<PAGE>
[LOGO]
Annual Report
WELLS FARGO
WEALTHBUILDER PORTFOLIOS
May 31, 2000
WEALTHBUILDER
GROWTH BALANCED PORTFOLIO
WEALTHBUILDER
GROWTH AND INCOME PORTFOLIO
WEALTHBUILDER
GROWTH PORTFOLIO
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WEALTHBUILDER PORTFOLIOS
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TABLE OF CONTENTS
LETTER TO SHAREHOLDER ............................ 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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STATEMENTS OF ASSETS AND LIABILITIES ................... 11
STATEMENTS OF OPERATIONS ......................... 12
STATEMENTS OF CHANGES IN NET ASSETS .................... 13
FINANCIAL HIGHLIGHTS ........................... 14
NOTES TO FINANCIAL STATEMENTS ........................ 16
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INDEPENDENT AUDITORS' REPORT ........................ 19
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TAX INFORMATION ............................... 20
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LIST OF ABBREVIATIONS ............................ 21
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NOT FDIC INSURED--NO BANK GUARANTEE--MAY LOSE VALUE
<PAGE>
WEALTHBUILDER PORTFOLIOS
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DEAR VALUED SHAREHOLDER,
Thank you for investing in Wells Fargo Funds.
We're pleased to provide this annual report for the period ended May 31,
2000. This report provides information about the three Wells Fargo
WealthBuilder Portfolios, including economic and market commentary for the
period.
Heightened volatility among stocks and bonds over the past year reflected the
Federal Reserve Board's effort to slow economic growth and contain
inflationary pressures through a series of interest rate hikes. Short-term
rates climbed from 4.75% to 6.50% over the period. We anticipate additional
rate hikes until the economy exhibits clear signs of a slowdown.
At first, equity markets proved resilient to the rate increases, with
unprecedented rallies among domestic growth stocks and small-cap technology
stocks leading the Dow and Nasdaq to record highs in early 2000. Yet despite
continued strong economic fundamentals, the scenario soon changed. As Nasdaq's
technology-laden New Economy stocks climbed ever higher, the Dow's blue-chip
Old Economy stocks began a downward spiral, falling 5% in the first quarter
alone. This was triggered by the burden of higher rates, which impact
corporate earnings by raising borrowing costs.
In April's second week, the markets lost confidence in technology sector
securities, with the Nasdaq dropping 25% in five days. Although equity markets
have partially recovered from the April sell-off, most market indices remain
down for the year. Looking ahead, we expect large-cap technology companies to
lead the stock market throughout the remainder of the year. Other promising
sectors within the blue-chip marketplace include financial services, utilities
and integrated oil stocks.
Against a backdrop of falling stock prices and rising bond yields, the
Tactical Asset Allocation (TAA) Model, a proprietary investment strategy used
to manage the mix of stocks and bonds within the Growth Balanced Portfolio,
signaled a 15% shift toward fixed income investments on November 29, 1999,
creating the current mix of 51.50% stocks and 48.50% bonds. When the TAA Model
signals the probability of stocks outperforming bonds, the mix will return to
its traditional 65/35 weighting.
Other events also shaped the bond market over the period. As U.S. Treasury
bond yields approached 7.00% during the first quarter of 2000, the U.S.
Treasury Department announced a plan to buy back and retire debt by the end of
2000. Demand for 30-year Treasuries sent yields to 6.10%, with Treasury bond
prices, which move opposite yields, posting a total return of 9% during the
first quarter--a significant improvement over the 14.70% loss in 1999. The
recent tumult in the bond market also created an inverted yield curve, the
path traced by interest rates at various maturities, with some shorter-term
bonds yielding more than longer-term bonds.
Going forward, U.S. Treasuries should continue to perform well, with other
stable, shorter-term securities gaining favor because of relatively attractive
yields compared to Treasuries. Also, yields on long-term municipal securities
should continue to encourage more broad-based demand in that bond sector.
Amid volatile markets, it's important to maintain a balanced portfolio to
weather rapidly changing conditions. If you have any questions about your
investments or need further information, please contact your investment
professional, or contact us at 1-800-222-8222.
Again, thank you choosing Wells Fargo Funds. We value your business and will
continue to offer an expanding array of investment options designed to help
you achieve your personal goals.
<TABLE>
<S> <C>
[LOGO]
MICHAEL J. HOGAN
PRESIDENT
WELLS FARGO FUNDS
</TABLE>
1
<PAGE>
WEALTHBUILDER PORTFOLIOS PERFORMANCE HIGHLIGHTS
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WEALTHBUILDER GROWTH BALANCED PORTFOLIO
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Wells Fargo WealthBuilder Growth Balanced Portfolio (the "Portfolio")
seeks a balance of capital appreciation and current income.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGER
Galen Blomster, CFA
INCEPTION DATE
10/1/97
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Portfolio returned 10.72%(1) for the 12-month period ended May 31, 2000,
excluding sales charges. The Portfolio outperformed its benchmark, the S&P 500
Index(2), which returned 10.48% during the period. In addition, the Portfolio
return was twice that of its Lipper peer group, the Lipper Balanced Funds
Average(3), which returned 5.39% for 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 May 31, 2000. The proportion of
assets in stocks and bonds is determined by the Tactical Asset Allocation
(TAA) Model, a proprietary investment strategy that seeks to enhance
performance by shifting assets between stocks and bonds depending on market
conditions. As of May 31, 2000, 48.50% of the assets were invested in
fixed-income funds, while the remaining 51.50% were in equity holdings. The
bond investing styles included U.S. Government, agency, mortgage-backed,
corporate and international holdings. The equity styles were large company
growth, large company value, small company and international. Of the 12 mutual
funds in the portfolio, six were Wells Fargo Funds; two were managed by
Putnam, one by AIM, one by Dreyfus, one by American Express and one by
Massachusetts Financial Services (MFS).
The Portfolio made four changes to its holdings at the beginning of May 2000.
The Wells Fargo International Portfolio was replaced with the Wells Fargo
International Equity Portfolio. The Wells Fargo Small Cap Opportunities Fund
was replaced with the Dreyfus Emerging Leaders Fund; the Franklin Small Cap
Growth Fund was replaced with the Wells Fargo Small Cap Growth Fund; and the
Templeton Global Bond Fund was replaced with the American Express Global Bond
Fund. Despite volatile stock and bond markets, the period ended May 31, 2000,
was another profitable time for most equity investors. A strong economy,
combined with low, stable inflation continued to fuel the stock market rally.
Large company growth stocks were the most consistent performers during the
period, while small cap growth stocks performed exceptionally well in the
fourth quarter of 1999. International stocks also did well, despite a surging
U.S. dollar. In contrast, large-cap value stocks consistently underperformed
during the past 12 months due to rising interest rates.
At the same time, the economic environment during the period was detrimental
to the bond market. With the continued strong economy, the Federal Reserve
Board tightened monetary policy six times since last May. Bond yields rose
throughout much of the period, except during February and March. With the
increasing disparity in valuation between stocks and bonds late last year, the
TAA Model recommended a 15% shift in Portfolio assets from stocks to bonds on
November 29, 1999, creating an equal mix of stocks and bonds within the
Portfolio.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
Since the Portfolio shifted toward bonds at the end of November last year,
the S&P 500 Index was up 1.0%, while most bond returns were also up about
1.0%. As a result, the valuation disparity between stocks and bonds remains
compellingly attractive for bonds, according to the TAA Model. The Portfolio
will remain over-weighted in bonds until the relative valuation in the stock
and bond markets returns to a more normal level.
--------------------------------------------------------------------------------
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 are 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
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PERFORMANCE HIGHLIGHTS WEALTHBUILDER PORTFOLIOS
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AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF MAY 31, 2000)
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<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
---------------------------------------- ----------------------------
Year-To-Date 1-Year Since Inception 1-Year Since Inception
<S> <C> <C> <C> <C> <C>
WEALTHBUILDER GROWTH
BALANCED PORTFOLIO (0.31) 10.72 11.07 9.06 10.44
BENCHMARK
S&P 500 INDEX (2.82) 10.48
LEHMAN BROTHERS U.S.
GOVERNMENT/CREDIT(4) 2.10 1.91
</TABLE>
PORTFOLIO DATA (AS OF MAY 31, 2000)
----------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 70%
NAV 12.72
</TABLE>
PORTFOLIO ALLOCATION(6)
(AS OF MAY 31, 2000)
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Stocks 51.50%
Bonds 48.50%
</TABLE>
GROWTH OF $10,000 INVESTMENT(5)
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WEALTHBUILDER GROWTH LEHMAN BROTHERS
BALANCED PORTFOLIO S&P 500 INDEX RUSSELL 2000 INDEX MSCI EAFE INDEX U.S. GOVERNMENT/CREDIT
<S> <C> <C> <C> <C> <C>
10/1/97 $9,850 $10,000 $10,000 $10,000 $10,000
10/31/97 $9,811 $9,666 $9,561 $9,231 $10,160
11/30/97 $9,820 $10,114 $9,499 $9,137 $10,214
12/31/97 $9,912 $10,287 $9,665 $9,216 $10,321
1/31/98 $9,971 $10,401 $9,512 $9,638 $10,466
2/28/98 $10,386 $11,151 $10,215 $10,256 $10,445
3/31/98 $10,702 $11,721 $10,636 $10,572 $10,477
4/30/98 $10,811 $11,841 $10,695 $10,658 $10,530
5/31/98 $10,673 $11,637 $10,118 $10,609 $10,643
6/30/98 $10,762 $12,110 $10,140 $10,691 $10,751
7/31/98 $10,554 $11,981 $9,318 $10,803 $10,760
8/31/98 $9,418 $10,250 $7,509 $9,466 $10,970
9/30/98 $9,714 $10,907 $8,097 $9,179 $11,284
10/31/98 $10,356 $11,794 $8,427 $10,138 $11,204
11/30/98 $10,910 $12,509 $8,868 $10,660 $11,271
12/31/98 $11,419 $13,229 $9,417 $11,083 $11,299
1/31/99 $11,668 $13,786 $9,543 $11,053 $11,379
2/28/99 $11,310 $13,356 $8,770 $10,792 $11,108
3/31/99 $11,608 $13,890 $8,907 $11,246 $11,164
4/30/99 $11,956 $14,428 $9,705 $11,703 $11,191
5/31/99 $11,767 $14,087 $9,846 $11,103 $11,076
6/30/99 $12,175 $14,854 $10,291 $11,538 $11,041
7/31/99 $12,026 $14,390 $10,009 $11,884 $11,011
8/31/99 $11,896 $14,319 $9,639 $11,931 $11,002
9/30/99 $11,797 $13,926 $9,641 $12,054 $11,101
10/31/99 $12,235 $14,808 $9,680 $12,506 $11,130
11/30/99 $12,593 $15,108 $10,258 $12,939 $11,124
12/31/99 $13,070 $15,998 $11,420 $14,101 $11,056
1/31/00 $12,824 $15,195 $11,236 $13,206 $11,053
2/29/00 $13,070 $14,908 $13,091 $13,561 $11,191
3/31/00 $13,582 $16,366 $12,228 $14,087 $11,353
4/30/00 $13,295 $15,873 $11,492 $13,346 $11,298
5/31/00 $13,029 $15,548 $10,822 $13,021 $11,288
</TABLE>
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(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 Portfolio's Advisor has committed through
September 30, 2001 to waive fees and/or reimburse expenses to the extent
necessary to maintain a certain net operating expense ratio for the Portfolio.
Actual reductions of operating expenses can increase total return to
shareholders. Without these reductions, the Portfolio's returns would have been
lower.
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 portfolio.
Effective at the close of business November 5, 1999, the Norwest Advantage Funds
were reorganized into the Wells Fargo Funds. The maximum front-end sales charge
is 1.50%.
(2) "Standard & Poor's", "S&P", "S&P500", "Standard & Poor's 500" and "500" are
trademarks of McGraw-Hill, Inc. and have been licensed. The Portfolio is not
sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's
makes no representation regarding the advisability of investing in any fund. 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.
(3) 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. Past performance is no guarantee of
future results. You cannot invest directly in a Lipper average.
(4) The Lehman Brothers U.S. Government/Credit Index is an unmanaged index that
includes securities in the Lehman Brothers U.S. Government Index and the Lehman
Brothers U.S. Credit Index. The Lehman Brothers U.S. Government Index is
composed of U.S. Treasury securities with maturities of one year or more and
publicly issued debt of U.S. Government Agencies. The Lehman Brothers
U.S. Credit Index is composed of publicly issued U.S. corporate and specified
foreign debentures and secured notes that meet the specified maturity,
liquidity, and quality requirements. To qualify, bonds must be SEC-registered.
You cannot invest directly in an index.
(5) 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.
The Russell 2000 Index is an unmanaged, market-value weighted index, which
measures performance of the 2,000 companies that are between the 1000th and
3000th largest in the market. The Morgan Stanley Capital International Europe,
Australasia and Far East ("MSCI EAFE") Stock Index is an unmanaged group of
securities widely regarded by investors to be representations of the stock
markets of Europe, Australasia and the Far East. You cannot invest directly in
an Index.
(6) Portfolio holdings are subject to change.
3
<PAGE>
WEALTHBUILDER PORTFOLIOS PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
WEALTHBUILDER GROWTH AND INCOME PORTFOLIO
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Wells Fargo WealthBuilder Growth and Income Portfolio (the "Portfolio")
seeks long-term capital appreciation with a secondary emphasis on income.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGER
Galen Blomster, CFA
INCEPTION DATE
10/1/97
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Portfolio returned 19.02%(1) for the 12-month period that ended May 31,
2000, excluding sales charges. The Portfolio outperformed its benchmark, the
S&P 500 Index(2), which returned 10.48% during the period. Please keep in mind
that past performance is no guarantee of future results.
The assets of the WealthBuilder Growth and Income Portfolio are invested in
eight different equity mutual funds. The Portfolio seeks enhanced performance
with reduced volatility through diversification among different equity
investing styles. Accordingly, as of May 31, 2000, 29.90% of the assets were
invested in the large company growth style, 30.20% in the large company value
style, 19.90% in the small company style and 20.00% in international holdings.
Of the eight mutual funds in the portfolio, four are Wells Fargo Funds, two
are managed by Putnam, one by AIM and one by Dreyfus.
The Portfolio made three changes in the holdings at the beginning of May
2000. The Wells Fargo International Portfolio was replaced with the Wells
Fargo International Equity Portfolio; the Wells Fargo Small Cap Opportunities
Fund was replaced with the Dreyfus Emerging Leaders Fund; and the Franklin
Small Cap Growth Fund was replaced with the Wells Fargo Small Cap Growth Fund.
Despite volatile markets, the 12 months that ended May 31, 2000, was another
profitable time for most equity investors. A strong economy, combined with
low, stable inflation continued to fuel the stock market rally. Large company
growth stocks were the most consistent performers during the period, while
small cap growth stocks performed exceptionally well in the fourth quarter of
the calendar year 1999. International stocks also did very well, despite a
surging U.S. dollar. In contrast, large-cap value stocks consistently under-
performed during the period because of rising interest rates.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
During heightened equity market volatility and rapid changes in market
leadership, such as investors have witnessed over the past 12 months,
maintaining a long-term strategic asset allocation can prove most beneficial.
Looking ahead, volatility will continue to characterize the marketplace, which
reinforces the importance of well-diversified portfolios.
4
<PAGE>
PERFORMANCE HIGHLIGHTS WEALTHBUILDER PORTFOLIOS
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF MAY 31, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
----------------------------------------- -----------------------------
Year-To-Date 1-Year Since Inception 1-Year Since Inception
<S> <C> <C> <C> <C> <C>
WEALTHBUILDER GROWTH AND
INCOME PORTFOLIO (1.12) 19.02 14.23 17.23 13.58
BENCHMARK
S&P 500 INDEX (2.82) 10.48
</TABLE>
PORTFOLIO DATA (AS OF MAY 31, 2000)
----------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 63%
NAV 14.10
</TABLE>
PORTFOLIO ALLOCATION(4)
(AS OF MAY 31, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STOCKS 99%
<S> <C>
Repurchase Agreements 1%
</TABLE>
GROWTH OF $10,000 INVESTMENT(3)
----------------------------------------------
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>
10/1/97 $9,850 $10,000 $10,000 $10,000
10/31/97 $9,446 $9,666 $9,561 $9,231
11/30/97 $9,584 $10,114 $9,499 $9,137
12/31/97 $9,727 $10,287 $9,665 $9,216
1/31/98 $9,835 $10,401 $9,512 $9,638
2/28/98 $10,456 $11,151 $10,215 $10,256
3/31/98 $10,929 $11,721 $10,636 $10,572
4/30/98 $11,067 $11,841 $10,695 $10,658
5/31/98 $10,811 $11,637 $10,118 $10,609
6/30/98 $10,949 $12,110 $10,140 $10,691
7/31/98 $10,604 $11,981 $9,318 $10,803
8/31/98 $8,948 $10,250 $7,509 $9,466
9/30/98 $9,293 $10,907 $8,097 $9,179
10/31/98 $9,963 $11,794 $8,427 $10,138
11/30/98 $10,584 $12,509 $8,868 $10,660
12/31/98 $11,154 $13,229 $9,417 $11,083
1/31/99 $11,480 $13,786 $9,543 $11,053
2/28/99 $11,085 $13,356 $8,770 $10,792
3/31/99 $11,509 $13,890 $8,907 $11,246
4/30/99 $12,003 $14,428 $9,705 $11,703
5/31/99 $11,795 $14,087 $9,846 $11,103
6/30/99 $12,456 $14,854 $10,291 $11,538
7/31/99 $12,239 $14,390 $10,009 $11,884
8/31/99 $12,081 $14,319 $9,639 $11,931
9/30/99 $11,884 $13,926 $9,641 $12,054
10/31/99 $12,565 $14,808 $9,680 $12,506
11/30/99 $13,127 $15,108 $10,258 $12,939
12/31/99 $14,198 $15,998 $11,420 $14,101
1/31/00 $13,760 $15,195 $11,236 $13,206
2/29/00 $14,088 $14,908 $13,091 $13,561
3/31/00 $15,024 $16,366 $12,228 $14,087
4/30/00 $14,536 $15,873 $11,492 $13,346
5/31/00 $14,038 $15,548 $10,822 $13,021
</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 are 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.
(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 Portfolio's Advisor has committed through
September 30, 2001 to waive fees and/or reimburse expenses to the extent
necessary to maintain a certain net operating expense ratio for the Portfolio.
Actual reductions of operating expenses can increase total return to
shareholders. Without these reductions, the Portfolio's returns would have been
lower.
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
portfolio. Effective the close of business November 5, 1999, the Norwest
Advantage Funds were reorganized into the Wells Fargo Funds. The maximum
front-end sales charge is 1.50%.
(2) "Standard & Poor's", "S&P", "S&P500", "Standard & Poor's 500" and "500" are
trademarks of McGraw-Hill, Inc. and have been licensed. The Portfolio is not
sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's
makes no representation regarding the advisability of investing in any fund. 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.
(3) 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.
The Russell 2000 Index is an unmanaged, market-value weighted index, which
measures performance of the 2,000 companies that are between the 1000th and
3000th largest in the market. The Morgan Stanley Capital International Europe,
Australasia and Far East ("MSCI EAFE") Stock Index is an unmanaged group of
securities widely regarded by investors to be representations of the stock
markets of Europe, Australasia and the Far East. You cannot invest directly in
an Index.
(4) Portfolio holdings are subject to change.
5
<PAGE>
WEALTHBUILDER PORTFOLIOS PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
WEALTHBUILDER GROWTH PORTFOLIO
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Wells Fargo WealthBuilder Growth Portfolio (the "Portfolio") seeks
long-term capital appreciation with no emphasis on income.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGER
Galen Blomster, CFA
INCEPTION DATE
10/1/97
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Portfolio returned 18.53%(1) for the 12-month period ended May 31, 2000,
excluding sales charges. The Portfolio outperformed its benchmark, the S&P 500
Index(2), which returned 10.48% during the period. 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 the Tactical Equity Allocation (TEA) Model, a
proprietary investment strategy that seeks to enhance performance by shifting
investment emphasis among equity styles depending on market conditions.
Accordingly, as of May 31, 2000, 68.00% of the assets were invested in the
large company growth style, 14.50% in the large company value style, 8.00% in
the small company style and 9.50% in the international style. Of the eight
mutual funds in the Portfolio, four are Wells Fargo Funds; two are managed by
Putnam, one by AIM and one by Dreyfus.
The Portfolio made three changes in the portfolio holdings at the beginning
of May 2000. The Wells Fargo International Portfolio was replaced with the
Wells Fargo International Equity Portfolio; the Wells Fargo Small Cap
Opportunities Fund was replaced with the Dreyfus Emerging Leaders Fund; and
the Franklin Small Cap Growth Fund was replaced with the Wells Fargo Small Cap
Growth Fund.
Despite volatile markets, the period that ended May 31, 2000, was another
profitable time for growth stock investors. A strong economy combined with low
inflation continued to fuel the stock market rally. Large company growth
stocks were the most consistent performers during the period, while small cap
growth stocks performed exceptionally well in the fourth quarter of 1999.
International stocks also performed well, despite a surging U.S. dollar. In
contrast, large company value stocks underperformed during the period, as the
Federal Reserve Board raised interest rates in an attempt to slow the economy
and contain inflation expectations.
The Tactical Equity Allocation Model continued to favor domestic, large
company, growth stocks during the period. Although the Portfolio considered
shifting assets from domestic stocks to international stocks early in 2000, a
strengthening U.S. dollar and a flattening yield curve ultimately did not
support the change. The Portfolio also came close to shifting toward small cap
stocks, as the measure of momentum favored small cap stocks in February and
March. Again, fundamentals did not support a shift away from large cap stocks
because of repeated Federal Reserve Board rate hikes. Small cap technology
stocks peaked on March 10, 2000, and continued to surrender much of their
earlier gains.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
The Portfolio maintains a domestic, large cap, growth stock emphasis. This
asset allocation emphasis is supported by both the measure of market momentum
and the underlying fundamentals employed in the Tactical Equity Allocation
Model. The degree to which the economy slows in the months ahead, combined
with the Federal Reserve Board's need to tighten further, likely will impact
the future asset allocation in the Portfolio's domestic equity portfolio. As
always, the value of the U.S. dollar will continue to weigh heavily in the
domestic versus international equity allocation.
6
<PAGE>
PERFORMANCE HIGHLIGHTS WEALTHBUILDER PORTFOLIOS
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF MAY 31, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
----------------------------------------- -----------------------------
Year-To-Date 1-Year Since Inception 1-Year Since Inception
<S> <C> <C> <C> <C> <C>
WEALTHBUILDER GROWTH
PORTFOLIO (1.90) 18.53 16.47 16.75 15.81
BENCHMARK
S&P 500 INDEX (2.82) 10.48
</TABLE>
PORTFOLIO DATA (AS OF MAY 31, 2000)
----------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 32%
NAV 14.97
</TABLE>
PORTFOLIO ALLOCATION(4)
(AS OF MAY 31, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STOCKS 98%
<S> <C>
Repurchase Agreements 2%
</TABLE>
GROWTH OF $10,000 INVESTMENT(3)
----------------------------------------------
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>
10/1/97 $9,850 $10,000 $10,000 $10,000
10/31/97 $9,623 $9,666 $9,561 $9,231
11/30/97 $9,742 $10,114 $9,499 $9,137
12/31/97 $9,826 $10,287 $9,665 $9,216
1/31/98 $9,925 $10,401 $9,512 $9,638
2/28/98 $10,506 $11,151 $10,215 $10,256
3/31/98 $10,960 $11,721 $10,636 $10,572
4/30/98 $11,118 $11,841 $10,695 $10,658
5/31/98 $10,851 $11,637 $10,118 $10,609
6/30/98 $11,108 $12,110 $10,140 $10,691
7/31/98 $10,782 $11,981 $9,318 $10,803
8/31/98 $9,107 $10,250 $7,509 $9,466
9/30/98 $9,610 $10,907 $8,097 $9,179
10/31/98 $10,329 $11,794 $8,427 $10,138
11/30/98 $11,039 $12,509 $8,868 $10,660
12/31/98 $11,890 $13,229 $9,417 $11,083
1/31/99 $12,394 $13,786 $9,543 $11,053
2/28/99 $11,969 $13,356 $8,770 $10,792
3/31/99 $12,542 $13,890 $8,907 $11,246
4/30/99 $12,808 $14,428 $9,705 $11,703
5/31/99 $12,473 $14,087 $9,846 $11,103
6/30/99 $13,282 $14,854 $10,291 $11,538
7/31/99 $12,897 $14,390 $10,009 $11,884
8/31/99 $12,799 $14,319 $9,639 $11,931
9/30/99 $12,502 $13,926 $9,641 $12,054
10/31/99 $13,312 $14,808 $9,680 $12,506
11/30/99 $13,835 $15,108 $10,258 $12,939
12/31/99 $15,070 $15,998 $11,420 $14,101
1/31/00 $14,586 $15,195 $11,236 $13,206
2/29/00 $14,922 $14,908 $13,091 $13,561
3/31/00 $16,117 $16,366 $12,228 $14,087
4/30/00 $15,445 $15,873 $11,492 $13,346
5/31/00 $14,784 $15,548 $10,822 $13,021
</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 are 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.
(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 Portfolio's Advisor has committed through
September 30, 2001 to waive fees and/or reimburse expenses to the extent
necessary to maintain a certain net operating expense ratio for the Portfolio.
Actual reductions of operating expenses can increase total return to
shareholders. Without these reductions, the Portfolio's returns would have been
lower.
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 portfolio. Effective close of
business November 5, 1999, the Norwest Advantage Funds were reorganized into the
Wells Fargo Funds. The maximum front-end sales charge is 1.50%.
(2) "Standard & Poor's", "S&P", "S&P500", "Standard & Poor's 500" and "500" are
trademarks of McGraw-Hill, Inc. and have been licensed. The Portfolio is not
sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's
makes no representation regarding the advisability of investing in any fund. 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.
(3) 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 portfolio. The Russell
2000 Index is an unmanaged, market-value weighted index, which measures
performance of the 2,000 companies that are between the 1000th and 3000th
largest in the market. The Morgan Stanley Capital International Europe,
Australasia and Far East ("MSCI EAFE") Stock Index is an unmanaged group of
securities widely regarded by investors to be representations of the stock
markets of Europe, Australasia and the Far East. You cannot invest directly in
an Index.
(4) Portfolio holdings are subject to change.
7
<PAGE>
WEALTHBUILDER PORTFOLIOS PORTFOLIO OF INVESTMENTS -- MAY 31, 2000
--------------------------------------------------------------------------------
WEALTHBUILDER GROWTH BALANCED PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C> <C> <C>
INVESTMENT COMPANIES - 99.55%
BONDS FUNDS - 48.25%
301,341 AMERICAN EXPRESS GLOBAL BOND
FUND $ 1,642,341
344,032 MASSACHUSETTS FINANCIAL
SERVICES HIGH INCOME FUND 1,627,272
660,867 WELLS FARGO INCOME FUND 5,855,283
677,955 WELLS FARGO INTERMEDIATE
GOVERNMENT INCOME FUND 7,159,203
STOCK FUNDS - 25.67%
53,705 AIM BLUE CHIP FUND $ 2,771,701
46,358 DREYFUS EMERGING LEADERS FUND 1,708,309
130,118 PUTNAM GROWTH AND INCOME FUND 2,439,716
62,241 PUTNAM INTERNATIONAL GROWTH
AND INCOME FUND 1,743,385
AFFILIATED STOCK PORTFOLIOS/FUNDS - 25.63%
N/A WELLS FARGO INCOME EQUITY
PORTFOLIO 2,762,423
N/A WELLS FARGO INTERNATIONAL
EQUITY PORTFOLIO 1,723,535
N/A WELLS FARGO LARGE COMPANY
GROWTH PORTFOLIO 2,418,602
52,512 WELLS FARGO SMALL CAP GROWTH
FUND 1,743,933
-----------
33,595,703
TOTAL (99.55%) (COST $32,684,436)
-----------
<CAPTION>
PRINCIPAL INTEREST RATE MATURITY DATE
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 0.12%
$ 40,481 BANC OF AMERICA LLC POOLED
REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY U.S.
GOVERNMENT SECURITIES 6.58% 6/01/00 40,481
-----------
40,481
TOTAL SHORT-TERM INVESTMENTS (COST
$40,481)
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $32,724,917)* 99.67% $33,636,184
OTHER ASSETS AND LIABILITIES, NET 0.33 112,343
------- -----------
TOTAL NET ASSETS 100.00% $33,748,527
------- -----------
</TABLE>
* COST FOR FEDERAL INCOME TAX PURPOSES IS $32,893,826 AND NET UNREALIZED
APPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $1,905,172
GROSS UNREALIZED DEPRECIATION (1,162,814)
----------
NET UNREALIZED APPRECIATION $ 742,358
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
8
<PAGE>
PORTFOLIO OF INVESTMENTS -- MAY 31, 2000 WEALTHBUILDER PORTFOLIOS
--------------------------------------------------------------------------------
WEALTHBUILDER GROWTH AND INCOME PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C> <C> <C>
INVESTMENT COMPANIES - 99.21%
STOCK FUNDS - 49.71%
60,697 AIM BLUE CHIP FUND $ 3,132,575
56,088 DREYFUS EMERGING LEADERS FUND 2,066,827
169,968 PUTNAM GROWTH AND INCOME FUND 3,186,905
75,210 PUTNAM INTERNATIONAL GROWTH
AND INCOME FUND 2,106,627
AFFILIATED STOCK PORTFOLIOS/FUNDS - 49.50%
N/A WELLS FARGO INCOME EQUITY
PORTFOLIO 3,143,515
N/A WELLS FARGO LARGE COMPANY
GROWTH PORTFOLIO 3,121,995
N/A WELLS FARGO INTERNATIONAL
EQUITY PORTFOLIO 2,079,255
63,336 WELLS FARGO SMALL CAP GROWTH
FUND 2,103,403
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $19,565,646)* 99.21% $20,941,102
OTHER ASSETS AND LIABILITIES, NET 0.79 167,793
------- -----------
TOTAL NET ASSETS 100.00% $21,108,895
------- -----------
</TABLE>
* COST FOR FEDERAL INCOME TAX PURPOSES IS $19,571,601 AND NET UNREALIZED
APPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $1,963,439
GROSS UNREALIZED DEPRECIATION (593,938)
----------
NET UNREALIZED APPRECIATION $1,369,501
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
9
<PAGE>
WEALTHBUILDER PORTFOLIOS PORTFOLIO OF INVESTMENTS -- MAY 31, 2000
--------------------------------------------------------------------------------
WEALTHBUILDER GROWTH PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C> <C> <C>
INVESTMENT COMPANIES - 96.76%
STOCK FUNDS - 44.11%
259,672 AIM BLUE CHIP FUND $13,501,689
34,124 DREYFUS EMERGING LEADERS FUND 1,267,066
66,942 PUTNAM GROWTH AND INCOME FUND 1,264,736
80,452 PUTNAM INTERNATIONAL GROWTH
AND INCOME FUND 2,270,208
AFFILIATED STOCK PORTFOLIOS/FUNDS - 52.65%
N/A WELLS FARGO INCOME EQUITY
PORTFOLIO 4,538,792
N/A WELLS FARGO LARGE COMPANY
GROWTH PORTFOLIO 13,797,361
N/A WELLS FARGO INTERNATIONAL
EQUITY PORTFOLIO 1,562,328
58,276 WELLS FARGO SMALL CAP GROWTH
FUND 1,949,698
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $36,765,321)* 96.76% $40,151,878
OTHER ASSETS AND LIABILITIES, NET 3.24 1,344,564
------- -----------
TOTAL NET ASSETS 100.00% $41,496,442
------- -----------
</TABLE>
* COST FOR FEDERAL INCOME TAX PURPOSES IS $36,771,485 AND NET UNREALIZED
APPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $3,913,821
GROSS UNREALIZED DEPRECIATION (533,428)
---------
NET UNREALIZED APPRECIATION $3,380,393
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
10
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES -- MAY 31, 2000 WEALTHBUILDER PORTFOLIOS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEALTHBUILDER WEALTHBUILDER
GROWTH BALANCED GROWTH & WEALTHBUILDER
PORTFOLIO INCOME PORTFOLIO GROWTH PORTFOLIO
<S> <C> <C> <C>
-----------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
IN SECURITIES, AT MARKET
VALUE (SEE COST
BELOW).................. $ 33,636,184 $ 20,941,102 $ 40,151,878
RECEIVABLE FOR DIVIDENDS,
INTEREST AND OTHER
RECEIVABLES............... 45,706 29 2,396
RECEIVABLE FOR FUND SHARES
ISSUED.................... 183,338 260,099 1,645,065
RECEIVABLE FROM INVESTMENT
ADVISOR AND AFFILIATES.... 0 8,009 8,884
--------------- ---------------- ----------------
TOTAL ASSETS.................. 33,865,228 21,209,239 41,808,223
--------------- ---------------- ----------------
LIABILITIES
PAYABLE FOR FUND SHARES
REDEEMED.................. 14,235 815 173,312
PAYABLE TO INVESTMENT
ADVISOR AND AFFILIATES.... 699 0 0
PAYABLE TO OTHER RELATED
PARTIES................... 46,947 52,928 79,722
ACCRUED EXPENSES AND OTHER
LIABILITIES............... 54,820 46,601 58,747
--------------- ---------------- ----------------
TOTAL LIABILITIES............. 116,701 100,344 311,781
--------------- ---------------- ----------------
TOTAL NET ASSETS.............. $ 33,748,527 $ 21,108,895 $ 41,496,442
--------------- ---------------- ----------------
NET ASSETS CONSIST OF:
-----------------------------------------------------------------------------------
PAID-IN CAPITAL............. $ 30,006,970 $ 17,966,141 $ 37,023,774
UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS)............. 360,973 0 0
UNDISTRIBUTED NET REALIZED
GAIN (LOSS) ON
INVESTMENTS............... 2,469,317 1,767,298 1,086,111
NET UNREALIZED APPRECIATION
(DEPRECIATION) OF
INVESTMENTS............... 911,267 1,375,456 3,386,557
--------------- ---------------- ----------------
TOTAL NET ASSETS.............. $ 33,748,527 $ 21,108,895 $ 41,496,442
--------------- ---------------- ----------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE
-----------------------------------------------------------------------------------
NET ASSETS.................... $ 33,748,527 $ 21,108,895 $ 41,496,442
SHARES OUTSTANDING............ 2,653,873 1,497,524 2,772,110
NET ASSET VALUE PER SHARE..... $ 12.72 $ 14.10 $ 14.97
MAXIMUM OFFERING PRICE PER
SHARE(1).................... $ 12.91 $ 14.31 $ 15.20
INVESTMENT AT COST............ $ 32,724,917 $ 19,565,646 $ 36,765,321
--------------- ---------------- ----------------
</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
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEALTHBUILDER WEALTHBUILDER
GROWTH BALANCED GROWTH & WEALTHBUILDER
PORTFOLIO INCOME PORTFOLIO GROWTH PORTFOLIO
--------------- ---------------- ----------------
FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 2000 MAY 31, 2000
<S> <C> <C> <C>
----------------------------------------------------------------------------------------
INVESTMENT INCOME
DIVIDENDS........................ $ 915,942 $ 125,610 $ 123,754
INTEREST......................... 12,558 9,420 18,107
EXPENSES ALLOCATED FROM
AFFILIATED CORE PORTFOLIOS..... 48,242 43,444 84,153
--------------- ---------------- ----------------
TOTAL INVESTMENT INCOME............ 880,258 91,586 57,708
--------------- ---------------- ----------------
EXPENSES
ADVISORY FEES.................... 96,119 48,886 79,374
ADMINISTRATION FEES.............. 35,786 18,581 30,745
CUSTODY.......................... 2,163 948 1,309
PORTFOLIO ACCOUNTING FEES........ 46,688 55,887 72,505
TRANSFER AGENT................... 32,363 15,450 21,527
DISTRIBUTION FEES................ 205,969 104,756 170,086
LEGAL AND AUDIT FEES............. 7,783 7,647 7,730
REGISTRATION FEES................ 20,041 19,694 32,576
DIRECTORS' FEES.................. 3,311 3,237 3,255
SHAREHOLDER REPORTS.............. 22,964 14,858 21,486
OTHER............................ 12,106 7,177 10,209
--------------- ---------------- ----------------
TOTAL EXPENSES..................... 485,293 297,121 450,802
LESS:
WAIVED FEES AND REIMBURSED
EXPENSES....................... (142,115) (122,620) (167,496)
--------------- ---------------- ----------------
NET EXPENSES..................... 343,178 174,501 283,306
--------------- ---------------- ----------------
NET INVESTMENT INCOME (LOSS)....... 537,080 (82,915) (225,598)
--------------- ---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
----------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) FROM:
NON-AFFILIATED UNDERLYING
FUNDS.......................... 2,150,765 1,386,795 1,046,218
AFFILIATED UNDERLYING FUNDS...... (130,931) 1,044 36
REALIZED GAIN DISTRIBUTIONS FROM
UNDERLYING FUNDS............... 212,800 192,966 98,947
ALLOCATIONS FROM AFFILIATED CORE
PORTFOLIOS..................... 640,596 476,167 346,468
--------------- ---------------- ----------------
NET REALIZED GAIN FROM
INVESTMENTS...................... 2,873,230 2,056,972 1,491,669
--------------- ---------------- ----------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) OF:
NON-AFFILIATED UNDERLYING
FUNDS.......................... (375,957) 99,217 792,158
AFFILIATED UNDERLYING FUNDS...... (528,643) (240,072) (225,314)
ALLOCATIONS FROM AFFILIATED CORE
PORTFOLIOS..................... 81,607 51,446 964,699
--------------- ---------------- ----------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) OF
INVESTMENTS...................... (822,993) (89,409) 1,531,543
--------------- ---------------- ----------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS...................... 2,050,237 1,967,563 3,023,212
--------------- ---------------- ----------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS........ $ 2,587,317 $ 1,884,648 $ 2,797,614
--------------- ---------------- ----------------
</TABLE>
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 &
BALANCED PORTFOLIO INCOME PORTFOLIO
---------------------------------- --------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999 MAY 31, 2000 MAY 31, 1999
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------
BEGINNING NET ASSETS..... $ 23,335,843 $ 9,299,644 $ 10,657,013 $ 8,622,787
---------------- ---------------- ------------------- -----------------
OPERATIONS:
NET INVESTMENT INCOME
(LOSS)................. 537,080 209,298 (82,915) (39,881)
NET REALIZED GAIN (LOSS)
ON SALE OF
INVESTMENTS............ 2,873,230 83,973 2,056,972 (83,367)
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS............ (822,993) 1,436,960 (89,409) 1,117,723
---------------- ---------------- ------------------- -----------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............. 2,587,317 1,730,231 1,884,648 994,475
---------------- ---------------- ------------------- -----------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
NET INVESTMENT
INCOME............... (311,663) (93,210) 0 (733)
NET REALIZED GAIN ON
SALE OF INVESTMENTS.. (492,204) (12,759) (120,789) (8,125)
---------------- ---------------- ------------------- -----------------
TOTAL DISTRIBUTION TO
SHAREHOLDERS........... (803,867) (105,969) (120,789) (8,858)
---------------- ---------------- ------------------- -----------------
CAPITAL SHARE
TRANSACTIONS:
PROCEEDS FROM SHARES
SOLD................. 15,074,492 21,034,423 11,476,039 5,051,725
REINVESTMENT OF
DIVIDENDS............ 789,497 174 116,559 8,578
COST OF SHARES
REDEEMED............. (7,234,755) (8,622,660) (2,904,575) (4,011,694)
---------------- ---------------- ------------------- -----------------
NET INCREASE IN NET
ASSETS RESULTING FROM
CAPITAL SHARE
TRANSACTIONS........... 8,629,234 12,411,937 8,688,023 1,048,609
---------------- ---------------- ------------------- -----------------
INCREASE IN NET ASSETS... 10,412,684 14,036,199 10,451,882 2,034,226
---------------- ---------------- ------------------- -----------------
ENDING NET ASSETS........ 33,748,527 23,335,843 21,108,895 10,657,013
---------------- ---------------- ------------------- -----------------
SHARES ISSUED AND REDEEMED:
SHARES SOLD............ 1,198,806 1,852,950 809,938 446,691
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS............ 63,261 15 8,514 777
SHARES REDEEMED........ (580,997) (741,549) (212,128) (342,320)
NET INCREASE (DECREASE)
IN SHARES
OUTSTANDING............ 681,070 1,111,416 606,324 105,148
ENDING BALANCE OF
UNDISTRIBUTED NET
INVESTMENT INCOME...... $ 360,973 $ 145,554 $ 0 $ 2,133
---------------- ---------------- ------------------- -----------------
<CAPTION>
WEALTHBUILDER GROWTH
PORTFOLIO
-----------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999
<S> <C> <C>
-------------------------
BEGINNING NET ASSETS..... $ 12,941,667 $ 5,695,234
---------------- -----------------
OPERATIONS:
NET INVESTMENT INCOME
(LOSS)................. (225,598) (75,756)
NET REALIZED GAIN (LOSS)
ON SALE OF
INVESTMENTS............ 1,491,669 (171,121)
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS............ 1,531,543 1,600,465
---------------- -----------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............. 2,797,614 1,353,588
---------------- -----------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
NET INVESTMENT
INCOME............... 0 (777)
NET REALIZED GAIN ON
SALE OF INVESTMENTS.. 0 (18,171)
---------------- -----------------
TOTAL DISTRIBUTION TO
SHAREHOLDERS........... 0 (18,948)
---------------- -----------------
CAPITAL SHARE
TRANSACTIONS:
PROCEEDS FROM SHARES
SOLD................. 30,109,511 7,731,462
REINVESTMENT OF
DIVIDENDS............ 0 19,076
COST OF SHARES
REDEEMED............. (4,352,350) (1,838,745)
---------------- -----------------
NET INCREASE IN NET
ASSETS RESULTING FROM
CAPITAL SHARE
TRANSACTIONS........... 25,757,161 5,911,793
---------------- -----------------
INCREASE IN NET ASSETS... 28,554,775 7,246,433
---------------- -----------------
ENDING NET ASSETS........ 41,496,442 12,941,667
---------------- -----------------
SHARES ISSUED AND REDEEME
SHARES SOLD............ 2,044,011 655,532
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS............ 0 1,578
SHARES REDEEMED........ (296,712) (149,605)
NET INCREASE (DECREASE)
IN SHARES
OUTSTANDING............ 1,747,299 507,505
ENDING BALANCE OF
UNDISTRIBUTED NET
INVESTMENT INCOME...... $ 0 $ 265
---------------- -----------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
13
<PAGE>
WEALTHBUILDER PORTFOLIOS FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING AND DIVIDENDS DISTRIBUTIONS
NET ASSET UNREALIZED FROM NET FROM NET
VALUE PER NET INVESTMENT GAIN (LOSS) ON INVESTMENT REALIZED
SHARE INCOME (LOSS) INVESTMENTS INCOME GAINS
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------
WEALTHBUILDER GROWTH BALANCED PORTFOLIO
JUNE 1, 1999 TO MAY 31,
2000................... $ 11.83 $ 0.21 $ 1.05 $ (0.14) $ (0.23)
JUNE 1, 1998 TO MAY 31,
1999................... 10.80 0.10 1.01 (0.07) (0.01)
OCTOBER 1, 1997(3) TO
MAY 31, 1998........... 10.00 0.07 0.76 (0.03) 0
WEALTHBUILDER GROWTH & INCOME PORTFOLIO
------------------------------------------------------------------------------------------------
JUNE 1, 1999 TO MAY 31,
2000................... 11.96 (0.06) 2.33 0 (0.13)
JUNE 1, 1998 TO MAY 31,
1999................... 10.97 (0.04) 1.04 0 (0.01)
OCTOBER 1, 1997(3) TO
MAY 31, 1998........... 10.00 0 0.97 0 0
WEALTHBUILDER GROWTH PORTFOLIO
------------------------------------------------------------------------------------------------
JUNE 1, 1999 TO MAY 31,
2000................... 12.63 (0.08) 2.42 0 0
JUNE 1, 1998 TO MAY 31,
1999................... 11.01 (0.07) 1.71 0 (0.02)
OCTOBER 1, 1997(3) TO
MAY 31, 1998........... 10.00 (0.01) 1.03 (0.01) 0
</TABLE>
(1) THESE RATIOS DO NOT INCLUDE EXPENSES FROM NON-AFFILIATED FUNDS.
(2) TOTAL RETURN CALCULATION DOES NOT INCLUDE SALES CHARGE. TOTAL RETURN WOULD
HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIOD
SHOWN.
(3) THE PORTFOLIOS COMMENCED OPERATIONS ON OCTOBER 1, 1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
14
<PAGE>
FINANCIAL HIGHLIGHTS WEALTHBUILDER PORTFOLIOS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIO TO AVERAGE NET ASSETS (ANNUALIZED)
ENDING NET ASSET ---------------------------------------- PORTFOLIO NET ASSETS AT
VALUE PER NET INVESTMENT NET GROSS TOTAL TURNOVER END OF PERIOD
SHARE INCOME (LOSS) EXPENSES(1) EXPENSES(1) RETURN(2) RATE (000'S OMITTED)
<S> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------
WEALTHBUILDER GROWTH BALANCED PORTFOLIO
JUNE 1, 1999 TO MAY 31,
2000................... $ 12.72 1.95% 1.25% 1.76% 10.72% 70% $ 33,749
JUNE 1, 1998 TO MAY 31,
1999................... 11.83 1.28 1.25 1.85 10.26 59 23,336
OCTOBER 1, 1997(3) TO
MAY 31, 1998........... 10.80 0.02 1.25 2.64 8.35 20 9,300
WEALTHBUILDER GROWTH & INCOME PORTFOLIO
----------------------------------------------------------------------------------------------------------------------------
JUNE 1, 1999 TO MAY 31,
2000................... 14.10 (0.59) 1.25 2.12 19.02 63 21,109
JUNE 1, 1998 TO MAY 31,
1999................... 11.96 (0.38) 1.25 1.95 9.11 32 10,657
OCTOBER 1, 1997(3) TO
MAY 31, 1998........... 10.97 (0.41) 1.25 2.90 9.75 7 8,623
WEALTHBUILDER GROWTH PORTFOLIO
----------------------------------------------------------------------------------------------------------------------------
JUNE 1, 1999 TO MAY 31,
2000................... 14.97 (0.99) 1.25 1.98 18.53 32 41,496
JUNE 1, 1998 TO MAY 31,
1999................... 12.63 (0.84) 1.25 2.00 14.94 31 12,942
OCTOBER 1, 1997(3) TO
MAY 31, 1998........... 11.01 (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. TOTAL RETURN WOULD
HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIOD
SHOWN.
(3) THE PORTFOLIOS COMMENCED OPERATIONS ON OCTOBER 1, 1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
15
<PAGE>
WEALTHBUILDER PORTFOLIOS NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. ORGANIZATION
Wells Fargo Funds Trust (the "Trust") was organized on March 10, 1999 and is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company. The Trust
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
Trust.
In November of 1998 the parent company of Wells Fargo Bank, investment
advisor to the Stagecoach Family of Funds, merged with the parent company of
Norwest Investment Management, Inc. investment advisor to the Norwest
Advantage Family of Funds. The Wells Fargo Funds Trust was created to succeed
the assets and operations of various Stagecoach and Norwest Advantage Funds.
Effective at the close of business on November 5, 1999, the Stagecoach Funds
and Norwest Advantage Funds were consolidated into Wells Fargo Funds Trust
through a tax free exchange of shares. The predecessors to the Portfolios in
this annual report were as follows:
<TABLE>
<CAPTION>
Wells Fargo Funds Trust Predecessor (Norwest) Funds
<S> <C>
WELLS FARGO WEALTHBUILDER GROWTH BALANCED NORWEST WEALTHBUILDER II GROWTH BALANCED PORTFOLIO
PORTFOLIO
WELLS FARGO WEALTHBUILDER GROWTH AND INCOME NORWEST WEALTHBUILDER II GROWTH AND INCOME
PORTFOLIO PORTFOLIO
WELLS FARGO 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 seek to achieve their 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 Investor 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 Trust 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
Each Portfolio determines its net asset value as of 4:00 PM Eastern Time on
each Portfolio business day. Investments in the Underlying Funds are valued at
the closing net asset value per share of each Underlying Fund on the valuation
date. The Portfolios' investments in the Underlying Funds structured as
partnerships (the "Core Portfolios") are valued daily based upon each
Portfolio's proportionate share of each Core Portfolio's net assets, which are
also valued daily. Short-term securities that mature in sixty days or less are
valued at amortized cost which approximates 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. Each Portfolio records its prorata share of
the Core "Portfolios" net investment income, and realized and unrealized gain
and loss daily.
Dividend income is recognized on the ex-dividend date for each underlying
fund.
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS WEALTHBUILDER PORTFOLIOS
--------------------------------------------------------------------------------
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
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.
RECLASSIFICATION OF CAPITAL ACCOUNTS
On the Statements of Asset and Liabilities, as a result of permanent
book-to-tax differences, reclassification adjustments were made as follows
(Increase (Decrease)):
<TABLE>
<CAPTION>
Undistributed Net Undistributed Net Paid-in
Fund Investment Income Realized Gain/Loss Capital
<S> <C> <C> <C>
WELLS FARGO WEALTHBUILDER GROWTH
BALANCED PORTFOLIO $ (9,998) $ 3,779 $6,219
WELLS FARGO WEALTHBUILDER GROWTH &
INCOME PORTFOLIO 80,782 (89,588) 8,806
WELLS FARGO WEALTHBUILDER GROWTH
PORTFOLIO 225,333 (230,198) 4,865
</TABLE>
DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders from net investment income, if any, are declared
and distributed at least annually. Distributions to shareholders from 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.
EXPENSE ALLOCATIONS
The Trust accounts separately for the assets and liabilities and the
operations of each Portfolio. Expenses that are directly attributable to more
than one Portfolio are allocated among the respective Portfolios.
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 Trust 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 May 31, 2000.
3. ADVISORY FEES
The Trust has entered into separate advisory contracts on behalf of the
Portfolios with WFB. For the WealthBuilder Growth Balanced Portfolio,
WealthBuilder Growth and Income Portfolio, and WealthBuilder Growth Portfolio
Funds which are invested in various Underlying Funds, 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 Underlying
Funds. WFB also acts as advisor to, and is entitled to receive a fee from each
Core Portfolio or affiliated Fund. Prior to November 8, 1999, the Portfolios
were charged the same rate as above.
4. DISTRIBUTION FEES
The Trust 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
17
<PAGE>
WEALTHBUILDER PORTFOLIOS NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
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 year ended May
31, 2000 are disclosed on the Statement of Operations. Prior to November 8,
1999, the Portfolios were charged the same fees at the same rate.
5. ADMINISTRATION
The Trust has entered into administration agreements on behalf of the
Portfolios with WFB as whereby WFB is entitled to receive monthly fees at the
annual rate of 0.15% of each Portfolios' 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 0.10% of each Portfolios' average daily net assets.
6. OTHER FEES AND TRANSACTIONS WITH AFFILIATES
The Trust has entered into a contract on behalf of the Portfolios with Boston
Financial Data Services Inc. ("BFDS"), whereby BFDS provides transfer agency
services to the Portfolios. Forum Accounting Services, LLC provides portfolio
accounting services to each Portfolio.
Currently the Portfolios are not charged for custody services. Prior to
November 8, 1999, the Company entered into contracts on behalf of each
Portfolio with Norwest Bank Minnesota, N.A. ("Norwest"), whereby Norwest was
responsible for providing custody services for the Portfolios. Pursuant to the
contracts, Norwest was 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.
7. WAIVED FEES AND REIMBURSED EXPENSES
All amounts shown as waived fees or reimbursed expenses on the Statement of
Operations, for the year ended May 31, 2000, were waived by WFB.
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) for each
Portfolio for the year ended May 31, 2000 were as follows:
<TABLE>
<CAPTION>
Portfolio Purchases at Cost Sales Proceeds
<S> <C> <C>
WELLS FARGO WEALTHBUILDER GROWTH
BALANCED PORTFOLIO $26,228,356 $18,585,231
WELLS FARGO WEALTHBUILDER GROWTH AND
INCOME PORTFOLIO 14,392,724 9,010,718
WELLS FARGO WEALTHBUILDER GROWTH
PORTFOLIO 23,539,272 8,084,364
</TABLE>
18
<PAGE>
INDEPENDENT AUDITORS' REPORT WEALTHBUILDER PORTFOLIOS
--------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS
WELLS FARGO FUNDS TRUST
We have audited the accompanying statements of assets and liabilities of
Wells Fargo WealthBuilder Growth Balanced Portfolio, Wells Fargo WealthBuilder
Growth and Income Portfolio, and Wells Fargo WealthBuilder Growth Portfolio,
three portfolios of Wells Fargo Funds Trust (collectively the "Funds")
including the portfolios of investments as of May 31, 2000, and the related
statements of operations for the year then ended, statements of changes in net
assets for each of the years in the two-year period then ended and financial
highlights for the periods presented on pages 14 and 15. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of the securities owned as of May 31, 2000,
by correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned funds of Wells Fargo Funds Trust as of May 31, 2000, the
results of their operations, changes in their net assets and financial
highlights for the periods indicated above, in conformity with accounting
principles generally accepted in the United States of America.
/s/ KPMG LLP
San Francisco, California
July 10, 2000
19
<PAGE>
WEALTHBUILDER PORTFOLIOS TAX INFORMATION (UNAUDITED)
--------------------------------------------------------------------------------
For the tax year from June 1, 1999 through May 31, 2000, the WealthBuilder
Growth Balanced Portfolio designates 100% of its net investment income
distributions paid during the year as qualifying for the corporate
dividends-received deduction, pursuant to Section 854(b)(2) of the Internal
Revenue Code.
For the tax year from June 1, 1999 through May 31, 2000, the WealthBuilder
Growth Balanced Portfolio and the WealthBuilder Growth & Income Portfolio
designate 100% of their distributions paid during the year from net realized
gains as long-term capital gain distributions, pursuant to Section 853(b)(3)
of the Internal Revenue Code.
20
<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
21
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
<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.
DATED MATERIAL
PLEASE EXPEDITE
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P.O. Box 8266
Boston, MA 02266-8266
AR 013 (7/00)
