<PAGE>
[LOGO]
Semi-Annual Report
WELLS FARGO
WEALTHBUILDER PORTFOLIOS
November 30, 1999
WEALTHBUILDER
GROWTH BALANCED PORTFOLIO
WEALTHBUILDER
GROWTH AND INCOME PORTFOLIO
WEALTHBUILDER
GROWTH PORTFOLIO
<PAGE>
WEALTHBUILDER PORTFOLIOS
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS ............................ 1
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PERFORMANCE HIGHLIGHTS
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GROWTH BALANCED PORTFOLIO ......................... 2
GROWTH AND INCOME PORTFOLIO ........................ 4
GROWTH PORTFOLIO .............................. 6
PORTFOLIO OF INVESTMENTS
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GROWTH BALANCED PORTFOLIO ......................... 8
GROWTH AND INCOME PORTFOLIO ........................ 9
GROWTH PORTFOLIO ............................. 10
FINANCIAL STATEMENTS
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STATEMENT OF ASSETS AND LIABILITIES .................... 11
STATEMENT OF OPERATIONS .......................... 12
STATEMENT OF CHANGES IN NET ASSETS .................... 13
FINANCIAL HIGHLIGHTS ........................... 14
NOTES TO FINANCIAL STATEMENTS ........................ 15
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LIST OF ABBREVIATIONS ............................ 19
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<PAGE>
WEALTHBUILDER PORTFOLIOS
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DEAR VALUED SHAREHOLDER,
Thank you for investing in the Wells Fargo Funds (formerly Norwest Advantage
Funds and Stagecoach Funds).
We're pleased to present this semi-annual report for the period ended
November 30, 1999. This report provides information about the three Wells
Fargo WealthBuilder Portfolios, including economic and market trends over the
six-month period.
Beginning in June 1999, economic expansion entered a "peaking phase," and the
financial markets started looking quite different from late 1998 and early
1999. During a peaking phase, real economic growth remains solid, but stops
accelerating. Once the pace of real economic growth peaked early in the
reporting period, stock markets around the globe stopped outpacing bonds.
Both stock markets and long-term bond yields reached plateaus and settled
into a trading range early in the period. Corporate bond yield spreads stopped
narrowing, and with the three Federal Reserve Board interest rate increases
during the period, leadership within the stock market reverted back toward
large cap growth stocks and away from cyclical, value and small cap stocks.
Most foreign economies are following the U.S. economic pattern. The recovery
from the Asia crisis in many of the world's economies did not become evident
until the second quarter of 1999, and while U.S. growth seemed to have peaked
during the period, many foreign economies seemed to continue accelerating
compared to the "peaking" domestic economy.
Rising bond yields, coupled with renewed strength in stocks late in the
period, prompted a shift toward bonds within the Growth Balanced Portfolio on
November 29, 1999, based on the Tactical Asset Allocation (TAA) Model. The TAA
model is used in managing the stock/bond mix within the Portfolio. The shift
changed the Portfolio's stock/bond mix from 65/35 to 50/50, which is how the
mix remained at November 30, 1999.
Looking ahead, the U.S. economy could be nearing a "deceleration phase." If
economic growth truly begins to slow, bonds may begin to outpace stocks. Over
the past 12 months, the S&P 500 Index outperformed the 30-year Treasury Bond
Index by almost 40 percent, which has happened only eight other times since
1926. In seven of those instances, bonds outpaced stocks the ensuing year. We
continue to be optimistic about bond returns, primarily because most of the
increase in yields during 1999 were based on "expectations" of higher
inflation versus the "reality" that pricing has not increased.
Whatever the market conditions, we recommend that you continually review your
investment portfolio to determine an appropriate mix of investments to meet
your ongoing financial needs. We appreciate your business and strive to offer
a variety of investment options to help you potentially achieve your financial
goals. If you have any questions about your investment or need further
information, please contact us at 1-800-222-8222.
Again, thank you for choosing Wells Fargo Funds.
Sincerely,
<TABLE>
<S> <C>
[LOGO] [LOGO]
MICHAEL J. HOGAN W. RODNEY HUGHES
EXECUTIVE VICE PRESIDENT, PRESIDENT,
WELLS FARGO BANK, N.A. WELLS FARGO FUNDS
</TABLE>
1
<PAGE>
WEALTHBUILDER PORTFOLIOS PERFORMANCE HIGHLIGHTS
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GROWTH BALANCED PORTFOLIO
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo WealthBuilder Growth Balanced Portfolio seeks a balance of
capital appreciation and current income.
ADVISOR
Wells Fargo Bank, N.A.
FUND MANAGER
Galen Blomster, CFA
INCEPTION DATE
10/1/97
PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
The Portfolio returned 7.02%(1) for the six-month period ended November 30,
1999, excluding sales charges, outperforming its Lipper Balanced Funds
Average(2) benchmark, which returned 2.38% over the period. Please keep in
mind that past performance is no guarantee of future results.
The assets of the WealthBuilder Growth Balanced Portfolio were invested in 12
different stock and bond mutual funds as of November 30, 1999. The proportion
of assets in stocks and bonds is determined by a proprietary investment
strategy called the Tactical Asset Allocation (TAA) Model, which seeks to
enhance performance by shifting between stocks and bonds depending on market
conditions. At November 30, 1999, 50% of the assets were invested in fixed
income funds, while the remaining 50% were invested in equity holdings. The
bond investing styles include government, agency, mortgage-backed, corporate
and international holdings. The equity styles are large company growth, large
company value, small company and international holdings. Of the 12 mutual
funds in the Portfolio, six were Wells Fargo Funds, two were from the Putnam
family, one was managed by AIM, two by Franklin/Templeton and one by
Massachusetts Financial Services.
Although the markets witnessed considerable volatility and a narrowing, the
six-month period was another profitable time for investors, especially in
large cap, domestic growth stocks, and international stocks. A healthy
economy, combined with low, stable inflation, continued to fuel the stock
market rally. Large company growth stocks were the best performers during the
period, while small cap stocks continued to lag in the deflationary
environment. Large company value stocks rose during April of 1999, but under-
performed their growth counterparts over the six-month period.
At the same time, the six-month period was another difficult environment for
bonds. With the continued strong economy, the Federal Reserve Board raised
interest rates three times during the period. Bond yields remained in the high
end of a trading range until late in the period when stock prices strengthened
and bond yields rose. Since the end of September 1998, 10-year Treasury bond
yields have risen 191 basis points and the S&P 500 Index(3) has risen 42.7%.
With the increasing disparity in valuation between stocks and bonds by the end
of the period, we shifted 15% of the Portfolio from stocks to bonds on
November 29, 1999, based on TAA Model recommendations.
STRATEGIC OUTLOOK
- --------------------------------------------------------------------------------
Looking ahead, the Portfolio is expected to remain over-weighted in bonds
until the relative valuation in the stock and bond markets returns to a more
comparative level.
- --------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. 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. The Fund's manager has voluntarily waived all or a portion
of its management fees or assumed responsibility for other expenses, which
reduces operating expenses and increases total return to shareholders. Without
these reductions the Fund's returns would have been lower. These reductions may
be discontinued at any time.
2
<PAGE>
PERFORMANCE HIGHLIGHTS WEALTHBUILDER PORTFOLIOS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(4) (%) (AS OF NOVEMBER 30, 1999)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
------------------------ -----------------------------
1-Year Since Inception 1-Year Since Inception
<S> <C> <C> <C> <C>
WEALTHBUILDER GROWTH BALANCED
PORTFOLIO 15.43 12.02 13.69 11.24
LIPPER BALANCED FUNDS AVERAGE 8.93
S&P 500 INDEX(3) 20.90
RUSSELL 2000 INDEX(5) 15.67
MSCI EAFE INDEX(6) 21.10
</TABLE>
CHARACTERISTICS (AS OF NOVEMBER 30, 1999)
- ----------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 3%
NAV (A) 12.66
</TABLE>
PORTFOLIO ALLOCATION(7)
(AS OF NOVEMBER 30, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Stocks 50%
Bonds 50%
</TABLE>
GROWTH OF $10,000 INVESTMENT(8)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WEALTHBUILDER GROWTH S&P 500 INDEX RUSSELL 2000 INDEX MSCI EAFE INDEX
& INCOME PORTFOLIO
<S> <C> <C> <C> <C>
10/1/1997 $9,850 $10,000 $10,000 $10,000
10/31/1997 $9,446 $9,666 $9,560 $9,231
11/30/1997 $9,584 $10,114 $9,499 $9,137
12/31/1997 $9,727 $10,287 $9,666 $9,216
1/31/1998 $9,835 $10,401 $9,514 $9,638
2/28/1998 $10,456 $11,151 $10,218 $10,256
3/31/1998 $10,929 $11,721 $10,640 $10,573
4/30/1998 $11,067 $11,841 $10,700 $10,656
5/31/1998 $10,811 $11,637 $10,124 $10,603
6/30/1998 $10,949 $12,110 $10,146 $10,683
7/31/1998 $10,604 $11,980 $9,325 $10,792
8/31/1998 $8,948 $10,248 $7,514 $9,455
9/30/1998 $9,293 $10,905 $8,101 $9,165
10/31/1998 $9,963 $11,791 $8,432 $10,121
11/30/1998 $10,584 $12,506 $8,874 $10,638
12/31/1998 $11,154 $13,226 $9,423 $11,057
1/31/1999 $11,480 $13,783 $9,548 $11,024
2/28/1999 $11,085 $13,353 $8,775 $10,760
3/31/1999 $11,509 $13,887 $8,912 $11,208
4/30/1999 $12,003 $14,425 $9,710 $11,662
5/31/1999 $11,795 $14,084 $9,852 $11,061
6/30/1999 $12,456 $14,850 $10,298 $11,494
7/31/1999 $12,239 $14,387 $10,014 $11,835
8/31/1999 $12,081 $14,316 $9,644 $11,880
9/30/1999 $11,884 $13,923 $9,646 $12,000
10/31/1999 $12,565 $14,804 $9,685 $12,448
11/30/1999 $13,127 $15,105 $10,263 $12,879
</TABLE>
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An investment in international funds presents certain additional risks that
may not be present in a mutual fund that invests largely in domestic stocks. For
example, investments in foreign and emerging markets present special risks,
including: currency fluctuations, the potential for diplomatic and political
instability, and liquidity risks, foreign taxation and differences in auditing
and other financial standards. There may also be additional risks associated
with investments in smaller and/or newer companies because their shares tend to
be less liquid than securities of larger companies. Further, shares of small and
new companies are generally more sensitive to purchase and sales transactions
and changes in the issuer's financial condition and, therefore, the prices of
such stocks may be more volatile than those of larger company stocks.
(2) The Lipper Balanced Funds Average is an average of funds whose primary
objective is to conserve principal by maintaining at all times a balanced
portfolio of both stocks and bonds. The total return of the Lipper average does
not include the effect of sales charges. You cannot invest directly in a Lipper
Average.
(3) The S&P 500 Index is an unmanaged index of 500 widely held common stocks
representing, among others, industrial, financial, utility, and transportation
companies listed or traded on national exchanges or over-the-counter markets.
You cannot invest directly in an index.
(4) Performance shown for the Wells Fargo WealthBuilder Growth Balanced
Portfolio for periods prior to November 8, 1999, reflects performance of the
Norwest Advantage WealthBuilder II Growth Balanced Portfolio, its predecessor
fund. Effective close of business November 5, 1999, the Norwest Advantage Funds
were reorganized into the Wells Fargo Funds. For shares, the maximum front-end
sales charge is 1.50%.
(5) The Russell 2000 Index is an unmanaged, market-value weighted index of the
Russell 3000 Index and includes the 2,000 smallest stocks representing
approximately 11% of the U.S. equity market. You cannot invest directly in an
index.
(6) The Morgan Stanley Capital Investment-Europe, Australasia and Far East
Index ("MSCI EAFE") is an unmanaged group of securities widely regarded by
investors to be representative of the stock markets of Europe, Australia, Asia
and the Far East. The MSCI EAFE Index presented here does not incur expenses and
is not available directly for investment. Had this index incurred operation
expenses, its performances would have been lower. You cannot invest directly in
an index.
(7) Portfolio holdings are subject to change.
(8) The chart compares the performance of the Wells Fargo WealthBuilder Growth
Balanced Portfolio since inception with the S&P 500 Index, the Russell 2000
Index and the MSCI EAFE Index. The chart assumes a hypothetical $10,000
investment, and reflects all operating expenses and assumes the maximum initial
sales charge of 1.50%. The Portfolio is a professionally managed mutual fund.
3
<PAGE>
WEALTHBUILDER PORTFOLIOS PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
GROWTH AND INCOME PORTFOLIO
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo WealthBuilder Growth and Income Portfolio seeks long-term
capital appreciation with a secondary emphasis on income.
ADVISOR
Wells Fargo Bank, N.A.
FUND MANAGER
Galen Blomster, CFA
INCEPTION DATE
10/1/97
PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
The Portfolio returned 11.29%(1) for the six-month period ended November 30,
1999, excluding sales charges, outperforming its Lipper Multi-Cap Value Funds
Average(2) benchmark, which returned (2.35)% over the six months ended
November 30, 1999. Please keep in mind that past performance is no guarantee
of future results.
The assets of the WealthBuilder Growth and Income Portfolio were invested in
eight different equity mutual funds. The Portfolio seeks enhanced performance
with reduced volatility through diversification among different equity
investing styles. Accordingly, at November 30, 1999, 29.9% of the assets were
invested in the large company growth style, 28.7% in large company value,
20.5% in small company stocks and 20.8% in international holdings. Of the
eight mutual funds in the Portfolio, four were Wells Fargo Funds, two were
from the Putnam family, one was managed by AIM and one by Franklin/Templeton.
Although the markets witnessed considerable volatility and a narrowing, the
six-month period was another profitable time for investors, especially in
large cap, domestic growth stocks and international stocks. A healthy economy,
combined with low, stable inflation, continued to fuel the stock market rally.
Large company growth stocks were the best performers during the period, while
small cap stocks continued to lag in the deflationary environment. While large
company value stocks rose during April of 1999, they under-performed their
growth counterparts over the past six months.
- --------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. 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. The Fund's manager has voluntarily waived all or a portion
of its management fees or assumed responsibility for other expenses, which
reduces operating expenses and increases total return to shareholders. Without
these reductions the Fund's returns would have been lower. These reductions may
be discontinued at any time.
An investment in international funds presents certain additional risks that
may not be present in a mutual fund that invests largely in domestic stocks. For
example, investments in foreign and emerging markets present special risks,
including: currency fluctuations, the potential for diplomatic and political
instability, and liquidity risks, foreign taxation and differences in auditing
and other financial standards. There may also be additional risks associated
with investments in smaller and/or newer companies because their shares tend to
be less liquid than securities of larger companies. Further, shares of small and
new companies are generally more sensitive to purchase and sales transactions
and changes in the issuer's financial condition and, therefore, the prices of
such stocks may be more volatile than those of larger company stocks.
4
<PAGE>
PERFORMANCE HIGHLIGHTS WEALTHBUILDER PORTFOLIOS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(3) (%) (AS OF NOVEMBER 30, 1999)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
------------------------ -----------------------------
1-Year Since Inception 1-Year Since Inception
<S> <C> <C> <C> <C>
WEALTHBUILDER GROWTH AND
INCOME PORTFOLIO 24.02 14.19 22.16 13.39
LIPPER MULTI-CAP VALUE FUNDS
AVERAGE 7.63
S&P 500 INDEX(4) 20.90
RUSSELL 2000 INDEX(5) 15.67
MSCI EAFE INDEX(6) 21.10
</TABLE>
CHARACTERISTICS (AS OF NOVEMBER 30, 1999)
- ----------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 6%
NAV 13.31
</TABLE>
PORTFOLIO ALLOCATION(7)
(AS OF NOVEMBER 30, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO ALLOCATION (AS OF NOVEMBER 30, 1999)
<S> <C>
Stocks 99.5%
Bonds 0.5%
</TABLE>
GROWTH OF $10,000 INVESTMENT(8)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WEALTHBUILDER GROWTH S&P 500 INDEX RUSSELL 2000 INDEX MSCI EAFE INDEX
BALANCED PORTFOLIO
<S> <C> <C> <C> <C>
10/1/1997 $9,850 $10,000 $10,000 $10,000
10/31/1997 $9,811 $9,666 $9,560 $9,231
11/30/1997 $9,820 $10,114 $9,499 $9,137
12/31/1997 $9,912 $10,287 $9,666 $9,216
1/31/1998 $9,971 $10,401 $9,514 $9,638
2/28/1998 $10,386 $11,151 $10,218 $10,256
3/31/1998 $10,702 $11,721 $10,640 $10,573
4/30/1998 $10,811 $11,841 $10,700 $10,656
5/31/1998 $10,673 $11,637 $10,124 $10,603
6/30/1998 $10,762 $12,110 $10,146 $10,683
7/31/1998 $10,554 $11,980 $9,325 $10,792
8/31/1998 $9,418 $10,248 $7,514 $9,455
9/30/1998 $9,714 $10,905 $8,101 $9,165
10/31/1998 $10,356 $11,791 $8,432 $10,121
11/30/1998 $10,910 $12,506 $8,874 $10,638
12/31/1998 $11,419 $13,226 $9,423 $11,057
1/31/1999 $11,668 $13,783 $9,548 $11,024
2/28/1999 $11,310 $13,353 $8,775 $10,760
3/31/1999 $11,608 $13,887 $8,912 $11,208
4/30/1999 $11,956 $14,425 $9,710 $11,662
5/31/1999 $11,767 $14,084 $9,852 $11,061
6/30/1999 $12,175 $14,850 $10,298 $11,494
7/31/1999 $12,026 $14,387 $10,014 $11,835
8/31/1999 $11,896 $14,316 $9,644 $11,880
9/30/1999 $11,797 $13,923 $9,646 $12,000
10/31/1999 $12,235 $14,804 $9,685 $12,448
11/30/1999 $12,593 $15,105 $10,263 $12,879
</TABLE>
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(2) The Lipper Multi-Cap Value Funds Average is an average of funds which
invest in a variety of market capitalization ranges, without concentrating 75%
of their equity assets in anyone market capitalization range over an extended
period of time. Multi-Cap funds will generally have 25% to 75% of their assets
invested in companies with market capitalizations above 300% of the dollar
weighted median market capitalization of the S&P Mid Cap 400 index. The total
return of the Lipper average does not include the effect of sales charges. You
cannot invest directly in a Lipper Average.
(3) Performance shown for the Wells Fargo WealthBuilder Growth and Income
Portfolio for periods prior to November 8, 1999, reflects performance of the
Norwest Advantage WealthBuilder II Growth and Income Portfolio, its predecessor
fund. Effective close of business November 5, 1999, the Norwest Advantage Funds
were reorganized into the Wells Fargo Funds. For shares, the maximum front-end
sales charge is 1.50%.
(4) The S&P 500 Index is an unmananged index of 500 widely held common stocks
representing, among others, industrial, financial, utility, and transportation
companies listed or traded on national exchanges or over-the-counter markets.
You cannot invest directly in an index.
(5) The Russell 2000 Index is an unmanaged, market-value weighted index of the
Russell 3000 Index and includes the 2,000 smallest stocks representing
approximately 11% of the U.S. equity market. You cannot invest directly in an
index.
(6) The Morgan Stanley Capital Investment-Europe, Australasia and Far East
Index ("MSCI EAFE") is an unmanaged group of securities widely regarded by
investors to be representative of the stock markets of Europe, Australia, Asia
and the Far East. The MSCI EAFE Index presented here does not incur expenses and
is not available directly for investment. Had this index incurred operation
expenses, its performances would have been lower. You cannot invest directly in
an index.
(7) Portfolio holdings are subject to change.
(8) The chart compares the performance of the Wells Fargo WealthBuilder Growth
and Income Portfolio since inception with the S&P 500 Index, the Russell 2000
Index and the MSCI EAFE Index. The chart assumes a hypothetical $10,000
investment, and reflects all operating expenses and assumes the maximum initial
sales charge of 1.50%. The Portfolio is a professionally managed mutual fund.
5
<PAGE>
WEALTHBUILDER PORTFOLIOS PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
GROWTH PORTFOLIO
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo WealthBuilder Growth Portfolio seeks long-term capital
appreciation with no emphasis on income.
ADVISOR
Wells Fargo Bank, N.A.
FUND MANAGER
Galen Blomster, CFA
INCEPTION DATE
10/1/97
PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
The Portfolio returned 10.93%(1) for the six-month period ended November 30,
1999, excluding sales charges, outperforming its Lipper Multi-Cap Core Funds
Average(2) benchmark, which returned 7.28% over the six months ended November
30, 1999. Please keep in mind that past performance is no guarantee of future
results.
The assets of the WealthBuilder Growth Portfolio are invested in eight
different equity mutual funds. The proportion of assets in different equity
styles is determined by a proprietary investment strategy called the Tactical
Equity Allocation (TEA) Model, which seeks to enhance performance by shifting
emphasis between equity styles depending upon market conditions. Accordingly,
at November 30, 1999, 67.5% of the assets were invested in the large cap
growth style, 14.9% in large cap value, 7.6% in small company style and 9.9%
in international style. Of the eight mutual funds in the Portfolio, four were
Wells Fargo Funds, two were from the Putnam family, one was managed by AIM and
one by Franklin/Templeton.
Although the market witnessed considerable volatility and a narrowing, the
six months ended November 30, 1999 were another profitable time for investors,
especially in large cap stocks, domestic growth stocks and international
stocks. A healthy economy, combined with low, stable inflation, continued to
fuel the stock market rally. Large company growth stocks were the best
performers during the period, while small cap stocks continued to lag in the
deflationary environment. Large cap value stocks rose during April of 1999,
but under-performed their growth counterparts late in the period.
The TEA Model continued to favor domestic, large company growth stocks during
the period, which significantly enhanced performance relative to a portfolio
which is more diversified among the four equity styles. We came close to
shifting from growth stocks to value stocks at the end of May 1999, as our
measure of momentum came very close to favoring value. However, with three
Federal Reserve Board tightenings since then, we saw a flattening in the yield
curve late in the period, which now favors large cap growth stocks. Growth
stocks regained momentum over value stocks during the period. The strength of
the dollar was up until mid-July of 1999, which limited the likelihood that
international stocks would outperform domestic stocks. However, from mid-July
until mid-October, the dollar experienced a downward correction of over 7
percent, and international stocks outperformed domestic stocks in July, August
and September. From mid-October to the end of November, the dollar recovered
over 4 percent, and domestic stocks outperformed international stocks in
October.
STRATEGIC OUTLOOK
- --------------------------------------------------------------------------------
We continue with a domestic stock emphasis as of November 30, 1999, but the
domestic versus international allocation is still rather indecisive from both
a fundamental and momentum standpoint looking ahead. The direction of the
dollar in the near term will likely dictate whether the model stays with
domestic or switches to international.
- --------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. 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. The Fund's manager has voluntarily waived all or a portion
of its management fees or assumed responsibility for other expenses, which
reduces operating expenses and increases total return to shareholders. Without
these reductions the Fund's returns would have been lower. These reductions may
be discontinued at any time.
6
<PAGE>
PERFORMANCE HIGHLIGHTS WEALTHBUILDER PORTFOLIOS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(3) (%) (AS OF NOVEMBER 30, 1999)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
------------------------ -----------------------------
1-Year Since Inception 1-Year Since Inception
<S> <C> <C> <C> <C>
WEALTHBUILDER GROWTH PORTFOLIO 25.34 17.00 23.46 16.18
LIPPER MULTI-CAP CORE FUNDS
AVERAGE 20.53
S&P 500 INDEX(4) 20.90
RUSSELL 2000 INDEX(5) 15.67
MSCI EAFE INDEX(6) 21.10
</TABLE>
CHARACTERISTICS (AS OF NOVEMBER 30, 1999)
- ----------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 4%
NAV 14.01
</TABLE>
PORTFOLIO ALLOCATION(7)
(AS OF NOVEMBER 30, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO ALLOCATION (AS OF NOVEMBER 30, 1999)
<S> <C>
Stocks 99.0%
Bonds 1.0%
</TABLE>
GROWTH OF $10,000 INVESTMENT(8)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WEALTHBUILDER S&P 500 INDEX RUSSELL 2000 INDEX MSCI EAFE INDEX
GROWTH PORTFOLIO
<S> <C> <C> <C> <C>
10/1/1997 $9,850 $10,000 $10,000 $10,000
10/31/1997 $9,623 $9,666 $9,560 $9,231
11/30/1997 $9,742 $10,114 $9,499 $9,137
12/31/1997 $9,826 $10,287 $9,666 $9,218
1/31/1998 $9,925 $10,401 $9,514 $9,638
2/28/1998 $10,506 $11,151 $10,218 $10,256
3/31/1998 $10,960 $11,721 $10,640 $10,573
4/30/1998 $11,118 $11,841 $10,700 $10,656
5/31/1998 $10,851 $11,637 $10,124 $10,603
6/30/1998 $11,108 $12,110 $10,146 $10,683
7/31/1998 $10,782 $11,980 $9,325 $10,792
8/31/1998 $9,107 $10,248 $7,514 $9,455
9/30/1998 $9,610 $10,905 $8,101 $9,165
10/31/1998 $10,329 $11,791 $8,432 $10,121
11/30/1998 $11,039 $12,506 $8,874 $10,638
12/31/1998 $11,890 $13,226 $9,423 $11,057
1/31/1999 $12,394 $13,783 $9,548 $11,024
2/28/1999 $11,969 $13,353 $8,775 $10,760
3/31/1999 $12,542 $13,887 $8,912 $11,208
4/30/1999 $12,808 $14,425 $9,710 $11,662
5/31/1999 $12,473 $14,084 $9,852 $11,061
6/30/1999 $13,282 $14,850 $10,298 $11,494
7/31/1999 $12,897 $14,387 $10,014 $11,835
8/31/1999 $12,799 $14,316 $9,644 $11,880
9/30/1999 $12,502 $13,923 $9,646 $12,000
10/31/1999 $13,312 $14,804 $9,685 $12,448
11/30/1999 $13,835 $15,105 $10,263 $12,879
</TABLE>
- --------------------------------------------------------------------------------
An investment in international funds presents certain additional risks that
may not be present in a mutual fund that invests largely in domestic stocks. For
example, investments in foreign and emerging markets present special risks,
including: currency fluctuations, the potential for diplomatic and political
instability, and liquidity risks, foreign taxation and differences in auditing
and other financial standards. There may also be additional risks associated
with investments in smaller and/or newer companies because their shares tend to
be less liquid than securities of larger companies. Further, shares of small and
new companies are generally more sensitive to purchase and sales transactions
and changes in the issuer's financial condition and, therefore, the prices of
such stocks may be more volatile than those of larger company stocks.
(2) The Lipper Multi-Cap Core Funds Average is an average of funds which invest
in a variety of market capitalization ranges, without concentrating 75% of their
equity assets in any one market capitalization range over an extended period of
time. Multi- Cap funds will generally have 25% to 75% of their assets invested
in companies with market capitalizations above 300% of the dollar weighted
median market capitalization of the S&P Mid Cap 400 index. The total return of
the Lipper average does not include the effect of sales charges. You cannot
invest directly in a Lipper Average.
(3) Performance shown for the Wells Fargo WealthBuilder Growth Portfolio for
periods prior to November 8, 1999, reflects performance of the Norwest Advantage
WealthBuilder II Growth Portfolio, its predecessor fund. Effective close of
business November 5, 1999, the Norwest Advantage Funds were reorganized into the
Wells Fargo Funds. For Class A shares, the maximum front-end sales charge is
1.50%.
(4) The S&P 500 Index is an unmananged index of 500 widely held common stocks
representing, among others, industrial, financial, utility, and transportation
companies listed or traded on national exchanges or over-the-counter markets.
You cannot invest directly in an index.
(5) The Russell 2000 Index is an unmanaged, market-value weighted index of the
Russell 3000 Index and includes the 2,000 smallest stocks representing
approximately 11% of the U.S. equity market. You cannot invest directly in an
index.
(6) The Morgan Stanley Capital Investment-Europe, Australasia and Far East
Index ("MSCI EAFE") is an unmanaged group of securities widely regarded by
investors to be representative of the stock markets of Europe, Australia, Asia
and the Far East. The MSCI EAFE Index presented here does not incur expenses and
is not available directly for investment. Had this index incurred operation
expenses, its performances would have been lower. You cannot invest directly in
an index.
(7) Portfolio holdings are subject to change.
(8) The chart compares the performance of the Wells Fargo WealthBuilder Growth
Portfolio since inception with the S&P 500 Index, the Russell 2000 Index and the
MSCI EAFE Index. The chart assumes a hypothetical $10,000 investment, and
reflects all operating expenses and assumes the maximum initial sales charge of
1.50%. The Portfolio is a professionally managed mutual fund.
7
<PAGE>
WEALTHBUILDER PORTFOLIOS PORTFOLIO OF INVESTMENTS -- NOVEMBER 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
WEALTHBUILDER GROWTH BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE
AMOUNT SECURITY DESCRIPTION VALUE
<C> <S> <C> <C> <C>
$ 58,674 AIM BLUE CHIP FUND $ 2,138,114
48,308 FRANKLIN SMALL CAP GROWTH FUND 1,321,493
250,504 MFS HIGH INCOME FUND 1,366,968
141,798 PUTNAM GROWTH AND INCOME FUND 2,079,744
59,737 PUTNAM INTERNATIONAL GROWTH
AND INCOME FUND 1,170,171
143,717 TEMPLETON GLOBAL BOND FUND 1,365,530
300,081 WELLS FARGO INTERMEDIATE
GOVERNMENT INCOME FUND 3,232,002
92,350 WELLS FARGO SMALL CAP
OPPORTUNITIES FUND 1,376,118
326,613 WELLS FARGO INCOME FUND 2,982,086
N/A WELLS FARGO INCOME EQUITY
PORTFOLIO 2,175,945
N/A WELLS FARGO LARGE COMPANY
GROWTH PORTFOLIO 1,885,426
N/A WELLS FARGO INTERNATIONAL
PORTFOLIO 1,351,397
22,444,994
TOTAL (82.3%) (COST $19,693,156)
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE/SHARE
AMOUNT SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS (17.3%)
4,721,970 LEHMAN BROTHERS INCORPORATED POOLED
REPURCHASE AGREEMENT -102%.
COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES 5.66% 12/01/99 4,721,970
-----------
4,721,970
TOTAL SHORT-TERM INVESTMENTS (COST $4,721,970)
-----------
27,166,964
TOTAL INVESTMENTS (99.6%) (COST $24,415,126)
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $24,415,126)* 99.60% $27,166,964
OTHER ASSETS AND LIABILITIES, NET 0.40 109,698
------- -----------
TOTAL NET ASSETS 100.00% $27,276,662
------- -----------
</TABLE>
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $3,287,775
GROSS UNREALIZED DEPRECIATION (535,937)
---------
NET UNREALIZED APPRECIATION $2,751,838
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
8
<PAGE>
PORTFOLIO OF INVESTMENTS -- NOVEMBER 30, 1999 (UNAUDITED) WEALTHBUILDER
PORTFOLIOS
- --------------------------------------------------------------------------------
WEALTHBUILDER GROWTH AND INCOME PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE
AMOUNT SECURITY DESCRIPTION VALUE
<C> <S> <C>
$37,688 AIM BLUE CHIP FUND $ 1,808,275
33,952 FRANKLIN SMALL CAP GROWTH FUND 1,213,451
87,715 PUTNAM GROWTH AND INCOME FUND 1,814,831
46,587 PUTNAM INTERNATIONAL GROWTH AND INCOME
FUND 1,247,536
56,552 WELLS FARGO SMALL CAP OPPORTUNITIES FUND 1,227,191
N/A WELLS FARGO INCOME EQUITY PORTFOLIO 1,822,128
N/A WELLS FARGO LARGE COMPANY GROWTH
PORTFOLIO 1,800,191
N/A WELLS FARGO INTERNATIONAL PORTFOLIO 1,228,302
12,161,905
TOTAL INVESTMENTS (99.11%) (COST $9,775,792)
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $9,775,792)* 99.11% $12,161,905
OTHER ASSETS AND LIABILITIES, NET 0.89 109,068
------- -----------
TOTAL NET ASSETS 100.00% $12,270,973
------- -----------
</TABLE>
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $2,437,277
GROSS UNREALIZED DEPRECIATION (51,164)
---------
NET UNREALIZED APPRECIATION $2,386,113
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
9
<PAGE>
WEALTHBUILDER PORTFOLIOS PORTFOLIO OF INVESTMENTS -- NOVEMBER 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
WEALTHBUILDER GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE
AMOUNT SECURITY DESCRIPTION VALUE
<C> <S> <C>
$149,110 AIM BLUE CHIP FUND $ 7,197,441
27,266 FRANKLIN SMALL CAP GROWTH FUND 980,422
33,871 PUTNAM GROWTH AND INCOME FUND 704,978
44,394 PUTNAM INTERNATIONAL GROWTH AND INCOME
FUND 1,196,069
27,132 WELLS FARGO SMALL CAP OPPORTUNITIES FUND 592,253
N/A WELLS FARGO INCOME EQUITY PORTFOLIO 2,662,994
N/A WELLS FARGO LARGE COMPANY GROWTH
PORTFOLIO 7,137,561
N/A WELLS FARGO INTERNATIONAL PORTFOLIO 859,936
21,331,654
TOTAL INVESTMENTS (99.46%) (COST $17,807,407)
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $17,807,407)* 99.46% $21,331,654
OTHER ASSETS AND LIABILITIES, NET 0.54 116,850
------- -----------
TOTAL NET ASSETS 100.00% $21,448,504
------- -----------
</TABLE>
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $3,559,198
GROSS UNREALIZED DEPRECIATION (34,951)
---------
NET UNREALIZED APPRECIATION $3,524,247
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
10
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES -- NOVEMBER 30, 1999
(UNAUDITED) WEALTHBUILDER PORTFOLIOS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEALTHBUILDER WEALTHBUILDER WEALTHBUILDER
GROWTH BALANCED PORTFOLIO GROWTH AND INCOME PORTFOLIO GROWTH PORTFOLIO
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
IN SECURITIES, AT MARKET VALUE
(SEE COST BELOW)............... $27,166,964 $12,161,905 $21,331,654
RECEIVABLE FOR DIVIDENDS AND
INTEREST AND OTHER
RECEIVABLES.................... 27,715 29 283
RECEIVABLE FOR FUND SHARES
ISSUED......................... 161,594 133,023 156,068
RECEIVABLE FROM INVESTMENT
ADVISOR AND AFFILIATES......... 0 3,219 2,607
ORGANIZATION COST, NET OF
AMORTIZATION................... 4,982 4,982 4,982
---------- ---------- ----------
TOTAL ASSETS....................... 27,361,255 12,303,158 21,495,594
---------- ---------- ----------
LIABILITIES
PAYABLE FOR FUND SHARES
REDEEMED....................... 36,950 0 2,400
PAYABLE FOR INVESTMENT ADVISER
AND AFFILIATES................. 1,521 0 0
PAYABLE TO OTHER RELATED
PARTIES........................ 20,096 10,498 16,401
ACCRUED EXPENSES AND OTHER
LIABILITIES.................... 26,026 21,687 28,289
---------- ---------- ----------
TOTAL LIABILITIES.................. 84,593 32,185 47,090
---------- ---------- ----------
TOTAL NET ASSETS................... $27,276,662 $12,270,973 $21,448,504
---------- ---------- ----------
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------------------------------------
PAID-IN CAPITAL.................. $23,595,822 $9,691,312 $18,037,889
UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS).................. 331,121 (35,217) (78,697)
UNDISTRIBUTED NET REALIZED GAIN
(LOSS) ON INVESTMENTS.......... 597,881 228,765 (34,935)
NET UNREALIZED APPRECIATION
(DEPRECIATION) OF
INVESTMENTS.................... 2,751,838 2,386,113 3,524,247
---------- ---------- ----------
TOTAL NET ASSETS................... $27,276,662 $12,270,973 $21,448,504
---------- ---------- ----------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE
- -------------------------------------------------------------------------------------------------------------
NET ASSETS......................... $27,276,662 $12,270,973 $21,448,504
SHARES OUTSTANDING................. 2,154,358 922,138 1,531,166
NET ASSET VALUE PER SHARE.......... $ 12.66 $ 13.31 $ 14.01
MAXIMUM OFFERING PRICE PER SHARE
(1).............................. $ 12.85 $ 13.51 $ 14.22
---------- ---------- ----------
INVESTMENT AT COST (NOTE 8)........ $24,415,126 $9,775,792 $17,807,407
---------- ---------- ----------
</TABLE>
(1) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/98.5 OF NET ASSET VALUE.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
11
<PAGE>
WEALTHBUILDER PORTFOLIOS STATEMENTS OF OPERATIONS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEALTHBUILDER WEALTHBUILDER WEALTHBUILDER
GROWTH BALANCED PORTFOLIO GROWTH AND INCOME PORTFOLIO GROWTH PORTFOLIO
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
DIVIDENDS........................ $ 315,836 $ 15,476 $ 5,031
INTEREST......................... 1,031 0 0
NET INVESTMENT INCOME ALLOCATED
FROM
AFFILIATED CORE PORTFOLIO(1)... 25,317 16,006 13,595
------------------------- --------------------------- ----------------
TOTAL INVESTMENT INCOME............ 342,184 31,482 18,626
------------------------- --------------------------- ----------------
EXPENSES
ADVISORY FEES.................... 43,872 19,293 27,364
ADMINISTRATION FEES.............. 13,395 5,898 8,455
CUSTODY.......................... 2,163 948 1,309
PORTFOLIO ACCOUNTING FEES........ 9,518 9,467 10,538
TRANSFER AGENT................... 27,586 12,153 16,772
DISTRIBUTION FEES................ 94,012 41,341 58,635
AMORTIZATION OF ORGANIZATION
COSTS.......................... 876 876 876
LEGAL AND AUDIT FEES............. 4,149 4,027 4,075
REGISTRATION FEES................ 6,592 5,393 7,288
DIRECTORS' FEES.................. 487 413 431
SHAREHOLDER REPORTS.............. 10,486 4,763 6,372
OTHER............................ 600 1,207 724
------------------------- --------------------------- ----------------
TOTAL EXPENSES..................... 213,736 105,779 142,839
------------------------- --------------------------- ----------------
LESS:
WAIVED FEES AND REIMBURSED
EXPENSES....................... (57,119) (36,947) (45,251)
NET EXPENSES..................... 156,617 68,832 97,588
------------------------- --------------------------- ----------------
NET INVESTMENT INCOME (LOSS)....... 185,567 (37,350) (78,962)
------------------------- --------------------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) FROM:
NON-AFFILIATED UNDERLYING
FUNDS.......................... 400,577 211,133 102,260
ALLOCATIONS FROM AFFILIATED CORE
PORTFOLIOS..................... 119,432 101,021 40,474
FOREIGN CURRENCY TRANSACTIONS
ALLOCATED FROM AFFILIATED CORE
PORTFOLIOS..................... (6,640) (4,092) (2,309)
------------------------- --------------------------- ----------------
NET REALIZED GAIN (LOSS) FROM
INVESTMENTS...................... 513,369 308,062 140,425
------------------------- --------------------------- ----------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) OF:
NON-AFFILIATED UNDERLYING
FUNDS.......................... 436,099 683,837 990,648
ALLOCATION FROM AFFILIATED CORE
PORTFOLIOS..................... 581,671 237,453 678,680
FOREIGN CURRENCY TRANSACTIONS
ALLOCATED FROM AFFILIATED CORE
PORTFOLIOS..................... (192) (42) (95)
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) OF
INVESTMENTS...................... 1,017,578 921,248 1,669,233
------------------------- --------------------------- ----------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS............ 1,530,947 1,229,310 1,809,658
------------------------- --------------------------- ----------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS....................... $ 1,716,514 $ 1,191,960 $ 1,730,696
------------------------- --------------------------- ----------------
</TABLE>
(1) NET OF FOREIGN WITHHOLDING TAXES OF $1,101, $1,000 AND $700, RESPECTIVELY
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
12
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS WEALTHBUILDER PORTFOLIOS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEALTHBUILDER GROWTH WEALTHBUILDER GROWTH AND WEALTHBUILDER GROWTH
BALANCED PORTFOLIO INCOME PORTFOLIO PORTFOLIO
---------------------------- ---------------------------- ----------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
NOV. 30, 1999 MAY 31, 1999 NOV. 30, 1999 MAY 31, 1999 NOV. 30, 1999 MAY 31, 1999
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
BEGINNING NET ASSETS..... $ 23,335,843 $ 9,299,644 $ 10,657,013 $ 8,622,787 $ 12,941,667 $ 5,695,234
------------- ------------- ------------- ------------- ------------- -------------
OPERATIONS:
NET INVESTMENT INCOME
(LOSS)................. 185,567 209,298 (37,350) (39,881) (78,962) (75,756)
NET REALIZED GAIN (LOSS)
ON SALE OF
INVESTMENTS............ 513,369 83,973 308,062 (83,367) 140,425 (171,121)
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS............ 1,017,578 1,436,960 921,248 1,117,723 1,669,233 1,600,465
------------- ------------- ------------- ------------- ------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ 1,716,514 1,730,231 1,191,960 994,475 1,730,696 1,353,588
------------- ------------- ------------- ------------- ------------- -------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
NET INVESTMENT INCOME.... 0 (93,210) 0 (733) 0 (777)
NET REALIZED GAIN ON SALE
OF INVESTMENTS......... 0 (12,759) 0 (8,125) 0 (18,171)
TOTAL DISTRIBUTION TO
SHAREHOLDERS........... 0 (105,969) 0 (8,858) 0 (18,948)
CAPITAL SHARE
TRANSACTIONS:
PROCEEDS FROM SHARES
SOLD................. 5,746,169 21,034,423 1,667,702 5,051,725 7,651,177 7,731,462
REINVESTMENT OF
DIVIDENDS............ 0 174 0 8,578 0 19,076
COST OF SHARES
REDEEMED............. (3,521,864) (8,622,660) (1,245,702) (4,011,694) (875,036) (1,838,745)
------------- ------------- ------------- ------------- ------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS........... 2,224,305 12,411,937 422,000 1,048,609 6,776,141 5,911,793
------------- ------------- ------------- ------------- ------------- -------------
INCREASE (DECREASE) IN
NET ASSETS............. 3,940,819 14,036,199 1,613,960 2,034,226 8,506,837 7,246,433
NET ASSETS:
- -------------------------------------------------------------------------------------------------------------------
ENDING NET ASSETS...... $ 27,276,662 $ 23,335,843 $ 12,270,973 $ 10,657,013 $ 21,448,504 $ 12,941,667
SHARE ISSUED AND
REDEEMED:
SHARES SOLD............ 472,124 1,852,950 128,342 446,691 572,632 655,532
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS............ 0 15 0 777 0 1,578
SHARES REDEEMED........ (290,569) (741,549) (97,404) (342,320) (66,277) (149,605)
NET INCREASE (DECREASE)
IN SHARES
OUTSTANDING............ 181,555 1,111,416 30,938 105,148 506,355 507,505
ENDING BALANCE OF
UNDISTRIBUTED NET
INVESTMENT INCOME...... $ 331,121 $ 145,554 $ (35,217) $ 2,133 $ (78,697) $ 265
------------- ------------- ------------- ------------- ------------- -------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
13
<PAGE>
WEALTHBUILDER PORTFOLIOS FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIO TO AVERAGE NET ASSETS (ANNUALIZED)(1)
------------------------------------------- PORTFOLIO NET ASSETS AT
NET INVESTMENT NET GROSS TOTAL TURNOVER END OF PERIOD
INCOME (LOSS) EXPENSES EXPENSES RETURN(2) RATE (000'S OMITTED)
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
WEALTHBUILDER GROWTH BALANCED PORTFOLIO
JUNE 1, 1999 TO NOVEMBER
30, 1999............... 1.48% 1.25% 1.74% 7.02% 3% $ 27,277
JUNE 1, 1998 TO MAY 31,
1999................... 1.28% 1.25% 1.85% 10.26% 59% $ 23,336
OCTOBER 1, 1997(3) TO MAY
31, 1998............... 0.02% 1.25% 2.64% 8.35% 20% $ 9,300
WEALTHBUILDER GROWTH AND INCOME PORTFOLIO
- -------------------------------------------------------------------------------------------------------------
JUNE 1, 1999 TO NOVEMBER
30, 1999............... (0.68) 1.25% 1.95% 11.29% 6% $ 12,271
JUNE 1, 1998 TO MAY 31,
1999................... (0.38) 1.25% 1.95% 9.11% 32% $ 10,657
OCTOBER 1, 1997(3) TO MAY
31, 1998............... (0.41) 1.25% 2.90% 9.75% 7% $ 8,623
WEALTHBUILDER GROWTH PORTFOLIO
- -------------------------------------------------------------------------------------------------------------
JUNE 1, 1999 TO NOVEMBER
30, 1999............... (1.01) 1.25% 1.86% 10.93% 4% $ 21,449
JUNE 1, 1998 TO MAY 31,
1999................... (0.84) 1.25% 2.00% 14.94% 31% $ 12,942
OCTOBER 1, 1997(3) TO MAY
31, 1998............... (0.50) 1.25% 3.32% 10.17% 16% $ 5,695
</TABLE>
(1) THESE RATIOS DO NOT INCLUDE EXPENSES FROM NON-AFFILIATED FUNDS.
(2) TOTAL RETURN CALCULATION DOES NOT INCLUDE SALES CHARGE.
(3) THE PORTFOLIOS COMMENCED OPERATIONS ON OCTOBER 1, 1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS WEALTHBUILDER PORTFOLIOS
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION
Wells Fargo Funds Trust (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company. The Company commenced operations on
November 8, 1999, and is currently comprised of 61 separate series. These
financial statements represent the Wells Fargo WealthBuilder Growth Balanced
Portfolio, Wells Fargo WealthBuilder Growth and Income Portfolio, and Wells
Fargo WealthBuilder Growth Portfolio (each, a "Portfolio", collectively, the
"Portfolios"), each a diversified series of the Company.
In November of 1999 the parent companies of Wells Fargo Bank, investment
advisor to the Stagecoach Family of Funds, and Norwest Investment Management,
Inc, investment advisor to the Norwest Advantage Family of Funds merged. The
Wells Fargo Funds Trust was created to succeed the assets and operations of
various Stagecoach and Norwest Advantage Funds. The predecessors to the
Portfolios in this annual report were as follows:
<TABLE>
<S> <C>
WEALTHBUILDER GROWTH BALANCED PORTFOLIO NORWEST WEALTHBUILDER II GROWTH BALANCED PORTFOLIO
WEALTHBUILDER GROWTH AND INCOME PORTFOLIO NORWEST WEALTHBUILDER II GROWTH AND INCOME PORTFOLIO
WEALTHBUILDER GROWTH PORTFOLIO NORWEST WEALTHBUILDER II GROWTH PORTFOLIO
</TABLE>
The Wells Fargo WealthBuilder Growth Balanced Portfolio, Wells Fargo
WealthBuilder Growth and Income Portfolio, and Wells Fargo WealthBuilder
Growth Portfolio are Portfolios which each seek to achieve its investment
objective by allocating its assets across asset classes of stocks, bonds and
money market instruments by investing in a number of affiliated and
non-affiliated funds ("Underlying Funds"). The Underlying Funds incur expenses
in seeking to achieve their investment objectives. The financial statements
and financial highlights for the Underlying Funds are presented in separate
financial statements and may be obtained from Wells Fargo Shareholder
Services. Under its trust instrument, the Trust is authorized to issue an
unlimited number of shares of beneficial interest without par value.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies which are consistently followed
by the Company in the preparation of its financial statements are in
conformity with generally accepted accounting principles ("GAAP") for
investment companies.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
SECURITY VALUATION
Investments in securities are valued at the close of each business day.
Securities which are traded on a national or foreign securities exchange or
the National Association of Securities Dealers Automated Quotation ("NASDAQ")
National Market are valued at the last reported sales price. In the absence of
any sale of such securities, and in the case of other securities, including
U.S. Government obligations, but excluding debt securities maturing in 60 days
or less, the valuations are based on the latest quoted bid prices. Securities
denominated in foreign currencies are translated into U.S. dollars using the
closing rates of exchange in effect on the day of valuation. Securities for
which quotations are not readily available are valued at fair value as
determined by policies set by the Company's Board of Trustees.
Debt securities maturing in 60 days or less are valued at amortized cost
pursuant to Rule 2a-7. The amortized cost method involves valuing a security
at its cost, plus accretion of discount or minus amortization of premium over
the period until maturity, which approximates market value.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Securities transactions are recorded on a trade date basis. Realized gains or
losses are reported on the basis of identified cost of securities delivered.
Interest income is accrued daily and bond discounts are accreted and premiums
are amortized under provisions of the Internal Revenue Code of 1986, as
amended (the "Code").
15
<PAGE>
WEALTHBUILDER PORTFOLIOS NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Dividend income is recognized on the ex-dividend date except for certain
dividends from foreign securities which are recorded as soon as the Fund is
informed of the ex-dividend date. Dividend income from foreign securities is
recorded net of foreign taxes withheld where recovery of such taxes is not
assured.
FOREIGN CURRENCY TRANSLATION
The changes in net assets arising from changes in exchange rates and the
changes in net assets resulting from changes in market prices of securities at
fiscal period-end are not separately presented. Such changes are recorded with
net realized and unrealized gain from investments. However, gains and losses
from certain foreign currency transactions are treated as ordinary income for
U.S. Federal income tax purposes.
REPURCHASE AGREEMENTS
Each Portfolio may invest in repurchase agreements and may participate in
pooled repurchase agreement transactions with other Portfolios advised by
Wells Fargo Bank, N.A. ("WFB"). The repurchase agreements must be fully
collateralized based on values that are marked to market daily. The collateral
may be held by an agent bank under a tri-party agreement. It is the
Portfolios' custodian's responsibility to value collateral daily and to take
action to obtain additional collateral as necessary to maintain market value
equal to or greater than the resale price. The repurchase agreements held by
the Portfolios are collateralized by instruments such as U.S. Treasury or
federal agency obligations.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders of net investment income, or net realized
capital gains, if any, are declared and distributed at least annually.
Distributions are based on amounts calculated in accordance with the
applicable federal income tax regulations, which may differ from generally
accepted accounting principles. The timing and character of distributions made
during the period from net investment income or net realized gains may also
differ from their ultimate characterization for federal income tax purposes.
The differences between the income or gains distributed on a book versus tax
basis are shown as excess distributions of net investment income and net
realized gain on sales of investments in the accompanying Statements of
Changes in Net Assets. To the extent that these differences are permanent in
nature, such amounts are reclassified within the capital accounts based on
their federal tax-basis treatment; temporary differences do not require
reclassifications.
FEDERAL INCOME TAXES
Each Portfolio is treated as a separate entity for federal income tax
purposes. It is the policy of each Portfolio of the Company to continue to
qualify as a regulated investment company by complying with the provisions
applicable to regulated investment companies, as defined in the Code, and to
make distributions of substantially all of its investment company taxable
income and any net realized capital gains (after reduction for capital loss
carryforwards) sufficient to relieve it from all, or substantially all,
federal income taxes. Accordingly, no provision for federal income taxes was
required at November 30, 1999.
The following Portfolios had estimated net capital loss carryforwards at May
31, 1999, which are available to offset future net realized capital gains:
<TABLE>
<CAPTION>
Portfolio Year Expires Capital Loss Carryforwards
<S> <C> <C>
WEALTHBUILDER GROWTH AND INCOME
PORTFOLIO 2007 $ 75,981
WEALTHBUILDER GROWTH PORTFOLIO 2007 168,101
</TABLE>
DEFERRED ORGANIZATION COSTS
Certain costs incurred in connection with the organization of the Portfolios
and their initial registration with the Securities and Exchange Commission and
with the various states are being amortized on a straight-line basis over 60
months from the date each Portfolio commenced operations.
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS WEALTHBUILDER PORTFOLIOS
- --------------------------------------------------------------------------------
3. ADVISORY FEES
The Company has entered into separate advisory contracts on behalf of the
Portfolios with Wells Fargo Bank ("WFB"). Pursuant to the contracts, WFB has
agreed to provide Portfolios with daily portfolio management, for which WFB is
entitled to be paid a monthly advisory fee at the following annual rates:
<TABLE>
<CAPTION>
Portfolio % of Average Daily Net Assets
<S> <C>
WEALTHBUILDER GROWTH BALANCED PORTFOLIO 0.35%
WEALTHBUILDER GROWTH AND INCOME PORTFOLIO 0.35%
WEALTHBUILDER GROWTH PORTFOLIO 0.35%
</TABLE>
For the WealthBuilder Growth Balanced Portfolio, WealthBuilder Growth and
Income Portfolio, and WealthBuilder Growth Portfolio which are invested in
various Core Portfolios, WFB is entitled to receive an investment advisory fee
of 0.35% of each Portfolio's average daily net assets for providing advisory
services including the determination of the asset allocations of each
Portfolio's investments in the various Core Portfolios. WFB also acts as
advisor to, and is entitled to receive a fee from each Core Portfolio, with
the amount dependent on the allocation of assets among the various portfolios.
Prior to November 8, 1999 the Portfolios were charged at the same rate as
above.
Each Portfolio that invests its assets in one or more of the Core Portfolios
may withdraw its investments from its corresponding Core Portfolio(s) at any
time if the Board of Directors determines that is in the best interests of the
Portfolio to do so. Upon such redemption and subsequent investment in a
portfolio of securities, WFB (and the corresponding sub-advisor) may receive
an investment fee for the management of those assets. If the redeemed assets
are invested in one or more Core Portfolios, WFB (and the corresponding
sub-advisor) does not receive any compensation.
4. DISTRIBUTION FEES
The Company has adopted a Distribution Plan ("Plan") for the Portfolios
pursuant to Rule 12b-1 under the 1940 Act. The Plan authorizes the payment of
all or part of the cost of preparing, printing, and distributing prospectuses
and distribution related services. Distribution fees are charged to the
Portfolios and paid to Stephens, Inc. ("Stephens") at a rate of 0.75% of
average daily net assets. The distribution fees paid on behalf of the
Portfolios for the period ended November 30, 1999 are disclosed on the
Statement of Operations. Prior to November 8, 1999, the Portfolios were
charged distribution fees at the same rate.
5. ADMINISTRATION
The Company has entered into an Administration Agreement with WFB whereby WFB
is entitled to receive monthly fees at the annual rate of 0.15% of each
Portfolio's average daily net assets.
Prior to November 8, 1999, the Administrator of each Portfolio was Forum
Administrative Services, LLC ("FAdS"). The Portfolios were charged at the
annual rate of 0.05% of each Portfolio's average daily net assets.
6. OTHER FEES AND TRANSACTIONS WITH AFFILIATES
The Company has entered into a transfer agency contract on behalf of the
Funds with Boston Financial Data Services ("BFDS") to replace WFB as the
transfer agent for the Company. Under the transfer agency contract, BFDS is
entitled to receive, on a monthly basis, transfer agency fees based on the
number of accounts and transactions of each Portfolio. WFB provides
sub-transfer agency services to the Portfolios. Prior to November 8, Norwest
served as transfer agent and shareholder service agent. For these services,
Norwest received a fee at an annual rate of 0.25% of each Portfolio's average
daily net assets.
Forum Accounting Services, LLC provides portfolio accounting services to each
Portfolio. For these services Forum is entitled to receive a fixed monthly per
fund fee, a basis point fee of 0.0025% of the average daily net assets of each
Fund, and will be reimbursed for all out of pocket expenses reasonably
incurred in providing these services. Prior to November 8, 1999, Forum
provided portfolio accounting services for the predecessor Portfolios and
received the same fees and reimbursements.
The Company has entered into contracts on behalf of each Portfolio with
Norwest Bank Minnesota, N.A. ("Norwest"), whereby Norwest is responsible for
providing custody services for the Portfolios. Pursuant to the contracts,
Norwest is entitled to certain transaction charges plus a monthly fee for
custody services at the annual rate of 0.02% of the average daily net assets
of each Portfolio. Prior to November 8, 1999 the Portfolios were charged the
above services at the same rate.
17
<PAGE>
WEALTHBUILDER PORTFOLIOS NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Certain officers and one director of the Company are also officers of
Stephens. As of November 30, 1999, Stephens owned no shares of the Portfolios.
7. WAIVED FEES AND REIMBURSED EXPENSES
All amounts shown as waived fees or reimbursed expenses on the Statement of
Operations, for the period ended November 30, 1999, were waived by WFB. Fee
waivers are contractual and apply for one year from the closing date of the
reorganization. After this time, the Advisor, with Board approval, may reduce
or eliminate such waivers.
<TABLE>
<CAPTION>
Fees Waived by FAdS Fees Waived by WFB
<S> <C> <C>
WEALTHBUILDER GROWTH BALANCED PORTFOLIO $48,497 $12,924
WEALTHBUILDER GROWTH AND INCOME
PORTFOLIO 29,558 9,317
WEALTHBUILDER GROWTH PORTFOLIO 35,467 12,964
</TABLE>
8. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, exclusive of short-term securities
(securities with maturities of one year or less at purchase date) and U.S.
Government Securities, for each Portfolio for the six month period ended
November 30, 1999, were as follows:
<TABLE>
<CAPTION>
AGGREGATE PURCHASES AND SALES
Portfolio Purchases at Cost Sales Proceeds
<S> <C> <C>
WEALTHBUILDER GROWTH BALANCED PORTFOLIO $1,064,489 $680,656
WEALTHBUILDER GROWTH AND INCOME
PORTFOLIO 967,951 607,895
WEALTHBUILDER GROWTH PORTFOLIO 1,783,588 817,370
</TABLE>
9. FUND CONSOLIDATION AND MERGER
Concurrent with the establishment of the Trust, the Board of Directors of the
Stagecoach Family of Funds and the Board of Trustees of the Norwest Advantage
Funds approved a consolidation agreement providing for the acquisition of the
assets and assumption of liabilities of certain Stagecoach and Norwest
Advantage Funds into the Wells Fargo Funds Trust. Effective on the close of
business November 5, 1999, the Stagecoach and/or Norwest Advantage Funds were
consolidated into the respective Wells Fargo Funds Trust through a tax-free
exchange of shares.
18
<PAGE>
LIST OF ABBREVIATIONS WEALTHBUILDER PORTFOLIOS
- --------------------------------------------------------------------------------
The following is a list of common abbreviations for terms and entities which may
have appeared in this report.
ABAG -- ASSOCIATION OF BAY AREA GOVERNMENTS
ADR -- AMERICAN DEPOSITORY RECEIPTS
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
AMT -- ALTERNATIVE MINIMUM TAX
ARM -- ADJUSTABLE RATE MORTGAGES
BART -- BAY AREA RAPID TRANSIT
CDA -- COMMUNITY DEVELOPMENT AUTHORITY
CDSC -- CONTINGENT DEFERRED SALES CHARGE
CGIC -- CAPITAL GUARANTY INSURANCE COMPANY
CGY -- CAPITAL GUARANTY CORPORATION
CMT -- CONSTANT MATURITY TREASURY
COFI -- COST OF FUNDS INDEX
CONNIE LEE -- CONNIE LEE INSURANCE COMPANY
COP -- CERTIFICATE OF PARTICIPATION
CP -- COMMERCIAL PAPER
CTF -- COMMON TRUST FUND
DW&P -- DEPARTMENT OF WATER & POWER
DWR -- DEPARTMENT OF WATER RESOURCES
EDFA -- EDUCATION FINANCE AUTHORITY
FGIC -- FINANCIAL GUARANTY INSURANCE CORPORATION
FHA -- FEDERAL HOUSING AUTHORITY
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
FRN -- FLOATING RATE NOTES
FSA -- FINANCIAL SECURITY ASSURANCE, INC
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GO -- GENERAL OBLIGATION
HFA -- HOUSING FINANCE AUTHORITY
HFFA -- HEALTH FACILITIES FINANCING AUTHORITY
IDA -- INDUSTRIAL DEVELOPMENT AUTHORITY
LIBOR -- LONDON INTERBANK OFFERED RATE
LLC -- LIMITED LIABILITY CORPORATION
LOC -- LETTER OF CREDIT
LP -- LIMITED PARTNERSHIP
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
MFHR -- MULTI-FAMILY HOUSING REVENUE
MUD -- MUNICIPAL UTILITY DISTRICT
MTN -- MEDIUM TERM NOTE
PCFA -- POLLUTION CONTROL FINANCE AUTHORITY
PCR -- POLLUTION CONTROL REVENUE
PFA -- PUBLIC FINANCE AUTHORITY
PLC -- PRIVATE PLACEMENT
PSFG -- PUBLIC SCHOOL FUND GUARANTY
RAW -- REVENUE ANTICIPATION WARRANTS
RDA -- REDEVELOPMENT AUTHORITY
RDFA -- REDEVELOPMENT FINANCE AUTHORITY
R&D -- RESEARCH & DEVELOPMENT
SFMR -- SINGLE FAMILY MORTGAGE REVENUE
TBA -- TO BE ANNOUNCED
TRAN -- TAX REVENUE ANTICIPATION NOTES
USD -- UNIFIED SCHOOL DISTRICT
V/R -- VARIABLE RATE
WEBS -- WORLD EQUITY BENCHMARK SHARES
19
<PAGE>
Wells Fargo Bank, N.A. and certain of its affiliates provide investment
advisory, sub-advisory and/or shareholder services for the Wells Fargo
Funds. The Funds are sponsored and distributed by STEPHENS INC., Member
NYSE/ SIPC. Wells Fargo Bank, N.A. and its affiliates are not affiliated
with Stephens Inc.
This report and the financial statements contained herein are submitted for
the general information of the shareholders of the Wells Fargo Funds. If
this report is used for promotional purposes, distribution of the report
must be accompanied or preceded by a current prospectus. For a prospectus
containing more complete information, including charges and expenses, call
1-800-222-8222. Read the prospectus carefully before you invest or send
money.
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P.O. Box 8266
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