Wells Fargo High Yield Bond Fund

All information is as of 9-30-17 unless otherwise indicated. General fund information Ticker: EKHIX Portfolio manager: Margaret D. Patel Subadvisor: Wells Capital Management Inc. Category: High-yield bond Fund strategy Seeks to outperform the broad high-yield fixed-income market (represented by the BofA Merrill Lynch U.S. High Yield Constrained Index) over a full market cycle Principally invests in below-investment-grade debt securities of corporate issuers including traditional corporate bonds and convertible bonds Seeks to identify the best relatively valued debt securities by evaluating the entire capital structure of a company Uses a top-down macroeconomic approach to determine which sectors and industries to invest in and applies fundamental research to identify the most attractive companies within those sectors and industries Seeks to invest in debt securities issued by companies with sustainable competitive advantages and high barriers to entry, specifically preferring companies with strong management teams and financial flexibility Key drivers of performance The fund s lack of exposure to credits rated CCC proved to be a detractor during the quarter as lower-rated bonds outperformed higher-rated issues. Equity investments held in the portfolio during the quarter contributed to relative performance. Average annual total returns (%) as of 9-30-17* Year to Since inception 3 month date 1 year 3 year 5 year 10 year (9-11-35) High Yield Bond Fund Inst 1.76 7.03 8.03 6.01 6.03 6.96 7.95 Lipper High Yield Funds Average 1.83 6.04 7.72 4.32 5.19 6.25 BofA Merrill Lynch U.S. High Yield Constrained Index 2.04 7.04 9.05 5.88 6.39 7.81 *Returns for periods of less than one year are not annualized. Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on a fund. Investment return, principal value, and yields 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 0.71%. The fund s net expense ratio is 0.53%. The manager has contractually committed, through 12-31-17, to waive fees and/or reimburse expenses to the extent necessary to cap the fund s total annual fund operating expenses after fee waiver at 0.53% 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. Without these reductions, the fund s returns would have been lower. 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. The expense ratio paid by an investor is the net expense ratio or the total annual fund operating expense after fee waivers, as stated in the prospectus. Portfolio characteristics Wells Fargo High Yield Bond Fund BofA ML U.S. High Yield Constrained Index Avg. eff. duration 4.32 3.93 Avg. maturity (yrs.) 4.94 6.32 30-day SEC yield 4.09% Sector weights (%) High-yield industrial 86.6 89.4 High-yield utility 0.9 2.5 High-yield financials 3.5 8.1 Equity 8.3 0.0 Cash equivalents 0.7 0.0 Credit-quality allocation (%) 1 BBB/Baa 4.1 0.0 BB/Ba 43.7 48.3 B/B 41.7 37.7 CCC and below 0.8 14.1 Equity 8.3 0.0 Nonrated 0.6 0.0 Cash equivalents 0.7 0.0 1. The ratings indicated are from Standard & Poor's, Fitch, and/or Moody's Investors Service. The percentages of the fund s portfolio with the ratings depicted in the chart are calculated based on the total investments of the fund. If a security was rated by all three rating agencies, the median rating was used. If a security was rated by two of three rating agencies, the lower rating was used. If a security was rated by one of the agencies, that rating was used. Due to rounding, percentages may not add up to 100%. The fund's 30-day unsubsidized SEC yield is 3.93%. (See pages 4-5 for important information.) 1 QU217 10-17

Fixed-income market review Treasury yields ended the quarter near where they began Yield (%) 3.5 3.0 2.5 2.0 1.5 U.S. Treasury yield curve 1.0 9-30-17 0.5 6-30-17 0.0 0 yr. 5 yr. 10 yr. 15 yr. 20 yr. 25 yr. 30 yr. In a fairly quiet quarter, yields moved within a 30-basis-point (bp; 100 bps equal 1.00%) range. Tenyear U.S. Treasury yields began the quarter at 2.33%, declined to 2.06% by early September, and ended the quarter at 2.34%. The Treasury yield curve flattened modestly as short-term yields rose more than longer-term yields. The difference between 30-year and 2-year Treasury yields was 136 bps by the end of the third quarter. For historical perspective, the yield curve was at its steepest point in February 2011 (400 bps) and at its narrowest in May 2000 (-61 bps). High-yield bond spreads continued to narrow Spread (bps) 2,000 1,500 1,000 500 0 High-yield option-adjusted spread High-yield bond spreads continued to decline, ending the quarter 347 bps higher than Treasury yields. Supply and demand trends were supportive of high yield. Despite less demand from high-yield mutual funds, which experienced outflows of $2.4 billion during the first nine months of 2017 according to the Investment Company Institute, high-yield supply also was constrained by limited new issuance as well as by a number of high-yield credits migrating out of the high-yield universe as they received investment-grade credit ratings. Benchmark total return, Q3 2017 High-yield sectors (%) High-yield subsectors (%) Credit quality (%) Industrials 1.99 Oil-field equipment 6.81 BB 2.04 Utilities 3.66 Oil refining 5.76 B 1.80 Financials 2.04 E&P energy 4.81 CCC 2.43 Theaters -0.83 Telecom-wireline -1.45 Food and drug retail -4.44 The BofA Merrill Lynch U.S. High Yield Constrained Index returned 2.04% in the third quarter. Utilities delivered the strongest performance. Investors, wary of the effect that increasing interest rates might have in other sectors, tended to favor utilities, which they perceive as a less-risky sector. Subsectors that delivered the strongest performance were within the energy sector: oil-field equipment, oil refining, and exploration and production. The subsectors that were the leading detractors within the index were theaters, telecom-wireline, and food and drug retail. Lower-rated high-yield debt outperformed credits in the higher-rated credit tiers. Bonds rated CCC were the strongest performers within the index during the quarter, followed by those rated BB and B. Sources: Bloomberg L.P., Federal Reserve, and Bank of America Merrill Lynch Past performance is no guarantee of future results. 2

Portfolio review and strategy Sector attribution and positioning Sector allocation was neutral to results. An out-of-benchmark allocation to equities was the largest contributor to performance. In the automotive and services sectors, the fund s overweight positions contributed. Underweights to sectors that outperformed including basic industry, energy, utilities, and financials detracted, as did overweights to the underperforming consumer and capital goods and health care sectors. Quality attribution and positioning The fund s positioning across the credit-quality spectrum detracted from performance. The fund was underweight BB-rated credits and overweight B-rated credits and had no CCC-rated or lower exposure. There is a small amount of investment-grade BBB-rated paper in the fund. Debt that was BBB-rated underperformed the broad high-yield market, detracting from performance. The underweight to BB-rated debt and overweight to B-rated debt also detracted. The manager replaced exposure to the lowest-quality bonds with dividend-paying equities, where there may be more value at this point in the credit cycle. Outlook We have a cautious view for high-yield bonds. Investor demand for corporate bonds likely will continue to support high-yield bond prices, but spreads between yields for Treasury bonds and high-yield corporate credits are tight, leaving little room for capital appreciation. Fundamentals remain solid and default rates remain low. We view equity market valuations as generally within an average band, neither overpriced nor undervalued. The forward trend for stock prices likely will depend on earnings and we expect continued modest growth in the global economy. We are keeping the fund s duration longer than that of the benchmark because we see a yield advantage for longer-maturity bonds. We favor higher-rated credits (BB-rated and B- rated) because we do not believe investors are compensated adequately for lower-rated credits (CCC-rated and lower) at current yield levels. In a world of modest growth and low inflation, with high-yield bond valuations having been above average but not excessive, we seek to position the fund conservatively. In our view, most traditional defensive sectors face pricing pressure and slow growth and offer limited value. We favor select conservative opportunities in a number of classically cyclical sectors: information technology, energy, specialty chemicals, and industrials. The Federal Reserve intends to continue gradually reducing its easymoney policies Issue selection attribution and positioning Issue selection detracted from results. Because the fund tends to have a bias toward higher-quality, longer-term debt, there was broad-based underperformance across sectors because higher-quality names tended to underperform. Percent 1.25 1.00 0.75 0.50 0.25 Federal funds target rate (midpoint of range) 0.00 2011 2012 2013 2014 2015 2016 2017 Source: Federal Reserve Past performance is no guarantee of future results. 3

Fund facts Inception date 9-11-35 Net expense ratio Inst 0.53% Assets all share classes $533.34M Rankings and ratings Morningstar total return rankings Institutional Class (as of 9-30-17) Morningstar Category: High yield bond 1 year 316 out of 697 funds 3 year NA 5 year NA 10 year NA Overall Morningstar Rating The Overall Morningstar Rating, a weighted average of the 3-, 5-, and 10-year (if applicable) ratings, is out of 601 funds in the high yield bond category, based on risk-adjusted returns as of 9-30-17. Share class availability Share class Ticker Gross expense ratio (%) Net expense ratio (%) Contractual expense waiver date A EKHAX 1.04 0.93 12-31-17 C EKHCX 1.79 1.68 12-31-17 Admin EKHYX 0.98 0.80 12-31-17 Inst EKHIX 0.71 0.53 12-31-17 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 waiver at 0.93% (A), 1.68 (C), 0.80 (Admin), and 0.53 (I). Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the cap. Without these reductions, the fund s returns would have been lower. 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. The expense ratio paid by an investor is the net expense ratio or the total annual fund operating expense after fee waivers, as stated in the prospectus. Portfolio characteristics: Portfolio characteristics, sector weights, and allocations are subject to change and may have changed since the date specified. Benchmark descriptions: The BofA Merrill Lynch U.S. High Yield Constrained Index is a market-value-weighted index of all domestic and Yankee high-yield bonds, including deferred interest bonds and payment-inkind securities. Issues included in the index have maturities of one year or more and have a credit rating lower than BBB-/Baa3 but are not in default. The BofA Merrill Lynch U.S. High Yield Constrained Index limits any individual issuer to a maximum of 2% benchmark exposure. You cannot invest directly in an index. The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock's weight in the index proportionate to its market value. You cannot invest directly in an index. The 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. Definition of terms: 30-day SEC yield: The 30-day SEC yield is calculated with a standardized formula mandated by the SEC. The formula is based on maximum offering price per share and includes the effect of any fee waivers. Without waivers, yields would be reduced. The 30-day unsubsidized SEC yield does not reflect waivers in effect. A fund's actual distribution rate will differ from the SEC yield, and any income distributions from the fund may be higher or lower than the SEC yield. Credit-quality ratings: Credit-quality ratings apply to underlying holdings of the fund and not the fund itself. Standard & Poor's and Fitch rate the creditworthiness of bonds from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) to show relative standing within the rating categories. Standard & Poor's rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody s rates the creditworthiness of bonds from Aaa (highest) to CC (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Credit quality and credit-quality ratings are subject to change. Duration: Duration is the weighted average of the timing of cash-flow payments from fixedincome securities. Duration is used as a measurement of sensitivity to interest rates. Yield curve: The yield curve is a graphical representation of fixed-income security yields (usually U.S. Treasuries) at their respective maturities, starting with the shortest time to maturity and sequentially plotting in a line chart to the longest maturity. 4

The views expressed in this document are as of 9-30-17 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. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating based on a Morningstar risk-adjusted return measure that accounts for variation in a fund s monthly performance (including the effects of sales charges, loads, and redemption fees, unless otherwise indicated), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each 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. (Each share class is counted as a fraction of one fund within this scale and is rated separately, which may cause slight variations in the distribution percentages.) Across U.S.- domiciled high yield bond funds, the High Yield Bond Fund received 5 stars among 601 funds, 4 stars among 485 funds, and 3 stars among 319 funds for the 3-, 5-, and 10-year periods, respectively. Morningstar Ratings and Rankings are for the Institutional Class only; other classes may have different performance characteristics. The Morningstar Return ranking is based on the fund s total return rank relative to all funds that have the same category for the same time period. Past performance is no guarantee of future results. The inception date of the Institutional Class was 10-31-14. Historical performance shown for the Institutional Class shares prior to their inception reflects the performance of the Administration Class shares, and is not adjusted to reflect the Institutional Class expenses. If these expenses had been included, returns for the Institutional Class would be higher. Risks: Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest-rate changes and their impact on the fund and its share price can be sudden and unpredictable. The use of derivatives may reduce returns and/or increase volatility. High-yield securities have a greater risk of default and tend to be more volatile than higher-rated debt securities. Loans are subject to risks similar to those associated with other below-investment-grade bond investments, such as credit risk (for example, risk of issuer default), below-investment-grade bond risk (for example, risk of greater volatility in value), and risk that the loan may become illiquid or difficult to price. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market).this fund is exposed to foreign investment risk. Consult the fund s prospectus for additional information on these and other risks. 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 a trade name used by the asset management businesses of Wells Fargo & Company. Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Funds. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the funds. The funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA, an affiliate of Wells Fargo & Company. Neither Wells Fargo Funds Distributor nor Wells Fargo Funds Management holds fund shareholder accounts or assets. This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind including a recommendation for any specific investment, strategy, or plan. 306063 10-17 QU217 10-17 5