UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-09255

Wells Fargo Variable Trust

(Exact name of registrant as specified in charter)

525 Market St., San Francisco, CA 94105

(Address of principal executive offices) (Zip code)

C. David Messman

Wells Fargo Funds Management, LLC

525 Market St., San Francisco, CA 94105

(Name and address of agent for service)

Registrant’s telephone number, including area code: 800-222-8222

Date of fiscal year end:	December 31, 2011
Date of reporting period:	December 31, 2011

ITEM 1. REPORT TO SHAREHOLDERS

Wells Fargo Advantage VT Discovery Fund^SM

Annual Report

December 31, 2011

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

Contents

Letter to Shareholders	2
Performance Highlights	5
Fund Expenses	9
Portfolio of Investments	10
Financial Statements
Statement of Assets and Liabilities	15
Statement of Operations	16
Statements of Changes in Net Assets	17
Financial Highlights	18
Notes to Financial Statements	19
Report of Independent Registered Public Accounting Firm	24
Other Information	25
List of Abbreviations	28

The views expressed and any forward-looking statements are as of December 31, 2011, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Funds Management, LLC. Discussions of individual securities, or the markets generally, or any Wells Fargo Advantage Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements; the views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Funds Management, LLC, disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

WELLS FARGO INVESTMENT HISTORY

1932	Keystone creates one of the first mutual fund families.
1971	Wells Fargo & Company introduces one of the first institutional index funds.
1978	Wells Fargo applies Markowitz and Sharpe’s research on Modern Portfolio Theory to introduce one of the industry’s first Tactical Asset Allocation (TAA) models in institutional separately managed accounts.
1984	Wells Fargo Stagecoach Funds launches its first asset allocation fund.
1989	The Tactical Asset Allocation (TAA) Model is first applied to Wells Fargo’s asset allocation mutual funds.
1994	Wells Fargo introduces the LifePath Funds, one of the first suites of target date funds (now the Wells Fargo Advantage Dow Jones Target Date FundsSM ).
1996	Evergreen Investments and Keystone Funds merge.
1997	Wells Fargo launches Wells Fargo Advantage WealthBuilder PortfoliosSM, a fund-of-funds suite of products that includes the use of quantitative models to shift assets among investment styles.
1999	Norwest Advantage Funds and Stagecoach Funds are reorganized into Wells Fargo Funds after the merger of Norwest and Wells Fargo.
2002	Evergreen Retail and Evergreen Institutional companies form the umbrella asset management company, Evergreen Investments.
2005	The integration of Strong Funds with Wells Fargo Funds creates Wells Fargo Advantage Funds, resulting in one of the top 20 mutual fund companies in the United States.
2006	Wells Fargo Advantage Funds relaunches the target date product line as Wells Fargo Advantage Dow Jones Target Date Funds.
2010	The mergers and reorganizations of Evergreen and Wells Fargo Advantage mutual funds are completed, unifying the families under the brand of Wells Fargo Advantage Funds.

Wells Fargo Advantage Funds^®

Wells Fargo Advantage Funds skillfully guides institutions, financial advisors, and individuals through the investment terrain to help them reach their financial objectives. Everything we do on behalf of investors is backed by our unique combination of qualifications.

Strength

Our organization is built on the standards of integrity and service established by our parent company—Wells Fargo & Company—more than 150 years ago. And, because we’re part of a highly diversified financial enterprise, we offer the depth of resources to help investors succeed.

Expertise

Our multi-boutique model offers investors access to the independent thinking of premier investment managers that have been chosen for their time-tested strategies. While each team specializes in a specific investment strategy, collectively they provide investors a wide choice of distinct investment styles. Our dedication to investment excellence doesn’t end with our expertise in manager selection—risk management, analysis, and rigorous ongoing review seek to ensure each manager’s investment process remains consistent.

Partnership

Our collaborative approach is built around understanding the needs and goals of our clients. By adhering to core principles of sound judgment and steady guidance, we support you through every stage of the investment decision process.

Carefully consider a fund’s investment objectives, risks, charges, and expenses before investing. For a current prospectus and, if available, a summary prospectus, containing this and other information, visit wellsfargo.com/advantagefunds. Read it carefully before investing.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds^®. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

“Dow Jones^®” and “Dow Jones Target Date Indexes^SM” are service marks of Dow Jones Trademark Holdings, LLC (“Dow Jones”), have been licensed to CME Group Index Services LLC (“CME Indexes”) and have been sublicensed for use for certain purposes by Global Index Advisors, Inc, and Wells Fargo Funds Management, LLC. The Wells Fargo Advantage Dow Jones Target Date Funds^SM based on the Dow Jones Target Date Indexes^SM, are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes or their respective affiliates and none of them makes any representation regarding the advisability of investing in such product(s).

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

Not part of the annual report.

Wells Fargo Advantage Funds offers more than 110 mutual funds across a wide range of asset classes, representing over $216 billion in assets under management, as of December 31, 2011.

Equity Funds
Asia Pacific Fund	Global Opportunities Fund	Premier Large Company Growth Fund
C&B Large Cap Value Fund	Growth Fund	Small Cap Opportunities Fund
C&B Mid Cap Value Fund	Health Care Fund	Small Cap Value Fund
Capital Growth Fund	Index Fund	Small Company Growth Fund
Common Stock Fund	International Equity Fund	Small Company Value Fund
Disciplined U.S. Core Fund	International Value Fund	Small/Mid Cap Core Fund
Discovery Fund†	Intrinsic Small Cap Value Fund	Small/Mid Cap Value Fund
Diversified Equity Fund	Intrinsic Value Fund	Social Sustainability Fund†
Diversified International Fund	Intrinsic World Equity Fund	Special Mid Cap Value Fund
Diversified Small Cap Fund	Large Cap Core Fund	Special Small Cap Value Fund
Emerging Growth Fund	Large Cap Growth Fund	Specialized Technology Fund
Emerging Markets Equity Fund	Large Company Value Fund	Strategic Large Cap Growth Fund
Endeavor Select Fund†	Omega Growth Fund	Traditional Small Cap Growth Fund
Enterprise Fund†	Opportunity Fund†	Utility and Telecommunications Fund
Equity Value Fund	Precious Metals Fund
Bond Funds
Adjustable Rate Government Fund	Inflation-Protected Bond Fund	Short-Term Bond Fund
California Limited-Term Tax-Free Fund	Intermediate Tax/AMT-Free Fund	Short-Term High Yield Bond Fund
California Tax-Free Fund	International Bond Fund	Short-Term Municipal Bond Fund
Colorado Tax-Free Fund	Minnesota Tax-Free Fund	Strategic Municipal Bond Fund
Government Securities Fund	Municipal Bond Fund	Total Return Bond Fund
High Income Fund	North Carolina Tax-Free Fund	Ultra Short-Term Income Fund
High Yield Bond Fund	Pennsylvania Tax-Free Fund	Ultra Short-Term Municipal Income Fund
Income Plus Fund	Short Duration Government Bond Fund	Wisconsin Tax-Free Fund
Asset Allocation Funds
Asset Allocation Fund	WealthBuilder Equity Portfolio†	Target 2020 Fund†
Conservative Allocation Fund	WealthBuilder Growth Allocation Portfolio†	Target 2025 Fund†
Diversified Capital Builder Fund	WealthBuilder Growth Balanced Portfolio†	Target 2030 Fund†
Diversified Income Builder Fund	WealthBuilder Moderate Balanced Portfolio†	Target 2035 Fund†
Growth Balanced Fund	WealthBuilder Tactical Equity Portfolio†	Target 2040 Fund†
Index Asset Allocation Fund	Target Today Fund†	Target 2045 Fund†
Moderate Balanced Fund	Target 2010 Fund†	Target 2050 Fund†
WealthBuilder Conservative Allocation Portfolio†	Target 2015 Fund†	Target 2055 Fund†
Money Market Funds
100% Treasury Money Market Fund	Heritage Money Market Fund†	National Tax-Free Money Market Fund
California Municipal Money Market Fund	Money Market Fund	Prime Investment Money Market Fund
Cash Investment Money Market Fund	Municipal Cash Management Money Market Fund	Treasury Plus Money Market Fund
Government Money Market Fund	Municipal Money Market Fund
Variable Trust Funds1
VT Discovery Fund†	VT Intrinsic Value Fund	VT Small Cap Growth Fund
VT Index Asset Allocation Fund	VT Omega Growth Fund	VT Small Cap Value Fund
VT International Equity Fund	VT Opportunity Fund†	VT Total Return Bond Fund

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Wells Fargo Advantage Money Market Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.

1. The Variable Trust Funds are generally available only through insurance company variable contracts.

† In this report, the Wells Fargo Advantage Discovery Fund^SM, Wells Fargo Advantage Endeavor Select Fund^SM, Wells Fargo Advantage Enterprise Fund^SM, Wells Fargo Advantage Opportunity Fund^SM, Wells Fargo Advantage Social Sustainability Fund^SM, Wells Fargo Advantage WealthBuilder Conservative Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Equity Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Moderate Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Tactical Equity Portfolio^SM, Wells Fargo Advantage Dow Jones Target Today Fund^SM, Wells Fargo Advantage Dow Jones Target 2010 Fund^SM, Wells Fargo Advantage Dow Jones Target 2015 Fund^SM, Wells Fargo Advantage Dow Jones Target 2020 Fund^SM, Wells Fargo Advantage Dow Jones Target 2025 Fund^SM, Wells Fargo Advantage Dow Jones Target 2030 Fund^SM, Wells Fargo Advantage Dow Jones Target 2035 Fund^SM, Wells Fargo Advantage Dow Jones Target 2040 Fund^SM, Wells Fargo Advantage Dow Jones Target 2045 Fund^SM, Wells Fargo Advantage Dow Jones Target 2050 Fund^SM, Wells Fargo Advantage Dow Jones Target 2055 Fund^SM, Wells Fargo Advantage Heritage Money Market Fund^SM, Wells Fargo Advantage VT Discovery Fund^SM, and Wells Fargo Advantage VT Opportunity Fund^SM are referred to as the Discovery Fund, Endeavor Select Fund, Enterprise Fund, Opportunity Fund, Social Sustainability Fund, WealthBuilder Conservative Allocation Portfolio, WealthBuilder Equity Portfolio, WealthBuilder Growth Allocation Portfolio, WealthBuilder Growth Balanced Portfolio, WealthBuilder Moderate Balanced Portfolio, WealthBuilder Tactical Equity Portfolio, Target Today Fund, Target 2010 Fund, Target 2015 Fund, Target 2020 Fund, Target 2025 Fund, Target 2030 Fund, Target 2035 Fund, Target 2040 Fund, Target 2045 Fund, Target 2050 Fund, Target 2055 Fund, Heritage Money Market Fund, VT Discovery Fund, and VT Opportunity Fund, respectively.

Not part of the annual report.

2 Wells Fargo Advantage VT Discovery Fund Letter to Shareholders

Karla M. Rabusch,

President

Wells Fargo Advantage Funds

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

Dear Valued Shareholder:

We’re pleased to offer you this annual report for the Wells Fargo Advantage VT Discovery Fund for the 12-month period that ended December 31, 2011.

For the full 12-month period, most of the major domestic equity indexes posted either modest gains or relatively mild losses. However, the market’s 12-month return figures mask the uneven path that it traced throughout the year as investors had to contend with a variety of global and domestic headwinds. Whatever the future holds, we continue to believe that most investors can benefit from adhering to a well-diversified investment strategy. Over the long-term, such a strategy may allow you to balance risks and opportunities as you pursue your financial goals in a dynamic market landscape.

The economic recovery gained traction as the year progressed.

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

2011 opened on a note of mounting optimism regarding the strength of the recovery, yet a batch of disappointing economic data in the spring and summer cast renewed doubts on the sustainability of the recovery. In September, it was reported that U.S. gross domestic product (GDP) grew at a mere 1.3% annual rate in the second quarter of 2011, following anemic growth at an annual rate of 0.4% in the first quarter. According to the December estimate, GDP growth accelerated to an annual rate of 1.8% in the third quarter, reigniting hopes for a sustainable recovery. Those hopes were buoyed by widespread anticipation of even stronger GDP growth in the fourth quarter. By the end of the 12-month period, few economists believed that the U.S. economy was in danger of sliding back into recession, although many expected a sluggish growth environment in 2012.

The struggling housing and labor markets slowed growth.

As has been the case throughout the recovery, the housing and labor markets continued to restrain economic momentum during 2011.

The beleaguered housing market has arguably exerted the biggest drag on growth. Despite intermittent signs of improvement, ongoing weakness in sales of both new and existing homes has put considerable downward pressure on prices. On the other hand, the labor market took a decided turn for the better in the latter half of the year: initial unemployment claims have eased in recent months, and the private sector has been steadily adding jobs. The pace of hiring, while not brisk, was sufficient to push the U.S. unemployment rate down to 8.5% as of December 2011—still well above its historical average, but at its lowest level since February 2009. Many observers expect the unemployment rate to decline further in 2012, which could act as a tailwind for consumer spending—widely viewed as one of the keys to long-term economic growth.

The Federal Reserve announced that it will keep rates low until 2013.

Consumers have already demonstrated some resilience in their spending—even in the face of higher energy costs. Oil prices skyrocketed in early 2011 before retreating later in the year, only to spike again during the fourth quarter. Yet “core” inflation, which excludes volatile energy and food prices, remained fairly benign throughout the year.

Letter to Shareholders Wells Fargo Advantage VT Discovery Fund 3

With inflation in check, the Federal Reserve (Fed) held its target range for the federal funds rate—a proxy for short-term interest rates—steady at 0% to 0.25%. Following its August 9 meeting, the Federal Open Market Committee (FOMC) issued a statement explaining that economic conditions were likely to warrant exceptionally low levels for the federal funds rate through at least mid-2013. In addition, the Fed carried out its second round of quantitative easing (QE2) in an effort to promote a more robust economic expansion. The stimulus program was completed as scheduled in June 2011. In September, the Fed launched yet another stimulus program—dubbed “Operation Twist”—that is designed to keep intermediate- and longer-term yields relatively low. The goal with keeping longer-term rates low is to encourage lending activity to spark business investments and home purchases, which, in turn, may provide support for a more sustainable economic recovery.

Market volatility was a dominant theme throughout most of 2011.

Despite pockets of turbulence sparked by the natural disasters in Japan and geopolitical turmoil in North Africa and the Middle East, the U.S. equity market performed very well from January through April of 2011. Some upbeat economic news, better-than-expected corporate profits, and investor enthusiasm about QE2 were among the catalysts for the market’s four-month advance.

In May and June, the market climate shifted to one of anxiety over the increasingly fragile state of the U.S. and global economies. As spring gave way to summer, investors not only worried that the U.S. might be on the brink of recession, they also feared that Europe’s sovereign debt problems could spiral out of control if a Greek default triggered financial contagion across the continent. In July and August, investor sentiment was further undermined by partisan wrangling over the federal debt ceiling and the Standard & Poor’s downgrade of the U.S. credit rating. The barrage of unsettling headlines led to heightened market volatility and sharply falling stock prices in the third quarter of 2011. Although volatility persisted into the fourth quarter, the market was able to rebound amid improved economic data and hopes for a resolution to the European crisis.

For the full 12-month period, the S&P 500 Index¹ of large-cap stocks achieved a total return of 2.1%. The Russell Midcap^® Index² and the Russell 2000^® Index³ of small-cap stocks lost 1.6% and 4.2%, respectively. International stocks fared worse than their U.S. counterparts, with the MSCI EAFE Index⁴ shedding 14.8%.

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 Russell Midcap^® Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 25% of the total market capitalization of the Russell 1000^® Index. You cannot invest directly in an index.

3. The Russell 2000^® Index measures the performance of the 2,000 smallest companies in the Russell 3000^® Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index. You cannot invest directly in an index.

4. The Morgan Stanley Capital International Europe, Australasia, and Far East (“MSCI EAFE”) Stock Index is an unmanaged group of securities widely regarded by investors to be representations of the stock markets of Europe, Australasia, and the Far East. You cannot invest directly in an index. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

4 Wells Fargo Advantage VT Discovery Fund Letter to Shareholders

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors.

Recent events have not altered our message to shareholders.

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors. Bear in mind that many investors who indiscriminately sold their equity investments during the severe market downturn of 2008 to 2009 missed out on the impressive two-year rally that followed. In our opinion, the lesson to be learned from these dramatic market events is that, for many investors, simply building and maintaining a well-diversified⁵ investment plan is the best long-term strategy.

To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Advantage Funds offers more than 110 mutual funds and other investments spanning a broad range of asset classes and investment styles. While 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.

Thank you for choosing to invest with Wells Fargo Advantage Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs. For current information about your fund investments, contact your investment professional, visit our website at www.wellsfargo.com/advantagefunds, or call us directly at 1-800-222-8222. We are available 24 hours a day, 7 days a week.

Sincerely,

Karla M. Rabusch

President

Wells Fargo Advantage Funds

5. Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Discovery Fund 5

INVESTMENT OBJECTIVE

The Fund seeks long-term capital appreciation.

ADVISER

Wells Fargo Funds Management, LLC

SUB-ADVISER

Wells Capital Management Incorporated

PORTFOLIO MANAGERS

Thomas J. Pence, CFA

Michael T. Smith, CFA

Chris Warner, CFA²

FUND INCEPTION

May 8, 1992

12 MONTH TOTAL RETURN AS OF DECEMBER 31, 2011
Class 2	0.42%
Russell 2500TM Growth Index1	(1.57)%

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

The Adviser has committed through April 30, 2012 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain other expenses at 1.15% for Class 2. The Fund’s gross and net expense ratios are 1.23% and 1.16%, respectively, for Class 2 shares. Without these reductions, the Fund’s returns would have been lower.

1. The Russell 2500™ Growth Index measures the performance of those Russell 2500 companies with higher price-to-book ratios and higher forecasted growth values. You cannot invest directly in an index.

2. Effective January 10, 2012, Chris Warner became a co-portfolio manager of the Fund.

3. The chart compares the performance of the Wells Fargo Advantage VT Discovery Fund Class 2 for the most recent ten years of the Fund with the Russell 2500™ Growth Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

6 Wells Fargo Advantage VT Discovery Fund Performance Highlights (Unaudited)

MANAGER’S DISCUSSION

Fund highlights

n The Fund outperformed its benchmark, the Russell 2500™ Growth Index, over the 12-month period that ended December 31, 2011.

n Effective stock selection in the health care and information technology (IT) sectors contributed to performance, while consumer discretionary positioning and a lack of exposure to consumer staples were slight headwinds.

n Equity prices ebbed and flowed with a “risk on/risk off” mentality throughout the year, driven largely by investors’ reactions to the news flow out of Europe.

n In the current market environment, we remain dedicated to our bottom-up stock selection process in seeking to maintain an optimal risk/reward balance.

Macro-driven volatility limited equity market returns for 2011.

The year began on a high note as the equity market continued its rally from late 2010 amid greater confidence in the sustainability of the U.S. economic recovery. While there were pockets of turbulence sparked by the geopolitical turmoil in North Africa and the Middle East and natural disasters in Japan, the market performed well through April 2011.

In the late spring and summer, however, investors’ spirits began to dampen as a string of discouraging economic data reignited fears of a recession. Investor confidence was further damaged by bickering over the federal debt ceiling, the downgrade of the U.S. credit rating by Standard & Poor’s, and the risk of financial contagion in Europe. Despite continued strength in corporate profits, investors’ intense focus on the negative macro headlines, particularly out of Europe, led to heightened market volatility and a broad-based sell-off in equities during the third quarter. Although volatility persisted into the fourth quarter, most of the major equity indexes rebounded and managed to finish 2011 with either modest gains or relatively mild losses.

Effective stock selection and merger and acquisition activity enabled the Fund to outperform its benchmark.

Effective stock selection in the health care and IT sectors contributed significantly to the Fund’s outperformance during the period. In health care, Pharmasset Incorporated’s innovative treatment for hepatitis C and HealthSpring Incorporated’s strong position in the health insurance industry were recognized by strategic buyers, as both stocks were acquired at sizable premiums. Meanwhile, Alexion Pharmaceuticals Incorporated, broadened the indications of use and geographic distribution for its rare-disease therapies. In IT, the acquisitions of both NetLogic Microsystems Incorporated, and SuccessFactors Incorporated, commanded healthy premiums, while the solid fundamentals of our holdings in the internet software and services and semiconductor industries also contributed to outperformance.

Stock selection in the consumer discretionary sector and a lack of exposure to consumer staples were performance headwinds. Shutterfly Incorporated, a leading online photo provider, was the largest individual detractor due to the impact of increased pricing competition on the company’s results during the busy holiday season. Investors’ rotation into more defensive market segments enabled many consumer staples stocks to outperform the market. In keeping with our stock selection discipline, we generally avoided the sector, as we found few consumer staples companies with growth profiles that met our criteria.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Discovery Fund 7

TEN LARGEST EQUITY HOLDINGS4 (AS OF DECEMBER 31, 2011)
Kansas City Southern	3.70%
Transdigm Group Incorporated	2.89%
Airgas Incorporated	2.67%
Equinix Incorporated	2.01%
Gartner Incorporated	1.97%
Alexion Pharmaceuticals Incorporated	1.90%
Graco Incorporated	1.87%
Oil States International Incorporated	1.86%
WESCO International Incorporated	1.79%
Triumph Group Incorporated	1.78%

We have taken advantage of the opportunity to upgrade the quality of the portfolio.

Although the Fund outperformed on a relative basis, its absolute return for the 12-month period was only slightly positive. The third-quarter market sell-off caused many companies with predictable, visible earnings growth—”core” holdings within our portfolio construction framework—to be unfairly punished along with more economically sensitive companies. In addition, as the year progressed, we took steps to optimize our mix of cyclical positions within our “developing situations” category in light of the macro backdrop.

Time has shown that the best response to volatile, irrational markets is to be adaptive in your thinking but consistent in your investment process. Accordingly, while we have continued to execute our time-tested process, we have taken advantage of the opportunity to upgrade the quality of the portfolio by exchanging stocks with lower earnings visibility (meaning that we find it difficult to project future earnings) for those with higher earnings visibility. The challenge is to construct a portfolio with the optimal balance of secular and cyclical growth exposures. We believe that our “surround the company” approach has allowed us to achieve such balance and that the portfolio should be well positioned to outperform once company-specific fundamentals reassert themselves as the primary driver of equity returns.

SECTOR DISTRIBUTION⁵
(AS OF DECEMBER 31, 2011)

A balanced portfolio strategy may help investors navigate the 2012 market landscape.

Some equity market observers share a bullish outlook for 2012, while other forecasts are more bearish. In our view, there are compelling arguments to support both sides of the debate. On the positive side, the labor market has taken a turn for the better in recent months, while consumer spending has been fairly resilient. Even the long-struggling housing market has shown tentative signs of stabilization. Corporate fundamentals remain generally strong, and equity valuations appear quite attractive in many cases.

On the negative side, a European recession looks increasingly likely and could be a source of market turmoil, especially given its implications for export-dependent China. After years of inflating financial and real estate markets, China may need to use other means of stimulus. In addition, ongoing political gamesmanship and fiscal austerity in developed nations could slow global economic growth.

Considering all of these factors, we expect moderate U.S. economic growth in 2012 and a trendless market characterized by bouts of volatility. In such an environment, we believe that balanced portfolio positioning is the most prudent approach.

4. The ten largest equity holdings are calculated based on the value of the securities divided by total net assets of the Fund. Holdings are subject to change and may have changed since the date specified.

5. Sector distribution is subject to change and is calculated based on the total long-term investments of the Fund.

8 Wells Fargo Advantage VT Discovery Fund Performance Highlights (Unaudited)

AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2011)

													Expense Ratios6
	Inception Date		6 Months*			1 Year			5 Year		10 Year		Gross		Net6,7
Class 2		05/08/1992		(8.75	)		0.42			5.39		8.64		1.23%		1.16%
Russell 2500™ Growth Index				(10.72	)		(1.57	)		2.89		5.23

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

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. Smaller-company stocks tend to be more volatile and less liquid than those of larger companies. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to foreign investment risk. Consult the Fund’s prospectus for additional information on these and other risks.

Please refer to the prospectus provided by your participating insurance company for detailed information describing the separate accounts for information regarding surrender charges, mortality and expense risk fees and other charges that may be assessed by the participating insurance companies.

6. Reflects the expense ratios as stated in the most recent prospectus.

7. The Adviser has committed through April 30, 2012 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain expenses, at 1.15% for Class 2. Without this cap, the Fund’s returns would have been lower.

Fund Expenses (Unaudited) Wells Fargo Advantage VT Discovery Fund 9

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution (12b-1) 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, 2011 to December 31, 2011.

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 separate account charges assessed by participating insurance companies. 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 separate account charges assessed by participating insurance companies were included, your costs would have been higher.

	Beginning Account Value 07-01-2011		Ending Account Value 12-31-2011		Expenses Paid During the Period¹		Net Annual Expense Ratio
Class 2
Actual	$	1,000.00	$	912.47	$	5.54		1.15	%
Hypothetical (5% return before expenses)	$	1,000.00	$	1,019.41	$	5.85		1.15	%

1. Expenses paid is equal to the annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year (to reflect the one-half year period).

10 Wells Fargo Advantage VT Discovery Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Common Stocks: 98.32%
Consumer Discretionary: 16.24%
Auto Components: 1.38%
BorgWarner Incorporated†«		21,200	$	1,351,288
Automobiles: 1.28%
Tesla Motors Incorporated†«		44,088		1,259,153
Diversified Consumer Services: 1.18%
Weight Watchers International Incorporated		21,100		1,160,711
Hotels, Restaurants & Leisure: 2.40%
Arcos Dorados Holdings Incorporated		43,517		893,404
Buffalo Wild Wings Incorporated†		21,600		1,458,216
				2,351,620
Household Durables: 1.30%
Tempur-Pedic International Incorporated†		24,200		1,271,226
Internet & Catalog Retail: 0.68%
Shutterfly Incorporated†«		29,500		671,420
Media: 0.69%
National Cinemedia Incorporated«		54,195		672,018
Specialty Retail: 3.53%
Ross Stores Incorporated		21,400		1,017,142
Vitamin Shoppe Incorporated†		29,200		1,164,496
Williams-Sonoma Incorporated		33,300		1,282,050
				3,463,688
Textiles, Apparel & Luxury Goods: 3.80%
Deckers Outdoor Corporation†«		16,400		1,239,348
Michael Kors Holdings Limited		6,667		181,676
Under Armour Incorporated†		15,800		1,134,282
Vera Bradley Incorporated†«		36,400		1,173,900
				3,729,206
Consumer Staples: 1.36%
Food Products: 1.36%
Hain Celestial Group Incorporated†«		36,300		1,330,758
Energy: 9.30%
Energy Equipment & Services: 3.71%
Atwood Oceanics Incorporated†«		25,300		1,006,687
Nabors Industries Limited†		46,900		813,246
Oil States International Incorporated†«		23,900		1,825,243
				3,645,176
Oil, Gas & Consumable Fuels: 5.59%
Approach Resources Incorporated†		33,541		986,441
Cabot Oil & Gas Corporation		12,700		963,930

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Discovery Fund 11

Security Name	Shares		Value
Oil, Gas & Consumable Fuels (continued)
Concho Resources Incorporated†		13,900	$	1,303,125
Gulfport Energy Corporation†		23,900		703,855
Pioneer Natural Resources Company		11,800		1,055,864
SandRidge Energy Incorporated†		57,200		466,752
				5,479,967
Financials: 4.07%
Capital Markets: 2.25%
Affiliated Managers Group Incorporated†		17,100		1,640,745
LPL Investment Holdings Incorporated†		18,691		570,823
				2,211,568
Diversified Financial Services: 0.77%
MSCI Incorporated†		22,800		750,804
Real Estate Management & Development: 1.05%
CBRE Group Incorporated†		67,900		1,033,438
Health Care: 15.02%
Biotechnology: 3.62%
Alexion Pharmaceuticals Incorporated†		26,100		1,866,150
Cubist Pharmaceuticals Incorporated†		31,400		1,244,068
Inhibitex Incorporated†		40,000		437,600
				3,547,818
Health Care Equipment & Supplies: 2.40%
Alere Incorporated†		38,998		900,464
Gen-Probe Incorporated†		13,700		809,944
HeartWare International Incorporated†«		9,400		648,600
				2,359,008
Health Care Providers & Services: 3.77%
AmerisourceBergen Corporation		25,200		937,188
Catalyst Health Solutions Incorporated†		18,900		982,800
MEDNAX Incorporated†		23,900		1,721,039
Team Health Holdings LLC†		2,413		53,255
				3,694,282
Health Care Technology: 1.37%
athenahealth Incorporated†«		27,300		1,340,976
Life Sciences Tools & Services: 1.84%
Bruker BioSciences Corporation†«		71,700		890,514
Covance Incorporated†		20,078		917,966
				1,808,480
Pharmaceuticals: 2.02%
BioMarin Pharmaceutical Incorporated†«		30,357		1,043,674
Impax Laboratories Incorporated†«		46,600		939,922
				1,983,596

12 Wells Fargo Advantage VT Discovery Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Industrials: 20.38%
Aerospace & Defense: 4.66%
Transdigm Group Incorporated†		29,600	$	2,832,128
Triumph Group Incorporated		29,800		1,741,810
				4,573,938
Commercial Services & Supplies: 0.96%
Verisk Analytics Incorporated Class A†		23,394		938,801
Machinery: 6.65%
AGCO Corporation†		5,100		219,147
Chart Industries Incorporated†«		28,100		1,519,367
Graco Incorporated		44,900		1,835,961
Robbins & Myers Incorporated		25,200		1,223,460
Wabtec Corporation		14,810		1,035,960
Westport Innovations Incorporated†«		20,600		684,744
				6,518,639
Road & Rail: 5.04%
Hertz Global Holdings Incorporated†		112,200		1,314,984
Kansas City Southern†		53,400		3,631,734
				4,946,718
Trading Companies & Distributors: 1.79%
WESCO International Incorporated†«		33,200		1,759,932
Transportation Infrastructure: 1.28%
Wesco Aircraft Holdings Incorporated†		89,449		1,251,392
Information Technology: 26.45%
Communications Equipment: 2.46%
Acme Packet Incorporated†		34,600		1,069,486
F5 Networks Incorporated†		8,400		891,408
Ubiquiti Networks Incorporated†«		24,986		455,495
				2,416,389
Electronic Equipment, Instruments & Components: 1.02%
Trimble Navigation Limited†		23,100		1,002,540
Internet Software & Services: 6.18%
Angie’s List Incorporated†«		39,179		630,782
DealerTrack Holdings Incorporated†		37,589		1,024,676
Equinix Incorporated†«		19,463		1,973,548
LogMeIn Incorporated†«		23,979		924,390
Mercadolibre Incorporated«		19,000		1,511,260
				6,064,656
IT Services: 3.26%
Gartner Incorporated†		55,700		1,936,689
ServiceSource International Incorporated†		80,427		1,261,900
				3,198,589

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Discovery Fund 13

Security Name				Shares		Value
Semiconductors & Semiconductor Equipment: 4.47%
Atmel Corporation†					85,800	$	694,980
Avago Technologies Limited					52,100		1,503,606
Ceva Incorporated†«					21,400		647,564
EZchip Semiconductor Limited†					19,800		560,934
Microchip Technology Incorporated«					26,600		974,358
							4,381,442
Software: 9.06%
Aspen Technology Incorporated†«					92,300		1,601,405
Broadsoft Incorporated†«					49,600		1,497,920
Fortinet Incorporated†					57,234		1,248,274
Qlik Technologies Incorporated†					44,938		1,087,500
Red Hat Incorporated†					20,300		838,187
SuccessFactors Incorporated†«					25,338		1,010,226
TIBCO Software Incorporated†					67,100		1,604,361
							8,887,873
Materials: 2.67%
Chemicals: 2.67%
Airgas Incorporated					33,500		2,615,680
Telecommunication Services: 2.83%
Diversified Telecommunication Services: 1.16%
Iridium Communications Incorporated†«					147,900		1,140,309
Wireless Telecommunication Services: 1.67%
SBA Communications Corporation Class A†«					38,100		1,636,774
Total Common Stocks (Cost $92,653,238)							96,449,873
				Principal
Other: 0.49%
Gryphon Funding Limited, Pass-Through Entity(a)(i)(v)					$    626,739		175,487
VFNC Corporation, Pass-Through Entity, 0.30%(a)(i)(v)144A±					713,417		306,769
Total Other (Cost $230,573)							482,256
	Yield			Shares
Short-Term Investments: 29.28%
Investment Companies: 29.28%
Wells Fargo Advantage Cash Investment Money Market Fund, Institutional Class(l)(u)		0.04	%		1,383,165		1,383,165
Wells Fargo Securities Lending Cash Investments, LLC(v)(l)(u)(r)		0.12			27,344,177		27,344,177
Total Short-Term Investments (Cost $28,727,342)							28,727,342

Total Investments in Securities
(Cost $121,611,153)*	128.09	%		125,659,471
Other Assets and Liabilities, Net	(28.09	)		(27,559,978	)
Total Net Assets	100.00	%	$	98,099,493

14 Wells Fargo Advantage VT Discovery Fund Portfolio of Investments—December 31, 2011

† Non-income earning security.

« All or a portion of this security is on loan.

(a) Security is fair valued by the Management Valuation Team, and in certain instances by the Board of Trustees, in accordance with procedures approved by the Board of Trustees.

(i) Illiquid security for which the designation as illiquid is unaudited.

(v) Security represents investment of cash collateral received from securities on loan.

144A Security that may be resold to “qualified institutional buyers” under Rule 144A or security offered pursuant to Section 4(2) of the Securities Act of 1933, as amended.

± Variable rate investment.

(l) Investment in an affiliate.

(u) Rate shown is the 7-day annualized yield at period end.

(r) The investment company is exempt from registration under Section 3(c)(7) of the 1940 Act.

* Cost for federal income tax purposes is $122,437,848 and net unrealized appreciation (depreciation) consists of:

Gross unrealized appreciation	$	10,258,147
Gross unrealized depreciation		(7,036,524	)
Net unrealized appreciation	$	3,221,623

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

Statement of Assets and Liabilities—December 31, 2011 Wells Fargo Advantage VT Discovery Fund 15

Assets
Investments
In unaffiliated securities (including securities on loan), at value	$	96,932,129
In affiliated securities, at value		28,727,342
Total investments, at value (see cost below)		125,659,471
Receivable for investments sold		916,076
Receivable for Fund shares sold		21,923
Receivable for dividends		18,330
Receivable for securities lending income		22,332
Prepaid expenses and other assets		604
Total assets		126,638,736
Liabilities
Payable for investments purchased		786,651
Payable for Fund shares redeemed		52,316
Payable upon receipt of securities loaned		27,574,750
Advisory fee payable		58,922
Distribution fees payable		22,469
Due to other related parties		10,681
Accrued expenses and other liabilities		33,454
Total liabilities		28,539,243
Total net assets	$	98,099,493
NET ASSETS CONSIST OF
Paid-in capital	$	99,684,137
Accumulated net realized losses on investments		(5,632,962	)
Net unrealized gains on investments		4,048,318
Total net assets	$	98,099,493
COMPUTATION OF NET ASSET VALUE PER SHARE1
Net assets – Class 2	$	98,099,493
Shares outstanding – Class 2		4,590,157
Net asset value per share – Class 2		$21.37
Total investments, at cost	$	121,611,153
Securities on loan, at value	$	26,863,306

1. The Fund has an unlimited number of authorized shares.

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

16 Wells Fargo Advantage VT Discovery Fund Statement of Operations—Year Ended December 31, 2011

Investment income
Dividends*	$	337,927
Income from affiliated securities		2,711
Securities lending income, net		83,600
Total investment income		424,238
Expenses
Advisory fee		754,752
Administration fees
Fund level		53,911
Class 2		86,257
Distribution fees
Class 2		269,554
Custody and accounting fees		18,913
Professional fees		35,419
Shareholder report expenses		37,856
Trustees’ fees and expenses		10,578
Other fees and expenses		4,250
Total expenses		1,271,490
Less: Fee waivers and/or expense reimbursements		(35,032	)
Net expenses		1,236,458
Net investment loss		(812,220	)
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains on investments		27,863,306
Net change in unrealized gains (losses) on investments		(26,402,344	)
Net realized and unrealized gains (losses) on investments		1,460,962
Net increase in net assets resulting from operations	$	648,742
* Net of foreign dividend withholding taxes of		$5,954

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

Statements of Changes in Net Assets Wells Fargo Advantage VT Discovery Fund 17

	Year Ended December 31, 2011						Year Ended December 31, 2010
Operations
Net investment loss				$	(812,220	)				$	(661,558	)
Net realized gains on investments					27,863,306						15,071,192
Net change in unrealized gains (losses) on investments					(26,402,344	)					14,985,606
Net increase in net assets resulting from operations					648,742						29,395,240
		Shares						Shares
Capital share transactions
Proceeds from shares sold – Class 2		665,598			14,494,199			796,770	1		14,304,397	1
Payment for shares redeemed – Class 2		(1,279,927	)		(27,798,666	)		(1,076,715	)1		(19,068,998	)1
Net decrease in net assets resulting from capital share transactions					(13,304,467	)					(4,764,601	)
Total increase (decrease) in net assets					(12,655,725	)					24,630,639
Net assets
Beginning of period					110,755,218						86,124,579
End of period				$	98,099,493					$	110,755,218
Undistributed net investment income				$	0					$	0

1. After the close of business on July 16, 2010, existing shares of the Fund were renamed Class 2 shares.

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

18 Wells Fargo Advantage VT Discovery Fund Financial Highlights

(For a share outstanding throughout each period)

	Year Ended December 31,
Class 21	2011			2010			2009			2008			2007
Net asset value, beginning of period	$	21.28		$	15.70		$	11.19		$	20.11		$	16.44
Net investment loss		(0.18	)		(0.13	)		(0.11	)		(0.11	)		(0.15	)
Net realized and unrealized gains (losses) on investments		0.27			5.71			4.62			(8.81	)		3.82
Total from investment operations		0.09			5.58			4.51			(8.92	)		3.67
Net asset value, end of period		$21.37			$21.28			$15.70			$11.19			$20.11
Total return		0.42	%		35.54	%		40.30	%		(44.36	)%		22.32	%
Ratios to average net assets (annualized)
Gross expenses		1.18	%		1.26	%		1.35	%		1.27	%		1.21	%
Net expenses		1.15	%		1.15	%		1.15	%		1.15	%		1.15	%
Net investment loss		(0.75	)%		(0.71	)%		(0.61	)%		(0.63	)%		(0.72	)%
Supplemental data
Portfolio turnover rate		113	%		101	%		208	%		166	%		135	%
Net assets, end of period (000’s omitted)		$98,099			$110,755			$86,125			$113,149			$238,894

1. After the close of business on July 16, 2010, existing shares of the Fund were renamed Class 2 shares.

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

Notes to Financial Statements Wells Fargo Advantage VT Discovery Fund 19

1. ORGANIZATION

Wells Fargo Variable 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”). These financial statements report on Wells Fargo Advantage VT Discovery 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

Investments in equity securities are valued each business day as of the close of regular trading on the New York Stock Exchange, which is usually 4:00 p.m. (Eastern Time). Securities which are traded on a national or foreign securities exchange are valued at the last reported sales price, except that securities listed on The Nasdaq Stock Market, Inc. (“Nasdaq”) are valued at the Nasdaq Official Closing Price (“NOCP”), and if no NOCP is available, then at the last reported sales price. If no sales price is shown on the Nasdaq, the bid price will be used. In the absence of any sale of securities listed on the Nasdaq, and in the case of other securities (including U.S. Government obligations, but excluding debt securities maturing in 60 days or less), the price will be deemed “stale” and the valuations will be determined in accordance with the Fund’s Fair Value Procedures.

Fixed income securities with maturities exceeding 60 days are valued based on available evaluated prices received from an independent pricing service approved by the Board of Trustees which may utilize both transaction data and market information such as yield, prices of securities of comparable quality, coupon rate, maturity, type of issue, trading characteristics and other market data. If valuations are not available from the pricing service or values received are deemed not representative of market value, values will be obtained from a third party broker-dealer or determined based on the Fund’s Fair Value Procedures.

Debt securities of sufficient credit quality with original maturities of 60 days or less generally are valued at amortized cost which approximates fair value. The amortized cost method involves valuing a security at its cost, plus accretion of discount or minus amortization of premium over the period until maturity.

Investments in open-end mutual funds and non-registered investment companies are generally valued at net asset value.

Investments which are not valued using any of the methods discussed above, are valued at their fair value, as determined by procedures established in good faith and approved by the Board of Trustees.

Security loans

The Fund may lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. The Fund continues to receive interest or dividends on the securities loaned. The Fund receives collateral in the form of cash or securities with a value at least equal to the value of the securities on loan. The value of the loaned securities is determined at the close of each business day and any additional required collateral is delivered to the Fund on the next business day. In a securities lending transaction, the net asset value of the Fund will be affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of the instrument in which collateral is invested. The amount of securities lending activity undertaken by the Fund fluctuates from time to time. In the event of default or bankruptcy by the borrower, the Fund may be prevented from recovering the loaned securities or gaining access to the collateral or may experience delays or costs in doing so. In addition, the investment of any cash collateral received may lose all or part of its value. The Fund has the right under the lending agreement to recover the securities from the borrower on demand.

The Fund lends its securities through an unaffiliated securities lending agent. Cash collateral received in connection with its securities lending transactions is invested in Wells Fargo Securities Lending Cash Investments, LLC (the “Cash Collateral Fund”). The Cash Collateral Fund is exempt from registration under Section 3(c)(7) of the 1940 Act and is managed by

20 Wells Fargo Advantage VT Discovery Fund Notes to Financial Statements

Wells Fargo Funds Management LLC (“Funds Management”) and is sub-advised by Wells Capital Management Incorporated (“Wells Capital Management”). Funds Management receives an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Cash Collateral Fund increase. All of the fees received by Funds Management are paid to Wells Capital Management for its services as sub-adviser. The Cash Collateral Fund seeks to provide a positive return compared to the daily Fed Funds Open rate by investing in high-quality, U.S. dollar-denominated short-term money market instruments. Cash Collateral Fund investments are fair valued based upon the amortized cost valuation technique. Income earned from investment in the Cash Collateral Fund is included in securities lending income on the Statement of Operations.

For Wells Fargo Advantage Funds that participated in securities lending activity prior to February 13, 2009, certain structured investment vehicles purchased in a joint account by the former securities lending agent defaulted or were impaired. Certain of the Wells Fargo Advantage Funds still hold ownership interest in these structured investment vehicles, which have since been restructured as pass-through securities. If the Fund holds an ownership interest in such pass-through securities, information regarding this ownership interest can be found in the Portfolio of Investments under the category “Other”.

Security transactions and income recognition

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

Dividend income is recognized on the ex-dividend date. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.

Distributions to shareholders

Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-dividend date. Such distributions are determined in conformity with income tax regulations, which may differ from generally accepted accounting principles.

The timing and character of distributions made during the period from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. To the extent that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment. Temporary differences do not require reclassifications. The primary permanent differences causing such reclassifications are due to net operating losses and recognition of partnership income. At December 31, 2011, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statement of Assets and Liabilities:

Paid-in Capital			Undistributed Net Investment Loss		Accumulated Net Realized Losses on Investments
$	(768,203	)	$	812,220	$	(44,017	)

Federal and other taxes

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

The 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.

Under the recently enacted Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years which began after December 22, 2010 for an unlimited period. However, any losses incurred are required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

Notes to Financial Statements Wells Fargo Advantage VT Discovery Fund 21

As of December 31, 2011, the Fund had net capital loss carryforwards, which are available to offset future net realized capital gains, in the amount of $4,806,267 expiring in 2017.

3. FAIR VALUATION MEASUREMENTS

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the 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 significant 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:

n Level 1 – quoted prices in active markets for identical securities

n Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

n Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

As of December 31, 2011, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:

Investments in Securities	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity securities
Common stocks	$	96,449,873	$	0	$	0	$	96,449,873
Other		0		0		482,256		482,256
Short-term investments
Investment companies		1,383,165		27,344,177		0		28,727,342
	$	97,833,038	$	27,344,177	$	482,256	$	125,659,471

Further details on the major security types listed above can be found in the Portfolio of Investments.

Transfers in and transfers out are recognized at the end of the reporting period. For the year ended December 31, 2011, the Fund did not have any significant transfers into/out of Level 1 and Level 2.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Other
Balance as of December 31, 2010	$	794,517
Accrued discounts (premiums)		0
Realized gains (losses)		0
Change in unrealized gains (losses)		(42,696	)
Purchases		0
Sales		(269,565	)
Transfers into Level 3		0
Transfers out of Level 3		0
Balance as of December 31, 2011	$	482,256
Change in unrealized gains (losses) relating to securities still held at December 31, 2011	$	(171,839	)

22 Wells Fargo Advantage VT Discovery Fund Notes to Financial Statements

4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES

Advisory fee

The Trust has entered into an advisory contract with Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”). The adviser is responsible for implementing investment policies and guidelines and for supervising the sub-adviser, who is responsible for day-to-day portfolio management of the Fund.

Pursuant to the contract, Funds Management is entitled to receive an annual advisory fee starting at 0.70% and declining to 0.55% as the average daily net assets of the Fund increase. For the year ended December 31, 2011, the advisory fee was equivalent to an annual rate of 0.70% of the Fund’s average daily net assets.

Funds Management may retain the services of certain sub-advisers to provide daily portfolio management to the Fund. The fees related to sub-advisory services are borne directly by Funds Management and do not increase the overall fees paid by the Fund. Wells Capital Management, an affiliate of Funds Management, is the sub-adviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.45% and declining to 0.35% as the average daily net assets of the Fund increase.

Administration and transfer agent fees

The Trust has entered into an administration agreement with Funds Management. Under this agreement, for providing administrative services, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers, Funds Management is entitled to receive from the Fund an annual fund level administration fee starting at 0.05% and declining to 0.03% as the average daily net assets of the Fund increase and for Class 2 shares, a class level administration fee of 0.08% of its average daily net assets.

Funds Management has contractually waived and/or reimbursed advisory and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. Waiver of fees and/or reimbursement of expenses by Funds Management were made first from fund level expenses on a proportionate basis and then from class specific expenses.

Distribution fees

The Trust has adopted a Distribution Plan for Class 2 shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are charged to Class 2 shares and paid to Wells Fargo Funds Distributor, LLC, the principal underwriter, at an annual rate of 0.25% of its average daily net assets.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. Government obligations (if any) and short-term securities (securities with maturities of one year or less at purchase date), for the year ended December 31, 2011 were $121,272,749 and $134,327,960, respectively.

6. BANK BORROWINGS

The Trust and Wells Fargo Funds Trust (excluding the money market funds) are parties to a $150,000,000 revolving credit agreement with State Street Bank and Trust Company, 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, under the credit agreement, the Fund pays an annual commitment fee equal to 0.10% of the unused balance, which is allocated pro rata. Prior to September 6, 2011, the revolving credit agreement was for $125,000,000 and the annual commitment fee paid by the Fund was 0.125% of the unused balance. For the year ended December 31, 2011, the Fund paid $216 in commitment fees.

For the year ended December 31, 2011, there were no borrowings by the Fund under the agreement.

7. DISTRIBUTIONS TO SHAREHOLDERS

As of December 31, 2011, the components of distributable earnings on a tax basis were as follows:

Unrealized Gains (Losses)		Capital Loss Carryforward
$	3,221,623	$	(4,806,267	)

Notes to Financial Statements Wells Fargo Advantage VT Discovery Fund 23

8. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and directors are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Trust may enter into contracts with service providers that contain a variety of indemnification clauses. The Trust’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.

9. NEW ACCOUNTING PRONOUNCEMENTS

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. ASU No. 2011-04 amends FASB ASC Topic 820, Fair Value Measurements and Disclosures, to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP. The ASU is effective prospectively for interim and annual periods beginning after December 15, 2011. Management expects that adoption of the ASU will result in additional disclosures in the financial statements, as applicable.

In April 2011, FASB issued ASU No. 2011-03 “Reconsideration of Effective Control for Repurchase Agreements”. ASU No. 2011-03 amends FASB ASC Topic 860, Transfers and Servicing, specifically the criteria required to determine whether a repurchase agreement (repo) and similar agreements should be accounted for as sales of financial assets or secured borrowings with commitments. ASU No. 2011-03 changes the assessment of effective control by focusing on the transferor’s contractual rights and obligations and removing the criterion to assess its ability to exercise those rights or honor those obligations. This could result in changes to the way entities account for certain transactions including repurchase agreements, mortgage dollar rolls and reverse repurchase agreements. The ASU will become effective on a prospective basis for new transfers and modifications to existing transactions as of the beginning of the first interim or annual period beginning on or after December 15, 2011. Management has evaluated the impact of adopting the ASU and expects no significant changes.

24 Wells Fargo Advantage VT Discovery Fund Report of Independent Registered Public Accounting Firm

BOARD OF TRUSTEES AND SHAREHOLDERS OF WELLS FARGO VARIABLE TRUST:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the Wells Fargo Advantage VT Discovery Fund (the “Fund”), one of the funds constituting the Wells Fargo Variable Trust, as of December 31, 2011, and the related statement of operations for the year then ended, statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2011, by correspondence with custodian and brokers, or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Wells Fargo Advantage VT Discovery Fund as of December 31, 2011, the results of its operations for the year then ended, changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

February 24, 2012

Other Information (Unaudited) Wells Fargo Advantage VT Discovery Fund 25

PROXY VOTING INFORMATION

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our Web site at www.wellsfargo.com/advantagefunds, or visiting the SEC Web site at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the Fund’s Web site at www.wellsfargo.com/advantagefunds or by visiting the SEC Web site at www.sec.gov.

PORTFOLIO HOLDINGS INFORMATION

The complete portfolio holdings for the Fund are publicly available on the Fund’s Web site (www.wellsfargo.com/advantagefunds) on a monthly, 30-day or more delayed basis. In addition, top ten holdings information for the Fund is publicly available on the Fund’s Web site on a monthly, seven-day or more delayed basis. The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q, which is available without charge by visiting the SEC Web site at www.sec.gov. In addition, the Fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and at regional offices in New York City, at 233 Broadway, and in Chicago, at 175 West Jackson Boulevard, Suite 900. Information about the Public Reference Room may be obtained by calling 1-800-SEC-0330.

26 Wells Fargo Advantage VT Discovery Fund Other Information (Unaudited)

BOARD OF TRUSTEES

The following table provides basic information about the Board of Trustees (the “Trustees”) of the Trust and Officers of the Trust. This table should be read in conjunction with the Prospectus and the Statement of Additional Information¹ of the Fund. Each of the Trustees and Officers listed below acts in identical capacities for the Wells Fargo Advantage family of funds, which consists of 138 funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). All of the Trustees are also Members of the Audit and Governance Committees of each Trust in the Fund Complex. The mailing address of each Trustee and Officer is 525 Market Street, 12th Floor, San Francisco, CA 94105. 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	Other Directorships During Past Five Years
Peter G. Gordon (Born 1942)	Trustee, since 1998; Chairman, since 2005 (Lead Trustee since 2001)	Co-Founder, Retired Chairman, President and CEO of Crystal Geyser Water Company. Trustee Emeritus, Colby College	Asset Allocation Trust
Isaiah Harris, Jr. (Born 1952)	Trustee, since 2009	Retired. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Mr. Harris is a certified public accountant.	CIGNA Corporation; Deluxe Corporation; Asset Allocation Trust
Judith M. Johnson (Born 1949)	Trustee, since 2008	Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.	Asset Allocation Trust
Leroy Keith, Jr. (Born 1939)	Trustee, since 2010	Chairman, Bloc Global Services (development and construction). Trustee of the Evergreen Funds from 1983 to 2010. Former Managing Director, Almanac Capital Management (commodities firm), former Partner, Stonington Partners, Inc. (private equity fund), former Director, Obagi Medical Products Co. and former Director, Lincoln Educational Services.	Trustee, Virtus Fund Complex (consisting of 40 portfolios as of 12/31/11); Asset Allocation Trust
David F. Larcker (Born 1950)	Trustee, since 2009	James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of Corporate Governance Research Program and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.	Asset Allocation Trust
Olivia S. Mitchell (Born 1953)	Trustee, since 2006	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.	Asset Allocation Trust

Other Information (Unaudited) Wells Fargo Advantage VT Discovery Fund 27

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years	Other Directorships During Past Five Years
Timothy J. Penny (Born 1951)	Trustee, since 1996	President and CEO of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007 and Senior Fellow at the Humphrey Institute Policy Forum at the University of Minnesota since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.	Asset Allocation Trust
Michael S. Scofield (Born 1943)	Trustee, since 2010	Served on the Investment Company Institute’s Board of Governors and Executive Committee from 2008-2011 as well the Governing Council of the Independent Directors Council from 2006-2011 and the Independent Directors Council Executive Committee from 2008-2011. Chairman of the IDC from 2008-2010. Institutional Investor (Fund Directions) Trustee of Year in 2007. Trustee of the Evergreen Funds (and its predecessors) from 1984 to 2010. Chairman of the Evergreen Funds from 2000-2010. Former Trustee of the Mentor Funds. Retired Attorney, Law Offices of Michael S. Scofield and former Director and Chairman, Branded Media Corporation (multi-media branding company).	Asset Allocation Trust
Donald C. Willeke (Born 1940)	Trustee, since 1996	Principal of the law firm of Willeke & Daniels. General Counsel of the Minneapolis Employees Retirement Fund from 1984 until its consolidation into the Minnesota Public Employees Retirement Association on June 30, 2010. Director and Vice Chair of The Free Trust (non-profit corporation). Director of the American Chestnut Foundation (non-profit corporation).	Asset Allocation Trust

Officers

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years
Karla M. Rabusch (Born 1959)	President, since 2003	Executive Vice President of Wells Fargo Bank, N.A. and President of Wells Fargo Funds Management, LLC since 2003. Senior Vice President and Chief Administrative Officer of Wells Fargo Funds Management, LLC from 2001 to 2003.
C. David Messman (Born 1960)	Secretary, since 2000; Chief Legal Counsel, since 2003	Senior Vice President and Secretary of Wells Fargo Funds Management, LLC since 2001. Vice President and Managing Senior Counsel of Wells Fargo Bank, N.A. since 1996.
Kasey Phillips (Born 1970)	Treasurer, since 2009	Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2006 to 2010. Treasurer of the Evergreen Funds from 2005 to 2010.
David Berardi (Born 1975)	Assistant Treasurer, since 2009	Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Assistant Vice President of Evergreen Investment Services, Inc. from 2004 to 2008. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.
Jeremy DePalma (Born 1974)	Assistant Treasurer, since 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. Vice President, Evergreen Investment Services, Inc. from 2004 to 2007. Head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.
Debra Ann Early (Born 1964)	Chief Compliance Officer, since 2007	Chief Compliance Officer of Wells Fargo Funds Management, LLC since 2007. Chief Compliance Officer of Parnassus Investments from 2005 to 2007. Chief Financial Officer of Parnassus Investments from 2004 to 2007 and Senior Audit Manager of PricewaterhouseCoopers LLP from 1998 to 2004.

1. 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 Web site at www.wellsfargo.com/advantagefunds.

28 Wells Fargo Advantage VT Discovery Fund List of Abbreviations

The following is a list of common abbreviations for terms and entities which may have appeared in this report.

ACB —  Agricultural Credit Bank

ADR —  American Depository Receipt

ADS —  American Depository Shares

AGC-ICC —  Assured Guaranty Corporation - Insured Custody Certificates

AGM —  Assured Guaranty Municipal

AMBAC —  American Municipal Bond Assurance Corporation

AMT —  Alternative Minimum Tax

AUD —  Australian Dollar

BAN —  Bond Anticipation Notes

BHAC —  Berkshire Hathaway Assurance Corporation

BRL —  Brazil Real

CAB —  Capital Appreciation Bond

CAD —  Canadian Dollar

CCAB —  Convertible Capital Appreciation Bond

CDA —  Community Development Authority

CDO —  Collateralized Debt Obligation

CHF —  Swiss Franc

COP —  Certificate of Participation

CR —  Custody Receipts

DKK —  Danish Krone

DRIVER —  Derivative Inverse Tax-Exempt Receipts

DW&P —  Department of Water & Power

DWR —  Department of Water Resources

ECFA —  Educational & Cultural Facilities Authority

EDA —  Economic Development Authority

EDFA —  Economic Development Finance Authority

ETF —  Exchange-Traded Fund

EUR —  Euro

FFCB —  Federal Farm Credit Bank

FGIC —  Financial Guaranty Insurance Corporation

FHA —  Federal Housing Authority

FHLB —  Federal Home Loan Bank

FHLMC —  Federal Home Loan Mortgage Corporation

FNMA —  Federal National Mortgage Association

FSA —  Farm Service Agency

GBP —  Great British Pound

GDR —  Global Depository Receipt

GNMA —  Government National Mortgage Association

GO —  General Obligation

HCFR —  Healthcare Facilities Revenue

HEFA —  Health & Educational Facilities Authority

HEFAR —  Higher Education Facilities Authority Revenue

HFA —  Housing Finance Authority

HFFA —  Health Facilities Financing Authority

HKD —  Hong Kong Dollar

HUF —  Hungarian Forint

IBC —  Insured Bond Certificate

IDA —  Industrial Development Authority

IDAG —  Industrial Development Agency

IDR —  Industrial Development Revenue

IEP —  Irish Pound

JPY —  Japanese Yen

KRW —  Republic of Korea Won

LIBOR —  London Interbank Offered Rate

LLC —  Limited Liability Company

LLP —  Limited Liability Partnership

LOC —  Letter of Credit

LP —  Limited Partnership

MBIA —  Municipal Bond Insurance Association

MFHR —  Multi-Family Housing Revenue

MTN —  Medium Term Note

MUD —  Municipal Utility District

MXN —  Mexican Peso

MYR —  Malaysian Ringgit

NATL-RE —  National Public Finance Guarantee Corporation

NOK —  Norwegian Krone

NZD —  New Zealand Dollar

PCFA —  Pollution Control Finance Authority

PCR —  Pollution Control Revenue

PFA —  Public Finance Authority

PFFA —  Public Facilities Financing Authority

PFOTER —  Puttable Floating Option Tax-Exempt Receipts

plc —  Public Limited Company

PLN —  Polish Zloty

PUTTER —  Puttable Tax-Exempt Receipts

R&D —  Research & Development

RDA —  Redevelopment Authority

RDFA —  Redevelopment Finance Authority

REIT —  Real Estate Investment Trust

ROC —  Reset Option Certificates

SAVRS —  Select Auction Variable Rate Securities

SBA —  Small Business Authority

SEK —  Swedish Krona

SFHR —  Single Family Housing Revenue

SFMR —  Single Family Mortgage Revenue

SGD —  Singapore Dollar

SKK —  Slovakian Koruna

SPDR —  Standard & Poor’s Depositary Receipts

TAN —  Tax Anticipation Notes

TBA —  To Be Announced

TIPS —  Treasury Inflation-Protected Securities

TRAN —  Tax Revenue Anticipation Notes

TCR —  Transferable Custody Receipts

TRY —  Turkish Lira

TTFA —  Transportation Trust Fund Authority

TVA —  Tennessee Valley Authority

XLCA —  XL Capital Assurance

ZAR —  South African Rand

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FOR MORE INFORMATION

More information about Wells Fargo Advantage Funds is available free upon request. To obtain literature, please write, e-mail, visit the Fund’s Web site, or call:

Wells Fargo Advantage Funds

P.O. Box 8266

Boston, MA 02266-8266

E-mail: wfaf@wellsfargo.com

Web site: www.wellsfargo.com/advantagefunds

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

This report and the financial statements contained herein are submitted for the general information of the shareholders of Wells Fargo Advantage Funds. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. For a prospectus containing more complete information, including charges and expenses, call 1-800-222-8222 or visit the Fund’s Web site at www.wellsfargo.com/advantagefunds. Please consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. This and other information about Wells Fargo Advantage Funds can be found in the current prospectus. Read the prospectus carefully before you invest or send money.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

© 2012 Wells Fargo Funds Management, LLC. All rights reserved.

207571 02-12

AVT1/AR147 12-11

Wells Fargo Advantage

VT Index Asset Allocation Fund

Annual Report

December 31, 2011

Reduce clutter. Save trees.

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

Contents

Letter to Shareholders	2
Performance Highlights	6
Fund Expenses	10
Portfolio of Investments	11
Financial Statements
Statement of Assets and Liabilities	27
Statement of Operations	28
Statements of Changes in Net Assets	29
Financial Highlights	30
Notes to Financial Statements	31
Report of Independent Registered Public Accounting Firm	37
Other Information	38
List of Abbreviations	41

The views expressed and any forward-looking statements are as of December 31, 2011, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Funds Management, LLC. Discussions of individual securities, or the markets generally, or any Wells Fargo Advantage Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements; the views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Funds Management, LLC, disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

WELLS FARGO INVESTMENT HISTORY

1932	Keystone creates one of the first mutual fund families.
1971	Wells Fargo & Company introduces one of the first institutional index funds.
1978	Wells Fargo applies Markowitz and Sharpe’s research on Modern Portfolio Theory to introduce one of the industry’s first Tactical Asset Allocation (TAA) models in institutional separately managed accounts.
1984	Wells Fargo Stagecoach Funds launches its first asset allocation fund.
1989	The Tactical Asset Allocation (TAA) Model is first applied to Wells Fargo’s asset allocation mutual funds.
1994	Wells Fargo introduces the LifePath Funds, one of the first suites of target date funds (now the Wells Fargo Advantage Dow Jones Target Date FundsSM ).
1996	Evergreen Investments and Keystone Funds merge.
1997	Wells Fargo launches Wells Fargo Advantage WealthBuilder PortfoliosSM, a fund-of-funds suite of products that includes the use of quantitative models to shift assets among investment styles.
1999	Norwest Advantage Funds and Stagecoach Funds are reorganized into Wells Fargo Funds after the merger of Norwest and Wells Fargo.
2002	Evergreen Retail and Evergreen Institutional companies form the umbrella asset management company, Evergreen Investments.
2005	The integration of Strong Funds with Wells Fargo Funds creates Wells Fargo Advantage Funds, resulting in one of the top 20 mutual fund companies in the United States.
2006	Wells Fargo Advantage Funds relaunches the target date product line as Wells Fargo Advantage Dow Jones Target Date Funds.
2010	The mergers and reorganizations of Evergreen and Wells Fargo Advantage mutual funds are completed, unifying the families under the brand of Wells Fargo Advantage Funds.

Wells Fargo Advantage Funds^®

Wells Fargo Advantage Funds skillfully guides institutions, financial advisors, and individuals through the investment terrain to help them reach their financial objectives. Everything we do on behalf of investors is backed by our unique combination of qualifications.

Strength

Our organization is built on the standards of integrity and service established by our parent company—Wells Fargo & Company—more than 150 years ago. And, because we’re part of a highly diversified financial enterprise, we offer the depth of resources to help investors succeed.

Expertise

Our multi-boutique model offers investors access to the independent thinking of premier investment managers that have been chosen for their time-tested strategies. While each team specializes in a specific investment strategy, collectively they provide investors a wide choice of distinct investment styles. Our dedication to investment excellence doesn’t end with our expertise in manager selection—risk management, analysis, and rigorous ongoing review seek to ensure each manager’s investment process remains consistent.

Partnership

Our collaborative approach is built around understanding the needs and goals of our clients. By adhering to core principles of sound judgment and steady guidance, we support you through every stage of the investment decision process.

Carefully consider a fund’s investment objectives, risks, charges, and expenses before investing. For a current prospectus and, if available, a summary prospectus, containing this and other information, visit wellsfargo.com/advantagefunds. Read it carefully before investing.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds^®. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

“Dow Jones^®” and “Dow Jones Target Date Indexes^SM” are service marks of Dow Jones Trademark Holdings, LLC (“Dow Jones”), have been licensed to CME Group Index Services LLC (“CME Indexes”) and have been sublicensed for use for certain purposes by Global Index Advisors, Inc, and Wells Fargo Funds Management, LLC. The Wells Fargo Advantage Dow Jones Target Date Funds^SM based on the Dow Jones Target Date Indexes^SM, are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes or their respective affiliates and none of them makes any representation regarding the advisability of investing in such product(s).

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

Not part of the annual report.

Wells Fargo Advantage Funds offers more than 110 mutual funds across a wide range of asset classes, representing over $216 billion in assets under management, as of December 31, 2011.

Equity Funds
Asia Pacific Fund	Global Opportunities Fund	Premier Large Company Growth Fund
C&B Large Cap Value Fund	Growth Fund	Small Cap Opportunities Fund
C&B Mid Cap Value Fund	Health Care Fund	Small Cap Value Fund
Capital Growth Fund	Index Fund	Small Company Growth Fund
Common Stock Fund	International Equity Fund	Small Company Value Fund
Disciplined U.S. Core Fund	International Value Fund	Small/Mid Cap Core Fund
Discovery Fund†	Intrinsic Small Cap Value Fund	Small/Mid Cap Value Fund
Diversified Equity Fund	Intrinsic Value Fund	Social Sustainability Fund†
Diversified International Fund	Intrinsic World Equity Fund	Special Mid Cap Value Fund
Diversified Small Cap Fund	Large Cap Core Fund	Special Small Cap Value Fund
Emerging Growth Fund	Large Cap Growth Fund	Specialized Technology Fund
Emerging Markets Equity Fund	Large Company Value Fund	Strategic Large Cap Growth Fund
Endeavor Select Fund†	Omega Growth Fund	Traditional Small Cap Growth Fund
Enterprise Fund†	Opportunity Fund†	Utility and Telecommunications Fund
Equity Value Fund	Precious Metals Fund
Bond Funds
Adjustable Rate Government Fund	Inflation-Protected Bond Fund	Short-Term Bond Fund
California Limited-Term Tax-Free Fund	Intermediate Tax/AMT-Free Fund	Short-Term High Yield Bond Fund
California Tax-Free Fund	International Bond Fund	Short-Term Municipal Bond Fund
Colorado Tax-Free Fund	Minnesota Tax-Free Fund	Strategic Municipal Bond Fund
Government Securities Fund	Municipal Bond Fund	Total Return Bond Fund
High Income Fund	North Carolina Tax-Free Fund	Ultra Short-Term Income Fund
High Yield Bond Fund	Pennsylvania Tax-Free Fund	Ultra Short-Term Municipal Income Fund
Income Plus Fund	Short Duration Government Bond Fund	Wisconsin Tax-Free Fund
Asset Allocation Funds
Asset Allocation Fund	WealthBuilder Equity Portfolio†	Target 2020 Fund†
Conservative Allocation Fund	WealthBuilder Growth Allocation Portfolio†	Target 2025 Fund†
Diversified Capital Builder Fund	WealthBuilder Growth Balanced Portfolio†	Target 2030 Fund†
Diversified Income Builder Fund	WealthBuilder Moderate Balanced Portfolio†	Target 2035 Fund†
Growth Balanced Fund	WealthBuilder Tactical Equity Portfolio†	Target 2040 Fund†
Index Asset Allocation Fund	Target Today Fund†	Target 2045 Fund†
Moderate Balanced Fund	Target 2010 Fund†	Target 2050 Fund†
WealthBuilder Conservative Allocation Portfolio†	Target 2015 Fund†	Target 2055 Fund†
Money Market Funds
100% Treasury Money Market Fund	Heritage Money Market Fund†	National Tax-Free Money Market Fund
California Municipal Money Market Fund	Money Market Fund	Prime Investment Money Market Fund
Cash Investment Money Market Fund	Municipal Cash Management Money Market Fund	Treasury Plus Money Market Fund
Government Money Market Fund	Municipal Money Market Fund
Variable Trust Funds1
VT Discovery Fund†	VT Intrinsic Value Fund	VT Small Cap Growth Fund
VT Index Asset Allocation Fund	VT Omega Growth Fund	VT Small Cap Value Fund
VT International Equity Fund	VT Opportunity Fund†	VT Total Return Bond Fund

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Wells Fargo Advantage Money Market Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.

1. The Variable Trust Funds are generally available only through insurance company variable contracts.

† In this report, the Wells Fargo Advantage Discovery Fund^SM, Wells Fargo Advantage Endeavor Select Fund^SM, Wells Fargo Advantage Enterprise Fund^SM, Wells Fargo Advantage Opportunity Fund^SM, Wells Fargo Advantage Social Sustainability Fund^SM, Wells Fargo Advantage WealthBuilder Conservative Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Equity Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Moderate Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Tactical Equity Portfolio^SM, Wells Fargo Advantage Dow Jones Target Today Fund^SM, Wells Fargo Advantage Dow Jones Target 2010 Fund^SM, Wells Fargo Advantage Dow Jones Target 2015 Fund^SM, Wells Fargo Advantage Dow Jones Target 2020 Fund^SM, Wells Fargo Advantage Dow Jones Target 2025 Fund^SM, Wells Fargo Advantage Dow Jones Target 2030 Fund^SM, Wells Fargo Advantage Dow Jones Target 2035 Fund^SM, Wells Fargo Advantage Dow Jones Target 2040 Fund^SM, Wells Fargo Advantage Dow Jones Target 2045 Fund^SM, Wells Fargo Advantage Dow Jones Target 2050 Fund^SM, Wells Fargo Advantage Dow Jones Target 2055 Fund^SM, Wells Fargo Advantage Heritage Money Market Fund^SM, Wells Fargo Advantage VT Discovery Fund^SM, and Wells Fargo Advantage VT Opportunity Fund^SM are referred to as the Discovery Fund, Endeavor Select Fund, Enterprise Fund, Opportunity Fund, Social Sustainability Fund, WealthBuilder Conservative Allocation Portfolio, WealthBuilder Equity Portfolio, WealthBuilder Growth Allocation Portfolio, WealthBuilder Growth Balanced Portfolio, WealthBuilder Moderate Balanced Portfolio, WealthBuilder Tactical Equity Portfolio, Target Today Fund, Target 2010 Fund, Target 2015 Fund, Target 2020 Fund, Target 2025 Fund, Target 2030 Fund, Target 2035 Fund, Target 2040 Fund, Target 2045 Fund, Target 2050 Fund, Target 2055 Fund, Heritage Money Market Fund, VT Discovery Fund, and VT Opportunity Fund, respectively.

Not part of the annual report.

2 Wells Fargo Advantage VT Index Asset Allocation Fund Letter to Shareholders

Karla M. Rabusch,

President

Wells Fargo Advantage Funds

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

Dear Valued Shareholder:

We’re pleased to offer you this annual report for the Wells Fargo Advantage VT Index Asset Allocation Fund for the 12-month period that ended December 31, 2011. For the full 12-month period, most of the major domestic equity indexes posted either modest gains or relatively mild losses. However, the market’s 12-month return figures mask the uneven path that it traced throughout the year as investors had to contend with a variety of global and domestic headwinds. Whatever the future holds, we continue to believe that most investors can benefit from adhering to a well-diversified investment strategy. Over the long-term, such a strategy may allow you to balance risks and opportunities as you pursue your financial goals in a dynamic market landscape.

The economic recovery gained traction as the year progressed.

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

2011 opened on a note of mounting optimism regarding the strength of the recovery, yet a batch of disappointing economic data in the spring and summer cast renewed doubts on the sustainability of the recovery. In September, it was reported that U.S. gross domestic product (GDP) grew at a mere 1.3% annual rate in the second quarter of 2011, following anemic growth at an annual rate of 0.4% in the first quarter. According to the December estimate, GDP growth accelerated to an annual rate of 1.8% in the third quarter, reigniting hopes for a sustainable recovery. Those hopes were buoyed by widespread anticipation of even stronger GDP growth in the fourth quarter. By the end of the 12-month period, few economists believed that the U.S. economy was in danger of sliding back into recession, although many expected a sluggish growth environment in 2012.

The struggling housing and labor markets slowed growth.

As has been the case throughout the recovery, the housing and labor markets continued to restrain economic momentum during 2011.

The beleaguered housing market has arguably exerted the biggest drag on growth. Despite intermittent signs of improvement, ongoing weakness in sales of both new and existing homes has put considerable downward pressure on prices. On the other hand, the labor market took a decided turn for the better in the latter half of the year: initial unemployment claims have eased in recent months, and the private sector has been steadily adding jobs. The pace of hiring, while not brisk, was sufficient to push the U.S. unemployment rate down to 8.5% as of December 2011—still well above its historical average, but at its lowest level since February 2009. Many observers expect the unemployment rate to decline further in 2012, which could act as a tailwind for consumer spending—widely viewed as one of the keys to long-term economic growth.

The Federal Reserve announced that it will keep rates low until 2013.

Consumers have already demonstrated some resilience in their spending—even in the face of higher energy costs. Oil prices skyrocketed in early 2011 before retreating later in the year, only to spike again during the fourth quarter. Yet “core” inflation, which excludes volatile energy and food prices, remained fairly benign throughout the year.

Letter to Shareholders Wells Fargo Advantage VT Index Asset Allocation Fund 3

With inflation in check, the Federal Reserve (Fed) held its target range for the federal funds rate—a proxy for short-term interest rates—steady at 0% to 0.25%. Following its August 9 meeting, the Federal Open Market Committee (FOMC) issued a statement explaining that economic conditions were likely to warrant exceptionally low levels for the federal funds rate through at least mid-2013. In addition, the Fed carried out its second round of quantitative easing (QE2) in an effort to promote a more robust economic expansion. The stimulus program was completed as scheduled in June 2011. In September, the Fed launched yet another stimulus program—dubbed “Operation Twist”—that is designed to keep intermediate- and longer-term yields relatively low. The goal with keeping longer-term rates low is to encourage lending activity to spark business investments and home purchases, which, in turn, may provide support for a more sustainable economic recovery.

Market volatility was a dominant theme throughout most of 2011.

Despite pockets of turbulence sparked by the natural disasters in Japan and geopolitical turmoil in North Africa and the Middle East, the U.S. equity market performed very well from January through April of 2011. Some upbeat economic news, better-than-expected corporate profits, and investor enthusiasm about QE2 were among the catalysts for the market’s four-month advance.

In May and June, the market climate shifted to one of anxiety over the increasingly fragile state of the U.S. and global economies. As spring gave way to summer, investors not only worried that the U.S. might be on the brink of recession, they also feared that Europe’s sovereign debt problems could spiral out of control if a Greek default triggered financial contagion across the continent. In July and August, investor sentiment was further undermined by partisan wrangling over the federal debt ceiling and the Standard & Poor’s downgrade of the U.S. credit rating. The barrage of unsettling headlines led to heightened market volatility and sharply falling stock prices in the third quarter of 2011. Although volatility persisted into the fourth quarter, the market was able to rebound amid improved economic data and hopes for a resolution to the European crisis.

For the full 12-month period, the S&P 500 Index¹ of large-cap stocks achieved a total return of 2.1%. The Russell Midcap^® Index² and the Russell 2000^® Index³ of small-cap stocks lost 1.6% and 4.2%, respectively. International stocks fared worse than their U.S. counterparts, with the MSCI EAFE Index⁴ shedding 14.8%.

Economic outlook shifts and European uncertainty swayed bond investors.

Throughout 2011, the bond markets were roiled by changes to the global economic outlook and the ongoing fiscal challenges facing many countries in the

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 Russell Midcap^® Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 25% of the total market capitalization of the Russell 1000^® Index. You cannot invest directly in an index.

3. The Russell 2000^® Index measures the performance of the 2,000 smallest companies in the Russell 3000^® Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index. You cannot invest directly in an index.

4. The Morgan Stanley Capital International Europe, Australasia, and Far East (“MSCI EAFE”) Stock Index is an unmanaged group of securities widely regarded by investors to be representations of the stock markets of Europe, Australasia, and the Far East. You cannot invest directly in an index. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

4 Wells Fargo Advantage VT Index Asset Allocation Fund Letter to Shareholders

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors.

eurozone. In the spring and summer, U.S. economic activity slowed, prompting forecasts of a double-dip recession. Then, in the fall, many of the most closely watched indicators, such as GDP growth and the unemployment rate, improved, and the talk of recession ceased. Nonetheless, the European markets continued to struggle with managing the risk of contagion from countries such as Greece teetering on financial collapse.

This changing and challenging landscape only heightened volatility and investor risk aversion, which subsided somewhat toward the end of 2011 as the U.S. economic outlook gained some momentum and the European credit crisis appeared to move closer to containment within the region.

The performance across the different bond markets varied widely, depending on the level of volatility and risk aversion in the market, with Treasuries rallying during the spring and summer when the U.S. economy appeared to be slipping backward and high-yield performing best as both the economy and Europe seemed to regain their footing at year-end.

For the full 12-month period, the Barclays Capital U.S. Aggregate Bond Index⁵, representing the universe of investment-grade bonds, posted a total return of 7.84%, while the Barclays Capital U.S. Corporate High Yield Bond Index⁶ added 4.98%. By comparison, the Barclays Capital U.S. Treasury Index⁷. returned 9.81%, with maturities of 20 years and longer performing best by returning 33.84% for the year.

Recent events have not altered our message to shareholders.

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors. Bear in mind that many investors who indiscriminately sold their equity investments during the severe market downturn of 2008 to 2009 missed out on the impressive two-year rally that followed. In our opinion, the lesson to be learned from these dramatic market events is that, for many investors, simply building and maintaining a well-diversified⁸ investment plan is the best long-term strategy.

5. The Barclays Capital U.S. Aggregate Bond Index is composed of the Barclays Capital Government/Credit Index and the Mortgage-Backed Securities Index and includes U.S. Treasury issues, agency issues, corporate bond issues, and mortgage-backed securities. You cannot invest directly in an index.

6. The Barclays Capital U.S. Corporate High Yield Bond Index is an unmanaged, U.S. dollar denominated, nonconvertible, non-investment grade debt index. The Index consists of domestic and corporate bonds rated Ba and below with a minimum outstanding amount of $150 million. You cannot invest directly in an index.

7. The Barclays Capital U.S. Treasury Index is an index of U.S. Treasury securities. You cannot invest directly in an index

8. Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses.

Letter to Shareholders Wells Fargo Advantage VT Index Asset Allocation Fund 5

Thank you for choosing to invest with Wells Fargo Advantage Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs. For current information about your fund investments, contact your investment professional, visit our website at www.wellsfargo.com/advantagefunds, or call us directly at 1-800-222-8222. We are available 24 hours a day, 7 days a week.

Sincerely,

Karla M. Rabusch

President

Wells Fargo Advantage Funds

6 Wells Fargo Advantage VT Index Asset Allocation Fund Performance Highlights (Unaudited)

INVESTMENT OBJECTIVE

The Fund seeks long-term total return, consisting of capital appreciation and current income.

ADVISER

Wells Fargo Funds Management, LLC

SUB-ADVISER

Wells Capital Management Incorporated

PORTFOLIO MANAGERS

Gregory T. Genung, CFA, CAIA

Jeffrey P. Mellas, CAIA

FUND INCEPTION

April 15, 1994

12 MONTH TOTAL RETURN AS OF DECEMBER 31, 2011
Class 2	6.48%
Index Asset Allocation Composite Index1	15.06%
S&P 500 Index2	2.11%
Barclays Capital U.S. Treasury 20+ Year Index3	33.84%

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

The Adviser has committed through April 30, 2012 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain other expenses at 1.00% for Class 2. The Fund’s gross and net expense ratios are 1.08% and 1.00%, respectively, for Class 2 shares. Without these reductions, the Fund’s returns would have been lower.

1. The Index Asset Allocation Composite Index is weighted 60% in the S&P 500 Index and 40% in the Barclays Capital U.S. Treasury 20+ Year Index. You cannot invest directly in an index.

2. The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market valueweighted index with each stock’s weight in the index proportionate to its market value. You cannot invest directly in an index.

3. The Barclays Capital U.S. Treasury 20+ Year Index is an unmanaged index composed of securities in the U.S. Treasury Index with maturities of 20 years or greater. You cannot invest directly in an index.

4. The chart compares the performance of the Wells Fargo Advantage VT Index Asset Allocation Fund Class 2 for the most recent ten years of the Fund with the S&P 500 Index, the Barclays Capital U.S. Treasury 20+ Year Index, and the Index Asset Allocation Composite Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Index Asset Allocation Fund 7

MANAGER’S DISCUSSION

Fund highlights

n The Fund underperformed its benchmark, the Index Asset Allocation Composite Index, for the 12-month period that ended December 31, 2011. While the Fund outperformed the S&P 500, it underperformed the Barclays Capital U.S. Treasury 20+ Year Index, as longer-term Treasuries rallied significantly over the year.

n At the end of the period, the Fund was at a maximum equity overweighting, with an effective target allocation of 85% stocks and 15% bonds.

n Because stocks underperformed bonds over the period, Fund performance was hindered by its equity overweight.

TEN LARGEST HOLDINGS5 (AS OF DECEMBER 31, 2011)
US Treasury Bond, 4.38%, 05/15/2041	3.23%
US Treasury Bond, 4.38%, 05/15/2040	3.02%
US Treasury Bond, 4.25%, 11/11/2040	2.99%
US Treasury Bond, 3.75%, 08/15/2041	2.99%
US Treasury Bond, 4.75%, 02/15/2041	2.97%
US Treasury Bond, 4.38%, 11/15/2039	2.91%
US Treasury Bond, 4.63%, 02/15/2040	2.90%
US Treasury Bond, 3.88%, 08/15/2040	2.89%
US Treasury Bond, 4.50%, 08/15/2039	2.23%
US Treasury Bond, 4.25%, 05/15/2039	2.11%

While the total return of the S&P 500 was positive over the 12-month period, the year was characterized more by volatility than performance. At one point, the S&P 500 Index fell 17% in a four-week period, only to close the year flat on a price appreciation basis. Investors who increased their portfolio weights to equities during upward swings within the markets had to rely on timing to produce large gains. However, those who employed a buy-and-hold strategy were able to capture the full total return of 2.11%, including dividends, that was posted by the S&P 500. By comparison, U.S. bonds benefited from the “risk on/risk off” environment as investors flocked from equities during times of heightened instability.

There were a number of reasons for the extraordinary volatility, both domestically and abroad: continued decline of the U.S. housing market, lackluster global economic growth, and stubbornly high domestic unemployment, to name a few. In August, the credit rating on U.S. government debt was downgraded one notch from its AAA⁶ rating by Standard & Poor’s, which cited the current budget deficit and political inability to find debt-reduction measures as reasons for the move. The U.S. rating was not the only sovereign debt rating to be jeopardized, as increasing strain fell on the European Union to deal with the fiscal standing of Greece, Italy, France, and Spain. Political unrest rose in the Middle East as governments battled residents for stability in Tunisia, Egypt, Yemen, and Libya. Global equities were also weighed down by challenges from the major earthquake and tsunami in Japan, which slowed supply chains and ultimately hurt sales for companies around the world.

In the end, seven of the 10 sectors in the S&P 500 Index contributed positively to the index’s return, with the perceived defensive sectors of utilities, consumer staples, and health care leading the way. The political turmoil overseas and market volatility drew investors toward the U.S. dollar and U.S. Treasury products, which drove domestic interest rates lower across the curve. For the year, the S&P 500 Index returned 2.11%, and the Barclays Capital U.S. Treasury 20+ Year Index returned 33.84%.

The Fund underpaced the benchmark, the Index Asset Allocation Composite Index, for the 12-month period primarily due to the Fund’s overweight in equities which underperformed Treasuries during the year. Because the Fund is an indexed portfolio, our goal is to have the Fund’s performance closely track that of the benchmark.

5. The ten largest holdings are calculated based on the value of the securities divided by total net assets of the Fund. Holdings are subject to change and may have changed since the date specified.

6. The ratings indicated are from Standard & Poor’s. Credit-quality ratings apply to underlying holdings of the fund and not the fund itself. Standard and Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories.

8 Wells Fargo Advantage VT Index Asset Allocation Fund Performance Highlights (Unaudited)

SECTOR DISTRIBUTION⁷
(AS OF DECEMBER 31, 2011)

NEUTRAL ALLOCATION⁸
(AS OF DECEMBER 31, 2011)

CURRENT TARGET ALLOCATION⁸
(AS OF DECEMBER 31, 2011)

In the underlying portfolio, the Fund invests a neutral allocation of 60% stocks and 40% bonds and employs futures contracts to tactically make adjustments to that allocation. The Tactical Asset Allocation (TAA) Model shifted to its maximum overweight equity position in late 2007, and we maintained that effective allocation of 85% stocks and 15% bonds throughout 2011. The underperformance of stocks relative to bonds detracted from the Fund’s performance when compared with the neutral benchmark allocation.

There were no changes to the Fund’s tactical allocation.

While there were no changes to the Fund’s tactical allocation, there were changes to the underlying indexes, and we made those adjustments congruently with the S&P 500 Index and the Barclays Capital U.S. Treasury 20+ Year Index throughout the year.

The TAA Model continues to favor stocks relative to bonds.

We believe that the U.S. economy will continue to recover. While the European economic situation has yet to be resolved, the issues have been acknowledged. Job creation should progress as companies re-engage under the assumption that the economy advances, which, in turn, should lead to higher consumer and investor confidence. Corporate earnings were strong again throughout 2011, and currently the S&P 500 Index earnings yield greatly exceeds the yield on the 10-year U.S. Treasury note. Both of these metrics have historically pointed positively toward stocks. We see higher risk of a potential sell-off in bonds, given the low-yield environment and the inverse relationship of fixed-coupon bond prices to interest rates. With this backdrop, we plan to remain overweight in stocks until such time that we see relative valuation between stocks and bonds return to more normal levels.

7. Sector distribution is subject to change and is calculated based on the total long-term investments of the Fund.

8. Portfolio allocations are subject to change. Cash and cash equivalents are not reflected in the calculations of the portfolio allocations. Neutral allocation is the target allocation of the Fund as stated in the Fund’s prospectus. Current target allocation is the current allocation of the Fund based on our Tactical Asset Allocation Model as of the date specified and is subject to change.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Index Asset Allocation Fund 9

AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2011)

													Expense Ratios9
	Inception Date		6 Months*			1 Year		5 Year			10 Year		Gross		Net10
Class 2		04/15/1994		1.93			6.48		1.22			3.82		1.08%		1.00%
Index Asset Allocation Composite Index				10.26			15.06		5.15			6.11
S&P 500 Index				(3.69	)		2.11		(0.25	)		2.92
Barclays Capital U.S. Treasury 20+ Year Index				31.57			33.84		11.13			9.20

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

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

Balanced funds may invest in stocks and bonds. Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. In general, when interest rates rise, bond values fall and investors may lose principal value. The use of derivatives may reduce returns and/or increase volatility. Consult the Fund’s prospectus for additional information on these and other risks.

Please refer to the prospectus provided by your participating insurance company for detailed information describing the separate accounts for information regarding surrender charges, mortality and expense risk fees and other charges that may be assessed by the participating insurance companies.

9. Reflects the expense ratios as stated in the most recent prospectus.

10. The Adviser has committed through April 30, 2012 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain expenses at the amounts shown above. Without this cap, the Fund’s returns would have been lower.

10 Wells Fargo Advantage VT Index Asset Allocation Fund Fund Expenses (Unaudited)

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution (12b-1) 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, 2011 to December 31, 2011.

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 separate account charges assessed by participating insurance companies. 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 separate account charges assessed by participating insurance companies were included, your costs would have been higher.

	Beginning Account Value 07-01-2011		Ending Account Value 12-31-2011		Expenses Paid During the Period1		Net Annual Expense Ratio
Class 2
Actual	$	1,000.00	$	1,019.32	$	5.09		1.00	%
Hypothetical (5% return before expenses)	$	1,000.00	$	1,020.16	$	5.09		1.00	%

1. Expenses paid is equal to the annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year (to reflect the one-half year period).

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Index Asset Allocation Fund 11

Security Name	Shares		Value
Common Stocks: 56.97%
Consumer Discretionary: 6.16%
Auto Components: 0.16%
BorgWarner Incorporated†		490	$	31,233
Johnson Controls Incorporated		3,043		95,124
The Goodyear Tire & Rubber Company†		1,092		15,474
				141,831
Automobiles: 0.25%
Ford Motor Company		16,997		182,888
Harley-Davidson Incorporated«		1,039		40,386
				223,274
Distributors: 0.05%
Genuine Parts Company		696		42,595
Diversified Consumer Services: 0.07%
Apollo Group Incorporated Class A†		519		27,959
DeVry Incorporated		270		10,384
H&R Block Incorporated		1,310		21,392
				59,735
Hotels, Restaurants & Leisure: 1.16%
Carnival Corporation		2,024		66,063
Chipotle Mexican Grill Incorporated†		139		46,946
Darden Restaurants Incorporated		589		26,847
International Game Technology		1,331		22,893
Marriott International Incorporated Class A«		1,199		34,975
McDonald’s Corporation		4,576		459,110
Starbucks Corporation«		3,334		153,397
Starwood Hotels & Resorts Worldwide Incorporated		859		41,206
Wyndham Worldwide Corporation		682		25,800
Wynn Resorts Limited«		354		39,113
Yum! Brands Incorporated		2,059		121,502
				1,037,852
Household Durables: 0.17%
D.R. Horton Incorporated		1,244		15,687
Harman International Industries Incorporated		313		11,907
Leggett & Platt Incorporated«		622		14,331
Lennar Corporation		719		14,128
Newell Rubbermaid Incorporated		1,294		20,898
Pulte Homes Incorporated†		1,506		9,503
Stanley Black & Decker Incorporated«		755		51,038
Whirlpool Corporation«		341		16,180
				153,672
Internet & Catalog Retail: 0.47%
Amazon.com Incorporated†		1,627		281,634
Expedia Incorporated		424		12,304

12 Wells Fargo Advantage VT Index Asset Allocation Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Internet & Catalog Retail (continued)
Netflix Incorporated†		247	$	17,115
Priceline.com Incorporated†		222		103,832
Tripadvisor Incorporated		424		10,689
				425,574
Leisure Equipment & Products: 0.06%
Hasbro Incorporated		519		16,551
Mattel Incorporated«		1,514		42,029
				58,580
Media: 1.77%
Cablevision Systems Corporation New York Group Class A		987		14,035
CBS Corporation Class B		2,927		79,439
Comcast Corporation Class A		12,188		288,977
DIRECTV Group Incorporated†«		3,156		134,951
Discovery Communications Incorporated Class C†«		1,182		48,427
Gannett Company Incorporated		1,065		14,239
Interpublic Group of Companies Incorporated		2,062		20,063
McGraw-Hill Companies Incorporated		1,312		59,001
News Corporation Class A		9,808		174,975
Omnicom Group Incorporated«		1,233		54,967
Scripps Networks Interactive Incorporated«		435		18,453
Time Warner Cable Incorporated		1,427		90,714
Time Warner Incorporated«		4,476		161,763
Viacom Incorporated Class B		2,470		112,163
Walt Disney Company		8,035		301,313
Washington Post Company Class B		21		7,913
				1,581,393
Multiline Retail: 0.47%
Big Lots Incorporated†		293		11,064
Dollar Tree Incorporated†		532		44,215
Family Dollar Stores Incorporated		525		30,272
JCPenney Company Incorporated«		639		22,461
Kohl’s Corporation		1,133		55,914
Macy’s Incorporated		1,877		60,402
Nordstrom Incorporated		723		35,940
Sears Holdings Corporation†«		172		5,466
Target Corporation		3,004		153,865
				419,599
Specialty Retail: 1.16%
Abercrombie & Fitch Company Class A		384		18,755
AutoNation Incorporated†«		212		7,816
AutoZone Incorporated†		124		40,296
Bed Bath & Beyond Incorporated†		1,073		62,202
Best Buy Company Incorporated		1,312		30,661
CarMax Incorporated†«		1,012		30,846
GameStop Corporation Class A†		619		14,936
Gap Incorporated		1,551		28,771

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Index Asset Allocation Fund 13

Security Name	Shares		Value
Specialty Retail (continued)
Home Depot Incorporated		6,895	$	289,866
Limited Brands Incorporated«		1,100		44,385
Lowe’s Companies Incorporated		5,602		142,179
O’Reilly Automotive Incorporated†		574		45,891
Orchard Supply Hardware Corporation Class A†(a)		7		26
Ross Stores Incorporated		1,549		73,624
Staples Incorporated		3,128		43,448
Tiffany & Company		567		37,569
TJX Companies Incorporated		1,686		108,831
Urban Outfitters Incorporated†		496		13,670
				1,033,772
Textiles, Apparel & Luxury Goods: 0.37%
Coach Incorporated		1,305		79,657
Nike Incorporated Class B		1,659		159,878
Ralph Lauren Corporation		288		39,767
VF Corporation		389		49,399
				328,701
Consumer Staples: 6.57%
Beverages: 1.53%
Beam Incorporated		695		35,605
Brown-Forman Corporation Class B		451		36,310
Coca-Cola Enterprises Incorporated		1,395		35,963
Constellation Brands Incorporated Class A†		778		16,081
Dr Pepper Snapple Group Incorporated		958		37,822
Molson Coors Brewing Company«		704		30,652
PepsiCo Incorporated		6,993		463,986
The Coca-Cola Company		10,159		710,825
				1,367,244
Food & Staples Retailing: 1.38%
Costco Wholesale Corporation		1,938		161,474
CVS Caremark Corporation		5,822		237,421
Kroger Company«		2,671		64,692
Safeway Incorporated«		1,520		31,981
SUPERVALU Incorporated«		949		7,706
Sysco Corporation«		2,638		77,373
Wal-Mart Stores Incorporated		7,812		466,845
Walgreen Company		3,977		131,480
Whole Foods Market Incorporated		714		49,680
				1,228,652
Food Products: 1.10%
Archer Daniels Midland Company		2,987		85,428
Campbell Soup Company«		802		26,658
ConAgra Foods Incorporated		1,854		48,946
Dean Foods Company†		821		9,195
General Mills Incorporated		2,878		116,300
H.J. Heinz Company		1,432		77,385

14 Wells Fargo Advantage VT Index Asset Allocation Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Food Products (continued)
Hormel Foods Corporation«		616	$	18,043
JM Smucker Company		509		39,789
Kellogg Company«		1,108		56,032
Kraft Foods Incorporated Class A		7,902		295,219
McCormick & Company Incorporated		593		29,899
Mead Johnson & Company«		910		62,544
Sara Lee Corporation		2,642		49,987
The Hershey Company«		684		42,258
Tyson Foods Incorporated Class A		1,306		26,956
				984,639
Household Products: 1.33%
Clorox Company		590		39,270
Colgate-Palmolive Company«		2,164		199,932
Kimberly-Clark Corporation«		1,762		129,613
Procter & Gamble Company		12,306		820,933
				1,189,748
Personal Products: 0.10%
Avon Products Incorporated		1,926		33,647
Estee Lauder Companies Incorporated Class A		499		56,048
				89,695
Tobacco: 1.13%
Altria Group Incorporated«		9,198		272,721
Lorillard Incorporated		603		68,742
Philip Morris International		7,769		609,711
Reynolds American Incorporated		1,512		62,627
				1,013,801
Energy: 6.99%
Energy Equipment & Services: 1.13%
Baker Hughes Incorporated		1,952		94,945
Cameron International Corporation†«		1,096		53,912
Diamond Offshore Drilling Incorporated«		310		17,131
FMC Technologies Incorporated†«		1,065		55,625
Halliburton Company		4,115		142,009
Helmerich & Payne Incorporated«		479		27,954
Nabors Industries Limited†		1,286		22,299
National Oilwell Varco Incorporated«		1,895		128,841
Noble Corporation«		1,129		34,118
Rowan Companies Incorporated†		559		16,954
Schlumberger Limited		6,003		410,065
				1,003,853
Oil, Gas & Consumable Fuels: 5.86%
Alpha Natural Resources Incorporated†		983		20,083
Anadarko Petroleum Corporation		2,227		169,987
Apache Corporation		1,717		155,526
Cabot Oil & Gas Corporation		467		35,445

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Index Asset Allocation Fund 15

Security Name	Shares		Value
Oil, Gas & Consumable Fuels (continued)
Chesapeake Energy Corporation«		2,948	$	65,711
Chevron Corporation		8,907		947,705
ConocoPhillips Company		5,938		432,702
CONSOL Energy Incorporated		1,014		37,214
Denbury Resources Incorporated†«		1,776		26,818
Devon Energy Corporation		1,806		111,972
El Paso Corporation		3,449		91,640
EOG Resources Incorporated		1,202		118,409
EQT Corporation		668		36,600
Exxon Mobil Corporation		21,439		1,817,170
Hess Corporation		1,332		75,658
Marathon Oil Corporation		3,147		92,113
Marathon Petroleum Corporation		1,594		53,064
Murphy Oil Corporation		865		48,215
Newfield Exploration Company†		592		22,336
Noble Energy Incorporated«		785		74,096
Occidental Petroleum Corporation		3,631		340,225
Peabody Energy Corporation«		1,211		40,096
Pioneer Natural Resources Company		547		48,946
QEP Resources Incorporated		791		23,176
Range Resources Corporation		699		43,286
Southwestern Energy Company†		1,553		49,603
Spectra Energy Corporation		2,908		89,421
Sunoco Incorporated		477		19,567
Tesoro Petroleum Corporation†		636		14,857
The Williams Companies Incorporated		2,636		87,041
Valero Energy Corporation		2,503		52,688
				5,241,370
Financials: 8.16%
Capital Markets: 1.03%
Ameriprise Financial Incorporated		1,012		50,236
Bank of New York Mellon Corporation		5,424		107,992
BlackRock Incorporated		448		79,852
Charles Schwab Corporation		4,828		54,363
E*TRADE Financial Corporation†		1,135		9,035
Federated Investors Incorporated Class B		413		6,257
Franklin Resources Incorporated		651		62,535
Goldman Sachs Group Incorporated		2,202		199,127
Invesco Limited		2,017		40,522
Legg Mason Incorporated		556		13,372
Morgan Stanley		6,638		100,433
Northern Trust Corporation«		1,077		42,714
State Street Corporation		2,200		88,682
T. Rowe Price Group Incorporated«		1,130		64,354
				919,474
Commercial Banks: 1.52%
Branch Banking & Trust Corporation		3,118		78,480
Comerica Incorporated		888		22,910

16 Wells Fargo Advantage VT Index Asset Allocation Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Commercial Banks (continued)
Fifth Third Bancorp		4,114	$	52,330
First Horizon National Corporation		1,179		9,432
Huntington Bancshares Incorporated		3,864		21,213
KeyCorp Incorporated		4,262		32,775
M&T Bank Corporation«		561		42,827
PNC Financial Services Group Incorporated		2,353		135,698
Regions Financial Corporation		5,630		24,209
SunTrust Banks Incorporated		2,401		42,498
US Bancorp		8,536		230,899
Wells Fargo & Company(l)		23,588		650,085
Zions Bancorporation		824		13,415
				1,356,771
Consumer Finance: 0.95%
American Express Company		4,519		213,161
Capital One Financial Corporation«		2,056		86,948
Discover Financial Services		2,458		58,992
MasterCard Incorporated		476		177,462
SLM Corporation		2,275		30,485
Visa Incorporated Class A«		2,274		230,879
Western Union Company«		2,769		50,562
				848,489
Diversified Financial Services: 2.20%
Bank of America Corporation		45,337		252,074
Berkshire Hathaway Incorporated Class B†		7,863		599,947
Citigroup Incorporated		13,077		344,056
CME Group Incorporated		296		72,126
InterContinental Exchange Incorporated†«		324		39,058
JPMorgan Chase & Company		16,996		565,117
Leucadia National Corporation«		886		20,148
Moody’s Corporation«		873		29,403
NASDAQ Stock Market Incorporated†		570		13,971
NYSE Euronext Incorporated		1,171		30,563
				1,966,463
Insurance: 1.37%
ACE Limited		1,506		105,601
AFLAC Incorporated		2,087		90,284
Allstate Corporation		2,260		61,947
American International Group Incorporated†		1,953		45,310
AON Corporation		1,446		67,673
Assurant Incorporated		411		16,876
Chubb Corporation«		1,243		86,040
Cincinnati Financial Corporation		725		22,084
Genworth Financial Incorporated†		2,195		14,377
Hartford Financial Services Group Incorporated		1,993		32,386
Lincoln National Corporation		1,349		26,198
Loews Corporation		1,365		51,392
Marsh & McLennan Companies Incorporated		2,406		76,078

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Index Asset Allocation Fund 17

Security Name	Shares		Value
Insurance (continued)
MetLife Incorporated		4,730	$	147,481
Principal Financial Group Incorporated		1,364		33,554
Prudential Financial Incorporated«		2,111		105,803
The Progressive Corporation		2,758		53,809
The Travelers Companies Incorporated		1,846		109,228
Torchmark Corporation		455		19,742
UnumProvident Corporation		1,307		27,538
XL Group plc		1,433		28,330
				1,221,731
Real Estate Management & Development: 0.02%
CBRE Group Incorporated†		1,450		22,069
REIT: 1.03%
Apartment Investment & Management Company Class A		540		12,371
AvalonBay Communities Incorporated		425		55,505
Boston Properties Incorporated		660		65,736
Equity Residential Corporation«		1,326		75,622
HCP Incorporated«		1,824		75,568
Health Care REIT Incorporated«		848		46,241
Host Hotels & Resorts Incorporated«		3,158		46,644
Kimco Realty Corporation		1,820		29,557
Plum Creek Timber Company«		721		26,360
Prologis Incorporated		2,049		58,581
Public Storage Incorporated«		635		85,382
Simon Property Group Incorporated		1,314		169,427
Ventas Incorporated«		1,287		70,952
Vornado Realty Trust		825		63,410
Weyerhaeuser Company		2,399		44,789
				926,145
Thrifts & Mortgage Finance: 0.04%
Hudson City Bancorp Incorporated		2,359		14,744
People’s United Financial Incorporated«		1,613		20,727
				35,471
Health Care: 6.69%
Biotechnology: 0.69%
Amgen Incorporated		3,548		227,817
Biogen Idec Incorporated†		1,086		119,514
Celgene Corporation†		1,985		134,186
Gilead Sciences Incorporated†		3,359		137,484
				619,001
Health Care Equipment & Supplies: 1.01%
Baxter International Incorporated		2,522		124,789
Becton Dickinson & Company		961		71,806
Boston Scientific Corporation†		6,626		35,383
C.R. Bard Incorporated		383		32,747
CareFusion Corporation†		1,004		25,512

18 Wells Fargo Advantage VT Index Asset Allocation Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Health Care Equipment & Supplies (continued)
Covidien plc		2,157	$	97,087
DENTSPLY International Incorporated«		633		22,149
Edwards Lifesciences Corporation†		510		36,057
Intuitive Surgical Incorporated†		174		80,564
Medtronic Incorporated		4,720		180,540
St. Jude Medical Incorporated		1,426		48,912
Stryker Corporation		1,454		72,278
Varian Medical Systems Incorporated†«		503		33,766
Zimmer Holdings Incorporated«		801		42,789
				904,379
Health Care Providers & Services: 1.20%
Aetna Incorporated		1,620		68,348
AmerisourceBergen Corporation		1,155		42,954
Cardinal Health Incorporated		1,545		62,742
CIGNA Corporation		1,276		53,592
Coventry Health Care Incorporated†		645		19,589
DaVita Incorporated†«		418		31,689
Express Scripts Incorporated†		2,176		97,245
Humana Incorporated		731		64,043
Laboratory Corporation of America Holdings†«		443		38,085
McKesson Corporation		1,098		85,545
Medco Health Solutions Incorporated†		1,731		96,763
Patterson Companies Incorporated«		392		11,572
Quest Diagnostics Incorporated		705		40,932
Tenet Healthcare Corporation†«		1,942		9,962
UnitedHealth Group Incorporated«		4,768		241,642
WellPoint Incorporated		1,555		103,019
				1,067,722
Health Care Technology: 0.05%
Cerner Corporation†«		651		39,874
Life Sciences Tools & Services: 0.16%
Life Technologies Corporation†		797		31,011
PerkinElmer Incorporated		505		10,100
Thermo Fisher Scientific Incorporated†		1,692		76,089
Waters Corporation†«		400		29,620
				146,820
Pharmaceuticals: 3.58%
Abbott Laboratories		6,967		391,754
Allergan Incorporated		1,364		119,677
Bristol-Myers Squibb Company		7,579		267,084
Eli Lilly & Company		4,557		189,389
Forest Laboratories Incorporated†		1,194		36,130
Hospira Incorporated†«		736		22,352
Johnson & Johnson Services Incorporated«		12,214		800,994
Merck & Company Incorporated		13,633		513,964
Mylan Laboratories Incorporated†		1,907		40,924
Perrigo Company		416		40,477

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Index Asset Allocation Fund 19

Security Name	Shares		Value
Pharmaceuticals (continued)
Pfizer Incorporated		34,383	$	744,048
Watson Pharmaceuticals Incorporated†		568		34,273
				3,201,066
Industrials: 6.03%
Aerospace & Defense: 1.47%
Boeing Company		3,324		243,815
General Dynamics Corporation		1,592		105,725
Goodrich Corporation		560		69,272
Honeywell International Incorporated«		3,459		187,997
L-3 Communications Holdings Incorporated		446		29,739
Lockheed Martin Corporation		1,186		95,947
Northrop Grumman Corporation«		1,168		68,305
Precision Castparts Corporation«		644		106,125
Raytheon Company		1,548		74,892
Rockwell Collins Incorporated«		676		37,430
United Technologies Corporation		4,052		296,161
				1,315,408
Air Freight & Logistics: 0.59%
C.H. Robinson Worldwide Incorporated«		734		51,219
Expeditors International of Washington Incorporated		948		38,830
FedEx Corporation		1,418		118,417
United Parcel Service Incorporated Class B		4,316		315,888
				524,354
Airlines: 0.03%
Southwest Airlines Company«		3,482		29,806
Building Products: 0.02%
Masco Corporation		1,600		16,768
Commercial Services & Supplies: 0.31%
Avery Dennison Corporation		470		13,480
Cintas Corporation		493		17,161
Dun & Bradstreet Corporation		217		16,238
Equifax Incorporated		541		20,958
Iron Mountain Incorporated«		830		25,564
Pitney Bowes Incorporated«		892		16,538
Republic Services Incorporated		1,408		38,790
Robert Half International Incorporated		639		18,186
RR Donnelley & Sons Company«		840		12,121
Stericycle Incorporated†«		380		29,610
Waste Management Incorporated«		2,059		67,350
				275,996
Construction & Engineering: 0.09%
Fluor Corporation		758		38,090
Jacobs Engineering Group Incorporated†«		573		23,252
Quanta Services Incorporated†«		939		20,226
				81,568

20 Wells Fargo Advantage VT Index Asset Allocation Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Electrical Equipment: 0.31%
Cooper Industries plc		707	$	38,284
Emerson Electric Company«		3,290		153,281
Rockwell Automation Incorporated«		634		46,517
Roper Industries Incorporated		431		37,441
				275,523
Industrial Conglomerates: 1.37%
3M Company		3,134		256,142
General Electric Company		47,222		845,746
Textron Incorporated		1,244		23,002
Tyco International Limited		2,066		96,503
				1,221,393
Machinery: 1.22%
Caterpillar Incorporated		2,892		262,015
Cummins Incorporated«		862		75,873
Danaher Corporation		2,548		119,858
Deere & Company«		1,851		143,175
Dover Corporation		829		48,123
Eaton Corporation		1,494		65,034
Flowserve Corporation		248		24,631
Illinois Tool Works Incorporated«		2,161		100,940
Ingersoll-Rand plc«		1,396		42,536
Joy Global Incorporated«		470		35,236
Paccar Incorporated«		1,602		60,027
Pall Corporation«		515		29,432
Parker Hannifin Corporation		675		51,469
Snap-On Incorporated		260		13,161
Xylem Incorporated		825		21,194
				1,092,704
Road & Rail: 0.50%
CSX Corporation		4,696		98,898
Norfolk Southern Corporation«		1,503		109,509
Ryder System Incorporated		228		12,116
Union Pacific Corporation		2,160		228,830
				449,353
Trading Companies & Distributors: 0.12%
Fastenal Company«		1,320		57,565
W.W. Grainger Incorporated«		271		50,728
				108,293
Information Technology: 10.37%
Communications Equipment: 1.19%
Cisco Systems Incorporated		24,045		434,734
F5 Networks Incorporated†		355		37,673
Harris Corporation«		517		18,633
JDS Uniphase Corporation†		1,024		10,691
Juniper Networks Incorporated†		2,352		48,004

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Index Asset Allocation Fund 21

Security Name	Shares		Value
Communications Equipment (continued)
Motorola Mobility Holdings Incorporated†		1,179	$	45,745
Motorola Solutions Incorporated		1,281		59,297
QUALCOMM Incorporated		7,518		411,235
				1,066,012
Computers & Peripherals: 2.64%
Apple Incorporated†		4,157		1,683,585
Dell Incorporated†		6,830		99,923
EMC Corporation†«		9,124		196,531
Hewlett-Packard Company		8,887		228,929
Lexmark International Incorporated«		321		10,615
NetApp Incorporated†«		1,604		58,177
SanDisk Corporation†		1,074		52,852
Western Digital Corporation†		1,045		32,343
				2,362,955
Electronic Equipment, Instruments & Components: 0.32%
Agilent Technologies Incorporated†		1,553		54,246
Amphenol Corporation Class A		741		33,634
Corning Incorporated		7,029		91,236
FLIR Systems Incorporated«		697		17,474
Jabil Circuit Incorporated		819		16,102
Molex Incorporated		613		14,626
TE Connectivity Limited		1,898		58,477
				285,795
Internet Software & Services: 1.15%
Akamai Technologies Incorporated†		802		25,889
eBay Incorporated†		5,139		155,866
Google Incorporated Class A†		1,130		729,867
VeriSign Incorporated		711		25,397
Yahoo! Incorporated†		5,547		89,473
				1,026,492
IT Services: 1.70%
Accenture plc«		2,866		152,557
Automatic Data Processing Incorporated		2,185		118,012
Cognizant Technology Solutions Corporation Class A†		1,351		86,883
Computer Sciences Corporation		693		16,424
Fidelity National Information Services Incorporated		1,085		28,850
Fiserv Incorporated†		630		37,006
International Business Machines Corporation«		5,271		969,231
Paychex Incorporated		1,442		43,419
SAIC Incorporated†		1,235		15,178
Teradata Corporation†«		748		36,285
Total System Services Incorporated		725		14,181
				1,518,026
Office Electronics: 0.06%
Xerox Corporation		6,204		49,384

22 Wells Fargo Advantage VT Index Asset Allocation Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Semiconductors & Semiconductor Equipment: 1.33%
Advanced Micro Devices Incorporated†		2,618	$	14,137
Altera Corporation		1,435		53,239
Analog Devices Incorporated		1,332		47,659
Applied Materials Incorporated		5,840		62,546
Broadcom Corporation Class A		2,169		63,682
First Solar Incorporated†		262		8,845
Intel Corporation«		22,776		552,318
KLA-Tencor Corporation«		745		35,946
Linear Technology Corporation		1,018		30,571
LSI Logic Corporation†		2,520		14,994
Microchip Technology Incorporated«		854		31,282
Micron Technology Incorporated†		4,417		27,783
Novellus Systems Incorporated†		297		12,263
NVIDIA Corporation†		2,731		37,852
Teradyne Incorporated†		823		11,217
Texas Instruments Incorporated		5,111		148,781
Xilinx Incorporated«		1,173		37,606
				1,190,721
Software: 1.98%
Adobe Systems Incorporated†		2,195		62,053
Autodesk Incorporated†		1,014		30,755
BMC Software Incorporated†		761		24,946
CA Incorporated		1,655		33,456
Citrix Systems Incorporated†		834		50,640
Electronic Arts Incorporated†		1,482		30,529
Intuit Incorporated		1,329		69,892
Microsoft Corporation		33,488		869,348
Oracle Corporation		17,600		451,440
Red Hat Incorporated†«		862		35,592
Salesforce.com Incorporated†«		608		61,688
Symantec Corporation†		3,297		51,598
				1,771,937
Materials: 1.99%
Chemicals: 1.27%
Air Products & Chemicals Incorporated		941		80,164
Airgas Incorporated		305		23,814
CF Industries Holdings Incorporated		292		42,334
Dow Chemical Company		5,286		152,025
E.I. du Pont de Nemours & Company		4,132		189,163
Eastman Chemical Company		615		24,022
Ecolab Incorporated		1,342		77,581
FMC Corporation		314		27,017
International Flavors & Fragrances Incorporated		361		18,924
Monsanto Company		2,394		167,748
Mosaic Company		1,331		67,122
PPG Industries Incorporated		690		57,608
Praxair Incorporated		1,340		143,246
Sherwin-Williams Company		385		34,369

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Index Asset Allocation Fund 23

Security Name	Shares		Value
Chemicals (continued)
Sigma-Aldrich Corporation«		538	$	33,603
				1,138,740
Construction Materials: 0.02%
Vulcan Materials Company		578		22,744
Containers & Packaging: 0.08%
Ball Corporation		727		25,961
Bemis Company Incorporated		460		13,837
Owens-Illinois Incorporated†		734		14,225
Sealed Air Corporation		859		14,783
				68,806
Metals & Mining: 0.53%
Alcoa Incorporated		4,760		41,174
Allegheny Technologies Incorporated«		475		22,705
Cliffs Natural Resources Incorporated		639		39,842
Freeport-McMoRan Copper & Gold Incorporated Class B		4,239		155,953
Newmont Mining Corporation		2,213		132,802
Nucor Corporation«		1,416		56,031
Titanium Metals Corporation		368		5,513
United States Steel Corporation		644		17,040
				471,060
Paper & Forest Products: 0.09%
International Paper Company«		1,954		57,838
MeadWestvaco Corporation		763		22,852
				80,690
Telecommunication Services: 1.81%
Diversified Telecommunication Services: 1.64%
AT&T Incorporated		26,506		801,541
CenturyTel Incorporated		2,762		102,746
Frontier Communications Corporation«		4,451		22,923
Verizon Communications Incorporated«		12,663		508,040
Windstream Corporation«		2,606		30,594
				1,465,844
Wireless Telecommunication Services: 0.17%
American Tower Corporation Class A		1,757		105,438
MetroPCS Communications Incorporated†		1,312		11,388
Sprint Nextel Corporation†		13,400		31,356
				148,182
Utilities: 2.20%
Electric Utilities: 1.28%
American Electric Power Company Incorporated		2,160		89,230
Consolidated Edison Incorporated«		1,310		81,259
Duke Energy Corporation«		5,961		131,142

24 Wells Fargo Advantage VT Index Asset Allocation Fund Portfolio of Investments—December 31, 2011

Security Name				Shares		Value
Electric Utilities (continued)
Edison International					1,457	$	60,320
Entergy Corporation«					787		57,490
Exelon Corporation«					2,965		128,592
FirstEnergy Corporation«					1,870		82,841
Nextera Energy Incorporated					1,889		115,002
Northeast Utilities					791		28,531
Pepco Holdings Incorporated«					1,015		20,605
Pinnacle West Capital Corporation					488		23,512
PPL Corporation					2,586		76,080
Progress Energy Incorporated					1,319		73,890
The Southern Company«					3,855		178,448
							1,146,942
Gas Utilities: 0.07%
AGL Resources Incorporated					523		22,102
ONEOK Incorporated					460		39,877
							61,979
Independent Power Producers & Energy Traders: 0.10%
AES Corporation†					2,883		34,135
Constellation Energy Group Incorporated					901		35,743
NRG Energy Incorporated†					1,028		18,627
							88,505
Multi-Utilities: 0.75%
Ameren Corporation					1,083		35,880
CenterPoint Energy Incorporated					1,905		38,271
CMS Energy Corporation«					1,127		24,884
Dominion Resources Incorporated«					2,547		135,195
DTE Energy Company					757		41,219
Integrys Energy Group Incorporated					348		18,855
NiSource Incorporated«					1,257		29,929
PG&E Corporation					1,815		74,814
Public Service Enterprise Group Incorporated					2,262		74,669
SCANA Corporation					516		23,251
Sempra Energy					1,071		58,905
TECO Energy Incorporated					965		18,470
Wisconsin Energy Corporation«					1,047		36,603
Xcel Energy Incorporated					2,169		59,951
							670,896
Total Common Stocks (Cost $44,371,757)							50,927,931
	Dividend Yield
Preferred Stocks: 0.00%
Consumer Discretionary: 0.00%
Specialty Retail: 0.00%
Orchard Supply Hardware Corporation Series A(a)†		0.00	%		7		26
Total Preferred Stocks (Cost $25)							26

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Index Asset Allocation Fund 25

Security Name	Interest Rate			Maturity Date		Principal		Value
U.S. Treasury Securities: 36.22%
U.S. Treasury Bond		3.50	%		02/15/2039	$	1,289,000	$	1,447,104
U.S. Treasury Bond		3.75			08/15/2041		2,276,000		2,670,388
U.S. Treasury Bond		3.88			08/15/2040		2,163,000		2,587,151
U.S. Treasury Bond		4.25			05/15/2039		1,484,000		1,884,449
U.S. Treasury Bond		4.25			11/15/2040		2,104,000		2,677,340
U.S. Treasury Bond		4.38			02/15/2038		736,000		950,360
U.S. Treasury Bond		4.38			11/15/2039		2,010,000		2,604,520
U.S. Treasury Bond		4.38			05/15/2040		2,084,000		2,701,385
U.S. Treasury Bond		4.25			05/15/2041		2,224,000		2,891,200
U.S. Treasury Bond		4.50			02/15/2036		1,195,000		1,562,463
U.S. Treasury Bond		4.50			05/15/2038		920,000		1,211,094
U.S. Treasury Bond		4.50			08/15/2039		1,509,000		1,991,645
U.S. Treasury Bond		4.63			02/15/2040		1,925,000		2,591,231
U.S. Treasury Bond		4.75			02/15/2037		668,000		906,706
U.S. Treasury Bond		4.75			02/15/2041		1,930,000		2,654,655
U.S. Treasury Bond		5.00			05/15/2037		748,000		1,051,642
Total U.S. Treasury Securities (Cost $25,917,313)									32,383,333
Other: 0.65%
Gryphon Funding Limited, Pass-Through Entity(a)(i)(v)							406,693		113,874
VFNC Corporation, Pass-Through Entity, 0.30%(a)(i)(v)144A±							1,092,611		469,823
Total Other (Cost $262,519)									583,697
	Yield					Shares
Short-Term Investments: 17.20%
Investment Companies: 14.61%
Wells Fargo Advantage Cash Investment Money Market Fund, Institutional Class(l)(u)		0.04					3,329,088		3,329,088
Wells Fargo Securities Lending Cash Investments, LLC(l)(v)(u)(r)		0.12					9,730,579		9,730,579
									13,059,667
				Maturity Date		Principal
U.S. Treasury Securities: 2.59%
U.S. Treasury Bill#		0.01			02/02/2012	$	840,000		839,992
U.S. Treasury Bill#		0.02			04/05/2012		30,000		29,999
U.S. Treasury Bill#		0.12			05/03/2012		1,450,000		1,449,878
									2,319,869
Total Short-Term Investments (Cost $15,379,442)									15,379,536

Total Investments in Securities
(Cost $85,931,056)*	111.04	%		99,274,523
Other Assets and Liabilities, Net	(11.04	)		(9,872,234	)
Total Net Assets	100.00	%	$	89,402,289

26 Wells Fargo Advantage VT Index Asset Allocation Fund Portfolio of Investments—December 31, 2011

† Non-income earning security.

« All or a portion of this security is on loan.

(a) Security is fair valued by the Management Valuation Team, and in certain instances by the Board of Trustees, in accordance with procedures approved by the Board of Trustees.

(l) Investment in an affiliate. The total cost of affiliated investments is $14,041,272.

144A Security that may be resold to “qualified institutional buyers” under Rule 144A or security offered pursuant to Section 4(2) of the Securities Act of 1933, as amended.

± Variable rate investment.

(i) Illiquid security for which the designation as illiquid is unaudited.

(v) Security represents investment of cash collateral received from securities on loan.

(u) Rate shown is the 7-day annualized yield at period end.

(r) The investment company is exempt from registration under Section 3(c)(7) of the 1940 Act.

# All or a portion of this security is segregated as collateral for investments in derivative instruments.

* Cost for federal income tax purposes is $88,561,894 and net unrealized appreciation (depreciation) consists of:

Gross unrealized appreciation	$	24,568,661
Gross unrealized depreciation		(13,856,032	)
Net unrealized appreciation	$	10,712,629

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

Statement of Assets and Liabilities—December 31, 2011 Wells Fargo Advantage VT Index Asset Allocation Fund 27

Assets
Investments
In unaffiliated securities (including securities on loan), at value	$	85,564,771
In affiliated securities, at value		13,709,752
Total investments, at value (see cost below)		99,274,523
Receivable for investments sold		8,120
Receivable for Fund shares sold		28,517
Receivable for dividends and interest		368,103
Receivable for securities lending income		986
Prepaid expenses and other assets		828
Total assets		99,681,077
Liabilities
Payable for Fund shares redeemed		51,469
Payable upon receipt of securities loaned		9,993,099
Payable for daily variation margin on open futures contracts		139,225
Advisory fee payable		26,599
Distribution fees payable		19,491
Due to other related parties		10,069
Accrued expenses and other liabilities		38,836
Total liabilities		10,278,788
Total net assets	$	89,402,289
NET ASSETS CONSIST OF
Paid-in capital	$	107,354,986
Accumulated net realized losses on investments		(31,785,134	)
Net unrealized gains on investments		13,832,437
Total net assets	$	89,402,289
COMPUTATION OF NET ASSET VALUE PER SHARE1
Net assets – Class 2	$	89,402,289
Shares outstanding – Class 2		7,396,366
Net asset value per share – Class 2		$12.09
Total investments, at cost	$	85,931,056
Securities on loan, at value	$	9,707,881

1. The Fund has an unlimited number of authorized shares.

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

28 Wells Fargo Advantage VT Index Asset Allocation Fund Statement of Operations—Year Ended December 31, 2011

Investment income
Interest	$	1,359,065
Dividends		1,170,808
Securities lending income, net		19,693
Income from affiliated securities		15,039
Total investment income		2,564,605
Expenses
Advisory fee		523,480
Administration fees
Fund level		47,588
Class 2		76,143
Distribution fees
Class 2		237,945
Custody and accounting fees		47,545
Professional fees		36,361
Shareholder report expenses		11,342
Trustees’ fees and expenses		16,312
Other fees and expenses		9,045
Total expenses		1,005,761
Less: Fee waivers and/or expense reimbursements		(59,589	)
Net expenses		946,172
Net investment income		1,618,433
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains (losses) on:
Unaffiliated securities		3,762,024
Affiliated securities		(78,827	)
Futures transactions		(3,425,674	)
Net realized gains on investments		257,523
Net change in unrealized gains (losses) on:
Unaffiliated securities		5,137,125
Affiliated securities		(16,257	)
Futures transactions		(1,021,496	)
Net change in unrealized gains (losses) on investments		4,099,372
Net realized and unrealized gains (losses) on investments		4,356,895
Net increase in net assets resulting from operations	$	5,975,328

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

Statements of Changes in Net Assets Wells Fargo Advantage VT Index Asset Allocation Fund 29

	Year Ended December 31,2011						Year Ended December 31, 2010
Operations
Net investment income				$	1,618,433					$	1,836,429
Net realized gains on investments					257,523						160,010
Net change in unrealized gains (losses) on investments					4,099,372						10,765,649
Net increase in net assets resulting from operations					5,975,328						12,762,088
Distributions to shareholders from
Net investment income – Class 2					(2,862,036	)					(1,839,244	)1
Capital share transactions		Shares						Shares
Proceeds from shares sold – Class 2		112,473			1,333,493			139,292	1		1,515,929	1
Reinvestment of distributions – Class 2		242,703			2,862,036			168,941	1		1,839,244	1
Payment for shares redeemed – Class 2		(1,742,779	)		(20,852,107	)		(2,281,355	)1		(24,603,284	)1
Net decrease in net assets resulting from capital share transactions					(16,656,578	)					(21,248,111	)
Total decrease in net assets					(13,543,286	)					(10,325,267	)
Net assets
Beginning of period					102,945,575						113,270,842
End of period				$	89,402,289					$	102,945,575
Undistributed net investment income				$	0					$	87,874

1. After the close of business on July 16, 2010, existing shares of the Fund were renamed Class 2 shares.

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

30 Wells Fargo Advantage VT Index Asset Allocation Fund Financial Highlights

(For a share outstanding throughout each period)

	Year Ended December 31,
Class 21	2011			2010			2009			2008			2007
Net asset value, beginning of period	$	11.72		$	10.53		$	9.31		$	14.64		$	14.13
Net investment income		0.21			0.20			0.19			0.30			0.34
Net realized and unrealized gains (losses) on investments		0.54			1.18			1.22			(4.32	)		0.73
Total from investment operations		0.75			1.38			1.41			(4.02	)		1.07
Distributions to shareholders from
Net investment income		(0.38	)		(0.19	)		(0.19	)		(0.30	)		(0.33	)
Net realized gains		0.00			0.00			0.00			(1.01	)		(0.23	)
Total distributions to shareholders		(0.38	)		(0.19	)		(0.19	)		(1.31	)		(0.56	)
Net asset value, end of period		$12.09			$11.72			$10.53			$9.31			$14.64
Total return		6.48	%		13.29	%		15.46	%		(29.11	)%		7.60	%
Ratios to average net assets (annualized)
Gross expenses		1.06	%		1.10	%		1.07	%		1.07	%		1.02	%
Net expenses		0.99	%		1.00	%		1.00	%		1.00	%		1.00	%
Net investment income		1.70	%		1.76	%		2.01	%		2.37	%		2.26	%
Supplemental data
Portfolio turnover rate		17	%		25	%		43	%		21	%		25	%
Net assets, end of period (000’s omitted)		$89,402			$102,946			$113,271			$125,958			$254,054

1. After the close of business on July 16, 2010, existing shares of the Fund were renamed Class 2 shares.

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

Notes to Financial Statements Wells Fargo Advantage VT Index Asset Allocation Fund 31

1. ORGANIZATION

Wells Fargo Variable 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”). These financial statements report on Wells Fargo Advantage VT Index Asset Allocation 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

Investments in equity securities are valued each business day as of the close of regular trading on the New York Stock Exchange, which is usually 4:00 p.m. (Eastern Time). Securities which are traded on a national or foreign securities exchange are valued at the last reported sales price, except that securities listed on The Nasdaq Stock Market, Inc. (“Nasdaq”) are valued at the Nasdaq Official Closing Price (“NOCP”), and if no NOCP is available, then at the last reported sales price. If no sales price is shown on the Nasdaq, the bid price will be used. In the absence of any sale of securities listed on the Nasdaq, and in the case of other securities (including U.S. Government obligations, but excluding debt securities maturing in 60 days or less), the price will be deemed “stale” and the valuations will be determined in accordance with the Fund’s Fair Value Procedures.

Fixed income securities with maturities exceeding 60 days are valued based on available evaluated prices received from an independent pricing service approved by the Board of Trustees which may utilize both transaction data and market information such as yield, prices of securities of comparable quality, coupon rate, maturity, type of issue, trading characteristics and other market data. If valuations are not available from the pricing service or values received are deemed not representative of market value, values will be obtained from a third party broker-dealer or determined based on the Fund’s Fair Value Procedures.

Debt securities of sufficient credit quality with original maturities of 60 days or less generally are valued at amortized cost which approximates fair value. The amortized cost method involves valuing a security at its cost, plus accretion of discount or minus amortization of premium over the period until maturity.

Investments in open-end mutual funds and non-registered investment companies are generally valued at net asset value.

Investments which are not valued using any of the methods discussed above, are valued at their fair value, as determined by procedures established in good faith and approved by the Board of Trustees.

Security loans

The Fund may lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. The Fund continues to receive interest or dividends on the securities loaned. The Fund receives collateral in the form of cash or securities with a value at least equal to the value of the securities on loan. The value of the loaned securities is determined at the close of each business day and any additional required collateral is delivered to the Fund on the next business day. In a securities lending transaction, the net asset value of the Fund will be affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of the instrument in which collateral is invested. The amount of securities lending activity undertaken by the Fund fluctuates from time to time. In the event of default or bankruptcy by the borrower, the Fund may be prevented from recovering the loaned securities or gaining access to the collateral or may experience delays or costs in doing so. In addition, the investment of any cash collateral received may lose all or part of its value. The Fund has the right under the lending agreement to recover the securities from the borrower on demand.

The Fund lends its securities through an unaffiliated securities lending agent. Cash collateral received in connection with its securities lending transactions is invested in Wells Fargo Securities Lending Cash Investments, LLC (the “Cash Collateral Fund”). The Cash Collateral Fund is exempt from registration under Section 3(c)(7) of the 1940 Act and is managed by Wells Fargo Funds Management LLC (“Funds Management”) and is sub-advised by Wells Capital Management Incorporated (“Wells Capital Management”). Funds Management receives an advisory fee starting at 0.05% and declining

32 Wells Fargo Advantage VT Index Asset Allocation Fund Notes to Financial Statements

to 0.01% as the average daily net assets of the Cash Collateral Fund increase. All of the fees received by Funds Management are paid to Wells Capital Management for its services as sub-adviser. The Cash Collateral Fund seeks to provide a positive return compared to the daily Fed Funds Open rate by investing in high-quality, U.S. dollar-denominated short-term money market instruments. Cash Collateral Fund investments are fair valued based upon the amortized cost valuation technique. Income earned from investment in the Cash Collateral Fund is included in securities lending income on the Statement of Operations.

For Wells Fargo Advantage Funds that participated in securities lending activity prior to February 13, 2009, certain structured investment vehicles purchased in a joint account by the former securities lending agent defaulted or were impaired. Certain of the Wells Fargo Advantage Funds still hold ownership interest in these structured investment vehicles, which have since been restructured as pass-through securities. If the Fund holds an ownership interest in such pass-through securities, information regarding this ownership interest can be found in the Portfolio of Investments under the category “Other”.

Futures contracts

The Fund may be subject to interest rate risk and equity price risk in the normal course of pursuing its investment objectives. The Fund may buy and sell futures contracts in order to gain exposure to, or protect against changes in, security values and interest rates. The primary risks associated with the use of futures contracts are the imperfect correlation between changes in market values of securities held by the Fund and the prices of futures contracts, and the possibility of an illiquid market.

Futures contracts are valued based upon their quoted daily settlement prices when available. The aggregate principal amounts of the contracts are not recorded in the financial statements. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset or liability and in the Statement of Operations as unrealized gains or losses until the contracts are closed, at which point they are recorded as net realized gains or losses on futures contracts. With futures contracts, there is minimal counterparty risk to the Fund since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default.

Security transactions and income recognition

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

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily based on the effective interest method. To the extent debt obligations are placed on non-accrual status, any related interest income may be reduced by writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Dividend income is recognized on the ex-dividend date.

Distributions to shareholders

Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-dividend date. Such distributions are determined in conformity with income tax regulations, which may differ from generally accepted accounting principles.

The timing and character of distributions made during the period from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. To the extent that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment. Temporary differences do not require reclassifications. The primary permanent differences causing such reclassifications are due to recognition of partnership income and dividends from certain securities. At December 31, 2011, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statement of Assets and Liabilities:

Paid-in Capital			Overdistributed Net Investment Income		Accumulated Net Realized Losses on Investments
$	(1,134,474	)	$	1,155,729	$	(21,255	)

Notes to Financial Statements Wells Fargo Advantage VT Index Asset Allocation Fund 33

Federal and other taxes

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

The 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.

Under the recently enacted Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years which began after December 22, 2010 for an unlimited period. However, any losses incurred are required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

As of December 31, 2011, the Fund had net capital loss carryforwards, which are available to offset future net realized capital gains, in the amount of $23,800,005 with $20,075,438 expiring in 2016 and $3,724,567 expiring in 2017.

3. FAIR VALUATION MEASUREMENTS

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the 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 significant 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:

n Level 1 – quoted prices in active markets for identical securities

n Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

n Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

As of December 31, 2011, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:

Investments in Securities	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity securities
Common stocks	$	50,927,905	$	26	$	0	$	50,927,931
Preferred stocks		0		26		0		26
U.S. Treasury securities		32,383,333		0		0		32,383,333
Other		0		0		583,697		583,697
Short-term investments
Investment companies		3,329,088		9,730,579		0		13,059,667
U.S. Treasury securities		2,319,869		0		0		2,319,869
	$	88,960,195	$	9,730,631	$	583,697	$	99,274,523

Further details on the major security types listed above can be found in the Portfolio of Investments.

34 Wells Fargo Advantage VT Index Asset Allocation Fund Notes to Financial Statements

As of December 31, 2011, the inputs used in valuing the Fund’s other financial instruments, which are carried at fair value, were as follows:

Other financial instruments	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Futures contracts+	$	488,970	$	0	$	0	$	488,970

+ Futures contracts are presented at the unrealized gains or losses on the instrument.

Transfers in and transfers out are recognized at the end of the reporting period. For the year ended December 31, 2011, the Fund did not have any significant transfers into/out of Level 1 and Level 2.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Other
Balance as of December 31, 2010	$	967,562
Accrued discounts (premiums)		0
Realized gains (losses)		0
Change in unrealized gains (losses)		(31,477	)
Purchases		0
Sales		(352,388	)
Transfers into Level 3		0
Transfers out of Level 3		0
Balance as of December 31, 2011	$	583,697
Change in unrealized gains (losses) relating to securities still held at December 31, 2011	$	(193,364	)

4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES

Advisory fee

The Trust has entered into an advisory contract with Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”). The adviser is responsible for implementing investment policies and guidelines and for supervising the sub-adviser, who is responsible for day-to-day portfolio management of the Fund.

Pursuant to the contract, Funds Management is entitled to receive an annual advisory fee starting at 0.55% and declining to 0.40% as the average daily net assets of the Fund increase. For the year ended December 31, 2011, the advisory fee was equivalent to an annual rate of 0.55% of the Fund’s average daily net assets.

Funds Management may retain the services of certain sub-advisers to provide daily portfolio management to the Fund. The fees related to sub-advisory services are borne directly by Funds Management and do not increase the overall fees paid by the Fund. Wells Capital Management, an affiliate of Funds Management, is the sub-adviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.15% and declining to 0.10% as the average daily net assets of the Fund increase.

Administration and transfer agent fees

The Trust has entered into an administration agreement with Funds Management. Under this agreement, for providing administrative services, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers, Funds Management is entitled to receive from the Fund an annual fund level administration fee starting at 0.05% and declining to 0.03% as the average daily net assets of the Fund increase and for Class 2 shares a class level administration fee of 0.08% of its average daily net assets.

Funds Management has contractually waived and/or reimbursed advisory and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. Waiver of fees and/or reimbursement of expenses by Funds Management were made first from fund level expenses on a proportionate basis and then from class specific expenses.

Notes to Financial Statements Wells Fargo Advantage VT Index Asset Allocation Fund 35

Distribution fees

The Trust has adopted a Distribution Plan for Class 2 shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are charged to Class 2 shares and paid to Wells Fargo Funds Distributor, LLC, the principal underwriter, at an annual rate of 0.25% of its average daily net assets.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding short-term securities (securities with maturities of one year or less at purchase date), for the year ended December 31, 2011 were as follows:

Purchases at Cost			Sales Proceeds
U.S. Government	Non-U.S. Government		U.S. Government		Non-U.S. Government
$10,490,999	$	5,126,236	$	7,460,472	$	31,415,700

6. DERIVATIVE TRANSACTIONS

During the year ended December 31, 2011, the Fund entered into futures contracts to gain market exposure to certain asset classes consistent with an active asset allocative strategy.

At December 31, 2011, the Fund had long and short futures contracts outstanding as follows:

Expiration Date	Contracts	Type	Contract Value at December 31, 2011		Net Unrealized Gains (Losses)
March 2012	3 Long	30-Year U.S. Treasury Bonds	$	434,438	$	1,562
March 2012	149 Short	30-Year U.S. Treasury Bonds		21,577,063		52,383
March 2012	78 Long	S&P 500 Index		24,425,700		435,025

The Fund had average contract amounts of $25,647,588 and $23,749,685 in long and short futures contracts, respectively, during the year ended December 31, 2011.

A summary of derivative instruments by primary risk exposure is outlined in the following tables.

The fair value of derivative instruments as of December 31, 2011 was as follows for the Fund:

	Asset Derivatives
	Balance Sheet Location	Fair Value
Interest rate contracts	Net assets – Net unrealized gains on investments	$	53,945	*
Equity contracts	Net assets – Net unrealized gains on investments		435,025	*
		$	488,970

* Amount represents cumulative unrealized gains (losses) on futures contracts. Only the variation margin as of December 31, 2011 is reported separately on the Statement of Assets and Liabilities.

The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2010 was as follows for the Fund:

	Amount of Realized Gains (Losses) on Derivatives			Change in Unrealized Gains (Losses) on Derivatives
Interest rate contracts	$	(3,966,239	)	$	(931,846	)
Equity contracts		540,565			(89,650	)
	$	(3,425,674	)	$	(1,021,496	)

36 Wells Fargo Advantage VT Index Asset Allocation Fund Notes to Financial Statements

7. BANK BORROWINGS

The Trust and Wells Fargo Funds Trust (excluding the money market funds) are parties to a $150,000,000 revolving credit agreement with State Street Bank and Trust Company, 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, under the credit agreement, the Fund pays an annual commitment fee equal to 0.10% of the unused balance, which is allocated pro rata. Prior to September 6, 2011, the revolving credit agreement was for $125,000,000 and the annual commitment fee paid by the Fund was 0.125% of the unused balance. For the year ended December 31, 2011, the Fund paid $195 in commitment fees.

For the year ended December 31, 2011, there were no borrowings by the Fund under the agreement.

8. DISTRIBUTIONS TO SHAREHOLDERS

The tax character of distributions paid was $2,862,036 and $1,839,244 of ordinary income for the years ended December 31, 2011 and December 31, 2010, respectively.

As of December 31, 2011, the components of distributable earnings on a tax basis were as follows:

Unrealized Gains	Capital Loss Carryforward
$5,847,308	$(23,800,005)

9. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and directors are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Trust may enter into contracts with service providers that contain a variety of indemnification clauses. The Trust’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.

10. NEW ACCOUNTING PRONOUNCEMENTS

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. ASU No. 2011-04 amends FASB ASC Topic 820, Fair Value Measurements and Disclosures, to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP. The ASU is effective prospectively for interim and annual periods beginning after December 15, 2011. Management expects that adoption of the ASU will result in additional disclosures in the financial statements, as applicable.

In April 2011, FASB issued ASU No. 2011-03 “Reconsideration of Effective Control for Repurchase Agreements”. ASU No. 2011-03 amends FASB ASC Topic 860, Transfers and Servicing, specifically the criteria required to determine whether a repurchase agreement (repo) and similar agreements should be accounted for as sales of financial assets or secured borrowings with commitments. ASU No. 2011-03 changes the assessment of effective control by focusing on the transferor’s contractual rights and obligations and removing the criterion to assess its ability to exercise those rights or honor those obligations. This could result in changes to the way entities account for certain transactions including repurchase agreements, mortgage dollar rolls and reverse repurchase agreements. The ASU will become effective on a prospective basis for new transfers and modifications to existing transactions as of the beginning of the first interim or annual period beginning on or after December 15, 2011. Management has evaluated the impact of adopting the ASU and expects no significant changes.

Report of Independent Registered Public Accounting Firm Wells Fargo Advantage VT Index Asset Allocation Fund 37

BOARD OF TRUSTEES AND SHAREHOLDERS OF WELLS FARGO VARIABLE TRUST:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the Wells Fargo Advantage VT Index Asset Allocation Fund (the “Fund”), one of the funds constituting the Wells Fargo Variable Trust, as of December 31, 2011, and the related statement of operations for the year then ended, statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2011, by correspondence with custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Wells Fargo Advantage VT Index Asset Allocation Fund as of December 31, 2011, the results of its operations for the year then ended, changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

February 24, 2012

38 Wells Fargo Advantage VT Index Asset Allocation Fund Other Information (Unaudited)

TAX INFORMATION

For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 38.69% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended December 31, 2011.

PROXY VOTING INFORMATION

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our Web site at www.wellsfargo.com/advantagefunds, or visiting the SEC Web site at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the Fund’s Web site at www.wellsfargo.com/advantagefunds or by visiting the SEC Web site at www.sec.gov.

PORTFOLIO HOLDINGS INFORMATION

The complete portfolio holdings for the Fund are publicly available on the Fund’s Web site (www.wellsfargo.com/advantagefunds) on a monthly, 30-day or more delayed basis. In addition, top ten holdings information for the Fund is publicly available on the Fund’s Web site on a monthly, seven-day or more delayed basis. The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q, which is available without charge by visiting the SEC Web site at www.sec.gov. In addition, the Fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and at regional offices in New York City, at 233 Broadway, and in Chicago, at 175 West Jackson Boulevard, Suite 900. Information about the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Other Information (Unaudited) Wells Fargo Advantage VT Index Asset Allocation Fund 39

BOARD OF TRUSTEES

The following table provides basic information about the Board of Trustees (the “Trustees”) of the Trust and Officers of the Trust. This table should be read in conjunction with the Prospectus and the Statement of Additional Information¹ of the Fund. Each of the Trustees and Officers listed below acts in identical capacities for the Wells Fargo Advantage family of funds, which consists of 138 funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). All of the Trustees are also Members of the Audit and Governance Committees of each Trust in the Fund Complex. The mailing address of each Trustee and Officer is 525 Market Street, 12th Floor, San Francisco, CA 94105. 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	Other Directorships During Past Five Years
Peter G. Gordon (Born 1942)	Trustee, since 1998; Chairman, since 2005 (Lead Trustee since 2001)	Co-Founder, Retired Chairman, President and CEO of Crystal Geyser Water Company. Trustee Emeritus, Colby College	Asset Allocation Trust
Isaiah Harris, Jr. (Born 1952)	Trustee, since 2009	Retired. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Mr. Harris is a certified public accountant.	CIGNA Corporation; Deluxe Corporation; Asset Allocation Trust
Judith M. Johnson (Born 1949)	Trustee, since 2008	Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.	Asset Allocation Trust
Leroy Keith, Jr. (Born 1939)	Trustee, since 2010	Chairman, Bloc Global Services (development and construction). Trustee of the Evergreen Funds from 1983 to 2010. Former Managing Director, Almanac Capital Management (commodities firm), former Partner, Stonington Partners, Inc. (private equity fund), former Director, Obagi Medical Products Co. and former Director, Lincoln Educational Services.	Trustee, Virtus Fund Complex (consisting of 40 portfolios as of 12/31/11); Asset Allocation Trust
David F. Larcker (Born 1950)	Trustee, since 2009	James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of Corporate Governance Research Program and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.	Asset Allocation Trust
Olivia S. Mitchell (Born 1953)	Trustee, since 2006	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.	Asset Allocation Trust

40 Wells Fargo Advantage VT Index Asset Allocation Fund Other Information (Unaudited)

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years	Other Directorships During Past Five Years
Timothy J. Penny (Born 1951)	Trustee, since 1996	President and CEO of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007 and Senior Fellow at the Humphrey Institute Policy Forum at the University of Minnesota since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.	Asset Allocation Trust
Michael S. Scofield (Born 1943)	Trustee, since 2010	Served on the Investment Company Institute’s Board of Governors and Executive Committee from 2008-2011 as well the Governing Council of the Independent Directors Council from 2006-2011 and the Independent Directors Council Executive Committee from 2008-2011. Chairman of the IDC from 2008-2010. Institutional Investor (Fund Directions) Trustee of Year in 2007. Trustee of the Evergreen Funds (and its predecessors) from 1984 to 2010. Chairman of the Evergreen Funds from 2000-2010. Former Trustee of the Mentor Funds. Retired Attorney, Law Offices of Michael S. Scofield and former Director and Chairman, Branded Media Corporation (multi-media branding company).	Asset Allocation Trust
Donald C. Willeke (Born 1940)	Trustee, since 1996	Principal of the law firm of Willeke & Daniels. General Counsel of the Minneapolis Employees Retirement Fund from 1984 until its consolidation into the Minnesota Public Employees Retirement Association on June 30, 2010. Director and Vice Chair of The Free Trust (non-profit corporation). Director of the American Chestnut Foundation (non-profit corporation).	Asset Allocation Trust

Officers

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years
Karla M. Rabusch (Born 1959)	President, since 2003	Executive Vice President of Wells Fargo Bank, N.A. and President of Wells Fargo Funds Management, LLC since 2003. Senior Vice President and Chief Administrative Officer of Wells Fargo Funds Management, LLC from 2001 to 2003.
C. David Messman (Born 1960)	Secretary, since 2000; Chief Legal Counsel, since 2003	Senior Vice President and Secretary of Wells Fargo Funds Management, LLC since 2001. Vice President and Managing Senior Counsel of Wells Fargo Bank, N.A. since 1996.
Kasey Phillips (Born 1970)	Treasurer, since 2009	Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2006 to 2010. Treasurer of the Evergreen Funds from 2005 to 2010.
David Berardi (Born 1975)	Assistant Treasurer, since 2009	Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Assistant Vice President of Evergreen Investment Services, Inc. from 2004 to 2008. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.
Jeremy DePalma (Born 1974)	Assistant Treasurer, since 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. Vice President, Evergreen Investment Services, Inc. from 2004 to 2007. Head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.
Debra Ann Early (Born 1964)	Chief Compliance Officer, since 2007	Chief Compliance Officer of Wells Fargo Funds Management, LLC since 2007. Chief Compliance Officer of Parnassus Investments from 2005 to 2007. Chief Financial Officer of Parnassus Investments from 2004 to 2007 and Senior Audit Manager of PricewaterhouseCoopers LLP from 1998 to 2004.

1. 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 Web site at www.wellsfargo.com/advantagefunds.

List of Abbreviations Wells Fargo Advantage VT Index Asset Allocation Fund 41

The following is a list of common abbreviations for terms and entities which may have appeared in this report.

ACB —  Agricultural Credit Bank

ADR —  American Depository Receipt

ADS —  American Depository Shares

AGC-ICC —  Assured Guaranty Corporation - Insured Custody Certificates

AGM —  Assured Guaranty Municipal

AMBAC —  American Municipal Bond Assurance Corporation

AMT —  Alternative Minimum Tax

AUD —  Australian Dollar

BAN —  Bond Anticipation Notes

BHAC —  Berkshire Hathaway Assurance Corporation

BRL —  Brazil Real

CAB —  Capital Appreciation Bond

CAD —  Canadian Dollar

CCAB —  Convertible Capital Appreciation Bond

CDA —  Community Development Authority

CDO —  Collateralized Debt Obligation

CHF —  Swiss Franc

COP —  Certificate of Participation

CR —  Custody Receipts

DKK —  Danish Krone

DRIVER —  Derivative Inverse Tax-Exempt Receipts

DW&P —  Department of Water & Power

DWR —  Department of Water Resources

ECFA —  Educational & Cultural Facilities Authority

EDA —  Economic Development Authority

EDFA —  Economic Development Finance Authority

ETF —  Exchange-Traded Fund

EUR —  Euro

FFCB —  Federal Farm Credit Bank

FGIC —  Financial Guaranty Insurance Corporation

FHA —  Federal Housing Authority

FHLB —  Federal Home Loan Bank

FHLMC —  Federal Home Loan Mortgage Corporation

FNMA —  Federal National Mortgage Association

FSA —  Farm Service Agency

GBP —  Great British Pound

GDR —  Global Depository Receipt

GNMA —  Government National Mortgage Association

GO —  General Obligation

HCFR —  Healthcare Facilities Revenue

HEFA —  Health & Educational Facilities Authority

HEFAR —  Higher Education Facilities Authority Revenue

HFA —  Housing Finance Authority

HFFA —  Health Facilities Financing Authority

HKD —  Hong Kong Dollar

HUF —  Hungarian Forint

IBC —  Insured Bond Certificate

IDA —  Industrial Development Authority

IDAG —  Industrial Development Agency

IDR —  Industrial Development Revenue

IEP —  Irish Pound

JPY —  Japanese Yen

KRW —  Republic of Korea Won

LIBOR —  London Interbank Offered Rate

LLC —  Limited Liability Company

LLP —  Limited Liability Partnership

LOC —  Letter of Credit

LP —  Limited Partnership

MBIA —  Municipal Bond Insurance Association

MFHR —  Multi-Family Housing Revenue

MTN —  Medium Term Note

MUD —  Municipal Utility District

MXN —  Mexican Peso

MYR —  Malaysian Ringgit

NATL-RE —  National Public Finance Guarantee Corporation

NOK —  Norwegian Krone

NZD —  New Zealand Dollar

PCFA —  Pollution Control Finance Authority

PCR —  Pollution Control Revenue

PFA —  Public Finance Authority

PFFA —  Public Facilities Financing Authority

PFOTER —  Puttable Floating Option Tax-Exempt Receipts

plc —  Public Limited Company

PLN —  Polish Zloty

PUTTER —  Puttable Tax-Exempt Receipts

R&D —  Research & Development

RDA —  Redevelopment Authority

RDFA —  Redevelopment Finance Authority

REIT —  Real Estate Investment Trust

ROC —  Reset Option Certificates

SAVRS —  Select Auction Variable Rate Securities

SBA —  Small Business Authority

SEK —  Swedish Krona

SFHR —  Single Family Housing Revenue

SFMR —  Single Family Mortgage Revenue

SGD —  Singapore Dollar

SKK —  Slovakian Koruna

SPDR —  Standard & Poor’s Depositary Receipts

TAN —  Tax Anticipation Notes

TBA —  To Be Announced

TIPS —  Treasury Inflation-Protected Securities

TRAN —  Tax Revenue Anticipation Notes

TCR —  Transferable Custody Receipts

TRY —  Turkish Lira

TTFA —  Transportation Trust Fund Authority

TVA —  Tennessee Valley Authority

XLCA —  XL Capital Assurance

ZAR —  South African Rand

This page is intentionally left blank.

FOR MORE INFORMATION

More information about Wells Fargo Advantage Funds is available free upon request. To obtain literature, please write, e-mail, visit the Fund’s Web site, or call:

Wells Fargo Advantage Funds

P.O. Box 8266

Boston, MA 02266-8266

E-mail: wfaf@wellsfargo.com

Web site: www.wellsfargo.com/advantagefunds

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

This report and the financial statements contained herein are submitted for the general information of the shareholders of Wells Fargo Advantage Funds. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. For a prospectus containing more complete information, including charges and expenses, call 1-800-222-8222 or visit the Fund’s Web site at www.wellsfargo.com/advantagefunds. Please consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. This and other information about Wells Fargo Advantage Funds can be found in the current prospectus. Read the prospectus carefully before you invest or send money.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

© 2012 Wells Fargo Funds Management, LLC. All rights reserved.

207572 02-12

AVT2/AR148 12-11

Wells Fargo Advantage

VT International Equity Fund

Annual Report

December 31, 2011

Reduce clutter. Save trees.

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

Contents

Letter to Shareholders	2
Performance Highlights	5
Fund Expenses	9
Portfolio of Investments	10
Financial Statements
Statement of Assets and Liabilities	14
Statement of Operations	15
Statements of Changes in Net Assets	16
Financial Highlights	17
Notes to Financial Statements	19
Report of Independent Registered Public Accounting Firm	26
Other Information	27
List of Abbreviations	30

The views expressed and any forward-looking statements are as of December 31, 2011, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Funds Management, LLC. Discussions of individual securities, or the markets generally, or any Wells Fargo Advantage Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements; the views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Funds Management, LLC, disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

WELLS FARGO INVESTMENT HISTORY

1932	Keystone creates one of the first mutual fund families.
1971	Wells Fargo & Company introduces one of the first institutional index funds.
1978	Wells Fargo applies Markowitz and Sharpe’s research on Modern Portfolio Theory to introduce one of the industry’s first Tactical Asset Allocation (TAA) models in institutional separately managed accounts.
1984	Wells Fargo Stagecoach Funds launches its first asset allocation fund.
1989	The Tactical Asset Allocation (TAA) Model is first applied to Wells Fargo’s asset allocation mutual funds.
1994	Wells Fargo introduces the LifePath Funds, one of the first suites of target date funds (now the Wells Fargo Advantage Dow Jones Target Date FundsSM ).
1996	Evergreen Investments and Keystone Funds merge.
1997	Wells Fargo launches Wells Fargo Advantage WealthBuilder PortfoliosSM, a fund-of-funds suite of products that includes the use of quantitative models to shift assets among investment styles.
1999	Norwest Advantage Funds and Stagecoach Funds are reorganized into Wells Fargo Funds after the merger of Norwest and Wells Fargo.
2002	Evergreen Retail and Evergreen Institutional companies form the umbrella asset management company, Evergreen Investments.
2005	The integration of Strong Funds with Wells Fargo Funds creates Wells Fargo Advantage Funds, resulting in one of the top 20 mutual fund companies in the United States.
2006	Wells Fargo Advantage Funds relaunches the target date product line as Wells Fargo Advantage Dow Jones Target Date Funds.
2010	The mergers and reorganizations of Evergreen and Wells Fargo Advantage mutual funds are completed, unifying the families under the brand of Wells Fargo Advantage Funds.

Wells Fargo Advantage Funds^®

Wells Fargo Advantage Funds skillfully guides institutions, financial advisors, and individuals through the investment terrain to help them reach their financial objectives. Everything we do on behalf of investors is backed by our unique combination of qualifications.

Strength

Our organization is built on the standards of integrity and service established by our parent company—Wells Fargo & Company—more than 150 years ago. And, because we’re part of a highly diversified financial enterprise, we offer the depth of resources to help investors succeed.

Expertise

Our multi-boutique model offers investors access to the independent thinking of premier investment managers that have been chosen for their time-tested strategies. While each team specializes in a specific investment strategy, collectively they provide investors a wide choice of distinct investment styles. Our dedication to investment excellence doesn’t end with our expertise in manager selection—risk management, analysis, and rigorous ongoing review seek to ensure each manager’s investment process remains consistent.

Partnership

Our collaborative approach is built around understanding the needs and goals of our clients. By adhering to core principles of sound judgment and steady guidance, we support you through every stage of the investment decision process.

Carefully consider a fund’s investment objectives, risks, charges, and expenses before investing. For a current prospectus and, if available, a summary prospectus, containing this and other information, visit wellsfargo.com/advantagefunds. Read it carefully before investing.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds^®. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

“Dow Jones^®” and “Dow Jones Target Date Indexes^SM” are service marks of Dow Jones Trademark Holdings, LLC (“Dow Jones”), have been licensed to CME Group Index Services LLC (“CME Indexes”) and have been sublicensed for use for certain purposes by Global Index Advisors, Inc, and Wells Fargo Funds Management, LLC. The Wells Fargo Advantage Dow Jones Target Date Funds^SM based on the Dow Jones Target Date Indexes^SM, are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes or their respective affiliates and none of them makes any representation regarding the advisability of investing in such product(s).

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

Not part of the annual report.

Wells Fargo Advantage Funds offers more than 110 mutual funds across a wide range of asset classes, representing over $216 billion in assets under management, as of December 31, 2011.

Equity Funds
Asia Pacific Fund	Global Opportunities Fund	Premier Large Company Growth Fund
C&B Large Cap Value Fund	Growth Fund	Small Cap Opportunities Fund
C&B Mid Cap Value Fund	Health Care Fund	Small Cap Value Fund
Capital Growth Fund	Index Fund	Small Company Growth Fund
Common Stock Fund	International Equity Fund	Small Company Value Fund
Disciplined U.S. Core Fund	International Value Fund	Small/Mid Cap Core Fund
Discovery Fund†	Intrinsic Small Cap Value Fund	Small/Mid Cap Value Fund
Diversified Equity Fund	Intrinsic Value Fund	Social Sustainability Fund†
Diversified International Fund	Intrinsic World Equity Fund	Special Mid Cap Value Fund
Diversified Small Cap Fund	Large Cap Core Fund	Special Small Cap Value Fund
Emerging Growth Fund	Large Cap Growth Fund	Specialized Technology Fund
Emerging Markets Equity Fund	Large Company Value Fund	Strategic Large Cap Growth Fund
Endeavor Select Fund†	Omega Growth Fund	Traditional Small Cap Growth Fund
Enterprise Fund†	Opportunity Fund†	Utility and Telecommunications Fund
Equity Value Fund	Precious Metals Fund
Bond Funds
Adjustable Rate Government Fund	Inflation-Protected Bond Fund	Short-Term Bond Fund
California Limited-Term Tax-Free Fund	Intermediate Tax/AMT-Free Fund	Short-Term High Yield Bond Fund
California Tax-Free Fund	International Bond Fund	Short-Term Municipal Bond Fund
Colorado Tax-Free Fund	Minnesota Tax-Free Fund	Strategic Municipal Bond Fund
Government Securities Fund	Municipal Bond Fund	Total Return Bond Fund
High Income Fund	North Carolina Tax-Free Fund	Ultra Short-Term Income Fund
High Yield Bond Fund	Pennsylvania Tax-Free Fund	Ultra Short-Term Municipal Income Fund
Income Plus Fund	Short Duration Government Bond Fund	Wisconsin Tax-Free Fund
Asset Allocation Funds
Asset Allocation Fund	WealthBuilder Equity Portfolio†	Target 2020 Fund†
Conservative Allocation Fund	WealthBuilder Growth Allocation Portfolio†	Target 2025 Fund†
Diversified Capital Builder Fund	WealthBuilder Growth Balanced Portfolio†	Target 2030 Fund†
Diversified Income Builder Fund	WealthBuilder Moderate Balanced Portfolio†	Target 2035 Fund†
Growth Balanced Fund	WealthBuilder Tactical Equity Portfolio†	Target 2040 Fund†
Index Asset Allocation Fund	Target Today Fund†	Target 2045 Fund†
Moderate Balanced Fund	Target 2010 Fund†	Target 2050 Fund†
WealthBuilder Conservative Allocation Portfolio†	Target 2015 Fund†	Target 2055 Fund†
Money Market Funds
100% Treasury Money Market Fund	Heritage Money Market Fund†	National Tax-Free Money Market Fund
California Municipal Money Market Fund	Money Market Fund	Prime Investment Money Market Fund
Cash Investment Money Market Fund	Municipal Cash Management Money Market Fund	Treasury Plus Money Market Fund
Government Money Market Fund	Municipal Money Market Fund
Variable Trust Funds1
VT Discovery Fund†	VT Intrinsic Value Fund	VT Small Cap Growth Fund
VT Index Asset Allocation Fund	VT Omega Growth Fund	VT Small Cap Value Fund
VT International Equity Fund	VT Opportunity Fund†	VT Total Return Bond Fund

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Wells Fargo Advantage Money Market Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.

1. The Variable Trust Funds are generally available only through insurance company variable contracts.

† In this report, the Wells Fargo Advantage Discovery Fund^SM, Wells Fargo Advantage Endeavor Select Fund^SM, Wells Fargo Advantage Enterprise Fund^SM, Wells Fargo Advantage Opportunity Fund^SM, Wells Fargo Advantage Social Sustainability Fund^SM, Wells Fargo Advantage WealthBuilder Conservative Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Equity Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Moderate Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Tactical Equity Portfolio^SM, Wells Fargo Advantage Dow Jones Target Today Fund^SM, Wells Fargo Advantage Dow Jones Target 2010 Fund^SM, Wells Fargo Advantage Dow Jones Target 2015 Fund^SM, Wells Fargo Advantage Dow Jones Target 2020 Fund^SM, Wells Fargo Advantage Dow Jones Target 2025 Fund^SM, Wells Fargo Advantage Dow Jones Target 2030 Fund^SM, Wells Fargo Advantage Dow Jones Target 2035 Fund^SM, Wells Fargo Advantage Dow Jones Target 2040 Fund^SM, Wells Fargo Advantage Dow Jones Target 2045 Fund^SM, Wells Fargo Advantage Dow Jones Target 2050 Fund^SM, Wells Fargo Advantage Dow Jones Target 2055 Fund^SM, Wells Fargo Advantage Heritage Money Market Fund^SM, Wells Fargo Advantage VT Discovery Fund^SM, and Wells Fargo Advantage VT Opportunity Fund^SM are referred to as the Discovery Fund, Endeavor Select Fund, Enterprise Fund, Opportunity Fund, Social Sustainability Fund, WealthBuilder Conservative Allocation Portfolio, WealthBuilder Equity Portfolio, WealthBuilder Growth Allocation Portfolio, WealthBuilder Growth Balanced Portfolio, WealthBuilder Moderate Balanced Portfolio, WealthBuilder Tactical Equity Portfolio, Target Today Fund, Target 2010 Fund, Target 2015 Fund, Target 2020 Fund, Target 2025 Fund, Target 2030 Fund, Target 2035 Fund, Target 2040 Fund, Target 2045 Fund, Target 2050 Fund, Target 2055 Fund, Heritage Money Market Fund, VT Discovery Fund, and VT Opportunity Fund, respectively.

Not part of the annual report.

2 Wells Fargo Advantage VT International Equity Fund Letter to Shareholders

Karla M. Rabusch,

President

Wells Fargo Advantage Funds

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

Dear Valued Shareholder:

We’re pleased to offer you this annual report for the Wells Fargo Advantage VT International Equity Fund for the 12-month period that ended December 31, 2011.

For the full 12-month period, most of the major domestic equity indexes posted either modest gains or relatively mild losses. However, the market’s 12-month return figures mask the uneven path that it traced throughout the year as investors had to contend with a variety of global and domestic headwinds. Whatever the future holds, we continue to believe that most investors can benefit from adhering to a well-diversified investment strategy. Over the long-term, such a strategy may allow you to balance risks and opportunities as you pursue your financial goals in a dynamic market landscape.

The economic recovery gained traction as the year progressed.

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

2011 opened on a note of mounting optimism regarding the strength of the recovery, yet a batch of disappointing economic data in the spring and summer cast renewed doubts on the sustainability of the recovery. In September, it was reported that U.S. gross domestic product (GDP) grew at a mere 1.3% annual rate in the second quarter of 2011, following anemic growth at an annual rate of 0.4% in the first quarter. According to the December estimate, GDP growth accelerated to an annual rate of 1.8% in the third quarter, reigniting hopes for a sustainable recovery. Those hopes were buoyed by widespread anticipation of even stronger GDP growth in the fourth quarter. By the end of the 12-month period, few economists believed that the U.S. economy was in danger of sliding back into recession, although many expected a sluggish growth environment in 2012.

The struggling housing and labor markets slowed growth.

As has been the case throughout the recovery, the housing and labor markets continued to restrain economic momentum during 2011.

The beleaguered housing market has arguably exerted the biggest drag on growth. Despite intermittent signs of improvement, ongoing weakness in sales of both new and existing homes has put considerable downward pressure on prices. On the other hand, the labor market took a decided turn for the better in the latter half of the year: initial unemployment claims have eased in recent months, and the private sector has been steadily adding jobs. The pace of hiring, while not brisk, was sufficient to push the U.S. unemployment rate down to 8.5% as of December 2011—still well above its historical average, but at its lowest level since February 2009. Many observers expect the unemployment rate to decline further in 2012, which could act as a tailwind for consumer spending—widely viewed as one of the keys to long-term economic growth.

The Federal Reserve announced that it will keep rates low until 2013.

Consumers have already demonstrated some resilience in their spending—even in the face of higher energy costs. Oil prices skyrocketed in early 2011 before retreating later in the year, only to spike again during the fourth quarter. Yet

Letter to Shareholders Wells Fargo Advantage VT International Equity Fund 3

“core” inflation, which excludes volatile energy and food prices, remained fairly benign throughout the year.

With inflation in check, the Federal Reserve (Fed) held its target range for the federal funds rate—a proxy for short-term interest rates—steady at 0% to 0.25%. Following its August 9 meeting, the Federal Open Market Committee (FOMC) issued a statement explaining that economic conditions were likely to warrant exceptionally low levels for the federal funds rate through at least mid-2013. In addition, the Fed carried out its second round of quantitative easing (QE2) in an effort to promote a more robust economic expansion. The stimulus program was completed as scheduled in June 2011. In September, the Fed launched yet another stimulus program—dubbed “Operation Twist”—that is designed to keep intermediate- and longer-term yields relatively low. The goal with keeping longer-term rates low is to encourage lending activity to spark business investments and home purchases, which, in turn, may provide support for a more sustainable economic recovery.

Market volatility was a dominant theme throughout most of 2011.

Despite pockets of turbulence sparked by the natural disasters in Japan and geopolitical turmoil in North Africa and the Middle East, the U.S. equity market performed very well from January through April of 2011. Some upbeat economic news, better-than-expected corporate profits, and investor enthusiasm about QE2 were among the catalysts for the market’s four-month advance.

In May and June, the market climate shifted to one of anxiety over the increasingly fragile state of the U.S. and global economies. As spring gave way to summer, investors not only worried that the U.S. might be on the brink of recession, they also feared that Europe’s sovereign debt problems could spiral out of control if a Greek default triggered financial contagion across the continent. In July and August, investor sentiment was further undermined by partisan wrangling over the federal debt ceiling and the Standard & Poor’s downgrade of the U.S. credit rating. The barrage of unsettling headlines led to heightened market volatility and sharply falling stock prices in the third quarter of 2011. Although volatility persisted into the fourth quarter, the market was able to rebound amid improved economic data and hopes for a resolution to the European crisis.

For the full 12-month period, the S&P 500 Index¹ of large-cap stocks achieved a total return of 2.1%. The Russell Midcap^® Index² and the Russell 2000^® Index³ of small-cap stocks lost 1.6% and 4.2%, respectively. International stocks fared worse than their U.S. counterparts, with the MSCI EAFE Index⁴ shedding 14.8%.

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 Russell Midcap^® Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 25% of the total market capitalization of the Russell 1000^® Index. You cannot invest directly in an index.

3. The Russell 2000^® Index measures the performance of the 2,000 smallest companies in the Russell 3000^® Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index. You cannot invest directly in an index.

4. The Morgan Stanley Capital International Europe, Australasia, and Far East (“MSCI EAFE”) Stock Index is an unmanaged group of securities widely regarded by investors to be representations of the stock markets of Europe, Australasia, and the Far East. You cannot invest directly in an index. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

4 Wells Fargo Advantage VT International Equity Fund Letter to Shareholders

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors.

Recent events have not altered our message to shareholders.

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors. Bear in mind that many investors who indiscriminately sold their equity investments during the severe market downturn of 2008 to 2009 missed out on the impressive two-year rally that followed. In our opinion, the lesson to be learned from these dramatic market events is that, for many investors, simply building and maintaining a well-diversified⁵ investment plan is the best long-term strategy.

To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Advantage Funds offers more than 110 mutual funds and other investments spanning a broad range of asset classes and investment styles. While 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.

Thank you for choosing to invest with Wells Fargo Advantage Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs. For current information about your fund investments, contact your investment professional, visit our website at www.wellsfargo.com/advantagefunds, or call us directly at 1-800-222-8222. We are available 24 hours a day, 7 days a week.

Sincerely,

Karla M. Rabusch

President

Wells Fargo Advantage Funds

Notice to Shareholders

Effective March 1, 2012, the Fund’s permitted investment limit in emerging market equity securities changed from 20% of the Fund’s total assets to 30%.

5. Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses.

Performance Highlights (Unaudited) Wells Fargo Advantage VT International Equity Fund 5

INVESTMENT OBJECTIVE

The Fund seeks long-term capital appreciation.

ADVISER

Wells Fargo Funds Management, LLC

SUB-ADVISER

Wells Capital Management Incorporated

PORTFOLIO MANAGERS

Francis X. Claró, CFA²

Jeffrey Everett, CFA²

Dale A. Winner, CFA²

FUND INCEPTION

August 17, 1998

12 MONTH TOTAL RETURN AS OF DECEMBER 31, 2011
Class 2	(12.91)%
MSCI EAFE Free Index (Net)1	(12.14)%

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

The Adviser has committed through July 18, 2013 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain other expenses at 0.94% for Class 2. The Fund’s gross and net expense ratios are 1.27% and 0.95%, respectively, for Class 2 shares. Without these reductions, the Fund’s returns would have been lower.

1. The Morgan Stanley Capital International Europe, Australasia, and Far East (“MSCI EAFE Free”) Free Index (Net) is an unmanaged group of securities widely regarded by investors to be representative of the stock markets of Europe, Australasia, and the Far East. MSCI Free Indexes (Net) are constructed to reflect investment opportunities for global investors to account for local market restrictions on stock ownership by international investors. You cannot invest directly in an index. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed, or produced by MSCI.

2. Effective March 1, 2012, Jeffrey Everett and Dale Winner replaced Francis Claró as Portfolio Managers of the Fund.

3. The chart compares the performance of the Wells Fargo Advantage VT International Equity Fund Class 2 for the most recent ten years of the Fund with the MSCI EAFE Free Index (Net). The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

6 Wells Fargo Advantage VT International Equity Fund Performance Highlights (Unaudited)

MANAGER’S DISCUSSION

Fund highlights

n The Fund lagged its benchmark, the MSCI EAFE Free Index (Net), for the 12-month period that ended December 31, 2011, largely due to positions within the industrials, consumer staples, and materials sectors.

n Our bottom-up focus on stock selection resulted in overweights to the consumer discretionary and information technology (IT) sectors at the expense of allocations to financials and utilities. In total, our sector positioning aided relative performance.

n Individual stock and sector positionings were reflected in geographic overweights to emerging markets and Canada and underweights to Japan and Asia excluding Japan. We saw positive performance within emerging markets, while holdings in Canada detracted.

TEN LARGEST EQUITY HOLDINGS4 (AS OF DECEMBER 31, 2011)
Vodafone Group plc	2.61%
Nestle SA	2.34%
Toyota Motor Corporation	2.27%
Royal Dutch Shell plc Class A	2.22%
Roche Holdings AG	1.98%
Repsol YPF SA	1.93%
Novartis AG	1.89%
Fresenius SE & Company KGaA	1.80%
Diageo plc	1.79%
Shanghai Electric Group Company Limited	1.72%

2011 proved to be a difficult year for international equity markets.

The MSCI EAFE Free Index (Net) returned -12.14% during the period as sovereign debt concerns in Europe dominated much of the year. European bank stocks led the decline, reflecting their direct exposure to such countries as Greece and Portugal as well as higher funding costs and concerns about the need to meet tough new capital requirements. In the face of a hesitant response from European policymakers, sovereign bond yields soared and bank funding became increasingly difficult. Most asset classes displayed exceptional volatility, including stocks, bonds, and currencies. Reflecting these uncertainties, global economic growth slowed and earnings projections were revised downward. In addition, within the Asia Pacific region, Japan was hit by the effects of the tsunami early in the year, while policy tightening and slower export growth dampened Chinese economic prospects.

Macroeconomic factors largely affected the portfolio during the period, particularly exposure to cyclical businesses such as professional staffing firms. The Fund’s cash position, which averaged 5.6% of assets, was the strongest contributor to relative performance. In terms of sector exposures, the portfolio benefited from IT, utilities, and telecommunication services holdings. Specifically, stock performance within IT and telecommunication services more than offset the negative effects of overweighting the first sector and underweighting the second. We had only one position within the utilities sector, German-based E.ON AG; the Fund benefited from our underweight to the sector, which underperformed.

Detractors during the period included holdings within the industrials, consumer staples, and materials sectors. Within industrials, professional staffing companies sold off due to fears that a European recession would lead to reduced demand for staffing, a major detractor that was partially offset by a position in U.K. equipment rental company Ashtead Group plc. Within consumer staples, positions in brewer Carlsberg Breweries A/S and food retailer Metro AG detracted, while exposure to mining stocks led to underperformance within materials as commodities prices softened during the latter half of the year.

4. The ten largest equity holdings are calculated based on the value of the securities divided by total net assets of the Fund. Holdings are subject to change and may have changed since the date specified.

Performance Highlights (Unaudited) Wells Fargo Advantage VT International Equity Fund 7

On a geographic basis, we saw positive performance within emerging markets, particularly China and South Korea. Europe also contributed, as our positions within France and Spain boosted returns within the region. Holdings within the U.K. and Canada detracted.

SECTOR DISTRIBUTION⁵

(AS OF DECEMBER 31, 2011)

Moving into 2012, markets remain unsettled.

The new year is likely to prove critical in determining the outcome of many of the risk factors that markets grappled with during 2011. Outcomes related to the viability of the eurozone, the sustainability of Chinese growth rates, and the political direction of the U.S. will all affect investor confidence in 2012. The year is also beginning with generally weaker global economic growth, particularly in Europe, and continued fears in both bond and equity markets. Financials continue to deleverage globally and are suffering from high funding costs, a lack of sources for capital, a challenging operating environment, and a harsh regulatory environment. The situation within the financials sector is another hurdle to spurring global economic growth. On the positive side, the European Central Bank’s injection of $600 billion in three-year loans has helped increase liquidity within the eurozone’s banking system.

We believe that equities are inexpensive relative to virtually any other investment and fairly inexpensive relative to their own history. In our view, investors are demanding too high of a risk premium to own stocks in an environment of low borrowing costs, healthy balance sheets, lean corporate operations, and high profitability. We believe that most companies are in a good position to successfully overcome any upcoming challenges. If that happens, we could see a strong wave of capital expenditures, corporate hiring, and merger and acquisition activity. Such a scenario seems a long way off, as confidence has eroded in every area of the economy—from consumers to corporate management to investors. Historically, though, it has generally paid to buy equities when they were inexpensive and unpopular, and we are seeing attractive equity valuations across the globe, including in Europe and China. We hope that our discipline of buying stocks when they’re out of favor will ultimately bode well for the strategy’s returns, but in the near term, we believe that market turbulence is likely to persist.

5. Sector distribution is subject to change and is calculated based on the total long-term investments of the Fund.

8 Wells Fargo Advantage VT International Equity Fund Performance Highlights (Unaudited)

AVERAGE ANNUAL TOTAL RETURN⁶ (%) (AS OF DECEMBER 31, 2011)

														Expense Ratios7
	Inception Date		6 Months*			1 Year			5 Year			10 Year		Gross		Net8
Class 1		08/17/1998		(15.86	)		(12.79	)		(4.49	)		4.75		1.02%		0.70%
Class 2		07/31/2002		(15.98	)		(12.91	)		(4.73	)		4.51		1.27%		0.95%
MSCI EAFE Free Index (Net)1				(16.31	)		(12.14	)		(4.72	)		4.67

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

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. Foreign investments are especially volatile and can rise or fall dramatically due to differences in the political and economic conditions of the host country. These risks are generally intensified in emerging markets. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to active trading risk and smaller company securities risk. Consult the Fund’s prospectus for additional information on these and other risks.

Please refer to the prospectus provided by your participating insurance company for detailed information describing the separate accounts for information regarding surrender charges, mortality and expense risk fees and other charges that may be assessed by the participating insurance companies.

6. Performance shown for Class 2 shares prior to its inception reflects the performance of Class 1 shares, adjusted to reflect the higher expenses applicable to Class 2 shares. Historical performance shown for all classes of the Fund prior to July 19, 2010 is based on the performance of the fund’s predecessor, Evergreen VA International Equity Fund. Effective July 16, 2010, the Fund changed its name from Wells Fargo Advantage VT International Core Fund to Wells Fargo Advantage VT International Equity Fund.

7. Reflects the expense ratios as stated in the most recent prospectuses.

8. The Adviser has committed through July 18, 2013 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain expenses, at 0.69% for Class 1 and 0.94% for Class 2 shares. Without this cap, the Fund’s returns would have been lower.

Fund Expenses (Unaudited) Wells Fargo Advantage VT International Equity Fund 9

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution (12b-1) 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, 2011 to December 31, 2011.

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 separate account charges assessed by participating insurance companies. 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 separate account charges assessed by participating insurance companies were included, your costs would have been higher.

	Beginning Account Value 07-01-2011		Ending Account Value 12-31-2011		Expenses Paid During the Period¹		Net Annual Expense Ratio
Class 1
Actual	$	1,000.00	$	841.38	$	3.20		0.69	%
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.73	$	3.52		0.69	%
Class 2
Actual	$	1,000.00	$	840.16	$	4.36		0.94	%
Hypothetical (5% return before expenses)	$	1,000.00	$	1,020.47	$	4.79		0.94	%

1. Expenses paid is equal to the annualized 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).

10 Wells Fargo Advantage VT International Equity Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Common Stocks: 95.48%
Argentina: 0.86%
Irsa Inversiones y Representaciones SA ADR (Financials, Real Estate Management & Development)		156,020	$	1,617,927
YPF SA ADR (Energy, Oil, Gas & Consumable Fuels)		20,995		728,107
				2,346,034
Australia: 2.75%
AMP Limited (Financials, Insurance)		257,298		1,071,079
Commonwealth Bank of Australia (Financials, Commercial Banks)		51,759		2,605,663
Newcrest Mining Limited (Materials, Metals & Mining)		74,164		2,245,307
Westpac Banking Corporation (Financials, Commercial Banks)		78,249		1,600,662
				7,522,711
Belgium: 1.18%
Anheuser-Busch InBev NV (Consumer Staples, Beverages)		52,590		3,219,797
Canada: 4.52%
Brookfield Asset Management Incorporated (Financials, Real Estate Management & Development)		80,763		2,219,367
Canadian Natural Resources Limited (Energy, Oil, Gas & Consumable Fuels)		66,941		2,506,797
Goldcorp Incorporated (Materials, Metals & Mining)		51,236		2,273,747
Ivanhoe Mines Limited (Materials, Metals & Mining)†		64,400		1,143,554
Suncor Energy Incorporated (Energy, Oil, Gas & Consumable Fuels)		69,422		2,002,079
Teck Cominco Incorporated Limited (Materials, Metals & Mining)		62,867		2,216,004
				12,361,548
China: 5.30%
Baidu.com Incorporated ADR (Information Technology, Internet Software & Services)†		14,126		1,645,255
China Mobile Limited ADR (Telecommunication Services, Wireless Telecommunication Services)«		66,352		3,217,408
Shanghai Electric Group Company Limited (Industrials, Electrical Equipment)		10,188,000		4,709,258
SINA Corporation (Information Technology, Internet Software & Services)†«		33,045		1,718,340
Tencent Holdings Limited (Information Technology, Internet Software & Services)		63,900		1,284,319
ZTE Corporation (Telecommunication Services, Wireless Telecommunication Services)		619,600		1,942,582
				14,517,162
Denmark: 0.72%
Carlsberg A/S (Consumer Staples, Beverages)		28,037		1,977,084
France: 9.10%
BNP Paribas SA (Financials, Commercial Banks)		12,298		483,072
Compagnie de Saint-Gobain (Industrials, Building Products)		21,237		815,372
Groupe Danone (Consumer Staples, Food Products)		55,913		3,514,789
LVMH Moet Hennessy Louis Vuitton SA (Consumer Discretionary, Textiles, Apparel & Luxury Goods)		27,494		3,892,903
Pernod-Ricard (Consumer Staples, Beverages)		38,686		3,587,971
Pinault-Printempts-Redoute SA (Consumer Discretionary, Multiline Retail)		12,468		1,785,527
Publicis Groupe (Consumer Discretionary, Media)		31,940		1,469,372
Sanofi-Aventis SA (Health Care, Pharmaceuticals)		33,623		2,469,566
Technip SA (Energy, Energy Equipment & Services)		42,856		4,027,970
Total SA (Energy, Oil, Gas & Consumable Fuels)		55,921		2,858,843
				24,905,385

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT International Equity Fund 11

Security Name	Shares		Value
Germany: 7.60%
Adidas-Salomon AG (Consumer Discretionary, Textiles, Apparel & Luxury Goods)		25,408	$	1,652,766
Allianz AG (Financials, Insurance)		23,787		2,275,418
Bayer AG (Health Care, Pharmaceuticals)		57,652		3,686,037
Daimler AG (Consumer Discretionary, Automobiles)		31,040		1,362,686
E.ON AG (Utilities, Electric Utilities)		48,242		1,040,829
Fresenius SE & Company KGaA (Health Care, Health Care Equipment & Supplies)		53,206		4,922,248
Hochtief AG (Industrials, Construction & Engineering)		23,813		1,377,499
Muenchener Rueckversicherungs-Gesellschaft AG (Financials, Insurance)		13,075		1,603,898
SAP AG (Information Technology, Software)		40,412		2,136,588
Siemens AG (Industrials, Industrial Conglomerates)		7,880		754,091
				20,812,060
Israel: 1.12%
Check Point Software Technologies Limited (Information Technology, Software)†«		29,587		1,554,501
Teva Pharmaceutical Industries Limited ADR (Health Care, Pharmaceuticals)		37,535		1,514,913
				3,069,414
Italy: 0.94%
ENI SpA (Energy, Oil, Gas & Consumable Fuels)		123,756		2,564,342
Japan: 10.75%
Canon Incorporated (Information Technology, Office Electronics)		58,400		2,587,294
Isuzu Motors Limited (Consumer Discretionary, Automobiles)		699,000		3,233,000
Japan Tobacco Incorporated (Consumer Staples, Tobacco)		209		982,954
Komatsu Limited (Industrials, Machinery)		28,300		661,449
Makita Corporation (Industrials, Machinery)		32,800		1,061,515
Mitsubishi UFJ Financial Group Incorporated (Financials, Commercial Banks)		567,600		2,411,397
Nintendo Company Limited (Information Technology, Software)		13,000		1,790,308
NKSJ Holdings Incorporated (Financials, Insurance)		111,500		2,187,411
Sumitomo Heavy Industries Limited (Industrials, Machinery)		532,000		3,103,391
Sumitomo Mitsui Financial Group Incorporated (Financials, Commercial Banks)		64,300		1,791,077
Tokyo Electron Limited (Information Technology, Semiconductors & Semiconductor Equipment)		27,400		1,393,673
Toshiba Corporation (Information Technology, Computers & Peripherals)		224,000		916,721
Toyota Motor Corporation (Consumer Discretionary, Automobiles)		186,800		6,225,049
Yahoo! Japan Corporation (Information Technology, Internet Software & Services)		3,388		1,091,185
				29,436,424
Luxembourg: 0.63%
Acergy SA (Energy, Energy Equipment & Services)		67,213		1,247,422
ArcelorMittal (Materials, Metals & Mining)		26,134		477,932
				1,725,354
Netherlands: 4.40%
ASML Holding NV (Information Technology, Semiconductors & Semiconductor Equipment)		54,015		2,270,293
ING Groep NV (Financials, Diversified Financial Services)†		101,648		731,462
Nielsen Holdings NV (Industrials, Professional Services)†		86,007		2,553,548
Unilever NV (Consumer Staples, Food Products)		124,345		4,276,005
USG People NV (Industrials, Commercial Services & Supplies)		266,718		2,212,731
				12,044,039

12 Wells Fargo Advantage VT International Equity Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Norway: 1.68%
Telenor ASA (Telecommunication Services, Diversified Telecommunication Services)		280,089	$	4,594,118
Singapore: 0.48%
DBS Group Holdings Limited (Financials, Commercial Banks)		149,000		1,323,372
South Korea: 2.21%
Hyundai Motor Company Limited (Consumer Discretionary, Automobiles)		11,019		2,037,367
Samsung Electronics Company Limited (Information Technology, Semiconductors & Semiconductor Equipment)		4,372		4,015,257
				6,052,624
Spain: 2.83%
Banco Santander Central Hispano SA (Financials, Commercial Banks)		108,411		823,625
Industria de Diseno Textil SA (Consumer Discretionary, Specialty Retail)		19,910		1,630,632
Repsol YPF SA (Energy, Oil, Gas & Consumable Fuels)		172,237		5,290,954
				7,745,211
Sweden: 0.58%
Swedbank AB (Financials, Commercial Banks)		121,827		1,578,146
Switzerland: 11.43%
ABB Limited (Industrials, Electrical Equipment)		78,976		1,486,528
Adecco SA (Industrials, Professional Services)		25,761		1,079,203
Compagnie Financiere Richemont SA (Consumer Discretionary, Textiles, Apparel & Luxury Goods)		76,684		3,878,694
Credit Suisse Group AG (Financials, Capital Markets)		45,404		1,066,822
Nestle SA (Consumer Staples, Food Products)		111,527		6,411,645
Novartis AG (Health Care, Pharmaceuticals)		90,619		5,180,709
Roche Holdings AG (Health Care, Pharmaceuticals)		31,951		5,415,308
Swatch Group AG Class B (Consumer Discretionary, Textiles, Apparel & Luxury Goods)		8,397		3,142,282
UBS AG (Financials, Capital Markets)		68,418		814,344
Zurich Financial Services AG (Financials, Insurance)		12,386		2,802,113
				31,277,648
United Kingdom: 26.40%
Anglo American plc (Materials, Metals & Mining)		51,652		1,908,328
Antofagasta plc (Materials, Metals & Mining)		130,812		2,468,285
Ashtead Group plc (Industrials, Trading Companies & Distributors)		624,917		2,193,321
Barclays plc (Financials, Commercial Banks)		418,014		1,142,874
BG Group plc (Health Care, Health Care Providers & Services)		151,671		3,242,278
BHP Billiton plc (Materials, Metals & Mining)		112,282		3,273,871
BP plc (Energy, Oil, Gas & Consumable Fuels)		372,655		2,665,066
Burberry Group plc (Consumer Discretionary, Textiles, Apparel & Luxury Goods)		119,453		2,198,300
Diageo plc (Consumer Staples, Beverages)		223,777		4,887,949
Experian Group Limited (Financials, Diversified Financial Services)		183,252		2,491,589
GlaxoSmithKline plc (Health Care, Pharmaceuticals)		180,298		4,120,241
HSBC Holdings plc (Financials, Commercial Banks)		577,896		4,407,039
Imperial Tobacco Group plc (Consumer Staples, Tobacco)		76,773		2,903,213
Intertek Group plc (Industrials, Commercial Services & Supplies)		48,520		1,533,404
Kingfisher plc (Consumer Discretionary, Specialty Retail)		454,937		1,771,239
Land Securities Group plc (Financials, REIT)		67,636		667,521
New World Resources plc (Materials, Metals & Mining)		128,760		885,642
Persimmon plc (Consumer Discretionary, Household Durables)		325,405		2,375,164

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT International Equity Fund 13

Security Name				Shares		Value
United Kingdom (continued)
Rio Tinto plc (Materials, Metals & Mining)					32,461	$	1,575,373
Royal Dutch Shell plc Class A (Energy, Oil, Gas & Consumable Fuels)					165,131		6,080,393
SABMiller plc (Consumer Staples, Beverages)					69,831		2,457,964
Standard Chartered plc (Financials, Commercial Banks)					145,794		3,190,231
Travis Perkins plc (Industrials, Trading Companies & Distributors)					153,637		1,898,049
Vodafone Group plc (Telecommunication Services, Wireless Telecommunication Services)					2,575,160		7,154,611
WPP plc (Consumer Discretionary, Media)					172,597		1,810,631
Xstrata plc (Materials, Metals & Mining)					195,183		2,964,503
							72,267,079
Total Common Stocks (Cost $256,096,109)							261,339,552
Investment Companies: 0.46%
iShares MSCI China Index ETF					25,508		1,263,411
Total Investment Companies (Cost $1,410,245)							1,263,411
	Yield
Short-Term Investments: 4.91%
Investment Companies: 4.91%
Wells Fargo Advantage Cash Investment Money Market Fund, Institutional Class(u)(l)		0.04	%		9,735,355		9,735,355
Wells Fargo Securities Lending Cash Investments, LLC(r)(v)(u)(l)		0.12			3,700,279		3,700,279
Total Short-Term Investments (Cost $13,435,634)							13,435,634

Total Investments in Securities
(Cost $270,941,988)*	100.85	%		276,038,597
Other Assets and Liabilities, Net	(0.85	)		(2,329,320	)
Total Net Assets	100.00	%	$	273,709,277

† Non-income earning security.

« All or a portion of this security is on loan.

(r) The investment company is exempt from registration under Section 3(c)(7) of the 1940 Act.

(v) Security represents investment of cash collateral received from securities on loan.

(u) Rate shown is the 7-day annualized yield at period end.

(l) Investment in an affiliate.

* Cost for federal income tax purposes is $272,239,178 and net unrealized appreciation (depreciation) consists of:

Gross unrealized appreciation	$	21,183,084
Gross unrealized depreciation		(17,383,665	)
Net unrealized appreciation	$	3,799,419

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

14 Wells Fargo Advantage VT International Equity Fund Statement of Assets and Liabilities—December 31, 2011

Assets
Investments
In unaffiliated securities (including securities on loan), at value	$	262,602,963
In affiliated securities, at value		13,435,634
Total investments, at value (see cost below)		276,038,597
Foreign currency, at value (see cost below)		178,498
Receivable for Fund shares sold		590,834
Receivable for dividends		1,159,772
Receivable for securities lending income		7,113
Total assets		277,974,814
Liabilities
Payable for investments purchased		148,609
Payable for Fund shares redeemed		8,789
Unrealized losses on forward foreign currency contracts		133,104
Payable upon receipt of securities loaned		3,700,279
Advisory fee payable		97,497
Distribution fees payable		51,072
Due to other related parties		31,962
Accrued expenses and other liabilities		94,225
Total liabilities		4,265,537
Total net assets	$	273,709,277
NET ASSETS CONSIST OF
Paid-in capital	$	248,369,566
Undistributed net investment income		4,511,173
Accumulated net realized gains on investments		15,797,762
Net unrealized gains on investments		5,030,776
Total net assets	$	273,709,277
COMPUTATION OF NET ASSET VALUE PER SHARE1
Net assets – Class 1	$	46,016,787
Shares outstanding – Class 1		9,647,118
Net asset value per share – Class 1		$4.77
Net assets – Class 2	$	227,692,490
Shares outstanding – Class 2		47,625,082
Net asset value per share – Class 2		$4.78
Total investments, at cost	$	270,941,988
Securities on loan, at value	$	3,590,395
Foreign currency, at cost	$	171,481

1. The Fund has an unlimited number of authorized shares.

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

Statement of Operations—Year Ended December 31, 2011 Wells Fargo Advantage VT International Equity Fund 15

Investment income
Dividends*	$	7,277,725
Securities lending income, net		293,675
Income from affiliated securities		19,923
Interest		264
Total investment income		7,591,587
Expenses
Advisory fee		2,106,559
Administration fees
Fund level		140,437
Class 1		46,678
Class 2		178,022
Distribution fees
Class 2		556,316
Custody and accounting fees		53,167
Professional fees		66,044
Shareholder report expenses		82,707
Trustees’ fees and expenses		8,642
Other fees and expenses		31,747
Total expenses		3,270,319
Less: Fee waivers and/or expense reimbursements		(775,968	)
Net expenses		2,494,351
Net investment income		5,097,236
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains (losses)
Unaffiliated securities		22,278,348
Forward foreign currency contract transactions		(2,187	)
Net realized gains on investments		22,276,161
Net change in unrealized gains (losses) on:
Unaffiliated securities		(65,299,204	)
Forward foreign currency contract transactions		(133,104	)
Net change in unrealized gains (losses) on investments		(65,432,308	)
Net realized and unrealized gains (losses) on investments		(43,156,147	)
Net decrease in net assets resulting from operations	$	(38,058,911	)
* Net of foreign dividend withholding taxes of		$702,322

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

16 Wells Fargo Advantage VT International Equity Fund Statements of Changes in Net Assets

	Year Ended December 31, 2011						Year Ended December 31, 20101
Operations
Net investment income				$	5,097,236					$	6,461,379
Net realized gains on investments					22,276,161						51,294,037
Net change in unrealized gains (losses) on investments					(65,432,308	)					(68,183,867	)
Net decrease in net assets resulting from operations					(38,058,911	)					(10,428,451	)
Distributions to shareholders from
Net investment income
Class 1					(366,876	)					(634,631	)
Class 2					(233,091	)					(6,829,353	)
Net realized gains
Class 1					(2,581,647	)					(2,275,564	)
Class 2					(9,844,118	)					(14,614,363	)
Total distributions to shareholders					(13,025,732	)					(24,353,911	)
Capital share transactions		Shares						Shares
Proceeds from shares sold
Class 1		745,197			4,050,134			1,134,578			8,695,259
Class 2		13,140,189			69,270,290			9,758,149			75,995,758
					73,320,424						84,691,017
Reinvestment of distributions
Class 1		533,187			2,948,523			285,379			2,910,195
Class 2		1,815,713			10,077,209			2,088,525			21,443,716
					13,025,732						24,353,911
Payment for shares redeemed
Class 1		(3,400,121	)		(18,259,790	)		(2,836,858	)		(20,254,823	)
Class 2		(5,339,924	)		(29,300,042	)		(79,487,176	)		(745,184,963	)
					(47,559,832	)					(765,439,786	)
Net asset value of shares issued in acquisition
Class 2					0						16,640,001
Net increase (decrease) in net assets resulting from capital share transactions					38,786,324						(639,754,857	)
Total decrease in net assets					(12,298,319	)					(674,537,219	)
Net assets
Beginning of period					286,007,596						960,544,815
End of period				$	273,709,277					$	286,007,596
Undistributed net investment income				$	4,511,173					$	585,247

1. After the close of business on July 16, 2010, the Fund acquired the net assets of Evergreen VA International Equity Fund which became the accounting and performance survivor in the transaction. The information for the period prior to July 19, 2010 is that of Evergreen VA International Equity Fund.

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

Financial Highlights Wells Fargo Advantage VT International Equity Fund 17

(For a share outstanding throughout each period)

	Year Ended December 31,
Class 1	2011			20101			20091			20081			20071
Net asset value, beginning of period	$	5.75		$	5.15		$	4.64		$	8.14		$	7.82
Net investment income		0.11	2		0.05	2		0.11	2		0.20	2		0.16
Net realized and unrealized gains (losses) on investments		(0.80	)		0.78			0.55			(3.52	)		1.02
Total from investment operations		(0.69	)		0.83			0.66			(3.32	)		1.18
Distributions to shareholders from
Net investment income		(0.04	)		(0.05	)		(0.15	)		0.00			(0.20	)
Net realized gains		(0.25	)		(0.18	)		0.00			(0.18	)		(0.66	)
Total distributions to shareholders		(0.29	)		(0.23	)		(0.15	)		(0.18	)		(0.86	)
Net asset value, end of period	$	4.77		$	5.75		$	5.15		$	4.64		$	8.14
Total return		(12.79	)%		16.79	%		15.95	%		(41.49	)%		15.00	%
Ratios to average net assets (annualized)
Gross expenses		0.97	%		0.85	%		0.68	%		0.67	%		0.63	%
Net expenses		0.69	%		0.66	%		0.68	%		0.67	%		0.63	%
Net investment income		2.06	%		1.04	%		2.31	%		3.02	%		2.01	%
Supplemental data
Portfolio turnover rate		66	%		60	%		205	%		127	%		58	%
Net assets, end of period (000’s omitted)		$46,017			$67,659			$69,407			$71,286			$190,766

1. After the close of business on July 16, 2010, the Fund acquired the net assets of Evergreen VA International Equity Fund which became the accounting and performance survivor in the transaction. The information for the periods prior to July 19, 2010 is that of Class 1 of Evergreen VA International Equity Fund. The per share information has been adjusted to give effect to this transaction.

2. Calculated based upon average shares outstanding

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

18 Wells Fargo Advantage VT International Equity Fund Financial Highlights

(For a share outstanding throughout each period)

	Year Ended December 31,
Class 2	2011			20101			20091			20081			20071
Net asset value, beginning of period	$	5.74		$	5.15		$	4.64		$	8.15		$	7.84
Net investment income		0.09	2		0.06	2		0.04	2		0.18	2		0.14
Net realized and unrealized gains (losses) on investments		(0.79	)		0.75			0.62			(3.51	)		1.01
Total from investment operations		(0.70	)		0.81			0.66			(3.33	)		1.15
Distributions to shareholders from
Net investment income		(0.01	)		(0.04	)		(0.15	)		0.00			(0.18	)
Net realized gains		(0.25	)		(0.18	)		0.00			(0.18	)		(0.66	)
Total distributions to shareholders		(0.26	)		(0.22	)		(0.15	)		(0.18	)		(0.84	)
Net asset value, end of period	$	4.78		$	5.74		$	5.15		$	4.64		$	8.15
Total return		(12.91	)%		16.50	%		15.47	%		(41.60	)%		14.73	%
Ratios to average net assets (annualized)
Gross expenses		1.22	%		0.97	%		0.89	%		0.92	%		0.88	%
Net expenses		0.94	%		0.89	%		0.89	%		0.92	%		0.88	%
Net investment income		1.75	%		1.22	%		0.70	%		2.74	%		1.75	%
Supplemental data
Portfolio turnover rate		66	%		60	%		205	%		127	%		58	%
Net assets, end of period (000’s omitted)		$227,692			$218,348			$891,137			$56,692			$118,843

1. After the close of business on July 16, 2010, the Fund acquired the net assets of Evergreen VA International Equity Fund which became the accounting and performance survivor in the transaction. The information for the periods prior to July 19, 2010 is that of Class 2 of Evergreen VA International Equity Fund. The per share information has been adjusted to give effect to this transaction.

2. Calculated based upon average shares outstanding

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

Notes to Financial Statements Wells Fargo Advantage VT International Equity Fund 19

1. ORGANIZATION

Wells Fargo Variable 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”). These financial statements report on Wells Fargo Advantage VT International Equity 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

Investments in equity securities are valued each business day as of the close of regular trading on the New York Stock Exchange, which is usually 4:00 p.m. (Eastern Time). Securities which are traded on a national or foreign securities exchange are valued at the last reported sales price, except that securities listed on The Nasdaq Stock Market, Inc. (“Nasdaq”) are valued at the Nasdaq Official Closing Price (“NOCP”), and if no NOCP is available, then at the last reported sales price. If no sales price is shown on the Nasdaq, the bid price will be used. In the absence of any sale of securities listed on the Nasdaq, and in the case of other securities (including U.S. Government obligations, but excluding debt securities maturing in 60 days or less), the price will be deemed “stale” and the valuations will be determined in accordance with the Fund’s Fair Value Procedures.

Securities denominated in foreign currencies are translated into U.S. dollars using the closing rates of exchange in effect on the day of valuation.

Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore may not fully reflect trading or events that occur after the close of the principal exchange in which the foreign investments are traded but before the close of the New York Stock Exchange. If such trading or events are expected to materially affect the value of the investments, then those investments are fair valued following procedures approved by the Board of Trustees. These procedures take into account multiple factors including movements in U.S. securities markets after foreign exchanges close. Depending on market activity, such fair valuations may be frequent. Such fair value pricing may result in NAVs that are higher or lower than NAVs based on the closing price or latest quoted bid price.

Debt securities of sufficient credit quality with original maturities of 60 days or less generally are valued at amortized cost which approximates fair value. The amortized cost method involves valuing a security at its cost, plus accretion of discount or minus amortization of premium over the period until maturity.

Investments in open-end mutual funds and non-registered investment companies are generally valued at net asset value.

Investments which are not valued using any of the methods discussed above, are valued at their fair value, as determined by procedures established in good faith and approved by the Board of Trustees.

Foreign currency translation

The accounting records of the Fund are maintained in U.S. dollars. Assets, including investment securities, and liabilities denominated in foreign currency are translated into U.S. dollars at the prevailing rates of exchange at the date of valuation. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and liabilities other than investments in securities resulting in changes in exchange rates.

The changes in net assets arising from changes in exchange rates and the changes in net assets resulting from changes in market prices of securities are not separately presented. Such changes are recorded with net realized and unrealized gains or losses from investments. Gains and losses from certain foreign currency transactions are treated as ordinary income for U.S. federal income tax purposes.

20 Wells Fargo Advantage VT International Equity Fund Notes to Financial Statements

Forward foreign currency contracts

The Fund may be subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. A forward foreign currency contract is an agreement between two parties to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund enters into forward foreign currency contracts to facilitate transactions in foreign-denominated securities and to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. Forward foreign currency contracts are recorded at the forward rate and marked-to-market daily. When the contracts are closed, realized gains and losses arising from such transactions are recorded as realized gains or losses on foreign currency related transactions. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably. The Fund’s maximum risk of loss from counterparty credit risk is the unrealized gains or losses on the contracts. This risk is mitigated by having a master netting arrangement between the Fund and the counterparty.

Security loans

The Fund may lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. The Fund continues to receive interest or dividends on the securities loaned. The Fund receives collateral in the form of cash or securities with a value at least equal to the value of the securities on loan. The value of the loaned securities is determined at the close of each business day and any additional required collateral is delivered to the Fund on the next business day. In a securities lending transaction, the net asset value of the Fund will be affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of the instrument in which collateral is invested. The amount of securities lending activity undertaken by the Fund fluctuates from time to time. In the event of default or bankruptcy by the borrower, the Fund may be prevented from recovering the loaned securities or gaining access to the collateral or may experience delays or costs in doing so. In addition, the investment of any cash collateral received may lose all or part of its value. The Fund has the right under the lending agreement to recover the securities from the borrower on demand.

The Fund lends its securities through an unaffiliated securities lending agent. Cash collateral received in connection with its securities lending transactions is invested in Wells Fargo Securities Lending Cash Investments, LLC (the “Cash Collateral Fund”). The Cash Collateral Fund is exempt from registration under Section 3(c)(7) of the 1940 Act and is managed by Wells Fargo Funds Management LLC (“Funds Management”) and is sub-advised by Wells Capital Management Incorporated (“Wells Capital Management”). Funds Management receives an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Cash Collateral Fund increase. All of the fees received by Funds Management are paid to Wells Capital Management for its services as sub-adviser. The Cash Collateral Fund seeks to provide a positive return compared to the daily Fed Funds Open rate by investing in high-quality, U.S. dollar-denominated short-term money market instruments. Cash Collateral Fund investments are fair valued based upon the amortized cost valuation technique. Income earned from investment in the Cash Collateral Fund is included in securities lending income on the Statement of Operations.

Security transactions and income recognition

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

Dividend income is recognized on the ex-dividend date, except for certain dividends from foreign securities, which are recorded as soon as the Fund is informed of the ex-dividend date. Dividend income from foreign securities is recorded net of foreign taxes withheld where recovery of such taxes is not assured.

Distributions to shareholders

Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-dividend date. Such distributions are determined in conformity with income tax regulations, which may differ from generally accepted accounting principles.

The timing and character of distributions made during the period from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. To the extent that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment. Temporary differences do not require reclassifications. The primary permanent differences causing such reclassifications

Notes to Financial Statements Wells Fargo Advantage VT International Equity Fund 21

are due to foreign currency transactions. At December 31, 2011, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statement of Assets and Liabilities:

Undistributed Net Investment Income			Accumulated Net Realized Gains on Investments
$	(571,343	)	$	571,343

Federal and other taxes

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

The 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.

Under the recently enacted Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years which began after December 22, 2010 for an unlimited period. However, any losses incurred are required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

As of December 31, 2011, the Fund had net capital loss carryforwards, which are available to offset future net realized capital gains, in the amount of $4,003,584 expiring in 2017.

Class allocations

The separate classes of shares offered by the Fund differ principally in distribution fees. Shareholders of each class bear certain expenses that pertain to that particular class. All shareholders bear the common expenses of the Fund, earn income from the portfolio, and are allocated unrealized gains and losses pro rata based on the average daily net assets of each class, without distinction between share classes. Dividends are determined separately for each class based on income and expenses allocable to each class. Realized gains and losses are allocated to each class pro rata based upon the net assets of each class on the date realized. Differences in per share dividend rates generally result from the relative weightings of pro rata income and realized gain allocations and from differences in separate class expenses, including distribution fees.

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 significant 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:

n Level 1 – quoted prices in active markets for identical securities

n Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

n Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

22 Wells Fargo Advantage VT International Equity Fund Notes to Financial Statements

As of December 31, 2011, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:

Investments in Securities	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity securities
Common stocks	$	261,339,552	$	0	$	0	$	261,339,552
Investment companies		1,263,411		0		0		1,263,411
Short-term investments
Investment companies		9,735,355		3,700,279		0		13,435,634
	$	272,338,318	$	3,700,279	$	0	$	276,038,597

Further details on the major security types listed above can be found in the Portfolio of Investments.

As of December 31, 2011, the inputs used in valuing the Fund’s other financial instruments, which are carried at fair value, were as follows:

Other Financial Instruments	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
Forward foreign currency contracts+	$	0	$	(133,104	)	$	0	$	(133,104	)

+ Forward foreign currency contracts are presented at the unrealized gains or losses on the instrument.

Transfers in and transfers out are recognized at the end of the reporting period. For the year ended December 31, 2011, the Fund did not have any significant transfers into/out of Level 1 and Level 2.

4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES

Advisory fee

The Trust has entered into an advisory contract with Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”). The adviser is responsible for implementing investment policies and guidelines and for supervising the sub-adviser, who is responsible for day-to-day portfolio management of the Fund.

Pursuant to the contract, Funds Management is entitled to receive an annual advisory fee starting at 0.75% and declining to 0.60% as the average daily net assets of the Fund increase. For the year ended December 31, 2011, the advisory fee was equivalent to an annual rate of 0.75% of the Fund’s average daily net assets.

Funds Management may retain the services of certain sub-advisers to provide daily portfolio management to the Fund. The fees related to sub-advisory services are borne directly by Funds Management and do not increase the overall fees paid by the Fund. Wells Capital Management, an affiliate of Funds Management, is the sub-adviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.45% and declining to 0.40% as the average daily net assets of the Fund increase.

Administration and transfer agent fees

The Trust has entered into an administration agreement with Funds Management. Under this agreement, for providing administrative services, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers, Funds Management is entitled to receive from the Fund an annual fund level administration fee starting at 0.05% and declining to 0.03% as the average daily net assets of the Fund increase and a class level administration fee of 0.08% of the average daily net assets of each class.

Funds Management has contractually waived and/or reimbursed advisory and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. Waiver of fees and/or reimbursement of expenses by Funds Management were made first from fund level expenses on a proportionate basis and then from class specific expenses.

Notes to Financial Statements Wells Fargo Advantage VT International Equity Fund 23

Distribution fees

The Trust has adopted a Distribution Plan for Class 2 shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are charged to the Class 2 shares and paid to Wells Fargo Funds Distributor, LLC, the principal underwriter, at an annual rate of 0.25% of its average daily net assets.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. Government obligations (if any) and short-term securities (securities with maturities of one year or less at purchase date), for the year ended December 31, 2011 were $201,772,991 and $177,723,213, respectively.

6. DERIVATIVE TRANSACTIONS

During the year ended December 31, 2011, the Fund entered into forward foreign currency exchange contracts for economic hedging purposes.

At December 31, 2011, the Fund had forward foreign currency contracts outstanding as follows:

Forward foreign currency contracts to buy:

Exchange Date	Counterparty	Contracts to Receive			U.S. Value at December 31, 2011		In Exchange for U.S. $		Net Unrealized Gains (Losses)
01/05/2012	Barclays		4,800,000	GBP	$	7,454,336	$	7,576,176	$	(121,840	)

Forward foreign currency contracts to sell:

Exchange Date	Counterparty	Contracts to Deliver			U.S. Value at December 31, 2011		In Exchange for U.S. $		Net Unrealized Gains (Losses)
01/05/2012	Barclays		4,800,000	GBP	$	7,454,336	$	7,443,072	$	(11,264	)

The Fund had average contract amounts of $5,461,465 and $10,760,943 in forward foreign currency exchange contracts to buy and forward foreign currency exchange contracts to sell, respectively, during the year ended December 31, 2011.

The fair value, realized gains or losses and change in unrealized gains or losses, if any, on derivative instruments are reflected in the appropriate financial statements.

7. ACQUISTION

After the close of business July 16, 2010, the Fund (named Wells Fargo Advantage VT International Core Fund at the time of the reorganization), which is the legal survivor, acquired the net assets of Evergreen VA International Equity Fund, the accounting and performance survivor. The purpose of the transaction was to combine two funds with similar investment objectives and strategies. The acquisition was accomplished by a tax-free exchange of all of the shares of Evergreen VA International Equity Fund. Shareholders holding Class 1 and Class 2 shares of Evergreen VA International Equity Fund received Class 1 and Class 2, respectively, of the Fund in the reorganization. The exchange ratios and number of shares issued to the Evergreen VA International Equity Fund were as follows:

Acquired Fund	Exchange Ratio		Number of Shares Issued
Evergreen VA International Equity		2.07		12,919,350	Class 1
		2.06		35,012,685	Class 2

The investment portfolio of the Fund with a fair value of $16,596,518, identified cost of $15,909,494 and unrealized gains of $687,024 at July 16, 2010 was the principal assets acquired by the accounting and performance survivor. The shares and net assets of the Fund immediately prior to the acquisition were 3,526,065 shares and $16,640,001, respectively. The aggregate net assets of Evergreen VA International Equity Fund immediately prior to the acquisition was $226,195,623. The aggregate net assets of the Fund immediately after the acquisition was $242,835,624. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from the Fund was carried forward to align ongoing reporting the Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.

24 Wells Fargo Advantage VT International Equity Fund Notes to Financial Statements

Assuming the acquisition had been completed January 1, 2010, the beginning of the annual reporting period for the Fund, the pro forma results of operations for the year ended December 31, 2010 would have been:

Net investment income	$	6,329,569
Net realized and unrealized losses on investments	$	(18,715,027	)
Net decrease in net assets resulting from operations	$	(12,385,458	)

8. BANK BORROWINGS

The Trust and Wells Fargo Funds Trust (excluding the money market funds) are parties to a $150,000,000 revolving credit agreement with State Street Bank and Trust Company, 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, under the credit agreement, the Fund pays an annual commitment fee equal to 0.10% of the unused balance, which is allocated pro rata. Prior to September 6, 2011, the revolving credit agreement was for $125,000,000 and the annual commitment fee paid by the Fund was 0.125% of the unused balance. For the year ended December 31, 2011, the Fund paid $704 in commitment fees.

For the year ended December 31, 2011, there were no borrowings by the Fund under the agreement.

9. DISTRIBUTIONS TO SHAREHOLDERS

The tax character of distributions paid during the years ended December 31, 2011 and December 31, 2010 were as follows:

	Year ended December 31,
	2011		2010
Ordinary Income	$	2,217,673	$	7,463,984
Long-term Capital Gain		10,808,059		16,889,927

As of December 31, 2011, the components of distributable earnings on a tax basis were as follows:

Undistributed Ordinary Income	Undistributed Long-Term Gain	Unrealized Gains (Losses)	Capital Loss Carryforward
$4,389,860	$21,230,540	$3,733,586	$(4,003,584)

10. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and directors are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Trust may enter into contracts with service providers that contain a variety of indemnification clauses. The Trust’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.

11. NEW ACCOUNTING PRONOUNCEMENTS

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. ASU No. 2011-04 amends FASB ASC Topic 820, Fair Value Measurements and Disclosures, to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP. The ASU is effective prospectively for interim and annual periods beginning after December 15, 2011. Management expects that adoption of the ASU will result in additional disclosures in the financial statements, as applicable.

In April 2011, FASB issued ASU No. 2011-03 “Reconsideration of Effective Control for Repurchase Agreements”. ASU No. 2011-03 amends FASB ASC Topic 860, Transfers and Servicing, specifically the criteria required to determine whether a

Notes to Financial Statements Wells Fargo Advantage VT International Equity Fund 25

repurchase agreement (repo) and similar agreements should be accounted for as sales of financial assets or secured borrowings with commitments. ASU No. 2011-03 changes the assessment of effective control by focusing on the transferor’s contractual rights and obligations and removing the criterion to assess its ability to exercise those rights or honor those obligations. This could result in changes to the way entities account for certain transactions including repurchase agreements, mortgage dollar rolls and reverse repurchase agreements. The ASU will become effective on a prospective basis for new transfers and modifications to existing transactions as of the beginning of the first interim or annual period beginning on or after December 15, 2011. Management has evaluated the impact of adopting the ASU and expects no significant changes.

26 Wells Fargo Advantage VT International Equity Fund Report of Independent Registered Public Accounting Firm

BOARD OF TRUSTEES AND SHAREHOLDERS OF WELLS FARGO VARIABLE TRUST:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the Wells Fargo Advantage VT International Equity Fund (the “Fund”), one of the funds constituting the Wells Fargo Variable Trust, as of December 31, 2011, and the related statement of operations for the year then ended, statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2011, by correspondence with custodian and brokers, or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Wells Fargo Advantage VT International Equity Fund as of December 31, 2011, the results of its operations for the year then ended, changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

February 24, 2012

Other Information (Unaudited) Wells Fargo Advantage VT International Equity Fund 27

TAX INFORMATION

Pursuant to Section 852 of the Internal Revenue Code, $10,808,059 was designated as long-term capital gain distributions for the fiscal year ended December 31, 2011.

Pursuant to Section 853 of the Internal Revenue Code, the following amounts have been designated as foreign taxes paid for the fiscal year ended December 31, 2011. These amounts may be less than the actual foreign taxes paid for financial statement purposes. Foreign taxes paid or withheld should be included in taxable income with an offsetting deduction from gross income or as a credit for taxes paid to foreign governments. None of the income was derived from ineligible foreign sources as defined under Section 901(j) of the Internal Revenue Code.

Creditable Foreign Taxes Paid		Per Share Amount		Foreign Income as % of Ordinary Income Distributions
$	655,512	$	0.0114		43.46	%

PROXY VOTING INFORMATION

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our Web site at www.wellsfargo.com/advantagefunds, or visiting the SEC Web site at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the Fund’s Web site at www.wellsfargo.com/advantagefunds or by visiting the SEC Web site at www.sec.gov.

PORTFOLIO HOLDINGS INFORMATION

The complete portfolio holdings for the Fund are publicly available on the Fund’s Web site (www.wellsfargo.com/advantagefunds) on a monthly, 30-day or more delayed basis. In addition, top ten holdings information for the Fund is publicly available on the Fund’s Web site on a monthly, seven-day or more delayed basis. The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q, which is available without charge by visiting the SEC Web site at www.sec.gov. In addition, the Fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and at regional offices in New York City, at 233 Broadway, and in Chicago, at 175 West Jackson Boulevard, Suite 900. Information about the Public Reference Room may be obtained by calling 1-800-SEC-0330.

28 Wells Fargo Advantage VT International Equity Fund Other Information (Unaudited)

BOARD OF TRUSTEES

The following table provides basic information about the Board of Trustees (the “Trustees”) of the Trust and Officers of the Trust. This table should be read in conjunction with the Prospectus and the Statement of Additional Information¹ of the Fund. Each of the Trustees and Officers listed below acts in identical capacities for the Wells Fargo Advantage family of funds, which consists of 138 funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). All of the Trustees are also Members of the Audit and Governance Committees of each Trust in the Fund Complex. The mailing address of each Trustee and Officer is 525 Market Street, 12th Floor, San Francisco, CA 94105. 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	Other Directorships During Past Five Years
Peter G. Gordon (Born 1942)	Trustee, since 1998; Chairman, since 2005 (Lead Trustee since 2001)	Co-Founder, Retired Chairman, President and CEO of Crystal Geyser Water Company. Trustee Emeritus, Colby College	Asset Allocation Trust
Isaiah Harris, Jr. (Born 1952)	Trustee, since 2009	Retired. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Mr. Harris is a certified public accountant.	CIGNA Corporation; Deluxe Corporation; Asset Allocation Trust
Judith M. Johnson (Born 1949)	Trustee, since 2008	Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.	Asset Allocation Trust
Leroy Keith, Jr. (Born 1939)	Trustee, since 2010	Chairman, Bloc Global Services (development and construction). Trustee of the Evergreen Funds from 1983 to 2010. Former Managing Director, Almanac Capital Management (commodities firm), former Partner, Stonington Partners, Inc. (private equity fund), former Director, Obagi Medical Products Co. and former Director, Lincoln Educational Services.	Trustee, Virtus Fund Complex (consisting of 40 portfolios as of 12/31/11); Asset Allocation Trust
David F. Larcker (Born 1950)	Trustee, since 2009	James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of Corporate Governance Research Program and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.	Asset Allocation Trust
Olivia S. Mitchell (Born 1953)	Trustee, since 2006	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.	Asset Allocation Trust

Other Information (Unaudited) Wells Fargo Advantage VT International Equity Fund 29

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years	Other Directorships During Past Five Years
Timothy J. Penny (Born 1951)	Trustee, since 1996	President and CEO of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007 and Senior Fellow at the Humphrey Institute Policy Forum at the University of Minnesota since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.	Asset Allocation Trust
Michael S. Scofield (Born 1943)	Trustee, since 2010	Served on the Investment Company Institute’s Board of Governors and Executive Committee from 2008-2011 as well the Governing Council of the Independent Directors Council from 2006-2011 and the Independent Directors Council Executive Committee from 2008-2011. Chairman of the IDC from 2008-2010. Institutional Investor (Fund Directions) Trustee of Year in 2007. Trustee of the Evergreen Funds (and its predecessors) from 1984 to 2010. Chairman of the Evergreen Funds from 2000-2010. Former Trustee of the Mentor Funds. Retired Attorney, Law Offices of Michael S. Scofield and former Director and Chairman, Branded Media Corporation (multi-media branding company).	Asset Allocation Trust
Donald C. Willeke (Born 1940)	Trustee, since 1996	Principal of the law firm of Willeke & Daniels. General Counsel of the Minneapolis Employees Retirement Fund from 1984 until its consolidation into the Minnesota Public Employees Retirement Association on June 30, 2010. Director and Vice Chair of The Free Trust (non-profit corporation). Director of the American Chestnut Foundation (non-profit corporation).	Asset Allocation Trust

Officers

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years
Karla M. Rabusch (Born 1959)	President, since 2003	Executive Vice President of Wells Fargo Bank, N.A. and President of Wells Fargo Funds Management, LLC since 2003. Senior Vice President and Chief Administrative Officer of Wells Fargo Funds Management, LLC from 2001 to 2003.
C. David Messman (Born 1960)	Secretary, since 2000; Chief Legal Counsel, since 2003	Senior Vice President and Secretary of Wells Fargo Funds Management, LLC since 2001. Vice President and Managing Senior Counsel of Wells Fargo Bank, N.A. since 1996.
Kasey Phillips (Born 1970)	Treasurer, since 2009	Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2006 to 2010. Treasurer of the Evergreen Funds from 2005 to 2010.
David Berardi (Born 1975)	Assistant Treasurer, since 2009	Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Assistant Vice President of Evergreen Investment Services, Inc. from 2004 to 2008. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.
Jeremy DePalma (Born 1974)	Assistant Treasurer, since 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. Vice President, Evergreen Investment Services, Inc. from 2004 to 2007. Head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.
Debra Ann Early (Born 1964)	Chief Compliance Officer, since 2007	Chief Compliance Officer of Wells Fargo Funds Management, LLC since 2007. Chief Compliance Officer of Parnassus Investments from 2005 to 2007. Chief Financial Officer of Parnassus Investments from 2004 to 2007 and Senior Audit Manager of PricewaterhouseCoopers LLP from 1998 to 2004.

1. 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 Web site at www.wellsfargo.com/advantagefunds.

30 Wells Fargo Advantage VT International Equity Fund List of Abbreviations

The following is a list of common abbreviations for terms and entities which may have appeared in this report.

ACB —  Agricultural Credit Bank

ADR —  American Depository Receipt

ADS —  American Depository Shares

AGC-ICC —  Assured Guaranty Corporation - Insured Custody Certificates

AGM —  Assured Guaranty Municipal

AMBAC —  American Municipal Bond Assurance Corporation

AMT —  Alternative Minimum Tax

AUD —  Australian Dollar

BAN —  Bond Anticipation Notes

BHAC —  Berkshire Hathaway Assurance Corporation

BRL —  Brazil Real

CAB —  Capital Appreciation Bond

CAD —  Canadian Dollar

CCAB —  Convertible Capital Appreciation Bond

CDA —  Community Development Authority

CDO —  Collateralized Debt Obligation

CHF —  Swiss Franc

COP —  Certificate of Participation

CR —  Custody Receipts

DKK —  Danish Krone

DRIVER —  Derivative Inverse Tax-Exempt Receipts

DW&P —  Department of Water & Power

DWR —  Department of Water Resources

ECFA —  Educational & Cultural Facilities Authority

EDA —  Economic Development Authority

EDFA —  Economic Development Finance Authority

ETF —  Exchange-Traded Fund

EUR —  Euro

FFCB —  Federal Farm Credit Bank

FGIC —  Financial Guaranty Insurance Corporation

FHA —  Federal Housing Authority

FHLB —  Federal Home Loan Bank

FHLMC —  Federal Home Loan Mortgage Corporation

FNMA —  Federal National Mortgage Association

FSA —  Farm Service Agency

GBP —  Great British Pound

GDR —  Global Depository Receipt

GNMA —  Government National Mortgage Association

GO —  General Obligation

HCFR —  Healthcare Facilities Revenue

HEFA —  Health & Educational Facilities Authority

HEFAR —  Higher Education Facilities Authority Revenue

HFA —  Housing Finance Authority

HFFA —  Health Facilities Financing Authority

HKD —  Hong Kong Dollar

HUF —  Hungarian Forint

IBC —  Insured Bond Certificate

IDA —  Industrial Development Authority

IDAG —  Industrial Development Agency

IDR —  Industrial Development Revenue

IEP —  Irish Pound

JPY —  Japanese Yen

KRW —  Republic of Korea Won

LIBOR —  London Interbank Offered Rate

LLC —  Limited Liability Company

LLP —  Limited Liability Partnership

LOC —  Letter of Credit

LP —  Limited Partnership

MBIA —  Municipal Bond Insurance Association

MFHR —  Multi-Family Housing Revenue

MTN —  Medium Term Note

MUD —  Municipal Utility District

MXN —  Mexican Peso

MYR —  Malaysian Ringgit

NATL-RE —  National Public Finance Guarantee Corporation

NOK —  Norwegian Krone

NZD —  New Zealand Dollar

PCFA —  Pollution Control Finance Authority

PCR —  Pollution Control Revenue

PFA —  Public Finance Authority

PFFA —  Public Facilities Financing Authority

PFOTER —  Puttable Floating Option Tax-Exempt Receipts

plc —  Public Limited Company

PLN —  Polish Zloty

PUTTER —  Puttable Tax-Exempt Receipts

R&D —  Research & Development

RDA —  Redevelopment Authority

RDFA —  Redevelopment Finance Authority

REIT —  Real Estate Investment Trust

ROC —  Reset Option Certificates

SAVRS —  Select Auction Variable Rate Securities

SBA —  Small Business Authority

SEK —  Swedish Krona

SFHR —  Single Family Housing Revenue

SFMR —  Single Family Mortgage Revenue

SGD —  Singapore Dollar

SKK —  Slovakian Koruna

SPDR —  Standard & Poor’s Depositary Receipts

TAN —  Tax Anticipation Notes

TBA —  To Be Announced

TIPS —  Treasury Inflation-Protected Securities

TRAN —  Tax Revenue Anticipation Notes

TCR —  Transferable Custody Receipts

TRY —  Turkish Lira

TTFA —  Transportation Trust Fund Authority

TVA —  Tennessee Valley Authority

XLCA —  XL Capital Assurance

ZAR —  South African Rand

FOR MORE INFORMATION

More information about Wells Fargo Advantage Funds is available free upon request. To obtain literature, please write, e-mail, visit the Fund’s Web site, or call:

Wells Fargo Advantage Funds

P.O. Box 8266

Boston, MA 02266-8266

E-mail: wfaf@wellsfargo.com

Web site: www.wellsfargo.com/advantagefunds

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

This report and the financial statements contained herein are submitted for the general information of the shareholders of Wells Fargo Advantage Funds. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. For a prospectus containing more complete information, including charges and expenses, call 1-800-222-8222 or visit the Fund’s Web site at www.wellsfargo.com/advantagefunds. Please consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. This and other information about Wells Fargo Advantage Funds can be found in the current prospectus. Read the prospectus carefully before you invest or send money.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

© 2012 Wells Fargo Funds Management, LLC. All rights reserved.

207573 02-12

AVT3/AR149 12-11

Wells Fargo Advantage

VT Intrinsic Value Fund

Annual Report

December 31, 2011

Reduce clutter. Save trees.

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

Contents

Letter to Shareholders	2
Performance Highlights	5
Fund Expenses	9
Portfolio of Investments	10
Financial Statements
Statement of Assets and Liabilities	13
Statement of Operations	14
Statements of Changes in Net Assets	15
Financial Highlights	16
Notes to Financial Statements	17
Report of Independent Registered Public Accounting Firm	22
Other Information	23
List of Abbreviations	26

The views expressed and any forward-looking statements are as of December 31, 2011, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Funds Management, LLC. Discussions of individual securities, or the markets generally, or any Wells Fargo Advantage Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements; the views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Funds Management, LLC, disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

WELLS FARGO INVESTMENT HISTORY

1932	Keystone creates one of the first mutual fund families.
1971	Wells Fargo & Company introduces one of the first institutional index funds.
1978	Wells Fargo applies Markowitz and Sharpe’s research on Modern Portfolio Theory to introduce one of the industry’s first Tactical Asset Allocation (TAA) models in institutional separately managed accounts.
1984	Wells Fargo Stagecoach Funds launches its first asset allocation fund.
1989	The Tactical Asset Allocation (TAA) Model is first applied to Wells Fargo’s asset allocation mutual funds.
1994	Wells Fargo introduces the LifePath Funds, one of the first suites of target date funds (now the Wells Fargo Advantage Dow Jones Target Date FundsSM ).
1996	Evergreen Investments and Keystone Funds merge.
1997	Wells Fargo launches Wells Fargo Advantage WealthBuilder PortfoliosSM, a fund-of-funds suite of products that includes the use of quantitative models to shift assets among investment styles.
1999	Norwest Advantage Funds and Stagecoach Funds are reorganized into Wells Fargo Funds after the merger of Norwest and Wells Fargo.
2002	Evergreen Retail and Evergreen Institutional companies form the umbrella asset management company, Evergreen Investments.
2005	The integration of Strong Funds with Wells Fargo Funds creates Wells Fargo Advantage Funds, resulting in one of the top 20 mutual fund companies in the United States.
2006	Wells Fargo Advantage Funds relaunches the target date product line as Wells Fargo Advantage Dow Jones Target Date Funds.
2010	The mergers and reorganizations of Evergreen and Wells Fargo Advantage mutual funds are completed, unifying the families under the brand of Wells Fargo Advantage Funds.

Wells Fargo Advantage Funds^®

Wells Fargo Advantage Funds skillfully guides institutions, financial advisors, and individuals through the investment terrain to help them reach their financial objectives. Everything we do on behalf of investors is backed by our unique combination of qualifications.

Strength

Our organization is built on the standards of integrity and service established by our parent company—Wells Fargo & Company—more than 150 years ago. And, because we’re part of a highly diversified financial enterprise, we offer the depth of resources to help investors succeed.

Expertise

Our multi-boutique model offers investors access to the independent thinking of premier investment managers that have been chosen for their time-tested strategies. While each team specializes in a specific investment strategy, collectively they provide investors a wide choice of distinct investment styles. Our dedication to investment excellence doesn’t end with our expertise in manager selection—risk management, analysis, and rigorous ongoing review seek to ensure each manager’s investment process remains consistent.

Partnership

Our collaborative approach is built around understanding the needs and goals of our clients. By adhering to core principles of sound judgment and steady guidance, we support you through every stage of the investment decision process.

Carefully consider a fund’s investment objectives, risks, charges, and expenses before investing. For a current prospectus and, if available, a summary prospectus, containing this and other information, visit wellsfargo.com/advantagefunds. Read it carefully before investing.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds^®. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

“Dow Jones^®” and “Dow Jones Target Date Indexes^SM” are service marks of Dow Jones Trademark Holdings, LLC (“Dow Jones”), have been licensed to CME Group Index Services LLC (“CME Indexes”) and have been sublicensed for use for certain purposes by Global Index Advisors, Inc, and Wells Fargo Funds Management, LLC. The Wells Fargo Advantage Dow Jones Target Date Funds^SM based on the Dow Jones Target Date Indexes^SM, are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes or their respective affiliates and none of them makes any representation regarding the advisability of investing in such product(s).

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

Not part of the annual report.

Wells Fargo Advantage Funds offers more than 110 mutual funds across a wide range of asset classes, representing over $216 billion in assets under management, as of December 31, 2011.

Equity Funds
Asia Pacific Fund	Global Opportunities Fund	Premier Large Company Growth Fund
C&B Large Cap Value Fund	Growth Fund	Small Cap Opportunities Fund
C&B Mid Cap Value Fund	Health Care Fund	Small Cap Value Fund
Capital Growth Fund	Index Fund	Small Company Growth Fund
Common Stock Fund	International Equity Fund	Small Company Value Fund
Disciplined U.S. Core Fund	International Value Fund	Small/Mid Cap Core Fund
Discovery Fund†	Intrinsic Small Cap Value Fund	Small/Mid Cap Value Fund
Diversified Equity Fund	Intrinsic Value Fund	Social Sustainability Fund†
Diversified International Fund	Intrinsic World Equity Fund	Special Mid Cap Value Fund
Diversified Small Cap Fund	Large Cap Core Fund	Special Small Cap Value Fund
Emerging Growth Fund	Large Cap Growth Fund	Specialized Technology Fund
Emerging Markets Equity Fund	Large Company Value Fund	Strategic Large Cap Growth Fund
Endeavor Select Fund†	Omega Growth Fund	Traditional Small Cap Growth Fund
Enterprise Fund†	Opportunity Fund†	Utility and Telecommunications Fund
Equity Value Fund	Precious Metals Fund
Bond Funds
Adjustable Rate Government Fund	Inflation-Protected Bond Fund	Short-Term Bond Fund
California Limited-Term Tax-Free Fund	Intermediate Tax/AMT-Free Fund	Short-Term High Yield Bond Fund
California Tax-Free Fund	International Bond Fund	Short-Term Municipal Bond Fund
Colorado Tax-Free Fund	Minnesota Tax-Free Fund	Strategic Municipal Bond Fund
Government Securities Fund	Municipal Bond Fund	Total Return Bond Fund
High Income Fund	North Carolina Tax-Free Fund	Ultra Short-Term Income Fund
High Yield Bond Fund	Pennsylvania Tax-Free Fund	Ultra Short-Term Municipal Income Fund
Income Plus Fund	Short Duration Government Bond Fund	Wisconsin Tax-Free Fund
Asset Allocation Funds
Asset Allocation Fund	WealthBuilder Equity Portfolio†	Target 2020 Fund†
Conservative Allocation Fund	WealthBuilder Growth Allocation Portfolio†	Target 2025 Fund†
Diversified Capital Builder Fund	WealthBuilder Growth Balanced Portfolio†	Target 2030 Fund†
Diversified Income Builder Fund	WealthBuilder Moderate Balanced Portfolio†	Target 2035 Fund†
Growth Balanced Fund	WealthBuilder Tactical Equity Portfolio†	Target 2040 Fund†
Index Asset Allocation Fund	Target Today Fund†	Target 2045 Fund†
Moderate Balanced Fund	Target 2010 Fund†	Target 2050 Fund†
WealthBuilder Conservative Allocation Portfolio†	Target 2015 Fund†	Target 2055 Fund†
Money Market Funds
100% Treasury Money Market Fund	Heritage Money Market Fund†	National Tax-Free Money Market Fund
California Municipal Money Market Fund	Money Market Fund	Prime Investment Money Market Fund
Cash Investment Money Market Fund	Municipal Cash Management Money Market Fund	Treasury Plus Money Market Fund
Government Money Market Fund	Municipal Money Market Fund
Variable Trust Funds1
VT Discovery Fund†	VT Intrinsic Value Fund	VT Small Cap Growth Fund
VT Index Asset Allocation Fund	VT Omega Growth Fund	VT Small Cap Value Fund
VT International Equity Fund	VT Opportunity Fund†	VT Total Return Bond Fund

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Wells Fargo Advantage Money Market Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.

1. The Variable Trust Funds are generally available only through insurance company variable contracts.

† In this report, the Wells Fargo Advantage Discovery Fund^SM, Wells Fargo Advantage Endeavor Select Fund^SM, Wells Fargo Advantage Enterprise Fund^SM, Wells Fargo Advantage Opportunity Fund^SM, Wells Fargo Advantage Social Sustainability Fund^SM, Wells Fargo Advantage WealthBuilder Conservative Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Equity Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Moderate Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Tactical Equity Portfolio^SM, Wells Fargo Advantage Dow Jones Target Today Fund^SM, Wells Fargo Advantage Dow Jones Target 2010 Fund^SM, Wells Fargo Advantage Dow Jones Target 2015 Fund^SM, Wells Fargo Advantage Dow Jones Target 2020 Fund^SM, Wells Fargo Advantage Dow Jones Target 2025 Fund^SM, Wells Fargo Advantage Dow Jones Target 2030 Fund^SM, Wells Fargo Advantage Dow Jones Target 2035 Fund^SM, Wells Fargo Advantage Dow Jones Target 2040 Fund^SM, Wells Fargo Advantage Dow Jones Target 2045 Fund^SM, Wells Fargo Advantage Dow Jones Target 2050 Fund^SM, Wells Fargo Advantage Dow Jones Target 2055 Fund^SM, Wells Fargo Advantage Heritage Money Market Fund^SM, Wells Fargo Advantage VT Discovery Fund^SM, and Wells Fargo Advantage VT Opportunity Fund^SM are referred to as the Discovery Fund, Endeavor Select Fund, Enterprise Fund, Opportunity Fund, Social Sustainability Fund, WealthBuilder Conservative Allocation Portfolio, WealthBuilder Equity Portfolio, WealthBuilder Growth Allocation Portfolio, WealthBuilder Growth Balanced Portfolio, WealthBuilder Moderate Balanced Portfolio, WealthBuilder Tactical Equity Portfolio, Target Today Fund, Target 2010 Fund, Target 2015 Fund, Target 2020 Fund, Target 2025 Fund, Target 2030 Fund, Target 2035 Fund, Target 2040 Fund, Target 2045 Fund, Target 2050 Fund, Target 2055 Fund, Heritage Money Market Fund, VT Discovery Fund, and VT Opportunity Fund, respectively.

Not part of the annual report.

2 Wells Fargo Advantage VT Intrinsic Value Fund Letter to Shareholders

Karla M. Rabusch,

President

Wells Fargo Advantage Funds

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

Dear Valued Shareholder:

We’re pleased to offer you this annual report for the Wells Fargo Advantage VT Intrinsic Value Fund for the 12-month period that ended December 31, 2011.

For the full 12-month period, most of the major domestic equity indexes posted either modest gains or relatively mild losses. However, the market’s 12-month return figures mask the uneven path that it traced throughout the year as investors had to contend with a variety of global and domestic headwinds. Whatever the future holds, we continue to believe that most investors can benefit from adhering to a well-diversified investment strategy. Over the long-term, such a strategy may allow you to balance risks and opportunities as you pursue your financial goals in a dynamic market landscape.

The economic recovery gained traction as the year progressed.

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

2011 opened on a note of mounting optimism regarding the strength of the recovery, yet a batch of disappointing economic data in the spring and summer cast renewed doubts on the sustainability of the recovery. In September, it was reported that U.S. gross domestic product (GDP) grew at a mere 1.3% annual rate in the second quarter of 2011, following anemic growth at an annual rate of 0.4% in the first quarter. According to the December estimate, GDP growth accelerated to an annual rate of 1.8% in the third quarter, reigniting hopes for a sustainable recovery. Those hopes were buoyed by widespread anticipation of even stronger GDP growth in the fourth quarter. By the end of the 12-month period, few economists believed that the U.S. economy was in danger of sliding back into recession, although many expected a sluggish growth environment in 2012.

The struggling housing and labor markets slowed growth.

As has been the case throughout the recovery, the housing and labor markets continued to restrain economic momentum during 2011.

The beleaguered housing market has arguably exerted the biggest drag on growth. Despite intermittent signs of improvement, ongoing weakness in sales of both new and existing homes has put considerable downward pressure on prices. On the other hand, the labor market took a decided turn for the better in the latter half of the year: initial unemployment claims have eased in recent months, and the private sector has been steadily adding jobs. The pace of hiring, while not brisk, was sufficient to push the U.S. unemployment rate down to 8.5% as of December 2011—still well above its historical average, but at its lowest level since February 2009. Many observers expect the unemployment rate to decline further in 2012, which could act as a tailwind for consumer spending—widely viewed as one of the keys to long-term economic growth.

The Federal Reserve announced that it will keep rates low until 2013.

Consumers have already demonstrated some resilience in their spending—even in the face of higher energy costs. Oil prices skyrocketed in early 2011 before retreating later in the year, only to spike again during the fourth quarter. Yet “core” inflation, which excludes volatile energy and food prices, remained fairly benign throughout the year.

Letter to Shareholders Wells Fargo Advantage VT Intrinsic Value Fund 3

With inflation in check, the Federal Reserve (Fed) held its target range for the federal funds rate—a proxy for short-term interest rates—steady at 0% to 0.25%. Following its August 9 meeting, the Federal Open Market Committee (FOMC) issued a statement explaining that economic conditions were likely to warrant exceptionally low levels for the federal funds rate through at least mid-2013. In addition, the Fed carried out its second round of quantitative easing (QE2) in an effort to promote a more robust economic expansion. The stimulus program was completed as scheduled in June 2011. In September, the Fed launched yet another stimulus program—dubbed “Operation Twist”—that is designed to keep intermediate- and longer-term yields relatively low. The goal with keeping longer-term rates low is to encourage lending activity to spark business investments and home purchases, which, in turn, may provide support for a more sustainable economic recovery.

Market volatility was a dominant theme throughout most of 2011.

Despite pockets of turbulence sparked by the natural disasters in Japan and geopolitical turmoil in North Africa and the Middle East, the U.S. equity market performed very well from January through April of 2011. Some upbeat economic news, better-than-expected corporate profits, and investor enthusiasm about QE2 were among the catalysts for the market’s four-month advance.

In May and June, the market climate shifted to one of anxiety over the increasingly fragile state of the U.S. and global economies. As spring gave way to summer, investors not only worried that the U.S. might be on the brink of recession, they also feared that Europe’s sovereign debt problems could spiral out of control if a Greek default triggered financial contagion across the continent. In July and August, investor sentiment was further undermined by partisan wrangling over the federal debt ceiling and the Standard & Poor’s downgrade of the U.S. credit rating. The barrage of unsettling headlines led to heightened market volatility and sharply falling stock prices in the third quarter of 2011. Although volatility persisted into the fourth quarter, the market was able to rebound amid improved economic data and hopes for a resolution to the European crisis.

For the full 12-month period, the S&P 500 Index¹ of large-cap stocks achieved a total return of 2.1%. The Russell Midcap^® Index² and the Russell 2000^® Index³ of small-cap stocks lost 1.6% and 4.2%, respectively. International stocks fared worse than their U.S. counterparts, with the MSCI EAFE Index⁴ shedding 14.8%.

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 Russell Midcap^® Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 25% of the total market capitalization of the Russell 1000^® Index. You cannot invest directly in an index.

3. The Russell 2000^® Index measures the performance of the 2,000 smallest companies in the Russell 3000^® Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index. You cannot invest directly in an index.

4. The Morgan Stanley Capital International Europe, Australasia, and Far East (“MSCI EAFE”) Stock Index is an unmanaged group of securities widely regarded by investors to be representations of the stock markets of Europe, Australasia, and the Far East. You cannot invest directly in an index. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

4 Wells Fargo Advantage VT Intrinsic Value Fund Letter to Shareholders

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors.

Recent events have not altered our message to shareholders.

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors. Bear in mind that many investors who indiscriminately sold their equity investments during the severe market downturn of 2008 to 2009 missed out on the impressive two-year rally that followed. In our opinion, the lesson to be learned from these dramatic market events is that, for many investors, simply building and maintaining a well-diversified⁵ investment plan is the best long-term strategy.

To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Advantage Funds offers more than 110 mutual funds and other investments spanning a broad range of asset classes and investment styles. While 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.

Thank you for choosing to invest with Wells Fargo Advantage Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs. For current information about your fund investments, contact your investment professional, visit our website at www.wellsfargo.com/advantagefunds, or call us directly at 1-800-222-8222. We are available 24 hours a day, 7 days a week.

Sincerely,

Karla M. Rabusch

President

Wells Fargo Advantage Funds

5. Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Intrinsic Value Fund 5

INVESTMENT OBJECTIVE

The Fund seeks long-term capital appreciation.

ADVISER

Wells Fargo Funds Management, LLC

SUB-ADVISER

Metropolitan West Capital Management, LLC

PORTFOLIO MANAGERS

Gary Lisenbee

Jeffrey Peck

David Graham²

FUND INCEPTION

May 6, 1996

12 MONTH TOTAL RETURN AS OF DECEMBER 31, 2011
Class 2	(2.15)%
Russell 1000® Value Index1	0.39%

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

The Adviser has committed through July 18, 2013 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain other expenses at 1.00% for Class 2. The Fund’s gross and net expense ratios are 1.10% and 1.01%, respectively, for Class 2 shares. Without these reductions, the Fund’s returns would have been lower.

1. The Russell 1000^® Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. You cannot invest directly in an index.

2. Effective March 30, 2012, David Graham, retired from Metropolitan West Capital Management, LLC. The Fund will continue to be managed by Gary Lisenbee and Jeffrey Peck.

3. The chart compares the performance of the Wells Fargo Advantage VT Intrinsic Value Fund Class 2 for the most recent ten years of the Fund with the Russell 1000 Value Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

6 Wells Fargo Advantage VT Intrinsic Value Fund Performance Highlights (Unaudited)

MANAGER’S DISCUSSION

Fund highlights

n For the 12-month period that ended December 31, 2011, the Fund underperformed the Russell 1000^® Value Index, largely because of unfavorable security selection.

n Stock selection in the health care, energy, and financials sectors detracted from relative returns. An underweight in utilities subtracted additional value. Security selection in the consumer discretionary and information technology (IT) sectors aided relative results, as did an overweight in consumer staples and an underweight in financials.

n Amid market volatility, we adhered to our disciplined investment process. We continued to focus on individual companies rather than on broad, top-down macroeconomic or sector forecasts. To help manage risk, we maintained the Fund’s broad diversification by sector, industry, and position.

TEN LARGEST EQUITY HOLDINGS4 (AS OF DECEMBER 31, 2011)
Apple Incorporated	3.28%
International Business Machines Corporation	3.14%
Abbott Laboratories	3.10%
Home Depot Incorporated	3.04%
Diageo plc ADR	3.02%
Hess Corporation	3.01%
Time Warner Incorporated	2.85%
Intuit Incorported	2.84%
EMC Corporation	2.78%
Boeing Company	2.74%

Stock selection generally detracted from relative results during the 12-month period.

Notable detractors included holdings in the health care, energy, and financials sectors. An underweight in the top-performing utilities sector also subtracted from relative performance. (Sector weights are the result of our bottom-up stock selection process and do not represent tactical allocation decisions.)

Primary detractors across the portfolio included injectable pharmaceutical developer Hospira Incorporated, in the health care sector; integrated energy company Hess Corporation and oilfield services provider Weatherford International Limited in the energy sector; and Utah-based regional bank Zions Bancorporation in the financials sector. Conversely, security selection in the consumer discretionary and IT sectors aided relative results. An overweight to the relatively strong consumer staples sector and an underweight to the worst performer, financials, also contributed to relative returns. Top contributors within the Fund included luxury designer Ralph Lauren Corporation in consumer discretionary and technology solutions provider International Business Machines Corporation in the IT sector.

Many of the Fund’s non-U.S. holdings added value relative to the Russell 1000 Value Index over the past 12 months. We continue to maintain our global research perspective, which we believe allows us to better understand the companies in which we invest by providing context on their worldwide competitors, suppliers, and customers.

4. The ten largest equity holdings are calculated based on the value of the securities divided by total net assets of the Fund. Holdings are subject to change and may have changed since the date specified.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Intrinsic Value Fund 7

During the past 12 months, we added a few high-quality investments to the Fund’s holdings and divested a few positions according to our disciplined sale criteria.

SECTOR DISTRIBUTION⁵
(AS OF DECEMBER 31, 2011)

Consistent with our long-term investment perspective, portfolio turnover remained less than 30%, and the Fund’s positioning relative to the benchmark shifted moderately. The Fund’s underweight in energy increased significantly as we sold the Fund’s position in integrated energy company ConocoPhillips Company and swapped a holding in oil service provider Weatherford International for what we view as its higher-quality competitor, Schlumberger Limited. Within the health care sector, a new investment in health insurance benefit provider Cigna Corporation decreased the Fund’s underweight to this sector. Meanwhile, the Fund’s overweight in industrials increased modestly due to the purchase of package delivery company United Parcel Service Incorporated. Finally, the sale of retailer J. C. Penney Company, Incorporated, decreased the Fund’s overweight to the consumer discretionary sector. In all cases, trades were made based on fundamental, bottom-up research.

We have consistently noted that short-term stock market movements are influenced heavily by the media and investors’ focus on macroeconomic events, of which there are no shortage.

In 2011, there were many headlines vying for our attention, including (in no particular order): the earthquake and subsequent tsunami and nuclear accident in Japan, the uprising in the Middle East and North Africa, the U.S. debt-ceiling debate, the downgrade of the U.S. government’s credit rating by Standard & Poor’s, and the continuing European sovereign debt crisis. Some of the events will have longer-term economic implications, while many will not. Furthermore, with the presidential election this fall, the media will again have plenty to discuss. Of one thing we can be certain—the year 2012 will bring its share of unexpected events to which the market will react.

Consequently, we remain committed to seeking out high-quality businesses in great industries that trade at discounts to our estimate of intrinsic value and, in our view, possess catalysts to unlock that value within our multiyear investment horizon. We believe such businesses should provide exceptional opportunities for superior investment returns, regardless of what the markets may bring.

5. Sector distribution is subject to change and is calculated based on the total long-term investments of the Fund.

8 Wells Fargo Advantage VT Intrinsic Value Fund Performance Highlights (Unaudited)

AVERAGE ANNUAL TOTAL RETURN⁶ (%) (AS OF DECEMBER 31, 2011)

														Expense Ratios7
	Inception Date		6 Months*			1 Year			5 Year			10 Year		Gross		Net8
Class 2		05/06/1996		(8.60	)		(2.15	)		(3.20	)		1.86		1.10%		1.01%
Russell 1000® Value Index				(5.22	)		0.39			(2.64	)		3.89

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

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to foreign investment risk. Consult the Fund’s prospectus for additional information on these and other risks.

Please refer to the prospectus provided by your participating insurance company for detailed information describing the separate accounts for information regarding surrender charges, mortality and expense risk fees and other charges that may be assessed by the participating insurance companies.

6. Historical performance shown for Class 2 of the Fund prior to July 19, 2010 is based on the performance of the Fund’s predecessor, Wells Fargo Advantage VT Equity Income Fund.

7. Reflects the expense ratios as stated in the most recent prospectus.

8. The Adviser has committed through July 18, 2013 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain expenses, at 1.00% for Class 2. Without this cap, the Fund’s returns would have been lower.

Fund Expenses (Unaudited) Wells Fargo Advantage VT Intrinsic Value Fund 9

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution (12b-1) 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, 2011 to December 31, 2011.

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 separate account charges assessed by participating insurance companies. 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 separate account charges assessed by participating insurance companies were included, your costs would have been higher.

	Beginning Account Value 07-01-2011		Ending Account Value 12-31-2011		Expenses Paid During the Period1		Net Annual Expense Ratio
Class 2
Actual	$	1,000.00	$	913.99	$	4.82		1.00	%
Hypothetical (5% return before expenses)	$	1,000.00	$	1,020.16	$	5.09		1.00	%

1. Expenses paid is equal to the annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year (to reflect the one-half year period).

10 Wells Fargo Advantage VT Intrinsic Value Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Common Stocks: 96.24%
Consumer Discretionary: 10.74%
Media: 2.85%
Time Warner Incorporated«		36,500	$	1,319,110
Multiline Retail: 2.52%
Nordstrom Incorporated		23,450		1,165,700
Specialty Retail: 3.04%
Home Depot Incorporated		33,500		1,408,340
Textiles, Apparel & Luxury Goods: 2.33%
Ralph Lauren Corporation		7,800		1,077,024
Consumer Staples: 12.14%
Beverages: 3.02%
Diageo plc ADR		16,000		1,398,720
Food & Staples Retailing: 1.84%
Safeway Incorporated«		40,500		852,120
Food Products: 7.28%
H.J. Heinz Company«		21,300		1,151,052
The Hershey Company«		19,500		1,204,710
Unilever NV		29,500		1,013,915
				3,369,677
Energy: 6.61%
Energy Equipment & Services: 1.77%
Schlumberger Limited		12,000		819,720
Oil, Gas & Consumable Fuels: 4.84%
Hess Corporation		24,500		1,391,600
QEP Resources Incorporated		29,000		849,700
				2,241,300
Financials: 12.89%
Capital Markets: 6.45%
Charles Schwab Corporation		78,500		883,910
Franklin Resources Incorporated		9,500		912,570
Northern Trust Corporation«		30,000		1,189,800
				2,986,280
Commercial Banks: 4.39%
M&T Bank Corporation«		14,000		1,068,760
Zions Bancorporation«		59,000		960,520
				2,029,280
Diversified Financial Services: 2.05%
JPMorgan Chase & Company		28,500		947,625

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Intrinsic Value Fund 11

Security Name	Shares		Value
Health Care: 11.16%
Health Care Equipment & Supplies: 2.22%
Baxter International Incorporated		20,800	$	1,029,184
Health Care Providers & Services: 2.00%
CIGNA Corporation		22,000		924,000
Pharmaceuticals: 6.94%
Abbott Laboratories		25,500		1,433,865
Eli Lilly & Company		26,000		1,080,560
Hospira IncorporatedǠ		23,000		698,510
				3,212,935
Industrials: 12.96%
Aerospace & Defense: 6.39%
Boeing Company		17,300		1,268,955
Huntington Ingalls Industries IncorporatedǠ		16,000		500,480
Northrop Grumman Corporation«		20,300		1,187,144
				2,956,579
Air Freight & Logistics: 2.29%
United Parcel Service Incorporated Class B		14,500		1,061,255
Machinery: 4.28%
Deere & Company«		14,300		1,106,105
SPX Corporation		14,500		873,915
				1,980,020
Information Technology: 21.27%
Communications Equipment: 2.25%
QUALCOMM Incorporated		19,000		1,039,300
Computers & Peripherals: 6.06%
Apple Incorporated†		3,750		1,518,750
EMC Corporation†		59,700		1,285,938
				2,804,688
Internet Software & Services: 2.39%
eBay Incorporated†		36,500		1,107,045
IT Services: 3.14%
International Business Machines Corporation		7,900		1,452,652
Semiconductors & Semiconductor Equipment: 2.01%
Texas Instruments Incorporated		32,000		931,520
Software: 5.42%
Intuit Incorporated		25,000		1,314,750
Oracle Corporation		46,500		1,192,725
				2,507,475

12 Wells Fargo Advantage VT Intrinsic Value Fund Portfolio of Investments—December 31, 2011

Security Name				Shares		Value
Materials: 1.99%
Chemicals: 1.99%
Dow Chemical Company					32,000	$	920,320
Telecommunication Services: 2.39%
Wireless Telecommunication Services: 2.39%
Vodafone Group plc ADR					39,500		1,107,184
Utilities: 4.09%
Electric Utilities: 2.63%
Nextera Energy Incorporated					20,000		1,217,600
Gas Utilities: 1.46%
Questar Corporation					34,000		675,242
Total Common Stocks (Cost $39,900,513)							44,541,895
				Principal
Other: 0.05%
Gryphon Funding Limited, Pass-Through Entity(v)(i)(a)				$	32,930		9,220
VFNC Corporation, Pass-Through Entity, 0.30%(v)(i)(a)±144A					37,484		16,118
Total Other (Cost $12,115)							25,338
	Yield			Shares
Short-Term Investments: 27.63%
Investment Companies: 27.63%
Wells Fargo Advantage Cash Investment Money Market Fund, Institutional Class(l)(u)		0.04	%		1,443,207		1,443,207
Wells Fargo Securities Lending Cash Investments LLC(v)(l)(u)(r)		0.12			11,344,595		11,344,595
Total Short-Term Investments (Cost $12,787,802)							12,787,802

Total Investments in Securities
(Cost $52,700,430)*	123.92	%		57,355,035
Other Assets and Liabilities, Net	(23.92	)		(11,070,490	)
Total Net Assets	100.00	%	$	46,284,545

« All or a portion of this security is on loan.

† Non-income earning security.

(v) Security represents investment of cash collateral received from securities on loan.

(i) Illiquid security for which the designation as illiquid is unaudited.

(a) Security is fair valued by the Management Valuation Team, and in certain instances by the Board of Trustees, in accordance with procedures approved by the Board of Trustees.

± Variable rate investment.

144A Security that may be resold to “qualified institutional buyers” under Rule 144A or security offered pursuant to Section 4(2) of the Securities Act of 1933, as amended.

(l) Investment in an affiliate.

(u) Rate shown is the 7-day annualized yield at period end.

(r) The investment company is exempt from registration under Section 3(c)(7) of the 1940 Act.

* Cost for federal income tax purposes is $52,764,924 and net unrealized appreciation (depreciation) consists of:

Gross unrealized appreciation	$	6,668,147
Gross unrealized depreciation		(2,078,036	)
Net unrealized appreciation	$	4,590,111

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

Statement of Assets and Liabilities—December 31, 2011 Wells Fargo Advantage VT Intrinsic Value Fund 13

Assets
Investments
In unaffiliated securities (including securities on loan), at value	$	44,567,233
In affiliated securities, at value		12,787,802
Total investments, at value (see cost below)		57,355,035
Receivable for investments sold		276,441
Receivable for dividends		102,469
Receivable for securities lending income		865
Prepaid expenses and other assets		840
Total assets		57,735,650
Liabilities
Payable for Fund shares redeemed		28,022
Payable upon receipt of securities loaned		11,356,710
Advisory fee payable		1,320
Distribution fees payable		10,466
Due to other related parties		5,441
Accrued expenses and other liabilities		49,146
Total liabilities		11,451,105
Total net assets	$	46,284,545
NET ASSETS CONSIST OF
Paid-in capital	$	51,823,742
Undistributed net investment income		637,451
Accumulated net realized losses on investments		(10,831,253	)
Net unrealized gains on investments		4,654,605
Total net assets	$	46,284,545
COMPUTATION OF NET ASSET VALUE PER SHARE1
Net assets – Class 2	$	46,284,545
Shares outstanding – Class 2		3,726,328
Net asset value per share – Class 2		$12.42
Total investments, at cost	$	52,700,430
Securities on loan, at value	$	11,024,463

1. The Fund has an unlimited number of authorized shares.

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

14 Wells Fargo Advantage VT Intrinsic Value Fund Statement of Operations—Year Ended December 31, 2011

Investment income
Dividends*	$	1,159,169
Securities lending income, net		20,915
Income from affiliated securities		2,109
Total investment income		1,182,193
Expenses
Advisory fee		299,601
Administration fees
Fund level		27,236
Class 2		43,578
Distribution fees
Class 2		136,182
Custody and accounting fees		12,100
Professional fees		39,953
Shareholder report expenses		57,265
Trustees’ fees and expenses		14,279
Other fees and expenses		5,291
Total expenses		635,485
Less: Fee waivers and/or expense reimbursements		(90,757	)
Net expenses		544,728
Net investment income		637,465
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains on investments		1,243,561
Net change in unrealized gains (losses) on investments		(2,810,230	)
Net realized and unrealized gains (losses) on investments		(1,566,669	)
Net decrease in net assets resulting from operations	$	(929,204	)
* Net of foreign dividend withholding taxes of		$15,697

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

Statements of Changes in Net Assets Wells Fargo Advantage VT Intrinsic Value Fund 15

	Year Ended December 31, 2011						Year Ended December 31, 20101
Operations
Net investment income				$	637,465					$	682,537
Net realized gains (losses) on investments					1,243,561						(1,767,637	)
Net change in unrealized gains (losses) on investments					(2,810,230	)					9,056,350
Net increase (decrease) in net assets resulting from operations					(929,204	)					7,971,250
Distributions to shareholders from
Net investment income – Class 2					(287,742	)					(413,858	)2
	Shares						Shares
Capital share transactions
Proceeds from shares sold – Class 2		404,649			5,353,142			4,130,068	2		45,177,175	2
Reinvestment of distributions – Class 2		21,619			287,742			36,555	2		413,858	2
Payment for shares redeemed – Class 2		(1,311,539	)		(16,971,260	)		(5,578,424	)2		(61,920,948	)2
Net asset value of shares issued in acquisitions – Class 2		0			0			1,211,148			13,163,306
Net decrease in net assets resulting from capital share transactions					(11,330,376	)					(3,166,609	)
Total increase (decrease) in net assets					(12,547,322	)					4,390,783
Net assets
Beginning of period					58,831,867						54,441,084
End of period				$	46,284,545					$	58,831,867
Undistributed net investment income				$	637,451					$	285,415

1. After the close of business on July 16, 2010, the Fund acquired the net assets of Wells Fargo Advantage VT Equity Income Fund and Wells Fargo Advantage VT C&B Large Cap Value Fund. Wells Fargo Advantage VT Equity Income Fund became the accounting and performance survivor in the transaction. The information for the period prior to July 19, 2010 is that of Wells Fargo Advantage VT Equity Income Fund.

2. After the close of business on July 16, 2010, existing shares of Wells Fargo Advantage VT Equity Income Fund were renamed Class 2 shares.

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

16 Wells Fargo Advantage VT Intrinsic Value Fund Financial Highlights

(For a share outstanding throughout each period)

	Year Ended December 31,
Class 22	2011			20101			20091			20081			20071
Net asset value, beginning of period		$12.76			$11.31			$9.88			$18.74			$19.75
Net investment income		0.18			0.16			0.19			0.30			0.30
Net realized and unrealized gains (losses) on investments		(0.45	)		1.39			1.44			(6.46	)		0.33
Total from investment operations		(0.27	)		1.55			1.63			(6.16	)		0.63
Distributions to shareholders from
Net investment income		(0.07	)		(0.10	)		(0.20	)		(0.28	)		(0.30	)
Net realized gains		0.00			0.00			0.00			(2.42	)		(1.34	)
Total distributions to shareholders		(0.07	)		(0.10	)		(0.20	)		(2.70	)		(1.64	)
Net asset value, end of period	$	12.42		$	12.76		$	11.31		$	9.88		$	18.74
Total return		(2.15	)%		13.83	%		16.86	%		(36.47	)%		2.80	%
Ratios to average net assets (annualized)
Gross expenses		1.17	%		1.10	%		1.18	%		1.15	%		1.05	%
Net expenses		1.00	%		1.00	%		1.00	%		1.00	%		1.00	%
Net investment income		1.17	%		1.29	%		1.94	%		1.95	%		1.49	%
Supplemental data
Portfolio turnover rate		26	%		72	%		16	%		9	%		20	%
Net assets, end of period (000’s omitted)		$46,285			$58,832			$54,441			$43,452			$94,097

1. After the close of business on July 16, 2010, the Fund acquired the net assets of Wells Fargo Advantage VT Equity Income Fund and Wells Fargo Advantage VT C&B Large Cap Value Fund. Wells Fargo Advantage VT Equity Income Fund became the accounting and performance survivor in the transaction. The information for the periods prior to July 19, 2010 is that of Wells Fargo Advantage VT Equity Income Fund.

2. After the close of business on July 16, 2010, existing shares of Wells Fargo Advantage VT Equity Income Fund were renamed Class 2 shares.

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

Notes to Financial Statements Wells Fargo Advantage VT Intrinsic Value Fund 17

1. ORGANIZATION

Wells Fargo Variable 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”). These financial statements report on Wells Fargo Advantage VT Intrinsic Value 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

Investments in equity securities are valued each business day as of the close of regular trading on the New York Stock Exchange, which is usually 4:00 p.m. (Eastern Time). Securities which are traded on a national or foreign securities exchange are valued at the last reported sales price, except that securities listed on The Nasdaq Stock Market, Inc. (“Nasdaq”) are valued at the Nasdaq Official Closing Price (“NOCP”), and if no NOCP is available, then at the last reported sales price. If no sales price is shown on the Nasdaq, the bid price will be used. In the absence of any sale of securities listed on the Nasdaq, and in the case of other securities (including U.S. Government obligations, but excluding debt securities maturing in 60 days or less), the price will be deemed “stale” and the valuations will be determined in accordance with the Fund’s Fair Value Procedures.

Fixed income securities with maturities exceeding 60 days are valued based on available evaluated prices received from an independent pricing service approved by the Board of Trustees which may utilize both transaction data and market information such as yield, prices of securities of comparable quality, coupon rate, maturity, type of issue, trading characteristics and other market data. If valuations are not available from the pricing service or values received are deemed not representative of market value, values will be obtained from a third party broker-dealer or determined based on the Fund’s Fair Value Procedures.

Debt securities of sufficient credit quality with original maturities of 60 days or less generally are valued at amortized cost which approximates fair value. The amortized cost method involves valuing a security at its cost, plus accretion of discount or minus amortization of premium over the period until maturity.

Investments in open-end mutual funds and non-registered investment companies are generally valued at net asset value.

Investments which are not valued using any of the methods discussed above, are valued at their fair value, as determined by procedures established in good faith and approved by the Board of Trustees.

Security loans

The Fund may lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. The Fund continues to receive interest or dividends on the securities loaned. The Fund receives collateral in the form of cash or securities with a value at least equal to the value of the securities on loan. The value of the loaned securities is determined at the close of each business day and any additional required collateral is delivered to the Fund on the next business day. In a securities lending transaction, the net asset value of the Fund will be affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of the instrument in which collateral is invested. The amount of securities lending activity undertaken by the Fund fluctuates from time to time. In the event of default or bankruptcy by the borrower, the Fund may be prevented from recovering the loaned securities or gaining access to the collateral or may experience delays or costs in doing so. In addition, the investment of any cash collateral received may lose all or part of its value. The Fund has the right under the lending agreement to recover the securities from the borrower on demand.

The Fund lends its securities through an unaffiliated securities lending agent. Cash collateral received in connection with its securities lending transactions is invested in Wells Fargo Securities Lending Cash Investments, LLC (the “Cash Collateral Fund”). The Cash Collateral Fund is exempt from registration under Section 3(c)(7) of the 1940 Act and is managed by

18 Wells Fargo Advantage VT Intrinsic Value Fund Notes to Financial Statements

Wells Fargo Funds Management LLC (“Funds Management”) and is sub-advised by Wells Capital Management Incorporated (“Wells Capital Management”). Funds Management receives an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Cash Collateral Fund increase. All of the fees received by Funds Management are paid to Wells Capital Management for its services as sub-adviser. The Cash Collateral Fund seeks to provide a positive return compared to the daily Fed Funds Open rate by investing in high-quality, U.S. dollar-denominated short-term money market instruments. Cash Collateral Fund investments are fair valued based upon the amortized cost valuation technique. Income earned from investment in the Cash Collateral Fund is included in securities lending income on the Statement of Operations.

For Wells Fargo Advantage Funds that participated in securities lending activity prior to February 13, 2009, certain structured investment vehicles purchased in a joint account by the former securities lending agent defaulted or were impaired. Certain of the Wells Fargo Advantage Funds still hold ownership interest in these structured investment vehicles, which have since been restructured as pass-through securities. If the Fund holds an ownership interest in such pass-through securities, information regarding this ownership interest can be found in the Portfolio of Investments under the category “Other”.

Security transactions and income recognition

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

Dividend income is recognized on the ex-dividend date. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.

Distributions to shareholders

Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-dividend date. Such distributions are determined in conformity with income tax regulations, which may differ from generally accepted accounting principles.

The timing and character of distributions made during the period from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. To the extent that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment. Temporary differences do not require reclassifications. At December 31, 2011, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statement of Assets and Liabilities:

Undistributed Net Investment Income	Accumulated Net Realized Losses on Investments
$2,313	$(2,313)

Federal and other taxes

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

The 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.

Under the recently enacted Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years which began after December 22, 2010 for an unlimited period. However, any losses incurred are required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

As of December 31, 2011, the Fund had net capital loss carryforwards, which are available to offset future net realized capital gains, in the amount of $10,766,757 with $2,708,874 expiring in 2015, $4,073,329 expiring in 2016 and $3,984,554 expiring in 2017.

Notes to Financial Statements Wells Fargo Advantage VT Intrinsic Value Fund 19

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 significant 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:

n Level 1 – quoted prices in active markets for identical securities

n Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

n Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

As of December 31. 2011, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:

Investments in Securities	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity securities
Common stocks	$	44,541,895	$	0	$	0	$	44,541,895
Other		0		0		25,338		25,338
Short-term investments
Investment companies		1,443,207		11,344,595		0		12,787,802
	$	45,985,102	$	11,344,595	$	25,338	$	57,355,035

Further details on the major security types listed above can be found in the Portfolio of Investments.

Transfers in and transfers out are recognized at the end of the reporting period. For the year ended December 31, 2011, the Fund did not have any significant transfers into/out of Level 1 and Level 2.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Other
Balance as of December 31, 2010	$	41,745
Accrued discounts (premiums)		0
Realized gains (losses)		0
Change in unrealized gains (losses)		(2,244	)
Purchases		0
Sales		(14,163	)
Transfers into Level 3		0
Transfers out of Level 3		0
Balance as of December 31, 2011	$	25,338
Change in unrealized gains (losses) relating to securities still held at December 31, 2011	$	(9,029	)

4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES

Advisory fee

The Trust has entered into an advisory contract with Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”). The adviser is responsible for implementing investment policies and guidelines and for supervising the sub-adviser, who is responsible for day-to-day portfolio management of the Fund.

20 Wells Fargo Advantage VT Intrinsic Value Fund Notes to Financial Statements

Pursuant to the contract, Funds Management is entitled to receive an annual advisory fee starting at 0.55% and declining to 0.40% as the average daily net assets of the Fund increase. For the year ended December 31, 2011, the advisory fee was equivalent to an annual rate of 0.55% of the Fund’s average daily net assets.

Funds Management may retain the services of certain sub-advisers to provide daily portfolio management to the Fund. The fees related to sub-advisory services are borne directly by Funds Management and do not increase the overall fees paid by the Fund. Metropolitan West Capital Management, LLC, an affiliate of Funds Management, is the sub-adviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.35% and declining to 0.25% as the average daily net assets of the Fund increase.

Administration and transfer agent fees

The Trust has entered into an administration agreement with Funds Management. Under this agreement, for providing administrative services, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers, Funds Management is entitled to receive from the Fund an annual fund level administration fee starting at 0.05% and declining to 0.03% as the average daily net assets of the Fund increase and for Class 2 shares, a class level administration fee of 0.08% of its average daily net assets.

Funds Management has contractually waived and/or reimbursed advisory and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. Waiver of fees and/or reimbursement of expenses by Funds Management were made first from fund level expenses on a proportionate basis and then from class specific expenses.

Distribution fees

The Trust has adopted a Distribution Plan for Class 2 shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are charged to Class 2 shares and paid to Wells Fargo Funds Distributor, LLC, the principal underwriter, at an annual rate of 0.25% of its average daily net assets.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. Government obligations (if any) and short-term securities (securities with maturities of one year or less at purchase date), for the year ended December 31, 2011 were $13,833,150 and $23,463,792, respectively.

6. ACQUISITIONS

After the close of business on July 16, 2010, the Fund acquired the net assets of Wells Fargo Advantage VT Equity Income Fund and Wells Fargo Advantage VT C&B Large Cap Value Fund. The purpose of the transactions was to combine three funds with similar investment objectives and strategies. The acquisitions were accomplished by a tax-free exchange of all of the shares of Wells Fargo Advantage VT Equity Income Fund and Wells Fargo Advantage VT C&B Large Cap Value Fund. Existing shareholders of Wells Fargo Advantage VT Equity Income Fund and Wells Fargo Advantage VT C&B Large Cap Value Fund received Class 2 shares of the Fund in the reorganizations. The Fund was newly created to receive the assets and shares of Wells Fargo Advantage VT Equity Income Fund and Wells Fargo Advantage VT C&B Large Cap Value Fund. Wells Fargo Advantage VT Equity Income Fund became the accounting and performance survivor in the reorganizations. The investment portfolio of Wells Fargo Advantage VT Equity Income Fund and Wells Fargo Advantage VT C&B Large Cap Value Fund with fair values of $40,288,244 and $13,109,804, respectively, and identified costs of $40,252,417 and $13,443,290, respectively, at July 16, 2010, 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 investments received from Wells Fargo Advantage VT Equity Income Fund and Wells Fargo Advantage VT C&B Large Cap Value Fund 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 and losses acquired, exchange ratio and number of shares issued were as follows:

Acquired Fund	Value of Net Assets Acquired		Unrealized Gains (Losses)			Exchange Ratio		Number of Shares Issued
Wells Fargo Advantage VT Equity Income Fund	$	40,386,838	$	35,827			1.00		3,715,958	Class 2
Wells Fargo Advantage VT C&B Large Cap Value		13,163,306		(333,486	)		0.79		1,211,148	Class 2

Notes to Financial Statements Wells Fargo Advantage VT Intrinsic Value Fund 21

The aggregate net assets of the Fund immediately after the acquisitions were $53,550,144.

Assuming the acquisitions had been completed January 1, 2010, the beginning of the annual reporting period for the Fund, the pro forma results of operations for the year ended December 31, 2010 would have been

Net investment income	$	772,583
Net realized and unrealized gains (losses) on investments	$	7,077,595
Net increase in net assets resulting from operations	$	7,850,178

7. BANK BORROWINGS

The Trust and Wells Fargo Funds Trust (excluding the money market funds) are parties to a $150,000,000 revolving credit agreement with State Street Bank and Trust Company, 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, under the credit agreement, the Fund pays an annual commitment fee equal to 0.10% of the unused balance, which is allocated pro rata. Prior to September 6, 2011, the revolving credit agreement was for $125,000,000 and the annual commitment fee paid by the Fund was 0.125% of the unused balance. For the year ended December 31, 2011, the Fund paid $114 in commitment fees.

For the year ended December 31, 2011, there were no borrowings by the Fund under the agreement

8. DISTRIBUTIONS TO SHAREHOLDERS

The tax character of distributions paid was $287,742 and $413,858 of ordinary income for the years ended December 31, 2011 and December 31, 2010, respectively.

As of December 31, 2011, the components of distributable earnings on a tax basis were as follows:

Undistributed Ordinary Income	Unrealized Gains		Capital Loss Carryforward
$637,449	$	4,590,111	$	(10,766,757	)

9. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and directors are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Trust may enter into contracts with service providers that contain a variety of indemnification clauses. The Trust’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.

10. NEW ACCOUNTING PRONOUNCEMENTS

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. ASU No. 2011-04 amends FASB ASC Topic 820, Fair Value Measurements and Disclosures, to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP. The ASU is effective prospectively for interim and annual periods beginning after December 15, 2011. Management expects that adoption of the ASU will result in additional disclosures in the financial statements, as applicable.

In April 2011, FASB issued ASU No. 2011-03 “Reconsideration of Effective Control for Repurchase Agreements”. ASU No. 2011-03 amends FASB ASC Topic 860, Transfers and Servicing, specifically the criteria required to determine whether a repurchase agreement (repo) and similar agreements should be accounted for as sales of financial assets or secured borrowings with commitments. ASU No. 2011-03 changes the assessment of effective control by focusing on the transferor’s contractual rights and obligations and removing the criterion to assess its ability to exercise those rights or honor those obligations. This could result in changes to the way entities account for certain transactions including repurchase agreements, mortgage dollar rolls and reverse repurchase agreements. The ASU will become effective on a prospective basis for new transfers and modifications to existing transactions as of the beginning of the first interim or annual period beginning on or after December 15, 2011. Management has evaluated the impact of adopting the ASU and expects no significant changes.

22 Wells Fargo Advantage VT Intrinsic Value Fund Report of Independent Registered Public Accounting Firm

BOARD OF TRUSTEES AND SHAREHOLDERS OF WELLS FARGO VARIABLE TRUST:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the Wells Fargo Advantage VT Intrinsic Value Fund (the “Fund”), one of the funds constituting the Wells Fargo Variable Trust, as of December 31, 2011, and the related statement of operations for the year then ended, statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2011, by correspondence with custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Wells Fargo Advantage VT Intrinsic Value Fund as of December 31, 2011, the results of its operations for the year then ended, changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

February 24, 2012

Other Information (Unaudited) Wells Fargo Advantage VT Intrinsic Value Fund 23

TAX INFORMATION

For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 100% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended December 31, 2011

PROXY VOTING INFORMATION

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our Web site at www.wellsfargo.com/advantagefunds, or visiting the SEC Web site at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the Fund’s Web site at www.wellsfargo.com/advantagefunds or by visiting the SEC Web site at www.sec.gov.

PORTFOLIO HOLDINGS INFORMATION

The complete portfolio holdings for the Fund are publicly available on the Fund’s Web site (www.wellsfargo.com/advantagefunds) on a monthly, 30-day or more delayed basis. In addition, top ten holdings information for the Fund is publicly available on the Fund’s Web site on a monthly, seven-day or more delayed basis. The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q, which is available without charge by visiting the SEC Web site at www.sec.gov. In addition, the Fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and at regional offices in New York City, at 233 Broadway, and in Chicago, at 175 West Jackson Boulevard, Suite 900. Information about the Public Reference Room may be obtained by calling 1-800-SEC-0330.

24 Wells Fargo Advantage VT Intrinsic Value Fund Other Information (Unaudited)

BOARD OF TRUSTEES

The following table provides basic information about the Board of Trustees (the “Trustees”) of the Trust and Officers of the Trust. This table should be read in conjunction with the Prospectus and the Statement of Additional Information¹ of the Fund. Each of the Trustees and Officers listed below acts in identical capacities for the Wells Fargo Advantage family of funds, which consists of 138 funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). All of the Trustees are also Members of the Audit and Governance Committees of each Trust in the Fund Complex. The mailing address of each Trustee and Officer is 525 Market Street, 12th Floor, San Francisco, CA 94105. 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	Other Directorships During Past Five Years
Peter G. Gordon (Born 1942)	Trustee, since 1998; Chairman, since 2005 (Lead Trustee since 2001)	Co-Founder, Retired Chairman, President and CEO of Crystal Geyser Water Company. Trustee Emeritus, Colby College	Asset Allocation Trust
Isaiah Harris, Jr. (Born 1952)	Trustee, since 2009	Retired. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Mr. Harris is a certified public accountant.	CIGNA Corporation; Deluxe Corporation; Asset Allocation Trust
Judith M. Johnson (Born 1949)	Trustee, since 2008	Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.	Asset Allocation Trust
Leroy Keith, Jr. (Born 1939)	Trustee, since 2010	Chairman, Bloc Global Services (development and construction). Trustee of the Evergreen Funds from 1983 to 2010. Former Managing Director, Almanac Capital Management (commodities firm), former Partner, Stonington Partners, Inc. (private equity fund), former Director, Obagi Medical Products Co. and former Director, Lincoln Educational Services.	Trustee, Virtus Fund Complex (consisting of 40 portfolios as of 12/31/11); Asset Allocation Trust
David F. Larcker (Born 1950)	Trustee, since 2009	James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of Corporate Governance Research Program and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.	Asset Allocation Trust
Olivia S. Mitchell (Born 1953)	Trustee, since 2006	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.	Asset Allocation Trust

Other Information (Unaudited) Wells Fargo Advantage VT Intrinsic Value Fund 25

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years	Other Directorships During Past Five Years
Timothy J. Penny (Born 1951)	Trustee, since 1996	President and CEO of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007 and Senior Fellow at the Humphrey Institute Policy Forum at the University of Minnesota since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.	Asset Allocation Trust
Michael S. Scofield (Born 1943)	Trustee, since 2010	Served on the Investment Company Institute’s Board of Governors and Executive Committee from 2008-2011 as well the Governing Council of the Independent Directors Council from 2006-2011 and the Independent Directors Council Executive Committee from 2008-2011. Chairman of the IDC from 2008-2010. Institutional Investor (Fund Directions) Trustee of Year in 2007. Trustee of the Evergreen Funds (and its predecessors) from 1984 to 2010. Chairman of the Evergreen Funds from 2000-2010. Former Trustee of the Mentor Funds. Retired Attorney, Law Offices of Michael S. Scofield and former Director and Chairman, Branded Media Corporation (multi-media branding company).	Asset Allocation Trust
Donald C. Willeke (Born 1940)	Trustee, since 1996	Principal of the law firm of Willeke & Daniels. General Counsel of the Minneapolis Employees Retirement Fund from 1984 until its consolidation into the Minnesota Public Employees Retirement Association on June 30, 2010. Director and Vice Chair of The Free Trust (non-profit corporation). Director of the American Chestnut Foundation (non-profit corporation).	Asset Allocation Trust

Officers

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years
Karla M. Rabusch (Born 1959)	President, since 2003	Executive Vice President of Wells Fargo Bank, N.A. and President of Wells Fargo Funds Management, LLC since 2003. Senior Vice President and Chief Administrative Officer of Wells Fargo Funds Management, LLC from 2001 to 2003.
C. David Messman (Born 1960)	Secretary, since 2000; Chief Legal Counsel, since 2003	Senior Vice President and Secretary of Wells Fargo Funds Management, LLC since 2001. Vice President and Managing Senior Counsel of Wells Fargo Bank, N.A. since 1996.
Kasey Phillips (Born 1970)	Treasurer, since 2009	Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2006 to 2010. Treasurer of the Evergreen Funds from 2005 to 2010.
David Berardi (Born 1975)	Assistant Treasurer, since 2009	Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Assistant Vice President of Evergreen Investment Services, Inc. from 2004 to 2008. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.
Jeremy DePalma (Born 1974)	Assistant Treasurer, since 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. Vice President, Evergreen Investment Services, Inc. from 2004 to 2007. Head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.
Debra Ann Early (Born 1964)	Chief Compliance Officer, since 2007	Chief Compliance Officer of Wells Fargo Funds Management, LLC since 2007. Chief Compliance Officer of Parnassus Investments from 2005 to 2007. Chief Financial Officer of Parnassus Investments from 2004 to 2007 and Senior Audit Manager of PricewaterhouseCoopers LLP from 1998 to 2004.

1. 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 Web site at www.wellsfargo.com/advantagefunds.

26 Wells Fargo Advantage VT Intrinsic Value Fund List of Abbreviations

The following is a list of common abbreviations for terms and entities which may have appeared in this report.

ACB —  Agricultural Credit Bank

ADR —  American Depository Receipt

ADS —  American Depository Shares

AGC-ICC —  Assured Guaranty Corporation - Insured Custody Certificates

AGM —  Assured Guaranty Municipal

AMBAC —  American Municipal Bond Assurance Corporation

AMT —  Alternative Minimum Tax

AUD —  Australian Dollar

BAN —  Bond Anticipation Notes

BHAC —  Berkshire Hathaway Assurance Corporation

BRL —  Brazil Real

CAB —  Capital Appreciation Bond

CAD —  Canadian Dollar

CCAB —  Convertible Capital Appreciation Bond

CDA —  Community Development Authority

CDO —  Collateralized Debt Obligation

CHF —  Swiss Franc

COP —  Certificate of Participation

CR —  Custody Receipts

DKK —  Danish Krone

DRIVER —  Derivative Inverse Tax-Exempt Receipts

DW&P —  Department of Water & Power

DWR —  Department of Water Resources

ECFA —  Educational & Cultural Facilities Authority

EDA —  Economic Development Authority

EDFA —  Economic Development Finance Authority

ETF —  Exchange-Traded Fund

EUR —  Euro

FFCB —  Federal Farm Credit Bank

FGIC —  Financial Guaranty Insurance Corporation

FHA —  Federal Housing Authority

FHLB —  Federal Home Loan Bank

FHLMC —  Federal Home Loan Mortgage Corporation

FNMA —  Federal National Mortgage Association

FSA —  Farm Service Agency

GBP —  Great British Pound

GDR —  Global Depository Receipt

GNMA —  Government National Mortgage Association

GO —  General Obligation

HCFR —  Healthcare Facilities Revenue

HEFA —  Health & Educational Facilities Authority

HEFAR —  Higher Education Facilities Authority Revenue

HFA —  Housing Finance Authority

HFFA —  Health Facilities Financing Authority

HKD —  Hong Kong Dollar

HUF —  Hungarian Forint

IBC —  Insured Bond Certificate

IDA —  Industrial Development Authority

IDAG —  Industrial Development Agency

IDR —  Industrial Development Revenue

IEP —  Irish Pound

JPY —  Japanese Yen

KRW —  Republic of Korea Won

LIBOR —  London Interbank Offered Rate

LLC —  Limited Liability Company

LLP —  Limited Liability Partnership

LOC —  Letter of Credit

LP —  Limited Partnership

MBIA —  Municipal Bond Insurance Association

MFHR —  Multi-Family Housing Revenue

MTN —  Medium Term Note

MUD —  Municipal Utility District

MXN —  Mexican Peso

MYR —  Malaysian Ringgit

NATL-RE —  National Public Finance Guarantee Corporation

NOK —  Norwegian Krone

NZD —  New Zealand Dollar

PCFA —  Pollution Control Finance Authority

PCR —  Pollution Control Revenue

PFA —  Public Finance Authority

PFFA —  Public Facilities Financing Authority

PFOTER —  Puttable Floating Option Tax-Exempt Receipts

plc —  Public Limited Company

PLN —  Polish Zloty

PUTTER —  Puttable Tax-Exempt Receipts

R&D —  Research & Development

RDA —  Redevelopment Authority

RDFA —  Redevelopment Finance Authority

REIT —  Real Estate Investment Trust

ROC —  Reset Option Certificates

SAVRS —  Select Auction Variable Rate Securities

SBA —  Small Business Authority

SEK —  Swedish Krona

SFHR —  Single Family Housing Revenue

SFMR —  Single Family Mortgage Revenue

SGD —  Singapore Dollar

SKK —  Slovakian Koruna

SPDR —  Standard & Poor’s Depositary Receipts

TAN —  Tax Anticipation Notes

TBA —  To Be Announced

TIPS —  Treasury Inflation-Protected Securities

TRAN —  Tax Revenue Anticipation Notes

TCR —  Transferable Custody Receipts

TRY —  Turkish Lira

TTFA —  Transportation Trust Fund Authority

TVA —  Tennessee Valley Authority

XLCA —  XL Capital Assurance

ZAR —  South African Rand

FOR MORE INFORMATION

More information about Wells Fargo Advantage Funds is available free upon request. To obtain literature, please write, e-mail, visit the Fund’s Web site, or call:

Wells Fargo Advantage Funds

P.O. Box 8266

Boston, MA 02266-8266

E-mail: wfaf@wellsfargo.com

Web site: www.wellsfargo.com/advantagefunds

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

This report and the financial statements contained herein are submitted for the general information of the shareholders of Wells Fargo Advantage Funds. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. For a prospectus containing more complete information, including charges and expenses, call 1-800-222-8222 or visit the Fund’s Web site at www.wellsfargo.com/advantagefunds. Please consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. This and other information about Wells Fargo Advantage Funds can be found in the current prospectus. Read the prospectus carefully before you invest or send money.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

© 2012 Wells Fargo Funds Management, LLC. All rights reserved.

207574 02-12

AVT4/AR150 12-11

Wells Fargo Advantage

VT Omega Growth Fund

Annual Report

December 31, 2011

Reduce clutter. Save trees.

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

Contents

Letter to Shareholders	2
Performance Highlights	5
Fund Expenses	10
Portfolio of Investments	11
Financial Statements
Statement of Assets and Liabilities	15
Statement of Operations	16
Statements of Changes in Net Assets	17
Financial Highlights	18
Notes to Financial Statements	20
Report of Independent Registered Public Accounting Firm	26
Other Information	27
List of Abbreviations	30

The views expressed and any forward-looking statements are as of December 31, 2011, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Funds Management, LLC. Discussions of individual securities, or the markets generally, or any Wells Fargo Advantage Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements; the views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Funds Management, LLC, disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

WELLS FARGO INVESTMENT HISTORY

1932	Keystone creates one of the first mutual fund families.
1971	Wells Fargo & Company introduces one of the first institutional index funds.
1978	Wells Fargo applies Markowitz and Sharpe’s research on Modern Portfolio Theory to introduce one of the industry’s first Tactical Asset Allocation (TAA) models in institutional separately managed accounts.
1984	Wells Fargo Stagecoach Funds launches its first asset allocation fund.
1989	The Tactical Asset Allocation (TAA) Model is first applied to Wells Fargo’s asset allocation mutual funds.
1994	Wells Fargo introduces the LifePath Funds, one of the first suites of target date funds (now the Wells Fargo Advantage Dow Jones Target Date FundsSM ).
1996	Evergreen Investments and Keystone Funds merge.
1997	Wells Fargo launches Wells Fargo Advantage WealthBuilder PortfoliosSM, a fund-of-funds suite of products that includes the use of quantitative models to shift assets among investment styles.
1999	Norwest Advantage Funds and Stagecoach Funds are reorganized into Wells Fargo Funds after the merger of Norwest and Wells Fargo.
2002	Evergreen Retail and Evergreen Institutional companies form the umbrella asset management company, Evergreen Investments.
2005	The integration of Strong Funds with Wells Fargo Funds creates Wells Fargo Advantage Funds, resulting in one of the top 20 mutual fund companies in the United States.
2006	Wells Fargo Advantage Funds relaunches the target date product line as Wells Fargo Advantage Dow Jones Target Date Funds.
2010	The mergers and reorganizations of Evergreen and Wells Fargo Advantage mutual funds are completed, unifying the families under the brand of Wells Fargo Advantage Funds.

Wells Fargo Advantage Funds^®

Wells Fargo Advantage Funds skillfully guides institutions, financial advisors, and individuals through the investment terrain to help them reach their financial objectives. Everything we do on behalf of investors is backed by our unique combination of qualifications.

Strength

Our organization is built on the standards of integrity and service established by our parent company—Wells Fargo & Company—more than 150 years ago. And, because we’re part of a highly diversified financial enterprise, we offer the depth of resources to help investors succeed.

Expertise

Our multi-boutique model offers investors access to the independent thinking of premier investment managers that have been chosen for their time-tested strategies. While each team specializes in a specific investment strategy, collectively they provide investors a wide choice of distinct investment styles. Our dedication to investment excellence doesn’t end with our expertise in manager selection—risk management, analysis, and rigorous ongoing review seek to ensure each manager’s investment process remains consistent.

Partnership

Our collaborative approach is built around understanding the needs and goals of our clients. By adhering to core principles of sound judgment and steady guidance, we support you through every stage of the investment decision process.

Carefully consider a fund’s investment objectives, risks, charges, and expenses before investing. For a current prospectus and, if available, a summary prospectus, containing this and other information, visit wellsfargo.com/advantagefunds. Read it carefully before investing.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds^®. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

“Dow Jones^®” and “Dow Jones Target Date Indexes^SM” are service marks of Dow Jones Trademark Holdings, LLC (“Dow Jones”), have been licensed to CME Group Index Services LLC (“CME Indexes”) and have been sublicensed for use for certain purposes by Global Index Advisors, Inc, and Wells Fargo Funds Management, LLC. The Wells Fargo Advantage Dow Jones Target Date Funds^SM based on the Dow Jones Target Date Indexes^SM, are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes or their respective affiliates and none of them makes any representation regarding the advisability of investing in such product(s).

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

Not part of the annual report.

Wells Fargo Advantage Funds offers more than 110 mutual funds across a wide range of asset classes, representing over $216 billion in assets under management, as of December 31, 2011.

Equity Funds
Asia Pacific Fund	Global Opportunities Fund	Premier Large Company Growth Fund
C&B Large Cap Value Fund	Growth Fund	Small Cap Opportunities Fund
C&B Mid Cap Value Fund	Health Care Fund	Small Cap Value Fund
Capital Growth Fund	Index Fund	Small Company Growth Fund
Common Stock Fund	International Equity Fund	Small Company Value Fund
Disciplined U.S. Core Fund	International Value Fund	Small/Mid Cap Core Fund
Discovery Fund†	Intrinsic Small Cap Value Fund	Small/Mid Cap Value Fund
Diversified Equity Fund	Intrinsic Value Fund	Social Sustainability Fund†
Diversified International Fund	Intrinsic World Equity Fund	Special Mid Cap Value Fund
Diversified Small Cap Fund	Large Cap Core Fund	Special Small Cap Value Fund
Emerging Growth Fund	Large Cap Growth Fund	Specialized Technology Fund
Emerging Markets Equity Fund	Large Company Value Fund	Strategic Large Cap Growth Fund
Endeavor Select Fund†	Omega Growth Fund	Traditional Small Cap Growth Fund
Enterprise Fund†	Opportunity Fund†	Utility and Telecommunications Fund
Equity Value Fund	Precious Metals Fund
Bond Funds
Adjustable Rate Government Fund	Inflation-Protected Bond Fund	Short-Term Bond Fund
California Limited-Term Tax-Free Fund	Intermediate Tax/AMT-Free Fund	Short-Term High Yield Bond Fund
California Tax-Free Fund	International Bond Fund	Short-Term Municipal Bond Fund
Colorado Tax-Free Fund	Minnesota Tax-Free Fund	Strategic Municipal Bond Fund
Government Securities Fund	Municipal Bond Fund	Total Return Bond Fund
High Income Fund	North Carolina Tax-Free Fund	Ultra Short-Term Income Fund
High Yield Bond Fund	Pennsylvania Tax-Free Fund	Ultra Short-Term Municipal Income Fund
Income Plus Fund	Short Duration Government Bond Fund	Wisconsin Tax-Free Fund
Asset Allocation Funds
Asset Allocation Fund	WealthBuilder Equity Portfolio†	Target 2020 Fund†
Conservative Allocation Fund	WealthBuilder Growth Allocation Portfolio†	Target 2025 Fund†
Diversified Capital Builder Fund	WealthBuilder Growth Balanced Portfolio†	Target 2030 Fund†
Diversified Income Builder Fund	WealthBuilder Moderate Balanced Portfolio†	Target 2035 Fund†
Growth Balanced Fund	WealthBuilder Tactical Equity Portfolio†	Target 2040 Fund†
Index Asset Allocation Fund	Target Today Fund†	Target 2045 Fund†
Moderate Balanced Fund	Target 2010 Fund†	Target 2050 Fund†
WealthBuilder Conservative Allocation Portfolio†	Target 2015 Fund†	Target 2055 Fund†
Money Market Funds
100% Treasury Money Market Fund	Heritage Money Market Fund†	National Tax-Free Money Market Fund
California Municipal Money Market Fund	Money Market Fund	Prime Investment Money Market Fund
Cash Investment Money Market Fund	Municipal Cash Management Money Market Fund	Treasury Plus Money Market Fund
Government Money Market Fund	Municipal Money Market Fund
Variable Trust Funds1
VT Discovery Fund†	VT Intrinsic Value Fund	VT Small Cap Growth Fund
VT Index Asset Allocation Fund	VT Omega Growth Fund	VT Small Cap Value Fund
VT International Equity Fund	VT Opportunity Fund†	VT Total Return Bond Fund

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Wells Fargo Advantage Money Market Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.

1. The Variable Trust Funds are generally available only through insurance company variable contracts.

† In this report, the Wells Fargo Advantage Discovery Fund^SM, Wells Fargo Advantage Endeavor Select Fund^SM, Wells Fargo Advantage Enterprise Fund^SM, Wells Fargo Advantage Opportunity Fund^SM, Wells Fargo Advantage Social Sustainability Fund^SM, Wells Fargo Advantage WealthBuilder Conservative Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Equity Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Moderate Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Tactical Equity Portfolio^SM, Wells Fargo Advantage Dow Jones Target Today Fund^SM, Wells Fargo Advantage Dow Jones Target 2010 Fund^SM, Wells Fargo Advantage Dow Jones Target 2015 Fund^SM, Wells Fargo Advantage Dow Jones Target 2020 Fund^SM, Wells Fargo Advantage Dow Jones Target 2025 Fund^SM, Wells Fargo Advantage Dow Jones Target 2030 Fund^SM, Wells Fargo Advantage Dow Jones Target 2035 Fund^SM, Wells Fargo Advantage Dow Jones Target 2040 Fund^SM, Wells Fargo Advantage Dow Jones Target 2045 Fund^SM, Wells Fargo Advantage Dow Jones Target 2050 Fund^SM, Wells Fargo Advantage Dow Jones Target 2055 Fund^SM, Wells Fargo Advantage Heritage Money Market Fund^SM, Wells Fargo Advantage VT Discovery Fund^SM, and Wells Fargo Advantage VT Opportunity Fund^SM are referred to as the Discovery Fund, Endeavor Select Fund, Enterprise Fund, Opportunity Fund, Social Sustainability Fund, WealthBuilder Conservative Allocation Portfolio, WealthBuilder Equity Portfolio, WealthBuilder Growth Allocation Portfolio, WealthBuilder Growth Balanced Portfolio, WealthBuilder Moderate Balanced Portfolio, WealthBuilder Tactical Equity Portfolio, Target Today Fund, Target 2010 Fund, Target 2015 Fund, Target 2020 Fund, Target 2025 Fund, Target 2030 Fund, Target 2035 Fund, Target 2040 Fund, Target 2045 Fund, Target 2050 Fund, Target 2055 Fund, Heritage Money Market Fund, VT Discovery Fund, and VT Opportunity Fund, respectively.

Not part of the annual report.

2 Wells Fargo Advantage VT Omega Growth Fund Letter to Shareholders

Karla M. Rabusch,

President

Wells Fargo Advantage Funds

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

Dear Valued Shareholder:

We’re pleased to offer you this annual report for the Wells Fargo Advantage VT Omega Growth Fund for the 12-month period that ended December 31, 2011.

For the full 12-month period, most of the major domestic equity indexes posted either modest gains or relatively mild losses. However, the market’s 12-month return figures mask the uneven path that it traced throughout the year as investors had to contend with a variety of global and domestic headwinds. Whatever the future holds, we continue to believe that most investors can benefit from adhering to a well-diversified investment strategy. Over the long-term, such a strategy may allow you to balance risks and opportunities as you pursue your financial goals in a dynamic market landscape.

The economic recovery gained traction as the year progressed.

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

2011 opened on a note of mounting optimism regarding the strength of the recovery, yet a batch of disappointing economic data in the spring and summer cast renewed doubts on the sustainability of the recovery. In September, it was reported that U.S. gross domestic product (GDP) grew at a mere 1.3% annual rate in the second quarter of 2011, following anemic growth at an annual rate of 0.4% in the first quarter. According to the December estimate, GDP growth accelerated to an annual rate of 1.8% in the third quarter, reigniting hopes for a sustainable recovery. Those hopes were buoyed by widespread anticipation of even stronger GDP growth in the fourth quarter. By the end of the 12-month period, few economists believed that the U.S. economy was in danger of sliding back into recession, although many expected a sluggish growth environment in 2012.

The struggling housing and labor markets slowed growth.

As has been the case throughout the recovery, the housing and labor markets continued to restrain economic momentum during 2011.

The beleaguered housing market has arguably exerted the biggest drag on growth. Despite intermittent signs of improvement, ongoing weakness in sales of both new and existing homes has put considerable downward pressure on prices. On the other hand, the labor market took a decided turn for the better in the latter half of the year: initial unemployment claims have eased in recent months, and the private sector has been steadily adding jobs. The pace of hiring, while not brisk, was sufficient to push the U.S. unemployment rate down to 8.5% as of December 2011—still well above its historical average, but at its lowest level since February 2009. Many observers expect the unemployment rate to decline further in 2012, which could act as a tailwind for consumer spending—widely viewed as one of the keys to long-term economic growth.

The Federal Reserve announced that it will keep rates low until 2013.

Consumers have already demonstrated some resilience in their spending—even in the face of higher energy costs. Oil prices skyrocketed in early 2011 before retreating later in the year, only to spike again during the fourth quarter. Yet “core” inflation, which excludes volatile energy and food prices, remained fairly benign throughout the year.

Letter to Shareholders Wells Fargo Advantage VT Omega Growth Fund 3

With inflation in check, the Federal Reserve (Fed) held its target range for the federal funds rate—a proxy for short-term interest rates—steady at 0% to 0.25%. Following its August 9 meeting, the Federal Open Market Committee (FOMC) issued a statement explaining that economic conditions were likely to warrant exceptionally low levels for the federal funds rate through at least mid-2013. In addition, the Fed carried out its second round of quantitative easing (QE2) in an effort to promote a more robust economic expansion. The stimulus program was completed as scheduled in June 2011. In September, the Fed launched yet another stimulus program—dubbed “Operation Twist”—that is designed to keep intermediate- and longer-term yields relatively low. The goal with keeping longer-term rates low is to encourage lending activity to spark business investments and home purchases, which, in turn, may provide support for a more sustainable economic recovery.

Market volatility was a dominant theme throughout most of 2011.

Despite pockets of turbulence sparked by the natural disasters in Japan and geopolitical turmoil in North Africa and the Middle East, the U.S. equity market performed very well from January through April of 2011. Some upbeat economic news, better-than-expected corporate profits, and investor enthusiasm about QE2 were among the catalysts for the market’s four-month advance.

In May and June, the market climate shifted to one of anxiety over the increasingly fragile state of the U.S. and global economies. As spring gave way to summer, investors not only worried that the U.S. might be on the brink of recession, they also feared that Europe’s sovereign debt problems could spiral out of control if a Greek default triggered financial contagion across the continent. In July and August, investor sentiment was further undermined by partisan wrangling over the federal debt ceiling and the Standard & Poor’s downgrade of the U.S. credit rating. The barrage of unsettling headlines led to heightened market volatility and sharply falling stock prices in the third quarter of 2011. Although volatility persisted into the fourth quarter, the market was able to rebound amid improved economic data and hopes for a resolution to the European crisis.

For the full 12-month period, the S&P 500 Index¹ of large-cap stocks achieved a total return of 2.1%. The Russell Midcap^® Index² and the Russell 2000^® Index³ of small-cap stocks lost 1.6% and 4.2%, respectively. International stocks fared worse than their U.S. counterparts, with the MSCI EAFE Index⁴ shedding 14.8%.

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 Russell Midcap^® Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 25% of the total market capitalization of the Russell 1000^® Index. You cannot invest directly in an index.

3. The Russell 2000^® Index measures the performance of the 2,000 smallest companies in the Russell 3000^® Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index. You cannot invest directly in an index.

4. The Morgan Stanley Capital International Europe, Australasia, and Far East (“MSCI EAFE”) Stock Index is an unmanaged group of securities widely regarded by investors to be representations of the stock markets of Europe, Australasia, and the Far East. You cannot invest directly in an index. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

4 Wells Fargo Advantage VT Omega Growth Fund Letter to Shareholders

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors.

Recent events have not altered our message to shareholders.

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors. Bear in mind that many investors who indiscriminately sold their equity investments during the severe market downturn of 2008 to 2009 missed out on the impressive two-year rally that followed. In our opinion, the lesson to be learned from these dramatic market events is that, for many investors, simply building and maintaining a well-diversified⁵ investment plan is the best long-term strategy.

To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Advantage Funds offers more than 110 mutual funds and other investments spanning a broad range of asset classes and investment styles. While 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.

Thank you for choosing to invest with Wells Fargo Advantage Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs. For current information about your fund investments, contact your investment professional, visit our website at www.wellsfargo.com/advantagefunds, or call us directly at 1-800-222-8222. We are available 24 hours a day, 7 days a week.

Sincerely,

Karla M. Rabusch

President

Wells Fargo Advantage Funds

5. Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Omega Growth Fund 5

INVESTMENT OBJECTIVE

The Fund seeks long-term capital appreciation.

ADVISER

Wells Fargo Funds Management, LLC

SUB-ADVISER

Wells Capital Management Incorporated

PORTFOLIO MANAGERS

Thomas J. Pence, CFA

Michael T. Smith, CFA

FUND INCEPTION

March 6, 1997

12 MONTH TOTAL RETURN AS OF DECEMBER 31, 2011
Class 2	(5.54)%
Russell 3000® Growth Index1	2.18%

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

The Adviser has committed through July 18, 2013 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain other expenses at 1.00% for Class 2. The Fund’s gross and net expense ratios are 1.03% and 1.00%, respectively, for Class 2 shares. Without these reductions, the Fund’s returns would have been lower.

1. The Russell 3000^® Growth Index measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. The stocks in this index are also members of either the Russell 1000^® Growth Index or the Russell 2000^® Growth Index. You cannot invest directly in an index.

2. The chart compares the performance of the Wells Fargo Advantage VT Omega Growth Fund Class 2 for the most recent ten years of the Fund with the Russell 3000 Growth Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

6 Wells Fargo Advantage VT Omega Growth Fund Performance Highlights (Unaudited)

MANAGER’S DISCUSSION

Fund highlights

n The Fund underperformed its benchmark, the Russell 3000^® Growth Index, for the 12-month period that ended December 31, 2011.

n Unfavorable stock selection in the information technology (IT), consumer discretionary, and energy sectors and an underweight to consumer staples were key reasons for the Fund’s underperformance.

n The U.S. equity market experienced dramatic performance swings driven by a “risk on/risk off” investor mentality, resulting in frequent disconnects between stock prices and underlying company fundamentals.

n In the current environment, we remain dedicated to our bottom-up stock selection process that seeks to maintain an optimal risk/reward balance.

Macro-driven volatility limited equity market returns for 2011.

The year began on a high note as the equity market continued its rally from late 2010 amid greater confidence in the sustainability of the U.S. economic recovery. While there were pockets of turbulence sparked by the geopolitical turmoil in North Africa and the Middle East and natural disasters in Japan, the market performed well through April 2011. In the spring and summer, however, investors’ spirits began to dampen as a string of discouraging economic data reignited fears of a recession. Investor confidence was further damaged by bickering over the federal debt ceiling, the downgrade of the U.S. credit rating by Standard & Poor’s, and the risk of financial contagion in Europe. Despite continued strength in corporate profits, investors’ intense focus on the negative macro headlines, particularly out of Europe, led to heightened market volatility and a broad-based sell-off in equities during the third quarter. Although volatility persisted into the fourth quarter, most of the major equity indexes rebounded and managed to finish 2011 with either modest gains or relatively mild losses.

The Fund underperformed its benchmark against a challenging market backdrop.

The macro-driven, highly correlated market environment of 2011 presented a major challenge to our bottom-up, fundamentally based investment process. While we successfully identified companies with strong earnings growth, stock prices were disconnected from underlying fundamentals for much of the year. Underperformance primarily stemmed from unfavorable stock selection in the information technology, consumer discretionary, and energy sectors, and an underweight to consumer staples.

Traditional growth sectors such as IT and consumer discretionary struggled in 2011. Shares of Micron Technology Incorporated fell sharply due to supply chain disruptions caused by the natural disasters in Japan and weaker-than-expected demand for the company’s memory chips. Communications equipment providers Juniper Networks Incorporated and Ciena Corporation also weighed on the Fund’s returns amid worries about inventory issues and the timing of orders related to a worldwide optical upgrade cycle at large telecommunication companies. In the consumer discretionary sector, Shutterfly Incorporated, a leading online photo publisher, declined after releasing disappointing results during the fourth quarter. High-end retailers Deckers Outdoor Corporation and lululemon athletica encountered late-year weakness on concerns over inventory levels and margin pressures.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Omega Growth Fund 7

TEN LARGEST EQUITY HOLDINGS3 (AS OF DECEMBER 31, 2011)
Apple Incorporated	7.12%
Visa Incorporated Class A	2.62%
TransDign Group Incorporated	2.45%
Alexion Pharmaceuticals Incorporated	2.19%
Kansas City Southern	2.05%
Airgas Incorporated	2.02%
American Tower Corporation Class A	2.00%
Precision Castparts Corporation	1.96%
Exxon Mobil Corporation	1.82%
Oil States International Incorporated	1.81%

As macro fears and uncertainty mounted, many investors fled stocks in economically sensitive sectors and reallocated capital to more defensive areas. Therefore, our positioning in the energy sector and an underweight to consumer staples also detracted from the Fund’s returns. Exploration and production companies SandRidge Energy Incorporated and Newfield Exploration Company were the largest detractors as crude oil prices plunged late in the year. We underweighted consumer staples based on our belief that the sector generally offers fewer attractive growth opportunities than other market sectors.

We have taken advantage of the opportunity to upgrade the quality of the portfolio.

The market’s absolute returns for 2011 were lackluster, dragged down by periods of elevated risk aversion. In particular, the third-quarter market sell-off caused many companies with predictable, visible earnings growth—“core” holdings within our portfolio construction framework—to be in our view unfairly punished along with more cyclical companies. As the year progressed, we took steps to optimize the mix of cyclical positions within our “developing situations” category in light of the macro backdrop.

Time has shown that the best response to volatile, irrational markets is to be adaptive in your thinking, but consistent in your investment process. Accordingly, while we have continued to execute our time-tested process, we have taken advantage of the opportunity to upgrade the quality of the portfolio by exchanging stocks with lower earnings visibility for those with higher earnings visibility. The challenge is to construct a portfolio with the optimal balance of secular and cyclical growth exposures. We believe that our “surround the company” approach has allowed us to achieve such balance and that the portfolio should be well positioned to outperform once company-specific fundamentals reassert themselves as the primary driver of equity returns.

SECTOR DISTRIBUTION⁴

(AS OF DECEMBER 31, 2011)

A balanced portfolio strategy may help investors navigate the 2012 market landscape.

Some equity market observers share a bullish outlook for 2012, while other forecasts are more bearish. In our view, there are compelling arguments to support both sides of the debate. On the positive side, the labor market has taken a turn for the better in recent months, while consumer spending has been fairly resilient. Even the long-struggling housing market has shown tentative signs of stabilization. Corporate fundamentals remain generally strong, and equity valuations appear reasonable in many cases.

3. The ten largest equity holdings are calculated based on the value of the securities divided by total net assets of the Fund. Holdings are subject to change and may have changed since the date specified.

4. Sector distribution is subject to change and is calculated based on the total long-term investments of the Fund.

8 Wells Fargo Advantage VT Omega Growth Fund Performance Highlights (Unaudited)

On the negative side, a European recession looks increasingly likely and could be a source of market turmoil, especially given its implications for export-dependent China. After years of inflating financial and real estate markets, China may need to use other means of stimulus. In addition, ongoing political gamesmanship and fiscal austerity in developed nations could slow global economic growth.

Considering all of these factors, we expect moderate U.S. economic growth in 2012 and a trendless market characterized by bouts of volatility. In such an environment, we believe that balanced portfolio positioning is the most prudent approach.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Omega Growth Fund 9

AVERAGE ANNUAL TOTAL RETURN⁵ (%) (AS OF DECEMBER 31, 2011)

													Expense Ratios6
	Inception Date		6 Months*			1 Year			5 Year		10 Year		Gross		Net7
Class 1		03/06/1997		(11.28	)		(5.36	)		5.88		5.08		0.78%		0.75%
Class 2		07/31/2002		(11.34	)		(5.54	)		5.62		4.83		1.03%		1.00%
Russell 3000 Growth Index				(4.49	)		2.18			2.46		2.74

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

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to smaller company securities risk. Consult the Fund’s prospectus for additional information on these and other risks.

Please refer to the prospectus provided by your participating insurance company for detailed information describing the separate accounts for information regarding surrender charges, mortality and expense risk fees and other charges that may be assessed by the participating insurance companies.

5. Performance shown for Class 2 shares prior to its inception reflects the performance of Class 1 shares, adjusted to reflect the higher expenses applicable to Class 2 shares. Historical performance shown for all classes of the Fund prior to July 19, 2010 is based on the performance of the Fund’s predecessor, Evergreen VA Omega Fund.

6. Reflects the expense ratios as stated in the most recent prospectuses.

7. The Adviser has committed through July 18, 2013 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain expenses, at the amounts shown above. Without this cap, the Fund’s returns would have been lower.

10 Wells Fargo Advantage VT Omega Growth Fund Fund Expenses (Unaudited)

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution (12b-1) 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, 2011 to December 31, 2011.

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 separate account charges assessed by participating insurance companies. 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 separate account charges assessed by participating insurance companies were included, your costs would have been higher.

	Beginning Account Value 07-01-2011		Ending Account Value 12-31-2011		Expenses Paid During the Period1		Net Annual Expense Ratio
Class 1
Actual	$	1,000.00	$	887.18	$	3.57		0.75	%
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.42	$	3.82		0.75	%
Class 2
Actual	$	1,000.00	$	886.60	$	4.76		1.00	%
Hypothetical (5% return before expenses)	$	1,000.00	$	1,020.16	$	5.09		1.00	%

1. Expenses paid is equal to the annualized 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).

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Omega Growth Fund 11

Security Name	Shares		Value
Common Stocks: 97.69%
Consumer Discretionary: 16.64%
Auto Components: 1.47%
BorgWarner IncorporatedǠ		25,800	$	1,644,492
Diversified Consumer Services: 1.04%
Weight Watchers International Incorporated		21,100		1,160,711
Hotels, Restaurants & Leisure: 1.31%
Starbucks Corporation«		31,822		1,464,130
Household Durables: 0.99%
Tempur-Pedic International IncorporatedǠ		21,000		1,103,130
Internet & Catalog Retail: 4.03%
Amazon.com Incorporated†		11,400		1,973,340
Priceline.com Incorporated†		4,300		2,011,153
Shutterfly IncorporatedǠ		23,300		530,308
				4,514,801
Media: 2.66%
CBS Corporation Class B		59,400		1,612,116
DIRECTV Group Incorporated†		32,100		1,372,596
				2,984,712
Multiline Retail: 1.17%
Dollar General Corporation†		31,970		1,315,246
Specialty Retail: 2.28%
Ross Stores Incorporated		25,800		1,226,274
Williams-Sonoma Incorporated		34,600		1,332,100
				2,558,374
Textiles, Apparel & Luxury Goods: 1.69%
Deckers Outdoor Corporation†		7,131		538,890
lululemon athletica incorporatedǠ		29,100		1,357,806
				1,896,696
Consumer Staples: 1.27%
Food & Staples Retailing: 1.27%
Whole Foods Market Incorporated		20,400		1,419,432
Energy: 12.55%
Energy Equipment & Services: 5.40%
Cameron International Corporation†		24,100		1,185,479
Ensco International plc ADR		23,300		1,093,236
Oil States International Incorporated†		26,500		2,023,805
Schlumberger Limited		25,600		1,748,736
				6,051,256

12 Wells Fargo Advantage VT Omega Growth Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Oil, Gas & Consumable Fuels: 7.15%
Cabot Oil & Gas Corporation		15,300	$	1,161,270
Concho Resources IncorporatedǠ		18,844		1,766,625
Exxon Mobil Corporation		24,000		2,034,240
Pioneer Natural Resources Company		22,200		1,986,456
SandRidge Energy IncorporatedǠ		129,500		1,056,720
				8,005,311
Financials: 6.28%
Capital Markets: 1.12%
TD Ameritrade Holding Corporation		80,300		1,256,695
Consumer Finance: 4.08%
MasterCard Incorporated		4,400		1,640,408
Visa Incorporated Class A		28,900		2,934,217
				4,574,625
Real Estate Management & Development: 1.08%
CBRE Group Incorporated†		79,400		1,208,468
Health Care: 12.86%
Biotechnology: 3.71%
Alexion Pharmaceuticals Incorporated†		34,292		2,451,878
BioMarin Pharmaceutical IncorporatedǠ		33,030		1,135,571
Gilead Sciences Incorporated†		13,913		569,351
				4,156,800
Health Care Equipment & Supplies: 0.98%
Alere Incorporated†		47,419		1,094,905
Health Care Providers & Services: 3.44%
Cardinal Health Incorporated		31,400		1,275,154
Humana Incorporated		15,200		1,331,672
UnitedHealth Group Incorporated		24,700		1,251,796
				3,858,622
Health Care Technology: 1.44%
Cerner Corporation†		26,400		1,617,000
Life Sciences Tools & Services: 0.71%
Bruker CorporationǠ		64,000		794,880
Pharmaceuticals: 2.58%
Allergan Incorporated		18,400		1,614,416
Shire plc ADR		12,300		1,277,970
				2,892,386
Industrials: 13.91%
Aerospace & Defense: 4.41%
Precision Castparts Corporation«		13,300		2,191,707
TransDign Group Incorporated†		28,700		2,746,016
				4,937,723

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Omega Growth Fund 13

Security Name	Shares		Value
Machinery: 3.92%
AGCO Corporation†		7,900	$	339,463
Chart Industries IncorporatedǠ		19,000		1,027,330
Cummins Incorporated		14,464		1,273,121
Gardner Denver Incorporated		22,800		1,756,968
				4,396,882
Road & Rail: 3.46%
Hertz Global Holdings IncorporatedǠ		134,200		1,572,824
Kansas City SouthernǠ		33,800		2,298,738
				3,871,562
Trading Companies & Distributors: 2.12%
W.W. Grainger Incorporated		3,387		634,013
WESCO International IncorporatedǠ		32,900		1,744,029
				2,378,042
Information Technology: 28.51%
Communications Equipment: 1.01%
Acme Packet IncorporatedǠ		36,500		1,128,215
Computers & Peripherals: 8.62%
Apple Incorporated†		19,700		7,978,500
EMC Corporation†		78,200		1,684,428
				9,662,928
Internet Software & Services: 3.41%
eBay Incorporated†		47,600		1,443,708
F5 Networks Incorporated†		11,938		1,266,861
MercadoLibre Incorporated		13,900		1,105,606
				3,816,175
IT Services: 3.14%
Cognizant Technology Solutions Corporation Class A†		26,500		1,704,215
Gartner Incorporated†		52,219		1,815,655
				3,519,870
Semiconductors & Semiconductor Equipment: 4.00%
ARM Holdings plc ADR		45,400		1,256,218
Atmel CorporationǠ		72,700		588,870
Avago Technologies Limited		48,400		1,396,822
Microchip Technology Incorporated«		33,900		1,241,757
				4,483,667
Software: 8.33%
Check Point Software Technologies Limited†		24,900		1,308,246
Citrix Systems Incorporated†		20,600		1,250,832
Oracle Corporation		61,300		1,572,345
Qlik Technologies Incorporated†		48,875		1,182,775
Red Hat Incorporated†		34,500		1,424,505

14 Wells Fargo Advantage VT Omega Growth Fund Portfolio of Investments—December 31, 2011

Security Name				Shares		Value
Software (continued)
Salesforce.com IncorporatedǠ					9,700	$	984,162
TIBCO Software Incorporated†					67,500		1,613,925
							9,336,790
Materials: 3.67%
Chemicals: 3.67%
Airgas Incorporated					29,000		2,264,320
Monsanto Company					26,400		1,849,848
							4,114,168
Telecommunication Services: 2.00%
Wireless Telecommunication Services: 2.00%
American Tower Corporation Class A					37,300		2,238,373
Total Common Stocks (Cost $96,998,340)							109,457,067
				Principal
Other: 0.13%
Gryphon Funding Limited, Pass-Through Entity(a)(i)(v)				$	188,548		52,793
VFNC Corporation, Pass-Through Entity, 0.30%(a)(i)(v)±144A					214,624		92,288
Total Other (Cost $69,365)							145,081
	Yield			Shares
Short-Term Investments: 19.35%
Investment Companies: 19.35%
Wells Fargo Advantage Cash Investment Money Market Fund, Institutional Class(l)(u)		0.04	%		2,090,801		2,090,801
Wells Fargo Securities Lending Cash Investments, LLC(v)(l)(u)(r)		0.12			19,595,896		19,595,896
Total Short-Term Investments (Cost $21,686,697)							21,686,697

Total Investments in Securities
(Cost $118,754,402)*	117.17	%		131,288,845
Other Assets and Liabilities, Net	(17.17	)		(19,239,471	)
Total Net Assets	100.00	%	$	112,049,374

« All or a portion of this security is on loan.

† Non-income earning security.

(a) Security is fair valued by the Management Valuation Team, and in certain instances by the Board of Trustees, in accordance with procedures approved by the Board of Trustees.

(i) Illiquid security for which the designation as illiquid is unaudited.

(v) Security represents investment of cash collateral received from securities on loan.

± Variable rate investment.

144A Security that may be resold to “qualified institutional buyers” under Rule 144A or security offered pursuant to Section 4(2) of the Securities Act of 1933, as amended.

(l) Investment in an affiliate.

(u) Rate shown is the 7-day annualized yield at period end.

(r) The investment company is exempt from registration under Section 3(c)(7) of the 1940 Act.

* Cost for federal income tax purposes is $118,997,791 and net unrealized appreciation (depreciation) consists of:

Gross unrealized appreciation	$	17,911,281
Gross unrealized depreciation		(5,620,227	)
Net unrealized appreciation	$	12,291,054

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

Statement of Assets and Liabilities—December 31, 2011 Wells Fargo Advantage VT Omega Growth Fund 15

Assets
Investments
In unaffiliated securities (including securities on loan), at value	$	109,602,148
In affiliated securities, at value		21,686,697
Total investments, at value (see cost below)		131,288,845
Receivable for investments sold		1,344,379
Receivable for Fund shares sold		260
Receivable for dividends		41,576
Receivable for securities lending income		2,042
Prepaid expenses and other assets		1,461
Total assets		132,678,563
Liabilities
Payable for investments purchased		721,486
Payable for Fund shares redeemed		105,335
Payable upon receipt of securities loaned		19,665,261
Advisory fee payable		51,452
Distribution fees payable		15,298
Due to other related parties		13,836
Accrued expenses and other liabilities		56,521
Total liabilities		20,629,189
Total net assets	$	112,049,374
NET ASSETS CONSIST OF
Paid-in capital	$	101,912,656
Undistributed net investment loss		(2,483	)
Accumulated net realized losses on investments		(2,395,242	)
Net unrealized gains on investments		12,534,443
Total net assets	$	112,049,374
COMPUTATION OF NET ASSET VALUE PER SHARE1
Net assets – Class 1	$	45,293,257
Shares outstanding – Class 1		1,988,704
Net asset value per share – Class 1		$22.78
Net assets – Class 2	$	66,756,117
Shares outstanding – Class 2		2,970,030
Net asset value per share – Class 2		$22.48
Total investments, at cost	$	118,754,402
Securities on loan, at value	$	19,115,220

1. The Fund has an unlimited number of authorized shares.

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

16 Wells Fargo Advantage VT Omega Growth Fund Statement of Operations—Year Ended December 31, 2011

Investment income
Dividends*	$	552,708
Securities lending income, net		58,505
Income from affiliated securities		1,705
Total investment income		612,918
Expenses
Advisory fee		706,005
Administration fees
Fund level		64,182
Class 1		42,664
Class 2		60,028
Distribution fees
Class 2		187,588
Custody and accounting fees		30,541
Professional fees		48,011
Shareholder report expenses		59,719
Trustees’ fees and expenses		11,603
Other fees and expenses		2,496
Total expenses		1,212,837
Less: Fee waivers and/or expense reimbursements		(62,515	)
Net expenses		1,150,322
Net investment loss		(537,404	)
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains on investments		10,208,867
Net change in unrealized gains (losses) on investments		(16,548,843	)
Net realized and unrealized gains (losses) on investments		(6,339,976	)
Net decrease in net assets resulting from operations	$	(6,877,380	)
* Net of foreign dividend withholding taxes of		$20,629

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

Statements of Changes in Net Assets Wells Fargo Advantage VT Omega Growth Fund 17

	Year Ended December 31, 2011						Year Ended December 31, 20101
Operations
Net investment loss				$	(537,404	)				$	(163,947	)
Net realized gains on investments					10,208,867						13,266,207
Net change in unrealized gains (losses) on investments					(16,548,843	)					12,283,320
Net increase (decrease) in net assets resulting from operations					(6,877,380	)					25,385,580
Distributions to shareholders from
Net investment income
Class 1					0						(439,899	)
Class 2					0						(140,680	)
Net realized gains
Class 1					(478,304	)					0
Class 2					(638,543	)					0
Total distributions to shareholders					(1,116,847	)					(580,579	)
Capital share transactions		Shares						Shares
Proceeds from shares sold
Class 1		475,258			11,982,674			428,669			8,952,888
Class 2		258,675			6,051,791			494,435			9,722,414
					18,034,465						18,675,302
Reinvestment of distributions
Class 1		18,928			478,304			21,311			439,899
Class 2		25,582			638,543			6,845			140,680
					1,116,847						580,579
Payment for shares redeemed
Class 1		(741,540	)		(17,562,839	)		(1,143,173	)		(23,005,725	)
Class 2		(782,129	)		(19,014,915	)		(1,245,566	)		(25,157,874	)
					(36,577,754	)					(48,163,599	)
Net asset value of shares issued in acquisitions
Class 2		0			0			2,586,116			48,569,090
Net increase (decrease) in net assets resulting from capital share transactions					(17,426,442	)					19,661,372
Total increase (decrease) in net assets					(25,420,669	)					44,466,373
Net assets
Beginning of period					137,470,043						93,003,670
End of period				$	112,049,374					$	137,470,043
Undistributed (accumulated) net investment loss				$	(2,483	)				$	(3,029	)

1. After the close of business on July 16, 2010, the Fund acquired the net assets of Evergreen VA Omega Fund and Wells Fargo Advantage VT Large Company Growth Fund. Evergreen VA Omega Fund became the accounting and performance survivor in the transaction. The information for the period prior to July 19, 2010 is that of Evergreen VA Omega Fund.

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

18 Wells Fargo Advantage VT Omega Growth Fund Financial Highlights

(For a share outstanding throughout each period)

	Year Ended December 31,
Class 1	2011			20101			20091			20081			20071
Net asset value, beginning of period		$24.26			$20.42			$14.43			$19.82			$17.80
Net investment income (loss)		(0.06	)		0.03			0.13			0.23			0.08
Net realized and unrealized gains (losses) on investments		(1.21	)		3.98			6.09			(5.62	)		2.05
Total from investment operations		(1.27	)		4.01			6.22			(5.39	)		2.13
Distributions to shareholders from
Net investment income		0.00			(0.17	)		(0.23	)		0.00			(0.11	)
Net realized gains		(0.21	)		0.00			0.00			0.00			0.00
Total distributions to shareholders		(0.21	)		(0.17	)		(0.23	)		0.00			(0.11	)
Net asset value, end of period		$22.78			$24.26			$20.42			$14.43			$19.82
Total return		(5.36	)%		19.79	%		43.97	%		(27.19	)%		11.96	%
Ratios to average net assets (annualized)
Gross expenses		0.80	%		0.75	%		0.76	%		0.72	%		0.71	%
Net expenses		0.75	%		0.74	%		0.76	%		0.72	%		0.71	%
Net investment income (loss)		(0.27	)%		0.01	%		0.86	%		1.11	%		0.32	%
Supplemental data
Portfolio turnover rate		110	%		160	%		28	%		46	%		31	%
Net assets, end of period (000’s omitted)	$	45,293		$	54,246		$	59,807		$	35,952		$	67,773

1. After the close of business on July 16, 2010, the Fund acquired the net assets of Evergreen VA Omega Fund and Wells Fargo Advantage VT Large Company Growth Fund. Evergreen VA Omega Fund became the accounting and performance survivor in the transaction. The information for the periods prior to July 19, 2010 is that of Class 1 of Evergreen VA Omega Fund.

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

Financial Highlights Wells Fargo Advantage VT Omega Growth Fund 19

(For a share outstanding throughout each period)

	Year Ended December 31,
Class 2	2011			20101			20091			20081			20071
Net asset value, beginning of period		$24.00			$20.19			$14.25			$19.63			$17.62
Net investment income (loss)		(0.14	)		(0.07	)2		0.11			0.15			0.01
Net realized and unrealized gains (losses) on investments		(1.17	)		3.99			6.00			(5.53	)		2.05
Total from investment operations		(1.31	)		3.92			6.11			(5.38	)		2.06
Distributions to shareholders from
Net investment income		0.00			(0.11	)		(0.17	)		0.00			(0.05	)
Net realized gains		(0.21	)		0.00			0.00			0.00			0.00
Total distributions to shareholders		(0.21	)		(0.11	)		(0.17	)		0.00			(0.05	)
Net asset value, end of period		$22.48			$24.00			$20.19			$14.25			$19.63
Total return		(5.54	)%		19.48	%		43.58	%		(27.41	)%		11.74	%
Ratios to average net assets (annualized)
Gross expenses		1.05	%		1.01	%		1.00	%		0.97	%		0.96	%
Net expenses		1.00	%		1.00	%		1.00	%		0.97	%		0.96	%
Net investment income (loss)		(0.52	)%		(0.34	)%		0.63	%		0.86	%		0.07	%
Supplemental data
Portfolio turnover rate		110	%		160	%		28	%		46	%		31	%
Net assets, end of period (000’s omitted)	$	66,756		$	83,224		$	33,196		$	22,910		$	38,137

1. After the close of business on July 16, 2010, the Fund acquired the net assets of Evergreen VA Omega Fund and Wells Fargo Advantage VT Large Company Growth Fund. Evergreen VA Omega Fund became the accounting and performance survivor in the transaction. The information for the periods prior to July 19, 2010 is that of Class 2 of Evergreen VA Omega Fund.

2. Calculated based upon average shares outstanding

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

20 Wells Fargo Advantage VT Omega Growth Fund Notes to Financial Statements

1. ORGANIZATION

Wells Fargo Variable 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”). These financial statements report on Wells Fargo Advantage VT Omega Growth 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

Investments in equity securities are valued each business day as of the close of regular trading on the New York Stock Exchange, which is usually 4:00 p.m. (Eastern Time). Securities which are traded on a national or foreign securities exchange are valued at the last reported sales price, except that securities listed on The Nasdaq Stock Market, Inc. (“Nasdaq”) are valued at the Nasdaq Official Closing Price (“NOCP”), and if no NOCP is available, then at the last reported sales price. If no sales price is shown on the Nasdaq, the bid price will be used. In the absence of any sale of securities listed on the Nasdaq, and in the case of other securities (including U.S. Government obligations, but excluding debt securities maturing in 60 days or less), the price will be deemed “stale” and the valuations will be determined in accordance with the Fund’s Fair Value Procedures.

Fixed income securities with maturities exceeding 60 days are valued based on available evaluated prices received from an independent pricing service approved by the Board of Trustees which may utilize both transaction data and market information such as yield, prices of securities of comparable quality, coupon rate, maturity, type of issue, trading characteristics and other market data. If valuations are not available from the pricing service or values received are deemed not representative of market value, values will be obtained from a third party broker-dealer or determined based on the Fund’s Fair Value Procedures.

Debt securities of sufficient credit quality with original maturities of 60 days or less generally are valued at amortized cost which approximates fair value. The amortized cost method involves valuing a security at its cost, plus accretion of discount or minus amortization of premium over the period until maturity.

Investments in open-end mutual funds and non-registered investment companies are generally valued at net asset value.

Investments which are not valued using any of the methods discussed above, are valued at their fair value, as determined by procedures established in good faith and approved by the Board of Trustees.

Security loans

The Fund may lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. The Fund continues to receive interest or dividends on the securities loaned. The Fund receives collateral in the form of cash or securities with a value at least equal to the value of the securities on loan. The value of the loaned securities is determined at the close of each business day and any additional required collateral is delivered to the Fund on the next business day. In a securities lending transaction, the net asset value of the Fund will be affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of the instrument in which collateral is invested. The amount of securities lending activity undertaken by the Fund fluctuates from time to time. In the event of default or bankruptcy by the borrower, the Fund may be prevented from recovering the loaned securities or gaining access to the collateral or may experience delays or costs in doing so. In addition, the investment of any cash collateral received may lose all or part of its value. The Fund has the right under the lending agreement to recover the securities from the borrower on demand.

The Fund lends its securities through an unaffiliated securities lending agent. Cash collateral received in connection with its securities lending transactions is invested in Wells Fargo Securities Lending Cash Investments, LLC (the “Cash Collateral Fund”). The Cash Collateral Fund is exempt from registration under Section 3(c)(7) of the 1940 Act and is managed by

Notes to Financial Statements Wells Fargo Advantage VT Omega Growth Fund 21

Wells Fargo Funds Management LLC (“Funds Management”) and is sub-advised by Wells Capital Management Incorporated (“Wells Capital Management”). Funds Management receives an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Cash Collateral Fund increase. All of the fees received by Funds Management are paid to Wells Capital Management for its services as sub-adviser. The Cash Collateral Fund seeks to provide a positive return compared to the daily Fed Funds Open rate by investing in high-quality, U.S. dollar-denominated short-term money market instruments. Cash Collateral Fund investments are fair valued based upon the amortized cost valuation technique. Income earned from investment in the Cash Collateral Fund is included in securities lending income on the Statement of Operations.

For Wells Fargo Advantage Funds that participated in securities lending activity prior to February 13, 2009, certain structured investment vehicles purchased in a joint account by the former securities lending agent defaulted or were impaired. Certain of the Wells Fargo Advantage Funds still hold ownership interest in these structured investment vehicles, which have since been restructured as pass-through securities. If the Fund holds an ownership interest in such pass-through securities, information regarding this ownership interest can be found in the Portfolio of Investments under the category “Other”.

Security transactions and income recognition

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

Dividend income is recognized on the ex-dividend date. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.

Distributions to shareholders

Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-dividend date. Such distributions are determined in conformity with income tax regulations, which may differ from generally accepted accounting principles.

The timing and character of distributions made during the period from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. To the extent that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment. Temporary differences do not require reclassifications. The primary permanent differences causing such reclassifications are due to net operating losses. At December 31, 2011, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statement of Assets and Liabilities:

Paid-in Capital	Undistributed Net Investment Loss			Accumulated Net Realized Losses on Investments
$5,909		$	537,950		$	(543,859	)

Federal and other taxes

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

The 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.

Under the recently enacted Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years which began after December 22, 2010 for an unlimited period. However, any losses incurred are required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

22 Wells Fargo Advantage VT Omega Growth Fund Notes to Financial Statements

At December 31, 2011, net capital loss carryforwards, which are available to offset future net realized capital gains, were as follows:

Expiration
2012	2013		2015		2016		2017
$1,078,104	$	1,615,063	$	4,132,177	$	2,303,740	$	771,379

Class allocations

The separate classes of shares offered by the Fund differ principally in distribution fees. Shareholders of each class bear certain expenses that pertain to that particular class. All shareholders bear the common expenses of the Fund, earn income from the portfolio, and are allocated unrealized gains and losses pro rata based on the average daily net assets of each class, without distinction between share classes. Dividends are determined separately for each class based on income and expenses allocable to each class. Realized gains and losses are allocated to each class pro rata based upon the net assets of each class on the date realized. Differences in per share dividend rates generally result from the relative weightings of pro rata income and realized gain allocations and from differences in separate class expenses, including distribution fees.

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 significant 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:

n Level 1 – quoted prices in active markets for identical securities

n Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

n Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

As of December 31, 2011, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:

Investments in Securities	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity securities
Common stocks	$	109,457,067	$	0	$	0	$	109,457,067
Other		0		0		145,081		145,081
Short-term investments
Investment companies		2,090,801		19,595,896		0		21,686,697
	$	111,547,868	$	19,595,896	$	145,081	$	131,288,845

Further details on the major security types listed above can be found in the Portfolio of Investments.

Transfers in and transfers out are recognized at the end of the reporting period. For the year ended December 31, 2011, the Fund did not have any significant transfers into/out of Level 1 and Level 2.

Notes to Financial Statements Wells Fargo Advantage VT Omega Growth Fund 23

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Other
Balance as of December 31, 2010	$	239,022
Accrued discounts (premiums)		0
Realized gains (losses)		0
Change in unrealized gains (losses)		(12,845	)
Purchases		0
Sales		(81,096	)
Transfers into Level 3		0
Transfers out of Level 3		0
Balance as of December 31, 2011	$	145,081
Change in unrealized gains (losses) relating to securities still held at December 31, 2011	$	(51,696	)

4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES

Advisory fee

The Trust has entered into an advisory contract with Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”). The adviser is responsible for implementing investment policies and guidelines and for supervising the sub-adviser, who is responsible for day-to-day portfolio management of the Fund.

Pursuant to the contract, Funds Management is entitled to receive an annual advisory fee starting at 0.55% and declining to 0.40% as the average daily net assets of the Fund increase. For the year ended December 31, 2011, the advisory fee was equivalent to an annual rate of 0.55% of the Fund’s average daily net assets.

Funds Management may retain the services of certain sub-advisers to provide daily portfolio management to the Fund. The fees related to sub-advisory services are borne directly by Funds Management and do not increase the overall fees paid by the Fund. Wells Capital Management, an affiliate of Funds Management, is the sub-adviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.35% and declining to 0.15% as the average daily net assets of the Fund increase.

Administration and transfer agent fees

The Trust has entered into an administration agreement with Funds Management. Under this agreement, for providing administrative services, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers, Funds Management is entitled to receive from the Fund an annual fund level administration fee starting at 0.05% and declining to 0.03% as the average daily net assets of the Fund increase and a class level administration fee of 0.08% of the average daily net assets of each class.

Funds Management has contractually waived and/or reimbursed advisory and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. Waiver of fees and/or reimbursement of expenses by Funds Management were made first from fund level expenses on a proportionate basis and then from class specific expenses.

Distribution fees

The Trust has adopted a Distribution Plan for Class 2 shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are charged to Class 2 shares and paid to Wells Fargo Funds Distributor, LLC, the principal underwriter, at an annual rate of 0.25% of its average daily net assets.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. Government obligations (if any) and short-term securities (securities with maturities of one year or less at purchase date), for the year ended December 31, 2011 were $141,507,856 and $161,721,692, respectively.

24 Wells Fargo Advantage VT Omega Growth Fund Notes to Financial Statements

6. ACQUISITIONS

After the close of business on July 16, 2010, the Fund acquired the net assets of Evergreen VA Omega Fund and Wells Fargo Advantage VT Large Company Growth Fund. The purpose of the transactions was to combine three funds with similar investment objectives and strategies. The acquisitions were accomplished by a tax-free exchange of all of the shares of Evergreen VA Omega Fund and Wells Fargo Advantage VT Large Company Growth Fund. Shareholders holding Class 1 and Class 2 shares of Evergreen VA Omega Fund received Class 1 and Class 2 shares, respectively, of the Fund in the reorganization. Existing shareholders of Wells Fargo Advantage VT Large Company Growth Fund received Class 2 shares of the Fund in the reorganization. The Fund was newly created to receive the assets of shares of Evergreen VA Omega Fund and Wells Fargo Advantage VT Large Company Growth Fund. Evergreen VA Omega Fund became the accounting and performance survivor in the reorganizations. The investment portfolio of Evergreen VA Omega Fund and Wells Fargo Advantage VT Large Company Growth Fund with fair values of $71,682,578 and $48,538,258, respectively, and identified costs of $69,920,349 and $46,062,243, respectively, at July 16, 2010 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 investments received from Evergreen VA Omega Fund and Wells Fargo Advantage VT Large Company Growth Fund 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 (losses) 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
Evergreen VA Omega Fund	$	70,210,006	$	1,762,229		1.00		2,457,511	Class 1
						1.00		1,231,817	Class 2
Wells Fargo Advantage VT Large Company Growth Fund	$	48,569,090	$	2,476,015		0.43		2,568,116	Class 2

The aggregate net assets of the Fund immediately after the acquisitions were $118,779,096.

Assuming the acquisitions had been completed January 1, 2010, the beginning of the annual reporting period for the Fund, the pro forma results of operations for the year ended December 31, 2010 would have been:

Net investment loss	$	(116,783	)
Net realized and unrealized gains on investments	$	17,879,551
Net increase in net assets resulting from operations	$	17,762,768

7. BANK BORROWINGS

The Trust and Wells Fargo Funds Trust (excluding the money market funds) are parties to a $150,000,000 revolving credit agreement with State Street Bank and Trust Company, 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, under the credit agreement, the Fund pays an annual commitment fee equal to 0.10% of the unused balance, which is allocated pro rata. Prior to September 6, 2011, the revolving credit agreement was for $125,000,000 and the annual commitment fee paid by the Fund was 0.125% of the unused balance. For the year ended December 31, 2011, the Fund paid $264 in commitment fees.

For the year ended December 31, 2011, there were no borrowings by the Fund under the agreement.

8. DISTRIBUTIONS TO SHAREHOLDERS

The tax character of distributions paid during the years ended December 31, 2011 and December 31, 2010 were as follows:

	Year ended December 31,
	2011		2010
Ordinary Income	$	0	$	580,579
Long-term Capital Gain		1,116,847		0

Notes to Financial Statements Wells Fargo Advantage VT Omega Growth Fund 25

As of December 31, 2011, the components of distributable earnings on a tax basis were as follows:

Undistributed Ordinary Income		Undistributed Long-Term Gain		Unrealized Gains (Losses)		Capital Loss Carryforward
$	2,432,944	$	5,315,666	$	12,291,054	$	(9,900,463	)

9. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and directors are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Trust may enter into contracts with service providers that contain a variety of indemnification clauses. The Trust’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.

10. NEW ACCOUNTING PRONOUNCEMENTS

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. ASU No. 2011-04 amends FASB ASC Topic 820, Fair Value Measurements and Disclosures, to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP. The ASU is effective prospectively for interim and annual periods beginning after December 15, 2011. Management expects that adoption of the ASU will result in additional disclosures in the financial statements, as applicable.

In April 2011, FASB issued ASU No. 2011-03 “Reconsideration of Effective Control for Repurchase Agreements”. ASU No. 2011-03 amends FASB ASC Topic 860, Transfers and Servicing, specifically the criteria required to determine whether a repurchase agreement (repo) and similar agreements should be accounted for as sales of financial assets or secured borrowings with commitments. ASU No. 2011-03 changes the assessment of effective control by focusing on the transferor’s contractual rights and obligations and removing the criterion to assess its ability to exercise those rights or honor those obligations. This could result in changes to the way entities account for certain transactions including repurchase agreements, mortgage dollar rolls and reverse repurchase agreements. The ASU will become effective on a prospective basis for new transfers and modifications to existing transactions as of the beginning of the first interim or annual period beginning on or after December 15, 2011. Management has evaluated the impact of adopting the ASU and expects no significant changes.

26 Wells Fargo Advantage VT Omega Growth Fund Report of Independent Registered Public Accounting Firm

BOARD OF TRUSTEES AND SHAREHOLDERS OF WELLS FARGO VARIABLE TRUST:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the Wells Fargo Advantage VT Omega Growth Fund (the “Fund”), one of the funds constituting the Wells Fargo Variable Trust, as of December 31, 2011, and the related statement of operations for the year then ended, statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2011, by correspondence with custodian and brokers, or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Wells Fargo Advantage VT Omega Growth Fund as of December 31, 2011, the results of its operations for the year then ended, changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

February 24, 2012

Other Information (Unaudited) Wells Fargo Advantage VT Omega Growth Fund 27

TAX INFORMATION

Pursuant to Section 852 of the Internal Revenue Code, $1,116,847 was designated as long-term capital gain distributions for the fiscal year ended December 31, 2011.

PROXY VOTING INFORMATION

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our Web site at www.wellsfargo.com/advantagefunds, or visiting the SEC Web site at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the Fund’s Web site at www.wellsfargo.com/advantagefunds or by visiting the SEC Web site at www.sec.gov.

PORTFOLIO HOLDINGS INFORMATION

The complete portfolio holdings for the Fund are publicly available on the Fund’s Web site (www.wellsfargo.com/advantagefunds) on a monthly, 30-day or more delayed basis. In addition, top ten holdings information for the Fund is publicly available on the Fund’s Web site on a monthly, seven-day or more delayed basis. The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q, which is available without charge by visiting the SEC Web site at www.sec.gov. In addition, the Fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and at regional offices in New York City, at 233 Broadway, and in Chicago, at 175 West Jackson Boulevard, Suite 900. Information about the Public Reference Room may be obtained by calling 1-800-SEC-0330.

28 Wells Fargo Advantage VT Omega Growth Fund Other Information (Unaudited)

BOARD OF TRUSTEES

The following table provides basic information about the Board of Trustees (the “Trustees”) of the Trust and Officers of the Trust. This table should be read in conjunction with the Prospectus and the Statement of Additional Information¹ of the Fund. Each of the Trustees and Officers listed below acts in identical capacities for the Wells Fargo Advantage family of funds, which consists of 138 funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). All of the Trustees are also Members of the Audit and Governance Committees of each Trust in the Fund Complex. The mailing address of each Trustee and Officer is 525 Market Street, 12th Floor, San Francisco, CA 94105. 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	Other Directorships During Past Five Years
Peter G. Gordon (Born 1942)	Trustee, since 1998; Chairman, since 2005 (Lead Trustee since 2001)	Co-Founder, Retired Chairman, President and CEO of Crystal Geyser Water Company. Trustee Emeritus, Colby College	Asset Allocation Trust
Isaiah Harris, Jr. (Born 1952)	Trustee, since 2009	Retired. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Mr. Harris is a certified public accountant.	CIGNA Corporation; Deluxe Corporation; Asset Allocation Trust
Judith M. Johnson (Born 1949)	Trustee, since 2008	Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.	Asset Allocation Trust
Leroy Keith, Jr. (Born 1939)	Trustee, since 2010	Chairman, Bloc Global Services (development and construction). Trustee of the Evergreen Funds from 1983 to 2010. Former Managing Director, Almanac Capital Management (commodities firm), former Partner, Stonington Partners, Inc. (private equity fund), former Director, Obagi Medical Products Co. and former Director, Lincoln Educational Services.	Trustee, Virtus Fund Complex (consisting of 40 portfolios as of 12/31/11); Asset Allocation Trust
David F. Larcker (Born 1950)	Trustee, since 2009	James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of Corporate Governance Research Program and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.	Asset Allocation Trust
Olivia S. Mitchell (Born 1953)	Trustee, since 2006	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.	Asset Allocation Trust

Other Information (Unaudited) Wells Fargo Advantage VT Omega Growth Fund 29

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years	Other Directorships During Past Five Years
Timothy J. Penny (Born 1951)	Trustee, since 1996	President and CEO of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007 and Senior Fellow at the Humphrey Institute Policy Forum at the University of Minnesota since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.	Asset Allocation Trust
Michael S. Scofield (Born 1943)	Trustee, since 2010	Served on the Investment Company Institute’s Board of Governors and Executive Committee from 2008-2011 as well the Governing Council of the Independent Directors Council from 2006-2011 and the Independent Directors Council Executive Committee from 2008-2011. Chairman of the IDC from 2008-2010. Institutional Investor (Fund Directions) Trustee of Year in 2007. Trustee of the Evergreen Funds (and its predecessors) from 1984 to 2010. Chairman of the Evergreen Funds from 2000-2010. Former Trustee of the Mentor Funds. Retired Attorney, Law Offices of Michael S. Scofield and former Director and Chairman, Branded Media Corporation (multi-media branding company).	Asset Allocation Trust
Donald C. Willeke (Born 1940)	Trustee, since 1996	Principal of the law firm of Willeke & Daniels. General Counsel of the Minneapolis Employees Retirement Fund from 1984 until its consolidation into the Minnesota Public Employees Retirement Association on June 30, 2010. Director and Vice Chair of The Free Trust (non-profit corporation). Director of the American Chestnut Foundation (non-profit corporation).	Asset Allocation Trust

Officers

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years
Karla M. Rabusch (Born 1959)	President, since 2003	Executive Vice President of Wells Fargo Bank, N.A. and President of Wells Fargo Funds Management, LLC since 2003. Senior Vice President and Chief Administrative Officer of Wells Fargo Funds Management, LLC from 2001 to 2003.
C. David Messman (Born 1960)	Secretary, since 2000; Chief Legal Counsel, since 2003	Senior Vice President and Secretary of Wells Fargo Funds Management, LLC since 2001. Vice President and Managing Senior Counsel of Wells Fargo Bank, N.A. since 1996.
Kasey Phillips (Born 1970)	Treasurer, since 2009	Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2006 to 2010. Treasurer of the Evergreen Funds from 2005 to 2010.
David Berardi (Born 1975)	Assistant Treasurer, since 2009	Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Assistant Vice President of Evergreen Investment Services, Inc. from 2004 to 2008. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.
Jeremy DePalma (Born 1974)	Assistant Treasurer, since 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. Vice President, Evergreen Investment Services, Inc. from 2004 to 2007. Head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.
Debra Ann Early (Born 1964)	Chief Compliance Officer, since 2007	Chief Compliance Officer of Wells Fargo Funds Management, LLC since 2007. Chief Compliance Officer of Parnassus Investments from 2005 to 2007. Chief Financial Officer of Parnassus Investments from 2004 to 2007 and Senior Audit Manager of PricewaterhouseCoopers LLP from 1998 to 2004.

1. 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 Web site at www.wellsfargo.com/advantagefunds.

30 Wells Fargo Advantage VT Omega Growth Fund List of Abbreviations

The following is a list of common abbreviations for terms and entities which may have appeared in this report.

ACB —  Agricultural Credit Bank

ADR —  American Depository Receipt

ADS —  American Depository Shares

AGC-ICC —  Assured Guaranty Corporation - Insured Custody Certificates

AGM —  Assured Guaranty Municipal

AMBAC —  American Municipal Bond Assurance Corporation

AMT —  Alternative Minimum Tax

AUD —  Australian Dollar

BAN —  Bond Anticipation Notes

BHAC —  Berkshire Hathaway Assurance Corporation

BRL —  Brazil Real

CAB —  Capital Appreciation Bond

CAD —  Canadian Dollar

CCAB —  Convertible Capital Appreciation Bond

CDA —  Community Development Authority

CDO —  Collateralized Debt Obligation

CHF —  Swiss Franc

COP —  Certificate of Participation

CR —  Custody Receipts

DKK —  Danish Krone

DRIVER —  Derivative Inverse Tax-Exempt Receipts

DW&P —  Department of Water & Power

DWR —  Department of Water Resources

ECFA —  Educational & Cultural Facilities Authority

EDA —  Economic Development Authority

EDFA —  Economic Development Finance Authority

ETF —  Exchange-Traded Fund

EUR —  Euro

FFCB —  Federal Farm Credit Bank

FGIC —  Financial Guaranty Insurance Corporation

FHA —  Federal Housing Authority

FHLB —  Federal Home Loan Bank

FHLMC —  Federal Home Loan Mortgage Corporation

FNMA —  Federal National Mortgage Association

FSA —  Farm Service Agency

GBP —  Great British Pound

GDR —  Global Depository Receipt

GNMA —  Government National Mortgage Association

GO —  General Obligation

HCFR —  Healthcare Facilities Revenue

HEFA —  Health & Educational Facilities Authority

HEFAR —  Higher Education Facilities Authority Revenue

HFA —  Housing Finance Authority

HFFA —  Health Facilities Financing Authority

HKD —  Hong Kong Dollar

HUF —  Hungarian Forint

IBC —  Insured Bond Certificate

IDA —  Industrial Development Authority

IDAG —  Industrial Development Agency

IDR —  Industrial Development Revenue

IEP —  Irish Pound

JPY —  Japanese Yen

KRW —  Republic of Korea Won

LIBOR —  London Interbank Offered Rate

LLC —  Limited Liability Company

LLP —  Limited Liability Partnership

LOC —  Letter of Credit

LP —  Limited Partnership

MBIA —  Municipal Bond Insurance Association

MFHR —  Multi-Family Housing Revenue

MTN —  Medium Term Note

MUD —  Municipal Utility District

MXN —  Mexican Peso

MYR —  Malaysian Ringgit

NATL-RE —  National Public Finance Guarantee Corporation

NOK —  Norwegian Krone

NZD —  New Zealand Dollar

PCFA —  Pollution Control Finance Authority

PCR —  Pollution Control Revenue

PFA —  Public Finance Authority

PFFA —  Public Facilities Financing Authority

PFOTER —  Puttable Floating Option Tax-Exempt Receipts

plc —  Public Limited Company

PLN —  Polish Zloty

PUTTER —  Puttable Tax-Exempt Receipts

R&D —  Research & Development

RDA —  Redevelopment Authority

RDFA —  Redevelopment Finance Authority

REIT —  Real Estate Investment Trust

ROC —  Reset Option Certificates

SAVRS —  Select Auction Variable Rate Securities

SBA —  Small Business Authority

SEK —  Swedish Krona

SFHR —  Single Family Housing Revenue

SFMR —  Single Family Mortgage Revenue

SGD —  Singapore Dollar

SKK —  Slovakian Koruna

SPDR —  Standard & Poor’s Depositary Receipts

TAN —  Tax Anticipation Notes

TBA —  To Be Announced

TIPS —  Treasury Inflation-Protected Securities

TRAN —  Tax Revenue Anticipation Notes

TCR —  Transferable Custody Receipts

TRY —  Turkish Lira

TTFA —  Transportation Trust Fund Authority

TVA —  Tennessee Valley Authority

XLCA —  XL Capital Assurance

ZAR —  South African Rand

FOR MORE INFORMATION

More information about Wells Fargo Advantage Funds is available free upon request. To obtain literature, please write, e-mail, visit the Fund’s Web site, or call:

Wells Fargo Advantage Funds

P.O. Box 8266

Boston, MA 02266-8266

E-mail: wfaf@wellsfargo.com

Web site: www.wellsfargo.com/advantagefunds

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

This report and the financial statements contained herein are submitted for the general information of the shareholders of Wells Fargo Advantage Funds. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. For a prospectus containing more complete information, including charges and expenses, call 1-800-222-8222 or visit the Fund’s Web site at www.wellsfargo.com/advantagefunds. Please consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. This and other information about Wells Fargo Advantage Funds can be found in the current prospectus. Read the prospectus carefully before you invest or send money.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

© 2012 Wells Fargo Funds Management, LLC. All rights reserved.

207575 02-12

AVT5/AR151 12-11

Wells Fargo Advantage

VT Opportunity Fund^SM

Annual Report

December 31, 2011

Reduce clutter. Save trees.

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

Contents

Letter to Shareholders	2
Performance Highlights	5
Fund Expenses	9
Portfolio of Investments	10
Financial Statements
Statement of Assets and Liabilities	15
Statement of Operations	16
Statements of Changes in Net Assets	17
Financial Highlights	18
Notes to Financial Statements	20
Report of Independent Registered Public Accounting Firm	26
Other Information	27
List of Abbreviations	30

The views expressed and any forward-looking statements are as of December 31, 2011, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Funds Management, LLC. Discussions of individual securities, or the markets generally, or any Wells Fargo Advantage Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements; the views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Funds Management, LLC, disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

WELLS FARGO INVESTMENT HISTORY

1932	Keystone creates one of the first mutual fund families.
1971	Wells Fargo & Company introduces one of the first institutional index funds.
1978	Wells Fargo applies Markowitz and Sharpe’s research on Modern Portfolio Theory to introduce one of the industry’s first Tactical Asset Allocation (TAA) models in institutional separately managed accounts.
1984	Wells Fargo Stagecoach Funds launches its first asset allocation fund.
1989	The Tactical Asset Allocation (TAA) Model is first applied to Wells Fargo’s asset allocation mutual funds.
1994	Wells Fargo introduces the LifePath Funds, one of the first suites of target date funds (now the Wells Fargo Advantage Dow Jones Target Date FundsSM ).
1996	Evergreen Investments and Keystone Funds merge.
1997	Wells Fargo launches Wells Fargo Advantage WealthBuilder PortfoliosSM, a fund-of-funds suite of products that includes the use of quantitative models to shift assets among investment styles.
1999	Norwest Advantage Funds and Stagecoach Funds are reorganized into Wells Fargo Funds after the merger of Norwest and Wells Fargo.
2002	Evergreen Retail and Evergreen Institutional companies form the umbrella asset management company, Evergreen Investments.
2005	The integration of Strong Funds with Wells Fargo Funds creates Wells Fargo Advantage Funds, resulting in one of the top 20 mutual fund companies in the United States.
2006	Wells Fargo Advantage Funds relaunches the target date product line as Wells Fargo Advantage Dow Jones Target Date Funds.
2010	The mergers and reorganizations of Evergreen and Wells Fargo Advantage mutual funds are completed, unifying the families under the brand of Wells Fargo Advantage Funds.

Wells Fargo Advantage Funds^®

Wells Fargo Advantage Funds skillfully guides institutions, financial advisors, and individuals through the investment terrain to help them reach their financial objectives. Everything we do on behalf of investors is backed by our unique combination of qualifications.

Strength

Our organization is built on the standards of integrity and service established by our parent company—Wells Fargo & Company—more than 150 years ago. And, because we’re part of a highly diversified financial enterprise, we offer the depth of resources to help investors succeed.

Expertise

Our multi-boutique model offers investors access to the independent thinking of premier investment managers that have been chosen for their time-tested strategies. While each team specializes in a specific investment strategy, collectively they provide investors a wide choice of distinct investment styles. Our dedication to investment excellence doesn’t end with our expertise in manager selection—risk management, analysis, and rigorous ongoing review seek to ensure each manager’s investment process remains consistent.

Partnership

Our collaborative approach is built around understanding the needs and goals of our clients. By adhering to core principles of sound judgment and steady guidance, we support you through every stage of the investment decision process.

Carefully consider a fund’s investment objectives, risks, charges, and expenses before investing. For a current prospectus and, if available, a summary prospectus, containing this and other information, visit wellsfargo.com/advantagefunds. Read it carefully before investing.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds^®. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

“Dow Jones^®” and “Dow Jones Target Date Indexes^SM” are service marks of Dow Jones Trademark Holdings, LLC (“Dow Jones”), have been licensed to CME Group Index Services LLC (“CME Indexes”) and have been sublicensed for use for certain purposes by Global Index Advisors, Inc, and Wells Fargo Funds Management, LLC. The Wells Fargo Advantage Dow Jones Target Date Funds^SM based on the Dow Jones Target Date Indexes^SM, are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes or their respective affiliates and none of them makes any representation regarding the advisability of investing in such product(s).

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

Not part of the annual report.

Wells Fargo Advantage Funds offers more than 110 mutual funds across a wide range of asset classes, representing over $216 billion in assets under management, as of December 31, 2011.

Equity Funds
Asia Pacific Fund	Global Opportunities Fund	Premier Large Company Growth Fund
C&B Large Cap Value Fund	Growth Fund	Small Cap Opportunities Fund
C&B Mid Cap Value Fund	Health Care Fund	Small Cap Value Fund
Capital Growth Fund	Index Fund	Small Company Growth Fund
Common Stock Fund	International Equity Fund	Small Company Value Fund
Disciplined U.S. Core Fund	International Value Fund	Small/Mid Cap Core Fund
Discovery Fund†	Intrinsic Small Cap Value Fund	Small/Mid Cap Value Fund
Diversified Equity Fund	Intrinsic Value Fund	Social Sustainability Fund†
Diversified International Fund	Intrinsic World Equity Fund	Special Mid Cap Value Fund
Diversified Small Cap Fund	Large Cap Core Fund	Special Small Cap Value Fund
Emerging Growth Fund	Large Cap Growth Fund	Specialized Technology Fund
Emerging Markets Equity Fund	Large Company Value Fund	Strategic Large Cap Growth Fund
Endeavor Select Fund†	Omega Growth Fund	Traditional Small Cap Growth Fund
Enterprise Fund†	Opportunity Fund†	Utility and Telecommunications Fund
Equity Value Fund	Precious Metals Fund
Bond Funds
Adjustable Rate Government Fund	Inflation-Protected Bond Fund	Short-Term Bond Fund
California Limited-Term Tax-Free Fund	Intermediate Tax/AMT-Free Fund	Short-Term High Yield Bond Fund
California Tax-Free Fund	International Bond Fund	Short-Term Municipal Bond Fund
Colorado Tax-Free Fund	Minnesota Tax-Free Fund	Strategic Municipal Bond Fund
Government Securities Fund	Municipal Bond Fund	Total Return Bond Fund
High Income Fund	North Carolina Tax-Free Fund	Ultra Short-Term Income Fund
High Yield Bond Fund	Pennsylvania Tax-Free Fund	Ultra Short-Term Municipal Income Fund
Income Plus Fund	Short Duration Government Bond Fund	Wisconsin Tax-Free Fund
Asset Allocation Funds
Asset Allocation Fund	WealthBuilder Equity Portfolio†	Target 2020 Fund†
Conservative Allocation Fund	WealthBuilder Growth Allocation Portfolio†	Target 2025 Fund†
Diversified Capital Builder Fund	WealthBuilder Growth Balanced Portfolio†	Target 2030 Fund†
Diversified Income Builder Fund	WealthBuilder Moderate Balanced Portfolio†	Target 2035 Fund†
Growth Balanced Fund	WealthBuilder Tactical Equity Portfolio†	Target 2040 Fund†
Index Asset Allocation Fund	Target Today Fund†	Target 2045 Fund†
Moderate Balanced Fund	Target 2010 Fund†	Target 2050 Fund†
WealthBuilder Conservative Allocation Portfolio†	Target 2015 Fund†	Target 2055 Fund†
Money Market Funds
100% Treasury Money Market Fund	Heritage Money Market Fund†	National Tax-Free Money Market Fund
California Municipal Money Market Fund	Money Market Fund	Prime Investment Money Market Fund
Cash Investment Money Market Fund	Municipal Cash Management Money Market Fund	Treasury Plus Money Market Fund
Government Money Market Fund	Municipal Money Market Fund
Variable Trust Funds1
VT Discovery Fund†	VT Intrinsic Value Fund	VT Small Cap Growth Fund
VT Index Asset Allocation Fund	VT Omega Growth Fund	VT Small Cap Value Fund
VT International Equity Fund	VT Opportunity Fund†	VT Total Return Bond Fund

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Wells Fargo Advantage Money Market Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.

1. The Variable Trust Funds are generally available only through insurance company variable contracts.

† In this report, the Wells Fargo Advantage Discovery Fund^SM, Wells Fargo Advantage Endeavor Select Fund^SM, Wells Fargo Advantage Enterprise Fund^SM, Wells Fargo Advantage Opportunity Fund^SM, Wells Fargo Advantage Social Sustainability Fund^SM, Wells Fargo Advantage WealthBuilder Conservative Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Equity Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Moderate Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Tactical Equity Portfolio^SM, Wells Fargo Advantage Dow Jones Target Today Fund^SM, Wells Fargo Advantage Dow Jones Target 2010 Fund^SM, Wells Fargo Advantage Dow Jones Target 2015 Fund^SM, Wells Fargo Advantage Dow Jones Target 2020 Fund^SM, Wells Fargo Advantage Dow Jones Target 2025 Fund^SM, Wells Fargo Advantage Dow Jones Target 2030 Fund^SM, Wells Fargo Advantage Dow Jones Target 2035 Fund^SM, Wells Fargo Advantage Dow Jones Target 2040 Fund^SM, Wells Fargo Advantage Dow Jones Target 2045 Fund^SM, Wells Fargo Advantage Dow Jones Target 2050 Fund^SM, Wells Fargo Advantage Dow Jones Target 2055 Fund^SM, Wells Fargo Advantage Heritage Money Market Fund^SM, Wells Fargo Advantage VT Discovery Fund^SM, and Wells Fargo Advantage VT Opportunity Fund^SM are referred to as the Discovery Fund, Endeavor Select Fund, Enterprise Fund, Opportunity Fund, Social Sustainability Fund, WealthBuilder Conservative Allocation Portfolio, WealthBuilder Equity Portfolio, WealthBuilder Growth Allocation Portfolio, WealthBuilder Growth Balanced Portfolio, WealthBuilder Moderate Balanced Portfolio, WealthBuilder Tactical Equity Portfolio, Target Today Fund, Target 2010 Fund, Target 2015 Fund, Target 2020 Fund, Target 2025 Fund, Target 2030 Fund, Target 2035 Fund, Target 2040 Fund, Target 2045 Fund, Target 2050 Fund, Target 2055 Fund, Heritage Money Market Fund, VT Discovery Fund, and VT Opportunity Fund, respectively.

Not part of the annual report.

2 Wells Fargo Advantage VT Opportunity Fund Letter to Shareholders

Karla M. Rabusch,

President

Wells Fargo Advantage Funds

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

Dear Valued Shareholder:

We’re pleased to offer you this annual report for the Wells Fargo Advantage VT Opportunity Fund for the 12-month period that ended December 31, 2011.

For the full 12-month period, most of the major domestic equity indexes posted either modest gains or relatively mild losses. However, the market’s 12-month return figures mask the uneven path that it traced throughout the year as investors had to contend with a variety of global and domestic headwinds. Whatever the future holds, we continue to believe that most investors can benefit from adhering to a well-diversified investment strategy. Over the long-term, such a strategy may allow you to balance risks and opportunities as you pursue your financial goals in a dynamic market landscape.

The economic recovery gained traction as the year progressed.

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

2011 opened on a note of mounting optimism regarding the strength of the recovery, yet a batch of disappointing economic data in the spring and summer cast renewed doubts on the sustainability of the recovery. In September, it was reported that U.S. gross domestic product (GDP) grew at a mere 1.3% annual rate in the second quarter of 2011, following anemic growth at an annual rate of 0.4% in the first quarter. According to the December estimate, GDP growth accelerated to an annual rate of 1.8% in the third quarter, reigniting hopes for a sustainable recovery. Those hopes were buoyed by widespread anticipation of even stronger GDP growth in the fourth quarter. By the end of the 12-month period, few economists believed that the U.S. economy was in danger of sliding back into recession, although many expected a sluggish growth environment in 2012.

The struggling housing and labor markets slowed growth.

As has been the case throughout the recovery, the housing and labor markets continued to restrain economic momentum during 2011.

The beleaguered housing market has arguably exerted the biggest drag on growth. Despite intermittent signs of improvement, ongoing weakness in sales of both new and existing homes has put considerable downward pressure on prices. On the other hand, the labor market took a decided turn for the better in the latter half of the year: initial unemployment claims have eased in recent months, and the private sector has been steadily adding jobs. The pace of hiring, while not brisk, was sufficient to push the U.S. unemployment rate down to 8.5% as of December 2011—still well above its historical average, but at its lowest level since February 2009. Many observers expect the unemployment rate to decline further in 2012, which could act as a tailwind for consumer spending—widely viewed as one of the keys to long-term economic growth.

The Federal Reserve announced that it will keep rates low until 2013.

Consumers have already demonstrated some resilience in their spending—even in the face of higher energy costs. Oil prices skyrocketed in early 2011 before retreating later in the year, only to spike again during the fourth quarter. Yet “core” inflation, which excludes volatile energy and food prices, remained fairly benign throughout the year.

Letter to Shareholders Wells Fargo Advantage VT Opportunity Fund 3

With inflation in check, the Federal Reserve (Fed) held its target range for the federal funds rate—a proxy for short-term interest rates—steady at 0% to 0.25%. Following its August 9 meeting, the Federal Open Market Committee (FOMC) issued a statement explaining that economic conditions were likely to warrant exceptionally low levels for the federal funds rate through at least mid-2013. In addition, the Fed carried out its second round of quantitative easing (QE2) in an effort to promote a more robust economic expansion. The stimulus program was completed as scheduled in June 2011. In September, the Fed launched yet another stimulus program—dubbed “Operation Twist”—that is designed to keep intermediate- and longer-term yields relatively low. The goal with keeping longer-term rates low is to encourage lending activity to spark business investments and home purchases, which, in turn, may provide support for a more sustainable economic recovery.

Market volatility was a dominant theme throughout most of 2011.

Despite pockets of turbulence sparked by the natural disasters in Japan and geopolitical turmoil in North Africa and the Middle East, the U.S. equity market performed very well from January through April of 2011. Some upbeat economic news, better-than-expected corporate profits, and investor enthusiasm about QE2 were among the catalysts for the market’s four-month advance.

In May and June, the market climate shifted to one of anxiety over the increasingly fragile state of the U.S. and global economies. As spring gave way to summer, investors not only worried that the U.S. might be on the brink of recession, they also feared that Europe’s sovereign debt problems could spiral out of control if a Greek default triggered financial contagion across the continent. In July and August, investor sentiment was further undermined by partisan wrangling over the federal debt ceiling and the Standard & Poor’s downgrade of the U.S. credit rating. The barrage of unsettling headlines led to heightened market volatility and sharply falling stock prices in the third quarter of 2011. Although volatility persisted into the fourth quarter, the market was able to rebound amid improved economic data and hopes for a resolution to the European crisis.

For the full 12-month period, the S&P 500 Index¹ of large-cap stocks achieved a total return of 2.1%. The Russell Midcap^® Index² and the Russell 2000^® Index³ of small-cap stocks lost 1.6% and 4.2%, respectively. International stocks fared worse than their U.S. counterparts, with the MSCI EAFE Index⁴ shedding 14.8%.

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 Russell Midcap^® Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 25% of the total market capitalization of the Russell 1000^® Index. You cannot invest directly in an index.

3. The Russell 2000^® Index measures the performance of the 2,000 smallest companies in the Russell 3000^® Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index. You cannot invest directly in an index.

4. The Morgan Stanley Capital International Europe, Australasia, and Far East (“MSCI EAFE”) Stock Index is an unmanaged group of securities widely regarded by investors to be representations of the stock markets of Europe, Australasia, and the Far East. You cannot invest directly in an index. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

4 Wells Fargo Advantage VT Opportunity Fund Letter to Shareholders

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors.

Recent events have not altered our message to shareholders.

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors. Bear in mind that many investors who indiscriminately sold their equity investments during the severe market downturn of 2008 to 2009 missed out on the impressive two-year rally that followed. In our opinion, the lesson to be learned from these dramatic market events is that, for many investors, simply building and maintaining a well-diversified⁵ investment plan is the best long-term strategy.

To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Advantage Funds offers more than 110 mutual funds and other investments spanning a broad range of asset classes and investment styles. While 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.

Thank you for choosing to invest with Wells Fargo Advantage Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs. For current information about your fund investments, contact your investment professional, visit our website at www.wellsfargo.com/advantagefunds, or call us directly at 1-800-222-8222. We are available 24 hours a day, 7 days a week.

Sincerely,

Karla M. Rabusch

President

Wells Fargo Advantage Funds

5. Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Opportunity Fund 5

INVESTMENT OBJECTIVE

The Fund seeks long-term capital appreciation.

ADVISER

Wells Fargo Funds Management, LLC

SUB-ADVISER

Wells Capital Management Incorporated

PORTFOLIO MANAGERS

Ann M. Miletti

Thomas D. Wooden, CFA

FUND INCEPTION

May 8, 1992

12 MONTH TOTAL RETURN AS OF DECEMBER 31, 2011
Class 2	(5.52)%
Russell Midcap® Index1	(1.55)%

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

The Adviser has committed through July 18, 2013 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain other expenses at 1.00% for Class 2. The Fund’s gross and net expense ratios are 1.12% and 1.01%, respectively, for Class 2 shares. Without these reductions, the Fund’s returns would have been lower.

1. The Russell Midcap^® Index measures the performance of the 800 smallest companies in the Russell 1000^® Index, which represent approximately 25% of the total market capitalization of the Russell 1000 Index. You cannot invest directly in an index.

2. The chart compares the performance of the Wells Fargo Advantage VT Opportunity Fund Class 2 for the most recent ten years of the Fund with the Russell Midcap Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

6 Wells Fargo Advantage VT Opportunity Fund Performance Highlights (Unaudited)

MANAGER’S DISCUSSION

Fund highlights

n The Fund underperformed its benchmark, the Russell Midcap^® Index, for the 12-month period that ended December 31, 2011.

n Holdings in the consumer discretionary, industrials, and health care sectors detracted from relative returns, more than offsetting positive stock selection in the information technology (IT) and financials sectors. A lack of exposure to utilities—which typically do not have much in the way of growth potential but do well in defensive markets—also hindered relative results.

n Economic concerns fostered stock market volatility, particularly in cyclical areas of the market. Nevertheless, our process remained disciplined. We continued to look for well-positioned businesses with solid business models, strong management teams, and favorable trends that trade at attractive discounts to our estimated private market value (PMV).

TEN LARGEST EQUITY HOLDINGS3 (AS OF DECEMBER 31, 2011)
Praxair Incorporated	1.89%
Global Payments Incorporated	1.67%
Kroger Company	1.67%
Branch Banking & Trust Corporation	1.66%
Apollo Group Incorporated Class A	1.65%
National Oilwell Varco Incorporated	1.65%
Fifth Third Bancorp	1.61%
Kohl’s Corporation	1.60%
Equinix Incorporated	1.59%
RenaissanceRe Holdings Limited	1.59%

Stock selection and sector weights both contributed to the Fund’s investment results.

The IT sector was again the top contributor to relative performance during the 12-month period. Positive stock selection—especially in areas related to the continuing move toward digital mobility, storage, and cloud computing—aided results. Additionally, key holdings in companies that focus on data processing added value, including MasterCard Incorporated and Alliance Data Systems Incorporated. Both companies benefited from increased usage of credit and debit payments in lieu of cash.

In the industrials sector, broad-based fears of another recession in the U.S. depressed the performance of a number of industrials holdings, though renewed economic optimism did help the group later in the year. Overall stock selection in the group detracted from results, with Hertz Global Holdings Incorporated among the detractors. We continue to like Hertz; Hertz rents equipment for new construction and benefits from a trend toward renting versus owning equipment, as many firms liquidated their equipment inventories during the last economic downturn and are not yet ready to commit long-term capital for repurchases.

The Fund’s consumer discretionary holdings detracted from overall results, with mixed performance in the retail group. Retailers targeting higher-end consumers fared relatively well. Partly as a result, Fund holding Nordstrom Incorporated gained nearly 19% for the year. However, other retailers with more exposure to middle-income buyers, including holdings in Kohl’s Corporation and Target Corporation, posted losses as economic concerns stunted consumer spending. Similarly, office supply retailer Staples Incorporated posted weak revenue growth because of fierce competition and customers’ budgetary cutbacks. As a result, we sold the position in November 2011.

3. The ten largest equity holdings are calculated based on the value of the securities divided by total net assets of the Fund. Holdings are subject to change and may have changed since the date specified.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Opportunity Fund 7

SECTOR DISTRIBUTION⁴
(AS OF DECEMBER 31, 2011)

Our methodology of buying stocks that are selling at a discount to their PMVs and selling stocks that approach their PMVs continues.

Our discipline allows us to be patient with stocks that are out of favor with the market. When we entered 2011, we believed that we would see a slow-growth economic environment, with growth in gross domestic product (GDP) in the range of 0%–2%. That scenario largely came to pass, and, in fact, GDP forecasts for the full year are probably better than we would have expected at the beginning of the year. If someone had told us that GDP in the U.S. would be near 2% and that many companies

would report double-digit earnings growth in 2011, we would not have anticipated the extreme market movements that we saw during the year. It seemed that the market was driven less by fundamentals and more by macroeconomic news and fears of what would happen if a country such as Greece or Italy were to default on its sovereign debt.

Uncertainty remains, but opportunities remain as well.

Looking ahead, we remain cautiously optimistic. Based on our 2012 assessment of PMVs for the companies we own, the Fund appears attractively valued with an approximate 34% undervaluation. This number doesn’t mean that we expect the portfolio to appreciate by 34% in a year, because each individual company is at a different stage in its cycle and it can take years for a stock to reach full valuation. However, we do think this level of undervaluation suggests that our portfolio has solid potential for future appreciation.

At the same time, remaining market headwinds will likely create some investor uneasiness in the near term as we face the need for European sovereign debt refinancing, probable additional downgrades by rating agencies, and even political bickering in the U.S. and abroad. We believe that stocks are attractively valued, and if earnings results remain positive, at some point the market should reward growth through higher stock prices. Most of the Fund’s holdings have attractive balance sheets, have posted solid earnings, are flush with cash, and have improved their cost structures. We acknowledge that it will probably take a bit more confidence and visibility before investors react positively to those factors.

4. Sector distribution is subject to change and is calculated based on the total long-term investments of the Fund.

8 Wells Fargo Advantage VT Opportunity Fund Performance Highlights (Unaudited)

AVERAGE ANNUAL TOTAL RETURN⁵ (%) (AS OF DECEMBER 31, 2011)

													Expense Ratios6
	Inception Date		6 Months*			1 Year			5 Year		10 Year		Gross		Net7
Class 1		08/26/2011		(11.69	)		(5.41	)		2.01		4.72		0.87%		0.76%
Class 2		05/08/1992		(11.79	)		(5.52	)		1.99		4.70		1.12%		1.01%
Russell Midcap® Index				(8.91	)		(1.55	)		1.41		6.99

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

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. Smaller company stocks tend to be more volatile and less liquid than those of larger companies. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to foreign investment risk. Consult the Fund’s prospectus for additional information on these and other risks.

Please refer to the prospectus provided by your participating insurance company for detailed information describing the separate accounts for information regarding surrender charges, mortality and expense risk fees and other charges that may be assessed by the participating insurance companies.

5. Historical performance shown for Class 1 shares prior to their inception reflects the performance of Class 2 shares, and includes the higher expenses applicable to Class 2 shares. If these expenses had not been included, returns would be higher.

6. Reflects the expense ratios as stated in the most recent prospectuses.

7. The Adviser has committed through July 18, 2013 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain expenses, at 0.75% for Class 1 and 1.00% for Class 2 shares. Without this cap, the Fund’s returns would have been lower.

Fund Expenses (Unaudited) Wells Fargo Advantage VT Opportunity Fund 9

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution (12b-1) 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, 2011 to December 31, 2011.

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 separate account charges assessed by participating insurance companies. 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 separate account charges assessed by participating insurance companies were included, your costs would have been higher.

	Beginning Account Value 07-01-2011		Ending Account Value 12-31-2011		Expenses Paid During the Period¹		Net Annual Expense Ratio
Class 1
Actual	$	1,000.00	$	883.10	$	3.56		0.75	%
Hypothetical (5% return before expenses)	$	1,000.00	$	1,021.42	$	3.82		0.75	%
Class 2
Actual	$	1,000.00	$	882.08	$	4.84		1.02	%
Hypothetical (5% return before expenses)	$	1,000.00	$	1,020.06	$	5.19		1.02	%

1. Expenses paid is equal to the annualized 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).

10 Wells Fargo Advantage VT Opportunity Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Common Stocks: 97.78%
Consumer Discretionary: 18.87%
Auto Components: 1.31%
Johnson Controls Incorporated		102,249	$	3,196,304
Diversified Consumer Services: 1.65%
Apollo Group Incorporated Class A†«		74,798		4,029,368
Hotels, Restaurants & Leisure: 1.27%
Carnival Corporation		94,788		3,093,880
Household Durables: 1.50%
Tempur-Pedic International Incorporated†		16,619		872,996
Whirlpool Corporation«		58,915		2,795,517
				3,668,513
Internet & Catalog Retail: 1.29%
Liberty Interactive Corporation Series A†		193,390		3,135,819
Media: 6.19%
Cablevision Systems Corporation New York Group Class A		177,319		2,521,476
Comcast Corporation Class A		148,877		3,507,542
Discovery Communications Incorporated†		73,405		2,767,369
Liberty Global Incorporated Class A†		64,618		2,651,277
Omnicom Group Incorporated«		81,475		3,632,156
				15,079,820
Multiline Retail: 4.55%
Kohl’s Corporation«		78,790		3,888,287
Nordstrom Incorporated		70,305		3,494,862
Target Corporation		72,291		3,702,745
				11,085,894
Specialty Retail: 1.11%
Best Buy Company Incorporated«		115,315		2,694,912
Consumer Staples: 4.50%
Food & Staples Retailing: 1.67%
Kroger Company		167,739		4,062,639
Food Products: 1.36%
General Mills Incorporated		82,164		3,320,247
Household Products: 1.47%
Church & Dwight Company Incorporated		78,151		3,576,190
Energy: 7.62%
Energy Equipment & Services: 3.64%
McDermott International Incorporated†		174,490		2,008,380
National Oilwell Varco Incorporated		59,072		4,016,305
Weatherford International Limited†		194,511		2,847,641
				8,872,326

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Opportunity Fund 11

Security Name	Shares		Value
Oil, Gas & Consumable Fuels: 3.98%
Apache Corporation		25,605	$	2,319,301
Newfield Exploration Company†		82,121		3,098,425
Peabody Energy Corporation«		51,103		1,692,020
Southwestern Energy Company†		80,921		2,584,617
				9,694,363
Financials: 17.00%
Capital Markets: 2.71%
Invesco Limited		161,282		3,240,155
TD Ameritrade Holding Corporation		215,602		3,374,171
				6,614,326
Commercial Banks: 4.51%
Branch Banking & Trust Corporation«		160,830		4,048,091
City National Corporation«		68,328		3,018,731
Fifth Third Bancorp		308,782		3,927,707
				10,994,529
Consumer Finance: 1.40%
MasterCard Incorporated		9,142		3,408,320
Diversified Financial Services: 0.76%
InterContinental Exchange Incorporated†		15,290		1,843,210
Insurance: 5.42%
ACE Limited		49,025		3,437,633
Reinsurance Group of America Incorporated		59,919		3,130,768
RenaissanceRe Holdings Limited«		52,098		3,874,528
Willis Group Holdings plc		71,002		2,754,878
				13,197,807
REIT: 2.20%
BioMed Realty Trust Incorporated«		177,320		3,205,946
LaSalle Hotel Properties		89,315		2,162,316
				5,368,262
Health Care: 10.24%
Health Care Equipment & Supplies: 3.90%
C.R. Bard Incorporated		33,864		2,895,372
Covidien plc		78,627		3,539,001
Zimmer Holdings Incorporated«		57,647		3,079,503
				9,513,876
Health Care Providers & Services: 2.44%
Health Management Associates Incorporated Class A†		424,223		3,126,524
McKesson Corporation		36,163		2,817,459
				5,943,983

12 Wells Fargo Advantage VT Opportunity Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Life Sciences Tools & Services: 3.90%
Covance Incorporated†		71,424	$	3,265,505
Thermo Fisher Scientific Incorporated†		71,808		3,229,206
Waters Corporation†«		40,522		3,000,654
				9,495,365
Industrials: 14.95%
Airlines: 1.94%
Delta Air Lines Incorporated†		387,484		3,134,746
United Continental Holdings Incorporated†«		84,721		1,598,685
				4,733,431
Commercial Services & Supplies: 1.47%
Republic Services Incorporated		130,196		3,586,900
Construction & Engineering: 0.84%
Quanta Services Incorporated†«		94,997		2,046,235
Electrical Equipment: 4.18%
AMETEK Incorporated		74,972		3,156,321
Babcock & Wilcox Company†		118,429		2,858,876
Regal-Beloit Corporation		37,288		1,900,569
Rockwell Automation Incorporated		30,943		2,270,288
				10,186,054
Machinery: 2.70%
Dover Corporation«		57,837		3,357,438
Pall Corporation«		56,270		3,215,831
				6,573,269
Professional Services: 1.10%
Manpower Incorporated		74,555		2,665,341
Road & Rail: 2.72%
Hertz Global Holdings Incorporated†«		313,573		3,675,076
J.B. Hunt Transport Services Incorporated«		65,534		2,953,617
				6,628,693
Information Technology: 16.74%
Communications Equipment: 1.15%
Polycom Incorporated†		172,064		2,804,643
Computers & Peripherals: 1.35%
NetApp Incorporated†«		91,045		3,302,202
Electronic Equipment, Instruments & Components: 1.29%
Amphenol Corporation Class A		69,318		3,146,344
Internet Software & Services: 1.59%
Equinix Incorporated†		38,137		3,867,092

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Opportunity Fund 13

Security Name	Shares		Value
IT Services: 3.90%
Alliance Data Systems Corporation†«		27,320	$	2,836,909
Cognizant Technology Solutions Corporation Class A†		40,318		2,592,851
Global Payments Incorporated		85,920		4,070,890
				9,500,650
Semiconductors & Semiconductor Equipment: 5.06%
Altera Corporation		80,420		2,983,582
ARM Holdings plc		330,325		3,036,929
Avago Technologies Limited		102,873		2,968,915
ON Semiconductor Corporation†		431,273		3,329,428
				12,318,854
Software: 2.40%
Autodesk Incorporated†		101,415		3,075,917
Red Hat Incorporated†		66,878		2,761,393
				5,837,310
Materials: 6.72%
Chemicals: 1.89%
Praxair Incorporated		42,991		4,595,738
Containers & Packaging: 4.35%
Bemis Company Incorporated«		125,830		3,784,966
Crown Holdings Incorporated†«		99,068		3,326,703
Owens-Illinois Incorporated†		179,732		3,483,206
				10,594,875
Metals & Mining: 0.48%
Agnico-Eagle Mines Limited		32,529		1,181,453
Telecommunication Services: 1.14%
Wireless Telecommunication Services: 1.14%
American Tower Corporation Class A		46,241		2,774,919
Total Common Stocks (Cost $226,811,384)				238,233,956
	Principal
Other: 0.63%
Gryphon Funding Limited, Pass-Through Entity(a)(i)(v)	$	2,010,641		562,980
VFNC Corporation, Pass-Through Entity, 0.30%(a)(i)(v)±144A		2,288,715		984,147
Total Other (Cost $739,701)				1,547,127

14 Wells Fargo Advantage VT Opportunity Fund Portfolio of Investments—December 31, 2011

Security Name	Yield			Shares		Value
Short-Term Investments: 22.08%
Investment Companies: 22.08%
Wells Fargo Advantage Cash Investment Money Market Fund, Institutional Class(l)(u)		0.04	%		4,870,568	$	4,870,568
Wells Fargo Securities Lending Cash Investments, LLC(v)(l)(u)(r)		0.12			48,927,267		48,927,267
Total Short-Term Investments (Cost $53,797,835)							53,797,835

Total Investments in Securities (Cost $281,348,920)*	120.49	%		293,578,918
Other Assets and Liabilities, Net	(20.49	)		(49,927,195	)
Total Net Assets	100.00	%	$	243,651,723

† Non-income earning security.

« All or a portion of this security is on loan.

(a) Security is fair valued by the Management Valuation Team, and in certain instances by the Board of Trustees, in accordance with procedures approved by the Board of Trustees.

(i) Illiquid security for which the designation as illiquid is unaudited.

(v) Security represents investment of cash collateral received from securities on loan.

± Variable rate investment.

144A Security that may be resold to “qualified institutional buyers” under Rule 144A or security offered pursuant to Section 4(2) of the Securities Act of 1933, as amended.

(l) Investment in an affiliate.

(u) Rate shown is the 7-day annualized yield at period end.

(r) The investment company is exempt from registration under Section 3(c)(7) of the 1940 Act.

* Cost for federal income tax purposes is $285,256,848 and net unrealized appreciation (depreciation) consists of:

Gross unrealized appreciation	$	26,708,339
Gross unrealized depreciation		(18,386,269	)
Net unrealized appreciation	$	8,322,070

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

Statement of Assets and Liabilities—December 31, 2011 Wells Fargo Advantage VT Opportunity Fund 15

Assets
Investments
In unaffiliated securities (including securities on loan), at value	$	239,781,083
In affiliated securities, at value		53,797,835
Total investments, at value (see cost below)		293,578,918
Receivable for investments sold		809,863
Receivable for Fund shares sold		5,998
Receivable for dividends		211,467
Receivable for securities lending income		4,484
Total assets		294,610,730
Liabilities
Payable for investments purchased		96,302
Payable for Fund shares redeemed		932,421
Payable upon receipt of securities loaned		49,666,968
Advisory fee payable		139,498
Distribution fees payable		46,667
Due to other related parties		25,985
Accrued expenses and other liabilities		51,166
Total liabilities		50,959,007
Total net assets	$	243,651,723
NET ASSETS CONSIST OF
Paid-in capital	$	287,088,524
Undistributed net investment income		331,116
Accumulated net realized losses on investments		(55,997,915	)
Net unrealized gains on investments		12,229,998
Total net assets	$	243,651,723
COMPUTATION OF NET ASSET VALUE PER SHARE1
Net assets – Class 1	$	42,116,424
Shares outstanding – Class 1		2,420,549
Net asset value per share – Class 1		$17.40
Net assets – Class 2	$	201,535,299
Shares outstanding – Class 2		11,592,957
Net asset value per share – Class 2		$17.38
Total investments, at cost	$	281,348,920
Securities on loan, at value	$	48,435,704

1. The Fund has an unlimited number of authorized shares.

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

16 Wells Fargo Advantage VT Opportunity Fund Statement of Operations—Year Ended December 31, 2011

Investment income
Dividends*	$	2,345,751
Income from affiliated securities		6,874
Securities lending income, net		73,170
Total investment income		2,425,795
Expenses
Advisory fee		1,286,490
Administration fees
Fund level		98,961
Class 11		11,770
Class 2		146,567
Distribution fees
Class 2		458,022
Custody and accounting fees		20,029
Professional fees		25,736
Shareholder report expenses		15,836
Trustees’ fees and expenses		10,578
Other fees and expenses		7,900
Total expenses		2,081,889
Less: Fee waivers and/or expense reimbursements		(71,738	)
Net expenses		2,010,151
Net investment income		415,644
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains on investments		12,647,751
Net change in unrealized gains (losses) on investments		(16,138,693	)
Net realized and unrealized gains (losses) on investments		(3,490,942	)
Net decrease in net assets resulting from operations	$	(3,075,298	)
* Net of foreign dividend withholding taxes of		$2,417

1. Class commenced operations on August 26, 2011.

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

Statements of Changes in Net Assets Wells Fargo Advantage VT Opportunity Fund 17

	Year Ended December 31, 2011						Year Ended December 31, 2010
Operations
Net investment income				$	415,644					$	120,866
Net realized gains on investments					12,647,751						19,746,984
Net change in unrealized gains (losses) on investments					(16,138,693	)					14,072,322
Net increase (decrease) in net assets resulting from operations					(3,075,298	)					33,940,172
Distributions to shareholders from
Net investment income – Class 2					(228,148	)					(1,195,940	)1
	Shares						Shares
Capital share transactions
Proceeds from shares sold
Class 1		78,783	2		1,305,075	2		N/A			N/A
Class 2		721,399			13,833,446			826,626	1		13,114,185	1
					15,138,521						13,114,185
Reinvestment of distributions
Class 2		11,742			228,148			82,938	1		1,195,940	1
Payment for shares redeemed
Class 1		(201,134	)2		(3,415,950	)2		N/A			N/A
Class 2		(2,739,789	)		(49,078,548	)		(2,085,400	)1		(33,529,757	)1
					(52,494,498	)					(33,529,757	)
Net asset value of shares issued in acquisition
Class 1		2,542,900			42,011,395			N/A			N/A
Class 2		4,464,853			73,764,505			0			0
					115,775,900						0
Net increase (decrease) in net assets resulting from capital share transactions					78,648,071						(19,219,632	)
Total increase in net assets					75,344,625						13,524,600
Net assets
Beginning of period					168,307,098						154,782,498
End of period				$	243,651,723					$	168,307,098
Undistributed net investment income				$	331,116					$	88,428

1. After the close of business on July 16, 2010, existing shares of the Fund were renamed Class 2 shares.

2. Class commenced operations on August 26, 2011.

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

18 Wells Fargo Advantage VT Opportunity Fund Financial Highlights

(For a share outstanding throughout the period)

Class 1	Year Ended December 31, 20111
Net asset value, beginning of period		$16.52
Net investment income		0.04
Net realized and unrealized gains (losses) on investments		0.84
Total from investment operations		0.88
Net asset value, end of period		$17.40
Total return2		5.33	%
Ratios to average net assets (annualized)
Gross expenses		0.83	%
Net expenses		0.75	%
Net investment income		0.61	%
Supplemental data
Portfolio turnover rate		35	%
Net assets, end of period (000’s omitted)	$	42,116

1. For the period from August 26, 2011 (commencement of class operations) to December 31, 2011.

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

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

Financial Highlights Wells Fargo Advantage VT Opportunity Fund 19

(For a share outstanding throughout each period)

	Year Ended December 31,
Class 21	2011			2010			2009			2008			2007
Net asset value, beginning of period	$	18.42		$	15.01		$	10.16		$	22.03		$	24.02
Net investment income		0.03			0.02			0.11			0.12			0.21
Net realized and unrealized gains (losses) on investments		(1.04	)		3.51			4.74			(7.30	)		1.60
Total from investment operations		(1.01	)		3.53			4.85			(7.18	)		1.81
Distributions to shareholders from
Net investment income		(0.03	)		(0.12	)		0.00			(0.37	)		(0.16	)
Net realized gains		0.00			0.00			0.00			(4.32	)		(3.64	)
Total distributions to shareholders		(0.03	)		(0.12	)		0.00			(4.69	)		(3.80	)
Net asset value, end of period	$	17.38		$	18.42		$	15.01		$	10.16		$	22.03
Total return		(5.52	)%		23.76	%		47.74	%		(40.10	)%		6.63	%
Ratios to average net assets (annualized)
Gross expenses		1.07	%		1.18	%		1.32	%		1.21	%		1.19	%
Net expenses		1.04	%		1.07	%		1.07	%		1.07	%		1.07	%
Net investment income		0.18	%		0.08	%		0.39	%		0.47	%		0.74	%
Supplemental data
Portfolio turnover rate		35	%		40	%		50	%		70	%		64	%
Net assets, end of period (000’s omitted)		$201,535			$168,307			$154,782			$378,197			$779,286

1. After the close of business on July 16, 2010, existing shares of the Fund were renamed Class 2 shares.

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

20 Wells Fargo Advantage VT Opportunity Fund Notes to Financial Statements

1. ORGANIZATION

Wells Fargo Variable 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”). These financial statements report on Wells Fargo Advantage VT Opportunity 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

Investments in equity securities are valued each business day as of the close of regular trading on the New York Stock Exchange, which is usually 4:00 p.m. (Eastern Time). Securities which are traded on a national or foreign securities exchange are valued at the last reported sales price, except that securities listed on The Nasdaq Stock Market, Inc. (“Nasdaq”) are valued at the Nasdaq Official Closing Price (“NOCP”), and if no NOCP is available, then at the last reported sales price. If no sales price is shown on the Nasdaq, the bid price will be used. In the absence of any sale of securities listed on the Nasdaq, and in the case of other securities (including U.S. Government obligations, but excluding debt securities maturing in 60 days or less), the price will be deemed “stale” and the valuations will be determined in accordance with the Fund’s Fair Value Procedures.

Fixed income securities with maturities exceeding 60 days are valued based on available evaluated prices received from an independent pricing service approved by the Board of Trustees which may utilize both transaction data and market information such as yield, prices of securities of comparable quality, coupon rate, maturity, type of issue, trading characteristics and other market data. If valuations are not available from the pricing service or values received are deemed not representative of market value, values will be obtained from a third party broker-dealer or determined based on the Fund’s Fair Value Procedures.

Debt securities of sufficient credit quality with original maturities of 60 days or less generally are valued at amortized cost which approximates fair value. The amortized cost method involves valuing a security at its cost, plus accretion of discount or minus amortization of premium over the period until maturity.

Investments in open-end mutual funds and non-registered investment companies are generally valued at net asset value.

Investments which are not valued using any of the methods discussed above, are valued at their fair value, as determined by procedures established in good faith and approved by the Board of Trustees.

Foreign currency translation

The accounting records of the Fund are maintained in U.S. dollars. Assets, including investment securities, and liabilities denominated in foreign currency are translated into U.S. dollars at the prevailing rates of exchange at the date of valuation. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and liabilities other than investments in securities resulting in changes in exchange rates.

The changes in net assets arising from changes in exchange rates and the changes in net assets resulting from changes in market prices of securities are not separately presented. Such changes are recorded with net realized and unrealized gains or losses from investments. Gains and losses from certain foreign currency transactions are treated as ordinary income for U.S. federal income tax purposes.

Notes to Financial Statements Wells Fargo Advantage VT Opportunity Fund 21

Security loans

The Fund may lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. The Fund continues to receive interest or dividends on the securities loaned. The Fund receives collateral in the form of cash or securities with a value at least equal to the value of the securities on loan. The value of the loaned securities is determined at the close of each business day and any additional required collateral is delivered to the Fund on the next business day. In a securities lending transaction, the net asset value of the Fund will be affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of the instrument in which collateral is invested. The amount of securities lending activity undertaken by the Fund fluctuates from time to time. In the event of default or bankruptcy by the borrower, the Fund may be prevented from recovering the loaned securities or gaining access to the collateral or may experience delays or costs in doing so. In addition, the investment of any cash collateral received may lose all or part of its value. The Fund has the right under the lending agreement to recover the securities from the borrower on demand.

The Fund lends its securities through an unaffiliated securities lending agent. Cash collateral received in connection with its securities lending transactions is invested in Wells Fargo Securities Lending Cash Investments, LLC (the “Cash Collateral Fund”). The Cash Collateral Fund is exempt from registration under Section 3(c)(7) of the 1940 Act and is managed by Wells Fargo Funds Management LLC (“Funds Management”) and is sub-advised by Wells Capital Management Incorporated (“Wells Capital Management”). Funds Management receives an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Cash Collateral Fund increase. All of the fees received by Funds Management are paid to Wells Capital Management for its services as sub-adviser. The Cash Collateral Fund seeks to provide a positive return compared to the daily Fed Funds Open rate by investing in high-quality, U.S. dollar-denominated short-term money market instruments. Cash Collateral Fund investments are fair valued based upon the amortized cost valuation technique. Income earned from investment in the Cash Collateral Fund is included in securities lending income on the Statement of Operations.

For Wells Fargo Advantage Funds that participated in securities lending activity prior to February 13, 2009, certain structured investment vehicles purchased in a joint account by the former securities lending agent defaulted or were impaired. Certain of the Wells Fargo Advantage Funds still hold ownership interest in these structured investment vehicles, which have since been restructured as pass-through securities. If the Fund holds an ownership interest in such pass-through securities, information regarding this ownership interest can be found in the Portfolio of Investments under the category “Other”.

Security transactions and income recognition

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

Dividend income is recognized on the ex-dividend date. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.

Distributions to shareholders

Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-dividend date. Such distributions are determined in conformity with income tax regulations, which may differ from generally accepted accounting principles.

The timing and character of distributions made during the period from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. To the extent that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment. Temporary differences do not require reclassifications. The primary permanent differences causing such reclassifications are due to dividends from certain securities, expiration of capital loss carryforwards and recognition of partnership income. At December 31, 2011, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statement of Assets and Liabilities:

Paid-in Capital	Undistributed Net Investment Income		Accumulated Net Realized Losses on Investments
$(360,675)	$	66,302	$	294,373

22 Wells Fargo Advantage VT Opportunity Fund Notes to Financial Statements

Federal and other taxes

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

The 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.

Under the recently enacted Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years which began after December 22, 2010 for an unlimited period. However, any losses incurred are required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

At December 31, 2011, net capital loss carryforwards, which are available to offset future net realized capital gains, were as follows:.

Pre-enactment Capital Loss Expiration			Post-enactment Capital Losses
2015	2016	2017	Short-term	Long-term
$1,442,700	$360,675	$47,818,946	$2,181,517	$286,150

Class allocations

The separate classes of shares offered by the Fund differ principally in distribution fees. Shareholders of each class bear certain expenses that pertain to that particular class. All shareholders bear the common expenses of the Fund, earn income from the portfolio, and are allocated unrealized gains and losses pro rata based on the average daily net assets of each class, without distinction between share classes. Dividends are determined separately for each class based on income and expenses allocable to each class. Realized gains and losses are allocated to each class pro rata based upon the net assets of each class on the date realized. Differences in per share dividend rates generally result from the relative weightings of pro rata income and realized gain allocations and from differences in separate class expenses, including distribution fees.

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 significant 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:

n Level 1 – quoted prices in active markets for identical securities

n Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

n Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Notes to Financial Statements Wells Fargo Advantage VT Opportunity Fund 23

As of December 31, 2011, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:

Investments in Securities	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity securities
Common stocks	$	238,233,956	$	0	$	0	$	238,233,956
Other		0		0		1,547,127		1,547,127
Short-term investments
Investment companies		4,870,568		48,927,267		0		53,797,835
	$	243,104,524	$	48,927,267	$	1,547,127	$	293,578,918

Further details on the major security types listed above can be found in the Portfolio of Investments.

Transfers in and transfers out are recognized at the end of the reporting period. For the year ended December 31, 2011, the Fund did not have any significant transfers into/out of Level 1 and Level 2.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Other
Balance as of December 31, 2010	$	2,520,461
Accrued discounts (premiums)		0
Realized gains (losses)		0
Change in unrealized gains (losses)		(166,140	)
Purchases		0
Sales		(807,194	)
Transfers into Level 3		0
Transfers out of Level 3		0
Balance as of December 31, 2011	$	1,547,127
Change in unrealized gains (losses) relating to securities still held at December 31, 2011	$	(551,276	)

4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES

Advisory fee

The Trust has entered into an advisory contract with Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”). The adviser is responsible for implementing investment policies and guidelines and for supervising the sub-adviser, who is responsible for day-to-day portfolio management of the Fund.

Pursuant to the contract, Funds Management is entitled to receive an annual advisory fee starting at 0.65% and declining to 0.55% as the average daily net assets of the Fund increase. For the year ended December 31, 2011, the advisory fee was equivalent to an annual rate of 0.65% of the Fund’s average daily net assets.

Funds Management may retain the services of certain sub-advisers to provide daily portfolio management to the Fund. The fees related to sub-advisory services are borne directly by Funds Management and do not increase the overall fees paid by the Fund. Wells Capital Management, an affiliate of Funds Management, is the sub-adviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.45% and declining to 0.30% as the average daily net assets of the Fund increase.

Administration and transfer agent fees

The Trust has entered into an administration agreement with Funds Management. Under this agreement, for providing administrative services, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers, Funds Management is entitled to receive from the Fund an annual fund level administration fee starting at 0.05% and declining to 0.03% as the average daily net assets of the Fund increase and a class level administration fee of 0.08% of the average daily net assets of each class.

24 Wells Fargo Advantage VT Opportunity Fund Notes to Financial Statements

Funds Management has contractually waived and/or reimbursed advisory and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. Waiver of fees and/or reimbursement of expenses by Funds Management were made first from fund level expenses on a proportionate basis and then from class specific expenses.

Distribution fees

The Trust has adopted a Distribution Plan for Class 2 shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are charged to Class 2 shares and paid to Wells Fargo Funds Distributor, LLC, the principal underwriter, at an annual rate of 0.25% of its average daily net assets.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. Government obligations (if any) and short-term securities (securities with maturities of one year or less at purchase date), for the year ended December 31, 2011 were $69,348,447 and $99,226,161, respectively.

6. ACQUISITION

After the close of business on August 26, 2011, the Fund acquired the net assets of Wells Fargo Advantage VT Core Equity Fund. The purpose of the transaction was to combine two funds with similar investment objectives and strategies. Shareholders holding Class 1 and Class 2 shares of Wells Fargo Advantage VT Core Equity Fund received Class 1 and Class 2 shares, respectively, of the Fund in the reorganization. The acquisition was accomplished by a tax-free exchange of all of the shares of Wells Fargo Advantage VT Core Equity Fund for 7,007,753 shares of the Fund valued at $115,775,900 at an exchange ratio of 0.77 and 0.76 for Class 1 and Class 2 shares, respectively. The investment portfolio of Wells Fargo Advantage VT Core Equity Fund with a fair value of $115,698,003, identified cost of $130,800,975 and unrealized losses of $15,102,972 at August 26, 2011 were the principal assets acquired by the Fund. The aggregate net assets of Wells Fargo Advantage VT Core Equity Fund and the Fund immediately prior to the acquisition were $115,775,900 and $138,830,614, respectively. The aggregate net assets of the Fund immediately after the acquisition were $254,606,514. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from Wells Fargo Advantage VT Core Equity Fund was carried forward to align ongoing reporting of the Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.

Assuming the acquisition had been completed January 1, 2011, the beginning of the annual reporting period for the Fund, the pro forma results of operations for the year ended December 31, 2011 would have been:

Net investment income	$	1,159,297
Net realized and unrealized losses on investments	$	(2,976,757	)
Net decrease in net assets resulting from operations	$	(1,817,460	)

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 Wells Fargo Advantage VT Core Equity Fund that have been included in the Fund’s Statement of Operations since August 29, 2011.

7. BANK BORROWINGS

The Trust and Wells Fargo Funds Trust (excluding the money market funds) are parties to a $150,000,000 revolving credit agreement with State Street Bank and Trust Company, 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, under the credit agreement, the Fund pays an annual commitment fee equal to 0.10% of the unused balance, which is allocated pro rata. Prior to September 6, 2011, the revolving credit agreement was for $125,000,000 and the annual commitment fee paid by the Fund was 0.125% of the unused balance. For the year ended December 31, 2011, the Fund paid $348 in commitment fees.

For the year ended December 31, 2011, there were no borrowings by the Fund under the agreement.

Notes to Financial Statements Wells Fargo Advantage VT Opportunity Fund 25

8. DISTRIBUTIONS TO SHAREHOLDERS

The tax character of distributions paid was $228,148 and $1,195,940 of ordinary income for the years ended December 31, 2011 and December 31, 2010, respectively.

As of December 31, 2011, the components of distributable earnings on a tax basis were as follows:

Undistributed Ordinary Income	Unrealized Gains (Losses)		Capital Loss Carryforward
$341,265	$	8,322,070	$	(52,089,988	)

9. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and directors are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Trust may enter into contracts with service providers that contain a variety of indemnification clauses. The Trust’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.

10. NEW ACCOUNTING PRONOUNCEMENTS

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. ASU No. 2011-04 amends FASB ASC Topic 820, Fair Value Measurements and Disclosures, to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP. The ASU is effective prospectively for interim and annual periods beginning after December 15, 2011. Management expects that adoption of the ASU will result in additional disclosures in the financial statements, as applicable.

In April 2011, FASB issued ASU No. 2011-03 “Reconsideration of Effective Control for Repurchase Agreements”. ASU No. 2011-03 amends FASB ASC Topic 860, Transfers and Servicing, specifically the criteria required to determine whether a repurchase agreement (repo) and similar agreements should be accounted for as sales of financial assets or secured borrowings with commitments. ASU No. 2011-03 changes the assessment of effective control by focusing on the transferor’s contractual rights and obligations and removing the criterion to assess its ability to exercise those rights or honor those obligations. This could result in changes to the way entities account for certain transactions including repurchase agreements, mortgage dollar rolls and reverse repurchase agreements. The ASU will become effective on a prospective basis for new transfers and modifications to existing transactions as of the beginning of the first interim or annual period beginning on or after December 15, 2011. Management has evaluated the impact of adopting the ASU and expects no significant changes.

26 Wells Fargo Advantage VT Opportunity Fund Report of Independent Registered Public Accounting Firm

BOARD OF TRUSTEES AND SHAREHOLDERS OF WELLS FARGO VARIABLE TRUST:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the Wells Fargo Advantage VT Opportunity Fund (the “Fund”), one of the funds constituting the Wells Fargo Variable Trust, as of December 31, 2011, and the related statement of operations for the year then ended, statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2011, by correspondence with custodian and brokers, or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Wells Fargo Advantage VT Opportunity Fund as of December 31, 2011, the results of its operations for the year then ended, changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

February 24, 2012

Other Information (Unaudited) Wells Fargo Advantage VT Opportunity Fund 27

TAX INFORMATION

For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 100% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended December 31, 2011.

PROXY VOTING INFORMATION

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our Web site at www.wellsfargo.com/advantagefunds, or visiting the SEC Web site at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the Fund’s Web site at www.wellsfargo.com/advantagefunds or by visiting the SEC Web site at www.sec.gov.

PORTFOLIO HOLDINGS INFORMATION

The complete portfolio holdings for the Fund are publicly available on the Fund’s Web site (www.wellsfargo.com/advantagefunds) on a monthly, 30-day or more delayed basis. In addition, top ten holdings information for the Fund is publicly available on the Fund’s Web site on a monthly, seven-day or more delayed basis. The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q, which is available without charge by visiting the SEC Web site at www.sec.gov. In addition, the Fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and at regional offices in New York City, at 233 Broadway, and in Chicago, at 175 West Jackson Boulevard, Suite 900. Information about the Public Reference Room may be obtained by calling 1-800-SEC-0330.

28 Wells Fargo Advantage VT Opportunity Fund Other Information (Unaudited)

BOARD OF TRUSTEES

The following table provides basic information about the Board of Trustees (the “Trustees”) of the Trust and Officers of the Trust. This table should be read in conjunction with the Prospectus and the Statement of Additional Information¹ of the Fund. Each of the Trustees and Officers listed below acts in identical capacities for the Wells Fargo Advantage family of funds, which consists of 138 funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). All of the Trustees are also Members of the Audit and Governance Committees of each Trust in the Fund Complex. The mailing address of each Trustee and Officer is 525 Market Street, 12th Floor, San Francisco, CA 94105. 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	Other Directorships During Past Five Years
Peter G. Gordon (Born 1942)	Trustee, since 1998; Chairman, since 2005 (Lead Trustee since 2001)	Co-Founder, Retired Chairman, President and CEO of Crystal Geyser Water Company. Trustee Emeritus, Colby College	Asset Allocation Trust
Isaiah Harris, Jr. (Born 1952)	Trustee, since 2009	Retired. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Mr. Harris is a certified public accountant.	CIGNA Corporation; Deluxe Corporation; Asset Allocation Trust
Judith M. Johnson (Born 1949)	Trustee, since 2008	Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.	Asset Allocation Trust
Leroy Keith, Jr. (Born 1939)	Trustee, since 2010	Chairman, Bloc Global Services (development and construction). Trustee of the Evergreen Funds from 1983 to 2010. Former Managing Director, Almanac Capital Management (commodities firm), former Partner, Stonington Partners, Inc. (private equity fund), former Director, Obagi Medical Products Co. and former Director, Lincoln Educational Services.	Trustee, Virtus Fund Complex (consisting of 40 portfolios as of 12/31/11); Asset Allocation Trust
David F. Larcker (Born 1950)	Trustee, since 2009	James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of Corporate Governance Research Program and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.	Asset Allocation Trust
Olivia S. Mitchell (Born 1953)	Trustee, since 2006	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.	Asset Allocation Trust

Other Information (Unaudited) Wells Fargo Advantage VT Opportunity Fund 29

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years	Other Directorships During Past Five Years
Timothy J. Penny (Born 1951)	Trustee, since 1996	President and CEO of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007 and Senior Fellow at the Humphrey Institute Policy Forum at the University of Minnesota since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.	Asset Allocation Trust
Michael S. Scofield (Born 1943)	Trustee, since 2010	Served on the Investment Company Institute’s Board of Governors and Executive Committee from 2008-2011 as well the Governing Council of the Independent Directors Council from 2006-2011 and the Independent Directors Council Executive Committee from 2008-2011. Chairman of the IDC from 2008-2010. Institutional Investor (Fund Directions) Trustee of Year in 2007. Trustee of the Evergreen Funds (and its predecessors) from 1984 to 2010. Chairman of the Evergreen Funds from 2000-2010. Former Trustee of the Mentor Funds. Retired Attorney, Law Offices of Michael S. Scofield and former Director and Chairman, Branded Media Corporation (multi-media branding company).	Asset Allocation Trust
Donald C. Willeke (Born 1940)	Trustee, since 1996	Principal of the law firm of Willeke & Daniels. General Counsel of the Minneapolis Employees Retirement Fund from 1984 until its consolidation into the Minnesota Public Employees Retirement Association on June 30, 2010. Director and Vice Chair of The Free Trust (non-profit corporation). Director of the American Chestnut Foundation (non-profit corporation).	Asset Allocation Trust

Officers

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years
Karla M. Rabusch (Born 1959)	President, since 2003	Executive Vice President of Wells Fargo Bank, N.A. and President of Wells Fargo Funds Management, LLC since 2003. Senior Vice President and Chief Administrative Officer of Wells Fargo Funds Management, LLC from 2001 to 2003.
C. David Messman (Born 1960)	Secretary, since 2000; Chief Legal Counsel, since 2003	Senior Vice President and Secretary of Wells Fargo Funds Management, LLC since 2001. Vice President and Managing Senior Counsel of Wells Fargo Bank, N.A. since 1996.
Kasey Phillips (Born 1970)	Treasurer, since 2009	Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2006 to 2010. Treasurer of the Evergreen Funds from 2005 to 2010.
David Berardi (Born 1975)	Assistant Treasurer, since 2009	Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Assistant Vice President of Evergreen Investment Services, Inc. from 2004 to 2008. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.
Jeremy DePalma (Born 1974)	Assistant Treasurer, since 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. Vice President, Evergreen Investment Services, Inc. from 2004 to 2007. Head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.
Debra Ann Early (Born 1964)	Chief Compliance Officer, since 2007	Chief Compliance Officer of Wells Fargo Funds Management, LLC since 2007. Chief Compliance Officer of Parnassus Investments from 2005 to 2007. Chief Financial Officer of Parnassus Investments from 2004 to 2007 and Senior Audit Manager of PricewaterhouseCoopers LLP from 1998 to 2004.

1. 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 Web site at www.wellsfargo.com/advantagefunds.

30 Wells Fargo Advantage VT Opportunity Fund List of Abbreviations

The following is a list of common abbreviations for terms and entities which may have appeared in this report.

ACB —  Agricultural Credit Bank

ADR —  American Depository Receipt

ADS —  American Depository Shares

AGC-ICC —  Assured Guaranty Corporation - Insured Custody Certificates

AGM —  Assured Guaranty Municipal

AMBAC —  American Municipal Bond Assurance Corporation

AMT —  Alternative Minimum Tax

AUD —  Australian Dollar

BAN —  Bond Anticipation Notes

BHAC —  Berkshire Hathaway Assurance Corporation

BRL —  Brazil Real

CAB —  Capital Appreciation Bond

CAD —  Canadian Dollar

CCAB —  Convertible Capital Appreciation Bond

CDA —  Community Development Authority

CDO —  Collateralized Debt Obligation

CHF —  Swiss Franc

COP —  Certificate of Participation

CR —  Custody Receipts

DKK —  Danish Krone

DRIVER —  Derivative Inverse Tax-Exempt Receipts

DW&P —  Department of Water & Power

DWR —  Department of Water Resources

ECFA —  Educational & Cultural Facilities Authority

EDA —  Economic Development Authority

EDFA —  Economic Development Finance Authority

ETF —  Exchange-Traded Fund

EUR —  Euro

FFCB —  Federal Farm Credit Bank

FGIC —  Financial Guaranty Insurance Corporation

FHA —  Federal Housing Authority

FHLB —  Federal Home Loan Bank

FHLMC —  Federal Home Loan Mortgage Corporation

FNMA —  Federal National Mortgage Association

FSA —  Farm Service Agency

GBP —  Great British Pound

GDR —  Global Depository Receipt

GNMA —  Government National Mortgage Association

GO —  General Obligation

HCFR —  Healthcare Facilities Revenue

HEFA —  Health & Educational Facilities Authority

HEFAR —  Higher Education Facilities Authority Revenue

HFA —  Housing Finance Authority

HFFA —  Health Facilities Financing Authority

HKD —  Hong Kong Dollar

HUF —  Hungarian Forint

IBC —  Insured Bond Certificate

IDA —  Industrial Development Authority

IDAG —  Industrial Development Agency

IDR —  Industrial Development Revenue

IEP —  Irish Pound

JPY —  Japanese Yen

KRW —  Republic of Korea Won

LIBOR —  London Interbank Offered Rate

LLC —  Limited Liability Company

LLP —  Limited Liability Partnership

LOC —  Letter of Credit

LP —  Limited Partnership

MBIA —  Municipal Bond Insurance Association

MFHR —  Multi-Family Housing Revenue

MTN —  Medium Term Note

MUD —  Municipal Utility District

MXN —  Mexican Peso

MYR —  Malaysian Ringgit

NATL-RE —  National Public Finance Guarantee Corporation

NOK —  Norwegian Krone

NZD —  New Zealand Dollar

PCFA —  Pollution Control Finance Authority

PCR —  Pollution Control Revenue

PFA —  Public Finance Authority

PFFA —  Public Facilities Financing Authority

PFOTER —  Puttable Floating Option Tax-Exempt Receipts

plc —  Public Limited Company

PLN —  Polish Zloty

PUTTER —  Puttable Tax-Exempt Receipts

R&D —  Research & Development

RDA —  Redevelopment Authority

RDFA —  Redevelopment Finance Authority

REIT —  Real Estate Investment Trust

ROC —  Reset Option Certificates

SAVRS —  Select Auction Variable Rate Securities

SBA —  Small Business Authority

SEK —  Swedish Krona

SFHR —  Single Family Housing Revenue

SFMR —  Single Family Mortgage Revenue

SGD —  Singapore Dollar

SKK —  Slovakian Koruna

SPDR —  Standard & Poor’s Depositary Receipts

TAN —  Tax Anticipation Notes

TBA —  To Be Announced

TIPS —  Treasury Inflation-Protected Securities

TRAN —  Tax Revenue Anticipation Notes

TCR —  Transferable Custody Receipts

TRY —  Turkish Lira

TTFA —  Transportation Trust Fund Authority

TVA —  Tennessee Valley Authority

XLCA —  XL Capital Assurance

ZAR —  South African Rand

FOR MORE INFORMATION

More information about Wells Fargo Advantage Funds is available free upon request. To obtain literature, please write, e-mail, visit the Fund’s Web site, or call:

Wells Fargo Advantage Funds

P.O. Box 8266

Boston, MA 02266-8266

E-mail: wfaf@wellsfargo.com

Web site: www.wellsfargo.com/advantagefunds

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

This report and the financial statements contained herein are submitted for the general information of the shareholders of Wells Fargo Advantage Funds. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. For a prospectus containing more complete information, including charges and expenses, call 1-800-222-8222 or visit the Fund’s Web site at www.wellsfargo.com/advantagefunds. Please consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. This and other information about Wells Fargo Advantage Funds can be found in the current prospectus. Read the prospectus carefully before you invest or send money.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

© 2012 Wells Fargo Funds Management, LLC. All rights reserved.

207576 02-12

AVT6/AR152 12-11

Wells Fargo Advantage

VT Small Cap Growth Fund

Annual Report

December 31, 2011

Reduce clutter. Save trees.

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

Contents

Letter to Shareholders	2
Performance Highlights	5
Fund Expenses	9
Portfolio of Investments	10
Financial Statements
Statement of Assets and Liabilities	15
Statement of Operations	16
Statements of Changes in Net Assets	17
Financial Highlights	18
Notes to Financial Statements	20
Report of Independent Registered Public Accounting Firm	26
Other Information	27
List of Abbreviations	30

The views expressed and any forward-looking statements are as of December 31, 2011, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Funds Management, LLC. Discussions of individual securities, or the markets generally, or any Wells Fargo Advantage Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements; the views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Funds Management, LLC, disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

WELLS FARGO INVESTMENT HISTORY

1932	Keystone creates one of the first mutual fund families.
1971	Wells Fargo & Company introduces one of the first institutional index funds.
1978	Wells Fargo applies Markowitz and Sharpe’s research on Modern Portfolio Theory to introduce one of the industry’s first Tactical Asset Allocation (TAA) models in institutional separately managed accounts.
1984	Wells Fargo Stagecoach Funds launches its first asset allocation fund.
1989	The Tactical Asset Allocation (TAA) Model is first applied to Wells Fargo’s asset allocation mutual funds.
1994	Wells Fargo introduces the LifePath Funds, one of the first suites of target date funds (now the Wells Fargo Advantage Dow Jones Target Date FundsSM ).
1996	Evergreen Investments and Keystone Funds merge.
1997	Wells Fargo launches Wells Fargo Advantage WealthBuilder PortfoliosSM, a fund-of-funds suite of products that includes the use of quantitative models to shift assets among investment styles.
1999	Norwest Advantage Funds and Stagecoach Funds are reorganized into Wells Fargo Funds after the merger of Norwest and Wells Fargo.
2002	Evergreen Retail and Evergreen Institutional companies form the umbrella asset management company, Evergreen Investments.
2005	The integration of Strong Funds with Wells Fargo Funds creates Wells Fargo Advantage Funds, resulting in one of the top 20 mutual fund companies in the United States.
2006	Wells Fargo Advantage Funds relaunches the target date product line as Wells Fargo Advantage Dow Jones Target Date Funds.
2010	The mergers and reorganizations of Evergreen and Wells Fargo Advantage mutual funds are completed, unifying the families under the brand of Wells Fargo Advantage Funds.

Wells Fargo Advantage Funds^®

Wells Fargo Advantage Funds skillfully guides institutions, financial advisors, and individuals through the investment terrain to help them reach their financial objectives. Everything we do on behalf of investors is backed by our unique combination of qualifications.

Strength

Our organization is built on the standards of integrity and service established by our parent company—Wells Fargo & Company—more than 150 years ago. And, because we’re part of a highly diversified financial enterprise, we offer the depth of resources to help investors succeed.

Expertise

Our multi-boutique model offers investors access to the independent thinking of premier investment managers that have been chosen for their time-tested strategies. While each team specializes in a specific investment strategy, collectively they provide investors a wide choice of distinct investment styles. Our dedication to investment excellence doesn’t end with our expertise in manager selection—risk management, analysis, and rigorous ongoing review seek to ensure each manager’s investment process remains consistent.

Partnership

Our collaborative approach is built around understanding the needs and goals of our clients. By adhering to core principles of sound judgment and steady guidance, we support you through every stage of the investment decision process.

Carefully consider a fund’s investment objectives, risks, charges, and expenses before investing. For a current prospectus and, if available, a summary prospectus, containing this and other information, visit wellsfargo.com/advantagefunds. Read it carefully before investing.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds^®. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

“Dow Jones^®” and “Dow Jones Target Date Indexes^SM” are service marks of Dow Jones Trademark Holdings, LLC (“Dow Jones”), have been licensed to CME Group Index Services LLC (“CME Indexes”) and have been sublicensed for use for certain purposes by Global Index Advisors, Inc, and Wells Fargo Funds Management, LLC. The Wells Fargo Advantage Dow Jones Target Date Funds^SM based on the Dow Jones Target Date Indexes^SM, are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes or their respective affiliates and none of them makes any representation regarding the advisability of investing in such product(s).

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

Not part of the annual report.

Wells Fargo Advantage Funds offers more than 110 mutual funds across a wide range of asset classes, representing over $216 billion in assets under management, as of December 31, 2011.

Equity Funds
Asia Pacific Fund	Global Opportunities Fund	Premier Large Company Growth Fund
C&B Large Cap Value Fund	Growth Fund	Small Cap Opportunities Fund
C&B Mid Cap Value Fund	Health Care Fund	Small Cap Value Fund
Capital Growth Fund	Index Fund	Small Company Growth Fund
Common Stock Fund	International Equity Fund	Small Company Value Fund
Disciplined U.S. Core Fund	International Value Fund	Small/Mid Cap Core Fund
Discovery Fund†	Intrinsic Small Cap Value Fund	Small/Mid Cap Value Fund
Diversified Equity Fund	Intrinsic Value Fund	Social Sustainability Fund†
Diversified International Fund	Intrinsic World Equity Fund	Special Mid Cap Value Fund
Diversified Small Cap Fund	Large Cap Core Fund	Special Small Cap Value Fund
Emerging Growth Fund	Large Cap Growth Fund	Specialized Technology Fund
Emerging Markets Equity Fund	Large Company Value Fund	Strategic Large Cap Growth Fund
Endeavor Select Fund†	Omega Growth Fund	Traditional Small Cap Growth Fund
Enterprise Fund†	Opportunity Fund†	Utility and Telecommunications Fund
Equity Value Fund	Precious Metals Fund
Bond Funds
Adjustable Rate Government Fund	Inflation-Protected Bond Fund	Short-Term Bond Fund
California Limited-Term Tax-Free Fund	Intermediate Tax/AMT-Free Fund	Short-Term High Yield Bond Fund
California Tax-Free Fund	International Bond Fund	Short-Term Municipal Bond Fund
Colorado Tax-Free Fund	Minnesota Tax-Free Fund	Strategic Municipal Bond Fund
Government Securities Fund	Municipal Bond Fund	Total Return Bond Fund
High Income Fund	North Carolina Tax-Free Fund	Ultra Short-Term Income Fund
High Yield Bond Fund	Pennsylvania Tax-Free Fund	Ultra Short-Term Municipal Income Fund
Income Plus Fund	Short Duration Government Bond Fund	Wisconsin Tax-Free Fund
Asset Allocation Funds
Asset Allocation Fund	WealthBuilder Equity Portfolio†	Target 2020 Fund†
Conservative Allocation Fund	WealthBuilder Growth Allocation Portfolio†	Target 2025 Fund†
Diversified Capital Builder Fund	WealthBuilder Growth Balanced Portfolio†	Target 2030 Fund†
Diversified Income Builder Fund	WealthBuilder Moderate Balanced Portfolio†	Target 2035 Fund†
Growth Balanced Fund	WealthBuilder Tactical Equity Portfolio†	Target 2040 Fund†
Index Asset Allocation Fund	Target Today Fund†	Target 2045 Fund†
Moderate Balanced Fund	Target 2010 Fund†	Target 2050 Fund†
WealthBuilder Conservative Allocation Portfolio†	Target 2015 Fund†	Target 2055 Fund†
Money Market Funds
100% Treasury Money Market Fund	Heritage Money Market Fund†	National Tax-Free Money Market Fund
California Municipal Money Market Fund	Money Market Fund	Prime Investment Money Market Fund
Cash Investment Money Market Fund	Municipal Cash Management Money Market Fund	Treasury Plus Money Market Fund
Government Money Market Fund	Municipal Money Market Fund
Variable Trust Funds1
VT Discovery Fund†	VT Intrinsic Value Fund	VT Small Cap Growth Fund
VT Index Asset Allocation Fund	VT Omega Growth Fund	VT Small Cap Value Fund
VT International Equity Fund	VT Opportunity Fund†	VT Total Return Bond Fund

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Wells Fargo Advantage Money Market Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.

1. The Variable Trust Funds are generally available only through insurance company variable contracts.

† In this report, the Wells Fargo Advantage Discovery Fund^SM, Wells Fargo Advantage Endeavor Select Fund^SM, Wells Fargo Advantage Enterprise Fund^SM, Wells Fargo Advantage Opportunity Fund^SM, Wells Fargo Advantage Social Sustainability Fund^SM, Wells Fargo Advantage WealthBuilder Conservative Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Equity Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Moderate Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Tactical Equity Portfolio^SM, Wells Fargo Advantage Dow Jones Target Today Fund^SM, Wells Fargo Advantage Dow Jones Target 2010 Fund^SM, Wells Fargo Advantage Dow Jones Target 2015 Fund^SM, Wells Fargo Advantage Dow Jones Target 2020 Fund^SM, Wells Fargo Advantage Dow Jones Target 2025 Fund^SM, Wells Fargo Advantage Dow Jones Target 2030 Fund^SM, Wells Fargo Advantage Dow Jones Target 2035 Fund^SM, Wells Fargo Advantage Dow Jones Target 2040 Fund^SM, Wells Fargo Advantage Dow Jones Target 2045 Fund^SM, Wells Fargo Advantage Dow Jones Target 2050 Fund^SM, Wells Fargo Advantage Dow Jones Target 2055 Fund^SM, Wells Fargo Advantage Heritage Money Market Fund^SM, Wells Fargo Advantage VT Discovery Fund^SM, and Wells Fargo Advantage VT Opportunity Fund^SM are referred to as the Discovery Fund, Endeavor Select Fund, Enterprise Fund, Opportunity Fund, Social Sustainability Fund, WealthBuilder Conservative Allocation Portfolio, WealthBuilder Equity Portfolio, WealthBuilder Growth Allocation Portfolio, WealthBuilder Growth Balanced Portfolio, WealthBuilder Moderate Balanced Portfolio, WealthBuilder Tactical Equity Portfolio, Target Today Fund, Target 2010 Fund, Target 2015 Fund, Target 2020 Fund, Target 2025 Fund, Target 2030 Fund, Target 2035 Fund, Target 2040 Fund, Target 2045 Fund, Target 2050 Fund, Target 2055 Fund, Heritage Money Market Fund, VT Discovery Fund, and VT Opportunity Fund, respectively.

Not part of the annual report.

2 Wells Fargo Advantage VT Small Cap Growth Fund Letter to Shareholders

Karla M. Rabusch,

President

Wells Fargo Advantage Funds

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

Dear Valued Shareholder:

We’re pleased to offer you this annual report for the Wells Fargo Advantage VT Small Cap Growth Fund for the 12-month period that ended December 31, 2011.

For the full 12-month period, most of the major domestic equity indexes posted either modest gains or relatively mild losses. However, the market’s 12-month return figures mask the uneven path that it traced throughout the year as investors had to contend with a variety of global and domestic headwinds. Whatever the future holds, we continue to believe that most investors can benefit from adhering to a well-diversified investment strategy. Over the long-term, such a strategy may allow you to balance risks and opportunities as you pursue your financial goals in a dynamic market landscape.

The economic recovery gained traction as the year progressed.

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

2011 opened on a note of mounting optimism regarding the strength of the recovery, yet a batch of disappointing economic data in the spring and summer cast renewed doubts on the sustainability of the recovery. In September, it was reported that U.S. gross domestic product (GDP) grew at a mere 1.3% annual rate in the second quarter of 2011, following anemic growth at an annual rate of 0.4% in the first quarter. According to the December estimate, GDP growth accelerated to an annual rate of 1.8% in the third quarter, reigniting hopes for a sustainable recovery. Those hopes were buoyed by widespread anticipation of even stronger GDP growth in the fourth quarter. By the end of the 12-month period, few economists believed that the U.S. economy was in danger of sliding back into recession, although many expected a sluggish growth environment in 2012.

The struggling housing and labor markets slowed growth.

As has been the case throughout the recovery, the housing and labor markets continued to restrain economic momentum during 2011.

The beleaguered housing market has arguably exerted the biggest drag on growth. Despite intermittent signs of improvement, ongoing weakness in sales of both new and existing homes has put considerable downward pressure on prices. On the other hand, the labor market took a decided turn for the better in the latter half of the year: initial unemployment claims have eased in recent months, and the private sector has been steadily adding jobs. The pace of hiring, while not brisk, was sufficient to push the U.S. unemployment rate down to 8.5% as of December 2011—still well above its historical average, but at its lowest level since February 2009. Many observers expect the unemployment rate to decline further in 2012, which could act as a tailwind for consumer spending—widely viewed as one of the keys to long-term economic growth.

The Federal Reserve announced that it will keep rates low until 2013.

Consumers have already demonstrated some resilience in their spending—even in the face of higher energy costs. Oil prices skyrocketed in early 2011 before retreating later in the year, only to spike again during the fourth quarter. Yet

Letter to Shareholders Wells Fargo Advantage VT Small Cap Growth Fund 3

“core” inflation, which excludes volatile energy and food prices, remained fairly benign throughout the year.

With inflation in check, the Federal Reserve (Fed) held its target range for the federal funds rate—a proxy for short-term interest rates—steady at 0% to 0.25%. Following its August 9 meeting, the Federal Open Market Committee (FOMC) issued a statement explaining that economic conditions were likely to warrant exceptionally low levels for the federal funds rate through at least mid-2013. In addition, the Fed carried out its second round of quantitative easing (QE2) in an effort to promote a more robust economic expansion. The stimulus program was completed as scheduled in June 2011. In September, the Fed launched yet another stimulus program—dubbed “Operation Twist”—that is designed to keep intermediate- and longer-term yields relatively low. The goal with keeping longer-term rates low is to encourage lending activity to spark business investments and home purchases, which, in turn, may provide support for a more sustainable economic recovery.

Market volatility was a dominant theme throughout most of 2011.

Despite pockets of turbulence sparked by the natural disasters in Japan and geopolitical turmoil in North Africa and the Middle East, the U.S. equity market performed very well from January through April of 2011. Some upbeat economic news, better-than-expected corporate profits, and investor enthusiasm about QE2 were among the catalysts for the market’s four-month advance.

In May and June, the market climate shifted to one of anxiety over the increasingly fragile state of the U.S. and global economies. As spring gave way to summer, investors not only worried that the U.S. might be on the brink of recession, they also feared that Europe’s sovereign debt problems could spiral out of control if a Greek default triggered financial contagion across the continent. In July and August, investor sentiment was further undermined by partisan wrangling over the federal debt ceiling and the Standard & Poor’s downgrade of the U.S. credit rating. The barrage of unsettling headlines led to heightened market volatility and sharply falling stock prices in the third quarter of 2011. Although volatility persisted into the fourth quarter, the market was able to rebound amid improved economic data and hopes for a resolution to the European crisis.

For the full 12-month period, the S&P 500 Index¹ of large-cap stocks achieved a total return of 2.1%. The Russell Midcap^® Index² and the Russell 2000^® Index³ of

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 Russell Midcap^® Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 25% of the total market capitalization of the Russell 1000^® Index. You cannot invest directly in an index.

3. The Russell 2000^® Index measures the performance of the 2,000 smallest companies in the Russell 3000^® Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index. You cannot invest directly in an index.

4 Wells Fargo Advantage VT Small Cap Growth Fund Letter to Shareholders

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors.

small-cap stocks lost 1.6% and 4.2%, respectively. International stocks fared worse than their U.S. counterparts, with the MSCI EAFE Index⁴ shedding 14.8%.

Recent events have not altered our message to shareholders.

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors. Bear in mind that many investors who indiscriminately sold their equity investments during the severe market downturn of 2008 to 2009 missed out on the impressive two-year rally that followed. In our opinion, the lesson to be learned from these dramatic market events is that, for many investors, simply building and maintaining a well-diversified⁵ investment plan is the best long-term strategy.

To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Advantage Funds offers more than 110 mutual funds and other investments spanning a broad range of asset classes and investment styles. While 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.

Thank you for choosing to invest with Wells Fargo Advantage Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs. For current information about your fund investments, contact your investment professional, visit our website at www.wellsfargo.com/advantagefunds, or call us directly at 1-800-222-8222. We are available 24 hours a day, 7 days a week.

Sincerely,

Karla M. Rabusch

President

Wells Fargo Advantage Funds

4. The Morgan Stanley Capital International Europe, Australasia, and Far East (“MSCI EAFE”) Stock Index is an unmanaged group of securities widely regarded by investors to be representations of the stock markets of Europe, Australasia, and the Far East. You cannot invest directly in an index. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

5. Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Small Cap Growth Fund¹ 5

INVESTMENT OBJECTIVE

The Fund seeks long-term capital appreciation.

ADVISER

Wells Fargo Funds Management, LLC

SUB-ADVISER

Wells Capital Management Incorporated

PORTFOLIO MANAGERS

Thomas C. Ognar, CFA

Bruce C. Olson, CFA

Joseph M. Eberhardy, CFA, CFP

FUND INCEPTION

May 1, 1995

12 MONTH TOTAL RETURN AS OF DECEMBER 31, 2011
Class 2	(4.60)%
Russell 2000® Growth Index2	(2.91)%

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

The Adviser has committed through July 18, 2013 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain other expenses at 1.20% for Class 2. The Fund’s gross and net expense ratios are 1.20% and 1.20%, respectively, for Class 2 shares. Without these reductions, the Fund’s returns would have been lower.

1. The Fund is only open to certain insurance companies as described in the Statement of Additional information. The Fund is closed to all other investors.

2. The Russell 2000^® Growth Index measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. You cannot invest directly in an index.

3. The chart compares the performance of the Wells Fargo Advantage VT Small Cap Growth Fund Class 2 for the most recent ten years of the Fund with the Russell 2000 Growth Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

6 Wells Fargo Advantage VT Small Cap Growth Fund Performance Highlights (Unaudited)

MANAGER’S DISCUSSION

Fund highlights

n The Fund underperformed its benchmark, the Russell 2000^® Growth Index, for the 12-month period that ended December 31, 2011.

n An underweight in energy and overweights in consumer discretionary and information technology (IT) detracted from relative performance, while stock selection in health care aided performance.

n We have continued to employ a bottom-up investment process based on individual company fundamentals, rather than top-down trends, when making portfolio decisions.

Macro-driven volatility limited equity market returns for 2011.

The year began on a high note as the equity market continued its rally from late 2010 amid greater confidence in the sustainability of the U.S. economic recovery. While there were pockets of turbulence sparked by the geopolitical turmoil in North Africa and the Middle East and natural disasters in Japan, the market performed well through April 2011. In the spring and summer, however, investors’ spirits began to dampen as a string of discouraging economic data reignited recession fears. Investor confidence was further damaged by bickering over the federal debt ceiling, the downgrade of the U.S. credit rating by Standard & Poor’s, and the risk of financial contagion in Europe. Despite continued strength in corporate profits, investors’ intense focus on the negative macro headlines, particularly in Europe, led to heightened market volatility and a broad-based sell-off in equities during the third quarter. Although volatility persisted into the fourth quarter, most of the major equity indexes rebounded amid improved economic data and managed to finish 2011 with either modest gains or relatively mild losses.

TEN LARGEST EQUITY HOLDINGS4 (AS OF DECEMBER 31, 2011)
Akorn Incorporated	3.03%
Wright Express Corporation	2.83%
HMS Holdings Corporation	2.53%
Northern Oil & Gas Incorporated	2.36%
Chart Industries Incorporated	2.31%
Polypore International Incorporated	2.24%
Financial Engines Incorporated	2.22%
Life Time Fitness Incorporated	2.22%
Centene Corporation	2.20%
Synchronoss Technologies Incorporated	2.17%

Portfolio results varied by sector.

During 2011, favorable stock selection was particularly evident in the health care sector. A number of our holdings in the sector posted strong quarterly results, including pharmaceutical companies Akorn Incorporated, which targets ophthalmology and injectable markets, and Jazz Pharmaceuticals Incorporated, which focuses on narcolepsy and anxiety disorders. In addition, SonoSite Incorporated, a manufacturer of portable ultrasound technology, was recently acquired by Fujifilm at a sizable premium.

Our industrials holdings also delivered solid relative performance, with many companies in the sector posting strong results for the year in spite of macroeconomic

uncertainty. We identified particularly attractive opportunities in companies leveraged to drilling activity in North American shale. Specifically, Robbins & Myers Incorporated, a fluid management and process solutions company, achieved a 36% return for the year. Additionally, Chart Industries Incorporated, a manufacturer of engineered storage solutions, benefited from the ongoing development of liquid natural gas infrastructure.

4. The ten largest equity holdings are calculated based on the value of the securities divided by total net assets of the Fund. Holdings are subject to change and may have changed since the dates specified.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Small Cap Growth Fund 7

Stock selection in the IT sector was a source of weakness for the Fund in 2011. In particular, our internet software and services holdings detracted from performance. After a strong start to the year, IT stocks in general underperformed amid macro headwinds and concerns over slowing capital expenditures by large financial and government customers. One example is Vistaprint N.V. (a stock no longer held in the portfolio), which in July announced a change to its business model designed to increase revenues by sacrificing cash flow and earnings for several years. While expanding revenue growth is desirable, we look for robust revenue and earnings growth, and therefore sold the stock after modeling in the earnings decline.

SECTOR DISTRIBUTION⁵

(AS OF DECEMBER 31, 2011)

Our consumer discretionary holdings as a whole underperformed in 2011 as well. Bucking the trend was Life Time Fitness Incorporated, an operator of family-oriented fitness centers, which continued to deliver solid results and facilities expansion. Unfortunately, the gains were offset by holdings in Shutterfly Incorporated, and IMAX Corporation. Shutterfly moved higher in early 2011, driven by the company’s strong results and the integration of Tiny Prints Incorporated, a key competitor. However, increased competitive pressures later in the year threatened profit margins and weighed on the share price. Consistent with our discipline, we reduced our position in the stock in early 2011 and then added to it later in the year as our growth expectations “gap” widened. IMAX suffered from higher costs associated with new theatre openings and converting traditional films into IMAX format. While we believe the company’s growth prospects remain attractive, we materially reduced our position as our expectations “gap” narrowed.

We are confident in our companies’ growth prospects for 2012.

Our outlook for the coming year can best be described as cautiously optimistic. We believe that several factors could help boost business confidence and lead to a more stable investing environment in 2012, including the potential for greater clarity with regard to Europe, further improvements in U.S. employment trends and economic growth, and less partisan wrangling in Washington. Moreover, we continue to view small-cap growth stocks as an attractive asset class and remain committed to finding companies that offer robust, sustainable, and underappreciated growth.

5. Sector distribution is subject to change and is calculated based on the total long-term investments of the Fund.

8 Wells Fargo Advantage VT Small Cap Growth Fund Performance Highlights (Unaudited)

AVERAGE ANNUAL TOTAL RETURN⁶ (%) (AS OF DECEMBER 31, 2011)

													Expense Ratios7
	Inception Date		6 Months*			1 Year			5 Year		10 Year		Gross		Net8
Class 1		07/16/2010		(8.97	)		(4.34	)		4.32		4.89		0.95%		0.95%
Class 2		05/01/1995		(9.11	)		(4.60	)		4.24		4.85		1.20%		1.20%
Russell 2000 Growth Index				(10.59	)		(2.91	)		2.09		4.48

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

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. Smaller company stocks tend to be more volatile and less liquid than those of larger companies. The use of derivatives may reduce returns and/or increase volatility. Consult the Fund’s prospectus for additional information on these and other risks.

Please refer to the prospectus provided by your participating insurance company for detailed information describing the separate accounts for information regarding surrender charges, mortality and expense risk fees and other charges that may be assessed by the participating insurance companies.

6. Historical performance shown for Class 1 shares prior to their inception reflects the performance of Class 2 shares, and includes the higher expenses applicable to Class 2 shares. If these expenses had not been included, returns would be higher.

7. Reflects the expense ratios as stated in the most recent prospectuses.

8. The Adviser has committed through July 18, 2013 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain expenses, at the amounts shown above. Without this cap, the Fund’s returns would have been lower.

Fund Expenses (Unaudited) Wells Fargo Advantage VT Small Cap Growth Fund 9

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution (12b-1) 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, 2011 to December 31, 2011.

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 separate account charges assessed by participating insurance companies. 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 separate account charges assessed by participating insurance companies were included, your costs would have been higher.

	Beginning Account Value 07-01-2011		Ending Account Value 12-31-2011		Expenses Paid During the Period¹		Net Annual Expense Ratio
Class 1
Actual	$	1,000.00	$	910.27	$	4.57		0.95	%
Hypothetical (5% return before expenses)	$	1,000.00	$	1,020.42	$	4.84		0.95	%
Class 2
Actual	$	1,000.00	$	908.88	$	5.77		1.20	%
Hypothetical (5% return before expenses)	$	1,000.00	$	1,019.16	$	6.11		1.20	%

1. Expenses paid is equal to the annualized 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).

10 Wells Fargo Advantage VT Small Cap Growth Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Common Stocks: 95.53%
Consumer Discretionary: 16.08%
Hotels, Restaurants & Leisure: 5.98%
BJ’s Restaurants Incorporated«†		94,380	$	4,277,302
Bravo Brio Restaurant Group Incorporated†		66,066		1,133,032
Life Time Fitness IncorporatedǠ		110,700		5,175,225
Scientific Games Corporation Class A†		175,000		1,697,500
Shuffle Master Incorporated†		138,442		1,622,540
				13,905,599
Household Durables: 0.75%
Sodastream International LimitedǠ		53,400		1,745,646
Internet & Catalog Retail: 2.03%
Homeaway IncorporatedǠ		89,201		2,073,923
Shutterfly Incorporated†		116,753		2,657,298
				4,731,221
Media: 0.89%
IMAX Corporation†		57,700		1,057,641
MDC Partners Incorporated		74,800		1,011,296
				2,068,937
Specialty Retail: 4.45%
Hibbett Sports IncorporatedǠ		51,200		2,313,216
Mattress Firm Holding Corporation†		30,148		699,132
Tractor Supply Company		28,700		2,013,305
Ulta Salon Cosmetics & Fragrance Incorporated†		46,700		3,031,764
Vitamin Shoppe Incorporated†		57,400		2,289,112
				10,346,529
Textiles, Apparel & Luxury Goods: 1.98%
Vera Bradley IncorporatedǠ		104,693		3,376,349
Warnaco Group IncorporatedǠ		24,800		1,240,992
				4,617,341
Consumer Staples: 1.31%
Food & Staples Retailing: 1.31%
Fresh Market IncorporatedǠ		76,400		3,048,360
Energy: 6.29%
Oil, Gas & Consumable Fuels: 6.29%
Approach Resources IncorporatedǠ		108,900		3,202,749
Carrizo Oil & Gas Incorporated«†		67,756		1,785,371
Laredo Petroleum Holdings Incorporated†		72,659		1,620,296
Northern Oil & Gas Incorporated«†		228,600		5,481,828
Oasis Petroleum IncorporatedǠ		87,300		2,539,557
				14,629,801

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Small Cap Growth Fund 11

Security Name	Shares		Value
Financials: 2.60%
Capital Markets: 2.22%
Financial Engines IncorporatedǠ		231,800	$	5,176,094
Diversified Financial Services: 0.38%
MarketAxess Holdings Incorporated		29,100		876,201
Health Care: 24.00%
Biotechnology: 1.15%
Cepheid IncorporatedǠ		50,200		1,727,382
Exact Sciences Corporation†		117,920		957,510
				2,684,892
Health Care Equipment & Supplies: 9.92%
DexCom Incorporated†		160,200		1,491,462
Endologix Incorporated†		312,100		3,582,908
Masimo Corporation«		94,940		1,773,954
NxStage Medical Incorporated†		258,320		4,592,930
SonoSite Incorporated†		82,310		4,433,217
Volcano Corporation†		193,000		4,591,470
Zoll Medical Corporation†		41,400		2,615,652
				23,081,593
Health Care Providers & Services: 7.02%
Catalyst Health Solutions Incorporated†		63,837		3,319,524
Centene Corporation†		129,300		5,118,987
HMS Holdings CorporationǠ		183,950		5,882,721
IPC The Hospitalist Company†		44,100		2,016,252
				16,337,484
Health Care Technology: 1.43%
Merge Healthcare Incorporated†		89,915		436,088
SXC Health Solutions Corporation†		51,040		2,882,739
				3,318,827
Life Sciences Tools & Services: 0.43%
Luminex Corporation†		46,526		987,747
Pharmaceuticals: 4.05%
Akorn IncorporatedǠ		634,115		7,051,359
Impax Laboratories Incorporated†		44,400		895,548
Jazz Pharmaceuticals Incorporated†		38,500		1,487,255
				9,434,162
Industrials: 16.08%
Commercial Services & Supplies: 2.43%
InnerWorkings Incorporated†		262,889		2,447,497
On Assignment Incorporated†		287,381		3,212,920
				5,660,417

12 Wells Fargo Advantage VT Small Cap Growth Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Electrical Equipment: 2.54%
Altra Holdings Incorporated†		37,240	$	701,229
Polypore International Incorporated†		118,400		5,208,416
				5,909,645
Machinery: 5.70%
Chart Industries Incorporated†		99,292		5,368,718
Robbins & Myers Incorporated		83,100		4,034,505
The Middleby CorporationǠ		40,999		3,855,546
				13,258,769
Professional Services: 0.27%
Mistras Group Incorporated†		24,900		634,701
Road & Rail: 2.37%
Genesee & Wyoming Incorporated†		73,400		4,446,572
Greenbrier Companies IncorporatedǠ		44,100		1,070,748
				5,517,320
Trading Companies & Distributors: 2.77%
DXP Enterprises Incorporated†		70,897		2,282,883
Titan Machinery Incorporated†		191,073		4,152,016
				6,434,899
Information Technology: 28.95%
Communications Equipment: 2.00%
Aruba Networks IncorporatedǠ		117,800		2,181,656
Ixia†		234,531		2,464,921
				4,646,577
Electronic Equipment, Instruments & Components: 0.75%
Maxwell Technologies IncorporatedǠ		107,100		1,739,304
Internet Software & Services: 6.70%
Envestnet Incorporated†		230,200		2,753,192
Liveperson Incorporated†		110,500		1,386,775
LogMeIn IncorporatedǠ		118,200		4,556,610
LoopNet Incorporated†		6,537		119,496
Marchex Incorporated Class B		127,000		793,750
Mercadolibre Incorporated«		38,500		3,062,290
SciQuest Incorporated†		205,554		2,933,256
				15,605,369
IT Services: 3.82%
Gartner Incorporated†		48,294		1,679,182
ServiceSource International Incorporated†		38,900		610,341
Wright Express Corporation†		121,494		6,594,694
				8,884,217

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Small Cap Growth Fund 13

Security Name				Shares		Value
Semiconductors & Semiconductor Equipment: 2.53%
Cavium Incorporated†					56,100	$	1,594,923
Entegris Incorporated†					331,600		2,893,210
EZchip Semiconductor Limited†					49,900		1,413,667
							5,901,800
Software: 13.15%
Allot Communications Limited†					139,494		2,120,309
Broadsoft Incorporated†					106,576		3,218,595
Fortinet Incorporated†					159,600		3,480,876
Imperva Incorporated†					8,336		290,176
Kenexa Corporation†					6,904		184,337
Mitek Systems IncorporatedǠ					95,600		693,100
Opnet Technologies Incorporated					45,700		1,675,819
PROS Holdings Incorporated†					58,827		875,346
Qlik Technologies Incorporated†					69,300		1,677,060
Realpage IncorporatedǠ					63,000		1,592,010
Solarwinds Incorporated†					60,600		1,693,770
SuccessFactors IncorporatedǠ					29,190		1,163,805
Synchronoss Technologies Incorporated†					166,858		5,040,780
Taleo Corporation Class A†					90,473		3,500,400
Ultimate Software Group Incorporated†					52,100		3,392,752
							30,599,135
Materials: 0.22%
Chemicals: 0.22%
LSB Industries Incorporated†					18,600		521,359
Total Common Stocks (Cost $209,256,606)							222,303,946
Investment Companies: 0.71%
iShares Russell 2000 Growth Index Fund ETF«					19,643		1,654,530
Total Investment Companies (Cost $1,664,002)							1,654,530
				Principal
Other: 0.29%
Gryphon Funding Limited, Pass-Through Entity(a)(i)(v)				$	869,626		243,495
VFNC Corporation, Pass-Through Entity, 0.30%(a)(i)(v)144A±					989,896		425,655
Total Other (Cost $319,929)							669,150
	Yield			Shares
Short-Term Investments: 28.72%
Investment Companies: 28.72%
Wells Fargo Advantage Cash Investment Money Market Fund, Institutional Class(l)(u)		0.04	%		8,556,778		8,556,778
Wells Fargo Securities Lending Cash Investments, LLC(v)(l)(u)(r)		0.12			58,280,776		58,280,776
Total Short-Term Investments (Cost $66,837,554)							66,837,554

Total Investments in Securities
(Cost $278,078,091)*	125.25	%		291,465,180
Other Assets and Liabilities, Net	(25.25	)		(58,766,202	)
Total Net Assets	100.00	%	$	232,698,978

14 Wells Fargo Advantage VT Small Cap Growth Fund Portfolio of Investments—December 31, 2011

« All or a portion of this security is on loan.

† Non-income earning security.

(a) Security is fair valued by the Management Valuation Team, and in certain instances by the Board of Trustees, in accordance with procedures approved by the Board of Trustees.

(i) Illiquid security for which the designation as illiquid is unaudited.

(v) Security represents investment of cash collateral received from securities on loan.

144A Security that may be resold to “qualified institutional buyers” under Rule 144A or security offered pursuant to Section 4(2) of the Securities Act of 1933, as amended.

± Variable rate investment.

(l) Investment in an affiliate.

(u) Rate shown is the 7-day annualized yield at period end.

(r) The investment company is exempt from registration under Section 3(c)(7) of the 1940 Act.

* Cost for federal income tax purposes is $280,079,575 and net unrealized appreciation (depreciation) consists of:

Gross unrealized appreciation	$	28,977,823
Gross unrealized depreciation		(17,592,218	)
Net unrealized appreciation	$	11,385,605

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

Statement of Assets and Liabilities—December 31, 2011 Wells Fargo Advantage VT Small Cap Growth Fund 15

Assets
Investments
In unaffiliated securities (including securities on loan), at value	$	224,627,626
In affiliated securities, at value		66,837,554
Total investments, at value (see cost below)		291,465,180
Receivable for investments sold		1,922,691
Receivable for Fund shares sold		294,388
Receivable for dividends		3,591
Receivable for securities lending income		22,187
Prepaid expenses and other assets		5,911
Total assets		293,713,948
Liabilities
Payable for investments purchased		291,979
Payable for Fund shares redeemed		206,380
Payable upon receipt of securities loaned		58,600,705
Advisory fee payable		177,394
Distribution fees payable		52,330
Due to other related parties		30,700
Due to custodian bank		1,589,575
Accrued expenses and other liabilities		65,907
Total liabilities		61,014,970
Total net assets	$	232,698,978
NET ASSETS CONSIST OF
Paid-in capital	$	211,755,608
Undistributed net investment loss		(1,639	)
Accumulated net realized gains on investments		7,557,920
Net unrealized gains on investments		13,387,089
Total net assets	$	232,698,978
COMPUTATION OF NET ASSET VALUE PER SHARE1
Net assets – Class 1	$	29,350,512
Shares outstanding – Class 1		3,808,527
Net asset value per share – Class 1		$7.71
Net assets – Class 2	$	203,348,466
Shares outstanding – Class 2		26,472,040
Net asset value per share – Class 2		$7.68
Total investments, at cost	$	278,078,091
Securities on loan, at value	$	57,073,444

1. The Fund has an unlimited number of authorized shares.

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

16 Wells Fargo Advantage VT Small Cap Growth Fund Statement of Operations—Year Ended December 31, 2011

Investment income
Dividends*	$	301,694
Securities lending income, net		240,193
Income from affiliated securities		10,114
Total investment income		552,001
Expenses
Advisory fee		1,971,805
Administration fees
Fund level		131,454
Class 1		28,279
Class 2		182,047
Distribution fees
Class 2		568,898
Custody and accounting fees		48,637
Professional fees		24,316
Shareholder report expenses		80,964
Trustees’ fees and expenses		14,067
Other fees and expenses		5,234
Total expenses		3,055,701
Less: Fee waivers and/or expense reimbursements		(5,227	)
Net expenses		3,050,474
Net investment loss		(2,498,473	)
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains on investments		19,985,502
Net change in unrealized gains (losses) on investments		(30,858,077	)
Net realized and unrealized gains (losses) on investments		(10,872,575	)
Net decrease in net assets resulting from operations	$	(13,371,048	)
* Net of foreign dividend withholding taxes of		$4,319

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

Statements of Changes in Net Assets Wells Fargo Advantage VT Small Cap Growth Fund 17

	Year Ended December 31, 2011						Year Ended December 31, 2010
Operations
Net investment loss				$	(2,498,473	)				$	(1,839,556	)
Net realized gains on investments					19,985,502						27,159,838
Net change in unrealized gains (losses) on investments					(30,858,077	)					34,892,151
Net increase (decrease) in net assets resulting from operations					(13,371,048	)					60,212,433
Capital share transactions		Shares						Shares
Proceeds from shares sold
Class 1		392,602			3,135,719			345,312	1		2,449,216	1
Class 2		8,793,012			69,683,930			9,158,617	2		64,586,061	2
					72,819,649						67,035,277
Payment for shares redeemed
Class 1		(1,848,297	)		(14,311,440	)		(831,507	)1		(5,663,229	)1
Class 2		(13,028,327	)		(102,117,549	)		(8,891,344	)2		(61,045,657	)2
					(116,428,989	)					(66,708,886	)
Net asset value of shares issued in acquisition
Class 1		0			0			5,750,417			36,024,647
Class 2		0			0			1,240,431			7,770,923
					0						43,795,570
Net increase (decrease) in net assets resulting from capital share transactions					(43,609,340	)					44,121,961
Total increase (decrease) in net assets					(56,980,388	)					104,334,394
Net assets
Beginning of period					289,679,366						185,344,972
End of period				$	232,698,978					$	289,679,366
Undistributed net investment loss				$	(1,639	)				$	(1,998	)

1. Class commenced operations on July 16, 2010.

2. After the close of business on July 16, 2010, existing shares of the Fund were renamed Class 2 shares.

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

18 Wells Fargo Advantage VT Small Cap Growth Fund Financial Highlights

(For a share outstanding throughout each period)

	Year Ended December 31,
Class 1	2011			20101
Net asset value, beginning of period	$	8.06		$	6.26
Net investment loss		(0.06	)		(0.02	)
Net realized and unrealized gains (losses) on investments		(0.29	)		1.82
Total from investment operations		(0.35	)		1.80
Net asset value, end of period	$	7.71		$	8.06
Total return2		(4.34	)%		26.93	%
Ratios to average net assets (annualized)
Gross expenses		0.94	%		0.95	%
Net expenses		0.94	%		0.95	%
Net investment loss		(0.73	)%		(0.58	)%
Supplemental data
Portfolio turnover rate		118	%		71	%
Net assets, end of period (000’s omitted)		$29,351			$42,434

1. For the period from July 16, 2010 (commencement of class operations) to December 31, 2010.

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

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

Financial Highlights Wells Fargo Advantage VT Small Cap Growth Fund 19

(For a share outstanding throughout each period)

	Year Ended December 31,
Class 21	2011			2010			2009			2008			2007
Net asset value, beginning of period	$	8.05		$	6.35		$	4.16		$	9.69		$	9.96
Net investment loss		(0.09	)		(0.06	)		(0.03	)		(0.05	)		(0.07	)
Net realized and unrealized gains (losses) on investments		(0.28	)		1.76			2.22			(3.31	)		1.52
Total from investment operations		(0.37	)		1.70			2.19			(3.36	)		1.45
Distributions to shareholders from
Net realized gains		0.00			0.00			0.00			(2.17	)		(1.72	)
Net asset value, end of period	$	7.68		$	8.05		$	6.35		$	4.16		$	9.69
Total return		(4.60	)%		26.77	%		52.64	%		(41.42	)%		13.81	%
Ratios to average net assets (annualized)
Gross expenses		1.20	%		1.22	%		1.26	%		1.26	%		1.22	%
Net expenses		1.19	%		1.20	%		1.20	%		1.20	%		1.20	%
Net investment loss		(0.98	)%		(0.82	)%		(0.69	)%		(0.73	)%		(0.73	)%
Supplemental data
Portfolio turnover rate		118	%		71	%		75	%		76	%		121	%
Net assets, end of period (000’s omitted)		$203,348			$247,246			$185,345			$109,996			$221,394

1. After the close of business on July 16, 2010, existing shares of the Fund were renamed Class 2 shares.

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

20 Wells Fargo Advantage VT Small Cap Growth Fund Notes to Financial Statements

1. ORGANIZATION

Wells Fargo Variable 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”). These financial statements report on Wells Fargo Advantage VT Small Cap Growth 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

Investments in equity securities are valued each business day as of the close of regular trading on the New York Stock Exchange, which is usually 4:00 p.m. (Eastern Time). Securities which are traded on a national or foreign securities exchange are valued at the last reported sales price, except that securities listed on The Nasdaq Stock Market, Inc. (“Nasdaq”) are valued at the Nasdaq Official Closing Price (“NOCP”), and if no NOCP is available, then at the last reported sales price. If no sales price is shown on the Nasdaq, the bid price will be used. In the absence of any sale of securities listed on the Nasdaq, and in the case of other securities (including U.S. Government obligations, but excluding debt securities maturing in 60 days or less), the price will be deemed “stale” and the valuations will be determined in accordance with the Fund’s Fair Value Procedures.

Fixed income securities with maturities exceeding 60 days are valued based on available evaluated prices received from an independent pricing service approved by the Board of Trustees which may utilize both transaction data and market information such as yield, prices of securities of comparable quality, coupon rate, maturity, type of issue, trading characteristics and other market data. If valuations are not available from the pricing service or values received are deemed not representative of market value, values will be obtained from a third party broker-dealer or determined based on the Fund’s Fair Value Procedures.

Debt securities of sufficient credit quality with original maturities of 60 days or less generally are valued at amortized cost which approximates fair value. The amortized cost method involves valuing a security at its cost, plus accretion of discount or minus amortization of premium over the period until maturity.

Investments in open-end mutual funds and non-registered investment companies are generally valued at net asset value.

Investments which are not valued using any of the methods discussed above, are valued at their fair value, as determined by procedures established in good faith and approved by the Board of Trustees.

Security loans

The Fund may lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. The Fund continues to receive interest or dividends on the securities loaned. The Fund receives collateral in the form of cash or securities with a value at least equal to the value of the securities on loan. The value of the loaned securities is determined at the close of each business day and any additional required collateral is delivered to the Fund on the next business day. In a securities lending transaction, the net asset value of the Fund will be affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of the instrument in which collateral is invested. The amount of securities lending activity undertaken by the Fund fluctuates from time to time. In the event of default or bankruptcy by the borrower, the Fund may be prevented from recovering the loaned securities or gaining access to the collateral or may experience delays or costs in doing so. In addition, the investment of any cash collateral received may lose all or part of its value. The Fund has the right under the lending agreement to recover the securities from the borrower on demand.

The Fund lends its securities through an unaffiliated securities lending agent. Cash collateral received in connection with its securities lending transactions is invested in Wells Fargo Securities Lending Cash Investments, LLC (the “Cash Collateral Fund”). The Cash Collateral Fund is exempt from registration under Section 3(c)(7) of the 1940 Act and is managed by

Notes to Financial Statements Wells Fargo Advantage VT Small Cap Growth Fund 21

Wells Fargo Funds Management LLC (“Funds Management”) and is sub-advised by Wells Capital Management Incorporated (“Wells Capital Management”). Funds Management receives an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Cash Collateral Fund increase. All of the fees received by Funds Management are paid to Wells Capital Management for its services as sub-adviser. The Cash Collateral Fund seeks to provide a positive return compared to the daily Fed Funds Open rate by investing in high-quality, U.S. dollar-denominated short-term money market instruments. Cash Collateral Fund investments are fair valued based upon the amortized cost valuation technique. Income earned from investment in the Cash Collateral Fund is included in securities lending income on the Statement of Operations.

For Wells Fargo Advantage Funds that participated in securities lending activity prior to February 13, 2009, certain structured investment vehicles purchased in a joint account by the former securities lending agent defaulted or were impaired. Certain of the Wells Fargo Advantage Funds still hold ownership interest in these structured investment vehicles, which have since been restructured as pass-through securities. If the Fund holds an ownership interest in such pass-through securities, information regarding this ownership interest can be found in the Portfolio of Investments under the category “Other”.

Security transactions and income recognition

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

Dividend income is recognized on the ex-dividend date. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.

Distributions to shareholders

Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-dividend date. Such distributions are determined in conformity with income tax regulations, which may differ from generally accepted accounting principles.

The timing and character of distributions made during the period from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. To the extent that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment. Temporary differences do not require reclassifications. The primary permanent differences causing such reclassifications are due to net operating losses and recognition of partnership income. At December 31, 2011, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statement of Assets and Liabilities:

Paid-in Capital	Undistributed Net Investment Loss	Accumulated Net Realized Gains on Investments
$(2,437,757)	$2,498,832	$(61,075)

Federal and other taxes

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

The 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.

Under the recently enacted Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years which began after December 22, 2010 for an unlimited period. However, any losses incurred are required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

22 Wells Fargo Advantage VT Small Cap Growth Fund Notes to Financial Statements

As of December 31, 2011, the Fund had net capital loss carryforwards, which are available to offset future net realized capital gains, in the amount of $1,304,250 expiring in 2016.

Class allocations

The separate classes of shares offered by the Fund differ principally in distribution fees. Shareholders of each class bear certain expenses that pertain to that particular class. All shareholders bear the common expenses of the Fund, earn income from the portfolio, and are allocated unrealized gains and losses pro rata based on the average daily net assets of each class, without distinction between share classes. Dividends are determined separately for each class based on income and expenses allocable to each class. Realized gains and losses are allocated to each class pro rata based upon the net assets of each class on the date realized. Differences in per share dividend rates generally result from the relative weightings of pro rata income and realized gain allocations and from differences in separate class expenses, including distribution fees.

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 significant 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:

n Level 1 – quoted prices in active markets for identical securities

n Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

n Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

As of December 31, 2011, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:

Investments in Securities	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity securities
Common stocks	$	222,303,946	$	0	$	0	$	222,303,946
Investment companies		1,654,530		0		0		1,654,530
Other		0		0		669,150		669,150
Short-term investments
Investment companies		8,556,778		58,280,776		0		66,837,554
	$	232,515,254	$	58,280,776	$	669,150	$	291,465,180

Further details on the major security types listed above can be found in the Portfolio of Investments.

Transfers in and transfers out are recognized at the end of the reporting period. For the year ended December 31, 2011, the Fund did not have any significant transfers into/out of Level 1 and Level 2.

Notes to Financial Statements Wells Fargo Advantage VT Small Cap Growth Fund 23

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Other
Balance as of December 31, 2010	$	1,102,424
Accrued discounts (premiums)		0
Realized gains (losses)		0
Change in unrealized gains (losses)		(59,242	)
Purchases		0
Sales		(374,032	)
Transfers into Level 3		0
Transfers out of Level 3		0
Balance as of December 31, 2011	$	669,150
Change in unrealized gains (losses) relating to securities still held at December 31, 2011	$	(238,433	)

4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES

Advisory fee

The Trust has entered into an advisory contract with Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”). The adviser is responsible for implementing investment policies and guidelines and for supervising the sub-adviser, who is responsible for day-to-day portfolio management of the Fund.

Pursuant to the contract, Funds Management is entitled to receive an annual advisory fee starting at 0.75% and declining to 0.60% as the average daily net assets of the Fund increase. For the year ended December 31, 2011, the advisory fee was equivalent to an annual rate of 0.75% of the Fund’s average daily net assets.

Funds Management may retain the services of certain sub-advisers to provide daily portfolio management to the Fund. The fees related to sub-advisory services are borne directly by Funds Management and do not increase the overall fees paid by the Fund. Wells Capital Management, an affiliate of Funds Management, is the sub-adviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.55% and declining to 0.40% as the average daily net assets of the Fund increase.

Administration and transfer agent fees

The Trust has entered into an administration agreement with Funds Management. Under this agreement, for providing administrative services, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers, Funds Management is entitled to receive from the Fund an annual fund level administration fee starting at 0.05% and declining to 0.03% as the average daily net assets of the Fund increase and a class level administration fee of 0.08% of the average daily net assets of each class.

Funds Management has contractually waived and/or reimbursed advisory and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. Waiver of fees and/or reimbursement of expenses by Funds Management were made first from fund level expenses on a proportionate basis and then from class specific expenses.

Distribution fees

The Trust has adopted a Distribution Plan for Class 2 shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are charged to Class 2 shares and paid to Wells Fargo Funds Distributor, LLC, the principal underwriter, at an annual rate of 0.25% of its average daily net assets.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. Government obligations (if any) and short-term securities (securities with maturities of one year or less at purchase date), for the year ended December 31, 2011 were $305,876,878 and $341,865,856, respectively.

24 Wells Fargo Advantage VT Small Cap Growth Fund Notes to Financial Statements

6. ACQUISITION

After the close of business on July 16, 2010, the Fund acquired the net assets of Evergreen VA Growth Fund and renamed its existing shares as Class 2 shares. The purpose of the transaction was to combine two funds with similar investment objectives and strategies. Shareholders holding Class 1 and Class 2 shares of Evergreen VA Growth Fund received Class 1 and Class 2 shares of the Fund in the reorganization. The acquisition was accomplished by a tax-free exchange of all of the shares of Evergreen VA Growth Fund for 6,990,848 shares of the Fund valued at $43,795,570 at an exchange ratio of 1.82 and 1.78 for Class 1 and Class 2 shares, respectively. The investment portfolio of Evergreen VA Growth Fund with a fair value of $43,824,635, identified cost of $43,592,498 and unrealized gains of $232,137 at July 16, 2010 were the principal assets acquired by the Fund. The aggregate net assets of Evergreen VA Growth Fund and the Fund immediately prior to the acquisition were $43,795,570 and $198,568,568, respectively. The aggregate net assets of the Fund immediately after the acquisition were $242,364,138. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from Evergreen VA Growth Fund was carried forward to align ongoing reporting of the Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.

Assuming the acquisition had been completed January 1, 2010, the beginning of the annual reporting period for the Fund, the pro forma results of operations for the year ended December 31, 2010 would have been:

Net investment loss	$	(2,025,264	)
Net realized and unrealized gains on investments	$	61,432,964
Net increase in net assets resulting from operations	$	59,407,700

7. BANK BORROWINGS

The Trust and Wells Fargo Funds Trust (excluding the money market funds) are parties to a $150,000,000 revolving credit agreement with State Street Bank and Trust Company, 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, under the credit agreement, the Fund pays an annual commitment fee equal to 0.10% of the unused balance, which is allocated pro rata. Prior to September 6, 2011, the revolving credit agreement was for $125,000,000 and the annual commitment fee paid by the Fund was 0.125% of the unused balance. For the year ended December 31, 2011, the Fund paid $678 in commitment fees.

For the year ended December 31, 2011, there were no borrowings by the Fund under the agreement.

8. DISTRIBUTIONS TO SHAREHOLDERS

As of December 31, 2011, the components of distributable earnings on a tax basis were as follows:

Undistributed Long-Term Gain	Unrealized Gains (Losses)	Capital Loss Carryforward
$10,863,653	$11,385,605	$(1,304,250)

9. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and directors are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Trust may enter into contracts with service providers that contain a variety of indemnification clauses. The Trust’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.

10. NEW ACCOUNTING PRONOUNCEMENTS

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. ASU No. 2011-04 amends FASB ASC Topic 820, Fair Value Measurements and Disclosures, to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP. The ASU is

Notes to Financial Statements Wells Fargo Advantage VT Small Cap Growth Fund 25

effective prospectively for interim and annual periods beginning after December 15, 2011. Management expects that adoption of the ASU will result in additional disclosures in the financial statements, as applicable.

In April 2011, FASB issued ASU No. 2011-03 “Reconsideration of Effective Control for Repurchase Agreements”. ASU No. 2011-03 amends FASB ASC Topic 860, Transfers and Servicing, specifically the criteria required to determine whether a repurchase agreement (repo) and similar agreements should be accounted for as sales of financial assets or secured borrowings with commitments. ASU No. 2011-03 changes the assessment of effective control by focusing on the transferor’s contractual rights and obligations and removing the criterion to assess its ability to exercise those rights or honor those obligations. This could result in changes to the way entities account for certain transactions including repurchase agreements, mortgage dollar rolls and reverse repurchase agreements. The ASU will become effective on a prospective basis for new transfers and modifications to existing transactions as of the beginning of the first interim or annual period beginning on or after December 15, 2011. Management has evaluated the impact of adopting the ASU and expects no significant changes.

26 Wells Fargo Advantage VT Small Cap Growth Fund Report of Independent Registered Public Accounting Firm

BOARD OF TRUSTEES AND SHAREHOLDERS OF WELLS FARGO VARIABLE TRUST:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the Wells Fargo Advantage VT Small Cap Growth Fund (the “Fund”), one of the funds constituting the Wells Fargo Variable Trust, as of December 31, 2011, and the related statement of operations for the year then ended, statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2011, by correspondence with custodian and brokers, or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Wells Fargo Advantage VT Small Cap Growth Fund as of December 31, 2011, the results of its operations for the year then ended, changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

February 24, 2012

Other Information (Unaudited) Wells Fargo Advantage VT Small Cap Growth Fund 27

PROXY VOTING INFORMATION

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our Web site at www.wellsfargo.com/advantagefunds, or visiting the SEC Web site at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the Fund’s Web site at www.wellsfargo.com/advantagefunds or by visiting the SEC Web site at www.sec.gov.

PORTFOLIO HOLDINGS INFORMATION

The complete portfolio holdings for the Fund are publicly available on the Fund’s Web site (www.wellsfargo.com/advantagefunds) on a monthly, 30-day or more delayed basis. In addition, top ten holdings information for the Fund is publicly available on the Fund’s Web site on a monthly, seven-day or more delayed basis. The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q, which is available without charge by visiting the SEC Web site at www.sec.gov. In addition, the Fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and at regional offices in New York City, at 233 Broadway, and in Chicago, at 175 West Jackson Boulevard, Suite 900. Information about the Public Reference Room may be obtained by calling 1-800-SEC-0330.

28 Wells Fargo Advantage VT Small Cap Growth Fund Other Information (Unaudited)

BOARD OF TRUSTEES

The following table provides basic information about the Board of Trustees (the “Trustees”) of the Trust and Officers of the Trust. This table should be read in conjunction with the Prospectus and the Statement of Additional Information¹ of the Fund. Each of the Trustees and Officers listed below acts in identical capacities for the Wells Fargo Advantage family of funds, which consists of 138 funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). All of the Trustees are also Members of the Audit and Governance Committees of each Trust in the Fund Complex. The mailing address of each Trustee and Officer is 525 Market Street, 12th Floor, San Francisco, CA 94105. 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	Other Directorships During Past Five Years
Peter G. Gordon (Born 1942)	Trustee, since 1998; Chairman, since 2005 (Lead Trustee since 2001)	Co-Founder, Retired Chairman, President and CEO of Crystal Geyser Water Company. Trustee Emeritus, Colby College	Asset Allocation Trust
Isaiah Harris, Jr. (Born 1952)	Trustee, since 2009	Retired. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Mr. Harris is a certified public accountant.	CIGNA Corporation; Deluxe Corporation; Asset Allocation Trust
Judith M. Johnson (Born 1949)	Trustee, since 2008	Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.	Asset Allocation Trust
Leroy Keith, Jr. (Born 1939)	Trustee, since 2010	Chairman, Bloc Global Services (development and construction). Trustee of the Evergreen Funds from 1983 to 2010. Former Managing Director, Almanac Capital Management (commodities firm), former Partner, Stonington Partners, Inc. (private equity fund), former Director, Obagi Medical Products Co. and former Director, Lincoln Educational Services.	Trustee, Virtus Fund Complex (consisting of 40 portfolios as of 12/31/11); Asset Allocation Trust
David F. Larcker (Born 1950)	Trustee, since 2009	James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of Corporate Governance Research Program and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.	Asset Allocation Trust
Olivia S. Mitchell (Born 1953)	Trustee, since 2006	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.	Asset Allocation Trust

Other Information (Unaudited) Wells Fargo Advantage VT Small Cap Growth Fund 29

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years	Other Directorships During Past Five Years
Timothy J. Penny (Born 1951)	Trustee, since 1996	President and CEO of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007 and Senior Fellow at the Humphrey Institute Policy Forum at the University of Minnesota since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.	Asset Allocation Trust
Michael S. Scofield (Born 1943)	Trustee, since 2010	Served on the Investment Company Institute’s Board of Governors and Executive Committee from 2008-2011 as well the Governing Council of the Independent Directors Council from 2006-2011 and the Independent Directors Council Executive Committee from 2008-2011. Chairman of the IDC from 2008-2010. Institutional Investor (Fund Directions) Trustee of Year in 2007. Trustee of the Evergreen Funds (and its predecessors) from 1984 to 2010. Chairman of the Evergreen Funds from 2000-2010. Former Trustee of the Mentor Funds. Retired Attorney, Law Offices of Michael S. Scofield and former Director and Chairman, Branded Media Corporation (multi-media branding company).	Asset Allocation Trust
Donald C. Willeke (Born 1940)	Trustee, since 1996	Principal of the law firm of Willeke & Daniels. General Counsel of the Minneapolis Employees Retirement Fund from 1984 until its consolidation into the Minnesota Public Employees Retirement Association on June 30, 2010. Director and Vice Chair of The Free Trust (non-profit corporation). Director of the American Chestnut Foundation (non-profit corporation).	Asset Allocation Trust

Officers

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years
Karla M. Rabusch (Born 1959)	President, since 2003	Executive Vice President of Wells Fargo Bank, N.A. and President of Wells Fargo Funds Management, LLC since 2003. Senior Vice President and Chief Administrative Officer of Wells Fargo Funds Management, LLC from 2001 to 2003.
C. David Messman (Born 1960)	Secretary, since 2000; Chief Legal Counsel, since 2003	Senior Vice President and Secretary of Wells Fargo Funds Management, LLC since 2001. Vice President and Managing Senior Counsel of Wells Fargo Bank, N.A. since 1996.
Kasey Phillips (Born 1970)	Treasurer, since 2009	Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2006 to 2010. Treasurer of the Evergreen Funds from 2005 to 2010.
David Berardi (Born 1975)	Assistant Treasurer, since 2009	Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Assistant Vice President of Evergreen Investment Services, Inc. from 2004 to 2008. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.
Jeremy DePalma (Born 1974)	Assistant Treasurer, since 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. Vice President, Evergreen Investment Services, Inc. from 2004 to 2007. Head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.
Debra Ann Early (Born 1964)	Chief Compliance Officer, since 2007	Chief Compliance Officer of Wells Fargo Funds Management, LLC since 2007. Chief Compliance Officer of Parnassus Investments from 2005 to 2007. Chief Financial Officer of Parnassus Investments from 2004 to 2007 and Senior Audit Manager of PricewaterhouseCoopers LLP from 1998 to 2004.

1. 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 Web site at www.wellsfargo.com/advantagefunds.

30 Wells Fargo Advantage VT Small Cap Growth Fund List of Abbreviations

The following is a list of common abbreviations for terms and entities which may have appeared in this report.

ACB —  Agricultural Credit Bank

ADR —  American Depository Receipt

ADS —  American Depository Shares

AGC-ICC —  Assured Guaranty Corporation - Insured Custody Certificates

AGM —  Assured Guaranty Municipal

AMBAC —  American Municipal Bond Assurance Corporation

AMT —  Alternative Minimum Tax

AUD —  Australian Dollar

BAN —  Bond Anticipation Notes

BHAC —  Berkshire Hathaway Assurance Corporation

BRL —  Brazil Real

CAB —  Capital Appreciation Bond

CAD —  Canadian Dollar

CCAB —  Convertible Capital Appreciation Bond

CDA —  Community Development Authority

CDO —  Collateralized Debt Obligation

CHF —  Swiss Franc

COP —  Certificate of Participation

CR —  Custody Receipts

DKK —  Danish Krone

DRIVER —  Derivative Inverse Tax-Exempt Receipts

DW&P —  Department of Water & Power

DWR —  Department of Water Resources

ECFA —  Educational & Cultural Facilities Authority

EDA —  Economic Development Authority

EDFA —  Economic Development Finance Authority

ETF —  Exchange-Traded Fund

EUR —  Euro

FFCB —  Federal Farm Credit Bank

FGIC —  Financial Guaranty Insurance Corporation

FHA —  Federal Housing Authority

FHLB —  Federal Home Loan Bank

FHLMC —  Federal Home Loan Mortgage Corporation

FNMA —  Federal National Mortgage Association

FSA —  Farm Service Agency

GBP —  Great British Pound

GDR —  Global Depository Receipt

GNMA —  Government National Mortgage Association

GO —  General Obligation

HCFR —  Healthcare Facilities Revenue

HEFA —  Health & Educational Facilities Authority

HEFAR —  Higher Education Facilities Authority Revenue

HFA —  Housing Finance Authority

HFFA —  Health Facilities Financing Authority

HKD —  Hong Kong Dollar

HUF —  Hungarian Forint

IBC —  Insured Bond Certificate

IDA —  Industrial Development Authority

IDAG —  Industrial Development Agency

IDR —  Industrial Development Revenue

IEP —  Irish Pound

JPY —  Japanese Yen

KRW —  Republic of Korea Won

LIBOR —  London Interbank Offered Rate

LLC —  Limited Liability Company

LLP —  Limited Liability Partnership

LOC —  Letter of Credit

LP —  Limited Partnership

MBIA —  Municipal Bond Insurance Association

MFHR —  Multi-Family Housing Revenue

MTN —  Medium Term Note

MUD —  Municipal Utility District

MXN —  Mexican Peso

MYR —  Malaysian Ringgit

NATL-RE —  National Public Finance Guarantee Corporation

NOK —  Norwegian Krone

NZD —  New Zealand Dollar

PCFA —  Pollution Control Finance Authority

PCR —  Pollution Control Revenue

PFA —  Public Finance Authority

PFFA —  Public Facilities Financing Authority

PFOTER —  Puttable Floating Option Tax-Exempt Receipts

plc —  Public Limited Company

PLN —  Polish Zloty

PUTTER —  Puttable Tax-Exempt Receipts

R&D —  Research & Development

RDA —  Redevelopment Authority

RDFA —  Redevelopment Finance Authority

REIT —  Real Estate Investment Trust

ROC —  Reset Option Certificates

SAVRS —  Select Auction Variable Rate Securities

SBA —  Small Business Authority

SEK —  Swedish Krona

SFHR —  Single Family Housing Revenue

SFMR —  Single Family Mortgage Revenue

SGD —  Singapore Dollar

SKK —  Slovakian Koruna

SPDR —  Standard & Poor’s Depositary Receipts

TAN —  Tax Anticipation Notes

TBA —  To Be Announced

TIPS —  Treasury Inflation-Protected Securities

TRAN —  Tax Revenue Anticipation Notes

TCR —  Transferable Custody Receipts

TRY —  Turkish Lira

TTFA —  Transportation Trust Fund Authority

TVA —  Tennessee Valley Authority

XLCA —  XL Capital Assurance

ZAR —  South African Rand

FOR MORE INFORMATION

More information about Wells Fargo Advantage Funds is available free upon request. To obtain literature, please write, e-mail, visit the Fund’s Web site, or call:

Wells Fargo Advantage Funds

P.O. Box 8266

Boston, MA 02266-8266

E-mail: wfaf@wellsfargo.com

Web site: www.wellsfargo.com/advantagefunds

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

This report and the financial statements contained herein are submitted for the general information of the shareholders of Wells Fargo Advantage Funds. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. For a prospectus containing more complete information, including charges and expenses, call 1-800-222-8222 or visit the Fund’s Web site at www.wellsfargo.com/advantagefunds. Please consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. This and other information about Wells Fargo Advantage Funds can be found in the current prospectus. Read the prospectus carefully before you invest or send money.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

© 2012 Wells Fargo Funds Management, LLC. All rights reserved.

207577 02-12

AVT7/AR153 12-11

Wells Fargo Advantage

VT Small Cap Value Fund

Annual Report

December 31, 2011

Reduce clutter. Save trees.

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

Contents

Letter to Shareholders	2
Performance Highlights	5
Fund Expenses	9
Portfolio of Investments	10
Financial Statements
Statement of Assets and Liabilities	16
Statement of Operations	17
Statements of Changes in Net Assets	18
Financial Highlights	19
Notes to Financial Statements	21
Report of Independent Registered Public Accounting Firm	27
Other Information	28
List of Abbreviations	31

The views expressed and any forward-looking statements are as of December 31, 2011, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Funds Management, LLC. Discussions of individual securities, or the markets generally, or any Wells Fargo Advantage Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements; the views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Funds Management, LLC, disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

WELLS FARGO INVESTMENT HISTORY

1932	Keystone creates one of the first mutual fund families.
1971	Wells Fargo & Company introduces one of the first institutional index funds.
1978	Wells Fargo applies Markowitz and Sharpe’s research on Modern Portfolio Theory to introduce one of the industry’s first Tactical Asset Allocation (TAA) models in institutional separately managed accounts.
1984	Wells Fargo Stagecoach Funds launches its first asset allocation fund.
1989	The Tactical Asset Allocation (TAA) Model is first applied to Wells Fargo’s asset allocation mutual funds.
1994	Wells Fargo introduces the LifePath Funds, one of the first suites of target date funds (now the Wells Fargo Advantage Dow Jones Target Date FundsSM ).
1996	Evergreen Investments and Keystone Funds merge.
1997	Wells Fargo launches Wells Fargo Advantage WealthBuilder PortfoliosSM, a fund-of-funds suite of products that includes the use of quantitative models to shift assets among investment styles.
1999	Norwest Advantage Funds and Stagecoach Funds are reorganized into Wells Fargo Funds after the merger of Norwest and Wells Fargo.
2002	Evergreen Retail and Evergreen Institutional companies form the umbrella asset management company, Evergreen Investments.
2005	The integration of Strong Funds with Wells Fargo Funds creates Wells Fargo Advantage Funds, resulting in one of the top 20 mutual fund companies in the United States.
2006	Wells Fargo Advantage Funds relaunches the target date product line as Wells Fargo Advantage Dow Jones Target Date Funds.
2010	The mergers and reorganizations of Evergreen and Wells Fargo Advantage mutual funds are completed, unifying the families under the brand of Wells Fargo Advantage Funds.

Wells Fargo Advantage Funds^®

Wells Fargo Advantage Funds skillfully guides institutions, financial advisors, and individuals through the investment terrain to help them reach their financial objectives. Everything we do on behalf of investors is backed by our unique combination of qualifications.

Strength

Our organization is built on the standards of integrity and service established by our parent company—Wells Fargo & Company—more than 150 years ago. And, because we’re part of a highly diversified financial enterprise, we offer the depth of resources to help investors succeed.

Expertise

Our multi-boutique model offers investors access to the independent thinking of premier investment managers that have been chosen for their time-tested strategies. While each team specializes in a specific investment strategy, collectively they provide investors a wide choice of distinct investment styles. Our dedication to investment excellence doesn’t end with our expertise in manager selection—risk management, analysis, and rigorous ongoing review seek to ensure each manager’s investment process remains consistent.

Partnership

Our collaborative approach is built around understanding the needs and goals of our clients. By adhering to core principles of sound judgment and steady guidance, we support you through every stage of the investment decision process.

Carefully consider a fund’s investment objectives, risks, charges, and expenses before investing. For a current prospectus and, if available, a summary prospectus, containing this and other information, visit wellsfargo.com/advantagefunds. Read it carefully before investing.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds^®. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

“Dow Jones^®” and “Dow Jones Target Date Indexes^SM” are service marks of Dow Jones Trademark Holdings, LLC (“Dow Jones”), have been licensed to CME Group Index Services LLC (“CME Indexes”) and have been sublicensed for use for certain purposes by Global Index Advisors, Inc, and Wells Fargo Funds Management, LLC. The Wells Fargo Advantage Dow Jones Target Date Funds^SM based on the Dow Jones Target Date Indexes^SM, are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes or their respective affiliates and none of them makes any representation regarding the advisability of investing in such product(s).

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

Not part of the annual report.

Wells Fargo Advantage Funds offers more than 110 mutual funds across a wide range of asset classes, representing over $216 billion in assets under management, as of December 31, 2011.

Equity Funds
Asia Pacific Fund	Global Opportunities Fund	Premier Large Company Growth Fund
C&B Large Cap Value Fund	Growth Fund	Small Cap Opportunities Fund
C&B Mid Cap Value Fund	Health Care Fund	Small Cap Value Fund
Capital Growth Fund	Index Fund	Small Company Growth Fund
Common Stock Fund	International Equity Fund	Small Company Value Fund
Disciplined U.S. Core Fund	International Value Fund	Small/Mid Cap Core Fund
Discovery Fund†	Intrinsic Small Cap Value Fund	Small/Mid Cap Value Fund
Diversified Equity Fund	Intrinsic Value Fund	Social Sustainability Fund†
Diversified International Fund	Intrinsic World Equity Fund	Special Mid Cap Value Fund
Diversified Small Cap Fund	Large Cap Core Fund	Special Small Cap Value Fund
Emerging Growth Fund	Large Cap Growth Fund	Specialized Technology Fund
Emerging Markets Equity Fund	Large Company Value Fund	Strategic Large Cap Growth Fund
Endeavor Select Fund†	Omega Growth Fund	Traditional Small Cap Growth Fund
Enterprise Fund†	Opportunity Fund†	Utility and Telecommunications Fund
Equity Value Fund	Precious Metals Fund
Bond Funds
Adjustable Rate Government Fund	Inflation-Protected Bond Fund	Short-Term Bond Fund
California Limited-Term Tax-Free Fund	Intermediate Tax/AMT-Free Fund	Short-Term High Yield Bond Fund
California Tax-Free Fund	International Bond Fund	Short-Term Municipal Bond Fund
Colorado Tax-Free Fund	Minnesota Tax-Free Fund	Strategic Municipal Bond Fund
Government Securities Fund	Municipal Bond Fund	Total Return Bond Fund
High Income Fund	North Carolina Tax-Free Fund	Ultra Short-Term Income Fund
High Yield Bond Fund	Pennsylvania Tax-Free Fund	Ultra Short-Term Municipal Income Fund
Income Plus Fund	Short Duration Government Bond Fund	Wisconsin Tax-Free Fund
Asset Allocation Funds
Asset Allocation Fund	WealthBuilder Equity Portfolio†	Target 2020 Fund†
Conservative Allocation Fund	WealthBuilder Growth Allocation Portfolio†	Target 2025 Fund†
Diversified Capital Builder Fund	WealthBuilder Growth Balanced Portfolio†	Target 2030 Fund†
Diversified Income Builder Fund	WealthBuilder Moderate Balanced Portfolio†	Target 2035 Fund†
Growth Balanced Fund	WealthBuilder Tactical Equity Portfolio†	Target 2040 Fund†
Index Asset Allocation Fund	Target Today Fund†	Target 2045 Fund†
Moderate Balanced Fund	Target 2010 Fund†	Target 2050 Fund†
WealthBuilder Conservative Allocation Portfolio†	Target 2015 Fund†	Target 2055 Fund†
Money Market Funds
100% Treasury Money Market Fund	Heritage Money Market Fund†	National Tax-Free Money Market Fund
California Municipal Money Market Fund	Money Market Fund	Prime Investment Money Market Fund
Cash Investment Money Market Fund	Municipal Cash Management Money Market Fund	Treasury Plus Money Market Fund
Government Money Market Fund	Municipal Money Market Fund
Variable Trust Funds1
VT Discovery Fund†	VT Intrinsic Value Fund	VT Small Cap Growth Fund
VT Index Asset Allocation Fund	VT Omega Growth Fund	VT Small Cap Value Fund
VT International Equity Fund	VT Opportunity Fund†	VT Total Return Bond Fund

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Wells Fargo Advantage Money Market Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.

1. The Variable Trust Funds are generally available only through insurance company variable contracts.

† In this report, the Wells Fargo Advantage Discovery Fund^SM, Wells Fargo Advantage Endeavor Select Fund^SM, Wells Fargo Advantage Enterprise Fund^SM, Wells Fargo Advantage Opportunity Fund^SM, Wells Fargo Advantage Social Sustainability Fund^SM, Wells Fargo Advantage WealthBuilder Conservative Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Equity Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Moderate Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Tactical Equity Portfolio^SM, Wells Fargo Advantage Dow Jones Target Today Fund^SM, Wells Fargo Advantage Dow Jones Target 2010 Fund^SM, Wells Fargo Advantage Dow Jones Target 2015 Fund^SM, Wells Fargo Advantage Dow Jones Target 2020 Fund^SM, Wells Fargo Advantage Dow Jones Target 2025 Fund^SM, Wells Fargo Advantage Dow Jones Target 2030 Fund^SM, Wells Fargo Advantage Dow Jones Target 2035 Fund^SM, Wells Fargo Advantage Dow Jones Target 2040 Fund^SM, Wells Fargo Advantage Dow Jones Target 2045 Fund^SM, Wells Fargo Advantage Dow Jones Target 2050 Fund^SM, Wells Fargo Advantage Dow Jones Target 2055 Fund^SM, Wells Fargo Advantage Heritage Money Market Fund^SM, Wells Fargo Advantage VT Discovery Fund^SM, and Wells Fargo Advantage VT Opportunity Fund^SM are referred to as the Discovery Fund, Endeavor Select Fund, Enterprise Fund, Opportunity Fund, Social Sustainability Fund, WealthBuilder Conservative Allocation Portfolio, WealthBuilder Equity Portfolio, WealthBuilder Growth Allocation Portfolio, WealthBuilder Growth Balanced Portfolio, WealthBuilder Moderate Balanced Portfolio, WealthBuilder Tactical Equity Portfolio, Target Today Fund, Target 2010 Fund, Target 2015 Fund, Target 2020 Fund, Target 2025 Fund, Target 2030 Fund, Target 2035 Fund, Target 2040 Fund, Target 2045 Fund, Target 2050 Fund, Target 2055 Fund, Heritage Money Market Fund, VT Discovery Fund, and VT Opportunity Fund, respectively.

Not part of the annual report.

2 Wells Fargo Advantage VT Small Cap Value Fund Letter to Shareholders

Karla M. Rabusch,

President

Wells Fargo Advantage Funds

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

Dear Valued Shareholder:

We’re pleased to offer you this annual report for the Wells Fargo Advantage VT Small Cap Value Fund for the 12-month period that ended December 31, 2011.

For the full 12-month period, most of the major domestic equity indexes posted either modest gains or relatively mild losses. However, the market’s 12-month return figures mask the uneven path that it traced throughout the year as investors had to contend with a variety of global and domestic headwinds. Whatever the future holds, we continue to believe that most investors can benefit from adhering to a well-diversified investment strategy. Over the long-term, such a strategy may allow you to balance risks and opportunities as you pursue your financial goals in a dynamic market landscape.

The economic recovery gained traction as the year progressed.

The U.S. economic recovery that began in mid-2009 progressed throughout the 12-month period, yet the rate of growth remained subpar compared with most previous recovery cycles.

2011 opened on a note of mounting optimism regarding the strength of the recovery, yet a batch of disappointing economic data in the spring and summer cast renewed doubts on the sustainability of the recovery. In September, it was reported that U.S. gross domestic product (GDP) grew at a mere 1.3% annual rate in the second quarter of 2011, following anemic growth at an annual rate of 0.4% in the first quarter. According to the December estimate, GDP growth accelerated to an annual rate of 1.8% in the third quarter, reigniting hopes for a sustainable recovery. Those hopes were buoyed by widespread anticipation of even stronger GDP growth in the fourth quarter. By the end of the 12-month period, few economists believed that the U.S. economy was in danger of sliding back into recession, although many expected a sluggish growth environment in 2012.

The struggling housing and labor markets slowed growth.

As has been the case throughout the recovery, the housing and labor markets continued to restrain economic momentum during 2011.

The beleaguered housing market has arguably exerted the biggest drag on growth. Despite intermittent signs of improvement, ongoing weakness in sales of both new and existing homes has put considerable downward pressure on prices. On the other hand, the labor market took a decided turn for the better in the latter half of the year: initial unemployment claims have eased in recent months, and the private sector has been steadily adding jobs. The pace of hiring, while not brisk, was sufficient to push the U.S. unemployment rate down to 8.5% as of December 2011—still well above its historical average, but at its lowest level since February 2009. Many observers expect the unemployment rate to decline further in 2012, which could act as a tailwind for consumer spending—widely viewed as one of the keys to long-term economic growth.

The Federal Reserve announced that it will keep rates low until 2013.

Consumers have already demonstrated some resilience in their spending—even in the face of higher energy costs. Oil prices skyrocketed in early 2011 before retreating later in the year, only to spike again during the fourth quarter. Yet “core” inflation, which excludes volatile energy and food prices, remained fairly benign throughout the year.

Letter to Shareholders Wells Fargo Advantage VT Small Cap Value Fund 3

With inflation in check, the Federal Reserve (Fed) held its target range for the federal funds rate—a proxy for short-term interest rates—steady at 0% to 0.25%. Following its August 9 meeting, the Federal Open Market Committee (FOMC) issued a statement explaining that economic conditions were likely to warrant exceptionally low levels for the federal funds rate through at least mid-2013. In addition, the Fed carried out its second round of quantitative easing (QE2) in an effort to promote a more robust economic expansion. The stimulus program was completed as scheduled in June 2011. In September, the Fed launched yet another stimulus program—dubbed “Operation Twist”—that is designed to keep intermediate- and longer-term yields relatively low. The goal with keeping longer-term rates low is to encourage lending activity to spark business investments and home purchases, which, in turn, may provide support for a more sustainable economic recovery.

Market volatility was a dominant theme throughout most of 2011.

Despite pockets of turbulence sparked by the natural disasters in Japan and geopolitical turmoil in North Africa and the Middle East, the U.S. equity market performed very well from January through April of 2011. Some upbeat economic news, better-than-expected corporate profits, and investor enthusiasm about QE2 were among the catalysts for the market’s four-month advance.

In May and June, the market climate shifted to one of anxiety over the increasingly fragile state of the U.S. and global economies. As spring gave way to summer, investors not only worried that the U.S. might be on the brink of recession, they also feared that Europe’s sovereign debt problems could spiral out of control if a Greek default triggered financial contagion across the continent. In July and August, investor sentiment was further undermined by partisan wrangling over the federal debt ceiling and the Standard & Poor’s downgrade of the U.S. credit rating. The barrage of unsettling headlines led to heightened market volatility and sharply falling stock prices in the third quarter of 2011. Although volatility persisted into the fourth quarter, the market was able to rebound amid improved economic data and hopes for a resolution to the European crisis.

For the full 12-month period, the S&P 500 Index¹ of large-cap stocks achieved a total return of 2.1%. The Russell Midcap^® Index² and the Russell 2000^® Index³ of small-cap stocks lost 1.6% and 4.2%, respectively. International stocks fared worse than their U.S. counterparts, with the MSCI EAFE Index⁴ shedding 14.8%.

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 Russell Midcap^® Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 25% of the total market capitalization of the Russell 1000^® Index. You cannot invest directly in an index.

3. The Russell 2000^® Index measures the performance of the 2,000 smallest companies in the Russell 3000^® Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index. You cannot invest directly in an index.

4. The Morgan Stanley Capital International Europe, Australasia, and Far East (“MSCI EAFE”) Index is an unmanaged group of securities widely regarded by investors to be representations of the stock markets of Europe, Australasia, and the Far East. You cannot invest directly in an index. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

4 Wells Fargo Advantage VT Small Cap Value Fund Letter to Shareholders

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors.

Recent events have not altered our message to shareholders.

The market turmoil of 2011 and an uncertain outlook going forward have left many investors questioning their resolve—and their investments. Yet, it is precisely at such times that the market may present opportunities—as well as challenges—for prudent investors. Bear in mind that many investors who indiscriminately sold their equity investments during the severe market downturn of 2008 to 2009 missed out on the impressive two-year rally that followed. In our opinion, the lesson to be learned from these dramatic market events is that, for many investors, simply building and maintaining a well-diversified⁵ investment plan is the best long-term strategy.

To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Advantage Funds offers more than 110 mutual funds and other investments spanning a broad range of asset classes and investment styles. While 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.

Thank you for choosing to invest with Wells Fargo Advantage Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs. For current information about your fund investments, contact your investment professional, visit our website at www.wellsfargo.com/advantagefunds, or call us directly at 1-800-222-8222. We are available 24 hours a day, 7 days a week.

Sincerely,

Karla M. Rabusch

President

Wells Fargo Advantage Funds

5. Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Small Cap Value Fund 5

INVESTMENT OBJECTIVE

The Fund seeks long-term capital appreciation.

ADVISER

Wells Fargo Funds Management, LLC

SUB-ADVISER

Wells Capital Management Incorporated

PORTFOLIO MANAGERS

Erik Astheimer

I. Charles Rinaldi

Michael Schneider, CFA

FUND INCEPTION

October 10, 1997

12 MONTH TOTAL RETURN AS OF DECEMBER 31, 2011
Class 2	(7.26)%
Russell 2000® Value Index1	(5.50)%
Russell 2500™ Value Index2	(3.36)%

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

The Adviser has committed through July 18, 2013 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain other expenses at 1.14% for Class 2. The Fund’s gross and net expense ratios are 1.34% and 1.16%, respectively, for Class 2 shares. Without these reductions, the Fund’s returns would have been lower.

1. The Russell 2000^® Value Index measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. You cannot invest directly in an index.

2. The Russell 2500™ Value Index measures the performance of those Russell 2500 companies with lower price-to-book ratios and lower forecasted growth values. You cannot invest directly in an index.

3. The chart compares the performance of the Wells Fargo Advantage VT Small Cap Value Fund Class 2 for the most recent ten years of the Fund with the Russell 2000 Value Index and the Russell 2500 Value Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

6 Wells Fargo Advantage VT Small Cap Value Fund Performance Highlights (Unaudited)

MANAGER’S DISCUSSION

Fund highlights

n The Fund underperformed its benchmark, the Russell 2000^® Value Index, for the 12-month period that ended December 31, 2011, due to weak stock selection in financials and health care. The Fund’s lack of exposure to utilities also contributed to relative underperformance.

n Energy stocks were the largest relative contributors in the Fund even though the sector was one of the weakest within the benchmark. The Fund’s overweight to precious metals companies contributed to performance, but the weak performance of gold-mining stocks relative to the price of physical gold negated some of the positive impact.

n The ongoing European sovereign debt crisis remains the largest near-term risk for a market already plagued with volatility.

The 12-month period was once again characterized by high market volatility. Most domestic equity indexes finished the period flat to slightly down despite a strong rally in the fourth quarter of 2011. Volatility is likely to remain high given the market’s shifting focus from corporate earnings to sustainability of growth to concerns about European sovereign debt. These issues will take time to resolve, so the period ahead is likely to bring us more of the same.

TEN LARGEST EQUITY HOLDINGS4 (AS OF DECEMBER 31, 2011)
InterOil Corporation	7.07%
Randgold Resources Limited ADR	6.80%
Range Resources Corporation	3.01%
McMoRan Exploration Company	2.86%
Chimera Investment Corporation	2.85%
Chicago Bridge & Iron Company NV	2.67%
Trilogy Energy Corporation	2.27%
United Continental Holdings Incorporated	1.98%
Newpark Resources Incorporated	1.94%
Argo Group International Holdings Limited	1.58%

Weak stock selection in the financials and health care sectors resulted in the Fund’s underperformance for the period.

Financial stocks were the largest relative detractors for the period. The Fund largely invested in real estate investment trusts (REITs) that own mortgage-backed securities—known as mortgage REITs—as opposed to the regional banks and brick-and-mortar REITs that comprise the benchmark. Mortgage REITs make money by borrowing at a lower rate and investing in securities that yield a higher rate. In the current environment, in which interest rates are near record lows, mortgage REITs as a group provided dividends in the mid-teens that we deemed attractive. During the period, however, banks and brick-and-mortar REITs outperformed mortgage REITs, resulting in the Fund’s underperformance in the sector.

Health care stocks also detracted from relative performance. The home health services group was particularly hard hit by government intervention and regulation. Gentiva Health Services Incorporated, a leader in home nursing and hospice services, declined sharply on a higher-than-expected reimbursement rate cut proposed by the Centers for Medicare & Medicaid Services and subsequent concerns about the company’s ability to meet debt covenants. The considerable uncertainties with Gentiva’s business have pressured its stock price, but we see long-term value in the highly depressed stock. The home health industry is highly fragmented, and we believe that companies like Gentiva can grow and drive margin improvement through consolidation. The company should also continue to benefit from an aging population.

4. The ten largest equity holdings are calculated based on the value of the securities divided by total net assets of the Fund. Holdings are subject to change and may have changed since the date specified.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Small Cap Value Fund 7

SECTOR DISTRIBUTION⁵

(AS OF DECEMBER 31, 2011)

Despite general weakness among energy stocks, the Fund’s holdings in the sector were the largest relative contributors. Several of the Fund’s holdings were acquired during the reporting period, including Global Industries Limited, Petrohawk Energy Corporation, and Pride International Incorporated, which we no longer hold in the portfolio. Other long-time holdings like Trilogy Energy Corporation had triple-digit returns, helping mitigate negative returns from key holding InterOil Corporation. InterOil’s delay in reaching final investment decisions on announced projects led some investors to abandon the stock. We think the company is on track with its development plan, and we see significant upside as it moves closer to monetizing its resources.

Gold prices rose another 10% during the period. Top holding Randgold Resources Limited paced the Fund’s performance in the sector with a gain of 24%. However, Randgold’s positive return was the exception among mining stocks as most actually declined—some quite sharply—despite the rise in gold’s price. If the price of gold remains at current high levels or even continues to rise, we may see catch-up performance from gold-mining stocks, whose shares have languished over the past year.

Even though we see further uncertainty ahead, we remain focused on our investment process.

On the one hand, the market is facing significant headwinds that include high unemployment, the European sovereign debt crisis, and slowing economic growth. These issues are unlikely to be resolved anytime soon. On the other hand, we believe that stock valuations are quite attractive, particularly in light of near-record-low interest rates, high corporate profitability, and massive cash hoards on corporate balance sheets. Given the lack of a clear direction in the market or in the economy, macroeconomic events will likely dominate short-term market moves. In such an environment, it’s futile to attempt directional moves because the market shifts too quickly for anyone to be consistently right. Instead, we intend to stick with our time-tested investment process, which we believe should give us ample opportunity to buy high-quality businesses that we believe will thrive over the long-term.

5. Sector distribution is subject to change and is calculated based on the total long-term investments of the Fund.

8 Wells Fargo Advantage VT Small Cap Value Fund Performance Highlights (Unaudited)

AVERAGE ANNUAL TOTAL RETURN⁶ (%) (AS OF DECEMBER 31, 2011)

														Expense Ratios7
	Inception Date		6 Months*			1 Year			5 Year			10 Year		Gross		Net8
Class 1		07/16/2010		(7.16	)		(7.06	)		(0.69	)		4.88		1.09%		0.91%
Class 2		10/10/1997		(7.16	)		(7.26	)		(0.76	)		4.85		1.34%		1.16%
Russell 2000 Value Index				(8.94	)		(5.50	)		(1.87	)		6.40
Russell 2500 Value Index				(8.91	)		(3.36	)		(0.58	)		7.16

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

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. Smaller company stocks tend to be more volatile and less liquid than those of larger companies. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to foreign investment risk. Consult the Fund’s prospectus for additional information on these and other risks.

Please refer to the prospectus provided by your participating insurance company for detailed information describing the separate accounts for information regarding surrender charges, mortality and expense risk fees and other charges that may be assessed by the participating insurance companies.

6. Historical performance shown for Class 1 shares prior to their inception reflects the performance of Class 2 shares, and includes the higher expenses applicable to Class 2 shares. If these expenses had not been included, returns would be higher.

7. Reflects the expense ratios as stated in the most recent prospectuses.

8. The Adviser has committed through July 18, 2013 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain expenses, at 0.89% for Class 1 and 1.14% for Class 2 shares. Without this cap, the Fund’s returns would have been lower.

Fund Expenses (Unaudited) Wells Fargo Advantage VT Small Cap Value Fund 9

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution (12b-1) 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, 2011 to December 31, 2011.

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 separate account charges assessed by participating insurance companies. 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 separate account charges assessed by participating insurance companies were included, your costs would have been higher.

	Beginning Account Value 07-01-2011		Ending Account Value 12-31-2011		Expenses Paid During the Period1		Net Annual Expense Ratio
Class 1
Actual	$	1,000.00	$	928.41	$	4.33		0.89	%
Hypothetical (5% return before expenses)	$	1,000.00	$	1,020.72	$	4.53		0.89	%
Class 2
Actual	$	1,000.00	$	928.39	$	5.54		1.14	%
Hypothetical (5% return before expenses)	$	1,000.00	$	1,019.46	$	5.80		1.14	%

1. Expenses paid is equal to the annualized 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).

10 Wells Fargo Advantage VT Small Cap Value Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Common Stocks: 96.54%
Consumer Discretionary: 6.26%
Automobiles: 0.07%
Winnebago Industries Incorporated†		5,200	$	38,376
Diversified Consumer Services: 0.64%
Cambium Learning Group Incorporated †		22,100		66,742
Corinthian Colleges Incorporated †		138,900		301,413
				368,155
Hotels, Restaurants & Leisure: 1.87%
Denny’s Corporation†		52,100		195,896
Scientific Games Corporation Class A†		37,600		364,720
The Wendy’s Company		97,300		521,528
				1,082,144
Household Durables: 0.72%
Cavco Industries Incorporated†		6,900		276,414
KB Home Incorporated		13,000		87,360
Skyline Corporation		12,700		55,245
				419,019
Internet & Catalog Retail: 0.05%
dELiA*s Incorporated†		30,450		31,059
Media: 0.54%
Discovery Communications Incorporated†		8,300		312,910
Multiline Retail: 0.21%
Saks Incorporated†		12,500		121,875
Specialty Retail: 2.16%
Collective Brands Incorporated†		37,400		537,438
Foot Locker Incorporated		2,400		57,216
GameStop Corporation Class A†		9,000		217,170
rue21 Incorporated†		5,800		125,280
Talbots Incorporated†		48,000		127,680
Vitamin Shoppe Incorporated†		4,600		183,448
				1,248,232
Consumer Staples: 0.74%
Personal Products: 0.74%
Prestige Brands Holdings Incorporated†		37,900		427,133
Energy: 25.82%
Energy Equipment & Services: 8.96%
Ensco International plc ADR		2,800		131,376
Helix Energy Solutions Group Incorporated†		18,600		293,880
Helmerich & Payne Incorporated		13,400		782,024
ION Geophysical Corporation†		108,700		666,331

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Small Cap Value Fund 11

Security Name	Shares		Value
Energy Equipment & Services (continued)
Key Energy Services Incorporated†		41,400	$	640,458
Newpark Resources Incorporated†		117,900		1,120,050
Oceaneering International Incorporated		15,500		715,015
Parker Drilling Company†		34,300		245,931
PHI Incorporated (non-voting)†		13,300		330,505
PHI Incorporated (voting)†		2,200		51,282
Vantage Drilling Company†		59,700		69,252
Willbros Group Incorporated†		37,300		136,891
				5,182,995
Oil, Gas & Consumable Fuels: 16.86%
Forest Oil Corporation†		15,400		208,670
InterOil Corporation†		80,000		4,090,400
Lone Pine Resources Incorporated†		10,000		70,100
McMoRan Exploration Company†		113,700		1,654,335
Newfield Exploration Company†		4,600		173,558
PetroQuest Energy Incorporated†		12,700		83,820
Pioneer Natural Resources Company		3,200		286,336
Plains Exploration & Product Company†		3,600		132,192
Range Resources Corporation		28,100		1,740,514
Trilogy Energy Corporation		35,600		1,312,876
				9,752,801
Financials: 17.59%
Commercial Banks: 4.14%
Ameris Bancorp†		11,800		121,304
Associated Banc-Corporation		10,100		112,817
Bancorp Incorporated†		22,426		162,140
BBCN Bancorp Incorporated†		18,888		178,492
CenterState Banks Incorporated		19,500		129,090
City National Corporation		7,000		309,260
First Horizon National Corporation		19,700		157,600
Hancock Holding Company		9,400		300,518
IBERIABANK Corporation		6,800		335,240
NBH Holdings Corporation†144A(a)		12,400		198,400
Park Sterling Corporation†		16,500		67,320
Sandy Spring Bancorp Incorporated		5,080		89,154
SVB Financial Group†		4,200		200,298
Western Liberty Bancorp†		13,700		35,209
				2,396,842
Insurance: 2.91%
Argo Group International Holdings Limited		31,600		915,136
Hilltop Holdings Incorporated†		30,600		258,570
Mercury General Corporation		7,000		319,340
OneBeacon Insurance Group Limited		12,400		190,836
				1,683,882
REIT: 10.10%
Anworth Mortgage Asset Corporation		46,000		288,880

12 Wells Fargo Advantage VT Small Cap Value Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
REIT (continued)
Armour Residential Incorporated		4,751	$	33,494
Capstead Mortgage Corporation		61,400		763,816
Chimera Investment Corporation		657,600		1,650,576
Crexus Investment Corporation		69,300		719,334
Hatteras Financial Corporation		16,600		437,742
Invesco Mortgage Capital Incorporated		43,900		616,795
MFA Mortgage Investments Incorporated		85,400		573,888
Redwood Trust Incorporated		30,700		312,526
Sun Communities Incorporated		12,100		442,013
				5,839,064
Thrifts & Mortgage Finance: 0.44%
First Niagara Financial Group Incorporated		20,900		180,367
Northwest Bancshares Incorporated		5,900		73,396
				253,763
Health Care: 7.21%
Health Care Equipment & Supplies: 3.96%
Gen-Probe Incorporated†		5,000		295,600
Hill-Rom Holdings Incorporated		4,000		134,760
Hologic Incorporated†		14,100		246,891
Invacare Corporation		3,300		50,457
Orasure Technologies Incorporated†		96,300		877,293
Symmetry Medical Incorporated†		17,800		142,222
Thoratec Corporation†		9,600		322,176
Varian Medical Systems Incorporated†		3,300		221,529
				2,290,928
Health Care Providers & Services: 1.60%
Amedisys Incorporated†		18,300		199,653
Community Health Systems Incorporated†		7,400		129,130
Cross Country Healthcare Incorporated†		44,300		245,865
Gentiva Health Services Incorporated†		36,600		247,050
Healthways Incorporated†		15,500		106,330
				928,028
Health Care Technology: 0.35%
Medidata Solutions Incorporated†		9,300		202,275
Life Sciences Tools & Services: 1.30%
Accelrys Incorporated†		38,600		259,392
Nordion Incorporated		25,300		211,508
Parexel International Corporation†		13,500		279,990
				750,890
Industrials: 13.69%
Airlines: 4.51%
Alaska Air Group Incorporated†		9,200		690,828
Delta Air Lines Incorporated†		78,900		638,301

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Small Cap Value Fund 13

Security Name	Shares		Value
Airlines (continued)
Lan Airlines SA ADR		5,700	$	132,468
United Continental Holdings Incorporated†		60,800		1,147,296
				2,608,893
Building Products: 0.37%
Webco Industries Incorporated†(a)(i)		1,850		212,750
Commercial Services & Supplies: 4.30%
ABM Industries Incorporated		31,900		657,778
ACCO Brands Corporation†		46,800		451,620
GEO Group Incorporated†		44,900		752,075
Healthcare Services Group		18,300		323,727
Kforce Incorporated†		8,600		106,038
Verisk Analytics Incorporated Class A†		4,800		192,624
				2,483,862
Construction & Engineering: 3.06%
Chicago Bridge & Iron Company NV		40,800		1,542,240
Primoris Services Corporation		15,400		229,922
				1,772,162
Electrical Equipment: 0.73%
GrafTech International Limited†		30,700		419,055
Professional Services: 0.37%
Hill International Incorporated†		41,900		215,366
Road & Rail: 0.12%
Covenant Transport Incorporated Class A†		23,700		70,389
Trading Companies & Distributors: 0.23%
Applied Industrial Technologies Incorporated		3,800		133,646
Information Technology: 8.77%
Communications Equipment: 2.09%
Brocade Communications Systems Incorporated†		63,300		328,527
China GrenTech Corporation Limited ADR†		35,600		92,560
Harmonic Incorporated†		49,500		249,480
InterDigital Incorporated		9,300		405,201
MRV Communications Incorporated		153,400		131,924
				1,207,692
Computers & Peripherals: 1.91%
Cray Incorporated†		68,000		439,960
Intermec Incorporated†		55,900		383,474
Quantum Corporation†		116,900		280,560
				1,103,994
Electronic Equipment, Instruments & Components: 4.37%
Checkpoint Systems Incorporated†		13,600		148,784
Cognex Corporation		13,200		472,428

14 Wells Fargo Advantage VT Small Cap Value Fund Portfolio of Investments—December 31, 2011

Security Name	Shares		Value
Electronic Equipment, Instruments & Components (continued)
Coherent Incorporated†		15,300	$	799,731
Itron Incorporated†		4,600		164,542
OSI Systems Incorporated†		14,280		696,578
Power One Incorporated†		62,400		243,984
				2,526,047
Internet Software & Services: 0.22%
Monster Worldwide Incorporated†		16,400		130,052
Office Electronics: 0.18%
Zebra Technologies Corporation†		2,900		103,762
Materials: 15.59%
Chemicals: 0.56%
Calgon Carbon Corporation†		20,700		325,197
Containers & Packaging: 0.79%
Intertape Polymer Group Incorporated†		143,600		455,212
Metals & Mining: 13.84%
Agnico-Eagle Mines Limited		21,700		788,144
Carpenter Technology Corporation		15,300		787,644
Eldorado Gold Corporation		22,300		305,733
Great Basin Gold Limited†		109,100		99,390
Harry Winston Diamond Corporation†		9,500		101,175
Petaquilla Minerals Limited†		40,300		23,374
Randgold Resources Limited ADR		38,500		3,930,850
Royal Gold Incorporated		11,400		768,702
Sandstorm Gold Limited†		210,240		247,645
Silver Standard Resources Incorporated†		17,700		244,614
Steel Dynamics Incorporated		38,300		503,645
United States Steel Corporation		7,800		206,388
				8,007,304
Paper & Forest Products: 0.40%
Wausau Paper Corporation		27,800		229,628
Telecommunication Services: 0.87%
Diversified Telecommunication Services: 0.87%
Cincinnati Bell Incorporated†		165,600		501,768
Total Common Stocks (Cost $53,110,363)				55,837,150
Investment Companies: 1.33%
Market Vectors Gold Miners ETF		10,811		556,010
SPDR S&P Regional Banking ETF		8,600		209,926
Total Investment Companies (Cost $740,446)				765,936

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Small Cap Value Fund 15

Security Name				Expiration Date		Shares		Value
Warrants: 0.00%
Financials: 0.00%
REIT: 0.00%
Armour Residential Incorporated†					11/07/2013		1,000	$	14
Total Warrants (Cost $160)									14
	Yield
Short-Term Investments: 1.43%
Investment Companies: 1.43%
Wells Fargo Advantage Cash Investment Money Market Fund, Institutional Class(l)(u)		0.04	%				826,768		826,768
Total Short-Term Investments (Cost $826,768)									826,768

Total Investments in Securities
(Cost $54,677,737)*	99.30	%		57,429,868
Other Assets and Liabilities, Net	0.70			406,277
Total Net Assets	100.00	%	$	57,836,145

† Non-income earning security.

(a) Security is fair valued by the Management Valuation Team, and in certain instances by the Board of Trustees, in accordance with procedures approved by the Board of Trustees.

(i) Illiquid security for which the designation as illiquid is unaudited.

144A Security that may be resold to “qualified institutional buyers” under Rule 144A or security offered pursuant to Section 4(2) of the Securities Act of 1933, as amended.

(l) Investment in an affiliate.

(u) Rate shown is the 7-day annualized yield at period end.

* Cost for federal income tax purposes is $55,098,753 and net unrealized appreciation (depreciation) consists of:

Gross unrealized appreciation	$	9,498,418
Gross unrealized depreciation		(7,167,303	)
Net unrealized appreciation	$	2,331,115

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

16 Wells Fargo Advantage VT Small Cap Value Fund Statement of Assets and Liabilities—December 31, 2011

Assets
Investments
In unaffiliated securities, at value	$	56,603,100
In affiliated securities, at value		826,768
Total investments, at value (see cost below)		57,429,868
Receivable for investments sold		277,177
Receivable for Fund shares sold		107,303
Receivable for dividends		217,976
Prepaid expenses and other assets		1,632
Total assets		58,033,956
Liabilities
Payable for investments purchased		50,390
Payable for Fund shares redeemed		80,349
Advisory fee payable		3,737
Distribution fees payable		3,599
Due to other related parties		6,930
Professional fees payable		33,592
Accrued expenses and other liabilities		19,214
Total liabilities		197,811
Total net assets	$	57,836,145
NET ASSETS CONSIST OF
Paid-in capital	$	72,308,107
Undistributed net investment income		548,784
Accumulated net realized losses on investments		(17,772,877	)
Net unrealized gains on investments		2,752,131
Total net assets	$	57,836,145
COMPUTATION OF NET ASSET VALUE PER SHARE1
Net assets – Class 1	$	43,154,957
Shares outstanding – Class 1		5,179,453
Net asset value per share – Class 1		$8.33
Net assets – Class 2	$	14,681,188
Shares outstanding – Class 2		1,764,701
Net asset value per share – Class 2		$8.32
Total investments, at cost	$	54,677,737

1. The Fund has an unlimited number of authorized shares.

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

Statement of Operations—Year Ended December 31, 2011 Wells Fargo Advantage VT Small Cap Value Fund 17

Investment income
Dividends*	$	1,310,848
Income from affiliated securities		3,514
Total investment income		1,314,362
Expenses
Advisory fee		503,335
Administration fees
Fund level		33,556
Class 1		40,081
Class 2		13,608
Distribution fees
Class 2		42,526
Custody and accounting fees		31,942
Professional fees		51,956
Shareholder report expenses		75,530
Trustees’ fees and expenses		14,286
Other fees and expenses		1,394
Total expenses		808,214
Less: Fee waivers and/or expense reimbursements		(168,397	)
Net expenses		639,817
Net investment income		674,545
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains on investments		4,495,887
Net change in unrealized gains (losses) on investments		(10,006,816	)
Net realized and unrealized gains (losses) on investments		(5,510,929	)
Net decrease in net assets resulting from operations	$	(4,836,384	)
* Net of foreign dividend withholding taxes of		$8,839

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

18 Wells Fargo Advantage VT Small Cap Value Fund Statements of Changes in Net Assets

	Year Ended December 31, 2011						Year Ended December 31, 2010
Operations
Net investment income				$	674,545					$	519,509
Net realized gains on investments					4,495,887						1,492,997
Net change in unrealized gains (losses) on investments					(10,006,816	)					12,781,203
Net increase (decrease) in net assets resulting from operations					(4,836,384	)					14,793,709
Distributions to shareholders from
Net investment income
Class 1					(440,656	)					0	1
Class 2					(112,333	)					(154,516	)2
Total distributions to shareholders					(552,989	)					(154,516	)
Capital share transactions		Shares						Shares
Proceeds from shares sold
Class 1		177,977			1,478,858			219,798	1		1,707,233	1
Class 2		100,076			880,176			301,633	2		2,296,529	2
					2,359,034						4,003,762
Reinvestment of distributions
Class 1		49,071			440,656			0	1		0	1
Class 2		12,509			112,333			21,138	2		154,516	2
					552,989						154,516
Payment for shares redeemed
Class 1		(1,488,987	)		(13,002,318	)		(811,923	)1		(6,559,421	)1
Class 2		(518,177	)		(4,544,639	)		(897,225	)2		(7,075,687	)2
					(17,546,957	)					(13,635,108	)
Net asset value of shares issued in acquisition
Class 1		0			0			7,033,517			51,770,209
Class 2		0			0			1,210,549			8,910,235
					0						60,680,444
Net increase (decrease) in net assets resulting from capital share transactions					(14,634,934	)					51,203,614
Total increase (decrease) in net assets					(20,024,307	)					65,842,807
Net assets
Beginning of period					77,860,452						12,017,645
End of period				$	57,836,145					$	77,860,452
Undistributed net investment income				$	548,784					$	499,936

1. Class commenced operations on July 16, 2010.

2. After the close of business on July 16, 2010, the existing shares of the Fund were renamed Class 2 shares.

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

Financial Highlights Wells Fargo Advantage VT Small Cap Value Fund 19

(For a share outstanding throughout each period)

	Year Ended December 31,
Class 1	2011			20101
Net asset value, beginning of period	$	9.04		$	7.36
Net investment income		0.11			0.05	2
Net realized and unrealized gains (losses) on investments		(0.74	)		1.63
Total from investment operations		(0.63	)		1.68
Distributions to shareholders from
Net investment income		(0.08	)		0.00
Net asset value, end of period	$	8.33		$	9.04
Total return3		(7.06	)%		22.83	%
Ratios to average net assets (annualized)
Gross expenses		1.14	%		0.96	%
Net expenses		0.89	%		0.89	%
Net investment income		1.07	%		1.43	%
Supplemental data
Portfolio turnover rate		16	%		61	%
Net assets, end of period (000’s omitted)		$43,155			$58,255

1. For the period from July 16, 2010 (commencement of class operations) to December 31, 2010.

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.

20 Wells Fargo Advantage VT Small Cap Value Fund Financial Highlights

(For a share outstanding throughout each period)

	Year Ended December 31,
Class 21	2011			2010			2009			2008			2007
Net asset value, beginning of period	$	9.03		$	7.83		$	4.95		$	11.08		$	13.22
Net investment income (loss)		0.09			0.12			0.08			0.09	2		(0.04	)
Net realized and unrealized gains (losses) on investments		(0.74	)		1.20			2.87			(4.21	)		0.21
Total from investment operations		(0.65	)		1.32			2.95			(4.12	)		0.17
Distributions to shareholders from
Net investment income		(0.06	)		(0.12	)		(0.07	)		0.00			0.00
Net realized gains		0.00			0.00			0.00			(2.01	)		(2.31	)
Total distributions to shareholders		(0.06	)		(0.12	)		(0.07	)		(2.01	)		(2.31	)
Net asset value, end of period	$	8.32		$	9.03		$	7.83		$	4.95		$	11.08
Total return		(7.26	)%		17.25	%		60.18	%		(44.55	)%		(0.32	)%
Ratios to average net assets (annualized)
Gross expenses		1.39	%		1.52	%		2.56	%		1.69	%		1.51	%
Net expenses		1.14	%		1.14	%		1.14	%		1.14	%		1.14	%
Net investment income (loss)		0.82	%		1.06	%		1.39	%		1.18	%		(0.31	)%
Supplemental data
Portfolio turnover rate		16	%		61	%		45	%		39	%		60	%
Net assets, end of period (000’s omitted)		$14,681			$19,606			$12,018			$7,928			$17,527

1. After the close of business on July 16, 2010, existing shares of the Fund were renamed Class 2 shares.

2. Calculated based upon average shares outstanding.

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

Notes to Financial Statements Wells Fargo Advantage VT Small Cap Value Fund 21

1. ORGANIZATION

Wells Fargo Variable 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”). These financial statements report on Wells Fargo Advantage VT Small Cap Value 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

Investments in equity securities are valued each business day as of the close of regular trading on the New York Stock Exchange, which is usually 4:00 p.m. (Eastern Time). Securities which are traded on a national or foreign securities exchange are valued at the last reported sales price, except that securities listed on The Nasdaq Stock Market, Inc. (“Nasdaq”) are valued at the Nasdaq Official Closing Price (“NOCP”), and if no NOCP is available, then at the last reported sales price. If no sales price is shown on the Nasdaq, the bid price will be used. In the absence of any sale of securities listed on the Nasdaq, and in the case of other securities (including U.S. Government obligations, but excluding debt securities maturing in 60 days or less), the price will be deemed “stale” and the valuations will be determined in accordance with the Fund’s Fair Value Procedures.

Securities denominated in foreign currencies are translated into U.S. dollars using the closing rates of exchange in effect on the day of valuation.

Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore may not fully reflect trading or events that occur after the close of the principal exchange in which the foreign investments are traded, but before the close of the New York Stock Exchange. If such trading or events are expected to materially affect the value of the investments, then those investments are fair valued following procedures approved by the Board of Trustees. These procedures take into account multiple factors including movements in U.S. securities markets after foreign exchanges close. Depending on market activity, such fair valuations may be frequent. Such fair value pricing may result in NAVs that are higher or lower than NAVs based on the closing price or latest quoted bid price.

Debt securities of sufficient credit quality with original maturities of 60 days or less generally are valued at amortized cost which approximates fair value. The amortized cost method involves valuing a security at its cost, plus accretion of discount or minus amortization of premium over the period until maturity.

Investments in open-end mutual funds and non-registered investment companies are generally valued at net asset value.

Investments which are not valued using any of the methods discussed above, are valued at their fair value, as determined by procedures established in good faith and approved by the Board of Trustees.

Foreign currency translation

The accounting records of the Fund are maintained in U.S. dollars. Assets, including investment securities, and liabilities denominated in foreign currency are translated into U.S. dollars at the prevailing rates of exchange at the date of valuation. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and liabilities other than investments in securities resulting in changes in exchange rates.

The changes in net assets arising from changes in exchange rates and the changes in net assets resulting from changes in market prices of securities are not separately presented. Such changes are recorded with net realized and unrealized gains or losses from investments. Gains and losses from certain foreign currency transactions are treated as ordinary income for U.S. federal income tax purposes.

22 Wells Fargo Advantage VT Small Cap Value Fund Notes to Financial Statements

Security loans

The Fund may lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. The Fund continues to receive interest or dividends on the securities loaned. The Fund receives collateral in the form of cash or securities with a value at least equal to the value of the securities on loan. The value of the loaned securities is determined at the close of each business day and any additional required collateral is delivered to the Fund on the next business day. In a securities lending transaction, the net asset value of the Fund will be affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of the instrument in which collateral is invested. The amount of securities lending activity undertaken by the Fund fluctuates from time to time. In the event of default or bankruptcy by the borrower, the Fund may be prevented from recovering the loaned securities or gaining access to the collateral or may experience delays or costs in doing so. In addition, the investment of any cash collateral received may lose all or part of its value. The Fund has the right under the lending agreement to recover the securities from the borrower on demand.

The Fund lends its securities through an unaffiliated securities lending agent. Cash collateral received in connection with its securities lending transactions is invested in Wells Fargo Securities Lending Cash Investments, LLC (the “Cash Collateral Fund”). The Cash Collateral Fund is exempt from registration under Section 3(c)(7) of the 1940 Act and is managed by Wells Fargo Funds Management LLC (“Funds Management”) and is sub-advised by Wells Capital Management Incorporated (“Wells Capital Management”). Funds Management receives an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Cash Collateral Fund increase. All of the fees received by Funds Management are paid to Wells Capital Management for its services as sub-adviser. The Cash Collateral Fund seeks to provide a positive return compared to the daily Fed Funds Open rate by investing in high-quality, U.S. dollar-denominated short-term money market instruments. Cash Collateral Fund investments are fair valued based upon the amortized cost valuation technique. Income earned from investment in the Cash Collateral Fund is included in securities lending income on the Statement of Operations.

Security transactions and income recognition

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

Dividend income is recognized on the ex-dividend date, except for certain dividends from foreign securities, which are recorded as soon as the Fund is informed of the ex-dividend date. Income from foreign securities is recorded net of foreign taxes withheld where recovery of such taxes is not assured.

Distributions to shareholders

Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-dividend date. Such distributions are determined in conformity with income tax regulations, which may differ from generally accepted accounting principles.

The timing and character of distributions made during the period from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. To the extent that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment. Temporary differences do not require reclassifications. The primary permanent differences causing such reclassifications are due to dividends from certain securities. At December 31, 2011, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statement of Assets and Liabilities:

Undistributed Net Investment Income	Accumulated Net Realized Losses on Investments
$(72,708)	$72,708

Federal and other taxes

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

Notes to Financial Statements Wells Fargo Advantage VT Small Cap Value Fund 23

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.

Under the recently enacted Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years which began after December 22, 2010 for an unlimited period. However, any losses incurred are required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

As of December 31, 2011, the Fund had net capital loss carryforwards, which are available to offset future net realized capital gains, in the amount of $17,402,202 with $4,116,200 expiring in 2016 and $13,286,002 expiring in 2017.

Class allocations

The separate classes of shares offered by the Fund differ principally in distribution fees. Shareholders of each class bear certain expenses that pertain to that particular class. All shareholders bear the common expenses of the Fund, earn income from the portfolio, and are allocated unrealized gains and losses pro rata based on the average daily net assets of each class, without distinction between share classes. Dividends are determined separately for each class based on income and expenses allocable to each class. Realized gains and losses are allocated to each class pro rata based upon the net assets of each class on the date realized. Differences in per share dividend rates generally result from the relative weightings of pro rata income and realized gain allocations and from differences in separate class expenses, including distribution fees.

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 significant 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:

n Level 1 – quoted prices in active markets for identical securities

n Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

n Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

As of December 31, 2011, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:

Investments in Securities	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity securities
Common stocks	$	55,426,000	$	212,750	$	198,400	$	55,837,150
Investment companies		765,936		0		0		765,936
Warrants		0		14		0		14
Short-term investments
Investment companies		826,768		0		0		826,768
	$	57,018,704	$	212,764	$	198,400	$	57,429,868

Further details on the major security types listed above can be found in the Portfolio of Investments.

24 Wells Fargo Advantage VT Small Cap Value Fund Notes to Financial Statements

Transfers in and transfers out are recognized at the end of the reporting period. For the year ended December 31, 2011, the Fund did not have any significant transfers into/out of Level 1 and Level 2.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Common stocks
Balance as of December 31, 2010	$	170,200
Accrued discounts (premiums)		0
Realized gains (losses)		0
Change in unrealized gains (losses)		31,979
Purchases		208,971
Sales		0
Transfers into Level 3		0
Transfers out of Level 3		(212,750	)
Balance as of December 31, 2011	$	198,400
Change in unrealized gains (losses) relating to securities still held at December 31, 2011	$	(10,571	)

4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES

Advisory fee

The Trust has entered into an advisory contract with Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”). The adviser is responsible for implementing investment policies and guidelines and for supervising the sub-adviser, who is responsible for day-to-day portfolio management of the Fund.

Pursuant to the contract, Funds Management is entitled to receive an annual advisory fee starting at 0.75% and declining to 0.60% as the average daily net assets of the Fund increase. For the year ended December 31, 2011, the advisory fee was equivalent to an annual rate of 0.75% of the Fund’s average daily net assets.

Funds Management may retain the services of certain sub-advisers to provide daily portfolio management to the Fund. The fees related to sub-advisory services are borne directly by Funds Management and do not increase the overall fees paid by the Fund. Wells Capital Management, an affiliate of Funds Management, is the sub-adviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate starting at 0.55% and declining to 0.40% as the average daily net assets of the Fund increase.

Administration and transfer agent fees

The Trust has entered into an administration agreement with Funds Management. Under this agreement, for providing administrative services, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers, Funds Management is entitled to receive from the Fund an annual fund level administration fee starting at 0.05% and declining to 0.03% as the average daily net assets of the Fund increase and a class level administration fee of 0.08% of the average daily net assets of each class.

Funds Management has contractually waived and/or reimbursed advisory and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. Waiver of fees and/or reimbursement of expenses by Funds Management were made first from fund level expenses on a proportionate basis and then from class specific expenses.

Distribution fees

The Trust has adopted a Distribution Plan for Class 2 shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are charged to Class 2 shares and paid to Wells Fargo Funds Distributor, LLC, the principal underwriter, at an annual rate of 0.25% of its average daily net assets.

Notes to Financial Statements Wells Fargo Advantage VT Small Cap Value Fund 25

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. Government obligations (if any) and short-term securities (securities with maturities of one year or less at purchase date), for the year ended December 31, 2011 were $10,446,447 and $19,390,696, respectively.

6. ACQUISITION

After the close of business on July 16, 2010, the Fund acquired the net assets of Evergreen VA Special Values Fund and renamed its existing shares as Class 2 shares. The purpose of the transaction was to combine two funds with similar investment objectives and strategies. Shareholders holding Class 1 and Class 2 shares of Evergreen VA Special Values Fund received Class 1 and Class 2 shares, respectively, of the Fund in the reorganization. The acquisition was accomplished by a tax-free exchange of all of the shares of Evergreen VA Special Values Fund for 8,244,066 shares the Fund valued at $60,680,444 at an exchange ratio of 1.56 and 1.55 for Class 1 and Class 2 shares, respectively. The investment portfolio of Evergreen VA Special Values Fund with a fair value of $60,693,159, identified cost of $60,659,673 and unrealized gains of $33,486 at July 16, 2010 were the principal assets acquired by the Fund. The aggregate net assets of Evergreen VA Special Values Fund and the Fund immediately prior to the acquisition were $60,680,444 and $9,494,728, respectively. The aggregate net assets of the Fund immediately after the acquisition were $70,175,172. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from Evergreen VA Special Values Fund was carried forward to align ongoing reporting of the Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.

Assuming the acquisition had been completed January 1, 2010, the beginning of the annual reporting period for the Fund, the pro forma results of operations for the year ended December 31, 2010 would have been:

Net investment income	$	624,969
Net realized and unrealized gains on investments	$	13,030,505
Net increase in net assets resulting from operations	$	13,655,474

7. BANK BORROWINGS

The Trust and Wells Fargo Funds Trust (excluding the money market funds) are parties to a $150,000,000 revolving credit agreement with State Street Bank and Trust Company, 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, under the credit agreement, the Fund pays an annual commitment fee equal to 0.10% of the unused balance, which is allocated pro rata. Prior to September 6, 2011, the revolving credit agreement was for $125,000,000 and the annual commitment fee paid by the Fund was 0.125% of the unused balance. For the year ended December 31, 2011, the Fund paid $179 in commitment fees.

For the year ended December 31, 2011, there were no borrowings by the Fund under the agreement.

8. DISTRIBUTIONS TO SHAREHOLDERS

The tax character of distributions paid was $552,989 and $154,516 of ordinary income for the years ended December 31, 2011 and December 31, 2010, respectively.

As of December 31, 2011, the components of distributable earnings on a tax basis were as follows:

Undistributed Ordinary Income		Unrealized Gains		Capital Loss Carryforward
$	601,260	$	2,331,120	$	(17,402,202	)

9. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and directors are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Trust may enter into

26 Wells Fargo Advantage VT Small Cap Value Fund Notes to Financial Statements

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 May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. ASU No. 2011-04 amends FASB ASC Topic 820, Fair Value Measurements and Disclosures, to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP. The ASU is effective prospectively for interim and annual periods beginning after December 15, 2011. Management expects that adoption of the ASU will result in additional disclosures in the financial statements, as applicable.

In April 2011, FASB issued ASU No. 2011-03 “Reconsideration of Effective Control for Repurchase Agreements”. ASU No. 2011-03 amends FASB ASC Topic 860, Transfers and Servicing, specifically the criteria required to determine whether a repurchase agreement (repo) and similar agreements should be accounted for as sales of financial assets or secured borrowings with commitments. ASU No. 2011-03 changes the assessment of effective control by focusing on the transferor’s contractual rights and obligations and removing the criterion to assess its ability to exercise those rights or honor those obligations. This could result in changes to the way entities account for certain transactions including repurchase agreements, mortgage dollar rolls and reverse repurchase agreements. The ASU will become effective on a prospective basis for new transfers and modifications to existing transactions as of the beginning of the first interim or annual period beginning on or after December 15, 2011. Management has evaluated the impact of adopting the ASU and expects no significant changes.

Report of Independent Registered Public Accounting Firm Wells Fargo Advantage VT Small Cap Value Fund 27

BOARD OF TRUSTEES AND SHAREHOLDERS OF WELLS FARGO VARIABLE TRUST:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the Wells Fargo Advantage VT Small Cap Value Fund (the “Fund”), one of the funds constituting the Wells Fargo Variable Trust, as of December 31, 2011, and the related statement of operations for the year then ended, statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2011, by correspondence with custodian and brokers, or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Wells Fargo Advantage VT Small Cap Value Fund as of December 31, 2011, the results of its operations for the year then ended, changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

February 24, 2012

28 Wells Fargo Advantage VT Small Cap Value Fund Other Information (Unaudited)

TAX INFORMATION

For corporate shareholders, pursuant to Section 854 of the Internal Revenue Code, 23.30% of ordinary income dividends qualify for the corporate dividends-received deduction for the fiscal year ended December 31, 2011.

PROXY VOTING INFORMATION

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our Web site at www.wellsfargo.com/advantagefunds, or visiting the SEC Web site at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the Fund’s Web site at www.wellsfargo.com/advantagefunds or by visiting the SEC Web site at www.sec.gov.

PORTFOLIO HOLDINGS INFORMATION

The complete portfolio holdings for the Fund are publicly available on the Fund’s Web site (www.wellsfargo.com/advantagefunds) on a monthly, 30-day or more delayed basis. In addition, top ten holdings information for the Fund is publicly available on the Fund’s Web site on a monthly, seven-day or more delayed basis. The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q, which is available without charge by visiting the SEC Web site at www.sec.gov. In addition, the Fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and at regional offices in New York City, at 233 Broadway, and in Chicago, at 175 West Jackson Boulevard, Suite 900. Information about the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Other Information (Unaudited) Wells Fargo Advantage VT Small Cap Value Fund 29

BOARD OF TRUSTEES

The following table provides basic information about the Board of Trustees (the “Trustees”) of the Trust and Officers of the Trust. This table should be read in conjunction with the Prospectus and the Statement of Additional Information¹ of the Fund. Each of the Trustees and Officers listed below acts in identical capacities for the Wells Fargo Advantage family of funds, which consists of 138 funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). All of the Trustees are also Members of the Audit and Governance Committees of each Trust in the Fund Complex. The mailing address of each Trustee and Officer is 525 Market Street, 12th Floor, San Francisco, CA 94105. 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	Other Directorships During Past Five Years
Peter G. Gordon (Born 1942)	Trustee, since 1998; Chairman, since 2005 (Lead Trustee since 2001)	Co-Founder, Retired Chairman, President and CEO of Crystal Geyser Water Company. Trustee Emeritus, Colby College	Asset Allocation Trust
Isaiah Harris, Jr. (Born 1952)	Trustee, since 2009	Retired. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Mr. Harris is a certified public accountant.	CIGNA Corporation; Deluxe Corporation; Asset Allocation Trust
Judith M. Johnson (Born 1949)	Trustee, since 2008	Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.	Asset Allocation Trust
Leroy Keith, Jr. (Born 1939)	Trustee, since 2010	Chairman, Bloc Global Services (development and construction). Trustee of the Evergreen Funds from 1983 to 2010. Former Managing Director, Almanac Capital Management (commodities firm), former Partner, Stonington Partners, Inc. (private equity fund), former Director, Obagi Medical Products Co. and former Director, Lincoln Educational Services.	Trustee, Virtus Fund Complex (consisting of 40 portfolios as of 12/31/11); Asset Allocation Trust
David F. Larcker (Born 1950)	Trustee, since 2009	James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of Corporate Governance Research Program and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.	Asset Allocation Trust
Olivia S. Mitchell (Born 1953)	Trustee, since 2006	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.	Asset Allocation Trust

30 Wells Fargo Advantage VT Small Cap Value Fund Other Information (Unaudited)

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years	Other Directorships During Past Five Years
Timothy J. Penny (Born 1951)	Trustee, since 1996	President and CEO of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007 and Senior Fellow at the Humphrey Institute Policy Forum at the University of Minnesota since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.	Asset Allocation Trust
Michael S. Scofield (Born 1943)	Trustee, since 2010	Served on the Investment Company Institute’s Board of Governors and Executive Committee from 2008-2011 as well the Governing Council of the Independent Directors Council from 2006-2011 and the Independent Directors Council Executive Committee from 2008-2011. Chairman of the IDC from 2008-2010. Institutional Investor (Fund Directions) Trustee of Year in 2007. Trustee of the Evergreen Funds (and its predecessors) from 1984 to 2010. Chairman of the Evergreen Funds from 2000-2010. Former Trustee of the Mentor Funds. Retired Attorney, Law Offices of Michael S. Scofield and former Director and Chairman, Branded Media Corporation (multi-media branding company).	Asset Allocation Trust
Donald C. Willeke (Born 1940)	Trustee, since 1996	Principal of the law firm of Willeke & Daniels. General Counsel of the Minneapolis Employees Retirement Fund from 1984 until its consolidation into the Minnesota Public Employees Retirement Association on June 30, 2010. Director and Vice Chair of The Free Trust (non-profit corporation). Director of the American Chestnut Foundation (non-profit corporation).	Asset Allocation Trust

Officers

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years
Karla M. Rabusch (Born 1959)	President, since 2003	Executive Vice President of Wells Fargo Bank, N.A. and President of Wells Fargo Funds Management, LLC since 2003. Senior Vice President and Chief Administrative Officer of Wells Fargo Funds Management, LLC from 2001 to 2003.
C. David Messman (Born 1960)	Secretary, since 2000; Chief Legal Counsel, since 2003	Senior Vice President and Secretary of Wells Fargo Funds Management, LLC since 2001. Vice President and Managing Senior Counsel of Wells Fargo Bank, N.A. since 1996.
Kasey Phillips (Born 1970)	Treasurer, since 2009	Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2006 to 2010. Treasurer of the Evergreen Funds from 2005 to 2010.
David Berardi (Born 1975)	Assistant Treasurer, since 2009	Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Assistant Vice President of Evergreen Investment Services, Inc. from 2004 to 2008. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.
Jeremy DePalma (Born 1974)	Assistant Treasurer, since 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. Vice President, Evergreen Investment Services, Inc. from 2004 to 2007. Head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.
Debra Ann Early (Born 1964)	Chief Compliance Officer, since 2007	Chief Compliance Officer of Wells Fargo Funds Management, LLC since 2007. Chief Compliance Officer of Parnassus Investments from 2005 to 2007. Chief Financial Officer of Parnassus Investments from 2004 to 2007 and Senior Audit Manager of PricewaterhouseCoopers LLP from 1998 to 2004.

1. 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 Web site at www.wellsfargo.com/advantagefunds.

List of Abbreviations Wells Fargo Advantage VT Small Cap Value Fund 31

The following is a list of common abbreviations for terms and entities which may have appeared in this report.

ACB —  Agricultural Credit Bank

ADR —  American Depository Receipt

ADS —  American Depository Shares

AGC-ICC —  Assured Guaranty Corporation - Insured Custody Certificates

AGM —  Assured Guaranty Municipal

AMBAC —  American Municipal Bond Assurance Corporation

AMT —  Alternative Minimum Tax

AUD —  Australian Dollar

BAN —  Bond Anticipation Notes

BHAC —  Berkshire Hathaway Assurance Corporation

BRL —  Brazil Real

CAB —  Capital Appreciation Bond

CAD —  Canadian Dollar

CCAB —  Convertible Capital Appreciation Bond

CDA —  Community Development Authority

CDO —  Collateralized Debt Obligation

CHF —  Swiss Franc

COP —  Certificate of Participation

CR —  Custody Receipts

DKK —  Danish Krone

DRIVER —  Derivative Inverse Tax-Exempt Receipts

DW&P —  Department of Water & Power

DWR —  Department of Water Resources

ECFA —  Educational & Cultural Facilities Authority

EDA —  Economic Development Authority

EDFA —  Economic Development Finance Authority

ETF —  Exchange-Traded Fund

EUR —  Euro

FFCB —  Federal Farm Credit Bank

FGIC —  Financial Guaranty Insurance Corporation

FHA —  Federal Housing Authority

FHLB —  Federal Home Loan Bank

FHLMC —  Federal Home Loan Mortgage Corporation

FNMA —  Federal National Mortgage Association

FSA —  Farm Service Agency

GBP —  Great British Pound

GDR —  Global Depository Receipt

GNMA —  Government National Mortgage Association

GO —  General Obligation

HCFR —  Healthcare Facilities Revenue

HEFA —  Health & Educational Facilities Authority

HEFAR —  Higher Education Facilities Authority Revenue

HFA —  Housing Finance Authority

HFFA —  Health Facilities Financing Authority

HKD —  Hong Kong Dollar

HUF —  Hungarian Forint

IBC —  Insured Bond Certificate

IDA —  Industrial Development Authority

IDAG —  Industrial Development Agency

IDR —  Industrial Development Revenue

IEP —  Irish Pound

JPY —  Japanese Yen

KRW —  Republic of Korea Won

LIBOR —  London Interbank Offered Rate

LLC —  Limited Liability Company

LLP —  Limited Liability Partnership

LOC —  Letter of Credit

LP —  Limited Partnership

MBIA —  Municipal Bond Insurance Association

MFHR —  Multi-Family Housing Revenue

MTN —  Medium Term Note

MUD —  Municipal Utility District

MXN —  Mexican Peso

MYR —  Malaysian Ringgit

NATL-RE —  National Public Finance Guarantee Corporation

NOK —  Norwegian Krone

NZD —  New Zealand Dollar

PCFA —  Pollution Control Finance Authority

PCR —  Pollution Control Revenue

PFA —  Public Finance Authority

PFFA —  Public Facilities Financing Authority

PFOTER —  Puttable Floating Option Tax-Exempt Receipts

plc —  Public Limited Company

PLN —  Polish Zloty

PUTTER —  Puttable Tax-Exempt Receipts

R&D —  Research & Development

RDA —  Redevelopment Authority

RDFA —  Redevelopment Finance Authority

REIT —  Real Estate Investment Trust

ROC —  Reset Option Certificates

SAVRS —  Select Auction Variable Rate Securities

SBA —  Small Business Authority

SEK —  Swedish Krona

SFHR —  Single Family Housing Revenue

SFMR —  Single Family Mortgage Revenue

SGD —  Singapore Dollar

SKK —  Slovakian Koruna

SPDR —  Standard & Poor’s Depositary Receipts

TAN —  Tax Anticipation Notes

TBA —  To Be Announced

TIPS —  Treasury Inflation-Protected Securities

TRAN —  Tax Revenue Anticipation Notes

TCR —  Transferable Custody Receipts

TRY —  Turkish Lira

TTFA —  Transportation Trust Fund Authority

TVA —  Tennessee Valley Authority

XLCA —  XL Capital Assurance

ZAR —  South African Rand

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FOR MORE INFORMATION

More information about Wells Fargo Advantage Funds is available free upon request. To obtain literature, please write, e-mail, visit the Fund’s Web site, or call:

Wells Fargo Advantage Funds

P.O. Box 8266

Boston, MA 02266-8266

E-mail: wfaf@wellsfargo.com

Web site: www.wellsfargo.com/advantagefunds

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

This report and the financial statements contained herein are submitted for the general information of the shareholders of Wells Fargo Advantage Funds. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. For a prospectus containing more complete information, including charges and expenses, call 1-800-222-8222 or visit the Fund’s Web site at www.wellsfargo.com/advantagefunds. Please consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. This and other information about Wells Fargo Advantage Funds can be found in the current prospectus. Read the prospectus carefully before you invest or send money.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

© 2012 Wells Fargo Funds Management, LLC. All rights reserved.

207578 02-12

AVT8/AR154 12-11

Wells Fargo Advantage

VT Total Return Bond Fund

Annual Report

December 31, 2011

Reduce clutter. Save trees.

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

Contents

Letter to Shareholders	2
Performance Highlights	5
Fund Expenses	9
Portfolio of Investments	10
Financial Statements
Statement of Assets and Liabilities	24
Statement of Operations	25
Statements of Changes in Net Assets	26
Financial Highlights	27
Notes to Financial Statements	28
Report of Independent Registered Public Accounting Firm	34
Other Information	35
List of Abbreviations	38

The views expressed and any forward-looking statements are as of December 31, 2011, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Funds Management, LLC. Discussions of individual securities, or the markets generally, or any Wells Fargo Advantage Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements; the views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Funds Management, LLC, disclaims any obligation to publicly update or revise any views expressed or forward-looking statements.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

WELLS FARGO INVESTMENT HISTORY

1932	Keystone creates one of the first mutual fund families.
1971	Wells Fargo & Company introduces one of the first institutional index funds.
1978	Wells Fargo applies Markowitz and Sharpe’s research on Modern Portfolio Theory to introduce one of the industry’s first Tactical Asset Allocation (TAA) models in institutional separately managed accounts.
1984	Wells Fargo Stagecoach Funds launches its first asset allocation fund.
1989	The Tactical Asset Allocation (TAA) Model is first applied to Wells Fargo’s asset allocation mutual funds.
1994	Wells Fargo introduces the LifePath Funds, one of the first suites of target date funds (now the Wells Fargo Advantage Dow Jones Target Date FundsSM ).
1996	Evergreen Investments and Keystone Funds merge.
1997	Wells Fargo launches Wells Fargo Advantage WealthBuilder PortfoliosSM, a fund-of-funds suite of products that includes the use of quantitative models to shift assets among investment styles.
1999	Norwest Advantage Funds and Stagecoach Funds are reorganized into Wells Fargo Funds after the merger of Norwest and Wells Fargo.
2002	Evergreen Retail and Evergreen Institutional companies form the umbrella asset management company, Evergreen Investments.
2005	The integration of Strong Funds with Wells Fargo Funds creates Wells Fargo Advantage Funds, resulting in one of the top 20 mutual fund companies in the United States.
2006	Wells Fargo Advantage Funds relaunches the target date product line as Wells Fargo Advantage Dow Jones Target Date Funds.
2010	The mergers and reorganizations of Evergreen and Wells Fargo Advantage mutual funds are completed, unifying the families under the brand of Wells Fargo Advantage Funds.

Wells Fargo Advantage Funds^®

Wells Fargo Advantage Funds skillfully guides institutions, financial advisors, and individuals through the investment terrain to help them reach their financial objectives. Everything we do on behalf of investors is backed by our unique combination of qualifications.

Strength

Our organization is built on the standards of integrity and service established by our parent company—Wells Fargo & Company—more than 150 years ago. And, because we’re part of a highly diversified financial enterprise, we offer the depth of resources to help investors succeed.

Expertise

Our multi-boutique model offers investors access to the independent thinking of premier investment managers that have been chosen for their time-tested strategies. While each team specializes in a specific investment strategy, collectively they provide investors a wide choice of distinct investment styles. Our dedication to investment excellence doesn’t end with our expertise in manager selection—risk management, analysis, and rigorous ongoing review seek to ensure each manager’s investment process remains consistent.

Partnership

Our collaborative approach is built around understanding the needs and goals of our clients. By adhering to core principles of sound judgment and steady guidance, we support you through every stage of the investment decision process.

Carefully consider a fund’s investment objectives, risks, charges, and expenses before investing. For a current prospectus and, if available, a summary prospectus, containing this and other information, visit wellsfargo.com/advantagefunds. Read it carefully before investing.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds^®. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

“Dow Jones^®” and “Dow Jones Target Date Indexes^SM” are service marks of Dow Jones Trademark Holdings, LLC (“Dow Jones”), have been licensed to CME Group Index Services LLC (“CME Indexes”) and have been sublicensed for use for certain purposes by Global Index Advisors, Inc, and Wells Fargo Funds Management, LLC. The Wells Fargo Advantage Dow Jones Target Date Funds^SM based on the Dow Jones Target Date Indexes^SM, are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes or their respective affiliates and none of them makes any representation regarding the advisability of investing in such product(s).

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

Not part of the annual report.

Wells Fargo Advantage Funds offers more than 110 mutual funds across a wide range of asset classes, representing over $216 billion in assets under management, as of December 31, 2011.

Equity Funds
Asia Pacific Fund	Global Opportunities Fund	Premier Large Company Growth Fund
C&B Large Cap Value Fund	Growth Fund	Small Cap Opportunities Fund
C&B Mid Cap Value Fund	Health Care Fund	Small Cap Value Fund
Capital Growth Fund	Index Fund	Small Company Growth Fund
Common Stock Fund	International Equity Fund	Small Company Value Fund
Disciplined U.S. Core Fund	International Value Fund	Small/Mid Cap Core Fund
Discovery Fund†	Intrinsic Small Cap Value Fund	Small/Mid Cap Value Fund
Diversified Equity Fund	Intrinsic Value Fund	Social Sustainability Fund†
Diversified International Fund	Intrinsic World Equity Fund	Special Mid Cap Value Fund
Diversified Small Cap Fund	Large Cap Core Fund	Special Small Cap Value Fund
Emerging Growth Fund	Large Cap Growth Fund	Specialized Technology Fund
Emerging Markets Equity Fund	Large Company Value Fund	Strategic Large Cap Growth Fund
Endeavor Select Fund†	Omega Growth Fund	Traditional Small Cap Growth Fund
Enterprise Fund†	Opportunity Fund†	Utility and Telecommunications Fund
Equity Value Fund	Precious Metals Fund
Bond Funds
Adjustable Rate Government Fund	Inflation-Protected Bond Fund	Short-Term Bond Fund
California Limited-Term Tax-Free Fund	Intermediate Tax/AMT-Free Fund	Short-Term High Yield Bond Fund
California Tax-Free Fund	International Bond Fund	Short-Term Municipal Bond Fund
Colorado Tax-Free Fund	Minnesota Tax-Free Fund	Strategic Municipal Bond Fund
Government Securities Fund	Municipal Bond Fund	Total Return Bond Fund
High Income Fund	North Carolina Tax-Free Fund	Ultra Short-Term Income Fund
High Yield Bond Fund	Pennsylvania Tax-Free Fund	Ultra Short-Term Municipal Income Fund
Income Plus Fund	Short Duration Government Bond Fund	Wisconsin Tax-Free Fund
Asset Allocation Funds
Asset Allocation Fund	WealthBuilder Equity Portfolio†	Target 2020 Fund†
Conservative Allocation Fund	WealthBuilder Growth Allocation Portfolio†	Target 2025 Fund†
Diversified Capital Builder Fund	WealthBuilder Growth Balanced Portfolio†	Target 2030 Fund†
Diversified Income Builder Fund	WealthBuilder Moderate Balanced Portfolio†	Target 2035 Fund†
Growth Balanced Fund	WealthBuilder Tactical Equity Portfolio†	Target 2040 Fund†
Index Asset Allocation Fund	Target Today Fund†	Target 2045 Fund†
Moderate Balanced Fund	Target 2010 Fund†	Target 2050 Fund†
WealthBuilder Conservative Allocation Portfolio†	Target 2015 Fund†	Target 2055 Fund†
Money Market Funds
100% Treasury Money Market Fund	Heritage Money Market Fund†	National Tax-Free Money Market Fund
California Municipal Money Market Fund	Money Market Fund	Prime Investment Money Market Fund
Cash Investment Money Market Fund	Municipal Cash Management Money Market Fund	Treasury Plus Money Market Fund
Government Money Market Fund	Municipal Money Market Fund
Variable Trust Funds1
VT Discovery Fund†	VT Intrinsic Value Fund	VT Small Cap Growth Fund
VT Index Asset Allocation Fund	VT Omega Growth Fund	VT Small Cap Value Fund
VT International Equity Fund	VT Opportunity Fund†	VT Total Return Bond Fund

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Wells Fargo Advantage Money Market Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.

1. The Variable Trust Funds are generally available only through insurance company variable contracts.

† In this report, the Wells Fargo Advantage Discovery Fund^SM, Wells Fargo Advantage Endeavor Select Fund^SM, Wells Fargo Advantage Enterprise Fund^SM, Wells Fargo Advantage Opportunity Fund^SM, Wells Fargo Advantage Social Sustainability Fund^SM, Wells Fargo Advantage WealthBuilder Conservative Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Equity Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Allocation Portfolio^SM, Wells Fargo Advantage WealthBuilder Growth Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Moderate Balanced Portfolio^SM, Wells Fargo Advantage WealthBuilder Tactical Equity Portfolio^SM, Wells Fargo Advantage Dow Jones Target Today Fund^SM, Wells Fargo Advantage Dow Jones Target 2010 Fund^SM, Wells Fargo Advantage Dow Jones Target 2015 Fund^SM, Wells Fargo Advantage Dow Jones Target 2020 Fund^SM, Wells Fargo Advantage Dow Jones Target 2025 Fund^SM, Wells Fargo Advantage Dow Jones Target 2030 Fund^SM, Wells Fargo Advantage Dow Jones Target 2035 Fund^SM, Wells Fargo Advantage Dow Jones Target 2040 Fund^SM, Wells Fargo Advantage Dow Jones Target 2045 Fund^SM, Wells Fargo Advantage Dow Jones Target 2050 Fund^SM, Wells Fargo Advantage Dow Jones Target 2055 Fund^SM, Wells Fargo Advantage Heritage Money Market Fund^SM, Wells Fargo Advantage VT Discovery Fund^SM, and Wells Fargo Advantage VT Opportunity Fund^SM are referred to as the Discovery Fund, Endeavor Select Fund, Enterprise Fund, Opportunity Fund, Social Sustainability Fund, WealthBuilder Conservative Allocation Portfolio, WealthBuilder Equity Portfolio, WealthBuilder Growth Allocation Portfolio, WealthBuilder Growth Balanced Portfolio, WealthBuilder Moderate Balanced Portfolio, WealthBuilder Tactical Equity Portfolio, Target Today Fund, Target 2010 Fund, Target 2015 Fund, Target 2020 Fund, Target 2025 Fund, Target 2030 Fund, Target 2035 Fund, Target 2040 Fund, Target 2045 Fund, Target 2050 Fund, Target 2055 Fund, Heritage Money Market Fund, VT Discovery Fund, and VT Opportunity Fund, respectively.

Not part of the annual report.

2 Wells Fargo Advantage VT Total Return Bond Fund Letter to Shareholders

Karla M. Rabusch,

President

Wells Fargo Advantage Funds

During the period, fixed-income performance was best among the highest-quality securities and U.S. Treasuries

Dear Valued Shareholder:

We are pleased to offer you this annual report for the Wells Fargo Advantage VT Total Return Bond Fund, which covers the 12-month period that ended December 31, 2011. During the period, fixed-income performance was best among the highest-quality securities and U.S. Treasuries, as investors shifted allocations into the higher-quality safe havens when the Greek credit crisis escalated in August 2011 and amplified volatility through November 2011.

U.S. Treasuries and the highest-rated bonds performed best during the period.

Fixed-income performance oscillated during the 12-month period but culminated in strong annual returns in the core bond market. In the first quarter of 2011, U.S. Treasury yields climbed incrementally higher, but corporate bonds and structured product yields generally remained unchanged. High-yield securities performed better than investment-grade debt during these months. However, in the spring of 2011, those themes shifted as investment-grade bond prices once again strongly improved while high-yield securities underperformed but continued to generate positive returns. U.S. Treasury yields began to decline, with the most notable shifts lower occurring from April through mid-May 2011. Strategies that were broadly diversified across various sectors and credit-quality tiers generally outperformed strategies that were more heavily focused on U.S. Treasuries and the highest-quality fixed-income securities during this time, but most fixed-income sectors generated positive returns.

In June 2011, fixed-income securities were generally in a modest decline after having strong performance in the prior two months. Some risk aversion returned to the fixed-income markets at the start of the period, but those trends turned around in July 2011, resulting in positive performance across nearly all fixed-income markets, including high yield. During this period, once again strategies that were broadly diversified across various sectors and credit-quality tiers generally outperformed. During this turnaround, it appeared that economic optimism and investor confidence in the U.S. were on the upswing again.

However, those trends didn’t last for long—not due to the U.S. economy but instead from the lack of investor confidence overseas, as the Greek credit crisis once again rippled through the global credit markets. In August 2011, the crisis crescendoed, stirring up a wave of global risk aversion that led to a powerful rally in U.S. Treasuries and a sharp decline in high-yield bond prices, most notably in the lowest-quality credit tiers. During this time, most investment-grade fixed-income markets continued to generate positive returns—but specific areas of the riskiest segments of the market declined—and U.S. Treasury yields set multi-decade lows, surpassing the low yield levels that were set in the summer of 2010.

In October 2011, the high-yield market recovered significantly, benefiting from improving policy indications from Europe and the formal announcement of a European debt deal late in the month. Once again, investor confidence was bolstered, but the trend didn’t last because another round of policy uncertainty in Europe welled up, causing risk aversion and credit fears to return. November 2011 saw a modest decline in investment-grade corporate bond prices and a sharp correction in high-yield corporate bonds, before another strong recovery in

Letter to Shareholders Wells Fargo Advantage VT Total Return Bond Fund 3

pricing in December finished the period on a positive trend. Thus, the theme for the period was an oscillation between risk aversion from global credit concerns and burgeoning trends of improving investor confidence. On the whole, most investment-grade fixed-income markets generated strong positive returns, with U.S. Treasuries providing the best performance for the period, while high-yield markets and the riskiest segments of structured products lagged.

The Federal Reserve launched Operation Twist in September.

While economic concerns and credit woes escalated in Europe, the growth outlook in the U.S. also continued to throttle back. This prompted the Federal Reserve (Fed) to intervene yet again with monetary accommodation—this time with “Operation Twist,” which was announced and launched in September 2011. Operation Twist was aimed at flattening the yield curve and driving long-term rates down by purchasing long-term Treasuries against selling short-term Treasuries off the Fed’s balance sheet. The Fed stated that it is unlikely to raise rates before mid-2013, thus keeping yields on Treasuries low. Treasury yields continued to rally from this policymaking, while credit spreads on corporate and securitized sectors widened with increasing risk aversion.

Economic conditions continued to face some headwinds in the form of languishing housing values and elevated levels of unemployment, which continued to create some volatility in the fixed-income markets during the period. While we cannot say definitively what near-term performance will look like, we continue to encourage investors to maintain fully diversified, actively managed portfolios, which may provide better protection from risk and added opportunities to capture relative value. While heightened volatility may be uncomfortable to experience in the short term, it often leads to unique opportunities to add relative value for investors with long-term investment horizons.

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

Periods of uncertainty can present challenges, but experience has taught us that maintaining a long-term investment strategy based on individual goals and risk tolerance can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Advantage Funds offers more than 110 mutual funds and other investments 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.

In our opinion, diligent and earnest assessment of the fundamental risks in individual fixed-income securities will be a key differentiating factor between which investment strategies perform well and which do not. At Wells Fargo Advantage Funds, we intend to continue measuring relative-value opportunities in the fixed-income markets and across our lineup of Wells Fargo Advantage Income Funds. We believe it is particularly important to have diligent investment analysts in charge of investor assets in changing markets. As evidenced by the performance of fixed-income assets during the recent 12-month period, heightened risks also often accompany such opportunities.

Thus, the theme for the period was an oscillation between risk aversion from global credit concerns and burgeoning trends of improving investor confidence.

4 Wells Fargo Advantage VT Total Return Bond Fund Letter to Shareholders

Thank you for choosing to invest with Wells Fargo Advantage Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs. For current information about your fund investments, contact your investment professional, visit our website at www.wellsfargo.com/advantagefunds, or call us directly at 1-800-222-8222. We are available 24 hours a day, 7 days a week.

Sincerely,

Karla M. Rabusch

President

Wells Fargo Advantage Funds

Performance Highlights (Unaudited) Wells Fargo Advantage VT Total Return Bond Fund 5

INVESTMENT OBJECTIVE

The Fund seeks total return, consisting of income and capital appreciation.

ADVISER

Wells Fargo Funds Management, LLC

SUB-ADVISER

Wells Capital Management Incorporated

PORTFOLIO MANAGERS

Troy Ludgood

Thomas O’Connor, CFA

FUND INCEPTION

September 20, 1999

12 MONTH TOTAL RETURN AS OF DECEMBER 31, 2011
Class 2	8.31%
Barclays Capital U.S. Aggregate Bond Index1	7.84%

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

The Adviser has committed through July 18, 2013 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain other expenses at 0.90% for Class 2. The Fund’s gross and net expense ratios are 0.90% and 0.90%, respectively, for Class 2 shares. Without these reductions, the Fund’s returns would have been lower.

1. The Barclays Capital U.S. Aggregate Bond Index is composed of the Barclays Capital Government/Credit Index and the Mortgage-Backed Securities Index and includes U.S. Treasury issues, agency issues, corporate bond issues, and mortgage-backed securities. You cannot invest directly in an index.

2. The chart compares the performance of the Wells Fargo Advantage VT Total Return Bond Fund Class 2 for the most recent ten years of the Fund with the Barclays Capital U.S. Aggregate Bond Index. The chart assumes a hypothetical $10,000 investment and reflects all operating expenses of the Fund. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

6 Wells Fargo Advantage VT Total Return Bond Fund Performance Highlights (Unaudited)

MANAGER’S DISCUSSION

Fund highlights

n The Fund outperformed its benchmark during the 12-month period that ended December 31, 2011, mainly due to specific security selections in agency mortgages, corporate bonds, commercial mortgage-backed securities (CMBS), and asset-backed securities (ABS).

n Our broad overweight in the ABS sector contributed to excess performance during the period.

n Our overweight in the corporate debt sector detracted from performance.

European credit woes and several geopolitical events roiled the bond markets.

The past year held more than its fair share of challenges. A series of shocks tested the resiliency of the markets, including the earthquake, tsunami, and nuclear crisis in Japan; the geopolitical turmoil in North Africa and the Middle East; and the U.S. debt-ceiling debate and subsequent downgrade of the U.S. Treasury’s AAA³ credit rating by Standard & Poor’s. The eurozone debt crisis also dominated market sentiment.

Policymakers, both domestically and abroad, took a variety of steps to bolster investor confidence, improve liquidity, and reinvigorate the economy. European policymakers announced a series of measures aimed at addressing the challenges and helping European banks repair their balance sheets. The U.S. Federal Reserve (Fed) launched “Operation Twist” in an attempt to drive down long-term interest rates. As the year came to a close, fears of a potential double-dip recession in the U.S. and contagion risk from Europe began to subside, while recession remained a concern in Europe.

Given the strong performance of Treasuries, 2011 was a year of attractive total return for the Barclays Capital U.S. Aggregate Bond Index, albeit very low or negative excess return for most fixed-income asset classes. The ABS and CMBS sectors were the star performers, benefiting from light issuance and strong fundamentals, while credit was the greatest underperformer. Financial institutions were the biggest drag on the sector, as concerns about exposure to Europe weighed on investor sentiment.

TEN LARGEST LONG-TERM HOLDINGS4 (AS OF DECEMBER 31, 2011)
U.S. Treasury Note, 0.75%, 12/31/2016	5.19%
U.S. Treasury Note, 1.00%, 10/31/2016	3.35%
U.S. Treasury Note, 1.00%, 08/31/2016	3.29%
FNMA, 6.00%, 09/25/2035	2.77%
GNMA, 3.50%, 08/20/2041	2.74%
FNMA, 6.00%, 03/01/2034	1.96%
FNMA, 3.50%, 03/25/2041	1.89%
U.S. Treasury Note, 0.13%, 12/31/2031	1.89%
FNMA, 3.50%, 12/1/2013	1.77%
U.S. Treasury Note, 2.00%, 11/15/2021	1.59%

We maintained our consumer ABS overweight throughout 2011, ending the year with a 5.5% overweight. We reduced our overweight of top-tier credit card floater ABS, which outperformed, while adding exposure to retail credit cards. We were active in the Federal Family Education Loan Program sector, which provided many good relative-value trading opportunities during the year.

We maintained an agency mortgage risk-adjusted overweight throughout most of 2011, as the sector presented many compelling relative-value opportunities. We held a position in prepay protected premium coupons throughout the year that benefited from very good yield carry and price appreciation. In the first quarter, we started to build a large position in

3. The ratings indicated are from Standard & Poor’s. Credit-quality ratings apply to underlying holdings of the fund and not the fund itself. Standard and Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories.

4. The ten largest long-term holdings are calculated based on the value of the securities divided by total net assets of the Fund. Holdings are subject to change and may have changed since the date specified.

Performance Highlights (Unaudited) Wells Fargo Advantage VT Total Return Bond Fund 7

Government National Mortgage Association 15-year 4.0% pools; by the middle of the fourth quarter, we exited after significant price appreciation. Our risk-adjusted mortgage overweight at year-end was 5.5%.

We reduced exposure to credit during the course of the year, ending with an underweight of 0.5%, down from an overweight of 5.1% in early 2011. Our positioning during the year was dynamic, in response to varying market conditions. We increased exposure to credit in the first quarter as a result of an active new-issue calendar. We decreased several exposures during the second quarter as the credit sector started to look more richly valued. With risks in the market dramatically increasing over the course of the summer, we moved close to neutral by the end of the third quarter, in particular, reducing areas exposed to heightened risk, such as bank/finance and selected international assets.

PORTFOLIO ALLOCATION⁵

(AS OF DECEMBER 31, 2011)

Our outlook is cautious on geopolitical risks but optimistic on relative trading opportunities.

We expect markets to remain prone to shocks during the first half of 2012 as participants assess the outlook for the global economy, policy execution risk, and market liquidity. With some ongoing uncertainty in the risk/reward profile, we are positioned with a somewhat conservative investment stance.

The U.S. economy outperformed initial expectations in the fourth quarter, setting up some momentum heading into 2012. Improvements in home and auto sales from low activity levels appear to be mitigating spillover effects from the financial markets.

In Europe, policymakers must navigate execution risk around implementation of fiscal control mechanisms, recessionary risk, and political willpower. In the near term, the European Central Bank’s long-term refinancing operation and the Fed’s dollar swap lines appear to be relieving systemic risk pressures. Completion of bank recapitalizations in Europe and the outcome of the Fed’s stress tests are the next milestones to watch.

Entering 2012, we maintain an overweight to agency mortgages and modest overweights to ABS and CMBS. With the Fed’s declaration that interest rates will be on hold through at least mid-2013, we think these asset classes will benefit from favorable breakevens versus Treasuries, limited net supply, and lower curve volatility. In mortgages, we are closely monitoring the risk of an increase in prepayment speeds. In credit, we expect new-issue supply to provide increased relative-value trading opportunities. We continue to be focused on security selection as the primary driver of performance.

5. Portfolio allocation is subject to change and is calculated based on the total long-term investments of the Fund.

8 Wells Fargo Advantage VT Total Return Bond Fund Performance Highlights (Unaudited)

AVERAGE ANNUAL TOTAL RETURN (%) (AS OF DECEMBER 31, 2011)

											Expense Ratios6
	Inception Date		6 Months*		1 Year		5 Year		10 Year		Gross		Net7
Class 2		09/20/1999		4.89		8.31		7.14		6.18		0.90%		0.90%
Barclays Capital U.S. Aggregate Bond Index				4.98		7.84		6.50		5.78

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

Figures quoted represent past performance, which is no guarantee of future results and do not reflect the deduction of taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available by calling 1-866-765-0778. Performance figures of the Fund do not reflect fees charged pursuant to the terms of variable life insurance policies and variable annuity contracts.

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.

Bond fund values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. In general, when interest rates rise, bond fund values fall and investors may lose principal value. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to foreign investment risk and mortgage- and asset-backed securities risk. Consult the Fund’s prospectus for additional information on these and other risks.

Please refer to the prospectus provided by your participating insurance company for detailed information describing the separate accounts for information regarding surrender charges, mortality and expense risk fees and other charges that may be assessed by the participating insurance companies.

6. Reflects the expense ratios as stated in the most recent prospectus.

7. The Adviser has committed through July 18, 2013 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s Total Annual Fund Operating Expenses After Fee Waiver, excluding certain expenses, at 0.90% for Class 2. Without this cap, the Fund’s returns would have been lower.

Fund Expenses (Unaudited) Wells Fargo Advantage VT Total Return Bond Fund 9

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution (12b-1) 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, 2011 to December 31, 2011.

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 separate account charges assessed by participating insurance companies. 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 separate account charges assessed by participating insurance companies were included, your costs would have been higher.

	Beginning Account Value 07-01-2011		Ending Account Value 12-31-2011		Expenses Paid During the Period¹		Net Annual Expense Ratio
Class 2
Actual	$	1,000.00	$	1,048.92	$	4.65		0.90	%
Hypothetical (5% return before expenses)	$	1,000.00	$	1,020.67	$	4.58		0.90	%

1. Expenses paid is equal to the annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year (to reflect the one-half year period).

10 Wells Fargo Advantage VT Total Return Bond Fund Portfolio of Investments—December 31, 2011

Security Name	Interest Rate			Maturity Date		Principal		Value
Agency Securities: 49.37%
FHLMC±		2.40	%		12/01/2041	$	202,000	$	208,367
FHLMC%%		3.00			12/15/2025		700,000		720,344
FHLMC%%		3.50			06/15/2025		1,200,000		1,248,750
FHLMC		4.00			12/01/2034		94,416		99,715
FHLMC		4.00			12/01/2035		110,210		116,291
FHLMC		4.00			02/15/2039		45,844		47,857
FHLMC		4.00			02/15/2040		246,638		257,298
FHLMC%%		4.00			02/15/2040		900,000		941,344
FHLMC		4.50			11/15/2038		111,405		117,156
FHLMC		4.50			08/01/2041		118,076		126,321
FHLMC		4.50			08/01/2041		124,261		133,086
FHLMC		4.50			08/01/2041		190,985		204,319
FHLMC		4.50			08/01/2041		170,395		182,496
FHLMC		4.50			09/01/2041		153,560		162,776
FHLMC		4.50			10/01/2041		255,015		270,319
FHLMC		5.00			03/01/2041		44,487		48,840
FHLMC		5.00			03/01/2041		28,638		31,378
FHLMC		5.00			03/01/2041		24,672		27,085
FHLMC		5.00			03/01/2041		25,894		28,371
FHLMC		5.00			04/01/2041		164,991		181,106
FHLMC		5.00			04/01/2041		90,093		98,909
FHLMC		5.00			04/01/2041		53,461		58,573
FHLMC		5.00			04/01/2041		24,758		27,127
FHLMC		5.00			05/01/2041		141,618		155,474
FHLMC		5.00			05/01/2041		31,707		34,741
FHLMC		5.00			05/01/2041		83,636		91,628
FHLMC		5.00			06/01/2041		97,416		106,738
FHLMC		5.00			06/01/2041		104,487		114,714
FHLMC		5.00			07/01/2041		67,604		74,220
FHLMC		5.00			07/01/2041		44,568		48,784
FHLMC		5.00			07/01/2041		44,704		48,980
FHLMC		5.00			07/01/2041		215,608		236,029
FHLMC		5.00			08/01/2041		87,880		96,476
FHLMC		5.50			10/01/2039		38,959		42,960
FHLMC±		5.59			10/01/2038		32,673		35,368
FHLMC±		5.60			08/01/2039		128,850		139,183
FHLMC±		5.68			03/01/2036		36,094		39,074
FHLMC±		5.69			03/01/2036		22,849		24,724
FHLMC±		5.81			11/01/2036		166,844		180,471
FHLMC±		5.83			11/01/2037		1,467		1,583
FHLMC±		5.92			03/01/2037		9,895		10,698
FHLMC±		5.93			06/01/2036		60,715		65,727
FHLMC±		5.97			01/01/2037		4,857		5,243
FHLMC±		5.98			06/01/2038		105,979		114,442
FHLMC		6.00			03/01/2034		40,279		44,868
FHLMC		6.00			02/01/2035		36,465		40,620
FHLMC		6.00			12/01/2035		577,908		643,755
FHLMC		6.00			08/01/2037		57,641		64,209
FHLMC		6.00			08/01/2038		52,137		58,077
FHLMC		6.00			10/01/2038		79,848		88,946
FHLMC±		6.15			06/01/2037		148,339		161,240

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Total Return Bond Fund 11

Security Name	Interest Rate			Maturity Date		Principal		Value
Agency Securities (continued)
FHLMC Series 2980 Class QA		6.00	%		05/15/2035	$	610,469	$	682,753
FHLMC Series 3529 Class AG		6.50			04/15/2039		388,265		431,650
FHLMC Series 3622 Class WA		5.50			09/15/2039		214,460		232,722
FHLMC Series K003 Class AAVB		4.77			05/25/2018		166,000		186,371
FHLMC Series K005 Class A2		4.32			11/25/2019		126,000		139,892
FHLMC Series T-48 Class 1A3 Preassign 00764±		6.31			07/25/2033		3,048		3,435
FHLMC Series T-57 Class 1A3 Preassign 00073		7.50			07/25/2043		34,534		39,713
FHLMC Series T-59 Class 1A3 Preassign 00329		7.50			10/25/2043		46,251		52,788
FHLMC Series T-60 Class 1A3 Preassign 00462		7.50			03/25/2044		48,375		54,345
FNMA(z)		3.39			10/09/2019		225,000		172,928
FNMA		3.50			12/01/2031		1,479,331		1,537,997
FNMA		3.50			01/01/2032		461,000		479,282
FNMA%%		3.50			02/25/2041		200,000		205,125
FNMA%%		3.50			03/25/2041		1,600,000		1,645,500
FNMA		4.00			10/01/2033		27,425		28,994
FNMA		4.00			10/01/2033		283,170		299,371
FNMA		4.00			01/01/2035		49,605		52,443
FNMA		4.00			05/01/2037		289,877		306,190
FNMA%%		4.00			03/25/2040		400,000		420,188
FNMA		4.50			07/01/2041		135,441		144,242
FNMA		4.50			08/01/2041		217,785		234,284
FNMA		4.50			08/01/2041		191,228		205,715
FNMA		4.50			08/01/2041		41,118		44,091
FNMA		4.50			08/01/2041		45,662		48,891
FNMA		4.50			08/01/2041		30,796		33,022
FNMA		4.50			08/01/2041		117,214		124,830
FNMA		4.50			10/01/2041		48,864		52,039
FNMA%%		5.00			10/25/2036		300,000		323,437
FNMA		5.00			03/01/2041		24,737		27,300
FNMA		5.00			05/01/2041		113,858		125,299
FNMA		5.00			05/01/2041		110,008		121,397
FNMA		5.00			06/01/2041		97,225		107,300
FNMA		5.00			06/01/2041		129,381		142,383
FNMA		5.00			06/01/2041		87,733		96,633
FNMA		5.00			06/01/2041		66,470		73,212
FNMA		5.00			07/01/2041		24,840		27,359
FNMA		5.00			07/01/2041		1,141,469		1,261,899
FNMA		5.00			08/01/2041		110,254		121,679
FNMA		5.00			08/01/2041		66,512		73,191
FNMA		5.00			08/01/2041		66,564		73,317
FNMA		5.00			08/01/2041		236,754		261,290
FNMA		5.00			08/01/2041		65,237		72,120
FNMA		5.00			09/01/2041		176,823		194,595
FNMA		5.00			09/01/2041		156,111		171,949
FNMA		5.00			09/01/2041		77,661		84,107
FNMA±		5.49			01/01/2036		128,858		138,012
FNMA		5.50			09/01/2034		58,360		63,643
FNMA		5.50			12/01/2035		123,385		136,538
FNMA		5.50			01/01/2038		263,380		291,456
FNMA		5.50			07/01/2039		53,005		59,036
FNMA		5.50			12/15/2039		620,279		672,036

12 Wells Fargo Advantage VT Total Return Bond Fund Portfolio of Investments—December 31, 2011

Security Name	Interest Rate			Maturity Date		Principal		Value
Agency Securities (continued)
FNMA		5.50	%		05/25/2040	$	437,543	$	479,064
FNMA		5.50			08/01/2040		128,858		142,594
FNMA±		5.50			02/01/2039		61,909		66,891
FNMA±		5.74			10/01/2037		21,632		23,413
FNMA±		5.84			09/01/2037		64,034		69,382
FNMA±		5.87			02/01/2037		36,628		39,594
FNMA±		5.88			01/01/2037		36,073		38,953
FNMA±		5.89			07/01/2037		44,456		48,101
FNMA±		5.92			04/01/2037		50,215		54,298
FNMA±		5.93			01/01/2037		66,585		71,913
FNMA±		5.93			03/01/2037		39,394		42,548
FNMA±		5.95			09/01/2037		22,069		24,159
FNMA		6.00			03/01/2034		1,529,410		1,705,443
FNMA		6.00			03/01/2034		1,138,586		1,269,173
FNMA		6.00			08/01/2034		100,337		111,503
FNMA		6.00			08/01/2034		48,167		53,693
FNMA		6.00			11/01/2034		76,217		84,698
FNMA		6.00			12/01/2034		307,942		343,270
FNMA		6.00			04/01/2035		23,433		26,121
FNMA		6.00			04/01/2035		478,888		533,827
FNMA		6.00			04/01/2035		235,861		262,109
FNMA%%		6.00			07/25/2035		100,000		110,109
FNMA%%		6.00			08/25/2035		300,000		329,625
FNMA%%		6.00			09/25/2035		2,200,000		2,412,438
FNMA		6.00			12/01/2035		188,284		209,884
FNMA		6.00			08/01/2036		474,619		524,916
FNMA		6.00			08/01/2036		255,920		284,401
FNMA		6.00			10/01/2036		238,739		263,368
FNMA		6.00			03/01/2037		103,262		114,223
FNMA		6.00			07/01/2037		471,594		525,787
FNMA		6.00			01/01/2038		47,095		51,894
FNMA		6.00			10/01/2038		241,973		266,708
FNMA		6.00			10/01/2039		481,282		534,416
FNMA		6.00			12/01/2040		73,657		82,108
FNMA±		6.01			12/01/2036		31,602		34,163
FNMA±		6.03			09/01/2037		12,198		13,229
FNMA±		6.04			03/01/2012		168,769		171,057
FNMA±		6.04			07/01/2037		23,831		25,849
FNMA±		6.07			10/01/2037		75,942		82,432
FNMA±		6.09			11/01/2037		27,331		29,719
FNMA±		6.27			09/01/2037		206,571		226,677
FNMA±		6.32			10/01/2036		19,675		21,401
FNMA(a)		7.00			02/25/2042		240,000		273,286
FNMA Series 2002-33 Class A2		7.50			06/25/2032		35,190		39,521
FNMA Series 2003-W17 Class 1A7		5.75			08/25/2033		85,000		97,422
FNMA Series 2005-5 Class PA		5.00			01/25/2035		66,179		72,286
FNMA Series 2006-56 Class CA		6.00			07/25/2036		33,010		37,750
FNMA Series 2009-105 Class CB		6.00			12/25/2039		275,502		307,140
FNMA Series 2009-11 Class LC		4.50			03/25/2049		170,842		180,699
FNMA Series 2009-30 Class AD		6.50			04/25/2039		252,179		275,409
FNMA Series 2009-30 Class AG		6.50			05/25/2039		462,797		515,957
FNMA Series 2009-66 Class KE		4.00			09/25/2039		222,295		232,047

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Total Return Bond Fund 13

Security Name	Interest Rate			Maturity Date		Principal		Value
Agency Securities (continued)
FNMA Series 2009-78 Class J		5.00	%		09/25/2019	$	232,178	$	251,985
FNMA Series 2009-93 Class PD		4.50			09/25/2039		94,677		100,783
FNMA Series 2009-M01 Class A2		4.29			07/25/2019		135,000		151,674
FNMA Series 2009-M02 Class A3		4.00			01/25/2019		244,000		268,809
FNMA Series 2010-054 Class EA		4.50			06/25/2040		338,164		360,343
FNMA Series 2010-M01 Class A2		4.45			09/25/2019		100,000		113,386
FNMA Series 2010-M03 Class A3±		4.33			03/25/2020		499,000		562,133
FNMA Series 2011 Class 53		4.50			06/25/2041		227,063		239,334
FNMA Series 2011-53		4.00			06/25/2041		580,328		606,493
FNMA Series 2011-78 Class D		4.00			08/25/2041		54,798		57,234
GNMA		3.50			02/20/2041		58,316		59,929
GNMA		3.50			02/20/2041		26,855		27,597
GNMA		3.50			02/20/2041		38,926		40,003
GNMA		3.50			03/20/2041		75,687		77,780
GNMA±		3.50			05/20/2041		156,113		164,868
GNMA±		3.50			05/20/2041		69,211		73,057
GNMA±		3.50			06/20/2041		222,929		235,319
GNMA%%		3.50			07/20/2041		1,000,000		1,040,781
GNMA%%		3.50			08/20/2041		2,300,000		2,386,609
GNMA±		3.50			10/20/2041		63,777		67,146
GNMA		6.00			01/15/2040		530,258		601,133
GNMA II±		3.00			07/20/2041		118,313		123,069
GNMA II±		3.00			07/20/2041		43,630		45,406
GNMA II±		3.00			08/20/2041		67,552		70,267
GNMA II±		3.00			08/20/2041		96,247		100,165
GNMA II±		3.00			10/20/2041		74,761		77,501
GNMA II±		3.00			11/20/2041		48,916		50,685
GNMA II±		3.50			07/20/2041		200,696		211,825
GNMA II±		3.50			07/20/2041		95,511		100,784
GNMA II±		3.50			08/20/2041		65,108		68,718
GNMA Series 2002-95 Class DB		6.00			01/25/2033		140,000		159,821
Total Agency Securities (Cost $42,259,089)									43,016,094
Asset-Backed Securities: 8.25%
Ally Auto Receivables Trust Series 2011-4 Class A4		1.14			06/15/2016		106,000		105,662
Ally Master Owner Trust Series 2011-4 Class A2		1.54			09/15/2016		117,000		116,621
Capital One Multi-Asset Execution Trust Series 2004-A4 Class A4±		0.50			03/15/2017		50,000		49,859
Capital One Multi-Asset Execution Trust Series 2005-A10 Class A±		0.36			09/15/2015		101,000		100,858
Chase Issuance Trust Series 2005-A11 Class A±		0.35			12/15/2014		279,000		278,930
Chase Issuance Trust Series 2005-A6 Class A6±		0.35			07/15/2014		71,000		70,988
Citibank Omni Master Trust Series 2009-A14 Class A14±144A		3.03			08/15/2018		509,000		533,944
Citibank Omni Master Trust Series 2009-A8 Class A8±144A		2.38			05/16/2016		332,000		334,039
Developers Diversified Realty Corporation Trust Series 2009-DDR1 Class A144A		3.81			10/14/2022		261,769		272,665
Discover Card Master Trust Series 2009-A1 Class A1±		1.58			12/15/2014		100,000		100,591
Ford Credit Auto Owner Trust Series 2009-D Class A3		2.17			10/15/2013		82,211		82,631
GE Capital Credit Card Master Note Trust Series 2009-2 Class A		3.69			07/15/2015		349,000		354,502
Goal Capital Funding Trust Series 2006-1 Class A3±		0.63			11/25/2026		334,000		315,264
Harley Davidson Motorcycle Trust Series 2011-2 Class A4		1.47			08/15/2017		131,000		130,675
Honda Auto Receivables Owner Trust Series 2010-3 Class A2		0.53			01/21/2013		146,041		146,019
Hyundai Auto Receivables Trust Series 2011-C Class A4		1.30			02/15/2018		93,000		92,907
MMCA Automobile Trust Series 2011-A Class A4144A		2.02			10/17/2016		116,000		117,479

14 Wells Fargo Advantage VT Total Return Bond Fund Portfolio of Investments—December 31, 2011

Security Name	Interest Rate			Maturity Date		Principal		Value
Asset-Backed Securities (continued)
Nelnet Student Loan Trust Series 2005-2 Class A5±		0.67	%		03/23/2037	$	196,000	$	176,007
Nelnet Student Loan Trust Series 2006-1 Class A4±		0.59			11/23/2022		142,000		140,003
Nelnet Student Loan Trust Series 2006-2 Class A4±		0.50			10/26/2026		293,000		286,639
Nelnet Student Loan Trust Series 2007-1 Class A3±		0.58			05/27/2025		253,000		227,046
Nelnet Student Loan Trust Series 2008-3 Class A4±		2.16			11/25/2024		293,000		299,736
SLM Student Loan Trust Series 2000-A Class A2±		0.61			10/28/2028		122,551		122,138
SLM Student Loan Trust Series 2003-14 Class A5±		0.65			01/25/2023		340,000		331,178
SLM Student Loan Trust Series 2004-1 Class A3±		0.63			04/25/2023		364,000		351,986
SLM Student Loan Trust Series 2004-3 Class A5±		0.59			07/25/2023		93,000		90,284
SLM Student Loan Trust Series 2005-6 Class A±		0.53			07/27/2026		421,000		405,604
SLM Student Loan Trust Series 2005-8 Class A3±		0.53			10/25/2024		210,000		203,331
SLM Student Loan Trust Series 2006-10 Class A4±		0.49			07/25/2023		173,000		170,399
SLM Student Loan Trust Series 2008-4 Class A2±		1.47			07/25/2016		98,258		99,170
SLM Student Loan Trust Series 2008-9 Class A±		1.92			04/25/2023		153,108		156,633
SLM Student Loan Trust Series 2011-C Class A1±144A		1.66			12/15/2023		386,000		386,064
USAA Auto Owner Trust Series 2008-3 Class A4		4.71			02/18/2014		161,049		162,085
Volkswagen Auto Loan Enhanced Trust Series 2008-1 Class A4±		1.98			10/20/2014		157,175		157,511
World Financial Network Credit Card Master Trust Series 2011-A Class A		1.68			08/15/2018		122,000		121,636
World Omni Auto Receivables Trust Series 2008-A Class A4		4.74			10/15/2013		98,865		100,130
Total Asset-Backed Securities (Cost $7,198,882)									7,191,214
Corporate Bonds and Notes: 12.20%
Consumer Discretionary: 1.15%
Automobiles: 0.28%
Daimler Finance North America LLC144A		1.88			09/15/2014		245,000		243,705
Media: 0.69%
Comcast Corporation		8.38			03/15/2013		158,000		171,843
NBC Universal Incorporated		2.88			04/01/2016		147,000		149,898
NBC Universal Incorporated		4.38			04/01/2021		75,000		79,121
News America Incorporated		6.15			03/01/2037		55,000		60,018
News America Incorporated		6.15			02/15/2041		18,000		20,708
Time Warner Cable Incorporated		5.50			09/01/2041		115,000		120,952
									602,540
Specialty Retail: 0.18%
Gap Incorporated		5.95			04/12/2021		160,000		152,555
Consumer Staples : 0.65%
Beverages: 0.36%
PepsiCo Incorporated		2.50			05/10/2016		135,000		140,472
The Coca-Cola Company		1.80			09/01/2016		170,000		172,954
									313,426
Food & Staples Retailing: 0.10%
Wal-Mart Stores Incorporated		5.63			04/15/2041		70,000		90,279
Food Products: 0.10%
Kraft Foods Incorporated Class A		6.50			02/09/2040		65,000		84,400

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Total Return Bond Fund 15

Security Name	Interest Rate			Maturity Date		Principal		Value
Tobacco: 0.09%
Altria Group Incorporated		10.20	%		02/06/2039	$	50,000	$	77,684
Energy: 1.30%
Oil, Gas & Consumable Fuels: 1.30%
El Paso Pipeline Partners Operating LLC		5.00			10/01/2021		50,000		51,441
El Paso Pipeline Partners Operating LLC		7.50			11/15/2040		55,000		63,910
Energen Corporation		4.63			09/01/2021		160,000		158,721
Energy Transfer Partners LP		9.00			04/15/2019		75,000		89,186
Kerr-McGee Corporation		6.95			07/01/2024		190,000		226,502
Marathon Petroleum Corporation		5.13			03/01/2021		23,000		24,019
Marathon Petroleum Corporation		6.50			03/01/2041		23,000		26,017
MidAmerican Energy Holdings Company		6.50			09/15/2037		65,000		81,469
Pride International Incorporated		6.88			08/15/2020		95,000		111,344
The Williams Companies Incorporated		7.88			09/01/2021		30,000		36,909
The Williams Companies Incorporated Series A		7.50			01/15/2031		46,000		55,984
Western Gas Partners LP		5.38			06/01/2021		195,000		206,733
									1,132,235
Financials: 5.23%
Capital Markets: 1.06%
Goldman Sachs Group Incorporated		3.63			02/07/2016		75,000		72,480
Goldman Sachs Group Incorporated		5.25			07/27/2021		30,000		29,255
Goldman Sachs Group Incorporated		6.00			06/15/2020		110,000		112,643
Goldman Sachs Group Incorporated		6.25			02/01/2041		60,000		58,761
Lazard Group LLC		6.85			06/15/2017		215,000		225,580
Lazard Group LLC		7.13			05/15/2015		150,000		161,092
Morgan Stanley		3.80			04/29/2016		200,000		184,299
Morgan Stanley		5.50			07/28/2021		90,000		83,187
									927,297
Commercial Banks: 0.17%
Inter-American Development Bank Series EMTN		3.88			10/28/2041		135,000		143,327
Consumer Finance: 0.33%
American Express Credit Corporation		2.80			09/19/2016		230,000		231,178
Capital One Financial Corporation		4.75			07/15/2021		55,000		56,580
									287,758
Diversified Financial Services: 2.24%
ABB Treasury Center USA Incorporated 144A		2.50			06/15/2016		95,000		95,545
Bank of America Corporation		3.75			07/12/2016		190,000		175,960
Bank of America Corporation		5.00			05/13/2021		130,000		118,366
Bank of America Corporation		6.00			09/01/2017		120,000		117,223
Citigroup Incorporated«		1.88			10/22/2012		370,000		375,103
Citigroup Incorporated		3.95			06/15/2016		163,000		162,471
Citigroup Incorporated		4.50			01/14/2022		122,000		117,320
Citigroup Incorporated		5.38			08/09/2020		45,000		46,256
General Electric Capital Corporation		4.65			10/17/2021		185,000		193,003
General Electric Capital Corporation		6.88			01/10/2039		145,000		173,412
JPMorgan Chase & Company		4.35			08/15/2021		210,000		211,998

16 Wells Fargo Advantage VT Total Return Bond Fund Portfolio of Investments—December 31, 2011

Security Name	Interest Rate			Maturity Date		Principal		Value
Diversified Financial Services (continued)
JPMorgan Chase & Company		5.40	%		01/06/2042	$	95,000	$	98,946
JPMorgan Chase & Company		5.60			07/15/2041		65,000		67,923
									1,953,526
Insurance: 0.70%
American International Group Incorporated		4.88			09/15/2016		50,000		47,325
American International Group Incorporated Series MTN		5.85			01/16/2018		65,000		63,555
Berkshire Hathaway Incorporated		3.75			08/15/2021		164,000		170,335
CNA Financial Corporation		5.75			08/15/2021		85,000		86,704
CNA Financial Corporation		6.50			08/15/2016		50,000		54,094
MetLife Incorporated		5.70			06/15/2035		45,000		50,139
Protective Life Corporation		8.45			10/15/2039		43,000		49,199
Prudential Financial Incorporated		5.63			05/12/2041		30,000		29,440
Prudential Financial Incorporated Series MTN		4.50			11/16/2021		35,000		35,338
WR Berkley Corporation		5.38			09/15/2020		25,000		25,217
									611,346
REIT: 0.73%
Boston Properties LP		3.70			11/15/2018		80,000		81,662
ERP Operation Limited Partnership		4.63			12/15/2021		70,000		71,355
HCP Incorporated		6.75			02/01/2041		23,000		25,956
Health Care Property Investors Incorporated		5.65			12/15/2013		150,000		157,773
Health Care REIT Incorporated		6.50			03/15/2041		30,000		30,008
Kilroy Realty LP		4.80			07/15/2018		110,000		108,616
Kilroy Realty LP		5.00			11/03/2015		40,000		41,143
Kilroy Realty LP		6.63			06/01/2020		30,000		32,187
SL Green Realty Corporation		5.00			08/15/2018		30,000		28,969
WEA Finance LLC 144A		4.63			05/10/2021		55,000		53,962
									631,631
Health Care: 0.97%
Biotechnology: 0.42%
Amgen Incorporated		3.88			11/15/2021		90,000		90,783
Amgen Incorporated		5.15			11/15/2041		25,000		25,865
Gilead Sciences Incorporated		4.50			04/01/2021		145,000		153,676
Gilead Sciences Incorporated		5.65			12/01/2041		90,000		99,451
									369,775
Health Care Equipment & Supplies: 0.15%
Boston Scientific Corporation		6.40			06/15/2016		115,000		128,959
Health Care Providers & Services: 0.23%
Coventry Health Care Incorporated		5.95			03/15/2017		175,000		196,502
Life Sciences Tools & Services: 0.17%
Life Technologies Corporation		5.00			01/15/2021		145,000		151,666
Industrials: 0.14%
Professional Services: 0.08%
Verisk Analytics Incorporated		5.80			05/01/2021		65,000		69,947

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Total Return Bond Fund 17

Security Name	Interest Rate			Maturity Date		Principal		Value
Road & Rail: 0.06%
BSNF Railway Company		5.75	%		05/01/2040	$	46,000	$	54,927
Information Technology: 0.23%
Computers & Peripherals: 0.12%
Hewlett Packard Company		3.00			09/15/2016		58,000		58,422
Hewlett Packard Company		4.38			09/15/2021		45,000		46,424
									104,846
Software: 0.11%
Adobe Systems Incorporated		4.75			02/01/2020		91,000		98,752
Materials: 0.13%
Chemicals: 0.13%
Dow Chemical Company		5.25			11/15/2041		70,000		73,485
Dow Chemical Company		8.55			05/15/2019		29,000		37,931
									111,416
Telecommunication Services: 0.92%
Diversified Telecommunication Services: 0.58%
AT&T Incorporated		5.55			08/15/2041		55,000		64,626
AT&T Incorporated		6.40			05/15/2038		45,000		55,491
CenturyLink Incorporated		6.45			06/15/2021		75,000		75,112
Citizens Communications Company		9.00			08/15/2031		33,000		30,113
Frontier Communications Corporation		8.25			04/15/2017		105,000		107,363
Verizon Communications Incorporated		2.00			11/01/2016		90,000		90,276
Verizon Communications Incorporated		3.50			11/01/2021		80,000		83,255
									506,236
Wireless Telecommunication Services: 0.34%
American Tower Corporation		4.50			01/15/2018		145,000		147,464
American Tower Corporation		5.05			09/01/2020		38,000		38,056
Verizon Wireless Capital LLC		8.50			11/15/2018		80,000		107,946
									293,466
Utilities: 1.48%
Electric Utilities: 0.81%
Ameren Corporation		8.88			05/15/2014		105,000		117,672
Cleveland Electric Illuminating Company		8.88			11/15/2018		110,000		147,560
Great Plains Energy Incorporated		4.85			06/01/2021		20,000		20,957
LG&E & KU Energy LLC144A		4.38			10/01/2021		80,000		81,567
Oncor Electric Delivery Company LLC 144A		4.55			12/01/2041		70,000		71,416
PPL Electric Utilities		3.00			09/15/2021		75,000		75,767
PPL Energy Supply LLC		4.60			12/15/2021		80,000		81,096
Progress Energy Incorporated		6.85			04/15/2012		85,000		86,441
Public Service Company of Colorado		4.75			08/15/2041		18,000		20,579
									703,055

18 Wells Fargo Advantage VT Total Return Bond Fund Portfolio of Investments—December 31, 2011

Security Name	Interest Rate			Maturity Date		Principal		Value
Multi-Utilities: 0.67%
CMS Energy Corporation		2.75	%		05/15/2014	$	65,000	$	64,201
CMS Energy Corporation		5.05			02/15/2018		105,000		104,738
Dominion Resources Incorporated		4.90			08/01/2041		35,000		37,714
Dominion Resources Incorporated		8.88			01/15/2019		210,000		278,602
MidAmerican Energy Holdings		6.13			04/01/2036		30,000		35,767
Puget Sound Power & Light Company		4.43			11/15/2041		65,000		67,268
									588,290
Total Corporate Bonds and Notes (Cost $10,321,457)									10,629,546
Municipal Bonds and Notes: 1.05%
California: 0.36%
California Build America Bonds (Tax Revenue)		7.60			11/01/2040		100,000		123,576
Los Angeles CA Community College District Build America Bonds (Tax Revenue)		6.75			08/01/2049		90,000		117,779
Los Angeles CA DW&P Build America Bonds (Utilities Revenue)		6.57			07/01/2045		55,000		73,517
									314,872
Illinois: 0.19%
Illinois (GO–State)		5.37			03/01/2017		55,000		59,002
Illinois (GO–State)		5.67			03/01/2018		50,000		53,552
Illinois (GO–State)		5.88			03/01/2019		45,000		48,416
									160,970
Nevada: 0.13%
Clark County NV Airport Authority (Airport Revenue)		6.82			07/01/2045		90,000		114,389
New Jersey: 0.18%
New Jersey State Turnpike Authority (Transportation Revenue)		7.10			01/01/2041		115,000		158,008
Ohio: 0.04%
Ohio State University Series A (Education Revenue)		4.80			06/01/2111		35,000		36,504
Texas: 0.15%
North Texas Tollway Authority (Transportation Revenue)		6.72			01/01/2049		103,000		127,767
Total Municipal Bonds and Notes (Cost $760,620)									912,510
Non-Agency Mortgage Backed Securities: 8.20%
Americold LLC Trust Series 2010-ART Class A1 144A		3.85			01/14/2029		179,939		186,434
Bank of America Commercial Mortgage Incorporated Series 2002-PB2 Class B		6.31			06/11/2035		100,000		100,358
Bank of America Commercial Mortgage Incorporated Series 2004-6 Class A3		4.51			12/10/2042		23,706		24,080
Bank of America Commercial Mortgage Incorporated Series 2006-2 Class A4±		5.73			05/10/2045		222,000		248,553
Bank of America Commercial Mortgage Incorporated Series 2006-5 Class A4		5.41			09/10/2047		89,000		96,190
Bank of America Commercial Mortgage Incorporated Series 2006-6 Class A4		5.36			10/10/2045		187,000		201,110
Bank of America Commercial Mortgage Incorporated Series 2007-1 Class A2		5.38			01/15/2049		35,886		35,840
Bear Stearns Commercial Mortgage Securities Incorporated Series 2003-T12 Class A3±		4.24			08/13/2039		15,209		15,310
Bear Stearns Commercial Mortgage Securities Incorporated Series 2004-T14 Class A4±		5.20			01/12/2041		213,000		226,313
Bear Stearns Commercial Mortgage Securities Incorporated Series 2005-PWR7 Class A		4.95			02/11/2041		29,116		29,113
CFCRE Commercial Mortgage Trust Series 2011-C2 Class A2		3.06			12/15/2047		100,000		102,114

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Total Return Bond Fund 19

Security Name	Interest Rate			Maturity Date		Principal		Value
Non-Agency Mortgage Backed Securities (continued)
CFCRE Commercial Mortgage Trust Series-2011 C2 Class A4		3.83	%		12/15/2047	$	86,000	$	89,177
Citigroup Mortgage Loan Trust Incorporated Series 2007-AHL1 Class A2A±		0.33			12/25/2036		10,948		10,636
Citigroup/Deutsche Bank Commercial Mortgage Series 2005-CD1 Class AM±		5.23			07/15/2044		97,000		101,744
Commercial Mortgage Pass-Through Certificate Series 2001-J2 Class B 144A		6.30			07/16/2034		151,000		151,421
Commercial Mortgage Pass-Through Certificate Series 2004-B4 Class A5		4.84			10/15/2037		160,000		168,229
Commercial Mortgage Pass-Through Certificate Series 2007-C9 Class A4±		5.81			12/10/2049		141,000		157,417
Commercial Mortgage Pass-Through Certificates Series 2005-LP5 Class A4±		4.98			05/10/2043		95,000		103,606
Credit Suisse First Boston Mortgage Securities Corporation Series 2002-CP3 Class A3		5.60			07/15/2035		24,443		24,598
Credit Suisse First Boston Mortgage Securities Corporation Series 2003-C4 Class B±		5.25			08/15/2036		74,000		76,704
Credit Suisse First Boston Mortgage Securities Corporation Series 2005-C1 Class A3		4.81			02/15/2038		67,879		69,987
Credit Suisse First Boston Mortgage Securities Corporation Series 2005-C2 Class A4		4.83			04/15/2037		146,000		153,721
Credit Suisse First Boston Mortgage Securities Corporation Series 2005-C3 Class A		4.73			07/15/2037		70,000		72,349
Credit Suisse First Boston Mortgage Securities Corporation Series 2006-C4 Class A3		5.47			09/15/2039		182,000		193,597
Extended Stay America Trust Series 2010-ESHA Class A 144A		2.95			11/05/2027		376,310		377,076
GE Capital Commercial Mortgage Securities Incorporated Series 2004-C2 Class A4		4.89			03/10/2040		48,000		50,680
GMAC Commercial Mortgage Securities Incorporated Series 2001-C2 Class A2		6.70			04/15/2034		2,093		2,093
GMAC Commercial Mortgage Securities Incorporated Series 2003-C1 Class A2		4.08			05/10/2036		69,000		70,494
GMAC Commercial Mortgage Securities Incorporated Series 2006-C1 Class AM±		5.29			11/10/2045		132,000		131,624
Greenwich Capital Commercial Funding Corporation Series 2005-GG5 Class A5±		5.22			04/10/2037		249,000		266,644
Greenwich Capital Commercial Funding Corporation Series 2007-GG9 Class A4		5.44			03/10/2039		47,000		50,883
GS Mortgage Securities Corporation II Series 2005-GG4 Class A4		4.76			07/10/2039		45,000		47,166
Impact Funding LLC Series 2010-1 Class A1 144A		5.31			01/25/2051		275,977		293,541
JPMorgan Chase Commercial Mortgage Securities Corporation Series 2001-CIBC2 Class D±		6.85			04/15/2035		59,000		58,863
JPMorgan Chase Commercial Mortgage Securities Corporation Series 2002-C2 Class B±		5.21			12/12/2034		30,000		30,342
JPMorgan Chase Commercial Mortgage Securities Corporation Series 2002-C2 Class A2		5.05			12/12/2034		60,793		62,118
JPMorgan Chase Commercial Mortgage Securities Corporation Series 2003-C1 Class A1		4.28			01/12/2037		28,899		29,059
JPMorgan Chase Commercial Mortgage Securities Corporation Series 2003-CB6 Class A1		4.39			07/12/2037		14,614		14,777
JPMorgan Chase Commercial Mortgage Securities Corporation Series 2003-PM1A Class A4±		5.33			08/12/2040		159,000		166,232
JPMorgan Chase Commercial Mortgage Securities Corporation Series 2004-LN2 Class A2		5.12			07/15/2041		186,000		196,672
JPMorgan Chase Commercial Mortgage Securities Corporation Series 2006-LDP9 Class A2		5.13			05/15/2047		40,201		41,471
JPMorgan Chase Commercial Mortgage Securities Corporation Series 2006-LDP9 Class A3		5.34			05/15/2047		331,000		351,101
JPMorgan Chase Commercial Mortgage Securities Corporation Series 2007-LDPX Class A3		5.42			01/15/2049		74,000		80,015
JPMorgan Chase Commercial Mortgage Securities Corporation Series 2010-A2 Class A2 144A		4.31			08/05/2032		189,000		197,364
JPMorgan Chase Commercial Mortgage Securities Corporation Series 2010-C1 Class A1 144A		3.85			06/15/2043		331,323		346,547
JPMorgan Chase Commercial Mortgage Securities Corporation Series 2010-CNTR Class A1 144A		3.30			08/05/2032		90,509		91,744

20 Wells Fargo Advantage VT Total Return Bond Fund Portfolio of Investments—December 31, 2011

Security Name	Interest Rate			Maturity Date		Principal		Value
Non-Agency Mortgage Backed Securities (continued)
JPMorgan Chase Commercial Mortgage Securities Corporation Series 2011-C5 Class A3		4.17	%		08/15/2046	$	58,000	$	62,086
Lehman Brothers UBS Commercial Mortgage Trust Series 2002-C2 Class A4		5.59			06/15/2031		22,780		22,971
Lehman Brothers UBS Commercial Mortgage Trust Series 2002-C4 Class A4		4.56			09/15/2026		14,269		14,357
Lehman Brothers UBS Commercial Mortgage Trust Series 2004-C7 Class A5		4.63			10/15/2029		51,000		52,554
Lehman Brothers UBS Commercial Mortgage Trust Series 2005-C2 Class A4		5.00			04/15/2030		146,000		153,616
Lehman Brothers UBS Commercial Mortgage Trust Series 2007-C1 Class A4		5.42			02/15/2040		71,000		77,379
Lehman Brothers UBS Commercial Mortgage Trust Series 2007-C1 Class AAB		5.40			02/15/2040		39,000		41,110
Lehman Brothers UBS Commercial Mortgage Trust Series 2007-C3 Class A3±		5.93			07/15/2044		53,000		56,572
Lehman Brothers UBS Commercial Mortgage Trust Series 2007-C6 Class A3		5.93			07/15/2040		184,000		194,787
Merrill Lynch Mortgage Trust Series 2005-CIP1 Class A3A±		4.95			07/12/2038		76,000		79,345
Morgan Stanley Capital I Series 2004-TP13 Class A3		4.39			09/13/2045		27,313		27,825
Morgan Stanley Capital I Series 2006-HQ8 Class AM±		5.47			03/12/2044		49,000		50,141
Morgan Stanley Capital I Series 2007-HE2 Class A2A±		0.33			01/25/2037		4,966		4,874
Morgan Stanley Capital I Series 2007-HQ13 Class A1		5.36			12/15/2044		43,921		44,117
Morgan Stanley Capital I Series 2011-C3 Class A2		3.22			07/15/2049		100,000		103,552
Morgan Stanley Dean Witter Capital I Series 2001-TOP3 Class A4		6.39			07/15/2033		6,881		6,876
Morgan Stanley Mortgage Loan Trust Series 2007-6XS Class 2A1S±		0.40			02/25/2047		14,400		11,493
Nomura Asset Securities Corporation Series 1998-D6 Class A2±		7.07			03/15/2030		128,000		134,063
Sequoia Mortgage Trust Series 2010-H1 Class A1±		3.75			02/25/2040		28,345		28,798
Sequoia Mortgage Trust Series 2011-1 Class A1±		4.13			02/25/2041		38,120		37,917
US Bank NA Series 2007-1 Class A		5.92			05/25/2012		232,870		237,775
Wachovia Bank Commercial Mortgage Trust Series 2003-C7 Class A1 144A		4.24			10/15/2035		13,990		14,078
Wachovia Bank Commercial Mortgage Trust Series 2003-C8 Class A3		4.45			11/15/2035		97,161		97,493
Total Non-Agency Mortgage Backed Securities (Cost $7,028,777)									7,148,886
U.S. Treasury Securities: 24.04%
U.S. Treasury Bond		3.13			11/15/2041		845,000		883,025
U.S. Treasury Bond##		3.75			08/15/2041		381,000		447,020
U.S. Treasury Bond##		4.38			05/15/2041		601,000		781,300
U.S. Treasury Bond##		4.50			02/15/2036		655,000		856,413
U.S. Treasury Bond##		4.75			02/15/2041		499,000		686,359
U.S. Treasury Note		0.88			11/30/2016		216,000		216,692
U.S. Treasury Note		0.13			12/31/2013		1,647,000		1,643,139
U.S. Treasury Note		0.25			10/31/2013		501,000		501,137
U.S. Treasury Note		0.25			11/30/2013		219,000		219,051
U.S. Treasury Note		0.25			12/15/2014		327,000		325,978
U.S. Treasury Note		0.75			12/31/2016		4,515,000		4,524,170
U.S. Treasury Note##		1.00			08/31/2016		2,838,000		2,869,485
U.S. Treasury Note		1.00			10/31/2016		2,894,000		2,922,940
U.S. Treasury Note		1.38			11/30/2018		83,000		83,285
U.S. Treasury Note		1.50			06/30/2016		592,000		612,350
U.S. Treasury Note		2.00			11/15/2021		1,374,000		1,389,029
U.S. Treasury Note		2.13			08/15/2021		1,232,000		1,262,992
U.S. Treasury Note		3.25			03/31/2017		400,000		448,000
U.S. Treasury Note		3.50			05/15/2020		242,000		278,300
Total U.S. Treasury Securities (Cost $20,497,956)									20,950,665
Yankee Corporate Bonds and Notes: 5.49%
Consumer Discretionary : 0.10%
Media: 0.10%
Thomson Reuters Corporation		5.95			07/15/2013		80,000		85,249

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Total Return Bond Fund 21

Security Name	Interest Rate			Maturity Date		Principal		Value
Consumer Staples: 0.41%
Beverages: 0.41%
Pernod-Ricard SA 144A		4.45	%		01/15/2022	$	170,000	$	178,018
Pernod-Ricard SA 144A		5.75			04/07/2021		160,000		180,446
									358,464
Energy: 1.32%
Oil, Gas & Consumable Fuels: 1.32%
BG Energy Capital plc 144A		4.00			10/15/2021		220,000		226,677
BP Capital Markets plc		2.25			11/01/2016		185,000		186,222
Husky Energy Incorporated		7.25			12/15/2019		82,000		100,313
International Petroleum Investment Company GMTN Limited 144A		5.50			03/01/2022		200,000		200,000
Petroleos Mexicanos 144A		6.50			06/02/2041		20,000		22,500
Talisman Energy Incorporated		7.75			06/01/2019		90,000		110,943
Transocean Incorporated		5.05			12/15/2016		235,000		240,005
Transocean Incorporated		6.38			12/15/2021		60,000		63,749
									1,150,409
Financials: 2.80%
Commercial Banks: 2.13%
Bank of Montreal 144A		1.30			10/31/2014		250,000		249,606
Bank of Nova Scotia 144A		2.15			08/03/2016		200,000		201,454
Canadian Imperial Bank 144A		1.50			12/12/2014		245,000		245,372
HSBC Holdings plc		5.10			04/05/2021		75,000		79,665
HSBC Holdings plc		6.80			06/01/2038		100,000		103,407
Korea Development Bank		3.25			03/09/2016		199,000		196,062
Korea Development Bank		3.88			05/04/2017		200,000		197,544
Lloyds TSB Bank plc		4.88			01/21/2016		90,000		87,728
Rabobank Nederland NV		5.25			05/24/2041		72,000		70,445
Standard Chartered plc 144A		3.20			05/12/2016		190,000		185,958
Swedish Export Credit Corporation		3.25			09/16/2014		233,000		240,757
									1,857,998
Diversified Financial Services: 0.39%
Caisse Centrale Desjardins du Quebec 144A		2.55			03/24/2016		250,000		256,771
Credit Suisse New York		6.00			02/15/2018		80,000		78,879
									335,650
Thrifts & Mortgage Finance: 0.28%
Achmea Hypotheekbank NV 144A		3.20			11/03/2014		235,000		246,653
Materials: 0.24%
Metals & Mining: 0.24%
Teck Resources Limited		6.25			07/15/2041		52,000		59,958
Xstrata Canada Financial Corporation 144A		4.95			11/15/2021		100,000		102,123
Xstrata Canada Financial Corporation 144A		6.00			11/15/2041		50,000		51,212
									213,293

22 Wells Fargo Advantage VT Total Return Bond Fund Portfolio of Investments—December 31, 2011

Security Name	Interest Rate			Maturity Date		Principal		Value
Telecommunication Services: 0.46%
Diversified Telecommunication Services: 0.35%
Hutchison Whampoa International Limited 144A		5.75	%		09/11/2019	$	100,000	$	111,981
Telemar Norte Leste SAU 144A		5.50			10/23/2020		190,000		187,150
									299,131
Wireless Telecommunication Services: 0.11%
Telefonica Moviles Chile SA 144A		2.88			11/09/2015		100,000		98,712
Utilities: 0.16%
Electric Utilities: 0.13%
PPL WEM Holdings plc 144A		3.90			05/01/2016		115,000		115,300
Multi-Utilities: 0.03%
National Grid plc		6.30			08/01/2016		20,000		22,955
Total Yankee Corporate Bonds and Notes (Cost $4,712,877)									4,783,814
Yankee Government Bonds: 0.57%
Province of Quebec		2.75			08/25/2021		135,000		134,793
Republic of Chile		3.25			09/14/2021		115,000		118,163
Republic of Poland		5.00			03/23/2022		160,000		160,800
United Mexican States		5.75			10/12/2049		80,000		85,200
Total Yankee Government Bonds (Cost $485,579)									498,956
Other: 0.38%
Gryphon Funding Limited, Pass-Through Entity(a)(i)(v)							232,466		65,090
VFNC Corporation, Pass-Through Entity, 0.30%±144A(a)(i)(v)							624,536		268,551
Total Other (Cost $150,056)									333,641
	Yield					Shares
Short-Term Investments: 10.20%
Investment Companies: 10.20%
Wells Fargo Advantage Cash Investment Money Market Fund, Institutional Class##(l)(u)		0.04					8,807,666		8,807,666
Wells Fargo Securities Lending Cash Investments, LLC(v)(l)(u)(r)		0.12					78,744		78,744
Total Short-Term Investments (Cost $8,886,410)									8,886,410

Total Investments in Securities
(Cost $102,301,703)*	119.75	%		104,351,736
Other Assets and Liabilities, Net	(19.75	)		(17,213,958	)
Total Net Assets	100.00	%	$	87,137,778

	Interest Rate			Principal
TBA Sale Commitments: (2.80%)
FNMA%%		3.50	03/25/2041	$	(400,000	)	(411,375	)
FNMA%%		4.00	02/25/2040		(600,000	)	(630,282	)
FNMA%%		4.00	03/25/2040		(100,000	)	(104,781	)
FNMA%%		5.00	10/25/2036		(1,200,000	)	(1,293,750	)
Total TBA Sale Commitments (Proceeds Received $(2,416,137))							(2,440,188	)

Portfolio of Investments—December 31, 2011 Wells Fargo Advantage VT Total Return Bond Fund 23

± Variable rate investment.

%% Security issued on a when-issued (TBA) basis.

(z) Zero coupon security. Rate represents yield to maturity.

144A Security that may be resold to “qualified institutional buyers” under Rule 144A or security offered pursuant to Section 4(2) of the Securities Act of 1933, as amended.

(a) Security is fair valued by the Management Valuation Team, and in certain instances by the Board of Trustees, in accordance with procedures approved by the Board of Trustees.

« All or a portion of this security is on loan.

## All or a portion of this security has been segregated for when-issued securities or unfunded loans.

(i) Illiquid security for which the designation as illiquid is unaudited.

(v) Security represents investment of cash collateral received from securities on loan.

(l) Investment in an affiliate.

(u) Rate shown is the 7-day annualized yield at period end.

(r) The investment company is exempt from registration under Section 3(c)(7) of the 1940 Act.

* Cost for federal income tax purposes is $102,584,674 and net unrealized appreciation (depreciation) consist of:

Gross unrealized appreciation	$	2,206,786
Gross unrealized depreciation		(439,724	)
Net unrealized appreciation	$	1,767,062

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

24 Wells Fargo Advantage VT Total Return Bond Fund Statement of Assets and Liabilities—December 31, 2011

Assets
Investments
In unaffiliated securities (including securities on loan), at value	$	95,465,326
In affiliated securities, at value		8,886,410
Total investments, at value (see cost below)		104,351,736
Receivable for investments sold		32,575,509
Principal paydown receivable		11,640
Receivable for Fund shares sold		80,276
Receivable for interest		460,214
Receivable for securities lending income		38
Total assets		137,479,413
Liabilities
Dividends payable		9,946
Payable for investments purchased		47,463,018
Payable for Fund shares redeemed		79,021
Payable upon receipt of securities loaned		228,800
Payable for interest on TBA sale commitments		3,294
TBA sale commitments, at value (see proceeds received below)		2,440,188
Advisory fee payable		10,988
Distribution fees payable		19,369
Due to other related parties		10,070
Accrued expenses and other liabilities		76,941
Total liabilities		50,341,635
Total net assets	$	87,137,778
NET ASSETS CONSIST OF
Paid-in capital	$	89,056,486
Undistributed net investment income		67,778
Accumulated net realized losses on investments		(4,012,468	)
Net unrealized gains on investments		2,025,982
Total net assets	$	87,137,778
COMPUTATION OF NET ASSET VALUE PER SHARE1
Net assets – Class 2	$	87,137,778
Shares outstanding – Class 2		8,270,617
Net asset value per share – Class 2		$10.54
Total investments, at cost	$	102,301,703
Securities on loan, at value	$	223,841
Proceeds received from TBA sale commitments	$	2,416,137

1. The Fund has an unlimited number of authorized shares.

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

Statement of Operations—Year Ended December 31, 2011 Wells Fargo Advantage VT Total Return Bond Fund 25

Investment income
Interest	$	2,489,255
Income from affiliated securities		5,213
Total investment income		2,494,468
Expenses
Advisory fee		336,025
Administration fees
Fund level		42,003
Class 2		67,205
Distribution fees
Class 2		210,015
Custody and accounting fees		16,723
Professional fees		46,670
Shareholder report expenses		21,255
Trustees’ fees and expenses		15,389
Other fees and expenses		6,248
Total expenses		761,533
Less: Fee waivers and/or expense reimbursements		(20,344	)
Net expenses		741,189
Net investment income		1,753,279
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains (losses) on:
Unaffiliated securities		4,069,906
TBA sale commitments		(304,335	)
Net realized gains on investments		3,765,571
Net change in unrealized gains (losses) on:
Unaffiliated securities		1,122,564
TBA sale commitments		(14,637	)
Net change in unrealized gains (losses) on investments		1,107,927
Net realized and unrealized gains (losses) on investments		4,873,498
Net increase in net assets resulting from operations	$	6,626,777

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

26 Wells Fargo Advantage VT Total Return Bond Fund Statements of Changes in Net Assets

	Year Ended December 31, 2011						Year Ended December 31, 2010
Operations
Net investment income				$	1,753,279					$	2,351,700
Net realized gains on investments					3,765,571						5,025,162
Net change in unrealized gains (losses) on investments					1,107,927						(1,720,127	)
Net increase in net assets resulting from operations					6,626,777						5,656,735
Distributions to shareholders from
Net investment income – Class 2					(2,244,747	)					(2,911,613	)1
Net realized gains – Class 2					(3,319,231	)					(1,599,718	)1
Total distributions to shareholders					(5,563,978	)					(4,511,331	)
		Shares						Shares
Capital share transactions
Proceeds from shares sold – Class 2		1,837,013			19,239,066			1,128,306	1		11,845,200	1
Reinvestment of distributions – Class 2		538,528			5,563,978			430,547	1		4,523,836	1
Payment for shares redeemed – Class 2		(2,306,909	)		(24,143,648	)		(5,530,492	)1		(58,415,579	)1
Net asset value of shares issued in acquisition – Class 2		0			0			2,976,311			31,182,320
Net increase (decrease) in net assets resulting from capital share transactions					659,396						(10,864,223	)
Total increase (decrease) in net assets					1,722,195						(9,718,819	)
Net assets
Beginning of period					85,415,583						95,134,402
End of period				$	87,137,778					$	85,415,583
Undistributed net investment income				$	67,778					$	41,738

1. After the close of business on July 16, 2010, existing shares of the Fund were renamed Class 2 shares.

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

Financial Highlights Wells Fargo Advantage VT Total Return Bond Fund 27

(For a share outstanding throughout each period)

	Year Ended December 31,
Class 21	2011			2010			2009			2008			2007
Net asset value, beginning of period	$	10.41		$	10.34		$	9.70		$	9.94		$	9.81
Net investment income		0.22			0.29			0.42			0.44			0.45
Net realized and unrealized gains (losses) on investments		0.62			0.43			0.72			(0.21	)		0.13
Total from investment operations		0.84			0.72			1.14			0.23			0.58
Distributions to shareholders from
Net investment income		(0.28	)		(0.36	)		(0.46	)		(0.47	)		(0.45	)
Net realized gains		(0.43	)		(0.29	)		(0.04	)		0.00			0.00
Total distributions to shareholders		(0.71	)		(0.65	)		(0.50	)		(0.47	)		(0.45	)
Net asset value, end of period		$10.54			$10.41			$10.34			$9.70			$9.94
Total return		8.31	%		7.04	%		11.99	%		2.39	%		6.08	%
Ratios to average net assets (annualized)
Gross expenses		0.91	%		0.91	%		1.20	%		1.19	%		0.94	%
Net expenses		0.88	%		0.86	%		0.85	%		0.90	%		0.90	%
Net investment income		2.09	%		2.76	%		4.07	%		4.55	%		4.58	%
Supplemental data
Portfolio turnover rate		843	%		838	%		580	%		692	%		580	%
Net assets, end of period (000’s omitted)		$87,138			$85,416			$95,134			$93,610			$129,098

1. After the close of business of July 16, 2010, existing shares of the Fund were renamed Class 2 shares.

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

28 Wells Fargo Advantage VT Total Return Bond Fund Notes to Financial Statements

1. ORGANIZATION

Wells Fargo Variable 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”). These financial statements report on Wells Fargo Advantage VT Total Return 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

Fixed income securities with maturities exceeding 60 days are valued based on available evaluated prices received from an independent pricing service approved by the Board of Trustees which may utilize both transaction data and market information such as yield, prices of securities of comparable quality, coupon rate, maturity, type of issue, trading characteristics and other market data. If valuations are not available from the pricing service or values received are deemed not representative of market value, values will be obtained from a third party broker-dealer or determined based on the Fund’s Fair Value Procedures.

Debt securities of sufficient credit quality with original maturities of 60 days or less generally are valued at amortized cost which approximates fair value. The amortized cost method involves valuing a security at its cost, plus accretion of discount or minus amortization of premium over the period until maturity.

Investments in open-end mutual funds and non-registered investment companies are generally valued at net asset value.

Investments which are not valued using any of the methods discussed above, are valued at their fair value, as determined by procedures established in good faith and approved by the Board of Trustees.

Security loans

The Fund may lend its securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. The Fund continues to receive interest or dividends on the securities loaned. The Fund receives collateral in the form of cash or securities with a value at least equal to the value of the securities on loan. The value of the loaned securities is determined at the close of each business day and any additional required collateral is delivered to the Fund on the next business day. In a securities lending transaction, the net asset value of the Fund will be affected by an increase or decrease in the value of the securities loaned and by an increase or decrease in the value of the instrument in which collateral is invested. The amount of securities lending activity undertaken by the Fund fluctuates from time to time. In the event of default or bankruptcy by the borrower, the Fund may be prevented from recovering the loaned securities or gaining access to the collateral or may experience delays or costs in doing so. In addition, the investment of any cash collateral received may lose all or part of its value. The Fund has the right under the lending agreement to recover the securities from the borrower on demand.

The Fund lends its securities through an unaffiliated securities lending agent. Cash collateral received in connection with its securities lending transactions is invested in Wells Fargo Securities Lending Cash Investments, LLC (the “Cash Collateral Fund”). The Cash Collateral Fund is exempt from registration under Section 3(c)(7) of the 1940 Act and is managed by Wells Fargo Funds Management LLC (“Funds Management”) and is sub-advised by Wells Capital Management Incorporated (“Wells Capital Management”). Funds Management receives an advisory fee starting at 0.05% and declining to 0.01% as the average daily net assets of the Cash Collateral Fund increase. All of the fees received by Funds Management are paid to Wells Capital Management for its services as sub-adviser. The Cash Collateral Fund seeks to provide a positive return compared to the daily Fed Funds Open rate by investing in high-quality, U.S. dollar-denominated short-term money market instruments. Cash Collateral Fund investments are fair valued based upon the amortized cost valuation technique. Income earned from investment in the Cash Collateral Fund is included in securities lending income on the Statement of Operations.

Notes to Financial Statements Wells Fargo Advantage VT Total Return Bond Fund 29

For Wells Fargo Advantage Funds that participated in securities lending activity prior to February 13, 2009, certain structured investment vehicles purchased in a joint account by the former securities lending agent defaulted or were impaired. Certain of the Wells Fargo Advantage Funds still hold ownership interest in these structured investment vehicles, which have since been restructured as pass-through securities. If the Fund holds an ownership interest in such pass-through securities, information regarding this ownership interest can be found in the Portfolio of Investments under the category “Other”.

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 to cover its obligation by confirming the availability of qualifying assets having a value sufficient to make payment for the securities purchased. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

TBA sale commitments

The Fund may enter into To Be Announced (“TBA”) sale commitments to hedge its portfolio positions or to sell mortgage-backed securities it owns under delayed delivery arrangements. Proceeds of TBA sale commitments are not received until the contractual settlement date. During the time a TBA sale commitment is outstanding, equivalent deliverable securities or an offsetting TBA purchase commitment deliverable on or before the sale commitment date, are held as “cover” for the transaction. Unsettled TBA sale commitments are valued at the current market value of the underlying securities, according to the procedures described under “Securities valuation”. The contract is marked-to-market daily and the change in market value is recorded by the Fund as an unrealized gain or loss. If the TBA sale commitment is closed through the acquisition of an offsetting purchase commitment, the Fund realizes a gain or loss. If the Fund delivers securities under the commitment, the Fund realizes a gain or a loss from the sale of the securities based upon the unit price established at the date the commitment was entered into.

Mortgage dollar roll transactions

The Fund may engage in mortgage dollar roll transactions with respect to mortgage-backed securities issued by Government National Mortgage Association (GNMA), Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC). In a mortgage dollar roll transaction, the Fund sells a mortgage-backed security to a financial institution, such as a bank or broker-dealer and simultaneously agrees to repurchase a substantially similar security from the institution at a later date at an agreed upon price. The mortgage-backed securities that are repurchased will bear the same interest rate as those sold, but generally will be collateralized by different pools of mortgages with different pre-payment histories. During the roll period, the Fund foregoes principal and interest paid on the securities. The Fund is compensated by the difference between the current sales price and the forward price for the future purchase as well as by the earnings on the cash proceeds of the initial sale. Mortgage dollar rolls may be renewed without physical delivery of the securities subject to the contract. The Fund accounts for the dollar roll transactions as purchases and sales.

Security transactions and income recognition

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

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily based on the effective interest method. To the extent debt obligations are placed on non-accrual status, any related interest income may be reduced by writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Distributions to shareholders

Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-dividend date. Such distributions are determined in conformity with income tax regulations, which may differ from generally accepted accounting principles.

The timing and character of distributions made during the period from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. To the extent that these differences are

30 Wells Fargo Advantage VT Total Return Bond Fund Notes to Financial Statements

permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment. Temporary differences do not require reclassifications. The primary permanent differences causing such reclassifications are due to paydown losses and mortgage dollar roll transactions. At December 31, 2011, as a result of permanent book-to-tax differences, the following reclassification adjustments were made on the Statement of Assets and Liabilities:

Undistributed Net Investment Income		Accumulated Net Realized Losses on Investments
$	517,508	$	(517,508	)

Federal and other taxes

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

The 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.

Under the recently enacted Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years which began after December 22, 2010 for an unlimited period. However, any losses incurred are required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

As of December 31, 2011, the Fund had net capital loss carryforwards, which are available to offset future net realized capital gains, in the amount of $5,408,193 with $713,327 expiring in 2015 and $4,694,866 expiring in 2016.

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 significant 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:

n Level 1 – quoted prices in active markets for identical securities

n Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

n Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Notes to Financial Statements Wells Fargo Advantage VT Total Return Bond Fund 31

As of December 31, 2011, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:

Investments in Securities	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Agency securities	$	0	$	43,016,094	$	0	$	43,016,094
Asset-backed securities		0		7,191,214		0		7,191,214
Corporate bonds and notes		0		10,629,546		0		10,629,546
Municipal bonds and notes		0		912,510		0		912,510
Non-agency mortgage-backed securities		0		7,148,886		0		7,148,886
U.S. Treasury securities		20,950,665		0		0		20,950,665
Yankee corporate bonds and notes		0		4,783,814		0		4,783,814
Yankee government bonds		0		498,956		0		498,956
Other		0		0		333,641		333,641
Short-term investments
Investment companies		8,807,666		78,744		0		8,886,410
	$	29,758,331	$	74,259,764	$	333,641	$	104,351,736

Further details on the major security types listed above can be found in the Portfolio of Investments.

As of December 31, 2011, the inputs used in valuing TBA sales commitments, which are carried at their value, were as follows:

	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
TBA sale commitments	$	0	$	(2,440,188	)	$	0	$	(2,440,188	)

Transfers in and transfers out are recognized at the end of the reporting period. For the year ended December 31, 2011, the Fund did not have any significant transfers into/out of Level 1 and Level 2.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

	Agency securities			Asset-backed securities			Other			Total
Balance as of December 31, 2010	$	603,883		$	272,078		$	553,059		$	1,429,020
Accrued discounts (premiums)		0			(14	)		0			(14	)
Realized gains (losses)		0			8,156			0			8,156
Change in unrealized gains (losses)		(189	)		(5,454	)		(17,992	)		(23,635	)
Purchases		0			107,227			0			107,227
Sales		(603,694	)		(381,993	)		(201,426	)		(1,187,113	)
Transfers into Level 3		0			0			0			0
Transfers out of Level 3		0			0			0			0
Balance as of December 31, 2011	$	0		$	0		$	333,641		$	333,641
Change in unrealized gains (losses) relating to securities still held at December 31, 2011	$	0		$	0		$	(110,527	)	$	(110,527	)

4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES

Advisory fee

The Trust has entered into an advisory contract with Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”). The adviser is responsible for implementing investment policies and guidelines and for supervising the sub-adviser, who is responsible for day-to-day portfolio management of the Fund.

32 Wells Fargo Advantage VT Total Return Bond Fund Notes to Financial Statements

Pursuant to the contract, Funds Management is entitled to receive an annual advisory fee starting at 0.40% and declining to 0.30% as the average daily net assets of the Fund increase. For the year ended December 31, 2011, the advisory fee was equivalent to an annual rate of 0.40% of the Fund’s average daily net assets.

Funds Management may retain the services of certain sub-advisers to provide daily portfolio management to the Fund. The fees related to sub-advisory services are borne directly by Funds Management and do not increase the overall fees paid by the Fund. Wells Capital Management, an affiliate of Funds Management, is the sub-adviser 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 and transfer agent fees

The Trust has entered into an administration agreement with Funds Management. Under this agreement, for providing administrative services, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers, Funds Management is entitled to receive from the Fund an annual fund level administration fee starting at 0.05% and declining to 0.03% as the average daily net assets of the Fund increase and for Class 2 shares, a class level administration fee of 0.08% of its average daily net assets.

Funds Management has contractually waived and/or reimbursed advisory and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. Waiver of fees and/or reimbursement of expenses by Funds Management were made first from fund level expenses on a proportionate basis and then from class specific expenses.

Distribution fees

The Trust has adopted a Distribution Plan for Class 2 shares of the Fund pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are charged to Class 2 shares and paid to Wells Fargo Funds Distributor, LLC, the principal underwriter, at an annual rate of 0.25% of its average daily net assets.

5. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding short-term securities (securities with maturities of one year or less at purchase date), for the year ended December 31, 2011 were as follows:

Purchases at Cost				Sales Proceeds
U.S. Government		Non-U.S. Government		U.S. Government		Non-U.S. Government
$	697,337,848	$	77,478,898	$	681,761,372	$	88,214,220

6. ACQUISITION

After the close of business on July 16, 2010, the Fund acquired the net assets of Evergreen VA Core Bond Fund. The purpose of the transaction was to combine two funds with similar investment objectives and strategies. The Fund renamed its existing single class share as Class 2. The acquisition was accomplished by a tax-free exchange of all of the shares of Evergreen VA Core Bond Fund for 2,976,311 shares of the Fund valued at $31,182,320 at an exchange ratio of 0.83 for Class 2 shares. Shareholders holding Class 2 shares of Evergreen VA Core Bond Fund received Class 2 shares of the Fund in the reorganization. The investment portfolio of Evergreen VA Core Bond Fund with a fair value of $31,099,786, identified cost of $30,533,822 and unrealized gains of $565,964 at July 16, 2010 were the principal assets acquired by the Fund. The aggregate net assets of Evergreen VA Core Bond Fund and the Fund immediately prior to the acquisition were $31,182,320 and $58,161,686, respectively. The aggregate net assets of the Fund immediately after the acquisition were $89,344,006. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from Evergreen VA Core Bond Fund was carried forward to align ongoing reporting of the Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.

Assuming the acquisition had been completed January 1, 2010, the beginning of the annual reporting period for the Fund, the pro forma results of operations for the year ended December 31, 2010 would have been:

Net investment income	$	2,883,307
Net realized and unrealized gains on investments	$	3,976,870
Net increase in net assets resulting from operations	$	6,860,177

Notes to Financial Statements Wells Fargo Advantage VT Total Return Bond Fund 33

7. BANK BORROWINGS

The Trust and Wells Fargo Funds Trust (excluding the money market funds) are parties to a $150,000,000 revolving credit agreement with State Street Bank and Trust Company, 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, under the credit agreement, the Fund pays an annual commitment fee equal to 0.10% of the unused balance, which is allocated pro rata. Prior to September 6, 2011, the revolving credit agreement was for $125,000,000 and the annual commitment fee paid by the Fund was 0.125% of the unused balance. For the year ended December 31, 2011, the Fund paid $125 in commitment fees.

For the year ended December 31, 2011, there were no borrowings by the Fund under the agreement.

8. DISTRIBUTIONS TO SHAREHOLDERS

The tax character of distributions paid during the years ended December 31, 2011 and December 31, 2010 were as follows:

	Year ended December 31,
	2011		2010
Ordinary Income	$	4,856,163	$	4,511,331
Long-term Capital Gain		707,815		0

As of December 31, 2011, the components of distributable earnings on a tax basis were as follows:

Undistributed Ordinary Income		Undistributed Long-Term Gain		Unrealized Gains (Losses)		Capital Loss Carryforward
$	775,817	$	957,569	$	1,767,062	$	(5,408,193	)

9. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and directors are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Trust may enter into contracts with service providers that contain a variety of indemnification clauses. The Trust’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.

10. NEW ACCOUNTING PRONOUNCEMENTS

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. ASU No. 2011-04 amends FASB ASC Topic 820, Fair Value Measurements and Disclosures, to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP. The ASU is effective prospectively for interim and annual periods beginning after December 15, 2011. Management expects that adoption of the ASU will result in additional disclosures in the financial statements, as applicable.

In April 2011, FASB issued ASU No. 2011-03 “Reconsideration of Effective Control for Repurchase Agreements”. ASU No. 2011-03 amends FASB ASC Topic 860, Transfers and Servicing, specifically the criteria required to determine whether a repurchase agreement (repo) and similar agreements should be accounted for as sales of financial assets or secured borrowings with commitments. ASU No. 2011-03 changes the assessment of effective control by focusing on the transferor’s contractual rights and obligations and removing the criterion to assess its ability to exercise those rights or honor those obligations. This could result in changes to the way entities account for certain transactions including repurchase agreements, mortgage dollar rolls and reverse repurchase agreements. The ASU will become effective on a prospective basis for new transfers and modifications to existing transactions as of the beginning of the first interim or annual period beginning on or after December 15, 2011. Management has evaluated the impact of adopting the ASU and expects no significant changes.

34 Wells Fargo Advantage VT Total Return Bond Fund Report of Independent Registered Public Accounting Firm

BOARD OF TRUSTEES AND SHAREHOLDERS OF WELLS FARGO VARIABLE TRUST:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the Wells Fargo Advantage VT Total Return Bond Fund (the “Fund”), one of the funds constituting the Wells Fargo Variable Trust, as of December 31, 2011, and the related statement of operations for the year then ended, statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2011, by correspondence with custodian and brokers, or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Wells Fargo Advantage VT Total Return Bond Fund as of December 31, 2011, the results of its operations for the year then ended, changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

February 24, 2012

Other Information (Unaudited) Wells Fargo Advantage VT Total Return Bond Fund 35

TAX INFORMATION

Pursuant to Section 852 of the Internal Revenue Code, $707,815 was designated as long-term capital gain distributions for the fiscal year ended December 31, 2011.

PROXY VOTING INFORMATION

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-222-8222, visiting our Web site at www.wellsfargo.com/advantagefunds, or visiting the SEC Web site at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the Fund’s Web site at www.wellsfargo.com/advantagefunds or by visiting the SEC Web site at www.sec.gov.

PORTFOLIO HOLDINGS INFORMATION

The complete portfolio holdings for the Fund are publicly available on the Fund’s Web site (www.wellsfargo.com/advantagefunds) on a monthly, 30-day or more delayed basis. In addition, top ten holdings information for the Fund is publicly available on the Fund’s Web site on a monthly, seven-day or more delayed basis. The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q, which is available without charge by visiting the SEC Web site at www.sec.gov. In addition, the Fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and at regional offices in New York City, at 233 Broadway, and in Chicago, at 175 West Jackson Boulevard, Suite 900. Information about the Public Reference Room may be obtained by calling 1-800-SEC-0330.

36 Wells Fargo Advantage VT Total Return Bond Fund Other Information (Unaudited)

BOARD OF TRUSTEES

The following table provides basic information about the Board of Trustees (the “Trustees”) of the Trust and Officers of the Trust. This table should be read in conjunction with the Prospectus and the Statement of Additional Information¹ of the Fund. Each of the Trustees and Officers listed below acts in identical capacities for the Wells Fargo Advantage family of funds, which consists of 138 funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust and four closed-end funds (collectively the “Fund Complex”). All of the Trustees are also Members of the Audit and Governance Committees of each Trust in the Fund Complex. The mailing address of each Trustee and Officer is 525 Market Street, 12th Floor, San Francisco, CA 94105. 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	Other Directorships During Past Five Years
Peter G. Gordon (Born 1942)	Trustee, since 1998; Chairman, since 2005 (Lead Trustee since 2001)	Co-Founder, Retired Chairman, President and CEO of Crystal Geyser Water Company. Trustee Emeritus, Colby College	Asset Allocation Trust
Isaiah Harris, Jr. (Born 1952)	Trustee, since 2009	Retired. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Mr. Harris is a certified public accountant.	CIGNA Corporation; Deluxe Corporation; Asset Allocation Trust
Judith M. Johnson (Born 1949)	Trustee, since 2008	Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.	Asset Allocation Trust
Leroy Keith, Jr. (Born 1939)	Trustee, since 2010	Chairman, Bloc Global Services (development and construction). Trustee of the Evergreen Funds from 1983 to 2010. Former Managing Director, Almanac Capital Management (commodities firm), former Partner, Stonington Partners, Inc. (private equity fund), former Director, Obagi Medical Products Co. and former Director, Lincoln Educational Services.	Trustee, Virtus Fund Complex (consisting of 40 portfolios as of 12/31/11); Asset Allocation Trust
David F. Larcker (Born 1950)	Trustee, since 2009	James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of Corporate Governance Research Program and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.	Asset Allocation Trust
Olivia S. Mitchell (Born 1953)	Trustee, since 2006	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.	Asset Allocation Trust

Other Information (Unaudited) Wells Fargo Advantage VT Total Return Bond Fund 37

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years	Other Directorships During Past Five Years
Timothy J. Penny (Born 1951)	Trustee, since 1996	President and CEO of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007 and Senior Fellow at the Humphrey Institute Policy Forum at the University of Minnesota since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.	Asset Allocation Trust
Michael S. Scofield (Born 1943)	Trustee, since 2010	Served on the Investment Company Institute’s Board of Governors and Executive Committee from 2008-2011 as well the Governing Council of the Independent Directors Council from 2006-2011 and the Independent Directors Council Executive Committee from 2008-2011. Chairman of the IDC from 2008-2010. Institutional Investor (Fund Directions) Trustee of Year in 2007. Trustee of the Evergreen Funds (and its predecessors) from 1984 to 2010. Chairman of the Evergreen Funds from 2000-2010. Former Trustee of the Mentor Funds. Retired Attorney, Law Offices of Michael S. Scofield and former Director and Chairman, Branded Media Corporation (multi-media branding company).	Asset Allocation Trust
Donald C. Willeke (Born 1940)	Trustee, since 1996	Principal of the law firm of Willeke & Daniels. General Counsel of the Minneapolis Employees Retirement Fund from 1984 until its consolidation into the Minnesota Public Employees Retirement Association on June 30, 2010. Director and Vice Chair of The Free Trust (non-profit corporation). Director of the American Chestnut Foundation (non-profit corporation).	Asset Allocation Trust

Officers

Name and Year of Birth	Position Held and Length of Service	Principal Occupations During Past Five Years
Karla M. Rabusch (Born 1959)	President, since 2003	Executive Vice President of Wells Fargo Bank, N.A. and President of Wells Fargo Funds Management, LLC since 2003. Senior Vice President and Chief Administrative Officer of Wells Fargo Funds Management, LLC from 2001 to 2003.
C. David Messman (Born 1960)	Secretary, since 2000; Chief Legal Counsel, since 2003	Senior Vice President and Secretary of Wells Fargo Funds Management, LLC since 2001. Vice President and Managing Senior Counsel of Wells Fargo Bank, N.A. since 1996.
Kasey Phillips (Born 1970)	Treasurer, since 2009	Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2006 to 2010. Treasurer of the Evergreen Funds from 2005 to 2010.
David Berardi (Born 1975)	Assistant Treasurer, since 2009	Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Assistant Vice President of Evergreen Investment Services, Inc. from 2004 to 2008. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.
Jeremy DePalma (Born 1974)	Assistant Treasurer, since 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. Vice President, Evergreen Investment Services, Inc. from 2004 to 2007. Head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.
Debra Ann Early (Born 1964)	Chief Compliance Officer, since 2007	Chief Compliance Officer of Wells Fargo Funds Management, LLC since 2007. Chief Compliance Officer of Parnassus Investments from 2005 to 2007. Chief Financial Officer of Parnassus Investments from 2004 to 2007 and Senior Audit Manager of PricewaterhouseCoopers LLP from 1998 to 2004.

1. 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 Web site at www.wellsfargo.com/advantagefunds.

38 Wells Fargo Advantage VT Total Return Bond Fund List of Abbreviations

The following is a list of common abbreviations for terms and entities which may have appeared in this report.

ACB —  Agricultural Credit Bank

ADR —  American Depository Receipt

ADS —  American Depository Shares

AGC-ICC —  Assured Guaranty Corporation - Insured Custody Certificates

AGM —  Assured Guaranty Municipal

AMBAC —  American Municipal Bond Assurance Corporation

AMT —  Alternative Minimum Tax

AUD —  Australian Dollar

BAN —  Bond Anticipation Notes

BHAC —  Berkshire Hathaway Assurance Corporation

BRL —  Brazil Real

CAB —  Capital Appreciation Bond

CAD —  Canadian Dollar

CCAB —  Convertible Capital Appreciation Bond

CDA —  Community Development Authority

CDO —  Collateralized Debt Obligation

CHF —  Swiss Franc

COP —  Certificate of Participation

CR —  Custody Receipts

DKK —  Danish Krone

DRIVER —  Derivative Inverse Tax-Exempt Receipts

DW&P —  Department of Water & Power

DWR —  Department of Water Resources

ECFA —  Educational & Cultural Facilities Authority

EDA —  Economic Development Authority

EDFA —  Economic Development Finance Authority

ETF —  Exchange-Traded Fund

EUR —  Euro

FFCB —  Federal Farm Credit Bank

FGIC —  Financial Guaranty Insurance Corporation

FHA —  Federal Housing Authority

FHLB —  Federal Home Loan Bank

FHLMC —  Federal Home Loan Mortgage Corporation

FNMA —  Federal National Mortgage Association

FSA —  Farm Service Agency

GBP —  Great British Pound

GDR —  Global Depository Receipt

GNMA —  Government National Mortgage Association

GO —  General Obligation

HCFR —  Healthcare Facilities Revenue

HEFA —  Health & Educational Facilities Authority

HEFAR —  Higher Education Facilities Authority Revenue

HFA —  Housing Finance Authority

HFFA —  Health Facilities Financing Authority

HKD —  Hong Kong Dollar

HUF —  Hungarian Forint

IBC —  Insured Bond Certificate

IDA —  Industrial Development Authority

IDAG —  Industrial Development Agency

IDR —  Industrial Development Revenue

IEP —  Irish Pound

JPY —  Japanese Yen

KRW —  Republic of Korea Won

LIBOR —  London Interbank Offered Rate

LLC —  Limited Liability Company

LLP —  Limited Liability Partnership

LOC —  Letter of Credit

LP —  Limited Partnership

MBIA —  Municipal Bond Insurance Association

MFHR —  Multi-Family Housing Revenue

MTN —  Medium Term Note

MUD —  Municipal Utility District

MXN —  Mexican Peso

MYR —  Malaysian Ringgit

NATL-RE —  National Public Finance Guarantee Corporation

NOK —  Norwegian Krone

NZD —  New Zealand Dollar

PCFA —  Pollution Control Finance Authority

PCR —  Pollution Control Revenue

PFA —  Public Finance Authority

PFFA —  Public Facilities Financing Authority

PFOTER —  Puttable Floating Option Tax-Exempt Receipts

plc —  Public Limited Company

PLN —  Polish Zloty

PUTTER —  Puttable Tax-Exempt Receipts

R&D —  Research & Development

RDA —  Redevelopment Authority

RDFA —  Redevelopment Finance Authority

REIT —  Real Estate Investment Trust

ROC —  Reset Option Certificates

SAVRS —  Select Auction Variable Rate Securities

SBA —  Small Business Authority

SEK —  Swedish Krona

SFHR —  Single Family Housing Revenue

SFMR —  Single Family Mortgage Revenue

SGD —  Singapore Dollar

SKK —  Slovakian Koruna

SPDR —  Standard & Poor’s Depositary Receipts

TAN —  Tax Anticipation Notes

TBA —  To Be Announced

TIPS —  Treasury Inflation-Protected Securities

TRAN —  Tax Revenue Anticipation Notes

TCR —  Transferable Custody Receipts

TRY —  Turkish Lira

TTFA —  Transportation Trust Fund Authority

TVA —  Tennessee Valley Authority

XLCA —  XL Capital Assurance

ZAR —  South African Rand

FOR MORE INFORMATION

More information about Wells Fargo Advantage Funds is available free upon request. To obtain literature, please write, e-mail, visit the Fund’s Web site, or call:

Wells Fargo Advantage Funds

P.O. Box 8266

Boston, MA 02266-8266

E-mail: wfaf@wellsfargo.com

Web site: www.wellsfargo.com/advantagefunds

Individual investors: 1-800-222-8222

Retail investment professionals: 1-888-877-9275

Institutional investment professionals: 1-866-765-0778

This report and the financial statements contained herein are submitted for the general information of the shareholders of Wells Fargo Advantage Funds. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. For a prospectus containing more complete information, including charges and expenses, call 1-800-222-8222 or visit the Fund’s Web site at www.wellsfargo.com/advantagefunds. Please consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. This and other information about Wells Fargo Advantage Funds can be found in the current prospectus. Read the prospectus carefully before you invest or send money.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company.

NOT FDIC INSURED  ¡  NO BANK GUARANTEE  ¡   MAY LOSE VALUE

© 2012 Wells Fargo Funds Management, LLC. All rights reserved.

207579 02-12

AVT9/AR155 12-11

ITEM 2. CODE OF ETHICS

As of the end of the period, December 31, 2011, Wells Fargo Variable Trust has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its President and Treasurer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT

The Board of Trustees of Wells Fargo Variable Trust has determined that Judith Johnson is an audit committee financial expert, as defined in Item 3 of Form N-CSR. Mrs. Johnson is independent for purposes of Item 3 of Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES

(a)

Audit Fees - Provided below are the aggregate fees billed for the fiscal years ended December 31, 2010 and December 31, 2011 for professional services rendered by the principal accountant for the audit of the Registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.

For the fiscal years ended December 31, 2010 and December 31, 2011, the Audit Fees were $284,730 and $553,779, respectively.

(b)

Audit-Related Fees – There were no audit-related fees incurred for the fiscal years ended December 31, 2010 and December 31, 2011 for assurance and related services by the principal accountant for the Registrant.

(c)

Tax Fees - Provided below are the aggregate fees billed for the fiscal years ended December 31, 2010 and December 31, 2011 for professional services rendered by the principal accountant for the Registrant for tax compliance, tax advice, and tax planning.

For the fiscal years ended December 31, 2010 and December 31, 2011, the Tax Fees were $21,020 and $21,560 respectively. The incurred Tax Fees are comprised of tax preparation and consulting services.

(d)

All Other Fees – There were no other fees incurred for the fiscal years ended December 31, 2010 and December 31, 2011.

(e)(1)

The Chairman of the Audit Committees is authorized to pre-approve: (1) audit services to the mutual funds of Wells Fargo Variable Trust; (2) non-audit tax or compliance consulting or training services provided to the Funds by the independent auditors (“Auditors”) if the fees for any particular engagement are not anticipated to exceed $50,000; and (3) non-audit tax or compliance consulting or training services provided by the Auditors to a Fund’s investment adviser and its controlling entities (where pre-approval is required because the engagement relates directly to the operations and financial reporting of the Fund) if the fee to the Auditors for any particular engagement is not anticipated to exceed $50,000. For any such pre-approval sought from the Chairman, Management shall prepare a brief description of the proposed services. If the Chairman approves of such service, he or she shall sign the statement prepared by Management. Such written statement shall be presented to the full Committees at their next regularly scheduled meetings.

(e)(2)

Not Applicable.

(f)

Not Applicable.

(g)

Non-Audit Fees – There were no non-audit fees billed for the fiscal years ended December 31, 2010 and December 31, 2011, by the principal accountant for services rendered to the Registrant, and rendered to the Registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the Registrant.

(h)

The Registrant’s audit committee of the board of directors has determined that non-audit services rendered to the registrant’s investment adviser, that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of the Regulation S-X, does not compromise the independence of the principal accountant.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS

Not applicable.

ITEMS 6. SCHEDULE OF INVESTMENTS

The Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASES

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Governance Committee (the “Committee”) of the Board of Trustees of the registrant (the “Trust”) has adopted procedures by which a shareholder of any series of the Trust may submit properly a nominee recommendation for the Committee’s consideration.

The shareholder must submit any such recommendation (a “Shareholder Recommendation”) in writing to the Trust, to the attention of the Trust’s Secretary, at the address of the principal executive offices of the Trust.

The Shareholder Recommendation must be delivered to, or mailed and received at, the principal executive offices of the Trust not less than forty-five (45) calendar days nor more than seventy-five (75) calendar days prior to the date of the Committee meeting at which the nominee would be considered.

The Shareholder Recommendation must include: (i) a statement in writing setting forth (A) the name, age, date of birth, business address, residence address and nationality of the person recommended by the shareholder (the “candidate”); (B) the series (and, if applicable, class) and number of all shares of the Trust owned of record or beneficially by the candidate, as reported to such shareholder by the candidate; (C) any other information regarding the candidate called for with respect to director nominees by paragraphs (a), (d), (e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22 of Rule 14a-101 (Schedule 14A) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), adopted by the Securities and Exchange Commission (or the corresponding provisions of any regulation or rule subsequently adopted by the Securities and Exchange Commission or any successor agency applicable to the Trust); (D) any other information regarding the candidate that would be required to be disclosed if the candidate were a nominee in a proxy statement or other filing required to be made in connection with solicitation of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (E) whether the recommending shareholder believes that the candidate is or will be an “interested person” of the Trust (as defined in the Investment Company Act of 1940, as amended) and, if not an “interested person,” information regarding the candidate that will be sufficient for the Trust to make such determination; (ii) the written and signed consent of the candidate to be named as a nominee and to serve as a Trustee if elected; (iii) the recommending shareholder’s name as it appears on the Trust’s books; (iv) the series (and, if applicable, class) and number of all shares of the Trust owned beneficially and of record by the recommending shareholder; and (v) a description of all arrangements or understandings between the recommending shareholder and the candidate and any other person or persons (including their names) pursuant to which the recommendation is being made by the recommending shareholder. In addition, the Committee may require the candidate to interview in person and furnish such other information as it may reasonably require or deem necessary to determine the eligibility of such candidate to serve as a Trustee of the Trust.

ITEM 11. CONTROLS AND PROCEDURES

(a) The President and Treasurer have concluded that the Wells Fargo Variable Trust (the “Trust”) disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons based on their evaluation of these controls and procedures as of a date within 90 days of the filing of this report.

(b) There were no significant changes in the Trust’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second quarter of the period covered by this report that materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

ITEM 12. EXHIBITS

(a)(1) Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as Exhibit 10a.

(a)(2) Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.

(a)(3) Not applicable.

(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is filed and attached hereto as Exhibit 99.906CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Wells Fargo Variable Trust
By:
	/s/ Karla M. Rabusch
	Karla M. Rabusch
	President
Date: February 24, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

By:
	/s/ Karla M. Rabusch
	Karla M. Rabusch
	President
Date: February 24, 2011
By:
	/s/ Kasey L. Phillips
	Kasey L. Phillips
	Treasurer
Date: February 24, 2011