Wells Fargo Advantage High Yield Bond Fund

All information is as of 9-30-15 unless otherwise indicated. General fund information Ticker: EKHIX Portfolio managers: Margaret D. Patel Subadvisor: Wells Capital Management, Inc. Category: High-yield bond Fund strategy Seeks to outperform the broad high-yield fixed-income market (represented by the BofA Merrill Lynch U.S. High Yield Master II Constrained Index) over a full market cycle Principally invests in below-investment-grade debt securities of corporate issuers, including traditional corporate bonds and convertible bonds Seeks to identify the best relatively valued debt securities by evaluating the entire capital structure of a company Uses a top-down macroeconomic approach to determine which sectors and industries to invest in and applies fundamental research to identify the most attractive companies within those sectors and industries Seeks to invest in debt securities issued by companies with sustainable competitive advantages and high barriers to entry, specifically preferring companies with strong management teams and financial flexibility Key drivers of performance For the quarter, the largest contributor to relative performance was the fund s avoidance of bonds rated CCC or below. The fund s out-of-benchmark equity exposure and overweight to chemical bonds detracted. Average annual total returns (%) as of 09-30-15* Year to Since inception 3 month date 1 year 3 year 5 year 10 year (9-11-35) High Yield Bond Fund Inst -4.20-3.01-2.56 3.11 5.28 6.21 7.89 Lipper High Yield Funds Average -4.48-2.30-3.77 2.81 5.18 5.87 BofA Merrill Lynch U.S. High Yield Master II Constrained Index *Returns for periods of less than one year are not annualized. -4.88-2.50-3.54 3.47 5.94 7.13 Figures quoted represent past performance, which is no guarantee of future results. Investment return, principal value, and yields 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, wellsfargoadvantagefunds.com. Institutional Class shares are sold without a front-end sales charge or contingent deferred sales charge. The advisor has contractually committed, through 12-31-15, to waive fees and/or reimburse expenses to the extent necessary to cap the fund s total annual fund operating expenses after fee waiver, excluding certain expenses, at 0.70% for the Institutional Class. After this time, the cap may be increased or terminated only with the approval of the Board of Trustees. Without this cap, the fund s returns would have been lower. The fund s net expense ratio is 0.70%. The fund s gross expense ratio is 0.70%. Portfolio characteristics Wells Fargo Advantage High Yield Bond Fund BofA ML U.S. High Yield Master II Constrained Index Avg. eff. duration 5.52 4.47 30-day SEC yield 5.10% Avg. maturity (yrs.) 6.94 6.31 Sector weights (%) High-yield industrial 85.0 86.4 High-yield utility 3.9 3.3 High-yield financials 1.7 10.3 Equity 7.9 0.0 Cash equivalents 1.5 0.0 Credit-quality allocation (%) 1 BBB/Baa 1.0 0.0 BB/Ba 49.5 47.2 B/B 40.1 38.6 CCC and below 0.0 14.2 Equity 7.9 0.0 Cash equivalents 1.5 0.0 1. The ratings indicated are from Standard & Poor's, Fitch, and/or Moody's Investors Service. The percentages of the fund s portfolio with the ratings depicted in the chart are calculated based on the total investments of the fund. If a security was rated by all three rating agencies, the median rating was used. If a security was rated by two of three rating agencies, the lower rating was used. If a security was rated by one of the agencies, that rating was used. The fund's 30-day unsubsidized SEC yield is 5.07%. (See pages 4-5 for important information.) 1 QU217 10-15

Fixed-income market review Longer-term yields declined and the yield curve flattened Yields (%) 3.5 3.0 2.5 2.0 1.5 U.S. Treasury yield curve 1.0 6-30-15 0.5 9-30-15 0.0 0 yr. 5 yr. 10 yr. 15 yr. 20 yr. 25 yr. 30 yr. U.S. Treasury yields decreased during the quarter, with intermediate- and longer-term yields declining more than shorter-term ones. As a result, the yield curve flattened but remained steeper than its 20-year average. Treasuries benefited from a flight to quality amid global economic concerns and commodity sell-offs. The asset class also benefited from a surge in demand after the Federal Reserve (Fed) remained on hold at its September meeting. Year to date, 10-year yields have traded in a range (ending the quarter at 2.10%) and 2-year yields have trended higher (ending the quarter at 0.67%). Spreads on non-treasury sectors widened Spreads (bps) 700 600 500 400 300 200 100 0 Option-adjusted spreads 6-30-15 9-30-15 MBS ABS CMBS Credit Gov't-related High Yield Sector spreads widened during the quarter and were modestly wider year to date as well. High-yield bond spreads widened the most, ending the quarter with an option-adjusted spread of 630 basis points (bps; 100 bps equals 1.00%). High-yield bonds were hurt by deteriorating corporate earnings growth, an increase in supply, and worries about low commodity prices that caused commodity-related and energy-related subsectors to lag. Lower-quality debt again lagged the broader market High-yield sectors (%) High-yield subsectors (%) Credit quality (%) High yield -4.88 Energy -16.08 BBB -0.12 Industrials -5.34 Basic industry -7.50 BB -3.16 Utilities -3.71 Communications -5.15 B -5.61 Financials -1.24 Consumer goods -0.09 CCC -7.77 I tit ti Real estate 0.20 CC -23.33 Banking 0.76 C -51.85 The BofA Merrill Lynch U.S. High Yield Master II Constrained Index posted a 4.88% loss during the third quarter of 2015. Lower-quality bonds dramatically underperformed during the period as sluggish economic growth made investors more sensitive to credit risk. Against a backdrop of depressed prices for oil and commodities, energy- and commodity-related sectors lagged the overall market. Sources: Bloomberg L.P., Federal Reserve, and Bank of America Merrill Lynch. Past performance is no guarantee of future results. 2

Portfolio review and strategy Sector attribution and positioning Sector allocation provided mixed results. Within the industrials sector, overweights to the chemical and health care subsectors detracted because both underperformed during the quarter, following recent strength and amid heightened regulatory concerns. For some time, the fund has held little exposure to the financials sector because we believe credit losses can happen quickly and dramatically among high-yield financial issuers; this positioning detracted during the quarter because financials outperformed. Contributing to performance were underweights to both the energy and metals and mining subsector, two of the worst-performing parts of the market. Quality attribution and positioning The fund holds no exposure to bonds rated CCC or lower. This positioning aided relative results because lower-quality bonds materially underperformed. To a certain degree, the fund has replaced exposure to lower-quality bonds with dividendpaying equities. We continue to see more value in equity names than in some of the lowerquality high-yield bonds. Issue selection attribution and positioning Selection in certain subsectors, such as health care and chemicals, detracted from performance. Within those subsectors, notable detractors included the bonds of Olin Corp., Horizon Pharma Financing Inc., and Tronox Finance LLC. The fund s equity sleeve underperformed both the BofA Merrill Lynch U.S. High Yield Master II Constrained Index and the Russell 1000 Index. Exposure to certain information technology names (FireEye, Inc., and Splunk Inc.) and a health care name (Mylan N.V.) detracted from relative results. Outlook Recent weakness in both high-yield and investment-grade credit may continue as the markets continue to digest the true level of consumer and business demand in both the U.S. and abroad. We therefore remain focused on higher-quality names, a positioning that tends to make the fund more interest-rate sensitive. We continue to see the advantage of taking on duration risk rather than credit risk, in part because we do not see any anticipated Fed policy changes as true tightening but rather as a normalization of policy. Our larger concern is not about a potential Fed tightening but about the fact that its recent actions (or non-actions) are creating unwelcome uncertainty in the fixed-income markets. Looking at portfolio positioning, we continue to underweight the financials sector in favor of utilities. The high-yield financials sector has a history of credit losses that develop suddenly and without warning, and in this new regulatory environment, we prefer utilities companies with solid fundamentals. The fund s exposure to equity names decreased slightly during the quarter as valuations in fixed income became a bit more favorable. We continue to believe the incremental yield of CCC-rated bonds is insufficient relative to the incremental amount of capital impairment risk. As a result, the fund s credit-quality exposure is largely allocated among B-rated and BB-rated bonds. If yield spreads widen, the defensive nature of BB-rated bonds should help them better hold their value. Effective yields on lower-rated debt rose toward the end of the quarter, and such issues underperformed higher-rated bonds Yield (%) BofA Merrill Lynch U.S. Corporate B Effective Yield BofA Merrill Lynch U.S. Corporate BB Effective Yield BofA Merrill Lynch U.S. Corporate BBB Effective Yield 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 6 30 15 7 15 15 7 30 15 8 14 15 8 29 15 9 13 15 9 28 15 Source: Federal Reserve Economic Data, Federal Reserve Bank of St. Louis, Bank of America Merrill Lynch, 6-30-15 through 9-30-15 Past performance is no guarantee of future results. 3

Fund facts Inception date 9-11-35 Net expense ratio Inst 0.70% Assets all share classes $248.29M Rankings and ratings Morningstar total return rankings Institutional Class (as of 9-30-15) Morningstar Category: High yield bond 1 year NA 3 year NA 5 year NA 10 year NA Overall Morningstar Rating The Overall Morningstar Rating, a weighted average of the 3-, 5-, and 10-year (if applicable) ratings, is out of 627 funds in the high yield bond category, based on risk-adjusted returns as of 9-30-15. Share class availability Share class Ticker Gross expense ratio (%) Net expense ratio (%) Contractual expense cap (%) Contractual expense waiver date A EKHAX 1.03 1.03 1.03 12-31-15 B* EKHBX 1.78 1.78 1.78 12-31-15 C EKHCX 1.78 1.78 1.78 12-31-15 Admin EKHYX 0.97 0.80 0.80 12-31-15 Inst EKHIX 0.70 0.70 0.70 12-31-15 The advisor 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, excluding certain expenses, at the amount shown above. Please consult the prospectus for additional information on applicable sales charges and expenses for the available share classes. *Class B is closed to new investors and additional investments from existing shareholders. Portfolio characteristics: Portfolio characteristics, sector weights, and allocations are subject to change and may have changed since the date specified. Negative cash percentage and credit-quality allocation greater than 100% is due to unsettled derivative contract positions, which cause the sector/credit weight(s) to increase proportionately to the negative cash amount. Benchmark descriptions: The BofA Merrill Lynch U.S. High Yield Master II Constrained Index is a market-valueweighted index of all domestic and Yankee high-yield bonds, including deferred interest bonds and payment-in-kind securities. Issues included in the index have maturities of one year or more and have a credit rating lower than BBB-/Baa3 but are not in default. The BofA Merrill Lynch U.S. High Yield Master II Constrained Index limits any individual issuer to a maximum of 2% benchmark exposure. You cannot invest directly in an index. The Russell 1000 Index measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index. You cannot invest directly in an index. 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. Definition of terms: 30-day SEC yield: The 30-day SEC yield is calculated with a standardized formula mandated by the SEC. The formula is based on maximum offering price per share and includes the effect of any fee waivers. Without waivers, yields would be reduced. The 30-day unsubsidized SEC yield does not reflect waivers in effect. A fund's actual distribution rate will differ from the SEC yield, and any income distributions from the fund may be higher or lower than the SEC yield. Credit-quality ratings: Credit-quality ratings apply to underlying holdings of the fund and not the fund itself. Standard & Poor's and Fitch rate the creditworthiness of bonds from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) to show relative standing within the rating categories. Standard & Poor's rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody s rates the creditworthiness of bonds from Aaa (highest) to CC (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Credit quality and credit-quality ratings are subject to change. Duration: Duration is the weighted average of the timing of cash-flow payments from fixedincome securities. Duration is used as a measurement of sensitivity to interest rates. Yield curve: The yield curve is a graphical representation of fixed-income security yields (usually U.S. Treasuries) at their respective maturities, starting with the shortest time to maturity and sequentially plotting in a line chart to the longest maturity. 4

The views expressed in this document are as of 9-30-15 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 Advantage 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. 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 high yield bond funds, the High Yield Bond Fund received 2 stars among 627 funds, 2 stars among 534 funds, and 2 stars among 362 funds for the 3-, 5-, and 10-year periods, respectively. Morningstar Ratings and Rankings are for Institutional Class shares 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. Risks: Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest-rate changes and their impact on the fund and its share price can be sudden and unpredictable. The use of derivatives may reduce returns and/or increase volatility. High-yield securities have a greater risk of default and tend to be more volatile than higher-rated debt securities. Loans are subject to risks similar to those associated with other below-investment-grade bond investments, such as credit risk (for example, risk of issuer default), below-investment-grade bond risk (for example, risk of greater volatility in value), and risk that the loan may become illiquid or difficult to price. This fund is exposed to foreign investment risk. Consult the fund s prospectus for additional information on these and other risks. 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 wellsfargoadvantagefunds.com. Read it carefully before investing. Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage 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. 23703310-15 QU217 10-15 5