Wells Fargo Growth Fund

MUTUAL FUND COMMENTARY Q2 2023 ALL INFORMATION IS AS OF 6/30/2023 UNLESS OTHERWISE INDICATED.

Allspring Growth Fund

GENERAL FUND INFORMATION

Ticker: SGRNX

Portfolio managers: Thomas C. Ognar, CFA?; Robert Gruendyke, CFA?; and David Nazaret, CFA?

Subadvisor: Allspring Global Investments, LLC

Category: Large growth

FUND STRATEGY

Invests in companies where growth of revenue and earnings is robust, sustainable, and not fully recognized by the market

Conducts fundamental, all-cap research that provides unique insights into a company's true growth rate

Continuously manages risk by evaluating the rate and sustainability of a company's true growth rate relative to the market's expectations

Acts quickly on new information, both positive and negative, in an effort to exploit investor biases

Quarterly review

The Allspring Growth Fund returned 9.83% for the quarter, underperforming the Russell 3000 Growth Index, which returned 12.47%.

For the three-month period, stocks in the financials, consumer discretionary, and information technology sectors were the largest detractors in relative performance.

Stocks in the industrials and communication services sectors contributed to relative performance.

Market review

The U.S. equity market was resilient and continued its recovery during the second quarter. The S&P 500 Index notched gains of 8.74% during the quarter, bringing its first-half gains to 16.89%. Growth equities continued to shine. Value stocks as well as mid- and small-cap stocks lagged by a wide margin in the quarter and the first half. Despite some bumps in the road, including several high-profile bank failures, the market was boosted by a relatively healthy economy; strong jobs reports; and, most importantly, the end or pause of an interest rate tightening cycle, which helped equities overcome interest rates that rose during the quarter.

Inflation remains elevated but has continued to trend in the right direction. The Personal Consumption Expenditures (PCE) Index, closely watched by the Federal Reserve (Fed), showed moderating pressure with a gain of 0.3% for the latest reading in May, down dramatically from a year ago. Other macroeconomic data including CPI (consumer price index), while mixed at times, also showed a downward trend over the recent quarters. Labor markets have remained strong, with the latest nonfarm payroll numbers again coming in well ahead of expectations. The Fed has signaled its intent to keep interest rates higher for longer, and that eventually will pressure the economy. For now, the economy chugs along and remains resilient in the face of the most furious tightening cycle seen in over four decades, which is a key reason why equities have generally outperformed expectations so far in 2023.

AVERAGE ANNUAL TOTAL RETURNS (%) AS OF 6/30/2023*

Growth Fund-Inst

Russell 3000? Growth Index

3

YEAR 1

MONTH TO DATE YEAR

3 YEAR

5 YEAR

10 YEAR

SINCE FUND INCEPTION (12/31/93)

9.83

25.78 21.38

4.26

9.38 12.06

11.70

12.47

28.05 26.60

13.24

14.39

15.26

*Returns for periods less than one year are not annualized.

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes a shareholder may pay on an investment in 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, . Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge.

The fund's gross expense ratio is 0.84%. The fund's net expense ratio is 0.75%. The manager has contractually committed, through November 30, 2023, to waive fees and/or reimburse expenses to the extent necessary to cap the fund's total annual fund operating expenses after fee waivers at 0.75% 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 expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Without this cap, the fund's returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectus.

CM005 07-23

(See pages 6-7 for important information.) 1

MUTUAL FUND COMMENTARY Q2 2023 ALL INFORMATION IS AS OF 6/30/2023 UNLESS OTHERWISE INDICATED.

Allspring Growth Fund

Portfolio positioning

QUARTERLY ATTRIBUTION AND ANALYSIS

The shift in interest rate expectations continue to drive sentiment away from financial services stocks. While we don't own banks, our overweight to financials, mainly in payment and exchange businesses, was a drag on performance. Fixed income electronic trading platforms MarketAxess Holdings Inc. and Tradeweb Markets Inc. were both weak during the quarter on volume softness, some of which is directly attributable to the regional banking turmoil that moved volume to offline during a period of significant stress.

While we had strong performance in key holdings within consumer discretionary, others such as Leslie's Inc. and Ulta Beauty Inc. lagged during the quarter. Leslie's, a leading retailer of pool supplies, missed on revenue and earnings for the quarter but reiterated its forward guidance. Ulta Beauty Inc. reported a quarter that beat estimates, but margins softness and guidance led to a sell-off in shares. We remain constructive on Ulta Beauty given its positioning in a category that has secular tailwinds.

Industrials was a bright spot for the portfolio during the quarter. Copart Inc. has been a steady outperformer and remains a well-positioned leader in the online vehicle auction business. Uber Technologies Inc. is shifting market focus toward profitability and operating efficiency, which is welcome by investors.

Comm. services Consumer discretionary Consumer staples Energy Financials Health care Industrials Information technology Materials Real estate Utilities Cash & equivalents

GROWTH FUND VERSUS RUSSELL 3000? GROWTH INDEX

1.0

0.0

-1.0

-2.0

Value added from sector weight (%)

Value added from stock selection (%)

Total value added (%)

COMM. SERVICES CONSUMER DISCRETIONARY CONSUMER STAPLES ENERGY FINANCIALS HEALTH CARE INDUSTRIALS INFORMATION TECHNOLOGY MATERIALS REAL ESTATE UTILITIES CASH & EQUIVALENTS

SECTOR WEIGHTS (AVERAGE % WEIGHT DURING THE QUARTER)

Growth Fund

Russell 3000? Growth Index Over/ underweight

6.64 14.58 0.94 0.00 15.07 15.55 8.82 35.02 2.06 0.60 0.00 0.73 7.47 14.13 5.67 1.52 6.56 12.26 8.42 41.05 1.40 1.39 0.14 0.00 -0.83 0.45 -4.73 -1.52 8.51 3.29 0.40 -6.03 0.66 -0.79 -0.14 0.73

SECTOR RETURNS (%)

Fund sector return Index sector return

Relative return

20.98 6.46 15.90 15.12 5.08 -8.66

-4.45 0.38 -4.83

0.00 0.71 -0.71

-1.64 5.56 -7.20

4.46 13.03 5.46 6.51 -1.00 6.52

17.69 18.94 -1.25

7.60 22.22 8.35 -0.74 -0.75 22.96

0.00 -1.39 1.39

0.06 0.00 0.06

Sources: FactSet and Allspring Global Investments 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

MUTUAL FUND COMMENTARY Q2 2023 ALL INFORMATION IS AS OF 6/30/2023 UNLESS OTHERWISE INDICATED.

Allspring Growth Fund

Portfolio positioning

TRAILING 12-MONTH ATTRIBUTION ANALYSIS

After the Fed hiked interest rates at the fastest pace in over 40 years, growth equities finally bottomed in the fourth quarter of 2022 before rebounding sharply in the first half of 2023.

During the period, the portfolio's overweight to financials detracted as the sector lagged badly during the rally. Weakness among the electronic trading platform stocks was the biggest detractor in the sector.

Stock selection was weak within consumer discretionary as holdings like Leslie's Inc. and Planet Fitness Inc. languished and never participated in the rally. Planet Fitness was affected by lower equipment sales to franchisees and its unit expansion outlook softened due to higher interest rates and inflation costs. We continue to like the long-term thesis in the stock.

Industrials stocks were contributors during the period, paced by strong gains from core holding Copart Inc., which continues to see strong trends across its core online vehicle auction business.

Comm. services Consumer discretionary Consumer staples Energy Financials Health care Industrials Information technology Materials Real estate Unassigned Utilities Cash & equivalents

GROWTH FUND VERSUS RUSSELL 3000? GROWTH INDEX

2.0

1.0

0.0

-1.0

-2.0

Value added from sector weight (%)

Value added from stock selection (%)

Total value added (%)

COMM. SERVICES CONSUMER DISCRETIONARY CONSUMER STAPLES ENERGY FINANCIALS HEALTH CARE INDUSTRIALS INFORMATION TECHNOLOGY MATERIALS REAL ESTATE UNASSIGNED UTILITIES CASH & EQUIVALENTS

SECTOR WEIGHTS (AVERAGE % WEIGHT DURING THE PAST 12 MONTHS)

Growth Fund

Russell 3000? Growth Index Over/ underweight

8.64 16.22 1.00 0.00 15.01 14.67 7.64 32.35 1.69 0.78 0.00 0.00 2.00 7.10 14.67 6.04 1.79 6.90 12.73 8.94 38.49 1.52 1.60 0.06 0.15 0.00 1.54 1.55 -5.04 -1.79 8.11 1.94 -1.30 -6.14 0.17 -0.82 -0.06 -0.15 2.00

SECTOR RETURNS (%)

Fund sector return 13.07 15.00 -11.31 0.00 13.97 7.99 31.00 41.97 34.54 2.18 0.00 0.00 0.20

Index sector return

16.13 24.56 5.22 9.74 17.77 12.00 25.43 43.21 17.48 -7.25 69.71 2.64 0.00

Relative return -3.06 -9.56 -16.53 -9.74 -3.80 -4.01 5.57 -1.24 17.06 9.43 -69.71 -2.64 0.20

Sources: FactSet and Allspring Global Investments 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.

3

MUTUAL FUND COMMENTARY Q2 2023 ALL INFORMATION IS AS OF 6/30/2023 UNLESS OTHERWISE INDICATED.

Allspring Growth Fund

Portfolio positioning

OUTLOOK

Historically, positive gains in the first half of the calendar year auger well for the remainder of the year. The equity market overcame numerous challenges, namely higher interest rates and a so-far contained regional bank crisis, in the first half. Even though there are signs of slowing, the economy appears to be in solid shape. The job market remains robust, with unemployment near a multi-decade low. Consumer spending is seeing some cracks, but higher income brackets seem to be resilient. The second half will likely be a tug between these macroeconomic factors and earnings.

Given the dominance of the mega caps, it is not a surprise to see valuations well above historical levels for the group. We are maintaining exposure to mega caps given the sustained higher growth rates and profitability, but the most incrementally interesting opportunities in the growth space are down the market cap in mid- and small-cap growth stocks.

With interest rates no longer at zero, investment decisions can't focus solely on growth. We have to be judicious in what stocks are pricing in for future growth expectations of cash and earnings. Especially in this mega-cap-dominated market, it's been easy for investors to deemphasize diversification, portfolio construction, and risk management. We expect a renewed focus on those attributes that will show the benefits of our balanced and diversified approach to navigating what is still an uncertain environment for the second half.

TOP CONTRIBUTORS AND DETRACTORS TO QUARTER-END FUND PERFORMANCE

CONTRIBUTORS MongoDB, Inc. Meta Platforms Inc. Uber Technologies, Inc. Copart, Inc. Palo Alto Networks, Inc.

DETRACTORS Tradeweb Markets, Inc. NVIDIA Corp. MarketAxess Holdings Inc. Allegro MicroSystems, Inc. Ulta Beauty Inc.

The holdings identified do not represent all of the securities purchased or sold during the time period shown and should not be construed as a recommendation to purchase or sell a particular security. Information on calculation methodology and a list showing the overall contribution of each holding in the account for the time period shown are available upon request.

SHARE CLASS AVAILABILITY

SHARE CLASS A C Admin Inst R6

TICKER SGRAX WGFCX SGRKX SGRNX SGRHX

GROSS EXPENSE NET EXPENSE

RATIO (%)

RATIO (%)

CONTRACTUAL EXPENSE RATIO WAIVER DATE

1.16

1.15

11/30/2024

1.91

1.90

11/30/2024

1.09

0.96

11/30/2023

0.84

0.75

11/30/2023

0.74

0.70

11/30/2023

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 waivers at 1.15% (A), 1.90% (C), 0.96% (Admin), 0.75% (Inst), and 0.70% (R6). Brokerage commissions, stamp duty fees, interest, taxes, acquired fund fees and expenses (if any), and extraordinary expenses are excluded from the expense cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. Without this cap, the fund's returns would have been lower. The expense ratio paid by an investor is the net expense ratio (the total annual fund operating expenses after fee waivers) as stated in the prospectus.

"We are maintaining exposure to mega caps given the sustained higher growth rates and profitability, but the most incrementally interesting opportunities in the growth space are down the market cap in mid- and small-cap growth stocks."

4

MUTUAL FUND COMMENTARY Q2 2023 ALL INFORMATION IS AS OF 6/30/2023 UNLESS OTHERWISE INDICATED.

Allspring Growth Fund

TOP HOLDINGS

STOCK Microsoft Corporation Apple Inc. , Inc. Alphabet Inc. Class A Mastercard Incorporated Class A NVIDIA Corporation MongoDB, Inc. Class A Monolithic Power Systems, Inc. Linde plc Tradeweb Markets, Inc. Class A

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 Source: FactSet. 1. Calculated based on a one-year period.

FUND FACTS

Inception date Net expense ratio--Inst Assets--all share classes

% OF NET ASSETS 10.16 8.25 5.69 3.73 3.65 2.96 2.42 2.24 2.16 2.14

FUND $759.99B $87.17B 19.20% 47.76x 58.14% 9.34x 5.78x 91

RUSSELL 3000? GROWTH INDEX $997.70B $445.38B 17.17% 37.31x

11.02x 4.38x 1,533

12/31/1993 0.75% $3.32B

PERFORMANCE

Growth Fund-Inst Lipper Multi-Cap Growth Funds Average Russell 3000? Growth Index Morningstar Large Growth Average

10 1 YEAR 3 YEAR 5 YEAR YEAR

21.38 4.26 9.38 12.06 21.55 6.56 9.92 12.12 26.60 13.24 14.39 15.26 22.89 9.53 11.37 13.02

Past performance is no guarantee of future results.

RANKINGS AND RATINGS Morningstar total return rankings--Institutional Class (as of 6/30/2023)

MORNINGSTAR CATEGORY 1 year 3 year 5 year 10 year

Overall Morningstar Rating TM

LARGE GROWTH

797 out of 1,219 1,019 out of 1,117 838 out of 1,032 595 out of 791

The Overall Morningstar Rating, a weighted average of the 3-, 5-, and 10-year (if applicable) ratings, is out of 1,117 funds in the Large growth category, based on risk-adjusted returns as of 6/30/2023.

PERFORMANCE AND VOLATILITY MEASURES2

Alpha Beta Sharpe ratio Standard deviation R-squared Information ratio Upside capture Downside capture Tracking error

FUND

-8.15 1.01 0.13 22.58% 0.90 -1.24 74.64% 105.06% 7.24%

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.

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.

5

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download