2012A

    4.00       1-1-2043        5,565,000        5,744,360  

Tempe AZ IDA Friendship Village Project Series A

    5.25       12-1-2020        1,000,000        1,027,980  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  7


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue (continued)  

Tempe AZ IDA Friendship Village Project Series A

    5.38 %       12-1-2021      $ 1,000,000      $ 1,059,080  

Tempe AZ IDA Friendship Village Project Series A

    5.50       12-1-2022        1,000,000        1,060,440  
     8,891,860  
  

 

 

 
Miscellaneous Revenue: 0.71%  

Arizona Board Regents Certificates Refunding University Arizona Series C

    5.00       6-1-2028        3,250,000        3,523,033  

Navajo Nation AZ Refunding Bond Series A 144A

    5.50       12-1-2030        7,275,000        8,261,708  

Phoenix AZ Civic Improvement Corporation Junior Lien Refunding Bond

    5.00       7-1-2034        8,805,000        10,579,208  

Phoenix AZ Civic Improvement Corporation Series A

    5.00       7-1-2034        13,875,000        16,300,073  
     38,664,022  
  

 

 

 
Resource Recovery Revenue: 0.06%  

Yavapai County AZ IDA Waste Management Incorporated Project

    2.80       6-1-2027        3,200,000        3,257,408  
         

 

 

 
Utilities Revenue: 0.24%  

Maricopa County AZ PCR Public Service Company of New Mexico Palo Verde Project Series B

    5.20       6-1-2043        100,000        101,476  

Mesa AZ Series A

    5.00       7-1-2043        10,550,000        13,078,202  
     13,179,678  
  

 

 

 
     88,338,198  
  

 

 

 

Arkansas: 0.16%

 

Housing Revenue: 0.16%  

Arkansas Development Finance Authority MFHR Maple Place Apartments (HUD Insured)

    1.53       10-1-2023        8,900,000        8,907,476  
         

 

 

 

California: 4.56%

 

Airport Revenue: 1.06%  

Los Angeles CA Department of Airports AMT Subordinate Revenue Bond

    5.00       5-15-2034        1,750,000        2,074,485  

Los Angeles CA Department of Airports Subordinate Revenue Bonds

    4.00       5-15-2036        2,000,000        2,206,400  

Los Angeles CA Department of Airports Subordinate Revenue Bonds Series A

    5.25       5-15-2048        15,000,000        18,234,150  

San Francisco CA City & County Airport Commission San Francisco International Airport Series B

    5.00       5-1-2046        30,000,000        34,601,100  
     57,116,135  
  

 

 

 
Education Revenue: 0.13%  

California Municipal Finance Authority Charter School Albert Einstein Academies Project Series A

    7.13       8-1-2043        2,230,000        2,518,763  

University of California Series K

    4.00       5-15-2046        3,880,000        4,252,674  
     6,771,437  
  

 

 

 
GO Revenue: 0.69%  

Alhambra CA Unified School District CAB Election of 2008 Series B (AGC Insured) ¤

    0.00       8-1-2031        7,500,000        5,815,500  

Alhambra CA Unified School District CAB Election of 2008 Series B (AGM Insured) ¤

    0.00       8-1-2031        2,175,000        1,686,495  

Alhambra CA Unified School District CAB Election of 2008 Series B (AGM Insured) ¤

    0.00       8-1-2032        3,795,000        2,856,231  

Alhambra CA Unified School District CAB Election of 2008 Series B (AGM Insured) ¤

    0.00       8-1-2034        5,000,000        3,530,450  

Alhambra CA Unified School District CAB Election of 2008 Series B (AGM Insured) ¤

    0.00       8-1-2035        6,700,000        4,585,145  

 

The accompanying notes are an integral part of these financial statements.

 

 

8  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue (continued)  

Colton CA Unified School District CAB Series B (AGM Insured) ¤

    0.00 %       8-1-2031      $ 1,000,000      $ 768,330  

Colton CA Unified School District CAB Series B (AGM Insured) ¤

    0.00       8-1-2032        1,000,000        744,260  

Colton CA Unified School District CAB Series B (AGM Insured) ¤

    0.00       8-1-2033        1,000,000        721,480  

Compton CA Community College District CAB Election of 2002 Series C ¤

    0.00       8-1-2032        2,515,000        1,798,854  

Compton CA Community College District CAB Election of 2002 Series C ¤

    0.00       8-1-2033        2,000,000        1,382,360  

El Monte CA Union High School District CAB Election of 2008 (AGM Insured) ¤

    0.00       6-1-2030        2,000,000        1,595,320  

El Monte CA Union High School District CAB Election of 2008 (AGM Insured) ¤

    0.00       6-1-2031        2,000,000        1,545,380  

El Monte CA Union High School District CAB Election of 2008 (AGM Insured) ¤

    0.00       6-1-2032        1,660,000        1,244,519  

El Monte CA Union High School District CAB Election of 2008 (AGM Insured) ¤

    0.00       6-1-2033        1,230,000        890,397  

Ontario Montclair CA School District CAB (AGC Insured) ¤

    0.00       8-1-2028        1,500,000        1,264,485  

Ontario Montclair CA School District CAB (AGC Insured) ¤

    0.00       8-1-2030        2,000,000        1,585,840  

San Diego CA Unified School District CAB Series C ¤

    0.00       7-1-2031        2,000,000        1,548,920  

San Diego CA Unified School District CAB Series C ¤

    0.00       7-1-2033        1,000,000        726,070  

San Diego CA Unified School District CAB Series C ¤

    0.00       7-1-2034        2,000,000        1,413,540  

Wiseburn CA School District CAB Election of 2010 Series B (AGM Insured) ¤

    0.00       8-1-2034        2,530,000        1,770,494  
     37,474,070  
  

 

 

 
Health Revenue: 0.42%  

California Statewide CDA Sutter Health Series A

    6.00       8-15-2042        4,900,000        5,053,566  

San Buenaventura CA Community Mental Health System

    6.25       12-1-2020        2,000,000        2,081,520  

University of California Regents University Medical Center Pooled Revenue Bonds 2016 Series L

    5.00       5-15-2047        3,885,000        4,499,646  

University of California Regents University Medical Center Pooled Revenue Bonds Series L

    4.00       5-15-2037        10,025,000        11,144,793  
     22,779,525  
  

 

 

 
Housing Revenue: 0.09%  

California Community Housing Agency Essential Housing Revenue Verdant At Green Valley Series A 144A

    5.00       8-1-2049        1,000,000        1,129,840  

California HFA Municipal Certificates Series 2019 Class A

    4.00       3-20-2033        3,250,000        3,716,538  
     4,846,378  
  

 

 

 
Industrial Development Revenue: 0.26%  

California Municipal Finance Authority Special Facility Revenue United Airlines Incorporated

    4.00       7-15-2029        2,750,000        3,125,623  

California PCFA Solid Waste Disposal Revenue AMT Subordinated Green Bond Calplant Project I 144A

    7.50       12-1-2039        8,620,000        8,201,499  

California PCFA Solid Waste Disposal AMT Green Bond Calplant Project I 144A

    8.00       7-1-2039        2,900,000        2,922,475  
     14,249,597  
  

 

 

 
Miscellaneous Revenue: 0.53%  

Anaheim CA PFA Convention Center Expansion Project Series A

    5.00       5-1-2046        8,500,000        9,621,830  

California Public Works Board Judicial Council Project Series A

    5.00       3-1-2031        3,260,000        3,629,488  

Pasadena CA PFA CAB Rose Bowl Series A ¤

    0.00       3-1-2027        2,095,000        1,827,762  

Pasadena CA PFA CAB Rose Bowl Series A ¤

    0.00       3-1-2028        4,450,000        3,773,155  

Pasadena CA PFA CAB Rose Bowl Series A ¤

    0.00       3-1-2029        4,520,000        3,715,033  

Pasadena CA PFA CAB Rose Bowl Series A ¤

    0.00       3-1-2031        2,185,000        1,679,216  

Pasadena CA PFA CAB Rose Bowl Series A ¤

    0.00       3-1-2032        2,000,000        1,490,400  

Pasadena CA PFA CAB Rose Bowl Series A ¤

    0.00       3-1-2033        4,295,000        3,090,553  
     28,827,437  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  9


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue: 0.56%  

Mizuho Tender Option Bond Trust Receipts/Floater Certificates Series 2019-MIZ9002 (Mizuho Bank Limited LOC) 144Aø

    1.81 %       3-1-2021      $ 15,000,000      $ 15,000,000  

Mizuho Tender Option Bond Trust Receipts/Floater Certificates Series 2019-MIZ9003 (Mizuho Bank Limited LOC) 144Aø

    1.81       3-1-2036        13,000,000        13,000,000  

Norco CA Redevelopment Agency Tax Refunding Redevelopment Bond Project Area #1

    6.00       3-1-2036        1,120,000        1,128,915  

San Diego County CA Regional Transportation Commission Limited Tax Series A

    5.00       4-1-2048        915,000        1,075,994  
     30,204,909  
  

 

 

 
Transportation Revenue: 0.45%  

Bay Area CA Toll Authority Toll Bridge Series A (SIFMA Municipal Swap +1.25%) ±

    2.86       4-1-2036        23,545,000        24,546,840  
         

 

 

 
Utilities Revenue: 0.37%  

M-S-R California Energy Authority Gas Series B

    6.13       11-1-2029        15,805,000        20,158,171  
         

 

 

 
     246,974,499  
  

 

 

 

Colorado: 4.16%

 

Airport Revenue: 0.42%  

Denver CO City & County Airport System Revenue Series 2012A

    5.00       12-1-2034        12,855,000        16,941,605  

Denver CO City & County Airport System Revenue Series 2012A

    5.00       12-1-2037        3,130,000        3,780,602  

Denver CO City & County Airport System Revenue Series 2012B

    5.00       11-15-2030        2,000,000        2,196,740  
     22,918,947  
  

 

 

 
Education Revenue: 0.88%  

Colorado Board of Governors State University Enterprise System Revenue Bonds Series 2013C

    5.25       3-1-2033        725,000        819,178  

Colorado Board of Governors State University Enterprise System Revenue Prerefunded Bond Series 2018 E-1

    5.00       3-1-2040        555,000        658,702  

Colorado Board of Governors State University Enterprise System Revenue Prerefunded Bond Series E-1

    5.00       3-1-2040        390,000        461,799  

Colorado Board of Governors State University Enterprise System Revenue Unrefunded Bond Series 2018 E-1

    5.00       3-1-2040        1,055,000        1,257,950  

Colorado ECFA Alexander Dawson School LLC Project

    5.00       2-15-2040        1,000,000        1,003,730  

Colorado ECFA Charter School Aspen Ridge School Project Series 2015A 144A

    4.13       7-1-2026        515,000        534,694  

Colorado ECFA Charter School Banning Lewis Ranch Academy Project Series A

    6.00       12-15-2037        3,380,000        3,560,086  

Colorado ECFA Charter School Banning Lewis Ranch Academy Project Series B-2

    7.00       12-15-2046        3,940,000        4,290,778  

Colorado ECFA Charter School Ben Franklin Academy Project

    5.00       7-1-2036        750,000        850,838  

Colorado ECFA Charter School Collegiate Project (AGC Insured)

    5.25       6-15-2024        1,140,000        1,142,759  

Colorado ECFA Charter School Community Leadership Academy Second Campus Project

    7.00       8-1-2033        1,190,000        1,335,692  

Colorado ECFA Charter School District Montessori Charter School Project

    5.00       7-15-2037        1,150,000        1,237,032  

Colorado ECFA Charter School Pinnacle High School Project Series 2009

    5.13       12-1-2039        500,000        500,535  

Colorado ECFA Charter School Refunding and Improvement Bonds Skyview Academy Project 2014 144A

    4.13       7-1-2024        500,000        514,455  

Colorado ECFA Charter School Refunding and Improvement Bonds University Laboratory School Project 2015

    5.00       12-15-2028        600,000        678,642  

Colorado ECFA Charter School Rocky Mountain Classical Academy Project Series A

    7.50       9-1-2033        5,015,000        6,149,293  

Colorado ECFA Charter School Rocky Mountain Classical Academy Project Series A

    8.00       9-1-2043        5,930,000        7,365,119  

 

The accompanying notes are an integral part of these financial statements.

 

 

10  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Education Revenue (continued)  

Colorado ECFA Charter School Rocky Mountain Classical Academy Project Series A

    8.13 %       9-1-2048      $ 3,795,000      $ 4,730,392  

Colorado ECFA Charter School Twin Peaks Charter Academy

    6.50       3-15-2043        1,290,000        1,339,807  

Colorado ECFA Refunding Bonds The University Corporation for Atmosphere Research Project Series 2010

    5.00       9-1-2032        1,265,000        1,297,131  

Colorado ECFA Refunding Bonds The University Corporation for Atmosphere Research Project Series B

    5.00       9-1-2030        1,770,000        1,927,512  

Colorado ECFA Union Colony School Project Revenue Bond Series 2018

    5.00       4-1-2048        715,000        830,101  

Colorado PFA Charter School Highline Academy Project

    6.25       12-15-2020        80,000        83,835  

Colorado PFA Charter School Highline Academy Project

    6.75       12-15-2025        455,000        478,910  

Colorado PFA Charter School Highline Academy Project

    7.38       12-15-2040        4,010,000        4,242,781  
     47,291,751  
  

 

 

 
GO Revenue: 0.41%  

Arapahoe County CO Copperleaf Metropolitan District #2

    5.75       12-1-2045        500,000        522,245  

Arapahoe County CO Littleton Metropolitan School District #6

    5.50       12-1-2043        9,900,000        12,574,089  

Aurora CO Cornerstar Metropolitan District Refunding Bond Series A

    5.25       12-1-2047        1,000,000        1,057,870  

Aurora CO Park 70 Metropolitan District

    5.00       12-1-2046        1,000,000        1,104,320  

Broadway Station Metropolitan District #3 Series A

    5.00       12-1-2049        1,250,000        1,307,400  

Colorado International Center Metropolitan District #3 Refunding Bonds

    4.63       12-1-2031        635,000        651,377  

Colorado Parker Homestead Metropolitan District Refunding & Improvement Bonds Series 2016

    5.63       12-1-2044        1,000,000        1,057,200  

Thompson Crossing Metropolitan District #4 Refunding & Improvement Bonds

    5.00       12-1-2049        2,125,000        2,261,043  

Weld County CO Eaton Area Park & Recreation District Series 2015

    5.50       12-1-2038        1,075,000        1,139,790  

Wheatlands CO Metropolitan District #2 Refunding Bond (BAM Insured)

    5.00       12-1-2030        500,000        589,625  
     22,264,959  
  

 

 

 
Health Revenue: 0.35%  

Aspen Valley Hospital District Refunding Bonds Series 2012

    5.00       10-15-2033        600,000        640,818  

Colorado Health Facilities Authority Commonspirit Health Series A2

    5.00       8-1-2038        4,000,000        4,775,400  

Colorado Health Facilities Authority Evangelical Lutheran Good Samaritan Society Series 2015A

    5.00       6-1-2040        1,000,000        1,197,920  

Colorado Health Facilities Authority Frasier Meadows Retirement Community Project Series 2017A

    5.25       5-15-2047        1,000,000        1,122,390  

Colorado Health Facilities Authority Sisters Leavenworth Series A

    5.00       1-1-2040        5,000,000        5,000,000  

Colorado Health Facilities Authority Sisters of Charity Leavenworth Health System Series 2013A

    5.50       1-1-2035        1,000,000        1,142,980  

Colorado Health Facilities Authority Sunny Vista Living Center Series 2015A 144A

    5.00       12-1-2025        670,000        717,684  

Colorado Health Facility Authority Hospital Revenue Series A

    4.00       11-15-2043        3,500,000        3,907,400  

Denver CO Health & Hospital Authority Refunding Bonds Series 2017A 144A

    5.00       12-1-2034        500,000        600,205  
     19,104,797  
  

 

 

 
Miscellaneous Revenue: 0.49%  

Aurora CO E-470 Public Highway Authority CAB Series A (National Insured) ¤

    0.00       9-1-2034        4,000,000        2,686,120  

Colorado Bridge Enterprise Revenue

    4.00       12-31-2029        2,705,000        3,059,680  

Colorado Bridge Enterprise Revenue

    4.00       6-30-2030        3,115,000        3,514,374  

Colorado Bridge Enterprise Revenue

    4.00       6-30-2031        665,000        747,334  

Colorado Regional Transportation District Certificate of Participation Series 2010A

    5.38       6-1-2031        2,500,000        2,540,650  

Colorado Regional Transportation District Certificate of Participation Series 2014A

    5.00       6-1-2044        2,000,000        2,202,880  

Denver CO School District #1 Certificate of Participation Series B

    5.00       12-15-2035        1,000,000        1,178,870  

Denver CO School District #1 Certificate of Participation Series B

    5.00       12-15-2045        1,200,000        1,386,744  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  11


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue (continued)  

Fremont County CO Finance Corporation Certificate of Participation Series 2013

    5.25 %       12-15-2038      $ 1,265,000      $ 1,351,728  

Longmont CO Certificate of Participation Series 2014

    5.00       12-1-2034        1,000,000        1,123,240  

Platte Valley CO Fire Protection District Series 2012

    5.00       12-1-2036        325,000        343,181  

Westminster CO Certificate of Participation Series 2015A

    5.00       12-1-2035        2,000,000        2,349,580  

Westminster CO Public Schools Certificate of Participation Series 2019 (AGM Insured)

    5.00       12-1-2048        3,500,000        4,183,130  
     26,667,511  
  

 

 

 
Tax Revenue: 1.27%  

Commerce City CO Sales & Use Tax Revenue Bonds Series 2014 (AGM Insured)

    5.00       8-1-2044        1,250,000        1,403,550  

Colorado Park Creek Metropolitan District Refunding Bonds Series A

    5.00       12-1-2045        500,000        565,505  

Colorado Regional Transportation District Fastracks Project Revenue Bonds Series 2013A

    5.00       11-1-2031        1,000,000        1,099,990  

Denver CO City & County Refunding & Improvement Bonds Series A

    5.00       8-1-2044        3,000,000        3,528,570  

Regional Transportation District Colorado Fastracks Project Series A

    5.00       11-1-2041        50,945,000        60,495,150  

Thornton CO Development Authority East 144th Avenue & I-25 Project Series B

    5.00       12-1-2034        1,375,000        1,586,984  
     68,679,749  
  

 

 

 
Transportation Revenue: 0.15%  

Colorado E-470 Public Highway Authority CAB Series B (National Insured) ¤

    0.00       9-1-2022        4,600,000        4,426,304  

Colorado High Performance Transportation Enterprise US 36 & I-25 Managed Lanes

    5.75       1-1-2044        3,360,000        3,635,755  
     8,062,059  
  

 

 

 
Utilities Revenue: 0.06%  

Colorado Springs CO Utilities System Improvement Bonds Series 2013 B-2

    5.00       11-15-2038        3,000,000        3,369,390  
         

 

 

 
Water & Sewer Revenue: 0.13%  

Aurora CO Water Revenue Refunding Bond First Lien

    5.00       8-1-2046        5,000,000        5,930,000  

East Cherry Creek Valley CO Water & Sanitation District

    5.00       11-15-2032        750,000        888,750  
     6,818,750  
  

 

 

 
     225,177,913  
  

 

 

 

Connecticut: 0.79%

 

Education Revenue: 0.03%  

Connecticut HEFA University of Hartford Series N

    5.00       7-1-2031        75,000        91,142  

Connecticut HEFA University of Hartford Series N

    5.00       7-1-2032        550,000        663,592  

Connecticut HEFA University of Hartford Series N

    5.00       7-1-2033        470,000        563,648  

Connecticut HEFA University of Hartford Series N

    5.00       7-1-2034        450,000        538,308  
     1,856,690  
  

 

 

 
GO Revenue: 0.16%  

Hamden CT BAN

    5.00       8-15-2026        1,235,000        1,358,883  

Hartford CT Series A

    5.00       4-1-2028        3,165,000        3,501,946  

Hartford CT Series B

    5.00       4-1-2025        1,220,000        1,359,263  

Hartford CT Series B

    5.00       4-1-2026        1,470,000        1,634,228  

Hartford CT Series B

    5.00       4-1-2027        1,000,000        1,109,060  
     8,963,380  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

12  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue: 0.10%  

Connecticut General Obligation Bonds 2012 Series E

    5.00 %       9-15-2032      $ 4,860,000      $ 5,268,240  
         

 

 

 
Tax Revenue: 0.50%  

Connecticut Special Tax Obligation Revenue Transportation Infrastructure Purpose Series 2014A

    5.00       9-1-2028        10,105,000        11,682,896  

Connecticut Special Tax Obligation Revenue Transportation Infrastructure Purpose Series 2018B

    5.00       10-1-2036        5,000,000        6,096,950  

Connecticut Special Tax Obligation Revenue Transportation Infrastructure Purpose Series 2018B

    5.00       10-1-2037        7,500,000        9,104,700  
     26,884,546  
  

 

 

 
     42,972,856  
  

 

 

 

Delaware: 0.27%

 

Education Revenue: 0.19%  

Delaware EDA Odyssey Charter School Incorporated Project Series A 144A

    7.00       9-1-2045        7,500,000        8,110,575  

Kent County DE Charter School Incorporated Project

    7.38       5-1-2037        2,110,000        2,238,457  
     10,349,032  
  

 

 

 
Transportation Revenue: 0.08%  

Delaware Transportation Authority U.S. 301 Project

    5.00       6-1-2055        3,950,000        4,496,917  
         

 

 

 
     14,845,949  
  

 

 

 

District of Columbia: 0.73%

 

Education Revenue: 0.03%  

District of Columbia Cesar Chavez Public Charter School

    6.50       11-15-2021        1,560,000        1,575,522  
         

 

 

 
GO Revenue: 0.11%  

District of Columbia Series A

    5.00       6-1-2037        5,000,000        6,048,450  
         

 

 

 
Miscellaneous Revenue: 0.29%  

District of Columbia Revenue Refunding Bonds National Public Radio Incorporated

    4.00       4-1-2033        3,400,000        3,703,586  

District of Columbia Series A

    5.00       10-15-2044        10,000,000        12,282,200  
     15,985,786  
  

 

 

 
Tax Revenue: 0.30%  

District of Columbia Income Tax Secured Series G

    5.00       12-1-2036        15,000,000        15,993,600  
         

 

 

 
     39,603,358  
  

 

 

 

Florida: 6.29%

 

Airport Revenue: 1.63%  

Broward County FL Airport System Revenue Bond AMT Series 2015A

    5.00       10-1-2036        12,440,000        14,393,329  

Broward County FL Port Facilities Revenue AMT Series B

    4.00       9-1-2039        10,000,000        11,082,700  

Greater Orlando FL Aviation Authority AMT Series A

    5.00       10-1-2046        3,000,000        3,467,760  

Hillsborough County FL Aviation Authority Revenue Tampa International Airport Series A

    5.00       10-1-2048        7,000,000        8,284,430  

Hillsborough County FL Aviation Authority Revenue Tampa International Airport Series B

    5.00       10-1-2040        1,000,000        1,144,480  

Hillsborough County FL Aviation Authority Revenue Tampa International Airport Series E

    5.00       10-1-2048        10,000,000        11,877,900  

Hillsborough County FL Aviation Authority Revenue Tampa International Airport Series F

    5.00       10-1-2048        17,000,000        20,562,350  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  13


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Airport Revenue (continued)  

Jacksonville FL Port Authority Series B

    5.00 %       11-1-2044      $ 4,080,000      $ 4,915,176  

Jacksonville FL Port Authority Series B

    5.00       11-1-2048        9,870,000        11,833,044  

Miami-Dade County FL Seaport AMT Series B

    6.00       10-1-2033        500,000        578,570  
     88,139,739  
  

 

 

 
Education Revenue: 0.56%  

Capital Trust Agency Florida Educational Facilities Revenue Renaissance Charter School Incorporated 144A

    5.00       6-15-2039        3,610,000        3,804,976  

Florida Development Finance Corporation Educational Facilities Renaissance Charter School Project Series A

    8.50       6-15-2044        13,290,000        15,331,078  

Florida Higher Educational Facilities Authority Jacksonville University Project Series A-1 144A

    5.00       6-1-2048        2,000,000        2,229,220  

Lakeland FL Educational Facilities Authority Florida Southern College Project Series A

    5.00       9-1-2025        530,000        575,543  

Lakeland FL Educational Facilities Authority Florida Southern College Project Series A

    5.00       9-1-2028        1,195,000        1,290,755  

Pinellas County FL Educational Facilities Authority Barry University Project

    5.00       10-1-2027        1,600,000        1,697,808  

Seminole County FL IDA Choices in Learning Series A

    6.20       11-15-2026        1,380,000        1,439,782  

Seminole County FL IDA Choices in Learning Series A

    7.38       11-15-2041        3,525,000        3,706,996  
     30,076,158  
  

 

 

 
GO Revenue: 0.60%  

Miami-Dade County FL School District

    5.00       3-15-2046        15,000,000        17,400,900  

Miami-Dade County FL Series 2014-A

    5.00       7-1-2043        12,935,000        15,183,491  
     32,584,391  
  

 

 

 
Health Revenue: 0.77%  

ACTS Retirement Life Communities Incorporated Obligated Group Escambia County Health Facilities Authority Refunding Bonds Series 2003B (AGC Insured, TD Bank NA SPA) ø

    1.70       11-15-2029        1,365,000        1,365,000  

Atlantic Beach FL Health Care Facilities Fleet Landing Project Series B

    5.63       11-15-2043        5,000,000        5,552,550  

Collier County FL IDA NCH Healthcare System Project

    6.25       10-1-2039        17,015,000        17,998,467  

Holmes County FL Hospital Corporation Doctors Memorial Hospital Project

    6.00       11-1-2038        2,500,000        2,375,000  

Lee County FL IDA Shell Point Alliance

    5.00       11-15-2049        6,350,000        7,261,924  

Lee County FL Memorial Health System Series B ø

    1.77       4-1-2049        7,000,000        7,000,000  
     41,552,941  
  

 

 

 
Housing Revenue: 0.30%  

Florida Housing Finance Corporation Journet Place Apartments Series 1

    7.60       12-15-2047        790,000        962,978  

Florida Housing Finance Corporation Villa Capri Phase III

    7.60       12-15-2042        2,595,000        2,685,098  

Volusia County FL Educational Facility Authority Embry-Riddle Aeronautical University %%

    5.00       10-15-2044        2,500,000        3,018,250  

Volusia County FL Educational Facility Authority Embry-Riddle Aeronautical University %%

    5.00       10-15-2049        8,000,000        9,628,640  
     16,294,966  
  

 

 

 
Industrial Development Revenue: 0.04%  

Florida Development Finance Corporation 144A

    5.00       5-1-2029        2,000,000        2,213,520  
         

 

 

 
Miscellaneous Revenue: 0.44%  

CityPlace Florida Community Development District

    5.00       5-1-2022        1,000,000        1,078,520  

Collier County FL School Board Refunding Bond Certificate of Participation (AGM Insured)

    5.25       2-15-2021        1,000,000        1,045,810  

Hillsborough County FL Communications Services

    5.00       10-1-2038        8,000,000        9,373,760  

 

The accompanying notes are an integral part of these financial statements.

 

 

14  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue (continued)  

Indigo FL Community Development District Series C ††

    1.40 %       5-1-2030      $ 2,248,150      $ 1,573,705  

Lakeside Plantation FL Community Development District Series A

    6.95       5-1-2031        1,041,000        1,042,499  

Marshall Creek Florida Community Development District ††

    5.00       5-1-2032        1,865,000        1,803,231  

Marshall Creek Florida Community Development District

    6.32       5-1-2045        120,000        115,026  

Orlando FL Capital Improvement Special Revenue Series B

    5.00       10-1-2033        1,525,000        1,764,440  

Orlando FL Capital Improvement Special Revenue Series B

    5.00       10-1-2035        1,680,000        1,941,055  

Orlando FL Capital Improvement Special Revenue Series B

    5.00       10-1-2036        1,765,000        2,035,910  

Pinellas County FL IDA Drs. Kiran & Pallavi Patel Project

    5.00       7-1-2039        2,000,000        2,322,980  
     24,096,936  
  

 

 

 
Resource Recovery Revenue: 0.08%  

Florida Development Finance Corporation Solid Waste AMT Pro USA Incorporated 144A

    5.00       8-1-2029        4,000,000        4,262,520  
         

 

 

 
Tax Revenue: 0.75%  

Florida Board of Education Public Education Refunding Capital Outlay Series D

    4.00       6-1-2031        8,000,000        8,463,440  

Florida Board of Public Education Series B

    4.00       6-1-2037        4,000,000        4,617,240  

Florida Board of Public Education Series B

    4.00       6-1-2039        4,910,000        5,630,886  

Florida Board of Public Education Series E

    4.00       6-1-2036        8,740,000        10,125,203  

Florida Board of Public Education Series E

    5.00       6-1-2031        10,065,000        11,950,980  
     40,787,749  
  

 

 

 
Transportation Revenue: 0.18%  

Florida Department of Transportation Series A (AGM Insured)

    4.00       7-1-2038        4,170,000        4,753,466  

Osceola County FL Transportation Revenue Refunding Bonds and Improvement Osceola Parkway Series 2019A-1 %%

    5.00       10-1-2044        2,000,000        2,415,940  

Osceola County FL Transportation Revenue Refunding Bonds and Improvement Osceola Parkway Series 2019A-1 %%

    5.00       10-1-2049        2,250,000        2,700,923  
     9,870,329  
  

 

 

 
Utilities Revenue: 0.10%  

Jacksonville FL Electric Authority Subordinate Revenue Bonds 2012 Series A

    4.00       10-1-2031        5,040,000        5,174,770  
         

 

 

 
Water & Sewer Revenue: 0.84%  

Broward County FL Water and Sewer Utility Revenue Series A

    5.00       10-1-2038        20,000,000        25,134,200  

Daytona Beach FL Refunding & Improvement Bonds Project (AGM Insured)

    5.00       11-1-2031        1,155,000        1,266,527  

Daytona Beach FL Refunding & Improvement Bonds Project (AGM Insured)

    5.00       11-1-2032        1,465,000        1,604,541  

Florida Keys Aqueduct Authority Series A

    5.00       9-1-2041        2,750,000        3,191,348  

North Sumter County FL Utility Dependent District (BAM Insured)

    5.00       10-1-2044        3,000,000        3,633,510  

North Sumter County FL Utility Dependent District

    5.00       10-1-2049        3,250,000        3,889,958  

Viera East Florida Community Development District Water Management Project (National Insured)

    5.75       5-1-2020        2,020,000        2,043,533  

Viera East Florida Community Development District Water Management Project (National Insured)

    5.75       5-1-2021        2,140,000        2,240,537  

Viera East Florida Community Development District Water Management Project (National Insured)

    5.75       5-1-2022        2,265,000        2,453,856  
     45,458,010  
  

 

 

 
     340,512,029  
  

 

 

 

Georgia: 2.77%

 

Education Revenue: 0.18%  

Cobb County GA Development Authority Charter Learning Center Foundation Central Project Series A ††

    4.38       7-1-2025        1,705,000        1,481,594  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  15


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Education Revenue (continued)  

Georgia Private Colleges & Universities Authority Mercer University Project

    5.00 %       10-1-2040      $ 5,000,000      $ 5,578,200  

Georgia Private Colleges & Universities Authority Series A

    5.25       10-1-2027        2,655,000        2,821,761  
     9,881,555  
  

 

 

 
Energy Revenue: 0.08%  

Municipal Electric Authority of GA Project I Series A

    5.00       1-1-2044        3,580,000        4,232,169  
         

 

 

 
Health Revenue: 0.10%  

Fulton County GA Development Authority Hospital Revenue Bond Series A

    5.00       4-1-2047        2,250,000        2,604,038  

The Glynn-Brunswick Memorial Hospital Authority Revenue Anticipation Certificates Series 2015

    5.00       8-1-2034        2,580,000        2,927,965  
     5,532,003  
  

 

 

 
Transportation Revenue: 0.12%  

Georgia Road & Tollway Authority CAB I-75 South Expressway Lanes Project Series A 144A¤

    0.00       6-1-2034        3,750,000        1,639,575  

Georgia Road & Tollway Authority CCAB I-75 South Expressway Lanes Project Series B 144A¤

    0.00       6-1-2049        5,600,000        4,641,392  
     6,280,967  
  

 

 

 
Utilities Revenue: 2.29%  

Appling County GA Development Authority Oglethorpe Power Corporation Hatch Project

    2.40       1-1-2038        16,530,000        16,565,044  

Bartow County GA Development Authority Pollution Control Georgia Power Company Plant Bowen Project

    2.75       12-1-2032        20,000,000        20,640,000  

Burke County GA Development Authority Georgia Power Company Plant Vogtle Project

    2.93       11-1-2053        14,750,000        15,432,335  

Burke County GA Development Authority Georgia Power Company Plant Vogtle Project Series 2

    2.93       11-1-2048        10,000,000        10,462,600  

Burke County GA Development Authority Oglethorpe Power Corporation Vogtle Project Series F

    3.00       11-1-2045        5,000,000        5,134,300  

Georgia Municipal Electric Authority Power Series EE (Ambac Insured)

    7.25       1-1-2024        400,000        484,872  

Main Street Natural Gas Incorporated Georgia Gas Project Series A (Royal Bank of Canada LIQ)

    4.00       3-1-2023        1,000,000        1,080,550  

Main Street Natural Gas Incorporated Georgia Gas Project Series A

    5.00       5-15-2032        3,745,000        4,598,748  

Main Street Natural Gas Incorporated Georgia Gas Project Series B

    4.00       8-1-2049        20,000,000        22,306,400  

Main Street Natural Gas Incorporated Georgia Gas Project Series C

    4.00       8-1-2048        15,000,000        16,352,250  

Main Street Natural Gas Incorporated Georgia Gas Project Subordinate Bond Series A (Royal Bank of Canada LIQ)

    4.00       4-1-2048        2,900,000        3,148,124  

Main Street Natural Gas Incorporated Georgia Gas Project Subordinate Bond Series B (1 Month LIBOR +0.75%) ±

    1.90       4-1-2048        5,100,000        5,111,628  

Municipal Electric Authority of Georgia Plant Vogtle Units 3&4 Project M

    5.00       1-1-2037        1,100,000        1,313,532  

Municipal Electric Authority of Georgia Plant Vogtle Units 3&4 Project M

    5.00       1-1-2038        1,100,000        1,308,362  
     123,938,745  
  

 

 

 
     149,865,439  
  

 

 

 

Guam: 0.05%

 

Airport Revenue: 0.01%  

Guam Port Authority Private Activity-AMT Bond Series 2018B

    5.00       7-1-2030        500,000        604,080  
         

 

 

 
Housing Revenue: 0.00%  

Guam Housing Corporation Guaranteed Mortgage-Backed Securities Series A (FHLMC Insured)

    5.75       9-1-2031        60,000        61,787  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

16  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue: 0.02%  

Guam Government Business Privilege Tax Series A

    5.00 %       1-1-2031      $ 1,000,000      $ 1,046,820  
         

 

 

 
Water & Sewer Revenue: 0.02%  

Guam Government Waterworks Authority Series 2013

    5.25       7-1-2023        1,000,000        1,117,930  
         

 

 

 
     2,830,617  
  

 

 

 

Hawaii: 0.41%

 

Airport Revenue: 0.36%  

Hawaii Airports System Revenue Series A

    5.00       7-1-2048        7,000,000        8,300,810  

Hawaii AMT Series A

    5.00       7-1-2041        9,500,000        10,857,930  
     19,158,740  
  

 

 

 
GO Revenue: 0.05%  

Hawaii Prerefunded Bond Series DZ

    5.00       12-1-2031        1,670,000        1,794,148  

Hawaii Unrefunded Bond Series DZ

    5.00       12-1-2031        1,030,000        1,106,570  
     2,900,718  
  

 

 

 
     22,059,458  
  

 

 

 

Idaho: 0.09%

 

Education Revenue: 0.09%  

Idaho Housing & Finance Association Idaho Arts Charter School Incorporated Project Series A

    5.75       12-1-2032        500,000        540,545  

Idaho Housing & Finance Association Legacy Public Charter School Incorporated Project Series A

    5.85       5-1-2033        670,000        703,105  

Idaho Housing & Finance Association Legacy Public Charter School Incorporated Project Series A

    6.25       5-1-2043        1,365,000        1,432,800  

Idaho Housing & Finance Association Liberty Charter School Series A

    6.00       6-1-2038        500,000        501,020  

Idaho Housing & Finance Association Nonprofit CAB North Star Charter School Series B 144A¤

    0.00       7-1-2049        1,276,564        248,943  

Idaho Housing & Finance Association Nonprofit North Star Charter School Series A

    6.75       7-1-2048        1,322,876        1,440,096  
     4,866,509  
  

 

 

 

Illinois: 12.78%

 

Airport Revenue: 0.56%  

Chicago IL O’Hare International Airport AMT Passenger Facility Charge Series B

    5.00       1-1-2026        5,000,000        5,348,550  

Chicago IL O’Hare International Airport AMT Senior Lien Series C

    5.50       1-1-2044        4,000,000        4,418,240  

Chicago IL O’Hare International Airport Customer Facility Charge Senior Lien (AGM Insured)

    5.50       1-1-2043        4,530,000        5,047,100  

Chicago IL O’Hare International Airport Customer Facility Charge Senior Lien Series D

    5.75       1-1-2043        4,500,000        5,018,445  

Chicago IL O’Hare International Airport Senior Lien Series B

    5.00       1-1-2039        8,000,000        9,447,760  

Chicago IL O’Hare International Airport Transportation Infrastructure Properties Obligated Group

    5.00       7-1-2038        1,000,000        1,174,590  
     30,454,685  
  

 

 

 
Education Revenue: 0.43%  

Illinois Finance Authority Charter Schools Project Series A

    6.25       9-1-2039        7,955,000        8,848,267  

Illinois Finance Authority Charter Schools Refunding & Improvement Bonds Series A

    6.88       10-1-2031        1,570,000        1,667,576  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  17


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Education Revenue (continued)  

Illinois Finance Authority Student Housing Illinois State University

    6.75 %       4-1-2031      $ 8,000,000      $ 8,549,680  

University of Illinois Auxiliary Facilities Systems CAB Series A (National Insured) ¤

    0.00       4-1-2026        2,355,000        2,066,866  

University of Illinois Auxiliary Facilities Systems CAB Series A (National Insured) ¤

    0.00       4-1-2027        2,435,000        2,076,544  
     23,208,933  
  

 

 

 
GO Revenue: 3.63%  

Champaign & Piatt Counties IL School Series A (AGM Insured)

    5.00       10-1-2021        1,890,000        2,009,845  

Chicago IL Board of Education CAB City Colleges (National Insured) ¤

    0.00       1-1-2025        9,935,000        8,799,827  

Chicago IL Board of Education CAB School Reform Series A (National Insured) ¤

    0.00       12-1-2020        1,000,000        980,620  

Chicago IL Board of Education CAB School Reform Series B-1 (National Insured) ¤

    0.00       12-1-2023        2,930,000        2,680,628  

Chicago IL Board of Education CAB School Reform Series B-1 (National Insured) ¤

    0.00       12-1-2026        4,245,000        3,563,593  

Chicago IL CAB City Colleges (National Insured) ¤

    0.00       1-1-2030        5,995,000        4,455,184  

Chicago IL CAB Project & Refunding Bond Series C (AGM Insured) ¤

    0.00       1-1-2026        7,360,000        6,396,870  

Chicago IL Neighborhoods Alive 21 Program Series B

    5.50       1-1-2032        1,285,000        1,459,811  

Chicago IL Neighborhoods Alive 21 Program Series B

    5.50       1-1-2034        1,500,000        1,698,765  

Chicago IL Series A (National Insured)

    5.00       1-1-2029        3,835,000        3,847,694  

Chicago IL Series A

    5.50       1-1-2034        7,175,000        8,125,759  

Chicago IL Series A

    5.50       1-1-2035        1,715,000        1,939,442  

Chicago IL Series A (AGM Insured)

    5.00       1-1-2028        9,075,000        9,105,129  

Chicago IL Series A

    5.50       1-1-2033        12,730,000        14,434,929  

Cook County IL Series A

    5.25       11-15-2022        3,000,000        3,095,910  

Cook County IL Series C (AGM Insured)

    5.00       11-15-2024        4,240,000        4,659,718  

Cook County IL Series C

    5.00       11-15-2025        3,490,000        3,808,602  

Cook County IL Series C

    5.00       11-15-2027        325,000        353,850  

Cook County IL Series G

    5.00       11-15-2028        27,320,000        28,094,795  

Illinois (AGM Insured)

    5.00       4-1-2026        3,000,000        3,365,580  

Illinois

    5.50       1-1-2030        2,900,000        3,538,203  

Illinois Series 1 (National Insured)

    6.00       11-1-2026        3,200,000        3,734,944  

Illinois Series A (AGM Insured)

    5.00       4-1-2024        3,000,000        3,310,560  

Kane, Cook & DuPage Counties IL Refunding Bond Series D

    5.00       1-1-2028        810,000        915,138  

Kane, Cook & DuPage Counties IL Refunding Bond Series D

    5.00       1-1-2033        2,000,000        2,219,380  

Kane, Cook & DuPage Counties IL School District #46 CAB Series B (Ambac Insured) ¤

    0.00       1-1-2023        8,215,000        7,883,607  

Kane, Cook & DuPage Counties IL School District #46 CAB Series B (Ambac Insured) ¤

    0.00       1-1-2023        16,725,000        15,940,096  

Kane, Cook & DuPage Counties IL School District #46 Elgin Refunding Bond Series D

    5.00       1-1-2035        1,850,000        2,045,841  

Kendall, Kane & Will Counties IL CAB School District #308 (AGM Insured) ¤

    0.00       2-1-2025        805,000        730,964  

Kendall, Kane & Will Counties IL CAB School District #308 (AGM Insured) ¤

    0.00       2-1-2026        5,050,000        4,472,179  

Kendall, Kane & Will Counties IL CAB School District #308 (AGM Insured) ¤

    0.00       2-1-2027        12,050,000        10,387,100  

Lake County IL School District #24 Millburn CAB (National Insured) ¤

    0.00       1-1-2024        2,000,000        1,841,360  

Lake County IL School District #38 Big Hollow CAB (Ambac Insured) ¤

    0.00       2-1-2020        1,250,000        1,247,888  

Lake County IL School District #38 Big Hollow CAB (Ambac Insured) ¤

    0.00       2-1-2021        1,325,000        1,292,882  

Lake County IL School District #38 Big Hollow CAB (Ambac Insured) ¤

    0.00       2-1-2024        5,385,000        4,844,346  

Lake County IL Township High School District #126 Zion-Benton CAB (National Insured) ¤

    0.00       2-1-2020        910,000        908,844  

McHenry & Kane Counties IL Community Consolidated School District #158

    5.63       1-15-2032        2,500,000        2,692,800  

McHenry & Kane Counties IL Community Consolidated School District #158 CAB (AGM/FGIC Insured) ¤

    0.00       1-1-2023        755,000        714,457  

Metropolitan Water Reclamation District of Greater Chicago Refunding Bond Series C

    5.25       12-1-2032        1,500,000        2,002,260  

 

The accompanying notes are an integral part of these financial statements.

 

 

18  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue (continued)  

Tazewell County IL School District #51 (National Insured)

    9.00 %       12-1-2023      $ 350,000      $ 445,858  

Will & Cook Counties IL Lincoln-Way Community High School District #210 CAB Series B ¤

    0.00       1-1-2032        400,000        275,420  

Will & Cook Counties IL Lincoln-Way Community High School District #210 Refunding Bond Series A

    5.00       1-1-2028        500,000        534,945  

Will County IL Community Unit School (National Insured) ¤

    0.00       11-1-2020        2,110,000        2,081,325  

Will County IL Community Unit School District #201 Crete-Monee Prerefunded Bond CAB (National Insured) ¤

    0.00       11-1-2023        430,000        405,632  

Will County IL Community Unit School District #201 Crete-Monee Unrefunded Bond CAB (National Insured) ¤

    0.00       11-1-2023        1,070,000        991,708  

Will County IL Lincoln-Way Community High School District #210 CAB Series B ¤

    0.00       1-1-2033        2,830,000        1,865,904  

Will County IL Lincoln-Way Community High School District #210 Unrefunded Bond CAB (AGM Insured) ¤

    0.00       1-1-2026        7,000,000        6,098,400  
     196,298,592  
  

 

 

 
Health Revenue: 0.14%  

Illinois Finance Authority Centegra Health System Project

    5.00       9-1-2020        1,465,000        1,501,522  

Illinois Finance Authority Friendship Village of Schaumberg

    5.00       2-15-2022        1,680,000        1,705,855  

Illinois Finance Authority Lutheran Life Communities

    5.00       11-1-2049        1,000,000        1,067,970  

Illinois Finance Authority Prerefunded Bonds Advocate Health

    4.00       6-1-2047        1,895,000        2,023,045  

Illinois Finance Authority Unrefunded Bonds Advocate Health

    4.00       6-1-2047        1,105,000        1,136,393  
     7,434,785  
  

 

 

 
Miscellaneous Revenue: 1.05%  

Chicago IL Board of Education Series C

    5.00       12-1-2020        4,600,000        4,725,994  

Chicago IL Board of Education Series C

    5.00       12-1-2021        7,240,000        7,621,114  

Chicago IL Certificate of Participation River Point Plaza Redevelopment Project Series A 144A

    4.84       4-15-2028        5,250,000        5,325,968  

Illinois

    5.00       8-1-2024        2,000,000        2,139,360  

Illinois

    5.00       8-1-2025        6,165,000        6,587,364  

Illinois

    5.25       7-1-2030        2,500,000        2,725,225  

Illinois

    5.50       7-1-2025        6,000,000        6,648,840  

Illinois

    5.50       7-1-2026        4,450,000        4,927,307  

Illinois Public Improvement Series 2013

    5.50       7-1-2038        4,000,000        4,377,040  

Illinois Series 2017D

    5.00       11-1-2022        5,935,000        6,406,358  

Illinois Series C

    5.00       11-1-2029        4,500,000        5,150,430  
     56,635,000  
  

 

 

 
Tax Revenue: 5.51%  

Chicago IL Motor Fuel Refunding Bond

    5.00       1-1-2026        4,000,000        4,292,400  

Chicago IL Motor Fuel Refunding Bond

    5.00       1-1-2028        1,000,000        1,067,310  

Chicago IL Motor Fuel Tax Refunding Bonds Series 2013

    5.00       1-1-2024        680,000        736,488  

Chicago IL Motor Fuel Tax Refunding Bonds Series 2013

    5.00       1-1-2025        2,595,000        2,794,659  

Chicago IL Refunding Bonds Series 2002

    5.00       1-1-2028        4,430,000        5,236,614  

Chicago IL Refunding Bonds Series 2002

    5.00       1-1-2029        1,500,000        1,773,120  

Chicago IL Series A

    5.25       1-1-2038        6,000,000        6,483,660  

Chicago IL Transit Authority Sales Tax Receipts Bonds (AGM Insured)

    5.00       12-1-2044        4,000,000        4,516,000  

Chicago IL Transit Authority Sales Tax Receipts Bonds

    5.00       12-1-2046        18,250,000        20,574,320  

Cook County IL Sales Tax Revenue Bonds Series 2012

    5.00       11-15-2037        2,500,000        2,677,300  

Illinois Regional Transportation Authority (AGM Insured)

    5.75       6-1-2023        400,000        445,852  

Illinois Regional Transportation Authority Series A

    5.00       6-1-2044        22,840,000        25,318,140  

Illinois Regional Transportation Authority Series A (AGM Insured)

    5.75       6-1-2034        19,000,000        26,029,810  

Illinois Regional Transportation Authority Series A (National Insured)

    6.00       7-1-2027        10,620,000        13,352,420  

Illinois Regional Transportation Authority Series A (National Insured)

    6.00       7-1-2033        5,000,000        6,966,800  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  19


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue (continued)  

Illinois Regional Transportation Authority Series B (National Insured)

    5.50 %       6-1-2027      $ 16,455,000      $ 19,744,848  

Illinois Sales Tax Revenue Bond Junior Obligation Tax Exempt Series A (BAM Insured)

    4.00       6-15-2034        2,000,000        2,178,880  

Illinois Sales Tax Revenue Bond Junior Obligation Tax Exempt Series A (BAM Insured)

    4.13       6-15-2037        1,945,000        2,118,650  

Illinois Sales Tax Revenue Build Illinois Bond

    5.00       6-15-2029        3,000,000        3,121,650  

Illinois Sales Tax Revenue Build Illinois Bonds Junior Obligation Series C

    4.00       6-15-2029        10,580,000        11,320,388  

Illinois Sales Tax Securitization Series A

    5.00       1-1-2038        3,000,000        3,478,950  

Illinois Sales Tax Securitization Series C

    5.00       1-1-2022        2,000,000        2,124,820  

Illinois Sales Tax Securitization Series C

    5.00       1-1-2023        2,500,000        2,731,575  

Illinois Sales Tax Securitization Series C

    5.00       1-1-2024        2,500,000        2,795,175  

Illinois Sales Tax Series C

    4.00       6-15-2031        5,000,000        5,300,050  

Illinois Sports Facilities Authority Refunding Bonds Insured State Tax Supported CAB (Ambac Insured) ¤

    0.00       6-15-2022        2,295,000        2,183,578  

Illinois Sports Facilities Authority Refunding Bonds Insured State Tax Supported CAB (Ambac Insured) ¤

    0.00       6-15-2026        2,030,000        1,726,596  

Illinois Sports Facilities Authority State Tax Supported CAB (Ambac Insured) ¤

    0.00       6-15-2021        7,705,000        7,491,109  

Illinois Sports Facilities Authority State Tax Supported CAB (Ambac Insured) ¤

    0.00       6-15-2024        17,570,000        15,883,280  

Illinois Sports Facilities Authority State Tax Supported CAB (Ambac Insured) ¤

    0.00       6-15-2025        2,575,000        2,262,112  

Illinois Sports Facilities Authority State Tax Supported Refunding Bond (AGM Insured)

    5.00       6-15-2025        3,745,000        4,239,602  

Illinois Sports Facilities Authority State Tax Supported Refunding Bond (AGM Insured)

    5.00       6-15-2026        4,775,000        5,391,596  

Illinois Sports Facilities Authority State Tax Supported Refunding Bond (AGM Insured)

    5.00       6-15-2027        8,845,000        9,959,647  

Illinois Sports Facilities Authority State Tax Supported Refunding Bond (AGM Insured)

    5.00       6-15-2028        4,030,000        4,525,368  

Illinois Sports Facilities Authority State Tax Supported Refunding Bond (AGM Insured)

    5.25       6-15-2032        3,500,000        3,928,575  

Illinois Tender Option Bond Trust Receipts/Certificates Series 2019-XF0779 (BAM Insured, TD Bank NA LIQ) 144Aø

    1.69       1-1-2048        500,000        500,000  

Illinois Tender Option Bond Trust Receipts/Floater Certificates Series 2017-XG0108 (Barclays Bank plc LOC, Barclays Bank plc LIQ) 144Aø

    1.76       4-1-2046        3,210,000        3,210,000  

Metropolitan Pier & Exposition Authority CAB McCormick Place Expansion Project Series A (National Insured) ¤

    0.00       12-15-2026        12,245,000        10,387,923  

Metropolitan Pier & Exposition Authority CAB McCormick Place Expansion Project Series A (National Insured) ¤

    0.00       12-15-2030        25,700,000        18,642,780  

Metropolitan Pier & Exposition Authority CAB McCormick Place Expansion Project Series A (National Insured) ¤

    0.00       6-15-2031        10,035,000        7,140,404  

Metropolitan Pier & Exposition Authority CAB McCormick Place Expansion Project Series A (National Insured) ¤

    0.00       12-15-2031        9,800,000        6,838,538  

Metropolitan Pier & Exposition Authority CAB McCormick Place Expansion Project Series B (National Insured) ¤

    0.00       6-15-2029        12,085,000        9,324,182  

Metropolitan Pier & Exposition Authority McCormick Place Expansion Project Series B

    5.00       12-15-2028        5,000,000        5,345,950  

Southwestern Illinois Development Authority Local Government Program Collinsville Limited

    5.00       3-1-2025        2,360,000        1,967,744  
            298,128,863  
         

 

 

 
Tobacco Revenue: 0.06%  

Railsplitter IL Tobacco Settlement Authority

    5.00       6-1-2024        3,000,000        3,449,310  
         

 

 

 
Transportation Revenue: 0.28%  

Chicago IL Public Building Commission Transit Authority (Ambac Insured)

    5.25       3-1-2025        2,960,000        3,399,027  

Chicago IL Public Building Commission Transit Authority (Ambac Insured)

    5.25       3-1-2027        3,400,000        4,008,294  

 

The accompanying notes are an integral part of these financial statements.

 

 

20  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Transportation Revenue (continued)  

Illinois Toll Highway Authority

    5.00 %       1-1-2031      $ 5,000,000      $ 6,364,950  

Illinois Toll Highway Authority Toll Senior Series B

    5.00       1-1-2039        1,500,000        1,673,475  
     15,445,746  
  

 

 

 
Utilities Revenue: 0.32%  

Illinois Municipal Electric Agency Power Supply System Series A

    5.00       2-1-2030        7,000,000        8,172,010  

Illinois Municipal Electric Agency Power Supply System Series A

    5.00       2-1-2031        8,000,000        9,306,640  
     17,478,650  
  

 

 

 
Water & Sewer Revenue: 0.80%  

Chicago IL Second Lien

    5.00       11-1-2029        4,600,000        5,002,546  

Chicago IL Wastewater Refunding Second Lien Bond Series C

    5.00       1-1-2039        5,000,000        5,535,200  

Chicago IL Wastewater Transmission Second Lien Series 2012

    5.00       1-1-2027        5,000,000        5,307,650  

Chicago IL Wastewater Transmission Second Lien Series 2014

    5.00       1-1-2039        11,525,000        12,657,677  

Chicago IL Waterworks Second Lien (AGM Insured)

    5.25       11-1-2032        3,250,000        3,942,543  

Chicago IL Waterworks Second Lien Series 2012

    5.00       11-1-2030        5,000,000        5,426,900  

Illinois Finance Authority Clean Water Initiative

    4.00       7-1-2038        5,000,000        5,685,900  
     43,558,416  
  

 

 

 
     692,092,980  
  

 

 

 

Indiana: 0.93%

 

Health Revenue: 0.32%  

Indiana Finance Authority Health System Revenue Bonds Franciscan Alliance Incorporated Obligated Group Series C

    4.00       11-1-2033        12,885,000        14,331,986  

Indiana HFFA Ascension Health Credit Group

    5.00       11-15-2034        2,750,000        3,242,553  
     17,574,539  
  

 

 

 
Industrial Development Revenue: 0.32%  

Indiana Finance Authority Ohio River Bridges East End Crossing Project Series A

    5.00       7-1-2035        9,970,000        10,958,226  

Indiana Finance Authority Ohio River Bridges East End Crossing Project Series A

    5.00       7-1-2040        2,470,000        2,705,169  

Valparaiso IN Pratt Paper LLC Project

    5.88       1-1-2024        745,000        809,122  

Whiting IN

    5.00       3-1-2046        2,500,000        2,751,125  
     17,223,642  
  

 

 

 
Miscellaneous Revenue: 0.18%  

Carmel IN Local Public Improvement Multipurpose Bonds

    5.00       7-15-2031        6,000,000        7,191,720  

Hobart Industry Building Corporation First Mortgage

    4.00       7-15-2035        2,295,000        2,588,508  
     9,780,228  
  

 

 

 
Tax Revenue: 0.09%  

Indianapolis IN Industry Local Public Improvement Bond Bank Community Justice Campus Courthouse & Jail Project

    5.00       2-1-2049        4,000,000        4,861,680  
         

 

 

 
Utilities Revenue: 0.02%  

Tender Option Bond Trust Receipts/Floater Certificates Series 2015-XF0115 (JPMorgan Chase & Company LIQ) 144Aø

    1.89       8-1-2020        875,000        875,000  
         

 

 

 
     50,315,089  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  21


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Iowa: 0.11%

 

GO Revenue: 0.04%  

Altoona IA Annual Appropriation Urban Renewal Series C

    5.00 %       6-1-2031      $ 1,805,000      $ 2,115,911  
         

 

 

 
Industrial Development Revenue: 0.07%  

Iowa Finance Authority Midwestern Disaster Area Project (Korea Development Bank LOC) ø

    1.92       4-1-2022        4,000,000        4,000,000  
         

 

 

 
     6,115,911  
  

 

 

 

Kansas: 1.11%

 

Housing Revenue: 0.14%  

Kansas Development Finance Authority MFHR Woodland Village Apartments Project Series J

    1.68       7-1-2022        7,250,000        7,271,243  
         

 

 

 
Miscellaneous Revenue: 0.22%  

Overland Park KS Development Corporation Revenue Refunding Bonds And Improvement Convention Center

    5.00       3-1-2039        3,395,000        3,991,535  

Overland Park KS Development Corporation Revenue Refunding Bonds And Improvement Convention Center

    5.00       3-1-2044        6,710,000        7,849,157  
     11,840,692  
  

 

 

 
Tax Revenue: 0.75%  

Kansas Department of Transportation Series C

    4.00       9-1-2030        6,650,000        7,099,673  

Kansas Department of Transportation Series C

    4.00       9-1-2031        10,000,000        10,670,600  

Kansas Department of Transportation Series C

    4.00       9-1-2032        7,500,000        8,000,175  

Wyandotte County & Kansas City KS Special Obligation Vacation Village Project Area 4 Major Multi-Sport Athletic Complex Project CAB Series 2015 144A¤

    0.00       9-1-2034        35,395,000        14,995,446  
     40,765,894  
  

 

 

 
     59,877,829  
  

 

 

 

Kentucky: 1.76%

 

Health Revenue: 0.23%  

Kentucky EDFA Norton Healthcare Incorporated Series B (National Insured) ¤

    0.00       10-1-2024        9,260,000        8,343,816  

Kentucky EDFA Norton Healthcare Incorporated Series B (National Insured) ¤

    0.00       10-1-2028        5,140,000        4,117,448  
     12,461,264  
  

 

 

 
Transportation Revenue: 0.14%  

Kentucky Public Transportation Infrastructure Authority Downtown Crossing Project CAB Series B ¤

    0.00       7-1-2030        2,000,000        1,363,100  

Kentucky Public Transportation Infrastructure Authority Downtown Crossing Project CAB Series B ¤

    0.00       7-1-2031        2,780,000        1,755,014  

Kentucky Public Transportation Infrastructure Authority Downtown Crossing Project CAB Series B ¤

    0.00       7-1-2032        2,500,000        1,466,200  

Kentucky Public Transportation Infrastructure Authority Downtown Crossing Project CAB Series C ¤

    0.00       7-1-2033        1,000,000        1,142,600  

Kentucky Public Transportation Infrastructure Authority Downtown Crossing Project CAB Series C ¤

    0.00       7-1-2034        1,505,000        1,718,921  
     7,445,835  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

22  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Utilities Revenue: 1.39%  

Kentucky Public Energy Authority Gas Supply Series A1

    4.00 %       12-1-2049      $ 7,750,000      $ 8,590,178  

Kentucky Public Energy Authority Gas Supply Series A2

    4.00       4-1-2048        8,000,000        8,707,200  

Kentucky Public Energy Authority Gas Supply Series B

    4.00       1-1-2049        15,750,000        17,391,780  

Kentucky Public Energy Authority Gas Supply Series C

    4.00       12-1-2049        15,000,000        16,612,500  

Kentucky Public Energy Authority Gas Supply Series C1

    4.00       2-1-2050        21,000,000        24,010,560  
     75,312,218  
  

 

 

 
     95,219,317  
  

 

 

 

Louisiana: 0.64%

 

Airport Revenue: 0.28%  

New Orleans LA Aviation Board AMT Series B (AGM Insured)

    5.00       1-1-2033        3,000,000        3,422,490  

New Orleans LA Aviation Board AMT Series B

    5.00       1-1-2034        4,500,000        5,117,670  

New Orleans LA Aviation Board General Airport North Terminal Project Series 2017B

    5.00       1-1-2048        1,145,000        1,309,811  

New Orleans LA Aviation Board Gulf Opportunity Zone Consolidated Rental Car Project (AGM Insured)

    5.00       1-1-2036        1,250,000        1,498,550  

New Orleans LA Aviation Board Gulf Opportunity Zone Consolidated Rental Car Project (AGM Insured)

    5.00       1-1-2037        1,750,000        2,092,650  

New Orleans LA Aviation Board Gulf Opportunity Zone Consolidated Rental Car Project (AGM Insured)

    5.00       1-1-2038        1,500,000        1,786,965  
     15,228,136  
  

 

 

 
GO Revenue: 0.03%  

New Orleans LA (FGIC Insured)

    5.50       12-1-2021        1,405,000        1,480,645  
         

 

 

 
Industrial Development Revenue: 0.11%  

St. John the Baptist Parish Louisiana Series A

    2.20       6-1-2037        6,000,000        6,051,720  
         

 

 

 
Miscellaneous Revenue: 0.18%  

Louisiana Local Government Environmental Facilities and CDA Jefferson Parish Gomesa Project 144A

    4.00       11-1-2044        2,000,000        2,024,260  

Louisiana Series D

    4.00       9-1-2032        7,005,000        7,829,979  
     9,854,239  
  

 

 

 
Water & Sewer Revenue: 0.04%  

Shreveport LA Series B (AGM Insured)

    4.00       12-1-2036        730,000        824,374  

Shreveport LA Series B (AGM Insured)

    4.00       12-1-2044        1,000,000        1,101,250  
     1,925,624  
  

 

 

 
     34,540,364  
  

 

 

 

Maryland: 1.01%

 

Education Revenue: 0.33%  

Maryland Economic Development Corporation Salisbury University Project

    5.00       6-1-2027        235,000        251,560  

Maryland Economic Development Corporation Salisbury University Project

    5.00       6-1-2030        200,000        213,012  

Prince George’s County MD Chesapeake Lighthouse Charter School Project Series 2016-A

    5.75       8-1-2033        1,585,000        1,672,603  

Prince George’s County MD Chesapeake Lighthouse Charter School Project Series 2016-A 144A

    6.90       8-1-2041        8,480,000        9,231,498  

Prince George’s County MD Chesapeake Lighthouse Charter School Project Series 2016-A

    7.00       8-1-2046        6,085,000        6,651,331  
     18,020,004  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  23


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Housing Revenue: 0.44%  

Maryland CDA Department of Housing & Community Multifamily Development Bay Country Apartments 144A

    2.52 %       2-1-2021      $ 9,000,000      $ 9,052,470  

Maryland CDA Department of Housing & Community Multifamily Development Huntington Apartments Series C 144A

    2.34       4-1-2021        7,000,000        7,037,590  

Maryland CDA Department of Housing & Community Multifamily Development Park View Woodlawn Series E

    2.41       5-1-2021        7,450,000        7,492,614  
     23,582,674  
  

 

 

 
Miscellaneous Revenue: 0.24%  

Baltimore MD Public Schools Construction & Revitalization Program

    5.00       5-1-2041        6,000,000        7,015,680  

Howard County MD Certificate of Participation Agricultural Land Preservation #90-23 Series A

    8.00       8-15-2020        290,000        300,747  

Maryland State and Local Facilities Loan Series A

    4.00       8-1-2030        5,000,000        5,816,000  
     13,132,427  
  

 

 

 
     54,735,105  
  

 

 

 

Massachusetts: 3.72%

 

Education Revenue: 0.06%  

Lowell MA Collegiate Charter School Revenue

    5.00       6-15-2039        1,000,000        1,073,380  

Lowell MA Collegiate Charter School Revenue

    5.00       6-15-2049        1,750,000        1,864,940  

Massachusetts Educational Financing Authority AMT Series B

    5.38       1-1-2020        75,000        75,000  

Massachusetts Educational Financing Authority Series I

    6.00       1-1-2028        455,000        455,419  
     3,468,739  
  

 

 

 
GO Revenue: 0.20%  

Massachusetts

    5.00       3-1-2041        7,500,000        8,483,550  

Massachusetts Series E

    5.25       9-1-2048        1,765,000        2,186,570  
     10,670,120  
  

 

 

 
Miscellaneous Revenue: 0.21%  

Massachusetts Series A

    5.00       12-1-2036        10,850,000        11,587,800  
         

 

 

 
Tax Revenue: 1.31%  

Massachusetts Series D

    4.00       5-1-2036        15,000,000        17,192,550  

Massachusetts Series F

    5.00       11-1-2041        5,000,000        6,076,100  

Massachusetts Transportation Fund

    5.00       6-1-2048        33,010,000        39,869,808  

Massachusetts Transportation Fund Revenue Rail Enhancement & Accelerated Bridge Programs Series A

    5.00       6-1-2047        6,485,000        7,714,037  
     70,852,495  
  

 

 

 
Water & Sewer Revenue: 1.94%  

Massachusetts Water Resources Authority General Revenue Refunding Bonds Series B (AGM Insured)

    5.25       8-1-2034        11,000,000        15,600,970  

Massachusetts Water Resources Authority General Revenue Refunding Bonds Series B (AGM Insured)

    5.25       8-1-2036        26,680,000        38,681,198  

Massachusetts Water Resources Authority General Revenue Refunding Bonds Series B (AGM Insured)

    5.25       8-1-2037        13,985,000        20,414,324  

Massachusetts Water Resources Authority General Revenue Refunding Bonds Series B

    5.25       8-1-2038        16,000,000        23,562,400  

Massachusetts Water Resources Authority General Revenue Refunding Bonds Series C

    5.25       8-1-2042        6,100,000        6,494,853  
     104,753,745  
  

 

 

 
     201,332,899  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

24  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Michigan: 4.46%

 

Airport Revenue: 0.29%  

Wayne County MI Airport Authority AMT

    5.00 %       12-1-2029      $ 6,000,000      $ 7,080,660  

Wayne County MI Airport Authority AMT

    5.00       12-1-2030        7,220,000        8,496,496  
     15,577,156  
  

 

 

 
Education Revenue: 0.43%  

Michigan Finance Authority Limited Obligation Public School Holly Academy

    6.50       10-1-2020        35,000        35,574  

Michigan Finance Authority Limited Obligation Public School Holly Academy

    8.00       10-1-2040        1,350,000        1,427,598  

Michigan Finance Authority Limited Obligation Public School Madison Academy Project Series A

    7.50       12-1-2020        75,000        76,841  

Michigan Finance Authority Limited Obligation Public School Madison Academy Project Series A

    8.00       12-1-2030        1,135,000        1,165,191  

Michigan Finance Authority Limited Obligation Public School Madison Academy Project Series A

    8.25       12-1-2039        2,220,000        2,276,943  

Michigan Public Educational Facilities Authority Limited Obligation Bradford Academy Project 144A

    6.50       9-1-2037        3,460,000        2,698,800  

Michigan Public Educational Facilities Authority Limited Obligation Bradford Academy Project

    8.50       9-1-2029        1,500,000        1,170,000  

Michigan Public Educational Facilities Authority Limited Obligation Bradford Academy Project

    8.75       9-1-2039        3,500,000        2,730,000  

Michigan Public Educational Facilities Authority Limited Obligation Crescent Academy Project

    7.00       10-1-2036        1,082,500        1,083,691  

Michigan Public Educational Facilities Authority Limited Obligation Madison Academy Project

    8.38       12-1-2030        2,085,000        2,147,321  

Michigan Public Educational Facilities Authority Limited Obligation Madison Academy Project

    8.63       12-1-2039        4,170,000        4,290,680  

Oakland County MI Economic Development Corporation The Academy of The Sacred Heart Project Series A

    6.50       12-15-2036        4,350,000        3,915,000  
     23,017,639  
  

 

 

 
GO Revenue: 0.29%  

Livonia MI Public Schools School District Building & Site Series I

    5.00       5-1-2026        1,075,000        1,184,983  

Livonia MI Public Schools School District Building & Site Series I

    5.00       5-1-2028        1,450,000        1,591,114  

Livonia MI Public Schools School District Building & Site Series I

    5.00       5-1-2029        1,350,000        1,480,896  

Livonia MI Public Schools School District Building & Site Series I

    5.00       5-1-2030        1,775,000        1,942,738  

Livonia MI Public Schools School District Building & Site Series I

    5.00       5-1-2031        1,425,000        1,556,656  

Wayne County MI Building Improvement Series A

    6.75       11-1-2039        8,020,000        8,032,832  
     15,789,219  
  

 

 

 
Health Revenue: 0.50%  

Michigan Finance Authority Trinity Health Credit Group Series A

    5.00       12-1-2047        24,620,000        27,325,738  
         

 

 

 
Miscellaneous Revenue: 1.09%  

Michigan Building Authority Refunding Facilities Program Bond Series I

    5.00       4-15-2041        13,000,000        15,295,410  

Michigan Finance Authority Charter Company Wayne Criminal Justice Center Project

    4.00       11-1-2048        6,000,000        6,590,340  

Michigan Finance Authority Local Government Loan Program City of Detroit Financial Recovery Refunding Bond Series F

    4.50       10-1-2029        7,000,000        7,581,840  

Michigan Finance Authority Local Government Loan Program Series H-1

    5.00       10-1-2031        1,340,000        1,525,242  

Michigan Finance Authority Local Government Loan Program Series H-1

    5.00       10-1-2032        2,000,000        2,275,100  

Michigan Finance Authority Local Government Loan Program Series H-1

    5.00       10-1-2033        2,975,000        3,383,646  

Michigan Finance Authority Local Government Loan Program Series H-1

    5.00       10-1-2034        6,615,000        7,522,512  

Michigan Finance Authority Local Government Loan Program Series H-1

    5.00       10-1-2039        7,955,000        9,048,892  

Michigan Municipal Bond Authority Local Government Loan Program CAB Series G (Ambac Insured) ¤

    0.00       5-1-2020        205,000        203,764  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  25


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue (continued)  

Michigan Municipal Bond Authority Local Government Loan Program Series A (Ambac Insured)

    4.00 %       11-1-2021      $ 80,000      $ 80,168  

Michigan Municipal Bond Authority Local Government Loan Program Series B Group A (Ambac Insured)

    5.25       12-1-2023        920,000        921,592  

Michigan Municipal Bond Authority Local Government Loan Program Series C (Ambac Insured)

    4.75       5-1-2027        4,610,000        4,612,812  
     59,041,318  
  

 

 

 
Tax Revenue: 0.55%  

Detroit MI Downtown Development Authority CAB ¤

    0.00       7-1-2020        2,070,000        2,031,436  

Detroit MI Downtown Development Authority Tax Increment Revenue Refunding Catalyst Development Project Series A (AGM Insured)

    5.00       7-1-2021        400,000        420,492  

Michigan Finance Authority Local Government Loan Program Public Lighting Authority Refunding Bond Series B

    5.00       7-1-2044        16,845,000        18,441,064  

Michigan Finance Authority Refunding Bond Local Government Loan Program Public Lighting Authority Series B

    5.00       7-1-2039        7,895,000        8,700,132  
     29,593,124  
  

 

 

 
Utilities Revenue: 0.09%  

Michigan Strategic Fund Limited Obligation Detroit Edison Company Exempt Facilities Project

    1.45       8-1-2029        3,500,000        3,493,700  

Michigan Strategic Fund Limited Obligation Detroit Edison Company Exempt Facilities Project Series KT

    5.63       7-1-2020        1,200,000        1,224,528  
     4,718,228  
  

 

 

 
Water & Sewer Revenue: 1.22%  

Great Lakes Michigan Water Authority Sewage Disposal System Series 2016-C

    5.00       7-1-2036        8,500,000        9,946,785  

Great Lakes Michigan Water Authority Water Supply System Series 2016-D

    4.00       7-1-2032        11,000,000        12,025,970  

Great Lakes Michigan Water Authority Water Supply System Series 2016-D (AGM Insured)

    4.00       7-1-2033        11,000,000        12,027,400  

Michigan Finance Authority Local Government Loan Program Detroit Refunding Bond Series D-4

    5.00       7-1-2031        6,500,000        7,455,955  

Michigan Finance Authority Local Government Loan Program Detroit Refunding Bond Series D-6 (National Insured)

    5.00       7-1-2036        3,250,000        3,670,778  

Michigan Finance Authority Local Government Loan Program Series C (National Insured)

    5.00       7-1-2025        2,000,000        2,313,160  

Michigan Finance Authority Local Government Loan Program Series C (National Insured)

    5.00       7-1-2026        1,945,000        2,225,352  

Michigan Finance Authority Local Government Loan Program Series C (National Insured)

    5.00       7-1-2027        2,260,000        2,599,678  

Michigan Finance Authority Local Government Loan Program Series C (National Insured)

    5.00       7-1-2028        3,480,000        3,991,908  

Michigan Finance Authority Local Government Loan Program Series C (National Insured)

    5.00       7-1-2032        5,750,000        6,530,793  

Michigan Finance Authority Local Government Loan Program Series C

    5.00       7-1-2035        2,000,000        2,307,760  

Michigan Finance Authority Refunding Bond Local Government Loan Program Detroit Series D-6 (National Insured)

    5.00       7-1-2027        1,000,000        1,150,770  
     66,246,309  
  

 

 

 
     241,308,731  
  

 

 

 

Minnesota: 0.41%

 

Health Revenue: 0.32%  

Minneapolis MN Fairview Health Services Series 2018A

    4.00       11-15-2048        2,315,000        2,551,246  

 

The accompanying notes are an integral part of these financial statements.

 

 

26  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue (continued)  

Shakopee MN Senior Housing Revenue Benedictine Living Community LLC Project 144A

    5.85 %       11-1-2058      $ 14,000,000      $ 14,899,080  
     17,450,326  
  

 

 

 
Utilities Revenue: 0.09%  

Rochester MN Electric Utility Revenue Refunding Bond Series A

    5.00       12-1-2042        3,895,000        4,594,893  
         

 

 

 
     22,045,219  
  

 

 

 
Mississippi: 0.36%  
Industrial Development Revenue: 0.20%  

Perry County MS PCR Leaf River Forest Products Incorporated Project (Georgia-Pacific LLC LOC) 144Aø

    1.83       2-1-2022        10,575,000        10,575,000  
         

 

 

 
Miscellaneous Revenue: 0.16%  

Mississippi Development Bank Special Obligation Jackson Water & Sewer System Project Series A (AGM Insured)

    5.00       9-1-2030        8,155,000        8,825,096  
         

 

 

 
     19,400,096  
  

 

 

 

Missouri: 0.66%

 

GO Revenue: 0.10%  

St. Louis MO Special Administrative Board of The St. Louis School District

    4.00       4-1-2030        4,840,000        5,441,467  
         

 

 

 
Miscellaneous Revenue: 0.46%  

Kansas City MO IDA Series B (AGM Insured)

    5.00       3-1-2049        18,075,000        21,490,271  

Kansas City MO IDA Kansas City International Airport Project

    5.00       3-1-2039        3,000,000        3,618,600  
     25,108,871  
  

 

 

 
Tax Revenue: 0.10%  

Blue Springs MO Special Obligation Tax Refunding & Improvement Bonds Adams Farm Project Series A

    4.00       6-1-2026        5,355,000        5,463,439  
         

 

 

 
     36,013,777  
  

 

 

 

Nebraska: 0.43%

 

Utilities Revenue: 0.43%  

Central Plains Energy Project Gas Supply Nebraska

    4.00       12-1-2049        10,000,000        11,189,800  

Central Plains Energy Project Nebraska Refunding Project #3

    5.00       9-1-2027        1,020,000        1,103,864  

Central Plains Energy Project Nebraska Refunding Project #3

    5.00       9-1-2033        6,000,000        7,701,480  

Central Plains Energy Project Nebraska Refunding Project #3 Series 2012

    5.00       9-1-2042        1,265,000        1,367,971  

Central Plains Energy Project Nebraska Refunding Project #3 Series 2012

    5.25       9-1-2037        1,800,000        1,957,662  
     23,320,777  
  

 

 

 

Nevada: 1.69%

 

GO Revenue: 1.67%  

Clark County NV Refunding Bond Limited Tax

    4.00       7-1-2032        6,000,000        6,858,960  

Clark County NV School District Series A (AGM Insured)

    4.00       6-15-2035        9,585,000        10,629,094  

Clark County NV Series A

    5.00       6-1-2043        9,360,000        11,291,810  

Clark County NV Series A

    5.00       5-1-2048        50,115,000        60,279,324  

Las Vegas NV Series A

    4.00       2-1-2038        1,335,000        1,512,608  
     90,571,796  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  27


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue: 0.02%  

Las Vegas NV Special Improvement District #60 Local Improvement

    5.00 %       6-1-2022      $ 385,000      $ 407,476  

Las Vegas NV Special Improvement District #60 Local Improvement

    5.00       6-1-2023        305,000        328,564  

Las Vegas NV Special Improvement District #60 Local Improvement

    5.00       6-1-2024        180,000        196,470  
     932,510  
  

 

 

 
     91,504,306  
  

 

 

 

New Jersey: 3.23%

 

Airport Revenue: 0.03%  

South Jersey Port Corporation Marine Terminal Refunding Bond Series 2016S

    5.00       1-1-2039        1,350,000        1,521,194  
         

 

 

 
Education Revenue: 0.19%  

New Jersey Educational Facilities Authority Higher Education Facilities Trust Fund

    5.00       6-15-2025        5,830,000        6,599,968  

Rutgers State University Series L

    5.00       5-1-2033        3,560,000        4,017,389  
     10,617,357  
  

 

 

 
GO Revenue: 0.38%  

Bayonne NJ School Refunding Bonds (AGM Insured)

    5.00       7-15-2023        2,505,000        2,811,412  

Newark NJ Qualified General Improvement Series A

    5.00       7-15-2025        5,000,000        5,547,700  

Newark NJ Qualified General Improvement Series A

    5.00       7-15-2026        2,205,000        2,434,033  

Newark NJ Qualified General Improvement Series A

    5.00       7-15-2027        6,035,000        6,646,225  

Newark NJ Qualified General Improvement Series A

    5.25       7-15-2024        1,325,000        1,465,106  

Newark NJ Qualified General Improvement Series B

    5.00       7-15-2025        385,000        443,120  

Newark NJ Qualified General Improvement Series B

    5.00       7-15-2026        395,000        453,176  

Newark NJ Qualified General Improvement Series B

    5.00       7-15-2027        405,000        463,101  

Newark NJ Qualified General Improvement Series B

    5.25       7-15-2024        375,000        426,645  
     20,690,518  
  

 

 

 
Housing Revenue: 0.17%  

New Jersey Housing & Mortgage Finance Agency Villa Victoria Apartments Project Series F

    2.43       11-1-2021        9,000,000        9,071,460  
         

 

 

 
Miscellaneous Revenue: 0.97%  

New Jersey EDA Motor Vehicle Surcharge Revenue Refunding Bond Series A

    3.13       7-1-2029        4,275,000        4,338,185  

New Jersey EDA Revenue Prerefunded Refunding Bonds School Facilities

    5.00       3-1-2026        580,000        627,519  

New Jersey EDA Revenue Unrefunded Refunding Bonds School Facilities

    5.00       3-1-2026        3,645,000        3,900,296  

New Jersey EDA School Facilities Construction Refunding Bond Series NN

    5.00       3-1-2026        15,000,000        16,509,450  

New Jersey Transportation Trust Fund Authority System Bond Series A

    5.00       12-15-2039        1,500,000        1,749,675  

New Jersey TTFA Series A (National Insured)

    5.75       6-15-2023        2,000,000        2,279,340  

New Jersey TTFA Series A (National Insured)

    5.75       6-15-2025        10,000,000        12,006,400  

Newark NJ Housing Authority Port Authority Port Newark Marine Terminal Rental Refunding Bond Newark Redevelopment Project (National Insured)

    5.25       1-1-2024        1,225,000        1,381,151  

Newark NJ Housing Authority Port Newark Marine Terminal Rental (National Insured)

    5.00       1-1-2032        7,620,000        9,578,721  
     52,370,737  
  

 

 

 
Tax Revenue: 0.34%  

Gardens NJ Preservation Trust Open & Farmland Series A (AGM Insured)

    5.75       11-1-2028        15,000,000        18,775,050  
         

 

 

 
Transportation Revenue: 1.00%  

New Jersey TTFA CAB Series A ¤

    0.00       12-15-2028        10,100,000        7,946,579  

New Jersey TTFA CAB Series A ¤

    0.00       12-15-2029        11,875,000        8,987,831  

 

The accompanying notes are an integral part of these financial statements.

 

 

28  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Transportation Revenue (continued)  

New Jersey TTFA CAB Series A ¤

    0.00 %       12-15-2031      $ 4,500,000      $ 3,173,580  

New Jersey TTFA CAB Series A ¤

    0.00       12-15-2026        1,150,000        976,258  

New Jersey TTFA Series A

    5.00       6-15-2042        5,540,000        5,885,807  

New Jersey TTFA Series AA

    5.00       6-15-2044        1,000,000        1,088,640  

New Jersey TTFA Series AA

    5.25       6-15-2033        10,000,000        11,034,100  

New Jersey TTFA Series B

    5.25       6-15-2036        5,575,000        5,844,607  

New Jersey TTFA Series C

    5.25       6-15-2032        8,000,000        9,103,520  
     54,040,922  
  

 

 

 
Water & Sewer Revenue: 0.15%  

New Jersey EDA

    2.20       10-1-2039        8,000,000        7,964,000  
         

 

 

 
     175,051,238  
  

 

 

 

New Mexico: 0.01%

 

Housing Revenue: 0.01%  

New Mexico Mortgage Finance Authority Single-Family Mortgage Revenue Class I (GNMA/FNMA/FHLMC Insured)

    5.35       3-1-2030        400,000        403,792  
         

 

 

 

New York: 8.05%

 

Airport Revenue: 0.38%  

Port Authority of New York & New Jersey Series 205

    5.25       11-15-2039        16,580,000        20,668,296  
         

 

 

 
Education Revenue: 0.34%  

Hempstead Town NY Local Development Corporation The Academy Charter School Project Series A

    7.65       2-1-2044        3,480,000        3,599,816  

Hempstead Town NY Local Development Corporation The Academy Charter School Project Series A

    8.25       2-1-2041        9,375,000        9,766,500  

Westchester County NY Local Development Pace University Series B ø

    1.83       5-1-2044        5,000,000        5,000,000  
     18,366,316  
  

 

 

 
GO Revenue: 0.29%  

New York NY Fiscal 2020 Subordinated Bonds Series B-3 ø

    1.75       10-1-2046        6,000,000        6,000,000  

New York NY Series F-1

    5.00       3-1-2032        3,000,000        3,326,550  

New York NY Subordinate Bond Series B-3 (Citibank NA LOC) ø

    1.68       4-1-2042        6,195,000        6,195,000  
     15,521,550  
  

 

 

 
Health Revenue: 0.14%  

Nassau County NY Local Economic Catholic Health Services

    5.00       7-1-2021        7,000,000        7,367,010  
         

 

 

 
Industrial Development Revenue: 0.13%  

New York Liberty Development Corporation Refunding Bond

    2.80       9-15-2069        1,000,000        1,007,510  

New York Transportation Development Corporation Special Facilities Revenue AMT

    5.00       1-1-2036        5,000,000        5,945,900  
     6,953,410  
  

 

 

 
Miscellaneous Revenue: 0.03%  

New York Tender Option Bond Trust Receipts/Floater Certificates Series 2019-BAML3002 (Bank of America NA LIQ) 144Aø

    1.69       1-15-2056        1,737,895        1,737,895  
         

 

 

 
Tax Revenue: 2.44%  

New York Dormitory Authority Series A

    5.00       2-15-2034        3,790,000        4,544,362  

New York Dormitory Authority Series A

    5.00       3-15-2033        17,170,000        21,613,939  

New York Dormitory Authority Series B Group C

    5.00       2-15-2044        14,860,000        17,035,355  

New York Dormitory Authority Series B Group C

    5.00       2-15-2045        7,330,000        8,399,154  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  29


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue (continued)  

New York Dormitory Authority Series E

    5.00 %       2-15-2044      $ 9,600,000      $ 11,005,344  

New York Dormitory Authority State Personal Income Tax General Purpose Series D %%

    4.00       2-15-2047        14,000,000        15,717,940  

New York Dormitory Authority State Personal Income Tax Unrefunded Bonds General Purpose Series D

    5.00       3-15-2042        1,500,000        1,608,930  

New York NY Transitional Finance Authority Building Aid Revenue Fiscal Year 2019 Subordinate Bond Series S 3 A

    4.00       7-15-2038        4,500,000        5,097,510  

New York NY Transitional Finance Authority Building Aid Revenue Fiscal Year 2015 Series S1

    5.00       7-15-2040        3,155,000        3,653,837  

New York NY Transitional Finance Authority Future Tax Secured Revenue Series A2

    5.00       8-1-2037        12,140,000        14,739,538  

New York NY Transitional Finance Authority Future Tax Secured Revenue Series I

    5.00       5-1-2033        5,395,000        6,016,558  

New York NY Transitional Finance Authority Future Tax Secured Subordinate Bond Series A

    5.00       8-1-2031        17,075,000        19,791,974  

New York NY Transitional Future Tax Secured Subordinate Bond Series F1

    5.00       5-1-2042        2,390,000        2,853,254  
     132,077,695  
  

 

 

 
Tobacco Revenue: 0.01%  

Suffolk NY Tobacco Securitization Corporation Series B

    4.50       6-1-2026        520,000        542,313  
         

 

 

 
Transportation Revenue: 1.22%  

New York Metropolitan Transportation Authority Series A

    5.00       11-15-2030        20,950,000        23,069,512  

New York Metropolitan Transportation Authority Sub Series A-1

    5.00       11-15-2048        7,300,000        8,501,799  

New York Metropolitan Transportation Authority Subordinate Bond Series D (1 Month LIBOR +0.65%) ±

    1.80       11-1-2035        26,815,000        26,840,742  

Niagara Falls NY Bridge Commission (National Insured)

    6.25       10-1-2021        7,230,000        7,847,731  
     66,259,784  
  

 

 

 
Utilities Revenue: 0.65%  

New York Utility Debt Securitization Authority Restructuring Bonds

    5.00       12-15-2037        3,655,000        4,349,011  

New York Utility Debt Securitization Authority Restructuring Bonds

    5.00       12-15-2032        22,785,000        27,409,671  

New York Utility Debt Securitization Authority Restructuring Bonds

    5.00       12-15-2040        2,870,000        3,530,071  
     35,288,753  
  

 

 

 
Water & Sewer Revenue: 2.42%  

New York Environmental Facilities Corporation Municipal Water Trust

    5.00       6-15-2048        10,035,000        12,188,912  

New York NY Municipal Water Finance Authority 2nd General Resolution Series AA

    5.00       6-15-2035        25,000,000        31,712,750  

New York NY Municipal Water Finance Authority 2nd General Resolution Series AA

    5.00       6-15-2044        17,400,000        18,425,382  

New York NY Municipal Water Finance Authority 2nd General Resolution Series AA

    5.25       6-15-2049        5,000,000        6,159,050  

New York NY Municipal Water Finance Authority 2nd General Resolution Series BB

    5.00       6-15-2044        30,265,000        32,254,318  

New York NY Municipal Water Finance Authority 2nd General Resolution Series BB

    5.00       6-15-2047        2,330,000        2,555,730  

New York NY Municipal Water Finance Authority 2nd General Resolution Series BB

    5.25       6-15-2044        9,800,000        10,622,122  

New York NY Municipal Water Finance Authority Water & Sewer System Series DD

    5.00       6-15-2026        3,255,000        3,437,052  

New York NY Water Finance Authority Series DD

    5.25       6-15-2047        11,490,000        13,932,200  
     131,287,516  
  

 

 

 
     436,070,538  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

30  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

North Carolina: 1.25%

 

Airport Revenue: 0.06%  

Charlotte NC Airport Series A

    5.50 %       7-1-2034      $ 2,500,000      $ 2,552,950  

North Carolina Port Authority Series B

    5.00       2-1-2025        1,000,000        1,003,050  
     3,556,000  
  

 

 

 
Education Revenue: 0.12%  

North Carolina Capital Facilities Finance Agency Forest University Series 2016

    5.00       1-1-2033        1,000,000        1,208,160  

North Carolina Capital Facilities Finance Agency Meredith College Series 2018

    5.00       6-1-2038        500,000        572,195  

University of North Carolina at Ashville Series 2017

    5.00       6-1-2042        625,000        722,988  

University of North Carolina at Greensboro Series 2014

    5.00       4-1-2033        2,000,000        2,278,900  

University of North Carolina at Greensboro Series 2014

    5.00       4-1-2039        1,620,000        1,836,302  
     6,618,545  
  

 

 

 
Health Revenue: 0.74%  

Charlotte Mecklenburg Hospital Authority Health Care Refunding Bonds Series 2018

    5.00       1-15-2036        500,000        615,590  

Charlotte Mecklenburg NC Hospital Authority Atrium Health Series B

    5.00       1-15-2048        10,000,000        10,778,700  

Charlotte Mecklenburg NC Hospital Authority Atrium Health Series C

    5.00       1-15-2048        20,000,000        22,234,000  

North Carolina Medical Care Commission Baptist Hospital Project Series 2017

    5.25       6-1-2029        2,000,000        2,032,680  

North Carolina Medical Care Commission Deerfield Episcopal Retirement Community Project Series 2016

    5.00       11-1-2031        1,500,000        1,775,415  

North Carolina Medical Care Commission Presbyterian Homes Project Series 2016C

    4.00       10-1-2031        1,500,000        1,650,465  

North Carolina Medical Care Commission Southeastern Regional Medical Center Series 2012

    5.00       6-1-2026        385,000        416,008  

North Carolina Medical Care Commission Southeastern Regional Medical Center Series 2012

    5.00       6-1-2032        500,000        537,190  
     40,040,048  
  

 

 

 
Housing Revenue: 0.05%  

North Carolina Facilities Finance Agency The Arc of North Carolina Project Series 2017A (HUD Insured)

    5.00       10-1-2034        1,000,000        1,167,530  

North Carolina Facilities Finance Agency The NCA&T University Foundation LLC Project Series 2015A (AGC Insured)

    5.00       6-1-2027        1,000,000        1,163,220  

North Carolina HFA Series 2

    4.25       1-1-2028        340,000        346,025  
     2,676,775  
  

 

 

 
Miscellaneous Revenue: 0.11%  

Cabarrus County NC Limited Obligation Installment Financing Contract Series 2017

    5.00       6-1-2031        500,000        615,105  

Charlotte NC Certificate of Participation Equipment Acquisition and Public Facilities Series A

    5.00       12-1-2026        1,160,000        1,243,450  

Charlotte NC Certificate of Participation Transit Projects Series C

    5.00       6-1-2030        1,000,000        1,120,440  

Henderson County NC Limited Obligation Series A

    5.00       10-1-2030        500,000        604,425  

Orange County NC Limited Obligation Series 2018

    5.00       10-1-2032        215,000        271,625  

Orange County NC Limited Obligation Series 2018

    5.00       10-1-2033        220,000        277,251  

Orange County NC Limited Obligation Series 2018

    5.00       10-1-2034        65,000        81,834  

Raleigh NC Limited Obligation Series A

    5.00       10-1-2033        1,000,000        1,155,520  

Wilmington NC Limited Obligation Series A

    5.00       6-1-2030        400,000        483,544  
     5,853,194  
  

 

 

 
Transportation Revenue: 0.14%  

North Carolina Department of Transportation I-77 Hot Lanes Project Series 2015

    5.00       6-30-2028        1,275,000        1,461,902  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  31


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Transportation Revenue (continued)  

North Carolina Turnpike Authority Monroe Expressway Toll Revenue Bond Series 2016A

    5.00 %       7-1-2042      $ 500,000      $ 568,620  

North Carolina Turnpike Authority Triangle Expressway System (AGM Insured)

    5.00       1-1-2049        4,500,000        5,436,540  
     7,467,062  
  

 

 

 
Utilities Revenue: 0.03%  

North Carolina Municipal Power Agency #1 Catawba Nuclear Power Project Series A

    5.00       1-1-2021        1,500,000        1,500,000  
         

 

 

 
     67,711,624  
  

 

 

 

North Dakota: 0.28%

 

Miscellaneous Revenue: 0.19%  

University of North Dakota Infrastructure Energy Improvement Project Green Certificates Series A

    5.00       4-1-2057        9,000,000        10,380,600  
         

 

 

 
Water & Sewer Revenue: 0.09%  

North Dakota PFA Revolving Fund Program Series A

    5.00       10-1-2038        3,780,000        4,690,262  
         

 

 

 
     15,070,862  
  

 

 

 
Ohio: 2.47%  
Airport Revenue: 0.15%  

Cleveland OH Airport System Revenue Series A

    5.00       1-1-2025        4,015,000        4,323,071  

Cleveland OH Airport System Revenue Series A (AGM Insured)

    5.00       1-1-2031        3,600,000        3,876,228  
     8,199,299  
  

 

 

 
GO Revenue: 0.23%  

Highland OH Local School District Medina County School Improvement Series A

    5.25       12-1-2048        9,435,000        10,552,481  

Highland OH Local School District Medina County School Improvement Series A

    5.25       12-1-2054        1,500,000        1,667,115  
     12,219,596  
  

 

 

 
Health Revenue: 0.74%  

Allen County OH Catholic Healthcare Series B

    5.25       9-1-2027        3,825,000        3,928,428  

Allen County OH Hospital Facilities Revenue Bonds Series B

    5.00       8-1-2047        5,000,000        5,423,300  

Cleveland Cuyahoga County OH Facilities Improvement Centers for Dialysis

    5.00       12-1-2047        5,205,000        5,696,873  

Franklin County OH Trinity Health Credit Group

    4.00       12-1-2044        3,450,000        3,830,397  

Lucas County OH Hospital Revenue Promedica Healthcare Obligation

    5.25       11-15-2048        15,000,000        17,284,500  

Montgomery County OH Hospital Kettering Medical Center (National Insured)

    6.25       4-1-2020        685,000        692,953  

Montgomery County OH Hospital Revenue Series A

    4.00       11-15-2042        3,000,000        3,227,070  
     40,083,521  
  

 

 

 
Housing Revenue: 0.06%  

Ohio Housing Finance Agency MFHR Chadwick Place & Union Square Apartments

    1.60       1-1-2022        3,120,000        3,123,619  
         

 

 

 
Miscellaneous Revenue: 0.79%  

Ohio Private Activity Bond AMT Portsmouth Bypass Project (AGM Insured)

    5.00       12-31-2026        2,030,000        2,374,775  

Ohio Private Activity Bond AMT Portsmouth Bypass Project (AGM Insured)

    5.00       12-31-2028        1,600,000        1,859,296  

Ohio Private Activity Bond AMT Portsmouth Bypass Project (AGM Insured)

    5.00       12-31-2030        2,250,000        2,596,050  

Ohio Private Activity Bond AMT Portsmouth Bypass Project (AGM Insured)

    5.00       12-31-2035        12,000,000        13,718,160  

 

The accompanying notes are an integral part of these financial statements.

 

 

32  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue (continued)  

Ohio Private Activity Bond AMT Portsmouth Bypass Project (AGM Insured)

    5.00 %       12-31-2039      $ 2,500,000      $ 2,835,425  

Ohio Series A

    5.00       2-1-2036        4,265,000        5,058,205  

Ohio Water Development Authority Drinking Water Assistance Fund

    5.00       12-1-2035        5,390,000        6,520,391  

Ohio Water Development Authority Drinking Water Assistance Fund

    5.00       12-1-2036        2,000,000        2,413,980  

Ohio Water Development Authority Fresh Water Series B

    5.00       12-1-2034        1,895,000        2,297,915  

RiverSouth OH Lazarus Building Redevelopment Series A

    5.75       12-1-2027        3,150,000        3,158,064  
     42,832,261  
  

 

 

 
Tax Revenue: 0.11%  

Franklin County OH

    5.00       6-1-2048        5,000,000        6,068,900  
         

 

 

 
Transportation Revenue: 0.18%  

Ohio Turnpike Commission CAB Series A-4 ¤

    0.00       2-15-2034        8,500,000        9,685,580  
         

 

 

 
Utilities Revenue: 0.21%  

Lancaster OH Port Authority Gas Supply

    5.00       8-1-2049        10,000,000        11,576,900  
         

 

 

 
     133,789,676  
  

 

 

 

Oklahoma: 1.07%

 

Airport Revenue: 0.65%  

Oklahoma City OK Airport Trust Series 33

    5.00       7-1-2043        9,000,000        10,689,120  

Oklahoma City OK Airport Trust Series 33

    5.00       7-1-2047        11,500,000        13,578,625  

Tulsa OK Airports Improvement Trust AMT Series A (BAM Insured)

    5.00       6-1-2035        1,055,000        1,177,580  

Tulsa OK Airports Improvement Trust Series A (AGM Insured)

    5.00       6-1-2043        4,485,000        5,275,526  

Tulsa OK Airports Improvement Trust Series A (AGM Insured)

    5.25       6-1-2048        3,770,000        4,491,578  
     35,212,429  
  

 

 

 
Miscellaneous Revenue: 0.36%  

Garfield County OK Educational Facilities Authority Enid Public Schools Project Series A

    5.00       9-1-2030        2,000,000        2,374,880  

Garfield County OK Educational Facilities Authority Enid Public Schools Project Series A

    5.00       9-1-2031        1,145,000        1,354,088  

Muskogee OK Industrial Trust Educational Facilities

    4.00       9-1-2030        4,440,000        5,056,672  

Muskogee OK Industrial Trust Educational Facilities

    4.00       9-1-2032        4,000,000        4,480,680  

Muskogee OK Industrial Trust Educational Facilities Lease Muskogee Public Schools Project

    4.00       9-1-2031        5,520,000        6,235,502  
     19,501,822  
  

 

 

 
Transportation Revenue: 0.02%  

Oklahoma Turnpike Authority Revenue Series A

    5.00       1-1-2042        1,000,000        1,161,940  
         

 

 

 
Water & Sewer Revenue: 0.04%  

McGee Creek Authority Oklahoma Water Revenue (National Insured)

    6.00       1-1-2023        1,820,000        1,941,194  
         

 

 

 
     57,817,385  
  

 

 

 

Oregon: 0.17%

 

GO Revenue: 0.17%  

Jackson County OR School District #005 (AGM Insured)

    5.00       6-15-2030        2,560,000        3,326,669  

Jackson County OR School District #005 (AGM Insured)

    5.00       6-15-2031        2,125,000        2,748,879  

Jackson County OR School District #005 (AGM Insured)

    5.00       6-15-2032        2,350,000        3,022,829  
     9,098,377  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  33


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Pennsylvania: 5.41%

 

Airport Revenue: 0.36%  

Philadelphia PA Airport Series A

    5.00 %       7-1-2047      $ 11,450,000      $ 13,298,946  

Philadelphia PA Airport Series B

    5.00       7-1-2042        5,500,000        6,433,075  
     19,732,021  
  

 

 

 
Education Revenue: 0.15%  

East Hempfield Township PA IDA Student Services Incorporated Student Housing Project of Millersville University

    5.00       7-1-2029        500,000        554,255  

Montgomery County PA Higher Education & Health Authority Arcadia University

    5.00       4-1-2024        1,540,000        1,723,352  

Montgomery County PA Higher Education & Health Authority Arcadia University

    5.00       4-1-2025        1,625,000        1,854,434  

Pennsylvania HEFAR Indiana University Student Housing Project Series A

    5.00       7-1-2032        1,000,000        1,095,700  

Philadelphia PA IDA 1st Philadelphia Preparatory Charter School Project Series A

    7.00       6-15-2033        2,000,000        2,310,160  

Philadelphia PA IDA New Foundations Charter School Project

    6.00       12-15-2027        275,000        309,911  
     7,847,812  
  

 

 

 
GO Revenue: 0.48%  

Allegheny County PA West Mifflin Area School District (AGM Insured)

    5.00       4-1-2025        1,180,000        1,362,440  

Allegheny County PA West Mifflin Area School District (AGM Insured)

    5.00       4-1-2026        1,200,000        1,414,860  

Allegheny County PA West Mifflin Area School District (AGM Insured)

    5.00       4-1-2027        1,000,000        1,184,880  

Chester County PA

    4.00       11-15-2032        3,000,000        3,475,950  

Philadelphia PA School District Series A

    5.00       9-1-2024        2,075,000        2,394,073  

Philadelphia PA School District Series D

    5.00       9-1-2021        5,000,000        5,303,800  

Philadelphia PA School District Series F

    5.00       9-1-2035        3,820,000        4,465,580  

Williamsport PA Area School District (AGM Insured)

    4.00       3-1-2032        1,440,000        1,580,112  

Williamsport PA Area School District (AGM Insured)

    4.00       3-1-2033        1,490,000        1,630,567  

Williamsport PA Area School District (AGM Insured)

    4.00       3-1-2034        1,555,000        1,699,460  

Williamsport PA Area School District (AGM Insured)

    4.00       3-1-2035        1,205,000        1,315,499  
     25,827,221  
  

 

 

 
Health Revenue: 0.75%  

Allegheny County PA Hospital Development Authority University of Pittsburgh Medical Center Series A

    5.00       7-15-2025        5,900,000        7,038,818  

Berks County PA Municipal Authority

    5.00       11-1-2044        2,000,000        2,099,280  

Berks County PA Municipal Authority Reading Hospital & Medical Center Project Series B (SIFMA Municipal Swap +1.50%) ±

    3.11       11-1-2039        20,000,000        20,205,400  

Montgomery County PA HEFA Thomas Jefferson University

    4.00       9-1-2035        2,750,000        3,093,723  

Montgomery County PA HEFA Thomas Jefferson University

    4.00       9-1-2038        1,000,000        1,111,380  

Montgomery County PA HEFA Thomas Jefferson University

    5.00       9-1-2031        4,100,000        5,133,651  

Quakertown PA General Authority Health LifeQuest Obligated Group Series C

    4.50       7-1-2027        750,000        754,748  

Quakertown PA General Authority Health LifeQuest Obligated Group Series C

    5.00       7-1-2032        1,000,000        1,010,030  
     40,447,030  
  

 

 

 
Industrial Development Revenue: 0.58%  

Montgomery County PA IDA Exelon Generation Company LLC Project Series A

    2.55       12-1-2029        11,530,000        11,591,686  

Pennsylvania EDFA Bridges Finco LP

    5.00       12-31-2030        600,000        696,528  

Pennsylvania EDFA Bridges Finco LP

    5.00       12-31-2034        14,275,000        16,451,224  

Pennsylvania EDFA Bridges Finco LP

    5.00       12-31-2038        2,100,000        2,398,641  
     31,138,079  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

34  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue: 1.60%  

Delaware Valley PA Regional Finance Authority Local Government Public Improvements Project

    5.75 %       7-1-2032      $ 8,555,000      $ 11,768,600  

Delaware Valley PA Regional Finance Authority Local Government Series A (Ambac Insured)

    5.50       8-1-2028        24,830,000        31,556,199  

Delaware Valley PA Regional Finance Authority Local Government Series C (Ambac Insured)

    7.75       7-1-2027        4,025,000        5,680,805  

Pennsylvania Finance Authority Pennsylvania Hills Project Series B (National Insured) ¤

    0.00       12-1-2025        1,110,000        977,133  

Pennsylvania Public School Building Authority Philadelphia School District Project

    5.00       4-1-2024        3,960,000        4,301,392  

Pennsylvania Public School Building Authority Series A (AGM Insured, Citibank NA LIQ) 144Aø

    1.80       12-1-2023        5,000,000        5,000,000  

State Public School Building Authority Pennsylvania Philadelphia School District Project

    5.00       4-1-2022        2,635,000        2,841,294  

State Public School Building Authority Pennsylvania Philadelphia School District Project Series A

    5.00       6-1-2034        1,915,000        2,236,165  

State Public School Building Authority Pennsylvania Philadelphia School District Project Series A

    5.00       6-1-2024        2,250,000        2,584,913  

State Public School Building Authority Pennsylvania Philadelphia School District Project Series A

    5.00       6-1-2035        16,715,000        19,475,315  
     86,421,816  
  

 

 

 
Resource Recovery Revenue: 0.25%  

Pennsylvania EDFA Solid Waste Disposal Waste Management Incorporated Project

    1.45       8-1-2045        13,500,000        13,499,865  
         

 

 

 
Tax Revenue: 0.13%  

Pennsylvania Turnpike Commission

    5.00       12-1-2043        6,000,000        7,169,040  
         

 

 

 
Tobacco Revenue: 0.04%  

Commonwealth Financing Authority Tobacco Master Settlement Payment Revenue Bonds

    5.00       6-1-2035        2,000,000        2,420,500  
         

 

 

 
Transportation Revenue: 0.80%  

Lancaster PA Parking Authority Guaranteed Series A (BAM Insured)

    4.00       9-1-2044        2,000,000        2,169,000  

Pennsylvania Turnpike Commission Motor License Series B-1

    5.00       12-1-2040        12,410,000        12,853,161  

Pennsylvania Turnpike Commission Motor License Series B-2

    5.00       12-1-2035        9,900,000        11,987,910  

Pennsylvania Turnpike Commission Series A-1

    5.00       12-1-2047        1,750,000        2,079,455  

Pennsylvania Turnpike Commission Subordinate Bond Series B-1

    5.00       6-1-2027        1,000,000        1,227,190  

Pennsylvania Turnpike Commission Subordinate Bond Series B-1

    5.00       6-1-2028        1,450,000        1,778,512  

Pennsylvania Turnpike Commission Subordinate Bond Series B-2

    5.00       6-1-2027        1,200,000        1,472,628  

Pennsylvania Turnpike Commission Subordinate Bond Series B-2

    5.00       6-1-2028        5,000,000        6,132,800  

Tender Option Bond Trust Receipts Series 2019-XM0746 (AGM Insured, JPMorgan Chase & Company LIQ) 144Aø

    1.82       6-1-2027        3,860,000        3,860,000  
     43,560,656  
  

 

 

 
Water & Sewer Revenue: 0.27%  

Luzerne County PA IDA Revenue Refunding Bonds AMT Pennsylvania American Water Company Project

    2.45       12-1-2039        5,500,000        5,530,635  

Philadelphia PA Series B

    5.00       7-1-2033        8,000,000        9,307,920  
     14,838,555  
  

 

 

 
     292,902,595  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  35


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Puerto Rico: 0.06%

 

Transportation Revenue: 0.06%  

Puerto Rico Highway & Transportation Authority Series AA (National Insured)

    5.50 %       7-1-2020      $ 3,015,000      $ 3,063,964  
         

 

 

 

Rhode Island: 0.05%

 

Airport Revenue: 0.05%  

Rhode Island Commerce Corporation First Lien Special Facility Airport Corporation Intermodal Facility Project Series 2018

    5.00       7-1-2031        2,115,000        2,557,712  
         

 

 

 

South Carolina: 1.32%

 

Education Revenue: 0.23%  

South Carolina Education Assistance Authority Student Loan Series I

    5.10       10-1-2029        895,000        895,412  

South Carolina Jobs EDA York Preparatory Academy Project Series A

    7.25       11-1-2045        1,500,000        1,657,920  

University of South Carolina Athletic Facilities Series A

    5.00       5-1-2043        8,155,000        9,658,374  
     12,211,706  
  

 

 

 
Health Revenue: 0.26%  

South Carolina Jobs EDA Prisma Health Obligated Group Series C ø

    1.77       5-1-2048        14,000,000        14,000,000  
         

 

 

 
Resource Recovery Revenue: 0.10%  

South Carolina Economic Development Jobs

    6.00       2-1-2020        370,000        369,959  

South Carolina Jobs EDA Solid Waste Disposal AMT RePower South Berkeley LLC Project Green Bond 144A

    6.00       2-1-2035        1,880,000        2,006,486  

South Carolina Jobs EDA Solid Waste Disposal AMT RePower South Berkeley LLC Project Green Bond 144A

    6.25       2-1-2045        2,750,000        2,933,095  
     5,309,540  
  

 

 

 
Utilities Revenue: 0.52%  

Patriots Energy Group Financing Agency South Carolina Series A

    4.00       10-1-2048        26,000,000        28,343,640  
         

 

 

 
Water & Sewer Revenue: 0.21%  

Columbia SC Waterworks & Sewer System

    5.00       2-1-2043        10,380,000        11,598,301  
         

 

 

 
     71,463,187  
  

 

 

 

South Dakota: 0.45%

 

Airport Revenue: 0.03%  

Rapid City SD Series A

    6.75       12-1-2031        1,020,000        1,020,000  

Rapid City SD Series A

    7.00       12-1-2035        750,000        750,000  
     1,770,000  
  

 

 

 
Health Revenue: 0.27%  

South Dakota HEFA Sanford Health Project Series E

    5.00       11-1-2042        13,465,000        14,515,135  
         

 

 

 
Housing Revenue: 0.15%  

South Dakota Board of Regents Housing & Auxiliary Facilities System

    5.00       4-1-2023        750,000        837,900  

South Dakota Board of Regents Housing & Auxiliary Facilities System

    5.00       4-1-2024        1,100,000        1,263,801  

South Dakota Board of Regents Housing & Auxiliary Facilities System

    5.00       4-1-2025        1,000,000        1,177,580  

South Dakota Board of Regents Housing & Auxiliary Facilities System

    5.00       4-1-2026        1,540,000        1,854,915  

South Dakota Board of Regents Housing & Auxiliary Facilities System

    5.00       4-1-2032        1,010,000        1,229,847  

South Dakota Board of Regents Housing & Auxiliary Facilities System

    5.00       4-1-2033        1,250,000        1,517,888  
     7,881,931  
  

 

 

 
     24,167,066  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

36  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Tennessee: 1.27%

 

Airport Revenue: 0.34%  

Metropolitan Nashville TN Airport Authority

    5.00 %       7-1-2044      $ 15,000,000      $ 18,203,850  
         

 

 

 
Utilities Revenue: 0.93%  

Tennessee Energy Acquisition Corporation Gas Project

    4.00       11-1-2049        20,000,000        22,230,400  

Tennessee Energy Acquisition Corporation Series A

    4.00       5-1-2048        24,155,000        25,855,270  

Tennessee Energy Acquisition Corporation Series A

    5.25       9-1-2026        1,020,000        1,220,114  

Tennessee Energy Acquisition Corporation Series C

    5.00       2-1-2021        1,000,000        1,036,610  
     50,342,394  
  

 

 

 
     68,546,244  
  

 

 

 

Texas: 11.56%

 

Airport Revenue: 1.01%  

Austin TX Airport System AMT

    5.00       11-15-2039        8,000,000        9,087,200  

Austin TX Airport System AMT

    5.00       11-15-2044        3,500,000        3,956,610  

Dallas-Fort Worth TX International Airport AMT Series D

    5.00       11-1-2038        13,250,000        14,035,460  

Dallas-Fort Worth TX International Airport Series H

    5.00       11-1-2042        20,765,000        21,980,375  

Houston TX Airport System Subordinate Bond Lien AMT Series A

    5.00       7-1-2041        4,750,000        5,660,908  
     54,720,553  
  

 

 

 
Education Revenue: 0.43%  

Clifton TX Higher Education Finance Corporation International Leadership Texas Series D

    6.00       8-15-2038        6,000,000        6,801,120  

Clifton TX Higher Education Finance Corporation International Leadership Texas Series D

    6.13       8-15-2048        6,750,000        7,612,380  

Clifton TX Higher Educational Finance Corporation International Leadership Series A

    5.75       8-15-2038        2,000,000        2,241,640  

Newark TX Higher Education Finance Corporation Austin Achieve Public Schools Incorporated

    5.00       6-15-2048        750,000        771,555  

Southwest Texas Higher Education Authority Incorporated Southern Methodist University Project

    5.00       10-1-2030        1,460,000        1,808,414  

Southwest Texas Higher Education Authority Incorporated Southern Methodist University Project

    5.00       10-1-2032        650,000        797,615  

Southwest Texas Higher Education Authority Incorporated Southern Methodist University Project

    5.00       10-1-2039        750,000        904,050  

Southwest Texas Higher Education Authority Incorporated Southern Methodist University Project

    5.00       10-1-2040        1,000,000        1,202,640  

Southwest Texas Higher Education Authority Incorporated Southern Methodist University Project

    5.00       10-1-2041        900,000        1,079,154  
     23,218,568  
  

 

 

 
GO Revenue: 2.87%  

El Paso TX

    4.00       8-15-2031        6,500,000        7,314,385  

Houston TX Public Improvement Refunding Bonds Series A

    4.00       3-1-2034        1,000,000        1,129,440  

Houston TX Public Improvement Refunding Bonds Series A

    5.00       3-1-2029        2,000,000        2,453,420  

Lewisville TX Independent School District Unlimited Tax Refunding Bonds Series A

    5.00       8-15-2022        2,640,000        2,906,138  

Lone Star College System Texas Refunding Bonds Limited Tax

    5.00       2-15-2028        4,055,000        4,889,560  

Nacogdoches TX Independent School District

    5.00       2-15-2049        8,560,000        10,233,223  

Port Isabel TX 144A

    5.10       2-15-2049        1,000,000        1,078,440  

Royse City TX Independent School District

    5.00       8-15-2034        3,025,000        3,555,222  

Salado TX Independent School District

    5.00       2-15-2049        1,605,000        1,921,362  

San Antonio TX Independent School District

    5.00       8-15-2048        13,000,000        15,058,680  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  37


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue (continued)  

Sugar Land TX Refunding Bonds

    5.00 %       2-15-2030      $ 1,250,000      $ 1,529,888  

Temple TX

    5.00       8-1-2032        1,070,000        1,251,408  

Texas Refunding Bond Series B

    5.00       10-1-2036        24,500,000        28,972,965  

Texas TRAN

    4.00       8-27-2020        36,500,000        37,181,455  

Travis County TX

    5.00       3-1-2036        12,470,000        15,726,416  

Travis County TX

    5.00       3-1-2039        6,250,000        7,794,125  

Viridian TX Municipal Management District Texas Road Improvement Project (BAM Insured)

    4.00       12-1-2033        555,000        602,092  

Viridian TX Municipal Management District Texas Road Improvement Project (BAM Insured)

    4.00       12-1-2034        630,000        682,712  

Viridian TX Municipal Management District Texas Road Improvement Project (BAM Insured)

    4.00       12-1-2034        835,000        904,864  

Viridian TX Municipal Management District Texas Road Improvement Project (BAM Insured)

    4.00       12-1-2035        655,000        708,533  

Viridian TX Municipal Management District Texas Road Improvement Project (BAM Insured)

    4.00       12-1-2035        865,000        935,696  

Viridian TX Municipal Management District Texas Road Improvement Project (BAM Insured)

    4.00       12-1-2036        680,000        733,679  

Viridian TX Municipal Management District Texas Road Improvement Project (BAM Insured)

    4.00       12-1-2036        905,000        976,441  

Williamson County TX

    4.00       2-15-2031        6,195,000        6,637,075  
     155,177,219  
  

 

 

 
Health Revenue: 0.15%  

Harris County TX Texas Childrens Hospital Series A

    4.00       10-1-2037        3,000,000        3,413,070  

Harris County TX Texas Childrens Hospital Series A

    4.00       10-1-2038        2,300,000        2,608,131  

New Hope ECFA Children’s Health System of Texas Project Series A

    4.00       8-15-2033        2,000,000        2,237,740  
     8,258,941  
  

 

 

 
Housing Revenue: 0.32%  

Alamito TX Public Facility Corporation Cramer Three Apartments Project

    2.50       11-1-2021        7,000,000        7,087,780  

Austin TX Affordable Public Facility Corporation Incorporated Commons at Goodnight Apartments

    1.85       1-1-2021        10,000,000        10,024,600  
     17,112,380  
  

 

 

 
Miscellaneous Revenue: 2.14%  

Harris County TX Flood Control District Refunding Contract Tax Bond Series A

    4.00       10-1-2038        4,000,000        4,505,120  

Lewisville TX Combination Contract Castle Hills Public Improvement Bonds District #5 144A

    6.50       9-1-2034        1,965,000        1,968,812  

Lewisville TX Combination Contract Castle Hills Public Improvement Bonds District #5 144A

    6.50       9-1-2034        3,910,000        3,917,585  

Lewisville TX Combination Contract Castle Hills Public Improvement Bonds District #6 144A

    6.00       9-1-2037        9,005,000        9,500,095  

Lewisville TX Combination Contract Castle Hills Public Improvement Bonds District #6 144A

    5.50       9-1-2039        2,495,000        2,518,827  

Lewisville TX Combination Contract Castle Hills Public Improvement Bonds District #6 144A

    6.00       9-1-2037        3,845,000        4,056,398  

Lower Colorado TX River Authority Series A

    5.00       5-15-2033        2,475,000        2,745,171  

Texas PFA

    4.00       2-1-2034        5,000,000        5,779,500  

Texas PFA

    4.00       2-1-2035        2,000,000        2,305,520  

Texas PFA

    4.00       2-1-2036        2,175,000        2,499,445  

Texas Transportation Commission Highway Improvement Series A ##

    5.00       4-1-2042        70,000,000        76,116,575  
     115,913,048  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

38  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Resource Recovery Revenue: 0.09%  

Port Arthur TX Navigation District Jefferson County Environmental Facilities Motiva Enterprises LLC Project Series E ø

    1.70 %       11-1-2040      $ 5,000,000      $ 5,000,000  
         

 

 

 
Tax Revenue: 0.77%  

Dallas TX Area Rapid Transit Sales Tax Revenue Series A

    5.00       12-1-2048        5,000,000        5,844,850  

Dallas TX Area Rapid Transit Sales Tax Revenue Series A

    5.00       12-1-2046        28,430,000        33,302,333  

Old Spanish Trail/Almeda Corridors RDA (BAM Insured)

    4.00       9-1-2036        1,125,000        1,269,518  

Old Spanish Trail/Almeda Corridors RDA (BAM Insured)

    4.00       9-1-2037        1,320,000        1,484,089  
     41,900,790  
  

 

 

 
Transportation Revenue: 0.87%  

Central Texas Regional Mobility Authority Senior Lien Series A

    5.00       1-1-2033        3,740,000        4,095,263  

Central Texas Regional Mobility Authority Senior Lien Series A %%

    5.00       1-1-2044        3,000,000        3,667,170  

Central Texas Regional Mobility Authority Senior Lien Series A %%

    5.00       1-1-2049        2,450,000        2,976,701  

Central Texas Regional Mobility Authority Senior Lien Series A

    5.75       1-1-2025        2,000,000        2,000,000  

Grand Parkway Transportation Corporation Texas CAB Series B ¤

    0.00       10-1-2029        1,015,000        1,106,411  

Grand Parkway Transportation Corporation Texas Series B ¤

    0.00       10-1-2030        2,000,000        2,175,940  

North Texas Tollway Authority Series A

    5.00       1-1-2033        3,600,000        4,155,120  

North Texas Tollway Authority Series A

    5.00       1-1-2035        4,000,000        4,599,280  

Texas Private Activity Bond Surface Transportation Corporation Project NTE Mobility Partners Segments LLC

    6.75       6-30-2043        4,000,000        4,627,520  

Texas Private Activity Bond Surface Transportation Corporation Project NTE Mobility Partners Segments LLC

    7.00       12-31-2038        12,500,000        14,618,125  

Texas Private Activity Bond Surface Transportation Corporation Senior Lien Revenue Refunding Notes

    4.00       12-31-2038        3,000,000        3,366,240  
     47,387,770  
  

 

 

 
Utilities Revenue: 0.42%  

San Antonio TX Electric & Gas Systems Junior Lien Refunding Bond

    2.75       2-1-2048        11,000,000        11,450,340  

Texas Municipal Gas Acquisition & Supply Corporation III

    5.00       12-15-2029        5,115,000        5,591,002  

Texas Municipal Gas Acquisition & Supply Corporation III

    5.00       12-15-2031        5,000,000        5,448,050  
     22,489,392  
  

 

 

 
Water & Sewer Revenue: 2.49%  

Austin TX Water & Wastewater Refunding Bond

    5.00       11-15-2045        15,065,000        17,745,967  

Dallas TX Waterworks & Sewer System Refunding Bond Series A

    5.00       10-1-2030        3,810,000        4,539,386  

Tarrant TX Regional Water District

    5.00       9-1-2034        3,500,000        4,026,505  

Tarrant TX Regional Water District

    5.00       3-1-2049        15,000,000        16,850,400  

Texas Series A

    4.00       10-15-2036        5,000,000        5,680,150  

Texas Series B

    5.00       4-15-2049        40,000,000        48,709,600  

Texas Water Development Board Series A

    4.00       10-15-2037        11,650,000        13,188,266  

Texas Water Implementation Fund Series A

    4.00       10-15-2036        1,000,000        1,169,500  

Texas Water Implementation Fund Series A

    4.00       10-15-2037        4,000,000        4,623,560  

Texas Water Implementation Fund Series A

    4.00       10-15-2038        6,500,000        7,482,930  

Texas Water Implementation Fund Series A

    4.00       10-15-2044        9,500,000        10,738,040  
     134,754,304  
  

 

 

 
     625,932,965  
  

 

 

 

Utah: 1.10%

 

Airport Revenue: 0.39%  

Salt Lake City UT Series A

    5.00       7-1-2036        2,500,000        3,014,850  

Salt Lake City UT Series A

    5.00       7-1-2043        2,500,000        2,960,800  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  39


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Airport Revenue (continued)  

Salt Lake City UT Series A

    5.00 %       7-1-2043      $ 1,500,000      $ 1,809,510  

Salt Lake City UT Series A

    5.00       7-1-2048        5,500,000        6,471,520  

Salt Lake City UT Series A

    5.00       7-1-2048        3,000,000        3,595,470  

Salt Lake City UT Series A

    5.25       7-1-2048        3,000,000        3,599,220  
     21,451,370  
  

 

 

 
Health Revenue: 0.62%  

Utah County UT Hospital Revenue Bond IHC Health Services Incorporated Series 2012

    5.00       5-15-2043        32,000,000        33,441,920  
         

 

 

 
Tax Revenue: 0.09%  

Utah Transit Authority Series A

    5.00       6-15-2030        4,000,000        4,721,640  
         

 

 

 
     59,614,930  
  

 

 

 

Vermont: 0.24%

 

Education Revenue: 0.24%  

Vermont Student Assistance Corporation Series B (1 Month LIBOR +1.00%) ±

    2.71       6-2-2042        13,339,718        13,258,613  
         

 

 

 

Virginia: 0.48%

 

GO Revenue: 0.30%  

Fairfax County VA Series A

    4.00       10-1-2034        8,450,000        9,300,746  

Norfolk VA Series C

    4.00       9-1-2032        5,810,000        6,587,378  
     15,888,124  
  

 

 

 
Miscellaneous Revenue: 0.00%  

Watkins Centre VA CDA

    5.40       3-1-2020        172,000        172,268  
         

 

 

 
Tax Revenue: 0.02%  

Marquis VA CDA CAB Series 2015 144A¤

    0.00       9-1-2045        397,000        261,020  

Marquis VA CDA CAB Series C ¤

    0.00       9-1-2041        1,824,000        109,860  

Marquis VA CDA Series B

    5.63       9-1-2041        1,310,000        838,046  
     1,208,926  
  

 

 

 
Transportation Revenue: 0.16%  

Virginia Small Business Financing Authority AMT 95 Express Lanes LLC Project

    5.00       7-1-2049        4,000,000        4,237,520  

Virginia Small Business Financing Authority Senior Lien 95 Express Lanes LLC Project

    5.00       7-1-2034        4,000,000        4,256,960  
     8,494,480  
  

 

 

 
     25,763,798  
  

 

 

 

Washington: 3.25%

 

GO Revenue: 1.64%  

Clark County WA School District #114 (AGM Insured)

    4.00       12-1-2031        9,000,000        10,453,410  

Clark County WA School District #114 (AGM Insured)

    4.00       12-1-2034        2,500,000        2,849,325  

King and Pierce County WA School District #408 Auburn

    4.00       12-1-2035        2,435,000        2,824,965  

King and Pierce County WA School District #408 Auburn (AGM Insured)

    4.00       12-1-2036        5,000,000        5,782,500  

King County WA Public Hospital District #1 Valley Medical Center Refunding Bond

    5.00       12-1-2029        8,940,000        10,729,162  

King County WA Public Hospital District #1 Valley Medical Center Refunding Bond

    5.00       12-1-2035        9,430,000        11,138,527  

King County WA School District #210 Federal Way (AGM Insured)

    4.00       12-1-2033        10,000,000        11,386,800  

King County WA School District #414 Lake Washington (AGM Insured)

    5.00       12-1-2033        570,000        714,860  

King County WA School District #414 Lake Washington (AGM Insured)

    5.00       12-1-2034        1,000,000        1,246,670  

 

The accompanying notes are an integral part of these financial statements.

 

 

40  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue (continued)  

Seattle WA

    4.00 %       12-1-2040      $ 2,500,000      $ 2,713,525  

Snohomish County WA School District (AGM Insured)

    5.00       12-1-2031        1,500,000        1,766,550  

Washington Motor Vehicle Fuel Tax Series B

    5.00       8-1-2032        8,545,000        10,068,232  

Washington Series 2017-A

    5.00       8-1-2040        3,500,000        4,144,175  

Washington Series 2017-A

    5.00       8-1-2041        2,500,000        2,954,150  

Washington Series 2017-A

    5.00       8-1-2033        1,500,000        1,803,825  

Washington Series RA

    4.00       7-1-2030        7,950,000        8,436,938  
     89,013,614  
  

 

 

 
Health Revenue: 0.20%  

Spokane WA Housing Finance Commission Riverview Retirement Community Project

    5.00       1-1-2023        725,000        756,037  

Washington HCFR Providence Health & Services Series 2012A

    4.25       10-1-2040        3,000,000        3,154,170  

Washington HCFR Providence Health & Services Series 2012A

    5.00       10-1-2042        2,160,000        2,345,328  

Washington HCFR Providence Health & Services Series 2015A

    4.00       10-1-2045        1,150,000        1,232,122  

Washington Health Care Facilities Authority Commonspirit Health Series A-2

    5.00       8-1-2038        3,000,000        3,581,550  
     11,069,207  
  

 

 

 
Miscellaneous Revenue: 0.22%  

Washington Certificate of Participation

    5.00       7-1-2038        1,660,000        2,072,842  

Washington Certificate of Participation

    5.00       7-1-2039        1,745,000        2,168,005  

Washington Certificate of Participation

    5.00       7-1-2040        1,480,000        1,833,779  

Washington Certificate of Participation

    5.00       7-1-2041        1,555,000        1,921,420  

Washington Certificate of Participation Series A

    5.00       7-1-2038        3,265,000        3,936,643  
     11,932,689  
  

 

 

 
Tax Revenue: 0.57%  

Central Puget Sound WA Regional Transportation Authority Series S1

    5.00       11-1-2035        9,485,000        11,231,947  

Washington Convention Center Public Facilities District Lodging Tax

    5.00       7-1-2058        10,000,000        11,762,800  

Washington Series B

    5.00       8-1-2037        6,400,000        7,627,008  
     30,621,755  
  

 

 

 
Water & Sewer Revenue: 0.62%  

King County WA

    5.00       7-1-2047        7,510,000        8,547,732  

King County WA

    2.60       1-1-2043        19,000,000        19,226,290  

King County WA

    5.00       7-1-2042        4,660,000        5,587,899  
     33,361,921  
  

 

 

 
     175,999,186  
  

 

 

 

West Virginia: 0.14%

 

GO Revenue: 0.08%  

Ohio County WV Board of Education

    3.00       6-1-2025        1,205,000        1,302,581  

Ohio County WV Board of Education

    3.00       6-1-2026        2,680,000        2,907,264  
     4,209,845  
  

 

 

 
Tax Revenue: 0.06%  

Monongalia County WV Commission Refunding & Improvement Bonds University Town Center Series A 144A

    5.50       6-1-2037        2,500,000        2,760,300  

Monongalia County WV Commission Refunding & Improvement Bonds University Town Center Series A 144A

    5.75       6-1-2043        675,000        746,894  
     3,507,194  
  

 

 

 
     7,717,039  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  41


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Wisconsin: 3.51%

 

Education Revenue: 0.38%  

Milwaukee WI RDA Science Education Consortium Incorporated Project Series A

    6.00 %       8-1-2033      $ 2,120,000      $ 2,361,701  

Milwaukee WI RDA Science Education Consortium Incorporated Project Series A

    6.25       8-1-2043        4,650,000        5,158,431  

PFA Wisconsin Charter School Revenue American Preparatory Academy 144A

    5.00       7-15-2039        1,375,000        1,503,865  

Wisconsin PFA Carolina International School Series A 144A

    6.00       8-1-2023        310,000        332,404  

Wisconsin PFA Carolina International School Series A 144A

    6.75       8-1-2033        2,430,000        2,750,104  

Wisconsin PFA Carolina International School Series A 144A

    7.00       8-1-2043        1,575,000        1,772,915  

Wisconsin PFA Carolina International School Series A 144A

    7.20       8-1-2048        940,000        1,062,726  

Wisconsin PFA Wisland Revenue Northwest Nazarene University

    4.25       10-1-2049        5,410,000        5,606,167  
     20,548,313  
  

 

 

 
GO Revenue: 0.65%  

Verona WI Area School District Building & Improvement Bonds

    4.00       4-1-2027        3,385,000        3,874,471  

Verona WI Area School District Building & Improvement Bonds

    4.00       4-1-2028        1,380,000        1,573,600  

Verona WI Area School District Building & Improvement Bonds

    5.00       4-1-2026        3,310,000        4,024,232  

Wisconsin Series A

    4.00       5-1-2032        13,000,000        13,863,980  

Wisconsin Series A

    5.00       5-1-2032        10,000,000        11,751,500  
     35,087,783  
  

 

 

 
Health Revenue: 0.86%  

Wisconsin HEFA Ascension Senior Credit Group Series A

    4.50       11-15-2039        4,580,000        5,195,231  

Wisconsin HEFA Ascension Senior Credit Group Series A

    5.00       11-15-2035        12,000,000        14,195,640  

Wisconsin HEFA Aurora Health Care Incorporated Series A

    5.25       4-15-2024        1,025,000        1,037,064  

Wisconsin PFA Series A

    4.00       10-1-2049        24,500,000        26,486,950  
     46,914,885  
  

 

 

 
Housing Revenue: 0.65%  

Wisconsin PFA Student Housing Revenue (AGM Insured)

    4.00       7-1-2023        350,000        378,616  

Wisconsin PFA Student Housing Revenue (AGM Insured)

    4.00       7-1-2024        800,000        881,048  

Wisconsin PFA Student Housing Revenue (AGM Insured)

    4.00       7-1-2025        920,000        1,028,818  

Wisconsin PFA Student Housing Revenue (AGM Insured)

    5.00       7-1-2026        1,360,000        1,636,842  

Wisconsin PFA Student Housing Revenue (AGM Insured)

    5.00       7-1-2027        1,675,000        2,056,197  

Wisconsin PFA Student Housing Revenue (AGM Insured)

    5.00       7-1-2028        2,025,000        2,491,155  

Wisconsin PFA Student Housing Revenue (AGM Insured)

    5.00       7-1-2029        2,190,000        2,680,538  

Wisconsin PFA Student Housing Revenue (AGM Insured)

    5.00       7-1-2030        2,300,000        2,800,572  

Wisconsin PFA Student Housing Revenue (AGM Insured)

    5.00       7-1-2031        1,415,000        1,716,055  

Wisconsin PFA Student Housing Revenue (AGM Insured)

    5.00       7-1-2048        16,775,000        19,489,027  
     35,158,868  
  

 

 

 
Miscellaneous Revenue: 0.11%  

Wisconsin Series 1

    4.50       7-1-2033        2,085,000        2,230,887  

Wisconsin Series A

    5.00       6-1-2033        3,420,000        4,033,240  
     6,264,127  
  

 

 

 
Resource Recovery Revenue: 0.12%  

Wisconsin PFA Series A-2

    1.45       10-1-2025        6,500,000        6,499,935  
         

 

 

 
Tax Revenue: 0.74%  

Mount Pleasant WI Series A

    5.00       4-1-2038        5,495,000        6,608,397  

Mount Pleasant WI Series A

    5.00       4-1-2043        20,205,000        24,006,773  

 

The accompanying notes are an integral part of these financial statements.

 

 

42  |  Wells Fargo Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue (continued)  

Mount Pleasant WI Series A

    5.00 %       4-1-2048      $ 7,855,000      $ 9,265,208  
     39,880,378  
  

 

 

 
     190,354,289  
  

 

 

 

Wyoming: 0.04%

 

Education Revenue: 0.03%  

Wyoming CDA

    6.50       7-1-2043        1,600,000        1,669,280  
         

 

 

 
Health Revenue: 0.01%  

West Park Hospital District Wyoming Series B

    6.50       6-1-2027        500,000        527,320  
         

 

 

 
     2,196,600  
  

 

 

 

Total Municipal Obligations (Cost $5,106,297,327)

 

     5,383,214,642  
  

 

 

 

Closed End Municipal Bond Fund Obligations: 0.20%

 

California: 0.20%  

Nuveen California AMT-Free Quality Municipal Income Fund Variable Rate Demand Preferred Shares Series A 1.88% 144A

 

     10,600,000        10,600,000  
     

 

 

 

Total Closed End Municipal Bond Fund Obligations (Cost $10,600,000)

 

     10,600,000  
  

 

 

 
         
    Yield            Shares         
Short-Term Investments: 0.14%  
Investment Companies: 0.14%  

Wells Fargo Municipal Cash Management Money Market Fund Institutional Class (l)(u)

    1.45          7,721,528        7,724,617  
         

 

 

 

Total Short-Term Investments (Cost $7,724,617)

 

     7,724,617  
  

 

 

 

 

Total investments in securities (Cost $5,124,621,944)     99.76        5,401,539,259  

Other assets and liabilities, net

    0.24          12,769,201  
 

 

 

      

 

 

 
Total net assets     100.00      $ 5,414,308,460  
 

 

 

      

 

 

 

 

 

ø

Variable rate demand notes are subject to a demand feature which reduces the effective maturity. The maturity date shown represents the final maturity date of the security. The interest rate is determined and reset by the issuer daily, weekly, or monthly depending upon the terms of the security. The rate shown is the rate in effect at period end.

¤

The security is issued in zero coupon form with no periodic interest payments.

144A

The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933.

±

Variable rate investment. The rate shown is the rate in effect at period end.

%%

The security is purchased on a when-issued basis.

††

On the last interest date, partial interest was paid.

##

All or a portion of this security is segregated for when-issued securities.

(l)

The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940.

(u)

The rate represents the 7-day annualized yield at period end.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  43


Portfolio of investments—December 31, 2019 (unaudited)

 

Abbreviations:

 

AGC

Assured Guaranty Corporation

 

AGM

Assured Guaranty Municipal

 

Ambac

Ambac Financial Group Incorporated

 

AMT

Alternative minimum tax

 

BAM

Build America Mutual Assurance Company

 

BAN

Bond anticipation notes

 

CAB

Capital appreciation bond

 

CCAB

Convertible capital appreciation bond

 

CDA

Community Development Authority

 

ECFA

Educational & Cultural Facilities Authority

 

EDA

Economic Development Authority

 

EDFA

Economic Development Finance Authority

 

FGIC

Financial Guaranty Insurance Corporation

 

FHLMC

Federal Home Loan Mortgage Corporation

 

FNMA

Federal National Mortgage Association

 

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

Department of Housing and Urban Development

 

IDA

Industrial Development Authority

 

LIBOR

London Interbank Offered Rate

 

LIQ

Liquidity agreement

 

LOC

Letter of credit

 

MFHR

Multifamily housing revenue

 

National

National Public Finance Guarantee Corporation

 

PCFA

Pollution Control Financing Authority

 

PCR

Pollution control revenue

 

PFA

Public Finance Authority

 

RDA

Redevelopment Authority

 

SIFMA

Securities Industry and Financial Markets Association

 

SPA

Standby purchase agreement

 

TRAN

Tax revenue anticipation notes

 

TTFA

Transportation Trust Fund Authority

Investments in Affiliates

An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were either affiliated persons of the Fund at the beginning of the period or the end of the period were as follows:

 

    Shares,
beginning of
period
    Shares
purchased
    Shares
sold
    Shares,
end of
period
    Net
realized
gains
(losses)
    Net
change in
unrealized
gains
(losses)
    Income
from
affiliated
securities
    Value,
end of
period
    % of
net
assets
 
Short-Term Investments                                                      

Investment Companies

                 

Wells Fargo Municipal Cash Management Money Market Fund Institutional Class

    24,261,736       519,693,032       (536,233,240     7,721,528     $ (1,773   $ (657   $ 139,401     $ 7,724,617       0.14

 

The accompanying notes are an integral part of these financial statements.

 

 

44  |  Wells Fargo Municipal Bond Fund


Statement of assets and liabilities—December 31, 2019 (unaudited)

 

         

Assets

 

Investments in unaffiliated securities, at value (cost $5,116,897,327)

  $ 5,393,814,642  

Investments in affiliated securities, at value (cost $7,724,617)

    7,724,617  

Cash

    1,251,728  

Receivable for investments sold

    4,604,491  

Receivable for Fund shares sold

    8,585,617  

Receivable for interest

    52,851,142  

Prepaid expenses and other assets

    636,981  
 

 

 

 

Total assets

    5,469,469,218  
 

 

 

 

Liabilities

 

Payable for investments purchased

    42,991,961  

Payable for Fund shares redeemed

    7,787,947  

Management fee payable

    1,494,333  

Dividends payable

    1,807,281  

Administration fees payable

    483,631  

Distribution fee payable

    57,849  

Trustees’ fees and expenses payable

    4,138  

Accrued expenses and other liabilities

    533,618  
 

 

 

 

Total liabilities

    55,160,758  
 

 

 

 

Total net assets

  $ 5,414,308,460  
 

 

 

 

Net assets consist of

 

Paid-in capital

  $ 5,137,541,600  

Total distributable earnings

    276,766,860  
 

 

 

 

Total net assets

  $ 5,414,308,460  
 

 

 

 

Computation of net asset value and offering price per share

 

Net assets – Class A

  $ 1,202,270,472  

Shares outstanding – Class A1

    113,088,502  

Net asset value per share – Class A

    $10.63  

Maximum offering price per share – Class A2

    $11.13  

Net assets – Class C

  $ 88,089,859  

Shares outstanding – Class C1

    8,289,260  

Net asset value per share – Class C

    $10.63  

Net assets – Class R6

  $ 124,464,144  

Shares outstanding – Class R61

    11,706,072  

Net asset value per share – Class R6

    $10.63  

Net assets – Administrator Class

  $ 954,071,179  

Shares outstanding – Administrator Class1

    89,714,694  

Net asset value per share – Administrator Class

    $10.63  

Net assets – Institutional Class

  $ 3,045,412,806  

Shares outstanding – Institutional Class1

    286,479,887  

Net asset value per share – Institutional Class

    $10.63  

 

 

1

The Fund has an unlimited number of authorized shares.

2

Maximum offering price is computed as 100/95.50 of net asset value. On investments of $50,000 or more, the offering price is reduced.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  45


Statement of operations—six months ended December 31, 2019 (unaudited)

 

         

Investment income

 

Interest

  $ 82,420,833  

Dividends

    1,241,055  

Income from affiliated securities

    139,401  
 

 

 

 

Total investment income

    83,801,289  
 

 

 

 

Expenses

 

Management fee

    9,141,100  

Administration fees

 

Class A

    978,568  

Class C

    75,583  

Class R6

    15,132  

Administrator Class

    440,274  

Institutional Class

    1,201,150  

Shareholder servicing fees

 

Class A

    1,529,013  

Class C

    118,098  

Administrator Class

    1,100,686  

Distribution fee

 

Class C

    354,293  

Custody and accounting fees

    76,026  

Professional fees

    39,429  

Registration fees

    99,288  

Shareholder report expenses

    54,821  

Trustees’ fees and expenses

    10,804  

Other fees and expenses

    22,163  
 

 

 

 

Total expenses

    15,256,428  

Less: Fee waivers and/or expense reimbursements

 

Class A

    (99,348

Class C

    (7,558

Administrator Class

    (469,222
 

 

 

 

Net expenses

    14,680,300  
 

 

 

 

Net investment income

    69,120,989  
 

 

 

 

Realized and unrealized gains (losses) on investments

 

Net realized gains (losses) on

 

Unaffiliated securities

    6,232,588  

Affiliated securities

    (1,773

Futures contracts

    (3,832
 

 

 

 

Net realized gains on investments

    6,226,983  
 

 

 

 

Net change in unrealized gains (losses) on

 

Unaffiliated securities

    38,029,756  

Affiiliated securities

    (657
 

 

 

 

Net change in unrealized gains (losses) on investments

    38,029,099  
 

 

 

 

Net realized and unrealized gains (losses) on investments

    44,256,082  
 

 

 

 

Net increase in net assets resulting from operations

  $ 113,377,071  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

46  |  Wells Fargo Municipal Bond Fund


Statement of changes in net assets

 

    

Six months ended
December 31, 2019

(unaudited)

    Year ended
June 30, 2019
 

Operations

       

Net investment income

    $ 69,120,989       $ 111,379,445  

Net realized gains on investments

      6,226,983         8,102,223  

Net change in unrealized gains (losses) on investments

      38,029,099         141,181,173  
 

 

 

 

Net increase in net assets resulting from operations

      113,377,071         260,662,841  
 

 

 

 

Distributions to shareholders from net investment income and net realized gains

       

Class A

      (16,020,936       (33,496,628

Class C

      (878,323       (2,452,735

Class R6

      (1,525,693       (1,008,740 )1 

Administrator Class

      (12,266,399       (18,574,895

Institutional Class

      (44,106,911       (55,765,959
 

 

 

 

Total distributions to shareholders

      (74,798,262       (111,298,957
 

 

 

 

Capital share transactions

    Shares         Shares    

Proceeds from shares sold

 

Class A

    4,951,163       52,754,892       10,207,001       104,731,394  

Class C

    417,955       4,448,406       1,091,183       11,211,311  

Class R6

    6,287,631       66,883,216       7,773,111 1      79,416,075 1 

Administrator Class

    17,696,721       188,259,644       65,531,996       662,326,993  

Institutional Class

    36,163,284       384,900,005       182,281,519       1,881,539,606  
 

 

 

 
      697,246,163         2,739,225,379  
 

 

 

 

Reinvestment of distributions

 

Class A

    1,327,034       14,137,428       2,863,370       29,385,655  

Class C

    72,231       769,212       214,607       2,196,994  

Class R6

    1,178       12,537       53 1      556 1 

Administrator Class

    1,125,124       11,988,775       1,744,840       17,964,156  

Institutional Class

    3,540,879       37,716,814       4,420,261       45,500,840  
 

 

 

 
      64,624,766         95,048,201  
 

 

 

 

Payment for shares redeemed

 

Class A

    (7,563,812     (80,490,820     (19,298,194     (197,545,478

Class C

    (1,532,052     (16,338,139     (5,723,382     (58,571,623

Class R6

    (1,468,249     (15,622,809     (887,652 )1      (9,156,468 )1 

Administrator Class

    (7,969,193     (84,839,733     (12,413,823     (127,080,850

Institutional Class

    (24,564,397     (261,538,687     (58,145,370     (593,888,764
 

 

 

 
      (458,830,188       (986,243,183
 

 

 

 

Net asset value of shares issued in acquisition

 

Class A

    0       0       5,041,496       51,955,343  

Class C

    0       0       764,390       7,874,457  

Administrator Class

    0       0       1,758,364       18,126,777  

Institutional Class

    0       0       3,124,015       32,190,161  
 

 

 

 
      0         110,146,738  
 

 

 

 

Net increase in net assets resulting from capital share transactions

      303,040,741         1,958,177,135  
 

 

 

 

Total increase in net assets

      341,619,550         2,107,541,019  
 

 

 

 

Net assets

   

Beginning of period

      5,072,688,910         2,965,147,891  
 

 

 

 

End of period

    $ 5,414,308,460       $ 5,072,688,910  
 

 

 

 

 

1

For the period from July 31, 2018 (commencement of class operations) to June 30, 2019

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  47


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS A   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $10.55       $10.21       $10.25       $10.70       $10.25       $10.33  

Net investment income

    0.13       0.30 1      0.32       0.33       0.31       0.28  

Net realized and unrealized gains (losses) on investments

    0.09       0.34       (0.02     (0.38     0.50       0.01  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.22       0.64       0.30       (0.05     0.81       0.29  

Distributions to shareholders from

           

Net investment income

    (0.13     (0.30     (0.32     (0.33     (0.31     (0.28

Net realized gains

    (0.01     0.00       (0.02     (0.07     (0.05     (0.09
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.14     (0.30     (0.34     (0.40     (0.36     (0.37

Net asset value, end of period

    $10.63       $10.55       $10.21       $10.25       $10.70       $10.25  

Total return2

    2.09     6.35     2.97     (0.47 )%      8.04     2.81

Ratios to average net assets (annualized)

           

Gross expenses

    0.77     0.78     0.79     0.79     0.79     0.80

Net expenses

    0.75     0.75     0.75     0.75     0.75     0.75

Net investment income

    2.41     2.89     3.10     3.13     2.99     2.71

Supplemental data

           

Portfolio turnover rate

    8     20     19     24     16     27

Net assets, end of period (000s omitted)

    $1,202,270       $1,206,717       $1,179,800       $1,244,267       $1,529,884       $1,612,212  

 

 

 

1 

Calculated based upon average shares outstanding

 

2 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

48  |  Wells Fargo Municipal Bond Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS C   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $10.55       $10.21       $10.24       $10.69       $10.25       $10.33  

Net investment income

    0.09       0.22       0.24       0.25       0.23       0.20  

Net realized and unrealized gains (losses) on investments

    0.09       0.34       (0.01     (0.38     0.49       0.01  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.18       0.56       0.23       (0.13     0.72       0.21  

Distributions to shareholders from

           

Net investment income

    (0.09     (0.22     (0.24     (0.25     (0.23     (0.20

Net realized gains

    (0.01     0.00       (0.02     (0.07     (0.05     (0.09
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.10     (0.22     (0.26     (0.32     (0.28     (0.29

Net asset value, end of period

    $10.63       $10.55       $10.21       $10.24       $10.69       $10.25  

Total return1

    1.71     5.56     2.30     (1.21 )%      7.14     2.05

Ratios to average net assets (annualized)

           

Gross expenses

    1.52     1.53     1.54     1.54     1.54     1.55

Net expenses

    1.50     1.50     1.50     1.50     1.50     1.50

Net investment income

    1.66     2.15     2.35     2.38     2.24     1.97

Supplemental data

           

Portfolio turnover rate

    8     20     19     24     16     27

Net assets, end of period (000s omitted)

    $88,090       $98,411       $132,529       $148,944       $186,036       $164,703  

 

 

 

 

1 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  49


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended
June  30 20191
 
CLASS R6

Net asset value, beginning of period

    $10.55       $10.21  

Net investment income

    0.15       0.30  

Net realized and unrealized gains (losses) on investments

    0.09       0.34  
 

 

 

   

 

 

 

Total from investment operations

    0.24       0.64  

Distributions to shareholders from

   

Net investment income

    (0.15     (0.30

Net realized gains

    (0.01     0.00  
 

 

 

   

 

 

 

Total distributions to shareholders

    (0.16     (0.30

Net asset value, end of period

    $10.63       $10.55  

Total return2

    2.28     6.43

Ratios to average net assets (annualized)

   

Gross expenses

    0.39     0.40

Net expenses

    0.39     0.40

Net investment income

    2.78     3.16

Supplemental data

   

Portfolio turnover rate

    8     20

Net assets, end of period (000s omitted)

    $124,464       $72,655  

 

 

 

 

1 

For the period from July 31, 2018 (commencement of class operations) to June 30, 2019

2 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

50  |  Wells Fargo Municipal Bond Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
ADMINISTRATOR CLASS   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $10.55       $10.21       $10.25       $10.70       $10.26       $10.34  

Net investment income

    0.14       0.31 1      0.33 1      0.34       0.33       0.30  

Net realized and unrealized gains (losses) on investments

    0.09       0.34       (0.02     (0.38     0.49       0.01  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.23       0.65       0.31       (0.04     0.82       0.31  

Distributions to shareholders from

           

Net investment income

    (0.14     (0.31     (0.33     (0.34     (0.33     (0.30

Net realized gains

    (0.01     0.00       (0.02     (0.07     (0.05     (0.09
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.15     (0.31     (0.35     (0.41     (0.38     (0.39

Net asset value, end of period

    $10.63       $10.55       $10.21       $10.25       $10.70       $10.26  

Total return2

    2.17     6.51     3.13     (0.32 )%      8.10     2.97

Ratios to average net assets (annualized)

           

Gross expenses

    0.71     0.72     0.73     0.73     0.73     0.73

Net expenses

    0.60     0.60     0.60     0.60     0.60     0.60

Net investment income

    2.56     3.02     3.27     3.18     3.15     2.86

Supplemental data

           

Portfolio turnover rate

    8     20     19     24     16     27

Net assets, end of period (000s omitted)

    $954,071       $832,318       $227,116       $108,715       $270,304       $384,884  

 

 

 

 

1 

Calculated based upon average shares outstanding

2 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  51


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
INSTITUTIONAL CLASS   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $10.55       $10.21       $10.24       $10.70       $10.25       $10.33  

Net investment income

    0.15       0.33       0.35       0.36       0.34       0.31  

Net realized and unrealized gains (losses) on investments

    0.09       0.34       (0.01     (0.39     0.50       0.01  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.24       0.67       0.34       (0.03     0.84       0.32  

Distributions to shareholders from

           

Net investment income

    (0.15     (0.33     (0.35     (0.36     (0.34     (0.31

Net realized gains

    (0.01     0.00       (0.02     (0.07     (0.05     (0.09
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.16     (0.33     (0.37     (0.43     (0.39     (0.40

Net asset value, end of period

    $10.63       $10.55       $10.21       $10.24       $10.70       $10.25  

Total return1

    2.25     6.67     3.37     (0.28 )%      8.35     3.11

Ratios to average net assets (annualized)

           

Gross expenses

    0.44     0.45     0.46     0.46     0.46     0.47

Net expenses

    0.44     0.45     0.46     0.46     0.46     0.47

Net investment income

    2.72     3.15     3.40     3.44     3.27     3.02

Supplemental data

           

Portfolio turnover rate

    8     20     19     24     16     27

Net assets, end of period (000s omitted)

    $3,045,413       $2,862,588       $1,425,703       $1,149,911       $961,289       $523,736  

 

 

 

 

1 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

52  |  Wells Fargo Municipal Bond Fund


Notes to financial statements (unaudited)

 

1. ORGANIZATION

Wells Fargo Funds Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Wells Fargo Municipal Bond Fund (the “Fund”) which is a diversified series of the Trust.

2. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Securities valuation

All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.

Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

Equity securities and futures contracts that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price. If no sale occurs on the principal exchange or market that day, a fair value price will be determined in accordance with the Fund’s Valuation Procedures.

Investments in registered open-end investment companies 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 in good faith by the Board of Trustees of the Fund. The Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities, unless the determination has been delegated to the Wells Fargo Asset Management Pricing Committee at Wells Fargo Funds Management, LLC (“Funds Management”). The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Valuation Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees receives reports on any valuation actions taken by the Valuation Committee or the Wells Fargo Asset Management Pricing Committee which may include items for ratification.

When-issued transactions

The Fund may purchase securities on a forward commitment or when-issued basis. The Fund records a when-issued transaction on the trade date and will segregate assets in an amount at least equal in value to the Fund’s commitment to purchase when-issued securities. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

Futures contracts

Futures contracts are agreements between the Fund and a counterparty to buy or sell a specific amount of a commodity, financial instrument or currency at a specified price and on a specified date. The Fund may buy and sell futures contracts in order to gain exposure to, or protect against, changes in interest rates and is subject to interest rate risk. 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 generally entered into on a regulated futures exchange and cleared through a clearinghouse associated with the exchange. With futures contracts, there is minimal counterparty risk to the Fund since futures contracts are exchange traded and the exchange’s clearinghouse, as the counterparty to all exchange traded futures, guarantees the futures contracts against default.

Upon entering into a futures contracts, the Fund is required to deposit either cash or securities (initial margin) with the broker in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are paid to or from the broker each day equal to the daily changes in the contract value. Such payments are recorded as unrealized gains or losses and, if any, shown as variation margin receivable (payable) in the Statement of Assets and Liabilities. Should the Fund fail to make requested variation margin payments, the broker can gain access to the initial margin to satisfy the Fund’s payment obligations. When the contracts are closed, a realized gain or loss is recorded in the Statement of Operations.

 

 

Wells Fargo Municipal Bond Fund  |  53


Notes to financial statements (unaudited)

 

Security transactions and income recognition

Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. 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 been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Distributions to shareholders

Distributions to shareholders from net investment income are declared daily and paid monthly. Distributions from net realized gains, if any, are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.

Federal and other taxes

The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable and tax-exempt income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.

The 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. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

As of December 31, 2019, the aggregate cost of all investments for federal income tax purposes was $5,124,915,297 and the unrealized gains (losses) consisted of:

 

Gross unrealized gains

   $ 282,394,360  

Gross unrealized losses

     (5,770,398

Net unrealized gains

   $ 276,623,962  

As of June 30, 2019, the Fund had capital loss carryforwards which consisted of $788,407 in short-term capital losses.

Class allocations

The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.

3. FAIR VALUATION MEASUREMENTS

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:

 

 

Level 1 – quoted prices in active markets for identical securities

 

 

Level 2 – other significant observable inputs (including quoted prices for similar securities, 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 investments in securities are not necessarily an indication of the risk associated with investing in those securities.

 

 

54  |  Wells Fargo Municipal Bond Fund


Notes to financial statements (unaudited)

 

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of December 31, 2019:

 

      Quoted prices
(Level 1)
     Other significant
observable inputs
(Level 2)
     Significant
unobservable inputs
(Level 3)
     Total  

Assets

           

Investments in:

           

Municipal obligations

   $ 0      $ 5,383,214,642      $ 0      $ 5,383,214,642  

Closed end municipal bond fund obligations

     0        10,600,000        0        10,600,000  

Short-term investments

           

Investment companies

     7,724,617        0        0        7,724,617  

Total assets

   $ 7,724,617      $ 5,393,814,642      $ 0      $ 5,401,539,259  

Additional sector, industry or geographic detail is included in the Portfolio of Investments.

For the six months ended December 31, 2019, the Fund did not have any transfers into/out of Level 3.

4. TRANSACTIONS WITH AFFILIATES

Management fee

Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”), is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:

 

Average daily net assets    Management fee  

First $500 million

     0.400

Next $500 million

     0.375  

Next $2 billion

     0.350  

Next $2 billion

     0.325  

Next $5 billion

     0.290  

Over $10 billion

     0.280  

For the six months ended December 31, 2019, the management fee was equivalent to an annual rate of 0.34% of the Fund’s average daily net assets.

Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Funds Management. Wells Capital Management Incorporated, an affiliate of Funds Management and an indirect wholly owned subsidiary of Wells Fargo, is the subadviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.20% and declining to 0.10% as the average daily net assets of the Fund increase.

Administration fees

Under a class-level administration agreement, Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:

 

      Class-level
administration fee
 

Class A, Class C

     0.16

Class R6

     0.03  

Administrator Class

     0.10  

Institutional Class

     0.08  

 

 

Wells Fargo Municipal Bond Fund  |  55


Notes to financial statements (unaudited)

 

Waivers and/or expense reimbursements

Funds Management has contractually waived and/or reimbursed management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Funds Management has waived fees and/or reimbursed expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Funds Management has committed through October 31, 2020 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s expenses at 0.75% for Class A shares, 1.50% for Class C shares, 0.43% for Class R6 shares, 0.60% for Administrator Class shares and 0.48% for Institutional Class shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.

Distribution fee

The Trust has adopted a distribution plan for Class C shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Wells Fargo Funds Distributor, LLC (“Funds Distributor”), the principal underwriter, at an annual rate of 0.75% of the average daily net assets of Class C shares.

In addition, Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the six months ended December 31, 2019, Funds Distributor received $16,076 from the sale of Class A shares. No contingent deferred sales charges were incurred by Class A and Class C shares for the six months ended December 31, 2019.

Shareholder servicing fees

The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A, Class C, and Administrator Class of the Fund are charged a fee at an annual rate of 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of Wells Fargo.

Interfund transactions

The Fund may purchase or sell portfolio investment securities to certain other Wells Fargo affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. if these amounts were > 1% of purchase or sales: Pursuant to these procedures, the Fund had $128,150,000 and $98,655,000 in interfund purchases and sales, respectively, during the six months ended December 31, 2019.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended December 31, 2019 were $881,006,548 and $378,629,343, respectively.

6. DERIVATIVE TRANSACTIONS

During the six months ended December 31, 2019, the Fund entered into futures contracts to take advantage of the differences between municipal and treasury yields and to help manage the duration of the portfolio. The Fund had an average notional amount of $11,767 in short futures contracts during the six months ended December 31, 2019.

The fair value, realized gains or losses and change in unrealized gains or losses, if any, on derivative instruments are reflected in the corresponding financial statement captions.

7. ACQUISITIONS

After the close of business on March 15, 2019, the Fund acquired the net assets of Wells Fargo Colorado Tax-Free Fund and Wells Fargo North Carolina Tax-Free Fund (collectively, the “Acquired Funds”). The purpose of the transactions was to combine three funds with similar investment objectives and strategies. The Fund became the accounting and performance survivor in the transaction. The acquisitions were accomplished by a tax-free exchange of all of the shares of the Acquired Funds for shares of the Fund. Shareholders holding Class A, Class C and Institutional Class shares of the Acquired Funds each received Class A, Class C, and Institutional Class shares, respectively, of the Fund in the reorganizations. Administrator Class shares of Wells Fargo Colorado Tax-Free Fund received Administrator Class shares of the Fund. The investment portfolio of Wells Fargo Colorado Tax-Free Fund and Wells Fargo North Carolina Tax-Free Fund with fair values of $67,159,606 and $39,269,320, respectively, and identified costs of $63,687,809 and $37,881,620, respectively, at March 15, 2019 were the principal assets acquired by the Fund. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the

 

 

56  |  Wells Fargo Municipal Bond Fund


Notes to financial statements (unaudited)

 

investments received from the Acquired Funds were carried forward to align ongoing reporting of the Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. The value of net assets acquired, unrealized gains acquired, exchange ratio and number of shares issued were as follows:

 

Acquired fund    Value of net
assets acquired
     Unrealized
gains
     Exchange
ratio
       Number of shares issued

Wells Fargo Colorado Tax-Free Fund

   $ 69,585,137      $ 3,471,797        1.04          2,805,719     Class A
           1.05          578,776     Class C
           1.04          1,758,364     AdministratorClass
           1.05          1,609,227     Institutional Class

Wells Fargo North Carolina Tax-Free Fund

     40,561,601        1,387,700        0.97          2,235,777     Class A
           0.97          185,614     Class C
           0.97          1,514,788     AdministratorClass

The aggregate net assets of the Fund immediately before and after the acquisitions were $3,786,391,719 and $3,896,538,457, respectively.

Assuming the acquisitions had been completed July 1, 2018, the beginning of the annual reporting period for the Fund, the pro forma results of operations for the year ended June 30, 2019 would have been as follows (unaudited):

 

Net investment income

   $ 114,397,248  

Net realized and unrealized gains on investments

   $ 149,990,955  

Net increase in net assets resulting from operations

   $ 264,388,203  

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Acquired Funds that have been included in the Fund’s Statement of Operations since March 16, 2019.

8. BORROWINGS

The Trust (excluding the money market funds), Wells Fargo Master Trust and Wells Fargo Variable Trust are parties to a $280,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the 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, an annual commitment fee equal to 0.25% of the unused balance is allocated to each participating fund.

For the six months ended December 31, 2019, there were no borrowings by the Fund under the agreement.

9. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and Trustees have been granted certain indemnification rights 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 Fund and, therefore, cannot be estimated.

10. NEW ACCOUNTING PRONOUNCEMENTS

In August 2018, FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 updates the disclosure requirements for fair value measurements by modifying or removing certain disclosures and adding certain new disclosures. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Management has adopted the removal and modification of disclosures early, as permitted, and will adopt the additional new disclosures at the effective date.

In March 2017, FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium and requires the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount and discounts will continue to be accreted to the maturity date of the security. ASU 2017-08 is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years. During the current reporting period, management of the Fund adopted the change in accounting policy which did not have a material impact to the Fund’s financial statements.

 

 

Wells Fargo Municipal Bond Fund  |  57


Other information (unaudited)

 

PROXY VOTING INFORMATION

A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available, upon request, by calling 1-800-222-8222, visiting our website at wfam.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at wfam.com or by visiting the SEC website at sec.gov.

QUARTERLY PORTFOLIO HOLDINGS INFORMATION

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.

 

 

58  |  Wells Fargo Municipal Bond Fund


Other information (unaudited)

 

BOARD OF TRUSTEES AND OFFICERS

Each of the Trustees and Officers1 listed in the table below acts in identical capacities for each fund in the Wells Fargo family of funds, which consists of 149 mutual funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information2. 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

 

Name and

year of birth

  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships
William R. Ebsworth (Born 1957)   Trustee, since 2015   Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Endowment (non-profit organization). Mr. Ebsworth is a CFA® charterholder.   N/A
Jane A. Freeman (Born 1953)   Trustee, since 2015; Chair Liaison, since 2018   Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is a Board Member of The Ruth Bancroft Garden (non-profit organization). She is also an inactive Chartered Financial Analyst.   N/A
Isaiah Harris, Jr. (Born 1952)   Trustee, since 2009; Audit Committee Chairman, since 2019   Retired. Chairman of the Board of CIGNA Corporation since 2009, and Director since 2005. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Child Evangelism Fellowship (non-profit). Mr. Harris is a certified public accountant (inactive status).   CIGNA Corporation
Judith M. Johnson (Born 1949)   Trustee, since 2008; Audit Committee Chairman, from 2009 to 2018   Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.   N/A

 

 

Wells Fargo Municipal Bond Fund  |  59


Other information (unaudited)

 

Name and

year of birth

  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships
David F. Larcker (Born 1950)   Trustee, since 2009   James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.   N/A
Olivia S. Mitchell (Born 1953)   Trustee, since 2006; Nominating and Governance Committee Chair, since 2018   International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993.   N/A
Timothy J. Penny (Born 1951)   Trustee, since 1996; Chairman, since 2018   President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.   N/A
James G. Polisson (Born 1959)   Trustee, since 2018   Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations.   N/A
Pamela Wheelock3 (Born 1959)   Trustee, since January 2020; previously Trustee from January 2018 to July 2019   Board member of the Destination Medical Center Economic Development Agency, Rochester, Minnesota since 2019. Acting Commissioner, Minnesota Department of Human Services, July 2019 through September 2019. Human Services Manager (part-time), Minnesota Department of Human Services, October 2019 through December 2019. Chief Operating Officer, Twin Cities Habitat for Humanity from 2017 to 2019. Vice President of University Services, University of Minnesota from 2012 to 2016. Prior thereto, on the Board of Directors, Governance Committee and Finance Committee for the Minnesota Philanthropy Partners (Saint Paul Foundation) from 2012 to 2018, Interim Chief Executive Officer of Blue Cross Blue Shield of Minnesota from 2011 to 2012, Chairman of the Board from 2009 to 2012 and Board Director from 2003 to 2015. Vice President, Leadership and Community Engagement, Bush Foundation, Saint Paul, Minnesota (a private foundation) from 2009 to 2011. Executive Vice President and Chief Financial Officer, Minnesota Sports and Entertainment from 2004 to 2009 and Senior Vice President from 2002 to 2004. Executive Vice President of the Minnesota Wild Foundation from 2004 to 2008. Commissioner of Finance, State of Minnesota, from 1999 to 2002. Currently Board Chair of the Minnesota Wild Foundation since 2010.   N/A

 

*

Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.

 

 

60  |  Wells Fargo Municipal Bond Fund


Other information (unaudited)

 

Officers

 

Name and

year of birth

  Position held and
length of service
  Principal occupations during past five years or longer

Andrew Owen

(Born 1960)

  President, since 2017   Executive Vice President of Wells Fargo & Company and Head of Affiliated Managers, Wells Fargo Asset Management, since 2014. In addition, Mr. Owen is currently President, Chief Executive Officer and Director of Wells Fargo Funds Management, LLC since 2017. Prior thereto, Executive Vice President responsible for marketing, investments and product development for Wells Fargo Funds Management, LLC, from 2009 to 2014.

Nancy Wiser1

(Born 1967)

  Treasurer, since 2012   Executive Vice President of Wells Fargo Funds Management, LLC since 2011. Chief Operating Officer and Chief Compliance Officer at LightBox Capital Management LLC, from 2008 to 2011.

Michelle Rhee4

(Born 1966)

  Chief Legal Officer, since 2019   Secretary of Wells Fargo Funds Management, LLC, Chief Legal Counsel of Wells Fargo Asset Management and Assistant General Counsel of Wells Fargo Bank, N.A. since 2018. Associate General Counsel and Managing Director of Bank of America Corporation from 2004 to 2018.
Catherine Kennedy5 (Born 1969)   Secretary, since 2019   Vice President of Wells Fargo Funds Management, LLC and Senior Counsel of the Wells Fargo Legal Department since 2010. Vice President and Senior Counsel of Evergreen Investment Management Company, LLC from 1998 to 2010.
Michael H. Whitaker (Born 1967)   Chief Compliance Officer, since 2016   Chief Compliance Officer of Wells Fargo Asset Management since 2016. Senior Vice President and Chief Compliance Officer for Fidelity Investments from 2007 to 2016.

David Berardi

(Born 1975)

  Assistant Treasurer, since 2009   Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.
Jeremy DePalma1 (Born 1974)   Assistant Treasurer, since 2009   Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.

 

 

1

Nancy Wiser acts as Treasurer of 64 funds in the Fund Complex. Jeremy DePalma acts as Treasurer of 85 funds and Assistant Treasurer of 64 funds in the Fund Complex.

 

2

The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at wfam.com.

 

3 

Pamela Wheelock was re-appointed to the Board effective January 1, 2020.

 

4 

Michelle Rhee became Chief Legal Officer effective October 22, 2019.

 

5 

Catherine Kennedy became Secretary effective October 22, 2019.

 

 

Wells Fargo Municipal Bond Fund  |  61


Appendix (unaudited)

 

Effective on or about May 1, 2020, if you purchase Fund shares through a Janney Montgomery Scott LLC (“Janney”) brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge (“CDSC”), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in the Fund’s Prospectus or SAI.

 

Front-end sales charge* waivers on Class A shares available at Janney
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).
Shares purchased by employees and registered representatives of Janney or its affiliates and their family members as designated by Janney.

Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within ninety (90) days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., right of reinstatement).

Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
Shares acquired through a right of reinstatement.
Class C shares that are no longer subject to a contingent deferred sales charge and are converted to Class A shares of the same fund pursuant to Janney’s policies and procedures.
CDSC waivers on Class A and Class C shares available at Janney
Shares sold upon the death or disability of the shareholder.
Shares sold as part of a systematic withdrawal plan as described in the Fund’s Prospectus.
Shares purchased in connection with a return of excess contributions from an IRA account.
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRS regulations.
Shares sold to pay Janney fees but only if the transaction is initiated by Janney.
Shares acquired through a right of reinstatement.
Shares exchanged into the same share class of a different fund.
Front-end sales charge* discounts available at Janney; breakpoints, rights of accumulation and/or letters of intent
Breakpoints as described in the Fund’s Prospectus.
Rights of accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Janney. Eligible fund family assets not held at Janney may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.
Letters of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Janney Montgomery Scott may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.

 

*

Also referred to as an “initial sales charge.”

 

 

62  |  Wells Fargo Municipal Bond Fund


 

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LOGO

For more information

More information about Wells Fargo Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:

Wells Fargo Funds

P.O. Box 219967

Kansas City, MO 64121-9967

Website: wfam.com

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

 

LOGO

 

This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-222-8222 or visit the Fund’s website at wfam.com. Read the prospectus carefully before you invest or send money.

Wells Fargo Asset Management (WFAM) is the trade name for certain investment advisory/management firms owned by Wells Fargo & Company. These firms include but are not limited to Wells Capital Management Incorporated and Wells Fargo Funds Management, LLC. Certain products managed by WFAM entities are distributed by Wells Fargo Funds Distributor, LLC (a broker-dealer and Member FINRA).

This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind—including a recommendation for any specific investment, strategy, or plan.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE     MAY LOSE VALUE


© 2020 Wells Fargo & Company. All rights reserved.

PAR-0120-02394 02-20

SA253/SAR253 12-19

 

 



LOGO

Semi-Annual Report

December 31, 2019

 

Wells Fargo

Short-Term Municipal Bond Fund

 

 

 

 

Beginning on January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, paper copies of the Wells Fargo Funds’ annual and semi-annual shareholder reports issued after this date will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-222-8222 or by enrolling at wellsfargo.com/advantagedelivery.

You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call 1-800-222-8222. Your election to receive reports in paper will apply to all Wells Fargo Funds held in your account with your financial intermediary or, if you are a direct investor, to all Wells Fargo Funds that you hold.


 

 

Reduce clutter.

Save trees.

Sign up for electronic delivery of prospectuses and shareholder reports at wellsfargo.com/

advantagedelivery

 

The views expressed and any forward-looking statements are as of December 31, 2019, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Asset Management. Discussions of individual securities, or the markets generally, or any Wells Fargo Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Asset Management and the Fund disclaim any obligation to publicly update or revise any views expressed or forward-looking statements.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE    MAY LOSE VALUE


 

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  1


Letter to shareholders (unaudited)

 

LOGO

Andrew Owen

President

Wells Fargo Funds

“After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July.”

Dear Shareholder:

We are pleased to offer you this semi-annual report for the Wells Fargo Short-Term Municipal Bond Fund for the six-month period that ended December 31, 2019. Despite periods of market volatility, the year was strongly positive for financial markets as supportive central banks more than offset concerns over slowing global economic growth and international trade tensions.

Overall, both fixed-income and equity investors enjoyed healthy returns. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 10.92% and international stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned 6.96%. The MSCI EM Index (Net)3 gained 7.09%. For bond investors, the Bloomberg Barclays U.S. Aggregate Bond Index4 added 2.45%, the Bloomberg Barclays Global Aggregate ex-USD Index5 returned 0.09%, the Bloomberg Barclays Municipal Bond Index6 gained 2.32%, and the ICE BofA U.S. High Yield Index7 added 3.86%.

Sentiment turned positive, driven by central bank support.

After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July. The gains, primarily driven by geopolitical and monetary policy events, pushed equity markets to new highs. European Central Bank President Mario Draghi indicated the bank was ready to cut rates or buy more assets to prop up inflation if needed. President Trump backed off of tariff threats against Mexico and China. The U.S. Federal Reserve (Fed) implemented a 0.25% federal funds rate cut in July.

Throughout the summer, U.S.-China trade tensions simmered. Major U.S. stock market indices closed July with the worst weekly results of the year. Bond prices gained as Treasury yields fell to multiyear lows, and the yield curve inverted at multiple points along the 30-year arc.

Evidence of a continued global economic slowdown mounted, and central banks in China, New Zealand, and Thailand cut interest rates. Industrial and manufacturing data declined in China, Canada, Japan, and Germany. Adding to global uncertainty, Italy’s prime minister resigned, many feared a crackdown in Hong Kong as protestors sustained their calls for reform, and Boris Johnson planned to suspend Parliament as Brexit’s deadline neared.

In the U.S., the Fed cut interest rates a second time in September. U.S. manufacturing data disappointed investors. The U.S. Congress announced it would pursue an impeachment investigation of President Trump. Meanwhile, the Brexit impasse showed no signs of resolution. Officials in China warned of the negative economic impact of tariffs and trade restrictions. Although the S&P 500 Index finished the third quarter with the best year-to-date returns in more than 20 years, concerns about future returns remained.

 

 

 

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 Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the United States. 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. You cannot invest directly in an index.

 

3 

The MSCI Emerging Markets (EM) Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index.

 

4

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index.

 

5

The Bloomberg Barclays Global Aggregate ex-USD Index is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S. dollar-denominated debt market. You cannot invest directly in an index.

 

6 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

7

The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2020. ICE Data Indices, LLC. All rights reserved.

 

 

2  |  Wells Fargo Short-Term Municipal Bond Fund


Letter to shareholders (unaudited)

 

The fourth quarter started on a strong note, with a relaxing of U.S.-China trade tensions in October along with renewed optimism for a U.K. Brexit deal and positive macroeconomic data. The initial estimate of U.S. third-quarter gross domestic product growth was a 1.9% annualized rate, while the U.S. unemployment rate fell to a 50-year low of 3.5% in September. However, despite resilience among U.S. consumers, business confidence declined while manufacturing activity contracted. Concerned with a potential economic slowdown, the Fed lowered interest rates another quarter point in late October, its third rate cut in four months. This helped push the S&P 500 Index to a new all-time high, while emerging market equities rallied and global bonds declined overall, reflecting a broad pickup in risk appetite.

Equity markets continued to rally in November despite ongoing geopolitical risks. Hopes for a U.S.-China trade deal buoyed investor confidence. U.S. business sentiment improved slightly, and manufacturing and services activity picked up. Throughout the month, central bank actions were on hold. With that positive backdrop, developed market equities outpaced those in emerging markets, and U.S. stocks outperformed non-U.S. stocks overall. While consumer confidence and purchasing manager activity rose in the eurozone, China reported weakening manufacturing and consumer data. Bond yields rose marginally, leading to slightly negative returns for global government and investment-grade corporate bonds.

Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal, with some details to be worked out. That, along with the landslide election win by the pro-Brexit U.K. Conservative Party and ongoing central bank support, gave investors a greater sense of certainty. U.S. economic indicators were broadly positive, with the exception of manufacturing activity and business confidence. Consumer confidence was resilient, fed by a robust labor market, tame inflation, and lower interest rates, which boosted housing affordability and homebuyer activity. The impeachment of U.S. President Donald Trump, while historically noteworthy, had little impact on markets. Meanwhile, slowing Chinese economic activity, due in part to the trade war, led to further government stimulus at year-end through lower reserve ratios, allowing banks to lend more money.

Don’t let short-term uncertainty derail long-term investment goals.

Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.

Thank you for choosing to invest with Wells Fargo Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.

Sincerely,

 

LOGO

Andrew Owen

President

Wells Fargo Funds

 

“Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal”

 

 

For further information about your Fund, contact your investment professional, visit our website at wfam.com, or call us directly at 1-800-222-8222.

 

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  3


Performance highlights (unaudited)

 

Investment objective

The Fund seeks current income exempt from federal income tax consistent with capital preservation.

Manager

Wells Fargo Funds Management, LLC

Subadviser

Wells Capital Management Incorporated

Portfolio managers

Wendy Casetta

Bruce R. Johns

Average annual total returns (%) as of December 31, 2019

 

 
        Including sales charge     Excluding sales charge     Expense ratios1 (%)  
 
    Inception date   1 year     5 year     10 year     1 year     5 year     10 year     Gross     Net2  
                   
Class A (WSMAX)   7-18-2008     0.62       0.80       1.44       2.67       1.21       1.65       0.76       0.63  
                   
Class C (WSSCX)   1-31-2003     0.90       0.46       0.89       1.90       0.46       0.89       1.51       1.38  
                   
Class R6 (WSSRX)3   7-31-2018                       2.95       1.45       1.87       0.38       0.35  
                   
Administrator Class (WSTMX)4   7-30-2010                       2.70       1.22       1.65       0.70       0.60  
                   
Institutional Class (WSBIX)   3-31-2008                       2.90       1.44       1.87       0.43       0.40  
                   
Bloomberg Barclays 1-3 Year Composite Municipal Bond Index5                         3.07       1.42       1.44              

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, wfam.com.

Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.

For Class A shares, the maximum front-end sales charge is 2.00%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Class R6, Administrator Class, and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.

Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. 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). The Fund is exposed to high-yield securities risk and municipal securities risk. Consult the Fund’s prospectus for additional information on these and other risks. A portion of the Fund’s income may be subject to federal, state, and/or local income taxes or the Alternative Minimum Tax (AMT). Any capital gains distributions may be taxable.

 

Please see footnotes on page 5.

 

 

4  |  Wells Fargo Short-Term Municipal Bond Fund


Performance highlights (unaudited)

 

Effective maturity distribution as of December 31, 20196
LOGO
Credit quality as of December 31, 20197
LOGO
 

 

 

1 

Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report.

 

2 

The manager has contractually committed through October 31, 2020, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.63% for Class A, 1.38% for Class C, 0.35% for Class R6, 0.60% for Administrator Class, and 0.40% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Without this cap, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses.

 

3 

Historical performance shown for Class R6 shares prior to their inception reflects the performance of the Institutional Class shares, and includes the higher expenses applicable to Institutional Class shares. If these expenses had not been included, returns for Class R6 shares would be higher.

 

4 

Historical performance shown for Administrator Class shares prior to their inception reflects the performance of Institutional Class shares, adjusted to reflect the higher expenses applicable to Administrator Class shares.

 

5 

The Bloomberg Barclays 1-3 Year Composite Municipal Bond Index is a blended index weighted 50% in the Bloomberg Barclays 1-Year Municipal Bond Index and 50% in the Bloomberg Barclays 3-Year Municipal Bond Index. You cannot invest directly in an index.

 

6 

Amounts are calculated based on the total long-term investments of the Fund. These amounts are subject to change and may have changed since the date specified.

 

7 

The credit quality distribution of portfolio holdings reflected in the chart is based on ratings from Standard & Poor’s, Moody’s Investors Service, and/ or Fitch Ratings Ltd. Credit quality ratings apply to the underlying holdings of the Fund and not to the Fund itself. The percentages of the Fund’s portfolio with the ratings depicted in the chart are calculated based on the total market value of fixed income securities held by the Fund. If a security was rated by all three rating agencies, the middle rating was utilized. If rated by two of three rating agencies, the lower rating was utilized, and if rated by one of the rating agencies, that rating was utilized. Standard & Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories. Standard & Poor’s rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody’s rates the creditworthiness of bonds, ranging from Aaa (highest) to C (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Moody’s rates the creditworthiness of short-term U.S. tax-exempt municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Credit quality distribution is subject to change and may have changed since the date specified.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  5


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 and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing 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 period from July 1, 2019 to December 31, 2019.

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) and contingent deferred sales charges. 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
account  value
7-1-2019
     Ending
account value
12-31-2019
     Expenses
paid during
the period¹
     Annualized net
expense ratio
 
         

Class A

           

Actual

   $ 1,000.00      $ 1,008.83      $ 3.18        0.63

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,021.97      $ 3.20        0.63
         

Class C

           

Actual

   $ 1,000.00      $ 1,005.03      $ 6.96        1.38

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,018.20      $ 7.00        1.38
         

Class R6

           

Actual

   $ 1,000.00      $ 1,010.25      $ 1.77        0.35

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,023.38      $ 1.78        0.35
         

Administrator Class

           

Actual

   $ 1,000.00      $ 1,008.98      $ 3.03        0.60

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.12      $ 3.05        0.60
         

Institutional Class

           

Actual

   $ 1,000.00      $ 1,009.99      $ 2.02        0.40

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,023.13      $ 2.03        0.40

 

1

Expenses paid is equal to the annualized net expense ratio of each class 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).

 

 

6  |  Wells Fargo Short-Term Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Municipal Obligations: 98.75%          

Alabama: 0.60%

         
Tax Revenue: 0.01%                          

Board of Education of Shelby County AL Public School Series 2016 ##

    4.00     2-1-2020      $ 410,000      $ 410,918  
         

 

 

 
Utilities Revenue: 0.59%                          

Alabama Black Belt Energy Gas District Series A

    4.00       12-1-2048        8,000,000        8,638,480  

Alabama Black Belt Energy Gas District Series A

    4.00       6-1-2024        3,640,000        4,017,177  

Alabama Black Belt Energy Gas District Series A (Royal Bank of Canada LIQ)

    4.00       8-1-2047        3,880,000        4,114,934  

Chatom AL Industrial Development Board Alabama Electric Series A (National Rural Utilities Cooperative Finance Corporation SPA) øø

    1.40       8-1-2037        5,000,000        5,000,400  
            21,770,991  
         

 

 

 
            22,181,909  
         

 

 

 

Alaska: 0.84%

         
Health Revenue: 0.73%                          

Alaska IDA Loan Anticipation YKHC Project

    3.50       12-1-2020        22,300,000        22,326,760  

Alaska Industrial Development and Export Authority Tanana Chiefs Conference Project

    5.00       10-1-2023        600,000        674,016  

Alaska Industrial Development and Export Authority Tanana Chiefs Conference Project

    5.00       10-1-2024        750,000        863,153  

Alaska Industrial Development and Export Authority Tanana Chiefs Conference Project

    5.00       10-1-2025        1,310,000        1,537,875  

Alaska Industrial Development and Export Authority Tanana Chiefs Conference Project

    5.00       10-1-2026        1,385,000        1,651,086  
            27,052,890  
         

 

 

 
Utilities Revenue: 0.04%                          

Alaska IDA Snettisham Hydroelectric Project

    5.00       1-1-2021        1,400,000        1,437,646  
         

 

 

 
Water & Sewer Revenue: 0.07%                          

North Slope Borough Service Area Water & Wastewater Facilities

    5.25       6-30-2034        2,445,000        2,584,878  
         

 

 

 
            31,075,414  
         

 

 

 

Arizona: 2.48%

         
Education Revenue: 0.09%                          

Cochise County AZ Community College District of Cochise County Series 2016A (BAM Insured)

    5.00       7-1-2020        405,000        412,545  

Cochise County AZ Community College District of Cochise County Series 2016A (BAM Insured)

    5.00       7-1-2021        425,000        448,783  

PIMA County AZ IDA Education Facility Odyssey Preparatory Academy Goodyear Project

    7.00       6-1-2034        312,000        336,807  

PIMA County AZ IDA Education Facility Odyssey Preparatory Academy Goodyear Project

    7.13       6-1-2049        1,950,000        2,108,457  
            3,306,592  
         

 

 

 
Health Revenue: 0.66%                          

Maricopa County AZ IDA Series 2019C (SIFMA Municipal Swap +0.57%) ±

    2.18       1-1-2035        4,865,000        4,874,973  

Maricopa County AZ IDA Series 2019C (SIFMA Municipal Swap +0.80%) ±

    2.41       9-1-2048        9,000,000        9,027,090  

Scottsdale AZ IDA Healthcare Series F (AGM Insured) (m)

    1.69       9-1-2045        4,500,000        4,500,000  

Tempe AZ IDA Mirabella Arizona State University Project Series B1 144A

    4.00       10-1-2023        6,000,000        6,047,580  
            24,449,643  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  7


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Industrial Development Revenue: 1.14%                          

Chandler AZ IDA Intel Corporation Project

    2.70 %       12-1-2037      $ 175,000      $ 181,988  

Chandler AZ IDA Intel Corporation Project

    2.40       12-1-2035        32,885,000        34,040,908  

Coconino County AZ Pollution Control Corporation Series A

    1.80       9-1-2032        7,975,000        7,983,135  
            42,206,031  
         

 

 

 
Miscellaneous Revenue: 0.26%                          

Arizona Board of Regents Certificate of Participation Series A

    5.00       6-1-2021        3,000,000        3,161,610  

Navajo Nation AZ Refunding Bond Series A 144A ##

    2.90       12-1-2020        3,025,000        3,047,234  

Navajo Nation AZ Tribal Utility Authority (Municipal Government Guaranty Insured)

    4.00       1-1-2021        3,210,000        3,214,398  
            9,423,242  
         

 

 

 
Utilities Revenue: 0.33%                          

Maricopa County AZ PCR Public Service Company of New Mexico Palo Verde Project Series B

    5.20       6-1-2043        2,500,000        2,536,900  

Maricopa County AZ PCR Series A

    2.40       6-1-2043        9,800,000        9,832,732  
            12,369,632  
         

 

 

 
            91,755,140  
         

 

 

 

Arkansas: 0.27%

         
Housing Revenue: 0.27%                          

Arkansas Development Finance Authority MFHR Maple Place Apartments (HUD Insured)

    1.53       10-1-2023        5,000,000        5,004,200  

Arkansas Development Finance Authority MFHR Texarkana Rental Assistance Demonstration Convertible Bond Series A

    2.10       6-1-2022        5,100,000        5,139,066  
            10,143,266  
         

 

 

 

California: 4.56%

         
GO Revenue: 1.26%                          

California Refunding Bond Series A (SIFMA Municipal Swap +0.25%) ±

    1.86       5-1-2033        26,000,000        26,006,500  

California Series B (SIFMA Municipal Swap +0.38%) ±

    1.99       12-1-2027        20,000,000        20,051,800  

San Ysidro CA School District (AGM Insured) ¤

    0.00       8-1-2047        3,610,000        504,353  
            46,562,653  
         

 

 

 
Health Revenue: 0.78%                          

California HFFA Providence St. Joseph Series B1

    1.25       10-1-2036        5,785,000        5,791,364  

California Statewide CDA Health Facilities Catholic Series E
(AGM Insured) (m)

    1.70       7-1-2040        21,550,000        21,550,000  

Palomar CA Pomerado Health Care District Certificate of Participation Series C (AGM Insured) (m)

    2.32       11-1-2036        1,100,000        1,100,000  

Washington Township CA Health Care District Series B ##

    5.00       7-1-2020        600,000        611,208  
            29,052,572  
         

 

 

 
Industrial Development Revenue: 0.09%  

California PCFA AMT Calplant I Project 144A

    7.00       7-1-2022        3,505,000        3,518,074  
         

 

 

 
Miscellaneous Revenue: 0.73%  

California Infrastructure & Economic Development Bank The J. Paul Getty Trust Series A-1 (1 Month LIBOR +0.33%) ±

    1.53       10-1-2047        19,000,000        19,024,130  

California Infrastructure & Economic Development Bank The J. Paul Getty Trust Series B-2 (1 Month LIBOR +0.20%) ±

    1.40       10-1-2047        8,000,000        7,999,360  
            27,023,490  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

8  |  Wells Fargo Short-Term Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue: 0.04%  

Commerce CA RDA CAB Project #1 ¤

    0.00 %       8-1-2021      $ 1,440,000      $ 1,360,886  
         

 

 

 
Transportation Revenue: 0.70%  

Bay Area Toll Authority San Francisco Bay Area Series C-1 (SIFMA Municipal Swap +0.90%) ±

    2.51       4-1-2045        25,500,000        25,930,950  
         

 

 

 
Water & Sewer Revenue: 0.96%  

California Department of Water Resources Central Valley Project Series AT (SIFMA Municipal Swap +0.37%) ±

    1.98       12-1-2035        35,500,000        35,603,660  
         

 

 

 
            169,052,285  
         

 

 

 

Colorado: 1.80%

 

Education Revenue: 0.42%  

Colorado University Enterprise and Refunding Bond Series C

    2.00       6-1-2054        15,000,000        15,401,550  
         

 

 

 
GO Revenue: 0.30%  

Dawson Ridge CO Metropolitan District # 1 ¤

    0.00       10-1-2022        8,445,000        8,145,540  

Grand River CO Hospital District (AGM Insured)

    5.00       12-1-2022        1,450,000        1,604,005  

Grand River CO Hospital District (AGM Insured)

    5.00       12-1-2024        1,140,000        1,329,867  
            11,079,412  
         

 

 

 
Health Revenue: 1.04%  

Colorado HCFR Catholic Health Initiatives Series C2
(1 Month LIBOR +1.25%) ±

    2.41       10-1-2039        8,730,000        8,751,389  

Colorado HCFR Catholic Health Initiatives Series C4
(1 Month LIBOR +1.25%) ±

    2.41       10-1-2039        3,495,000        3,503,563  

Colorado Health Facilities Authority Improvement Christian Living

    4.00       1-1-2025        325,000        352,047  

University of Colorado Hospital Authority Series 2017C-1

    5.00       11-15-2038        24,630,000        26,142,775  
            38,749,774  
         

 

 

 
Miscellaneous Revenue: 0.04%  

Colorado Bridge Enterprise Central 70 Project

    4.00       12-31-2023        1,285,000        1,396,615  
         

 

 

 
            66,627,351  
         

 

 

 

Connecticut: 1.86%

 

Education Revenue: 0.73%  

Connecticut HEFAR University of Hartford Series N

    5.00       7-1-2024        120,000        137,728  

Connecticut HEFAR University of Hartford Series N

    5.00       7-1-2025        140,000        164,268  

Connecticut HEFAR Yale University Issue Series A

    2.05       7-1-2035        25,000,000        25,346,750  

Connecticut Higher Education Supplemental Loan Authority Refunding Bond Chelsea Loan Program Series A

    3.60       11-15-2023        1,265,000        1,349,363  
            26,998,109  
         

 

 

 
GO Revenue: 0.36%  

Connecticut Refunding Bond Series B

    4.00       5-15-2021        11,190,000        11,619,584  

New Haven CT Series A

    5.25       8-1-2021        1,830,000        1,933,633  
            13,553,217  
         

 

 

 
Health Revenue: 0.27%  

Connecticut HEFAR Hartford Healthcare Series G (1 Month LIBOR +0.95%) ±

    2.11       7-1-2049        10,000,000        10,005,200  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  9


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Housing Revenue: 0.27%  

Meriden CT Multifamily Housing Yale Acres Project

    1.73 %       8-1-2022      $ 10,000,000      $ 10,058,800  
         

 

 

 
Miscellaneous Revenue: 0.23%  

Connecticut Series A (SIFMA Municipal Swap +0.65%) ±

    2.26       3-1-2020        8,385,000        8,390,702  
         

 

 

 
            69,006,028  
         

 

 

 

District of Columbia: 0.60%

 

Airport Revenue: 0.10%  

Metropolitan Washington DC Airport Authority Series A

    5.00       10-1-2024        3,450,000        3,794,793  
         

 

 

 
Housing Revenue: 0.33%  

District of Columbia HFA Multifamily Housing Strand Residences Project

    1.45       2-1-2039        2,500,000        2,504,300  

District of Columbia HFA Multifamily Housing Liberty Place Apartments Project

    2.13       6-1-2021        9,800,000        9,867,130  
            12,371,430  
         

 

 

 
Water & Sewer Revenue: 0.17%  

District of Columbia Water and Sewer Authority Public Utility Subordinated Lien Series C

    1.75       10-1-2054        6,000,000        6,111,720  
         

 

 

 
            22,277,943  
         

 

 

 

Florida: 2.53%

 

Airport Revenue: 0.06%  

Broward County FL Airport System Series C

    5.00       10-1-2022        2,000,000        2,196,460  
         

 

 

 
Education Revenue: 0.28%  

Florida Gulf Coast University Financing Corporation Housing Project
Series A ##

    5.00       8-1-2020        2,055,000        2,099,080  

Florida Higher Educational Facilities Financing Authority Educational Facilities Institute Technology

    5.00       10-1-2025        500,000        581,340  

Florida Higher Educational Facilities Financing Authority Educational Facilities Institute Technology

    5.00       10-1-2026        750,000        883,193  

University of North Florida Financing Corporation Capital Housing Project (AGM Insured)

    5.00       11-1-2020        3,125,000        3,215,625  

University of North Florida Financing Corporation Capital Housing Project (AGM Insured)

    5.00       11-1-2021        3,440,000        3,660,057  
            10,439,295  
         

 

 

 
Health Revenue: 0.47%  

North Broward FL Hospital District Series B

    5.00       1-1-2022        1,255,000        1,335,835  

North Broward FL Hospital District Series B

    5.00       1-1-2023        1,700,000        1,860,412  

North Broward FL Hospital District Series B

    5.00       1-1-2024        2,000,000        2,243,180  

Palm Beach County FL HCFR ACTS Retirement Life Communities Series 2016

    5.00       11-15-2021        3,515,000        3,740,452  

Tampa FL BayCare Health System Prefunded Bond

    5.00       11-15-2023        4,140,000        4,198,540  

Tampa FL BayCare Health System Unrefunded Bond

    5.00       11-15-2023        3,940,000        3,995,278  
            17,373,697  
         

 

 

 
Housing Revenue: 0.33%  

Florida Housing Finance Corporation Logan Heights Apartments Series F

    1.90       2-1-2020        5,555,000        5,557,444  

Miami-Dade County FL Housing Finance Authority Multifamily Housing Liberty Square Phase Two Project

    1.42       11-1-2040        6,500,000        6,508,645  
            12,066,089  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

10  |  Wells Fargo Short-Term Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue: 0.45%  

Manatee County FL School Board Certificate of Participation Series A ##

    5.00 %       7-1-2020      $ 1,225,000      $ 1,246,291  

Miami-Dade County FL School Board Certificate of Participation Series A

    5.00       5-1-2031        10,000,000        11,489,300  

St. Johns County FL School Board Refunding Bond Certificate of Participation

    5.00       7-1-2020        2,010,000        2,048,451  

St. Johns County FL School Board Refunding Bond Certificate of Participation

    5.00       7-1-2021        1,670,000        1,766,025  
            16,550,067  
         

 

 

 
Resource Recovery Revenue: 0.05%  

Lee County FL Solid Waste System Refunding Bond

    5.00       10-1-2023        1,750,000        1,953,700  
         

 

 

 
Tax Revenue: 0.40%  

Department of Environmental Protection Florida Forever Series A

    5.00       7-1-2023        7,720,000        8,454,481  

Leon County FL School District

    4.00       9-1-2026        6,000,000        6,563,700  
            15,018,181  
         

 

 

 
Transportation Revenue: 0.44%  

Florida Development Finance Corporation Surface Series T

    1.90       1-1-2049        14,400,000        14,415,696  

Florida Mid-Bay Bridge Authority Series C

    5.00       10-1-2020        785,000        805,065  

Osceola County FL Improvement Osceola Parkway Series %%

    5.00       10-1-2024        300,000        346,587  

Osceola County FL Improvement Osceola Parkway Series %%

    5.00       10-1-2026        735,000        884,102  
            16,451,450  
         

 

 

 
Utilities Revenue: 0.05%  

JEA Bulk Power Supply System Scherer 4 Project Series A

    3.00       10-1-2022        1,800,000        1,801,908  
         

 

 

 
            93,850,847  
         

 

 

 

Georgia: 6.03%

 

Health Revenue: 1.16%  

Gainesville & Hall Counties GA Hospital Authority Health System Project Series B (SIFMA Municipal Swap +0.95%) ±

    2.56       8-15-2035        23,000,000        23,011,730  

Gainesville GA Hospital Authority Series C ø

    1.77       2-15-2047        20,000,000        20,000,000  
            43,011,730  
         

 

 

 
Housing Revenue: 1.00%  

Atlanta GA Urban Residential Finance Authority MFHR City Lights II Family Apartments Project

    1.45       12-1-2020        11,500,000        11,500,115  

Cobb County GA Housing Authority MFHR White Circle Phase 2 Project

    1.65       12-1-2022        6,000,000        6,015,780  

Macon-Bibb County GA Housing Authority Hallmark Portfolio

    2.04       4-1-2021        15,000,000        15,023,400  

Northwest GA Housing Authority MFHR Park Homes Apartments Project (FHA Insured)

    1.54       8-1-2022        4,500,000        4,505,490  
            37,044,785  
         

 

 

 
Industrial Development Revenue: 0.59%  

Monroe County GA PCR Georgia Power Company Plant Scherer Project

    2.35       10-1-2048        16,360,000        16,519,674  

Savannah GA EDA PCR International Paper Company Project Series B

    1.90       8-1-2024        4,250,000        4,260,413  

Savannah GA EDA Recovery Zone Facility International

    2.00       11-1-2033        1,000,000        1,008,760  
            21,788,847  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  11


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Utilities Revenue: 3.28%  

Bartow County GA Development Authority Georgia Power Company Bowen Project

    2.05 %       9-1-2029      $ 4,100,000      $ 4,131,447  

Burke County GA Development Authority Georgia Power Company Plant Vogtle Project

    1.55       12-1-2049        4,000,000        3,989,560  

Burke County GA Development Authority Oglethorpe Power Corporation Vogtle Project Series A

    2.40       1-1-2040        15,995,000        16,028,909  

Burke County GA Development Authority Oglethorpe Power Corporation Vogtle Project Series F

    3.00       11-1-2045        22,050,000        22,642,263  

Floyd County GA PCR Georgia Power Company Plant Hammond Project

    2.35       7-1-2022        11,250,000        11,345,063  

Georgia Municipal Electric Authority Plant Vogtle Units 3&4 Project M

    5.00       1-1-2025        200,000        232,264  

Georgia Municipal Electric Authority Plant Vogtle Units 3&4 Project M

    5.00       1-1-2026        300,000        355,002  

Georgia Municipal Electric Authority Plant Vogtle Units 3&4 Project P

    5.00       1-1-2023        250,000        274,743  

Georgia Municipal Electric Authority Plant Vogtle Units 3&4 Project P

    5.00       1-1-2024        400,000        451,104  

Georgia Municipal Electric Authority Plant Vogtle Units 3&4 Project P

    5.00       1-1-2025        1,000,000        1,155,080  

Main Street Natural Gas Incorporated Georgia Gas Project Series B

    5.00       3-15-2021        2,800,000        2,916,032  

Main Street Natural Gas Incorporated Georgia Gas Project Series C

    4.00       8-1-2048        6,120,000        6,671,718  

Main Street Natural Gas Incorporated Georgia Gas Project Series C

    4.00       3-1-2050        18,000,000        20,369,520  

Main Street Natural Gas Incorporated Georgia Gas Project Series E
(SIFMA Municipal Swap +0.57%) (Royal Bank of Canada LIQ) ±

    2.18       8-1-2048        20,000,000        20,000,000  

Monroe County GA Development Authority PCR Oglethorpe Power Corporation Scherer Project Series A

    2.40       1-1-2039        11,245,000        11,268,839  
            121,831,544  
         

 

 

 
            223,676,906  
         

 

 

 

Hawaii: 0.53%

 

GO Revenue: 0.34%  

Honolulu HI Rail Transit Project Series H (SIFMA Municipal Swap +0.32%) ±

    1.93       9-1-2027        7,600,000        7,600,456  

Honolulu HI Rail Transit Project Series H (SIFMA Municipal Swap +0.32%) ±

    1.93       9-1-2028        5,000,000        5,000,300  
            12,600,756  
         

 

 

 
Housing Revenue: 0.19%  

Hawaii Housing Finance & Development Corporation Multifamily Housing Hale Kewalo Apartments Series A (GNMA Insured)

    1.90       1-1-2021        7,160,000        7,162,649  
         

 

 

 
            19,763,405  
         

 

 

 

Illinois: 9.42%

 

Airport Revenue: 0.98%  

Chicago IL Midway Airport Refunding Bond Second Lien Series A

    5.00       1-1-2022        6,100,000        6,530,416  

Chicago IL Midway Airport Refunding Bond Second Lien Series A

    5.00       1-1-2025        5,000,000        5,678,200  

Chicago IL O’Hare International Airport Customer Facility Series 2013

    5.00       1-1-2020        890,000        890,000  

Chicago IL O’Hare International Airport Refunding Bond General Senior Lien Series B

    5.00       1-1-2023        5,000,000        5,353,650  

Chicago IL O’Hare International Airport Refunding Bond General Senior Lien Series B

    5.00       1-1-2024        1,550,000        1,659,322  

Chicago IL O’Hare International Airport Refunding Bond Passenger Facility

    5.00       1-1-2023        13,720,000        14,690,416  

Chicago IL O’Hare International Airport Refunding Bond Passenger Facility

    5.00       1-1-2024        1,335,000        1,520,538  
            36,322,542  
         

 

 

 
Education Revenue: 0.07%  

Illinois State University Auxiliary Facilities System

    4.00       4-1-2020        1,480,000        1,480,089  

Illinois State University Auxiliary Facilities System Series A (AGM Insured)

    5.00       4-1-2025        700,000        804,454  

Illinois State University Auxiliary Facilities System Series B (AGM Insured)

    5.00       4-1-2024        415,000        466,207  
            2,750,750  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

12  |  Wells Fargo Short-Term Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue: 2.24%  

Chicago IL Board of Education Refunding Bond Series A (AGM Insured)

    5.00 %       12-1-2022      $ 500,000      $ 542,330  

Chicago IL Board of Education Refunding Bond Series A (AGM Insured)

    5.00       12-1-2023        2,000,000        2,223,240  

Chicago IL Emergency Telephone System Refunding Bond (National Insured)

    5.25       1-1-2020        3,765,000        3,765,000  

Chicago IL Park District Harbor Facility Series C

    5.00       1-1-2022        3,155,000        3,255,140  

Chicago IL Park District Refunding Bond Series D

    5.00       1-1-2020        1,290,000        1,290,000  

Chicago IL Park District Refunding Bond Series D

    5.00       1-1-2021        1,000,000        1,033,020  

Chicago IL Park District Series A

    4.50       1-1-2023        250,000        253,210  

Chicago IL Refunding Bond Series B (Ambac Insured)

    5.13       1-1-2022        1,595,000        1,645,976  

Chicago IL Series C

    5.00       1-1-2021        3,000,000        3,112,350  

Chicago IL Series C

    5.00       1-1-2022        15,845,000        16,690,965  

Chicago IL Series C

    5.00       1-1-2023        4,750,000        5,107,248  

Cook County IL Refunding Bond Series 2016 A

    5.00       11-15-2020        5,430,000        5,593,497  

Illinois

    4.00       2-1-2020        1,750,000        1,753,308  

Illinois

    5.00       2-1-2020        2,520,000        2,526,703  

Illinois

    5.00       11-1-2021        5,000,000        5,278,850  

Illinois

    5.00       4-1-2022        3,000,000        3,198,420  

Illinois Refunding Bond

    5.00       1-1-2020        13,515,000        13,515,000  

Kane County IL School District Series B

    2.00       2-1-2021        880,000        886,477  

Kane, McHenry, Cook & Dekalb Counties IL Community Unit School District #300

    4.25       1-1-2023        1,000,000        1,025,220  

Kendall Kane, & Will Counties IL Refunding Bond Series B

    5.00       10-1-2022        1,400,000        1,526,028  

Kendall Kane, & Will Counties IL Refunding Bond Series B

    5.00       10-1-2023        560,000        626,696  

Kendall, Kane, & Will Counties IL Community Unit School District #308 CAB (AGM Insured) ¤

    0.00       2-1-2020        1,000,000        998,850  

McHenry & Kane Counties IL Community Consolidated School District #158 CAB (National Insured) ¤

    0.00       1-1-2021        1,130,000        1,115,095  

Waukegan IL Series B (AGM Insured)

    4.00       12-30-2023        500,000        546,030  

Whiteside & Lee Counties IL Community Unit School District Series A
(BAM Insured)

    4.00       12-1-2024        1,490,000        1,643,247  

Will County IL Community High School District #161

    4.00       1-1-2024        2,000,000        2,176,140  

Will County IL Community High School District #210

    5.00       1-1-2021        1,165,000        1,167,400  

Winnebago Boone County IL Community College District Rock Valley College Series A (AGM Insured)

    5.00       1-1-2022        500,000        533,530  
            83,028,970  
         

 

 

 
Health Revenue: 1.75%  

Illinois Finance Authority Ascension Health Alliance Senior Credit Group Series E-2

    1.75       11-15-2042        2,000,000        2,011,300  

Illinois Finance Authority Friendship Village of Schaumburg

    4.00       2-15-2020        1,230,000        1,229,754  

Illinois Finance Authority OSF Healthcare System Prerefunded Bond
Series A

    6.00       5-15-2039        14,630,000        14,886,903  

Illinois Finance Authority Swedish Covenant Hospital Series A

    6.00       8-15-2038        3,460,000        3,479,514  

Illinois Finance Authority The Admiral at the Lake Project Series A

    7.75       5-15-2030        2,015,000        2,063,239  

Illinois Finance Authority The Admiral at the Lake Project Series A

    8.00       5-15-2040        20,755,000        21,268,479  

Illinois Finance Authority The Admiral at the Lake Project Series A

    8.00       5-15-2046        17,295,000        17,722,878  

Southwestern IL Development Authority Health Facility Memorial Group Incorporated

    6.38       11-1-2023        1,950,000        2,170,799  
            64,832,866  
         

 

 

 
Housing Revenue: 0.67%  

Chicago IL Multifamily Housing Mark Twain Apartments Project

    2.20       6-1-2021        17,000,000        17,049,130  

Illinois Housing Development Authority (SIFMA Municipal Swap +1.00%) (FNMA LOC, FNMA LIQ) ±

    2.61       5-15-2050        7,500,000        7,549,350  

Illinois Housing Development Authority (GNMA Insured)

    5.00       8-1-2028        185,000        187,956  
            24,786,436  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  13


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue: 0.98%  

Chicago IL Board of Education Lease Certificates Refunding Bond Series A (National Insured)

    6.00 %       1-1-2020      $ 3,260,000      $ 3,260,000  

Chicago IL Board of Education Refunding Bond Series B

    5.00       12-1-2024        2,270,000        2,531,322  

Chicago IL Board of Education Refunding Bond Series B

    5.00       12-1-2025        2,460,000        2,786,909  

Illinois Refunding Bond (BAM Insured)

    5.00       8-1-2020        9,175,000        9,365,932  

Illinois Refunding Bond

    5.00       2-1-2022        4,375,000        4,643,363  

Illinois Refunding Bond

    5.00       2-1-2023        6,040,000        6,547,239  

Illinois Refunding Bond Series 2012 (AGM Insured)

    5.00       8-1-2020        5,000,000        5,104,050  

Illinois Series 2014

    5.00       5-1-2021        2,000,000        2,083,820  
            36,322,635  
         

 

 

 
Tax Revenue: 2.36%  

Build Illinois Bond Junior Obligation Series C

    5.00       6-15-2022        2,810,000        2,997,568  

Chicago IL Motor Fuel Tax Refunding Bond Series 2013

    5.00       1-1-2020        1,120,000        1,120,000  

Chicago IL Motor Fuel Tax Refunding Bond Series 2013

    5.00       1-1-2021        380,000        389,093  

Chicago IL Motor Fuel Tax Refunding Bond Series 2013

    5.00       1-1-2022        955,000        997,412  

Chicago IL Transit Authority Sales Tax Receipts

    5.25       12-1-2024        6,705,000        7,180,519  

Hillside IL Refunding Bond Series 2018

    5.00       1-1-2024        1,215,000        1,257,574  

Huntley IL Special Service Area No 6 Special Tax Refunding Bond
(BAM Insured)

    2.20       3-1-2024        1,865,000        1,889,525  

Illinois Refunding Bond

    5.00       1-1-2021        1,760,000        1,817,200  

Illinois Regional Transportation Authority Refunding Bond (AGM Insured)

    5.75       6-1-2021        3,000,000        3,189,090  

Illinois Sales Tax Revenue Junior Obligation Series A

    5.00       6-15-2023        5,825,000        6,361,483  

Illinois Sales Tax Revenue Refunding Bond Series C

    4.00       6-15-2023        3,315,000        3,510,784  

Illinois Series 2013

    5.00       6-15-2024        485,000        527,030  

Illinois Series A

    4.00       1-1-2020        12,265,000        12,265,000  

Illinois Series A

    4.00       1-1-2021        2,715,000        2,776,576  

Metropolitan Pier & Exposition Authority McCormick Place Project Callable Bond Series B

    5.00       12-15-2022        1,260,000        1,260,806  

Metropolitan Pier & Exposition Authority McCormick Place Project Non-Callable Bond Series B

    5.00       12-15-2022        7,000,000        7,543,900  

Metropolitan Pier & Exposition Authority McCormick Place Project Series A (National Insured) ¤

    0.00       12-15-2021        920,000        889,750  

Metropolitan Pier & Exposition Authority McCormick Place Project Series B

    5.00       12-15-2020        1,845,000        1,898,616  

Regional Transportation Authority Illinois Series B-RMKT 1

    1.45       6-1-2025        18,015,000        18,015,000  

Sales Tax Securitization Corporation Series A

    5.00       1-1-2024        10,200,000        11,404,314  
            87,291,240  
         

 

 

 
Tobacco Revenue: 0.35%  

Illinois Railsplitter Tobacco Settlement Authority

    5.00       6-1-2022        12,000,000        13,020,000  
         

 

 

 
Water & Sewer Revenue: 0.02%  

Chicago IL Second Lien

    5.00       11-1-2020        740,000        761,090  
         

 

 

 
            349,116,529  
         

 

 

 

Indiana: 1.27%

 

GO Revenue: 0.05%  

Hammond IN Local Public Improvement Advance Program Series A %%

    2.38       12-31-2020        2,000,000        2,008,340  
         

 

 

 
Health Revenue: 0.88%      

Indiana Finance Authority Health System Franciscan Alliance Incorporated Series B

    5.00       11-1-2022        1,000,000        1,103,800  

Indiana Finance Authority Health System Franciscan Alliance Incorporated Series B

    5.00       11-1-2023        1,270,000        1,445,146  

 

The accompanying notes are an integral part of these financial statements.

 

 

14  |  Wells Fargo Short-Term Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue (continued)      

Indiana Finance Authority Health System Franciscan Alliance Incorporated Series B

    5.00 %       11-1-2024      $ 3,000,000      $ 3,511,590  

Indiana Finance Authority Health System Franciscan Alliance Incorporated Series C

    5.00       11-1-2021        1,000,000        1,067,730  

Indiana Finance Authority Health System Franciscan Alliance Incorporated Series C

    5.00       11-1-2023        800,000        910,328  

Indiana Finance Authority Health System Franciscan Alliance Incorporated Series C

    5.00       11-1-2024        1,000,000        1,170,530  

Indiana Finance Authority Parkview Health Series A

    5.00       5-1-2021        1,020,000        1,071,031  

Indiana Finance Authority Parkview Health Series A

    5.00       5-1-2023        1,010,000        1,133,028  

Indiana Finance Authority Refunding Bond University Health Obligated Group Series B

    1.65       12-1-2042        5,000,000        5,031,200  

Indiana Finance Authority Senior Living Series A

    5.00       11-15-2022        500,000        541,550  

Indiana Finance Authority Senior Living Series A

    5.00       11-15-2023        500,000        554,625  

Indiana HEFA Series 2006B

    1.75       11-15-2031        11,915,000        12,015,920  

Indiana HFFA Ascension Health Subordinate Bond Credit Group
Series 2015 A4

    1.50       10-1-2027        1,825,000        1,826,643  

Indiana HFFA Ascension Health Subordinate Bond Credit Group Series A8

    1.25       11-1-2027        1,155,000        1,155,104  
            32,538,225  
         

 

 

 
Housing Revenue: 0.10%  

Indianapolis IN MFHR Bethel Townhomes Project Series A

    2.30       3-1-2021        3,795,000        3,800,351  
         

 

 

 
Miscellaneous Revenue: 0.06%  

Indiana Bond Bank Special Program Series A

    5.25       10-15-2021        2,000,000        2,132,500  
         

 

 

 
Utilities Revenue: 0.18%  

Warrick County IN Environment Import Vectra Energy Delivery of Indiana Incorporated

    2.38       9-1-2055        6,550,000        6,558,646  
         

 

 

 
            47,038,062  
         

 

 

 

Iowa: 0.27%

 

Education Revenue: 0.07%  

Iowa Student Loan Liquidity Corporation AMT Senior Series B

    5.00       12-1-2022        500,000        549,935  

Iowa Student Loan Liquidity Corporation AMT Senior Series B

    5.00       12-1-2023        700,000        791,658  

Iowa Student Loan Liquidity Corporation AMT Senior Series B

    5.00       12-1-2024        1,000,000        1,159,340  
     2,500,933  
         

 

 

 
Housing Revenue: 0.20%  

Iowa Finance Authority SFMR Series D (1 Month LIBOR +0.35%) (GNMA/FNMA/FHLMC Insured) ±

    1.61       7-1-2048        7,500,000        7,508,325  
         

 

 

 
     10,009,258  
         

 

 

 
Kansas: 0.25%  
Health Revenue: 0.06%  

Wichita KS Health Care Facilities Presbyterian Manors Incorporate

    4.00       5-15-2024        1,015,000        1,067,699  

Wichita KS Health Care Facilities Presbyterian Manors Incorporate

    5.00       5-15-2025        1,055,000        1,168,761  
     2,236,460  
         

 

 

 
Housing Revenue: 0.14%  

Kansas Development Finance Authority MFHR Woodland Village Apartments Project Series J

    1.68       7-1-2022        5,000,000        5,014,650  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  15


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Utilities Revenue: 0.05%  

Burlington KS Environmental Impact Series B ø

    1.75 %       9-1-2035      $ 2,000,000      $ 2,000,000  
         

 

 

 
     9,251,110  
         

 

 

 

Kentucky: 2.92%

 

Health Revenue: 0.24%  

Louisville & Jefferson Counties KY Catholic Health Initiatives Series A

    5.00       12-1-2021        8,210,000        8,781,416  
         

 

 

 
Housing Revenue: 0.69%  

Kentucky Housing Corporation Beecher Phase I Project

    2.00       3-1-2022        5,500,000        5,549,335  

Kentucky Housing Corporation Jefferson Green Apartments Project

    2.20       9-1-2022        20,000,000        20,174,200  
     25,723,535  
         

 

 

 
Miscellaneous Revenue: 0.06%  

Hopkins County KY Public Properties Corporation Judicial Center Project

    3.63       6-1-2025        1,000,000        1,009,410  

Pendleton County KY School District Finance Corporation

    2.00       2-1-2021        1,200,000        1,208,184  
     2,217,594  
         

 

 

 
Utilities Revenue: 1.93%  

Kentucky Public Energy Authority Gas Supply Series A-1

    4.00       12-1-2049        15,490,000        17,169,271  

Kentucky Public Energy Authority Gas Supply Series B

    4.00       1-1-2049        24,085,000        26,595,620  

Kentucky Public Energy Authority Gas Supply Series C

    4.00       12-1-2049        20,000,000        22,150,000  

Louisville & Jefferson Counties KY Metro Government PCR Series B

    2.55       11-1-2027        5,500,000        5,585,415  
            71,500,306  
         

 

 

 
     108,222,851  
         

 

 

 
Louisiana: 0.65%  
Housing Revenue: 0.08%  

Louisiana Housing Corporation Pine Trace Homes Project

    2.40       5-1-2021        3,000,000        3,010,320  
         

 

 

 
Industrial Development Revenue: 0.39%  

St John Baptist Parish Louisiana Marathon Oil Corporation Project

    2.10       6-1-2037        14,320,000        14,456,756  
         

 

 

 
Tax Revenue: 0.07%  

Louisiana Local Government Environmental Facilities & CDA Series 2015 (Build America Mutual Assurance Company Insured)

    5.00       12-1-2020        1,135,000        1,173,738  

Louisiana Regional Transit Authority CAB (National Insured) ¤

    0.00       12-1-2021        1,615,000        1,522,493  
            2,696,231  
         

 

 

 
Utilities Revenue: 0.11%  

Lafayette LA Refunding Bond

    5.00       11-1-2023        3,680,000        4,070,669  
         

 

 

 
            24,233,976  
         

 

 

 

Maine: 0.01%

 
Education Revenue: 0.01%      

Maine Finance Authority Supplemental Education Loan Program Class A Series A-1 (AGM Insured)

    5.00       12-1-2025        425,000        499,146  
         

 

 

 

Maryland: 2.56%

 

GO Revenue: 0.70%  

Maryland State & Local Facilities Loan of 2015 Series A

    5.00       3-1-2024        23,060,000        25,876,779  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

16  |  Wells Fargo Short-Term Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue: 0.03%  

Rockville MD Mayor and Council Economic Development Ingleside King Farm Project Series A-1

    5.00 %       11-1-2020      $ 850,000      $ 872,160  
         

 

 

 
Housing Revenue: 1.27%  

Maryland CDA Department of Housing & Community Multifamily Development Huntington Apartments Series C 144A

    2.34       4-1-2021        7,500,000        7,540,275  

Maryland CDA Department of Housing & Community Multifamily Development Lakeview Victoria Park Series H

    3.00       11-1-2020        9,000,000        9,075,600  

Maryland CDA Department of Housing & Community Multifamily Development Orchard Mews

    2.06       9-1-2021        5,500,000        5,518,645  

Maryland CDA Department of Housing & Community Multifamily Development Orchard Park Series F

    2.52       8-1-2020        15,000,000        15,047,850  

Maryland CDA Department of Housing & Community Multifamily Development Zions Towers Series A (FHA Insured)

    2.44       3-1-2020        10,000,000        10,008,100  
            47,190,470  
         

 

 

 
Miscellaneous Revenue: 0.20%  

Maryland CDA Department of Housing & Community Multifamily Development Park Square Homes Series E

    2.53       8-1-2020        7,500,000        7,524,375  
         

 

 

 
Utilities Revenue: 0.36%  

Maryland Economic Development Corporation PCR Potomac Electric Power Company Project

    1.70       9-1-2022        13,250,000        13,373,623  
         

 

 

 
            94,837,407  
         

 

 

 

Massachusetts: 3.17%

         
Education Revenue: 0.26%                          

Massachusetts Educational Financing Authority AMT Issue J

    5.00       7-1-2021        1,280,000        1,348,288  

Massachusetts Educational Financing Authority AMT Issue K Series A

    5.00       7-1-2022        1,000,000        1,085,850  

Massachusetts Educational Financing Authority Series A

    5.00       1-1-2020        3,000,000        3,000,000  

Massachusetts Educational Financing Authority Series A

    5.00       1-1-2022        4,115,000        4,402,680  
            9,836,818  
         

 

 

 
Health Revenue: 0.44%                          

Massachusetts Development Finance Agency Partners Healthcare System Series S-3 (SIFMA Municipal Swap +0.50%) ±

    2.11       7-1-2038        5,000,000        5,008,600  

Massachusetts Development Finance Agency Partners Healthcare System Series S-5 (SIFMA Municipal Swap +0.42%) ±

    2.03       7-1-2044        11,230,000        11,234,043  
            16,242,643  
         

 

 

 
Housing Revenue: 1.10%                          

Massachusetts HFA Construction Loan Notes Series A

    1.85       6-1-2020        1,650,000        1,650,479  

Massachusetts HFA Construction Loan Notes Series B

    2.05       12-1-2021        24,630,000        24,637,635  

Massachusetts HFA Multifamily Conduit Van Brodie Mill Series A (TD Bank NA LOC)

    2.00       7-1-2020        7,000,000        7,005,320  

Massachusetts HFA Single Family Series 200 (1 Month LIBOR +0.38%) ±

    1.58       12-1-2048        7,500,000        7,508,100  
            40,801,534  
         

 

 

 
Miscellaneous Revenue: 1.02%                          

Massachusetts Consolidated Loan Series D

    1.05       8-1-2043        12,860,000        12,849,841  

Massachusetts Consolidated Loan Subordinate Bond Series D-2

    1.70       8-1-2043        24,550,000        24,859,576  
            37,709,417  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  17


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Transportation Revenue: 0.35%                          

Massachusetts Department of Transportation Refunding Bond

    5.00 %       1-1-2039      $ 11,685,000      $ 12,971,986  
         

 

 

 
            117,562,398  
         

 

 

 

Michigan: 1.99%

         
Education Revenue: 0.03%                          

Western Michigan University Refunding Bond

    5.00       11-15-2020        1,000,000        1,033,090  
         

 

 

 
GO Revenue: 0.49%                          

Allendale MI Public School District Series A (Qualified School Board Loan Fund Insured)

    3.00       11-1-2021        895,000        923,040  

Caledonia MI Community Schools (Qualified School Board Loan Fund Insured)

    5.00       5-1-2020        500,000        506,355  

Caledonia MI Community Schools (Qualified School Board Loan Fund Insured)

    5.00       5-1-2021        1,140,000        1,198,425  

Detroit MI Series 2018

    5.00       4-1-2021        620,000        639,623  

Flushing MI Community School District (Qualified School Board Loan Fund Insured)

    4.00       5-1-2021        1,135,000        1,177,029  

Gibraltar MI School District (Qualified School Board Loan Fund Insured)

    5.00       5-1-2020        1,100,000        1,114,047  

Gibraltar MI School District (Qualified School Board Loan Fund Insured)

    5.00       5-1-2021        1,185,000        1,246,051  

Grand Ledge MI Public School District (Qualified School Board Loan Fund Insured)

    5.00       5-1-2020        2,680,000        2,713,339  

Haslett MI Public Schools (Qualified School Board Loan Fund Insured)

    4.00       5-1-2020        370,000        373,337  

Haslett MI Public Schools (Qualified School Board Loan Fund Insured)

    5.00       5-1-2021        500,000        524,740  

Lake Orion MI Community School District 2015 Refunding Bond (Qualified School Board Loan Fund Insured)

    5.00       5-1-2020        1,550,000        1,569,282  

Lake Orion MI Community School District 2016 Refunding Bond (Qualified School Board Loan Fund Insured)

    5.00       5-1-2020        1,390,000        1,407,292  

Lake Orion MI Community School District 2016 Refunding Bond (Qualified School Board Loan Fund Insured)

    5.00       5-1-2021        1,385,000        1,454,472  

South Lyon MI Community School District

    4.00       5-1-2020        1,425,000        1,438,324  

Southgate MI Community School District (BAM Insured)

    5.00       5-1-2020        500,000        506,385  

Warren Woods MI Public Schools (Qualified School Board Loan Fund Insured)

    5.00       5-1-2020        1,445,000        1,462,976  
            18,254,717  
         

 

 

 
Health Revenue: 0.37%                          

Michigan Finance Authority Bronson Healthcare Group Series B & C

    3.75       11-15-2049        7,600,000        8,502,272  

Michigan Finance Authority Crittenden Hospital Medical Center Series A

    4.13       6-1-2032        4,290,000        4,592,617  

Michigan Strategic Limited Obligation Refunding Bond Holland Home Project

    4.00       11-15-2024        580,000        622,346  
            13,717,235  
         

 

 

 
Housing Revenue: 0.26%                          

Michigan Housing Development Authority MFHR Bond Renaissance Estates of Ecorse Phase II Project

    1.45       11-1-2020        9,800,000        9,801,470  
         

 

 

 
Industrial Development Revenue: 0.53%                          

Michigan Strategic Limited Obligation Consumers Energy Company Project

    1.80       10-1-2049        19,500,000        19,589,310  
         

 

 

 
Miscellaneous Revenue: 0.07%                          

Michigan Finance Authority Local Government Loan Program Series 2014H-1

    5.00       10-1-2022        1,075,000        1,142,564  

Michigan Finance Authority Senior Lien Distributable State Aid Charter County of Wayne Criminal Justice Center Project

    5.00       11-1-2022        1,150,000        1,271,406  
            2,413,970  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

18  |  Wells Fargo Short-Term Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Water & Sewer Revenue: 0.24%                          

Michigan Finance Authority Refunding Bond Local Government Loan Program Detroit Water & Sewer Series D-6 (National Insured)

    5.00 %       7-1-2020      $ 1,800,000      $ 1,833,174  

Michigan Finance Authority Refunding Bond Second Lien Detroit Water & Sewer Series C-7 (National Insured)

    5.00       7-1-2020        3,835,000        3,905,679  

Michigan Finance Authority Refunding Bond Second Lien Detroit Water & Sewer Series C-7 (National Insured)

    5.00       7-1-2021        3,095,000        3,262,997  
            9,001,850  
         

 

 

 
            73,811,642  
         

 

 

 

Minnesota: 0.77%

         
GO Revenue: 0.05%                          

Hastings MN Independent School District #200 Series A (South Dakota Credit Program Insured) ¤

    0.00       2-1-2023        815,000        781,846  

Hastings MN Independent School District #200 Series A (South Dakota Credit Program Insured) ¤

    0.00       2-1-2024        1,015,000        955,704  
            1,737,550  
         

 

 

 
Housing Revenue: 0.70%                          

Brooklyn Center MN Multifamily Housing Development Sonder House Apartments Project

    1.35       1-1-2037        2,355,000        2,354,529  

Dakota County MN Community Development Agency Senior Multifamily Housing West St. Paul Apartments Project Series A

    2.25       1-1-2022        6,285,000        6,311,774  

Dakota County MN Community Development Agency Senior Multifamily Housing West St. Paul Apartments Project Series B

    3.80       7-1-2022        6,325,000        6,348,719  

Minnesota HFA Series D (SIFMA Municipal Swap +0.43%) (GNMA/FNMA/FHLMC Insured) ±

    2.04       1-1-2045        11,000,000        11,006,820  
            26,021,842  
         

 

 

 

Miscellaneous Revenue: 0.02%

         

Duluth MN Independent School District Certificates of Participation Series B (South Dakota Credit Program Insured)

    5.00       2-1-2024        425,000        483,773  

Duluth MN Independent School District Certificates of Participation Series B (South Dakota Credit Program Insured)

    5.00       2-1-2025        375,000        438,154  
            921,927  
         

 

 

 
            28,681,319  
         

 

 

 

Mississippi: 0.19%

 

       
Utilities Revenue: 0.19%                      

Mississippi Business Finance Corporation Mississippi Power Company Project Series 2010

    2.75       12-1-2040        6,750,000        6,835,050  
         

 

 

 

Missouri: 1.06%

 

       
GO Revenue: 0.18%                      

Kansas City MO Series A

    5.00       2-1-2020        1,495,000        1,499,530  

St. Louis MO Special Administrative Board The Transitional School Direct Deposit Program

    4.00       4-1-2022        5,030,000        5,346,488  
            6,846,018  
         

 

 

 
Health Revenue: 0.14%                          

Kirkwood MO IDA Retirement Community Series A

    8.25       5-15-2045        3,000,000        3,076,950  

Missouri HEFA Health Care Series B

    4.50       6-1-2025        1,000,000        1,013,810  

Missouri HEFA Health Care Series B

    5.00       6-1-2021        1,000,000        1,015,860  
            5,106,620  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  19


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Industrial Development Revenue: 0.65%                      

Missouri Environmental Improvement and Energy Resources Authority Kansas City Power And Light Company Project

    2.75 %       5-1-2038      $ 23,400,000      $ 23,921,118  
         

 

 

 

Tax Revenue: 0.09%

         

Arnold MO Real Property Arnold Triangle Redevelopment Project Series A

    3.75       5-1-2023        1,380,000        1,405,489  

Bi State Development Agency Missouri Illinois Metropolitan District Refunding Bond St Clair County Metrolink Project (AGM Insured)

    5.25       7-1-2020        2,000,000        2,039,720  
            3,445,209  
         

 

 

 
            39,318,965  
         

 

 

 

Nebraska: 0.16%

         
Housing Revenue: 0.13%                          

Douglas Country NE Housing Authority Sorensen Senior Residences Project Series A

    2.05       3-1-2020        5,000,000        5,000,350  
         

 

 

 
Utilities Revenue: 0.03%                          

Nebraska Public Power Generation Agency Whelan Energy Center Unit 2 Series A

    5.00       1-1-2020        1,000,000        1,000,000  
         

 

 

 
            6,000,350  
         

 

 

 

Nevada: 0.25%

         
Airport Revenue: 0.03%                          

Clark County NV Airport Jet Aviation Fuel Tax Series A

    5.00       7-1-2020        1,000,000        1,018,780  
         

 

 

 
GO Revenue: 0.13%                          

Clark County NV School District Series C

    5.00       6-15-2022        2,000,000        2,177,260  

Clark County NV School District Series D

    5.00       6-15-2021        2,395,000        2,526,845  
            4,704,105  
         

 

 

 
Industrial Development Revenue: 0.02%                          

Clark County NV PCR

    1.88       6-1-2031        880,000        880,370  
         

 

 

 
Utilities Revenue: 0.07%                          

Washoe County NV Sierra Pacific Power Series B

    3.00       3-1-2036        560,000        581,414  

Washoe County NV Water Facility Refunding Bond Series F

    2.05       3-1-2036        2,000,000        2,019,560  
            2,600,974  
         

 

 

 
            9,204,229  
         

 

 

 

New Hampshire: 0.07%

         
Housing Revenue: 0.07%                          

New Hampshire HFA MFHR Series 1 (FHA Insured)

    1.75       1-1-2020        2,455,000        2,455,000  
         

 

 

 

New Jersey: 6.89%

         
Airport Revenue: 0.20%                          

New Jersey EDA Refunding Bond Port Newark Container Terminal LLC Project

    5.00       10-1-2021        1,500,000        1,584,915  

New Jersey EDA Refunding Bond Port Newark Container Terminal LLC Project

    5.00       10-1-2022        1,755,000        1,909,528  

New Jersey EDA Refunding Bond Port Newark Container Terminal LLC Project

    5.00       10-1-2023        1,500,000        1,676,910  

New Jersey EDA Refunding Bond Port Newark Container Terminal LLC Project

    5.00       10-1-2024        2,000,000        2,288,960  
            7,460,313  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

20  |  Wells Fargo Short-Term Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Education Revenue: 0.30%                          

New Jersey EDA Student Loan Series 1

    5.50 %       12-1-2021      $ 1,000,000      $ 1,077,200  

New Jersey Higher Education Assistance Authority Series A1

    5.00       12-1-2020        9,775,000        10,097,771  
            11,174,971  
         

 

 

 
GO Revenue: 0.17%                          

Andover NJ Regional School District Refunding School Bond Series 2014 (BAM Insured)

    3.00       2-15-2020        515,000        516,112  

New Jersey TTFA Transit System Series A

    5.75       6-15-2020        2,275,000        2,319,317  

Trenton City NJ Refunding Bond

    4.00       7-15-2020        1,685,000        1,701,429  

Trenton City NJ Refunding Bond (BAM Insured)

    5.00       12-1-2020        1,675,000        1,730,459  
            6,267,317  
         

 

 

 
Housing Revenue: 2.37%                          

New Jersey Housing & Mortgage Finance Agency Multifamily Series A

    2.00       11-1-2021        325,000        328,439  

New Jersey Housing & Mortgage Finance Agency Multifamily Series B

    1.65       5-1-2020        4,605,000        4,610,664  

New Jersey Housing & Mortgage Finance Agency Multifamily Series B

    2.00       5-1-2021        14,335,000        14,455,127  

New Jersey Housing & Mortgage Finance Agency Multifamily Series C

    2.41       10-1-2021        27,500,000        27,710,650  

New Jersey Housing & Mortgage Finance Agency Single Family Housing Series B

    2.60       10-1-2021        5,805,000        5,882,207  

New Jersey Housing & Mortgage Finance Agency Single Family Housing Series B

    2.70       4-1-2022        5,925,000        6,036,212  

New Jersey Housing & Mortgage Finance Agency Single Family Housing Series B

    2.80       10-1-2022        5,530,000        5,662,112  

New Jersey Housing & Mortgage Finance Agency Single Family Housing Series B

    2.90       4-1-2023        6,100,000        6,287,331  

New Jersey Housing & Mortgage Finance Agency Single Family Housing Series B

    2.95       10-1-2023        5,710,000        5,918,758  

New Jersey Housing & Mortgage Finance Agency Single Family Housing Series B

    3.10       4-1-2024        2,700,000        2,820,717  

New Jersey Housing & Mortgage Finance Agency Single Family Housing Series B

    3.25       4-1-2025        3,070,000        3,239,863  

New Jersey Housing & Mortgage Finance Agency Villa Victoria Apartments Project Series F

    2.43       11-1-2021        5,000,000        5,039,700  
            87,991,780  
         

 

 

 
Miscellaneous Revenue: 1.97%                          

New Jersey EDA School Facilities Construction Bond Series DDD

    5.00       6-15-2023        3,000,000        3,338,400  

New Jersey EDA School Facilities Construction Bond Series DDD

    5.00       6-15-2024        2,605,000        2,963,422  

New Jersey EDA School Facilities Construction Bond Series K (National Insured)

    5.25       12-15-2021        1,040,000        1,116,960  

New Jersey EDA School Facilities Construction Bond Series NN

    5.00       3-1-2022        405,000        434,917  

New Jersey EDA School Facilities Construction Refunding Bond Series NN

    5.00       3-1-2021        1,410,000        1,473,253  

New Jersey EDA School Facilities Construction Refunding Bond Series NN

    5.00       3-1-2021        3,610,000        3,759,526  

New Jersey EDA Series BBB

    5.00       6-15-2022        6,000,000        6,501,480  

New Jersey EDA Series BBB

    5.00       6-15-2023        4,000,000        4,451,200  

New Jersey EDA Series XX

    5.00       6-15-2022        7,500,000        8,126,850  

New Jersey EDA Transportation Project New Jersey Transit Corporation Project Series B

    5.00       11-1-2021        2,490,000        2,651,626  

New Jersey EDA Transportation Project New Jersey Transit Corporation Project Series B

    5.00       11-1-2022        26,000,000        28,500,940  

New Jersey School Facilities Construction Prerefunded Bond Series EE

    5.00       9-1-2020        1,650,000        1,691,366  

New Jersey TTFA Series A

    5.00       6-15-2020        1,000,000        1,016,130  

Newark NJ Housing Authority Newark Redevelopment Project Refunding Bond (National Insured)

    5.25       1-1-2020        2,170,000        2,170,000  

Newark NJ Housing Authority Newark Redevelopment Project Refunding Bond (National Insured)

    5.25       1-1-2021        4,570,000        4,745,945  
            72,942,015  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  21


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue: 0.02%                          

New Jersey EDA School Facilities Construction Unrefunded Bond Series EE

    5.00 %       9-1-2020      $ 610,000      $ 624,433  
         

 

 

 
Transportation Revenue: 1.86%                          

New Jersey TTFA Series A

    5.25       12-15-2020        33,465,000        34,679,780  

New Jersey TTFA Series A1

    5.00       6-15-2020        7,000,000        7,114,800  

New Jersey TTFA Series A1

    5.00       6-15-2021        5,000,000        5,262,600  

New Jersey Turnpike Authority Series C-6 (1 Month LIBOR +0.75%) ±

    1.95       1-1-2030        21,820,000        22,014,853  
            69,072,033  
         

 

 

 
            255,532,862  
         

 

 

 

New Mexico: 0.30%

         
Health Revenue: 0.02%                          

Santa Fe NM Retirement Facility El Castillo Retirement

    2.25       5-15-2024        600,000        600,540  
         

 

 

 
Utilities Revenue: 0.28%                          

Farmington NM PCR Southern California Edison Company Four Corners Project Series 2011

    1.88       4-1-2029        5,500,000        5,502,530  

Farmington NM PCR Southern California Edison Company Four Corners Project Series A

    1.88       4-1-2029        4,950,000        4,952,277  
            10,454,807  
         

 

 

 
            11,055,347  
         

 

 

 

New York: 6.47%

         
GO Revenue: 0.72%                          

Nassau County NY Series A

    5.00       1-1-2020        4,000,000        4,000,000  

New York NY Series J Subordinate Bond Series J3 (AGM Insured) (m)

    1.65       6-1-2036        19,425,000        19,425,000  

Oyster Bay NY Public Improvement

    4.00       2-15-2020        1,000,000        1,002,900  

Rockland County NY Public Improvement Series C (AGM Insured)

    3.00       5-1-2020        1,390,000        1,398,646  

Rockland County NY Refunding Bond (BAM Insured)

    3.00       2-15-2020        630,000        631,392  
            26,457,938  
         

 

 

 
Health Revenue: 0.28%                          

New York Dormitory Authority Non State Supported Debt Northwell Health

    5.00       5-1-2048        4,000,000        4,517,160  

New York NY Health & Hospital Corporation Health System Series A

    5.50       2-15-2020        5,755,000        5,774,797  
            10,291,957  
         

 

 

 
Housing Revenue: 0.74%                          

New York NY Housing Development Corporation Multifamily Housing AMT Sustainable Neighborhood

    1.75       11-1-2023        400,000        401,400  

New York NY Housing Development Corporation Multifamily Housing AMT Sustainable Neighborhood

    1.80       5-1-2024        400,000        401,528  

New York NY Housing Development Corporation Multifamily Housing AMT Sustainable Neighborhood

    1.85       11-1-2024        400,000        401,656  

New York NY Housing Development Corporation Multifamily Housing AMT Sustainable Neighborhood

    1.90       5-1-2025        515,000        516,715  

New York NY Housing Development Corporation Multifamily Housing AMT Sustainable Neighborhood

    1.95       11-1-2025        520,000        521,321  

New York NY Housing Development Corporation Multifamily Housing AMT Sustainable Neighborhood

    2.00       5-1-2026        535,000        535,728  

New York NY Housing Development Corporation Sustainable Neighborhood Bond Series I2B

    2.00       5-1-2021        12,000,000        12,003,240  

New York HFA Affordable Housing Series L (GNMA/FNMA/FHLMC Insured)

    1.65       5-1-2021        6,400,000        6,431,808  

 

The accompanying notes are an integral part of these financial statements.

 

 

22  |  Wells Fargo Short-Term Municipal Bond Fund


Portfolio of Investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Housing Revenue (continued)                          

New York HFA Affordable Housing Series M-1 (GNMA/FNMA/FHLMC Insured)

    1.80 %       5-1-2020      $ 1,200,000      $ 1,202,100  

New York HFA Affordable Housing Series M-1 (GNMA/FNMA/FHLMC Insured)

    2.00       5-1-2021        5,000,000        5,038,600  
            27,454,096  
         

 

 

 
Industrial Development Revenue: 0.92%      

New York Transportation Development Corporation Special Facilities Revenue Delta Airlines Incorporated LaGuardia Airport Terminals C&D Redevelopment

    5.00       1-1-2024        30,130,000        33,967,056  
         

 

 

 
Miscellaneous Revenue: 0.08%      

Suffolk County NY Judicial Facilities Agency Leases H. Lee Dennison Building

    5.00       11-1-2020        2,915,000        3,000,759  
         

 

 

 
Tax Revenue: 0.55%      

New York Metropolitan Transportation Authority Subordinate Bond Series A2A (SIFMA Municipal Swap +0.45%) ±

    2.06       11-1-2026        6,065,000        6,067,305  

New York NY Transitional Finance Authority Subordinate Bond Series 1-B (SIFMA Municipal Swap +0.80%) ±

    2.41       11-1-2022        14,225,000        14,269,098  
            20,336,403  
         

 

 

 
Transportation Revenue: 2.63%      

New York Metropolitan Transportation Authority Subordinate Bond Series A2 (SIFMA Municipal Swap +0.58%) ±

    2.19       11-15-2039        2,000,000        2,000,200  

New York Metropolitan Transportation Authority Subordinate Bond
Series C2

    4.00       11-15-2033        8,530,000        8,666,139  

New York Metropolitan Transportation Authority Subordinate Bond
Series D-2A-1 (1 Month LIBOR +0.57%) (AGM Insured) ±

    1.75       11-1-2032        7,500,000        7,504,875  

New York Metropolitan Transportation Authority Subordinate Bond
Series D-2A-2 (1 Month LIBOR +0.68%) (AGM Insured) ±

    1.86       11-1-2032        20,000,000        20,057,600  

New York Metropolitan Transportation Authority Subordinate Bond
Series D-2B (1 Month LIBOR +0.30%) (AGM Insured) ±

    1.48       11-1-2032        6,000,000        5,989,080  

New York Metropolitan Transportation Authority Subordinate Bond
Series D1

    5.00       9-1-2022        20,000,000        21,873,000  

New York Metropolitan Transportation Authority Subordinate Bond
Series D2 (SIFMA Municipal Swap +0.45%) ±

    2.06       11-15-2044        22,545,000        22,524,710  

Niagara Falls NY Board Community Toll (National Insured)

    6.25       10-1-2020        8,685,000        9,010,861  
            97,626,465  
         

 

 

 
Utilities Revenue: 0.16%      

Long Island NY Power Authority Electric System General Series B

    1.65       9-1-2049        6,000,000        6,049,800  
         

 

 

 
Water & Sewer Revenue: 0.39%      

New York NY Municipal Water Finance Series B1-A (Sumitomo Mitsui Banking SPA) ø

    1.58       6-15-2024        14,500,000        14,500,000  
         

 

 

 
            239,684,474  
         

 

 

 

North Carolina: 0.23%

 
Health Revenue: 0.20%      

Charlotte Mecklenburg NC Hospital Authority Atrium Health Series B

    5.00       1-15-2048        7,000,000        7,545,090  
         

 

 

 
Industrial Development Revenue: 0.03%      

Columbus County NC Industrial Facilities and Pollution Control Financing Authority Environmental Improvement Revenue Refunding Bond International Paper Company Project Series A

    2.00       11-1-2033        1,000,000        1,008,760  
         

 

 

 
            8,553,850  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  23


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Ohio: 2.61%

 
GO Revenue: 0.01%      

Springfield OH Refunding Bond (AGC Insured)

    4.00 %       12-1-2020      $ 225,000      $ 225,439  
         

 

 

 
Health Revenue: 0.02%      

Lake County OH Lake Hospital System Incorporated

    5.00       8-15-2020        905,000        924,584  
         

 

 

 
Housing Revenue: 1.47%      

Cuyahoga OH Metropolitan Housing Authority Headquarters Project

    1.75       3-1-2020        5,445,000        5,447,178  

Lucas OH Metropolitan Housing Authority Certificate of Participation

    2.25       11-1-2020        270,000        271,123  

Lucas Plaza OH Housing Development Corporation Refunding Bond (FHA Insured) ¤

    0.00       6-1-2024        15,800,000        14,766,206  

Ohio HFA Cambridge Village Apartments Project (HUD Insured)

    2.40       4-1-2021        3,200,000        3,207,872  

Ohio HFA Multifamily Sem Manor Project

    1.40       9-1-2020        6,000,000        6,000,180  

Ohio HFA Multifamily Southwick Place Townhomes Project

    1.55       3-1-2022        4,975,000        4,978,383  

Ohio HFA Multifamily Wesley Tower Apartments Project

    1.40       6-1-2022        10,500,000        10,498,425  

Trumbull Metropolitan Housing Authority Multifamily Housing Apartments Project Series A

    1.70       6-1-2022        9,250,000        9,285,890  
            54,455,257  
         

 

 

 
Industrial Development Revenue: 0.10%      

Ohio Air Quality Development Authority Ohio Valley Electric Corporation Series A

    2.88       2-1-2026        3,750,000        3,805,613  
         

 

 

 
Miscellaneous Revenue: 0.07%      

Ohio Portsmouth Bypass Project

    5.00       12-31-2020        1,320,000        1,363,441  

Ohio Portsmouth Bypass Project

    5.00       12-31-2021        1,205,000        1,281,433  
            2,644,874  
         

 

 

 
Resource Recovery Revenue: 0.33%      

Ohio Air Quality Development Authority Refunding Bond American Electric Power Company Project

    1.90       5-1-2026        12,000,000        12,055,920  
         

 

 

 
Utilities Revenue: 0.61%      

American Municipal Power Ohio Incorporated Refunding Bond

    2.30       2-15-2038        8,750,000        8,880,813  

Lancaster OH Port Authority Gas Supply

    5.00       8-1-2049        12,000,000        13,892,280  
            22,773,093  
         

 

 

 
            96,884,780  
         

 

 

 

Oklahoma: 1.00%

 
Airport Revenue: 0.07%      

Tulsa OK Airports Improvement Trust Series 2013A (BAM Insured)

    5.00       6-1-2020        695,000        705,091  

Tulsa OK Airports Improvement Trust Series 2015A (BAM Insured)

    5.00       6-1-2020        1,710,000        1,734,829  
            2,439,920  
         

 

 

 
Education Revenue: 0.01%      

Oklahoma Development Finance Authority Refunding Bond Oklahoma City University Project

    4.00       8-1-2022        535,000        564,350  
         

 

 

 
GO Revenue: 0.40%      

Oklahoma County OK Independent School District #52 Series A

    2.50       1-1-2021        3,535,000        3,581,697  

Oklahoma County OK Independent School District #52 Series A

    3.00       1-1-2022        3,535,000        3,662,861  

Oklahoma County OK Independent School District #52 Series A

    3.00       1-1-2023        3,135,000        3,305,074  

Oklahoma County OK Independent School District #52 Series A

    3.50       1-1-2020        2,840,000        2,840,000  

Woodward County OK Independent School District #1 Board of Education

    2.30       6-1-2020        1,435,000        1,439,319  
            14,828,951  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

24  |  Wells Fargo Short-Term Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue: 0.05%  

Oklahoma Development Finance Authority Oklahoma University Medicine Project Series B

    5.00 %       8-15-2022      $ 500,000      $ 541,220  

Oklahoma Development Finance Authority Oklahoma University Medicine Project Series B

    5.00       8-15-2023        500,000        556,160  

Oklahoma Development Finance Authority Oklahoma University Medicine Project Series B

    5.00       8-15-2024        600,000        684,540  
            1,781,920  
         

 

 

 
Miscellaneous Revenue: 0.46%  

Blaine County OK Educational Facilities Authority Watonga Public Schools Project

    5.00       12-1-2020        750,000        773,933  

Blaine County OK Educational Facilities Authority Watonga Public Schools Project

    5.00       12-1-2021        945,000        1,011,519  

Creek County OK Educational Facilities Authority Sapulpa Public School Project

    5.00       9-1-2020        2,550,000        2,613,393  

Grady County OK School Finance Authority Tuttle Public School Project

    5.00       9-1-2021        1,065,000        1,131,168  

Kay County OK Public Buildings Authority

    2.25       4-1-2024        720,000        717,797  

Kay County OK Public Buildings Authority

    2.25       4-1-2025        735,000        731,060  

Kay County OK Public Buildings Authority

    2.38       4-1-2026        750,000        747,998  

Ottawa County OK Educational Facilities Authority Educational Facilities Lease Miami Public Schools Project

    5.00       9-1-2023        830,000        930,563  

Ottawa County OK Educational Facilities Authority Educational Facilities Lease Miami Public Schools Project

    5.00       9-1-2024        1,080,000        1,241,341  

Ottawa County OK Educational Facilities Authority Educational Facilities Lease Miami Public Schools Project

    5.00       9-1-2025        930,000        1,092,006  

Tulsa County OK Industrial Authority Educational Broken Arrow Public Schools Project

    5.00       9-1-2025        2,500,000        2,827,675  

Wagoner County OK School Development Authority Wagoner Public Schools Project

    4.00       9-1-2025        1,255,000        1,409,880  

Weatherford OK Industrial Trust Educational Facilities Lease Weatherford Public Schools Project

    5.00       3-1-2027        1,475,000        1,784,721  
            17,013,054  
         

 

 

 
Tax Revenue: 0.01%  

Cleveland County OK Justice Authority Detention Facility Project

    4.00       3-1-2020        500,000        501,050  
         

 

 

 
            37,129,245  
         

 

 

 

Other: 0.67%

 

       
Miscellaneous Revenue: 0.67%                      

FHLMC Multiclass Mortgage Certificate of Participation Series M012 Class A1A øø

    1.60       8-15-2051        3,575,268        3,604,442  

FHLMC Multiclass Mortgage Certificate of Participation Series M012 Class A1B1 øø

    2.25       8-15-2051        16,535,614        16,833,090  

Public Housing Capital Fund Trust I (HUD Insured) 144A

    4.50       7-1-2022        3,692,210        3,732,012  

Public Housing Capital Fund Trust II (HUD Insured) 144A

    4.50       7-1-2022        575,829        584,340  
            24,753,884  
         

 

 

 

Pennsylvania: 6.39%

 

       
Education Revenue: 0.79%                      

Lehigh County PA General Purpose Authority (SIFMA Municipal Swap +0.58%) ±

    2.19       11-1-2037        11,025,000        11,023,457  

Philadelphia PA IDA Thomas Jefferson University Series B ø

    1.78       9-1-2050        18,210,000        18,210,000  
            29,233,457  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  25


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue: 1.51%                      

Butler PA Area School District (AGM Insured)

    5.00 %       10-1-2023      $ 1,280,000      $ 1,446,374  

Butler PA Area School District (AGM Insured)

    5.00       10-1-2024        2,965,000        3,444,678  

Butler PA Area School District (AGM Insured)

    5.00       10-1-2025        4,695,000        5,587,942  

Coatesville PA Area School District (AGM Insured)

    5.00       8-1-2023        1,000,000        1,117,460  

Lackawanna County PA Riverside School District Project (BAM Insured)

    4.00       10-15-2020        1,455,000        1,482,281  

Manheim Township PA School District Series A (1 Month LIBOR +0.47%) ±

    1.63       5-1-2025        3,760,000        3,769,588  

Penn Hills PA School District (BAM Insured)

    5.00       11-15-2020        825,000        851,499  

Penn Hills PA School District (BAM Insured)

    5.00       11-15-2021        1,275,000        1,359,992  

Philadelphia PA School District Refunding Bond %%

    5.00       9-1-2023        4,500,000        4,994,460  

Philadelphia PA School District Series A

    5.00       9-1-2022        1,000,000        1,096,130  

Philadelphia PA School District Series A

    5.00       9-1-2024        800,000        923,016  

Philadelphia PA School District Series C

    5.00       9-1-2020        1,125,000        1,152,821  

Philadelphia PA School District Series D

    5.00       9-1-2020        1,500,000        1,537,095  

Philadelphia PA School District Series D

    5.00       9-1-2021        1,750,000        1,856,330  

Philadelphia PA School District Series E (State Aid Withholding Insured)

    5.00       9-1-2020        2,225,000        2,280,024  

Philadelphia PA School District Series E

    5.25       9-1-2023        7,000,000        7,186,970  

Philadelphia PA School District Series F

    5.00       9-1-2020        2,750,000        2,818,008  

Philadelphia PA School District Series F

    5.00       9-1-2021        3,580,000        3,797,521  

Scranton PA 144A

    5.00       9-1-2020        2,205,000        2,246,851  

Scranton PA School District Series A

    5.00       6-1-2021        680,000        711,246  

Scranton PA School District Series A

    5.00       6-1-2022        730,000        783,224  

Scranton PA School District Series A

    5.00       6-1-2023        835,000        924,370  

Scranton PA School District Series B

    5.00       6-1-2021        580,000        606,651  

Scranton PA School District Series B (National Insured)

    5.00       6-1-2022        870,000        937,703  

Scranton PA School District Series B (National Insured)

    5.00       6-1-2023        615,000        680,823  

Scranton PA School District Series C

    5.00       6-1-2020        585,000        592,886  

Scranton PA School District Series C

    5.00       6-1-2021        590,000        617,111  

Warwick PA School District

    4.00       2-15-2020        1,000,000        1,003,350  
            55,806,404  
         

 

 

 
Health Revenue: 0.92%                      

Allegheny County PA Hospital Development Authority University of Pittsburgh Medical Center Series A-1 (3 Month LIBOR +0.72%) ±

    2.00       2-1-2021        1,345,000        1,348,201  

Berks County PA IDA Health System Tower Health Project

    5.00       11-1-2023        1,000,000        1,123,550  

Berks County PA IDA Health System Tower Health Project

    5.00       11-1-2024        1,000,000        1,152,310  

Franklin County PA IDA Menno-Haven Incorporated Project

    5.00       12-1-2021        230,000        240,486  

Lancaster County PA Hospital Authority Healthcare Facilities Moravian Manors Incorporated Project

    2.88       12-15-2023        1,200,000        1,200,240  

Montgomery County PA Higher Education & Health Authority
Series 2018D ø

    1.78       9-1-2050        10,000,000        10,000,000  

Montgomery County PA Higher Education & Health Authority Thomas Jefferson University Series A

    5.00       9-1-2023        1,050,000        1,188,033  

Montgomery County PA Higher Education & Health Authority Thomas Jefferson University Series C (SIFMA Municipal Swap +0.72%) ±

    2.33       9-1-2051        10,000,000        10,000,000  

Montgomery County PA IDA Albert Einstein Healthcare Network Issue Series A

    5.00       1-15-2020        1,315,000        1,316,460  

Philadelphia PA Hospitals & HEFAR Temple University Health System

    5.00       7-1-2021        1,250,000        1,307,950  

Philadelphia PA Hospitals & HEFAR Temple University Health System

    5.00       7-1-2022        2,000,000        2,150,780  

Quakertown PA Health Facilities Authority Series A

    3.13       7-1-2021        3,250,000        3,247,888  
            34,275,898  
         

 

 

 
Housing Revenue: 1.10%                      

Pennsylvania HFA Single Family Series 125A

    2.38       10-1-2025        18,205,000        18,543,249  

Pennsylvania HFA Single Family Series 128A

    4.75       4-1-2033        8,175,000        8,984,080  

 

The accompanying notes are an integral part of these financial statements.

 

 

26  |  Wells Fargo Short-Term Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Housing Revenue (continued)                      

Pennsylvania HFA Special Limited Obligation Multifamily Housing Norris Homes Phase V

    1.40 %       1-1-2043      $ 10,000,000      $ 9,996,600  

Pittsburgh PA Urban RDA Crawford Square Apartments Project

    2.25       12-1-2020        3,300,000        3,301,320  
            40,825,249  
         

 

 

 
Industrial Development Revenue: 0.64%                      

Lehigh County PA IDA Electric Utilities Corporation Series B

    1.80       2-15-2027        2,500,000        2,527,425  

Montgomery County PA IDA Exelon Generation Company LLC

    2.50       10-1-2030        15,795,000        15,839,384  

Montgomery County PA IDA Peco Energy Company Project Series A

    2.60       3-1-2034        2,125,000        2,143,806  

Pennsylvania EDFA Bridges Finco LP

    5.00       12-31-2020        2,020,000        2,084,640  

Pennsylvania EDFA Bridges Finco LP

    5.00       12-31-2021        1,095,000        1,162,452  
            23,757,707  
         

 

 

 
Miscellaneous Revenue: 0.35%                      

Bethlehem PA Area School District Authority Bethlehem Area School District Refunding Bond Project (1 Month LIBOR +0.49%) ±

    1.74       1-1-2030        4,970,000        4,976,014  

Delaware County PA Authority Neumann University

    4.00       10-1-2021        1,365,000        1,407,438  

Philadelphia PA Public School Building Authority Harrisburg School District Project Series A (AGM Insured)

    5.00       12-1-2023        2,505,000        2,842,198  

Philadelphia PA RDA Transformation Initiative Series B

    5.00       4-15-2020        1,870,000        1,888,064  

Scranton PA RDA Series A (Municipal Government Guaranty Insured)

    5.00       11-15-2021        1,765,000        1,822,698  
            12,936,412  
         

 

 

 
Resource Recovery Revenue: 0.25%                      

Pennsylvania EDFA Solid Waste Disposal Series A

    1.70       8-1-2037        9,420,000        9,431,963  
         

 

 

 
Transportation Revenue: 0.42%                      

Lancaster PA Parking Authority Series A (BAM Insured)

    4.00       9-1-2025        530,000        596,626  

Lancaster PA Parking Authority Series A (BAM Insured)

    4.00       9-1-2026        545,000        621,398  

Pennsylvania Turnpike Commission Series B (SIFMA Municipal Swap +0.70%) ±

    2.31       12-1-2023        2,880,000        2,899,094  

Pennsylvania Turnpike Commission Series B (SIFMA Municipal Swap +1.27%) ±

    2.88       12-1-2020        11,300,000        11,351,980  
            15,469,098  
         

 

 

 
Water & Sewer Revenue: 0.41%                      

Pittsburgh PA Water & Sewer Authority Series C (1 Month LIBOR +0.64%) (AGM Insured) ±

    1.89       9-1-2040        15,000,000        15,004,650  
         

 

 

 
            236,740,838  
         

 

 

 

Rhode Island: 0.36%

 

       
Education Revenue: 0.03%                      

Rhode Island Student Loan Authority AMT Series A

    5.00       12-1-2023        1,175,000        1,324,084  
         

 

 

 
Health Revenue: 0.09%                      

Rhode Island Health & Educational Building Corporation Tockwotton Home Series 2011

    8.38       1-1-2046        3,000,000        3,212,460  
         

 

 

 
Miscellaneous Revenue: 0.24%                      

Rhode Island & Providence Plantations Consolidated Capital Development Series A

    5.00       8-1-2023        8,045,000        8,833,330  
         

 

 

 
            13,369,874  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  27


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

South Carolina: 0.47%

 

       
Health Revenue: 0.19%                      

South Carolina Jobs EDA Prisma Health Obligated Group Series C ø

    1.77 %       5-1-2048      $ 7,000,000      $ 7,000,000  
         

 

 

 
Miscellaneous Revenue: 0.13%                      

South Carolina Transportation Infrastructure Bank Refunding Bond Series B (1 Month LIBOR +0.45%) ±

    1.60       10-1-2031        4,955,000        4,960,351  
         

 

 

 
Utilities Revenue: 0.15%                      

Piedmont SC Municipal Power Agency (National Insured)

    5.38       1-1-2025        4,760,000        5,605,233  
         

 

 

 
            17,565,584  
         

 

 

 

Tennessee: 1.81%

 

       
Health Revenue: 0.08%                      

Greeneville TN Health and Educational Ballad Health Series A

    5.00       7-1-2023        1,600,000        1,784,992  

Knox County TN Health Educational and University Health System Incorporate

    5.00       4-1-2024        1,000,000        1,126,870  
            2,911,862  
         

 

 

 
Housing Revenue: 0.18%                      

Kingsport TN Housing & RDA Collateralized Multifamily Housing Series B

    2.22       1-1-2022        6,700,000        6,771,958  
         

 

 

 
Utilities Revenue: 1.55%                      

Tennessee Energy Acquisition Corporation Gas Project

    4.00       11-1-2049        7,500,000        8,336,400  

Tennessee Energy Acquisition Corporation Series A

    4.00       5-1-2048        45,840,000        49,066,678  
            57,403,078  
         

 

 

 
            67,086,898  
         

 

 

 

Texas: 13.55%

 

       
Airport Revenue: 0.40%                      

Dallas-Fort Worth TX International Airport Series B

    5.00       11-1-2023        500,000        551,610  

El Paso TX Airport Series 2018

    5.00       8-15-2025        3,110,000        3,659,133  

Houston TX Airport System Refunding Bond Subordinate Bond Lien Series A

    5.00       7-1-2024        3,620,000        3,937,293  

Houston TX Airport System Refunding Bond Subordinated Lien Series B

    5.00       7-1-2027        6,090,000        6,645,713  
            14,793,749  
         

 

 

 
Education Revenue: 0.53%                      

Clifton TX Higher Education Finance Corporation Education International Leadership Series D

    5.00       8-15-2021        665,000        693,103  

Clifton TX Higher Education Finance Corporation Education International Leadership Series D

    5.00       8-15-2022        1,000,000        1,065,800  

Clifton TX Higher Education Finance Corporation Education International Leadership Series D

    5.00       8-15-2023        1,510,000        1,641,914  

Clifton TX Higher Education Finance Corporation Education International Leadership Series D

    5.00       8-15-2024        3,125,000        3,457,813  

North Texas Higher Education Authority Incorporated Student Loan Series 2 Class A (3 Month LIBOR +1.00%) ±

    3.10       4-1-2037        4,205,000        4,225,184  

Texas A&M University System Permanent University Series A

    5.00       7-1-2021        4,870,000        5,152,265  

University of Texas Financing System Refunding Bond Series C

    5.00       8-15-2022        3,000,000        3,303,240  
            19,539,319  
         

 

 

 
GO Revenue: 7.50%                      

Cypress-Fairbanks TX Independent School District Series A-1

    2.13       2-15-2027        7,040,000        7,134,970  

Cypress-Fairbanks TX Independent School District Series B-2

    2.13       2-15-2040        17,000,000        17,229,330  

 

The accompanying notes are an integral part of these financial statements.

 

 

28  |  Wells Fargo Short-Term Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue (continued)                      

Dallas TX Unrefunded Balance Refunding Bond

    5.00 %       2-15-2021      $ 3,580,000      $ 3,732,866  

Denton TX Independent School District School Building Series B

    2.00       8-1-2044        4,070,000        4,177,204  

Denton TX Independent School District Unlimited Tax School Building Bond Series 2013

    2.00       8-1-2043        4,000,000        4,016,040  

Eanes TX Independent School District School Building Series B

    1.75       8-1-2039        7,465,000        7,562,568  

Fort Bend TX Independent School District Series C

    1.35       8-1-2042        4,525,000        4,526,267  

Fort Bend TX independent School District Series D

    1.50       8-1-2042        10,530,000        10,561,064  

Harris County TX Cypress-Fairbanks Independent High School Series B-1

    2.13       2-15-2040        4,800,000        4,864,752  

Hays TX Consolidated Independent School District Building Bond Series B

    2.70       8-15-2042        7,370,000        7,628,392  

Houston TX Independent School District

    1.45       6-1-2029        8,385,000        8,390,115  

Houston TX Independent School District Limited Tax Schoolhouse Series B

    2.40       6-1-2036        5,000,000        5,078,050  

Houston TX Public Improvement Series A

    5.00       3-1-2020        4,000,000        4,024,960  

Houston TX Public Improvement Series A

    5.00       3-1-2021        4,000,000        4,179,440  

Houston TX Public Improvement Series A

    5.00       3-1-2022        5,000,000        5,416,200  

Houston TX Public Improvement Series A

    5.00       3-1-2023        3,500,000        3,915,170  

Hurst Euless Bedford TX Independent School District Prerefunded Bond

    5.00       8-15-2022        2,140,000        2,190,055  

Hutto TX Independent School District Series 2015

    3.00       2-1-2055        23,725,000        23,956,319  

Lake Travis TX Independent School District Prefunded Bond Series B

    2.63       2-15-2048        1,010,000        1,040,845  

Lake Travis TX Independent School District Unrefunded Bond

    2.63       2-15-2048        8,990,000        9,214,660  

Leander TX Independent School District Refunding CAB ¤

    0.00       8-15-2023        1,065,000        1,014,817  

Leander TX Independent School District Unrefunded Bond ¤

    0.00       8-15-2044        8,500,000        2,730,795  

Mansfield TX Independent School District

    2.50       8-1-2042        8,500,000        8,654,700  

McAllen TX Independent School District Series A

    5.00       2-15-2024        2,620,000        2,925,125  

New Caney TX Independent School District Building Bond

    3.00       2-15-2050        1,100,000        1,130,173  

North East TX Independent School District

    2.20       8-1-2049        4,800,000        4,966,704  

North East TX Independent School District

    2.38       8-1-2047        7,135,000        7,317,513  

Northside TX Independent School District Building Bond Series 2018

    2.75       8-1-2048        18,975,000        19,880,677  

Northside TX Independent School District Building Project

    1.75       6-1-2032        6,045,000        6,052,012  

Northside TX Independent School District Building Project

    2.00       6-1-2046        10,845,000        10,934,037  

Nueces County TX Tax Notes

    1.95       2-15-2026        6,500,000        6,500,585  

Pflugerville TX Independent School District School Building Series A

    2.25       8-15-2037        3,450,000        3,534,767  

Texas Northside Independent School District

    1.45       6-1-2047        4,000,000        4,001,760  

Texas Tax Revenue Anticipation Notes

    4.00       8-27-2020        27,750,000        28,268,093  

Texas Transportation Commission Mobility Fund Series B (SIFMA Municipal Swap +0.30%) ±

    1.91       10-1-2041        24,500,000        24,502,205  

Tomball TX Independent School District Series B2

    2.13       2-15-2039        6,750,000        6,841,058  
            278,094,288  
         

 

 

 
Health Revenue: 0.59%                      

Harris County TX Cultural Education Facilities Finance Corporation Hospital Memorial Hermann Health System (SIFMA Municipal Swap +0.57%) ±

    2.18       12-1-2049        11,000,000        11,000,000  

Harris County TX Cultural Education Facilities Finance Corporation Hospital Memorial Hermann Health System

    5.00       7-1-2049        7,000,000        8,151,710  

Tarrant County TX ECFA Hendrick Medical Center Group

    5.00       9-1-2020        920,000        942,871  

Tarrant County TX ECFA Hendrick Medical Center Group

    5.00       11-15-2020        1,045,000        1,061,365  

Travis County TX Health Facilities Development Corporation Longhorn Village Project Series A

    7.13       1-1-2046        845,000        894,694  
            22,050,640  
         

 

 

 
Housing Revenue: 2.14%                      

Alamito TX Public Facility Corporation Cramer Three Apartments Project

    2.50       11-1-2021        20,000,000        20,250,800  

Austin TX Affordable PFC Incorporated Multifamily Housing Bridge Cameron Apartments

    1.45       12-1-2021        25,000,000        25,001,000  

Austin TX Affordable PFC Incorporated Multifamily Housing Bridge Granada Apartments

    1.46       6-1-2023        500,000        500,805  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  29


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Housing Revenue (continued)                      

Bexar County TX Housing Finance Corporation Medio Springs Apartments Project

    2.00 %       11-1-2020      $ 26,500,000      $ 26,548,760  

Dallas TX Housing Finance Corporation Multifamily Housing Estates At Shiloh

    1.51       7-1-2037        7,000,000        6,998,670  
            79,300,035  
         

 

 

 
Miscellaneous Revenue: 0.08%                      

Texas Subordinate Bond Series E2

    2.25       8-1-2029        2,960,000        2,976,280  
         

 

 

 
Resource Recovery Revenue: 0.30%                      

Mission TX Economic Development Corporation Waste Management Project

    2.50       8-1-2020        11,000,000        11,012,540  
         

 

 

 
Transportation Revenue: 0.71%                      

Central Texas Regional Mobility Authority Series B

    5.00       1-1-2045        410,000        417,085  

Central Texas Regional Mobility Authority Subordinate Bond

    4.00       1-1-2022        6,000,000        6,224,460  

North Texas Tollway Authority Series A

    5.00       1-1-2020        1,050,000        1,050,000  

North Texas Tollway Authority Series A

    5.00       1-1-2021        1,860,000        1,930,420  

North Texas Tollway Authority Special Projects System Series A

    6.00       9-1-2041        3,500,000        3,777,830  

North Texas Tollway Authority Special Projects System Series D

    5.00       9-1-2028        4,335,000        4,608,755  

North Texas Tollway Authority Special Projects System Series D

    5.25       9-1-2025        3,840,000        4,098,240  

North Texas Tollway Authority Special Projects System Series D

    5.25       9-1-2026        3,980,000        4,247,655  
            26,354,445  
         

 

 

 
Utilities Revenue: 0.78%                      

San Antonio TX Electric & Gas Systems Junior Lien Refunding Bond

    2.75       2-1-2048        6,000,000        6,245,640  

San Antonio TX Junior Lien Series D

    3.00       12-1-2045        12,325,000        12,519,735  

Texas Municipal Gas Acquisition & Supply Corporation Series A (SIFMA Municipal Swap +0.55%) ±

    2.16       9-15-2027        10,345,000        10,230,791  
            28,996,166  
         

 

 

 
Water & Sewer Revenue: 0.52%                      

San Antonio TX Water System Junior Lien Series A

    2.63       5-1-2049        12,250,000        12,889,695  

San Antonio TX Water System Junior Lien Series B

    2.00       5-1-2044        5,805,000        5,897,706  

Walnut Creek TX Special Utility District (BAM Insured)

    4.00       1-10-2020        500,000        500,275  
            19,287,676  
         

 

 

 
            502,405,138  
         

 

 

 

Utah: 0.31%

 

       
Airport Revenue: 0.23%                      

Salt Lake City UT International Airport Series A

    5.00       7-1-2023        3,150,000        3,532,473  

Salt Lake City UT International Airport Series A

    5.00       7-1-2024        2,000,000        2,303,920  

Salt Lake City UT International Airport Series A

    5.00       7-1-2025        2,300,000        2,713,241  
            8,549,634  
         

 

 

 
Housing Revenue: 0.08%                      

Utah Housing Corporation Multifamily Lincoln Tower Apartments Project

    1.54       8-1-2022        3,000,000        3,003,660  
         

 

 

 
            11,553,294  
         

 

 

 

Virginia: 3.45%

 

       
Health Revenue: 0.04%                      

Lexington VA IDA Residential Care Facility Kendal at Lexington Refunding Bond

    3.00       1-1-2020        450,000        450,000  

Lexington VA IDA Residential Care Facility Kendal at Lexington Refunding Bond

    4.00       1-1-2021        440,000        448,272  

 

The accompanying notes are an integral part of these financial statements.

 

 

30  |  Wells Fargo Short-Term Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue (continued)                      

Lexington VA IDA Residential Care Facility Kendal at Lexington Refunding Bond

    4.00 %       1-1-2022      $ 525,000      $ 542,924  
            1,441,196  
         

 

 

 
Housing Revenue: 0.78%                      

Fairfax County VA Redevelopment & Housing Authority Parkwood Project

    2.21       2-1-2021        15,000,000        15,076,500  

Spotsylvania County VA Economic Development Authority Palmers Creek Apartments Project (FHA/GNMA Insured)

    1.45       8-1-2022        13,700,000        13,713,426  
            28,789,926  
         

 

 

 
Industrial Development Revenue: 0.09%                      

Peninsula VA Ports Authority Coal Terminal Refunding Bond Dominion Terminal Associates Project

    1.70       10-1-2033        3,300,000        3,296,106  
         

 

 

 
Miscellaneous Revenue: 0.56%                      

Franklin County VA IDA Public Facility Lease BAN

    3.00       10-15-2023        3,000,000        3,037,830  

Westmoreland County VA IDA Lease BAN High School Project

    2.00       6-1-2022        17,510,000        17,743,233  
            20,781,063  
         

 

 

 
Tax Revenue: 0.08%                      

Greater Richmond VA Convention Center Authority

    5.00       6-15-2020        1,000,000        1,017,360  

Marquis VA CDA CAB Series 2015 144A ¤

    0.00       9-1-2045        680,000        447,086  

Marquis VA CDA CAB Series A

    5.10       9-1-2036        2,169,000        1,391,565  

Marquis VA CDA CAB Series C ¤

    0.00       9-1-2041        3,493,000        210,383  
            3,066,394  
         

 

 

 
Transportation Revenue: 0.46%                      

Chesapeake VA Bay Bridge & Tunnel District First Tier Generation Resolution

    5.00       11-1-2023        13,750,000        15,585,625  

Virginia Commonwealth Transportation Board Refunding Bond Series A

    5.00       5-15-2023        1,500,000        1,692,690  
            17,278,315  
         

 

 

 
Utilities Revenue: 1.44%                      

Halifax County VA IDA

    2.15       12-1-2041        44,450,000        44,694,475  

York County VA EDA PCR Virginia Electric And Power Company Project Series A

    1.90       5-1-2033        8,500,000        8,609,395  
            53,303,870  
         

 

 

 
            127,956,870  
         

 

 

 

Washington: 4.68%

 

       
Airport Revenue: 0.31%                      

Metropolitan Washington Airports Authority Refunding Bond Series 2014A

    3.00       10-1-2022        6,500,000        6,787,625  

Port of Seattle WA Refunding Bond Series B

    5.00       8-1-2023        4,155,000        4,539,919  
            11,327,544  
         

 

 

 
Education Revenue: 0.59%                      

University of Washington Series A

    5.00       5-1-2048        20,500,000        21,876,370  
         

 

 

 
GO Revenue: 0.22%                      

Washington Refunding Bond %%

    5.00       6-1-2025        1,000,000        1,137,250  

Washington Refunding Bond %%

    5.00       6-1-2026        1,570,000        1,824,356  

Washington Series A

    5.00       8-1-2022        4,800,000        5,276,832  
            8,238,438  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  31


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue: 0.75%                      

Washington HCFR Catholic Health Initiatives Series B (SIFMA Municipal Swap +1.00%) ±

    2.61 %       1-1-2035      $ 8,650,000      $ 8,665,224  

Washington Health Care Facilities Authority Catholic Health Initiatives
Series A

    5.00       2-1-2023        1,025,000        1,066,574  

Washington Health Care Facilities Authority Commonspirit Health Series B1

    5.00       8-1-2049        2,500,000        2,834,550  

Washington Health Care Facilities Authority Commonspirit Health Series B3

    5.00       8-1-2049        4,000,000        4,719,360  

Washington Health Care Facilities Authority Fred Hutchinson Cancer Research (1 Month LIBOR +1.10%) ±

    2.30       1-1-2042        9,500,000        9,610,200  

Washington Health Care Facilities Authority Series 2015

    5.00       7-1-2020        850,000        863,668  
            27,759,576  
         

 

 

 
Housing Revenue: 0.91%                      

Snohomish County WA Housing Authority Carvel Apartments Project

    5.00       4-1-2025        500,000        583,015  

Snohomish County WA Housing Authority Carvel Apartments Project

    5.00       4-1-2026        730,000        867,795  

Washington Housing Finance Commission Multifamily Housing College Glen Apartments Project Series A (FHA Insured)

    1.55       7-1-2022        7,880,000        7,892,056  

Washington Housing Finance Commission Multifamily Housing Sanford Hildebrandt Towers Project

    2.25       7-1-2021        17,025,000        17,155,582  

Washington Housing Finance Commission Multifamily Housing Series A

    1.80       7-1-2020        7,350,000        7,350,000  
            33,848,448  
         

 

 

 
Tax Revenue: 0.47%                      

Central Puget Sound WA Regional Transit Authority Sales Series S2B (SIFMA Municipal Swap +0.45%) ±

    2.06       11-1-2045        17,250,000        17,252,415  
         

 

 

 
Utilities Revenue: 0.97%                      

Seattle WA Municipal Light & Power Refunding Bond Series B-2 (SIFMA Municipal Swap +0.29%) ±

    1.90       5-1-2045        12,635,000        12,639,043  

Seattle WA Municipal Light & Power Refunding Bond Series C-1 (SIFMA Municipal Swap +0.49%) ±

    2.10       11-1-2046        23,190,000        23,279,282  
            35,918,325  
         

 

 

 
Water & Sewer Revenue: 0.46%                      

King County WA Junior Lien Series 2011

    2.45       1-1-2042        17,000,000        17,064,430  
         

 

 

 
            173,285,546  
         

 

 

 

West Virginia: 0.23%

 

       
Utilities Revenue: 0.23%  

West Virginia EDA Solid Waste Disposal Facilities Wheeling Power Company Mitchell Project Series A

    3.00       6-1-2037        8,300,000        8,558,462  
         

 

 

 

Wisconsin: 2.22%

 

Airport Revenue: 0.21%  

Wisconsin Airport Facilities PFA Senior Obligation Group Series B

    5.00       7-1-2022        7,470,000        7,801,967  
         

 

 

 
Education Revenue: 0.04%  

Wisconsin PFA Guilford College

    5.00       1-1-2021        650,000        667,869  

Wisconsin PFA Guilford College

    5.00       1-1-2022        625,000        658,694  
            1,326,563  
         

 

 

 
Health Revenue: 0.71%  

Wisconsin HEFA Advocate Aurora Health Credit Group Series B-3

    5.00       8-15-2054        2,000,000        2,287,660  

Wisconsin HEFA Advocate Aurora Health Credit Group Series B-4

    5.00       8-15-2054        1,200,000        1,405,104  

 

The accompanying notes are an integral part of these financial statements.

 

 

32  |  Wells Fargo Short-Term Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue (continued)  

Wisconsin HEFA Advocate Aurora Health Credit Group Series C-4 (SIFMA Municipal Swap +0.65%) ±

    2.26 %       8-15-2054      $ 4,200,000      $ 4,243,932  

Wisconsin HEFA Ascension Health Alliance

    5.00       11-15-2033        12,000,000        13,991,040  

Wisconsin HEFA Beloit Health System Incorporated %%

    5.00       7-1-2025        1,000,000        1,177,010  

Wisconsin HEFA Beloit Health System Incorporated %%

    5.00       7-1-2026        1,060,000        1,273,261  

Wisconsin HEFA Benevolent Corporation Cedar Community

    5.00       6-1-2020        880,000        889,636  

Wisconsin HEFA St. Camillus Health System Incorporated

    5.00       11-1-2024        155,000        168,758  

Wisconsin HEFA St. Camillus Health System Incorporated

    5.00       11-1-2025        245,000        269,772  

Wisconsin HEFA St. Camillus Health System Incorporated

    5.00       11-1-2026        355,000        394,590  

Wisconsin HEFA Vernon Memorial Healthcare Incorporated

    5.00       3-1-2020        375,000        376,155  
            26,476,918  
         

 

 

 
Miscellaneous Revenue: 0.88%  

Waukesha County WI Anticipation Notes Series C

    3.00       5-1-2022        3,035,000        3,039,553  

Waukesha County WI Series B

    3.00       5-1-2021        11,890,000        11,907,241  

Wisconsin State Refunding Bond Series A

    5.00       5-1-2022        8,040,000        8,764,082  

Wisconsin State Refunding Bond Series A

    5.00       5-1-2023        8,015,000        9,038,804  
            32,749,680  
         

 

 

 
Resource Recovery Revenue: 0.38%  

Wisconsin PFA Series A-2

    1.45       10-1-2025        14,000,000        13,999,860  
         

 

 

 
            82,354,988  
         

 

 

 

Total Municipal Obligations (Cost $3,619,728,778)

 

     3,660,959,720  
         

 

 

 

Closed End Municipal Bond Fund Obligations: 0.21%

 

Massachusetts: 0.21%  

Nuveen Massachusetts AMT-Free Municipal Income Fund Variable Rate Demand Preferred Shares 1.93% 144A

         3,000,000        3,000,000  

Nuveen Massachusetts Dividend Advantage Municipal Income Fund Variable Rate Demand Preferred Shares 1.93% 144A

         5,000,000        5,000,000  

Total Closed End Municipal Bond Fund Obligations (Cost $8,000,000)

 

     8,000,000  
  

 

 

 
         
    Yield            Shares         
Short-Term Investments: 0.11%  

Investment Companies: 0.11%

 

Wells Fargo Municipal Cash Management Money Market Fund Institutional Class (l)(u)##

    1.45          4,002,911        4,004,512  
         

 

 

 

Total Short-Term Investments (Cost $4,004,512)

 

     4,004,512  
         

 

 

 

 

Total investments in securities (Cost $3,631,733,290)     99.07        3,672,964,232  

Other assets and liabilities, net

    0.93          34,370,643  
 

 

 

      

 

 

 
Total net assets     100.00      $ 3,707,334,875  
 

 

 

      

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  33


Portfolio of investments—December 31, 2019 (unaudited)

 

##

All or a portion of this security is segregated for when-issued securities.

%%

The security is purchased on a when-issued basis.

±

Variable rate investment. The rate shown is the rate in effect at period end.

(m)

The security is an auction-rate security which has an interest rate that resets at predetermined short-term intervals through a Dutch auction. The rate shown is the rate in effect at period end.

144A

The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933.

¤

The security is issued in zero coupon form with no periodic interest payments.

øø

The interest rate is determined and reset by the issuer periodically depending upon the terms of the security. The rate shown is the rate in effect at period end.

ø

Variable rate demand notes are subject to a demand feature which reduces the effective maturity. The maturity date shown represents the final maturity date of the security. The interest rate is determined and reset by the issuer daily, weekly, or monthly depending upon the terms of the security. The rate shown is the rate in effect at period end.

(l)

The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940.

(u)

The rate represents the 7-day annualized yield at period end.

Abbreviations:

 

AGC

Assured Guaranty Corporation

 

AGM

Assured Guaranty Municipal

 

Ambac

Ambac Financial Group Incorporated

 

AMT

Alternative minimum tax

 

BAM

Build America Mutual Assurance Company

 

BAN

Bond anticipation notes

 

CAB

Capital appreciation bond

 

CDA

Community Development Authority

 

ECFA

Educational & Cultural Facilities Authority

 

EDA

Economic Development Authority

 

EDFA

Economic Development Finance Authority

 

FHA

Federal Housing Administration

 

FHLMC

Federal Home Loan Mortgage Corporation

 

FNMA

Federal National Mortgage Association

 

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

Department of Housing and Urban Development

 

IDA

Industrial Development Authority

 

LIBOR

London Interbank Offered Rate

 

LIQ

Liquidity agreement

 

LOC

Letter of credit

 

MFHR

Multifamily housing revenue

 

National

National Public Finance Guarantee Corporation

 

PCFA

Pollution Control Financing Authority

 

PCR

Pollution control revenue

 

PFA

Public Finance Authority

 

RDA

Redevelopment Authority

 

SIFMA

Securities Industry and Financial Markets Association

 

SPA

Standby purchase agreement

 

TTFA

Transportation Trust Fund Authority

 

The accompanying notes are an integral part of these financial statements.

 

 

34  |  Wells Fargo Short-Term Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

Investments in Affiliates

An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were either affiliated persons of the Fund at the beginning of the period or the end of the period were as follows:

 

   

Shares,

beginning of

period

   

Shares

purchased

   

Shares

sold

   

Shares,

end of

period

    Net
realized
gains
(losses)
    Net
change in
unrealized
gains
(losses)
    Income
from
affiliated
securities
   

Value,

end of
period

   

% of

net
assets

 
Short-Term Investments                                                      

Investment Companies

                 

Wells Fargo Municipal Cash Management Money Market Fund Institutional Class

    9,941,476       560,118,071       (566,056,636     4,002,911     $ (3,299   $ 0     $ 106,143     $ 4,004,512       0.11

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  35


Statement of assets and liabilities—December 31, 2019 (unaudited)

 

         

Assets

 

Investments in unaffiliated securities, at value (cost $3,627,728,778)

  $ 3,668,959,720  

Investments in affiliated securities, at value (cost $4,004,512)

    4,004,512  

Cash

    28,483,969  

Receivable for investments sold

    3,296,969  

Receivable for Fund shares sold

    15,816,038  

Receivable for interest

    27,532,442  
 

 

 

 

Total assets

    3,748,093,650  
 

 

 

 

Liabilities

 

Payable for investments purchased

    18,050,986  

Payable for Fund shares redeemed

    19,596,613  

Management fee payable

    904,955  

Dividends payable

    1,019,908  

Administration fees payable

    295,118  

Distribution fee payable

    15,465  

Trustees’ fees and expenses payable

    4,157  

Accrued expenses and other liabilities

    871,573  
 

 

 

 

Total liabilities

    40,758,775  
 

 

 

 

Total net assets

  $ 3,707,334,875  
 

 

 

 

Net assets consist of

 

Paid-in capital

  $ 3,711,299,925  

Total distributable loss

    (3,965,050
 

 

 

 

Total net assets

  $ 3,707,334,875  
 

 

 

 

Computation of net asset value and offering price per share

 

Net assets – Class A

  $ 886,565,301  

Shares outstanding – Class A1

    89,270,983  

Net asset value per share – Class A

    $9.93  

Maximum offering price per share – Class A2

    $10.13  

Net assets – Class C

  $ 23,505,454  

Shares outstanding – Class C1

    2,366,434  

Net asset value per share – Class C

    $9.93  

Net assets – Class R6

  $ 664,860,252  

Shares outstanding – Class R61

    66,819,168  

Net asset value per share – Class R6

    $9.95  

Net assets – Administrator Class

  $ 30,582,876  

Shares outstanding – Administrator Class1

    3,077,630  

Net asset value per share – Administrator Class

    $9.94  

Net assets – Institutional Class

  $ 2,101,820,992  

Shares outstanding – Institutional Class1

    211,257,905  

Net asset value per share – Institutional Class

    $9.95  

 

1 

The Fund has an unlimited number of authorized shares.

 

2 

Maximum offering price is computed as 100/98 of net asset value. On investments of $50,000 or more, the offering price is reduced.

 

The accompanying notes are an integral part of these financial statements.

 

 

36  |  Wells Fargo Short-Term Municipal Bond Fund


Statement of operations—six months ended December 31, 2019 (unaudited)

 

         

Investment income

 

Interest

  $ 42,710,303  

Income from affiliated securities

    106,143  
 

 

 

 

Total investment income

    42,816,446  
 

 

 

 

Expenses

 

Management fee

    6,468,234  

Administration fees

 

Class A

    757,516  

Class C

    22,752  

Class R6

    111,543  

Administrator Class

    16,478  

Institutional Class

    860,311  

Shareholder servicing fees

 

Class A

    1,183,618  

Class C

    35,549  

Administrator Class

    41,196  

Distribution fee

 

Class C

    106,579  

Custody and accounting fees

    74,353  

Professional fees

    25,826  

Registration fees

    105,757  

Shareholder report expenses

    19,510  

Trustees’ fees and expenses

    10,804  

Other fees and expenses

    25,711  
 

 

 

 

Total expenses

    9,865,737  

Less: Fee waivers and/or expense reimbursements

 

Fund-level

    (609,252

Class A

    (358,018

Class C

    (10,614

Administrator Class

    (7,490
 

 

 

 

Net expenses

    8,880,363  
 

 

 

 

Net investment income

    33,936,083  
 

 

 

 

Realized and unrealized gains (losses) on investments

 

Net realized losses on

 

Unaffiliated securities

    (785,086

Affiliated securities

    (3,299
 

 

 

 

Net realized losses on investments

    (788,385

Net change in unrealized gains (losses) on investments

    5,217,850  
 

 

 

 

Net realized and unrealized gains (losses) on investments

    4,429,465  
 

 

 

 

Net increase in net assets resulting from operations

  $ 38,365,548  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  37


Statement of changes in net assets

 

     Six months ended
December 31, 2019
(unaudited)
    Year ended
June 30, 2019
 

Operations

       

Net investment income

    $ 33,936,083       $ 75,850,167  

Net realized losses on investments

      (788,385       (1,493,623

Net change in unrealized gains (losses) on investments

      5,217,850         38,387,952  
 

 

 

 

Net increase in net assets resulting from operations

      38,365,548         112,744,496  
 

 

 

 

Distributions to shareholders from

 

 

Net investment income and net realized gains

 

Class A

      (7,333,113       (17,363,867

Class C

      (113,651       (356,754

Class R6

      (6,814,917       (9,948,747 )1  

Administrator Class

      (260,137       (627,989

Institutional Class

      (19,125,569       (48,911,304

Tax basis return of capital

 

Class A

      0         (55,677

Class C

      0         (2,136

Class R6

      0         (28,538 )1  

Administrator Class

      0         (1,978

Institutional Class

      0         (138,654
 

 

 

 

Total distributions to shareholders

      (33,647,387       (77,435,644
 

 

 

 

Capital share transactions

    Shares         Shares    

Proceeds from shares sold

 

Class A

    4,912,388       48,781,412       15,173,031       149,334,296  

Class C

    171,414       1,702,432       326,154       3,208,375  

Class R6

    13,767,311       137,000,844       115,656,991 1       1,137,354,364 1  

Administrator Class

    263,796       2,621,944       1,329,160       13,078,968  

Institutional Class

    25,392,856       252,689,257       96,293,045       949,084,420  
 

 

 

 
      442,795,889         2,252,060,423  
 

 

 

 

Reinvestment of distributions

       

Class A

    682,805       6,782,894       1,662,426       16,372,098  

Class C

    10,067       100,006       32,936       324,400  

Class R6

    446,267       4,442,181       693,507 1       6,860,337 1  

Administrator Class

    25,290       251,364       62,343       614,431  

Institutional Class

    1,620,526       16,127,552       4,066,630       40,106,697  
 

 

 

 
      27,703,997         64,277,963  
 

 

 

 

Payment for shares redeemed

       

Class A

    (16,284,509     (161,748,442     (39,869,171     (392,102,587

Class C

    (1,280,958     (12,724,364     (1,785,847     (17,588,416

Class R6

    (26,636,041     (264,897,884     (37,108,867 )1       (367,046,299 )1  

Administrator Class

    (789,841     (7,850,557     (2,304,976     (22,689,537

Institutional Class

    (33,033,417     (328,711,644     (230,454,242     (2,266,785,603
 

 

 

 
      (775,932,891       (3,066,212,442
 

 

 

 

Net decrease in net assets resulting from capital share transactions

      (305,433,005       (749,874,056
 

 

 

 

Total decrease in net assets

      (300,714,844       (714,565,204
 

 

 

 

Net assets

       

Beginning of period

      4,008,049,719         4,722,614,923  
 

 

 

 

End of period

    $ 3,707,334,875       $ 4,008,049,719  
 

 

 

 

 

 

1 

For the period from July 31, 2018 (commencement of class operations) to June 30, 2019

 

The accompanying notes are an integral part of these financial statements.

 

 

38  |  Wells Fargo Short-Term Municipal Bond Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS A   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $9.92       $9.83       $9.85       $9.96       $9.93       $10.00  

Net investment income

    0.08       0.15       0.13       0.12       0.11       0.09  

Net realized and unrealized gains (losses) on investments

    0.01       0.10       (0.02     (0.11     0.04       (0.06
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.09       0.25       0.11       0.01       0.15       0.03  

Distributions to shareholders from

           

Net investment income

    (0.08     (0.16     (0.13     (0.12     (0.11     (0.09

Net realized gains

    0.00       0.00       0.00       0.00       (0.01     (0.01

Tax basis return of capital

    0.00       (0.00 )1       0.00       0.00       (0.00     0.00  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.08     (0.16     (0.13     (0.12     (0.12     (0.10

Net asset value, end of period

    $9.93       $9.92       $9.83       $9.85       $9.96       $9.93  

Total return2

    0.88     2.57     1.15     0.14     1.49     0.27

Ratios to average net assets (annualized)

           

Gross expenses

    0.75     0.76     0.77     0.76     0.75     0.75

Net expenses

    0.63     0.63     0.63     0.63     0.62     0.60

Net investment income

    1.56     1.59     1.34     1.23     1.11     0.89

Supplemental data

           

Portfolio turnover rate

    13     33     31     23     16     24

Net assets, end of period (000s omitted)

    $886,565       $991,514       $1,209,079       $1,619,974       $3,362,147       $2,228,977  

 

 

1

Amount is less than $0.005.

 

2

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  39


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS C   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $9.92       $9.83       $9.85       $9.96       $9.93       $10.00  

Net investment income

    0.04       0.08       0.06       0.05       0.04       0.01  

Net realized and unrealized gains (losses) on investments

    0.01       0.10       (0.02     (0.11     0.04       (0.06
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.05       0.18       0.04       (0.06     0.08       (0.05

Distributions to shareholders from

           

Net investment income

    (0.04     (0.09     (0.06     (0.05     (0.04     (0.01

Net realized gains

    0.00       0.00       0.00       0.00       (0.01     (0.01

Tax basis return of capital

    0.00       (0.00 )1       0.00       0.00       0.00       0.00  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.04     (0.09     (0.06     (0.05     (0.05     (0.02

Net asset value, end of period

    $9.93       $9.92       $9.83       $9.85       $9.96       $9.93  

Total return2

    0.50     1.81     0.40     (0.61 )%      0.73     (0.48 )% 

Ratios to average net assets (annualized)

           

Gross expenses

    1.50     1.51     1.52     1.51     1.50     1.50

Net expenses

    1.38     1.38     1.38     1.38     1.37     1.35

Net investment income

    0.82     0.84     0.59     0.49     0.35     0.14

Supplemental data

           

Portfolio turnover rate

    13     33     31     23     16     24

Net assets, end of period (000s omitted)

    $23,505       $34,381       $48,101       $62,796       $82,111       $103,146  

 

 

1

Amount is less than $0.005.

 

2

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

40  |  Wells Fargo Short-Term Municipal Bond Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

CLASS R6   Six months ended
December 31, 2019
(unaudited)
   

Year ended

June 30, 20191

 

Net asset value, beginning of period

    $9.94       $9.86  

Net investment income

    0.09       0.17  

Net realized and unrealized gains (losses) on investments

    0.01       0.08  
 

 

 

   

 

 

 

Total from investment operations

    0.10       0.25  

Distributions to shareholders from

   

Net investment income

    (0.09     (0.17

Tax basis return of capital

    0.00       (0.00 )2  
 

 

 

   

 

 

 

Total distributions to shareholders

    (0.09     (0.17

Net asset value, end of period

    $9.95       $9.94  

Total return3

    1.02     2.60

Ratios to average net assets (annualized)

   

Gross expenses

    0.38     0.38

Net expenses

    0.35     0.35

Net investment income

    1.86     1.94

Supplemental data

   

Portfolio turnover rate

    13     33

Net assets, end of period (000s omitted)

    $664,860       $787,524  

 

 

1 

For the period from July 31, 2018 (commencement of class operations) to June 30, 2019

 

2 

Amount is less than $0.005.

 

3 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  41


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
ADMINISTRATOR CLASS   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $9.93       $9.84       $9.86       $9.97       $9.95       $10.03  

Net investment income

    0.08       0.16       0.14       0.13       0.11 1       0.09  

Net realized and unrealized gains (losses) on investments

    0.01       0.09       (0.02     (0.11     0.03       (0.07
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.09       0.25       0.12       0.02       0.14       0.02  

Distributions to shareholders from

           

Net investment income

    (0.08     (0.16     (0.14     (0.13     (0.11     (0.09

Net realized gains

    0.00       0.00       0.00       0.00       (0.01     (0.01

Tax basis return of capital

    0.00       (0.00 )2       0.00       0.00       0.00       0.00  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.08     (0.16     (0.14     (0.13     (0.12     (0.10

Net asset value, end of period

    $9.94       $9.93       $9.84       $9.86       $9.97       $9.95  

Total return

    0.90     2.60     1.18     0.17     1.42     0.17

Ratios to average net assets (annualized)

           

Gross expenses

    0.69     0.70     0.71     0.70     0.66     0.68

Net expenses

    0.60     0.60     0.60     0.60     0.59     0.60

Net investment income

    1.60     1.62     1.36     1.27     1.08     0.89

Supplemental data

           

Portfolio turnover rate

    13     33     31     23     16     24

Net assets, end of period (000s omitted)

    $30,583       $35,517       $44,186       $68,621       $95,121       $511,894  

 

 

1

Calculated based upon average shares outstanding

 

2

Amount is less than $0.005.

 

3

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

42  |  Wells Fargo Short-Term Municipal Bond Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
INSTITUTIONAL CLASS   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $9.94       $9.85       $9.87       $9.98       $9.95       $10.02  

Net investment income

    0.09       0.18       0.16       0.15       0.13       0.11  

Net realized and unrealized gains (losses) on investments

    0.01       0.09       (0.02     (0.11     0.04       (0.06
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.10       0.27       0.14       0.04       0.17       0.05  

Distributions to shareholders from

           

Net investment income

    (0.09     (0.18     (0.16     (0.15     (0.13     (0.11

Net realized gains

    0.00       0.00       0.00       0.00       (0.01     (0.01

Tax basis return of capital

    0.00       (0.00 )1       0.00       0.00       0.00       0.00  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.09     (0.18     (0.16     (0.15     (0.14     (0.12

Net asset value, end of period

    $9.95       $9.94       $9.85       $9.87       $9.98       $9.95  

Total return2

    1.00     2.81     1.39     0.37     1.71     0.47

Ratios to average net assets (annualized)

           

Gross expenses

    0.42     0.43     0.44     0.43     0.42     0.42

Net expenses

    0.40     0.40     0.40     0.40     0.40     0.40

Net investment income

    1.79     1.80     1.58     1.48     1.33     1.09

Supplemental data

           

Portfolio turnover rate

    13     33     31     23     16     24

Net assets, end of period (000s omitted)

    $2,101,821       $2,159,113       $3,421,249       $3,427,060       $2,261,092       $1,895,713  

 

 

1

Amount is less than $0.005.

 

2

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  43


Notes to financial statements (unaudited)

 

1. ORGANIZATION

Wells Fargo Funds Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Wells Fargo Short-Term Municipal Bond Fund (the “Fund”) which is a diversified series of the Trust.

2. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Securities valuation

All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.

Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

Futures contracts that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.

Investments in registered open-end investment companies 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 in good faith by the Board of Trustees of the Fund. The Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities, unless the determination has been delegated to the Wells Fargo Asset Management Pricing Committee at Wells Fargo Funds Management, LLC (“Funds Management”). The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Valuation Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees receives reports on any valuation actions taken by the Valuation Committee or the Wells Fargo Asset Management Pricing Committee which may include items for ratification.

When-issued transactions

The Fund may purchase securities on a forward commitment or when-issued basis. The Fund records a when-issued transaction on the trade date and will segregate assets in an amount at least equal in value to the Fund’s commitment to purchase when-issued securities. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

Futures contracts

Futures contracts are agreements between the Fund and a counterparty to buy or sell a specific amount of a commodity, financial instrument or currency at a specified price and on a specified date. The Fund may buy and sell futures contracts in order to gain exposure to, or protect against, changes in interest rates and is subject to interest rate risk. 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 generally entered into on a regulated futures exchange and cleared through a clearinghouse associated with the exchange. With futures contracts, there is minimal counterparty risk to the Fund since futures contracts are exchange traded and the exchange’s clearinghouse, as the counterparty to all exchange traded futures, guarantees the futures contracts against default.

Upon entering into a futures contracts, the Fund is required to deposit either cash or securities (initial margin) with the broker in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are paid to or from the broker each day equal to the daily changes in the contract value. Such payments are recorded as unrealized gains or losses and, if any, shown as variation margin receivable (payable) in the Statement of Assets and Liabilities. Should the Fund fail to make requested variation margin payments, the broker can gain access to the initial margin to satisfy the Fund’s payment obligations. When the contracts are closed, a realized gain or loss is recorded in the Statement of Operations.

 

 

44  |  Wells Fargo Short-Term Municipal Bond Fund


Notes to financial statements (unaudited)

 

Security transactions and income recognition

Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. 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 been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Distributions to shareholders

Distributions to shareholders from net investment income are declared daily and paid monthly. Distributions from net realized gains, if any, are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.

Federal and other taxes

The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable and tax-exempt income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.

The 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. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

As of December 31, 2019, the aggregate cost of all investments for federal income tax purposes was $3,631,322,734 and the unrealized gains (losses) consisted of:

 

Gross unrealized gains

   $ 43,665,498  

Gross unrealized losses

     (2,024,000

Net unrealized gains

   $ 41,641,498  

As of June 30, 2019, the Fund had capital loss carryforwards which consisted of $43,260,519 in short-term capital losses.

Class allocations

The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.

3. FAIR VALUATION MEASUREMENTS

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:

 

 

Level 1 – quoted prices in active markets for identical securities

 

 

Level 2 – other significant observable inputs (including quoted prices for similar securities, 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 investments in securities are not necessarily an indication of the risk associated with investing in those securities.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  45


Notes to financial statements (unaudited)

 

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of December 31, 2019:

 

     Quoted prices
(Level 1)
    Other significant
observable inputs
(Level 2)
   

Significant
unobservable inputs

(Level 3)

    Total  

Assets

       

Investments in:

       

Municipal obligations

  $ 0     $ 3,660,959,720     $ 0     $ 3,660,959,720  

Closed end municipal bond fund obligations

    0       8,000,000       0       8,000,000  

Short-term investments

       

Investment companies

    4,004,512       0       0       4,004,512  

Total assets

  $ 4,004,512     $ 3,668,959,720     $ 0     $ 3,672,964,232  

Additional sector, industry or geographic detail is included in the Portfolio of Investments.

For the six months ended December 31, 2019, the Fund did not have any transfers into/out of Level 3.

4. TRANSACTIONS WITH AFFILIATES

Management fee

Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”), is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:

 

Average daily net assets    Management fee  

First $1 billion

     0.350

Next $4 billion

     0.325  

Next $3 billion

     0.290  

Next $2 billion

     0.265  

Over $10 billion

     0.255  

For the six months ended December 31, 2019, the management fee was equivalent to an annual rate of 0.33% of the Fund’s average daily net assets.

Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Funds Management. Wells Capital Management Incorporated, an affiliate of Funds Management and an indirect wholly owned subsidiary of Wells Fargo, is the subadviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.15% and declining to 0.05% as the average daily net assets of the Fund increase.

Administration fees

Under a class-level administration agreement, Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:

 

      Class-level
administration fee
 

Class A, Class C

     0.16

Class R6

     0.03  

Administrator Class

     0.10  

Institutional Class

     0.08  

 

 

46  |  Wells Fargo Short-Term Municipal Bond Fund


Notes to financial statements (unaudited)

 

Waivers and/or expense reimbursements

Funds Management has contractually waived and/or reimbursed management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Funds Management has waived fees and/or reimbursed expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Funds Management has committed through October 31, 2020 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s expenses at 0.63% for Class A shares, 1.38% for Class C shares, 0.35% for Class R6 shares, 0.60% for Administrator Class shares, and 0.40% for Institutional Class shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.

Distribution fee

The Trust has adopted a distribution plan for Class C shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Wells Fargo Funds Distributor, LLC (“Funds Distributor”), the principal underwriter, at an annual rate of 0.75% of the average daily net assets of Class C shares.

In addition, Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the six months ended December 31, 2019, Funds Distributor received $655 from the sale of Class A shares. No contingent deferred sales charges were incurred by Class A and Class C shares for the six months ended December 31, 2019.

Shareholder servicing fees

The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A, Class C, and Administrator Class of the Fund are charged a fee at an annual rate of 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of Wells Fargo.

Interfund transactions

The Fund may purchase or sell portfolio investment securities to certain other Wells Fargo affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended December 31, 2019 were $651,205,005 and $479,505,754, respectively.

6. BANK BORROWINGS

The Trust (excluding the money market funds), Wells Fargo Master Trust and Wells Fargo Variable Trust are parties to a $280,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the 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, an annual commitment fee equal to 0.25% of the unused balance is allocated to each participating fund.

For the six months ended December 31, 2019, there were no borrowings by the Fund under the agreement.

7. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and Trustees have been granted certain indemnification rights 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 Fund and, therefore, cannot be estimated.

8. NEW ACCOUNTING PRONOUNCEMENTS

In August 2018, FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 updates the disclosure requirements for fair value measurements by modifying or removing certain disclosures and adding certain new disclosures. The

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  47


Notes to financial statements (unaudited)

 

amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Management has adopted the removal and modification of disclosures early, as permitted, and will adopt the additional new disclosures at the effective date.

In March 2017, FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium and requires the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount and discounts will continue to be accreted to the maturity date of the security. ASU 2017-08 is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years. During the current reporting period, management of the Fund adopted the change in accounting policy which did not have a material impact to the Fund’s financial statements.

 

 

48  |  Wells Fargo Short-Term Municipal Bond Fund


Other information (unaudited)

 

PROXY VOTING INFORMATION

A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available, upon request, by calling 1-800-222-8222, visiting our website at wfam.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at wfam.com or by visiting the SEC website at sec.gov.

QUARTERLY PORTFOLIO HOLDINGS INFORMATION

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  49


Other information (unaudited)

 

BOARD OF TRUSTEES AND OFFICERS

Each of the Trustees and Officers1 listed in the table below acts in identical capacities for each fund in the Wells Fargo family of funds, which consists of 149 mutual funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information2. 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

 

Name and

year of birth

  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships

William R. Ebsworth

(Born 1957)

  Trustee,
since 2015
  Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Endowment (non-profit organization). Mr. Ebsworth is a CFA® charterholder.   N/A

Jane A. Freeman

(Born 1953)

 

Trustee,
since 2015;

Chair Liaison,
since 2018

  Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is a Board Member of The Ruth Bancroft Garden (non-profit organization). She is also an inactive Chartered Financial Analyst.   N/A

Isaiah Harris, Jr.

(Born 1952)

 

Trustee,
since 2009;

Audit Committee Chairman,

since 2019

  Retired. Chairman of the Board of CIGNA Corporation since 2009, and Director since 2005. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Child Evangelism Fellowship (non-profit). Mr. Harris is a certified public accountant (inactive status).   CIGNA Corporation

Judith M. Johnson

(Born 1949)

 

Trustee,
since 2008;

Audit Committee Chairman, from 2009 to 2018

  Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.   N/A

 

 

50  |  Wells Fargo Short-Term Municipal Bond Fund


Other information (unaudited)

 

Name and

year of birth

  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships

David F. Larcker

(Born 1950)

  Trustee,
since 2009
  James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.   N/A

Olivia S. Mitchell

(Born 1953)

 

Trustee,
since 2006;
Nominating and Governance Committee

Chair, since 2018

  International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993.   N/A

Timothy J. Penny

(Born 1951)

  Trustee,
since 1996;
Chairman,
since 2018
  President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.   N/A

James G. Polisson

(Born 1959)

  Trustee,
since 2018
  Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations.   N/A

Pamela Wheelock3

(Born 1959)

  Trustee, since January 2020; previously Trustee from January 2018 to July 2019   Board member of the Destination Medical Center Economic Development Agency, Rochester, Minnesota since 2019. Acting Commissioner, Minnesota Department of Human Services, July 2019 through September 2019. Human Services Manager (part-time), Minnesota Department of Human Services, October 2019 through December 2019. Chief Operating Officer, Twin Cities Habitat for Humanity from 2017 to 2019. Vice President of University Services, University of Minnesota from 2012 to 2016. Prior thereto, on the Board of Directors, Governance Committee and Finance Committee for the Minnesota Philanthropy Partners (Saint Paul Foundation) from 2012 to 2018, Interim Chief Executive Officer of Blue Cross Blue Shield of Minnesota from 2011 to 2012, Chairman of the Board from 2009 to 2012 and Board Director from 2003 to 2015. Vice President, Leadership and Community Engagement, Bush Foundation, Saint Paul, Minnesota (a private foundation) from 2009 to 2011. Executive Vice President and Chief Financial Officer, Minnesota Sports and Entertainment from 2004 to 2009 and Senior Vice President from 2002 to 2004. Executive Vice President of the Minnesota Wild Foundation from 2004 to 2008. Commissioner of Finance, State of Minnesota, from 1999 to 2002. Currently Board Chair of the Minnesota Wild Foundation since 2010.   N/A

 

*

Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  51


Other information (unaudited)

 

Officers

 

Name and
year of birth
  Position held and
length of service
  Principal occupations during past five years or longer
Andrew Owen
(Born 1960)
  President,
since 2017
  Executive Vice President of Wells Fargo & Company and Head of Affiliated Managers, Wells Fargo Asset Management, since 2014. In addition, Mr. Owen is currently President, Chief Executive Officer and Director of Wells Fargo Funds Management, LLC since 2017. Prior thereto, Executive Vice President responsible for marketing, investments and product development for Wells Fargo Funds Management, LLC, from 2009 to 2014.

Nancy Wiser1

(Born 1967)

  Treasurer,
since 2012
  Executive Vice President of Wells Fargo Funds Management, LLC since 2011. Chief Operating Officer and Chief Compliance Officer at LightBox Capital Management LLC, from 2008 to 2011.

Michelle Rhee4

(Born 1966)

  Chief Legal Officer,
since 2019
  Secretary of Wells Fargo Funds Management, LLC, Chief Legal Counsel of Wells Fargo Asset Management and Assistant General Counsel of Wells Fargo Bank, N.A. since 2018. Associate General Counsel and Managing Director of Bank of America Corporation from 2004 to 2018.

Catherine Kennedy5

(Born 1969)

  Secretary,
since 2019
  Vice President of Wells Fargo Funds Management, LLC and Senior Counsel of the Wells Fargo Legal Department since 2010. Vice President and Senior Counsel of Evergreen Investment Management Company, LLC from 1998 to 2010.

Michael H. Whitaker

(Born 1967)

  Chief Compliance Officer,
since 2016
  Chief Compliance Officer of Wells Fargo Asset Management since 2016. Senior Vice President and Chief Compliance Officer for Fidelity Investments from 2007 to 2016.

David Berardi

(Born 1975)

  Assistant Treasurer,
since 2009
  Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.

Jeremy DePalma1

(Born 1974)

  Assistant Treasurer,
since 2009
  Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.

 

 

1

Nancy Wiser acts as Treasurer of 64 funds in the Fund Complex. Jeremy DePalma acts as Treasurer of 85 funds and Assistant Treasurer of 64 funds in the Fund Complex.

 

2

The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at wfam.com.

 

3 

Pamela Wheelock was re-appointed to the Board effective January 1, 2020.

 

4 

Michelle Rhee became Chief Legal Officer effective October 22, 2019.

 

5 

Catherine Kennedy became Secretary effective October 22, 2019.

 

 

52  |  Wells Fargo Short-Term Municipal Bond Fund


Appendix (unaudited)

 

Effective on or about May 1, 2020, if you purchase Fund shares through a Janney Montgomery Scott LLC (“Janney”) brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge (“CDSC”), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in the Fund’s Prospectus or SAI.

 

Front-end sales charge* waivers on Class A shares available at Janney
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).
Shares purchased by employees and registered representatives of Janney or its affiliates and their family members as designated by Janney.
Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within ninety (90) days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., right of reinstatement).
Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
Shares acquired through a right of reinstatement.
Class C shares that are no longer subject to a contingent deferred sales charge and are converted to Class A shares of the same fund pursuant to Janney’s policies and procedures.
CDSC waivers on Class A and Class C shares available at Janney
Shares sold upon the death or disability of the shareholder.
Shares sold as part of a systematic withdrawal plan as described in the Fund’s Prospectus.
Shares purchased in connection with a return of excess contributions from an IRA account.
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRS regulations.
Shares sold to pay Janney fees but only if the transaction is initiated by Janney.
Shares acquired through a right of reinstatement.
Shares exchanged into the same share class of a different fund.
Front-end sales charge* discounts available at Janney; breakpoints, rights of accumulation and/or letters of intent
Breakpoints as described in the Fund’s Prospectus.
Rights of accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Janney. Eligible fund family assets not held at Janney may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.
Letters of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Janney Montgomery Scott may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.

 

*

Also referred to as an “initial sales charge.”

 

 

Wells Fargo Short-Term Municipal Bond Fund  |  53


 

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LOGO

For more information

More information about Wells Fargo Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:

Wells Fargo Funds

P.O. Box 219967

Kansas City, MO 64121-9967

Website: wfam.com

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

 

LOGO

 

This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-222-8222 or visit the Fund’s website at wfam.com. Read the prospectus carefully before you invest or send money.

Wells Fargo Asset Management (WFAM) is the trade name for certain investment advisory/management firms owned by Wells Fargo & Company. These firms include but are not limited to Wells Capital Management Incorporated and Wells Fargo Funds Management, LLC. Certain products managed by WFAM entities are distributed by Wells Fargo Funds Distributor, LLC (a broker-dealer and Member FINRA).

This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind—including a recommendation for any specific investment, strategy, or plan.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE     MAY LOSE VALUE


 

© 2020 Wells Fargo & Company. All rights reserved.

PAR-0120-02396 02-20

SA256/SAR256 12-19

 

 



LOGO

Semi-Annual Report

December 31, 2019

 

Wells Fargo

Ultra Short-Term Municipal Income Fund

 

 

 

 

Beginning on January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, paper copies of the Wells Fargo Funds’ annual and semi-annual shareholder reports issued after this date will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-222-8222 or by enrolling at wellsfargo.com/advantagedelivery.

You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call 1-800-222-8222. Your election to receive reports in paper will apply to all Wells Fargo Funds held in your account with your financial intermediary or, if you are a direct investor, to all Wells Fargo Funds that you hold.


 

 

Reduce clutter.

Save trees.

Sign up for electronic delivery of prospectuses and shareholder reports at wellsfargo.com/advantagedelivery

 

The views expressed and any forward-looking statements are as of December 31, 2019, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Asset Management. Discussions of individual securities, or the markets generally, or any Wells Fargo Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Asset Management and the Fund disclaim any obligation to publicly update or revise any views expressed or forward-looking statements.

 

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE    MAY LOSE VALUE


 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  1


Letter to shareholders (unaudited)

 

LOGO

Andrew Owen

President

Wells Fargo Funds

“After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July.”

Dear Shareholder:

We are pleased to offer you this semi-annual report for the Wells Fargo Ultra Short-Term Municipal Income Fund for the six-month period that ended December 31, 2019. Despite periods of market volatility, the year was strongly positive for financial markets as supportive central banks more than offset concerns over slowing global economic growth and international trade tensions.

Overall, both fixed-income and equity investors enjoyed healthy returns. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 10.92% and international stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned 6.96%. The MSCI EM Index (Net)3 gained 7.09%. For bond investors, the Bloomberg Barclays U.S. Aggregate Bond Index4 added 2.45%, the Bloomberg Barclays Global Aggregate ex-USD Index5 returned 0.09%, the Bloomberg Barclays Municipal Bond Index6 gained 2.32%, and the ICE BofA U.S. High Yield Index7 added 3.86%.

Sentiment turned positive, driven by central bank support.

After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July. The gains, primarily driven by geopolitical and monetary policy events, pushed equity markets to new highs. European Central Bank President Mario Draghi indicated the bank was ready to cut rates or buy more assets to prop up inflation if needed. President Trump backed off of tariff threats against Mexico and China. The U.S. Federal Reserve (Fed) implemented a 0.25% federal funds rate cut in July.

Throughout the summer, U.S.-China trade tensions simmered. Major U.S. stock market indices closed July with the worst weekly results of the year. Bond prices gained as Treasury yields fell to multiyear lows, and the yield curve inverted at multiple points along the 30-year arc.

Evidence of a continued global economic slowdown mounted, and central banks in China, New Zealand, and Thailand cut interest rates. Industrial and manufacturing data declined in China, Canada, Japan, and Germany. Adding to global uncertainty, Italy’s prime minister resigned, many feared a crackdown in Hong Kong as protestors sustained their calls for reform, and Boris Johnson planned to suspend Parliament as Brexit’s deadline neared.

In the U.S., the Fed cut interest rates a second time in September. U.S. manufacturing data disappointed investors. The U.S. Congress announced it would pursue an impeachment investigation of President Trump. Meanwhile, the Brexit impasse showed no signs of resolution. Officials in China warned of the negative economic impact of tariffs and trade restrictions. Although the S&P 500 Index finished the third quarter with the best year-to-date returns in more than 20 years, concerns about future returns remained.

 

 

 

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 Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the United States. 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. You cannot invest directly in an index.

 

3 

The MSCI Emerging Markets (EM) Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index.

 

4

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index.

 

5

The Bloomberg Barclays Global Aggregate ex-USD Index is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S. dollar-denominated debt market. You cannot invest directly in an index.

 

6 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

7

The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2020. ICE Data Indices, LLC. All rights reserved.

 

 

2  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Letter to shareholders (unaudited)

 

The fourth quarter started on a strong note, with a relaxing of U.S.-China trade tensions in October along with renewed optimism for a U.K. Brexit deal and positive macroeconomic data. The initial estimate of U.S. third-quarter gross domestic product growth was a 1.9% annualized rate, while the U.S. unemployment rate fell to a 50-year low of 3.5% in September. However, despite resilience among U.S. consumers, business confidence declined while manufacturing activity contracted. Concerned with a potential economic slowdown, the Fed lowered interest rates another quarter point in late October, its third rate cut in four months. This helped push the S&P 500 Index to a new all-time high, while emerging market equities rallied and global bonds declined overall, reflecting a broad pickup in risk appetite.

Equity markets continued to rally in November despite ongoing geopolitical risks. Hopes for a U.S.-China trade deal buoyed investor confidence. U.S. business sentiment improved slightly, and manufacturing and services activity picked up. Throughout the month, central bank actions were on hold. With that positive backdrop, developed market equities outpaced those in emerging markets, and U.S. stocks outperformed non-U.S. stocks overall. While consumer confidence and purchasing manager activity rose in the eurozone, China reported weakening manufacturing and consumer data. Bond yields rose marginally, leading to slightly negative returns for global government and investment-grade corporate bonds.

Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal, with some details to be worked out. That, along with the landslide election win by the pro-Brexit U.K. Conservative Party and ongoing central bank support, gave investors a greater sense of certainty. U.S. economic indicators were broadly positive, with the exception of manufacturing activity and business confidence. Consumer confidence was resilient, fed by a robust labor market, tame inflation, and lower interest rates, which boosted housing affordability and homebuyer activity. The impeachment of U.S. President Donald Trump, while historically noteworthy, had little impact on markets. Meanwhile, slowing Chinese economic activity, due in part to the trade war, led to further government stimulus at year-end through lower reserve ratios, allowing banks to lend more money.

Don’t let short-term uncertainty derail long-term investment goals.

Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.

Thank you for choosing to invest with Wells Fargo Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.

Sincerely,

 

LOGO

Andrew Owen

President

Wells Fargo Funds

 

“Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal”

 

 

For further information about your Fund, contact your investment professional, visit our website at wfam.com,

or call us directly at 1-800-222-8222.

 

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  3


Performance highlights (unaudited)

 

Investment objective    

The Fund seeks current income exempt from federal income tax, consistent with capital preservation.    

Manager    

Wells Fargo Funds Management, LLC    

Subadviser    

Wells Capital Management Incorporated    

Portfolio managers    

Wendy Casetta    

Bruce R. Johns    

James Randazzo    

Average annual total returns (%) as of December 31, 2019    

 

 
        Including sales charge     Excluding sales charge     Expense ratios1 (%)  
 
    Inception date   1 year     5 year     10 year     1 year     5 year     10 year     Gross     Net2  
                   
Class A (SMAVX)   10-2-2000     -0.39       0.30       0.53       1.64       0.70       0.73       0.77       0.67  
                   
Class C (WFUSX)   3-31-2008     0.00       -0.04       0.01       1.00       -0.04       0.01       1.52       1.42  
                   
Class R6 (WUSRX)3   7-31-2018                       2.00       1.02       1.04       0.39       0.32  
                   
Administrator Class (WUSMX)4   7-30-2010                       1.71       0.77       0.80       0.71       0.60  
                   
Institutional Class (SMAIX)   7-31-2000                       2.05       1.03       1.04       0.44       0.37  
                   
Ultra Short-Term Municipal Income Blended Index5                         2.08       0.99       0.75              
                   
Bloomberg Barclays 1-Year Municipal Bond Index6                         2.46       1.20       1.10              
                   
iMoneyNet Tax-Free National Institutional Money Market Funds Average7                         1.69       0.78       0.40              

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, wfam.com.

Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.

For Class A shares, the maximum front-end sales charge is 2.00%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Class R6, Administrator Class, and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.

Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. 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). The Fund is exposed to high-yield securities risk and municipal securities risk. Consult the Fund’s prospectus for additional information on these and other risks. A portion of the Fund’s income may be subject to federal, state, and/ or local income taxes or the Alternative Minimum Tax (AMT). Any capital gains distributions may be taxable.

 

Please see footnotes on page 5.

 

 

4  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Performance highlights (unaudited)

 

Effective maturity distribution as of December 31, 20198    
LOGO
Credit quality as of December 31, 20199    
LOGO
 

 

 

 

 

 

1 

Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report.

 

2 

The manager has contractually committed through October 31, 2020, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.67% for Class A, 1.42% for Class C, 0.32% for Class R6, 0.60% for Administrator Class, and 0.37% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Without this cap, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses.

 

3 

Historical performance shown for Class R6 shares prior to their inception reflects the performance of the Institutional Class shares, and includes the higher expenses applicable to Institutional Class shares. If these expenses had not been included, returns for Class R6 shares would be higher.

 

4 

Historical performance shown for Administrator Class shares prior to their inception reflects the performance of Institutional Class shares, adjusted to reflect the higher expenses applicable to Administrator Class shares.

 

5 

Source: Wells Fargo Funds Management LLC. The Ultra Short-Term Municipal Income Blended Index is composed 50% of the Bloomberg Barclays 1-Year Municipal Bond Index and 50% of the iMoneyNet Tax-Free National Institutional Money Market Funds Average. You cannot invest directly in an index.

 

6 

The Bloomberg Barclays 1-Year Municipal Bond Index is the one-year component of the Bloomberg Barclays Municipal Bond Index, which is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

7 

iMoneyNet Tax-Free National Institutional Money Market Funds Average is the return of an unmanaged group of money market funds. You cannot invest directly in this average.

 

8 

Amounts are calculated based on the long-term total investments of the Fund. These amounts are subject to change and may have changed since the date specified.

 

9 

The credit quality distribution of portfolio holdings reflected in the chart is based on ratings from Standard & Poor’s, Moody’s Investors Service, and/ or Fitch Ratings Ltd. Credit quality ratings apply to the underlying holdings of the Fund and not to the Fund itself. The percentages of the Fund’s portfolio with the ratings depicted in the chart are calculated based on the total market value of fixed income securities held by the Fund. If a security was rated by all three rating agencies, the middle rating was utilized. If rated by two of three rating agencies, the lower rating was utilized, and if rated by one of the rating agencies, that rating was utilized. Standard & Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories. Standard & Poor’s rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody’s rates the creditworthiness of bonds, ranging from Aaa (highest) to C (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Moody’s rates the creditworthiness of short-term U.S. tax-exempt municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Credit quality distribution is subject to change and may have changed since the date specified.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  5


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 and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing 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 period from July 1, 2019 to December 31, 2019.

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) and contingent deferred sales charges. 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
account  value
7-1-2019
     Ending
account value
12-31-2019
     Expenses
paid during
the period¹
     Annualized net
expense ratio
 
         

Class A

           

Actual

   $ 1,000.00      $ 1,006.33      $ 3.38        0.67

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,021.77      $ 3.40        0.67
         

Class C

           

Actual

   $ 1,000.00      $ 1,002.53      $ 7.15        1.42

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,018.00      $ 7.20        1.42
         

Class R6

           

Actual

   $ 1,000.00      $ 1,008.09      $ 1.62        0.32

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,023.53      $ 1.63        0.32
         

Administrator Class

           

Actual

   $ 1,000.00      $ 1,006.68      $ 3.03        0.60

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.12      $ 3.05        0.60
         

Institutional Class

           

Actual

   $ 1,000.00      $ 1,008.89      $ 1.87        0.37

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,023.28      $ 1.88        0.37

 

 

1

Expenses paid is equal to the annualized net expense ratio of each class 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).

 

 

6  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Municipal Obligations: 96.65%

 

Alabama: 1.99%

 

Health Revenue: 0.06%  

Alabama Health Care Authority for Baptist Health Series B (AGC Insured) (m)

    1.69     11-15-2037      $ 1,025,000      $ 1,025,000  
         

 

 

 
Utilities Revenue: 1.93%  

Alabama Black Belt Energy Gas District Series A (Royal Bank of Canada LIQ)

    4.00       7-1-2046        18,635,000        19,296,729  

Alabama Black Belt Energy Gas District Series A (Royal Bank of Canada LIQ)

    4.00       8-1-2047        4,280,000        4,539,154  

Black Belt Energy Gas District Project 4 Series A-1

    4.00       6-1-2020        1,855,000        1,875,516  

Black Belt Energy Gas District Project 4 Series A-1

    4.00       6-1-2022        500,000        530,200  

Chatom AL Industrial Development Board Alabama Electric Series A (National Rural Utilities Cooperative Finance SPA) øø

    1.40       8-1-2037        5,945,000        5,945,476  
     32,187,075  
         

 

 

 
     33,212,075  
         

 

 

 

Alaska: 0.12%

 

Health Revenue: 0.12%  

Alaska IDA Loan Anticipation YKHC Project

    3.50       12-1-2020        2,000,000        2,002,400  
         

 

 

 

Arizona: 2.53%

 

Education Revenue: 0.05%  

Phoenix AZ IDA BASIS Schools Incorporated Project Series A 144A

    3.00       7-1-2020        790,000        792,860  
         

 

 

 
Health Revenue: 1.44%  

Maricopa County AZ IDA Series A

    5.00       1-1-2048        3,910,000        4,309,641  

Scottsdale AZ IDA Healthcare Series F (AGM Insured) (m)

    1.50       9-1-2045        19,725,000        19,725,000  
     24,034,641  
         

 

 

 
Industrial Development Revenue: 1.04%  

Chandler AZ IDA Intel Corporation Project

    2.70       12-1-2037        3,200,000        3,327,776  

Phoenix AZ IDA Various Republic Services Incorporated Projects

    1.45       12-1-2035        14,000,000        13,999,860  
     17,327,636  
         

 

 

 
     42,155,137  
         

 

 

 

California: 7.40%

 

GO Revenue: 2.31%  

California Refunding Bond Series A (SIFMA Municipal Swap +0.25%) ±

    1.86       5-1-2033        21,505,000        21,510,376  

California Series D (SIFMA Municipal Swap +0.29%) ±

    1.90       12-1-2028        16,910,000        16,911,691  
     38,422,067  
         

 

 

 
Health Revenue: 2.43%  

California Statewide CDA Health Facilities Catholic Series D (AGM Insured) (m)

    1.65       7-1-2041        14,000,000        14,000,000  

California Statewide CDA Health Facilities Catholic Series F (AGM Insured) (m)

    1.67       7-1-2040        15,025,000        15,025,000  

Palomar CA Pomerado Health Care District Certificate of Participation Series A (AGM Insured) (m)

    2.39       11-1-2036        9,625,000        9,625,000  

Palomar CA Pomerado Health Care District Certificate of Participation Series B (AGM Insured) (m)

    2.35       11-1-2036        950,000        950,000  

Palomar CA Pomerado Health Care District Certificate of Participation Series C (AGM Insured) (m)

    2.32       11-1-2036        825,000        825,000  
     40,425,000  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  7


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Housing Revenue: 0.52%  

California Municipal Finance Authority Housing Revenue Dino Papavero Apartments Project

    1.50 %       6-1-2022      $ 8,700,000      $ 8,705,916  
         

 

 

 
Miscellaneous Revenue: 2.14%  

California Infrastructure & Economic Development Bank The J. Paul Getty Trust Series A-1 (1 Month LIBOR +0.33%) ±

    1.53       10-1-2047        5,000,000        5,006,350  

California Infrastructure & Economic Development Bank The J. Paul Getty Trust Series A-2 (3 Month LIBOR +0.37%) ±

    1.71       4-1-2038        25,640,000        25,644,102  

California Infrastructure & Economic Development Bank The J. Paul Getty Trust Series B-2 (1 Month LIBOR +0.20%) ±

    1.40       10-1-2047        5,000,000        4,999,600  
     35,650,052  
         

 

 

 
     123,203,035  
         

 

 

 

Colorado: 0.41%

 

Health Revenue: 0.11%  

Colorado Health Facilities Authority Catholic Health Initiatives Series B-3

    4.00       1-1-2024        530,000        566,501  

Denver CO Health & Hospital Authority Refunding Bond Series A 144A

    5.00       12-1-2020        1,175,000        1,212,823  
     1,779,324  
         

 

 

 
Tax Revenue: 0.03%  

Pueblo CO Urban Renewal Authority Regional Tourism Act Project

    2.75       6-1-2020        545,000        545,921  
         

 

 

 
Transportation Revenue: 0.27%  

Colorado E-470 Public Highway Authority Series A (1 Month LIBOR +0.42%) ±

    1.62       9-1-2039        4,500,000        4,499,640  
         

 

 

 
     6,824,885  
         

 

 

 
Connecticut: 0.45%  
Education Revenue: 0.07%  

Connecticut Higher Education Supplemental Loan Authority Chesla Loan Program Series B

    5.00       11-15-2021        545,000        578,087  

Connecticut Higher Education Supplemental Loan Authority Chesla Loan Program Series B

    5.00       11-15-2023        440,000        492,246  
     1,070,333  
         

 

 

 
Housing Revenue: 0.38%  

Connecticut HFA Housing Mortgage Finance Program Series A

    2.40       11-15-2020        980,000        989,428  

Connecticut HFA Housing Mortgage Finance Program Series F

    1.55       5-15-2020        800,000        800,280  

Connecticut HFA Series 25

    2.10       6-15-2020        930,000        931,944  

Connecticut HFA Series 25

    2.30       6-15-2021        950,000        958,388  

Connecticut HFA Series 25

    2.50       6-15-2022        840,000        856,019  

Connecticut HFA Subordinate Bond Series E-3 (GNMA/FNMA/FHLMC Insured)

    1.50       11-15-2047        1,805,000        1,805,325  
     6,341,384  
         

 

 

 
     7,411,717  
         

 

 

 

Florida: 2.18%

 

Education Revenue: 0.05%  

Florida HEFAR Florida Institute of Technology

    5.00       10-1-2023        500,000        558,005  

Florida HEFAR Florida Institute of Technology

    5.00       10-1-2024        250,000        285,388  
     843,393  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

8  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue: 0.17%  

Indian River County FL School District TAN

    2.25 %       4-30-2020      $ 2,890,000      $ 2,900,346  
         

 

 

 
Health Revenue: 0.15%  

Miami FL HFFA Miami Jewish Health Systems Incorporate Project

    5.00       7-1-2020        390,000        392,005  

Miami-Dade County FL Health Facilities Authority Miami Children’s Hospital Project Series A

    5.25       8-1-2021        290,000        296,774  

North Broward FL Hospital District Series B

    5.00       1-1-2020        780,000        780,000  

North Broward FL Hospital District Series B

    5.00       1-1-2021        925,000        955,442  
     2,424,221  
         

 

 

 
Housing Revenue: 0.88%  

Escambia County FL HFA Springhill Apartments LLC (HUD Insured)

    1.35       12-1-2022        2,000,000        1,999,940  

Florida Housing Finance Corporation Series 1 (GNMA/FNMA/FHLMC Insured)

    1.95       1-1-2021        1,470,000        1,479,261  

Florida Housing Finance Corporation Series 1 (GNMA/FNMA/FHLMC Insured)

    2.00       7-1-2021        1,290,000        1,302,152  

Florida Housing Finance Corporation Series 1 (GNMA/FNMA/FHLMC Insured)

    2.05       1-1-2022        945,000        957,758  

Jacksonville FL HFA Desert-Silver LLC Project

    2.25       12-1-2021        7,250,000        7,296,980  

Pinellas County FL HFA ø

    1.85       1-1-2022        1,640,000        1,640,000  
     14,676,091  
         

 

 

 
Miscellaneous Revenue: 0.47%  

Pasco County FL School Board Certificate of Participation Series B (Ambac Insured) (m)

    1.50       8-1-2030        7,825,000        7,825,000  
         

 

 

 
Resource Recovery Revenue: 0.03%  

Lee County FL Solid Waste System

    5.00       10-1-2020        470,000        481,412  
         

 

 

 
Transportation Revenue: 0.43%  

Florida Development Finance Corporation Surface Series T

    1.90       1-1-2049        7,200,000        7,207,848  
         

 

 

 
     36,358,311  
         

 

 

 

Georgia: 4.48%

 

Housing Revenue: 2.81%  

Atlanta GA Urban Residential Finance Authority Bethel Towers I LP Apartments Project

    2.07       7-1-2021        3,500,000        3,512,355  

Clayton County GA Housing Authority Renaissance at Garden Walk Apartments Project

    2.30       6-1-2022        13,000,000        13,148,070  

Douglas County GA Housing Authority Douglass Village Apartments Project

    2.25       12-1-2021        9,500,000        9,567,640  

Fulton County GA Housing Authority Residences Maggie Capitol Series A

    2.00       3-1-2021        8,735,000        8,744,696  

Macon-Bibb County GA Housing Authority Hallmark Portfolio

    2.04       4-1-2021        11,765,000        11,783,353  
     46,756,114  
         

 

 

 
Industrial Development Revenue: 0.45%  

Monroe County GA PCR Georgia Power Company Plant Scherer Project

    2.35       10-1-2048        7,430,000        7,502,517  
         

 

 

 
Utilities Revenue: 1.22%  

Burke County GA Development Authority Georgia Power Company Plant Vogtle Project Fifth Series 1995

    2.05       10-1-2032        1,850,000        1,864,190  

Burke County GA Development Authority Georgia Power Company Plant Vogtle Project First Series 1996

    2.35       10-1-2032        5,315,000        5,354,969  

Burke County GA Development Authority Georgia Power Company Plant Vogtle Project First Series 2008

    1.65       11-1-2048        1,955,000        1,957,248  

Burke County GA Development Authority Georgia Power Company Plant Vogtle Project

    1.55       12-1-2049        4,000,000        3,989,560  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  9


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Utilities Revenue (continued)  

Burke County GA Development Authority Oglethorpe Power Corporation Vogtle Project Series A

    2.40 %       1-1-2040      $ 4,535,000      $ 4,544,614  

Monroe County GA Development Authority Power Company Plant Scherer Project

    2.05       7-1-2049        2,545,000        2,564,520  
     20,275,101  
         

 

 

 
     74,533,732  
         

 

 

 
Guam: 0.13%  
Airport Revenue: 0.13%  

Guam International Airport Authority AMT Refunding Bond Series A

    3.00       10-1-2020        50,000        50,467  

Guam International Airport Authority AMT Refunding Bond Series A

    3.00       10-1-2021        55,000        56,146  

Guam International Airport Authority AMT Refunding Bond Series A

    5.00       10-1-2022        1,000,000        1,088,890  

Guam International Airport Authority AMT Refunding Bond Series A

    5.00       10-1-2023        825,000        925,172  
     2,120,675  
         

 

 

 
Hawaii: 1.20%  
GO Revenue: 1.08%  

Honolulu HI Rail Transit Project Series H (SIFMA Municipal Swap +0.31%) ±

    1.92       9-1-2024        7,820,000        7,820,469  

Honolulu HI Rail Transit Project Series H (SIFMA Municipal Swap +0.32%) ±

    1.93       9-1-2025        7,035,000        7,035,352  

Honolulu HI Rail Transit Project Series H (SIFMA Municipal Swap +0.32%) ±

    1.93       9-1-2026        3,125,000        3,125,187  
     17,981,008  
         

 

 

 
Health Revenue: 0.12%  

Hawaii Department of Budget & Finance Queens Health System Series B (SIFMA Municipal Swap +0.45%) ±

    2.06       7-1-2039        2,070,000        2,070,000  
         

 

 

 
     20,051,008  
         

 

 

 

Idaho: 0.34%

 

Housing Revenue: 0.34%  

Idaho Housing & Finance Association Series A (FNMA LOC) ø

    1.79       1-1-2038        5,710,000        5,710,000  
         

 

 

 

Illinois: 6.44%

 

Education Revenue: 0.12%  

Illinois Educational Facilities Authority University of Chicago Series B

    1.88       7-1-2025        2,000,000        2,001,520  
         

 

 

 
GO Revenue: 2.21%  

Chicago IL Refunding Bond Project Series B

    5.00       1-1-2020        2,575,000        2,575,000  

Chicago IL Series C

    5.00       1-1-2020        1,005,000        1,005,000  

Chicago IL Series C

    5.00       1-1-2021        1,565,000        1,623,609  

Illinois

    5.00       1-1-2020        6,315,000        6,315,000  

Illinois

    5.00       2-1-2020        2,375,000        2,381,317  

Illinois

    5.00       2-1-2021        3,115,000        3,223,932  

Illinois

    5.00       11-1-2021        5,380,000        5,680,043  

Illinois

    5.00       1-1-2022        5,915,000        6,265,050  

Lake County IL Water Sewerage System Grainger Incorporated Project (Northern Trust Company LIQ) ø

    1.85       4-1-2021        1,500,000        1,500,000  

Waukegan IL Series 2018B (AGM Insured)

    3.00       12-30-2020        2,340,000        2,378,376  

Waukegan IL Series 2018B (AGM Insured)

    4.00       12-30-2021        800,000        841,680  

Whiteside & Lee County IL Community Unit School District 5 Series A (BAM Insured)

    4.00       12-1-2022        1,375,000        1,465,173  

Whiteside & Lee County IL Community Unit School District 5 Series A (BAM Insured)

    4.00       12-1-2023        1,435,000        1,554,980  
     36,809,160  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

10  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue: 0.23%  

Illinois Finance Authority Presbyterian Homes Obligated Group Series B (1 Month LIBOR +1.35%) ±

    2.55 %       5-1-2036      $ 3,910,000      $ 3,916,999  
         

 

 

 
Housing Revenue: 0.62%  

Chicago IL Multifamily Housing Mark Twain Apartments Project

    2.20       6-1-2021        10,325,000        10,354,839  
         

 

 

 
Miscellaneous Revenue: 0.82%  

Chicago IL Board of Education Series B

    5.00       12-1-2022        1,500,000        1,614,150  

Chicago IL Board of Education Series B

    5.00       12-1-2023        1,150,000        1,261,423  

Illinois Refunding Bond

    5.00       8-1-2022        2,290,000        2,463,422  

Illinois Series D

    5.00       11-1-2021        7,820,000        8,256,121  
     13,595,116  
         

 

 

 
Tax Revenue: 2.35%  

Illinois Series A

    5.00       6-1-2021        1,455,000        1,518,729  

Metropolitan Pier & Exposition Authority McCormick Place Project Non-Callable Bond Series B

    5.00       12-15-2022        5,925,000        6,385,372  

Regional Transportation Authority Illinois Series B-RMKT 1 ø

    1.45       6-1-2025        31,155,000        31,155,000  
     39,059,101  
         

 

 

 
Water & Sewer Revenue: 0.09%  

Chicago IL Waterworks Refunding Bond Series 2017-2

    5.00       11-1-2020        1,500,000        1,542,750  
         

 

 

 
     107,279,485  
         

 

 

 

Indiana: 1.70%

 

GO Revenue: 0.15%  

Hammond IN Local Public Improvement Bond Bank Advanced Funding Program Notes Series A %%

    2.25       6-30-2020        2,485,000        2,489,224  
         

 

 

 
Health Revenue: 0.65%  

Indiana HFFA Ascension Health Subordinate Bond Credit Group Series A-3

    1.35       11-1-2027        585,000        585,374  

Indiana HFFA Ascension Health Subordinate Bond Credit Group Series A-5

    1.35       11-1-2027        5,950,000        5,953,808  

Indiana HFFA Ascension Health Subordinate Bond Credit Group Series A-8

    1.25       11-1-2027        1,030,000        1,030,093  

Indiana HFFA Ascension Health Subordinate Unrefunded Bond Credit Group Series A-9

    1.38       10-1-2027        3,165,000        3,166,582  
     10,735,857  
         

 

 

 
Miscellaneous Revenue: 0.90%  

Clark Pleasant IN Middle School Corporation Series B

    2.50       7-16-2020        3,000,000        3,019,110  

Indiana Bond Bank Advance Funding Program Series A

    4.00       1-3-2020        7,000,000        7,000,560  

Indianapolis IN Local Public Improvement Bond Bank Fieldhouse Project Series B

    1.45       6-1-2021        5,000,000        5,000,150  
     15,019,820  
         

 

 

 
     28,244,901  
         

 

 

 

Iowa: 1.22%

 

Industrial Development Revenue: 1.22%  

Iowa Finance Authority Midwestern Disaster Area Project (Korea Development Bank LOC) ø

    1.92       4-1-2022        20,300,000        20,300,000  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  11


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Kansas: 1.07%

 

Health Revenue: 0.21%  

Wichita KS HCFR Presbyterian Manors Obligated Group

    4.00 %       5-15-2020      $ 250,000      $ 251,370  

Wichita KS HCFR Presbyterian Manors Obligated Group

    4.00       5-15-2022        1,250,000        1,289,888  

Wichita KS HCFR Series I

    3.75       5-15-2023        1,845,000        1,882,546  
     3,423,804  
         

 

 

 
Housing Revenue: 0.50%  

Kansas HFA Forest Glen Apartments Project Series B

    1.66       7-1-2022        8,300,000        8,324,319  
         

 

 

 
Utilities Revenue: 0.36%  

Burlington KS Environmental Impact Series A ø

    1.75       9-1-2035        3,000,000        3,000,000  

Burlington KS Environmental Impact Series B ø

    1.75       9-1-2035        3,000,000        3,000,000  
     6,000,000  
         

 

 

 
     17,748,123  
         

 

 

 

Kentucky: 0.75%

 

Health Revenue: 0.10%  

Kentucky EDFA Owensboro Health Incorporated Series A

    5.00       6-1-2020        890,000        900,965  

Kentucky EDFA Owensboro Health Incorporated Series A

    5.00       6-1-2021        825,000        859,130  
     1,760,095  
         

 

 

 
Utilities Revenue: 0.65%  

Louisville & Jefferson Counties KY Metro Government PCR Series B

    2.55       11-1-2027        6,000,000        6,093,180  

Paducah KY Electric Plant Board Refunding Bond

    5.00       10-1-2021        2,305,000        2,447,057  

Paducah KY Electric Plant Board Refunding Bond

    5.00       10-1-2023        1,995,000        2,248,066  
     10,788,303  
         

 

 

 
     12,548,398  
         

 

 

 

Louisiana: 0.83%

 

Airport Revenue: 0.41%  

Louisiana Offshore Terminal Authority Deepwater Loop LLC Project Series B-1A

    2.00       10-1-2040        5,435,000        5,476,197  

New Orleans LA Aviation Board Series D-1

    5.00       1-1-2020        780,000        780,000  

New Orleans LA Aviation Board Series D-2

    5.00       1-1-2021        590,000        611,500  
     6,867,697  
         

 

 

 
Housing Revenue: 0.42%  

Louisiana Housing Corporation Hollywood Acres & Hollywood Heights Project Series 2019

    1.44       12-1-2023        4,000,000        4,002,880  

Louisiana Housing Corporation Pine Trace Homes Project

    2.40       5-1-2021        3,000,000        3,010,320  
     7,013,200  
         

 

 

 
     13,880,897  
         

 

 

 

Maine: 0.06%

 

Education Revenue: 0.06%  

Maine Student Loan Authority AMT Refunding Student Loan Revenue Bond Class A Series 2019A-1 (AGM Insured)

    5.00       12-1-2020        200,000        206,290  

Maine Student Loan Authority AMT Refunding Student Loan Revenue Bond Class A Series 2019A-1 (AGM Insured)

    5.00       12-1-2021        300,000        319,344  

Maine Student Loan Authority AMT Refunding Student Loan Revenue Bond Class A Series 2019A-1 (AGM Insured)

    5.00       12-1-2022        370,000        405,398  
     931,032  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

12  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Maryland: 3.30%  
Housing Revenue: 3.15%  

Maryland CDA Department of Housing & Community Multifamily Development Orchard Park Series F

    2.52 %       8-1-2020      $ 6,000,000      $ 6,019,140  

Maryland CDA Department of Housing & Community Multifamily Development Zions Towers Series A (FHA Insured)

    2.44       3-1-2020        6,000,000        6,004,860  

Maryland Community Development Administration Heritage Crossing II Series G

    2.93       11-1-2020        7,600,000        7,660,724  

Maryland Community Development Administration Village At Lakeview Series 2018C 144A

    2.76       5-1-2020        17,700,000        17,746,197  

Maryland Community Development Administration Willow Manor at Fairland Series I

    2.93       11-1-2020        10,000,000        10,078,300  

Maryland Community Development Department Housing Rosemont Tower LLC Series F (FHA/GNMA Insured)

    2.01       11-1-2021        5,000,000        5,004,300  
     52,513,521  
         

 

 

 
Water & Sewer Revenue: 0.15%  

Baltimore MD Series A (National Insured)

    5.65       7-1-2020        2,400,000        2,452,968  
         

 

 

 
     54,966,489  
         

 

 

 

Massachusetts: 0.68%

 

Health Revenue: 0.20%  

Massachusetts HEFA Partners Healthcare Series G-2 (AGM Insured) (m)

    1.57       7-1-2042        3,350,000        3,350,000  
         

 

 

 
Housing Revenue: 0.48%  

Massachusetts HFA Conduit-Oaks Woods Project

    2.40       6-1-2021        4,660,000        4,677,661  

Massachusetts HFA Series 187 (FNMA Insured)

    1.50       12-1-2047        1,210,000        1,210,266  

Massachusetts HFA Series 212

    1.45       12-1-2049        2,000,000        2,000,380  
     7,888,307  
         

 

 

 
     11,238,307  
         

 

 

 

Michigan: 0.60%

 

Health Revenue: 0.12%  

Michigan Hospital Finance Authority Ascension Health Group Project Series A-2

    1.50       11-1-2027        1,085,000        1,085,977  

Michigan Finance Authority Bronson Healthcare Group Incorporated Series 2019B

    3.50       11-15-2044        800,000        845,608  
     1,931,585  
         

 

 

 
Housing Revenue: 0.24%  

Michigan Housing Development Authority Series A

    2.30       10-1-2021        4,000,000        4,002,920  
         

 

 

 
Utilities Revenue: 0.24%  

Michigan Strategic Fund Limited Obligation Detroit Edison Company Exempt Facilities Project

    1.45       8-1-2029        4,000,000        3,992,800  
         

 

 

 
     9,927,305  
         

 

 

 
Minnesota: 0.62%  
GO Revenue: 0.42%  

JPMorgan Chase Puttable Tax-Exempt Receipts Trust Series 5027 (JPMorgan Chase & Company LIQ) 144Aø

    1.91       6-1-2021        7,000,000        7,000,000  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  13


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue: 0.20%  

Apple Valley MN Senior Living LLC Project Series B

    3.00 %       1-1-2020      $ 525,000      $ 525,000  

Apple Valley MN Senior Living LLC Project Series B

    4.00       1-1-2021        545,000        539,103  

Apple Valley MN Senior Living LLC Project Series B

    4.00       1-1-2022        565,000        552,519  

Minnesota HCFR Maple Grove Hospital Corporation

    4.00       5-1-2020        390,000        393,257  

Minnesota HCFR Maple Grove Hospital Corporation

    4.00       5-1-2021        390,000        403,233  

Minnesota HCFR Maple Grove Hospital Corporation

    4.00       5-1-2022        390,000        412,659  

Minnesota HCFR Maple Grove Hospital Corporation

    5.00       5-1-2023        390,000        434,663  
     3,260,434  
         

 

 

 
     10,260,434  
         

 

 

 

Mississippi: 0.66%

 

Housing Revenue: 0.66%  

Mississippi Home Corporation Jackson Housing Authority Project (HUD Insured)

    2.21       2-1-2022        11,000,000        11,052,250  
         

 

 

 

Missouri: 0.63%

 

Miscellaneous Revenue: 0.63%  

Bridgeton MO IDA Mestek Machinery Incorporated (Santander Bank NA LOC) ø

    1.97       7-1-2030        2,425,000        2,425,000  

Missouri Public Utilities Commission Interim Construction Series 2019

    1.50       3-1-2021        8,000,000        8,007,840  
     10,432,840  
         

 

 

 
Nebraska: 0.49%  
Housing Revenue: 0.49%  

Douglas Country NE Housing Authority Sorensen Senior Residences Project Series A

    2.05       3-1-2020        4,000,000        4,000,280  

Nebraska Investment Finance Authority Series D (GNMA/FNMA/FHLMC Insured)

    3.30       9-1-2020        1,345,000        1,360,494  

Nebraska Investment Finance Authority Series D (GNMA/FNMA/FHLMC Insured)

    3.65       3-1-2021        1,265,000        1,295,132  

Nebraska Investment Finance Authority Series D (GNMA/FNMA/FHLMC Insured)

    3.65       9-1-2021        1,390,000        1,436,704  
     8,092,610  
         

 

 

 
Nevada: 0.62%  
GO Revenue: 0.25%  

Clark County Refunding Bond Series C

    5.00       6-15-2020        3,325,000        3,382,556  

Clark County Refunding Bond Series D

    5.00       6-15-2020        810,000        824,021  
     4,206,577  
         

 

 

 
Utilities Revenue: 0.37%  

Washoe County NV Water Facility Refunding Bond Series F

    2.05       3-1-2036        6,000,000        6,058,680  
         

 

 

 
     10,265,257  
         

 

 

 
New Hampshire: 0.36%  
Industrial Development Revenue: 0.36%  

National Finance Authority NH Exempt Facilities Emerald Renewable Diesel LLC Project 144A

    2.00       6-1-2049        6,000,000        6,016,860  
         

 

 

 
New Jersey: 5.39%  
Education Revenue: 0.13%  

New Jersey Higher Education Assistance Authority Series B

    5.00       12-1-2021        2,000,000        2,135,620  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

14  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue: 0.14%  

New Jersey HFFA St. Joseph’s Healthcare System Group

    4.00 %       7-1-2020      $ 1,540,000      $ 1,557,664  

New Jersey HFFA St. Joseph’s Healthcare System Group

    5.00       7-1-2021        780,000        818,048  
     2,375,712  
         

 

 

 
Housing Revenue: 2.46%  

New Jersey Housing & Mortgage Finance Agency Series A

    1.75       11-1-2020        6,455,000        6,478,238  

New Jersey Housing & Mortgage Finance Agency Series E

    2.20       5-1-2020        1,200,000        1,202,556  

New Jersey Housing & Mortgage Finance Agency Series E

    2.30       11-1-2020        1,040,000        1,046,126  

New Jersey Housing & Mortgage Finance Agency Villa Victoria Apartments Project Series F

    2.43       11-1-2021        10,000,000        10,079,400  

New Jersey Housing & Mortgage Finance Agency Peter J. McGuire Gardens Preservation Project Series G

    1.45       11-1-2022        22,080,000        22,103,184  
     40,909,504  
         

 

 

 
Miscellaneous Revenue: 1.26%  

New Jersey EDA School Facilities Construction Notes Series BBB

    5.00       6-15-2021        3,910,000        4,111,912  

New Jersey EDA School Facilities Construction Notes Series DDD

    5.00       6-15-2022        780,000        845,192  

New Jersey EDA Transportation Project Series B

    5.00       11-1-2020        10,820,000        11,140,164  

New Jersey EDA Unrefunded Bond Series NN

    5.00       3-1-2020        895,000        900,164  

New Jersey TTFA Series AA

    5.00       6-15-2020        1,250,000        1,270,163  

Newark NJ Housing Authority Newark Redevelopment Project Refunding Bond (National Insured)

    5.25       1-1-2020        2,760,000        2,760,000  
     21,027,595  
         

 

 

 
Transportation Revenue: 1.40%  

New Jersey Transportation Trust Fund Authority Transportation System Bonds Series A

    5.00       12-15-2024        2,500,000        2,879,400  

New Jersey Turnpike Authority Series C-5 (1 Month LIBOR +0.46%) ±

    1.66       1-1-2028        20,330,000        20,346,467  
     23,225,867  
         

 

 

 
     89,674,298  
         

 

 

 
New Mexico: 0.05%  
Utilities Revenue: 0.05%  

Farmington NM Public Service Company of New Mexico San Juan Project Series A

    5.20       6-1-2040        780,000        791,513  
         

 

 

 
New York: 10.23%  
Airport Revenue: 0.31%  

New York Transportation Development Terminal One Group Association LP

    5.00       1-1-2020        5,255,000        5,255,000  
         

 

 

 
GO Revenue: 2.77%  

New York NY Adjusted Fiscal 2008 Subordinate Bond Series A-4 (AGM Insured) (m)

    1.55       8-1-2026        10,700,000        10,700,000  

New York NY Adjusted Fiscal 2008 Subordinate Bond Series C-4 (AGC Insured) (m)

    1.65       10-1-2027        11,825,000        11,825,000  

New York NY Series C

    5.00       8-1-2022        1,250,000        1,254,088  

New York NY Series J Subordinate Bond Series J3 (AGM Insured) (m)

    1.65       6-1-2036        1,375,000        1,375,000  

New York NY Subordinate Bond Series C-4 (AGM Insured) (m)

    1.74       1-1-2032        800,000        800,000  

Suffolk County New York TRAN Series I

    2.50       7-23-2020        20,000,000        20,129,600  
     46,083,688  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  15


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue: 0.05%  

New York Dormitory Authority Orange Regional Medical Center 144A

    4.00 %       12-1-2020      $ 800,000      $ 817,656  
         

 

 

 
Housing Revenue: 1.35%  

New York NY Housing Development Corporation Series H

    1.30       11-1-2049        11,105,000        11,105,444  

New York Mortgage Agency Homeowner Revenue Series 183

    3.50       4-1-2022        1,200,000        1,244,340  

New York Mortgage Agency Homeowner Revenue Series 198

    1.50       10-1-2020        2,235,000        2,233,994  

New York NY Housing Development Corporation Series G-2

    2.00       11-1-2057        7,970,000        8,001,402  
     22,585,180  
         

 

 

 
Industrial Development Revenue: 1.37%  

New York Energy Research & Development Authority PCR Keyspan Generation Series A (Ambac Insured) (m)

    1.69       10-1-2028        900,000        900,000  

New York Transportation Development Corporation Series 2018

    5.00       1-1-2022        2,000,000        2,135,340  

New York Transportation Development Corporation Series 2018

    5.00       1-1-2023        18,000,000        19,742,580  
     22,777,920  
         

 

 

 
Tax Revenue: 0.61%  

New York NY Transitional Finance Authority Subordinate Bond Series 1-B (SIFMA Municipal Swap +0.80%) ±

    2.41       11-1-2022        10,075,000        10,106,232  
         

 

 

 
Transportation Revenue: 3.77%  

New York Metropolitan Transportation Authority BAN Series D2

    4.00       7-1-2020        8,000,000        8,109,280  

New York Metropolitan Transportation Authority Series B (1 Month LIBOR +0.55%) ±

    1.70       11-1-2041        6,255,000        6,238,487  

New York Metropolitan Transportation Authority Subordinate Bond Series D2 (SIFMA Municipal Swap +0.45%) ±

    2.06       11-15-2044        18,460,000        18,443,386  

New York Metropolitan Transportation Authority Subordinate Bond Series G-1F (1 Month LIBOR +0.65%) ±

    1.80       11-1-2026        24,965,000        24,988,966  

Triborough Bridge & Tunnel Authority Series 2005B-3 (State Street Bank & Trust Company LOC) ø

    1.63       1-1-2032        4,945,000        4,945,000  
     62,725,119  
         

 

 

 
     170,350,795  
         

 

 

 

North Carolina: 2.88%

 

Housing Revenue: 1.77%  

Charlotte NC Housing Authority Heritage Park Housing LP

    1.45       6-1-2022        7,500,000        7,506,150  

Charlotte NC Housing Authority West Tyvola Seniors LLC

    2.23       12-1-2021        6,000,000        6,040,560  

Durham NC Housing Authority Morreene Road Apartments Project %%

    1.30       1-1-2021        6,225,000        6,225,000  

Raleigh NC Housing Authority Sir Walter Apartments Project Series A

    2.15       7-1-2021        9,600,000        9,633,408  
     29,405,118  
         

 

 

 
Miscellaneous Revenue: 1.11%  

Montgomery County NC BAN

    3.00       9-1-2020        18,500,000        18,550,135  
         

 

 

 
     47,955,253  
         

 

 

 

North Dakota: 0.81%

 

Housing Revenue: 0.81%  

North Dakota HFA Community Homes (HUD Insured)

    2.13       8-1-2020        5,015,000        5,018,862  

North Dakota Housing Finance Agency Home Mortgage Finance Program Series B (SIFMA Municipal Swap +0.40%) ±

    2.01       1-1-2043        8,500,000        8,498,555  
     13,517,417  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

16  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Ohio: 2.23%

 

GO Revenue: 0.99%  

Lorain County OH BAN Series 2019

    3.00 %       2-7-2020      $ 1,725,000      $ 1,728,071  

Sycamore OH Community School District BAN

    2.25       4-15-2020        12,000,000        12,033,960  

Tipp City OH BAN Series 2019

    3.00       2-12-2020        2,750,000        2,755,225  
     16,517,256  
         

 

 

 
Health Revenue: 0.18%  

Allen County OH Mercy Health Hospital Series A

    5.00       8-1-2021        2,795,000        2,955,517  
         

 

 

 
Housing Revenue: 0.71%  

Cuyahoga OH Metropolitan Housing Authority Multifamily Housing Riverside Park Phase 2 Project

    2.00       4-1-2022        4,750,000        4,776,742  

Franklin County OH Sawyer & Trevitt Project

    1.77       6-1-2020        7,100,000        7,101,775  
     11,878,517  
         

 

 

 
Miscellaneous Revenue: 0.35%  

American Municipal Power Incorporated BAN

    2.50       6-25-2020        3,125,000        3,141,094  

Village of Orange OH BAN

    2.00       8-27-2020        2,575,000        2,586,150  
     5,727,244  
         

 

 

 
     37,078,534  
         

 

 

 

Oklahoma: 0.30%

 

Education Revenue: 0.03%  

Oklahoma Development Finance Authority Oklahoma City University Project

    3.00       8-1-2020        500,000        503,715  
         

 

 

 
GO Revenue: 0.20%  

Oklahoma County OK Independent School District

    1.75       7-1-2020        950,000        950,703  

Oklahoma Independent School District #52 Series A

    2.50       1-1-2020        2,375,000        2,375,000  
     3,325,703  
         

 

 

 
Miscellaneous Revenue: 0.07%  

Kay County OK Public Building Authority

    4.00       4-1-2021        350,000        357,641  

Kay County OK Public Building Authority

    4.00       4-1-2022        400,000        415,032  

Kay County OK Public Building Authority

    4.00       4-1-2023        450,000        473,792  
     1,246,465  
         

 

 

 
     5,075,883  
         

 

 

 

Oregon: 0.62%

 

Industrial Development Revenue: 0.62%  

Oregon Business Development Commission Intel Corporation Project Series 232

    2.40       12-1-2040        10,000,000        10,351,500  
         

 

 

 

Pennsylvania: 6.17%

 

Education Revenue: 0.90%  

Chester County PA HEFA Immaculata University Project

    5.00       11-1-2020        550,000        559,719  

Chester County PA HEFA Immaculata University Project

    5.00       11-1-2021        580,000        601,715  

Cumberland County PA Authority Association of Independent Colleges & Universities of Pennsylvania Financing Program Series T-1 øø

    2.00       5-1-2044        1,250,000        1,249,450  

Pennsylvania HEFA Association of Independent Colleges & Universities of Pennsylvania Financing Program Series T-3 øø

    2.25       5-1-2033        3,575,000        3,581,757  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  17


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Education Revenue (continued)  

Pennsylvania HEFA Independent Colleges Series I4

    2.72 %       11-1-2031      $ 3,000,000      $ 3,009,120  

Pennsylvania HEFA Wilkes University Project Series A

    4.00       3-1-2020        575,000        576,731  

Pennsylvania HEFA Wilkes University Project Series A

    5.00       3-1-2021        390,000        402,258  

Pennsylvania HEFAR Association of Independent Colleges & Universities of Pennsylvania Financing Program Mount Aloysius College Project Series R-1

    2.25       11-1-2041        5,000,000        5,021,150  
     15,001,900  
         

 

 

 
GO Revenue: 1.05%  

Allentown PA City School District TRAN

    2.05       1-2-2020        3,000,000        3,000,000  

Octorara PA Area School District (AGM Insured) %%

    4.00       4-1-2025        600,000        674,658  

Pennsylvania

    5.00       1-15-2020        12,845,000        12,861,698  

Scranton PA School District Series A

    5.00       6-1-2020        500,000        506,740  

Scranton PA School District Series B

    5.00       6-1-2020        420,000        425,662  
     17,468,758  
         

 

 

 
Health Revenue: 1.04%  

Montgomery County PA Higher Education & Health Authority Presbytery Homes Incorporated Project

    2.00       12-1-2020        505,000        503,864  

Montgomery County PA Higher Education & Health Authority Presbytery Homes Incorporated Project

    3.00       12-1-2021        560,000        567,263  

Montgomery County PA Higher Education & Health Authority Series 2018A

    5.00       9-1-2022        1,250,000        1,371,538  

Montgomery County PA Higher Education & Health Authority Series 2018D ø

    1.78       9-1-2050        11,500,000        11,500,000  

Philadelphia PA Hospital & Higher Education Facilities Authority

    5.00       7-1-2020        780,000        792,269  

Quakertown PA Health Facilities Authority Series A

    3.13       7-1-2021        2,595,000        2,593,313  
     17,328,247  
         

 

 

 
Housing Revenue: 0.98%  

Pennsylvania HFA Limited Obligation Norris Homes Phase V

    1.40       1-1-2043        10,500,000        10,496,430  

Pennsylvania HFA Series 114A

    2.90       10-1-2021        3,145,000        3,218,782  

Pennsylvania Housing Finance Agency Sharpsburg Towers Series B

    2.40       12-1-2021        2,500,000        2,520,500  
     16,235,712  
         

 

 

 
Industrial Development Revenue: 0.24%  

Montgomery County PA IDA Peco Energy Company Project Series A

    2.60       3-1-2034        3,910,000        3,944,604  
         

 

 

 
Miscellaneous Revenue: 0.60%  

Bethlehem PA School District Revenue (1 Month LIBOR +0.48%) ±

    1.73       7-1-2031        9,985,000        9,988,095  
         

 

 

 
Resource Recovery Revenue: 0.18%  

Pennsylvania EDFA Solid Waste Disposal Republic Services Incorporated Project Series A ø

    1.45       4-1-2034        3,000,000        3,000,000  
         

 

 

 
Tax Revenue: 0.48%  

Philadelphia PA School District TRAN Series C

    4.00       3-31-2020        8,000,000        8,056,960  
         

 

 

 
Water & Sewer Revenue: 0.70%  

Pittsburgh PA Water & Sewer Authority Series C (1 Month LIBOR +0.64%) (AGM Insured) ±

    1.89       9-1-2040        11,730,000        11,733,636  
         

 

 

 
     102,757,912  
         

 

 

 

South Carolina: 0.51%

 

Health Revenue: 0.06%  

South Carolina Jobs EDA Episcopal Home at Still Hopes Series A

    5.00       4-1-2021        425,000        438,770  

South Carolina Jobs EDA Episcopal Home at Still Hopes Series A

    5.00       4-1-2022        455,000        480,685  
     919,455  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

18  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Housing Revenue: 0.45%  

South Carolina Housing Finance & Development Authority Lorick Place Apartments Project

    2.43 %       11-1-2021      $ 7,500,000      $ 7,559,550  
         

 

 

 
     8,479,005  
         

 

 

 
South Dakota: 0.06%  
Housing Revenue: 0.06%  

South Dakota Housing Development Authority Homeownership Mortgage Bond AMT Series E (GNMA/FNMA/FHLMC Insured)

    1.90       5-1-2020        1,000,000        1,000,760  
         

 

 

 
Tennessee: 1.01%  
Health Revenue: 0.08%  

Greeneville TN HEFA Board Series 2018A

    5.00       7-1-2022        1,280,000        1,387,917  
         

 

 

 
Housing Revenue: 0.79%  

Memphis TN Health Educational & Housing Facility Board Keystone Landing & Pendleton Place Apartments

    2.03       8-1-2021        8,000,000        8,029,760  

Murfreesboro TN Housing Authority Westbrook Towers II LP Project

    2.13       9-1-2021        5,000,000        5,019,100  
     13,048,860  
         

 

 

 
Utilities Revenue: 0.14%  

Tennessee Energy Acquisition Corporation Series A

    4.00       5-1-2048        2,190,000        2,344,154  
         

 

 

 
     16,780,931  
         

 

 

 
Texas: 17.73%  
Education Revenue: 0.24%  

University of Texas Board of Regents Series C

    5.00       8-15-2020        3,910,000        4,004,153  
         

 

 

 
GO Revenue: 7.90%  

Burleson TX Independent School District

    2.50       2-1-2047        7,885,000        8,091,350  

Cypress-Fairbanks TX Independent School District Series A-1

    2.13       2-15-2027        4,800,000        4,864,752  

Cypress-Fairbanks TX Independent School District Series A-3

    3.00       2-15-2043        2,470,000        2,495,910  

Cypress-Fairbanks TX Independent School District Series B-2

    2.13       2-15-2040        7,015,000        7,109,632  

Galveston TX Dickinson Independent High School District

    1.35       8-1-2037        3,200,000        3,203,488  

Grapevine-Colleyville TX Independent School District Prerefunded Bond Series B

    2.00       8-1-2036        3,150,000        3,164,647  

Grapevine-Colleyville TX Independent School District Unrefunded Bond

    2.00       8-1-2036        3,495,000        3,511,846  

Harlandale TX Independent School District

    3.00       8-15-2045        8,775,000        8,863,013  

Harris County TX Cypress-Fairbanks Independent High School Series 2014B-2

    1.40       2-15-2040        4,070,000        4,072,483  

Houston TX Independent School District

    1.45       6-1-2029        16,305,000        16,314,946  

Houston TX Independent School District Series 2014A-1B

    2.20       6-1-2039        9,000,000        9,033,030  

Katy TX Independent School District Series 2015C (1 Month LIBOR +0.28%) ±

    1.45       8-15-2036        9,500,000        9,498,765  

North East TX Independent School District Series B

    1.42       8-1-2040        1,205,000        1,205,036  

Northside TX Independent School District Building Project

    2.00       6-1-2046        2,135,000        2,152,528  

Northside TX Independent School District Building Project

    2.13       8-1-2040        1,490,000        1,490,939  

Sherman TX Independent School District Prerefunded Bond Series B

    3.00       8-1-2048        265,000        267,767  

Sherman TX Independent School District Unrefunded Bond Series B

    3.00       8-1-2048        13,735,000        13,868,916  

Texas Northside Independent School District

    1.45       6-1-2047        3,825,000        3,826,683  

Texas TRAN

    4.00       8-27-2020        28,000,000        28,522,760  
     131,558,491  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  19


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Health Revenue: 1.05%  

Coastal Bend TX Health Facilities Development Corporation (AGM Insured) (m)

    1.50 %       7-1-2031      $ 8,000,000      $ 8,000,000  

Harris County TX Health Facilities Development Corporation Series A3 (AGM Insured) (m)

    1.74       7-1-2031        6,300,000        6,300,000  

Harris County TX Health Facilities Development Corporation Series A4 (AGM Insured) ø

    1.10       7-1-2031        100,000        100,000  

Residual Interest Bond Floater Trust Certificates Series 2019-010 (Barclays Bank plc LOC, Barclays Bank plc LIQ) 144Aø

    1.76       11-15-2046        3,000,000        3,000,000  
     17,400,000  
         

 

 

 
Housing Revenue: 5.61%  

Alamito TX Public Facilities Corporation Multifamily Housing Authority of the City of El Paso RAD Conversion Program (HUD Insured)

    1.51       5-1-2037        10,000,000        10,014,000  

Alamito TX Public Facilities Corporation Multifamily Housing Series 2018

    2.25       6-1-2021        16,300,000        16,353,790  

Alamito TX Public Facility Corporation Cramer Three Apartments Project

    2.50       11-1-2021        2,000,000        2,025,080  

Austin TX Affordable PFC Incorporated Multifamily Housing Bridge Granada Apartments

    1.46       6-1-2023        15,000,000        15,024,150  

Capital Area Housing Finance Corporation TX Hills Leander Apartments

    2.05       8-1-2021        7,000,000        7,026,880  

Mizuho Floater/Residual Trust Series 2019 144Aø

    1.89       9-1-2039        3,930,000        3,930,000  

Panhandle TX Regional Housing Finance Agency Canyons 45 W Apartments

    2.00       5-1-2021        600,000        601,068  

San Antonio TX Housing Trust Finance Corporation Majestic Ranch Apartments LP (FHA Insured)

    1.40       7-1-2022        6,000,000        5,999,820  

Southeast Texas Housing Finance Corporation Bayshore Towers Apartments (HUD Insured)

    2.20       1-1-2022        8,025,000        8,053,729  

Texas Capital Area Housing Finance Agency Multifamily Housing Mission Trail at El Camino Real Apartments

    2.10       9-1-2037        9,750,000        9,858,907  

Texas Department of Housing & Community Affairs Multifamily Housing

    2.20       5-1-2021        8,500,000        8,520,060  

Texas Department of Housing & Community Affairs Multifamily Housing Series 2018 (FHA Insured)

    2.23       5-1-2021        6,000,000        6,017,100  
     93,424,584  
         

 

 

 
Industrial Development Revenue: 0.32%  

Matagorda County TX Navigation District Central Power & Light Company Project

    1.75       5-1-2030        5,280,000        5,289,662  
         

 

 

 
Transportation Revenue: 1.68%  

Harris County TX Senior Lien Toll Road Series B

    1.45       8-15-2021        15,000,000        15,019,950  

Tender Option Bond Trust Receipts TengenTender Option Bond Trust Receipts Series 2019-XM0756 (Deutsche Bank LIQ) 144Aø

    1.44       6-30-2058        6,000,000        6,000,000  

Tender Option Bond Trust Receipts Series 2019-XM0753 (Deutsche Bank LIQ) 144Aø

    1.86       8-1-2057        4,820,000        4,820,000  

Texas Transportation Commission Central Texas Turnpike System Series A

    5.00       8-15-2042        2,000,000        2,017,760  
     27,857,710  
         

 

 

 
Utilities Revenue: 0.69%  

San Antonio TX Electric & Gas Systems Refunding Bond Series B

    2.00       2-1-2033        11,440,000        11,543,532  
         

 

 

 
Water & Sewer Revenue: 0.24%  

Houston TX Combined Utility System Revenue Series C (1 Month LIBOR +0.36%) ±

    1.61       5-15-2034        4,000,000        4,004,040  
         

 

 

 
     295,082,172  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

20  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Virginia: 1.73%  
Housing Revenue: 1.25%  

Fairfax County VA Redevelopment & Housing Authority Murraygate Village Apartment Project

    2.26 %       2-1-2021      $ 12,500,000      $ 12,567,375  

Fairfax County VA Redevelopment & Housing Authority Parkwood Project

    2.21       2-1-2021        5,500,000        5,528,050  

Newport News VA Redevelopment & Housing Authority Soundview Townhouses

    2.05       8-1-2021        2,690,000        2,701,083  
     20,796,508  
         

 

 

 
Industrial Development Revenue: 0.24%  

Louisa VA IDA Poll Control Series 2008A

    1.90       11-1-2035        4,000,000        4,045,000  
         

 

 

 
Utilities Revenue: 0.24%  

Halifax County VA IDA

    2.15       12-1-2041        2,000,000        2,011,000  

Wise County IDA Waste & Sewage Disposal Revenue

    1.88       11-1-2040        2,000,000        2,004,600  
     4,015,600  
         

 

 

 
     28,857,108  
         

 

 

 

Washington: 1.42%

 

Housing Revenue: 0.69%  

Washington Housing Finance Commission Columbia Park Apartments Project (FHA/GNMA Insured)

    1.39       7-1-2022        5,200,000        5,200,676  

Washington Housing Finance Commission SAG Portfolio Project

    2.55       7-1-2022        6,250,000        6,325,187  
     11,525,863  
         

 

 

 
Utilities Revenue: 0.73%  

Seattle WA Municipal Light & Power Refunding Bond Series B-2 (SIFMA Municipal Swap +0.29%) ±

    1.90       5-1-2045        10,000,000        10,003,200  

Seattle WA Municipal Light & Power Series C1 (SIFMA Municipal Swap +0.25%) ±

    1.86       11-1-2021        1,055,000        1,055,517  

Seattle WA Municipal Light & Power Series C2 (SIFMA Municipal Swap +0.25%) ±

    1.86       11-1-2021        1,055,000        1,055,517  
     12,114,234  
         

 

 

 
     23,640,097  
         

 

 

 

West Virginia: 0.64%

 

Housing Revenue: 0.30%  

West Virginia Housing Development Brookpark Place Project

    1.65       8-1-2022        5,000,000        5,015,450  
         

 

 

 
Utilities Revenue: 0.34%  

West Virginia EDA Solid Waste Disposal Facilities Appalachian Power Company Series A

    1.70       1-1-2041        5,620,000        5,624,721  
         

 

 

 
     10,640,171  
         

 

 

 

Wisconsin: 3.52%

 

Education Revenue: 0.11%  

Wisconsin PFA Gardner Webb University 144A

    5.00       7-1-2021        1,360,000        1,398,053  

Wisconsin PFA Guilford College

    5.00       1-1-2020        490,000        490,000  
     1,888,053  
         

 

 

 
GO Revenue: 0.47%  

Dane County WI AMT Promissory Notes Apartment Project Series D

    2.50       6-1-2022        445,000        450,803  

Dane County WI AMT Promissory Notes Apartment Project Series D

    2.63       6-1-2023        980,000        993,357  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  21


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue (continued)  

Dane County WI AMT Promissory Notes Apartment Project Series D

    3.50 %       6-1-2020      $ 600,000      $ 605,538  

Dane County WI AMT Promissory Notes Apartment Project Series D

    3.50       6-1-2021        735,000        758,160  

Lake Country WI School District TRAN

    2.00       9-9-2020        1,600,000        1,607,936  

Milwaukee WI Area Technical College District Series C

    4.00       6-1-2020        2,670,000        2,701,319  

Wisconsin GO Series 2019A ø

    1.60       5-1-2029        700,000        700,000  
     7,817,113  
         

 

 

 
Health Revenue: 1.49%  

Wisconsin HEFA St Camillus Health System Series A

    5.00       11-1-2020        100,000        101,817  

Wisconsin HEFA St Camillus Health System Series A

    5.00       11-1-2021        110,000        114,218  

Wisconsin HEFA St Camillus Health System Series A

    5.00       11-1-2022        120,000        126,857  

Wisconsin HEFA St Camillus Health System Series A

    5.00       11-1-2023        125,000        134,300  

Wisconsin HEFA St Camillus Health System Series A %%

    5.00       7-1-2024        945,000        1,088,253  

Wisconsin HEFA Advocate Aurora Health Credit Group Series C3 (SIFMA Municipal Swap +0.55%) ±

    2.16       8-15-2054        20,065,000        20,185,189  

Wisconsin HEFA Tomah Memorial Hospital Series A

    2.65       11-1-2020        3,125,000        3,126,187  
     24,876,821  
         

 

 

 
Housing Revenue: 0.28%  

Wisconsin Housing & EDA Series A

    2.80       3-1-2022        1,070,000        1,095,273  

Wisconsin Housing & EDA Series A

    1.95       11-1-2047        3,530,000        3,533,318  
     4,628,591  
         

 

 

 
Resource Recovery Revenue: 1.07%  

La Crosse WI Resource Recovery Northern States Power Company Project

    6.00       11-1-2021        2,500,000        2,699,175  

Wisconsin PFA Series A-2

    1.45       10-1-2025        15,035,000        15,034,850  
     17,734,025  
         

 

 

 
Tax Revenue: 0.10%  

Whitehall WI School District TRAN

    2.00       10-26-2020        1,650,000        1,655,049  
         

 

 

 
     58,599,652  
         

 

 

 
Wyoming: 0.09%  
Utilities Revenue: 0.09%  

Converse County WY Pollution Control PacifiCorp Projects ø

    1.78       12-1-2020        1,485,000        1,485,000  
         

 

 

 

Total Municipal Obligations (Cost $1,602,344,059)

 

     1,608,886,164  
         

 

 

 

Closed End Municipal Bond Fund Obligations: 2.65%

 

California: 0.90%  

Nuveen California AMT-Free Quality Municipal Income Fund Variable Rate Demand Preferred Shares Series A 1.91% 144A

    .          15,000,000        15,000,000  
         

 

 

 
Massachusetts: 0.30%  

Nuveen Massachusetts Dividend Advantage Municipal Income Fund Variable Rate Demand Preferred Shares 1.96% 144A

         5,000,000        5,000,000  
         

 

 

 
New York: 1.45%                          

Nuveen New York Quality Municipal Income Fund Institutional MuniFund Term Variable Rate Demand Preferred Shares 1.91% 144A

         24,200,000        24,200,000  
         

 

 

 

Total Closed End Municipal Bond Fund Obligations (Cost $44,200,000)

            44,200,000  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

22  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Yield                               Shares      Value  
Short-Term Investments: 0.86%                          
Investment Companies: 0.86%                          

Wells Fargo Municipal Cash Management Money Market Fund Institutional
Class (l)(u)##

    1.45        14,241,977      $ 14,247,673  
         

 

 

 

Total Short-Term Investments (Cost $14,247,673)

            14,247,673        
         

 

 

 

 

Total investments in securities (Cost $1,660,791,732)     100.16        1,667,333,837  

Other assets and liabilities, net

    (0.16        (2,631,256
 

 

 

      

 

 

 
Total net assets     100.00      $ 1,664,702,581  
 

 

 

      

 

 

 

 

 

(m)

The security is an auction-rate security which has an interest rate that resets at predetermined short-term intervals through a Dutch auction. The rate shown is the rate in effect at period end.

øø

The interest rate is determined and reset by the issuer periodically depending upon the terms of the security. The rate shown is the rate in effect at period end.

±

Variable rate investment. The rate shown is the rate in effect at period end.

144A

The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933.

ø

Variable rate demand notes are subject to a demand feature which reduces the effective maturity. The maturity date shown represents the final maturity date of the security. The interest rate is determined and reset by the issuer daily, weekly, or monthly depending upon the terms of the security. The rate shown is the rate in effect at period end.

%%

The security is purchased on a when-issued basis.

(l)

The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940.

(u)

The rate represents the 7-day annualized yield at period end.

##

All or a portion of this security is segregated for when-issued securities.

Abbreviations:

 

AGC

Assured Guaranty Corporation

 

AGM

Assured Guaranty Municipal

 

Ambac

Ambac Financial Group Incorporated

 

AMT

Alternative minimum tax

 

BAM

Build America Mutual Assurance Company

 

BAN

Bond anticipation notes

 

CDA

Community Development Authority

 

EDA

Economic Development Authority

 

EDFA

Economic Development Finance Authority

 

FHA

Federal Housing Administration

 

FHLMC

Federal Home Loan Mortgage Corporation

 

FNMA

Federal National Mortgage Association

 

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

Department of Housing and Urban Development

 

IDA

Industrial Development Authority

 

LIBOR

London Interbank Offered Rate

 

LIQ

Liquidity agreement

 

LOC

Letter of credit

 

National

National Public Finance Guarantee Corporation

 

PCR

Pollution control revenue

 

PFA

Public Finance Authority

 

SIFMA

Securities Industry and Financial Markets Association

 

SPA

Standby purchase agreement

 

TAN

Tax anticipation notes

 

TRAN

Tax revenue anticipation notes

 

TTFA

Transportation Trust Fund Authority

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  23


Portfolio of investments—December 31, 2019 (unaudited)

 

Investments in Affiliates

An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were either affiliates of the Fund at the beginning of the period or the end of the period were as follows:

 

    Shares,
beginning of
period
    Shares
purchased
    Shares
sold
    Shares,
end of
period
    Net
realized
gains
(losses)
    Net
change in
unrealized
gains
(losses)
    Income
from
affiliated
securities
    Value,
end of
period
    % of
net
assets
 
Short-Term Investments                                                      

Investment Companies

                 

Wells Fargo Municipal Cash Management Money Market Fund Institutional Class

    4,468,777       420,309,977       (410,536,777     14,241,977     $ (4,753   $ 0     $ 80,864     $ 14,247,673       0.86

 

The accompanying notes are an integral part of these financial statements.

 

 

24  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Statement of assets and liabilities—December 31, 2019 (unaudited)

 

         

Assets

 

Investments in unaffiliated securities, at value (cost $1,646,544,059)

  $ 1,653,086,164  

Investments in affiliated securities, at value (cost $14,247,673)

    14,247,673  

Cash

    8,351  

Receivable for investments sold

    3,111,096  

Receivable for Fund shares sold

    3,553,689  

Receivable for interest

    9,056,832  
 

 

 

 

Total assets

    1,683,063,805  
 

 

 

 

Liabilities

 

Payable for investments purchased

    12,791,446  

Payable for Fund shares redeemed

    3,306,834  

Management fee payable

    374,987  

Dividends payable

    1,009,773  

Administration fees payable

    116,019  

Distribution fee payable

    3,208  

Trustees’ fees and expenses payable

    4,231  

Accrued expenses and other liabilities

    754,726  
 

 

 

 

Total liabilities

    18,361,224  
 

 

 

 

Total net assets

  $ 1,664,702,581  
 

 

 

 

Net assets consist of

 

Paid-in capital

  $ 1,684,922,229  

Total distributable loss

    (20,219,648
 

 

 

 

Total net assets

  $ 1,664,702,581  
 

 

 

 

Computation of net asset value and offering price per share

 

Net assets – Class A

  $ 400,338,355  

Shares outstanding – Class A1

    41,685,857  

Net asset value per share – Class A

    $9.60  

Maximum offering price per share – Class A2

    $9.80  

Net assets – Class C

  $ 4,707,637  

Shares outstanding – Class C1

    499,252  

Net asset value per share – Class C

    $9.43  

Net assets – Class R6

  $ 683,877,728  

Shares outstanding – Class R61

    71,216,420  

Net asset value per share – Class R6

    $9.60  

Net assets – Administrator Class

  $ 18,892,621  

Shares outstanding – Administrator Class1

    1,967,096  

Net asset value per share – Administrator Class

    $9.60  

Net assets – Institutional Class

  $ 556,886,240  

Shares outstanding – Institutional Class1

    57,978,229  

Net asset value per share – Institutional Class

    $9.61  

 

 

1 

The Fund has an unlimited number of authorized shares.

2 

Maximum offering price is computed as 100/98 of net asset value. On investments of $50,000 or more, the offering price is reduced.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  25


Statement of operations—six months ended December 31, 2019 (unaudited)

 

         

Investment income

 

Interest

  $ 17,082,058  

Income from affiliated securities

    80,864  
 

 

 

 

Total investment income

    17,162,922  
 

 

 

 

Expenses

 

Management fee

    3,023,628  

Administration fees

 

Class A

    343,765  

Class C

    5,186  

Class R6

    106,943  

Administrator Class

    11,168  

Institutional Class

    244,581  

Shareholder servicing fees

 

Class A

    537,132  

Class C

    8,103  

Administrator Class

    27,692  

Distribution fee

 

Class C

    24,200  

Custody and accounting fees

    106,926  

Professional fees

    18,241  

Registration fees

    41,434  

Shareholder report expenses

    1,869  

Trustees’ fees and expenses

    10,804  

Other fees and expenses

    35,717  
 

 

 

 

Total expenses

    4,547,389  

Less: Fee waivers and/or expense reimbursements

 

Fund-level

    (723,277
 

 

 

 

Net expenses

    3,824,112  
 

 

 

 

Net investment income

    13,338,810  
 

 

 

 

Realized and unrealized gains (losses) on investments

 

Net realized gains (losses) on

 

Unaffiliated securities

    259,849  

Affiliated securities

    (4,753
 

 

 

 

Net realized gains on investments

    255,096  

Net change in unrealized gains (losses) on investments

    (119,975
 

 

 

 

Net realized and unrealized gains (losses) on investments

    135,121  
 

 

 

 

Net increase in net assets resulting from operations

  $ 13,473,931  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

26  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Statement of changes in net assets

 

     Six months ended
December 31, 2019
(unaudited)
    Year ended
June 30, 2019
 

Operations

 

 

Net investment income

    $ 13,338,810       $ 39,692,474  

Net realized gains (losses) on investments

      255,096         (472,657

Net change in unrealized gains (losses) on investments

      (119,975       8,239,186  
 

 

 

 

Net increase in net assets resulting from operations

      13,473,931         47,459,003  
 

 

 

 

Distributions to shareholders from net investment income and net realized gains

       

Class A

      (2,697,556       (7,184,383

Class C

      (16,573       (81,918

Class R6

      (5,716,583       (9,194,218 )1 

Administrator Class

      (148,035       (489,384

Institutional Class

      (4,756,852       (22,722,426
 

 

 

 

Total distributions to shareholders

      (13,335,599       (39,672,329
 

 

 

 

Capital share transactions

    Shares         Shares    

Proceeds from shares sold

 

Class A

    2,217,425       21,298,011       5,347,278       51,171,356  

Class C

    11,912       112,407       391,712       3,675,907  

Class R6

    46,379,172       445,417,373       172,266,423 1      1,647,488,263 1 

Administrator Class

    111,413       1,070,331       951,130       9,106,545  

Institutional Class

    13,278,475       127,584,835       124,072,823       1,187,607,605  
 

 

 

 
      595,482,957         2,899,049,676  
 

 

 

 

Reinvestment of distributions

 

Class A

    264,698       2,542,077       715,680       6,852,879  

Class C

    1,316       12,419       7,174       67,438  

Class R6

    9,666       92,826       12,244 1      117,351 1 

Administrator Class

    14,983       143,892       49,856       477,408  

Institutional Class

    426,510       4,098,074       1,731,479       16,580,749  
 

 

 

 
      6,889,288         24,095,825  
 

 

 

 

Payment for shares redeemed

 

Class A

    (7,093,180     (68,127,606     (33,178,529     (317,470,659

Class C

    (588,850     (5,554,955     (1,149,710     (10,810,966

Class R6

    (55,426,942     (532,371,417     (92,024,143 )1      (881,492,500 )1 

Administrator Class

    (830,059     (7,974,034     (3,945,902     (37,776,949

Institutional Class

    (22,753,554     (218,541,171     (282,486,053     (2,703,286,719
 

 

 

 
      (832,569,183       (3,950,837,793
 

 

 

 

Net decrease in net assets resulting from capital share transactions

      (230,196,938       (1,027,692,292
 

 

 

 

Total decrease in net assets

      (230,058,606       (1,019,905,618
 

 

 

 

Net assets

   

Beginning of period

      1,894,761,187         2,914,666,805  
 

 

 

 

End of period

    $ 1,664,702,581       $ 1,894,761,187  
 

 

 

 

 

 

1 

For the period from July 31, 2018 (commencement of class operations) to June 30, 2019

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  27


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS A   2019     2018     2017     2016     20151  

Net asset value, beginning of period

    $9.60       $9.57       $9.57       $9.63       $9.61       $9.64  

Net investment income

    0.06       0.12 2      0.08       0.06       0.04       0.02  

Net realized and unrealized gains (losses) on investments

    0.00       0.03       0.00 3      (0.06     0.02       (0.03
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.06       0.15       0.08       0.00       0.06       (0.01

Distributions to shareholders from

           

Net investment income

    (0.06     (0.12     (0.08     (0.06     (0.04     (0.02

Net realized gains

    0.00       0.00       0.00       (0.00 )3      (0.00 )3      (0.00 )3 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.06     (0.12     (0.08     (0.06     (0.04     (0.02

Net asset value, end of period

    $9.60       $9.60       $9.57       $9.57       $9.63       $9.61  

Total return4

    0.63     1.63     0.88     (0.04 )%      0.61     (0.07 )% 

Ratios to average net assets (annualized)

           

Gross expenses

    0.77     0.77     0.77     0.75     0.75     0.75

Net expenses

    0.67     0.67     0.67     0.67     0.67     0.67

Net investment income

    1.26     1.28     0.86     0.57     0.38     0.23

Supplemental data

           

Portfolio turnover rate

    24     55     50     56     41     44

Net assets, end of period (000s omitted)

    $400,338       $444,581       $702,570       $971,189       $1,209,818       $961,485  

 

 

 

1 

A one-for-two share split took place after the close of business on June 12, 2015 for all classes of the Fund. The per share information has been adjusted to give effect to this transaction.

 

2 

Calculated based upon average shares outstanding

 

3 

Amount is less than $0.005.

 

4 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

28  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS C   2019     2018     2017     2016     20151  

Net asset value, beginning of period

    $9.43       $9.40       $9.40       $9.47       $9.49       $9.58  

Net investment income (loss)

    0.02 2      0.05 2      0.01 2      (0.02 )2      (0.04 )2      (0.11

Net realized and unrealized gains (losses) on investments

    0.00       0.03       0.00 3      (0.05     0.02       0.02  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.02       0.08       0.01       (0.07     (0.02     (0.09

Distributions to shareholders from

           

Net investment income

    (0.02     (0.05     (0.01     (0.00 )3      0.00       0.00  

Net realized gains

    0.00       0.00       0.00       (0.00 )3      (0.00 )3      (0.00 )3 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.02     (0.05     (0.01     (0.00 )3      (0.00 )3      (0.00 )3 

Net asset value, end of period

    $9.43       $9.43       $9.40       $9.40       $9.47       $9.49  

Total return4

    0.25     0.87     0.16     (0.73 )%      (0.19 )%      (0.93 )% 

Ratios to average net assets (annualized)

           

Gross expenses

    1.52     1.52     1.52     1.50     1.50     1.50

Net expenses

    1.42     1.42     1.42     1.42     1.42     1.42

Net investment income (loss)

    0.51     0.54     0.11     (0.18 )%      (0.37 )%      (0.52 )% 

Supplemental data

           

Portfolio turnover rate

    24     55     50     56     41     44

Net assets, end of period (000s omitted)

    $4,708       $10,135       $17,154       $23,650       $31,837       $42,289  

 

 

 

 

1 

A one-for-two share split took place after the close of business on June 12, 2015 for all classes of the Fund. The per share information has been adjusted to give effect to this transaction.

 

2 

Calculated based upon average shares outstanding

 

3 

Amount is less than $0.005.

 

4 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  29


Financial highlights

 

(For a share outstanding throughout each period)

 

CLASS R6  

Six months ended
December 31, 2019

(unaudited)

    Year ended
June 30, 20191
 

Net asset value, beginning of period

    $9.60       $9.58  

Net investment income

    0.08       0.15 2 

Net realized and unrealized gains (losses) on investments

    0.00       0.02  
 

 

 

   

 

 

 

Total from investment operations

    0.08       0.17  

Distributions to shareholders from

   

Net investment income

    (0.08     (0.15

Net asset value, end of period

    $9.60       $9.60  

Total return3

    0.81     1.76

Ratios to average net assets (annualized)

   

Gross expenses

    0.39     0.39

Net expenses

    0.32     0.32

Net investment income

    1.60     1.73

Supplemental data

   

Portfolio turnover rate

    24     55

Net assets, end of period (000s omitted)

    $683,878       $770,634  

 

 

 

 

1 

For the period from July 31, 2018 (commencement of class operations) to June 30, 2019

 

2 

Calculated based upon average shares outstanding

 

3 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

30  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
ADMINISTRATOR CLASS   2019     2018     2017     2016     20151  

Net asset value, beginning of period

    $9.60       $9.57       $9.57       $9.63       $9.61       $9.64  

Net investment income

    0.06 2      0.13 2      0.08 2      0.06       0.04       0.03  

Net realized and unrealized gains (losses) on investments

    0.00       0.03       0.01       (0.06     0.02       (0.03
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.06       0.16       0.09       0.00       0.06       0.00  

Distributions to shareholders from

           

Net investment income

    (0.06     (0.13     (0.09     (0.06     (0.04     (0.03

Net realized gains

    0.00       0.00       0.00       (0.00 )3      (0.00 )3      (0.00 )3 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.06     (0.13     (0.09     (0.06     (0.04     (0.03

Net asset value, end of period

    $9.60       $9.60       $9.57       $9.57       $9.63       $9.61  

Total return4

    0.67     1.70     0.95     0.03     0.68     0.00

Ratios to average net assets (annualized)

           

Gross expenses

    0.71     0.70     0.70     0.70     0.68     0.69

Net expenses

    0.60     0.60     0.60     0.60     0.60     0.60

Net investment income

    1.33     1.34     0.82     0.69     0.45     0.30

Supplemental data

           

Portfolio turnover rate

    24     55     50     56     41     44

Net assets, end of period (000s omitted)

    $18,893       $25,649       $53,746       $1,946,987       $226,125       $328,134  

 

 

 

1 

A one-for-two share split took place after the close of business on June 12, 2015 for all classes of the Fund. The per share information has been adjusted to give effect to this transaction.

 

2 

Calculated based upon average shares outstanding

 

3 

Amount is less than $0.005.

 

4 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  31


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
INSTITUTIONAL CLASS   2019     2018     2017     2016     20151  

Net asset value, beginning of period

    $9.60       $9.57       $9.58       $9.63       $9.61       $9.64  

Net investment income

    0.08       0.15 2      0.11       0.08 2      0.07       0.05  

Net realized and unrealized gains (losses) on investments

    0.01       0.03       (0.01     (0.05     0.02       (0.03
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.09       0.18       0.10       0.03       0.09       0.02  

Distributions to shareholders from

           

Net investment income

    (0.08     (0.15     (0.11     (0.08     (0.07     (0.05

Net realized gains

    0.00       0.00       0.00       (0.00 )3      (0.00 )3      (0.00 )3 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.08     (0.15     (0.11     (0.08     (0.07     (0.05

Net asset value, end of period

    $9.61       $9.60       $9.57       $9.58       $9.63       $9.61  

Total return4

    0.89     1.93     1.07     0.36     0.91     0.23

Ratios to average net assets (annualized)

           

Gross expenses

    0.44     0.44     0.44     0.42     0.42     0.42

Net expenses

    0.37     0.37     0.37     0.37     0.37     0.37

Net investment income

    1.56     1.56     1.16     0.86     0.68     0.54

Supplemental data

           

Portfolio turnover rate

    24     55     50     56     41     44

Net assets, end of period (000s omitted)

    $556,886       $643,762       $2,141,197       $2,713,317       $4,061,647       $3,930,234  

 

 

 

 

1 

A one-for-two share split took place after the close of business on June 12, 2015 for all classes of the Fund. The per share information has been adjusted to give effect to this transaction.

 

2 

Calculated based upon average shares outstanding

 

3 

Amount is less than $0.005.

 

4 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

32  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Notes to financial statements (unaudited)

 

1. ORGANIZATION

Wells Fargo Funds Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Wells Fargo Ultra Short-Term Municipal Income Fund (the “Fund”) which is a diversified series of the Trust.

2. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Securities valuation

All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.

Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

Investments in registered open-end investment companies 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 in good faith by the Board of Trustees of the Fund. The Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities, unless the determination has been delegated to the Wells Fargo Asset Management Pricing Committee at Wells Fargo Funds Management, LLC (“Funds Management”). The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Valuation Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees receives reports on any valuation actions taken by the Valuation Committee or the Wells Fargo Asset Management Pricing Committee which may include items for ratification.

When-issued transactions

The Fund may purchase securities on a forward commitment or when-issued basis. The Fund records a when-issued transaction on the trade date and will segregate assets in an amount at least equal in value to the Fund’s commitment to purchase when-issued securities. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

Security transactions and income recognition

Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. 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 been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Distributions to shareholders

Distributions to shareholders from net investment income are declared daily and paid monthly. Distributions from net realized gains, if any, are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  33


Notes to financial statements (unaudited)

 

Federal and other taxes

The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable and tax-exempt income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.

The 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. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

As of December 31, 2019, the aggregate cost of all investments for federal income tax purposes was $1,660,791,633 and the unrealized gains (losses) consisted of:

 

Gross unrealized gains

   $ 6,770,673  

Gross unrealized losses

     (228,469

Net unrealized gains

   $ 6,542,204  

As of June 30, 2019, the Fund had capital loss carryforwards which consisted of $2,919,850 in short-term capital losses and $23,588,856 in long-term capital losses.

Class allocations

The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.

3. FAIR VALUATION MEASUREMENTS

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:

 

 

Level 1 – quoted prices in active markets for identical securities

 

 

Level 2 – other significant observable inputs (including quoted prices for similar securities, 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 investments in securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of December 31, 2019:

 

      Quoted prices
(Level 1)
     Other significant
observable inputs
(Level 2)
    

Significant
unobservable inputs

(Level 3)

     Total  

Assets

           

Investments in:

           

Municipal obligations

   $ 0      $ 1,608,886,164      $ 0      $ 1,608,886,164  

Closed end municipal bond fund obligations

     0        44,200,000        0        44,200,000  

Short-term investments

           

Investment companies

     14,247,673        0        0        14,247,673  

Total assets

   $ 14,247,673      $ 1,653,086,164      $ 0      $ 1,667,333,837  

 

 

34  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Notes to financial statements (unaudited)

 

Additional sector, industry or geographic detail is included in the Portfolio of Investments.

For the six months ended December 31, 2019, the Fund did not have any transfers into/out of Level 3.

4. TRANSACTIONS WITH AFFILIATES

Management fee

Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”), is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:

 

Average daily net assets    Management fee  

First $1 billion

     0.350

Next $4 billion

     0.325  

Next $3 billion

     0.290  

Next $2 billion

     0.265  

Over $10 billion

     0.255  

For the six months ended December 31, 2019, the management fee was equivalent to an annual rate of 0.34% of the Fund’s average daily net assets.

Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Funds Management. Wells Capital Management Incorporated, an affiliate of Funds Management and an indirect wholly owned subsidiary of Wells Fargo, is the subadviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.15% and declining to 0.05% as the average daily net assets of the Fund increase.

Administration fees

Under a class-level administration agreement, Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:

 

      Class-level
administration fee
 

Class A, Class C

     0.16

Class R6

     0.03  

Administrator Class

     0.10  

Institutional Class

     0.08  

Waivers and/or expense reimbursements

Funds Management has contractually waived and/or reimbursed management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Funds Management has waived fees and/or reimbursed expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Funds Management has committed through October 31, 2020 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s expenses at 0.67% for Class A shares, 1.42% for Class C shares, 0.32% for Class R6 shares, 0.60% for Administrator Class shares, and 0.37% for Institutional Class shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  35


Notes to financial statements (unaudited)

 

Distribution fee

The Trust has adopted a distribution plan for Class C shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Wells Fargo Funds Distributor, LLC (“Funds Distributor”), the principal underwriter, at an annual rate of 0.75% of the average daily net assets of Class C shares.

In addition, Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the six months ended December 31, 2019, Funds Distributor received $1,195 from the sale of Class A shares. No contingent deferred sales charges were incurred by Class A and Class C shares for the six months ended December 31, 2019.

Shareholder servicing fees

The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A, Class C, and Administrator Class of the Fund are charged a fee at an annual rate of 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of Wells Fargo.

Interfund transactions

The Fund may purchase or sell portfolio investment securities to certain other Wells Fargo affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund had $81,235,000 and $88,270,000 in interfund purchases and sales, respectively, during the six months ended December 31, 2019.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended December 31, 2019 were $447,511,613 and $388,798,385, respectively.

6. BANK BORROWINGS

The Trust (excluding the money market funds), Wells Fargo Master Trust and Wells Fargo Variable Trust are parties to a $280,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the 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, an annual commitment fee equal to 0.25% of the unused balance is allocated to each participating fund.

For the six months ended December 31, 2019, there were no borrowings by the Fund under the agreement.

7. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and Trustees have been granted certain indemnification rights 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 Fund and, therefore, cannot be estimated.

8. NEW ACCOUNTING PRONOUNCEMENTS

In August 2018, FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 updates the disclosure requirements for fair value measurements by modifying or removing certain disclosures and adding certain new disclosures. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Management has adopted the removal and modification of disclosures early, as permitted, and will adopt the additional new disclosures at the effective date.

In March 2017, FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium and requires the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount and discounts will continue to be accreted to the maturity date of the security. ASU 2017-08 is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years. During the current reporting period, management of the Fund adopted the change in accounting policy which did not have a material impact to the Fund’s financial statements.

 

 

36  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Other information (unaudited)

 

PROXY VOTING INFORMATION

A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available, upon request, by calling 1-800-222-8222, visiting our website at wfam.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at wfam.com or by visiting the SEC website at sec.gov.

QUARTERLY PORTFOLIO HOLDINGS INFORMATION

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  37


Other information (unaudited)

 

BOARD OF TRUSTEES AND OFFICERS    

Each of the Trustees and Officers1 listed in the table below acts in identical capacities for each fund in the Wells Fargo family of funds, which consists of 149 mutual funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information2. 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    

 

Name and
year of birth
  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships
William R. Ebsworth (Born 1957)   Trustee, since 2015   Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Endowment (non-profit organization). Mr. Ebsworth is a CFA® charterholder.   N/A
Jane A. Freeman (Born 1953)   Trustee, since 2015; Chair Liaison, since 2018   Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is a Board Member of The Ruth Bancroft Garden (non-profit organization). She is also an inactive Chartered Financial Analyst.   N/A
Isaiah Harris, Jr. (Born 1952)   Trustee, since 2009; Audit Committee Chairman, since 2019   Retired. Chairman of the Board of CIGNA Corporation since 2009, and Director since 2005. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Child Evangelism Fellowship (non-profit). Mr. Harris is a certified public accountant (inactive status).   CIGNA Corporation
Judith M. Johnson (Born 1949)   Trustee, since 2008; Audit Committee Chairman, from 2009 to 2018   Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.   N/A

 

 

38  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Other information (unaudited)

 

Name and
year of birth
  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships
David F. Larcker (Born 1950)   Trustee, since 2009   James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.   N/A
Olivia S. Mitchell (Born 1953)   Trustee, since 2006; Nominating and Governance Committee Chair, since 2018   International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993.   N/A
Timothy J. Penny (Born 1951)   Trustee, since 1996; Chairman, since 2018   President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.   N/A
James G. Polisson (Born 1959)   Trustee, since 2018   Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations.   N/A
Pamela Wheelock3 (Born 1959)   Trustee, since January 2020; previously Trustee from January 2018 to July 2019   Board member of the Destination Medical Center Economic Development Agency, Rochester, Minnesota since 2019. Acting Commissioner, Minnesota Department of Human Services, July 2019 through September 2019. Human Services Manager (part-time), Minnesota Department of Human Services, October 2019 through December 2019. Chief Operating Officer, Twin Cities Habitat for Humanity from 2017 to 2019. Vice President of University Services, University of Minnesota from 2012 to 2016. Prior thereto, on the Board of Directors, Governance Committee and Finance Committee for the Minnesota Philanthropy Partners (Saint Paul Foundation) from 2012 to 2018, Interim Chief Executive Officer of Blue Cross Blue Shield of Minnesota from 2011 to 2012, Chairman of the Board from 2009 to 2012 and Board Director from 2003 to 2015. Vice President, Leadership and Community Engagement, Bush Foundation, Saint Paul, Minnesota (a private foundation) from 2009 to 2011. Executive Vice President and Chief Financial Officer, Minnesota Sports and Entertainment from 2004 to 2009 and Senior Vice President from 2002 to 2004. Executive Vice President of the Minnesota Wild Foundation from 2004 to 2008. Commissioner of Finance, State of Minnesota, from 1999 to 2002. Currently Board Chair of the Minnesota Wild Foundation since 2010.   N/A

 

*

Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.    

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  39


Other information (unaudited)

 

Officers    

 

Name and
year of birth
  Position held and
length of service
  Principal occupations during past five years or longer
Andrew Owen (Born 1960)   President, since 2017   Executive Vice President of Wells Fargo & Company and Head of Affiliated Managers, Wells Fargo Asset Management, since 2014. In addition, Mr. Owen is currently President, Chief Executive Officer and Director of Wells Fargo Funds Management, LLC since 2017. Prior thereto, Executive Vice President responsible for marketing, investments and product development for Wells Fargo Funds Management, LLC, from 2009 to 2014.
Nancy Wiser1 (Born 1967)   Treasurer, since 2012   Executive Vice President of Wells Fargo Funds Management, LLC since 2011. Chief Operating Officer and Chief Compliance Officer at LightBox Capital Management LLC, from 2008 to 2011.
Michelle Rhee4 (Born 1966)   Chief Legal Officer, since 2019   Secretary of Wells Fargo Funds Management, LLC, Chief Legal Counsel of Wells Fargo Asset Management and Assistant General Counsel of Wells Fargo Bank, N.A. since 2018. Associate General Counsel and Managing Director of Bank of America Corporation from 2004 to 2018.
Catherine Kennedy5 (Born 1969)   Secretary, since 2019   Vice President of Wells Fargo Funds Management, LLC and Senior Counsel of the Wells Fargo Legal Department since 2010. Vice President and Senior Counsel of Evergreen Investment Management Company, LLC from 1998 to 2010.
Michael H. Whitaker (Born 1967)   Chief Compliance Officer, since 2016   Chief Compliance Officer of Wells Fargo Asset Management since 2016. Senior Vice President and Chief Compliance Officer for Fidelity Investments from 2007 to 2016.
David Berardi (Born 1975)   Assistant Treasurer, since 2009   Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.
Jeremy DePalma1 (Born 1974)   Assistant Treasurer, since 2009   Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.

 

 

 

1

Nancy Wiser acts as Treasurer of 64 funds in the Fund Complex. Jeremy DePalma acts as Treasurer of 85 funds and Assistant Treasurer of 64 funds in the Fund Complex.

 

2

The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at wfam.com.    

 

3 

Pamela Wheelock was re-appointed to the Board effective January 1, 2020.

 

4 

Michelle Rhee became Chief Legal Officer effective October 22, 2019.

 

5 

Catherine Kennedy became Secretary effective October 22, 2019.

 

 

40  |  Wells Fargo Ultra Short-Term Municipal Income Fund


Appendix (unaudited)

 

Effective on or about May 1, 2020, if you purchase Fund shares through a Janney Montgomery Scott LLC (“Janney”) brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge (“CDSC”), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in the Fund’s Prospectus or SAI.

 

Front-end sales charge* waivers on Class A shares available at Janney
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).
Shares purchased by employees and registered representatives of Janney or its affiliates and their family members as designated by Janney.

Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within ninety (90) days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., right of reinstatement).

Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
Shares acquired through a right of reinstatement.
Class C shares that are no longer subject to a contingent deferred sales charge and are converted to Class A shares of the same fund pursuant to Janney’s policies and procedures.
CDSC waivers on Class A and Class C shares available at Janney
Shares sold upon the death or disability of the shareholder.
Shares sold as part of a systematic withdrawal plan as described in the Fund’s Prospectus.
Shares purchased in connection with a return of excess contributions from an IRA account.
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRS regulations.
Shares sold to pay Janney fees but only if the transaction is initiated by Janney.
Shares acquired through a right of reinstatement.
Shares exchanged into the same share class of a different fund.
Front-end sales charge* discounts available at Janney; breakpoints, rights of accumulation and/or letters of intent
Breakpoints as described in the Fund’s Prospectus.
Rights of accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Janney. Eligible fund family assets not held at Janney may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.
Letters of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Janney Montgomery Scott may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.

 

*

Also referred to as an “initial sales charge.”

 

 

Wells Fargo Ultra Short-Term Municipal Income Fund  |  41


 

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LOGO

For more information

More information about Wells Fargo Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:

Wells Fargo Funds

P.O. Box 219967

Kansas City, MO 64121-9967

Website: wfam.com

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

 

LOGO

 

This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-222-8222 or visit the Fund’s website at wfam.com. Read the prospectus carefully before you invest or send money.

Wells Fargo Asset Management (WFAM) is the trade name for certain investment advisory/management firms owned by Wells Fargo & Company. These firms include but are not limited to Wells Capital Management Incorporated and Wells Fargo Funds Management, LLC. Certain products managed by WFAM entities are distributed by Wells Fargo Funds Distributor, LLC (a broker-dealer and Member FINRA).

This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind—including a recommendation for any specific investment, strategy, or plan.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE     MAY LOSE VALUE


© 2020 Wells Fargo & Company. All rights reserved.

PAR-0120-02398 02-20

SA258/SAR258 12-19

 

 



LOGO

Semi-Annual Report

December 31, 2019

 

Wells Fargo

Wisconsin Tax-Free Fund

 

 

 

 

Beginning on January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, paper copies of the Wells Fargo Funds’ annual and semi-annual shareholder reports issued after this date will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-222-8222 or by enrolling at wellsfargo.com/advantagedelivery.

You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call 1-800-222-8222. Your election to receive reports in paper will apply to all Wells Fargo Funds held in your account with your financial intermediary or, if you are a direct investor, to all Wells Fargo Funds that you hold.


 

 

Reduce clutter.

Save trees.

Sign up for electronic delivery of prospectuses and shareholder reports at wellsfargo.com/advantagedelivery

 

The views expressed and any forward-looking statements are as of December 31, 2019, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Asset Management. Discussions of individual securities, or the markets generally, or any Wells Fargo Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Asset Management and the Fund disclaim any obligation to publicly update or revise any views expressed or forward-looking statements.

 

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE    MAY LOSE VALUE


 

 

Wells Fargo Wisconsin Tax-Free Fund  |  1


Letter to shareholders (unaudited)

 

LOGO

Andrew Owen

President

Wells Fargo Funds

“After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July.”

Dear Shareholder:

We are pleased to offer you this semi-annual report for the Wells Fargo Wisconsin Tax-Free Fund for the six-month period that ended December 31, 2019. Despite periods of market volatility, the year was strongly positive for financial markets as supportive central banks more than offset concerns over slowing global economic growth and international trade tensions.

Overall, both fixed-income and equity investors enjoyed healthy returns. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 10.92% and international stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned 6.96%. The MSCI EM Index (Net)3 gained 7.09%. For bond investors, the Bloomberg Barclays U.S. Aggregate Bond Index4 added 2.45%, the Bloomberg Barclays Global Aggregate ex-USD Index5 returned 0.09%, the Bloomberg Barclays Municipal Bond Index6 gained 2.32%, and the ICE BofA U.S. High Yield Index7 added 3.86%.

Sentiment turned positive, driven by central bank support.

After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July. The gains, primarily driven by geopolitical and monetary policy events, pushed equity markets to new highs. European Central Bank President Mario Draghi indicated the bank was ready to cut rates or buy more assets to prop up inflation if needed. President Trump backed off of tariff threats against Mexico and China. The U.S. Federal Reserve (Fed) implemented a 0.25% federal funds rate cut in July.

Throughout the summer, U.S.-China trade tensions simmered. Major U.S. stock market indices closed July with the worst weekly results of the year. Bond prices gained as Treasury yields fell to multiyear lows, and the yield curve inverted at multiple points along the 30-year arc.

Evidence of a continued global economic slowdown mounted, and central banks in China, New Zealand, and Thailand cut interest rates. Industrial and manufacturing data declined in China, Canada, Japan, and Germany. Adding to global uncertainty, Italy’s prime minister resigned, many feared a crackdown in Hong Kong as protestors sustained their calls for reform, and Boris Johnson planned to suspend Parliament as Brexit’s deadline neared.

In the U.S., the Fed cut interest rates a second time in September. U.S. manufacturing data disappointed investors. The U.S. Congress announced it would pursue an impeachment investigation of President Trump. Meanwhile, the Brexit impasse showed no signs of resolution. Officials in China warned of the negative economic impact of tariffs and trade restrictions. Although the S&P 500 Index finished the third quarter with the best year-to-date returns in more than 20 years, concerns about future returns remained.

 

 

 

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 Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the United States. 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. You cannot invest directly in an index.

 

3 

The MSCI Emerging Markets (EM) Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index.

 

4

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index.

 

5

The Bloomberg Barclays Global Aggregate ex-USD Index is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S. dollar-denominated debt market. You cannot invest directly in an index.

 

6 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

7

The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2020. ICE Data Indices, LLC. All rights reserved.

 

 

2  |  Wells Fargo Wisconsin Tax-Free Fund


Letter to shareholders (unaudited)

 

The fourth quarter started on a strong note, with a relaxing of U.S.-China trade tensions in October along with renewed optimism for a U.K. Brexit deal and positive macroeconomic data. The initial estimate of U.S. third-quarter gross domestic product growth was a 1.9% annualized rate, while the U.S. unemployment rate fell to a 50-year low of 3.5% in September. However, despite resilience among U.S. consumers, business confidence declined while manufacturing activity contracted. Concerned with a potential economic slowdown, the Fed lowered interest rates another quarter point in late October, its third rate cut in four months. This helped push the S&P 500 Index to a new all-time high, while emerging market equities rallied and global bonds declined overall, reflecting a broad pickup in risk appetite.

Equity markets continued to rally in November despite ongoing geopolitical risks. Hopes for a U.S.-China trade deal buoyed investor confidence. U.S. business sentiment improved slightly, and manufacturing and services activity picked up. Throughout the month, central bank actions were on hold. With that positive backdrop, developed market equities outpaced those in emerging markets, and U.S. stocks outperformed non-U.S. stocks overall. While consumer confidence and purchasing manager activity rose in the eurozone, China reported weakening manufacturing and consumer data. Bond yields rose marginally, leading to slightly negative returns for global government and investment-grade corporate bonds.

Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal, with some details to be worked out. That, along with the landslide election win by the pro-Brexit U.K. Conservative Party and ongoing central bank support, gave investors a greater sense of certainty. U.S. economic indicators were broadly positive, with the exception of manufacturing activity and business confidence. Consumer confidence was resilient, fed by a robust labor market, tame inflation, and lower interest rates, which boosted housing affordability and homebuyer activity. The impeachment of U.S. President Donald Trump, while historically noteworthy, had little impact on markets. Meanwhile, slowing Chinese economic activity, due in part to the trade war, led to further government stimulus at year-end through lower reserve ratios, allowing banks to lend more money.

Don’t let short-term uncertainty derail long-term investment goals.

Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.

Thank you for choosing to invest with Wells Fargo Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.

Sincerely,

 

LOGO

Andrew Owen

President

Wells Fargo Funds

 

“Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal.”

 

 

For further information about your Fund, contact your investment professional, visit our website at wfam.com,

or call us directly at 1-800-222-8222.

 

 

 

Wells Fargo Wisconsin Tax-Free Fund  |  3


Performance highlights (unaudited)

 

Investment objective

The Fund seeks current income exempt from federal income tax and Wisconsin individual income tax.

Manager

Wells Fargo Funds Management, LLC

Subadviser

Wells Capital Management Incorporated

Portfolio managers

Wendy Casetta

Bruce R. Johns

Thomas Stoeckmann

Average annual total returns (%) as of December 31, 2019

 

 
       

Including sales charge

    Excluding sales charge     Expense ratios(%)  
 
    Inception date   1 year     5 year     10 year     1 year     5 year     10 year     Gross     Net2  
                   
Class A (WWTFX)   3-31-2008     1.19       1.87       2.98       5.99       2.82       3.46       0.94       0.70  
                   
Class C (WWTCX)   12-26-2002     4.21       2.05       2.68       5.21       2.05       2.68       1.69       1.45  
                   
Institutional Class (WWTIX)3   10-31-2016                       6.19       2.93       3.52       0.61       0.52  
                   
Bloomberg Barclays Municipal Bond Index4                         7.54       3.53       4.34              
                   
Bloomberg Barclays Wisconsin Municipal Bond Index5                         6.61       3.17       3.96              

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, wfam.com.

Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.

For Class A shares, the maximum front-end sales charge is 4.50%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.

Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. 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). The Fund is exposed to Wisconsin and Puerto Rico municipal securities risk, high-yield securities risk, and nondiversification funds risk. Consult the Fund’s prospectus for additional information on these and other risks. A portion of the Fund’s income may be subject to federal, state, and/or local income taxes or the Alternative Minimum Tax (AMT). Any capital gains distributions may be taxable.

 

Please see footnotes on page 5.

 

 

4  |  Wells Fargo Wisconsin Tax-Free Fund


Performance highlights (unaudited)

 

Effective maturity distribution as of December 31, 20196
LOGO
Credit quality as of December 31, 20197

 

LOGO

 

 

 

 

 

 

1 

Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report.

 

2 

The manager has contractually committed through October 31, 2020, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.70% for Class A, 1.45% for Class C, and 0.52% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Without this cap, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses.

 

3 

Historical performance shown for the Institutional Class shares prior to their inception reflects the performance of the Class A shares, and is not adjusted to reflect Institutional Class expenses. If these expenses had been included, returns for Institutional Class would be higher.

 

4 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

5 

The Bloomberg Barclays Wisconsin Municipal Bond Index is the Wisconsin component of the Bloomberg Barclays Municipal Bond Index. You cannot invest directly in an index.

 

6 

Amounts are calculated based on the long-term total investments of the Fund. These amounts are subject to change and may have changed since the date specified.

 

7 

The credit quality distribution of portfolio holdings reflected in the chart is based on ratings from Standard & Poor’s, Moody’s Investors Service, and/ or Fitch Ratings Ltd. Credit quality ratings apply to the underlying holdings of the Fund and not to the Fund itself. The percentages of the Fund’s portfolio with the ratings depicted in the chart are calculated based on the total market value of fixed income securities held by the Fund. If a security was rated by all three rating agencies, the middle rating was utilized. If rated by two of three rating agencies, the lower rating was utilized, and if rated by one of the rating agencies, that rating was utilized. Standard & Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories. Standard & Poor’s rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody’s rates the creditworthiness of bonds, ranging from Aaa (highest) to C (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Moody’s rates the creditworthiness of short-term U.S. tax-exempt municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Credit quality distribution is subject to change and may have changed since the date specified.

 

 

Wells Fargo Wisconsin Tax-Free Fund  |  5


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 and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing 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 period from July 1, 2019 to December 31, 2019.

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) and contingent deferred sales charges. 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
account  value
7-1-2019
     Ending
account value
12-31-2019
     Expenses
paid during
the period¹
     Annualized net
expense ratio
 
         

Class A

           

Actual

   $ 1,000.00      $ 1,018.66      $ 3.55        0.70

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,021.62      $ 3.56        0.70
         

Class C

           

Actual

   $ 1,000.00      $ 1,014.83      $ 7.34        1.45

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,017.85      $ 7.35        1.45
         

Institutional Class

           

Actual

   $ 1,000.00      $ 1,019.58      $ 2.64        0.52

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.52      $ 2.64        0.52

 

 

 

1

Expenses paid is equal to the annualized net expense ratio of each class 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).

 

 

6  |  Wells Fargo Wisconsin Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
   

Maturity

date

     Principal      Value  
Municipal Obligations: 100.49%          

Arizona: 1.69%

         
Health Revenue: 1.69%                          

Phoenix AZ Industrial Development Authority Various Mayo Clinic Series A (Bank of America NA SPA) ø

    1.55     11-15-2052      $ 2,500,000      $ 2,500,000  
         

 

 

 

Guam: 4.97%

         
Airport Revenue: 2.32%                          

Guam International Airport Authority Series C (AGM Insured)

    6.13       10-1-2043        1,500,000        1,729,273  

Guam Port Authority AMT Series A

    5.00       7-1-2048        1,000,000        1,172,490  

Guam Port Authority AMT Series B

    5.00       7-1-2034        445,000        530,088  
            3,431,851  
         

 

 

 
Miscellaneous Revenue: 1.02%                          

Guam Education Financing Foundation Refunding Bond Certificate of Participation Series 2016A

    5.00       10-1-2022        1,400,000        1,505,280  
         

 

 

 
Tax Revenue: 0.89%                          

Guam Government Business Privilage Tax Revenue Series 2011A

    5.00       1-1-2021        670,000        690,770  

Guam Government Limited Obligation Bonds Section 30 Series A

    5.00       12-1-2021        600,000        635,418  
            1,326,188  
         

 

 

 
Utilities Revenue: 0.35%                          

Guam Power Authority Series A (AGM Insured)

    5.00       10-1-2020        500,000        513,350  
         

 

 

 
Water & Sewer Revenue: 0.39%                          

Guam Government Waterworks Authority Water and Refunding Bond

    5.00       7-1-2034        500,000        584,620  
         

 

 

 
            7,361,289  
         

 

 

 

Illinois: 3.33%

         
GO Revenue: 1.71%                          

Chicago IL CAB City Colleges (National Insured) ¤

    0.00       1-1-2027        1,000,000        831,040  

Chicago IL Park District Special Recreation Activity Series E

    5.00       11-15-2027        1,000,000        1,176,500  

Illinois Refunding Bond Series 2018A

    5.00       10-1-2021        500,000        526,635  
            2,534,175  
         

 

 

 
Miscellaneous Revenue: 0.86%                          

Illinois

    5.50       7-1-2026        250,000        276,815  

Illinois Series 2017D

    5.00       11-1-2022        250,000        269,855  

Illinois Series C

    5.00       11-1-2029        630,000        721,060  
            1,267,730  
         

 

 

 
Tax Revenue: 0.70%                          

Metropolitan Pier & Exposition Authority McCormick Place Expansion Project Series B

    5.00       12-15-2028        970,000        1,037,114  
         

 

 

 
Water & Sewer Revenue: 0.06%                          

Chicago IL Waterworks Unrefunded Bond (AGM Insured)

    5.00       11-1-2020        95,000        95,314  
         

 

 

 
            4,934,333  
         

 

 

 

Michigan: 0.07%

         
Miscellaneous Revenue: 0.07%                          

Michigan Municipal Bond Authority Local Government Loan Program Series A (Ambac Insured)

    4.00       11-1-2021        110,000        110,231  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Wisconsin Tax-Free Fund  |  7


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
   

Maturity

date

     Principal      Value  

New Jersey: 1.70%

         
Miscellaneous Revenue: 0.75%                          

New Jersey EDA Series EE

    5.00 %       9-1-2023      $ 1,070,000      $ 1,113,934  
         

 

 

 
Transportation Revenue: 0.95%                          

New Jersey TTFA CAB Series A ¤

    0.00       12-15-2031        2,000,000        1,410,480  
         

 

 

 
            2,524,414  
         

 

 

 

New York: 0.74%

         
Education Revenue: 0.74%                          

Hempstead NY Local Development Corporation The Academy Charter School Project Series A

    6.24       2-1-2047        1,000,000        1,098,710  
         

 

 

 

Puerto Rico: 0.21%

         
Transportation Revenue: 0.21%                          

Puerto Rico Highway & Transportation Authority Refunding Bond Series L (BHAC/FGIC Insured)

    5.25       7-1-2021        300,000        313,194  
         

 

 

 

Texas: 1.51%

         
GO Revenue: 1.51%                          

Denton TX Independent School District School Building

    4.00       8-15-2048        2,000,000        2,237,060  
         

 

 

 

Virgin Islands: 2.42%

         
Miscellaneous Revenue: 1.04%                          

Virgin Islands PFA 144A

    5.00       9-1-2020        750,000        763,440  

Virgin Islands PFA Gross Receipts Taxes Loan Notes (National Insured)

    4.00       10-1-2020        450,000        455,252  

Virgin Islands PFA Gross Receipts Taxes Loan Notes (AGM Insured)

    4.00       10-1-2022        310,000        323,550  
            1,542,242  
         

 

 

 
Tax Revenue: 1.38%                          

Virgin Islands PFA Matching Fund Loan Notes Senior Lien Series B (AGM Insured)

    5.00       10-1-2025        2,000,000        2,044,020  
         

 

 

 
            3,586,262  
         

 

 

 

Wisconsin: 83.85%

         
Education Revenue: 9.99%                          

Green Bay WI Housing Authority University Village Housing Incorporated

    4.38       4-1-2022        200,000        200,368  

Green Bay WI Housing Authority University Village Housing Incorporated

    5.00       4-1-2030        1,410,000        1,413,779  

Madison WI CDA Wisconsin Alumni Research Foundation

    5.00       10-1-2023        150,000        150,215  

Madison WI CDA Wisconsin Alumni Research Foundation

    5.00       10-1-2025        475,000        475,679  

Madison WI CDA Wisconsin Alumni Research Foundation

    5.00       10-1-2039        5,000,000        5,007,150  

Milwaukee WI RDA Milwaukee School of Engineering Project (AGM Insured)

    2.75       4-1-2021        1,080,000        1,101,816  

Milwaukee WI RDA Milwaukee School of Engineering Project (AGM Insured)

    4.10       4-1-2032        1,500,000        1,569,540  

Milwaukee WI RDA Science Education Consortium Incorporated Project Series A

    6.25       8-1-2043        2,100,000        2,329,614  

Platteville WI RDA University of Wisconsin Platteville Real Estate Foundation Incorporated

    5.00       7-1-2022        950,000        989,007  

Platteville WI RDA University of Wisconsin Platteville Real Estate Foundation Incorporated

    5.00       7-1-2032        1,500,000        1,576,440  
            14,813,608  
         

 

 

 
GO Revenue: 1.67%                          

Milwaukee WI Series B6

    2.00       4-1-2021        175,000        176,962  

Milwaukee WI Series B6

    3.00       4-1-2024        570,000        610,231  

Milwaukee WI Series B6

    5.00       4-1-2022        350,000        379,670  

Milwaukee WI Series B6

    5.00       4-1-2023        580,000        649,548  

Milwaukee WI Series B6

    5.00       4-1-2025        550,000        651,948  
            2,468,359  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

8  |  Wells Fargo Wisconsin Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
   

Maturity

date

     Principal      Value  
Health Revenue: 19.81%                          

University of Wisconsin Hospitals & Clinics Authority Refunding Bond Series B (JPMorgan Chase & Company SPA) ø

    1.67 %       4-1-2048      $ 1,700,000      $ 1,700,000  

University of Wisconsin Hospitals & Clinics Authority Revenue Various Refunding Bond Series C (BMO Harris Bank NA SPA) ø

    1.63       4-1-2048        2,900,000        2,900,000  

Wisconsin Health and Educational Facilities Authority Revenue Bond Marshfield Clinic Health System, Incorporated Series 2018A (Barclays Bank plc LOC) ø

    1.65       2-15-2050        1,000,000        1,000,000  

Wisconsin HEFA Bellin Memorial Hospital Obligated Group

    4.00       12-1-2035        1,000,000        1,071,640  

Wisconsin HEFA Bellin Memorial Hospital Obligated Group

    5.00       12-1-2025        1,500,000        1,718,520  

Wisconsin HEFA Bellin Memorial Hospital Obligated Group

    5.00       12-1-2026        1,740,000        1,987,150  

Wisconsin HEFA Marshfield Clinic Health System Obligated Group Series C

    5.00       2-15-2020        850,000        853,596  

Wisconsin HEFA Marshfield Clinic Health System Obligated Group Series C

    5.00       2-15-2027        400,000        486,260  

Wisconsin HEFA Marshfield Clinic Health System Obligated Group Series C

    5.00       2-15-2028        650,000        782,126  

Wisconsin HEFA Marshfield Clinic Health System Obligated Group Series C

    5.00       2-15-2029        500,000        597,580  

Wisconsin HEFA Monroe Clinic Incorporated

    3.00       2-15-2035        520,000        565,079  

Wisconsin HEFA Monroe Clinic Incorporated

    4.00       2-15-2031        900,000        1,028,052  

Wisconsin HEFA Monroe Clinic Incorporated

    4.00       2-15-2033        550,000        628,254  

Wisconsin HEFA Monroe Clinic Incorporated

    5.00       2-15-2028        900,000        1,076,562  

Wisconsin HEFA Monroe Clinic Incorporated

    5.00       2-15-2029        575,000        687,804  

Wisconsin HEFA Monroe Clinic Incorporated

    5.00       2-15-2030        300,000        358,854  

Wisconsin HEFA Revenue Bellin Memorial Hospital Incorporate Series A

    5.00       12-1-2027        175,000        216,340  

Wisconsin HEFA Revenue Bellin Memorial Hospital Incorporate Series A

    5.00       12-1-2028        150,000        188,168  

Wisconsin HEFA Revenue Bellin Memorial Hospital Incorporate Series A

    5.00       12-1-2029        150,000        190,793  

Wisconsin HEFA Revenue Bellin Memorial Hospital Incorporate Series A

    5.00       12-1-2030        275,000        346,849  

Wisconsin HEFA Revenue Beloit Health System Incorporate %%

    4.00       7-1-2036        3,000,000        3,349,530  

Wisconsin HEFA Revenue Beloit Health System Incorporate %%

    5.00       7-1-2029        1,270,000        1,601,838  

Wisconsin HEFA Revenue Various Marshfield Clinic Health (Barclays Bank plc LOC) ø

    1.70       2-15-2050        2,400,000        2,400,000  

Wisconsin HEFA Rogers Memorial Hospital Incorporated Series B

    5.00       7-1-2044        3,250,000        3,638,180  
            29,373,175  
         

 

 

 
Housing Revenue: 17.39%                          

Wisconsin HEFA Aspirus Wausau Hospital Incorporated Obligated Group Series 2004B (JPMorgan Chase & Company LOC) ø

    1.70       8-15-2034        4,000,000        4,000,000  

Wisconsin Housing & EDA AMT Series A

    4.63       11-1-2037        25,000        25,033  

Wisconsin Housing & EDA Madison Pool Project Series A

    4.55       7-1-2037        165,000        178,880  

Wisconsin Housing & EDA Madison Pool Project Series A

    4.70       7-1-2047        2,300,000        2,485,794  

Wisconsin Housing & EDA Madison Pool Project Series A

    4.85       7-1-2052        3,000,000        3,236,010  

Wisconsin Housing & EDA President House Project (Associated Trust Company NA LOC) ø

    1.71       8-1-2046        1,535,000        1,535,000  

Wisconsin Housing & EDA Series A (FHLB SPA) ø

    1.58       4-1-2046        2,985,000        2,985,000  

Wisconsin Housing & EDA Series A

    1.95       12-1-2020        55,000        55,377  

Wisconsin Housing & EDA Series A

    3.00       5-1-2022        100,000        103,483  

Wisconsin Housing & EDA Series A

    3.00       11-1-2022        125,000        130,341  

Wisconsin Housing & EDA Series A

    3.40       11-1-2032        2,450,000        2,586,980  

Wisconsin Housing & EDA Series A

    3.95       11-1-2038        2,000,000        2,157,840  

Wisconsin Housing & EDA Series A

    4.05       12-1-2049        800,000        829,240  

Wisconsin Housing & EDA Series A

    5.75       11-1-2043        2,835,000        2,861,904  

Wisconsin Housing & EDA Series B (FHLB SPA) ø

    1.61       5-1-2055        1,550,000        1,550,000  

Wisconsin Housing & EDA Series C

    3.88       11-1-2035        1,000,000        1,059,960  
            25,780,842  
         

 

 

 
Industrial Development Revenue: 2.70%                          

Appleton WI Recovery Zone Facilities Foremost Farms Project Series 2010 (CoBank ACB LOC) ø

    1.66       5-1-2037        4,000,000        4,000,000  
         

 

 

 
Miscellaneous Revenue: 17.42%                          

Ashwaubenon WI CDA Lease Revenue CAB Brown County Expo Center ¤

    0.00       6-1-2049        8,000,000        2,778,160  

Ashwaubenon WI CDA Lease Revenue Brown County Expo Center Project

    4.00       6-1-2035        900,000        1,034,298  

Kaukauna WI RDA

    3.75       6-1-2032        850,000        904,579  

Kaukauna WI RDA

    4.00       6-1-2020        100,000        101,065  

Kaukauna WI RDA

    4.00       6-1-2021        310,000        321,265  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Wisconsin Tax-Free Fund  |  9


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
   

Maturity

date

     Principal      Value  
Miscellaneous Revenue (continued)                          

Kaukauna WI RDA

    4.00 %       6-1-2022      $ 235,000      $ 249,194  

Kaukauna WI RDA

    4.00       6-1-2023        200,000        216,680  

Kaukauna WI RDA

    4.00       6-1-2025        425,000        475,817  

Kaukauna WI RDA

    4.00       6-1-2028        425,000        469,544  

Kaukauna WI RDA

    4.00       6-1-2035        900,000        973,935  

Milwaukee WI RDA Lease Public Schools Series A

    5.00       11-15-2026        220,000        268,858  

Milwaukee WI RDA Lease Revenue Public Schools

    5.00       11-15-2033        750,000        887,985  

Milwaukee WI RDA Milwaukee Public Schools

    5.00       11-15-2034        675,000        797,573  

Milwaukee WI RDA Milwaukee Public Schools

    5.00       11-15-2035        1,000,000        1,180,210  

Milwaukee WI RDA Milwaukee Public Schools

    5.00       11-15-2036        500,000        589,125  

Milwaukee WI RDA Milwaukee Public Schools

    5.00       11-15-2028        325,000        392,551  

Milwaukee WI RDA Milwaukee Public Schools Series A

    5.00       11-15-2027        1,020,000        1,237,117  

Milwaukee WI RDA Milwaukee Public Schools Series A

    5.00       11-15-2028        1,000,000        1,207,850  

Milwaukee WI RDA Milwaukee Public Schools Series A

    5.00       11-15-2031        750,000        894,705  

Milwaukee WI RDA Public Schools Series A

    5.00       8-1-2020        1,300,000        1,328,418  

Milwaukee WI RDA Public Schools Series A ##

    5.00       8-1-2021        3,330,000        3,526,603  

Milwaukee WI RDA Revenue Refunding Bond Milwaukee Public Schools (National Insured)

    4.00       8-1-2023        925,000        1,009,721  

Prairie du Chien WI RDA Series B

    1.65       9-1-2020        205,000        205,510  

Warrens WI CDA Economic Improvements

    5.10       11-1-2020        70,000        68,095  

Weston WI CDA Series A

    1.50       10-1-2020        500,000        500,330  

Weston WI CDA Series A

    1.60       10-1-2021        340,000        341,108  

Weston WI CDA Series A

    1.75       10-1-2022        200,000        201,814  

Weston WI CDA Series A

    1.90       10-1-2023        800,000        813,872  

Weston WI CDA Series A

    2.00       10-1-2024        625,000        640,469  

Weston WI CDA Series A

    2.15       10-1-2025        615,000        636,968  

Weston WI CDA Series A

    2.25       10-1-2026        940,000        980,448  

Weston WI CDA Series A

    2.40       10-1-2027        570,000        593,535  
            25,827,402  
         

 

 

 
Tax Revenue: 14.87%                          

Mount Pleasant WI Tax Increment Series 2018A

    4.00       4-1-2035        1,295,000        1,461,913  

Southeast Wisconsin Professional Baseball Park District Series A (National Insured)

    5.50       12-15-2021        2,000,000        2,169,300  

Southeast Wisconsin Professional Baseball Park District Series A (National Insured)

    5.50       12-15-2023        1,600,000        1,870,704  

Southeast Wisconsin Professional Baseball Park District Series A (National Insured) ##

    5.50       12-15-2026        2,435,000        3,006,860  

Warrens WI CDA Interim Workout Extension

    3.70       11-1-2029        155,045        99,463  

Wisconsin Center District CAB (AGM Insured) ¤

    0.00       12-15-2030        295,000        231,065  

Wisconsin Center District CAB Senior Dedicated Milwaukee Arena Project Series A (Build America Mutual Assurance Company Insured) ¤

    0.00       12-15-2033        2,985,000        1,977,383  

Wisconsin Center District CAB Series A (National Insured) ¤

    0.00       12-15-2027        100,000        85,856  

Wisconsin Center District Junior Dedicated Bond (AGM Insured)

    5.25       12-15-2023        2,150,000        2,355,755  

Wisconsin Center District Junior Dedicated Bond (AGM Insured)

    5.25       12-15-2027        1,005,000        1,205,769  

Wisconsin Center District Junior Dedicated Bond Series A

    5.00       12-15-2022        730,000        801,642  

Wisconsin Center District Junior Dedicated Bond Series A

    5.00       12-15-2030        2,100,000        2,300,256  

Wisconsin Center District Milwaukee Arena Project

    4.00       12-15-2032        1,100,000        1,229,723  

Wisconsin Center District Milwaukee Arena Project

    4.00       12-15-2033        920,000        1,026,683  

Wisconsin Center District Milwaukee Arena Project

    4.00       12-15-2034        2,000,000        2,221,140  
            22,043,512  
         

 

 

 
            124,306,898  
         

 

 

 

Total Municipal Obligations (Cost $142,701,252)

            148,972,391        
         

 

 

 

 

Total investments in securities (Cost $142,701,252)     100.49        148,972,391  

Other assets and liabilities, net

    (0.49        (725,561
 

 

 

      

 

 

 
Total net assets     100.00      $ 148,246,830  
 

 

 

      

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

10  |  Wells Fargo Wisconsin Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

ø

Variable rate demand notes are subject to a demand feature which reduces the effective maturity. The maturity date shown represents the final maturity date of the security. The interest rate is determined and reset by the issuer daily, weekly, or monthly depending upon the terms of the security. The rate shown is the rate in effect at period end.

¤

The security is issued in zero coupon form with no periodic interest payments.

144A

The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933.

%%

The security is purchased on a when-issued basis.

##

All or a portion of this security is segregated for when-issued securities.

Abbreviations:

 

AGM

Assured Guaranty Municipal

 

Ambac

Ambac Financial Group Incorporated

 

AMT

Alternative minimum tax

 

BHAC

Berkshire Hathaway Assurance Corporation

 

CAB

Capital appreciation bond

 

CDA

Community Development Authority

 

EDA

Economic Development Authority

 

FGIC

Financial Guaranty Insurance Corporation

 

FHLB

Federal Home Loan Bank

 

GO

General obligation

 

HEFA

Health & Educational Facilities Authority

 

LOC

Letter of credit

 

National

National Public Finance Guarantee Corporation

 

PFA

Public Finance Authority

 

RDA

Redevelopment Authority

 

TTFA

Transportation Trust Fund Authority

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Wisconsin Tax-Free Fund  |  11


Statement of assets and liabilities—December 31, 2019 (unaudited)

 

         

Assets

 

Investments in unaffiliated securities, at value (cost $142,701,252)

  $ 148,972,391  

Cash

    3,096,135  

Receivable for Fund shares sold

    297,083  

Receivable for interest

    1,208,816  

Prepaid expenses and other assets

    40,529  
 

 

 

 

Total assets

    153,614,954  
 

 

 

 

Liabilities

 

Payable for investments purchased

    4,888,592  

Payable for Fund shares redeemed

    369,410  

Management fee payable

    25,863  

Dividends payable

    34,728  

Administration fees payable

    16,858  

Distribution fee payable

    4,167  

Trustees’ fees and expenses payable

    4,170  

Accrued expenses and other liabilities

    24,336  
 

 

 

 

Total liabilities

    5,368,124  
 

 

 

 

Total net assets

  $ 148,246,830  
 

 

 

 

Net assets consist of

 

Paid-in capital

  $ 141,986,995  

Total distributable earnings

    6,259,835  
 

 

 

 

Total net assets

  $ 148,246,830  
 

 

 

 

Computation of net asset value and offering price per share

 

Net assets – Class A

  $ 87,049,561  

Shares outstanding – Class A1

    7,837,211  

Net asset value per share – Class A

    $11.11  

Maximum offering price per share – Class A2

    $11.63  

Net assets – Class C

  $ 6,411,581  

Shares outstanding – Class C1

    577,235  

Net asset value per share – Class C

    $11.11  

Net assets – Institutional Class

  $ 54,785,688  

Shares outstanding – Institutional Class1

    4,931,936  

Net asset value per share – Institutional Class

    $11.11  

 

 

 

1 

The Fund has an unlimited number of authorized shares.

 

2 

Maximum offering price is computed as 100/95.50 of net asset value. On investments of $50,000 or more, the offering price is reduced.

 

The accompanying notes are an integral part of these financial statements.

 

 

12  |  Wells Fargo Wisconsin Tax-Free Fund


Statement of operations—six months ended December 31, 2019 (unaudited)

 

         

Investment income

 

Interest

  $ 2,159,209  
 

 

 

 

Expenses

 

Management fee

    284,008  

Administration fees

 

Class A

    69,713  

Class C

    5,187  

Institutional Class

    19,351  

Shareholder servicing fees

 

Class A

    108,927  

Class C

    8,105  

Distribution fee

 

Class C

    24,314  

Custody and accounting fees

    2,070  

Professional fees

    27,127  

Registration fees

    51,182  

Shareholder report expenses

    9,187  

Trustees’ fees and expenses

    10,804  

Other fees and expenses

    4,268  
 

 

 

 

Total expenses

    624,243  

Less: Fee waivers and/or expense reimbursements

 

Fund-level

    (126,444

Class A

    (18,959

Class C

    (1,398
 

 

 

 

Net expenses

    477,442  
 

 

 

 

Net investment income

    1,681,767  
 

 

 

 

Realized and unrealized gains (losses) on investments

 

Net realized gains on investments

    86,672  

Net change in unrealized gains (losses) on investments

    769,428  
 

 

 

 

Net realized and unrealized gains (losses) on investments

    856,100  
 

 

 

 

Net increase in net assets resulting from operations

  $ 2,537,867  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Wisconsin Tax-Free Fund  |  13


Statement of changes in net assets

 

     Six months ended
December 31, 2019
(unaudited)
    Year ended
June 30, 2019
 

Operations

       

Net investment income

    $ 1,681,767       $ 3,516,403  

Net realized gains on investments

      86,672         126,558  

Net change in unrealized gains (losses) on investments

      769,428         3,483,261  
 

 

 

 

Net increase in net assets resulting from operations

      2,537,867         7,126,222  
 

 

 

 

Distributions to shareholders from net investment income and net realized gains

       

Class A

      (1,056,451       (2,238,227

Class C

      (54,166       (143,110

Institutional Class

      (631,179       (1,134,640
 

 

 

 

Total distributions to shareholders

      (1,741,796       (3,515,977
 

 

 

 

Capital share transactions

    Shares         Shares    

Proceeds from shares sold

       

Class A

    846,822       9,415,293       1,158,956       12,526,702  

Class C

    49,899       555,310       74,617       800,958  

Institutional Class

    1,165,754       12,949,445       1,478,452       15,865,780  
 

 

 

 
      22,920,048         29,193,440  
 

 

 

 

Reinvestment of distributions

       

Class A

    80,601       896,420       172,502       1,862,955  

Class C

    4,831       53,725       13,234       142,770  

Institutional Class

    54,843       609,929       104,377       1,127,881  
 

 

 

 
      1,560,074         3,133,606  
 

 

 

 

Payment for shares redeemed

       

Class A

    (780,748     (8,684,872     (1,815,160     (19,476,467

Class C

    (83,011     (923,831     (236,996     (2,549,096

Institutional Class

    (270,788     (3,010,170     (969,212     (10,399,087
 

 

 

 
      (12,618,873       (32,424,650
 

 

 

 

Net increase (decrease) in net assets resulting from capital share transactions

      11,861,249         (97,604
 

 

 

 

Total increase in net assets

      12,657,320         3,512,641  
 

 

 

 

Net assets

       

Beginning of period

      135,589,510         132,076,869  
 

 

 

 

End of period

    $ 148,246,830       $ 135,589,510  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

14  |  Wells Fargo Wisconsin Tax-Free Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS A   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $11.04       $10.74       $10.83       $11.16       $10.83       $10.96  

Net investment income

    0.13       0.29       0.28       0.26       0.25       0.24  

Net realized and unrealized gains (losses) on investments

    0.07       0.30       (0.09     (0.32     0.33       (0.02
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.20       0.59       0.19       (0.06     0.58       0.22  

Distributions to shareholders from

           

Net investment income

    (0.13     (0.29     (0.28     (0.26     (0.25     (0.24

Net realized gains

    (0.00 )1      0.00       0.00       (0.01     (0.00 )1      (0.11
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.13     (0.29     (0.28     (0.27     (0.25     (0.35

Net asset value, end of period

    $11.11       $11.04       $10.74       $10.83       $11.16       $10.83  

Total return2

    1.87     5.56     1.76     (0.48 )%      5.44     2.07

Ratios to average net assets (annualized)

           

Gross expenses

    0.96     0.94     0.88     0.93     0.94     0.90

Net expenses

    0.70     0.70     0.70     0.70     0.70     0.70

Net investment income

    2.34     2.66     2.57     2.41     2.26     2.22

Supplemental data

           

Portfolio turnover rate

    9     8     11     27     16     28

Net assets, end of period (000s omitted)

    $87,050       $84,924       $87,790       $131,518       $160,480       $23,824  

 

 

 

 

1 

Amount is less than $0.005.

 

2 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Wisconsin Tax-Free Fund  |  15


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS C   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $11.04       $10.74       $10.83       $11.16       $10.83       $10.96  

Net investment income

    0.09       0.21       0.20       0.18       0.17       0.16  

Net realized and unrealized gains (losses) on investments

    0.07       0.30       (0.09     (0.32     0.33       (0.02
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.16       0.51       0.11       (0.14     0.50       0.14  

Distributions to shareholders from

           

Net investment income

    (0.09     (0.21     (0.20     (0.18     (0.17     (0.16

Net realized gains

    (0.00 )1      0.00       0.00       (0.01     (0.00 )1      (0.11
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.09     (0.21     (0.20     (0.19     (0.17     (0.27

Net asset value, end of period

    $11.11       $11.04       $10.74       $10.83       $11.16       $10.83  

Total return2

    1.48     4.78     1.01     (1.22 )%      4.66     1.31

Ratios to average net assets (annualized)

           

Gross expenses

    1.71     1.69     1.63     1.68     1.68     1.65

Net expenses

    1.45     1.45     1.45     1.45     1.45     1.45

Net investment income

    1.59     1.92     1.83     1.67     1.52     1.47

Supplemental data

           

Portfolio turnover rate

    9     8     11     27     16     28

Net assets, end of period (000s omitted)

    $6,412       $6,687       $8,105       $9,449       $10,949       $10,923  

 

 

 

 

1 

Amount is less than $0.005.

 

2 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

16  |  Wells Fargo Wisconsin Tax-Free Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
INSTITUTIONAL CLASS   2019     2018     20171  

Net asset value, beginning of period

    $11.04       $10.74       $10.83       $10.99  

Net investment income

    0.14       0.31       0.30       0.20  

Net realized and unrealized gains (losses) on investments

    0.07       0.30       (0.09     (0.15
 

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.21       0.61       0.21       0.05  

Distributions to shareholders from

       

Net investment income

    (0.14     (0.31     (0.30     (0.20

Net realized gains

    (0.00 )2      0.00       0.00       (0.01
 

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.14     (0.31     (0.30     (0.21

Net asset value, end of period

    $11.11       $11.04       $10.74       $10.83  

Total return3

    1.96     5.75     1.95     0.44

Ratios to average net assets (annualized)

       

Gross expenses

    0.63     0.61     0.55     0.54

Net expenses

    0.52     0.52     0.52     0.52

Net investment income

    2.52     2.85     2.79     2.74

Supplemental data

       

Portfolio turnover rate

    9     8     11     27

Net assets, end of period (000s omitted)

    $54,786       $43,978       $36,181       $13,573  

 

 

 

1 

For the period from October 31, 2016 (commencement of class operations) to June 30, 2017

 

2 

Amount is less than $0.005.

 

3 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Wisconsin Tax-Free Fund  |  17


Notes to financial statements (unaudited)

 

1. ORGANIZATION

Wells Fargo Funds Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Wells Fargo Wisconsin Tax-Free Fund (the “Fund”) which is a non-diversified series of the Trust.

2. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Securities valuation

All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.

Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

Futures contracts that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.

Investments which are not valued using any of the methods discussed above are valued at their fair value, as determined in good faith by the Board of Trustees of the Fund. The Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities, unless the determination has been delegated to the Wells Fargo Asset Management Pricing Committee at Wells Fargo Funds Management, LLC (“Funds Management”). The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Valuation Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees receives reports on any valuation actions taken by the Valuation Committee or the Wells Fargo Asset Management Pricing Committee which may include items for ratification.

When-issued transactions

The Fund may purchase securities on a forward commitment or when-issued basis. The Fund records a when-issued transaction on the trade date and will segregate assets in an amount at least equal in value to the Fund’s commitment to purchase when-issued securities. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

Futures contracts

Futures contracts are agreements between the Fund and a counterparty to buy or sell a specific amount of a commodity, financial instrument or currency at a specified price and on a specified date. The Fund may buy and sell futures contracts in order to gain exposure to, or protect against, changes in interest rates and is subject to interest rate risk. 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 generally entered into on a regulated futures exchange and cleared through a clearinghouse associated with the exchange. With futures contracts, there is minimal counterparty risk to the Fund since futures contracts are exchange traded and the exchange’s clearinghouse, as the counterparty to all exchange traded futures, guarantees the futures contracts against default.

Upon entering into a futures contracts, the Fund is required to deposit either cash or securities (initial margin) with the broker in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are paid to or from the broker each day equal to the daily changes in the contract value. Such payments are recorded as unrealized gains or losses and, if any, shown as variation margin receivable (payable) in the Statement of Assets and Liabilities. Should the Fund fail to make requested variation margin payments, the broker can gain access to the initial margin to satisfy the Fund’s payment obligations. When the contracts are closed, a realized gain or loss is recorded in the Statement of Operations.

 

 

18  |  Wells Fargo Wisconsin Tax-Free Fund


Notes to financial statements (unaudited)

 

Security transactions and income recognition

Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. 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 been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Distributions to shareholders

Distributions to shareholders from net investment income are declared daily and paid monthly. Distributions from net realized gains, if any, are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.

Federal and other taxes

The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable and tax-exempt income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.

The 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. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

As of December 31, 2019, the aggregate cost of all investments for federal income tax purposes was $142,700,767 and the unrealized gains (losses) consisted of:

 

Gross unrealized gains

   $ 6,291,507  

Gross unrealized losses

     (19,883

Net unrealized gains

   $ 6,271,624  

As of June 30, 2019, the Fund had capital loss carryforwards which consisted of $28,128 in short-term capital losses.

Class allocations

The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.

3. FAIR VALUATION MEASUREMENTS

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:

 

 

Level 1 – quoted prices in active markets for identical securities

 

 

Level 2 – other significant observable inputs (including quoted prices for similar securities, 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 investments in securities are not necessarily an indication of the risk associated with investing in those securities.

 

 

Wells Fargo Wisconsin Tax-Free Fund  |  19


Notes to financial statements (unaudited)

 

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of December 31, 2019:

 

      Quoted prices
(Level 1)
     Other significant
observable inputs
(Level 2)
    

Significant
unobservable inputs

(Level 3)

     Total  

Assets

           

Investments in:

           

Municipal obligations

   $ 0      $ 148,972,391      $ 0      $ 148,972,391  

Additional sector, industry or geographic detail is included in the Portfolio of Investments.

For the six months ended December 31, 2019, the Fund did not have any transfers into/out of Level 3.

4. TRANSACTIONS WITH AFFILIATES

Management fee

Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”), is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:

 

Average daily net assets    Management fee  

First $500 million

     0.400

Next $500 million

     0.375  

Next $2 billion

     0.350  

Next $2 billion

     0.325  

Next $5 billion

     0.290  

Over $10 billion

     0.280  

For the six months ended December 31, 2019, the management fee was equivalent to an annual rate of 0.40% of the Fund’s average daily net assets.

Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Funds Management. Wells Capital Management Incorporated, an affiliate of Funds Management and an indirect wholly owned subsidiary of Wells Fargo, is the subadviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.20% and declining to 0.10% as the average daily net assets of the Fund increase.

Administration fees

Under a class-level administration agreement, Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:

 

     Class-level
administration fee
 

Class A, Class C

     0.16

Institutional Class

     0.08  

Waivers and/or expense reimbursements

Funds Management has contractually waived and/or reimbursed management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Funds Management has waived fees and/or reimbursed expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied

 

 

20  |  Wells Fargo Wisconsin Tax-Free Fund


Notes to financial statements (unaudited)

 

against class specific expenses before fund-level expenses. Funds Management has committed through October 31, 2020 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s expenses at 0.70% for Class A shares, 1.45% for Class C shares, and 0.52% for Institutional Class shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.

Distribution fee

The Trust has adopted a distribution plan for Class C shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Wells Fargo Funds Distributor, LLC (“Funds Distributor”), the principal underwriter, at an annual rate of 0.75% of the average daily net assets of Class C shares.

In addition, Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the six months ended December 31, 2019, Funds Distributor received $1,447 from the sale of Class A shares and $66 in contingent deferred sales charges from redemptions of Class C shares. No contingent deferred sales charges were incurred by Class A shares for the six months ended December 31, 2019.

Shareholder servicing fees

The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A and Class C of the Fund are charged a fee at an annual rate of 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of Wells Fargo.

Interfund transactions

The Fund may purchase or sell portfolio investment securities to certain other Wells Fargo affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund had $8,535,000 and $0 in interfund purchases and sales, respectively, during the six months ended December 31, 2019.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended December 31, 2019 were $11,215,102 and $15,414,470, respectively.

6. BANK BORROWINGS

The Trust (excluding the money market funds), Wells Fargo Master Trust and Wells Fargo Variable Trust are parties to a $280,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the 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, an annual commitment fee equal to 0.25% of the unused balance is allocated to each participating fund.

For the six months ended December 31, 2019, there were no borrowings by the Fund under the agreement.

7. CONCENTRATION RISK

The Fund invests a substantial portion of its assets in issuers of municipal debt securities located in a single state or territory of the U.S. Therefore, it may be more affected by economic and political developments in that state or region than would be a comparable general tax-exempt fund.

8. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and Trustees have been granted certain indemnification rights 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 Fund and, therefore, cannot be estimated.

 

 

Wells Fargo Wisconsin Tax-Free Fund  |  21


Notes to financial statements (unaudited)

 

9. NEW ACCOUNTING PRONOUNCEMENTS

In August 2018, FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 updates the disclosure requirements for fair value measurements by modifying or removing certain disclosures and adding certain new disclosures. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Management has adopted the removal and modification of disclosures early, as permitted, and will adopt the additional new disclosures at the effective date.

In March 2017, FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08

shortens the amortization period for certain callable debt securities held at a premium and requires the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount and discounts will continue to be accreted to the maturity date of the security. ASU 2017-08 is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years. During the current reporting period, management of the Fund adopted the change in accounting policy which did not have a material impact to the Fund’s financial statements.

 

 

22  |  Wells Fargo Wisconsin Tax-Free Fund


Other information (unaudited)

 

PROXY VOTING INFORMATION

A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available, upon request, by calling 1-800-222-8222, visiting our website at wfam.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at wfam.com or by visiting the SEC website at sec.gov.

QUARTERLY PORTFOLIO HOLDINGS INFORMATION

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.

 

 

Wells Fargo Wisconsin Tax-Free Fund  |  23


Other information (unaudited)

 

BOARD OF TRUSTEES AND OFFICERS

Each of the Trustees and Officers1 listed in the table below acts in identical capacities for each fund in the Wells Fargo family of funds, which consists of 149 mutual funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information2. 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

 

Name and

year of birth

  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships
William R. Ebsworth (Born 1957)   Trustee, since 2015   Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Endowment (non-profit organization). Mr. Ebsworth is a CFA® charterholder.   N/A
Jane A. Freeman (Born 1953)   Trustee, since 2015; Chair Liaison, since 2018   Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is a Board Member of The Ruth Bancroft Garden (non-profit organization). She is also an inactive Chartered Financial Analyst.   N/A
Isaiah Harris, Jr. (Born 1952)  

Trustee, since 2009;

Audit Committee Chairman, since 2019

  Retired. Chairman of the Board of CIGNA Corporation since 2009, and Director since 2005. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Child Evangelism Fellowship (non-profit). Mr. Harris is a certified public accountant (inactive status).   CIGNA Corporation
Judith M. Johnson (Born 1949)  

Trustee, since 2008;

Audit Committee Chairman, from 2009 to 2018

  Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.   N/A

 

 

24  |  Wells Fargo Wisconsin Tax-Free Fund


Other information (unaudited)

 

Name and

year of birth

  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships
David F. Larcker (Born 1950)   Trustee, since 2009   James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.   N/A
Olivia S. Mitchell (Born 1953)   Trustee, since 2006; Nominating and Governance Committee Chair, since 2018   International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993.   N/A
Timothy J. Penny (Born 1951)   Trustee, since 1996; Chairman, since 2018   President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.   N/A
James G. Polisson (Born 1959)   Trustee, since 2018   Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations.   N/A
Pamela Wheelock3 (Born 1959)  

Trustee, since January 2020;

previously Trustee from January 2018 to July 2019

  Board member of the Destination Medical Center Economic Development Agency, Rochester, Minnesota since 2019. Acting Commissioner, Minnesota Department of Human Services, July 2019 through September 2019. Human Services Manager (part-time), Minnesota Department of Human Services, October 2019 through December 2019. Chief Operating Officer, Twin Cities Habitat for Humanity from 2017 to 2019. Vice President of University Services, University of Minnesota from 2012 to 2016. Prior thereto, on the Board of Directors, Governance Committee and Finance Committee for the Minnesota Philanthropy Partners (Saint Paul Foundation) from 2012 to 2018, Interim Chief Executive Officer of Blue Cross Blue Shield of Minnesota from 2011 to 2012, Chairman of the Board from 2009 to 2012 and Board Director from 2003 to 2015. Vice President, Leadership and Community Engagement, Bush Foundation, Saint Paul, Minnesota (a private foundation) from 2009 to 2011. Executive Vice President and Chief Financial Officer, Minnesota Sports and Entertainment from 2004 to 2009 and Senior Vice President from 2002 to 2004. Executive Vice President of the Minnesota Wild Foundation from 2004 to 2008. Commissioner of Finance, State of Minnesota, from 1999 to 2002. Currently Board Chair of the Minnesota Wild Foundation since 2010.   N/A

 

*

Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.

 

 

Wells Fargo Wisconsin Tax-Free Fund  |  25


Other information (unaudited)

 

Officers

 

Name and

year of birth

 

Position held and

length of service

  Principal occupations during past five years or longer
Andrew Owen (Born 1960)   President, since 2017   Executive Vice President of Wells Fargo & Company and Head of Affiliated Managers, Wells Fargo Asset Management, since 2014. In addition, Mr. Owen is currently President, Chief Executive Officer and Director of Wells Fargo Funds Management, LLC since 2017. Prior thereto, Executive Vice President responsible for marketing, investments and product development for Wells Fargo Funds Management, LLC, from 2009 to 2014.
Nancy Wiser1 (Born 1967)   Treasurer, since 2012   Executive Vice President of Wells Fargo Funds Management, LLC since 2011. Chief Operating Officer and Chief Compliance Officer at LightBox Capital Management LLC, from 2008 to 2011.
Michelle Rhee4 (Born 1966)   Chief Legal Officer, since 2019   Secretary of Wells Fargo Funds Management, LLC, Chief Legal Counsel of Wells Fargo Asset Management and Assistant General Counsel of Wells Fargo Bank, N.A. since 2018. Associate General Counsel and Managing Director of Bank of America Corporation from 2004 to 2018.
Catherine Kennedy5 (Born 1969)   Secretary, since 2019   Vice President of Wells Fargo Funds Management, LLC and Senior Counsel of the Wells Fargo Legal Department since 2010. Vice President and Senior Counsel of Evergreen Investment Management Company, LLC from 1998 to 2010.
Michael H. Whitaker (Born 1967)   Chief Compliance Officer, since 2016   Chief Compliance Officer of Wells Fargo Asset Management since 2016. Senior Vice President and Chief Compliance Officer for Fidelity Investments from 2007 to 2016.
David Berardi (Born 1975)   Assistant Treasurer, since 2009   Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.
Jeremy DePalma1 (Born 1974)   Assistant Treasurer, since 2009   Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.

 

 

1

Nancy Wiser acts as Treasurer of 64 funds in the Fund Complex. Jeremy DePalma acts as Treasurer of 85 funds and Assistant Treasurer of 64 funds in the Fund Complex.

 

2

The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at wfam.com.

 

3 

Pamela Wheelock was re-appointed to the Board effective January 1, 2020.

 

4 

Michelle Rhee became Chief Legal Officer effective October 22, 2019.

 

5 

Catherine Kennedy became Secretary effective October 22, 2019.

 

 

26  |  Wells Fargo Wisconsin Tax-Free Fund


Appendix (unaudited)

 

Effective on or about May 1, 2020, if you purchase Fund shares through a Janney Montgomery Scott LLC (“Janney”) brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge (“CDSC”), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in the Fund’s Prospectus or SAI.

 

Front-end sales charge* waivers on Class A shares available at Janney
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).
Shares purchased by employees and registered representatives of Janney or its affiliates and their family members as designated by Janney.
Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within ninety (90) days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., right of reinstatement).
Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
Shares acquired through a right of reinstatement.
Class C shares that are no longer subject to a contingent deferred sales charge and are converted to Class A shares of the same fund pursuant to Janney’s policies and procedures.
CDSC waivers on Class A and Class C shares available at Janney
Shares sold upon the death or disability of the shareholder.
Shares sold as part of a systematic withdrawal plan as described in the Fund’s Prospectus.
Shares purchased in connection with a return of excess contributions from an IRA account.
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRS regulations.
Shares sold to pay Janney fees but only if the transaction is initiated by Janney.
Shares acquired through a right of reinstatement.
Shares exchanged into the same share class of a different fund.
Front-end sales charge* discounts available at Janney; breakpoints, rights of accumulation and/or letters of intent
Breakpoints as described in the Fund’s Prospectus.
Rights of accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Janney. Eligible fund family assets not held at Janney may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.
Letters of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Janney Montgomery Scott may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.

 

*

Also referred to as an “initial sales charge.”

 

 

Wells Fargo Wisconsin Tax-Free Fund  |  27


 

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LOGO

For more information

More information about Wells Fargo Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:

Wells Fargo Funds

P.O. Box 219967

Kansas City, MO 64121-9967

Website: wfam.com

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

 

LOGO

 

This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-222-8222 or visit the Fund’s website at wfam.com. Read the prospectus carefully before you invest or send money.

Wells Fargo Asset Management (WFAM) is the trade name for certain investment advisory/management firms owned by Wells Fargo & Company. These firms include but are not limited to Wells Capital Management Incorporated and Wells Fargo Funds Management, LLC. Certain products managed by WFAM entities are distributed by Wells Fargo Funds Distributor, LLC (a broker-dealer and Member FINRA).

This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind—including a recommendation for any specific investment, strategy, or plan.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE     MAY LOSE VALUE


© 2020 Wells Fargo & Company. All rights reserved.

PAR-0120-02399 02-20

SA259/SAR259 12-19

 

 



LOGO

Semi-Annual Report

December 31, 2019

 

Wells Fargo

Pennsylvania Tax-Free Fund

 

 

 

 

Beginning on January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, paper copies of the Wells Fargo Funds’ annual and semi-annual shareholder reports issued after this date will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-222-8222 or by enrolling at wellsfargo.com/advantagedelivery.

You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call 1-800-222-8222. Your election to receive reports in paper will apply to all Wells Fargo Funds held in your account with your financial intermediary or, if you are a direct investor, to all Wells Fargo Funds that you hold.


 

 

Reduce clutter.

Save trees.

Sign up for electronic delivery of prospectuses and shareholder reports at wellsfargo.com/advantagedelivery

 

The views expressed and any forward-looking statements are as of December 31, 2019, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Asset Management. Discussions of individual securities, or the markets generally, or any Wells Fargo Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Asset Management and the Fund disclaim any obligation to publicly update or revise any views expressed or forward-looking statements.

 

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE    MAY LOSE VALUE


 

 

Wells Fargo Pennsylvania Tax-Free Fund  |  1


Letter to shareholders (unaudited)

 

LOGO

Andrew Owen

President

Wells Fargo Funds

“After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July.”

Dear Shareholder:

We are pleased to offer you this semi-annual report for the Wells Fargo Pennsylvania Tax-Free Fund for the six-month period that ended December 31, 2019. Despite periods of market volatility, the year was strongly positive for financial markets as supportive central banks more than offset concerns over slowing global economic growth and international trade tensions.

Overall, both fixed-income and equity investors enjoyed healthy returns. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 10.92% and international stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned 6.96%. The MSCI EM Index (Net)3 gained 7.09%. For bond investors, the Bloomberg Barclays U.S. Aggregate Bond Index4 added 2.45%, the Bloomberg Barclays Global Aggregate ex-USD Index5 returned 0.09%, the Bloomberg Barclays Municipal Bond Index6 gained 2.32%, and the ICE BofA U.S. High Yield Index7 added 3.86%.

Sentiment turned positive, driven by central bank support.

After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July. The gains, primarily driven by geopolitical and monetary policy events, pushed equity markets to new highs. European Central Bank President Mario Draghi indicated the bank was ready to cut rates or buy more assets to prop up inflation if needed. President Trump backed off of tariff threats against Mexico and China. The U.S. Federal Reserve (Fed) implemented a 0.25% federal funds rate cut in July.

Throughout the summer, U.S.-China trade tensions simmered. Major U.S. stock market indices closed July with the worst weekly results of the year. Bond prices gained as Treasury yields fell to multiyear lows, and the yield curve inverted at multiple points along the 30-year arc.

Evidence of a continued global economic slowdown mounted, and central banks in China, New Zealand, and Thailand cut interest rates. Industrial and manufacturing data declined in China, Canada, Japan, and Germany. Adding to global uncertainty, Italy’s prime minister resigned, many feared a crackdown in Hong Kong as protestors sustained their calls for reform, and Boris Johnson planned to suspend Parliament as Brexit’s deadline neared.

In the U.S., the Fed cut interest rates a second time in September. U.S. manufacturing data disappointed investors. The U.S. Congress announced it would pursue an impeachment investigation of President Trump. Meanwhile, the Brexit impasse showed no signs of resolution. Officials in China warned of the negative economic impact of tariffs and trade restrictions. Although the S&P 500 Index finished the third quarter with the best year-to-date returns in more than 20 years, concerns about future returns remained.

 

 

 

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 Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the United States. 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. You cannot invest directly in an index.

 

3 

The MSCI Emerging Markets (EM) Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index.

 

4

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index.

 

5

The Bloomberg Barclays Global Aggregate ex-USD Index is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S. dollar-denominated debt market. You cannot invest directly in an index.

 

6 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

7

The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2020. ICE Data Indices, LLC. All rights reserved.

 

 

2  |  Wells Fargo Pennsylvania Tax-Free Fund


Letter to shareholders (unaudited)

 

The fourth quarter started on a strong note, with a relaxing of U.S.-China trade tensions in October along with renewed optimism for a U.K. Brexit deal and positive macroeconomic data. The initial estimate of U.S. third-quarter gross domestic product growth was a 1.9% annualized rate, while the U.S. unemployment rate fell to a 50-year low of 3.5% in September. However, despite resilience among U.S. consumers, business confidence declined while manufacturing activity contracted. Concerned with a potential economic slowdown, the Fed lowered interest rates another quarter point in late October, its third rate cut in four months. This helped push the S&P 500 Index to a new all-time high, while emerging market equities rallied and global bonds declined overall, reflecting a broad pickup in risk appetite.

Equity markets continued to rally in November despite ongoing geopolitical risks. Hopes for a U.S.-China trade deal buoyed investor confidence. U.S. business sentiment improved slightly, and manufacturing and services activity picked up. Throughout the month, central bank actions were on hold. With that positive backdrop, developed market equities outpaced those in emerging markets, and U.S. stocks outperformed non-U.S. stocks overall. While consumer confidence and purchasing manager activity rose in the eurozone, China reported weakening manufacturing and consumer data. Bond yields rose marginally, leading to slightly negative returns for global government and investment-grade corporate bonds.

Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal, with some details to be worked out. That, along with the landslide election win by the pro-Brexit U.K. Conservative Party and ongoing central bank support, gave investors a greater sense of certainty. U.S. economic indicators were broadly positive, with the exception of manufacturing activity and business confidence. Consumer confidence was resilient, fed by a robust labor market, tame inflation, and lower interest rates, which boosted housing affordability and homebuyer activity. The impeachment of U.S. President Donald Trump, while historically noteworthy, had little impact on markets. Meanwhile, slowing Chinese economic activity, due in part to the trade war, led to further government stimulus at year-end through lower reserve ratios, allowing banks to lend more money.

Don’t let short-term uncertainty derail long-term investment goals.

Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.

Thank you for choosing to invest with Wells Fargo Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.

Sincerely,

 

LOGO

Andrew Owen

President

Wells Fargo Funds

 

“Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal”

 

 

For further information about your Fund, contact your investment professional, visit our website at wfam.com,

or call us directly at 1-800-222-8222.

 

 

 

Wells Fargo Pennsylvania Tax-Free Fund  |  3


Performance highlights (unaudited)

 

Investment objective

The Fund seeks current income exempt from federal income tax and Pennsylvania individual income tax.

Manager

Wells Fargo Funds Management, LLC

Subadviser

Wells Capital Management Incorporated

Portfolio managers

Bruce R. Johns

Robert J. Miller

Average annual total returns (%) as of December 31, 20191

 

 
        Including sales charge     Excluding sales charge     Expense ratios2 (%)  
 
    Inception date   1 year     5 year     10 year     1 year     5 year     10 year     Gross     Net3  
                   
Class A (EKVAX)   12-27-1990     1.75       2.21       4.00       6.55       3.16       4.48       0.95       0.74  
                   
Class C (EKVCX)   2-1-1993     4.76       2.39       3.70       5.76       2.39       3.70       1.70       1.49  
                   
Institutional Class (EKVYX)   11-24-1997                       6.82       3.42       4.74       0.62       0.49  
                   
Bloomberg Barclays Municipal Bond Index4                         7.54       3.53       4.34              
                   
Bloomberg Barclays Pennsylvania Municipal Bond Index5                         8.24       3.86       4.55              

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, wfam.com.

Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.

For Class A shares, the maximum front-end sales charge is 4.50%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.

Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. 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). The Fund is exposed to Pennsylvania municipal securities risk and high-yield securities risk. Consult the Fund’s prospectus for additional information on these and other risks. A portion of the Fund’s income may be subject to federal, state, and/or local income taxes or the Alternative Minimum Tax (AMT). Any capital gains distributions may be taxable.

 

Please see footnotes on page 5.

 

 

4  |  Wells Fargo Pennsylvania Tax-Free Fund


Performance highlights (unaudited)

 

Effective maturity distribution as of December 31, 20196

 

LOGO

 

Credit quality as of December 31, 20197
LOGO
 

 

 

1 

Historical performance shown prior to July 12, 2010, is based on the performance of the Fund’s predecessor, Evergreen Pennsylvania Municipal Bond Fund.

 

2 

Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report.

 

3 

The manager has contractually committed through October 31, 2020, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.74% for Class A, 1.49% for Class C, and 0.49% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Without this cap, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses.

 

4 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

5 

The Bloomberg Barclays Pennsylvania Municipal Bond Index is a Pennsylvania-specific total return index. The index is composed of Pennsylvania bonds. The bonds are all investment-grade, fixed-rate, long-term maturities (greater than two years) and are selected from issues larger than $50 million dated since January 1984. Bonds are added to the index and weighted and updated monthly, with a one-month lag. You cannot invest directly in an index.

 

6 

Amounts are calculated based on the long-term total investments of the Fund. These amounts are subject to change and may have changed since the date specified.

 

7 

The credit quality distribution of portfolio holdings reflected in the chart is based on ratings from Standard & Poor’s, Moody’s Investors Service, and/ or Fitch Ratings Ltd. Credit quality ratings apply to the underlying holdings of the Fund and not to the Fund itself. The percentages of the Fund’s portfolio with the ratings depicted in the chart are calculated based on the total market value of fixed income securities held by the Fund. If a security was rated by all three rating agencies, the middle rating was utilized. If rated by two of three rating agencies, the lower rating was utilized, and if rated by one of the rating agencies, that rating was utilized. Standard & Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories. Standard & Poor’s rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody’s rates the creditworthiness of bonds, ranging from Aaa (highest) to C (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Moody’s rates the creditworthiness of short-term U.S. tax-exempt municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Credit quality distribution is subject to change and may have changed since the date specified.

 

 

Wells Fargo Pennsylvania Tax-Free Fund  |  5


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 and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing 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 period from July 1, 2019 to December 31, 2019.

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) and contingent deferred sales charges. 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

account value

7-1-2019

    

Ending

account value

12-31-2019

    

Expenses

paid during

the period¹

    

Annualized net

expense ratio

 
         

Class A

           

Actual

   $ 1,000.00      $ 1,018.41      $ 3.75        0.74

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,021.42      $ 3.76        0.74
         

Class C

           

Actual

   $ 1,000.00      $ 1,014.59      $ 7.55        1.49

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,017.65      $ 7.56        1.49
         

Institutional Class

           

Actual

   $ 1,000.00      $ 1,019.69      $ 2.49        0.49

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.67      $ 2.49        0.49

 

1

Expenses paid is equal to the annualized net expense ratio of each class 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).

 

 

6  |  Wells Fargo Pennsylvania Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

    

Interest

rate

   

Maturity

date

     Principal      Value  
Municipal Obligations: 99.39%

 

Florida: 0.76%

 

Industrial Development Revenue: 0.76%  

Jacksonville FL Economic Development AMT Metropolitan Parking Solutions Project (ACA Insured)

    5.50     10-1-2030      $ 1,000,000      $ 1,002,400  
         

 

 

 

Guam: 0.50%

 

Airport Revenue: 0.50%  

Guam Port Authority AMT Series B

    5.00       7-1-2032        550,000        658,438  
         

 

 

 

Illinois: 0.81%

 

Miscellaneous Revenue: 0.81%  

Illinois Series 2017D

    5.00       11-1-2022        1,000,000        1,079,420  
         

 

 

 

Pennsylvania: 97.32%

 

Airport Revenue: 1.30%  

Philadelphia PA Airport Refunding Bond AMT Series A

    5.00       6-15-2030        1,500,000        1,729,035  
         

 

 

 
Education Revenue: 26.31%  

Allegheny County PA Higher Education Building Authority Refunding Bond Duquesne University of The Holy Spirit Series A

    5.00       3-1-2029        1,135,000        1,313,683  

Chester County PA IDA Avon Grove Charter School Project Refunding Bond Series A

    5.00       12-15-2047        1,160,000        1,295,558  

Chester County PA IDA Collegium Charter School Project Refunding Bond Series A

    5.00       10-15-2022        1,065,000        1,098,004  

Chester County PA IDA Collegium Charter School Project Series A

    5.13       10-15-2037        1,000,000        1,083,540  

Chester County PA IDA Renaissance Academy Charter School Project

    3.75       10-1-2024        600,000        623,160  

Delaware County PA IDA Chester Community Charter School Series A

    5.00       8-15-2020        635,000        633,482  

General Authority of South Central Pennsylvania Association of Independent Colleges & Universities

    6.00       11-1-2031        2,500,000        2,658,925  

Lycoming County PA Authority Pennsylvania College of Technology

    5.50       7-1-2026        3,000,000        3,181,230  

Montgomery County PA Higher Education & Health Authority Refunding Bond Arcadia University

    5.00       4-1-2030        1,500,000        1,686,255  

North Eastern PA Hospital & Education Authority Refunding Bond Wilkes University Project Series B

    5.25       3-1-2037        1,000,000        1,126,950  

Pennsylvania HEFAR Shippensburg University Project

    6.00       10-1-2031        1,500,000        1,626,345  

Pennsylvania HEFAR Temple University First Series

    5.00       4-1-2032        1,000,000        1,070,930  

Pennsylvania Public School Building Authority Northampton County Area Community College Project

    5.50       3-1-2031        5,000,000        5,220,350  

Pennsylvania Public School Building Authority Northampton County Area Community College Project Series A (BAM Insured)

    5.00       6-15-2027        1,610,000        1,742,954  

Pennsylvania State University Refunding Bond Series B

    5.00       9-1-2034        2,175,000        2,627,531  

Philadelphia PA IDA 1st Philadelphia Preparatory Charter School Project Series A

    7.00       6-15-2033        1,000,000        1,155,080  

Philadelphia PA IDA Global Leadership Academy Project

    5.13       11-15-2020        270,000        274,328  

Philadelphia PA IDA Global Leadership Academy Project

    5.75       11-15-2030        1,000,000        1,019,080  

Philadelphia PA IDA Independence Charter School Project

    5.00       6-15-2039        250,000        265,190  

Philadelphia PA IDA La Salle University

    5.00       5-1-2036        1,355,000        1,514,782  

Philadelphia PA IDA Tacony Academy Charter School Project

    6.88       6-15-2033        1,000,000        1,108,420  

Philadelphia PA IDA Temple University 1st Series 2016

    5.00       4-1-2029        1,000,000        1,163,330  

Philadelphia PA IDA West Philadelphia Achievement Charter Elementary School Project

    7.50       5-1-2031        1,285,000        1,356,009  
     34,845,116  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Pennsylvania Tax-Free Fund  |  7


Portfolio of investments—December 31, 2019 (unaudited)

 

    

Interest

rate

   

Maturity

date

     Principal      Value  
GO Revenue: 18.07%  

Allegheny County PA Shaler Area School District (BAM Insured)

    5.00 %       9-1-2038      $ 1,000,000      $ 1,232,360  

Armstrong PA School District Series A (BAM Insured)

    4.00       3-15-2041        1,000,000        1,112,860  

Central Dauphin PA School District

    5.00       2-1-2037        2,075,000        2,388,304  

Downingtown PA Area School District Series C

    5.00       8-1-2032        1,000,000        1,216,190  

Erie PA City School District Limited Tax Series A (AGM Insured)

    5.00       4-1-2034        515,000        634,526  

North Allegheny PA School District

    5.00       5-1-2030        100,000        128,281  

North Allegheny PA School District

    5.00       5-1-2031        290,000        369,364  

Octorara PA Area School District (AGM Insured) %%

    4.00       4-1-2031        650,000        754,247  

Penn-Delco PA School District

    4.00       6-1-2045        1,000,000        1,069,850  

Philadelphia PA Refunding Bond Series A

    5.25       7-15-2033        1,500,000        1,690,620  

Philadelphia PA School District Refunding Bond Series A (AGM/FGIC Insured)

    5.00       6-1-2024        1,415,000        1,594,181  

Philadelphia PA School District Refunding Bond Series C

    5.00       9-1-2021        1,395,000        1,479,760  

Philadelphia PA School District Series B

    5.00       9-1-2043        1,235,000        1,460,832  

Philadelphia PA Series A

    5.00       8-1-2036        1,250,000        1,498,975  

Pittsburgh PA (BAM Insured)

    5.00       9-1-2030        500,000        573,825  

Pittsburgh PA Moon Area School District Series A

    5.00       11-15-2029        1,445,000        1,647,676  

Reading PA School District Series A (AGM Insured)

    5.00       2-1-2033        1,500,000        1,725,315  

West Mifflin PA Area School District (AGM Insured)

    5.00       4-1-2028        1,000,000        1,180,230  

West Shore PA School District

    5.00       11-15-2048        1,500,000        1,753,260  

Wilkes-Barre School District Luzerne County PA Series 2019 (BAM Insured)

    5.00       4-15-2027        100,000        121,878  

Wilkes-Barre School District Luzerne County PA Series 2019 (BAM Insured)

    5.00       4-15-2028        120,000        148,688  

Wilkes-Barre School District Luzerne County PA Series 2019 (BAM Insured)

    5.00       4-15-2029        50,000        62,933  

Wilkes-Barre School District Luzerne County PA Series 2019 (BAM Insured)

    5.00       4-15-2030        70,000        87,615  
     23,931,770  
  

 

 

 
Health Revenue: 13.22%  

Allegheny County PA Hospital Development Authority Health Center Series B (National Insured)

    6.00       7-1-2027        1,800,000        2,350,296  

Allegheny County PA Hospital Development Authority Series A

    4.00       7-15-2035        1,000,000        1,129,430  

Berks County PA IDA Tower Health Project

    5.00       11-1-2037        1,930,000        2,235,249  

Bucks County PA IDA St. Lukes University Health Network

    4.00       8-15-2050        400,000        426,460  

Cumberland County PA Municipal Authority Diakon Lutheran Ministries Project

    5.00       1-1-2028        2,090,000        2,340,110  

Dauphin County PA General Authority Pinnacle Health System Project

    5.00       6-1-2042        500,000        534,375  

Dauphin County PA General Authority Pinnacle Health System Project Series A

    5.00       6-1-2035        1,000,000        1,172,890  

Doylestown PA Hospital Authority Doylestown Hospital Series A

    5.00       7-1-2049        250,000        286,465  

East Hempfield Township PA IDA Willow Valley Communities Project Refunding Bond

    5.00       12-1-2028        450,000        526,973  

East Hempfield Township PA IDA Willow Valley Communities Project Refunding Bond

    5.00       12-1-2029        375,000        437,501  

Lancaster County PA Hospital Authority Healthcare Facilities Moravian Manors Incorporated Project ##

    2.88       12-15-2023        500,000        500,100  

Montgomery County PA IDA Jefferson Health System Series A

    5.00       10-1-2027        1,000,000        1,073,910  

Montgomery County PA IDA Waverly Heights Limited Project

    5.00       12-1-2049        1,000,000        1,146,240  

Northampton County PA St. Luke’s Hospital of Bethlehem Series A

    5.00       8-15-2033        1,435,000        1,578,170  

Pennsylvania Higher Educational University Pennsylvania Health System Series A

    5.00       8-15-2047        1,500,000        1,766,085  
     17,504,254  
  

 

 

 
Housing Revenue: 0.76%  

Chester County PA IDA University Student Housing LLC Project Series A

    5.00       8-1-2030        555,000        602,675  

Pennsylvania Housing Finance Agency Single-Family Mortgage Revenue Series 112

    5.00       4-1-2028        395,000        403,647  
     1,006,322  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

8  |  Wells Fargo Pennsylvania Tax-Free Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

    

Interest

rate

   

Maturity

date

     Principal      Value  
Miscellaneous Revenue: 18.95%  

Delaware County PA Authority Neumann University Refunding Bond

    5.00 %       10-1-2031      $ 1,500,000      $ 1,679,355  

Delaware County PA Vocational & Technical School Authority (BAM Insured)

    5.25       11-1-2033        1,000,000        1,122,840  

Delaware Valley PA Regional Finance Authority Local Government Series A (Ambac Insured)

    5.50       8-1-2028        4,390,000        5,579,207  

Pennsylvania Certificate of Participation Series A

    5.00       7-1-2038        1,000,000        1,199,770  

Pennsylvania Financing Authority Pennsylvania Hills Project CAB Series B (National Insured) ¤

    0.00       12-1-2022        1,200,000        1,135,344  

Pennsylvania Financing Authority Pennsylvania Hills Project CAB Series B (National Insured) ¤

    0.00       12-1-2023        3,790,000        3,507,910  

Pennsylvania Public School Building Authority Chester Upland School District Project Series B

    5.25       9-15-2030        540,000        660,555  

Pennsylvania Public School Building Authority Chester Upland School District Project Series C (AGM Insured)

    5.00       9-15-2026        875,000        922,058  

Pennsylvania Public School Building Authority Series B-2 (BAM Insured)

    5.00       12-1-2027        1,010,000        1,166,146  

Pennsylvania Turnpike Commission Series A (AGM Insured)

    5.25       7-15-2021        2,000,000        2,128,060  

Philadelphia PA IDA City Agreement Green Bond Museum Art Energy Saving Program Series A

    5.00       2-15-2038        785,000        934,409  

Philadelphia PA IDA Refunding Bond Cultural & Commercial Corridors Program Series A

    5.00       12-1-2028        2,500,000        2,950,575  

Southeastern Pennsylvania Transportation Authority

    5.00       6-1-2028        2,000,000        2,108,900  
     25,095,129  
  

 

 

 
Tax Revenue: 4.69%  

Allegheny County PA Port Authority Refunding Bond

    5.75       3-1-2029        3,000,000        3,155,430  

Pittsburgh & Allegheny Counties PA Sports & Exhibition Authority (AGM Insured)

    5.00       2-1-2031        3,000,000        3,058,560  
     6,213,990  
  

 

 

 
Transportation Revenue: 6.79%  

Delaware River PA Joint Toll Bridge Commission

    5.00       7-1-2042        580,000        695,490  

Lancaster PA Parking Authority Series A (BAM Insured)

    4.00       9-1-2038        1,000,000        1,100,800  

Pennsylvania Turnpike Commission Series A-1

    5.00       12-1-2047        1,000,000        1,188,260  

Pennsylvania Turnpike Commission Series A-2

    5.00       12-1-2048        2,000,000        2,406,280  

Pennsylvania Turnpike Commission Subordinate Bond Series A

    5.50       12-1-2042        3,000,000        3,596,490  
     8,987,320  
  

 

 

 

Water & Sewer Revenue: 7.23%

 

Capital Region Pennsylvania Water & Sewer System Refunding Bond

    5.00       7-15-2037        1,000,000        1,191,530  

Lehigh County PA General Purpose Authority CAB Allentown Project ¤

    0.00       12-1-2030        2,000,000        1,515,200  

Luzerne County PA IDA Revenue Refunding Bonds AMT Pennsylvania American Water Company Project

    2.45       12-1-2039        500,000        502,785  

McKeesport PA Municipal Authority (AGM Insured)

    5.50       12-15-2027        1,200,000        1,301,580  

Pennsylvania Commonwealth Financing Authority Refunding Bond Series B

    5.00       6-1-2031        250,000        322,845  

Pennsylvania Commonwealth Financing Authority Series B

    5.00       6-1-2026        1,000,000        1,081,510  

Philadelphia PA Water & Wastewater Refunding Bond

    5.00       10-1-2030        1,000,000        1,203,900  

Philadelphia PA Water & Wastewater Refunding Bond Series A

    5.00       10-1-2038        2,000,000        2,452,800  
     9,572,150  
  

 

 

 
     128,885,086  
  

 

 

 

Total Municipal Obligations (Cost $123,112,654)

 

     131,625,344  
  

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Pennsylvania Tax-Free Fund  |  9


Portfolio of investments—December 31, 2019 (unaudited)

 

     Yield                               Shares      Value  
Short-Term Investments: 0.20%  
Investment Companies: 0.20%  

Wells Fargo Municipal Cash Management Money Market Fund Institutional Class (l)(u)##

    1.45        257,174      $ 257,276  
         

 

 

 

Total Short-Term Investments (Cost $257,276)

 

     257,276        
  

 

 

 

 

Total investments in securities (Cost $123,369,930)     99.59        131,882,620  

Other assets and liabilities, net

    0.41          549,319  
 

 

 

      

 

 

 
Total net assets     100.00      $ 132,431,939  
 

 

 

      

 

 

 

 

 

%%

The security is purchased on a when-issued basis.

##

All or a portion of this security is segregated for when-issued securities.

¤

The security is issued in zero coupon form with no periodic interest payments.

(l)

The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940.

(u)

The rate represents the 7-day annualized yield at period end.

Abbreviations:

 

ACA

ACA Financial Guaranty Corporation

 

AGM

Assured Guaranty Municipal

 

Ambac

Ambac Financial Group Incorporated

 

AMT

Alternative minimum tax

 

BAM

Build America Mutual Assurance Company

 

CAB

Capital appreciation bond

 

FGIC

Financial Guaranty Insurance Corporation

 

GO

General obligation

 

HEFAR

Higher Education Facilities Authority Revenue

 

IDA

Industrial Development Authority

 

National

National Public Finance Guarantee Corporation

Investments in Affiliates

An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were either affiliated persons of the Fund at the beginning of the period or the end of the period were as follows:

 

   

Shares,

beginning of

priod

   

Shares

purchased

   

Shares

sold

   

Shares,

end of

period

   

Net

realized

gains

(losses)

   

Net

change in

unrealized

gains

(losses)

   

Income

from

affiliated

securities

   

Value,

end of

period

   

% of

net

assets

 
Short-Term Investments                                                      

Investment Companies

                 

Wells Fargo Municipal Cash Management Fund Institutional Class

    928,745       8,534,438       (9,206,009     257,174     $ (91   $ (2   $ 4,954     $ 257,276       0.20

 

The accompanying notes are an integral part of these financial statements.

 

 

10  |  Wells Fargo Pennsylvania Tax-Free Fund


Statement of assets and liabilities—December 31, 2019 (unaudited)

 

         

Assets

 

Investments in unaffiliated securities, at value (cost $123,112,654)

  $ 131,625,344  

Investments in affiliated securities, at value (cost $257,276)

    257,276  

Receivable for Fund shares sold

    55,757  

Receivable for interest

    1,523,249  

Prepaid expenses and other assets

    14,631  
 

 

 

 

Total assets

    133,476,257  
 

 

 

 

Liabilities

 

Payable for investments purchased

    750,094  

Payable for Fund shares redeemed

    73,665  

Management fee payable

    25,407  

Dividends payable

    143,330  

Administration fees payable

    12,721  

Distribution fee payable

    5,734  

Trustees’ fees and expenses payable

    4,219  

Accrued expenses and other liabilities

    29,148  
 

 

 

 

Total liabilities

    1,044,318  
 

 

 

 

Total net assets

  $ 132,431,939  
 

 

 

 

Net assets consist of

 

Paid-in capital

  $ 124,378,364  

Total distributable earnings

    8,053,575  
 

 

 

 

Total net assets

  $ 132,431,939  
 

 

 

 

Computation of net asset value and offering price per share

 

Net assets – Class A

  $ 40,740,384  

Shares outstanding – Class A1

    3,447,039  

Net asset value per share – Class A

    $11.82  

Maximum offering price per share – Class A2

    $12.38  

Net assets – Class C

  $ 8,780,240  

Shares outstanding – Class C1

    744,202  

Net asset value per share – Class C

    $11.80  

Net assets – Institutional Class

  $ 82,911,315  

Shares outstanding – Institutional Class1

    7,014,798  

Net asset value per share – Institutional Class

    $11.82  

 

1 

The Fund has an unlimited number of authorized shares.

 

2 

Maximum offering price is computed as 100/95.50 of net asset value. On investments of $50,000 or more, the offering price is reduced.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Pennsylvania Tax-Free Fund  |  11


Statement of operations—six months ended December 31, 2019 (unaudited)

 

         

Investment income

 

Interest

  $ 2,571,146  

Income from affiliated securities

    4,954  
 

 

 

 

Total investment income

    2,576,100  
 

 

 

 

Expenses

 

Management fee

    267,363  

Administration fees

 

Class A

    33,224  

Class C

    7,126  

Institutional Class

    33,298  

Shareholder servicing fees

 

Class A

    51,912  

Class C

    11,135  

Distribution fee

 

Class C

    33,365  

Custody and accounting fees

    6,471  

Professional fees

    25,954  

Registration fees

    47,284  

Shareholder report expenses

    10,889  

Trustees’ fees and expenses

    10,804  

Other fees and expenses

    5,733  
 

 

 

 

Total expenses

    544,558  

Less: Fee waivers and/or expense reimbursements

 

Fund-level

    (120,933
 

 

 

 

Net expenses

    423,625  
 

 

 

 

Net investment income

    2,152,475  
 

 

 

 

Realized and unrealized gains (losses) on investments

 

Net realized gains (losses) on

 

Unaffiliated securities

    54,043  

Affiliated securities

    (91
 

 

 

 

Net realized gains on investments

    53,952  
 

 

 

 

Net change in unrealized gains (losses) on

 

Unaffiliated securities

    217,079  

Affiliated securities

    (2
 

 

 

 

Net change in unrealized gains (losses) on investments

    217,077  
 

 

 

 

Net realized and unrealized gains (losses) on investments

    271,029  
 

 

 

 

Net increase in net assets resulting from operations

  $ 2,423,504  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

12  |  Wells Fargo Pennsylvania Tax-Free Fund


Statement of changes in net assets

 

     Six months ended
December 31, 2019
(unaudited)
    Year ended
June 30, 2019
 

Operations

       

Net investment income

    $ 2,152,475       $ 4,173,389  

Net realized gains on investments

      53,952         922,543  

Net change in unrealized gains (losses) on investments

      217,077         2,670,920  
 

 

 

 

Net increase in net assets resulting from operations

      2,423,504         7,766,852  
 

 

 

 

Distributions to shareholders from

       

Net investment income and net realized gains

       

Class A

      (614,246       (1,201,265

Class C

      (98,277       (249,698

Institutional Class

      (1,336,025       (2,668,988

Tax basis return of capital

       

Class A

      0         (93,277

Class C

      0         (25,736

Institutional Class

      0         (191,507
 

 

 

 

Total distributions to shareholders

      (2,048,548       (4,430,471
 

 

 

 

Capital share transactions

    Shares         Shares    

Proceeds from shares sold

       

Class A

    154,555       1,831,923       523,363       6,021,000  

Class C

    81,842       969,752       72,566       834,358  

Institutional Class

    653,220       7,739,103       483,892       5,555,083  
 

 

 

 
      10,540,778         12,410,441  
 

 

 

 

Reinvestment of distributions

       

Class A

    47,795       566,985       104,956       1,208,144  

Class C

    7,830       92,735       22,977       263,459  

Institutional Class

    44,777       531,161       94,002       1,081,975  
 

 

 

 
      1,190,881         2,553,578  
 

 

 

 

Payment for shares redeemed

       

Class A

    (256,170     (3,036,760     (670,936     (7,708,019

Class C

    (90,821     (1,076,088     (523,498     (5,993,137

Institutional Class

    (397,574     (4,712,721     (1,589,650     (18,215,765
 

 

 

 
      (8,825,569       (31,916,921
 

 

 

 

Net increase (decrease) in net assets resulting from capital share transactions

      2,906,090         (16,952,902
 

 

 

 

Total increase (decrease) in net assets

      3,281,046         (13,616,521
 

 

 

 

Net assets

       

Beginning of period

      129,150,893         142,767,414  
 

 

 

 

End of period

    $ 132,431,939       $ 129,150,893  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Pennsylvania Tax-Free Fund  |  13


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS A   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $11.78       $11.48       $11.67       $12.13       $11.75       $11.65  

Net investment income

    0.19       0.35       0.38       0.36       0.38       0.42  

Net realized and unrealized gains (losses) on investments

    0.03       0.32       (0.19     (0.46     0.38       0.09  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.22       0.67       0.19       (0.10     0.76       0.51  

Distributions to shareholders from

           

Net investment income

    (0.18     (0.34     (0.38     (0.36     (0.38     (0.41

Tax basis return of capital

    0.00       (0.03     0.00       0.00       0.00       0.00  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.18     (0.37     (0.38     (0.36     (0.38     (0.41

Net asset value, end of period

    $11.82       $11.78       $11.48       $11.67       $12.13       $11.75  

Total return1

    1.84     6.00     1.62     (0.83 )%      6.62     4.44

Ratios to average net assets (annualized)

           

Gross expenses

    0.97     0.96     0.91     0.90     0.90     0.90

Net expenses

    0.74     0.74     0.74     0.74     0.74     0.74

Net investment income

    3.10     3.07     3.25     3.02     3.23     3.54

Supplemental data

           

Portfolio turnover rate

    2     9     10     20     13     15

Net assets, end of period (000s omitted)

    $40,740       $41,255       $40,664       $45,381       $55,352       $47,323  

 

1 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

14  |  Wells Fargo Pennsylvania Tax-Free Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS C   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $11.76       $11.45       $11.65       $12.11       $11.73       $11.63  

Net investment income

    0.15       0.26 1       0.29 1       0.27 1       0.29 1       0.33  

Net realized and unrealized gains (losses) on investments

    0.02       0.34       (0.20     (0.46     0.38       0.09  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.17       0.60       0.09       (0.19     0.67       0.42  

Distributions to shareholders from

           

Net investment income

    (0.13     (0.26     (0.29     (0.27     (0.29     (0.32

Tax basis return of capital

    0.00       (0.03     0.00       0.00       0.00       0.00  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.13     (0.29     (0.29     (0.27     (0.29     (0.32

Net asset value, end of period

    $11.80       $11.76       $11.45       $11.65       $12.11       $11.73  

Total return2

    1.46     5.31     0.77     (1.58 )%      5.83     3.66

Ratios to average net assets (annualized)

           

Gross expenses

    1.72     1.70     1.66     1.65     1.65     1.65

Net expenses

    1.49     1.49     1.49     1.49     1.49     1.49

Net investment income

    2.46     2.32     2.50     2.27     2.46     2.78

Supplemental data

           

Portfolio turnover rate

    2     9     10     20     13     15

Net assets, end of period (000s omitted)

    $8,780       $8,768       $13,440       $16,323       $19,493       $13,062  

 

1 

Calculated based upon average shares outstanding

 

2 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Pennsylvania Tax-Free Fund  |  15


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
INSTITUTIONAL CLASS   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $11.78       $11.48       $11.67       $12.13       $11.75       $11.65  

Net investment income

    0.20       0.38       0.40       0.39 1       0.41 1       0.44  

Net realized and unrealized gains (losses) on investments

    0.03       0.32       (0.18     (0.46     0.38       0.10  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.23       0.70       0.22       (0.07     0.79       0.54  

Distributions to shareholders from

           

Net investment income

    (0.19     (0.37     (0.41     (0.39     (0.41     (0.44

Tax basis return of capital

    0.00       (0.03     0.00       0.00       0.00       0.00  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.19     (0.40     (0.41     (0.39     (0.41     (0.44

Net asset value, end of period

    $11.82       $11.78       $11.48       $11.67       $12.13       $11.75  

Total return2

    1.97     6.27     1.88     (0.58 )%      6.88     4.70

Ratios to average net assets (annualized)

           

Gross expenses

    0.64     0.62     0.58     0.57     0.57     0.57

Net expenses

    0.49     0.49     0.49     0.49     0.49     0.49

Net investment income

    3.36     3.31     3.50     3.27     3.47     3.78

Supplemental data

           

Portfolio turnover rate

    2     9     10     20     13     15

Net assets, end of period (000s omitted)

    $82,911       $79,128       $88,663       $102,672       $132,844       $106,769  

 

1 

Calculated based upon average shares outstanding

 

2 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

16  |  Wells Fargo Pennsylvania Tax-Free Fund


Notes to financial statements (unaudited)

 

1. ORGANIZATION

Wells Fargo Funds Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Wells Fargo Pennsylvania Tax-Free Fund (the “Fund”) which is a diversified series of the Trust.

2. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Securities valuation

All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.

Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

Investments in registered open-end investment companies 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 in good faith by the Board of Trustees of the Fund. The Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities, unless the determination has been delegated to the Wells Fargo Asset Management Pricing Committee at Wells Fargo Funds Management, LLC (“Funds Management”). The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Valuation Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees receives reports on any valuation actions taken by the Valuation Committee or the Wells Fargo Asset Management Pricing Committee which may include items for ratification.

When-issued transactions

The Fund may purchase securities on a forward commitment or when-issued basis. The Fund records a when-issued transaction on the trade date and will segregate assets in an amount at least equal in value to the Fund’s commitment to purchase when-issued securities. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

Security transactions and income recognition

Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. 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 been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Distributions to shareholders

Distributions to shareholders from net investment income are declared daily and paid monthly. Distributions from net realized gains, if any, are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.

 

 

Wells Fargo Pennsylvania Tax-Free Fund  |  17


Notes to financial statements (unaudited)

 

Federal and other taxes

The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable and tax-exempt income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.

The 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. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

As of December 31, 2019, the aggregate cost of all investments for federal income tax purposes was $123,369,930 and the unrealized gains (losses) consisted of:

 

Gross unrealized gains

   $ 8,545,220  

Gross unrealized losses

     (32,530

Net unrealized gains

   $ 8,512,690  

As of June 30, 2019, the Fund had capital loss carryforwards which consisted of $469,893 in short-term capital losses.

Class allocations

The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.

3. FAIR VALUATION MEASUREMENTS

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:

 

 

Level 1 – quoted prices in active markets for identical securities

 

 

Level 2 – other significant observable inputs (including quoted prices for similar securities, 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 investments in securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of December 31, 2019:

 

     

Quoted prices

(Level 1)

    

Other significant

observable inputs

(Level 2)

    

Significant

unobservable inputs

(Level 3)

     Total  

Assets

           

Investments in:

           

Municipal obligations

   $ 0      $ 131,625,344      $ 0      $ 131,625,344  

Short-term investments

           

Investment companies

     257,276        0        0        257,276  

Total assets

   $ 257,276      $ 131,625,344      $ 0      $ 131,882,620  

Additional sector, industry or geographic detail is included in the Portfolio of Investments.

For the six months ended December 31, 2019, the Fund did not have any transfers into/out of Level 3.

 

 

18  |  Wells Fargo Pennsylvania Tax-Free Fund


Notes to financial statements (unaudited)

 

4. TRANSACTIONS WITH AFFILIATES

Management fee

Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo)”, is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:

 

Average daily net assets    Management fee  

First $500 million

     0.400

Next $500 million

     0.375  

Next $2 billion

     0.350  

Next $2 billion

     0.325  

Next $5 billion

     0.290  

Over $10 billion

     0.280  

For the six months ended December 31, 2019, the management fee was equivalent to an annual rate of 0.40% of the Fund’s average daily net assets.

Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Funds Management. Wells Capital Management Incorporated, an affiliate of Funds Management and an indirect wholly owned subsidiary of Wells Fargo, is the subadviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.20% and declining to 0.10% as the average daily net assets of the Fund increase.

Administration fees

Under a class-level administration agreement, Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:

 

     

Class-level

administration fee

 

Class A, Class C

     0.16

Institutional Class

     0.08  

Waivers and/or expense reimbursements

Funds Management has contractually waived and/or reimbursed management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Funds Management has waived fees and/or reimbursed expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Funds Management has committed through October 31, 2020 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s expenses at 0.74% for Class A shares, 1.49% for Class C shares, and 0.49% for Institutional Class shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. 

Distribution fee

The Trust has adopted a distribution plan for Class C shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Wells Fargo Funds Distributor, LLC (“Funds Distributor”), the principal underwriter, at an annual rate of 0.75% of the average daily net assets of Class C shares.

In addition, Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the six months ended December 31, 2019, Funds Distributor received $2,826 from the sale of Class A shares. No contingent deferred sales charges were incurred by Class A and Class C shares for the six months ended December 31, 2019.

 

 

Wells Fargo Pennsylvania Tax-Free Fund  |  19


Notes to financial statements (unaudited)

 

Shareholder servicing fees

The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A and Class C of the Fund are charged a fee at an annual rate of 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of Wells Fargo.

Interfund transactions

The Fund may purchase or sell portfolio investment securities to certain other Wells Fargo affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended December 31, 2019 were $6,977,033 and $2,341,570, respectively.

6. BANK BORROWINGS

The Trust (excluding the money market funds), Wells Fargo Master Trust and Wells Fargo Variable Trust are parties to a $280,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the 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, an annual commitment fee equal to 0.25% of the unused balance is allocated to each participating fund.

For the six months ended December 31, 2019, there were no borrowings by the Fund under the agreement.

7. CONCENTRATION RISK

The Fund invests a substantial portion of its assets in issuers of municipal debt securities located in a single state or territory of the U.S. Therefore, it may be more affected by economic and political developments in that state or region than would be a comparable general tax-exempt fund.

8. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and Trustees have been granted certain indemnification rights 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 Fund and, therefore, cannot be estimated.

9. NEW ACCOUNTING PRONOUNCEMENTS

In August 2018, FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 updates the disclosure requirements for fair value measurements by modifying or removing certain disclosures and adding certain new disclosures. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Management has adopted the removal and modification of disclosures early, as permitted, and will adopt the additional new disclosures at the effective date.

In March 2017, FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium and requires the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount and discounts will continue to be accreted to the maturity date of the security. ASU 2017-08 is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years. During the current reporting period, management of the Fund adopted the change in accounting policy which did not have a material impact to the Fund’s financial statements.

 

 

20  |  Wells Fargo Pennsylvania Tax-Free Fund


Other information (unaudited)

 

PROXY VOTING INFORMATION

A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available, upon request, by calling 1-800-222-8222, visiting our website at wfam.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at wfam.com or by visiting the SEC website at sec.gov.

QUARTERLY PORTFOLIO HOLDINGS INFORMATION

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.

 

 

Wells Fargo Pennsylvania Tax-Free Fund  |  21


Other information (unaudited)

 

BOARD OF TRUSTEES AND OFFICERS

Each of the Trustees and Officers1 listed in the table below acts in identical capacities for each fund in the Wells Fargo family of funds, which consists of 149 mutual funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information2. 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

 

Name and

year of birth

 

Position held and

length of service*

  Principal occupations during past five years or longer  

Current other

public company or

investment

company

directorships

William R. Ebsworth

(Born 1957)

  Trustee, since 2015   Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Endowment (non-profit organization). Mr. Ebsworth is a CFA® charterholder.   N/A

Jane A. Freeman

(Born 1953)

  Trustee, since 2015; Chair Liaison, since 2018   Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is a Board Member of The Ruth Bancroft Garden (non-profit organization). She is also an inactive Chartered Financial Analyst.   N/A

Isaiah Harris, Jr.

(Born 1952)

  Trustee, since 2009; Audit Committee Chairman, since 2019   Retired. Chairman of the Board of CIGNA Corporation since 2009, and Director since 2005. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Child Evangelism Fellowship (non-profit). Mr. Harris is a certified public accountant (inactive status).   CIGNA Corporation

Judith M. Johnson

(Born 1949)

  Trustee, since 2008; Audit Committee Chairman, from 2009 to 2018   Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.   N/A

 

 

22  |  Wells Fargo Pennsylvania Tax-Free Fund


Other information (unaudited)

 

Name and

year of birth

 

Position held and

length of service*

  Principal occupations during past five years or longer  

Current other

public company or

investment

company

directorships

David F. Larcker

(Born 1950)

  Trustee, since 2009   James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.   N/A

Olivia S. Mitchell

(Born 1953)

  Trustee, since 2006; Nominating and Governance Committee Chair, since 2018   International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993.   N/A

Timothy J. Penny

(Born 1951)

  Trustee, since 1996; Chairman, since 2018   President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.   N/A

James G. Polisson

(Born 1959)

  Trustee, since 2018   Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations.   N/A

Pamela Wheelock3

(Born 1959)

  Trustee, since January 2020; previously Trustee from January 2018 to July 2019   Board member of the Destination Medical Center Economic Development Agency, Rochester, Minnesota since 2019. Acting Commissioner, Minnesota Department of Human Services, July 2019 through September 2019. Human Services Manager (part-time), Minnesota Department of Human Services, October 2019 through December 2019. Chief Operating Officer, Twin Cities Habitat for Humanity from 2017 to 2019. Vice President of University Services, University of Minnesota from 2012 to 2016. Prior thereto, on the Board of Directors, Governance Committee and Finance Committee for the Minnesota Philanthropy Partners (Saint Paul Foundation) from 2012 to 2018, Interim Chief Executive Officer of Blue Cross Blue Shield of Minnesota from 2011 to 2012, Chairman of the Board from 2009 to 2012 and Board Director from 2003 to 2015. Vice President, Leadership and Community Engagement, Bush Foundation, Saint Paul, Minnesota (a private foundation) from 2009 to 2011. Executive Vice President and Chief Financial Officer, Minnesota Sports and Entertainment from 2004 to 2009 and Senior Vice President from 2002 to 2004. Executive Vice President of the Minnesota Wild Foundation from 2004 to 2008. Commissioner of Finance, State of Minnesota, from 1999 to 2002. Currently Board Chair of the Minnesota Wild Foundation since 2010.   N/A

 

*

Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.

 

 

Wells Fargo Pennsylvania Tax-Free Fund  |  23


Other information (unaudited)

 

Officers

 

Name and

year of birth

 

Position held and

length of service

  Principal occupations during past five years or longer

Andrew Owen

(Born 1960)

  President, since 2017   Executive Vice President of Wells Fargo & Company and Head of Affiliated Managers, Wells Fargo Asset Management, since 2014. In addition, Mr. Owen is currently President, Chief Executive Officer and Director of Wells Fargo Funds Management, LLC since 2017. Prior thereto, Executive Vice President responsible for marketing, investments and product development for Wells Fargo Funds Management, LLC, from 2009 to 2014.

Nancy Wiser1

(Born 1967)

  Treasurer, since 2012   Executive Vice President of Wells Fargo Funds Management, LLC since 2011. Chief Operating Officer and Chief Compliance Officer at LightBox Capital Management LLC, from 2008 to 2011.

Michelle Rhee4

(Born 1966)

  Chief Legal Officer, since 2019   Secretary of Wells Fargo Funds Management, LLC, Chief Legal Counsel of Wells Fargo Asset Management and Assistant General Counsel of Wells Fargo Bank, N.A. since 2018. Associate General Counsel and Managing Director of Bank of America Corporation from 2004 to 2018.

Catherine Kennedy5

(Born 1969)

  Secretary, since 2019   Vice President of Wells Fargo Funds Management, LLC and Senior Counsel of the Wells Fargo Legal Department since 2010. Vice President and Senior Counsel of Evergreen Investment Management Company, LLC from 1998 to 2010.

Michael H. Whitaker

(Born 1967)

  Chief Compliance Officer, since 2016   Chief Compliance Officer of Wells Fargo Asset Management since 2016. Senior Vice President and Chief Compliance Officer for Fidelity Investments from 2007 to 2016.

David Berardi

(Born 1975)

  Assistant Treasurer, since 2009   Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.

Jeremy DePalma1

(Born 1974)

  Assistant Treasurer, since 2009   Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.

 

1

Nancy Wiser acts as Treasurer of 64 funds in the Fund Complex. Jeremy DePalma acts as Treasurer of 85 funds and Assistant Treasurer of 64 funds in the Fund Complex.

 

2

The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at wfam.com.

 

3 

Pamela Wheelock was re-appointed to the Board effective January 1, 2020.

 

4 

Michelle Rhee became Chief Legal Officer effective October 22, 2019.

 

5 

Catherine Kennedy became Secretary effective October 22, 2019.

 

 

24  |  Wells Fargo Pennsylvania Tax-Free Fund


Appendix (unaudited)

 

Effective on or about May 1, 2020, if you purchase Fund shares through a Janney Montgomery Scott LLC (“Janney”) brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge (“CDSC”), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in the Fund’s Prospectus or SAI.

 

Front-end sales charge* waivers on Class A shares available at Janney
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).
Shares purchased by employees and registered representatives of Janney or its affiliates and their family members as designated by Janney.
Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within ninety (90) days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., right of reinstatement).
Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
Shares acquired through a right of reinstatement.
Class C shares that are no longer subject to a contingent deferred sales charge and are converted to Class A shares of the same fund pursuant to Janney’s policies and procedures.
CDSC waivers on Class A and Class C shares available at Janney
Shares sold upon the death or disability of the shareholder.
Shares sold as part of a systematic withdrawal plan as described in the Fund’s Prospectus.
Shares purchased in connection with a return of excess contributions from an IRA account.
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRS regulations.
Shares sold to pay Janney fees but only if the transaction is initiated by Janney.
Shares acquired through a right of reinstatement.
Shares exchanged into the same share class of a different fund.
Front-end sales charge* discounts available at Janney; breakpoints, rights of accumulation and/or letters of intent
Breakpoints as described in the Fund’s Prospectus.
Rights of accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Janney. Eligible fund family assets not held at Janney may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.
Letters of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Janney Montgomery Scott may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.

 

*

Also referred to as an “initial sales charge.”

 

 

Wells Fargo Pennsylvania Tax-Free Fund  |  25


 

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LOGO

For more information

More information about Wells Fargo Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:

Wells Fargo Funds

P.O. Box 219967

Kansas City, MO 64121-9967

Website: wfam.com

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

 

LOGO

 

This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-222-8222 or visit the Fund’s website at wfam.com. Read the prospectus carefully before you invest or send money.

Wells Fargo Asset Management (WFAM) is the trade name for certain investment advisory/management firms owned by Wells Fargo & Company. These firms include but are not limited to Wells Capital Management Incorporated and Wells Fargo Funds Management, LLC. Certain products managed by WFAM entities are distributed by Wells Fargo Funds Distributor, LLC (a broker-dealer and Member FINRA).

This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind— including a recommendation for any specific investment, strategy, or plan.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE     MAY LOSE VALUE


© 2020 Wells Fargo & Company. All rights reserved.

PAR-0120-02395 02-20

SA255/SAR255 12-19

 

 



LOGO

Semi-Annual Report

December 31, 2019

 

Wells Fargo

Strategic Municipal Bond Fund

 

 

 

 

Beginning on January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, paper copies of the Wells Fargo Funds’ annual and semi-annual shareholder reports issued after this date will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-222-8222 or by enrolling at wellsfargo.com/advantagedelivery.

You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call 1-800-222-8222. Your election to receive reports in paper will apply to all Wells Fargo Funds held in your account with your financial intermediary or, if you are a direct investor, to all Wells Fargo Funds that you hold.


 

 

Reduce clutter.

Save trees.

Sign up for electronic delivery of prospectuses and shareholder reports at wellsfargo.com/advantagedelivery

 

The views expressed and any forward-looking statements are as of December 31, 2019, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Asset Management. Discussions of individual securities, or the markets generally, or any Wells Fargo Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Asset Management and the Fund disclaim any obligation to publicly update or revise any views expressed or forward-looking statements.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE    MAY LOSE VALUE


 

 

 

Wells Fargo Strategic Municipal Bond Fund  |  1


Letter to shareholders (unaudited)

 

LOGO

Andrew Owen

President

Wells Fargo Funds

“After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July.

Dear Shareholder:

We are pleased to offer you this semi-annual report for the Wells Fargo Strategic Municipal Bond Fund for the six-month period that ended December 31, 2019. Despite periods of market volatility, the year was strongly positive for financial markets as supportive central banks more than offset concerns over slowing global economic growth and international trade tensions.

Overall, both fixed-income and equity investors enjoyed healthy returns. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 10.92% and international stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned 6.96%. The MSCI EM Index (Net)3 gained 7.09%. For bond investors, the Bloomberg Barclays U.S. Aggregate Bond Index4 added 2.45%, the Bloomberg Barclays Global Aggregate ex-USD Index5 returned 0.09%, the Bloomberg Barclays Municipal Bond Index6 gained 2.32%, and the ICE BofA U.S. High Yield Index7 added 3.86%.

Sentiment turned positive, driven by central bank support.

After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July. The gains, primarily driven by geopolitical and monetary policy events, pushed equity markets to new highs. European Central Bank President Mario Draghi indicated the bank was ready to cut rates or buy more assets to prop up inflation if needed. President Trump backed off of tariff threats against Mexico and China. The U.S. Federal Reserve (Fed) implemented a 0.25% federal funds rate cut in July.

Throughout the summer, U.S.-China trade tensions simmered. Major U.S. stock market indices closed July with the worst weekly results of the year. Bond prices gained as Treasury yields fell to multiyear lows, and the yield curve inverted at multiple points along the 30-year arc.

Evidence of a continued global economic slowdown mounted, and central banks in China, New Zealand, and Thailand cut interest rates. Industrial and manufacturing data declined in China, Canada, Japan, and Germany. Adding to global uncertainty, Italy’s prime minister resigned, many feared a crackdown in Hong Kong as protestors sustained their calls for reform, and Boris Johnson planned to suspend Parliament as Brexit’s deadline neared.

In the U.S., the Fed cut interest rates a second time in September. U.S. manufacturing data disappointed investors. The U.S. Congress announced it would pursue an impeachment investigation of President Trump. Meanwhile, the Brexit impasse showed no signs of resolution. Officials in China warned of the negative economic impact of tariffs and trade restrictions. Although the S&P 500 Index finished the third quarter with the best year-to-date returns in more than 20 years, concerns about future returns remained.

 

 

 

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 Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the United States. 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. You cannot invest directly in an index.

 

3 

The MSCI Emerging Markets (EM) Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index.

 

4 

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index.

 

5 

The Bloomberg Barclays Global Aggregate ex-USD Index is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S. dollar-denominated debt market. You cannot invest directly in an index.

 

6 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

7 

The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2020. ICE Data Indices, LLC. All rights reserved.

 

 

2  |  Wells Fargo Strategic Municipal Bond Fund


Letter to shareholders (unaudited)

 

The fourth quarter started on a strong note, with a relaxing of U.S.-China trade tensions in October along with renewed optimism for a U.K. Brexit deal and positive macroeconomic data. The initial estimate of U.S. third-quarter gross domestic product growth was a 1.9% annualized rate, while the U.S. unemployment rate fell to a 50-year low of 3.5% in September. However, despite resilience among U.S. consumers, business confidence declined while manufacturing activity contracted. Concerned with a potential economic slowdown, the Fed lowered interest rates another quarter point in late October, its third rate cut in four months. This helped push the S&P 500 Index to a new all-time high, while emerging market equities rallied and global bonds declined overall, reflecting a broad pickup in risk appetite.

Equity markets continued to rally in November despite ongoing geopolitical risks. Hopes for a U.S.-China trade deal buoyed investor confidence. U.S. business sentiment improved slightly, and manufacturing and services activity picked up. Throughout the month, central bank actions were on hold. With that positive backdrop, developed market equities outpaced those in emerging markets, and U.S. stocks outperformed non-U.S. stocks overall. While consumer confidence and purchasing manager activity rose in the eurozone, China reported weakening manufacturing and consumer data. Bond yields rose marginally, leading to slightly negative returns for global government and investment-grade corporate bonds.

Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal, with some details to be worked out. That, along with the landslide election win by the pro-Brexit U.K. Conservative Party and ongoing central bank support, gave investors a greater sense of certainty. U.S. economic indicators were broadly positive, with the exception of manufacturing activity and business confidence. Consumer confidence was resilient, fed by a robust labor market, tame inflation, and lower interest rates, which boosted housing affordability and homebuyer activity. The impeachment of U.S. President Donald Trump, while historically noteworthy, had little impact on markets. Meanwhile, slowing Chinese economic activity, due in part to the trade war, led to further government stimulus at year-end through lower reserve ratios, allowing banks to lend more money.

Don’t let short-term uncertainty derail long-term investment goals.

Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.

Thank you for choosing to invest with Wells Fargo Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.

Sincerely,

 

LOGO

Andrew Owen

President

Wells Fargo Funds

 

 

“Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal

 

 

For further information about your Fund, contact your investment professional, visit our website at wfam.com,

or call us directly at 1-800-222-8222.

 

 

 

Wells Fargo Strategic Municipal Bond Fund  |  3


Performance highlights (unaudited)

 

Investment objective

The Fund seeks current income exempt from regular federal income tax.

Manager

Wells Fargo Funds Management, LLC

Subadviser

Wells Capital Management Incorporated

Portfolio managers

Wendy Casetta

Terry J. Goode

Robert J. Miller

Average annual total returns (%) as of December 31, 20191

 

 
        Including sales charge     Excluding sales charge     Expense ratios2 (%)  
 
    Inception date   1 year     5 year     10 year     1 year     5 year     10 year     Gross     Net3  
                   
Class A (VMPAX)   12-1-1994     0.37       1.48       2.42       4.52       2.30       2.84       0.80       0.80  
                   
Class C (DHICX)   8-18-1997     2.73       1.54       2.07       3.73       1.54       2.07       1.55       1.55  
                   
Class R6 (VMPRX)4   7-31-2018                       4.91       2.48       3.01       0.42       0.42  
                   
Administrator Class (VMPYX)   10-6-1997                       4.75       2.43       2.98       0.74       0.68  
                   
Institutional Class (STRIX)5   11-30-2012                       4.86       2.64       3.13       0.47       0.47  
                   
Bloomberg Barclays Short-Intermediate Municipal Bond Index6                         5.23       2.39       2.86              

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, wfam.com.

Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.

For Class A shares, the maximum front-end sales charge is 4.00%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Class R6, Administrator Class, and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.

Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. High-yield securities have a greater risk of default and tend to be more volatile than higher-rated debt securities. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). The Fund is exposed to municipal securities risk. Consult the Fund’s prospectus for additional information on these and other risks. A portion of the Fund’s income may be subject to federal, state, and/or local income taxes or the Alternative Minimum Tax (AMT). Any capital gains distributions may be taxable.

 

Please see footnotes on page 5.

 

 

4  |  Wells Fargo Strategic Municipal Bond Fund


Performance highlights (unaudited)

 

Effective maturity distribution as of December 31, 20197
LOGO
Credit quality as of December 31, 20198
LOGO
 

 

 

 

1 

Historical performance shown prior to July 12, 2010, is based on the performance of the Fund’s predecessor, Evergreen Strategic Municipal Bond Fund.

 

2 

Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report.

 

3 

The manager has contractually committed through October 31, 2020, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.81% for Class A, 1.56% for Class C, 0.43% for Class R6, 0.68% for Administrator Class, and 0.48% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Without this cap, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses.

 

4 

Historical performance shown for Class R6 shares prior to their inception reflects the performance of the Institutional Class shares, and includes the higher expenses applicable to Institutional Class shares. If these expenses had not been included, returns for Class R6 shares would be higher.

 

5 

Historical performance shown for the Institutional class shares prior to their inception reflects the performance of the Administrator Class shares, and includes the higher expenses applicable to the Administrator Class shares. If these expenses had not been included, returns for Institutional Class shares would be higher.

 

6 

The Bloomberg Barclays Short-Intermediate Municipal Bond Index is a rules-based, market-value-weighted index composed of publicly traded municipal bonds that cover the U.S. dollar–denominated short-term tax-exempt bond market, including state and local general obligation bonds, revenue bonds, insured bonds, and prefunded bonds. You cannot invest directly in an index.

 

7 

Amounts are calculated based on the long-term total investments of the Fund. These amounts are subject to change and may have changed since the date specified.

 

8 

The credit quality distribution of portfolio holdings reflected in the chart is based on ratings from Standard & Poor’s, Moody’s Investors Service, and/ or Fitch Ratings Ltd. Credit quality ratings apply to the underlying holdings of the Fund and not to the Fund itself. The percentages of the Fund’s portfolio with the ratings depicted in the chart are calculated based on the total market value of fixed income securities held by the Fund. If a security was rated by all three rating agencies, the middle rating was utilized. If rated by two of three rating agencies, the lower rating was utilized, and if rated by one of the rating agencies, that rating was utilized. Standard & Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories. Standard & Poor’s rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody’s rates the creditworthiness of bonds, ranging from Aaa (highest) to C (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Moody’s rates the creditworthiness of short-term U.S. tax-exempt municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Credit quality distribution is subject to change and may have changed since the date specified.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  5


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 and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing 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 period from July 1, 2019 to December 31, 2019.

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) and contingent deferred sales charges. 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
account  value
7-1-2019
     Ending
account value
12-31-2019
     Expenses
paid during
the period¹
     Annualized net
expense ratio
 
         

Class A

           

Actual

   $ 1,000.00      $ 1,014.30      $ 4.00        0.79

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,021.17      $ 4.01        0.79
         

Class C

           

Actual

   $ 1,000.00      $ 1,010.47      $ 7.78        1.54

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,017.39      $ 7.81        1.54
         

Class R6

           

Actual

   $ 1,000.00      $ 1,015.13      $ 2.08        0.41

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,023.08      $ 2.08        0.41
         

Administrator Class

           

Actual

   $ 1,000.00      $ 1,014.85      $ 3.44        0.68

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,021.72      $ 3.46        0.68
         

Institutional Class

           

Actual

   $ 1,000.00      $ 1,015.98      $ 2.33        0.46

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.82      $ 2.34        0.46

 

1 

Expenses paid is equal to the annualized net expense ratio of each class 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).

 

 

6  |  Wells Fargo Strategic Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Municipal Obligations: 97.97%

 

Alabama: 2.48%

         
Health Revenue: 0.21%                          

Birmingham AL Special Care Facilities Ascension Senior Credit Group Series C-1

    1.85     11-15-2046      $ 5,395,000      $ 5,473,821  
         

 

 

 
Industrial Development Revenue: 0.14%                          

Selma AL Industrial Development Board Refunding Bonds Gulf Opportunity Zone International Paper Company

    2.00       11-1-2033        3,675,000        3,707,193  
         

 

 

 
Utilities Revenue: 2.13%                          

Alabama Black Belt Energy Gas District Series A

    4.00       12-1-2048        2,000,000        2,159,620  

Southeast Alabama Gas Supply District Project #1 Series A

    4.00       4-1-2049        4,410,000        4,783,968  

Southeast Alabama Gas Supply District Project #2 Series A

    4.00       6-1-2049        16,505,000        17,994,411  

Tender Option Bond Trust Receipts/Floater Certificates Series 2016-XM0184 (Morgan Stanley Bank LIQ) 144Aø

    2.01       9-1-2046        31,400,000        31,400,000  
            56,337,999  
         

 

 

 
            65,519,013  
         

 

 

 

Alaska: 0.81%

         
Health Revenue: 0.47%                          

Alaska Industrial Development & Export Authority Loan Anticipation Notes YKHC Project

    3.50       12-1-2020        6,000,000        6,007,200  

Alaska Industrial Development & Export Authority Tanana Chiefs Conference Project Series 2019A

    5.00       10-1-2027        1,455,000        1,759,299  

Alaska Industrial Development & Export Authority Tanana Chiefs Conference Project Series 2019A

    5.00       10-1-2028        1,530,000        1,867,304  

Alaska Industrial Development & Export Authority Tanana Chiefs Conference Project Series 2019A

    5.00       10-1-2029        2,220,000        2,735,195  
            12,368,998  
         

 

 

 
Industrial Development Revenue: 0.16%                          

Valdez AK Marine Terminal BP Pipelines Project Series B

    5.00       1-1-2021        4,000,000        4,142,520  
         

 

 

 
Utilities Revenue: 0.18%                          

Alaska Industrial Development & Export Authority Power Refunding Bonds Snettisham Hydroelectric Project Series 2015

    5.00       1-1-2022        1,735,000        1,826,088  

Alaska Industrial Development & Export Authority Power Refunding Bonds Snettisham Hydroelectric Project Series 2015

    5.00       1-1-2023        2,835,000        3,051,707  
            4,877,795  
         

 

 

 
            21,389,313  
         

 

 

 

Arizona: 1.52%

         
Education Revenue: 0.52%                          

Arizona IDA Agribusiness & Equine Center Incorporated Project Series 2017B 144A

    4.00       3-1-2027        1,210,000        1,277,264  

Arizona IDA Education Facility Leman Academy of Excellence Incorporated Project 144A

    4.50       7-1-2029        765,000        790,505  

Maricopa County AZ IDA Educational Horizon Community Learning Center Project

    2.63       7-1-2021        1,085,000        1,082,873  

Phoenix AZ IDA BASIS Schools Incorporated Project Series A 144A

    3.00       7-1-2020        120,000        120,434  

Phoenix AZ IDA BASIS Schools Incorporated Project Series A 144A

    3.00       7-1-2020        670,000        672,425  

Phoenix AZ IDA Great Hearts Academies Project

    5.20       7-1-2022        345,000        360,045  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  7


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Education Revenue (continued)                          

Phoenix AZ IDA Legacy Traditional School Project Series 2015 144A

    3.00     7-1-2020      $ 305,000      $ 305,387  

Pima County AZ IDA American Leadership Academy Project Series 2015 144A

    4.60       6-15-2025        1,095,000        1,145,874  

Pima County AZ IDA Charter Schools Project Series 2013

    4.50       7-1-2020        530,000        536,567  

Pima County AZ IDA Charter Schools Project Series 2013

    4.50       7-1-2021        1,295,000        1,342,047  

Pima County AZ IDA Charter Schools Project Series 2013

    4.50       7-1-2022        1,350,000        1,406,282  

Pima County AZ IDA New Plan Learning Project Series A

    7.75       7-1-2035        985,000        975,386  

Pima County AZ IDA New Plan Learning Project Series A

    8.13       7-1-2041        2,950,000        2,917,521  

Pima County AZ IDA Noah Webster Schools Project Series A

    5.50       12-15-2023        785,000        838,639  
     13,771,249  
         

 

 

 
GO Revenue: 0.05%                          

Verrado AZ Community Facilities District #1 Series A 144A

    5.00       7-15-2020        700,000        707,119  

Verrado AZ Community Facilities District #1 Series A 144A

    5.00       7-15-2021        500,000        512,980  
     1,220,099  
         

 

 

 
Health Revenue: 0.50%                          

Maricopa County AZ IDA Senior Living Facilities Christian Care Retirement Apartments Incorporated Project

    5.00       1-1-2022        1,065,000        1,146,238  

Maricopa County AZ IDA Senior Living Facilities Christian Care Retirement Apartments Incorporated Project

    5.00       1-1-2023        1,120,000        1,245,104  

Maricopa County AZ IDA Senior Living Facilities Christian Care Surprise Incorporated Project 144A

    5.00       1-1-2026        3,015,000        3,079,461  

Maricopa County AZ IDA Series 2019C (SIFMA Municipal Swap +0.57%) ±

    2.18       1-1-2035        5,840,000        5,851,972  

Tempe AZ IDA Mirabella Arizona State University Project Series B1 144A

    4.00       10-1-2023        1,810,000        1,824,353  
     13,147,128  
         

 

 

 
Miscellaneous Revenue: 0.45%                          

Navajo Nation AZ Series A 144A

    4.00       12-1-2022        6,345,000        6,589,600  

Navajo Nation AZ Series A 144A

    5.00       12-1-2025        4,110,000        4,578,992  

Navajo Nation AZ Tribal Utility Authority (Municipal Government Guaranty Insured)

    4.00       1-1-2021        803,000        804,100  
     11,972,692  
         

 

 

 
     40,111,168  
         

 

 

 

Arkansas: 0.69%

         
Health Revenue: 0.18%                          

Boone County AR Hospital Construction Series 2006 (BOKF NA LOC) ø

    3.00       5-1-2037        4,700,000        4,700,000  
         

 

 

 
Housing Revenue: 0.22%                          

Arkansas Development Finance Authority MFHR Hickory View Apartments (Department of Housing and Urban Development Insured)

    1.37       9-1-2023        6,000,000        5,992,140  
         

 

 

 
Tax Revenue: 0.29%                          

Fayetteville AR Sales and Use Tax Capital Improvement Refunding Bonds Series A

    1.60       11-1-2035        7,600,000        7,629,488  
         

 

 

 
     18,321,628  
         

 

 

 

California: 1.24%

         
Education Revenue: 0.04%                          

California Municipal Finance Authority Charter School Nova Academy Project Series 2016A 144A

    4.00       6-15-2026        825,000        889,276  

 

The accompanying notes are an integral part of these financial statements.

 

 

8  |  Wells Fargo Strategic Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Education Revenue (continued)                          

California School Finance Authority Charter School Rocketship Education Obligated Group Series 2017A 144A

    4.50     6-1-2027      $ 250,000      $ 269,448  
            1,158,724  
         

 

 

 
Health Revenue: 0.65%                          

California Statewide CDA Health Facilities Catholic Series D (AGM Insured) (m)

    1.65       7-1-2041        8,700,000        8,700,000  

California Statewide CDA Health Facilities Catholic Series E (AGM Insured) (m)

    1.70       7-1-2040        8,525,000        8,525,000  
            17,225,000  
         

 

 

 
Housing Revenue: 0.07%                          

California HFA Municipal Certificates Series 2019 Class A

    4.00       3-20-2033        1,500,000        1,715,325  
         

 

 

 
Industrial Development Revenue: 0.35%                          

California Municipal Finance Authority Special Facility Revenue United Airlines Incorporated

    4.00       7-15-2029        2,500,000        2,841,475  

California PCFA AMT Calplant I Project 144A

    7.50       7-1-2032        3,500,000        3,465,210  

California PCFA Solid Waste Disposal Revenue AMT Subordinated Calplant I Project Green 144A

    7.50       12-1-2039        3,000,000        2,854,350  
            9,161,035  
         

 

 

 
Miscellaneous Revenue: 0.13%                          

Compton CA PFA Lease 144A

    4.00       9-1-2022        3,390,000        3,463,868  
         

 

 

 
            32,723,952  
         

 

 

 

Colorado: 1.33%

         
Education Revenue: 0.56%                          

Colorado ECFA Eagle Ridge Academy Project 144A

    3.63       11-1-2026        1,935,000        1,961,819  

Colorado ECFA Rocky Mountain Classical Academy Project

    6.38       9-1-2023        1,190,000        1,314,165  

Colorado ECFA Vanguard School Project

    4.00       6-15-2021        250,000        259,408  

Colorado ECFA Vanguard School Project

    4.00       6-15-2022        515,000        546,343  

Colorado ECFA Windsor Charter Academy 144A

    3.88       9-1-2026        1,085,000        1,091,293  

Colorado School of Mines Institutional Enterprise Refunding Bonds Series 2018A (1 Month LIBOR +0.50%) ±

    1.65       2-1-2023        5,820,000        5,844,037  

Colorado University Enterprise and Refunding Bond Series C

    2.00       6-1-2054        3,750,000        3,850,388  
            14,867,453  
         

 

 

 
GO Revenue: 0.16%                          

Aviation Station North Metropolitan District #2 Colorado Refunding Bonds and Improvement Limited Tax Series A

    4.00       12-1-2029        500,000        514,870  

Centennial CO Southglenn Metropolitan District

    3.00       12-1-2021        463,000        465,440  

Grand River CO Hospital District (AGM Insured)

    5.00       12-1-2025        1,000,000        1,192,360  

STC Metropolitan District #2 Colorado Refunding Bonds and Improvement Senior Limited Tax Special Revenue

    3.00       12-1-2025        560,000        562,285  

STC Metropolitan District #2 Colorado Refunding Bonds and Improvement Senior Limited Tax Special Revenue

    4.00       12-1-2029        1,000,000        1,051,930  

Thompson Crossing Metropolitan District #4 Colorado Refunding Bonds and Improvement Limited Tax

    3.50       12-1-2029        515,000        516,360  
            4,303,245  
         

 

 

 
Health Revenue: 0.40%                          

Colorado Health Facilities Authority Catholic Health Initiatives Series 2011A

    5.00       2-1-2022        3,415,000        3,555,391  

Colorado Health Facilities Authority Catholic Health Initiatives Series 2011A

    5.25       2-1-2031        5,150,000        5,375,467  

Colorado Health Facilities Authority Christian Living Neighborhoods Project

    4.00       1-1-2020        450,000        450,000  

Colorado Health Facilities Authority Series B-2

    5.00       8-1-2049        1,000,000        1,179,840  
            10,560,698  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  9


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue: 0.07%                          

Colorado State Bridge Enterprise Senior Revenue Bonds AMT Central 70 Project Private Activity

    4.00 %       12-31-2024      $ 1,610,000      $ 1,778,132  
         

 

 

 
Tax Revenue: 0.14%                          

Centerra CO Metropolitan District #1 Series 2017 144A

    5.00       12-1-2021        1,440,000        1,508,400  

Centerra CO Metropolitan District #1 Series 2017 144A

    5.00       12-1-2022        1,940,000        2,070,252  
            3,578,652  
         

 

 

 
            35,088,180  
         

 

 

 

Connecticut: 2.64%

         
Education Revenue: 0.45%                          

Connecticut HEFAR Yale University Issue Series A

    2.05       7-1-2035        7,000,000        7,097,090  

Connecticut HEFAR Yale University Issue Series A-2

    2.00       7-1-2042        1,500,000        1,547,835  

Connecticut State HEFA University of Hartford Project Series N

    5.00       7-1-2026        575,000        686,579  

Connecticut State HEFA University of Hartford Project Series N

    5.00       7-1-2027        430,000        521,801  

Connecticut State HEFA University of Hartford Project Series N

    5.00       7-1-2028        530,000        651,540  

Connecticut State Higher Education Supplemental Loan Authority AMT Chelsea Loan Program Series B

    5.00       11-15-2026        750,000        889,185  

Connecticut State Higher Education Supplemental Loan Authority AMT Chelsea Loan Program Series B

    5.00       11-15-2027        500,000        600,935  
            11,994,965  
         

 

 

 
GO Revenue: 0.18%                          

Hartford CT Series A

    5.00       4-1-2027        1,650,000        1,829,949  

Hartford CT Series A

    5.00       4-1-2025        2,500,000        2,785,375  
            4,615,324  
         

 

 

 
Health Revenue: 0.02%                          

Connecticut HEFA Bridgeport Hospital Series D

    5.00       7-1-2020        500,000        509,815  
         

 

 

 
Housing Revenue: 0.37%                          

Meriden CT MFHR Yale Acres Project

    1.73       8-1-2022        9,635,000        9,691,654  
         

 

 

 
Miscellaneous Revenue: 0.10%                          

Connecticut Series A (SIFMA Municipal Swap +0.75%) ±

    2.36       3-1-2021        2,700,000        2,713,635  
         

 

 

 
Tax Revenue: 1.52%                          

Connecticut State Special Tax Obligation Revenue Transportation Infrastructure Purpose Series A

    5.00       8-1-2029        16,280,000        19,143,815  

Connecticut State Special Tax Obligation Revenue Transportation Infrastructure Purpose Series B

    5.00       10-1-2030        3,000,000        3,749,190  

Connecticut State Special Tax Obligation Revenue Transportation Infrastructure Purpose Series B

    5.00       10-1-2031        9,000,000        11,167,560  

Connecticut State Special Tax Obligation Revenue Transportation Infrastructure Purpose Series B

    5.00       10-1-2032        5,000,000        6,175,250  
            40,235,815  
         

 

 

 
            69,761,208  
         

 

 

 

Delaware: 0.07%

         
Education Revenue: 0.07%                          

Delaware EDA Odyssey Charter School Project Series A 144A

    6.25       9-1-2025        1,730,000        1,846,602  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

10  |  Wells Fargo Strategic Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

District of Columbia: 0.99%

         
Housing Revenue: 0.83%                          

District of Columbia HFA Hilltop Apartments Project Series 2017

    1.94 %       1-1-2021      $ 5,850,000      $ 5,850,000  

District of Columbia HFA MFHR 1550 First Street Project

    1.46       6-1-2039        16,100,000        16,124,955  
            21,974,955  
         

 

 

 
Water & Sewer Revenue: 0.16%                          

District of Columbia Water and Sewer Authority Public Utility Subordinated Lien Series C

    1.75       10-1-2054        4,000,000        4,074,480  
         

 

 

 
            26,049,435  
         

 

 

 

Florida: 1.71%

         
Airport Revenue: 0.13%                          

Miami-Dade County FL Seaport AMT Series B

    6.00       10-1-2032        1,385,000        1,602,861  

Miami-Dade County FL Seaport AMT Series B

    6.00       10-1-2033        1,500,000        1,735,710  
            3,338,571  
         

 

 

 
Education Revenue: 0.30%                          

Capital Trust Agency Educational Facilities Renaissance Charter School Incorporated Projects Series 2017A 144A

    4.38       6-15-2027        1,310,000        1,366,553  

Capital Trust Agency Educational Facilities Renaissance Charter School Incorporated Projects Series A 144A

    4.00       6-15-2029        2,410,000        2,484,614  

Florida State HEFAR Educational Facilities Florida Institute of Technology

    5.00       10-1-2027        650,000        775,678  

Florida State HEFAR Educational Facilities Florida Institute of Technology

    5.00       10-1-2028        1,050,000        1,267,571  

Florida State HEFAR Educational Facilities Florida Institute of Technology

    5.00       10-1-2029        1,000,000        1,221,340  

Miami-Dade County FL IDA Youth Charter Schools Project Series 2015A 144A

    5.00       9-15-2025        800,000        836,632  
            7,952,388  
         

 

 

 
Health Revenue: 0.30%                          

Lakeland FL Hospital System Lakeland Regional Health System

    5.00       11-15-2022        4,495,000        4,791,041  

Orange County FL Health Facilities Authority Lakeside Behavioral Healthcare Incorporated Project (SunTrust Bank LOC) ø

    1.53       7-1-2027        1,625,000        1,625,000  

Sarasota County FL Health Facilities Authority Village on the Isle Project

    4.00       1-1-2020        1,485,000        1,485,000  
            7,901,041  
         

 

 

 
Housing Revenue: 0.20%                          

University of West Florida Foundation Incorporated Dormitory Series A

    5.00       6-1-2020        1,210,000        1,227,472  

University of West Florida Foundation Incorporated Dormitory Series A

    5.00       6-1-2021        1,265,000        1,327,845  

University of West Florida Foundation Incorporated Dormitory Series A

    5.00       6-1-2022        1,325,000        1,436,313  

University of West Florida Foundation Incorporated Dormitory Series A

    5.00       6-1-2023        1,190,000        1,329,944  
            5,321,574  
         

 

 

 
Industrial Development Revenue: 0.11%                          

Escambia County FL Environmental Improvement Refunding Bonds International Paper Company Project Series B

    2.00       11-1-2033        825,000        832,227  

Florida Development Finance Corporation 144A

    5.00       5-1-2029        2,000,000        2,213,520  
            3,045,747  
         

 

 

 
Miscellaneous Revenue: 0.18%                          

Florida Village Community Development District #10 Special Assessment Bonds

    5.13       5-1-2024        2,245,000        2,397,346  

Florida Village Community Development District #12 Special Assessment Bonds Series 2016

    2.88       5-1-2021        655,000        659,611  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  11


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue (continued)                          

Florida Village Community Development District #13 Special Assessment Bonds 144A

    2.63 %       5-1-2024      $ 500,000      $ 502,810  

Pinellas County FL IDA 2017 Foundation for Global Understanding Incorporated Project

    5.00       7-1-2029        1,000,000        1,188,460  
            4,748,227  
         

 

 

 
Resource Recovery Revenue: 0.14%                          

Florida Development Finance Corporation Solid Waste AMT Pro USA Incorporated 144A

    5.00       8-1-2029        3,500,000        3,729,705  
         

 

 

 
Transportation Revenue: 0.35%                          

Florida Development Finance Corporation Surface Series T

    1.90       1-1-2049        6,400,000        6,406,976  

Miami-Dade County FL Expressway Authority Toll System (AGM Insured, Citibank NA LIQ) 144Aø

    1.85       2-1-2020        1,050,000        1,050,000  

Osceola County FL Transportation Revenue Refunding Bonds and Improvement Osceola Parkway Series 2019A-1 %%

    5.00       10-1-2027        950,000        1,164,263  

Osceola County FL Transportation Revenue Refunding Bonds and Improvement Osceola Parkway Series 2019A-1 %%

    5.00       10-1-2029        450,000        569,043  
            9,190,282  
         

 

 

 
            45,227,535  
         

 

 

 

Georgia: 4.20%

         
Health Revenue: 0.23%                          

Gainesville & Hall Counties GA Hospital Authority Health System Project Series B (SIFMA Municipal Swap +0.95%) ±

    2.56       8-15-2035        6,000,000        6,003,060  
         

 

 

 
Housing Revenue: 0.04%                          

Northwest Georgia Housing Authority MFHR Charles Hight Apartments Project (FHA Insured)

    1.54       8-1-2022        1,000,000        1,001,220  
         

 

 

 
Transportation Revenue: 0.07%                          

Georgia Road & Tollway Authority I-75 S Express Lanes Project Series A 144A¤

    0.00       6-1-2024        2,500,000        2,031,050  
         

 

 

 
Utilities Revenue: 3.86%                          

Bartow County GA Development Authority Pollution Control Georgia Power Company Plant Bowen Project

    1.55       8-1-2043        5,000,000        4,985,650  

Bartow County GA Development Authority Pollution Control Georgia Power Company Plant Bowen Project

    2.75       12-1-2032        4,500,000        4,644,000  

Burke County GA Development Authority Georgia Power Company Plant Vogtle Project

    2.25       10-1-2032        1,500,000        1,526,445  

Burke County GA Development Authority Oglethorpe Power Corporation Vogtle Project Series E

    3.25       11-1-2045        3,000,000        3,134,550  

Burke County GA Development Authority Oglethorpe Power Corporation Vogtle Project Series F

    3.00       11-1-2045        14,955,000        15,356,691  

Burke County GA Development Authority Pollution Control Revenue Bonds Georgia Power Company Plant Vogtle Project

    1.70       12-1-2049        3,500,000        3,494,505  

Floyd County GA PCR Georgia Power Company Plant Hammond Project

    2.35       7-1-2022        8,875,000        8,949,994  

Main Street Natural Gas Incorporated Georgia Gas Project Series B

    4.00       8-1-2049        10,000,000        11,153,200  

Main Street Natural Gas Incorporated Georgia Gas Project Series C

    4.00       8-1-2048        14,485,000        15,790,823  

Main Street Natural Gas Incorporated Georgia Gas Project Series C

    4.00       3-1-2050        10,500,000        11,882,220  

Main Street Natural Gas Incorporated Georgia Gas Project Subordinate Bond Series A (Royal Bank of Canada LIQ)

    4.00       4-1-2048        2,640,000        2,865,878  

Main Street Natural Gas Incorporated Georgia Gas Project Subordinate Bond Series B (1 Month LIBOR +0.75%) ±

    1.90       4-1-2048        4,700,000        4,710,716  

 

The accompanying notes are an integral part of these financial statements.

 

 

12  |  Wells Fargo Strategic Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Utilities Revenue (continued)                          

Municipal Electric Authority Georgia General Resolution Projects Subordinate Bonds Series A

    5.00 %       1-1-2028      $ 1,035,000      $ 1,263,321  

Municipal Electric Authority Georgia General Resolution Projects Subordinated Bonds Series A

    5.00       1-1-2027        1,010,000        1,215,363  

Municipal Electric Authority Georgia Plant Vogtle Units 3&4 Project M Series A

    5.00       1-1-2027        300,000        360,999  

Municipal Electric Authority Georgia Plant Vogtle Units 3&4 Project M Series A

    5.00       1-1-2028        400,000        489,232  

Municipal Electric Authority Georgia Plant Vogtle Units 3&4 Project M Series A

    5.00       1-1-2029        400,000        490,504  

Municipal Electric Authority Georgia Plant Vogtle Units 3&4 Project P Series B

    5.00       1-1-2028        1,000,000        1,215,660  

Municipal Electric Authority Georgia Plant Vogtle Units 3&4 Project P Series B

    5.00       1-1-2029        910,000        1,109,563  

Municipal Electric Authority Georgia Project One Subordinated Bonds Series A

    5.00       1-1-2027        1,150,000        1,383,830  

Municipal Electric Authority Georgia Project One Subordinated Bonds Series A

    5.00       1-1-2028        1,270,000        1,550,162  

Municipal Electric Authority Georgia Project One Subordinated Bonds Series A

    5.00       1-1-2029        1,140,000        1,411,753  

Municipal Electric Authority Georgia Project One Subordinated Bonds Series A

    5.00       1-1-2030        1,025,000        1,262,523  

Municipal Electric Authority Georgia Project One Subordinated Bonds Series A

    5.00       1-1-2031        1,385,000        1,696,542  
            101,944,124  
         

 

 

 
            110,979,454  
         

 

 

 

Guam: 0.04%

         
Water & Sewer Revenue: 0.04%                          

Guam Government Waterworks Authority Water & Wastewater System Series 2014A

    5.00       7-1-2020        1,000,000        1,016,330  
         

 

 

 

Hawaii: 0.35%

         
Health Revenue: 0.35%                          

Hawaii Department of Budget & Finance Queens Health System Series B (SIFMA Municipal Swap +0.45%) ±

    2.06       7-1-2039        9,325,000        9,325,000  
         

 

 

 

Illinois: 18.39%

         
Airport Revenue: 1.68%                          

Chicago IL Midway Airport Second Lien Refunding Bonds Series 2013A

    5.50       1-1-2027        3,925,000        4,392,625  

Chicago IL Midway Airport Second Lien Refunding Bonds Series 2014A

    5.00       1-1-2026        7,000,000        7,940,730  

Chicago IL Midway Airport Second Lien Refunding Bonds Series 2014A

    5.00       1-1-2030        4,925,000        5,548,111  

Chicago IL O’Hare International Airport AMT Passenger Facility Charge Refunding Bonds Series B

    5.00       1-1-2032        5,125,000        5,446,748  

Chicago IL O’Hare International Airport Senior Lien Bonds Series 2015C

    5.00       1-1-2022        695,000        745,610  

Chicago IL O’Hare International Airport Senior Lien Bonds Series 2015D

    5.00       1-1-2021        500,000        518,775  

Chicago IL O’Hare International Airport Senior Lien Refunding Bonds Series 2013A

    5.00       1-1-2026        2,690,000        2,966,209  

Chicago IL O’Hare International Airport Senior Lien Refunding Bonds Series 2015A

    5.00       1-1-2028        10,000,000        11,573,600  

Chicago IL O’Hare International Airport Senior Lien Refunding Bonds Series 2017D

    5.00       1-1-2025        1,700,000        1,989,374  

Chicago IL O’Hare International Airport Customer Facility Charge

    5.25       1-1-2023        1,350,000        1,501,403  

Chicago IL O’Hare International Airport Customer Facility Charge

    5.25       1-1-2024        1,665,000        1,860,055  
            44,483,240  
         

 

 

 
Education Revenue: 0.20%                          

University of Illinois Board of Trustees Auxiliary Facilities System Refunding Bond

    4.00       4-1-2030        5,000,000        5,296,150  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  13


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue: 5.81%                          

Bensenville IL Series B (AGM Insured)

    5.00     12-30-2025      $ 435,000      $ 463,584  

Berwyn IL Series A

    5.00       12-1-2028        3,000,000        3,378,990  

Chicago IL Board of Education Unlimited Tax General Obligation Refunding Bonds Series 2018A (AGM Insured)

    5.00       12-1-2024        3,000,000        3,412,620  

Chicago IL CAB City Colleges (National Insured) ¤

    0.00       1-1-2027        7,720,000        6,415,629  

Chicago IL CAB City Colleges (National Insured) ¤

    0.00       1-1-2024        9,800,000        8,923,488  

Chicago IL Park District General Obligation Limited Series A

    5.00       1-1-2022        400,000        425,244  

Chicago IL Park District General Obligation Limited Series A

    5.00       1-1-2023        800,000        872,584  

Chicago IL Park District General Obligation Limited Series A

    5.00       1-1-2024        550,000        616,050  

Chicago IL Park District General Obligation Limited Series A

    5.00       1-1-2025        625,000        713,125  

Chicago IL Park District General Obligation Limited Series C

    5.00       1-1-2022        1,000,000        1,063,110  

Chicago IL Park District General Obligation Limited Series C

    5.00       1-1-2023        1,000,000        1,090,730  

Chicago IL Park District General Obligation Limited Series C

    5.00       1-1-2024        410,000        459,237  

Chicago IL Park District Harbor Facilities Series D

    5.00       1-1-2022        1,645,000        1,748,816  

Chicago IL Park District Harbor Facilities Series D

    5.00       1-1-2023        1,175,000        1,281,608  

Chicago IL Park District Limited Tax Series B

    5.00       1-1-2022        4,675,000        4,970,039  

Chicago IL Park District Unlimited Tax Series E

    5.00       11-15-2022        1,235,000        1,345,174  

Chicago IL Park District Unlimited Tax Series E

    5.00       11-15-2023        1,295,000        1,444,352  

Chicago IL Series C

    5.00       1-1-2021        1,000,000        1,037,450  

Chicago IL Series C

    5.00       1-1-2022        2,250,000        2,370,128  

Chicago IL Series C

    5.00       1-1-2023        2,500,000        2,688,025  

Chicago IL Series G (Ambac Insured)

    5.00       12-1-2024        605,000        607,589  

Cook County IL Community Consolidated School District #15 Palatine

    5.00       12-1-2026        2,540,000        3,019,120  

Cook County IL Refunding Bonds Series 2010 G

    5.00       11-15-2026        1,000,000        1,029,480  

Cook County IL School District #123 Oak Lawn CAB (National Insured) ¤

    0.00       12-1-2021        1,090,000        1,056,275  

Cook County IL School District #153 Homewood Series A (AGM Insured) ¤

    0.00       12-15-2023        1,225,000        1,136,457  

Cook County IL School District #227 Rich Township Refunding Bonds Series 2015

    3.00       12-1-2024        965,000        1,020,960  

Cook County IL School District #99 Cicero Limited Tax (BAM Insured)

    5.00       12-1-2026        3,030,000        3,627,395  

Cook County IL School District #99 Cicero Limited Tax (BAM Insured)

    5.00       12-1-2027        2,950,000        3,581,359  

Cook County IL School District #99 Cicero Limited Tax (BAM Insured)

    5.00       12-1-2028        2,285,000        2,805,409  

Cook County IL School District #99 Cicero Refunding Bonds Limited Tax Series B

    5.00       12-1-2022        1,000,000        1,097,170  

Cook County IL School District #99 Cicero Refunding Bonds Limited Tax Series B

    5.00       12-1-2024        1,000,000        1,153,210  

Cook County IL School District #99 Cicero Refunding Bonds Limited Tax Series B

    5.00       12-1-2025        1,000,000        1,175,690  

Cook County IL Series A

    5.00       11-15-2021        2,250,000        2,388,893  

Cook County IL Series A

    5.00       11-15-2030        2,200,000        2,581,062  

Cook County IL Series A

    5.25       11-15-2022        10,040,000        10,360,979  

Cook County IL Series A

    5.25       11-15-2022        1,000,000        1,076,230  

Decatur IL Macon County General Obligation Refunding Bonds Series 2013

    5.00       3-1-2024        1,405,000        1,534,653  

Decatur IL Macon County School District #061 Series 2011A (AGM Insured)

    5.25       1-1-2026        715,000        741,441  

Decatur IL Macon County School District #061 Series 2011A (AGM Insured)

    5.25       1-1-2027        1,495,000        1,549,926  

DeKalb & Kane Counties IL Community Unit School District #427 Sycamore Prerefunded Bond Balance CAB (AGM Insured) ¤

    0.00       1-1-2024        455,000        429,315  

DeKalb & Kane Counties IL Community Unit School District #427 Sycamore Unrefunded Bond Balance CAB (AGM Insured) ¤

    0.00       1-1-2024        5,175,000        4,785,323  

DuPage & Cook Counties IL Township High School District #86 Hinsdale

    4.00       1-15-2034        2,815,000        3,198,938  

Illinois State Series 2012

    5.00       3-1-2028        6,000,000        6,330,060  

Illinois State Series A

    5.00       4-1-2023        3,500,000        3,808,735  

Kane, Cook & DuPage Counties IL School District #46 Elgin Series 2015A

    5.00       1-1-2028        1,555,000        1,755,548  

Kane, Cook & DuPage Counties IL School District #46 Elgin Series 2015D

    5.00       1-1-2032        1,025,000        1,143,090  

Kane, Cook & DuPage Counties IL School District #46 Elgin Unrefunded Bond Balance Series 2012B

    4.50       1-1-2025        4,295,000        4,528,605  

 

The accompanying notes are an integral part of these financial statements.

 

 

14  |  Wells Fargo Strategic Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue (continued)                          

Kane, Cook & DuPage Counties IL School District #46 Prerefunded CAB Series B (Ambac Insured) ¤

    0.00 %       1-1-2021      $ 510,000      $ 503,273  

Kane, Cook & DuPage Counties IL School District #46 Unrefunded CAB Series B (Ambac Insured) ¤

    0.00       1-1-2021        595,000        585,819  

Madison-Macoupin Etc Counties IL Community College District #536 Series A (BAM Insured)

    5.00       11-1-2025        1,620,000        1,848,679  

Madison-Macoupin Etc Counties IL Community College District #536 Series A (BAM Insured)

    5.00       11-1-2026        1,410,000        1,603,565  

Rockford IL Waterworks System Series B (BAM Insured)

    5.00       12-15-2020        1,000,000        1,032,980  

Rockford IL Waterworks System Series B (BAM Insured)

    5.00       12-15-2021        1,015,000        1,083,218  

Rockford IL Waterworks System Series B (BAM Insured)

    5.00       12-15-2022        1,065,000        1,166,931  

Waukegan IL Series 2015A (AGM Insured)

    5.00       12-30-2031        1,000,000        1,138,510  

Will County IL

    4.00       11-15-2035        2,490,000        2,745,250  

Will County IL Lincoln-Way Community High School District #210

    4.00       1-1-2022        1,630,000        1,632,103  

Will County IL Lincoln-Way Community High School District #210 Unrefunded CAB (AGM Insured) ¤

    0.00       1-1-2021        2,185,000        2,146,413  

Will County IL Lincoln-Way Community High School District #210 Unrefunded CAB (AGM Insured) ¤

    0.00       1-1-2025        14,385,000        12,893,276  

Will County IL Lincoln-Way Community High School District #210 Unrefunded CAB (AGM Insured) ¤

    0.00       1-1-2026        8,295,000        7,226,604  

Will County IL School District #114 Manhattan CAB Series C (National Insured) ¤

    0.00       12-1-2021        1,055,000        1,015,796  

Winnebago & Boone Counties IL School District #205 Series A ¤

    0.00       2-1-2021        1,305,000        1,280,714  

Winnebago & Boone Counties IL School District #205 Series B ¤

    0.00       2-1-2021        3,400,000        3,336,726  
            153,482,752  
         

 

 

 
Health Revenue: 0.26%                          

Illinois Finance Authority Ascension Health Alliance Senior Credit Group Bonds Series A

    5.00       11-15-2027        1,000,000        1,071,850  

Illinois Finance Authority Friendship Village of Schaumburg Series 2017

    5.00       2-15-2021        2,555,000        2,577,510  

Illinois Finance Authority Revenue Bonds Lutheran Life Communities

    4.00       11-1-2020        320,000        323,584  

Illinois Finance Authority Revenue Bonds Lutheran Life Communities

    4.00       11-1-2022        390,000        403,486  

Illinois Finance Authority Revenue Bonds Lutheran Life Communities

    4.00       11-1-2024        420,000        441,239  

Illinois Finance Authority Revenue Bonds Series 2014

    5.00       8-1-2038        1,520,000        1,780,224  

Illinois Finance Authority Rosalind Franklin University of Medicine & Science Series A

    3.25       2-15-2022        380,000        382,234  
            6,980,127  
         

 

 

 
Housing Revenue: 0.04%                          

Illinois Housing Development Authority Homeowner Mortgage 2016 Series C

    2.90       8-1-2031        1,000,000        1,028,150  
         

 

 

 
Miscellaneous Revenue: 1.82%                          

Chicago IL Board of Education Refunding Bonds Series A

    4.00       12-1-2027        1,750,000        1,888,950  

Chicago IL Board of Education Refunding Bonds Series B

    5.00       12-1-2026        2,000,000        2,294,160  

Chicago IL Board of Education Refunding Bonds Series B

    5.00       12-1-2027        1,625,000        1,889,794  

Chicago IL Transit Authority Capital Grant Receipts Refunding Bond Series 2011 (AGM Insured)

    5.25       6-1-2024        4,450,000        4,695,596  

Illinois Refunding Bonds Series 2012 (AGM Insured)

    5.00       8-1-2020        5,050,000        5,155,091  

Illinois Refunding Bonds Series 2016

    5.00       2-1-2026        7,000,000        7,981,260  

Illinois Series 2012

    5.00       8-1-2021        5,620,000        5,894,818  

Illinois Series 2013 (AGM Insured)

    5.00       7-1-2023        4,875,000        5,440,403  

Illinois Series 2013

    5.50       7-1-2038        4,000,000        4,377,040  

Illinois Series 2017D

    5.00       11-1-2022        7,885,000        8,511,227  
            48,128,339  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  15


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue: 6.86%                          

Chicago IL Motor Fuel Tax Refunding Bonds Series 2013

    5.00 %       1-1-2021      $ 1,450,000      $ 1,484,699  

Chicago IL Motor Fuel Tax Refunding Bonds Series 2013

    5.00       1-1-2022        1,810,000        1,890,382  

Chicago IL Motor Fuel Tax Refunding Bonds Series 2013

    5.00       1-1-2023        2,400,000        2,552,208  

Chicago IL Motor Fuel Tax Refunding Bonds Series 2013

    5.00       1-1-2024        2,475,000        2,680,598  

Chicago IL Motor Fuel Tax Refunding Bonds Series 2013

    5.00       1-1-2025        1,000,000        1,076,940  

Chicago IL Series A

    5.00       1-1-2029        5,000,000        5,000,000  

Chicago IL Tax Increment Bond Pilson Redevelopment Project Series A

    5.00       6-1-2022        1,635,000        1,761,206  

Chicago IL Transit Authority Sales Tax Receipts Series 2011

    5.25       12-1-2036        17,415,000        18,436,738  

Chicago lL Series A

    5.00       1-1-2022        3,000,000        3,000,000  

Illinois Regional Transportation Authority Series A (AGM Insured)

    5.25       6-1-2024        9,995,000        11,621,486  

Illinois Sales Tax First Series (National Insured)

    6.00       6-15-2024        515,000        601,736  

Illinois Sales Tax First Series (National Insured)

    6.00       6-15-2025        8,165,000        9,811,636  

Illinois Sales Tax Series of June 2013

    5.00       6-15-2026        9,100,000        9,866,766  

Illinois Sports Facilities Authority Refunding Bonds Insured State Tax Supported

    5.00       6-15-2028        1,000,000        1,194,200  

Illinois Sports Facilities Authority Refunding Bonds Insured State Tax Supported (BAM Insured)

    5.00       6-15-2028        1,500,000        1,812,930  

Illinois Sports Facilities Authority Refunding Bonds Insured State Tax Supported (BAM Insured)

    5.00       6-15-2028        1,515,000        1,831,059  

Illinois Sports Facilities Authority Refunding Bonds Insured State Tax Supported (BAM Insured)

    5.00       6-15-2030        3,250,000        3,955,575  

Illinois Sports Facilities Authority Refunding Bonds Insured State Tax Supported (BAM Insured)

    5.00       6-15-2030        2,000,000        2,434,200  

Illinois Sports Facilities Authority Refunding Bonds Insured State Tax Supported CAB (Ambac Insured) ¤

    0.00       6-15-2022        3,795,000        3,610,753  

Illinois Sports Facilities Authority Refunding Bonds Insured State Tax Supported CAB (Ambac Insured) ¤

    0.00       6-15-2026        1,740,000        1,479,940  

Illinois Sports Facilities Authority Refunding Bonds Insured State Tax Supported Series 2014

    5.00       6-15-2022        3,395,000        3,629,595  

Illinois Sports Facilities Authority Refunding Bonds Insured State Tax Supported Series 2014

    5.00       6-15-2023        3,220,000        3,525,288  

Illinois Sports Facilities Authority Refunding Bonds Insured State Tax Supported Series 2014

    5.00       6-15-2024        4,130,000        4,621,181  

Illinois Tender Option Bond Trust Receipts/Floater Certificates Series 2017-XG0108 (Barclays Bank plc LOC, Barclays Bank plc LIQ) 144Aø

    1.76       4-1-2046        7,420,000        7,420,000  

Metropolitan Pier & Exposition Authority CAB McCormick Place Expansion Project Series A (National Insured) ¤

    0.00       12-15-2029        1,750,000        1,324,523  

Metropolitan Pier & Exposition Authority CAB McCormick Place Project Series A (National Insured) ¤

    0.00       12-15-2022        1,390,000        1,317,595  

Metropolitan Pier & Exposition Authority McCormick Place Expansion Project Series B

    5.00       12-15-2028        19,090,000        20,410,837  

Metropolitan Pier & Exposition Authority McCormick Place Project Callable Bond Series B

    5.00       12-15-2022        11,520,000        11,527,373  

Metropolitan Pier & Exposition Authority Prerefunded Bond (National Insured) ¤

    0.00       12-15-2023        20,000        18,905  

Metropolitan Pier & Exposition Authority Prerefunded Bond (National Insured)

    5.70       6-15-2025        220,000        246,250  

Metropolitan Pier & Exposition Authority Unrefunded Bond (National Insured) ¤

    0.00       12-15-2023        845,000        783,002  

Metropolitan Pier & Exposition Authority Unrefunded Bond (National Insured)

    5.70       6-15-2025        780,000        856,261  

Sales Tax Securitization Corporation Series 2017A

    5.00       1-1-2026        4,815,000        5,616,505  

Sales Tax Securitization Corporation Series 2017A

    5.00       1-1-2028        5,265,000        6,333,795  

Sales Tax Securitization Corporation Series A

    5.00       1-1-2027        1,000,000        1,185,770  

St. Charles, Kane & DuPage Counties IL Series 2016

    4.00       1-1-2020        760,000        760,000  

St. Charles, Kane & DuPage Counties IL Series 2016

    4.00       1-1-2021        790,000        798,690  

St. Charles, Kane & DuPage Counties IL Series 2016

    4.00       1-1-2022        820,000        832,103  

St. Charles, Kane & DuPage Counties IL Series 2016

    4.00       1-1-2023        855,000        870,706  

 

The accompanying notes are an integral part of these financial statements.

 

 

16  |  Wells Fargo Strategic Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue (continued)                          

St. Charles, Kane & DuPage Counties IL Series 2016

    4.00 %       1-1-2024      $ 885,000      $ 903,160  

St. Charles, Kane & DuPage Counties IL Series 2016

    4.00       1-1-2025        925,000        942,621  

Tender Option Bond Trust Receipts/Certificates Series 2018-YX1099 (Barclays Bank plc LIQ) 144Aø

    1.76       1-1-2035        21,365,000        21,365,000  
            181,392,212  
         

 

 

 
Tobacco Revenue: 0.76%                          

Railsplitter Tobacco Settlement Authority

    5.00       6-1-2023        18,000,000        20,135,880  
         

 

 

 
Transportation Revenue: 0.58%                          

Illinois State Toll Highway Authority Senior Revenue Refunding Bonds Series B

    5.00       1-1-2029        11,990,000        15,196,726  
         

 

 

 
Water & Sewer Revenue: 0.38%                          

Chicago IL Wastewater Transmission Series B (AGM Insured)

    5.00       1-1-2031        3,140,000        3,719,047  

Chicago IL Waterworks Second Lien

    5.00       11-1-2028        2,560,000        3,019,418  

Chicago IL Waterworks Second Lien Series 2017-2 (AGM Insured)

    5.00       11-1-2030        2,620,000        3,150,183  
            9,888,648  
         

 

 

 
            486,012,224  
         

 

 

 

Indiana: 0.22%

         
GO Revenue: 0.05%                          

Hammond IN Local Public Improvement Advance Program Series A %%

    2.38       12-31-2020        1,375,000        1,380,734  
         

 

 

 
Health Revenue: 0.01%                          

Indiana HFFA Ancilla System Incorporated (National Insured)

    5.25       7-1-2022        240,000        240,696  
         

 

 

 
Miscellaneous Revenue: 0.16%                          

Indiana Bond Bank Revenue CAB Hamilton Company Projects Series B ¤

    0.00       7-15-2026        735,000        645,749  

Indiana Bond Bank Revenue CAB Hamilton Company Projects Series B ¤

    0.00       7-15-2027        630,000        538,278  

Michigan IN City School Building Corporation Series 2016A

    5.00       1-15-2025        1,000,000        1,154,700  

Westfield-Washington IN Multi-School Building Corporation First Mortgage Series B 144A

    1.50       1-15-2022        1,805,000        1,800,325  
            4,139,052  
         

 

 

 
            5,760,482  
         

 

 

 

Iowa: 0.64%

         
Education Revenue: 0.11%                          

Iowa Student Loan Liquidity Corporation Senior Revenue Bonds AMT Series B

    5.00       12-1-2025        1,295,000        1,532,076  

Iowa Student Loan Liquidity Corporation Senior Revenue Bonds AMT Series B

    5.00       12-1-2026        1,215,000        1,462,398  
            2,994,474  
         

 

 

 
GO Revenue: 0.36%                          

Coralville IA Taxable-Annual Appropriation Series 2018E

    7.00       6-1-2025        8,485,000        9,082,174  

Coralville IA Taxable-Annual Appropriation Series B

    4.40       5-1-2023        410,000        412,120  
            9,494,294  
         

 

 

 
Health Revenue: 0.06%                          

Iowa Finance Authority Revenue Bonds Lifespace Commnunities Incorporated Series A2

    2.88       5-15-2049        1,500,000        1,508,895  
         

 

 

 
Industrial Development Revenue: 0.04%                          

Iowa Finance Authority Midwestern Disaster Area Project (Korea Development Bank LOC) ø

    1.92       4-1-2022        1,000,000        1,000,000  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  17


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Water & Sewer Revenue: 0.07%                          

Xenia Dallas County IA Rural Water District Capital Loan Notes

    5.00 %       12-1-2031      $ 1,615,000      $ 1,880,668  
         

 

 

 
            16,878,331  
         

 

 

 

Kansas: 0.72%

         
Health Revenue: 0.10%                          

Wichita KS Health Care Facilities Presbyterian Manors Obligated Group

    5.00       5-15-2026        1,105,000        1,238,981  

Wichita KS Health Care Facilities Presbyterian Manors Obligated Group

    5.00       5-15-2028        1,220,000        1,386,103  
            2,625,084  
         

 

 

 
Housing Revenue: 0.19%                          

Kansas Development Finance Authority MFHR Woodland Village Apartments Project Series J

    1.68       7-1-2022        5,000,000        5,014,650  
         

 

 

 
Tax Revenue: 0.43%                          

Wyandotte County & Kansas City KS Special Obligation Refunding & Improvement Bonds Plaza Redevelopment Project

    4.00       12-1-2028        725,000        748,816  

Wyandotte County & Kansas City KS Special Obligation Vacation Village Project Area 4 Major Multi-Sport Athletic Complex Project CAB Series 2015 144A¤

    0.00       9-1-2034        25,065,000        10,619,038  
            11,367,854  
         

 

 

 
            19,007,588  
         

 

 

 

Kentucky: 0.86%

         
Education Revenue: 0.14%                          

Columbia KY Educational Development Lindsey Wilson College Incorporated Project

    3.00       12-1-2024        3,795,000        3,830,939  
         

 

 

 
Health Revenue: 0.11%                          

Kentucky EDFA Healthcare Facilities Rosedale Green Project Series 2015

    3.35       11-15-2020        335,000        335,332  

Kentucky EDFA Healthcare Facilities Rosedale Green Project Series 2015

    5.00       11-15-2025        1,500,000        1,595,790  

Kentucky EDFA Norton Healthcare Incorporated Series B (National Insured) ¤

    0.00       10-1-2022        1,000,000        945,260  
            2,876,382  
         

 

 

 
Utilities Revenue: 0.61%                          

Kentucky Public Energy Authority Gas Supply Series A1

    4.00       12-1-2049        3,870,000        4,289,547  

Kentucky Public Energy Authority Gas Supply Series B

    4.00       1-1-2049        10,725,000        11,842,974  
            16,132,521  
         

 

 

 
            22,839,842  
         

 

 

 

Louisiana: 1.38%

         
Airport Revenue: 0.19%                          

New Orleans LA Aviation Board General North Terminal Project Series A

    5.00       1-1-2032        1,000,000        1,153,460  

New Orleans LA Aviation Board Gulf Opportunity Zone Controlled Foreign Corporation Revenue Refunding Bonds Consolidated Rental Car Project (AGM Insured)

    5.00       1-1-2031        1,250,000        1,520,988  

New Orleans LA Aviation Board Gulf Opportunity Zone Controlled Foreign Corporation Revenue Refunding Bonds Consolidated Rental Car Project (AGM Insured)

    5.00       1-1-2032        2,000,000        2,422,260  
            5,096,708  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

18  |  Wells Fargo Strategic Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Education Revenue: 0.27%                          

Louisiana Public Facilities Authority Loyola University Project Series 2011

    5.25 %       10-1-2025      $ 2,815,000      $ 2,980,043  

Louisiana Public Facilities Authority Loyola University Project Series 2017 ¤

    0.00       10-1-2020        1,000,000        985,150  

Louisiana Public Facilities Authority Loyola University Project Series 2017 ¤

    0.00       10-1-2021        1,950,000        1,880,873  

Louisiana Public Facilities Authority Loyola University Project Series 2017 ¤

    0.00       10-1-2022        1,500,000        1,414,440  
            7,260,506  
         

 

 

 
Housing Revenue: 0.51%                          

Louisiana Housing Corporation Harmony Garden Estates Project Series 2017

    1.65       12-1-2020        13,500,000        13,501,350  
         

 

 

 
Industrial Development Revenue: 0.27%                          

St. John the Baptist Parish Louisiana Series A

    2.20       6-1-2037        7,000,000        7,060,340  
         

 

 

 
Miscellaneous Revenue: 0.06%                          

Louisiana Local Government Environmental Facilities and CDA Jefferson Parish Gomesa Project 144A

    4.00       11-1-2044        1,500,000        1,518,195  
         

 

 

 
Water & Sewer Revenue: 0.08%                          

Greater Ouachita Water Company Incorporate Louisiana Waterworks and Sewer System Refunding Bonds (BAM Insured)

    3.00       9-1-2023        250,000        263,395  

Greater Ouachita Water Company Incorporate Louisiana Waterworks and Sewer System Refunding Bonds (BAM Insured)

    5.00       9-1-2021        550,000        582,577  

Greater Ouachita Water Company Incorporate Louisiana Waterworks and Sewer System Refunding Bonds (BAM Insured)

    5.00       9-1-2024        460,000        531,180  

Greater Ouachita Water Company Incorporate Louisiana Waterworks and Sewer System Refunding Bonds (BAM Insured)

    5.00       9-1-2025        510,000        602,157  
            1,979,309  
         

 

 

 
            36,416,408  
         

 

 

 

Maryland: 3.91%

         
Education Revenue: 0.10%                          

Prince George’s County MD Chesapeake Lighthouse Charter School Project Series 2015 144A

    5.25       8-1-2022        1,285,000        1,314,439  

Prince George’s County MD Chesapeake Lighthouse Charter School Project Series 2016

    5.00       8-1-2026        1,335,000        1,384,128  
            2,698,567  
         

 

 

 
GO Revenue: 0.70%                          

Prince George’s County MD Consolidated Public Improvement Bonds Series C

    4.00       8-1-2027        3,890,000        4,254,182  

Prince George’s County MD Consolidated Public Improvement Bonds Series C

    4.00       8-1-2028        12,960,000        14,135,990  
            18,390,172  
         

 

 

 
Health Revenue: 0.15%                          

Rockville MD Mayor & Council Economic Development Ingleside King Farm Project #45 Series C-3

    2.50       11-1-2024        4,000,000        4,001,080  
         

 

 

 
Housing Revenue: 2.31%                          

Maryland CDA Department of Housing & Community Multifamily Development Headen House Series B

    2.45       3-1-2021        19,500,000        19,620,120  

Maryland CDA Department of Housing & Community Multifamily Development Huntington Apartments Series C 144A

    2.34       4-1-2021        5,000,000        5,026,850  

Maryland CDA Department of Housing & Community Multifamily Development Zions Towers Series A (FHA Insured)

    2.44       3-1-2020        9,000,000        9,007,290  

Maryland Community Development Department Housing Rosemont Tower LLC Series F (FHA/GNMA Insured)

    2.01       11-1-2021        18,500,000        18,515,910  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  19


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Housing Revenue (continued)                          

Maryland State Administration Department of Housing & Community Development Park View at Taylor Series D

    2.45 %       4-1-2021      $ 8,820,000      $ 8,874,860  
            61,045,030  
         

 

 

 
Miscellaneous Revenue: 0.22%                          

Maryland State and Local Facilities Loan Series A

    4.00       8-1-2030        5,000,000        5,816,000  
         

 

 

 
Tax Revenue: 0.39%                          

Maryland State Department of Transportation

    4.00       12-15-2027        9,260,000        10,224,336  
         

 

 

 
Water & Sewer Revenue: 0.04%                          

Baltimore MD Series A (National Insured)

    5.65       7-1-2020        1,100,000        1,124,277  
         

 

 

 
            103,299,462  
         

 

 

 

Massachusetts: 4.10%

         
Education Revenue: 1.28%                          

Lowell MA Collegiate Charter School Revenue

    4.00       6-15-2024        320,000        336,534  

Lowell MA Collegiate Charter School Revenue

    5.00       6-15-2029        490,000        541,029  

Massachusetts Development Finance Agency Harvard University Series A

    5.00       7-15-2033        22,560,000        27,476,050  

Massachusetts Development Finance Agency Sabis International Charter School Series 2015

    5.00       4-15-2025        1,000,000        1,086,310  

Massachusetts Educational Financing Authority AMT Issue I Series B

    5.70       1-1-2031        1,625,000        1,626,788  

Massachusetts Educational Financing Authority Series B

    5.00       7-1-2023        2,460,000        2,747,992  
            33,814,703  
         

 

 

 
Health Revenue: 0.60%                          

Massachusetts Development Finance Agency Linden Ponds Incorporated Facility 144A

    4.00       11-15-2023        1,095,000        1,146,345  

Massachusetts Development Finance Agency Partners Healthcare System Series S-3 (SIFMA Municipal Swap +0.50%) ±

    2.11       7-1-2038        14,870,000        14,895,576  
            16,041,921  
         

 

 

 
Miscellaneous Revenue: 1.86%                          

Massachusetts Series A (3 Month LIBOR +0.55%) ±

    1.83       11-1-2025        15,800,000        15,901,594  

Massachusetts Water Pollution Abatement Trust Series 17

    5.00       2-1-2031        10,000,000        11,114,500  

Massachusetts Water Pollution Abatement Trust Series 17

    5.00       2-1-2032        10,000,000        11,095,300  

Massachusetts Water Pollution Abatement Trust Series 17

    5.00       2-1-2033        10,000,000        11,082,500  
            49,193,894  
         

 

 

 
Tax Revenue: 0.36%                          

Massachusetts Bay Transportation Authority Assessment Bonds Series A

    4.00       7-1-2037        9,000,000        9,446,580  
         

 

 

 
            108,497,098  
         

 

 

 

Michigan: 2.59%

         
Airport Revenue: 0.04%                          

Wayne County MI Airport Authority AMT Detroit Metropolitan Airport Series C

    5.00       12-1-2022        1,000,000        1,034,130  
         

 

 

 
Education Revenue: 0.02%                          

Michigan Finance Authority Limited Obligation Revenue Refunding Bonds Public School Academy Cesar Chavez Academy Project

    3.25       2-1-2024        400,000        400,752  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

20  |  Wells Fargo Strategic Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue: 0.39%                          

Constantine MI Public Schools (Qualified School Board Loan Fund Insured)

    5.00 %       5-1-2020      $ 350,000      $ 354,354  

Constantine MI Public Schools (Qualified School Board Loan Fund Insured)

    5.00       5-1-2021        1,200,000        1,260,192  

Forest Hills MI Public Schools

    5.00       5-1-2020        1,600,000        1,620,336  

Forest Hills MI Public Schools

    5.00       5-1-2021        1,600,000        1,682,000  

Fraser MI Public Schools District (Qualified School Board Loan Fund Insured)

    5.00       5-1-2021        1,000,000        1,049,480  

Fraser MI Public Schools District (Qualified School Board Loan Fund Insured)

    5.00       5-1-2022        610,000        663,021  

Hudsonville MI Public Schools (Qualified School Board Loan Fund Insured)

    5.00       5-1-2021        1,465,000        1,538,484  

Ingham County MI Williamston Community Schools Series A (Qualified School Board Loan Fund Insured)

    4.00       5-1-2024        1,025,000        1,119,013  

Ingham County MI Williamston Community Schools Series A (Qualified School Board Loan Fund Insured)

    4.00       5-1-2025        1,000,000        1,106,770  
            10,393,650  
         

 

 

 
Health Revenue: 0.20%                          

Michigan Finance Authority Bronson Healthcare Group Series B & C

    3.75       11-15-2049        4,800,000        5,369,856  
         

 

 

 
Housing Revenue: 0.35%      

Michigan Housing Development Authority Series E (3 Month LIBOR +1.00%) ±

    2.47       4-1-2042        9,180,000        9,243,158  
         

 

 

 
Miscellaneous Revenue: 0.68%                          

Michigan Finance Authority Detroit Recovery Project Series 2014F

    3.40       10-1-2020        500,000        505,060  

Michigan Finance Authority Detroit Recovery Project Series 2014F

    3.60       10-1-2021        500,000        511,890  

Michigan Finance Authority Detroit Recovery Project Series 2014F

    3.80       10-1-2022        500,000        521,295  

Michigan Finance Authority Detroit Recovery Project Series 2014F

    3.88       10-1-2023        2,500,000        2,647,575  

Michigan Finance Authority Local Government Loan Program City of Detroit Financial Recovery Refunding Bond Series F

    4.50       10-1-2029        5,015,000        5,431,847  

Michigan Finance Authority Senior Lien Distributable State Aid

    5.00       11-1-2028        865,000        1,098,169  

Michigan Finance Authority Senior Lien Distributable State Aid

    5.00       11-1-2029        1,500,000        1,891,470  

Michigan Finance Authority Series H-1

    5.00       10-1-2021        1,565,000        1,607,255  

Michigan Municipal Bond Authority Local Government Loan Program Series C (Ambac Insured)

    4.13       5-1-2020        500,000        500,525  

Michigan Municipal Bond Authority Local Government Loan Program Series C (Ambac Insured)

    5.00       5-1-2023        1,900,000        1,902,299  

Michigan Public Educational Facilities Authority Chandler Park Academy

    6.35       11-1-2028        1,385,000        1,387,825  
            18,005,210  
         

 

 

 
Tax Revenue: 0.13%                          

Michigan Finance Authority Series 2014B

    5.00       7-1-2032        3,000,000        3,342,840  
         

 

 

 
Water & Sewer Revenue: 0.78%                          

Detroit MI Water & Sewage Department Series A

    5.00       7-1-2022        1,000,000        1,087,650  

Michigan Financial Authority Great Lakes Water Authority Series C-3 (AGM Insured)

    5.00       7-1-2031        3,000,000        3,446,820  

Michigan Financial Authority Local Government Loan Program Series C7 (National Insured)

    5.00       7-1-2022        2,000,000        2,173,240  

Michigan Financial Authority Local Government Loan Program Series D1 (AGM Insured)

    5.00       7-1-2022        2,700,000        2,953,368  

Michigan Financial Authority Local Government Loan Program Series D1 (AGM Insured)

    5.00       7-1-2023        2,000,000        2,260,380  

Michigan Financial Authority Local Government Loan Program Series D6 (National Insured)

    5.00       7-1-2022        2,080,000        2,260,170  

Michigan Financial Authority Local Government Loan Program Series D6 (National Insured)

    5.00       7-1-2023        3,670,000        4,111,611  

Michigan Financial Authority Local Government Loan Program Series D6 (National Insured)

    5.00       7-1-2024        2,130,000        2,448,669  
            20,741,908  
         

 

 

 
            68,531,504  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  21


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Minnesota: 0.53%

         
Education Revenue: 0.07%                          

Cologne MN Charter School Lease Academy Project Series 2014A

    4.00 %       7-1-2023      $ 260,000      $ 271,729  

St. Paul MN Housing & RDA Charter School Hmong College Preparatory Academy Project Series A

    4.75       9-1-2022        490,000        502,054  

St. Paul MN Housing & RDA Charter School Hmong College Preparatory Academy Project Series A

    5.00       9-1-2026        1,000,000        1,098,360  
            1,872,143  
         

 

 

 
Health Revenue: 0.39%                          

Shakopee MN Senior Housing Revenue Benedictine Living Community LLC Project 144A

    5.85       11-1-2058        5,500,000        5,853,210  

St. Paul MN Housing & RDA HealthEast Care System Project Series 2015A

    5.25       11-15-2028        1,505,000        1,558,036  

St. Paul MN Housing & RDA HealthEast Care System Project Series 2015A

    5.25       11-15-2035        2,850,000        2,950,434  
            10,361,680  
         

 

 

 
Housing Revenue: 0.07%                          

Oak Park Heights MN Boutwells Landing Project Series 2005 (FHLMC LIQ) ø

    1.62       11-1-2035        1,800,000        1,800,000  
         

 

 

 
            14,033,823  
         

 

 

 

Mississippi: 0.19%

         
Health Revenue: 0.19%                          

Mississippi HFFA Baptist Health System Series A (SIFMA Municipal Swap +1.30%) ±

    2.91       8-15-2036        5,000,000        5,003,550  
         

 

 

 

Missouri: 1.05%

         
Education Revenue: 0.19%                          

Missouri State HEFAR Webster University Project

    5.00       4-1-2022        500,000        527,325  

Missouri State HEFAR Webster University Project

    5.00       4-1-2023        450,000        484,250  

Missouri State HEFAR Webster University Project

    5.00       4-1-2024        2,820,000        3,091,397  

Missouri State HEFAR Webster University Project

    5.00       4-1-2025        350,000        390,194  

Missouri State HEFAR Webster University Project

    5.00       4-1-2026        500,000        565,350  
            5,058,516  
         

 

 

 
Health Revenue: 0.04%                          

Lees Summit MO IDA Senior Living Facilities Revenue Series A

    5.00       8-15-2020        1,075,000        1,091,383  
         

 

 

 
Miscellaneous Revenue: 0.56%                          

Branson MO IDA Branson Shoppes Series A

    3.00       11-1-2021        1,055,000        1,064,727  

Branson MO IDA Branson Shoppes Series A

    4.00       11-1-2022        350,000        362,586  

Branson MO IDA Branson Shoppes Series A

    4.00       11-1-2023        750,000        782,153  

Kansas City MO IDA International Airport Terminal Modernization Project Series B

    5.00       3-1-2028        3,000,000        3,696,870  

Kansas City MO IDA International Airport Terminal Modernization Project Series B

    5.00       3-1-2030        2,000,000        2,485,760  

Platte County MO Riverside-Quindaro Bend Levee District Project L-385

    3.00       3-1-2020        900,000        901,944  

Platte County MO Riverside-Quindaro Bend Levee District Project L-385

    4.00       3-1-2021        930,000        952,627  

Platte County MO Riverside-Quindaro Bend Levee District Project L-385

    4.00       3-1-2022        970,000        1,011,409  

Platte County MO Riverside-Quindaro Bend Levee District Project L-385

    4.00       3-1-2023        1,010,000        1,068,166  

Platte County MO Riverside-Quindaro Bend Levee District Project L-385

    5.00       3-1-2024        1,000,000        1,108,050  

Platte County MO Riverside-Quindaro Bend Levee District Project L-385

    5.00       3-1-2025        1,105,000        1,242,274  
            14,676,566  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

22  |  Wells Fargo Strategic Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue: 0.11%                          

Arnold MO Real Property Arnold Triangle Redevelopment Project Series A

    3.75 %       5-1-2023      $ 920,000      $ 936,992  

Lees Summit MO Summit Fair Project Series 2017 144A

    3.50       11-1-2023        470,000        474,775  

Richmond Heights MO Francis Place Redevelopment Project

    5.63       11-1-2025        1,360,000        1,360,748  
            2,772,515  
         

 

 

 
Water & Sewer Revenue: 0.15%                          

Kansas City MO Sanitation Sewer System Revenue Series B

    5.00       1-1-2020        400,000        400,000  

Kansas City MO Sanitation Sewer System Revenue Series B

    5.00       1-1-2021        575,000        597,235  

Kansas City MO Sanitation Sewer System Revenue Series B

    5.00       1-1-2023        805,000        897,438  

Kansas City MO Sanitation Sewer System Revenue Series B

    5.00       1-1-2025        810,000        961,632  

Kansas City MO Sanitation Sewer System Revenue Series B

    5.00       1-1-2027        700,000        869,792  

Kansas City MO Sanitation Sewer System Revenue Series B

    5.00       1-1-2028        275,000        348,673  
            4,074,770  
         

 

 

 
            27,673,750  
         

 

 

 

Nebraska: 0.91%

         
Utilities Revenue: 0.91%                          

Central Plains Energy Nebraska Gas Project #3 Series A

    5.00       9-1-2025        3,290,000        3,830,317  

Central Plains Energy Nebraska Gas Project #3 Series A

    5.00       9-1-2026        3,750,000        4,427,663  

Central Plains Energy Nebraska Gas Project #3 Series A

    5.00       9-1-2027        1,000,000        1,202,010  

Central Plains Energy Nebraska Project Gas Supply

    4.00       12-1-2049        13,000,000        14,546,740  
            24,006,730  
         

 

 

 

Nevada: 0.06%

         
Tax Revenue: 0.06%                          

Sparks NV Tourism Improvement District #1 Senior Revenue Refunding Sales Tax Anticipation Notes 144A

    2.50       6-15-2024        1,460,000        1,477,622  
         

 

 

 

New Hampshire: 0.24%

         
Health Revenue: 0.24%                          

New Hampshire Covenant Health Systems Series B

    5.00       7-1-2028        6,400,000        6,449,344  
         

 

 

 

New Jersey: 4.69%

         
Airport Revenue: 0.50%                          

New Jersey EDA Refunding Bonds Port Newark Container

    5.00       10-1-2025        2,750,000        3,208,755  

New Jersey EDA Refunding Bonds Port Newark Container

    5.00       10-1-2026        2,130,000        2,524,412  

New Jersey EDA Refunding Bonds Port Newark Container

    5.00       10-1-2027        1,675,000        2,014,673  

South Jersey NJ Port Corporation Marine Terminal Series R

    4.00       1-1-2022        1,600,000        1,658,064  

South Jersey NJ Port Corporation Marine Terminal Series S-2

    5.00       1-1-2023        1,665,000        1,809,888  

South Jersey NJ Port Corporation Marine Terminal Series S-2

    5.00       1-1-2024        1,750,000        1,946,350  
            13,162,142  
         

 

 

 
Education Revenue: 0.29%      

New Jersey Higher Education Student Assistance Authority Series 2014-1A-1

    5.00       12-1-2021        2,250,000        2,402,573  

New Jersey Higher Education Student Assistance Authority Series 2017-1B

    5.00       12-1-2020        2,250,000        2,324,295  

New Jersey Higher Education Student Assistance Authority Series 2017-1B

    5.00       12-1-2021        2,815,000        3,005,885  
            7,732,753  
         

 

 

 
GO Revenue: 0.22%                          

Newark NJ Taxable BAN ECIA Property Acquisition

    3.95       2-27-2020        5,500,000        5,516,610  

Paterson NJ General Improvement (AGM Insured)

    5.00       6-15-2020        400,000        400,948  
            5,917,558  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  23


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Housing Revenue: 0.38%      

New Jersey Housing & Mortgage Finance Agency Multifamily Series C

    2.41 %       10-1-2021      $ 10,000,000      $ 10,076,600  
         

 

 

 
Industrial Development Revenue: 0.11%                          

New Jersey EDA Elite Pharmaceuticals Project Series A

    6.50       9-1-2030        355,000        328,073  

New Jersey EDA The Goethals Bridge Replacement Project

    5.00       7-1-2020        500,000        508,590  

New Jersey EDA The Goethals Bridge Replacement Project

    5.00       1-1-2021        585,000        605,071  

New Jersey EDA The Goethals Bridge Replacement Project

    5.00       7-1-2021        900,000        946,170  

New Jersey EDA The Goethals Bridge Replacement Project

    5.00       1-1-2023        400,000        440,268  
            2,828,172  
         

 

 

 
Miscellaneous Revenue: 1.21%      

New Jersey EDA Motor Vehicle Surcharge Revenue Refunding Bond Series A

    3.13       7-1-2029        8,450,000        8,574,891  

New Jersey EDA Motor Vehicle Surcharge Revenue Refunding Bond Series A

    3.38       7-1-2030        9,705,000        10,007,505  

New Jersey EDA School Facilities Construction Project Prerefunded Bond Series EE

    5.50       9-1-2021        2,025,000        2,125,076  

New Jersey EDA School Facilities Construction Project Series EE

    5.25       9-1-2025        1,800,000        1,878,228  

New Jersey EDA School Facilities Construction Project Series K (Ambac Insured)

    5.25       12-15-2020        3,000,000        3,108,900  

New Jersey EDA School Facilities Construction Project Series NN (AGM Insured)

    5.00       3-1-2024        1,645,000        1,822,413  

New Jersey EDA School Facilities Construction Refunding Bond Project Series I (SIFMA Municipal Swap +1.25%) ±

    2.86       9-1-2025        4,500,000        4,495,725  
            32,012,738  
         

 

 

 
Tax Revenue: 0.26%                          

Gardens NJ Preservation Trust Open & Farmland Series A (AGM Insured)

    5.75       11-1-2028        5,000,000        6,258,350  

New Jersey EDA School Facilities Construction Project Unrefunded Bond Series EE

    5.50       9-1-2021        750,000        785,370  
            7,043,720  
         

 

 

 
Transportation Revenue: 1.51%                          

New Jersey TTFA CAB Series A ¤

    0.00       12-15-2026        12,000,000        10,187,040  

New Jersey TTFA Series A

    5.00       6-15-2022        4,815,000        5,080,788  

New Jersey TTFA Series A

    5.00       12-15-2025        1,000,000        1,169,270  

New Jersey TTFA Series A

    5.00       12-15-2028        1,500,000        1,808,745  

New Jersey TTFA Series A

    5.25       12-15-2020        1,900,000        1,968,970  

New Jersey TTFA Series A

    5.25       6-15-2022        2,785,000        2,950,791  

New Jersey TTFA Series AA

    5.00       6-15-2023        1,350,000        1,458,999  

New Jersey TTFA Series AA

    5.00       6-15-2023        4,665,000        5,191,212  

New Jersey TTFA Series B

    5.00       6-15-2020        2,150,000        2,184,680  

New Jersey TTFA Series D

    5.00       12-15-2023        6,960,000        7,851,298  
            39,851,793  
         

 

 

 
Water & Sewer Revenue: 0.21%                          

New Jersey EDA

    2.20       10-1-2039        5,500,000        5,475,250  
         

 

 

 
            124,100,726  
         

 

 

 

New York: 5.06%

 
Airport Revenue: 1.42%      

Port Authority of New York & New Jersey Consolidated Bonds Series 172

    5.00       10-1-2027        5,000,000        5,386,600  

Port Authority of New York & New Jersey Consolidated Bonds Series 185

    5.00       9-1-2028        5,000,000        5,756,400  

Port Authority of New York & New Jersey Consolidated Bonds Series 207

    5.00       9-15-2027        21,270,000        26,331,197  
            37,474,197  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

24  |  Wells Fargo Strategic Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Education Revenue: 0.36%      

Albany NY IDA Foundation State University Project Series A ø

    1.85 %       7-1-2032      $ 2,520,000      $ 2,520,000  

Build New York City Resource Corporation Bronx Charter School for International Cultures & Arts Series A

    3.88       4-15-2023        800,000        818,848  

Hempstead Town NY Local Development Corporation Academy Charter School Project Series A

    5.45       2-1-2027        2,880,000        3,144,499  

Hempstead Town NY Local Development Corporation Academy Charter School Project Series A

    6.47       2-1-2033        1,435,000        1,662,390  

New York NY IDA Civic Facility Stars Churchill School Center Project (AGC Insured) ø

    2.25       10-1-2029        1,425,000        1,425,000  
            9,570,737  
         

 

 

 
Health Revenue: 0.54%      

Monroe County NY Industrial Development Corporation Unity Hospital Rochester Project (FHA Insured)

    4.20       8-15-2025        7,195,000        7,211,333  

New York Dormitory Authority Non-State Supported Debt Northwell Health Obligated Group

    5.00       5-1-2048        6,000,000        7,068,360  
            14,279,693  
         

 

 

 
Housing Revenue: 0.53%                          

East Rochester NY Housing Authority Home Good Sheperd Project Series A (Royal Bank of Scotland LOC) ø

    1.74       12-1-2036        2,420,000        2,420,000  

New York HFA Affordable Housing Project Series M (GNMA/FNMA/FHLMC Insured)

    2.00       5-1-2021        9,375,000        9,447,375  

New York HFA Affordable Housing Project Series M (GNMA/FNMA/FHLMC Insured)

    2.00       5-1-2021        2,250,000        2,267,370  
            14,134,745  
         

 

 

 
Industrial Development Revenue: 0.56%      

New York Liberty Development Corporation Refunding Bond

    2.80       9-15-2069        2,000,000        2,015,020  

New York Transportation Development Corporation Special Facilities Bonds Series 2018

    5.00       1-1-2025        11,030,000        12,740,532  
            14,755,552  
         

 

 

 
Miscellaneous Revenue: 0.05%      

New York Tender Option Bond Trust Receipts/Floater Certificates Series 2019-BAML3002 (Bank of America NA LIQ) 144Aø

    1.69       1-15-2056        1,286,013        1,286,013  
         

 

 

 
Tobacco Revenue: 0.02%                          

Suffolk County NY Tobacco Asset Securitization Corporation

    5.00       6-1-2020        625,000        632,444  
         

 

 

 
Transportation Revenue: 1.20%                          

New York Metropolitan Transportation Authority Subordinate Bond Series D (1 Month LIBOR +0.65%) ±

    1.80       11-1-2035        17,235,000        17,251,546  

New York Triborough Bridge & Tunnel Authority Series B (U.S. SOFR +0.50%) ±

    1.52       11-15-2038        14,500,000        14,500,725  
            31,752,271  
         

 

 

 
Water & Sewer Revenue: 0.38%      

New York NY Municipal Water Finance Series B1-A (Sumitomo Mitsui Banking SPA) ø

    1.58       6-15-2024        10,000,000        10,000,000  
         

 

 

 
            133,885,652  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  25


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

North Carolina: 0.72%

         
Housing Revenue: 0.69%                          

Wake County NC Housing Authority Sunnybrook Pointe Apartments

    1.45 %       12-1-2020      $ 18,100,000      $ 18,099,095  
         

 

 

 
Industrial Development Revenue: 0.03%                          

Columbus County NC Industrial Facilities and PCFA Refunding Bonds Recovery Zone Facility International Paper Company Project

    2.00       11-1-2033        850,000        857,446  
         

 

 

 
            18,956,541  
         

 

 

 

North Dakota: 0.47%

         
GO Revenue: 0.47%                          

McKenzie County ND Public School District #1 School Building Series A

    5.00       8-1-2025        960,000        1,136,381  

McKenzie County ND Public School District #1 School Building Series A

    5.00       8-1-2026        1,115,000        1,348,113  

McKenzie County ND Public School District #1 School Building Series A

    5.00       8-1-2027        1,170,000        1,441,311  

McKenzie County ND Public School District #1 School Building Series A

    5.00       8-1-2028        1,225,000        1,534,043  

McKenzie County ND Public School District #1 School Building Series A

    5.00       8-1-2029        1,290,000        1,607,172  

McKenzie County ND Public School District #1 School Building Series A

    5.00       8-1-2030        1,355,000        1,678,073  

McKenzie County ND Public School District #1 School Building Series A

    5.00       8-1-2031        1,420,000        1,749,298  

McKenzie County ND Public School District #1 School Building Series A

    5.00       8-1-2032        1,490,000        1,828,558  
            12,322,949  
         

 

 

 

Ohio: 1.88%

         
Education Revenue: 0.08%                          

Portage County OH Port Authority Northeast Ohio Medical University Project

    5.00       12-1-2026        1,980,000        2,101,889  
         

 

 

 
Health Revenue: 0.64%      

Akron OH Bath and Copley Joint Township Hospital District

    5.00       1-1-2031        2,000,000        2,149,340  

Allen County OH Hospital Facilities Revenue Bonds Series B

    5.00       8-1-2047        2,500,000        2,711,650  

Hamilton County OH Healthcare Series 2017

    3.00       1-1-2022        465,000        474,412  

Montgomery County OH Hospital Refunding Bonds Facilities Premier Health Partners

    5.00       11-15-2033        4,000,000        4,917,600  

Montgomery County OH Hospital Refunding Bonds Facilities Premier Health Partners

    5.00       11-15-2034        5,460,000        6,694,124  
            16,947,126  
         

 

 

 
Housing Revenue: 0.55%      

Ohio HFA MFHR Chadwick Place & Union Square Apartments

    1.60       1-1-2022        3,130,000        3,133,631  

Ohio HFA MFHR Terrace Towers Apartments Project

    1.45       6-1-2022        11,525,000        11,533,298  
            14,666,929  
         

 

 

 
Resource Recovery Revenue: 0.19%      

Ohio Air Quality Development Authority Revenue Refunding Bonds AMT American Electric Power Company

    2.10       12-1-2027        4,930,000        4,953,319  
         

 

 

 
Utilities Revenue: 0.16%      

Ohio Air Quality Development Authority Ohio Valley Electric Corporation Project Series A

    3.25       9-1-2029        4,000,000        4,127,920  
         

 

 

 
Water & Sewer Revenue: 0.26%      

Columbus OH Sewerage System

    5.00       6-1-2031        5,825,000        6,785,892  
         

 

 

 
            49,583,075  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

26  |  Wells Fargo Strategic Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Oklahoma: 0.62%

         
Education Revenue: 0.18%                          

Oklahoma Development Finance Authority Revenue Refunding Bonds Oklahoma City University Project

    5.00 %       8-1-2025      $ 925,000      $ 1,066,599  

Oklahoma Development Finance Authority Revenue Refunding Bonds Oklahoma City University Project

    5.00       8-1-2026        975,000        1,141,033  

Oklahoma Development Finance Authority Revenue Refunding Bonds Oklahoma City University Project

    5.00       8-1-2027        685,000        811,752  

Oklahoma Development Finance Authority Revenue Refunding Bonds Oklahoma City University Project

    5.00       8-1-2028        715,000        855,197  

Oklahoma Development Finance Authority Revenue Refunding Bonds Oklahoma City University Project

    5.00       8-1-2029        755,000        907,570  
            4,782,151  
         

 

 

 
Miscellaneous Revenue: 0.26%      

Muskogee OK Industrial Trust Educational Facilities Lease Muskogee Public Schools Project

    4.00       9-1-2028        2,500,000        2,860,050  

Muskogee OK Industrial Trust Educational Facilities Lease Muskogee Public Schools Project

    5.00       9-1-2024        890,000        1,019,949  

Muskogee OK Industrial Trust Educational Facilities Lease Muskogee Public Schools Project

    5.00       9-1-2025        855,000        1,000,427  

Muskogee OK Industrial Trust Educational Facilities Lease Muskogee Public Schools Project

    5.00       9-1-2026        1,810,000        2,150,714  
            7,031,140  
         

 

 

 
Tax Revenue: 0.18%      

Tulsa OK Public Facilities Authority Capital Improvements

    4.00       10-1-2027        4,050,000        4,670,784  
         

 

 

 
            16,484,075  
         

 

 

 

Oregon: 0.42%

         
Health Revenue: 0.42%                          

Multnomah County OR Hospital Facilities Authority Revenue Refunding Bonds Adventist Health System/West

    5.00       3-1-2040        9,500,000        11,002,805  
         

 

 

 

Other: 0.13%

         
Miscellaneous Revenue: 0.13%                          

FHLMC Multiclass Mortgage Certificate of Participation Series M012 Class A1A øø

    1.60       8-15-2051        3,128,427        3,153,955  

Public Housing Capital Fund Trust II (Department of Housing and Urban Development Insured) 144A

    4.50       7-1-2022        418,785        424,975  
            3,578,930  
         

 

 

 

Pennsylvania: 6.14%

         
Education Revenue: 1.00%                          

Chester County PA IDA Avon Grove Charter School Project Series 2017A

    4.00       12-15-2027        1,910,000        2,034,341  

Chester County PA IDA Collegium Charter School Project Series A

    3.70       10-15-2022        1,150,000        1,158,372  

Lycoming County PA Authority Association of Independent Colleges & Universities of Pennsylvania Financing Program

    2.00       11-1-2035        3,000,000        3,000,000  

Montgomery County PA HEFAR Arcadia University

    5.00       4-1-2022        1,575,000        1,682,762  

Montgomery County PA HEFAR Arcadia University

    5.00       4-1-2023        1,555,000        1,703,425  

Pennsylvania HEFAR Thomas Jefferson University Series B ø

    1.78       9-1-2045        9,440,000        9,440,000  

Philadelphia PA IDA Charter School Project Series 2016B

    4.88       8-1-2026        1,960,000        2,064,056  

Philadelphia PA IDA Charter School Project Series A

    4.50       8-1-2026        3,005,000        3,175,414  

Philadelphia PA IDA for Independence Charter School

    4.00       6-15-2029        350,000        359,839  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  27


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Education Revenue (continued)                          

Philadelphia PA IDA Tacony Academy Christian School Project Series A-1

    6.25 %       6-15-2023      $ 520,000      $ 552,240  

Philadelphia PA IDA University of the Arts Series 2017 144A

    5.00       3-15-2021        1,205,000        1,230,136  
            26,400,585  
         

 

 

 
GO Revenue: 1.54%      

Allegheny County PA Penn Hills Schools District Series 2015 (BAM Insured)

    5.00       11-15-2022        340,000        372,341  

Allegheny County PA Penn Hills Schools District Series 2015 (BAM Insured)

    5.00       11-15-2023        1,025,000        1,154,488  

Armstrong PA School District Refunding Bonds Series A (BAM Insured)

    5.00       3-15-2027        745,000        908,811  

Armstrong PA School District Refunding Bonds Series A (BAM Insured)

    5.00       3-15-2028        1,120,000        1,389,674  

Armstrong PA School District Refunding Bonds Series A (BAM Insured)

    5.00       3-15-2029        920,000        1,160,083  

Armstrong PA School District Refunding Bonds Series A (BAM Insured)

    5.00       3-15-2030        1,800,000        2,257,200  

Bristol Township PA School District

    5.25       6-1-2031        6,990,000        7,778,682  

Philadelphia PA School District Series B

    3.13       9-1-2020        200,000        202,486  

Philadelphia PA School District Series D

    5.00       9-1-2021        2,000,000        2,121,520  

Philadelphia PA School District Series D

    5.00       9-1-2022        3,565,000        3,907,703  

Philadelphia PA School District Series E

    5.25       9-1-2022        2,995,000        3,074,996  

Philadelphia PA School District Series E

    5.25       9-1-2023        5,770,000        5,924,117  

Philadelphia PA School District Series F

    5.00       9-1-2022        5,000,000        5,480,650  

Scranton PA School District Series A

    5.00       6-1-2024        750,000        852,015  

Scranton PA School District Series A

    5.00       6-1-2025        1,000,000        1,163,220  

Scranton PA School District Series B (National Insured)

    5.00       6-1-2024        665,000        755,453  

Scranton PA School District Series B (National Insured)

    5.00       6-1-2025        710,000        825,886  

Scranton PA Series 2017 144A

    5.00       9-1-2023        1,355,000        1,479,199  
            40,808,524  
         

 

 

 
Health Revenue: 0.81%                          

Berks County PA Municipal Authority Reading Hospital & Medical Center Project Series B (SIFMA Municipal Swap +1.50%) ±

    3.11       11-1-2039        8,850,000        8,940,890  

Bucks County PA IDA Hospital St. Lukes University Health Network

    4.00       8-15-2031        750,000        850,335  

Bucks County PA IDA Hospital St. Lukes University Health Network

    4.00       8-15-2032        1,390,000        1,562,847  

Fulton County PA IDA Medical Center Project

    2.40       7-1-2020        810,000        811,069  

Montgomery County PA Higher Education & Health Authority Series 2018D ø

    1.78       9-1-2050        4,200,000        4,200,000  

Montgomery County PA Higher Education & Health Authority Thomas Jefferson University Series C (SIFMA Municipal Swap +0.72%) ±

    2.33       9-1-2051        3,500,000        3,500,000  

Quakertown PA Health Facilities Authority Series A

    3.13       7-1-2021        1,500,000        1,499,025  
            21,364,166  
         

 

 

 
Housing Revenue: 0.53%      

Pennsylvania HFA Single Family Series 128A

    4.75       4-1-2033        1,815,000        1,994,631  

Pennsylvania HFA Special Limited Obligation MFHR Development Episcopal House

    1.38       12-1-2022        12,000,000        11,999,640  
            13,994,271  
         

 

 

 
Industrial Development Revenue: 0.76%      

Montgomery County PA IDA Peco Energy Company Project Series A

    2.60       3-1-2034        8,500,000        8,575,225  

Montgomery County PA IDA Peco Energy Company Project Series B

    2.55       6-1-2029        10,340,000        10,395,319  

Pennsylvania State Economic Development Financial Authority Solid Waste Disposal CarbonLite P LLC Project 144A

    5.25       6-1-2026        1,000,000        1,036,610  
            20,007,154  
         

 

 

 
Miscellaneous Revenue: 0.49%      

Delaware Valley PA Regional Finance Authority Local Government Series A (Ambac Insured)

    5.50       8-1-2028        8,385,000        10,656,413  

Delaware Valley PA Regional Finance Authority Local Government Series B (Ambac Insured)

    5.70       7-1-2027        1,780,000        2,240,931  

 

The accompanying notes are an integral part of these financial statements.

 

 

28  |  Wells Fargo Strategic Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue (continued)      

Delaware Valley PA Regional Finance Authority Local Government Series C (Ambac Insured)

    7.75 %       7-1-2027      $ 125,000      $ 176,423  
            13,073,767  
         

 

 

 
Transportation Revenue: 0.51%      

Lancaster PA Guaranteed Parking Authority Series A (BAM Insured)

    4.00       9-1-2027        570,000        658,561  

Lancaster PA Guaranteed Parking Authority Series A (BAM Insured)

    4.00       9-1-2028        590,000        675,361  

Lancaster PA Guaranteed Parking Authority Series A (BAM Insured)

    4.00       9-1-2029        410,000        466,769  

Lancaster PA Guaranteed Parking Authority Series A (BAM Insured)

    4.00       9-1-2030        425,000        480,837  

Lancaster PA Guaranteed Parking Authority Series A (BAM Insured)

    4.00       9-1-2031        440,000        495,136  

Lancaster PA Guaranteed Parking Authority Series A (BAM Insured)

    4.00       9-1-2032        460,000        515,798  

Pennsylvania Turnpike Commission Series B (SIFMA Municipal Swap +1.27%) ±

    2.88       12-1-2020        10,000,000        10,046,000  
            13,338,462  
         

 

 

 
Water & Sewer Revenue: 0.50%      

Luzerne County PA IDA Revenue Refunding Bonds AMT Pennsylvania American Water Company Project

    2.45       12-1-2039        3,250,000        3,268,103  

Pittsburgh PA Water & Sewer Authority Series C (1 Month LIBOR +0.64%) (AGM Insured) ±

    1.89       9-1-2040        10,000,000        10,003,100  
            13,271,203  
         

 

 

 
            162,258,132  
         

 

 

 

Rhode Island: 0.08%

         
Housing Revenue: 0.00%                          

Rhode Island Housing & Mortgage Finance

    6.50       4-1-2027        15,000        15,050  
         

 

 

 
Miscellaneous Revenue: 0.08%      

Providence RI RDA Series A

    5.00       4-1-2022        1,940,000        2,071,396  
         

 

 

 
            2,086,446  
         

 

 

 

South Carolina: 0.71%

         
Education Revenue: 0.02%                          

South Carolina Jobs EDA York Preparatory Academy Project Series A

    5.75       11-1-2023        575,000        597,408  
         

 

 

 
Health Revenue: 0.27%      

South Carolina Jobs EDA Prisma Health Obligated Group Series C ø

    1.77       5-1-2048        7,000,000        7,000,000  
         

 

 

 
Miscellaneous Revenue: 0.20%                          

Berkeley County SC Assessment Revenue Bonds Nexton Improvement District

    4.00       11-1-2030        425,000        428,451  

Lee County SC School Facilities Incorporated (AGM Insured)

    2.00       6-1-2020        185,000        185,444  

Lee County SC School Facilities Incorporated (AGM Insured)

    4.00       12-1-2020        375,000        383,756  

South Carolina Transportation Infrastructure Refunding Bonds Series A

    5.00       10-1-2032        4,025,000        4,295,400  
            5,293,051  
         

 

 

 
Resource Recovery Revenue: 0.14%      

South Carolina Jobs EDA Solid Waste Disposal RePower South Berkeley LLC 144A

    5.25       2-1-2027        3,310,000        3,417,211  

South Carolina State Economic Development Jobs

    6.00       2-1-2020        260,000        259,971  
            3,677,182  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  29


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Utilities Revenue: 0.08%      

Patriots Energy Group Financing Agency South Carolina Series A

    4.00 %       10-1-2048      $ 2,050,000      $ 2,234,787  
         

 

 

 
            18,802,428  
         

 

 

 

South Dakota: 0.33%

 
Health Revenue: 0.33%      

South Dakota HEFA Avera Health Series A

    5.00       7-1-2033        7,675,000        8,783,500  
         

 

 

 

Tennessee: 0.70%

 
Utilities Revenue: 0.70%      

Tennessee Energy Acquisition Corporation Gas Project

    4.00       11-1-2049        2,125,000        2,361,980  

Tennessee Energy Acquisition Corporation Series A

    4.00       5-1-2048        12,140,000        12,994,535  

Tennessee Energy Acquisition Corporation Series B

    5.63       9-1-2026        925,000        1,127,945  

Tennessee Energy Acquisition Corporation Series C

    5.00       2-1-2020        2,000,000        2,005,480  
            18,489,940  
         

 

 

 

Texas: 12.67%

 
Airport Revenue: 1.58%      

Dallas Fort Worth TX International Airport Improvement Bonds AMT Series H

    5.00       11-1-2032        9,175,000        9,735,960  

Dallas Fort Worth TX International Airport Improvement Bonds AMT Series H

    5.00       11-1-2037        22,000,000        23,308,120  

Dallas Fort Worth TX International Airport Refunding Bonds AMT Series A

    5.00       11-1-2032        3,375,000        3,774,668  

Dallas Fort Worth TX International Airport Refunding Bonds AMT Series E

    5.00       11-1-2032        1,970,000        2,029,790  

Houston TX Airport System Subordinate Refunding Bonds AMT Series A

    5.00       7-1-2031        2,750,000        2,970,605  
            41,819,143  
         

 

 

 
Education Revenue: 1.21%      

Alamo TX Community College District Various Financing System

    1.70       11-1-2042        4,300,000        4,300,731  

Arlington TX Higher Education Finance Corporate Education Series A

    4.00       6-15-2026        530,000        537,457  

Austin TX Community College District Series A

    4.00       2-1-2023        320,000        346,749  

Clifton TX Higher Education Finance Corporation International Leadership Series 2015A

    4.63       8-15-2025        8,905,000        9,565,573  

Clifton TX Higher Education Finance Corporation Uplift Education Series 2018D

    5.00       8-15-2025        6,565,000        7,372,298  

Clifton TX Higher Education Finance Corporation Uplift Education Series A

    4.00       12-1-2025        2,835,000        2,995,574  

New Hope TX Cultural Education Facilities Finance Corporation Jubilee Academic Center 144A

    3.38       8-15-2021        1,070,000        1,079,470  

Newark TX Higher Educational Finance Corporation Charter Schools Incorporated Series 2015 A 144A

    4.63       8-15-2025        1,360,000        1,452,725  

North Texas Higher Education Authority Incorporated Student Loan Series 2 Class A (3 Month LIBOR +1.00%) ±

    3.10       4-1-2037        1,225,000        1,230,880  

Texas PFA Southern University Financing System (BAM Insured)

    5.00       11-1-2020        1,715,000        1,763,003  

Texas PFA Southern University Financing System (BAM Insured)

    5.00       11-1-2021        1,275,000        1,352,278  
            31,996,738  
         

 

 

 
GO Revenue: 6.27%      

Boerne TX Independent School District Refunding Bonds

    5.00       2-1-2026        1,335,000        1,620,196  

Boerne TX Independent School District Refunding Bonds

    5.00       2-1-2027        1,955,000        2,426,292  

Boerne TX Independent School District Refunding Bonds

    5.00       2-1-2028        1,525,000        1,931,458  

Boerne TX Independent School District Refunding Bonds

    5.00       2-1-2029        1,530,000        1,972,920  

Brazosporight TX Independent School District School Building Series A

    4.00       2-15-2029        2,355,000        2,726,925  

Cypress-Fairbanks TX Independent School District Series A-1

    2.13       2-15-2027        7,000,000        7,094,430  

Denton TX Independent School District Refunding Bonds Series B

    5.00       8-15-2032        5,000,000        5,468,700  

 

The accompanying notes are an integral part of these financial statements.

 

 

30  |  Wells Fargo Strategic Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue (continued)      

Grapevine Colleyville TX Independent School Building

    5.00 %       8-15-2034      $ 2,890,000      $ 3,405,056  

Grapevine Colleyville TX Independent School Building

    5.00       8-15-2035        1,600,000        1,881,552  

Houston TX Public Improvement Refunding Bonds Series A

    4.00       3-1-2031        10,110,000        10,933,055  

Katy TX Independent School District Series 2016A

    5.00       2-15-2023        1,415,000        1,582,437  

Leander TX Independent School District CAB Bonds Series 2014C ¤

    0.00       8-15-2035        2,975,000        1,610,606  

Northside TX Independent School District Building Bonds Series 2018

    2.75       8-1-2048        11,275,000        11,813,156  

Northwest TX Independent School District Refunding Bonds

    5.00       2-15-2032        1,750,000        2,039,170  

Pearland TX Permanent Improvement Series 2015

    5.00       3-1-2021        1,000,000        1,044,500  

San Antonio TX General Improvement

    4.00       8-1-2032        7,360,000        8,551,290  

Texas Tax Revenue Anticipation Notes

    4.00       8-27-2020        36,500,000        37,181,455  

Texas Transportation Commission Mobility Fund Refunding Bonds Series A ##

    5.00       10-1-2030        40,760,000        47,476,001  

Texas Transportation Commission Mobility Fund Series B (SIFMA Municipal Swap +0.30%) ±

    1.91       10-1-2041        15,000,000        15,001,350  
            165,760,549  
         

 

 

 
Health Revenue: 0.28%      

Mesquite TX Health Facilities Development Corporation Christian Care Centers Incorporated Project Series 2016

    5.00       2-15-2020        810,000        811,320  

Mesquite TX Health Facilities Development Corporation Christian Care Centers Incorporated Project Series 2016

    5.00       2-15-2021        560,000        564,872  

New Hope TX Cultural Education Facilities Finance Corporation Hospital Series 2017A

    5.00       8-15-2024        1,000,000        1,165,020  

New Hope TX Cultural Education Facilities Finance Corporation Hospital Series 2017A

    5.00       8-15-2026        2,000,000        2,445,360  

New Hope TX Cultural Education Facilities Finance Corporation Presbyterian Village North Project

    5.00       10-1-2020        680,000        691,778  

New Hope TX Cultural Education Facilities Finance Corporation Presbyterian Village North Project

    5.00       10-1-2023        1,570,000        1,693,653  
            7,372,003  
         

 

 

 
Housing Revenue: 0.15%      

New Hope TX Cultural Education Facilities Finance Corporation Student Housing Tarleton State University Project

    5.38       4-1-2028        1,845,000        2,011,788  

New Hope TX ECFA Collegiate Housing Tarleton State University Series A

    4.00       4-1-2020        185,000        185,905  

New Hope TX ECFA Collegiate Housing Tarleton State University Series A

    4.00       4-1-2021        310,000        317,307  

New Hope TX ECFA Collegiate Housing Tarleton State University Series A

    4.00       4-1-2022        870,000        905,026  

New Hope TX ECFA Collegiate Housing Tarleton State University Series A

    5.00       4-1-2025        480,000        537,144  
            3,957,170  
         

 

 

 
Industrial Development Revenue: 0.35%      

Austin Convention Enterprises Incorporated Series 2017B

    5.00       1-1-2020        500,000        500,000  

Austin Convention Enterprises Incorporated Series 2017B

    5.00       1-1-2021        500,000        516,505  

Houston TX Airport System Refunding Bond United Airlines Incorporated Terminal E Project

    4.50       7-1-2020        8,150,000        8,263,122  
            9,279,627  
         

 

 

 
Miscellaneous Revenue: 0.44%      

Lewisville TX Combination Contract Revenue Special Assessment Bonds Utility System 144A

    8.00       9-1-2039        1,895,000        2,011,543  

Lewisville TX Combination Contract Revenue Special Assessment Bonds Utility System 144A

    8.00       9-1-2039        1,775,000        1,884,163  

Lower Colorado River Authority Texas Transmission Contract LCRA Transmission Services Corporation

    5.00       5-15-2028        1,650,000        1,891,940  

Texas Transportation Commission Highway Improvement

    5.00       4-1-2027        3,010,000        3,469,687  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  31


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Miscellaneous Revenue (continued)      

Wood Glen TX Housing Finance Corporation Mortgage Copperwood Project Series A (National/FHA Insured)

    7.65 %       7-1-2022      $ 2,125,000      $ 2,342,451  
            11,599,784  
         

 

 

 
Resource Recovery Revenue: 0.40%      

Port Arthur TX Navigation District Jefferson County Environmental Facilities Motiva Enterprises LLC Project Series B ø

    1.70       4-1-2040        4,100,000        4,100,000  

Port Arthur TX Navigation District Jefferson County Environmental Facilities Motiva Enterprises LLC Project Series C ø

    1.70       4-1-2040        400,000        400,000  

Port Arthur TX Navigation District Jefferson County Environmental Facilities Motiva Enterprises LLC Project Series E ø

    1.70       11-1-2040        6,000,000        6,000,000  
            10,500,000  
         

 

 

 
Transportation Revenue: 1.00%      

Central Texas Regional Mobility Authority Senior Lien Series A

    5.00       1-1-2021        1,000,000        1,034,220  

Central Texas Regional Mobility Authority Senior Lien Series A

    5.00       1-1-2023        500,000        553,355  

Texas Private Activity Bond Surface Transportation Corporation Senior Lien LBJ Infrastructure Group LLC

    7.00       6-30-2040        1,250,000        1,283,000  

Texas Private Activity Bond Surface Transportation Corporation Senior Lien Revenue Refunding Notes Mobility

    5.00       12-31-2032        2,000,000        2,495,660  

Texas Private Activity Bond Surface Transportation Corporation Senior Lien Revenue Refunding Notes Mobility

    5.00       12-31-2033        3,000,000        3,731,310  

Texas Tender Option Bond Trust Receipts/Floater Certificates
Series 2015-XM0085 (Barclays Bank plc LIQ) 144Aø

    1.76       7-1-2021        17,500,000        17,500,000  
            26,597,545  
         

 

 

 
Utilities Revenue: 0.24%      

San Antonio TX Electric & Gas Systems Junior Lien Refunding Bond

    2.75       2-1-2048        6,000,000        6,245,640  
         

 

 

 
Water & Sewer Revenue: 0.75%      

Dallas TX Waterworks Refunding Bonds Series A

    5.00       10-1-2029        16,225,000        19,802,613  
         

 

 

 
            334,930,812  
         

 

 

 

Utah: 0.22%

 
Airport Revenue: 0.16%      

Salt Lake City UT Airport Revenue Bonds AMT Series 2018A

    5.00       7-1-2029        1,000,000        1,234,490  

Salt Lake City UT Airport Revenue Bonds AMT Series 2018A

    5.00       7-1-2031        2,500,000        3,055,700  
            4,290,190  
         

 

 

 
Education Revenue: 0.06%      

Utah Charter School Finance Authority Ronald Wilson Reagan Academy Project Series A 144A

    3.50       2-15-2026        1,445,000        1,466,762  
         

 

 

 
            5,756,952  
         

 

 

 

Vermont: 0.39%

 
Education Revenue: 0.39%      

Vermont Student Assistance Corporation Series A

    5.00       6-15-2021        1,800,000        1,887,876  

Vermont Student Assistance Corporation Series A

    5.00       6-15-2022        550,000        594,308  

Vermont Student Assistance Corporation Series A

    5.00       6-15-2023        1,200,000        1,332,372  

Vermont Student Assistance Corporation Series B (1 Month LIBOR +1.00%) ±

    2.71       6-2-2042        6,570,309        6,530,361  
            10,344,917  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

32  |  Wells Fargo Strategic Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Virginia: 2.29%

 
Health Revenue: 0.03%      

Prince William County VA IDA Westminster at Lake Ridge Series 2016

    2.25 %       1-1-2020      $ 910,000      $ 910,000  
         

 

 

 
Miscellaneous Revenue: 0.27%      

Westmoreland County VA IDA Lease BAN High School Project

    2.00       6-1-2022        7,000,000        7,093,240  
         

 

 

 
Transportation Revenue: 1.10%      

Chesapeake VA Bay Bridge & Tunnel District First Tier Generation Resolution

    5.00       11-1-2023        20,000,000        22,670,000  

Toll Road Investors Partnership II LP Series 1999B 144A¤

    0.00       2-15-2029        10,000,000        6,363,351  
            29,033,351  
         

 

 

 
Utilities Revenue: 0.89%      

Chesapeake VA EDA Poll Control Electric & Power Company Series 2008A

    1.90       2-1-2032        4,250,000        4,307,843  

Louisa VA Electric and Power IDA Series 2008B

    2.15       11-1-2035        19,050,000        19,154,775  
            23,462,618  
         

 

 

 
            60,499,209  
         

 

 

 

Washington: 1.79%

         
Airport Revenue: 0.08%                          

Port of Seattle WA Intermediate Lien Revenue Bonds AMT Series 2018A

    5.00       5-1-2036        1,710,000        2,028,641  
         

 

 

 
Education Revenue: 0.40%      

University of Washington Series A

    5.00       5-1-2048        10,000,000        10,671,400  
         

 

 

 
GO Revenue: 0.22%      

Washington State Refunding Bonds Motor Vehicle Fuel Tax %%

    5.00       6-1-2027        1,120,000        1,329,194  

Washington State Refunding Bonds Motor Vehicle Fuel Tax %%

    5.00       6-1-2028        1,500,000        1,808,835  

Washington State Refunding Bonds Motor Vehicle Fuel Tax %%

    5.00       6-1-2029        1,000,000        1,223,510  

Washington State Refunding Bonds Motor Vehicle Fuel Tax %%

    5.00       6-1-2030        1,150,000        1,425,230  
            5,786,769  
         

 

 

 
Health Revenue: 0.79%      

Washington HCFR Catholic Health Initiatives Series B (SIFMA Municipal Swap +1.40%) ±

    3.01       1-1-2035        11,000,000        11,245,740  

Washington Health Care Facilities Authority Commonspirit Health Series B3

    5.00       8-1-2049        3,000,000        3,539,520  

Washington Health Care Facilities Authority Fred Hutchinson Cancer Research (1 Month LIBOR +1.10%) ±

    2.30       1-1-2042        6,050,000        6,120,180  
            20,905,440  
         

 

 

 
Housing Revenue: 0.21%      

Snohomish County WA Housing Authority

    5.00       4-1-2027        1,130,000        1,366,825  

Snohomish County WA Housing Authority

    5.00       4-1-2028        1,610,000        1,981,186  

Snohomish County WA Housing Authority

    5.00       4-1-2029        1,690,000        2,111,351  
            5,459,362  
         

 

 

 
Resource Recovery Revenue: 0.09%      

Washington State EDFA Waste Management 144A

    2.13       6-1-2020        2,500,000        2,502,125  
         

 

 

 
            47,353,737  
         

 

 

 

West Virginia: 0.43%

 
Miscellaneous Revenue: 0.09%      

Roane County WV Building Commission Lease BAN Roane General Hospital

    2.55       11-1-2021        2,250,000        2,262,083  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  33


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue: 0.13%      

Monongalia County WV Commission Special District University Town Center Series A 144A

    4.50 %       6-1-2027      $ 3,295,000      $ 3,506,078  
         

 

 

 
Utilities Revenue: 0.21%      

West Virginia EDA Solid Waste Disposal Facilities Wheeling Power Company Mitchell Project Series A

    3.00       6-1-2037        5,450,000        5,619,713  
         

 

 

 
            11,387,874  
         

 

 

 

Wisconsin: 4.37%

 
Airport Revenue: 0.06%      

Wisconsin PFA Airport Series C

    5.00       7-1-2022        1,605,000        1,674,176  
         

 

 

 
Education Revenue: 0.26%      

Corvian County WI Community School Revenue 144A

    4.25       6-15-2029        1,085,000        1,121,413  

Milwaukee WI RDA Science Education Consortium Incorporated Project Series A

    4.75       8-1-2023        830,000        873,824  

PFA Wisconsin Charter School Revenue American Preparatory Academy 144A

    4.00       7-15-2029        650,000        685,893  

PFA Wisconsin Education Revenue Corvian Community School Series A 144A

    4.00       6-15-2029        965,000        990,949  

Pine Lake WI PFA Preparatory Series 2015 144A

    4.35       3-1-2025        2,120,000        2,194,709  

Wisconsin PFA Roseman University of Health Sciences Project Series 2012

    5.00       4-1-2022        890,000        919,263  
            6,786,051  
         

 

 

 
GO Revenue: 1.46%      

Eau Claire WI Area School District Refunding Bonds

    5.00       4-1-2022        1,245,000        1,349,381  

Eau Claire WI Area School District Refunding Bonds

    5.00       4-1-2023        1,860,000        2,082,400  

Eau Claire WI Area School District Refunding Bonds

    5.00       4-1-2024        1,000,000        1,154,270  

Wisconsin State Series A

    4.00       5-1-2030        12,720,000        13,451,400  

Wisconsin State Series B

    5.00       5-1-2031        12,230,000        14,763,934  

Wisconsin State Series B

    5.00       5-1-2034        5,000,000        5,850,000  
            38,651,385  
         

 

 

 
Health Revenue: 1.04%      

Wisconsin HEFA Bellin Memorial Hospital Series 2015

    3.00       12-1-2020        745,000        755,884  

Wisconsin HEFA Bellin Memorial Hospital Series 2015

    5.00       12-1-2022        755,000        832,448  

Wisconsin HEFA Beloit Health System Incorporated %%

    5.00       7-1-2027        1,145,000        1,401,617  

Wisconsin HEFA Beloit Health System Incorporated %%

    5.00       7-1-2028        600,000        745,344  

Wisconsin HEFA Health Care Series 2010A

    5.00       6-1-2030        14,330,000        14,557,274  

Wisconsin HEFA St. Camillus Health System Incorporated

    5.00       11-1-2027        375,000        420,570  

Wisconsin HEFA St. Camillus Health System Incorporated

    5.00       11-1-2028        470,000        529,436  

Wisconsin HEFA Temps 50 St. Camillus Health System Incorporated

    2.25       11-1-2026        4,000,000        4,029,280  

Wisconsin PFA Bancroft Neurohealth Project Series A 144A

    4.00       6-1-2020        635,000        638,175  

Wisconsin PFA Bancroft Neurohealth Project Series A 144A

    4.00       6-1-2021        1,370,000        1,392,180  

Wisconsin State HEFA Ascension Health Credit Group Series A

    4.00       11-15-2034        2,000,000        2,206,280  
            27,508,488  
         

 

 

 
Miscellaneous Revenue: 0.21%      

Monona WI Anticipation Notes Series D

    3.63       9-1-2022        1,925,000        1,949,967  

Wisconsin State Series 2

    5.00       11-1-2029        3,000,000        3,641,550  
            5,591,517  
         

 

 

 
Tax Revenue: 1.03%      

Wisconsin State General Fund Annual Appropriations Series A

    5.00       5-1-2028        11,775,000        14,704,620  

Wisconsin State General Fund Annual Appropriations Series A

    5.00       5-1-2029        10,000,000        12,432,300  
            27,136,920  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

34  |  Wells Fargo Strategic Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Water & Sewer Revenue: 0.31%  

Wisconsin Clean Water Refunding Bonds Series 2012

    5.00 %       6-1-2023      $ 310,000      $ 349,696  

Wisconsin Clean Water Refunding Bonds Series 2013

    5.00       6-1-2024        2,285,000        2,577,594  

Wisconsin Clean Water Refunding Bonds Series 2015

    5.00       6-1-2025        3,045,000        3,540,665  

Wisconsin Clean Water Refunding Bonds Series 2015

    5.00       6-1-2026        1,525,000        1,773,240  
            8,241,195  
         

 

 

 
            115,589,732  
         

 

 

 

Total Municipal Obligations (Cost $2,521,889,327)

 

     2,589,445,008  
  

 

 

 

Closed End Municipal Bond Fund Obligations: 1.13%

 

California: 1.13%  

Nuveen California AMT-Free Quality Municipal Income Fund Variable Rate Demand Preferred Shares Series A 1.88% 144A

         29,800,000        29,800,000  
         

 

 

 

Total Closed End Municipal Bond Fund Obligations (Cost $29,800,000)

 

     29,800,000  
  

 

 

 
         
    Yield            Shares         
Short-Term Investments: 0.39%  
Investment Companies: 0.39%  

Wells Fargo Municipal Cash Management Money Market Fund Institutional Class (l)(u)

    1.45          10,323,019        10,327,149  
         

 

 

 

Total Short-Term Investments (Cost $10,327,149)

 

     10,327,149  
  

 

 

 

 

Total investments in securities (Cost $2,562,016,476)     99.49        2,629,572,157  

Other assets and liabilities, net

    0.51          13,560,709  
 

 

 

      

 

 

 
Total net assets     100.00      $ 2,643,132,866  
 

 

 

      

 

 

 

 

 

144A

The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933.

ø

Variable rate demand notes are subject to a demand feature which reduces the effective maturity. The maturity date shown represents the final maturity date of the security. The interest rate is determined and reset by the issuer daily, weekly, or monthly depending upon the terms of the security. The rate shown is the rate in effect at period end.

±

Variable rate investment. The rate shown is the rate in effect at period end.

(m)

The security is an auction-rate security which has an interest rate that resets at predetermined short-term intervals through a Dutch auction. The rate shown is the rate in effect at period end.

%%

The security is purchased on a when-issued basis.

¤

The security is issued in zero coupon form with no periodic interest payments.

øø

The interest rate is determined and reset by the issuer periodically depending upon the terms of the security. The rate shown is the rate in effect at period end.

##

All or a portion of this security is segregated for when-issued securities.

(l)

The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940.

(u)

The rate represents the 7-day annualized yield at period end.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  35


Portfolio of investments—December 31, 2019 (unaudited)

 

Abbreviations:

AGC

Assured Guaranty Corporation

AGM

Assured Guaranty Municipal

Ambac

Ambac Financial Group Incorporated

AMT

Alternative minimum tax

BAM

Build America Mutual Assurance Company

BAN

Bond anticipation notes

CAB

Capital appreciation bond

CDA

Community Development Authority

ECFA

Educational & Cultural Facilities Authority

EDA

Economic Development Authority

EDFA

Economic Development Finance Authority

FHA

Federal Housing Administration

FHLMC

Federal Home Loan Mortgage Corporation

FNMA

Federal National Mortgage Association

GNMA

Government National Mortgage Association

GO

General obligation

HCFR

Healthcare facilities revenue

HEFA

Health & Educational Facilities Authority

HEFAR

Higher Education Facilities Authority Revenue

HFA

Housing Finance Authority

HFFA

Health Facilities Financing Authority

IDA

Industrial Development Authority

LIBOR

London Interbank Offered Rate

LIQ

Liquidity agreement

LOC

Letter of credit

MFHR

Multifamily housing revenue

National

National Public Finance Guarantee Corporation

PCFA

Pollution Control Financing Authority

PCR

Pollution control revenue

PFA

Public Finance Authority

RDA

Redevelopment Authority

SIFMA

Securities Industry and Financial Markets Association

SOFR

Secured Overnight Financing Rate

SPA

Standby purchase agreement

TTFA

Transportation Trust Fund Authority

Investments in Affiliates

An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were either affiliated persons of the Fund at the beginning of the period or the end of the period were as follows:

 

    Shares,
beginning of
period
    Shares
purchased
    Shares
sold
    Shares,
end of
period
    Net
realized
gains
(losses)
    Net
change in
unrealized
gains
(losses)
    Income
from
affiliated
securities
    Value,
end of
period
    % of
net
assets
 
Short-Term Investments                                                      

Investment Companies

                 

Wells Fargo Municipal Cash Management Money Market Fund Institutional Class

    836,527       357,855,242       (348,368,750     10,323,019     $ (2,360   $ (167   $ 92,870     $ 10,327,149       0.39

 

The accompanying notes are an integral part of these financial statements.

 

 

36  |  Wells Fargo Strategic Municipal Bond Fund


Statement of assets and liabilities—December 31, 2019 (unaudited)

 

         

Assets

 

Investments in unaffiliated securities, at value (cost $2,551,689,327)

  $ 2,619,245,008  

Investments in affiliated securities, at value (cost $10,327,149)

    10,327,149  

Cash

    30,116  

Receivable for investments sold

    2,279,000  

Receivable for Fund shares sold

    5,107,537  

Receivable for interest

    23,273,232  

Prepaid expenses and other assets

    178,873  
 

 

 

 

Total assets

    2,660,440,915  
 

 

 

 

Liabilities

 

Payable for investments purchased

    10,924,644  

Payable for Fund shares redeemed

    4,180,516  

Management fee payable

    826,551  

Dividends payable

    767,721  

Administration fees payable

    229,487  

Distribution fee payable

    49,778  

Trustees’ fees and expenses payable

    4,224  

Accrued expenses and other liabilities

    325,128  
 

 

 

 

Total liabilities

    17,308,049  
 

 

 

 

Total net assets

  $ 2,643,132,866  
 

 

 

 

Net assets consist of

 

Paid-in capital

  $ 2,575,516,484  

Total distributable earnings

    67,616,382  
 

 

 

 

Total net assets

  $ 2,643,132,866  
 

 

 

 

Computation of net asset value and offering price per share

 

Net assets – Class A

  $ 567,645,669  

Shares outstanding – Class A1

    61,832,367  

Net asset value per share – Class A

    $9.18  

Maximum offering price per share – Class A2

    $9.56  

Net assets – Class C

  $ 75,500,437  

Shares outstanding – Class C1

    8,195,588  

Net asset value per share – Class C

    $9.21  

Net assets – Class R6

  $ 15,840,559  

Shares outstanding – Class R61

    1,725,151  

Net asset value per share – Class R6

    $9.18  

Net assets – Administrator Class

  $ 145,447,656  

Shares outstanding – Administrator Class1

    15,852,010  

Net asset value per share – Administrator Class

    $9.18  

Net assets – Institutional Class

  $ 1,838,698,545  

Shares outstanding – Institutional Class1

    200,334,827  

Net asset value per share – Institutional Class

    $9.18  

 

1 

The Fund has an unlimited number of authorized shares.

 

2 

Maximum offering price is computed as 100/96 of net asset value. On investments of $50,000 or more, the offering price is reduced.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  37


Statement of operations—six months ended December 31, 2019 (unaudited)

 

         

Investment income

 

Interest

  $ 33,006,633  

Income from affiliated securities

    92,870  
 

 

 

 

Total investment income

    33,099,503  
 

 

 

 

Expenses

 

Management fee

    4,667,384  

Administration fees

 

Class A

    445,737  

Class C

    63,644  

Class R6

    2,074  

Administrator Class

    73,171  

Institutional Class

    704,747  

Shareholder servicing fees

 

Class A

    696,463  

Class C

    99,444  

Administrator Class

    182,928  

Distribution fee

 

Class C

    298,331  

Custody and accounting fees

    41,434  

Professional fees

    26,250  

Registration fees

    65,636  

Shareholder report expenses

    12,334  

Trustees’ fees and expenses

    10,804  

Other fees and expenses

    14,532  
 

 

 

 

Total expenses

    7,404,913  

Less: Fee waivers and/or expense reimbursements

 

Administrator Class

    (35,186
 

 

 

 

Net expenses

    7,369,727  
 

 

 

 

Net investment income

    25,729,776  
 

 

 

 

Realized and unrealized gains (losses) on investments

 

Net realized gains (losses) on

 

Unaffiliated securities

    296,251  

Affiliated securities

    (2,360

Futures contracts

    21,846  
 

 

 

 

Net realized gains on investments

    315,737  
 

 

 

 

Net change in unrealized gains (losses) on

 

Unaffiliated securities

    11,533,671  

Affiiliated securities

    (167
 

 

 

 

Net change in unrealized gains (losses) on investments

    11,533,504  
 

 

 

 

Net realized and unrealized gains (losses) on investments

    11,849,241  
 

 

 

 

Net increase in net assets resulting from operations

  $ 37,579,017  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

38  |  Wells Fargo Strategic Municipal Bond Fund


Statement of changes in net assets

 

    

Six months ended
December 31, 2019

(unaudited)

    Year ended
June 30, 2019
 

Operations

 

 

Net investment income

    $ 25,729,776       $ 46,487,672  

Net realized gains on investments

      315,737         5,975,953  

Net change in unrealized gains (losses) on investments

      11,533,504         45,705,609  
 

 

 

 

Net increase in net assets resulting from operations

      37,579,017         98,169,234  
 

 

 

 

Distributions to shareholders from net investment income and net
realized gains

 

Class A

      (5,460,538       (9,763,010

Class C

      (477,299       (1,245,785

Class R6

      (160,932       (193,619 )1 

Administrator Class

      (1,510,274       (3,446,885

Institutional Class

      (20,203,681       (31,841,170
 

 

 

 

Total distributions to shareholders

      (27,812,724       (46,490,469
 

 

 

 

Capital share transactions

    Shares         Shares    

Proceeds from shares sold

       

Class A

    10,791,725       99,132,003       19,706,942       177,435,241  

Class C

    718,240       6,624,238       1,344,541       12,107,980  

Class R6

    1,033,435       9,480,891       2,320,780 1      20,830,779 1 

Administrator Class

    1,592,507       14,624,934       5,609,233       50,252,974  

Institutional Class

    41,302,238       379,240,506       100,346,510       902,217,837  
 

 

 

 
      509,102,572         1,162,844,811  
 

 

 

 

Reinvestment of distributions

 

Class A

    540,100       4,962,451       995,585       8,956,377  

Class C

    43,896       404,632       120,097       1,082,404  

Class R6

    1,399       12,846       0 1      0 1 

Administrator Class

    159,424       1,463,568       373,089       3,350,926  

Institutional Class

    1,808,745       16,618,847       2,885,056       25,969,024  
 

 

 

 
      23,462,344         39,358,731  
 

 

 

 

Payment for shares redeemed

 

Class A

    (7,251,115     (66,582,738     (17,937,947     (161,039,725

Class C

    (1,540,301     (14,202,904     (5,379,557     (48,528,767

Class R6

    (763,003     (7,000,057     (867,460 )1      (7,804,378 )1 

Administrator Class

    (2,216,749     (20,350,137     (11,142,539     (99,719,756

Institutional Class

    (22,974,173     (210,878,478     (60,128,198     (539,512,255
 

 

 

 
      (319,014,314       (856,604,881
 

 

 

 

Net increase in net assets resulting from capital share transactions

      213,550,602         345,598,661  
 

 

 

 

Total increase in net assets

      223,316,895         397,277,426  
 

 

 

 

Net assets

       

Beginning of period

      2,419,815,971         2,022,538,545  
 

 

 

 

End of period

    $ 2,643,132,866       $ 2,419,815,971  
 

 

 

 

 

1 

For the period from July 31, 2018 (commencement of class operations) to June 30, 2019

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  39


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months  ended
December 31, 2019
(unaudited)
    Year ended June 30  
CLASS A   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $9.14       $8.93       $8.94       $9.06       $8.90       $9.03  

Net investment income

    0.08       0.18       0.15       0.13       0.14       0.10  

Net realized and unrealized gains (losses) on investments

    0.05       0.21       0.01       (0.07     0.18       (0.05
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.13       0.39       0.16       0.06       0.32       0.05  

Distributions to shareholders from

           

Net investment income

    (0.08     (0.18     (0.15     (0.13     (0.14     (0.10

Net realized gains

    (0.01     0.00       (0.02     (0.05     (0.02     (0.08
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.09     (0.18     (0.17     (0.18     (0.16     (0.18

Net asset value, end of period

    $9.18       $9.14       $8.93       $8.94       $9.06       $8.90  

Total return1

    1.43     4.41     1.82     0.65     3.67     0.56

Ratios to average net assets (annualized)

           

Gross expenses

    0.79     0.80     0.82     0.81     0.81     0.81

Net expenses

    0.79     0.80     0.82     0.81     0.81     0.81

Net investment income

    1.80     1.99     1.69     1.45     1.53     1.16

Supplemental data

           

Portfolio turnover rate

    6     29     33     31     53     39

Net assets, end of period (000s omitted)

    $567,646       $528,004       $491,128       $550,965       $726,135       $635,610  

 

1 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

40  |  Wells Fargo Strategic Municipal Bond Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months  ended
December 31, 2019
(unaudited)
    Year ended June 30  
CLASS C   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $9.17       $8.96       $8.97       $9.09       $8.94       $9.06  

Net investment income

    0.05       0.11 1      0.08 1      0.07       0.07       0.04  

Net realized and unrealized gains (losses) on investments

    0.05       0.21       0.01       (0.07     0.17       (0.04
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.10       0.32       0.09       (0.00     0.24       0.00  

Distributions to shareholders from

           

Net investment income

    (0.05     (0.11     (0.08     (0.07     (0.07     (0.04

Net realized gains

    (0.01     0.00       (0.02     (0.05     (0.02     (0.08
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.06     (0.11     (0.10     (0.12     (0.09     (0.12

Net asset value, end of period

    $9.21       $9.17       $8.96       $8.97       $9.09       $8.94  

Total return2

    1.05     3.62     1.06     (0.10 )%      2.78     (0.08 )% 

Ratios to average net assets (annualized)

           

Gross expenses

    1.54     1.55     1.57     1.56     1.56     1.56

Net expenses

    1.54     1.55     1.57     1.56     1.56     1.56

Net investment income

    1.05     1.24     0.94     0.72     0.78     0.40

Supplemental data

           

Portfolio turnover rate

    6     29     33     31     53     39

Net assets, end of period (000s omitted)

    $75,500       $82,331       $115,518       $137,955       $156,560       $152,882  

 

 

 

1 

Calculated based upon average shares outstanding

2 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  41


Financial highlights

 

(For a share outstanding throughout each period)

 

CLASS R6  

Six months ended

December 31, 2019
(unaudited)

    Year ended
June 30 20191
 

Net asset value, beginning of period

    $9.15       $8.94  

Net investment income

    0.10       0.20  

Net realized and unrealized gains on investments

    0.04       0.21  
 

 

 

   

 

 

 

Total from investment operations

    0.14       0.41  

Distributions to shareholders from

   

Net investment income

    (0.10     (0.20

Net realized gains

    (0.01     0.00  
 

 

 

   

 

 

 

Total distributions to shareholders

    (0.11     0.20  

Net asset value, end of period

    $9.18       $9.15  

Total return2

    1.51     4.61

Ratios to average net assets (annualized)

   

Gross expenses

    0.41     0.41

Net expenses

    0.41     0.41

Net investment income

    2.18     2.39

Supplemental data

   

Portfolio turnover rate

    6     29

Net assets, end of period (000s omitted)

    $15,841       $13,291  

 

 

 

 

1 

For the period from July 31, 2018 (commencement of class operations) to June 30, 2019

 

2 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

42  |  Wells Fargo Strategic Municipal Bond Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
ADMINISTRATOR CLASS   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $9.14       $8.93       $8.93       $9.06       $8.90       $9.02  

Net investment income

    0.09       0.19       0.16       0.14       0.15       0.12  

Net realized and unrealized gains (losses) on investments

    0.05       0.21       0.02       (0.08     0.18       (0.04
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.14       0.40       0.18       0.06       0.33       0.08  

Distributions to shareholders from

           

Net investment income

    (0.09     (0.19     (0.16     (0.14     (0.15     (0.12

Net realized gains

    (0.01     0.00       (0.02     (0.05     (0.02     (0.08
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.10     (0.19     (0.18     (0.19     (0.17     (0.20

Net asset value, end of period

    $9.18       $9.14       $8.93       $8.93       $9.06       $8.90  

Total return1

    1.49     4.53     2.07     0.67     3.80     0.80

Ratios to average net assets (annualized)

           

Gross expenses

    0.73     0.73     0.76     0.75     0.74     0.75

Net expenses

    0.68     0.68     0.68     0.68     0.68     0.68

Net investment income

    1.91     2.10     1.80     1.51     1.66     1.28

Supplemental data

           

Portfolio turnover rate

    6     29     33     31     53     39

Net assets, end of period (000s omitted)

    $145,448       $149,097       $191,723       $195,138       $408,846       $529,945  

 

 

 

1 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  43


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
INSTITUTIONAL CLASS   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $9.14       $8.93       $8.94       $9.06       $8.90       $9.03  

Net investment income

    0.10       0.21       0.18       0.16       0.17       0.13  

Net realized and unrealized gains (losses) on investments

    0.05       0.21       0.01       (0.07     0.18       (0.05
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.15       0.42       0.19       0.09       0.35       0.08  

Distributions to shareholders from

           

Net investment income

    (0.10     (0.21     (0.18     (0.16     (0.17     (0.13

Net realized gains

    (0.01     0.00       (0.02     (0.05     (0.02     (0.08
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.11     (0.21     (0.20     (0.21     (0.19     (0.21

Net asset value, end of period

    $9.18       $9.14       $8.93       $8.94       $9.06       $8.90  

Total return1

    1.60     4.75     2.16     0.99     4.02     0.89

Ratios to average net assets (annualized)

           

Gross expenses

    0.46     0.47     0.49     0.48     0.48     0.48

Net expenses

    0.46     0.47     0.48     0.48     0.48     0.48

Net investment income

    2.13     2.32     2.05     1.85     1.85     1.49

Supplemental data

           

Portfolio turnover rate

    6     29     33     31     53     39

Net assets, end of period (000s omitted)

    $1,838,699       $1,647,093       $1,224,170       $1,033,007       $608,995       $319,313  

 

 

 

1 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

44  |  Wells Fargo Strategic Municipal Bond Fund


Notes to financial statements (unaudited)

 

1. ORGANIZATION

Wells Fargo Funds Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Wells Fargo Strategic Municipal Bond Fund (the “Fund”) which is a diversified series of the Trust.

2. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Securities valuation

All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.

Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

Futures contracts that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price.

Investments in registered open-end investment companies 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 in good faith by the Board of Trustees of the Fund. The Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities, unless the determination has been delegated to the Wells Fargo Asset Management Pricing Committee at Wells Fargo Funds Management, LLC (“Funds Management”). The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Valuation Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees receives reports on any valuation actions taken by the Valuation Committee or the Wells Fargo Asset Management Pricing Committee which may include items for ratification.

When-issued transactions

The Fund may purchase securities on a forward commitment or when-issued basis. The Fund records a when-issued transaction on the trade date and will segregate assets in an amount at least equal in value to the Fund’s commitment to purchase when-issued securities. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

Futures contracts

Futures contracts are agreements between the Fund and a counterparty to buy or sell a specific amount of a commodity, financial instrument or currency at a specified price and on a specified date. The Fund may buy and sell futures contracts in order to gain exposure to, or protect against, changes in interest rates and is subject to interest rate risk. 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 generally entered into on a regulated futures exchange and cleared through a clearinghouse associated with the exchange. With futures contracts, there is minimal counterparty risk to the Fund since futures contracts are exchange traded and the exchange’s clearinghouse, as the counterparty to all exchange traded futures, guarantees the futures contracts against default.

Upon entering into a futures contracts, the Fund is required to deposit either cash or securities (initial margin) with the broker in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are paid to or from the broker each day equal to the daily changes in the contract value. Such payments are recorded as unrealized gains or losses and, if any, shown as variation margin receivable (payable) in the Statement of Assets and Liabilities. Should the Fund fail to

 

 

Wells Fargo Strategic Municipal Bond Fund  |  45


Notes to financial statements (unaudited)

 

make requested variation margin payments, the broker can gain access to the initial margin to satisfy the Fund’s payment obligations. When the contracts are closed, a realized gain or loss is recorded in the Statement of Operations.

Security transactions and income recognition

Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. 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 been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Distributions to shareholders

Distributions to shareholders from net investment income are declared daily and paid monthly. Distributions from net realized gains, if any, are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.

Federal and other taxes

The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable and tax-exempt income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.

The 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. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

As of December 31, 2019, the aggregate cost of all investments for federal income tax purposes was $2,562,016,474 and the unrealized gains (losses) consisted of:

 

Gross unrealized gains

   $ 68,355,595  

Gross unrealized losses

     (799,912

Net unrealized gains

   $ 67,555,683  

Class allocations

The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.

3. FAIR VALUATION MEASUREMENTS

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:

 

 

Level 1 – quoted prices in active markets for identical securities

 

 

Level 2 – other significant observable inputs (including quoted prices for similar securities, 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 investments in securities are not necessarily an indication of the risk associated with investing in those securities.

 

 

46  |  Wells Fargo Strategic Municipal Bond Fund


Notes to financial statements (unaudited)

 

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of December 31, 2019:

 

     Quoted prices
(Level 1)
    Other significant
observable inputs
(Level 2)
   

Significant
unobservable inputs

(Level 3)

    Total  

Assets

       

Investments in :

       

Municipal obligations

  $ 0     $ 2,589,445,008     $ 0     $ 2,589,445,008  

Closed end municipal bond fund obligations

    0       29,800,000       0       29,800,000  

Short-term investments

       

Investment companies

    10,327,149       0       0       10,327,149  

Total assets

  $ 10,327,149     $ 2,619,245,008     $ 0     $ 2,629,572,157  

Additional sector, industry or geographic detail is included in the Portfolio of Investments.

For the six months ended December 31, 2019, the Fund did not have any transfers into/out of Level 3.

4. TRANSACTIONS WITH AFFILIATES

Management fee

Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”), is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:

 

Average daily net assets    Management fee

First $500 million

   0.400%

Next $500 million

   0.375

Next $2 billion

   0.350

Next $2 billion

   0.325

Next $5 billion

   0.290

Over $10 billion

   0.280

For the six months ended December 31, 2019, the management fee was equivalent to an annual rate of 0.36% of the Fund’s average daily net assets.

Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Funds Management. Wells Capital Management Incorporated, an affiliate of Funds Management and an indirect wholly owned subsidiary of Wells Fargo, is the subadviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.20% and declining to 0.10% as the average daily net assets of the Fund increase.

Administration fees

Under a class-level administration agreement, Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account

 

 

Wells Fargo Strategic Municipal Bond Fund  |  47


Notes to financial statements (unaudited)

 

servicers and record-keepers. As compensation for its services under the class-level administration agreement, Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:

 

      Class-level
administration fee
 

Class A, Class C

     0.16

Class R6

     0.03  

Administrator Class

     0.10  

Institutional Class

     0.08  

Waivers and/or expense reimbursements

Funds Management has contractually waived and/or reimbursed management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Funds Management has waived fees and/or reimbursed expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Funds Management has committed through October 31, 2020 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s expenses at 0.81% for Class A shares, 1.56% for Class C shares, 0.43% for Class R6 shares, 0.68% for Administrator Class shares and 0.48% for Institutional Class shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Prior to November 1, 2019, the Fund’s expenses were capped at 0.82% for Class A shares and 1.57% for Class C shares.

Distribution fee

The Trust has adopted a distribution plan for Class C shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Wells Fargo Funds Distributor, LLC (“Funds Distributor”), the principal underwriter, at an annual rate of 0.75% of the average daily net assets of Class C shares.

In addition, Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the six months ended December 31, 2019, Funds Distributor received $10,075 from the sale of Class A shares. No contingent deferred sales charges were incurred by Class A and Class C shares for the six months ended December 31, 2019.

Interfund transactions

The Fund may purchase or sell portfolio investment securities to certain other Wells Fargo affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund had $22,145,000 and $40,650,000 in interfund purchases and sales, respectively, during the six months ended December 31, 2019.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended December 31, 2019 were $646,766,200 and $128,175,243, respectively.

6. DERIVATIVE TRANSACTIONS

During the six months ended December 31, 2019, the Fund entered into futures contracts to take advantage of the differences between municipal and treasury yields and to help manage the duration of the portfolio. The Fund had an average notional amount of $2,498,648 in long futures contracts and $524,441 in short futures contracts during the six months ended December 31, 2019.

The fair value, realized gains or losses and change in unrealized gains or losses, if any, on derivative instruments are reflected in the corresponding financial statement captions.

7. BANK BORROWINGS

The Trust (excluding the money market funds), Wells Fargo Master Trust and Wells Fargo Variable Trust are parties to a $280,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency

 

 

48  |  Wells Fargo Strategic Municipal Bond Fund


Notes to financial statements (unaudited)

 

purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the 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, an annual commitment fee equal to 0.25% of the unused balance is allocated to each participating fund.

For the six months ended December 31, 2019, there were no borrowings by the Fund under the agreement.

8. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and Trustees have been granted certain indemnification rights 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 Fund and, therefore, cannot be estimated.

9. NEW ACCOUNTING PRONOUNCEMENTS

In August 2018, FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 updates the disclosure requirements for fair value measurements by modifying or removing certain disclosures and adding certain new disclosures. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Management has adopted the removal and modification of disclosures early, as permitted, and will adopt the additional new disclosures at the effective date.

In March 2017, FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium and requires the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount and discounts will continue to be accreted to the maturity date of the security. ASU 2017-08 is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years. During the current reporting period, management of the Fund adopted the change in accounting policy which did not have a material impact to the Fund’s financial statements.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  49


Other information (unaudited)

 

PROXY VOTING INFORMATION

A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available, upon request, by calling 1-800-222-8222, visiting our website at wfam.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at wfam.com or by visiting the SEC website at sec.gov.

QUARTERLY PORTFOLIO HOLDINGS INFORMATION

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.

 

 

50  |  Wells Fargo Strategic Municipal Bond Fund


Other information (unaudited)

 

BOARD OF TRUSTEES AND OFFICERS

Each of the Trustees and Officers1 listed in the table below acts in identical capacities for each fund in the Wells Fargo family of funds, which consists of 149 mutual funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information2. 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

 

Name and

year of birth

  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships
William R. Ebsworth (Born 1957)   Trustee,
since 2015
  Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Endowment (non-profit organization). Mr. Ebsworth is a CFA® charterholder.   N/A
Jane A. Freeman (Born 1953)   Trustee,
since 2015;
Chair Liaison, since 2018
  Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is a Board Member of The Ruth Bancroft Garden (non-profit organization). She is also an inactive Chartered Financial Analyst.   N/A
Isaiah Harris, Jr. (Born 1952)   Trustee,
since 2009;
Audit Committee Chairman,
since 2019
  Retired. Chairman of the Board of CIGNA Corporation since 2009, and Director since 2005. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Child Evangelism Fellowship (non-profit). Mr. Harris is a certified public accountant (inactive status).   CIGNA Corporation
Judith M. Johnson (Born 1949)   Trustee,
since 2008;
Audit Committee Chairman, from 2009 to 2018
  Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.   N/A

 

 

Wells Fargo Strategic Municipal Bond Fund  |  51


Other information (unaudited)

 

Name and

year of birth

  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships
David F. Larcker (Born 1950)   Trustee,
since 2009
  James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.   N/A
Olivia S. Mitchell (Born 1953)   Trustee,
since 2006; Nominating and Governance Committee Chair, since 2018
  International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993.   N/A
Timothy J. Penny (Born 1951)   Trustee,
since 1996; Chairman,
since 2018
  President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.   N/A
James G. Polisson (Born 1959)   Trustee,
since 2018
  Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations.   N/A
Pamela Wheelock3 (Born 1959)   Trustee, since January 2020;
previously Trustee
from January 2018 to July 2019
  Board member of the Destination Medical Center Economic Development Agency, Rochester, Minnesota since 2019. Acting Commissioner, Minnesota Department of Human Services, July 2019 through September 2019. Human Services Manager (part-time), Minnesota Department of Human Services, October 2019 through December 2019. Chief Operating Officer, Twin Cities Habitat for Humanity from 2017 to 2019. Vice President of University Services, University of Minnesota from 2012 to 2016. Prior thereto, on the Board of Directors, Governance Committee and Finance Committee for the Minnesota Philanthropy Partners (Saint Paul Foundation) from 2012 to 2018, Interim Chief Executive Officer of Blue Cross Blue Shield of Minnesota from 2011 to 2012, Chairman of the Board from 2009 to 2012 and Board Director from 2003 to 2015. Vice President, Leadership and Community Engagement, Bush Foundation, Saint Paul, Minnesota (a private foundation) from 2009 to 2011. Executive Vice President and Chief Financial Officer, Minnesota Sports and Entertainment from 2004 to 2009 and Senior Vice President from 2002 to 2004. Executive Vice President of the Minnesota Wild Foundation from 2004 to 2008. Commissioner of Finance, State of Minnesota, from 1999 to 2002. Currently Board Chair of the Minnesota Wild Foundation since 2010.   N/A

 

*

Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.

 

 

52  |  Wells Fargo Strategic Municipal Bond Fund


Other information (unaudited)

 

Officers

 

Name and
year of birth
  Position held and
length of service
  Principal occupations during past five years or longer
Andrew Owen
(Born 1960)
  President,
since 2017
  Executive Vice President of Wells Fargo & Company and Head of Affiliated Managers, Wells Fargo Asset Management, since 2014. In addition, Mr. Owen is currently President, Chief Executive Officer and Director of Wells Fargo Funds Management, LLC since 2017. Prior thereto, Executive Vice President responsible for marketing, investments and product development for Wells Fargo Funds Management, LLC, from 2009 to 2014.
Nancy Wiser1
(Born 1967)
  Treasurer,
since 2012
  Executive Vice President of Wells Fargo Funds Management, LLC since 2011. Chief Operating Officer and Chief Compliance Officer at LightBox Capital Management LLC, from 2008 to 2011.
Michelle Rhee4
(Born 1966)
  Chief Legal Officer,
since 2019
  Secretary of Wells Fargo Funds Management, LLC, Chief Legal Counsel of Wells Fargo Asset Management and Assistant General Counsel of Wells Fargo Bank, N.A. since 2018. Associate General Counsel and Managing Director of Bank of America Corporation from 2004 to 2018.
Catherine Kennedy5 (Born 1969)   Secretary,
since 2019
  Vice President of Wells Fargo Funds Management, LLC and Senior Counsel of the Wells Fargo Legal Department since 2010. Vice President and Senior Counsel of Evergreen Investment Management Company, LLC from 1998 to 2010.
Michael H. Whitaker
(Born 1967)
  Chief Compliance Officer,
since 2016
  Chief Compliance Officer of Wells Fargo Asset Management since 2016. Senior Vice President and Chief Compliance Officer for Fidelity Investments from 2007 to 2016.
David Berardi
(Born 1975)
  Assistant Treasurer,
since 2009
  Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.
Jeremy DePalma1 (Born 1974)   Assistant Treasurer,
since 2009
  Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.

 

1 

Nancy Wiser acts as Treasurer of 64 funds in the Fund Complex. Jeremy DePalma acts as Treasurer of 85 funds and Assistant Treasurer of 64 funds in the Fund Complex.

 

2 

The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at wfam.com.

 

3 

Pamela Wheelock was re-appointed to the Board effective January 1, 2020.

 

4 

Michelle Rhee became Chief Legal Officer effective October 22, 2019.

 

5 

Catherine Kennedy became Secretary effective October 22, 2019.

 

 

Wells Fargo Strategic Municipal Bond Fund  |  53


Appendix (unaudited)

 

Effective on or about May 1, 2020, if you purchase Fund shares through a Janney Montgomery Scott LLC (“Janney”) brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge (“CDSC”), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in the Fund’s Prospectus or SAI.

 

Front-end sales charge* waivers on Class A shares available at Janney
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).
Shares purchased by employees and registered representatives of Janney or its affiliates and their family members as designated by Janney.
Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within ninety (90) days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., right of reinstatement).
Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
Shares acquired through a right of reinstatement.
Class C shares that are no longer subject to a contingent deferred sales charge and are converted to Class A shares of the same fund pursuant to Janney’s policies and procedures.
CDSC waivers on Class A and Class C shares available at Janney
Shares sold upon the death or disability of the shareholder.
Shares sold as part of a systematic withdrawal plan as described in the Fund’s Prospectus.
Shares purchased in connection with a return of excess contributions from an IRA account.
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRS regulations.
Shares sold to pay Janney fees but only if the transaction is initiated by Janney.
Shares acquired through a right of reinstatement.
Shares exchanged into the same share class of a different fund.
Front-end sales charge* discounts available at Janney; breakpoints, rights of accumulation and/or letters of intent
Breakpoints as described in the Fund’s Prospectus.
Rights of accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Janney. Eligible fund family assets not held at Janney may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.
Letters of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Janney Montgomery Scott may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.

 

*

Also referred to as an “initial sales charge.”

 

 

54  |  Wells Fargo Strategic Municipal Bond Fund


 

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LOGO

For more information

More information about Wells Fargo Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:

Wells Fargo Funds

P.O. Box 219967

Kansas City, MO 64121-9967

Website: wfam.com

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

 

LOGO

 

This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-222-8222 or visit the Fund’s website at wfam.com. Read the prospectus carefully before you invest or send money.

Wells Fargo Asset Management (WFAM) is the trade name for certain investment advisory/management firms owned by Wells Fargo & Company. These firms include but are not limited to Wells Capital Management Incorporated and Wells Fargo Funds Management, LLC. Certain products managed by WFAM entities are distributed by Wells Fargo Funds Distributor, LLC (a broker-dealer and Member FINRA).

This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind—including a recommendation for any specific investment, strategy, or plan.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE     MAY LOSE VALUE


 

© 2020 Wells Fargo & Company. All rights reserved.

PAR-0120-02397 02-20

SA257/SAR257 12-19

 

 



LOGO

Semi-Annual Report

December 31, 2019

 

Wells Fargo

High Yield Municipal Bond Fund

 

 

 

 

Beginning on January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, paper copies of the Wells Fargo Funds’ annual and semi-annual shareholder reports issued after this date will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-222-8222 or by enrolling at wellsfargo.com/advantagedelivery.

You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call 1-800-222-8222. Your election to receive reports in paper will apply to all Wells Fargo Funds held in your account with your financial intermediary or, if you are a direct investor, to all Wells Fargo Funds that you hold.


 

 

Reduce clutter.

Save trees.

Sign up for

electronic delivery

of prospectuses

and shareholder

reports at

wellsfargo.com/

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The views expressed and any forward-looking statements are as of December 31, 2019, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Asset Management. Discussions of individual securities, or the markets generally, or any Wells Fargo Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Asset Management and the Fund disclaim any obligation to publicly update or revise any views expressed or forward-looking statements.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE    MAY LOSE VALUE


 

 

 

Wells Fargo High Yield Municipal Bond Fund  |  1


Letter to shareholders (unaudited)

 

LOGO

Andrew Owen

President

Wells Fargo Funds

After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July.

Dear Shareholder:

We are pleased to offer you this semi-annual report for the Wells Fargo High Yield Municipal Bond Fund for the six-month period that ended December 31, 2019. Despite periods of market volatility, the year was strongly positive for financial markets as supportive central banks more than offset concerns over slowing global economic growth and international trade tensions.

Overall, both fixed-income and equity investors enjoyed healthy returns. For the period, U.S. stocks, based on the S&P 500 Index,1 gained 10.92% and international stocks, as measured by the MSCI ACWI ex USA Index (Net),2 returned 6.96%. The MSCI EM Index (Net)3 gained 7.09%. For bond investors, the Bloomberg Barclays U.S. Aggregate Bond Index4 added 2.45%, the Bloomberg Barclays Global Aggregate ex-USD Index5 returned 0.09%, the Bloomberg Barclays Municipal Bond Index6 gained 2.32%, and the ICE BofA U.S. High Yield Index7 added 3.86%.

Sentiment turned positive, driven by central bank support.

After periods of volatility, investors regrouped midway through the year, sentiment turned positive, and U.S. equity markets advanced in July. The gains, primarily driven by geopolitical and monetary policy events, pushed equity markets to new highs. European Central Bank President Mario Draghi indicated the bank was ready to cut rates or buy more assets to prop up inflation if needed. President Trump backed off of tariff threats against Mexico and China. The U.S. Federal Reserve (Fed) implemented a 0.25% federal funds rate cut in July.

Throughout the summer, U.S.-China trade tensions simmered. Major U.S. stock market indices closed July with the worst weekly results of the year. Bond prices gained as Treasury yields fell to multiyear lows, and the yield curve inverted at multiple points along the 30-year arc.

Evidence of a continued global economic slowdown mounted, and central banks in China, New Zealand, and Thailand cut interest rates. Industrial and manufacturing data declined in China, Canada, Japan, and Germany. Adding to global uncertainty, Italy’s prime minister resigned, many feared a crackdown in Hong Kong as protestors sustained their calls for reform, and Boris Johnson planned to suspend Parliament as Brexit’s deadline neared.

In the U.S., the Fed cut interest rates a second time in September. U.S. manufacturing data disappointed investors. The U.S. Congress announced it would pursue an impeachment investigation of President Trump. Meanwhile, the Brexit impasse showed no signs of resolution. Officials in China warned of the negative economic impact of tariffs and trade restrictions. Although the S&P 500 Index finished the third quarter with the best year-to-date returns in more than 20 years, concerns about future returns remained.

 

 

 

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 Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the United States. 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. You cannot invest directly in an index.

 

3 

The MSCI Emerging Markets (EM) Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. You cannot invest directly in an index.

 

4 

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index.

 

5 

The Bloomberg Barclays Global Aggregate ex-USD Index is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S. dollar-denominated debt market. You cannot invest directly in an index.

 

6 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

7 

The ICE BofA U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2020. ICE Data Indices, LLC. All rights reserved.

 

 

2  |  Wells Fargo High Yield Municipal Bond Fund


Letter to shareholders (unaudited)

 

The fourth quarter started on a strong note, with a relaxing of U.S.-China trade tensions in October along with renewed optimism for a U.K. Brexit deal and positive macroeconomic data. The initial estimate of U.S. third-quarter gross domestic product growth was a 1.9% annualized rate, while the U.S. unemployment rate fell to a 50-year low of 3.5% in September. However, despite resilience among U.S. consumers, business confidence declined while manufacturing activity contracted. Concerned with a potential economic slowdown, the Fed lowered interest rates another quarter point in late October, its third rate cut in four months. This helped push the S&P 500 Index to a new all-time high, while emerging market equities rallied and global bonds declined overall, reflecting a broad pickup in risk appetite.

Equity markets continued to rally in November despite ongoing geopolitical risks. Hopes for a U.S.-China trade deal buoyed investor confidence. U.S. business sentiment improved slightly, and manufacturing and services activity picked up. Throughout the month, central bank actions were on hold. With that positive backdrop, developed market equities outpaced those in emerging markets, and U.S. stocks outperformed non-U.S. stocks overall. While consumer confidence and purchasing manager activity rose in the eurozone, China reported weakening manufacturing and consumer data. Bond yields rose marginally, leading to slightly negative returns for global government and investment-grade corporate bonds.

Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal, with some details to be worked out. That, along with the landslide election win by the pro-Brexit U.K. Conservative Party and ongoing central bank support, gave investors a greater sense of certainty. U.S. economic indicators were broadly positive, with the exception of manufacturing activity and business confidence. Consumer confidence was resilient, fed by a robust labor market, tame inflation, and lower interest rates, which boosted housing affordability and homebuyer activity. The impeachment of U.S. President Donald Trump, while historically noteworthy, had little impact on markets. Meanwhile, slowing Chinese economic activity, due in part to the trade war, led to further government stimulus at year-end through lower reserve ratios, allowing banks to lend more money.

Don’t let short-term uncertainty derail long-term investment goals.

Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.

Thank you for choosing to invest with Wells Fargo Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.

Sincerely,

 

LOGO

Andrew Owen

President

Wells Fargo Funds

 

Financial markets ended the year on a strong note, with the U.S. and China reaching a Phase One trade deal

 

 

For further information about your Fund, contact your investment professional, visit our website at wfam.com,

or call us directly at 1-800-222-8222.

 

 

 

Wells Fargo High Yield Municipal Bond Fund  |  3


Performance highlights (unaudited)

 

Investment objective

The Fund seeks high current income exempt from federal income tax, and capital appreciation.

Manager

Wells Fargo Funds Management, LLC

Subadviser

Wells Capital Management Incorporated

Portfolio managers

Dennis Derby

Terry J. Goode

Average annual total returns (%) as of December 31, 2019

 

 
        Including sales charge     Excluding sales charge     Expense ratios1 (%)  
 
    Inception date   1 year     5 year    

Since

Inception

    1 year     5 year     Since
Inception
    Gross     Net2  
                   
Class A (WHYMX)   1-31-2013     4.33       4.11       4.87       9.27       5.06       5.57       1.09       0.80  
                   
Class C (WHYCX)   1-31-2013     7.46       4.28       4.78       8.46       4.28       4.78       1.84       1.55  
                   
Class R6 (EKHRX)3   7-31-2018                       9.60       5.34       5.84       0.71       0.50  
                   
Administrator Class (WHYDX)   1-31-2013                       9.38       5.17       5.67       1.03       0.70  
                   
Institutional Class (WHYIX)   1-31-2013                       9.54       5.32       5.83       0.76       0.55  
                   
High Yield Municipal Bond Blended Index4                         9.41       4.97       4.47            
                   
Bloomberg Barclays High Yield Municipal Bond Index5                         10.68       5.93       5.18            
                   
Bloomberg Barclays Municipal Bond Index6                         7.54       3.53       3.38            

 

*

Based on the inception date of the oldest Fund class.

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, wfam.com.

Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.

For Class A shares, the maximum front-end sales charge is 4.50%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Class R6, Administrator Class, and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.

Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. High-yield securities have a greater risk of default and tend to be more volatile than higher-rated debt securities. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). The Fund is exposed to municipal securities risk. Consult the Fund’s prospectus for additional information on these and other risks. A portion of the Fund’s income may be subject to federal, state, and/or local income taxes or the Alternative Minimum Tax (AMT). Any capital gains distributions may be taxable.

 

Please see footnotes on page 5.

 

 

4  |  Wells Fargo High Yield Municipal Bond Fund


Performance highlights (unaudited)

 

Effective maturity distribution as of December 31, 20197
LOGO

 

Credit quality as of December 31, 20198
LOGO
 

 

 

1

Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report.

 

2 

The manager has contractually committed through October 31, 2020, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.80% for Class A, 1.55% for Class C, 0.50% for Class R6, 0.70% for Administrator Class, and 0.55% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Without this cap, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses.

 

3 

Historical performance shown for Class R6 shares prior to their inception reflects the performance of the Institutional Class shares, and includes the higher expenses applicable to Institutional Class shares.

 

4 

Source: Wells Fargo Funds Management LLC. The High Yield Municipal Bond Blended Index is weighted 60% in the Bloomberg Barclays High Yield Municipal Bond Index and 40% in the Bloomberg Barclays Municipal Bond Index. Effective November 1, 2019, the Fund’s benchmark changed from Bloomberg Barclays Municipal Bond Index to the High Yield Municipal Bond Blended Index to better match the Fund’s investment strategy. You cannot invest directly in an index.

 

5 

The Bloomberg Barclays High Yield Municipal Bond Index measures the non-investment-grade and nonrated U.S. dollar–denominated, fixed-rate, tax-exempt bond market within the 50 United States and four other qualifying regions (Washington, D.C.; Puerto Rico; Guam; and the Virgin Islands). The index allows state and local general obligation, revenue, insured, and prefunded bonds; however, historically the index has been composed of mostly revenue bonds. You cannot invest directly in an index.

 

6 

The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

 

7 

Amounts are calculated based on the long-term total investments of the Fund. These amounts are subject to change and may have changed since the date specified.

 

8 

The credit quality distribution of portfolio holdings reflected in the chart is based on ratings from Standard & Poor’s, Moody’s Investors Service, and/ or Fitch Ratings Ltd. Credit quality ratings apply to the underlying holdings of the Fund and not to the Fund itself. The percentages of the Fund’s portfolio with the ratings depicted in the chart are calculated based on the total market value of fixed income securities held by the Fund. If a security was rated by all three rating agencies, the middle rating was utilized. If rated by two of three rating agencies, the lower rating was utilized, and if rated by one of the rating agencies, that rating was utilized. Standard & Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories. Standard & Poor’s rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody’s rates the creditworthiness of bonds, ranging from Aaa (highest) to C (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Moody’s rates the creditworthiness of short-term U.S. tax-exempt municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Credit quality distribution is subject to change and may have changed since the date specified.

 

 

Wells Fargo High Yield Municipal Bond Fund  |  5


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 and contingent deferred sales charges (if any) on redemptions and (2) ongoing costs, including management fees, distribution (12b-1) and/or shareholder servicing 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 period from July 1, 2019 to December 31, 2019.

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) and contingent deferred sales charges. 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
account  value
7-1-2019
     Ending
account value
12-31-2019
     Expenses
paid during
the period¹
     Annualized net
expense ratio
 
         

Class A

           

Actual

   $ 1,000.00      $ 1,031.85      $ 4.09        0.80

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,021.11      $ 4.06        0.80
         

Class C

           

Actual

   $ 1,000.00      $ 1,027.98      $ 7.90        1.55

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,017.34      $ 7.86        1.55
         

Class R6

           

Actual

   $ 1,000.00      $ 1,032.47      $ 2.55        0.50

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.62      $ 2.54        0.50
         

Administrator Class

           

Actual

   $ 1,000.00      $ 1,031.42      $ 3.57        0.70

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,021.62      $ 3.56        0.70
         

Institutional Class

           

Actual

   $ 1,000.00      $ 1,033.14      $ 2.81        0.55

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.37      $ 2.80        0.55

 

1 

Expenses paid is equal to the annualized net expense ratio of each class 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).

 

 

6  |  Wells Fargo High Yield Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Municipal Obligations: 98.09%

         

Alabama: 1.97%

         
Industrial Development Revenue: 1.40%                          

Tuscaloosa County AL IDA Gulf Opportunity Zone Hunt Refining Company Refunding Bond Series A 144A

    5.25     5-1-2044      $ 1,500,000      $ 1,724,040  
         

 

 

 
Water & Sewer Revenue: 0.57%                          

Jefferson County AL Warrants CAB Senior Lien Series B (AGM Insured) ¤

    0.00       10-1-2027        920,000        702,254  
         

 

 

 
            2,426,294  
         

 

 

 

Arizona: 3.58%

         
Education Revenue: 1.45%                          

Florence AZ IDA Legacy Traditional School Project Queen Creek & Casa Grande Campuses

    5.00       7-1-2023        205,000        214,405  

Phoenix AZ IDA Great Hearts Academies Project

    5.20       7-1-2022        85,000        88,707  

Phoenix AZ IDA Legacy Traditional Schools Project Series A 144A

    6.50       7-1-2034        500,000        576,705  

Pima County AZ IDA Desert Heights Charter School Facility Refunding Bond

    6.00       5-1-2024        395,000        416,298  

Pima County AZ IDA New Plan Learning Project Series A

    8.13       7-1-2041        495,000        489,550  
            1,785,665  
         

 

 

 
Health Revenue: 2.13%                          

Maricopa County AZ IDA Senior Living Facility Series 2016 144A

    6.00       1-1-2048        1,000,000        1,047,000  

Tempe AZ IDA Mirabella at ASU Incorporated Project Series A 144A

    6.13       10-1-2052        1,400,000        1,589,364  
            2,636,364  
         

 

 

 
            4,422,029  
         

 

 

 

California: 5.75%

         
Education Revenue: 0.23%                          

California Municipal Finance Authority Charter School Albert Einstein Academies Project Series A

    7.13       8-1-2043        250,000        282,373  
         

 

 

 
Health Revenue: 0.90%                          

California Statewide CDA Loma Linda University Medical Center Refunding Bond Series A

    5.25       12-1-2044        1,000,000        1,103,310  
         

 

 

 
Housing Revenue: 0.90%                          

California Community Housing Agency Workforce Apartments Series A 144A

    5.00       4-1-2049        1,000,000        1,110,060  
         

 

 

 
Industrial Development Revenue: 0.82%                          

California PCFA Solid Waste Disposal AMT Green Bond Calplant I Project 144A

    8.00       7-1-2039        1,000,000        1,007,750  
         

 

 

 
Miscellaneous Revenue: 1.79%                          

Anaheim CA PFA Convention Center Expansion Project Series A

    5.00       5-1-2046        500,000        565,990  

Compton CA PFA Refunding Bond 144A

    4.50       9-1-2032        1,585,000        1,644,263  
            2,210,253  
         

 

 

 
Resource Recovery Revenue: 0.42%                          

California PCFA AMT Rialto Bioenergy Facility LLC 144A

    7.50       12-1-2040        500,000        520,690  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo High Yield Municipal Bond Fund  |  7


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Tax Revenue: 0.69%                          

Compton CA Community College RDA Project 2nd Lien Series A

    5.00     8-1-2020      $ 100,000      $ 101,882  

San Francisco City & County CA RDA CAB Mission Bay South Redevelopment Project Subordinate Bond Series D 144A¤

    0.00       8-1-2026        1,000,000        752,270  
            854,152  
         

 

 

 
            7,088,588  
         

 

 

 

Colorado: 11.37%

         
GO Revenue: 9.21%                          

Arapahoe County CO Copperleaf Metropolitan District #2

    5.75       12-1-2045        500,000        522,245  

Aurora CO Cornerstar Metropolitan District Refunding Bond Series A

    5.25       12-1-2047        1,000,000        1,057,870  

Brighton CO Crossing Metropolitan District #4 Series A

    5.00       12-1-2047        1,220,000        1,289,955  

Colorado Aviation Station North Metropolitan District #2 Refunding & Improvement Bonds Limited Tax Series A

    5.00       12-1-2048        500,000        530,655  

Colorado Big Dry Creek Metropolitan District Refunding & Improvement Bonds Limited Tax Series A

    5.75       12-1-2047        1,000,000        1,055,180  

Colorado Broadway Station Metropolitan District #2 Senior Series A

    5.13       12-1-2048        500,000        534,905  

Colorado Copperleaf Metropolitan District #3 Series A

    5.13       12-1-2047        1,200,000        1,254,972  

Colorado Cottonwood Highlands Metropolitan District #1 Limited Tax Series A

    5.00       12-1-2049        900,000        956,610  

Colorado Stc Metropolitan District # 2 Refunding & Improvement Bonds Senior Limited Tax Special Revenue

    5.00       12-1-2049        500,000        535,665  

Colorado Whispering Pines Metropolitan District #1 Series A

    5.00       12-1-2047        1,000,000        1,049,280  

Denver CO International Business Center Metropolitan District #1 Series B

    6.00       12-1-2048        1,145,000        1,200,819  

Eaton CO Area Park & Recreation District

    5.00       12-1-2023        810,000        863,914  

Eaton CO Area Park & Recreation District

    5.50       12-1-2030        475,000        507,443  
            11,359,513  
         

 

 

 
Tax Revenue: 1.72%                          

Colorado Centerra Metropolitan District #1 Special Revenue Refunding & Improvement Bonds 144A

    5.00       12-1-2029        1,000,000        1,076,980  

Pueblo CO Urban Renewal Authority Regional Tourism Act Project

    5.00       6-1-2036        1,000,000        1,046,210  
            2,123,190  
         

 

 

 
Transportation Revenue: 0.44%                          

Colorado High Performance Transportation Enterprise U.S. 36 & I-25 Managed Lanes

    5.75       1-1-2044        500,000        541,035  
         

 

 

 
            14,023,738  
         

 

 

 

Connecticut: 0.52%

         
GO Revenue: 0.52%                          

Hartford CT Series A

    4.00       4-1-2032        325,000        345,134  

Hartford CT Series A

    5.00       4-1-2024        105,000        117,103  

Hartford CT Series B

    5.00       4-1-2033        50,000        54,806  

Hartford CT Unrefunded Bond Series A

    5.00       4-1-2029        45,000        48,278  

Hartford CT Unrefunded Bond Series A

    5.00       4-1-2030        70,000        74,983  
            640,304  
         

 

 

 

Delaware: 0.88%

         
Education Revenue: 0.88%                          

Delaware EDA Odyssey Charter School Incorporated Project Series A 144A

    7.00       9-1-2045        1,000,000        1,081,410  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

8  |  Wells Fargo High Yield Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

District of Columbia: 0.36%

         
Tobacco Revenue: 0.36%                          

District of Columbia Tobacco Settlement Financing Corporation

    6.75     5-15-2040      $ 435,000      $ 449,786  
         

 

 

 

Florida: 3.75%

         
Education Revenue: 2.79%                          

Florida Capital Trust Agency Educational Facilities Pineapple Cove Classical Academy Incorporated Project Series A 144A

    5.13       7-1-2039        2,000,000        2,097,811  

Florida Development Finance Corporation Educational Facilities Renaissance Charter School Project Series A

    8.50       6-15-2044        250,000        288,395  

Miami-Dade County FL IDA Youth Co-Op Charter Schools Project Series A 144A

    6.00       9-15-2045        1,000,000        1,048,480  
            3,434,686  
         

 

 

 
Health Revenue: 0.19%                          

Holmes County FL Hospital Corporation Doctors Memorial Hospital Project

    6.00       11-1-2038        250,000        237,500  
         

 

 

 
Transportation Revenue: 0.77%                          

Florida Development Finance Corporation Surface Virgin Trains USA Passenger Rail Project Series 2019-A 144A

    6.50       1-1-2049        1,000,000        951,480  
         

 

 

 
            4,623,666  
         

 

 

 

Georgia: 1.39%

         
Housing Revenue: 0.72%                          

Cobb County GA Development Authority Student Housing Kennesaw State University Foundation Project Refunding Bond Series C

    5.00       7-15-2028        800,000        891,088  
         

 

 

 
Transportation Revenue: 0.67%                          

Georgia Road & Tollway Authority CCAB I-75 South Expressway Lanes Project Series B 144A

    7.00       6-1-2049        1,000,000        828,820  
         

 

 

 
            1,719,908  
         

 

 

 

Guam: 0.24%

         
Airport Revenue: 0.24%                          

Guam International Airport Authority Series C

    6.38       10-1-2043        260,000        298,925  
         

 

 

 

Idaho: 0.21%

         
Education Revenue: 0.21%                          

Idaho Housing & Finance Association Legacy Public Charter School Incorporated Project Series A

    6.25       5-1-2043        250,000        262,418  
         

 

 

 

Illinois: 16.44%

         
Airport Revenue: 1.04%                          

Chicago IL Midway Airport Second Lien Refunding Bond Series A

    5.00       1-1-2031        1,000,000        1,124,050  

Chicago IL O’Hare International Airport Revenue Bond Series B

    6.00       1-1-2041        150,000        157,235  
            1,281,285  
         

 

 

 
Education Revenue: 1.21%                          

Illinois Finance Authority Charter School Aid Intrinsic Schools Belmont School Project Series A 144A

    5.25       12-1-2025        800,000        849,552  

Illinois Finance Authority Charter Schools Refunding & Improvement Bonds Series A

    6.88       10-1-2031        610,000        647,912  
            1,497,464  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo High Yield Municipal Bond Fund  |  9


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
GO Revenue: 6.75%                          

Chicago IL Board of Education CAB School Reform Series A (National Insured) ¤

    0.00 %       12-1-2025      $ 500,000      $ 433,260  

Chicago IL Neighborhoods Alive 21 Program Series B

    5.50       1-1-2032        700,000        795,228  

Chicago IL Series A

    5.00       1-1-2033        310,000        324,713  

Chicago IL Series A

    6.00       1-1-2038        1,500,000        1,800,630  

Cook County IL School District #144 Prairie Hills CAB Refunding Bond Series C (AGM Insured) ¤

    0.00       12-1-2025        730,000        646,765  

Illinois

    5.00       3-1-2033        2,000,000        2,097,320  

Lake County IL Community Unit School District #187 North Chicago Series A (AGM Insured) ¤

    0.00       1-1-2023        590,000        550,104  

Will County IL Lincoln-Way Community High School District #210 CAB Series B ¤

    0.00       1-1-2027        685,000        570,441  

Will County IL Lincoln-Way Community High School District #210 CAB Series B ¤

    0.00       1-1-2033        1,000,000        659,330  

Will County IL Lincoln-Way Community High School District #210 Series A

    3.25       1-1-2030        450,000        449,906  
            8,327,697  
         

 

 

 
Miscellaneous Revenue: 2.25%                          

Chicago IL Certificate of Participation River Point Plaza Redevelopment Project Series A 144A

    4.84       4-15-2028        2,000,000        2,028,940  

Illinois Finance Authority Educational Facility Senior Rogers Park Montessori School

    6.00       2-1-2034        680,000        743,519  
            2,772,459  
         

 

 

 
Tax Revenue: 5.19%                          

Chicago IL Sales Tax

    5.00       1-1-2032        1,500,000        1,773,120  

Chicago IL Sales Tax Series A

    5.00       1-1-2041        1,000,000        1,075,700  

Hillside IL Tax Increment Refunding Bond

    5.00       1-1-2030        1,345,000        1,434,806  

Illinois Sports Facilities Authority State Tax Supported CAB (Ambac Insured) ¤

    0.00       6-15-2025        1,140,000        1,001,479  

Metropolitan Pier & Exposition Authority McCormick Place Expansion Project Series A

    5.00       6-15-2057        1,000,000        1,113,720  
            6,398,825  
         

 

 

 
            20,277,730  
         

 

 

 

Iowa: 1.45%

         
Health Revenue: 1.45%                          

Iowa Finance Authority Senior Housing Northcrest Incorporated Project Series A

    5.00       3-1-2028        1,615,000        1,794,023  
         

 

 

 

Kansas: 2.49%

         
Health Revenue: 0.88%                          

Kansas State Development Finance Authority Revenue Bond Series A

    5.25       11-15-2033        1,000,000        1,083,680  
         

 

 

 
Tax Revenue: 1.61%                          

Wyandotte County & Kansas City KS Special Obligation Refunding & Improvement Bonds Plaza Redevelopment Project

    4.00       12-1-2028        725,000        748,816  

Wyandotte County & Kansas City KS Special Obligation Vacation Village Project Area 4 Major Multi-Sport Athletic Complex Project CAB Series 2015 144A¤

    0.00       9-1-2034        2,935,000        1,243,442  
            1,992,258  
         

 

 

 
            3,075,938  
         

 

 

 

Kentucky: 0.88%

         
Health Revenue: 0.88%                          

Kentucky EDFA Rosedale Green Project Refunding Bond

    5.50       11-15-2035        1,000,000        1,086,410  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

10  |  Wells Fargo High Yield Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Maryland: 0.88%

         
Education Revenue: 0.88%                          

Prince George’s County MD Chesapeake Lighthouse Charter School Project Series 2016-A 144A

    6.90 %       8-1-2041      $ 1,000,000      $ 1,088,620  
         

 

 

 

Michigan: 5.89%

         
Education Revenue: 0.61%                          

Michigan Finance Authority Limited Obligation Public School Academy Cesar Chavez Academy Project

    5.00       2-1-2022        105,000        106,364  

Michigan Public Educational Facilities Authority Limited Obligation Bradford Academy Project 144A

    6.50       9-1-2037        185,000        144,300  

Michigan Public Educational Facilities Authority Limited Obligation Crescent Academy Project

    7.00       10-1-2036        292,500        292,822  

Oakland County MI Economic Development Corporation The Academy of The Sacred Heart Project Series A

    6.50       12-15-2036        235,000        211,500  
            754,986  
         

 

 

 
GO Revenue: 0.70%                          

Wayne County MI Building Improvement Series A

    6.75       11-1-2039        860,000        861,376  
         

 

 

 
Miscellaneous Revenue: 2.04%                          

Charyl Stockwell Academy Michigan Public School Refunding Bond

    4.88       10-1-2023        270,000        275,206  

Michigan Finance Authority Local Government Loan Program City of Detroit Financial Recovery Refunding Bond Series F

    4.50       10-1-2029        1,000,000        1,083,120  

Michigan Municipal Bond Authority Local Government Loan Program Series C (Ambac Insured)

    4.75       5-1-2027        950,000        950,580  

Michigan Public Educational Facilities Authority Chandler Park Academy

    6.35       11-1-2028        210,000        210,428  
            2,519,334  
         

 

 

 
Tax Revenue: 1.62%                          

Detroit MI Downtown Development Authority CAB ¤

    0.00       7-1-2020        285,000        279,690  

Detroit MI Downtown Development Authority CAB ¤

    0.00       7-1-2021        170,000        160,230  

Detroit MI Downtown Development Authority CAB ¤

    0.00       7-1-2024        20,000        16,374  

Detroit MI Downtown Development Authority CAB ¤

    0.00       7-1-2025        580,000        451,513  

Michigan Finance Authority Local Government Loan Program Public Lighting Authority Refunding Bond Series B

    5.00       7-1-2044        1,000,000        1,094,750  
            2,002,557  
         

 

 

 
Water & Sewer Revenue: 0.92%                          

Michigan Finance Authority Local Government Loan Program Detroit Refunding Bond Series D-6 (National Insured)

    5.00       7-1-2036        1,000,000        1,129,470  
         

 

 

 
            7,267,723  
         

 

 

 

Minnesota: 1.52%

         
Education Revenue: 0.45%                          

Deephaven MN Charter School Eagle Ridge Academy Project Series 2015-A

    4.40       7-1-2025        125,000        131,174  

Deephaven MN Charter School Eagle Ridge Academy Project Series 2015-A

    5.00       7-1-2030        195,000        212,967  

Deephaven MN Charter School Eagle Ridge Academy Project Series 2015-A

    5.25       7-1-2037        190,000        206,587  
            550,728  
         

 

 

 
Health Revenue: 0.43%                          

Shakopee MN Senior Housing Revenue Benedictine Living Community LLC Project 144A

    5.85       11-1-2058        500,000        532,110  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo High Yield Municipal Bond Fund  |  11


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  
Housing Revenue: 0.64%                          

Minneapolis MN Student Housing Riverton Community Housing Project Refunding Bond

    4.70 %       8-1-2026      $ 335,000      $ 359,629  

Minneapolis MN Student Housing Riverton Community Housing Project Refunding Bond

    4.80       8-1-2027        400,000        430,220  
            789,849  
         

 

 

 
            1,872,687  
         

 

 

 

Mississippi: 1.30%

         
Resource Recovery Revenue: 1.30%                          

Mississippi Business Finance Corporation AMT Waste Pro USA Incorporated Project 144A

    5.00       2-1-2036        1,500,000        1,598,445  
         

 

 

 

Missouri: 1.11%

         
Tax Revenue: 1.11%                          

Blue Springs MO Special Obligation Tax Refunding & Improvement Bonds Adams Farm Project Series A

    4.00       6-1-2026        445,000        454,011  

Richmond Heights MO Francis Place Redevelopment Project

    5.63       11-1-2025        910,000        910,501  
            1,364,512  
         

 

 

 

Nevada: 1.41%

         
Industrial Development Revenue: 1.41%                          

Director of the State of Nevada Department of Business & Industry AMT Fulcrum Sierra Biofuels LLC Project 144A

    6.25       12-15-2037        1,500,000        1,738,605  
         

 

 

 

New Jersey: 3.70%

         
GO Revenue: 0.89%                          

Newark NJ Qualified General Improvement Series A

    5.00       7-15-2027        1,000,000        1,101,280  
         

 

 

 
Industrial Development Revenue: 0.22%                          

New Jersey EDA Continental Airlines Incorporated Project

    5.25       9-15-2029        250,000        272,133  
         

 

 

 
Miscellaneous Revenue: 0.17%                          

Essex County NJ Improvement Authority Lease Newark Project Series A

    6.25       11-1-2030        200,000        208,274  
         

 

 

 
Transportation Revenue: 2.42%                          

New Jersey TTFA CAB Series A ¤

    0.00       12-15-2031        1,000,000        705,240  

New Jersey TTFA Series C

    5.25       6-15-2032        2,000,000        2,275,880  
            2,981,120  
         

 

 

 
            4,562,807  
         

 

 

 

New York: 2.33%

         
Education Revenue: 0.83%                          

Hempstead Town NY Local Development Corporation The Academy Charter School Project Series A

    7.65       2-1-2044        995,000        1,029,258  
         

 

 

 
Health Revenue: 1.33%                          

Monroe County NY Industrial Development Corporation Revenue St. Anns Community Project

    5.00       1-1-2040        1,500,000        1,645,230  
         

 

 

 
Utilities Revenue: 0.17%                          

Green Island NY Power Authority Power System

    6.00       12-15-2020        200,000        203,208  
         

 

 

 
            2,877,696  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

12  |  Wells Fargo High Yield Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Oklahoma: 0.48%

         
Health Revenue: 0.48%                          

Oklahoma Development Finance Authority Oklahoma University Medicine Project Series B

    5.50 %       8-15-2057      $ 500,000      $ 591,845  
         

 

 

 

Oregon: 0.48%

         
Health Revenue: 0.48%                          

Polk County OR Hospital Facility Authority Revenue Bond Dallas Retirement Village Project Series 2015-A

    5.00       7-1-2025        550,000        587,791  
         

 

 

 

Pennsylvania: 6.33%

         
Education Revenue: 2.64%                          

Allegheny County PA IDA Propel Charter School Sunrise Project

    5.25       7-15-2023        95,000        98,619  

East Hempfield Township PA IDA Student Services Incorporated Student Housing Project of Millersville University

    5.00       7-1-2029        500,000        554,255  

Montgomery County PA Higher Education & Health Authority Arcadia University

    5.00       4-1-2026        1,655,000        1,921,736  

Philadelphia PA Authority for Industrial Development Revenues Independence Charter School Project

    5.00       6-15-2039        250,000        265,190  

Philadelphia PA IDA Tacony Academy Charter School Project

    6.88       6-15-2033        375,000        415,658  
            3,255,458  
         

 

 

 
Health Revenue: 0.82%                          

Quakertown PA General Authority Health LifeQuest Obligated Group Refunding Bond Series C

    5.30       7-1-2042        1,000,000        1,012,320  
         

 

 

 
Industrial Development Revenue: 1.08%                          

Pennsylvania EDFA Carbonlite P LLC Project 144A

    5.75       6-1-2036        1,250,000        1,331,225  
         

 

 

 
Miscellaneous Revenue: 1.79%                          

Chester County PA IDA Woodlands at Graystone Project Series 2018 144A

    5.13       3-1-2048        1,050,000        1,116,465  

Philadelphia PA State Public School Building Authority School District Project

    5.00       4-1-2031        1,000,000        1,086,210  
            2,202,675  
         

 

 

 
            7,801,678  
         

 

 

 

Puerto Rico: 0.86%

         
Tax Revenue: 0.86%                          

Puerto Rico Sales Tax Financing Corporation Series A-1

    5.00       7-1-2058        1,000,000        1,061,030  
         

 

 

 

South Carolina: 2.36%

         
Education Revenue: 0.54%                          

South Carolina Jobs EDA York Preparatory Academy Project Series A

    5.75       11-1-2023        105,000        109,092  

South Carolina Jobs EDA York Preparatory Academy Project Series A

    7.25       11-1-2045        500,000        552,640  
            661,732  
         

 

 

 
Health Revenue: 0.88%                          

South Carolina Jobs EDA Residential Facilities Revenue Episcopal Home Still Hopes Refunding Bond Series A

    5.00       4-1-2048        1,000,000        1,082,040  
         

 

 

 
Resource Recovery Revenue: 0.94%                          

South Carolina Jobs EDA Solid Waste Disposal AMT RePower South Berkeley LLC Project Green Bond 144A

    6.25       2-1-2045        1,000,000        1,066,580  

South Carolina State Economic Development Jobs

    6.00       2-1-2020        100,000        99,989  
            1,166,569  
         

 

 

 
            2,910,341  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo High Yield Municipal Bond Fund  |  13


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Tennessee: 1.33%

         
Tax Revenue: 1.33%                          

Bristol TN Industrial Development Board Sales Tax CAB Series B 144A¤

    0.00 %       12-1-2031      $ 2,000,000      $ 1,080,520  

Nashville TN Metropolitan Development & Housing Agency Tax Increment Fifth & Broadway Development Project 144A

    5.13       6-1-2036        500,000        558,740  
            1,639,260  
         

 

 

 

Texas: 7.73%

         
Education Revenue: 1.14%                          

Arlington TX Higher Education Finance Corporation Universal Academy Series A

    7.00       3-1-2034        320,000        352,573  

Pottsboro TX Higher Education Finance Corporation Imagine International Academy of North Texas Series A

    3.88       8-15-2026        1,015,000        1,057,995  
            1,410,568  
         

 

 

 
GO Revenue: 0.87%                          

Port Isabel TX 144A

    5.10       2-15-2049        1,000,000        1,078,440  
         

 

 

 
Health Revenue: 1.56%                          

New Hope TX Cultural Education Facilities Finance Corporation Retirement Facility Presbyterian Village North Project Series 2018

    5.00       10-1-2025        1,730,000        1,922,826  
         

 

 

 
Miscellaneous Revenue: 2.16%                          

Lewisville TX Combination Contract Castle Hills Public Improvement Bonds District #5 144A

    6.50       9-1-2034        865,000        866,678  

Lewisville TX Combination Contract Castle Hills Public Improvement Bonds District #6 144A

    5.50       9-1-2039        500,000        504,775  

Lewisville TX Combination Contract Castle Hills Public Improvement Bonds District #6 144A

    6.00       9-1-2037        1,220,000        1,287,076  
            2,658,529  
         

 

 

 
Resource Recovery Revenue: 1.62%                          

Port Arthur TX Navigation District Jefferson County Environmental Facilities Motiva Enterprises LLC Project Series B ø

    1.70       4-1-2040        2,000,000        2,000,000  
         

 

 

 
Transportation Revenue: 0.19%                          

Texas Private Activity Bond Surface Transportation Corporation Project NTE Mobility Partners Segments LLC

    7.00       12-31-2038        200,000        233,890  
         

 

 

 
Utilities Revenue: 0.19%                          

Texas Gas Supply SA Energy Acquisition Public Facilities Corporation

    5.50       8-1-2027        190,000        234,698  
         

 

 

 
            9,538,951  
         

 

 

 

Utah: 0.81%

         

Education Revenue: 0.81%

         

Utah Finance Authority Charter School Revenue Spectrum Academy Project 144A

    5.00       4-15-2030        1,000,000        1,004,220  
         

 

 

 

Virginia: 1.93%

         

Health Revenue: 0.90%

         

Henrico County VA EDA Residential Care Facilities Pinnacle Living Series A

    5.00       6-1-2049        1,000,000        1,106,070  
         

 

 

 
Miscellaneous Revenue: 1.03%                          

Stafford County & Staunton VA IDA Community Services Boards League/Central Series B

    6.50       8-1-2028        1,270,000        1,271,791  
         

 

 

 
            2,377,861  
         

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

14  |  Wells Fargo High Yield Municipal Bond Fund


Portfolio of investments—December 31, 2019 (unaudited)

 

     Interest
rate
    Maturity
date
     Principal      Value  

Washington: 0.83%

         
Health Revenue: 0.83%                          

Skagit County WA Public Hospital District #1 Skagit Valley Hospital Project

    5.25 %       12-1-2025      $ 250,000      $ 259,145  

Washington Housing Finance Commission Bayview Manor Homes Series A 144A

    4.00       7-1-2026        730,000        763,492  
            1,022,637  
         

 

 

 

West Virginia: 1.35%

         
Tax Revenue: 1.35%                          

Monongalia County WV Commission Refunding & Improvement Bonds University Town Center Series A 144A

    5.75       6-1-2043        1,500,000        1,659,765  
         

 

 

 

Wisconsin: 4.18%

 

Education Revenue: 2.87%  

Wisconsin PFA Charter School Voyager Funding Incorporated Project Series A

    4.13       10-1-2024        175,000        183,262  

Wisconsin PFA Coral Academy Science Las Vegas Series A

    5.00       7-1-2024        370,000        395,068  

Wisconsin PFA Research Triangle High School Project Series 2015-A 144A

    5.63       7-1-2045        1,000,000        1,045,320  

Wisconsin PFA Wilson Preparatory Academy Series A 144A

    4.13       6-15-2029        540,000        562,021  

Wisconsin PFA Wilson Preparatory Academy Series A 144A

    5.00       6-15-2039        1,285,000        1,346,963  
            3,532,634  
         

 

 

 
Health Revenue: 1.31%  

Wisconsin HEFA Wisconsin Illinois Senior Housing Incorporated Series 2018-A

    5.25       8-1-2048        1,500,000        1,620,285  
         

 

 

 
            5,152,919  
         

 

 

 

Total Municipal Obligations (Cost $112,702,430)

 

     120,990,560  
         

 

 

 
  
    Yield            Shares         
Short-Term Investments: 0.29%         
Investment Companies: 0.29%  

Wells Fargo Municipal Cash Management Money Market Fund Institutional
Class (l)(u)

    1.45          351,637        351,777  
         

 

 

 

Total Short-Term Investments (Cost $351,777)

 

     351,777  
         

 

 

 

 

Total investments in securities (Cost $113,054,207)     98.38        121,342,337  

Other assets and liabilities, net

    1.62          1,998,951  
 

 

 

      

 

 

 
Total net assets     100.00      $ 123,341,288  
 

 

 

      

 

 

 

 

 

144A

The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933.

¤

The security is issued in zero coupon form with no periodic interest payments.

ø

Variable rate demand notes are subject to a demand feature which reduces the effective maturity. The maturity date shown represents the final maturity date of the security. The interest rate is determined and reset by the issuer daily, weekly, or monthly depending upon the terms of the security. The rate shown is the rate in effect at period end.

(l)

The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940.

(u)

The rate represents the 7-day annualized yield at period end.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo High Yield Municipal Bond Fund  |  15


Portfolio of investments—December 31, 2019 (unaudited)

 

Abbreviations:

 

AGM

Assured Guaranty Municipal

 

Ambac

Ambac Financial Group Incorporated

 

AMT

Alternative minimum tax

 

CAB

Capital appreciation bond

 

CCAB

Convertible capital appreciation bond

 

CDA

Community Development Authority

 

EDA

Economic Development Authority

 

EDFA

Economic Development Finance Authority

 

GO

General obligation

 

HEFA

Health & Educational Facilities Authority

 

IDA

Industrial Development Authority

 

National

National Public Finance Guarantee Corporation

 

PCFA

Pollution Control Financing Authority

 

PFA

Public Finance Authority

 

RDA

Redevelopment Authority

 

TTFA

Transportation Trust Fund Authority

Investments in Affiliates

An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were either affiliated persons of the Fund at the beginning of the period or the end of the period were as follows:

 

    Shares,
beginning of
period
    Shares
purchased
    Shares
sold
    Shares,
end of
period
    Net
realized
gains
(losses)
    Net
change in
unrealized
gains
(losses)
    Income
from
affiliated
securities
    Value,
end of
period
    % of
net
assets
 
Short-Term Investments                                                      

Investment Companies

                 

Wells Fargo Municipal Cash Management Money Market Fund Institutional Class

    1,932,890       19,095,631       (20,676,884     351,637     $ (486   $ (9   $ 4,847     $ 351,777       0.29

 

The accompanying notes are an integral part of these financial statements.

 

 

16  |  Wells Fargo High Yield Municipal Bond Fund


Statement of assets and liabilities—December 31, 2019 (unaudited)

 

         

Assets

 

Investments in unaffiliated securities, at value (cost $112,702,430)

  $ 120,990,560  

Investments in affiliated securities, at value (cost $351,777)

    351,777  

Receivable for investments sold

    85,549  

Receivable for Fund shares sold

    650,932  

Receivable for interest

    1,587,923  

Prepaid expenses and other assets

    44,804  
 

 

 

 

Total assets

    123,711,545  
 

 

 

 

Liabilities

 

Payable for Fund shares redeemed

    225,181  

Management fee payable

    26,356  

Dividends payable

    32,429  

Administration fees payable

    11,372  

Distribution fee payable

    6,668  

Custody and accounting fees payable

    25,254  

Professional fees payable

    35,141  

Trustees’ fees and expenses payable

    4,235  

Accrued expenses and other liabilities

    3,621  
 

 

 

 

Total liabilities

    370,257  
 

 

 

 

Total net assets

  $ 123,341,288  
 

 

 

 

Net assets consist of

 

Paid-in capital

  $ 114,665,717  

Total distributable earnings

    8,675,571  
 

 

 

 

Total net assets

  $ 123,341,288  
 

 

 

 

Computation of net asset value and offering price per share

 

Net assets – Class A

  $ 25,892,603  

Shares outstanding – Class A1

    2,333,216  

Net asset value per share – Class A

    $11.10  

Maximum offering price per share – Class A2

    $11.62  

Net assets – Class C

  $ 10,255,788  

Shares outstanding – Class C1

    923,996  

Net asset value per share – Class C

    $11.10  

Net assets – Class R6

  $ 26,161  

Shares outstanding – Class R61

    2,356  

Net asset value per share – Class R6

    $11.10  

Net assets – Administrator Class

  $ 14,298,541  

Shares outstanding – Administrator Class1

    1,287,986  

Net asset value per share – Administrator Class

    $11.10  

Net assets – Institutional Class

  $ 72,868,195  

Shares outstanding – Institutional Class1

    6,566,075  

Net asset value per share – Institutional Class

    $11.10  

 

 

1 

The Fund has an unlimited number of authorized shares.

 

2 

Maximum offering price is computed as 100/95.50 of net asset value. On investments of $50,000 or more, the offering price is reduced.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo High Yield Municipal Bond Fund  |  17


Statement of operations—six months ended December 31, 2019 (unaudited)

 

         

Investment income

 

Interest

  $ 3,078,172  

Income from affiliated securities

    4,847  
 

 

 

 

Total investment income

    3,083,019  
 

 

 

 

Expenses

 

Management fee

    328,027  

Administration fees

 

Class A

    20,136  

Class C

    8,197  

Class R6

    4  

Administrator Class

    7,550  

Institutional Class

    32,267  

Shareholder servicing fees

 

Class A

    31,462  

Class C

    12,808  

Administrator Class

    18,877  

Distribution fee

 

Class C

    38,425  

Custody and accounting fees

    8,897  

Professional fees

    26,727  

Registration fees

    53,548  

Shareholder report expenses

    12,375  

Trustees’ fees and expenses

    10,803  

Other fees and expenses

    4,228  
 

 

 

 

Total expenses

    614,331  

Less: Fee waivers and/or expense reimbursements

 

Fund-level

    (159,832
 

 

 

 

Net expenses

    454,499  
 

 

 

 

Net investment income

    2,628,520  
 

 

 

 

Realized and unrealized gains (losses) on investments

 

Net realized gains (losses) on

 

Unaffiliated securities

    825,776  

Affiliated securities

    (486
 

 

 

 

Net realized gains on investments

    825,290  
 

 

 

 

Net change in unrealized gains (losses) on

 

Unaffiliated securities

    697,395  

Affiiliated securities

    (9
 

 

 

 

Net change in unrealized gains (losses) on investments

    697,386  
 

 

 

 

Net realized and unrealized gains (losses) on investments

    1,522,676  
 

 

 

 

Net increase in net assets resulting from operations

  $ 4,151,196  
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

18  |  Wells Fargo High Yield Municipal Bond Fund


Statement of changes in net assets

 

     Six months ended
December 31, 2019
(unaudited)
    Year ended
June 30, 2019
 

Operations

       

Net investment income

    $ 2,628,520       $ 4,885,724  

Net realized gains on investments

      825,290         724,011  

Net change in unrealized gains (losses) on investments

      697,386         3,956,531  
 

 

 

 

Net increase in net assets resulting from operations

      4,151,196         9,566,266  
 

 

 

 

Distributions to shareholders from net investment income and net realized gains

       

Class A

      (491,516       (748,569

Class C

      (161,595       (267,644

Class R6

      (556       (908 )1 

Administrator Class

      (302,178       (717,353

Institutional Class

      (1,672,851       (3,150,417
 

 

 

 

Total distributions to shareholders

      (2,628,696       (4,884,891
 

 

 

 

Capital share transactions

    Shares         Shares    

Proceeds from shares sold

       

Class A

    456,013       5,047,241       891,097       9,469,553  

Class C

    63,850       707,491       326,023       3,467,080  

Class R6

    0       0       2,356 1      25,000 1 

Administrator Class

    106,135       1,175,370       509,916       5,419,801  

Institutional Class

    975,597       10,819,393       3,781,572       40,041,514  
 

 

 

 
      17,749,495         58,422,948  
 

 

 

 

Reinvestment of distributions

       

Class A

    41,862       464,634       66,476       710,565  

Class C

    13,985       155,248       24,085       257,291  

Administrator Class

    19,611       217,748       53,338       568,370  

Institutional Class

    145,775       1,617,919       280,408       2,994,965  
 

 

 

 
      2,455,549         4,531,191  
 

 

 

 

Payment for shares redeemed

       

Class A

    (322,190     (3,578,632     (413,546     (4,406,588

Class C

    (60,924     (675,563     (282,977     (3,004,602

Administrator Class

    (268,482     (2,977,723     (1,457,134     (15,416,580

Institutional Class

    (2,318,693     (25,700,664     (3,433,887     (36,431,467
 

 

 

 
      (32,932,582       (59,259,237
 

 

 

 

Net increase (decrease) in net assets resulting from capital share transactions

      (12,727,538       3,694,902  
 

 

 

 

Total increase (decrease) in net assets

      (11,205,038       8,376,277  
 

 

 

 

Net assets

       

Beginning of period

      134,546,326         126,170,049  
 

 

 

 

End of period

    $ 123,341,288       $ 134,546,326  
 

 

 

 

 

 

1 

For the period from July 31, 2018 (commencement of class operations) to June 30, 2019

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo High Yield Municipal Bond Fund  |  19


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS A   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $10.97       $10.59       $10.37       $10.91       $10.34       $10.25  

Net investment income

    0.22       0.39       0.40       0.37       0.35       0.34  

Net realized and unrealized gains (losses) on investments

    0.13       0.38       0.22       (0.46     0.60       0.18  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.35       0.77       0.62       (0.09     0.95       0.52  

Distributions to shareholders from

           

Net investment income

    (0.22     (0.39     (0.40     (0.37     (0.35     (0.34

Net realized gains

    0.00       0.00       0.00       (0.08     (0.03     (0.09
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.22     (0.39     (0.40     (0.45     (0.38     (0.43

Net asset value, end of period

    $11.10       $10.97       $10.59       $10.37       $10.91       $10.34  

Total return1

    3.19     7.43     6.11     (0.76 )%      9.44     5.06

Ratios to average net assets (annualized)

           

Gross expenses

    1.09     1.09     1.07     1.06     1.07     1.07

Net expenses

    0.80     0.80     0.85     0.85     0.85     0.85

Net investment income

    3.91     3.68     3.82     3.51     3.28     3.26

Supplemental data

           

Portfolio turnover rate

    4     20     50     82     61     61

Net assets, end of period (000s omitted)

    $25,893       $23,674       $17,086       $20,305       $38,018       $21,100  

 

1 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

20  |  Wells Fargo High Yield Municipal Bond Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
CLASS C   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $10.97       $10.59       $10.37       $10.91       $10.34       $10.25  

Net investment income

    0.18       0.31       0.32       0.29       0.27       0.26  

Net realized and unrealized gains (losses) on investments

    0.13       0.38       0.22       (0.46     0.60       0.18  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.31       0.69       0.54       (0.17     0.87       0.44  

Distributions to shareholders from

           

Net investment income

    (0.18     (0.31     (0.32     (0.29     (0.27     (0.26

Net realized gains

    0.00       0.00       0.00       (0.08     (0.03     (0.09
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.18     (0.31     (0.32     (0.37     (0.30     (0.35

Net asset value, end of period

    $11.10       $10.97       $10.59       $10.37       $10.91       $10.34  

Total return1

    2.80     6.63     5.32     (1.50 )%      8.62     4.28

Ratios to average net assets (annualized)

           

Gross expenses

    1.84     1.84     1.82     1.81     1.82     1.82

Net expenses

    1.55     1.55     1.60     1.60     1.60     1.60

Net investment income

    3.15     2.91     3.09     2.79     2.49     2.50

Supplemental data

           

Portfolio turnover rate

    4     20     50     82     61     62

Net assets, end of period (000s omitted)

    $10,256       $9,955       $8,896       $8,709       $10,573       $4,522  

 

1 

Total return calculations do not include any sales charges. Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo High Yield Municipal Bond Fund  |  21


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended
June 30 20191
 
CLASS R6

Net asset value, beginning of period

    $10.98       $10.61  

Net investment income

    0.24       0.39  

Net realized and unrealized gains (losses) on investments

    0.12       0.37  
 

 

 

   

 

 

 

Total from investment operations

    0.36       0.76  

Distributions to shareholders from

   

Net investment income

    (0.24     (0.39

Net asset value, end of period

    $11.10       $10.98  

Total return2

    3.25     7.29

Ratios to average net assets (annualized)

   

Gross expenses

    0.70     0.71

Net expenses

    0.50     0.50

Net investment income

    4.21     3.96

Supplemental data

   

Portfolio turnover rate

    4     20

Net assets, end of period (000s omitted)

    $26       $26  

 

 

 

 

1 

For the period from July, 31, 2018 (commencement of class operations) to June 30, 2019

 

2 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

22  |  Wells Fargo High Yield Municipal Bond Fund


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
ADMINISTRATOR CLASS   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $10.98       $10.59       $10.37       $10.92       $10.34       $10.26  

Net investment income

    0.22       0.40       0.41       0.38       0.36       0.35  

Net realized and unrealized gains (losses) on investments

    0.12       0.39       0.22       (0.47     0.61       0.17  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.34       0.79       0.63       (0.09     0.97       0.52  

Distributions to shareholders from

           

Net investment income

    (0.22     (0.40     (0.41     (0.38     (0.36     (0.35

Net realized gains

    0.00       0.00       0.00       (0.08     (0.03     (0.09
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.22     (0.40     (0.41     (0.46     (0.39     (0.44

Net asset value, end of period

    $11.10       $10.98       $10.59       $10.37       $10.92       $10.34  

Total return1

    3.14     7.64     6.21     (0.75 )%      9.65     5.07

Ratios to average net assets (annualized)

           

Gross expenses

    1.03     1.03     1.01     1.00     1.00     1.00

Net expenses

    0.70     0.71     0.75     0.75     0.75     0.75

Net investment income

    4.00     3.69     3.93     3.60     3.39     3.35

Supplemental data

           

Portfolio turnover rate

    4     20     50     82     61     62

Net assets, end of period (000s omitted)

    $14,299       $15,704       $24,627       $22,839       $25,179       $13,768  

 

 

 

 

1 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo High Yield Municipal Bond Fund  |  23


Financial highlights

 

(For a share outstanding throughout each period)

 

    Six months ended
December 31, 2019

(unaudited)
    Year ended June 30  
INSTITUTIONAL CLASS   2019     2018     2017     2016     2015  

Net asset value, beginning of period

    $10.97       $10.59       $10.37       $10.91       $10.34       $10.25  

Net investment income

    0.23       0.42       0.43       0.40       0.38       0.37  

Net realized and unrealized gains (losses) on investments

    0.13       0.38       0.22       (0.46     0.60       0.18  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.36       0.80       0.65       (0.06     0.98       0.55  

Distributions to shareholders from

           

Net investment income

    (0.23     (0.42     (0.43     (0.40     (0.38     (0.37

Net realized gains

    0.00       0.00       0.00       (0.08     (0.03     (0.09
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to shareholders

    (0.23     (0.42     (0.43     (0.48     (0.41     (0.46

Net asset value, end of period

    $11.10       $10.97       $10.59       $10.37       $10.91       $10.34  

Total return1

    3.31     7.70     6.37     (0.51 )%      9.71     5.33

Ratios to average net assets (annualized)

           

Gross expenses

    0.76     0.76     0.74     0.73     0.74     0.74

Net expenses

    0.55     0.55     0.60     0.60     0.60     0.60

Net investment income

    4.15     3.92     4.09     3.82     3.58     3.51

Supplemental data

           

Portfolio turnover rate

    4     20     50     82     61     62

Net assets, end of period (000s omitted)

    $72,868       $85,187       $75,560       $73,989       $67,867       $76,118  

 

 

 

 

1 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

24  |  Wells Fargo High Yield Municipal Bond Fund


Notes to financial statements (unaudited)

 

1. ORGANIZATION

Wells Fargo Funds Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Wells Fargo High Yield Municipal Bond Fund (the “Fund”) which is a diversified series of the Trust.

2. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Securities valuation

All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.

Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

Investments in registered open-end investment companies 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 in good faith by the Board of Trustees of the Fund. The Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities, unless the determination has been delegated to the Wells Fargo Asset Management Pricing Committee at Wells Fargo Funds Management, LLC (“Funds Management”). The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Valuation Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees receives reports on any valuation actions taken by the Valuation Committee or the Wells Fargo Asset Management Pricing Committee which may include items for ratification.

When-issued transactions

The Fund may purchase securities on a forward commitment or when-issued basis. The Fund records a when-issued transaction on the trade date and will segregate assets in an amount at least equal in value to the Fund’s commitment to purchase when-issued securities. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

Security transactions and income recognition

Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. 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 been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Distributions to shareholders

Distributions to shareholders from net investment income are declared daily and paid monthly. Distributions from net realized gains, if any, are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.

 

 

Wells Fargo High Yield Municipal Bond Fund  |  25


Notes to financial statements (unaudited)

 

Federal and other taxes

The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable and tax-exempt income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.

The 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. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

As of December 31, 2019, the aggregate cost of all investments for federal income tax purposes was $113,054,207 and the unrealized gains (losses) consisted of:

 

Gross unrealized gains

   $ 8,378,442  

Gross unrealized losses

     (90,312

Net unrealized gains

   $ 8,288,130  

As of June 30, 2019, the Fund had capital loss carryforwards which consisted of $432,834 in long-term capital losses.

Class allocations

The separate classes of shares offered by the Fund differ principally in applicable sales charges, distribution, shareholder servicing, and administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.

3. FAIR VALUATION MEASUREMENTS

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:

 

 

Level 1 – quoted prices in active markets for identical securities

 

 

Level 2 – other significant observable inputs (including quoted prices for similar securities, 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 investments in securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of December 31, 2019:

 

      Quoted prices
(Level 1)
     Other significant
observable inputs
(Level 2)
    

Significant
unobservable inputs

(Level 3)

     Total  

Assets

           

Investments in:

           

Municipal obligations

   $ 0      $ 120,990,560      $ 0      $ 120,990,560  

Short-term investments

           

Investment companies

     351,777        0        0        351,777  

Total assets

   $ 351,777      $ 120,990,560      $ 0      $ 121,342,337  

Additional sector, industry or geographic detail is included in the Portfolio of Investments.

For the six months ended December 31, 2019, the Fund did not have any transfers into/out of Level 3.

 

 

26  |  Wells Fargo High Yield Municipal Bond Fund


Notes to financial statements (unaudited)

 

4. TRANSACTIONS WITH AFFILIATES

Management fee

Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”), is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:

 

Average daily net assets    Management fee

First $500 million

   0.500%

Next $500 million

   0.475

Next $2 billion

   0.450

Next $2 billion

   0.425

Next $5 billion

   0.390

Over $10 billion

   0.380

For the six months ended December 31, 2019, the management fee was equivalent to an annual rate of 0.50% of the Fund’s average daily net assets.

Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Funds Management. Wells Capital Management Incorporated, an affiliate of Funds Management and an indirect wholly owned subsidiary of Wells Fargo, is the subadviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.35% and declining to 0.20% as the average daily net assets of the Fund increase.

Administration fees

Under a class-level administration agreement, Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:

 

      Class-level
administration fee

Class A, Class C

   0.16%

Class R6

   0.03

Administrator Class

   0.10

Institutional Class

   0.08

Waivers and/or expense reimbursements

Funds Management has contractually waived and/or reimbursed management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Funds Management has waived fees and/or reimbursed expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Funds Management has committed through October 31, 2020 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s expenses at 0.80% for Class A shares, 1.55% for Class C shares, 0.50% for Class R6 shares, 0.70% for Administrator Class shares and 0.55% for Institutional Class shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.

Distribution fee

The Trust has adopted a distribution plan for Class C shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class C shares and paid to Wells Fargo Funds Distributor, LLC (“Funds Distributor”), the principal underwriter, at an annual rate of 0.75% of the average daily net assets of Class C shares.

 

 

Wells Fargo High Yield Municipal Bond Fund  |  27


Notes to financial statements (unaudited)

 

In addition, Funds Distributor is entitled to receive the front-end sales charge from the purchase of Class A shares and a contingent deferred sales charge on the redemption of certain Class A shares. Funds Distributor is also entitled to receive the contingent deferred sales charges from redemptions of Class C shares. For the six months ended December 31, 2019, Funds Distributor received $1,569 from the sale of Class A shares. No contingent deferred sales charges were incurred by Class A and Class C shares for the six months ended December 31, 2019.

Shareholder servicing fees

The Trust has entered into contracts with one or more shareholder servicing agents, whereby Class A, Class C and Administrator Class of the Fund are charged a fee at an annual rate of 0.25% of the average daily net assets of each respective class. A portion of these total shareholder servicing fees were paid to affiliates of Wells Fargo.

Interfund transactions

The Fund may purchase or sell portfolio investment securities to certain other Wells Fargo affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund had $6,305,000 and $8,605,000 in interfund purchases and sales, respectively, during the six months ended December 31, 2019.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended December 31, 2019 were $5,023,560 and $16,061,505, respectively.

6. BANK BORROWINGS

The Trust (excluding the money market funds), Wells Fargo Master Trust and Wells Fargo Variable Trust are parties to a $280,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the 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, an annual commitment fee equal to 0.25% of the unused balance is allocated to each participating fund.

For the six months ended December 31, 2019, there were no borrowings by the Fund under the agreement.

7. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and Trustees have been granted certain indemnification rights 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 Fund and, therefore, cannot be estimated.

8. NEW ACCOUNTING PRONOUNCEMENTS

In August 2018, FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 updates the disclosure requirements for fair value measurements by modifying or removing certain disclosures and adding certain new disclosures. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Management has adopted the removal and modification of disclosures early, as permitted, and will adopt the additional new disclosures at the effective date.

In March 2017, FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium and requires the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount and discounts will continue to be accreted to the maturity date of the security. ASU 2017-08 is effective for fiscal years beginning after December 15, 2018 and for interim periods within those fiscal years. During the current reporting period, management of the Fund adopted the change in accounting policy which did not have a material impact to the Fund’s financial statements.

 

 

28  |  Wells Fargo High Yield Municipal Bond Fund


Other information (unaudited)

 

PROXY VOTING INFORMATION

A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available, upon request, by calling 1-800-222-8222, visiting our website at wfam.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at wfam.com or by visiting the SEC website at sec.gov.

QUARTERLY PORTFOLIO HOLDINGS INFORMATION

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.

 

 

Wells Fargo High Yield Municipal Bond Fund  |  29


Other information (unaudited)

 

BOARD OF TRUSTEES AND OFFICERS

Each of the Trustees and Officers1 listed in the table below acts in identical capacities for each fund in the Wells Fargo family of funds, which consists of 149 mutual funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information2. 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

 

Name and
year of birth
  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships
William R. Ebsworth (Born 1957)   Trustee,
since 2015
  Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Endowment (non-profit organization). Mr. Ebsworth is a CFA® charterholder.   N/A
Jane A. Freeman (Born 1953)   Trustee,
since 2015; Chair Liaison,
since 2018
  Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is a Board Member of The Ruth Bancroft Garden (non-profit organization). She is also an inactive Chartered Financial Analyst.   N/A
Isaiah Harris, Jr.
(Born 1952)
  Trustee,
since 2009; Audit Committee Chairman,
since 2019
  Retired. Chairman of the Board of CIGNA Corporation since 2009, and Director since 2005. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Child Evangelism Fellowship (non-profit). Mr. Harris is a certified public accountant (inactive status).   CIGNA Corporation
Judith M. Johnson (Born 1949)   Trustee,
since 2008; Audit Committee Chairman, from 2009 to 2018
  Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.   N/A

 

 

30  |  Wells Fargo High Yield Municipal Bond Fund


Other information (unaudited)

 

Name and
year of birth
  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships
David F. Larcker
(Born 1950)
  Trustee,
since 2009
  James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.   N/A
Olivia S. Mitchell
(Born 1953)
 

Trustee,

since 2006; Nominating and Governance Committee Chair, since 2018

  International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993.   N/A
Timothy J. Penny (Born 1951)   Trustee,
since 1996; Chairman, since 2018
  President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.   N/A
James G. Polisson (Born 1959)   Trustee,
since 2018
  Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations.   N/A
Pamela Wheelock3 (Born 1959)   Trustee, since January 2020; previously Trustee from January 2018 to July 2019   Board member of the Destination Medical Center Economic Development Agency, Rochester, Minnesota since 2019. Acting Commissioner, Minnesota Department of Human Services, July 2019 through September 2019. Human Services Manager (part-time), Minnesota Department of Human Services, October 2019 through December 2019. Chief Operating Officer, Twin Cities Habitat for Humanity from 2017 to 2019. Vice President of University Services, University of Minnesota from 2012 to 2016. Prior thereto, on the Board of Directors, Governance Committee and Finance Committee for the Minnesota Philanthropy Partners (Saint Paul Foundation) from 2012 to 2018, Interim Chief Executive Officer of Blue Cross Blue Shield of Minnesota from 2011 to 2012, Chairman of the Board from 2009 to 2012 and Board Director from 2003 to 2015. Vice President, Leadership and Community Engagement, Bush Foundation, Saint Paul, Minnesota (a private foundation) from 2009 to 2011. Executive Vice President and Chief Financial Officer, Minnesota Sports and Entertainment from 2004 to 2009 and Senior Vice President from 2002 to 2004. Executive Vice President of the Minnesota Wild Foundation from 2004 to 2008. Commissioner of Finance, State of Minnesota, from 1999 to 2002. Currently Board Chair of the Minnesota Wild Foundation since 2010.   N/A

 

*

Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.    

 

 

Wells Fargo High Yield Municipal Bond Fund  |  31


Other information (unaudited)

 

Officers

 

Name and
year of birth
  Position held and
length of service
  Principal occupations during past five years or longer
Andrew Owen
(Born 1960)
  President,
since 2017
  Executive Vice President of Wells Fargo & Company and Head of Affiliated Managers, Wells Fargo Asset Management, since 2014. In addition, Mr. Owen is currently President, Chief Executive Officer and Director of Wells Fargo Funds Management, LLC since 2017. Prior thereto, Executive Vice President responsible for marketing, investments and product development for Wells Fargo Funds Management, LLC, from 2009 to 2014.
Nancy Wiser1
(Born 1967)
  Treasurer,
since 2012
  Executive Vice President of Wells Fargo Funds Management, LLC since 2011. Chief Operating Officer and Chief Compliance Officer at LightBox Capital Management LLC, from 2008 to 2011.
Michelle Rhee4
(Born 1966)
  Chief Legal Officer,
since 2019
  Secretary of Wells Fargo Funds Management, LLC, Chief Legal Counsel of Wells Fargo Asset Management and Assistant General Counsel of Wells Fargo Bank, N.A. since 2018. Associate General Counsel and Managing Director of Bank of America Corporation from 2004 to 2018.
Catherine Kennedy5 (Born 1969)   Secretary,
since 2019
  Vice President of Wells Fargo Funds Management, LLC and Senior Counsel of the Wells Fargo Legal Department since 2010. Vice President and Senior Counsel of Evergreen Investment Management Company, LLC from 1998 to 2010.
Michael H. Whitaker (Born 1967)   Chief Compliance Officer,
since 2016
  Chief Compliance Officer of Wells Fargo Asset Management since 2016. Senior Vice President and Chief Compliance Officer for Fidelity Investments from 2007 to 2016.
David Berardi
(Born 1975)
  Assistant Treasurer,
since 2009
  Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.
Jeremy DePalma1 (Born 1974)   Assistant Treasurer,
since 2009
  Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.

 

1 

Nancy Wiser acts as Treasurer of 64 funds in the Fund Complex. Jeremy DePalma acts as Treasurer of 85 funds and Assistant Treasurer of 64 funds in the Fund Complex.

 

2 

The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at wfam.com.

 

3 

Pamela Wheelock was re-appointed to the Board effective January 1, 2020.

 

4 

Michelle Rhee became Chief Legal Officer effective October 22, 2019.

 

5 

Catherine Kennedy became Secretary effective October 22, 2019.

 

 

32  |  Wells Fargo High Yield Municipal Bond Fund


Appendix (unaudited)

 

Effective on or about May 1, 2020, if you purchase Fund shares through a Janney Montgomery Scott LLC (“Janney”) brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge (“CDSC”), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in the Fund’s Prospectus or SAI.

 

Front-end sales charge* waivers on Class A shares available at Janney
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).
Shares purchased by employees and registered representatives of Janney or its affiliates and their family members as designated by Janney.
Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within ninety (90) days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., right of reinstatement).
Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
Shares acquired through a right of reinstatement.
Class C shares that are no longer subject to a contingent deferred sales charge and are converted to Class A shares of the same fund pursuant to Janney’s policies and procedures.
CDSC waivers on Class A and Class C shares available at Janney
Shares sold upon the death or disability of the shareholder.
Shares sold as part of a systematic withdrawal plan as described in the Fund’s Prospectus.
Shares purchased in connection with a return of excess contributions from an IRA account.
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRS regulations.
Shares sold to pay Janney fees but only if the transaction is initiated by Janney.
Shares acquired through a right of reinstatement.
Shares exchanged into the same share class of a different fund.
Front-end sales charge* discounts available at Janney; breakpoints, rights of accumulation and/or letters of intent
Breakpoints as described in the Fund’s Prospectus.
Rights of accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Janney. Eligible fund family assets not held at Janney may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.
Letters of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Janney Montgomery Scott may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.

 

*

Also referred to as an “initial sales charge.”

 

 

Wells Fargo High Yield Municipal Bond Fund  |  33


 

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LOGO

For more information

More information about Wells Fargo Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:

Wells Fargo Funds

P.O. Box 219967

Kansas City, MO 64121-9967

Website: wfam.com

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

 

LOGO

 

This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-222-8222 or visit the Fund’s website at wfam.com. Read the prospectus carefully before you invest or send money.

Wells Fargo Asset Management (WFAM) is the trade name for certain investment advisory/management firms owned by Wells Fargo & Company. These firms include but are not limited to Wells Capital Management Incorporated and Wells Fargo Funds Management, LLC. Certain products managed by WFAM entities are distributed by Wells Fargo Funds Distributor, LLC (a broker-dealer and Member FINRA).

This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind—including a recommendation for any specific investment, strategy, or plan.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE     MAY LOSE VALUE


 

© 2020 Wells Fargo & Company. All rights reserved.

PAR-0120-02390 02-20

SA264/SAR264 12-19

 

 



LOGO

Semi-Annual Report

December 31, 2019

 

Wells Fargo

Alternative Risk Premia Fund

 

 

 

 

Beginning on January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, paper copies of the Wells Fargo Funds’ annual and semi-annual shareholder reports issued after this date will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-800-222-8222 or by enrolling at wellsfargo.com/advantagedelivery.

You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call 1-800-222-8222. Your election to receive reports in paper will apply to all Wells Fargo Funds held in your account with your financial intermediary or, if you are a direct investor, to all Wells Fargo Funds that you hold.


 

 

Reduce clutter.

Save trees.

Sign up for
electronic delivery

of prospectuses
and shareholder
reports at
wellsfargo.com/
advantagedelivery

 

The views expressed and any forward-looking statements are as of December 31, 2019, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Asset Management. Discussions of individual securities, or the markets generally, or any Wells Fargo Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Asset Management and the Fund disclaim any obligation to publicly update or revise any views expressed or forward-looking statements.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE    MAY LOSE VALUE


 

 

 

Wells Fargo Alternative Risk Premia Fund  |  1


Performance highlights (unaudited)

 

Investment objective

The Fund seeks long-term capital appreciation.

Manager

Wells Fargo Funds Management, LLC

Subadvisers

Wells Capital Management Incorporated

Wells Fargo Asset Management (International) Limited

Portfolio managers

Petros N. Bocray, CFA®, FRM

Eddie Cheng, CFA®

Monisha Jayakumar

Average annual total returns (%) as of December 31, 2019

 

 
              Expense ratios1 (%)  
 
    Inception date   Since inception     Gross     Net2  
         
Class R6 (WRPRX)3   1-29-2019     -4.29       1.56       0.62  
         
Institutional Class (WRPIX)3   1-29-2019     -4.19       1.66       0.72  
         
ICE BofA U.S. 3-Month Treasury Bill Index4       2.09            

 

*

Based on the inception date of the oldest Fund class.

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect 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, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund’s website, wfam.com.

Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index.

Class R6 and Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.

Alternative risk premia investment risk is the Fund’s ability to achieve its investment objective depending largely upon the portfolio managers’ successful evaluation of the risks, potential returns, and correlation properties with respect to the various risk premia in which the Fund invests. 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. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. The use of leverage results in certain risks, including, among others, the likelihood of greater volatility of net asset value and the market value of common shares. Short selling is generally considered speculative, has the potential for unlimited loss, and may involve leverage. Foreign investments are especially volatile and can rise or fall dramatically due to differences in the political and economic conditions of the host country. 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). The Fund is exposed to subsidiary risk and smaller-company securities risk. Consult the Fund’s prospectus for additional information on these and other risks.

 

Please see footnotes on page 3.

 

 

2  |  Wells Fargo Alternative Risk Premia Fund


Performance highlights (unaudited)

 

Net asset exposure as of December 31, 20195  
     % of net assets  
     Long
positions
     Short
positions
 
     

Bond futures

     115        0  
     

Stocks

     70        52  
     

Currency forwards

     49        87  
     

Equity index futures

     22        0  
     

Commodity futures

     21        24  
 

 

 

 

 

 

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

 

1 

Reflects the expense ratios as stated in the most recent prospectuses. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report.

 

2 

The manager has contractually committed through December 4, 2020, to waive fees and/or reimburse expenses to the extent necessary to cap total annual fund operating expenses after fee waivers at 0.62% for Class R6 and 0.72% for Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Without this cap, the Fund’s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectuses.

 

3 

The Fund is closed to new investors, except that Class R6 shares may be purchased by funds of funds managed by Wells Fargo Funds Management, LLC.

 

4 

The ICE BofA 3-Month U.S. Treasury Bill Index is an unmanaged index that is comprised of a single U.S. Treasury issue with approximately three months to final maturity, purchased at the beginning of each month and held for one full month. Copyright 2020. ICE Data Indices, LLC. All rights reserved. You cannot invest directly in an index.

 

5 

Amounts are subject to change and may have changed since the date specified.

 

 

Wells Fargo Alternative Risk Premia Fund  |  3


Fund expenses (unaudited)

 

As a shareholder of the Fund, you incur ongoing costs, including management 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 period from July 1, 2019 to December 31, 2019.

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. 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.

 

     Beginning
account  value
7-1-2019
     Ending
account value
12-31-2019
     Expenses
paid during
the period¹
     Annualized net
expense ratio
 
         

Class R6

           

Actual

   $ 1,000.00      $ 983.68      $ 3.09        0.62

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,022.02      $ 3.15        0.62
         

Institutional Class

           

Actual

   $ 1,000.00      $ 982.64      $ 3.59        0.72

Hypothetical (5% return before expenses)

   $ 1,000.00      $ 1,021.52      $ 3.66        0.72

 

1

Expenses paid is equal to the annualized net expense ratio of each class 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).

 

 

4  |  Wells Fargo Alternative Risk Premia Fund


Consolidated portfolio of investments—December 31, 2019 (unaudited)

 

     Yield             Shares      Value  
Short-Term Investments: 101.23%                          
Investment Companies: 6.01%                          

Wells Fargo Government Money Market Fund Select Class (l)(u)*

    1.55        5,734,600      $ 5,734,600  
         

 

 

 
         
          Maturity
date
     Principal         
U.S. Treasury Securities: 95.22%  

U.S. Treasury Bill (z)#

    1.49       3-12-2020      $ 21,900,000        21,836,018  

U.S. Treasury Bill (z)#

    1.73       3-26-2020        8,000,000        7,971,855  

U.S. Treasury Bill (z)#*

    1.75       1-16-2020        31,500,000        31,482,881  

U.S. Treasury Bill (z)#*

    1.84       1-30-2020        29,576,000        29,542,526  
            90,833,280  
         

 

 

 

Total Short-Term Investments (Cost $96,542,976)

            96,567,880  
         

 

 

 

 

Total investments in securities (Cost $96,542,976)     101.23        96,567,880  

Other assets and liabilities, net

    (1.23        (1,177,386
 

 

 

      

 

 

 
Total net assets     100.00      $ 95,390,494  
 

 

 

      

 

 

 

 

 

(l)

The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940.

(u)

The rate represents the 7-day annualized yield at period end.

*

A portion of the holding represents an investment held in Alt Risk Premia Special Investments (Cayman) Ltd., the consolidated entity.

(z)

Zero coupon security. The rate represents the current yield to maturity.

#

All or a portion of this security is segregated as collateral for investments in derivative instruments.

Investments in Affiliates

An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were either affiliated persons of the Fund at the beginning of the period or the end of the period were as follows:

 

   

Shares,

beginning of
period

   

Shares

purchased

   

Shares

sold

   

Shares,

end of

period

   

Net

realized

gains

(losses)

   

Net

change in

unrealized

gains

(losses)

   

Income

from

affiliated

securities

   

Value,

end of

period

   

% of

net

assets

 
Short-Term Investments                                                      

Investment Companies

                 

Wells Fargo Government
Money Market Fund
Select Class

    2,383,220       98,384,634       (95,033,254     5,734,600     $ 0     $ 0     $ 81,765     $ 5,734,600       6.01

Futures Contracts

 

Description    Number of
contracts
     Expiration
date
     Notional
cost
     Notional
value
     Unrealized
gains
     Unrealized
losses
 

Long

                 

London Metal Exchange Aluminium Futures *

     81        1-13-2020      $ 3,604,860      $ 3,623,231      $ 18,371      $ 0  

London Metal Exchange Lead Futures *

     28        1-13-2020        1,514,925        1,341,900        0        (173,025

London Metal Exchange Nickel Futures *

     11        1-13-2020        1,033,051        921,888        0        (111,163

London Metal Exchange Zinc Futures *

     47        1-13-2020        2,944,955        2,680,175        0        (264,780

CAC 40 Index

     27        1-17-2020        1,814,181        1,808,068        0        (6,113

WTI Crude Futures *

     5        1-21-2020        292,866        305,300        12,434        0  

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Alternative Risk Premia Fund  |  5


Consolidated portfolio of investments—December 31, 2019 (unaudited)

 

Description   Number of
contracts
    Expiration
date
    Notional
cost
    Notional
value
    Unrealized
gains
    Unrealized
losses
 

Long (continued)

           

Hang Seng Index

    8       1-30-2020     $ 1,436,329     $ 1,451,176     $ 14,847     $ 0  

Brent Crude Futures *

    52       1-31-2020       3,286,474       3,432,000       145,526       0  

Gasoline RBOB Futures *

    47       1-31-2020       3,274,916       3,337,047       62,131       0  

NY Harbor Ultra-Low Sulfur Diesel Futures *

    5       1-31-2020       414,477       424,788       10,311       0  

Low Sugar Gas Oil Futures *

    23       2-12-2020       1,412,259       1,411,625       0       (634

Gold 100 Ounces Futures *

    12       2-26-2020       1,770,399       1,827,720       57,321       0  

Euro-Bund Futures

    35       3-6-2020       6,786,466       6,693,352       0       (93,114

TOPIX Index

    10       3-12-2020       1,587,212       1,583,912       0       (3,300

10-Year Japanese Treasury Bonds

    60       3-13-2020       84,482,584       84,034,789       0       (447,795

KC Hard Red Winter Wheat Futures *

    13       3-13-2020       289,880       315,900       26,020       0  

Soybean Oil Futures *

    69       3-13-2020       1,313,052       1,439,478       126,426       0  

Wheat Futures *

    93       3-13-2020       2,431,073       2,598,188       167,115       0  

10-Year Australian Treasury Bonds

    186       3-16-2020       18,967,017       18,659,681       0       (307,336

Cocoa Futures *

    112       3-16-2020       2,848,206       2,844,800       0       (3,406

Coffee C Futures *

    32       3-19-2020       1,464,972       1,556,400       91,428       0  

S&P/TSX 60 Index

    16       3-19-2020       2,483,430       2,494,844       11,414       0  

SPI 200 Index

    18       3-19-2020       2,100,029       2,085,145       0       (14,884

10-Year U.S. Treasury Notes

    22       3-20-2020       2,837,308       2,825,281       0       (12,027

DAX Index

    4       3-20-2020       1,494,174       1,485,860       0       (8,314

Euro STOXX 50 Index

    43       3-20-2020       1,793,398       1,798,612       5,214       0  

FTSE 100 Index

    20       3-20-2020       1,895,811       1,986,635       90,824       0  

MSCI Emerging Markets Index

    26       3-20-2020       1,413,039       1,456,260       43,221       0  

NASDAQ 100 E-Mini Index

    7       3-20-2020       1,188,794       1,225,315       36,521       0  

Russell 2000 E-Mini Index

    32       3-20-2020       2,617,765       2,672,960       55,195       0  

S&P 500 E-Mini Index

    11       3-20-2020       1,726,314       1,777,105       50,791       0  

Long Gilt Bonds

    10       3-27-2020       1,751,142       1,740,259       0       (10,883

Silver Futures *

    7       3-27-2020       597,328       627,235       29,907       0  

Short

           

London Metal Exchange Aluminium Futures *

    (55)       1-13-2020       (2,448,837     (2,460,219     0       (11,382

London Metal Exchange Lead Futures *

    (67)       1-13-2020       (3,182,989     (3,210,975     0       (27,986

London Metal Exchange Nickel Futures *

    (2)       1-13-2020       (165,183     (167,616     0       (2,433

London Metal Exchange Zinc Futures *

    (18)       1-13-2020       (1,012,082     (1,026,450     0       (14,368

Natural Gas Futures *

    (101)       1-29-2020       (2,298,428     (2,210,890     87,538       0  

Lean Hogs Futures *

    (106)       2-14-2020       (2,914,215     (3,028,420     0       (114,205

Live Cattle Futures *

    (51)       2-28-2020       (2,560,965     (2,568,870     0       (7,905

Sugar #11 Futures *

    (26)       2-28-2020       (373,048     (390,790     0       (17,742

Cotton #2 Futures *

    (108)       3-9-2020       (3,536,725     (3,728,700     0       (191,975

Corn Futures *

    (47)       3-13-2020       (903,974     (911,213     0       (7,239

Soybean Futures *

    (104)       3-13-2020       (4,719,911     (4,968,600     0       (248,689

Soybean Meal Futures *

    (117)       3-13-2020       (3,500,202     (3,564,990     0       (64,788

London Metal Exchange Copper Futures *

    (8)       3-16-2020       (1,173,616     (1,235,000     0       (61,384
         

 

 

   

 

 

 
          $ 1,142,555     $ (2,226,870
         

 

 

   

 

 

 

 

*

Represents an investment held in Alt Risk Premia Special Investments (Cayman) Ltd., the consolidated entity.

 

The accompanying notes are an integral part of these financial statements.

 

 

6  |  Wells Fargo Alternative Risk Premia Fund


Consolidated portfolio of investments—December 31, 2019 (unaudited)

 

Forward Foreign Currency Contracts

 

Currency to be
received
     Currency to be
delivered
     Counterparty      Settlement
date
     Unrealized
gains
       Unrealized
losses
 
367,301,000 INR      5,139,233 USD      Goldman Sachs      1-15-2020      $ 672        $ 0  
25,218,000 TRY      4,339,685 USD      Goldman Sachs      1-15-2020        0          (114,945
343,561,000 RUB      5,358,855 USD      Goldman Sachs      1-15-2020        172,526          0  
26,135,000 JPY      241,016 USD      Goldman Sachs      1-15-2020        0          (372
103,051,951,000 IDR      7,329,442 USD      Goldman Sachs      1-15-2020        85,779          0  
19,585,046 USD      28,652,000 AUD      Goldman Sachs      1-15-2020        0          (527,724
5,775,969 USD      4,534,136,000 CLP      Goldman Sachs      1-15-2020        0          (255,044
19,678,079 USD      179,814,000 NOK      Goldman Sachs      1-15-2020        0          (804,762
168,147 USD      648,000 PLN      Goldman Sachs      1-15-2020        0          (2,657
12,681,961 USD      19,392,000 NZD      Goldman Sachs      1-15-2020        0          (374,282
736,772 USD      3,108,000 BRL      Goldman Sachs      1-15-2020        0          (35,521
19,876,077 USD      19,574,000 CHF      Goldman Sachs      1-15-2020        0          (362,264
5,484,905 USD      1,630,370,000 HUF      Goldman Sachs      1-15-2020        0          (43,913
2,121,771 USD      2,796,000 CAD      Goldman Sachs      1-15-2020        0          (31,571
5,250,000 CZK      228,900 USD      Goldman Sachs      1-15-2020        2,687          0  
59,817,000 ZAR      4,053,395 USD      Goldman Sachs      1-15-2020        210,765          0  
115,716,000 KRW      97,322 USD      Goldman Sachs      1-15-2020        2,768          0  
3,146,000 EUR      3,501,674 USD      Goldman Sachs      1-15-2020        29,829          0  
89,321,000 MXN      4,587,300 USD      Goldman Sachs      1-15-2020        128,782          0  
5,367,000 GBP      7,068,339 USD      Goldman Sachs      1-15-2020        43,254          0  
65,933,000 SEK      6,963,183 USD      Goldman Sachs      1-15-2020        80,459          0  
                   

 

 

      

 

 

 
                    $ 757,521        $ (2,553,055
                   

 

 

      

 

 

 

Swaps

 

Reference asset/index    Counterparty    Payment
frequency
   Maturity
date
     Notional
amount
     Value      Unrealized
gains
     Unrealized
losses
 
Synthetic total return swap†    Goldman Sachs    Monthly      2-1-2024      $ 18,768,967      $ 18,698,152      $ 0      $ (70,815

 

The Fund receives or pays the difference between the total return on a portfolio of long and short positions underlying the total return swap and the return on a specified benchmark (either the Federal Funds Effective Rate or the One Month LIBOR), plus or minus a spread in a typical range of 20-75 basis points (bps; 100 bps equal 1.00%). The spread is determined based upon the country and/or currency of the individual underlying positions. Certain short positions may be subject to higher market rates.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Alternative Risk Premia Fund  |  7


Consolidated portfolio of investments—December 31, 2019 (unaudited)

 

The following table represents the component disclosures associated with the synthetic total return swap basket as of the end of the period.

 

Reference asset          Shares      Value      % of swap
basket value
 

Long positions

          

Common Stocks

          

Communication Services

          

Diversified Telecommunication Services

          

Elisa Oyj

       3,489      $ 192,743        1.03

PCCW Limited

       991,000        586,282        3.14  

Proximus SA

       10,910        312,304        1.67  

Spark New Zealand Limited

       145,031        422,756        2.26  

Interactive Media & Services

          

Auto Trader Group plc

       75,027        590,910        3.16  

Media

          

Discovery Communications Incorporated Class A

       8,238        269,710        1.44  

Fox Corporation Class A

       9,869        365,842        1.96  

Fox Corporation Class B

       10,508        382,489        2.05  

Quebecor Incorporated Class B

       64,200        1,638,432        8.76  
          4,761,468     
       

 

 

    

Consumer Discretionary

          

Diversified Consumer Services

          

H&R Block Incorporated

       30,302        711,488        3.81  

Hotels, Restaurants & Leisure

          

Darden Restaurants Incorporated

       2,049        223,360        1.19  

Flight Centre Travel Group Limited

       11,594        358,475        1.92  

Sodexho Alliance SA

       2,694        319,258        1.71  

Household Durables

          

NVR Incorporated

       221        841,656        4.50  

Pulte Group Incorporated

       13,061        506,765        2.71  

Internet & Direct Marketing Retail

          

Wayfair Incorporated Class A

       2,559        231,255        1.24  

Leisure Products

          

Bandai Namco Holdings Incorporated

       4,100        249,410        1.33  

Polaris Industries Incorporated

       2,244        228,213        1.22  

Multiline Retail

          

Harvey Norman Holdings Limited

       227,212        648,942        3.47  

Specialty Retail

          

Rent-A-Center Incorporated

       6,621        190,949        1.02  

Textiles, Apparel & Luxury Goods

          

Hugo Boss AG

       6,085        294,537        1.58  
          4,804,308     
       

 

 

    

Consumer Staples

          

Food & Staples Retailing

          

Metro AG

       13,767        221,525        1.18  

Metro Incorporated

       8,700        359,038        1.92  

 

The accompanying notes are an integral part of these financial statements.

 

 

8  |  Wells Fargo Alternative Risk Premia Fund


Consolidated portfolio of investments—December 31, 2019 (unaudited)

 

Reference asset          Shares      Value      % of swap
basket value
 

Food Products

          

Bunge Limited

       4,232      $ 243,551        1.30 %  

Golden Agri-Resources Limited

       1,107,300        193,475        1.03  

John B. Sanfilippo & Son Incorporated

       2,638        240,796        1.29  

NH Foods Limited

       15,800        654,489        3.50  

The Hershey Company

       7,374        1,083,829        5.80  

Toyo Suisan Kaisha Limited

       21,600        917,259        4.91  

Tyson Foods Incorporated Class A

       3,820        347,772        1.86  

Household Products

          

Kimberly-Clark Corporation

       1,873        257,623        1.38  
          4,519,357     
       

 

 

    

Energy

          

Energy Equipment & Services

          

John Wood Group plc

       55,284        291,814        1.56  

Oil, Gas & Consumable Fuels

          

Caltex Australia Limited

       42,616        1,015,298        5.43  

Par Pacific Holdings Incorporated

       13,047        303,209        1.62  

Plains GP Holdings LP Class A

       45,608        864,269        4.62  

Vermilion Energy Incorporated

       20,200        330,247        1.77  
          2,804,837     
       

 

 

    

Financials

          

Banks

          

Bank of Queensland Limited

       113,367        576,774        3.08  

Bendigo Bank Limited

       41,050        281,729        1.51  

CIT Group Incorporated

       18,439        841,370        4.50  

Israel Discount Bank Limited Class A

       90,154        417,965        2.24  

Mizrahi Tefahot Bank Limited

       17,748        472,826        2.53  

Capital Markets

          

CI Financial Corporation

       82,300        1,375,943        7.36  

Eaton Vance Corporation

       16,113        752,314        4.02  

INTL FC Stone Incorporated

       4,490        219,246        1.17  

Magellan Financial Group Limited

       8,134        325,071        1.74  

SEI Investments Company

       4,128        270,299        1.45  

Diversified Financial Services

          

Eurazeo SA

       7,757        530,750        2.84  

Industrivarden AB Class C

       38,883        937,682        5.01  

Lundbergforetagen AB Class B

       16,949        744,033        3.98  

Mitsubishi UFJ Lease & Finance Company Limited

       92,600        596,128        3.19  

Onex Corporation

       3,800        240,455        1.29  

Voya Financial Incorporated

       14,248        868,840        4.65  

Insurance

          

Cincinnati Financial Corporation

       3,876        407,560        2.18  

Erie Indemnity Company Class A

       1,668        276,887        1.48  

James River Group Holdings Limited

       7,159        295,021        1.58  

RenaissanceRe Holdings Limited

       5,171        1,013,617        5.42  

The Hartford Financial Services Group Incorporated

       9,701        589,529        3.15  

W.R. Berkley Corporation

       10,547        728,796        3.90  

Mortgage REITs

          

AGNC Investment Corporation

       25,172        445,038        2.38  

Ares Commercial Real Estate

       22,279        352,896        1.89  

Western Asset Mortgage Capital REIT

       21,023        217,165        1.16  
          13,777,934     
       

 

 

    

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Alternative Risk Premia Fund  |  9


Consolidated portfolio of investments—December 31, 2019 (unaudited)

 

Reference asset          Shares      Value      % of swap
basket value
 

Health Care

          

Health Care Equipment & Supplies

          

Smith & Nephew plc

       11,691      $ 283,777        1.52 %  

Health Care Providers & Services

          

MediPal Holdings Corporation

       16,600        366,365        1.96  

Suzuken Company Limited

       23,200        945,580        5.06  

Pharmaceuticals

          

Karo Bio AB

       61,622        266,582        1.43  

Orion Oyj Class B

       14,155        655,539        3.51  

Recordati SpA

       18,395        775,434        4.15  
          3,293,277     
       

 

 

    

Industrials

          

Air Freight & Logistics

          

C.H. Robinson Worldwide Incorporated

       6,663        521,043        2.79  

Construction & Engineering

          

Skanska AB Class B

       18,032        407,912        2.18  

Electrical Equipment

          

Acuity Brands Incorporated

       2,717        374,943        2.01  

Industrial Conglomerates

          

DCC plc

       3,302        286,220        1.53  

Machinery

          

Epiroc AB Class B

       32,885        390,827        2.09  

Yangzijiang Shipbuilding Holdings Limited

       407,900        339,676        1.82  

Professional Services

          

Manpower Incorporated

       8,491        824,475        4.41  

Robert Half International Incorporated

       6,167        389,445        2.08  

Road & Rail

          

ComfortDelGro Corporation Limited

       135,300        239,423        1.28  

Transportation Infrastructure

          

Japan Airport Terminal Company Limited

       11,600        643,624        3.44  

Kamigumi Company Limited

       59,600        1,310,115        7.01  
          5,727,703     
       

 

 

    

Information Technology

          

Electronic Equipment, Instruments & Components

          

Flex Limited

       23,585        297,641        1.59  

Venture Corporation Limited

       35,700        430,007        2.30  

IT Services

          

Itochu Techno-Solutions Corporation

       30,200        850,495        4.55  

Leidos Holdings Incorporated

       5,214        510,396        2.73  

The Western Union Company

       40,744        1,091,122        5.84  

Semiconductors & Semiconductor Equipment

          

ASM Pacific Technology

       14,800        205,312        1.10  
          3,384,973     
       

 

 

    

 

The accompanying notes are an integral part of these financial statements.

 

 

10  |  Wells Fargo Alternative Risk Premia Fund


Consolidated portfolio of investments—December 31, 2019 (unaudited)

 

Reference asset         Shares     Value     % of swap
basket value
 

Materials

       

Chemicals

       

Air Water Incorporated

      17,600     $ 256,811       1.37 %  

Daicel Corporation

      19,600       187,382       1.00  

Hitachi Chemical Company Limited

      11,900       498,558       2.67  

Johnson Matthey plc

      4,939       196,002       1.05  

Kaneka Corporation

      20,300       650,133       3.48  

Teijin Limited

      73,400       1,371,267       7.33  

Tosoh Corporation

      46,100       710,205       3.80  

Construction Materials

       

Fletcher Building Limited

      139,074       476,540       2.55  

Taiheiyo Cement Corporation

      16,000       469,641       2.51  

Metals & Mining

       

EVRAZ plc

      78,001       417,411       2.23  

Kobe Steel Limited

      167,700       898,560       4.81  

Mitsubishi Materials Corporation

      24,200       656,778       3.51  

Steel Dynamics Incorporated

      13,980       475,877       2.55  
        7,265,165    
     

 

 

   

Real Estate

       

Equity REITs

       

Equity Lifestyle Properties Incorporated

      13,987       984,543       5.27  

Essential Properties Realty

      9,784       242,739       1.30  

Mirvac Group

      313,390       699,348       3.74  

Segro plc

      75,466       896,859       4.80  

Smart REIT

      20,500       492,705       2.64  

Summit Industrial Income REIT

      40,000       371,489       1.99  

Real Estate Management & Development

       

Jones Lang LaSalle Incorporated

      1,552       270,179       1.44  

Klovern AB Class B

      136,316       334,170       1.79  
        4,292,032    
     

 

 

   

Utilities

       

Electric Utilities

       

FirstEnergy Corporation

      8,411       408,770       2.19  

Multi-Utilities

       

ATCO Limited Class I

      36,700       1,406,606       7.52  
        1,815,376    
     

 

 

   
    Dividend yield                    

Preferred Stock

       

Materials

       

Chemicals

       

Fuchs Petrolub SE

    2.24     7,723       383,705       2.05  
     

 

 

   

Short positions

       

Common Stocks

       

Communication Services

       

Diversified Telecommunication Services

       

CenturyLink Incorporated

      (66,709     (881,226     (4.71

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Alternative Risk Premia Fund  |  11


Consolidated portfolio of investments—December 31, 2019 (unaudited)

 

Reference asset          Shares     Value     % of swap
basket value
 

Entertainment

        

Madison Square Garden Company Class A

       (691   $ (203,285     (1.09 ) %  

Netflix Incorporated

       (1,808     (585,015     (3.13

Interactive Media & Services

        

Facebook Incorporated Class A

       (1,254     (257,384     (1.38

Wireless Telecommunication Services

        

Millicom International Cellular SA

       (6,331     (304,017     (1.63

Softbank Corporation

       (104,000     (1,394,606     (7.46

Vodafone Group plc

       (157,182     (305,559     (1.63
         (3,931,092  
      

 

 

   

Consumer Discretionary

        

Automobiles

        

Nissan Motor Company Limited

       (58,200     (337,254     (1.80

Tesla Motors Incorporated

       (1,817     (760,106     (4.07

Hotels, Restaurants & Leisure

        

The Stars Group Incorporated

       (37,700     (983,907     (5.26

Household Durables

        

Newell Brands Incorporated

       (11,049     (212,362     (1.14

Internet & Direct Marketing Retail

        

Amazon.com Incorporated

       (115     (212,502     (1.14

Delivery Hero SE

       (2,755     (218,359     (1.17

Specialty Retail

        

Industria de Diseno Textil SA

       (12,173     (429,433     (2.30

Textiles, Apparel & Luxury Goods

        

EssilorLuxottica SA

       (3,735     (568,941     (3.04
         (3,722,864  
      

 

 

   

Consumer Staples

        

Beverages

        

Anheuser Busch InBev SA

       (5,672     (462,602     (2.47

Food & Staples Retailing

        

Aeon Company Limited

       (15,400     (317,800     (1.70

Seven & I Holdings Company Limited

       (6,100     (223,598     (1.20

Food Products

        

Leroy Seafood Group ASA

       (37,315     (248,406     (1.33

The Kraft Heinz Company

       (30,882     (992,239     (5.31

Household Products

        

Reckitt Benckiser Group plc

       (6,003     (487,352     (2.61
         (2,731,997  
      

 

 

   

Energy

        

Oil, Gas & Consumable Fuels

        

The Williams Companies Incorporated

       (15,111     (358,433 )      (1.92
      

 

 

   

Financials

        

Banks

        

Japan Post Bank Company Limited

       (151,800     (1,456,489     (7.79

Mitsubishi UFJ Financial Group Incorporated

       (265,600     (1,435,922     (7.68

Mizuho Financial Group Incorporated

       (952,800     (1,467,711     (7.85

 

The accompanying notes are an integral part of these financial statements.

 

 

12  |  Wells Fargo Alternative Risk Premia Fund


Consolidated portfolio of investments—December 31, 2019 (unaudited)

 

Reference asset          Shares     Value     % of swap
basket value
 

Capital Markets

        

Daiwa Securities Group Incorporated

       (42,900   $ (216,577     (1.16 ) %  

Deutsche Bank AG

       (32,469     (251,587     (1.35

Nomura Holdings Incorporated

       (141,600     (728,643     (3.90

Standard Life Aberdeen plc

       (69,756     (303,160     (1.62

UBS Group AG

       (70,380     (888,152     (4.75

Diversified Financial Services

        

Kinnevik AB Class B

       (46,141     (1,130,686     (6.05

Insurance

        

AIA Group Limited

       (27,800     (291,832     (1.56

AXA SA

       (48,548     (1,367,397     (7.31

Enstar Group Limited

       (1,040     (215,134     (1.15

Japan Post Holdings Company Limited

       (162,100     (1,524,463     (8.15

Prudential plc

       (23,769     (456,209     (2.44

QBE Insurance Group Limited

       (22,473     (203,123     (1.09

Mortgage REITs

        

Two Harbors Investment Corporation

       (25,437     (371,889     (1.99
         (12,308,974  
      

 

 

   

Health Care

        

Biotechnology

        

Alnylam Pharmaceuticals Incorporated

       (4,182     (481,641     (2.58

Biomarin Pharmaceutical Incorporated

       (5,933     (501,635     (2.68

Health Care Equipment & Supplies

        

Alcon Incorporated

       (4,645     (263,100     (1.41

Health Care Providers & Services

        

Cigna Corporation

       (1,607     (328,615     (1.76

CVS Health Corporation

       (15,419     (1,145,478     (6.13

Orpea SA

       (1,846     (236,676     (1.27

UnitedHealth Group Incorporated

       (1,558     (458,021     (2.45
         (3,415,166  
      

 

 

   

Industrials

        

Aerospace & Defense

        

Airbus SE

       (2,231     (326,528     (1.75

Rolls Royce Holdings plc

       (90,394     (818,036     (4.37

Teledyne Technologies Incorporated

       (898     (311,193     (1.66

The Boeing Company

       (1,110     (361,594     (1.93

Construction & Engineering

        

Royal Boskalis Westminster NV

       (9,484     (242,551     (1.30

Electrical Equipment

        

Nidec Corporation

       (4,200     (573,651     (3.07

Industrial Conglomerates

        

General Electric Company

       (51,676     (576,704     (3.08

Siemens AG

       (2,677     (349,594     (1.87

Machinery

        

FANUC Corporation

       (4,100     (757,126     (4.05

Nordson Corporation

       (1,209     (196,874     (1.05

Road & Rail

        

Canadian National Railway Company

       (11,700     (1,058,411     (5.66

Sotetsu Holdings Incorporated

       (13,900     (376,820     (2.02

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Alternative Risk Premia Fund  |  13


Consolidated portfolio of investments—December 31, 2019 (unaudited)

 

Reference asset          Shares     Value     % of swap
basket value
 

Transportation Infrastructure

        

Atlas Arteria Limited

       (43,207   $ (237,410     (1.27 ) %  

Transurban Group

       (48,380     (506,204     (2.71
         (6,692,696  
      

 

 

   

Information Technology

        

Electronic Equipment, Instruments & Components

        

Keyence Corporation

       (1,400     (491,594     (2.63

National Instruments Corporation

       (8,171     (345,960     (1.85

IT Services

        

Black Knight Incorporated

       (4,470     (288,226     (1.54

WEX Incorporated

       (1,256     (263,082     (1.41

Semiconductors & Semiconductor Equipment

        

ASML Holding NV

       (2,111     (624,418     (3.34

Nvidia Corporation

       (2,943     (692,488     (3.70

Qualcomm Incorporated

       (10,608     (935,944     (5.01

Software

        

Guidewire Software Incorporated

       (1,830     (200,879     (1.07

salesforce.com Incorporated

       (3,895     (633,483     (3.39

SAP SE

       (2,917     (392,623     (2.10

Technology Hardware, Storage & Peripherals

        

Apple Incorporated

       (4,271     (1,254,179     (6.71
         (6,122,876  
      

 

 

   

Materials

        

Chemicals

        

Corteva Incorporated

       (18,562     (548,693     (2.93

Dupont De Nemours Incorporated

       (15,579     (1,000,172     (5.35

Nutrien Limited

       (23,400     (1,120,310     (5.99

Metals & Mining

        

Pan American Silver Corporation

       (9,900     (234,511     (1.25
         (2,903,686  
      

 

 

   

Real Estate

        

Equity REITs

        

British Land Company plc

       (145,318     (1,229,615     (6.58

Hammerson plc

       (47,925     (195,967     (1.05

Kilroy Realty Corporation

       (2,572     (215,791     (1.15

Land Securities Group plc

       (95,308     (1,249,825     (6.68

VICI Properties Incorporated

       (15,645     (399,730     (2.14

Real Estate Management & Development

        

Capital & Counties Properties plc

       (112,977     (391,632     (2.09
         (3,682,560  
      

 

 

   

Utilities

        

Electric Utilities

        

CK Infrastructure Holdings Limited

       (36,000     (256,176     (1.37

EDF Group

       (77,524     (863,326     (4.62
         (1,119,502  
      

 

 

   

Abbreviations:

 

REIT

Real estate investment trust

 

The accompanying notes are an integral part of these financial statements.

 

 

14  |  Wells Fargo Alternative Risk Premia Fund


Consolidated statement of assets and liabilities—December 31, 2019 (unaudited)

 

         

Assets

 

Investments in unaffiliated securities, at value (cost $90,808,376)

  $ 90,833,280  

Investments in affiliated securities, at value (cost $5,734,600)

    5,734,600  

Cash at broker segregated for forward foreign currency contracts

    1,610,000  

Receivable for dividends

    9,156  

Unrealized gains on forward foreign currency contracts

    757,521  

Prepaid expenses and other assets

    48,300  
 

 

 

 

Total assets

    98,992,857  
 

 

 

 

Liabilities

 

Payable for daily variation margin on open futures contracts

    862,611  

Overdraft due to custodian bank

    451  

Cash due to broker (including foreign currency), at value (cost $159)

    166  

Unrealized losses on swap contracts

    70,815  

Unrealized losses on forward foreign currency contracts

    2,553,055  

Management fee payable

    17,828  

Administration fees payable

    2,545  

Trustees’ fees and expenses payable

    5,168  

Accrued expenses and other liabilities

    89,724  
 

 

 

 

Total liabilities

    3,602,363  
 

 

 

 

Total net assets

  $ 95,390,494  
 

 

 

 

Net assets consist of

 

Paid-in capital

  $ 97,858,837  

Total distributable loss

    (2,468,343
 

 

 

 

Total net assets

  $ 95,390,494  
 

 

 

 

Computation of net asset value

 

Net assets – Class R6

  $ 95,366,787  

Shares outstanding – Class R61

    10,056,739  

Net asset value per share – Class R6

    $9.48  

Net assets – Institutional Class

  $ 23,707  

Shares outstanding – Institutional Class1

    2,500  

Net asset value per share – Institutional Class

    $9.48  

 

 

 

 

1 

The Fund has an unlimited number of authorized shares.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Alternative Risk Premia Fund  |  15


Consolidated statement of operations—six months ended December 31, 2019 (unaudited)

 

         

Investment income

 

Interest

  $ 817,910  

Income from affiliated securities

    81,765  
 

 

 

 

Total investment income

    899,675  
 

 

 

 

Expenses

 

Management fee

    272,287  

Administration fees

 

Class R6

    13,611  

Institutional Class

    17  

Custody and accounting fees

    11,657  

Professional fees

    65,636  

Registration fees

    22,809  

Shareholder report expenses

    61,666  

Trustees’ fees and expenses

    10,297  

Other fees and expenses

    13,684  
 

 

 

 

Total expenses

    471,664  

Less: Fee waivers and/or expense reimbursements

 

Fund-level

    (190,634
 

 

 

 

Net expenses

    281,030  
 

 

 

 

Net investment income

    618,645  
 

 

 

 

Realized and unrealized gains (losses) on investments

 

Net realized gains (losses) on

 

Unaffiliated securities and foreign currency

    34,644  

Futures contracts

    567,478  

Forward foreign currency contracts

    2,250,586  

Swap contracts

    (2,354,577
 

 

 

 

Net realized gains on investments

    498,131  
 

 

 

 

Net change in unrealized gains (losses) on

 

Unaffiliated securities

    7,511  

Futures contracts

    (1,412,655

Forward foreign currency contracts

    (1,755,342

Swap contracts

    (88,559
 

 

 

 

Net change in unrealized gains (losses) on investments

    (3,249,045
 

 

 

 

Net realized and unrealized gains (losses) on investments

    (2,750,914
 

 

 

 

Net decrease in net assets resulting from operations

  $ (2,132,269
 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

16  |  Wells Fargo Alternative Risk Premia Fund


Consolidated statement of changes in net assets

 

       
     Six months ended
December 31, 2019
(unaudited)
    Year ended
June 30, 20191
 

Operations

        

Net investment income

    $ 618,645        $ 293,577  

Net realized gains (losses) on investments

      498,131          (1,635,932

Net change in unrealized gains (losses) on investments

      (3,249,045        323,292  
 

 

 

 

Net decrease in net assets resulting from operations

      (2,132,269        (1,019,063
 

 

 

 

Distributions to shareholders from net investment income and net realized gains

        

Class R6

      (1,035,896        0  

Institutional Class

      (233        0  
 

 

 

 

Total distributions to shareholders

      (1,036,129        0  
 

 

 

 

Capital share transactions

    Shares         Shares     

Proceeds from shares sold

        

Class R6

    6,797,251       66,868,902       3,997,500        39,975,000  

Institutional Class

    0       0       2,500        25,000  
 

 

 

 
      66,868,902          40,000,000  
 

 

 

 

Reinvestment of distributions

        

Class R6

    64,136       622,954       0        0  
 

 

 

 

Payment for shares redeemed

        

Class R6

    (802,148     (7,913,901     0        0  
 

 

 

 

Net increase in net assets resulting from capital share transactions

      59,577,955          40,000,000  
 

 

 

 

Total increase in net assets

      56,409,557          38,980,937  
 

 

 

 

Net assets

        

Beginning of period

      38,980,937          0  
 

 

 

 

End of period

    $ 95,390,494        $ 38,980,937  
 

 

 

 

 

 

 

1 

For the period from January 29, 2019 (commencement of operations) to June 30, 2019

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Alternative Risk Premia Fund  |  17


Consolidated financial highlights

 

(For a share outstanding throughout each period)

 

CLASS R6   Six months ended
December 31, 2019
(unaudited)
   

Year ended

June 30, 20191

 

Net asset value, beginning of period

    $9.75       $10.00  

Net investment income

    0.07 2      0.07  

Net realized and unrealized gains (losses) on investments

    (0.24     (0.32
 

 

 

   

 

 

 

Total from investment operations

    (0.17     (0.25

Distributions to shareholders from

   

Net investment income

    (0.03     0.00  

Net realized gains

    (0.07     0.00  
 

 

 

   

 

 

 

Total distributions to shareholders

    (0.10     0.00  

Net asset value, end of period

    $9.48       $9.75  

Total return3

    (1.63 )%      (2.50 )% 

Ratios to average net assets (annualized)

   

Gross expenses

    1.04     1.56

Net expenses

    0.62     0.62

Net investment income

    1.36     1.78

Supplemental data

   

Portfolio turnover rate

    0     0

Net assets, end of period (000s omitted)

    $95,367       $38,957  

 

 

 

 

1 

For the period from January 29, 2019 (commencement of class operations) to June 30, 2019

 

2 

Calculated based upon average shares outstanding

 

3 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

18  |  Wells Fargo Alternative Risk Premia Fund


Consolidated financial highlights

 

(For a share outstanding throughout each period)

 

INSTITUTIONAL CLASS   Six months ended
December 31, 2019
(unaudited)
   

Year ended

June 30, 20191

 

Net asset value, beginning of period

    $9.74       $10.00  

Net investment income

    0.06       0.07  

Net realized and unrealized gains (losses) on investments

    (0.23     (0.33
 

 

 

   

 

 

 

Total from investment operations

    (0.17     (0.26

Distributions to shareholders from

   

Net investment income

    (0.02     0.00  

Net realized gains

    (0.07     0.00  
 

 

 

   

 

 

 

Total distributions to shareholders

    (0.09     0.00  

Net asset value, end of period

    $9.48       $9.74  

Total return2

    (1.74 )%      (2.60 )% 

Ratios to average net assets (annualized)

   

Gross expenses

    1.17     1.68

Net expenses

    0.72     0.72

Net investment income

    1.28     1.69

Supplemental data

   

Portfolio turnover rate

    0     0

Net assets, end of period (000s omitted)

    $24       $24  

 

 

 

 

1 

For the period from January 29, 2019 (commencement of class operations) to June 30, 2019

 

2 

Returns for periods of less than one year are not annualized.

 

The accompanying notes are an integral part of these financial statements.

 

 

Wells Fargo Alternative Risk Premia Fund  |  19


Consolidated notes to financial statements (unaudited)

 

1. ORGANIZATION

Wells Fargo Funds Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Wells Fargo Alternative Risk Premia Fund (the “Fund”) which is a diversified series of the Trust.

2. INVESTMENT IN SUBSIDIARY

The Fund invests in direct or indirect investments in various derivatives, including commodity-linked derivatives, through Alt Risk Premia Special Investments (Cayman) Ltd. (the “Subsidiary”), a wholly owned subsidiary incorporated on October 2, 2018 under the laws of the Cayman Islands as an exempted segregated portfolio company with limited liability. As of December 31, 2019, the Subsidiary had $3,171,682 invested in securities and futures contracts representing 70.59% of its net assets. The Fund is the sole shareholder of the Subsidiary. As of December 31, 2019, the Fund held $4,493,262 in the Subsidiary, representing 4.71% of the Fund’s net assets prior to consolidation.

The consolidated financial statements of the Fund include the financial results of the Subsidiary. The Consolidated Portfolio of Investments includes positions of the Fund and the Subsidiary and the consolidated financial statements include the accounts of the Fund and the Subsidiary. Accordingly, all interfund balances and transactions between the Fund and the Subsidiary have been eliminated in consolidation.

3. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which are consistently followed in the preparation of the consolidated financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Securities valuation

All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.

Futures contracts that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price. If no sale occurs on the principal exchange or market that day, a fair value price will be determined in accordance with the Fund’s Valuation Procedures.

Forward foreign currency contracts are recorded at the forward rate provided by an independent foreign currency pricing source at a time each business day specified by the Wells Fargo Asset Management Pricing Committee at Wells Fargo Funds Management, LLC (“Funds Management”).

Swaps contracts are valued at the evaluated price provided by an independent pricing service or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g. taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

Investments in registered open-end investment companies 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 in good faith by the Board of Trustees of the Fund. The Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities, unless the determination has been delegated to the Wells Fargo Asset Management Pricing Committee. The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Valuation Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees receives reports on any valuation actions taken by the Valuation Committee or the Wells Fargo Asset Management Pricing Committee which may include items for ratification.

Foreign currency translation

The accounting records of the Fund are maintained in U.S. dollars. The values of other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at rates provided by an independent foreign currency pricing source at a time

 

 

20  |  Wells Fargo Alternative Risk Premia Fund


Consolidated notes to financial statements (unaudited)

 

each business day specified by the Wells Fargo Asset Management Pricing Committee. Purchases and sales of securities, and income and expenses are converted at the rate of exchange on the respective dates of such transactions. Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and liabilities other than investments in securities resulting from changes in exchange rates. The changes in net assets arising from changes in exchange rates of securities and the changes in net assets resulting from changes in market prices of securities are not separately presented. Such changes are included in net realized and unrealized gains or losses from investments.

Forward foreign currency contracts

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 forward foreign currency contracts. The Fund is subject to foreign currency risk and may 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 on the contracts. This risk may be mitigated if there is a master netting arrangement between the Fund and the counterparty.

Futures contracts

Futures contracts are agreements between the Fund and a counterparty to buy or sell a specific amount of a commodity, financial instrument or currency at a specified price and on a specified date. The Fund may buy and sell futures contracts in order to gain exposure to, or protect against, changes in interest rates, security values, commodities, and foreign exchange rates and is subject to interest rate risk, equity price risk, commodity risk, and foreign currency risk. 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 generally entered into on a regulated futures exchange and cleared through a clearinghouse associated with the exchange. With futures contracts, there is minimal counterparty risk to the Fund since futures contracts are exchange traded and the exchange’s clearinghouse, as the counterparty to all exchange traded futures, guarantees the futures contracts against default.

Upon entering into a futures contracts, the Fund is required to deposit either cash or securities (initial margin) with the broker in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are paid to or from the broker each day equal to the daily changes in the contract value. Such payments are recorded as unrealized gains or losses and, if any, shown as variation margin receivable (payable) in the Consolidated Statement of Assets and Liabilities. Should the Fund fail to make requested variation margin payments, the broker can gain access to the initial margin to satisfy the Fund’s payment obligations. When the contracts are closed, a realized gain or loss is recorded in the Consolidated Statement of Operations.

Swap contracts

Swap contracts are agreements between the Fund and a counterparty to exchange a series of cash flows over a specified period. Swap agreements are privately negotiated contracts between the Fund that are entered into as bilateral contracts in the OTC market (“OTC swaps”) or centrally cleared (“centrally cleared swaps”) with a central clearinghouse.

The Fund entered into OTC swaps. For OTC swaps, any upfront premiums paid and any upfront fees received are shown as swap premiums paid and swap premiums received, respectively, in the Consolidated Statement of Assets and Liabilities and amortized over the term of the contract. The daily fluctuations in market value are recorded as unrealized gains or losses on OTC swaps in the Consolidated Statement of Assets and Liabilities. Payments received or paid are recorded in the Consolidated Statement of Operations as realized gains or losses, respectively. When an OTC swap is terminated, a realized gain or loss is recorded in the Consolidated Statement of Operations equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract, if any. Generally, the basis of the contract is the premium received or paid.

Total return basket swaps

The Fund may enter into total return basket swap contracts to obtain exposure to a custom basket of long and short securities without owning such securities. The Fund has the ability to trade in and out of the long and short positions within the swap and receives the economic benefits and risks equivalent to direct investments in these positions. Under the terms

 

 

Wells Fargo Alternative Risk Premia Fund  |  21


Consolidated notes to financial statements (unaudited)

 

of the contract, the Fund and the counterparty exchange periodic payments based on the total return of reference assets within a basket for a specified interest rate. Benefits and risks include capital appreciation (depreciation), corporate actions and dividends received and paid, all of which are reflected in the swap’s market value. The market value also includes interest charges and credits (“financing fees”) related to the notional values of the long and short positions and cash balances within the swap. To the extent the total return of the reference assets exceeds or falls short of the offsetting interest rate obligation, the Fund will receive a payment from, or make a payment to, the counterparty. Positions within the swap are reset periodically. During a reset, any unrealized appreciation (depreciation) on positions and accrued financing fees become available for cash settlement between the Fund and the counterparty. The amounts that are available for cash settlement are recorded as realized gains or losses on swap contracts in the Consolidated Statement of Operations. Cash settlement in and out of the swap may occur at a reset date or any other date, at the discretion of the Fund and the counterparty, over the life of the agreement. Certain swaps have no stated expiration and can be terminated by either party at any time.

The Fund is exposed to risks if the counterparty defaults on its obligation to perform, or if there are unfavorable changes in the fluctuation of interest rates or in the price of the reference securities in the basket. In addition to counterparty credit risk, the Fund is subject to liquidity risk if there is no market for the contracts and is exposed to the market risk associated with the reference securities in the basket.

Security transactions and income recognition

Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. 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 been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Distributions to shareholders

Distributions to shareholders from net investment income and any net realized gains are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.

Federal and other taxes

The Fund intends to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.

The Subsidiary is classified as a controlled foreign corporation under Subchapter N of the Internal Revenue Code. Therefore, the Fund is required to increase its taxable income by its share of the Subsidiary’s income. Net investment losses of the Subsidiary cannot be deducted by the Fund in the current period nor carried forward to offset taxable income in future periods.

The Fund is not subject to examination by federal and state tax authorities for taxes before 2019, the year the Fund commenced operations.

As of December 31, 2019, the aggregate cost of all investments for federal income tax purposes was $96,878,601 and the unrealized gains (losses) consisted of:

 

Gross unrealized gains

   $ 2,281,990  

Gross unrealized losses

     (5,543,375

Net unrealized losses

   $ (3,261,385

Class allocations

The separate classes of shares offered by the Fund differ principally in administration fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.

 

 

22  |  Wells Fargo Alternative Risk Premia Fund


Consolidated notes to financial statements (unaudited)

 

4. FAIR VALUATION MEASUREMENTS

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:

 

 

Level 1 – quoted prices in active markets for identical securities

 

 

Level 2 – other significant observable inputs (including quoted prices for similar securities, 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 investments in securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of December 31, 2019:

 

      Quoted prices
(Level 1)
     Other significant
observable inputs
(Level 2)
    

Significant
unobservable inputs

(Level 3)

     Total  

Assets

           

Investments in:

           

Short-term investments

           

Investment companies

   $ 5,734,600      $ 0      $ 0      $ 5,734,600  

U.S. Treasury securities

     90,833,280        0        0        90,833,280  
     96,567,880        0        0        96,567,880  

Futures contracts

     1,142,555        0        0        1,142,555  

Forward foreign currency contracts

     0        757,521        0        757,521  

Total assets

   $ 97,710,435      $ 757,521      $ 0      $ 98,467,956  

Liabilities

           

Futures contracts

   $ 2,226,870      $ 0      $ 0      $ 2,226,870  

Forward foreign currency contracts

     0        2,553,055        0        2,553,055  

Swap contracts

     0        70,815        0        70,815  

Total liabilities

   $ 2,226,870      $ 2,623,870      $ 0      $ 4,850,740  

Futures contracts, forward foreign currency contracts and swap contracts are reported at their cumulative unrealized gains (losses) at measurement date as reported in the tables following the Consolidated Portfolio of Investments. For futures contracts, the current day’s variation margin is reported on the Consolidated Statements of Assets and Liabilities. All other assets and liabilities are reported at their market value at measurement date.

For the six months ended December 31, 2019, the Fund did not have any transfers into/out of Level 3.

5. TRANSACTIONS WITH AFFILIATES

Management fee

Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”), is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadvisers and providing fund-level administrative services

 

 

Wells Fargo Alternative Risk Premia Fund  |  23


Consolidated notes to financial statements (unaudited)

 

in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:

 

Average daily net assets    Management fee

First $500 million

   0.600%

Next $500 million

   0.575

Next $2 billion

   0.550

Next $2 billion

   0.525

Next $5 billion

   0.490

Over $10 billion

   0.480

For the six months ended December 31, 2019, the management fee was equivalent to an annual rate of 0.60% of the Fund’s average daily net assets.

The Subsidiary has entered into a separate advisory contract with Funds Management to manage the investment and reinvestment of its assets in conformity with its investment objectives and restrictions. Under this agreement, the Subsidiary does not pay Funds Management a fee for its services.

Funds Management has retained the services of certain subadvisers to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Funds Management. Wells Capital Management Incorporated (“WellsCap”) and Wells Fargo Asset Management (International) Limited (“WFAM(I) Ltd”), each an affiliate of Funds Management and an indirect wholly owned subsidiary of Wells Fargo, serve as subadvisers to the Fund. WellsCap receives a subadvisory fee at an annual rate starting at 0.20% and declining to 0.10% as the average daily net assets of the Fund increase. WFAM(I) Ltd receives a subadvisory fee for its asset allocation services at an annual rate of 0.10% of the Fund’s average daily net assets and a fee for portfolio management services on the assets it co-manages with WellsCap at an annual rate starting at 0.15% and declining to 0.075%. Effective August 1, 2019, Wells Fargo Asset Management (International), LLC, the subadviser at the time to the Fund, had merged with WFAM(I) Ltd and WFAM(I) Ltd became the subadviser to the Fund. This transaction did not result in any changes to the services provided to the Fund or to the strategies or fees and expenses.

Administration fees

Under a class-level administration agreement, Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Funds Management receives an annual fee which is calculated based on the average daily net assets of each class as follows:

 

      Class-level
administration fee

Class R6

   0.03%

Institutional Class

   0.13

Waivers and/or expense reimbursements

Funds Management has contractually waived and/or reimbursed management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Funds Management has waived fees and/or reimbursed expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Funds Management has committed through December 4, 2020 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s expenses at 0.62% for Class R6 shares and 0.72% for Institutional Class shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.

Interfund transactions

The Fund may purchase or sell portfolio investment securities to certain other Wells Fargo affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices.

 

 

24  |  Wells Fargo Alternative Risk Premia Fund


Consolidated notes to financial statements (unaudited)

 

6. INVESTMENT PORTFOLIO TRANSACTIONS

For the six months ended December 31, 2019, the Fund did not have any purchases and sales of securities, excluding any short-term securities.

7. DERIVATIVE TRANSACTIONS

During the six months ended December 31, 2019, the Fund entered into futures contracts, forward foreign currency contracts, and swap contracts to gain market exposures as a substitute for taking a position in the underlying security or basket of securities aiming to achieve Fund’s risk return objective.

The volume of the Fund’s derivative activity during the six months ended December 31, 2019 was as follows:

 

Futures contracts

  

Average notional balance on long futures

   $ 155,800,712  

Average notional balance on short futures

     37,376,371  

Forward foreign currency contracts

  

Average contract amounts to buy

   $ 77,088,138  

Average contract amounts to sell

     97,495,567  

Swap contracts

  

Average notional balance

   $ 16,499,780  

The Fund’s swap transactions may contain provisions for early termination in the event the net assets of the Fund declines below specific levels identified by the counterparty. If these levels are triggered, the counterparty may terminate the transaction and seek payment or request full collateralization of the derivative transactions in net liability positions.

A summary of the location of derivative instruments on the financial statements by primary risk exposure is outlined in the following tables.

The fair value of derivative instruments as of December 31, 2019 by risk type was as follows for the Fund:

 

    

Asset derivatives

    

Liability derivatives

 
      Consolidated Statement of
Assets and Liabilities location
   Fair value      Consolidated Statement of
Assets and Liabilities location
   Fair value  

Interest rate risk

   Unrealized gains on futures contracts    $ 0    Unrealized losses on futures contracts    $ 871,155

Commodity risk

   Unrealized gains on futures contracts      822,094    Unrealized losses on futures contracts      1,323,104

Equity risk

   Unrealized gains on futures contracts      320,461    Unrealized losses on futures contracts      32,611
   Unrealized gains on swap contracts      0      Unrealized losses on swap contracts      70,815  

Foreign currency

risk

   Unrealized gains on forward foreign currency contracts      757,521      Unrealized losses on forward foreign currency contracts      2,553,055  
          $ 1,900,076           $ 4,850,740  

 

*

Amount represents cumulative unrealized gains (losses) as reported in the table following the Consolidated Portfolio of Investments. Only the current day’s variation margin as of December 31, 2019 is reported separately on the Consolidated Statement of Assets and Liabilities.

 

 

Wells Fargo Alternative Risk Premia Fund  |  25


Consolidated notes to financial statements (unaudited)

 

The effect of derivative instruments on the Consolidated Statement of Operations for the six months ended December 31, 2019 was as follows for the Fund:

 

       Amount of realized gains (losses) on derivatives  
        Futures
contracts
       Forward
foreign
currency
contracts
       Swap
contracts
       Total  

Interest rate risk

     $ (10,523      $ 0        $ 0        $ (10,523

Commodity risk

       159,918          0          0          159,918  

Equity risk

       418,083          0          (2,354,577        (1,936,494

Foreign currency risk

       0          2,250,586          0          2,250,586  
       $ 567,478        $ 2,250,586        $ (2,354,577      $ 463,487  
       Change in unrealized gains (losses) on derivatives  
       Futures
contracts
       Forward
foreign
currency
contracts
       Swap
contracts
       Total  

Interest rate risk

     $ (1,016,200      $ 0        $ 0        $ (1,016,200

Commodity risk

       (578,774        0          0          (578,774

Equity risk

       182,319          0          (88,559        93,760  

Foreign currency risk

       0          (1,755,342        0          (1,755,342
       $ (1,412,655      $ (1,755,342      $ (88,559      $ (3,256,556

For certain types of derivative transactions, the Fund has entered into International Swaps and Derivatives Association, Inc. master agreements (“ISDA Master Agreements”) or similar agreements with approved counterparties. The ISDA Master Agreements or similar agreements may have requirements to deliver/deposit securities or cash to/with an exchange or broker-dealer as collateral and allows the Fund to offset, with each counterparty, certain derivative financial instrument’s assets and/or liabilities with collateral held or pledged. Collateral requirements differ by type of derivative. Collateral or margin requirements are set by the broker or exchange clearinghouse for exchange traded derivatives while collateral terms are contract specific for over-the-counter traded derivatives. Cash collateral that has been pledged to cover obligations of the Fund under ISDA Master Agreements or similar agreements, if any, are reported separately in the Consolidated Statement of Assets and Liabilities. Securities pledged as collateral, if any, are noted in the Consolidated Portfolio of Investments. With respect to balance sheet offsetting, absent an event of default by the counterparty or a termination of the agreement, the reported amounts of financial assets and financial liabilities in the Consolidated Statement of Assets and Liabilities are not offset across transactions between the Fund and the applicable counterparty. A reconciliation of the gross amounts on the Consolidated Statement of Assets and Liabilities to the net amounts by counterparty, including any collateral exposure, for OTC derivatives is as follows:

 

Counterparty      Gross amounts
of assets in the
Consolidated
Statement of
Assets and
Liabilities
     Amounts
subject to
netting
agreements
     Collateral
received
       Net amount
of assets
 

Goldman Sachs

     $757,521      $(757,521)      $ 0        $ 0  

 

Counterparty      Gross amounts
of liabilities in the
Consolidated
Statement of
Assets and
Liabilities
     Amounts
subject to
netting
agreements
     Collateral
pledged1
       Net amount
of liabilities
 

Goldman Sachs

     $2,623,870      $(757,521)      $ 1,610,000        $ 256,349  

 

1 

Collateral pledged within this table is limited to the collateral for the net transaction with the counterparty.

 

 

26  |  Wells Fargo Alternative Risk Premia Fund


Consolidated notes to financial statements (unaudited)

 

8. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and Trustees have been granted certain indemnification rights 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 Fund and, therefore, cannot be estimated.

9. NEW ACCOUNTING PRONOUNCEMENT

In August 2018, FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 updates the disclosure requirements for fair value measurements by modifying or removing certain disclosures and adding certain new disclosures. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. Management has adopted the removal and modification of disclosures early, as permitted, and will adopt the additional new disclosures at the effective date.

 

 

Wells Fargo Alternative Risk Premia Fund  |  27


Other information (unaudited)

 

PROXY VOTING INFORMATION

A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available, upon request, by calling 1-800-222-8222, visiting our website at wfam.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at wfam.com or by visiting the SEC website at sec.gov.

QUARTERLY PORTFOLIO HOLDINGS INFORMATION

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.

 

 

28  |  Wells Fargo Alternative Risk Premia Fund


Other information (unaudited)

 

BOARD OF TRUSTEES AND OFFICERS

Each of the Trustees and Officers1 listed in the table below acts in identical capacities for each fund in the Wells Fargo family of funds, which consists of 149 mutual funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). This table should be read in conjunction with the Prospectus and the Statement of Additional Information2. 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

 

Name and
year of birth
  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships
William R. Ebsworth
(Born 1957)
  Trustee,
since 2015
  Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Audit Committee Chair and Investment Committee Chair of the Vincent Memorial Hospital Endowment (non-profit organization). Mr. Ebsworth is a CFA® charterholder.   N/A
Jane A. Freeman
(Born 1953)
  Trustee,
since 2015;
Chair Liaison,
since 2018
  Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is a Board Member of The Ruth Bancroft Garden (non-profit organization). She is also an inactive Chartered Financial Analyst.   N/A
Isaiah Harris, Jr.
(Born 1952)
  Trustee,
since 2009;
Audit Committee Chairman,
since 2019
  Retired. Chairman of the Board of CIGNA Corporation since 2009, and Director since 2005. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (private school). Advisory Board Member, Child Evangelism Fellowship (non-profit). Mr. Harris is a certified public accountant (inactive status).   CIGNA Corporation
Judith M. Johnson
(Born 1949)
  Trustee,
since 2008;
Audit Committee Chairman, from 2009 to 2018
  Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.   N/A

 

 

Wells Fargo Alternative Risk Premia Fund  |  29


Other information (unaudited)

 

Name and
year of birth
  Position held and
length of service*
  Principal occupations during past five years or longer   Current other
public company or
investment
company
directorships
David F. Larcker
(Born 1950)
  Trustee,
since 2009
  James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.   N/A
Olivia S. Mitchell
(Born 1953)
  Trustee,
since 2006;
Nominating and Governance Committee Chair, since 2018
  International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993.   N/A
Timothy J. Penny
(Born 1951)
  Trustee,
since 1996;
Chairman,
since 2018
  President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.   N/A
James G. Polisson
(Born 1959)
  Trustee,
since 2018
  Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations.   N/A
Pamela Wheelock3
(Born 1959)
  Trustee, since January 2020;
previously Trustee
from January 2018 to July 2019
  Board member of the Destination Medical Center Economic Development Agency, Rochester, Minnesota since 2019. Acting Commissioner, Minnesota Department of Human Services, July 2019 through September 2019. Human Services Manager (part-time), Minnesota Department of Human Services, October 2019 through December 2019. Chief Operating Officer, Twin Cities Habitat for Humanity from 2017 to 2019. Vice President of University Services, University of Minnesota from 2012 to 2016. Prior thereto, on the Board of Directors, Governance Committee and Finance Committee for the Minnesota Philanthropy Partners (Saint Paul Foundation) from 2012 to 2018, Interim Chief Executive Officer of Blue Cross Blue Shield of Minnesota from 2011 to 2012, Chairman of the Board from 2009 to 2012 and Board Director from 2003 to 2015. Vice President, Leadership and Community Engagement, Bush Foundation, Saint Paul, Minnesota (a private foundation) from 2009 to 2011. Executive Vice President and Chief Financial Officer, Minnesota Sports and Entertainment from 2004 to 2009 and Senior Vice President from 2002 to 2004. Executive Vice President of the Minnesota Wild Foundation from 2004 to 2008. Commissioner of Finance, State of Minnesota, from 1999 to 2002. Currently Board Chair of the Minnesota Wild Foundation since 2010.   N/A

 

*

Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.

 

 

30  |  Wells Fargo Alternative Risk Premia Fund


Other information (unaudited)

 

Officers

 

Name and
year of birth
  Position held and
length of service
  Principal occupations during past five years or longer
Andrew Owen
(Born 1960)
  President,
since 2017
  Executive Vice President of Wells Fargo & Company and Head of Affiliated Managers, Wells Fargo Asset Management, since 2014. In addition, Mr. Owen is currently President, Chief Executive Officer and Director of Wells Fargo Funds Management, LLC since 2017. Prior thereto, Executive Vice President responsible for marketing, investments and product development for Wells Fargo Funds Management, LLC, from 2009 to 2014.
Jeremy DePalma1
(Born 1974)
  Treasurer,
since 2012
  Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.
Michelle Rhee4
(Born 1966)
  Chief Legal Officer,
since 2019
  Secretary of Wells Fargo Funds Management, LLC, Chief Legal Counsel of Wells Fargo Asset Management and Assistant General Counsel of Wells Fargo Bank, N.A. since 2018. Associate General Counsel and Managing Director of Bank of America Corporation from 2004 to 2018.
Catherine Kennedy5
(Born 1969)
  Secretary,
since 2019
  Vice President of Wells Fargo Funds Management, LLC and Senior Counsel of the Wells Fargo Legal Department since 2010. Vice President and Senior Counsel of Evergreen Investment Management Company, LLC from 1998 to 2010.
Michael H. Whitaker
(Born 1967)
  Chief Compliance Officer,
since 2016
  Chief Compliance Officer of Wells Fargo Asset Management since 2016. Senior Vice President and Chief Compliance Officer for Fidelity Investments from 2007 to 2016.
David Berardi
(Born 1975)
  Assistant Treasurer,
since 2009
  Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.

 

 

 

1

Jeremy DePalma acts as Treasurer of 85 funds and Assistant Treasurer of 64 funds in the Fund Complex.

 

2

The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request, by calling 1-800-222-8222 or by visiting the website at wfam.com.

 

3 

Pamela Wheelock was re-appointed to the Board effective January 1, 2020.

 

4 

Michelle Rhee became Chief Legal Officer effective October 22, 2019.

 

5 

Catherine Kennedy became Secretary effective October 22, 2019.

 

 

Wells Fargo Alternative Risk Premia Fund  |  31


 

This page is intentionally left blank.


LOGO

For more information

More information about Wells Fargo Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:

Wells Fargo Funds

P.O. Box 219967

Kansas City, MO 64121-9967

Website: wfam.com

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

 

LOGO

 

This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-222-8222 or visit the Fund’s website at wfam.com. Read the prospectus carefully before you invest or send money.

Wells Fargo Asset Management (WFAM) is the trade name for certain investment advisory/management firms owned by Wells Fargo & Company. These firms include but are not limited to Wells Capital Management Incorporated and Wells Fargo Funds Management, LLC. Certain products managed by WFAM entities are distributed by Wells Fargo Funds Distributor, LLC (a broker-dealer and Member FINRA).

This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind—including a recommendation for any specific investment, strategy, or plan.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED    NO BANK GUARANTEE     MAY LOSE VALUE


 

© 2020 Wells Fargo & Company. All rights reserved.

PAR-0120-02383 02-20

SA295/SAR295 12-19

 

 



ITEM 2.

 CODE OF ETHICS

Not applicable.

 

ITEM 3.

 AUDIT COMMITTEE FINANCIAL EXPERT

Not applicable.

 

ITEM 4.

 PRINCIPAL ACCOUNTANT FEES AND SERVICES

Not applicable.

 

ITEM 5.

 AUDIT COMMITTEE OF LISTED REGISTRANTS

Not applicable.

 

ITEM 6.

 INVESTMENTS

A Portfolio of Investments for each series of Wells Fargo Funds Trust is included as part of the report to shareholders filed under Item 1 of this Form.

 

ITEM 7. 

DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable.

 

ITEM 8. 

PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable.

 

ITEM 9. 

PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMEENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS

Not applicable.

 

ITEM 10.

 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees that have been implemented since the registrant’s last provided disclosure in response to the requirements of this Item.


ITEM 11. 

CONTROLS AND PROCEDURES

(a) The President and Treasurer have concluded that the Wells Fargo Funds 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 registrant 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 registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the most recent fiscal half-year 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. 

DISCLOSURES OF SECURITIES LENDING ACTIVITES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable.

 

ITEM 13. 

EXHIBITS

(a)(1) Not applicable.

(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.

(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.


LOGO

 

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/Andrew Owen
  Andrew Owen
  President
Date:   February 25, 2020

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.

 

Wells Fargo Funds Trust
By:  
  /s/Andrew Owen
  Andrew Owen
  President
Date:   February 25, 2020
By:  
  /s/Nancy Wiser
  Nancy Wiser
  Treasurer
Date:   February 25, 2020
By:  
  /s/Jeremy DePalma
  Jeremy DePalma
  Treasurer
Date:   February 25, 2020