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: July 31, 2012

ITEM 1.

PORTFOLIO OF INVESTMENTS


WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND		PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)


Security name	Interest rate			Maturity date	Principal		Value

Agency Securities : 5.03%
FHLMC		8.50	%	4/1/15	$	7,545	$	7,592
FHLMC		8.50		7/1/28		114,413		141,105
FHLMC		8.50		3/1/30		65,807		69,371
FHLMC Series 0196 Class A ±		1.05		12/15/21		76,480		77,484
FHLMC Series 1383 ±		5.80		2/1/37		1,433,696		1,538,577
FHLMC Series 2390 Class FD ±		0.70		12/15/31		70,693		71,144
FHLMC Series 2411 Class F ±		0.80		2/15/32		101,337		102,294
FHLMC Series 2567 Class FH ±		0.65		2/15/33		171,378		171,749
FNMA ±		2.12		12/1/35		1,413,206		1,478,991
FNMA ±		2.28		8/1/36		1,923,014		2,011,974
FNMA ±		2.51		1/1/38		2,626,068		2,711,990
FNMA ±		2.58		6/1/38		3,023,040		3,228,121
FNMA ±		2.62		4/1/36		1,531,425		1,602,514
FNMA ±		2.64		7/1/36		1,033,264		1,099,980
FNMA ±		2.64		5/1/36		823,014		857,582
FNMA ±		4.77		9/1/32		2,079,775		2,233,044
FNMA ±		4.85		4/1/34		2,496,572		2,635,082
FNMA		6.00		4/1/33		184,794		207,980
FNMA ±		6.39		9/1/37		1,536,440		1,688,560
FNMA		6.50		11/1/32		65,123		75,096
FNMA		7.50		7/1/17		90,905		99,263
FNMA		7.50		10/1/28		11,406		11,433
FNMA		7.50		11/1/28		161,686		175,723
FNMA		7.50		2/1/30		42,186		42,949
FNMA		7.50		9/1/30		98,385		106,278
FNMA		8.00		12/1/24		5,363		5,420
FNMA		8.00		6/1/30		33,520		34,242
FNMA		12.00		1/1/16		11,800		13,080
FNMA Series 1996-46 Class FA ±		0.75		8/25/21		46,387		46,615
FNMA Series 2001-25 Class Z		6.00		6/25/31		449,027		503,929
FNMA Series 2001-35 Class F ±		0.85		7/25/31		20,456		20,668
FNMA Series 2001-57 Class F ±		0.75		6/25/31		20,595		20,762
FNMA Series 2001-T10 Class A2		7.50		12/25/41		214,930		254,640
FNMA Series 2002-77 Class FH ±		0.65		12/18/32		147,069		147,750
FNMA Series 2002-97 Class FR ±		0.80		1/25/33		44,171		44,357
FNMA Series 2003-W8 Class 3F2 ±		0.60		5/25/42		977,864		979,285
FNMA Series G91-16 Class F ±		0.70		6/25/21		50,445		50,654
FNMA Series G92-17 Class F ±		1.30		3/25/22		111,402		113,368
FREMF Mortgage Trust Series 2011 Class K16-B ±144A		4.59		11/25/46		1,000,000		1,019,779
FREMF Mortgage Trust Series 2011 Class K701-B ±144A		4.29		7/25/48		165,000		169,819
FREMF Mortgage Trust Series 2011 Class K702-B ±144A		4.77		4/25/44		740,000		779,722
FREMF Mortgage Trust Series 2012 Class B-K705 ±144A		4.16		9/25/44		1,000,000		1,015,719
FREMF Mortgage Trust Series 2012 Class K17-B ±144A		4.35		12/25/44		500,000		497,676
FREMF Mortgage Trust Series 2012 Class K18-B ±144A		4.26		1/25/45		810,000		800,140
FREMF Mortgage Trust Series 2012 Class K19-B ±144A#		4.18		5/25/45		1,000,000		983,700
FREMF Mortgage Trust Series 2012 Class K501-C ±144A		3.49		11/25/46		800,000		757,546
FREMF Mortgage Trust Series 2012 Class K706-B ±144A		4.02		11/25/44		500,000		502,320
FREMF Mortgage Trust Series 2012 Class K706-C ±144A		4.02		11/25/44		555,000		509,058
FREMF Mortgage Trust Series 2012 Class K707-B ±144A		3.88		1/25/47		930,000		923,151
FREMF Mortgage Trust Series 2012 Class K709-B ±144A		3.74		4/25/45		1,000,000		984,600
FREMF Mortgage Trust Series 2012 Class K710-B ±144A		3.95		6/25/47		1,000,000		984,110
GNMA		6.50		6/15/28		69,622		81,861
GNMA		7.25		7/15/17		32,871		36,407
GNMA		7.25		8/15/17		13,781		15,254
GNMA		7.25		8/15/17		26,693		29,375
GNMA		7.25		8/15/17		51,332		56,653
GNMA		7.25		9/15/17		38,657		42,818
GNMA		7.25		10/15/17		42,259		46,486
GNMA		7.25		10/15/17		73,008		80,534
GNMA		7.25		11/15/17		33,750		37,007
GNMA		7.25		1/15/18		28,399		31,909
GNMA		7.25		1/15/18		12,097		13,367
GNMA		7.25		2/15/18		29,001		32,130


PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)		WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND


Security name	Interest rate			Maturity date	Principal		Value

Agency Securities (continued)
GNMA		7.25	%	5/15/18	$	15,063	$	16,468

Total Agency Securities (Cost $33,869,953)								35,128,255

Asset-Backed Securities : 0.11%
CVS Pass-Through Trust Series T (Cost $717,227)		6.04		12/10/28		640,690		734,391

Total Asset-Backed Securities (Cost $717,227)								734,391

					Shares

Common Stocks : 0.06%

Consumer Discretionary : 0.00%

Hotels, Restaurants & Leisure : 0.00%
Trump Entertainment Resorts Incorporated †(i)						1,161		4,644

Telecommunication Services : 0.06%

Diversified Telecommunication Services : 0.06%
Fairpoint Communications Incorporated †						70,442		430,401

Total Common Stocks (Cost $1,617,838)								435,045

					Principal

Corporate Bonds and Notes : 58.38%

Consumer Discretionary : 13.10%

Auto Components : 0.93%

Allison Transmission Incorporated 144A		7.13		5/15/19		3,050,000		3,206,313
Cooper Tire & Rubber Company		7.63		3/15/27		1,895,000		1,868,944
Cooper Tire & Rubber Company		8.00		12/15/19		450,000		482,063
Goodyear Tire & Rubber Company		7.00		5/15/22		400,000		408,500
Goodyear Tire & Rubber Company		8.75		8/15/20		468,000		513,630

								6,479,450

Diversified Consumer Services : 1.34%

Carriage Services Incorporated		7.88		1/15/15		1,795,000		1,812,950
Service Corporation International		6.75		4/1/16		475,000		524,875
Service Corporation International		7.00		6/15/17		1,410,000		1,603,875
Service Corporation International		7.00		5/15/19		650,000		706,875
Service Corporation International		7.50		4/1/27		3,965,000		4,143,425
Service Corporation International		8.00		11/15/21		475,000		559,313

								9,351,313

Hotels, Restaurants & Leisure : 3.59%

Ameristar Casinos Incorporated		7.50		4/15/21		2,150,000		2,316,625
Burger King Corporation		9.88		10/15/18		850,000		974,313
CCM Merger Incorporated 144A		9.13		5/1/19		4,000,000		4,060,000
Chukchansi Economic Development Authority 144A		9.75		5/30/20		1,306,000		966,440
CityCenter Holdings LLC		7.63		1/15/16		175,000		184,406
CityCenter Holdings LLC 144A		7.63		1/15/16		425,000		446,781
CityCenter Holdings LLC ¥		10.75		1/15/17		1,811,822		1,909,207
DineEquity Incorporated		9.50		10/30/18		3,475,000		3,839,875
Greektown Superholdings		13.00		7/1/15		4,125,000		4,485,938
NAI Entertainment Holdings LLC 144A		8.25		12/15/17		1,620,000		1,802,250
Penn National Gaming Incorporated		8.75		8/15/19		250,000		276,563
Ruby Tuesday Incorporated 144A		7.63		5/15/20		2,200,000		1,977,250
Scientific Games Corporation		9.25		6/15/19		485,000		534,713
Speedway Motorsports Incorporated		6.75		2/1/19		225,000		236,813


WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND		PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)


Security name	Interest rate			Maturity date	Principal		Value

Hotels, Restaurants & Leisure (continued)

Speedway Motorsports Incorporated		8.75	%	6/1/16	$	950,000	$	1,030,750

								25,041,924

Household Durables : 0.07%
American Greetings Corporation		7.38		12/1/21		475,000		503,500

Internet & Catalog Retail : 0.11%
Expedia Incorporated		5.95		8/15/20		750,000		803,512

Media : 6.01%

Cablevision Systems Corporation		8.63		9/15/17		1,310,000		1,496,675
CBS Corporation		8.88		5/15/19		750,000		1,015,489
CCH II Capital LLC		13.50		11/30/16		7,535,929		8,346,041
CCO Holdings LLC		6.50		4/30/21		900,000		974,250
CCO Holdings LLC		7.00		1/15/19		500,000		548,750
Cinemark USA Incorporated		7.38		6/15/21		775,000		860,250
Cinemark USA Incorporated		8.63		6/15/19		350,000		390,250
CSC Holdings LLC		7.63		7/15/18		325,000		368,063
CSC Holdings LLC		7.88		2/15/18		1,100,000		1,256,750
CSC Holdings LLC		8.50		4/15/14		400,000		441,000
DIRECTV Holdings LLC		3.80		3/15/22		750,000		793,604
DISH DBS Corporation		7.88		9/1/19		480,000		558,000
EchoStar DBS Corporation		7.13		2/1/16		125,000		137,969
EchoStar DBS Corporation		7.75		5/31/15		350,000		391,563
Gray Television Incorporated		10.50		6/29/15		5,175,000		5,485,500
Interpublic Group of Companies		4.00		3/15/22		750,000		776,894
Lamar Media Corporation		5.88		2/1/22		650,000		685,750
Lamar Media Corporation		7.88		4/15/18		2,150,000		2,386,500
Lamar Media Corporation Series C		9.75		4/1/14		500,000		560,625
LIN Television Corporation		8.38		4/15/18		1,625,000		1,685,938
Local TV Finance LLC 144A¥		9.25		6/15/15		4,775,000		4,870,500
National CineMedia LLC 144A		6.00		4/15/22		850,000		879,750
National CineMedia LLC		7.88		7/15/21		650,000		700,375
Regal Cinemas Corporation		8.63		7/15/19		2,650,000		2,961,375
Salem Communications Corporation		9.63		12/15/16		2,329,000		2,579,368
Time Warner Cable Incorporated		4.00		1/15/22		750,000		825,837

								41,977,066

Specialty Retail : 1.05%

Advance Auto Parts Incorporated		4.50		1/15/22		600,000		644,123
Gap Incorporated		5.95		4/12/21		600,000		634,274
Limited Brands Incorporated		6.63		4/1/21		800,000		889,001
Macys Retail Holdings Incorporated		3.88		1/15/22		600,000		647,152
RadioShack Corporation		6.75		5/15/19		1,950,000		1,248,000
Rent-A-Center Incorporated		6.63		11/15/20		375,000		404,531
Toys “R” Us Property Company I LLC		10.75		7/15/17		725,000		801,125
Toys “R” Us Property Company LLC		8.50		12/1/17		1,905,000		2,057,400

								7,325,606

Consumer Staples : 0.79%

Food & Staples Retailing : 0.10%
SABMiller Holdings Incorporated 144A		3.75		1/15/22		600,000		658,743

Food Products : 0.58%

Dole Food Company Incorporated		13.88		3/15/14		1,452,000		1,640,760
Kraft Foods Incorporated 144A		3.50		6/6/22		750,000		795,797
Smithfield Foods Incorporated		10.00		7/15/14		1,370,000		1,613,175

								4,049,732


PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)		WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND


Security name	Interest rate			Maturity date	Principal		Value

Tobacco : 0.11%
Lorillard Tobacco Company		6.88	%	5/1/20	$	650,000	$	793,893

Energy : 9.22%

Energy Equipment & Services : 3.44%

Bristow Group Incorporated		7.50		9/15/17		1,585,000		1,644,438
Dresser Rand Group Incorporated		6.50		5/1/21		925,000		971,250
Gulfmark Offshore Incorporated 144A		6.38		3/15/22		2,025,000		2,070,563
Hornbeck Offshore Services Incorporated Series B		8.00		9/1/17		2,230,000		2,386,100
NGPL PipeCo LLC 144A		7.12		12/15/17		375,000		385,313
NGPL PipeCo LLC 144A		7.77		12/15/37		2,700,000		2,646,000
NGPL PipeCo LLC 144A		9.63		6/1/19		2,550,000		2,773,125
Oil States International Incorporated		6.50		6/1/19		1,230,000		1,294,575
PHI Incorporated		8.63		10/15/18		2,500,000		2,581,250
Rockies Express Pipeline 144A		3.90		4/15/15		2,000,000		1,950,000
Rockies Express Pipeline 144A		5.63		4/15/20		400,000		380,000
Rockies Express Pipeline 144A		6.88		4/15/40		4,963,000		4,479,108
Rockies Express Pipeline 144A		7.50		7/15/38		500,000		473,750

								24,035,472

Oil, Gas & Consumable Fuels : 5.78%

Coffeyville Resources LLC 144A		9.00		4/1/15		932,000		990,250
Coffeyville Resources LLC 144A		10.88		4/1/17		1,350,000		1,501,875
Crestwood Midstream Part Company		7.75		4/1/19		675,000		685,125
Denbury Resources Incorporated		6.38		8/15/21		350,000		375,375
Denbury Resources Incorporated		8.25		2/15/20		425,000		478,125
El Paso Corporation		6.50		4/1/20		750,000		882,040
El Paso Corporation		6.50		9/15/20		445,000		499,272
El Paso Corporation		7.00		6/15/17		850,000		974,196
El Paso Corporation		7.25		6/1/18		1,585,000		1,828,849
El Paso Corporation		7.42		2/15/37		800,000		858,368
El Paso Corporation		7.80		8/1/31		1,850,000		2,153,962
Encore Acquisition Company		9.50		5/1/16		375,000		410,625
Energy Transfer Equity LP		7.50		10/15/20		3,100,000		3,541,750
Energy Transfer Partners LP		5.20		2/1/22		750,000		829,637
Ferrellgas Finance Corporation		9.13		10/1/17		2,450,000		2,621,500
Holly Corporation		9.88		6/15/17		1,895,000		2,098,713
Inergy LP		6.88		8/1/21		421,000		432,578
Inergy LP		7.00		10/1/18		500,000		516,250
Kinder Morgan Energy Partners LP		3.95		9/1/22		750,000		792,192
Nabors Industries Incorporated		4.63		9/15/21		750,000		804,684
Petrohawk Energy Corporation		7.88		6/1/15		790,000		821,600
Petrohawk Energy Corporation		10.50		8/1/14		495,000		545,817
Phillips 66 144A		4.30		4/1/22		625,000		684,657
Pioneer Natural Resources Company		3.95		7/15/22		750,000		779,048
Pioneer Natural Resources Company		7.50		1/15/20		1,220,000		1,517,093
Plains Exploration & Production Company		8.63		10/15/19		2,885,000		3,245,625
Regency Energy Partners		6.88		12/1/18		250,000		267,500
Sabine Pass LNG LP		7.25		11/30/13		2,265,000		2,355,600
Sabine Pass LNG LP		7.50		11/30/16		3,250,000		3,424,688
Susser Holdings LLC		8.50		5/15/16		975,000		1,062,750
Tesoro Corporation		9.75		6/1/19		945,000		1,072,575
Weatherford International Incorporated		6.35		6/15/17		650,000		751,361
Western Gas Partners LP		5.38		6/1/21		503,000		565,528

								40,369,208

Financials : 14.38%

Capital Markets : 1.15%

Ace Securities Corporation ±		0.65		8/25/45		439,182		421,737
Ace Securities Corporation ±		2.87		6/25/33		751,230		675,163
ETRADE Financial Corporation*		12.50		11/30/17		4,291,000		4,913,195


WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND		PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)


Security name	Interest rate			Maturity date	Principal		Value

Capital Markets (continued)

Goldman Sachs Group Incorporated		5.75	%	1/24/22	$	750,000	$	820,089
Oppenheimer Holdings Incorporated		8.75		4/15/18		1,225,000		1,194,375

								8,024,559

Commercial Banks : 1.20%

CIT Group Incorporated 144A		4.75		2/15/15		1,475,000		1,534,158
CIT Group Incorporated		5.00		5/15/17		250,000		261,250
CIT Group Incorporated 144A		5.25		4/1/14		750,000		781,875
CIT Group Incorporated		5.25		3/15/18		500,000		529,375
CIT Group Incorporated 144A		5.50		2/15/19		1,275,000		1,345,125
City National Bank		5.38		7/15/22		500,000		522,642
Emigrant Bancorp Incorporated 144A(i)		6.25		6/15/14		2,925,000		2,688,762
HSBC Bank USA		6.00		8/9/17		650,000		735,629

								8,398,816

Consumer Finance : 6.97%

Ally Financial Incorporated		5.50		2/15/17		750,000		781,513
Ally Financial Incorporated		8.30		2/12/15		2,055,000		2,283,619
American General Finance Corporation		5.40		12/1/15		1,625,000		1,397,500
American General Finance Corporation		5.75		9/15/16		1,100,000		907,500
American General Finance Corporation		6.50		9/15/17		200,000		162,500
Clearwire Communications Finance Corporation 144A		12.00		12/1/15		1,450,000		1,370,250
Clearwire Communications Finance Corporation 144A		12.00		12/1/15		940,000		883,600
Ford Motor Credit Company LLC		5.00		5/15/18		650,000		693,016
Ford Motor Credit Company LLC		8.00		12/15/16		250,000		295,557
General Motors Financial Company Incorporated		6.75		6/1/18		1,150,000		1,266,487
GMAC LLC		6.75		12/1/14		1,298,000		1,400,218
GMAC LLC		6.88		8/28/12		1,244,000		1,246,488
GMAC LLC		7.50		12/31/13		3,620,000		3,895,265
Homer City Funding LLC		8.73		10/1/26		1,235,276		1,188,953
International Lease Finance Corporation		6.38		3/25/13		460,000		471,500
International Lease Finance Corporation 144A		6.75		9/1/16		100,000		109,750
International Lease Finance Corporation 144A		7.13		9/1/18		75,000		84,844
International Lease Finance Corporation		8.63		9/15/15		900,000		1,014,750
JBS USA Finance Incorporated		11.63		5/1/14		3,745,000		4,245,894
Level 3 Financing Incorporated		10.00		2/1/18		2,010,000		2,195,925
Nielsen Finance LLC Company		7.75		10/15/18		5,100,000		5,737,500
Nielsen Finance LLC Company		11.50		5/1/16		601,000		676,125
Springleaf Finance Corporation		6.90		12/15/17		4,620,000		3,765,300
Sprint Capital Corporation		6.88		11/15/28		11,985,000		10,756,538
Sprint Capital Corporation		8.75		3/15/32		1,855,000		1,850,363

								48,680,955

Diversified Financial Services : 2.70%

Bank of America Corporation		3.70		9/1/15		650,000		672,372
Bank of America Corporation		5.70		1/24/22		250,000		285,871
Blackstone Holdings Finance Company LLC 144A		5.88		3/15/21		750,000		807,622
Citigroup Incorporated		4.50		1/14/22		250,000		263,249
Citigroup Incorporated		6.00		8/15/17		650,000		736,211
Discover Financial Services 144A		5.20		4/27/22		750,000		800,958
Dolphin Subsidiary II Incorporated 144A		7.25		10/15/21		2,400,000		2,730,000
General Electric Capital Corporation		4.65		10/17/21		650,000		743,784
Hub International Holdings Incorporated 144A		10.25		6/15/15		3,625,000		3,643,125
ING US Incorporated 144A		5.50		7/15/22		750,000		766,167
Moody’s Corporation		5.50		9/1/20		1,302,000		1,437,903
Neuberger Berman Group LLC 144A		5.63		3/15/20		500,000		523,750
Neuberger Berman Group LLC 144A		5.88		3/15/22		650,000		687,375
Nuveen Investments Incorporated		5.50		9/15/15		2,950,000		2,655,000
Nuveen Investments Incorporated		10.50		11/15/15		1,550,000		1,573,250


PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)		WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND


Security name	Interest rate			Maturity date	Principal		Value

Diversified Financial Services (continued)

USI Holdings Corporation 144A		9.75	%	5/15/15	$	525,000	$	530,250

								18,856,887

Insurance : 0.49%

American International Group Incorporated		4.88		6/1/22		750,000		799,330
Berkley Corporation		4.63		3/15/22		650,000		675,506
Hartford Financial Services Group		5.13		4/15/22		650,000		692,329
Liberty Mutual Group Incorporated 144A		4.95		5/1/22		750,000		768,839
Prudential Covered Trust Company 144A		3.00		9/30/15		480,000		489,832

								3,425,836

Real Estate Management & Development : 0.27%
Ashtead Capital Incorporated 144A		6.50		7/15/22		1,825,000		1,898,000

REITs : 1.60%

Alexandria Real Estate Company		4.60		4/1/22		650,000		674,832
Dupont Fabros Technology Incorporated		8.50		12/15/17		5,560,000		6,129,900
Health Care Incorporated		5.25		1/15/22		650,000		731,041
Host Hotels & Resorts LP		9.00		5/15/17		235,000		259,088
Omega Healthcare Investors Incorporated		6.75		10/15/22		1,775,000		1,961,375
Ventas Incorporated		4.25		3/1/22		650,000		699,992
WEA Finance LLC 144A		4.63		5/10/21		650,000		703,451

								11,159,679

Health Care : 3.25%

Biotechnology : 0.11%
Amgen Incorporated		3.63		5/15/22		750,000		800,416

Health Care Equipment & Supplies : 0.47%

Biomet Incorporated ¥		10.38		10/15/17		540,000		577,800
Boston Scientific Corporation		6.00		1/15/20		750,000		904,985
CareFusion Corporation		6.38		8/1/19		750,000		903,650
Hologic Incorporated 144A#		6.25		8/1/20		850,000		898,875

								3,285,310

Health Care Providers & Services : 2.12%

Apria Healthcare Group Incorporated		11.25		11/1/14		590,000		616,550
Aristotle Holding Incorporated 144A		3.90		2/15/22		665,000		715,670
Aviv Healthcare Properties LP		7.75		2/15/19		1,025,000		1,059,594
Centene Corporation		5.75		6/1/17		1,000,000		1,048,750
Community Health Systems Incorporated		7.13		7/15/20		775,000		811,813
Community Health Systems Incorporated		8.88		7/15/15		422,000		430,440
Coventry Health Care Incorporated		5.45		6/15/21		750,000		856,571
Emergency Medical Services Corporation		8.13		6/1/19		425,000		452,094
HCA Incorporated		5.88		3/15/22		425,000		457,406
HCA Incorporated		6.50		2/15/20		1,875,000		2,095,313
HCA Incorporated		7.50		11/15/95		800,000		652,000
HCA Incorporated		8.50		4/15/19		375,000		422,578
Health Management Associates Incorporated		6.13		4/15/16		175,000		187,906
HealthSouth Corporation		7.25		10/1/18		400,000		433,500
HealthSouth Corporation		7.75		9/15/22		400,000		435,000
Humana Incorporated		7.20		6/15/18		750,000		907,439
MPT Operating Partnership LP		6.38		2/15/22		475,000		491,625
MPT Operating Partnership LP		6.88		5/1/21		775,000		823,438
PSS World Medical Incorporated		6.38		3/1/22		250,000		261,250
Sabra Health Care LP		8.13		11/1/18		1,450,000		1,558,750


WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND		PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)


Security name	Interest rate			Maturity date	Principal		Value

Health Care Providers & Services (continued)

Tenet Healthcare Corporation		10.00	%	5/1/18	$	75,000	$	87,000

								14,804,687

Life Sciences Tools & Services : 0.13%
Life Technologies Corporation		6.00		3/1/20		750,000		897,255

Pharmaceuticals : 0.42%

Mylan Incorporated 144A		6.00		11/15/18		725,000		781,188
Mylan Incorporated 144A		7.63		7/15/17		1,125,000		1,255,078
Mylan Incorporated 144A		7.88		7/15/20		775,000		881,563

								2,917,829

Industrials : 3.30%

Aerospace & Defense : 0.65%

Alliant Techsystems Incorporated		6.75		4/1/16		1,980,000		2,029,500
GeoEye Incorporated		9.63		10/1/15		485,000		537,138
L-3 Communications Corporation Incorporated		4.95		2/15/21		750,000		828,104
L-3 Communications Corporation Incorporated		6.38		10/15/15		673,000		687,301
TransDigm Group Incorporated		7.75		12/15/18		375,000		418,125

								4,500,168

Airlines : 0.05%
Delta Air Lines Incorporated		4.75		5/7/20		340,000		345,100

Commercial Services & Supplies : 1.56%

ADT Corporation 144A		3.50		7/15/22		750,000		775,108
Casella Waste Systems Incorporated		11.00		7/15/14		1,945,000		2,061,700
Corrections Corporation of America		7.75		6/1/17		1,270,000		1,375,569
Covanta Energy Corporation		6.38		10/1/22		225,000		241,649
Crown Cork & Seal Company Incorporated (i)		7.50		12/15/96		600,000		518,250
Geo Group Incorporated		7.75		10/15/17		1,450,000		1,562,375
Interface Incorporated		7.63		12/1/18		125,000		133,750
Iron Mountain Incorporated		8.38		8/15/21		1,385,000		1,533,888
KAR Holdings Incorporated ±		4.47		5/1/14		1,150,000		1,145,688
Penske Truck Leasing Company 144A		3.75		5/11/17		750,000		760,751
Republic Services Incorporated		3.55		6/1/22		750,000		789,693

								10,898,421

Machinery : 0.71%

Cleaver-Brooks Incorporated 144A		12.25		5/1/16		630,000		672,525
Columbus McKinnon Corporation		7.88		2/1/19		725,000		768,500
CPM Holdings Incorporated		10.63		9/1/14		1,315,000		1,393,900
Titan International Incorporated		7.88		10/1/17		375,000		388,125
UR Financing Escrow Corporation 144A		5.75		7/15/18		1,685,000		1,760,825

								4,983,875

Professional Services : 0.29%

Interactive Data Corporation		10.25		8/1/18		1,250,000		1,415,625
Verisk Analytics Incorporated		5.80		5/1/21		530,000		600,779

								2,016,404

Transportation Infrastructure : 0.04%
Overseas Shipholding Group		7.50		2/15/24		525,000		262,500


PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)		WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND


Security name	Interest rate			Maturity date	Principal		Value

Information Technology : 3.95%

Communications Equipment : 0.30%

Allbritton Communications Company		8.00	%	5/15/18	$	1,275,000	$	1,354,688
Lucent Technologies Incorporated		6.45		3/15/29		1,285,000		732,450

								2,087,138

Computers & Peripherals : 0.11%
Hewlett Packard Company		4.05		9/15/22		750,000		755,180

Electronic Equipment, Instruments & Components : 1.17%

CDW Financial Corporation		12.54		10/12/17		1,725,000		1,850,063
Jabil Circuit Incorporated		8.25		3/15/18		5,275,000		6,330,000

								8,180,063

Internet Software & Services : 0.19%

Equinix Incorporated		7.00		7/15/21		75,000		83,438
Equinix Incorporated		8.13		3/1/18		1,085,000		1,201,638

								1,285,076

IT Services : 2.06%

Audatex North American Incorporated 144A		6.75		6/15/18		750,000		800,625
Fidelity National Information Services Incorporated 144A		5.00		3/15/22		275,000		290,125
Fidelity National Information Services Incorporated		7.63		7/15/17		225,000		248,625
Fidelity National Information Services Incorporated 144A		7.63		7/15/17		175,000		192,500
Fidelity National Information Services Incorporated		7.88		7/15/20		1,000,000		1,127,500
First Data Corporation 144A		7.38		6/15/19		625,000		652,344
First Data Corporation		11.25		3/31/16		4,550,000		4,333,875
SunGard Data Systems Incorporated		7.38		11/15/18		1,545,000		1,641,563
SunGard Data Systems Incorporated		7.63		11/15/20		250,000		268,438
SunGard Data Systems Incorporated		10.25		8/15/15		3,455,000		3,537,056
TW Telecommunications Holdings Incorporated		8.00		3/1/18		675,000		754,313
Unisys Corporation		12.50		1/15/16		80,000		85,200
Unisys Corporation 144A		12.75		10/15/14		434,000		468,720

								14,400,884

Software : 0.12%
CA Incorporated		5.38		12/1/19		750,000		857,068

Materials : 0.99%

Chemicals : 0.38%

Dow Chemical Company		4.13		11/15/21		750,000		827,189
Huntsman International LLC		5.50		6/30/16		1,260,000		1,263,150
Solutia Incorporated		7.88		3/15/20		474,000		560,505
Solutia Incorporated		8.75		11/1/17		33,000		37,373

								2,688,217

Containers & Packaging : 0.10%

Crown Americas LLC		7.63		5/15/17		450,000		488,250
Owens Brockway Glass Container Incorporated		7.38		5/15/16		175,000		197,313

								685,563

Metals & Mining : 0.20%

Alcoa Incorporated		5.40		4/15/21		750,000		769,512
Freeport-McMoRan Copper & Gold Incorporated		3.55		3/1/22		600,000		606,378


WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND		PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)


Security name	Interest rate			Maturity date	Principal		Value

Metals & Mining (continued)

Indalex Holdings Corporation (a)(s)(i)		11.50	%	2/1/14	$	3,170,000	$	0

								1,375,890

Paper & Forest Products : 0.31%

Clearwater Paper Corporation		10.63		6/15/16		545,000		607,675
Georgia-Pacific Corporation		8.88		5/15/31		1,080,000		1,585,187

								2,192,862

Telecommunication Services : 5.40%

Diversified Telecommunication Services : 3.31%

Avaya Incorporated		9.75		11/1/15		575,000		448,500
CenturyLink Incorporated		5.80		3/15/22		600,000		637,384
Citizens Communications Company		7.88		1/15/27		1,805,000		1,619,988
Frontier Communications Corporation		8.13		10/1/18		845,000		921,050
Frontier Communications Corporation		8.25		5/1/14		4,000		4,380
Frontier Communications Corporation		8.25		4/15/17		1,040,000		1,138,800
Frontier Communications Corporation		8.50		4/15/20		525,000		568,313
GCI Incorporated		6.75		6/1/21		425,000		412,250
GCI Incorporated		8.63		11/15/19		5,550,000		5,896,875
Intelsat Jackson Holdings Limited		8.50		11/1/19		850,000		945,625
Qwest Corporation		7.13		11/15/43		795,000		796,988
Qwest Corporation		7.25		9/15/25		1,040,000		1,195,115
Qwest Corporation		7.63		8/3/21		230,000		246,195
SBA Telecommunications Incorporated 144A		5.75		7/15/20		150,000		157,875
SBA Telecommunications Incorporated		8.00		8/15/16		455,000		484,120
SBA Telecommunications Incorporated		8.25		8/15/19		65,000		72,313
Syniverse Holdings Incorporated		9.13		1/15/19		4,575,000		4,998,188
Windstream Corporation		7.88		11/1/17		2,330,000		2,560,088

								23,104,047

Wireless Telecommunication Services : 2.09%

American Tower Corporation		5.90		11/1/21		650,000		737,833
CC Holdings LLC 144A		7.75		5/1/17		325,000		352,219
CC Holdings LLC		8.13		4/30/20		450,000		508,500
Cricket Communications Incorporated		7.75		5/15/16		1,705,000		1,807,300
Cricket Communications Incorporated		7.75		10/15/20		1,550,000		1,480,250
Crown Castle International Corporation		7.13		11/1/19		75,000		82,313
Crown Castle International Corporation		9.00		1/15/15		325,000		354,453
Crown Castle Towers LLC 144A		6.11		1/15/40		750,000		883,962
iPCS Incorporated ¥		3.72		5/1/14		1,357,019		1,333,271
MetroPCS Communications Incorporated		6.63		11/15/20		2,225,000		2,247,250
MetroPCS Communications Incorporated		7.88		9/1/18		775,000		821,500
Motorola Solutions Incorporated		3.75		5/15/22		750,000		768,770
Sprint Nextel Corporation 144A		9.00		11/15/18		325,000		379,438
Sprint Nextel Corporation 144A		11.50		11/15/21		625,000		750,000
Sprint Nextel Corporation Series F		5.95		3/15/14		2,085,000		2,090,213

								14,597,272

Utilities : 4.00%

Electric Utilities : 1.41%

Great Plains Energy Incorporated		4.85		6/1/21		750,000		818,784
IPALCO Enterprises Incorporated		5.00		5/1/18		900,000		927,000
IPALCO Enterprises Incorporated 144A		7.25		4/1/16		1,925,000		2,146,375
Mirant Mid-Atlantic LLC Series C		10.06		12/30/28		3,614,632		3,921,876
Otter Tail Corporation		9.00		12/15/16		1,835,000		1,990,975
PNM Resources Incorporated		9.25		5/15/15		9,000		10,283

								9,815,293


PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)		WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND


Security name	Interest rate			Maturity date	Principal		Value

Gas Utilities : 0.33%

AmeriGas Finance LLC		6.75	%	5/20/20	$	1,775,000	$	1,877,063
AmeriGas Finance LLC		7.00		5/20/22		425,000		451,563

								2,328,626

Independent Power Producers & Energy Traders : 2.01%

Calpine Construction Finance Corporation 144A		7.25		10/15/17		4,925,000		5,331,313
Calpine Construction Finance Corporation 144A		8.00		6/1/16		1,350,000		1,463,063
NRG Energy Incorporated		7.38		1/15/17		3,475,000		3,605,313
NRG Energy Incorporated		8.50		6/15/19		1,615,000		1,728,050
Reliant Energy Incorporated		7.63		6/15/14		450,000		479,250
Reliant Energy Incorporated		9.24		7/2/17		946,943		989,556
Reliant Energy Incorporated		9.68		7/2/26		410,000		430,500

								14,027,045

Multi-Utilities : 0.21%

Ameren Illinois Company		9.75		11/15/18		500,000		680,221
CMS Energy Corporation		5.05		3/15/22		750,000		800,383

								1,480,604

Oil, Gas & Consumable Fuels : 0.04%
Suburban Propane Partners LP		7.38		3/15/20		275,000		288,750

Total Corporate Bonds and Notes (Cost $387,464,096)								407,695,694

Foreign Corporate Bonds and Notes @: 5.24%

Consumer Discretionary : 0.65%

Automobiles : 0.14%

Aston Martin Capital Limited (GBP)		9.25		15/7/18		400,000		509,551
Jaguar Land Rover plc (GBP)		8.25		15/3/20		300,000		483,290

								992,841

Hotels, Restaurants & Leisure : 0.34%

Casino Guichard Perrachon SA (EUR)		4.73		26/5/21		900,000		1,231,070
ODEON & UCI Cinemas Group (GBP)		9.00		1/8/18		300,000		456,244
William Hill plc (GBP)		7.13		11/11/16		396,000		681,403

								2,368,717

Media : 0.17%

UPC Holding BV (EUR)		9.63		1/12/19		470,000		640,454
Ziggo Bond Company BV (EUR)		8.00		15/5/18		200,000		268,227
Ziggo Bond Company BV 144A(i) (EUR)		8.00		15/5/18		200,000		268,227

								1,176,908

Consumer Staples : 0.15%

Food & Staples Retailing : 0.15%

Foodcorp Limited (EUR)		8.75		1/3/18		820,000		1,019,017

Financials : 3.69%

Commercial Banks : 2.48%

Eurofima (AUD)		6.25		28/12/18		2,450,000		2,789,609
European Investment Bank (AUD)		6.13		23/1/17		6,930,000		7,798,467
International Bank for Reconstruction & Development (AUD)		5.75		1/10/20		950,000		1,121,873
KfW Bankengruppe (AUD)		6.25		4/12/19		1,225,000		1,455,812


WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND		PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)


Security name	Interest rate			Maturity date	Principal		Value

Commercial Banks (continued)

KfW Bankengruppe (NZD)		6.38	%	17/2/15		4,819,000	$	4,186,905

								17,352,666

Consumer Finance : 0.07%
Fiat Industrial SpA (EUR)		6.25		9/3/18		400,000		504,464

Diversified Financial Services : 0.44%

General Electric Capital Corporation (NZD)		7.63		10/12/14		2,000,000		1,736,569
Voto-Votorantim Limited (EUR)		5.25		28/4/17		1,000,000		1,319,860

								3,056,429

Thrifts & Mortgage Finance : 0.70%

Dexia Kommunalbank AG (EUR)		3.50		5/6/14		3,100,000		3,974,773
Nationwide Building Society (EUR)		3.75		20/1/15		700,000		901,512

								4,876,285

Industrials : 0.39%

Building Products : 0.07%
Heidelbergcement AG (EUR)		8.50		31/10/19		330,000		471,505

Commercial Services & Supplies : 0.04%
Iron Mountain Incorporated (EUR)		6.75		15/10/18		250,000		309,138

Trading Companies & Distributors : 0.08%

Rexel SA (EUR)		7.00		17/12/18		200,000		268,227
Rexel SA (EUR)		8.25		15/12/16		200,000		271,303

								539,530

Transportation Infrastructure : 0.20%
BAA Funding Limited (EUR)		4.60		15/2/20		1,000,000		1,360,647

Materials : 0.16%

Metals & Mining : 0.09%
New World Resources NV (EUR)		7.38		15/5/15		500,000		605,972

Paper & Forest Products : 0.07%
Smurfit Kappa Funding plc (EUR)		7.25		15/11/17		400,000		527,226

Telecommunication Services : 0.12%

Diversified Telecommunication Services : 0.12%

Telefonica Emisiones Company (EUR)		4.69		11/11/19		300,000		334,435
Virgin Media Finance plc (GBP)		8.88		15/10/19		300,000		523,270

								857,705

Utilities : 0.08%

Water Utilities : 0.08%
Zinc Capital SA (EUR)		8.88		15/5/18		500,000		575,212

Total Foreign Corporate Bonds and Notes (Cost $33,265,469)								36,594,262

Foreign Government Bonds @: 26.81%
Australia Series 124 (AUD)		5.75		15/5/21		2,750,000		3,516,147
Australia Series 22 (AUD)		6.00		21/7/22		4,000,000		4,730,018
Brazil (BRL)		12.50		5/1/16		26,000,000		15,574,370


PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)		WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND


Security name	Interest rate			Maturity date	Principal		Value

Foreign Government Bonds @ (continued)
Brazil (BRL)		12.50	%	5/1/22		19,500,000	$	13,679,119
Chile (CLP)		5.50		5/8/20		1,700,000,000		3,848,990
Colombia (COP)		7.75		14/4/21		10,000,000,000		7,020,256
Hungary (HUF)		6.75		24/11/17		4,720,000,000		19,982,309
Korea (KRW)		5.25		10/9/15		1,850,000,000		1,747,199
Korea (KRW)		5.25		10/3/27		2,830,000,000		3,088,957
Mexico (MXN)		7.25		15/12/16		207,000,000		17,017,848
Mexico (MXN)		8.50		18/11/38		69,900,000		6,634,863
New Zealand (NZD)		6.00		15/12/17		6,705,000		6,245,906
Peru (PEN)		7.84		12/8/20		20,000,000		9,202,589
Poland (PLN)		4.75		25/10/16		25,500,000		7,732,778
Poland (PLN)		5.25		25/10/20		59,000,000		18,257,090
Queensland Treasury (AUD)		6.00		1/3/22		3,600,000		4,392,154
Russia (RUB)		7.85		10/3/18		455,000,000		15,087,593
South Africa (ZAR)		2.60		31/3/28		66,189,971		8,642,116
South Africa (ZAR)		6.50		28/2/41		101,000,000		10,137,163
Turkey ¤ (TRY)		0.00		20/2/13		20,000,000		10,688,916

Total Foreign Government Bonds (Cost $184,571,230)								187,226,381

Non-Agency Mortgage Backed Securities : 6.34%
American General Mortgage Loan Series 2009 Series 1-A6 ±144A		5.75		9/25/48	$	1,000,000		1,024,965
American General Mortgage Loan Series 2010 Class 1A-A3 ±144A		5.65		3/25/58		460,000		481,347
American Home Mortgage Assets Series 2006-2 Class 1A1 ±		1.11		9/25/46		4,059,239		2,090,480
Banc of America Commercial Mortgage Securities Incorporated Series 2006-03 Class AM ±		5.86		7/10/44		1,340,000		1,352,658
Banc of America Commercial Mortgage Securities Incorporated Series 2008-1 Class AM ±		6.25		2/10/51		550,000		599,894
Banc of America Funding Corporation Series 2005 Class 5-1A1		5.50		9/25/35		689,016		719,473
Banc of America Funding Corporation Series 2009 Class R6-3A1 ±144A		2.30		1/26/37		89,889		90,345
Banc of America Mortgage Securities Series 2003 Class A-3A1 ±		2.86		2/25/33		192,373		163,571
Bear Stearns Asset Backed Securities Series 2006 Class 1A2 ±		0.47		12/25/35		299,287		290,381
Bear Stearns Commercial Mortgage Series 2007-PW17 Class AM ±		5.90		6/11/50		318,000		342,539
Bear Stearns Commercial Mortgage Series 2007-PW18 Class AM ±		6.08		6/11/50		100,000		109,003
Carrington Mortgage Loan Trust Series 2005-FRE1 Class A5 ±		0.53		12/25/35		100,000		97,585
Centex Home Equity Series 2002-A Class AF6		5.54		1/25/32		618,857		625,042
Centex Home Equity Series 2002-D Class AF6 ±		4.66		12/25/32		210,082		213,020
Centex Home Equity Series 2004-B Class AF6		4.19		3/25/34		305,000		305,665
Chase Funding Mortgage Loan Series 2003 Class 5-1A4		4.40		2/25/30		166,525		167,287
Citigroup Commercial Mortgage Series 2006 Class C4 ±		5.73		3/15/49		680,000		740,609
Citigroup Commercial Mortgage Series 2006 Class C5		5.46		10/15/49		325,000		354,829
Citigroup Mortgage Loan Trust Incorporated Series 2003-HE3 Class A3 ±		0.63		12/25/33		126,574		112,124
Countrywide Asset Backed Certificates Series 2003-5 Class AF5		5.94		2/25/34		97,099		98,680
Countrywide Asset Backed Certificates Series 2007-7 Class 2A1 ±		0.33		10/25/47		97,298		97,014
Countrywide Home Loans Series 2003-48 Class 2A2 ±		1.45		10/25/33		297,270		292,812
Credit Based Asset Servicing Series 2005-CB2 Class M1 ±		0.69		4/25/36		370,469		330,888
Credit Suisse First Boston Mortgage Securities Series 2002-AR13 Class A4 ±		2.37		5/25/32		105,493		102,439
Credit Suisse First Boston Mortgage Securities Series 2002-AR5 Class 1A1 ±		2.29		9/25/32		696,698		602,599
Credit Suisse First Boston Mortgage Securities Series 2003-AR9 class 2A2 ±		2.59		3/25/33		61,332		57,997
Credit Suisse Mortgage Capital Series 2006 ±		5.81		6/15/38		1,000,000		1,085,446
Equity One Asset Backed Securities Series 2004-2 Class AF4 ±		4.62		7/25/34		423,501		423,716
First Franklin Mortgage Loan Assets Series 2005-FT9 Class A3 ±		0.53		10/25/35		219,913		216,780
First Horizon Mortgage Pass Through Series 2004-AR1 Class 1A1 ±		2.59		2/25/34		646,931		589,208
Fremont Home Loan Trust Series 2006-2 Class 2A2 ±		0.36		2/25/36		54,036		53,852
Greenwich Capital Commercial Funding Corporation Series 2006-GG7 Class AM ±		5.87		7/10/38		2,570,000		2,734,850
Greenwich Capital Commercial Funding Corporation Series 2007-GG11 Class A4		5.74		12/10/49		475,000		535,716
GS Mortgage Securities Trust Series 2006-GG6 Class AM ±		5.62		4/10/38		800,000		840,009
GS Mortgage Securities Trust Series 2007-GG10 Class A4 ±		5.79		8/10/45		1,000,000		1,126,479


WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND		PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)


Security name	Interest rate			Maturity date	Principal		Value

Non-Agency Mortgage Backed Securities (continued)
GS Mortgage Securities Trust Series 2010-C1 Class X ±144A(c)		1.55	%	8/10/43	$	6,672,860	$	552,766
GSMPS Mortgage Loan Trust Series 2006-1 Class A1 ±144A		0.55		3/25/35		182,354		149,106
GSMPS Mortgage Loan Trust Series 2006-SEA1 Class A ±144A		0.55		5/25/36		494,898		470,176
JPMorgan Chase Commercial Mortgage Trust Series 2006-LDP9 Class AM		5.37		5/15/47		500,000		498,962
JPMorgan Chase Commercial Mortgage Trust Series 2007-CB18 Class AM ±		5.47		6/12/47		875,000		917,588
JPMorgan Chase Commercial Mortgage Trust Series 2007-CB20 Class AM ±		5.88		2/12/51		785,000		849,128
JPMorgan Mortgage Trust Series 2004-A3 Class 2A1 ±		3.00		7/25/34		184,900		170,210
JPMorgan Mortgage Trust Series 2004-A3 Series 3A3 ±		4.87		7/25/34		200,000		194,816
JPMorgan Mortgage Trust Series 2005-A3 Class 11A2 ±		4.48		6/25/35		575,000		583,166
JPMorgan Mortgage Trust Series 2005-A5 Class 3A2 ±		2.77		8/25/35		563,812		560,794
JPMorgan Mortgage Trust Series 2009-7 Class 2A1 ±144A		6.00		2/27/37		113,179		114,649
JPMorgan Mortgage Trust Series 2009-7 Class 5A1 ±144A		6.00		2/27/37		673,445		683,833
LB UBS Commercial Mortgage Trust Series 2007-C1 Class AM		5.46		2/15/40		750,000		790,526
Lehman XS Trust Series 2006-18N Class A5A ±(i)		0.42		12/25/36		3,547,816		1,562,433
MASTR Adjustable Rate Mortgage Series 2003-6 Class 3A1 ±		2.76		12/25/33		950,114		906,118
MASTR Alternative Loans Trust Series 2005-1 Class 5A1		5.50		1/25/20		150,474		153,789
Merrill Lynch Countrywide Commercial Mortgage Trust Series 2006-4 Class AM ±		5.20		12/12/49		340,000		340,036
Merrill Lynch Countrywide Commercial Mortgage Trust Series 2007-7 Class A4 ±		5.74		6/12/50		470,000		511,931
Merrill Lynch Countrywide Commercial Mortgage Trust Series 2007-9 Class A4		5.70		9/12/49		829,000		920,176
Merrill Lynch Mortgage Trust Series 2005-A8 Class A1B3 ±		5.25		8/25/36		120,000		124,169
Merrill Lynch Mortgage Trust Series 2006-C1 Class AM ±		5.66		5/12/39		565,000		618,191
MLCC Mortgage Investors Incorporated Series 2003-G Class A2 ±		1.42		1/25/29		264,324		216,629
Morgan Stanley Capital I Trust Series 2005-HQ6 Class A4B		5.04		8/13/42		650,000		690,398
Morgan Stanley Capital I Trust Series 2006-HQ10 Class AM		5.36		11/12/41		500,000		539,449
Morgan Stanley Capital I Trust Series 2006-HQ8 Class AM ±		5.47		3/12/44		1,000,000		1,081,946
Morgan Stanley Capital I Trust Series 2006-HQ9 Class AM ±		5.77		7/12/44		25,000		28,064
Morgan Stanley Capital I Trust Series 2006-IQ12 Class AM		5.37		12/15/43		500,000		535,688
Morgan Stanley Capital I Trust Series 2007-HQ11 Class AM ±		5.48		2/12/44		500,000		533,146
Morgan Stanley Capital I Trust Series 2007-LQ16 Class AM ±		6.10		12/12/49		800,000		867,329
Morgan Stanley Capital I Trust Series 2010-GG10 Class A4B ±144A		5.79		8/15/45		615,000		647,106
Morgan Stanley Capital I Trust Series 2010-R5 Class 3A ±144A		0.49		3/26/37		292,102		285,494
Morgan Stanley Capital I Trust Series 2012-C5 Class XA ±144A(c)		2.10		8/15/45		6,000,000		680,280
Morgan Stanley Capital Incorporated Series 2004-NC1 Class M1 ±		1.30		12/27/33		919,889		805,722
New Century Home Equity Loan Series 2004-3 Class M1 ±		1.18		11/25/34		1,165,049		825,906
RAAC Series 2005-SP2 Class 1A3 ±		0.65		5/25/44		251,138		251,964
Renaissance Home Equity Loan Trust Series 2004-4 Class AF4		4.88		2/25/35		879,894		895,273
Residential Asset Mortgage Products Incorporated Series 2006-EFC1 Class A2 ±		0.45		2/25/36		392,545		378,107
Residential Asset Securities Series 2004-KS3 Class AI4 ±		3.77		1/25/32		410,822		408,183
Residential Funding Mortgage Securities I Series 2004-S9 Class 1A19		5.50		12/25/34		200,000		202,321
Saxon Asset Securities Trust Series 2002-1 Class AF5 ±		6.76		12/25/30		214,701		206,331
Saxon Asset Securities Trust Series 2003-1 Class AF7		4.03		6/25/33		884,388		884,648
Soundview Home Equity Loan Trust Series 2005-OPT2 Class A5 ±		0.62		8/25/35		255,256		253,425
Structured Asset Securities Corporation Series 2002-9 Class A2 ±		0.55		10/25/27		158,449		150,682
Structured Asset Securities Corporation Series 2005 Class 1A7 ±144A		0.49		2/25/35		35,416		35,313
Terwin Mortgage Trust Series 2003-6HE Class A3 ±		1.39		11/25/33		375,520		317,005
Wachovia Bank Commercial Mortgage Trust Series 2006-C23 Class AM ±		5.47		1/15/45		1,220,000		1,327,439
Washington Mutual Mortgage Trust Series 2004-RA4 Class 3A		7.50		7/25/34		440,898		462,411

Total Non-Agency Mortgage Backed Securities (Cost $43,911,088)								44,252,124


PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)		WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND


Security name	Dividend yield				Shares		Value

Preferred Stocks : 0.09%

Financials : 0.09%

Diversified Financial Services : 0.09%
GMAC Capital Trust I ±		8.13	%			27,000	$	658,260

Total Preferred Stocks (Cost $675,000)								658,260

	Interest rate			Maturity date	Principal

Term Loans : 18.76%
Advantage Sales & Marketing LLC		9.25		6/18/18	$	475,000		472,625
Allison Transmission Incorporated		2.75		8/7/14		3,235,427		3,220,350
Ameristar Casinos Incorporated		4.00		4/13/18		1,009,997		1,011,380
Applied Systems Incorporated		5.50		3/8/19		598,500		594,759
Atlantic Broadband Finance LLC		5.25		4/3/19		1,850,000		1,851,850
B&G Foods Incorporated		4.50		11/18/18		771,125		774,017
Barrington Broadcasting Group		7.50		6/8/17		3,651,081		3,672,367
Capital Automotive LP		5.25		3/10/17		3,617,459		3,611,418
CCC Information Services Incorporated		5.50		11/11/15		192,872		192,089
CCM Merger Incorporated		6.00		3/1/17		3,764,890		3,720,954
Charter Communications Operating LLC		4.00		4/26/19		1,870,313		1,866,647
Coinmach Corporation		3.25		11/20/14		3,313,060		3,176,397
Covanta Energy Holdings		4.00		3/23/19		2,593,500		2,581,829
Crown Castle International Corporation		4.00		1/25/19		6,616,750		6,598,025
DineEquity Incorporated		4.27		10/19/17		1,815,454		1,818,177
Dunkin Brands Incorporated		4.00		11/23/17		3,182,019		3,158,154
Energy Transfer Equity LP		3.75		3/21/17		2,325,000		2,288,195
Entercom Radio LLC		6.25		11/30/18		262,167		262,363
Fairpoint Communications Incorporated		6.50		1/22/16		2,704,269		2,436,086
Federal Mogul Corporation		2.18		12/29/14		3,429,259		3,256,184
Federal Mogul Corporation		2.19		12/28/15		3,961,628		3,761,684
First Data Corporation		3.00		9/24/14		916,226		889,124
First Data Corporation		3.00		9/24/14		1,408,988		1,367,310
First Data Corporation		3.00		9/24/14		3,094,510		3,002,975
Focus Brands Incorporated		6.27		3/5/18		430,193		432,881
Focus Brands Incorporated		10.25		8/22/18		1,300,000		1,308,125
Genesys Telecommunication		6.75		1/25/19		1,970,063		1,987,301
Goodyear Tire & Rubber Company		4.75		4/12/19		6,200,000		6,129,134
Gray Television Incorporated		3.75		12/31/14		966,297		958,142
Helm Holdings Corporation		6.25		6/2/17		2,605,980		2,592,951
HHI Holdings LLC		7.00		3/21/17		938,130		938,130
Interactive Data Corporation		4.50		2/12/18		3,349,546		3,353,733
KAR Auction Services Incorporated		5.00		5/19/17		4,957,510		4,985,421
Level 3 Financing Incorporated		2.65		3/13/14		2,700,000		2,689,200
LIN Television Corporation		5.00		12/15/18		398,000		398,995
LPL Holdings		2.75		3/23/17		543,125		525,642
LPL Holdings		4.00		3/22/19		3,765,563		3,751,404
MedAssets Incorporated		5.25		11/16/16		616,659		618,355
Merisant Company (i)		7.50		1/8/14		774,969		767,220
Mission Broadcasting Incorporated		5.00		9/30/16		77,342		76,762
Newsday LLC		10.50		8/1/13		2,755,000		2,792,027
Nexstar Broadcasting Incorporated		5.00		9/30/16		215,914		214,295
Nielsen Finance LLC Class C		3.50		5/2/16		273,604		272,750
Nielsen Finance LLC Class D		2.50		2/7/17		222,188		214,829
Novelis Incorporated		4.00		3/10/17		992,500		984,808
nTelos Incorporated		4.00		8/7/15		996,448		988,975
Panolam Industries International Incorporated (i)		8.25		12/31/13		203,429		199,361
Penn National Gaming Incorporated		3.75		7/16/18		994,975		996,845
Phillips Van Heusen Corporation		3.50		5/6/16		124,370		124,104
Prestige Brands International		5.27		12/20/18		288,068		290,050
RailAmerica Incorporated		4.00		2/27/19		598,500		598,003
Rexnord Corporation		5.00		4/30/18		1,094,500		1,099,195
SBA Communications Corporation		3.75		6/29/18		1,989,950		1,984,975
Springleaf Finance Corporation		5.50		5/5/17		700,000		668,206


WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND		PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)


Security name	Interest rate			Maturity date	Principal		Value

Term Loans (continued)
Syniverse Technologies Incorporated		5.00	%	4/10/19	$	1,000,000	$	996,250
Telesat Holdings Incorporated		4.25		3/26/19		2,650,000		2,641,547
Texas Competitive Electric Holding LLC		3.75		10/10/14		17,121,983		11,915,873
Texas Competitive Electric Holding LLC		4.75		10/10/17		375,000		238,084
Total Safety US Incorporated		7.50		10/27/17		895,500		896,243
Towerco Finance LLC		4.50		4/12/18		1,937,676		1,938,490
Transdigm Incorporated		4.00		2/14/17		2,704,642		2,707,536
Tronox Incorporated		4.25		2/2/18		1,885,714		1,849,188
Tronox Incorporated		4.25		2/2/18		514,286		504,324
United Surgical Partners International Incorporated		5.25		4/19/17		1,941,441		1,923,638
United Surgical Partners International Incorporated		6.00		3/19/19		1,321,688		1,324,992
Valeant Pharmaceuticals International		4.75		2/8/19		1,695,750		1,695,750
Warnaco Incorporated		3.75		6/15/18		596,985		596,239
Web Service Company LLC		7.00		8/28/14		455,807		451,249
Wendys Arbys Restaurants LLC		4.75		5/3/19		2,800,000		2,807,000

Total Term Loans (Cost $133,044,051)								131,013,181

Yankee Corporate Bonds and Notes : 8.90%

Consumer Discretionary : 1.07%

Media : 1.07%

Grupo Televisa SA		6.00		5/15/18		750,000		886,467
Intelsat Jackson Holdings SA		7.25		10/15/20		875,000		934,063
Intelsat Jackson Holdings SA 144A		7.25		10/15/20		900,000		956,250
Intelsat Luxembourg SA ¥		11.50		2/4/17		2,675,000		2,782,000
Myriad International Holdings BV 144A		6.38		7/28/17		750,000		834,375
Videotron Limited		5.00		7/15/22		200,000		209,000
Videotron Limited		9.13		4/15/18		775,000		846,688

								7,448,843

Consumer Staples : 0.47%

Beverages : 0.12%
Pernod Ricard SA 144A		4.45		1/15/22		760,000		825,560

Food Products : 0.24%
Brasil Foods SA Company 144A		5.88		6/6/22		1,600,000		1,696,000

Tobacco : 0.11%
BAT International Finance plc 144A		3.25		6/7/22		750,000		768,696

Energy : 1.84%

Energy Equipment & Services : 0.12%
Ensco plc		4.70		3/15/21		750,000		842,160

Oil, Gas & Consumable Fuels : 1.72%

Griffin Coal Mining Company Limited (s)		9.50		12/1/16		310,082		263,182
Griffin Coal Mining Company Limited 144A(s)		9.50		12/1/16		3,792,790		3,219,130
Lukoil International Finance Company		7.25		11/5/19		600,000		696,000
Petrobras International Finance Company		5.38		1/27/21		670,000		750,241
Petroleos Mexicanos 144A		4.88		1/24/22		750,000		845,625
Petroplus Finance Limited		5.75		1/20/20		650,000		735,027
Ship Finance International Limited		8.50		12/15/13		3,720,000		3,701,400
TNK BP Finance SA		6.63		3/20/17		1,150,000		1,273,625
Woodside Finance Limited 144A		8.75		3/1/19		405,000		525,799

								12,010,029


PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)		WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND


Security name	Interest rate			Maturity date	Principal		Value

Financials : 1.07%

Commercial Banks : 0.84%

Banco de Brasil 144A		5.88	%	1/26/22	$	750,000	$	788,475
Banco de Credito del Peru (i)		4.75		3/16/16		1,200,000		1,266,000
Banco del Estado de Chile 144A		3.88		2/8/22		650,000		684,321
Export Import Bank of Korea		5.00		4/11/22		750,000		853,228
Macquarie Bank Limited 144A		5.00		2/22/17		750,000		777,410
Royal Bank of Scotland plc		4.38		3/16/16		750,000		783,239
Standard Chartered Bank 144A		6.40		9/26/17		650,000		733,200

								5,885,873

Diversified Financial Services : 0.23%

BM&F Bovespa SA		5.50		7/16/20		500,000		543,250
Corporación Andina de Fomento		4.38		6/15/22		958,000		1,037,711
Preferred Term Securities XII Limited (s)(i)		2.09		12/24/33		635,000		191

								1,581,152

Industrials : 0.29%

Airlines : 0.08%
Aguila 3 SA		7.88		1/31/18		500,000		530,000

Commercial Services & Supplies : 0.09%
Tyco Electronics Group SA		3.50		2/3/22		625,000		648,778

Road & Rail : 0.12%
Canadian Pacific Railway Company		4.50		1/15/22		750,000		829,862

Information Technology : 0.51%

Computers & Peripherals : 0.40%

Seagate Technology HDD Holdings		6.80		10/1/16		650,000		723,125
Seagate Technology HDD Holdings		6.88		5/1/20		300,000		323,625
Seagate Technology HDD Holdings		7.00		11/1/21		375,000		407,344
Seagate Technology HDD Holdings		7.75		12/15/18		1,225,000		1,356,688

								2,810,782

Internet Software & Services : 0.11%
Tencent Holdings Limited 144A		4.63		12/12/16		750,000		788,729

Materials : 1.34%

Metals & Mining : 0.92%

ArcelorMittal		4.50		2/25/17		725,000		717,888
Gold Fields Orogen Holdings Company		4.88		10/7/20		1,300,000		1,268,771
Novelis Incorporated		7.25		2/15/15		1,030,000		1,030,000
Novelis Incorporated		8.38		12/15/17		550,000		602,250
Novelis Incorporated		8.75		12/15/20		725,000		804,750
Teck Resources Limited		10.75		5/15/19		1,025,000		1,240,250
Vale Overseas Limited		4.38		1/11/22		750,000		784,770

								6,448,679

Paper & Forest Products : 0.42%
Sappi Limited 144A		7.50		6/15/32		3,560,000		2,901,400

Telecommunication Services : 2.05%

Diversified Telecommunication Services : 1.63%

Ericsson LM		4.13		5/15/22		750,000		765,044


WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND		PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)


Security name			Interest rate			Maturity date	Principal		Value

Diversified Telecommunication Services (continued)

Intelsat Jackson Holdings Limited				7.25	%	4/1/19	$	1,425,000	$	1,522,969
Intelsat Jackson Holdings Limited				7.50		4/1/21		525,000		561,750
Intelsat Jackson Holdings Limited				11.25		6/15/16		2,949,000		3,103,823
Qtel International Finance Limited				5.00		10/19/25		500,000		551,250
Sable International Finance Limited				7.75		2/15/17		350,000		365,750
Virgin Media Finance plc				6.50		1/15/18		650,000		715,000
Vivendi SA 144A				4.75		4/12/22		750,000		739,920
Wind Acquisition Finance SpA 144A				11.75		7/15/17		3,660,000		3,037,800

										11,363,306

Wireless Telecommunication Services : 0.42%

Digicel Group Limited 144A				12.00		4/1/14		1,335,000		1,485,188
Globo Communicacoes Participacoes SA 144A				4.88		4/11/22		750,000		812,813
Telesat Canada Incorporated 144A				6.00		5/15/17		625,000		646,875

										2,944,876

Utilities : 0.26%

Electric Utilities : 0.26%

Comision Federal de Electricidad 144A				4.88		5/26/21		650,000		734,500
Eskom Holdings Limited				5.75		1/26/21		1,000,000		1,108,750

										1,843,250

Total Yankee Corporate Bonds and Notes (Cost $59,171,413)										62,167,975

			Yield				Shares

Short-Term Investments : 2.24%

Investment Companies : 2.24%

Wells Fargo Advantage Cash Investment Money Market Fund, Select Class (l)(u)##				0.16				15,640,267		15,640,267

Total Short-Term Investments (Cost $15,640,267)										15,640,267

Total Investments in Securities (Cost $893,947,632)*	131.96	%								921,545,835

Other Assets and Liabilities, Net	(31.96	)								(223,205,500	)


Total Net Assets	100.00	%							$	698,340,335

±	Variable rate investment

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.

#	Security issued on a when-issued basis.

†	Non-income earning 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.

(s)

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

(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.

@	Foreign bond principal is denominated in local currency.

¤	Security issued in zero coupon form with no periodic interest payments.

(c)

Interest-only securities entitle holders to receive only the interest payments on the underlying mortgages. The principal amount shown is the notional amount of the underlying mortgages. Interest rate disclosed represents the coupon rate.

(l)

Investment in an affiliate.


PORTFOLIO OF INVESTMENTS — July 31, 2012 (UNAUDITED)		WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND

(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.

*	Cost for federal income tax purposes is $900,799,591 and unrealized appreciation (depreciation) consists of:


Gross unrealized appreciation	$	38,076,864
Gross unrealized depreciation		(17,330,620	)

Net unrealized appreciation	$	20,746,244

WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND

NOTES TO PORTFOLIO OF INVESTMENTS — JULY 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 original 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 Valuation Procedures.

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 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 Valuation Procedures.

Securities denominated in foreign currencies are translated into U.S. dollars using the closing rates of exchange in effect on the day of valuation.

Investments in open-end mutual funds and non-registered investment companies are fair 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. The Board of Trustees has established a Valuation Committee comprised of the Trustees and has delegated to it the authority to take any actions regarding the valuation of portfolio securities that the Valuation Committee deems necessary in determining the fair value of portfolio securities, unless the responsibility has been delegated to the Management Valuation Team of Wells Fargo Funds Management, LLC (“Funds Management”). The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Fair Value Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees considers for ratification any valuation actions taken by the Valuation Committee or the Management Valuation Team.

Valuations of fair valued securities are compared to the next actual sales price when available, or other appropriate market information to assess the continued appropriateness of the fair valuation methodology used. These securities are fair valued on a day-to-day basis, taking into consideration changes to appropriate market information and any significant changes to the input factors considered in the valuation process until there is a readily available price provided on the exchange or by an independent pricing service. Valuations received from an independent pricing service or broker quotes are periodically validated by comparisons to most recent trades and valuations provided by other independent pricing services in addition to the review of prices by the adviser and/or sub-adviser. Unobservable inputs used in determining fair valuations are identified based on the type of security, taking into consideration factors utilized by market participants in valuing the investment, knowledge about the issuer and the current market environment.

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.

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 in an amount at least equal in value to the Fund’s commitment to purchase when-issued securities. 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.

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 July 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
Agency securities	$	0	$	35,128,255	$	0	$	35,128,255

Asset-backed securities		0		734,391		0		734,391

Equity securities

Common stocks		430,401		0		4,644		435,045

Preferred stocks		658,260		0		0		658,260

Corporate bonds and notes		0		407,695,694		0		407,695,694

Foreign corporate bonds and notes		0		36,594,262		0		36,594,262

Foreign government bonds		0		187,226,381		0		187,226,381

Non agency mortgage-backed securities		0		44,252,124		0		44,252,124
Term loans		0		114,947,869		16,065,312		131,013,181

Yankee corporate bonds and notes		0		62,167,975		0		62,167,975
Short-term investments

Investment companies		15,640,267		0		0		15,640,267

	$	16,728,928	$	888,746,951	$	16,069,956	$	921,545,835

As of July 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	$	(237,717	)	$	0	$	(237,717	)

+	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 nine months ended July 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			Common stocks		Term loans			Yankee corporate bonds and notes			Total
Balance as of November 01, 2011	$	5,243,760		$	0	$	3,971,316		$	191		$	9,215,267

Accrued discounts (premiums)		1,956			0		33,565			0			35,521

Realized gains (losses)		(3,211	)		0		1,192			0			(2,019	)

Change in unrealized gains (losses)		224,139			0		87,305			0			311,144

Purchases		0			0		14,954,419			0			14,954,419

Sales		(124,713	)		0		(190,458	)		0			(315,171	)

Transfers into Level 3		0			4,644		0			0			4,644

Transfers out of Level 3		(5,341,931	)		0		(2,792,027	)		(191	)		(8,134,149	)

Balance as of July 31, 2012	$	0		$	4,644	$	16,065,312		$	0		$	16,069,656


Change in unrealized gains (losses) relating to securities still held at July 31, 2012	$	0		$	0	$	161,711		$	0		$	161,711

Derivative transactions

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

At July 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 July 31, 2012		In Exchange for U.S. $		Unrealized Gains (Losses)
08/06/2012	State Street Bank		27,600,000 MYR	$	8,816,688	$	8,626,348	$	190,340
08/06/2012	State Street Bank		28,800,000 MYR		9,200,022		9,128,368		71,654
08/29/2012	State Street Bank		42,000,000 ZAR		5,056,320		5,096,809		(40,489	)
10/02/2012	State Street Bank		330,000,000 THB		10,441,585		10,298,018		143,567
10/09/2012	State Street Bank		56,400,000 MYR		17,938,075		18,057,823		(119,748	)

Forward foreign currency contracts to sell:


Exchange Date	Counterparty	Contracts to Deliver		U.S. Value at July 31, 2012		In Exchange for U.S. $		Unrealized Gains (Losses)
08/06/2012	State Street Bank		56,400,000 MYR	$	18,016,710	$	18,117,571	$	100,861
08/29/2012	State Street Bank		40,000,000 ZAR		4,815,543		4,699,557		(115,986	)
08/29/2012	State Street Bank		73,000,000 ZAR		8,788,366		8,544,007		(244,359	)
08/29/2012	State Street Bank		69,750,000 ZAR		8,397,103		8,251,899		(145,204	)
09/28/2012	State Street Bank		19,185,000 TRY		10,591,762		10,544,279		(47,483	)
10/18/2012	State Street Bank		2,700,000 EUR		3,325,275		3,294,405		(30,870	)

The Fund had average contract amounts of $55,148,017 and $21,121,731 in forward foreign currency exchange contracts to buy and forward foreign currency exchange contracts to sell, respectively, during the nine months ended July 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

FGLMC — Federal Government Loan Mortgage Company

FHA — Federal Housing Authority

FHLB — Federal Home Loan Bank

FHLMC — Federal Home Loan Mortgage Corporation

FICO — The Financing 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

LIQ — Liquidity Agreement

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

SPA — Standby Purchase Agreement

SPDR — Standard & Poor’s Depositary Receipts

STRIPS — Separate Trading of Registered Interest and Principal

Securities

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: September 24, 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: September 24, 2012

By:		/s/ Nancy Wiser

		Nancy Wiser
		Treasurer

Date: September 24, 2012