Wells Fargo Advantage Growth Fund

Fund Overview

Although it's usually billed as a large-growth fund, Wells Fargo Advantage Growth is really a go-anywhere, multi-cap fund that taps into growth opportunities in overlooked and underappreciated firms. The fund's portfolio often deviates substantially from the category norm, with a greater percentage of assets in mid- and small-cap stocks. 

As of April 04, 2012, the fund has assets totaling almost $10.70 billion invested in 108 different holdings. Its portfolio primarily consists of domestic growth stocks with smaller amounts in foreign stocks.
 
In recent years, the fund has shifted slightly from more stable growers in the healthcare and consumer staples sectors to technology and energy. A stock like CarMax is a good example of what the fund looks for in potential investments, Ognar says. "We identified that it had the opportunity to grow its store base by about two to three times," he says. "And based on our analysis, they still haven't covered 50 percent of the U.S. major markets they were looking to get into." 
 
In the first half of 2010, the fund got a big boost from its holdings in information technology, which fund managers plan to monitor carefully as the demand for network bandwidth grows along with mobile technology. Another big win came from the fund's specialty-retail holdings in companies such as Netflix  and Chipotle Mexican Grill, a position it  reduced in the latter half of 2010 after massive appreciation. The fund has returned 14.15 percent over the past year and 35.38 percent over the past three years. 
 
Over the long term, the fund has generally outperformed the S&P 500 and its benchmark, returning 11.43 percent over the past five years and 9.29 percent over the past decade.

Investment Strategy

Although the fund's prospectus states that it invests in large-cap companies ($3 billion and greater), Wells Fargo Advantage Growth Fund actually invests in a fairly diverse cross-section of the market with more than half of its assets in medium- and small-cap stocks. Managment will go almost anywhere to find companies with good growth prospects that have been looked over by other investors. But that's not all it takes for fund manager Tom Ognar to sign on. "We really challenge ourselves to make sure that the stocks we have are really benefiting from company-specific dynamics and aren't just riding the crest of a better performing economy," he says.

Role in Portfolio

Morningstar calls this fund a "supporting player."

Fund Opinion

In the annual Lipper/Barron's Fund Families Survey of 2010, Wells Fargo Fund Management family ranks 29 out of 57 fund families surveyed.

Lipper

Management

According to Morningstar, fund managers Thomas Ognar, Bruce Olson, and Joseph Eberhardy practice a fairly aggressive strategy with this fund, but Ognar prefers the word robust. Ognar took the reins in 2002--his first gig as a portfolio manager--after his father Ron, who had managed the fund since its 1994 inception, stepped down. An additional four analysts round out the investment team.

Morningstar gives this fund a stewardship rating of D on a scale of A to F. "Overall, this fund is a decent, but not standout, steward of capital. Its management compensation plan is focused on shorter periods of performance, and its fees could use more work."

Morningstar 2010-04-01

Performance

The fund has returned 14.15 percent over the past year, 35.38 percent over the past three years, 11.43 percent over the past five years, and 9.29 percent over the past decade.

Hypothetical Growth of $10,000

Updated 03.31.2012

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Holdings

The fund holds a wide variety of growth stocks, mostly domestic with a smaller amount of foreign stocks. Management tends to invest in sectors with rapid revenue and earnings growth opportunities, which in recent years have been healthcare, technology, and energy.

Asset Allocation

	% Long	% Net
Cash	2.2	2.2
Stocks	93.72	93.72
Bonds	0.0	0.0
Other	0.0	0.0
Foreign Bonds	0.0	0.0
Foreign Stocks	4.08	4.08
Convertible	0.0	0.0
Preferred	0.0	0.0

Updated 02.29.2012

Top Holdings

Performance as of 03.31.2012

Portfolio as of 02.29.2012

	Ticker	YTD Return %	% Net Assets
Apple, Inc.	AAPL	52.75	7.84
Pioneer Natural Resources Company	PXD	25.32	2.92
Cognizant Technology Solutions Corporation Class A	CTSH	19.75	2.89
EMC Corporation	EMC	37.93	2.71
Alexion Pharmaceuticals, Inc.	ALXN	30.14	2.65

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Fees

 Wells Fargo Advantage Growth Fund has an expense ratio of 1.24 percent.

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Risk

As with any stock fund, market volatility can affect performance.

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