Edgar Filing: WELLS FARGO ADVANTAGE INCOME OPPORTUNITIES FUND

Gross unrealized gains

32,072,769

Gross unrealized losses

(40,697,220

Net unrealized losses

(8,624,451

Form N-Q

LOGO

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS

OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-21269

Wells Fargo Advantage Income Opportunities Fund

(Exact name of registrant as specified in charter)

525 Market Street, 12^th Floor, San Francisco, CA 94105

(Address of principal executive offices) (Zip code)

C. David Messman

Wells Fargo Funds Management, LLC

525 Market Street, 12^th Floor, San Francisco, CA 94105

(Name and address of agent for service)

Registrant’s telephone number, including area code: 800-222-8222

Date of fiscal year end: April 30

Registrant is making a filing for Wells Fargo Income Opportunities Fund.

Date of reporting period: January 31, 2015

ITEM 1.

INVESTMENTS


Wells Fargo Advantage Income Opportunities Fund		Portfolio of investments — January 31, 2015 (unaudited)


Security name					Shares		Value
Common Stocks : 0.29%

Materials : 0.00%

Chemicals : 0.00%
LyondellBasell Industries NV Class A						7	$	554

Telecommunication Services : 0.29%

Diversified Telecommunication Services : 0.29%
Fairpoint Communications Incorporated †						134,376		2,010,265

Total Common Stocks (Cost $3,110,371)								2,010,819


	Interest rate			Maturity date	Principal
Corporate Bonds and Notes : 111.12%

Consumer Discretionary : 18.96%

Auto Components : 1.99%
Allison Transmission Incorporated 144A		7.13	%	5-15-2019	$	8,015,000		8,355,638
Cooper Tire & Rubber Company (i)		7.63		3-15-2027		4,000,000		4,240,000
Cooper Tire & Rubber Company		8.00		12-15-2019		150,000		168,000
Goodyear Tire & Rubber Company		7.00		5-15-2022		700,000		757,750

								13,521,388

Distributors : 0.19%
LKQ Corporation		4.75		5-15-2023		1,355,000		1,317,738

Diversified Consumer Services : 1.90%
Service Corporation International		6.75		4-1-2016		1,250,000		1,303,125
Service Corporation International		7.00		6-15-2017		1,250,000		1,356,250
Service Corporation International		7.50		4-1-2027		7,078,000		7,962,750
Service Corporation International		7.63		10-1-2018		1,100,000		1,237,500
Service Corporation International		8.00		11-15-2021		885,000		1,046,513

								12,906,138

Hotels, Restaurants & Leisure : 4.81%
CCM Merger Incorporated 144A		9.13		5-1-2019		10,830,000		11,696,400
Greektown Holdings LLC 144A		8.88		3-15-2019		12,215,000		12,306,613
Hilton Worldwide Finance LLC		5.63		10-15-2021		320,000		337,600
Pinnacle Entertainment Incorporated		7.50		4-15-2021		6,297,000		6,548,880
Speedway Motorsports Incorporated 144A		5.13		2-1-2023		825,000		839,438
Speedway Motorsports Incorporated		6.75		2-1-2019		980,000		1,016,260

								32,745,191

Household Durables : 0.56%
American Greetings Corporation		7.38		12-1-2021		3,300,000		3,498,000
Tempur Sealy International Incorporated		6.88		12-15-2020		325,000		348,563

								3,846,563

Media : 7.92%
Cablevision Systems Corporation		8.63		9-15-2017		2,975,000		3,309,688
CBS Outdoor Americas Capital LLC 144A		5.25		2-15-2022		320,000		331,200
CBS Outdoor Americas Capital LLC 144A		5.63		2-15-2024		35,000		36,225
CBS Outdoor Americas Capital LLC 144A		5.88		3-15-2025		1,275,000		1,326,000
CCO Holdings LLC		7.38		6-1-2020		2,364,000		2,526,525
CCO Holdings LLC		5.13		2-15-2023		1,200,000		1,176,000


Portfolio of investments — January 31, 2015 (unaudited)		Wells Fargo Advantage Income Opportunities Fund


Security name	Interest rate			Maturity date	Principal		Value
Media (continued)
CCO Holdings LLC		8.13	%	4-30-2020	$	686,000	$	721,158
CCOH Safari LLC		5.50		12-1-2022		735,000		740,513
CCOH Safari LLC		5.75		12-1-2024		7,955,000		8,064,381
Cequel Communications Holdings I LLC 144A		5.13		12-15-2021		340,000		332,350
Cequel Communications Holdings I LLC 144A		5.13		12-15-2021		1,601,000		1,564,978
Cinemark USA Incorporated		7.38		6-15-2021		1,525,000		1,616,500
CSC Holdings LLC		7.63		7-15-2018		1,145,000		1,285,263
CSC Holdings LLC		7.88		2-15-2018		1,650,000		1,845,938
CSC Holdings LLC		8.63		2-15-2019		635,000		739,775
DISH DBS Corporation		5.88		11-15-2024		315,000		316,575
DISH DBS Corporation		7.88		9-1-2019		2,260,000		2,565,100
EchoStar DBS Corporation		7.13		2-1-2016		1,160,000		1,218,000
EchoStar DBS Corporation		7.75		5-31-2015		650,000		659,750
Gray Television Incorporated		7.50		10-1-2020		11,105,000		11,410,388
Lamar Media Corporation		5.88		2-1-2022		1,785,000		1,851,938
LIN Television Corporation		6.38		1-15-2021		500,000		507,500
Live Nation Entertainment Incorporated 144A		7.00		9-1-2020		810,000		864,675
National CineMedia LLC		6.00		4-15-2022		3,340,000		3,390,100
National CineMedia LLC		7.88		7-15-2021		1,750,000		1,852,725
Nexstar Broadcasting Group Incorporated		6.88		11-15-2020		3,510,000		3,654,788

								53,908,033

Specialty Retail : 1.59%
ABC Supply Company Incorporated 144A		5.63		4-15-2021		730,000		737,300
Ahern Rentals Incorporated 144A		9.50		6-15-2018		1,985,000		2,034,625
Century Intermediate Holding Company (PIK at 10.50%) ¥144A		9.75		2-15-2019		290,000		307,400
Chinos Intermediate Holdings A Incorporated 144A		7.75		5-1-2019		750,000		630,000
Penske Auto Group Incorporated		5.38		12-1-2024		1,860,000		1,892,550
Penske Auto Group Incorporated		5.75		10-1-2022		1,965,000		2,043,600
Sonic Automotive Incorporated		5.00		5-15-2023		1,900,000		1,866,750
Sonic Automotive Incorporated		7.00		7-15-2022		1,235,000		1,343,063

								10,855,288

Consumer Staples : 0.85%

Beverages : 0.19%
Cott Beverages Incorporated 144A		6.75		1-1-2020		1,295,000		1,278,813

Food Products : 0.66%
B&G Foods Incorporated		4.63		6-1-2021		670,000		666,650
Darling Ingredients Incorporated		5.38		1-15-2022		295,000		294,263
Simmons Foods Incorporated 144A		7.88		10-1-2021		3,625,000		3,516,250

								4,477,163

Energy : 22.81%

Energy Equipment & Services : 8.85%
Bristow Group Incorporated		6.25		10-15-2022		5,830,000		5,553,075
Cleaver Brooks Incorporated 144A(i)		8.75		12-15-2019		810,000		844,425
Compressco Partners LP 144A		7.25		8-15-2022		1,980,000		1,643,400
Era Group Incorporated		7.75		12-15-2022		7,340,000		7,046,400
Forum Energy Technologies Incorporated		6.25		10-1-2021		315,000		298,463
Gulfmark Offshore Incorporated		6.38		3-15-2022		8,173,000		6,374,940
Hilcorp Energy Company 144A		5.00		12-1-2024		900,000		810,000
Hornbeck Offshore Services Incorporated		5.00		3-1-2021		4,705,000		3,740,475
Hornbeck Offshore Services Incorporated		5.88		4-1-2020		4,562,000		3,889,105
NGPL PipeCo LLC 144A		7.12		12-15-2017		6,445,000		6,252,295
NGPL PipeCo LLC 144A		7.77		12-15-2037		14,540,000		15,412,400
NGPL PipeCo LLC 144A		9.63		6-1-2019		715,000		699,806
PHI Incorporated		5.25		3-15-2019		8,550,000		7,438,500


Wells Fargo Advantage Income Opportunities Fund		Portfolio of investments — January 31, 2015 (unaudited)


Security name	Interest rate			Maturity date	Principal		Value
Energy Equipment & Services (continued)
Pride International Incorporated		8.50	%	6-15-2019	$	210,000	$	247,157

								60,250,441

Oil, Gas & Consumable Fuels : 13.96%
Arch Coal Incorporated		7.00		6-15-2019		1,950,000		472,875
CVR Refining LLC		6.50		11-1-2022		2,148,000		2,040,600
Denbury Resources Incorporated		4.63		7-15-2023		1,280,000		1,091,200
Denbury Resources Incorporated		5.50		5-1-2022		130,000		114,400
Denbury Resources Incorporated		6.38		8-15-2021		700,000		651,000
El Paso LLC		6.50		9-15-2020		1,155,000		1,332,379
El Paso LLC		7.00		6-15-2017		1,973,000		2,175,233
El Paso LLC		7.42		2-15-2037		1,820,000		2,227,221
El Paso LLC		7.80		8-1-2031		3,050,000		3,757,231
Energy XXI Gulf Coast Incorporated 144A		6.88		3-15-2024		3,525,000		1,551,000
Energy XXI Gulf Coast Incorporated		7.75		6-15-2019		975,000		455,813
Exterran Partners LP		6.00		4-1-2021		4,000,000		3,420,000
Northern Tier Energy LLC		7.13		11-15-2020		4,605,000		4,674,075
Overseas Shipholding Group		7.50		2-15-2021		2,750,000		2,475,000
Overseas Shipholding Group		8.13		3-30-2018		3,850,000		3,763,375
Pioneer Natural Resources Company		7.50		1-15-2020		3,170,000		3,780,215
Rockies Express Pipeline LLC 144A		5.63		4-15-2020		6,255,000		6,208,807
Rockies Express Pipeline LLC 144A		6.88		4-15-2040		8,100,000		8,667,000
Rockies Express Pipeline LLC 144A		7.50		7-15-2038		4,425,000		4,867,500
Sabine Pass Liquefaction LLC		5.63		2-1-2021		1,425,000		1,426,781
Sabine Pass Liquefaction LLC		5.63		4-15-2023		1,710,000		1,710,000
Sabine Pass Liquefaction LLC		5.75		5-15-2024		525,000		528,281
Sabine Pass Liquefaction LLC		6.25		3-15-2022		3,415,000		3,538,794
Sabine Pass LNG LP		6.50		11-1-2020		9,370,000		9,510,550
Sabine Pass LNG LP		7.50		11-30-2016		9,700,000		10,209,250
SemGroup Corporation		7.50		6-15-2021		4,420,000		4,397,900
Suburban Propane Partners LP		5.50		6-1-2024		480,000		472,800
Suburban Propane Partners LP		7.38		3-15-2020		1,475,000		1,534,000
Suburban Propane Partners LP		7.38		8-1-2021		592,000		626,040
Swift Energy Company		7.13		6-1-2017		7,975,000		3,110,250
Swift Energy Company		8.88		1-15-2020		1,750,000		612,500
Ultra Petroleum Corporation 144A		5.75		12-15-2018		650,000		594,750
Ultra Petroleum Corporation 144A		6.13		10-1-2024		3,550,000		3,035,250

								95,032,070

Financials : 19.91%

Banks : 0.41%
CIT Group Incorporated 144A		5.50		2-15-2019		2,225,000		2,360,503
CIT Group Incorporated 144A		6.63		4-1-2018		370,000		398,675

								2,759,178

Capital Markets : 1.65%
Jefferies Finance LLC 144A		6.88		4-15-2022		6,680,000		6,028,700
Jefferies Finance LLC 144A		7.38		4-1-2020		515,000		484,100
Jefferies Finance LLC 144A		7.50		4-15-2021		2,775,000		2,608,500
Neuberger Berman Group LLC 144A		5.63		3-15-2020		900,000		939,375
Neuberger Berman Group LLC 144A		5.88		3-15-2022		1,125,000		1,193,906

								11,254,581

Consumer Finance : 7.83%
Ally Financial Incorporated		7.50		9-15-2020		2,866,000		3,403,375
Ally Financial Incorporated		8.00		3-15-2020		1,241,000		1,479,893
Ally Financial Incorporated		8.30		2-12-2015		8,820,000		8,820,000


Portfolio of investments — January 31, 2015 (unaudited)		Wells Fargo Advantage Income Opportunities Fund


Security name	Interest rate			Maturity date	Principal		Value
Consumer Finance (continued)
Ford Motor Credit Company LLC		8.00	%	12-15-2016	$	200,000	$	223,881
General Motors Financial Company Incorporated		6.75		6-1-2018		2,215,000		2,502,950
Homer City Generation LLC		8.73		10-1-2026		3,031,303		3,091,929
Navient LLC		8.00		3-25-2020		7,010,000		7,851,200
SLM Corporation		6.13		3-25-2024		2,975,000		2,900,625
SLM Corporation		7.25		1-25-2022		1,600,000		1,740,000
SLM Corporation		8.45		6-15-2018		3,110,000		3,516,197
Springleaf Finance Corporation		5.40		12-1-2015		2,650,000		2,709,625
Springleaf Finance Corporation		5.75		9-15-2016		2,325,000		2,420,906
Springleaf Finance Corporation		6.00		6-1-2020		2,850,000		2,864,250
Springleaf Finance Corporation		6.50		9-15-2017		550,000		580,250
Springleaf Finance Corporation		6.90		12-15-2017		6,950,000		7,436,500
Springleaf Finance Corporation		7.75		10-1-2021		765,000		849,150
Springleaf Finance Corporation		8.25		10-1-2023		837,000		945,810

								53,336,541

Diversified Financial Services : 1.66%
Denali Borrower LLC 144A		5.63		10-15-2020		6,930,000		7,415,100
Infinity Acquisition LLC 144A		7.25		8-1-2022		4,310,000		3,868,225

								11,283,325

Insurance : 0.69%
Hub Holdings LLC (PIK at 8.88%)¥ 144A		8.13		7-15-2019		4,820,000		4,723,600

Real Estate Management & Development : 1.40%
Hockey Merger Sub 2 Incorporated 144A		7.88		10-1-2021		3,480,000		3,480,000
Onex Corporation 144A		7.75		1-15-2021		6,170,000		6,023,463

								9,503,463

REITs : 6.27%
Crown Castle International Corporation		4.88		4-15-2022		760,000		769,880
Crown Castle International Corporation		5.25		1-15-2023		4,385,000		4,494,625
DuPont Fabros Technology Incorporated LP		5.88		9-15-2021		7,670,000		7,957,625
Iron Mountain Incorporated		5.75		8-15-2024		8,500,000		8,648,750
Iron Mountain Incorporated		6.00		8-15-2023		3,560,000		3,729,100
Iron Mountain Incorporated		7.75		10-1-2019		605,000		646,594
Iron Mountain Incorporated		8.38		8-15-2021		926,000		965,818
Omega Healthcare Investors Incorporated		6.75		10-15-2022		3,375,000		3,560,625
Sabra Health Care Incorporated		5.38		6-1-2023		1,425,000		1,499,813
Sabra Health Care Incorporated		5.50		2-1-2021		1,960,000		2,072,700
The Geo Group Incorporated		5.13		4-1-2023		2,400,000		2,388,000
The Geo Group Incorporated		5.88		1-15-2022		4,350,000		4,502,250
The Geo Group Incorporated		5.88		10-15-2024		770,000		793,100
The Geo Group Incorporated		6.63		2-15-2021		605,000		635,250

								42,664,130

Health Care : 12.06%

Health Care Equipment & Supplies : 1.38%
Crimson Merger Sub Incorporated 144A		6.63		5-15-2022		7,500,000		6,487,500
Hologic Incorporated		6.25		8-1-2020		2,800,000		2,919,000

								9,406,500

Health Care Providers & Services : 7.70%
Aviv Healthcare Properties LP		6.00		10-15-2021		850,000		888,250
Aviv Healthcare Properties LP		7.75		2-15-2019		4,435,000		4,616,835
Capella Healthcare Incorporated		9.25		7-1-2017		8,300,000		8,652,750
Centene Corporation		5.75		6-1-2017		1,925,000		2,038,094


Wells Fargo Advantage Income Opportunities Fund		Portfolio of investments — January 31, 2015 (unaudited)


Security name	Interest rate			Maturity date	Principal		Value
Health Care Providers & Services (continued)
Community Health Systems Incorporated		6.88	%	2-1-2022	$	3,275,000	$	3,483,781
DaVita HealthCare Partners Incorporated		5.75		8-15-2022		1,360,000		1,441,600
Fresenius Medical Care Holdings Incorporated 144A		5.63		7-31-2019		1,800,000		1,957,860
Fresenius Medical Care Holdings Incorporated		6.88		7-15-2017		700,000		764,750
HCA Incorporated		5.88		3-15-2022		750,000		836,250
HCA Incorporated		6.50		2-15-2020		5,675,000		6,377,281
HealthSouth Corporation		5.75		11-1-2024		125,000		129,063
HealthSouth Corporation		7.75		9-15-2022		1,750,000		1,850,625
HealthSouth Corporation		8.13		2-15-2020		820,000		854,850
MPT Operating Partnership LP		6.38		2-15-2022		1,780,000		1,913,500
MPT Operating Partnership LP		6.88		5-1-2021		3,175,000		3,397,250
Select Medical Corporation		6.38		6-1-2021		10,230,000		10,292,659
Tenet Healthcare Corporation		6.00		10-1-2020		2,600,000		2,808,000
Tenet Healthcare Corporation		8.13		4-1-2022		115,000		129,663

								52,433,061

Health Care Technology : 1.18%
Emdeon Incorporated		11.00		12-31-2019		7,315,000		7,982,494

Pharmaceuticals : 1.80%
Endo Finance LLC 144A		5.75		1-15-2022		1,180,000		1,197,700
Endo Finance LLC 144A		6.00		2-1-2025		1,275,000		1,302,891
Endo Finance LLC 144A		7.25		1-15-2022		3,925,000		4,170,313
Par Pharmaceutical Company		7.38		10-15-2020		1,440,000		1,515,600
Pinnacle Incorporated 144A		9.50		10-1-2023		501,000		556,110
Salix Pharmaceuticals Incorporated 144A		6.00		1-15-2021		3,175,000		3,373,438
Valeant Pharmaceuticals International Incorporated 144A		5.63		12-1-2021		140,000		144,550

								12,260,602

Industrials : 7.38%

Airlines : 0.57%
Aviation Capital Group Corporation 144A		6.75		4-6-2021		2,190,000		2,463,750
Aviation Capital Group Corporation 144A		7.13		10-15-2020		1,210,000		1,393,759

								3,857,509

Commercial Services & Supplies : 2.55%
ADT Corporation		4.13		6-15-2023		1,775,000		1,664,063
ADT Corporation		6.25		10-15-2021		6,390,000		6,771,419
Covanta Holding Corporation		5.88		3-1-2024		3,105,000		3,194,269
Covanta Holding Corporation		6.38		10-1-2022		3,205,000		3,421,338
Covanta Holding Corporation		7.25		12-1-2020		2,150,000		2,284,375

								17,335,464

Construction & Engineering : 0.71%
AECOM Technology Corporation 144A		5.75		10-15-2022		355,000		371,419
AECOM Technology Corporation 144A		5.88		10-15-2024		4,280,000		4,467,250

								4,838,669

Machinery : 0.89%
Columbus McKinnon Corporation		7.88		2-1-2019		5,840,000		6,080,900

Trading Companies & Distributors : 2.66%
Ashtead Capital Incorporated 144A		6.50		7-15-2022		6,975,000		7,533,000
H&E Equipment Services Incorporated		7.00		9-1-2022		7,345,000		7,014,475
International Lease Finance Corporation 144A		7.13		9-1-2018		1,015,000		1,143,144
International Lease Finance Corporation		8.63		9-15-2015		1,700,000		1,768,000


Portfolio of investments — January 31, 2015 (unaudited)		Wells Fargo Advantage Income Opportunities Fund


Security name	Interest rate			Maturity date	Principal		Value
Trading Companies & Distributors (continued)
Light Tower Rentals Incorporated 144A		8.13	%	8-1-2019	$	970,000	$	666,875

								18,125,494

Information Technology : 8.68%

Electronic Equipment, Instruments & Components : 2.74%
Jabil Circuit Incorporated		8.25		3-15-2018		13,532,000		15,561,800
Zebra Technologies Corporation 144A		7.25		10-15-2022		2,910,000		3,120,975

								18,682,775

Internet Software & Services : 0.47%
Sophia Holding Finance LP (PIK at 10.38%)¥ 144A		9.63		12-1-2018		3,175,000		3,175,000

IT Services : 3.51%
Audatex North America Incorporated 144A		6.00		6-15-2021		2,925,000		3,042,000
Audatex North America Incorporated 144A		6.13		11-1-2023		1,320,000		1,376,100
First Data Corporation 144A		6.75		11-1-2020		991,000		1,060,370
First Data Corporation 144A		7.38		6-15-2019		2,870,000		3,009,913
First Data Corporation 144A		8.88		8-15-2020		435,000		466,538
First Data Corporation		11.75		8-15-2021		7,190,000		8,286,475
SunGard Data Systems Incorporated		6.63		11-1-2019		840,000		844,200
SunGard Data Systems Incorporated		7.38		11-15-2018		3,547,000		3,684,446
SunGard Data Systems Incorporated		7.63		11-15-2020		2,025,000		2,159,156

								23,929,198

Semiconductors & Semiconductor Equipment : 0.36%
Micron Technology Incorporated 144A		5.88		2-15-2022		2,310,000		2,425,500

Software : 0.44%
Activision Blizzard Incorporated 144A		5.63		9-15-2021		1,155,000		1,237,294
Activision Blizzard Incorporated 144A		6.13		9-15-2023		285,000		310,650
Boxer Parent Company Incorporated (PIK at 9.75%) 144A¥		9.00		10-15-2019		1,810,000		1,475,150

								3,023,094

Technology Hardware, Storage & Peripherals : 1.16%
NCR Corporation		5.88		12-15-2021		380,000		392,350
NCR Corporation		6.38		12-15-2023		7,165,000		7,487,425

								7,879,775

Materials : 2.05%

Chemicals : 0.07%
Celanese US Holdings LLC		5.88		6-15-2021		440,000		471,900

Containers & Packaging : 1.41%
Ball Corporation		5.75		5-15-2021		400,000		418,500
Crown Americas LLC		6.25		2-1-2021		515,000		543,325
Crown Cork & Seal Company Incorporated		7.38		12-15-2026		60,000		66,600
Crown Cork & Seal Company Incorporated (i)		7.50		12-15-2096		1,225,000		1,145,375
Owens-Illinois Incorporated		7.80		5-15-2018		837,000		941,625
Sealed Air Corporation 144A		8.38		9-15-2021		3,740,000		4,198,150
Silgan Holdings Incorporated		5.00		4-1-2020		2,250,000		2,300,625

								9,614,200


Wells Fargo Advantage Income Opportunities Fund		Portfolio of investments — January 31, 2015 (unaudited)


Security name	Interest rate			Maturity date	Principal		Value
Metals & Mining : 0.00%
Indalex Holdings Corporation (s)(a)(i)		11.50	%	2-1-2020	$	5,985,000	$	0

Paper & Forest Products : 0.57%
Georgia-Pacific LLC		8.88		5-15-2031		2,430,000		3,883,023

Telecommunication Services : 14.84%

Diversified Telecommunication Services : 7.18%
Citizens Communications Company		7.88		1-15-2027		4,205,000		4,275,959
Frontier Communications Corporation		8.13		10-1-2018		1,980,000		2,220,075
Frontier Communications Corporation		8.25		4-15-2017		2,380,000		2,629,900
Frontier Communications Corporation		8.50		4-15-2020		1,000,000		1,125,000
GCI Incorporated		6.75		6-1-2021		4,145,000		4,134,638
GCI Incorporated		8.63		11-15-2019		10,090,000		10,531,438
Level 3 Financing Incorporated		8.13		7-1-2019		1,475,000		1,565,344
Level 3 Financing Incorporated		6.13		1-15-2021		1,690,000		1,753,375
Level 3 Financing Incorporated		7.00		6-1-2020		297,000		316,305
Qwest Corporation		7.13		11-15-2043		1,810,000		1,857,170
Qwest Corporation		7.25		9-15-2025		2,755,000		3,284,175
Qwest Corporation		7.63		8-3-2021		440,000		474,100
Syniverse Holdings Incorporated		9.13		1-15-2019		8,545,000		8,908,163
Windstream Corporation		7.88		11-1-2017		5,380,000		5,803,675

								48,879,317

Wireless Telecommunication Services : 7.66%
Level 3 Communications Incorporated 144A		5.38		8-15-2022		2,190,000		2,228,325
MetroPCS Wireless Incorporated		6.63		11-15-2020		5,910,000		6,144,923
SBA Telecommunications Corporation 144A		4.88		7-15-2022		1,400,000		1,361,500
SBA Telecommunications Corporation		5.63		10-1-2019		270,000		280,800
SBA Telecommunications Corporation		5.75		7-15-2020		2,795,000		2,885,838
Sprint Capital Corporation		6.88		11-15-2028		19,000,000		17,456,250
Sprint Capital Corporation		8.75		3-15-2032		3,390,000		3,466,275
Sprint Communications Incorporated 144A		9.00		11-15-2018		750,000		864,375
Sprint Communications Incorporated		11.50		11-15-2021		1,200,000		1,446,000
Sprint Corporation		7.13		6-15-2024		1,585,000		1,541,413
Sprint Corporation		7.25		9-15-2021		330,000		329,505
Sprint Corporation		7.88		9-15-2023		330,000		334,538
T-Mobile USA Incorporated		6.13		1-15-2022		140,000		144,025
T-Mobile USA Incorporated		6.38		3-1-2025		2,730,000		2,801,663
T-Mobile USA Incorporated		6.46		4-28-2019		265,000		274,606
T-Mobile USA Incorporated		6.50		1-15-2024		140,000		145,250
T-Mobile USA Incorporated		6.54		4-28-2020		275,000		284,884
T-Mobile USA Incorporated		6.63		4-1-2023		825,000		855,773
T-Mobile USA Incorporated		6.63		4-28-2021		1,510,000		1,567,758
T-Mobile USA Incorporated		6.73		4-28-2022		5,645,000		5,856,665
T-Mobile USA Incorporated		6.84		4-28-2023		1,765,000		1,840,013

								52,110,379

Telecommunications : 0.19%

Utilities : 3.39%

Electric Utilities : 1.19%
Energy Future Intermediate Holding Company LLC (s)		10.00		12-1-2020		150,000		13,875
IPALCO Enterprises Incorporated 144A		7.25		4-1-2016		3,403,000		3,581,658
Otter Tail Corporation (i)		9.00		12-15-2016		3,985,000		4,512,865

								8,108,398


Portfolio of investments — January 31, 2015 (unaudited)		Wells Fargo Advantage Income Opportunities Fund


Security name	Interest rate			Maturity date	Principal		Value
Gas Utilities : 0.54%
AmeriGas Finance LLC		6.75	%	5-20-2020	$	1,675,000	$	1,754,563
AmeriGas Finance LLC		7.00		5-20-2022		1,840,000		1,927,400

								3,681,963

Independent Power & Renewable Electricity Producers : 1.66%
Calpine Corporation 144A		5.88		1-15-2024		455,000		484,575
Calpine Corporation 144A		6.00		1-15-2022		865,000		927,713
Calpine Corporation 144A		7.88		1-15-2023		1,057,000		1,183,840
NSG Holdings LLC 144A		7.75		12-15-2025		5,854,330		6,293,404
Reliant Energy Incorporated (i)		9.24		7-2-2017		1,202,051		1,250,133
Reliant Energy Incorporated (i)		9.68		7-2-2026		780,000		826,800
TerraForm Power Operating LLC 144A		5.88		2-1-2023		345,000		352,331

								11,318,796

Total Corporate Bonds and Notes (Cost $743,810,236)								756,464,585

Loans : 9.62%
Accellent Incorporated ±		7.50		3-11-2022		515,000		469,938
Alliance Laundry Systems LLC ±		9.50		12-10-2019		3,742,755		3,740,434
Applied Systems Incorporated ±		7.50		1-22-2022		535,000		526,306
Asurion LLC ±		8.50		3-3-2021		575,000		567,813
CCM Merger Incorporated ±		4.50		8-8-2021		732,819		728,700
Centaur Acquisition LLC ±		8.75		2-20-2020		3,135,000		3,114,090
Focus Brands Incorporated ±(i)		10.25		8-21-2018		4,124,203		4,165,445
HGIM Corporation ±%%		5.50		6-18-2020		4,049,950		2,591,968
Learfield Communications Incorporated ±		8.75		10-9-2021		4,625,234		4,567,418
LM U.S. Corp Acquisition Incorporated ±(i)		8.25		1-25-2021		185,000		178,756
LTS Buyer LLC ±(i)		8.00		4-12-2021		935,369		913,388
Neff Rental LLC ±		7.25		6-9-2021		1,128,774		1,103,377
nTelos Incorporated ±		5.75		11-9-2019		2,512,967		2,192,564
Peak 10 Incorporated ±		8.25		6-17-2022		700,239		673,980
Philadelphia Energy Solutions LLC ±		6.25		4-4-2018		579,263		521,337
Sedgwick Claims Management Services Incorporated ±		6.75		2-28-2022		1,210,000		1,134,375
Spin Holdco Incorporated ±		4.25		11-14-2019		2,752,571		2,705,557
Tallgrass Operations LLC ±		4.25		11-13-2018		1,941,250		1,883,012
Texas Competitive Electric Holdings Company LLC ±(s)		4.66		10-10-2015		34,355,889		21,293,436
TGI Friday’s Incorporated ±		9.25		7-15-2021		915,000		910,425
TWCC Holdings Corporation ±		7.00		6-26-2020		5,880,000		5,465,930
United Surgical Partners International Incorporated ±		4.75		4-3-2019		2,188,574		2,179,448
Vertafore Incorporated ±		9.75		10-29-2017		845,000		846,056
W3 Company ±(i)		9.25		9-13-2020		488,775		464,336
WASH Multifamily Laundry Systems LLC ±		4.50		2-21-2019		2,608,538		2,543,324

Total Loans (Cost $80,347,906)								65,481,413


	Dividend yield				Shares
Preferred Stocks : 0.32%

Financials : 0.32%

Banks : 0.32%
GMAC Capital Trust I ±		7.72				81,784		2,150,919

Total Preferred Stocks (Cost $2,078,248)								2,150,919


Wells Fargo Advantage Income Opportunities Fund		Portfolio of investments — January 31, 2015 (unaudited)


Security name	Interest rate			Maturity date	Principal		Value
Yankee Corporate Bonds and Notes : 7.87%

Consumer Discretionary : 0.03%

Media : 0.03%
Videotron Limited		6.38	%	12-15-2015	$	100,000	$	100,250
Videotron Limited		9.13		4-15-2018		78,000		80,340

								180,590

Energy : 0.91%

Oil, Gas & Consumable Fuels : 0.91%
Griffin Coal Mining Company Limited (s)144A		9.50		12-1-2016		2,119,383		1,292,823
Griffin Coal Mining Company Limited (s)		9.50		12-1-2016		290,088		176,954
Teekay Corporation		8.50		1-15-2020		4,250,000		4,717,500

								6,187,277

Financials : 0.10%

Banks : 0.10%
Nielsen Holding and Finance BV 144A		5.50		10-1-2021		700,000		719,250
Preferred Term Securities XII Limited (s)(a)(i)		0.00		12-24-2033		1,540,000		0

								719,250

Health Care : 1.08%

Pharmaceuticals : 1.08%
Valeant Pharmaceuticals International Incorporated 144A		6.75		8-15-2018		1,120,000		1,191,400
Valeant Pharmaceuticals International Incorporated 144A		5.50		3-1-2023		485,000		495,003
Valeant Pharmaceuticals International Incorporated 144A		7.50		7-15-2021		5,175,000		5,666,625

								7,353,028

Materials : 1.50%

Containers & Packaging : 0.52%
Ardagh Finance Holdings (PIK at 8.63%) ¥144A		8.63		6-15-2019		1,527,669		1,521,940
Ardagh Packaging Finance 144A		9.13		10-15-2020		1,925,000		2,040,500

								3,562,440

Metals & Mining : 0.68%
Novelis Incorporated		8.38		12-15-2017		1,100,000		1,142,625
Novelis Incorporated		8.75		12-15-2020		3,250,000		3,485,625

								4,628,250

Paper & Forest Products : 0.30%
Sappi Limited 144A		7.50		6-15-2032		2,155,000		2,004,150

Telecommunication Services : 4.25%

Diversified Telecommunication Services : 4.03%
Intelsat Jackson Holdings SA		5.50		8-1-2023		6,210,000		6,132,375
Intelsat Jackson Holdings SA		7.25		4-1-2019		5,760,000		5,983,200
Intelsat Jackson Holdings SA		7.25		10-15-2020		3,825,000		4,016,250
Intelsat Jackson Holdings SA		7.50		4-1-2021		3,364,000		3,565,840
Intelsat Luxembourg SA		7.75		6-1-2021		2,595,000		2,572,294
Intelsat Luxembourg SA		8.13		6-1-2023		4,190,000		4,237,138
Virgin Media Finance plc 144A		5.38		4-15-2021		305,000		316,438


Portfolio of investments — January 31, 2015 (unaudited)		Wells Fargo Advantage Income Opportunities Fund


Security name			Interest rate			Maturity date	Principal		Value
Diversified Telecommunication Services (continued)
Virgin Media Finance plc 144A				6.38	%	4-15-2023	$	605,000	$	644,325

										27,467,860

Wireless Telecommunication Services : 0.22%
Telesat Canada Incorporated 144A				6.00		5-15-2017		1,475,000		1,497,125

Total Yankee Corporate Bonds and Notes (Cost $53,865,628)										53,599,970

Short-Term Investments : 2.93%

			Yield				Shares
Investment Companies : 2.93%
Wells Fargo Advantage Cash Investment Money Market Fund, Select Class ##(l)(u)				0.10				19,926,787		19,926,787

Total Short-Term Investments (Cost $19,926,787)										19,926,787

Total investments in securities (Cost $903,139,176)*	132.15	%								899,634,493
Other assets and liabilities, net	(32.15	)								(218,860,370	)

Total net assets	100.00	%							$	680,774,123

†	Non-income-earning security

144A

The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933.

(i)

Illiquid security

¥	A payment-in-kind (PIK) security is a security in which the issuer may make interest or dividend payments in cash or additional securities. These additional securities generally have the same terms as the original holdings.

(s)

The security is currently in default with regards to scheduled interest and/or principal payments. The Fund has stopped accruing interest on the security.

(a)

The security is fair valued in accordance with procedures approved by the Board of Trustees.

±	Variable rate investment. The rate shown is the rate in effect at period end.

%%	The security is issued on a when-issued basis.

##	All or a portion of this security is segregated for when-issued securities.

(l)

The security represents an affiliate of the Fund as defined in the Investment Company Act of 1940.

(u)

The rate represents the 7-day annualized yield at period end.

*	Cost for federal income tax purposes is $908,258,944 and unrealized gains (losses) consists of:


Abbreviations:

LLC		Limited liability company
LP		Limited partnership
plc		Public limited company

Wells Fargo Advantage Income Opportunities Fund (the “Fund”)

Notes to Portfolio of investments – January 31, 2015 (unaudited)

Securities valuation

All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time).

Fixed income securities acquired with maturities exceeding 60 days are valued based on evaluated bid prices provided by an independent pricing service which may utilize both transaction data and market information such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data. If prices are not available from the independent pricing service or prices received are deemed not representative of market value, prices will be obtained from an independent broker-dealer.

Short-term securities, with maturities of 60 days or less at time of purchase, generally are valued at amortized cost which approximates fair value. 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.

Equity securities that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price. If no sale occurs on the primary exchange or market for the security that day, the prior day’s price will be deemed “stale” and fair values will be determined in accordance with the Fund’s Valuation Procedures.

Investments in registered open-end investment companies are valued at net asset value.

Investments which are not valued using any of the methods discussed above are valued at their fair value, as determined in good faith by the Board of Trustees of the Fund. The Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary or appropriate, including determining the fair value of portfolio securities, unless the determination has been delegated to the Management Valuation Team of Wells Fargo Funds Management, LLC (“Funds Management”). The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Valuation Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees receives reports on any valuation actions taken by the Valuation Committee or the Management Valuation Team which may include items for ratification.

Valuations of fair valued securities are compared to the next actual sales price when available, or other appropriate market values, to assess the continued appropriateness of the fair valuation methodologies used. These securities are fair valued on a day-to-day basis, taking into consideration changes to appropriate market information and any significant changes to the inputs considered in the valuation process until there is a readily available price provided on an exchange or by an independent pricing service. Valuations received from an independent pricing service or independent broker-dealer quotes are periodically validated by comparisons to most recent trades and valuations provided by other independent pricing services in addition to the review of prices by the adviser and/or subadviser. Unobservable inputs used in determining fair valuations are identified based on the type of security, taking into consideration factors utilized by market participants in valuing the investment, knowledge about the issuer and the current market environment.

When-issued transactions

The Fund may purchase securities on a forward commitment or when-issued basis. The Fund records a when-issued transaction on the trade date and will segregate assets in an amount at least equal in value to the Fund’s commitment to purchase when-issued securities. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

Loans

The Fund may invest in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. The loans pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. Investments in loans may be in the form of participations in loans or assignments of all or a portion of loans from third parties. When the Fund purchases participations, it generally has no rights to enforce compliance with terms of the loan agreement with the borrower. As a result, the Fund assumes the credit risk of both the borrower and the lender that is selling the participation. When the Fund purchases assignments from lenders, it acquires direct rights against the borrower on the loan and may enforce compliance by the borrower with the terms of the loan agreement. Loans may include fully funded term loans or unfunded loan commitments, which are contractual obligations for future funding.

Fair valuation measurements

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to significant unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:


Level 1	–	quoted prices in active markets for identical securities

Level 2	–	other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, use of amortized cost, etc.)

Level 3	–	significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of January 31, 2015:


	Quoted prices (Level 1)		Other significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets
Investments in :
Common stocks
Materials	$	554	$	0	$	0	$	554
Telecommunication services		2,010,265		0		0		2,010,265
Preferred stocks
Financials		2,150,919		0		0		2,150,919
Corporate bonds and notes		0		756,464,585		0		756,464,585
Loans		0		49,270,039		16,211,374		65,481,413
Yankee corporate bonds and notes		0		53,599,970		0		53,599,970
Short-term investments
Investment companies		19,926,787		0		0		19,926,787

Total assets	$	24,088,525	$	859,334,594	$	16,211,374	$	899,634,493

The Fund recognizes transfers between levels within the fair value hierarchy at the end of the reporting period. At January 31, 2015, the Fund did not have any transfers into/out of Level 1 or Level 2.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:


	Loans
Balance as of April 30, 2014	$	9,669,157
Accrued discounts (premiums)		3,675
Realized gains (losses)		(24,224	)
Change in unrealized gains (losses)		(197,469	)
Purchases		7,521,801
Sales		(2,790,889	)
Transfers into Level 3		5,769,757
Transfers out of Level 3		(3,740,434	)

Balance as of January 31, 2015	$	16,211,374

Change in unrealized gains (losses) relating to securities still held at January 31, 2015	$	(163,249	)

The investment type categorized above was valued using indicative broker quotes. These indicative broker quotes are considered Level 3 inputs. Quantitative unobservable inputs used by the brokers are often proprietary and not provided to the Fund and therefore the disclosure that would address these inputs is not included above.

The following is a list of common abbreviations for terms and entities that may have appeared in this report.

ACA — ACA Financial Guaranty Corporation

ADR — American depositary receipt

ADS — American depositary shares

AGC — Assured Guaranty Corporation

AGM — Assured Guaranty Municipal

Ambac — Ambac Financial Group Incorporated

AMT — Alternative minimum tax

AUD — Australian dollar

BAN — Bond anticipation notes

BHAC — Berkshire Hathaway Assurance Corporation

BRL — Brazilian real

CAB — Capital appreciation bond

CAD — Canadian dollar

CCAB — Convertible capital appreciation bond

CDA — Community Development Authority

CDO — Collateralized debt obligation

CHF — Swiss franc

COP — Columbian Peso

CLP — Chilean peso

DKK — Danish krone

DRIVER — Derivative inverse tax-exempt receipts

DW&P — Department of Water & Power

DWR — Department of Water Resources

ECFA — Educational & Cultural Facilities Authority

EDA — Economic Development Authority

EDFA — Economic Development Finance Authority

ETF — Exchange-traded fund

EUR — Euro

FDIC — Federal Deposit Insurance Corporation

FFCB — Federal Farm Credit Banks

FGIC — Financial Guaranty Insurance Corporation

FHA — Federal Housing Administration

FHLB — Federal Home Loan Bank

FHLMC — Federal Home Loan Mortgage Corporation

FICO — The Financing Corporation

FNMA — Federal National Mortgage Association

FSA — Farm Service Agency

GBP — Great British pound

GDR — Global depositary receipt

GNMA — Government National Mortgage Association

GO — General obligation

HCFR — Healthcare facilities revenue

HEFA — Health & Educational Facilities Authority

HEFAR — Higher education facilities authority revenue

HFA — Housing Finance Authority

HFFA — Health Facilities Financing Authority

HKD — Hong Kong dollar

HUD — Department of Housing and Urban Development

HUF — Hungarian forint

IDA — Industrial Development Authority

IDAG — Industrial Development Agency

IDR — Indonesian rupiah

IEP — Irish pound

JPY — Japanese yen

KRW — Republic of Korea won

LIBOR — London Interbank Offered Rate

LIFER — Long Inverse Floating Exempt Receipts

LIQ — Liquidity agreement

LLC — Limited liability company

LLLP — Limited liability limited partnership

LLP — Limited liability partnership

LOC — Letter of credit

LP — Limited partnership

MBIA — Municipal Bond Insurance Association

MFHR — Multifamily housing revenue

MSTR — Municipal securities trust receipts

MTN — Medium-term note

MUD — Municipal Utility District

MXN — Mexican peso

MYR — Malaysian ringgit

National — National Public Finance Guarantee Corporation

NGN — Nigerian naira

NOK — Norwegian krone

NZD — New Zealand dollar

PCFA — Pollution Control Financing Authority

PCL — Public Company Limited

PCR — Pollution control revenue

PFA — Public Finance Authority

PFFA — Public Facilities Financing Authority

PFOTER — Puttable floating option tax-exempt receipts

plc — Public limited company

PLN — Polish zloty

PUTTER — Puttable tax-exempt receipts

R&D — Research & development

Radian — Radian Asset Assurance

RAN — Revenue anticipation notes

RDA — Redevelopment Authority

RDFA — Redevelopment Finance Authority

REIT — Real estate investment trust

ROC — Reset option certificates

RON — Romanian lei

RUB — Russian ruble

SAVRS — Select auction variable rate securities

SBA — Small Business Authority

SEK — Swedish krona

SFHR — Single-family housing revenue

SFMR — Single-family mortgage revenue

SGD — Singapore dollar

SPA — Standby purchase agreement

SPDR — Standard & Poor’s Depositary Receipts

SPEAR — Short Puttable Exempt Adjustable Receipts

STRIPS — Separate trading of registered interest and principal securities

TAN — Tax anticipation notes

TBA — To be announced

THB — Thai baht

TIPS — Treasury inflation-protected securities

TRAN — Tax revenue anticipation notes

TRY — Turkish lira

TTFA — Transportation Trust Fund Authority

TVA — Tennessee Valley Authority

ZAR — South African rand

ITEM 2.

CONTROLS AND PROCEDURES

(a) The President and Treasurer have concluded that the Wells Fargo Advantage Income Opportunities Fund (the “Fund”) disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) provide reasonable assurances that material information relating to the Fund is made known to them by the appropriate persons based on their evaluation of these controls and procedures as of a date within 90 days of the filing of this report.

(b) There were no significant changes in the Fund’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Wells Fargo Advantage Income Opportunities Fund

By:		/s/ Karla M. Rabusch
		Karla M. Rabusch
		President

Date:		March 25, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Wells Fargo Advantage Income Opportunities Fund

By:		/s/ Karla M. Rabusch
		Karla M. Rabusch
		President

Date:		March 25, 2015

By:		/s/ Jeremy DePalma
		Jeremy DePalma
		Treasurer

Date:		March 25, 2015