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Quarterly update Q2 2017 | All information is as of 6-30-17 unless otherwise indicated. Wells Fargo Discovery Fund Overview General fund information Key drivers of performance Ticker: WFDSX Portfolio managers: Michael Smith, CFA; Chris Warner, CFA Subadvisor: Wells Capital Management, Inc. Category: Small/mid-cap growth The fund outperformed its benchmark, the Russell 2500 Growth Index, for the three-month period that ended June 30, 2017. Stock selection in a variety of sectors, such as information technology (IT), consumer staples, and materials, boosted relative returns. An overweight to IT and an underweight to consumer staples also aided results. Stock selection in the financials and telecommunication services sectors detracted from results. An underweight to health care also hindered relative returns. Fund strategy Conducts a rigorous research process designed to surround the company and develop unique fundamental insights Performs a thorough analysis of a company’s current balance sheet to gain insight into its potential to execute its business model and achieve future growth objectives Surrounds companies by analyzing competitors, suppliers, and customers up and down the market-capitalization spectrum Maintains valuation targets as part of a strong sell discipline and risk management process Constructs portfolios with a unique process that includes core holdings, developing situations, and valuation opportunities Average annual total returns (%) as of 6-30-17* Discovery Fund–Inst Russell 2500™ Growth Index 3 month 5.15 Year to date 15.62 1 year 23.39 3 year 7.79 5 year 13.13 10 year 8.92 Since inception (12-31-87) 11.61 4.13 10.63 21.44 7.65 14.33 8.18 – *Returns for periods of less than one year are not annualized. Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on a fund. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Current month-end performance is available at the fund’s website, wellsfargofunds.com. Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge. The fund’s gross expense ratio is 0.87%. The fund’s net expense ratio is 0.87%. The manager has contractually committed, through 1-31-18, to waive fees and/or reimburse expenses to the extent necessary to cap the fund’s total annual fund operating expenses after fee waiver at 0.89% for the Institutional Class. Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the cap. Without these reductions, the fund’s returns would have been lower. After this time, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. The expense ratio paid by an investor is the net expense ratio or the total annual fund operating expense after fee waivers, as stated in the prospectus. QU010 08-17 1 Market and portfolio overview Continued expansion in the global economy and attractive earnings growth evident from many U.S. companies provided key catalysts for solid equitymarket gains in the second quarter. Companies with strong, sustainable growth prospects continued to lead the market after many of these stocks declined following the U.S. election in late 2016. At the outset of 2017, investors capitalized on the multiyear low valuations of many higher-growth stocks and rewarded them through the second quarter for generally strong sales and earnings. In addition, recent economic indicators, such as employment data, generally pointed to a continuation of only moderate growth in the U.S. economy. As a result, cyclically oriented stocks relying on sustained acceleration in U.S. economic activity continued to underperform stocks with more sustainable growth drivers. In our view, stocks with strong, secular-growth catalysts were rewarded for the scarcity of their robust growth potential relative to the broad U.S. equity market. We continued to position the fund with a bias toward companies with secular-growth characteristics and attractive earnings visibility. Our team has identified companies within the IT sector with promising outlooks in faster-growing areas, such as cloud-computing services, digital payments, and interactive gaming. We have continued to be especially careful in navigating the consumer discretionary sector by emphasizing companies with effective e-commerce solutions and opportunities benefiting from positive trends in value retail and spending on consumer experiences. We also have been cautious within more-cyclical sectors, such as energy and industrials, by focusing on opportunities with sustainable-growth drivers rather than on stocks that rely solely on a cyclical turn in the economy. Looking ahead, we believe the most likely scenario for the U.S. economy is a modest growth trajectory with a scarcity of companies that offer strong growth potential; this type of environment could be favorable for the companies emphasized in our investment process. (See pages 4-5 for important information.) Wells Fargo Discovery Fund Quarterly update Q2 2017 Wells Fargo Discovery Fund Quarterly attribution analysis Contributors Stock selection in the IT sector provided the largest boost to relative returns. Key contributors in IT were rewarded for strong quarterly earnings and promising outlooks influenced by strong secular catalysts, such as increased demand for cloud services and the ongoing shift to e-commerce and digital payments. CoStar Group, Inc., and Guidewire Software, Inc., which offer innovative cloudbased solutions for specific end markets, performed well, aided by strong revenues and improved profitability. CoStar expanded its dominant presence within the commercial real estate informationservices market. Guidewire experienced rapid growth through its sustained success in delivering robust software solutions to replace legacy systems in the property-and-casualty insurance industry. MercadoLibre, Inc., also performed well; the company continued to enhance its position as the e-commerce leader in Latin America. Favorable stock selection within and an underweight to consumer staples aided results in the sector. Constellation Brands, Inc., which owns some of the fastest-growing beverage brands in categories such as beer and wine, rallied after reporting robust earnings. Outperformance in the materials sector was influenced by Berry Global Group, Inc., a leading packaging company with products in multiple end markets. Berry generated strong business fundamentals that sent its stock soaring. We believe Berry can deliver robust free cash flow as it focuses on higher-margin products and reduces debt. Detractors A decline in SLM Corp. (also known as Sallie Mae), the largest private student lender, hindered results in financials. SLM reported strong fundamentals; however, some investors grew concerned about increased competition for select services. We believe SLM can continue to benefit from rapid loan growth and improved efficiencies. An underweight to the surging health care IT and biotechnology industries constrained results in the health care sector. Glaukos Corp., an ophthalmic medical technology firm, also detracted from relative returns. Glaukos reported revenues above consensus expectations but to a lesser degree compared with recent quarters. Also, a recent price increase created some uncertainty regarding the company’s near-term potential for revenue growth. We continue to have a favorable outlook for Glaukos, driven by the sizable growth opportunity for the company’s glaucoma treatments. Discovery Fund versus Russell 2500™ Grow th Index Consumer Consumer Discretionary Staples Energy Financials Health Care Industrials Info Tech Materials Real Estate Telecom Services Utilities Cash Sector weights (average % weight during the quarter) Discovery Fund 15.46 1.81 0.92 4.42 14.82 22.17 33.34 3.89 0.04 1.48 0.00 1.65 Russell 2500™ Growth Index 16.41 3.42 0.98 6.30 19.31 18.10 22.51 6.67 5.20 0.71 0.39 0.00 Over/underweight -0.95 -1.61 -0.06 -1.88 -4.49 4.07 10.83 -2.78 -5.16 0.77 -0.39 1.65 19.37 -14.37 -0.56 10.11 2.00 8.74 9.96 -4.97 -6.08 0.00 0.22 Sector returns (%) Fund sector return 1.38 Index sector return 1.56 -4.28 -21.15 2.44 9.68 1.04 6.00 5.42 3.90 12.21 6.01 0.00 Relative return -0.18 23.65 6.78 -3.00 0.43 0.96 2.74 4.54 -8.87 -18.29 -6.01 0.22 Sources: FactSet and Wells Fargo Funds Management, LLC Past performance is no guarantee of future results. Sector weights are subject to change and may have changed since the date specified. When reviewing the performance attribution of our portfolio, it is vital to remember that we construct our portfolio from the bottom up, one stock at a time. Each stock is included in the portfolio based on its own investment thesis. To help manage risk, we are aware of our sector and security weights, but we do not include a holding to obtain a sector distribution to resemble an index. Our exposure to any given sector is a result of our security selection process. 2 Wells Fargo Discovery Fund Quarterly update Q2 2017 Wells Fargo Discovery Fund Fund information Top holdings Performance (%) Stock Waste Connections, Inc. Take-Two Interactive Software, Inc. Brink's Company Berry Global Group Inc Vail Resorts, Inc. John Bean Technologies Corporation BWX Technologies, Inc. Allegion PLC Ultimate Software Group, Inc. Bright Horizons Family Solutions, Inc. % of net assets 2.96 2.12 2.10 1.89 1.84 1.83 1.82 1.81 1.78 1.74 Portfolio characteristics Weighted average market cap Weighted median market cap EPS growth (3- to 5-year forecast) P/E ratio (trailing 12-month) Turnover¹ P/B ratio P/S ratio Number of equity holdings Fund $6.30B $4.95B 15.00% 34.92x 78.22% 5.29x 2.59x 82 Russell 2500™ Growth Index $4.75B $4.17B 12.30% 26.52x – 5.05x 1.88x 1,436 Source: FactSet Fund facts Inception date Net expense ratio—Inst Assets—all share classes 12-31-87 0.87% $2,458.62M Portfolio holdings and characteristics are subject to change and may have changed since the date specified. The holdings listed should not be considered recommendations to purchase or sell a particular security. 1. Calculated based on a one-year period. High portfolio turnover may result in increased expenses and higher short-term capital gains. 3 Discovery Fund–Inst Russell 2500™ Growth Index Lipper Mid-Cap Growth Funds Average Morningstar Mid-Cap Growth Average 1 year 23.39 21.44 18.88 18.58 3 year 7.79 7.65 6.92 6.86 5 year 13.13 14.33 12.88 12.72 10 year 8.92 8.18 6.86 6.81 Rankings and ratings Morningstar total return rankings—Institutional Class (as of 6-30-17) Morningstar Category: Mid-cap growth 1 year 82 out of 626 funds 3 year 179 out of 576 funds 5 year 192 out of 502 funds 10 year 42 out of 370 funds Overall Morningstar Rating™ The Overall Morningstar Rating, a weighted average of the 3-, 5-, and 10-year (if applicable) ratings, is out of 576 funds in the mid-cap growth category, based on risk-adjusted returns as of 6-30-17. Performance and volatility measures 2 Alpha Beta Sharpe ratio Standard deviation R-squared Information ratio Upside capture Downside capture Tracking error Fund 0.69 0.90 0.58 13.08% 0.93 0.04 86.17% 86.88% 3.81% Past performance is no guarantee of future results. 2. Calculated for the Institutional Class based on a three-year period. Relative measures are compared with the fund’s benchmark. Wells Fargo Discovery Fund Quarterly update Q2 2017 Wells Fargo Discovery Fund Share class availability Share class Ticker Gross expense ratio (%) Net expense ratio (%) Contractual expense waiver date A WFDAX 1.20 1.20 1-31-18 C WDSCX 1.95 1.95 1-31-18 Admin WFDDX 1.12 1.12 1-31-18 Inst WFDSX 0.87 0.87 1-31-18 R6 WFDRX 0.77 0.77 1-31-18 The manager has contractually committed to waive fees and/or reimburse expenses to the extent necessary to cap the fund’s total annual fund operating expenses after fee waiver at 1.22% (A), 1.97 (C), 1.15 (Admin), 0.89 (I), and 0.84 (R6). Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the cap. Without these reductions, the fund’s returns would have been lower. After this time, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. The expense ratio paid by an investor is the net expense ratio or the total annual fund operating expense after fee waivers, as stated in the prospectus. Benchmark descriptions: The Lipper averages are compiled by Lipper, Inc., an independent mutual fund research and rating service. Each Lipper average represents a universe of funds that are similar in investment objective. You cannot invest directly in a Lipper average. The Morningstar Category average is the average return for the peer group based on the returns of each individual fund within the group. The total return of the Morningstar Category average does not include the effect of sales charges. You cannot invest directly in a Morningstar Category average. The Russell 2500 Growth Index measures the performance of those Russell 2500 companies with higher price/book ratios and higher forecasted growth values. You cannot invest directly in an index. The Russell 3000 Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. You cannot invest directly in an index. Attribution analysis: Performance attribution and sector returns are calculated using the Brinson-Fachler attribution model. As such, performance attribution calculations may differ from the fund’s actual investment results. Definition of terms: Alpha measures the difference between a fund’s actual returns and its expected performance given its level of risk (as measured by beta). Beta measures fund volatility relative to general market movements. It is a standardized measure of systematic risk in comparison with a specified index. The benchmark beta is 1.00 by definition. Downside capture measures a fund’s replication of its benchmark during periods of negative returns. During periods of negative benchmark returns, a downside capture ratio less than 100% reflects product performance greater than the benchmark and a downside capture ratio greater than 100% reflects performance less than the benchmark. Information ratio measures the consistency of excess return (return in excess of a benchmark). This value is determined by taking the annualized excess return over a benchmark (style benchmark by default) and dividing it by the standard deviation of excess return. R-squared is a measurement of how similar a fund’s historical performance has been to that of the benchmark. The measure ranges from 0.0, which means that the fund’s performance bears no relationship to the performance of the index, to 1.0, which means that the fund’s performance was perfectly synchronized with the performance of the benchmark. Sharpe ratio measures the potential reward offered by a mutual fund relative to its risk level. The ratio uses a fund’s standard deviation and its excess return to determine reward per unit of risk. The higher the Sharpe ratio, the better the fund’s historical risk-adjusted performance. Standard deviation represents the degree to which an investment’s performance has varied from its average performance over a particular time period. Tracking error measures the extent to which a manager’s performance mimics that of a benchmark. The value is the standard deviation of the difference between a fund’s performance and a benchmark’s performance. Upside capture measures a fund’s replication of its benchmark during periods of positive returns. During periods of positive benchmark returns, an upside capture ratio greater than 100% reflects product performance greater than the benchmark and an upside capture ratio less than 100% reflects performance less than the benchmark. 4 Wells Fargo Discovery Fund Quarterly update Q2 2017 Wells Fargo Discovery Fund Risks: Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Smaller-company stocks tend to be more volatile and less liquid than those of larger companies. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This fund is exposed to foreign investment risk. Consult the fund's prospectus for additional information on these and other risks. The views expressed in this document are as of 6-30-17 and are those of the portfolio manager(s). The views are subject to change at any time in response to changing circumstances in the market and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally, or any Wells Fargo Fund. Any specific securities discussed may or may not be current or future holdings of the fund. The securities discussed should not be considered recommendations to purchase or sell a particular security. Wells Fargo Funds Management, LLC, disclaims any obligation to publicly update or revise any views expressed or forward-looking statements. The inception date of the Institutional Class was 8-31-06. Performance shown prior to the inception of the Institutional Class reflects the performance of the Administrator Class and includes expenses that are not applicable to and are higher than those of the Institutional Class. Performance shown prior to 4-8-05 for the Institutional Class reflects the performance of the Investor Class and includes expenses that are not applicable to and are higher than those of the Institutional Class. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating based on a Morningstar risk-adjusted return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees, unless otherwise indicated), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and is rated separately, which may cause slight variations in the distribution percentages.) Across U.S.domiciled mid-cap growth funds, the Discovery Fund received 3 stars among 576 funds, 3 stars among 502 funds, and 4 stars among 370 funds for the 3-, 5-, and 10-year periods, respectively. Morningstar Ratings and Rankings are for the Institutional Class only; other classes may have different performance characteristics. The Morningstar Return ranking is based on the fund’s total return rank relative to all funds that have the same category for the same time period. Past performance is no guarantee of future results. Carefully consider a fund’s investment objectives, risks, charges, and expenses before investing. For a current prospectus and, if available, a summary prospectus, containing this and other information, visit wellsfargofunds.com. Read it carefully before investing. Wells Fargo Asset Management (WFAM) is a trade name used by the asset management businesses of Wells Fargo & Company. Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Funds. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the funds. The funds are distributed 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. 305185 08-17 CM010 08-17 5 Wells Fargo Discovery Fund