Prospectus. February 1, Wells Fargo Advantage Funds - Small and Mid Cap Stock Funds. Administrator Class

Transcription

1 February 1, 2011 Prospectus Administrator Class Wells Fargo Advantage Funds - Small and Mid Cap Stock Funds C&B Mid Cap Value Fund CBMIX Common Stock Fund SCSDX Discovery Fund WFDDX Enterprise Fund SEPKX Growth Opportunities Fund ESMDX Mid Cap Growth Fund WMCGX Opportunity Fund WOFDX Small/Mid Cap Core Fund ECOIX Special Mid Cap Value Fund (formerly the Mid Cap Disciplined Fund) WFMDX These securities have not been approved or disapproved by the U.S. Securities and Exchange Commission (SEC), nor has the SEC passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense. 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.

2 SUPPLEMENT TO THE PROSPECTUSES OF WELLS FARGO ADVANTAGE SMALL AND MID CAP STOCK FUNDS For Opportunity Fund Effective May 1, 2011, Thomas D. Wooden, CFA will act as co-portfolio Manager with Ann M. Miletti for the above-referenced Fund. Mr. Wooden s biographical description is included among the Portfolio Manager biographies listed for Wells Capital Management, as follows: Mr. Wooden is jointly responsible for managing the Opportunity Fund, which he has managed since He is a portfolio manager on the Core Equity team at Wells Capital Management. Prior to joining Wells Capital Management in 2008, Mr. Wooden was an associate portfolio manager for Artisan Partners, LLC, where he began his investment industry career in Earlier, he was an F-15C Squadron Assistant Operations Officer, Weapons Officer and Instructor Pilot for the United States Air Force. Education: Bachelor's degree in business management, United States Air Force Academy. Mr. Wooden has been awarded the use of the Chartered Financial Analyst (CFA) designation by the CFA Institute. April 26, 2011 SCIT041/P204ASP

3 SUPPLEMENT TO THE PROSPECTUSES OF WELLS FARGO ADVANTAGE SMALL AND MID CAP STOCK FUNDS For Discovery Fund, Enterprise Fund, Growth Opportunities Fund and Mid Cap Growth Fund AND WELLS FARGO ADVANTAGE VT FUNDS For VT Discovery Fund (each, a Fund ) Effective immediately, Thomas J. Pence, CFA and Michael T. Smith, CFA will act as co-portfolio Managers for the Discovery Fund, the Enterprise Fund, the Growth Opportunities Fund, the Mid Cap Growth Fund and the VT Discovery Fund. The fund management table in each Fund s section entitled Fund Summaries is replaced with the following: Investment Adviser Sub-Adviser Portfolio Manager, Title Wells Fargo Funds Management, LLC Wells Capital Management Incorporated Thomas J. Pence, CFA, Portfolio Manager Michael T. Smith, CFA, Portfolio Manager Mr. Pence has managed the Discovery Fund, the Enterprise Fund and the VT Discovery Fund since 2001, 2000 and 2001, respectively. Mr. Smith has managed each Fund since Biographical descriptions for Messrs. Pence and Smith are included in the section entitled Organization and Management of the Funds among the Portfolio Manager biographies listed for Wells Capital Management, as follows: Thomas J. Pence, CFA Michael T. Smith, CFA Mr. Pence joined Wells Capital Management in 2005 as a portfolio manager. Prior to joining Wells Capital Management, he was a portfolio manager at Strong Capital Management, Inc. since October Education: B.S., Business, Indiana University; M.B.A., Finance, University of Notre Dame. Mr. Smith has served as a portfolio manager at Wells Capital Management since 2006, and also serves as a research analyst with primary responsibilities covering the health care sector. Mr. Smith joined Wells Capital Management from Strong Capital Management, having joined Strong in Education: B.S., Economics, DePauw University. The principal investment strategy in the Growth Opportunities Fund s section entitled Fund Summaries is replaced with the following: We invest in equity securities of small- and medium-capitalization companies that we believe offer favorable opportunities for growth. We define small- and medium-capitalization companies as those with market capitalizations, at the time of purchase, within the range of the Russell 2500 Index. The market capitalization range of the Russell 2500 Index was $25.9 million to $6.6 billion, as of June 28, 2010, and is expected to change frequently. Furthermore, we may use futures, options or swap agreements, as well as other derivatives, to manage risk or to enhance return. We seek to identify companies that have the prospect for improving sales and earnings growth rates, enjoy a competitive advantage (for example, dominant market share) and that we believe have effective management with a history of making investments that are in the best interests of shareholders (for example, companies with a history of earnings and sales growth that are in excess of total asset growth). We pay particular attention to balance sheet metrics such as changes in working capital, property, plant and equipment growth, inventory levels, accounts receivable, and acquisitions. We also look at how management teams allocate capital in order to drive future cash flow. We typically use a discounted cash flow model or other similar valuation techniques to assess a firm's future profit growth in order to set price objectives. In addition to meeting with management, we take a surround the company approach by

4 surveying a company's vendors, distributors, competitors and customers to obtain multiple perspectives that help us make better investment decisions. Portfolio holdings are continuously monitored for changes in fundamentals. The team seeks a favorable risk/reward relationship to fair valuation, which we define as the value of the company (i.e. our price target for the stock) relative to where the stock is currently trading. We may invest in any sector, and at times we may emphasize one or more particular sectors. We may choose to sell a holding when it no longer offers favorable growth prospects or to take advantage of a better investment opportunity. Additionally, the principal investment strategy in the Growth Opportunities Fund s section entitled The Funds is replaced with the following: We invest in equity securities of small- and medium-capitalization companies that we believe offer favorable opportunities for growth. We define small- and medium-capitalization companies as those with market capitalizations, at the time of purchase, within the range of the Russell 2500 Index. The market capitalization range of the Russell 2500 Index was $25.9 million to $6.6 billion, as of June 28, 2010, and is expected to change frequently. Furthermore, we may use futures, options or swap agreements, as well as other derivatives, to manage risk or to enhance return. We seek to identify companies that have the prospect for improving sales and earnings growth rates, enjoy a competitive advantage (for example, dominant market share) and that we believe have effective management with a history of making investments that are in the best interests of shareholders (for example, companies with a history of earnings and sales growth that are in excess of total asset growth). We pay particular attention to balance sheet metrics such as changes in working capital, property, plant and equipment growth, inventory levels, accounts receivable, and acquisitions. We also look at how management teams allocate capital in order to drive future cash flow. We typically use a discounted cash flow model or other similar valuation techniques to assess a firm's future profit growth in order to set price objectives. In addition to meeting with management, we take a surround the company approach by surveying a company's vendors, distributors, competitors and customers to obtain multiple perspectives that help us make better investment decisions. Portfolio holdings are continuously monitored for changes in fundamentals. The team seeks a favorable risk/reward relationship to fair valuation, which we define as the value of the company (i.e. our price target for the stock) relative to where the stock is currently trading. We may invest in any sector, and at times we may emphasize one or more particular sectors. We may choose to sell a holding when it no longer offers favorable growth prospects or to take advantage of a better investment opportunity. 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 to either maintain liquidity or for short-term defensive purposes when we believe it is in the best interests of the shareholders to do so. During these periods, the Fund may not achieve its objective. 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 principal investment strategy in the Mid Cap Growth Fund s section entitled Fund Summaries is replaced with the following: We invest principally in the equity securities of medium-capitalization companies. We define medium-capitalization companies as securities of companies with market capitalization within the range of the Russell Midcap Index, which ranged from approximately $348 million to $14.2 billion as of June 28, 2010, and is expected to change frequently. Furthermore, we may use futures, options, repurchase or reverse repurchase agreements or swap agreements, as well as other derivatives, to manage risk or to enhance return. We seek to identify companies that have the prospect for improving sales and earnings growth rates, enjoy a competitive advantage (for example, dominant market share) and that we believe have effective management with a history of making investments that are in the best interests of shareholders (for example, companies with a history of earnings and sales growth that are in

5 excess of total asset growth). We pay particular attention to balance sheet metrics such as changes in working capital, property, plant and equipment growth, inventory levels, accounts receivable, and acquisitions. We also look at how management teams allocate capital in order to drive future cash flow. We typically use a discounted cash flow model or other similar valuation techniques to assess a firm's future profit growth in order to set price objectives. In addition to meeting with management, we take a surround the company approach by surveying a company's vendors, distributors, competitors and customers to obtain multiple perspectives that help us make better investment decisions. Portfolio holdings are continuously monitored for changes in fundamentals. The team seeks a favorable risk/reward relationship to fair valuation, which we define as the value of the company (i.e., our price target for the stock) relative to where the stock is currently trading. We may invest in any sector, and at times we may emphasize one or more particular sectors. We may choose to sell a holding when it no longer offers favorable growth prospects or to take advantage of a better investment opportunity. Additionally, the principal investment strategy in the Mid Cap Growth Fund s section entitled The Funds is replaced with the following: We invest principally in the equity securities of medium-capitalization companies. We define medium-capitalization companies as securities of companies with market capitalization within the range of the Russell Midcap Index, which ranged from approximately $348 million to $14.2 billion as of June 28, 2010, and is expected to change frequently. Furthermore, we may use futures, options, repurchase or reverse repurchase agreements or swap agreements, as well as other derivatives, to manage risk or to enhance return. We seek to identify companies that have the prospect for improving sales and earnings growth rates, enjoy a competitive advantage (for example, dominant market share) and that we believe have effective management with a history of making investments that are in the best interests of shareholders (for example, companies with a history of earnings and sales growth that are in excess of total asset growth). We pay particular attention to balance sheet metrics such as changes in working capital, property, plant and equipment growth, inventory levels, accounts receivable, and acquisitions. We also look at how management teams allocate capital in order to drive future cash flow. We typically use a discounted cash flow model or other similar valuation techniques to assess a firm's future profit growth in order to set price objectives. In addition to meeting with management, we take a surround the company approach by surveying a company's vendors, distributors, competitors and customers to obtain multiple perspectives that help us make better investment decisions. Portfolio holdings are continuously monitored for changes in fundamentals. The team seeks a favorable risk/reward relationship to fair valuation, which we define as the value of the company (i.e., our price target for the stock) relative to where the stock is currently trading. We may invest in any sector, and at times we may emphasize one or more particular sectors. We may choose to sell a holding when it no longer offers favorable growth prospects or to take advantage of a better investment opportunity. 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 to either maintain liquidity or for short-term defensive purposes when we believe it is in the best interests of the shareholders to do so. During these periods, the Fund may not achieve its objective. 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 following risk description is added to the section entitled Fund Summaries for the Growth Opportunities Fund and the Mid Cap Growth Fund: Sector Emphasis Risk. Investing a substantial portion of the Fund's assets in related industries or sectors may have greater risks because companies in these sectors may share common characteristics and may react similarly to market developments.

6 Additionally, the following risk description is added to the section entitled Description of Principal Investment Risks for the Growth Opportunities Fund and the Mid Cap Growth Fund: Sector Emphasis Risk Investing a substantial portion of a Fund's assets in related industries or sectors may have greater risks because companies in these sectors may share common characteristics and may react similarly to market developments. March 21, 2011 SCAM031/P203SP

7 Table of Contents Fund Summaries A summary of information about each Fund, including: investment objective, fees and expenses, portfolio turnover, principal investment strategies, principal risks, performance history, management of the Fund, transaction policies and tax information. The Funds Information about each Fund you should know before investing, including: investment objective, principal investments, principal investment strategies, and principal risks. Organization and Management of the Funds Information about the Funds' organization and the companies managing your money. Your Account Information about how Fund shares are priced and how to buy, sell and exchange Fund shares. Fund Summaries C&B Mid Cap Value Fund Summary Common Stock Fund Summary Discovery Fund Summary Enterprise Fund Summary Growth Opportunities Fund Summary Mid Cap Growth Fund Summary Opportunity Fund Summary Small/Mid Cap Core Fund Summary Special Mid Cap Value Fund Summary The Funds Key Fund Information C&B Mid Cap Value Fund Common Stock Fund Discovery Fund Enterprise Fund Growth Opportunities Fund Mid Cap Growth Fund Opportunity Fund Small/Mid Cap Core Fund Special Mid Cap Value Fund Description of Principal Investment Risks Portfolio Holdings Information Organization and Management of the Funds Organization and Management of the Funds About Wells Fargo Funds Trust The Investment Adviser The Sub-Advisers and Portfolio Managers Dormant Multi-Manager Arrangement Your Account Compensation to Dealers and Shareholder Servicing Agents Pricing Fund Shares How to Buy Shares How to Sell Shares How to Exchange Shares Account Policies

8 Table of Contents Other information Information about distributions, taxes and financial highlights. Other Information Distributions Taxes Additional Performance Information Financial Highlights

9 C&B MID CAP VALUE FUND Investment Objective The Fund seeks maximum long-term total return (current income and capital appreciation), consistent with minimizing risk to principal. 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. Shareholder Fees (fees paid directly from your investment) Maximum sales charge (load) imposed on purchases (as a percentage of offering price) Maximum deferred sales charge (load) (as a percentage of offering price) None None Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) 1 Management Fees 0.70% Distribution (12b-1) Fees 0.00% Other Expenses 0.48% Total Annual Fund Operating Expenses 1.18% Fee Waivers 0.03% Total Annual Fund Operating Expenses After Fee Waiver % 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. Funds Management has committed through January 31, 2012 to waive fees and/or reimburse expenses to the extent necessary to ensure that the Fund's Total Annual Fund Operating Expenses After Fee Waiver, excluding brokerage commissions, interest, taxes, extraordinary expenses, and the expenses of any money market fund or other fund held by the Fund, do not exceed the Total Annual Fund Operating Expenses After Fee Waiver shown. After this time, the Total Annual Fund Operating Expenses After Fee Waiver may be increased or the commitment to maintain the same 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 operating expenses remain the same as in the tables above. The fee waiver in the Total Annual Fund Operating Expenses After Fee Waiver is only reflected for the length of the waiver commitment in each of the following time periods. Although your actual costs may be higher or lower, based on these assumptions your costs would be: After: 1 Year $117 3 Years $372 5 Years $ Years $1,429 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. For the period from November 1, 2009 to September 30, 2010, the Fund's portfolio turnover rate was 23% of the average value of its portfolio. Principal Investment Strategies Under normal circumstances, we invest at least 80% of the Fund's net assets in equity securities of mid-capitalization companies. We invest principally in equity securities of mid-capitalization companies, which we define as securities of companies with market capitalizations ranging from $500 million to $10 billion. We manage a relatively focused portfolio of 30 to 50 companies that enables us to provide adequate diversification while allowing the composition and performance of the Wells Fargo Advantage Funds - Small and Mid Cap Stock Funds 3

10 portfolio to behave differently than the market. Furthermore,we may use futures, options, repurchase or reverse repurchase agreements or swap agreements, as well as other derivatives, to manage risk or to enhance return. We select securities for the portfolio based on an analysis of a company's financial characteristics and an assessment of the quality of a company's management. In selecting a company,we consider criteria such as return on equity, balance sheet strength, industry leadership position and cash flow projections. We further narrow the universe of acceptable investments by undertaking intensive research including interviews with a company's top management, customers and suppliers. We believe our assessment of business quality and emphasis on valuation will protect the portfolio's assets in down markets, while our insistence on strength in leadership, financial condition and cash flow position will produce competitive results in all but the most speculative markets. We regularly review the investments of the portfolio and may sell a portfolio holding when it has achieved its valuation target, there is deterioration in the underlying fundamentals of the business, or we have identified a more attractive investment opportunity. Principal Investment Risks An investment in the Fund is not a deposit of Wells Fargo Bank, N.A. or its affiliates and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. Counter-Party Risk. A Fund may incur a loss if the other party to an investment contract, such as a derivative or a repurchase or reverse repurchase agreement, fails to fulfill its contractual obligation to the Fund. 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 offset risk. Focused Portfolio Risk. Since the Fund tends to invest in a smaller number of stocks than do many other similar mutual funds, changes in the value of individual stocks held by the Fund may have a larger impact on the Fund's net asset value than if the Fund were more broadly invested. Issuer Risk. The value of a security may decline because of adverse events or circumstances that directly relate to conditions at the issuer or any entity providing it credit or liquidity support. Leverage Risk. Leverage created by borrowing or certain investments, such as derivatives and reverse repurchase agreements, can diminish the Fund's performance and increase the volatility of the Fund's net asset value. Liquidity Risk. A security may not be able to be sold at the time desired or without adversely affecting the price. Management Risk. There is no guarantee of the Fund's performance or that the Fund will meet its objective. The market value of your investment may decline and you may suffer investment loss. Market Risk. The market price of securities owned by the Fund may rapidly or unpredictably decline due to factors affecting securities markets generally or particular industries. Regulatory Risk. Changes in government regulations may adversely affect the value of a security. An insufficiently regulated industry or market might also permit inappropriate practices that adversely affect an investment. Smaller Company Securities Risk. Securities of companies with smaller market capitalizations tend to be more volatile and less liquid than larger company stocks. Value Style Investment Risk. Value stocks may lose value and may be subject to prolonged depressed valuations. 4 Wells Fargo Advantage Funds - Small and Mid Cap Stock Funds

11 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 an appropriate broad-based index(es). Past performance before and after taxes is no guarantee of future results. Current month-end performance is available on the Fund's Web site at wellsfargo.com/advantagefunds. Calendar Year Total Returns as of 12/31 each year Administrator Class 39% 26% 13% Highest Quarter: 2nd Quarter % Lowest Quarter: 4th Quarter % 0% -13% % -39% % Average Annual Total Returns for the periods ended 12/31/2010 Inception Date of Share Class 1 Year 5 Year 10 Year Administrator Class (before taxes) 7/26/ % 3.58% 8.28% Administrator Class (after taxes on distributions) 7/26/ % 2.09% 7.07% Administrator Class (after taxes on distributions and the sale of Fund Shares) 7/26/ % 2.65% 6.90% Russell Midcap Value Index (reflects no deduction for fees, expenses, or taxes) 24.75% 4.08% 8.07% 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. Wells Fargo Advantage Funds - Small and Mid Cap Stock Funds 5

12 Fund Management Investment Adviser Sub-Adviser Portfolio Manager, Title/Managed Since Wells Fargo Funds Management, LLC Cooke & Bieler, L.P. Kermit S. Eck, CFA, Portfolio Manger / 1998 Daren C. Heitman, CFA, Portfolio Manager / 2005 Steve Lyons, CFA, Portfolio Manager / 2009 Michael M. Meyer, CFA, Portfolio Manager / 1998 Edward W. O'Connor, CFA, Portfolio Manager / 2002 R. James O'Neil, CFA, Portfolio Manager / 1998 Mehul Trivedi, CFA, Portfolio Manager / 1998 William Weber, CFA, Portfolio Manager / 2011 Transaction Policies Administrator Class shares are offered for direct investment by institutions such as pension and profit sharing plans, employee benefit trusts, endowments, foundations and corporations. Administrator Class shares may also be offered through certain financial intermediaries that may charge their customers transaction or other fees. Institutions Purchasing Fund Shares Minimum Initial Investment Administrator Class: $1 million (certain eligible investors may not be subject to a minimum initial investment) Minimum Additional Investment Administrator Class: None Opening an Account Institutions which currently have another account with Wells Fargo Advantage Funds may open an account by phone or internet. If the institution does not have an account, contact your investment representative. To Place Orders or Redeem Shares Mail: Wells Fargo Advantage Funds P.O. Box 8266 Boston, MA Internet: wellsfargo.com/advantagefunds Phone or Wire: Contact your investment representative. 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. Payments to Broker-Dealers and Other Financial Intermediaries If you purchase a Fund through a broker-dealer or other financial intermediary (such as a bank), 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 broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Consult your salesperson or visit your financial intermediary's Web site for more information. 6 Wells Fargo Advantage Funds - Small and Mid Cap Stock Funds

13 COMMON STOCK FUND 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. Shareholder Fees (fees paid directly from your investment) Maximum sales charge (load) imposed on purchases (as a percentage of offering price) Maximum deferred sales charge (load) (as a percentage of offering price) None None Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) 1 Management Fees 0.73% Distribution (12b-1) Fees 0.00% Other Expenses 0.43% Acquired Fund Fees and Expenses 0.01% Total Annual Fund Operating Expenses 1.17% Fee Waivers 0.06% Total Annual Fund Operating Expenses After Fee Waiver % 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. Funds Management has committed through January 31, 2012 to waive fees and/or reimburse expenses to the extent necessary to ensure that the Fund's Total Annual Fund Operating Expenses After Fee Waiver, excluding brokerage commissions, interest, taxes, extraordinary expenses, and the expenses of any money market fund or other fund held by the Fund, do not exceed 1.10% for Administrator Class. After this time, the Total Annual Fund Operating Expenses After Fee Waiver may be increased or the commitment to maintain the same 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 operating expenses remain the same as in the tables above. The fee waiver in the Total Annual Fund Operating Expenses After Fee Waiver is only reflected for the length of the waiver commitment in each of the following time periods. Although your actual costs may be higher or lower, based on these assumptions your costs would be: After: 1 Year $113 3 Years $366 5 Years $ Years $1,415 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. For the period from November 1, 2009 to September 30, 2010, the Fund's portfolio turnover rate was 47% of the average value of its portfolio. Principal Investment Strategies Under normal circumstances, we invest at least 80% of the Fund's net assets in common stocks and up to 25% of the Fund's total assets in equity securities of foreign issuers, including ADRs and similar investments. We invest principally in common stocks of small-and medium-capitalization foreign and domestic companies, which we define as those with market capitalizations falling within the ranges of the Russell 2000 Index and the Russell Midcap Index. The ranges of the Russell 2000 Index and the Russell Midcap Index were approximately $25.9 million to $2.5 billion and $348 million to $14.2 billion respectively, as of June 28, 2010, and are expected to change frequently. Furthermore, we may use Wells Fargo Advantage Funds - Small and Mid Cap Stock Funds 7

14 futures, options, repurchase or reverse repurchase agreements or swap agreements, as well as other derivatives, to manage risk or to enhance return. We reserve the right to hedge the portfolio's foreign currency exposure by purchasing or selling currency futures and foreign currency forward contracts. However, under normal circumstances, we will not engage in extensive foreign currency hedging. We invest principally in common stocks of small-and medium-capitalization companies that we believe are underpriced yet have attractive growth prospects. Our analysis is based on the determination of a company's "private market value," which is the price an investor would be willing to pay for the entire company. We determine a company's private market value based upon several different types of analysis. We carry out a fundamental analysis of a company's cash flows, asset valuations, competitive factors, and other industry specific factors. We also gauge the company's management strength, financial health, and growth potential in determining a company's private market value. We place an emphasis on company management, even meeting with management in certain situations. Finally, we focus on the long-term strategic direction of the company. We then compare the private market value as determined by these factors to the company's public market capitalization, and invest in the securities of those companies where we believe there is a significant gap between the two. We may sell an investment when its price no longer compares favorably with the company's private market value. In addition, we may choose to sell an investment where the fundamentals deteriorate or the strategy of the management or the management itself changes. Principal Investment Risks An investment in the Fund is not a deposit of Wells Fargo Bank, N.A. or its affiliates and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. Counter-Party Risk. A Fund may incur a loss if the other party to an investment contract, such as a derivative or a repurchase or reverse repurchase agreement, fails to fulfill its contractual obligation to the Fund. 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 offset risk. Foreign Currency Transactions Risk. Foreign securities are often denominated in foreign currencies. As a result, the value of a Fund's shares is affected by changes in exchange rates. A Fund may enter into foreign currency futures contracts and foreign currency exchange contracts to manage this risk. Foreign Investment Risk. Foreign investments face the potential of heightened illiquidity, greater price volatility and adverse effects of political, regulatory, tax, currency, economic or other macroeconomic developments. Issuer Risk. The value of a security may decline because of adverse events or circumstances that directly relate to conditions at the issuer or any entity providing it credit or liquidity support. Leverage Risk. Leverage created by borrowing or certain investments, such as derivatives and reverse repurchase agreements, can diminish the Fund's performance and increase the volatility of the Fund's net asset value. Liquidity Risk. A security may not be able to be sold at the time desired or without adversely affecting the price. Management Risk. There is no guarantee of the Fund's performance or that the Fund will meet its objective. The market value of your investment may decline and you may suffer investment loss. Market Risk. The market price of securities owned by the Fund may rapidly or unpredictably decline due to factors affecting securities markets generally or particular industries. Regulatory Risk. Changes in government regulations may adversely affect the value of a security. An insufficiently regulated industry or market might also permit inappropriate practices that adversely affect an investment. Smaller Company Securities Risk. Securities of companies with smaller market capitalizations tend to be more volatile and less liquid than larger company stocks. 8 Wells Fargo Advantage Funds - Small and Mid Cap Stock Funds

15 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 an appropriate broad-based index(es). Past performance before and after taxes is no guarantee of future results. Current month-end performance is available on the Fund's Web site at wellsfargo.com/advantagefunds. Calendar Year Total Returns as of 12/31 each year Administrator Class 52% 39% 26% 13% Highest Quarter: 4th Quarter % Lowest Quarter: 4th Quarter % 0% -13% % % % Average Annual Total Returns for the periods ended 12/31/2010 Inception Date of Share Class 1 Year 5 Year 10 Year Administrator Class (before taxes) 7/30/ % 7.83% 6.94% Administrator Class (after taxes on distributions) 7/30/ % 6.26% 5.78% Administrator Class (after taxes on distributions and the sale of Fund Shares) 7/30/ % 6.32% 5.76% Russell 2500 TM Index (reflects no deduction for fees, expenses, or taxes) 26.71% 4.86% 6.98% 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. Wells Fargo Advantage Funds - Small and Mid Cap Stock Funds 9

16 Fund Management Investment Adviser Sub-Adviser Portfolio Manager, Title / Managed Since Wells Fargo Funds Management, LLC Wells Capital Management Incorporated Ann M. Miletti, CFA, Portfolio Manager / 2001 Transaction Policies Administrator Class shares are offered for direct investment by institutions such as pension and profit sharing plans, employee benefit trusts, endowments, foundations and corporations. Administrator Class shares may also be offered through certain financial intermediaries that may charge their customers transaction or other fees. Institutions Purchasing Fund Shares Minimum Initial Investment Administrator Class: $1 million (certain eligible investors may not be subject to a minimum initial investment) Minimum Additional Investment Administrator Class: None Opening an Account Institutions which currently have another account with Wells Fargo Advantage Funds may open an account by phone or internet. If the institution does not have an account, contact your investment representative. To Place Orders or Redeem Shares Mail: Wells Fargo Advantage Funds P.O. Box 8266 Boston, MA Internet: wellsfargo.com/advantagefunds Phone or Wire: Contact your investment representative. 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. Payments to Broker-Dealers and Other Financial Intermediaries If you purchase a Fund through a broker-dealer or other financial intermediary (such as a bank), 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 broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Consult your salesperson or visit your financial intermediary's Web site for more information. 10 Wells Fargo Advantage Funds - Small and Mid Cap Stock Funds

17 DISCOVERY FUND 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. Shareholder Fees (fees paid directly from your investment) Maximum sales charge (load) imposed on purchases (as a percentage of offering price) Maximum deferred sales charge (load) (as a percentage of offering price) None None Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Management Fees 0.75% Distribution (12b-1) Fees 0.00% Other Expenses 0.45% Acquired Fund Fees and Expenses 0.01% Total Annual Fund Operating Expenses 1.21% Fee Waivers 0.05% Total Annual Fund Operating Expenses After Fee Waiver % 1. Funds Management has committed through January 31, 2012 to waive fees and/or reimburse expenses to the extent necessary to ensure that the Fund's Total Annual Fund Operating Expenses After Fee Waiver, excluding brokerage commissions, interest, taxes, extraordinary expenses, and the expenses of any money market fund or other fund held by the Fund, do not exceed 1.15% for Administrator Class. After this time, the Total Annual Fund Operating Expenses After Fee Waiver may be increased or the commitment to maintain the same 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 operating expenses remain the same as in the tables above. The fee waiver in the Total Annual Fund Operating Expenses After Fee Waiver is only reflected for the length of the waiver commitment in each of the following time periods. Although your actual costs may be higher or lower, based on these assumptions your costs would be: After: 1 Year $118 3 Years $379 5 Years $ Years $1,462 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. For the period from November 1, 2009 to September 30, 2010, the Fund's portfolio turnover rate was 93% of the average value of its portfolio. Principal Investment Strategies Under normal circumstances, we invest at least 80% of the Fund's total assets in equity securities of small- and mediumcapitalization companies and up to 25% of the Fund's total assets in equity securities of foreign issuers through ADRs and similar investments. We invest in equity securities of small- and medium-capitalization companies that we believe offer favorable opportunities for growth. We define small- and medium capitalization companies as those with market capitalizations at the time of purchase equal to or lower than the company with the largest market capiltalization in the Russell Midcap Wells Fargo Advantage Funds - Small and Mid Cap Stock Funds 11

18 Index, which was approximately $14.2 billion as of June 28, 2010, and is expected to change frequently. We may also invest in equity securities of foreign issuers through ADRs and similar investments. Furthermore, we may use futures, options, repurchase or reverse repurchase agreements or swap agreements, as well as other derivatives, to manage risk or to enhance return. We seek to identify companies that have the prospect for improving sales and earnings growth rates, enjoy a competitive advantage (for example, dominant market share) and that we believe have effective management with a history of making investments that are in the best interests of shareholders (for example, companies with a history of earnings and sales growth that are in excess of total asset growth). We pay particular attention to balance sheet metrics such as changes in working capital, property, plant and equipment growth, inventory levels, accounts receivable, and acquisitions. We also look at how management teams allocate capital in order to drive future cash flow. We typically use a discounted cash flow model or other similar valuation techniques to assess a firm's future profit growth in order to set price objectives. In addition to meeting with management, we take a surround the company approach by surveying a company's vendors, distributors, competitors and customers to obtain multiple perspectives that help us make better investment decisions. Portfolio holdings are continuously monitored for changes in fundamentals. The team seeks a favorable risk/reward relationship to fair valuation, which we define as the value of the company (i.e. our price target for the stock) relative to where the stock is currently trading. We may invest in any sector, and at times we may emphasize one or more particular sectors. We may choose to sell a holding when it no longer offers favorable growth prospects or to take advantage of a better investment opportunity. Principal Investment Risks An investment in the Fund is not a deposit of Wells Fargo Bank, N.A. or its affiliates and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. Counter-Party Risk. A Fund may incur a loss if the other party to an investment contract, such as a derivative or a repurchase or reverse repurchase agreement, fails to fulfill its contractual obligation to the Fund. 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 offset risk. Foreign Investment Risk. Foreign investments face the potential of heightened illiquidity, greater price volatility and adverse effects of political, regulatory, tax, currency, economic or other macroeconomic developments. Growth Style Investment Risk. Growth stocks may be more expensive relative to the values of other stocks and carry potential for significant volatility and loss. Issuer Risk. The value of a security may decline because of adverse events or circumstances that directly relate to conditions at the issuer or any entity providing it credit or liquidity support. Leverage Risk. Leverage created by borrowing or certain investments, such as derivatives and reverse repurchase agreements, can diminish the Fund's performance and increase the volatility of the Fund's net asset value. Liquidity Risk. A security may not be able to be sold at the time desired or without adversely affecting the price. Management Risk. There is no guarantee of the Fund's performance or that the Fund will meet its objective. The market value of your investment may decline and you may suffer investment loss. Market Risk. The market price of securities owned by the Fund may rapidly or unpredictably decline due to factors affecting securities markets generally or particular industries. Regulatory Risk. Changes in government regulations may adversely affect the value of a security. An insufficiently regulated industry or market might also permit inappropriate practices that adversely affect an investment. Smaller Company Securities Risk. Securities of companies with smaller market capitalizations tend to be more volatile and less liquid than larger company stocks. 12 Wells Fargo Advantage Funds - Small and Mid Cap Stock Funds

19 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 an appropriate broad-based index(es). Past performance before and after taxes is no guarantee of future results. Current month-end performance is available on the Fund's Web site at wellsfargo.com/advantagefunds. Calendar Year Total Returns as of 12/31 each year Administrator Class 56% 42% 28% 14% 0% Highest Quarter: 2nd Quarter % Lowest Quarter: 4th Quarter % -14% -28% % -56% % Average Annual Total Returns for the periods ended 12/31/2010 Inception Date of Share Class 1 Year 5 Year 10 Year Administrator Class (before taxes) 4/8/ % 7.94% 8.73% Administrator Class (after taxes on distributions) 4/8/ % 7.08% 7.77% Administrator Class (after taxes on distributions and the sale of Fund Shares) 4/8/ % 6.62% 7.33% Russell 2500 TM Growth Index (reflects no deduction for fees, expenses, or taxes) 28.86% 5.63% 4.19% 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. Wells Fargo Advantage Funds - Small and Mid Cap Stock Funds 13

20 Fund Management Investment Adviser Sub-Adviser Portfolio Manager, Title / Managed Since Wells Fargo Funds Management, LLC Wells Capital Management Incorporated James M. Leach, CFA, Portfolio Manager / 2003 Thomas J. Pence, CFA, Portfolio Manager / 2001 Transaction Policies Administrator Class shares are offered for direct investment by institutions such as pension and profit sharing plans, employee benefit trusts, endowments, foundations and corporations. Administrator Class shares may also be offered through certain financial intermediaries that may charge their customers transaction or other fees. Institutions Purchasing Fund Shares Minimum Initial Investment Administrator Class: $1 million (certain eligible investors may not be subject to a minimum initial investment) Minimum Additional Investment Administrator Class: None Opening an Account Institutions which currently have another account with Wells Fargo Advantage Funds may open an account by phone or internet. If the institution does not have an account, contact your investment representative. To Place Orders or Redeem Shares Mail: Wells Fargo Advantage Funds P.O. Box 8266 Boston, MA Internet: wellsfargo.com/advantagefunds Phone or Wire: Contact your investment representative. 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. Payments to Broker-Dealers and Other Financial Intermediaries If you purchase a Fund through a broker-dealer or other financial intermediary (such as a bank), 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 broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Consult your salesperson or visit your financial intermediary's Web site for more information. 14 Wells Fargo Advantage Funds - Small and Mid Cap Stock Funds