WealthBuilder SM Funds

Transcription

1 Semi-Annual Report November 30, 2017 WealthBuilder SM Funds Wells Fargo WealthBuilder Conservative Allocation Fund Wells Fargo WealthBuilder Equity Fund Wells Fargo WealthBuilder Growth Allocation Fund Wells Fargo WealthBuilder Growth Balanced Fund Wells Fargo WealthBuilder Moderate Balanced Fund

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3 Contents Reduce clutter. Save trees. Sign up for electronic delivery of prospectuses and shareholder reports at wellsfargo.com/advantagedelivery Letter to shareholders... 2 Performance highlights Wells Fargo WealthBuilder Conservative Allocation Fund... 4 Wells Fargo WealthBuilder Equity Fund... 8 Wells Fargo WealthBuilder Growth Allocation Fund Wells Fargo WealthBuilder Growth Balanced Fund Wells Fargo WealthBuilder Moderate Balanced Fund Fund expenses Portfolios of investments Wells Fargo WealthBuilder Conservative Allocation Fund Wells Fargo WealthBuilder Equity Fund Wells Fargo WealthBuilder Growth Allocation Fund Wells Fargo WealthBuilder Growth Balanced Fund Wells Fargo WealthBuilder Moderate Balanced Fund Financial statements Statements of assets and liabilities Statements of operations Statements of changes in net assets Financial highlights Notes to financial statements Other information List of abbreviations The views expressed and any forward-looking statements are as of November 30, 2017, 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 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 timeinresponseto changing circumstances in the market. Wells Fargo Funds Management, LLC and the Funds disclaim any obligation to publicly update or revise any views expressed or forward-looking statements. NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE

4 2 Wells Fargo WealthBuilder Funds Letter to shareholders (unaudited) Dear Shareholder: We are pleased to offer you this semi-annual report for the Wells Fargo WealthBuilder Funds for the six-month period that ended November 30, In a predominantly improving economic environment, global stocks delivered strong results; bond markets had smaller but positive results as well. U.S. and international stocks returned 10.89% and 9.38%, respectively, for the six-month period, as measured by the S&P 500 Index 1 and the MSCI ACWI ex USA Index (Net), 2 respectively; within fixed income, the Bloomberg Barclays U.S. Aggregate Bond Index 3 returned 0.68% and the Bloomberg Barclays Municipal Bond Index 4 returned 0.40%. Andrew Owen President Wells Fargo Funds In a predominantly improving economic environment, global stocks delivered strong results; bond markets had smaller but positive results as well. Global growth strengthened in June and through the third quarter of 2017, and investment markets generally advanced. From June through September, most stock markets worldwide moved higher and were at or near all-time highs as September ended. Moderate acceleration in global economic growth was supported by improving corporate earnings, low inflation pressure, and still-low interest rates. Corporate earnings reports were favorable overall as companies continued to benefit from healthy operating leverage. Global commodity prices climbed; oil prices rebounded, partly due to a better balance between supply and demand. While North Korea s missile launches and nuclear testing raised serious concerns around the world, the heightened geopolitical risk had relatively minimal impact on stock returns. In the U.S., economic data released in the third quarter reflected a generally healthy economy. Second-quarter economic output grew at a 3.1% annual rate, and consumers displayed more willingness to spend. Meanwhile, after raising the target interest rate by a quarter percentage point in June to a range of 1.00 to 1.25% the Federal Reserve (Fed) chose to maintain that target throughout the third quarter, noting that inflation had remained below the Fed s 2.00% objective. Reflecting continued confidence in the U.S. economy, the Fed also stated the possibility of one more 0.25% increase in the federal funds rate by the end of 2017 and announced plans to begin the process of unwinding its $4.5 trillion portfolio of bonds and other assets in October. Outside the U.S., stocks in the Asia Pacific region benefited from solid earnings reports and investors willingness to take on risk despite the rising tensions between North Korea and the U.S. In Europe, markets were supported by better-than-expected economic growth, which has led to narrowing of the gap between Europe s growth rate and that of the U.S. In emerging markets, many countries benefited from stronger currencies versus the U.S. dollar. Also, commodity prices were on an upward trajectory, which benefited many companies that rely on natural resources for exports 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. The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the United States and Canada. 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. You cannot invest directly in an index. The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index. The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

5 Letter to shareholders (unaudited) Wells Fargo WealthBuilder Funds 3 Positive economic and market news generally continued into October and November. October proved to be a strong month for U.S. stocks. The S&P 500 Index delivered 11 record closes amid rising consumer confidence and signs the economy was continuing to gain momentum, including news in late October that economic output was estimated to have grown at a 3.0% annual rate in the third quarter. At its October meeting, the Fed, in a unanimous vote, left short-term interest rates unchanged but signaled it could make another rate increase before the end of 2017 if the economy remains on track. The Fed also began the process of unwinding its quantitative easing program. Outside the U.S., international stocks generally delivered positive results in October as global economic growth continued to strengthen. Economic data released in November indicated that the U.S. economy was continuing its steady expansion, even though inflation remained low. The U.S. Bureau of Economic Analysis raised its estimate of third-quarter economic growth to 3.3% during November, consumers increased their spending, and U.S. companies continued to deliver solid earnings gains. As November ended, major U.S. stock indexes climbed to record levels, propelled by investors rising confidence that the U.S. Senate would pass its version of a tax-overhaul bill. The optimism led many investors to sell U.S. Treasury bonds in order to purchase stocks, which pushed government bond yields higher. Outside the U.S., stock markets generally delivered favorable monthly results, and economies continued to improve. Within the eurozone, for example, accelerating growth and falling unemployment helped boost the eurozone economic indicator to its highest level in 17 years in November. Don t let short-term uncertainty derail long-term investment goals. Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. To help you create a sound strategy based on your personal goals and risk tolerance, Wells Fargo Funds offers more than 100 mutual funds spanning a wide range of asset classes and investment styles. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities. Thank you for choosing to invest with Wells Fargo Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs. 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. Sincerely, Andrew Owen President Wells Fargo Funds For further information about your Fund, contact your investment professional, visit our website at wellsfargofunds.com, or call us directly at We are available 24 hours a day, 7 days a week.

6 4 Wells Fargo WealthBuilder Funds Performance highlights (unaudited) Wells Fargo WealthBuilder Conservative Allocation Fund Investment objective The Fund seeks current income with a secondary emphasis on capital appreciation. Manager Wells Fargo Funds Management, LLC Subadviser Wells Capital Management Incorporated Portfolio managers Kandarp R. Acharya, CFA, FRM Petros Bocray, CFA, FRM Christian L. Chan, CFA Average annual total returns (%) as of November 30, Including sales charge Excluding sales charge Expense ratios 2 (%) Inception date 1 year 5 year 10 year 1 year 5 year 10 year Gross Net 3 Class A (WCAFX) Class C (WCCFX)* WealthBuilder Conservative Allocation Blended Index Bloomberg Barclays U.S. Aggregate Bond Index MSCI ACWI ex USA Index (Net) Russell 3000 Index * Effective at the close of business on February 10, 2017, the Fund s existing share class, WealthBuilder Portfolio shares, was renamed and modified to assume the features and attributes of Class C. Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund s website, wellsfargofunds.com. Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index. For Class A shares, the maximum front-end sales charge is 5.75%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. 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. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest-rate changes and their impact on the Fund and its share price can be sudden and unpredictable. The use of derivatives may reduce returns and/or increase volatility. The Fund will indirectly be exposed to all of the risks of an investment in the underlying funds and will indirectly bear expenses of the underlying funds. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). The Fund is exposed to alternative investment risk, foreign investment risk, high-yield securities risk, mortgage- and asset-backed securities risk, and smaller-company investment risk. Consult the Fund s prospectus for additional information on these and other risks. Please see footnotes on page 6.

7 Performance highlights (unaudited) Wells Fargo WealthBuilder Funds 5 Wells Fargo WealthBuilder Conservative Allocation Fund (continued) Ten largest holdings (%) as of November 30, Wells Fargo Core Bond Portfolio Vanguard Intermediate-Term Corporate Bond ETF Wells Fargo Bloomberg Barclays US Aggregate ex-corporate Portfolio Vanguard Short-Term Bond ETF 8.93 Wells Fargo Factor Enhanced Large Cap Portfolio 4.53 Wells Fargo Real Return Portfolio 4.49 ishares S&P 500 Index ETF 4.17 Federated Institutional High Yield Bond Fund Class R Oppenheimer International Bond Fund Class I 3.76 Wells Fargo Factor Enhanced International Portfolio 2.70 Neutral target allocation Stocks (20%) Alternative Investments (5%) Bonds (75%) Current target allocation as of November 30, Alternative Investments (5%) Stocks (20%) Effective Cash (8%) Bonds (67%) Please see footnotes on page 6.

8 6 Wells Fargo WealthBuilder Funds Performance highlights (unaudited) Wells Fargo WealthBuilder Conservative Allocation Fund (continued) The inception date of Class A was February 10, 2017, and Class C was September 30, Historical performance for Class A shares prior to their inception reflects the performance of Class C shares and includes the higher expenses applicable to Class C shares. If these expenses had not been included, returns for Class A shares would be higher. Prior to February 13, 2017, historical performance shown for Class C shares reflects the performance of the Fund s predecessor WealthBuilder Portfolio share class and does not reflect the front-end sales load previously attributable to the predecessor class. The expenses for Class C shares and the predecessor share class are similar. Reflects the expense ratios as stated in the most recent prospectus, which include the impact of 0.54% of acquired fund fees and expenses. Net expenses from master portfolios are included in the acquired fund fees and expense amount. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report, which do not include acquired fund fees and expenses. The manager has contractually committed through September 30, 2018, to waive fees and/or reimburse expenses to the extent necessary to cap the Fund s Total Annual Fund Operating Expenses After Fee Waivers at 0.75% for Class A and 1.50% for Class C. After this time, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses, and extraordinary expenses are excluded from the expense cap. Without this cap, the Fund s returns would have been lower. The expense ratio paid by an investor is the net expense ratio or the Fund s Total Annual Fund Operating Expenses After Fee Waivers, as stated in the prospectus. Source: Wells Fargo Funds Management, LLC. The WealthBuilder Conservative Allocation Blended Index is comprised of the following indexes: Bloomberg Barclays U.S. Aggregate Bond Index (80%), Russell 3000 Index (14%), and the MSCI ACWI ex USA Index (Net) (6%). You cannot invest directly in an index. The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index. The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalizationweighted index that is designed to measure the equity market performance of developed markets, excluding the United States and Canada. 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. You cannot invest directly in an index. The Russell 3000 Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index. The ten largest holdings, excluding cash and cash equivalents, are calculated based on the value of the investments divided by the total net assets of the Fund. Holdings are subject to change and may have changed since the date specified. Current target allocation includes the effect of any tactical futures overlay that may be in place. Effective cash is comprised of the net impact of long and/or short futures contracts held as part of dynamic risk management strategy. The amounts are subject to change and may have changed since the date specified.

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10 8 Wells Fargo WealthBuilder Funds Performance highlights (unaudited) Wells Fargo WealthBuilder Equity Fund Investment objective The Fund seeks long-term capital appreciation with no emphasis on income. Manager Wells Fargo Funds Management, LLC Subadviser Wells Capital Management Incorporated Portfolio managers Kandarp R. Acharya, CFA, FRM Petros Bocray, CFA, FRM Christian L. Chan, CFA Average annual total returns (%) as of November 30, Including sales charge Excluding sales charge Expense ratios 2 (%) Inception date 1 year 5 year 10 year 1 year 5 year 10 year Gross Net 3 Class A (WEAFX) Class C (WEACX)* WealthBuilder Equity Blended Index MSCI ACWI ex USA Index (Net) Russell 3000 Index * Effective at the close of business on February 10, 2017, the Fund s existing share class, WealthBuilder Portfolio shares, was renamed and modified to assume the features and attributes of Class C. Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund s website, wellsfargofunds.com. Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index. For Class A shares, the maximum front-end sales charge is 5.75%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. The Fund will indirectly be exposed to all of the risks of an investment in the underlying funds and will indirectly bear expenses of the underlying funds. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). The Fund is exposed to alternative investment risk, foreign investment risk and smaller-company investment risk. Consult the Fund s prospectus for additional information on these and other risks. Please see footnotes on page 10.

11 Performance highlights (unaudited) Wells Fargo WealthBuilder Funds 9 Wells Fargo WealthBuilder Equity Fund (continued) Ten largest holdings (%) as of November 30, Wells Fargo Factor Enhanced Large Cap Portfolio ishares S&P 500 Index ETF Neutral target allocation Small Company (10%) Wells Fargo Factor Enhanced International Portfolio Wells Fargo Disciplined U.S. Core Fund Class R International (30%) Wells Fargo Factor Enhanced Emerging Markets Portfolio 5.40 Dodge & Cox International Stock Fund 4.91 Wells Fargo Factor Enhanced Small Cap Portfolio 4.53 Wells Fargo Endeavor Select Fund Institutional Class 4.48 Large Company (60%) Wells Fargo Large Cap Growth Fund Class R Wells Fargo Emerging Growth Portfolio 3.48 Current target allocation as of November 30, Small Company (10%) International (30%) Large Company (60%) Please see footnotes on page 10.

12 10 Wells Fargo WealthBuilder Funds Performance highlights (unaudited) Wells Fargo WealthBuilder Equity Fund (continued) The inception date of Class A was February 10, 2017, and Class C was October 1, Historical performance for Class A shares prior to their inception reflects the performance of Class C shares and includes the higher expenses applicable to Class C shares. If these expenses had not been included, returns for Class A shares would be higher. Prior to February 13, 2017, historical performance shown for Class C shares reflects the performance of the Fund s predecessor WealthBuilder Portfolio share class and does not reflect the front-end sales load previously attributable to the predecessor class. The expenses for Class C shares and the predecessor share class are similar. Reflects the expense ratios as stated in the most recent prospectus, which include the impact of 0.77% of acquired fund fees and expenses. Net expenses from master portfolios are included in the acquired fund fees and expense amount. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report, which do not include acquired fund fees and expenses. The manager has contractually committed through September 30, 2018, to waive fees and/or reimburse expenses to the extent necessary to cap the Fund s Total Annual Fund Operating Expenses After Fee Waivers at 0.75% for Class A and 1.50% for Class C. After this time, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses, and extraordinary expenses are excluded from the expense cap. Without this cap, the Fund s returns would have been lower. The expense ratio paid by an investor is the net expense ratio or the Fund s Total Annual Fund Operating Expenses After Fee Waivers, as stated in the prospectus. Source: Wells Fargo Funds Management, LLC. The WealthBuilder Equity Blended Index is comprised of the following: 70% in the Russell 3000 Index and 30% in the MSCI ACWI ex USA Index (Net). You cannot invest directly in an index. The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalizationweighted index that is designed to measure the equity market performance of developed markets, excluding the United States and Canada. 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. You cannot invest directly in an index. The Russell 3000 Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index. The ten largest holdings, excluding cash and cash equivalents, are calculated based on the value of the investments divided by the total net assets of the Fund. Holdings are subject to change and may have changed since the date specified. Amounts are calculated based on the long-term investments of the Fund. These amounts are subject to change and may have changed since the date specified.

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14 12 Wells Fargo WealthBuilder Funds Performance highlights (unaudited) Wells Fargo WealthBuilder Growth Allocation Fund Investment objective The Fund seeks capital appreciation with a secondary emphasis on current income. Manager Wells Fargo Funds Management, LLC Subadviser Wells Capital Management Incorporated Portfolio managers Kandarp R. Acharya, CFA, FRM Petros Bocray, CFA, FRM Christian L. Chan, CFA Average annual total returns (%) as of November 30, Including sales charge Excluding sales charge Expense ratios 2 (%) Inception date 1 year 5 year 10 year 1 year 5 year 10 year Gross Net 3 Class A (WGAFX) Class C (WGCFX)* WealthBuilder Growth Allocation Blended Index Bloomberg Barclays U.S. Aggregate Bond Index MSCI ACWI ex USA Index (Net) Russell 3000 Index * Effective at the close of business on February 10, 2017, the Fund s existing share class, WealthBuilder Portfolio shares, was renamed and modified to assume the features and attributes of Class C. Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund s website, wellsfargofunds.com. Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index. For Class A shares, the maximum front-end sales charge is 5.75%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. 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. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest-rate changes and their impact on the Fund and its share price can be sudden and unpredictable. The use of derivatives may reduce returns and/or increase volatility. The Fund will indirectly be exposed to all of the risks of an investment in the underlying funds and will indirectly bear expenses of the underlying funds. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). The Fund is exposed to alternative investment risk, foreign investment risk, high-yield securities risk, mortgage- and asset-backed securities risk, and smaller-company investment risk. Consult the Fund s prospectus for additional information on these and other risks. Please see footnotes on page 14.

15 Performance highlights (unaudited) Wells Fargo WealthBuilder Funds 13 Wells Fargo WealthBuilder Growth Allocation Fund (continued) Ten largest holdings (%) as of November 30, Wells Fargo Factor Enhanced Large Cap Portfolio ishares S&P 500 Index ETF Wells Fargo Factor Enhanced International Portfolio Wells Fargo Disciplined U.S. Core Fund Class R Wells Fargo Core Bond Portfolio 4.64 Wells Fargo Factor Enhanced Emerging Markets Portfolio 4.28 Dodge & Cox International Stock Fund 3.88 Wells Fargo Factor Enhanced Small Cap Portfolio 3.67 Wells Fargo Endeavor Select Fund Institutional Class 3.58 Wells Fargo Large Cap Growth Fund Class R Neutral target allocation Stocks (80%) Alternative Investments (10%) Bonds (10%) Current target allocation as of November 30, Alternative Investments (5%) Bonds (8%) Effective Cash (7%) Stocks (80%) Please see footnotes on page 14.

16 14 Wells Fargo WealthBuilder Funds Performance highlights (unaudited) Wells Fargo WealthBuilder Growth Allocation Fund (continued) The inception date of Class A was February 10, 2017, and Class C was September 30, Historical performance for Class A shares prior to their inception reflects the performance of Class C shares and includes the higher expenses applicable to Class C shares. If these expenses had not been included, returns for Class A shares would be higher. Prior to February 13, 2017, historical performance shown for Class C shares reflects the performance of the Fund s predecessor WealthBuilder Portfolio share class and does not reflect the front-end sales load previously attributable to the predecessor class. The expenses for Class C shares and the predecessor share class are similar. Reflects the expense ratios as stated in the most recent prospectus, which include the impact of 0.75% of acquired fund fees and expenses. Net expenses from master portfolios are included in the acquired fund fees and expense amount. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report, which do not include acquired fund fees and expenses. The manager has contractually committed through September 30, 2018, to waive fees and/or reimburse expenses to the extent necessary to cap the Fund s Total Annual Fund Operating Expenses After Fee Waivers at 0.75% for Class A and 1.50% for Class C. After this time, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses, and extraordinary expenses are excluded from the expense cap. Without this cap, the Fund s returns would have been lower. The expense ratio paid by an investor is the net expense ratio or the Fund s Total Annual Fund Operating Expenses After Fee Waivers, as stated in the prospectus. Source: Wells Fargo Funds Management, LLC. The WealthBuilder Growth Allocation Blended Index is comprised of the following indexes: Russell 3000 Index (56%), MSCI ACWI ex USA Index (Net) (24%), and the Bloomberg Barclays U.S. Aggregate Bond Index (20%). You cannot invest directly in an index. The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index. The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalizationweighted index that is designed to measure the equity market performance of developed markets, excluding the United States and Canada. 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. You cannot invest directly in an index. The Russell 3000 Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index. The ten largest holdings, excluding cash and cash equivalents, are calculated based on the value of the investments divided by the total net assets of the Fund. Holdings are subject to change and may have changed since the date specified. Current target allocation includes the effect of any tactical futures overlay that may be in place. Effective cash is comprised of the net impact of long and/or short futures contracts held as part of dynamic risk management strategy. The amounts are subject to change and may have changed since the date specified.

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18 16 Wells Fargo WealthBuilder Funds Performance highlights (unaudited) Wells Fargo WealthBuilder Growth Balanced Fund Investment objective The Fund seeks a combination of capital appreciation and current income. Manager Wells Fargo Funds Management, LLC Subadviser Wells Capital Management Incorporated Portfolio managers Kandarp R. Acharya, CFA, FRM Petros Bocray, CFA, FRM Christian L. Chan, CFA Average annual total returns (%) as of November 30, Including sales charge Excluding sales charge Expense ratios 2 (%) Inception date 1 year 5 year 10 year 1 year 5 year 10 year Gross Net 3 Class A (WGBAX) Class C (WGBFX)* WealthBuilder Growth Balanced Blended Index Bloomberg Barclays U.S. Aggregate Bond Index MSCI ACWI ex USA Index (Net) Russell 3000 Index * Effective at the close of business on February 10, 2017, the Fund s existing share class, WealthBuilder Portfolio shares, was renamed and modified to assume the features and attributes of Class C. Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund s website, wellsfargofunds.com. Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index. For Class A shares, the maximum front-end sales charge is 5.75%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. 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. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest-rate changes and their impact on the Fund and its share price can be sudden and unpredictable. The use of derivatives may reduce returns and/or increase volatility. The Fund will indirectly be exposed to all of the risks of an investment in the underlying funds and will indirectly bear expenses of the underlying funds. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). The Fund is exposed to alternative investment risk, foreign investment risk, high-yield securities risk, mortgage- and asset-backed securities risk, and smaller-company investment risk. Consult the Fund s prospectus for additional information on these and other risks. Please see footnotes on page 18.

19 Performance highlights (unaudited) Wells Fargo WealthBuilder Funds 17 Wells Fargo WealthBuilder Growth Balanced Fund (continued) Ten largest holdings (%) as of November 30, Neutral target allocation Wells Fargo Factor Enhanced Large Cap Portfolio ishares S&P 500 Index ETF Alternative Investments (10%) Wells Fargo Core Bond Portfolio Wells Fargo Factor Enhanced International Portfolio 8.06 Vanguard Intermediate-Term Corporate Bond ETF 5.21 Wells Fargo Bloomberg Barclays US Aggregate ex-corporate Portfolio 5.20 Wells Fargo Disciplined U.S. Core Fund Class R Vanguard Short-Term Bond ETF 4.15 Wells Fargo Factor Enhanced Emerging Markets Portfolio 3.25 Dodge & Cox International Stock Fund 2.96 Stocks (60%) Bonds (30%) Current target allocation as of November 30, Alternative Investments (5%) Stocks (60%) Bonds (27%) Effective Cash (8%) Please see footnotes on page 18.

20 18 Wells Fargo WealthBuilder Funds Performance highlights (unaudited) Wells Fargo WealthBuilder Growth Balanced Fund (continued) The inception date of Class A was February 10, 2017, and Class C was October 1, Historical performance for Class A shares prior to their inception reflects the performance of Class C shares and includes the higher expenses applicable to Class C shares. If these expenses had not been included, returns for Class A shares would be higher. Prior to February 13, 2017, historical performance shown for Class C shares reflects the performance of the Fund s predecessor WealthBuilder Portfolio share class and does not reflect the front-end sales load previously attributable to the predecessor class. The expenses for Class C shares and the predecessor share class are similar. Reflects the expense ratios as stated in the most recent prospectus, which include the impact of 0.69% of acquired fund fees and expenses. Net expenses from master portfolios are included in the acquired fund fees and expense amount. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report, which do not include acquired fund fees. The manager has contractually committed through September 30, 2018, to waive fees and/or reimburse expenses to the extent necessary to cap the Fund s Total Annual Fund Operating Expenses After Fee Waivers at 0.75% for Class A and 1.50% for Class C. After this time, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses, and extraordinary expenses are excluded from the expense cap. Without this cap, the Fund s returns would have been lower. The expense ratio paid by an investor is the net expense ratio or the Fund s Total Annual Fund Operating Expenses After Fee Waivers, as stated in the prospectus. Source: Wells Fargo Funds Management, LLC. The WealthBuilder Growth Balanced Blended Index is comprised of the following indexes: Russell 3000 Index (42%), Bloomberg Barclays U.S. Aggregate Bond Index (40%), and the MSCI ACWI ex USA Index (Net) (18%). You cannot invest directly in an index. The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index. The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalizationweighted index that is designed to measure the equity market performance of developed markets, excluding the United States and Canada. 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. You cannot invest directly in an index. The Russell 3000 Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index. The ten largest holdings, excluding cash and cash equivalents, are calculated based on the value of the investments divided by the total net assets of the Portfolio. Holdings are subject to change and may have changed since the date specified. Current target allocation includes the effect of any tactical futures overlay that may be in place. Effective cash is comprised of the net impact of long and/or short futures contracts held as part of dynamic risk management strategy. The amounts are subject to change and may have changed since the date specified.

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22 20 Wells Fargo WealthBuilder Funds Performance highlights (unaudited) Wells Fargo WealthBuilder Moderate Balanced Fund Investment objective The Fund seeks a combination of current income and capital appreciation. Manager Wells Fargo Funds Management, LLC Subadviser Wells Capital Management Incorporated Portfolio managers Kandarp R. Acharya, CFA, FRM Petros Bocray, CFA, FRM Christian L. Chan, CFA Average annual total returns (%) as of November 30, Including sales charge Excluding sales charge Expense ratios 2 (%) Inception date 1 year 5 year 10 year 1 year 5 year 10 year Gross Net 3 Class A (WMBGX) Class C (WMBFX)* WealthBuilder Moderate Balanced Blended Index Bloomberg Barclays U.S. Aggregate Bond Index MSCI ACWI ex USA Index (Net) Russell 3000 Index * Effective at the close of business on February 10, 2017, the Fund s existing share class, WealthBuilder Portfolio shares, was renamed and modified to assume the features and attributes of Class C. Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. Performance shown without sales charges would be lower if sales charges were reflected. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Current month-end performance is available on the Fund s website, wellsfargofunds.com. Index returns do not include transaction costs associated with buying and selling securities, any mutual fund fees or expenses, or any taxes. It is not possible to invest directly in an index. For Class A shares, the maximum front-end sales charge is 5.75%. For Class C shares, the maximum contingent deferred sales charge is 1.00%. Performance including a contingent deferred sales charge assumes the sales charge for the corresponding time period. 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. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest-rate changes and their impact on the Fund and its share price can be sudden and unpredictable. The use of derivatives may reduce returns and/or increase volatility. The Fund will indirectly be exposed to all of the risks of an investment in the underlying funds and will indirectly bear expenses of the underlying funds. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). The Fund is exposed to alternative investment risk, foreign investment risk, high-yield securities risk, mortgage-and asset-backed securities risk, and smaller-company investment risk. Consult the Fund s prospectus for additional information on these and other risks. Please see footnotes on page 22.

23 Performance highlights (unaudited) Wells Fargo WealthBuilder Funds 21 Wells Fargo WealthBuilder Moderate Balanced Fund (continued) Ten largest holdings (%) as of November 30, Neutral target allocation Wells Fargo Core Bond Portfolio Wells Fargo Factor Enhanced Large Cap Portfolio 9.10 Alternative Investments (10%) ishares S&P 500 Index ETF 8.34 Vanguard Intermediate-Term Corporate Bond ETF 8.20 Wells Fargo Bloomberg Barclays US Aggregate ex-corporate Portfolio 8.20 Vanguard Short-Term Bond ETF 6.55 Wells Fargo Factor Enhanced International Portfolio 5.38 Wells Fargo Real Return Portfolio 3.28 Wells Fargo Disciplined U.S. Core Fund Class R Federated Institutional High Yield Bond Fund Class R Stocks (40%) Bonds (50%) Current target allocation as of November 30, Alternative Investments (5%) Stocks (40%) Bonds (47%) Effective Cash (8%) Please see footnotes on page 22.

24 22 Wells Fargo WealthBuilder Funds Performance highlights (unaudited) Wells Fargo WealthBuilder Moderate Balanced Fund (continued) The inception date of Class A was February 10, 2017, and Class C was September 30, Historical performance for Class A shares prior to their inception reflects the performance of Class C shares and includes the higher expenses applicable to Class C shares. If these expenses had not been included, returns for Class A shares would be higher. Prior to February 13, 2017, historical performance shown for Class C shares reflects the performance of the Fund s predecessor WealthBuilder Portfolio share class and does not reflect the front-end sales load previously attributable to the predecessor class. The expenses for Class C shares and the predecessor share class are similar. Reflects the expense ratios as stated in the most recent prospectus, which include the impact of 0.61% of acquired fund fees and expenses. Net expenses from master portfolios are included in the acquired fund fees and expense amount. The expense ratios shown are subject to change and may differ from the annualized expense ratios shown in the financial highlights of this report, which do not include acquired fund fees and expenses. The manager has contractually committed through September 30, 2018, to waive fees and/or reimburse expenses to the extent necessary to cap the Fund s Total Annual Fund Operating Expenses After Fee Waivers at 0.75% for Class A and 1.50% for Class C. After this time, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses, and extraordinary expenses are excluded from the expense cap. Without this cap, the Fund s returns would have been lower. The expense ratio paid by an investor is the net expense ratio or the Fund s Total Annual Fund Operating Expenses After Fee Waivers, as stated in the prospectus. Source: Wells Fargo Funds Management, LLC. The WealthBuilder Moderate Balanced Blended Index is comprised of the following indexes: Bloomberg Barclays U.S. Aggregate Bond Index (60%), Russell 3000 Index (28%), and the MSCI ACWI ex USA Index (Net) (12%). You cannot invest directly in an index. The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index. The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalizationweighted index that is designed to measure the equity market performance of developed markets, excluding the United States and Canada. 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. You cannot invest directly in an index. The Russell 3000 Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index. The ten largest holdings, excluding cash and cash equivalents, are calculated based on the value of the investments divided by the total net assets of the Portfolio. Holdings are subject to change and may have changed since the date specified. Current target allocation includes the effect of any tactical futures overlay that may be in place. Effective cash is comprised of the net impact of long and/or short futures contracts held as part of dynamic risk management strategy. The amounts are subject to change and may have changed since the date specified.