1 CM Wells Fargo C&B Large Cap Value Fund

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Raymond Lynch
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1 All information is as of 9/30/2018 unless otherwise indicated. Ticker: CBLSX Portfolio managers: R. James O'Neil, CFA; Michael M. Meyer, CFA; Mehul Trivedi, CFA; Edward W. O'Connor, CFA; Steve Lyons, CFA; William Weber, CFA; and Andrew B. Armstrong, CFA Subadvisor: Cooke and Bieler, L.P. Category: Large value Focuses on high-quality companies with strong cash-flow generation, competitive advantages, and conservative balance sheets Maintains a strong valuation discipline, seeking to buy stocks at a significant discount to the team s estimate of intrinsic value Uses a high-quality, low-risk approach designed to minimize business risk and provide strong downside protection Takes a long-term, low-turnover approach to investing, especially as short-term sellers depress the prices of high-quality businesses that the team believes are fundamentally healthy C&B Large Cap Value Fund- Inst Russell 1000 Value Index 3 month Year to date *Returns for periods of less than one year are not annualized. 1 year year year year Since inception (5/15/90) Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes a shareholder may pay on a fund. Investment return and principal value of an investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available at the fund s website, wellsfargofunds.com. Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge. The fund s gross expense ratio is 0.88%. The fund s net expense ratio is 0.75%. The manager has contractually committed, through September 30, 2019, 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 the Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the 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. Without this cap, the fund s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectus The fund underperformed the Russell 1000 Value Index for the threemonth period that ended September 30, Stock selection in the information (IT) and health care sectors were key detractors from relative performance. Stock selection in the materials and industrials sectors were key contributors to relative performance. The fund underperformed the benchmark, the Russell 1000 Value Index, for the three-month period that ended September 30, The equity market advanced during the period, supported by relatively strong economic data and reported corporate earnings that generally continued to surpass expectations. Sectors that contributed the most to the index s advance were health care, financials, and IT. The large-cap value benchmark finished 5.7% higher than it started the period this despite headlines featuring the trade dispute between the U.S. and China. The fund exhibits a lower valuation, lower debt to equity, and higher return on capital than the benchmark, which we believe are important metrics for long-term performance and could be beneficial if market volatility increases. Our investment process is focused on investing in high-quality companies that are undervalued and that possess competitive advantages. For the period, stock selection in the materials sector was a key contributor to performance, largely due to Ball Corp. The company successfully sold an underperforming unit and won a sizable contract, and some speculated that the company may have pricing power due to recent industry consolidation. We purchased shares of Ball because our research indicated that it was well run, financially sound, and attractively valued. Moreover, we believe the company has a competitive advantage that could help build shareholder value over time. Also in the industrials sector, Colfax Corp. was a notable contributor company reported improved financial results and a more favorable business outlook. Detracting from performance was stock selection in the IT sector. Applied, Inc. (AMAT), shares traded lower due to concerns over softening chipproduction equipment demand. We believe AMAT s valuation discounts this concern. Also, the performance of health care company Laboratory Corporation of America Holdings (LabCorp) hindered results. The company s full-year earnings guidance was below expectations. LabCorp is a leader in its industry, and its near-term challenges wouldn t change our long-term view of its prospects. We are confident our active investment process is potentially well equipped to take advantage of newly created opportunities caused by increased volatility. (See pages 6 7 for important information.) 1 CM Wells Fargo C&B Large Cap Value Fund

2 C&B Large Cap Value Fund versus Russell 1000 Value Index Stock selection in the IT sector was a key detractor from relative results AMAT was a notable underperformer. Weak sales guidance and concerns over soft demand weighed on AMAT s share price. We believe the company is well positioned for next-generation chip production, as its technical expertise is highly regarded in the industry. Our bullish long-term opinion hasn t changed, and the company is buying back its stock. Also, distributor Arrow Electronics, Inc., was a drag on performance. There are concerns over softening demand for some of its products. Our bullish view of Arrow hasn t changed. from sector weight (%) from stock selection (%) Total value added (%) Stock performance in the health care sector hindered relative results. was the top-performing sector in the index during the period; thus, LabCorp s slight stock price decline hindered relative results. The company guided full-year earnings below expectations, and the Centers for Medicare and Medicaid issued a draft proposal that would reduce lab test rates. Those developments weighed on LabCorp s share price. The company is a leader in its industry, and these developments wouldn t change our positive long-term view of its prospects. In the industrials sector, Colfax and Snap-on Inc. were key contributors to performance. Colfax reported solid financial results and offered an upbeat outlook. We believe the company s management took steps to better position Colfax for growth we see further improvements. Also, Snap-on s earnings beat expectations, partly due to the company s unit that provides diagnostic and repair information products. We believe there s a growing demand for these products as they are increasingly required to diagnose and repair vehicles. Our analysis indicates Snap-on s stock is undervalued. Stock selection in the materials sector was a key contributor to relative performance. Portfolio holding Ball Corp. was the primary contributor. Ball is in the process of streamlining some of its businesses. Recently, it sold an underperforming unit and took other value-enhancing steps. Also, reports of industry consolidation boosted Ball s stock. We have a favorable outlook for Ball C&B Large Cap Value Fund Russell 1000 Value Index Over/underweight Fund sector return Index sector return Relative return Sources: FactSet and Wells Fargo Funds Management, LLC Sector weights are subject to change and may have changed since the date specified. When reviewing the performance attribution of our portfolio, it is vital to remember that we construct our portfolio from the bottom up, one stock at a time. Each stock is included in the portfolio based on its own investment thesis. To help manage risk, we are aware of our sector and security weights, but we do not include a holding to obtain a sector distribution to resemble an index. Our exposure to any given sector is a result of our security selection process. 2 Wells Fargo C&B Large Cap Value Fund

3 C&B Large Cap Value Fund versus Russell 1000 Value Index The fund underperformed the benchmark over the past 12 months, largely due to stock selection in the IT and consumer sectors. Stock selection in the industrials and communication services sectors and an underweight to the consumer sector were notable contributors. Our bottom-up, fundamental analysis focuses on high-quality companies with solid balance sheets and improving cash flows. Should the stock market become more volatile, we believe companies with these characteristics may outperform the stocks of their competitors. In contrast to passive investments, we actively look for opportunities to buy high-quality companies at potentially attractive valuations due to short-term dislocations caused by increased market volatility. In the IT sector, the fund s lack of exposure to Cisco Systems, Inc.; Intel Corp.; and QUALCOMM Inc. detracted 100 basis points (bps; 100 bps equal 1.00%) from benchmark-relative returns. These are quality companies that, if their valuations were lower and we didn t find other opportunities, we could consider for the fund. Stock selection in the consumer sector detracted from performance, largely due to Whirlpool Corp. Rising materials costs and lower sales volumes meaningfully affected its earnings. The company s management is taking steps to improve financial results. In the industrials sector, a key contributor was the fund s lack of exposure to General Electric Co., one of the poorer performers in the index. The team s analysis of General Electric s free cash generation and liabilities indicated that the company s stock was overvalued and that there were better opportunities, such as Snap-on, which provided a key contribution. Snap-on s stock advanced 26% during the period. We purchased shares of Snap-on because our research indicated the company was gaining market share in some markets due to its technical expertise, a competitive advantage we thought would be difficult for competitors to replicate or for clients to replace. Stock selection in the communication services sector contributed to performance, largely because of Twenty-First Century Fox, Inc. The company is expected to be a prime acquisition target after AT&T Inc. won U.S. antitrust permission to buy Time Warner Inc. We initially purchased shares of the company because its media assets were undervalued. from sector weight (%) from stock selection (%) Total value added (%) C&B Large Cap Value Fund Russell 1000 Value Index Over/underweight Fund sector return Index sector return Relative return Sources: FactSet and Wells Fargo Funds Management, LLC Sector weights are subject to change and may have changed since the date specified When reviewing the performance attribution of our portfolio, it is vital to remember that we construct our portfolio from the bottom up, one stock at a time. Each stock is included in the portfolio based on its own investment thesis. To help manage risk, we are aware of our sector and security weights, but we do not include a holding to obtain a sector distribution to resemble an index. Our exposure to any given sector is a result of our security selection process. 3 Wells Fargo C&B Large Cap Value Fund

4 In our view, the U.S. economic backdrop has been better than expected, investor sentiment has been favorable, and tax policy provided a windfall for corporations; overall, we retain a constructive outlook for equities. Volatility has stayed relatively low overall for an extended period; however, we believe it is unlikely to remain low, partly due to the potential effects of trade policies that might lead to unintended consequences. In particular, we believe some IT companies may be hampered the most should trade issues escalate to a trade war. We focus our analysis on company fundamentals and to a much lesser degree on macroeconomic data and geopolitical events. Of course, we are aware of these macrorelated items and how they could filter down and affect specific fund holdings; however, an essential element of our investment process is to invest in high-quality companies. These types of companies likely may outperform the stocks of their competitors if macroevents result in higher levels of market volatility. The fund s performance benefited from an underweight to the consumer sector; we retain the underweight because our analysis indicates that there are better opportunities in other market segments. The fund is underweight energy because we remain unconvinced that valuations and fundamentals for energy companies are not attractive enough to fully commit investors capital within the sector. The fund is underweight the so-called bond-proxy sectors: utilities and real estate. It s typical for the fund to underweight these two sectors because we believe there are better long-term total return opportunities in the industrials and consumer sectors. Our investment process focuses on identifying high-quality companies that have strong cash flow generation, competitive advantages, and solid balance sheets. We believe companies with these characteristics may reduce business risk and potentially boost relative performance during more challenging markets and over a full cycle. Also, if market volatility increases, as we expect, our active management likely may enable us to take advantage of opportunities resulting from stock sales by short-term investors, which can depress the prices of fundamentally healthy, high-quality businesses. Further, we are prudent with our stock selections; thus, we are trimming or closing out positions with elevated valuations and refreshing the fund s holdings with attractively valued companies. Share class A C Admin Inst R6 Ticker CBEAX CBECX CBLLX CBLSX CBEJX Gross expense ratio (%) Net expense ratio (%) Contractual expense waiver date The manager has contractually committed 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 1.08% (A), 1.83% (C), 1.00% (Admin), 0.75% (Inst), and 0.65% (R6). Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the 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. Without this cap, the fund s returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectus. 4 Wells Fargo C&B Large Cap Value Fund

5 Stock Allergan plc AerCap Holdings NV Crown Holdings, Inc. Verizon Communications Inc. Arrow Electronics, Inc. Gildan Activewear Inc. Intercontinental Exchange, Inc. JPMorgan Chase & Co. State Street Corporation Brookfield Asset Management Inc. Class A Weighted average market cap Weighted median market cap EPS Growth (3- to 5-year forecast) P/B ratio P/S ratio Number of equity holdings Fund $79.55B $32.37B 9.33% 2.22x 1.00x 48 % of net assets $126.29B $69.83B 9.00% P/E ratio (trailing 12-month) 16.47x 16.43x Turnover % Source: FactSet Russell 1000 Value Index 2.18x 1.76x Inception date 5/15/90 Net expense ratio Inst 0.75% Assets all share classes $357.55M Portfolio holdings and characteristics are subject to change and may have changed since the date specified. The holdings listed should not be considered recommendations to purchase or sell a particular security. 1. Calculated based on a one-year period. 727 C&B Large Cap Value Fund-Inst Lipper Multi-Cap Core Funds Average Russell 1000 Value Index Morningstar Large Value Average 1 year year Morningstar total return rankings Institutional Class (as of 9/30/18) Morningstar Category Large value 1 year 3 year 5 year 10 year Overall Morningstar Rating 1,152 out of 1, out of 1, out of out of year year The Overall Morningstar Rating, a weighted average of the 3-, 5-, and 10-year (if applicable) ratings, is out of 1,109 funds in the Large value category, based on risk-adjusted returns as of 9/30/18. Alpha Beta Sharpe ratio Standard deviation R-squared ratio Upside capture Downside capture Fund % % 75.43% Tracking error 3.29% 2. Calculated for the Institutional Class based on a three-year period. Relative measures are compared with the fund s benchmark. 5 Wells Fargo C&B Large Cap Value Fund

6 Benchmark descriptions: The Lipper averages are compiled by Lipper, Inc., an independent mutual fund research and rating service. Each Lipper average represents a universe of funds that are similar in investment objective. You cannot invest directly in a Lipper average. The Morningstar Category average is the average return for the peer group based on the returns of each individual fund within the group. The total return of the Morningstar Category average does not include the effect of sales charges. You cannot invest directly in a Morningstar Category average. The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price/book ratios and lower forecasted growth values. You cannot invest directly in an index. Attribution analysis: Performance attribution and sector returns are calculated using the Brinson-Fachler attribution model. As such, performance attribution calculations may differ from the fund s actual investment results. Common sources of attribution dispersion from official returns include: the use of end of day holdings and prices, the exclusion of fees, and the use of myriad pricing sources to accommodate different benchmark providers. Definition of terms: Alpha measures the difference between a fund s actual returns and its expected performance given its level of risk (as measured by beta). Beta measures fund volatility relative to general market movements. It is a standardized measure of systematic risk in comparison with a specified index. The benchmark beta is 1.00 by definition. Downside capture measures a fund s replication of its benchmark during periods of negative returns. During periods of negative benchmark returns, a downside capture ratio less than 100% reflects product performance greater than the benchmark and a downside capture ratio greater than 100% reflects performance less than the benchmark. ratio measures the consistency of excess return (return in excess of a benchmark). This value is determined by taking the annualized excess return over a benchmark (style benchmark by default) and dividing it by the standard deviation of excess return. R-squared is a measurement of how similar a fund s historical performance has been to that of the benchmark. The measure ranges from 0.0, which means that the fund s performance bears no relationship to the performance of the index, to 1.0, which means that the fund s performance was perfectly synchronized with the performance of the benchmark. Sharpe ratio measures the potential reward offered by a mutual fund relative to its risk level. The ratio uses a fund s standard deviation and its excess return to determine reward per unit of risk. The higher the Sharpe ratio, the better the fund s historical risk-adjusted performance. Standard deviation represents the degree to which an investment s performance has varied from its average performance over a particular time period. Tracking error measures the extent to which a manager s performance mimics that of a benchmark. The value is the standard deviation of the difference between a fund s performance and a benchmark s performance. Upside capture measures a fund s replication of its benchmark during periods of positive returns. During periods of positive benchmark returns, an upside capture ratio greater than 100% reflects product performance greater than the benchmark and an upside capture ratio less than 100% reflects performance less than the benchmark. 6 Wells Fargo C&B Large Cap Value Fund

7 Risks: Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Consult the fund s prospectus for additional information on these and other risks. The views expressed in this document are as of September 30, 2018, and are those of the portfolio manager(s). The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally, or any Wells Fargo Fund. Any specific securities discussed may or may not be current or future holdings of the fund. The securities discussed should not be considered recommendations to purchase or sell a particular security. Wells Fargo Funds Management, LLC, disclaims any obligation to publicly update or revise any views expressed or forward-looking statements. The Morningstar Rating for funds, or star rating, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar risk-adjusted return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% 3-year rating for months of total returns, 60% 5-year rating/40% 3-year rating for months of total returns, and 50% 10-year rating/30% 5-year rating/20% 3-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent 3-year period actually has the greatest impact because it is included in all three rating periods.across U.S.-domiciled large value funds, the C&B Large Cap Value Fund received 3 stars among 1,109 funds, 3 stars among 948 funds, and 3 stars among 696 funds for the 3-, 5-, and 10-year periods, respectively. The Morningstar Rating is for the Institutional Class only; other classes may have different performance characteristics. Carefully consider a fund s investment objectives, risks, charges, and expenses before investing. For a current prospectus and, if available, a summary prospectus, containing this and other information, visit wellsfargofunds.com. Read it carefully before investing. Wells Fargo Asset Management (WFAM) is the trade name for certain investment advisory/management firms owned by Wells Fargo & Company. These firms include but are not limited to Wells Capital Management Incorporated and Wells Fargo Funds Management, LLC. Certain products managed by WFAM entities are distributed by Wells Fargo Funds Distributor, LLC (a broker/dealer and Member FINRA) NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE CM Wells Fargo C&B Large Cap Value Fund

1 CM Wells Fargo Special Mid Cap Value Fund

1 CM Wells Fargo Special Mid Cap Value Fund All information is as of 6/30/2018 unless otherwise indicated. Ticker: WFMIX Portfolio managers: James M. Tringas, CFA; and Bryant VanCronkhite, CFA, CPA Subadvisor: Wells Capital Management Inc. Category: