Edgar Filing: WELLS FARGO MULTI-SECTOR INCOME FUND

Form N-CSRS

LOGO

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-21331

Wells Fargo Multi-Sector Income Fund

(Exact name of registrant as specified in charter)

525 Market St., San Francisco, CA 94105

(Address of principal executive offices) (Zip code)

C. David Messman

Wells Fargo Funds Management, LLC

525 Market St., 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: October 31

Date of reporting period: April 30, 2018

ITEM 1.

REPORT TO STOCKHOLDERS

Semi-Annual Report

April 30, 2018

Wells Fargo Multi-Sector Income Fund (ERC)

LOGO

Reduce clutter. Save trees.

Contents


Letter to shareholders			2

Performance highlights			6

Portfolio of investments			10

Financial statements
Statement of assets and liabilities			31
Statement of operations			32
Statement of changes in net assets			33
Statement of cash flows			34
Financial highlights			35

Notes to financial statements			36

Other information			41

Automatic dividend reinvestment plan			45

The views expressed and any forward-looking statements are as of April 30, 2018, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Funds Management, LLC. Discussions of individual securities, or the markets generally, or any Wells Fargo Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Funds Management, LLC and the Fund disclaim any obligation to publicly update or revise any views expressed or forward-looking statements.

NOT FDIC INSURED ◾ NO BANK GUARANTEE ◾ MAY LOSE VALUE


2		Wells Fargo Multi-Sector Income Fund		Letter to shareholders (unaudited)

LOGO

Andrew Owen

President

Wells Fargo Funds

Through the last quarter of 2017, global economies strengthened, equity markets advanced, and foreign bonds outperformed fixed-income investments in the U.S.

Dear Shareholder:

We are pleased to offer you this semi-annual report for the Wells Fargo Multi-Sector Income Fund for the six-month period that ended April 30, 2018. Through the last two months of 2017, global economies strengthened, equity markets advanced, and foreign bonds outperformed fixed-income investments in the U.S. while inflation remained subdued. A negative turn in investor sentiment during the first four months of 2018 sent global equity and fixed-income markets lower and rekindled concerns about inflation.

For the six-month period, U.S. stocks, as measured by the S&P 500 Index,¹ gained 3.82% and international stocks, as measured by the MSCI ACWI ex USA Index (Net),² added 3.47%. Emerging market stocks, as measured by the MSCI EM Index (Net),³ added 4.80%. In bond markets, the Bloomberg Barclays U.S. Aggregate Bond Index⁴ declined 1.87% while fixed-income investments outside the U.S. gained 3.70%, as measured by the Bloomberg Barclays Global Aggregate ex-USD Index.⁵ The Bloomberg Barclays Municipal Bond Index⁶ fell 0.97%, and the ICE BofAML U.S. High Yield Index⁷ was down 0.23%.

The fourth quarter of 2017 was characterized by continued optimism in global markets.

U.S. stocks continued to rally during the fourth quarter of 2017, boosted by synchronized expansion in the global economy and favorable company earnings. In October 2017, the U.S. Federal Reserve (Fed) began to sell the bonds acquired during a series of quantitative easing programs following the 2008 financial crisis. The Bank of England suggested it could hike interest rates in November, and the pound gained against other currencies. In addition, the Fed increased rates by another 25 basis points (bps; 100 bps equal 1.00%) in December. Stocks received a boost from growing optimism about tax reform legislation.

International markets, particularly emerging markets, continued to show strength, supported by several factors that led some observers to describe conditions as a Goldilocks economic scenario: synchronized global growth, low inflation, and healthy corporate earnings, all supported abroad by a weaker U.S. dollar.

¹	The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock’s weight in the index proportionate to its market value. You cannot invest directly in an index.

The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the United States and Canada. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. You cannot invest directly in an index.

The MSCI Emerging Markets (EM) Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure large- and mid-cap equity market performance of emerging markets. The MSCI EM Index (Net) consists of the following 24 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, Peru, the Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey, and the United Arab Emirates. You cannot invest directly in an index.

⁴

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index.

⁵	The Bloomberg Barclays Global Aggregate ex-USD Index is an unmanaged index that provides a broad-based measure of the global investment-grade fixed-income markets excluding the U.S. dollar-denominated debt market. You cannot invest directly in an index.

⁶	The Bloomberg Barclays Municipal Bond Index is an unmanaged index composed of long-term tax-exempt bonds with a minimum credit rating of Baa. You cannot invest directly in an index.

⁷

The ICE BofAML U.S. High Yield Index is a market-capitalization-weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index. Copyright 2018. ICE Data Indices, LLC. All rights reserved.


Letter to shareholders (unaudited)		Wells Fargo Multi-Sector Income Fund			3

Volatility reemerged during the first four months of 2018 as economic signals were mixed.

The first four months of 2018 began with stock market gains in January. Subsequently, investor optimism was supplanted by several concerns. Trade tensions emerged, particularly between the U.S. and China, as the U.S. threatened to impose tariffs on a broad range of imported products. Increasing interest rates and inflation also caused concern. Long-term interest rates in the U.S. trended higher—rates on the 10-year and 30-year Treasury bonds moved from 2.46% and 2.81%, respectively, at the beginning of the year on January 1, 2018, to 2.95% and 3.11%, respectively, on April 30, 2018.

During February 2018, the U.S. stock market endured a loss of more than 10% before recovering. The Fed increased the federal funds rate by 25 bps in March, and the rate of inflation reached the Fed’s 2% target for the first time in a year. In April, the U.S. Bureau of Economic Analysis placed first-quarter U.S. gross domestic product growth at 2.3%. The unemployment rate fell to a 17-year low of 3.9% in April, and wage growth data improved.

Internationally, central banks maintained low interest rates and monetary policies that were accommodative of business activity. Industrial production, retail sales, and fixed-asset investment increased in China. During January 2018, purchasing managers’ indices in China, the eurozone, India, and Japan reported data for December that indicated continued growth. Despite positive economic signals and business fundamentals, international stock values fell during February and March 2018, swept up in the selling momentum in U.S. markets before generally moving higher in April.

Don’t let short-term uncertainty derail long-term investment goals.

Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.

Thank you for choosing to invest with Wells Fargo Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.

Sincerely,

LOGO

Andrew Owen

President

Wells Fargo Funds

During February 2018, the U.S. stock market endured a loss of more than 10% before recovering.


4		Wells Fargo Multi-Sector Income Fund		Letter to shareholders (unaudited)

Notice to shareholders

The Fund’s managed distribution plan provides for the declaration of monthly distributions to common shareholders of the Fund at an annual minimum fixed rate of 9% based on the Fund’s average monthly NAV per share over the prior 12 months. Under the managed distribution plan, monthly distributions may be sourced from income, paid-in capital, and/or capital gains, if any. To the extent that sufficient investment income is not available on a monthly basis, the Fund may distribute paid-in capital and/or capital gains, if any, in order to maintain its managed distribution level. You should not draw any conclusions about the Fund’s investment performance from the amount of the Fund’s distributions or from the terms of the managed distribution plan. Shareholders may elect to reinvest distributions received pursuant to the managed distribution plan in the Fund under the existing dividend reinvestment plan, which is described later in this report.

On November 10, 2017, the Fund announced an extension of its open-market share repurchase program (the “Buyback Program”). Under the extended Buyback Program, the Fund may repurchase up to 10% of its outstanding shares in open market transactions during the period beginning on January 1, 2018 and ending on December 31, 2018. The Fund’s Board of Trustees has delegated to Wells Fargo Funds Management, LLC, the Fund’s adviser, discretion to administer the Buyback Program including the determination of the amount and timing of repurchases in accordance with the best interests of the Fund and subject to applicable legal limitations.

For further information about your Fund, contact your investment professional, visit our website at wellsfargofunds.com, or call us directly at 1-800-222-8222.

This page is intentionally left blank.


6		Wells Fargo Multi-Sector Income Fund		Performance highlights (unaudited)

Investment objective

The Fund seeks a high level of current income consistent with limiting its overall exposure to domestic interest rate risk.

Strategy summary

The Fund allocates its assets between three separate investment strategies, or sleeves. Under normal market conditions, the Fund will allocate approximately 30%-70% of its total assets to a sleeve consisting of non-investment-grade (high yield) corporate debt, including floating-rate high yield bank loan securities; approximately 10%-40% to a sleeve of foreign debt securities, including emerging market debt; and approximately 10%-30% to a sleeve of adjustable-rate and fixed-rate mortgage backed securities, and investment grade corporate bonds.

Adviser

Wells Fargo Funds Management, LLC

Subadvisers

Wells Fargo Asset Management (International), LLC

Wells Capital Management Incorporated

Portfolio managers

Christopher Y. Kauffman, CFA^®

Michael Lee

Niklas Nordenfelt, CFA^®

Tony Norris

Alex Perrin

Phillip Susser

Christopher Wightman

Peter Wilson

Noah Wise, CFA^®

Average annual total returns (%) as of April 30, 2018¹


	6 months			1 year			5 year			10 year
Based on market value		4.34			4.95			3.89			8.02
Based on net asset value (NAV) per share		2.71			6.62			4.61			7.39
Multi-Sector Income Blended Index²		0.77			4.02			2.89			5.46
ICE BofAML U.S. Cash Pay High Yield Index³		(0.27	)		3.18			4.73			7.68
J.P. Morgan GBI-EM Global Diversified Composite Index⁴		5.15			8.38			(1.92	)		3.33
Bloomberg Barclays Credit Bond Index⁵		(2.34	)		0.65			2.27			4.99
Bloomberg Barclays U.S. Securitized Index⁶		(1.52	)		(0.37	)		1.59			3.43
J.P. Morgan Global Government Index (ex U.S.)⁷		4.19			8.03			0.76			2.19

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the sales of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Performance figures of the Fund do not reflect brokerage commissions that a shareholder would pay on the purchase and sale of shares. If taxes and such brokerage commissions had been reflected, performance would have been lower. To obtain performance information current to the most recent month-end, please call 1-800-222-8222.

The Fund’s annualized expense ratio for the six months ended April 30, 2018, was 2.00% which includes 0.89% of interest expense.

Comparison of NAV vs. market value⁸

LOGO

The Fund is leveraged through a revolving credit facility. The use of leverage results in certain risks, including, among others, the likelihood of greater volatility of net asset value and the market value of common shares. Foreign investments are especially volatile and can rise or fall dramatically due to differences in the political and economic conditions of the host country. These risks are generally intensified in emerging markets. Derivatives involve additional risks, including interest-rate risk, credit risk, the risk of improper valuation, and the risk of non-correlation to the relevant instruments that they are designed to hedge or closely track. Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the Fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest rate changes and their impact on the Fund and its share price can be sudden and unpredictable. High-yield securities have a greater risk of default and tend to be more volatile than higher-rated debt securities. The Fund is exposed to mortgage- and asset-backed securities risk. This closed-end fund is no longer available as an initial public offering and is only offered through broker/dealers on the secondary market.

Please see footnotes on page 7.


Performance highlights (unaudited)		Wells Fargo Multi-Sector Income Fund			7

Total returns based on market value are calculated assuming a purchase of common stock on the first day and sale on the last day of the period reported. Total returns based on NAV are calculated based on the NAV at the beginning of the period and end of the period. Dividends and distributions, if any, are assumed for the purposes of these calculations to be reinvested at prices obtained under the Fund’s Automatic Dividend Reinvestment Plan.

Source: Wells Fargo Funds Management, LLC. The Multi-Sector Income Blended Index is composed of 60% ICE BofAML U.S. Cash Pay High Yield Index, 18% J.P. Morgan GBI-EM Global Diversified Composite Index, 7.5% Bloomberg Barclays Credit Bond Index, 7.5% Bloomberg Barclays U.S. Securitized Index, and 7% J.P. Morgan Global Government Bond Index (ex U.S.).

The ICE BofAML U.S. Cash Pay High Yield Index tracks the performance of U.S. dollar-denominated below investment grade corporate debt, currently in a coupon paying period, that is publicly issued in the U.S. domestic market. You cannot invest directly in an index. Copyright 2018. ICE Data Indices, LLC. All rights reserved.

⁴	The J.P. Morgan GBI-EM Global Diversified Composite Index is an unmanaged index of debt instruments of 31 emerging countries. You cannot invest directly in an index.

⁵	The Bloomberg Barclays Credit Bond Index is an unmanaged index of fixed income securities composed of securities from the Bloomberg Barclays Government/Corporate Bond Index, Mortgage-Backed Securities Index, and the Asset- Backed Securities Index. You cannot invest directly in an index.

⁶	The Bloomberg Barclays U.S. Securitized Index is an unmanaged composite of asset-backed securities, collateralized mortgage-backed securities (ERISA-eligible), and fixed-rate mortgage-backed securities. You cannot invest directly in an index.

⁷	The J.P. Morgan Global Government Bond Index (ex U.S.) measures the total return from investing in 12 developed government bond markets: Australia, Belgium, Canada, Denmark, France, Germany, Italy, Japan, the Netherlands, Spain, Sweden, and the U.K. You cannot invest directly in an index.

⁸	This chart does not reflect any brokerage commissions charged on the purchase and sale of the Fund’s common stock. Dividends and distributions paid by the Fund are included in the Fund’s average annual total returns but have the effect of reducing the Fund’s NAV.

⁹

¹⁰	The ten largest holdings, excluding cash and cash equivalents, are calculated based on the value of the investments divided by total net assets of the Fund. Holdings are subject to change and may have changed since the date specified.

¹¹

The credit quality distribution of portfolio holdings reflected in the chart is based on ratings from Standard & Poor’s, Moody’s Investors Service, and/or Fitch Ratings Ltd. Credit quality ratings apply to the underlying holdings of the Fund and not to the Fund itself. The percentages of the Fund’s portfolio with the ratings depicted in the chart are calculated based on the total market value of fixed income securities held by the Fund. If a security was rated by all three rating agencies, the middle rating was utilized. If rated by two of three rating agencies, the lower rating was utilized, and if rated by one of the rating agencies, that rating was utilized. Standard & Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories. Standard & Poor’s rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody’s rates the creditworthiness of bonds, ranging from Aaa (highest) to C (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Moody’s rates the creditworthiness of short-term U.S. tax-exempt municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Credit quality distribution is subject to change and may have changed since the date specified.

¹²	Amounts are calculated based on the total long-term investments of the Fund. These amounts are subject to change and may have changed since the date specified.


8		Wells Fargo Multi-Sector Income Fund		Performance highlights (unaudited)

MANAGERS’ DISCUSSION

The Fund’s return based on market value was 4.34% for the six-month period that ended April 30, 2018. During the same period, the Fund’s return based on its net asset value (NAV) was 2.71%. Based on its NAV return, the Fund outperformed the Multi-Sector Income Blended Index, which added 0.77% over the same period.

Overview

During the period, among corporate and mortgage bonds and as measured by the Bloomberg Barclays U.S. Aggregate Bond Index⁹, U.S. investment-grade corporate bonds underperformed U.S. Treasuries with strong performance through January that was more than erased when spreads widened in February and March. Commercial mortgage-backed securities (CMBS) and residential mortgage-backed securities (RMBS) generated relatively higher returns. Floating-rate and interest-only securities were the best performers, while fixed-rate agency collateralized mortgage obligations (CMOs) and agency multifamily mortgage securities were the worst.

Among high-yield bonds, lower-quality CCC-rated bonds outperformed higher-quality, more interest-rate-sensitive bonds. This is not particularly unusual in the latter stages of an economic cycle when interest rates begin to rise.

Among bonds issued in international and emerging markets, returns were strong but front-loaded, with gains in November, January, and March offset by losses in February and April. Emerging market bonds have held up relatively well in the face of rising U.S. bond yields, but the tone on currency markets turned less positive late in the first quarter of 2018.


Ten largest holdings(%) as of April 30, 2018¹⁰
Malaysia, 4.23%, 6-30-2031			2.77
Mexico, 8.00%, 11-07-2047			2.63
Indonesia, 7.88%, 4-15-2019			2.15
LPL Holdings Incorporated, 5.75%, 9-15-2025			2.12
Colombia, 7.50%, 8-26-2026			1.91
Indonesia, 8.38%, 9-15-2026			1.87
NGPL PipeCo LLC, 7.77%, 12-15-2037			1.69
Colombia, 7.00%, 5-04-2022			1.53
Colombia, 7.00%, 9-11-2019			1.48
New Zealand, 4.50%, 4-15-2027			1.43

Credit qualityas of April 30, 2018¹¹

Contributors to performance

Securitized holdings generally added value during the period with CMBS and RMBS being the largest contributors within the mortgage and corporate sleeve of the Fund. Holdings in non-corporate credit sectors like agencies and supranationals also helped performance. Security selection within property and casualty companies in the financials sector contributed, as did selection in metals and mining companies in the industrials sector.

Many emerging bond and currency markets turned in strong performances. Exposure to South Africa, Colombia, and Mexico contributed. Indonesian and Brazilian bonds and exposure to the Malaysian ringgit also added value.

Overall, industry credit selection contributed to portfolio performance with the high-yield sleeve, with solid security selection in oil-field services, finance companies, cable and satellite, and pharmaceutical companies. Credit selection in high-quality BB-rated and lower-quality CCC-rated companies also helped. The shorter average life of the portfolio also had a positive effect.

Detractors from performance

Within the mortgage and corporate sleeve of the Fund, holdings in agency multifamily and fixed-rate agency CMOs were modest detractors as were certain agency MBS pools.

The main detractors from Fund performance in the high-yield sleeve were credit selection in the energy exploration and production, brokers/asset manager, and media entertainment sectors.

Within the international and emerging market bonds, positioning in the Brazilian real and Indonesian ringgit weighed on overall portfolio performance. Exposure to the Indian rupee was also a detractor.

Please see footnotes on page 7.


Performance highlights (unaudited)		Wells Fargo Multi-Sector Income Fund			9

Outlook

While we expect fundamentals to remain favorable for corporate credit over the remainder of the year, we see limited upside from current levels as valuations already reflect a benign macro environment. From an economic perspective, the economy has experienced accelerating growth led by a strong labor market, solid consumer confidence, relatively healthy household balance sheets, simulative tax reform, and synchronized global growth. All of these conditions provide a solid backdrop for low high-yield spreads. Our strategy is to maintain current exposure to credit and wait for weakness to add to those holdings. We plan to reduce credit exposure if spreads tighten noticeably from present levels and in the meantime will seek opportunities to capture relative value from industry, yield curve, and individual issue decisions. Within securitized sectors, we remain focused on shorter-duration cash flows in the senior part of the capital structure.

We are always on the lookout for potential threats to growth. Typically prolonged easy credit conditions lead to an increase in aggressively financed deals within the high-yield sector in which weaker companies are able to raise money and pollute the high-yield market with riskier bonds as a whole. From a ratings perspective in the high-yield bond market, quality is strong as the percentage of the high-yield index composed of BB-rated credits is near an all-time high and the percentage of CCC-rated bonds is at low levels not seen since the late 1990s. Interest coverage levels, which measure a company’s ability to meet interest expenses, are higher than average.

Markets have turned more volatile of late, and the overhang of trade and geopolitical worries suggests this will remain the case. International and emerging markets are offering value on a relative basis versus developed markets, but increased selectivity will be important in the quarters to come. Within these markets, we continue to tilt away from low-yielding markets and toward higher-yielding and emerging market issues.

Burgeoning market risk includes gradually increasing inflation and potential trade wars. Our concerns about inflation are mitigated by the fact that inflation often takes a fair amount of time to build up and it will take time to have a detrimental impact. Our concern about trade wars is mitigated by the large entrenched interests that would be hurt by a trade war and a broader understanding in the investment, business, and government communities that all parties lose in a trade war.

Effective maturity distributionas of April 30, 2018¹²

LOGO

Country allocationas of April 30, 2018¹²

LOGO

Please see footnotes on page 7.


10		Wells Fargo Multi-Sector Income Fund		Portfolio of investments—April 30, 2018 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value

Agency Securities: 1.70%
FHLMC (5 Year Treasury Constant Maturity +2.06%) ±		3.54	%		9-1-2032	$	932,043	$	962,620
FHLMC		8.50			7-1-2028		35,211		39,640
FHLMC Series 1383 (1 Year Treasury Constant Maturity +2.25%) ±		3.62			2-1-2037		218,298		228,848
FHLMC Series 196 Class A (1 Month LIBOR +0.80%) ±		2.70			12-15-2021		8,037		8,086
FHLMC Series 2011-K16 Class B 144A±±		4.60			11-25-2046		1,000,000		1,040,587
FHLMC Series 2012-K17 Class B 144A±±		4.49			12-25-2044		675,000		691,663
FHLMC Series 2012-K18 Class B 144A±±		4.26			1-25-2045		810,000		827,695
FHLMC Series 2012-K706 Class B 144A±±		4.03			11-25-2044		500,000		500,911
FHLMC Series 2012-K706 Class C 144A±±		4.03			11-25-2044		805,000		805,530
FHLMC Series 2012-K707 Class B 144A±±		4.02			1-25-2047		930,000		932,329
FHLMC Series 2012-K711 Class B 144A±±		3.68			8-25-2045		264,000		265,369
FHLMC Series 2013-K30 Class B 144A±±		3.67			6-25-2045		700,000		694,502
FHLMC Series 2390 Class FD (1 Month LIBOR +0.45%) ±		2.35			12-15-2031		18,141		18,262
FHLMC Series 2567 Class FH (1 Month LIBOR +0.40%) ±		2.30			2-15-2033		54,639		54,674
FHLMC Series K007 Class X1 ±±(c)		1.21			4-25-2020		769,319		12,647
FHLMC Series K016 Class X1 ±±(c)		1.52			10-25-2021		362,111		15,543
FHLMC Series K020 Class X1 ±±(c)		1.56			5-25-2022		6,397,799		299,553
FNMA (6 Month LIBOR +1.64%) ±		3.27			9-1-2037		57,050		58,902
FNMA		6.00			4-1-2033		60,154		61,729
FNMA		7.50			2-1-2030		23,215		23,354
FNMA		7.50			9-1-2030		30,040		30,325
FNMA Series 1996-46 Class FA (1 Month LIBOR +0.50%) ±		2.40			8-25-2021		3,816		3,818
FNMA Series 1997-20 Class IO ±±(c)		1.84			3-25-2027		529,569		12,693
FNMA Series 2001-25 Class Z		6.00			6-25-2031		94,783		101,633
FNMA Series 2001-35 Class F (1 Month LIBOR +0.60%) ±		2.50			7-25-2031		4,463		4,532
FNMA Series 2001-57 Class F (1 Month LIBOR +0.50%) ±		2.40			6-25-2031		4,493		4,518
FNMA Series 2002-77 Class FH (1 Month LIBOR +0.40%) ±		2.29			12-18-2032		33,314		33,336
FNMA Series 2002-97 Class FR (1 Month LIBOR +0.55%) ±		2.45			1-25-2033		7,675		7,775
FNMA Series G91-16 Class F (1 Month LIBOR +0.45%) ±		2.35			6-25-2021		5,066		5,087
FNMA Series G92-17 Class F (1 Month LIBOR +1.05%) ±		2.95			3-25-2022		21,356		21,615
GNMA		6.50			6-15-2028		24,593		27,508

Total Agency Securities (Cost $7,555,827)									7,795,284


Asset-Backed Securities: 0.87%
Asset-Backed Funding Certificates Series 2003-AHL1 Class A1		4.18			3-25-2033		153,675		153,315
Bear Stearns Asset Backed Securities Series 2002-2 Class A1 (1 Month LIBOR +0.66%)		2.56			10-25-2032		170,639		171,192
Countrywide Asset Backed Certificates Series 2003-5 Class AF5		5.21			2-25-2034		87,960		90,400
CVS Pass-Through Trust Series T		6.04			12-10-2028		481,701		514,912
Equity One Asset Backed Securities Series 2004-2 Class AF4 ±±		4.62			7-25-2034		119,269		119,082
Five Guys Funding LLC Series 17-1A Class A2 144A		4.60			7-25-2047		995,000		995,298
Mesa Trust Asset Backed Certificates Series 2001-5 Class A (1 Month LIBOR +0.40%) 144A		2.67			12-25-2031		12,123		11,951
MMAF Equipment Finance LLC Series 2017-AA Class A4 144A		2.41			8-16-2024		170,000		166,307
Montana Higher Education Student Assistance Corporation Series 2012-1 Class A2 (1 Month LIBOR +1.00%)		2.82			5-20-2030		541,649		546,733
Navient SLM Student Loan Series 2005-B Class A3 (3 Month LIBOR +0.27%)		2.39			12-15-2023		38,083		38,089
Saxon Asset Securities Trust Series 2002-1 Class AF5		5.94			12-25-2030		123,095		125,795
Saxon Asset Securities Trust Series 2003-1 Class AF7		4.03			6-25-2033		386,856		391,945
Structured Asset Securities Corporation Series 1998-2 Class A (1 Month LIBOR +0.52%)		2.42			2-25-2028		118,505		117,444

The accompanying notes are an integral part of these financial statements.


Portfolio of investments—April 30, 2018 (unaudited)		Wells Fargo Multi-Sector Income Fund			11


Security name	Interest rate			Maturity date		Principal		Value

Asset-Backed Securities (continued)
Structured Asset Securities Corporation Series 2002-9 Class A2 (1 Month LIBOR +0.60%)		2.17	%		10-25-2027	$	46,531	$	45,953
Student Loan Consolidation Center Series 2011-1 Class A (1 Month LIBOR +1.22%) 144A		3.12			10-25-2027		475,738		482,319

Total Asset-Backed Securities (Cost $3,994,747)									3,970,735


						Shares
Common Stocks: 0.00%

Materials: 0.00%

Chemicals: 0.00%
LyondellBasell Industries NV Class A							9		952


Total Common Stocks (Cost $779)									952


						Principal
Corporate Bonds and Notes: 72.79%

Consumer Discretionary: 14.11%

Auto Components: 1.29%
Allison Transmission Incorporated 144A		4.75			10-1-2027	$	650,000		611,813
Allison Transmission Incorporated 144A		5.00			10-1-2024		2,250,000		2,209,950
Cooper Tire & Rubber Company		7.63			3-15-2027		1,710,000		1,906,650
Cooper Tire & Rubber Company		8.00			12-15-2019		600,000		642,000
Goodyear Tire & Rubber Company		8.75			8-15-2020		468,000		519,480

									5,889,893


Distributors: 0.26%
LKQ Corporation		4.75			5-15-2023		1,075,000		1,065,916
Spectrum Brands Incorporated		6.63			11-15-2022		125,000		129,375

									1,195,291


Diversified Consumer Services: 1.22%
Service Corporation International		4.63			12-15-2027		650,000		635,570
Service Corporation International		5.38			5-15-2024		100,000		102,345
Service Corporation International		7.50			4-1-2027		3,400,000		3,876,000
Service Corporation International		8.00			11-15-2021		850,000		956,250

									5,570,165


Hotels, Restaurants & Leisure: 1.33%
CCM Merger Incorporated 144A		6.00			3-15-2022		3,531,000		3,592,793
Hilton Domestic Operating Company Incorporated		5.13			5-1-2026		425,000		425,000
Pinnacle Entertainment Incorporated		5.63			5-1-2024		325,000		339,625
Wyndham Hotels & Resorts Company 144A		5.38			4-15-2026		1,725,000		1,742,250

									6,099,668


Internet & Direct Marketing Retail: 0.17%
Expedia Incorporated		5.95			8-15-2020		750,000		791,100

The accompanying notes are an integral part of these financial statements.


12		Wells Fargo Multi-Sector Income Fund		Portfolio of investments—April 30, 2018 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value

Media: 7.68%
Altice US Finance I Corporation 144A		5.38	%		7-15-2023	$	1,395,000	$	1,396,744
Altice US Finance I Corporation 144A		5.50			5-15-2026		1,275,000		1,235,953
CCO Holdings LLC 144A		4.00			3-1-2023		100,000		96,500
CCO Holdings LLC 144A		5.00			2-1-2028		150,000		138,507
CCO Holdings LLC		5.13			2-15-2023		100,000		100,470
CCO Holdings LLC 144A		5.13			5-1-2027		450,000		421,637
CCO Holdings LLC		5.25			9-30-2022		1,250,000		1,271,500
CCO Holdings LLC 144A		5.38			5-1-2025		4,150,000		4,079,969
CCO Holdings LLC		5.75			9-1-2023		50,000		50,625
CCO Holdings LLC 144A		5.50			5-1-2026		215,000		209,346
CCO Holdings LLC 144A		5.75			2-15-2026		3,375,000		3,349,688
CCO Holdings LLC 144A		5.88			4-1-2024		1,250,000		1,268,763
Cequel Communications Holdings I LLC 144A		7.75			7-15-2025		2,030,000		2,136,575
Cinemark USA Incorporated		4.88			6-1-2023		375,000		370,781
CSC Holdings LLC 144A		5.38			2-1-2028		425,000		397,375
CSC Holdings LLC		8.63			2-15-2019		383,000		398,577
EMI Music Publishing Group 144A		7.63			6-15-2024		1,425,000		1,541,850
Gray Television Incorporated 144A		5.13			10-15-2024		450,000		429,188
Gray Television Incorporated 144A		5.88			7-15-2026		3,875,000		3,729,688
Interpublic Group of Companies		4.00			3-15-2022		750,000		754,212
Lamar Media Corporation		5.38			1-15-2024		375,000		383,438
Live Nation Entertainment Incorporated 144A		4.88			11-1-2024		1,400,000		1,370,250
Live Nation Entertainment Incorporated 144A		5.63			3-15-2026		250,000		249,375
National CineMedia LLC		6.00			4-15-2022		1,950,000		1,979,250
Nexstar Broadcasting Group Incorporated 144A		5.63			8-1-2024		850,000		837,250
Nexstar Broadcasting Group Incorporated 144A		6.13			2-15-2022		950,000		977,313
Nielsen Finance LLC 144A		5.00			4-15-2022		75,000		75,570
Outfront Media Capital Corporation		5.63			2-15-2024		20,000		20,200
Outfront Media Capital Corporation		5.88			3-15-2025		775,000		794,375
Salem Media Group Incorporated 144A		6.75			6-1-2024		2,200,000		2,084,500
The E.W. Scripps Company 144A		5.13			5-15-2025		2,460,000		2,287,800
Time Warner Cable Incorporated		4.00			1-15-2022		750,000		761,970

									35,199,239


Multiline Retail: 0.13%
Macy’s Retail Holdings Incorporated		3.88			1-15-2022		600,000		597,220


Specialty Retail: 1.77%
Advance Auto Parts Incorporated		4.50			1-15-2022		600,000		616,302
Asbury Automotive Group Incorporated		6.00			12-15-2024		1,175,000		1,166,188
Lithia Motors Incorporated 144A		5.25			8-1-2025		945,000		935,550
Penske Auto Group Incorporated		3.75			8-15-2020		540,000		535,950
Penske Auto Group Incorporated		5.38			12-1-2024		2,150,000		2,133,875
Penske Auto Group Incorporated		5.75			10-1-2022		1,155,000		1,185,319
Sonic Automotive Incorporated		5.00			5-15-2023		849,000		818,224
Sonic Automotive Incorporated		6.13			3-15-2027		775,000		744,000

									8,135,408

The accompanying notes are an integral part of these financial statements.


Portfolio of investments—April 30, 2018 (unaudited)		Wells Fargo Multi-Sector Income Fund			13


Security name	Interest rate			Maturity date		Principal		Value

Textiles, Apparel & Luxury Goods: 0.26%
The William Carter Company		5.25	%		8-15-2021	$	600,000	$	609,750
Wolverine World Wide Incorporated 144A		5.00			9-1-2026		600,000		573,563

									1,183,313


Consumer Staples: 1.39%

Beverages: 0.28%
Anheuser-Busch InBev Finance Incorporated		3.75			1-15-2022		600,000		609,890
Cott Beverages Incorporated 144A		5.50			4-1-2025		675,000		669,938

									1,279,828


Food Products: 0.90%
B&G Foods Incorporated		4.63			6-1-2021		300,000		296,532
B&G Foods Incorporated		5.25			4-1-2025		1,050,000		960,750
Darling Ingredients Incorporated		5.38			1-15-2022		180,000		183,375
Kraft Foods Group Incorporated		3.50			6-6-2022		750,000		746,061
Lamb Weston Holdings Incorporated 144A		4.63			11-1-2024		175,000		173,469
Pilgrim’s Pride Corporation 144A		5.75			3-15-2025		1,305,000		1,275,638
Pilgrim’s Pride Corporation 144A		5.88			9-30-2027		150,000		143,250
Pinnacle Foods Incorporated		5.88			1-15-2024		75,000		77,250
Prestige Brands Incorporated 144A		6.38			3-1-2024		280,000		281,400

									4,137,725


Household Products: 0.06%
Central Garden & Pet Company		5.13			2-1-2028		225,000		213,188
Spectrum Brands Incorporated		5.75			7-15-2025		50,000		49,953

									263,141


Tobacco: 0.15%
Reynolds American Incorporated		6.88			5-1-2020		650,000		694,531


Energy: 18.73%

Energy Equipment & Services: 5.72%
Bristow Group Incorporated		6.25			10-15-2022		3,430,000		2,829,750
Bristow Group Incorporated 144A		8.75			3-1-2023		775,000		800,188
Diamond Offshore Drilling Incorporated		4.88			11-1-2043		1,325,000		954,000
Era Group Incorporated		7.75			12-15-2022		2,350,000		2,303,000
Hilcorp Energy Company 144A		5.00			12-1-2024		1,450,000		1,410,125
Hilcorp Energy Company 144A		5.75			10-1-2025		1,525,000		1,509,750
Hornbeck Offshore Services Incorporated		1.50			9-1-2019		4,750,000		3,752,510
Hornbeck Offshore Services Incorporated		5.00			3-1-2021		150,000		84,000
Hornbeck Offshore Services Incorporated		5.88			4-1-2020		1,860,000		1,199,700
NGPL PipeCo LLC 144A		4.38			8-15-2022		350,000		348,250
NGPL PipeCo LLC 144A		4.88			8-15-2027		550,000		534,703
NGPL PipeCo LLC 144A		7.77			12-15-2037		6,435,000		7,754,138
Oceaneering International Incorporated		6.00			2-1-2028		800,000		796,000
PHI Incorporated		5.25			3-15-2019		1,125,000		1,071,439
USA Compression Partners LP 144A		6.88			4-1-2026		850,000		867,000

									26,214,553

The accompanying notes are an integral part of these financial statements.


14		Wells Fargo Multi-Sector Income Fund		Portfolio of investments—April 30, 2018 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value

Oil, Gas & Consumable Fuels: 13.01%
Carrizo Oil & Gas Incorporated		8.25	%		7-15-2025	$	800,000	$	858,008
Cheniere Energy Incorporated 144A		5.25			10-1-2025		3,725,000		3,641,188
Continental Resources Incorporated		3.80			6-1-2024		700,000		682,500
Continental Resources Incorporated 144A		4.38			1-15-2028		250,000		245,625
Continental Resources Incorporated		5.00			9-15-2022		675,000		685,125
DCP Midstream Operating LLC		2.70			4-1-2019		725,000		717,757
Denbury Resources Incorporated		6.38			8-15-2021		3,209,000		2,904,145
Denbury Resources Incorporated 144A		9.25			3-31-2022		676,000		703,040
El Paso LLC		6.50			4-1-2020		750,000		792,113
Enable Midstream Partner LP		2.40			5-15-2019		2,350,000		2,322,447
Enable Midstream Partner LP		3.90			5-15-2024		1,750,000		1,692,642
Enable Oklahoma Intrastate Transmission LLC 144A		6.25			3-15-2020		250,000		259,746
Energy Transfer Partners LP		5.20			2-1-2022		750,000		779,187
EnLink Midstream LLC		4.40			4-1-2024		3,200,000		3,171,545
Exterran Partners LP		6.00			4-1-2021		2,550,000		2,543,625
Kinder Morgan Energy Partners LP		3.95			9-1-2022		750,000		751,517
Kinder Morgan Incorporated		6.50			9-15-2020		285,000		304,721
Kinder Morgan Incorporated		7.42			2-15-2037		800,000		883,267
Matador Resources Company		6.88			4-15-2023		300,000		313,500
Murphy Oil Corporation		4.45			12-1-2022		1,250,000		1,220,313
Murphy Oil Corporation		5.75			8-15-2025		185,000		184,538
Murphy Oil Corporation		6.88			8-15-2024		850,000		899,938
Nabors Industries Limited		4.63			9-15-2021		750,000		733,125
Phillips 66		4.30			4-1-2022		625,000		646,751
Pioneer Natural Resources Company		3.95			7-15-2022		750,000		760,733
Rockies Express Pipeline LLC 144A		5.63			4-15-2020		3,500,000		3,623,585
Rockies Express Pipeline LLC 144A		6.88			4-15-2040		3,074,000		3,542,785
Rockies Express Pipeline LLC 144A		7.50			7-15-2038		240,000		289,800
Rockpoint Gas Storage 144A		7.00			3-31-2023		1,375,000		1,373,281
Rose Rock Midstream LP		5.63			7-15-2022		1,300,000		1,257,750
Rose Rock Midstream LP		5.63			11-15-2023		825,000		777,563
Sabine Pass Liquefaction LLC		5.63			2-1-2021		600,000		629,694
Sabine Pass Liquefaction LLC		5.63			4-15-2023		1,500,000		1,598,119
Sabine Pass Liquefaction LLC		5.63			3-1-2025		410,000		436,454
Sabine Pass Liquefaction LLC		5.75			5-15-2024		1,000,000		1,073,178
Sabine Pass Liquefaction LLC		6.25			3-15-2022		1,575,000		1,699,623
SemGroup Corporation		6.38			3-15-2025		3,425,000		3,262,313
SemGroup Corporation		7.25			3-15-2026		1,000,000		992,500
Southern Star Central Corporation 144A		5.13			7-15-2022		925,000		941,188
Southwestern Energy Company		7.50			4-1-2026		400,000		411,000
Southwestern Energy Company		7.75			10-1-2027		400,000		412,000
Summit Midstream Holdings LLC		5.75			4-15-2025		225,000		214,646
Tallgrass Energy Partners LP 144A		5.50			9-15-2024		5,200,000		5,278,000
Tesoro Logistics LP		6.38			5-1-2024		450,000		479,250
Ultra Resources Incorporated 144A		6.88			4-15-2022		650,000		477,750
Ultra Resources Incorporated 144A		7.13			4-15-2025		2,125,000		1,417,109
Western Gas Partners LP		5.38			6-1-2021		15,000		15,518
Williams Partners LP		3.35			8-15-2022		750,000		730,182

									59,630,384

The accompanying notes are an integral part of these financial statements.


Portfolio of investments—April 30, 2018 (unaudited)		Wells Fargo Multi-Sector Income Fund			15


Security name	Interest rate			Maturity date		Principal		Value

Financials: 8.74%

Banks: 1.31%
Bank of America Corporation		5.70	%		1-24-2022	$	250,000	$	270,424
Citigroup Incorporated		4.13			3-9-2021		60,000		60,063
Citigroup Incorporated		4.50			1-14-2022		250,000		258,950
Citigroup Incorporated		5.25			3-7-2025		10,000		10,213
Citigroup Incorporated		6.13			3-9-2028		75,000		77,531
City National Bank		5.38			7-15-2022		500,000		528,470
International Bank for Reconstruction & Development		7.50			6-9-2021		5,000,000		1,452,672
International Finance Corporation		7.50			5-9-2022		9,000,000		2,597,982
JPMorgan Chase & Company		3.38			5-1-2023		750,000		734,697

									5,991,002


Capital Markets: 0.39%
ACE Securities Corporation (1 Month LIBOR +2.63%) ±		4.52			6-25-2033		189,054		189,247
Blackstone Holdings Finance Company LLC 144A		5.88			3-15-2021		750,000		799,766
Goldman Sachs Group Incorporated		5.75			1-24-2022		750,000		806,936

									1,795,949


Consumer Finance: 1.77%
Ally Financial Incorporated		8.00			12-31-2018		780,000		803,400
Ally Financial Incorporated		8.00			3-15-2020		880,000		948,200
Discover Financial Services		5.20			4-27-2022		750,000		781,810
FirstCash Incorporated 144A		5.38			6-1-2024		575,000		583,625
Ford Motor Credit Company LLC		5.00			5-15-2018		650,000		650,629
General Motors Financial Company Incorporated		3.70			5-9-2023		750,000		737,491
Navient Corporation		8.00			3-25-2020		930,000		990,450
OneMain Financial Group LLC 144A		7.25			12-15-2021		1,712,000		1,771,920
Springleaf Finance Corporation		6.00			6-1-2020		825,000		856,969

									8,124,494


Diversified Financial Services: 2.65%
General Electric Capital Corporation		4.65			10-17-2021		187,000		194,929
Infinity Acquisition LLC 144A		7.25			8-1-2022		960,000		950,400
ING US Incorporated		5.50			7-15-2022		750,000		803,658
LPL Holdings Incorporated 144A		5.75			9-15-2025		10,025,000		9,724,250
Vantiv LLC 144A		4.38			11-15-2025		500,000		477,500

									12,150,737


Insurance: 2.62%
American International Group Incorporated		4.88			6-1-2022		750,000		784,345
Endurance Specialty Holdings Limited		7.00			7-15-2034		575,000		691,810
Hartford Financial Services Group Incorporated		5.13			4-15-2022		650,000		688,631
HUB Holdings LLC (PIK at 8.88%) 144A¥		8.13			7-15-2019		1,075,000		1,078,225
HUB International Limited		7.00			5-1-2026		500,000		501,250
HUB International Limited 144A		7.88			10-1-2021		3,950,000		4,115,900
Liberty Mutual Group Incorporated 144A		4.95			5-1-2022		750,000		784,099
ProAssurance Corporation		5.30			11-15-2023		750,000		794,345
Prudential Financial Incorporated (3 Month LIBOR +2.38%) ±		4.50			9-15-2047		750,000		711,563

The accompanying notes are an integral part of these financial statements.


16		Wells Fargo Multi-Sector Income Fund		Portfolio of investments—April 30, 2018 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value

Insurance (continued)
USIS Merger Subordinate Incorporated 144A		6.88	%		5-1-2025	$	1,175,000	$	1,183,813
W.R. Berkley Corporation		4.63			3-15-2022		650,000		671,430

									12,005,411


Health Care: 6.92%

Biotechnology: 0.16%
Amgen Incorporated		3.63			5-15-2022		750,000		754,253


Health Care Equipment & Supplies: 1.37%
Hill-Rom Holdings Incorporated 144A		5.00			2-15-2025		400,000		397,212
Hill-Rom Holdings Incorporated 144A		5.75			9-1-2023		200,000		206,500
Hologic Incorporated 144A		4.38			10-15-2025		1,925,000		1,852,813
Hologic Incorporated 144A		4.63			2-1-2028		225,000		214,875
Kinetics Concepts Incorporated 144A		7.88			2-15-2021		1,425,000		1,476,870
Surgery Center Holdings Incorporated 144A		6.75			7-1-2025		500,000		472,500
Surgery Center Holdings Incorporated 144A		8.88			4-15-2021		1,600,000		1,644,000

									6,264,770


Health Care Providers & Services: 4.51%
Acadia Healthcare Company Incorporated		6.50			3-1-2024		190,000		196,650
CHS Incorporated		5.13			8-1-2021		1,850,000		1,702,000
Coventry Health Care Incorporated		5.45			6-15-2021		750,000		790,830
Express Scripts Holding Company		3.90			2-15-2022		665,000		667,480
HCA Incorporated		5.25			6-15-2026		325,000		326,625
HCA Incorporated		6.50			2-15-2020		1,400,000		1,463,000
HealthSouth Corporation		5.75			9-15-2025		575,000		587,938
Mednax Incorporated 144A		5.25			12-1-2023		475,000		471,438
MPH Acquisition Holdings LLC 144A		7.13			6-1-2024		2,861,000		2,912,241
MPT Operating Partnership LP		5.00			10-15-2027		1,100,000		1,042,250
MPT Operating Partnership LP		5.25			8-1-2026		1,575,000		1,531,688
MPT Operating Partnership LP		6.38			3-1-2024		110,000		115,500
NVA Holdings Company 144A		6.88			4-1-2026		200,000		201,500
Polaris Intermediate Corporation 144A		8.50			12-1-2022		475,000		482,125
Select Medical Corporation		6.38			6-1-2021		3,050,000		3,095,750
Tenet Healthcare Corporation 144A		4.63			7-15-2024		436,000		421,786
Tenet Healthcare Corporation		6.00			10-1-2020		700,000		724,969
Vizient Incorporated 144A		10.38			3-1-2024		3,550,000		3,931,625

									20,665,395


Health Care Technology: 0.49%
Change Healthcare Holdings Incorporated 144A		5.75			3-1-2025		1,950,000		1,906,125
Quintiles IMS Holdings Incorporated 144A		4.88			5-15-2023		100,000		101,250
Quintiles IMS Holdings Incorporated 144A		5.00			10-15-2026		225,000		221,906

									2,229,281


Life Sciences Tools & Services: 0.23%
Charles River Laboratories Incorporated 144A		5.50			4-1-2026		275,000		279,730
Life Technologies Corporation		6.00			3-1-2020		750,000		785,938

									1,065,668

The accompanying notes are an integral part of these financial statements.


Portfolio of investments—April 30, 2018 (unaudited)		Wells Fargo Multi-Sector Income Fund			17


Security name	Interest rate			Maturity date		Principal		Value

Pharmaceuticals: 0.16%
Watson Pharmaceuticals Incorporated		3.25	%		10-1-2022	$	750,000	$	726,351


Industrials: 3.99%

Aerospace & Defense: 0.47%
BAE Systems Holdings Incorporated 144A		3.80			10-7-2024		1,000,000		997,012
RBS Global & Rexnord LLC 144A		4.88			12-15-2025		1,200,000		1,158,000

									2,155,012


Airlines: 0.60%
Aviation Capital Group Corporation 144A		6.75			4-6-2021		1,100,000		1,199,836
BBA US Holdings Incorporated		5.38			5-1-2026		1,140,000		1,146,361
Delta Air Lines Incorporated		4.75			11-7-2021		407,587		415,290

									2,761,487


Commercial Services & Supplies: 2.64%
Advanced Disposal Services Incorporated 144A		5.63			11-15-2024		1,750,000		1,763,125
Aramark Services Incorporated 144A		5.00			2-1-2028		225,000		218,905
Aramark Services Incorporated		5.13			1-15-2024		545,000		554,538
Covanta Holding Corporation		5.88			3-1-2024		1,485,000		1,462,725
Covanta Holding Corporation		5.88			7-1-2025		900,000		875,250
Covanta Holding Corporation		6.38			10-1-2022		1,750,000		1,787,188
KAR Auction Services Incorporated 144A		5.13			6-1-2025		4,950,000		4,801,500
Waste Pro USA Incorporated 144A		5.50			2-15-2026		375,000		371,138
Wrangler Buyer Corporation 144A		6.00			10-1-2025		250,000		246,250

									12,080,619


Professional Services: 0.12%
Verisk Analytics Incorporated		5.80			5-1-2021		530,000		563,787


Road & Rail: 0.14%
TTX Company 144A		2.60			6-15-2020		650,000		641,620


Trading Companies & Distributors: 0.02%
International Lease Finance Corporation 144A		7.13			9-1-2018		75,000		76,006


Information Technology: 6.11%

Communications Equipment: 0.35%
CommScope Technologies Finance LLC 144A		6.00			6-15-2025		825,000		849,750
Motorola Solutions Incorporated		3.75			5-15-2022		750,000		745,720

									1,595,470


Electronic Equipment, Instruments & Components: 0.30%
Keysight Technologies		4.60			4-6-2027		600,000		605,107
L-3 Communications Corporation		4.95			2-15-2021		750,000		777,686

									1,382,793

The accompanying notes are an integral part of these financial statements.


18		Wells Fargo Multi-Sector Income Fund		Portfolio of investments—April 30, 2018 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value

Internet Software & Services: 0.82%
Infor Incorporated		6.50	%		5-15-2022	$	550,000	$	558,250
Infor Software Parent LLC (PIK at 7.88%) 144A¥		7.13			5-1-2021		550,000		554,125
Zayo Group LLC 144A		5.75			1-15-2027		1,150,000		1,141,375
Zayo Group LLC		6.00			4-1-2023		75,000		77,153
Zayo Group LLC		6.38			5-15-2025		1,400,000		1,449,280

									3,780,183


IT Services: 1.89%
Cardtronics Incorporated		5.13			8-1-2022		460,000		446,200
Cardtronics Incorporated 144A		5.50			5-1-2025		1,390,000		1,285,750
First Data Corporation 144A		5.00			1-15-2024		2,725,000		2,745,438
First Data Corporation 144A		5.38			8-15-2023		332,000		338,574
First Data Corporation 144A		5.75			1-15-2024		370,000		375,132
First Data Corporation 144A		7.00			12-1-2023		975,000		1,020,221
Gartner Incorporated 144A		5.13			4-1-2025		2,425,000		2,430,335

									8,641,650


Semiconductors & Semiconductor Equipment: 0.22%
Micron Technology Incorporated 144A		5.25			1-15-2024		700,000		728,350
Micron Technology Incorporated		5.50			2-1-2025		256,000		266,240

									994,590


Software: 0.09%
CDK Global Incorporated		5.00			10-15-2024		225,000		228,375
Symantec Corporation 144A		5.00			4-15-2025		200,000		200,814

									429,189


Technology Hardware, Storage & Peripherals: 2.44%
Dell International LLC 144A		5.88			6-15-2021		1,000,000		1,028,693
Dell International LLC 144A		7.13			6-15-2024		4,525,000		4,819,125
Hewlett-Packard Company		4.05			9-15-2022		750,000		763,108
NCR Corporation		5.88			12-15-2021		5,000		5,095
NCR Corporation		6.38			12-15-2023		4,400,000		4,554,000

									11,170,021


Materials: 1.83%

Chemicals: 0.25%
Dow Chemical Company		4.13			11-15-2021		750,000		766,350
Valvoline Incorporated		5.50			7-15-2024		375,000		384,375

									1,150,725


Containers & Packaging: 1.58%
Ball Corporation		4.88			3-15-2026		575,000		573,563
Ball Corporation		5.00			3-15-2022		25,000		25,906
Ball Corporation		5.25			7-1-2025		190,000		195,700
Berry Plastics Corporation		5.13			7-15-2023		350,000		352,188
Berry Plastics Corporation		6.00			10-15-2022		215,000		223,869
Crown Americas LLC 144A		4.75			2-1-2026		850,000		820,250

The accompanying notes are an integral part of these financial statements.


Portfolio of investments—April 30, 2018 (unaudited)		Wells Fargo Multi-Sector Income Fund			19


Security name	Interest rate			Maturity date		Principal		Value

Containers & Packaging (continued)
Crown Cork & Seal Company Incorporated		7.38	%		12-15-2026	$	35,000	$	38,938
Flex Acquisition Company Incorporated		6.88			1-15-2025		800,000		804,000
Owens-Brockway Glass Container Incorporated 144A		5.88			8-15-2023		325,000		332,313
Owens-Illinois Incorporated 144A		6.38			8-15-2025		3,100,000		3,247,250
Reynolds Group Issuer Incorporated 144A		5.13			7-15-2023		200,000		200,876
Sealed Air Corporation 144A		5.25			4-1-2023		325,000		333,125
Silgan Holdings Incorporated		5.50			2-1-2022		75,000		76,125

									7,224,103


Metals & Mining: 0.00%
Indalex Holdings Corporation (a)†		11.50			2-1-2020		3,170,000		0


Real Estate: 3.91%

Equity REITs: 3.91%
Alexandria Real Estate Company		4.60			4-1-2022		650,000		671,765
American Tower Corporation		5.90			11-1-2021		650,000		700,281
CoreCivic Incorporated		5.00			10-15-2022		575,000		580,750
DDR Corporation		4.70			6-1-2027		600,000		600,059
Equinix Incorporated		5.75			1-1-2025		1,275,000		1,322,813
Equinix Incorporated		5.88			1-15-2026		425,000		439,875
ESH Hospitality Incorporated 144A		5.25			5-1-2025		1,700,000		1,661,750
Essex Portfolio LP		3.63			8-15-2022		750,000		748,492
Iron Mountain Incorporated 144A		5.25			3-15-2028		675,000		635,344
Iron Mountain Incorporated 144A		5.38			6-1-2026		150,000		144,750
Iron Mountain Incorporated		6.00			8-15-2023		2,500,000		2,575,000
MGM Growth Properties LLC		4.50			1-15-2028		400,000		368,000
Omega HealthCare Investors Incorporated		4.50			4-1-2027		600,000		568,807
Sabra Health Care REIT Incorporated		5.38			6-1-2023		900,000		906,750
Sabra Health Care REIT Incorporated		5.50			2-1-2021		1,225,000		1,252,563
The Geo Group Incorporated		5.13			4-1-2023		800,000		790,000
The Geo Group Incorporated		5.88			1-15-2022		1,565,000		1,606,081
The Geo Group Incorporated		5.88			10-15-2024		840,000		835,800
The Geo Group Incorporated		6.00			4-15-2026		184,000		181,295
Ventas Realty LP		4.25			3-1-2022		650,000		662,931
Welltower Incorporated		5.25			1-15-2022		650,000		680,774

									17,933,880


Telecommunication Services: 2.59%

Diversified Telecommunication Services: 1.23%
AT&T Incorporated		3.80			3-15-2022		750,000		757,045
GCI Incorporated		6.75			6-1-2021		1,000,000		1,010,000
Level 3 Financing Incorporated		5.13			5-1-2023		975,000		965,250
Level 3 Financing Incorporated		5.25			3-15-2026		650,000		628,680
Level 3 Financing Incorporated		5.38			8-15-2022		300,000		301,500
Level 3 Financing Incorporated		5.38			1-15-2024		700,000		693,000
Level 3 Financing Incorporated		5.38			5-1-2025		625,000		615,438
Level 3 Financing Incorporated		5.63			2-1-2023		500,000		506,250
Level 3 Financing Incorporated		6.13			1-15-2021		175,000		177,188

									5,654,351

The accompanying notes are an integral part of these financial statements.


20		Wells Fargo Multi-Sector Income Fund		Portfolio of investments—April 30, 2018 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value

Wireless Telecommunication Services: 1.36%
SBA Communications Corporation 144A		4.00	%		10-1-2022	$	225,000	$	214,313
SBA Communications Corporation		4.88			7-15-2022		640,000		641,600
Sprint Capital Corporation		6.88			11-15-2028		1,025,000		1,045,500
Sprint Capital Corporation		7.63			2-15-2025		1,050,000		1,105,125
Sprint Communications Incorporated		7.00			8-15-2020		225,000		237,938
T-Mobile USA Incorporated		4.00			4-15-2022		650,000		649,594
T-Mobile USA Incorporated		4.50			2-1-2026		125,000		120,313
T-Mobile USA Incorporated		4.75			2-1-2028		125,000		120,288
T-Mobile USA Incorporated		5.13			4-15-2025		425,000		428,188
T-Mobile USA Incorporated		5.38			4-15-2027		225,000		227,531
T-Mobile USA Incorporated		6.00			3-1-2023		300,000		310,875
T-Mobile USA Incorporated		6.38			3-1-2025		975,000		1,023,750
T-Mobile USA Incorporated		6.50			1-15-2024		80,000		83,800

									6,208,815


Utilities: 4.47%

Electric Utilities: 0.21%
Great Plains Energy Incorporated		4.85			6-1-2021		750,000		773,356
NextEra Energy Incorporated 144A		4.25			9-15-2024		175,000		168,875

									942,231


Gas Utilities: 0.21%
AmeriGas Partners LP		5.75			5-20-2027		1,000,000		962,500


Independent Power & Renewable Electricity Producers: 3.77%
NSG Holdings LLC 144A		7.75			12-15-2025		4,817,618		5,275,292
Pattern Energy Group Incorporated 144A		5.88			2-1-2024		5,225,000		5,329,500
TerraForm Power Operating LLC 144A		4.25			1-31-2023		3,025,000		2,888,875
TerraForm Power Operating LLC 144A		5.00			1-31-2028		675,000		631,969
TerraForm Global Operating LLC 144A		6.13			3-1-2026		1,175,000		1,189,688
TerraForm Power Operating LLC 144A		6.63			6-15-2025		1,850,000		1,974,875

									17,290,199


Multi-Utilities: 0.28%
Ameren Illinois Company		9.75			11-15-2018		500,000		518,442
CMS Energy Corporation		5.05			3-15-2022		750,000		788,368

									1,306,810


Total Corporate Bonds and Notes (Cost $331,169,465)									333,600,811


Foreign Corporate Bonds and Notes @: 4.55%

Consumer Staples: 0.19%

Food Products: 0.19%
BRF SA 144A (BRL)		7.75			5-22-2018		3,100,000		872,074


Energy: 0.30%

Oil, Gas & Consumable Fuels: 0.30%
Petroleos Mexicanos 144A (MXN)		7.19			9-12-2024		28,200,000		1,356,873

The accompanying notes are an integral part of these financial statements.


Portfolio of investments—April 30, 2018 (unaudited)		Wells Fargo Multi-Sector Income Fund			21


Security name	Interest rate			Maturity date		Principal		Value

Financials: 3.75%

Banks: 3.69%
European Investment Bank (BRL)		7.25	%		6-28-2021		9,000,000	$	2,602,632
European Investment Bank (ZAR)		8.00			5-5-2027		21,000,000		1,656,245
European Investment Bank (ZAR)		8.38			7-29-2022		40,000,000		3,274,448
European Investment Bank (ZAR)		8.75			8-18-2025		20,000,000		1,655,499
European Investment Bank (ZAR)		9.00			3-31-2021		17,400,000		1,447,418
International Bank for Reconstruction & Development (ZAR)		7.00			6-7-2023		15,000,000		1,163,177
KfW (AUD)		5.00			3-19-2024		1,300,000		1,088,807
Landwirtschaftliche Rentenbank (ZAR)		6.00			3-18-2019		35,000,000		2,774,673
Landwirtschaftliche Rentenbank (ZAR)		8.25			5-23-2022		15,000,000		1,226,594

									16,889,493


Diversified Financial Services: 0.06%
AA Bond Company Limited (GBP)		4.25			7-31-2043		200,000		285,074


Telecommunication Services: 0.31%

Wireless Telecommunication Services: 0.31%
America Movil SAB de CV (MXN)		7.13			12-9-2024		28,850,000		1,435,508


Total Foreign Corporate Bonds and Notes (Cost $22,396,348)									20,839,022


Foreign Government Bonds @: 22.47%
Colombia (COP)		7.00			9-11-2019		18,500,000,000		6,800,818
Colombia (COP)		7.00			5-4-2022		18,650,000,000		7,004,014
Colombia (COP)		7.50			8-26-2026		22,725,000,000		8,731,394
Colombia (COP)		7.75			4-14-2021		5,250,000,000		1,960,496
India (INR)		7.80			4-11-2021		435,000,000		6,552,375
Indonesia (IDR)		7.88			4-15-2019		133,640,000,000		9,850,697
Indonesia (IDR)		8.38			9-15-2026		110,000,000,000		8,550,943
Malaysia (MYR)		4.18			7-15-2024		19,850,000		5,081,802
Malaysia (MYR)		4.23			6-30-2031		51,300,000		12,679,684
Mexico (MXN)		5.75			3-5-2026		72,000,000		3,465,284
Mexico (MXN)		8.00			11-7-2047		217,500,000		12,065,042
Mexico (MXN)		10.00			12-5-2024		14,100,000		857,767
Mexico (MXN)		10.00			12-5-2024		62,120,000		3,779,040
New Zealand (NZD)		4.50			4-15-2027		8,250,000		6,554,360
Queensland Treasury (AUD)		5.75			7-22-2024		4,100,000		3,592,679
Republic of Peru (PEN)		6.35			8-12-2028		16,400,000		5,471,364

Total Foreign Government Bonds (Cost $112,137,216)									102,997,759


Loans: 19.71%

Consumer Discretionary: 5.32%

Auto Components: 0.71%
Allison Transmission Incorporated (1 Month LIBOR +1.75%) ±		3.65			9-23-2022	$	1,876,177		1,889,723
Belron Finance US LLC (3 Month LIBOR +2.50%) ±		4.29			11-7-2024		299,250		300,498
Federal-Mogul Corporation (1 Month LIBOR +3.75%) ±		5.65			4-15-2021		1,036,583		1,046,026

									3,236,247

The accompanying notes are an integral part of these financial statements.


22		Wells Fargo Multi-Sector Income Fund		Portfolio of investments—April 30, 2018 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value

Distributors: 0.54%
Spin Holdco Incorporated (3 Month LIBOR +3.25%) ±		5.08	%		11-14-2022	$	2,453,599	$	2,469,965


Food & Staples Retailing: 0.09%
TKC Holdings Incorporated (1 Month LIBOR +4.25%) ±		6.16			2-1-2023		396,000		399,069


Hotels, Restaurants & Leisure: 2.72%
CCM Merger Incorporated (1 Month LIBOR +2.75%) ±		4.65			8-8-2021		656,828		660,605
Four Seasons Holdings Incorporated (1 Month LIBOR +2.00%) ±		3.90			11-30-2023		899,277		904,897
Greektown Holdings LLC (1 Month LIBOR +3.00%) ±		4.90			3-21-2024		4,974,937		4,981,156
La Quinta Intermediate Holdings LLC (3 Month LIBOR +3.00%) ±		5.35			4-14-2021		733,040		733,502
Montreign Operating Company LLC (1 Month LIBOR +8.25%) ‡ ±		10.15			12-7-2022		5,375,000		5,213,750

									12,493,910


Household Products: 0.18%
Anchor Glass Container Corporation (1 Month LIBOR +7.75%) ±		9.64			12-7-2024		650,000		609,375
Lifetime Brands Incorporated (1 Month LIBOR +3.50%) ‡ ±		5.39			2-28-2025		200,000		200,500

									809,875


Internet & Direct Marketing Retail: 0.07%
Shutterfly Incorporated (1 Month LIBOR +2.75%) ±		4.66			8-17-2024		325,000		327,844


Media: 1.01%
A-L Parent LLC (1 Month LIBOR +3.25%) ‡ ±		5.16			12-1-2023		3,456,250		3,490,813
Altice US Finance I Corporation (1 Month LIBOR +2.25%) ±		4.15			7-28-2025		712,403		711,292
CSC Holdings LLC (1 Month LIBOR +2.50%) ±		4.40			1-25-2026		150,000		150,000
Mission Broadcasting Incorporated (1 Month LIBOR +2.50%) ±		4.39			1-17-2024		31,646		31,772
Nexstar Broadcasting Group Incorporated (1 Month LIBOR +2.50%) ±		4.39			1-17-2024		246,431		247,417

									4,631,294


Consumer Staples: 0.17%

Food Products: 0.17%
B&G Foods Incorporated (1 Month LIBOR +2.00%) ±		3.90			11-2-2022		492,417		494,800
CHG PPC Parent LLC (1 Month LIBOR +2.75%) ±		4.65			3-31-2025		125,000		125,625
Prestige Brands Incorporated (1 Month LIBOR +2.00%) ±		3.90			1-26-2024		161,893		162,753

									783,178


Energy: 0.97%

Energy Equipment & Services: 0.39%
ExGen Renewables IV LLC (3 Month LIBOR +3.00%) ‡ ±		4.99			11-28-2024		648,375		652,836
Hummel Station (1 Month LIBOR +6.00%) ‡ ±		7.90			10-27-2022		1,199,434		1,148,458

									1,801,294


Oil, Gas & Consumable Fuels: 0.58%
Chesapeake Energy Corporation (3 Month LIBOR +7.50%) ±		9.44			8-23-2021		450,000		475,875
Lucid Energy Group II Borrower LLC (1 Month LIBOR +3.00%) ‡ ±		4.90			2-17-2025		225,000		224,719
Traverse Midstream Partners LLC (3 Month LIBOR +4.00%) ±		5.85			9-27-2024		575,000		577,875
Ultra Resources Incorporated (1 Month LIBOR +3.00%) ±		4.90			4-12-2024		1,475,000		1,379,125

									2,657,594

The accompanying notes are an integral part of these financial statements.


Portfolio of investments—April 30, 2018 (unaudited)		Wells Fargo Multi-Sector Income Fund			23


Security name	Interest rate			Maturity date		Principal		Value

Financials: 2.70%

Capital Markets: 0.44%
EIG Management Company LLC (3 Month LIBOR +3.75%) ±		5.65	%		1-31-2025	$	125,000	$	125,729
Neptune Finco Corporation (1 Month LIBOR +2.25%) ±		4.15			7-17-2025		778,148		775,425
Russell Investments US Institutional Holdco Incorporated (3 Month LIBOR +3.25%) ±		5.55			6-1-2023		419,661		421,759
Victory Capital Holdings Incorporated (3 Month LIBOR +2.75%) ‡< ±		5.05			2-7-2025		696,111		701,332

									2,024,245


Consumer Finance: 0.03%
KAR Auction Services Incorporated (3 Month LIBOR +2.50%) ±		4.81			3-9-2023		154,312		154,890


Diversified Financial Services: 1.15%
Ipreo Holdings LLC (3 Month LIBOR +3.00%) ±		5.30			8-6-2021		139,955		140,086
LPL Holdings Incorporated (3 Month LIBOR +2.25%) ±		4.56			9-23-2024		1,071,715		1,078,413
Nielsen Finance LLC (1 Month LIBOR +2.00%) ±		3.90			10-4-2023		467,899		470,018
Resolute Investment Managers Incorporated (3 Month LIBOR +3.25%) ‡ ±		5.55			4-30-2022		2,446,373		2,458,605
Resolute Investment Managers Incorporated (3 Month LIBOR +7.50%) ‡ ±		9.86			4-30-2023		1,090,000		1,103,625

									5,250,747


Insurance: 1.08%
Alliant Holdings I LLC (1 Month LIBOR +3.25%) ±		5.15			8-12-2022		1,382,265		1,389,674
AmWINS Group Incorporated (1 Month LIBOR +2.75%) ±		4.65			1-25-2024		892,919		898,169
HUB International Limited (2 Month LIBOR +3.00%) <±		4.84			4-25-2025		1,250,000		1,257,288
Solera Holdings Incorporated (1 Month LIBOR +2.75%) ±		4.65			3-3-2023		1,085,759		1,089,287
USI Incorporated (3 Month LIBOR +3.00%) < ±		5.30			5-16-2024		298,875		299,870

									4,934,288


Health Care: 2.11%

Health Care Equipment & Supplies: 0.41%
DJO Finance LLC (1 Month LIBOR +3.25%) ±		5.36			6-8-2020		554,325		556,576
Kinetic Concepts Incorporated (3 Month LIBOR +3.25%) ±		5.55			2-2-2024		1,326,217		1,334,174

									1,890,750


Health Care Providers & Services: 1.01%
CHS Incorporated (3 Month LIBOR +3.25%) ±		5.23			1-27-2021		571,102		553,495
MPH Acquisition Holdings LLC (3 Month LIBOR +2.75%) ±		5.05			6-7-2023		462,824		465,074
Press Ganey Holdings Incorporated (1 Month LIBOR +2.75%) < ±		4.65			10-21-2023		2,188,515		2,202,193
Press Ganey Holdings Incorporated (1 Month LIBOR +6.50%) ‡ ±		8.40			10-21-2024		516,856		522,025
Surgery Center Holdings Incorporated (1 Month LIBOR +3.25%) ±		5.16			9-2-2024		248,438		248,826
TeamHealth Incorporated (1 Month LIBOR +2.75%) ‡ ±		4.65			2-6-2024		444,008		429,577
Vizient Incorporated (1 Month LIBOR +2.75%) ±		4.65			2-13-2023		192,929		193,953

									4,615,143


Health Care Technology: 0.14%
Change Healthcare Holdings Incorporated (1 Month LIBOR +2.75%) ±		4.65			3-1-2024		662,346		664,830


Life Sciences Tools & Services: 0.10%
INC Research LLC (1 Month LIBOR +2.25%) ±		4.15			8-1-2024		452,734		454,188

The accompanying notes are an integral part of these financial statements.


24		Wells Fargo Multi-Sector Income Fund		Portfolio of investments—April 30, 2018 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value

Pharmaceuticals: 0.45%
Endo Finance LLC (1 Month LIBOR +4.25%) ±		6.19	%		4-29-2024	$	294,462	$	292,622
Valeant Pharmaceuticals International Incorporated (1 Month LIBOR +3.50%) ±		5.39			4-1-2022		1,741,953		1,760,470

									2,053,092


Industrials: 3.12%

Aerospace & Defense: 0.54%
TransDigm Incorporated (1 Month LIBOR +2.50%) ±		4.71			8-22-2024		2,455,053		2,466,297


Commercial Services & Supplies: 1.60%
Advanced Disposal Services Incorporated (1 Month LIBOR +2.25%) ±		4.00			11-10-2023		1,208,630		1,215,677
Advantage Sales & Marketing LLC (1 Month LIBOR +3.25%) ±		5.15			7-25-2021		224,435		214,510
Advantage Sales & Marketing LLC (1 Month LIBOR +6.50%) ±		8.40			7-25-2022		1,250,000		1,151,388
Casella Waste Systems Incorporated (1 Month LIBOR +2.50%) ‡ ±		4.40			10-17-2023		1,950,312		1,963,731
GFL Environmental Incorporated (3 Month LIBOR +2.75%) ±		5.05			9-29-2023		172,375		172,375
Sedgwick Claims Management Services Incorporated (1 Month LIBOR +2.75%) ±		4.65			3-1-2021		518,829		518,938
WASH Multifamily Laundry Systems LLC 1st Lien Term (1 Month LIBOR +3.25%) ‡ ±		5.15			5-14-2022		169,641		169,641
WASH Multifamily Laundry Systems LLC 2015 Term B (1 Month LIBOR +3.25%) ‡±		5.15			5-14-2022		968,662		968,662
WASH Multifamily Laundry Systems LLC 2nd Lien Term (1 Month LIBOR +7.00%) ‡ ±		8.90			5-12-2023		17,885		17,706
WASH Multifamily Laundry Systems LLC 2nd Lien Term (1 Month LIBOR +7.00%) ‡ ±		8.90			5-14-2023		102,115		101,094
Wrangler Buyer Corporation (1 Month LIBOR +3.00%) ±		4.90			9-27-2024		822,938		826,279

									7,320,001


Communications Equipment: 0.24%
Charter Communications Operating LLC (1 Month LIBOR +2.00%) ±		3.91			4-30-2025		1,097,250		1,101,562


Electrical Equipment: 0.10%
Generac Power Systems Incorporated (3 Month LIBOR +2.00%) ±		4.31			5-31-2023		450,000		451,688


Machinery: 0.64%
Columbus Mckinnon Corp Term Loan B (3 Month LIBOR +2.50%) ‡ ±		4.80			1-31-2024		999,664		1,007,161
Gates Global LLC (3 Month LIBOR +2.75%) ±		5.05			4-1-2024		606,193		609,400
Onex Wizard Acquisition Company (1 Month LIBOR +2.75%) ±		4.65			3-13-2022		574,457		577,008
RBS Global Incorporated (1 Month LIBOR +2.25%) ±		4.15			8-21-2024		750,000		755,063

									2,948,632


Information Technology: 2.29%

Electronic Equipment, Instruments & Components: 0.50%
Dell Incorporated (1 Month LIBOR +2.00%) ±		3.91			9-7-2023		2,260,849		2,267,202


Internet Software & Services: 1.60%
Ancestry.com Incorporated (1 Month LIBOR +3.25%) ±		5.15			10-19-2023		5,922,242		5,955,584
Applied Systems Incorporated (3 Month LIBOR +3.25%) ±		5.55			9-19-2024		323,375		326,104
Infor US Incorporated (1 Month LIBOR +2.75%) ±		4.65			2-1-2022		785,109		788,218
Sophia Holding Finance LP (3 Month LIBOR +3.25%) ±		5.55			9-30-2022		144,292		144,942
Zayo Group LLC (1 Month LIBOR +2.25%) ±		4.15			1-19-2024		132,244		133,112

									7,347,960


Semiconductors & Semiconductor Equipment: 0.08%
Micron Technology Incorporated (1 Month LIBOR +1.75%) ±		3.66			4-26-2022		343,875		346,310


Software: 0.11%
SS&C Technologies Incorporated (1 Month LIBOR +2.50%) ±		4.40			4-16-2025		137,325		138,183
SS&C Technologies Incorporated (1 Month LIBOR +2.50%) ±		4.40			4-16-2025		371,158		373,478

									511,661

The accompanying notes are an integral part of these financial statements.


Portfolio of investments—April 30, 2018 (unaudited)		Wells Fargo Multi-Sector Income Fund			25


Security name	Interest rate			Maturity date		Principal		Value

Materials: 0.71%

Containers & Packaging: 0.71%
Berry Plastics Corporation (1 Month LIBOR +2.00%) ±		3.90	%		10-1-2022	$	412,327	$	414,817
Reynolds Group Holdings Incorporated (1 Month LIBOR +2.75%) ±		4.65			2-5-2023		2,462,578		2,477,969
RING Container Technologies (1 Month LIBOR +2.75%) ±		4.65			10-31-2024		349,125		349,781

									3,242,567


Real Estate: 1.24%

Equity REITs: 0.77%
ESH Hospitality Incorporated (1 Month LIBOR +2.25%) ±		4.15			8-30-2023		1,220,747		1,226,009
MGM Growth Properties LLC (1 Month LIBOR +2.00%) ±		3.90			4-25-2023		318,374		320,017
The Geo Group Incorporated (3 Month LIBOR + 2.25%) < ±		3.75			3-22-2024		420,151		420,676
The Geo Group Incorporated (1 Month LIBOR +2.00%) ±		3.75			3-22-2024		1,541,041		1,542,967

									3,509,669


Real Estate Management & Development: 0.47%
Capital Automotive LP (1 Month LIBOR +2.50%) ±		4.41			3-24-2024		1,357,088		1,361,756
Capital Automotive LP (1 Month LIBOR +6.00%) ‡ ±		7.91			3-24-2025		808,086		816,167

									2,177,923


Telecommunication Services: 0.74%

Diversified Telecommunication Services: 0.64%
Level 3 Financing Incorporated (1 Month LIBOR +2.25%) ±		4.15			2-22-2024		555,420		557,736
Telesat Canada (3 Month LIBOR +2.50%) ±		4.41			11-17-2023		2,391,502		2,399,729

									2,957,465


Wireless Telecommunication Services: 0.10%
Sprint Communications Incorporated (1 Month LIBOR +2.50%) ±		4.44			2-2-2024		445,500		446,614


Utilities: 0.34%

Independent Power & Renewable Electricity Producers: 0.34%
TerraForm Power Operating LLC (1 Month LIBOR +2.75%) ±		4.65			11-8-2022		673,313		675,837
Vistra Energy Corporation (1 Month LIBOR +2.25%) ±		4.15			12-14-2023		891,678		897,251

									1,573,088


Total Loans (Cost $86,903,571)									90,321,082


Non-Agency Mortgage-Backed Securities: 4.23%
Argent Securities Incorporated Series 2004-W5 Class AV3B (1 Month LIBOR +0.90%) ±		2.80			4-25-2034		50,420		50,393
Banc of America Commercial Mortgage Securities Incorporated Series 2006-03 Class AM ±±		5.96			7-10-2044		679,874		404,525
Banc of America Commercial Mortgage Securities Incorporated Series 2007-1 Class AMFX ±±		5.48			1-15-2049		142,250		144,079
Banc of America Funding Corporation Series 2005 Class 5-1A1		5.50			9-25-2035		219,686		229,765
Banc of America Mortgage Securities Series 2003 Class 1A1 ±±		3.76			4-25-2033		259,673		245,471
Centex Home Equity Series 2002-A Class AF6		5.54			1-25-2032		27,772		28,151
Centex Home Equity Series 2004-B Class AF6		4.69			3-25-2034		111,018		113,552
CIFC Funding Limited Series 2012-2RA Class A1 (3 Month LIBOR +0.80%) 144A ±		3.16			1-20-2028		485,000		484,031

The accompanying notes are an integral part of these financial statements.


26		Wells Fargo Multi-Sector Income Fund		Portfolio of investments—April 30, 2018 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value

Non-Agency Mortgage-Backed Securities (continued)
Citigroup Commercial Mortgage Trust Series 2012-GC8 Class C 144A ±±		5.04	%		9-10-2045	$	1,000,000	$	1,019,799
Citigroup Commercial Mortgage Trust Series 2015 Class A (1 Month LIBOR +1.15%) 144A ±		3.05			9-15-2027		595,000		595,180
Citigroup Commercial Mortgage Trust Series 2017-1500 Class A (1 Month LIBOR +0.85%) 144A ±		2.75			7-15-2032		750,000		751,155
Citigroup Commercial Mortgage Trust Series 2017-MDRB Class A (1 Month LIBOR +1.10%) 144A ±		3.00			7-15-2030		1,000,000		997,247
Citigroup Mortgage Loan Trust Incorporated Series 2003-HE3 Class A3 (1 Month LIBOR +0.76%) ±		2.66			12-25-2033		21,518		21,424
Commercial Mortgage Trust Series 2012-CR2 Class C ±±		4.99			8-15-2045		1,000,000		1,010,794
Commercial Mortgage Trust Series 2012-LC4 Class A4		3.29			12-10-2044		205,000		204,811
Commercial Mortgage Trust Series 2012-LC4 Class AM		4.06			12-10-2044		500,000		507,071
Commercial Mortgage Trust Series 2012-LC4 Class C ±±		5.78			12-10-2044		500,000		499,095
Countrywide Home Loans Series 2003-48 Class 2A2 ±±		3.68			10-25-2033		66,636		65,911
Credit Suisse First Boston Mortgage Securities Series 2002-AR25 Class 1A1 ±±		2.99			9-25-2032		433,303		419,672
Credit Suisse First Boston Mortgage Securities Series 2003-AR15 Class 3A1 ±±		3.45			6-25-2033		81,705		81,981
Credit Suisse First Boston Mortgage Securities Series 2003-AR9 Class 2A2 ±±		3.75			3-25-2033		23,370		23,264
Credit-Based Asset Servicing & Securitization LLC Series 2005-CB2 Class M1 (1 Month LIBOR +0.66%) ±		2.56			4-25-2036		9,565		9,576
Crown Point Limited Series 2015-3A Class A1AR (3 Month LIBOR +0.91%) 144A ±		3.26			12-31-2027		500,000		500,088
Global Mortgage Securitization Limited Series 2004-A Class A2 (1 Month LIBOR +0.32%) 144A ±		2.22			11-25-2032		92,624		87,907
GS Mortgage Securities Trust Series 2010-C1 Class X 144A±±(c)		1.51			8-10-2043		5,088,239		122,713
GS Mortgage Securities Trust Series 2012-GCJ7 Class XA ±±(c)		2.41			5-10-2045		3,363,754		185,170
GS Mortgage Securities Trust Series 2014 Class C 144A		3.79			1-10-2031		1,000,000		999,985
GSAA Home Equity Trust Series 2004-5 Class AF5		4.51			6-25-2034		1,842		1,843
GSCCRE Commercial Mortgage Trust Series 2015-HULA Class C (1 Month LIBOR +2.75%) 144A ±		4.65			8-15-2032		1,000,000		1,003,772
GSMPS Mortgage Loan Trust Series 2005-AHL Class M1 (1 Month LIBOR +0.65%) ±		2.54			4-25-2035		3,334		3,338
GSMPS Mortgage Loan Trust Series 2006-1 Class A1 (1 Month LIBOR +0.30%) 144A ±		2.20			3-25-2035		67,818		67,325
JPMorgan Chase Commercial Mortgage Securities Corporation Series 2013-C17 Class B ±±		5.04			1-15-2047		50,000		52,128
JPMorgan Chase Commercial Mortgage Securities Trust Series 2007-CB18 Class AM ±±		5.47			6-12-2047		252,490		252,220
JPMorgan Chase Commercial Mortgage Securities Trust Series 2007-CB18 Class AMFL (1 Month LIBOR +0.17%) ±		1.90			6-12-2047		216,420		212,854
JPMorgan Chase Commercial Mortgage Securities Trust Series 2007-LDPX Class AM ±±		5.46			1-15-2049		110,450		110,744
JPMorgan Chase Commercial Mortgage Securities Trust Series 2014-PHH Class A (1 Month LIBOR +1.45%) 144A ±		3.35			8-15-2027		700,000		700,000
JPMorgan Mortgage Trust Series 2004-A3 Class 2A1 ±±		3.63			7-25-2034		49,207		49,856
JPMorgan Mortgage Trust Series 2004-A3 Class 3A3 ±±		3.51			7-25-2034		52,809		52,155
JPMorgan Mortgage Trust Series 2005-A3 Class 11A2 ±±		3.73			6-25-2035		174,273		177,430
JPMorgan Mortgage Trust Series 2009-7 Class 2A1 144A±±		6.00			2-27-2037		5,430		5,437
MASTR Adjustable Rate Mortgage Trust Series 2003-6 Class 3A1 ±±		3.53			12-25-2033		309,726		310,413
MASTR Adjustable Rate Mortgage Trust Series 2003-6 Class 4A2 ±±		3.69			1-25-2034		8,312		8,148
MASTR Adjustable Rate Mortgage Trust Series 2004-13 Class 3A7 ±±		3.47			11-21-2034		14,615		14,995
MASTR Alternative Loans Trust Series 2005-1 Class 5A1		5.50			1-25-2020		10,855		11,034
MASTR Specialized Loan Trust Series 2005-3 Class A1 (1 Month LIBOR +0.36%) 144A ±		2.26			11-25-2035		203,163		202,586
Merrill Lynch Mortgage Trust Series 2005-A8 Class A1B3		5.25			8-25-2036		12,869		12,929
Mid-State Trust Series 11 Class A1		4.86			7-15-2038		190,141		196,755
MLCC Mortgage Investors Incorporated Series 2003-G Class A2 (6 Month LIBOR +0.68%) ±		2.33			1-25-2029		73,069		72,993
Morgan Stanley Bank of America Merrill Lynch Trust Series 2012-C5 Class XA 144A±±(c)		1.63			8-15-2045		4,161,124		203,226

The accompanying notes are an integral part of these financial statements.


Portfolio of investments—April 30, 2018 (unaudited)		Wells Fargo Multi-Sector Income Fund			27


Security name	Interest rate			Maturity date		Principal		Value

Non-Agency Mortgage-Backed Securities (continued)
Morgan Stanley Bank of America Merrill Lynch Trust Series 2013-C11 Class A4 ±±		4.31	%		8-15-2046	$	569,000	$	587,965
Morgan Stanley Capital I Trust Series 2004-NC1 Class M1 (1 Month LIBOR +1.05%) ±		2.95			12-27-2033		400,943		402,047
Morgan Stanley Capital I Trust Series 2012-C4 Class C 144A±±		5.60			3-15-2045		900,000		916,562
Morgan Stanley Mortgage Loan Trust Series 2004-4 Class 2A ±±		6.39			9-25-2034		41,409		45,167
New Century Home Equity Loan Trust Series 2004-3 Class M1 (1 Month LIBOR +0.93%) ±		2.83			11-25-2034		1,165,049		1,173,448
Octagon Investment Partners Series 2015-1A Class A1R (3 Month LIBOR +0.90%) 144A±		2.79			5-21-2027		700,000		700,010
Provident Funding Mortgage Loan Series 2005-1 Class 2A1 ±±		3.64			5-25-2035		19,064		18,675
Rait Trust Series 2017-FL8 Class A (1 Month LIBOR +0.85%) 144A ±		2.75			12-15-2037		305,036		305,036
RBSSP Resecuritization Trust Series 2010-3 Class 4A1 144A±±		4.16			12-26-2035		1,530		1,529
Renaissance Home Equity Loan Trust Series 2004-4 Class AF4		4.88			2-25-2035		70,421		70,485
Sequoia Mortgage Trust Series 2003-1 Class 1A (1 Month LIBOR +0.76%) ±		2.58			4-20-2033		12,222		12,006
SoFi Professional Loan Program LLC Series 2017-A Class A2B 144A		2.40			3-26-2040		750,000		722,975
Stonemont Portfolio Trust Series 2017 Class A (1 Month LIBOR +0.85%) 144A ±		2.75			8-20-2030		465,000		465,727
Structured Adjustable Rate Mortgage Loan Trust Series 2004-2 Class 2A ±±		3.70			3-25-2034		46,272		45,947
Terwin Mortgage Trust Series 2003-6HE Class A3 (1 Month LIBOR +1.14%) ±		3.04			11-25-2033		167,403		165,875
Vendee Mortgage Trust Series 2003-2 Class IO ±±(c)		0.71			5-15-2033		3,842,370		118,381
Washington Mutual Mortgage Trust Series 2004-RA4 Class 3A		7.50			7-25-2034		113,027		121,594

Total Non-Agency Mortgage-Backed Securities (Cost $19,562,281)									19,398,420


				Expiration date		Shares
Rights: 0.05%

Utilities: 0.05%

Independent Power & Renewable Electricity Producers: 0.05%
Vistra Energy Corporation †					12-31-2046		327,375		212,794


Total Rights (Cost $340,913)									212,794


				Maturity date		Principal
Yankee Corporate Bonds and Notes: 9.35%

Consumer Discretionary: 0.20%

Media: 0.16%
WPP Finance 2010		3.63			9-7-2022	$	750,000		741,942


Textiles, Apparel & Luxury Goods: 0.04%
Eagle Intermediate Global Holding BV %%		7.50			5-1-2025		150,000		153,750


Consumer Staples: 0.33%

Beverages: 0.17%
Pernod Ricard SA 144A		4.45			1-15-2022		760,000		785,819


Tobacco: 0.16%
BAT International Finance plc 144A		3.25			6-7-2022		750,000		737,434

The accompanying notes are an integral part of these financial statements.


28		Wells Fargo Multi-Sector Income Fund		Portfolio of investments—April 30, 2018 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value

Energy: 2.58%

Energy Equipment & Services: 0.37%
Ensco plc		5.75	%		10-1-2044	$	2,320,000	$	1,612,400
Trinidad Drilling Limited 144A		6.63			2-15-2025		75,000		71,906

									1,684,306


Oil, Gas & Consumable Fuels: 2.21%
Baytex Energy Corporation 144A		5.13			6-1-2021		2,114,000		1,997,730
Baytex Energy Corporation 144A		5.63			6-1-2024		900,000		801,000
Griffin Coal Mining Company Limited 144A(a)†		9.50			12-1-2016		1,122,015		0
Griffin Coal Mining Company Limited (a)†		9.50			12-1-2016		91,731		0
Nabors Industries Incorproated		0.75			1-15-2024		1,425,000		1,113,281
Teekay Corporation		8.50			1-15-2020		5,625,000		5,807,813
Woodside Finance Limited 144A		8.75			3-1-2019		405,000		422,918

									10,142,742


Financials: 0.94%

Banks: 0.80%
ABN AMRO Bank NV 144A		4.80			4-18-2026		750,000		762,083
Banco del Estado de Chile 144A		3.88			2-8-2022		650,000		652,706
Corporación Andina de Fomento		4.38			6-15-2022		958,000		995,113
Nielsen Holding and Finance BV 144A		5.00			2-1-2025		875,000		860,781
Nielsen Holding and Finance BV 144A		5.50			10-1-2021		415,000		421,225
Preferred Term Securities XII Limited (a)†		0.00			12-24-2033		635,000		0

									3,691,908


Diversified Financial Services: 0.14%
Tyco Electronics Group SA		3.50			2-3-2022		625,000		628,601


Health Care: 1.35%

Pharmaceuticals: 1.35%
Valeant Pharmaceuticals International Incorporated 144A		5.50			3-1-2023		2,200,000		1,989,625
Valeant Pharmaceuticals International Incorporated 144A		5.50			11-1-2025		375,000		373,125
Valeant Pharmaceuticals International Incorporated 144A		5.88			5-15-2023		770,000		704,069
Valeant Pharmaceuticals International Incorporated 144A		6.13			4-15-2025		1,940,000		1,749,822
Valeant Pharmaceuticals International Incorporated 144A		6.50			3-15-2022		325,000		337,188
Valeant Pharmaceuticals International Incorporated 144A		6.75			8-15-2021		425,000		427,656
Valeant Pharmaceuticals International Incorporated 144A		7.00			3-15-2024		575,000		606,451
Valeant Pharmaceuticals International Incorporated 144A		7.50			7-15-2021		10,000		10,163

									6,198,099


Industrials: 0.99%

Commercial Services & Supplies: 0.44%
Ritchie Brothers Auctioneers Incorporated 144A		5.38			1-15-2025		2,050,000		2,039,750


Machinery: 0.24%
Sensata Technologies BV 144A		5.00			10-1-2025		260,000		259,350
Sensata Technologies BV 144A		6.25			2-15-2026		800,000		831,680

									1,091,030

The accompanying notes are an integral part of these financial statements.


Portfolio of investments—April 30, 2018 (unaudited)		Wells Fargo Multi-Sector Income Fund			29


Security name	Interest rate			Maturity date		Principal		Value

Professional Services: 0.14%
IHS Markit Limited 144A		4.75	%		2-15-2025	$	650,000	$	653,315


Road & Rail: 0.17%
Canadian Pacific Railway Company		4.50			1-15-2022		750,000		775,719


Materials: 1.25%

Containers & Packaging: 0.85%
Ardagh Packaging Finance plc 144A		4.25			9-15-2022		375,000		372,656
Ardagh Packaging Finance plc 144A		6.00			2-15-2025		1,700,000		1,719,125
Ardagh Packaging Finance plc 144A		7.25			5-15-2024		725,000		766,688
OI European Group BV 144A		4.00			3-15-2023		1,100,000		1,045,000

									3,903,469


Metals & Mining: 0.40%
ArcelorMittal SA		6.13			6-1-2025		275,000		297,688
Glencore Finance Canada Limited 144A		4.25			10-25-2022		750,000		756,368
Vale Overseas Limited		4.38			1-11-2022		750,000		759,075

									1,813,131


Telecommunication Services: 1.56%

Diversified Telecommunication Services: 0.37%
Intelsat Luxembourg SA		7.75			6-1-2021		1,970,000		1,334,675
Virgin Media Finance plc 144A		6.38			4-15-2023		365,000		367,738

									1,702,413


Wireless Telecommunication Services: 1.19%
Globo Communicacoes Participacoes SA 144A		4.88			4-11-2022		595,000		597,981
Intelsat Jackson Holdings SA		5.50			8-1-2023		5,775,000		4,843,781

									5,441,762


Utilities: 0.15%

Electric Utilities: 0.15%
Comision Federal de Electricidad 144A		4.88			5-26-2021		650,000		666,250


Total Yankee Corporate Bonds and Notes (Cost $44,640,583)									42,851,440


	Yield					Shares
Short-Term Investments: 4.30%

Investment Companies: 4.30%
Wells Fargo Government Money Market Fund Select Class (l)(u)##		1.59					19,708,914		19,708,914


Total Short-Term Investments (Cost $19,708,914)									19,708,914



Total investments in securities (Cost $648,410,644)	140.02	%		641,697,213
Other assets and liabilities, net	(40.02	)		(183,397,435	)

Total net assets	100.00	%	$	458,299,778

The accompanying notes are an integral part of these financial statements.


30		Wells Fargo Multi-Sector Income Fund		Portfolio of investments—April 30, 2018 (unaudited)

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

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.

±±	The coupon of the security is adjusted based on the principal and interest payments received from the underlying pool of mortgages as well as the credit quality and the actual prepayment speed of the underlying mortgages.

(c)	Investment in an interest-only security entitles holders to receive only the interest payments on the underlying mortgages. The principal amount shown is the notional amount of the underlying mortgages. The rate represents the coupon rate.

¥	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.

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

‡	Security is valued using significant unobservable inputs.

<	All or a portion of the position represents an unfunded loan commitment. The rate represents current interest rate if the loan is partially funded.

†	Non-income-earning security

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

(l)	The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940.

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

##	All or a portion of this security is segregated for when-issued and/or unfunded loans.

@	Foreign bond principal is denominated in the local currency of the issuer.

Abbreviations:

AUD	Australian dollar

BRL	Brazilian real

COP	Colombian peso

FHLMC

Federal Home Loan Mortgage Corporation

FNMA	Federal National Mortgage Association

GBP	Great British pound

GNMA	Government National Mortgage Association

IDR	Indonesian rupiah

INR	Indian rupee

LIBOR

London Interbank Offered Rate

MXN	Mexican peso

MYR	Malaysian ringgit

NZD	New Zealand dollar

PEN	Peruvian sol

REIT	Real estate investment trust

ZAR	South African rand

Investments in Affiliates

An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were either affiliated persons of the Fund at the beginning of the period or the end of the period were as follows:


	Shares, beginning of period		Shares purchased		Shares sold		Shares, end of period		Net realized gains		Net change in unrealized gains (losses)		Income from affiliated securities		Value, end of period		% of net assets

Short-Term Investments
Investment Companies
Wells Fargo Government Money Market Fund Select Class		25,651,250		83,119,843		89,062,179		19,708,914	$	0	$	0	$	121,487	$	19,708,914		4.30	%

The accompanying notes are an integral part of these financial statements.


Statement of assets and liabilities—April 30, 2018 (unaudited)		Wells Fargo Multi-Sector Income Fund			31




Assets
Investments in unaffiliated securities, at value (cost $628,701,730)	$	621,988,299
Investments in affiliated securities, at value (cost $19,708,914)		19,708,914
Cash		159
Foreign currency, at value (cost $1,461,389)		1,426,435
Receivable for investments sold		2,042,661
Principal paydown receivable		9,048
Receivable for interest		9,099,936
Prepaid expenses and other assets		20,193

Total assets		654,295,645


Liabilities
Secured borrowing payable		187,000,000
Dividends payable		3,556,662
Payable for investments purchased		3,176,398
Advisory fee payable		294,031
Payable for Fund shares redeemed		87,050
Administration fee payable		26,730
Trustees’ fees and expenses payable		2,760
Accrued expenses and other liabilities		1,852,236

Total liabilities		195,995,867

Total net assets	$	458,299,778


NET ASSETS CONSIST OF
Paid-in capital	$	508,393,419
Overdistributed net investment income		(14,894,504	)
Accumulated net realized losses on investments		(28,477,351	)
Net unrealized losses on investments		(6,721,786	)

Total net assets	$	458,299,778


NET ASSET VALUE PER SHARE
Based on $458,299,778 divided by 32,826,992 shares issued and outstanding (100,000,000 shares authorized)		$13.96

The accompanying notes are an integral part of these financial statements.


32		Wells Fargo Multi-Sector Income Fund		Statement of operations—six months ended April 30, 2018 (unaudited)




Investment income
Interest (net of foreign interest withholding taxes of $210,506)	$	19,117,175
Income from affiliated securities		121,487
Dividends		17

Total investment income		19,238,679


Expenses
Advisory fee		1,825,686
Administration fee		165,971
Custody and accounting fees		131,489
Professional fees		367,741
Shareholder report expenses		92,885
Trustees’ fees and expenses		18,942
Transfer agent fees		22,724
Interest expense		2,135,823
Other fees and expenses		15,409

Total expenses		4,776,670

Net investment income		14,462,009


REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS

Net realized losses on:
Unaffiliated securities		(2,484,711	)
Foreign currency transactions		(380,237	)

Net realized losses on investments		(2,864,948	)


Net change in unrealized gains (losses) on:
Unaffiliated securities		(3,427,186	)
Foreign currency transactions		(27,235	)

Net change in unrealized gains (losses) on investments		(3,454,421	)

Net realized and unrealized gains (losses) on investments		(6,319,369	)

Net increase in net assets resulting from operations	$	8,142,640

The accompanying notes are an integral part of these financial statements.


Statement of changes in net assets		Wells Fargo Multi-Sector Income Fund			33


	Six months ended April 30, 2018 (unaudited)			Year ended October 31, 2017

Operations
Net investment income	$	14,462,009		$	36,933,415
Net realized losses on investments		(2,864,948	)		(21,012,373	)
Net change in unrealized gains (losses) on investments		(3,454,421	)		27,791,101

Net increase in net assets resulting from operations		8,142,640			43,712,143


Distributions to shareholders from
Net investment income		(21,932,849	)		(26,702,083	)
Tax basis return of capital		0			(19,927,206	)

Total distributions to shareholders		(21,932,849	)		(46,629,289	)


Capital share transactions
Cost of shares repurchased		(27,734,043	)		(88,098,943	)

Net decrease in net assets resulting from capital share transactions		(27,734,043	)		(88,098,943	)

Total decrease in net assets		(41,524,252	)		(91,016,089	)


Net assets
Beginning of period		499,824,030			590,840,119

End of period	$	458,299,778		$	499,824,030

Overdistributed net investment income	$	(14,894,504	)	$	(3,872,518	)

The accompanying notes are an integral part of these financial statements.


34		Wells Fargo Multi-Sector Income Fund		Statement of cash flows—six months ended April 30, 2018 (unaudited)




Cash flows from operating activities:
Net increase in net assets resulting from operations	$	8,142,640

Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities:
Purchase of securities		(114,520,823	)
Proceeds from the sale of securities		140,661,421
Paydowns		2,853,766
Amortization		(246,312	)
Proceeds from sale of short-term securities, net		5,942,336
Increase in receivable for investments sold		(312,981	)
Decrease in principal paydown receivable		44,342
Increase in receivable for interest		(572,799	)
Increase in prepaid expenses and other assets		(5,471	)
Increase in payable for investments purchased		1,237,514
Increase in payable for shares redeemed		87,050
Decrease in advisory fee payable		(28,337	)
Decrease in administration fee payable		(2,576	)
Increase in trustees’ fees and expenses payable		6
Increase in accrued expenses and other liabilities		1,261,985
Litigation payments received		35,699
Net realized losses on investments		2,520,410
Net change in unrealized gains (losses) on investments		3,454,421

Net cash provided by operating activities		50,552,291


Cash flows from financing activities:
Cost of shares repurchased		(27,734,043	)
Cash distributions paid		(22,135,348	)

Net cash used in financing activities		(49,869,391	)

Net increase in cash		682,900


Cash (including foreign currency):
Beginning of period	$	743,694

End of period	$	1,426,594


Supplemental cash disclosure
Cash paid for interest	$	1,321,554

The accompanying notes are an integral part of these financial statements.


Financial highlights		Wells Fargo Multi-Sector Income Fund			35

(For a share outstanding throughout each period)


	Six months ended April 30, 2018 (unaudited)			Year ended October 31
	Six months ended April 30, 2018 (unaudited)			2017			2016			2015			2014			2013
Net asset value, beginning of period		$14.31			$14.35			$14.06			$16.10			$16.40			$17.01
Net investment income		0.43	¹		0.97	¹		1.08			1.10	¹		1.14	¹		1.18
Net realized and unrealized gains (losses) on investments		(0.20	)		0.18			0.33			(1.98	)		(0.24	)		(0.59	)

Total from investment operations		0.23			1.15			1.41			(0.88	)		0.90			0.59
Distributions to shareholders from
Net investment income		(0.65	)		(0.70	)		(0.97	)		(0.87	)		(0.91	)		(1.20	)
Tax basis return of capital		0.00			(0.53	)		(0.17	)		(0.29	)		(0.29	)		0.00

Total distributions to shareholders		(0.65	)		(1.23	)		(1.14	)		(1.16	)		(1.20	)		(1.20	)
Anti-dilutive effect of shares repurchased		0.07			0.04			0.02			0.00			0.00			0.00
Net asset value, end of period		$13.96			$14.31			$14.35			$14.06			$16.10			$16.40
Market value, end of period		$12.96			$13.05			$12.66			$12.02			$14.19			$14.47
Total return based on market value²		12.96	%		13.07	%		15.66	%		(7.34	)%		6.55	%		(5.44	)%
Ratios to average net assets (annualized)
Expenses³		2.00	%		1.68	%		1.39	%		1.24	%		1.21	%		1.24	%
Net investment income		3.00	%		6.73	%		7.94	%		7.33	%		6.95	%		7.04	%
Supplemental data
Portfolio turnover rate		15	%		38	%		29	%		31	%		41	%		40	%
Net assets, end of period (000s omitted)		$458,300			$498,824			$590,840			$591,226			$677,004			$689,573

Borrowings outstanding, end of period (000s omitted)		$187,000			$187,000			$220,000			$230,000			$230,000			$230,000
Asset coverage per $1,000 of borrowing, end of period		$3,451			$3,673			$3,686			$3,570			$3,944			$3,998

¹	Calculated based upon average shares outstanding

Total return is calculated assuming a purchase of common stock on the first day and sale on the last day of the period reported. Dividends and distributions, if any, are assumed for purposes of these calculations to be reinvested at prices obtained under the Fund’s Automatic Dividend Reinvestment Plan. Total return does not reflect brokerage commissions that a shareholder would pay on the purchase and sale of shares. Returns for periods of less than one year are not annualized.

³	Ratios include interest expense relating to interest associated with borrowings and/or leverage transactions as follows:


Six months ended April 30, 2018 (unaudited)	0.89	%
Year ended October 31, 2017	0.61	%
Year ended October 31, 2016	0.44	%
Year ended October 31, 2015	0.24	%
Year ended October 31, 2014	0.07	%
Year ended October 31, 2013	0.07	%

The accompanying notes are an integral part of these financial statements.


36		Wells Fargo Multi-Sector Income Fund		Notes to financial statements (unaudited)

1. ORGANIZATION

Wells Fargo Multi-Sector Income Fund (the “Fund”) was organized as a statutory trust under the laws of the state of Delaware on April 10, 2003 and is registered as a diversified closed-end management investment company under the Investment Company Act of 1940, as amended. As an investment company, the Fund follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies.

2. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.

Debt securities are valued at the evaluated bid price provided by an independent pricing service or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

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 principal exchange or market that day, a fair value price will be determined in accordance with the Fund’s Valuation Procedures.

The values of securities denominated in foreign currencies are translated into U.S. dollars at rates provided by an independent foreign currency pricing source at a time each business day specified by the Wells Fargo Asset Management Pricing Committee at 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 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 Wells Fargo Asset Management Pricing Committee. 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 Wells Fargo Asset Management Pricing Committee 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 manager 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. The values of other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at rates provided by an independent foreign currency pricing source at a time each business day specified by the Wells Fargo Asset Management Pricing Committee. Purchases and sales of securities, and income and expenses are converted at the rate of exchange on the respective dates of such transactions. 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


Notes to financial statements (unaudited)		Wells Fargo Multi-Sector Income Fund			37

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 from changes in exchange rates. The changes in net assets arising from changes in exchange rates of securities and the changes in net assets resulting from changes in market prices of securities are not separately presented. Such changes are included in net realized and unrealized gains or losses from investments.

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.

Security transactions and income recognition

Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. To the extent debt obligations are placed on non-accrual status, any related interest income may be reduced by writing off interest receivables when the collection of all or a portion of interest has been determined to be doubtful based on consistently applied procedures and the fair value has decreased. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Dividend income is recognized on the ex-dividend date.

Income from foreign securities is recorded net of foreign taxes withheld where recovery of such taxes is not assured.

Distributions to shareholders

Under a monthly distribution plan, the Fund pays distributions to shareholders at an annual minimum fixed rate of 9% based on the Fund’s average monthly net asset value per share over the prior 12 months. Under the managed distribution plan, monthly distributions may be sourced from income, paid-in capital, and/or capital gains, if any. To the extent that sufficient investment income is not available on a monthly basis, the Fund may distribute paid-in capital and/or capital gains, if any, in order to maintain its managed distribution level.

Distributions to shareholders from net investment income and any net realized gains are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.

Federal and other taxes

The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.

The Fund’s income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.


38		Wells Fargo Multi-Sector Income Fund		Notes to financial statements (unaudited)

As of April 30, 2018, the aggregate cost of all investments for federal income tax purposes was $652,027,501 and the unrealized gains (losses) consisted of:


Gross unrealized gains	$	4,681,437
Gross unrealized losses		(15,011,725	)
Net unrealized losses	$	(10,330,288	)

As of October 31, 2017, the Fund had capital loss carryforwards which consisted of $10,706,157 in short-term capital losses and $13,671,135 in long-term capital losses.

3. 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 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, 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 April 30, 2018:


	Quoted prices (Level 1)		Other significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets
Investments in:

Agency securities	$	0	$	7,795,284	$	0	$	7,795,284

Asset-backed securities		0		3,970,735		0		3,970,735

Common stocks
Materials		952		0		0		952

Corporate bonds and notes		0		333,600,811		0		333,600,811

Foreign corporate bonds and notes		0		20,839,022		0		20,839,022

Foreign government bonds		0		102,997,759		0		102,997,759

Loans		0		69,130,680		21,190,402		90,321,082

Non-agency mortgage-backed securities		0		19,398,420		0		19,398,420

Rights
Utilities		0		212,794		0		212,794

Yankee corporate bonds and notes		0		42,851,440		0		42,851,440

Short-term investments
Investment companies		19,708,914		0		0		19,708,914
Total assets	$	19,709,866	$	600,796,945	$	21,190,402	$	641,697,213


Notes to financial statements (unaudited)		Wells Fargo Multi-Sector Income Fund			39

The Fund recognizes transfers between levels within the fair value hierarchy at the end of the reporting period. At April 30, 2018, the Fund did not have any transfers between Level 1 and Level 2.

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


	Asset-backed securities			Loans			Yankee corporate bonds and notes			Total
Balance as of October 31, 2017	$	700,000		$	20,926,735		$	7,293		$	21,634,028
Accrued discounts (premiums)		0			13,769			0			13,769
Realized gains (losses)		0			(20,852	)		0			(20,852	)
Change in unrealized gains (losses)		10			33,564			602,163			635,737
Purchases		0			2,847,399			0			2,847,399
Sales		0			(5,803,743	)		(609,456	)		(6,413,199	)
Transfers into Level 3		0			3,193,530			0			3,193,530
Transfers out of Level 3		(700,010	)		0			0			(700,010	)
Balance as of April 30, 2018	$	0		$	21,190,402		$	0		$	21,190,402
Change in unrealized gains (losses) relating to securities still held at April 30, 2018	$	0		$	(160,866	)	$	0		$	(160,866	)

The loan obligations in the Level 3 table were 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.

4. TRANSACTIONS WITH AFFILIATES

Advisory fee

Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”) is the adviser to the Fund and is entitled to receive a fee at an annual rate of 0.55% of the Fund’s average daily total assets. Total assets consist of net assets of the Fund plus borrowings or other leverage for investment purposes to the extent excluded in calculating net assets.

Funds Management has retained the services of certain subadvisers to provide daily portfolio management to the Fund. The fees for subadvisory services are borne by Funds Management. Wells Capital Management Incorporated, an affiliate of Funds Management and an indirect, wholly owned subsidiary of Wells Fargo, is a subadviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate of 0.30% of the Fund’s average daily total assets. Wells Fargo Asset Management (International), LLC (formerly, First International Advisors LLC), an affiliate of Funds Management and an indirect, wholly owned subsidiary of Wells Fargo, is also a subadviser to the Fund and is entitled to receive a fee from Funds Management at an annual rate of 0.10% of the Fund’s average daily total assets.

Administration fee

Funds Management also serves as the administrator to the Fund, providing the Fund with a wide range of administrative services necessary to the operation of the Fund. Funds Management is entitled to receive an annual administration fee from the Fund equal to 0.05% of the Fund’s average daily total assets.

Interfund transactions

The Fund may purchase or sell portfolio investment securities to certain other Wells Fargo affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund had $12,324,759 and $24,228,588 in interfund purchases and sales, respectively, during the six months ended April 30, 2018.

5. CAPITAL SHARE TRANSACTIONS

The Fund has authorized capital of 100,000,000 shares with no par value. For the six months ended April 30, 2018 and the year ended October 31, 2017, the Fund did not issue any shares.

On November 10, 2017, the Fund announced the reinstatement of its open-market share repurchase program (the “Buyback Program”). Under the Buyback Program, the Fund may repurchase up to 10% of its outstanding shares in open market transactions during the period beginning on January 1, 2018 and ending on December 31, 2018. The Fund’s


40		Wells Fargo Multi-Sector Income Fund		Notes to financial statements (unaudited)

Board of Trustees had delegated to Funds Management discretion to administer the Buyback Program including the determination of the amount and timing of repurchases in accordance with the best interests of the Fund and subject to applicable legal limitations. During the six months ended April 30, 2018, the Fund purchased 2,112,692 of its shares on the open market at a total cost of $27,734,043 (weighted average price per share of $13.13). The weighted average discount of these repurchased shares was 7.16%.

6. BORROWING

The Fund has borrowed $187,000,000 through a revolving credit facility administered by a major financial institution (the “Facility”). The Facility has a commitment amount of $230,000,000 with no specific contract expiration date but the Facility can be terminated upon 180 days’ notice. The Fund is charged interest at London Interbank Offered Rate (LIBOR) plus 0.70% and a commitment fee of 0.30% of the average daily unutilized amount of the commitment which may be waived if the amount drawn on the Facility is over 75% of the committed amount. The financial institution holds a security interest in all the assets of the Fund as collateral for the borrowing.

During the six month ended April 30, 2018, the Fund had average borrowings outstanding of $187,000,000 at an average interest rate of 1.14% (2.30% on an annualized basis) and paid interest in the amount of $2,135,823, which represents 0.89% of its average daily net assets (on an annualized basis).

7. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended April 30, 2018 were $98,396,739 and $108,057,877, respectively.

As of April 30, 2018, the Fund had unfunded term loan commitments of $2,775,754.

8. INDEMNIFICATION

Under the Fund’s organizational documents, the officers and Trustees have been granted certain indemnification rights against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund may enter into contracts with service providers that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.

9. NEW ACCOUNTING PRONOUNCEMENTS

In August 2016, FASB issued Accounting Standard Update (“ASU”) No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (a Consensus of the Emerging Issues Task Force), which is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. Management is currently assessing the potential impact on the financial statements that may result from adopting this ASU. This ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those financial years, with early adoption permitted.

In November 2016, FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash (a Consensus of the Emerging Issues Task Force), which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts described as restricted cash and restricted cash equivalents should be included with the cash and cash equivalents in reconciling the beginning and end of period total amounts shown on the statement of cash flows. Management is currently assessing the potential impact on the financial statements that may result from adopting this ASU. This ASU is effective for interim and annual reporting periods beginning after December 15, 2017.

10. SUBSEQUENT DISTRIBUTIONS

The Fund declared the following distributions to common shareholders:


Declaration date	Record date	Payable date	Per share amount
April 27, 2018	May 15, 2018	May 1, 2018	$0.10781
May 23, 2018	June 13, 2018	July 2, 2018	0.10761

These distributions are not reflected in the accompanying financial statements.


Other information (unaudited)		Wells Fargo Multi-Sector Income Fund			41

PROXY VOTING INFORMATION

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, upon request, by calling 1-800-222-8222, visiting our website at wellsfargofunds.com, or visiting the SEC website at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website at wellsfargofunds.com or by visiting the SEC website at sec.gov.

ANNUAL MEETING OF SHAREHOLDERS

On February 5, 2018, an Annual Meeting of Shareholders for the Fund was held to consider the following proposal. The results of the proposal are indicated below.

Proposal 1 – Election of trustees:


Net assets voted “For”	William R. Ebsworth	$	374,121,882
Net assets voted “Withhold”		$	11,736,628
Net assets voted “For”	Jane A. Freeman	$	373,781,792
Net assets voted “Withhold”		$	12,076,718
Net assets voted “For”	Judith M. Johnson	$	374,052,342
Net assets voted “Withhold”		$	11,806,168

PORTFOLIO HOLDINGS INFORMATION

The complete portfolio holdings for the Fund are publicly available monthly on the Fund’s website (wellsfargofunds.com), on a one-month delayed basis. The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q, which is available by visiting the SEC website at sec.gov. In addition, the Fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and at regional offices in New York City, at 233 Broadway, and in Chicago, at 175 West Jackson Boulevard, Suite 900. Information about the Public Reference Room may be obtained by calling 1-800-SEC-0330.


42		Wells Fargo Multi-Sector Income Fund		Other information (unaudited)

BOARD OF TRUSTEES AND OFFICERS

The following table provides basic information about the Board of Trustees (the “Trustees”) and Officers of the Fund. Each of the Trustees and Officers¹ listed below acts in identical capacities for each fund in the Wells Fargo family of funds, which consists of 153 mutual funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust, and four closed-end funds, including the Fund (collectively the “Fund Complex”). The mailing address of each Trustee and Officer is 525 Market Street, 12th Floor, San Francisco, CA 94105. The Board of Trustees is classified into three classes of which one is elected annually. Each Trustee serves a three-year term concurrent with the class from which the Trustee is elected. Each Officer serves an indefinite term.

Independent Trustees


Name and year of birth	Position held and length of service	Principal occupations during past five years or longer	Current other public company or investment company directorships
Class I - Non-Interested Trustees to serve until 2020 Annual Meeting of Shareholders
Isaiah Harris, Jr. (Born 1952)	Trustee, since 2010	Retired. Chairman of the Board of CIGNA Corporation since 2009, and Director since 2005. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (charter school). Advisory Board Member, Child Evangelism Fellowship (non-profit). Mr. Harris is a certified public accountant (inactive status).	CIGNA Corporation; Asset Allocation Trust
David F. Larcker (Born 1950)	Trustee, since 2010	James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.	Asset Allocation Trust
Olivia S. Mitchell (Born 1953)	Trustee, since 2010, Governance Committee Chairman, since 2018	International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993.	Asset Allocation Trust
Class II - Non-Interested Trustees to serve until 2021 Annual Meeting of Shareholders
William R. Ebsworth (Born 1957)	Trustee, since 2015	Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief investment officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong, and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he led a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Board member of the Forté Foundation (non-profit organization) and the Vincent Memorial Hospital Endowment (non-profit organization), where he serves on the Investment Committee and as Chair of the Audit Committee. Mr. Ebsworth is a CFA^® charterholder.	Asset Allocation Trust


Other information (unaudited)		Wells Fargo Multi-Sector Income Fund			43


Name and year of birth	Position held and length of service	Principal occupations during past five years or longer	Current other public company or investment company directorships
Jane A. Freeman (Born 1953)	Trustee, since 2015; Chair Liaison, since 2018	Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is a Board Member of Ruth Bancroft Garden (non-profit organization) and the Glimmerglass Festival. She is also an inactive Chartered Financial Analyst.	Asset Allocation Trust
Judith M. Johnson (Born 1949)	Trustee, since 2010; Audit Committee Chairman, since 2010	Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.	Asset Allocation Trust
Class III - Non-Interested Trustees to serve until 2019 Annual Meeting of Shareholders
Timothy J. Penny (Born 1951)	Trustee, since 2010; Chairman, since 2018: Vice Chairman, from 2017 to 2018	President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.	Asset Allocation Trust
James G. Polisson (Born 1959)	Trustee, since 2018; Advisory Board Member, from 2017 to 2018	Retired. Chief Marketing Officer, Source (ETF) UK Services, Ltd, from 2015 to 2017. From 2012 to 2015, Principal of The Polisson Group, LLC, a management consulting, corporate advisory and principal investing company. Chief Executive Officer and Managing Director at Russell Investments, Global Exchange Traded Funds from 2010 to 2012. Managing Director of Barclays Global Investors from 1998 to 2010 and Global Chief Marketing Officer for iShares and Barclays Global Investors from 2000 to 2010. Trustee of the San Francisco Mechanics’ Institute, a non-profit organization, from 2013 to 2015. Board member of the Russell Exchange Traded Fund Trust from 2011 to 2012. Director of Barclays Global Investors Holdings Deutschland GmbH from 2006 to 2009. Mr. Polisson is an attorney and has a retired status with the Massachusetts and District of Columbia Bar Associations.	Asset Allocation Trust
Michael S. Scofield (Born 1943)	Trustee, since 2003	Served on the Investment Company Institute’s Board of Governors and Executive Committee from 2008-2011 as well the Governing Council of the Independent Directors Council from 2006-2011 and the Independent Directors Council Executive Committee from 2008-2011. Trustee of the Evergreen Fund complex (and its predecessors) from 1984 to 2010. Chairman of the Evergreen Funds from 2000-2010. Former Trustee of the Mentor Funds. Retired Attorney, Law Offices of Michael S. Scofield.	Asset Allocation Trust


44		Wells Fargo Multi-Sector Income Fund		Other information (unaudited)

Name and

year of birth

Position held and
length of service

Principal occupations during past five years or longer

Current other
public company or
investment company
directorships

Pamela Wheelock
(Born 1959)

Trustee, since 2018; Advisory Board Member, from 2017 to 2018

Chief Operating Officer, Twin Cities Habitat for Humanity, since January, 2017. Vice President of University Services, University of Minnesota from 2012 to 2017. Prior thereto, on the Board of Directors, Governance Committee and Finance Committee for the Minnesota Philanthropy Partners (Saint Paul Foundation) from 2012 to 2018, Interim President and Chief Executive Officer of Blue Cross Blue Shield of Minnesota from 2010 to 2011, Chairman of the Board from 2009 to 2011 and Board Director from 2003 to 2015. Vice President, Leadership and Community Engagement, Bush Foundation, Saint Paul, Minnesota (a private foundation) from 2009 to 2011. Executive Vice President and Chief Financial Officer, Minnesota Sports and Entertainment from 2004 to 2009 and Senior Vice President from 2002 to 2004. Commissioner of Finance, State of Minnesota, from 1999 to 2002. Currently the Board Chair of the Minnesota Wild Foundation since 2010.

Asset Allocation Trust

Officers


Name and year of birth	Position held and length of service	Principal occupations during past five years or longer
Andrew Owen (Born 1960)	President, since 2017	Executive Vice President of Wells Fargo & Company and Head of Affiliated Managers, Wells Fargo Asset Management, since 2014. In addition, Mr. Owen is currently President, Chief Executive Officer and Director of Wells Fargo Funds Management, LLC since 2017. Prior thereto, Executive Vice President responsible for marketing, investments and product development for Wells Fargo Funds Management, LLC, from 2009 to 2014.
Jeremy DePalma¹(Born 1974)	Treasurer, since 2012	Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.
Alexander Kymn* (Born 1973)	Secretary, since 2018; Chief Legal Officer, since 2018	Senior Company Counsel of Wells Fargo Bank, N.A. since 2018 (previously Senior Counsel from 2007 to 2018). Vice President of Wells Fargo Funds Management, LLC from 2008 to 2014.
Michael H. Whitaker(Born 1967)	Chief Compliance Officer, since 2016	Senior Vice President and Chief Compliance Officer since 2016. Senior Vice President and Chief Compliance Officer for Fidelity Investments from 2007 to 2016.
David Berardi (Born 1975)	Assistant Treasurer, since 2009	Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.

¹	Jeremy DePalma acts as Treasurer of 76 funds and Assistant Treasurer of 77 funds in the Fund Complex.

*	Alexander Kymn became the Secretary and Chief Legal Officer effective April 17, 2018.


Automatic dividend reinvestment plan		Wells Fargo Multi-Sector Income Fund			45

AUTOMATIC DIVIDEND REINVESTMENT PLAN

All common shareholders are eligible to participate in the Automatic Dividend Reinvestment Plan (“the Plan”). Pursuant to the Plan, unless a common shareholder is ineligible or elects otherwise, all cash dividends and capital gains distributions are automatically reinvested by Computershare Trust Company, N.A., as agent for shareholders in administering the Plan (“Plan Agent”), in additional common shares of the Fund. Whenever the Fund declares an ordinary income dividend or a capital gain dividend (collectively referred to as “dividends”) payable either in shares or in cash, nonparticipants in the Plan will receive cash, and participants in the Plan will receive the equivalent in common shares. The shares are acquired by the Plan Agent for the participant’s account, depending upon the circumstances described below, either (i) through receipt of additional unissued but authorized common shares from the Fund (“newly issued common shares”) or (ii) by purchase of outstanding common shares on the open-market (open-market purchases) on the NYSE Amex or elsewhere. If, on the payment date for any dividend or distribution, the net asset value per share of the common shares is equal to or less than the market price per common share plus estimated brokerage commissions (“market premium”), the Plan Agent will invest the amount of such dividend or distribution in newly issued shares on behalf of the participant. The number of newly issued common shares to be credited to the participant’s account will be determined by dividing the dollar amount of the dividend by the net asset value per share on the date the shares are issued, provided that the maximum discount from the then current market price per share on the date of issuance may not exceed 5%. If on the dividend payment date the net asset value per share is greater than the market value (“market discount”), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participant in open-market purchases. There will be no brokerage charges with respect to shares issued directly by the Fund as a result of dividends or capital gains distributions payable either in shares or in cash. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open-market purchases in connection with the reinvestment of dividends. The automatic reinvestment of dividends and distributions will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such dividends. All correspondence concerning the Plan should be directed to the Plan Agent at 505000, Louisville, Kentucky 40233 or by calling 1-800-730-6001.

This page is intentionally left blank.

LOGO

Transfer Agent, Registrar, Shareholder Servicing

Agent & Dividend Disbursing Agent

Computershare Trust Company, N.A.

P.O. Box 505000

Louisville, Kentucky 40233

1-800-730-6001

Website: wellsfargofunds.com

Wells Fargo Funds Management, LLC, is a subsidiary of Wells Fargo & Company and is an affiliate of Wells Fargo & Company’s broker/dealer subsidiaries. Certain material contained in this report may be considered marketing material and has been reviewed by Wells Fargo Funds Distributor, LLC, Member FINRA, an affiliate of Wells Fargo & Company. Neither Wells Fargo Funds Management nor Wells Fargo Funds Distributor has Fund customer accounts/assets, and neither provides investment advice/recommendations or acts as an investment advice fiduciary to any investor.

NOT FDIC INSURED ◾ NO BANK GUARANTEE ◾ MAY LOSE VALUE

311865 06-18

SMSI/SAR159 04-18

ITEM 2.

CODE OF ETHICS

Not applicable.

ITEM 3.

AUDIT COMMITTEE FINANCIAL EXPERT

Not applicable.

ITEM 4.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Not applicable.

ITEM 5.

AUDIT COMMITTEE OF LISTED REGISTRANTS

Not applicable.

ITEM 6.

INVESTMENTS

A Portfolio of Investments for Wells Fargo Multi-Sector Income Fund is included as part of the report to shareholders filed under Item 1 of this Form.

ITEM 7.

DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable.

ITEM 8.

PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable.

ITEM 9.

PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMEENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS

Not applicable.

ITEM 10.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees that have been implemented since the registrant’s last provided disclosure in response to the requirements of this Item.

ITEM 11.

CONTROLS AND PROCEDURES

(a) The President and Treasurer have concluded that the Wells Fargo 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.

ITEM 12.

EXHIBITS

(a)(1) Not applicable

(a)(2) Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.

(a)(3) Not applicable.

(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is filed and attached hereto as Exhibit 99.906CERT.

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 Multi-Sector Income Fund

By:		/s/ Andrew Owen
		Andrew Owen
		President

Date:		June 25, 2018

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 date indicated.


Wells Fargo Multi-Sector Income Fund

By:		/s/ Andrew Owen
		Andrew Owen
		President

Date:		June 25, 2018

By:		/s/ Jeremy DePalma
		Jeremy DePalma
		Treasurer

Date:		June 25, 2018