nvq
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-21507
Wells Fargo Advantage Utilities and High Income Fund
(Exact name of registrant as specified in charter)
525 Market Street, 12th Floor, San Francisco, CA 94105
(Address of principal executive offices) (Zip code)
C. David Messman
Wells Fargo Funds Management, LLC
525 Market Street, 12th Floor, San Francisco, CA 94105
(Name and address of agent for service)
Registrant’s telephone number, including area code: 800-643-9691
Date of fiscal year end: August 31, 2010
Date of reporting period: November 30, 2010
 
 

 

 

ITEM 1. SCHEDULE OF INVESTMENTS

 

 

     
WELLS FARGO ADVANTAGE UTILITIES AND HIGH INCOME FUND
  PORTFOLIO OF INVESTMENTS — November 30, 2010 (UNAUDITED)
                                 
Principal     Security Name   Interest Rate     Maturity Date     Value  
Corporate Bonds and Notes: 29.81%                        
       
 
                        
Consumer Discretionary: 4.55%                        
       
 
                        
Auto Components: 0.52%                        
$ 215,000    
Cooper Tire & Rubber Company
     7.63 %     03/15/2027     $ 202,100  
  335,000    
Goodyear Tire & Rubber Company
     10.50       05/15/2016       366,825  
       
 
                        
       
 
                     568,925  
       
 
                      
       
 
                        
Automobiles: 0.22%                        
  235,000    
Ford Motor Credit Company
     9.88       08/10/2011       246,199  
       
 
                      
       
 
                        
Diversified Consumer Services: 0.94%                        
  185,000    
Carriage Services Incorporated
     7.88       01/15/2015       183,844  
  40,000    
Service Corporation International
     8.00       11/15/2021       42,000  
  465,000    
Service Corporation International
     7.50       04/01/2027       449,888  
  325,000    
Stonemor Operating LLC
     10.25       12/01/2017       352,625  
       
 
                        
       
 
                     1,028,357  
       
 
                      
       
 
                        
Hotels, Restaurants & Leisure: 0.71%                        
  75,000    
Ameristar Casinos Incorporated
     9.25       06/01/2014       80,250  
  100,000    
Chukchansi Economic Development Authority
     3.94       11/15/2012       65,500  
  50,000    
DineEquity Incorporated††
     9.50       10/30/2018       51,750  
  225,000    
Greektown Superholdings††
     13.00       07/01/2015       248,625  
  60,000    
Scientific Games Corporation
     9.25       06/15/2019       62,100  
  120,000    
Speedway Motorsports Incorporated
     8.75       06/01/2016       129,000  
  125,000    
Yonkers Racing Corporation††
     11.38       07/15/2016       136,875  
       
 
                        
       
 
                     774,100  
       
 
                      
       
 
                        
Household Durables: 0.01%                        
  9,000    
Sealy Mattress Corporation††
     10.88       04/15/2016       10,170  
       
 
                      
       
 
                        
Media: 1.93%                        
  25,000    
AMC Entertainment Incorporated
     8.75       06/01/2019       26,563  
  145,000    
Cablevision Systems Corporation
     8.63       09/15/2017       157,688  
  605,000    
CCH II Capital Corporation
     13.50       11/30/2016       711,631  
  595,000    
Charter Communications Incorporatedºº††
     10.88       09/15/2014       663,425  
  115,000    
DISH DBS Corporation
     7.88       09/01/2019       120,750  
  50,000    
Gray Television Incorporated
     10.50       06/29/2015       50,000  
  25,000    
Interactive Data Corporation††
     10.25       08/01/2018       27,000  
  50,000    
LIN Television Corporation
     8.38       04/15/2018       52,500  
  200,000    
Regal Cinemas Corporation
     8.63       07/15/2019       211,000  
  96,000    
Salem Communications Corporation
     9.63       12/15/2016       100,320  
       
 
                        
       
 
                     2,120,877  
       
 
                      
       
 
                        
Specialty Retail: 0.02%                        
  25,000    
Rent-A-Center Incorporated††
     6.63       11/15/2020       24,625  
       
 
                      
       
 
                        
Textiles, Apparel & Luxury Goods: 0.20%                        
  200,000    
Oxford Industries Incorporated
     11.38       07/15/2015       224,500  
       
 
                      
       
 
                        
Consumer Staples: 0.21%                        
       
 
                        
Food Products: 0.21%                        
  181,000    
Dole Food Company Incorporated
     13.88       03/15/2014       219,463  
  17,000    
Smithfield Foods Incorporated
     7.00       08/01/2011       17,680  
       
 
                        
       
 
                     237,143  
       
 
                      
The Portfolio of Investments should be read in conjunction with the Financial Statements and Notes to Financial Statements which are included in the Fund’s audited Annual Report and Semi-Annual Report. These reports include additional information about the Fund’s security valuation policies and about certain security types invested in by the Fund.

1

 

PORTFOLIO OF INVESTMENTS — November 30, 2010 (UNAUDITED)
UTILITIES AND HIGH INCOME FUND
                                 
Principal     Security Name   Interest Rate     Maturity Date     Value  
Energy: 4.67%                
       
 
                        
Energy Equipment & Services: 1.02%                        
$ 110,000    
Bristow Group Incorporated
     7.50 %     09/15/2017     $ 115,500  
  225,000    
Gulfmark Offshore Incorporated
     7.75       07/15/2014       227,250  
  170,000    
Hercules Offshore Incorporated††
     10.50       10/15/2017       135,150  
  260,000    
Hornbeck Offshore Services Incorporated Series B
     6.13       12/01/2014       257,400  
  230,000    
Hornbeck Offshore Services Incorporated Series B
     8.00       09/01/2017       231,725  
  10,000    
Offshore Logistics Incorporated
     6.13       06/15/2013       10,102  
  125,000    
PHI Incorporated††
     8.63       10/15/2018       125,938  
  10,000    
Pride International Incorporated
     8.50       06/15/2019       11,400  
       
 
                        
       
 
                     1,114,465  
       
 
                      
       
 
                        
Oil, Gas & Consumable Fuels: 3.65%                        
  255,000    
Chesapeake Energy Corporation
     9.50       02/15/2015       285,600  
  5,000    
Chesapeake Midstream Partner LP
     0.00               142,500  
  50,000    
Coffeyville Resources††
     9.00       04/01/2015       53,250  
  100,000    
Coffeyville Resources††
     10.88       04/01/2017       106,000  
  20,000    
Connacher Oil & Gas Limited††
     11.75       07/15/2014       21,500  
  55,000    
Connacher Oil & Gas Limited††
     10.25       12/15/2015       54,175  
  165,000    
Consol Energy Incorporated††
     8.25       04/01/2020       178,613  
  45,000    
El Paso Corporation††
     6.50       09/15/2020       46,490  
  100,000    
El Paso Corporation
     7.80       08/01/2031       104,142  
  90,000    
El Paso Corporation
     7.42       02/15/2037       88,617  
  75,000    
El Paso Corporation Series MTN
     7.75       01/15/2032       78,150  
  200,000    
Energy Transfer Equity
     7.50       10/15/2020       207,000  
  50,000    
Ferrellgas LP††
     6.50       05/01/2021       49,250  
  75,000    
Ferrellgas Partners LP
     9.13       10/01/2017       82,500  
  65,000    
Forest Oil Corporation
     8.50       02/15/2014       70,525  
  95,000    
Forest Oil Corporation
     7.25       06/15/2019       96,900  
  220,000    
Holly Corporation
     9.88       06/15/2017       239,250  
  55,000    
Newfield Exploration Company
     6.88       02/01/2020       57,475  
  390,000    
Peabody Energy Corporation
     7.88       11/01/2026       427,050  
  10,000    
Penn Virginia Corporation
     10.38       06/15/2016       11,000  
  60,000    
Petrohawk Energy Corporation
     10.50       08/01/2014       67,650  
  95,000    
Petrohawk Energy Corporation
     7.88       06/01/2015       97,850  
  145,000    
Pioneer Natural Resource Company
     7.50       01/15/2020       161,761  
  325,000    
Plains Exploration & Production Company
     8.63       10/15/2019       354,250  
  25,000    
Regency Energy Partners
     6.88       12/01/2018       25,250  
  250,000    
Sabine Pass LNG LP
     7.25       11/30/2013       240,625  
  100,000    
Sabine Pass LNG LP
     7.50       11/30/2016       92,250  
  290,000    
Sandridge Energy Incorporated
     8.75       01/15/2020       292,900  
  55,000    
Stallion Oilfield Holdings Incorporated††
     10.50       02/15/2015       57,475  
  125,000    
Tesoro Corporation
     7.50       07/17/2012       124,495  
  90,000    
Tesoro Corporation
     9.75       06/01/2019       99,000  
       
 
                        
       
 
                     4,013,493  
       
 
                      
       
 
                        
Financials: 6.52%                        
       
 
                        
Capital Markets: 0.22%                        
  68,000    
E*TRADE Financial Corporation
     12.50       11/30/2017       78,370  
  100,000    
Nuveen Investments Incorporated
     10.50       11/15/2015       99,625  
  70,000    
Penson Worldwide Incorporated††
     12.50       05/15/2017       63,700  
       
 
                        
       
 
                     241,695  
       
 
                      
       
 
                        
Commercial Banks: 1.36%                        
  215,000    
CapitalSource Incorporated††
     12.75       07/15/2014       258,000  
  1,025,000    
Citigroup Incorporated
     7.00       05/01/2013       1,026,281  
The Portfolio of Investments should be read in conjunction with the Financial Statements and Notes to Financial Statements which are included in the Fund’s audited Annual Report and Semi-Annual Report. These reports include additional information about the Fund’s security valuation policies and about certain security types invested in by the Fund.

2

 

     
WELLS FARGO ADVANTAGE UTILITIES AND HIGH INCOME FUND
  PORTFOLIO OF INVESTMENTS — November 30, 2010 (UNAUDITED)
                                 
Principal     Security Name   Interest Rate     Maturity Date     Value  
Commercial Banks (continued)                        
$ 200,000    
Provident Funding Association††
     10.25 %     04/15/2017     $ 206,500  
       
 
                        
       
 
                     1,490,781  
       
 
                      
       
 
                        
Consumer Finance: 2.75%                        
  125,000    
American General Finance Corporation
     5.40       12/01/2015       97,500  
  25,000    
American General Finance Corporation
     6.50       09/15/2017       19,625  
  125,000    
American General Finance Corporation
     6.90       12/15/2017       99,063  
  75,000    
Blue Acquisition Sub Incorporated††
     9.88       10/15/2018       78,563  
  125,000    
Calpine Construction Finance Corporation††
     8.00       06/01/2016       131,563  
  130,000    
Clearwire Communications Finance Corporation††
     12.00       12/01/2015       137,638  
  6,000    
GMAC LLC
     6.88       09/15/2011       6,143  
  146,000    
GMAC LLC
     6.88       08/28/2012       150,745  
  36,000    
GMAC LLC
     6.75       12/01/2014       36,810  
  144,801    
Homer City Funding LLC
     8.73       10/01/2026       132,493  
  75,000    
International Lease Finance Corporation††
     8.63       09/15/2015       79,125  
  140,000    
International Lease Finance Corporation
     4.75       01/13/2012       139,650  
  275,000    
International Lease Finance Corporation
     5.30       05/01/2012       274,656  
  50,000    
International Lease Finance Corporation Series MTN
     5.75       06/15/2011       50,125  
  420,000    
JBS USA Finance Incorporated
     11.63       05/01/2014       489,300  
  75,000    
Nielsen Finance LLC Company
     11.50       05/01/2016       85,500  
  25,000    
Nielsen Finance LLC Company††
     7.75       10/15/2018       25,438  
  285,000    
Sprint Capital Corporation
     8.38       03/15/2012       299,963  
  120,000    
Sprint Capital Corporation
     6.90       05/01/2019       114,900  
  675,000    
Sprint Capital Corporation
     6.88       11/15/2028       573,750  
       
 
                        
       
 
                     3,022,550  
       
 
                      
       
 
                        
Diversified Financial Services: 1.28%                        
  825,000    
Ally Financial Incorporated
     8.30       02/12/2015       868,313  
  50,000    
Dunkin Finance Corporation††
     9.63       12/01/2018       50,313  
  313,000    
Leucadia National Corporation
     8.13       09/15/2015       339,605  
  175,000    
Nuveen Investments
     5.50       09/15/2015       146,344  
       
 
                        
       
 
                     1,404,575  
       
 
                      
       
 
                        
Insurance: 0.14%                        
  100,000    
Emigrant Bancorp Incorporated††
     6.25       06/15/2014       83,287  
  75,000    
Hub International Holdings Incorporated 144a††
     10.25       06/15/2015       75,000  
       
 
                        
       
 
                     158,287  
       
 
                      
       
 
                        
Real Estate Investment Trusts (REIT): 0.77%                        
  565,000    
Dupont Fabros Technology Incorporated
     8.50       12/15/2017       611,613  
  30,000    
Host Marriott Corporation
     9.00       05/15/2017       33,375  
  100,000    
Omega Healthcare Investors Incorporated††
     6.75       10/15/2022       99,750  
  90,000    
Ventas Incorporated
     9.00       05/01/2012       95,572  
       
 
                        
       
 
                     840,310  
       
 
                      
       
 
                        
Health Care: 1.12%                        
       
 
                        
Health Care Equipment & Supplies: 0.18%                        
  60,000    
Biomet Incorporated
     10.38       10/15/2017       65,400  
  100,000    
Biomet Incorporated
     11.63       10/15/2017       110,250  
  25,000    
Cooper Companies Incorporated
     7.13       02/15/2015       25,625  
       
 
                        
       
 
                     201,275  
       
 
                      
       
 
                        
Health Care Providers & Services: 0.82%                        
  120,000    
Apria Healthcare Group I††
     11.25       11/01/2014       130,500  
The Portfolio of Investments should be read in conjunction with the Financial Statements and Notes to Financial Statements which are included in the Fund’s audited Annual Report and Semi-Annual Report. These reports include additional information about the Fund’s security valuation policies and about certain security types invested in by the Fund.

3

 

PORTFOLIO OF INVESTMENTS — November 30, 2010 (UNAUDITED)
UTILITIES AND HIGH INCOME FUND
                                 
Principal     Security Name   Interest Rate     Maturity Date     Value  
Health Care Providers & Services (continued)                        
$ 400,000    
HCA Incorporated
     9.25 %     11/15/2016     $ 428,000  
  129,000    
HCA Incorporated
     9.63       11/15/2016       137,869  
  25,000    
Healthsouth Corporation
     7.25       10/01/2018       25,438  
  25,000    
Healthsouth Corporation
     7.75       09/15/2022       25,719  
  50,000    
Omnicare Incorporated
     6.88       12/15/2015       50,500  
  100,000    
Sabra Health Care Corporation††
     8.13       11/01/2018       101,000  
       
 
                      
       
 
                        
       
 
                     899,026  
       
 
                      
       
 
                        
Life Sciences Tools & Services: 0.05%                        
  50,000    
Community Health Systems Incorporated Series WI
     8.88       07/15/2015       52,313  
       
 
                      
       
 
                        
Pharmaceuticals: 0.07%                        
  25,000    
Mylan Incorporated††
     6.00       11/15/2018       24,375  
  25,000    
Mylan Incorporated††
     7.63       07/15/2017       26,500  
  25,000    
Mylan Incorporated††
     7.88       07/15/2020       26,656  
       
 
                        
       
 
                     77,531  
       
 
                      
       
 
                        
Industrials: 2.88%                        
       
 
                        
Aerospace & Defense: 1.20%                        
  225,000    
Alliant Techsystems Incorporated
     6.75       04/01/2016       228,375  
  50,000    
Digitalglobe Incorporated
     10.50       05/01/2014       56,500  
  55,000    
Geoeye Incorporated††
     9.63       10/01/2015       61,600  
  160,000    
Hexcel Corporation
     6.75       02/01/2015       162,400  
  130,000    
Kratos Defense & Security††
     10.00       06/01/2017       145,113  
  216,000    
L-3 Communications Holdings Incorporated
     5.88       01/15/2015       220,050  
  360,000    
L-3 Communications Holdings Incorporated
     6.38       10/15/2015       370,800  
  70,000    
Wyle Services Corporation††
     10.50       04/01/2018       68,950  
       
 
                        
       
 
                     1,313,788  
       
 
                      
       
 
                        
Commercial Services & Supplies: 0.97%                        
  25,000    
Brickman Group Holdings††
     9.13       11/01/2018       25,313  
  220,000    
Casella Waste Systems Incorporated
     11.00       07/15/2014       239,800  
  60,000    
Corrections Corporation of America
     6.25       03/15/2013       60,300  
  95,000    
Corrections Corporation of America
     7.75       06/01/2017       103,550  
  100,000    
Geo Group Incorporated
     7.75       10/15/2017       106,000  
  5,000    
Interface Incorporated
     11.38       11/01/2013       6,138  
  155,000    
Iron Mountain Incorporated
     8.38       08/15/2021       169,725  
  75,000    
Kar Holdings Incorporated ±
     4.29       05/01/2014       69,750  
  25,000    
Kar Holdings Incorporated
     10.00       05/01/2015       26,438  
  150,000    
NCO Group Incorporated
     11.88       11/15/2014       102,000  
  155,000    
SGS International Incorporated
     12.00       12/15/2013       159,456  
       
 
                        
       
 
                     1,068,470  
       
 
                      
       
 
                        
Construction & Engineering: 0.18%                        
  200,000    
GCI Incorporated
     7.25       02/15/2014       203,250  
       
 
                      
       
 
                        
Industrial Conglomerates: 0.21%                        
  215,000    
Otter Tail Corporation
     9.00       12/15/2016       230,050  
       
 
                      
       
 
                        
Machinery: 0.27%                        
  55,000    
Cleaver-Brooks Incorporated††
     12.25       05/01/2016       58,025  
  181,050    
Commercial Vehicle Group Incorporated††
     13.00       02/15/2013       185,576  
  25,000    
Thermadyne Holdings Corporation††
     9.00       12/15/2017       25,188  
The Portfolio of Investments should be read in conjunction with the Financial Statements and Notes to Financial Statements which are included in the Fund’s audited Annual Report and Semi-Annual Report. These reports include additional information about the Fund’s security valuation policies and about certain security types invested in by the Fund.

4

 

     
WELLS FARGO ADVANTAGE UTILITIES AND HIGH INCOME FUND
  PORTFOLIO OF INVESTMENTS — November 30, 2010 (UNAUDITED)
                                 
Principal     Security Name   Interest Rate     Maturity Date     Value  
Machinery (continued)                        
$ 25,000    
Titan International Incorporated††
     7.88 %     10/01/2017     $ 26,000  
       
 
                        
       
 
                     294,789  
       
 
                      
       
 
                        
Road & Rail: 0.05%                        
  50,000    
RailAmerica Incorporated
     9.25       07/01/2017       54,750  
       
 
                      
       
 
                        
Information Technology: 1.91%                        
       
 
                        
Communications Equipment: 0.25%                        
  155,000    
Lucent Technologies Incorporated
     6.45       03/15/2029       125,550  
  160,000    
Lucent Technologies Incorporated Series B
     2.88       06/15/2025       151,800  
       
 
                        
       
 
                     277,350  
       
 
                      
       
 
                        
Electronic Equipment & Instruments: 1.11%                        
  105,000    
Intcomex Incorporated††
     13.25       12/15/2014       111,431  
  620,000    
Jabil Circuit Incorporated
     8.25       03/15/2018       706,800  
  160,000    
Kemet Corporation††
     10.50       05/01/2018       171,200  
  50,000    
Sungard Data Systems Incorporated††
     7.38       11/15/2018       49,500  
  50,000    
Sungard Data Systems Incorporated††
     7.63       11/15/2020       50,000  
  115,000    
Viasystem Group Incorporated††
     12.00       01/15/2015       128,800  
       
 
                        
       
 
                     1,217,731  
       
 
                      
       
 
                        
Internet Software & Services: 0.25%                        
  95,000    
Equinix Incorporated
     8.13       03/01/2018       99,513  
  150,000    
Terremark Worldwide Incorporated
     12.00       06/15/2017       169,500  
       
 
                        
       
 
                     269,013  
       
 
                      
       
 
                        
IT Services: 0.30%                        
  175,000    
SunGard Data Systems Incorporated
     10.25       08/15/2015       181,563  
  70,000    
Unisys Corporation††
     12.75       10/15/2014       83,475  
  55,000    
Unisys Corporation††
     14.25       09/15/2015       66,138  
       
 
                        
       
 
                     331,176  
       
 
                      
       
 
                        
Materials: 1.91%                        
       
 
                        
Chemicals: 0.68%                        
  40,000    
CPG International Incorporated ±
     7.50       07/01/2012       39,750  
  140,000    
CPG International Incorporated
     10.50       07/01/2013       142,275  
  140,000    
Huntsman International LLC
     5.50       06/30/2016       135,450  
  75,000    
LBI Escrow Corporation††
     8.00       11/01/2017       80,906  
  240,241    
Lyondell Chemical Company
     11.00       05/01/2018       267,268  
  50,000    
Solutia Incorporated
     7.88       03/15/2020       53,875  
  25,000    
Vertellus Specialties††
     9.38       10/01/2015       26,063  
       
 
                        
       
 
                     745,587  
       
 
                      
       
 
                        
Construction Materials: 0.29%                        
  150,000    
CPG International Incorporated††
     10.63       09/01/2014       159,000  
  145,000    
Headwaters Incorporated
     11.38       11/01/2014       156,056  
       
 
                        
       
 
                     315,056  
       
 
                      
       
 
                        
Containers & Packaging: 0.36%                        
  280,000    
Exopack Holding Corporpation
     11.25       02/01/2014       288,400  
The Portfolio of Investments should be read in conjunction with the Financial Statements and Notes to Financial Statements which are included in the Fund’s audited Annual Report and Semi-Annual Report. These reports include additional information about the Fund’s security valuation policies and about certain security types invested in by the Fund.

5

 

PORTFOLIO OF INVESTMENTS — November 30, 2010 (UNAUDITED)
UTILITIES AND HIGH INCOME FUND
                                 
Principal     Security Name   Interest Rate     Maturity Date     Value  
Containers & Packaging (continued)                        
$ 100,000    
Graham Packaging Company Incorporated
     9.88 %     10/15/2014     $ 103,500  
       
 
                        
       
 
                     391,900  
       
 
                      
       
 
                        
Metals & Mining: 0.30%                        
  295,000    
Freeport-McMoRan Copper & Gold Incorporated
     8.38       04/01/2017       329,515  
       
 
                      
       
 
                        
Paper & Forest Products: 0.28%                        
  70,000    
Clearwater Paper Corporation
     10.63       06/15/2016       80,325  
  75,000    
Georgia-Pacific Corporation††
     7.00       01/15/2015       77,250  
  125,000    
Georgia-Pacific Corporation
     8.88       05/15/2031       153,750  
       
 
                        
       
 
                     311,325  
       
 
                      
       
 
                        
Telecommunication Services: 2.99%                        
       
 
                        
Diversified Telecommunication Services: 1.88%                        
  35,000    
Cincinnati Bell Incorporated
     8.25       10/15/2017       33,950  
  475,000    
Citizens Communications Company
     7.88       01/15/2027       465,500  
  140,000    
Frontier Communications Corporation
     8.25       05/01/2014       154,700  
  220,000    
Frontier Communications Corporation
     8.25       04/15/2017       242,000  
  60,000    
Frontier Communications Corporation
     8.13       10/01/2018       66,000  
  350,000    
Qwest Corporation
     8.88       03/15/2012       380,625  
  20,000    
Qwest Corporation
     7.63       08/03/2021       20,500  
  180,000    
Qwest Corporation
     7.50       06/15/2023       178,200  
  125,000    
U.S. West Communications Incorporated
     7.25       09/15/2025       134,688  
  120,000    
U.S. West Communications Incorporated
     7.13       11/15/2043       115,500  
  265,000    
Windstream Corporation
     7.88       11/01/2017       278,250  
       
 
                        
       
 
                     2,069,913  
       
 
                      
       
 
                        
Wireless Telecommunication Services: 1.11%                        
  50,000    
Allbritton Communication
     8.00       05/15/2018       49,625  
  75,000    
Cricket Communications Incorporated Series I
     7.75       05/15/2016       76,688  
  10,000    
Crown Castle International Corporation
     7.13       11/01/2019       10,825  
  75,000    
Intelsat Corporation
     9.25       06/15/2016       78,938  
  375,000    
Intelsat Subsidiary Holding Company Limited
     8.50       01/15/2013       375,000  
  150,000    
MetroPCS Communications Incorporated
     6.63       11/15/2020       142,875  
  25,000    
Metropcs Wireless Incorporated
     7.88       09/01/2018       25,906  
  475,000    
Sprint Nextel Corporation Series D
     7.38       08/01/2015       458,375  
       
 
                        
       
 
                     1,218,232  
       
 
                      
       
 
                        
Utilities: 3.05%                        
       
 
                        
Electric Utilities: 2.08%                        
  794,000    
Aquila Incorporatedºº
     11.88       07/01/2012       907,605  
  110,000    
Edison Misson Energy
     7.20       05/15/2019       84,700  
  46,751    
Energy Future Holdings Corporation
     12.00       11/01/2017       28,986  
  438,432    
Mirant Mid-Atlantic LLC Series C
     10.06       12/30/2028       488,852  
  260,000    
Mirant North America LLC
     7.38       12/31/2013       263,900  
  150,000    
NRG Energy Incorporated
     7.38       02/01/2016       150,750  
  175,000    
NRG Energy Incorporated
     7.38       01/15/2017       176,750  
  185,000    
NRG Energy Incorporated
     8.50       06/15/2019       187,775  
       
 
                        
       
 
                     2,289,318  
       
 
                      
       
 
                        
Independent Power Producers & Energy Traders: 0.97%                        
  95,000    
AES Corporation
     8.88       02/15/2011       95,713  
  250,000    
Calpine Construction Finance Corporation††
     7.25       10/15/2017       248,750  
  190,000    
Dynegy Holding Incorporated
     7.63       10/15/2026       114,000  
The Portfolio of Investments should be read in conjunction with the Financial Statements and Notes to Financial Statements which are included in the Fund’s audited Annual Report and Semi-Annual Report. These reports include additional information about the Fund’s security valuation policies and about certain security types invested in by the Fund.

6

 

     
WELLS FARGO ADVANTAGE UTILITIES AND HIGH INCOME FUND
  PORTFOLIO OF INVESTMENTS — November 30, 2010 (UNAUDITED)
                                 
Principal     Security Name   Interest Rate     Maturity Date     Value  
Independent Power Producers & Energy Traders (continued)                        
$ 108,798    
Reliant Energy Incorporated
     9.24 %     07/02/2017     $ 117,502  
  10,000    
Reliant Energy Incorporated
     9.68       07/02/2026       10,675  
  50,000    
RRI Energy Incorporated
     7.63       06/15/2014       50,000  
  391,000    
RRI Energy Incorporated
     6.75       12/15/2014       396,865  
  30,000    
RRI Energy Incorporated
     7.88       06/15/2017       27,300  
       
 
                        
       
 
                     1,060,805  
       
 
                      
       
 
                        
Total Corporate Bonds and Notes (Cost $30,858,218)                     32,743,215  
       
 
                      
       
 
                        
Yankee Corporate Bonds and Notes: 0.86%                        
       
 
                        
Energy: 0.43%                        
       
 
                        
Oil, Gas & Consumable Fuels: 0.43%                        
  225,000    
General Maritime Corporation
     12.00       11/15/2017       225,000  
  321,000    
Griffin Coal Mining Company Limited^††
     1.16       12/31/2049       203,033  
  60,000    
OPTI Canada Incorporated
     7.88       12/15/2014       41,250  
       
 
                        
       
 
                     469,283  
       
 
                      
       
 
                        
Financials: 0.21%                        
       
 
                        
Consumer Finance: 0.11%                        
  110,000    
Wind Acquisition Finance SA††
     11.75       07/15/2017       122,100  
       
 
                      
       
 
                        
Diversified Financial Services: 0.10%                        
  105,000    
Ship Finance International Limited
     8.50       12/15/2013       106,575  
       
 
                      
       
 
                        
Materials: 0.19%                        
       
 
                        
Metals & Mining: 0.06%                        
  55,000    
Teck Resources Limited
     10.75       05/15/2019       71,500  
       
 
                      
       
 
                        
Paper & Forest Products: 0.13%                        
  55,000    
Sappi Limited††
     6.75       06/15/2012       56,513  
  100,000    
Sappi Limited††
     7.50       06/15/2032       85,000  
       
 
                        
       
 
                     141,513  
       
 
                      
       
 
                        
Telecommunication Services: 0.03%                        
Diversified Telecommunication Services: 0.01%                        
  5,000    
Global Crossing Limited
     12.00       09/15/2015       5,625  
       
 
                      
       
 
                        
Wireless Telecommunication Services: 0.02%                        
  20,000    
Digicel Group Limited††
     12.00       04/01/2014       23,200  
       
 
                      
       
 
                        
Total Yankee Corporate Bonds and Notes (Cost $910,678)                     939,796  
       
 
                      
       
 
                        
                                 
Shares                        
Common Stocks: 65.74%                        
       
 
                        
Consumer Discretionary: 0.91%                        
       
 
                        
Media: 0.91%                        
  50,000    
Comcast Corporation Class A
                     1,000,000  
       
 
                      
The Portfolio of Investments should be read in conjunction with the Financial Statements and Notes to Financial Statements which are included in the Fund’s audited Annual Report and Semi-Annual Report. These reports include additional information about the Fund’s security valuation policies and about certain security types invested in by the Fund.

7

 

PORTFOLIO OF INVESTMENTS — November 30, 2010 (UNAUDITED)
UTILITIES AND HIGH INCOME FUND
                                 
Shares     Security Name                   Value  
Energy: 4.58%                        
       
 
                        
Oil, Gas & Consumable Fuels: 4.58%                        
  15,000    
EQT Corporation
                   $ 607,050  
  25,000    
Southwestern Energy Company
                     905,000  
  100,000    
Spectra Energy Corporation
                     2,377,000  
  50,000    
The Williams Companies Incorporated
                     1,140,500  
       
 
                        
       
 
                     5,029,550  
       
 
                      
       
 
                        
Financials: 4.17%                        
       
 
                        
Consumer Finance: 4.17%                        
  10,000    
MasterCard Incorporated
                     2,370,300  
  30,000    
Visa Incorporated Class A
                     2,215,500  
       
 
                        
       
 
                     4,585,800  
       
 
                      
       
 
                        
Industrials: 0.11%                        
       
 
                        
Construction & Engineering: 0.11%                        
  9,000    
Ameresco Incorporated Class A
                     116,550  
       
 
                      
       
 
                        
Information Technology: 0.18%                        
       
 
                        
IT Services: 0.18%                        
  15,000    
Convergys Corporation
                     193,350  
       
 
                      
       
 
                        
Telecommunication Services: 7.03%                        
       
 
                        
Diversified Telecommunication Services: 2.32%                        
  16,000    
BCE Incorporated
                     542,080  
  40,000    
Shenandoah Telecommunications Company(i)
                     699,600  
  100,000    
Windstream Corporation
                     1,304,000  
       
 
                        
       
 
                     2,545,680  
       
 
                      
       
 
                        
Wireless Telecommunication Services: 4.71%                        
  368,250    
Portugal Telecom SGPS SA ADR
                     4,702,553  
  12,000    
Vivo Participacoes SA ADR
                     346,440  
  5,000    
Vodafone Group plc ADR
                     125,300  
       
 
                        
       
 
                     5,174,293  
       
 
                      
       
 
                        
Utilities: 48.76%                        
       
 
                        
Electric Utilities: 26.50%                        
  600    
American Electric Power Company Incorporated
                     21,360  
  50,000    
CenterPoint Energy Incorporated
                     781,500  
  500    
CH Energy Group Incorporated
                     23,320  
  200    
Chesapeake Utilities Corporation
                     7,518  
  10,000    
China Hydroelectric Company ADR
                     74,900  
  75,000    
DPL Incorporated
                     1,899,750  
  500    
Duke Energy Corporation
                     8,775  
  2,000    
Edison International
                     73,880  
  1,000    
Entergy Corporation
                     71,240  
  70,000    
Exelon Corporation
                     2,755,900  
  25,000    
FirstEnergy Corporation
                     877,750  
  150,000    
Great Plains Energy Incorporated
                     2,797,500  
The Portfolio of Investments should be read in conjunction with the Financial Statements and Notes to Financial Statements which are included in the Fund’s audited Annual Report and Semi-Annual Report. These reports include additional information about the Fund’s security valuation policies and about certain security types invested in by the Fund.

8

 

     
WELLS FARGO ADVANTAGE UTILITIES AND HIGH INCOME FUND
  PORTFOLIO OF INVESTMENTS — November 30, 2010 (UNAUDITED)
                                 
Shares     Security Name                   Value  
Electric Utilities (continued)                        
  200,000    
Hawaiian Electric Industries Incorporated
                   $ 4,378,000  
  36,000    
ITC Holdings Corporation
                     2,179,800  
  70,000    
Nextera Energy Incorporated
                     3,543,400  
  150,000    
Northeast Utilities
                     4,665,000  
  1,000    
NSTAR
                     41,400  
  75,000    
NV Energy Incorporated
                     1,026,750  
  100    
Pepco Holdings Incorporated
                     1,835  
  75,000    
Portland General Electric Company
                     1,587,750  
  400    
Progress Energy Incorporated
                     17,476  
  200    
South Jersey Industries Incorporated
                     10,238  
  60,000    
The Southern Company
                     2,263,200  
       
 
                        
       
 
                     29,108,242  
       
 
                      
       
 
                        
Gas Utilities: 7.95%                        
  25,000    
El Paso Corporation
                     337,250  
  500    
MDU Resources Group Incorporated
                     10,220  
  40,000    
National Fuel Gas Company
                     2,534,400  
  200    
New Jersey Resources Corporation
                     8,622  
  100,000    
Niska Gas Storage Partners
                     1,998,000  
  48,500    
ONEOK Incorporated
                     3,841,685  
       
 
                        
       
 
                     8,730,177  
       
 
                      
       
 
                        
Independent Power Producers & Energy Traders: 2.58%                        
  100,000    
Constellation Energy Group Incorporated
                     2,836,000  
       
 
                      
       
 
                        
Multi-Utilities: 6.97%                        
  300    
Dominion Resources Incorporated
                     12,459  
  96,000    
PG&E Corporation
                     4,505,280  
  50,000    
Public Service Enterprise Group Incorporated
                     1,541,500  
  19,900    
Sempra Energy
                     996,791  
  30,000    
TECO Energy Incorporated
                     502,500  
  1,500    
Wisconsin Energy Corporation
                     90,330  
       
 
                        
       
 
                     7,648,860  
       
 
                      
       
 
                        
Water Utilities: 4.76%                        
  50,000    
American Water Works Company Incorporated
                     1,225,500  
  25,000    
Middlesex Water Company
                     436,500  
  130,000    
Pennichuck Corporation
                     3,568,500  
       
 
                        
       
 
                     5,230,500  
       
 
                      
       
 
                        
Total Common Stocks (Cost $65,543,441)                     72,199,002  
       
 
                      
       
 
                        
Preferred Stocks: 12.08%                        
       
 
                        
Utilities: 12.08%           Yield        
Electric Utilities: 7.93%                        
  50,000    
Great Plains Energy Incorporated
             4.62 %     3,087,500  
  136,613    
Interstate Power & Light Company
             3.87       3,952,214  
  21,082    
Union Electric Company
             3.21       1,676,019  
       
 
                        
       
 
                     8,715,733  
       
 
                      
The Portfolio of Investments should be read in conjunction with the Financial Statements and Notes to Financial Statements which are included in the Fund’s audited Annual Report and Semi-Annual Report. These reports include additional information about the Fund’s security valuation policies and about certain security types invested in by the Fund.

9

 

PORTFOLIO OF INVESTMENTS — November 30, 2010 (UNAUDITED)
UTILITIES AND HIGH INCOME FUND
                                 
Shares     Security Name   Yield             Value  
Multi-Utilities: 4.15%                        
  165,000    
Scana Corporation
     3.11             $ 4,554,000  
       
 
                      
       
 
                        
Total Preferred Stocks (Cost $12,828,379)                     13,269,733  
       
 
                      
       
 
                        
Warrants: 0.00%                        
Utilities: 0.00% Expiration date              
Electric Utilities: 0.00%                        
  10,000    
China Hydroelectric Company ADR
     01/25/2014               4,600  
       
 
                        
Total Warrants (Cost $12,000)                     4,600  
       
 
                      
       
 
                        
Investment Companies: 0.10%                        
  5,123    
Dreyfus High Yield Strategies Fund Incorporated
                     23,156  
  1,700    
Eaton Vance Limited Duration Income Trust
                     27,506  
  1,624    
LMP Corporate Loan Fund Incorporated
                     18,676  
  3,673    
New America High Income Fund Incorporated
                     38,309  
       
 
                        
Total Investment Companies (Cost $53,436)  
 
                 107,647  
       
 
                      
                                 
Principal           Interest Rate     Maturity Date          
Term Loans: 2.47%                        
$ 148,875    
Blackstone Group LP
     7.75 %     11/02/2014       150,364  
  18,282    
Capital Automotive REIT
     1.75       12/16/2010       18,206  
  248,476    
Capital Automotive REIT
     2.50       12/14/2012       246,302  
  199,551    
Coinmach Corporation <
     3.00       11/20/2014       172,712  
  33,023    
Federal Mogul Corporation
     1.94       12/29/2014       29,650  
  16,849    
Federal Mogul Corporation
     1.94       12/28/2015       15,128  
  75,000    
First Data Corporation
     2.75       09/24/2014       67,406  
  100,000    
First Data Corporation <
     2.75       09/24/2014       89,857  
  125,000    
First Data Corporation
     2.75       09/24/2014       112,379  
  74,194    
Gray Television Incorporated
     3.50       12/31/2014       72,061  
  124,807    
Local TV Finance LLC
     2.00       05/07/2013       118,358  
  101,846    
Merisant Company
     4.50       01/08/2014       94,590  
  75,000    
NCO Group Incorporated
     5.00       11/15/2013       71,775  
  365,000    
Newsday LLC
     10.50       08/01/2013       388,269  
  23,886    
Panolam Industries International
     6.00       12/31/2013       21,946  
  18,367    
Realogy Corporation
     3.00       10/10/2013       16,939  
  134,745    
Realogy Corporation First Lien
     3.00       10/10/2013       124,269  
  95,000    
Sugarhouse HSP Gaming Properties Limited Partnership
     8.25       09/23/2014       95,990  
  1,048,779    
TXU Energy Company LLC
     3.50       10/10/2014       805,074  
       
 
                        
Total Term Loans (Cost $2,698,194)                     2,711,275  
       
 
                      
       
 
                        
Shares  
 
                        
Escrow Shares: 0.00%                        
  5,000,000    
Mirant Corporation Escrow(i)(a)†
                     0  
       
 
                        
Total Escrow Shares (Cost $0)                     0  
       
 
                      
Short-Term Investments: 9.49%                        
       
 
                        
Investment Companies: 9.49%                        
  10,421,150    
Wells Fargo Advantage Cash Investment Money Market Fund(u)(l)
                     10,421,150  
Total Short-Term Investments (Cost $10,421,150)                     10,421,150  
       
 
                      
The Portfolio of Investments should be read in conjunction with the Financial Statements and Notes to Financial Statements which are included in the Fund’s audited Annual Report and Semi-Annual Report. These reports include additional information about the Fund’s security valuation policies and about certain security types invested in by the Fund.

10

 

     
WELLS FARGO ADVANTAGE UTILITIES AND HIGH INCOME FUND
  PORTFOLIO OF INVESTMENTS — November 30, 2010 (UNAUDITED)
                                 
Total Investments in Securities (Cost $123,325,496)*
     120.55 %                     132,396,418  
Other Assets and Liabilities, Net
     (20.55 )                     (22,569,159 )
 
                            
 
                                
Total Net Assets
     100.00 %                   $ 109,827,259  
 
                            
 
(i)   Illiquid security.
 
(u)   Rate shown is the 7-day annualized yield at period end.
 
(l)   Investment in an affiliate.
 
ºº   The rate shown is the stated rate at the current period end.
 
(a)   Security is fair valued by the Management Valuation Team, and in certain instances by the Board of Trustees, in accordance with procedures approved by the Board of Trustees.
 
†   Non-income earning securities.
 
^   Zero coupon security. Rate represents yield to maturity.
 
±   Variable rate investments.
 
††   Securities that may be resold to “qualified institutional buyers” under Rule 144A or securities offered pursuant to Section 4(2) of the Securities Act of 1933, as amended.
 
<   All or portion of the position represents an unfunded loan commitment.
 
*   Cost for federal income tax purposes is $122,339,339 and net realized appreciation (depreciation) consist of:
         
Gross unrealized appreciation
   $ 13,136,826  
Gross unrealized depreciation
     (3,079,747 )
 
      
Net unrealized appreciation
   $ 10,057,079  
The Portfolio of Investments should be read in conjunction with the Financial Statements and Notes to Financial Statements which are included in the Fund’s audited Annual Report and Semi-Annual Report. These reports include additional information about the Fund’s security valuation policies and about certain security types invested in by the Fund.

11

 

WELLS FARGO ADVANTAGE UTILITIES AND HIGH INCOME FUND
NOTES TO PORTFOLIO OF INVESTMENTS NOVEMBER 30, 2010 (UNAUDITED)
The Fund’s portfolio of investments as of the date on the cover of this report has not been audited. This report is provided for the general information of the Fund’s shareholders. For more information regarding the Fund and its holdings, please see the Fund’s most recent prospectus and annual report.
Securities valuation
Investments in securities are valued each business day as of the close of regular trading on the New York Stock Exchange, which is usually 4:00 p.m. (Eastern Time). Securities which are traded on a national or foreign securities exchange are valued at the last reported sales price, except that securities listed on The Nasdaq Stock Market, Inc. (“Nasdaq”) are valued at the Nasdaq Official Closing Price (“NOCP”), and if no NOCP is available, then at the last reported sales price. If no sales price is shown on the Nasdaq, the bid price will be used. In the absence of any sale of securities listed on the Nasdaq, and in the case of other securities, including U.S. Government obligations, but excluding debt securities maturing in 60 days or less, the price will be deemed “stale” and the valuations will be determined in accordance with the Fund’s Fair Valuation Procedures.
Securities denominated in foreign currencies are translated into U.S. dollars using the closing rates of exchange in effect on the day of valuation.
Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore may not fully reflect trading or events that occur after the close of the principal exchange in which the foreign investments are traded but before the close of the New York Stock Exchange. If such trading or events are expected to materially affect the value of the investments, then those investments are fair valued following procedures approved by the Board of Trustees. These procedures take into account multiple factors including movements in U.S. securities markets after foreign exchanges close. Depending on market activity, such fair valuations may be frequent. Such fair value pricing may result in NAVs that are higher or lower than NAVs based on the closing price or latest quoted bid price.
Certain fixed income securities with maturities exceeding 60 days are valued based on available market quotations received from an independent pricing service approved by the Fund’s Board of Trustees which may utilize both transaction data and market information such as yield, prices of securities of comparable quality, coupon rate, maturity, type of issue, trading characteristics and other market data. If valuations are not available from the pricing service or values received are deemed not representative of market value, values will be obtained from a third party broker-dealer or determined based on the Fund’s Fair Value Procedures.
Investments in open-end mutual funds and non-registered investment companies are generally valued at net asset value.
Certain investments which are not valued using any of the methods discussed above, are valued at their fair value, as determined by procedures established in good faith and approved by the Board of Trustees.
The valuation techniques used by the Fund to measure fair value are consistent with the market approach, income approach and/or cost approach, where applicable, for each security type.
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 to cover its obligation by confirming the availability of qualifying assets having a value sufficient to make payment for the securities purchased. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

 

 

Term loans
The Fund may invest in term loans. The loans are marked-to-market daily and the Fund begins earning interest when the loans are funded. The loans pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. The Fund assumes the credit risk of the borrower and there could be potential loss to the Fund in the event of default by the borrower.
As of November 30, 2010, the Fund had unfunded loan commitments of $113,313.
Valuation hierarchy
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 securities are not necessarily an indication of the risk associated with investing in those securities.
As of November 30, 2010, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:
                                 
            Significant              
            Other     Significant        
            Observable     Unobservable        
    Quoted Prices     Inputs     Inputs        
Investments in Securities   (Level 1)     (Level 2)     (Level 3)     Total  
 
Equity securities
                                
Common stocks
   $ 72,199,002     $ 0     $ 0     $ 72,199,002  
Preferred stocks
     11,593,714       1,676,019       0       13,269,733  
Investment companies
     107,647       0       0       107,647  
Warrants
     0       4,600       0       4,600  
Corporate bonds and notes
     0       32,126,186       617,029       32,743,215  
Term loans
     0       2,711,275       0       2,711,275  
Yankee corporate bonds and notes
     0       939,796       0       939,796  
Short-term investments
                                
Investment companies
     10,421,150       0       0       10,421,150  
     
 
   $ 94,321,513     $ 37,457,876     $ 617,029     $ 132,396,418  
     

 

 

The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value:
         
    Corporate bonds
and notes		  
Balance as of August 31, 2010
   $ 0  
Realized gains (losses)
     0  
Change in unrealized gains (losses)
     0  
Purchases
     0  
Sales
     0  
Transfers into Level 3
     617,029  
Transfers out of Level 3
     0  
 
      
Balance as of November 30, 2010
   $ 617,029  
 
      
 
        
Change in unrealized gains (losses) included in earnings relating to securities still held at November 30, 2010
   $ 0  
 
      

 

 

ITEM 2. CONTROLS AND PROCEDURES
(a) The President and Treasurer have concluded that the Wells Fargo Advantage Utilities and High 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 registrant’s last fiscal quarter that has materially affected or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

 

SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
         
  Wells Fargo Advantage Utilities and High Income Fund
 		  
  By:   /s/ Karla M. Rabusch    
    Karla M. Rabusch   
    President  
   
  Date: January 26, 2011  
     Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
         
  Wells Fargo Advantage Utilities and High Income Fund
 		  
  By:   /s/ Karla M. Rabusch    
    Karla M. Rabusch   
    President  
   
  Date: January 26, 2011  
     
  By:   /s/ Kasey L. Phillips    
    Kasey L. Phillips   
  Treasurer  
   
  Date: January 26, 2011