Fund Class A Class C. Wells Fargo Alternative Strategies Fund WALTX WACTX

Transcription

1 Prospectus November 1, 2017 Alternative Funds Fund Class A Class C Wells Fargo Alternative Strategies Fund WALTX WACTX As with all mutual funds, the U.S. Securities and Exchange Commission ("SEC") and the Commodity Futures Trading Commission have not approved or disapproved these securities or passed upon the accuracy or adequacy of this Prospectus. Anyone who tells you otherwise is committing a crime. Fund shares are NOT deposits or other obligations of, or guaranteed by, Wells Fargo Bank, N.A., its affiliates or any other depository institution. Fund shares are not insured or guaranteed by the U.S. Government, the Federal Deposit Insurance Corporation or any other government agency and may lose value.

2 SUPPLEMENT TO THE CLASS A PROSPECTUSES OF WELLS FARGO ALTERNATIVE FUNDS WELLS FARGO FIXED INCOME FUNDS WELLS FARGO INTERNATIONAL AND GLOBAL EQUITY FUNDS WELLS FARGO MULTI-ASSET FUNDS WELLS FARGO MUNICIPAL FIXED INCOME FUNDS WELLS FARGO SPECIALTY FUNDS WELLS FARGO TARGET DATE RETIREMENT FUNDS WELLS FARGO U.S. EQUITY FUNDS Effective on or about July 1, 2018, the following disclosure is added to the end of the section entitled "Appendix": Effective on or about July 1, 2018, shareholders purchasing Fund shares through a Morgan Stanley Wealth Management transactional brokerage account will be eligible only for the following Class A load waivers (front-end sales charge waivers), which may differ from and be more limited than those disclosed elsewhere in this Fund's prospectus or SAI. Front-end Sales Load Waivers on Class A Shares Available at Morgan Stanley Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans Morgan Stanley employee and employee-related accounts according to Morgan Stanley's account linking rules Shares purchased through reinvestment of dividends and capital gains distributions when purchasing shares of the same fund Shares purchased through a Morgan Stanley self-directed brokerage account Class C (i.e., level-load) shares that are no longer subject to a contingent deferred sales charge and are exchanged to Class A shares of the same fund pursuant to Morgan Stanley Wealth Management's share class exchange program. Shares purchased from the proceeds of redemptions within the same fund family, provided (i) the repurchase occurs within 90 days following the redemption, (ii) the redemption and purchase occur in the same account, and (iii) redeemed shares were subject to a front-end or deferred sales charge. This waiver is subject to the Funds' policy regarding frequent purchases and redemption of Fund shares, as discussed under "Account Information Frequent Purchases and Redemptions of Fund Shares" May 17, 2018 AFR058/P501SP 1

3 SUPPLEMENT TO THE CLASS A PROSPECTUSES OF WELLS FARGO ALTERNATIVE FUNDS WELLS FARGO ASSET ALLOCATION FUNDS WELLS FARGO FIXED INCOME FUNDS WELLS FARGO INTERNATIONAL AND GLOBAL EQUITY FUNDS WELLS FARGO MULTI-ASSET FUNDS WELLS FARGO MUNICIPAL FIXED INCOME FUNDS WELLS FARGO SPECIALTY FUNDS WELLS FARGO TARGET DATE RETIREMENT FUNDS WELLS FARGO U.S. EQUITY FUNDS (each a "Fund", together the "Funds") Effective June 1, 2018, the following disclosure is added to the end of the section entitled "Appendix": Automatic Exchange of Class C Shares Available at Ameriprise Financial Class C shares will automatically exchange to Class A shares in the month of the 10-year anniversary of the purchase date. Effective June 1, 2018, shareholders purchasing Fund shares through an Ameriprise Financial platform or account will be eligible only for the following Class A load waivers (front-end sales charge waivers), which may differ from those disclosed elsewhere in this Fund's prospectus or SAI. Front-end Sales Load Waivers on Class A Shares Available at Ameriprise Financial Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs or SAR-SEPs. Shares purchased through an Ameriprise Financial investment advisory program (if an Advisory or similar share class for such investment advisory program is not available). Shares purchased by third party investment advisors on behalf of their advisory clients through Ameriprise Financial's platform (if an Advisory or similar share class for such investment advisory program is not available). Shares purchased through reinvestment of distributions and dividend reinvestment when purchasing shares of the same Fund (but not any other fund within the same fund family). Shares exchanged from Class C shares of the same fund in the month of or following the 10-year anniversary of the purchase date. To the extent that this prospectus elsewhere provides for a waiver with respect to such shares following a shorter holding period, that waiver will apply to exchanges following such shorter period. To the extent that this prospectus elsewhere provides for a waiver with respect to exchanges of Class C shares for load-waived shares, that waiver will also apply to such exchanges. Employees and registered representatives of Ameriprise Financial or its affiliates and their immediate family members. Shares purchased by or through qualified accounts (including IRAs, Coverdell Education Savings Accounts, 401(k)s, 403(b) TSCAs subject to ERISA and defined benefit plans) that are held by a covered family member, defined as an Ameriprise financial advisor and/or the advisor's spouse, advisor's lineal ascendant (mother, father, grandmother, grandfather, great grandmother, great grandfather), advisor's lineal descendant (son, step-son, daughter, step-daughter, grandson, granddaughter, great grandson, great granddaughter) or any spouse of a covered family member who is a lineal descendant. Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within 90 days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e. Rights of Reinstatement). Subject to the Fund's policy regarding frequent purchases and redemptions of Fund shares, you may not be able to repurchase shares for the first 30 days after your redemption. April 9, 2018 MIR048/P1101SP 1

4 SUPPLEMENT TO THE PROSPECTUSES and STATEMENT OF ADDITIONAL INFORMATION OF WELLS FARGO ALTERNATIVE FUNDS Wells Fargo Alternative Strategies Fund (the Fund ) Effective January 19, 2018, Passport Capital, LLC ( Passport Capital ) will no longer be listed as a subadviser to the Fund. All references to Passport Capital in the Fund s prospectuses and Statement of Additional Information are hereby removed. January 19, 2018 ALIT018/P704SP

5 SUPPLEMENT TO THE PROSPECTUSES, SUMMARY PROSPECTUSES and STATEMENT OF ADDITIONAL INFORMATION OF WELLS FARGO ALTERNATIVE FUNDS Wells Fargo Alternative Strategies Fund (the Fund ) Effective on or about February 15, 2018 (or such earlier date as may be agreed to by the parties), Passport Capital, LLC ( Passport Capital ) will no longer be listed as a sub-adviser to the Fund. At that time, all references to Passport Capital in the Fund s prospectuses, summary prospectuses and Statement of Additional Information are hereby removed. December 22, 2017 ALAM127/P703SP

6 SUPPLEMENT TO THE PROSPECTUSES, SUMMARY PROSPECTUSES and STATEMENT OF ADDITIONAL INFORMATION OF WELLS FARGO ALTERNATIVE FUNDS Wells Fargo Alternative Strategies Fund (the Fund ) Effective on or about November 23, 2017 (or such earlier date as may be agreed to by the parties), Pine River Capital Management L.P. ( Pine River ) will no longer be listed as a sub-adviser to the Fund. At that time, all references to Pine River in the Fund s prospectuses, summary prospectuses and Statement of Additional Information are hereby removed. September 26, 2017 ALR097/P701SP2

7 Table of Contents Fund Summary Alternative Strategies Fund Summary Details About the Fund Key Fund Information Alternative Strategies Fund Description of Principal Investment Risks Portfolio Holdings Information Pricing Fund Shares Management of the Fund The Manager The Sub-Advisers and Portfolio Managers Multi-Manager Arrangement Account Information Share Class Eligibility Share Class Features Reductions and Waivers of Sales Charges Compensation to Financial Professionals and Intermediaries Buying and Selling Fund Shares Exchanging Fund Shares Frequent Purchases and Redemptions of Fund Shares Account Policies Distributions Other Information Taxes Financial Highlights Appendix A - Sales Charge Reductions and Waivers for Certain Intermediaries Appendix A - Sales Charge Reductions and Waivers for Certain Intermediaries

8 Alternative Strategies Fund Summary Investment Objective The Fund seeks long-term capital appreciation. Fees and Expenses These tables are intended to help you understand the various costs and expenses you will pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the aggregate in specified classes of certain Wells Fargo Funds. More information about these and other discounts is available from your financial professional and in "Share Class Features" and "Reductions and Waivers of Sales Charges" on pages 20 and 21 of the Prospectus and "Additional Purchase and Redemption Information" on page 58 of the Statement of Additional Information. Investors who purchase through certain intermediaries may be subject to different sales charge discounts than those outlined shares in these sections. Please see Appendix A on page 33 for further information. Shareholder Fees (fees paid directly from your investment) Class A Class C Maximum sales charge (load) imposed on purchases (as a percentage of offering price) 5.75% None Maximum deferred sales charge (load) (as a percentage of offering price) None % 1. Investments of $1 million or more are not subject to a front-end sales charge but generally will be subject to a deferred sales charge of 1.00% if redeemed within 18 months from the date of purchase. Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) 1 Class A Class C Management Fees 1.75% 1.75% Distribution (12b-1) Fees 0.00% 0.75% Other Expenses 0.77% 0.77% Dividend and Interest Expense on Short Positions and Borrowings 0.73% 0.73% Acquired Fund Fees and Expenses 0.10% 0.10% Total Annual Fund Operating Expenses 3.35% 4.10% Fee Waivers (0.37)% (0.37)% Total Annual Fund Operating Expenses After Fee Waivers % 3.73% 1. Expenses have been adjusted as necessary from amounts incurred during the Fund's most recent fiscal year to reflect current fees and expenses. 2. The Manager has contractually committed through October 31, 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 2.22% for Class A and 2.97% for Class C. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses, expenses from dividend and interest on short positions, and extraordinary expenses are excluded from the expense cap. Acquired fund fees and expenses incurred by investments made by The Rock Creek Group, LP, a sub-adviser of the Fund, are included in the expense cap. 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. Example of Expenses The example below is intended to help you compare the costs of investing in the Fund with the costs of investing in other mutual funds. The example assumes a $10,000 initial investment, 5% annual total return, and that fees and expenses remain the same as in the tables above. To the extent that the Manager is waiving fees or reimbursing expenses, the example assumes that such waiver or reimbursement will only be in place through the date noted above. Although your actual costs may be higher or lower, based on these assumptions your costs would be: Assuming Redemption at End of Period Assuming No Redemption After: Class A Class C Class C 1 Year $859 $475 $375 3 Years $1,514 $1,213 $1,213 5 Years $2,190 $2,066 $2, Years $3,982 $4,267 $4,267 Wells Fargo Funds - Alternative Funds 2

9 Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 237% of the average value of its portfolio. Principal Investment Strategies In pursuing its investment objective, the Fund seeks to achieve relatively low sensitivity and low volatility relative to major equity markets, primarily by allocating assets across a number of alternative investment strategies, each of which may invest in a broad array of security types. These alternative investment strategies include equity hedged, event driven, global macro and relative value strategies. The Fund may use all or some of these strategies to varying degrees, depending on market conditions, and may add additional strategies in the future. The Fund employs one or more subadvisers to execute each of the Fund's strategies. In implementing the alternative investment strategies listed above, the Fund may take long and/or short positions in a broad range of investments including, but not limited to, equity securities of any market capitalization and debt securities of any quality or maturity (including loans) of U.S. and foreign issuers (including emerging markets issuers), convertible securities, and shares of other investment companies. The Fund may also take long and/or short positions in currency and other derivatives such as futures, options, swaps, and forwards, for both hedging and speculative purposes. The Fund may purchase the common or preferred stocks of a subsidiary of the Fund that invests directly or indirectly in commodity- linked derivatives. The Fund may borrow money to purchase additional securities or to maintain cash to offset short positions. Certain of these securities and the use of these investment techniques create leverage. As a result, the sum of the Fund's investment exposures at times may significantly exceed the amount of the Fund's net assets. These exposures may vary over time. The Fund uses a unique top-down approach to formulate an outlook on different asset classes, strategies and regions over a variety of time horizons. This outlook is the primary driver behind the strategy, asset, and sub-adviser allocation decisions, and may change at any time. The factors considered in making allocation decisions include macro-economic research, the actions of central banks and policy makers, and the opinions of leading hedge fund managers, analysts, and other market participants, and leading economists. The alternative strategies that may be employed by the Fund's sub-advisers include: Equity Hedged Strategies: Which take long and short positions in equities (and related instruments) believed to be under- and overvalued, respectively. Short positions may also be used solely to hedge broad market exposure. Event Driven Strategies: Which seek to capitalize on the movements in security prices of companies currently or prospectively involved in a wide variety of corporate transactions. Global Macro Strategies: Which analyze economic variables in an attempt to forecast future movements in equity, fixed income, currency, and commodity markets. Relative Value Strategies: Which seek to identify and capitalize on valuation discrepancies between related financial instruments rather than on the direction of the general market. Principal Investment Risks An investment in the Fund may lose money, is not a deposit of Wells Fargo Bank, N.A. or its affiliates, is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency, and is primarily subject to the risks briefly summarized below. Borrowing Risk. If a Fund borrows money to purchase securities or to cover a short position and the Fund's investments decrease in value or the securities the Fund has shorted increase in value, the Fund's losses will be greater than if the Fund did not borrow money for investment purposes. In addition, if the return on an investment purchased with borrowed funds, or shorted and covered with borrowed funds, is not sufficient to cover the cost of borrowing, then the net income of the Fund would be less than if borrowing were not used. Convertible Securities Risk. A convertible security has characteristics of both equity and debt securities and, as a result, is exposed to risks that are typically associated with both types of securities. The market value of a convertible security tends to decline as interest rates increase but also tends to reflect changes in the market price of the common stock of the issuing company. 3 Wells Fargo Funds - Alternative Funds

10 Credit Risk. The issuer or guarantor of a debt security may be unable or perceived to be unable to pay interest or repay principal when they become due, which could cause the value of an investment to decline and a Fund to lose money. Derivatives Risk. The use of derivatives, such as futures, options and swap agreements, can lead to losses, including those magnified by leverage, particularly when derivatives are used to enhance return rather than mitigate risk. Certain derivative instruments may be difficult to sell when the portfolio manager believes it would be appropriate to do so, or the other party to a derivative contract may be unwilling or unable to fulfill its contractual obligations. Emerging Markets Risk. Emerging market securities typically present even greater exposure to the risks described under "Foreign Investment Risk" and may be particularly sensitive to global economic conditions. Emerging market securities are also typically less liquid than securities of developed countries and could be difficult to sell, particularly during a market downturn. Event Driven Strategies Risk. A Fund that invests in securities based on anticipated events, such as bankruptcies, mergers, reorganizations or other events, may incur losses if the events do not occur as anticipated (including on the terms originally proposed), when anticipated, or at all, or if they are perceived to be less likely to occur. Foreign Currency Contracts Risk. A Fund that enters into forwards or other foreign currency contracts, which are a type of derivative, is subject to the risk that the portfolio manager may be incorrect in his or her judgment of future exchange rate changes. Foreign Investment Risk. Foreign investments may be subject to lower liquidity, greater price volatility and risks related to adverse political, regulatory, market or economic developments. Foreign investments may involve exposure to changes in foreign currency exchange rates and may be subject to higher withholding and other taxes. Futures Contracts Risk. A Fund that uses futures contracts, which are a type of derivative, is subject to the risk of loss caused by unanticipated market movements. In addition, there may at times be an imperfect correlation between the movement in the prices of futures contracts and the value of their underlying instruments or indexes and there may at times not be a liquid secondary market for certain futures contracts. High Yield Securities Risk. High yield securities and unrated securities of similar credit quality (commonly known as "junk bonds") have a much greater risk of default or of not returning principal and their values tend to be more volatile than higher-rated securities with similar maturities. Interest Rate Risk. When interest rates (which are currently near historic lows) rise, the value of debt securities tends to fall. When interest rates decline, interest that a Fund is able to earn on its investments in debt securities may also decline, but the value of those securities may increase. Growth/Value Investing Risk. Securities that exhibit growth or value characteristics tend to perform differently and shift into and out of favor with investors depending on changes in market and economic sentiment and conditions. Loan Risk. Loans may be unrated, less liquid and more difficult to value than traditional debt securities. The highly leveraged capital structure of the borrowers in such transactions may make such loans especially vulnerable to adverse changes in financial, economic or market conditions. A Fund may be unable to sell loans at a desired time or price. The Fund may also not be able to control amendments, waivers or the exercise of any remedies that a lender would have under a direct loan and may assume liability as a lender. Management Risk. Investment decisions, techniques, analyses or models implemented by a Fund's manager or subadviser in seeking to achieve the Fund's investment objective may not produce the returns expected, may cause the Fund's shares to lose value or may cause the Fund to underperform other funds with similar investment objectives. Market Risk. The values of, and/or the income generated by, securities held by a Fund may decline due to general market conditions or other factors, including those directly involving the issuers of such securities. Security markets are volatile and may decline significantly in response to adverse issuer, regulatory, political, or economic developments. Different sectors of the market and different security types may react differently to such developments. Mortgage- and Asset-Backed Securities Risk. Mortgage- and asset-backed securities may decline in value and become less liquid when defaults on the underlying mortgages or assets occur and may exhibit additional volatility in periods of rising interest rates. Rising interest rates tend to extend the duration of these securities, making them more sensitive to changes in interest rates than instruments with fixed payment schedules. When interest rates decline or are low, the prepayment of mortgages or assets underlying such securities can reduce a Fund's returns. Multi-Manager Management Risk. A Fund with multiple sub-advisers is subject to the risk that the investment decisions made by a sub-adviser may conflict with those of another sub-adviser. Wells Fargo Funds - Alternative Funds 4

11 New Fund Risk. The Fund is a new fund, with a limited or no operating history and a small asset base. There can be no assurance that the Fund will grow to or maintain a viable size. Due to the Fund's small asset base, certain of the Fund's expenses and its portfolio transaction costs may be higher than those of a fund with a larger asset base. To the extent that the Fund does not grow to or maintain a viable size, it may be liquidated, and the expenses, timing and tax consequences of such liquidation may not be favorable to some shareholders. Options Risk. A Fund that purchases options, which are a type of derivative, is subject to the risk of a loss of premiums without offsetting gains. A Fund that writes options receives a premium that may be small relative to the loss realized in the event of adverse changes in the value of the underlying instruments. Regulatory Risk. Pursuant to section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and certain rules promulgated thereunder (collectively known as the "Volcker Rule"), if the Manager and/or its affiliates own 25% or more of the outstanding shares of the Fund more than three years after the Fund's inception date (or such longer period as may be permitted by the Federal Reserve), the Fund will be subject to restrictions on trading that will adversely impact the Fund's ability to execute its investment strategy. Should this occur, the Fund may decide to liquidate, or the Manager and/or its affiliates may be required to reduce their ownership interests in the Fund, either of which may result in gains or losses, increased transaction costs and adverse tax consequences. Short Sales Risk. Short selling is generally considered speculative, has the potential for unlimited loss and may involve leverage, which can magnify a Fund's exposure to assets that decline in value and increase the volatility of the Fund's net asset value. Smaller Company Securities Risk. Securities of companies with smaller market capitalizations tend to be more volatile and less liquid than those of larger companies. Subsidiary Risk. The value of a Fund's investment in its Cayman Islands subsidiary may be adversely impacted by the risks associated with the underlying derivatives investments of the subsidiary. In addition, changes in the laws or regulations of the United States or the Cayman Islands, under which the Fund and the subsidiary, respectively, are organized, could result in the inability of the Fund or the subsidiary to continue to operate as described in the prospectus and could negatively affect the Fund and its shareholders. Swaps Risk. Depending on their structure, swap agreements and options to enter into swap agreements ("swaptions"), both of which are types of derivatives, may increase or decrease a Fund's exposure to long- or short-term interest rates, foreign currency values, mortgage-backed securities, corporate borrowing rates, or credit events or other reference points such as security prices or inflation rates. U.S. Government Obligations Risk. U.S. Government obligations may be adversely impacted by changes in interest rates, and securities issued or guaranteed by U.S. Government agencies or government-sponsored entities may not be backed by the full faith and credit of the U.S. Government. 5 Wells Fargo Funds - Alternative Funds

12 Performance The following information provides some indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year. The Fund's average annual total returns are compared to the performance of one or more indices. Past performance before and after taxes is no guarantee of future results. Current month-end performance is available on the Fund's website at wellsfargofunds.com. Calendar Year Total Returns for Class A as of 12/31 each year (returns do not reflect sales charges and would be lower if they did) 3% 2% 1% 0% -1% Highest Quarter: 1st Quarter % Lowest Quarter: 3rd Quarter % Year-to-date total return as of 9/30/2017 is +5.52% -2% -3% % Average Annual Total Returns for the periods ended 12/31/2016 (returns reflect applicable sales charges) Inception Date of Share Class 1 Year 5 Year Performance Since Inception Class A (before taxes) 4/30/ % N/A -1.14% Class A (after taxes on distributions) 4/30/ % N/A -1.55% Class A (after taxes on distributions and the sale of Fund Shares) 4/30/ % N/A -0.99% Class C (before taxes) 4/30/ % N/A 0.32% Bloomberg Barclays U.S. Aggregate Bond Index (reflects no deduction for fees, expenses, or taxes) 2.65% N/A 2.38% HFRI Fund of Funds Composite Index (reflects no deduction for fees, expenses, or taxes) 0.51% N/A 1.37% After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state, local or foreign taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns shown are not relevant to tax-exempt investors or investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) Plans or Individual Retirement Accounts. After-tax returns are shown for only one class of shares. After-tax returns for any other class will vary. Wells Fargo Funds - Alternative Funds 6

13 Fund Management Manager Sub-Advisers Portfolio Manager, Title/Managed Since Wells Fargo Funds Management, LLC The Rock Creek Group, LP (Allocates assets across strategies and Sub- Advisers) Chilton Investment Company, LLC (Employs an Equity Hedged Strategy) Ellington Global Asset Management, LLC (Employs both a Relative Value and an Event Driven Strategy) Mellon Capital Management Corporation (Employs a Global Macro Strategy) Passport Capital, LLC (Employs an Equity Hedged Strategy) Pine River Capital Management L.P. (Employs a Relative Value Strategy) Sirios Capital Management, L.P. (Employs an Equity Hedged Strategy) Wellington Management Company LLP (Employs an Equity Hedged Strategy) Sudhir Krishnamurthi, Portfolio Manager / 2014 Kenneth LaPlace, Portfolio Manager / 2014 Ronald van der Wouden, Portfolio Manager / 2014 Richard L. Chilton, Jr., Portfolio Manager / 2014 Robert Kinderman, Portfolio Manager / 2016 Vassilis Dagioglu, Portfolio Manager / 2014 James Stavena, Portfolio Manager / 2016 Torrey Zaches, Portfolio Manager / 2016 John Burbank, Portfolio Manager / 2014 Joseph Bishop, Portfolio Manager / 2016 John F. Brennan, Jr., Portfolio Manager / 2014 Kent M. Stahl, CFA, Portfolio Manager / 2014 Gregg R. Thomas, CFA, Portfolio Manager / 2014 Purchase and Sale of Fund Shares In general, you can buy or sell shares of the Fund online or by mail, phone or wire on any day the New York Stock Exchange is open for regular trading. You also may buy and sell shares through a financial professional. Minimum Investments Minimum Initial Investment Regular Accounts: $1,000 IRAs, IRA Rollovers, Roth IRAs: $250 UGMA/UTMA Accounts: $50 Employer Sponsored Retirement Plans: No Minimum Minimum Additional Investment Regular Accounts, IRAs, IRA Rollovers, Roth IRAs: $100 UGMA/UTMA Accounts: $50 Employer Sponsored Retirement Plans: No Minimum To Buy or Sell Shares Mail: Wells Fargo Funds P.O. Box 8266 Boston, MA Online: wellsfargofunds.com Phone or Wire: Contact your financial professional. Tax Information Any distributions you receive from the Fund may be taxable as ordinary income or capital gains, except when your investment is in an IRA, 401(k) or other tax advantaged investment plan. However, subsequent withdrawals from such a tax advantaged investment plan may be subject to federal income tax. You should consult your tax adviser about your specific tax situation. Payments to Intermediaries If you purchase a Fund through an intermediary, the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the intermediary and your financial professional to recommend the Fund over another investment. Consult your financial professional or visit your intermediary's website for more information. 7 Wells Fargo Funds - Alternative Funds

14 Key Fund Information This Prospectus contains information about one or more Funds within the Wells Fargo Funds family and is designed to provide you with important information to help you with your investment decisions. Please read it carefully and keep it for future reference. In this Prospectus, "we" generally refers to Wells Fargo Funds Management, LLC, the relevant sub-adviser(s), if applicable, or the portfolio manager(s). "We" may also refer to a Fund's other service providers. "You" refers to the shareholder or potential investor. Investment Objective and Principal Investment Strategies The investment objective of the Fund in this Prospectus is non-fundamental; that is, it can be changed by a vote of the Board of Trustees ("Board") alone. The objective and strategies description for the Fund tells you: what the Fund is trying to achieve; and how we intend to invest your money. This section also provides a summary of the Fund's principal investment strategies, policies and practices. Unless otherwise indicated, these principal investment strategies, policies and practices apply on an ongoing basis. Principal Investment Risks This section lists the principal investment risks for the Fund. A complete description of these and other risks is found in the "Description of Principal Investment Risks" section. It is possible to lose money by investing in the Fund. Wells Fargo Funds - Alternative Funds 8

15 Alternative Strategies Fund Investment Objective The Fund seeks long-term capital appreciation. The Fund's Board of Trustees can change this investment objective without a shareholder vote. Principal Investment Strategies In pursuing its investment objective, the Fund seeks to achieve relatively low sensitivity and low volatility relative to major equity markets, primarily by allocating assets across a number of alternative investment strategies, each of which may invest in a broad array of security types. These alternative investment strategies include equity hedged, event driven, global macro and relative value strategies. The Fund may use all or some of these strategies to varying degrees, depending on market conditions, and may add additional strategies in the future. The Fund employs one or more subadvisers to execute each of the Fund's strategies. In implementing the alternative investment strategies listed above, the Fund may take long and/or short positions in a broad range of investments including, but not limited to, equity securities of any market capitalization and debt securities of any quality or maturity (including loans) of U.S. and foreign issuers (including emerging markets issuers), convertible securities, and shares of other investment companies. The Fund may also take long and/or short positions in currency and other derivatives such as futures, options, swaps, and forwards, for both hedging and speculative purposes. The Fund may purchase the common or preferred stocks of a subsidiary of the Fund that invests directly or indirectly in commodity- linked derivatives. The Fund may borrow money to purchase additional securities or to maintain cash to offset short positions. Certain of these securities and the use of these investment techniques create leverage. As a result, the sum of the Fund's investment exposures at times may significantly exceed the amount of the Fund's net assets. These exposures may vary over time. The Fund uses a unique top-down approach to formulate an outlook on different asset classes, strategies and regions over a variety of time horizons. This outlook is the primary driver behind the strategy, asset, and sub-adviser allocation decisions, and may change at any time. The factors considered in making allocation decisions include macro-economic research, the actions of central banks and policy makers, and the opinions of leading hedge fund managers, analysts, and other market participants, and leading economists. The alternative strategies that may be employed by the Fund's sub-advisers include: Equity Hedged Strategies. Equity hedged strategies combine core long and short positions in stocks, stock indices, or derivatives related to the equity markets. Equity hedged sub-advisers attempt to generate long-term capital appreciation by developing and actively managing equity portfolios that include both long and short positions. In general, equity hedged sub-advisers buy securities that they expect to outperform or that they believe are undervalued, and sell short securities that they believe will underperform, or that they believe are overvalued. Equity hedged sub-advisers may also sell short securities, as well as derivative instruments in the form of index ETFs, futures, options, and other baskets of securities, in order to hedge broad market exposure or manage overall beta to equity markets. Within this framework, equity hedged sub-advisers may exhibit a range of styles, including longer-term buy-and-hold investing and/or shorterterm trading styles. These sub-advisers will generally be "long-biased" meaning they will hold a greater percentage of the portfolio in long positions rather than short positions. Event Driven Strategies. Event driven strategies seek to earn excess return through the purchase and sale of securities based on anticipated outcomes of company-specific or transaction-specific situations, such as spin-offs, mergers and acquisitions, liquidations, reorganizations, bankruptcies, recapitalizations, and share buybacks. Event driven strategies include, among others, the following: Merger Arbitrage: Merger arbitrage sub-advisers seek to profit by taking advantage of differences between the current market price of a security and its expected future value based on the anticipated outcome of a potential merger. Distressed Securities: Distressed securities sub-advisers generally invest in securities of financially troubled companies (such as, companies involved in bankruptcies, exchange offers, workouts, financial reorganizations, and other special credit event related transactions). Special Situations: Special situations sub-advisers seek to profit by capturing discrepancies in valuation between the current market price of a security and its expected future value based on the occurrence of a corporate restructuring, reorganization or a significant alteration in the company s strategy or product mix, among others. Global Macro Strategies. Global macro strategies involve investing in equity, fixed-income, foreign exchange or commodity markets around the world based on underlying macroeconomic fundamentals. Monetary policy shifts, fiscal policy shifts, gross domestic product growth or inflation all may be considered in developing a market view. Global 9 Wells Fargo Funds - Alternative Funds

16 macro sub-advisers establish opportunistic long or short market positions to seek to benefit from anticipated market moves. Global macro sub-advisers tend to make significant use of derivatives and leverage. These strategies include, among others, the following: Discretionary: Discretionary macro strategy involves constructing long and short market positions around fundamental macro-economic or technical views. The main distinction of this strategy is that it tends to be focused on one or two subsets of global capital markets. For example, a discretionary sub-adviser may focus on foreign exchange and bond trading in the Group of Ten (G-10) markets. Other sub-advisers in this category may focus on less efficient markets, such as emerging markets, where they believe that it is possible to maintain an information edge over the market. Systematic: Systematic macro strategy involves the quantitative trading of listed financial or commodity futures and currencies in markets around the world. Systematic sub-advisers tend to utilize sophisticated technical models to analyze price and market data to identify trends or price reversals across a broad range of markets. Derivative instruments are generally used by systematic sub-advisers to leverage their portfolios. Relative Value Strategies. Relative value strategies include a range of different investment styles. These strategies seek to generate profits by exploiting the difference in price between related instruments, rather than because of the direction of the market. Generally, relative value sub-advisers buy a position in one instrument and sell an equivalent amount of another instrument with the expectation that the prices of the two instruments are not only historically related but also that they have deviated from their historical trading patterns. Profits may be generated if this unusual price deviation diminishes, and the prices of the two related instruments return to their historical trading patterns. Relative value strategies, among others include the following: Equity Market Neutral: Equity market neutral strategy seeks to generate profits through the successful selection of equity securities while reducing or eliminating the effects of market-wide or, in some cases, industry- or sector-wide price movements by simultaneously taking long and short positions in or with respect to matched equities in approximately equal volumes. Convertible Arbitrage: Convertible arbitrage strategy generally involves the simultaneous purchase and short sale of convertible bond issues of the same issuer. Often, the arbitrage involves the purchase of a convertible bond issued by the issuer and the short sale of that issuer s common stock. Sub-advisers may also seek to hedge out any interest rate risk as needed. We may actively trade portfolio securities, which may lead to higher transaction costs that may affect the Fund's performance. In addition, active trading of portfolio securities may lead to higher taxes if your shares are held in a taxable account. The Fund may hold some of its assets in cash or in money market instruments, including U.S. Government obligations, shares of other mutual funds and repurchase agreements, or make other short-term investments for purposes of maintaining liquidity or for short-term defensive purposes when we believe it is in the best interests of the shareholders to do so. During such periods, the Fund may not achieve its objective. Principal Investment Risks The Fund is primarily subject to the risks mentioned below. Borrowing Risk Convertible Securities Risk Credit Risk Derivatives Risk Emerging Markets Risk Event Driven Strategies Risk Foreign Currency Contracts Risk Foreign Investment Risk Futures Contracts Risk High Yield Securities Risk Interest Rate Risk Investment Style Risk Loan Risk Management Risk Market Risk Mortgage- and Asset-Backed Securities Risk Multi-Manager Management Risk New Fund Risk Options Risk Regulatory Risk Short Sales Risk Smaller Company Securities Risk Subsidiary Risk Swaps Risk U.S. Government Obligations Risk These and other risks could cause you to lose money in your investment in the Fund and could adversely affect the Fund's net asset value and total return. These risks are described in the "Description of Principal Investment Risks" section. Wells Fargo Funds - Alternative Funds 10

17 Portfolio Asset Allocation The following table provides the Fund's current target allocation ranges. The Fund may change these allocation ranges at any time, may choose to not allocate to one or more investment strategies and may add additional strategies in the future. Investment Strategies Target Allocation Ranges Equity Hedged 25-55% Event Driven 10-40% Global Macro 10-25% Relative Value 10-35% 11 Wells Fargo Funds - Alternative Funds

18 Description of Principal Investment Risks Understanding the risks involved in mutual fund investing will help you make an informed decision that takes into account your risk tolerance and preferences. The risks that are most likely to have a material effect on a particular Fund as a whole are called "principal risks." The principal risks for the Fund have been previously identified and are described below. Additional information about the principal risks is included in the Statement of Additional Information. Borrowing Risk. If a Fund borrows money to purchase securities or to cover a short position and the Fund's investments decrease in value or the securities the Fund has shorted increase in value, the Fund's losses will be greater than if the Fund did not borrow money for investment purposes. In addition, if the return on an investment purchased with borrowed funds, or shorted and covered with borrowed funds, is not sufficient to cover the cost of borrowing, then the net income of the Fund would be less than if borrowing were not used. Convertible Securities Risk. A convertible security has characteristics of both equity and debt securities and, as a result, is exposed to risks that are typically associated with both types of securities. The market value of a convertible security tends to decline as interest rates increase but also tends to reflect changes in the market price of the common stock of the issuing company. A convertible security is also exposed to the risk that an issuer is unable to meet its obligation to make dividend or interest and principal payments when due as a result of changing financial or market conditions. In the event of a liquidation of the issuer, holders of a convertible security would generally be paid only after holders of any senior debt obligations. A Fund may be forced to convert a convertible security before it would otherwise choose to do so, which may decrease the Fund's return. Credit Risk. The issuer or guarantor of a debt security may be unable or perceived to be unable to pay interest or repay principal when they become due. In these instances, the value of an investment could decline and the Fund could lose money. Credit risk increases as an issuer's credit quality declines. Derivatives Risk. The use of derivatives, such as futures, options and swap agreements, presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. The use of derivatives can lead to losses because of adverse movements in the price or value of the derivatives' underlying assets, indexes or rates and the derivatives themselves, which may be magnified by certain features of the derivatives. These risks are heightened when derivatives are used to enhance a Fund's return or as a substitute for a position or security, rather than solely to hedge (or mitigate) the risk of a position or security held by the Fund. The success of a derivative strategy will be affected by the portfolio manager's ability to assess and predict market or economic developments and their impact on the derivatives' underlying assets, indexes or rates and the derivatives themselves. Certain derivative instruments may become illiquid and, as a result, may be difficult to sell when the portfolio manager believes it would be appropriate to do so. Certain derivatives create leverage, which can magnify the impact of a decline in the value of their underlying assets, indexes or rates and increase the volatility of the Fund's net asset value. Certain derivatives (e.g., over-the-counter swaps) are also subject to the risk that the counterparty to the derivative contract will be unwilling or unable to fulfill its contractual obligations, which may cause a Fund to lose money, suffer delays or incur costs arising from holding or selling an underlying asset. Changes in laws or regulations may make the use of derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the use, value or performance of derivatives. Emerging Markets Risk. Emerging market securities typically present even greater exposure to the risks described under "Foreign Investment Risk" and may be particularly sensitive to global economic conditions. For example, emerging market countries are typically more dependent on exports and are therefore more vulnerable to recessions in other countries. Emerging markets tend to have less developed legal and financial systems and a smaller market capitalization than markets in developed countries. Some emerging markets are subject to greater political instability. Additionally, emerging markets may have more volatile currencies and be more sensitive than developed markets to a variety of economic factors, including inflation. Emerging market securities are also typically less liquid than securities of developed countries and could be difficult to sell, particularly during a market downturn. Event Driven Strategies Risk. A Fund that invests in securities based on anticipated events, such as bankruptcies, mergers, reorganizations or other events, may incur losses if the events do not occur as anticipated (including on the terms originally proposed), when anticipated, or at all, or if they are perceived to be less likely to occur. For example, if the Fund invests in securities in anticipation of a merger and the deal is terminated prior to closing, the Fund is likely to suffer losses. Foreign Currency Contracts Risk. A Fund that enters into forwards or other foreign currency contracts, which are a type of derivative, is subject to the risk that the portfolio manager may be incorrect in his or her judgment of future exchange rate changes. The Fund's gains from positions in foreign currency contracts may accelerate and/or lead to recharacterization of the Fund's income or gains and its distributions to shareholders. The Fund's losses from such Wells Fargo Funds - Alternative Funds 12

19 positions may also lead to recharacterization of the Fund's income and its distributions to shareholders and may cause a return of capital to Fund shareholders. Foreign Investment Risk. Foreign investments may be subject to lower liquidity, greater price volatility and risks related to adverse political, regulatory, market or economic developments. Foreign companies may be subject to significantly higher levels of taxation than U.S. companies, including potentially confiscatory levels of taxation, thereby reducing the earnings potential of such foreign companies. Foreign investments may involve exposure to changes in foreign currency exchange rates. Such changes may reduce the U.S. dollar value of the investments. Foreign investments may be subject to additional risks such as potentially higher withholding and other taxes, and may also be subject to greater trade settlement, custodial, and other operational risks than domestic investments. Certain foreign markets may also be characterized by less stringent investor protection and disclosure standards. Futures Contracts Risk. A Fund that uses futures contracts, which are a type of derivative, is subject to the risk of loss caused by unanticipated market movements. In addition, there may at times be an imperfect correlation between the movement in the prices of futures contracts and the value of their underlying instruments or indexes and there may at times not be a liquid secondary market for certain futures contracts. High Yield Securities Risk. High yield securities and unrated securities of similar credit quality (commonly known as "junk bonds") have a much greater risk of default (or in the case of bonds currently in default, of not returning principal) and their values tend to be more volatile than higher-rated securities with similar maturities. Additionally, these securities tend to be less liquid and more difficult to value than higher-rated securities. Interest Rate Risk. When interest rates (which are currently near historic lows) rise, the value of debt securities tends to fall. The longer the terms of the debt securities held by a Fund, the more the Fund is subject to this risk. If interest rates decline, interest that the Fund is able to earn on its investments in debt securities may also decline, which could cause the Fund to reduce the dividends it pays to shareholders, but the value of those securities may increase. Some debt securities give the issuers the option to call, redeem or prepay the securities before their maturity dates. If an issuer calls, redeems or prepays a debt security during a time of declining interest rates, the Fund might have to reinvest the proceeds in a security offering a lower yield, and therefore might not benefit from any increase in value as a result of declining interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the debt securities market, reduced liquidity for certain Fund investments and an increase in Fund redemptions. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. Growth/Value Investing Risk. Securities that exhibit certain characteristics, such as growth characteristics or value characteristics, tend to perform differently and shift into and out of favor with investors depending on changes in market and economic sentiment and conditions. As a result, a Fund's performance may at times be worse than the performance of other mutual funds that invest more broadly or in securities that exhibit different characteristics. Loan Risk. Loans may be unrated, less liquid and more difficult to value than traditional debt securities. Loans may be made to finance highly leveraged corporate operations or acquisitions. The highly leveraged capital structure of the borrowers in such transactions may make such loans especially vulnerable to adverse changes in financial, economic or market conditions. Loans generally are subject to restrictions on transfer, and only limited opportunities may exist to sell such loans in secondary markets. As a result, a Fund may be unable to sell loans at a desired time or price. If the Fund acquires only an assignment or a participation in a loan made by a third party, the Fund may not be able to control amendments, waivers or the exercise of any remedies that a lender would have under a direct loan and may assume liability as a lender. Management Risk. Investment decisions, techniques, analyses or models implemented by a Fund's manager or subadviser in seeking to achieve the Fund's investment objective may not produce the returns expected, may cause the Fund's shares to lose value or may cause the Fund to underperform other funds with similar investment objectives. Market Risk. The values of, and/or the income generated by, securities held by a Fund may decline due to general market conditions or other factors, including those directly involving the issuers of such securities. Security markets are volatile and may decline significantly in response to adverse issuer, regulatory, political, or economic developments. Different sectors of the market and different security types may react differently to such developments. Mortgage- and Asset-Backed Securities Risk. Mortgage- and asset-backed securities are subject to risk of default on the underlying mortgages or assets, particularly during periods of economic downturn. Defaults on the underlying mortgages or assets may cause such securities to decline in value and become less liquid. Rising interest rates tend to extend the duration of these securities, making them more sensitive to changes in interest rates than instruments with fixed payment schedules. As a result, in a period of rising interest rates, these securities may exhibit additional volatility. When interest rates decline or are low, borrowers may pay off their mortgage or other debts sooner than expected, 13 Wells Fargo Funds - Alternative Funds