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ADVISER | Wells Fargo Funds Management, LLC
SUB-ADVISER | Wells Capital Management Incorporated ("Wells Capital Management")
PORTFOLIO MANAGER
OBJECTIVE | The Small Cap Value Fund seeks long-term capital appreciation.
PRINCIPAL STRATEGIES | We
invest principally in equity securities of small-capitalization companies, which
we define as companies with market capitalizations within the range of the Russell 2500™ Index. The market capitalization range of the Russell 2500™ Index was
$167 million to $6.8 billion, as of May 30, 2008, and is expected to change
frequently. As a hedging strategy, the Fund may write put and call options,
meaning that the Fund sells an option to another party giving that party the
right to either sell a stock to (put) or buy a stock from (call) the Fund at
a predetermined price in the future. Whether or not this hedging strategy is
successful depends on a variety of factors, particularly our ability to predict
movements of the price of the hedged stock.
We employ a multi-faceted investment process that consists
of quantitative idea generation and rigorous fundamental research. This process
involves identifying companies that we believe exhibit attractive valuation
characteristics and warrant further research. We then conduct fundamental research
to find securities in small-capitalization companies with a positive dynamic
for change that could move the price of such securities higher. The positive
dynamic may include a change in management team, a new product or service, corporate
restructuring, an improved business plan, a change in the regulatory environment,
or the right time for the industry in its market cycle. We typically sell a
security when its fundamentals deteriorate, its relative valuation versus the
peer group and market becomes expensive, or for risk management considerations.
We believe the combination of buying the securities of undervalued small-capitalization
companies with positive dynamics for change limits our downside risk while allowing
us to potentially participate in significant upside appreciation in the price
of such securities.
RISKS | Stock fund values fluctuate in response to the activities of individual companies and general market and economic conditions. Smaller company stocks tend to be more volatile and less liquid than those of larger companies. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This Fund is exposed to foreign investment risk.
Consult the Fund's prospectus for additional information on these and other risks.
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10.32%
