Tactical Equity Allocation Model Triggers Shift for Wells Fargo Advantage WealthBuilder Tactical Equity PortfolioSM
The Wells Fargo Advantage WealthBuilder Tactical Equity PortfolioSM uses a quantitative Tactical Equity Allocation (TEA) Model to determine the proportion of assets invested among the different equity styles in the Portfolio. This is a proprietary model that seeks to enhance the Portfolio’s performance by shifting emphasis among equity styles depending on market conditions.During the second quarter of 2009, the TEA Model reached a trigger point that resulted in a shift away from domestic stocks and toward international stocks. This trigger point results from a confirmation of a change in both market-based and fundamental indicators. In this case, both indicators rotated in favor of international stocks, triggering the shift. Previously, the most recent reallocation occurred during the third quarter of 2008 when the model shifted from international to domestic stocks.
Asset Allocation Shift Overview
About the Wells Fargo Advantage WealthBuilder PortfoliosSM
As part of our long history of pioneering asset allocation strategies, the Wells Fargo Advantage WealthBuilder Portfolios were first introduced in 1997. The WealthBuilder Portfolios use a fund-of-funds approach composed of both proprietary and nonproprietary mutual funds and offer investors a range of portfolios to match their risk profile. The portfolio managers apply the disciplines of Tactical Asset Allocation and Tactical Equity Allocation modeling to help manage risk and to capitalize on rotating market cycles.
Balanced funds may invest in stocks and bonds. Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. In general, when interest rates rise, bond values fall and investors may lose principal value. 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). These Funds are exposed to alternative investment risk, foreign investment risk, high-yield securities risk, mortgage- and asset-backed securities risk, and small company investment risk. Consult the Fund's prospectus for additional information on these and other risks.