Wells Fargo Advantage Funds Offers GMO Absolute Return Strategy Via New Fund
SAN FRANCISCO — March 1, 2012
Wells Fargo Funds Management, LLC, the investment advisor to Wells Fargo Advantage Funds, announced today the launch of the Wells Fargo Advantage Absolute Return Fund (WARAX), which invests substantially all of its assets in a master fund that is managed by respected institutional money manager GMO LLC. The Wells Fargo Advantage Absolute Return Fund makes GMO’s absolute return strategy available to individual investors for the first time. The fund is the second Wells Fargo Advantage Fund to offer investors access to a GMO-managed strategy.
“We believe this fund, which is sufficiently nimble to take advantage of any and all global market opportunities, provides investors an appealing alternative to traditional, style box-focused mutual funds,” said Karla Rabusch, president of Wells Fargo Advantage Funds. “Our new fund has the added benefit of supplying our investor clients with a second, distinct investment vehicle from which they can tap into a GMO-managed strategy.”
Absolute return investing is an alternative to conventional asset allocation. The overarching aim of the Wells Fargo Advantage Absolute Return Fund is to generate a positive return and prevent loss of capital. Specifically, the fund strives to generate a positive total return over inflation during a market cycle, regardless of market conditions. The fund will strive to achieve this goal by using an approach that is founded on the premise that asset class valuations and returns revert to mean levels over time.
Among the most notable aspects of the Wells Fargo Advantage Absolute Return Fund are its flexibility and the expertise of GMO. The fund is not constrained by asset class weights or specific exposure to any particular market, sector, country, or capitalization. GMO is free to look for opportunities among a broad array of investments, including alternative strategies. To be sure, GMO will use a wide range of nontraditional strategies, including Treasury Inflation-Protected Securities (TIPS), emerging debt, currencies, options, spread trades, and natural resources. The fund can also invest in commodities, real estate, and long/short strategies.
GMO, which also manages the master fund in which the Wells Fargo Advantage Asset Allocation Fund invests, has honed its ability to warn of bubbles and take advantage of opportunities in various asset classes. To assess relative values and risks among asset classes, GMO developed a proprietary seven-year forecasting model that has guided its investment decisions for two decades. GMO will apply this model to the Wells Fargo Advantage Absolute Return Fund.
The relationship with GMO illustrates how Wells Fargo Advantage Funds’ multi-boutique model leverages the expertise of independent investment teams. This approach allows managers to operate autonomously, using their own proprietary research and analysis to implement their respective strategies. GMO, which has consistently provided value-added performance across a broad range of asset classes, now brings its ability to identify mispriced asset classes to two Wells Fargo Advantage Funds, giving investors access to its experience and capabilities.
Absolute return funds are not intended to outperform stocks and bonds in strong markets and there is no guarantee of positive returns or that the Fund's objectives will be achieved.
Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. In general, when interest rates rise, bond values fall and investors may lose principal value. Foreign investments are especially volatile and can rise or fall dramatically due to differences in the political and economic conditions of the host country. The funds will indirectly be exposed to all of the risks of an investment in the underlying funds and will indirectly bear expenses of the underlying funds. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). The funds are exposed to high-yield risk, mortgage- and asset-backed securities risk, and smaller-company securities risk. Consult the fund’s prospectus for additional information on these and other risks.
Carefully consider a fund’s investment objectives, risks, charges, and expenses before investing. For a current prospectus and, if available, a summary prospectus, containing this and other information, visit wellsfargoadvantagefunds.com. Read it carefully before investing.
Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the funds. The funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company. Wells Fargo Funds Distributor, LLC and GMO LLC are not affiliates.
GMO LLC is a global investment management firm committed to providing sophisticated clients with superior asset management solutions and services. The firm offers a broad range of investment products, including equity and fixed-income strategies across global developed and emerging markets, as well as absolute return strategies. GMO’s client base includes endowments, pension funds, public funds, foundations, and cultural institutions. GMO manages the master funds in which the Wells Fargo Advantage Asset Allocation Fund and the Wells Fargo Advantage Absolute Return Fund invest
NOT FDIC INSURED· NOBANK GUARANTEE· MAY LOSE VALUE