Edgar Filing: WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND

Form N-Q

LOGO

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: 811-21331

Wells Fargo Advantage Multi-Sector Income Fund

(Exact name of registrant as specified in charter)

525 Market Street, 12^th Floor, San Francisco, CA 94105

(Address of principal executive offices) (Zip code)

C. David Messman

Wells Fargo Funds Management, LLC

525 Market Street, 12^th Floor, San Francisco, CA 94105

(Name and address of agent for service)

Registrant’s telephone number, including area code: 800-222-8222

Date of fiscal year end: October 31, 2011

Date of reporting period: January 31, 2012

ITEM 1.

SCHEDULE OF INVESTMENTS

WELLS FARGO ADVANTAGE MULTI-SECTOR

INCOME FUND

PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)


Security Name	Interest Rate			Maturity Date		Principal		Value
Agency Securities: 18.84%
FHLB ± (d)		2.44	%		12/01/2034	$	6,740,248	$	7,093,038
FHLB ± (d)		2.51			06/01/2035		2,714,732		2,887,069
FHLMC ± (d)		2.36			12/01/2035		4,463,412		4,691,386
FHLMC ± (d)		2.37			01/01/2036		6,114,953		6,435,561
FHLMC ± (d)		2.42			04/01/2034		13,190,848		13,932,064
FHLMC ± (d)		2.47			08/01/2035		4,646,716		4,905,042
FHLMC ±		2.48			07/01/2032		1,123		1,136
FHLMC ± (d)		2.60			09/01/2038		5,696,743		6,024,263
FHLMC		8.50			04/01/2015		14,374		14,612
FHLMC		8.50			07/01/2028		125,973		152,773
FHLMC		8.50			03/01/2030		70,046		77,494
FHLMC Series 0196 Class A ±		1.11			12/15/2021		83,679		83,736
FHLMC Series 1383 ± (d)		5.82			02/01/2037		1,839,409		1,987,473
FHLMC Series 2011-K16 Class B 144A		4.75			11/25/2046		1,000,000		893,707
FHLMC Series 2012-K705 Class B (a)		4.16			09/25/2044		754,000		701,097
FHLMC Series 2390 Class FD ±		0.74			12/15/2031		83,902		84,145
FHLMC Series 2411 Class F ±		0.84			02/15/2032		110,840		111,282
FHLMC Series 2567 Class FH ±		0.69			02/15/2033		181,010		181,173
FNMA ± (d)		2.14			12/01/2035		1,584,805		1,646,646
FNMA ± (d)		2.35			08/01/2036		2,115,660		2,200,697
FNMA ± (d)		2.39			03/01/2035		5,184,533		5,477,453
FNMA ± (d)		2.39			07/01/2038		2,267,970		2,400,822
FNMA ± (d)		2.44			04/01/2034		4,481,350		4,693,932
FNMA ± (d)		2.48			06/01/2038		3,460,578		3,676,218
FNMA ± (d)		2.49			10/01/2034		10,460,352		11,063,145
FNMA ± (d)		2.53			08/01/2039		5,527,968		5,879,831
FNMA ± (d)		2.58			07/01/2038		2,258,016		2,383,429
FNMA ± (d)		2.60			01/01/2038		3,050,872		3,137,636
FNMA ± (d)		2.61			02/01/2036		1,329,470		1,403,874
FNMA ± (d)		2.65			04/01/2036		1,655,474		1,720,724
FNMA ± (d)		2.68			05/01/2035		3,436,120		3,650,462
FNMA ± (d)		2.69			05/01/2036		10,104,058		10,729,818
FNMA ± (d)		2.71			07/01/2036		1,222,375		1,295,239
FNMA ±		2.74			05/01/2036		876,876		911,373
FNMA ± (d)		4.24			02/01/2035		5,193,095		5,526,272
FNMA ± (d)		4.81			09/01/2032		2,358,019		2,506,562
FNMA ± (d)		4.85			04/01/2034		2,774,361		2,908,158
FNMA		6.00			04/01/2033		190,138		211,905
FNMA ± (d)		6.26			09/01/2037		1,960,867		2,122,761
FNMA		6.50			11/01/2032		65,923		75,445
FNMA		7.50			07/01/2017		101,435		110,764
FNMA		7.50			10/01/2028		12,414		12,444
FNMA		7.50			11/01/2028		164,133		178,760
FNMA		7.50			02/01/2030		43,460		44,325
FNMA		7.50			09/01/2030		100,851		109,329
FNMA		7.50			07/01/2032		21,696		21,796
FNMA		8.00			12/01/2024		9,075		9,190
FNMA		8.00			06/01/2030		36,206		37,173
FNMA		12.00			01/01/2016		14,719		16,476
FNMA Series 1996-46 Class FA ±		0.78			08/25/2021		50,535		50,749
FNMA Series 2001-25 Class Z		6.00			06/25/2031		533,210		598,288
FNMA Series 2001-35 Class F ±		0.88			07/25/2031		24,547		24,714
FNMA Series 2001-57 Class F ±		0.78			06/25/2031		24,713		24,859
FNMA Series 2001-T10 Class A2		7.50			12/25/2041		225,968		263,577
FNMA Series 2002-77 Class FH ±		0.69			12/18/2032		167,040		167,590
FNMA Series 2002-97 Class FR ±		0.83			01/25/2033		52,920		53,024
FNMA Series 2003-W8 Class 3F2 ±		0.63			05/25/2042		1,045,017		1,045,863
FNMA Series G91-16 Class F ±		0.73			06/25/2021		56,098		56,288
FNMA Series G92-17 Class F ±		1.33			03/25/2022		119,192		120,913
GNMA		6.50			06/15/2028		71,161		83,170
GNMA		7.25			07/15/2017		36,415		40,305
GNMA		7.25			08/15/2017		14,899		16,491
GNMA		7.25			08/15/2017		55,683		61,439
GNMA		7.25			08/15/2017		43,986		48,477
GNMA		7.25			09/15/2017		41,716		46,205

PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)

WELLS FARGO ADVANTAGE MULTI-SECTOR

INCOME FUND


Security Name	Interest Rate			Maturity Date		Principal		Value
Agency Securities (continued)
GNMA		7.25	%		10/15/2017	$	95,283	$	105,185
GNMA		7.25			10/15/2017		46,720		51,385
GNMA		7.25			11/15/2017		37,494		41,099
GNMA		7.25			01/15/2018		13,218		14,604
GNMA		7.25			01/15/2018		30,495		33,998
GNMA		7.25			02/15/2018		31,111		34,460
GNMA		7.25			05/15/2018		16,130		17,631
Total Agency Securities (Cost $125,839,308)									129,420,024


						Shares
Common Stocks: 0.23%
Consumer Discretionary: 0.00%
Hotels, Restaurants & Leisure: 0.00%
Trump Entertainment Resorts Incorporated †							1,161		4,644

Industrials: 0.19%
Commercial Services & Supplies: 0.19%
Covanta Energy Corporation							1,316,237		1,303,404

Telecommunication Services: 0.04%
Diversified Telecommunication Services: 0.04%
Fairpoint Communications Incorporated †							70,442		286,699

Total Common Stocks (Cost $2,917,066)									1,594,747


						Principal
Convertible Debentures: 0.15%
Information Technology: 0.15%
Communications Equipment: 0.15%
Lucent Technologies Incorporated Series B		2.88			06/15/2025	$	1,145,000		1,046,244

Total Convertible Debentures (Cost $765,113)									1,046,244

Corporate Bonds and Notes: 52.54%
Consumer Discretionary: 10.57%
Auto Components: 1.28%
Allison Transmission Incorporated 144A		7.13			05/15/2019		3,050,000		3,069,063
Armored Autogroup Incorporated 144A		9.25			11/01/2018		375,000		313,125
Cooper Tire & Rubber Company		7.63			03/15/2027		1,895,000		1,800,250
Cooper Tire & Rubber Company		8.00			12/15/2019		450,000		468,000
Exide Technologies		8.63			02/01/2018		600,000		495,000
Goodyear Tire & Rubber Company		8.75			08/15/2020		468,000		513,630
Goodyear Tire & Rubber Company		10.50			05/15/2016		1,957,000		2,142,915
									8,801,983

Diversified Consumer Services: 1.35%
Carriage Services Incorporated		7.88			01/15/2015		1,795,000		1,808,463
Service Corporation International		6.75			04/01/2016		475,000		521,906
Service Corporation International		7.00			06/15/2017		1,610,000		1,787,100
Service Corporation International		7.00			05/15/2019		650,000		702,000
Service Corporation International		7.50			04/01/2027		3,965,000		3,890,656

WELLS FARGO ADVANTAGE MULTI-SECTOR

INCOME FUND

PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)


Security Name	Interest Rate			Maturity Date		Principal		Value
Diversified Consumer Services (continued)
Service Corporation International		8.00	%		11/15/2021	$	475,000	$	546,250
									9,256,375

Hotels, Restaurants & Leisure: 2.86%
Ameristar Casinos Incorporated		7.50			04/15/2021		1,800,000		1,917,000
Burger King Corporation		9.88			10/15/2018		850,000		935,000
Chukchansi Economic Development Authority ± 144A (s) (i)		4.16			11/15/2012		1,375,000		907,500
CityCenter Holdings LLC		7.63			01/15/2016		175,000		183,750
CityCenter Holdings LLC ¥		11.50			01/15/2017		1,138,307		1,215,143
DineEquity Incorporated		9.50			10/30/2018		3,475,000		3,787,750
Greektown Superholdings		13.00			07/01/2015		4,125,000		4,413,750
NAI Entertainment Holdings LLC 144A		8.25			12/15/2017		1,000,000		1,092,500
Pinnacle Entertainment Incorporated		7.50			06/15/2015		1,250,000		1,275,000
Scientific Games Corporation		9.25			06/15/2019		485,000		528,650
Speedway Motorsports Incorporated		6.75			02/01/2019		225,000		231,750
Speedway Motorsports Incorporated		8.75			06/01/2016		950,000		1,035,500
William Hill plc		7.13			11/11/2016		396,000		648,978
Yonkers Racing Corporation 144A		11.38			07/15/2016		1,400,000		1,494,500
									19,666,771

Household Durables: 0.07%
American Greetings		7.38			12/01/2021		475,000		480,344

Media: 3.90%
Cablevision Systems Corporation		8.63			09/15/2017		1,310,000		1,460,650
CCH II Capital LLC		13.50			11/30/2016		7,535,929		8,685,158
Cinemark USA Incorporated		7.38			06/15/2021		775,000		815,688
Cinemark USA Incorporated		8.63			06/15/2019		350,000		385,000
CSC Holdings LLC		7.88			02/15/2018		600,000		670,500
CSC Holdings LLC		8.50			04/15/2014		400,000		445,000
DISH DBS Corporation		7.88			09/01/2019		480,000		553,200
EchoStar DBS Corporation		6.63			10/01/2014		1,000,000		1,075,000
EchoStar DBS Corporation		7.13			02/01/2016		125,000		137,188
EchoStar DBS Corporation		7.75			05/31/2015		350,000		390,250
Gray Television Incorporated		10.50			06/29/2015		2,825,000		2,930,938
Interactive Data Corporation		10.25			08/01/2018		1,250,000		1,384,375
Lamar Media Corporation 144A		5.88			02/01/2022		250,000		250,313
Lamar Media Corporation		7.88			04/15/2018		575,000		628,188
Lamar Media Corporation Series C		9.75			04/01/2014		500,000		567,500
LIN Television Corporation		8.38			04/15/2018		775,000		786,625
Regal Cinemas Corporation		8.63			07/15/2019		2,325,000		2,551,688
Regal Entertainment Group		9.13			08/15/2018		325,000		355,875
Salem Communications Corporation		9.63			12/15/2016		2,516,000		2,723,570
									26,796,706

Specialty Retail: 0.81%
Advance Auto Parts Incorporated		4.50			01/15/2022		600,000		624,231
Gap Incorporated		5.95			04/12/2021		600,000		576,003
Limited Brands Incorporated		6.63			04/01/2021		50,000		55,000
Macys Retail Holdings Incorporated		3.88			01/15/2022		600,000		615,197
RadioShack Corporation		6.75			05/15/2019		1,525,000		1,281,000
Rent-A-Center Incorporated		6.63			11/15/2020		375,000		387,188
Toys R Us Property Company LLC		8.50			12/01/2017		1,905,000		2,040,731
									5,579,350

Textiles, Apparel & Luxury Goods: 0.30%
Oxford Industries Incorporated		11.38			07/15/2015		1,865,000		2,044,506

PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)

WELLS FARGO ADVANTAGE MULTI-SECTOR

INCOME FUND


Security Name	Interest Rate			Maturity Date		Principal		Value
Consumer Staples: 0.70%
Food & Staples Retailing: 0.09%
SABMiller Holdings Incorporated 144A		3.75	%		01/15/2022	$	600,000	$	625,117

Food Products: 0.50%
Darling International Incorporated		8.50			12/15/2018		125,000		140,000
Dole Food Company Incorporated		13.88			03/15/2014		1,452,000		1,671,615
Smithfield Foods Incorporated		10.00			07/15/2014		1,370,000		1,609,750
									3,421,365

Tobacco: 0.11%
Lorillard Tobacco Company		6.88			05/01/2020		650,000		750,741

Energy: 7.74%
Energy Equipment & Services: 1.88%
Bristow Group Incorporated		7.50			09/15/2017		1,585,000		1,648,400
Cleaver-Brooks Incorporated 144A		12.25			05/01/2016		630,000		636,300
GulfMark Offshore Incorporated		7.75			07/15/2014		1,625,000		1,633,125
Hornbeck Offshore Services Incorporated Series B		6.13			12/01/2014		2,345,000		2,347,931
Hornbeck Offshore Services Incorporated Series B		8.00			09/01/2017		2,230,000		2,347,075
Oil States International Incorporated		6.50			06/01/2019		1,230,000		1,306,875
Parker Drilling Company		9.13			04/01/2018		460,000		487,600
PHI Incorporated		8.63			10/15/2018		2,500,000		2,525,000
									12,932,306

Oil, Gas & Consumable Fuels: 5.86%
Chesapeake Energy Corporation		9.50			02/15/2015		2,250,000		2,531,250
Cloud Peak Energy Resources Incorporated		8.25			12/15/2017		125,000		135,000
Cloud Peak Energy Resources Incorporated		8.50			12/15/2019		225,000		245,813
Coffeyville Resources LLC 144A		9.00			04/01/2015		932,000		997,240
Coffeyville Resources LLC 144A		10.88			04/01/2017		1,350,000		1,512,000
Consol Energy Incorporated		8.25			04/01/2020		825,000		894,094
Crestwood Midstream Part Company 144A		7.75			04/01/2019		675,000		680,063
Denbury Resources Incorporated		6.38			08/15/2021		350,000		378,875
Denbury Resources Incorporated		8.25			02/15/2020		425,000		483,438
El Paso Corporation		6.50			09/15/2020		445,000		486,545
El Paso Corporation		7.00			06/15/2017		425,000		470,796
El Paso Corporation		7.25			06/01/2018		1,610,000		1,794,772
El Paso Corporation		7.42			02/15/2037		800,000		884,217
El Paso Corporation		7.80			08/01/2031		1,850,000		2,168,711
Encore Acquisition Company		9.50			05/01/2016		375,000		420,469
Energy Transfer Equity LP		7.50			10/15/2020		3,100,000		3,425,500
Ferrellgas Finance Corporation		9.13			10/01/2017		2,325,000		2,441,250
Forest Oil Corporation		7.25			06/15/2019		1,345,000		1,345,000
Forest Oil Corporation		8.50			02/15/2014		535,000		583,150
Holly Corporation		9.88			06/15/2017		1,895,000		2,112,925
Inergy Holdings LP		6.88			08/01/2021		421,000		402,055
Inergy Holdings LP		7.00			10/01/2018		500,000		486,250
Overseas Shipholding Group		7.50			02/15/2024		800,000		486,000
Petrohawk Energy Corporation		7.88			06/01/2015		790,000		837,400
Petrohawk Energy Corporation		10.50			08/01/2014		495,000		550,069
Pioneer Natural Resources Company		7.50			01/15/2020		1,220,000		1,467,372
Plains Exploration & Production Company		8.63			10/15/2019		2,885,000		3,245,625
Regency Energy Partners		6.88			12/01/2018		250,000		271,250
Sabine Pass LNG LP		7.25			11/30/2013		2,265,000		2,344,275
Sabine Pass LNG LP		7.50			11/30/2016		3,125,000		3,257,813
Susser Holdings LLC		8.50			05/15/2016		975,000		1,057,875
Tesoro Corporation		9.75			06/01/2019		945,000		1,070,213
Weatherford International Incorporated		6.35			06/15/2017		650,000		742,178
									40,209,483

WELLS FARGO ADVANTAGE MULTI-SECTOR

INCOME FUND

PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)


Security Name	Interest Rate			Maturity Date		Principal		Value
Financials: 13.29%
Capital Markets: 0.90%
ETRADE Financial Corporation ¥*		12.50	%		11/30/2017	$	4,291,000	$	4,966,833
Oppenheimer Holdings Incorporated		8.75			04/15/2018		1,225,000		1,226,531
									6,193,364

Commercial Banks: 1.54%
CIT Group Incorporated 144A		5.25			04/01/2014		750,000		763,125
CIT Group Incorporated 144A		7.00			05/04/2015		1,472,000		1,479,360
CIT Group Incorporated		7.00			05/01/2016		2,103,629		2,103,629
CIT Group Incorporated		7.00			05/01/2017		2,900,000		2,903,625
Emigrant Bancorp Incorporated 144A (i)		6.25			06/15/2014		2,925,000		2,639,754
HSBC Bank USA		6.00			08/09/2017		650,000		694,117
									10,583,610

Consumer Finance: 6.90%
American General Finance Corporation		5.40			12/01/2015		1,625,000		1,289,844
American General Finance Corporation		5.75			09/15/2016		1,100,000		827,750
American General Finance Corporation		6.50			09/15/2017		200,000		145,000
Calpine Construction Finance Corporation 144A		7.25			10/15/2017		4,800,000		5,016,000
Calpine Construction Finance Corporation 144A		8.00			06/01/2016		1,375,000		1,481,563
Clearwire Communications Finance Corporation 144A		12.00			12/01/2015		940,000		885,950
Clearwire Communications Finance Corporation 144A		12.00			12/01/2015		1,450,000		1,366,625
Ford Motor Credit Company LLC		5.00			05/15/2018		650,000		672,860
Ford Motor Credit Company LLC		8.00			12/15/2016		250,000		296,015
General Motors Financial Company Incorporated 144A		6.75			06/01/2018		900,000		936,000
GMAC LLC		6.75			12/01/2014		1,298,000		1,353,165
GMAC LLC		6.88			08/28/2012		1,244,000		1,262,660
GMAC LLC		7.50			12/31/2013		3,620,000		3,810,050
Homer City Funding LLC		8.73			10/01/2026		1,263,376		1,149,672
International Lease Finance Corporation		6.38			03/25/2013		460,000		466,325
International Lease Finance Corporation 144A		6.75			09/01/2016		100,000		107,625
International Lease Finance Corporation		8.63			09/15/2015		900,000		970,875
JBS USA Finance Incorporated		11.63			05/01/2014		3,745,000		4,302,069
Level 3 Financing Incorporated		10.00			02/01/2018		2,010,000		2,145,675
Local TV Finance LLC 144A ¥		9.25			06/15/2015		2,825,000		2,796,750
Nielsen Finance LLC Company		11.50			05/01/2016		601,000		689,648
Nielson Finance LLC Company		7.75			10/15/2018		5,100,000		5,680,125
Springleaf Finance Corporation		6.90			12/15/2017		2,975,000		2,305,625
Sprint Capital Corporation		6.88			11/15/2028		7,885,000		5,844,756
Sprint Capital Corporation		8.75			03/15/2032		1,855,000		1,558,200
									47,360,827

Diversified Financial Services: 1.66%
Ally Financial Incorporated		8.30			02/12/2015		2,055,000		2,266,912
Bank of America Corporation		3.70			09/01/2015		650,000		644,719
Citigroup Incorporated		6.00			08/15/2017		650,000		712,158
General Electric Capital Corporation		4.65			10/17/2021		650,000		687,211
General Electric Capital Corporation		7.63			12/10/2014		2,000,000		1,791,608
Moody’s Corporation		5.50			09/01/2020		552,000		588,759
Nuveen Investments Incorporated		5.50			09/15/2015		2,950,000		2,669,750
Nuveen Investments Incorporated		10.50			11/15/2015		875,000		912,188
Nuveen Investments Incorporated 144A		10.50			11/15/2015		1,100,000		1,135,750
									11,409,055

Insurance: 0.57%
Hub International Holdings Incorporated 144A		10.25			06/15/2015		3,375,000		3,412,969
USI Holdings Corporation 144A		9.75			05/15/2015		525,000		514,500
									3,927,469

PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)

WELLS FARGO ADVANTAGE MULTI-SECTOR

INCOME FUND


Security Name	Interest Rate			Maturity Date		Principal		Value
REITs: 1.72%
Dupont Fabros Technology Incorporated		8.50	%		12/15/2017	$	5,560,000	$	6,102,100
Health Care Incorporated		5.25			01/15/2022		650,000		686,923
Host Hotels & Resorts LP		9.00			05/15/2017		235,000		260,850
MPT Operating Partnership LP		6.88			05/01/2021		775,000		804,063
Omega Healthcare Investors Incorporated		6.75			10/15/2022		1,775,000		1,881,500
Omega Healthcare Investors Incorporated		7.00			01/15/2016		500,000		511,875
Ventas Incorporated		9.00			05/01/2012		859,000		871,431
WEA Finance LLC 144A		4.63			05/10/2021		650,000		686,639
									11,805,381

Health Care: 1.97%
Health Care Equipment & Supplies: 0.44%
Biomet Incorporated		10.38			10/15/2017		540,000		585,900
Biomet Incorporated		11.63			10/15/2017		2,200,000		2,392,500
									2,978,400

Health Care Providers & Services: 1.40%
Apria Healthcare Group Incorporated		11.25			11/01/2014		590,000		615,813
Aviv Healthcare Properties LP		7.75			02/15/2019		1,025,000		1,027,563
Centene Corporation		5.75			06/01/2017		1,000,000		1,020,000
Community Health Systems Incorporated		8.88			07/15/2015		422,000		438,880
Emergency Medical Services Corporation		8.13			06/01/2019		425,000		433,500
HCA Incorporated		6.50			02/15/2020		1,875,000		1,987,500
HCA Incorporated		7.50			02/15/2022		350,000		374,500
HCA Incorporated		8.50			04/15/2019		375,000		416,250
Health Management Association 144A		7.38			01/15/2020		225,000		231,750
Health Management plc		6.13			04/15/2016		175,000		180,688
HealthSouth Corporation		7.25			10/01/2018		400,000		413,000
HealthSouth Corporation		7.75			09/15/2022		400,000		417,000
Sabra Health Care LP		8.13			11/01/2018		1,450,000		1,526,125
United Surgical Partners International Incorporated		8.88			05/01/2017		525,000		549,938
									9,632,507

Pharmaceuticals: 0.13%
Mylan Incorporated 144A		6.00			11/15/2018		300,000		309,750
Mylan Incorporated 144A		7.63			07/15/2017		375,000		412,031
Mylan Incorporated 144A		7.88			07/15/2020		150,000		166,500
									888,281

Industrials: 3.05%
Aerospace & Defense: 0.71%
Alliant Techsystems Incorporated		6.75			04/01/2016		1,980,000		2,034,450
GeoEye Incorporated		9.63			10/01/2015		485,000		538,350
Hexcel Corporation		6.75			02/01/2015		480,000		484,200
L-3 Communications Holdings Incorporated		6.38			10/15/2015		1,379,000		1,413,475
TransDigm Group Incorporated		7.75			12/15/2018		375,000		410,625
									4,881,100

Commercial Services & Supplies: 1.54%
Casella Waste Systems Incorporated		11.00			07/15/2014		1,945,000		2,120,050
Corrections Corporation of America		7.75			06/01/2017		1,270,000		1,378,744
Crown Cork & Seal Company Incorporated (i)		7.50			12/15/2096		600,000		516,000
Geo Group Incorporated		7.75			10/15/2017		1,450,000		1,551,500
Interface Incorporated		7.63			12/01/2018		125,000		134,688
Iron Mountain Incorporated		6.75			10/15/2018		250,000		318,837
Iron Mountain Incorporated		8.38			08/15/2021		1,385,000		1,513,113
KAR Holdings Incorporated ±		4.43			05/01/2014		1,150,000		1,145,688

WELLS FARGO ADVANTAGE MULTI-SECTOR

INCOME FUND

PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)


Security Name	Interest Rate			Maturity Date		Principal		Value
Commercial Services & Supplies (continued)
Mac-Gray Corporation		7.63	%		08/15/2015	$	458,000	$	469,450
NCO Group Incorporated		11.88			11/15/2014		1,425,000		1,403,625
									10,551,695

Machinery: 0.51%
Columbus McKinnon Corporation		7.88			02/01/2019		725,000		746,750
CPM Holdings Incorporated		10.63			09/01/2014		1,315,000		1,410,338
Dresser Rand Group Incorporated 144A		6.50			05/01/2021		925,000		955,063
Titan International Incorporated		7.88			10/01/2017		375,000		396,094
									3,508,245

Professional Services: 0.08%
Verisk Analytics Incorporated		5.80			05/01/2021		530,000		583,957

Road & Rail: 0.21%
Kansas City Southern		8.00			06/01/2015		55,000		58,300
RailAmerica Incorporated		9.25			07/01/2017		1,247,000		1,387,288
									1,445,588

Information Technology: 4.26%
Communications Equipment: 0.33%
Allbritton Communications Company		8.00			05/15/2018		1,275,000		1,316,438
Lucent Technologies Incorporated		6.45			03/15/2029		1,285,000		970,175
									2,286,613

Computers & Peripherals: 0.24%
Seagate Technology HDD Holdings		6.88			05/01/2020		300,000		321,000
Seagate Technology HDD Holdings		7.75			12/15/2018		1,225,000		1,356,688
									1,677,688

Electronic Equipment, Instruments & Components: 1.63%
CDW Financial Corporation		12.54			10/12/2017		725,000		784,813
GCI Incorporated		6.75			06/01/2021		575,000		577,875
GCI Incorporated		8.63			11/15/2019		2,125,000		2,289,688
Jabil Circuit Incorporated		8.25			03/15/2018		5,275,000		6,145,375
Viasystem Group Incorporated 144A		12.00			01/15/2015		1,285,000		1,374,950
									11,172,701

Internet Software & Services: 0.19%
Equinix Incorporated		7.00			07/15/2021		75,000		81,375
Equinix Incorporated		8.13			03/01/2018		1,085,000		1,204,350
									1,285,725

IT Services: 1.84%
Fidelity National Information Services Incorporated 144A		7.63			07/15/2017		175,000		190,750
Fidelity National Information Services Incorporated		7.63			07/15/2017		225,000		246,375
Fidelity National Information Services Incorporated		7.88			07/15/2020		1,000,000		1,125,000
First Data Corporation 144A		7.38			06/15/2019		625,000		623,438
First Data Corporation		11.25			03/31/2016		4,550,000		3,947,125
SunGard Data Systems Incorporated		7.38			11/15/2018		525,000		553,875
SunGard Data Systems Incorporated		7.63			11/15/2020		250,000		265,625
SunGard Data Systems Incorporated		10.25			08/15/2015		3,455,000		3,575,925
TW Telecommunications Holdings Incorporated		8.00			03/01/2018		675,000		730,688
Unisys Corporation		12.50			01/15/2016		460,000		491,050
Unisys Corporation 144A		12.75			10/15/2014		434,000		489,335

PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)

WELLS FARGO ADVANTAGE MULTI-SECTOR

INCOME FUND


Security Name	Interest Rate			Maturity Date		Principal		Value
IT Services (continued)
Unisys Corporation 144A		14.25	%		09/15/2015	$	332,000	$	375,990
									12,615,176

Software: 0.03%
Audatex North American Incorporated 144A		6.75			06/15/2018		225,000		228,938

Materials: 2.15%
Chemicals: 1.09%
Huntsman International LLC		5.50			06/30/2016		1,260,000		1,247,400
Lyondell Chemical Company		11.00			05/01/2018		4,482,876		4,908,749
Rockwood Specialties Group Incorporated		7.63			11/15/2014		340,000		449,184
Solutia Incorporated		7.88			03/15/2020		695,000		816,625
Solutia Incorporated		8.75			11/01/2017		50,000		56,625
									7,478,583

Containers & Packaging: 0.37%
Crown Americas LLC		7.63			05/15/2017		450,000		495,000
Graham Packaging Company		9.88			10/15/2014		1,825,000		1,861,500
Owens Brockway Glass Container Incorporated		7.38			05/15/2016		175,000		196,000
									2,552,500

Metals & Mining: 0.38%
Freeport-McMoRan Copper & Gold Incorporated		8.38			04/01/2017		2,485,000		2,621,675
Indalex Holdings Corporation (s)		11.50			02/01/2014		3,170,000		11,888
									2,633,563

Paper & Forest Products: 0.31%
Clearwater Paper Corporation		10.63			06/15/2016		545,000		610,400
Georgia Pacific Corporation		8.88			05/15/2031		1,080,000		1,500,436
									2,110,836

Telecommunication Services: 5.13%
Diversified Telecommunication Services: 2.10%
Avaya Incorporated		9.75			11/01/2015		1,175,000		1,125,063
Citizens Communications Company		7.88			01/15/2027		1,805,000		1,547,788
Frontier Communications Corporation		8.13			10/01/2018		845,000		842,888
Frontier Communications Corporation		8.25			05/01/2014		200,000		211,000
Frontier Communications Corporation		8.25			04/15/2017		1,040,000		1,047,800
Frontier Communications Corporation		8.50			04/15/2020		525,000		519,750
Intelsat Jackson Holdings Limited		8.50			11/01/2019		850,000		920,125
Intelsat Jackson Holdings Limited		9.50			06/15/2016		725,000		761,250
Qtel International Finance Limited		5.00			10/19/2025		500,000		503,750
Qwest Corporation		7.13			11/15/2043		795,000		781,088
Qwest Corporation		7.25			09/15/2025		1,040,000		1,120,031
Qwest Corporation		7.50			06/15/2023		1,370,000		1,370,000
Qwest Corporation		7.63			08/03/2021		230,000		235,944
SBA Telecommunications Incorporated		8.00			08/15/2016		700,000		757,750
SBA Telecommunications Incorporated		8.25			08/15/2019		100,000		109,000
Windstream Corporation		7.88			11/01/2017		2,330,000		2,574,650
									14,427,877

Wireless Telecommunication Services: 3.03%
American Tower Corporation		5.90			11/01/2021		650,000		700,111
CCO Holdings LLC 144A		7.75			05/01/2017		325,000		353,031
CCO Holdings LLC		8.13			04/30/2020		450,000		497,813

WELLS FARGO ADVANTAGE MULTI-SECTOR

INCOME FUND

PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)


Security Name	Interest Rate			Maturity Date		Principal		Value
Wireless Telecommunication Services (continued)
Cricket Communications Incorporated		7.75	%		05/15/2016	$	1,705,000	$	1,807,300
Cricket Communications Incorporated		7.75			10/15/2020		1,550,000		1,476,375
Crown Castle International Corporation		7.13			11/01/2019		75,000		81,563
Crown Castle International Corporation		9.00			01/15/2015		325,000		354,250
iPCS Incorporated ¥		3.68			05/01/2014		1,357,019		1,241,672
MetroPCS Communications Incorporated		6.63			11/15/2020		2,775,000		2,754,188
MetroPCS Communications Incorporated		7.88			09/01/2018		775,000		817,625
Sprint Nextel Corporation 144A		9.00			11/15/2018		325,000		350,188
Sprint Nextel Corporation 144A		11.50			11/15/2021		625,000		646,875
Sprint Nextel Corporation Series D		7.38			08/01/2015		3,260,000		3,154,050
Sprint Nextel Corporation Series F		5.95			03/15/2014		2,335,000		2,311,650
Syniverse Holdings Incorporated		9.13			01/15/2019		3,975,000		4,283,063
									20,829,754

Utilities: 3.68%
Electric Utilities: 1.75%
Aquila Incorporated Step Bond		11.88			07/01/2012		6,545,000		6,823,915
Dolphin Subsidiary II Incorporated 144A		7.25			10/15/2021		2,125,000		2,364,063
IPALCO Enterprises Incorporated		5.00			05/01/2018		900,000		887,625
Otter Tail Corporation		9.00			12/15/2016		1,835,000		1,963,450
PNM Resources Incorporated		9.25			05/15/2015		9,000		9,945
									12,048,998

Gas Utilities: 0.36%
AmeriGas Finance LLC		6.75			05/20/2020		100,000		100,000
AmeriGas Finance LLC		7.00			05/20/2022		125,000		125,313
AmeriGas Partners LP		6.25			08/20/2019		1,500,000		1,492,500
AmeriGas Partners LP		6.50			05/20/2021		475,000		471,438
Suburban Propane Partners LP		7.38			03/15/2020		275,000		288,750
									2,478,001

Independent Power Producers & Energy Traders: 1.57%
Mirant Mid-Atlantic LLC Series C		10.06			12/30/2028		3,614,632		3,686,925
NRG Energy Incorporated		7.38			01/15/2017		3,475,000		3,592,281
NRG Energy Incorporated		8.50			06/15/2019		1,615,000		1,623,075
Reliant Energy Incorporated		7.63			06/15/2014		450,000		450,000
Reliant Energy Incorporated		9.24			07/02/2017		1,071,656		1,028,790
Reliant Energy Incorporated		9.68			07/02/2026		410,000		385,400
									10,766,471

Total Corporate Bonds and Notes (Cost $346,766,524)									360,907,950

Foreign Corporate Bonds and Notes @: 5.29%
Consumer Discretionary: 0.41%
Hotels, Restaurants & Leisure: 0.23%
Casino Guichard Perrachon SA (EUR)		4.73			05/26/2021		900,000		1,139,125
ODEON & UCI Cinemas Group (GBP)		9.00			08/01/2018		300,000		463,285
									1,602,410

Media: 0.18%
UPC Holding BV (EUR)		9.63			12/01/2019		470,000		653,207
Ziggo Bond Company BV (EUR)		8.00			05/15/2018		200,000		274,036
Ziggo Bond Company BV144A (i) (EUR)		8.00			05/15/2018		200,000		274,036
									1,201,279

PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)

WELLS FARGO ADVANTAGE MULTI-SECTOR

INCOME FUND


Security Name	Interest Rate			Maturity Date		Principal		Value
Consumer Staples: 0.09%
Food & Staples Retailing: 0.09%
Foodcorp Limited (EUR)		8.75	%		03/01/2018		520,000	$	642,776

Financials: 4.15%
Commercial Banks: 2.90%
Banco De Brasil (EUR)		4.50			01/20/2016		600,000		791,344
Eurofima (AUD)		6.25			12/28/2018		2,450,000		2,572,267
European Investment Bank (AUD)		6.13			01/23/2017		6,930,000		7,453,526
Instituto de Credito Oficial (EUR)		4.38			05/23/2012		1,800,000		2,368,758
International Bank for Reconstruction & Development (AUD)		5.75			10/01/2020		950,000		1,076,461
KfW Bankengruppe (AUD)		6.25			12/04/2019		1,225,000		1,363,448
KfW Bankengruppe (NZD)		6.38			02/17/2015		4,819,000		4,308,125
									19,933,929

Consumer Finance: 0.15%
Fiat Industrial SpA (EUR)		6.25			03/09/2018		400,000		502,291
Virgin Media Finance plc (GBP)		8.88			10/15/2019		300,000		528,287
									1,030,578

Diversified Financial Services: 0.20%
Voto-Votorantim Limited (EUR)		5.25			04/28/2017		1,000,000		1,340,751

Thrifts & Mortgage Finance: 0.90%
Dexia Kommunalbank AG (EUR)		3.50			06/05/2014		4,000,000		5,244,055
Nationwide Building Society (EUR)		3.75			01/20/2015		700,000		927,992
									6,172,047

Industrials: 0.39%
Building Products: 0.07%
Heidelbergcement AG (EUR)		8.50			10/31/2019		330,000		466,189

Machinery: 0.04%
Savcio Holdings Limited (EUR)		8.00			02/15/2013		250,000		307,392

Trading Companies & Distributors: 0.08%
Rexel SA (EUR)		7.00			12/17/2018		200,000		265,534
Rexel SA (EUR)		8.25			12/15/2016		200,000		283,847
									549,381

Transportation Infrastructure: 0.20%
BAA Funding Limited (EUR)		4.60			02/15/2018		1,000,000		1,351,948

Materials: 0.17%
Metals & Mining: 0.09%
New World Resources NV (EUR)		7.38			05/15/2015		500,000		640,944

Paper & Forest Products: 0.08%
Smurfit Kappa Funding plc (EUR)		7.25			11/15/2017		400,000		546,765

Utilities: 0.08%
Water Utilities: 0.08%
Zinc Capital SA (EUR)		8.88			05/15/2018		500,000		562,461

WELLS FARGO ADVANTAGE MULTI-SECTOR

INCOME FUND

PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)


Security Name	Interest Rate			Maturity Date		Principal		Value
Total Foreign Corporate Bonds and Notes (Cost $34,544,493)									36,348,850

Foreign Government Bonds @: 26.19%
Australia Series 124 (AUD)		5.75	%		05/15/2021		2,750,000	$	3,379,365
Australia Series 22 (AUD)		6.00			07/21/2022		4,000,000		4,410,434
Brazil (BRL)		12.50			01/05/2016		26,000,000		17,261,905
Brazil (BRL)		12.50			01/05/2022		19,500,000		13,895,089
Chile (CLP)		5.50			08/05/2020		1,700,000,000		3,587,775
Colombia (COP)		7.75			04/14/2021		10,000,000,000		6,616,396
Hungary (HUF)		0.00			05/02/2012		1,220,000,000		5,323,109
Indonesia (IDR)		6.25			04/15/2017		13,000,000,000		1,543,372
Indonesia (IDR)		7.00			05/15/2027		72,500,000,000		8,877,605
Indonesia (IDR)		7.38			09/15/2016		48,000,000,000		5,884,122
Korea (KRW)		5.25			09/10/2015		2,850,000,000		2,688,215
Korea (KRW)		5.25			03/10/2027		3,830,000,000		3,921,677
Malaysia (MYR)		4.26			09/15/2016		49,000,000		16,816,036
Mexico (MXN)		7.25			12/15/2016		155,000,000		13,006,129
Mexico (MXN)		8.50			11/18/2038		166,900,000		14,532,661
New Zealand (NZD)		6.00			12/15/2017		6,705,000		6,303,879
Peru (PEN)		7.84			08/12/2020		20,000,000		8,509,483
Philippines (EUR)		6.25			03/15/2016		1,500,000		2,084,704
Poland (PLN)		5.50			04/25/2015		41,000,000		12,941,149
Queensland Treasury (AUD)		6.00			03/01/2022		3,600,000		4,157,889
Russia (RUB)		7.85			03/10/2018		150,000,000		5,118,871
South Africa (ZAR)		8.00			12/21/2018		55,000,000		7,244,633
South Africa (ZAR)		8.25			09/15/2017		88,000,000		11,820,946
Total Foreign Government Bonds (Cost $172,054,265)									179,925,444

Non-Agency Mortgage Backed Securities: 1.87%
American Home Mortgage Assets Series 2006-2 Class 1A1 ±		1.16			09/25/2046	$	4,232,135		2,060,940
Banc of America Commercial Mortgage Incorporated Series 2006-03 Class AM		6.05			07/10/2044		1,340,000		1,299,606
Centex Home Equity Series 2002-D Class AF6		4.66			12/25/2032		230,045		223,477
Centex Home Equity Series 2004-B Class AF6		4.19			03/25/2034		305,000		299,694
Countrywide Asset Backed Certificates Series 2007-7 Class 2A1 ±		0.36			10/25/2047		370,242		365,767
Greenwich Capital Commercial Funding Corporation Series 2006-GG7 Class AM		6.08			07/10/2038		1,820,000		1,882,058
GS Mortgage Securities Trust Series 2007-GG10 Class A4		5.98			08/10/2045		1,000,000		1,108,498
Lehman XS Trust Series 2006-18N Class A5A ± (i)		0.45			12/25/2036		3,571,816		1,268,538
Merrill Lynch Countrywide Commercial Mortgage Trust Series 2006-4 Class AM		5.20			12/12/2049		340,000		330,716
Merrill Lynch Mortgage Trust Series 2006-C1 Class AM		5.81			05/12/2039		565,000		595,641
Morgan Stanley Capital I Series 2005-HQ6 Class A4B		5.04			08/13/2042		650,000		677,339
RAAC Series 2005-SP2 Class 1A3 ±		0.68			05/25/2044		464,401		457,501
Residential Asset Mortgage Products Incorporated Series 2006-EFC1 Class A2 ±		0.48			02/25/2036		500,194		478,634
Soundview Home Equity Loan Trust Series 2005-OPT2 Class A5 ±		0.65			08/25/2035		388,826		380,261
Structured Asset Securities Corporation Series 2005 Class 1A7 ± 144A		0.52			02/25/2035		185,182		182,500
Wachovia Bank Commercial Mortgage Trust Series 2006-C23 Class AM		5.47			01/15/2045		1,220,000		1,268,139
Total Non-Agency Mortgage Backed Securities (Cost $13,823,502)									12,879,309


	Dividend Yield					Shares
Preferred Stocks: 0.09%
Financials: 0.09%
Diversified Financial Services: 0.09%
GMAC Capital Trust I		8.13					27,000		599,130

Total Preferred Stocks (Cost $675,000)									599,130

PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)

WELLS FARGO ADVANTAGE MULTI-SECTOR

INCOME FUND


Security Name	Interest Rate			Maturity Date		Principal		Value
Term Loans: 14.60%
Advantage Sales & Marketing LLC		9.25	%		06/18/2018	$	475,000	$	466,688
Allison Transmission Incorporated <		2.79			08/07/2014		3,369,734		3,336,576
Ameristar Casinos Incorporated		4.00			04/13/2018		1,022,425		1,025,236
Atlantic Broadband Finance LLC		4.00			03/08/2016		437,691		434,864
B&G Foods Incorporated		4.50			11/18/2018		775,000		775,775
Barrington Broadcasting Group		7.50			06/08/2017		3,843,243		3,814,419
Capital Automotive LP		5.00			03/10/2017		3,784,962		3,758,959
CCC Information Services Incorporated <		4.00			11/11/2015		200,000		200,750
CCM Merger Incorporated <		7.00			03/01/2017		5,045,904		5,006,798
Coinmach Corporation		3.41			11/20/2014		3,330,406		3,040,195
Covanta Energy Corporation		0.48			02/10/2014		680,308		673,675
Crown Castle International Corporation <		3.00			01/25/2019		6,025,000		6,019,999
DineEquity Incorporated <		0.00			10/19/2017		2,000,000		2,000,000
Dunkin Brands Incorporated <		4.00			11/23/2017		3,205,716		3,196,772
Entercom Communication LLC <		0.00			11/30/2018		275,000		274,656
Fairpoint Communications Incorporated		6.50			01/22/2016		3,532,230		2,971,135
Federal Mogul Corporation		2.22			12/28/2015		1,751,273		1,670,644
Federal Mogul Corporation		2.23			12/29/2014		3,075,183		2,933,602
Fidelity National Information Services Incorporated		4.25			07/18/2016		100,000		100,374
First Data Corporation		3.02			09/24/2014		916,226		868,885
First Data Corporation		3.02			09/24/2014		1,408,988		1,336,185
First Data Corporation		3.02			09/24/2014		3,094,510		2,934,617
Genesys Telecommunication <		1.00			01/25/2019		1,975,000		1,974,506
Gray Television Incorporated		3.80			12/31/2014		971,356		956,786
HCA Incorporated		2.77			05/01/2016		987,179		948,926
Helm Holdings Corporation		6.25			06/02/2017		2,619,175		2,560,244
HHI Holdings LLC		7.00			03/21/2017		942,875		935,803
Interactive Data Corporation		4.50			02/12/2018		1,994,975		1,987,494
KAR Auction Services Incorporated		5.00			05/19/2017		4,987,867		4,956,693
Level 3 Financing Incorporated		2.75			03/13/2014		700,000		680,092
LIN Television Corporation		5.00			12/15/2018		400,000		402,000
Local TV Finance LLC		2.28			05/07/2013		1,424,159		1,402,797
LPL Holdings Incorporated <		2.09			06/28/2013		3,493,596		3,465,617
MedAssets Incorporated		5.25			11/16/2016		648,222		648,546
Merisant Company (i)		7.50			01/08/2014		817,551		805,288
MSCI Incorporated <		0.00			03/14/2017		1,600,000		1,600,336
National Cinemedia LLC		2.05			02/13/2015		2,955,172		2,903,457
NCO Group Incorporated		8.00			11/15/2013		1,100,332		1,091,397
Newsday LLC		10.50			08/01/2013		2,755,000		2,834,206
Novelis Incorporated		3.75			03/10/2017		997,500		991,894
nTelos Incorporated <		1.00			08/07/2015		1,000,000		993,130
Panolam Industries International Incorporated (i)		8.25			12/31/2013		209,504		197,283
Penn National Gaming Incorporated <		0.00			07/16/2018		1,000,000		1,002,780
Prestige Brands International <		4.00			12/20/2018		325,000		326,463
Springleaf Finance Corporation		5.50			05/05/2017		700,000		650,125
Texas Competitive Electric Holding LLC <		3.80			10/10/2014		15,421,983		10,436,827
Texas Competitive Electric Holding LLC		4.80			10/10/2017		375,000		231,094
Total Safety US Incorporated		7.50			10/27/2017		900,000		869,625
Towerco Finance LLC <		0.00			02/02/2017		1,950,000		1,952,438
Transdigm Incorporated		4.00			02/14/2017		2,718,372		2,711,249
United Surgical Partners International Incorporated		2.27			04/18/2014		1,818,821		1,770,749
United Surgical Partners International Incorporated		2.27			04/21/2014		132,601		129,097
Warnaco Incorporated		3.75			06/15/2018		600,000		594,000
Web Service Company LLC		1.00			08/28/2014		458,174		453,881
Total Term Loans (Cost $102,911,780)									100,305,627

Yankee Corporate Bonds and Notes: 5.89%
Consumer Discretionary: 0.26%
Media: 0.26%
Intelsat Jackson Holdings Limited		7.25			10/15/2020		875,000		913,281

WELLS FARGO ADVANTAGE MULTI-SECTOR

INCOME FUND

PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)


Security Name	Interest Rate			Maturity Date		Principal		Value
Media (continued)
Videotron Limited		9.13	%		04/15/2018	$	775,000	$	860,250
									1,773,531

Energy: 1.24%
Oil, Gas & Consumable Fuels: 1.24%
Griffin Coal Mining Company Limited 144A (s)		9.50			12/01/2016		3,792,790		2,972,599
Griffin Coal Mining Company Limited (s)		9.50			12/01/2016		310,082		243,027
Petroplus Finance Limited		5.75			01/20/2020		1,650,000		1,769,165
Ship Finance International Limited		8.50			12/15/2013		3,720,000		3,561,900
									8,546,691

Financials: 0.67%
Capital Markets: 0.06%
Mubadala Development Company 144A		5.50			04/20/2021		360,000		375,763

Commercial Banks: 0.43%
Banco de Credito Del Peru (i)		4.75			03/16/2016		1,200,000		1,203,000
Eurasian Development Bank		7.38			09/29/2014		1,000,000		1,065,000
Standard Chartered Bank 144A		6.40			09/26/2017		650,000		699,309
									2,967,309

Consumer Finance: 0.10%
Virgin Media Finance plc		6.50			01/15/2018		650,000		698,750

Diversified Financial Services: 0.08%
BM&F Bovespa SA		5.50			07/16/2020		500,000		530,000
Preferred Term Securities XII Limited (s) (i)		1.87			12/24/2033		635,000		191
									530,191

Industrials: 0.10%
Commercial Services & Supplies: 0.06%
Tyco Electronics Group SA		3.50			02/03/2022		400,000		398,428

Road & Rail: 0.04%
Transnet Limited 144A		4.50			02/10/2016		300,000		308,395

Information Technology: 0.16%
Computers & Peripherals: 0.16%
Seagate Technology HDD Holdings		6.80			10/01/2016		650,000		710,125
Seagate Technology HDD Holdings 144A		7.00			11/01/2021		375,000		401,250
									1,111,375

Materials: 1.39%
Metals & Mining: 0.80%
Kazatomprom		6.25			05/20/2015		500,000		530,000
Novelis Incorporated		7.25			02/15/2015		1,030,000		1,026,529
Novelis Incorporated		8.38			12/15/2017		550,000		603,625
Novelis Incorporated		8.75			12/15/2020		725,000		810,188
Teck Resources Limited		10.75			05/15/2019		2,050,000		2,506,025
									5,476,367

PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)

WELLS FARGO ADVANTAGE MULTI-SECTOR

INCOME FUND


Security Name			Interest Rate			Maturity Date		Principal		Value
Paper & Forest Products: 0.59%
PE Paper Escrow GmbH 144A				12.00	%		08/01/2014	$	1,170,000	$	1,269,450
Sappi Limited 144A				7.50			06/15/2032		3,560,000		2,812,400
											4,081,850

Telecommunication Services: 1.92%
Diversified Telecommunication Services: 1.52%
Intelsat Jackson Holdings SA 144A				7.25			04/01/2019		425,000		444,125
Intelsat Jackson Holdings SA 144A				7.50			04/01/2021		525,000		551,250
Intelsat Jackson Holdings SA				11.25			06/15/2016		4,875,000		5,167,500
Qtel International Finance Limited				4.75			02/16/2021		300,000		304,500
Sable International Finance Limited				7.75			02/15/2017		350,000		358,750
Wind Acquisition Finance SpA 144A				11.75			07/15/2017		3,660,000		3,623,400
											10,449,525

Wireless Telecommunication Services: 0.40%
Digicel Group Limited 144A				12.00			04/01/2014		1,335,000		1,505,213
Telesat Canada Incorporated				11.00			11/01/2015		1,135,000		1,214,450
											2,719,663

Utilities: 0.15%
Electric Utilities: 0.15%
Eskom Holdings Limited				5.75			01/26/2021		1,000,000		1,045,000

Total Yankee Corporate Bonds and Notes (Cost $38,159,104)											40,482,838

Yankee Government Bonds: 1.29%
Dominican Republic				7.50			05/06/2021		3,500,000		3,575,250
Sri Lanka Republic				6.25			07/27/2021		3,500,000		3,450,612
State of Qatar 144A Republic				4.50			01/20/2022		1,750,000		1,802,500
Total Yankee Government Bonds (Cost $8,874,063)											8,828,362


			Yield					Shares
Short-Term Investments: 5.77%
Investment Companies: 5.77%
Wells Fargo Advantage Cash Investment Money Market Fund (l) (u) ##				0.02					39,604,647		39,604,647

Total Short-Term Investments (Cost $39,604,647)											39,604,647

Total Investments in Securities (Cost $886,934,865)*	132.75	%									911,943,172
Other Assets and Liabilities, Net	(32.75	)									(224,996,437	)

Total Net Assets	100.00	%								$	686,946,735

±	Variable rate investment.

(d)

All or a portion of this security has been segregated as collateral for reverse repurchase agreements.

144A

Security 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.

(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 security.

WELLS FARGO ADVANTAGE MULTI-SECTOR

INCOME FUND

PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)

(s)

Security is currently in default with regards to scheduled interest and/or principal payments. The Fund has stopped accruing interest on this security.

(i)

Illiquid security.

¥	A payment-in-kind (PIK) security is a security in which the issuer may make interest or dividend payments in cash or additional securities. These additional securities generally have the same terms as the original holdings.

@	Foreign bond principal is denominated in local currency.

<	All or a portion of the position represents an unfunded loan commitment.

(l)

Investment in an affiliate.

(u)

Rate shown is the 7-day annualized yield at period end.

##	All or a portion of this security has been segregated for when-issued securities or unfunded loans.

*	Cost for federal income tax purposes is $891,910,710 and net unrealized appreciation (depreciation) consists of:


Gross unrealized appreciation	$	21,434,827
Gross unrealized depreciation		(1,402,365	)

Net unrealized appreciation	$	20,032,462

WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND

NOTES TO PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)

The following notes are to be read in conjunction with the Portfolio of Investments for Wells Fargo Advantage Multi-Sector Income Fund (the “Fund”).

Securities valuation

Fixed income securities with maturities exceeding 60 days are valued based on evaluated prices received from an independent pricing service approved by the 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 equity 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 Value 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.

Debt securities of sufficient credit quality with original maturities of 60 days or less generally are valued at amortized cost which approximates fair value. The amortized cost method involves valuing a security at its cost, plus accretion of discount or minus amortization of premium over the period until maturity.

Investments in open-end mutual funds and non-registered investment companies are generally valued at net asset value.

Investments which are not valued using any of the methods discussed above, are valued at their fair value, as determined by procedures established in good faith and approved by the Board of Trustees.

Foreign currency translation

The accounting records of the Fund are maintained in U.S. dollars. Assets, including investment securities, and liabilities denominated in foreign currency are translated into U.S. dollars at the prevailing rates of exchange at the date of valuation. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded and the U.S. dollar equivalent of the amounts actually paid or received. Net unrealized foreign exchange gains and losses arise from changes in the fair value of assets and liabilities other than investments in securities resulting in changes in exchange rates.

The changes in net assets arising from changes in exchange rates and the changes in net assets resulting from changes in market prices of securities are not separately presented. Such changes are recorded with net realized and unrealized gains or losses from investments. Gains and losses from certain foreign currency transactions are treated as ordinary income for U.S. federal income tax purposes.

Reverse repurchase agreements

To obtain short-term financing, the Fund may enter into reverse repurchase agreements with banks and other financial institutions, which are deemed by the investment adviser to be creditworthy. At the time the Fund enters into a reverse repurchase agreement, it will establish a segregated account with the custodian containing qualified assets having a value not less than the repurchase price, including accrued interest. If the counterparty to the transaction is rendered insolvent, the Fund may be delayed or limited in the repurchase of the collateral securities.

Forward foreign currency contracts

The Fund may be subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. A forward foreign currency contract is an agreement between two parties to purchase or sell a specific currency for an agreed-upon price at a future date. The Fund enters into forward foreign currency contracts to facilitate transactions in foreign-denominated securities and to attempt to minimize the risk to the Fund from adverse changes in the relationship between currencies. Forward foreign currency contracts are

recorded at the forward rate and marked-to-market daily. When the contracts are closed, realized gains and losses arising from such transactions are recorded as realized gains or losses on foreign currency related transactions. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably. The Fund’s maximum risk of loss from counterparty credit risk is the unrealized gains or losses on the contracts. This risk is mitigated by having a master netting arrangement between the Fund and the counterparty.

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 January 31, 2012, the Fund had unfunded loan commitments of $17,652,563.

Fair valuation measurements

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to significant 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 January 31, 2012, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:


Investments in Securities	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity securities
Common stocks	$	286,699	$	1,308,048	$	0	$	1,594,747
Preferred stocks		599,130		0		0		599,130
Agency securities		0		129,420,024		0		129,420,024
Convertible debenture		0		1,046,244		0		1,046,244
Corporate bonds and notes		0		355,806,835		5,101,115		360,907,950
Foreign corporate bonds and notes		0		36,348,850		0		36,348,850
Foreign government bonds		0		179,925,444		0		179,925,444
Non agency mortgage-backed securities		0		12,879,309		0		12,879,309
Term loans		0		91,331,537		8,974,090		100,305,627
Yankee corporate bonds and notes		0		40,482,647		191		40,482,838
Yankee government bonds		0		8,828,362		0		8,828,362
Short-term investments
Investment companies		39,604,647		0		0		39,604,647

	$	40,490,476	$	857,377,300	$	14,075,396	$	911,943,172

As of January 31, 2012, the inputs used in valuing the Fund’s other financial instruments, which are carried at fair value, were as follows:


Other financial instruments	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
Forward foreign currency contracts+	$	0	$	(694,048	)	$	0	$	(694,048	)

+	Forward foreign currency contracts are presented at the unrealized gains or losses on the instrument.

Transfers in and transfers out are recognized at the end of the reporting period. For the three months ended January 31, 2012, the Fund did not have any significant transfers into/out of Level 1 and Level 2.

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


	Corporate bonds and notes			Term loans			Yankee corporate bonds and notes		Total
Balance as of October 31, 2011	$	5,243,760		$	3,971,316		$	191	$	9,215,267
Accrued discounts (premiums)		638			7,384			0		8,022
Realized gains (losses)		0			231			0		231
Change in unrealized gains (losses)		(143,283	)		(5,214	)		0		(148,497	)
Purchases		0			0			0		0
Sales		0			(6,425	)		0		(6,425	)
Transfers into Level 3		0			5,006,798			0		5,006,798
Transfers out of Level 3		0			0			0		0

Balance as of January 31, 2012	$	5,101,115		$	8,974,090		$	191	$	14,075,396

Change in unrealized gains (losses) relating to securities still held at January 31, 2012	$	(143,284	)	$	(3,706	)	$	0	$	(146,990	)

Derivative transactions

During the three months ended January 31, 2012, the Fund entered into forward foreign currency exchange contracts for economic hedging purposes.

At January 31, 2012, the Fund had forward foreign currency contracts outstanding as follows:

Forward foreign currency contracts to buy:


Exchange Date	Counterparty		Contracts to Receive		U.S. Value at January 31, 2012		In Exchange for U.S. $		Net Unrealized Gains (Losses)
02/01/2012		State Street Bank		1,197,153,060 HUF	$	5,321,335	$	5,162,368	$	158,967
02/27/2012		State Street Bank		12,850,000 ZAR		1,636,803		1,601,585		35,218


Exchange Date	Counterparty		Contracts to Receive		U.S. Value at January 31, 2012		In Exchange For		U.S. Value at January 31, 2012		Net Unrealized Gains (Losses)
02/02/2012		State Street Bank		11,500,000 CAD	$	11,468,769		875,150,000 JPY	$	11,481,895	$	(13,126	)
02/02/2012		State Street Bank		894,010,000 JPY		11,729,336		11,500,000 CAD		11,468,769		260,567
02/10/2012		State Street Bank		8,377,152 EUR		10,957,893		65,000,000 NOK		11,075,406		(117,513	)
02/10/2012		State Street Bank		65,000,000 NOK		11,075,406		8,313,509 EUR		10,874,642		200,764
02/21/2012		State Street Bank		474,691,680 JPY		6,229,173		20,400,000 PLN		6,309,191		(80,018	)
02/21/2012		State Street Bank		20,400,000 PLN		6,309,191		471,627,600 JPY		6,188,965		120,226

Forward foreign currency contracts to sell:


Exchange Date	Counterparty		Contracts to Deliver		U.S. Value at January 31, 2012		In Exchange for U.S. $		Net Unrealized Gains (Losses)
02/27/2012		State Street Bank		31,500,000 ZAR	$	4,012,397	$	3,671,842	$	(340,555	)
02/27/2012		State Street Bank		132,300,000 ZAR		16,852,067		16,094,499		(757,568	)
05/02/2012		State Street Bank		1,220,000,000 HUF		5,368,010		5,207,000		(161,010	)

The Fund had average contract amounts of $137,779,288 and $35,037,690 in forward foreign currency exchange contracts to buy and forward foreign currency exchange contracts to sell, respectively, during the three months ended January 31, 2012.

The following is a list of common abbreviations for terms and entities which may have appeared in the portfolio of investments.

ACB — Agricultural Credit Bank

ADR — American Depository Receipt

ADS — American Depository Shares

AGC-ICC — Assured Guaranty Corporation - Insured Custody Certificates

AGM — Assured Guaranty Municipal

AMBAC — American Municipal Bond Assurance Corporation

AMT — Alternative Minimum Tax

AUD — Australian Dollar

BAN — Bond Anticipation Notes

BHAC — Berkshire Hathaway Assurance Corporation

BRL — Brazil Real

CAB — Capital Appreciation Bond

CAD — Canadian Dollar

CCAB — Convertible Capital Appreciation Bond

CDA — Community Development Authority

CDO — Collateralized Debt Obligation

CHF — Swiss Franc

COP — Certificate of Participation

CR — Custody Receipts

DKK — Danish Krone

DRIVER — Derivative Inverse Tax-Exempt Receipts

DW&P — Department of Water & Power

DWR — Department of Water Resources

ECFA — Educational & Cultural Facilities Authority

EDA — Economic Development Authority

EDFA — Economic Development Finance Authority

ETF — Exchange-Traded Fund

EUR — Euro

FFCB — Federal Farm Credit Bank

FGIC — Financial Guaranty Insurance Corporation

FHA — Federal Housing Authority

FHLB — Federal Home Loan Bank

FHLMC — Federal Home Loan Mortgage Corporation

FNMA — Federal National Mortgage Association

FSA — Farm Service Agency

GBP — Great British Pound

GDR — Global Depository Receipt

GNMA — Government National Mortgage Association

GO — General Obligation

HCFR — Healthcare Facilities Revenue

HEFA — Health & Educational Facilities Authority

HEFAR — Higher Education Facilities Authority Revenue

HFA — Housing Finance Authority

HFFA — Health Facilities Financing Authority

HKD — Hong Kong Dollar

HUF — Hungarian Forint

IBC — Insured Bond Certificate

IDA — Industrial Development Authority

IDAG — Industrial Development Agency

IDR — Industrial Development Revenue

IEP — Irish Pound

JPY — Japanese Yen

KRW — Republic of Korea Won

LIBOR — London Interbank Offered Rate

LLC — Limited Liability Company

LLP — Limited Liability Partnership

LOC — Letter of Credit

LP — Limited Partnership

MBIA — Municipal Bond Insurance Association

MFHR — Multi-Family Housing Revenue

MSTR — Municipal Securities Trust Receipts

MTN — Medium Term Note

MUD — Municipal Utility District

MXN — Mexican Peso

MYR — Malaysian Ringgit

NATL-RE — National Public Finance Guarantee Corporation

NOK — Norwegian Krone

NZD — New Zealand Dollar

PCFA — Pollution Control Finance Authority

PCR — Pollution Control Revenue

PFA — Public Finance Authority

PFFA — Public Facilities Financing Authority

PFOTER — Puttable Floating Option Tax-Exempt Receipts

plc — Public Limited Company

PLN — Polish Zloty

PUTTER — Puttable Tax-Exempt Receipts

R&D — Research & Development

RDA — Redevelopment Authority

RDFA — Redevelopment Finance Authority

REIT — Real Estate Investment Trust

ROC — Reset Option Certificates

SAVRS — Select Auction Variable Rate Securities

SBA — Small Business Authority

SEK — Swedish Krona

SFHR — Single Family Housing Revenue

SFMR — Single Family Mortgage Revenue

SGD — Singapore Dollar

SKK — Slovakian Koruna

SPDR — Standard & Poor’s Depositary Receipts

TAN — Tax Anticipation Notes

TBA — To Be Announced

TIPS — Treasury Inflation-Protected Securities

TRAN — Tax Revenue Anticipation Notes

TCR — Transferable Custody Receipts

TRY — Turkish Lira

TTFA — Transportation Trust Fund Authority

TVA — Tennessee Valley Authority

XLCA — XL Capital Assurance

ZAR — South African Rand

ITEM 2.

CONTROLS AND PROCEDURES

(a) The President and Treasurer have concluded that the Wells Fargo Advantage Multi-Sector Income Fund (the “Trust”) disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons based on their evaluation of these controls and procedures as of a date within 90 days of the filing of this report.

(b) There were no significant changes in the Trust’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the 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 Multi-Sector Income Fund

By:		/s/ KARLA M. RABUSCH
		Karla M. Rabusch President
Date:		March 26, 2012

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 Multi-Sector Income Fund

By:		/s/ KARLA M. RABUSCH
		Karla M. Rabusch President
Date:		March 26, 2012

By:		/s/ KASEY L. PHILLIPS
		Kasey L. Phillips Treasurer
Date:		March 26, 2012