Annual Report 2020
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Annual Report 2020 Wells Fargo Bank, N.A. Collective Investment Funds Table of Contents Page Independent Auditors’ Report 1 Financial Statements: Wells Fargo/Causeway International Value CIT 3 Wells Fargo/Dodge & Cox Intermediate Bond CIT 10 Wells Fargo/Federated Total Return Bond CIT 20 Wells Fargo/Lazard International Equity CIT 36 Wells Fargo/MFS Value CIT 44 Wells Fargo/Multi-Manager Small Cap CIT 51 Wells Fargo/T. Rowe Price Institutional Equity Income Managed CIT 65 Wells Fargo/T. Rowe Price Institutional Large-Cap Growth Managed CIT 73 Wells Fargo/Voya Large-Cap Growth CIT 79 Notes to Financial Statements 85 Appendix 97 Regulatory Statement 101 KPMG LLP Two Financial Center 60 South Street Boston, MA 02111 Independent Auditors’ Report The Unitholders of the Funds and Wells Fargo Bank, N.A.: We have audited the accompanying financial statements of Wells Fargo/Causeway International Value CIT, Wells Fargo/Dodge & Cox Intermediate Bond CIT, Wells Fargo/Federated Total Return Bond CIT, Wells Fargo/Lazard International Equity CIT, Wells Fargo/MFS Value CIT, Wells Fargo/Multi-Manager Small Cap CIT, Wells Fargo/T. Rowe Price Institutional Equity Income Managed CIT, Wells Fargo/T. Rowe Price Institutional Large-Cap Growth Managed CIT and Wells Fargo/Voya Large-Cap Growth CIT (collectively, the Funds), nine of the collective investment funds constituting Wells Fargo Bank Collective Investment Funds for Employee Benefit Trusts, which comprise the statements of assets and liabilities, including the schedules of investments, as of December 31, 2020, and the related statements of operations, changes in net assets, and the financial highlights for the year or periods then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements and financial highlights in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements and financial highlights that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and financial highlights. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements and financial highlights, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements and financial highlights in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. Opinion In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Funds as of December 31, 2020, and the results of their operations, changes in their net assets, and the financial highlights for the year or periods then ended in accordance with U.S. generally accepted accounting principles. Boston, Massachusetts April 12, 2021 2 Wells Fargo Bank, N.A. Collective Investment Funds Wells Fargo/Causeway International Value CIT Statement of Assets and Liabilities December 31, 2020 Assets: Unaffiliated investments, at value (cost $102,036,370) $ 117,458,178 Affiliated investments, at value (cost $30,926) 30,926 Foreign currency, at value (cost $4) 4 Receivable for dividends 6,544,875 Receivable for investments sold 336,931 Receivable for fund units sold 69,679 Total assets 124,440,593 Liabilities: Payable for fund units repurchased 1,254,415 Payable for investments purchased 37,145 Trustee fee payable 80,189 Total liabilities 1,371,749 Net assets $ 123,068,844 Computation of net asset value: Class TR Net assets $ 23,728,661 Units outstanding 1,668,568 Net asset value per unit $ 14.22 Class F Net assets $ 86,473,618 Units outstanding 5,849,819 Net asset value per unit $ 14.78 Class N Net assets $ 12,864,631 Units outstanding 988,727 Net asset value per unit $ 13.01 Class N25 Net assets $ 1,934 Units outstanding 132 Net asset value per unit $ 14.65 See accompanying notes to financial statements. 3 Wells Fargo Bank, N.A. Collective Investment Funds Wells Fargo/Causeway International Value CIT Statement of Operations Year ended December 31, 2020 Investment income: Dividend income from unaffiliated investments (net of foreign taxes withheld of $233,998) $ 9,662,364 Non-cash dividend income 643,194 Dividend income from affiliated short term investment 33,899 Total income 10,339,457 Expenses: Trustee fee 1,985,879 TMR Program fees 82,552 Total expenses 2,068,431 Net investment income (loss) 8,271,026 Realized and unrealized gain (loss) on investments: Net realized gain (loss) on: Unaffiliated investments (76,697,041) Foreign currency transactions (2,379,811) Net realized gain (loss) on investment (79,076,852) Net change in unrealized appreciation (depreciation) on: Unaffiliated investments 24,197,593 Foreign currency translation of other assets and liabilities 534,782 Net change in unrealized appreciation (depreciation) on investments 24,732,375 Net realized and unrealized gain (loss) on investments (54,344,477) Net increase (decrease) in net assets resulting from operations $ (46,073,451) See accompanying notes to financial statements. 4 Wells Fargo Bank, N.A. Collective Investment Funds Wells Fargo/Causeway International Value CIT Statement of Changes in Net Assets Year ended December 31, 2020 Increase/(decrease) in net assets from operations: Net investment income (loss) $ 8,271,026 Net realized gain (loss) on investment (79,076,852) Net change in unrealized appreciation (depreciation) on investments 24,732,375 Net increase (decrease) in net assets resulting from operations (46,073,451) Participating unitholders transactions: Proceeds for issuance of units Class TR 8,258,987 Class F 130,402,085 Class N 4,153,370 Class N25 105 Payments for redemption of units Class TR (20,310,154) Class F (523,537,558) Class N (29,665,569) Class N25 (11) Change in net assets derived from unit transactions (430,698,745) Total increase (decrease) in net assets (476,772,196) Net assets: Beginning of year 599,841,040 End of year $ 123,068,844 Participating unitholders transactions: Class TR units issued 746,163 Class F units issued 12,351,994 Class N units issued 375,973 Class N25 units issued 9 Class TR units redeemed (1,814,459) Class F units redeemed (43,545,333) Class N units redeemed (3,274,759) Class N25 units redeemed (1) See accompanying notes to financial statements. 5 Wells Fargo Bank, N.A. Collective Investment Funds Wells Fargo/Causeway International Value CIT Financial Highlights Year ended December 31, 2020 Class TR Class F Class N Class N25 Per share operating performance: Unit value, beginning of year $ 13.43 $ 13.91 $ 12.25 $ 13.83 Income from investment operations: Net investment income (loss)(1) 0.22 0.28 0.23 0.20 Net realized and unrealized gain (loss) on investments 0.57 0.59 0.53 0.62 Total from investment operations 0.79 0.87 0.76 0.82 Unit value, end of year $ 14.22 $ 14.78 $ 13.01 $ 14.65 Total return 5.90% 6.24% 6.18% 5.92% Net assets, end of year $ 23,728,661 $ 86,473,618 $ 12,864,631 $ 1,934 Ratios: Ratio of expenses to average net assets 0.90% 0.56% 0.62% 0.91% Ratio of net investment income (loss) to average net assets 1.87% 2.43% 2.10% 1.69% Portfolio turnover rate 78% 78% 78% 78% (1) Based on average number of units outstanding. See accompanying notes to financial statements. 6 Wells Fargo Bank, N.A. Collective Investment Funds Wells Fargo/Causeway International Value CIT Schedule of Investments December 31, 2020 Fair ___________Shares ____________Cost ______________Value Common Stocks: 91.38% Communication Services: 1.19% Baidu, Inc ADR 6,789 $ ________________________________1,055,677____ $ ________________________________1,468,053____ Total Communication Services ________________________________1,055,677____ ________________________________1,468,053____ Consumer Discretionary: 5.46% Cie Financiere Richemont SA 28,024 1,923,598 2,531,743 Compass Group PLC 57,732 780,962 1,076,069 Sands China Ltd 282,800 1,109,570 1,242,103