Edgar Filing: WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND

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: 811-21331

Wells Fargo Advantage Multi-Sector Income 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: Registrant is making a filing for Wells Fargo Advantage Multi-Sector Income Fund. The Fund has an October 31 fiscal year end.

Date of reporting period: July 31, 2013

ITEM 1. INVESTMENTS


Wells Fargo Advantage Multi-Sector Income Fund		Portfolio of investments — July 31, 2013 (unaudited)


Security name	Interest rate			Maturity date	Principal		Value
Agency Securities : 2.63%
FHLMC		8.50	%	7-1-2028	$	89,904	$	104,207
FHLMC		8.50		3-1-2030		57,931		60,781
FHLMC Series 0196 Class A ±		0.99		12-15-2021		62,227		62,798
FHLMC Series 1383 ±		5.82		2-1-2037		836,697		879,036
FHLMC Series 2011-K16 Class B ±144A		4.59		11-25-2046		1,000,000		980,082
FHLMC Series 2011-K701 Class B ±144A		4.29		7-25-2048		165,000		168,368
FHLMC Series 2011-K702 Class B ±144A		4.77		4-25-2044		740,000		768,437
FHLMC Series 2012-K17 Class B ±144A		4.35		12-25-2044		675,000		643,826
FHLMC Series 2012-K18 Class B ±144A		4.26		1-25-2045		810,000		771,941
FHLMC Series 2012-K19 Class B ±144A		4.04		5-25-2045		1,000,000		934,955
FHLMC Series 2012-K501 Class C ±144A		3.49		11-25-2046		800,000		773,098
FHLMC Series 2012-K705 Class B ±144A		4.16		9-25-2044		1,000,000		1,004,276
FHLMC Series 2012-K706 Class B ±144A		4.02		11-25-2044		500,000		498,187
FHLMC Series 2012-K706 Class C ±144A		4.02		11-25-2044		805,000		758,200
FHLMC Series 2012-K707 Class B ±144A		3.88		1-25-2047		930,000		913,365
FHLMC Series 2012-K709 Class B ±144A		3.74		4-25-2045		1,000,000		975,628
FHLMC Series 2012-K711 Class B ±144A		3.56		8-25-2045		264,000		252,958
FHLMC Series 2013-K713 Class B ±144A		3.17		4-25-2046		1,000,000		914,706
FHLMC Series 2390 Class FD ±		0.64		12-15-2031		51,080		51,367
FHLMC Series 2567 Class FH ±		0.59		2-15-2033		154,459		154,331
FHLMC Series K007 Class X1 ±(c)		1.22		4-25-2020		1,029,664		62,588
FHLMC Series K016 Class X1 ±(c)		1.58		10-25-2021		390,590		39,171
FHLMC Series K020 Class X1 ±(c)		1.48		5-25-2022		6,950,280		684,547
FHLMC Series K021 Class X1 ±(c)		1.51		6-25-2022		9,258,175		949,926
FNMA ±		4.66		9-1-2032		1,632,717		1,747,009
FNMA		6.00		4-1-2033		71,200		78,703
FNMA ±		6.44		9-1-2037		1,113,474		1,206,374
FNMA		6.50		11-1-2032		63,433		65,420
FNMA		7.50		7-1-2017		66,936		71,156
FNMA		7.50		10-1-2028		9,346		9,376
FNMA		7.50		11-1-2028		156,483		169,291
FNMA		7.50		2-1-2030		39,479		40,099
FNMA		7.50		9-1-2030		93,169		99,790
FNMA		8.00		6-1-2030		27,772		28,298
FNMA		12.00		1-1-2016		6,430		6,593
FNMA Series 1996-46 Class FA ±		0.69		8-25-2021		33,694		33,808
FNMA Series 2001-25 Class Z		6.00		6-25-2031		309,651		344,479
FNMA Series 2001-35 Class F ±		0.79		7-25-2031		13,195		13,323
FNMA Series 2001-57 Class F ±		0.69		6-25-2031		13,284		13,389
FNMA Series 2002-77 Class FH ±		0.59		12-18-2032		102,220		102,610
FNMA Series 2002-97 Class FR ±		0.74		1-25-2033		27,149		27,276
FNMA Series G91-16 Class F ±		0.64		6-25-2021		41,018		41,115
FNMA Series G92-17 Class F ±		1.24		3-25-2022		93,030		94,485
GNMA		6.50		6-15-2028		55,869		62,377
GNMA		7.25		7-15-2017		18,999		20,678
GNMA		7.25		8-15-2017		42,212		45,299
GNMA		7.25		8-15-2017		21,643		22,150
GNMA		7.25		9-15-2017		32,172		34,595
GNMA		7.25		10-15-2017		58,600		62,669
GNMA		7.25		10-15-2017		32,514		34,735
GNMA		7.25		11-15-2017		25,867		27,637
GNMA		7.25		1-15-2018		9,688		9,721
GNMA		7.25		1-15-2018		14,193		15,678
GNMA		7.25		2-15-2018		24,347		25,097
GNMA		7.25		5-15-2018		12,801		12,846

Total Agency Securities (Cost $17,556,361)								17,972,855

Asset-Backed Securities : 0.12%
Bear Stearns Asset Backed Securities Series 2006 Class 1A2 ±		0.41		12-25-2035		117,867		117,251
CVS Pass-Through Trust Series T		6.04		12-10-2028		616,840		687,600

Total Asset-Backed Securities (Cost $808,394)								804,851


Portfolio of investments — July 31, 2013 (unaudited)		Wells Fargo Advantage Multi-Sector Income Fund


Security name					Shares		Value
Common Stocks : 0.09%

Consumer Discretionary : 0.00%

Hotels, Restaurants & Leisure : 0.00%
Trump Entertainment Resorts Incorporated †(a)(i)						1,161	$	0


Telecommunication Services : 0.09%

Diversified Telecommunication Services : 0.09%
Fairpoint Communications Incorporated †						70,442		617,072

Total Common Stocks (Cost $1,617,838)								617,072


	Interest rate			Maturity date	Principal
Corporate Bonds and Notes : 64.19%

Consumer Discretionary : 14.58%

Auto Components : 1.32%
Allison Transmission Incorporated 144A		7.13	%	5-15-2019	$	3,790,000		4,045,825
Cooper Tire & Rubber Company		7.63		3-15-2027		1,805,000		1,746,338
Cooper Tire & Rubber Company		8.00		12-15-2019		450,000		474,750
Goodyear Tire & Rubber Company		7.00		5-15-2022		400,000		425,000
Goodyear Tire & Rubber Company		8.75		8-15-2020		468,000		552,240
United Rentals North America Incorporated		5.75		7-15-2018		1,685,000		1,802,922

								9,047,075

Distributors : 0.28%
LKQ Corporation 144A		4.75		5-15-2023		1,975,000		1,893,531

Diversified Consumer Services : 1.33%
Ceridian Corporation 144A		11.00		3-15-2021		50,000		57,250
Service Corporation International 144A		5.38		1-15-2022		100,000		100,625
Service Corporation International		6.75		4-1-2016		475,000		517,750
Service Corporation International		7.00		6-15-2017		1,410,000		1,561,575
Service Corporation International		7.00		5-15-2019		650,000		699,563
Service Corporation International		7.50		4-1-2027		2,993,000		3,262,370
Service Corporation International		7.63		10-1-2018		680,000		780,300
Service Corporation International		8.00		11-15-2021		475,000		553,969
Sotheby’s 144A		5.25		10-1-2022		1,615,000		1,558,475

								9,091,877

Hotels, Restaurants & Leisure : 4.57%
Ameristar Casinos Incorporated		7.50		4-15-2021		2,580,000		2,754,150
Burger King Corporation		9.88		10-15-2018		850,000		959,438
CCM Merger Incorporated 144A		9.13		5-1-2019		6,270,000		6,646,200
CityCenter Holdings LLC		7.63		1-15-2016		600,000		636,000
CityCenter Holdings LLC ¥		10.75		1-15-2017		3,636,822		3,927,768
DineEquity Incorporated		9.50		10-30-2018		3,475,000		3,918,097
Greektown Superholdings Incorporated Series A		13.00		7-1-2015		6,235,000		6,562,338
NAI Entertainment Holdings LLC 144A%%		5.00		8-1-2018		2,200,000		2,205,500
NAI Entertainment Holdings LLC 144A		8.25		12-15-2017		297,000		322,542
Penn National Gaming Incorporated		8.75		8-15-2019		250,000		274,375
Ruby Tuesday Incorporated		7.63		5-15-2020		2,025,000		2,014,875
Scientific Games Corporation		9.25		6-15-2019		485,000		527,438
Speedway Motorsports Incorporated		6.75		2-1-2019		525,000		553,875

								31,302,596

Household Durables : 0.10%
American Greetings Corporation		7.38		12-1-2021		475,000		471,438


Wells Fargo Advantage Multi-Sector Income Fund		Portfolio of investments — July 31, 2013 (unaudited)


Security name	Interest rate			Maturity date	Principal		Value
Household Durables (continued)
Tempur-Pedic International Incorporated 144A		6.88	%	12-15-2020	$	200,000	$	212,000

								683,438

Internet & Catalog Retail : 0.12%
Expedia Incorporated		5.95		8-15-2020		750,000		786,256

Media : 5.21%
Allbritton Communications Company		8.00		5-15-2018		1,275,000		1,378,594
Cablevision Systems Corporation		8.63		9-15-2017		1,310,000		1,509,775
CBS Corporation		8.88		5-15-2019		750,000		972,309
CCO Holdings LLC		5.75		1-15-2024		170,000		158,950
CCO Holdings LLC		6.50		4-30-2021		1,400,000		1,438,500
CCO Holdings LLC		8.13		4-30-2020		450,000		489,375
Cinemark USA Incorporated		5.13		12-15-2022		575,000		554,156
Cinemark USA Incorporated		7.38		6-15-2021		775,000		844,750
CSC Holdings LLC		7.63		7-15-2018		625,000		718,750
CSC Holdings LLC		7.88		2-15-2018		1,100,000		1,262,250
CSC Holdings LLC		8.50		4-15-2014		400,000		419,600
CSC Holdings LLC		8.63		2-15-2019		383,000		448,110
DIRECTV Holdings LLC		3.80		3-15-2022		750,000		721,553
DISH DBS Corporation 144A		5.13		5-1-2020		350,000		343,875
DISH DBS Corporation		7.88		9-1-2019		480,000		546,000
EchoStar DBS Corporation		7.13		2-1-2016		125,000		136,875
EchoStar DBS Corporation		7.75		5-31-2015		350,000		380,625
Gray Television Incorporated		7.50		10-1-2020		3,610,000		3,799,525
Interpublic Group of Companies		4.00		3-15-2022		750,000		729,609
Lamar Media Corporation		5.88		2-1-2022		690,000		710,700
Lamar Media Corporation		7.88		4-15-2018		2,250,000		2,424,375
Lamar Media Corporation Series C		9.75		4-1-2014		315,000		330,750
LIN Television Corporation		6.38		1-15-2021		275,000		286,000
LIN Television Corporation		8.38		4-15-2018		1,625,000		1,746,875
Local TV Finance LLC 144A		9.25		6-15-2015		4,775,000		4,846,625
Lynx I Corporation 144A		5.38		4-15-2021		365,000		369,563
Lynx II Corporation 144A		6.38		4-15-2023		365,000		374,581
National CineMedia LLC		6.00		4-15-2022		1,860,000		1,943,700
National CineMedia LLC		7.88		7-15-2021		650,000		708,500
Nexstar Broadcasting Group Incorporated 144A		6.88		11-15-2020		1,000,000		1,035,000
Regal Cinemas Corporation		8.63		7-15-2019		2,650,000		2,875,250
Regal Entertainment Group		5.75		6-15-2023		400,000		389,500
Time Warner Cable Incorporated		4.00		1-15-2022		750,000		767,714

								35,662,314

Multiline Retail : 0.09%
Macy’s Retail Holdings Incorporated		3.88		1-15-2022		600,000		608,140

Specialty Retail : 1.56%
ABC Supply Company Incorporated 144A		5.63		4-15-2021		450,000		448,875
Advance Auto Parts Incorporated		4.50		1-15-2022		600,000		590,390
Ahern Rentals Incorporated 144A		9.50		6-15-2018		1,200,000		1,227,000
Hot Topic Incorporated 144A		9.25		6-15-2021		50,000		52,000
Limited Brands Incorporated		6.63		4-1-2021		800,000		880,000
Penske Auto Group Incorporated		5.75		10-1-2022		1,155,000		1,189,650
RadioShack Corporation		6.75		5-15-2019		2,160,000		1,501,200
Rent-A-Center Incorporated		6.63		11-15-2020		1,651,000		1,766,570
Sonic Automotive Incorporated		5.00		5-15-2023		190,000		183,350
Toys “R” Us Property Company I LLC		10.75		7-15-2017		795,000		840,720
Toys “R” Us Property Company II LLC		8.50		12-1-2017		1,905,000		2,012,156

								10,691,911


Portfolio of investments — July 31, 2013 (unaudited)		Wells Fargo Advantage Multi-Sector Income Fund


Security name	Interest rate			Maturity date	Principal		Value
Consumer Staples : 0.43%

Food & Staples Retailing : 0.09%
SABMiller Holdings Incorporated 144A		3.75	%	1-15-2022	$	600,000	$	611,671


Food Products : 0.23%
B&G Foods Incorporated		4.63		6-1-2021		875,000		845,469
Kraft Foods Group Incorporated		3.50		6-6-2022		750,000		751,566

								1,597,035

Tobacco : 0.11%
Lorillard Tobacco Company		6.88		5-1-2020		650,000		749,761

Energy : 11.76%

Energy Equipment & Services : 3.60%
Cleaver Brooks Incorporated 144A		8.75		12-15-2019		275,000		295,625
Dresser-Rand Group Incorporated		6.50		5-1-2021		1,155,000		1,230,075
Era Group Incorporated		7.75		12-15-2022		2,565,000		2,565,000
Gulfmark Offshore Incorporated		6.38		3-15-2022		4,490,000		4,591,025
Hornbeck Offshore Services Incorporated 144A		5.00		3-1-2021		3,030,000		2,908,800
Hornbeck Offshore Services Incorporated		5.88		4-1-2020		505,000		513,838
NGPL PipeCo LLC 144A		7.77		12-15-2037		5,130,000		4,565,700
Northern Tier Energy LLC 144A		7.13		11-15-2020		1,435,000		1,438,588
Oil States International Incorporated 144A		5.13		1-15-2023		750,000		825,000
Oil States International Incorporated		6.50		6-1-2019		1,765,000		1,888,550
PHI Incorporated		8.63		10-15-2018		3,662,000		3,826,790

								24,648,991

Oil, Gas & Consumable Fuels : 8.16%
CVR Refining LLC 144A		6.50		11-1-2022		1,675,000		1,608,000
Denbury Resources Incorporated		6.38		8-15-2021		50,000		52,500
Denbury Resources Incorporated		8.25		2-15-2020		1,010,000		1,111,000
El Paso Corporation		6.50		9-15-2020		445,000		478,120
El Paso Corporation		7.00		6-15-2017		850,000		947,372
El Paso Corporation		7.25		6-1-2018		1,585,000		1,802,697
El Paso Corporation		7.42		2-15-2037		800,000		777,233
El Paso Corporation		7.80		8-1-2031		1,850,000		1,954,601
El Paso Pipeline Partners LP		6.50		4-1-2020		750,000		873,710
Energy Transfer Equity LP		7.50		10-15-2020		3,100,000		3,491,375
Energy Transfer Partners LP		5.20		2-1-2022		750,000		802,787
Exterran Partners LP 144A		6.00		4-1-2021		2,300,000		2,334,500
Ferrellgas LP		9.13		10-1-2017		1,145,000		1,202,250
Inergy Midstream LP 144A		6.00		12-15-2020		1,100,000		1,105,500
Kinder Morgan Energy Partners LP		3.95		9-1-2022		750,000		748,174
Nabors Industries Incorporated		4.63		9-15-2021		750,000		750,623
Petrohawk Energy Corporation		7.88		6-1-2015		790,000		803,825
Petrohawk Energy Corporation		10.50		8-1-2014		495,000		520,369
Phillips 66		4.30		4-1-2022		625,000		644,027
Pioneer Natural Resources Company		3.95		7-15-2022		750,000		744,298
Pioneer Natural Resources Company		7.50		1-15-2020		1,220,000		1,507,111
Plains Exploration & Production Company		8.63		10-15-2019		2,885,000		3,195,495
Rockies Express Pipeline LLC 144A		5.63		4-15-2020		3,625,000		3,208,125
Rockies Express Pipeline LLC 144A		6.00		1-15-2019		360,000		335,250
Rockies Express Pipeline LLC 144A		6.88		4-15-2040		6,123,000		5,082,090
Rockies Express Pipeline LLC 144A		7.50		7-15-2038		2,350,000		2,053,313
Sabine Pass Liquefaction LLC 144A		5.63		2-1-2021		850,000		838,313
Sabine Pass Liquefaction LLC 144A		5.63		4-15-2023		850,000		828,750
Sabine Pass LNG LP 144A		6.50		11-1-2020		4,180,000		4,347,200
Sabine Pass LNG LP		7.50		11-30-2016		4,085,000		4,493,500
Semgroup LP 144A		7.50		6-15-2021		2,525,000		2,556,563
Suburban Propane Partners LP		7.38		3-15-2020		790,000		845,300
Suburban Propane Partners LP		7.38		8-1-2021		309,000		332,175


Wells Fargo Advantage Multi-Sector Income Fund		Portfolio of investments — July 31, 2013 (unaudited)


Security name	Interest rate			Maturity date	Principal		Value
Oil, Gas & Consumable Fuels (continued)
Suburban Propane Partners LP		7.50	%	10-1-2018	$	422,000	$	455,760
Tesoro Corporation		9.75		6-1-2019		945,000		1,039,500
Weatherford International Incorporated		6.35		6-15-2017		650,000		734,844
Western Gas Partners		5.38		6-1-2021		503,000		544,974
Williams Partners LP		3.35		8-15-2022		750,000		692,797

								55,844,021

Financials : 14.24%

Capital Markets : 0.25%
Ace Securities Corporation ±		0.59		8-25-2045		208,244		207,249
Ace Securities Corporation ±		2.82		6-25-2033		651,529		647,124
Goldman Sachs Group Incorporated		5.75		1-24-2022		750,000		835,405

								1,689,778

Commercial Banks : 1.11%
CIT Group Incorporated		5.00		5-15-2017		250,000		263,750
CIT Group Incorporated		5.25		3-15-2018		500,000		531,250
CIT Group Incorporated 144A		5.50		2-15-2019		1,275,000		1,337,156
CIT Group Incorporated 144A		6.63		4-1-2018		550,000		607,750
City National Bank		5.38		7-15-2022		500,000		535,640
Emigrant Bancorp Incorporated 144A		6.25		6-15-2014		3,650,000		3,587,950
HSBC Bank USA		6.00		8-9-2017		650,000		738,667

								7,602,163

Consumer Finance : 7.21%
Ally Financial Incorporated		5.50		2-15-2017		750,000		793,166
Ally Financial Incorporated		7.50		9-15-2020		1,160,000		1,347,050
Ally Financial Incorporated		8.00		3-15-2020		940,000		1,106,850
Ally Financial Incorporated		8.30		2-12-2015		2,055,000		2,216,831
American General Finance Corporation		5.40		12-1-2015		1,625,000		1,641,250
American General Finance Corporation		5.75		9-15-2016		1,100,000		1,108,250
American General Finance Corporation		6.50		9-15-2017		200,000		200,000
Clearwire Communications Finance Corporation 144A		12.00		12-1-2015		940,000		996,400
Clearwire Communications Finance Corporation 144A		12.00		12-1-2015		1,450,000		1,537,000
Discover Financial Services		5.20		4-27-2022		750,000		787,390
First Data Corporation 144A		11.75		8-15-2021		2,390,000		2,282,450
Ford Motor Credit Company LLC		5.00		5-15-2018		650,000		704,979
Ford Motor Credit Company LLC		8.00		12-15-2016		250,000		293,319
General Motors Financial Company Incorporated 144A		4.75		8-15-2017		275,000		288,406
General Motors Financial Company Incorporated		6.75		6-1-2018		1,415,000		1,577,725
GMAC LLC		6.75		12-1-2014		998,000		1,055,385
GMAC LLC		7.50		12-31-2013		3,620,000		3,701,450
Homer City Funding LLC ¥		9.23		10-1-2026		1,351,973		1,419,572
International Lease Finance Corporation 144A		6.75		9-1-2016		100,000		110,000
International Lease Finance Corporation 144A		7.13		9-1-2018		75,000		84,563
International Lease Finance Corporation		8.63		9-15-2015		900,000		996,750
JBS USA Finance Incorporated		11.63		5-1-2014		3,745,000		3,980,186
Level 3 Financing Incorporated		10.00		2-1-2018		2,010,000		2,170,800
Nielsen Finance LLC Company		7.75		10-15-2018		5,350,000		5,818,125
SLM Corporation		7.25		1-25-2022		745,000		789,700
SLM Corporation		8.00		3-25-2020		3,290,000		3,668,350
SLM Corporation		8.45		6-15-2018		1,675,000		1,926,451
Springleaf Finance Corporation 144A		6.00		6-1-2020		2,285,000		2,107,913
Springleaf Finance Corporation		6.90		12-15-2017		4,620,000		4,643,100

								49,353,411

Diversified Financial Services : 2.24%
Bank of America Corporation		3.70		9-1-2015		650,000		679,977
Bank of America Corporation		5.70		1-24-2022		250,000		281,002


Portfolio of investments — July 31, 2013 (unaudited)		Wells Fargo Advantage Multi-Sector Income Fund


Security name	Interest rate			Maturity date	Principal		Value
Diversified Financial Services (continued)
Blackstone Holdings Finance Company LLC 144A		5.88	%	3-15-2021	$	750,000	$	834,593
Citigroup Incorporated		4.50		1-14-2022		250,000		263,605
Citigroup Incorporated		6.00		8-15-2017		650,000		737,144
General Electric Capital Corporation		4.65		10-17-2021		650,000		693,683
HUB International Limited Company 144A		8.13		10-15-2018		2,895,000		3,075,938
ING US Incorporated 144A		5.50		7-15-2022		750,000		810,329
JPMorgan Chase & Company		3.38		5-1-2023		750,000		696,830
LTS Buyer LLC		8.00		4-12-2021		50,000		50,313
Moody’s Corporation		5.50		9-1-2020		1,302,000		1,397,848
MPH Intermediate Holding Company 144A¥		8.38		8-1-2018		325,000		331,906
Neuberger Berman Group LLC 144A		5.63		3-15-2020		500,000		521,250
Neuberger Berman Group LLC 144A		5.88		3-15-2022		650,000		672,750
Nuveen Investments Incorporated		5.50		9-15-2015		3,560,000		3,515,500
Nuveen Investments Incorporated 144A		9.13		10-15-2017		730,000		739,125

								15,301,793

Insurance : 0.59%
American International Group Incorporated		4.88		6-1-2022		750,000		816,256
Fidelity & Guaranty Life Holdings Incorporated 144A		6.38		4-1-2021		610,000		619,150
Hartford Financial Services Group Incorporated		5.13		4-15-2022		650,000		716,671
Liberty Mutual Group Incorporated 144A		4.95		5-1-2022		750,000		777,850
Prudential Covered Trust Company 144A		3.00		9-30-2015		432,000		446,736
WR Berkley Corporation		4.63		3-15-2022		650,000		681,645

								4,058,308

Real Estate Management & Development : 0.82%
Ashtead Capital Incorporated 144A		6.50		7-15-2022		3,285,000		3,490,313
Onex Corporation 144A		7.75		1-15-2021		2,100,000		2,110,500

								5,600,813

REITs : 2.02%
Alexandria Real Estate Company		4.60		4-1-2022		650,000		666,769
American Tower Corporation		5.90		11-1-2021		650,000		715,215
Dupont Fabros Technology Incorporated		8.50		12-15-2017		5,560,000		5,907,500
Essex Portfolio LP		3.63		8-15-2022		750,000		724,331
Health Care Incorporated		5.25		1-15-2022		650,000		708,604
Omega Healthcare Investors Incorporated		6.75		10-15-2022		1,775,000		1,925,875
Sabra Health Care Incorporated		5.38		6-1-2023		850,000		828,750
Sabra Health Care Incorporated		8.13		11-1-2018		943,000		1,013,725
Ventas Realty LP		4.25		3-1-2022		650,000		659,945
WEA Finance LLC 144A		4.63		5-10-2021		650,000		687,883

								13,838,597

Health Care : 2.98%

Biotechnology : 0.11%
Amgen Incorporated		3.63		5-15-2022		750,000		744,569

Health Care Equipment & Supplies : 0.36%
Boston Scientific Corporation		6.00		1-15-2020		750,000		855,839
Hologic Incorporated		6.25		8-1-2020		1,530,000		1,619,888

								2,475,727

Health Care Providers & Services : 2.28%
Aviv HealthCare Properties LP		7.75		2-15-2019		1,350,000		1,451,250
Centene Corporation		5.75		6-1-2017		1,000,000		1,056,250
Community Health Systems Incorporated		5.13		8-15-2018		425,000		433,500
Community Health Systems Incorporated		7.13		7-15-2020		775,000		793,406


Wells Fargo Advantage Multi-Sector Income Fund		Portfolio of investments — July 31, 2013 (unaudited)


Security name	Interest rate			Maturity date	Principal		Value
Health Care Providers & Services (continued)
Coventry Health Care Incorporated		5.45	%	6-15-2021	$	750,000	$	842,486
DaVita HealthCare Partners Incorporated		5.75		8-15-2022		525,000		531,563
Express Scripts Holding Company		3.90		2-15-2022		665,000		677,478
HCA Incorporated		6.50		2-15-2020		1,875,000		2,067,188
HCA Incorporated		7.50		11-15-2095		800,000		722,000
HCA Incorporated		8.50		4-15-2019		740,000		801,050
Health Management Associates Incorporated		6.13		4-15-2016		175,000		193,156
HealthSouth Corporation		5.75		11-1-2024		410,000		403,338
HealthSouth Corporation		7.25		10-1-2018		360,000		387,900
HealthSouth Corporation		8.13		2-15-2020		495,000		542,025
Humana Incorporated		7.20		6-15-2018		750,000		895,901
MPT Operating Partnership LP		6.38		2-15-2022		475,000		499,938
MPT Operating Partnership LP		6.88		5-1-2021		775,000		827,313
Multiplan Incorporated 144A		9.88		9-1-2018		1,440,000		1,594,800
Select Medical Corporation 144A		6.38		6-1-2021		940,000		911,800

								15,632,342

Life Sciences Tools & Services : 0.12%
Life Technologies Corporation		6.00		3-1-2020		750,000		850,646

Pharmaceuticals : 0.11%
Watson Pharmaceuticals Incorporated		3.25		10-1-2022		750,000		716,540

Industrials : 3.31%

Aerospace & Defense : 0.20%
TransDigm Group Incorporated 144A		5.50		10-15-2020		550,000		537,625
TransDigm Group Incorporated		7.75		12-15-2018		750,000		799,688

								1,337,313

Air Freight & Logistics : 0.42%
Bristow Group Incorporated		6.25		10-15-2022		2,740,000		2,849,600

Airlines : 0.43%
Aviation Capital Group Corporation 144A		6.75		4-6-2021		1,320,000		1,412,768
Aviation Capital Group Corporation 144A		7.13		10-15-2020		720,000		799,365
Delta Air Lines Incorporated		4.75		11-7-2021		713,576		763,526

								2,975,659

Commercial Services & Supplies : 1.27%
ADT Corporation		3.50		7-15-2022		750,000		627,563
Covanta Holding Corporation		6.38		10-1-2022		225,000		231,639
Covanta Holding Corporation		7.25		12-1-2020		230,000		248,721
Geo Group Incorporated 144A		5.13		4-1-2023		1,775,000		1,717,313
Geo Group Incorporated		6.63		2-15-2021		365,000		388,725
Geo Group Incorporated		7.75		10-15-2017		2,250,000		2,356,875
Interface Incorporated		7.63		12-1-2018		125,000		133,750
Iron Mountain Incorporated		8.38		8-15-2021		1,385,000		1,500,994
Penske Truck Leasing Company 144A		3.75		5-11-2017		750,000		779,873
Republic Services Incorporated		3.55		6-1-2022		750,000		731,524

								8,716,977

Machinery : 0.51%
Columbus McKinnon Corporation		7.88		2-1-2019		725,000		772,125
H&E Equipment Services Incorporated		7.00		9-1-2022		2,565,000		2,744,550

								3,516,675


Portfolio of investments — July 31, 2013 (unaudited)		Wells Fargo Advantage Multi-Sector Income Fund


Security name	Interest rate			Maturity date	Principal		Value
Professional Services : 0.29%
Interactive Data Corporation		10.25	%	8-1-2018	$	1,250,000	$	1,400,000
Verisk Analytics Incorporated		5.80		5-1-2021		530,000		591,729

								1,991,729

Transportation Infrastructure : 0.19%
Florida East Coast Railway Corporation		8.13		2-1-2017		885,000		938,100
Watco Companies LLC 144A		6.38		4-1-2023		345,000		344,138

								1,282,238

Information Technology : 3.87%

Communications Equipment : 0.30%
Avaya Incorporated		9.75		11-1-2015		575,000		563,500
CyrusOne LP		6.38		11-15-2022		300,000		315,000
Lucent Technologies Incorporated		6.45		3-15-2029		1,285,000		1,015,150
SBA Communications Corporation		5.63		10-1-2019		160,000		161,200

								2,054,850

Computers & Peripherals : 0.24%
Hewlett-Packard Company		4.05		9-15-2022		750,000		731,436
NCR Corporation		5.00		7-15-2022		920,000		890,100

								1,621,536

Electronic Equipment, Instruments & Components : 1.12%
CDW Financial Corporation		12.54		10-12-2017		592,000		624,560
Jabil Circuit Incorporated		8.25		3-15-2018		5,275,000		6,237,688
L-3 Communications Corporation		4.95		2-15-2021		750,000		794,315

								7,656,563

Internet Software & Services : 0.06%
Equinix Incorporated		4.88		4-1-2020		170,000		168,300
Equinix Incorporated		7.00		7-15-2021		75,000		82,125
Verisign Incorporated 144A		4.63		5-1-2023		170,000		163,200

								413,625

IT Services : 1.90%
Audatex North America Incorporated 144A		6.00		6-15-2021		1,400,000		1,424,500
Audatex North America Incorporated		6.75		6-15-2018		750,000		800,625
Fidelity National Information Services Incorporated		7.88		7-15-2020		1,000,000		1,105,171
First Data Corporation 144A		7.38		6-15-2019		625,000		656,250
First Data Corporation		11.25		3-31-2016		3,489,000		3,471,555
SunGard Data Systems Incorporated		7.38		11-15-2018		5,007,000		5,307,420
SunGard Data Systems Incorporated		7.63		11-15-2020		250,000		271,250

								13,036,771

Software : 0.25%
CA Incorporated		5.38		12-1-2019		750,000		829,929
Nuance Communications Incorporated 144A		5.38		8-15-2020		925,000		901,875

								1,731,804

Materials : 1.11%

Chemicals : 0.33%
Chemtura Corporation		5.75		7-15-2021		575,000		572,125
Dow Chemical Company		4.13		11-15-2021		750,000		775,544


Wells Fargo Advantage Multi-Sector Income Fund		Portfolio of investments — July 31, 2013 (unaudited)


Security name	Interest rate			Maturity date	Principal		Value
Chemicals (continued)
Tronox Finance LLC 144A		6.38	%	8-15-2020	$	925,000	$	885,688

								2,233,357

Containers & Packaging : 0.48%
Crown Cork & Seal Company Incorporated		7.38		12-15-2026		185,000		205,350
Crown Cork & Seal Company Incorporated (i)		7.50		12-15-2096		600,000		570,000
Owens-Illinois Incorporated		7.80		5-15-2018		1,295,000		1,492,488
Sealed Air Corporation 144A		6.88		7-15-2033		1,075,000		1,021,250

								3,289,088

Metals & Mining : 0.08%
Freeport-McMoRan Copper & Gold Incorporated		3.55		3-1-2022		600,000		542,587
Indalex Holdings Corporation (a)(i)(s)		11.50		2-1-2014		3,170,000		0

								542,587

Paper & Forest Products : 0.22%
Georgia-Pacific LLC		8.88		5-15-2031		1,080,000		1,500,233

Telecommunication Services : 8.27%

Diversified Telecommunication Services : 3.41%
CenturyLink Incorporated		5.80		3-15-2022		600,000		597,000
Citizens Communications Company		7.88		1-15-2027		1,805,000		1,739,569
Frontier Communications Corporation		8.13		10-1-2018		845,000		942,175
Frontier Communications Corporation		8.25		5-1-2014		4,000		4,160
Frontier Communications Corporation		8.25		4-15-2017		1,040,000		1,175,200
Frontier Communications Corporation		8.50		4-15-2020		525,000		582,750
GCI Incorporated		6.75		6-1-2021		2,330,000		2,190,200
GCI Incorporated		8.63		11-15-2019		5,625,000		5,835,938
Qwest Corporation		7.13		11-15-2043		795,000		805,383
Qwest Corporation		7.25		9-15-2025		1,040,000		1,166,734
Qwest Corporation		7.63		8-3-2021		230,000		251,850
Syniverse Holdings Incorporated		9.13		1-15-2019		5,005,000		5,405,400
Windstream Corporation		7.88		11-1-2017		2,330,000		2,609,600

								23,305,959

Wireless Telecommunication Services : 4.86%
Cricket Communications Incorporated		7.75		10-15-2020		1,930,000		2,195,375
Crown Castle International Corporation		5.25		1-15-2023		1,225,000		1,179,063
Crown Castle International Corporation		7.13		11-1-2019		75,000		80,813
Crown Castle Towers LLC 144A		6.11		1-15-2040		750,000		852,151
MetroPCS Wireless Incorporated 144A		6.25		4-1-2021		170,000		173,400
MetroPCS Wireless Incorporated		6.63		11-15-2020		3,300,000		3,465,000
MetroPCS Wireless Incorporated 144A		6.63		4-1-2023		160,000		163,200
MetroPCS Wireless Incorporated		7.88		9-1-2018		1,950,000		2,115,750
Motorola Solutions Incorporated		3.75		5-15-2022		750,000		731,754
SBA Telecommunications Corporation		5.75		7-15-2020		2,000,000		2,045,000
SBA Telecommunications Corporation		8.25		8-15-2019		15,000		16,238
Sprint Capital Corporation		6.88		11-15-2028		13,360,000		12,291,200
Sprint Capital Corporation		8.75		3-15-2032		1,855,000		1,957,025
Sprint Nextel Corporation 144A		9.00		11-15-2018		325,000		385,125
Sprint Nextel Corporation		11.50		11-15-2021		625,000		831,250
TW Telecommunications Holdings Incorporated		5.38		10-1-2022		3,275,000		3,291,375
TW Telecommunications Holdings Incorporated		8.00		3-1-2018		1,400,000		1,489,250

								33,262,969


Portfolio of investments — July 31, 2013 (unaudited)		Wells Fargo Advantage Multi-Sector Income Fund


Security name	Interest rate			Maturity date	Principal		Value
Utilities : 3.64%

Electric Utilities : 1.57%
Energy Future Intermediate Holding Company LLC 144A		6.88	%	8-15-2017	$	500,000	$	510,000
Great Plains Energy Incorporated		4.85		6-1-2021		750,000		807,980
IPALCO Enterprises Incorporated		5.00		5-1-2018		1,075,000		1,118,000
IPALCO Enterprises Incorporated 144A		7.25		4-1-2016		1,925,000		2,122,313
Mirant Mid-Atlantic LLC Series C		10.06		12-30-2028		3,614,632		4,030,315
Otter Tail Corporation		9.00		12-15-2016		1,835,000		2,124,013
PNM Resources Incorporated		9.25		5-15-2015		9,000		10,103

								10,722,724

Gas Utilities : 0.41%
AmeriGas Finance LLC		6.50		5-20-2021		45,000		46,800
AmeriGas Finance LLC		6.75		5-20-2020		1,775,000		1,885,938
AmeriGas Finance LLC		7.00		5-20-2022		795,000		846,675

								2,779,413

Independent Power Producers & Energy Traders : 1.44%
Calpine Construction Finance Corporation 144A		7.25		10-15-2017		4,433,000		4,632,485
NRG Energy Incorporated		8.50		6-15-2019		1,615,000		1,744,200
NSG Holdings LLC 144A		7.75		12-15-2025		2,175,000		2,294,625
Reliant Energy Incorporated		9.24		7-2-2017		759,521		786,104
Reliant Energy Incorporated		9.68		7-2-2026		410,000		430,500

								9,887,914

Multi-Utilities : 0.22%
Ameren Illinois Company		9.75		11-15-2018		500,000		674,283
CMS Energy Corporation		5.05		3-15-2022		750,000		817,588
								1,491,871

Total Corporate Bonds and Notes (Cost $425,322,237)								439,284,759

Foreign Corporate Bonds and Notes @: 3.86%

Consumer Discretionary : 0.48%

Automobiles : 0.09%
Jaguar Land Rover plc (GBP)		8.25		3-15-2020		300,000		504,294
Servus Luxembourg Holding SCA (EUR) 144A		7.75		6-15-2018		100,000		133,700

								637,994

Hotels, Restaurants & Leisure : 0.11%
Casino Guichard Perrachon SA (EUR)		4.73		5-26-2021		500,000		737,736

Media : 0.28%
Arqiva Broadcast Finance plc (GBP) 144A		9.50		3-31-2020		100,000		163,154
Telenet Finance V Luxemburg SCA (EUR)		6.25		8-15-2022		400,000		548,104
Unitymedia Hessen GmbH & Company (EUR) 144A		5.13		1-21-2023		500,000		641,229
Ziggo Holding BV (EUR)		3.63		3-27-2020		400,000		526,153

								1,878,640

Consumer Staples : 0.34%

Food & Staples Retailing : 0.17%
Foodcorp Limited (EUR)		8.75		3-1-2018		820,000		1,180,885


Wells Fargo Advantage Multi-Sector Income Fund		Portfolio of investments — July 31, 2013 (unaudited)


Security name	Interest rate			Maturity date	Principal		Value
Food Products : 0.17%
BRF SA 144A (BRL)		7.75	%	5-22-2018	$	3,100,000	$	1,153,659

Financials : 2.28%

Commercial Banks : 1.96%
Eurofima (AUD)		6.25		12-28-2018		2,450,000		2,400,039
European Investment Bank (AUD)		6.13		1-23-2017		4,930,000		4,801,766
International Bank for Reconstruction & Development (AUD)		5.75		10-1-2020		950,000		934,264
KfW (AUD)		6.25		5-19-2021		1,210,000		1,214,123
KfW (AUD)		6.38		2-17-2015		3,319,000		2,760,562
Sberbank Rossii (NZD)		7.00		1-31-2016		44,000,000		1,334,891

								13,445,645

Consumer Finance : 0.09%
Fiat Industrial SpA (EUR)		6.25		3-9-2018		400,000		588,387

Diversified Financial Services : 0.23%
General Electric Capital Corporation (NZD)		4.25		1-17-2018		2,000,000		1,545,176

Industrials : 0.39%

Building Products : 0.08%
Heidelbergcement AG (EUR)		8.50		10-31-2019		330,000		554,257

Commercial Services & Supplies : 0.05%
Iron Mountain Incorporated (EUR)		6.75		10-15-2018		250,000		339,605

Trading Companies & Distributors : 0.04%
Rexel SA (EUR)		7.00		12-17-2018		200,000		290,681

Transportation Infrastructure : 0.22%
Heathrow Funding Limited (EUR)		4.60		2-15-2020		1,000,000		1,498,663

Information Technology : 0.04%

Software : 0.04%
Teamsystem Holdings SpA (EUR) 144A		7.38		5-15-2020		200,000		256,758

Materials : 0.08%

Paper & Forest Products : 0.08%
Smurfit Kappa Funding plc (EUR)		7.25		11-15-2017		400,000		558,747

Telecommunication Services : 0.15%

Diversified Telecommunication Services : 0.11%
Telefonica Emisiones Company (EUR)		4.69		11-11-2019		300,000		429,796
Virgin Media Finance plc (GBP)		8.88		10-15-2019		201,000		334,055

								763,851

Wireless Telecommunication Services : 0.04%
Interxion Holding NV (EUR) 144A		6.00		7-15-2020		200,000		268,731

Utilities : 0.10%

Water Utilities : 0.10%
Befesa Zinc Aser SA (EUR)		8.88		5-15-2018		500,000		708,411

Total Foreign Corporate Bonds and Notes (Cost $25,271,923)								26,407,826

Foreign Government Bonds @: 25.81%
Australia (AUD)		3.25		4-21-2025		3,350,000		2,811,598
Brazil (BRL)		8.50		1-5-2024		14,580,000		5,959,563


Portfolio of investments — July 31, 2013 (unaudited)		Wells Fargo Advantage Multi-Sector Income Fund


Security name	Interest rate			Maturity date	Principal		Value
Foreign Government Bonds @ (continued)
Brazil (BRL)		10.00	%	1-1-2017		31,000,000	$	13,452,181
Chile (CLP)		5.50		8-5-2020		1,700,000,000		3,357,984
Colombia (COP)		7.75		4-14-2021		5,250,000,000		3,231,323
Hungary (HUF)		6.75		11-24-2017		2,165,000,000		10,130,834
Indonesia (IDR)		7.38		9-15-2016		83,100,000,000		8,112,678
Korea (KRW)		5.25		3-10-2027		2,830,000,000		2,968,373
Malaysia (MYR)		3.26		3-1-2018		16,250,000		4,912,304
Malaysia (MYR)		4.26		9-15-2016		21,100,000		6,638,988
Mexico (MXN)		7.25		12-15-2016		163,040,000		13,777,922
Mexico (MXN)		7.75		11-13-2042		111,390,000		9,323,952
New Zealand (NZD)		5.50		4-15-2023		5,625,000		4,935,260
Nigeria (NGN)		15.10		4-27-2017		500,000,000		3,230,386
Poland (PLN) ¤		0.00		7-25-2015		11,800,000		3,494,368
Poland (PLN)		4.00		10-25-2023		22,850,000		7,099,071
Republic of South Africa (ZAR)		2.00		1-31-2025		9,990,884		1,024,193
Republic of South Africa (ZAR)		2.60		3-31-2028		70,088,640		7,536,793
Republic of South Africa (ZAR)		6.50		2-28-2041		67,200,000		5,019,957
Romania (RON)		6.00		4-30-2016		11,750,000		3,650,387
Russia (RUB)		7.00		1-25-2023		579,000,000		17,118,016
Russia (RUB)		7.50		3-15-2018		172,600,000		5,461,133
State of New South Wales Australia (AUD)		6.00		3-1-2022		3,600,000		3,642,765
State of Queensland Australia (AUD)		6.00		7-21-2022		4,000,000		3,982,134
Thailand (THB)		3.25		6-16-2017		216,500,000		6,912,928
Turkey (TRY)		6.30		2-14-2018		20,525,000		9,573,633
Turkey (TRY)		9.00		3-8-2017		18,000,000		9,297,761

Total Foreign Government Bonds (Cost $194,574,599)								176,656,485

Municipal Obligations : 0.05%

New York : 0.05%
Build New York City Resource Corporation Bronx Charter School for Excellence Project Series B (Education Revenue)		5.00		4-1-2018	$	345,000		336,437

Total Municipal Obligations (Cost $345,000)								336,437

Non-Agency Mortgage Backed Securities : 7.56%
American General Mortgage Loan Series 2009 Class 1-A6 ±144A		5.75		9-25-2048		1,000,000		1,007,738
American General Mortgage Loan Series 2010 Class 1A-A3 ±144A		5.65		3-25-2058		460,000		481,689
American Home Mortgage Assets Series 2006-2 Class 1A1 ±		1.12		9-25-2046		3,782,637		2,562,722
Argent Securities Incorporated Series 2004-W5 Class AV3B ±		1.09		4-25-2034		98,417		94,624
Asset Backed Funding Certificates Series 2003-AHL1 Class A1		4.18		3-25-2033		300,922		295,420
Banc of America Commercial Mortgage Securities Incorporated Series 2006-03 Class AM ±		5.86		7-10-2044		1,340,000		1,397,383
Banc of America Commercial Mortgage Securities Incorporated Series 2008-1 Class AM ±		6.25		2-10-2051		550,000		603,076
Banc of America Funding Corporation Series 2005 Class 5-1A1		5.50		9-25-2035		622,270		643,426
Banc of America Funding Corporation Series 2009 Class R6-3A1 ±144A		2.38		1-26-2037		68,365		68,263
Banc of America Mortgage Securities Series 2003 Class A-3A1 ±		3.01		2-25-2033		185,532		176,082
Bayview Financial Acquisition Trust Series 2005-B Class 1A6		5.21		4-28-2039		21,760		21,845
Bear Stearns Commercial Mortgage Series 2007-PW17 Class AM ±		5.89		6-11-2050		318,000		357,144
Bear Stearns Commercial Mortgage Series 2007-PW18 Class AM ±		6.08		6-11-2050		100,000		112,514
Carrington Mortgage Loan Trust Series 2005-FRE1 Class A5 ±		0.47		12-25-2035		46,558		46,162
Centex Home Equity Series 2002-A Class AF6		5.54		1-25-2032		381,252		382,870
Centex Home Equity Series 2002-D Class AF6 ±		4.66		12-25-2032		133,183		135,729
Centex Home Equity Series 2003-C Class AF4		5.46		4-25-2032		57,297		57,815
Centex Home Equity Series 2004-B Class AF6		4.69		3-25-2034		305,000		305,229
Chase Funding Mortgage Loan Series 2003 Class 5-1A4		4.40		2-25-2030		138,370		138,466
Citigroup Commercial Mortgage Trust Series 2006 Class C4 ±		5.75		3-15-2049		680,000		739,784
Citigroup Commercial Mortgage Trust Series 2006 Class C5		5.46		10-15-2049		325,000		355,565
Citigroup Commercial Mortgage Trust Series 2007-C6 Class AM ±		5.70		12-10-2049		450,000		497,854
Citigroup Commercial Mortgage Trust Series 2012-GC8 Class C ±144A		4.88		9-10-2045		1,000,000		987,784


Wells Fargo Advantage Multi-Sector Income Fund		Portfolio of investments — July 31, 2013 (unaudited)


Security name	Interest rate			Maturity date	Principal		Value
Non-Agency Mortgage Backed Securities (continued)
Citigroup Mortgage Loan Trust Incorporated Series 2003-HE3 Class A3 ±		0.57	%	12-25-2033	$	112,446	$	105,618
Commercial Mortgage Pass Through Trust Series 2006-C8 Class AM		5.35		12-10-2046		595,000		646,128
Commercial Mortgage Pass Through Trust Series 2012-CR2 Class C ±		4.86		8-15-2045		1,000,000		981,334
Countrywide Asset Backed Certificates Series 2003-5 Class AF5		5.82		2-25-2034		97,099		100,853
Countrywide Home Loans Series 2003-48 Class 2A2 ±		0.69		10-25-2033		201,756		202,001
Credit Based Asset Servicing Series 2005-CB2 Class M1 ±		0.85		4-25-2036		319,160		309,906
Credit Suisse First Boston Mortgage Securities Series 2002-AR5 Class 1A1 ±		2.22		9-25-2032		665,776		653,237
Credit Suisse First Boston Mortgage Securities Series 2003-AR15 Class 3A1 ±		2.80		6-25-2033		281,445		273,609
Credit Suisse First Boston Mortgage Securities Series 2003-AR9 Class 2A2 ±		2.38		3-25-2033		55,747		55,330
Credit Suisse Mortgage Capital Certificate Series 2006 ±		5.80		6-15-2038		1,045,000		1,147,487
Credit Suisse Mortgage Capital Certificate Series 2006-C4 Class AM		5.51		9-15-2039		1,000,000		1,061,784
Equity One Asset Backed Securities Series 2004-2 Class AF4 ±		4.62		7-25-2034		423,501		434,262
First Franklin Mortgage Loan Assets Series 2005-FT9 Class A3 ±		0.47		10-25-2035		65,653		65,591
First Horizon Mortgage Pass Through Series 2004-AR1 Class 1A1 ±		2.59		2-25-2034		482,763		468,434
First Horizon Mortgage Pass Through Series 2004-AR4 Class 3A1 ±		2.59		8-25-2034		19,409		18,325
Global Mortgage Securitization Limited Series 2004-A Class A2 ±144A		0.51		11-25-2032		583,230		550,283
GMAC Mortgage Corporation Loan Series 2003-GH1 Class A5		5.60		7-25-2034		17,333		17,635
Greenpoint Mortgage Funding Trust Series 2005-HE4 Class 1A1 ±		0.63		7-25-2030		44,567		42,441
Greenwich Capital Commercial Funding Corporation Series 2006-GG7 Class AM ±		5.86		7-10-2038		2,570,000		2,816,720
Greenwich Capital Commercial Funding Corporation Series 2007-GG11 Class A4		5.74		12-10-2049		475,000		533,685
GS Mortgage Securities Trust Series 2006-GG6 Class AM ±		5.62		4-10-2038		835,000		904,598
GS Mortgage Securities Trust Series 2007-GG10 Class A4 ±		5.80		8-10-2045		1,000,000		1,113,602
GS Mortgage Securities Trust Series 2010-C1 Class X ±144A(c)		1.53		8-10-2043		6,548,591		482,271
GS Mortgage Securities Trust Series 2012-GCJ7 Class XA ±(c)		2.61		5-10-2045		4,929,293		673,011
GSAA Home Equity Trust Series 2004-5 Class AF5 ±		5.55		6-25-2034		66,500		68,060
GSMPS Mortgage Loan Trust Series 2005-AHL Class M1 ±		0.62		4-25-2035		23,069		22,271
GSMPS Mortgage Loan Trust Series 2006-1 Class A1 ±144A		0.49		3-25-2035		232,466		221,890
GSMPS Mortgage Loan Trust Series 2006-SEA1 Class A ±144A		0.49		5-25-2036		363,265		355,633
Home Equity Asset Trust Series 2006-3 Class 2A3 ±		0.37		7-25-2036		12,132		12,087
JPMorgan Chase Commercial Mortgage Trust Series 2006-LDP9 Class AM		5.37		5-15-2047		1,000,000		1,060,711
JPMorgan Chase Commercial Mortgage Trust Series 2007-CB18 Class AM ±		5.47		6-12-2047		875,000		966,143
JPMorgan Chase Commercial Mortgage Trust Series 2007-CB20 Class AM ±		5.87		2-12-2051		785,000		883,221
JPMorgan Mortgage Trust Series 2004-A3 Class 2A1 ±		2.72		7-25-2034		150,880		148,729
JPMorgan Mortgage Trust Series 2004-A3 Series 3A3 ±		4.85		7-25-2034		165,118		160,885
JPMorgan Mortgage Trust Series 2005-A3 Class 11A2 ±		4.15		6-25-2035		566,005		553,554
JPMorgan Mortgage Trust Series 2005-A5 Class 3A2 ±		2.46		8-25-2035		37,034		37,008
JPMorgan Mortgage Trust Series 2009-7 Class 2A1 ±144A		6.00		2-27-2037		92,290		92,807
JPMorgan Mortgage Trust Series 2009-7 Class 5A1 ±144A		6.00		2-27-2037		506,440		515,427
LB-UBS Commercial Mortgage Trust Series 2007-C1 Class AM		5.46		2-15-2040		750,000		821,351
LB-UBS Commercial Mortgage Trust Series 2008-C1 ClassAM ±		6.15		4-15-2041		820,000		925,749
Lehman XS Trust Series 2006-18N Class A5A ±(i)		0.36		12-25-2036		3,222,532		2,090,040
MASTR Adjustable Rate Mortgage Trust Series 2003-6 Class 3A1 ±		2.84		12-25-2033		886,888		868,050
MASTR Adjustable Rate Mortgage Trust Series 2003-6 Class 4A2 ±		4.79		1-25-2034		41,946		41,764
MASTR Adjustable Rate Mortgage Trust Series 2004-13 Class 3A7 ±		2.62		11-21-2034		53,001		54,076
MASTR Alternative Loans Trust Series 2005-1 Class 5A1		5.50		1-25-2020		110,550		112,704
Merrill Lynch Countrywide Commercial Mortgage Trust Series 2006-4 Class AM ±		5.20		12-12-2049		340,000		369,187
Merrill Lynch Countrywide Commercial Mortgage Trust Series 2007-7 Class A4 ±		5.74		6-12-2050		470,000		526,169
Merrill Lynch Countrywide Commercial Mortgage Trust Series 2007-9 Class A4		5.70		9-12-2049		829,000		929,050
Merrill Lynch Mortgage Trust Series 2005-A8 Class A1B3 ±		5.25		8-25-2036		120,000		120,686
Merrill Lynch Mortgage Trust Series 2006-C1 Class AM ±		5.68		5-12-2039		565,000		616,595
Mid State Trust Series 11 Class A1		4.86		7-15-2038		285,661		305,121
MLCC Mortgage Investors Incorporated Series 2003-G Class A2 ±		1.10		1-25-2029		218,822		211,072


Portfolio of investments — July 31, 2013 (unaudited)		Wells Fargo Advantage Multi-Sector Income Fund


Security name	Interest rate			Maturity date	Principal		Value
Non-Agency Mortgage Backed Securities (continued)
Morgan Stanley Bank of America Merrill Lynch Trust Series 2012-C5 Class XA ±144A(c)		1.90	%	8-15-2045	$	5,926,878	$	600,357
Morgan Stanley Bank of America Merrill Lynch Trust Series 2012-C6 Class C ±		4.54		11-15-2045		1,000,000		957,273
Morgan Stanley Capital I Trust Series 2004-NC1 Class M1 ±		1.24		12-27-2033		793,536		758,619
Morgan Stanley Capital I Trust Series 2005-HQ6 Class A4B		5.04		8-13-2042		650,000		685,192
Morgan Stanley Capital I Trust Series 2006-HQ10 Class AM		5.36		11-12-2041		500,000		545,715
Morgan Stanley Capital I Trust Series 2006-HQ9 Class AJ ±		5.79		7-12-2044		1,000,000		1,085,887
Morgan Stanley Capital I Trust Series 2006-HQ9 Class AM ±		5.77		7-12-2044		25,000		27,340
Morgan Stanley Capital I Trust Series 2006-IQ12 Class AM		5.37		12-15-2043		500,000		544,823
Morgan Stanley Capital I Trust Series 2007-HQ11 Class AM ±		5.48		2-12-2044		500,000		551,309
Morgan Stanley Capital I Trust Series 2010-GG10 Class A4B ±144A		5.80		8-15-2045		615,000		676,030
Morgan Stanley Capital I Trust Series 2010-R5 Class 3A ±144A		0.49		3-26-2037		64,893		64,617
Morgan Stanley Capital I Trust Series 2012-C4 Class C ±144A		5.53		3-15-2045		900,000		932,141
New Century Home Equity Loan Trust Series 2004-3 Class M1 ±		1.12		11-25-2034		1,165,049		1,049,241
New Century Home Equity Loan Trust Series 2005-1 Class A1MZ ±		0.48		3-25-2035		62,015		60,381
Provident Funding Mortgage Loan Series 2005-1 Class 2A1 ±		2.75		5-25-2035		87,002		87,106
RBSSP Resecuritization Trust Series 2010-3 Class 4A1 ±144A		3.32		12-26-2035		55,248		55,653
Renaissance Home Equity Loan Trust Series 2004-4 Class AF4		4.88		2-25-2035		801,585		814,050
Residential Asset Mortgage Products Incorporated Series 2006-EFC1 Class A2 ±		0.39		2-25-2036		220,797		218,666
Residential Asset Securities Series 2004-KS3 Class AI4 ±		3.77		1-25-2032		296,354		298,393
Residential Funding Mortgage Securities I Series 2004-S9 Class 1A19		5.50		12-25-2034		200,000		200,093
Saxon Asset Securities Trust Series 2002-1 Class AF5 ±		6.23		12-25-2030		200,085		198,335
Saxon Asset Securities Trust Series 2003-1 Class AF7		4.03		6-25-2033		762,374		773,290
Sequoia Mortgage Trust Series 2003-1 Class 1A ±		0.95		4-20-2033		38,463		36,942
Structured Adjustable Rate Mortgage Loan Trust Series 2004-2 Class 2A ±		2.69		3-25-2034		81,387		80,012
Structured Asset Investment Loan Trust Series 2005-4 Class M1 ±		0.79		5-25-2035		55,874		55,593
Structured Asset Securities Corporation Series 2002-9 Class A2 ±		0.49		10-25-2027		128,958		126,562
Terwin Mortgage Trust Series 2003-6HE Class A3 ±		1.33		11-25-2033		350,972		348,839
Wachovia Bank Commercial Mortgage Trust Series 2006-C23 Class AM ±		5.47		1-15-2045		1,220,000		1,320,291
Washington Mutual Mortgage Trust Series 2004-RA4 Class 3A		7.50		7-25-2034		374,527		392,408

Total Non-Agency Mortgage Backed Securities (Cost $49,411,020)								51,762,527


	Dividend yield				Shares
Preferred Stocks : 0.17%

Financials : 0.17%

Diversified Financial Services : 0.17%
GMAC Capital Trust I ±		8.13				44,400		1,178,820

Total Preferred Stocks (Cost $1,130,339)								1,178,820

Term Loans : 18.76%
ADS Waste Holdings Incorporated		4.25		10-9-2019		1,079,690		1,087,097
Advantage Sales & Marketing LLC		8.25		6-17-2018		452,143		462,316
Albertson’s LLC		4.25		3-21-2016		301,824		302,579
Albertson’s LLC		4.75		3-21-2019		196,926		197,788
Alliance Laundry Systems LLC		4.50		12-7-2018		1,794,923		1,811,382
Alliance Laundry Systems LLC		9.50		12-10-2019		2,028,122		2,063,614
Allison Transmission Incorporated		3.20		8-7-2017		968,013		974,054
Allison Transmission Incorporated		4.25		8-23-2019		2,447,434		2,465,252
American Capital Holdings Incorporated		5.50		8-22-2016		315,167		316,481
Ameristar Casinos Incorporated		4.00		4-14-2018		992,686		993,570
Applied Systems Incorporated		4.25		12-8-2016		585,431		587,995
Applied Systems Incorporated		8.25		6-8-2017		420,000		422,100
Arris Group Incorporated		3.50		4-17-2020		897,750		895,129
Barrington Broadcasting Group LLC		7.50		6-14-2017		3,000,875		3,004,626
Capital Automotive LP		4.00		4-5-2019		3,258,516		3,279,892


Wells Fargo Advantage Multi-Sector Income Fund		Portfolio of investments — July 31, 2013 (unaudited)


Security name	Interest rate			Maturity date	Principal		Value
Term Loans (continued)
Capital Automotive LP		6.00	%	4-30-2020	$	1,460,000	$	1,501,975
CBAC Borrower LLC		8.25		7-2-2020		1,200,000		1,236,000
CCC Information Services Incorporated		4.00		12-20-2019		597,997		598,733
CCM Merger Incorporated		5.00		3-1-2017		2,886,697		2,908,347
CDW LLC <		3.50		4-29-2020		898,000		892,199
Centaur LLC		5.25		2-20-2019		99,750		100,373
Centaur LLC		8.75		2-20-2020		1,325,000		1,334,938
Charter Communications Operating LLC		3.00		1-4-2021		1,856,250		1,846,969
Covanta Energy Holdings		3.50		3-28-2019		2,567,500		2,585,164
Cricket Communications Incorporated		4.75		10-10-2019		298,500		300,864
Crown Castle International Corporation		3.25		1-31-2019		6,550,458		6,552,488
DaVita HealthCare Partners Incorporated		4.00		11-1-2019		1,135,407		1,140,675
DineEquity Incorporated		3.75		10-19-2017		1,409,152		1,426,330
Dunkin’ Brands Incorporated		3.75		2-11-2020		3,111,007		3,125,007
Entercom Radio LLC		5.01		11-23-2018		1,399,255		1,413,682
Federal-Mogul Corporation		2.14		12-27-2014		3,393,350		3,344,588
Federal-Mogul Corporation		2.14		12-27-2015		3,920,145		3,863,812
Focus Brands Incorporated		4.27		2-21-2018		850,950		852,813
Focus Brands Incorporated		10.25		8-21-2018		2,023,863		2,054,221
Genesys Telecommunicattion Holdings U.S. Incorporated		4.00		2-8-2020		623,438		624,996
Getty Images Incorporated		4.75		10-18-2019		759,629		759,470
Goodyear Tire & Rubber Company		4.75		4-30-2019		6,200,000		6,243,338
HHI Holdings LLC		5.00		10-5-2018		1,572,900		1,582,731
Hub International Limited		3.69		6-13-2017		698,250		701,448
Interactive Data Corporation		3.75		2-11-2018		3,349,546		3,355,843
Kronos Incorporated		4.50		10-30-2019		492,153		495,229
Level 3 Financing Incorporated		4.75		2-1-2016		1,730,781		1,738,137
LIN Television Corporation		4.00		12-21-2018		744,340		747,444
Local TV Finance LLC		4.19		5-7-2015		3,038,233		3,041,484
LPL Holdings Incorporated		3.25		3-29-2019		3,727,907		3,720,153
MedAssets Incorporated		4.00		12-13-2019		317,678		319,133
MGM Resorts International		3.50		12-20-2019		1,369,060		1,369,635
Mission Broadcasting Incorporated		4.25		12-3-2019		286,612		289,479
Nexstar Broadcasting Incorporated		4.25		12-3-2019		677,949		684,728
Nielsen Finance LLC		2.94		5-2-2016		483,528		485,946
Novelis Incorporated		3.75		3-10-2017		982,471		987,383
nTelos Incorporated		5.75		11-9-2019		1,325,457		1,321,321
Nusil Technology LLC		5.25		4-7-2017		396,730		396,532
Penn National Gaming Incorporated		3.75		7-14-2018		1,809,722		1,817,268
Philadelphia Energy Solutions LLC		6.25		4-4-2018		2,867,813		2,846,304
Phillips Van Heusen Corporation		3.25		2-13-2020		507,908		509,655
Prestige Brands Incorporated		3.78		1-31-2019		219,129		220,910
Progressive Waste Solutions Limited		3.50		10-24-2019		1,600,486		1,612,490
Riverbed Technology Incorporated		4.00		12-18-2019		149,768		150,985
SBA Senior Finance II LLC		3.75		6-30-2018		725,744		727,559
SBA Senior Finance II LLC		3.75		9-20-2019		150,097		150,660
Sedgwick CMS Holdings Incorporated		8.00		12-12-2018		500,000		507,500
Spin Holdco Incorporated		4.25		11-14-2019		1,110,000		1,115,894
Springleaf Finance Corporation		5.50		5-10-2017		336,000		336,212
Starwood Property Trust Incorporated		3.50		4-17-2020		349,125		349,125
Syniverse Holdings Incorporated		5.00		4-23-2019		990,000		994,128
Syniverse Holdings,Incorporated		4.00		4-23-2019		175,000		175,292
Tallgrass Energy Partners LP		5.25		11-13-2018		1,739,630		1,754,851
Telesat Holdings Incorporated		3.50		3-28-2019		2,623,550		2,630,922
Tempur-Pedic International Incorporated		3.50		3-18-2020		943,725		939,714
Texas Competitive Electric Holdings LLC		3.72		10-10-2014		20,096,983		14,258,809
The Weather Channel LLC		7.00		6-26-2020		200,000		204,500
Total Safety US Incorporated		9.25		8-21-2020		289,275		294,337
Transdigm Group Incorporated		3.75		2-28-2020		3,473,459		3,486,484
United Surgical Partners International Incorporated		4.25		4-19-2017		1,921,978		1,924,381
United Surgical Partners International Incorporated		4.75		4-3-2019		1,607,754		1,616,468
Valeant Pharmaceuticals International Incorporated Series C		3.50		12-11-2019		201,574		203,400
Valeant Pharmaceuticals International Incorporated Series D		3.50		2-13-2019		1,687,271		1,701,326
Washington Multifamily Laundry Systems LLC		5.25		2-21-2019		1,665,825		1,669,990


Portfolio of investments — July 31, 2013 (unaudited)		Wells Fargo Advantage Multi-Sector Income Fund


Security name	Interest rate			Maturity date	Principal		Value
Term Loans (continued)
Wendy’s International Incorporated		3.25	%	5-15-2019	$	1,354,889	$	1,359,130

Total Term Loans (Cost $131,484,585)								128,365,777

Yankee Corporate Bonds and Notes : 7.75%

Consumer Discretionary : 0.58%

Diversified Consumer Services : 0.10%
Anglo American Capital Company 144A		4.13		9-27-2022		750,000		704,266

Media : 0.48%
Grupo Televisa SA		6.00		5-15-2018		750,000		847,500
Myriad International Holdings BV 144A		6.00		7-18-2020		500,000		516,250
Myriad International Holdings BV 144A		6.38		7-28-2017		750,000		809,025
Videotron Limited		9.13		4-15-2018		363,000		381,150
WPP Finance 2010 Company		3.63		9-7-2022		750,000		712,119

								3,266,044

Consumer Staples : 0.33%

Beverages : 0.11%
Pernod Ricard SA 144A		4.45		1-15-2022		760,000		789,152

Food Products : 0.11%
BRF SA 144A		5.88		6-6-2022		750,000		761,250

Tobacco : 0.11%
BAT International Finance plc 144A		3.25		6-7-2022		750,000		739,651

Energy : 0.92%

Energy Equipment & Services : 0.12%
Ensco plc		4.70		3-15-2021		750,000		804,373

Oil, Gas & Consumable Fuels : 0.80%
Griffin Coal Mining Company Limited 144A(s)		9.50		12-1-2016		1,685,411		1,474,735
Griffin Coal Mining Company Limited (s)		9.50		12-1-2016		137,792		120,568
Petrobras International Finance Company		5.38		1-27-2021		670,000		667,672
Petroleos Mexicanos		4.88		1-24-2022		750,000		770,625
Petroplus Finance Limited		5.75		1-20-2020		650,000		671,832
TNK BP Finance SA		6.63		3-20-2017		1,150,000		1,260,630
Woodside Finance Limited 144A		8.75		3-1-2019		405,000		519,312

								5,485,374

Financials : 1.59%

Commercial Banks : 0.88%
Banco de Brasil 144A		5.88		1-26-2022		750,000		720,000
Banco del Estado de Chile 144A		3.88		2-8-2022		650,000		631,755
Export Import Bank of Korea		5.00		4-11-2022		750,000		814,151
ITAU Unibanco Holding SA		5.13		5-13-2023		1,650,000		1,524,600
Macquarie Bank Limited 144A		5.00		2-22-2017		750,000		808,682
Royal Bank of Scotland plc		4.38		3-16-2016		750,000		799,620
Standard Chartered Bank 144A		6.40		9-26-2017		650,000		739,440

								6,038,248

Consumer Finance : 0.57%
Wind Acquisition Finance SpA 144A		11.75		7-15-2017		3,660,000		3,861,300


Wells Fargo Advantage Multi-Sector Income Fund		Portfolio of investments — July 31, 2013 (unaudited)


Security name	Interest rate			Maturity date	Principal		Value
Diversified Financial Services : 0.14%
Corporación Andina de Fomento		4.38	%	6-15-2022	$	958,000	$	968,704
Preferred Term Securities XII Limited (i)(s)		0.00		12-24-2033		635,000		6

								968,710

Health Care : 0.29%

Pharmaceuticals : 0.29%
VPII Escrow Corporation 144A		6.75		8-15-2018		680,000		717,400
VPII Escrow Corporation 144A		7.50		7-15-2021		1,210,000		1,297,725

								2,015,125

Industrials : 0.28%

Airlines : 0.08%
Aguila 3 SA		7.88		1-31-2018		500,000		517,500

Commercial Services & Supplies : 0.09%
Tyco Electronics Group SA		3.50		2-3-2022		625,000		605,664

Road & Rail : 0.11%
Canadian Pacific Railway Company		4.50		1-15-2022		750,000		786,947

Information Technology : 0.65%

Computers & Peripherals : 0.53%
Seagate Technology HDD Holdings 144A		4.75		6-1-2023		650,000		620,750
Seagate Technology HDD Holdings		6.80		10-1-2016		650,000		722,313
Seagate Technology HDD Holdings		6.88		5-1-2020		1,035,000		1,122,975
Seagate Technology HDD Holdings		7.00		11-1-2021		1,050,000		1,141,875

								3,607,913

Internet Software & Services : 0.12%
Tencent Holdings Limited 144A		4.63		12-12-2016		750,000		805,113

Materials : 0.78%

Metals & Mining : 0.60%
ArcelorMittal		5.00		2-25-2017		725,000		746,750
Novelis Incorporated		8.38		12-15-2017		550,000		592,625
Novelis Incorporated		8.75		12-15-2020		725,000		799,313
Vale Overseas Limited		4.38		1-11-2022		750,000		711,015
Vedanta Resources plc 144A		6.00		1-31-2019		1,300,000		1,267,500

								4,117,203

Paper & Forest Products : 0.18%
Sappi Limited 144A		7.50		6-15-2032		1,560,000		1,232,400

Telecommunication Services : 2.23%

Diversified Telecommunication Services : 2.01%
Ericsson LM		4.13		5-15-2022		750,000		743,047
Intelsat Bermuda Limited 144A		7.75		6-1-2021		1,195,000		1,257,738
Intelsat Bermuda Limited 144A		8.13		6-1-2023		530,000		569,750
Intelsat Jackson Holdings Limited 144A		5.50		8-1-2023		2,900,000		2,784,000
Intelsat Jackson Holdings Limited		7.25		4-1-2019		2,055,000		2,221,969
Intelsat Jackson Holdings Limited		7.50		4-1-2021		525,000		571,594
Intelsat Jackson Holdings Limited		8.50		11-1-2019		1,400,000		1,545,250
Intelsat Jackson Holdings SA		7.25		10-15-2020		1,775,000		1,921,438
Qtel International Finance Limited		5.00		10-19-2025		300,000		303,750
Sable International Finance Limited		7.75		2-15-2017		350,000		371,000


Portfolio of investments — July 31, 2013 (unaudited)		Wells Fargo Advantage Multi-Sector Income Fund


Security name			Interest rate			Maturity date	Principal		Value
Diversified Telecommunication Services (continued)
Virgin Media Finance plc				6.50	%	1-15-2018	$	650,000	$	677,625
Vivendi SA 144A				4.75		4-12-2022		750,000		758,903

										13,726,064

Wireless Telecommunication Services : 0.22%
Globo Communicacoes Participacoes SA 144A				4.88		4-11-2022		750,000		740,625
Telesat Canada Incorporated 144A				6.00		5-15-2017		775,000		790,500

										1,531,125

Utilities : 0.10%

Electric Utilities : 0.10%
Comision Federal de Electricidad 144A				4.88		5-26-2021		650,000		679,250

Total Yankee Corporate Bonds and Notes (Cost $52,279,303)										53,042,672


			Yield				Shares
Short-Term Investments : 1.44%

Investment Companies : 1.44%
Wells Fargo Advantage Cash Investment Money Market Fund, Select Class (l)(u)##				0.08				9,850,043		9,850,043

Total Short-Term Investments (Cost $9,850,043)										9,850,043

Total investments in securities (Cost $909,651,642)*	132.43	%								906,280,124
Other assets and liabilities, net	(32.43	)								(221,910,462	)

Total net assets	100.00	%							$	684,369,662


±		Variable rate investment. The rate shown is the rate in effect at period end.
144A		Security that may be resold to “qualified institutional buyers” under Rule 144A or security offered pursuant to Section 4(2) of the Securities Act of 1933, as amended.
(c)		Interest-only securities entitle holders to receive only the interest payments on the underlying mortgages. The principal amount shown is the notional amount of the underlying mortgages. Interest rate disclosed represents the coupon rate.
†		Non-income-earning security
(a)		Security is fair valued by the Management Valuation Team, and in certain instances by the Board of Trustees, in accordance with procedures approved by the Board of Trustees.
(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.
%%		Security issued on a when-issued basis.
(s)		Security is currently in default with regards to scheduled interest and/or principal payments. The Fund has stopped accruing interest on this security.
@		Foreign bond principal is denominated in local currency.
¤		Security issued in zero coupon form with no periodic interest payments.
<		All or a portion of the position represents an unfunded loan commitment.
(l)		Investment in an affiliate
(u)		Rate shown is the 7-day annualized yield at period end.
##		All or a portion of this security has been segregated for when-issued securities and unfunded loans.
*		Cost for federal income tax purposes is $913,930,661 and unrealized appreciation (depreciation) consists of:


Gross unrealized appreciation	$	31,474,964
Gross unrealized depreciation		(39,125,501	)

Net unrealized depreciation	$	(7,650,537	)

Wells Fargo Advantage Multi-Sector Income Fund (the “Fund”)

Notes to Portfolio of investments – July 31, 2013 (unaudited)

Securities valuation

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

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

Short-term securities with maturities of 60 days or less 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, except for The Nasdaq Stock Market, Inc. (“Nasdaq”), are valued at the official closing price or, if none, the last sales price. Securities listed on Nasdaq are valued at the Nasdaq Official Closing Price (“NOCP”). If no NOCP is available, securities are valued at the last sales price. If no sales price is shown on the Nasdaq, the bid price will be used. If no sale occurs on the primary exchange or market for the security that day or if no sale occurs and no bid price is shown on Nasdaq, the prior day’s price will be deemed “stale” and fair values will be determined in accordance with the Fund’s Valuation Procedures.

Securities denominated in foreign currencies are translated into U.S. dollars using the rates of exchange in effect on the day of valuation at a time specified by the Management Valuation Team of Wells Fargo Funds Management, LLC (“Funds Management”).

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 by procedures established in good faith and approved by the Board of Trustees. 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. 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 information to assess the continued appropriateness of the fair valuation methodology 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 input factors considered in the valuation process until there is a readily available price provided on the exchange or by an independent pricing service. Valuations received from an independent pricing service or broker 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.

Foreign currency translation

The accounting records of the Fund are maintained in U.S. dollars. Assets, including investment securities, and liabilities denominated in foreign currency are translated into U.S. dollars at the rates of exchange at a time specified by the Management Valuation Team on the date of valuation. Purchases and sales of securities, and income and expenses are converted at the rate of exchange on the respective dates of such transactions. Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and liabilities other than investments in securities resulting in changes in exchange rates.

The changes in net assets arising from changes in exchange rates and the changes in net assets resulting from changes in market prices of securities are not separately presented. Such changes are recorded with net realized and unrealized gains or losses from investments. Gains and losses from certain foreign currency transactions are treated as ordinary income for U.S. federal income tax purposes.

Forward foreign currency contracts

The Fund may be subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. A forward foreign currency contract is an agreement between two parties to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund enters into forward foreign currency contracts to facilitate transactions in foreign-denominated securities and to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. Forward foreign currency contracts are recorded at the forward rate and marked-to-market daily. When the contracts are closed, realized gains and losses arising from such transactions are recorded as realized gains or losses on forward foreign currency contract transactions. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably. The Fund’s maximum risk of loss from counterparty credit risk is the unrealized gains on the contracts. This risk may be mitigated if there is a master netting arrangement between the Fund and the counterparty.

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.

Term loans

The Fund may invest in term loans. The Fund begins earning interest when the loans are funded. The loans pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. The Fund assumes the credit risk of the borrower and there could be potential loss to the Fund in the event of default by the borrower.

As of July 31, 2013, the Fund had unfunded loan commitments of $99,250.

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.

As of July 31, 2013, the inputs used in valuing investments in securities were as follows:


Investments in securities	Quoted prices (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Agency securities	$	0	$	17,972,855	$	0	$	17,972,855
Asset-backed securities		0		804,851		0		804,851
Equity securities
Common stocks		617,072		0		0		617,072
Preferred stocks		1,178,820		0		0		1,178,820
Corporate bonds and notes		0		439,284,759		0		439,284,759
Foreign corporate bonds and notes		0		26,407,826		0		26,407,826
Foreign government bonds		0		176,656,485		0		176,656,485
Municipal obligations		0		336,437		0		336,437
Non agency mortgage-backed securities		0		51,762,527		0		51,762,527
Term loans		0		117,751,104		10,614,673		128,365,777
Yankee corporate bonds and notes		0		53,042,672		0		53,042,672
Short-term investments
Investment companies		9,850,043		0		0		9,850,043

	$	11,645,935	$	884,019,516	$	10,614,673	$	906,280,124

As of July 31, 2013, the inputs used in valuing the Fund’s other financial instruments were as follows:


Other financial instruments	Quoted prices (Level 1)		Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)		Total
Forward foreign currency contracts+	$	0	$	(943,008	)	$	0	$	(943,008	)

+	Forward foreign currency contracts are presented at the unrealized losses on the instrument.

Transfers in and transfers out are recognized at the end of the reporting period. For the nine months ended July 31, 2013, 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:


	Common stocks			Term loans			Total
Balance as of October 31, 2012	$	2,322		$	16,839,203		$	16,841,525
Accrued discounts (premiums)		0			6,512			6,512
Realized gains (losses)		0			(7,637	)		(7,637	)
Change in unrealized gains (losses)		(2,322	)		(85,247	)		(87,569	)
Purchases		0			10,691,589			10,691,589
Sales		0			(16,829,747	)		(16,829,747	)
Transfers into Level 3		0			0			0
Transfers out of Level 3		0			0			0

Balance as of July 31, 2013	$	0		$	10,614,673		$	10,614,673

Change in unrealized gains (losses) relating to securities still held at July 31, 2013	$	(2,322	)	$	33,759		$	31,437

The investments types categorized above were valued using indicative broker quotes and are therefore 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.

Derivative transactions

As of July 31, 2013, the Fund entered into forward foreign currency exchange contracts for economic hedging purposes. At July 31, 2013, the Fund had forward foreign currency contracts outstanding as follows:

Forward foreign currency contracts to buy:


Exchange date	Counterparty	Contracts to receive	U.S. value at July 31, 2013		In exchange for U.S. $		Unrealized gains (losses)
8-7-2013	State Street Bank	235,000,000 THB	$	7,505,805	$	7,963,132	$	(457,327	)
8-28-2013	State Street Bank	23,150,000 MYR		7,125,900		7,599,383		(473,483	)
9-24-2013	State Street Bank	195,000,000 HUF		862,621		851,454		11,167

Forward foreign currency contracts to sell:

Exchange Date	Counterparty	Contracts to deliver	U.S. value at July 31, 2013		In exchange for U.S. $		Unrealized gains (losses)
9-24-2013	State Street Bank	1,400,000,000 HUF	$	6,193,177	$	6,119,149	$	(74,028	)
10-30-2013	State Street Bank	14,500,000 TRY		7,363,138		7,394,941		31,803
10-31-2013	State Street Bank	18,500,000 ZAR		1,851,300		1,870,160		18,860

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 — Certificate of participation

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 — Industrial development revenue

IEP — Irish pound

JPY — Japanese yen

KRW — Republic of Korea won

LIBOR — London Interbank Offered Rate

LIQ — Liquidity agreement

LLC — Limited liability company

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

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

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

SKK — Slovakian koruna

SPA — Standby purchase agreement

SPDR — Standard & Poor’s Depositary Receipts

STRIPS — Separate trading of registered interest and principal securities

TAN — Tax anticipation notes

TBA — To be announced

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 Multi-Sector Income Fund (the “Trust”) 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 Trust 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 Trust’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that 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 Multi-Sector Income Fund

By:		/s/ Karla M. Rabusch

		Karla M. Rabusch
		President

Date:		September 25, 2013

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 Multi-Sector Income Fund

By:		/s/ Karla M. Rabusch

		Karla M. Rabusch
		President

Date:		September 25, 2013

By:		/s/ Jeremy DePalma

		Jeremy DePalma
		Treasurer

Date:		September 25, 2013